IEC Electronics Posts Q3 Results
IEC Electronics Corp. (NYSE American: IEC) today announced results for the fiscal 2019 third quarter and nine months ended June 28, 2019.
IEC reported revenues of $40.3 million for the third quarter of fiscal 2019, an increase of 35.4% as compared to revenues of $29.8 million for the fiscal 2018 third quarter. Gross margin for the third quarter of fiscal 2019 was 13.9% compared to 11.3% in the same quarter last year. Selling and administrative expenses were $3.7 million in the third quarter of fiscal 2019, or 9.2% of sales, as compared to $2.8 million, or 9.5% percent of sales, in the third quarter of fiscal 2018. The Company reported net income of $1.2 million, or $0.12 per basic share and $0.11 per diluted share for the third quarter of fiscal 2019, compared to net income of $0.2 million, or $0.02 per basic and diluted share in the third quarter of fiscal 2018.
Revenues for the first nine months ended June 28, 2019 increased 36.7% to $113.1 million as compared to $82.7 million for the first nine months of fiscal 2018. Gross margin for the first nine months of fiscal 2019 improved to 13.5% as compared to 11.7% in the first nine months of fiscal 2018. Selling and administrative expenses were $10.4 million during the first nine months of fiscal 2019 but decreased as a percentage of sales to 9.2%, as compared to $8.5 million or 10.3% of sales for the first nine months of fiscal 2018. Net income for the first nine months of fiscal 2019 was $3.0 million, or $0.28 per basic and diluted share, compared to $1.3 million, or $0.12 per basic and diluted share during the first nine months of fiscal 2018. Excluding a $0.10 one-time tax benefit during the first nine months of fiscal 2018, net income was $0.02 per basic and diluted share.
Jeffrey T. Schlarbaum, President and CEO of IEC Electronics commented, “This was a breakthrough quarter for IEC, highlighted by revenue of $40.3 million, representing growth of 35% year over year, as well as an 8% increase sequentially compared to the second quarter of fiscal 2019. Gross margin improved to 13.9%, which translated into improved net income. In addition, our sales growth continues to be strong, as evidenced by backlog growth of more than 64% since the end of fiscal 2018 and a book to bill ratio of 2.5:1.
“Our third quarter performance reflects the changing dynamics of our Company. During the past few years we’ve restored customer confidence as a reliable and efficient manufacturing partner for high complexity products in highly regulated markets. As a result of these efforts, we are winning more programs and seeing longer term engagements. We continue to invest in ensuring that we have a highly skilled workforce in place and during the third quarter we again added to our employee base, continuing our practice of hiring and training skilled team members so that we may efficiently convert backlog to production. While the component shortage has abated in certain segments of our industry, we continue to see some tightness in the supply chain for the parts required for the high complexity programs we support. Nonetheless, we continue to adapt our operating model to ensure we have the right materials and people on hand to meet our customers’ expectations.”
Mr. Schlarbaum continued, “Following the close of the third quarter, we announced that our Analysis and Testing Lab has qualified to expand its services to the Defense Logistics Agency (“DLA”) as a suitable equipped laboratory as part of the agency’s Qualified Testing Supplier List (“QTSL”). Our lab has always been a unique on-site service for our customers, whether for use in root-cause analysis or counterfeit component risk mitigation. With this expanded service, we can seamlessly test and transfer parts into the manufacturing facility, saving time and money for our customers. This is an exciting development for IEC, enabling us to serve more customers and programs with state-of-the-art testing for counterfeits and other issues and expanding our ability to minimize supply chain risk for the life-saving and mission critical products we support.
“With our backlog growth and the visibility we have today, we are confident in our expectation of achieving revenue growth in excess of 25% in fiscal 2019. Furthermore, we believe our integrated capabilities represent a growing value proposition to our customers, positioning us well to continue to capitalize on the opportunities we’re seeing in the marketplace.”