Iec Electronics (NYSE AMEX:IEC)

Full Year 2011 Results

• Revenue of $133.3 million compared to revenue of $96.7 million for fiscal 2010.
• Net income after tax was $6.8 million, or $0.68 per share, for year end 2011 compared to net income after tax of $4.7 million or $0.48 per share for fiscal 2010.
• For the quarter, the Company reported revenue of $34.9 million and net income of $2.6 million or $0.26 per diluted share. Approximately $1.1 million or $0.11 per share stems from an adjustment related to Southern California Braiding. This compares with revenue of $27.3 million and net income of $1.6 million, or $0.16 per share in the fourth quarter of the prior year.

W. Barry Gilbert, Chairman of the Board and CEO, stated, "2011 was a solid year for IEC as we continue to improve our operating performance and make strong inroads into the Medical sector. Our backlog grew substantially despite continued economic turbulence. The fiscal 2011 closing backlog was over $121.0 million as compared to a fiscal 2010 closing backlog of $91.4 million. $12.7 million of the backlog increase from fiscal 2010 was associated with the SCB acquisition made in December 2010.

"We continue to look for companies that provide a good fit with our strategic vision. Without any acquisitions, our long term annual growth goal is 17%. This year that goal will be difficult to achieve. As mentioned above, we believe we have solid Military and Aerospace platforms. However, the impasse in Congress releasing the funding is uncertain. We expect revenue growth from our existing businesses to be between 9% and 14% for fiscal 2012, and expect both our net income and EBITDA to grow commensurately. The Industrial sector is likely to remain under pressure as long as the broader economy continues to struggle. The pressure is not evenly distributed among the niches we serve, with some of our Industrial customers growing quite rapidly. Our growth in the Medical sector is most encouraging and we believe we can continue to expand our presence in that market."

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

NEWARK, NY--(Marketwire - Sep 22, 2011) - IEC Electronics Corp. (NYSE Amex: IEC) announces that it has received an order valued at approximately $6.7 million from a Fortune 100 industrial customer. Deliveries are expected to commence either late in the first quarter or early in the second quarter of fiscal 2012.

W. Barry Gilbert, Chairman of the Board and CEO, stated, "We appreciate the continuing confidence of this longstanding customer in our quality standards and on time performance, as demonstrated by their placement of this additional order with us. Despite some negative reports in the press relating to the health of the economy, many of our customers continue to move forward and we're pleased to be part of their ongoing commercial programs."

Third Quarter Fiscal 2011 Results

For the quarter ended July 1, 2011 the Company reported revenue of $34,626,000 for the quarter, operating income of $2,623,000 (7.6% of sales) and net income of $1,333,000 or $0.13 per share. This compares to revenue of $26,095,000, operating income of $2,268,000 (8.7% of sales) and net income of $1,238,000 or $0.13 per share for the quarter ended June 25, 2010.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for the third quarter of fiscal 2011 was $3,483,000 or $0.35 per share, compared to $2,555,000 or $0.27 per share for the same quarter last year.

IEC reported revenue of $98,355,000, operating income of $7,909,000 and net income of $4,129,000 or $0.42 per share for the first nine months of 2011. This compares to revenue of $69,387,000, operating income of $5,565,000 and net income of $3,027,000 or $0.32 per share for the first nine months of fiscal 2010.

EBITDA for the nine month period ended July 1, 2011 totaled $9,925,000 or $1.00 per share, compared to $6,067,000 or $0.63 per share for the same period last year.

"This was a solid quarter for IEC, but not without its challenges. On the positive side our organic growth was 14% as compared to the same period in fiscal 2010, which is in line with our outlook. Our backlog continues to expand in the face of some weakening broad macro-economic news both domestically and from the Far East. Southern California Braiding recently received a $5 million order from one of its military customers, and we continue to work on a number of exciting new programs, all of which will impact fiscal 2012," said W. Barry Gilbert, Chairman and Chief Executive Officer.

Mr. Gilbert continued, "Nonetheless, the revenue growth and gross margin were somewhat disappointing. Both the growth and the margin were negatively impacted by a delay in $3 million of revenue caused by unplanned downtime in certain equipment, the delay in finalizing the federal military budget, and an unusual number of customer change orders. In addition, we experienced a shift in our product mix. The product mix which was very favorable last quarter was equally unfavorable this quarter and impacted our gross profit.

"The long term view for Southern California Braiding's future is bright. Its current performance, however, has been choppy as we work our way through integration issues such as implementing new systems and expanding communication and business process tools. Nothing we have observed has diminished our enthusiasm about this acquisition, if anything we are more excited. All the programs we were planning have been approved in the defense appropriation budget and we are likely to receive additional awards.

"We strengthened our balance sheet. However, we fell short of our goal of reducing our bank debt. We believe this is a timing issue and remain confident that our bank debt will be reduced on or ahead of our internal schedule.

"We believe that we have met the challenges before us and remain most optimistic about the Company's future prospects. We are continually building a stronger company with immense capability for our customers, our employees and our shareholders."

Second Quarter Results:

For the quarter ended April 1, 2011 the Company reported

• revenue of $35,085,000,
• operating income of $3,323,000 (9.5% of sales) and
• net income of $1,747,000 or $0.17 per share.
• This compares to revenue of $25,232,000, operating income of $1,983,000 (7.9% of sales) and net income of $1,036,000 or $0.11 per share for the quarter ended March 26, 2010

W. Barry Gilbert, Chairman of the Board and CEO, stated, "This was another good quarter. All of our important financial metrics improved and we are pleased with our progress. Most significant was the growth of operating income to 9.5% of sales versus 7.9% for the same period last year. The improvement was a combination of various factors; increased efficiency, product mix and the margin generated from our latest acquisition Southern California Braiding (SCB). Just as important, organic sales growth increased by more than 20% over the comparable period.

"We are also pleased with the performance of SCB, whose sales and income were accretive to the Company. It is important to note that during the first year after an acquisition we do not look for any real change in either income or sales from the previous year. Integrating a new company requires significant effort and cost. While SCB will be a good addition for IEC and its integration into IEC Electronics is making reasonable progress, it will take the balance of the fiscal year to complete the effort. SCB's backlog continues to grow and the cross selling opportunities are quickly showing signs of potentially being quite successful. We now expect to be ahead of our forecasted annual revenue of $130 million.

NEWARK, NY--(Marketwire - April 15, 2011) - IEC Electronics Corp. announced today that on Tuesday, May 3, 2011 it will release its financial results for the second quarter ended April 1, 2011 and host a conference call to discuss those results with investors.

The Company expects to report revenue of approximately $35 million for the quarter, up 22% from revenue of $28.6 million in the first quarter ended December 31, 2010 and almost 40% from the second quarter of 2010. 

W. Barry Gilbert, Chairman of the Board and CEO, stated, "We are pleased with the preliminary results for our second quarter and look forward to sharing our full results with shareholders."

Mr. Gilbert will lead the call and invites all interested parties to join management's discussion of the Company's financial results and other meaningful developments at 10:00am EDT on Tuesday, May 3, 2011

IEC Electronics Corp. announced its unaudited results for the first quarter of fiscal 2011 ending December 31, 2010.

• The Company reported revenue of $28.7 million for the quarter, operating income of $1,963,000 and net income of $1,049,000 or $0.11 per diluted share. This compares to revenue in the prior year first quarter of $18.1 million, operating income of $1,313,000 and net income of $754,000 or $.08 per diluted share.

W. Barry Gilbert, Chairman of the Board and CEO, stated, "As previously announced, we acquired Southern California Braiding, Inc. ("SCB") on December 17, 2010. Between December 17 and our quarter end, we incurred approximately $70,000 of transitional start-up expenses. The more time we spend with SCB the more excited we become with the prospects for this acquisition and cross selling opportunities. As it was so near the end of the reporting period, the acquisition had almost no impact on our first quarter results. We enjoyed a strong quarter with continued sales, earnings and cash flow growth. During the quarter, we also experienced some challenges introducing a number of new projects while also managing an unusual level of product mix variations, resulting in some temporary inefficiencies amounting to approximately $200,000. With these first quarter inefficiencies behind us we remain confident in our outlook for 2011."

Update from November 9, 2010

For the quarter, the Company reported

• revenue of $27.3 million compared with revenue of $18.3 million
• operating income of $2.1 million compared with operating income of $1.4 million for the same quarter of fiscal 2009.
• net income after tax was $1.6 million, or $0.17 per diluted share compared to net income after tax of $0.9 million or $0.09 per diluted share in the prior year period.

W. Barry Gilbert, Chairman of the Board and CEO, stated, “2010 was a strong year for us as we continue to improve our operating performance and make solid inroads into the Medical sector. Our backlog grew substantially despite continued economic turbulence. The fiscal 2010 closing backlog was over $90.0 million as compared to a fiscal 2009 closing backlog of $41.4 million. $20 million of the backlog increase was due to the General Technology and Celmet acquisitions made in December 2009 and July 2010 respectively. More than half of the increase was attributable to organic growth. Our backlog consists of two categories: orders and firm forecasted commitments.”

“Fiscal 2010 saw IEC successfully integrate the acquisitions of General Technology and Celmet,” Gilbert continued. “These two acquisitions have improved the strategic position of the Company by broadening our product offerings and diversifying our customer base. We continue to look for companies that could provide a good fit with our strategic vision. Without any acquisitions, we expect revenue growth from our existing business of approximately 17% for fiscal 2011, and expect both our net income and EBITDA to grow commensurately. We believe our Military and Aerospace sectors will remain strong but anticipate that the Industrial sector is likely to remain under pressure for most of 2011. Finally, we believe we can continue to expand our presence in the Medical sector, which, as mentioned above, grew nicely between 2009 and 2010.

We have aggressively added to our IEC position based on information provided in a new investor presentation. Revenue target has been increased to 35% from the original target of 17%.

NEWARK, NY--(Marketwire - December 17, 2010) - announced the acquisition of Southern California Braiding Company, Inc. (SCB), a privately held company focused on providing high reliability wire and cable products to the military and defense market. SCB is located in Bell Gardens, California.

With annual revenue of approximately $20 million, SCB serves a number of leading customers in the military and defense market. At a purchase price of $25.0 million, the acquisition is expected to be immediately accretive to IEC shareholders. The purchase price has been financed by a credit facility of approximately $24.4 million, provided by Manufacturers and Traders Bank (M&T) and $600,000 in equity.

Conference notes from the Western New York Investors Conference at the Hyatt Regency, Buffalo, New York held on Friday, September 24, 2010.

Industry

• 100% in U.S.  
• Niche: Dealing with customers who do not export technology needs overseas. This represents about 20% of a $360.0 billion industry.
• Serves the military, aerospace, industrial, medical device and high end communication markets.

Competitive Advantage: Focus is on high reliability, low volume and customers with complex needs.

• IEC manufactures complicated assemblies used in many electronic products.  Requires specialization and close cooperation.  This leads to higher margins and customer loyalty.
• Developed proprietary technology employed to test products for failure before delivery.
• Also trouble shoots products after delivery in real time through an online system with 2 million lines of code.
• Able to serve customers who have choppy demand.
• Selects customers carefully. Will make no compromises if a relationship will not make sense. Will not sacrifice margins just to obtain business. 

Growth Outlook

• All markets are growing solidly.
• Customer increasing outsourcing.
• Customers winning market share.

Forecast

• $150 million in revenues by close of 2012. 
• Will come from organic growth and acquisitions.
• Organic growth is about 17.0%.
• Expecting to be many times bigger than they are today.
• No intention to go overseas. Many companies coming home.
• Prepared for debt to equity to increase to 50%, since cash flow from operations and sufficient tax loss carry forwards can quickly bring this into line. 
• Equity for acquisitions is not out of the question if will accelerate growth.
   

W. Barry Gilbert, Chairman of the Board and CEO, stated, "This was an especially good quarter. Operating profit of over 8.5% of sales is unique in our industry. Sales growth of more than 50% and operating profit growth of more than 70% as compared to the third quarter of fiscal 2009 were especially gratifying. We continue to execute our growth strategy and enjoy the benefit of a favorable mix of products. Excluding the contribution from our acquisition of GTC, our sales growth from IEC Contract Manufacturing and IEC Wire and Cable was over 15% as compared to the same period of fiscal 2009. We expect to meet our forecasted full-year 2010 revenue of $96 million.

"GTC continues to perform well and its integration with IEC Electronics is moving along nicely. Likewise, GTC's backlog continues to grow as they have acquired a number of new programs from existing customers. As we observed last quarter, unlike IEC Contract Manufacturing and IEC Wire and Cable, whose backlog is shipped during the next four to nine months, GTC's backlog is weighted to 2011 and beyond.

"Consistent with past practice, we do not report our backlog during the year. However, our shareholders should be pleased to know that our current backlog is higher than the backlog reported in our Form 10-K for fiscal 2009.

"Our sector performance remains consistent with previous quarters. The military/aerospace sector remains strong and represents 59% of our sales for the first nine months of fiscal 2010 as compared to 55% of sales at the close of fiscal 2009. Our medical/other sector has increased from 8% of sales at the close of fiscal 2009 to 13% of sales for the first nine months of fiscal 2010. Our industrial sector though growing in absolute terms, declined slightly to 20% of sales for the first nine months of this year as compared to 24% of sales at the close of fiscal year end 2009. The turbulence in the economy impacts the industrial sector more than the others. However, we expect the sector to gain strength over the balance of the year and we envision modest continued improvement in fiscal 2011.

"In summary, our Company continues to move in the right direction and we are confident that we are creating future value for our shareholders and opportunity for our employees."

• Price = $4.70
• Trailing EPS = $0.52
• Fully-Taxed Trailing EPS = $0.32
• Fully-Taxed Implied 2010 EPS based on 2010 Net Income Company Guidance = $0.46
• P/E based on Fully-Taxed Trailing EPS = 14.68

1. IEC meets 8 out of 10 GeoBargain® Requirements
   
   

   September Fiscal Year	Requirement	Comments
   	Recent 52-week High(generally within 3 months)	Must Reach $7.69
   	30% EPS Growth Rate	Full year 2010 net income guidance implies an EPS growth rate of 43.75%
   	10% Revenue Growth	Full year 2010 guidance implies a revenue growth rate of 41.57%
   	Strong Balance Sheet/Cash Flow	As of 2009 10K
   Yes	Current Ratio is at least 2:1	2.5:1
   Yes	Debt to Equity Ratio less than 20%	5.7%
   Yes	Positive Cash Flow	$ 3.0 Million
   	Return on Equity is at least 15%	23.29%
   	Minimum Pre-tax Operating Margins of 8%	7.08% Per full year 2010 guidance
   	Preferably Under 50 Million Shares	9.55 Million shares as of 2010 10K
   	High Insider Ownership (generally greater than 15%)	>15%
   	Limited Institutional Ownership (generally less than 20%)	<20%
   	P/E Divided by Growth Rate (PEG Ratio) is Less Than 1.	0.35

   
   
2. The January 2010 Investor Presentation contains very bullish commentary:
   
   
   • The company claims that the "wind is at its back" due to increased outsourcing within select markets and today's elevated trend of customers who will be dependent upon IEC for complex jobs.
   • IEC has a solid customer base which includes Gen Electric Co (NYSE:GE), Lockheed Martin Cp (NYSE:LMT), and Goodrich Corporation (NYSE:GR).
   • Margins have been on a steady rise since its 2007 4th quarter.
   • The company has an acquisition strategy that focuses on new market penetration in high margin sectors.
   • By 2012, there is a $150 million revenue goal.
   • IEC's strategy is "to cultivate strong manufacturing partnerships with original equipment manufacturers (OEM) in the industrial, communications, medical, homeland security, and military and aerospace industries that require high reliability final assemblies".
     
     
3. IEC recently announced the completion of an acquisition that will add $25 million to revenues and be accretive to earnings per share. It is notable that no stock was issued with this acquisition, a clear sign that management is cognizant of shareholder interest.
   
   
4. The company boasted consistent growth in sales and earnings, even through the global recession.
   
   

   	Full Year 2009	Full Year 2008	Full Year 2007
   Revenue	$67.8 M	$51.1 M	$40.9 M
   EPS	$0.32	$0.11	$0.04

   
   
5. Company guidance implies this growth trend will continue.
   
   
   • Sales are forecast to increase 41.57% to $96 million
   • Pre-tax income is forecast to increase 44.68% to $6.8 million.

Potential Valuation Scenarios if the company can achieve its growth objectives

Short-Term Potential value based on fully taxed adjusted trailing EPS:

P/E 20 * $0.32 = $6.40
P/E 25 * $0.32 = $8.00

Short-term Potential value based on 2009 fully taxed adjusted Implied EPS Guidance:

P/E 15 * $0.46= $6.90

These scenarios are not intended to be investment advice, but are scenarios based on some commonly used investment guidelines. They are provided to aid investors in making their own investment decisions.

Disclosure: Long IEC

Investor Presentation filed December 29, 2009.