-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Nhhhb4zu2aadCVvg4RONMcmVVmjw74S1CNbBenDXnKVIkfR5pZevtlHxFlatb72f a0WLcMxV7JZH7b2x46cvFg== 0001019056-04-000584.txt : 20040423 0001019056-04-000584.hdr.sgml : 20040423 20040423134527 ACCESSION NUMBER: 0001019056-04-000584 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20040326 FILED AS OF DATE: 20040423 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IEC ELECTRONICS CORP CENTRAL INDEX KEY: 0000049728 STANDARD INDUSTRIAL CLASSIFICATION: PRINTED CIRCUIT BOARDS [3672] IRS NUMBER: 133458955 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-06508 FILM NUMBER: 04750387 BUSINESS ADDRESS: STREET 1: 105 NORTON ST CITY: NEWARK STATE: NY ZIP: 14513 BUSINESS PHONE: 3153317742 MAIL ADDRESS: STREET 1: PO BOX 271 CITY: NEWARK STATE: NY ZIP: 14513 FORMER COMPANY: FORMER CONFORMED NAME: INTERCONTINENTAL ELECTRONICS CORP DATE OF NAME CHANGE: 19730601 10-Q 1 iec_2q04.txt FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 26, 2004 Commission file Number 0-6508 IEC ELECTRONICS CORP. ------------------------------------------------------- (Exact name of registrant as specified in its charter.) Delaware 13-3458955 ------------------------------ ------------------------------------ (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 105 Norton Street, Newark, New York 14513 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices (Zip Code) (315) 331-7742 - -------------------------------------------------------------------------------- Registrant's telephone number, including area code: Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). YES [ ] NO [X] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date: Common Stock, $0.01 Par Value - 8,086,070 shares as of April 22, 2004. Page 1 of 15 PART 1 FINANCIAL INFORMATION Page Number Item 1. Financial Statements Consolidated Balance Sheets as of: March 26, 2004 (Unaudited) and September 30, 2003............. 3 Consolidated Statements of Operations for the three months ended: March 26, 2004 (Unaudited) and March 28, 2003 (Unaudited)................................................... 4 Consolidated Statements of Operations for the six months ended: March 26, 2004 (Unaudited) and March 28, 2003 (Unaudited)................................................... 5 Consolidated Statements of Cash Flows for the six months ended: March 26, 2004 (Unaudited) and March 28, 2003 (Unaudited)................................................... 6 Notes to Consolidated Financial Statements (Unaudited)........ 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.................... 10 Item 3. Quantitative and Qualitative Disclosures about Market Risk....... 13 Item 4. Controls and Procedures.......................................... 13 PART II OTHER INFORMATION Item 1. Legal Proceedings............................................... 14 Item 2. Changes in Securities........................................... 14 Item 3. Defaults Upon Senior Securities................................. 14 Item 4. Submission of Matters to a Vote of Security Holders............. 14 Item 5. Other Information............................................... 15 Item 6. Exhibits and Reports on Form 8-K................................ 15 Signatures.............................................................. 15 Page 2 of 15 Part 1. Financial Information Item 1 -- Financial Statements IEC ELECTRONICS CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS MARCH 26, 2004 AND SEPTEMBER 30, 2003 (in thousands)
MARCH 26, SEPTEMBER 30, 2004 2003 ------------ ------------ ASSETS (Unaudited) CURRENT ASSETS: Cash $ 146 $ 793 Accounts receivable 4,759 4,004 Inventories 2,113 1,633 Deferred income taxes 250 250 Other current assets 231 329 Current assets-discontinued operations 57 121 ------------ ------------ Total current assets 7,556 7,130 ------------ ------------ FIXED ASSETS: Land and land improvements 768 768 Building and improvements 3,994 3,995 Machinery and equipment 40,948 46,702 Furniture and fixtures 5,256 5,870 ------------ ------------ SUB-TOTAL GROSS PROPERTY 50,966 57,335 LESS ACCUMULATED DEPRECIATION (48,313) (54,161) ------------ ------------ 2,653 3,174 OTHER NON-CURRENT ASSETS 158 202 ------------ ------------ $ 10,367 $ 10,506 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short term borrowings $ 1,042 $ 1,277 Accounts payable 3,343 2,740 Accrued payroll and related expenses 589 794 Other accrued expenses 626 675 Current liabilities-discontinued operations 204 216 ------------ ------------ Total current liabilities 5,804 5,702 ------------ ------------ LONG TERM VENDOR NOTES 302 456 LONG TERM BANK DEBT 584 934 ------------ ------------ TOTAL LIABILITIES 6,690 7,092 ------------ ------------ SHAREHOLDERS' EQUITY: Preferred stock, $.01 par value, Authorized - 500,000 shares; None issued or outstanding -- -- Common stock, $.01 par value, Authorized - 50,000,000 shares; Issued - 8,134,497 and - 8,021,387 shares (net of 573 treasury shares) 70 69 Additional paid-in capital 38,485 38,479 Accumulated deficit (34,786) (35,042) Accumulated translation adjustments (92) (92) ------------ ------------ Total shareholders' equity 3,677 3,414 ------------ ------------ $ 10,367 $ 10,506 ============ ============
The accompanying notes are an integral part of these financial statements Page 3 of 15 IEC ELECTRONICS CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 26, 2004 AND MARCH 28, 2003 (in thousands, except share and per share data) 3 MONTHS ENDED 3 MONTHS ENDED MARCH 26, 2004 MARCH 28, 2003 -------------- -------------- (Unaudited) (Unaudited) Net sales $ 7,298 $ 15,469 Cost of sales 6,575 14,223 -------------- -------------- Gross profit 723 1,246 -------------- -------------- Selling and administrative expenses 593 900 -------------- -------------- Operating profit 130 346 Interest and financing expense (94) (191) Forgiveness of accounts payable 9 378 Other income, net 79 9 -------------- -------------- Net income before income taxes 124 542 Income taxes -- -- -------------- -------------- Net income from continuing operations 124 542 Discontinued Operations: Income from operations of IEC-Mexico disposed of (net of Income taxes of $0 in 2004 and (7) in 2003) -- 184 -------------- -------------- Net income $ 124 $ 726 ============== ============== Net income per common and common equivalent share: Basic Continuing operations $ 0.02 $ 0.07 Discontinued operations $ 0.00 $ 0.02 Total $ 0.02 $ 0.09 Diluted Continuing operations $ 0.01 $ 0.07 Discontinued operations $ 0.00 $ 0.02 Total $ 0.01 $ 0.09 Weighted average number of common and common equivalent shares outstanding: Basic 8,097,224 7,896,659 Diluted 8,756,077 8,178,102 The accompanying notes are an integral part of these financial statements. Page 4 of 15 IEC ELECTRONICS CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED MARCH 26, 2004 AND MARCH 28, 2003 (in thousands, except share and per share data) 6 MONTHS ENDED 6 MONTHS ENDED MARCH 26, 2004 MARCH 28, 2003 -------------- -------------- (Unaudited) (Unaudited) Net sales $ 13,816 $ 25,070 Cost of sales 12,522 22,835 -------------- -------------- Gross profit 1,294 2,235 -------------- -------------- Selling and administrative expenses 1,172 1,653 Restructuring benefit -- (63) -------------- -------------- Operating profit 122 645 Interest and financing expense (185) (388) Forgiveness of accounts payable 9 623 Other income, net 310 105 -------------- -------------- Net income before income taxes 256 985 Income taxes -- -- -------------- -------------- Net income from continuing operations 256 985 Discontinued Operations: Income from operations of IEC-Mexico disposed of (net of Income taxes of $0 in 2004 and (7) in 2003) -- 184 -------------- -------------- Net income $ 256 $ 1,169 ============== ============== Net income per common and common equivalent share: Basic Continuing operations $ 0.03 $ 0.13 Discontinued operations $ 0.00 $ 0.02 Total $ 0.03 $ 0.15 Diluted Continuing operations $ 0.03 $ 0.13 Discontinued operations $ 0.00 $ 0.02 Total $ 0.03 $ 0.15 Weighted average number of common and common equivalent shares outstanding: Basic 8,071,695 7,795,800 Diluted 8,764,067 8,022,291 The accompanying notes are an integral part of these financial statements. Page 5 of 15 IEC ELECTRONICS CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED MARCH 26, 2004 AND MARCH 28, 2003 (in thousands)
6 MONTHS ENDED 6 MONTHS ENDED MARCH 26, 2004 MARCH 28, 2003 -------------- -------------- (Unaudited) (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 256 $ 1,169 Income from discontinued operations -- (184) Depreciation 566 845 Gain on sale of fixed assets (293) (50) Common stock issued under directors' stock plan -- 8 Changes in operating assets and liabilities: Accounts receivable (755) 705 Inventories (480) 21 Other current assets 98 (70) Accounts payable 603 (28) Accrued payroll and related expenses (205) (148) Other accrued expenses (49) (675) -------------- -------------- Net cash flows from operating activities (259) 1,593 -------------- -------------- CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of property 293 547 Purchases of plant, property & equipment (2) -- Proceeds from sale of discontinued operations property -- 875 -------------- -------------- Net cash flows from investing activities 291 1,422 -------------- -------------- CASH FLOWS FROM FINANCING ACTIVITIES: Repayments under loan agreements (739) (5,426) Proceeds from borrowings -- 3,500 Debt issuance costs -- (263) Common stock issued under refinancing plan -- 50 Proceeds from exercise of stock options 7 -- -------------- -------------- Net cash flows from financing activities (732) (2,139) -------------- -------------- Cash from (used in) discontinued operations 53 (867) -------------- -------------- Change in cash and cash equivalents (647) 9 Effect of exchange rate changes -- (9) Cash and cash equivalents at beginning of period 793 -- -------------- -------------- Cash and cash equivalents at end of period $ 146 $ -- ============== ============== Supplemental Disclosures of Cash Flow Information: Cash paid during the period for: Interest $ 185 $ 387 ============== ============== Income taxes $ -- $ -- ============== ============== Conversion of accounts payable to long-term payable $ -- $ 760 ============== ============== NON-CASH INVESTING AND FINANCING ACTIVITIES: Conversion of accounts payable to debt $ -- $ 1,187 ============== ==============
The accompanying notes are an integral part of these financial statements. Page 6 of 15 IEC ELECTRONICS CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 26, 2004 (1) Business and Summary of Significant Accounting Policies IEC Electronics Corp. ("IEC", "the Company") is an independent electronics manufacturing services ("EMS") provider of complex printed circuit board assemblies and electronic products and systems. The Company provides high quality electronics manufacturing services with state-of-the-art manufacturing capabilities and production capacity. Utilizing computer controlled manufacturing and test machinery and equipment, the Company provides manufacturing services employing surface mount technology ("SMT") and pin-through-hole ("PTH") interconnection technologies. As an independent full-service EMS provider, the Company offers its customers a wide range of manufacturing and management services, on either a turnkey or consignment basis, including design, prototype, material procurement and control, manufacturing and test engineering support, statistical quality assurance, complete resource management and distribution. The Company's strategy is to cultivate strong manufacturing relationships with established and emerging original equipment manufacturers ("OEMs"). Consolidation - ------------- The consolidated financial statements include the accounts of IEC and its Wholly-owned subsidiary, IEC Electronicos de Mexico ("Mexico"), (collectively, "IEC"). Operations in Texas and Mexico were closed in July 2002. All significant intercompany transactions and accounts have been eliminated. Revenue Recognition - ------------------- The Company recognizes revenue upon shipment of product for both turnkey and consignment contracts. Cash and Cash Equivalents - ------------------------- Cash and cash equivalents include highly liquid investments with original maturities of three months or less. The Company's cash and cash equivalents are held and managed by institutions that follow the Company's investment policy. The fair value of the Company's financial instruments approximates carrying amounts due to the relatively short maturities and variable interest rates of the instruments, which approximate current market interest rates. Inventories - ----------- Inventories are stated at the lower of cost (first-in, first-out) or market. The major classifications of inventories are as follows at period end (in thousands): March 26, September 30, 2004 2003 ------------- ------------- (Unaudited) Raw materials $ 1,382 $ 1,128 Work-in-process 716 498 Finished goods 15 7 ------------- ------------- $ 2,113 $ 1,633 ============= ============= Page 7 of 15 IEC ELECTRONICS CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 26, 2004 Long-Lived Assets - ----------------- In October 2002, the Company sold its Alabama facility for $547,000. A gain of $50,000 was recorded in other income. In February 2003, the Company sold its Texas facility for $875,000. A gain of $75,000 was recorded as part of discontinued operations. Unaudited Financial Statements - ------------------------------ The accompanying unaudited financial statements as of March 26, 2004, and for the three month and six months ended March 26, 2004 have been prepared in accordance with generally accepted accounting principles for interim financia1 information. In the opinion of management, all adjustments considered necessary for a fair presentation, which consist solely of normal recurring adjustments, have been included. The accompanying financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's September 30, 2003 Annual Report on Form 10-K. Earnings Per Share - ------------------ Net income per share is computed in accordance with Statement of Financial Accounting Standards No. 128, "Earnings Per Share". Basic earnings per share is calculated by dividing income available to common shareholders by the weighted-average number of shares outstanding for each period. Diluted earnings per common share is calculated by adjusting the weighted-average shares outstanding, assuming conversion of all potentially dilutive stock options. New Pronouncements - ------------------ In November 2002, the EITF reached a consensus on issue 00-21, "Revenue Arrangements with Multiple Deliverables" (EITF 00-21). EITF 00-21 addresses revenue recognition on arrangements encompassing multiple elements that are delivered at different points in time, defining criteria that must be met for elements to be considered to be a separate unit of accounting. If an element is determined to be a separate unit of accounting, the revenue for the element is recognized at the time of delivery. EITF 00-21 is effective for revenue arrangements entered into in fiscal periods beginning after June 15, 2003. The Company adopted this standard as of October 1, 2003 with no material impact on its financial position, results of operations or cash flows. (2) Discontinued Operations - --------------------------- On June 18, 2002, the Company signed an Asset Purchase Agreement to sell substantially all of the assets of IEC-Mexico to Electronic Product Integration Corporation for $730,000. The Company recorded an after-tax loss on the sale of approximately $3.1 million in fiscal 2002. The reserve balance at March 26, 2004 was $204,000. On February 28, 2003, the Company sold its Edinburg, Texas facility for $875,000 and completed its restructuring initiative. The Company recorded an $184,000 restructuring benefit during Q2 2003 due to certain facility payments accrued in a prior fiscal year that will no longer be paid out. Assets and liabilities of discontinued operations consisted of the following: March 26, September 30, 2004 2003 ------------- ------------- (Unaudited) Current assets $ 57 $ 121 Accrued expenses 204 216 ------------- ------------- Net assets of discontinued operations $ (147) $ (95) ============= ============= Page 8 of 15 IEC ELECTRONICS CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 26, 2004 (3) Stock Option Plans - ---------------------- The Company applies Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees", and related interpretations in accounting for its stock option plans. Accordingly, no compensation expense has been recognized for its stock option plans. SFAS No. 123, "Accounting for Stock-Based Compensation", as amended by SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure", requires disclosure of pro forma net income per share as if the fair valued-based method had been applied in measuring compensation cost for the stock-based awards. The following table illustrates the effect on net earnings and earnings per share had the Company adopted the fair value based method of accounting for stock-based employee compensation for all periods presented.
3 MONTHS ENDED 3 MONTHS ENDED 6 MONTHS ENDED 6 MONTH ENDED MARCH 26, 2004 MARCH 28, 2003 MARCH 26, 2004 MARCH 28, 2003 (Unaudited) (Unaudited) (Unaudited) (Unaudited) -------------- -------------- -------------- -------------- Net earnings, as reported $ 124 $ 726 $ 256 $ 1,169 Pro forma net earnings $ 107 $ 1,019 $ 223 $ 1,448 Earnings per share: Basic - as reported $ 0.02 $ 0.09 $ 0.03 $ 0.15 Basic - pro forma $ 0.01 $ 0.13 $ 0.03 $ 0.19 Diluted - as reported $ 0.01 $ 0.09 $ 0.03 $ 0.15 Diluted - pro forma $ 0.01 $ 0.13 $ 0.03 $ 0.18
(4) Litigation - -------------- Except as set forth below, there are no material legal proceedings pending to which the Company or any of its subsidiaries is a party or to which any of the Company or subsidiaries' property is subject. To our knowledge, there are no material legal proceedings to which any director, officer or affiliate of the Company, or any beneficial owner of more than 5 percent (5%) of Common Stock, or any associate of any of the foregoing, is a party adverse to the Company or any of its subsidiaries. An action was commenced in United States District Court for the Southern Division of Texas against the Company and several other corporate defendants, on August 12,2002. The plaintiffs allege a "toxic tort" action against the defendants, for exposure to lead, lead dust, chemicals and other substances used in the manufacture of products by various defendants. The essence of the complaint relates to alleged "in utero" exposure to the circulatory system of the then unborn children, resulting in alleged tissue toxicity through the mothers, causing damage to the central nervous system, brain and other organs of the fetus. The complaint alleges theories of negligence, gross negligence, strict liability, breach of warranty and fraud/negligent misrepresentation, and claims unspecified damages for pain and suffering, a variety of special damages, punitive damages and attorneys' fees. Royal & Sunalliance Insurance Company has agreed to provide a defense of the claims with a reservation of rights, but has expressly excluded any coverage for the claim for punitive damages. The Company has denied liability and the case is still in the discovery phase. A March 2004 trial date was adjourned and no new trial date has been fixed. On August 13, 2003 General Electric Company ("GE") commenced an action in the state of Connecticut against the Company and Vishay Intertechnology, Inc. The action alleges causes of action for breach of a manufacturing services contract, which had an initial value of $4.4 million, breach of express warranty, breach of implied warranty and a violation of the Connecticut Unfair Trade Practices Act. Vishay supplied a component that the Company used to assemble printed circuit boards for GE that GE contends failed to function properly requiring a product recall. GE claims damages "in excess of $15,000" plus interest and attorneys' fees. The Company has made a motion to dismiss the action in Connecticut for lack of jurisdiction and the motion is pending. GE has filed a motion seeking leave to file an amended complaint, which the Company has opposed. This motion is also pending. The position of the Company is that the contract with GE was substantially completed and that it has meritorious defenses and a cross claim against Vishay. Page 9 of 15 Item 2 -- Management's Discussion and Analysis of Financial Condition and Results of Operations ----------------------------------------------------------- Results of Operations - Three Months Ended March 26, 2004, Compared to the Three Months Ended March 28, 2003. ----------------------------------------------------------- Net sales for the three month period ended March 26, 2004, were $7.3 million, compared to $15.5 million for the comparable period of the prior fiscal year, a decrease of 53 percent. The decrease in sales is due to a decline in orders from one of our major customers. Turnkey sales were 91 percent of net sales in the quarter as compared to 94 percent for the comparable period of the prior year. Five customers accounted for 80% of our sales for the quarter ended March 26, 2004. Gross profit was $0.7 million or 9.9 percent of sales for the three month period ended March 26, 2004, versus $1.2 million or 8.1 percent of sales in the comparable period of the prior fiscal year. The prior year result was negatively impacted by $557,000 due to the write off of a promissory note from Acterna Corporation. The prior year gross profit percentage would have been 11.7% without the Acterna adjustment. The decrease in the comparable gross profit percentage is primarily due to fixed overhead costs being spread over fewer sales dollars. Selling and administrative expenses decreased to $0.6 million for the three month period ended March 26, 2004, from $0.9 million in the comparable period of the prior fiscal year, a decrease of 34 percent. This decrease is primarily due to lower sales commissions. As a percentage of net sales, selling and administrative expenses increased to 8.1 percent from 5.8 percent in comparison to the same quarter of the prior fiscal year. The increase is due to fixed costs being spread over fewer sales dollars. Interest expense decreased to $0.1 million for the three month period ended March 26, 2004, from $0.2 million in the comparable period of the prior fiscal year, a decrease of 51 percent. This decrease is primarily due to a reduction in debt. During the three month period ended March 26, 2004, we were able to negotiate $9,000 forgiveness of accounts payable. During the three month period ended March 28, 2003, we were able to negotiate $378,000 forgiveness of accounts payable. We had other income of $79,000 for the three months ended March 26, 2004. This income was related to a gain on the sale of excess equipment. We have recorded no benefit from income tax as a result of our cumulative net losses, and accordingly, we have a large valuation allowance against our net deferred tax asset including the net operating loss carry-forward. Net income for the three months ended March 26, 2004 was $0.1 million versus a net income of $0.5 million in the comparable quarter of the prior fiscal year. Diluted income per share was $0.01 as compared to diluted income per share of $0.09 in the comparable quarter of the prior fiscal year. Discontinued Operations - ----------------------- On February 28, 2003 IEC sold its Edinburg, Texas facility and completed its restructuring initiative. As a result, IEC recorded a $184,000 restructuring benefit due to certain facility payments accrued in a prior fiscal year that will no longer be paid out. Page 10 of 15 ----------------------------------------------------------- Results of Operations - Six Months Ended March 26, 2004, Compared to the Six Months Ended March 28, 2003. ----------------------------------------------------------- Net sales for the six month period ended March 26, 2004, were $13.8 million, compared to $25.1 million for the comparable period of the prior fiscal year, a decrease of 45 percent. The decrease in sales is due to a decline in orders from one of our major customers. Turnkey sales were 92 percent of net sales in the six months as compared to 93 percent for the comparable period of the prior year. Five customers accounted for 81% of our sales for the six months ended March 26, 2004. During the quarter, we received orders from three new customers, new orders from existing customers, and a sizeable order from Motorola, one of our former large customers. Another customer, Teradyne, has informed us that it plans to move substantial amounts of its contract assembly work to China over the balance of our fiscal year. Gross profit was $1.3 million or 9.4 percent of sales for the six month period ended March 26, 2004, versus $2.2 million or 8.9 percent of sales in the comparable period of the prior fiscal year. The prior year result was negatively impacted by $557,000 due to the write off of a promissory note from Acterna Corporation. The prior year gross profit percentage would have been 11.1% without the Acterna adjustment. The decrease in the comparable gross profit percentage is primarily due to fixed overhead costs being spread over fewer sales dollars. Selling and administrative expenses decreased to $1.2 million for the six month period ended March 26, 2004, from $1.7 million in the comparable period of the prior fiscal year, a decrease of 29 percent. This decrease is primarily due to lower sales commissions. As a percentage of net sales, selling and administrative expenses increased to 8.5 percent from 6.6 percent in comparison to the same period of the prior fiscal year. The increase is due to fixed costs being spread over fewer sales dollars. Interest expense decreased to $0.2 million for the six month period ended March 26, 2004, from $0.4 million in the comparable period of the prior fiscal year, a decrease of 52 percent. This decrease is primarily due to a reduction in debt. During the six month period ended March 28, 2003, we were able to negotiate $623,000 forgiveness of accounts payable. We had other income of $310,000 for the six months ended March 26, 2004. This income was primarily related to a gain on the sale of excess equipment. We had other income of $105,000 for the six months ended March 28, 2003. This income was primarily related to a gain on the sale of our Alabama operation. We have recorded no benefit from income tax as a result of our cumulative net losses, and accordingly, we have a large valuation allowance against our net deferred tax asset including the net operating loss carry-forward. Net income for the six months ended March 26, 2004 was $0.3 million versus a net income of $1.0 million in the comparable period of the prior fiscal year. Diluted income per share was $0.03 as compared to diluted income per share of $0.15 in the comparable period of the prior fiscal year. Discontinued Operations - ----------------------- On February 28, 2003, IEC sold its Edinburg, Texas facility and completed its restructuring initiative. As a result, IEC recorded a $184,000 restructuring benefit due to certain facility payments accrued in a prior fiscal year that will no longer be paid out. Page 11 of 15 Liquidity and Capital Resources - ------------------------------- Cash decreased to $0.1 million at March 26, 2004, from $0.8 million at September 30, 2003. Availability under our line of credit was $2.4 million on March 26, 2004. As reflected in the Consolidated Statements of Cash Flows for the six months ending March 26, 2004, net cash from operating activities was ($0.3 million) and cash from investing activities was $0.3 million. Cash was used to pay down bank debt ($0.7 million). Depreciation for the six month periods ending March 26, 2004 and March 28, 2003 was $0.6 million and $0.8 million, respectively. High sales in the last month of the current quarter resulted in a $0.8 million increase in accounts receivable. Inventory levels increased by $0.5 million, and accounts payable increased by $0.6 million. Both changes are due to materials purchased in anticipation of April 2004 production needs. We currently have a $4,450,000 Senior Secured Facility (the "Facility") and a $2,200,000 Secured Term Loan (the "Term Loan"). The Facility, which matures on January 14, 2006, bears interest at the rate of prime plus 2%. It involves a revolving line of credit for up to $3,850,000 based upon advances on eligible accounts receivable and inventory and a term loan of $600,000, secured by machinery and equipment, to be amortized over a 36 month period. The Term Loan is secured by a general security agreement, and indirectly by the assignment of a certain promissory note and a first mortgage on the IEC plant in Newark, New York. It is payable with interest at prime plus 1.5% in monthly installments over a period of 3 years, maturing on January 14, 2006. $0, $367,000, and $917,000 were outstanding at March 26, 2004 under the revolving line of credit with Keltic, the term loan with Keltic and the SunTrust loan, respectively. The financing agreements contain various affirmative and negative covenants including, among others, limitations on the amount available under the revolving line of credit relative to the borrowing base, capital expenditures, fixed charge coverage ratios, and minimum earnings before interest, taxes, depreciation and amortization (EBITDA). We are in compliance with these covenants. Application of Critical Accounting Policies - ------------------------------------------- Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies. Critical accounting policies for us include revenue recognition, impairment of long-lived assets, accounting for legal contingencies and accounting for income taxes. We recognize revenue in accordance with Staff Accounting Bulletin No.101, "Revenue Recognition in Financial Statements." Sales are recorded when products are shipped to customers. Provisions for discounts and rebates to customers, estimated returns and allowances and other adjustments are provided for in the same period the related sales are recorded. We evaluate our long-lived assets for financial impairment on a regular basis in accordance with Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." We evaluate the recoverability of long-lived assets not held for sale by measuring the carrying amount of the assets against the estimated discounted future cash flows associated with them. At the time such evaluations indicate that the future discounted cash flows of certain long-lived assets are not sufficient to recover the carrying value of such assets, the assets are adjusted to their fair values. We are subject to various legal proceedings and claims, the outcomes of which are subject to significant uncertainty. Statement of Financial Accounting Standards No. 5, "Accounting for Contingencies", requires that an estimated loss from a loss contingency should be accrued by a charge to income if it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. Page 12 of 15 Disclosure of a contingency is required if there is at least a reasonable possibility that a loss has been incurred. We evaluate, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. Changes in these factors could materially impact our financial position or our results of operations. Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," establishes financial accounting and reporting standards for the effect of income taxes. The objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in an entity's financial statements or tax returns. Judgment is required in assessing the future tax consequences of events that have been recognized in our financial statements or tax returns. Fluctuations in the actual outcome of these future tax consequences could materially impact our financial position or our results of operations Impact of Inflation - ------------------- The impact of inflation on our operations has been minimal due to the fact that we are able to adjust its bids to reflect any inflationary increases in costs. New Pronouncements - ------------------ In November 2002, the EITF reached a consensus on issue 00-21, "Revenue Arrangements with Multiple Deliverables" ("EITF 00-21"). EITF 00-21 addresses revenue recognition on arrangements encompassing multiple elements that are delivered at different points in time, defining criteria that must be met for elements to be considered to be a separate unit of accounting. If an element is determined to be a separate unit of accounting, the revenue for the element is recognized at the time of delivery. EITF 00-21 is effective for revenue arrangements entered into in fiscal periods beginning after June 15, 2003. We adopted this standard on October 1, 2003 with no impact on our financial position, results of operations or cash flow. Item 3 -- Quantitative and Qualitative Disclosures About Market Risk ---------------------------------------------------------- Quantitative and Qualitative Disclosures about Market Risk represents the risk of loss that may impact the consolidated financial position, results of operations or cash flows of IEC due to adverse changes in financial rates. We are exposed to market risk in the area of interest rates. One exposure is directly related to its Term Loan and Revolving Credit borrowings under the Credit Agreement, due to their variable interest rate pricing. Management believes that interest rate fluctuations will not have a material impact on IEC's results of operations. Item 4 -- Controls and Procedures ----------------------- An evaluation was performed under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q as required by Rule 13a-15 under the Securities Exchange Act of 1934 (the "Exchange Act"). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of the end of the period covered by the Quarterly Report on 10-Q to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time period specified in the SEC rules and forms. In connection with the evaluation described above, our management, including our Chief Executive Officer and Chief Financial Officer, identified no change in our internal control over financial reporting that occurred during our fiscal quarter ended March 26, 2004, and that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting. Page 13 of 15 Forward-looking Statements - -------------------------- Forward-looking statements in this Form 10-Q include, without limitation, statements relating to the Company's plans, future prospects, strategies, objectives, expectations, intentions and adequacy of resources and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements may be identified by their use of words like "plans", "expects", "aims", "believes", "projects", "anticipates", "intends", "estimates", "will", "should", "could", and other expressions that indicate future events and trends. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievement of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These factors include, among others, the following: general economic and business conditions, the timing of orders and shipments, availability of material, product mix, changes in customer requirements and in the volume of sales to principal customers, competition and technological change, the ability of the Company to control manufacturing and operating costs, and satisfactory relationships with vendors. The Company's actual results of operations may differ significantly from those contemplated by such forward-looking statements as a result of these and other factors, including factors set forth in the Company's Annual Report on Form 10-K for the year ended September 30, 2003 and in other filings with the Securities and Exchange Commission. PART II. OTHER INFORMATION Item 1 -- Legal Proceedings The descriptions of our legal proceedings set forth in Item 3 of our Annual Report on Form 10-K for the fiscal year ended September 30, 2003, and in note (4) to the notes to the consolidated financial statements contained herein, are incorporated herein by reference. Item 2 -- Changes in Securities None. Item 3 -- Defaults Upon Senior Securities None. Item 4 -- Submission of Matters to a Vote of Security Holders (a) The Annual Meeting of Stockholders was convened on January 21, 2004, adjourned until January 28, 2004 and further adjourned until February 19, 2004. (b) Proxies for the meeting were solicited pursuant to Regulation 14A under the Securities Exchange Act of 1934, there was no solicitation in opposition to the management's nominees as listed in the proxy statement and all of such nominees were elected. (c) At the adjourned Annual Meeting, the tabulation of the votes with respect to each nominee was as follows: Nominee Votes FOR Authority Withheld ------- --------- ------------------ David J. Beaubien 4,523,088 29,212 W. Barry Gilbert 4,533,129 19,171 Robert P.B. Kidd 4,474,729 77,571 Eben S. Moulton 4,424,042 128,258 Dermott O'Flanagan 4,511,088 41,212 James C. Rowe 4,533,129 19,171 Justin L. Vigdor 4,485,527 66,773 Page 14 of 15 Item 5 -- Other Information None. Item 6 -- Exhibits and Reports on Form 8-K a. Exhibits The following documents are filed as exhibits to this Report: 10.1 First Amendment, dated as of March 23, 2004, to the Loan Agreement, dated January 14, 2003, by and between Keltic Financial Partners, LP and IEC Electronics Corp. 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350 32.2 Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350 b. Reports on Form 8-K (i) A current report on Form 8-K was filed with the Securities and Exchange Commission on April 22, 2004. The report announced earnings for the three and six month periods ended March 26, 2004 and a press release relating to the earnings was attached thereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. IEC ELECTRONICS CORP. REGISTRANT Dated: April 22, 2004 /s/ W. BARRY GILBERT ----------------------------- W. Barry Gilbert Chairman and Chief Executive Officer Dated: April 22, 2004 /s/ BRIAN H. DAVIS ----------------------------- Brian H. Davis Chief Financial Officer and Controller Page 15 of 15 EX-10.1 3 ex10_1.txt EXHIBIT 10.1 Exhibit 10.1 FIRST AMENDMENT TO LOAN AGREEMENT FIRST AMENDMENT, dated as of March 23, 2004 (this "Amendment"), to the Loan Agreement, dated January 14, 2003, by and between KELTIC FINANCIAL PARTNERS, LP, a Delaware limited partnership ("Lender"), and IEC ELECTRONICS CORP. ("Borrower"), a corporation organized and existing pursuant to the laws of the state of Delaware. The above referenced documents and all other agreements, instruments, certificates and documents pursuant to or incident thereto or in connection therewith are herein referred to as the "Loan Documents". W I T N E S S E T H : - - - - - - - - - - - WHEREAS, Lender and Borrower are parties to that certain Loan Agreement, dated January 14, 2003 (the "Loan Agreement"); and WHEREAS, Borrower has notified Lender of certain operational changes within its business; and WHEREAS, Borrower has requested that Lender modify certain requirements of the Loan Agreement to accommodate such operational changes; and WHEREAS, Lender has agreed to modify certain provisions of the Loan Agreement, but only subject to the terms and conditions contained herein; NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the parties to this Amendment hereby agree as follows: 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to such terms in the Loan Agreement. 2. Amendments. A. Section 1.25 of the Loan Agreement is deleted in its entirety and replaced with the following: "1.25 "Fixed Charge Coverage Ratio" shall mean: (a) with respect to a fiscal quarter beginning with the fiscal quarter ending March 31, 2004 through the fiscal quarter ending December 31, 2004, the ratio of EBITDA for such fiscal quarter, plus the Carry Forward Amount for such fiscal quarter, over the sum of (i) interest and fees on Indebtedness, (ii) principal on any loans, (iii) principal on any other indebtedness, (iv) taxes, (v) cash dividends, and (vi) distributions paid on subordinated debt or equity, in each case paid of payable during such fiscal quarter, and; (b) with respect to a fiscal quarter beginning with the fiscal quarter ending March 31, 2005 and thereafter, the ratio of EBITDA for such fiscal quarter, plus the Carry Forward Amount for such fiscal quarter, over the sum of (i) interest and fees on Indebtedness, (ii) principal on any loans, (iii) principal on any other indebtedness, (iv) capital expenditures, (v) taxes, (vi) cash dividends, and (vii) distributions paid on subordinated debt or equity, in each case paid of payable during such fiscal quarter" B. Section 9.20 of the Loan Agreement is deleted in its entirety and replaced with the following: "9.20 Capital Expenditures. Make or agree to make Capital Expenditures in an amount which exceeds $50,000 for each fiscal year, beginning with the fiscal year ending September 30, 2004, provided, however, that Borrower may make or agree to make Capital Expenditures in excess of such amount without the prior consent of Lender if (i) such expenditure does not exceed $15,000 individually, and (ii) aggregate Capital Expenditures for such fiscal year does not exceed $150,000." C. Section 9.21 of the Loan Agreement is deleted in its entirety and replaced with the following: "9.21 EBITDA. Permit Borrower's EBITDA to be less than (i) $400,000 for each fiscal quarter beginning with the fiscal quarter ending March 31, 2004, through and including the fiscal quarter ending December 31, 2004, and (ii) $450,000 for each fiscal quarter beginning with the fiscal quarter ending March 31, 2005 and thereafter, in each case calculated for each fiscal quarter on an individual, non-cumulative basis." 3. Representations and Warranties. To induce Lender to enter into this Amendment, Borrower hereby represents, warrants and acknowledges that: A. The execution, delivery and performance by Borrower of this Amendment and the performance of the Loan Agreement, as amended hereby: i) are within its powers; ii) have been duly authorized by all necessary corporate action; and iii) are not in contravention of any provision of its certificate of formation, articles of incorporation or other organizational documents. B. No Defaults or Events of Default have occurred and are continuing as of the date hereof. C. This Amendment has been duly executed and delivered by or on behalf of Borrower. D. The Loan Agreement, as amended hereby, constitutes a legal, valid and binding obligation of Borrower enforceable against Borrower in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditor's rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). E. All Obligations outstanding under the Loan Agreement are duly payable in accordance with the terms of the Loan Agreement without any defense, offset, counterclaim or recoupment whatsoever. 2 F. The representations and warranties of Borrower contained in the Loan Agreement and each other Loan Document shall be true and correct on and as of the date first written above with the same effect as if such representations and warranties had been made on and as of such date, except that any such representation and warranty which is expressly made only as of a specified date need only be true as of such date. 4. Conditions Precedent. The obligations of Lender under this Amendment is subject to and conditioned upon each of the following conditions precedent: (a) Execution of this Amendment by an authorized officer(s) of Borrower. 5. No Other Consents/Waivers. Except as otherwise provided for herein, the Loan Agreement shall be unmodified and shall continue in full force and effect in accordance with its terms, and except as expressly provided for herein, this Amendment shall not be deemed to be a waiver of, or consent under, any term or condition of any Loan Document and shall not be deemed to prejudice any right or rights which Lender may now have or may have in the future under or in connection with any Loan Document or any of the instruments or agreements referred to therein, as the same may be amended from time to time. 6. Non-Waiver. Lender's agreement to enter into this Amendment is not and shall not be construed as a waiver of any current or future default under the Revolving Note, the Loan Agreement or any other Loan Document, nor shall it preclude Lender from proceeding against Borrower on any such default. This Amendment is also not a relinquishment of any rights or remedies Lender may have in connection with the Revolving Note, the Loan Agreement or any other Loan Document. 7. Waiver of Rights. By its execution of this Amendment, Borrower expressly waives any and all rights to assert a claim, counterclaim or defense which now exists against Lender arising out of or in any way connected with the Loan Agreement, the Revolving Note or any other Loan Document or in any other transaction between Lender and Borrower. The foregoing waiver shall apply to any action instituted by any of the undersigned and to any action or proceeding brought against any of the undersigned by Lender. 8. Acknowledgement of Debt. By execution of this Amendment, Borrower acknowledges that there is due and owing as of March 19, 2004 the principal sum of $366,666.62, which sums are not subject to any defense, counterclaim or set-off. 9. Further Discussions. Borrower acknowledges that discussions may take place between itself and Lender after the date hereof concerning additional modifications of the Revolving Note, the Term Loans, the Loan Agreement and the Loan Documents. Lender in its sole and absolute discretion may terminate any such discussions at any time and for any reason or no reason and Lender shall have no liability for failing to engage in or terminating any such discussions. While the parties hereto may reach preliminary agreement as to any additional modifications of one or more provisions of the Loan Agreement, the Revolving Note, the Term Loans and/or the Loan Documents, none of the undersigned shall be bound by any such agreement on any individual point until agreement is reached on every issue and the agreement on all such issues has been reduced to a written agreement signed by Lender and Borrower. Further, the Loan Agreement may only be amended by a written agreement executed by Borrower and Lender and no negotiations or other actions undertaken by Lender shall constitute a waiver of Lender's rights under this agreement, the Loan Agreement, the Revolving Note, the Term Loans or other Loan Documents except to the extent specifically set forth in a written agreement complying with the provisions of this paragraph. 3 10. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS CONFLICT OF LAW PRINCIPLES. 11. WAIVER OF JURY TRIAL. BORROWER AND LENDER ACKNOWLEDGE AND AGREE THAT ANY SUIT, ACTION OR PROCEEDING, WHETHER CLAIM OR COUNTERCLAIM, BROUGHT OR INSTITUTED BY BORROWER OR LENDER ON OR WITH RESPECT TO ANY LOANS, THE OBLIGATIONS OR THE RELEVANT DOCUMENTS OR THE DEALINGS OF THE PARTIES WITH RESPECT HERETO OR THERETO SHALL BE TRIED ONLY BY A COURT AND NOT BY A JURY AND EACH PARTY HEREBY WAIVES THE RIGHT TO TRIAL BY JURY. 12. Counterparts. This Amendment may be executed by the parties hereto on any number of separate counterparts and all said counterparts, when taken together, shall be deemed to constitute one and the same original instrument. [SIGNATURE PAGE TO FOLLOW] IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the day and year first written above. KELTIC FINANCIAL PARTNERS, LP By its General Partner, Keltic Financial Services LLC /s/ JOHN P. REILLY -------------------------------- By: John P. Reilly Title: Managing Partner IEC ELECTRONICS CORP. ------------------------------ By: Title: 4 EX-31.1 4 ex31_1.txt EXHIBIT 31.1 Exhibit 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, W. Barry Gilbert, certify that: 1. I have reviewed this quarterly report on Form 10-Q for the quarterly period ended March 26, 2004 of IEC Electronics Corp.; 2. Based on my knowledge, this quarterly 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 quarterly report; 3. Based on my knowledge, the financial statements and other financial information included in this quarterly 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 quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15 d-15(e) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) 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, c) 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 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 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 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: April 22, 2004 /s/ W. BARRY GILBERT ------------------------ W. Barry Gilbert Chairman and Chief Executive Officer Page 1 of 1 EX-31.2 5 ex31_2.txt EXHIBIT 31.2 Exhibit 31.2 Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, Brian H. Davis, certify that: 1. I have reviewed this quarterly report on Form 10-Q for the quarterly period ended March 26, 2004 of IEC Electronics Corp.; 2. Based on my knowledge, this quarterly 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 quarterly report; 3. Based on my knowledge, the financial statements and other financial information included in this quarterly 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 quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15 d-15(e) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) 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, c) 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 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 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 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: April 22, 2004 /s/ BRIAN H. DAVIS ------------------------------- Brian H. Davis Vice President, Chief Financial Officer, and Controller Page 1 of 1 EX-32.1 6 ex32_1.txt EXHIBIT 32.1 Exhibit 32.1 Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350 In connection with the quarterly report of IEC Electronics Corp., (the "Company") on Form 10-Q for the quarterly period ended March 26, 2004 as filed with Securities and Exchange Commission on the day hereof (the "Report"), I, W. Barry Gilbert, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1.) The Report fully complies with the requirement of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2.) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: April 22, 2004 /s/ W. BARRY GILBERT ------------------------ W. Barry Gilbert Chairman and Chief Executive Officer Page 1 of 1 EX-32.2 7 ex32_2.txt EXHIBIT 32.2 Exhibit 32.2 Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350 In connection with the quarterly report of IEC Electronics Corp., (the "Company") on Form 10-Q for the quarterly period ended March 26, 2004 as filed with Securities and Exchange Commission on the day hereof (the "Report"), I, Brian H. Davis, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1.) The Report fully complies with the requirement of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2.) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: April 22, 2004 /s/ BRIAN H. DAVIS ------------------------------- Brian H. Davis Vice President, Chief Financial Officer, and Controller Page 1 of 1 -----END PRIVACY-ENHANCED MESSAGE-----