Reading time ( words)
IEC Electronics Corp. announced results for the fiscal third quarter ended July 2, 2021 of the fiscal year ending September 30, 2021. IEC announced the signing of a definitive merger agreement with Creation Technologies Inc. under which Creation will acquire all outstanding shares of IEC for $15.35 per share in cash. For further information, please refer to the press release issued by IEC and Creation.
IEC reported revenues of $49.4 million for the third quarter of fiscal 2021, an increase of 4.2% as compared to revenues of $47.4 million for the third quarter of the year ended September 30, 2020 (“fiscal 2020”). Gross profit for the third quarter of fiscal 2021 was $5.2 million, or 10.6% of sales, compared to gross profit of $6.6 million, or 14.0% of sales in the third quarter of fiscal 2020. Operating profit was $1.9 million for the third quarter of fiscal 2021, compared to operating profit of $3.0 million for the same quarter in the prior fiscal year. The Company reported net income of $1.0 million or $0.10 per basic share and $0.09 per diluted share for the third quarter of fiscal 2021, compared net income of $2.1 million or $0.20 per basic and diluted share in the third quarter of fiscal 2020.
For the first nine months of fiscal 2021, the Company reported revenues of $142.2 million, an increase of 4.4% compared to $136.3 million for the first nine months of fiscal 2020. Gross profit for the first nine months of fiscal 2021 was $14.3 million, or 10.0% of sales, compared to gross profit of $17.4 million, or 12.8% of sales in the same period in the prior fiscal year. Selling and administrative expenses were $10.4 million in the first nine months of fiscal 2021, or 7.3% of sales, compared to $10.2 million, or 7.5% of sales, in the first nine months of fiscal 2020. Operating profit was $3.9 million for the first nine months of fiscal 2021, compared to $7.2 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 nine months of fiscal 2021 includes $1.0 million of additional depreciation expense as compared to the first nine months of fiscal 2020. The Company reported net income of $2.2 million, or $0.21 per basic share and $0.20 per diluted share for the first nine months of fiscal 2021, compared to net income of $4.8 million, or $0.46 per basic share and $0.45 per diluted share in the first nine 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 $0.54 per basic share and $0.52 per diluted share in the first nine months of fiscal 2020. 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, “We were pleased to have delivered solid revenue growth during the third quarter of fiscal 2021 of $49.4 million, despite headwinds that we, and many in our industry, are experiencing related to ongoing material shortages and labor constraints. During the fiscal quarter we continued to ramp multiple exciting new programs. As we noted last fiscal quarter, given the complexity of the programs we service, the ramping process is not linear and frequently includes process development adaptations which continue to impact profitability. However, once established, we anticipate that these programs will provide considerable long-term revenue and margin opportunity for IEC. As the economy moves beyond the pandemic, we are encouraged by the increased backlog as compared to year-end fiscal 2020 and a solid book to bill ratio of 1.76:1 in the third fiscal quarter, which included a contract extension valued at more than $45 million from a longstanding customer. We believe this recent contract extension serves as a strong endorsement of our capabilities and reliability and speaks to IEC’s position in the marketplace as we pursue new customers and contracts.
“We believe we remain uniquely positioned to drive long-term growth for our shareholders. IEC is an established manufacturing partner with a proven record of success providing a vertically integrated portfolio of services to companies in attractive and growing sectors such as medical and aerospace and defense. Our 100% U.S.-based model positions IEC as the ideal partner for companies seeking the highest levels of intellectual property protection and supply chain management. We are pleased to have made solid progress throughout this challenging year to advance our leadership position and we are excited about the opportunities we are seeing to win new customers and programs as we move toward delivering an expected strong close to fiscal 2021.”