Cover Page
Cover Page - shares | 6 Months Ended | |
Mar. 27, 2020 | May 01, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 27, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-34376 | |
Entity Registrant Name | IEC ELECTRONICS CORP. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 13-3458955 | |
Entity Address, Address Line One | 105 Norton Street | |
Entity Address, City or Town | Newark | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 14513 | |
City Area Code | 315 | |
Local Phone Number | 331-7742 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | IEC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 10,478,992 | |
Entity Central Index Key | 0000049728 | |
Current Fiscal Year End Date | --09-30 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2020 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands | Mar. 27, 2020 | Sep. 30, 2019 |
Current assets: | ||
Cash | $ 0 | $ 0 |
Accounts receivable, net of allowance | 26,539 | 27,618 |
Unbilled contract revenue | 10,601 | 9,529 |
Inventories | 45,053 | 44,267 |
Federal income tax receivable | 1,034 | 517 |
Other current assets | 1,721 | 1,454 |
Total current assets | 84,948 | 83,385 |
Property, plant and equipment, net | 19,232 | 19,433 |
Deferred income taxes | 5,953 | 7,154 |
Operating Lease and Finance Lease, Right-of-Use Asset | 275 | 0 |
Operating lease liabilities, current | 59 | 0 |
Other long-term assets | 976 | 860 |
Total assets | 111,384 | 110,832 |
Current liabilities: | ||
Current portion of long-term debt | 1,371 | 1,371 |
Current portion of capital lease obligation | 419 | 338 |
Current portion of capital lease obligation | 20,688 | 23,690 |
Accounts payable | 1,486 | 3,174 |
Accrued payroll and related expenses | 485 | 668 |
Customer deposits | 15,802 | 13,229 |
Total current liabilities | 40,310 | 42,470 |
Long-term debt | 28,182 | 28,910 |
Long-term capital lease obligation | 6,837 | 6,685 |
Operating lease liabilities, non-current | 215 | 0 |
Other long-term liabilities | 1,465 | 1,527 |
Total liabilities | 77,009 | 79,592 |
STOCKHOLDERS’ EQUITY | ||
Preferred stock, $0.01 par value: 500,000 shares authorized; none issued or outstanding | 0 | 0 |
Common stock, $0.01 par value: Authorized: 50,000,000 shares; Issued: 11,372,111 and 11,330,151 shares, respectively; Outstanding: 10,316,623 and 10,274,663 shares, respectively | 103 | 103 |
Additional paid-in capital | 48,424 | 48,001 |
Accumulated deficit | (12,563) | (15,275) |
Treasury stock, at cost: 1,055,488 shares | (1,589) | (1,589) |
Total stockholders’ equity | 34,375 | 31,240 |
Total liabilities and stockholders’ equity | $ 111,384 | $ 110,832 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] - $ / shares | Mar. 27, 2020 | Sep. 30, 2018 |
Statement of Financial Position [Abstract] | ||
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 | 11,447,604 | 11,394,036 |
Common stock, shares outstanding | 10,392,116 | 10,338,548 |
Treasury stock, shares | 1,055,488 | 1,055,488 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 27, 2020 | Mar. 29, 2019 | Mar. 27, 2020 | Mar. 29, 2019 | |
Income Statement [Abstract] | ||||
Net sales | $ 44,171 | $ 37,294 | $ 88,905 | $ 72,735 |
Cost of sales | 38,668 | 32,708 | 78,163 | 63,090 |
Gross profit | 5,503 | 4,586 | 10,742 | 9,645 |
Selling and administrative expenses | 3,217 | 3,328 | 6,516 | 6,680 |
Operating income | 2,286 | 1,258 | 4,226 | 2,965 |
Interest and financing expense | 396 | 385 | 811 | 708 |
Income before income taxes | 1,890 | 873 | 3,415 | 2,257 |
Income tax expense | 367 | 203 | 703 | 515 |
Net Income (Loss) Attributable to Parent, Diluted | 670 | 2,712 | 1,742 | |
Net income/(loss) | $ 1,523 | $ 670 | $ 2,712 | $ 1,742 |
Weighted average number of shares outstanding: | ||||
Basic (in shares) | 10,393,461 | 10,286,876 | 10,379,846 | 10,274,772 |
Diluted (in shares) | 10,703,112 | 10,678,058 | 10,666,001 | 10,574,076 |
Basic net income (loss) per share (in usd per share) | $ 0.15 | $ 0.06 | $ 0.26 | $ 0.17 |
Diluted net income (loss) per share (in usd per share) | $ 0.14 | $ 0.06 | $ 0.25 | $ 0.16 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS of CHANGES in STOCKHOLDERS' EQUITY (unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Treasury Stock, at cost |
Beginning balance (shares) at Sep. 30, 2018 | 10,338,548 | 10,248,905 | |||
Beginning Balance at Sep. 30, 2018 | $ 25,376 | $ 102 | $ 47,326 | $ (20,463) | $ (1,589) |
Net income | 1,072 | 1,072 | |||
Stock-based compensation | 146 | 146 | |||
Restricted stock vested, net of shares withheld for payment of taxes (shares) | 4,439 | ||||
Restricted stock vested, net of shares withheld for payment of taxes | 0 | $ 0 | 0 | ||
Exercise of stock options, net of shares surrendered (shares) | 2,553 | ||||
Exercise of stock options, net of shares surrendered | 0 | ||||
Employee stock plan purchases (shares) | 5,674 | ||||
Exercise of stock options, net of shares surrendered | 20 | 20 | |||
Ending Balance at Dec. 28, 2018 | $ 27,055 | $ 102 | 47,492 | (18,950) | (1,589) |
Ending balance (shares) at Dec. 28, 2018 | 10,261,571 | ||||
Beginning balance (shares) at Sep. 30, 2018 | 10,338,548 | 10,248,905 | |||
Beginning Balance at Sep. 30, 2018 | $ 25,376 | $ 102 | 47,326 | (20,463) | (1,589) |
Net income | $ 1,742 | ||||
Exercise of stock options, net of shares surrendered (shares) | 26,500 | ||||
Ending Balance at Mar. 29, 2019 | $ 27,929 | $ 103 | 47,695 | (18,280) | (1,589) |
Ending balance (shares) at Mar. 29, 2019 | 10,311,763 | ||||
Beginning balance (shares) at Dec. 28, 2018 | 10,261,571 | ||||
Beginning Balance at Dec. 28, 2018 | 27,055 | $ 102 | 47,492 | (18,950) | (1,589) |
Net income | 670 | 670 | |||
Stock-based compensation | 152 | 152 | |||
Restricted stock vested, net of shares withheld for payment of taxes (shares) | 38,538 | ||||
Restricted stock vested, net of shares withheld for payment of taxes | 1 | $ 1 | |||
Exercise of stock options, net of shares surrendered (shares) | 11,654 | ||||
Exercise of stock options, net of shares surrendered | 51 | 51 | |||
Ending Balance at Mar. 29, 2019 | 27,929 | $ 103 | 47,695 | (18,280) | (1,589) |
Ending balance (shares) at Mar. 29, 2019 | 10,311,763 | ||||
Beginning balance (shares) at Sep. 30, 2019 | 10,338,548 | ||||
Beginning Balance at Sep. 30, 2019 | 31,240 | $ 103 | 48,001 | (15,275) | (1,589) |
Net income | 1,189 | 1,189 | |||
Stock-based compensation | 152 | 152 | |||
Restricted stock vested, net of shares withheld for payment of taxes (shares) | 6,367 | ||||
Restricted stock vested, net of shares withheld for payment of taxes | (24) | (24) | |||
Exercise of stock options, net of shares surrendered (shares) | 24,000 | ||||
Exercise of stock options, net of shares surrendered | 130 | 130 | |||
Employee stock plan purchases (shares) | 6,449 | ||||
Exercise of stock options, net of shares surrendered | 40 | 40 | |||
Ending Balance at Dec. 27, 2019 | 32,727 | $ 103 | 48,299 | (14,086) | (1,589) |
Ending balance (shares) at Dec. 27, 2019 | 10,375,364 | ||||
Beginning balance (shares) at Sep. 30, 2019 | 10,338,548 | ||||
Beginning Balance at Sep. 30, 2019 | 31,240 | $ 103 | 48,001 | (15,275) | (1,589) |
Net income | $ 2,712 | ||||
Exercise of stock options, net of shares surrendered (shares) | 26,000 | ||||
Ending Balance at Mar. 27, 2020 | $ 34,375 | $ 103 | 48,424 | (12,563) | (1,589) |
Ending balance (shares) at Mar. 27, 2020 | 10,392,116 | 10,392,116 | |||
Beginning balance (shares) at Dec. 27, 2019 | 10,375,364 | ||||
Beginning Balance at Dec. 27, 2019 | $ 32,727 | $ 103 | 48,299 | (14,086) | (1,589) |
Net income | 1,523 | 1,523 | |||
Stock-based compensation | 185 | 185 | |||
Restricted stock vested, net of shares withheld for payment of taxes (shares) | 4,663 | ||||
Restricted stock vested, net of shares withheld for payment of taxes | (33) | (33) | |||
Restricted stock units vested, net of shares withheld for payment of taxes (shares) | 10,089 | ||||
Restricted stock units vested, net of shares withheld for payment of taxes | (35) | (35) | |||
Exercise of stock options, net of shares surrendered (shares) | 2,000 | ||||
Exercise of stock options, net of shares surrendered | 8 | 8 | |||
Ending Balance at Mar. 27, 2020 | $ 34,375 | $ 103 | $ 48,424 | $ (12,563) | $ (1,589) |
Ending balance (shares) at Mar. 27, 2020 | 10,392,116 | 10,392,116 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS of CASH FLOWS (unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 27, 2020 | Mar. 29, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 2,712 | $ 1,742 |
Non-cash adjustments: | ||
Stock-based compensation | 337 | 298 |
Depreciation expense | 1,587 | 1,290 |
Change in reserve for doubtful accounts | 48 | (39) |
Inventory Write-down | 1,296 | 89 |
Increase (Decrease) in Deferred Income Taxes | 1,201 | 511 |
Amortization of Deferred Charges | (57) | (56) |
Increase (Decrease) in Operating Capital [Abstract] | ||
Accounts receivable | 1,031 | (2,615) |
Unbilled contract revenue | (1,072) | (1,710) |
Inventories | (2,055) | (8,547) |
Federal income tax receivable | (517) | 0 |
Other current assets | (267) | (53) |
Other long-term assets | (116) | (253) |
Accounts payable | (2,771) | (1,362) |
Change in book overdraft position | (231) | (922) |
Accrued expenses | (1,898) | 220 |
Customer deposits | 2,573 | 2,631 |
Net change in lease right-of-use assets and liabilities | (1) | 0 |
Other long-term liabilities | 0 | (75) |
Net cash flows provided by/(used in) operating activities | 1,800 | (8,851) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property, plant and equipment | (1,351) | (805) |
Net cash flows used in investing activities | (1,351) | (805) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Advances from revolving credit facility | 36,680 | 39,307 |
Repayments of revolving credit facility | (36,763) | (29,388) |
Borrowings under other loan agreements | 0 | 391 |
Repayments under other loan agreements | (685) | (568) |
Payments under finance lease | (182) | (152) |
Proceeds received from lease financing obligation | 415 | 0 |
Payments of Debt Issuance Costs | 0 | (6) |
Proceeds from exercise of stock options | 138 | 52 |
Proceeds from employee stock plan purchases | 40 | 20 |
Cash paid for taxes upon vesting of restricted stock | (92) | 0 |
Net cash flows (used in)/provided by financing activities | (449) | 9,656 |
Net cash change for the period | 0 | 0 |
Cash, end of period | 0 | 0 |
Cash, beginning of period | 0 | 0 |
Supplemental Cash Flow Information [Abstract] | ||
Interest paid | 779 | 753 |
Income taxes paid | $ 20 | $ 0 |
REVENUE RECOGNITION
REVENUE RECOGNITION | 6 Months Ended |
Mar. 27, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | NOTE 2—REVENUE RECOGNITION ASC 606: Revenue from Contracts with Customers Satisfaction of Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC 606. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Many of the Company's contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct. The Company primarily provides contract manufacturing services to its customers. The customer provides a design, the Company procures materials and manufactures to that design and ships the product to the customer. Revenue is derived primarily from the manufacturing of these electronics components that are built to customer specifications. The Company's performance obligations are satisfied at a point in time or over time as work progresses. Revenue from goods and services transferred to customers at a point in time accounted for 47.4% and 49.9% of the Company's revenue for the three and six months ended March 27, 2020, respectively. Revenue from goods and services transferred to customers at a point in time accounted for 52.4% and 50.0% of the Company's revenue for the three and six months ended March 29, 2019, respectively. Revenue on these contracts is recognized when obligations under the terms of the customer contract are satisfied; generally this occurs with the transfer of control upon shipment. If there is no enforceable right to payment for work completed to date, or the Company does not recapture costs incurred plus an applicable margin, then the Company records revenue upon shipment to the customer. Revenue from goods and services transferred to customers over time accounted for 52.6% and 50.1% of our revenue for the three and six months ended March 27, 2020, respectively. Revenue from goods and services transferred to customers over time accounted for 47.6% and 50.0% of our revenue for the three and six months ended March 29, 2019, respectively. For revenue recognized over time, the Company uses an input measure to determine progress towards completion. Under this method, sales and gross profit are recognized as work is performed generally based on the relationship between the actual costs incurred and the total estimated costs at completion. If the Company has an enforceable right to payment for work completed to date, with a recapture of costs incurred plus an applicable margin, and the goods do not have an alternative future use once the manufacturing process has commenced, then the Company records an unbilled revenue associated with non-cancellable customer orders. The Company derives revenue from engineering and design services. 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 2% of total revenue in each of the three and six months ended March 27, 2020 and March 29, 2019. Returns and Discounts The Company does not offer its customers a right of return. Rather, the Company warrants that each unit received by the customer will meet the agreed upon technical and quality specifications and requirements. Only when the delivered units do not meet these requirements can the customer return the non-compliant units as a corrective action under the warranty. The remedy offered to the customer is repair of the returned units or replacement if repair is not viable. Accordingly, the Company records a warranty reserve and any warranty activities are not considered to be a separate performance obligation. Historically, warranty reserves have not been material. Provisions for discounts, allowances, estimated returns and other adjustments are recorded in the period the related sales are recognized. Shipping and Handling Costs Amounts billed to customers for shipping and handling activities after the customer obtains control are treated as a promised service performance obligation and recorded in net sales in the accompanying condensed consolidated statements of operations. Shipping and handling costs incurred by the Company for the delivery of goods to customers are considered a cost to fulfill the contract and are included in cost of sales in the accompanying condensed consolidated statements of operations. Contract Assets Contract assets consist of unbilled contract amounts resulting from sales under contracts when the revenue recognized exceeds the amount billed to the customer. Practical Expedients and Exemptions The Company generally expenses incremental costs of obtaining a contract when incurred because the amortization period would be less than one year. These costs primarily relate to sales commissions and are recorded in selling and administrative expense in the condensed consolidated statements of operations. The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. Disaggregated Revenue The tables below show net sales from contracts with customers by market sector. See additional information regarding market sectors in Note 10—Market Sectors and Major Customers. Three Months Ended March 27, 2020 March 29, 2019 Point in Time Over Time Net Sales Point in Time Over Time Net Sales (in thousands) Aerospace & Defense $ 12,336 $ 14,167 $ 26,503 $ 11,075 $ 12,047 $ 23,122 Medical 3,151 7,450 10,601 3,872 3,214 7,086 Industrial 5,430 1,637 7,067 4,583 2,503 7,086 $ 20,917 $ 23,254 $ 44,171 $ 19,530 $ 17,764 $ 37,294 Six Months Ended March 27, 2020 March 29, 2019 Point in Time Over Time Net Sales Point in Time Over Time Net Sales (in thousands) Aerospace & Defense $ 26,792 $ 27,440 $ 54,232 $ 19,002 $ 22,457 $ 41,459 Medical 6,901 14,436 21,337 8,040 8,689 16,729 Industrial 10,628 2,708 13,336 9,318 5,229 14,547 $ 44,321 $ 44,584 $ 88,905 $ 36,360 $ 36,375 $ 72,735 Customer Deposits Customer deposits are recorded when cash payments are received or due in advance of revenue recognition from contracts with customers. The timing of revenue recognition may differ from the timing of billings to customers. The changes in customer deposits from the Company's custom manufacturing services are as follows: Six Months Ended March 27, March 29, (in thousands) Beginning balance $ 13,229 $ 7,595 Recognition of deferred revenue (8,573) (4,821) Deferral of revenue 11,146 7,452 Ending balance $ 15,802 $ 10,226 Sales Outside the United States For each of the three and six months ended March 27, 2020 and March 29, 2019, less than 2% of net sales were shipped to locations outside the United States. |
ALLOWANCE FOR DOUBTFUL ACCOUNTS
ALLOWANCE FOR DOUBTFUL ACCOUNTS | 6 Months Ended |
Mar. 27, 2020 | |
Receivables [Abstract] | |
ALLOWANCE FOR DOUBTFUL ACCOUNTS | NOTE 3—ALLOWANCE FOR DOUBTFUL ACCOUNTS A summary follows of activity in the allowance for doubtful accounts during the six months ended March 27, 2020 and March 29, 2019: Six Months Ended Allowance for doubtful accounts March 27, March 29, (in thousands) Allowance, beginning of period $ 71 $ 85 Increase in provision for doubtful accounts 48 (39) Write-offs — (7) Allowance, end of period $ 119 $ 39 |
INVENTORIES
INVENTORIES | 6 Months Ended |
Mar. 27, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 4—INVENTORIES A summary of inventory by category at period end follows: Inventories March 27, September 30, (in thousands) Raw materials $ 28,644 $ 25,393 Work-in-process 13,308 15,928 Finished goods 3,101 2,946 Total inventories $ 45,053 $ 44,267 |
PROPERTY, PLANT & EQUIPMENT, NE
PROPERTY, PLANT & EQUIPMENT, NET | 6 Months Ended |
Mar. 27, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT & EQUIPMENT, NET | NOTE 5—PROPERTY, PLANT AND EQUIPMENT, NET A summary of property, plant and equipment and accumulated depreciation at period end follows: Property, Plant and Equipment March 27, September 30, (in thousands) Land and improvements $ 788 $ 788 Buildings and improvements 7,430 7,411 Building under capital lease 7,750 7,750 Machinery and equipment 32,869 31,708 Furniture and fixtures 8,290 8,047 Software 5,215 5,215 Construction in progress 1,087 1,173 Total property, plant and equipment, at cost 63,429 62,092 Accumulated depreciation (44,197) (42,659) Property, plant and equipment, net $ 19,232 $ 19,433 Depreciation expense during the three and six months ended March 27, 2020 and March 29, 2019 follows: Three Months Ended Six Months Ended Depreciation Expense March 27, March 29, March 27, March 29, (in thousands) Depreciation expense $ 795 $ 646 $ 1,552 $ 1,301 |
CREDIT FACILITIES
CREDIT FACILITIES | 6 Months Ended |
Mar. 27, 2020 | |
Debt Disclosure [Abstract] | |
CREDIT FACILITIES | NOTE 6—CREDIT FACILITIES A summary of borrowings at period end follows: March 27, 2020 September 30, 2019 Credit Facility Debt Fixed/Variable Rate Maturity Date Balance Interest Rate Balance Interest Rate (in thousands) M&T Bank credit facilities: Revolving Credit Facility v 5/5/2022 $ 26,563 3.25 % $ 26,646 4.31 % Term Loan B v 5/5/2022 2,351 4.08 2,779 4.59 Equipment Line Term Note v Various 868 3.44 1,125 4.56 Total debt, gross 29,782 30,550 Unamortized debt issuance costs (229) (269) Total debt, net 29,553 30,281 Less: current portion (1,371) (1,371) Long-term debt $ 28,182 $ 28,910 M&T Bank Credit Facilities Effective as of July 8, 2019, the Company and M&T Bank entered into the Ninth Amendment to the Fifth Amended and Restated Credit Facility Agreement, which amended the Fifth Amended and Restated Credit Facility Agreement dated as of December 14, 2015, as amended by various amendments (collectively, the “Credit Facility, as amended”). The Credit Facility, as amended, is secured by a general security agreement covering the assets of the Company and its subsidiaries, a pledge of the Company’s equity interest in its subsidiaries, a negative pledge on the Company’s real property, and a guarantee by the Company’s subsidiaries, all of which restrict use of these assets to support other financial instruments. Individual debt facilities provided under the Credit Facility, as amended, are described below: a) Revolving Credit Facility (“Revolver”) : At March 27, 2020, up to $35.0 million is available through May 5, 2022. The maximum amount the Company may borrow is determined based on a borrowing base calculation described below. b) Term Loan B: $14.0 million was borrowed on January 18, 2013. Principal was being repaid in 120 equal monthly installments of $117 thousand. As part of an amendment to the Credit Facility, as amended, the principal was modified from $8.0 million to $6.0 million and principal is being repaid in equal monthly installments of $71 thousand plus a balloon payment of $0.6 million. The maturity date of the loan is May 5, 2022. c) Equipment Line Advances : Up to $1.5 million is available through May 5, 2022. Interest only is paid until maturity. Principal is due in three or six months after borrowing or can be converted to an Equipment Line Term Loan. d) Equipment Line Term Note : On July 26, 2018, $0.8 million was converted from an Equipment Line Advance, principal is being repaid in 36 equal monthly installments of $21 thousand and matures July 26, 2021. On September 27, 2018, $0.1 million was converted from an Equipment Line Advance, principal is being repaid in 36 equal monthly installments of $2 thousand and matures September 27, 2021. On March 18, 2019, $0.3 million was converted from an Equipment Line Advance, principal is being repaid in 36 equal monthly installments of $9 thousand and matures March 18, 2022. On May 6, 2019, $0.4 million was converted from an Equipment Line Advance, principal is being repaid in 36 equal monthly installments of $11 thousand and matures May 6, 2022. Borrowing Base At March 27, 2020 and September 30, 2019, under the Credit Facility, as amended, the maximum amount the Company can borrow under the Revolver was the lesser of (i) 85% of eligible receivables plus a percentage of eligible inventories (up to a cap of $14.0 million) or (ii) $35.0 million. At March 27, 2020, the upper limit on Revolver borrowings was $35.0 million and $8.4 million was available. At September 30, 2019, the upper limit on Revolver borrowings was $35.0 million and $8.4 million was available. Average Revolver balances amounted to $25.1 million and $18.4 million during the six months ended March 27, 2020 and March 29, 2019, respectively. Interest Rates Under the Credit Facility, as amended, variable rate debt accrues interest at LIBOR plus the applicable marginal interest rate that fluctuates based on the Company’s Fixed Charge Coverage Ratio, as defined below. At March 27, 2020 and September 30, 2019, the applicable marginal interest rate was 2.25% for the Revolver and 2.50% for Term Loan B and Equipment Line Advances . Changes to applicable margins and unused fees resulting from the Fixed Charge Coverage Ratio generally become effective mid-way through the subsequent quarter. The Company incurs quarterly unused commitment fees ranging from 0.25% to 0.375% of the excess of $27.0 million over average borrowings under the Revolver. Fees incurred amounted to $6.7 thousand and $12.5 thousand during the three and six months ended March 27, 2020, respectively. Fees incurred amounted to $4.5 thousand and $12.7 thousand during the three and six months ended March 29, 2019, respectively. The fee percentage varies based on the Company’s Fixed Charge Coverage Ratio, as defined below. Financial Covenants The Credit Facility, as amended, contains various affirmative and negative covenants including financial covenants. As of March 27, 2020, the Company had to maintain a minimum fixed charge coverage ratio (“Fixed Charge Coverage Ratio”). The Fixed Charge Coverage Ratio compares (i) EBITDAS minus unfinanced capital expenditures minus income tax expense, to (ii) the sum of interest expense, principal payments, payments on all capital lease obligations and dividends, if any (fixed charges). “EBITDAS” is defined as earnings before interest, income taxes, depreciation, amortization and non-cash stock compensation expense. The Fixed Charge Coverage Ratio was measured for a trailing twelve months ended March 27, 2020 as a minimum of 1.10 times. The Fixed Charge Coverage Ratio was the only covenant in effect at March 27, 2020. The Credit Facility, as amended, also provides for customary events of default, subject in certain cases to customary cure periods, in which the outstanding balance and any unpaid interest would become due and payable. The Company was in compliance with the financial debt covenant at March 27, 2020. Contractual Principal Payments A summary of contractual principal payments under IEC’s borrowings at March 27, 2020 for the next three years taking into consideration the Credit Facility, as amended, is as follows: Debt Repayment Schedule Contractual (in thousands) Twelve months ending March 2021 $ 1,371 2022 1,190 2023 ¹ 27,221 $ 29,782 |
WARRANTY RESERVES
WARRANTY RESERVES | 6 Months Ended |
Mar. 27, 2020 | |
Product Warranties Disclosures [Abstract] | |
WARRANTY RESERVES | NOTE 7—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. The warranty reserve is included in other accrued expenses on the condensed consolidated balance sheets. A summary of additions to and charges against IEC’s warranty reserves during the period follows: Six Months Ended Warranty Reserve March 27, March 29, (in thousands) Reserve, beginning of period $ 165 $ 173 Provision 27 27 Warranty costs (50) (56) Reserve, end of period $ 142 $ 144 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Mar. 27, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 8—STOCK-BASED COMPENSATION The 2019 Stock Incentive Plan (the “2019 Plan”) was approved by the Company’s stockholders at the March 2019 Annual Meeting. The 2019 Plan replaced the 2010 Omnibus Incentive Compensation Plan (“2010 Plan”) that was approved by the Company’s stockholders at the January 2011 Annual Meeting. The 2019 Plan, like the 2010 Plan, is administered by the Compensation Committee of the Board of Directors and 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. The Company also has an ESPP, adopted in 2011, that provides for the purchase of Company common stock at a discounted stock purchase price. Under the 2019 Plan, 840,360 shares of common stock, plus any shares that are subject to awards granted under the 2010 Plan that expire, are forfeited or canceled without the issuance of shares (other than shares used to pay the exercise price of a stock option under the 2010 Plan and shares used to cover the tax withholding of the award under the 2010 Plan) may be issued over a term of ten years. Under the ESPP, 150,000 shares of common stock may be issued over a term of ten years. Stock-based compensation expense recorded under the 2010 Plan and the 2019 Plan, totaled $0.2 million and $0.3 million for the three and six months ended March 27, 2020, respectively. Stock-based compensation expense recorded under the 2010 Plan and the 2019 Plan, totaled $0.2 million and $0.3 million for the three and six months ended March 29, 2019, respectively. At March 27, 2020, there were 621,369 shares of common stock remaining available to be issued under the 2019 Plan and 83,252 shares of common stock remaining available to be issued under the ESPP. 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 2010 Plan and ESPP is provided below. Stock Options When options are granted, IEC estimates fair value using the Black-Scholes option pricing model and recognizes the computed value as compensation cost over the vesting period, which is typically four seven Assumptions used in the Black-Scholes model and the estimated value of options granted during the six months ended March 27, 2020 and March 29, 2019 follows: Six Months Ended Valuation of Options March 27, March 29, Assumptions for Black-Scholes: Risk-free interest rate 0.51 % 2.85 % Expected term in years 5.5 5.5 Volatility 40 % 37 % Expected annual dividends none none Value of options granted: Number of options granted 30,000 10,000 Weighted average fair value per share $ 2.68 $ 2.40 Fair value of options granted (000s) $ 80 $ 24 A summary of stock option activity, together with other related data, follows: Six Months Ended March 27, 2020 March 29, 2019 Stock Options Number Wgtd. Avg. Number Wgtd. Avg. Outstanding, beginning of period 743,145 $ 4.54 737,145 $ 4.33 Granted 30,000 5.03 10,000 6.20 Exercised (26,000) 5.31 (26,500) 4.71 Forfeited (10,000) 3.58 (24,250) 3.70 Expired (5,000) 6.91 (5,000) 4.08 Outstanding, end of period 732,145 $ 4.53 691,395 $ 4.36 For options expected to vest Number expected to vest 722,582 $ 4.51 683,135 $ 4.35 Weighted average remaining contractual term, in years 3.3 3.6 Intrinsic value (000s) $ 1,510 $ 1,706 For exercisable options Number exercisable 545,645 $ 4.16 510,895 $ 4.18 Weighted average remaining contractual term, in years 1.9 2.9 Intrinsic value (000s) $ 1,354 $ 1,365 For non-exercisable options Expense not yet recognized (000s) $ 357 $ 230 Weighted average years to be recognized 3.1 3.3 For options exercised Intrinsic value (000s) $ 75 $ 57 Restricted (Non-vested) Stock Certain holders of IEC restricted stock have voting and dividend rights as of the date of grant, and, 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 A summary of restricted stock activity, together with related data, follows: Six Months Ended March 27, 2020 March 29, 2019 Restricted (Non-vested) Stock Number of Non-vested Shares Wgtd. Avg. Grant Date Fair Value Number of Non-vested Shares Wgtd. Avg. Grant Date Fair Value Outstanding, beginning of period 82,707 $ 5.25 103,233 $ 4.08 Granted 24,850 5.03 15,000 6.97 Vested (36,812) 4.43 (46,136) 4.09 Forfeited (13,250) 6.09 (1,400) 4.13 Outstanding, end of period 57,495 $ 5.49 70,697 $ 4.72 For non-vested shares Expense not yet recognized (000s) $ 286 $ 291 Weighted average remaining years for vesting 1.9 2.1 For shares vested Aggregate fair value on vesting dates (000s) $ 260 $ 311 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. The Company has not paid any meeting fees in stock since May 21, 2013. Restricted Stock Units Holders of IEC restricted stock units do not have voting and dividend rights as of the date of grant, and, until vested, the unit may be forfeited and cannot be sold or otherwise transferred. At the end of the vesting period, which is typically three years, holders will receive shares of the Company's common stock and have all the rights and privileges of any other common stockholder of the Company. The fair value of a restricted stock unit is the market value of the underlying shares of the Company's stock on the date of grant and that value is recognized as stock compensation expense over the vesting period. A summary of restricted stock unit activity, together with related data, follows: Six Months Ended March 27, 2020 March 29, 2019 Restricted Stock Units Number of Non-vested Units Wgtd. Avg. Grant Date Fair Value Number of Non-vested Units Wgtd. Avg. Grant Date Fair Value Outstanding, beginning of period 153,186 $ 5.36 170,492 $ 3.96 Granted 50,556 9.19 — — Vested (17,015) 3.58 — — Forfeited — — — — Outstanding, end of period 186,727 $ 6.56 170,492 $ 3.96 For non-vested shares Expense not yet recognized (000s) $ 906 $ 282 Weighted average remaining years for vesting 2.2 1.9 For shares vested Aggregate fair value on vesting dates (000s) $ 86 $ — |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Mar. 27, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 9—INCOME TAXES The income tax expense during each of the three and six months ended March 27, 2020 and March 29, 2019 follows: Three Months Ended Six Months Ended March 27, March 29, March 27, March 29, (in thousands) Income tax expense $ 367 $ 203 $ 703 $ 515 The income tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. There is a potential for volatility of the effective tax rate due to several factors, including discrete items, changes in the mix and amount of pre-tax income, changes in tax laws, business reorganizations, and settlements with taxing authorities, if any. In response to the COVID-19 pandemic, many governments have enacted or are contemplating measures to provide aid and economic stimulus. These measures may include deferring the due dates of tax payments or other changes to their income and non-income-based tax laws. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020 in the U.S., includes measures to assist companies, including temporary changes to income and non-income-based tax laws. For the three months ended March 27, 2020, there were no material tax impacts to our condensed consolidated financial statements as it relates to COVID-19 measures. We continue to monitor additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service and others. The CARES Act includes a provision which accelerates the refund of alternative minimum tax (“AMT”) credits to allow a full utilization or refund of the remaining credits beginning in tax year 2019. As the Company expects to have net operating loss carryforward to offset its 2019 taxable income in full, the AMT credit should be refundable in full. As such, at March 27, 2020, the Company reclassified the remaining portion of its AMT credit from deferred income tax to federal income tax receivable in the condensed consolidated balance sheet. |
MARKET SECTORS AND MAJOR CUSTOM
MARKET SECTORS AND MAJOR CUSTOMERS | 6 Months Ended |
Mar. 27, 2020 | |
Risks and Uncertainties [Abstract] | |
MARKET SECTORS AND MAJOR CUSTOMERS | NOTE 10—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 29, March 27, March 29, Aerospace & Defense 60% 62% 61% 57% Medical 24% 19% 24% 23% Industrial 16% 19% 15% 20% 100% 100% 100% 100% Four individual customers represented 10% or more of sales for the three months ended March 27, 2020. Three of these customers were from the aerospace & defense sector and represented 25%, 12% and 11% of sales. The fourth customer was from the medical sector and represented 17% of sales for the three months ended March 27, 2020. Three individual customers represented 10% or more of sales for the six months ended March 27, 2020. Two of these customers were from the aerospace & defense sector and represented 26% and 11% of sales. The third customer was from the medical sector and represented 16% of sales for the six months ended March 27, 2020. One individual customer represented 10% or more of sales for the three months ended March 29, 2019. This customer was from the aerospace & defense sector and represented 22% of sales. Two individual customers each represented 10% or more of sales for the six months ended March 29, 2019. One customer was from the aerospace & defense sector and represented 21% of sales, while one customer was from the medical sector and represented 11% of sales. Two individual customers represented 10% or more of receivables and accounted for 30% of the outstanding balance at March 27, 2020. Two individual customers represented 10% or more of receivables and accounted for 38% of the outstanding balance at September 30, 2019. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Mar. 27, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 11—COMMITMENTS AND CONTINGENCIES Litigation From time to time, the Company may be involved in legal actions in the ordinary course of its business, but management does not believe that any such proceedings, individually or in the aggregate, will have a material adverse effect on the Company’s condensed consolidated financial statements. |
LEASES
LEASES | 6 Months Ended |
Mar. 27, 2020 | |
Leases [Abstract] | |
LEASES | NOTE 12—LEASES Operating Leases IEC has a lease portfolio that consists of operating leases for equipment, and has remaining terms from less than one year to up to approximately five years, with contractual terms expiring from 2020 to 2024. None of these leases contain residual value guarantees, substantial restrictions, or covenants. Supplemental balance sheet information related to the Company’s operating leases were as follows: March 27, Weighted average remaining lease term for operating leases (in years) 4.2 Weighted average discount rate for operating leases 5.47 % Finance Leases IEC's lease portfolio also consists of finance leases for equipment and real estate, and has remaining terms of five years up to approximately thirteen years, with contractual terms expiring in 2024 through 2033. Supplemental balance sheet information related to the Company’s finance leases were as follows: March 27, Finance lease right-of-use assets, net of accumulated amortization (included in PP&E) (in thousands) $ 6,617 Weighted average remaining lease term for finance leases (in years) 11.7 Weighted average discount rate for finance leases 4.83 % Lease Expense The components of lease expense, recorded in cost of sales, selling and administrative expenses and interest and financing expense in the condensed consolidated statements of operation, during the three and six months ended March 27, 2020 were as follows: Three Months Ended Six Months Ended Lease Expense Classification March 27, March 27, (in thousands) Operating lease expense Fixed payment operating lease expense ¹ Cost of sales $ 68 $ 93 Fixed payment operating lease expense Selling and administrative expenses 15 29 Variable payment operating lease expense — — Finance lease expense Depreciation of ROU assets Cost of sales 144 273 Interest Interest and financing expense 88 174 Total lease expense $ 315 $ 569 1 Includes short-term leases which are not material. Supplemental Cash Flow Information Supplemental cash flow information related to the Company's leases during the six months ended March 27, 2020 were as follows: Six Months Ended Supplemental Cash Flow March 27, (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Cash paid for operating lease ROU assets $ 47 Interest paid on finance leases 174 Financing cash flows from finance leases — Lease liabilities arising from obtaining ROU assets: Operating leases 33 Contractual Lease Payments A summary of operating lease payments for the next five years follows: Operating Lease Payment Schedule Contractual (in thousands) Twelve months ending March 2021 $ 77 2022 73 2023 72 2024 72 2025 and thereafter 18 Total operating lease payments 312 Less: amounts representing interest (38) Total operating lease obligation $ 274 A summary of finance lease payments for the next five years follows: Finance Lease Payment Schedule Contractual (in thousands) Twelve months ending March 2021 $ 760 2022 774 2023 788 2024 802 2025 and thereafter 6,481 Total finance lease payments 9,605 Less: amounts representing interest (2,349) Total finance lease obligation $ 7,256 Disclosures Related to Periods Prior to Adoption of the New Lease Standard As previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2019 and under the previous lease accounting standard, the maturities of lease liabilities at September 30, 2019 were as follows: Capital Lease Payment Schedule Contractual (in thousands) Twelve months ending September 30, 2020 $ 673 2021 686 2022 700 2023 714 2024 and thereafter 6,720 Total capital lease payments 9,493 Less: amounts representing interest (2,470) Present value of minimum lease payment $ 7,023 As of March 27, 2020, the Company has one outstanding lease agreement that has not yet commenced for certain property located in Newark, New York that will include a new manufacturing facility and administrative offices. The lease is expected to commence in late fiscal 2020 when construction of the asset is complete. |
LEASES | NOTE 12—LEASES Operating Leases IEC has a lease portfolio that consists of operating leases for equipment, and has remaining terms from less than one year to up to approximately five years, with contractual terms expiring from 2020 to 2024. None of these leases contain residual value guarantees, substantial restrictions, or covenants. Supplemental balance sheet information related to the Company’s operating leases were as follows: March 27, Weighted average remaining lease term for operating leases (in years) 4.2 Weighted average discount rate for operating leases 5.47 % Finance Leases IEC's lease portfolio also consists of finance leases for equipment and real estate, and has remaining terms of five years up to approximately thirteen years, with contractual terms expiring in 2024 through 2033. Supplemental balance sheet information related to the Company’s finance leases were as follows: March 27, Finance lease right-of-use assets, net of accumulated amortization (included in PP&E) (in thousands) $ 6,617 Weighted average remaining lease term for finance leases (in years) 11.7 Weighted average discount rate for finance leases 4.83 % Lease Expense The components of lease expense, recorded in cost of sales, selling and administrative expenses and interest and financing expense in the condensed consolidated statements of operation, during the three and six months ended March 27, 2020 were as follows: Three Months Ended Six Months Ended Lease Expense Classification March 27, March 27, (in thousands) Operating lease expense Fixed payment operating lease expense ¹ Cost of sales $ 68 $ 93 Fixed payment operating lease expense Selling and administrative expenses 15 29 Variable payment operating lease expense — — Finance lease expense Depreciation of ROU assets Cost of sales 144 273 Interest Interest and financing expense 88 174 Total lease expense $ 315 $ 569 1 Includes short-term leases which are not material. Supplemental Cash Flow Information Supplemental cash flow information related to the Company's leases during the six months ended March 27, 2020 were as follows: Six Months Ended Supplemental Cash Flow March 27, (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Cash paid for operating lease ROU assets $ 47 Interest paid on finance leases 174 Financing cash flows from finance leases — Lease liabilities arising from obtaining ROU assets: Operating leases 33 Contractual Lease Payments A summary of operating lease payments for the next five years follows: Operating Lease Payment Schedule Contractual (in thousands) Twelve months ending March 2021 $ 77 2022 73 2023 72 2024 72 2025 and thereafter 18 Total operating lease payments 312 Less: amounts representing interest (38) Total operating lease obligation $ 274 A summary of finance lease payments for the next five years follows: Finance Lease Payment Schedule Contractual (in thousands) Twelve months ending March 2021 $ 760 2022 774 2023 788 2024 802 2025 and thereafter 6,481 Total finance lease payments 9,605 Less: amounts representing interest (2,349) Total finance lease obligation $ 7,256 Disclosures Related to Periods Prior to Adoption of the New Lease Standard As previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2019 and under the previous lease accounting standard, the maturities of lease liabilities at September 30, 2019 were as follows: Capital Lease Payment Schedule Contractual (in thousands) Twelve months ending September 30, 2020 $ 673 2021 686 2022 700 2023 714 2024 and thereafter 6,720 Total capital lease payments 9,493 Less: amounts representing interest (2,470) Present value of minimum lease payment $ 7,023 As of March 27, 2020, the Company has one outstanding lease agreement that has not yet commenced for certain property located in Newark, New York that will include a new manufacturing facility and administrative offices. The lease is expected to commence in late fiscal 2020 when construction of the asset is complete. |
NET INCOME PER SHARE
NET INCOME PER SHARE | 6 Months Ended |
Mar. 27, 2020 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | NOTE 13—NET INCOME PER SHARE The Company applies the two-class method to calculate and present net income per share. Certain of the Company's restricted (non-vested) share awards contain non-forfeitable rights to dividends and are considered participating securities for purposes of computing net income per share pursuant to the two-class method. Under the two-class method, net earnings are reduced by the amount of dividends declared (whether paid or unpaid) and the remaining undistributed earnings are then allocated to common stock and participating securities, based on their respective rights to receive dividends. 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 unvested restricted stock and restricted stock units. Options, restricted stock and restricted stock units are primarily held by directors, officers and certain employees. The Company uses the two-class method to calculate net income per share as both classes share the same rights in dividends. Therefore, basic and diluted earnings per share (“EPS”) are the same for both classes of ordinary shares. A summary of shares used in the EPS calculations follows (in thousands except share and per share data): Three Months Ended Six Months Ended Net Income Per Share March 27, March 29, March 27, March 29, (in thousands, except share and per share data) Basic net income per share: Net income $ 1,523 $ 670 $ 2,712 $ 1,742 Less: Income attributable to non-vested shares 8 4 15 9 Net income available to common stockholders $ 1,515 $ 666 $ 2,697 $ 1,733 Weighted average common shares outstanding 10,393,461 10,286,876 10,379,846 10,274,772 Basic net income per share $ 0.15 $ 0.06 $ 0.26 $ 0.17 Diluted net income per share: Net income $ 1,523 $ 670 $ 2,712 $ 1,742 Shares used in computing basic net income per share 10,393,461 10,286,876 10,379,846 10,274,772 Dilutive effect of non-vested shares 309,651 391,182 286,155 299,304 Shares used in computing diluted net income per share 10,703,112 10,678,058 10,666,001 10,574,076 Diluted net income per share $ 0.14 $ 0.06 $ 0.25 $ 0.16 The diluted weighted average share calculations do not include the following shares, which are not dilutive to the EPS calculations. Three Months Ended Six Months Ended March 27, March 29, March 27, March 29, Anti-dilutive shares excluded — — — 19,583 |
OUR BUSINESS AND SUMMARY OF SIG
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Mar. 27, 2020 | |
Accounting Policies [Abstract] | |
Our Business | Our Business IEC Electronics Corp. (“IEC,” or the “Company”) provides electronic manufacturing services (“EMS”) to advanced technology companies that produce life-saving and mission critical products for the medical, industrial, aerospace and defense sectors. The Company specializes in delivering technical solutions for the custom manufacture of complex full system assemblies by providing on-site analytical testing laboratories, custom design and test engineering services combined with a broad array of manufacturing services encompassing electronics, interconnect solutions, and precision metalworking. As a full service EMS provider, IEC holds all appropriate certifications for the market sectors it supports including ISO 9001:2015, AS9100D, and ISO 13485, and we are Nadcap accredited. IEC is headquartered in Newark, NY and also has operations in Rochester, NY and Albuquerque, NM. Additional information about IEC can be found on its web site at www.iec-electronics.com . The contents of this website are not incorporated by reference into this quarterly report. |
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 30 and the first three quarters generally end on the Friday closest to the last day of the calendar quarter. For the fiscal year ending September 30, 2020 (“fiscal 2020”), the fiscal quarters end on December 27, 2019, March 27, 2020 and June 26, 2020. For the fiscal year ended September 30, 2019 (“fiscal 2019”), the fiscal quarters ended on December 28, 2018, March 29, 2019 and June 28, 2019. |
Consolidation | Consolidation |
Unaudited Financial Statements | Unaudited Financial Statements The accompanying unaudited condensed consolidated financial statements for the three and six months ended March 27, 2020 and March 29, 2019 have been prepared without an audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and do not include certain of the information the footnotes require by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, required for a fair presentation of the information have been made. The accompanying financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2019. |
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 the likelihood of collection is remote. |
Inventory Valuation | Inventory Valuation Inventories are stated at the lower of cost or net realizable 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 the lower of cost or net realizable value. |
Property, Plant and Equipment | . PP&E Lives Estimated (years) Land improvements 10 Buildings and improvements 5 to 40 Machinery and equipment 3 to 10 Furniture and fixtures 3 to 7 Software 3 to 10 |
Reviewing Long-Lived Assets for Potential Impairment | Reviewing Long-Lived Assets for Potential Impairment ASC 360 (Property, Plant and Equipment) requires the Company to test long-lived assets (PP&E and definite lived assets) for recoverability whenever events or circumstances indicate that the carrying amount may not be recoverable. If carrying value exceeds 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 long-lived assets during either of the three and six months ended March 27, 2020 and March 29, 2019. |
Legal Contingencies | Legal Contingencies When legal proceedings are brought or claims are made against the Company and the outcome is uncertain, ASC 450 (Contingencies) requires the Company to 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. |
Customer Deposits | 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. |
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 and borrowings. IEC believes that recorded value approximates fair value for all cash, accounts receivable, accounts payable, accrued liabilities and borrowings. 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 each of the three and six months ended March 27, 2020 and March 29, 2019. |
Stock-Based Compensation | Stock-Based Compensation |
Legal Expenses Accrual | Legal Expense Accrual The Company records legal expenses as they are incurred, based on invoices received or estimates provided by legal counsel. Future estimated legal expenses are not recorded until incurred. |
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 tax 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 incurred is reported as interest expense. Any penalties incurred are reported as tax expense. The Company’s income tax filings are subject to audit by various tax jurisdictions and current open years are the fiscal year ended September 30, 2014 through fiscal year ended September 30, 2018. |
Dividends | Dividends |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with 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. Significant items subject to such estimates include: excess and obsolete inventory reserve, warranty reserves, the valuation of deferred income tax assets and revenue recognition related to the accounts for over time contracts. Actual results may differ from management’s estimates. |
Statements of Cash Flows | Statements of Cash Flows |
Segment Reporting, Policy [Policy Text Block] | Segments The Company’s results of operations for the three and six months ended March 27, 2020 and March 29, 2019 represent a single operating and reporting segment, referred to as contract manufacturing within the EMS industry. The Company strategically directs production between its various manufacturing facilities based on a number of considerations to best meet its customers’ requirements. The Company shares resources for sales, marketing, engineering, supply chain, information services, human resources, payroll and corporate accounting functions. Consolidated financial information is available that is evaluated regularly by the chief operating decision maker in assessing performance and allocating resources. The Company’s operations as a whole reflect the level at which the business is managed and how the Company’s chief operating decision maker assesses performance internally. |
Recently Issued Accounting Standards | Recently Adopted Accounting Standards FASB ASU 2016-02, “Leases” (Topic 842) was issued in February 2016. The guidance was effective for the Company beginning with the first quarter of fiscal 2020. As a result of this adoption, the following accounting policies were implemented or changed. The Company elected the optional transition method to initially apply the new lease standard at the adoption date and not adjust its comparative period consolidated financial statements. The Company has elected the package of three practical expedients, which permits the Company not to reassess prior conclusions about lease identification, lease classification and initial direct costs. The Company has not elected the use-of-hindsight or the practical expedient in determining lease term or impairment of ROU assets. In addition, the Company has elected a short-term lease exemption policy that permits the Company to not apply the recognition requirements of the new lease standard to leases with a term of 12 months or less. The Company has also elected an accounting policy to not separate lease and non-lease components for certain classes of leases. Adoption of Topic 842 resulted in recognition of additional net lease assets of approximately $0.3 million and net lease liabilities of approximately $0.3 million as of October 1, 2019 based on the present value of remaining minimum rental payments and corresponding ROU assets based upon the operating lease liabilities. The adoption did not impact our beginning stockholders’ equity and did not have a material impact on the condensed consolidated statements of operations or cash flows. |
Earnings Per Share | The Company applies the two-class method to calculate and present net income per share. Certain of the Company's restricted (non-vested) share awards contain non-forfeitable rights to dividends and are considered participating securities for purposes of computing net income per share pursuant to the two-class method. Under the two-class method, net earnings are reduced by the amount of dividends declared (whether paid or unpaid) and the remaining undistributed earnings are then allocated to common stock and participating securities, based on their respective rights to receive dividends. 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 unvested restricted stock and restricted stock units. Options, restricted stock and restricted stock units are primarily held by directors, officers and certain employees. |
OUR BUSINESS AND SUMMARY OF S_2
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Mar. 27, 2020 | |
Accounting Policies [Abstract] | |
Property, Plant and Equipment | . PP&E Lives Estimated (years) Land improvements 10 Buildings and improvements 5 to 40 Machinery and equipment 3 to 10 Furniture and fixtures 3 to 7 Software 3 to 10 A summary of property, plant and equipment and accumulated depreciation at period end follows: Property, Plant and Equipment March 27, September 30, (in thousands) Land and improvements $ 788 $ 788 Buildings and improvements 7,430 7,411 Building under capital lease 7,750 7,750 Machinery and equipment 32,869 31,708 Furniture and fixtures 8,290 8,047 Software 5,215 5,215 Construction in progress 1,087 1,173 Total property, plant and equipment, at cost 63,429 62,092 Accumulated depreciation (44,197) (42,659) Property, plant and equipment, net $ 19,232 $ 19,433 Depreciation expense during the three and six months ended March 27, 2020 and March 29, 2019 follows: Three Months Ended Six Months Ended Depreciation Expense March 27, March 29, March 27, March 29, (in thousands) Depreciation expense $ 795 $ 646 $ 1,552 $ 1,301 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 6 Months Ended |
Mar. 27, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Net Sales from Contracts with Customers by Market Sector | The tables below show net sales from contracts with customers by market sector. See additional information regarding market sectors in Note 10—Market Sectors and Major Customers. Three Months Ended March 27, 2020 March 29, 2019 Point in Time Over Time Net Sales Point in Time Over Time Net Sales (in thousands) Aerospace & Defense $ 12,336 $ 14,167 $ 26,503 $ 11,075 $ 12,047 $ 23,122 Medical 3,151 7,450 10,601 3,872 3,214 7,086 Industrial 5,430 1,637 7,067 4,583 2,503 7,086 $ 20,917 $ 23,254 $ 44,171 $ 19,530 $ 17,764 $ 37,294 |
Schedule of Impact of Topic 606 Adoption on Consolidated Financial Statements | Customer deposits are recorded when cash payments are received or due in advance of revenue recognition from contracts with customers. The timing of revenue recognition may differ from the timing of billings to customers. The changes in customer deposits from the Company's custom manufacturing services are as follows: Six Months Ended March 27, March 29, (in thousands) Beginning balance $ 13,229 $ 7,595 Recognition of deferred revenue (8,573) (4,821) Deferral of revenue 11,146 7,452 Ending balance $ 15,802 $ 10,226 |
ALLOWANCE FOR DOUBTFUL ACCOUN_2
ALLOWANCE FOR DOUBTFUL ACCOUNTS (Tables) | 6 Months Ended |
Mar. 27, 2020 | |
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, 2020 and March 29, 2019: Six Months Ended Allowance for doubtful accounts March 27, March 29, (in thousands) Allowance, beginning of period $ 71 $ 85 Increase in provision for doubtful accounts 48 (39) Write-offs — (7) Allowance, end of period $ 119 $ 39 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Mar. 27, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | A summary of inventory by category at period end follows: Inventories March 27, September 30, (in thousands) Raw materials $ 28,644 $ 25,393 Work-in-process 13,308 15,928 Finished goods 3,101 2,946 Total inventories $ 45,053 $ 44,267 |
PROPERTY, PLANT & EQUIPMENT (Ta
PROPERTY, PLANT & EQUIPMENT (Tables) | 6 Months Ended |
Mar. 27, 2020 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant and Equipment | . PP&E Lives Estimated (years) Land improvements 10 Buildings and improvements 5 to 40 Machinery and equipment 3 to 10 Furniture and fixtures 3 to 7 Software 3 to 10 A summary of property, plant and equipment and accumulated depreciation at period end follows: Property, Plant and Equipment March 27, September 30, (in thousands) Land and improvements $ 788 $ 788 Buildings and improvements 7,430 7,411 Building under capital lease 7,750 7,750 Machinery and equipment 32,869 31,708 Furniture and fixtures 8,290 8,047 Software 5,215 5,215 Construction in progress 1,087 1,173 Total property, plant and equipment, at cost 63,429 62,092 Accumulated depreciation (44,197) (42,659) Property, plant and equipment, net $ 19,232 $ 19,433 Depreciation expense during the three and six months ended March 27, 2020 and March 29, 2019 follows: Three Months Ended Six Months Ended Depreciation Expense March 27, March 29, March 27, March 29, (in thousands) Depreciation expense $ 795 $ 646 $ 1,552 $ 1,301 |
CREDIT FACILITIES (Tables)
CREDIT FACILITIES (Tables) | 6 Months Ended |
Mar. 27, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | A summary of borrowings at period end follows: March 27, 2020 September 30, 2019 Credit Facility Debt Fixed/Variable Rate Maturity Date Balance Interest Rate Balance Interest Rate (in thousands) M&T Bank credit facilities: Revolving Credit Facility v 5/5/2022 $ 26,563 3.25 % $ 26,646 4.31 % Term Loan B v 5/5/2022 2,351 4.08 2,779 4.59 Equipment Line Term Note v Various 868 3.44 1,125 4.56 Total debt, gross 29,782 30,550 Unamortized debt issuance costs (229) (269) Total debt, net 29,553 30,281 Less: current portion (1,371) (1,371) Long-term debt $ 28,182 $ 28,910 |
Schedule of Maturities of Long-term Debt | Debt Repayment Schedule Contractual (in thousands) Twelve months ending March 2021 $ 1,371 2022 1,190 2023 ¹ 27,221 $ 29,782 |
WARRANTY RESERVES (Tables)
WARRANTY RESERVES (Tables) | 6 Months Ended |
Mar. 27, 2020 | |
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 29, (in thousands) Reserve, beginning of period $ 165 $ 173 Provision 27 27 Warranty costs (50) (56) Reserve, end of period $ 142 $ 144 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Mar. 27, 2020 | |
Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block] | Restricted Stock Units Holders of IEC restricted stock units do not have voting and dividend rights as of the date of grant, and, until vested, the unit may be forfeited and cannot be sold or otherwise transferred. At the end of the vesting period, which is typically three years, holders will receive shares of the Company's common stock and have all the rights and privileges of any other common stockholder of the Company. The fair value of a restricted stock unit is the market value of the underlying shares of the Company's stock on the date of grant and that value is recognized as stock compensation expense over the vesting period. A summary of restricted stock unit activity, together with related data, follows: Six Months Ended March 27, 2020 March 29, 2019 Restricted Stock Units Number of Non-vested Units Wgtd. Avg. Grant Date Fair Value Number of Non-vested Units Wgtd. Avg. Grant Date Fair Value Outstanding, beginning of period 153,186 $ 5.36 170,492 $ 3.96 Granted 50,556 9.19 — — Vested (17,015) 3.58 — — Forfeited — — — — Outstanding, end of period 186,727 $ 6.56 170,492 $ 3.96 For non-vested shares Expense not yet recognized (000s) $ 906 $ 282 Weighted average remaining years for vesting 2.2 1.9 For shares vested Aggregate fair value on vesting dates (000s) $ 86 $ — |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | during the six months ended March 27, 2020 and March 29, 2019 follows: Six Months Ended Valuation of Options March 27, March 29, Assumptions for Black-Scholes: Risk-free interest rate 0.51 % 2.85 % Expected term in years 5.5 5.5 Volatility 40 % 37 % Expected annual dividends none none Value of options granted: Number of options granted 30,000 10,000 Weighted average fair value per share $ 2.68 $ 2.40 Fair value of options granted (000s) $ 80 $ 24 |
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 March 27, 2020 March 29, 2019 Stock Options Number Wgtd. Avg. Number Wgtd. Avg. Outstanding, beginning of period 743,145 $ 4.54 737,145 $ 4.33 Granted 30,000 5.03 10,000 6.20 Exercised (26,000) 5.31 (26,500) 4.71 Forfeited (10,000) 3.58 (24,250) 3.70 Expired (5,000) 6.91 (5,000) 4.08 Outstanding, end of period 732,145 $ 4.53 691,395 $ 4.36 For options expected to vest Number expected to vest 722,582 $ 4.51 683,135 $ 4.35 Weighted average remaining contractual term, in years 3.3 3.6 Intrinsic value (000s) $ 1,510 $ 1,706 For exercisable options Number exercisable 545,645 $ 4.16 510,895 $ 4.18 Weighted average remaining contractual term, in years 1.9 2.9 Intrinsic value (000s) $ 1,354 $ 1,365 For non-exercisable options Expense not yet recognized (000s) $ 357 $ 230 Weighted average years to be recognized 3.1 3.3 For options exercised Intrinsic value (000s) $ 75 $ 57 |
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 March 27, 2020 March 29, 2019 Restricted (Non-vested) Stock Number of Non-vested Shares Wgtd. Avg. Grant Date Fair Value Number of Non-vested Shares Wgtd. Avg. Grant Date Fair Value Outstanding, beginning of period 82,707 $ 5.25 103,233 $ 4.08 Granted 24,850 5.03 15,000 6.97 Vested (36,812) 4.43 (46,136) 4.09 Forfeited (13,250) 6.09 (1,400) 4.13 Outstanding, end of period 57,495 $ 5.49 70,697 $ 4.72 For non-vested shares Expense not yet recognized (000s) $ 286 $ 291 Weighted average remaining years for vesting 1.9 2.1 For shares vested Aggregate fair value on vesting dates (000s) $ 260 $ 311 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Mar. 27, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | during each of the three and six months ended March 27, 2020 and March 29, 2019 follows: Three Months Ended Six Months Ended March 27, March 29, March 27, March 29, (in thousands) Income tax expense $ 367 $ 203 $ 703 $ 515 |
MARKET SECTORS AND MAJOR CUST_2
MARKET SECTORS AND MAJOR CUSTOMERS (Tables) | 6 Months Ended |
Mar. 27, 2020 | |
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 29, March 27, March 29, Aerospace & Defense 60% 62% 61% 57% Medical 24% 19% 24% 23% Industrial 16% 19% 15% 20% 100% 100% 100% 100% |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Mar. 27, 2020 | |
Leases [Abstract] | |
Supplmental balance Sheet Information Related to the Company's Leases | Supplemental balance sheet information related to the Company’s operating leases were as follows: March 27, Weighted average remaining lease term for operating leases (in years) 4.2 Weighted average discount rate for operating leases 5.47 % |
Components of Lease Expense and Supplemental Cash Flow Information | The components of lease expense, recorded in cost of sales, selling and administrative expenses and interest and financing expense in the condensed consolidated statements of operation, during the three and six months ended March 27, 2020 were as follows: Three Months Ended Six Months Ended Lease Expense Classification March 27, March 27, (in thousands) Operating lease expense Fixed payment operating lease expense ¹ Cost of sales $ 68 $ 93 Fixed payment operating lease expense Selling and administrative expenses 15 29 Variable payment operating lease expense — — Finance lease expense Depreciation of ROU assets Cost of sales 144 273 Interest Interest and financing expense 88 174 Total lease expense $ 315 $ 569 1 Includes short-term leases which are not material. Supplemental Cash Flow Information Supplemental cash flow information related to the Company's leases during the six months ended March 27, 2020 were as follows: Six Months Ended Supplemental Cash Flow March 27, (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Cash paid for operating lease ROU assets $ 47 Interest paid on finance leases 174 Financing cash flows from finance leases — Lease liabilities arising from obtaining ROU assets: Operating leases 33 |
Summary of Operating Lease Payments | A summary of operating lease payments for the next five years follows: Operating Lease Payment Schedule Contractual (in thousands) Twelve months ending March 2021 $ 77 2022 73 2023 72 2024 72 2025 and thereafter 18 Total operating lease payments 312 Less: amounts representing interest (38) Total operating lease obligation $ 274 |
Summary of Finance Lease Payments | A summary of finance lease payments for the next five years follows: Finance Lease Payment Schedule Contractual (in thousands) Twelve months ending March 2021 $ 760 2022 774 2023 788 2024 802 2025 and thereafter 6,481 Total finance lease payments 9,605 Less: amounts representing interest (2,349) Total finance lease obligation $ 7,256 |
Schedule of Future Minimum Lease Payments for Capital Leases | As previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2019 and under the previous lease accounting standard, the maturities of lease liabilities at September 30, 2019 were as follows: Capital Lease Payment Schedule Contractual (in thousands) Twelve months ending September 30, 2020 $ 673 2021 686 2022 700 2023 714 2024 and thereafter 6,720 Total capital lease payments 9,493 Less: amounts representing interest (2,470) Present value of minimum lease payment $ 7,023 |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 6 Months Ended |
Mar. 27, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | A summary of shares used in the EPS calculations follows (in thousands except share and per share data): Three Months Ended Six Months Ended Net Income Per Share March 27, March 29, March 27, March 29, (in thousands, except share and per share data) Basic net income per share: Net income $ 1,523 $ 670 $ 2,712 $ 1,742 Less: Income attributable to non-vested shares 8 4 15 9 Net income available to common stockholders $ 1,515 $ 666 $ 2,697 $ 1,733 Weighted average common shares outstanding 10,393,461 10,286,876 10,379,846 10,274,772 Basic net income per share $ 0.15 $ 0.06 $ 0.26 $ 0.17 Diluted net income per share: Net income $ 1,523 $ 670 $ 2,712 $ 1,742 Shares used in computing basic net income per share 10,393,461 10,286,876 10,379,846 10,274,772 Dilutive effect of non-vested shares 309,651 391,182 286,155 299,304 Shares used in computing diluted net income per share 10,703,112 10,678,058 10,666,001 10,574,076 Diluted net income per share $ 0.14 $ 0.06 $ 0.25 $ 0.16 |
OUR BUSINESS AND SUMMARY OF S_3
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Plant and Equipment (Details) | 6 Months Ended |
Mar. 27, 2020 | |
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 | 10 years |
Furniture and fixtures [Member] | Minimum [Member] | |
Estimated useful lives | 3 years |
Furniture and fixtures [Member] | Maximum [Member] | |
Estimated useful lives | 7 years |
Software and Software Development Costs [Member] | Minimum [Member] | |
Estimated useful lives | 3 years |
Software and Software Development Costs [Member] | Maximum [Member] | |
Estimated useful lives | 10 years |
OUR BUSINESS AND SUMMARY OF S_4
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) | 6 Months Ended | |||
Mar. 27, 2020 | Oct. 01, 2019 | Sep. 30, 2019 | Oct. 01, 2018 | |
Accounting Policies [Abstract] | ||||
Asset impairment charges | $ 0 | |||
Bank Overdrafts | 100,000 | $ 300,000 | ||
Restricted stock vested, net of shares withheld for payment of taxes | $ 441,000 | |||
Operating lease right-of-use assets, net of accumulated amortization | $ 300,000 | |||
Total operating lease obligation | $ 274,000 | $ 300,000 |
REVENUE RECOGNITION - Narrative
REVENUE RECOGNITION - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 27, 2020 | Mar. 29, 2019 | Oct. 01, 2018 | |
Disaggregation of Revenue [Line Items] | |||
Net income | $ 441 | ||
Product Concentration Risk [Member] | Sales Revenue, Net [Member] | Value-added support services revenue, including material management and repair work revenue [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Percentage of sales revenue | 2.00% | 2.00% | |
Point in Time | Product Concentration Risk [Member] | Sales Revenue, Net [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Percentage of sales revenue | 47.40% | ||
Over Time | Product Concentration Risk [Member] | Sales Revenue, Net [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Percentage of sales revenue | 52.60% |
REVENUE RECOGNITION - Schedule
REVENUE RECOGNITION - Schedule of Net Sales from Contracts with Customers by Market Sector (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 27, 2020 | Mar. 29, 2019 | Mar. 27, 2020 | Mar. 29, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 44,171 | $ 37,294 | $ 88,905 | $ 72,735 |
Aerospace & Defense | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 26,503 | 23,122 | 54,232 | 41,459 |
Medical | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 10,601 | 7,086 | 21,337 | 16,729 |
Industrial | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 7,067 | 7,086 | 13,336 | 14,547 |
Point in Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 20,917 | 19,530 | 44,321 | 36,360 |
Point in Time | Aerospace & Defense | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 12,336 | 11,075 | 26,792 | 19,002 |
Point in Time | Medical | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 3,151 | 3,872 | 6,901 | 8,040 |
Point in Time | Industrial | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 5,430 | 4,583 | 10,628 | 9,318 |
Over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 23,254 | 17,764 | 44,584 | 36,375 |
Over Time | Aerospace & Defense | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 14,167 | 12,047 | 27,440 | 22,457 |
Over Time | Medical | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 7,450 | 3,214 | 14,436 | 8,689 |
Over Time | Industrial | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 1,637 | $ 2,503 | $ 2,708 | $ 5,229 |
REVENUE RECOGNITION - Impact of
REVENUE RECOGNITION - Impact of Topic 606 on Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 27, 2020 | Sep. 30, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Unbilled contract revenue | $ 10,601 | $ 9,529 |
Inventories | 45,053 | 44,267 |
Accumulated deficit | $ (12,563) | $ (15,275) |
REVENUE RECOGNITION - Impact _2
REVENUE RECOGNITION - Impact of Topic 606 on Consolidated Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 27, 2020 | Mar. 29, 2019 | Mar. 27, 2020 | Mar. 29, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenues | $ 44,171 | $ 37,294 | $ 88,905 | $ 72,735 |
Cost of sales | 38,668 | 32,708 | 78,163 | 63,090 |
Gross profit | 5,503 | 4,586 | 10,742 | 9,645 |
Income tax expense | $ 367 | 203 | 703 | 515 |
Net income | $ 670 | $ 2,712 | $ 1,742 |
REVENUE RECOGNITION - Customer
REVENUE RECOGNITION - Customer Deposits (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 27, 2020 | Mar. 29, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Beginning balance | $ 13,229 | $ 7,595 |
Recognition of deferred revenue | (8,573) | (4,821) |
Deferral of revenue | 11,146 | 7,452 |
Ending balance | $ 15,802 | $ 10,226 |
ALLOWANCE FOR DOUBTFUL ACCOUN_3
ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 27, 2020 | Mar. 29, 2019 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Allowance, beginning of period | $ 71 | $ 85 |
Increase in provision for doubtful accounts | 48 | (39) |
Write-offs | 0 | (7) |
Allowance, end of period | $ 119 | $ 39 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Mar. 27, 2020 | Sep. 30, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 28,644 | $ 25,393 |
Work-in-process | 13,308 | 15,928 |
Finished goods | 3,101 | 2,946 |
Total inventories | $ 45,053 | $ 44,267 |
PROPERTY, PLANT & EQUIPMENT - S
PROPERTY, PLANT & EQUIPMENT - Summary of Fixed Assets (Details) - USD ($) $ in Thousands | Mar. 27, 2020 | Sep. 30, 2019 |
Property, Plant and Equipment [Abstract] | ||
Land and improvements | $ 788 | $ 788 |
Buildings and improvements | 7,430 | 7,411 |
Building under capital lease | 7,750 | 7,750 |
Machinery and equipment | 32,869 | 31,708 |
Furniture and fixtures | 8,290 | 8,047 |
Capitalized Computer Software, Gross | 5,215 | 5,215 |
Construction in progress | 1,087 | 1,173 |
Total property, plant and equipment, at cost | 63,429 | 62,092 |
Accumulated depreciation | (44,197) | (42,659) |
Property, plant and equipment, net | $ 19,232 | $ 19,433 |
PROPERTY, PLANT & EQUIPMENT - D
PROPERTY, PLANT & EQUIPMENT - Depreciation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 27, 2020 | Mar. 29, 2019 | Mar. 27, 2020 | Mar. 29, 2019 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 795 | $ 646 | $ 1,552 | $ 1,301 |
CREDIT FACILITIES - Summary of
CREDIT FACILITIES - Summary of Borrowings (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 27, 2020 | Sep. 30, 2019 | |
Total debt, gross | $ 29,553 | $ 30,281 |
Long-term Debt, Gross | 29,782 | 30,550 |
Unamortized Debt Issuance Expense | (229) | (269) |
Less: current portion | (1,371) | (1,371) |
Long-term debt | $ 28,182 | $ 28,910 |
Revolving Credit Facility [Member] | ||
Maturity Date | May 5, 2022 | |
Term Loan B [Member] | ||
Fixed/Variable Rate | Variable Interest Rate | |
Maturity Date | May 5, 2022 | |
Interest Rate | 4.08% | 4.59% |
Equipment Line Advances [Member] | ||
Fixed/Variable Rate | Variable Interest Rate | |
Equipment Line Advances Term Note [Member] | ||
Fixed/Variable Rate | Variable Interest Rate | |
Interest Rate | 3.44% | 4.56% |
Equipment Line Advances Term Note [Member] | ||
Total debt, gross | $ 868 | $ 1,125 |
Term Loan B [Member] | ||
Total debt, gross | $ 2,351 | $ 2,779 |
Revolving Credit Facility [Member] | ||
Fixed/Variable Rate | Variable Interest Rate | |
Maturity Date | May 5, 2022 | |
Interest Rate | 3.25% | 4.31% |
Total debt, gross | $ 26,600 | $ 26,646 |
CREDIT FACILITIES - Narrative (
CREDIT FACILITIES - Narrative (Details) - USD ($) | May 06, 2019 | Mar. 18, 2019 | Sep. 27, 2018 | Jul. 26, 2018 | Jan. 31, 2013 | Mar. 27, 2020 | Mar. 29, 2019 | Mar. 27, 2020 | Mar. 29, 2019 | Sep. 30, 2019 | Jan. 18, 2013 |
Line of Credit Facility [Line Items] | |||||||||||
Maximum borrowing capacity | $ 35,000,000 | $ 35,000,000 | |||||||||
Advances from revolving credit facility | 36,680,000 | $ 39,307,000 | |||||||||
Repayments of long-term debt | 29,553,000 | 29,553,000 | $ 30,281,000 | ||||||||
Commitment fee amount | 6,700 | $ 4,500 | 12,500 | $ 12,700 | |||||||
Credit Agreement 2013 [Member] | Term Loan B [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Long-term line of credit | $ 14,000,000 | ||||||||||
Repayment monthly installments | 120 equal monthly installments | ||||||||||
Line of credit facility, periodic payment, principal | $ 117,000 | 71,000 | |||||||||
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid | 600,000 | 600,000 | |||||||||
Face amount | 6,000,000 | 6,000,000 | $ 8,000,000 | ||||||||
Basis spread on variable rate | 2.50% | ||||||||||
Revolving Credit Facility [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Maximum borrowing capacity | 35,000,000 | $ 35,000,000 | |||||||||
Maturity date | May 5, 2022 | ||||||||||
Repayments of long-term debt | $ 26,600,000 | $ 26,600,000 | $ 26,646,000 | ||||||||
Maximum borrowing capacity as percentage of eligible receivables | 85.00% | 85.00% | |||||||||
Maximum borrowing capacity based on eligible inventories | $ 14,000,000 | $ 14,000,000 | |||||||||
Current borrowing capacity | 35,000,000 | 35,000,000 | 35,000,000 | ||||||||
Line of Credit Facility, Remaining Borrowing Capacity | 8,400,000 | $ 8,400,000 | $ 8,400,000 | ||||||||
Line of Credit Facility, Average Outstanding Amount | 25,100,000 | $ 18,400,000 | |||||||||
Revolving Credit Facility [Member] | Minimum [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Unused capacity, commitment fee percentage | 0.25% | ||||||||||
Revolving Credit Facility [Member] | Maximum [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Unused capacity, commitment fee percentage | 0.375% | ||||||||||
Revolving Credit Facility [Member] | Credit Agreement 2013 [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Average borrowing capacity | $ 27,000,000 | $ 27,000,000 | |||||||||
Basis spread on variable rate | 2.25% | ||||||||||
Line of Credit Facility, Covenant, Minimum Fixed Charge Coverage Ratio | 1.10 | 1.10 | |||||||||
Equipment Line Advances [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Maximum borrowing capacity | $ 1,500,000 | $ 1,500,000 | |||||||||
Equipment Line Advances Term Note [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt Conversion, Converted Instrument, Amount | $ 400,000 | $ 300,000 | $ 100,000 | $ 800,000 | |||||||
Debt instrument, periodic payment, principal | $ 11,000 | $ 9,000 | $ 2,000 | $ 21,000 | |||||||
Term Loan B [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Maturity date | May 5, 2022 |
CREDIT FACILITIES - Long-term D
CREDIT FACILITIES - Long-term Debt Maturities (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Mar. 27, 2020 | Sep. 30, 2019 | ||
Debt Instrument [Line Items] | |||
2021 | $ 1,371 | ||
2022 | [1] | 1,190 | |
2023 | 27,221 | ||
Total debt, net | $ 29,782 | $ 30,550 | |
Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Maturity date | May 5, 2022 | ||
[1] | Includes Revolver balance of $26.6 million at March 27, 2020. |
WARRANTY RESERVES (Details)
WARRANTY RESERVES (Details) - SEC Schedule, 12-09, Reserve, Warranty [Member] - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 27, 2020 | Mar. 29, 2019 | |
Warranty Reserve | ||
Reserve, beginning of period | $ 165 | $ 173 |
Provision | 27 | 27 |
Warranty costs | (50) | (56) |
Reserve, end of period | $ 142 | $ 144 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 27, 2020 | Mar. 29, 2019 | Mar. 27, 2020 | Mar. 29, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares available for issuance (in shares) | 83,252 | 83,252 | ||
Number of options granted (in shares) | 30,000 | 10,000 | ||
Compensation expense | $ 337 | $ 298 | ||
Director [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 3 years | |||
Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 4 years | |||
Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 5 years | |||
Employee Stock Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 4 years | |||
2010 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Maximum number of common shares that may be issued (in shares) | 840,360 | 840,360 | ||
Common shares, issuance term | 10 years | |||
Allocated share-based compensation expense | $ 200 | $ 200 | $ 300 | $ 300 |
Shares available for issuance (in shares) | 621,369 | 621,369 | ||
2010 Plan [Member] | Employee Stock Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award expiration period | 7 years |
STOCK-BASED COMPENSATION - Valu
STOCK-BASED COMPENSATION - Valuation Assumptions (Details) - $ / shares | 6 Months Ended | |
Mar. 27, 2020 | Mar. 29, 2019 | |
Value of options granted: | ||
Number of options granted (in shares) | 30,000 | 10,000 |
Weighted average fair value per share (in dollars per share) | $ 2.68 | $ 2.40 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Minimum | 0.51% | 2.85% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term, Simplified Method | 5.5 | 5.5 |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 5.03 | $ 6.20 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate | 40.00% | 37.00% |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |
Mar. 27, 2020 | Mar. 29, 2019 | |
Number of Options | ||
Outstanding, beginning of period (in shares) | 743,145 | 737,145 |
Granted (in shares) | 30,000 | 10,000 |
Exercised (in shares) | (26,000) | (26,500) |
Forfeited (in shares) | (10,000) | (24,250) |
Expired (in shares) | (5,000) | (5,000) |
Outstanding, end of period (in shares) | 732,145 | 691,395 |
Wgtd. Avg. Exercise Price | ||
Outstanding, beginning of period (in dollars per share) | $ 4.54 | $ 4.33 |
Granted (in dollars per share) | 5.03 | 6.20 |
Exercised (in dollars per share) | 5.31 | 4.71 |
Forfeited (in dollars per share) | 3.58 | 3.70 |
Expired (in dollars per share) | 6.91 | 4.08 |
Outstanding, end of period (in dollars per share) | $ 4.53 | $ 4.36 |
For options expected to vest | ||
Number expected to vest (in shares) | 722,582 | 683,135 |
Number expected to vest (in dollars per share) | $ 4.51 | $ 4.35 |
Weighted average remaining term, in years | 3 years 3 months 18 days | 3 years 7 months 6 days |
Intrinsic value (000s) | $ 1,510 | $ 1,706 |
For exercisable options | ||
Number exercisable (in shares) | 545,645 | 510,895 |
Number exercisable (in dollars per share) | $ 4.16 | $ 4.18 |
Weighted average remaining term, in years | 1 year 10 months 24 days | 2 years 10 months 24 days |
Intrinsic value (000s) | $ 1,354 | $ 1,365 |
For non-exercisable options | ||
Expense not yet recognized (000s) | $ 357 | $ 230 |
Weighted average years to be recognized | 3 years 1 month 6 days | 3 years 3 months 18 days |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 75 | $ 57 |
STOCK-BASED COMPENSATION - Chan
STOCK-BASED COMPENSATION - Changes in Non-Vested Options Outstanding (Details) - $ / shares | 6 Months Ended | |
Mar. 27, 2020 | Mar. 29, 2019 | |
Number of Options | ||
Granted (in shares) | 30,000 | 10,000 |
Wgtd. Avg. Grant Date Fair Value | ||
Granted (in dollars per share) | $ 2.68 | $ 2.40 |
STOCK-BASED COMPENSATION - Su_2
STOCK-BASED COMPENSATION - Summary of Restricted Stock Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |
Mar. 27, 2020 | Mar. 29, 2019 | |
Number of Non-vested Shares [Roll Forward] | ||
Vested (in shares) | (36,812) | |
Wgtd. Avg. Grant Date Fair Value [Roll Forward] | ||
Granted (in dollars per share) | $ 5.03 | |
Restricted Stock [Member] | ||
Number of Non-vested Shares [Roll Forward] | ||
Outstanding, beginning of period (in shares) | 82,707 | 103,233 |
Granted (in shares) | 24,850 | 15,000 |
Vested (in shares) | (46,136) | |
Forfeited (in shares) | (13,250) | (1,400) |
Outstanding, end of period (in shares) | 57,495 | 70,697 |
Wgtd. Avg. Grant Date Fair Value [Roll Forward] | ||
Outstanding, beginning of period (in dollars per share) | $ 5.25 | $ 4.08 |
Granted (in dollars per share) | 6.97 | |
Vested (in dollars per share) | 4.43 | 4.09 |
Forfeited (in dollars per share) | 6.09 | 4.13 |
Outstanding, end of period (in dollars per share) | $ 5.49 | $ 4.72 |
For non-vested shares | ||
Expense not yet recognized (000s) | $ 286 | $ 291 |
Weighted average remaining years for vesting | 1 year 10 months 24 days | 2 years 1 month 6 days |
For shares vested | ||
Aggregate fair value on vesting dates (000s) | $ 260 | $ 311 |
STOCK-BASED COMPENSATION STOCK-
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - Schedule of Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |||
Mar. 27, 2020 | Mar. 29, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | 30,000 | 10,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 5.03 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | (36,812) | |||
Restricted Stock Units (RSUs) [Member] | Vested [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 186,727 | 170,492 | 153,186 | 170,492 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 6.56 | $ 3.96 | $ 5.36 | $ 3.96 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 50,556 | 0 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 9.19 | $ 0 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | (17,015) | 0 | ||
Vested (in dollars per share) | $ 3.58 | $ 0 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ 0 | $ 0 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | 0 | 0 | ||
Restricted Stock Units (RSUs) [Member] | Non-vested [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expense not yet recognized (000s) | $ 906 | $ 282 | ||
Weighted average remaining years for vesting | 2 years 2 months 12 days | 1 year 10 months 24 days |
INCOME TAXES - Tax Provision_Be
INCOME TAXES - Tax Provision/Benefit (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 27, 2020 | Mar. 29, 2019 | Mar. 27, 2020 | Mar. 29, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 367 | $ 203 | $ 703 | $ 515 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) | 3 Months Ended |
Mar. 27, 2020 | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% |
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent | 1.58% |
MARKET SECTORS AND MAJOR CUST_3
MARKET SECTORS AND MAJOR CUSTOMERS - Summary of Sales (Details) - Sales Revenue, Segment [Member] | 3 Months Ended | 6 Months Ended | ||
Mar. 27, 2020 | Mar. 29, 2019 | Mar. 27, 2020 | Mar. 29, 2019 | |
Concentration Risk [Line Items] | ||||
Percentage of sales revenue | 100.00% | 100.00% | 100.00% | 100.00% |
Aerospace & Defense | ||||
Concentration Risk [Line Items] | ||||
Percentage of sales revenue | 60.00% | 62.00% | 61.00% | 57.00% |
Medical | ||||
Concentration Risk [Line Items] | ||||
Percentage of sales revenue | 24.00% | 19.00% | 24.00% | 23.00% |
Industrial | ||||
Concentration Risk [Line Items] | ||||
Percentage of sales revenue | 16.00% | 19.00% | 15.00% | 20.00% |
MARKET SECTORS AND MAJOR CUST_4
MARKET SECTORS AND MAJOR CUSTOMERS - Narrative (Details) - customer | 3 Months Ended | 6 Months Ended | ||
Mar. 27, 2020 | Mar. 29, 2019 | Mar. 27, 2020 | Mar. 29, 2019 | |
Concentration Risk [Line Items] | ||||
Concentration risk, number of customers | 4 | 1 | ||
Sales [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, number of customers | 3 | |||
Sales [Member] | Aerospace and Defense [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, number of customers | 3 | 2 | ||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, number of customers | 2 | |||
Concentration risk, percentage | 30.00% | 38.00% | ||
Customer Number One [Member] | Sales [Member] | Aerospace and Defense [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 25.00% | 26.00% | ||
Customer Number One [Member] | Customer Concentration Risk [Member] | Sales [Member] | Aerospace and Defense [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 22.00% | 21.00% | ||
Customer Number Two [Member] | Sales [Member] | Aerospace and Defense [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 12.00% | 11.00% | ||
Customer Number Two [Member] | Customer Concentration Risk [Member] | Sales [Member] | Medical | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 11.00% | |||
Customer Number Three [Member] | Sales [Member] | Aerospace and Defense [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 11.00% | |||
Customer Number Three [Member] | Sales [Member] | Medical | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 16.00% | |||
Customer Number Two [Member] | Sales [Member] | Medical | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 17.00% |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Thousands | Mar. 27, 2020 | Sep. 30, 2019 |
Leases [Abstract] | ||
Lessee, Operating Lease, Term of Contract | 5 years | |
Value of assets acquired under the lease | $ 7,750 | $ 7,750 |
LEASES - Supplemental Balance S
LEASES - Supplemental Balance Sheet Information Related To Operating Leases (Details) - USD ($) $ in Thousands | Mar. 27, 2020 | Oct. 01, 2019 | Sep. 30, 2019 |
Leases [Abstract] | |||
Operating lease right-of-use assets, net of accumulated amortization | $ 300 | ||
Operating lease liabilities, current | $ 59 | $ 0 | |
Operating lease liabilities, non-current | $ 215 | $ 0 | |
Weighted average remaining lease term for operating leases (in years) | 4 years 2 months 12 days | ||
Weighted average discount rate for operating leases (percent) | 5.47% |
LEASES - Components of Operatin
LEASES - Components of Operating Lease Expense and Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Mar. 27, 2020 | Mar. 27, 2020 | Mar. 29, 2019 | |
Leases [Abstract] | |||
Operating Lease, Expense | $ 15 | $ 29 | |
Finance Lease, Right-of-Use Asset, Amortization | 144 | 273 | |
Cash paid for amounts included in the measurement of lease liabilities: | 68 | 93 | |
Cash paid for operating lease ROU assets | 47 | ||
ROU assets obtained in exchange for new finance lease liabilities | 415 | $ 0 | |
Finance Lease, Interest Expense | $ 88 | $ 174 |
LEASES - Summary of Operating L
LEASES - Summary of Operating Lease Payments for Next Five Years (Details) - USD ($) $ in Thousands | Mar. 27, 2020 | Oct. 01, 2019 |
Twelve months ending March | ||
2020 | $ 77 | |
2021 | 73 | |
2022 | 72 | |
2023 | 72 | |
2025 and thereafter | 18 | |
Total operating lease payments | 312 | |
Less: amounts representing interest | (38) | |
Total operating lease obligation | $ 274 | $ 300 |
LEASES - Summary of Future Mini
LEASES - Summary of Future Minimum Payments on Capital Leases (Details) $ in Thousands | Mar. 27, 2020USD ($) |
Leases [Abstract] | |
2020 | $ 760 |
2021 | 774 |
2022 | 788 |
2023 | 802 |
2024 and thereafter | 6,481 |
Total finance lease payments | 9,605 |
Less: amounts representing interest | (2,349) |
Total finance lease obligation | $ 7,256 |
NET INCOME PER SHARE Earnings P
NET INCOME PER SHARE Earnings Per Share - Summary of Shares Used in EPS Calculation (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Mar. 27, 2020USD ($)$ / sharesshares | Dec. 27, 2019USD ($) | Mar. 29, 2019USD ($)$ / sharesshares | Dec. 28, 2018USD ($) | Mar. 27, 2020USD ($)$ / sharesshares | Mar. 29, 2019USD ($)$ / sharesshares | |
Earnings Per Share [Abstract] | ||||||
Common stock, number of classes | 2 | 2 | ||||
Basic net income per share: | ||||||
Net income | $ | $ 1,523 | $ 1,189 | $ 670 | $ 1,072 | $ 2,712 | $ 1,742 |
Less: Income attributable to non-vested shares | $ | 8 | 4 | 15 | 9 | ||
Net income available to common stockholders | $ | $ 1,515 | $ 666 | $ 2,697 | $ 1,733 | ||
Basic (in shares) | 10,393,461 | 10,286,876 | 10,379,846 | 10,274,772 | ||
Basic net income (loss) per share (in usd per share) | $ / shares | $ 0.15 | $ 0.06 | $ 0.26 | $ 0.17 | ||
Diluted net income per share: | ||||||
Net income | $ | $ 670 | $ 2,712 | $ 1,742 | |||
Shares used in computing basic net income (loss) per share(in shares) | 10,393,461 | 10,286,876 | 10,379,846 | 10,274,772 | ||
Dilutive effect of non-vested shares | 309,651 | 391,182 | 286,155 | 299,304 | ||
Shares used in computing diluted net income per share | 10,703,112 | 10,678,058 | 10,666,001 | 10,574,076 | ||
Diluted net income (loss) per share (in usd per share) | $ / shares | $ 0.14 | $ 0.06 | $ 0.25 | $ 0.16 | ||
Anti-dilutive shares excluded (in shares) | 0 | 0 | 0 | 19,583 |
Uncategorized Items - iec-20200
Label | Element | Value |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 441,000 |