<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange -
- -
Act of 1934
For the quarterly period ended March 26, 1999
Commission file Number 0-6508
IEC ELECTRONICS CORP.
-----------------------------------------------------
(Exact name of registrant as specified in its charter.)
Delaware 13-3458955
----------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
105 Norton Street, Newark, New York 14513
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices (Zip Code)
(315) 331-7742
- --------------------------------------------------------------------------------
Registrant's telephone number, including area code:
Indicate by check mark whether the registrant(1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date:
Common Stock, $0.01 Par Value - 7,583,076 shares as of May 6, 1999.
Page 1 of 16
<PAGE>
PART 1 FINANCIAL INFORMATION
Page
Number
Item 1. Financial Statements
Consolidated Balance Sheets as of :
March 26, 1999 (Unaudited) and September 30, 1998............. 4
Consolidated Statements of Income
for the three months ended:
March 26, 1999 (Unaudited) and
March 27, 1998 (Unaudited).................................... 5
Consolidated Statements of Income
for the six months ended:
March 26, 1999 (Unaudited) and
March 27, 1998 (Unaudited).................................... 6
Consolidated Statement of Cash Flows
for the six months ended:
March 26, 1999 (Unaudited) and
March 27, 1998 (Unaudited).................................... 7
Notes to Consolidated Financial
Statements (Unaudited)......................................... 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.....................11
PART II
Item 1. Legal Proceedings.............................................. 15
Item 2. Changes in Securities.......................................... 15
Page 2 of 16
<PAGE>
Item 3. Defaults Upon Senior Securities................................ 15
Item 4. Submission of Matters to a Vote of Security Holders............ 15
Item 5. Other Information.............................................. 15
Item 6. Exhibits and Reports on Form 8-K............................... 15
Signature ............................................................. 16
Page 3 of 16
<PAGE>
<TABLE>
IEC ELECTRONICS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 26, 1999 AND SEPTEMBER 30, 1998
(in thousands, except for share data)
<CAPTION>
MARCH 26,1999 SEPTEMBER 30,1998
---------------- ------------------
ASSETS (Unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 78 $2,278
Accounts receivable 18,377 22,842
Inventories 21,090 20,072
Income taxes receivable 3,816 1,960
Deferred income taxes 3,226 3,226
Other current assets 1,245 441
--------- ----------
Total current assets 47,832 50,819
--------- ----------
Property, Plant and Equipment, net 31,788 36,321
---------- ----------
Other Assets:
Cost in excess of net assets acquired, net 11,042 11,310
Other assets 173 215
----------- ----------
Total other assets 11,215 11,525
----------- ----------
$ 90,835 $ 98,665
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt - 20
Accounts payable 13,993 13,424
Accrued payroll and related expenses 2,400 3,878
Accrued Insurance 964 1,353
Other accrued expenses 257 380
------- -------
Total current liabilities 17,614 19,055
------- -------
Deferred Income Taxes 2,904 2,904
------- -------
Long-Term Debt 5,000 7,138
------- -------
Shareholders' Equity:
Preferred stock, par value $.01 per share
Authorized - 500,000 shares
Outstanding - 0 shares - -
Common stock, par value $.01 per share
Authorized - 50,000,000 shares
Outstanding - 7,583,076 shares and
7,583,076 shares 76 76
Additional paid-in capital 38,563 38,563
Retained earnings 27,142 31,207
Cumulative translation adjustment (53) 133
Treasury Stock, at cost - 20,573 shares (411) (411)
------- -------
Total shareholders' equity 65,317 69,568
------- -------
$ 90,835 $ 98,665
======= =======
<FN>
The accompanying notes to unaudited consolidated financial statements
are an integral part of these balance sheets
</FN>
</TABLE>
Page 4 of 16
<PAGE>
<TABLE>
IEC ELECTRONICS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 26, 1999 AND MARCH 27, 1998
(in thousands, except per share data)
<CAPTION>
3 MONTHS ENDED 3 MONTHS ENDED
MARCH 26, 1999 MARCH 27, 1998
-------------- ------------------
(Unaudited) (Unaudited)
<S> <C> <C>
Net sales $34,854 $71,103
Cost of sales 34,380 66,738
------- -------
Gross profit 474 4,307
Selling and administrative expenses 2,775 4,043
Customer bankruptcy write-off - 1,130
------- -------
Operating loss (2,301) (866)
Interest expense (122) (598)
Other income, net 4 17
------- -------
Loss before income taxes (2,419) (1,447)
Benefit from Income taxes (659) (556)
------- -------
Net Loss ($1,760) ($891)
======= =======
Net loss per share:
Basic ($0.23) ($0.12)
Diluted ($0.23) ($0.12)
Weighted average number of shares:
Basic 7,563 7,539
Diluted 7,563 7,539
<FN>
The accompanying notes to unaudited consolidated financial statements
are an integral part of these financial statements.
</FN>
</TABLE>
Page 5 of 16
<PAGE>
<TABLE>
IEC ELECTRONICS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED MARCH 26, 1999 AND MARCH 27, 1998
(in thousands, except per share data)
<CAPTION>
6 MONTHS ENDED 6 MONTHS ENDED
MARCH 26, 1999 MARCH 27, 1998
-------------- ------------------
(Unaudited) (Unaudited)
<S> <C> <C>
Net sales $ 71,135 $165,161
Cost of sales 71,263 152,165
------- -------
Gross (loss)profit (128) 12,996
Selling and administrative expenses 5,372 8,343
Customer bankruptcy write-off - 1,130
------- -------
Operating (loss)income (5,500) 3,523
Interest expense (276) (1,246)
Other income, net (9) 60
------- -------
(Loss)income before income taxes (5,785) 2,337
(Benefit from)provision for Income taxes (1,720) 901
------- -------
Net (loss)income ($4,065) $1,436
======= =======
Net (loss)income per share:
Basic ($0.54) $0.19
Diluted ($0.54) $0.19
Weighted average number of shares:
Basic 7,563 7,537
Diluted 7,563 7,717
<FN>
The accompanying notes to unaudited consolidated financial statements
are an integral part of these financial statements.
</FN>
</TABLE>
Page 6 of 16
<PAGE>
<TABLE>
IEC ELECTRONICS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED MARCH 26, 1999 AND MARCH 27, 1998
(in thousands)
<CAPTION>
6 MONTHS 6 MONTHS
ENDED ENDED
MARCH 26, MARCH 27,
1999 1998
----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C>
Cash Flows from Operating Activities:
Net (loss)income ($4,065) $1,436
Adjustments to reconcile net (loss)income
to net cash provided by operating activities:
Depreciation and amortization 5,178 4,900
Amortization of cost in excess of net assets acquired 241 237
Changes in operating assets and liabilities:
(Increase) decrease
Accounts receivable 4,442 12,089
Inventories (1,029) 17,366
Income taxes receivable (1,865) (101)
Other current assets (816) (242)
Other assets 24 -
Increase (Decrease)
Accounts payable 592 (30,571)
Accrued payroll and related expenses (1,468) (2,153)
Accrued income taxes - (1,887)
Accrued Insurance (389) -
Other accrued expenses (123) (119)
------- --------
Net cash provided by operating activities 722 955
------- --------
Cash Flows from Investing Activities:
Purchases of property, plant and equipment (961) (4,845)
Proceeds from sale of building 220 -
-------- --------
Net cash used in investing activities (741) (4,846)
-------- --------
Cash Flows from Financing Activities:
Exercise of stock options - 48
Net borrowings under line of credit agreements (2,000) 13,000
Principal payments on long-term debt (158) (2,444)
-------- ---------
Net cash (used in)provided by financing activities (2,158) 1,574
-------- ---------
Net decrease in cash and cash equivalents (2,177) (2,317)
Effect of exchange rate changes (23) -
Cash and cash equivalents at beginning of period 2,278 3,921
-------- ---------
Cash and cash equivalents at end of period $78 $1,604
======== =========
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ 307 $1,247
======== =========
Income taxes $ 144 $2,889
======== =========
<FN>
The accompanying notes to unaudited consolidated financial statements
are an integral part of these financial statements.
</FN>
</TABLE>
Page 7 of 16
<PAGE>
IEC ELECTRONICS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 26, 1999
Dollar amounts are presented in thousands
(1) Business and Summary of Significant Accounting Policies
Business
- --------
IEC Electronics Corp. (IEC) is an independent contract manufacturer of complex
printed circuit board assemblies and electronic products and systems. IEC offers
its customers a wide range of manufacturing services, on either a turnkey or
consignment basis, including material procurement and control, manufacturing and
test engineering support, statistical quality assurance and complete resource
management.
Consolidation
- -------------
The consolidated financial statements include the accounts of IEC and its
wholly-owned subsidiaries, IEC Electronics-Edinburg, Texas Inc.(Edinburg),
IEC Arab, Alabama Inc.(Arab) and IEC Electronics-Ireland Limited(Longford) as of
August 31, 1998, (collectively, the Company). All significant intercompany
transactions and accounts have been eliminated.
Revenue Recognition
- -------------------
The Company recognizes revenues upon shipment of product for both turnkey and
consignment contracts.
Cash and Cash Equivalents
- -------------------------
Cash and cash equivalents include money market and bank account balances. The
Company's cash and cash equivlents are held and managed by institutions which
follow the Company's investment policy. The fair value of the Company's
finanical instruments approximates carrying amounts due to the relatively short
maturies and variable interest rates of the instruments, which approximate
current market interest rates.
Inventories
- -----------
Inventories are stated at the lower of cost (first-in, first-out) or market. The
major classifications of inventories are as follows at period end:
March 26, 1999 September 30, 1998
---------------- ----------------
(Unaudited)
Raw materials $16,811 $14,170
Work-in-process 4,279 5,902
---------------- ----------------
$21,090 $20,072
================ ================
Foreign Currency Translation
- ----------------------------
The assets and liabilities of the Company's foreign subsidiary are translated
based on the current exchange rate at the end of the period for the balance
sheet and a weighted- average rate for the period of the consolidated statement
of operations. Translation adjustments are recorded as a separate component of
equity. Transaction gains or losses are included in operations.
Page 8 of 16
<PAGE>
IEC ELECTRONICS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 26, 1999
Dollar amounts are presented in thousands
Unaudited Finanical Statements
- ------------------------------
The accompaning unaudited finanical statements as of March 26, 1999, and for the
three and six months ended March 26, 1999 have been prepared in accordance with
generally accepted accounting princples for the interm finanica1 information. In
the opinion management, all adjustments considered necessary for a fair
presenation, which consist solely of normal recurring adjustments have been
included. The accompaning finanical statements should be read in conjuction with
the financial statements and notes thereto included in the Company's September
30, 1998 Annual Report on Form 10-K.
Earnings per Share
- ------------------
Net (Loss) income per Common and Common Equivalent Share
- --------------------------------------------------------
(Loss)Income Shares Per Share
Three Months Ended (Numerator) (Denominator) Amount
- -------------------------------------------------------------------------------
March 26, 1999
Basic EPS
Loss available to common Shareholders ($1,760) 7,562,503 ($0.23)
====================================
March 27, 1998
Basic EPS
Loss available to common Shareholders ($891) 7,539,329 ($0.12)
====================================
(Loss)Income Shares Per Share
Six Months Ended (Numerator) (Denominator) Amount
- -------------------------------------------------------------------------------
March 26, 1999
Basic EPS
Loss available to common Shareholders ($4,065) 7,562,503 ($0.54)
====================================
March 27, 1998
Basic EPS
Income available to common shareholders
and assumed conversions $1,436 7,536,500 $0.19
=============
Effect of dilutive options - 180,197
-----------------------
Diluted EPS
Income available to common shareholders
and assumed conversions $1,436 7,716,697 $0.19
====================================
Basic EPS was computed by dividing reported earnings available to common
shareholders by weighted-average common shares outstanding during the three and
six month period. No reconciliation is provided for the three month
periods ending March 26, 1999 and March 27, 1998 as well as the six month period
ending March 26, 1999 as effect would be antidilutive. 310,250 common shares
at an average price of $14 per share were outstanding for the three month
six month period ending March 27, 1998, but were not included
in the computation of diluted EPS since the options' exercise price was greater
than the average market price of common shares.
Page 9 of 16
<PAGE>
IEC ELECTRONICS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 26, 1999
Dollar amounts are presented in thousands
(2) Comprehensive Income
--------------------
The Company adopted Statement of Finacial Accounting Standards No. 130,
"Reporting Comprehensive Income"(SFAS No. 130)on October 1, 1998. SFAS No. 130
requires comprehensive income and its components to be presented in the
financial Statements. Comprehensive income, which includes net (loss) income
and foreign currency translation adjustments, was as follows for the three
and six months ended March 26, 1999 and March 27, 1998.
3 MONTHS 3 MONTHS
ENDED ENDED
March 26, March 27,
1999 1998
---------- -----------
(Unaudited) (Unaudited)
Net (loss)income $ (1,760) $ (891)
Other comprehensive income:
Foreign currency translation adjustments (160) -
---------- -----------
Comprehensive (loss) income $ (1,920) $ (891)
6 MONTHS 6 MONTHS
ENDED ENDED
March 26, March 27,
1999 1998
---------- -----------
(Unaudited) (Unaudited)
Net (loss)income $ (4,065) $ 1,436
Other comprehensive income:
Foreign currency translation adjustments (186) -
---------- -----------
Comprehensive (loss) income $ (4,251) $ 1,436
Financing Arrangements
- ----------------------
In May 1998, the Company closed on a $65 million credit facility, which replaced
the previous $33 million credit facility. At March 26, 1999, $5 million was
outstanding under the three year credit facility.
Legal Matters
- -------------
There are no material legal proceedings pending to which the Company or any of
its subsidiaries is a party or to which any of the Company's or subsidiaries'
property is subject. To the Company's knowledge, there are no material legal
proceedings to which any director, officer or affiliate of the Company, or any
beneficial owner of more than 5 percent (5%) of Common Stock, or any associate
of any of the foregoing, is a party adverse to the Company or any of its
subsidiaries.
Page 10 of 16
<PAGE>
Management's Discussion and Analysis
------------------------------------
Results of Operations - Three Months Ended March 26, 1999, Compared to the
- --------------------------------------------------------------------------
Three Months Ended March 27, 1998.
- ----------------------------------
Net sales for the three month ended March 26, 1999, were $34.8 million,
compared to $71.0 million for the comparable period of the prior year,
a decrease of 51.0%. The decrease in sales is primarily due to the loss of two
major customers who moved their related production offshore. Turnkey sales
were 96% of net sales in the quarter as compared to 98% for the comparable
period of the prior year.
Gross profit was $0.5 million or 1.4% of sales in 1999 versus $4.3 million or
6.1% of sales in the comparable period of 1998. The decrease was due to higher
labor and overhead costs as a percentage of sales and lower effeciency leading
to an under absorption of fixed overhead costs.
Selling and administrative expenses decreased to $2.8 million in the three
months ended March 26, 1999, from $4.0 million in the comparable period of the
prior fiscal year. This decrease is primarily due to decreases in sales
commissions, salary and other expenses. As a percentage of net sales, selling
and administrative expenses increased to 8.0% from 5.7% in the same quarter of
the prior year.
Net loss for the quarter was ($1.8) million versus ($0.9) million in the
comparable quarter of the prior year. Diluted loss per share was ($0.23)as
compared to diluted loss per share of ($0.12)in the comparable period of the
prior fiscal year.
Results of Operations - Six Months Ended March 26, 1999, Compared to Six
- ------------------------------------------------------------------------
Months Ended March 27, 1998.
- ----------------------------
Net sales for the six month period ended March 26, 1999, were $71.1 million,
compared to $165.1 million for the comparable period of the prior year,
a decrease of 56.9%. The decrease in sales was primarily due to the loss of two
major customers who moved their related production offshore. Turnkey sales were
95% of net sales in the six month period as compared to 98% for the comparable
period of the prior year.
Gross (loss) profit was ($0.1) million or (0.2%) of sales in 1999 versus
$13.0 million or 7.9% of sales in the comparable period of 1998. The decrease
was due to higher labor and overhead costs as a percentage of sales and lower
effeciency leading to an under absorption of fixed overhead costs.
Selling and administrative expenses decreased to $5.4 million in the six
months ended March 26, 1999, from $8.3 million in the comparable period of the
prior fiscal year. This decrease is primarily due to decreases in sales
commissions, salary and other expenses. As a percentage of sales, selling and
administrative expenses increased to 7.6% from 5.1% in the same period of
the prior year.
Net (loss) income for the six month period was ($4.0) million versus
$1.4 million in the comparable period of the prior year. Diluted (loss)income
per share was ($0.54) as compared to income per share of $0.19 in the
comparable period of the prior fiscal year.
Liquidity and Capital Resources
- -------------------------------
Net sales for the month of March 1999 were $14.0 million, representing 40% of
the total net sales for the three month period ending March 26, 1999. The
Company operates on a fiscal quarter consisting of four weeks in the first and
second months and five weeks in the third month.
In May 1998, the Company closed on a $65 million senior credit facility. At
December 25, 1998, $5 million was outstanding under this new facility.
The Company beleives that its funds generated from operations And its existing
credit facilities will be sufficient for the Company to meet its capital
Expenditures and working capital needs for its operations as presently
conducted. As part of its overall business strategy, the Company may from time
to time evaluate acquisition opportunities. The funding of these future
transactions, if any, may require The Company to obtain additional sources of
financing.
The impact of inflation on the Company's operations has been minimal due to the
fact that it is able to adjust its bids to reflect any inflationary increases in
cost.
Page 11 of 16
<PAGE>
Year 2000 Conversion
- --------------------
The Year 2000 issue is the result of many existing computer programs written to
handle two digits, rather than four, to define the applicable year. Accordingly,
date-sensitive software or hardware may not be able to distinguish between the
year 1900 and year 2000, and programs that perform arithmetic operations,
comparisons or sorting of date fields may begin yielding incorrect results. This
could potentially cause a system failure or miscalculations that could disrupt
operations, including, among other things, an inability to process transactions,
send invoices, or engage in normal business activities. These Year 2000 issues
affect virtually all companies and organizations.
The Company has developed plans to address the potential risks it faces as a
result of Year 2000 issues. These risks include, among other things, the
possible failure or malfunction of the Company's internal information systems,
possible problems with the products and services the Company has provided its
customers, and possible problems arising from the failure of the Company's
supplier systems.
The Company has developed a plan to address its Year 2000 issues by initially
identifying and assessing Year 2000 compliance for all of its applications and
information technology equipment (including all mainframe, network and desktop
software and hardware, customer and packaged applications, and IT embedded
systems), as well as its non-information technology embedded systems, (including
non-IT equipment and machinery such as security, fire prevention and climate
control systems) into the categories of "business critical", "important", and
"non-important" systems.
Business critical systems are those whose Year 2000 compliance is necessary to
ensure the proper functioning of the business. These systems have the highest
priority in being tested and upgraded, where applicable. It is expected that all
"business critical" systems will be Year 2000 compliant by June 1999.
"Important" systems will also be tested and upgraded with the expectation that,
where necessary, they will be Year 2000 compliant by no later than September 30,
1999. Certain other systems classified as "not important", since they do not use
the date function, will also be tested and upgraded where it is of benefit to
the Company, but with the lowest priority of the Company's three system
classifications. The Company's remediation plan for its Year 2000 issue is an
ongoing process, and the estimated completion dates above are subject to change.
Overall, at this time the Company believes that its systems will be Year 2000
compliant in a timely manner for several reasons. The main or "central"
operating system used by the Company is already compliant with the exception of
one sub-system. To the extent that current systems that will not be replaced
have been determined to be non-compliant, the Company is working with the
suppliers of such systems to obtain upgrades and/or enhancements to ensure Year
2000 compliance. Also, comprehensive testing of nearly all critical systems was
performed in November, 1998, at the shut-down Alabama facility in a simulated
Year 2000 environment. Only minor issues were found from the testing which have
since been corrected and retested successfully.
At this stage in the process, the Company has not identified any significant
risks. However, the Company believes that the area of the greatest potential
risk relates to significant suppliers' failing to remediate their Year 2000
issues in a timely manner. The Company is conducting formal communications with
its significant suppliers to determine the extent to which it may be affected by
those parties' plans to remediate their own Year 2000 issues in a timely manner.
If a number of significant suppliers are not Year 2000 compliant, this could
have a material adverse effect on the Company's results of operations, financial
position or cash flow. At this point, the Company has not been advised by any
significant supplier that it is not Year 2000 compliant.
Page 12 of 16
<PAGE>
The Company will develop contingency plans and expects to have them completed
during 1999. To mitigate the effects of the Company's or significant suppliers'
potential failure to remediate the Year 2000 issue in a timely manner, the
Company will take appropriate actions. Such actions may include having
arrangements for alternate suppliers, using manual intervention to ensure the
continuation of operations where necessary and scheduling activity in December
1999 that would normally occur at the beginning of January 2000. If it becomes
necessary for the Company to take these corrective actions, it is uncertain,
until the contingency plans are finalized, whether this would result in
significant delays in business operations or have a material adverse effect on
the Company's results of operations, financial position or cash flow.
Based upon the Company's current estimates, incremental out-of-pocket costs of
its Year 2000 program are expected not to be material. Costs incurred in fiscal
1998 have been minimal and expensed as incurred. Additional costs are expected
to be incurred in fiscal 1999 and will be associated primarily with the
remediation of existing computer software and hardware. Such costs are estimated
to be approximately $500,000. Such costs do not include internal management
time, which the Company does not separately track, nor the deferral of other
projects, the effects of which are not expected to be material to the Company's
results of operations or financial condition.
Euro Conversion Issues
- ----------------------
Effective January 1, 1999, 11 of the 15 member countries of the European Union
(the participating countries) established fixed conversion rates between their
existing sovereign currencies and the euro. For three years after the
introduction of the euro, the participating countries can perform financial
transactions in either the euro or their original local currencies. This will
result in a fixed exchange rate among the participating countries, whereas the
euro (and the participating countries' currency in tandem) will continue to
float freely against the U.S. dollar and other currencies of the
non-participanting countries.
The Company is evaluating the effects of the euro conversion on the Company. IEC
does not believe that significant modifications of its information technology
systems are needed in order to handle euro transactions and reporting, and the
Company is in the process of evaluating its tax positions and all outstanding
contracts in currencies of the participating countries to determine the effects
if any, of the euro conversion. While the Company currently believes that the
effects of the conversion do not have a significant adverse material effect on
the Company's business and operations, there can be no assurances that such a
conversion will not have a adverse material effect on the Company's results of
operations and financial position due to competitive and other factors that may
be affected by the conversion that can not be predicted by the Company.
Interest rate sensitivity
- -------------------------
The Company has entered into a three year interest rate swap transaction with
one of the credit facility partners under which IEC pays a fixed rate of
interest hedging against the varible rates incurred under the credit facility.
The interest rate swap expires in the year 2001 which coincides with the
maturity date of the senior debt facility. As the Company intends to hold the
interest rate swap until maturity date, the Company is not subject to market
risk. In fact, such interest rate swap has fixed a portion of the interest
expense for the debt facility reducing the impact of interest rate risk.
Page 13 of 16
<PAGE>
Recently Issued Accounting Standards
- ------------------------------------
In late 1997, Statement of Financial Accounting Standards No.131 (SFAS No.131)
"Disclosure about Segments of Enterprise and Related Information" was issued.
This statement will be effective for the Company in fiscal 1999. The Company
believes that the effect of adoption of SFAS No.131 will not be material.
Additionally, in June, 1998, Statement of Financial Accounting Standards No.133
(SFAS No.133), "Accounting for Derivative Instruments and Hedging Activities"
was issued. This statement will be effective for the Company in fiscal 2000. The
Company believes that the effect of adoption of SFAS No.133 will not be
material based on the Company's current risk management strategies.
Forward-looking Statements
- --------------------------
Except for historical information, statements in this quarterly report are
forward-looking made pursuant to the safe harbor created by the Private
Securities Litigation Reform Act of 1995 and are therefore subject to certain
risks and uncertainties including timing of orders and shipments, availability
of material, product mix and general market conditions that could cause actual
results to differ materially from those projected in the forward looking
statements. Investors should consider the risks and uncertainties discussed in
the September 30, 1998, Form 10K and its other filings with the Securities and
Exchange Commission.
Page 14 of 16
<PAGE>
PART II. OTHER INFORMATION
Item 1 -- Legal Proceedings
None.
Item 2 -- Changes in Securities
None.
Item 3 -- Defaults Upon Senior Securities
None.
Item 4 -- Submission of Matters to a Vote of Security Holders
(a) The annual Meeting of Stockholders was held on Febuary 24, 1999
(b) The names of the directors elected at the Annual Meeting are as follows
David J. Beaubien
Thomas W. Folger
W. Barry Gilbert
Robert P.B. Kidd
Eben S. Moulton
Russell E. Stingel
Justin L. Vigdor
(c)(i) At the Annual Meeting, the tabulation of the votes with respect to
each nominee was as follows:
Nominee Votes FOR Authority Withheld
------- --------- ------------------
David J. Beaubien 7,033,044 56,085
Thomas W. Folger 7,003,840 86,309
W. Barry Gilbert 7,032,914 56,235
Robert P.B. Kidd 7,006,414 82,735
Eben S. Moulton 7,032,064 57,085
Russell E. Stingel 7,030,539 58,610
Justin L. Vigdor 7,004,614 84,535
Item 5 -- Other Information
None.
Item 6 -- Exhibits and Reports on Form 8-K
a. Exhibits
None.
b. Reports on Form 8-K
None.
Page 15 of 16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
IEC ELECTRONICS CORP.
REGISTRANT
Dated: May 6, 1999 /s/Russell E. Stingel
-----------------------------
Russell E. Stingel
Chief Executive Officer
Dated: May 6, 1999 /s/Patricia A. Bird
------------------------------
Patricia A. Bird
Corporate Controller
Page 16 of 16
<PAGE>
<TABLE> <S> <C>
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<S> <C>
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<PERIOD-END> MAR-26-1999
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0
0
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<INCOME-PRETAX> (5,785)
<INCOME-TAX> (1,720)
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<NET-INCOME> (4,065)
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