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IEC Announces Solid Fourth Quarter and Fiscal 2012

Tuesday, November 20, 2012 8:30 AM


NEWARK, NY -- (Marketwire) -- 11/20/12 -- IEC Electronics Corp. (NYSE MKT: IEC) announced its results for the fourth quarter and fiscal year ending September 30, 2012.

For the quarter, the Company reported revenue of $37.1 million and net income of $2.0 million or $0.20 per diluted share. This compares with revenue of $34.9 million and net income of $2.6 million, or $0.26 per share in the fourth quarter of the prior year. In the fourth quarter of fiscal 2011 approximately $1.1 million or $0.08 per share stemmed from a positive adjustment related to Southern California Braiding (SCB). Fourth quarter 2011 EPS excluding this adjustment was $0.18.

For fiscal year 2012, IEC reported revenue of $145.0 million compared to revenue of $133.3 million for fiscal 2011. Net income after tax was $7.8 million, or $0.78 per fully diluted share, for year end 2012 compared to net income after tax of $6.8 million, or $0.68 per fully diluted share, for year end 2011. Both years were impacted by the positive adjustment related to the Company's SCB acquisition. For fiscal 2012 excluding this one-time adjustment related to the SCB acquisition, the Company achieved net income of $7.1 million or $0.71 per fully diluted share. In 2011, net income excluding this adjustment was $6.0 million, or $0.60 per fully diluted share.

W. Barry Gilbert, Chairman of the Board and CEO, stated, "The fourth quarter of fiscal 2012 was a good quarter. Our operating margins for the quarter were 8.7% as compared to 7.1% for Q4 fiscal 2011. For fiscal 2012 our operating margins were 8.4% as compared to 7.8% for fiscal 2011. We achieved the full year results despite our poor operating margins of 2.8% in the first quarter which was followed by three strong quarters. We are pleased with the increase in margin as we move toward our long term goal of operating margins in excess of 9%.

"Our backlog at September 30, 2012 was $94.8 million as compared to backlog of $121.5 million at September 30, 2011. While the backlog was somewhat influence by weak global economic conditions for one of our customers, most of the decline resulted from one customer changing from annual orders to placing orders quarterly. We do not discuss backlog for any specific sector, however, I can say our military backlog has increased. More importantly we have not lost any customers.

"In 2010 we borrowed $26 million to acquire SCB, increasing our debt at the time to over $47 million. Since this acquisition 21 months ago, we have reduced our debt by $22 million. At the end of fiscal 2012, our net debt (debt less cash) outstanding was $25.0 million. We view our current net debt, at less than 1.5 times EBITDA, to be the appropriate level such that we are starting to accumulate cash on the balance sheet.

Gilbert continued, "Our customer mix shifted in 2012. The Medical sector represents 22% of revenue ($31.5 million), as compared to 22% of revenue ($29.0 million) in fiscal 2011. The Military/Aerospace sector, which had been experiencing delays through most of the year, represents 43% of revenue ($62.7 million) in fiscal 2012, down from 56% of revenue ($74.7 million) in fiscal 2011. Sales to our Industrial customer base increased markedly to $36.8 million, representing 25.0% of 2012 revenue, up from 13.0% of revenue ($17.5 million) in fiscal 2011. We saw strength in the Industrial sector in the second half of the year.

"We expect revenue growth from our existing businesses to be between 9% and 14% for fiscal 2013. We are currently forecasting that net income per diluted share will likely grow from $0.71 in fiscal 2012 (excluding the $0.07 impact of the SCB adjustment) to between $0.88 and $0.93 per diluted share for fiscal 2013.

"Our Military and Aerospace platforms are solid and expanding. In fiscal 2012 a number of our customers were affected by congressional funding delays. For fiscal 2013, none of our customers have informed us that they expect delays in their programs. Moreover, none of our customers expect sequestration to impact the platforms we support. The Industrial sector appears to be coming under pressure as the broader economy continues to struggle. However, the pressure is not evenly distributed among the niches we serve; some of our Industrial customers continue to grow and expand their business with IEC. Our growth in the Medical sector is encouraging and we believe we will continue expanding our presence in that market after relatively modest growth this past year. We have woven together a set of capabilities our customers and prospective customers are finding attractive."

Mr. Gilbert concluded, "As we have said previously, we firmly believe the Company is continuing to move in the right direction and we are confident that we are creating future value for our customers and shareholders and opportunity for our employees."

Conference Call
IEC will host a conference call with investors at 10:00 a.m. Eastern time today, November 20, 2012 to discuss its financial results for the quarter and they fiscal year ended September 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 conference i.d. number 403372.

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 for counterfeit electronics parts. IEC Electronics is headquartered in Newark, NY (near 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. EBITDA, a non-GAAP measure is reconciled to GAAP measures in the attachment to this release.

                               BALANCE SHEET
                       SEP 30, 2012 AND SEP 30, 2011
                               (In Thousands)
                                                 SEP 30, 2012  SEP 30, 2011
Cash                                                    2,662             -
Accounts Receivable                                    23,193        19,423
Inventories                                            19,348        16,093
Deferred Income Taxes                                   1,365         3,863
Other Current Assets                                      401         1,834
                                                 ------------  ------------
Total Current Assets                                   46,969        41,213
                                                 ------------  ------------
NET FIXED ASSETS                                       17,120        17,886
Goodwill                                               13,810        13,810
Intangible Assets                                       5,511         5,964
Deferred Income Taxes                                   5,433         6,768
Other Non-Current Assets                                  121           179
                                                 ------------  ------------
TOTAL ASSETS                                           88,964        85,820
                                                 ============  ============
Short Term Borrowings                                   6,533         6,896
Accounts Payable                                       15,697        12,750
Accrued Payroll and Related Taxes                       2,676         3,092
Other Accrued Expenses                                    946           851
Other Current Liabilities                                 146           332
                                                 ------------  ------------
Total Current Liabilities                              25,998        23,921
                                                 ------------  ------------
LONG TERM DEBT                                         21,104        28,213
                                                 ------------  ------------
TOTAL LIABILITIES                                      47,102        52,134
Authorized - 50,000,000 shares
Issued - 10,943,185 Outstanding - 9,927,727
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                             43,075        42,660
Retained Earnings                                         113        (7,647)
                                                 ------------  ------------
TOTAL SHAREHOLDER'S EQUITY                             41,862        33,686
                                                 ------------  ------------
TOTAL LIABILITIES & EQUITY                             88,964        85,820
                                                 ============  ============

                            STATEMENT OF INCOME
           FOR QUARTER END & YTD SEPT 30, 2012 AND SEPT 30, 2011
                               (In Thousands)
                             ACTUAL      ACTUAL       ACTUAL       ACTUAL
                            QUARTER     QUARTER        YTD          YTD
                            SEPT 30,    SEPT 30,     SEPT 30,     SEPT 30,
                              2012        2011         2012         2011
Sales                          37,062      34,941      144,963      133,296
Cost of Sales                  30,263      27,917      117,007      107,539
                          ----------- -----------  -----------  -----------
Gross Profit                    6,799       7,024       27,956       25,757
Less: Operating Expenses
Selling & Administrative
 Expenses                       3,579       4,544       15,765       15,368
                          ----------- -----------  -----------  -----------
Operating Profit                3,220       2,480       12,191       10,389
Interest and Financing
 Expense                          297         387        1,227        1,601
Other (Income)/Expense              1      (1,162)      (1,050)      (1,028)
                          ----------- -----------  -----------  -----------
Net Income before Income
 Taxes                          2,922       3,255       12,014        9,816
Provision for Income Tax          921         624        4,254        3,056
                          ----------- -----------  -----------  -----------
Net Income                      2,001       2,631        7,760        6,760
                          =========== ===========  ===========  ===========

Basic Earnings Per Share  $      0.21 $      0.27  $      0.80  $      0.71
Diluted Earnings Per
 Share                    $      0.20 $      0.26  $      0.78  $      0.68
Basic Shares                9,660,253   9,637,196    9,663,865    9,461,240
Diluted Shares              9,982,368  10,000,506    9,969,071    9,967,702

             FOR QUARTER END & YTD SEPT 30, 2012 & SEPT 30, 2011
                                   ACTUAL     ACTUAL     ACTUAL     ACTUAL
                                   QUARTER    QUARTER      YTD        YTD
                                  SEPT 30,   SEPT 30,   SEPT 30,   SEPT 30,
                                    2012       2011       2012       2011
Net Income                            2,001      2,631      7,760      6,760
Provision for / (benefit from)
 Income Tax                             921        624      4,254      3,056
Depreciation & Amortization
 Expense                              1,119      1,054      4,297      3,257
Net Interest Expense / (Income)         297        387      1,227      1,601
                                 ---------- ---------- ---------- ----------
EBITDA                                4,338      4,696     17,538     14,674

Basic Earnings per Share               0.21       0.27       0.80       0.71
Basic EBITDA per Share                 0.45       0.49       1.81       1.55
Basic Earnings per Share               0.20       0.26       0.78       0.68
Diluted EBITDA per Share               0.43       0.47       1.76       1.47
Basic Shares                      9,660,253  9,637,196  9,663,865  9,461,240
Diluted Shares                    9,982,368 10,000,506  9,969,071  9,967,702

Vincent Leo
IEC Electronics Corp.
(315) 332-4443

John Nesbett/Jennifer Belodeau
Institutional Marketing Services
(203) 972-9200
Email Contact

(Source: Market Wire )
(Source: Quotemedia)


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