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 | |
Emerging growth company ¨ |
March 31, 2017 | September 30, 2016 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash | $ | 509 | $ | 845 | |||
Accounts receivable, net of allowance | 14,713 | 17,140 | |||||
Inventories, net | 16,477 | 15,384 | |||||
Assets held for sale | — | 4,611 | |||||
Other current assets | 997 | 1,214 | |||||
Total current assets | 32,696 | 39,194 | |||||
Property, plant & equipment, net | 17,010 | 10,994 | |||||
Intangible assets, net | 75 | 95 | |||||
Goodwill | 101 | 101 | |||||
Other long term assets | 8 | 13 | |||||
Total assets | $ | 49,890 | $ | 50,397 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Current portion of long-term debt | $ | 1,530 | $ | 2,908 | |||
Current portion of capital lease | 206 | — | |||||
Accounts payable | 11,784 | 10,864 | |||||
Accrued payroll and related expenses | 1,207 | 3,365 | |||||
Other accrued expenses | 496 | 529 | |||||
Customer deposits | 2,161 | 1,756 | |||||
Total current liabilities | $ | 17,384 | $ | 19,422 | |||
Long-term debt | 12,950 | 16,732 | |||||
Long-term capital lease | 5,471 | — | |||||
Other long-term liabilities | 1,425 | 379 | |||||
Total liabilities | 37,230 | 36,533 | |||||
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: 11,372,111 and 11,330,151 shares, respectively | |||||||
Outstanding: 10,316,623 and 10,274,663 shares, respectively | 114 | 113 | |||||
Additional paid-in capital | 46,557 | 46,294 | |||||
Retained earnings/(accumulated deficit) | (32,422 | ) | (30,954 | ) | |||
Treasury stock, at cost: 1,055,488 shares | (1,589 | ) | (1,589 | ) | |||
Total stockholders’ equity | 12,660 | 13,864 | |||||
Total liabilities and stockholders’ equity | $ | 49,890 | $ | 50,397 |
Three Months Ended | Six Months Ended | ||||||||||||||
March 31, 2017 | April 1, 2016 | March 31, 2017 | April 1, 2016 | ||||||||||||
Net sales | $ | 21,368 | $ | 33,148 | $ | 42,344 | $ | 66,081 | |||||||
Cost of sales | 19,089 | 27,412 | 38,269 | 54,528 | |||||||||||
Gross profit | 2,279 | 5,736 | 4,075 | 11,553 | |||||||||||
Selling and administrative expenses | 2,665 | 3,762 | 5,095 | 7,747 | |||||||||||
Operating profit/(loss) | (386 | ) | 1,974 | (1,020 | ) | 3,806 | |||||||||
Interest and financing expense | 229 | 513 | 448 | 802 | |||||||||||
Income/(loss) before income taxes | (615 | ) | 1,461 | (1,468 | ) | 3,004 | |||||||||
Provision for/(benefit from) income taxes | — | — | — | — | |||||||||||
Net income/(loss) | $ | (615 | ) | $ | 1,461 | $ | (1,468 | ) | $ | 3,004 | |||||
Net income/(loss) per common and common equivalent share: | |||||||||||||||
Basic | $ | (0.06 | ) | $ | 0.14 | $ | (0.14 | ) | $ | 0.29 | |||||
Diluted | (0.06 | ) | 0.14 | (0.14 | ) | 0.29 | |||||||||
Weighted average number of common and common equivalent shares outstanding: | |||||||||||||||
Basic | 10,173,388 | 10,205,031 | 10,168,339 | 10,210,539 | |||||||||||
Diluted | 10,173,388 | 10,205,031 | 10,168,339 | 10,210,539 |
Common Stock, par $0.01 | Additional Paid-In Capital | Retained Earnings (Deficit) | Treasury Stock, at cost | Total Stockholders’ Equity | |||||||||||||||
Balances, October 1, 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 | ) | — | — | — | |||||||||||||
Employee stock plan purchase | — | 7 | — | — | 7 | ||||||||||||||
Return of incentive compensation shares | — | — | — | (60 | ) | (60 | ) | ||||||||||||
Balances, April 1, 2016 | $ | 113 | $ | 46,013 | $ | (32,736 | ) | $ | (1,589 | ) | $ | 11,801 |
Common Stock, par $0.01 | Additional Paid-In Capital | Retained Earnings (Deficit) | Treasury Stock, at cost | Total Stockholders’ Equity | |||||||||||||||
Balances, October 1, 2016 | $ | 113 | $ | 46,294 | $ | (30,954 | ) | $ | (1,589 | ) | $ | 13,864 | |||||||
Net loss | — | — | (1,468 | ) | — | (1,468 | ) | ||||||||||||
Stock-based compensation | — | 252 | — | — | 252 | ||||||||||||||
Restricted (non-vested) stock grants, net of forfeitures | 1 | — | — | — | 1 | ||||||||||||||
Employee stock plan purchases | — | 13 | — | — | 13 | ||||||||||||||
Shares withheld for payment of taxes upon vesting of restricted stock | — | (2 | ) | — | — | (2 | ) | ||||||||||||
Balances, March 31, 2017 | $ | 114 | $ | 46,557 | $ | (32,422 | ) | $ | (1,589 | ) | $ | 12,660 |
Six Months Ended | ||||||||
March 31, 2017 | April 1, 2016 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net income/(loss) | $ | (1,468 | ) | $ | 3,004 | |||
Non-cash adjustments: | ||||||||
Stock-based compensation | 252 | 162 | ||||||
Incentive compensation shares returned | — | (60 | ) | |||||
Depreciation and amortization | 1,330 | 1,681 | ||||||
(Gain)/loss on sale of property, plant and equipment | — | 1 | ||||||
Reserve for doubtful accounts | (151 | ) | 270 | |||||
Provision for excess/obsolete inventory | (196 | ) | 279 | |||||
Amortization of deferred gain on sale leaseback | (30 | ) | — | |||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | 2,578 | 6,422 | ||||||
Inventory | (897 | ) | 1,580 | |||||
Other current assets | 217 | 185 | ||||||
Other long term assets | 5 | (11 | ) | |||||
Accounts payable | 920 | (6,497 | ) | |||||
Accrued expenses | (2,191 | ) | 629 | |||||
Customer deposits | 405 | (1,015 | ) | |||||
Other long term liabilities | (85 | ) | (14 | ) | ||||
Net cash flows from operating activities | 689 | 6,616 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Purchases of property, plant and equipment | (1,536 | ) | (1,270 | ) | ||||
Proceeds from sale-leaseback | 5,750 | — | ||||||
Net cash flows from investing activities | 4,214 | (1,270 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Advances from revolving line of credit | 21,448 | 30,271 | ||||||
Repayments of revolving line of credit | (19,868 | ) | (32,998 | ) | ||||
Repayments under other loan agreements | (6,758 | ) | (1,696 | ) | ||||
Repayments under capital lease | (73 | ) | — | |||||
Debt issuance costs | — | (211 | ) | |||||
Proceeds from employee stock plan purchases | 13 | 7 | ||||||
Shares withheld for payment of taxes upon vesting of restricted stock | (1 | ) | — | |||||
Net cash flows from financing activities | (5,239 | ) | (4,627 | ) | ||||
Net cash flows for the period | (336 | ) | 719 | |||||
Cash, beginning of period | 845 | 407 | ||||||
Cash, end of period | $ | 509 | $ | 1,126 | ||||
Supplemental cash flow information | ||||||||
Interest paid | $ | 429 | $ | 803 | ||||
Income taxes paid | 79 | — | ||||||
Borrowings under capital lease | 5,750 | — |
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 | March 31, 2017 | April 1, 2016 | March 31, 2017 | April 1, 2016 | ||||||||
Weighted average shares outstanding | 10,173,388 | 10,205,031 | 10,168,339 | 10,210,539 | ||||||||
Incremental shares | — | — | — | — | ||||||||
Diluted shares | 10,173,388 | 10,205,031 | 10,168,339 | 10,210,539 | ||||||||
Anti-dilutive shares excluded | 1,157,356 | 804,965 | 1,157,356 | 804,965 |
Six Months Ended | ||||||||
Allowance for Doubtful Accounts | March 31, 2017 | April 1, 2016 | ||||||
(in thousands) | ||||||||
Allowance, beginning of period | $ | 226 | $ | 423 | ||||
Provision for doubtful accounts | (151 | ) | 270 | |||||
Write-offs/recoveries | 15 | (158 | ) | |||||
Allowance, end of period | $ | 90 | $ | 535 |
Inventories | March 31, 2017 | September 30, 2016 | ||||||
(in thousands) | ||||||||
Raw materials | $ | 9,711 | $ | 9,138 | ||||
Work-in-process | 6,676 | 5,932 | ||||||
Finished goods | 1,519 | 1,939 | ||||||
Total inventories | 17,906 | 17,009 | ||||||
Reserve for excess/obsolete inventory | (1,429 | ) | (1,625 | ) | ||||
Inventories, net | $ | 16,477 | $ | 15,384 |
Property, Plant & Equipment | March 31, 2017 | September 30, 2016 | ||||||
(in thousands) | ||||||||
Land and improvements | $ | 788 | $ | 788 | ||||
Buildings and improvements | 8,910 | 8,910 | ||||||
Building under capital lease | 5,750 | — | ||||||
Machinery and equipment | 28,371 | 26,905 | ||||||
Furniture and fixtures | 7,503 | 7,489 | ||||||
Construction in progress | 3,135 | 3,079 | ||||||
Total property, plant and equipment, at cost | 54,457 | 47,171 | ||||||
Accumulated depreciation | (37,447 | ) | (36,177 | ) | ||||
Property, plant and equipment, net | $ | 17,010 | $ | 10,994 |
Three Months Ended | Six Months Ended | |||||||||||||||
March 31, 2017 | April 1, 2016 | March 31, 2017 | April 1, 2016 | |||||||||||||
(in thousands) | ||||||||||||||||
Depreciation expense | $ | 652 | $ | 807 | $ | 1,298 | $ | 1,647 |
Intangible Assets | March 31, 2017 | September 30, 2016 | ||||||
(in thousands) | ||||||||
Property tax abatement - Albuquerque | $ | 360 | $ | 360 | ||||
Accumulated amortization | (285 | ) | (265 | ) | ||||
Intangible assets, net | $ | 75 | $ | 95 |
Three Months Ended | Six Months Ended | |||||||||||||||
Amortization Expense | March 31, 2017 | April 1, 2016 | March 31, 2017 | April 1, 2016 | ||||||||||||
(in thousands) | ||||||||||||||||
Intangible amortization expense | $ | 10 | $ | 10 | $ | 20 | $ | 20 |
Future Amortization | Estimated future amortization | |||
(in thousands) | ||||
Twelve months ended March, | ||||
2018 | $ | 40 | ||
2019 | 35 | |||
2020 and thereafter | — |
March 31, 2017 | September 30, 2016 | |||||||||||||||||
Debt | Fixed/ Variable Rate | Maturity Date | Balance | Interest Rate | Balance | Interest Rate | ||||||||||||
($ in thousands) | ||||||||||||||||||
M&T credit facilities: | ||||||||||||||||||
Revolving Credit Facility | v | 1/18/2018 | $ | 5,541 | 5.23 | % | $ | 3,961 | 3.28 | % | ||||||||
Term Loan A(1) | f | 2/1/2020 | — | — | 3,693 | 3.98 | ||||||||||||
Term Loan B | v | 2/1/2023 | 8,283 | 4.03 | 8,983 | 3.03 | ||||||||||||
Albuquerque Mortgage Loan(1) | v | 2/1/2018 | — | — | 2,200 | 3.55 | ||||||||||||
Celmet Building Term Loan | f | 11/7/2018 | 867 | 4.72 | 932 | 4.72 | ||||||||||||
Other credit facilities: | ||||||||||||||||||
Albuquerque Industrial Revenue Bond(1) | f | 3/1/2019 | — | — | 100 | 5.63 | ||||||||||||
Total debt, gross | 14,691 | 19,869 | ||||||||||||||||
Unamortized debt issuance costs | (211 | ) | (229 | ) | ||||||||||||||
Total debt, net | 14,480 | 19,640 | ||||||||||||||||
Less: current portion | (1,530 | ) | (2,908 | ) | ||||||||||||||
Long-term debt | $ | 12,950 | $ | 16,732 |
a) | Revolving Credit Facility (“Revolver”): Up to $16.0 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 was being repaid in 108 equal monthly installments of $93 thousand. The proceeds of the sale-leaseback transaction described in Note 14—Capital Lease were used to pay down the loan, which was subsequently paid off in due course. |
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 was secured by real property in Albuquerque, NM, and principal was being repaid in equal monthly installments of $22 thousand. The loan was repaid in connection with the sale-leaseback transaction described in Note 14—Capital Lease. |
e) | Celmet Building Term Loan: $1.3 million was borrowed on November 8, 2013 pursuant to an amendment to the Fourth Amended and Restated Credit Facility Agreement dated as of January 18, 2013. 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: | ||||
12/31/2016 through and including 3/31/2017 | < 4.7 to 1.00 | |||
Minimum Quarterly EBITDAS: | ||||
Fiscal Quarter ending 3/31/2017 | $ | 240,000 | ||
Fixed Charge Coverage Ratio: | ||||
12/31/2016 through and including 3/31/2017 | > 0.3 to 1.00 | |||
Maximum Inventory: | ||||
As of 3/31/2017 | $ | 25.0 | m | |
Maximum Capital Expenditures: | Measured annually; maximum $4.5m |
Debt Repayment Schedule | Contractual Principal Payments | ||||
(in thousands) | |||||
Twelve months ended March | |||||
2018 | $ | 1,530 | |||
2019 | (1) | 2,137 | |||
2020 | 1,400 | ||||
2021 | 1,400 | ||||
2022 and thereafter (2) | 8,224 | ||||
$ | 14,691 |
March 31, 2017 | September 30, 2016 | |||||||||||||||
Fair Value | Carrying Value | Fair Value | Carrying Value | |||||||||||||
(in thousands) | ||||||||||||||||
Term Loan A | $ | — | $ | — | $ | 3,489 | $ | 3,693 | ||||||||
Celmet Building Term Loan | 811 | 867 | 864 | 932 |
Six Months Ended | ||||||||
Warranty Reserve | March 31, 2017 | April 1, 2016 | ||||||
(in thousands) | ||||||||
Reserve, beginning of period | $ | 180 | $ | 399 | ||||
Provision | 111 | 123 | ||||||
Warranty costs | (101 | ) | (183 | ) | ||||
Reserve, end of period | $ | 190 | $ | 339 |
Six Months Ended | |||||
Valuation of Options | March 31, 2017 | ||||
Assumptions for Black-Scholes: | |||||
Risk-free interest rate | 1.48 | % | |||
Expected term in years | 4.0 | ||||
Volatility | 40 | % | |||
Expected annual dividends | none | ||||
Value of options granted: | |||||
Number of options granted | 50,000 | ||||
Weighted average fair value per share | $ | 1.18 | |||
Fair value of options granted (000s) | $ | 59 |
Six Months Ended | ||||||||||||||
March 31, 2017 | April 1, 2016 | |||||||||||||
Stock Options | Number of Options | Wgtd. Avg. Exercise Price | Number of Options | Wgtd. Avg. Exercise Price | ||||||||||
Outstanding, beginning of period | 759,795 | $ | 4.43 | 717,645 | $ | 4.40 | ||||||||
Granted | 50,000 | 3.60 | — | — | ||||||||||
Exercised | — | — | — | — | ||||||||||
Forfeited | (30,500 | ) | 5.70 | (15,500 | ) | 5.99 | ||||||||
Expired | (19,750 | ) | 5.37 | — | — | |||||||||
Outstanding, end of period | 759,545 | $ | 4.30 | 702,145 | $ | 4.37 | ||||||||
For options expected to vest | ||||||||||||||
Number expected to vest | 738,410 | $ | 4.30 | 558,596 | $ | 4.44 | ||||||||
Weighted average remaining term, in years | 4.9 | 5.3 | ||||||||||||
Intrinsic value (000s) | $ | 11 | $ | 239 | ||||||||||
For exercisable options | ||||||||||||||
Number exercisable | 324,472 | $ | 4.46 | 260,036 | $ | 4.84 | ||||||||
Weighted average remaining term, in years | 4.3 | 4.4 | ||||||||||||
Intrinsic value (000s) | $ | — | $ | 77 | ||||||||||
For non-exercisable options | ||||||||||||||
Expense not yet recognized (000s) | $ | 526 | $ | 597 | ||||||||||
Weighted average years to be recognized | 2.3 | 3.1 | ||||||||||||
For options exercised | ||||||||||||||
Intrinsic value (000s) | $ | — | $ | — |
Six Months Ended | ||||||||||||||
March 31, 2017 | April 1, 2016 | |||||||||||||
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 | 489,109 | $ | 1.43 | 546,145 | $ | 1.41 | ||||||||
Granted | 50,000 | 1.18 | — | — | ||||||||||
Vested | (104,036 | ) | 1.45 | (104,036 | ) | 1.45 | ||||||||
Forfeited | — | — | — | — | ||||||||||
Non-vested, end of period | 435,073 | $ | 1.40 | 442,109 | $ | 1.40 |
Six Months Ended | ||||||||||||||
March 31, 2017 | April 1, 2016 | |||||||||||||
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 | 228,759 | $ | 4.40 | 54,960 | $ | 4.23 | ||||||||
Granted | 194,766 | 3.62 | 59,560 | 4.03 | ||||||||||
Vested | (25,131 | ) | 4.22 | (11,700 | ) | 4.23 | ||||||||
Shares withheld for payment of taxes upon vesting of restricted stock | (583 | ) | 3.60 | — | — | |||||||||
Forfeited | — | — | — | — | ||||||||||
Outstanding, end of period | 397,811 | $ | 4.03 | 102,820 | $ | 4.11 | ||||||||
For non-vested shares | ||||||||||||||
Expense not yet recognized (000s) | $ | 1,075 | $ | 357 | ||||||||||
Weighted average remaining years for vesting | 2.4 | 2.5 | ||||||||||||
For shares vested | ||||||||||||||
Aggregate fair value on vesting dates (000s) | $ | 94 | $ | 43 |
Three Months Ended | Six Months Ended | |||||||||||||||
Income Tax Provision/Benefit | March 31, 2017 | April 1, 2016 | March 31, 2017 | April 1, 2016 | ||||||||||||
(in thousands) | ||||||||||||||||
Provision for/(benefit from) income taxes | $ | — | $ | — | $ | — | $ | — |
Three Months Ended | Six Months Ended | |||||||
% of Sales by Sector | March 31, 2017 | April 1, 2016 | March 31, 2017 | April 1, 2016 | ||||
Aerospace & Defense | 44% | 34% | 47% | 37% | ||||
Medical | 32% | 50% | 30% | 46% | ||||
Industrial | 21% | 14% | 20% | 15% | ||||
Communications & Other | 3% | 2% | 3% | 2% | ||||
100% | 100% | 100% | 100% |
Capital Lease Payment Schedule | Contractual Principal Payments | |||
(in thousands) | ||||
Twelve months ended March | ||||
2018 | $ | 478 | ||
2019 | 487 | |||
2020 | 497 | |||
2021 | 549 | |||
2022 and thereafter | 6,101 | |||
Total capital lease payments | $ | 8,112 | ||
Less: amounts representing interest | (2,435 | ) | ||
Present value of minimum lease payment | $ | 5,677 | ||
• | Our engineering services include the design, development, and fabrication of customized stress testing platforms to simulate a product’s end application, such as thermal cycling and vibration, in order to ensure reliable performance and avoid catastrophic failure when the product is placed in service. |
• | Our vertical manufacturing model offers customers the ability to simplify their supply chain by utilizing a single supplier for their critical components including complex printed circuit board assembly (“PCBA”), precision metalworking, and interconnect solutions. This service model allows us to control the cost, lead time, and quality of these critical components which are then integrated into full system assemblies and minimizes our customers’ supply chain risk. |
• | We provide direct order fulfillment services for our customers by integrating with their configuration management process to obtain their customer orders, customize the product to the specific requirements, functionally test the product and provide verification data, and direct ship to their end customer in order to reduce time, cost, and complexity within our customers’ supply chain. |
• | We are the only EMS provider with an on-site laboratory that has been approved by the Defense Logistics Agency (“DLA”) for their Qualified Testing Supplier List (“QTSL”) program which deems the site suitable to conduct various QTSL and military testing standards including counterfeit component analysis. In addition, this advanced laboratory is utilized for complex design analysis and manufacturing process development to solve challenges and accelerate our customers’ time to market. |
• | Newark, New York - Located approximately one hour east of Rochester, New York, our Newark location is our corporate headquarters and is the largest manufacturing location providing complex circuit board manufacturing, interconnect solutions, and system-level assemblies along with an on-site material analysis laboratory for advanced manufacturing process development. |
• | Rochester, New York - Focuses on precision metalworking services including complex metal chassis and assemblies. |
• | Albuquerque, New Mexico - Specializes in the aerospace and defense markets with complex circuit board and system-level assemblies along with a state of the art analysis and testing laboratory which conducts counterfeit component analysis and complex design analysis. |
Three Months Ended | ||||||||
Income Statement Data | March 31, 2017 | April 1, 2016 | ||||||
(in thousands) | ||||||||
Net sales | $ | 21,368 | $ | 33,148 | ||||
Gross profit | 2,279 | 5,736 | ||||||
Selling and administrative expenses | 2,665 | 3,762 | ||||||
Interest and financing expense | 229 | 513 | ||||||
Income/(loss) before income taxes | (615 | ) | 1,461 | |||||
Provision for/(benefit from) income taxes | — | — | ||||||
Net income/(loss) | $ | (615 | ) | $ | 1,461 |
Three Months Ended | ||||
% of Sales by Sector | March 31, 2017 | April 1, 2016 | ||
Aerospace & Defense | 44% | 34% | ||
Medical | 32% | 50% | ||
Industrial | 21% | 14% | ||
Communications & Other | 3% | 2% | ||
100% | 100% |
Six Months Ended | ||||||||
Income Statement Data | March 31, 2017 | April 1, 2016 | ||||||
(in thousands) | ||||||||
Net sales | $ | 42,344 | $ | 66,081 | ||||
Gross profit | 4,075 | 11,553 | ||||||
Selling and administrative expenses | 5,095 | 7,747 | ||||||
Interest and financing expense | 448 | 802 | ||||||
Income/(loss) before income taxes | (1,468 | ) | 3,004 | |||||
Provision for/(benefit from) income taxes | — | — | ||||||
Net income/(loss) | $ | (1,468 | ) | $ | 3,004 |
Six Months Ended | ||||
% of Sales by Sector | March 31, 2017 | April 1, 2016 | ||
Aerospace & Defense | 47% | 37% | ||
Medical | 30% | 46% | ||
Industrial | 20% | 15% | ||
Communications & Other | 3% | 2% | ||
100% | 100% |
Six Months Ended | ||||||||
Cash Flow Data | March 31, 2017 | April 1, 2016 | ||||||
(in thousands) | ||||||||
Cash, beginning of period | $ | 845 | $ | 407 | ||||
Net cash flow from: | ||||||||
Operating activities | 689 | 6,616 | ||||||
Investing activities | 4,214 | (1,270 | ) | |||||
Financing activities | (5,239 | ) | (4,627 | ) | ||||
Net (decrease) increase in cash and cash equivalents | (336 | ) | 719 | |||||
Cash and cash equivalents at end of period | $ | 509 | $ | 1,126 |
Limit at | Calculated Amount At | |||||||
Debt Covenant | March 31, 2017 | September 30, 2016 | March 31, 2017 | September 30, 2016 | ||||
Quarterly EBITDAS (000s) | Minimum $240 | Minimum $1,080 | $375 | $1,269 | ||||
Debt to EBITDAS Ratio | Maximum 4.7 | Maximum 3.1x | 4.4x | 2.0x | ||||
Fixed Charge Coverage Ratio | Minimum 0.3x | Minimum 1.25x | 0.3x | 1.5x | ||||
Maximum Inventory | Maximum $25.0m | Maximum $27.0m | $17.9m | $17.0m | ||||
Maximum Capital Expenditures | Maximum $4.5m annually | Maximum $4.5m annually | Measured Annually | $3.3m |
Three Months Ended | ||||
March 31, 2017 | ||||
(in thousands) | ||||
Net income/(loss) | $ | (615 | ) | |
Provision for/(benefit from) income taxes | — | |||
Depreciation and amortization expense | 644 | |||
Interest expense | 229 | |||
Non-cash stock compensation | 117 | |||
EBITDAS | $ | 375 |
Three Months Ended | ||||
March 31, 2017 | ||||
(in thousands) | ||||
Net income/(loss) | $ | (615 | ) | |
Provision for/(benefit from) income taxes | — | |||
Depreciation and amortization expense | 644 | |||
Interest expense | 229 | |||
Non-cash stock compensation | 117 | |||
Unfinanced capital expenditures | (1,079 | ) | ||
Income taxes paid | — | |||
Adjusted EBITDA | $ | (704 | ) |
IEC Electronics Corp. | ||
(Registrant) | ||
May 10, 2017 | By: | /s/ Jeffrey T. Schlarbaum |
Jeffrey T. Schlarbaum | ||
President & Chief Executive Officer | ||
May 10, 2017 | By: | /s/ Michael T. Williams |
Michael T. Williams | ||
Chief Financial Officer |
Exhibit No. | Description | |
10.1 | Waiver of Annual Bonus for 2017 Fiscal Year dated as of March 23, 2017 between IEC Electronics Corp. and Jeffrey T. Schlarbaum | |
10.2 | Waiver of Annual Bonus for 2017 Fiscal Year dated as of March 23, 2017 between IEC Electronics Corp. and Michael T. Williams | |
10.3 | Waiver of Annual Bonus for 2017 Fiscal Year dated as of March 23, 2017 between IEC Electronics Corp. and Jens Hauvn | |
10.4 | Third Amendment to Fifth Amended and Restated Credit Facility Agreement dated as of May 5, 2017 | |
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. |
DATED: March 23, 2017 | JEFFREY T. SCHLARBAUM | |
/s/ Jeffrey T. Schlarbaum | ||
By: | Jeffrey T. Schlarbaum |
DATED: March 23, 2017 | IEC ELECTRONICS CORP. | |
/s/ Lynn Hartrick | ||
By: | Lynn Hartrick | |
Title: | Board of Director |
DATED: March 23, 2017 | MICHAEL T. WILLIAMS | |
/s/ Michael T. Williams | ||
By: | Michael T. Williams |
DATED: March 23, 2017 | IEC ELECTRONICS CORP. | |
/s/ Jennifer Brown | ||
By: | Jennifer Brown | |
Title: | VP of Human Resources & Corporate Secretary |
DATED: March 23, 2017 | JENS HAUVN | |
/s/ Jens Hauvn | ||
By: | Jens Hauvn |
DATED: March 23, 2017 | IEC ELECTRONICS CORP. | |
/s/ Jennifer Brown | ||
By: | Jennifer Brown | |
Title: | VP of Human Resources & Corporate Secretary |
Pricing Grid - Applicable Margin | |||
Fixed Charge Coverage | |||
Level | Ratio | Revolver | Term Loan B |
I | x ≤ 1.60:1.00 | 2.75% | 3.00% |
II | 1.60:1.00 < x ≤ 1.85:1.00 | 2.50% | 2.75% |
III | x > 1.85:1.00 | 2.25% | 2.50% |
Level | Fixed Charge Coverage Ratio | Unused Fee |
I | x ≤ 1.60:1.00 | 0.375% |
II | 1.60:1.00 < x ≤ 1.85:1.00 | 0.375% |
III | x > 1.85:1.00 | 0.250% |
By: | /s/ Michael D. Pick | |
Name: Michael D. Pick | ||
Title: Vice President |
By: | /s/ Michael T. Williams | |
Name: Michael T. Williams | ||
Title: Chief Financial Officer |
M&T Bank - Quarterly Covenant Calculations & Management Certification | |||||||||
Q1 FY20XX | Q2 FY20XX | Q3 FY20XX | Q4 FY20XX | ||||||
Covenant 12.2 | Compliant/ Violation | Compliant/ Violation | Compliant/ Violation | Compliant/ Violation | |||||
Minimum Quarterly EBITDAS | — | — | — | — | |||||
Covenant 12.3 | Compliant/ Violation | Compliant/ Violation | Compliant/ Violation | Compliant/ Violation | |||||
Fixed Charge Coverage Ratio | — | — | — | — | |||||
Covenant 12.5 | Compliant/ Violation | Compliant/ Violation | Compliant/ Violation | Compliant/ Violation | |||||
Maximum Capital Expenditures | — | — | — | — | |||||
Supporting Calculations | |||||||||
EBITDAS | |||||||||
Net Income | — | — | — | — | |||||
Tax expense | — | — | — | — | |||||
depreciation and amortization of intangible assets | — | — | — | — | |||||
Interest Expense | — | — | — | — | |||||
EBITDA | — | — | — | — | |||||
Non-cash stock option expense | — | — | — | — | |||||
EBITDAS | — | — | — | — | |||||
Rolling 4-Quarter EBITDAS | — | ||||||||
Fixed Charge Coverage Ratio | |||||||||
EBITDAS | — | — | — | — | |||||
Unfinanced Capital Expenditures | — | — | — | — | |||||
Tax expense | — | — | — | — | |||||
Total | — | — | — | — | |||||
Interest Expense | — | — | — | — | |||||
principal payments due or paid with respect to Debt (excluding exceptions) | — | — | — | — | |||||
payments on all capital lease obligations | — | — | — | — | |||||
Distributions | — | — | — | — | |||||
Total | — | — | — | — | |||||
Applicable Fixed Charge Coverage Ratio | |||||||||
[Date] | |||||||||
As required by section 12.6 of the Fifth Amended and Restated Credit Facility Agreement (the "Credit Agreement"), I hereby certify that no Default or Event of Default has occurred under the Credit Agreement. In addition, I hereby certify the accuracy of the above schedule showing computation of financial covenants contained in Article 12 of the Credit Agreement. | |||||||||
[Signature of Chief Financial Officer] |
$6,000,000.00 | May 5, 2017 |
By: | /s/ Michael T. Williams | ||
Name: Michael T. Williams | |||
Title: Chief Financial Officer |
1) | Borrower is planning on effectuating a Permitted Stock Repurchase on the date first above written (“Planned Permitted Stock Repurchase”) in the amount of $___________. |
2) | Should the Planned Permitted Stock Repurchase occur, the aggregate of all Permitted Stock Repurchases by Borrower, inclusive of the Planned Permitted Stock Repurchase, from the Third Amendment Closing Date through the Revolving Credit Termination Date will not exceed $3,000,000.00. |
3) | The Unused Availability, calculated giving pro forma effect to the Planned Permitted Stock Repurchase, is greater than $4,000,000.00 for each of the five (5) consecutive Business Days preceding the Planned Permitted Stock Repurchase. |
4) | No Event of Default has occurred or will occur as a result of effectuating the Planned Permitted Stock Repurchase. |
1. | I have reviewed this quarterly report on Form 10-Q for the three and six months ended March 31, 2017 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 officer(s) 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 and procedures 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 officer(s) 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 10, 2017 | By: | /s/ Jeffrey T. Schlarbaum |
Jeffrey T. Schlarbaum | ||
President & Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q for the three and six months ended March 31, 2017 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 officer(s) 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 and procedures 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 officer(s) 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 10, 2017 | 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, as amended; 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 10, 2017 | By: | /s/ Jeffrey T. Schlarbaum |
Jeffrey T. Schlarbaum | ||
President & Chief Executive Officer |
Dated: May 10, 2017 | By: | /s/ Michael T. Williams |
Michael T. Williams | ||
Chief Financial Officer |
Document And Entity Information - shares |
6 Months Ended | |
---|---|---|
Mar. 31, 2017 |
May 01, 2017 |
|
Document And Entity Information [Abstract] | ||
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 | 10,316,623 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2017 |
CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] - $ / shares |
Mar. 31, 2017 |
Sep. 30, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
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 | 11,372,111 | 11,330,151 |
Common stock, shares outstanding | 10,313,623 | 10,274,663 |
Treasury stock, shares | 1,055,488 | 1,055,488 |
CONDENSED CONSOLIDATED INCOME STATEMENTS - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2017 |
Apr. 01, 2016 |
Mar. 31, 2017 |
Apr. 01, 2016 |
|
Income Statement [Abstract] | ||||
Net sales | $ 21,368 | $ 33,148 | $ 42,344 | $ 66,081 |
Cost of sales | 19,089 | 27,412 | 38,269 | 54,528 |
Gross profit | 2,279 | 5,736 | 4,075 | 11,553 |
Selling and administrative expenses | 2,665 | 3,762 | 5,095 | 7,747 |
Operating profit/(loss) | (386) | 1,974 | (1,020) | 3,806 |
Interest and financing expense | 229 | 513 | 448 | 802 |
Income/(loss) before income taxes | (615) | 1,461 | (1,468) | 3,004 |
Provision for/(benefit from) income taxes | 0 | 0 | 0 | 0 |
Net income/(loss) | $ (615) | $ 1,461 | $ (1,468) | $ 3,004 |
Net income/(loss) per common and common equivalent share: | ||||
Basic (in dollars per share) | $ (0.06) | $ 0.14 | $ (0.14) | $ 0.29 |
Diluted (in dollars per share) | $ (0.06) | $ 0.14 | $ (0.14) | $ 0.29 |
Weighted average number of common and common equivalent shares outstanding: | ||||
Basic (in shares) | 10,173,388 | 10,205,031 | 10,168,339 | 10,210,539 |
Diluted (in shares) | 10,173,388 | 10,205,031 | 10,168,339 | 10,210,539 |
CONDENSED CONSOLIDATED STATEMENTS of CHANGES in STOCKHOLDERS' EQUITY - USD ($) |
Total |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Retained Earnings/ (Accumulated Deficit) [Member] |
Treasury Stock, at cost [Member] |
---|---|---|---|---|---|
Beginning Balance at Sep. 30, 2015 | $ 8,688,000 | $ 112,000 | $ 45,845,000 | $ (35,740,000) | $ (1,529,000) |
Net income (loss) | 3,004,000 | 3,004,000 | |||
Stock-based compensation | 162,000 | 162,000 | |||
Restricted (non-vested) stock grants, net of forfeitures | 0 | 1,000 | (1,000) | ||
Employee stock plan purchases | 7,000 | 7,000 | |||
Return of incentive compensation shares | (60,000) | (60,000) | |||
Ending Balance at Apr. 01, 2016 | 11,801,000 | 113,000 | 46,013,000 | (32,736,000) | (1,589,000) |
Beginning Balance at Sep. 30, 2016 | 13,864,000 | 113,000 | 46,294,000 | (30,954,000) | (1,589,000) |
Net income (loss) | (1,468,000) | (1,468,000) | |||
Stock-based compensation | 252,000 | 252,000 | |||
Restricted (non-vested) stock grants, net of forfeitures | 1,000 | 1,000 | 0 | ||
Employee stock plan purchases | 13,000 | 13,000 | |||
Return of incentive compensation shares | (60,000) | ||||
Shares withheld for payment of taxes upon vesting of restricted stock | (2,000) | (2,000) | |||
Ending Balance at Mar. 31, 2017 | $ 12,660,000 | $ 114,000 | $ 46,557,000 | $ (32,422,000) | $ (1,589,000) |
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1—OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Our Business IEC Electronics Corp. (“IEC,” “we,” “our,” “us,” the “Company”) provides electronic manufacturing services (“EMS”) to advanced technology companies that produce life-saving and mission critical products for the medical, industrial, aerospace and defense sectors. The Company specializes in delivering technical solutions for the custom manufacture of complex full system assemblies by providing on-site analytical testing laboratories, custom design and test engineering services combined with a broad array of manufacturing services encompassing electronics, interconnect solutions, and precision metalworking. As a full service EMS provider, IEC holds all appropriate certifications for the market sectors it supports including ISO 9001:2008, AS9100C, ISO 13485, Nadcap and IPC QML. IEC is headquartered in Newark, NY and also has operations in Rochester, NY and Albuquerque, NM. Additional information about IEC can be found on its website at www.iec-electronics.com. The contents of this website are not incorporated by reference into this quarterly report. 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 generally end 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”) that merged into IEC on December 28, 2016; IEC Electronics Corp-Albuquerque (“Albuquerque”); IEC Analysis & Testing Laboratory, LLC (“ATL”), formerly Dynamic Research and Testing Laboratories, LLC; and IEC California Holdings, Inc. The Rochester unit, formerly Celmet, operates as a division of IEC. All significant intercompany transactions and accounts are eliminated in consolidation. Unaudited Financial Statements The accompanying unaudited financial statements for the six months ended March 31, 2017 and April 1, 2016 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, 2016 (“fiscal 2016”). Reclassifications Prior year financial statement amounts are reclassified as necessary to conform to the current year presentation. There was no impact on net income or accumulated deficit as a result of the reclassification. Cash The Company’s cash represents 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 the 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 or 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 identified or recorded by IEC for PP&E or intangibles during the six months ended March 31, 2017. 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 as of March 31, 2017 of $0.1 million relates to its acquisition of the Rochester division in July 2010. There has been no impairment for this goodwill since the acquisition date. 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 PP&E are depreciated. The Company received grants for certain facility improvements and equipment from state and local agencies in which the Company operates. These grants reimbursed the Company for a portion of the actual cost or provided in kind services in support of capital projects. There were no deferred grants recorded during the six months ended March 31, 2017 or the fiscal year ended September 30, 2016. The outstanding grant balance was $0.2 million and $0.3 million at March 31, 2017 and September 30, 2016, respectively. Derivative Financial Instruments The Company actively monitors its exposure to interest rate risk and from time to time may use 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 did not have any derivative financial instruments at March 31, 2017 or September 30, 2016. 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 and borrowings. IEC believes that recorded value approximates fair value for all cash, accounts receivable, accounts payable and accrued liabilities. See Note 7—Fair Value of Financial Instruments for a discussion of the fair value of IEC’s borrowings. 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 each of the first six months of the fiscal year ending September 30, 2017 (“fiscal 2017”) or fiscal 2016. 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. Services revenue, including material management, design and repair work revenue, amounted to less than 5% of total revenue in each of the first six months of fiscal 2017 and fiscal 2016. 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 the purchase of Company common stock at a discounted stock purchase price. Compensation expense related to the discount is recognized as employees contribute to the plan. During the fiscal year ended September 30, 2015 (“fiscal 2015”) and the first quarter of fiscal 2016, the ESPP was suspended in connection with the 2014 restatements of the Company’s financial statements. The ESPP was reinstated as of the beginning of the second quarter of fiscal 2016. 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 incurred is reported as interest expense. Any penalties incurred are reported as tax expense. The Company’s income tax filings are subject to audit by various tax jurisdictions and current open years are the fiscal year ended September 30, 2010 through fiscal year ended September 30, 2012, and fiscal year ended September 30, 2014 through fiscal 2015. The federal income tax audit for the fiscal year ended September 30, 2013 concluded during the first six months of fiscal 2017 and resulted in no change to reported tax. 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 ESPP. Options, restricted stock and RSUs are primarily held by directors, officers and certain employees. A summary of shares used in the earnings per share (“EPS”) calculations follows:
As a result of the net loss and incremental shares being negative for the three and six months ended March 31, 2017, 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. As a result of the incremental shares being negative for the three and six months ended and April 1, 2016, the Company calculated diluted earnings per share using weighted average basic shares outstanding, as using diluted shares would be anti-dilutive. 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, as amended, with M&T Bank includes certain restrictions on paying cash dividends, as more fully described in Note 6—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 FASB Accounting Standard Update (“ASU”) 2014-09, “Revenue from Contracts with Customers” (“Topic 606”) was issued May 2014 and updates the principles for recognizing revenue. This ASU will supersede most of the existing revenue recognition requirements in GAAP and will require entities to recognize revenue at an amount that reflects the consideration to which a company expects to be entitled in exchange for transferring goods or services to a customer. This ASU also amends the required disclosures of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. FASB ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations” was issued in March 2016 and improves implementation guidance on principal versus agent considerations. FASB ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” was issued in April 2016 and adds further guidance on identifying performance obligations as well as improving licensing implementation guidance. FASB ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” was issued in June 2016 and clarifies the objective of the collectability criterion, presentation of taxes collected from customers, non-cash consideration, contract modifications at transition, completed contracts at transition and how guidance in Topic 606 is retrospectively applied. The amendments do not change the core principle of the guidance in Topic 606. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within that period. Early adoption is permitted for annual periods beginning after December 15, 2016. The Company is identifying key personnel to evaluate the guidance and determine the transition method, while also formulating a time line to review the potential impact of the new standard on the Company's existing revenue recognition policies and procedures. Although Management has not completed its evaluation of all the issued guidance under Topic 606, the Company does not currently expect the guidance to have a material effect on its financial position, results of operations or cash flows. FASB ASU 2015-11, “Simplifying the Measurement of Inventory” was issued in July 2015. This requires entities to measure most inventory “at the lower of cost and net realizable value,” thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. This ASU will not apply to inventories that are measured by using either the last-in, first-out method or the retail inventory method. For public business entities, this ASU is effective prospectively for annual periods beginning after December 15, 2016, and interim periods therein. Upon transition, entities must disclose the nature of and reason for the accounting change. The Company does not anticipate a significant impact on its financial statements upon adoption. FASB ASU 2015-17, “Income Taxes Balance Sheet Classification of Deferred Taxes” was issued in November 2015. This requires entities to classify deferred tax liabilities and assets as noncurrent in a classified statement of financial position and applies to all entities that present a classified statement of financial position. For public entities, this update is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company does not anticipate a significant impact on its financial statements upon adoption. FASB ASU 2016-02, “Leases” was issued in February 2016. The new guidance establishes the principles to report transparent and economically neutral information about the assets and liabilities that arise from leases. For public entities, the new guidance is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted for all entities. The Company is evaluating the impact this ASU will have on its financial statements. FASB ASU 2016-09, “Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting” was issued in March 2016. This simplifies accounting for several aspects of share-based payment including income tax consequences, classification of awards as either equity or liability and classification on the statement of cash flows. For public entities, this update is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company does not anticipate a significant impact on its financial statements upon adoption. |
ALLOWANCE FOR DOUBTFUL ACCOUNTS |
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ALLOWANCE FOR DOUBTFUL ACCOUNTS | NOTE 2—ALLOWANCE FOR DOUBTFUL ACCOUNTS A summary of activity in the allowance for doubtful accounts during the six months ended March 31, 2017 and April 1, 2016 follows:
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INVENTORIES |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES | NOTE 3—INVENTORIES A summary of inventory by category at period end follows:
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PROPERTY, PLANT & EQUIPMENT |
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PROPERTY, PLANT & EQUIPMENT | NOTE 4—PROPERTY, PLANT & EQUIPMENT A summary of property, plant and equipment and accumulated depreciation at period end follows:
Depreciation expense during the three and six months ended March 31, 2017 and April 1, 2016 follows:
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INTANGIBLE ASSETS |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INTANGIBLE ASSETS | NOTE 5—INTANGIBLE ASSETS IEC’s intangible assets (other than goodwill) were acquired in connection with the purchase of Albuquerque during the fiscal year ended September 30, 2010. Albuquerque’s building and land were acquired subject to an Industrial Revenue Bond (“IRB”) that exempted the property from real estate taxes for the term of the IRB. The tax abatement was valued at $0.4 million at the date of acquisition, and such value was being amortized over the 9.2 year exemption period that remained as of the acquisition date. No impairment was taken for this asset since the Albuquerque acquisition. The IRB was paid off in connection with the sale-leaseback transaction described in Note 14—Capital Lease. A summary of intangible assets by category and accumulated amortization at period end follows:
Amortization expense during the three and six months ended March 31, 2017 and April 1, 2016 follows:
A summary of amortization expense for the next five years follows:
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CREDIT FACILITIES |
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CREDIT FACILITIES | NOTE 6—CREDIT FACILITIES A summary of borrowings at period end follows:
(1) The Albuquerque Mortgage Loan and the Albuquerque Industrial Revenue Bond were repaid in connection with the sale-leaseback transaction described in Note 14—Capital Lease. The proceeds from the transaction were also used to pay down Term Loan A, which was subsequently paid off in due course. M&T Bank Credit Facilities On November 28, 2016, the Company and M&T Bank entered into the Second Amendment to Fifth Amended and Restated Credit Facility Agreement (the “Second Amendment”), that amended the Fifth Amended and Restated Credit Facility Agreement dated as of December 14, 2015, as amended by the First Amendment to the Fifth Amended and Restated Credit Facility, dated as of June 20, 2016 (“Fifth Amended Credit Agreement”). The Second Amendment reduced M&T Bank’s revolving credit commitment to $16.0 million and modified the trigger for maintenance of the cash management system. The Second Amendment also modified the level adjustment dates for the Applicable Margin and the Applicable Unused Fee, as such terms are defined under the Fifth Amended Credit Agreement. In addition, the Second Amendment amended the covenants regarding the Company’s Debt to EBITDAS Ratio, Minimum Quarterly EBITDAS amounts and the Fixed Charge Coverage Ratio, as such terms are defined under the Fifth Amended Credit Agreement. 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. On May 5, 2017, the Company and M&T Bank entered into the Third Amendment to Fifth Amended and Restated Credit Facility Agreement (the “Third Amendment”). See Note 15—Subsequent Events for a discussion of the Third Amendment. Individual debt facilities provided under the Fifth Amended Credit Agreement, as amended, are described below:
Borrowing Base Under the Fifth Amended Credit Agreement, as amended, 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) $16.0 million at March 31, 2017 and $20.0 million at September 30, 2016. At March 31, 2017 and September 30, 2016, the upper limit on Revolver borrowings was $13.8 million and $16.4 million, respectively. Average Revolver balances amounted to $3.4 million during the six months ended March 31, 2017. 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 Second Amendment, the applicable marginal interest rate was fixed on November 28, 2016 through the fiscal quarter ending September 30, 2017, as follows: 4.25% for the Revolver and 3.25% for Term Loan B. Beginning October 1, 2017, variable rate debt will again accrue interest at LIBOR plus the applicable margin interest rate that is based on the Company’s Debt to EBITDAS Ratio. Changes to applicable margins and unused fees resulting from the Debt to EBITDAS Ratio generally become effective mid-way through the subsequent quarter. 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. The Company incurs quarterly unused commitment fees ranging from 0.250% to 0.500% of the excess of $16.0 million over average borrowings under the Revolver. Fees incurred amounted to $50.1 thousand and $23.8 thousand during the six months ended March 31, 2017 and April 1, 2016, respectively. The fee percentage varies based on the Company’s Debt to EBITDAS Ratio, as defined below. Financial Covenants The Fifth Amended Credit Agreement, as amended, 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”). “Adjusted EBITDA” means, for the applicable period, EBITDAS less unfinanced capital expenditures and cash paid for taxes, all on a consolidated basis. The Fixed Charge Coverage Ratio compares (i) 12 month Adjusted 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 March 31, 2017, pursuant to the Fifth Amended Credit Agreement, as amended by the Second Amendment, are as follows:
The Company was in compliance with all debt covenants at March 31, 2017. Other Borrowings When IEC acquired Albuquerque, the Company assumed responsibility for a $0.1 million Industrial Revenue Bond issued by the City of Albuquerque. Interest on the bond was paid semiannually, and principal was due in its entirety at maturity. The Bond was repaid in connection with the sale-leaseback transaction described in Note 14—Capital Lease. 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, as amended, follows:
(1) Includes final payment of Celmet Building Term Loan on November 7, 2018. (2) Includes Revolver balance of $5.5 million at March 31, 2017. |
FAIR VALUE OF FINANCIAL INSTRUMENTS |
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FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 7—FAIR VALUE OF FINANCIAL INSTRUMENTS 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 March 31, 2017 and September 30, 2016 as it is variable rate debt. |
WARRANTY RESERVES |
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WARRANTY RESERVES | NOTE 8—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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STOCK-BASED COMPENSATION |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | NOTE 9—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. The Company also has an ESPP, adopted in 2011, that provides for the purchase of Company common stock at a discounted stock purchase price. The 2010 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 $0.1 million and $0.3 million for the three and six months ended March 31, 2017, respectively. Stock-based compensation expense recorded under the 2010 and 2001 Plans as well as the ESPP totaled $0.1 million and $0.2 million for the three and six months ended April 1, 2016, respectively. 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 March 31, 2017, there were 240,790 shares available to be issued under the 2010 Plan. 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 ESPP 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. Assumptions used in the Black-Scholes model and the estimated value of options granted during the six months ended March 31, 2017 are included in the table below. There were no options granted during the six months ended April 1, 2016.
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 of the Company’s financial statements. 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 $16.7 thousand and $8.1 thousand for the six months ended March 31, 2017 and April 1, 2016, respectively. Compensation expense recognized under the ESPP was $1.9 thousand and $1.0 thousand for the six months ended March 31, 2017 and April 1, 2016, respectively. 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. The Company has not paid any meeting fees in stock since May 21, 2013. |
RETIREMENT PLAN |
6 Months Ended |
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Mar. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
RETIREMENT PLAN | NOTE 10—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 March 31, 2017 and April 1, 2016 totaled $0.1 million and $0.1 million, respectively. |
INCOME TAXES |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | NOTE 11—INCOME TAXES Provision for income taxes during each of the three and six months ended March 31, 2017 and April 1, 2016 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 had federal NOLs for income tax purposes of approximately $31.7 million at September 30, 2016, expiring mainly in years 2022 through 2025 and 2034 through 2035. The Company also has additional state NOLs available in several jurisdictions in which it files state tax returns. Recent New York state corporate tax reform has resulted in the reduction of the business income base rate for qualified manufactures in New York state to 0% beginning in fiscal 2015 for IEC. At September 30, 2016, the Company had $1.2 million of New York State investment tax and other credit carryforwards, expiring in various years through 2030. The credits cannot be utilized unless the New York state tax rate is no longer 0%. |
MARKET SECTORS AND MAJOR CUSTOMERS |
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Risks and Uncertainties [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MARKET SECTORS AND MAJOR CUSTOMERS | NOTE 12—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 March 31, 2017. One customer was from the Aerospace & Defense sector and represented 13% of sales, while the other was from the Medical sector and also represented 13% of sales for the six months ended March 31, 2017. 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, with one representing 18% of sales, while the other customer represented 17% of sales, for the six months ended April 1, 2016. Three individual customers represented 10% or more of receivables and accounted for 40% the outstanding balance at March 31, 2017. Two individual customers represented 10% or more of receivables and accounted for 29% of the outstanding balances at April 1, 2016. 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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Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
LITIGATION | NOTE 13—LITIGATION From time to time, the Company may be involved in legal action in the ordinary course of its business, but management does not believe that any such proceedings commenced through the date of the financial statements included in this Form 10-Q, individually or in the aggregate, will have a material adverse effect on the Company’s consolidated financial position. |
CAPITAL LEASE |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CAPITAL LEASE | NOTE 14—CAPITAL LEASE Leases On November 18, 2016, the Company entered into a sale-leaseback agreement, pursuant to the terms of the Purchase and Sale Agreement (the “PSA”), with Store Capital Acquisitions, LLC, a Delaware limited liability company (the “Purchaser”), for the sale of certain property, including the manufacturing facility located in Albuquerque, New Mexico (the “Property”). Albuquerque (the “Seller”) completed the sale of the Property to the Purchaser for an aggregate purchase price of approximately $5.8 million including a $0.1 million holdback held subject to a holdback of funds agreement. The net book value of assets sold was $4.6 million and the value of the assets acquired under the lease is $5.8 million. The Company recorded a deferred gain of $1.1 million related to the transaction, which is recorded in other long-term liabilities section of the consolidated balance sheet. The proceeds from the transaction were used to payoff the Albuquerque Mortgage Loan and pay down Term Loan A. As part of the transaction, a Lease Agreement dated as of November 18, 2016 was entered into between the Seller and the Purchaser (the “Lease”). Pursuant to the Lease, the Seller is leasing the Property for an initial term of 15 years, with two renewal options of five years each. The initial base annual rent is approximately $0.5 million and is subject to an annual increase equal to the lesser of two percent or 1.25 times the change in the Consumer Price Index. Late payments incur a charge of 5% and bear interest at a rate of 18% or the highest rate permitted by law. If an event of default occurs under the terms of the Lease, among other things, all rental amounts accelerate and become due and owing, subject to certain adjustments. In addition, the Company entered into a separate payment and performance guaranty with the Purchaser with respect to the Lease. A summary of capital lease payments for the next five years follows:
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SUBSEQUENT EVENTS |
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Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15—SUBSEQUENT EVENTS Effective as of May 5, 2017, the Company and M&T Bank entered into the Third Amendment to Fifth Amended Credit Agreement (the “Third Amendment”), that amended the Fifth Amended Credit Agreement. The Third Amendment extended the Revolver termination date to May 5, 2022. In connection with the Third Amendment, the Company issued the Term Loan B to M&T Bank, that amended and restated the Amended and Restated Term Loan B dated December 14, 2015. The Third Amendment revised certain covenants to provide that the Company may use Revolver proceeds to refinance existing indebtedness. As a result, the Term Loan B, which matures on May 5, 2022, now has a principal amount of $6.0 million. The Third Amendment also revised the maximum amount the Company can borrow under the Revolver to the lesser of $16.0 million or 85% of eligible receivables plus $7.0 million of eligible inventories. Pursuant to the Third Amendment, as of March 31, 2017, certain financial covenants of the credit facility were eliminated or revised to be less complex, including the Maximum Inventory covenant, Debt to EBITDAS ratios, the Maximum Capital Expenditures limit after the fiscal year ending September 30, 2017, and future requirements of Minimum Quarterly EBITDAS except for the fiscal quarter ending June 30, 2017. The Third Amendment also modified the definitions of Applicable Margin and Applicable Unused Fee to provide that each is calculated using the applicable Fixed Charge Coverage Ratio, as redefined by the Third Amendment. The Third Amendment established a Borrowing Base computed using monthly Borrowing Base Reports that, if inaccurate, allow M&T Bank, in its discretion, to suspend the making of or limit Revolving Credit Loans. Further, the Third Amendment provides for the Company’s repurchase of its common stock under certain circumstances without M&T Bank’s prior written consent. |
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||
Our Business | Our Business IEC Electronics Corp. (“IEC,” “we,” “our,” “us,” the “Company”) provides electronic manufacturing services (“EMS”) to advanced technology companies that produce life-saving and mission critical products for the medical, industrial, aerospace and defense sectors. The Company specializes in delivering technical solutions for the custom manufacture of complex full system assemblies by providing on-site analytical testing laboratories, custom design and test engineering services combined with a broad array of manufacturing services encompassing electronics, interconnect solutions, and precision metalworking. As a full service EMS provider, IEC holds all appropriate certifications for the market sectors it supports including ISO 9001:2008, AS9100C, ISO 13485, Nadcap and IPC QML. IEC is headquartered in Newark, NY and also has operations in Rochester, NY and Albuquerque, NM. Additional information about IEC can be found on its website at www.iec-electronics.com. |
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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 generally end on the Friday closest to the last day of the calendar quarter. |
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Consolidation | Consolidation The consolidated financial statements include the accounts of IEC and its wholly-owned subsidiaries: IEC Electronics Wire and Cable, Inc. (“Wire and Cable”) that merged into IEC on December 28, 2016; IEC Electronics Corp-Albuquerque (“Albuquerque”); IEC Analysis & Testing Laboratory, LLC (“ATL”), formerly Dynamic Research and Testing Laboratories, LLC; and IEC California Holdings, Inc. The Rochester unit, formerly Celmet, operates as a division of IEC. All significant intercompany transactions and accounts are eliminated in consolidation. |
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Unaudited Financial Statements | Unaudited Financial Statements The accompanying unaudited financial statements for the six months ended March 31, 2017 and April 1, 2016 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, 2016 (“fiscal 2016”). |
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Reclassifications | Reclassifications Prior year financial statement amounts are reclassified as necessary to conform to the current year presentation. There was no impact on net income or accumulated deficit as a result of the reclassification. |
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Cash | Cash The Company’s cash represents 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 the 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 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 or 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. |
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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. |
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Goodwill | 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. |
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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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Customer Deposits | 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. |
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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 PP&E are depreciated. The Company received grants for certain facility improvements and equipment from state and local agencies in which the Company operates. These grants reimbursed the Company for a portion of the actual cost or provided in kind services in support of capital projects. |
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Derivative Financial Instruments | Derivative Financial Instruments The Company actively monitors its exposure to interest rate risk and from time to time may use 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. |
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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 and borrowings. IEC believes that recorded value approximates fair value for all cash, accounts receivable, accounts payable and accrued liabilities. See Note 7—Fair Value of Financial Instruments for a discussion of the fair value of IEC’s borrowings. 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. |
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Revenue Recognition | 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. Services revenue, including material management, design and repair work revenue, amounted to less than 5% of total revenue in each of the first six months of fiscal 2017 and fiscal 2016. 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 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 the purchase of Company common stock at a discounted stock purchase price. Compensation expense related to the discount is recognized as employees contribute to the plan. |
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Legal Expenses Accrual | 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. |
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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 incurred is reported as interest expense. Any penalties incurred are reported as tax expense. The Company’s income tax filings are subject to audit by various tax jurisdictions and current open years are the fiscal year ended September 30, 2010 through fiscal year ended September 30, 2012, and fiscal year ended September 30, 2014 through fiscal 2015. |
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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 ESPP. Options, restricted stock and RSUs are primarily held by directors, officers and certain employees. |
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Dividends | 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. |
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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 FASB Accounting Standard Update (“ASU”) 2014-09, “Revenue from Contracts with Customers” (“Topic 606”) was issued May 2014 and updates the principles for recognizing revenue. This ASU will supersede most of the existing revenue recognition requirements in GAAP and will require entities to recognize revenue at an amount that reflects the consideration to which a company expects to be entitled in exchange for transferring goods or services to a customer. This ASU also amends the required disclosures of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. FASB ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations” was issued in March 2016 and improves implementation guidance on principal versus agent considerations. FASB ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” was issued in April 2016 and adds further guidance on identifying performance obligations as well as improving licensing implementation guidance. FASB ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” was issued in June 2016 and clarifies the objective of the collectability criterion, presentation of taxes collected from customers, non-cash consideration, contract modifications at transition, completed contracts at transition and how guidance in Topic 606 is retrospectively applied. The amendments do not change the core principle of the guidance in Topic 606. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within that period. Early adoption is permitted for annual periods beginning after December 15, 2016. The Company is identifying key personnel to evaluate the guidance and determine the transition method, while also formulating a time line to review the potential impact of the new standard on the Company's existing revenue recognition policies and procedures. Although Management has not completed its evaluation of all the issued guidance under Topic 606, the Company does not currently expect the guidance to have a material effect on its financial position, results of operations or cash flows. FASB ASU 2015-11, “Simplifying the Measurement of Inventory” was issued in July 2015. This requires entities to measure most inventory “at the lower of cost and net realizable value,” thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. This ASU will not apply to inventories that are measured by using either the last-in, first-out method or the retail inventory method. For public business entities, this ASU is effective prospectively for annual periods beginning after December 15, 2016, and interim periods therein. Upon transition, entities must disclose the nature of and reason for the accounting change. The Company does not anticipate a significant impact on its financial statements upon adoption. FASB ASU 2015-17, “Income Taxes Balance Sheet Classification of Deferred Taxes” was issued in November 2015. This requires entities to classify deferred tax liabilities and assets as noncurrent in a classified statement of financial position and applies to all entities that present a classified statement of financial position. For public entities, this update is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company does not anticipate a significant impact on its financial statements upon adoption. FASB ASU 2016-02, “Leases” was issued in February 2016. The new guidance establishes the principles to report transparent and economically neutral information about the assets and liabilities that arise from leases. For public entities, the new guidance is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted for all entities. The Company is evaluating the impact this ASU will have on its financial statements. FASB ASU 2016-09, “Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting” was issued in March 2016. This simplifies accounting for several aspects of share-based payment including income tax consequences, classification of awards as either equity or liability and classification on the statement of cash flows. For public entities, this update is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company does not anticipate a significant impact on its financial statements upon adoption. |
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.
A summary of property, plant and equipment and accumulated depreciation at period end follows:
Depreciation expense during the three and six months ended March 31, 2017 and April 1, 2016 follows:
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Schedule of Weighted Average Number of Shares | A summary of shares used in the earnings per share (“EPS”) calculations follows:
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ALLOWANCE FOR DOUBTFUL ACCOUNTS (Tables) |
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Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for Credit Losses on Financing Receivables | A summary of activity in the allowance for doubtful accounts during the six months ended March 31, 2017 and April 1, 2016 follows:
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INVENTORIES (Tables) |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory | A summary of inventory by category at period end follows:
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PROPERTY, PLANT & EQUIPMENT (Tables) |
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Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of 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.
A summary of property, plant and equipment and accumulated depreciation at period end follows:
Depreciation expense during the three and six months ended March 31, 2017 and April 1, 2016 follows:
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INTANGIBLE ASSETS (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 March 31, 2017 and April 1, 2016 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) |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | A summary of borrowings at period end follows:
(1) The Albuquerque Mortgage Loan and the Albuquerque Industrial Revenue Bond were repaid in connection with the sale-leaseback transaction described in Note 14—Capital Lease. The proceeds from the transaction were also used to pay down Term Loan A, which was subsequently paid off in due course. |
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Schedule of Debt Covenant | Covenant ratios in effect at March 31, 2017, pursuant to the Fifth Amended Credit Agreement, as amended by the Second Amendment, 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, as amended, follows:
(1) Includes final payment of Celmet Building Term Loan on November 7, 2018. (2) Includes Revolver balance of $5.5 million at March 31, 2017 |
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) |
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Schedule of Fair Value and 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) |
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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) |
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Mar. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 31, 2017 are included in the table below. There were no options granted during the six months ended April 1, 2016.
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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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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) | Provision for income taxes during each of the three and six months ended March 31, 2017 and April 1, 2016 follows:
|
MARKET SECTORS AND MAJOR CUSTOMERS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
|
CAPITAL LEASE (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Lease Payments for Capital Leases | A summary of capital lease payments for the next five years follows:
|
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Plant and Equipment (Details) |
6 Months Ended |
---|---|
Mar. 31, 2017 | |
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 - Narrative (Details) - USD ($) |
3 Months Ended | 6 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2017 |
Apr. 01, 2016 |
Sep. 30, 2016 |
|
Accounting Policies [Abstract] | ||||
Asset impairment charges | $ 0 | |||
Goodwill | $ 101,000 | 101,000 | $ 101,000 | |
Goodwill impairment | 0 | |||
Deferred grants recorded | 0 | 0 | ||
Outstanding grant balance | $ 200,000 | $ 200,000 | $ 300,000 | |
Material Management [Member] | ||||
Maximum percentage of total revenue | 5.00% | 5.00% |
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Earnings Per Share (Details) - shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2017 |
Apr. 01, 2016 |
Mar. 31, 2017 |
Apr. 01, 2016 |
|
Accounting Policies [Abstract] | ||||
Weighted average shares outstanding (in shares) | 10,173,388 | 10,205,031 | 10,168,339 | 10,210,539 |
Incremental shares (in shares) | 0 | 0 | 0 | 0 |
Diluted shares (in shares) | 10,173,388 | 10,205,031 | 10,168,339 | 10,210,539 |
Anti-dilutive shares excluded (in shares) | 1,157,356 | 804,965 | 1,157,356 | 804,965 |
ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Apr. 01, 2016 |
|
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Allowance, beginning of period | $ 226 | $ 423 |
Provision for doubtful accounts | (151) | 270 |
Write-offs/recoveries | 15 | (158) |
Allowance, end of period | $ 90 | $ 535 |
INVENTORIES (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Sep. 30, 2016 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 9,711 | $ 9,138 |
Work-in-process | 6,676 | 5,932 |
Finished goods | 1,519 | 1,939 |
Total inventories | 17,906 | 17,009 |
Reserve for excess/obsolete inventory | (1,429) | (1,625) |
Inventories, net | $ 16,477 | $ 15,384 |
PROPERTY, PLANT & EQUIPMENT - Summary of Fixed Assets (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Sep. 30, 2016 |
---|---|---|
Property, Plant and Equipment [Abstract] | ||
Land and improvements | $ 788 | $ 788 |
Buildings and improvements | 8,910 | 8,910 |
Building under capital lease | 5,750 | 0 |
Machinery and equipment | 28,371 | 26,905 |
Furniture and fixtures | 7,503 | 7,489 |
Construction in progress | 3,135 | 3,079 |
Total property, plant and equipment, at cost | 54,457 | 47,171 |
Accumulated depreciation | (37,447) | (36,177) |
Property, plant and equipment, net | $ 17,010 | $ 10,994 |
PROPERTY, PLANT & EQUIPMENT - Depreciation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2017 |
Apr. 01, 2016 |
Mar. 31, 2017 |
Apr. 01, 2016 |
|
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 652 | $ 807 | $ 1,298 | $ 1,647 |
INTANGIBLE ASSETS - Narrative (Details) - Property tax abatement [Member] - Albuquerque [Member] - USD ($) |
6 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Sep. 30, 2016 |
|
Finite-Lived Intangible Assets [Line Items] | ||
Amount allocated to intangibles | $ 360,000 | $ 360,000 |
Estimated useful life | 9 years 2 months 12 days | |
Impairment of intangible assets | $ 0 |
INTANGIBLE ASSETS - Summary of Intangibles (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Sep. 30, 2016 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated amortization | $ (285) | $ (265) |
Intangible assets, net | 75 | 95 |
Property tax abatement [Member] | Albuquerque [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Property tax abatement - Albuquerque | $ 360 | $ 360 |
INTANGIBLE ASSETS - Amortization Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2017 |
Apr. 01, 2016 |
Mar. 31, 2017 |
Apr. 01, 2016 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Intangible amortization expense | $ 10 | $ 10 | $ 20 | $ 20 |
INTANGIBLE ASSETS - Amortization Expense Maturity Schedule (Details) $ in Thousands |
Mar. 31, 2017
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2018 | $ 40 |
2019 | 35 |
2020 and thereafter | $ 0 |
CREDIT FACILITIES - Summary of Borrowings (Details) - USD ($) $ in Thousands |
6 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2017 |
Sep. 30, 2016 |
||||
Total debt, net | $ 14,480 | $ 19,640 | |||
Long-term Debt, Gross | 14,691 | 19,869 | |||
Unamortized Debt Issuance Expense | (211) | (229) | |||
Less: current portion | (1,530) | (2,908) | |||
Long-term debt | $ 12,950 | $ 16,732 | |||
Term Loan A [Member] | |||||
Fixed/Variable Rate | Fixed Interest Rate | ||||
Maturity Date | [1] | Feb. 01, 2020 | |||
Interest Rate | [1] | 0.00% | 3.98% | ||
Total debt, net | [1] | $ 0 | $ 3,693 | ||
Term Loan B [Member] | |||||
Fixed/Variable Rate | Variable Interest Rate | ||||
Maturity Date | Feb. 01, 2023 | ||||
Interest Rate | 4.03% | 3.03% | |||
Total debt, net | $ 8,283 | $ 8,983 | |||
Albuquerque Mortgage Loan [Member] | |||||
Fixed/Variable Rate | Variable Interest Rate | ||||
Maturity Date | [1] | Feb. 01, 2018 | |||
Interest Rate | [1] | 0.00% | 3.55% | ||
Total debt, net | [1] | $ 0 | $ 2,200 | ||
Celmet Building Term Loan [Member] | |||||
Fixed/Variable Rate | Fixed Interest Rate | ||||
Maturity Date | Nov. 07, 2018 | ||||
Interest Rate | 4.72% | 4.72% | |||
Total debt, net | $ 867 | $ 932 | |||
Albuquerque Industrial Revenue Bond [Member] | |||||
Fixed/Variable Rate | Fixed Interest Rate | ||||
Maturity Date | [1] | Mar. 01, 2019 | |||
Interest Rate | [1] | 0.00% | 5.63% | ||
Total debt, net | [1] | $ 0 | $ 100 | ||
Revolving Credit Facility [Member] | |||||
Fixed/Variable Rate | Variable Interest Rate | ||||
Maturity Date | Jan. 18, 2018 | ||||
Interest Rate | 5.23% | 3.28% | |||
Total debt, net | $ 5,541 | $ 3,961 | |||
|
CREDIT FACILITIES - Covenant Ratios (Details) - Fifth Amendment [Member] |
6 Months Ended |
---|---|
Mar. 31, 2017
USD ($)
| |
Maximum Inventory: | |
Maximum Capital Expenditures: | $ 4,500,000 |
As of December 30, 2016 [Member] | |
Maximum Inventory: | |
Inventory | $ 25,000,000 |
Fiscal Quarter Ending December 30, 2016 [Member] | |
Debt to EBITDAS Ratio: | |
Debt to EBITDAS ratio | 0.0470 |
Minimum Quarterly EBITDAS: | |
Net earnings before interest,taxes, depreciation and amortization | $ 240,000 |
Fixed Charge Coverage Ratio: | |
Fixed charge coverage ratio | 0.0030 |
CREDIT FACILITIES - Long-term Debt Maturities (Details) - USD ($) $ in Thousands |
6 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2017 |
Sep. 30, 2016 |
|||
Debt Instrument [Line Items] | ||||
2017 | $ 1,530 | |||
2018 | [1] | 2,137 | ||
2019 | 1,400 | |||
2020 | 1,400 | |||
2022 and thereafter (2) | 8,224 | |||
Total debt, net | $ 14,691 | $ 19,869 | ||
Celmet Term Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity date | Nov. 07, 2018 | |||
Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity date | Jan. 18, 2018 | |||
|
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Sep. 30, 2016 |
||
---|---|---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Carrying Value | $ 14,480 | $ 19,640 | ||
Term Loan A [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair Value | 0 | 3,489 | ||
Carrying Value | [1] | 0 | 3,693 | |
Celmet Building Term Loan [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair Value | 811 | 864 | ||
Carrying Value | $ 867 | $ 932 | ||
|
WARRANTY RESERVES (Details) - Warranty Reserves [Member] - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Apr. 01, 2016 |
|
Warranty Reserve | ||
Reserve, beginning of period | $ 180 | $ 399 |
Provision | 111 | 123 |
Warranty costs | (101) | (183) |
Reserve, end of period | $ 190 | $ 339 |
STOCK-BASED COMPENSATION - Valuation Assumptions (Details) - USD ($) |
6 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Apr. 01, 2016 |
|
Assumptions for Black-Scholes: | ||
Risk-free interest rate | 1.48% | |
Expected term in years | 4 years | |
Volatility | 40.00% | |
Expected annual dividends | $ 0 | |
Value of options granted: | ||
Number of options granted (in shares) | 50,000 | 0 |
Weighted average fair value per share (in dollars per share) | $ 1.18 | $ 0.00 |
Fair value of options granted (000s) | $ 59,000 |
STOCK-BASED COMPENSATION - Changes in Non-Vested Options Outstanding (Details) - $ / shares |
6 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Apr. 01, 2016 |
|
Number of Options | ||
Non-vested, beginning of period (in shares) | 489,109 | 546,145 |
Granted (in shares) | 50,000 | 0 |
Vested (in shares) | (104,036) | (104,036) |
Forfeited (in shares) | 0 | 0 |
Non-vested, end of period (in shares) | 435,073 | 442,109 |
Wgtd. Avg. Grant Date Fair Value | ||
Non-vested, beginning of period (in dollars per share) | $ 1.43 | $ 1.41 |
Granted (in dollars per share) | 1.18 | 0.00 |
Vested (in dollars per share) | 1.45 | 1.45 |
Forfeited (in dollars per share) | 0.00 | 0.00 |
Non-vested, end of period (in dollars per share) | $ 1.40 | $ 1.40 |
RETIREMENT PLAN (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Apr. 01, 2016 |
|
Compensation and Retirement Disclosure [Abstract] | ||
Contributions by employer, percentage | 25.00% | |
Employer matching contribution, percentage | 6.00% | |
Contributions by employer | $ 0.1 | $ 0.1 |
INCOME TAXES - Tax Provision/Benefit (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2017 |
Apr. 01, 2016 |
Mar. 31, 2017 |
Apr. 01, 2016 |
|
Income Tax Disclosure [Abstract] | ||||
Provision for/(benefit from) income taxes | $ 0 | $ 0 | $ 0 | $ 0 |
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions |
Mar. 31, 2017 |
Sep. 30, 2016 |
---|---|---|
Base tax rate | 0.00% | |
Domestic Tax Authority [Member] | ||
Operating loss carryforwards | $ 31.7 | |
State and Local Jurisdiction [Member] | ||
Operating loss carryforwards | $ 1.2 |
MARKET SECTORS AND MAJOR CUSTOMERS - Summary of Sales (Details) - Sales Revenue, Segment [Member] |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2017 |
Apr. 01, 2016 |
Mar. 31, 2017 |
Apr. 01, 2016 |
|
Concentration Risk [Line Items] | ||||
Percentage of Sales by Sector | 100.00% | 100.00% | 100.00% | 100.00% |
Aerospace & Defense [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of Sales by Sector | 44.00% | 34.00% | 47.00% | 37.00% |
Medical [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of Sales by Sector | 32.00% | 50.00% | 30.00% | 46.00% |
Industrial [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of Sales by Sector | 21.00% | 14.00% | 20.00% | 15.00% |
Communications & Other [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of Sales by Sector | 3.00% | 2.00% | 3.00% | 2.00% |
CAPITAL LEASE - Narrative (Details) $ in Millions |
Nov. 18, 2016
USD ($)
renewal_option
|
---|---|
Sale Leaseback Transaction [Line Items] | |
Aggregate purchase price | $ 5.8 |
Holdback amount | 0.1 |
Net book value of assets sold | 4.6 |
Value of assets acquired under the lease | $ 5.8 |
Initial term of lease | 15 years |
Number of lease renewal options | renewal_option | 2 |
Term of renewal options (in years) | 5 years |
Annual rental payment | $ 0.5 |
Late payment fee (percent) | 5.00% |
Interest rate (percent) | 18.00% |
Maximum [Member] | |
Sale Leaseback Transaction [Line Items] | |
Annual percentage increase | 2.00% |
Minimum [Member] | |
Sale Leaseback Transaction [Line Items] | |
Consumer pricing index multiplier (lesser of) | 1.25 |
Other Noncurrent Liabilities [Member] | |
Sale Leaseback Transaction [Line Items] | |
Deferred gain recorded | $ 1.1 |
CAPITAL LEASE - Summary of Future Minimum Payments on Capital Leases (Details) $ in Thousands |
Mar. 31, 2017
USD ($)
|
---|---|
Leases [Abstract] | |
2018 | $ 478 |
2019 | 487 |
2020 | 497 |
2021 | 549 |
2022 and thereafter | 6,101 |
Total capital lease payments | 8,112 |
Less: amounts representing interest | (2,435) |
Present value of minimum lease payment | $ 5,677 |
SUBSEQUENT EVENTS (Details) - USD ($) |
May 05, 2017 |
Mar. 31, 2017 |
Sep. 30, 2016 |
---|---|---|---|
Subsequent Event [Line Items] | |||
Maximum borrowing capacity | $ 16,000,000 | ||
Revolving Credit Facility [Member] | |||
Subsequent Event [Line Items] | |||
Maximum borrowing capacity | $ 16,000,000.0 | $ 20,000,000 | |
Maximum borrowing capacity as percentage of eligible receivables | 85.00% | ||
Maximum borrowing capacity based on eligible inventories | $ 3,750,000.00 | ||
Credit Agreement 2013 [Member] | Revolving Credit Facility [Member] | Term Loan B [Member] | Scenario, Forecast [Member] | |||
Subsequent Event [Line Items] | |||
Principal amount | $ 6,000,000 | ||
Maximum borrowing capacity | $ 16,000,000 | ||
Maximum borrowing capacity as percentage of eligible receivables | 85.00% | ||
Maximum borrowing capacity based on eligible inventories | $ 7,000,000 |
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