UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) – February 5, 2013
IEC ELECTRONICS CORP.
(Exact Name of Registrant as Specified in its Charter)
Delaware | 0-6508 | 13-3458955 |
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
105 Norton Street, Newark, New York 14513
(Address of principal executive offices) (Zip code)
Registrant’s telephone number, including area code (315) 331-7742
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
| |
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Section 2 | Financial Information |
Item 2.02 | Results of Operations and Financial Condition |
On February 5, 2013, IEC Electronics Corp. (the “Company”) issued a press release announcing its financial results for the first quarter ended December 28, 2012. A copy of the press release is furnished as Exhibit 99.1 to this report.
The press release attached as Exhibit 99.1 references EBITDA and EBITDA per Share, which are non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP, Net Income and Diluted Earnings per Share, respectively, is provided in the attachment to the release, included in Exhibit 99.1.
These non-GAAP financial measures should not be viewed in isolation as a measure of the Company’s profitability or liquidity. They are in addition to, and are not a substitute for, financial measures under GAAP. EBITDA and EBITDA per share may be different from non-GAAP financial measures used by other companies, and may not be comparable to similarly titled measures reported by other companies. Further, the Company may utilize other measures to illustrate performance in the future. Non-GAAP financial measures have limitations since they do not reflect all of the amounts associated with the Company’s results of operations as determined in accordance with GAAP.
The Company defines EBITDA as earnings before interest, taxes, depreciation and amortization. EBITDA per share presents EBITDA on a diluted per share basis. EBITDA does not take into account working capital requirements, capital expenditures, debt service requirements and other commitments, and accordingly, EBITDA is not necessarily indicative of amounts that may be available for discretionary use. Although per share EBITDA does not directly depict the amount that accrues to stockholder benefit, the Company views EBITDA as a useful measure of operating performance given the Company’s strong operating margins and large net operating loss carryforward (NOL). Additionally, the Company presents EBITDA as a supplemental measure because: (i) it is a basis upon which the Company assesses its liquidity position and performance; (ii) the Company believes that investors will find the data useful in assessing its ability to service and/or incur indebtedness; and (iii) certain covenants in the Company’s credit facilities are tied to similar measures. The Company believes that EBITDA, when considered with both the Company’s GAAP results and the reconciliation to operating income, provides a more complete understanding of the Company’s business than could be obtained absent this disclosure.
The information in this Form 8-K and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in such filing.
Neither the filing or furnishing of any exhibit to this report nor the inclusion in such exhibit of a reference to the Company’s Internet address shall, under any circumstances, be deemed to incorporate the information available at such address into this report. The information available at the Company’s Internet address is not part of this report.
Section 9 | Financial Statements and Exhibits |
Item 9.01 | Financial Statements and Exhibits |
(d) Exhibits
Exhibit 99.1 | Press Release issued by IEC Electronics Corp. dated February 5, 2013 |
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 hereunto duly authorized.
IEC Electronics Corp. | |||
(Registrant) | |||
Date: February 5, 2013 | By: | /s/ Vincent A. Leo | |
Vincent A. Leo | |||
Chief Financial Officer | |||
EXHIBIT INDEX
Exhibit 99.1 | Press Release issued by IEC Electronics Corp. dated February 5, 2013 |
Exhibit 99.1
105 Norton Street • Newark, NY 14513 • Ph: (315) 331-7742 • Fax: (315) 331-3547 • www.iec-electronics.com
IEC Announces Results for the First Quarter of Fiscal 2013
Newark, NY – February 5, 2013 – IEC Electronics Corp. (NYSE MKT: IEC) announced its unaudited results for the first quarter of fiscal 2013 ending December 28, 2012.
The Company reported revenue of $33.0 million for the quarter and net income of $239 thousand, or $0.02 per diluted share. This compares to revenue in the prior year first quarter of $33.9 million and net income of $948 thousand, or $0.09 per diluted share, of which $571 thousand of the net income, or $0.06 per diluted share was associated with the clawback arising from our Southern California Braiding acquisition in December of 2010.
W. Barry Gilbert, Chairman of the Board and CEO, stated, “Q1 of 2013 was disappointing. Entering the quarter we expected to exceed our 1Q fiscal 2012 and our 4Q fiscal 2012 performance, despite a shifting mix of business and softening demand from some of our industrial customers. At the time, we expected that some new programs, which were ramping up, would absorb much of the envisioned shortfall.
“As the quarter progressed, the forecasted customer softness did occur. Additionally, we also experienced an unexpected, major technical delay in one of our new customer product ramps. We worked with our customer to resolve the design/manufacturing problems and expect to recover the lost volume and likely exceed our expectations over the balance of the year. With the technical issues now resolved, we anticipate that this customer’s project will advance as planned and we believe this customer will become a formidable partner for the company moving forward.
“Our operations in the western half of the United States, which primarily support our military and aerospace customers, did quite well in comparison to both last quarter and to Q1 of the previous year. However, the increase was not enough to offset the shortfall at our Newark facility.
"As previously announced, I have lowered my sales growth forecast range for fiscal 2013 to 6% to 9% from 9% to 14%. Some of our key Industrial customers who saw strong international demand for their products last year are experiencing a softening in demand this year. We do not see this changing anytime soon. However, we do anticipate an increase in demand from our military and aerospace customers. Beyond advancing some existing orders and replacing those orders with new orders, we have won some unannounced programs and are in the final stages of securing other important programs. These are programs we expect to last for many years.
“Two weeks ago we were pleased to announce the refinancing of our variable interest rate debt with M&T (Manufacturers and Traders Bank) into long-term fixed rate debt. We received excellent rates for a ten-year, long-term swap and nine-year term debt. We appreciate M&T’s confidence in us. We have substantially reduced our debt since the SCB acquisition two years ago and have brought it to a level that made sense for us to fix our rates for the long term. Having said that, our debt increased in Q1 of 2013 as a result of the weaker sales and the build up of inventory. We expect this to come into line over the next couple of quarters.
“In conclusion, we had a difficult quarter, and periodically that will happen. Our perspective has not changed and we view our future to be quite bright. That said it does not diminish our, nor your, disappointment in this past quarter’s performance. My priority item, beyond continued company growth, is to bring our gross profit percentage back to the appropriate level of 19% and restore our operating profit to 9%.”
Conference Call
IEC will host a conference call to discuss the first quarter of fiscal 2013, today, February 5, 2013 at 10:00 a.m. Eastern time. The conference call may be accessed in the U.S. and Canada by dialing toll-free 1-877-407-9210. International callers may access the call by dialing 1-201-689-8049.A replay of the teleconference will be available for 30 days after the call and may be accessed domestically by dialing 1-877-660-6853 and international callers may dial 1-201-612-7415. Callers must enter conference i.d. number 408419.
To access the live webcast, log onto the IEC website at http://www.iec-electronics.com. The webcast can also be accessed at http://www.InvestorCalendar.com. An online replay will be available shortly after the call.
About IEC Electronics
IEC Electronics Corporation is a premier provider of electronic manufacturing services ("EMS") to advanced technology companies primarily in the military and aerospace, medical, industrial and computing sectors. The Company specializes in the custom manufacture of high reliability, complex circuit cards, system level assemblies, a wide array of custom cable and wire harness assemblies, precision sheet metal products and advanced research and testing services. As a full service EMS provider, IEC is a world-class ISO 9001:2008, AS9100 and ISO13485 certified company. The AS9100 certification enables IEC to serve the military and commercial aerospace markets. The ISO13485 certification supports the quality requirements of medical device markets. The Company is also AC7120 Nadcap accredited for electronics manufacturing to support the most stringent quality requirements of the aerospace industry, as well as ITAR registered and NSA approved under the COMSEC standard. Dynamic Research and Testing Laboratories (DRTL), the Company’s newest business unit, is an ISO 17025 accredited laboratory specializing in the testing and detection of counterfeit electronic parts, as well as Component Risk Mitigation and advanced failure analysis. IEC Electronics is headquartered in Newark, NY (outside of Rochester) and also has operations in Victor, NY, Rochester, NY, Albuquerque, NM and Bell Gardens, CA. Additional information about IEC can be found on its web site at www.iec-electronics.com
The foregoing, including any discussion regarding the Company's future prospects, contains certain forward-looking statements that involve risks and uncertainties, including uncertainties associated with economic conditions in the electronics industry, particularly in the principal industry sectors served by the Company, changes in customer requirements and in the volume of sales to principal customers, competition and technological change, the ability of the Company to control manufacturing and operating costs, the ability of the Company to develop and maintain satisfactory relationships with vendors, and the ability of the Company to efficiently integrate acquired companies into its business. The Company's actual results of operations may differ significantly from those contemplated by any forward-looking statements as a result of these and other factors, including factors set forth in the Company's 2012 Annual Report on Form 10-K and in other filings with the Securities and Exchange Commission.
Contact: | Vincent Leo | John Nesbett or Jennifer Belodeau |
CFO | Institutional Marketing Services | |
IEC Electronics Corp. | (203)972-9200 | |
(315)332-4308 | jnesbett@institutionalms.com | |
VLeo@iec-electronics.com | jbelodeau@institutionalms.com |
IEC ELECTRONICS CORP - CONSOLIDATED | ||
BALANCE SHEET | ||
DEC 28, 2012 AND SEP 30, 2012 | ||
(In Thousands) | ||
DEC 28, 2012 | SEP 30, 2012 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash | 2,778 | 2,662 | ||||||
Accounts Receivable | 20,279 | 23,193 | ||||||
Inventories | 21,898 | 19,348 | ||||||
Deferred Income Taxes | 1,366 | 1,365 | ||||||
Other Current Assets | 753 | 401 | ||||||
Total Current Assets | 47,074 | 46,969 | ||||||
NET FIXED ASSETS | 17,318 | 17,120 | ||||||
NON-CURRENT ASSETS | ||||||||
Goodwill | 13,810 | 13,810 | ||||||
Intangible Assets | 5,398 | 5,511 | ||||||
Deferred Income Taxes | 5,392 | 5,433 | ||||||
Other Non-Current Assets | 107 | 121 | ||||||
TOTAL ASSETS | 89,099 | 88,964 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Short Term Borrowings | 3,380 | 6,533 | ||||||
Accounts Payable | 12,360 | 15,697 | ||||||
Accrued Payroll and Related Taxes | 1,991 | 2,676 | ||||||
Other Accrued Expenses | 755 | 946 | ||||||
Other Current Liabilities | 90 | 146 | ||||||
Total Current Liabilities | 18,576 | 25,998 | ||||||
LONG TERM DEBT | 28,227 | 21,104 | ||||||
TOTAL LIABILITIES | 46,803 | 47,102 | ||||||
STOCKHOLDERS’ EQUITY | ||||||||
Authorized - 50,000,000 shares | ||||||||
Issued – 11,026,733 Outstanding – 10,011,275 | ||||||||
Common stock, par value $.01 per share | 110 | 109 | ||||||
Treasury Shares at Cost - 1,015,458 shares | (1,435 | ) | (1,435 | ) | ||||
Additional Paid-in Capital | 43,269 | 43,075 | ||||||
Retained Earnings | 352 | 113 | ||||||
TOTAL STOCKHOLDERS’ EQUITY | 42,296 | 41,862 | ||||||
TOTAL LIABILITIES & EQUITY | 89,099 | 88,964 |
IEC ELECTRONICS CORP - CONSOLIDATED
STATEMENT OF INCOME
FOR QUARTER END & YTD DEC 28, 2012 AND DEC 30, 2011
(In Thousands)
ACTUAL | ACTUAL | ACTUAL | ACTUAL | |||||||||||||
QUARTER | QUARTER | YTD | YTD | |||||||||||||
DEC 28, 2012 | DEC 30, 2011 | DEC 28, 2012 | DEC 30, 2011 | |||||||||||||
Sales | 32,989 | 33,859 | 32,989 | 33,859 | ||||||||||||
Cost of Sales | 28,285 | 28,372 | 28,285 | 28,372 | ||||||||||||
Gross Profit | 4,704 | 5,487 | 4,704 | 5,487 | ||||||||||||
Less: Operating Expenses | ||||||||||||||||
Selling & Administrative Expenses | 4,046 | 4,533 | 4,046 | 4,533 | ||||||||||||
Operating Profit | 658 | 954 | 658 | 954 | ||||||||||||
Interest and Financing Expense | 279 | 353 | 279 | 353 | ||||||||||||
Other (Income)/Expense | - | (902 | ) | - | (902 | ) | ||||||||||
Net Income before Income Taxes | 379 | 1,503 | 379 | 1,503 | ||||||||||||
Provision for Income Tax | 140 | 555 | 140 | 555 | ||||||||||||
Net Income | 239 | 948 | 239 | 948 | ||||||||||||
Basic Earnings Per Share | $ | 0.02 | $ | 0.10 | $ | 0.02 | $ | 0.10 | ||||||||
Diluted Earnings Per Share | $ | 0.02 | $ | 0.09 | $ | 0.02 | $ | 0.09 | ||||||||
Basic Shares | 9,647,210 | 9,645,942 | 9,647,210 | 9,645,942 | ||||||||||||
Diluted Shares | 9,968,147 | 10,004,359 | 9,968,147 | 10,004,359 |
IEC ELECTRONICS CORP - CONSOLIDATED
RECONCILIATION OF NET INCOME TO EBITDA
FOR QUARTER END & YTD DEC 28, 2012 & DEC 30, 2011
ACTUAL | ACTUAL | ACTUAL | ACTUAL | |||||||||||||
QUARTER | QUARTER | YTD | YTD | |||||||||||||
DEC 28, 2012 | DEC 30, 2011 | DEC 28, 2012 | DEC 30, 2011 | |||||||||||||
Net Income | 239 | 948 | 239 | 948 | ||||||||||||
Provision for / (benefit from) Income Tax | 140 | 555 | 140 | 555 | ||||||||||||
Depreciation & Amortization Expense | 1,140 | 987 | 1,140 | 987 | ||||||||||||
Net Interest Expense / (Income) | 279 | 353 | 279 | 353 | ||||||||||||
EBITDA | 1,798 | 2,843 | 1,798 | 2,843 | ||||||||||||
Basic Earnings per Share | 0.02 | 0.10 | 0.02 | 0.10 | ||||||||||||
Basic EBITDA per Share | 0.19 | 0.29 | 0.19 | 0.29 | ||||||||||||
Diluted Earnings per Share | 0.02 | 0.09 | 0.02 | 0.09 | ||||||||||||
Diluted EBITDA per Share | 0.18 | 0.28 | 0.18 | 0.28 | ||||||||||||
Basic Shares | 9,647,210 | 9,645,942 | 9,647,210 | 9,645,942 | ||||||||||||
Diluted Shares | 9,968,147 | 10,004,359 | 9,968,147 | 10,004,359 |