Delaware
|
13-3458955
|
(State or other jurisdiction of incorporation or organization)
|
(IRS Employer Identification No.)
|
Common Stock, $.01 par value
|
NYSE MKT LLC
|
(Title of Class)
|
(Name of each exchange on which registered)
|
|
||
Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 1.
|
BUSINESS
|
•
|
A technology center that combines dedicated prototype manufacturing with an on-site Materials Analysis Lab, enabling the seamless transition of complex electronics from design to production.
|
•
|
In-house, custom, functional testing and troubleshooting of complex system-level assemblies in support of end-order fulfillment.
|
•
|
A laboratory that enables us to assist customers in mitigating the risk of purchasing counterfeit parts through our subsidiary, Dynamic Research and Testing Laboratories, LLC (“DRTL”).
|
•
|
Build-to-print precision sheet metal and complex wire harness assemblies supporting just-in-time delivery of critical end-market, system-level electronics.
|
•
|
A Lean/Six Sigma continuous improvement program supported by a team of Six Sigma Blackbelts delivering best-in-class results.
|
•
|
Proprietary software-driven Web Portal providing customers real-time access to a wide array of operational data.
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|
|
Years Ended
|
||
% of Sales by Sector
|
|
September 30, 2014
|
|
September 30, 2013
|
|
|
|
|
|
Aerospace & Defense (previously Military & Aerospace)
|
|
49%
|
|
51%
|
Medical
|
|
20%
|
|
20%
|
Industrial
|
|
25%
|
|
21%
|
Communications & Other
|
|
6%
|
|
8%
|
|
|
100%
|
|
100%
|
Item 1A.
|
RISK FACTORS
|
•
|
incur debt
|
•
|
incur or maintain liens
|
•
|
make acquisitions of businesses or entities
|
•
|
make investments, loans or advances
|
•
|
enter into guarantee agreements
|
•
|
engage in mergers, consolidations or certain sales of assets
|
•
|
engage in transactions with affiliates
|
•
|
pay dividends or engage in stock redemptions or repurchases
|
•
|
make capital expenditures
|
•
|
adverse changes in general economic conditions
|
•
|
natural disasters that may impede our operations, the operation of our customers’ business, or availability of manufacturing inputs from our suppliers
|
•
|
the level and timing of customer orders and the accuracy of customer forecasts
|
•
|
the capacity utilization of our manufacturing facilities and associated fixed costs
|
•
|
price competition
|
•
|
market acceptance of our customers’ products
|
•
|
business conditions in our customers’ end markets
|
•
|
our level of experience in manufacturing a particular product
|
•
|
changes in the mix of sales to our customers
|
•
|
variations in efficiencies achieved in managing inventories and fixed assets
|
•
|
fluctuations in cost and availability of materials
|
•
|
timing of expenditures in anticipation of future orders
|
•
|
changes in cost and availability of labor and components
|
•
|
our effectiveness in managing the high reliability manufacturing process required by our customers
|
•
|
failure or external breach of our information technology systems
|
•
|
the inability of our customers to adapt to rapidly changing technology and evolving industry standards, which result in short product life cycles
|
•
|
the inability of our customers to develop and market their products, some of which are new and untested
|
•
|
increased competition among our customers and their competitors, including downward pressure on pricing
|
•
|
the potential that our customers’ products may become obsolete, or the failure of our customers’ products to gain anticipated commercial acceptance
|
•
|
periods of significantly decreased demand in our customers’ markets
|
•
|
variation in demand for our customers’ products in their end markets
|
•
|
actions taken by our customers to manage their inventory
|
•
|
product design changes by our customers
|
•
|
changes in our customers’ manufacturing strategy
|
•
|
deciding on the levels of business that we will seek
|
•
|
production schedules
|
•
|
component procurement commitments
|
•
|
equipment requirements
|
•
|
personnel needs
|
•
|
other resource requirements
|
•
|
failure to integrate operations
|
•
|
loss of key personnel
|
•
|
exposure to information technology infrastructure weaknesses of acquired companies
|
•
|
failure to integrate information systems
|
•
|
failure to establish management, financial and operational controls such as adequate accounts receivable and inventory control processes
|
•
|
failure to retain the customer base of acquired businesses
|
•
|
failure to achieve initial projections established at acquisition date, including within anticipated time periods
|
•
|
diversion of management’s attention from other ongoing business concerns
|
•
|
exposure to unanticipated liabilities of acquired companies
|
•
|
additional costs and start-up inefficiencies
|
•
|
hire and retain qualified engineering and technical personnel
|
•
|
maintain and enhance our technological leadership
|
•
|
develop and market manufacturing services that meet changing customer needs
|
Item 1B.
|
UNRESOLVED STAFF COMMENTS
|
|
Age
|
|
W. Barry Gilbert
|
68
|
Chief Executive Officer and Chairman of the Board
|
Michael T. Williams
|
47
|
Vice President, Finance and Chief Financial Officer
|
Brett E. Mancini
|
45
|
Vice President of Business Development and Engineering Services
|
IEC Closing Stock Prices
|
|
Low
|
|
High
|
||||
|
|
|
|
|
||||
Fiscal Quarters
|
|
|
|
|
||||
Fourth 2014
|
|
$
|
3.97
|
|
|
$
|
4.99
|
|
Third 2014
|
|
4.25
|
|
|
4.62
|
|
||
Second 2014
|
|
3.89
|
|
|
4.71
|
|
||
First 2014
|
|
3.67
|
|
|
4.64
|
|
||
|
|
|
|
|
||||
Fourth 2013
|
|
$
|
3.09
|
|
|
$
|
4.07
|
|
Third 2013
|
|
2.92
|
|
|
5.90
|
|
||
Second 2013
|
|
5.03
|
|
|
7.20
|
|
||
First 2013
|
|
6.50
|
|
|
7.35
|
|
|
|
|
Years Ended September 30,
|
||||||||||||||||||
|
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
(amounts in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
(restated)
|
|
|
|
(restated)
|
|
(a)
|
|
(b)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
135,621
|
|
|
$
|
140,946
|
|
|
$
|
144,963
|
|
|
$
|
133,296
|
|
|
$
|
96,674
|
|
|
Gross profit
|
|
15,324
|
|
|
17,677
|
|
|
26,306
|
|
|
25,757
|
|
|
16,263
|
|
||||||
Operating profit/(loss)
|
|
(379
|
)
|
|
(13,835
|
)
|
|
10,541
|
|
|
10,389
|
|
|
7,687
|
|
||||||
Income/(loss) before income taxes
|
|
(2,192
|
)
|
|
(15,052
|
)
|
|
10,364
|
|
|
9,816
|
|
|
7,055
|
|
||||||
Provision/(benefit) for income taxes
|
|
12,879
|
|
|
(5,522
|
)
|
|
3,670
|
|
|
3,056
|
|
|
2,400
|
|
||||||
Net income/(loss)
|
|
$
|
(15,071
|
)
|
|
$
|
(9,530
|
)
|
|
$
|
6,694
|
|
|
$
|
6,760
|
|
|
$
|
4,655
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross margin as a % of sales
|
|
11.3
|
%
|
|
12.5
|
%
|
|
18.1
|
%
|
|
19.3
|
%
|
|
16.8
|
%
|
||||||
Operating profit as % of sales
|
|
(0.3
|
)%
|
|
(9.8
|
)%
|
|
7.3
|
%
|
|
7.8
|
%
|
|
8.0
|
%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income/(loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Basic
|
|
$
|
(1.53
|
)
|
|
$
|
(0.98
|
)
|
|
$
|
0.69
|
|
|
$
|
0.71
|
|
|
$
|
0.52
|
|
|
Diluted
|
|
(1.53
|
)
|
|
(0.98
|
)
|
|
0.67
|
|
|
0.68
|
|
|
0.48
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Common and common equivalent shares:
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Basic
|
|
9,827
|
|
|
9,712
|
|
|
9,664
|
|
|
9,461
|
|
|
8,990
|
|
|||||
|
Diluted
|
|
9,827
|
|
|
9,712
|
|
|
9,969
|
|
|
9,968
|
|
|
9,608
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Working capital
|
|
$
|
24,046
|
|
|
$
|
31,592
|
|
|
$
|
19,320
|
|
|
$
|
17,292
|
|
|
$
|
17,712
|
|
|
Total assets
|
|
72,996
|
|
|
88,935
|
|
|
87,898
|
|
|
85,820
|
|
|
55,682
|
|
||||||
Long-term debt (excluding current portion)
|
28,479
|
|
|
34,026
|
|
|
21,104
|
|
|
28,213
|
|
|
15,999
|
|
|||||||
Stockholders’ equity
|
|
17,405
|
|
|
31,994
|
|
|
40,796
|
|
|
33,686
|
|
|
25,419
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(a)
IEC acquired the assets of Southern California Braiding Company, Inc. on December 17, 2010.
|
|||||||||||||||||||||
(b)
IEC acquired General Technology Corporation (now IEC-Albuquerque) on December 16, 2009, and
purchased the assets of Celmet Co., Inc. on July 30, 2010. |
|
|
Three Months Ended
|
||||||
Income Statement Data
|
|
September 30,
2014 |
|
September 30,
2013 |
||||
(in thousands)
|
|
(restated)
|
|
|
||||
Net sales
|
|
$
|
35,687
|
|
|
$
|
39,122
|
|
|
|
|
|
|
|
|
||
Gross profit
|
|
3,508
|
|
|
5,454
|
|
||
Selling and administrative expenses
|
|
3,551
|
|
|
3,761
|
|
||
Impairment of goodwill and other intangibles
|
|
—
|
|
|
14,217
|
|
||
Restatement and related expenses
|
|
(1,302
|
)
|
|
625
|
|
||
Interest and financing expense
|
|
386
|
|
|
522
|
|
||
Other expense/(income)
|
|
—
|
|
|
—
|
|
||
Income/(loss) before income taxes
|
|
873
|
|
|
(13,671
|
)
|
||
Provision for/(benefit from) income taxes
|
|
(161
|
)
|
|
(5,004
|
)
|
||
Net income/(loss)
|
|
$
|
1,034
|
|
|
$
|
(8,667
|
)
|
|
|
Three Months Ended
|
||
% of Sales by Sector
|
|
September 30,
2014 |
|
September 30,
2013 |
|
|
|
|
|
Aerospace & Defense (previously Military & Aerospace)
|
|
46%
|
|
49%
|
Medical
|
|
23%
|
|
20%
|
Industrial
|
|
26%
|
|
22%
|
Communications & Other
|
|
5%
|
|
9%
|
|
|
100%
|
|
100%
|
|
|
Years Ended
|
||||||
Income Statement Data
|
|
September 30,
2014 |
|
September 30,
2013 |
||||
(in thousands)
|
|
(restated)
|
|
|
||||
Net sales
|
|
$
|
135,621
|
|
|
$
|
140,946
|
|
|
|
|
|
|
||||
Gross profit
|
|
15,324
|
|
|
17,677
|
|
||
Selling and administrative expenses
|
|
14,567
|
|
|
15,453
|
|
||
Impairment of goodwill and other intangibles
|
|
—
|
|
|
14,217
|
|
||
Restatement and related expenses
|
|
1,136
|
|
|
1,842
|
|
||
Interest and financing expense
|
|
1,795
|
|
|
1,170
|
|
||
Other expense/(income)
|
|
18
|
|
|
47
|
|
||
Income/(loss) before income taxes
|
|
(2,192
|
)
|
|
(15,052
|
)
|
||
Provision for/(benefit from) income taxes
|
|
12,879
|
|
|
(5,522
|
)
|
||
Net income/(loss)
|
|
$
|
(15,071
|
)
|
|
$
|
(9,530
|
)
|
|
|
Years Ended
|
||
% of Sales by Sector
|
|
September 30,
2014 |
|
September 30,
2013 |
|
|
|
|
|
Aerospace & Defense (previously Military & Aerospace)
|
|
49%
|
|
51%
|
Medical
|
|
20%
|
|
20%
|
Industrial
|
|
25%
|
|
21%
|
Communications & Other
|
|
6%
|
|
8%
|
|
|
100%
|
|
100%
|
|
|
Years Ended
|
||||||
Cash Flow Data
|
|
September 30,
2014 |
|
September 30,
2013 |
||||
(in thousands)
|
|
(restated)
|
|
|
||||
Cash and cash equivalents, beginning of period
|
|
$
|
2,499
|
|
|
$
|
2,662
|
|
Net cash flow from:
|
|
|
|
|
|
|
||
Operating activities
|
|
9,102
|
|
|
(4,338
|
)
|
||
Investing activities
|
|
(4,142
|
)
|
|
(5,082
|
)
|
||
Financing activities
|
|
(5,479
|
)
|
|
9,257
|
|
||
Net (decrease) increase in cash and cash equivalents
|
|
(519
|
)
|
|
(163
|
)
|
||
Cash and cash equivalents at end of period
|
|
$
|
1,980
|
|
|
$
|
2,499
|
|
|
|
Limit at
|
|
Calculated Amount At
|
|
||||||||
Debt Covenant
|
|
September 30,
2014 |
|
September 30,
2013 |
|
September 30,
2014 |
|
September 30,
2013 |
|
||||
Quarterly EBITDARS (000s)
|
|
Minimum $1,500
|
|
Minimum $1,500
|
|
$
|
2,641
|
|
|
$
|
2,354
|
|
|
Debt to EBITDARS Ratio
|
|
Not Measured
|
|
Maximum 3.50x
|
|
Not Measured
|
|
5.20x
|
|
(a)
|
|||
Fixed Charge Coverage Ratio
(b)
|
|
Not Measured
|
|
Minimum 1.00x
|
|
Not Measured
|
|
0.23x
|
|
(a)
|
(a)
|
Compliance waived.
|
(b)
|
The ratio compares (i) 12-month EBITDA plus non-cash stock compensation expense, plus permitted fiscal 2013 restatement related expenses minus unfinanced capital expenditures minus cash taxes paid (“Adjusted EBITDA”), to (ii) the sum of interest expense, principal payments, sale-leaseback payments and dividends, if any (fixed charges).
|
|
|
Three Months Ended
|
||||||
|
|
September 30,
2014 |
|
September 30,
2013 |
||||
(in thousands)
|
|
(restated)
|
|
|
|
|||
Net income/(loss)
|
|
$
|
1,034
|
|
|
$
|
(8,667
|
)
|
Restatement related expenses
(a)
|
|
—
|
|
|
—
|
|
||
Asset impairment
(b)
|
|
—
|
|
|
14,217
|
|
||
Provision for/(benefit from) income taxes
|
|
(161
|
)
|
|
(5,004
|
)
|
||
Depreciation and amortization expense
|
|
1,218
|
|
|
1,219
|
|
||
Interest expense
|
|
386
|
|
|
522
|
|
||
Non-cash stock compensation
|
|
164
|
|
|
96
|
|
||
Rent expense - M&T sale-leaseback
(c)
|
|
—
|
|
|
(29
|
)
|
||
EBITDARS
|
|
$
|
2,641
|
|
|
$
|
2,354
|
|
|
|
Three Months Ended
|
||||||
|
|
September 30,
2014 |
|
September 30,
2013 |
||||
(in thousands)
|
|
(restated)
|
|
|
|
|||
Net income/(loss)
|
|
$
|
1,034
|
|
|
$
|
(8,667
|
)
|
Restatement related expenses
(a)
|
|
—
|
|
|
—
|
|
||
Asset impairment
(b)
|
|
—
|
|
|
14,217
|
|
||
Provision for/(benefit from) income taxes
|
|
(161
|
)
|
|
(5,004
|
)
|
||
Depreciation and amortization expense
|
|
1,218
|
|
|
1,219
|
|
||
Interest expense
|
|
386
|
|
|
522
|
|
||
Non-cash stock compensation
|
|
164
|
|
|
96
|
|
||
Unfinanced capital expenditures
|
|
(512
|
)
|
|
(746
|
)
|
||
Income taxes paid
|
|
(3
|
)
|
|
—
|
|
||
Adjusted EBITDA
|
|
$
|
2,126
|
|
|
$
|
1,637
|
|
(a)
|
Net income as defined by the 2013 Credit Agreement (as amended) is adjusted to add back up to $1.1 million of legal and accounting fees associated with the Prior Restatement (all of which were added back in the third quarter of fiscal 2013). There were no restatement related expenses added back to net income for the periods presented in the reconciliation tables above.
|
(b)
|
Net income as defined by the 2013 Credit Agreement (as amended) is adjusted to exclude the effect of any non-cash loss arising from any write-up or write-down of assets.
|
(c)
|
During the fourth quarter of fiscal 2013, we were refunded a payment charged in error during the third quarter of fiscal 2013.
|
|
|
Three Months Ended
|
||||||
Income Statement Data
|
|
June 27,
2014 |
|
June 28,
2013 |
||||
(in thousands)
|
|
(restated)
|
|
|
||||
Net sales
|
|
$
|
32,992
|
|
|
$
|
35,154
|
|
|
|
|
|
|
||||
Gross profit
|
|
3,795
|
|
|
5,159
|
|
||
Selling and administrative expenses
|
|
3,195
|
|
|
3,446
|
|
||
Impairment of goodwill and other intangibles
|
|
—
|
|
|
—
|
|
||
Restatement and related expenses
|
|
102
|
|
|
1,106
|
|
||
Interest and financing expense
|
|
558
|
|
|
10
|
|
||
Other expense/(income)
|
|
—
|
|
|
(9
|
)
|
||
Income/(loss) before income taxes
|
|
(60
|
)
|
|
606
|
|
||
Provision for/(benefit from) income taxes
|
|
—
|
|
|
224
|
|
||
Net income/(loss)
|
|
$
|
(60
|
)
|
|
$
|
382
|
|
|
|
Three Months Ended
|
||
% of Sales by Sector
|
|
June 27,
2014 |
|
June 28,
2013 |
|
|
|
|
|
Aerospace & Defense (previously Military & Aerospace)
|
|
50%
|
|
47%
|
Medical
|
|
22%
|
|
21%
|
Industrial
|
|
22%
|
|
21%
|
Communications & Other
|
|
6%
|
|
11%
|
|
|
100%
|
|
100%
|
|
|
Nine Months Ended
|
||||||
Income Statement Data
|
|
June 27,
2014 |
|
June 28,
2013 |
||||
(in thousands)
|
|
(restated)
|
|
|
||||
Net sales
|
|
$
|
99,934
|
|
|
$
|
101,824
|
|
|
|
|
|
|
||||
Gross profit
|
|
11,816
|
|
|
12,223
|
|
||
Selling and administrative expenses
|
|
10,938
|
|
|
11,803
|
|
||
Impairment of goodwill and other intangibles
|
|
—
|
|
|
—
|
|
||
Restatement and related expenses
|
|
2,516
|
|
|
1,106
|
|
||
Interest and financing expense
|
|
1,410
|
|
|
648
|
|
||
Other expense/(income)
|
|
18
|
|
|
47
|
|
||
Income/(loss) before income taxes
|
|
(3,066
|
)
|
|
(1,381
|
)
|
||
Provision for/(benefit from) income taxes
|
|
13,039
|
|
|
(518
|
)
|
||
Net income/(loss)
|
|
$
|
(16,105
|
)
|
|
$
|
(863
|
)
|
|
|
Nine Months Ended
|
||
% of Sales by Sector
|
|
June 27,
2014 |
|
June 28,
2013 |
|
|
|
|
|
Aerospace & Defense (previously Military & Aerospace)
|
|
50%
|
|
51%
|
Medical
|
|
19%
|
|
19%
|
Industrial
|
|
25%
|
|
21%
|
Communications & Other
|
|
6%
|
|
9%
|
|
|
100%
|
|
100%
|
|
|
Nine Months Ended
|
||||||
Cash Flow Data
|
|
June 27,
2014 |
|
June 28,
2013 |
||||
(in thousands)
|
|
(restated)
|
|
|
||||
Cash and cash equivalents, beginning of period
|
|
$
|
2,499
|
|
|
$
|
2,662
|
|
Net cash flow from:
|
|
|
|
|
||||
Operating activities
|
|
4,045
|
|
|
(1,063
|
)
|
||
Investing activities
|
|
(3,483
|
)
|
|
(4,357
|
)
|
||
Financing activities
|
|
(2,382
|
)
|
|
5,861
|
|
||
Net (decrease) increase in cash and cash equivalents
|
|
(1,820
|
)
|
|
441
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
679
|
|
|
$
|
3,103
|
|
|
|
Limit at
|
|
Calculated Amount At
|
|
||||||||
Debt Covenant
|
|
June 27,
2014 |
|
September 30,
2013 |
|
June 27,
2014 |
|
September 30,
2013 |
|
||||
Quarterly EBITDARS (000s)
|
|
Minimum $1,500
|
|
Minimum $1,500
|
|
$
|
1,797
|
|
|
$
|
2,354
|
|
|
Debt to EBITDARS Ratio
|
|
Not Measured
|
|
Maximum 3.50x
|
|
Not Measured
|
|
5.20x
|
|
(a)
|
|||
Fixed Charge Coverage Ratio
(b)
|
|
Not Measured
|
|
Minimum 1.00x
|
|
Not Measured
|
|
0.23x
|
|
(a)
|
(a)
|
Compliance waived.
|
(b)
|
The ratio compares (i) 12-month EBITDA plus non-cash stock compensation expense, plus permitted fiscal 2013 restatement related expenses minus unfinanced capital expenditures minus cash taxes paid (“Adjusted EBITDA”), to (ii) the sum of interest expense, principal payments, sale-leaseback payments and dividends, if any (fixed charges).
|
|
|
Three Months Ended
|
||||||
|
|
June 27,
2014 |
|
September 30,
2013 |
||||
(in thousands)
|
|
(restated)
|
|
|
||||
Net income/(loss)
|
|
$
|
(60
|
)
|
|
$
|
(8,667
|
)
|
Restatement related expenses (a)
|
|
—
|
|
|
—
|
|
||
Asset impairment (b)
|
|
—
|
|
|
14,217
|
|
||
Provision for/(benefit from) income taxes
|
|
—
|
|
|
(5,004
|
)
|
||
Depreciation and amortization expense
|
|
1,208
|
|
|
1,219
|
|
||
Interest expense
|
|
558
|
|
|
522
|
|
||
Non-cash stock compensation
|
|
91
|
|
|
96
|
|
||
Rent expense - M&T sale-leaseback (c)
|
|
—
|
|
|
(29
|
)
|
||
EBITDARS
|
|
$
|
1,797
|
|
|
$
|
2,354
|
|
|
|
Three Months Ended
|
||||||
|
|
June 27,
2014 |
|
September 30,
2013 |
||||
(in thousands)
|
|
(restated)
|
|
|
|
|||
Net income/(loss)
|
|
$
|
(60
|
)
|
|
$
|
(8,667
|
)
|
Restatement related expenses (a)
|
|
—
|
|
|
—
|
|
||
Asset impairment (b)
|
|
—
|
|
|
14,217
|
|
||
Provision for/(benefit from) income taxes
|
|
—
|
|
|
(5,004
|
)
|
||
Depreciation and amortization expense
|
|
1,208
|
|
|
1,219
|
|
||
Interest expense
|
|
558
|
|
|
522
|
|
||
Non-cash stock compensation
|
|
91
|
|
|
96
|
|
||
Unfinanced capital expenditures
|
|
(369
|
)
|
|
(746
|
)
|
||
Income taxes paid
|
|
—
|
|
|
—
|
|
||
Adjusted EBITDA
|
|
$
|
1,428
|
|
|
$
|
1,637
|
|
|
|
Three Months Ended
|
||||||
Income Statement Data
|
|
March 28,
2014 |
|
March 29,
2013 |
||||
(in thousands)
|
|
(restated)
|
|
|
||||
Net sales
|
|
$
|
34,805
|
|
|
$
|
33,681
|
|
|
|
|
|
|
||||
Gross profit
|
|
4,644
|
|
|
2,899
|
|
||
Selling and administrative expenses
|
|
3,952
|
|
|
4,311
|
|
||
Restatement and related expenses
|
|
1,258
|
|
|
—
|
|
||
Interest and financing expense
|
|
492
|
|
|
359
|
|
||
Other expense/(income)
|
|
(1
|
)
|
|
56
|
|
||
Income/(loss) before income taxes
|
|
(1,057
|
)
|
|
(1,827
|
)
|
||
Provision for/(benefit from) income taxes
|
|
13,657
|
|
|
(683
|
)
|
||
Net income/(loss)
|
|
$
|
(14,714
|
)
|
|
$
|
(1,144
|
)
|
|
|
Three Months Ended
|
||
% of Sales by Sector
|
|
March 28,
2014 |
|
March 29,
2013 |
|
|
|
|
|
Aerospace & Defense (previously Military & Aerospace)
|
|
47%
|
|
50%
|
Medical
|
|
15%
|
|
18%
|
Industrial
|
|
30%
|
|
24%
|
Communications & Other
|
|
8%
|
|
8%
|
|
|
100%
|
|
100%
|
|
|
Six Months Ended
|
||||||
Income Statement Data
|
|
March 28,
2014 |
|
March 29,
2013 |
||||
(in thousands)
|
|
(restated)
|
|
|
||||
Net sales
|
|
$
|
66,942
|
|
|
$
|
66,671
|
|
|
|
|
|
|
||||
Gross profit
|
|
8,022
|
|
|
7,065
|
|
||
Selling and administrative expenses
|
|
7,744
|
|
|
8,357
|
|
||
Impairment of goodwill and other intangibles
|
|
—
|
|
|
—
|
|
||
Restatement and related expenses
|
|
2,414
|
|
|
—
|
|
||
Interest and financing expense
|
|
852
|
|
|
638
|
|
||
Other expense/(income)
|
|
18
|
|
|
57
|
|
||
Income/(loss) before income taxes
|
|
(3,006
|
)
|
|
(1,987
|
)
|
||
Provision for/(benefit from) income taxes
|
|
13,040
|
|
|
(742
|
)
|
||
Net income/(loss)
|
|
$
|
(16,046
|
)
|
|
$
|
(1,245
|
)
|
|
|
Six Months Ended
|
||
% of Sales by Sector
|
|
March 28,
2014 |
|
March 29,
2013 |
|
|
|
|
|
Aerospace & Defense (previously Military & Aerospace)
|
|
50%
|
|
53%
|
Medical
|
|
18%
|
|
19%
|
Industrial
|
|
26%
|
|
20%
|
Communications & Other
|
|
6%
|
|
8%
|
|
|
100%
|
|
100%
|
|
|
Six Months Ended
|
||||||
Cash Flow Data
|
|
March 28,
2014 |
|
March 29,
2013 |
||||
(in thousands)
|
|
(restated)
|
|
|
||||
Cash and cash equivalents, beginning of period
|
|
$
|
2,499
|
|
|
$
|
2,662
|
|
Net cash flow from:
|
|
|
|
|
||||
Operating activities
|
|
2,658
|
|
|
(268
|
)
|
||
Investing activities
|
|
(2,776
|
)
|
|
(2,688
|
)
|
||
Financing activities
|
|
(1,729
|
)
|
|
3,075
|
|
||
Net (decrease) increase in cash and cash equivalents
|
|
(1,847
|
)
|
|
119
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
652
|
|
|
$
|
2,781
|
|
|
|
Limit at
|
|
Calculated Amount At
|
|
||||||||
Debt Covenant
|
|
March 28,
2014 |
|
September 30,
2013 |
|
March 28,
2014 |
|
September 30,
2013 |
|
||||
Quarterly EBITDARS (000s)
|
|
Minimum $1,250
|
|
Minimum $1,500
|
|
$
|
796
|
|
|
$
|
2,354
|
|
|
Debt to EBITDARS Ratio
|
|
Not Measured
|
|
Maximum 3.50x
|
|
Not Measured
|
|
|
5.20x
|
|
(a)
|
||
Fixed Charge Coverage Ratio
(b)
|
|
Not Measured
|
|
Minimum 1.00x
|
|
Not Measured
|
|
|
0.23x
|
|
(a)
|
(a)
|
Compliance waived.
|
(b)
|
The ratio compares (i) 12-month EBITDA plus non-cash stock compensation expense, plus permitted fiscal 2013 restatement related expenses minus unfinanced capital expenditures minus cash taxes paid (“Adjusted EBITDA”), to (ii) the sum of interest expense, principal payments, sale-leaseback payments and dividends, if any (fixed charges).
|
|
|
Three Months Ended
|
||||||
|
|
March 28,
2014 |
|
September 30,
2013 |
||||
(in thousands)
|
|
(restated)
|
|
|
||||
Net income/(loss)
|
|
$
|
(14,714
|
)
|
|
$
|
(8,667
|
)
|
Restatement related expenses (a)
|
|
—
|
|
|
—
|
|
||
Asset impairment (b)
|
|
—
|
|
|
14,217
|
|
||
Provision for/(benefit from) income taxes
|
|
13,657
|
|
|
(5,004
|
)
|
||
Depreciation and amortization expense
|
|
1,224
|
|
|
1,219
|
|
||
Interest expense
|
|
492
|
|
|
522
|
|
||
Non-cash stock compensation
|
|
137
|
|
|
96
|
|
||
Rent expense - M&T sale-leaseback (c)
|
|
—
|
|
|
(29
|
)
|
||
EBITDARS
|
|
$
|
796
|
|
|
$
|
2,354
|
|
|
|
Three Months Ended
|
||||||
|
|
March 28,
2014 |
|
September 30,
2013 |
||||
(in thousands)
|
|
(restated)
|
|
|
||||
Net income/(loss)
|
|
$
|
(14,714
|
)
|
|
$
|
(8,667
|
)
|
Restatement related expenses (a)
|
|
—
|
|
|
—
|
|
||
Asset impairment (b)
|
|
—
|
|
|
14,217
|
|
||
Provision for/(benefit from) income taxes
|
|
13,657
|
|
|
(5,004
|
)
|
||
Depreciation and amortization expense
|
|
1,224
|
|
|
1,219
|
|
||
Interest expense
|
|
492
|
|
|
522
|
|
||
Non-cash stock compensation
|
|
137
|
|
|
96
|
|
||
Unfinanced capital expenditures
|
|
(1,311
|
)
|
|
(746
|
)
|
||
Income taxes paid
|
|
(12
|
)
|
|
—
|
|
||
Adjusted EBITDA
|
|
$
|
(527
|
)
|
|
$
|
1,637
|
|
|
|
Three Months Ended
|
||||||
Income Statement Data
|
|
December 27,
2013 |
|
December 28,
2012 |
||||
(in thousands)
|
|
(restated)
|
|
(restated)
|
||||
Net sales
|
|
$
|
32,138
|
|
|
$
|
32,989
|
|
|
|
|
|
|
||||
Gross profit
|
|
3,378
|
|
|
4,165
|
|
||
Selling and administrative expenses
|
|
3,791
|
|
|
4,046
|
|
||
Impairment of goodwill and other intangibles
|
|
—
|
|
|
—
|
|
||
Restatement and related expenses
|
|
1,156
|
|
|
—
|
|
||
Interest and financing expense
|
|
360
|
|
|
279
|
|
||
Other expense/(income)
|
|
19
|
|
|
—
|
|
||
Income/(loss) before income taxes
|
|
(1,948
|
)
|
|
(160
|
)
|
||
Provision for/(benefit from) income taxes
|
|
(617
|
)
|
|
(59
|
)
|
||
Net income/(loss)
|
|
$
|
(1,331
|
)
|
|
$
|
(101
|
)
|
|
|
Three Months Ended
|
||
% of Sales by Sector
|
|
December 27,
2013 |
|
December 28,
2012 |
|
|
|
|
|
Aerospace & Defense (previously Military & Aerospace)
|
|
53%
|
|
57%
|
Medical
|
|
20%
|
|
20%
|
Industrial
|
|
22%
|
|
16%
|
Communications & Other
|
|
5%
|
|
7%
|
|
|
100%
|
|
100%
|
|
|
Three Months Ended
|
||||||
Cash Flow Data
|
|
December 27,
2013 |
|
December 28,
2012 |
||||
(in thousands)
|
|
|
|
|
||||
Cash and cash equivalents, beginning of period
|
|
$
|
2,499
|
|
|
$
|
2,662
|
|
Net cash flow from:
|
|
|
|
|
||||
Operating activities
|
|
3,259
|
|
|
(2,676
|
)
|
||
Investing activities
|
|
(2,270
|
)
|
|
(1,211
|
)
|
||
Financing activities
|
|
(1,755
|
)
|
|
4,003
|
|
||
Net (decrease) increase in cash and cash equivalents
|
|
(766
|
)
|
|
116
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
1,733
|
|
|
$
|
2,778
|
|
|
|
Limit at
|
|
Calculated Amount At
|
|
||||||||
Debt Covenant
|
|
December 27,
2013 |
|
September 30,
2013 |
|
December 27,
2013 |
|
September 30,
2013 |
|
||||
Quarterly EBITDARS (000s)
|
|
Minimum $1,500
|
|
Minimum $1,500
|
|
$
|
(243
|
)
|
|
$
|
2,354
|
|
|
Debt to EBITDARS Ratio
|
|
Maximum 4.50x
|
|
Maximum 3.50x
|
|
6.60x
|
|
|
5.20x
|
|
(a)
|
||
Fixed Charge Coverage Ratio
(b)
|
|
Not Measured
|
|
Minimum 1.00x
|
|
Not Measured
|
|
|
0.23x
|
|
(a)
|
|
|
Three Months Ended
|
||||||
|
|
December 27,
2013 |
|
September 30,
2013 |
||||
(in thousands)
|
|
|
|
|
||||
Net income/(loss)
|
|
$
|
(1,331
|
)
|
|
$
|
(8,667
|
)
|
Restatement related expenses (a)
|
|
—
|
|
|
—
|
|
||
Asset impairment (b)
|
|
—
|
|
|
14,217
|
|
||
Provision for/(benefit from) income taxes
|
|
(617
|
)
|
|
(5,004
|
)
|
||
Depreciation and amortization expense
|
|
1,195
|
|
|
1,219
|
|
||
Interest expense
|
|
360
|
|
|
522
|
|
||
Non-cash stock compensation
|
|
150
|
|
|
96
|
|
||
Rent expense - M&T sale-leaseback (c)
|
|
—
|
|
|
(29
|
)
|
||
EBITDARS
|
|
$
|
(243
|
)
|
|
$
|
2,354
|
|
|
|
Three Months Ended
|
||||||
|
|
December 27,
2013 |
|
September 30,
2013 |
||||
(in thousands)
|
|
|
|
|
||||
Net income/(loss)
|
|
$
|
(1,331
|
)
|
|
$
|
(8,667
|
)
|
Restatement related expenses (a)
|
|
—
|
|
|
—
|
|
||
Asset impairment (b)
|
|
—
|
|
|
14,217
|
|
||
Provision for/(benefit from) income taxes
|
|
(617
|
)
|
|
(5,004
|
)
|
||
Depreciation and amortization expense
|
|
1,195
|
|
|
1,219
|
|
||
Interest expense
|
|
360
|
|
|
522
|
|
||
Non-cash stock compensation
|
|
150
|
|
|
96
|
|
||
Unfinanced capital expenditures
|
|
(1,302
|
)
|
|
(746
|
)
|
||
Income taxes paid
|
|
(11
|
)
|
|
—
|
|
||
Adjusted EBITDA
|
|
$
|
(1,556
|
)
|
|
$
|
1,637
|
|
|
Page
|
Reports of Independent Registered Public Accounting Firms
|
50
|
Consolidated Balance Sheets as of September 30, 2014 and 2013
|
52
|
Consolidated Income Statements for the three months and years ended September 30, 2014 and 2013
|
53
|
Consolidated Statements of Changes in Stockholders’ Equity for the years ended September 30, 2014 and 2013
|
54
|
Consolidated Statements of Cash Flows for the years ended September 30, 2014 and 2013
|
55
|
Notes to Consolidated Financial Statements
|
56
|
|
September 30,
2014 |
|
September 30,
2013 |
||||
|
(restated)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash
|
$
|
1,980
|
|
|
$
|
2,499
|
|
Accounts receivable, net of allowance
|
22,347
|
|
|
27,945
|
|
||
Inventories, net
|
22,526
|
|
|
21,904
|
|
||
Deferred income taxes
|
—
|
|
|
1,382
|
|
||
Other current assets
|
3,597
|
|
|
610
|
|
||
Total current assets
|
50,450
|
|
|
54,340
|
|
||
|
|
|
|
||||
Fixed assets, net
|
17,850
|
|
|
17,946
|
|
||
Intangible assets, net
|
2,392
|
|
|
2,647
|
|
||
Goodwill
|
2,005
|
|
|
2,005
|
|
||
Deferred income taxes
|
—
|
|
|
11,652
|
|
||
Other long term assets
|
299
|
|
|
345
|
|
||
|
|
|
|
||||
Total assets
|
$
|
72,996
|
|
|
$
|
88,935
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current portion of long-term debt
|
$
|
2,908
|
|
|
$
|
2,778
|
|
Accounts payable
|
17,732
|
|
|
16,508
|
|
||
Accrued payroll and related expenses
|
3,203
|
|
|
2,464
|
|
||
Other accrued expenses
|
1,008
|
|
|
811
|
|
||
Customer deposits
|
1,553
|
|
|
187
|
|
||
Total current liabilities
|
26,404
|
|
|
22,748
|
|
||
|
|
|
|
||||
Long-term debt
|
28,479
|
|
|
34,026
|
|
||
Other long-term liabilities
|
708
|
|
|
167
|
|
||
Total liabilities
|
55,591
|
|
|
56,941
|
|
||
|
|
|
|
||||
STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Preferred stock, $0.01 par value:
500,000 shares authorized; none issued or outstanding |
—
|
|
|
—
|
|
||
Common stock, $0.01 par value:
Authorized: 50,000,000 shares Issued: 11,146,571 and 11,006,749 shares, respectively Outstanding: 10,126,767 and 9,991,291 shares, respectively |
111
|
|
|
110
|
|
||
Additional paid-in capital
|
44,302
|
|
|
43,802
|
|
||
Retained earnings/(accumulated deficit)
|
(25,554
|
)
|
|
(10,483
|
)
|
||
Treasury stock, at cost: 1,019,804 and 1,015,458 shares, respectively
|
(1,454
|
)
|
|
(1,435
|
)
|
||
Total stockholders’ equity
|
17,405
|
|
|
31,994
|
|
||
|
|
|
|
||||
Total liabilities and stockholders’ equity
|
$
|
72,996
|
|
|
$
|
88,935
|
|
|
Three Months Ended
|
|
Years Ended
|
||||||||||||
|
September 30,
2014 |
|
September 30,
2013 |
|
September 30,
2014 |
|
September 30,
2013 |
||||||||
|
(unaudited)
|
|
|
|
|
||||||||||
|
(restated)
|
|
|
|
(restated)
|
|
|
||||||||
Net sales
|
$
|
35,687
|
|
|
$
|
39,122
|
|
|
$
|
135,621
|
|
|
$
|
140,946
|
|
Cost of sales
|
32,179
|
|
|
33,668
|
|
|
120,297
|
|
|
123,269
|
|
||||
Gross profit
|
3,508
|
|
|
5,454
|
|
|
15,324
|
|
|
17,677
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Selling and administrative expenses
|
3,551
|
|
|
3,761
|
|
|
14,567
|
|
|
15,453
|
|
||||
Impairment of goodwill and other intangibles
|
—
|
|
|
14,217
|
|
|
—
|
|
|
14,217
|
|
||||
Restatement and related expenses
|
(1,302
|
)
|
|
625
|
|
|
1,136
|
|
|
1,842
|
|
||||
Operating profit/(loss)
|
1,259
|
|
|
(13,149
|
)
|
|
(379
|
)
|
|
(13,835
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Interest and financing expense
|
386
|
|
|
522
|
|
|
1,795
|
|
|
1,170
|
|
||||
Other expense/(income)
|
—
|
|
|
—
|
|
|
18
|
|
|
47
|
|
||||
Income/(loss) before income taxes
|
873
|
|
|
(13,671
|
)
|
|
(2,192
|
)
|
|
(15,052
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Provision for/(benefit from) income taxes
|
(161
|
)
|
|
(5,004
|
)
|
|
12,879
|
|
|
(5,522
|
)
|
||||
Net income/(loss)
|
$
|
1,034
|
|
|
$
|
(8,667
|
)
|
|
$
|
(15,071
|
)
|
|
$
|
(9,530
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net income/(loss) per common and common equivalent share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.10
|
|
|
$
|
(0.89
|
)
|
|
$
|
(1.53
|
)
|
|
$
|
(0.98
|
)
|
Diluted
|
0.10
|
|
|
(0.89
|
)
|
|
(1.53
|
)
|
|
(0.98
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common and common equivalent shares outstanding:
|
|
|
|
|
|||||||||||
Basic
|
9,853,647
|
|
|
9,739,601
|
|
|
9,827,043
|
|
|
9,711,549
|
|
||||
Diluted
|
9,950,634
|
|
|
9,739,601
|
|
|
9,827,043
|
|
|
9,711,549
|
|
|
Common
Stock,
par $0.01
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
(Deficit)
|
|
Treasury
Stock,
at cost
|
|
Total
Stockholders’
Equity
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balances, September 30, 2012, restated
|
$
|
109
|
|
|
$
|
43,075
|
|
|
$
|
(953
|
)
|
|
$
|
(1,435
|
)
|
|
$
|
40,796
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss
|
—
|
|
|
—
|
|
|
(9,530
|
)
|
|
—
|
|
|
(9,530
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
589
|
|
|
—
|
|
|
—
|
|
|
589
|
|
|||||
Forfeitures
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Directors’ fees paid in stock
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|||||
Restricted (non-vested) stock grants
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Exercise of stock options
|
—
|
|
|
60
|
|
|
—
|
|
|
—
|
|
|
60
|
|
|||||
Shares withheld for payment of taxes upon
vesting of restricted stock |
—
|
|
|
(29
|
)
|
|
—
|
|
|
—
|
|
|
(29
|
)
|
|||||
Employee stock plan purchases
|
—
|
|
|
98
|
|
|
—
|
|
|
—
|
|
|
98
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Balances, September 30, 2013
|
$
|
110
|
|
|
$
|
43,802
|
|
|
$
|
(10,483
|
)
|
|
$
|
(1,435
|
)
|
|
$
|
31,994
|
|
|
Common
Stock,
par $0.01
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
(Deficit)
|
|
Treasury
Stock,
at cost
|
|
Total
Stockholders’
Equity
|
||||||||||
|
|
|
|
|
(restated)
|
|
|
|
|
||||||||||
Balances, September 30, 2013
|
$
|
110
|
|
|
$
|
43,802
|
|
|
$
|
(10,483
|
)
|
|
$
|
(1,435
|
)
|
|
$
|
31,994
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss
|
—
|
|
|
—
|
|
|
(15,071
|
)
|
|
—
|
|
|
(15,071
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
542
|
|
|
—
|
|
|
—
|
|
|
542
|
|
|||||
Restricted (non-vested) stock grants, net of
forfeitures |
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Exercise of stock options
|
|
|
|
38
|
|
|
—
|
|
|
(19
|
)
|
|
19
|
|
|||||
Shares withheld for payment of taxes upon
vesting of restricted stock |
—
|
|
|
(79
|
)
|
|
—
|
|
|
—
|
|
|
(79
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Balances, September 30, 2014
|
$
|
111
|
|
|
$
|
44,302
|
|
|
$
|
(25,554
|
)
|
|
$
|
(1,454
|
)
|
|
$
|
17,405
|
|
|
|
Years Ended
|
||||||
|
|
September 30,
2014 |
|
September 30,
2013 |
||||
|
|
(restated)
|
|
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
||||
Net income/(loss)
|
|
$
|
(15,071
|
)
|
|
$
|
(9,530
|
)
|
Non-cash adjustments:
|
|
|
|
|
||||
Stock-based compensation
|
|
542
|
|
|
589
|
|
||
Depreciation and amortization
|
|
4,846
|
|
|
4,795
|
|
||
Impairment of goodwill and other intangibles
|
|
—
|
|
|
14,217
|
|
||
Directors’ fees paid in stock
|
|
—
|
|
|
10
|
|
||
(Gain)/loss on sale of fixed assets
|
|
2
|
|
|
(8
|
)
|
||
Reserve for doubtful accounts
|
|
73
|
|
|
105
|
|
||
Deferred tax expense/(benefit)
|
|
13,034
|
|
|
(5,651
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
Accounts receivable
|
|
5,525
|
|
|
(4,857
|
)
|
||
Inventory
|
|
(622
|
)
|
|
(4,207
|
)
|
||
Other current assets
|
|
(2,987
|
)
|
|
(209
|
)
|
||
Other long term assets
|
|
15
|
|
|
(264
|
)
|
||
Accounts payable
|
|
902
|
|
|
811
|
|
||
Accrued expenses
|
|
936
|
|
|
(347
|
)
|
||
Customer deposits
|
|
1,366
|
|
|
41
|
|
||
Other long term liabilities
|
|
541
|
|
|
167
|
|
||
Net cash flows from operating activities
|
|
9,102
|
|
|
(4,338
|
)
|
||
|
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
||||
Purchases of fixed assets
|
|
(4,465
|
)
|
|
(5,103
|
)
|
||
Proceeds from disposal of fixed assets
|
|
323
|
|
|
21
|
|
||
Net cash flows from investing activities
|
|
(4,142
|
)
|
|
(5,082
|
)
|
||
|
|
|
|
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
||||
Advances from revolving line of credit
|
|
56,016
|
|
|
60,815
|
|
||
Repayments of revolving line of credit
|
|
(59,846
|
)
|
|
(47,266
|
)
|
||
Borrowings under other loan agreements
|
|
1,300
|
|
|
24,000
|
|
||
Repayments under other loan agreements
|
|
(2,887
|
)
|
|
(28,382
|
)
|
||
Debt issuance costs
|
|
(2
|
)
|
|
(39
|
)
|
||
Proceeds from exercise of stock options
|
|
19
|
|
|
60
|
|
||
Proceeds from employee stock plan purchases
|
|
—
|
|
|
98
|
|
||
Shares withheld for payment of taxes upon vesting of restricted stock
|
|
(79
|
)
|
|
(29
|
)
|
||
Net cash flows from financing activities
|
|
(5,479
|
)
|
|
9,257
|
|
||
|
|
|
|
|
||||
Net increase/(decrease) in cash and cash equivalents
|
|
(519
|
)
|
|
(163
|
)
|
||
Cash and cash equivalents, beginning of period
|
|
2,499
|
|
|
2,662
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
1,980
|
|
|
$
|
2,499
|
|
|
|
|
|
|
||||
Supplemental cash flow information:
|
|
|
|
|
||||
Interest paid
|
|
$
|
1,556
|
|
|
$
|
1,176
|
|
Income taxes paid
|
|
9
|
|
|
367
|
|
||
|
|
|
|
|
||||
Non-cash transactions:
|
|
|
|
|
||||
Fixed assets purchased with extended payment terms
|
|
322
|
|
|
—
|
|
•
|
A technology center that combines dedicated prototype manufacturing with an on-site Materials Analysis Lab, enabling the seamless transition of complex electronics from design to production.
|
•
|
In-house, custom, functional testing and troubleshooting of complex system-level assemblies in support of end-order fulfillment.
|
•
|
A laboratory that enables us to assist customers in mitigating the risk of purchasing counterfeit parts through our subsidiary, Dynamic and Testing Laboratories, LLC.
|
•
|
Build-to-print precision sheet metal and complex wire harness assemblies supporting just-in-time delivery of critical end-market, system-level electronics.
|
•
|
A Lean/Six Sigma continuous improvement program supported by a team of Six Sigma Blackbelts delivering best-in-class results.
|
•
|
Proprietary software-driven Web Portal providing customers real-time access to a wide array of operational data.
|
PP&E Lives
|
|
Estimated
Useful Lives |
|
|
(years)
|
Land improvements
|
|
10
|
Buildings and improvements
|
|
5 to 40
|
Machinery and equipment
|
|
3 to 5
|
Furniture and fixtures
|
|
3 to 7
|
|
|
Three Months Ended
|
|
Years Ended
|
||||||||
Shares for EPS Calculation
|
|
September 30,
2014 |
|
September 30,
2013 |
|
September 30,
2014 |
|
September 30,
2013 |
||||
|
|
(unaudited)
|
|
|
|
|
||||||
|
|
(restated)
|
|
|
|
|
|
|
||||
Weighted average shares outstanding
|
|
9,853,647
|
|
|
9,739,601
|
|
|
9,827,043
|
|
|
9,711,549
|
|
Incremental shares
|
|
96,987
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Diluted shares
|
|
9,950,634
|
|
|
9,739,601
|
|
|
9,827,043
|
|
|
9,711,549
|
|
|
|
|
|
|
|
|
|
|
||||
Anti-dilutive shares excluded
|
|
556,873
|
|
|
521,857
|
|
|
556,873
|
|
|
521,857
|
|
|
|
Year Ended
|
||
|
|
September 30,
2014 |
||
(in thousands)
|
|
|
||
Net loss - Previously reported
|
|
$
|
(2,092
|
)
|
Deferred tax asset valuation allowance adjustment
|
|
(12,258
|
)
|
|
Excess and obsolete inventory reserve adjustment
|
|
(721
|
)
|
|
Net loss - Restated
|
|
$
|
(15,071
|
)
|
|
|
Years Ended
|
||||||
Allowance for Doubtful Accounts
|
|
September 30,
2014 |
|
September 30,
2013 |
||||
(in thousands)
|
|
|
|
|
||||
Allowance, beginning of period
|
|
$
|
452
|
|
|
$
|
406
|
|
Provision for doubtful accounts
|
|
121
|
|
|
105
|
|
||
Write-offs
|
|
(48
|
)
|
|
(59
|
)
|
||
Allowance, end of period
|
|
$
|
525
|
|
|
$
|
452
|
|
Inventories
|
|
September 30,
2014 |
|
September 30,
2013 |
||||
(in thousands)
|
|
(restated)
|
|
|
|
|||
Raw materials
|
|
$
|
16,769
|
|
|
$
|
14,841
|
|
Work-in-process
|
|
7,906
|
|
|
7,564
|
|
||
Finished goods
|
|
757
|
|
|
1,449
|
|
||
Total inventories
|
|
25,432
|
|
|
23,854
|
|
||
Reserve for excess/obsolete inventory
|
|
(2,906
|
)
|
|
(1,950
|
)
|
||
Inventories, net
|
|
$
|
22,526
|
|
|
$
|
21,904
|
|
Fixed Assets
|
|
September 30,
2014 |
|
September 30,
2013 |
||||
(in thousands)
|
|
|
|
|
||||
Land and improvements
|
|
$
|
1,601
|
|
|
$
|
1,601
|
|
Buildings and improvements
|
|
13,452
|
|
|
11,070
|
|
||
Leasehold improvements
|
|
1,458
|
|
|
1,411
|
|
||
Machinery and equipment
|
|
26,996
|
|
|
25,963
|
|
||
Furniture and fixtures
|
|
7,207
|
|
|
6,165
|
|
||
Construction in progress
|
|
381
|
|
|
835
|
|
||
Total fixed assets, at cost
|
|
51,095
|
|
|
47,045
|
|
||
Accumulated depreciation
|
|
(33,245
|
)
|
|
(29,099
|
)
|
||
Fixed assets, net
|
|
$
|
17,850
|
|
|
$
|
17,946
|
|
|
|
Three Months Ended
|
|
Years Ended
|
||||||||||||
|
|
September 30,
2014 |
|
September 30,
2013 |
|
September 30,
2014 |
|
September 30,
2013 |
||||||||
(in thousands)
|
|
(unaudited)
|
|
|
|
|
||||||||||
Depreciation expense
|
|
$
|
1,152
|
|
|
$
|
1,103
|
|
|
$
|
4,558
|
|
|
$
|
4,264
|
|
Intangible Assets
|
|
September 30,
2014 |
|
September 30,
2013 |
||||
(in thousands)
|
|
|
|
|
|
|
||
Customer relationships - SCB
|
|
$
|
5,900
|
|
|
$
|
5,900
|
|
Property tax abatement - Albuquerque
|
|
360
|
|
|
360
|
|
||
Non-compete agreement - SCB
|
|
100
|
|
|
100
|
|
||
Total intangibles
|
|
6,360
|
|
|
6,360
|
|
||
Accumulated amortization
|
|
(1,556
|
)
|
|
(1,301
|
)
|
||
Accumulated impairment - customer relationships
|
|
(2,412
|
)
|
|
(2,412
|
)
|
||
Intangible assets, net
|
|
$
|
2,392
|
|
|
$
|
2,647
|
|
|
|
Three Months Ended
|
|
Years Ended
|
||||||||||||
Amortization Expense
|
|
September 30,
2014 |
|
September 30,
2013 |
|
September 30,
2014 |
|
September 30,
2013 |
||||||||
(in thousands)
|
|
(unaudited)
|
|
|
|
|
||||||||||
Intangible amortization expense
|
|
$
|
64
|
|
|
$
|
113
|
|
|
$
|
254
|
|
|
$
|
452
|
|
Future Amortization
|
|
Estimated future amortization
|
||
(in thousands)
|
|
|
||
Twelve months ended September 30,
|
|
|
||
2015
|
|
$
|
254
|
|
2016
|
|
238
|
|
|
2017
|
|
234
|
|
|
2018
|
|
234
|
|
|
2019
|
|
213
|
|
|
2020 and thereafter
|
|
$
|
1,219
|
|
Goodwill
|
|
September 30,
2014 |
|
September 30,
2013 |
||||
(in thousands)
|
|
|
|
|
|
|
||
Goodwill
|
|
$
|
13,810
|
|
|
$
|
13,810
|
|
Accumulated impairment
|
|
(11,805
|
)
|
|
(11,805
|
)
|
||
Goodwill, net
|
|
$
|
2,005
|
|
|
$
|
2,005
|
|
|
|
Fixed/
|
|
|
|
September 30, 2014
|
|
September 30, 2013
|
||||||||||
|
|
Variable
|
|
|
|
|
|
Interest
|
|
|
|
Interest
|
||||||
Debt
|
|
Rate
|
|
Maturity Date
|
|
Balance
|
|
Rate (1)
|
|
Balance
|
|
Rate (1)
|
||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
M&T credit facilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revolving Credit Facility
|
|
v
|
|
1/18/2016
|
|
$
|
7,431
|
|
|
4.44
|
%
|
|
$
|
11,261
|
|
|
3.19
|
%
|
Term Loan A
|
|
f
|
|
2/1/2022
|
|
8,148
|
|
|
3.98
|
|
|
9,259
|
|
|
3.98
|
|
||
Term Loan B
|
|
v
|
|
2/1/2023
|
|
11,783
|
|
|
3.41
|
|
|
13,184
|
|
|
2.68
|
|
||
Albuquerque Mortgage Loan
|
|
v
|
|
2/1/2018
|
|
2,733
|
|
|
4.69
|
|
|
3,000
|
|
|
3.44
|
|
||
Celmet Building Term Loan
|
|
f
|
|
11/7/2018
|
|
1,192
|
|
|
4.72
|
|
|
—
|
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other credit facilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Albuquerque Industrial Revenue Bond
|
|
f
|
|
3/1/2019
|
|
100
|
|
|
5.63
|
|
|
100
|
|
|
5.63
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total debt
|
|
|
|
|
|
31,387
|
|
|
|
|
36,804
|
|
|
|
||||
Less: current portion
|
|
|
|
|
|
(2,908
|
)
|
|
|
|
(2,778
|
)
|
|
|
||||
Long-term debt
|
|
|
|
|
|
$
|
28,479
|
|
|
|
|
$
|
34,026
|
|
|
|
a)
|
Revolving Credit Facility (“Revolver”)
: Up to
$20 million
is available through
January 18, 2016
. The Company may borrow up to the lesser of (i)
85%
of eligible receivables plus 35% of eligible inventories or (ii) $20 million. At IEC’s election, another
35%
of eligible inventories may be included in the borrowing base for limited periods of time during which a higher rate of interest is charged on the Revolver. Borrowings based on inventory balances are further limited to a cap of
$3.75 million
, or when subject to the higher percentage limit,
$4.75 million
. Based on the calculation described above, at
September 30, 2014
, the Company was able to borrow up to
$20.0 million
on the Revolver. Average available balances amounted to $
11.0 million
and
$12.8 million
during the
years ended
September 30, 2014
and
2013
, respectively.
|
b)
|
Term Loan A
:
$10.0 million
was borrowed on January 18, 2013. Principal is being repaid in
108 monthly installments
of
$93 thousand
.
|
c)
|
Term Loan B:
$14.0 million
was borrowed on January 18, 2013. Principal is being repaid in
120 monthly installments
of
$117 thousand
.
|
d)
|
Albuquerque
Mortgage Loan
:
$4.0 million
was borrowed on December 16, 2009. The loan is secured by real property in Albuquerque, NM, and principal is being repaid in
monthly installments
of
$22 thousand
plus a balloon payment due at maturity.
|
e)
|
Energy Loan
:
$0.2 million
was borrowed on April 2, 2008, for which interest at a fixed rate of
2.08%
is subsidized by the State of New York. Principal was being repaid in
60 equal monthly installments
and the loan was paid in full during April 2013.
|
|
Debt to EBITDARS Ratio:
(a)
|
|
|
|
2013 Credit Agreement, before 2013 Amendments:
|
|
|
|
3/31/2013 through and including 9/29/2013
|
|
< 3.00 to 1.00
|
|
9/30/2013 and thereafter
|
|
<2.75 to 1.00
|
|
|
|
|
|
2013 Credit Agreement, after First 2013 Amendment:
|
|
|
|
6/28/2013 through and including 12/27/2013
|
|
< 3.25 to 1.00
|
|
12/28/2013 through and including 3/28/2014
|
|
<3.00 to 1.00
|
|
3/29/2014 and thereafter
|
|
< 2.75 to 1.00
|
|
|
|
|
|
2013 Credit Agreement, after Second 2013 Amendment:
|
|
|
|
6/28/2013 through and including 12/27/2013
|
|
< 3.50 to 1.00
|
|
12/28/2013 through and including 3/28/2014
|
|
<3.00 to 1.00
|
|
3/29/2014 and thereafter
|
|
< 2.75 to 1.00
|
|
|
|
|
|
2013 Credit Agreement, after First 2014 Amendment:
|
|
|
|
12/13/2013 through and including 3/27/2014
|
|
< 4.50 to 1.00
|
|
3/28/2014 through and including 6/26/2014
|
|
<3.50 to 1.00
|
|
6/27/2014 through and including 9/29/2014
|
|
<3.25 to 1.00
|
|
09/30/2014 and thereafter
|
|
< 2.75 to 1.00
|
|
|
|
|
|
2013 Credit Agreement, after Second 2014 Amendment:
|
|
|
|
12/26/2014 through and including 3/26/2015
|
|
< 4.50 to 1.00
|
|
3/27/2015 through and including 6/25/2015
|
|
<3.50 to 1.00
|
|
6/26/2015 through and including 9/29/2015
|
|
<3.25 to 1.00
|
|
09/30/2015 and thereafter
|
|
< 2.75 to 1.00
|
|
|
|
|
|
Fixed Charge Coverage Ratio:
(b)
|
|
|
|
|
|
|
|
2013 Credit Agreement, before 2013 Amendments:
|
|
|
|
3/31/2013 and thereafter
|
|
≥ 1.25 to 1.00
|
|
|
|
|
|
2013 Credit Agreement, after First 2013 Amendment:
|
|
|
|
6/28/2013
|
|
>0.95 to 1.00
|
|
9/30/2013
|
|
>1.00 to 1.00
|
|
12/27/2013
|
|
>1.15 to 1.00
|
|
3/28/2014 and thereafter
|
|
>1.25 to 1.00
|
|
|
|
|
|
2013 Credit Agreement, after First 2014 Amendment:
|
|
|
|
3/28/2014 through and including 6/26/2014
|
|
≥0.90 to 1.00
|
|
06/27/2014 through and including 9/29/2014
|
|
≥1.10 to 1.00
|
|
9/30/2014 and thereafter
|
|
≥1.25 to 1.00
|
|
|
|
|
|
2013 Credit Agreement, after Second 2014 Amendment:
|
|
|
|
12/26/2014 through and including 3/26/2015
|
|
≥1.00 to 1.00
|
|
03/27/2014 through and including 6/25/2015
|
|
≥1.15 to 1.00
|
|
6/26/2015 and thereafter
|
|
≥1.25 to 1.00
|
(a)
|
The ratio of debt to earnings before interest, taxes, depreciation, amortization, rent expense and non-cash stock compensation expense.
|
(b)
|
The ratio compares (i) 12 month EBITDA plus non-cash stock compensation expense minus unfinanced capital expenditures minus cash taxes paid, to (ii) the sum of interest expense, principal payments, sale-leaseback payments and dividends, if any (fixed charges).
|
•
|
Consolidation of all outstanding term debt, except the Albuquerque Mortgage Loan and the Energy Loan, and an
$8.9 million
portion of outstanding loans under the Revolver, into two new and increased term loans, described below (“Term Loan A” and “Term Loan B”);
|
•
|
Creation of a new Term Loan A in the original principal amount of
$10.0 million
, bearing interest at the fixed rate of
3.98%
per annum, payable in equal monthly principal payments of
$93 thousand
each plus accrued interest, with a final maturity date of
February 1, 2022
;
|
•
|
Creation of a new Term Loan B in the original principal amount of
$14.0 million
, bearing interest at a variable rate equal to
2.50%
above Libor in effect from time to time, payable in equal monthly principal payments of
$117 thousand
each plus accrued interest, with a final maturity date of
February 1, 2023
. The First 2014 Amendment modified the applicable margin to
3.25%
until December 13, 2014. Thereafter, the applicable margin will revert back to the rate range defined in the 2013 Credit Agreement provided that the Company is compliant with all the covenants. If however, the Company is non-compliant with any of the covenants the applicable margin will remain fixed at
3.25%
|
•
|
Extension of the maturity date of the Albuquerque Mortgage Loan from
December 16, 2014 to February 1, 2018
, with no change to the monthly principal payments of
$22 thousand
each plus accrued interest;
|
•
|
Modification of the interest rate applicable to the Albuquerque Mortgage Loan from (i) a range on the applicable quarterly adjustment date of 2.50% to 3.75% above Libor based upon the Company’s then Debt to EBITDARS Ratio (ranging from 1.75:1.00 or less to 3.25:1.00 or greater), to (ii) a range on the applicable quarterly adjustment date of 2.00% to 3.25% above Libor based upon the Company’s then Debt to EBITDARS Ratio (ranging from 0.75:1.00 or less to 2.75:1.00 or greater).
The Second 2013 Amendment modified the interest rate to a range on the applicable quarterly adjustment date of
2.25%
to
3.75%
above Libor based upon the Company’s then Debt to EBITDARS Ratio (ranging from 1.25:1.00 or less to 3.25:1.00 or greater). The First 2014 Amendment modified the applicable margin to
4.50%
until December 13, 2014. Thereafter, the applicable margin would have reverted back to the rate range defined in the Second 2013 Amendment provided that the Company was compliant with all the covenants. If however, the Company was non-compliant with any of the covenants the applicable margin would have remained fixed at
4.50%
until the Company became compliant with all the covenants. The Second 2014 Amendment modified the applicable margin to
4.50%
until March 27, 2015. Thereafter, the applicable margin will revert back to the rate range defined in the Second 2013 Amendment provided that the Company is compliant with all the covenants. If however, the Company is non-compliant with any of the covenants the applicable margin will remain fixed at
4.50%
until the Company has become compliant with all the covenants;
|
•
|
Continuation of the Revolver in
the maximum available principal amount of the lesser of $20.0 million or the amount available under the borrowing base (the formula for which, and interest rate surcharge applicable to optional over-base advances, remains unchanged)
, with an outstanding principal balance immediately after the closing of
$3.7 million
;
|
•
|
Extension of the maturity date of the Revolver from
December 17, 2013 to January 18, 2016
;
|
•
|
Modification of the interest rate applicable to the Revolver from (i)
a range on the applicable quarterly adjustment date of 2.25% to 3.50% above Libor based upon the Company’s then Debt to EBITDARS Ratio (ranging from 1.75:1.00 or less to 3.25:1.00 or greater), to (ii) a range on the applicable quarterly adjustment date of 1.75% to 3.00% above Libor based upon the Company’s then Debt to EBITDARS Ratio (ranging from 0.75:1.00 or less to 2.75:1.00 or greater). The Second 2013 Amendment modified the interest rate to a range on the applicable quarterly adjustment date of 2.00% to 3.50% above Libor based upon the Company’s then Debt to EBITDARS Ratio (ranging from 1.25:1.00 or less to 3.25:1.00 or greater)
. The First 2014 Amendment modified the applicable margin to
4.25%
until December 13, 2014. Thereafter, the applicable margin would have reverted back to the rate range defined in the Second 2013 Amendment provided that the Company was compliant with all the covenants. If however, the Company was non-compliant with any of the covenants the applicable margin would have remained fixed at
4.25%
until the Company became compliant with all the covenants. The Second 2014 Amendment modified the applicable margin to
4.25%
until March 27, 2015. Thereafter, the applicable margin will revert back to the rate range defined in the Second 2013 Amendment provided that the Company is compliant with all the covenants. If however, the Company is non-compliant with any of the covenants the applicable margin will remain fixed at
4.25%
until the Company has become compliant with all the covenants;
|
•
|
Modification of the unused fee applicable to the Revolver from (i)
a range on the applicable quarterly adjustment date of 0.125% to 0.500% based upon the Company’s then ratio of Debt to EBITDARS (ranging from 1.75:1.00 or less to 3.25:1.00 or greater), to (ii) a range on the applicable quarterly adjustment date of 0.125% to 0.500% based upon the Company’s then ratio of Debt to EBITDARS (ranging from 0.75:1.00 or less to 2.75:1.00 or greater). The Second 2013 Amendment modified the unused fee to a range on the applicable quarterly adjustment date of 0.250% to 0.500% based upon the Company’s then Debt to EBITDARS Ratio (ranging from 1.25:1.00 or less to 3.25:1.00 or greater).
The First 2014 Amendment modified the unused fee to a fixed rate of
0.50%
until December 13, 2014. Thereafter, the unused fee would have reverted back to the fee range defined in the Second 2013 Amendment provided that the Company was compliant with all the covenants. If however, the Company was non-compliant with any of the covenants the unused fee would have remained at the fixed rate of
0.50%
until the Company became compliant with all the covenants. The Second 2014 Amendment modified the unused fee to a fixed rate of
0.50%
until March 27, 2015. Thereafter, the unused fee will revert back to the fee range defined in the Second 2013 Amendment provided that the Company is compliant with all the covenants. If however, the Company is non-compliant with any of the
|
•
|
Elimination of mandatory prepayments based upon excess cash flow;
|
•
|
Continuation, unchanged, of existing financial covenants requiring minimum quarterly EBITDARS, a maximum Debt to twelve month EBITDARS ratio, and minimum Fixed Charge Coverage Ratio, all measured at the end of each quarter commencing with the quarter ending in June 2013 (but later modified in the 2013 Amendments and the 2014 Amendments); and
|
•
|
Modification of the prohibition against dividends and stock repurchases to permit an aggregate maximum of
$3.5 million
of such distributions prior to February 1, 2023 absent default at the time of the applicable payment.
|
a)
|
Revolving Credit Facility (“Revolver”):
Up to $20.0 million was available through December 17, 2013. The Company could borrow up to the lesser of (i) 85% of eligible receivables plus 35% of eligible inventories or (ii) $20.0 million. At IEC’s election, another 35% of eligible inventories would be included in the borrowing base for limited periods of time during which a higher rate of interest would be charged on the Revolver. Borrowings based on inventory balances were further limited to a cap of $3.75 million, or when subject to the higher percentage limit, $4.75 million.
|
b)
|
SCB Term Loan
:
$20.0 million
was borrowed on December 17, 2010 and principal was being repaid in
60 equal monthly installments.
This loan was paid off during January 2013.
|
c)
|
Albuquerque
Term Loan
:
$5.0 million
was borrowed on December 16, 2009, and principal was being repaid in
60 equal monthly installments.
This loan was paid off during January 2013.
|
d)
|
Albuquerque
Mortgage Loan
:
$4.0 million
was borrowed on December 16, 2009. The loan is secured by real property in Albuquerque, NM, and principal was being repaid in
60 monthly installments
of
$22 thousand
plus a balloon payment due at maturity. The maturity date of the mortgage loan was modified from December 16, 2014 to February 1, 2018; with no change to the monthly principal payments of
$22 thousand
each plus accrued interest.
|
e)
|
Celmet Term Loan
:
$2.0 million
was borrowed on July 30, 2010, and principal was being repaid in
60 equal monthly installments.
This loan was paid off during January 2013.
|
f)
|
Equipment Line of Credit
: Up to
$1.5 million
, reduced by outstanding loans, was available through December 17, 2013. The line was available for purchases of capital equipment. Borrowings under the line were supported by individual notes that specify interest and principal repayment terms. The Company had the option to select whether the interest rate was fixed or variable. Equal payments of principal were being made over 48 months for two of the loans and over 60 months for one loan. These loans were paid off during January 2013.
|
g)
|
Energy Loan
:
$0.2 million
was borrowed on April 2, 2008 under this facility, for which interest at a fixed rate of
2.08%
was subsidized by the State of New York. Principal was being repaid in
60 equal monthly installments
and the loan was paid in full during April 2013.
|
a)
|
Seller Notes
: The May 2008 acquisition of Val-U-Tech Corp., which was renamed IEC Electronics Wire and Cable, Inc. (“Wire and Cable”) in 2009, was financed in part by three promissory notes payable to the sellers totaling
$3.8 million
. These notes were subordinated to borrowings under the Credit Agreement and were being repaid in quarterly installments of
$160 thousand
, including interest. Effective October 1, 2011, the interest rate on the notes was reduced from
4.0%
to
3.0%
without altering any other terms of the borrowings. The seller notes were paid in full during June 2013.
|
b)
|
Albuquerque
Industrial Revenue Bond
: When IEC acquired Albuquerque, the Company assumed responsibility for a
$100 thousand
Industrial Revenue Bond issued by the City of Albuquerque. Interest on the bond is paid semiannually, and principal is due in its entirety at maturity.
|
Debt Repayment Schedule
|
|
Contractual
Principal Payments |
||
(in thousands)
|
|
|
|
|
Twelve months ended Sept 30,
|
|
|
|
|
2015
|
|
$
|
2,908
|
|
2016
(1)
|
|
10,339
|
|
|
2017
|
|
2,908
|
|
|
2018
|
|
4,574
|
|
|
2019
|
|
3,283
|
|
|
2020 and thereafter
|
|
$
|
7,375
|
|
|
|
$
|
31,387
|
|
|
|
Years Ended
|
||||||
Warranty Reserve
|
|
September 30,
2014 |
|
September 30,
2013 |
||||
(in thousands)
|
|
|
|
|
|
|
||
Reserve, beginning of period
|
|
$
|
219
|
|
|
$
|
388
|
|
Provision
|
|
296
|
|
|
13
|
|
||
Warranty costs
|
|
(264
|
)
|
|
(182
|
)
|
||
Reserve, end of period
|
|
$
|
251
|
|
|
$
|
219
|
|
|
|
Three Months Ended
|
|
Years Ended
|
||||||||||||
|
|
September 30,
2014 |
|
September 30,
2013 |
|
September 30,
2014 |
|
September 30,
2013 |
||||||||
(in thousands)
|
|
(unaudited)
|
|
|
|
|
||||||||||
Grant amortization expense
|
|
$
|
144
|
|
|
$
|
17
|
|
|
$
|
158
|
|
|
$
|
17
|
|
|
|
Years Ended
|
||||||
Valuation of Options
|
|
September 30,
2014 |
|
September 30,
2013 |
||||
|
|
|
|
|
||||
Assumptions for Black-Scholes:
|
|
|
|
|
||||
Risk-free interest rate
|
|
1.32
|
%
|
|
0.55
|
%
|
||
Expected term in years
|
|
4.1
|
|
|
4.0
|
|
||
Volatility
|
|
48
|
%
|
|
49
|
%
|
||
Expected annual dividends
|
|
none
|
|
|
none
|
|
||
|
|
|
|
|
|
|||
Value of options granted:
|
|
|
|
|
|
|||
Number of options granted
|
|
50,500
|
|
|
50,000
|
|
||
Weighted average fair value per share
|
|
$
|
1.62
|
|
|
$
|
2.65
|
|
Fair value of options granted (000s)
|
|
$
|
82
|
|
|
$
|
133
|
|
|
|
Years Ended
|
||||||||||||
|
|
September 30, 2014
|
|
September 30, 2013
|
||||||||||
Stock Options
|
|
Number
of Options |
|
Wgtd. Avg. Exercise Price
|
|
Number
of Options |
|
Wgtd. Avg. Exercise Price
|
||||||
|
|
|
|
|
|
|
|
|
||||||
Outstanding, beginning of period
|
|
246,383
|
|
|
$
|
4.38
|
|
|
280,789
|
|
|
$
|
3.82
|
|
Granted
|
|
50,500
|
|
|
4.12
|
|
|
50,000
|
|
|
6.91
|
|
||
Exercised
|
|
(23,237
|
)
|
|
1.53
|
|
|
(30,150
|
)
|
|
2.00
|
|
||
Shares withheld for payment of
taxes upon exercise of stock option |
|
(4,346
|
)
|
|
1.72
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
|
(29,350
|
)
|
|
5.73
|
|
|
(45,756
|
)
|
|
5.52
|
|
||
Expired
|
|
(5,950
|
)
|
|
5.11
|
|
|
(8,500
|
)
|
|
2.01
|
|
||
Outstanding, end of period
|
|
234,000
|
|
|
$
|
4.48
|
|
|
246,383
|
|
|
$
|
4.38
|
|
|
|
|
|
|
|
|
|
|
||||||
For options expected to vest
|
|
|
|
|
|
|
|
|
|
|
||||
Number expected to vest
|
|
212,455
|
|
|
$
|
4.47
|
|
|
234,967
|
|
|
$
|
4.29
|
|
Weighted average remaining term, in years
|
|
3.2
|
|
|
|
|
3.5
|
|
|
|
|
|||
Intrinsic value (000s)
|
|
|
|
$
|
173
|
|
|
|
|
|
$
|
168
|
|
|
|
|
|
|
|
|
|
|
|
||||||
For exercisable options
|
|
|
|
|
|
|
|
|
|
|
||||
Number exercisable
|
|
121,650
|
|
|
$
|
3.64
|
|
|
108,033
|
|
|
$
|
2.36
|
|
Weighted average remaining term, in years
|
|
1.7
|
|
|
|
|
1.8
|
|
|
|
|
|||
Intrinsic value (000s)
|
|
|
|
$
|
161
|
|
|
|
|
|
$
|
168
|
|
|
|
|
|
|
|
|
|
|
|
||||||
For non-exercisable options
|
|
|
|
|
|
|
|
|
|
|
||||
Expense not yet recognized (000s)
|
|
|
|
$
|
145
|
|
|
|
|
|
$
|
194
|
|
|
Weighted average years to be recognized
|
|
2.6
|
|
|
|
|
2.5
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
||||||
For options exercised
|
|
|
|
|
|
|
|
|
||||||
Intrinsic value (000s)
|
|
|
|
$
|
69
|
|
|
|
|
|
$
|
131
|
|
|
|
Years Ended
|
||||||||||||
|
|
September 30, 2014
|
|
September 30, 2013
|
||||||||||
Stock Options
|
|
Number
of Options |
|
Wgtd. Avg.
Grant Date
Fair Value
|
|
Number
of Options |
|
Wgtd. Avg.
Grant Date Fair Value |
||||||
|
|
|
|
|
|
|
|
|
||||||
Non-vested, beginning of period
|
|
138,350
|
|
|
$
|
2.51
|
|
|
157,150
|
|
|
$
|
2.42
|
|
Granted
|
|
50,500
|
|
|
1.62
|
|
|
50,000
|
|
|
2.65
|
|
||
Vested
|
|
(47,150
|
)
|
|
2.51
|
|
|
(23,044
|
)
|
|
2.26
|
|
||
Forfeited
|
|
(29,350
|
)
|
|
2.35
|
|
|
(45,756
|
)
|
|
2.51
|
|
||
Non-vested, end of period
|
|
112,350
|
|
|
$
|
2.15
|
|
|
138,350
|
|
|
$
|
2.51
|
|
|
|
Years Ended
|
||||||||||||
|
|
September 30, 2014
|
|
September 30, 2013
|
||||||||||
Restricted (Non-vested) Stock
|
|
Number of
Non-vested
Shares
|
|
Wgtd. Avg.
Grant Date Fair Value |
|
Number of
Non-vested Shares |
|
Wgtd. Avg.
Grant Date Fair Value |
||||||
|
|
|
|
|
|
|
|
|
||||||
Outstanding, beginning of period
|
|
275,474
|
|
|
$
|
5.96
|
|
|
339,939
|
|
|
$
|
5.69
|
|
Granted
|
|
225,703
|
|
|
4.14
|
|
|
90,708
|
|
|
6.82
|
|
||
Vested
|
|
(88,586
|
)
|
|
5.71
|
|
|
(58,372
|
)
|
|
5.45
|
|
||
Shares withheld for payment of
taxes upon vesting of restricted stock |
|
(18,615
|
)
|
|
4.28
|
|
|
(4,441
|
)
|
|
4.70
|
|
||
Forfeited
|
|
(71,103
|
)
|
|
5.88
|
|
|
(92,360
|
)
|
|
6.15
|
|
||
Outstanding, end of period
|
|
322,873
|
|
|
$
|
4.97
|
|
|
275,474
|
|
|
$
|
5.96
|
|
|
|
|
|
|
|
|
|
|
||||||
For non-vested shares
|
|
|
|
|
|
|
|
|
|
|
|
|||
Expense not yet recognized (000s)
|
|
|
|
$
|
862
|
|
|
|
|
|
$
|
811
|
|
|
Weighted average remaining years for vesting
|
|
|
|
|
2.7
|
|
|
|
|
|
2.8
|
|
||
|
|
|
|
|
|
|
|
|
||||||
For shares vested
|
|
|
|
|
|
|
|
|
|
|
|
|||
Aggregate fair value on vesting dates (000s)
|
|
|
|
|
$
|
454
|
|
|
|
|
|
$
|
388
|
|
|
|
Years Ended
|
||||||
Income Tax Provision
|
|
September 30, 2014
|
|
September 30, 2013
|
||||
(in thousands)
|
|
(restated)
|
|
|
||||
Current tax:
|
|
|
|
|
||||
State
|
|
$
|
(111
|
)
|
|
$
|
209
|
|
Federal
|
|
(44
|
)
|
|
(80
|
)
|
||
|
|
|
|
|
||||
Deferred tax:
|
|
|
|
|
||||
State
|
|
1,493
|
|
|
(557
|
)
|
||
Federal
|
|
11,541
|
|
|
(5,094
|
)
|
||
Provision for/(benefit from) income taxes
|
|
$
|
12,879
|
|
|
$
|
(5,522
|
)
|
|
|
Years Ended
|
||||
Taxes as Percent of Pretax Income
|
|
September 30, 2014
|
|
|
September 30, 2013
|
|
|
|
(restated)
|
|
|
||
Federal statutory rate
|
|
(34.0
|
)%
|
|
(34.0
|
)%
|
|
|
|
|
|
||
Increase in valuation allowance
|
|
620.3
|
%
|
|
—
|
%
|
Decrease in state deferred tax rate
|
|
8.3
|
%
|
|
—
|
%
|
State income taxes, net of federal benefit
|
|
(5.1
|
)%
|
|
(2.3
|
)%
|
Decrease/(increase) in tax credits
|
|
(3.6
|
)%
|
|
(1.3
|
)%
|
IRS audit and other federal refunds
|
|
(1.5
|
)%
|
|
0.6
|
%
|
Other
|
|
3
|
%
|
|
0.3
|
%
|
|
|
|
|
|
||
Income tax provision/(benefit) as percent of pretax income
|
|
587.4
|
%
|
|
(36.7
|
)%
|
|
|
Years Ended
|
||||||
Deferred Income Taxes
|
|
September 30,
2014 |
|
|
September 30,
2013 |
|
||
(in thousands)
|
|
(restated)
|
|
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Net operating loss carryforward
|
|
$
|
5,925
|
|
|
$
|
5,913
|
|
Alternative minimum tax credit carryforward
|
|
949
|
|
|
870
|
|
||
Depreciation and fixed assets
|
|
1,099
|
|
|
250
|
|
||
Amortization and impairment of intangibles
|
|
3,178
|
|
|
3,610
|
|
||
New York State investment tax & other credits
|
|
1,186
|
|
|
1,186
|
|
||
Inventories
|
|
1,041
|
|
|
737
|
|
||
Other
|
|
679
|
|
|
923
|
|
||
Total before allowance
|
|
14,057
|
|
|
13,489
|
|
||
Valuation allowance
|
|
(14,057
|
)
|
|
(455
|
)
|
||
Deferred tax assets, net
|
|
—
|
|
|
13,034
|
|
||
|
|
|
|
|
||||
Net deferred income taxes (current and deferred)
|
|
$
|
—
|
|
|
$
|
13,034
|
|
|
|
Three Months Ended
|
|
Years Ended
|
||||
% of Sales by Sector
|
|
September 30,
2014 |
|
September 30,
2013 |
|
September 30,
2014 |
|
September 30,
2013 |
|
|
(unaudited)
|
|
|
|
|
||
Aerospace & Defense (previously Military & Aerospace)
|
|
46%
|
|
49%
|
|
49%
|
|
51%
|
Medical
|
|
23%
|
|
20%
|
|
20%
|
|
20%
|
Industrial
|
|
26%
|
|
22%
|
|
25%
|
|
21%
|
Communications & Other
|
|
5%
|
|
9%
|
|
6%
|
|
8%
|
|
|
100%
|
|
100%
|
|
100%
|
|
100%
|
Future Rental Obligations
|
|
Contractual
Lease Payments |
||
(in thousands)
|
|
|
|
|
Twelve months ended September 30,
|
|
|
|
|
2015
|
|
$
|
333
|
|
2016
|
|
328
|
|
|
2017
|
|
287
|
|
|
2018
|
|
276
|
|
|
2019
|
|
5
|
|
|
|
Three Months Ended
|
|
Years Ended
|
||||||||||||
Rent Expense
|
|
September 30,
2014 |
|
September 30,
2013 |
|
September 30,
2014 |
|
September 30,
2013 |
||||||||
(in thousands)
|
|
(unaudited)
|
|
|
||||||||||||
Rent expense
|
|
$
|
118
|
|
|
$
|
161
|
|
|
$
|
457
|
|
|
$
|
1,107
|
|
|
|
Net Sales
|
|
Gross Profit
|
|
Net Income/(Loss)
|
|
Basic Earnings/ (Loss) Per Share
|
|
Diluted Earnings/ (Loss) Per Share
|
||||||||||
(Unaudited; in thousands, except per share data)
|
||||||||||||||||||||
Fiscal Quarters
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fourth 2014, restated
|
|
$
|
35,687
|
|
|
$
|
3,508
|
|
|
$
|
1,034
|
|
|
$
|
0.10
|
|
|
$
|
0.10
|
|
Third 2014, restated
|
|
32,992
|
|
|
3,795
|
|
|
(60
|
)
|
|
(0.01
|
)
|
|
(0.01
|
)
|
|||||
Second 2014, restated
|
|
34,805
|
|
|
4,644
|
|
|
(14,714
|
)
|
|
(1.50
|
)
|
|
(1.50
|
)
|
|||||
First 2014, restated
|
|
$
|
32,138
|
|
|
3,378
|
|
|
$
|
(1,331
|
)
|
|
$
|
(0.14
|
)
|
|
(0.14
|
)
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fourth 2013
|
|
$
|
39,122
|
|
|
$
|
5,454
|
|
|
$
|
(8,667
|
)
|
|
$
|
(0.89
|
)
|
|
$
|
(0.89
|
)
|
Third 2013
|
|
35,154
|
|
|
5,159
|
|
|
382
|
|
|
0.04
|
|
|
0.04
|
|
|||||
Second 2013
|
|
33,681
|
|
|
2,899
|
|
|
(1,144
|
)
|
|
(0.12
|
)
|
|
(0.12
|
)
|
|||||
First 2013, restated
|
|
32,989
|
|
|
4,165
|
|
|
(101
|
)
|
|
(0.01
|
)
|
|
(0.01
|
)
|
|
Consolidated Balance Sheet
|
||||||||||
|
September 30, 2014
|
||||||||||
|
As reported
|
|
Adjustment
|
|
Restated
|
||||||
|
|
|
(in thousands)
|
|
|
||||||
ASSETS
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
||||||
Cash
|
$
|
1,980
|
|
|
|
|
$
|
1,980
|
|
||
Accounts receivable, net of allowance
|
22,347
|
|
|
|
|
22,347
|
|
||||
Inventories, net
|
23,247
|
|
|
(721
|
)
|
|
22,526
|
|
|||
Deferred income taxes
|
1,114
|
|
|
(1,114
|
)
|
|
—
|
|
|||
Other current assets
|
3,597
|
|
|
|
|
3,597
|
|
||||
Total current assets
|
52,285
|
|
|
(1,835
|
)
|
|
50,450
|
|
|||
|
|
|
|
|
|
||||||
Fixed assets, net
|
17,850
|
|
|
|
|
17,850
|
|
||||
Intangible assets, net
|
2,392
|
|
|
|
|
2,392
|
|
||||
Goodwill
|
2,005
|
|
|
|
|
2,005
|
|
||||
Deferred income taxes
|
11,144
|
|
|
(11,144
|
)
|
|
—
|
|
|||
Other long term assets
|
299
|
|
|
|
|
299
|
|
||||
|
|
|
|
|
|
||||||
Total assets
|
$
|
85,975
|
|
|
$
|
(12,979
|
)
|
|
$
|
72,996
|
|
|
|
|
|
|
|
||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Current portion of long-term debt
|
$
|
2,908
|
|
|
|
|
$
|
2,908
|
|
||
Accounts payable
|
17,732
|
|
|
|
|
17,732
|
|
||||
Accrued payroll and related expenses
|
3,203
|
|
|
|
|
3,203
|
|
||||
Other accrued expenses
|
1,008
|
|
|
|
|
1,008
|
|
||||
Customer deposits
|
1,553
|
|
|
|
|
1,553
|
|
||||
Total current liabilities
|
26,404
|
|
|
—
|
|
|
26,404
|
|
|||
|
|
|
|
|
|
||||||
Long-term debt
|
28,479
|
|
|
|
|
28,479
|
|
||||
Other long-term liabilities
|
708
|
|
|
|
|
708
|
|
||||
Total liabilities
|
55,591
|
|
|
—
|
|
|
55,591
|
|
|||
|
|
|
|
|
|
||||||
STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||||||
Preferred stock, $0.01 par value:
500,000 shares authorized; none issued or outstanding |
—
|
|
|
|
|
|
|||||
Common stock, $0.01 par value:
Authorized: 50,000,000 shares Issued: 11,146,571 shares Outstanding: 10,126,767 shares |
111
|
|
|
|
|
111
|
|
||||
Additional paid-in capital
|
44,302
|
|
|
|
|
44,302
|
|
||||
Retained earnings/(accumulated deficit)
|
(12,575
|
)
|
|
(12,979
|
)
|
|
(25,554
|
)
|
|||
Treasury stock, at cost: 1,019,804 shares
|
(1,454
|
)
|
|
|
|
(1,454
|
)
|
||||
Total stockholders’ equity
|
30,384
|
|
|
(12,979
|
)
|
|
17,405
|
|
|||
Total liabilities and stockholders’ equity
|
$
|
85,975
|
|
|
$
|
(12,979
|
)
|
|
$
|
72,996
|
|
|
Consolidated Balance Sheet
|
||||||||||
|
June 27, 2014
|
||||||||||
|
As reported
|
|
Adjustment
|
|
Restated
|
||||||
|
|
|
(in thousands)
|
|
|
||||||
ASSETS
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
||||||
Cash
|
$
|
679
|
|
|
|
|
$
|
679
|
|
||
Accounts receivable, net of allowance
|
23,245
|
|
|
|
|
23,245
|
|
||||
Inventories, net
|
21,152
|
|
|
(443
|
)
|
|
20,709
|
|
|||
Deferred income taxes
|
1,382
|
|
|
(1,382
|
)
|
|
—
|
|
|||
Other current assets
|
2,107
|
|
|
|
|
2,107
|
|
||||
Total current assets
|
48,565
|
|
|
(1,825
|
)
|
|
46,740
|
|
|||
|
|
|
|
|
|
||||||
Fixed assets, net
|
$
|
18,489
|
|
|
|
|
$
|
18,489
|
|
||
Intangible assets, net
|
2,456
|
|
|
|
|
2,456
|
|
||||
Goodwill
|
2,005
|
|
|
|
|
2,005
|
|
||||
Deferred income taxes
|
12,634
|
|
|
(12,634
|
)
|
|
—
|
|
|||
Other long term assets
|
238
|
|
|
|
|
238
|
|
||||
|
|
|
|
|
|
||||||
Total assets
|
$
|
84,387
|
|
|
$
|
(14,459
|
)
|
|
$
|
69,928
|
|
|
|
|
|
|
|
||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Current portion of long-term debt
|
$
|
2,908
|
|
|
|
|
$
|
2,908
|
|
||
Accounts payable
|
14,340
|
|
|
|
|
14,340
|
|
||||
Accrued payroll and related expenses
|
2,869
|
|
|
|
|
2,869
|
|
||||
Other accrued expenses
|
947
|
|
|
|
|
947
|
|
||||
Customer deposits
|
928
|
|
|
|
|
928
|
|
||||
Total current liabilities
|
21,992
|
|
|
—
|
|
|
21,992
|
|
|||
|
|
|
|
|
|
||||||
Long-term debt
|
31,578
|
|
|
|
|
31,578
|
|
||||
Other long-term liabilities
|
153
|
|
|
|
|
153
|
|
||||
Total liabilities
|
53,723
|
|
|
—
|
|
|
53,723
|
|
|||
|
|
|
|
|
|
||||||
STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||||||
Preferred stock, $0.01 par value:
500,000 shares authorized; none issued or outstanding |
—
|
|
|
|
|
|
|||||
Common stock, $0.01 par value:
Authorized: 50,000,000 shares Issued: 11,072,821 shares Outstanding: 10,053,956 shares |
111
|
|
|
|
|
111
|
|
||||
Additional paid-in capital
|
44,132
|
|
|
|
|
44,132
|
|
||||
Retained earnings/(accumulated deficit)
|
(12,129
|
)
|
|
(14,459
|
)
|
|
(26,588
|
)
|
|||
Treasury stock, at cost: 1,018,865 shares
|
(1,450
|
)
|
|
|
|
(1,450
|
)
|
||||
Total stockholders’ equity
|
30,664
|
|
|
(14,459
|
)
|
|
16,205
|
|
|||
Total liabilities and stockholders’ equity
|
$
|
84,387
|
|
|
$
|
(14,459
|
)
|
|
$
|
69,928
|
|
|
Consolidated Balance Sheet
|
||||||||||
|
March 28, 2014
|
||||||||||
|
As reported
|
|
Adjustment
|
|
Restated
|
||||||
|
|
|
(in thousands)
|
|
|
||||||
ASSETS
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
||||||
Cash
|
$
|
652
|
|
|
|
|
$
|
652
|
|
||
Accounts receivable, net of allowance
|
25,083
|
|
|
|
|
25,083
|
|
||||
Inventories, net
|
20,103
|
|
|
(358
|
)
|
|
19,745
|
|
|||
Deferred income taxes
|
1,382
|
|
|
(1,382
|
)
|
|
—
|
|
|||
Other current assets
|
1,124
|
|
|
|
|
1,124
|
|
||||
Total current assets
|
48,344
|
|
|
(1,740
|
)
|
|
46,604
|
|
|||
|
|
|
|
|
|
||||||
Fixed assets, net
|
$
|
19,261
|
|
|
|
|
$
|
19,261
|
|
||
Intangible assets, net
|
2,520
|
|
|
|
|
2,520
|
|
||||
Goodwill
|
2,005
|
|
|
|
|
2,005
|
|
||||
Deferred income taxes
|
12,637
|
|
|
(12,637
|
)
|
|
—
|
|
|||
Other long term assets
|
339
|
|
|
|
|
339
|
|
||||
|
|
|
|
|
|
||||||
Total assets
|
$
|
85,106
|
|
|
$
|
(14,377
|
)
|
|
$
|
70,729
|
|
|
|
|
|
|
|
||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Current portion of long-term debt
|
$
|
2,908
|
|
|
|
|
$
|
2,908
|
|
||
Accounts payable
|
15,304
|
|
|
|
|
15,304
|
|
||||
Accrued payroll and related expenses
|
2,557
|
|
|
|
|
2,557
|
|
||||
Other accrued expenses
|
960
|
|
|
|
|
960
|
|
||||
Customer deposits
|
438
|
|
|
|
|
438
|
|
||||
Total current liabilities
|
22,167
|
|
|
—
|
|
|
22,167
|
|
|||
|
|
|
|
|
|
||||||
Long-term debt
|
32,229
|
|
|
|
|
32,229
|
|
||||
Other long-term liabilities
|
158
|
|
|
|
|
158
|
|
||||
Total liabilities
|
54,554
|
|
|
—
|
|
|
54,554
|
|
|||
|
|
|
|
|
|
||||||
STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||||||
Preferred stock, $0.01 par value:
500,000 shares authorized; none issued or outstanding |
—
|
|
|
|
|
|
|||||
Common stock, $0.01 par value:
Authorized: 50,000,000 shares Issued: 11,107,115 shares Outstanding: 10,090,661 shares |
112
|
|
|
|
|
112
|
|
||||
Additional paid-in capital
|
44,032
|
|
|
|
|
44,032
|
|
||||
Retained earnings/(accumulated deficit)
|
(12,152
|
)
|
|
(14,377
|
)
|
|
(26,529
|
)
|
|||
Treasury stock, at cost: 1,016,454 shares
|
(1,440
|
)
|
|
|
|
(1,440
|
)
|
||||
Total stockholders’ equity
|
30,552
|
|
|
(14,377
|
)
|
|
16,175
|
|
|||
Total liabilities and stockholders’ equity
|
$
|
85,106
|
|
|
$
|
(14,377
|
)
|
|
$
|
70,729
|
|
|
Consolidated Balance Sheet
|
||||||||||
|
December 27, 2013
|
||||||||||
|
As reported
|
|
Adjustment
|
|
Restated
|
||||||
|
|
|
(in thousands)
|
|
|
||||||
ASSETS
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
||||||
Cash
|
$
|
1,733
|
|
|
|
|
$
|
1,733
|
|
||
Accounts receivable, net of allowance
|
21,729
|
|
|
|
|
21,729
|
|
||||
Inventories, net
|
21,449
|
|
|
(232
|
)
|
|
21,217
|
|
|||
Deferred income taxes
|
1,382
|
|
|
|
|
1,382
|
|
||||
Other current assets
|
1,002
|
|
|
|
|
1,002
|
|
||||
Total current assets
|
47,295
|
|
|
(232
|
)
|
|
47,063
|
|
|||
|
|
|
|
|
|
|
|||||
Fixed assets, net
|
19,107
|
|
|
|
|
19,107
|
|
||||
Intangible assets, net
|
2,583
|
|
|
|
|
2,583
|
|
||||
Goodwill
|
2,005
|
|
|
|
|
2,005
|
|
||||
Deferred income taxes
|
12,281
|
|
|
|
|
12,281
|
|
||||
Other long term assets
|
416
|
|
|
|
|
416
|
|
||||
|
|
|
|
|
|
|
|||||
Total assets
|
$
|
83,687
|
|
|
$
|
(232
|
)
|
|
$
|
83,455
|
|
|
|
|
|
|
|
|
|||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|||||
Current liabilities:
|
|
|
|
|
|
|
|||||
Current portion of long-term debt
|
$
|
2,908
|
|
|
|
|
$
|
2,908
|
|
||
Accounts payable
|
13,295
|
|
|
|
|
13,295
|
|
||||
Accrued payroll and related expenses
|
2,040
|
|
|
|
|
2,040
|
|
||||
Other accrued expenses
|
894
|
|
|
|
|
894
|
|
||||
Customer deposits
|
1,199
|
|
|
|
|
1,199
|
|
||||
Total current liabilities
|
20,336
|
|
|
—
|
|
|
20,336
|
|
|||
|
|
|
|
|
|
|
|||||
Long-term debt
|
32,193
|
|
|
|
|
32,193
|
|
||||
Other long-term liabilities
|
163
|
|
|
|
|
163
|
|
||||
Total liabilities
|
52,692
|
|
|
—
|
|
|
52,692
|
|
|||
|
|
|
|
|
|
|
|||||
STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|||||
Preferred stock, $0.01 par value:
500,000 shares authorized; none issued or outstanding |
|
|
|
|
|
|
|||||
Common stock, $0.01 par value:
Authorized: 50,000,000 shares Issued: 11,046,172 shares Outstanding: 10,029,718 shares |
111
|
|
|
|
|
111
|
|
||||
Additional paid-in capital
|
43,906
|
|
|
|
|
43,906
|
|
||||
Retained earnings/(accumulated deficit)
|
(11,582
|
)
|
|
(232
|
)
|
|
(11,814
|
)
|
|||
Treasury stock, at cost: 1,016,454 shares
|
(1,440
|
)
|
|
|
|
(1,440
|
)
|
||||
Total stockholders’ equity
|
30,995
|
|
|
(232
|
)
|
|
30,763
|
|
|||
Total liabilities and stockholders’ equity
|
$
|
83,687
|
|
|
$
|
(232
|
)
|
|
$
|
83,455
|
|
|
Three Months Ended
|
||||||||||
|
December 27, 2013
|
||||||||||
|
As reported
|
|
Adjustment
|
|
Restated
|
||||||
|
|
|
|
|
|
||||||
Net sales
|
$
|
32,138
|
|
|
|
|
$
|
32,138
|
|
||
Cost of sales
|
28,528
|
|
|
232
|
|
|
28,760
|
|
|||
Gross profit
|
3,610
|
|
|
(232
|
)
|
|
3,378
|
|
|||
|
|
|
|
|
|
|
|||||
Selling and administrative
expenses |
3,791
|
|
|
|
|
3,791
|
|
||||
Impairment of goodwill and
other intangibles |
—
|
|
|
|
|
—
|
|
||||
Restatement and related expenses
|
1,156
|
|
|
|
|
1,156
|
|
||||
Operating profit/(loss)
|
(1,337
|
)
|
|
(232
|
)
|
|
(1,569
|
)
|
|||
|
|
|
|
|
|
|
|||||
Interest and financing expense
|
360
|
|
|
|
|
360
|
|
||||
Other expense/(income)
|
19
|
|
|
|
|
19
|
|
||||
Income/(loss) before income taxes
|
(1,716
|
)
|
|
(232
|
)
|
|
(1,948
|
)
|
|||
|
|
|
|
|
|
|
|||||
Provision for/(benefit from)
income taxes |
(617
|
)
|
|
|
|
(617
|
)
|
||||
Net income/(loss)
|
$
|
(1,099
|
)
|
|
$
|
(232
|
)
|
|
$
|
(1,331
|
)
|
|
|
|
|
|
|
||||||
Net income/(loss) per common and common equivalent share:
|
|
|
|
|
|
|
|||||
Basic
|
$
|
(0.11
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.14
|
)
|
Diluted
|
(0.11
|
)
|
|
(0.03
|
)
|
|
(0.14
|
)
|
|||
|
|
|
|
|
|
||||||
Weighted average number of common and common equivalent shares outstanding:
|
|
|
|
|
|
|
|||||
Basic
|
9,780,896
|
|
|
|
|
9,780,896
|
|
||||
Diluted
|
9,780,896
|
|
|
|
|
9,780,896
|
|
|
Year Ended
|
||||||||||
|
September 30, 2014
|
||||||||||
|
As reported
|
|
Adjustment
|
|
Restated
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
(in thousands)
|
|
|
||||||
Net income/(loss)
|
$
|
(2,092
|
)
|
|
(12,979
|
)
|
|
(15,071
|
)
|
||
Non-cash adjustments:
|
|
|
|
|
|
||||||
Stock-based compensation
|
542
|
|
|
|
|
542
|
|
||||
Depreciation and amortization
|
4,846
|
|
|
|
|
4,846
|
|
||||
Impairment of goodwill and other intangibles
|
—
|
|
|
|
|
—
|
|
||||
Directors’ fees paid in stock
|
—
|
|
|
|
|
—
|
|
||||
Loss on sale of fixed assets
|
2
|
|
|
|
|
2
|
|
||||
Reserve for doubtful accounts
|
73
|
|
|
|
|
73
|
|
||||
Deferred tax expense/(benefit)
|
776
|
|
|
12,258
|
|
|
13,034
|
|
|||
|
|
|
|
|
|
||||||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
5,525
|
|
|
|
|
5,525
|
|
||||
Inventory
|
(1,343
|
)
|
|
721
|
|
|
(622
|
)
|
|||
Other current assets
|
(2,987
|
)
|
|
|
|
(2,987
|
)
|
||||
Other long term assets
|
15
|
|
|
|
|
15
|
|
||||
Accounts payable
|
902
|
|
|
|
|
902
|
|
||||
Accrued expenses
|
936
|
|
|
|
|
936
|
|
||||
Customer deposits
|
1,366
|
|
|
|
|
1,366
|
|
||||
Other long term liabilities
|
541
|
|
|
|
|
541
|
|
||||
Net cash flows from operating activities
|
9,102
|
|
|
—
|
|
|
9,102
|
|
|||
|
|
|
|
|
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Purchases of fixed assets
|
(4,465
|
)
|
|
|
|
(4,465
|
)
|
||||
Proceeds from disposal of fixed assets
|
323
|
|
|
|
|
323
|
|
||||
Net cash flows from investing activities
|
(4,142
|
)
|
|
—
|
|
|
(4,142
|
)
|
|||
|
|
|
|
|
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Advances from revolving line of credit
|
56,016
|
|
|
|
|
56,016
|
|
||||
Repayments of revolving line of credit
|
(59,846
|
)
|
|
|
|
(59,846
|
)
|
||||
Borrowings under other loan agreements
|
1,300
|
|
|
|
|
1,300
|
|
||||
Repayments under other loan agreements
|
(2,887
|
)
|
|
|
|
(2,887
|
)
|
||||
Debt issuance costs
|
(2
|
)
|
|
|
|
(2
|
)
|
||||
Proceeds from exercise of stock options
|
19
|
|
|
|
|
19
|
|
||||
Proceeds from employee stock plan purchases
|
—
|
|
|
|
|
—
|
|
||||
Shares withheld for payment of taxes upon vesting of restricted stock
|
(79
|
)
|
|
|
|
(79
|
)
|
||||
Net cash flows from financing activities
|
(5,479
|
)
|
|
—
|
|
|
(5,479
|
)
|
|||
|
|
|
|
|
|
||||||
Net cash flows for the period
|
(519
|
)
|
|
|
|
(519
|
)
|
||||
Cash and cash equivalents, beginning of period
|
2,499
|
|
|
|
|
2,499
|
|
||||
Cash and cash equivalents, end of period
|
$
|
1,980
|
|
|
$
|
—
|
|
|
$
|
1,980
|
|
|
|
|
|
|
|
||||||
Supplemental cash flow information:
|
|
|
|
|
|
||||||
Interest paid
|
$
|
1,556
|
|
|
|
|
1,556
|
|
Income taxes paid
|
9
|
|
|
|
|
9
|
|
||||
|
|
|
|
|
|
||||||
Non-cash transactions:
|
|
|
|
|
|
||||||
Fixed assets purchased with extended payment terms
|
322
|
|
|
|
|
322
|
|
Interest paid
|
$
|
1,177
|
|
|
|
|
$
|
1,177
|
|
||
Income taxes paid
|
12
|
|
|
|
|
12
|
|
||||
|
|
|
|
|
|
||||||
Non-cash transactions:
|
|
|
|
|
|
||||||
Fixed assets purchased with extended payment terms
|
466
|
|
|
|
|
466
|
|
|
Six Months Ended
|
||||||||||
|
March 28, 2014
|
||||||||||
|
As reported
|
|
Adjustment
|
|
Restated
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
(in thousands)
|
|
|
||||||
Net income/(loss)
|
$
|
(1,669
|
)
|
|
(14,377
|
)
|
|
(16,046
|
)
|
||
Non-cash adjustments:
|
|
|
|
|
|
||||||
Stock-based compensation
|
287
|
|
|
|
|
287
|
|
||||
Depreciation and amortization
|
2,419
|
|
|
|
|
2,419
|
|
||||
Impairment of goodwill & other intg.
|
|
|
|
|
—
|
|
|||||
Directors' fees paid in stock
|
—
|
|
|
|
|
—
|
|
||||
gain/loss sale of fixed assets
|
|
|
|
|
—
|
|
|||||
Reserve for doubtful accounts
|
433
|
|
|
|
|
433
|
|
||||
Deferred tax expense/benefit
|
(985
|
)
|
|
14,019
|
|
|
13,034
|
|
|||
|
|
|
|
|
|
||||||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
2,429
|
|
|
|
|
2,429
|
|
||||
Inventory
|
1,801
|
|
|
358
|
|
|
2,159
|
|
|||
Other current assets
|
(514
|
)
|
|
|
|
(514
|
)
|
||||
Other long term assets
|
(18
|
)
|
|
|
|
(18
|
)
|
||||
Accounts payable
|
(2,009
|
)
|
|
|
|
(2,009
|
)
|
||||
Accrued expenses
|
242
|
|
|
|
|
242
|
|
||||
Customer deposits
|
251
|
|
|
|
|
251
|
|
||||
Other long term liabilities
|
(9
|
)
|
|
|
|
(9
|
)
|
||||
Net cash flows from operating activities
|
2,658
|
|
|
—
|
|
|
2,658
|
|
|||
|
|
|
|
|
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Purchases of fixed assets
|
(3,099
|
)
|
|
|
|
(3,099
|
)
|
||||
Grant proceeds from outside parties
|
|
|
|
|
—
|
|
|||||
Proceeds from (net cost of) disposal of fixed assets
|
323
|
|
|
|
|
323
|
|
||||
Net cash flows from investing activities
|
(2,776
|
)
|
|
—
|
|
|
(2,776
|
)
|
|||
|
|
|
|
|
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Advances from revolving line of credit
|
29,115
|
|
|
|
|
29,115
|
|
||||
Repayments of revolving line of credit
|
(30,650
|
)
|
|
|
|
(30,650
|
)
|
||||
Borrowings under other loan agreements
|
1,300
|
|
|
|
|
1,300
|
|
||||
Repayments under other loan agreements
|
(1,432
|
)
|
|
|
|
(1,432
|
)
|
||||
Debt issuance costs
|
(2
|
)
|
|
|
|
(2
|
)
|
||||
Proceeds from exercise of stock options
|
17
|
|
|
|
|
17
|
|
||||
Proceeds from employee stock plan purchases
|
—
|
|
|
|
|
—
|
|
||||
Shares withheld for payment of taxes upon vesting of restricted stock
|
(77
|
)
|
|
|
|
(77
|
)
|
||||
Net cash flows from financing activities
|
(1,729
|
)
|
|
—
|
|
|
(1,729
|
)
|
|||
|
|
|
|
|
|
||||||
Net cash flows for the period
|
(1,847
|
)
|
|
—
|
|
|
(1,847
|
)
|
|||
Cash and cash equivalents, beginning of period
|
2,499
|
|
|
|
|
2,499
|
|
||||
Cash and cash equivalents, end of period
|
$
|
652
|
|
|
$
|
—
|
|
|
$
|
652
|
|
|
|
|
|
|
|
Interest paid
|
403
|
|
|
|
|
403
|
|
||||
Income taxes paid
|
11
|
|
|
|
|
11
|
|
||||
|
|
|
|
|
|
||||||
Non-cash transactions:
|
|
|
|
|
|
||||||
Fixed assets purchased with extended payment terms
|
|
|
|
|
—
|
|
Item 9A.
|
CONTROLS AND PROCEDURES
|
(i)
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and asset dispositions of the Company;
|
(ii)
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
|
(iii)
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on financial statements.
|
Item 9B.
|
OTHER INFORMATION
|
|
|
IEC Electronics Corp.
|
|
|
(Registrant)
|
|
|
|
Dated: May 11, 2015
|
By:
|
/s/ Jeffery T. Schlarbaum
|
|
|
Jeffery T. Schlarbaum
|
|
|
Chief Executive Officer and President
|
|
|
|
Dated: May 11, 2015
|
By:
|
/s/ Michael T. Williams
|
|
|
Michael T. Williams
|
|
|
Vice President of Finance and Chief Financial Officer
|
Exhibit No.
|
Title
|
2.1
|
Stock Purchase Agreement, dated December 16, 2009, by and among IEC Electronics Corp, Crane International Holdings, Inc. and General Technology Corporation (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed December 23, 2009)
|
2.2
|
Asset Purchase Agreement dated December 17, 2010 by and among CSCB, Inc., Southern California Braiding Co., Inc., Leo P. McIntyre, Trustee of the Exemption Trust Created Under The McIntyre Family Trust dated October 4, 1993 as Amended and Restated in its Entirety dated July 12, 2005, Leo P. McIntyre, Trustee of the McIntyre Survivor’s Trust, Restatement dated June 13, 2006, Created under the McIntyre Family Trust dated October 4, 1993, Leo P. McIntyre and Craig Pfefferman, and executed by IEC Electronics Corp. solely as guarantor of certain obligations thereunder (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed December 23, 2010)
|
2.4
|
Agreement and Plan of Merger of IEC Electronics into DFT Holdings Corp. (incorporated by reference to Exhibit 3.3 to the Company’s Registration Statement on Form S-1, Registration No. 33-56498)
|
3.1
|
Amended and Restated Certificate of Incorporation of DFT Holdings Corp. (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1, Registration No. 33-56498)
|
3.2
|
Amended and Restated By-Laws of the Company as of October 1, 2010 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed October 7, 2010)
|
3.4
|
Certificate of Merger of IEC Electronics Corp. into DFT Holdings Corp. - New York. (incorporated by reference to Exhibit 3.4 to the Company’s Registration Statement on Form S-1, Registration No. 33-56498)
|
3.5
|
Certificate of Ownership and Merger merging IEC Electronics Corp. into DFT Holdings Corp. - Delaware (incorporated by reference to Exhibit 3.5 to the Company’s Registration Statement on Form S-1, Registration No. 33-56498)
|
3.6
|
Certificate of Merger of IEC Acquisition Corp. into IEC Electronics Corp. (incorporated by reference to Exhibit 3.6 to the Company’s Registration Statement on Form S-1, Registration No. 33-56498)
|
3.7
|
Certificate of Amendment of Certificate of Incorporation of IEC Electronics Corp. filed with the Secretary of State of the State of Delaware on Feb. 26, 1998 (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 27, 1998)
|
3.8
|
Certificate of Designations of the Series A Preferred Stock of IEC Electronics Corp. filed with the Secretary of State of the State of Delaware on June 3, 1998 (incorporated by reference to Exhibit 3.8 of the Company’s Annual Report on Form 10-K for the year ended September 30, 1998)
|
3.9
|
Certificate of Amendment to Certificate of Designations of the Series A Preferred Stock of IEC Electronics Corp. filed with the Secretary of State of the State of Delaware on August 1, 2014 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K/A filed August 1, 2014)
|
3.10
|
Certificate of Designations of the Series A Junior Participating Preferred Stock of IEC Electronics Corp. filed with the Secretary of State of the State of Delaware on July 31, 2014 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K/A filed August 1, 2014)
|
4.1
|
Specimen of Certificate for Common Stock (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1, Registration No. 33-56498)
|
4.2
|
Tax Benefit Preservation Plan Rights Agreement, dated as of July 31, 2014, by and between IEC Electronics Corp. and Registrar and Transfer Company, which includes the Form of Certificate of Designation as Exhibit A, the Form of Rights Certificate as Exhibit B, and the Form of Summary of Rights as Exhibit C (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed July 31, 2014)
|
10.1
|
Amended and Restated Credit Facility Agreement, dated as of December 16, 2009, by and among IEC Electronics Corp. and Manufacturers and Traders Trust Company (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 23, 2009)
|
10.2
|
Amendment 1, dated as of February 26, 2010, to the Amended and Restated Credit Facility Agreement, dated as of December 16, 2009, by and among IEC Electronics Corp. and Manufacturers and Traders Trust Company (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 26, 2010)
|
10.3
|
Second Amended and Restated Credit Facility Agreement, dated as of July 30, 2010, by and among IEC Electronics Corp. and Manufacturers and Traders Trust Company (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed August 5, 2010)
|
10.4
|
Third Amended and Restated Credit Facility Agreement dated December 17, 2010 by and between IEC Electronics Corp. and Manufacturers and Traders Trust Company (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 23, 2010)
|
10.5
|
Letter Dated November 17, 2011 from Manufacturers and Traders Trust Company, accepted by IEC Electronics Corp., related to Third Amended and Restated Credit Agreement dated December 17, 2010 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed November 21, 2011)
|
10.6
|
Fourth Amended and Restated Credit Facility Agreement, dated January 18, 2013, between IEC Electronics Corp. and Manufacturers and Traders Trust Company (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 25, 2013
|
10.7
|
ISDA Master Agreement dated January 18, 2013 between IEC Electronics Corp. and Manufacturers and Traders Trust Company (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated January 25, 2013
|
10.8
|
Schedule to ISDA Master Agreement dated January 18, 2013 between IEC Electronics Corp. and Manufacturers and Traders Trust Company (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated January 25, 2013
|
10.9
|
Confirmation of Swap Transaction between IEC Electronics Corp. and Manufacturers and Traders Trust Company entered into January 18, 2013 (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K dated January 25, 2013
|
10.10
|
First Amendment to Fourth Amended and Restated Credit Facility Agreement, dated as of May 15, 2013 by and between IEC Electronics Corp. and Manufacturers and Traders Trust Company (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 29, 2013)
|
10.11
|
Second Amendment to Fourth Amended and Restated Credit Facility Agreement, dated as of August 6, 2013 by and between IEC Electronics Corp. and Manufacturers and Traders Trust Company (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed August 8, 2013)
|
10.12
|
Third Amendment to Fourth Amended and Restated Credit Facility Agreement, dated as of November 8, 2013 by and between IEC Electronics Corp. and Manufacturers and Traders Trust Company (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed November 15, 2013)
|
10.13
|
Fourth Amendment to Fourth Amended and Restated Credit Facility Agreement, dated as of December 13, 2013 by and between IEC Electronics Corp. and Manufacturers and Traders Trust Company (incorporated by reference Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 19, 2013)
|
10.14
|
Fifth Amendment to Fourth Amended and Restated Credit Facility Agreement, dated February 4, 2014, by and between IEC Electronics Corp. and Manufacturers and Traders Trust Company (incorporated by reference Exhibit 10.1 to the Company’s Current Report on Form 8-K filed February 5, 2014)
|
10.15*
|
Form of Indemnity Agreement between IEC Electronics Corp. and each of its directors and executive officers (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended July 2, 1993)
|
10.16*
|
IEC Electronics Corp. 2001 Stock Option and Incentive Plan, as amended on February 4, 2009 (incorporated by reference to Exhibit 10.4 to the Company’s Annual Report on Form 10-K for the year ended September 30, 2009)
|
10.17*
|
Form of Incentive Stock Option Agreement pursuant to 2001 Stock Option and Incentive Plan (incorporated by reference to Exhibit 10.5 to the Company’s Annual Report on Form 10-K for the year ended September 30, 2009)
|
10.18*
|
Form of Outside Director Stock Option Agreement pursuant to 2001 Stock Option and Incentive Plan (incorporated by reference to Exhibit 10.6 to the Company’s Annual Report on Form 10-K for the year ended September 30, 2009)
|
10.19*
|
Form of Restricted Stock Award Agreement pursuant to 2001 Stock Option and Incentive Plan (incorporated by reference to Exhibit 10.7 to the Company’s Annual Report on Form 10-K for the year ended September 30, 2009)
|
10.20*
|
IEC Electronics Corp. 2010 Omnibus Incentive Compensation Plan, as amended May 23, 2011 (incorporated by reference to Exhibit 10.12 to the Company’s Annual Report on Form 10-K for the year ended September 30, 2011)
|
10.21*
|
Form of Incentive Stock Option Agreement pursuant to 2010 Omnibus Incentive Compensation Plan (incorporated by reference to Exhibit 10.12 to the Company’s Annual Report on Form 10-K for the year ended September 30, 2012)
|
10.22*
|
Form of Employee Restricted Stock Agreement pursuant to 2010 Omnibus Incentive Compensation Plan (incorporated by reference to Exhibit 10.13 to the Company’s Annual Report on Form 10-K for the year ended September 30, 2012)
|
10.23*
|
Form of Director Restricted Stock Agreement pursuant to 2010 Omnibus Incentive Compensation Plan (incorporated by reference to Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the year ended September 30, 2012)
|
10.24*
|
Employee Stock Purchase Plan, effective October 1, 2011 (incorporated by reference to Appendix A to the Company’s Proxy Statement on Schedule 14A filed on December 22, 2011)
|
10.25*
|
Employee Stock Purchase Plan Amendment 1, effective May 21, 2014 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed August 5, 2014)
|
10.26*
|
Employment Agreement between IEC Electronics Corp. and W. Barry Gilbert, effective April 24, 2009 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed April 30, 2009)
|
10.27*
|
First Amendment, dated September 17, 2010 and effective October 1, 2010, to the Employment Agreement, dated April 24, 2009 between IEC Electronics Corp. and W. Barry Gilbert (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed October 1, 2010)
|
10.28*
|
Amended Salary Arrangement with Chief Executive Officer, effective November 1, 2011 (incorporated by reference to Exhibit 10.16 to the Company’s Annual Report on Form 10-K for the year ended September 30, 2011)
|
10.29*
|
Amended and Restated Employment Agreement between IEC Electronics Corp. and W. Barry Gilbert dated December 16, 2013 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed December 19, 2013)
|
10.30*
|
Salary Continuation and Non-Competition Agreement dated and effective as of October 1, 2010 between IEC Electronics Corp. and Jeffrey T. Schlarbaum (incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K for the year ended September 30, 2010)
|
10.31*
|
Supplemental Salary Continuation and Non-Competition Agreement and Release of Claims, dated February 25, 2013, between IEC Electronics Corp. and Jeffrey T. Schlarbaum (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 29, 2013)
|
10.32*
|
Restricted Stock Award Agreement Amendment 1, dated February 25, 2013, between IEC Electronics Corp. and Jeffrey T. Schlarbaum (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 28, 2013)
|
10.33*
|
Salary Continuation and Non-Competition Agreement dated and effective as of October 1, 2010 between IEC Electronics Corp. and Donald S. Doody (incorporated by reference to Exhibit 10.23 to the Company’s Annual Report on Form 10-K for the year ended September 30, 2010)
|
10.34*
|
Resignation From Employment and Consulting Agreement, dated January 9, 2014, between IEC Electronics Corp. and Donald S. Doody (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed January 9, 2014)
|
10.35*
|
Engagement Letter dated December 28, 2011 between IEC Electronics Corp. and Insero and Company CPAs, P.C. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed December 28, 2011)
|
10.36*
|
May 25, 2012 Letter amending Engagement Letter dated December 28, 2011 between IEC Electronics Corp. and Insero and Company CPAs, P.C. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 30, 2012)
|
10.37*
|
Letter terminating chief financial officer services, effective as of June 1, 2014, with Insero & Company, CPAs, P.C. (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed August 5, 2014)
|
10.38*
|
February 11, 2014 letter agreement between IEC Electronics Corp. and Michael T. Williams (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed February 11, 2014)
|
10.39*
|
Employment Agreement, dated as of February 11, 2014, between IEC Electronics Corp. and Michael T. Williams (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed February 11, 2014)
|
10.40*
|
Salary Continuation and Non-Competition Agreement between IEC Electronics Corp. and Brett E. Mancini, effective January 29, 2014 (incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q filed May 7, 2014)
|
10.41*
|
Summary of Compensation Arrangements with Brett E. Mancini (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed May 7, 2014)
|
10.42*
|
IEC Electronics Corp. Management Deferred Compensation Plan, effective January 1, 2009 (incorporated by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K for the year ended September 30, 2009)
|
10.43*
|
IEC Electronics Corp. Management Deferred Compensation Plan, effective January 1, 2009 as amended November 5, 2014
|
10.44*
|
IEC Electronics Corp. Board of Directors Deferred Compensation Plan, effective January 1, 2009 (incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K for the year ended September 30, 2009)
|
10.45*
|
Amended Salary Arrangement with Executive Officers (incorporated by reference to Exhibit 10.31 to the Company’s Annual Report on Form 10-K for the year ended September 30, 2012)
|
10.46*
|
Summary of 2013 Management Incentive Plan (incorporated by reference to Exhibit 10.32 to the Company’s Annual Report on Form 10-K for the year ended September 30, 2012)
|
10.47*
|
Summary of 2013 Long Term Incentive Plan (incorporated by reference to Exhibit 10.33 to the Company’s Annual Report on Form 10-K for the year ended September 30, 2012)
|
10.48*
|
Summary of Modifications to Compensation for Independent Directors (incorporated by reference to Exhibit 10.34 to the Company’s Annual Report on Form 10-K for the year ended September 30, 2012)
|
10.49*
|
Salary Arrangements with Executive Officers (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 20, 2013)
|
10.50*
|
Summary of Management Incentive Plan for Fiscal 2014 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on November 20, 2013)
|
10.51*
|
Summary of Long Term Incentive Plan for Fiscal 2014 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on November 20, 2013)
|
10.52*
|
Compensation Arrangements with Executive Officers for Fiscal 2015
|
16.1
|
Letter from EFP Rotenberg LLP dated September 10, 2014 (incorporated by reference to Exhibit 16.1 to the Company’s Current Report on Form 8-K filed September 11, 2014)
|
21.1
|
Subsidiaries of IEC Electronics Corp.
|
23.1
|
Consent of Independent Registered Public Accounting Firm
|
23.2
|
Consent of Former Independent Registered Public Accounting Firm
|
31.1
|
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2
|
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
32.1
|
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101
|
The following items from this Annual Report on Form 10-K formatted in Extensible Business Reporting Language: (i) Consolidated Balance Sheets, (ii) Consolidated Income Statements, (iii) Consolidated Statements of Changes in Stockholders’ Equity, (iv) Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements.
|
a)
|
Deferral elections for Salary shall be made before the beginning of the calendar year during which the Participant will perform the services to which the Salary relates. Any election to defer shall be made in accordance with Section 5.4.; and
|
b)
|
Deferral elections for Bonus shall be made no later than the close of the Company’s fiscal year preceding a Performance Period, except, however, a deferral election may be made on or before the date that is six months prior to the end of a Performance Period, provided:
|
(i)
|
the Participant performs services continuously from the later of: (x) the beginning of the Performance Period; or (y) the date the Company establishes the performance criteria, through the date the Participant makes the deferral election; and
|
(ii)
|
the amount of the Bonus that will be earned is not readily ascertainable (e.g., the performance goals are not certain to be achieved at the time the Participant makes the deferral election).
|
a)
|
the Participant's separation from service (including death)
|
b)
|
the Participant becoming disabled
|
c)
|
a change in control
|
d)
|
a specified date fixed at time of initial deferral election
|
e)
|
the occurrence of an unforeseeable emergency (in the discretion of the Committee)
|
f)
|
earlier of specified date or separation from service
|
a)
|
the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or last for a continuous period of not less than 12 months; or
|
b)
|
the Participant is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or last for a continuous period of not less than 12 months, receiving disability compensation for at least three months under the Company’s disability insurance plan.
|
a)
|
an illness or accident of the Participant, the Participant’s spouse or a dependent of the Participant;
|
b)
|
a loss of the Participant’s property due to casualty; or
|
c)
|
such other extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, all as determined in the sole discretion of the Committee.
|
a)
|
a change of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A or to Item 5.01 of Form 8-K promulgated under Securities Exchange Act of 1934, as amended;
|
b)
|
any “person (as such term is used in Section 13(d) and 14(d)(2) of such Act) is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities; or
|
c)
|
during any period of 12 consecutive months, individuals who at the beginning of such period constitute the Board of Directors of the Company cease for any reason to constitute at least a majority thereof unless the election, or the nomination for election by the Company’s shareholders, of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period.
|
a)
|
the subsequent election must be made 12 months or more prior to the previously-selected payment date; and
|
b)
|
the new payment commencement date must be at least five years later than the previously-selected payment date; and
|
c)
|
the subsequent election may not be effective until at least 12 months after the date on which it is made.
|
(A)
|
Quarterly installment payments over a period of _____ years (not to exceed 10 years), payable on the first day of the month beginning the calendar quarter immediately following the distribution beginning date as set forth below, and continuing on the first day of the month beginning each subsequent calendar quarter until paid in full.
|
(B)
|
One lump sum payment
|
(A)
|
Date of separation from service
|
(B)
|
First anniversary of date of separation from service
|
(C)
|
Second anniversary of date of separation from service
|
(D)
|
Earlier of age ____ or date of separation from service
|
(E)
|
Age ____
|
(A)
|
Lump sum payment payable within two (2) months of date of disability
|
(B)
|
Quarterly installment payments over a period of ____ years (not to exceed 10 years), beginning on the first day of the month beginning the calendar quarter immediately following the date of disability and continuing on the first day of the month beginning each subsequent calendar quarter until paid in full.
|
Beneficiary Name:
|
___________________________________
|
Beneficiary Address:
|
___________________________________
|
(i)
|
Net Income Before Taxes and Incentives (“
NIBTI
”) -- Adjustments are made for gains or losses from non-operating events such as acquisition escrow clawbacks, and calculations will exclude the impact of unbudgeted legal and accounting fees and director’s and officer’s insurance payments arising from the restatement of the Company’s earnings described in its Annual Report on Form 10-K/A and Quarterly Report on Form 10-Q/A, each filed with the Securities and Exchange Commission on July 3, 2013.
|
(i)
|
as a precondition for payment of any MIP Awards, the Company must have audited NIBTI of $900,000 for fiscal 2015 (“
Plan Threshold
”),
|
(ii)
|
minimum plan entry performance levels for each MIP Goal for each Participant (“
Minimum(s)
”), set at a level in excess of prior fiscal year achievement to assure that stockholders receive the first portion of the benefit of increased value,
|
(iii)
|
a target goal (the “
Target
”) for each MIP Goal for each Participant based on the Company budget, and
|
(iv)
|
a maximum cap (“
Maximum
”) of 200% of the Target percentage of base salary.
|
Subsidiary
|
State of Incorporation
|
|
|
IEC Electronics Wire and Cable, Inc.
|
New York
|
|
|
IEC Electronics Corp.-Albuquerque
|
New Mexico
|
|
|
Dynamic Research and Testing Laboratories, LLC
|
New Mexico
|
|
|
Southern California Braiding, Inc.
|
Delaware
|
1.
|
I have reviewed this report on Form 10-K/A for the
years ended
September 30, 2014
for IEC Electronics Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and,
|
d.
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated: May 11, 2015
|
|
/s/ Jeffery T. Schlarbaum
|
|
|
Jeffery T. Schlarbaum
|
|
|
Chief Executive Officer and President
|
1.
|
I have reviewed this report on Form 10-K/A for the
years ended
September 30, 2014
for IEC Electronics Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and,
|
d.
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated: May 11, 2015
|
|
/s/ Michael T. Williams
|
|
|
Michael T. Williams
|
|
|
Vice President of Finance and Chief Financial Officer
|
1.
|
The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated: May 11, 2015
|
|
/s/ Jeffery T. Schlarbaum
|
|
|
Jeffery T. Schlarbaum
|
|
|
Chief Executive Officer and President
|
Dated: May 11, 2015
|
|
/s/ Michael T. Williams
|
|
|
Michael T. Williams
|
|
|
Vice President of Finance and Chief Financial Officer
|