Document_And_Entity_Informatio
Document And Entity Information | 6 Months Ended | |
Mar. 27, 2015 | 6-May-15 | |
Document Information [Line Items] | ||
Entity Registrant Name | IEC ELECTRONICS CORP | |
Entity Central Index Key | 49728 | |
Current Fiscal Year End Date | -21 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | IEC | |
Entity Common Stock, Shares Outstanding | 10,180,308 | |
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 27-Mar-15 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2015 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 27, 2015 | Sep. 30, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash | $792 | $1,980 |
Accounts receivable, net of allowance | 20,790 | 22,347 |
Inventories, net | 27,237 | 22,526 |
Other current assets | 4,048 | 3,597 |
Total current assets | 52,867 | 50,450 |
Fixed assets, net | 17,538 | 17,850 |
Intangible assets, net | 2,265 | 2,392 |
Goodwill | 2,005 | 2,005 |
Other long term assets | 52 | 299 |
Total assets | 74,727 | 72,996 |
Current liabilities: | ||
Current portion of long-term debt | 16,940 | 2,908 |
Accounts payable | 17,633 | 17,732 |
Accrued payroll and related expenses | 2,481 | 3,203 |
Other accrued expenses | 1,826 | 1,008 |
Customer deposits | 3,200 | 1,553 |
Total current liabilities | 42,080 | 26,404 |
Long-term debt | 19,595 | 28,479 |
Other long-term liabilities | 625 | 708 |
Total liabilities | 62,300 | 55,591 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, $0.01 par value: 500,000 shares authorized; none issued or outstanding | 0 | 0 |
Outstanding: 10,199,431 and 10,126,767 shares, respectively | 112 | 111 |
Additional paid-in capital | 45,729 | 44,302 |
Retained earnings/(accumulated deficit) | -31,885 | -25,554 |
Treasury stock, at cost: 1,035,872 and 1,019,804 shares, respectively | -1,529 | -1,454 |
Total stockholders' equity | 12,427 | 17,405 |
Total liabilities and stockholders' equity | $74,727 | $72,996 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $) | Mar. 27, 2015 | Sep. 30, 2014 |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized | 500,000 | 500,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 11,107,115 | 11,006,749 |
Common stock, shares outstanding | 10,090,661 | 9,991,291 |
Treasury stock, shares | 1,016,454 | 1,015,458 |
CONSOLIDATED_INCOME_STATEMENTS
CONSOLIDATED INCOME STATEMENTS (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Mar. 27, 2015 | Mar. 28, 2014 | Mar. 27, 2015 | Mar. 28, 2014 |
Net sales | $32,889 | $34,805 | $63,832 | $66,942 |
Cost of sales | 30,325 | 30,161 | 58,015 | 58,920 |
Gross profit | 2,564 | 4,644 | 5,817 | 8,022 |
Selling and administrative expenses | 6,705 | 3,952 | 10,308 | 7,744 |
Restatement and related expenses | 730 | 1,258 | 640 | 2,414 |
Operating profit/(loss) | -4,871 | -566 | -5,131 | -2,136 |
Interest and financing expense | 665 | 492 | 1,200 | 852 |
Other expense/(income) | 0 | -1 | 0 | 18 |
Income/(loss) before income taxes | -5,536 | -1,057 | -6,331 | -3,006 |
Provision for/(benefit from) income taxes | 0 | 13,657 | 0 | 13,040 |
Net income/(loss) | ($5,536) | ($14,714) | ($6,331) | ($16,046) |
Net income/(loss) per common and common equivalent share: | ||||
Basic (in dollars per share) | ($0.55) | ($1.50) | ($0.63) | ($1.64) |
Diluted (in dollars per share) | ($0.55) | ($1.50) | ($0.63) | ($1.64) |
Weighted average number of common and common equivalent shares outstanding: | ||||
Basic (in shares) | 10,075,719 | 9,829,964 | 9,972,692 | 9,805,841 |
Diluted (in shares) | 10,075,719 | 9,829,964 | 9,972,692 | 9,805,841 |
CONSOLIDATED_STATEMENTS_of_CHA
CONSOLIDATED STATEMENTS of CHANGES in STOCKHOLDERS' EQUITY (USD $) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings (Deficit) [Member] | Treasury Stock [Member] |
In Thousands | |||||
Balances at Sep. 30, 2013 | $31,994 | $110 | $43,802 | ($10,483) | ($1,435) |
Net income/(loss) | -16,046 | 0 | 0 | -16,046 | 0 |
Stock-based compensation | 287 | 0 | 287 | 0 | 0 |
Restricted (non-vested) stock grants, net of forfeitures | 0 | 1 | -1 | 0 | 0 |
Exercise of stock options | 17 | 1 | 21 | 0 | -5 |
Shares withheld for payment of taxes upon vesting of restricted stock | -77 | 0 | -77 | 0 | 0 |
Balances at Mar. 28, 2014 | 16,175 | 112 | 44,032 | -26,529 | -1,440 |
Balances at Sep. 30, 2014 | 17,405 | 111 | 44,302 | -25,554 | 1,454 |
Net income/(loss) | -6,331 | 0 | 0 | -6,331 | 0 |
Stock-based compensation | 1,954 | 0 | 1,954 | 0 | 0 |
Restricted (non-vested) stock grants, net of forfeitures | 0 | 2 | -2 | 0 | 0 |
Exercise of stock options | 3 | 0 | 78 | 0 | -75 |
Shares withheld for payment of taxes upon vesting of restricted stock | -604 | -1 | -603 | 0 | 0 |
Balances at Mar. 27, 2015 | $12,427 | $112 | $45,729 | ($31,885) | ($1,529) |
CONSOLIDATED_STATEMENTS_of_CAS
CONSOLIDATED STATEMENTS of CASH FLOWS (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Mar. 27, 2015 | Mar. 28, 2014 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income/(loss) | ($6,331) | ($16,046) |
Non-cash adjustments: | ||
Stock-based compensation | 1,954 | 287 |
Depreciation and amortization | 2,372 | 2,419 |
Reserve for doubtful accounts | -172 | 433 |
Deferred tax expense/benefit | 0 | 13,034 |
Changes in assets and liabilities: | ||
Accounts receivable | 1,729 | 2,429 |
Inventory | -4,711 | 2,159 |
Other current assets | -1,149 | -514 |
Other long term assets | 242 | -18 |
Accounts payable | -121 | -2,009 |
Accrued expenses | 96 | 242 |
Customer deposits | 1,647 | 251 |
Other long term liabilities | -83 | -9 |
Net cash flows from operating activities | -4,527 | 2,658 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of fixed assets | -1,906 | -3,099 |
Deferred Revenue, Revenue Recognized | 698 | |
Proceeds from (net cost of) disposal of fixed assets | 0 | 323 |
Net cash flows from investing activities | -1,208 | -2,776 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Advances from revolving line of credit | 36,738 | 29,115 |
Repayments of revolving line of credit | -30,137 | -30,650 |
Borrowings under other loan agreements | 0 | 1,300 |
Repayments under other loan agreements | -1,453 | -1,432 |
Debt issuance costs | 0 | -2 |
Proceeds from exercise of stock options | 3 | 17 |
Shares withheld for payment of taxes upon vesting of restricted stock | -604 | -77 |
Net cash flows from financing activities | 4,547 | -1,729 |
Net increase/(decrease) in cash and cash equivalents | -1,188 | -1,847 |
Cash and cash equivalents, beginning of period | 1,980 | 2,499 |
Cash and cash equivalents, end of period | 792 | 652 |
Supplemental cash flow information: | ||
Interest paid | 790 | |
Income taxes paid | 0 | 12 |
Non-cash transactions | ||
Fixed assets purchased with extended payment terms | $22 | $805 |
OUR_BUSINESS_AND_SUMMARY_OF_SI
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended | ||||||||||||
Mar. 27, 2015 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Contingencies Disclosure [Text Block] | ation or what impact the cost of responding to the SEC might have on the Company’s financial position, results of operations, or cash flows. | ||||||||||||
From time to time, the Company may be involved in other legal action in the ordinary course of its business, but management does not believe that any such other proceedings commenced through the date of the financial statements included in this Form 10-Q, individually or in the aggregate, will have material adverse effect on the Company’s consolidated financial position. | |||||||||||||
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Our Business | ||||||||||||
IEC Electronics Corp. ("IEC", "we", "our", “us”, “Company”) is a provider of electronic contract manufacturing services (“EMS”) to companies in various industries that require advanced technology. We specialize in the custom manufacture of high reliability, complex circuit boards and system-level assemblies; a wide array of cable and wire harness assemblies capable of withstanding extreme environments; and precision metal components. | |||||||||||||
Generally Accepted Accounting Principles | |||||||||||||
IEC's financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), as set forth in the Financial Accounting Standards Board's (“FASB”) Accounting Standards Codification (“ASC”). | |||||||||||||
Fiscal Calendar | |||||||||||||
The Company’s fiscal year ends on September 30th, and the first three quarters end generally on the Friday closest to the last day of the calendar quarter. | |||||||||||||
Consolidation | |||||||||||||
The consolidated financial statements include the accounts of IEC and its wholly owned subsidiaries: IEC Electronics Wire and Cable, Inc. (“Wire and Cable”); IEC Electronics Corp-Albuquerque ("Albuquerque"); Dynamic Research and Testing Laboratories, LLC (“DRTL”); and Southern California Braiding, Inc. (“SCB”). The Celmet unit ("Celmet") operates as a division of IEC. All significant intercompany transactions and accounts are eliminated in consolidation. | |||||||||||||
Unaudited Financial Statements | |||||||||||||
The accompanying unaudited financial statements for the six months ended March 27, 2015 and March 28, 2014 have been prepared in accordance with GAAP for interim financial information. In the opinion of management, all adjustments required for a fair presentation of the information have been made. The accompanying financial statements should be read in conjunction with the financial statements and notes included in the Company's Annual Report on Form 10-K/A for the fiscal year ended September 30, 2014. | |||||||||||||
Cash and Cash Equivalents | |||||||||||||
The Company's cash and cash equivalents principally represent deposit accounts with Manufacturers and Traders Trust Company ("M&T Bank" and "M&T"), a banking corporation headquartered in Buffalo, NY. | |||||||||||||
Allowance for Doubtful Accounts | |||||||||||||
The Company establishes an allowance for doubtful accounts receivable based on the age of outstanding invoices and management's evaluation of collectability. Accounts are written off after all reasonable collection efforts have been exhausted and management concludes that likelihood of collection is remote. | |||||||||||||
Inventory Valuation | |||||||||||||
Inventories are stated at the lower of cost or market value under the first-in, first-out method. The Company regularly assesses slow-moving, excess and obsolete inventory and maintains balance sheet reserves in amounts required to reduce the recorded value of inventory to lower of cost or market. | |||||||||||||
Property, Plant and Equipment | |||||||||||||
Property, plant and equipment (“PP&E”) are stated at cost and are depreciated over various estimated useful lives using the straight-line method. Maintenance and repairs are charged to expense as incurred, while renewals and improvements are capitalized. At the time of retirement or other disposition of PP&E, cost and accumulated depreciation are removed from the accounts and any gain or loss is recorded in earnings. | |||||||||||||
Depreciable lives generally used for PP&E are presented in the table below. Leasehold improvements are amortized over the shorter of the lease term or estimated useful life of the improvement. | |||||||||||||
PP&E Lives | Estimated | ||||||||||||
Useful Lives | |||||||||||||
(years) | |||||||||||||
Land improvements | 10 | ||||||||||||
Buildings and improvements | 5 to 40 | ||||||||||||
Machinery and equipment | 3 to 5 | ||||||||||||
Furniture and fixtures | 3 to 7 | ||||||||||||
Intangible Assets | |||||||||||||
Intangible assets (other than goodwill) are those that lack physical substance and are not financial assets. Such assets held by IEC were acquired in connection with business combinations and represent economic benefits associated with acquired customer relationships, a non-compete agreement, and a property tax abatement. Values assigned to individual intangible assets are amortized using the straight-line method over their estimated useful lives. | |||||||||||||
Reviewing Long-Lived Assets for Potential Impairment | |||||||||||||
The Company tests long-lived assets (PP&E and definitive lived assets) for recoverability whenever events or circumstances indicate that the carrying amount of the asset may not be recoverable. If the carrying value of an asset exceeds the undiscounted future cash flows attributable to an asset, it is considered impaired and the excess of carrying value over fair value must be charged to earnings. No impairment charges were recorded by IEC for property, plant and equipment and definitive lived assets during the first six months of fiscal 2015 or fiscal 2014. | |||||||||||||
Goodwill | |||||||||||||
Goodwill represents the excess of cost over fair value of net assets acquired in a business combination. Most of IEC's recorded goodwill relates to SCB acquired in December 2010, and a lesser portion relates to Celmet, which was acquired in July 2010. | |||||||||||||
Goodwill is not amortized but is reviewed for impairment at least annually or when events or circumstances indicate that carrying value may exceed fair value. The Company performs its annual impairment test for SCB goodwill during the third quarter. The Company may elect to precede a quantitative review for impairment with a qualitative assessment of the likelihood that fair value of a particular reporting unit exceeds carrying value. If the qualitative assessment leads to a conclusion that it is more than 50 percent likely that fair value of the reporting units exceeds its carrying value, then no further testing is required. In the event of a less favorable outcome, the Company is required to proceed with quantitative testing. | |||||||||||||
The quantitative process entails comparing the overall fair value of the unit to which goodwill relates to its carrying value. If the fair value of the unit exceeds its carrying value, no further assessment of potential impairment is required. If the fair value of the unit is less than its carrying value, a valuation of the unit's individual assets and liabilities is required to determine whether or not goodwill is impaired. Goodwill impairment losses are charged to earnings. | |||||||||||||
Legal Contingencies | |||||||||||||
When legal proceedings are brought or claims are made against us and the outcome is uncertain, ASC 450-10 (Contingencies) requires that we determine whether it is probable that an asset has been impaired or a liability has been incurred. If such impairment or liability is probable and the amount of loss can be reasonably estimated, the loss must be charged to earnings. | |||||||||||||
When it is considered probable that a loss has been incurred, but the amount of loss cannot be estimated, disclosure but not accrual of the probable loss is required. Disclosure of a loss contingency is also required when it is reasonably possible, but not probable, that a loss has been incurred. | |||||||||||||
Customer Deposits | |||||||||||||
Customer deposits represent amounts invoiced to customers for which the revenue has not yet been earned and therefore represent a commitment for the Company to deliver goods or services in the future. Deposits are generally short term in nature and are recognized as revenue when earned. | |||||||||||||
Grants from Outside Parties | |||||||||||||
Grants from outside parties are recorded as other long-term liabilities and are amortized over the same period during which the associated fixed assets are depreciated. | |||||||||||||
Derivative Financial Instruments | |||||||||||||
The Company actively monitors its exposure to interest rate risk and from time to time uses derivative financial instruments to manage the impact of this risk. The Company uses derivatives only for purposes of managing risk associated with underlying exposures. The Company does not trade or use instruments with the objective of earning financial gains on the interest rate, nor does the Company use derivative instruments where it does not have underlying exposures. The Company manages its hedging position and monitors the credit ratings of counterparties and does not anticipate losses due to counterparty nonperformance. Management believes its use of derivative instruments to manage risk is in the Company’s best interest. However, the Company’s use of derivative financial instruments may result in short-term gains or losses and increased earnings volatility. The Company’s instruments are recorded in the consolidated balance sheets at fair value in other assets or other long-term liabilities. | |||||||||||||
Fair Value Measurements | |||||||||||||
Under ASC 825 (Financial Instruments), the Company is required to disclose the fair value of financial instruments for which it is practicable to estimate value. The Company’s financial instruments consist of cash, accounts receivable, accounts payable, accrued liabilities, borrowings and an interest rate swap agreement. IEC believes that recorded value approximates fair value for all cash, accounts receivable, accounts payable and accrued liabilities. | |||||||||||||
ASC 820 (Fair Value Measurements and Disclosures) defines fair value, establishes a framework for measurement, and prescribes related disclosures. ASC 820 defines fair value as the price that would be received upon sale of an asset or would be paid to transfer a liability in an orderly transaction. Inputs used to measure fair value are categorized under the following hierarchy: | |||||||||||||
Level 1: Quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date. | |||||||||||||
Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations in which all significant inputs are observable market data. | |||||||||||||
Level 3: Model-derived valuations in which one or more significant inputs are unobservable. | |||||||||||||
The Company deems a transfer between levels of the fair value hierarchy to have occurred at the beginning of the reporting period. There were no such transfers during the first six months of fiscal 2015 or fiscal 2014. | |||||||||||||
Revenue Recognition | |||||||||||||
The Company’s revenue is principally derived from the sale of electronic products built to customer specifications, but also from other value-added support services and repair work. Revenue from product sales is recognized when (i) goods are shipped or title and risk of ownership have passed, (ii) the price to the buyer is fixed or determinable, and (iii) realization is reasonably assured. Service revenue is generally recognized once the service has been rendered. For material management arrangements, revenue is generally recognized as services are rendered. Under such arrangements, some or all of the following services may be provided: design, bid, procurement, testing, storage or other activities relating to materials the customer expects to incorporate into products that it manufactures. Value-added support services revenue, including material management and repair work revenue, amounted to less than 5% of total revenue in the first six months of fiscal 2015 or fiscal 2014. | |||||||||||||
Provisions for discounts, allowances, rebates, estimated returns and other adjustments are recorded in the period the related sales are recognized. | |||||||||||||
Stock-Based Compensation | |||||||||||||
ASC 718 (Stock Compensation) requires that compensation expense be recognized for equity awards based on fair value as of the date of grant. For stock options, the Company uses the Black-Scholes pricing model to estimate grant date fair value. Costs associated with stock awards are recorded over requisite service periods, generally the vesting period. If vesting is contingent on the achievement of performance objectives, fair value is accrued over the period the objectives are expected to be achieved only if it is considered probable that the objectives will be achieved. | |||||||||||||
The Company also has an employee stock purchase plan ("ESPP") that provides for a discounted stock purchase price. Compensation expense related to the discount is recognized as employees contribute to the plan. On May 21, 2013, the Compensation Committee of the Company’s Board of Directors suspended operation of the ESPP indefinitely in connection with the Prior Restatement further discussed below (including unavailability of the registration statement covering shares offered under the plan due to the failure of the Company to be current in its filings with the SEC until the Company filed its Form 10-K on December 24, 2013). Operation of the ESPP was resumed effective October 1, 2014. On February 13, 2015, the Compensation Committee of the Company’s Board of Directors suspended operation of the ESPP indefinitely in connection with the 2014 Restatements described in Note 2—Restatement of Deferred Tax Asset Valuation Allowance and Excess and Obsolete Inventory Reserve (including unavailability of the registration statement covering shares offered under the plan due to the failure of the Company to be current in its filings with the SEC). | |||||||||||||
Restatement and Related Expenses | |||||||||||||
The Company restated its consolidated financial statements for the fiscal year ended September 30, 2012, and the interim fiscal quarters and year to date periods within the year ended September 30, 2012, included in the Company’s Annual Report on Form10-K/A and the fiscal quarter ended December 28, 2012, as reported in the Company’s Quarterly Report on Form 10-Q/A for that fiscal quarter (the "Prior Restatement"). The Company also restated its consolidated financial statements for the fiscal year ended September 30, 2014 and its interim financial statements for each quarterly period within the year ended September 30, 2014, included in the Company's Annual Report on Form 10-K/A to correct an error in the valuation allowance on deferred income tax assets as well as an error in the estimate of excess and obsolete inventory reserves (the "2014 Restatements"). The Prior Restatement and the 2014 Restatements together are referred to as the "Restatements". | |||||||||||||
Restatement and related expenses represents third-party expenses arising from the Restatements. These expenses include legal and accounting fees incurred by the Company from external counsel and independent accountants directly attributable to the Restatements as well as other matters arising from the Prior Restatement including those more fully described in Note 17—Litigation. The Company receives insurance reimbursement for certain expenses related to the Prior Restatement which may result in a benefit in a given period. | |||||||||||||
Income Taxes and Deferred Taxes | |||||||||||||
ASC 740 (Income Taxes) requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns, but not in both. Deferred tax assets are also established for tax benefits associated with tax loss and tax credit carryforwards. Such deferred balances reflect tax rates that are scheduled to be in effect, based on currently enacted legislation, in the years the book/tax differences reverse and tax loss and tax credit carryforwards are expected to be realized. An allowance is established for any deferred tax asset for which realization is not likely. | |||||||||||||
ASC 740 also prescribes the manner in which a company measures, recognizes, presents, and discloses in its financial statements uncertain tax positions that the Company has taken or expects to take on a tax return. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the position will be sustained following examination by taxing authorities, based on technical merits of the position. The Company believes that it has no material uncertain tax positions. | |||||||||||||
Any interest or penalties incurred are reported as interest expense. The Company’s income tax filings are subject to audit by various tax jurisdictions and current open years are fiscal 2010 through fiscal 2013. The federal income tax audit for fiscal 2011 concluded in fiscal 2013 and did not have a material impact on the financial statements. | |||||||||||||
Earnings Per Share | |||||||||||||
Basic earnings per common share are calculated by dividing income available to common stockholders by the weighted average number of shares outstanding during each period. Diluted earnings per common share add to the denominator incremental shares resulting from the assumed exercise of all potentially dilutive stock options, as well as restricted (non-vested) stock, and anticipated issuance through the employee stock purchase plan. Options and restricted stock are primarily held by directors, officers and certain employees. A summary of shares used in earnings per share (“EPS”) calculations follows. | |||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||
Shares for EPS Calculation | March 27, | March 28, | March 27, | March 28, | |||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||
Weighted average shares outstanding | 10,075,719 | 9,829,964 | 9,972,692 | 9,805,841 | |||||||||
Incremental shares | — | — | — | — | |||||||||
Diluted shares | 10,075,719 | 9,829,964 | 9,972,692 | 9,805,841 | |||||||||
Anti-dilutive shares excluded | 658,905 | 564,475 | 658,905 | 564,475 | |||||||||
As a result of the net loss for the three and six months ended March 27, 2015 and March 28, 2014, the Company calculated diluted earnings per share using weighted average basic shares outstanding, as using diluted shares would be anti-dilutive to loss per share. | |||||||||||||
Use of Estimates | |||||||||||||
The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses and the disclosure of contingent assets and liabilities. Actual results may differ from management’s estimates. | |||||||||||||
Statements of Cash Flows | |||||||||||||
The Company presents operating cash flows using the indirect method of reporting under which non-cash income and expense items are removed from net income. | |||||||||||||
Recently Issued Accounting Standards | |||||||||||||
FASB ASU 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force),” was issued July 2013 and is effective for fiscal years beginning after December 15, 2013. ASU 2013-11 provides guidance on financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This ASU applies to all entities with unrecognized tax benefits that also have tax loss or tax credit carryforwards in the same tax jurisdiction as of the reporting date. The Company adopted this ASU in the first quarter of fiscal 2015 and there was no impact upon adoption. |
Restatement_of_deferred_Tax_As
Restatement of deferred Tax Asset Valuation Allowance and Obsolete Inventory Reserve | 6 Months Ended | ||||||||||||||||||||||||
Mar. 27, 2015 | |||||||||||||||||||||||||
Accounting Changes and Error Corrections [Abstract] | |||||||||||||||||||||||||
Restatement of deferred Tax Asset Valuation Allowance and Obsolete Inventory Reserve | NOTE 2—RESTATEMENT OF DEFERRED TAX ASSET VALUATION ALLOWANCE AND EXCESS AND OBSOLETE INVENTORY RESERVE | ||||||||||||||||||||||||
The Consolidated Balance Sheet at September 30, 2014 and Consolidated Statements of Income, Changes in Stockholders’ Equity and Cash Flows for the year then ended and the fiscal quarters ended December 27, 2013, March 28, 2014 and June 27, 2014 have been restated. | |||||||||||||||||||||||||
The summary impacts of the restatement adjustments on the Company’s previously reported consolidated net loss for the three and six months ended March 28, 2014 follows: | |||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
March 28, | March 28, | ||||||||||||||||||||||||
2014 | 2014 | ||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||
Net income/(loss) - Previously reported | $ | (569 | ) | $ | (1,669 | ) | |||||||||||||||||||
Deferred tax asset valuation allowance adjustment | (14,019 | ) | (14,019 | ) | |||||||||||||||||||||
Excess and obsolete inventory reserve adjustment | (126 | ) | (358 | ) | |||||||||||||||||||||
Net income/(loss) - Restated | $ | (14,714 | ) | $ | (16,046 | ) | |||||||||||||||||||
The impacts of the restatement adjustments on the Company’s previously reported consolidated income statement for the three and six months ended March 28, 2014 follows: | |||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
28-Mar-14 | 28-Mar-14 | ||||||||||||||||||||||||
As Reported | Adjustment | Restated | As Reported | Adjustment | Restated | ||||||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||||||||||
Cost of sales | $ | 30,035 | $ | 126 | $ | 30,161 | $ | 58,562 | $ | 358 | $ | 58,920 | |||||||||||||
Gross profit | 4,770 | (126 | ) | 4,644 | 8,380 | (358 | ) | 8,022 | |||||||||||||||||
Operating profit /(loss) | (440 | ) | (126 | ) | (566 | ) | (1,778 | ) | (358 | ) | (2,136 | ) | |||||||||||||
Income/(loss) before income | (931 | ) | (126 | ) | (1,057 | ) | (2,648 | ) | (358 | ) | (3,006 | ) | |||||||||||||
taxes | |||||||||||||||||||||||||
Provision for /(benefit from) | (362 | ) | 14,019 | 13,657 | (979 | ) | 14,019 | 13,040 | |||||||||||||||||
income taxes | |||||||||||||||||||||||||
Net income /(loss) | (569 | ) | (14,145 | ) | (14,714 | ) | (1,669 | ) | (14,377 | ) | (16,046 | ) | |||||||||||||
Net income /(loss) per share | $ | (0.06 | ) | $ | (1.44 | ) | $ | (1.50 | ) | $ | (0.17 | ) | $ | (1.47 | ) | $ | (1.64 | ) | |||||||
While closing the first quarter of fiscal 2015, the Company revisited its assessment of realizability of deferred tax assets and identified an error in interpretation of the guidance for the valuation allowance on deferred tax assets. | |||||||||||||||||||||||||
The Company performed a realizability assessment for the fourth quarter of fiscal 2014 and came to the conclusion that there was no additional valuation allowance required on federal deferred tax assets; however, due to a change in New York State tax laws which reduces the State tax rate for qualified manufacturers to 0% for IEC's fiscal year ended September 30, 2015, the valuation allowance was increased by $1.1 million to fully reserve for New York State deferred tax assets. | |||||||||||||||||||||||||
This conclusion regarding federal deferred tax assets at the time of the fourth quarter of fiscal 2014 assessment was based on the Company's evaluation of the negative and positive evidence available at that time. The Company's cumulative loss in recent years was considered; however, the Company determined that the goodwill and intangibles impairment charge taken in the fourth quarter of fiscal 2013 should be excluded when weighing the evidence. Positive evidence included taxable income each year beginning in 2004 through 2013, forecasted results and backlog. At the time of our Original 2014 Form 10-K filing, there was forecasted pre-tax income for fiscal 2015 and earnings growth was forecasted in subsequent years. The Company's Federal net operating losses ("NOLs") do not begin to expire until 2022. As aggregate future taxable income was expected to exceed Federal NOLs, it was concluded that realizability of these was more likely than not. In addition, future taxable income was expected to exceed the amount of Federal NOLs and deferred tax assets expected to reverse in future years combined. As such, there was no additional valuation allowance recorded for federal deferred tax assets. | |||||||||||||||||||||||||
During the process of closing the first quarter of fiscal 2015, the Company revisited its determination regarding the valuation of its deferred tax assets. After consulting applicable accounting guidance and interpretations thereof, the Company determined that the impairment charge should not have been excluded from the cumulative loss calculation. Once a cumulative three year loss is identified, it is very difficult to overcome this negative evidence. IEC does not believe there is enough positive evidence to outweigh the cumulative three year loss. Based on this interpretation, the Company is now recording a full valuation allowance beginning in the second quarter of fiscal 2014, which is when the Company first accumulated a three year loss. As such, an error in the valuation allowance on deferred income tax assets has been identified resulting in an understatement of tax expense and overstatement of deferred tax assets. The Company determined this error was material and required restatement of its consolidated financial statements for fiscal 2014 as well as the second, third and fourth quarters of fiscal 2014. | |||||||||||||||||||||||||
The Company also performed additional analysis related to its excess and obsolete inventory reserves. This analysis identified an error in the Albuquerque and SCB operating locations. The Company discovered that not all pertinent information was factored into the excess and obsolete inventory reserve estimates during fiscal 2014. | |||||||||||||||||||||||||
During fiscal 2014, given the time that has passed since SCB was acquired in December 2010, the Company should have factored in the age of SCB's inventory and its demand when estimating its excess and obsolete inventory reserve. Instead, the Company employed an approach that factored in the usage of the inventory since the SCB acquisition date and estimated a general reserve for remaining inventory. The restated excess and obsolete inventory reserve for SCB is based on an analysis that appropriately incorporates the age of SCB's inventory and its demand and involves the review of specific inventory items with a large extended value. This additional analysis was performed consistently for all items, regardless of whether they were purchased before or after the date the Company acquired SCB. | |||||||||||||||||||||||||
The Albuquerque excess and obsolete inventory reserve as originally reported did not take into consideration facts and circumstances related to certain customer programs. The Company's methodology was applied consistently, however, the rigor around the analysis of excess inventory did not take into account certain customer information that was available at the time. As a result, the Company concluded the inventory on hand for these customer programs was not adequately reserved for. |
ALLOWANCE_FOR_DOUBTFUL_ACCOUNT
ALLOWANCE FOR DOUBTFUL ACCOUNTS | 6 Months Ended | ||||||||
Mar. 27, 2015 | |||||||||
Receivables [Abstract] | |||||||||
ALLOWANCE FOR DOUBTFUL ACCOUNTS | A summary follows of activity in the allowance for doubtful accounts during the six months ended March 27, 2015 and March 28, 2014. | ||||||||
Six Months Ended | |||||||||
Allowance for Doubtful Accounts | March 27, | March 28, | |||||||
2015 | 2014 | ||||||||
(in thousands) | |||||||||
Allowance, beginning of period | $ | 525 | $ | 452 | |||||
Provision for doubtful accounts | (114 | ) | 470 | ||||||
Write-offs | (58 | ) | (37 | ) | |||||
Allowance, end of period | $ | 353 | $ | 885 | |||||
INVENTORIES
INVENTORIES | 6 Months Ended | ||||||||
Mar. 27, 2015 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
INVENTORIES | |||||||||
A summary of inventory by category at period end follows: | |||||||||
Inventories | March 27, | September 30, | |||||||
2015 | 2014 | ||||||||
(in thousands) | (restated) | ||||||||
Raw materials | $ | 19,040 | $ | 16,769 | |||||
Work-in-process | 9,253 | 7,906 | |||||||
Finished goods | 2,535 | 757 | |||||||
Total inventories | 30,828 | 25,432 | |||||||
Reserve for excess/obsolete inventory | (3,591 | ) | (2,906 | ) | |||||
Inventories, net | $ | 27,237 | $ | 22,526 | |||||
The Company has restated its excess and obsolete inventory reserve for the fiscal year ended September 30, 2014 and interim quarterly periods during the fiscal year then ended. The restatement is further discussed in Note 2—Restatement of Deferred Tax Asset Valuation Allowance and Excess and Obsolete Inventory Reserve. |
FIXED_ASSETS
FIXED ASSETS | 6 Months Ended | ||||||||||||||||
Mar. 27, 2015 | |||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||
FIXED ASSETS | |||||||||||||||||
A summary of fixed assets and accumulated depreciation at period end follows: | |||||||||||||||||
Fixed Assets | March 27, | September 30, | |||||||||||||||
2015 | 2014 | ||||||||||||||||
(in thousands) | |||||||||||||||||
Land and improvements | $ | 1,601 | $ | 1,601 | |||||||||||||
Buildings and improvements | 13,558 | 13,452 | |||||||||||||||
Leasehold improvements | 1,487 | 1,458 | |||||||||||||||
Machinery and equipment | 27,988 | 26,996 | |||||||||||||||
Furniture and fixtures | 7,407 | 7,207 | |||||||||||||||
Construction in progress | 982 | 381 | |||||||||||||||
Total fixed assets, at cost | 53,023 | 51,095 | |||||||||||||||
Accumulated depreciation | (35,485 | ) | (33,245 | ) | |||||||||||||
Fixed assets, net | $ | 17,538 | $ | 17,850 | |||||||||||||
Depreciation expense during the three and six months ended March 27, 2015 and March 28, 2014 follows: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
March 27, | March 28, | March 27, | March 28, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
(in thousands) | |||||||||||||||||
Depreciation expense | $ | 1,066 | $ | 1,157 | $ | 2,239 | $ | 2,265 | |||||||||
INTANGIBLE_ASSETS
INTANGIBLE ASSETS | 6 Months Ended | ||||||||||||||||
Mar. 27, 2015 | |||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||
INTANGIBLE ASSETS | |||||||||||||||||
IEC's intangible assets (other than goodwill) were acquired in connection with purchases of SCB in the first quarter of fiscal 2011 and Albuquerque in fiscal 2010. | |||||||||||||||||
Among SCB’s key attributes as an acquisition candidate were the relationships established with a number of military and defense contractors. The anticipated profitability of those relationships was considered by IEC in arriving at an amount to offer for the firm and also became the basis for allocating a portion of the purchase price to a related customer relationship intangible asset. Based upon several key assumptions and a detailed analysis of value, $5.9 million was allocated to this intangible asset. The asset is being amortized over its 15-year estimated useful life, using the straight-line method. | |||||||||||||||||
The Company recorded an impairment of the customer relationship intangible asset of $2.4 million in the fourth quarter of fiscal 2013. There has been no further impairment of SCB customer relationships during the first six months of fiscal 2015 or fiscal 2014. | |||||||||||||||||
In connection with the SCB acquisition, IEC also allocated $100 thousand to an intangible asset representing the estimated value of a five-year, non-compete agreement entered into with SCB’s selling shareholders. This intangible asset is being amortized evenly over its contractual life, and no impairment has been taken for this asset since the SCB acquisition. | |||||||||||||||||
As for Albuquerque, its building and land were acquired subject to an Industrial Revenue Bond (“IRB”) that exempts the property from real estate taxes for the term of the IRB. The tax abatement was valued at $360 thousand at date of acquisition, and such value is being amortized over the 9.2 year exemption period that remained as of the acquisition date. No impairment has been taken for this asset since the Albuquerque acquisition. | |||||||||||||||||
A summary of intangible assets by category and accumulated amortization at period end follows: | |||||||||||||||||
Intangible Assets | March 27, | September 30, | |||||||||||||||
2015 | 2014 | ||||||||||||||||
(in thousands) | |||||||||||||||||
Customer relationships - SCB | $ | 5,900 | $ | 5,900 | |||||||||||||
Property tax abatement - Albuquerque | 360 | 360 | |||||||||||||||
Non-compete agreement - SCB | 100 | 100 | |||||||||||||||
Total intangibles | 6,360 | 6,360 | |||||||||||||||
Accumulated amortization | (1,683 | ) | (1,556 | ) | |||||||||||||
Accumulated impairment - customer relationships | (2,412 | ) | (2,412 | ) | |||||||||||||
Intangible assets, net | $ | 2,265 | $ | 2,392 | |||||||||||||
Amortization expense during the three and six months ended March 27, 2015 and March 28, 2014 follows: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
Amortization Expense | March 27, | March 28, | March 27, | March 28, | |||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
(in thousands) | |||||||||||||||||
Intangible amortization expense | $ | 64 | $ | 64 | $ | 127 | $ | 127 | |||||||||
A summary of amortization expense for the next five years follows: | |||||||||||||||||
Future Amortization | Estimated future amortization | ||||||||||||||||
(in thousands) | |||||||||||||||||
Twelve months ended March, | |||||||||||||||||
2016 | $ | 248 | |||||||||||||||
2017 | 234 | ||||||||||||||||
2018 | 234 | ||||||||||||||||
2019 | 233 | ||||||||||||||||
2020 | 195 | ||||||||||||||||
2021 and thereafter | 1,121 | ||||||||||||||||
GOODWILL
GOODWILL | 6 Months Ended | ||||||||
Mar. 27, 2015 | |||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||
GOODWILL | Goodwill balances resulting from the acquisitions of SCB in the first quarter of fiscal 2011 and Celmet in fiscal 2010 were $13.7 million and $0.1 million, respectively, prior to the impairment described below. | ||||||||
Since its acquisition, SCB has operated as a reporting unit of the Company, primarily in the aerospace & defense (previously disclosed as military & aerospace) market sector. As previously disclosed, due to changing circumstances, the Company determined it was necessary to perform a quantitative assessment which resulted in a goodwill impairment charge of $11.8 million recorded in the fourth quarter of fiscal 2013. | |||||||||
There has been no further impairment of SCB goodwill during the first six months of fiscal 2015 or fiscal 2014. | |||||||||
As for the goodwill from the Celmet acquisition, there has been no impairment since acquisition date. | |||||||||
A summary of the total goodwill and accumulated impairment at period end follows: | |||||||||
Goodwill | March 27, | September 30, | |||||||
2015 | 2014 | ||||||||
(in thousands) | |||||||||
Goodwill | $ | 13,810 | $ | 13,810 | |||||
Accumulated impairment | (11,805 | ) | (11,805 | ) | |||||
Goodwill, net | $ | 2,005 | $ | 2,005 | |||||
CREDIT_FACILITIES
CREDIT FACILITIES | 6 Months Ended | ||||||||||||||||||
Mar. 27, 2015 | |||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||
CREDIT FACILITIES | |||||||||||||||||||
A summary of borrowings at period end follows: | |||||||||||||||||||
Fixed/ | 27-Mar-15 | 30-Sep-14 | |||||||||||||||||
Variable | Interest | Interest | |||||||||||||||||
Debt | Rate | Maturity Date | Balance | Rate (1) | Balance | Rate (1) | |||||||||||||
(in thousands) | |||||||||||||||||||
M&T credit facilities: | |||||||||||||||||||
Revolving Credit Facility | v | 1/18/16 | $ | 14,032 | 4.44 | % | $ | 7,431 | 4.44 | % | |||||||||
Term Loan A | f | 2/1/22 | 7,593 | 3.98 | 8,148 | 3.98 | |||||||||||||
Term Loan B | v | 2/1/23 | 11,083 | 3.42 | 11,783 | 3.41 | |||||||||||||
Albuquerque Mortgage Loan | v | 2/1/18 | 2,600 | 4.69 | 2,733 | 4.69 | |||||||||||||
Celmet Building Term Loan | f | 11/7/18 | 1,127 | 4.72 | 1,192 | 4.72 | |||||||||||||
Other credit facilities: | |||||||||||||||||||
Albuquerque Industrial Revenue Bond | f | 3/1/19 | 100 | 5.63 | 100 | 5.63 | |||||||||||||
Total debt | 36,535 | 31,387 | |||||||||||||||||
Less: current portion | (16,940 | ) | (2,908 | ) | |||||||||||||||
Long-term debt | $ | 19,595 | $ | 28,479 | |||||||||||||||
(1) Rates noted are before impact of interest rate swap. | |||||||||||||||||||
M&T Bank Credit Facilities | |||||||||||||||||||
On January 18, 2013, the Company and M&T Bank entered into the Fourth Amended and Restated Credit Facility Agreement (“2013 Credit Agreement”), replacing a prior agreement dated December 17, 2010 (“2010 Credit Agreement”). Many of the terms, conditions and covenants remained unchanged from the 2010 Credit Agreement. For the variable rate debt, the applicable margin is the interest rate added to Libor and is based on the Debt to EBITDARS Ratio. Borrowings under the 2013 Credit Agreement are secured by, among other things, the assets of IEC and its subsidiaries. | |||||||||||||||||||
Individual debt facilities provided under the 2013 Credit Agreement are described below: | |||||||||||||||||||
a) | Revolving Credit Facility (“Revolver”): Up to $20 million is available through January 18, 2016. The Company may borrow up to the lesser of (i) 85% of eligible receivables plus 35% of eligible inventories or (ii) $20 million. At IEC's election, another 35% of eligible inventories may be included in the borrowing base for limited periods of time during which a higher rate of interest is charged on the Revolver. Borrowings based on inventory balances are further limited to a cap of $3.75 million, or when subject to the higher percentage limit, $4.75 million. At March 27, 2015, the upper limit on Revolver borrowings was $20.0 million. Average available balances amounted to $11.2 million and $10.1 million during the six months ended March 27, 2015 and March 28, 2014, respectively. | ||||||||||||||||||
The Company incurs quarterly unused commitment fees ranging from 0.125% to 0.500% of the excess of $20.0 million over average borrowings under the Revolver. Fees incurred amounted to $30.6 thousand and $25.4 thousand during the six months ended March 27, 2015 and March 28, 2014, respectively. The fee percentage varies based on IEC's ratio of debt to EBITDARS. | |||||||||||||||||||
b) | Term Loan A: $10.0 million was borrowed on January 18, 2013. Principal is being repaid in 108 monthly installments of $93 thousand. | ||||||||||||||||||
c) | Term Loan B: $14.0 million was borrowed on January 18, 2013. Principal is being repaid in 120 monthly installments of $117 thousand. | ||||||||||||||||||
d) | Albuquerque Mortgage Loan: $4.0 million was borrowed on December 16, 2009. The loan is secured by real property in Albuquerque, NM, and principal is being repaid in monthly installments of $22 thousand plus a balloon payment due at maturity. | ||||||||||||||||||
The 2013 Credit Agreement permits an aggregate maximum of $3.5 million of dividends and stock repurchases prior to February 1, 2023 absent default at the time of the applicable payment. | |||||||||||||||||||
On November 8, 2013, the Company obtained an amendment to the 2013 Credit Agreement (the “Celmet Building Amendment”) for the Celmet Building Term Loan for $1.3 million. The proceeds were used to reimburse the Company’s cost of purchasing the Rochester, New York facility. | |||||||||||||||||||
The 2013 Credit Agreement also contains various affirmative and negative covenants including financial covenants. The Company is required to maintain (i) a minimum level of quarterly EBITDARS ("Quarterly EBITDARS") , (ii) a ratio of total debt to twelve month EBITDARS (“Debt to EBITDARS Ratio”) that is below a specified limit, and (iii) a minimum fixed charge coverage ratio (“Fixed Charge Coverage Ratio”) as described in the tables below. | |||||||||||||||||||
On May 15, 2013 we obtained an amendment to the 2013 Credit Agreement (the “First 2013 Amendment”) which modified the Debt to EBITDARS Ratio and Fixed Charge Coverage Ratio covenants, and on August 6, 2013 we obtained a further amendment to the 2013 Credit Agreement (the “Second 2013 Amendment,” and together with the First 2013 Amendment, the “2013 Amendments”) which modified the Debt to EBITDARS Ratio, as shown in the table below. On December 13, 2013 and February 4, 2014 we obtained further amendments to the 2013 Credit Agreement (the “First 2014 Amendment” and “Second 2014 Amendment”, respectively, and together the “2014 Amendments”) which modified the ratios. Covenant Ratios in effect at March 27, 2015 are as follows: | |||||||||||||||||||
Ÿ | Debt to EBITDARS Ratio: (a) | ||||||||||||||||||
2013 Credit Agreement, after Second 2014 Amendment: | |||||||||||||||||||
12/26/2014 through and including 3/26/2015 | < 4.50 to 1.00 | ||||||||||||||||||
3/27/2015 through and including 6/25/2015 | <3.50 to 1.00 | ||||||||||||||||||
6/26/2015 through and including 9/29/2015 | <3.25 to 1.00 | ||||||||||||||||||
09/30/2015 and thereafter | < 2.75 to 1.00 | ||||||||||||||||||
Ÿ | Fixed Charge Coverage Ratio: (b) | ||||||||||||||||||
2013 Credit Agreement, after Second 2014 Amendment: | |||||||||||||||||||
12/26/2014 through and including 3/26/2015 | ≥1.00 to 1.00 | ||||||||||||||||||
03/27/2014 through and including 6/25/2015 | ≥1.15 to 1.00 | ||||||||||||||||||
6/26/2015 and thereafter | ≥1.25 to 1.00 | ||||||||||||||||||
(a) | The ratio of debt to earnings before interest, taxes, depreciation, amortization, rent expense and non-cash stock compensation expense. | ||||||||||||||||||
(b) | The ratio compares (i) 12 month EBITDA plus non-cash stock compensation expense minus unfinanced capital expenditures minus cash taxes paid, to (ii) the sum of interest expense, principal payments, sale-leaseback payments and dividends, if any (fixed charges). | ||||||||||||||||||
The Second 2013 Amendment also amended two definitions used in the calculation of the financial covenants, including: (i) the definition of net income, to add back, through the fiscal quarter ending June 27, 2014, up to $1.1 million of legal and accounting fees associated with the restatement, and (ii) the definition of interest expense as related to Rate Management Transactions (defined in the 2013 Credit Agreement), to be “the net cash cost or benefit associated with Rate Management Transactions net cash benefit or loss”. | |||||||||||||||||||
The Second 2014 Amendment also modified the Quarterly EBITDARS covenant to be equal to or greater than $1.25 million for the fiscal quarter ending March 28, 2014, and $1.5 million for each fiscal quarter thereafter. | |||||||||||||||||||
At March 27, 2015 and December 26, 2014, the Company was not in compliance with the Debt to EBITDARS Ratio, the Quarterly EBITDARS covenant and the Fixed Charge Coverage Ratio. At September 30, 2014 and June 27, 2014, the Company was in compliance with the Quarterly EBITDARS covenant. At March 28, 2014, the Company was not in compliance with the Quarterly EBITDARS covenant. At December 27, 2013, the Company was not in compliance with Quarterly EBITDARS covenant or the Debt to EBITDARS Ratio. The Company obtained waivers from M&T Bank with respect to each instance of noncompliance. As a result of the 2014 Restatements as described in Note 2—Restatement of Deferred Tax Asset Valuation Allowance and Excess and Obsolete Inventory Reserve, the Company was in default of the Credit Agreement for failure to deliver financial statements prepared in accordance with GAAP. The Company received a waiver from M&T regarding this event of default. The First 2014 Amendment did not require measurement of the Fixed Charge Coverage Ratio in the first quarter of fiscal 2014. The Second 2014 Amendment did not require measurement of the Debt to EBITDARS Ratio or the Fixed Charge Coverage Ratio for any quarter during fiscal 2014. | |||||||||||||||||||
The waivers received by the Company for failure to comply with the financial covenants during the first and second quarters of fiscal 2014 did not affect the quarterly calculation of the applicable interest rate margin for the Revolver and Albuquerque Mortgage Loan and the Revolver unused fees. However, the Second 2013 Amendment modified the ranges of applicable margins and unused fees by increasing both the lower and upper limit of each range with respect to the applicable debt facility. The applicable margins are determined based on the Debt to EBITDARS Ratio. Changes to applicable margins and unused fees resulting from the Debt to EBITDARS Ratio generally become effective mid-way through the subsequent quarter. The higher Debt to EBITDARS Ratio calculated as of June 28, 2013, in conjunction with the Second 2013 Amendment resulted in an increase of 0.25% in the effective rate applicable to those two loans and the unused commitment fee for the Revolver remained unchanged. However, the First 2014 Amendment fixed the applicable margin for the Revolver at 4.25%, for the Albuquerque Mortgage Loan at 4.50% and Term Loan B at 3.25% and the unused fee at 0.50%, in each case for the period December 13, 2013 through December 13, 2014 and if the Company was not compliant with financial covenants on December 13, 2014, during the period of non-compliance. The Second 2014 Amendment further fixed the applicable margins at the rates noted in the First 2014 Amendment through March 27, 2015 and if the Company is not compliant with financial covenants on March 27, 2015, during the period of non-compliance. | |||||||||||||||||||
Subsequent to March 27, 2015, the Company obtained an amendment to the 2013 Credit Agreement which modified certain covenants as further discussed in Note 19—Subsequent Events. | |||||||||||||||||||
In connection with the 2013 Credit Agreement, on January 18, 2013, the Company and M&T Bank entered into an interest rate swap arrangement (“Swap Transaction”). The Swap Transaction is for a notional amount of $14.0 million with an effective date of February 1, 2013 and a termination date of February 1, 2023. The Swap Transaction is designed to reduce the variability of future interest payments with respect to Term Loan B by effectively fixing the annual interest rate payable on the loan’s outstanding principal. Pursuant to the swap transaction, the Company’s one month Libor rate is swapped for a fixed rate of 1.32%. When the swap fixed rate is added to the Term Loan B spread of 2.50%, the Company’s interest rate applicable to Term Loan B is effectively fixed at 3.82%. The 2014 Amendments temporarily modified the Term Loan B spread to 3.25% which results in an effectively fixed rate of 4.57%. | |||||||||||||||||||
Other Credit Facilities | |||||||||||||||||||
Albuquerque Industrial Revenue Bond: When IEC acquired Albuquerque, the Company assumed responsibility for a $100 thousand Industrial Revenue Bond issued by the City of Albuquerque. Interest on the bond is paid semiannually, and principal is due in its entirety at maturity. | |||||||||||||||||||
Contractual Principal Payments | |||||||||||||||||||
A summary of contractual principal payments under IEC's borrowings for the next five years taking into consideration the 2013 Credit Agreement follows: | |||||||||||||||||||
Debt Repayment Schedule | Contractual | ||||||||||||||||||
Principal | |||||||||||||||||||
Payments | |||||||||||||||||||
(in thousands) | |||||||||||||||||||
Twelve months ended March 27, | |||||||||||||||||||
2016 (1) | $ | 16,940 | |||||||||||||||||
2017 | 2,908 | ||||||||||||||||||
2018 | 4,708 | ||||||||||||||||||
2018 | 3,348 | ||||||||||||||||||
2020 and thereafter | 8,631 | ||||||||||||||||||
$ | 36,535 | ||||||||||||||||||
(1) Includes Revolver balance of $14.0 million at March 27, 2015 |
DERIVATIVE_FINANCIAL_INSTRUMEN
DERIVATIVE FINANCIAL INSTRUMENTS | 6 Months Ended |
Mar. 27, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
Interest Rate Risk Management | |
In connection with the 2013 Credit Agreement, on January 18, 2013, the Company and M&T Bank entered into an interest rate swap arrangement (“Swap Transaction”). The Swap Transaction is for a notional amount of $14.0 million with an effective date of February 1, 2013 and a termination date of February 1, 2023. The Swap Transaction is designed to reduce the variability of future interest payments with respect to Term Loan B by effectively fixing the annual interest rate payable on outstanding principal of Term Loan B. Pursuant to the interest rate swap, the Company’s one month Libor rate is swapped for a fixed rate of 1.32%. As more fully described in Note 8—Credit Facilities, the applicable margin on Term Loan B is fixed at 3.25% until March 27, 2015. When the swap fixed rate is added to the Term Loan B Spread of 3.25%, the Company’s interest rate applicable to Term Loan B is effectively fixed at 4.57%. | |
The fair value of the interest rate swap agreement represented an asset of $17.2 thousand and $0.2 million at March 27, 2015 and September 30, 2014 and was estimated based on Level 2 inputs. The Company did not designate the swap as a cash flow hedge at inception and therefore, the gains or losses from the changes in fair value of the derivative instrument are recognized in earnings for the period ended March 27, 2015 within interest expense. | |
The fair value of the interest rate swap of $17.2 thousand and $0.2 million is recorded in other long term assets in the Consolidated Balance Sheet at March 27, 2015 and September 30, 2014, respectively. |
FAIR_VALUE_OF_FINANCIAL_INSTRU
FAIR VALUE OF FINANCIAL INSTRUMENTS | 6 Months Ended | ||||||||||||
Mar. 27, 2015 | |||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||||||
Financial Instruments Carried at Fair Value | |||||||||||||
The Company’s interest rate swap agreement is recorded on the balance sheet as either an asset or a liability measured at fair value. The Company estimates the fair value of its interest rate swap agreement based on Level 2 valuation inputs, including fixed interest rates, Libor implied forward interest rates and the remaining time to maturity. At March 27, 2015, the interest rate swap agreement was an asset with a fair value of $17.2 thousand. | |||||||||||||
Financial Instruments Carried at Historical Cost | |||||||||||||
The Company’s long-term debt is not quoted. Fair value was estimated using a discounted cash flow analysis based on Level 2 valuation inputs, including borrowing rates the Company believes are currently available to it for loans with similar terms and maturities. | |||||||||||||
The Company’s debt is carried at historical cost on the balance sheet. A summary of the fair value and carrying value of variable rate debt at period end follows: | |||||||||||||
27-Mar-15 | 30-Sep-14 | ||||||||||||
Fair Value | Carrying Value | Fair Value | Carrying Value | ||||||||||
(in thousands) | |||||||||||||
Term Loan A | 6,608 | 7,593 | 6,924 | 8,148 | |||||||||
Celmet Building Term Loan | 992 | 1,127 | 1,035 | 1,192 | |||||||||
The fair value of the remainder of the Company’s debt approximated carrying value at March 27, 2015 and September 30, 2014 as it is variable rate debt. |
WARRANTY_RESERVES
WARRANTY RESERVES | 6 Months Ended | ||||||||
Mar. 27, 2015 | |||||||||
Product Warranties Disclosures [Abstract] | |||||||||
WARRANTY RESERVES | |||||||||
IEC generally warrants its products and workmanship for up to twelve months from date of sale. As an offset to warranty claims, the Company is sometimes able to obtain reimbursement from suppliers for warranty-related costs or losses. Based on historical warranty claims experience and in consideration of sales trends, a reserve is maintained for estimated future warranty costs to be incurred on products and services sold through the balance sheet date. | |||||||||
A summary of additions to and charges against IEC’s warranty reserves during the period follows: | |||||||||
Six Months Ended | |||||||||
Warranty Reserve | March 27, | March 28, | |||||||
2015 | 2014 | ||||||||
(in thousands) | |||||||||
Reserve, beginning of period | $ | 251 | $ | 219 | |||||
Provision | 204 | 178 | |||||||
Warranty costs | (161 | ) | (131 | ) | |||||
Reserve, end of period | $ | 294 | $ | 266 | |||||
DEFERRED_GRANTS
DEFERRED GRANTS | 6 Months Ended |
Mar. 27, 2015 | |
Deferred Grants [Abstract] | |
DEFERRED GRANTS | |
The Company received grants for certain facility improvements from state and local agencies in which the Company operates. These grants reimburse the Company for a portion of the actual cost or provide in kind services in support of capital projects. Deferred grants of $0.7 million were recorded during the year ended September 30, 2014, from such grant programs. | |
One of the Company’s grants is a loan to grant agreement. The Company has signed a promissory note, which will be forgiven if certain employment targets at the Newark, NY facility are obtained at future dates. If the employment targets are not obtained, the Company is obligated to repay the loan with interest. As the Company intends to comply with these agreements, the Company has recorded the funds received as a deferred amount within other long-term liabilities on the balance sheet. | |
The Company received a government grant for the purchase of equipment upgrades to accommodate existing and anticipated business growth. Required employment targets at the Newark, NY facility for this grant have been met as of September 30, 2014. | |
The Company is also the recipient of matching grants from two local governmental agencies related to certain renovations for one of its operating locations. One agency is contributing in kind services and property of $0.1 million while the other is contributing cash of $0.1 million to match expenditures by the Company of at least the same amount. | |
The grants will be amortized over the useful lives of the related fixed assets when there is reasonable assurance that the Company will meet the employment targets. The Company recorded amortization of $82 thousand and $5 thousand for the deferred grants for the six months ended March 27, 2015 and March 28, 2014, respectively. |
STOCKBASED_COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended | ||||||||||||||
Mar. 27, 2015 | |||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||
STOCK-BASED COMPENSATION | |||||||||||||||
The 2010 Omnibus Incentive Compensation Plan (“2010 Plan”) was approved by the Company’s stockholders at the January 2011 Annual Meeting of the Shareholders. This plan replaced IEC’s 2001 Stock Option and Incentive Plan (“2001 Plan”), which expired in December 2011. The 2010 Plan, which is administered by the Compensation Committee of the Board of Directors, provides for the following types of awards: incentive stock options, nonqualified options, stock appreciation rights, restricted shares, restricted stock units, performance compensation awards, cash incentive awards, director stock and other equity-based and equity-related awards. Awards are generally granted to certain members of management and employees, as well as directors. Under the 2010 Plan, up to 2,000,000 common shares may be issued over a term of ten years. | |||||||||||||||
Stock-based awards granted through December 2011, were made under the 2001 Plan. Awards granted after December 2011, were made under the 2010 Plan and future awards will be made under the 2010 Plan. | |||||||||||||||
Stock-based compensation expense recorded under the plans totaled $2.0 million and $0.3 million for the six months ended March 27, 2015 and March 28, 2014, respectively. On February 2, 2015, the Company announced its shareholders elected all seven Vintage Opportunity Fund, LP-nominated directors to the Company’s Board of Directors. This change in the Company's Board of Directors was a change in control event which triggered automatic vesting for all awards outstanding under the 2010 and 2001 Plans. On the change in control date 390,882 shares of restricted stock and 119,500 stock options vested which resulted in stock-based compensation expense of $1.8 million. | |||||||||||||||
Expenses relating to stock options that comply with certain U.S. income tax rules are neither deductible by the Company nor taxable to the employee. Further information regarding awards granted under the 2001 Plan, 2010 Plan and employee stock purchase plan is provided below. | |||||||||||||||
Stock Options | |||||||||||||||
When options are granted, IEC estimates the fair value of the option using the Black-Scholes option pricing model and recognizes the computed value as compensation cost over the vesting period, which is typically four years. The contractual term of options granted under the 2010 Plan is generally seven years. | |||||||||||||||
Assumptions used in the Black-Scholes model and the estimated value of options granted during the six months ended March 27, 2015 and March 28, 2014 are included in the table below: | |||||||||||||||
Six Months Ended | |||||||||||||||
Valuation of Options | March 27, | March 28, | |||||||||||||
2015 | 2014 | ||||||||||||||
Assumptions for Black-Scholes: | |||||||||||||||
Risk-free interest rate | 1.3 | % | 1.49 | % | |||||||||||
Expected term in years | 4.5 | 4.5 | |||||||||||||
Volatility | 40 | % | 58 | % | |||||||||||
Expected annual dividends | none | none | |||||||||||||
Value of options granted: | |||||||||||||||
Number of options granted | 447,145 | 40,500 | |||||||||||||
Weighted average fair value per share | $ | 1.48 | $ | 1.98 | |||||||||||
Fair value of options granted (000's) | $ | 662 | $ | 80 | |||||||||||
A summary of stock option activity, together with other related data, follows: | |||||||||||||||
Six Months Ended | |||||||||||||||
27-Mar-15 | 28-Mar-14 | ||||||||||||||
Stock Options | Number | Wgtd. Avg. | Number | Wgtd. Avg. | |||||||||||
of Options | Exercise | of Options | Exercise | ||||||||||||
Price | Price | ||||||||||||||
Outstanding, beginning of period | 234,000 | $ | 4.48 | 246,383 | $ | 4.38 | |||||||||
Granted | 447,145 | 4.18 | 40,500 | 4.08 | |||||||||||
Exercised | (25,932 | ) | 1.87 | (14,504 | ) | 1.37 | |||||||||
Shares withheld for payment of exercise | (16,068 | ) | 1.88 | (996 | ) | 1.43 | |||||||||
price upon exercise of stock option | |||||||||||||||
Forfeited | (8,300 | ) | 6.04 | (14,433 | ) | 5.44 | |||||||||
Expired | (7,400 | ) | 6.38 | (350 | ) | 4.71 | |||||||||
Outstanding, end of period | 623,445 | $ | 4.4 | 256,600 | $ | 4.5 | |||||||||
For options expected to vest | |||||||||||||||
Number expected to vest | 467,670 | $ | 4.5 | 232,637 | $ | 4.46 | |||||||||
Weighted average remaining term, in years | 3.2 | 3.6 | |||||||||||||
Intrinsic value (000s) | $ | 37 | $ | 199 | |||||||||||
For exercisable options | |||||||||||||||
Number exercisable | 207,300 | $ | 5 | 123,250 | $ | 3.3 | |||||||||
Weighted average remaining term, in years | 1.5 | 2 | |||||||||||||
Intrinsic value (000s) | $ | 37 | $ | 188 | |||||||||||
For non-exercisable options | |||||||||||||||
Expense not yet recognized (000s) | $ | 600 | $ | 193 | |||||||||||
Weighted average years to be recognized | 4 | 2.7 | |||||||||||||
For options exercised | |||||||||||||||
Intrinsic value (000s) | $ | 119 | $ | 43 | |||||||||||
Changes in the number of non-vested options outstanding, together with other related data, follows: | |||||||||||||||
Six Months Ended | |||||||||||||||
27-Mar-15 | 28-Mar-14 | ||||||||||||||
Stock Options | Number | Wgtd. Avg. | Number | Wgtd. Avg. | |||||||||||
of Options | Grant Date | of Options | Grant Date | ||||||||||||
Fair Value | Fair Value | ||||||||||||||
Non-vested, beginning of period | 112,350 | $ | 2.15 | 138,350 | $ | 2.51 | |||||||||
Granted | 447,145 | 1.48 | 40,500 | 1.98 | |||||||||||
Vested | (135,050 | ) | 2.08 | (31,067 | ) | 2.37 | |||||||||
Forfeited | (8,300 | ) | 2.35 | (14,433 | ) | 5.44 | |||||||||
Non-vested, end of period | 416,145 | $ | 1.45 | 133,350 | $ | 2.3 | |||||||||
Restricted (Non-vested) Stock | |||||||||||||||
Holders of IEC restricted stock have voting and dividend rights as of the date of grant, but until vested the shares may be forfeited and cannot be sold or otherwise transferred. At the end of the vesting period, which is typically four or five years (three years in the case of directors), holders have all the rights and privileges of any other IEC common stockholder. The fair value of a share of restricted stock is its market value on the date of grant, and that value is recognized as stock compensation expense over the vesting period. | |||||||||||||||
A summary of restricted stock activity, together with related data, follows: | |||||||||||||||
Six Months Ended | |||||||||||||||
27-Mar-15 | 28-Mar-14 | ||||||||||||||
Restricted (Non-vested) Stock | Number of | Wgtd. Avg. | Number of | Wgtd. Avg. | |||||||||||
Non-vested | Grant Date | Non-vested | Grant Date | ||||||||||||
Shares | Fair Value | Shares | Fair Value | ||||||||||||
Outstanding, beginning of period | 322,873 | $ | 4.97 | 275,474 | $ | 5.96 | |||||||||
Granted | 163,655 | 5.06 | 155,703 | 4.05 | |||||||||||
Vested | (316,539 | ) | 5.08 | (73,878 | ) | 5.75 | |||||||||
Shares withheld for payment of | (133,329 | ) | 4.53 | (18,208 | ) | 4.28 | |||||||||
taxes upon vesting of restricted stock | |||||||||||||||
Forfeited | (1,200 | ) | 3.91 | (31,216 | ) | 6.55 | |||||||||
Outstanding, end of period | 35,460 | $ | 4.23 | 307,875 | $ | 5.14 | |||||||||
For non-vested shares | |||||||||||||||
Expense not yet recognized (000s) | $ | 163 | $ | 924 | |||||||||||
Weighted average remaining years for vesting | 2 | 3.4 | |||||||||||||
For shares vested | |||||||||||||||
Aggregate fair value on vesting dates (000s) | $ | 2,062 | $ | 388 | |||||||||||
Employee Stock Purchase Plan | |||||||||||||||
The Company administers an employee stock purchase plan (“ESPP”) that provides for a discounted stock purchase price. On May 21, 2013, the Compensation Committee of the Company’s Board of Directors suspended operation of the ESPP indefinitely in connection with the Prior Restatement (including unavailability of the registration statement covering shares offered under the plan due to the failure of the Company to be current in its filings with the SEC until the Company filed its Form 10-K on December 24, 2013). The ESPP was reinstated effective October 1, 2014. On February 13, 2015, the Compensation Committee of the Company’s Board of Directors suspended operation of the ESPP indefinitely in connection with the 2014 Restatements described in Note 2—Restatement of Deferred Tax Asset Valuation Allowance and Excess and Obsolete Inventory Reserve (including unavailability of the registration statement covering shares offered under the plan due to the failure of the Company to be current in its filings with the SEC). | |||||||||||||||
Employees currently receive a 10% discount on stock purchases through the ESPP. Employee contributions to the plan, net of withdrawals were $8.0 thousand for the six months ended March 27, 2015. Compensation expense recognized under the ESPP was $1.0 thousand for the six months ended March 27, 2015. There were no employee contributions or compensation expense recognized under the ESPP during the six months ended March 28, 2014. | |||||||||||||||
Stock Issued to Board Members | |||||||||||||||
In addition to annual grants of restricted stock, included in the table above, Board members may elect to have their meeting fees paid in the form of shares of the Company’s common stock. In connection with the restatement of the Company’s financial statements described herein (including unavailability of the registration statement covering shares offered under the 2010 Plan due to the failure of the Company to be current in its filings with the SEC until the Company filed its Form 10-K on December 24, 2013), the Company determined not to pay, and has not paid, any meeting fees in stock during the period since May 21, 2013. |
RETIREMENT_PLAN
RETIREMENT PLAN | 6 Months Ended |
Mar. 27, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
RETIREMENT PLAN | |
The Company administers a retirement savings plan for the benefit of its eligible employees and their beneficiaries under the provisions of Sections 401(a) and (k) of the Internal Revenue Code. Eligible employees may contribute a portion of their compensation to the plan, and the Company is permitted to make discretionary contributions as determined by the Board of Directors. During the the first six months of fiscal 2015, the Company contributed 25% of the first 6% contributed by all employees at all locations. During the first six months of fiscal 2014, for its Albuquerque operating location only, the Company contributed 25% of the first 6% contributed by employees. Contributions during the six months ended March 27, 2015 and March 28, 2014 totaled $132 thousand and $18 thousand, respectively. |
INCOME_TAXES
INCOME TAXES | 6 Months Ended | ||||||||||||||||
Mar. 27, 2015 | |||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||
INCOME TAXES | |||||||||||||||||
Provision for income taxes during the three and six months ended March 27, 2015 and March 28, 2014 follows: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
Income Tax Provision/Benefit | March 27, | March 28, | March 27, | March 28, | |||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
(in thousands) | (restated) | (restated) | |||||||||||||||
Provision for/(benefit from) income taxes | $ | — | $ | 13,657 | $ | — | $ | 13,040 | |||||||||
The Company restated to record a full valuation allowance on all deferred tax assets during the second quarter of fiscal 2014. The restatement is further discussed in Note 2—Restatement of Deferred Tax Asset Valuation Allowance and Excess and Obsolete Inventory Reserve. | |||||||||||||||||
Although we have recorded a full valuation allowance for all deferred tax assets, including NOL carryforwards ("NOLs"), these NOLs remain available to the Company to offset taxable income and reduce tax payments. IEC has federal NOLs for income tax purposes of approximately $16.3 million at September 30, 2014, expiring mainly in years 2021 through 2025, with a small portion expiring in 2034. | |||||||||||||||||
At September 30, 2014, the Company also had state NOLs of $27.7 million, expiring mainly in years 2021 through 2025 and $1.2 million of New York State investment tax and other credit carryforwards, expiring in various years through 2028. The credits cannot be utilized until the New York NOL is exhausted. Recent New York state corporate tax reform has resulted in the reduction of the business income base rate for qualified manufacturers in New York state to 0% beginning in fiscal 2015 for IEC. As a result of this legislation, it is more likely than not that the New York state NOLs and credits will not be realized. | |||||||||||||||||
Due to the Company's NOLs, a provision for pre-tax income was not recorded in the second quarter of fiscal 2015. |
MARKET_SECTORS_AND_MAJOR_CUSTO
MARKET SECTORS AND MAJOR CUSTOMERS | 6 Months Ended | ||||||||
Mar. 27, 2015 | |||||||||
Risks and Uncertainties [Abstract] | |||||||||
MARKET SECTORS AND MAJOR CUSTOMERS | |||||||||
A summary of sales, according to the market sector within which IEC's customers operate, follows: | |||||||||
Three Months Ended | Six Months Ended | ||||||||
% of Sales by Sector | March 27, | March 28, | March 27, | March 28, | |||||
2015 | 2014 | 2015 | 2014 | ||||||
Aerospace & Defense (previously Military & Aerospace) | 40% | 47% | 42% | 50% | |||||
Medical | 30% | 15% | 29% | 18% | |||||
Industrial | 28% | 30% | 26% | 26% | |||||
Communications & Other | 2% | 8% | 3% | 6% | |||||
100% | 100% | 100% | 100% | ||||||
Three individual customers each represented 10% or more of sales for the six months ended March 27, 2015. One customer in the medical sector represented 14% of sales, one customer in the industrial sector represented 17% of sales and one customer in the aerospace & defense sector represented 10% of sales. Two individual customers represented 10% or more of sales for the six months ended March 28, 2014. One customer in the Industrial sector represented 15% of sales and one customer in the Medical sector represented 10% of sales for the six months ended March 28, 2014. | |||||||||
Two individual customers represented 10% or more of receivables and accounted for 21% of outstanding balances at March 27, 2015. One individual customer represented 10% or more of receivables and accounted for 11% of the outstanding balances at March 28, 2014. | |||||||||
Credit risk associated with individual customers is periodically evaluated by analyzing the entity's financial condition and payment history. Customers generally are not required to post collateral. |
LITIGATION
LITIGATION | 6 Months Ended |
Mar. 27, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
LITIGATION | ation or what impact the cost of responding to the SEC might have on the Company’s financial position, results of operations, or cash flows. |
From time to time, the Company may be involved in other legal action in the ordinary course of its business, but management does not believe that any such other proceedings commenced through the date of the financial statements included in this Form 10-Q, individually or in the aggregate, will have material adverse effect on the Company’s consolidated financial position. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Mar. 27, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | |
Purchase Commitments | |
During August 2011, one of IEC's operating units entered into a five-year agreement with one of its suppliers to purchase a minimum volume of materials in exchange for receiving favorable pricing on the unit's purchases. In the event the unit's cumulative purchases do not equal or exceed stated minimums, the supplier has a right to terminate the agreement and the IEC unit would be obligated to pay an early termination fee that declines from $365 thousand to zero over the term of the agreement. As of the date of this Form 10-Q, the Company expects to exceed the minimum purchase requirements under the agreement, thereby avoiding any termination fee. |
SUBSEQUENT_EVENT_Notes
SUBSEQUENT EVENT (Notes) | 6 Months Ended |
Mar. 27, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | On May 8, 2015, the Company and M&T entered into a Sixth Amendment to the 2013 Credit Agreement, as previously amended (the “Sixth Amendment”). Pursuant to the Sixth Amendment, M&T agreed to (i) modify the financial covenants related to Quarterly EBITDARS, the Debt to EBITDARS Ratio and the Fixed Coverage Charge Ratio and (ii) waive events of default arising from the Company’s non-compliance with these covenants during the fiscal quarters ended December 26, 2014 and March 27, 2015. The Sixth Amendment also amended the definition of EBITDARS under the 2013 Credit Agreement to add back a maximum amount of professional services fees and expenses incurred and paid or to be paid prior to December 25, 2015. EBITDARS as amended and restated means, for the applicable period, earnings before interest, taxes, depreciation, amortization, plus (i) payments due under the M&T sale-leaseback arrangement, (ii) non-cash stock option expense and (iii) professional services fees and expenses incurred and paid or to be paid prior to December 25, 2015, up to a maximum of (a) for the fiscal quarter ended December 26, 2014, , (b) for the fiscal quarter ending March 27, 2015, $2,625,600, (c) for the fiscal quarter ending June 26, 2015, $200,000 plus costs incurred and paid by Borrower during such Fiscal Quarter in connection with mortgages, environmental site assessments, title insurance and appraisals ("Costs") and (d) for the fiscal quarter ending September 30, 2015, $200,000, all on a consolidated basis and determined in accordance with GAAP on a consistent basis. |
Additionally, the Sixth Amendment extended each facility’s applicable interest rate margin established under the Fifth Amendment to the 2013 Credit Agreement, which rates otherwise would have expired on March 27, 2015, through March 26, 2016, and thereafter if the Company is not then in compliance with its financial covenants, as follows, per annum: Revolver (4.25% above Libor), Albuquerque Mortgage Loan (4.50% above Libor) and Term Loan B (3.25% above Libor). The applicable unused line fee of 0.50% also was extended through March 26, 2016, and thereafter if the Company is not in compliance with its financial covenants. |
OUR_BUSINESS_AND_SUMMARY_OF_SI1
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended | ||||||||||||
Mar. 27, 2015 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Our Business | Our Business | ||||||||||||
IEC Electronics Corp. ("IEC", "we", "our", “us”, “Company”) is a provider of electronic contract manufacturing services (“EMS”) to companies in various industries that require advanced technology. We specialize in the custom manufacture of high reliability, complex circuit boards and system-level assemblies; a wide array of cable and wire harness assemblies capable of withstanding extreme environments; and precision metal components. | |||||||||||||
Generally Accepted Accounting Principles | Generally Accepted Accounting Principles | ||||||||||||
IEC's financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), as set forth in the Financial Accounting Standards Board's (“FASB”) Accounting Standards Codification (“ASC”). | |||||||||||||
Fiscal Calendar | Fiscal Calendar | ||||||||||||
The Company’s fiscal year ends on September 30th, and the first three quarters end generally on the Friday closest to the last day of the calendar quarter. | |||||||||||||
Consolidation | Consolidation | ||||||||||||
The consolidated financial statements include the accounts of IEC and its wholly owned subsidiaries: IEC Electronics Wire and Cable, Inc. (“Wire and Cable”); IEC Electronics Corp-Albuquerque ("Albuquerque"); Dynamic Research and Testing Laboratories, LLC (“DRTL”); and Southern California Braiding, Inc. (“SCB”). The Celmet unit ("Celmet") operates as a division of IEC. All significant intercompany transactions and accounts are eliminated in consolidation. | |||||||||||||
Unaudited Financial Statements | Unaudited Financial Statements | ||||||||||||
The accompanying unaudited financial statements for the six months ended March 27, 2015 and March 28, 2014 have been prepared in accordance with GAAP for interim financial information. In the opinion of management, all adjustments required for a fair presentation of the information have been made. The accompanying financial statements should be read in conjunction with the financial statements and notes included in the Company's Annual Report on Form 10-K/A for the fiscal year ended September 30, 2014. | |||||||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||||||||||||
The Company's cash and cash equivalents principally represent deposit accounts with Manufacturers and Traders Trust Company ("M&T Bank" and "M&T"), a banking corporation headquartered in Buffalo, NY. | |||||||||||||
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts | ||||||||||||
The Company establishes an allowance for doubtful accounts receivable based on the age of outstanding invoices and management's evaluation of collectability. Accounts are written off after all reasonable collection efforts have been exhausted and management concludes that likelihood of collection is remote. | |||||||||||||
Inventory Valuation | Inventory Valuation | ||||||||||||
Inventories are stated at the lower of cost or market value under the first-in, first-out method. The Company regularly assesses slow-moving, excess and obsolete inventory and maintains balance sheet reserves in amounts required to reduce the recorded value of inventory to lower of cost or market. | |||||||||||||
Property, Plant and Equipment | Property, Plant and Equipment | ||||||||||||
Property, plant and equipment (“PP&E”) are stated at cost and are depreciated over various estimated useful lives using the straight-line method. Maintenance and repairs are charged to expense as incurred, while renewals and improvements are capitalized. At the time of retirement or other disposition of PP&E, cost and accumulated depreciation are removed from the accounts and any gain or loss is recorded in earnings. | |||||||||||||
Depreciable lives generally used for PP&E are presented in the table below. Leasehold improvements are amortized over the shorter of the lease term or estimated useful life of the improvement. | |||||||||||||
PP&E Lives | Estimated | ||||||||||||
Useful Lives | |||||||||||||
(years) | |||||||||||||
Land improvements | 10 | ||||||||||||
Buildings and improvements | 5 to 40 | ||||||||||||
Machinery and equipment | 3 to 5 | ||||||||||||
Furniture and fixtures | 3 to 7 | ||||||||||||
Intangible Assets | Intangible Assets | ||||||||||||
Intangible assets (other than goodwill) are those that lack physical substance and are not financial assets. Such assets held by IEC were acquired in connection with business combinations and represent economic benefits associated with acquired customer relationships, a non-compete agreement, and a property tax abatement. Values assigned to individual intangible assets are amortized using the straight-line method over their estimated useful lives. | |||||||||||||
Reviewing Long-Lived Assets for Potential Impairment | Reviewing Long-Lived Assets for Potential Impairment | ||||||||||||
The Company tests long-lived assets (PP&E and definitive lived assets) for recoverability whenever events or circumstances indicate that the carrying amount of the asset may not be recoverable. If the carrying value of an asset exceeds the undiscounted future cash flows attributable to an asset, it is considered impaired and the excess of carrying value over fair value must be charged to earnings. No impairment charges were recorded by IEC for property, plant and equipment and definitive lived assets during the first six months of fiscal 2015 or fiscal 2014. | |||||||||||||
Goodwill | Goodwill | ||||||||||||
Goodwill represents the excess of cost over fair value of net assets acquired in a business combination. Most of IEC's recorded goodwill relates to SCB acquired in December 2010, and a lesser portion relates to Celmet, which was acquired in July 2010. | |||||||||||||
Goodwill is not amortized but is reviewed for impairment at least annually or when events or circumstances indicate that carrying value may exceed fair value. The Company performs its annual impairment test for SCB goodwill during the third quarter. The Company may elect to precede a quantitative review for impairment with a qualitative assessment of the likelihood that fair value of a particular reporting unit exceeds carrying value. If the qualitative assessment leads to a conclusion that it is more than 50 percent likely that fair value of the reporting units exceeds its carrying value, then no further testing is required. In the event of a less favorable outcome, the Company is required to proceed with quantitative testing. | |||||||||||||
The quantitative process entails comparing the overall fair value of the unit to which goodwill relates to its carrying value. If the fair value of the unit exceeds its carrying value, no further assessment of potential impairment is required. If the fair value of the unit is less than its carrying value, a valuation of the unit's individual assets and liabilities is required to determine whether or not goodwill is impaired. Goodwill impairment losses are charged to earnings. | |||||||||||||
Leases | |||||||||||||
Legal Contingencies | Legal Contingencies | ||||||||||||
When legal proceedings are brought or claims are made against us and the outcome is uncertain, ASC 450-10 (Contingencies) requires that we determine whether it is probable that an asset has been impaired or a liability has been incurred. If such impairment or liability is probable and the amount of loss can be reasonably estimated, the loss must be charged to earnings. | |||||||||||||
When it is considered probable that a loss has been incurred, but the amount of loss cannot be estimated, disclosure but not accrual of the probable loss is required. Disclosure of a loss contingency is also required when it is reasonably possible, but not probable, that a loss has been incurred. | |||||||||||||
Customer Deposits | Customer Deposits | ||||||||||||
Grants from Outside Parties | Grants from Outside Parties | ||||||||||||
Grants from outside parties are recorded as other long-term liabilities and are amortized over the same period during which the associated fixed assets are depreciated. | |||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments | ||||||||||||
The Company actively monitors its exposure to interest rate risk and from time to time uses derivative financial instruments to manage the impact of this risk. The Company uses derivatives only for purposes of managing risk associated with underlying exposures. The Company does not trade or use instruments with the objective of earning financial gains on the interest rate, nor does the Company use derivative instruments where it does not have underlying exposures. The Company manages its hedging position and monitors the credit ratings of counterparties and does not anticipate losses due to counterparty nonperformance. Management believes its use of derivative instruments to manage risk is in the Company’s best interest. However, the Company’s use of derivative financial instruments may result in short-term gains or losses and increased earnings volatility. The Company’s instruments are recorded in the consolidated balance sheets at fair value in other assets or other long-term liabilities. | |||||||||||||
Fair Value Measurements | Fair Value Measurements | ||||||||||||
Under ASC 825 (Financial Instruments), the Company is required to disclose the fair value of financial instruments for which it is practicable to estimate value. The Company’s financial instruments consist of cash, accounts receivable, accounts payable, accrued liabilities, borrowings and an interest rate swap agreement. IEC believes that recorded value approximates fair value for all cash, accounts receivable, accounts payable and accrued liabilities. | |||||||||||||
ASC 820 (Fair Value Measurements and Disclosures) defines fair value, establishes a framework for measurement, and prescribes related disclosures. ASC 820 defines fair value as the price that would be received upon sale of an asset or would be paid to transfer a liability in an orderly transaction. Inputs used to measure fair value are categorized under the following hierarchy: | |||||||||||||
Level 1: Quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date. | |||||||||||||
Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations in which all significant inputs are observable market data. | |||||||||||||
Level 3: Model-derived valuations in which one or more significant inputs are unobservable. | |||||||||||||
The Company deems a transfer between levels of the fair value hierarchy to have occurred at the beginning of the reporting period. There were no such transfers during the first six months of fiscal 2015 or fiscal 2014. | |||||||||||||
Revenue Recognition | Revenue Recognition | ||||||||||||
The Company’s revenue is principally derived from the sale of electronic products built to customer specifications, but also from other value-added support services and repair work. Revenue from product sales is recognized when (i) goods are shipped or title and risk of ownership have passed, (ii) the price to the buyer is fixed or determinable, and (iii) realization is reasonably assured. Service revenue is generally recognized once the service has been rendered. For material management arrangements, revenue is generally recognized as services are rendered. Under such arrangements, some or all of the following services may be provided: design, bid, procurement, testing, storage or other activities relating to materials the customer expects to incorporate into products that it manufactures. Value-added support services revenue, including material management and repair work revenue, amounted to less than 5% of total revenue in the first six months of fiscal 2015 or fiscal 2014. | |||||||||||||
Provisions for discounts, allowances, rebates, estimated returns and other adjustments are recorded in the period the related sales are recognized. | |||||||||||||
Stock-Based Compensation | Stock-Based Compensation | ||||||||||||
ASC 718 (Stock Compensation) requires that compensation expense be recognized for equity awards based on fair value as of the date of grant. For stock options, the Company uses the Black-Scholes pricing model to estimate grant date fair value. Costs associated with stock awards are recorded over requisite service periods, generally the vesting period. If vesting is contingent on the achievement of performance objectives, fair value is accrued over the period the objectives are expected to be achieved only if it is considered probable that the objectives will be achieved. | |||||||||||||
The Company also has an employee stock purchase plan ("ESPP") that provides for a discounted stock purchase price. Compensation expense related to the discount is recognized as employees contribute to the plan. On May 21, 2013, the Compensation Committee of the Company’s Board of Directors suspended operation of the ESPP indefinitely in connection with the Prior Restatement further discussed below (including unavailability of the registration statement covering shares offered under the plan due to the failure of the Company to be current in its filings with the SEC until the Company filed its Form 10-K on December 24, 2013). | |||||||||||||
Restatement and Related Expenses | Restatement and Related Expenses | ||||||||||||
The Company restated its consolidated financial statements for the fiscal year ended September 30, 2012, and the interim fiscal quarters and year to date periods within the year ended September 30, 2012, included in the Company’s Annual Report on Form10-K/A and the fiscal quarter ended December 28, 2012, as reported in the Company’s Quarterly Report on Form 10-Q/A for that fiscal quarter (the "Prior Restatement"). The Company also restated its consolidated financial statements for the fiscal year ended September 30, 2014 and its interim financial statements for each quarterly period within the year ended September 30, 2014, included in the Company's Annual Report on Form 10-K/A to correct an error in the valuation allowance on deferred income tax assets as well as an error in the estimate of excess and obsolete inventory reserves (the "2014 Restatements"). The Prior Restatement and the 2014 Restatements together are referred to as the "Restatements". | |||||||||||||
Restatement and related expenses represents third-party expenses arising from the Restatements. These expenses include legal and accounting fees incurred by the Company from external counsel and independent accountants directly attributable to the Restatements as well as other matters arising from the Prior Restatement including those more fully described in Note 17—Litigation. | |||||||||||||
Income Taxes and Deferred Taxes | Income Taxes and Deferred Taxes | ||||||||||||
ASC 740 (Income Taxes) requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns, but not in both. Deferred tax assets are also established for tax benefits associated with tax loss and tax credit carryforwards. Such deferred balances reflect tax rates that are scheduled to be in effect, based on currently enacted legislation, in the years the book/tax differences reverse and tax loss and tax credit carryforwards are expected to be realized. An allowance is established for any deferred tax asset for which realization is not likely. | |||||||||||||
ASC 740 also prescribes the manner in which a company measures, recognizes, presents, and discloses in its financial statements uncertain tax positions that the Company has taken or expects to take on a tax return. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the position will be sustained following examination by taxing authorities, based on technical merits of the position. The Company believes that it has no material uncertain tax positions. | |||||||||||||
Any interest or penalties incurred are reported as interest expense. The Company’s income tax filings are subject to audit by various tax jurisdictions and current open years are fiscal 2010 through fiscal 2013. The federal income tax audit for fiscal 2011 concluded in fiscal 2013 and did not have a material impact on the financial statements. | |||||||||||||
Earnings Per Share | Earnings Per Share | ||||||||||||
Basic earnings per common share are calculated by dividing income available to common stockholders by the weighted average number of shares outstanding during each period. Diluted earnings per common share add to the denominator incremental shares resulting from the assumed exercise of all potentially dilutive stock options, as well as restricted (non-vested) stock, and anticipated issuance through the employee stock purchase plan. Options and restricted stock are primarily held by directors, officers and certain employees. A summary of shares used in earnings per share (“EPS”) calculations follows. | |||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||
Shares for EPS Calculation | March 27, | March 28, | March 27, | March 28, | |||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||
Weighted average shares outstanding | 10,075,719 | 9,829,964 | 9,972,692 | 9,805,841 | |||||||||
Incremental shares | — | — | — | — | |||||||||
Diluted shares | 10,075,719 | 9,829,964 | 9,972,692 | 9,805,841 | |||||||||
Anti-dilutive shares excluded | 658,905 | 564,475 | 658,905 | 564,475 | |||||||||
As a result of the net loss for the three and six months ended March 27, 2015 and March 28, 2014, the Company calculated diluted earnings per share using weighted average basic shares outstanding, as using diluted shares would be anti-dilutive to loss per share. | |||||||||||||
Use of Estimates | Use of Estimates | ||||||||||||
The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses and the disclosure of contingent assets and liabilities. Actual results may differ from management’s estimates. | |||||||||||||
Statements of Cash Flows | Statements of Cash Flows | ||||||||||||
The Company presents operating cash flows using the indirect method of reporting under which non-cash income and expense items are removed from net income. | |||||||||||||
Recently Issued Accounting Standards | Recently Issued Accounting Standards | ||||||||||||
FASB ASU 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force),” was issued July 2013 and is effective for fiscal years beginning after December 15, 2013. ASU 2013-11 provides guidance on financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This ASU applies to all entities with unrecognized tax benefits that also have tax loss or tax credit carryforwards in the same tax jurisdiction as of the reporting date. The Company adopted this ASU in the first quarter of fiscal 2015 and there was no impact upon adoption. |
OUR_BUSINESS_AND_SUMMARY_OF_SI2
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended | ||||||||||||
Mar. 27, 2015 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Property, Plant and Equipment | Depreciable lives generally used for PP&E are presented in the table below. Leasehold improvements are amortized over the shorter of the lease term or estimated useful life of the improvement. | ||||||||||||
PP&E Lives | Estimated | ||||||||||||
Useful Lives | |||||||||||||
(years) | |||||||||||||
Land improvements | 10 | ||||||||||||
Buildings and improvements | 5 to 40 | ||||||||||||
Machinery and equipment | 3 to 5 | ||||||||||||
Furniture and fixtures | 3 to 7 | ||||||||||||
Schedule of Weighted Average Number of Shares | A summary of shares used in earnings per share (“EPS”) calculations follows. | ||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||
Shares for EPS Calculation | March 27, | March 28, | March 27, | March 28, | |||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||
Weighted average shares outstanding | 10,075,719 | 9,829,964 | 9,972,692 | 9,805,841 | |||||||||
Incremental shares | — | — | — | — | |||||||||
Diluted shares | 10,075,719 | 9,829,964 | 9,972,692 | 9,805,841 | |||||||||
Anti-dilutive shares excluded | 658,905 | 564,475 | 658,905 | 564,475 | |||||||||
Restatement_of_deferred_Tax_As1
Restatement of deferred Tax Asset Valuation Allowance and Obsolete Inventory Reserve (Tables) | 6 Months Ended | ||||||||||||||||||||||||
Mar. 27, 2015 | |||||||||||||||||||||||||
Accounting Changes and Error Corrections [Abstract] | |||||||||||||||||||||||||
Impact of Restatement of Deferred Tax Asset Valuation and Inventory Reserve | The summary impacts of the restatement adjustments on the Company’s previously reported consolidated net loss for the three and six months ended March 28, 2014 follows: | ||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
March 28, | March 28, | ||||||||||||||||||||||||
2014 | 2014 | ||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||
Net income/(loss) - Previously reported | $ | (569 | ) | $ | (1,669 | ) | |||||||||||||||||||
Deferred tax asset valuation allowance adjustment | (14,019 | ) | (14,019 | ) | |||||||||||||||||||||
Excess and obsolete inventory reserve adjustment | (126 | ) | (358 | ) | |||||||||||||||||||||
Net income/(loss) - Restated | $ | (14,714 | ) | $ | (16,046 | ) | |||||||||||||||||||
The impacts of the restatement adjustments on the Company’s previously reported consolidated income statement for the three and six months ended March 28, 2014 follows: | |||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
28-Mar-14 | 28-Mar-14 | ||||||||||||||||||||||||
As Reported | Adjustment | Restated | As Reported | Adjustment | Restated | ||||||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||||||||||
Cost of sales | $ | 30,035 | $ | 126 | $ | 30,161 | $ | 58,562 | $ | 358 | $ | 58,920 | |||||||||||||
Gross profit | 4,770 | (126 | ) | 4,644 | 8,380 | (358 | ) | 8,022 | |||||||||||||||||
Operating profit /(loss) | (440 | ) | (126 | ) | (566 | ) | (1,778 | ) | (358 | ) | (2,136 | ) | |||||||||||||
Income/(loss) before income | (931 | ) | (126 | ) | (1,057 | ) | (2,648 | ) | (358 | ) | (3,006 | ) | |||||||||||||
taxes | |||||||||||||||||||||||||
Provision for /(benefit from) | (362 | ) | 14,019 | 13,657 | (979 | ) | 14,019 | 13,040 | |||||||||||||||||
income taxes | |||||||||||||||||||||||||
Net income /(loss) | (569 | ) | (14,145 | ) | (14,714 | ) | (1,669 | ) | (14,377 | ) | (16,046 | ) | |||||||||||||
Net income /(loss) per share | $ | (0.06 | ) | $ | (1.44 | ) | $ | (1.50 | ) | $ | (0.17 | ) | $ | (1.47 | ) | $ | (1.64 | ) |
ALLOWANCE_FOR_DOUBTFUL_ACCOUNT1
ALLOWANCE FOR DOUBTFUL ACCOUNTS (Tables) | 6 Months Ended | ||||||||
Mar. 27, 2015 | |||||||||
Receivables [Abstract] | |||||||||
Allowance for Credit Losses on Financing Receivables | A summary follows of activity in the allowance for doubtful accounts during the six months ended March 27, 2015 and March 28, 2014. | ||||||||
Six Months Ended | |||||||||
Allowance for Doubtful Accounts | March 27, | March 28, | |||||||
2015 | 2014 | ||||||||
(in thousands) | |||||||||
Allowance, beginning of period | $ | 525 | $ | 452 | |||||
Provision for doubtful accounts | (114 | ) | 470 | ||||||
Write-offs | (58 | ) | (37 | ) | |||||
Allowance, end of period | $ | 353 | $ | 885 | |||||
INVENTORIES_Tables
INVENTORIES (Tables) | 6 Months Ended | ||||||||
Mar. 27, 2015 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Schedule of Inventory, Current | A summary of inventory by category at period end follows: | ||||||||
Inventories | March 27, | September 30, | |||||||
2015 | 2014 | ||||||||
(in thousands) | (restated) | ||||||||
Raw materials | $ | 19,040 | $ | 16,769 | |||||
Work-in-process | 9,253 | 7,906 | |||||||
Finished goods | 2,535 | 757 | |||||||
Total inventories | 30,828 | 25,432 | |||||||
Reserve for excess/obsolete inventory | (3,591 | ) | (2,906 | ) | |||||
Inventories, net | $ | 27,237 | $ | 22,526 | |||||
FIXED_ASSETS_Tables
FIXED ASSETS (Tables) | 6 Months Ended | ||||||||||||||||
Mar. 27, 2015 | |||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||
Fixed Assets Schedule And Accumulated Depreciation Disclosure | A summary of fixed assets and accumulated depreciation at period end follows: | ||||||||||||||||
Fixed Assets | March 27, | September 30, | |||||||||||||||
2015 | 2014 | ||||||||||||||||
(in thousands) | |||||||||||||||||
Land and improvements | $ | 1,601 | $ | 1,601 | |||||||||||||
Buildings and improvements | 13,558 | 13,452 | |||||||||||||||
Leasehold improvements | 1,487 | 1,458 | |||||||||||||||
Machinery and equipment | 27,988 | 26,996 | |||||||||||||||
Furniture and fixtures | 7,407 | 7,207 | |||||||||||||||
Construction in progress | 982 | 381 | |||||||||||||||
Total fixed assets, at cost | 53,023 | 51,095 | |||||||||||||||
Accumulated depreciation | (35,485 | ) | (33,245 | ) | |||||||||||||
Fixed assets, net | $ | 17,538 | $ | 17,850 | |||||||||||||
Depreciation expense during the three and six months ended March 27, 2015 and March 28, 2014 follows: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
March 27, | March 28, | March 27, | March 28, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
(in thousands) | |||||||||||||||||
Depreciation expense | $ | 1,066 | $ | 1,157 | $ | 2,239 | $ | 2,265 | |||||||||
INTANGIBLE_ASSETS_Tables
INTANGIBLE ASSETS (Tables) | 6 Months Ended | ||||||||||||||||
Mar. 27, 2015 | |||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | A summary of intangible assets by category and accumulated amortization at period end follows: | ||||||||||||||||
Intangible Assets | March 27, | September 30, | |||||||||||||||
2015 | 2014 | ||||||||||||||||
(in thousands) | |||||||||||||||||
Customer relationships - SCB | $ | 5,900 | $ | 5,900 | |||||||||||||
Property tax abatement - Albuquerque | 360 | 360 | |||||||||||||||
Non-compete agreement - SCB | 100 | 100 | |||||||||||||||
Total intangibles | 6,360 | 6,360 | |||||||||||||||
Accumulated amortization | (1,683 | ) | (1,556 | ) | |||||||||||||
Accumulated impairment - customer relationships | (2,412 | ) | (2,412 | ) | |||||||||||||
Intangible assets, net | $ | 2,265 | $ | 2,392 | |||||||||||||
Schedule of Amortization Expense | Amortization expense during the three and six months ended March 27, 2015 and March 28, 2014 follows: | ||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
Amortization Expense | March 27, | March 28, | March 27, | March 28, | |||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
(in thousands) | |||||||||||||||||
Intangible amortization expense | $ | 64 | $ | 64 | $ | 127 | $ | 127 | |||||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | A summary of amortization expense for the next five years follows: | ||||||||||||||||
Future Amortization | Estimated future amortization | ||||||||||||||||
(in thousands) | |||||||||||||||||
Twelve months ended March, | |||||||||||||||||
2016 | $ | 248 | |||||||||||||||
2017 | 234 | ||||||||||||||||
2018 | 234 | ||||||||||||||||
2019 | 233 | ||||||||||||||||
2020 | 195 | ||||||||||||||||
2021 and thereafter | 1,121 | ||||||||||||||||
GOODWILL_Tables
GOODWILL (Tables) | 6 Months Ended | ||||||||
Mar. 27, 2015 | |||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||
Schedule of Goodwill | A summary of the total goodwill and accumulated impairment at period end follows: | ||||||||
Goodwill | March 27, | September 30, | |||||||
2015 | 2014 | ||||||||
(in thousands) | |||||||||
Goodwill | $ | 13,810 | $ | 13,810 | |||||
Accumulated impairment | (11,805 | ) | (11,805 | ) | |||||
Goodwill, net | $ | 2,005 | $ | 2,005 | |||||
CREDIT_FACILITIES_Tables
CREDIT FACILITIES (Tables) | 6 Months Ended | ||||||||||||||||||
Mar. 27, 2015 | |||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||
Schedule of Debt | A summary of borrowings at period end follows: | ||||||||||||||||||
Fixed/ | 27-Mar-15 | 30-Sep-14 | |||||||||||||||||
Variable | Interest | Interest | |||||||||||||||||
Debt | Rate | Maturity Date | Balance | Rate (1) | Balance | Rate (1) | |||||||||||||
(in thousands) | |||||||||||||||||||
M&T credit facilities: | |||||||||||||||||||
Revolving Credit Facility | v | 1/18/16 | $ | 14,032 | 4.44 | % | $ | 7,431 | 4.44 | % | |||||||||
Term Loan A | f | 2/1/22 | 7,593 | 3.98 | 8,148 | 3.98 | |||||||||||||
Term Loan B | v | 2/1/23 | 11,083 | 3.42 | 11,783 | 3.41 | |||||||||||||
Albuquerque Mortgage Loan | v | 2/1/18 | 2,600 | 4.69 | 2,733 | 4.69 | |||||||||||||
Celmet Building Term Loan | f | 11/7/18 | 1,127 | 4.72 | 1,192 | 4.72 | |||||||||||||
Other credit facilities: | |||||||||||||||||||
Albuquerque Industrial Revenue Bond | f | 3/1/19 | 100 | 5.63 | 100 | 5.63 | |||||||||||||
Total debt | 36,535 | 31,387 | |||||||||||||||||
Less: current portion | (16,940 | ) | (2,908 | ) | |||||||||||||||
Long-term debt | $ | 19,595 | $ | 28,479 | |||||||||||||||
(1) Rates noted are before impact of interest rate swap. | |||||||||||||||||||
Schedule of Debt Covenant | On December 13, 2013 and February 4, 2014 we obtained further amendments to the 2013 Credit Agreement (the “First 2014 Amendment” and “Second 2014 Amendment”, respectively, and together the “2014 Amendments”) which modified the ratios. Covenant Ratios in effect at March 27, 2015 are as follows: | ||||||||||||||||||
Ÿ | Debt to EBITDARS Ratio: (a) | ||||||||||||||||||
2013 Credit Agreement, after Second 2014 Amendment: | |||||||||||||||||||
12/26/2014 through and including 3/26/2015 | < 4.50 to 1.00 | ||||||||||||||||||
3/27/2015 through and including 6/25/2015 | <3.50 to 1.00 | ||||||||||||||||||
6/26/2015 through and including 9/29/2015 | <3.25 to 1.00 | ||||||||||||||||||
09/30/2015 and thereafter | < 2.75 to 1.00 | ||||||||||||||||||
Ÿ | Fixed Charge Coverage Ratio: (b) | ||||||||||||||||||
2013 Credit Agreement, after Second 2014 Amendment: | |||||||||||||||||||
12/26/2014 through and including 3/26/2015 | ≥1.00 to 1.00 | ||||||||||||||||||
03/27/2014 through and including 6/25/2015 | ≥1.15 to 1.00 | ||||||||||||||||||
6/26/2015 and thereafter | ≥1.25 to 1.00 | ||||||||||||||||||
(a) | The ratio of debt to earnings before interest, taxes, depreciation, amortization, rent expense and non-cash stock compensation expense. | ||||||||||||||||||
(b) | The ratio compares (i) 12 month EBITDA plus non-cash stock compensation expense minus unfinanced capital expenditures minus cash taxes paid, to (ii) the sum of interest expense, principal payments, sale-leaseback payments and dividends, if any (fixed charges). | ||||||||||||||||||
Schedule of Maturities of Long-term Debt | A summary of contractual principal payments under IEC's borrowings for the next five years taking into consideration the 2013 Credit Agreement follows: | ||||||||||||||||||
Debt Repayment Schedule | Contractual | ||||||||||||||||||
Principal | |||||||||||||||||||
Payments | |||||||||||||||||||
(in thousands) | |||||||||||||||||||
Twelve months ended March 27, | |||||||||||||||||||
2016 (1) | $ | 16,940 | |||||||||||||||||
2017 | 2,908 | ||||||||||||||||||
2018 | 4,708 | ||||||||||||||||||
2018 | 3,348 | ||||||||||||||||||
2020 and thereafter | 8,631 | ||||||||||||||||||
$ | 36,535 | ||||||||||||||||||
(1) Includes Revolver balance of $14.0 million at March 27, 2015 |
FAIR_VALUE_OF_FINANCIAL_INSTRU1
FAIR VALUE OF FINANCIAL INSTRUMENTS FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended | ||||||||||||
Mar. 27, 2015 | |||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||
Schedule of Fair Value Carrying Value of Variable Rate Debt | A summary of the fair value and carrying value of variable rate debt at period end follows: | ||||||||||||
27-Mar-15 | 30-Sep-14 | ||||||||||||
Fair Value | Carrying Value | Fair Value | Carrying Value | ||||||||||
(in thousands) | |||||||||||||
Term Loan A | 6,608 | 7,593 | 6,924 | 8,148 | |||||||||
Celmet Building Term Loan | 992 | 1,127 | 1,035 | 1,192 | |||||||||
WARRANTY_RESERVES_Tables
WARRANTY RESERVES (Tables) | 6 Months Ended | ||||||||
Mar. 27, 2015 | |||||||||
Product Warranties Disclosures [Abstract] | |||||||||
Schedule of Product Warranty Liability | A summary of additions to and charges against IEC’s warranty reserves during the period follows: | ||||||||
Six Months Ended | |||||||||
Warranty Reserve | March 27, | March 28, | |||||||
2015 | 2014 | ||||||||
(in thousands) | |||||||||
Reserve, beginning of period | $ | 251 | $ | 219 | |||||
Provision | 204 | 178 | |||||||
Warranty costs | (161 | ) | (131 | ) | |||||
Reserve, end of period | $ | 294 | $ | 266 | |||||
STOCKBASED_COMPENSATION_Tables
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended | ||||||||||||||
Mar. 27, 2015 | |||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | Assumptions used in the Black-Scholes model and the estimated value of options granted during the six months ended March 27, 2015 and March 28, 2014 are included in the table below: | ||||||||||||||
Six Months Ended | |||||||||||||||
Valuation of Options | March 27, | March 28, | |||||||||||||
2015 | 2014 | ||||||||||||||
Assumptions for Black-Scholes: | |||||||||||||||
Risk-free interest rate | 1.3 | % | 1.49 | % | |||||||||||
Expected term in years | 4.5 | 4.5 | |||||||||||||
Volatility | 40 | % | 58 | % | |||||||||||
Expected annual dividends | none | none | |||||||||||||
Value of options granted: | |||||||||||||||
Number of options granted | 447,145 | 40,500 | |||||||||||||
Weighted average fair value per share | $ | 1.48 | $ | 1.98 | |||||||||||
Fair value of options granted (000's) | $ | 662 | $ | 80 | |||||||||||
Changes in Number of Options Outstanding with Other Related Data | A summary of stock option activity, together with other related data, follows: | ||||||||||||||
Six Months Ended | |||||||||||||||
27-Mar-15 | 28-Mar-14 | ||||||||||||||
Stock Options | Number | Wgtd. Avg. | Number | Wgtd. Avg. | |||||||||||
of Options | Exercise | of Options | Exercise | ||||||||||||
Price | Price | ||||||||||||||
Outstanding, beginning of period | 234,000 | $ | 4.48 | 246,383 | $ | 4.38 | |||||||||
Granted | 447,145 | 4.18 | 40,500 | 4.08 | |||||||||||
Exercised | (25,932 | ) | 1.87 | (14,504 | ) | 1.37 | |||||||||
Shares withheld for payment of exercise | (16,068 | ) | 1.88 | (996 | ) | 1.43 | |||||||||
price upon exercise of stock option | |||||||||||||||
Forfeited | (8,300 | ) | 6.04 | (14,433 | ) | 5.44 | |||||||||
Expired | (7,400 | ) | 6.38 | (350 | ) | 4.71 | |||||||||
Outstanding, end of period | 623,445 | $ | 4.4 | 256,600 | $ | 4.5 | |||||||||
For options expected to vest | |||||||||||||||
Number expected to vest | 467,670 | $ | 4.5 | 232,637 | $ | 4.46 | |||||||||
Weighted average remaining term, in years | 3.2 | 3.6 | |||||||||||||
Intrinsic value (000s) | $ | 37 | $ | 199 | |||||||||||
For exercisable options | |||||||||||||||
Number exercisable | 207,300 | $ | 5 | 123,250 | $ | 3.3 | |||||||||
Weighted average remaining term, in years | 1.5 | 2 | |||||||||||||
Intrinsic value (000s) | $ | 37 | $ | 188 | |||||||||||
For non-exercisable options | |||||||||||||||
Expense not yet recognized (000s) | $ | 600 | $ | 193 | |||||||||||
Weighted average years to be recognized | 4 | 2.7 | |||||||||||||
For options exercised | |||||||||||||||
Intrinsic value (000s) | $ | 119 | $ | 43 | |||||||||||
Schedule of Nonvested Stock Options Activity | Changes in the number of non-vested options outstanding, together with other related data, follows: | ||||||||||||||
Six Months Ended | |||||||||||||||
27-Mar-15 | 28-Mar-14 | ||||||||||||||
Stock Options | Number | Wgtd. Avg. | Number | Wgtd. Avg. | |||||||||||
of Options | Grant Date | of Options | Grant Date | ||||||||||||
Fair Value | Fair Value | ||||||||||||||
Non-vested, beginning of period | 112,350 | $ | 2.15 | 138,350 | $ | 2.51 | |||||||||
Granted | 447,145 | 1.48 | 40,500 | 1.98 | |||||||||||
Vested | (135,050 | ) | 2.08 | (31,067 | ) | 2.37 | |||||||||
Forfeited | (8,300 | ) | 2.35 | (14,433 | ) | 5.44 | |||||||||
Non-vested, end of period | 416,145 | $ | 1.45 | 133,350 | $ | 2.3 | |||||||||
Changes in Number of Restricted Non-vested Stock Outstanding with Other Related Data | A summary of restricted stock activity, together with related data, follows: | ||||||||||||||
Six Months Ended | |||||||||||||||
27-Mar-15 | 28-Mar-14 | ||||||||||||||
Restricted (Non-vested) Stock | Number of | Wgtd. Avg. | Number of | Wgtd. Avg. | |||||||||||
Non-vested | Grant Date | Non-vested | Grant Date | ||||||||||||
Shares | Fair Value | Shares | Fair Value | ||||||||||||
Outstanding, beginning of period | 322,873 | $ | 4.97 | 275,474 | $ | 5.96 | |||||||||
Granted | 163,655 | 5.06 | 155,703 | 4.05 | |||||||||||
Vested | (316,539 | ) | 5.08 | (73,878 | ) | 5.75 | |||||||||
Shares withheld for payment of | (133,329 | ) | 4.53 | (18,208 | ) | 4.28 | |||||||||
taxes upon vesting of restricted stock | |||||||||||||||
Forfeited | (1,200 | ) | 3.91 | (31,216 | ) | 6.55 | |||||||||
Outstanding, end of period | 35,460 | $ | 4.23 | 307,875 | $ | 5.14 | |||||||||
For non-vested shares | |||||||||||||||
Expense not yet recognized (000s) | $ | 163 | $ | 924 | |||||||||||
Weighted average remaining years for vesting | 2 | 3.4 | |||||||||||||
For shares vested | |||||||||||||||
Aggregate fair value on vesting dates (000s) | $ | 2,062 | $ | 388 | |||||||||||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 6 Months Ended | ||||||||||||||||
Mar. 27, 2015 | |||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) | Provision for income taxes during the three and six months ended March 27, 2015 and March 28, 2014 follows: | ||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
Income Tax Provision/Benefit | March 27, | March 28, | March 27, | March 28, | |||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
(in thousands) | (restated) | (restated) | |||||||||||||||
Provision for/(benefit from) income taxes | $ | — | $ | 13,657 | $ | — | $ | 13,040 | |||||||||
MARKET_SECTORS_AND_MAJOR_CUSTO1
MARKET SECTORS AND MAJOR CUSTOMERS (Tables) | 6 Months Ended | ||||||||
Mar. 27, 2015 | |||||||||
Risks and Uncertainties [Abstract] | |||||||||
Schedules of Concentration of Risk, by Risk Factor | A summary of sales, according to the market sector within which IEC's customers operate, follows: | ||||||||
Three Months Ended | Six Months Ended | ||||||||
% of Sales by Sector | March 27, | March 28, | March 27, | March 28, | |||||
2015 | 2014 | 2015 | 2014 | ||||||
Aerospace & Defense (previously Military & Aerospace) | 40% | 47% | 42% | 50% | |||||
Medical | 30% | 15% | 29% | 18% | |||||
Industrial | 28% | 30% | 26% | 26% | |||||
Communications & Other | 2% | 8% | 3% | 6% | |||||
100% | 100% | 100% | 100% | ||||||
OUR_BUSINESS_AND_SUMMARY_OF_SI3
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 6 Months Ended |
Mar. 27, 2015 | |
Land improvements [Member] | |
Estimated Useful Lives | 10 years |
Buildings and improvements [Member] | Minimum [Member] | |
Estimated Useful Lives | 5 years |
Buildings and improvements [Member] | Maximum [Member] | |
Estimated Useful Lives | 40 years |
Machinery and equipment [Member] | Minimum [Member] | |
Estimated Useful Lives | 3 years |
Machinery and equipment [Member] | Maximum [Member] | |
Estimated Useful Lives | 5 years |
Furniture and fixtures [Member] | Minimum [Member] | |
Estimated Useful Lives | 3 years |
Furniture and fixtures [Member] | Maximum [Member] | |
Estimated Useful Lives | 7 years |
OUR_BUSINESS_AND_SUMMARY_OF_SI4
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) | 3 Months Ended | 6 Months Ended | ||
Mar. 27, 2015 | Mar. 28, 2014 | Mar. 27, 2015 | Mar. 28, 2014 | |
Accounting Policies [Abstract] | ||||
Weighted average shares outstanding | 10,075,719 | 9,829,964 | 9,972,692 | 9,805,841 |
Incremental shares | 0 | 0 | 0 | 0 |
Diluted shares | 10,075,719 | 9,829,964 | 9,972,692 | 9,805,841 |
Anti-dilutive shares excluded | 658,905 | 564,475 | 658,905 | 564,475 |
OUR_BUSINESS_AND_SUMMARY_OF_SI5
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Mar. 27, 2015 | Sep. 30, 2013 | |
Goodwill impairment | $11,800,000 | ||
Material Management [Member] | |||
Maximum percentage of total revenue | 5.00% | 5.00% | |
SCB [Member] | |||
Goodwill impairment | 0 |
Impact_of_Restatement_of_defer
Impact of Restatement of deferred Tax Asset Valuation Allowance and Obsolete Inventory Reserve(Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 27, 2015 | Mar. 28, 2014 | Mar. 27, 2015 | Mar. 28, 2014 | Sep. 30, 2014 | Sep. 30, 2015 | |
Cost of sales | $30,325,000 | $30,161,000 | $58,015,000 | $58,920,000 | ||
Gross profit | 2,564,000 | 4,644,000 | 5,817,000 | 8,022,000 | ||
Operating profit /(loss) | -4,871,000 | -566,000 | -5,131,000 | -2,136,000 | ||
Income/(loss) before income taxes | -5,536,000 | -1,057,000 | -6,331,000 | -3,006,000 | ||
Provision for/(benefit from) income taxes | 0 | 13,657,000 | 0 | 13,040,000 | ||
Net Income (Loss) | -5,536,000 | -14,714,000 | -6,331,000 | -16,046,000 | ||
Net income /(loss) per share | ($1,500) | ($1,640) | ||||
Valuation Allowance, Deferred Tax Asset, Change in Amount | 1,100,000 | |||||
Previously Reported | ||||||
Cost of sales | 30,035,000 | 58,562,000 | ||||
Gross profit | 4,770,000 | 8,380,000 | ||||
Operating profit /(loss) | -440,000 | -1,778,000 | ||||
Income/(loss) before income taxes | -931,000 | -2,648,000 | ||||
Provision for/(benefit from) income taxes | -362,000 | -979,000 | ||||
Net Income (Loss) | -569,000 | -1,669,000 | ||||
Net income /(loss) per share | ($60) | ($170) | ||||
Adjustment | ||||||
Cost of sales | 126,000 | 358,000 | ||||
Gross profit | -126,000 | -358,000 | ||||
Operating profit /(loss) | -126,000 | -358,000 | ||||
Income/(loss) before income taxes | -126,000 | -358,000 | ||||
Provision for/(benefit from) income taxes | 14,019,000 | 14,019,000 | ||||
Net Income (Loss) | -14,145,000 | -14,377,000 | ||||
Net income /(loss) per share | ($1,440) | ($1,470) | ||||
Deferred tax asset valuation allowance adjustment | Adjustment | ||||||
Valuation allowances and reserves adjustments | -14,019,000 | -14,019,000 | ||||
Excess and obsolete inventory reserve adjustment | Adjustment | ||||||
Valuation allowances and reserves adjustments | ($126,000) | ($358,000) | ||||
State and Local Jurisdiction [Member] | Scenario, Forecast [Member] | ||||||
Effective Income Tax Rate Reconciliation, Percent | 0.00% |
ALLOWANCE_FOR_DOUBTFUL_ACCOUNT2
ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Mar. 27, 2015 | Mar. 28, 2014 |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Allowance, beginning of period | $525 | $452 |
Provision for doubtful accounts | -114 | 470 |
Write-offs | -58 | -37 |
Allowance, end of period | $353 | $885 |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | Mar. 27, 2015 | Sep. 30, 2014 |
In Thousands, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ||
Raw materials | $19,040 | $16,769 |
Work-in-process | 9,253 | 7,906 |
Finished goods | 2,535 | 757 |
Total inventories | 30,828 | 25,432 |
Reserve for excess/obsolete inventory | -3,591 | -2,906 |
Inventories, net | $27,237 | $22,526 |
FIXED_ASSETS_Details
FIXED ASSETS (Details) (USD $) | Mar. 27, 2015 | Sep. 30, 2014 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Abstract] | ||
Land and improvements | $1,601 | $1,601 |
Buildings and improvements | 13,558 | 13,452 |
Leasehold improvements | 1,487 | 1,458 |
Machinery and equipment | 27,988 | 26,996 |
Furniture and fixtures | 7,407 | 7,207 |
Construction in progress | 982 | 381 |
Total fixed assets, at cost | 53,023 | 51,095 |
Accumulated depreciation | -35,485 | -33,245 |
Fixed assets, net | $17,538 | $17,850 |
FIXED_ASSETS_Details_1
FIXED ASSETS (Details 1) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 27, 2015 | Dec. 28, 2012 | Mar. 27, 2015 | Mar. 28, 2014 |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $1,066 | $1,157 | $2,239 | $2,265 |
INTANGIBLE_ASSETS_Details
INTANGIBLE ASSETS (Details) (USD $) | Mar. 27, 2015 | Sep. 30, 2014 | Dec. 31, 2010 | Sep. 30, 2010 |
In Thousands, unless otherwise specified | ||||
Total intangibles | $6,360 | $6,360 | ||
Accumulated amortization | -1,683 | -1,556 | ||
Accumulated impairment - customer relationships | -2,412 | -2,412 | ||
Intangible assets, net | 2,265 | 2,392 | ||
Customer relationships [Member] | SCB [Member] | ||||
Total intangibles | 5,900 | 5,900 | 5,900 | |
Property tax abatement [Member] | Albuquerque [Member] | ||||
Total intangibles | 360 | 360 | ||
Non-compete agreement [Member] | SCB [Member] | ||||
Total intangibles | $100 | $100 | $100 |
INTANGIBLE_ASSETS_Details_1
INTANGIBLE ASSETS (Details 1) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 27, 2015 | Mar. 28, 2014 | Mar. 27, 2015 | Mar. 28, 2014 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Intangible amortization expense | $64 | $0 | $127 | $0 |
INTANGIBLE_ASSETS_Details_2
INTANGIBLE ASSETS (Details 2) (USD $) | Mar. 27, 2015 |
In Thousands, unless otherwise specified | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2015 | $248 |
2016 | 234 |
2017 | 234 |
2018 | 233 |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 195 |
2021 and thereafter | $1,121 |
INTANGIBLE_ASSETS_Details_Text
INTANGIBLE ASSETS (Details Textual) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 27, 2015 | Sep. 30, 2014 | Dec. 31, 2010 | Sep. 30, 2010 |
Amount allocated to intangibles | $6,360 | $6,360 | ||
Customer relationships [Member] | SCB [Member] | ||||
Amount allocated to intangibles | 5,900 | 5,900 | 5,900 | |
Estimated useful life | 15 years | |||
Non-compete agreement [Member] | SCB [Member] | ||||
Amount allocated to intangibles | 100 | 100 | 100 | |
Estimated useful life | 5 years | |||
Property tax abatement [Member] | Albuquerque [Member] | ||||
Amount allocated to intangibles | $360 | $360 | ||
Estimated useful life | 9 years 2 months 12 days |
GOODWILL_Details
GOODWILL (Details) (USD $) | Mar. 27, 2015 | Sep. 30, 2014 |
In Thousands, unless otherwise specified | ||
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $13,810 | $13,810 |
Accumulated impairment | -11,805 | -11,805 |
Goodwill, net | $2,005 | $2,005 |
GOODWILL_Details_Textual
GOODWILL (Details Textual) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2010 | Mar. 27, 2015 | Sep. 30, 2010 | |
Goodwill impairment | $11,800,000 | |||
SCB [Member] | ||||
Goodwill from acquisitions | 13,700,000 | |||
Goodwill impairment | 0 | |||
Celmet [Member] | ||||
Goodwill from acquisitions | $100,000 |
CREDIT_FACILITIES_Details
CREDIT FACILITIES (Details) (USD $) | 6 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 27, 2015 | Sep. 30, 2014 | ||
Total debt | $36,535 | $31,387 | ||
Less: current portion | -16,940 | -2,908 | ||
Long-term debt | 19,595 | 28,479 | ||
Term Loan A [Member] | ||||
Debt Instrument, Interest Rate Terms | Fixed Interest Rate | |||
Maturity Date | 1-Feb-22 | |||
Interest Rate | 3.98% | [1] | 3.98% | [1] |
Total debt | 7,593 | 8,148 | ||
Term Loan B [Member] | ||||
Debt Instrument, Interest Rate Terms | Variable Interest Rate | |||
Maturity Date | 1-Feb-23 | |||
Interest Rate | 3.42% | [1] | 3.41% | [1] |
Total debt | 11,083 | 11,783 | ||
Albuquerque Mortgage Loan [Member] | ||||
Debt Instrument, Interest Rate Terms | Variable Interest Rate | |||
Maturity Date | 1-Feb-18 | |||
Interest Rate | 4.69% | [1] | 4.69% | [1] |
Total debt | 2,600 | 2,733 | ||
Celmet Building Term Loan [Member] | ||||
Debt Instrument, Interest Rate Terms | Fixed Interest Rate | |||
Maturity Date | 7-Nov-18 | |||
Interest Rate | 4.72% | [1] | 4.72% | [1] |
Total debt | 1,127 | 1,192 | ||
Albuquerque Industrial Revenue Bond [Member] | ||||
Debt Instrument, Interest Rate Terms | Fixed Interest Rate | |||
Maturity Date | 1-Mar-19 | |||
Interest Rate | 5.63% | [1] | 5.63% | [1] |
Total debt | 100 | 100 | ||
Revolving Credit Facility [Member] | ||||
Debt Instrument, Interest Rate Terms | Variable Interest Rate | |||
Maturity Date | 18-Jan-16 | |||
Interest Rate | 4.44% | [1] | 4.44% | [1] |
Total debt | $14,032 | $7,431 | ||
[1] | Rates noted are before impact of interest rate swap. |
CREDIT_FACILITIES_Details_1
CREDIT FACILITIES (Details 1) (2013 Credit Agreement, after Second 2014 Amendment [Member]) | 6 Months Ended | |
Mar. 27, 2015 | ||
Period One [Member] | ||
Debt to EBITDARS Ratio: (a) | ||
Debt to EBITDARS Ratio Period | 12/26/2014 through and including 3/26/2015 | [1] |
Debt to EBITDARS | < 4.50 to 1.00 | [1] |
Fixed Charge Coverage Ratio: (b) | ||
Fixed Charge Coverage Ratio Period | 12/26/2014 through and including 3/26/2015 | [2] |
Fixed Charge Coverage Ratio | b %1.00 to 1.00 | [2] |
Period Two [Member] | ||
Debt to EBITDARS Ratio: (a) | ||
Debt to EBITDARS Ratio Period | 3/27/2015 through and including 6/25/2015 | [1] |
Debt to EBITDARS | [1] | |
Fixed Charge Coverage Ratio: (b) | ||
Fixed Charge Coverage Ratio Period | 03/27/2014 through and including 6/25/2015 | [2] |
Fixed Charge Coverage Ratio | b %1.15 to 1.00 | [2] |
Period Three [Member] | ||
Debt to EBITDARS Ratio: (a) | ||
Debt to EBITDARS Ratio Period | 6/26/2015 through and including 9/29/2015 | [1] |
Debt to EBITDARS | [1] | |
Fixed Charge Coverage Ratio: (b) | ||
Fixed Charge Coverage Ratio Period | 6/26/2015 and thereafter | [2] |
Fixed Charge Coverage Ratio | b %1.25 to 1.00 | [2] |
Period Four [Member] | ||
Debt to EBITDARS Ratio: (a) | ||
Debt to EBITDARS Ratio Period | 09/30/2015 and thereafter | [1] |
Debt to EBITDARS | < 2.75 to 1.00 | [1] |
[1] | The ratio of debt to earnings before interest, taxes, depreciation, amortization, rent expense and non-cash stock compensation expense. | |
[2] | The ratio compares (i) 12 month EBITDA plus non-cash stock compensation expense minus unfinanced capital expenditures minus cash taxes paid, to (ii) the sum of interest expense, principal payments, sale-leaseback payments and dividends, if any (fixed charges). |
CREDIT_FACILITIES_Details_2
CREDIT FACILITIES (Details 2) (USD $) | Mar. 27, 2015 | Sep. 30, 2014 | |
In Thousands, unless otherwise specified | |||
Debt Disclosure [Abstract] | |||
2015 | $16,940 | ||
2016 | 2,908 | [1] | |
2017 | 4,708 | ||
2018 | 3,348 | ||
2020 and thereafter | 8,631 | ||
Total debt | $36,535 | $31,387 | |
[1] | Includes Revolver balance of $14.0 million at MarchB 27, 2015 |
CREDIT_FACILITIES_Details_Text
CREDIT FACILITIES (Details Textual) (USD $) | 6 Months Ended | 3 Months Ended | 12 Months Ended | 6 Months Ended | 1 Months Ended | |||||||
Mar. 27, 2015 | Sep. 30, 2014 | Sep. 30, 2014 | Mar. 28, 2014 | Jan. 31, 2013 | Dec. 31, 2009 | Jan. 18, 2013 | Dec. 16, 2009 | Nov. 08, 2013 | ||||
Maximum borrowing capacity | $20,000,000 | |||||||||||
Average borrowing capacity | 11,200,000 | 10,100,000 | ||||||||||
Maximum legal and accounting fees associated with the restatement | 1,100,000 | |||||||||||
Basis spread on variable rate | 1.32% | |||||||||||
Notional amount | 14,000,000 | |||||||||||
Long-term debt | 36,535,000 | 31,387,000 | 31,387,000 | |||||||||
Amendment 2014 [Member] | ||||||||||||
Net earnings before interest,taxes, depreciation and amortization | 1,250,000 | 1,500,000 | ||||||||||
Second Amendment [Member] | ||||||||||||
Increase in interest rate | 0.25% | |||||||||||
Term Loan A [Member] | Amendment 2014 [Member] | ||||||||||||
Interest rate, stated percentage | 3.25% | |||||||||||
Debt Instrument, Unused Commitment Fee, Percentage | 0.50% | |||||||||||
Term Loan A [Member] | Credit Agreement 2013 [Member] | ||||||||||||
Long-term line of credit | 10,000,000 | |||||||||||
Repayment monthly installments | 108 monthly installments | |||||||||||
Line of credit facility, periodic payment, principal | 93,000 | |||||||||||
Term Loan B [Member] | ||||||||||||
Increase in interest rate | 4.57% | |||||||||||
Basis spread on variable rate | 2.50% | |||||||||||
Interest rate, effective percentage | 3.82% | |||||||||||
Term Loan B [Member] | Credit Agreement 2013 [Member] | ||||||||||||
Long-term line of credit | 14,000,000 | |||||||||||
Repayment monthly installments | 120 monthly installments | |||||||||||
Line of credit facility, periodic payment, principal | 117,000 | |||||||||||
Term Loan B [Member] | Amendment 2014 [Member] | ||||||||||||
Interest rate, effective percentage | 3.25% | |||||||||||
Albuquerque [Member] | ||||||||||||
Liabilities assumed | 100,000 | |||||||||||
Albuquerque Mortgage Loan [Member] | Amendment 2014 [Member] | ||||||||||||
Interest rate, stated percentage | 4.50% | |||||||||||
Albuquerque Mortgage Loan [Member] | Credit Agreement 2013 [Member] | ||||||||||||
Long-term line of credit | 4,000,000 | |||||||||||
Repayment monthly installments | monthly installments | |||||||||||
Debt instrument, periodic payment, principal | 22,000 | |||||||||||
Revolving Credit Facility [Member] | ||||||||||||
Maturity date | 18-Jan-16 | |||||||||||
Current borrowing capacity | 20,000,000 | |||||||||||
Interest rate, stated percentage | 4.44% | [1] | 4.44% | [1] | 4.44% | [1] | ||||||
Long-term debt | 14,032,000 | 7,431,000 | 7,431,000 | |||||||||
Revolving Credit Facility [Member] | Credit Agreement 2013 [Member] | ||||||||||||
Average borrowing capacity | 20,000,000 | |||||||||||
Commitment fee amount | 25,400 | |||||||||||
Revolving Credit Facility [Member] | Amendment 2014 [Member] | ||||||||||||
Interest rate, stated percentage | 4.25% | |||||||||||
Revolving Credit Facility [Member] | Minimum [Member] | ||||||||||||
Unused capacity, commitment fee percentage | 0.13% | |||||||||||
Revolving Credit Facility [Member] | Maximum [Member] | ||||||||||||
Unused capacity, commitment fee percentage | 0.50% | |||||||||||
Celmet Term Loan [Member] | Third Amendment [Member] | ||||||||||||
Face amount | $1,300,000 | |||||||||||
[1] | Rates noted are before impact of interest rate swap. |
DERIVATIVE_FINANCIAL_INSTRUMEN1
DERIVATIVE FINANCIAL INSTRUMENTS (Details Textual) (USD $) | Jan. 18, 2013 | Mar. 27, 2015 | Sep. 30, 2014 | Dec. 13, 2013 |
In Millions, unless otherwise specified | ||||
Notional amount | $14 | |||
Fixed interest rate | 1.32% | |||
Interest Rate Swap [Member] | ||||
Fair value of interest rate swap asset | $0 | $0.20 | ||
Term Loan B [Member] | ||||
Fixed interest rate | 3.25% | |||
Applicable margin rate | 4.57% | 3.25% |
FAIR_VALUE_OF_FINANCIAL_INSTRU2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details Textual) (USD $) | Mar. 27, 2015 | Sep. 30, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, carrying value | $36,535,000 | $31,387,000 |
Term Loan A [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | 6,608,000 | 6,924,000 |
Long-term debt, carrying value | 7,593,000 | 8,148,000 |
Celmet Term Loan [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | 992,000 | 1,035,000 |
Long-term debt, carrying value | 1,127,000 | 1,192,000 |
Interest Rate Swap [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap asset | $0 | $200,000 |
WARRANTY_RESERVES_Details
WARRANTY RESERVES (Details) (Warranty Reserves [Member], USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Mar. 27, 2015 | Mar. 28, 2014 |
Warranty Reserves [Member] | ||
Reserve, beginning of period | $251 | $219 |
Provision | 204 | 178 |
Warranty costs | -161 | -131 |
Reserve, end of period | $294 | $266 |
DEFERRED_GRANTS_Details_Textua
DEFERRED GRANTS (Details Textual) (USD $) | 3 Months Ended | |
Mar. 27, 2015 | Mar. 28, 2014 | |
Amortization of deferred grants | $82,000 | $5,000 |
Local Government Agency One [Member] | ||
Grant proceeds | 100,000 | |
Local Government Agency Two [Member] | ||
Grant proceeds | $100,000 |
STOCKBASED_COMPENSATION_Detail
STOCK-BASED COMPENSATION (Details) (USD $) | 6 Months Ended | |
Mar. 27, 2015 | Mar. 28, 2014 | |
Assumptions for Black-Scholes: | ||
Risk-free interest rate | 1.30% | 1.49% |
Expected term in years | 4 years 6 months 15 days | 4 years 6 months 15 days |
Volatility | 40.00% | 58.00% |
Expected annual dividends | $0 | $0 |
Value of options granted: | ||
Number of options granted (in shares) | 447,145 | 40,500 |
Weighted average fair value per share (in dollars per share) | $1.48 | $1.98 |
Fair value of options granted (000's) | $662,000 | $80,000 |
STOCKBASED_COMPENSATION_Detail1
STOCK-BASED COMPENSATION (Details 1) (USD $) | 6 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 27, 2015 | Mar. 28, 2014 |
Number of Options [Roll Forward] | ||
Outstanding, beginning of period (in shares) | 234,000 | 246,383 |
Granted (in shares) | 447,145 | 40,500 |
Exercised (in shares) | -25,932 | -14,504 |
Shares withheld for payment of taxes upon exercise of stock option (in shares) | -16,068 | -996 |
Forfeited (in shares) | -8,300 | -14,433 |
Expired (in shares) | -7,400 | -350 |
Outstanding, end of period (in shares) | 623,445 | 256,600 |
Wgtd. Avg. Exercise Price [Roll Forward] | ||
Outstanding, beginning of period (in dollars per share) | $4.48 | $4.38 |
Granted (in dollars per share) | $4.18 | $4.08 |
Exercised (in dollars per share) | $1.87 | $1.37 |
Shares withheld for payment of taxes upon exercise of stock option (in dollars per share) | $1.88 | $1.43 |
Forfeited (in dollars per share) | $6.04 | $5.44 |
Expired (in dollars per share) | $6.38 | $4.71 |
Outstanding, end of period (in dollars per share) | $4.40 | $4.50 |
For options expected to vest | ||
Number expected to vest (in shares) | 467,670 | 232,637 |
Number expected to vest (in dollars per share) | $4.50 | $4.46 |
Weighted average remaining term, in years | 3 years 2 months 22 days | 3 years 7 months 6 days |
Intrinsic value (000s) | $37 | $199 |
For exercisable options | ||
Number exercisable (in shares) | 207,300 | 123,250 |
Number exercisable (in dollars per share) | $5 | $3.30 |
Weighted average remaining term, in years | 1 year 6 months 11 days | 2 years |
Intrinsic value (000s) | 37 | 188 |
For non-exercisable options | ||
Expense not yet recognized (000s) | 600 | 193 |
Weighted average years to be recognized | 3 years 11 months 24 days | 2 years 8 months 12 days |
For options exercised, Intrinsic value (000s) | $119 | $43 |
STOCKBASED_COMPENSATION_Detail2
STOCK-BASED COMPENSATION (Details 2) (USD $) | 6 Months Ended | |
Mar. 27, 2015 | Mar. 28, 2014 | |
Number of Options [Roll Forward] | ||
Non-vested, beginning of period (in shares) | 112,350 | 138,350 |
Granted (in shares) | 447,145 | 40,500 |
Vested (in shares) | -135,050 | -31,067 |
Forfeited (in shares) | -8,300 | -14,433 |
Non-vested, end of period (in shares) | 416,145 | 133,350 |
Wgtd. Avg. Grant Date Fair Value [Roll Forward] | ||
Non-vested, beginning of period (in dollars per share) | $2.15 | $2.51 |
Granted (in dollars per share) | $1.48 | $1.98 |
Vested (in dollars per share) | $2.08 | $2.37 |
Forfeited (in dollars per share) | $2.35 | $5.44 |
Non-vested, end of period (in dollars per share) | $1.45 | $2.30 |
STOCKBASED_COMPENSATION_Detail3
STOCK-BASED COMPENSATION (Details 3) (USD $) | 6 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 27, 2015 | Mar. 28, 2014 |
Number of Non-vested Shares [Roll Forward] | ||
Shares withheld for payment of taxes upon vesting of restricted stock (in shares) | -16,068 | -996 |
Wgtd. Avg. Grant Date Fair Value [Roll Forward] | ||
Shares withheld for payment of taxes upon vesting of restricted stock (in dollars per share) | $1.88 | $1.43 |
Restricted (Non-vested) Stock [Member] | ||
Number of Non-vested Shares [Roll Forward] | ||
Outstanding, beginning of period (in shares) | 322,873 | 275,474 |
Granted (in shares) | 163,655 | 155,703 |
Vested (in shares) | -316,539 | -73,878 |
Shares withheld for payment of taxes upon vesting of restricted stock (in shares) | -133,329 | -18,208 |
Forfeited (in shares) | -1,200 | -31,216 |
Outstanding, end of period (in shares) | 35,460 | 307,875 |
Wgtd. Avg. Grant Date Fair Value [Roll Forward] | ||
Outstanding, beginning of period (in dollars per share) | $4.97 | $5.96 |
Granted (in dollars per share) | $5.06 | $4.05 |
Vested (in dollars per share) | $5.08 | $5.75 |
Shares withheld for payment of taxes upon vesting of restricted stock (in dollars per share) | $4.53 | $4.28 |
Forfeited (in dollars per share) | $3.91 | $6.55 |
Outstanding, end of period (in dollars per share) | $4.23 | $5.14 |
For non-vested shares | ||
Expense not yet recognized (000s) | $163 | $924 |
Weighted average remaining years for vesting | 2 years 11 days | 3 years 5 months 1 day |
For shares vested | ||
Aggregate fair value on vesting dates (000s) | $2,062 | $388 |
STOCKBASED_COMPENSATION_Detail4
STOCK-BASED COMPENSATION (Details Textual) (USD $) | 6 Months Ended | |
Mar. 27, 2015 | Mar. 28, 2014 | |
Stock-based compensation | $1,954,000 | $287,000 |
Compensation expense | 1,954,000 | 287,000 |
2010 Plan [Member] | ||
Maximum number of common shares that may be issued | 2,000,000 | |
Common shares, issuance term | 10 years | |
ESPP [Member] | ||
Employee contributions | 8,000 | |
Compensation expense | 0 | 1,000 |
Additional Paid-in Capital [Member] | ||
Stock-based compensation | $1,954,000 | $287,000 |
Director [Member] | ||
Award vesting period | 3 years | |
Vesting One [Member] | ||
Award vesting period | 4 years | |
Vesting Two [Member] | ||
Award vesting period | 5 years |
RETIREMENT_PLAN_Details_Textua
RETIREMENT PLAN (Details Textual) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Mar. 27, 2015 | Mar. 28, 2014 |
Compensation and Retirement Disclosure [Abstract] | ||
Contributions by employer, percentage | 6.00% | 6.00% |
Defined Contribution Plan, Employer Matching Contribution, Percent of Match | 25.00% | 25.00% |
Contributions by employer | $132 | $18 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 27, 2015 | Mar. 28, 2014 | Mar. 27, 2015 | Mar. 28, 2014 |
Income Tax Disclosure [Abstract] | ||||
Benefit from income taxes | $0 | $13,657 | $0 | $13,040 |
INCOME_TAXES_Details_Textual
INCOME TAXES (Details Textual) (USD $) | Mar. 27, 2015 | Sep. 30, 2013 | Sep. 30, 2014 |
In Millions, unless otherwise specified | |||
Business Income Base Rate, Tax, Percentage | 0.00% | ||
Investment Tax Credit Carryforward [Member] | |||
Operating loss carryforwards | $1.20 | ||
Domestic Tax Authority [Member] | |||
Operating loss carryforwards | 16.3 | ||
State and Local Jurisdiction [Member] | |||
Operating loss carryforwards | $27.70 |
MARKET_SECTORS_AND_MAJOR_CUSTO2
MARKET SECTORS AND MAJOR CUSTOMERS (Details) (Sales Revenue, Segment [Member]) | 3 Months Ended | 6 Months Ended | ||
Mar. 27, 2015 | Mar. 28, 2014 | Mar. 27, 2015 | Mar. 28, 2014 | |
% of Sales by Sector | 100.00% | 100.00% | 100.00% | 100.00% |
Aerospace & Defense [Member] | ||||
% of Sales by Sector | 40.00% | 47.00% | 42.00% | 50.00% |
Medical [Member] | ||||
% of Sales by Sector | 30.00% | 15.00% | 29.00% | 18.00% |
Industrial [Member] | ||||
% of Sales by Sector | 28.00% | 30.00% | 26.00% | 26.00% |
Communications & Other [Member] | ||||
% of Sales by Sector | 2.00% | 8.00% | 3.00% | 6.00% |
MARKET_SECTORS_AND_MAJOR_CUSTO3
MARKET SECTORS AND MAJOR CUSTOMERS (Details Textual) | 6 Months Ended | |
Mar. 27, 2015 | Mar. 28, 2014 | |
customer | customer | |
Concentration risk, number of customers | 3 | |
Customer Concentration Risk [Member] | Sales [Member] | Industrial [Member] | ||
Concentration risk, number of customers | 1 | 1 |
Concentration risk, percentage | 17.00% | 15.00% |
Customer Concentration Risk [Member] | Sales [Member] | Aerospace & Defense [Member] | ||
Concentration risk, number of customers | 1 | |
Concentration risk, percentage | 10.00% | |
Customer Concentration Risk [Member] | Sales [Member] | Medical [Member] | ||
Concentration risk, number of customers | 1 | |
Concentration risk, percentage | 14.00% | |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | ||
Concentration risk, number of customers | 2 | 1 |
Concentration risk, percentage | 21.00% | 11.00% |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details Textual) (USD $) | 1 Months Ended |
In Thousands, unless otherwise specified | Aug. 31, 2011 |
Long-term purchase commitment, period | 5 years |
Maximum [Member] | |
Early termination fee | 365 |
Minimum [Member] | |
Early termination fee | 0 |
Uncategorized_Items
Uncategorized Items | 12/28/2013 - 3/28/2014 | 12/27/2014 - 3/27/2015 |
USD ($) | USD ($) | |
[us-gaap_DeferredRevenueRevenueRecognized] | 0 | |
[us-gaap_InterestPaid] | 769,000 |