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Electronics manufacturing services (EMS) provider IEC Electronics Corp. has announced results for the fiscal third quarter and nine months ended July 1, 2016.
For the third quarter of fiscal 2016, the company recorded net sales of $32.5 million, essentially flat as compared to net sales of $32.6 million in the third quarter of the last fiscal year. Gross profit margin for the third quarter grew to 16.8% compared to 14.4% in the same quarter last year. Selling and administrative expenses (excluding restatement and related expenses), decreased to $3.5 million or 10.7% of sales as compared to $3.7 million or 11.3% of sales in the third quarter of fiscal 2015. Net income for the quarter was $1.6 million, or $0.16 per share, compared to a net loss of $4.0 million, or a loss of $0.39 per share, in the prior year period. The Company incurred a loss on discontinued operations of $4.4 million in the third quarter 2015 related to its divestiture of its subsidiary Southern California Braiding ("SCB"). IEC reduced net debt by $4.7 million in the third quarter of fiscal 2016. In addition, IEC reduced net inventory by $5.6 million compared to inventory levels at year end 2015 and by $3.8 million compared to the second quarter of 2016.
Revenues for the first nine months of fiscal 2016 increased 5.9% to $98.6 million as compared to $93.1 million in the same period of fiscal 2015. Gross profit margin for the first nine months of 2016 grew to 17.3% as compared to 11.9% in the first nine months of 2015. Selling and administrative expenses (excluding restatement and related expenses), decreased to $11.2 million or 11.4% of sales as compared to $13.3 million or 14.2% of sales in the first nine months of fiscal 2015. Net income for the first nine months of 2016 was $4.6 million, or $0.45 per share, compared to a net loss of $10.3 million, or a loss of $1.03 per share, in the same prior year period.
During the quarter, IEC announced that it has been awarded a three-year, $10.2 million contract from a Tier 2 Department of Defense Supplier in support of digital tactical networking and voice communication equipment for U.S. aircraft, ground vehicles, and surface warships. The Company expects production to commence in the fourth quarter of fiscal 2016. Additionally, subsequent to the close of the third quarter, the Company announced that it has received a one-year, $3.7 million contract from a strategic aerospace & defense customer. IEC will manufacture guided missile firing system components that are utilized by a top US Government prime contractor. The program will be fulfilled at IEC's Albuquerque facility, leveraging IEC's vertically integrated manufacturing services including advanced test engineering and specialized processes for mission critical applications.
Jeffrey T. Schlarbaum, president and CEO of IEC Electronics, commented, "We're pleased to have delivered solid third quarter results that reflect improved profitability and consistent margin performance. During the quarter we further strengthened our balance sheet, significantly reducing both our long term debt and our inventory position and driving improved cash flow. Our results demonstrate our focused execution of the operational strategies we put into place eighteen months ago.
"Our initial priorities of improving our operations and regaining the confidence of our existing customers have rebuilt a solid platform, so that we may now enhance our focus on our long-term organic growth. We recently announced two new contract awards from existing customers and our ability to provide specialized engineering and manufacturing solutions that enable the production of life-saving and mission critical products is expanding our reach in the marketplace. With our operational improvements well underway, and the reestablishment of a solid balance sheet, we believe we have secured a foundation that will enable us to leverage our expertise working within complex, highly regulated markets. With our unique capabilities providing specialized engineering and manufacturing solutions, we believe we are well positioned to broaden our customer base and drive future growth," Schlarbaum concluded.
About IEC Electronics
IEC Electronics provides 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, Nadcap and IPC QML. 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.