IEC Posts Revenue of $45.4 Million in Q2; Up 2.7% YoY

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IEC reported revenues of $45.4 million for the second quarter of fiscal 2021, an increase of 2.7% as compared to revenues of $44.2 million for the second quarter of the year ended September 30, 2020 (fiscal 2020). Gross profit for the second quarter of fiscal 2021 was $3.3 million, or 7.3% of sales, compared to gross profit of $5.5 million, or 12.5% of sales in the second quarter of fiscal 2020. Operating loss was $0.2 million for the second quarter of fiscal 2021, compared to operating profit of $2.3 million for the same quarter in the prior fiscal year. The Company reported a net loss of $0.3 million or $0.03 per basic and diluted share, for the second quarter of fiscal 2021, compared net income of $1.5 million, or $0.15 per basic and $0.14 per diluted share in the second quarter of fiscal 2020.

For the first six months of fiscal 2021, the Company reported revenues of $92.8 million, an increase of 4.4% as compared to revenues of $88.9 million for the first six months of fiscal 2020. Gross profit for the first six months of fiscal 2021 was $9.1 million, or 9.8% of sales, compared to gross profit of $10.7 million, or 12.1% of sales in the first six months of fiscal 2020. Selling and administrative expenses were $7.0 million in the first six months of fiscal 2021, or 7.5% of sales, as compared to $6.5 million, or 7.3% of sales, in the first six months of fiscal 2020.  Operating profit was $2.0 million for the first six months of fiscal 2021, compared to $4.2 million for the same period in the prior fiscal year. Due primarily to the investments in both the Company’s new headquarters facility and incremental manufacturing equipment, operating profit for the first six months of fiscal 2021 includes $1.0 million of additional depreciation expense as compared to the first six months of fiscal 2020. The Company reported net income of $1.2 million, or $0.11 per basic and diluted share for the first six months of fiscal 2021, compared to net income of $2.7 million, or $0.26 per basic and $0.25 per diluted share in the first six months of fiscal 2020. As previously discussed, adjusted for the impact of a one-time inventory reserve in the first quarter of fiscal 2020, adjusted net income per common share would have been $0.34 per basic share and $0.32 per diluted share. Please see the reconciliation tables included in this release for further information regarding these non-GAAP measures.

Jeffrey T. Schlarbaum, President and CEO of IEC Electronics Corp. commented, “Second fiscal quarter results came in below expectations due to delays in ramping two high value programs. We believe we have built an infrastructure to support the conversion of much higher revenue levels that have now shifted into the second half of the fiscal year. These complex programs, which are anticipated to provide considerable long-term revenue opportunity for IEC, experienced unusual technical challenges and supply chain delays that slowed the ramp to steady production, impacting revenue and profitability for the quarter. We view this as simply a timing issue as demand for our highly technical and complex manufacturing capabilities remains strong. As we have often discussed, we are a manufacturing partner for high complexity, life-saving and mission critical industries, where there is no compromise for exact technical precision and product quality. We are working closely with our customers to manage through the ramp-up challenges experienced in the second quarter and believe our partnerships have been strengthened by IEC’s technical capability matched with a remediation know-how for complex issues like the ones encountered in the fiscal second quarter. 

“With our visibility today, we remain confident and believe we are well-positioned to drive double digit organic growth for the balance of fiscal 2021. As a 100% U.S.-based manufacturer with a full portfolio of vertically integrated production services, IEC is an attractive partner for companies across several regulated industries who are looking for the highest levels of intellectual property protection and supply chain management. We are focused on growing our leadership position and we are energized by the opportunities we’re seeing in the marketplace to add new customers and programs.”