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IEC Electronics Corp, today announced results for the third quarter and nine months ended June 26, 2015. For the third quarter of fiscal year 2015, the Company recorded revenue of $34.4 million, an increase of 4% as compared to revenue of $33 million during the third quarter of the last fiscal year and an increase of 5% sequentially compared to the second quarter of 2015. Gross profit margin for the third quarter improved to 13.7% as compared to 11.5% in the same quarter last year. Selling and administrative expenses, excluding restatement and related expenses, increased to $4.0 million from $3.2 million primarily due to higher temporary labor costs, bad debt expense compared to a benefit in the same quarter last year, and expenses related to the amendment of the Company’s debt agreement and the divestiture of its Southern California Braiding subsidiary. The Company also reported an impairment charge of $4.1 million in the quarter related to its divestiture of SCB. Net loss for the quarter was $4.0 million, or a loss of $0.39 per share, as compared to a net loss of $60,000, or a loss of $0.01 per share, in the same prior year period. Excluding the impairment, IEC would have reported net income of $40,000 or less than $0.01 per share.
Revenues for the nine months ended June 26, 2015 decreased 2% to $98.3 million as compared to revenues of $100 million in the same prior year period. Gross profit margin for the first nine months of fiscal 2015 was 10.7%, down from 11.8% in the same prior year period. The decline in gross profit margin is attributed to lower leverage of overhead at the Company’s Albuquerque and SCB operating locations as well as approximately $0.7 million of additional stock based compensation attributed to the change of control that took place in February 2015, partially offset by better performance at IEC’s other operating locations. Selling and administrative expenses, excluding restatement and related expenses, increased to $14.3 million compared to $10.9 million in the same period last year, primarily due to expenses related to the proxy contest and resulting change of control which totaled $3.3 million. Net loss for the first nine months of fiscal 2015 was $10.3 million, or a loss of $1.03 per share, as compared to a net loss of $16.1 million, or a loss of $1.64 per share in the first nine months of fiscal 2014.
Jeffrey T. Schlarbaum, President & CEO of IEC Electronics said, “We are making steady progress executing the strategies we’ve put in place to stabilize our business, reestablish the confidence of our customers and return to operational excellence. As a result of these initial efforts we’re pleased to have seen organic revenue growth with improved margins and a modest profit excluding the goodwill impairment charge we took during the third quarter. Additionally, we were able to reduce our net debt by approximately $3.0 million during the quarter.”
“Subsequent to the close of the quarter, we divested our SCB subsidiary for roughly $2.5 million. SCB absorbed disproportionate resources relative to its size and strategic importance to our overall business, and the sale allows us to focus on our core business and vertical markets. Our operational improvements, while still at an early stage, are taking hold and we are confident in our ability to continue to drive improved performance and return the business to sustained profitability.” Mr. Schlarbaum concluded.
About IEC Electronics
IEC Electronics is a provider of electronic manufacturing services ("EMS") to advanced technology companies that require mission-critical applications, primarily in the military and aerospace, medical, industrial and communications sectors. The Company specializes in the custom manufacture of high reliability, complex circuit boards, system level assemblies, a wide array of custom wire and cable harness assemblies, precision metal assemblies, and provides laboratories for advanced research and testing services. As a full service EMS provider, IEC holds all appropriate certifications for the market sectors it supports including ISO 9001:2008, AS9100C, ISO 13485, Nadcap and IPC QML. IEC Electronics is headquartered in Newark, NY (outside of Rochester) and also has operations in Rochester, NY, and Albuquerque, NM. Additional information about IEC can be found on its web site at www.iec-electronics.com