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 December 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 February 11, 1998.
<PAGE>
IEH CORPORATION
CONTENTS
PART 1- FINANCIAL INFORMATION
ITEM 1- FINANCIAL STATEMENTS
Balance Sheets as of December 26, 1997 (Unaudited)
and March 28, 1997
Statement of Operations (Unaudited) for the three and nine
months ended December 26, 1997 and December 27, 1996
Statement of Cash Flows (Unaudited) for the nine months ended
December 26, 1997 and December 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 December 26, 1997 and March 28, 1997
December 26, March 28,
1997 1997
(Unaudited) (Note 1)
---------- ----------
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash .............................................. $ 79,273 $ 15,274
Accounts receivable, less allowance for
doubtful accounts of $10,062 at December 26, 1997
and March 28, 1997 .............................. 826,868 651,873
Inventories (Note 2) .............................. 910,200 1,107,100
Prepaid expenses and other current assets (Note 3) 28,643 52,629
Other receivables ................................. 8,665 30,492
---------- ----------
Total current assets ...................... 1,853,649 1,857,368
---------- ----------
PROPERTY, PLANT AND EQUIPMENT, less
accumulated depreciation and amortization of
$4,446,713 at December 26, 1997 and $ 4,238,093
at March 28, 1997 ................................. 1,421,902 1,480,841
---------- ----------
OTHER ASSETS:
Prepaid pension cost (Note 7) .................... 43,949 43,949
Other assets ..................................... 47,575 47,798
---------- ----------
91,524 91,747
---------- ----------
Total assets .............................. $3,367,075 $3,429,956
========== ==========
</TABLE>
See accompanying notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
IEH CORPORATION
BALANCE SHEETS
As of December 26, 1997 and March 28, 1997
December 26, March 28,
1997 1997
----------- -----------
(Unaudited) (Note 1)
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES:
Accounts receivable financing .................... $ 586,628 $ 536,457
Notes payable, current portion (Note 6) .......... 54,861 1,789
Loans payable, current portion (Note 5) .......... 47,809 45,710
Accrued corporate income taxes ................... 16,087 8,217
Union pension and health & welfare,
current portion (Note 7) .................... 120,000 120,000
Accounts payable .................................. 743,419 1,074,903
Other current liabilities (Note 4) ................ 159,406 131,835
----------- -----------
Total current liabilities ................ 1,728,210 1,918,911
----------- -----------
LONG-TERM LIABILITIES:
Pension plan payable (Note 7) .................... 516,966 516,966
Notes payable, less current portion (Note 6) ..... 146,992 --
Loan payable, less current portion (Note 5) ...... 196,865 240,206
Union pension & health & health & welfare,
less current portion (Note 7) ................ 133,764 194,491
----------- -----------
Total long-term liabilities .............. 994,587 951,663
----------- -----------
Total liabilities ........................ 2,722,797 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) ....................... (2,123,347) (2,208,243)
Total stockholders' equity ............... 644,278 559,382
----------- -----------
Total liabilities and stockholders' equity $ 3,367,075 $ 3,429,956
=========== ===========
</TABLE>
See accompanying notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
IEH CORPORATION
STATEMENT OF OPERATIONS
(Unaudited)
Nine Months Ended Three Months Ended
--------------------------- ----------------------------
Dec 26, Dec 27, Dec 26, Dec, 27
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES, net sales ............... $ 3,646,250 $ 3,603,908 $ 1,100,515 $ 1,291,804
----------- ----------- ----------- -----------
COSTS AND EXPENSES:
Cost of products sold ............ 2,476,456 2,559,287 787,221 915,661
Selling, general and administrative 777,804 563,460 259,564 189,371
Interest expense .................. 86,370 114,623 33,997 40,825
Depreciation and amortization ..... 209,520 230,100 69,840 76,800
----------- ----------- ----------- -----------
3,550,150 3,467,470 1,150,622 1,223,117
----------- ----------- ----------- -----------
OPERATING INCOME (LOSS) ........... 96,100 136,438 (50,107) 68,687
OTHER INCOME ...................... 902 1,084 243 457
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES . 97,002 137,522 (49,864) 69,144
PROVISION FOR INCOME TAXES ........ 12,100 19,336 5,200 6,300
----------- ----------- ----------- -----------
NET INCOME(LOSS) .................. $ 84,902 $ 118,186 $ (55,064) $ 62,844
=========== =========== =========== ===========
NET INCOME PER COMMON SHARE ....... $ .037 $ .051 $ (.024) $ .027
=========== =========== =========== ===========
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
STATEMENT OF CASH FLOWS
Increase (Decrease) in Cash
For the Nine Months Ended December 26, 1997 and December 27, 1996
(Unaudited)
December 26, December 27,
1997 1996
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ......................................... $ 84,902 $ 118,186
--------- ---------
Adjustments to reconcile net income to
net cash used in operating activities:
Depreciation and amortization ...................... 209,520 230,100
Changes in assets and liabilities:
(Increase) decrease in accounts receivable .......... (174,995) 47,038
(Increase) decrease in inventories .................. 196,900 (141,628)
(Increase) decrease in prepaid expenses and
other current assets ............................ 23,986 (17,478)
Decrease in other receivables ....................... 21,827 35,791
Decrease in other assets ............................ 223 668
(Decrease) increase in accounts payable ............. (331,484) 176,130
(Decrease) increase in other current liabilities .... 27,571 (68,642)
Increase in accrued corporate income taxes .......... 7,870 6,628
Increase in pension plan payable .................... -- 65,489
(Decrease) in due to union pension & health & welfare (60,727) (64,610)
--------- ---------
Total adjustments .......... (79,309) 269,486
--------- ---------
NET CASH PROVIDED BY
OPERATING ACTIVITIES ............................... 5,593 387,672
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of fixed assets ........................... (150,587) (164,200)
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES . (150,587) (164,200)
--------- ---------
</TABLE>
See accompanying notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
IEH CORPORATION
STATEMENT OF CASH FLOWS
Increase (Decrease) in Cash
For The Nine Months Ended December 26, 1997 and December 27, 1996
(Unaudited)
December 26, December 27,
1997 1996
--------- ---------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on notes payable ................... $ -- $ (2,007)
Increase in notes payable ............................. 200,064 --
Proceeds from accounts receivable financing ........... 50,171 9,727
Principal payments on loan payable .................... (41,242) (21,653)
--------- ---------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES ................................. 208,993 (13,933)
--------- ---------
INCREASE IN CASH ........................................ 63,999 209,539
CASH, beginning of period ............................... 15,274 3,416
--------- ---------
CASH, end of period ...................... $ 79,273 $ 212,955
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION,
cash paid during the nine months for:
Interest ........................................... $ 86,370 $ 114,623
========= =========
Income Taxes ....................................... $ 12,100 $ 19,336
========= =========
</TABLE>
See accompanying notes to financial statements
<PAGE>
IEH CORPORATION
NOTES TO FINANCIAL STATEMEMTS
(Unaudited)
Note 1- FINANCIAL STATEMENTS:
The accompanying financial statements of IEH Corporation ("The
Company") for the nine months ended December 26, 1997 have been
prepared in accordance with the instructions for 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 nine months ended December 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>
December 26, March 28,
1997 1997
---------- ----------
<S> <C> <C>
Raw materials $ 650,691 $ 791,452
Work in process 30,811 37,476
Finished goods 228,698 278,172
---------- ----------
$ 910,200 $1,107,100
========== ==========
</TABLE>
Inventories are priced at the lower of cost (first-in,
first-out method) or market, whichever is lower. The Company
has established a reserve for obsolescence to reflect net
realizable inventory value. The balance of this reserve as of
December 26, 1997 was $37,800. At March 31, 1997, the balance
of this reserve was $48,000.
Inventories at December 26, 1997 and March 28, 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>
December 26, March 28,
1997 1997
------- -------
<S> <C> <C>
Prepaid insurance $24,267 $48,054
Other current assets 4,376 4,575
------- -------
$28,643 $52,629
======= =======
</TABLE>
Note 4- OTHER CURRENT LIABILITIES:
Other current liabilities are comprised of the following:
<TABLE>
<CAPTION>
December 26, March 28,
1997 1997
-------- --------
<S> <C> <C>
Payroll and vacation accruals $ 32,725 $ 12,817
Sales commissions 13,383 9,591
Pension plan payable 65,489 65,489
Other 47,809 43,938
-------- --------
$159,406 $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% per annum.
The balance remaining at December 26, 1997 was $244,674.
Aggregate future principal payments are as follows:
Fiscal Year Ending March:
1998 $ 11,685
1999 45,710
2000 48,529
2001 50,694
Thereafter 88,056
-------
$244,674
<PAGE>
IEH CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 5- LOAN PAYABLE (continued):
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 remained in effect.
As of December 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 $644,278. The ratio
of current assets to current liabilities 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. Neither the
UDC or WAMCO XXIV, Ltd. Has 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 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 Corporation ("NYCEDC") 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 its indebtedness over a 48 month period by
the Company issuing notes payable to NYCEDC. The notes bear
interest at the rate of 8.25% per annum. The balance remaining
at December 26, 1997 was $201,853.
Note 7- COMMITMENTS:
The Company has with the United Auto Workers of America, Local
259, a collective bargaining multi-employer 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 Multi-Employer
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
<PAGE>
IEH CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 7- COMMITMENTS (continued):
not available. The amount of accumulated benefits and net
assets of such Plan also is not currently available to the
Company. The total contributions charged to operations under
this pension plan were $29,515 for the nine months ended
December 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.
Additionally, both parties 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 its employees an
alternative health insurance plan.
As of December 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 $98,575.
The total amount due of $253,764 is reported on the
accompanying balance sheet in two components; $120,000
reported as a current liability and $133,764 as a long-term
liability.
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
Salaried 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 proceeded 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.
<PAGE>
IEH CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 7- COMMITMENTS (continued):
At December 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 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 $84,902 which represents the
net income for the nine months ended December 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>
Nine Months Ended
---------------------------
December 26, December 27,
1997 1996
-------- --------
<S> <C> <C>
Operating Revenues (in thousands) $ 3,646 $ 3,604
Operating Expenses:
(As a percentage of Operating Revenues)
Cost of Products Sold 67.9% 71.0%
Selling, General and Administrative 21.2% 15.6%
Interest Expense 2.5% 3.2%
Depreciation and Amortization 5.8% 6.4%
-------- --------
Total Costs and Expenses 97.4% 96.2%
======== ========
Operating Income 2.6% 3.8%
======== ========
Other Income -- --
======== ========
Income Before Income Taxes 2.6% 3.8%
======== ========
Income Taxes .3% .5%
======== ========
Net Income 2.3% 3.3%
======== ========
</TABLE>
Comparative Analysis:
Nine Months Ended December 26, 1997 compared to December 27, 1996
Operating revenues for the nine months ended December 26, 1997 amounted to
$3,646,250, reflecting a 1% increase versus the comparative nine months
operating revenues of $3,603,908. The increase is a direst result of
management's to redirect its dependence on governmental and military sales to
commercial electronic sales.
<PAGE>
Comparative Analysis (continued)
Cost of products sold amounted to $2,476,456 for the nine months ended December
26, 1997 or 67.9% of operating revenues. This reflected a decrease of $82,831 or
3.2% in the cost of products sold of $2,559,287 for the nine months ended
December 27, 1996. This decrease is primarily due to management's efforts to
better control costs. Cost of products sold decreased as a percentage of
revenues in the comparative periods.
Selling, general and administrative expenses were $770,804 or 21.2% of revenues
compared to $563,460 or 15.6% of revenues for the comparable nine moth period
ended December 27, 1996. This reflected an increase of 36.8% and reflects
increased expense levels in this segment.
Interest expense was $86,370 or 2.5% of revenues as compared to $114,623 or 3.2%
of revenues in the nine month period ended December 27, 1996. This decrease of
24.6% reflects the reduction in interest rates in the current fiscal period.
Depreciation and amortization of $209,520 or 5.8% of revenues was reported for
the nine month period ended December 26, 1997. This reflects a decrease of 8.9%
from the comparable nine month period ended December 27, 1996 of $230,100 or
6.4% of revenues. The decrease is a result of decreased depreciation levels on
fixed assets during the nine month period ended December 26, 1997.
The Company reported net income of $84,902 for the nine months ended December
26, 1997, representing income per common share of $.037 as compared to $118,186
or $.051 per common share for the nine months ended December 26, 1997. The
resultant decrease in net income can be attributed to increased operating
expenses in the current nine month period ending December 26, 1997.
<PAGE>
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
----------------------------------
December 26, December 27,
1997 1996
------------ ------------
<S> <C> <C>
Operating Revenues (in thousands) $ 1,100,515 $ 1,291,804
Operating Expenses:
(As a percentage of Operating Revenues)
Cost of Products Sold 71.5% 70.9%
Selling,General and Administrative 23.7% 14.8%
Interest Expense 3.1% 3.1%
Depreciation and Amortization 6.3% 5.9%
------------ ------------
Total Costs and Expenses 104.6% 94.7%
============ ============
Operating Income (Loss) (4.6%) 5.3%
============ ============
Other Income -- --
============ ============
Income ( Loss) Before Income Taxes (4.6%) 5.3%
============ ============
Income Taxes .4% .5%
Net Income ( Loss) (5.0%) 4.8%
============ ============
</TABLE>
Comparative Analysis:
Three Months Ended December 26, 1997 compared to December 26, 1996
Operating revenues for the three month period ending December 26, 1997 amounted
to $1,100,515 reflecting a decrease of 14.8% versus the three month period ended
December 27, 1996. The decrease in revenues is due to decreased sales in the
commercial electronic sector.
<PAGE>
Comparative Analysis:
Cost of products sold amounted to $787,221 or 71.5% of operating revenues for
the three months ended December 26, 1997. This reflected a 14% decrease in the
cost of products sold from $915,661 or 70.9% of operating revenues in the three
months ended December 27, 1996. This decrease is due reduced costs associated
with the decrease in sales in this three month period.
Selling, general and administrative expenses were $259,564 or 23.7% of operating
revenues as compared to $190,371 or 14.8% of operating revenues in the three
months ended December 27, 1996. This increase of $69,193 or 36.3% is due to
increased levels of expense in this sector.
Interest expense was $33,997 or 3.1% of operating revenues as compared to
$40,825 or 3.1% of revenues in the three months ended December 27, 1996.. This
decrease of $6,828 or 16.7% is due to decreased rates of interest in the current
period.
Depreciation and amortization of $69,840 or 6.3% was reported for the three
months ended December 26, 1997 as compared to $76,800 or 5.9% of revenues in the
three months ended December 27, 1996. This expense as a percentage of revenues
increased as a result of lower operating revenues in the current three month
period ended December 26, 1997.
The Company reported a net loss of $55,064 for the three months ended December
26, 1997, representing a net loss of $.024 per common share as compared to net
income of $.027 per share in the three months ended December 27, 1996. Thus
comparative decrease for the three month period is due to increased operating
expenses and lower operating revenues.
<PAGE>
PART II
Item 5. Other Matters
As previously reported, the Company 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 plus interest of approximately
$41,000.
The Company determined it was in its best interest to settle the
lawsuit. The parties agreed to a settlement, effective as of May, 1997 whereby
the Company agreed to a repayment schedule for the amount due payable with
interest at 8.25% per year. The monthly installments equal approximately $5,790
per month. The settlement provides for the entry, following notice and a cure
period, of a default judgement by the NYUDC in the event the Company fails to
timely pay amounts due under the lease and the settlement.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
99.1 Stipulation and Escrow Agreement dated December 18, 1997 between
the Company and New York Urban Development Corporation together with
Stipulation, Consent and Final Judgement.
(b) Reports on Form 8-k
None
<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)
February 16, 1998 /s/Michael Offerman
-------------------
Michael Offerman
President
February 16, 1998 /s/Robert Knoth
---------------
Robert Knoth
Chief Financial Officer
<PAGE>
SIGNATURES
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)
February 16, 1998 /s/Michael Offerman
-------------------
Michael Offerman
President
February 16, 1998
/s/Robert Knoth
---------------
Chief Financial Officer
<PAGE>
EXHIBITS
99.1 Stipulation and Escrow Agreement between
the Company and the New York City
Economic Development Corporation,
together with Stipulation, Consent Order
and Final Judgement.
<PAGE>
CIVIL COURT OF THE CITY OF NEW YORK
COUNTY OF KINGS: NON HOUSING PART 52
NEW YORK CITY ECONOMIC Index No. L&T 88890 /97
DEVELOPMENT CORPORATION,
Petitioner-Landlord, STIPULATION AND
ESCROW AGREEMENT
-against-
IEH CORPORATION, A New York Corporation,
Brooklyn Army Terminal Building B
Forming a Part of the Brooklyn Army
Terminal, Units e and 8-F, The Space on
the Eighth Floor, as more particularly
delineated on the Floor Plan annexed
hereto, marked Exhibit "A" in the
building known as Building B forming a
part of the Brooklyn Army Terminal, in
the Borough of Brooklyn, City of New
York, 140 58th Street Brooklyn, New York
11220
Respondent-Tenant,
**"JOHN DOE" and/or "JANE DOE",
and/or "XYZ CORP."
Respondents-Undertenants,
IT IS HEREBY STIPULATED AND AGREED, by and between the respective
parties to the above-captioned proceeding as follows:
1. Respondent-Tenant IEH CORPORATION ("Respondent"), appears
by its attorneys, Goldstein & DiGioia, LLP, 369 Lexington Avenue, New York, New
York 10017, and admits and concedes the jurisdiction of this Court, and waives
any and all jurisdictional defenses that it may have with respect to the instant
proceeding.
2. This proceeding is hereby marked off-calendar on consent of
the parties.
3. Simultaneous with the parties agreement to mark this
proceeding off calendar, and as an expressed condition thereof, Petitioner and
Respondent have entered into a written Stipulation, Consent Order, and Final
Judgement (the "Stipulation") to be held in escrow in for of Petitioner, Leon I.
<PAGE>
Behar & associates, PC.,as Escrow Agent, 7 Penn Plaza , 14th Floor, New York,
New York 10001 pending Respondents's compliance with repayment provisions set
forth therein.
4. If Respondent fails to do the following, then the escrowed
Stipulation judgement will be released to Petitioner and shall be filed with the
Court:
A. Comply with each and every provision
of the Stipulation and the parties'
existing lease agreement, including
any and all provisions for repayment
of rental arrears, and default in
payment of current rent.
5. Upon Respondent's default in compliance with any of the
provisions set forth in the Stipulation, Petitioner may move on Eight (8) Days
Notice of Default by personal service, or Thirteen (13) days by mail, to
Respondent's counsel for an Order that the court "so order" the parties'
Stipulation, enter a final judgement of possession with a warrant of eviction to
issue forthwith, and a monetary judgement against Respondent.
6. In consideration for Respondent's agreement to enter into
this Stipulation and Escrow Agreement (the "Escrow Agreement"), Petitioner
agrees not to seek a final judgement of possession or monetary judgement at this
time.
7. Respondent agrees that upon default and failure to comply
with any provision's contained in the Stipulation, that Respondent will be
liable to Petitioner for legal fees, costs, expenses, and disbursements arising
from Respondent's failure to abide by its obligations under the parties'
Stipulation and Escrow Agreement, including, but not limited to, actual
attorneys' fees incurred by Petitioner.
- 2 -
<PAGE>
8. Respondent further represents that it has entered into this
Stipulation freely, voluntarily, and knowingly, without pressure, duress or
harassment by the Petitioner, or any other person an/or entity, and acknowledges
that the Petitioner has entered into this Stipulation in specific reliance upon
Respondent's representations.
9. This court retained jurisdiction over this matter. 10. This
Stipulation may not be modified orally.
Dated: New York, New York
December , 1997
IEH Corporation NEW YORK CITY ECONOMIC
DEVELOPMENT CORPORATION
Petitioner
By: ________________ By: /s/Daniel P. Kurtz
------------------
Daniel P. Kurtz
Executive Vice President
GOLDSTEIN & DIGIOIA, LLP LEON I. BEHAR & ASSOCIATES, P.C.
Attorneys for Respondent Attorneys for Petitioner
369 Lexington Avenue, 18th Floor 7 Penn Plaza, 14th Floor
New York, New York 10017 New York, New York 10001
By: /s/Brian C. Daughney By: /s/Leon I. Behar
-------------------- ----------------
Brian C. Daughney, Esq. Leon I. Behar, Esq.
- 3 -
<PAGE>
CIVIL COURT OF THE CITY OF NEW YORK
COUNTY OF KINGS: NON HOUSING PART 52
NEW YORK CITY ECONOMIC Index No. L&T 88890 /97
DEVELOPMENT CORPORATION,
Petitioner-Landlord, STIPULATION CONSENT
ORDER, AND FINAL
JUDGEMENT
-against-
IEH CORPORATION, A New York Corporation,
Brooklyn Army Terminal Building B
Forming a Part of the Brooklyn Army
Terminal, Units e and 8-F, The Space on
the Eighth Floor, as more particularly
delineated on the Floor Plan annexed
hereto, marked Exhibit "A" in the
building known as Building B forming a
part of the Brooklyn Army Terminal, in
the Borough of Brooklyn, City of New
York, 140 58th Street Brooklyn, New York
11220
Respondent-Tenant,
**"JOHN DOE" and/or "JANE DOE",
and/or "XYZ CORP."
Respondents-Undertenants,
IT IS HEREBY STIPULATED AND AGREED, by and between the respective
parties to the above-captioned proceeding as follows:
1. Respondent-Tenant IEH CORPORATION ("Respondent"), appears
by its attorneys, Goldstein & DiGioia, LLP, 369 Lexington Avenue, New York, New
York 10017, and admits and concedes the jurisdiction of this Court, and waives
any and all jurisdictional defenses that it may have with respect to the instant
proceeding.
2. Respondent consents to the entry of a final judgement of
possession, warrant to issue forthwith, execution stayed as set forth herein.
- 4 -
<PAGE>
3. In consideration of Respondent's consent to enter of a
final judgment of possession, and warrant to issue forthwith, as set forth above
in Paragraph 2, Petitioner agrees to stay execution of the warrant provided that
Respondent complies with the terms of the Stipulation, in their entirety, as set
forth herein.
4. Respondent consents to the entry of a money judgement in
favor of the Petitioner in the amount of $236,000.00 (the "Original Judgement"),
representing rent and additional rent arrears due for the period from September
1, 1992 through and including April 1, 1997. All sums shall be tendered by
certified check or company check only. The Clerk of the Court is directed to
enter the Original Judgement in the amount of $236,000.00 in favor of
Petitioner.
5. In connection with satisfaction of the Original Judgement,
Respondent agrees to pay $277,880.64, i.e. the full amount of said arrears
totaling $236,000.00, plus 8.25% interest thereon compounded annually over the
repayment period totaling $41,880.64, as set forth in Paragraph 6(a), et. seq.
and the repayment Schedule annexed hereto as Exhibit " A" and made part hereof
as if fully set forth below.
6. In the event Respondent defaults in compliance with the
repayment schedule as set forth in Paragraph 7(b), et. seq. and the repayment
Schedule annexed hereto as Exhibit "A", the Clerk of the Court is directed to
modify the Original Judgement in said amount in favor of Petitioner upon receipt
of an Affidavit of Default to include the Original Judgement ($236,000.00) plus
8.25% interest thereon compounded annually over the repayment period totaling
($41,880.64) for a modified Judgement of $277,880.64 (the "Modified Judgement").
less any payments already made toward the Original Judgement.
- 5 -
<PAGE>
7. Respondent further agrees to pay said Original Judgement in
accordance with the following repayment schedule set forth below, and as
detailed on the repayment schedule annexed hereto as Exhibit "A" and made a part
hereof:
a. Commencing in May, 1997 and continuing thereafter, with
said payments to be made as follows: $5,789.18 each month and continuing each
and every month thereafter through and including April 2001 on or before the
twentieth (20th) day of each month.
b. Respondent's Arrears Payment Schedule is set forth as
follows, and as annexed hereto as Exhibit "A".
<TABLE>
<CAPTION>
Key Figures Inputs
<S> <C> <C>
Annual Loan Payments $69,470.16 Loan Principal Amount $236,000.00
Monthly Payments $5,789.18 Annual Interest Rate 8.25%
Interest In First Calendar Year $12,166.79 Loan Period In Years 4
Interest over Term of Loan $41,880.64 Base Year of Loan 1,997
Sum of All Payments $277,880.64 Base Month of Loan May
</TABLE>
- 6 -
<PAGE>
<TABLE>
<CAPTION>
Payments in First 12 Months
Year Month Beginning Payments Principal Interest Cumulative Cumulative Ending
Balance Principal Interest Balance
- ------ ----- ---------- -------- -------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Yr1997 May 236,000.00 5,789.18 4,166.68 1,622.5 4,166.68 1,622.50 231,833.00
June 231,833.32 5,789.18 4,195.33 1,593.85 8,362.018 3,216.35 227,637.99
July 227,637.99 5,789.18 4,224.17 1,565.01 12,586.18 4,781.36 223,413.82
Aug. 223,413.82 5,789.18 4,253.21 1,535.97 16,839.39 6,317.33 219,160.61
Sept. 219,160.61 5,789.18 4,282.45 1,506.73 21,121.84 7,824.06 214,878.16
Oct. 214,878.16 5,789.18 4,311.89 1,477.29 25,433.73 9,301.35 210,566.27
Nov. 210,566.27 5,789.18 4,341.54 1,447.64 29,775.27 10,748.99 206,224.73
Dec. 206,224.73 5,789.18 4,371.38 1,417.80 34,146.65 12,166.79 201,853.35
Yr1998 Jan. 201,853.35 5,789.18 4,401.44 1,387.74 38,548.09 13,554.53 197,451.91
Feb. 197,451.91 5,789.18 4,431.7 1,357.48 42,979.79 14,912.01 193,020.21
March 193,020.21 5,789.18 4,462.17 1,327.01 47,441.96 16,239.02 188,558.04
April 188,558.04 5,789.18 4,492.84 1,296.34 51,934.8 17,535.36 184,065.20
<CAPTION>
Yearly Schedule of Balances and Payments
Year Beginning Payments Principal Interest Cumulative Cumulative Ending
Balance Principal Interest Balance
- ---- ---------- --------- --------- -------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Yr.
1998 201,853.35 69,470.16 54,861.00 14,609.00 89,007.76 26,775.84 146,992.00
Yr.
1999 146,992.24 69,470.16 59,562.00 9,908.00 148,569.82 36,683.94 87,430.00
Yr.
2000 87,430.18 69,470.16 64,666.00 4,804.00 213,235.88 41,888.04 22,764.00
Yr.
2001 22,764.12 29,156.72 22,764.00 393.00 236,000.00 41,880.64 0.00
</TABLE>
8. respondent agrees and acknowledges that timely compliance
with the repayment provisions in Paragraph 7, are in addition to its existing
obligation to timely paid monthly rent and additional rent by the twentieth
(20th) day of each month.
- 7 -
<PAGE>
a. Current monthly rent payments are:
Rent: $18,071.36
Pilot $ 343.00
Heat/Maintenance $ 92.56
Electricity $ 3,000.00 (approximate)
9. Respondent further agrees and acknowledges that all current
charges for monthly rent and additional rent in Paragraph 8(a), supra, are to be
timely paid without failure, in addition to Respondent's adherence to the
enclosed repayment schedule as set forth in Paragraph 7(b), et. seq., and
annexed hereto as Exhibit "A".
10. In the event that Respondent fails to timely make any of
the payments required under this Stipulation, Petitioner may immediately execute
its warrant upon service of a 72-hour notice of eviction. However, if fully paid
within the 72-Hour Notice period, Petitioner may not execute the warrant of
eviction.
11. All parties to this Stipulation hereby acknowledge and
represent that said stipulation's terms and consequences have been read, that
same are agreeable to them, and that they concur in its terms and freely agree
to be bound by same.
12. This retainer letter agreement is executed by Respondent
with the authority and consent of the Board of Directors and Officers of
Respondent IEH Corporation.
13. It is specifically understood and agreed by and between
the parties that this Stipulation is the result of extensive negotiations
between the parties. It is understood and agreed that all parties shall be
deemed to have collectively drawn these documents in order to avoid any
interference by an court as against the preparer of this document.
- 8 -
<PAGE>
14. Respondent further represents that it has entered into
this Stipulation freely, voluntarily, and knowingly, without pressure, duress or
harassment by the Petitioner, or any other person an/or entity, and acknowledges
that the Petitioner has entered into this Stipulation in specific reliance upon
Respondent's representations.
15. This court shall retain jurisdiction over this matter. 16.
16. This Stipulation may not be modified orally.
Dated: New York, New York
December , 1997
IEH Corporation NEW YORK CITY ECONOMIC
DEVELOPMENT CORPORATION
Petitioner
By: ____________________ By: /s/Daniel P. Kurtz
------------------
Daniel P. Kurtz
Executive Vice President
GOLDSTEIN & DIGIOIA, LLP LEON I. BEHAR & ASSOCIATES, P.C.
Attorneys for Respondent Attorneys for Petitioner
369 Lexington Avenue, 18th Floor 7 Penn Plaza, 14th Floor
New York, New York 10017 New York, New York 10001
By: /s/Brian C. Daughney By: Leon I. Behar
-------------------- -------------
Brian C. Daughney, Esq. Leon I. Behar, Esq.
- 9 -
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-26-1998
<PERIOD-END> DEC-26-1997
<CASH> 79,273
<SECURITIES> 0
<RECEIVABLES> 836,930
<ALLOWANCES> 10,062
<INVENTORY> 910,200
<CURRENT-ASSETS> 1,853,649
<PP&E> 5,868,615
<DEPRECIATION> 4,446,713
<TOTAL-ASSETS> 3,367,075
<CURRENT-LIABILITIES> 1,728,210
<BONDS> 0
0
0
<COMMON> 1,151,751
<OTHER-SE> (507,473)
<TOTAL-LIABILITY-AND-EQUITY> 3,367,075
<SALES> 3,646,250
<TOTAL-REVENUES> 3,647,152
<CGS> 2,476,456
<TOTAL-COSTS> 2,476,456
<OTHER-EXPENSES> 980,324
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 86,370
<INCOME-PRETAX> 97,002
<INCOME-TAX> 0
<INCOME-CONTINUING> 97,002
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 84,902
<EPS-PRIMARY> .037
<EPS-DILUTED> 0
</TABLE>
