Delaware | 13-3458955 | |
(State or other jurisdiction of | (I.R.S. Employer Identification No.) | |
incorporation or organization) |
Large accelerated filer ¨ | Accelerated filer ¨ | |
Non-accelerated filer ¨ | Smaller reporting company x |
April 1, 2016 | September 30, 2015 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash | $ | 1,126 | $ | 407 | |||
Accounts receivable, net of allowance | 18,231 | 24,923 | |||||
Inventories, net | 23,894 | 25,753 | |||||
Other current assets | 1,259 | 1,444 | |||||
Total current assets | 44,510 | 52,527 | |||||
Fixed assets, net | 15,065 | 15,443 | |||||
Intangible assets, net | 115 | 134 | |||||
Goodwill | 101 | 101 | |||||
Other long term assets | 264 | 57 | |||||
Total assets | $ | 60,055 | $ | 68,262 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Current portion of long-term debt | $ | 2,679 | $ | 2,908 | |||
Accounts payable | 11,839 | 18,336 | |||||
Accrued payroll and related expenses | 3,606 | 2,338 | |||||
Other accrued expenses | 679 | 1,318 | |||||
Customer deposits | 4,746 | 5,761 | |||||
Total current liabilities | 23,549 | 30,661 | |||||
Long-term debt | 24,161 | 28,323 | |||||
Other long-term liabilities | 544 | 590 | |||||
Total liabilities | 48,254 | 59,574 | |||||
STOCKHOLDERS' EQUITY | |||||||
Preferred stock, $0.01 par value: 500,000 shares authorized; none issued or outstanding | — | — | |||||
Common stock, $0.01 par value: | |||||||
Authorized: 50,000,000 shares | |||||||
Issued: 11,314,965 and 11,232,017 shares, respectively | |||||||
Outstanding: 10,259,477 and 10,196,145 shares, respectively | 113 | 112 | |||||
Additional paid-in capital | 46,013 | 45,845 | |||||
Retained earnings/(accumulated deficit) | (32,736 | ) | (35,740 | ) | |||
Treasury stock, at cost: 1,055,488 and 1,035,872 shares, respectively | (1,589 | ) | (1,529 | ) | |||
Total stockholders' equity | 11,801 | 8,688 | |||||
Total liabilities and stockholders' equity | $ | 60,055 | $ | 68,262 |
Three Months Ended | Six Months Ended | ||||||||||||||
April 1, 2016 | March 27, 2015 | April 1, 2016 | March 27, 2015 | ||||||||||||
Net sales | $ | 33,148 | $ | 31,655 | $ | 66,081 | $ | 60,484 | |||||||
Cost of sales | 27,412 | 28,682 | 54,528 | 54,056 | |||||||||||
Gross profit | 5,736 | 2,973 | $ | 11,553 | $ | 6,428 | |||||||||
Selling and administrative expenses | 3,721 | 6,320 | 7,755 | 9,566 | |||||||||||
Restatement and related expenses | 41 | 730 | (8 | ) | 641 | ||||||||||
Operating profit/(loss) | 1,974 | (4,077 | ) | 3,806 | (3,779 | ) | |||||||||
Interest and financing expense | 513 | 665 | 802 | 1,199 | |||||||||||
Income/(loss) from continuing operations before income taxes | 1,461 | (4,742 | ) | 3,004 | (4,978 | ) | |||||||||
Provision for/(benefit from) income taxes | — | — | — | — | |||||||||||
Income/(loss) from continuing operations | 1,461 | (4,742 | ) | 3,004 | (4,978 | ) | |||||||||
Loss on discontinued operations, net | — | (794 | ) | — | (1,353 | ) | |||||||||
Net income/(loss) | $ | 1,461 | $ | (5,536 | ) | $ | 3,004 | $ | (6,331 | ) | |||||
Basic net income/(loss) per common and common equivalent share: | |||||||||||||||
Earnings/(loss) from continuing operations | $ | 0.14 | $ | (0.47 | ) | $ | 0.29 | $ | (0.50 | ) | |||||
Earnings/(loss) from discontinued operations | — | (0.08 | ) | $ | — | $ | (0.14 | ) | |||||||
Net earnings/loss | $ | 0.14 | $ | (0.55 | ) | $ | 0.29 | $ | (0.63 | ) | |||||
Diluted net income/(loss) per common and common equivalent share: | |||||||||||||||
Earnings/(loss) from continuing operations | $ | 0.14 | $ | (0.47 | ) | $ | 0.29 | $ | (0.50 | ) | |||||
Earnings/(loss) from discontinued operations | — | (0.08 | ) | — | (0.14 | ) | |||||||||
Net earnings/loss | $ | 0.14 | $ | (0.55 | ) | $ | 0.29 | $ | (0.63 | ) | |||||
Weighted average number of common and common equivalent shares outstanding: | |||||||||||||||
Basic | 10,205,031 | 10,075,719 | 10,210,539 | 9,972,692 | |||||||||||
Diluted | 10,205,031 | 10,075,719 | 10,210,539 | 9,972,692 |
Common Stock, par $0.01 | Additional Paid-In Capital | Retained Earnings/ (Accumulated Deficit) | Treasury Stock, at cost | Total Stockholders' Equity | |||||||||||||||
Balances, September 30, 2014 | $ | 111 | $ | 44,302 | $ | (25,554 | ) | $ | (1,454 | ) | $ | 17,405 | |||||||
Net loss | — | — | $ | (6,331 | ) | — | (6,331 | ) | |||||||||||
Stock-based compensation | — | 1,954 | — | — | 1,954 | ||||||||||||||
Restricted (non-vested) stock grants, net of forfeitures | 2 | (2 | ) | — | — | — | |||||||||||||
Exercise of stock options | — | 78 | — | (75 | ) | 3 | |||||||||||||
Shares withheld for payment of taxes upon vesting of restricted stock | (1 | ) | (603 | ) | — | — | (604 | ) | |||||||||||
Balances, March 27, 2015 | $ | 112 | $ | 45,729 | $ | (31,885 | ) | $ | (1,529 | ) | $ | 12,427 |
Common Stock, par $0.01 | Additional Paid-In Capital | Retained Earnings/ (Accumulated Deficit) | Treasury Stock, at cost | Total Stockholders' Equity | |||||||||||||||
Balances, September 30, 2015 | $ | 112 | $ | 45,845 | $ | (35,740 | ) | $ | (1,529 | ) | $ | 8,688 | |||||||
Net income | — | — | $ | 3,004 | — | 3,004 | |||||||||||||
Stock-based compensation | — | 162 | — | — | 162 | ||||||||||||||
Restricted (non-vested) stock grants, net of forfeitures | 1 | (1 | ) | — | — | — | |||||||||||||
Exercise of stock options | — | — | — | — | — | ||||||||||||||
Employee stock plan purchases | — | 7 | — | — | 7 | ||||||||||||||
Return of incentive compensation shares | — | — | — | (60 | ) | (60 | ) | ||||||||||||
Balances, April 1, 2016 | $ | 113 | $ | 46,013 | $ | (32,736 | ) | $ | (1,589 | ) | $ | 11,801 |
Six Months Ended | ||||||||
April 1, 2016 | March 27, 2015 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income/(loss) | $ | 3,004 | $ | (6,331 | ) | |||
Less: Loss on discontinued operations, net | — | (1,353 | ) | |||||
Income/(loss) from continuing operations | 3,004 | (4,978 | ) | |||||
Non-cash adjustments: | ||||||||
Stock-based compensation | 162 | 1,954 | ||||||
Incentive compensation shares returned | (60 | ) | — | |||||
Depreciation and amortization | 1,681 | 2,008 | ||||||
(Gain)/loss on sale of fixed assets | 1 | — | ||||||
Reserve for doubtful accounts | 112 | (172 | ) | |||||
Provision for excess/obsolete inventory | 279 | (715 | ) | |||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | 6,580 | 1,729 | ||||||
Inventory | 1,580 | (4,173 | ) | |||||
Other current assets | 185 | (1,177 | ) | |||||
Other long term assets | (11 | ) | 242 | |||||
Accounts payable | (6,497 | ) | (121 | ) | ||||
Accrued expenses | 629 | 96 | ||||||
Customer deposits | (1,015 | ) | 1,483 | |||||
Other long term liabilities | (14 | ) | (83 | ) | ||||
Net cash flows from operating activities-continuing operations | 6,616 | (3,907 | ) | |||||
Net cash flows from operating activities-discontinued operations | — | (620 | ) | |||||
Net cash flows from operating activities | 6,616 | (4,527 | ) | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchases of fixed assets | (1,270 | ) | (1,854 | ) | ||||
Grant proceeds from outside parties | — | 698 | ||||||
Net cash flows from investing activities-continuing operations | (1,270 | ) | (1,156 | ) | ||||
Net cash flows from investing activities-discontinued operations | — | (52 | ) | |||||
Net cash flows from investing activities | (1,270 | ) | (1,208 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Advances from revolving line of credit | 30,271 | 36,738 | ||||||
Repayments of revolving line of credit | (32,998 | ) | (30,137 | ) | ||||
Repayments under other loan agreements | (1,696 | ) | (1,453 | ) | ||||
Debt issuance costs | (211 | ) | — | |||||
Proceeds from exercise of stock options | — | 3 | ||||||
Proceeds from employee stock plan purchases | 7 | — | ||||||
Shares withheld for payment of taxes upon vesting of restricted stock | — | (604 | ) | |||||
Net cash flows from financing activities-continuing operations | (4,627 | ) | 4,547 | |||||
Net cash flows from financing activities-discontinued operations | — | — | ||||||
Net cash flows from financing activities | (4,627 | ) | 4,547 | |||||
Net increase/(decrease) in cash and cash equivalents | 719 | (1,188 | ) | |||||
Cash and cash equivalents, beginning of period | 407 | 1,980 | ||||||
Cash and cash equivalents, end of period | $ | 1,126 | $ | 792 | ||||
Supplemental cash flow information: | ||||||||
Interest paid | $ | 803 | $ | 769 | ||||
Income taxes paid | — | — | ||||||
Non-cash transactions | ||||||||
Fixed assets purchased with extended payment terms | $ | — | $ | 22 | ||||
Incentive compensation shares returned | 60 | — | ||||||
Conversion of grant to loan | 32 | — |
PP&E Lives | Estimated Useful Lives | |
(years) | ||
Land improvements | 10 | |
Buildings and improvements | 5 to 40 | |
Machinery and equipment | 3 to 5 | |
Furniture and fixtures | 3 to 7 |
Three Months Ended | Six Months Ended | |||||||||||
Shares for EPS Calculation | April 1, 2016 | March 27, 2015 | April 1, 2016 | March 27, 2015 | ||||||||
Weighted average shares outstanding | 10,205,031 | 10,075,719 | 10,210,539 | 9,972,692 | ||||||||
Incremental shares | — | — | — | — | ||||||||
Diluted shares | 10,205,031 | 10,075,719 | 10,210,539 | 9,972,692 | ||||||||
Anti-dilutive shares excluded | 804,965 | 658,905 | 804,965 | 658,905 |
July 9, 2015 | ||||
(in thousands) | (unaudited) | |||
Purchase price | $ | 2,405 | ||
Net book value of assets sold | (2,630 | ) | ||
Legal fees associated with closing | (114 | ) | ||
Finder's fee | (50 | ) | ||
Sales tax on asset sale | (20 | ) | ||
Other | (24 | ) | ||
Loss on sale of SCB | $ | (433 | ) |
July 9, 2015 | |||
(in thousands) | (unaudited) | ||
Inventories, net | 1,803 | ||
Other current assets | 53 | ||
Fixed assets, net | 916 | ||
Intangible assets, net | — | ||
Customer deposits | (142 | ) | |
Net assets sold | 2,630 |
Three Months Ended | Six Months Ended | |||||
March 27, 2015 | March 27, 2015 | |||||
(in thousands) | ||||||
Net sales | 1,257 | 3,420 | ||||
Loss before income taxes | (789 | ) | (1,338 | ) |
Six Months Ended | ||||||||
Allowance for Doubtful Accounts | April 1, 2016 | March 27, 2015 | ||||||
(in thousands) | ||||||||
Allowance, beginning of period | $ | 423 | $ | 525 | ||||
Provision for doubtful accounts | 270 | (114 | ) | |||||
Write-offs | (158 | ) | (58 | ) | ||||
Allowance, end of period | $ | 535 | $ | 353 |
Inventories | April 1, 2016 | September 30, 2015 | ||||||
(in thousands) | ||||||||
Raw materials | $ | 14,251 | $ | 17,637 | ||||
Work-in-process | 7,991 | 8,512 | ||||||
Finished goods | 3,668 | 1,341 | ||||||
Total inventories | 25,910 | 27,490 | ||||||
Reserve for excess/obsolete inventory | (2,016 | ) | (1,737 | ) | ||||
Inventories, net | $ | 23,894 | $ | 25,753 |
Fixed Assets | April 1, 2016 | September 30, 2015 | ||||||
(in thousands) | ||||||||
Land and improvements | $ | 1,601 | $ | 1,601 | ||||
Buildings and improvements | 14,199 | 14,161 | ||||||
Machinery and equipment | 26,324 | 26,061 | ||||||
Furniture and fixtures | 7,328 | 7,291 | ||||||
Construction in progress | 1,958 | 1,028 | ||||||
Total fixed assets, at cost | 51,410 | 50,142 | ||||||
Accumulated depreciation | (36,345 | ) | (34,699 | ) | ||||
Fixed assets, net | $ | 15,065 | $ | 15,443 |
Three Months Ended | Six Months Ended | |||||||||||||||
April 1, 2016 | March 27, 2015 | April 1, 2016 | March 27, 2015 | |||||||||||||
(in thousands) | ||||||||||||||||
Depreciation expense | $ | 807 | $ | 938 | $ | 1,647 | $ | 1,984 |
Intangible Assets | April 1, 2016 | September 30, 2015 | ||||||
(in thousands) | ||||||||
Property tax abatement - Albuquerque | 360 | 360 | ||||||
Accumulated amortization | (245 | ) | (226 | ) | ||||
Intangible assets, net | $ | 115 | $ | 134 |
Three Months Ended | Six Months Ended | |||||||||||||||
Amortization Expense | April 1, 2016 | March 27, 2015 | April 1, 2016 | March 27, 2015 | ||||||||||||
(in thousands) | ||||||||||||||||
Intangible amortization expense | $ | 10 | $ | 64 | $ | 20 | $ | 127 |
Future Amortization | Estimated future amortization | |||
(in thousands) | ||||
Twelve months ended March, | ||||
2017 | $ | 39 | ||
2018 | 39 | |||
2019 | 37 | |||
2020 and thereafter | — |
Fixed/ | April 1, 2016 | September 30, 2015 | ||||||||||||||||
Variable | Interest | Interest | ||||||||||||||||
Debt | Rate | Maturity Date | Balance | Rate (1) | Balance | Rate (1) | ||||||||||||
(in thousands) | ||||||||||||||||||
M&T credit facilities: | ||||||||||||||||||
Revolving Credit Facility | v | 1/18/2018 | $ | 9,688 | 4.69 | % | $ | 12,415 | 4.50 | % | ||||||||
Term Loan A | f | 2/1/2020 | 4,156 | 3.98 | 4,804 | 3.98 | ||||||||||||
Term Loan B | v | 2/1/2023 | 9,567 | 3.69 | 10,383 | 3.45 | ||||||||||||
Albuquerque Mortgage Loan | v | 2/1/2018 | 2,311 | 4.94 | 2,467 | 4.75 | ||||||||||||
Celmet Building Term Loan | f | 11/7/2018 | 986 | 4.72 | 1,062 | 4.72 | ||||||||||||
Other credit facilities: | ||||||||||||||||||
Albuquerque Industrial Revenue Bond | f | 3/1/2019 | 100 | 5.63 | 100 | 5.63 | ||||||||||||
Wayne County IDA Loan to Grant | f | 12/31/2019 | 32 | 2.00 | — | — | ||||||||||||
Total debt | 26,840 | 31,231 | ||||||||||||||||
Less: current portion | (2,679 | ) | (2,908 | ) | ||||||||||||||
Long-term debt | $ | 24,161 | $ | 28,323 |
a) | Revolving Credit Facility (“Revolver”): Up to $20 million is available through January 18, 2018. The maximum amount the Company may borrow is determined based on a borrowing base calculation described below. |
b) | Term Loan A: $10.0 million was borrowed on January 18, 2013. Principal is being repaid in 108 equal monthly installments of $93 thousand. |
c) | Term Loan B: $14.0 million was borrowed on January 18, 2013. Principal is being repaid in 120 equal monthly installments of $117 thousand. |
d) | Albuquerque Mortgage Loan: $4.0 million was borrowed on December 16, 2009. The loan is secured by real property in Albuquerque, NM, and principal is being repaid in equal monthly installments of $22 thousand plus a balloon payment of $1.8 million due at maturity. |
e) | Celmet Building Term Loan: $1.3 million was borrowed on November 8, 2013 pursuant to an amendment to the 2013 Credit Agreement. The proceeds were used to reimburse the Company’s cost of purchasing its Rochester, New York facility. Principal is being repaid in 59 equal monthly installments of $11 thousand plus a balloon payment due at maturity. |
Debt to EBITDAS Ratio: | ||||
6/26/15 through and including 9/30/15 | < 5.75 to 1.00 | |||
10/01/15 through and including 1/01/16 | < 5.10 to 1.00 | |||
1/02/16 through and including 4/01/16 | < 3.95 to 1.00 | |||
4/02/16 through and including 7/01/16 | < 3.65 to 1.00 | |||
7/02/16 through and including 9/30/16 | < 3.10 to 1.00 | |||
Thereafter | < 3.10 to 1.00 | |||
Minimum Quarterly EBITDAS : | ||||
Fiscal Quarter ending 9/30/15 | $ | 1,500,000 | ||
Fiscal Quarter ending 1/01/16 | 1,785,000 | |||
Fiscal Quarter ending 4/01/16 | 1,900,000 | |||
Fiscal Quarter ending 7/01/16 | 1,800,000 | |||
Fiscal Quarter ending 9/30/16 | 2,190,000 | |||
Thereafter | 2,190,000 | |||
Fixed Charge Coverage Ratio: | ||||
6/26/15 through and including 9/30/15 | > 0.45 to 1.00 | |||
10/01/15 through and including 1/01/16 | > 0.75 to 1.00 | |||
1/02/16 through and including 4/01/16 | > 1.00 to 1.00 | |||
4/02/16 through and including 7/01/16 | > 1.10 to 1.00 | |||
7/2/16 and thereafter | > 1.25 to 1.00 | |||
Maximum Inventory: | ||||
As of January 1, 2016 | $ | 30,000,000 | ||
As of April 1, 2016 | 29,000,000 | |||
As of July 1, 2016 | 28,000,000 | |||
As of September 30, 2016 | 27,000,000 | |||
As of December 30, 2016 | 26,000,000 | |||
As of the end of the Fiscal Quarter ending March 31, 2017 | 25,000,000 | |||
As of the end of each Fiscal Quarter thereafter | 25,000,000 | |||
Maximum Capital Expenditures | $ | 3,500,000 |
Quarterly EBITDAS | Debt to EBITDAS Ratio | Fixed Charge Coverage Ratio | Maximum Inventory | Maximum Capital Expenditures | ||||||
Fiscal Quarters | ||||||||||
Second 2016 | Compliant | Compliant | Compliant | Compliant | Measured Annually | |||||
First 2016 | Compliant | Compliant | Compliant | Compliant | Measured Annually | |||||
Fourth 2015 | Compliant | Compliant | Compliant | Not Applicable | Not Applicable | |||||
Third 2015 (1) | Compliant | Compliant | Compliant | Not Applicable | Not Applicable | |||||
Second 2015 (1) | Waived | Waived | Waived | Not Applicable | Not Applicable | |||||
First 2015 (1) | Waived | Waived | Waived | Not Applicable | Not Applicable |
a) | Albuquerque Industrial Revenue Bond: When IEC acquired Albuquerque, the Company assumed responsibility for a $100 thousand Industrial Revenue Bond issued by the City of Albuquerque. Interest on the bond is paid semiannually, and principal is due in its entirety at maturity. |
b) | Wayne County IDA Loan to Grant: The Company entered into an agreement with Wayne County, NY to receive grant funds while meeting employment targets. As these employment targets were not met, $32 thousand of the grant is presented as a loan payable. Principal is being repaid in 36 monthly installments of $917. |
a) | The levying of a penalty or fee (other than routine fees consistent with those historically incurred by the Company in the ordinary course of its business) by the Securities and Exchange Commission against the Company in excess of $400,000, individually or in the aggregate. |
b) | Legal fees incurred by the Company associated with a Securities and Exchange Commission investigation of the Company in excess of $250,000 in any fiscal year, net of any amounts reimbursed to the Company by any insurer during such fiscal year. |
Debt Repayment Schedule | Contractual Principal Payments | |||
(in thousands) | ||||
Twelve months ended March, | ||||
2016 | $ | 2,679 | ||
2017 | 4,719 | |||
2018 (1) | 13,044 | |||
2019 | 2,315 | |||
2020 and thereafter | 4,083 | |||
$ | 26,840 |
April 1, 2016 | September 30, 2015 | |||||||||||
Fair Value | Carrying Value | Fair Value | Carrying Value | |||||||||
(in thousands) | ||||||||||||
Term Loan A | 3,972 | 4,156 | 4,412 | 4,804 | ||||||||
Celmet Building Term Loan | 911 | 986 | 954 | 1,062 |
Six Months Ended | ||||||||
Warranty Reserve | April 1, 2016 | March 27, 2015 | ||||||
(in thousands) | ||||||||
Reserve, beginning of period | $ | 399 | $ | 251 | ||||
Provision | 123 | 204 | ||||||
Warranty costs | (183 | ) | (161 | ) | ||||
Reserve, end of period | $ | 339 | $ | 294 |
Three Months Ended | Six Months Ended | |||||||||||||||
April 1, 2016 | March 27, 2015 | April 1, 2016 | March 27, 2015 | |||||||||||||
(in thousands) | (unaudited) | (unaudited) | ||||||||||||||
Grant amortization | $ | 40 | $ | 41 | $ | 68 | $ | 82 |
Six Months Ended | ||||
Valuation of Options | March 27, 2015 | |||
Assumptions for Black-Scholes: | ||||
Risk-free interest rate | 1.30 | % | ||
Expected term in years | 4.5 | |||
Volatility | 40 | % | ||
Expected annual dividends | none | |||
Value of options granted: | ||||
Number of options granted | 447,145 | |||
Weighted average fair value per share | $ | 1.48 | ||
Fair value of options granted (000's) | $ | 662 |
Six Months Ended | ||||||||||||||
April 1, 2016 | March 27, 2015 | |||||||||||||
Stock Options | Number of Options | Wgtd. Avg. Exercise Price | Number of Options | Wgtd. Avg. Exercise Price | ||||||||||
Outstanding, beginning of period | 717,645 | $ | 4.40 | 234,000 | $ | 4.48 | ||||||||
Granted | — | — | 447,145 | 4.18 | ||||||||||
Exercised | — | — | (25,932 | ) | 1.87 | |||||||||
Shares withheld for payment of exercise price upon exercise of stock option | — | — | (16,068 | ) | 1.88 | |||||||||
Forfeited | — | — | (8,300 | ) | 6.04 | |||||||||
Expired | (15,500 | ) | 5.99 | (7,400 | ) | 6.38 | ||||||||
Outstanding, end of period | 702,145 | $ | 4.37 | 623,445 | $ | 4.40 | ||||||||
For options expected to vest | ||||||||||||||
Number expected to vest | 558,596 | $ | 4.44 | 467,670 | $ | 4.50 | ||||||||
Weighted average remaining term, in years | 5.3 | 3.2 | ||||||||||||
Intrinsic value (000s) | $ | 239 | $ | 37 | ||||||||||
For exercisable options | ||||||||||||||
Number exercisable | 260,036 | $ | 4.84 | 207,300 | $ | 5.00 | ||||||||
Weighted average remaining term, in years | 4.4 | 1.5 | ||||||||||||
Intrinsic value (000s) | $ | 77 | $ | 37 | ||||||||||
For non-exercisable options | ||||||||||||||
Expense not yet recognized (000s) | $ | 597 | $ | 600 | ||||||||||
Weighted average years to be recognized | 3.1 | 4.0 | ||||||||||||
For options exercised | ||||||||||||||
Intrinsic value (000s) | $ | — | $ | 119 |
Six Months Ended | ||||||||||||||
April 1, 2016 | March 27, 2015 | |||||||||||||
Stock Options | Number of Options | Wgtd. Avg. Grant Date Fair Value | Number of Options | Wgtd. Avg. Grant Date Fair Value | ||||||||||
Non-vested, beginning of period | 546,145 | $ | 1.41 | 112,350 | $ | 2.15 | ||||||||
Granted | — | — | 447,145 | 1.48 | ||||||||||
Vested | (104,036 | ) | 1.45 | (135,050 | ) | 2.08 | ||||||||
Forfeited | — | — | (8,300 | ) | 2.35 | |||||||||
Non-vested, end of period | 442,109 | $ | 1.40 | 416,145 | $ | 1.45 |
Six Months Ended | ||||||||||||||
April 1, 2016 | March 27, 2015 | |||||||||||||
Restricted (Non-vested) Stock | Number of Non-vested Shares | Wgtd. Avg. Grant Date Fair Value | Number of Non-vested Shares | Wgtd. Avg. Grant Date Fair Value | ||||||||||
Outstanding, beginning of period | 54,960 | $ | 4.23 | 322,873 | $ | 4.97 | ||||||||
Granted | 59,560 | 4.03 | 163,655 | 5.06 | ||||||||||
Vested | (11,700 | ) | 4.23 | (316,539 | ) | 5.08 | ||||||||
Shares withheld for payment of taxes upon vesting of restricted stock | — | — | (133,329 | ) | 4.53 | |||||||||
Forfeited | — | — | (1,200 | ) | 3.91 | |||||||||
Outstanding, end of period | 102,820 | $ | 4.11 | 35,460 | $ | 4.23 | ||||||||
For non-vested shares | ||||||||||||||
Expense not yet recognized (000s) | $ | 357 | $ | 163 | ||||||||||
Weighted average remaining years for vesting | 2.5 | 2.0 | ||||||||||||
For shares vested | ||||||||||||||
Aggregate fair value on vesting dates (000s) | $ | 43 | $ | 2,062 |
Three Months Ended | Six Months Ended | |||||||||||||||
Income Tax Provision/Benefit | April 1, 2016 | March 27, 2015 | April 1, 2016 | March 27, 2015 | ||||||||||||
(in thousands) | ||||||||||||||||
Provision for/(benefit from) income taxes | $ | — | $ | — | $ | — | $ | — |
Three Months Ended | Six Months Ended | |||||||
% of Sales by Sector | April 1, 2016 | March 27, 2015 | April 1, 2016 | March 27, 2015 | ||||
Aerospace & Defense | 34% | 38% | 37% | 39% | ||||
Medical | 50% | 31% | 46% | 31% | ||||
Industrial | 14% | 29% | 15% | 27% | ||||
Communications & Other | 2% | 2% | 2% | 3% | ||||
100% | 100% | 100% | 100% |
• | A technology center located in Newark, New York that combines dedicated prototype manufacturing with an on-site materials analysis lab, enabling the seamless transition from design to production. |
• | An in-house, custom, functional testing and troubleshooting of complex system-level assemblies in support of end-order fulfillment. |
• | A laboratory at our subsidiary, IEC Analysis & Testing Laboratory, LLC ("ATL") that enables us to assist customers in mitigating the risk of purchasing counterfeit parts. |
• | Build-to-print precision sheet metal and complex wire harness assemblies supporting just-in-time delivery of critical end-market, system-level electronics. |
• | A Lean/Six Sigma continuous improvement program supported by a team of Six Sigma Blackbelts delivering best-in-class results. |
• | Proprietary software-driven Web Portal which provides customers real-time access to their critical, project specific data. |
Three Months Ended | ||||||||
Income Statement Data | April 1, 2016 | March 27, 2015 | ||||||
(in thousands) | ||||||||
Net sales | $ | 33,148 | $ | 31,655 | ||||
Gross profit | 5,736 | 2,973 | ||||||
Selling and administrative expenses | 3,721 | 6,320 | ||||||
Restatement and related expenses | 41 | 730 | ||||||
Interest and financing expense | 513 | 665 | ||||||
Income/(loss) from continuing operations before income taxes | 1,461 | (4,742 | ) | |||||
Provision for/(benefit from) income taxes | — | — | ||||||
Income/(loss) from continuing operations | 1,461 | (4,742 | ) | |||||
Loss on discontinued operations, net | — | (794 | ) | |||||
Net income/(loss) | $ | 1,461 | $ | (5,536 | ) |
Three Months Ended | ||||
% of Sales by Sector | April 1, 2016 | March 27, 2015 | ||
Aerospace & Defense | 34% | 38% | ||
Medical | 50% | 31% | ||
Industrial | 14% | 29% | ||
Communications & Other | 2% | 2% | ||
100% | 100% |
Six Months Ended | ||||||||
Income Statement Data | April 1, 2016 | March 27, 2015 | ||||||
(in thousands) | ||||||||
Net sales | $ | 66,081 | $ | 60,484 | ||||
Gross profit | 11,553 | 6,428 | ||||||
Selling and administrative expenses | 7,755 | 9,566 | ||||||
Restatement and related expenses | (8 | ) | 641 | |||||
Interest and financing expense | 802 | 1,199 | ||||||
Income/(loss) from continuing operations before income taxes | 3,004 | (4,978 | ) | |||||
Provision for/(benefit from) income taxes | — | — | ||||||
Income/(loss) from continuing operations | 3,004 | (4,978 | ) | |||||
Loss on discontinued operations, net | — | (1,353 | ) | |||||
Net income/(loss) | $ | 3,004 | $ | (6,331 | ) |
Six Months Ended | ||||
% of Sales by Sector | April 1, 2016 | March 27, 2015 | ||
Aerospace & Defense | 37% | 39% | ||
Medical | 46% | 31% | ||
Industrial | 15% | 27% | ||
Communications & Other | 2% | 3% | ||
100% | 100% |
Six Months Ended | ||||||||
Cash Flow Data | April 1, 2016 | March 27, 2015 | ||||||
(in thousands) | ||||||||
Cash and cash equivalents, beginning of period | $ | 407 | $ | 1,980 | ||||
Net cash flow from: | ||||||||
Operating activities | 6,616 | (4,527 | ) | |||||
Investing activities | (1,270 | ) | (1,208 | ) | ||||
Financing activities | (4,627 | ) | 4,547 | |||||
Net (decrease) increase in cash and cash equivalents | 719 | (1,188 | ) | |||||
Cash and cash equivalents at end of period | $ | 1,126 | $ | 792 |
Quarterly EBITDAS | Debt to EBITDAS Ratio | Fixed Charge Coverage Ratio | Maximum Inventory | Maximum Capital Expenditures | ||||||
Fiscal Quarters | ||||||||||
Second 2016 | Compliant | Compliant | Compliant | Compliant | Measured Annually | |||||
First 2016 | Compliant | Compliant | Compliant | Compliant | Measured Annually | |||||
Fourth 2015 | Compliant | Compliant | Compliant | Not Applicable | Not Applicable | |||||
Third 2015 (1) | Compliant | Compliant | Compliant | Not Applicable | Not Applicable | |||||
Second 2015 (1) | Waived | Waived | Waived | Not Applicable | Not Applicable | |||||
First 2015 (1) | Waived | Waived | Waived | Not Applicable | Not Applicable |
Limit at | Calculated Amount At | |||||||
Debt Covenant | April 1, 2016 | September 30, 2015 | April 1, 2016 | September 30, 2015 | ||||
Quarterly EBITDAS (000s) | Minimum $1,900 | Minimum $1,500 | $2,909 | $2,067 | ||||
Debt to EBITDAS Ratio | Maximum 3.95x | Maximum 5.75x | 2.8x | 5.2x | ||||
Fixed Charge Coverage Ratio (a) | Minimum 1.00x | Minimum 0.45x | 1.6x | 0.8x | ||||
Maximum Inventory | Maximum $29.0m | Not applicable | $25.9m | Not applicable | ||||
Maximum Capital Expenditures | Maximum $3.5m annually | Not applicable | Measured Annually | Not applicable |
(a) | At September 30. 2105, the ratio compares (i) 12-month EBITDA plus non-cash stock compensation expense, plus permitted fiscal 2013 restatement related expenses minus unfinanced capital expenditures minus cash taxes paid ("Adjusted EBITDA"), to (ii) the sum of interest expense, principal payments and dividends, if any (fixed charges). The Fifth Amended Credit Agreement removed the add-back of Prior Restatement related expenses. |
Three Months Ended | ||||
April 1, 2016 | ||||
(in thousands) | ||||
Net income/(loss) | $ | 1,461 | ||
Provision for/(benefit from) income taxes | — | |||
Depreciation and amortization expense | 827 | |||
Interest expense | 513 | |||
Non-cash stock compensation | 108 | |||
EBITDAS | $ | 2,909 |
Three Months Ended | ||||
April 1, 2016 | ||||
(in thousands) | ||||
Net income/(loss) | 1,461 | |||
Provision for/(benefit from) income taxes | — | |||
Depreciation and amortization expense | 827 | |||
Interest expense | 513 | |||
Non-cash stock compensation | 108 | |||
Unfinanced capital expenditures | (585 | ) | ||
Income taxes paid | — | |||
Adjusted EBITDA | $ | 2,324 |
IEC Electronics Corp. | ||
(Registrant) | ||
May 13, 2016 | By: | /s/ Jeffrey T. Schlarbaum |
Jeffrey T. Schlarbaum | ||
President & Chief Executive Officer | ||
May 13, 2016 | By: | /s/ Michael T. Williams |
Michael T. Williams | ||
Chief Financial Officer |
Exhibit No. | Description | |
10.1 | Separation Agreement effective March 16, 2016 by and between the Company and W. Barry Gilbert (incorporated herein by reference from Exhibit 10.1 to the Company Current Report on Form 8-K filed March 18, 2016) | |
31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350 | |
101 | The following items from this Quarterly Report on Form 10-Q formatted in Extensible Business Reporting Language: (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Income Statements (unaudited), (iii) Consolidated Statements of Changes in Stockholders' Equity (unaudited), (iv) Consolidated Statements of Cash Flows (unaudited), and (v) Notes to Consolidated Financial Statements. |
1. | I have reviewed this report on Form 10-Q for the three and six months ended April 1, 2016 for IEC Electronics Corp.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be |
c. | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Dated: May 13, 2016 | By: | /s/ Jeffrey T. Schlarbaum |
Jeffrey T. Schlarbaum | ||
President & Chief Executive Officer |
1. | I have reviewed this report on Form 10-Q for the three and six months ended April 1, 2016 for IEC Electronics Corp.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Dated: May 13, 2016 | By: | /s/ Michael T. Williams |
Michael T. Williams | ||
Chief Financial Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: May 13, 2016 | By: | /s/ Jeffrey T. Schlarbaum |
Jeffrey T. Schlarbaum | ||
President & Chief Executive Officer |
Dated: May 13, 2016 | By: | /s/ Michael T. Williams |
Michael T. Williams | ||
Chief Financial Officer |
Document And Entity Information - shares |
6 Months Ended | |
---|---|---|
Apr. 01, 2016 |
May. 09, 2016 |
|
Document Information [Line Items] | ||
Entity Registrant Name | IEC ELECTRONICS CORP | |
Entity Central Index Key | 0000049728 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | IEC | |
Entity Common Stock, Shares Outstanding | 10,259,477 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Apr. 01, 2016 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2016 |
CONSOLIDATED BALANCE SHEETS [Parenthetical] - $ / shares |
Apr. 01, 2016 |
Sep. 30, 2015 |
---|---|---|
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 500,000 | 500,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 11,314,965 | 11,232,017 |
Common stock, shares outstanding | 10,259,477 | 10,196,145 |
Treasury stock, shares | 1,055,488 | 1,035,872 |
CONSOLIDATED STATEMENTS of CHANGES in STOCKHOLDERS' EQUITY - USD ($) |
Total |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Retained Earnings (Deficit) [Member] |
Treasury Stock [Member] |
---|---|---|---|---|---|
Balances at Sep. 30, 2014 | $ 17,405,000 | $ 111,000 | $ 44,302,000 | $ (25,554,000) | $ (1,454,000) |
Net income/(loss) | (6,331,000) | 0 | 0 | (6,331,000) | 0 |
Stock-based compensation | 1,954,000 | 0 | 1,954,000 | 0 | 0 |
Restricted (non-vested) stock grants, net of forfeitures | 0 | 2,000 | (2,000) | 0 | 0 |
Exercise of stock options | 3,000 | 0 | 78,000 | 0 | (75,000) |
Shares withheld for payment of taxes upon vesting of restricted stock | (604,000) | (1,000) | (603,000) | 0 | 0 |
Balances at Mar. 27, 2015 | 12,427,000 | 112,000 | 45,729,000 | (31,885,000) | (1,529,000) |
Balances at Sep. 30, 2015 | 8,688,000 | 112,000 | 45,845,000 | (35,740,000) | 1,529,000 |
Net income/(loss) | 3,004,000 | 0 | 0 | 0 | |
Stock-based compensation | 162,000 | 0 | 162,000 | 0 | 0 |
Restricted (non-vested) stock grants, net of forfeitures | 0 | 1,000 | (1,000) | 0 | 0 |
Exercise of stock options | 0 | 0 | 0 | 0 | 0 |
Employee stock plan purchases | 7,000 | 0 | 7,000 | 0 | 0 |
Shares withheld for payment of taxes upon vesting of restricted stock | (60,000) | 0 | 0 | 0 | (60,000) |
Balances at Apr. 01, 2016 | $ 11,801,000 | $ 113,000 | $ 46,013,000 | $ (32,736,000) | $ (1,589,000) |
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contingencies Disclosure [Text Block] | As disclosed in prior filings, the staff of the U.S. Securities and Exchange Commission (the "SEC") is conducting a formal investigation relating to the Prior Restatement and other matters. During the first quarter of fiscal 2016, the Company began engaging in discussions with the SEC staff concerning a potential resolution of the investigation. These discussions led to the Company reaching a preliminary understanding with the SEC staff regarding a potential settlement. In this regard, the Company understands that the SEC staff is prepared to recommend that the SEC file a settled administrative enforcement action against the Company alleging violations of the antifraud, periodic and current reporting, internal controls, and books-and-records provisions of the federal securities laws. As part of the proposed settlement, the Company would (i) neither admit nor deny the SEC’s findings, (ii) pay a penalty of $200,000, and (iii) agree to cease-and-desist from committing or causing any violations or future violations of those provisions. Final resolution of the SEC investigation with respect to the Company is subject to final approval of the settlement by the Commissioners of the SEC. Accordingly, there can be no assurance that the Company’s efforts to resolve the SEC investigation will be successful or that the settlement terms will be as anticipated. The Company also cannot predict the timing of any settlement or, in the event the proposed settlement is not approved, what the ultimate resolution of the SEC investigation will be with respect to the Company. In addition, during the first quarter of fiscal 2016, the Company became aware that the SEC staff issued “Wells Notices” to two individuals who are no longer associated with the Company - a former Executive Vice President of the Company and a former Controller of the Company’s previously-owned Southern California Braiding, Inc. subsidiary that was the subject of the Prior Restatement. A Wells Notice is an indication that the SEC staff has made a preliminary determination to recommend that the SEC file an enforcement action. Each of these individuals has also reached a preliminary understanding with the SEC staff regarding a potential settlement. The Company cannot predict the outcome of the SEC investigation with respect to these two former employees, including whether their settlements will be approved. In connection with the Prior Restatement, W. Barry Gilbert, our former chief executive officer and director, voluntarily returned to the Company certain incentive compensation and the proceeds from certain sales of the Company's common stock. These transfers, which were made during the six months ended April 1, 2016, were in the form of cash of $42 thousand and shares of common stock valued at $60 thousand. In June 2015, W. Barry Gilbert, our former chief executive officer and director commenced an arbitration proceeding against us in connection with the termination of his employment agreement effective February 6, 2015. Mr. Gilbert alleged that his termination was not for cause as we have claimed and that we breached the terms of our employment agreement with him by not paying the compensation called for under his employment agreement for a termination without cause. Effective March 16, 2016, the Company entered into a separation agreement with Mr. Gilbert (the "Separation Agreement"). Pursuant to the terms of the Separation Agreement, Mr. Gilbert received a separation benefit of $500 thousand that was paid on March 16, 2016, and he will receive $200 thousand payable by May 16, 2016, $100 thousand payable on both March 16, 2017 and March 16, 2018, and $75 thousand payable on each of March 16, 2019 and March 16, 2020. The expense associated with the separation agreement is included in selling and administrative expenses, a portion of which was recorded in the prior fiscal year. The remaining unpaid amount is included in accrued payroll and related expenses. The separation benefit is subject to acceleration in the event of certain changes in control of the Company. The Company also released Mr. Gilbert from any and all claims and causes of action directly or indirectly related to Mr. Gilbert’s employment relationship with the Company. In consideration of the foregoing, Mr. Gilbert agreed to release the Company from any and all claims and causes of action arising out of or relating to his previous employment with the Company, as well as certain other covenants set forth in the Separation Agreement. From time to time, the Company may be involved in other legal action in the ordinary course of its business, but management does not believe that any such other proceedings commenced through the date of the financial statements included in this Form 10-Q. individually or in the aggregate, will have material adverse effect on the Company’s consolidated financial position. |
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OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Our Business IEC Electronics Corp. (“IEC”, “we”, “our”, “us”, or the “Company”) provides electronic contract manufacturing services (“EMS”) to companies in various industries that require advanced technology. We specialize in the custom manufacture of high reliability, complex circuit boards and system-level assemblies; a wide array of cable and wire harness assemblies capable of withstanding extreme environments; and precision metal components. We provide EMS where quality and reliability are of paramount importance and when low-to-medium volume, high-mix production is the norm. We utilize state-of-the-art, automated circuit board assembly equipment together with a full complement of high-reliability manufacturing stress testing methods. Our customers are at the center of everything we do and we are capable of reacting and adapting to their ever-changing needs. Our customer-centric approach offers a high degree of flexibility while simultaneously complying with rigorous quality and on-time delivery standards. Generally Accepted Accounting Principles IEC's financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), as set forth in the Financial Accounting Standards Board's (“FASB”) Accounting Standards Codification (“ASC”). Fiscal Calendar The Company’s fiscal year ends on September 30th, and the first three quarters end generally on the Friday closest to the last day of the calendar quarter. Consolidation The consolidated financial statements include the accounts of IEC and its wholly owned subsidiaries: IEC Electronics Wire and Cable, Inc. (“Wire and Cable”); IEC Electronics Corp-Albuquerque (“Albuquerque”); and IEC Analysis & Testing Laboratory, LLC ("ATL"), formerly Dynamic Research and Testing Laboratories, LLC. The Celmet unit (“Celmet”) operates as a division of IEC. As further discussed in Note 2—SCB Divestiture and Discontinued Operations, the operations of our wholly-owned subsidiary, formerly known as Southern California Braiding, Inc. (“SCB”), were divested during the fourth quarter of fiscal 2015. All significant intercompany transactions and accounts are eliminated in consolidation. Unaudited Financial Statements The accompanying unaudited financial statements for the three and six months ended April 1, 2016 and March 27, 2015 have been prepared in accordance with GAAP for interim financial information. In the opinion of management, all adjustments required for a fair presentation of the information have been made. The accompanying financial statements should be read in conjunction with the financial statements and notes included in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2015. Reclassifications Prior year financial statement amounts are reclassified as necessary to conform to the current year presentation, including presentation of results of discontinued operations. Cash and Cash Equivalents The Company’s cash and cash equivalents principally represent deposit accounts with Manufacturers and Traders Trust Company (“M&T Bank”), a banking corporation headquartered in Buffalo, NY. Allowance for Doubtful Accounts The Company establishes an allowance for doubtful accounts receivable based on the age of outstanding invoices and management's evaluation of collectability. Accounts are written off after all reasonable collection efforts have been exhausted and management concludes that likelihood of collection is remote. Inventory Valuation Inventories are stated at the lower of cost or market value under the first-in, first-out method. The Company regularly assesses slow-moving, excess and obsolete inventory and maintains balance sheet reserves in amounts required to reduce the recorded value of inventory to lower of cost or market. Property, Plant and Equipment Property, plant and equipment (“PP&E”) are stated at cost and are depreciated over various estimated useful lives using the straight-line method. Maintenance and repairs are charged to expense as incurred, while renewals and improvements are capitalized. At the time of retirement or other disposition of PP&E, cost and accumulated depreciation are removed from the accounts and any gain or loss is recorded in earnings. Depreciable lives generally used for PP&E are presented in the table below. Leasehold improvements are amortized over the shorter of the lease term or estimated useful life of the improvement.
Intangible Assets Intangible assets (other than goodwill) are those that lack physical substance and are not financial assets. Such assets held by IEC were acquired in connection with business combinations and the remaining assets represent economic benefits associated with a property tax abatement. Values assigned to individual intangible assets are amortized using the straight-line method over their estimated useful lives. Reviewing Long-Lived Assets for Potential Impairment ASC 360-10 (Property, Plant and Equipment) and ASC 350-30 (Intangibles) require the Company to test long-lived assets (PP&E and definitive lived assets) for recoverability whenever events or circumstances indicate that the carrying amount may not be recoverable. If carrying value exceeds undiscounted future cash flows attributable to an asset, it is considered impaired and the excess of carrying value over fair value must be charged to earnings. No impairment charges were recorded by IEC for property, plant and equipment or intangibles in fiscal 2016. Goodwill Goodwill represents the excess of cost over fair value of net assets acquired in a business combination. Under ASC 350, goodwill is not amortized but is reviewed for impairment at least annually or when events or circumstances indicate that carrying value may exceed fair value. The Company may elect to precede a quantitative review for impairment with a qualitative assessment of the likelihood that fair value of a particular reporting unit exceeds carrying value. If the qualitative assessment leads to a conclusion that it is more than 50 percent likely that fair value exceeds carrying value, no further testing is required. In the event of a less favorable outcome, the Company is required to proceed with quantitative testing. The quantitative process entails comparing the overall fair value of the unit to which goodwill relates to carrying value. If fair value exceeds carrying value, no further assessment of potential impairment is required. If fair value of the unit is less than carrying value, a valuation of the unit’s individual assets and liabilities is required to determine whether or not goodwill is impaired. Goodwill impairment losses are charged to earnings. IEC’s remaining goodwill relates to Celmet, which was acquired in July 2010. Leases At the inception of a lease covering equipment or real estate, the lease agreement is evaluated under criteria discussed in ASC 840-10-25 (Leases). Leases meeting one of four key criteria are accounted for as capital leases and all others are treated as operating leases. Under a capital lease, the discounted value of future lease payments becomes the basis for recognizing an asset and a borrowing, and lease payments are allocated between debt reduction and interest. For operating leases, payments are recorded as rent expense. Criteria for a capital lease include (i) transfer of ownership during the lease term; (ii) existence of a bargain purchase option under terms that make it likely to be exercised; (iii) a lease term equal to 75 percent or more of the economic life of the leased property; and (iv) minimum lease payments that equal or exceed 90 percent of the fair value of the property. Legal Contingencies When legal proceedings are brought or claims are made against us and the outcome is uncertain, ASC 450-10 (Contingencies) requires that we determine whether it is probable that an asset has been impaired or a liability has been incurred. If such impairment or liability is probable and the amount of loss can be reasonably estimated, the loss must be charged to earnings. When it is considered probable that a loss has been incurred, but the amount of loss cannot be estimated, disclosure but not accrual of the probable loss is required. Disclosure of a loss contingency is also required when it is reasonably possible, but not probable, that a loss has been incurred. Customer Deposits Customer deposits represent amounts invoiced to customers for which the revenue has not yet been earned and therefore represent a commitment for the Company to deliver goods or services in the future. Deposits are generally short term in nature and are recognized as revenue when earned. Grants from Outside Parties Grants from outside parties are recorded as other long-term liabilities and are amortized over the same period during which the associated fixed assets are depreciated. Derivative Financial Instruments The Company actively monitors its exposure to interest rate risk and from time to time uses derivative financial instruments to manage the impact of this risk. The Company uses derivatives only for purposes of managing risk associated with underlying exposures. The Company does not trade or use instruments with the objective of earning financial gains on the interest rate, nor does the Company use derivative instruments where it does not have underlying exposures. The Company manages its hedging position and monitors the credit ratings of counterparties and does not anticipate losses due to counterparty nonperformance. However, the Company’s use of derivative financial instruments may result in short-term gains or losses and increased earnings volatility. The Company’s instruments are recorded in the consolidated balance sheets at fair value in other assets or other long-term liabilities. Fair Value Measurements Under ASC 825 (Financial Instruments), the Company is required to disclose the fair value of financial instruments for which it is practicable to estimate value. The Company’s financial instruments consist of cash, accounts receivable, accounts payable, accrued liabilities, borrowings and an interest rate swap agreement. IEC believes that recorded value approximates fair value for all cash, accounts receivable, accounts payable and accrued liabilities. ASC 820 (Fair Value Measurements and Disclosures) defines fair value, establishes a framework for measurement, and prescribes related disclosures. ASC 820 defines fair value as the price that would be received upon sale of an asset or would be paid to transfer a liability in an orderly transaction. Inputs used to measure fair value are categorized under the following hierarchy: Level 1: Quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date. Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations in which all significant inputs are observable market data. Level 3: Model-derived valuations in which one or more significant inputs are unobservable. The Company deems a transfer between levels of the fair value hierarchy to have occurred at the beginning of the reporting period. There were no such transfers during fiscal 2016 or fiscal 2015. Revenue Recognition The Company’s revenue is principally derived from the sale of electronic products built to customer specifications, but also from other value-added support services and repair work. Revenue from product sales is recognized when (i) goods are shipped or title and risk of ownership have passed, (ii) the price to the buyer is fixed or determinable, and (iii) realization is reasonably assured. Service revenue is generally recognized once the service has been rendered. For material management arrangements, revenue is generally recognized as services are rendered. Under such arrangements, some or all of the following services may be provided: design, bid, procurement, testing, storage or other activities relating to materials the customer expects to incorporate into products that it manufactures. Value-added support services revenue, including material management and repair work revenue, amounted to less than 5% of total revenue in each of the first six months of fiscal 2016 and fiscal 2015. Provisions for discounts, allowances, rebates, estimated returns and other adjustments are recorded in the period the related sales are recognized. Stock-Based Compensation ASC 718 (Stock Compensation) requires that compensation expense be recognized for equity awards based on fair value as of the date of grant. For stock options, the Company uses the Black-Scholes pricing model to estimate grant date fair value. Costs associated with stock awards are recorded over requisite service periods, generally the vesting period. If vesting is contingent on the achievement of performance objectives, fair value is accrued over the period the objectives are expected to be achieved only if it is considered probable that the objectives will be achieved. The Company also has an employee stock purchase plan (“ESPP”) that provides for discounted stock purchase price. Compensation expense related to the discount is recognized as employees contribute to the plan. During fiscal 2015 and the first quarter of fiscal 2016, the ESPP was suspended in connection with the 2014 Restatements described below. The ESPP was reinstated as of the beginning of the second quarter of fiscal 2016. Restatement and Related Expenses The Company restated its consolidated financial statements for the fiscal year ended September 30, 2012, and the interim fiscal quarters and year to date periods within the year ended September 30, 2012, included in the Company’s Annual Report on Form10-K/A and the fiscal quarter ended December 28, 2012, as reported in the Company’s Quarterly Report on Form 10-Q/A for that fiscal quarter (the "Prior Restatement"). The Company also restated its consolidated financial statements for the fiscal year ended September 30, 2014, and its interim financial statements for each quarterly period within the year ended September 30, 2014, included in the Company's Annual Report on Form 10-K/A, to correct an error in the valuation allowance on deferred income tax assets as well as an error in estimating excess and obsolete inventory reserves (the "2014 Restatements"). The Prior Restatement and the 2014 Restatements together are referred to as the "Restatements". Restatement and related expenses represent third-party expenses arising from the Restatements. These expenses include legal and accounting fees incurred by the Company from external counsel and independent accountants directly attributable to the Restatements as well as other matters arising from the Prior Restatement including those more fully described in Note 17—Litigation. The Company receives reimbursement for certain of these expenses which may result in a benefit in a given period. Legal Expense Accrual The Company records legal expenses as they are incurred, based on invoices received or estimates provided by legal counsel. Future estimated legal expenses are not recorded until incurred. Income Taxes and Deferred Taxes ASC 740 (Income Taxes) requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns, but not in both. Deferred tax assets are also established for tax benefits associated with tax loss and tax credit carryforwards. Such deferred balances reflect tax rates that are scheduled to be in effect, based on currently enacted legislation, in the years the book/tax differences reverse and tax loss and tax credit carryforwards are expected to be realized. An allowance is established for any deferred tax asset for which realization is not likely. ASC 740 also prescribes the manner in which a company measures, recognizes, presents, and discloses in its financial statements uncertain tax positions that a company has taken or expects to take on a tax return. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the position will be sustained following examination by taxing authorities, based on technical merits of the position. The Company believes that it has no material uncertain tax positions. Any interest or penalties incurred are reported as interest expense. The Company’s income tax filings are subject to audit by various tax jurisdictions and current open years are fiscal 2010 through fiscal 2014. The Company is currently under federal income tax audit for fiscal 2013 and does not expect the audit to have a material impact on the financial statements. Earnings Per Share Basic earnings per common share are calculated by dividing income available to common stockholders by the weighted average number of shares outstanding during each period. Diluted earnings per common share add to the denominator incremental shares resulting from the assumed exercise of all potentially dilutive stock options, as well as restricted (non-vested) stock, restricted stock units ("RSUs") and anticipated issuances under the employee stock purchase plan. Options, restricted stock and RSUs are primarily held by directors, officers and certain employees. A summary of shares used in earnings per share (“EPS”) calculations follows.
As a result of the incremental shares being negative for the three and six months ended April 1, 2016, the Company calculated diluted earnings per share using weighted average basic shares outstanding, as using diluted shares would be anti-dilutive. As a result of the net loss for three and six months ended March 27, 2015, the Company calculated diluted earnings per share using weighted average basic shares outstanding, as using diluted shares would be anti-dilutive to loss per share. Dividends IEC does not pay dividends on its common stock, as it is the Company’s current policy to retain earnings for use in the business. Furthermore, the Company’s Fifth Amended and Restated Credit Facility Agreement with M&T Bank includes certain restrictions on paying cash dividends as more fully described in Note 8—Credit Facilities. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses and the disclosure of contingent assets and liabilities. Actual results may differ from management’s estimates. Statements of Cash Flows The Company presents operating cash flows using the indirect method of reporting under which non-cash income and expense items are removed from net income. Recently Issued Accounting Standards |
SCB DIVESTITURE AND DISCONTINUED OPERATIONS |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations | NOTE 2—SCB DIVESTITURE AND DISCONTINUED OPERATIONS As previously disclosed, SCB, a wholly owned subsidiary of the Company, entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”), effective as of July 9, 2015, by and between SCB and DCX-Chol Enterprises, Inc. ("DCX"), whereby DCX purchased the multi-conductor stranded copper cable and harness assemblies manufacturing and servicing business previously operated by SCB. DCX, a provider of engineered high performance interconnect products, purchased substantially all assets and assumed certain obligations and liabilities of SCB for the agreed upon selling price of $2.5 million, adjusted to $2.4 million due to certain deposits and prorations. DCX paid the adjusted purchase price in cash at closing. The Asset Purchase Agreement contains indemnification provisions of each party with respect to breaches of representations, warranties and covenants and certain other specified matters. Prior to this transaction, there were no material relationships between the Company and DCX or between DCX and any officer, director or affiliate of the Company. During the third quarter of fiscal 2015, the Company received an offer from DCX to purchase substantially all the assets and assume certain liabilities of SCB for approximately $2.5 million. The Company's willingness to accept the offer was considered to be an indication of fair value and as such, impairment charges of $4.1 million were taken to adjust SCB's assets to fair value as of June 26, 2015. The pre-tax loss on the sale of SCB for the year ended September 30, 2015 included in Loss on discontinued operations, net in the income statement was calculated as follows:
Carrying amounts of major classes of assets and liabilities that were disposed of follows:
SCB's revenue and loss before income taxes follows:
The loss on discontinued operations for the three and six months ended March 27, 2015 was comprised of operating losses; there was no provision or benefit from taxes for these periods. |
ALLOWANCE FOR DOUBTFUL ACCOUNTS |
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ALLOWANCE FOR DOUBTFUL ACCOUNTS | A summary follows of activity in the allowance for doubtful accounts during the six months ended April 1, 2016 and March 27, 2015.
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INVENTORIES |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES | A summary of inventory by category at period end follows:
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FIXED ASSETS |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FIXED ASSETS | A summary of fixed assets and accumulated depreciation at period end follows:
Depreciation expense during the three and six months ended April 1, 2016 and March 27, 2015 follows:
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INTANGIBLE ASSETS |
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INTANGIBLE ASSETS | IEC's intangible assets (other than goodwill) were acquired in connection with purchase of Albuquerque in fiscal 2010. Albuquerque's building and land were acquired subject to an Industrial Revenue Bond (“IRB”) that exempts the property from real estate taxes for the term of the IRB. The tax abatement was valued at $360 thousand at the date of acquisition, and such value is being amortized over the 9.2 year exemption period that remained as of the acquisition date. No impairment has been taken for this asset since the Albuquerque acquisition. A summary of intangible assets by category and accumulated amortization at period end follows:
Amortization expense during the three and six months ended April 1, 2016 and March 27, 2015 follows:
A summary of amortization expense for the next five years follows:
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GOODWILL |
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Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | The goodwill balance of $0.1 million resulted from the acquisition of Celmet in fiscal 2010. There has been no impairment for this goodwill since the acquisition date. |
CREDIT FACILITIES |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CREDIT FACILITIES | A summary of borrowings at period end follows:
(1) Rates noted are before impact of interest rate swap. M&T Bank Credit Facilities On December 14, 2015, the Company and M&T Bank entered into the Fifth Amended and Restated Credit Facility Agreement (“Fifth Amended Credit Agreement”), which amends and restates in its entirety the Fourth Amended and Restated Credit Facility Agreement dated as of January 18, 2013, as amended (the “2013 Credit Agreement”). Borrowings under the Fifth Amended Credit Agreement are secured by, among other things, the assets of IEC and its subsidiaries. The Fifth Amended Credit Agreement prohibits the Company from paying dividends or repurchasing or redeeming its common stock without first obtaining the consent of M&T Bank. Except as described below, the terms, conditions, covenants, guarantees and collateral previously in effect under the 2013 Credit Agreement will continue substantially unchanged under the Fifth Amended Credit Agreement. Before entering into the Fifth Amended Credit Agreement, the Company and M&T Bank were performing under the terms of the Sixth Amendment to the 2013 Credit Agreement entered into on May 8, 2015 ("the Sixth Amendment"). Individual debt facilities provided under the Fifth Amended Credit Agreement, which remain mostly unchanged from the 2013 Credit Agreement, are described below:
Borrowing Base Under the Fifth Amended Credit Agreement, the maximum amount the Company can borrow under the Revolver is the lesser of (i) 85% of eligible receivables plus 35% of eligible inventories (up to a cap of $3.75 million) or (ii) $20.0 million. The Sixth Amendment removed the provision from the 2013 Credit Agreement, that allowed the Company to elect that another 35% of eligible inventories be included in the borrowing base for limited periods of time during which a higher rate of interest was charged on the Revolver. Borrowings based on inventory balances were limited to a cap of $3.75 million, or when subject to the higher percentage limit, $4.75 million. The Sixth Amendment also removed the provision in the 2013 Credit Agreement that allowed for borrowing at an increased interest rate margin based on 85% of eligible receivables plus 70% of eligible inventories up to a maximum of $4.75 million. At April 1, 2016 and September 30, 2015, the upper limit on Revolver borrowings was $17.8 million and $20.0 million, respectively. Average available balances on the Revolver amounted to $9.9 million during the six months ended April 1, 2016. Interest Rates Under the Fifth Amended Credit Agreement, variable rate debt accrues interest at LIBOR plus the applicable marginal interest rate that fluctuates based on the Company's Debt to EBITDAS Ratio, as defined below. Under the Fifth Amended Credit Agreement the applicable marginal interest rate was fixed on December 14, 2015 as follows: 4.25% for the Revolver, 4.50% for the Albuquerque Mortgage Loan and 3.25% for the Term Loan B, until the tenth day following the date the Company delivered its quarterly covenant calculation for the first quarter of fiscal 2016. Subsequent to this date, for the variable rate debt, the interest rate is LIBOR plus the applicable margin interest rate that is based on the Company's Debt to EBITDAS Ratio, as defined below. Changes to applicable margins and unused fees resulting from the Debt to EBITDAS Ratio generally become effective mid-way through the subsequent quarter. The applicable margins based on the first quarter covenant calculations were as follows: 4.25% for the Revolver, 4.50% for the Albuquerque Mortgage Loan and 3.25% for the Term Loan B. Prior to December 14, 2015, the Sixth Amendment fixed each facility’s applicable margin through March 31, 2016 as follows: 4.25% for the Revolver, 4.50% for the Albuquerque Mortgage Loan and 3.25% for the Term Loan B. The applicable unused line fee of 0.50% also was extended through March 31, 2016, and thereafter if the Company is not in compliance with its financial covenants. The Company incurs quarterly unused commitment fees ranging from 0.250% to 0.500% of the excess of $20.0 million over average borrowings under the Revolver. Fees incurred amounted to $23.8 thousand and $30.6 thousand during the six months ended April 1, 2016 and March 27, 2015, respectively. The fee percentage varies based on the Company's Debt to EBITDAS Ratio, as defined below. Interest Rate Swap In connection with the 2013 Credit Agreement, on January 18, 2013, the Company and M&T Bank entered into an interest rate swap arrangement (“Swap Transaction”). The Swap Transaction is for a notional amount of $14.0 million with an effective date of February 1, 2013 and a termination date of February 1, 2023. The Swap Transaction is designed to reduce the variability of future interest payments with respect to Term Loan B by effectively fixing the annual interest rate payable on the loan’s outstanding principal. Pursuant to the Swap Transaction, the Company’s one month LIBOR rate is swapped for a fixed rate of 1.32%. When the swap fixed rate is added to the Term Loan B spread of 3.25%, the Company’s interest rate applicable to Term Loan B is effectively fixed at 4.57%. Financial Covenants The Fifth Amended Credit Agreement also contains various affirmative and negative covenants including financial covenants. The Company is required to maintain (i) a minimum level of quarterly EBITDAS, as defined below ("Quarterly EBITDAS"), (ii) a ratio of total debt to twelve month EBITDAS (“Debt to EBITDAS Ratio”) that is below a specified limit, (iii) a minimum fixed charge coverage ratio (“Fixed Charge Coverage Ratio”), (iv) a maximum level of inventory (“Maximum Inventory”), and (v) a maximum amount of capital expenditures (“Maximum Capital Expenditures”). The Debt to EBITDAS Ratio is the ratio of debt to earnings before interest, taxes, depreciation, amortization and non-cash stock compensation expense ("EBITDAS"). The Fixed Charge Coverage Ratio compares (i) 12 month EBITDA plus non-cash stock compensation expense minus unfinanced capital expenditures minus taxes paid, to (ii) the sum of interest expense, principal payments and dividends, if any (fixed charges). The Maximum Inventory covenant allows for specific levels of inventory as defined by the agreement. The Maximum Capital Expenditures covenants allow for a maximum amount of capital expenditures on an annual basis. Covenant Ratios in effect at April 1, 2016, pursuant to the Fifth Amended Credit Agreement, are as follows:
Prior to the Fifth Amended Credit Agreement, pursuant to the Sixth Amendment, M&T agreed to (i) modify the financial covenants related to Quarterly EBITDARS, the Debt to EBITDARS Ratio and the Fixed Coverage Charge Ratio and (ii) waive events of default arising from the Company’s non-compliance with these covenants during the fiscal quarters ended December 26, 2014 and March 27, 2015. Quarterly EBITDARS was the quarterly measurement of earnings before interest, taxes, depreciation, amortization, rent expense and non-cash stock compensation expense. The Debt to EBITDARS Ratio was the ratio of debt to earnings before interest, taxes, depreciation, amortization, rent expense and non-cash stock compensation expense. The Fixed Charge Coverage Ratio compared (i) 12 month EBITDA plus non-cash stock compensation expense minus unfinanced capital expenditures minus cash taxes paid, to (ii) the sum of interest expense, principal payments, sale-leaseback payments and dividends, if any (fixed charges). The Sixth Amendment also amended the definition of EBITDARS under the 2013 Credit Agreement to add back a maximum amount of professional services fees and expenses incurred and paid or to be paid prior to September 30, 2015. EBITDARS as amended and restated meant, for the applicable period, earnings before interest, taxes, depreciation, amortization, plus (i) payments due under the M&T sale-leaseback arrangement, (ii) non-cash stock option expense and (iii) professional services fees and expenses incurred and paid or to be paid prior to September 30, 2015, up to a maximum of (a) for the fiscal quarter ended December 26, 2014, $235,112, (b) for the fiscal quarter ending March 27, 2015, $2,652,659, (c) for the fiscal quarter ending June 26, 2015, $200,000 plus costs incurred and paid by the Company during such fiscal quarter in connection with mortgages, environmental site assessments, title insurance and appraisals and (d) for the fiscal quarter ending September 30, 2015, $200,000 plus costs incurred and paid by the Company during such fiscal quarter, all on a consolidated basis and determined in accordance with GAAP on a consistent basis. The Sixth Amendment also modified the Quarterly EBITDARS covenant to be equal to or greater than $1.25 million for the fiscal quarter ending June 26, 2015, and $1.5 million for each fiscal quarter thereafter. A summary of financial covenant compliance follows:
(1) The Company was subject to the 2013 Credit Agreement during these periods. As a result of the 2014 Restatements as described in Note 1—Our Business and Summary of Significant Accounting Policies, the Company was in default of the Credit Agreement for failure to deliver financial statements prepared in accordance with GAAP. The Company received a waiver from M&T regarding this event of default. Other Borrowings
Events of Default In addition to the items discussed above, the Fifth Amended Credit Agreement includes the following two events of default:
There were no events of default for the six months ended April 1, 2016. Contractual Principal Payments A summary of contractual principal payments under IEC's borrowings for the next five years taking into consideration the Fifth Amended Credit Agreement follows:
(1) Includes Revolver balance of $9.7 million at April 1, 2016 |
DERIVATIVE FINANCIAL INSTRUMENTS |
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Apr. 01, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | Interest Rate Risk Management In connection with the 2013 Credit Agreement, on January 18, 2013, the Company and M&T Bank entered into the Swap Transaction. The Swap Transaction is for a notional amount of $14.0 million with an effective date of February 1, 2013 and a termination date of February 1, 2023. The Swap Transaction is designed to reduce the variability of future interest payments with respect to Term Loan B by effectively fixing the annual interest rate payable on outstanding principal of Term Loan B. Pursuant to the interest rate swap, the Company’s one month LIBOR rate is swapped for a fixed rate of 1.32%. As more fully described in Note 8—Credit Facilities, the applicable margin on Term Loan B was fixed at 3.25% until the tenth day following the date the Company delivered its quarterly covenant calculation for the first quarter of fiscal 2016. The applicable margin on Term Loan B based on the quarterly covenant calculation for the first quarter of fiscal 2016 was 3.25%. When the swap fixed rate is added to the Term Loan B spread of 3.25%, the Company’s interest rate applicable to Term Loan B is effectively fixed at 4.57%. The fair value of the interest rate swap agreement represented a liability of $99.9 thousand and $46.0 thousand at April 1, 2016 and September 30, 2015, respectively, and was estimated based on Level 2 valuation inputs. The Company did not designate the swap as a cash flow hedge at inception and therefore, the gains or losses from the changes in fair value of the derivative instrument are recognized in earnings for the periods ended April 1, 2016 and September 30, 2015 within interest expense. The fair value of the interest rate swap of $99.9 thousand and $46.0 thousand is recorded in other long-term liability in the Consolidated Balance Sheet at April 1, 2016 and September 30, 2015, respectively. |
FAIR VALUE OF FINANCIAL INSTRUMENTS |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | Financial Instruments Carried at Fair Value The Company’s Swap Transaction is recorded on the balance sheet as either an asset or a liability measured at fair value. The Company estimates the fair value of its Swap Transaction based on Level 2 valuation inputs, including fixed interest rates, LIBOR implied forward interest rates and the remaining time to maturity. At April 1, 2016, the Swap Transaction was a liability with a fair value of $99.9 thousand. Financial Instruments Carried at Historical Cost The Company’s long-term debt is not quoted. Fair value was estimated using a discounted cash flow analysis based on Level 2 valuation inputs, including borrowing rates the Company believes are currently available to it for loans with similar terms and maturities. The Company’s debt is carried at historical cost on the balance sheet. A summary of the fair value and carrying value of fixed rate debt at period end follows:
The fair value of the remainder of the Company’s debt approximated carrying value at April 1, 2016 and September 30, 2015 as it is variable rate debt. |
WARRANTY RESERVES |
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Product Warranties Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
WARRANTY RESERVES | NOTE 11—WARRANTY RESERVES IEC generally warrants its products and workmanship for up to twelve months from date of sale. As an offset to warranty claims, the Company is sometimes able to obtain reimbursement from suppliers for warranty-related costs or losses. Based on historical warranty claims experience and in consideration of sales trends, a reserve is maintained for estimated future warranty costs to be incurred on products and services sold through the balance sheet date. A summary of additions to and charges against IEC’s warranty reserves during the period follows:
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DEFERRED GRANTS |
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Deferred Grants [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEFERRED GRANTS | The Company received grants for certain facility improvements from state and local agencies in which the Company operates. These grants reimburse the Company for a portion of the actual cost or provide in kind services in support of capital projects. The Company received a total of $0.9 million of grants prior to fiscal 2015. There were no deferred grants recorded in fiscal 2016 or fiscal 2015. One of the Company’s grants is a loan to grant agreement. The Company signed a promissory note, which was to be forgiven if certain employment targets are met at specified dates. The portion of the promissory note to be forgiven is calculated by applying the ratio of jobs created to jobs committed to the original note amount. If the employment targets are not met, the Company is obligated to repay the loan with interest. As the Company does not currently expect to meet these employment targets, $32 thousand of the grant is presented as a loan payable. The remaining portion is recorded as a deferred amount within other long-term liabilities on the balance sheet. The Company received a government grant for the purchase of equipment upgrades to accommodate existing and anticipated business growth. Required employment targets for this grant were met as of September 30, 2014. The Company is also the recipient of matching grants from two local governmental agencies related to certain renovations for one of its operating locations. One agency contributed in kind services and property of $0.1 million while the other contributed cash of $0.1 million to match expenditures by the Company of at least the same amount. The grants are amortized over the useful lives of the related fixed assets when there is reasonable assurance that the Company will meet the employment targets. Accumulated amortization for the portion of the Company's loan to grant that was converted to a promissory note was adjusted in the three months ended January 1, 2016. Grant amortization during the three and six months ended April 1, 2016 and March 27, 2015 follows:
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STOCK-BASED COMPENSATION |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | The 2010 Omnibus Incentive Compensation Plan (the “2010 Plan”) was approved by the Company’s stockholders at the January 2011 Annual Meeting. This plan replaced IEC’s 2001 Stock Option and Incentive Plan (the “2001 Plan”), which expired in December 2011. The 2010 Plan, which is administered by the Compensation Committee of the Board of Directors, provides for the following types of awards: incentive stock options, nonqualified options, stock appreciation rights, restricted shares, restricted stock units, performance compensation awards, cash incentive awards, director stock and other equity-based and equity-related awards. Awards are generally granted to certain members of management and employees, as well as directors. Under the 2010 Plan, up to 2,000,000 shares of common stock may be issued over a term of ten years. Stock-based compensation expense recorded under the 2010 and 2001 Plans as well as the ESPP totaled $162.0 thousand and $2.0 million for the six months ended April 1, 2016 and March 27, 2015, respectively. As further discussed in Note 17—Litigation, during the six months ended April 1, 2016, incentive compensation shares were returned by the Company's former CEO resulting in a reduction to compensation expense of $60.0 thousand. At April 1, 2016 there were 801,829 shares available to be issued under the 2010 Plan. On February 2, 2015, the Company announced that its stockholders elected all seven Vintage Opportunity Fund, LP-nominated directors to the Company’s Board of Directors. This change in the Company's Board of Directors was deemed a change in control event which triggered automatic vesting for all awards outstanding under the 2010 and 2001 Plans. On the change in control date, 390,882 shares of restricted stock and 119,500 stock options vested, which resulted in stock-based compensation expense of $1.8 million. Expenses relating to stock options that comply with certain U.S. income tax rules are neither deductible by the Company nor taxable to the employee. Further information regarding awards granted under the 2001 Plan, 2010 Plan and employee stock purchase plan is provided below. Stock Options When options are granted, IEC estimates the fair value of the option using the Black-Scholes option pricing model and recognizes the computed value as compensation cost over the vesting period, which is typically four years. The contractual term of options granted under the 2010 Plan is generally seven years. There were no options granted during the six months ended April 1, 2016. Assumptions used in the Black-Scholes model and the estimated value of options granted during the six months ended March 27, 2015 are included in the table below.
A summary of stock option activity, together with other related data, follows:
Changes in the number of non-vested options outstanding, together with other related data, follows:
Restricted (Non-vested) Stock Holders of IEC restricted stock have voting and dividend rights as of the date of grant, but until vested, the shares may be forfeited and cannot be sold or otherwise transferred. At the end of the vesting period, which is typically four or five years (three years in the case of directors), holders have all the rights and privileges of any other IEC common stockholder. The fair value of a share of restricted stock is its market value on the date of grant, and that value is recognized as stock compensation expense over the vesting period. A summary of restricted stock activity, together with related data, follows:
Employee Stock Purchase Plan The Company administers an ESPP that provides for a discounted stock purchase price. On February 13, 2015, the Compensation Committee of the Company’s Board of Directors suspended operation of the ESPP indefinitely in connection with the 2014 Restatements described in Note 1—Our Business and Summary of Significant Accounting Policies. The Compensation Committee of the Company's Board of Directors reinstated the ESPP on December 2, 2015; however, participants were not able to contribute to the ESPP until January, 2016. Employees currently receive a 10% discount on stock purchases through the ESPP. Employee contributions to the plan, net of withdrawals were $8.1 thousand and $8.0 thousand for the six months ended April 1, 2016 and March 27, 2015, respectively. Compensation expense recognized under the ESPP was $1.0 thousand for both the six months ended April 1, 2016 and March 27, 2015. Stock Issued to Board Members In addition to annual grants of restricted stock, included in the table above, Board members may elect to have their meeting fees paid in the form of shares of the Company’s common stock. In connection with the Prior Restatement of the Company’s financial statements, the Company determined not to pay, and has not paid, any meeting fees in stock since May 21, 2013. |
RETIREMENT PLAN |
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Apr. 01, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
RETIREMENT PLAN | The Company administers a retirement savings plan for the benefit of its eligible employees and their beneficiaries under the provisions of Sections 401(a) and (k) of the Internal Revenue Code. Eligible employees may contribute a portion of their compensation to the plan, and the Company is permitted to make discretionary contributions as determined by the Board of Directors. The Company contributes 25% of the first 6% contributed by all employees at all locations. Company contributions during the six months ended April 1, 2016 and March 27, 2015 both totaled $132 thousand. |
INCOME TAXES |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | Provision for income taxes during the three and six months ended April 1, 2016 and March 27, 2015 follows:
The Company has recorded a full valuation allowance on all deferred tax assets. Although we have recorded a full valuation allowance for all deferred tax assets, including net operating loss carryforwards ("NOLs"), these NOLs remain available to the Company to offset taxable income and reduce tax payments. IEC has federal NOLs for income tax purposes of approximately $35.8 million at September 30, 2015, expiring mainly in years 2021 through 2026. At September 30, 2015, the Company also had state NOLs of $27.9 million, expiring mainly in years 2021 through 2025 and $1.2 million of New York state investment tax and other credit carryforwards, expiring in various years through 2028. The credits cannot be utilized until the New York NOL is exhausted. Recent New York state corporate tax reform has reduced the business income base rate for qualified manufacturers in New York state to 0% beginning in fiscal 2015 for IEC. As a result of this legislation, the Company has not attributed any value to its state NOLs. |
MARKET SECTORS AND MAJOR CUSTOMERS |
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Risks and Uncertainties [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MARKET SECTORS AND MAJOR CUSTOMERS | A summary of sales, according to the market sector within which IEC's customers operate, follows:
Two individual customers each represented 10% or more of sales for the six months ended April 1, 2016. Both customers were from the Medical sector, and represented 18% and 17% of sales. Four individual customers represented 10% or more of sales for the six months ended March 27, 2015. One customer in the Industrial sector represented 18% of sales, while two customers in the Medical sector represented 15% and 10% of sales, and one customer in the Aerospace & Defense sector represented 11% of sales for the six months ended March 27, 2015. Two individual customers represented 10% or more of receivables and accounted for 29% of outstanding balances at April 1, 2016. Two individual customers also represented 10% or more of receivables and accounted for 21% of the outstanding balances at March 27, 2015. Credit risk associated with individual customers is periodically evaluated by analyzing the entity’s financial condition and payment history. Customers generally are not required to post collateral. |
LITIGATION |
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Apr. 01, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
LITIGATION | As disclosed in prior filings, the staff of the U.S. Securities and Exchange Commission (the "SEC") is conducting a formal investigation relating to the Prior Restatement and other matters. During the first quarter of fiscal 2016, the Company began engaging in discussions with the SEC staff concerning a potential resolution of the investigation. These discussions led to the Company reaching a preliminary understanding with the SEC staff regarding a potential settlement. In this regard, the Company understands that the SEC staff is prepared to recommend that the SEC file a settled administrative enforcement action against the Company alleging violations of the antifraud, periodic and current reporting, internal controls, and books-and-records provisions of the federal securities laws. As part of the proposed settlement, the Company would (i) neither admit nor deny the SEC’s findings, (ii) pay a penalty of $200,000, and (iii) agree to cease-and-desist from committing or causing any violations or future violations of those provisions. Final resolution of the SEC investigation with respect to the Company is subject to final approval of the settlement by the Commissioners of the SEC. Accordingly, there can be no assurance that the Company’s efforts to resolve the SEC investigation will be successful or that the settlement terms will be as anticipated. The Company also cannot predict the timing of any settlement or, in the event the proposed settlement is not approved, what the ultimate resolution of the SEC investigation will be with respect to the Company. In addition, during the first quarter of fiscal 2016, the Company became aware that the SEC staff issued “Wells Notices” to two individuals who are no longer associated with the Company - a former Executive Vice President of the Company and a former Controller of the Company’s previously-owned Southern California Braiding, Inc. subsidiary that was the subject of the Prior Restatement. A Wells Notice is an indication that the SEC staff has made a preliminary determination to recommend that the SEC file an enforcement action. Each of these individuals has also reached a preliminary understanding with the SEC staff regarding a potential settlement. The Company cannot predict the outcome of the SEC investigation with respect to these two former employees, including whether their settlements will be approved. In connection with the Prior Restatement, W. Barry Gilbert, our former chief executive officer and director, voluntarily returned to the Company certain incentive compensation and the proceeds from certain sales of the Company's common stock. These transfers, which were made during the six months ended April 1, 2016, were in the form of cash of $42 thousand and shares of common stock valued at $60 thousand. In June 2015, W. Barry Gilbert, our former chief executive officer and director commenced an arbitration proceeding against us in connection with the termination of his employment agreement effective February 6, 2015. Mr. Gilbert alleged that his termination was not for cause as we have claimed and that we breached the terms of our employment agreement with him by not paying the compensation called for under his employment agreement for a termination without cause. Effective March 16, 2016, the Company entered into a separation agreement with Mr. Gilbert (the "Separation Agreement"). Pursuant to the terms of the Separation Agreement, Mr. Gilbert received a separation benefit of $500 thousand that was paid on March 16, 2016, and he will receive $200 thousand payable by May 16, 2016, $100 thousand payable on both March 16, 2017 and March 16, 2018, and $75 thousand payable on each of March 16, 2019 and March 16, 2020. The expense associated with the separation agreement is included in selling and administrative expenses, a portion of which was recorded in the prior fiscal year. The remaining unpaid amount is included in accrued payroll and related expenses. The separation benefit is subject to acceleration in the event of certain changes in control of the Company. The Company also released Mr. Gilbert from any and all claims and causes of action directly or indirectly related to Mr. Gilbert’s employment relationship with the Company. In consideration of the foregoing, Mr. Gilbert agreed to release the Company from any and all claims and causes of action arising out of or relating to his previous employment with the Company, as well as certain other covenants set forth in the Separation Agreement. From time to time, the Company may be involved in other legal action in the ordinary course of its business, but management does not believe that any such other proceedings commenced through the date of the financial statements included in this Form 10-Q. individually or in the aggregate, will have material adverse effect on the Company’s consolidated financial position. |
COMMITMENTS AND CONTINGENCIES |
6 Months Ended |
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Apr. 01, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Loss Contingencies As discussed in Note 17, (i) the SEC is conducting a formal investigation relating to the Prior Restatement and other matters, (ii) during the first quarter of fiscal 2016, the Company reached a preliminary understanding with the SEC staff concerning a potential resolution of the investigation, and (iii) two individuals who are no longer associated with the Company received Wells Notices from the SEC staff. The Company has insurance that covers the Company and certain individuals (including the two former employees discussed above) for certain expenses incurred in connection with the SEC investigation. Through January 1, 2016, the Company has received aggregate reimbursements from its primary carrier of approximately $9.0 million. The Company’s insurance policy contains exclusion provisions that are triggered when “a final, non-appealable adjudication” in an underlying proceeding or action “establishes” certain conduct, including “any deliberately fraudulent act or omission or any willful violation of any statute or regulation.” The Company anticipates any potential resolution of the SEC investigation will be on a “no admit or deny” basis and, as such, will not “establish” any conduct as part of any “final, non-appealable adjudication.” Accordingly, the Company has concluded it is not probable that the insurance carrier would (i) seek to recoup the reimbursement of expenses it has made to the Company or (ii) be successful in the event that recoupment were sought. Purchase Commitments During August 2011, one of IEC's operating units entered into a five-year agreement with one of its suppliers to purchase a minimum volume of materials in exchange for receiving favorable pricing on the unit's purchases. The agreement was subsequently amended to extend through September 30, 2018. In the event the unit's cumulative purchases do not equal or exceed stated minimums, the supplier has a right to terminate the agreement and the IEC unit would be obligated to pay an early termination fee that declines from $365 thousand to zero over the term of the agreement. As of the date of this Form 10-Q, the Company expects to exceed the minimum purchase requirements under the agreement, thereby avoiding any termination fee. |
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Our Business | Our Business |
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Generally Accepted Accounting Principles | Generally Accepted Accounting Principles IEC's financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), as set forth in the Financial Accounting Standards Board's (“FASB”) Accounting Standards Codification (“ASC”). |
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Fiscal Calendar | Fiscal Calendar The Company’s fiscal year ends on September 30th, and the first three quarters end generally on the Friday closest to the last day of the calendar quarter. |
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Consolidation | Consolidation |
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Unaudited Financial Statements | Unaudited Financial Statements The accompanying unaudited financial statements for the three and six months ended April 1, 2016 and March 27, 2015 have been prepared in accordance with GAAP for interim financial information. In the opinion of management, all adjustments required for a fair presentation of the information have been made. The accompanying financial statements should be read in conjunction with the financial statements and notes included in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2015. |
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Cash and Cash Equivalents | Cash and Cash Equivalents The Company’s cash and cash equivalents principally represent deposit accounts with Manufacturers and Traders Trust Company (“M&T Bank”), a banking corporation headquartered in Buffalo, NY. |
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Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company establishes an allowance for doubtful accounts receivable based on the age of outstanding invoices and management's evaluation of collectability. Accounts are written off after all reasonable collection efforts have been exhausted and management concludes that likelihood of collection is remote. |
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Inventory Valuation | Inventory Valuation Inventories are stated at the lower of cost or market value under the first-in, first-out method. The Company regularly assesses slow-moving, excess and obsolete inventory and maintains balance sheet reserves in amounts required to reduce the recorded value of inventory to lower of cost or market. |
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Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment (“PP&E”) are stated at cost and are depreciated over various estimated useful lives using the straight-line method. Maintenance and repairs are charged to expense as incurred, while renewals and improvements are capitalized. At the time of retirement or other disposition of PP&E, cost and accumulated depreciation are removed from the accounts and any gain or loss is recorded in earnings. Depreciable lives generally used for PP&E are presented in the table below. Leasehold improvements are amortized over the shorter of the lease term or estimated useful life of the improvement.
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Intangible Assets | Intangible Assets |
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Reviewing Long-Lived Assets for Potential Impairment | Reviewing Long-Lived Assets for Potential Impairment ASC 360-10 (Property, Plant and Equipment) and ASC 350-30 (Intangibles) require the Company to test long-lived assets (PP&E and definitive lived assets) for recoverability whenever events or circumstances indicate that the carrying amount may not be recoverable. If carrying value exceeds undiscounted future cash flows attributable to an asset, it is considered impaired and the excess of carrying value over fair value must be charged to earnings. No impairment charges were recorded by IEC for property, plant and equipment or intangibles in fiscal 2016. |
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Goodwill | Goodwill |
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Leases | Leases At the inception of a lease covering equipment or real estate, the lease agreement is evaluated under criteria discussed in ASC 840-10-25 (Leases). Leases meeting one of four key criteria are accounted for as capital leases and all others are treated as operating leases. Under a capital lease, the discounted value of future lease payments becomes the basis for recognizing an asset and a borrowing, and lease payments are allocated between debt reduction and interest. For operating leases, payments are recorded as rent expense. Criteria for a capital lease include (i) transfer of ownership during the lease term; (ii) existence of a bargain purchase option under terms that make it likely to be exercised; (iii) a lease term equal to 75 percent or more of the economic life of the leased property; and (iv) minimum lease payments that equal or exceed 90 percent of the fair value of the property. |
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Legal Contingencies | Legal Contingencies When legal proceedings are brought or claims are made against us and the outcome is uncertain, ASC 450-10 (Contingencies) requires that we determine whether it is probable that an asset has been impaired or a liability has been incurred. If such impairment or liability is probable and the amount of loss can be reasonably estimated, the loss must be charged to earnings. When it is considered probable that a loss has been incurred, but the amount of loss cannot be estimated, disclosure but not accrual of the probable loss is required. Disclosure of a loss contingency is also required when it is reasonably possible, but not probable, that a loss has been incurred. |
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Grants from Outside Parties | Grants from Outside Parties Grants from outside parties are recorded as other long-term liabilities and are amortized over the same period during which the associated fixed assets are depreciated. |
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Fair Value Measurements | Fair Value Measurements Under ASC 825 (Financial Instruments), the Company is required to disclose the fair value of financial instruments for which it is practicable to estimate value. The Company’s financial instruments consist of cash, accounts receivable, accounts payable, accrued liabilities, borrowings and an interest rate swap agreement. IEC believes that recorded value approximates fair value for all cash, accounts receivable, accounts payable and accrued liabilities. ASC 820 (Fair Value Measurements and Disclosures) defines fair value, establishes a framework for measurement, and prescribes related disclosures. ASC 820 defines fair value as the price that would be received upon sale of an asset or would be paid to transfer a liability in an orderly transaction. Inputs used to measure fair value are categorized under the following hierarchy: Level 1: Quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date. Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations in which all significant inputs are observable market data. Level 3: Model-derived valuations in which one or more significant inputs are unobservable. The Company deems a transfer between levels of the fair value hierarchy to have occurred at the beginning of the reporting period. There were no such transfers during fiscal 2016 or fiscal 2015. |
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Revenue Recognition | Value-added support services revenue, including material management and repair work revenue, amounted to less than 5% of total revenue in each of the first six months of fiscal 2016 and fiscal 2015. Provisions for discounts, allowances, rebates, estimated returns and other adjustments are recorded in the period the related sales are recognized. |
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Stock-Based Compensation | Stock-Based Compensation |
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Restatement and Related Expenses | Restatement and Related Expenses |
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Income Taxes and Deferred Taxes | Income Taxes and Deferred Taxes ASC 740 (Income Taxes) requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns, but not in both. Deferred tax assets are also established for tax benefits associated with tax loss and tax credit carryforwards. Such deferred balances reflect tax rates that are scheduled to be in effect, based on currently enacted legislation, in the years the book/tax differences reverse and tax loss and tax credit carryforwards are expected to be realized. An allowance is established for any deferred tax asset for which realization is not likely. ASC 740 also prescribes the manner in which a company measures, recognizes, presents, and discloses in its financial statements uncertain tax positions that a company has taken or expects to take on a tax return. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the position will be sustained following examination by taxing authorities, based on technical merits of the position. The Company believes that it has no material uncertain tax positions. Any interest or penalties incurred are reported as interest expense. The Company’s income tax filings are subject to audit by various tax jurisdictions and current open years are fiscal 2010 through fiscal 2014. |
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Earnings Per Share | Earnings Per Share Basic earnings per common share are calculated by dividing income available to common stockholders by the weighted average number of shares outstanding during each period. Diluted earnings per common share add to the denominator incremental shares resulting from the assumed exercise of all potentially dilutive stock options, as well as restricted (non-vested) stock, restricted stock units ("RSUs") and anticipated issuances under the employee stock purchase plan. Options, restricted stock and RSUs are primarily held by directors, officers and certain employees. A summary of shares used in earnings per share (“EPS”) calculations follows.
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses and the disclosure of contingent assets and liabilities. Actual results may differ from management’s estimates. |
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Statements of Cash Flows | Statements of Cash Flows The Company presents operating cash flows using the indirect method of reporting under which non-cash income and expense items are removed from net income. |
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Recently Issued Accounting Standards | Recently Issued Accounting Standards |
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | Depreciable lives generally used for PP&E are presented in the table below. Leasehold improvements are amortized over the shorter of the lease term or estimated useful life of the improvement.
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Schedule of Weighted Average Number of Shares |
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SCB DIVESTITURE AND DISCONTINUED OPERATIONS (Tables) |
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Disposal Groups, Including Discontinued Operations | The pre-tax loss on the sale of SCB for the year ended September 30, 2015 included in Loss on discontinued operations, net in the income statement was calculated as follows:
Carrying amounts of major classes of assets and liabilities that were disposed of follows:
SCB's revenue and loss before income taxes follows:
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ALLOWANCE FOR DOUBTFUL ACCOUNTS (Tables) |
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Allowance for Credit Losses on Financing Receivables | A summary follows of activity in the allowance for doubtful accounts during the six months ended April 1, 2016 and March 27, 2015.
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INVENTORIES (Tables) |
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Schedule of Inventory, Current | A summary of inventory by category at period end follows:
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FIXED ASSETS (Tables) |
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Fixed Assets Schedule And Accumulated Depreciation Disclosure | A summary of fixed assets and accumulated depreciation at period end follows:
Depreciation expense during the three and six months ended April 1, 2016 and March 27, 2015 follows:
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INTANGIBLE ASSETS (Tables) |
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Indefinite-Lived Intangible Assets (Excluding Goodwill) | A summary of intangible assets by category and accumulated amortization at period end follows:
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Schedule of Amortization Expense | Amortization expense during the three and six months ended April 1, 2016 and March 27, 2015 follows:
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | A summary of amortization expense for the next five years follows:
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CREDIT FACILITIES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | A summary of borrowings at period end follows:
(1) Rates noted are before impact of interest rate swap. |
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Schedule of Debt Covenant | A summary of financial covenant compliance follows:
Covenant Ratios in effect at April 1, 2016, pursuant to the Fifth Amended Credit Agreement, are as follows:
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Schedule of Maturities of Long-term Debt | A summary of contractual principal payments under IEC's borrowings for the next five years taking into consideration the Fifth Amended Credit Agreement follows:
(1) Includes Revolver balance of $9.7 million at April 1, 2016 |
FAIR VALUE OF FINANCIAL INSTRUMENTS FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value Carrying Value of Variable Rate Debt | A summary of the fair value and carrying value of fixed rate debt at period end follows:
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WARRANTY RESERVES (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranties Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Product Warranty Liability | A summary of additions to and charges against IEC’s warranty reserves during the period follows:
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STOCK-BASED COMPENSATION (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | Assumptions used in the Black-Scholes model and the estimated value of options granted during the six months ended March 27, 2015 are included in the table below.
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Changes in Number of Options Outstanding with Other Related Data | A summary of stock option activity, together with other related data, follows:
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Schedule of Nonvested Stock Options Activity | Changes in the number of non-vested options outstanding, together with other related data, follows:
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Changes in Number of Restricted Non-vested Stock Outstanding with Other Related Data | A summary of restricted stock activity, together with related data, follows:
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INCOME TAXES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) | Provision for income taxes during the three and six months ended April 1, 2016 and March 27, 2015 follows:
|
MARKET SECTORS AND MAJOR CUSTOMERS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risks and Uncertainties [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedules of Concentration of Risk, by Risk Factor | A summary of sales, according to the market sector within which IEC's customers operate, follows:
|
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) |
6 Months Ended |
---|---|
Apr. 01, 2016 | |
Land improvements [Member] | |
Estimated Useful Lives | 10 years |
Buildings and improvements [Member] | Minimum [Member] | |
Estimated Useful Lives | 5 years |
Buildings and improvements [Member] | Maximum [Member] | |
Estimated Useful Lives | 40 years |
Machinery and equipment [Member] | Minimum [Member] | |
Estimated Useful Lives | 3 years |
Machinery and equipment [Member] | Maximum [Member] | |
Estimated Useful Lives | 5 years |
Furniture and fixtures [Member] | Minimum [Member] | |
Estimated Useful Lives | 3 years |
Furniture and fixtures [Member] | Maximum [Member] | |
Estimated Useful Lives | 7 years |
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Apr. 01, 2016 |
Mar. 27, 2015 |
Apr. 01, 2016 |
Mar. 27, 2015 |
|
Accounting Policies [Abstract] | ||||
Weighted average shares outstanding | 10,205,031 | 10,075,719 | 10,210,539 | 9,972,692 |
Incremental shares | 0 | 0 | 0 | 0 |
Diluted shares | 10,205,031 | 10,075,719 | 10,210,539 | 9,972,692 |
Anti-dilutive shares excluded | 804,965 | 658,905 | 804,965 | 658,905 |
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($) |
6 Months Ended | 12 Months Ended |
---|---|---|
Apr. 01, 2016 |
Sep. 30, 2013 |
|
Asset impairment charges | $ 0 | |
Goodwill impairment | $ 0 | |
Material Management [Member] | ||
Maximum percentage of total revenue | 5.00% | 5.00% |
SCB DIVESTITURE AND DISCONTINUED OPERATIONS (Narrative) (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 09, 2015 |
Jun. 26, 2015 |
Mar. 27, 2015 |
Mar. 27, 2015 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Sale of SCB Assets | $ 2,500,000 | |||
Provision for/(benefit from) income taxes | $ 0 | $ 0 | ||
Southern California Braiding, Inc. [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Sale of SCB Assets | 2,500,000 | |||
Consideration | $ 2,405,000 | |||
Impairment Charges | $ 4,100,000 | |||
Provision for/(benefit from) income taxes | $ 20,000 |
SCB DIVESTITURE AND DISCONTINUED OPERATIONS SCB DIVESTITURE AND DISCONTINUED OPERATIONS (Assets Sold, Net) (Details) - Southern California Braiding, Inc. [Member] $ in Thousands |
Jul. 09, 2015
USD ($)
|
---|---|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Disposal Group, Including Discontinued Operation, Inventory, Current | $ 1,803 |
Disposal Group, Including Discontinued Operation, Other Assets, Current | 53 |
Disposal Group, Including Discontinued Operation, Property, Plant and Equipment, Current | 916 |
Disposal Group, Including Discontinued Operation, Intangible Assets, Current | 0 |
Disposal Group, Including Discontinued Operation, Other Liabilities | 142 |
Disposal Group, Including Discontinued Operation, Assets, Current | $ 2,630 |
SCB DIVESTITURE AND DISCONTINUED OPERATIONS SCB DIVESTITURE AND DISCONTINUED OPERATIONS (Net Sales and Loss Before Taxes) (Details) - Southern California Braiding, Inc. [Member] - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Mar. 27, 2015 |
Mar. 27, 2015 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Disposal Group, Including Discontinued Operation, Revenue | $ 1,257 | $ 3,420 |
Discontinued Operation, Income (Loss) from Discontinued Operation, before Income Tax | $ (789) | $ (1,338) |
ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Apr. 01, 2016 |
Mar. 27, 2015 |
|
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Allowance, beginning of period | $ 423 | $ 525 |
Provision for doubtful accounts | 270 | (114) |
Write-offs | (158) | (58) |
Allowance, end of period | $ 535 | $ 353 |
INVENTORIES (Details) - USD ($) $ in Thousands |
Apr. 01, 2016 |
Sep. 30, 2015 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 14,251 | $ 17,637 |
Work-in-process | 7,991 | 8,512 |
Finished goods | 3,668 | 1,341 |
Total inventories | 25,910 | 27,490 |
Reserve for excess/obsolete inventory | (2,016) | (1,737) |
Inventories, net | $ 23,894 | $ 25,753 |
FIXED ASSETS (Details) - USD ($) $ in Thousands |
Apr. 01, 2016 |
Sep. 30, 2015 |
---|---|---|
Property, Plant and Equipment [Abstract] | ||
Land and improvements | $ 1,601 | $ 1,601 |
Buildings and improvements | 14,199 | 14,161 |
Machinery and equipment | 26,324 | 26,061 |
Furniture and fixtures | 7,328 | 7,291 |
Construction in progress | 1,958 | 1,028 |
Total fixed assets, at cost | 51,410 | 50,142 |
Accumulated depreciation | (36,345) | (34,699) |
Fixed assets, net | $ 15,065 | $ 15,443 |
FIXED ASSETS (Details 1) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Apr. 01, 2016 |
Dec. 28, 2012 |
Apr. 01, 2016 |
Mar. 27, 2015 |
|
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 807 | $ 938 | $ 1,647 | $ 1,984 |
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands |
Apr. 01, 2016 |
Sep. 30, 2015 |
---|---|---|
Accumulated amortization | $ (245) | $ (226) |
Intangible assets, net | 115 | 134 |
Property tax abatement [Member] | Albuquerque [Member] | ||
Total intangibles | $ 360 | $ 360 |
INTANGIBLE ASSETS (Details 1) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Apr. 01, 2016 |
Mar. 27, 2015 |
Apr. 01, 2016 |
Mar. 27, 2015 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Intangible amortization expense | $ 10 | $ 64 | $ 20 | $ 127 |
INTANGIBLE ASSETS (Details 2) $ in Thousands |
Apr. 01, 2016
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2017 | $ 39 |
2018 | 39 |
2019 | 37 |
2020 and thereafter | $ 0 |
INTANGIBLE ASSETS (Details Textual) - Property tax abatement [Member] - Albuquerque [Member] - USD ($) |
3 Months Ended | |
---|---|---|
Apr. 01, 2016 |
Sep. 30, 2015 |
|
Amount allocated to intangibles | $ 360,000 | $ 360,000 |
Estimated useful life | 9 years 2 months 12 days | |
Impairment of intangible assets | $ 0 |
GOODWILL (Details Textual) - USD ($) |
6 Months Ended | 12 Months Ended |
---|---|---|
Apr. 01, 2016 |
Sep. 30, 2010 |
|
Goodwill impairment | $ 0 | |
Celmet [Member] | ||
Goodwill from acquisitions | $ 100,000 |
CREDIT FACILITIES (Details 1) - Fifth Amendment [Member] |
6 Months Ended |
---|---|
Apr. 01, 2016
USD ($)
| |
Maximum Inventory: | |
Maximum capital expenditures | $ 3,500,000 |
As of January 1, 2016 [Member] | |
Maximum Inventory: | |
Inventory | 30,000,000 |
As of April 1, 2016 [Member] | |
Maximum Inventory: | |
Inventory | 29,000,000 |
As of July 1, 2016 [Member] | |
Maximum Inventory: | |
Inventory | 28,000,000 |
As of September 30, 2016 [Member] | |
Maximum Inventory: | |
Inventory | 27,000,000 |
As of December 30, 2016 [Member] | |
Maximum Inventory: | |
Inventory | 26,000,000 |
As of the end of the Fiscal Quarter ending March 31, 2017 [Member] | |
Maximum Inventory: | |
Inventory | 25,000,000 |
As of the end of each Fiscal Quarter thereafter [Member] | |
Maximum Inventory: | |
Inventory | $ 25,000,000 |
First Quarter Ending September 30, 2015 [Member] | |
Debt to EBITDARS Ratio: | |
Debt to EBITDAS ratio | 5,750.00 |
Minimum Quarterly EBITDAS : | |
Net earnings before interest,taxes, depreciation and amortization | $ 1,500,000 |
Fixed Charge Coverage Ratio: | |
Fixed charge coverage ratio | 450.00 |
First Quarter Ending January 1, 2016 [Member] | |
Debt to EBITDARS Ratio: | |
Debt to EBITDAS ratio | 5,100.00 |
Minimum Quarterly EBITDAS : | |
Net earnings before interest,taxes, depreciation and amortization | $ 1,785,000 |
Fixed Charge Coverage Ratio: | |
Fixed charge coverage ratio | 750.00 |
Fiscal Quarter Ending April 1, 2016 [Member] | |
Debt to EBITDARS Ratio: | |
Debt to EBITDAS ratio | 3,950.00 |
Minimum Quarterly EBITDAS : | |
Net earnings before interest,taxes, depreciation and amortization | $ 1,900,000 |
Fixed Charge Coverage Ratio: | |
Fixed charge coverage ratio | 1,000.00 |
Fiscal Quarter Ending July 1, 2016 [Member] | |
Debt to EBITDARS Ratio: | |
Debt to EBITDAS ratio | 3,650.00 |
Minimum Quarterly EBITDAS : | |
Net earnings before interest,taxes, depreciation and amortization | $ 1,800,000 |
Fixed Charge Coverage Ratio: | |
Fixed charge coverage ratio | 1,100.00 |
Fiscal Quarter Ending September 30, 2016 [Member] | |
Debt to EBITDARS Ratio: | |
Debt to EBITDAS ratio | 3,100.00 |
Minimum Quarterly EBITDAS : | |
Net earnings before interest,taxes, depreciation and amortization | $ 2,190,000 |
Fixed Charge Coverage Ratio: | |
Fixed charge coverage ratio | 1,250.00 |
Thereafter September 30, 2016 [Member] | |
Debt to EBITDARS Ratio: | |
Debt to EBITDAS ratio | 3,100.00 |
Minimum Quarterly EBITDAS : | |
Net earnings before interest,taxes, depreciation and amortization | $ 2,190,000 |
CREDIT FACILITIES (Details 2) - USD ($) $ in Thousands |
Apr. 01, 2016 |
Sep. 30, 2015 |
||
---|---|---|---|---|
Debt Disclosure [Abstract] | ||||
2016 | $ 2,679 | |||
2017 | [1] | 4,719 | ||
2018 | 13,044 | |||
2019 | 2,315 | |||
2020 and thereafter | 4,083 | |||
Total debt | $ 26,840 | $ 31,231 | ||
|
CREDIT FACILITIES (Details Textual) |
1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 14, 2015 |
Nov. 30, 2013
USD ($)
|
Jan. 31, 2013
USD ($)
|
Dec. 31, 2009
USD ($)
|
Apr. 01, 2016
USD ($)
event
|
Sep. 30, 2015
USD ($)
|
Jun. 26, 2015
USD ($)
|
Mar. 27, 2015
USD ($)
|
Dec. 26, 2014
USD ($)
|
Apr. 01, 2016
USD ($)
installment
event
|
Mar. 27, 2015
USD ($)
|
Nov. 08, 2013
USD ($)
|
Jan. 18, 2013
USD ($)
|
Dec. 16, 2009
USD ($)
|
||||
Maximum borrowing capacity | $ 20,000,000 | $ 20,000,000 | |||||||||||||||
Maturity date | Dec. 31, 2019 | ||||||||||||||||
Average borrowing capacity | $ 9,900,000 | $ 9,900,000 | |||||||||||||||
Unused capacity, commitment fee percentage | 0.50% | ||||||||||||||||
Interest rate, stated percentage | [1] | 2.00% | 0.00% | 2.00% | |||||||||||||
Basis spread on variable rate | 1.32% | ||||||||||||||||
Notional amount | $ 14,000,000 | ||||||||||||||||
Long-term debt, carrying value | $ 26,840,000 | $ 31,231,000 | $ 26,840,000 | ||||||||||||||
Amendment 2014 [Member] | |||||||||||||||||
Net earnings before interest,taxes, depreciation and amortization | $ 1,250,000 | $ 1,500,000 | |||||||||||||||
Sixth Amendment [Member] | |||||||||||||||||
Maximum Legal And Accounting Fees Associated With The Restatement | 200,000 | $ 200,000 | $ 2,652,659 | $ 235,112 | |||||||||||||
Fifth Amendment [Member] | |||||||||||||||||
Number of events of default | event | 2 | 0 | |||||||||||||||
Penalty or fee threshold | $ 400,000 | ||||||||||||||||
Legal fee threshold | 250,000 | ||||||||||||||||
Celmet Term Loan [Member] | Credit Agreement 2013 [Member] | |||||||||||||||||
Debt instrument, periodic payment, principal | $ 11,000 | ||||||||||||||||
Term Loan A [Member] | Credit Agreement 2013 [Member] | |||||||||||||||||
Long-term line of credit | 10,000,000 | ||||||||||||||||
Repayment monthly installments | 108 equal monthly installments | ||||||||||||||||
Line of credit facility, periodic payment, principal | $ 93,000 | ||||||||||||||||
Term Loan B [Member] | |||||||||||||||||
Basis spread on variable rate | 3.25% | 3.25% | |||||||||||||||
Interest rate, effective percentage | 4.57% | 4.57% | |||||||||||||||
Term Loan B [Member] | Credit Agreement 2013 [Member] | |||||||||||||||||
Long-term line of credit | $ 14,000,000 | ||||||||||||||||
Repayment monthly installments | 120 equal monthly installments | ||||||||||||||||
Line of credit facility, periodic payment, principal | $ 117,000 | ||||||||||||||||
Albuquerque Mortgage Loan [Member] | Credit Agreement 2013 [Member] | |||||||||||||||||
Repayment monthly installments | 59 equal monthly installments | monthly installments | |||||||||||||||
Albuquerque [Member] | |||||||||||||||||
Liabilities assumed | 100,000 | $ 100,000 | |||||||||||||||
Albuquerque Mortgage Loan [Member] | Credit Agreement 2013 [Member] | |||||||||||||||||
Long-term line of credit | $ 4,000,000 | ||||||||||||||||
Debt instrument, periodic payment, principal | $ 22,000 | ||||||||||||||||
Balloon payment to be paid | $ 1,800,000 | ||||||||||||||||
Revolving Credit Facility [Member] | |||||||||||||||||
Maximum borrowing capacity | 20,000,000.0 | $ 20,000,000.0 | |||||||||||||||
Maturity date | Jan. 18, 2018 | ||||||||||||||||
Current borrowing capacity | $ 17,800,000.0 | $ 20,000,000 | $ 17,800,000.0 | ||||||||||||||
Interest rate, stated percentage | [1] | 4.69% | 4.50% | 4.69% | |||||||||||||
Long-term debt, carrying value | $ 9,688,000 | $ 12,415,000 | $ 9,688,000 | ||||||||||||||
Maximum borrowing capacity as percentage of eligible receivables | 85.00% | 85.00% | |||||||||||||||
Maximum borrowing capacity as percentage of eligible inventory | 35.00% | 35.00% | |||||||||||||||
Maximum borrowing capacity based on eligible inventories | $ 3,750,000.00 | $ 3,750,000.00 | |||||||||||||||
Maximum borrowing capacity based on eligible inventories, upper limit | 4,750,000.00 | 4,750,000.00 | |||||||||||||||
Revolving Credit Facility [Member] | Credit Agreement 2013 [Member] | |||||||||||||||||
Average borrowing capacity | $ 20,000,000 | 20,000,000 | |||||||||||||||
Commitment fee amount | $ 23,800 | $ 30,600 | |||||||||||||||
Revolving Credit Facility [Member] | Sixth Amendment [Member] | |||||||||||||||||
Maximum borrowing capacity as percentage of eligible receivables | 85.00% | 85.00% | |||||||||||||||
Maximum borrowing capacity as percentage of eligible inventory | 70.00% | 70.00% | |||||||||||||||
Maximum borrowing capacity based on eligible inventories, upper limit | $ 4,750,000.00 | $ 4,750,000.00 | |||||||||||||||
Revolving Credit Facility [Member] | Minimum [Member] | |||||||||||||||||
Unused capacity, commitment fee percentage | 0.25% | ||||||||||||||||
Revolving Credit Facility [Member] | Maximum [Member] | |||||||||||||||||
Unused capacity, commitment fee percentage | 0.50% | ||||||||||||||||
Celmet Term Loan [Member] | Third Amendment [Member] | |||||||||||||||||
Face amount | $ 1,300,000 | ||||||||||||||||
Wayne County IDA Loan to Grant Agreement [Member] | |||||||||||||||||
Debt instrument, periodic payment, principal | $ 917 | ||||||||||||||||
Frequency of periodic payment | installment | 36 | ||||||||||||||||
Wayne County IDA Loan to Grant Agreement [Member] | |||||||||||||||||
Long-term debt, carrying value | $ 32,000 | $ 0 | $ 32,000 | ||||||||||||||
London Interbank Offered Rate (LIBOR) [Member] | Term Loan B [Member] | |||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 3.25% | ||||||||||||||||
London Interbank Offered Rate (LIBOR) [Member] | Term Loan B [Member] | Sixth Amendment [Member] | |||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 3.25% | ||||||||||||||||
London Interbank Offered Rate (LIBOR) [Member] | Term Loan B [Member] | Fifth Amendment [Member] | |||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 3.25% | ||||||||||||||||
London Interbank Offered Rate (LIBOR) [Member] | Albuquerque Mortgage Loan [Member] | |||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 4.50% | ||||||||||||||||
London Interbank Offered Rate (LIBOR) [Member] | Albuquerque Mortgage Loan [Member] | Sixth Amendment [Member] | |||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 4.50% | ||||||||||||||||
London Interbank Offered Rate (LIBOR) [Member] | Albuquerque Mortgage Loan [Member] | Fifth Amendment [Member] | |||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 4.50% | ||||||||||||||||
London Interbank Offered Rate (LIBOR) [Member] | Revolving Credit Facility [Member] | |||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 4.25% | ||||||||||||||||
London Interbank Offered Rate (LIBOR) [Member] | Revolving Credit Facility [Member] | Sixth Amendment [Member] | |||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 4.25% | ||||||||||||||||
London Interbank Offered Rate (LIBOR) [Member] | Revolving Credit Facility [Member] | Fifth Amendment [Member] | |||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 4.25% | ||||||||||||||||
|
DERIVATIVE FINANCIAL INSTRUMENTS (Details Textual) - USD ($) $ in Millions |
Apr. 01, 2016 |
Jan. 01, 2016 |
Sep. 30, 2015 |
Dec. 13, 2013 |
Jan. 18, 2013 |
---|---|---|---|---|---|
Notional amount | $ 14.0 | ||||
Fixed interest rate | 1.32% | ||||
Interest Rate Swap [Member] | |||||
Fair value of interest rate swap asset | $ 0.1 | $ 0.0 | |||
Term Loan B [Member] | |||||
Fixed interest rate | 3.25% | ||||
Applicable margin rate | 3.25% | 3.25% | 4.57% |
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details Textual) - USD ($) $ in Thousands |
Apr. 01, 2016 |
Sep. 30, 2015 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, carrying value | $ 26,840 | $ 31,231 |
Term Loan A [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | 3,972 | 4,412 |
Long-term debt, carrying value | 4,156 | 4,804 |
Celmet Term Loan [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | 911 | 954 |
Long-term debt, carrying value | 986 | 1,062 |
Interest Rate Swap [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap asset | $ 100 | $ 0 |
WARRANTY RESERVES (Details) - Warranty Reserves [Member] - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Apr. 01, 2016 |
Mar. 27, 2015 |
|
Reserve, beginning of period | $ 399 | $ 251 |
Provision | 123 | 204 |
Warranty costs | (183) | (161) |
Reserve, end of period | $ 339 | $ 294 |
DEFERRED GRANTS (Details Textual) - USD ($) |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Apr. 01, 2016 |
Mar. 27, 2015 |
Apr. 01, 2016 |
Mar. 27, 2015 |
Sep. 30, 2015 |
Sep. 30, 2014 |
|
Grant proceeds | $ 0 | $ 0 | $ 0 | $ 900,000 | ||
Portion of grant to be presented as notes payable due to employment targets not being achieved | 26,840,000 | 26,840,000 | 31,231,000 | |||
Grant amortization | 40,000 | $ 41,000 | 68,000 | $ 82,000 | ||
Local Government Agency One [Member] | ||||||
Grant proceeds | 100,000 | 100,000 | ||||
Local Government Agency Two [Member] | ||||||
Grant proceeds | 100,000 | 100,000 | ||||
Wayne County IDA Loan to Grant [Member] | ||||||
Portion of grant to be presented as notes payable due to employment targets not being achieved | $ 32,000 | $ 32,000 | $ 0 |
STOCK-BASED COMPENSATION (Details) - USD ($) |
6 Months Ended | |
---|---|---|
Apr. 01, 2016 |
Mar. 27, 2015 |
|
Assumptions for Black-Scholes: | ||
Risk-free interest rate | 1.30% | |
Expected term in years | 4 years 6 months | |
Volatility | 40.00% | |
Expected annual dividends | $ 0 | |
Value of options granted: | ||
Number of options granted (in shares) | 0 | 447,145 |
Weighted average fair value per share (in dollars per share) | $ 0.00 | $ 1.48 |
Fair value of options granted (000's) | $ 662,000 |
STOCK-BASED COMPENSATION (Details 1) - USD ($) $ / shares in Units, $ in Thousands |
6 Months Ended | |
---|---|---|
Apr. 01, 2016 |
Mar. 27, 2015 |
|
Number of Options [Roll Forward] | ||
Outstanding, beginning of period (in shares) | 717,645 | 234,000 |
Granted (in shares) | 0 | 447,145 |
Exercised (in shares) | 0 | (25,932) |
Shares withheld for payment of taxes upon exercise of stock option (in shares) | 0 | (16,068) |
Forfeited (in shares) | 0 | (8,300) |
Expired (in shares) | (15,500) | (7,400) |
Outstanding, end of period (in shares) | 702,145 | 623,445 |
Wgtd. Avg. Exercise Price [Roll Forward] | ||
Outstanding, beginning of period (in dollars per share) | $ 4.40 | $ 4.48 |
Granted (in dollars per share) | 0.00 | 4.18 |
Exercised (in dollars per share) | 0.00 | 1.87 |
Shares withheld for payment of taxes upon exercise of stock option (in dollars per share) | 0.00 | 1.88 |
Forfeited (in dollars per share) | 0.00 | 6.04 |
Expired (in dollars per share) | 5.99 | 6.38 |
Outstanding, end of period (in dollars per share) | $ 4.37 | $ 4.40 |
For options expected to vest | ||
Number expected to vest (in shares) | 558,596 | 467,670 |
Number expected to vest (in dollars per share) | $ 4.44 | $ 4.50 |
Weighted average remaining term, in years | 5 years 3 months 13 days | 3 years 2 months |
Intrinsic value (000s) | $ 239 | $ 37 |
For exercisable options | ||
Number exercisable (in shares) | 260,036 | 207,300 |
Number exercisable (in dollars per share) | $ 4.84 | $ 5.00 |
Weighted average remaining term, in years | 4 years 5 months 3 days | 1 year 6 months |
Intrinsic value (000s) | $ 77 | $ 37 |
For non-exercisable options | ||
Expense not yet recognized (000s) | $ 597 | $ 600 |
Weighted average years to be recognized | 3 years 19 days | 3 years 11 months 24 days |
For options exercised, Intrinsic value (000s) | $ 0 | $ 119 |
STOCK-BASED COMPENSATION (Details 2) - $ / shares |
6 Months Ended | |
---|---|---|
Apr. 01, 2016 |
Mar. 27, 2015 |
|
Number of Options | ||
Non-vested, beginning of period (in shares) | 546,145 | 112,350 |
Granted (in shares) | 0 | 447,145 |
Vested (in shares) | (104,036) | (135,050) |
Forfeited (in shares) | 0 | (8,300) |
Non-vested, end of period (in shares) | 442,109 | 416,145 |
Wgtd. Avg. Grant Date Fair Value | ||
Non-vested, beginning of period (in dollars per share) | $ 1.41 | $ 2.15 |
Granted (in dollars per share) | 0.00 | 1.48 |
Vested (in dollars per share) | 1.45 | 2.08 |
Forfeited (in dollars per share) | 0.00 | 2.35 |
Non-vested, end of period (in dollars per share) | $ 1.40 | $ 1.45 |
STOCK-BASED COMPENSATION (Details 3) - USD ($) $ / shares in Units, $ in Thousands |
6 Months Ended | |
---|---|---|
Apr. 01, 2016 |
Mar. 27, 2015 |
|
Number of Non-vested Shares [Roll Forward] | ||
Vested (in shares) | (11,700) | |
Shares withheld for payment of taxes upon vesting of restricted stock (in shares) | 0 | (16,068) |
Wgtd. Avg. Grant Date Fair Value [Roll Forward] | ||
Granted (in dollars per share) | $ 4.03 | |
Shares withheld for payment of taxes upon vesting of restricted stock (in dollars per share) | $ 0.00 | $ 1.88 |
Restricted Stock [Member] | ||
Number of Non-vested Shares [Roll Forward] | ||
Outstanding, beginning of period (in shares) | 54,960 | 322,873 |
Granted (in shares) | 59,560 | 163,655 |
Vested (in shares) | (316,539) | |
Shares withheld for payment of taxes upon vesting of restricted stock (in shares) | 0 | (133,329) |
Forfeited (in shares) | 0 | (1,200) |
Outstanding, end of period (in shares) | 102,820 | 35,460 |
Wgtd. Avg. Grant Date Fair Value [Roll Forward] | ||
Outstanding, beginning of period (in dollars per share) | $ 4.23 | $ 4.97 |
Granted (in dollars per share) | 5.06 | |
Vested (in dollars per share) | 4.23 | 5.08 |
Shares withheld for payment of taxes upon vesting of restricted stock (in dollars per share) | 0.00 | 4.53 |
Forfeited (in dollars per share) | 0.00 | 3.91 |
Outstanding, end of period (in dollars per share) | $ 4.11 | $ 4.23 |
For non-vested shares | ||
Expense not yet recognized (000s) | $ 357 | $ 163 |
Weighted average remaining years for vesting | 2 years 5 months 20 days | 2 years 11 days |
For shares vested | ||
Aggregate fair value on vesting dates (000s) | $ 43 | $ 2,062 |
STOCK-BASED COMPENSATION (Details Textual) |
6 Months Ended | ||
---|---|---|---|
Feb. 02, 2015
USD ($)
Director
shares
|
Apr. 01, 2016
USD ($)
shares
|
Mar. 27, 2015
USD ($)
shares
|
|
Stock-based compensation | $ 162,000 | $ 1,954,000 | |
Shares withheld for payment of taxes upon vesting of restricted stock | $ (60,000) | $ (604,000) | |
Number of directors elected | Director | 7 | ||
Shares vested (in shares) | shares | 104,036 | 135,050 | |
Compensation expense | $ 162,000 | $ 1,954,000 | |
Director [Member] | |||
Award vesting period | 3 years | ||
Maximum [Member] | |||
Award vesting period | 4 years | ||
Minimum [Member] | |||
Award vesting period | 5 years | ||
Employee Stock Option [Member] | |||
Award vesting period | 4 years | ||
Additional Paid-in Capital [Member] | |||
Stock-based compensation | $ 162,000 | 1,954,000 | |
Shares withheld for payment of taxes upon vesting of restricted stock | 0 | (603,000) | |
Treasury Stock [Member] | |||
Stock-based compensation | 0 | 0 | |
Shares withheld for payment of taxes upon vesting of restricted stock | $ (60,000) | 0 | |
2010 Plan [Member] | |||
Maximum number of common shares that may be issued | shares | 2,000,000 | ||
Common shares, issuance term | 10 years | ||
Shares available for issuance (in shares) | shares | 801,829 | ||
2010 Plan [Member] | Employee Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 7 years | ||
2010 and 2001 Plans [Member] | |||
Stock-based compensation expense | $ 1,800,000 | ||
2010 and 2001 Plans [Member] | Restricted Stock [Member] | |||
Shares vested (in shares) | shares | 390,882 | ||
2010 and 2001 Plans [Member] | Employee Stock Option [Member] | |||
Shares vested (in shares) | shares | 119,500 | ||
ESPP [Member] | |||
Employee stock purchase discount (percent) | 10.00% | ||
Employee contributions | $ 8,100 | 8,000 | |
Compensation expense | $ 1,000 | $ 1,000 |
RETIREMENT PLAN (Details Textual) number in Thousands, $ in Thousands |
6 Months Ended |
---|---|
Apr. 01, 2016
USD ($)
| |
Compensation and Retirement Disclosure [Abstract] | |
Contributions by employer, percentage | 0.00% |
Defined Benefit Plan, Contributions by Employer | $ 132 |
INCOME TAXES (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Apr. 01, 2016 |
Mar. 27, 2015 |
Apr. 01, 2016 |
Mar. 27, 2015 |
|
Income Tax Disclosure [Abstract] | ||||
Benefit from income taxes | $ 0 | $ 0 | $ 0 | $ 0 |
INCOME TAXES (Details Textual) - USD ($) $ in Millions |
Apr. 01, 2016 |
Sep. 30, 2015 |
Sep. 30, 2013 |
---|---|---|---|
Business Income Base Rate, Tax, Percentage | 0.00% | ||
Investment Tax Credit Carryforward [Member] | |||
Operating loss carryforwards | $ 1.2 | ||
Domestic Tax Authority [Member] | |||
Operating loss carryforwards | $ 35.8 | ||
State and Local Jurisdiction [Member] | |||
Operating loss carryforwards | $ 27.9 |
MARKET SECTORS AND MAJOR CUSTOMERS (Details) - Sales Revenue, Segment [Member] |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Apr. 01, 2016 |
Mar. 27, 2015 |
Apr. 01, 2016 |
Mar. 27, 2015 |
|
% of Sales by Sector | 100.00% | 100.00% | 100.00% | 100.00% |
Aerospace & Defense [Member] | ||||
% of Sales by Sector | 34.00% | 38.00% | 37.00% | 39.00% |
Medical [Member] | ||||
% of Sales by Sector | 50.00% | 31.00% | 46.00% | 31.00% |
Industrial [Member] | ||||
% of Sales by Sector | 14.00% | 29.00% | 15.00% | 27.00% |
Communications & Other [Member] | ||||
% of Sales by Sector | 2.00% | 2.00% | 2.00% | 3.00% |
MARKET SECTORS AND MAJOR CUSTOMERS (Details Textual) - customer |
6 Months Ended | |
---|---|---|
Apr. 01, 2016 |
Mar. 27, 2015 |
|
Concentration risk, number of customers | 2 | 4 |
Customer Concentration Risk [Member] | Sales [Member] | Industrial [Member] | ||
Concentration risk, number of customers | 1 | |
Concentration risk, percentage | 18.00% | |
Customer Concentration Risk [Member] | Sales [Member] | Aerospace & Defense [Member] | ||
Concentration risk, number of customers | 1 | |
Concentration risk, percentage | 11.00% | |
Customer Concentration Risk [Member] | Sales [Member] | Medical [Member] | ||
Concentration risk, number of customers | 2 | |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | ||
Concentration risk, number of customers | 2 | 2 |
Concentration risk, percentage | 29.00% | 21.00% |
Customer Number One [Member] | Customer Concentration Risk [Member] | Sales [Member] | Medical [Member] | ||
Concentration risk, percentage | 18.00% | 15.00% |
Customer Number Two [Member] | Customer Concentration Risk [Member] | Sales [Member] | Medical [Member] | ||
Concentration risk, percentage | 17.00% | 10.00% |
LITIGATION (Details) |
1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|---|
Mar. 16, 2020
USD ($)
|
Mar. 16, 2019
USD ($)
|
Mar. 16, 2018
USD ($)
|
Mar. 16, 2017
USD ($)
|
May. 16, 2016
USD ($)
|
Jun. 30, 2015
USD ($)
|
Jan. 01, 2016
USD ($)
employee
|
Apr. 01, 2016
USD ($)
employee
|
Mar. 27, 2015
USD ($)
|
|
Loss Contingencies [Line Items] | |||||||||
Number of former employees receiving Wells Notes related to SEC investigation | employee | 2 | 2 | |||||||
Cash portion of incentive compensation and stock proceeds returned | $ 42,000 | ||||||||
Shares withheld for payment of taxes upon vesting of restricted stock | (60,000) | $ (604,000) | |||||||
Treasury Stock [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Shares withheld for payment of taxes upon vesting of restricted stock | $ (60,000) | $ 0 | |||||||
W. Barry Gilbert Arbitration [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Value of damages sought | $ 500,000 | ||||||||
W. Barry Gilbert Arbitration [Member] | Scenario, Forecast [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Value of damages sought | $ 75,000 | $ 75,000 | $ 100,000 | $ 100,000 | $ 200,000 | ||||
Pending Litigation [Member] | SEC Investigation [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Penalty payment | $ 200,000 |
COMMITMENTS AND CONTINGENCIES (Details Textual) $ in Thousands |
1 Months Ended | 3 Months Ended | 6 Months Ended |
---|---|---|---|
Aug. 31, 2011
USD ($)
|
Jan. 01, 2016
USD ($)
employee
|
Apr. 01, 2016
employee
|
|
Number of former employees receiving Wells Notes related to SEC investigation | employee | 2 | 2 | |
Insurance recoveries | $ 9,000 | ||
Long-term purchase commitment, period | 5 years | ||
Maximum [Member] | |||
Early termination fee | $ 365 | ||
Minimum [Member] | |||
Early termination fee | $ 0 |
Label | Element | Value |
---|---|---|
Interest Paid | us-gaap_InterestPaid | $ 803,000 |
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