IEC Announces Fiscal 2020 Fourth Quarter, Year End Results

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IEC Electronics Corp. announced results for the fiscal 2020 fourth quarter and year ended September 30, 2020 (“fiscal 2020”). IEC reported revenues of $46.4 million for the fourth quarter of fiscal 2020, an increase of 5.7% as compared to revenues of $43.9 million for the fourth quarter of the year ended September 30, 2019 (“fiscal 2019”).

Gross profit for the fourth quarter of fiscal 2020 was $6.7 million, or 14.5% of sales, compared to gross profit of $6.4 million, or 14.6% of sales in the fourth quarter of fiscal 2019. Selling and administrative expenses were $3.8 million in the fourth quarter of fiscal 2020, a slight increase compared to the fourth quarter of fiscal 2019, and decreased slightly as a percent of sales to 8.2% as compared to 8.4% in the fourth quarter of fiscal 2019. Operating income was $2.9 million for the fourth quarter of fiscal 2020, an increase of $0.2 million, or 8.3% when compared to the same quarter in the prior fiscal year. The Company reported net income of $1.9 million, or $0.18 per basic and diluted share for the fourth quarter of fiscal 2020, compared to net income of $1.8 million, or $0.17 per basic and diluted share in the fourth quarter of fiscal 2019. The Company also reported operating cash inflow of $7.3 million during the fourth quarter of fiscal 2020, as compared to $1.2 million of cash flows used by operations for the same period in fiscal 2019.

For fiscal 2020, the Company reported revenues of $182.7 million, an increase of 16.4% as compared to revenues of $157.0 million for fiscal 2019. Gross profit for fiscal 2020 was $24.1 million, or 13.2% of sales, which includes the negative impact of a one-time inventory reserve of $1.0 million related to a reorganization at a customer in the medical sector, compared to gross profit of $21.6 million, or 13.8% of sales in fiscal 2019.  Adjusted for the impact of the one-time inventory reserve, taken in the first quarter of fiscal 2020, adjusted gross margin for fiscal 2020 was 13.7% of sales. Selling and administrative expenses were $14.0 million in fiscal 2020, or 7.7% of sales, as compared to $14.1 million, or 9.0%  of sales, in fiscal 2019. Operating income was $10.1 million for fiscal 2020, an increase of 33.9% when compared to the same period in the prior fiscal year. The Company reported net income of $6.8 million, or $0.65 per basic and $0.63 per diluted share for fiscal 2020, compared to net income of $4.7 million, or $0.46 per basic and $0.45 per diluted share in fiscal 2019. Adjusted for the impact of the one-time inventory reserve, taken in the first quarter of fiscal 2020, adjusted net income per common share would have been $0.72 per basic and $0.70 per diluted share for fiscal 2020. Please see the reconciliation tables included in this release for further information regarding these non-GAAP measures. The Company also reported operating cash flow of $15.0 million during fiscal 2020, as compared to $10.5 million of cash flows used by operations in fiscal 2019, an increase of over $25 million year over year.

Jeffrey T. Schlarbaum, President and CEO of IEC Electronics commented, “Our fourth fiscal quarter showed continued solid performance, closing out a strong year for IEC. At the start of fiscal 2020, we established three primary goals for our Company: to drive double-digit organic growth for the fiscal year, continue to achieve industry-leading margins and to generate operating cash flow and we delivered on all three. Our ability to reach these goals is a credit to our employees, who continued to execute our strategy despite adverse circumstances, and a testament to our growing reputation as a premier partner for the manufacture of life-saving and mission critical products.

“Our robust year-end backlog of $194.5 million is derived from a diverse range of customers. Notably, $180.2 million of the backlog is expected to ship within the next twelve months, which represents a year-over-year increase of 19.1% when compared to $151.3 million at the end of fiscal 2019. We are focused on continuing to enhance our offerings to build upon our leadership position as a 100% U.S.-based integrated manufacturing partner. We are pleased with the operational and financial success that we achieved in fiscal 2020, despite the challenges presented by the global pandemic, and we are energized by the opportunities ahead in fiscal 2021 to drive continued growth and profitability.”