Delaware
|
|
13-3458955
|
(State or other jurisdiction of
|
|
(I.R.S. Employer Identification No.)
|
incorporation or organization)
|
|
|
Large accelerated filer
¨
|
|
Accelerated filer
¨
|
Non-accelerated filer
¨
|
|
Smaller reporting company
x
|
Emerging growth company
¨
|
|
|
|
||
|
||
|
June 29,
2018 |
|
September 30,
2017 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash
|
$
|
—
|
|
|
$
|
—
|
|
Accounts receivable, net of allowance
|
19,668
|
|
|
17,887
|
|
||
Inventories
|
26,074
|
|
|
15,605
|
|
||
Other current assets
|
1,222
|
|
|
1,018
|
|
||
Total current assets
|
46,964
|
|
|
34,510
|
|
||
|
|
|
|
||||
Property, plant and equipment, net
|
18,806
|
|
|
17,777
|
|
||
Deferred income taxes
|
1,010
|
|
|
—
|
|
||
Other long term assets
|
127
|
|
|
160
|
|
||
Total assets
|
$
|
66,907
|
|
|
$
|
52,447
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current portion of long-term debt
|
$
|
1,172
|
|
|
$
|
987
|
|
Current portion of capital lease obligation
|
302
|
|
|
215
|
|
||
Accounts payable
|
17,582
|
|
|
13,046
|
|
||
Accrued payroll and related expenses
|
2,127
|
|
|
1,013
|
|
||
Other accrued expenses
|
501
|
|
|
444
|
|
||
Customer deposits
|
2,401
|
|
|
1,611
|
|
||
Total current liabilities
|
24,085
|
|
|
17,316
|
|
||
|
|
|
|
||||
Long-term debt
|
17,800
|
|
|
14,023
|
|
||
Long-term capital lease obligation
|
7,103
|
|
|
5,362
|
|
||
Other long-term liabilities
|
1,804
|
|
|
1,317
|
|
||
Total liabilities
|
50,792
|
|
|
38,018
|
|
||
Commitments and contingencies (Note 11)
|
|
|
|
||||
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: 11,303,571 and 11,252,566 shares, respectively
|
|
|
|
||||
Outstanding: 10,248,083 and 10,197,078 shares, respectively
|
102
|
|
|
102
|
|
||
Additional paid-in capital
|
47,186
|
|
|
46,789
|
|
||
Accumulated deficit
|
(29,584
|
)
|
|
(30,873
|
)
|
||
Treasury stock, at cost: 1,055,488 shares
|
(1,589
|
)
|
|
(1,589
|
)
|
||
Total stockholders’ equity
|
16,115
|
|
|
14,429
|
|
||
Total liabilities and stockholders’ equity
|
$
|
66,907
|
|
|
$
|
52,447
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 29,
2018 |
|
June 30,
2017 |
|
June 29,
2018 |
|
June 30,
2017 |
||||||||
|
|
|
|
||||||||||||
Net sales
|
$
|
29,782
|
|
|
$
|
26,489
|
|
|
$
|
82,706
|
|
|
$
|
68,833
|
|
Cost of sales
|
26,423
|
|
|
22,781
|
|
|
73,045
|
|
|
61,050
|
|
||||
Gross profit
|
3,359
|
|
|
3,708
|
|
|
9,661
|
|
|
7,783
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Selling and administrative expenses
|
2,833
|
|
|
2,604
|
|
|
8,543
|
|
|
7,711
|
|
||||
Operating income
|
526
|
|
|
1,104
|
|
|
1,118
|
|
|
72
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Interest and financing expense
|
322
|
|
|
255
|
|
|
834
|
|
|
703
|
|
||||
Income/(loss) before income taxes
|
204
|
|
|
849
|
|
|
284
|
|
|
(631
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income tax expense/(benefit)
|
—
|
|
|
43
|
|
|
(1,005
|
)
|
|
43
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income/(loss)
|
$
|
204
|
|
|
$
|
806
|
|
|
$
|
1,289
|
|
|
$
|
(674
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net income/(loss) per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.02
|
|
|
$
|
0.08
|
|
|
$
|
0.12
|
|
|
$
|
(0.07
|
)
|
Diluted
|
$
|
0.02
|
|
|
$
|
0.08
|
|
|
$
|
0.12
|
|
|
$
|
(0.07
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
10,243,286
|
|
|
10,193,200
|
|
|
10,221,869
|
|
|
10,176,626
|
|
||||
Diluted
|
10,556,764
|
|
|
10,193,200
|
|
|
10,467,112
|
|
|
10,176,626
|
|
|
|
Number of Shares Outstanding
|
|
|
Common
Stock, par $0.01 |
|
|
Additional
Paid-In Capital |
|
|
Accumulated Deficit
|
|
|
Treasury
Stock, at cost |
|
|
Total
Stockholders’ Equity |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balances, October 1, 2017
|
|
10,197,078
|
|
|
$
|
102
|
|
|
$
|
46,789
|
|
|
$
|
(30,873
|
)
|
|
$
|
(1,589
|
)
|
|
$
|
14,429
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,289
|
|
|
—
|
|
|
1,289
|
|
|||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
347
|
|
|
|
|
|
—
|
|
|
347
|
|
|||||
Restricted stock vested, net of
shares withheld for payment of taxes |
|
37,557
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Exercise of stock options
|
|
1,400
|
|
|
—
|
|
|
—
|
|
|
|
|
|
—
|
|
|
—
|
|
|||||
Employee stock plan purchases
|
|
12,048
|
|
|
—
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|
50
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balances, June 29, 2018
|
|
10,248,083
|
|
|
$
|
102
|
|
|
$
|
47,186
|
|
|
$
|
(29,584
|
)
|
|
$
|
(1,589
|
)
|
|
$
|
16,115
|
|
|
|
Nine Months Ended
|
||||||
|
|
June 29,
2018 |
|
June 30,
2017 |
||||
|
|
|
|
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
||||
Net income/(loss)
|
|
$
|
1,289
|
|
|
$
|
(674
|
)
|
Non-cash adjustments:
|
|
|
|
|
||||
Stock-based compensation
|
|
347
|
|
|
468
|
|
||
Depreciation and amortization
|
|
1,708
|
|
|
1,981
|
|
||
Change in reserve for doubtful accounts
|
|
(42
|
)
|
|
(169
|
)
|
||
Change in excess/obsolete inventory reserve
|
|
143
|
|
|
(93
|
)
|
||
Deferred tax benefit
|
|
(1,010
|
)
|
|
—
|
|
||
Amortization of deferred gain
|
|
(54
|
)
|
|
(45
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
Accounts receivable
|
|
(1,739
|
)
|
|
1,394
|
|
||
Inventory
|
|
(10,612
|
)
|
|
(2,754
|
)
|
||
Other current assets
|
|
(204
|
)
|
|
270
|
|
||
Other long term assets
|
|
4
|
|
|
7
|
|
||
Accounts payable
|
|
3,268
|
|
|
2,004
|
|
||
Change in book overdraft position
|
|
1,268
|
|
|
—
|
|
||
Accrued expenses
|
|
1,171
|
|
|
(2,016
|
)
|
||
Customer deposits
|
|
790
|
|
|
(1,035
|
)
|
||
Other long term liabilities
|
|
(75
|
)
|
|
(124
|
)
|
||
Net cash flows used in operating activities
|
|
(3,748
|
)
|
|
(782
|
)
|
||
|
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
||||
Purchases of property, plant and equipment
|
|
(2,001
|
)
|
|
(2,035
|
)
|
||
Proceeds from disposal of property, plant and equipment
|
|
5
|
|
|
5
|
|
||
Proceeds from sale-leaseback
|
|
1,947
|
|
|
5,750
|
|
||
Net cash flows (used in)/provided by investing activities
|
|
(49
|
)
|
|
3,720
|
|
||
|
|
|
|
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
||||
Advances from revolving line of credit
|
|
47,402
|
|
|
36,143
|
|
||
Repayments of revolving line of credit
|
|
(41,609
|
)
|
|
(30,514
|
)
|
||
Borrowings under other loan agreements
|
|
836
|
|
|
—
|
|
||
Repayments under other loan agreements
|
|
(2,665
|
)
|
|
(9,146
|
)
|
||
Repayments under capital lease
|
|
(172
|
)
|
|
(123
|
)
|
||
Debt issuance costs
|
|
(45
|
)
|
|
(89
|
)
|
||
Proceeds from employee stock plan purchases
|
|
50
|
|
|
27
|
|
||
Cash paid for taxes upon vesting of restricted stock
|
|
—
|
|
|
(4
|
)
|
||
Net cash flows provided by/(used in) financing activities
|
|
3,797
|
|
|
(3,706
|
)
|
||
|
|
|
|
|
||||
Net cash decrease for the period
|
|
—
|
|
|
(768
|
)
|
||
Cash, beginning of period
|
|
—
|
|
|
845
|
|
||
Cash, end of period
|
|
$
|
—
|
|
|
$
|
77
|
|
|
|
|
|
|
||||
Supplemental cash flow information
|
|
|
|
|
||||
Interest paid
|
|
$
|
807
|
|
|
$
|
687
|
|
Income taxes paid
|
|
4
|
|
|
116
|
|
||
Property, plant and equipment
additions financed through capital lease |
|
2,000
|
|
|
5,750
|
|
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
|
Software
|
|
3 to 10
|
|
|
Nine Months Ended
|
||||||
Allowance for doubtful accounts
|
|
June 29,
2018 |
|
June 30,
2017 |
||||
(in thousands)
|
|
|
|
|
||||
Allowance, beginning of period
|
|
$
|
75
|
|
|
$
|
226
|
|
Change in provision for doubtful accounts
|
|
(42
|
)
|
|
(169
|
)
|
||
Write-offs
|
|
—
|
|
|
15
|
|
||
Allowance, end of period
|
|
$
|
33
|
|
|
$
|
72
|
|
Inventories
|
|
June 29,
2018 |
|
September 30,
2017 |
||||
(in thousands)
|
|
|
|
|
|
|||
Raw materials
|
|
$
|
14,804
|
|
|
$
|
8,964
|
|
Work-in-process
|
|
9,566
|
|
|
5,080
|
|
||
Finished goods
|
|
1,704
|
|
|
1,561
|
|
||
Total inventories
|
|
$
|
26,074
|
|
|
$
|
15,605
|
|
Property, Plant and Equipment
|
|
June 29,
2018 |
|
September 30,
2017 |
||||
(in thousands)
|
|
|
|
|
||||
Land and improvements
|
|
$
|
788
|
|
|
$
|
788
|
|
Buildings and improvements
|
|
7,314
|
|
|
8,910
|
|
||
Building under capital lease
|
|
7,750
|
|
|
5,750
|
|
||
Machinery and equipment
|
|
28,800
|
|
|
27,947
|
|
||
Furniture and fixtures
|
|
7,811
|
|
|
7,520
|
|
||
Construction in progress
|
|
5,662
|
|
|
4,968
|
|
||
Total property, plant and equipment, at cost
|
|
58,125
|
|
|
55,883
|
|
||
Accumulated depreciation
|
|
(39,319
|
)
|
|
(38,106
|
)
|
||
Property, plant and equipment, net
|
|
$
|
18,806
|
|
|
$
|
17,777
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
June 29,
2018 |
|
June 30,
2017 |
|
June 29,
2018 |
|
June 30,
2017 |
||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
||||||||
Depreciation expense
|
|
$
|
567
|
|
|
$
|
624
|
|
|
$
|
1,729
|
|
|
$
|
1,921
|
|
|
|
|
|
|
|
|
June 29, 2018
|
|
September 30, 2017
|
||||||||||
Debt
|
|
Fixed/ Variable
Rate |
|
Maturity
Date |
|
|
Balance
|
|
Interest Rate
|
|
Balance
|
|
Interest Rate
|
||||||
($ in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
M&T credit facilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revolving Credit Facility
|
|
v
|
|
5/5/2022
|
|
|
$
|
14,562
|
|
|
4.84
|
%
|
|
$
|
8,769
|
|
|
3.73
|
%
|
Term Loan B
|
|
v
|
|
5/5/2022
|
|
|
3,851
|
|
|
4.98
|
|
|
5,714
|
|
|
3.99
|
|
||
Celmet Building Term Loan
|
|
f
|
|
11/7/2018
|
1
|
|
—
|
|
|
—
|
|
|
802
|
|
|
4.72
|
|
||
Equipment Line Advances
|
|
v
|
|
Various
|
2
|
|
836
|
|
|
5.13
|
|
|
—
|
|
|
—
|
|
||
Total debt, gross
|
|
|
|
|
|
|
19,249
|
|
|
|
|
15,285
|
|
|
|
||||
Unamortized debt issuance costs
|
|
|
|
|
|
|
(277
|
)
|
|
|
|
(275
|
)
|
|
|
||||
Total debt, net
|
|
|
|
|
|
|
18,972
|
|
|
|
|
15,010
|
|
|
|
||||
Less: current portion
|
|
|
|
|
|
|
(1,172
|
)
|
|
|
|
(987
|
)
|
|
|
||||
Long-term debt
|
|
|
|
|
|
|
$
|
17,800
|
|
|
|
|
$
|
14,023
|
|
|
|
a)
|
Revolving Credit Facility (“Revolver”)
: At
June 29, 2018
, up to
$22.0 million
was available through
May 5, 2022
. The maximum amount the Company may borrow is determined based on a borrowing base calculation described below.
|
b)
|
Term Loan B:
$14.0 million
was borrowed on January 18, 2013. Principal was being repaid in
120 equal monthly installments
of
$117 thousand
. Pursuant to an amendment to the Credit Facility, the principal was modified from $8.0 million to
$6.0 million
and principal is being repaid in equal monthly installments of
$71 thousand
plus a balloon payment of $0.6 million. The maturity date of the loan is May 5, 2022. The proceeds of the sale-leaseback transaction described in
Note 12—Capital Lease
were used to pay down a portion of the loan.
|
c)
|
Celmet Building Term Loan:
$1.3 million
was borrowed on November 8, 2013 pursuant to an amendment to the 2013 Credit Agreement. The proceeds were used to reimburse the Company’s cost of purchasing its Rochester, New York facility. Principal was being repaid in
59 equal monthly installments
of
$11 thousand
plus a balloon payment of
$672 thousand
due at maturity on
November 7, 2018
. The loan was repaid in connection with the sale-leaseback transaction described in
Note 12—Capital Lease
.
|
d)
|
Equipment Line Advances
: Up to $1.5 million is available through May 5, 2022. Interest only is paid until maturity. Principal is due six months after borrowing or can be converted to an Equipment Line Term Loan. On July 26, 2018,
$0.8 million
of Equipment Line Advances matured and was converted to an Equipment Line Term Note and is being repaid in 36 equal monthly installments of
$21 thousand
. The maturity date of the Equipment Line Term Note is July 26, 2021.
|
Debt Repayment Schedule
|
|
Contractual
Principal Payments |
|||
(in thousands)
|
|
|
|
||
Twelve months ended June
|
|
|
|
||
2019
|
|
|
$
|
1,172
|
|
2020
|
|
|
1,107
|
|
|
2021
|
|
|
1,107
|
|
|
2022
|
(1)
|
|
15,863
|
|
|
2023
|
|
|
—
|
|
|
|
|
|
$
|
19,249
|
|
|
|
Nine Months Ended
|
||||||
Warranty Reserve
|
|
June 29,
2018 |
|
June 30,
2017 |
||||
(in thousands)
|
|
|
|
|
|
|
||
Reserve, beginning of period
|
|
$
|
153
|
|
|
$
|
180
|
|
Provision
|
|
213
|
|
|
100
|
|
||
Warranty costs
|
|
(199
|
)
|
|
(125
|
)
|
||
Reserve, end of period
|
|
$
|
167
|
|
|
$
|
155
|
|
|
|
Nine Months Ended
|
||||||
Valuation of Options
|
|
June 29,
2018 |
|
June 30,
2017 |
||||
Assumptions for Black-Scholes:
|
|
|
|
|
||||
Risk-free interest rate
|
|
2.31
|
%
|
|
1.50
|
%
|
||
Expected term in years
|
|
5.5
|
|
|
4.0
|
|
||
Volatility
|
|
38
|
%
|
|
39
|
%
|
||
Expected annual dividends
|
|
none
|
|
|
none
|
|
||
|
|
|
|
|
||||
Value of options granted:
|
|
|
|
|
||||
Number of options granted
|
|
20,000
|
|
|
57,500
|
|
||
Weighted average fair value per share
|
|
$
|
1.53
|
|
|
$
|
1.19
|
|
Fair value of options granted (000s)
|
|
$
|
31
|
|
|
$
|
68
|
|
|
|
Nine Months Ended
|
||||||||||||
|
|
June 29, 2018
|
|
June 30, 2017
|
||||||||||
Stock Options
|
|
Number
of Options |
|
Wgtd. Avg.
Exercise Price |
|
Number
of Options |
|
Wgtd. Avg.
Exercise Price |
||||||
Outstanding, beginning of period
|
|
743,045
|
|
|
$
|
4.27
|
|
|
759,795
|
|
|
$
|
4.43
|
|
Granted
|
|
20,000
|
|
|
4.00
|
|
|
57,500
|
|
|
3.64
|
|
||
Exercised
|
|
1,400
|
|
|
4.08
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
|
(90,000
|
)
|
|
4.75
|
|
|
(33,000
|
)
|
|
5.58
|
|
||
Expired
|
|
(10,500
|
)
|
|
5.24
|
|
|
(29,750
|
)
|
|
5.04
|
|
||
Outstanding, end of period
|
|
661,145
|
|
|
$
|
4.18
|
|
|
754,545
|
|
|
$
|
4.29
|
|
|
|
|
|
|
|
|
|
|
||||||
For options expected to vest
|
|
|
|
|
|
|
|
|
|
|
||||
Number expected to vest
|
|
653,922
|
|
|
$
|
4.18
|
|
|
735,846
|
|
|
$
|
4.30
|
|
Weighted average remaining contractual term, in years
|
|
3.7
|
|
|
|
|
4.7
|
|
|
|
|
|||
Intrinsic value (000s)
|
|
|
|
$
|
1,099
|
|
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||
For exercisable options
|
|
|
|
|
|
|
|
|
|
|
||||
Number exercisable
|
|
450,358
|
|
|
$
|
4.28
|
|
|
326,972
|
|
|
$
|
4.44
|
|
Weighted average remaining contractual term, in years
|
|
3.4
|
|
|
|
|
4.1
|
|
|
|
|
|||
Intrinsic value (000s)
|
|
|
|
$
|
721
|
|
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||
For non-exercisable options
|
|
|
|
|
|
|
|
|
|
|
||||
Expense not yet recognized (000s)
|
|
|
|
$
|
205
|
|
|
|
|
|
$
|
447
|
|
|
Weighted average years to be recognized
|
|
1.5
|
|
|
|
|
2.1
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
||||||
For options exercised
|
|
|
|
|
|
|
|
|
||||||
Intrinsic value (000s)
|
|
|
|
$
|
2
|
|
|
|
|
|
$
|
—
|
|
|
|
Nine Months Ended
|
||||||||||||
|
|
June 29, 2018
|
|
June 30, 2017
|
||||||||||
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
|
|
109,695
|
|
|
$
|
4.01
|
|
|
115,950
|
|
|
$
|
4.16
|
|
Granted
|
|
44,878
|
|
|
4.29
|
|
|
39,576
|
|
|
3.79
|
|
||
Vested
|
|
(37,557
|
)
|
|
4.10
|
|
|
(29,948
|
)
|
|
4.26
|
|
||
Shares withheld for payment of
taxes upon vesting of restricted stock |
|
(1,743
|
)
|
|
3.70
|
|
|
(1,036
|
)
|
|
3.86
|
|
||
Forfeited
|
|
(9,490
|
)
|
|
4.20
|
|
|
—
|
|
|
—
|
|
||
Outstanding, end of period
|
|
105,783
|
|
|
$
|
4.09
|
|
|
124,542
|
|
|
$
|
4.02
|
|
|
|
|
|
|
|
|
|
|
||||||
For non-vested shares
|
|
|
|
|
|
|
|
|
|
|
||||
Expense not yet recognized (000s)
|
|
|
|
$
|
353
|
|
|
|
|
|
$
|
402
|
|
|
Weighted average remaining years for vesting
|
|
1.9
|
|
|
|
|
1.9
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||||
For shares vested
|
|
|
|
|
|
|
|
|
|
|
||||
Aggregate fair value on vesting dates (000s)
|
|
|
|
|
$
|
173
|
|
|
|
|
|
$
|
113
|
|
|
|
Years Ended
|
||||||||||||
|
|
June 29, 2018
|
|
June 30, 2017
|
||||||||||
Restricted Stock Units
|
|
Number of Non-vested Units
|
|
Wgtd. Avg. Grant Date Fair Value
|
|
Number of Non-vested Units
|
|
Wgtd. Avg. Grant Date Fair Value
|
||||||
Outstanding, beginning of period
|
|
267,999
|
|
|
$
|
4.03
|
|
|
112,809
|
|
|
$
|
4.64
|
|
Granted
|
|
102,864
|
|
|
4.28
|
|
|
155,190
|
|
|
3.58
|
|
||
Vested
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
|
(151,341
|
)
|
|
4.08
|
|
|
—
|
|
|
—
|
|
||
Outstanding, end of period
|
|
219,522
|
|
|
$
|
4.11
|
|
|
267,999
|
|
|
$
|
4.03
|
|
|
|
|
|
|
|
|
|
|
||||||
For non-vested shares
|
|
|
|
|
|
|
|
|
|
|
|
|||
Expense not yet recognized (000s)
|
|
|
|
$
|
371
|
|
|
|
|
|
$
|
692
|
|
|
Weighted average remaining years for vesting
|
|
2.5
|
|
|
|
|
2.0
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
June 29,
2018 |
|
June 30,
2017 |
|
June 29,
2018 |
|
June 30,
2017 |
||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|||||||
Income tax expense/(benefit)
|
|
$
|
—
|
|
|
$
|
43
|
|
|
$
|
(1,005
|
)
|
|
$
|
43
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
% of Sales by Sector
|
|
June 29,
2018 |
|
June 30,
2017 |
|
June 29,
2018 |
|
June 30,
2017 |
Aerospace & Defense
|
|
60%
|
|
53%
|
|
62%
|
|
49%
|
Medical
|
|
22%
|
|
30%
|
|
21%
|
|
30%
|
Industrial
|
|
18%
|
|
17%
|
|
17%
|
|
21%
|
|
|
100%
|
|
100%
|
|
100%
|
|
100%
|
Capital Lease Payment Schedule
|
|
Contractual
Principal Payments |
||
(in thousands)
|
|
|
|
|
Twelve months ended June
|
|
|
|
|
2019
|
|
$
|
655
|
|
2020
|
|
668
|
|
|
2021
|
|
681
|
|
|
2022
|
|
694
|
|
|
2023 and thereafter
|
|
7,589
|
|
|
Total capital lease payments
|
|
10,287
|
|
|
Less: amounts representing interest
|
|
(2,882
|
)
|
|
Present value of minimum lease payment
|
|
$
|
7,405
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
Earnings Per Share
|
|
June 29,
2018 |
|
June 30,
2017 |
|
June 29,
2018 |
|
June 30,
2017 |
||||||||
Basic net income/(loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Net income/(loss)
|
|
$
|
204
|
|
|
$
|
806
|
|
|
$
|
1,289
|
|
|
$
|
(674
|
)
|
Less: Income attributable to non-vested shares
|
|
2
|
|
|
10
|
|
|
13
|
|
|
—
|
|
||||
Net income/(loss) available to common stockholders
|
|
$
|
202
|
|
|
$
|
796
|
|
|
$
|
1,276
|
|
|
$
|
(674
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding
|
|
10,243,286
|
|
|
10,193,200
|
|
|
10,221,869
|
|
|
10,176,626
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic net income/(loss) per share
|
|
$
|
0.02
|
|
|
$
|
0.08
|
|
|
$
|
0.12
|
|
|
$
|
(0.07
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted net income/(loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Net income/(loss)
|
|
$
|
204
|
|
|
$
|
806
|
|
|
$
|
1,289
|
|
|
$
|
(674
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Shares used in computing basic net income/(loss) per share
|
|
10,243,286
|
|
|
10,193,200
|
|
|
10,221,869
|
|
|
10,176,626
|
|
||||
Dilutive effect of non-vested shares
|
|
313,478
|
|
|
—
|
|
|
245,243
|
|
|
—
|
|
||||
Shares used in computing diluted net income/(loss) per share
|
|
10,556,764
|
|
|
10,193,200
|
|
|
10,467,112
|
|
|
10,176,626
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Diluted net income/(loss) per share
|
|
$
|
0.02
|
|
|
$
|
0.08
|
|
|
$
|
0.12
|
|
|
$
|
(0.07
|
)
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
|
June 29,
2018 |
|
June 30,
2017 |
|
June 29,
2018 |
|
June 30,
2017 |
||||
Anti-dilutive shares excluded
|
|
39,335
|
|
|
925,764
|
|
|
171,791
|
|
|
932,144
|
|
•
|
Our engineering services include the design, development, and fabrication of customized stress testing platforms to simulate a product’s end application, such as thermal cycling and vibration, in order to ensure reliable performance and avoid catastrophic failure when the product is placed in service.
|
•
|
Our vertical manufacturing model offers customers the ability to simplify their supply chain by utilizing a single supplier for their critical components including complex printed circuit board assembly (“PCBA”), precision metalworking, and interconnect solutions. This service model allows us to control the cost, lead time, and quality of these critical components which are then integrated into full system assemblies and minimizes our customers’ supply chain risk.
|
•
|
We provide direct order fulfillment services for our customers by integrating with their configuration management process to obtain their customer orders, customize the product to the specific requirements, functionally test the product and provide verification data, and direct ship to their end customer in order to reduce time, cost, and complexity within our customer's supply chain.
|
•
|
We are the only EMS provider with an on-site laboratory that has been approved by the Defense Logistics Agency (“DLA”) for their Qualified Testing Supplier List (“QTSL”) program which deems the site suitable to conduct various QTSL and military testing standards including counterfeit component analysis. In addition, this advanced laboratory is utilized for complex design analysis and manufacturing process development to solve challenges and accelerate our customers’ time to market.
|
•
|
Newark, New York - Located approximately one hour east of Rochester, New York, our Newark location is our corporate headquarters and is the largest manufacturing location providing complex circuit board manufacturing, interconnect solutions, and system-level assemblies along with an on-site material analysis laboratory for advanced manufacturing process development.
|
•
|
Rochester, New York - Focuses on precision metalworking services including complex metal chassis and assemblies.
|
•
|
Albuquerque, New Mexico - Specializes in the aerospace and defense markets with complex circuit board and system-level assemblies along with a state of the art analysis and testing laboratory which conducts counterfeit component analysis and complex design analysis.
|
|
|
Three Months Ended
|
||||||
Income Statement Data
|
|
June 29,
2018 |
|
June 30,
2017 |
||||
(in thousands)
|
|
|
|
|
||||
Net sales
|
|
$
|
29,782
|
|
|
$
|
26,489
|
|
|
|
|
|
|
||||
Gross profit
|
|
3,359
|
|
|
3,708
|
|
||
Selling and administrative expenses
|
|
2,833
|
|
|
2,604
|
|
||
Interest and financing expense
|
|
322
|
|
|
255
|
|
||
Income before income taxes
|
|
204
|
|
|
849
|
|
||
Income tax expense
|
|
—
|
|
|
43
|
|
||
Net income
|
|
$
|
204
|
|
|
$
|
806
|
|
|
|
Nine Months Ended
|
||||||
Income Statement Data
|
|
June 29,
2018 |
|
June 30,
2017 |
||||
(in thousands)
|
|
|
|
|
||||
Net sales
|
|
$
|
82,706
|
|
|
$
|
68,833
|
|
|
|
|
|
|
||||
Gross profit
|
|
9,661
|
|
|
7,783
|
|
||
Selling and administrative expenses
|
|
8,543
|
|
|
7,711
|
|
||
Interest and financing expense
|
|
834
|
|
|
703
|
|
||
Income/(loss) before income taxes
|
|
284
|
|
|
(631
|
)
|
||
Income tax expense/(benefit)
|
|
(1,005
|
)
|
|
43
|
|
||
Net income/(loss)
|
|
$
|
1,289
|
|
|
$
|
(674
|
)
|
|
|
Nine Months Ended
|
||||||
Cash Flow Data
|
|
June 29,
2018 |
|
June 30,
2017 |
||||
(in thousands)
|
|
|
|
|
||||
Cash, beginning of period
|
|
$
|
—
|
|
|
$
|
845
|
|
Net cash provided by/(used in):
|
|
|
|
|
|
|
||
Operating activities
|
|
(3,748
|
)
|
|
(782
|
)
|
||
Investing activities
|
|
(49
|
)
|
|
3,720
|
|
||
Financing activities
|
|
3,797
|
|
|
(3,706
|
)
|
||
Net cash decrease for the period
|
|
—
|
|
|
(768
|
)
|
||
Cash, end of period
|
|
$
|
—
|
|
|
$
|
77
|
|
Exhibit No.
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|
Description
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10.1
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|
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10.2*
|
|
|
31.1*
|
|
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32.1*
|
|
|
101
|
|
The following items from this Quarterly Report on Form 10-Q formatted in Extensible Business Reporting Language: (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Income Statements (unaudited), (iii) Consolidated Statements of Changes in Stockholders’ Equity (unaudited), (iv) Consolidated Statements of Cash Flows (unaudited), and (v) Notes to Consolidated Financial Statements.
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|
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IEC Electronics Corp.
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|
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(Registrant)
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|
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August 8, 2018
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By:
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/s/ Jeffrey T. Schlarbaum
|
|
|
Jeffrey T. Schlarbaum
|
|
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President & Chief Executive Officer
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|
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(Principal Executive Officer and Principal Financial Officer)
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Pricing Grid - Applicable Margin
|
|||
|
Fixed Charge Coverage
|
|
|
Level
|
Ratio
|
Revolver
|
Term Loan B
|
I
|
x ≤ 1.60:1.00
|
2.75%
|
3.00%
|
II
|
1.60:1.00 < x ≤ 1.85:1.00
|
2.50%
|
2.75%
|
III
|
x > 1.85:1.00
|
2.25%
|
2.50%
|
1.
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I have reviewed this quarterly report on Form 10-Q for the
three and nine
months ended
June 29, 2018
for IEC Electronics Corp.;
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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;
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4.
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I am 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:
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a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;
|
b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my 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
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d.
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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 (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
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I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
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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
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b.
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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.
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Dated: August 8, 2018
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By:
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/s/ Jeffrey T. Schlarbaum
|
|
|
Jeffrey T. Schlarbaum
|
|
|
President & Chief Executive Officer
|
|
|
(Principal Executive Officer and Principal Financial Officer)
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Dated: August 8, 2018
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By:
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/s/ Jeffrey T. Schlarbaum
|
|
|
Jeffrey T. Schlarbaum
|
|
|
President & Chief Executive Officer
|
|
|
(Principal Executive Officer and Principal Financial Officer)
|