IEC Electronics Corp. announced results for the fiscal fourth quarter and year ended September 30, 2015. Q4 net sales were $33.9 million.
Article continues below
This is an increase of 7.4% compared to net sales of $31.6 million during the fourth quarter of the last fiscal year.
IEC’s presentation of results for continuing operations in both the 2014 and 2015 time periods does not include Southern California Braiding (SCB), the subsidiary IEC divested at the start of the fourth quarter of 2015. SCB’s results are presented in discontinued operations.
Gross profit margin for the fourth quarter improved to 15.3% compared to 11.0% in the same quarter last year. Several factors contributed to the increase in gross profit including improved labor efficiency, successfully leveraging overhead, and lower excess and obsolete inventory expense.
Selling and administrative expenses, excluding restatement and related expenses, increased to $3.4 million from $3.2 million, primarily due to higher bad debt compared to a benefit in the same quarter last year.
Net income from continuing operations for the quarter was $0.8 million, or $0.08 per share, compared to net income from continuing operations of $1.4 million, or $0.14 per share, in the same prior year period.
During the fourth quarter of fiscal 2014, the company recorded a benefit of approximately $1.3 million, net of expenses, in connection with its resolution of directors and officers liability insurance claims.
Following the close of the fourth quarter, IEC began engaging in discussions and has subsequently reached a preliminary understanding with the SEC regarding a potential settlement of its investigation of the company’s restatement of its consolidated financial statements for the fiscal year ended September 30, 2012 and the quarter ended December 28, 2012.
As part of the proposed settlement, the company would pay a penalty of $200,000. This penalty has been fully accrued for in the fourth quarter of fiscal 2015. The company’s understanding is still preliminary and is subject to change by the SEC at any time.
Loss from discontinued operations for the quarter ended September 30, 2015, which includes results of the sale and activity related to SCB, was $0.7 million, or a loss of $0.07 per share, compared to a net loss of $0.4 million, or a loss of $0.04, for the same period in fiscal 2014.
Net income for the quarter was $0.2 million, or $0.02 per share, compared to net income of $1.0 million, or $0.10 per share, for the fourth quarter last year.
Revenues for the year ended September 30, 2015 increased 5.1% to $127.0 million compared to revenues of $120.8 million in the prior year. Gross profit margin for fiscal 2015 was 12.8%, up from 11.3% in the prior year.
The increase in gross profit margin is attributed to improved efficiencies in labor and overhead. Selling and administrative expenses, excluding restatement and related expenses, increased to $16.6 million compared to $12.5 million in fiscal 2014, primarily due to expenses related to the proxy contest and resulting change of control which totaled $3.5 million.
Excluding these costs, selling and administrative expense increased $0.6 million, and represented 10.4% of sales in fiscal 2015 and in the prior fiscal year. Net loss from continuing operations for the year was $3.8 million, or $0.37 per share, compared to a net loss from continuing operations of $14.6 million or $1.49 per share, in the previous year.
Loss from discontinued operations for the year ended September 30, 2015 was $6.4 million, or a loss of $0.64 per share compared to a net loss of $0.4 million or a loss of $0.04 in fiscal 2014.
Net loss for the year was $10.2 million, or $1.01 per share, compared to a net loss of $15.1 million, or $1.53 per share, in the prior year. Backlog at September 30, 2015 was $91.6 million compared to backlog of $105.3 million at September 30, 2014.
The decline in 2015 backlog is related to the sale of SCB and a reduction in one customer’s orders as compared to last year when orders from that customer significantly ramped as it was removed from FDA hold.
2015 backlog expected to ship in the next twelve months is $91.2 million as compared to $89.1 million in 2014 year-end backlog, excluding SCB.
Subsequent to the close of the quarter, the company extended the maturity date of its revolving credit facility from January 18, 2016 to January 18, 2018. ■