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IEC Electronics Corp. has announced results for the fiscal 2017 second quarter and six months ended March 31, 2017.
IEC reported revenues of $21.4 million for the second quarter of fiscal 2017, a decrease of 35.5% as compared with revenues of $33.1 million in the second quarter of fiscal 2016. Sequentially, revenues remained consistent with first quarter 2017. Gross profit margin for the second quarter was 10.7% as compared to 17.3% in the same quarter last year and an increase compared to gross margin of 8.6% in the first quarter of 2017. Selling and administrative expenses decreased on a dollar basis to $2.7 million but increased as a percentage of sales to 12.5% as compared to $3.8 million or 11.3% of sales in the second quarter of fiscal 2016. The company recorded a net loss of $0.6 million or $0.06 per share, compared to net income of $1.5 million, or $0.14 per share, in the same prior year period.
Revenues for the first six months of fiscal 2017 decreased 35.9% to $42.3 million as compared to $66.1 million in the same period of fiscal 2016. Gross profit margin for the first six months of fiscal 2017 was 9.6% as compared to 17.5% in the first six months of fiscal 2016. Selling and administrative expenses decreased on a dollar basis to $5.1 million but increased as a percentage of sales to 12% as compared to $7.7 million or 11.7% of sales in the first six months of fiscal 2016. Net loss for the first six months of 2017 was $1.5 million, or $0.14 per share, compared to net income of $3.0 million, or $0.29 per share, in the same prior year period.
"Our second quarter unfolded largely as we expected, as we continued to experience downward pressure on revenues and profitability related to reduced volume from two of our key customers. As we’ve previously indicated, the volume contraction is not due to lost programs, but represents the impact of long-term strategic customers, who remain committed manufacturing partners, working through their respective end market dynamics," commented Jeffrey T. Schlarbaum, president and CEO of IEC Electronics. "We're encouraged by the new business development trends that we’re seeing and we are increasingly optimistic that volumes will return in the second half of fiscal 2017. Our restructured sales force continues to bolster our presence in our core markets and is efficiently identifying opportunities that best match our capabilities, which is having a positive impact on our sales pipeline. Hence, our pipeline increased during the second quarter and has shown continued growth, with activity from both existing and new customers. Over the past few months of fiscal 2017, we have been diligent about aligning our cost structure to match our business requirements while also retaining skilled labor to ensure that we have the support we need as volumes return. As we have indicated previously, we anticipate that the expected volume ramp in the second half of 2017 will enable us to exit this fiscal year on a path to achieve similar run rate levels to those reached in fiscal 2016.
"Debt reduction and efficient asset management remain key objectives as we continue to strengthen our balance sheet. In this regard, we are excited to announce that last week we amended our credit agreement with M&T bank to a five-year term, asset based facility which improves our borrowing capacity, reduces our interest rates and favorably reduces the complexity and scope of our covenants. This agreement demonstrates the strength of our business and the confidence of our banking partner. Overall, the improvements made in the last eighteen months have enabled us to grow our recognition in the marketplace as a leading provider of unique design and manufacturing solutions for the production of life-saving and mission critical products. We believe we are well-positioned to expand our business through the addition of new partners along with new programs from our existing customers as we look to re-establish continuous and sustained organic growth."
About IEC Electronics
IEC Electronics is a provider of electronic manufacturing services ("EMS") to advanced technology companies that produce life-saving and mission critical products for the medical, industrial, aerospace and defense sectors. The Company specializes in delivering technical solutions for the custom manufacture of complex full system assemblies by providing on-site analytical testing laboratories, custom design and test engineering services combined with a broad array of manufacturing services encompassing electronics, interconnect solutions, and precision metalworking. As a full service EMS provider, IEC holds all appropriate certifications for the market sectors it supports including ISO 9001:2008, AS9100C, ISO 13485, and Nadcap. IEC Electronics is headquartered in Newark, NY and also has operations in Rochester, NY and Albuquerque, NM. Additional information about IEC can be found here.