- Published: 08 May 2012
- Written by Editor
IEC Announces Outstanding Second Quarter Results for Fiscal 2012
Q2 Operating Margin Improved to 11.8% Compared to 9.5% in Q2 2011; Q2 Earnings per Share Increased to $0.26 Compared to $0.17 per Share in Q2 2011; Debt Continues to Be Reduced
IEC Electronics Corp. (IEC) announced its results for the fiscal second quarter ending March 30, 2012.
For the quarter ended March 30, 2012 the Company reported revenue of $38,020,000, and net income of $2,607,000 or $0.26 per diluted share. This compares to revenue of $35,085,000, and net income of $1,747,000 or $0.17 per diluted share for the quarter ended April 1, 2011.
IEC had revenue of $71,878,000 and net income of $3,556,000 or $0.36 per diluted share for the first six months of fiscal 2012. This compares to revenue of $63,729,000 and net income of $2,796,000 or $0.28 per diluted share for the first six months of fiscal 2011.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the second quarter of fiscal 2012 were $5,483,000 or $0.55 per diluted share, compared to $4,005,000 or $0.40 per diluted share for the same quarter last year. The Company views EBITDA as a useful measure of operating performance given its strong operating margins and large net operating loss carryforward (NOL). EBITDA and EBITDA per basic and diluted shares are reconciled to GAAP measures in the attachment to this release.
W. Barry Gilbert, Chairman of the Board and CEO, stated, "This was an excellent quarter with meaningful improvements across all of our important financial metrics. Most significantly, our gross profit margin reached 21.7 % and operating margin reached 11.8%. These results are some of the best in the company's history, and particularly strong for our industry.
"When we announced our first quarter, we expected our operational cost containment programs to take longer to impact our performance. During the second quarter, these containments certainly supported our results; however it was the shift to higher margin product mix in combination with operational improvement in all segments of the business that produced these historically strong results. All of our businesses operated better than they did last quarter. SCB has improved significantly, has made a positive contribution for the quarter, and we expect their contribution to continue. Some previously delayed programs are starting to be released. Furthermore, SCB has picked up a number of new programs and a significant new customer.
"While our operating income margin saw a sharp increase to 11.8%, we expect operating margins to move closer to 10% over the next 18 months, still well ahead of average operating margin for the last two years of approximately 8.0%. In addition, with cash from improved margins we continue to pay down our debt. At this time, with our current visibility, we expect to reduce our debt by approximately $9 million for the fiscal year ending in September.
"Consistent with past practice, we do not report backlog during the year but we do offer a mid-year update. In that regard, our current backlog is about 10% lower than the backlog figure reported in our 10-K for fiscal 2011. As in the past, it is important to note that some of the backlog extends past 2012 into 2013 and 2014.
"Finally, our sector performance has shifted somewhat, creating a slightly more balanced portfolio. Our military/aerospace sector remains strong, though decreased as a percentage of our sales to 43% for the first six months of fiscal 2012, as compared to 51% of sales at the end of fiscal 2011. This decrease is attributable to the slowdown in military spending; however, we have not had any program cancellations. Our medical and other sector has stayed relatively constant at 25% of sales for the first six months of fiscal 2012 compared to 26% at the close of fiscal 2011. Our industrial and communications sectors improved to 32% of sales for the first six months of this year compared to 23% at the close of fiscal year end 2011.
"Our Company continues to move forward and we are confident that we are creating future value for our shareholders and opportunity for our employees."
Conference Call
IEC will host a conference call with investors at 10:00 a.m. Eastern time today, May 8, 2012 to discuss its financial results for the quarter ended March 30, 2012. The call may be accessed in the U.S. and Canada by dialing toll-free 1-877-407-9210. International callers may access the call by dialing 1-201-689-8049. To access a live webcast of the conference call, log onto the IEC website at http://www.iec-electronics.com or http://www.InvestorCalendar.com. A replay of the teleconference will be available for 30 days after the call and may be accessed domestically by dialing 1-877-660-6853 and international callers may dial 1-201-612-7415. Callers must enter account number 286 and conference number 392781.
About IEC Electronics
IEC Electronics Corporation is a premier provider of electronic manufacturing services ("EMS") to advanced technology companies primarily in the military and aerospace, medical, industrial and computing sectors. The Company specializes in the custom manufacture of high reliability, complex circuit cards, system level assemblies, a wide array of custom cable and wire harness assemblies, precision sheet metal products, and advanced research and testing services. As a full service EMS provider, IEC is a world-class ISO 9001:2008, AS9100 and ISO13485 certified company. The AS9100 certification enables IEC to serve the military and commercial aerospace markets. The ISO13485 certification supports the quality requirements of medical device markets. The Company is also ITAR registered and NSA approved under the COMSEC standard. Dynamic Research and Testing Laboratory (DRTL) the Company's newest business unit, is an ISO 17025 accredited laboratory specializing in the testing and detection of counterfeit electronic parts, as well as component risk mitigation and advanced failure analysis. IEC Electronics is headquartered in Newark, NY (outside of Rochester) and also has operations in Victor, NY, Rochester, NY, Albuquerque, NM and Bell Gardens, CA. Additional information about IEC can be found on its web site at www.iec-electronics.com.
The foregoing, including any discussion regarding the Company's future prospects, contains certain forward-looking statements that involve risks and uncertainties, including uncertainties associated with economic conditions in the electronics industry, particularly in the principal industry sectors served by the Company, changes in customer requirements and in the volume of sales to principal customers, competition and technological change, the ability of the Company to control manufacturing and operating costs, the ability of the Company to develop and maintain satisfactory relationships with vendors, and the ability of the Company to efficiently integrate acquired companies into its business. The Company's actual results of operations may differ significantly from those contemplated by any forward-looking statements as a result of these and other factors, including factors set forth in the Company's 2011 Annual Report on Form 10-K and in other filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise forward-looking information, whether as a result of new, updated information future events or otherwise.
IEC ELECTRONICS CORP - CONSOLIDATED
BALANCE SHEET
MAR 30, 2012 AND SEP 30, 2011
(In Thousands)
MAR 30, 2012 SEP 30, 2011
ASSETS
CURRENT ASSETS
Cash - -
Accounts Receivable 20,979 19,423
Inventories 19,005 16,093
Deferred Income Taxes 3,863 3,863
Other Current Assets 2,714 1,834
------------ ------------
Total Current Assets 46,561 41,213
NET FIXED ASSETS 17,747 17,886
NON-CURRENT ASSETS
Goodwill 13,810 13,810
Intangible Assets 5,738 5,964
Deferred Income Taxes 4,738 6,768
Other Non-Current Assets 150 179
------------ ------------
TOTAL ASSETS 88,744 85,820
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short Term Borrowings 6,779 6,896
Accounts Payable 16,303 12,750
Accrued Payroll and Related Taxes 2,707 3,092
Other Accrued Expenses 775 851
Other Current Liabilities 266 332
------------ ------------
Total Current Liabilities 26,830 23,921
------------ ------------
LONG TERM DEBT 24,379 28,213
------------ ------------
TOTAL LIABILITIES 51,209 52,134
============ ============
SHAREHOLDERS' EQUITY
Authorized - 50,000,000 shares
Issued - 10,835,533, Outstanding - 9,820,075
Common stock, par value $.01 per share 109 108
Treasury Shares at Cost - 1,015,458 shares (1,435) (1,435)
Additional Paid-in Capital 42,952 42,660
Retained Earnings (4,091) (7,647)
------------ ------------
TOTAL SHAREHOLDERS' EQUITY 37,535 33,686
TOTAL LIABILITIES & EQUITY 88,744 85,820
============ ============
IEC ELECTRONICS CORP - CONSOLIDATED
STATEMENT OF INCOME
FOR QUARTER END & YTD MAR 30, 2012 AND APR 1, 2011
(In Thousands)
ACTUAL ACTUAL ACTUAL ACTUAL
QUARTER QUARTER YTD YTD
MAR 30, APR 1, MAR 30, APR 1,
2012 2011 2012 2011
Sales 38,020 35,085 71,878 63,729
Cost of Sales 29,764 27,723 58,136 51,564
----------- ----------- ----------- -----------
Gross Profit 8,256 7,362 13,742 12,165
Less: Operating Expenses
Selling & Administrative
Expenses 3,770 4,038 8,307 6,879
----------- ----------- ----------- -----------
Operating Profit 4,486 3,324 5,435 5,286
Interest and Financing
Expense 292 480 644 723
Other (Income)/Expense 58 116 (849) 130
----------- ----------- ----------- -----------
Net Income before Income
Taxes 4,136 2,728 5,640 4,433
Provision for Income Tax 1,529 981 2,084 1,637
----------- ----------- ----------- -----------
Net Income 2,607 1,747 3,556 2,796
=========== =========== =========== ===========
Basic Earnings Per Share $ 0.27 $ 0.18 $ 0.37 $ 0.30
Diluted Earnings Per Share $ 0.26 $ 0.17 $ 0.36 $ 0.28
Basic Shares 9,666,920 9,576,152 9,656,431 9,399,555
Diluted Shares 10,038,406 9,996,928 9,951,727 9,887,922
IEC ELECTRONICS CORP - CONSOLIDATED
RECONCILIATION OF NET INCOME TO EBITDA
FOR QUARTER END & YTD MAR 30, 2012 & APR 1, 2011
ACTUAL ACTUAL ACTUAL ACTUAL
QUARTER QUARTER YTD YTD
MAR 30, APR 1, MAR 30, APR 1,
2012 2011 2012 2011
Net Income 2,607 1,747 3,556 2,796
Provision for / (benefit from)
Income Tax 1,529 981 2,084 1,637
Depreciation & Amortization
Expense 1,055 797 2,070 1,286
Net Interest Expense / (Income) 292 480 644 723
---------- ---------- ---------- ----------
EBITDA 5,483 4,005 8,354 6,442
Basic Earnings per Share 0.27 0.18 0.37 0.30
Basic EBITDA per Share 0.57 0.42 0.87 0.69
Basic Earnings per Share 0.26 0.17 0.36 0.28
Diluted EBITDA per Share 0.55 0.40 0.84 0.65
Basic Shares 9,666,920 9,576,152 9,656,431 9,399,555
Diluted Shares 10,038,406 9,996,928 9,951,727 9,887,922
Contact:
Vincent Leo
Acting Vice President & CFO
IEC Electronics Corp.
(315)332-4308
Email Contact
John Nesbett or Jennifer Belodeau
Institutional Marketing Services
(203)972-9200
