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 June 30, 2000
[ ] 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. O-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 [ ]
2,303,468 shares of Common Shares, par value $.50 per share, were outstanding as
of June 30, 2000.
<PAGE>
IEH CORPORATION
CONTENTS
Page
Number
------
Part I - FINANCIAL INFORMATION
ITEM 1- FINANICAL STATEMENTS
Balance Sheets as of June 30, 2000 (Unaudited) and March 31, 2000 2-3
Statement of Operations (Unaudited) for the three months ended
June 30, 2000 and July 2, 1999 4
Statement of Cash Flows (Unaudited) for the three months ended
June 30, 2000 and July 2, 1999 5-6
Notes to Financial Statements (Unaudited) 7-11
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 12-15
Part II - OTHER INFORMATION 16
-1-
<PAGE>
<TABLE>
<CAPTION>
IEH CORPORATION
BALANCE SHEETS
As of June 30, 2000 and March 31, 2000
June 30, March 31,
2000 2000
---------- ----------
(Unaudited) (Note 1)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash ..................................................... $ 2,294 $ 4,045
Accounts receivable, less allowances for doubtful accounts
of $10,062 at June 30, 2000 and March 31, 2000 ........ 772,350 772,634
Inventories (Note 2) ..................................... 943,900 976,169
Prepaid expenses and other current assets (Note 3) ....... 17,086 16,212
---------- ----------
Total current assets ........................... 1,735,630 1,769,060
---------- ----------
PROPERTY, PLANT AND EQUIPMENT, less accumulated
depreciation and amortization of $5,142,574 at June 30,
2000 and $5,075,854 at March 31, 2000 ................. 1,253,896 1,258,153
---------- ----------
OTHER ASSETS:
Prepaid pension cost (Note 8) .......................... 43,949 43,949
Other assets ........................................... 47,467 46,378
---------- ----------
91,416 90,327
---------- ----------
Total assets ............................................. $3,080,942 $3,117,540
========== ==========
</TABLE>
See accompanying notes to financial statements
-2-
<PAGE>
<TABLE>
<CAPTION>
IEH CORPORATION
BALANCE SHEETS
As of June 30, 2000 and March 31, 2000
June 30, March 31,
2000 2000
----------- -----------
(Unaudited) (Note 1)
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES:
Accounts receivable financing ................................ $ 699,523 $ 689,775
Notes payable, equipment, current portion (Note 7) ........... 25,355 19,555
Notes payable, current portion (Note 6) ...................... 55,762 66,009
Loans payable, current portion (Note 5) ...................... 55,015 53,929
Accrued corporate income taxes ............................... 15,612 16,020
Union pension and health & welfare, current portion (Note 8) . 96,000 96,000
Accounts payable ............................................. 752,482 779,686
Other current liabilities (Note 4) ........................... 128,976 159,130
----------- -----------
Total current liabilities .......................... 1,828,725 1,880,104
----------- -----------
LONG-TERM LIABILITIES:
Pension Plan payable (Note 8) ................................ 516,966 516,966
Notes payable, equipment, less current portion (Note 7) ...... 69,123 50,858
Notes payable, less current portion (Note 6) ................. -- 5,750
Loan payable, less current portion (Note 5) .................. 67,445 81,127
Union pension & health & health & welfare,
less current portion (Note 8) .............................. 29,189 36,689
----------- -----------
Total long-term liabilities ........................ 682,723 691,390
----------- -----------
Total liabilities .................................. 2,511,448 2,571,494
----------- -----------
STOCKHOLDERS' EQUITY:
Common stock, $.50 par value; 10,000,000 shares authorized;
2,303,468 shares issued and outstanding at June 30, 2000 and
March 31, 2000
Capital in excess of par value ............................... 1,615,874 1,615,874
Retained earnings (Deficit) .................................. (2,198,114) (2,221,562)
----------- -----------
Total stockholders' equity ......................... 569,494 546,046
----------- -----------
Total liabilities and stockholders' equity ......... $ 3,080,942 $ 3,117,540
=========== ===========
</TABLE>
See accompanying notes to financial statements
-3-
<PAGE>
<TABLE>
<CAPTION>
IEH CORPORATION
STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended
---------------------------
June 30, July 2,
2000 1999
----------- -----------
<S> <C> <C>
REVENUE, net sales ............................ $ 1,190,994 $ 1,134,232
----------- -----------
COSTS AND EXPENSES
Cost of products sold ......................... 841,910 824,979
Selling, general and administrative ........... 214,543 192,755
Interest expense .............................. 40,162 37,697
Depreciation and amortization ................. 66,720 75,525
----------- -----------
1,163,335 1,130,956
OPERATING INCOME (LOSS) ....................... 27,659 3,276
OTHER INCOME .................................. -- 241
----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES ............. 27,659 3,517
----------- -----------
PROVISION FOR INCOME TAXES .................... 4,200 4,200
NET INCOME (LOSS) ............................. $ 23,459 $ (683)
=========== ===========
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE ... $ .01 $ (.01)
=========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES
OUTSTANDING (in thousands) ................. 2,303 2,303
=========== ===========
</TABLE>
See accompanying notes to financial statements
-4-
<PAGE>
<TABLE>
<CAPTION>
IEH CORPORATION
STATEMENT OF CASH FLOWS
Increase (Decrease) in Cash
For the Three Months Ended June 30, 2000 and July 2, 1999
(Unaudited)
June 30, July 2,
2000 1999
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) .............................................. $ 23,459 $ (683)
Adjustments to reconcile net income to net cash used in
operating activities:
Depreciation and amortization .................................. 66,720 75,525
Changes in assets and liabilities:
(Increase) decrease in accounts receivable ..................... 284 (331,392)
(Increase) decrease inventories ................................ 32,269 23,471
(Increase) decrease in prepaid expenses and other current assets (874) 2,506
(Increase) decrease in other assets ............................ (1,089) 136
Increase (decrease) in accounts payable ........................ (27,215) 6,669
Increase (decrease) in other current liabilities ............... (30,154) 13,278
Increase (decrease) in accrued corporate income taxes .......... (408) 2,213
Increase (decrease) in due to union pension & health & welfare . (7,500) --
--------- ---------
Total adjustments .................................... 32,033 (207,594)
--------- ---------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
55,492 (208,277)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of fixed assets ...................................... (62,463) (31,330)
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES .......................... $ (62,463) $ (31,330)
========= =========
</TABLE>
See accompanying notes to financial statements
-5-
<PAGE>
<TABLE>
<CAPTION>
IEH CORPORATION
STATEMENT OF CASH FLOWS
Increase (Decrease) in Cash
For the Three Months Ended June 30, 2000 and July 2, 1999
(Unaudited)
June 30, July 2,
2000 1999
--------- ---------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in notes payable - Net ......... $ 8,068 $ (18,436)
Proceeds from accounts receivable financing ........ 9,748 260,402
Increase (decrease) on loan payable ................ (12,596) (12,529)
--------- ---------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
5,220 229,437
--------- ---------
INCREASE (DECREASE) IN CASH
(1,751) (10,170)
CASH, beginning of period .......................... 4,045 15,120
--------- ---------
CASH, end of period ................................ $ 2,294 $ 4,950
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION, cash paid during the three months for:
Interest ...................................... $ 40,162 $ 37,697
========= =========
Income Taxes .................................. $ 4,200 $ 4,200
========= =========
</TABLE>
See accompanying notes to financial statements
-6-
<PAGE>
IEH CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1 - FINANCIAL STATEMENTS:
The accompanying financial statements of IEH Corporation ("The
Company") for the three months ended June 30, 2000 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 three months ended June 30, 2000. 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 31, 2000 as filed with the Securities
and Exchange Commission.
The balance sheet at March 31, 2000 has been taken from the
audited financial statements of that date.
Note 2 - INVENTORIES:
Inventories are comprised of the following:
June 30, March 31,
2000 2000
-------- --------
Raw materials $660,730 $683,443
Work in progress 188,780 190,480
Finished goods 94,390 102,246
-------- --------
$943,900 $976,169
======== ========
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
June 30, 2000 was $12,000. At March 31, 2000, the balance of
this reserve was $0.
Inventories at June 30, 2000 and March 31, 2000 are recorded
net of this reserve.
Note 3 - PREPAID EXPENSES AND OTHER CURRENT ASSETS:
Prepaid expenses and other current assets are comprised of the
following:
June 30, March 31,
2000 2000
------- -------
Prepaid insurance $10,702 $14,613
Other current assets 6,384 1,599
------- -------
$17,086 $16,212
======= =======
-7-
<PAGE>
IEH CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 4 - OTHER CURRENT LIABILITIES:
Other current liabilities are comprised of the following:
June 30, March 31,
2000 2000
------- ---------
Payroll and vacation accruals $ 31,356 $ 63,317
Sales commissions 8,142 5,715
Pension Plan payable 65,489 65,489
Other 23,989 24,609
-------- ------
$128,976 $ 159,130
======== =========
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 8% annum.
The balance remaining at June 30, 2000 was $122,460.
Aggregate future principal payments are as follows:
Fiscal Year Ending March:
2001 $ 40,847
2002 58,405
2003 23,208
---------
$ 122,460
=========
In April 1997, the Company was informed by the UDC that the
loan was sold and conveyed to WAMCO XXIV, Ltd. All of the
terms and conditions of the loan remained in effect.
As of June 30, 2000, 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.
-8-
<PAGE>
IEH CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 5 - LOAN PAYABLE (continued):
At June 30, 2000, the Company reported tangible net worth of
$569,494. The ratio of current assets to current liabilities
was .95 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 nor WAMCO XXVI, 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 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 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 note bears interest at
the rate of 8.25% per annum. The balance remaining at June
30,2000 was $55,762.
Note 7 - NOTES PAYABLE EQUIPMENT:
The Company financed the acquisition of new computer equipment
and software with notes payable. The notes are payable over a
sixty month period. The balance remaining at June 30, 2000
amounted to $94,478.
Aggregate future principal payments are as follows:
Fiscal year ended March 31,
2001 $ 19,016
2002 25,355
2003 25,333
2004 16,978
Thereafter 7,796
--------
$ 94,478
========
-9-
<PAGE>
IEH CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 8 - 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 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 $9,241 for the three
months ended June 30, 2000.
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 $8,000 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 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 June 30, 2000, the Company had paid down the arrears to
the Union's pension plan and the amount due the health and
welfare plan was $125,189.
The total amount due of $125,189 is reported on the
accompanying balance sheet in two components; $96,000 reported
as a current liability and $29,189 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 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.
-10-
<PAGE>
IEH CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 8 - COMMITMENTS (continued):
At June 30, 2000 and July 2, 1999, $65,489 of the pension
liability is included in other current liabilities, with the
balance of $516,966 shown as 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.
In August 1998, the Company was notified by the PBGC that the
Company is liable to the PBGC for the following amounts as of
September 1, 1998:
o $456,418 representing the amount of unfunded benefit
liabilities of the Plan
o $242,097 representing funding liability
The total amount claimed by the PBGC amounts to $698,515.
The amount claimed is being contested by the Company, and an
appeal has been filed with the PBGC. The Company is presently
awaiting a response from the PBGC.
Note 9 - CHANGES IN STOCKHOLDERS' EQUITY:
Retained earnings (deficit) decreased by $23,459, which
represents the net income for the three months ended June 30,
2000.
Note 10 - YEAR 2000 UPDATE:
Subject to continued monitoring of third party suppliers, IEH
Corporation's year 2000 program ("Program") is complete, and
no material problems have arisen since the end of calendar
year 1999. The Program addressed the issue of computer
programs and embedded computer chips being unable to
distinguish between the year 1900 and the year 2000. All of
the Company's business computer systems are year 2000 ready.
-11-
<PAGE>
IEH CORPORATION
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>
Three Months Ended
------------------------
June 30, July 2,
2000 1999
-------- --------
<S> <C> <C>
Operating Revenues (in thousands) ......................... $ 1,191 $ 1,134
-------- --------
Operating Expenses: (as a percentage of operating revenues)
Cost of Products Sold ..................................... 70.7% 72.7%
Selling, General and Administrative ....................... 18.0% 17.0%
Interest Expense .......................................... 3.4% 3.3%
Depreciation and Amortization ............................. 5.6% 6.7%
------ --------
Total Costs and Expenses ........................ 97.7% 99.7%
------ --------
Operating Income (loss) ................................... 2.3% .3%
------ --------
Other Income .............................................. -- --
------ --------
Income (loss) before Income Taxes ......................... 2.3% .3%
Income Taxes .............................................. (.3)% (.4)%
------ --------
Net Income (loss) ......................................... 2.0% (.1)%
------ --------
</TABLE>
COMPARATIVE ANALYSIS
Operating revenues for the three months ended June 30, 2000
amounted to $1,190,994, reflecting a 5.0% increase versus the
comparative three months operating revenues of $1,134,232. The
increase is a direct result of management's new market sales
in the commercial electronic sector.
Cost of products sold amounted to $841,910 for the three
months ended June 30, 2000 or 70.7% of operating revenues.
This reflected an increase of $16,931 or 2.1% of the cost of
products sold of $824,979 for the three months ended July 2,
1999. This increase is primarily due to increased production
costs inherent in producing new products.
Selling, general and administrative expenses were $214,543 or
18.0% of revenues compared to $192,755 or 17.0% of revenues
for the comparable three-month period ended July 2, 1999. This
reflected an increase of 11.3% and reflects management's
efforts to support additional revenues.
-12-
<PAGE>
IEH CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
COMPARATIVE ANALYSIS (continued)
Interest expense was $40,162 or 3.4% of revenues for the
period ended June 30, 2000 as compared to $37,697 or 3.3% of
revenues in the three-month period ended July 2, 1999. This
increase of 6.5% reflects an increase in borrowing by the
Company in the current fiscal period.
Depreciation and amortization of $66,720 or 5.6% of revenues
was reported for the three-month period ended June 30, 2000.
This reflects a decrease of 11.7% from the comparable
three-month period ended July 2, 1999 of $75,525 or 6.7% of
revenues. The decrease is a result of some fixed assets
becoming fully depreciated at the end of the year and a
leveling off on new acquisitions.
The Company reported net income of $23,459 for the three
months ended June 30, 2000, representing basic earnings per
common share of $.01 as compared to a basic loss of $683 or
$.01 per common share for the three months ended July 2, 1999.
LIQUIDITY AND CAPITAL RESOURCES
The Company reported a working capital deficit as of June 30,
2000 of $93,095 as compared to a working capital deficit of
$111,044 at July 2, 1999. The decrease of this deficit in
working capital of $17,949 was attributable to the following
items:
Net income (loss)
(excluding depreciation and amortization) $ 90,179
Capital expenditures (62,463)
Other transactions (9,767)
--------
$ 17,949
========
As a result of the above, the current ratio (current assets to
current liabilities) was .95 to 1.0 as of June 30, 2000 as
compared to .94 to 1.0 at March 31, 2000. Current liabilities
at June 30, 2000 were $1,828,725 compared to $1,880,104 at
March 31, 2000.
The Company expended $62,463 in capital expenditures in the
three months ended June 30, 2000. Depreciation and
amortization for the three months ended June 30, 2000 was
$66,720.
The Company entered into an accounts receivable financing
agreement whereby it can borrow up to eighty percent of its
eligible receivables (as defined in the agreement) at an
interest rate of 2 1/2% above the Chase Manhattan Bank's
publicly announced rate (9.0%) at June 30, 2000, with a
maximum of 12% per annum. The agreement had an initial term of
one year and will automatically renew for successive one year
terms, unless terminated by the Company or Lender upon
receiving sixty days prior notice. The loan is secured by the
Company's accounts receivable and inventories. At June 30,
2000 the amount outstanding was $699,523 as compared to
$689,775 at March 31, 2000.
-13-
<PAGE>
IEH CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (continued)
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 8% annum.
The balance remaining at June 30, 2000 was $122,460.
Aggregate future principal payments are as follows:
Fiscal Year Ending March:
2001 $ 40,847
2002 58,405
2003 23,208
----------
$ 122,460
=========
In April 1997, the Company was informed by the UDC that the
loan was sold and conveyed to WAMCO XXIV, Ltd. All of the
terms and conditions of the loan remained in effect.
As of June 30, 2000, 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.
At June 30, 2000, the Company reported tangible net worth of
$569,494. The ratio of current assets to current liabilities
was .95 to 1.0.
The Company has applied for additional waivers of this
covenant. Neither the UDC nor WAMCO XXIV 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 obligations and the loan
plus interest will become due and payable.
EFFECTS OF INFLATION
The Company does not view the effects of inflation to have a
material effect upon its business. Increases in costs of raw
materials and labor costs have been offset by increases in the
price of the Company's products, as well as reductions in
costs of production, reflecting management's efforts in this
area.
While the Company has in the past increased its prices to
customers, it has maintained its relative competitive price
position. However, significant decreases in government,
military subcontractor spending has provided excess production
capacity in the industry which has tightened pricing margins.
-14-
<PAGE>
IEH CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
YEAR 2000 UPDATE
Subject to continued monitoring of third party suppliers, IEH
Corporation's year 2000 program ("Program") is complete, and
no material problems have arisen since the end of calendar
year 1999. The Program addressed the issue of computer
programs and embedded computer chips being unable to
distinguish between the year 1900 and the year 2000. All of
the Company's business computer systems are year 2000 ready.
-15-
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27. Financial Data Schedule
(b) Reports on Form 8-K during Quarter
None
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
has duly cause this report on Form 10QSB to be signed on its behalf by the
undersigned, thereunto duly authorized.
IEH CORPORATION
(Registrant)
August 9, 2000 /s/Michael Offerman
-------------------
Michael Offerman
President
August 9, 2000 /s/Robert Knoth
---------------
Robert Knoth
Chief Financial Officer
