Aero/Def Slowdown Lowers IEC's Q3 Output
NEWARK, NY -- IEC Electronics today said fiscal third quarter net income fell 94% to $22,000 on lower revenue to key end-markets and new program starts that ate into profits.
For its fiscal quarter ended June 27, the EMS firm reported revenue of $33 million, down 6.25% from a year ago. The company reported restatement and related expenses of $102,000 during the period, versus $1.1 million in the third quarter last year.
In announcing the results, chairman and CEO W. Barry Gilbert said, "Our revenue for the quarter was lower than the same period last year. Overall, we've continued to have success adding new customers and adding new programs for existing customers, the majority of which we anticipate will be accretive to the Company and will provide long-term value. But in our business, the timeframe from signing a contract to production can be quite lengthy and that dynamic impacted our performance this quarter.
"Our medical customer has been released from FDA hold. They have delayed shipments as they work their way through an internal quality program. We expect the shipment hold to be lifted during our fiscal fourth quarter, with shipments to this customer returning to previous levels over time. We have several recent medical customers with programs that are slowly ramping, despite some initial delays on their end which have made it challenging to forecast when we will go to full production. These are excellent programs that we expect to be accretive to the company in fiscal 2015, however in the short run, these programs cost the company money.
The firm saw lower industrial sales from a year ago, and continues to forecast flat or negative results for the sector through its fiscal year. Aerospace and Defense, approximately half of IEC's revenue, was lower as well on program postponements.
