SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 26, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to _______________
Commission File No. 0-5258
IEH CORPORATION
(Exact name of registrant as specified in its charter)
New York 1365549348
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
140 58th Street, Suite 8E, Brooklyn, New York 11220
---------------------------------------------------
(Address of principal executive office)
Registrant's telephone number, including area code: (718) 492-4440
---------------
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year,
if changed since last report.
Check whether the Issuer: (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 [ ]
2,303,502 shares of Common Shares, par value $.50 per share,
were outstanding as of November 7, 1997.
<PAGE>
IEH CORPORATION
CONTENTS
PART 1 - FINANCIAL INFORMATION:
ITEM 1 - FINANCIAL STATEMENTS
Balance Sheets
September 26, 1997 (Unaudited)
and March 28, 1997
Statement of Operations
(Unaudited) for the three and six months
ended September 26, 1997 and
September 27, 1996
Statement of Cash Flows (Unaudited)
for the six months ended
September 26, 1997 and September 27, 1996
Notes to Financial Statements
(Unaudited)
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
PART II - OTHER INFORMATION
<PAGE>
<TABLE>
<CAPTION>
IEH CORPORATION
BALANCE SHEETS
As of September 26, 1997 and March 28, 1997
September 26, March 28,
1997 1997
---------- ----------
(Unaudited) (Note 1)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash ............................................. $ 45,207 $ 15,274
Accounts receivable, less allowance for
doubtful accounts of $10,062 at September 26,1997
and March 28, 1997 .............................. 870,061 651,873
Inventories (Note 2 ) ............................ 922,800 1,107,100
Prepaid expenses and other current assets (Note 3) 18,120 52,629
Other receivables ................................ 9,207 30,492
---------- ----------
Total current assets .......................... 1,865,395 1,857,368
---------- ----------
PROPERTY, PLANT AND EQUIPMENT, less accumulated
depreciation and amortization of $4,377,173
Sept 26,1997 and $4,238,093 at March 28, 1997 ... 1,452,592 1,480,841
---------- ----------
OTHER ASSETS:
Prepaid pension cost (Note 7) .................... 43,949 43,949
Other assets ..................................... 47,707 47,798
---------- ----------
91,656 91,747
---------- ----------
Total assets .................................. $3,409,643 $3,429,956
========== ==========
</TABLE>
See accompanying notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
IEH CORPORATION
BALANCE SHEETS
As of September 26, 1997 and March 28, 1997
September 26, March 28,
1997 1997
----------- -----------
(Unaudited) (Note 1)
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES:
Accounts receivable financing .................................... $ 683,269 $ 536,457
Notes payable, current portion (Note 6) .......................... 53,475 1,789
Loan payable, current portion (Note 5) ........................... 47,099 45,710
Accrued corporate income taxes ................................... 13,387 8,217
Union pension and health and welfare, current portion (Note 7) ... 120,000 120,000
Accounts payable ................................................. 633,888 1,074,903
Other current liabilities (Note 4) ............................... 113,976 131,835
----------- -----------
Total current liabilities ..................................... 1,665,094 1,918,911
----------- -----------
LONG-TERM LIABILITIES:
Pension plan payable (Note 7) .................................... 516,966 516,966
Notes payable, less current portion .............................. 161,403 --
Loan payable, less current portion (Note 5) ...................... 209,068 240,206
Union pension and health and welfare, less current portion(Note 7) 157,764 194,491
----------- -----------
1,045,201 951,663
----------- -----------
Total liabilities ............................................. 2,710,295 2,870,574
----------- -----------
STOCKHOLDERS' EQUITY:
Common stock, $.50 par value:
10,000,000 shares authorized;
2,303,502 shares issued and outstanding .......................... 1,151,751 1,151,751
Capital in excess of par value ................................... 1,615,874 1,615,874
Retained earnings(Deficit) ....................................... (2,068,277) (2,208,243)
----------- -----------
Total stockholders' equity .................................... 699,348 559,382
----------- -----------
Total liabilities and stockholders' equity .................... $ 3,409,643 $ 3,429,956
=========== ===========
</TABLE>
See accompanying notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
IEH CORPORATION
STATEMENT OF OPERATIONS
(Unaudited)
Six Months Ended Three Months Ended
---------------------------- ----------------------------
Sept 26, Sept 27, Sept 26, Sept 27,
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
REVENUES, net sales ........... $2,545,736 $2,312,104 $1,254,888 $1,159,719
---------- ---------- ---------- ----------
COSTS AND EXPENSES:
Cost of products sold ........ 1,769,481 1,679,334 884,917 823,701
Selling, general and
administrative ............. 437,995 337,381 217,856 194,728
Interest ..................... 52,373 74,338 30,763 35,060
Depreciation and
amortization ............... 139,680 153,300 69,840 76,200
---------- ---------- ---------- ----------
2,399,529 2,244,353 1,203,376 1,129,689
---------- ---------- ---------- ----------
OPERATING INCOME .............. 146,207 67,751 51,512 30,030
---------- ---------- ---------- ----------
OTHER INCOME .................. 659 627 659 --
---------- ---------- ---------- ----------
INCOME BEFORE
INCOME TAXES ................. 146,866 68,378 52,171 30,030
---------- ---------- ---------- ----------
PROVISION FOR
INCOME TAXES ................. 6,900 13,036 4,200 6,600
---------- ---------- ---------- ----------
NET INCOME .................... $ 139,966 $ 55,342 $ 47,971 $ 23,430
========== ========== ========== ==========
NET INCOME PER
COMMON SHARE ................. $ .06 $ .02 $ .02 $ .01
========== ========== ========== ==========
WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES OUTSTANDING
(in thousands) ............... 2,304 2,304 2,304 2,304
========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
IEH CORPORATION
STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash
(Unaudited)
Six Months Ended
Sept 26, Sept 27,
1997 1996
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ...................................................... $ 139,966 $ 55,342
--------- ---------
Adjustments to reconcile net income
to net cash used in operating activities:
Depreciation and amortization ................................. 139,680 153,300
Changes in assets and liabilities:
(Increase) decrease in accounts receivable .................... (218,188) 134,249
(Increase) decrease in inventories ............................ 184,300 (110,253)
(Increase) decrease in prepaid expenses
and other current assets ................................... 34,509 29,821
(Increase) decrease in other receivables ...................... 21,285 37,706
(Increase) decrease in other assets ........................... 91 749
(Decrease) increase in accounts payable ....................... (441,015) (109,019)
(Decrease) increase in other current liabilities .............. (17,859) (100,598)
Increase in accrued corporate income taxes payable ............ 5,170 5,786
Increase in due to union pension and health and welfare ....... (36,727) (38,597)
(Decrease) increase in pension plan payable ................... -- 65,489
--------- ---------
Total adjustments .................................... (328,754) 68,633
--------- ---------
NET CASH USED IN OPERATING ACTIVITIES ............................. (188,788) 123,975
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment ...................... (111,431) (106,387)
--------- ---------
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES .......................................... (111,431) (106,387)
--------- ---------
</TABLE>
See accompanying notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
IEH CORPORATION
STATEMENTS OF CASH FLOWS (CONTINUED)
Increase (Decrease) in Cash
(Unaudited)
Six Months Ended
Sept 26, Sept 27,
1997 1996
--------- ---------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on notes payable .......................... $ -- $ (971)
Increase in notes payable .................................... 213,089 --
Proceeds from accounts receivable financing .................. 146,812 51,124
Principal payments on accounts receivable financing .......... -- --
Principal payments on loan payable ........................... (29,749) (14,443)
--------- ---------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES ....................................... 330,152 35,710
--------- ---------
INCREASE (DECREASE) IN CASH ................................... 29,933 53,298
CASH, beginning of period ..................................... 15,274 3,416
--------- ---------
CASH, end of period ........................................... $ 45,207 $ 56,714
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION,
cash paid during the nine months for:
Interest .................................................. $ 52,373 $ 74,338
========= =========
Income Taxes .............................................. $ 6,900 $ 13,036
========= =========
</TABLE>
See accompanying notes to financial statements
<PAGE>
IEH CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1- FINANCIAL STATEMENTS:
The accompanying financial statements of IEH Corporation ("The
Company") for the six months ended September 26, 1997 have
been prepared in accordance with the instructions to Form
10-QSB and do not include all of the information and footnotes
required by generally accepted accounting principles. The
financial statements have been prepared by management from the
books and records of the Company and reflect, in the opinion
of management, all adjustments (consisting of normal recurring
accruals) necessary for a fair presentation of the financial
position, results of operations, and cash flows of the Company
for the six months ended September 26, 1997. These statements
are not necessarily indicative of the results to be expected
for the full fiscal year. These statements should be read in
conjunction with the financial statements and notes thereto
included in the Company's annual report Form 10-KSB for the
fiscal year ended March 28, 1997 as filed with the Securities
and Exchange Commission.
The balance sheet at March 28, 1997 has been taken from the
audited financial statements of that date.
Note 2- INVENTORIES:
Inventories are comprised of the following:
<TABLE>
<CAPTION>
September 26, March 28,
1997 1997
----------- -----------
(Unaudited)
<S> <C> <C>
Raw materials $ 659,700 $ 791,452
Work in process 31,200 37,476
Finished goods 231,900 278,172
----------- -----------
$ 922,800 $ 1,107,100
=========== ===========
</TABLE>
Inventories are priced at the lower of cost (first-in,
first-out method) or market. During the current fiscal year,
the Company established a reserve for obsolescence to reflect
net realizable value. The balance of this reserve as of
September 26, 1997 was $25,200.
Inventories at September 26, 1997 are recorded net of this
reserve.
<PAGE>
IEH CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 3- PREPAID EXPENSES AND OTHER CURRENT ASSETS:
Prepaid expenses and other current assets are comprised of the
following:
<TABLE>
<CAPTION>
September 26, March 28,
1997 1997
-------- -------
(Unaudited)
<S> <C> <C>
Prepaid insurance $ 10,356 $ 48,054
Other current assets 7,764 4,575
-------- -------
$ 18,120 $ 52,629
========= ========
</TABLE>
Note 4- OTHER CURRENT LIABILITIES:
Other current liabilities are comprised of the following:
<TABLE>
<CAPTION>
September 26, March 28,
1997 1997
-------- -------
(Unaudited)
<S> <C> <C>
Payroll and vacation accruals $ 3,444 $ 12,817
Sales commissions 13,353 9,591
Pension plan payable 65,489 65,489
Other 31,690 43,938
----------- -----------
$ 113,976 $ 131,835
=========== ===========
</TABLE>
Note 5- LOAN PAYABLE:
On July 22, 1992, the Company obtained a loan of $435,000 from
the New York State Urban Development Corporation, ("UDC")
collateralized by machinery and equipment. The loan is payable
over ten years, with interest rates progressively increasing
from 4% to 7%.
The balance remaining at September 26, 1997 was $256,167.
<PAGE>
IEH CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 5- LOAN PAYABLE (continued):
Aggregate future principal payments are as follows:
Fiscal Year Ending March:
1998 $ 23,197
1999 45,710
2000 48,529
2001 50,694
Thereafter 88,037
---------
$ 256,167
=========
In April, 1997, the Company was informed by the UDC that the
loan was sold and conveyed to WAMCO XXIV, Ltd. All the terms
and conditions of the loan will remain in effect.
As of September 26, 1997, the Company had failed to meet one
of the financial covenants of the loan agreement; namely that
the "Company shall be obligated to maintain a tangible net
worth of not less than $1,300,000 and the Company shall be
obligated to maintain a ratio of current assets to current
liabilities of 1.1 to 1.0.
The Company reported tangible net worth of $699,348. The ratio
of current assets to current liabilities at September 26, 1997
was 1.1 to 1.0.
The Company had previously received a waiver of this covenant
from the UDC through the period ending March 31, 1994 and has
applied for additional waivers of this covenant. The UDC has
not acted on these requests.
There are no assurances that the Company will receive any
additional waivers of this covenant. Should the Company not
receive any additional waivers, then it will be deemed to be
in default of this loan obligation to the UDC and the entire
loan plus interest will become due and payable.
Note 6- NOTES PAYABLE:
The Company was in arrears in the amount of $236,000 to the
New York City Economic Development ("NYCEDC") Corporation for
rent due for its offices and manufacturing facilities. In May
1997, the Company and the NYCEDC negotiated an agreement for
the Company to pay off this indebtedness over a 48 month
period by the Company issuing notes payable due to NYCEDC. The
notes bear interest at the rate of 8.25% per annum. The
balance due at September 26, 1997 was $214,878.
<PAGE>
IEH CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 7- COMMITMENTS:
The Company has, with the United Auto Workers of America,
Local 259, a collective bargaining multiemployer pension plan.
Contributions are made in accordance with a negotiated labor
contract and are based on the number of covered employees
employed per month. With the passage of the MultiEmployer
Pension Amendments Act of 1980 ("The Act"), the Company may
become subject to liabilities in excess of contributions made
under the collective bargaining agreement. Generally, these
liabilities are contingent upon the termination, withdrawal,
or partial withdrawal from the Plan. The Company has not taken
any action to terminate, withdraw or partially withdraw from
the Plan nor does it intend to do so in the future. Under the
Act, liabilities would be based upon the Company's
proportional share of the Plan's unfunded vested benefits
which is currently not available. The amount of accumulated
benefits and net assets of such Plan also is not currently
available to the Company. Total contributions charged to
operations under this pension plan were $21,184 for the six
months ended September 26, 1997.
In December, 1993, the Company and Local 259 entered into a
verbal agreement whereby the Company would satisfy this debt
by the following payment schedule:
The sum of $10,000 will be paid by the Company each month in
satisfaction of the current arrears until this total debt has
been paid. Under this agreement, the projected payment
schedule for arrears will satisfy the total debt in 49 months.
Additionally, both parties have agreed that current obligatory
funding by the Company will be made on a timely current basis.
Effective February 1, 1995, the Company withdrew from the
union's health and welfare plan,and offered and provided its
employees an alternative health insurance plan.
As of September 26,1997, the Company reported arrears with
respect to its contributions to the union's health and welfare
and pension plans. The amount due the health and welfare plan
was $155,189 and the amount due the pension plan was $122,575,
for a total of $277,764.
The total amount due of $277,764 is reported on the
accompanying balance sheet in two components; $120,000
reported as a current liability and $157,764 as a long-term
liability.
<PAGE>
IEH CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 7- COMMITMENTS (continued):
On June 30, 1995, the Company applied to the Pension Benefit
Guaranty Corporation ("PBGC") to have the PBGC assume all of
the Company's responsibilities and liabilities under its
Salaries Pension Plan.On April 26, 1996, the PBGC determined
that the Salaried Pension Plan did not have sufficient assets
available to pay benefits which were and are currently due
under the terms of the Plan. The PBGC further determined that
pursuant to the provisions of the Employment Retirement Income
Security Act of 1974, as amended ("ERISA") that the Plan must
be terminated in order to protect the interests of the Plan's
participants. Accordingly, the PBGC intends to proceed
pursuant to ERISA to have the Plan terminated and the PBGC
appointed as statutory trustee, and to have July 31, 1995
established as the Plan's termination date.
At September 26, 1997 and March 28, 1997, $65,489 of the
pension liability is included in other current liabilities,
with the balance of $516,966 shown as a long-term liability.On
those dates, the long-term portion includes $226,041, which
represents the recognition of the additional minimum liability
to comply with the requirements of Statement of Financial
Standards No.87.
Note 8- CHANGES IN STOCKHOLDERS' EQUITY:
Retained earnings increased by $139,966 which represents the
net income for the six months ended September 26, 1997.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
The following table sets forth for the periods indicated, percentages for
certain items reflected in the financial data as such items bear to the revenues
of the Company:
<TABLE>
<CAPTION>
Six Months Ended
-----------------------------
September 26, September 27,
1997 1996
-------- --------
<S> <C> <C>
Operating Revenues ........................... $ 2,545 $ 2,312
(in thousands)
Operating Expenses:
(As a percentage of
Operating Revenues)
Cost of Products Sold ....................... 69.5% 72.6%
Selling, General and Administrative ......... 17.2% 14.6%
Interest expense ............................ 2.1% 3.2%
Depreciation and amortization ............... 5.5% 6.6%
-------- --------
Total Costs and Expenses ............ 94.3% 97.0%
-------- --------
Operating income ............................. 5.7% 3.0%
======== ========
Other Income (Expense)
Other Non-operating Income ................. -- --
Income Before Income taxes ................... 5.7% 3.0%
Income taxes ................................. 0.2% .6%
Net Income ................................... 5.5% 2.4%
</TABLE>
Comparative Analysis:
Operating revenues for the six months ended September 26, 1997 amounted
to $2,545,736, reflecting a 10% increase versus comparative six months operating
revenues of $2,312,104 for the six months ended September 27, 1996. The increase
in revenues is a direct result of management's efforts to redirect its
dependence on governmental and military sales to commercial electronic sales.
<PAGE>
Comparative Analysis (continued)
Cost of products sold amounted to $1,769,481 for the six months ended
September 26, 1997 or 69.5% of operating revenues. This reflected a 5.4%
increase in the cost of products sold from $1,679,334 or 72.6% of operating
revenues for the six months ended September 27, 1996. This increase is primarily
due to increased sales generated by the Company. Cost of sales decreased as a
percentage of revenues due t management's efforts to better control costs.
Selling, general and administrative expenses were $437,995 or 17.2% of
revenues compared to $337,381 or 14.6% of revenues for the comparable six month
period ending September 27, 1996. This reflected an increase of 29.8% and
reflects the variable impact of increased sales.
Interest expense was $52,373 for the six months ended September 26,
1997 or 2.1% of operating revenues. For the comparable period ended September
27, 1996, interest expense was $74,338 or 3.2% of operating revenues. The
decrease of 29.6% reflects the reduction in interest rates in the current fiscal
period.
Depreciation and amortization of $139,680 or 5.5% of operating revenues
was reported for the six months ended September 26, 1997. This reflects a
decrease of 8.9% from the comparable six month period ended September 27, 1996
of $153,300 or 6.6% of operating revenues. The decrease is as a result of
decreased depreciation levels on fixed assets during the six months ended
September 26, 1997.
The Company reported net income of $139,966 for the six months ended
September 26, 1997, representing income per common share of $.06 as compared to
net income of $55,342 or $.02 per common share for the six months ended
September 27, 1996. The resultant increased net income can be attributed to an
increase of 10% in operating revenues over the comparable six months ended
September 26, 1997.
<PAGE>
Item 2- Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations:
The following table sets forth for the periods indicated, sales revenues and
percentages for certain items in the financial data as such items bear to the
revenues of the Company:
<TABLE>
<CAPTION>
Three Months Ended
--------------------------------
September 26, September 27,
1997 1996
-------- --------
<S> <C> <C>
Revenues, net sales(in thousands) .......... $ 1,255 $ 1,160
-------- --------
Costs and Expenses:
(as a percentage of revenues)
Cost of products sold ..................... 71.0% 71.0%
Selling,general and administrative ........ 17.0% 16.8%
Interest expense .......................... 2.0% 3.0%
Depreciation and amortization ............. 5.9% 6.6%
-------- --------
Total costs and expenses .......... 95.9% 97.4%
-------- --------
Operating income .......................... 4.1 % 2.6%
-------- --------
Other income .............................. -- --
-------- --------
Income before income taxes ................ 4.1% 2.6%
-------- --------
Provision for income taxes ................ 0.3% 0.6%
-------- --------
Net income ................................ 3.8% 2.0%
======== ========
</TABLE>
Comparative Analysis:
Operating revenues for the three month period ending September 26, 1997 amounted
to $1,254,888 reflecting a 8.2% increase versus the prior three month period
ending September 27,1996 of $1,159,719. The increase in revenues in this
comparative period reflects the Company's efforts to redirect its sales focus to
commercial electronic sales.
<PAGE>
Comparative Analysis (continued)
Cost of products sold amounted to $884,917 for the three months ended September
26,1997 or 71.0% of revenues. This reflected an increase of 7.4% in the cost of
products sold from $823,701 or 71.0% of revenues from the comparative three
month period ended September 27,1996. This increase is primarily due to the
increase in revenue and resultant costs associated with production.
Selling, general and administrative expenses were $217,856 or 17.0% of revenues,
compared to $194,728 or 16.8% of revenues for the comparative three month period
ending September 27, 1996. This increase of 11.9% was attributed to the variable
impact of increased revenues.
Interest expense was $30,763 or 2.0% of revenues as compared to $35,060 or 3.0%
of revenues for the prior three month period ending September 27, 1996. The
decrease in interest expense of 12.2% reflects the lower rates prevailing in the
current three month period as compared to the prior period.
Depreciation and amortization of $69,840 or 5.9% was reported for the three
months ended September 26,1997 as compared to $76,200 or 6.6% of revenues for
the prior three month period ending September 27, 1996. This expense as a
percentage of revenues decreased as a result of an decrease in the acquisition
of machinery and equipment during the three month period ended September 26,
1997.
The Company reported net income of $47,971 for the three month period ended
September 26, 1997, representing net income of $.02 per common share as compared
to net income of $.01 per common share for the three months ended September 27,
1996. This comparative increase for the current three month period is due to an
overall increase in revenues during this period.
<PAGE>
PART II
Item 4. Submission of Matters to a Vote of Security Holders
On September 26, 1997 the Company held its Annual Meeting of
Shareholders. the sole matter before the stockholders for vote was the election
of two directors to the Board of Directors.
At the Annual Meeting, Allen Gottlieb and Robert Pittman were elected
Directors of the Company for a period of two (2) years until the 1999 Annual
Meeting or until their successors are elected. On the record date of the Annual
Meeting, there were 2,303,502 shares of the Company's Common Stock outstanding
and Shareholders holding 2,019,973 shares of Common Stock, in person and by
proxy were present at the Annual Meeting, thus constituting a quorum. Of the
shares voted, 1,750,935 shares were voted for Mr. Pittman's election, with
269,038 shares withheld; and l,750,935 shares were voted for Mr. Gottlieb's
election, with 269,038 shares witheld.
Item 5. Other Matters
The Company has reached an agreement with its landlord, the New York
Urban Development Corporation ("NYUDC") to settle certain matters related to the
lease of its principal offices located in Brooklyn New York, including a lawsuit
brought by the NYUDC against the Company. The lawsuit, entitled New York City
Economic Development Corporation against IEH Corporation, had been commenced in
the Civil Court of the City of New York, Kings County (Index No. L&T 88890/97).
The NYUDC claimed that IEH had not paid the proper rent due under its lease for
the period from September 1, 1992 through April 1997. The NYUDC claimed damages
of $236,000.
The Company determined it was in its best interest to settle the
lawsuit. The parties have agreed to a settlement whereby the Company will
deliver a note to the NYUDC for the amount due payable with interest at 8.25%
per year. The monthly installments will equal approximately $5,790 per month.
The parties are negotiating definitive settlement documents.
<PAGE>
In accordance with the requirements of the Exchange Act, the Registrant
has duly cause this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
IEH CORPORATION
(Registrant)
November 7, 1997 /s/Michael Offerman
-------------------
Michael Offerman
President
November 7, 1997 /s/Robert Knoth
---------------
Robert Knoth
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the financial
statements for the three months ended September 26, 1997 and is qualified in its
entirety by reference to such statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-27-1997
<PERIOD-END> SEP-26-1997
<CASH> 45,207
<SECURITIES> 0
<RECEIVABLES> 880,123
<ALLOWANCES> 10,062
<INVENTORY> 922,800
<CURRENT-ASSETS> 1,865,395
<PP&E> 5,829,765
<DEPRECIATION> 4,377,173
<TOTAL-ASSETS> 3,409,643
<CURRENT-LIABILITIES> 1,665,094
<BONDS> 0
0
0
<COMMON> 1,151,751
<OTHER-SE> (452,403)
<TOTAL-LIABILITY-AND-EQUITY> 3,409,643
<SALES> 1,254,888
<TOTAL-REVENUES> 1,255,547
<CGS> 884,917
<TOTAL-COSTS> 1,203,376
<OTHER-EXPENSES> 217,856
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 30,763
<INCOME-PRETAX> 52,171
<INCOME-TAX> 0
<INCOME-CONTINUING> 52,171
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 49,971
<EPS-PRIMARY> .02
<EPS-DILUTED> 0
</TABLE>
