IEC Electronics Reports 4.7% Revenue Growth for Q2 FY2016

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EMS firm IEC Electronics Corp. today announced results for the fiscal second quarter and six months ended April 1, 2016.

For the second quarter of fiscal 2016, the company recorded net sales of $33.1 million, an increase of 4.7% compared to net sales of $31.7 million during the second quarter of the last fiscal year. Gross profit margin for the second quarter grew to 17.3% compared to 9.4% in the same quarter last year. The improved gross profit was related to higher production volume, changes in customer mix, improved labor efficiencies, and lower overhead cost. Selling and administrative expenses, excluding restatement and related expenses, decreased to $3.7 million or 11.2% of sales as compared to $6.3 million or 20% of sales in the second quarter of fiscal 2015. S&A in the second quarter of 2015 included $3.1 million in costs associated with the 2015 proxy contest and change in control. Net income for the quarter was $1.5 million, or $0.14 per share, compared to a net loss of $5.5 million, or a loss of $0.55 per share, in the prior year period. During the second quarter, the company reduced net inventory by $2.3 million compared to the first quarter of 2016 and decreased net debt by $4.4 million.

Revenues for the first six months of fiscal 2016 increased 9.3% to $66.1 million as compared to $60.5 million in the same period of fiscal 2015. Gross profit margin for the first half of 2016 grew to 17.5% as compared to 10.6% in the first half of 2015. The improved gross profit was related to higher production volume, changes in customer mix, improved labor efficiencies, and lower overhead cost. Selling and administrative expenses, excluding restatement and related expenses, decreased to $7.8 million or 11.7% of sales as compared to $9.6 million or 15.8% of sales in the first six months of fiscal 2015. S&A in the first six months of 2015 included $3.3 million in costs associated with the 2015 proxy contest and change in control. Net income for the first half of 2016 was $3 million, or $0.29 per share, compared to a net loss of $6.3 million, or a loss of $0.63 per share, in the same prior year period.

Jeffrey T. Schlarbaum, President and CEO of IEC Electronics, commented, “Our second quarter results demonstrate continued momentum, as we achieved solid revenue growth, gross margin improvement and enhanced profitability. We remain focused on capitalizing on opportunities within our high growth verticals and our revenue growth in the quarter was primarily driven by our Medical sector, which represented a higher portion of consolidated revenue. Additionally, we're pleased to have significantly lowered our S&A costs and reduced both our inventory and long-term debt during the second quarter.

“We continue to look for opportunities to broaden our customer relationships by leveraging our unique capabilities which enable us to provide life-saving and mission critical products to existing and new customers alike. IEC has a demonstrated expertise working within complex, highly regulated markets to provide specialized engineering and manufacturing solutions, which we believe positions us well for the future.”