NEWARK, NY -- IEC Electronics today reported fiscal first quarter revenues of $21 million, down 36.3% from a year ago, on lower demand from two key customers.

For the period ended Dec. 30, the net loss was $900,000, compared to net income of $1.5 million last year. Gross profit margin was 8.6%, down from 17.7% in the same quarter last year. IEC reduced debt, net of cash, by $7.2 million in the quarter, which includes the pay down of debt from the proceeds of the sale-leaseback transaction for the company's Albuquerque facility, previously disclosed in the fourth quarter of fiscal 2016.

"As we expected and previously announced, our first quarter revenues and profitability were negatively impacted by reduced volume from two key customers," said Jeffrey T. Schlarbaum, president and CEO of IEC. "The softness is not the result of lost programs and these customers are long-term partners who we believe remain committed to working with IEC. We expect this revenue decrease will persist through the second quarter of fiscal 2017, but we are optimistic that volume should ramp up in the second half of fiscal 2017, enabling us to exit fiscal 2017 similar to the levels achieved in fiscal 2016.

"We took proactive steps early in the first quarter to better align our cost structure at our Newark, NY, facility while retaining the key skilled labor and expertise to support the expected volume increase in the second half of fiscal 2017. The revenue contraction and related margin decrease was isolated to our Newark facility, while our other facilities achieved solid gross profit performance. We believe that we are well positioned to return to our industry leading margins and profitability as volume returns.

"At this phase of the turnaround, a key strategic focus is re-establishing organic growth by broadening and improving the quality of our new business pipeline. To that end, we have made changes to our sales infrastructure to extend our reach in core markets and better qualify customers who are best suited to our capabilities and expertise. The sales cycle is long in our industry, but we have seen encouraging initial success from these efforts, with backlog up from our fiscal year-end and an improved pipeline.

"Our continued debt reduction and ongoing focus on managing our assets more efficiently continues to strengthen the balance sheet, providing a solid platform supporting our initiatives to win new customers and programs. We are making steady progress with our turnaround efforts."

• Prev
• Next