UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange -
- -
Act of 1934
For the quarterly period ended March 30, 2001
Commission file Number 0-6508
IEC ELECTRONICS CORP.
-----------------------------------------------------
(Exact name of registrant as specified in its charter.)
Delaware 13-3458955
----------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
105 Norton Street, Newark, New York 14513
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices (Zip Code)
(315) 331-7742
- --------------------------------------------------------------------------------
Registrant's telephone number, including area code:
Indicate by check mark whether the registrant(1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date:
Common Stock, $0.01 Par Value - 7,659,230 shares as of April 27, 2001.
Page 1 of 15
PART 1 FINANCIAL INFORMATION
Page
Number
Item 1. Financial Statements
Consolidated Balance Sheets as of :
March 30, 2001 (Unaudited) and September 30, 2000............. 3
Consolidated Statements of Operations for the three months
ended: March 30, 2001 (Unaudited) and March 31, 2000
(Unaudited)................................................... 4
Consolidated Statements of Operations for the six months ended:
March 30, 2001 (Unaudited) and March 31, 2000 (Unaudited)..... 5
Consolidated Statement of Cash Flows for the six months ended:
March 30, 2001 (Unaudited) and March 31, 2000 (Unaudited)..... 6
Notes to Consolidated Financial Statements (Unaudited)........ 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.................... 11
PART II
Item 1. Legal Proceedings.............................................. 14
Item 2. Changes in Securities.......................................... 14
Item 3. Defaults Upon Senior Securities................................ 14
Item 4. Submission of Matters to a Vote of Security Holders............ 14
Item 5. Other Information.............................................. 14
Item 6. Exhibits and Reports on Form 8-K............................... 14
Signature ............................................................. 15
Page 2 of 15
IEC ELECTRONICS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 30, 2001 AND SEPTEMBER 30, 2000
(in thousands, except for share data)
MARCH 30,2001 SEPTEMBER 30,2000
---------------- ------------------
ASSETS (Unaudited)
Current Assets:
Accounts receivable $ 26,226 $ 27,915
Inventories 37,151 36,157
Other current assets 480 75
--------- ----------
Total current assets 63,857 64,147
--------- ----------
Property, Plant and Equipment, net 14,484 15,225
---------- ----------
Other Assets:
Cost in excess of net assets acquired, net 9,643 9,820
Other assets 236 300
----------- ----------
Total other assets 9,879 10,120
----------- ----------
$ 88,220 $ 89,492
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $ 2,105 $ 2,105
Accounts payable 28,210 25,295
Accrued payroll and related expenses 3,003 2,572
Accrued income taxes 99 -
Accrued insurance 1,218 1,583
Other accrued expenses 2,264 1,663
-------- -------
Total current liabilities 36,899 33,218
-------- -------
Long-Term Debt 12,793 15,266
-------- -------
Shareholders' Equity:
Preferred stock, par value $.01 per share
Authorized - 500,000 shares
Outstanding - 0 shares - -
Common stock, par value $.01 per share
Authorized - 50,000,000 shares
Outstanding - 7,632,621 shares and
7,626,565 shares, respectively 76 76
Additional paid-in capital 38,341 38,332
Retained earnings 128 2,611
Accumulated other comprehensive income -
Cumulative translation adjustment (6) -
Treasury stock, at cost - 573 shares (11) (11)
--------- ---------
Total shareholders' equity 38,528 41,008
--------- ---------
$ 88,220 $ 89,492
========= =========
<FN>
The accompanying notes to unaudited consolidated financial statements
are an integral part of these balance sheets
</FN>
Page 3 of 15
IEC ELECTRONICS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 30, 2001 AND MARCH 31, 2000
(in thousands, except share data)
3 MONTHS ENDED 3 MONTHS ENDED
MARCH 30, 2001 MARCH 31, 2000
-------------- ------------------
(Unaudited) (Unaudited)
Net sales $45,592 $64,338
Cost of sales 43,121 61,971
------- -------
Gross profit 2,471 2,367
Selling and administrative expenses 2,902 3,281
Reversal of restructuring charges - (857)
------- -------
Operating loss (431) (57)
Interest expense (433) (553)
Other income(expense), net 6 (1)
------- -------
Loss before provision for (benefit
from) income taxes (858) (611)
Income tax expense, (benefit) 99 (5)
------- -------
Net loss
$ (957) $ (606)
======= =======
Net loss per common and common equivalent share:
Basic and Diluted $ (0.13) $ (0.08)
Weighted average number of common and common equivalent shares outstanding:
Basic and Diluted 7,631,345 7,581,720
<FN>
The accompanying notes to unaudited consolidated financial statements
are an integral part of these financial statements.
</FN>
Page 4 of 15
IEC ELECTRONICS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 30, 2001 AND MARCH 31, 2000
(in thousands, except share data)
6 MONTHS ENDED 6 MONTHS ENDED
MARCH 30, 2001 MARCH 31, 2000
-------------- ------------------
(Unaudited) (Unaudited)
Net sales $105,248 $108,108
Cost of sales 101,007 105,712
------- --------
Gross profit 4,241 2,396
Selling and administrative expenses 5,716 6,188
Reversal of restructuring charges - (857)
------- --------
Operating loss (1,475) (2,935)
Interest expense (938) (914)
Life insurance proceeds - 2,000
Other income, net 29 14
------- --------
Loss before provision for (benefit
from) income taxes (2,384) (1,835)
Income tax expense, (benefit) 99 (5)
------- --------
Net loss $ (2,483) $ (1,830)
======= ========
Net loss per common and equivalent share:
Basic and Diluted $ (0.33) $ (0.24)
Weighted average number of common and common equivalent shares outstanding:
Basic and Diluted 7,629,811 7,581,720
<FN>
The accompanying notes to unaudited consolidated financial statements
are an integral part of these financial statements.
</FN>
Page 5 of 15
IEC ELECTRONICS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED MARCH 30, 2001 AND MARCH 31, 2000
(in thousands)
6 MONTHS 6 MONTHS
ENDED ENDED
MARCH 30, MARCH 31,
2001 2000
----------- -----------
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(2,483) $ (1,830)
Adjustments to reconcile net loss
to net cash (used in)provided by operating activities:
Depreciation and amortization 2,800 3,795
Gain on sale of fixed assets (23) -
Amortization of cost in excess of net assets acquired 177 177
Common stock issued under Directors Stock Plan 9 11
Changes in operating assets and liabilities:
(Increase) decrease
Accounts receivable 1,689 (13,667)
Inventories (994) (6,341)
Income taxes receivable - 2,966
Other current assets (405) (17)
Other assets 65 (294)
Increase (Decrease)
Accounts payable 3,915 7,869
Accrued payroll and related expenses 431 (1,122)
Accrued income taxes 99 -
Accrued insurance (7) 608
Other accrued expenses 243 344
------- --------
Net cash provided by (used in)operating activities 5,516 (7,501)
------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (2,020) (529)
Proceeds from sale of equipment 23 1,134
Utilization of restructuring provision
for building/equipment (40) -
-------- --------
Net cash (used in) provided by investing activities (2,037) 604
-------- --------
Cash Flows from Financing Activities:
Net decrease in drafts payable (1,000) -
Borrowings under line of credit agreements - 80,705
Repayments under line of credit agreements (1,420) (77,743)
Principal payments on long-term debt (1,053) -
-------- ---------
Net cash (used in) provided by financing activities (3,473) 2,962
-------- ---------
Net increase (decrease) in cash and cash equivalents 6 (3,935)
Effect of exchange rate changes (6) (72)
Cash and cash equivalents at beginning of period - 4,007
-------- ---------
Cash and cash equivalents at end of period $ - $ -
======== =========
Supplemental Disclosures of Cash Flow Information:
Cash paid(received)during the period for:
Interest $ 885 $ 914
======== =========
Income taxes $ - $ (2,954)
======== =========
Supplemental Disclosures of Noncash Information:
During the six months ended March 31, 2000, the Company issued shares of its
common stock in the amount $102 in the settlement of an accrued
liability.
<FN>
The accompanying notes to unaudited consolidated financial statements
are an integral part of these financial statements.
</FN>
Page 6 of 15
IEC ELECTRONICS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 30, 2001
(1) Business and Summary of Significant Accounting Policies
Business
- --------
IEC Electronics Corp. (IEC) is an independent contract manufacturer of complex
printed circuit board assemblies and electronic products and systems. IEC offers
its customers a wide range of manufacturing and management services, on either a
turnkey or consignment basis, including material procurement and control,
manufacturing and test engineering support, statistical quality assurance and
complete resource management.
Consolidation
- -------------
The consolidated financial statements include the accounts of IEC and its
wholly-owned subsidiaries, IEC Electronicos de Mexico and IEC Electronics-
Ireland Limited (collectively, the "Company"). In December 1999, the Company
closed its underutilized Ireland operations and transferred some of the
customers served there to its other operations in New York and Texas. All
significant intercompany transactions and accounts have been eliminated.
Revenue Recognition
- -------------------
The Company recognizes revenue upon shipment of product for both turnkey and
consignment contracts.
In December 1999, the United States Securities and Exchange Commission
("SEC")issued Staff Accounting Bulletin 101,"Revenues Recognition in Financial
Statements" subsequently updated by SAB 101A and SAB 101B ("SAB 101"). SAB 101
summarizes certain of the SEC's views in applying generally accepted accounting
principles to revenue recognition in financial statements. The Company is
required to adopt SAB 101 as of the beginning of the fourth quarter of fiscal
2001. Management does not expect a material impact on the results of operations
from the implementation of SAB 101.
Accounts Payable
- ----------------
Trade accounts payable include drafts payable of $3.4 million and $4.4 million
at March 30, 2001 and September 30, 2000, respectively.
Cash and Cash Equivalents
- -------------------------
Cash and cash equivalents include highly liquid investments with original
maturities of three months or less. The Company's cash and cash equivalents are
held and managed by institutions which follow the Company's investment policy.
The fair value of the Company's financial instruments approximates carrying
amounts due to the relatively short maturities and variable interest rates of
the instruments, which approximate current market interest rates.
Inventories
- -----------
Inventories are stated at the lower of cost (first-in, first-out) or market. The
major classifications of inventories are as follows at period end (in
thousands):
March 30, 2001 September 30, 2000
---------------- ----------------
(Unaudited)
Raw materials $27,661 $23,331
Work-in-process 7,824 8,418
Finished goods 1,666 4,408
---------------- ----------------
$37,151 $36,157
================ ================
Foreign Currency Translation
- ----------------------------
The assets and liabilities of the Company's foreign subsidiaries are translated
based on the current exchange rate at the end of the period for the balance
sheet and a weighted-average rate for the period of the consolidated statement
of operations. Translation adjustments are recorded as a separate component of
equity. Transaction gains or losses are included in operations.
Page 7 of 15
IEC ELECTRONICS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 30, 2001
Unaudited Financial Statements
- ------------------------------
The accompanying unaudited financial statements as of March 30, 2001, and for
the three and six months ended March 30, 2001 have been prepared in accordance
with generally accepted accounting principles for the interim financia1
information. In the opinion of management, all adjustments considered necessary
for a fair presentation, which consist solely of normal recurring adjustments
have been included. The accompanying financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Company's September 30, 2000 Annual Report on Form 10-K.
Net Loss per Common and Common Equivalent Share
- ------------------------------------------------
(in thousands, except for share and per share data)
(Loss) Shares Per Share
Three Months Ended (Numerator) (Denominator) Amount
- -------------------------------------------------------------------------------
March 30, 2001
Basic EPS
Loss available to common Shareholders $ (957) 7,631,345 $(0.13)
====================================
March 31, 2000
Basic EPS
Loss available to common Shareholders $ (606) 7,581,720 $(0.08)
====================================
(Loss) Shares Per Share
Six Months Ended (Numerator) (Denominator) Amount
- -------------------------------------------------------------------------------
March 30, 2001
Basic EPS
Loss available to common Shareholders $(2,483) 7,629,811 $(0.33)
====================================
March 31, 2000
Basic EPS
Loss available to common Shareholders $(1,830) 7,581,720 $(0.24)
====================================
Basic EPS was computed by dividing reported earnings available to common
shareholders by weighted-average common shares outstanding during the three and
six month periods. No reconciliation is provided as the effect would be
antidilutive.
Page 8 of 15
IEC ELECTRONICS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 30, 2001
(2) Comprehensive Income
--------------------
The Company adopted Statement of Financial Accounting Standards No. 130,
"Reporting Comprehensive Income"(SFAS No. 130)on October 1, 1998. SFAS No. 130
requires comprehensive income and its components to be presented in the
financial statements. Comprehensive income, which includes net (loss) income
and foreign currency translation adjustments, was as follows for the three
and six months ended March 30, 2001 and March 31, 2000.(in thousands):
3 MONTHS 3 MONTHS
ENDED ENDED
March 30, March 31,
2001 2000
---------- -----------
(Unaudited) (Unaudited)
Net loss $ (957) $ (606)
Other comprehensive income:
Foreign currency translation adjustments (6) (283)
---------- -----------
Comprehensive loss $ (963) $ (889)
========== ===========
6 MONTHS 6 MONTHS
ENDED ENDED
March 30, March 31,
2001 2000
---------- -----------
(Unaudited) (Unaudited)
Net loss $ (2,483) $ (1,830)
Other comprehensive income:
Foreign currency translation adjustments (6) (7)
---------- -----------
Comprehensive loss $ (2,489) $ (1,837)
========== ===========
(3) Financing Arrangements
----------------------
On December 28, 1999, the Company entered into a three-year secured asset-based
facility for $35.0 million. The credit facility as amended on March 30, 2000,
December 1, 2000, and April 24, 2001, consists of two components, the first a
$25.0 million revolving credit facility based on eligibility criteria for
receivables and inventory. Amounts borrowed are limited to 85 percent of
qualified accounts receivable, 20 percent of raw materials, and 30 percent of
finished goods inventory, respectively. The second component consists of a $10
million three-year term loan with monthly principal installments based on a
five-year amortization which began in April 2000. At March 30, 2001, $14.9
million was outstanding consisting of $7.0 million and $7.9 million relating to
the revolving credit facility and term loan, respectively, with $14.4 million
available under the revolving credit facility.
Interest on this revolving credit facility is determined at the Company's option
on a LIBOR or prime rate basis, plus a margin. A facility fee is paid on the
unused portion of the facility.
The credit facility contains specific affirmative and negative covenants,
including, among others, the maintenance of certain financial covenants, as well
as limitations on amounts available under the lines of credit relating to
the borrowing base, capital expenditures, lease payments and additional debt.
The more restrictive of the covenants require the Company to maintain a minimum
tangible net worth, minimum net income after taxes, maximum debt-to-tangible
worth ratio, and minimum cash flow coverage. As of the date of this filing, the
Company is in compliance with these debt covenants.
(4) Life Insurance Proceeds
-----------------------
The Company's then President and Chief Executive Officer died suddenly on
December 11, 1999. In the first quarter of fiscal 2000, the Company received
non-taxable income from insurance proceeds of approximately $2.0 million.
Page 9 of 15
IEC ELECTRONICS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 30, 2001
(5) Litigation
-----------
The Company is subject to legal proceedings and claims which arise in the
ordinary course of its business. Although occasional adverse decisions (or
settlements) may occur, the Company believes that the final disposition of such
matters will not have a material adverse effect on the financial position or
results of operations of the Company.
(6) Longford Operations
-------------------
In February 2000, a third party purchased from the Company certain assets of
Longford and assumed the lease of the Longford facility. This resulted in a
benefit of $857 thousand from the reversal of a previously established
restructuring reserve.
(7) IEC Electronicos de Mexico
--------------------------
In December 1998, the Company entered into a Shelter Services Agreement with a
Texas Limited Partnership and its Mexican corporate subsidiary which leased
50,000 square feet in a newly constructed industrial park in Reynosa, Mexico.
This Maquiladora facility thereafter commenced manufacturing printed circuit
board assemblies and wire harnesses and began shipping in April 1999 as
IEC Electronicos de Mexico.
Effective February 1, 2001, the Company terminated the Shelter Services
Agreement and exercised its option to acquire the Mexican subsidiary of the
Texas Limited Partnership for one U.S. dollar ($1.00). On March 28, 2001, the
subsidiary, now wholly owned by the Company, executed a new five-year lease
agreement with a five-year renewal option combining the original 50,000 square
feet with an additional 62,000 square feet at the Reynosa facility. Effective
May 1, 2001, the Mexican subsidiary, IEC Electronicos de Mexico, S. De R.L.
De C.V. will occupy the entire 112,000 square foot facility.
During the second fiscal quarter, the Company accrued income tax expense of
$99,000 related solely to payment of Mexican Maquiladora taxes calculated based
on assets and operating expenses.
Page 10 of 15
Management's Discussion and Analysis of Financial Condition and Results
- ------------------------------------------------------------------------
of Operations
- ------------------------------------
Results of Operations - Three Months Ended March 30, 2001, Compared to the
- --------------------------------------------------------------------------
Three Months Ended March 31, 2000.
- ----------------------------------
Net sales for the three month period ended March 30, 2001, were $45.6
million, compared to $64.3 million for the comparable period of the prior year,
a decrease of 29.1 percent. The decrease in sales is primarily due to the
overall softening in the telecommunications sector and the slowdown in capital
spending by product end-users that adversely affected the Company's significant
customers. Turnkey sales were 95.9 percent of net sales in the quarter as
compared to 96.7 percent for the comparable period of the prior year.
Gross profit was $2.5 million or 5.4 percent of sales for the three month period
ended March 30, 2001, versus $2.4 million or 3.7 percent of sales in the
comparable period of the prior year. The improvement was due to lower labor and
overhead costs as a percent of sales.
Selling and administrative expenses decreased to $2.9 million in the three
months ended March 30, 2001, from $3.3 million in the comparable period of the
prior year. This decrease is primarily due to decreases in office
and other expenses. As a percentage of net sales, selling
and administrative expenses increased to 6.4 percent from 5.1 percent in
comparison to the same quarter of the prior year.
The Company recorded an income tax expense relating to foreign operations in the
amount of $99,000. The Company has recorded no benefit from U.S. income tax as a
result of the net loss, and accordingly, has a full valuation allowance against
its net deferred tax asset including the net operating loss carry-forward.
Net loss for the quarter was $(957) thousand versus $(606) thousand in the
comparable quarter of the prior year. Diluted loss per share was $(0.13)as
compared to diluted loss per share of $(0.08) in the comparable quarter of the
prior year. Excluding the reversal of the previously established
restructuring charge for the closure of the Longford facility of $857 thousand,
the net loss would have been $(1.5) million or $(0.19) per share in second
quarter of the prior year.
Page 11 of 15
Management's Discussion and Analysis of Financial Condition and Results
- ------------------------------------------------------------------------
of Operations
- ------------------------------------
Results of Operations - Six Months Ended March 30, 2001, Compared to Six
- ------------------------------------------------------------------------
Months Ended March 31, 2000.
- ----------------------------
Net sales for the six month period ended March 30, 2001, were $105.2 million,
compared to $108.1 million for the comparable period of the prior year, a
decrease of 3%. Turnkey sales were 95.9 percent of net sales in the six month
period as compared to 96.7 percent for the comparable period of the prior year.
Gross profit was $4.2 million or 4.0 percent of sales for the six month period
ended March 30, 2001 versus $2.4 million or 2.2 percent of sales
in the comparable period of the prior year. The increase was due to lower labor
and overhead costs as a percent of sales.
Selling and administrative expenses decreased to $5.7 million in the six months
ended March 30, 2001, from $6.2 million in the comparable period of the prior
fiscal year. This decrease is primarily due to decreases in office and other
expenses. As a percentage of sales, selling and administrative expenses
decreased to 5.4 percent from 5.7 percent in the same period of the prior year.
The Company recorded an income tax expense relating to foreign operations in the
amount of $99,000. The Company has recorded no benefit from U.S. income tax as a
result of the net loss, and accordingly, has a full valuation allowance against
its net deferred tax asset including the net operating loss carry-forward.
Net loss for the six month period was $(2.5) million versus $(1.8) million in
the comparable period of the prior year. Diluted loss per share was $(0.33) as
compared to diluted loss per share of $(0.24) in the comparable period of the
prior fiscal year. Excluding the reversal of the previously established
restructuring charge for the closure of the Longford facility of $857 thousand,
and the life insurance proceeds of $2.0 million, the net loss would have been
$(4.7) million or $(0.62) per share in the prior period.
Liquidity and Capital Resources
- -------------------------------
Net sales for the month of March 2001 were $19.0 million, representing 41.7
percent of the total net sales for the three month period ending March 30, 2001.
Net sales for the month of March 2000 were $28.4 million, representing 44.2
percent of the total net sales for the three month period ending March 31, 2000.
The Company operates on a fiscal quarter consisting of four weeks in the first
and second months and five weeks in the third month.
On December 28, 1999, the Company entered into a three-year secured asset-based
facility for $35.0 million. The credit facility as amended on March 30, 2000,
December 1, 2000, and April 24, 2001, consists of two components, the first a
$25.0 million revolving credit facility based on eligibility criteria for
receivables and inventory. Amounts borrowed are limited to 85 percent of
qualified accounts receivable, 20 percent of raw materials, and 30 percent of
finished goods inventory, respectively. The second component consists of a
$10 million three-year term loan with monthly principal installments based on a
five-year amortization which began in April 2000. At March 30, 2001,
$14.9 million was outstanding consisting of $7.0 million and $7.9 million
relating to the revolving credit facility and term loan, respectively, with
$14.4 million available under the revolving credit facility.
The Company believes that its funds generated from operations and its existing
credit facilities will be sufficient for the Company to meet its capital
expenditure and working capital needs for its operations as presently conducted.
As part of its overall business strategy, the Company may from time to time
evaluate acquisition opportunities. The funding of these future transactions, if
any, may require the Company to obtain additional sources of financing.
The impact of inflation on the Company's operations has been minimal due to the
fact that it is able to adjust its bids to reflect any inflationary increases in
cost.
Page 12 of 15
Quantitative and Qualitative Disclosures About Market Risk
- ----------------------------------------------------------
Quantitative and Qualitative Disclosures about Market Risk represents the
risk of loss that may impact the consolidated financial position, results of
operations or cash flows of the Company due to adverse changes in financial
rates. The Company is exposed to market risk in the area of interest rates. This
exposure is directly related to its Term Loan and Revolving Credit borrowings
under the Credit Agreement, due to their variable interest rate pricing.
Management believes that interest rate fluctuations will not have a material
impact on the Company's results of operations.
Forward-looking Statements
- --------------------------
Except for historical information, statements in this quarterly report are
forward-looking made pursuant to the safe harbor created by the Private
Securities Litigation Reform Act of 1995 and are therefore subject to certain
risks and uncertainties including timing of orders and shipments, availability
of material, product mix and general market conditions that could cause actual
results to differ materially from those projected in the forward looking
statements. Investors should consider the risks and uncertainties discussed in
the September 30, 2000, Form 10K and its other filings with the Securities and
Exchange Commission.
Restructuring Plan
- ------------------
On April 25, 2001, the Company's Board of Directors approved a
restructuring plan to consolidate its Texas and Mexico business operations
including reducing its cost structure and improving working capital. As part of
the business-restructuring plan, the Company expects to record a one-time charge
to earnings in the range of $3 million to $5 million in the fiscal third quarter
of 2001. The charge relates to headcount reductions and facility consolidations.
This restructuring plan will allow the Company to concentrate its investments,
resources and management attention on lower cost, high volume production at its
Mexico operation.
The restructuring plan is in compliance with revised financial covenants.
Page 13 of 15
PART II. OTHER INFORMATION
Item 1 -- Legal Proceedings
None.
Item 2 -- Changes in Securities
None.
Item 3 -- Defaults Upon Senior Securities
None.
Item 4 -- Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of Stockholders was held on February 28, 2001
(b) The names of the directors elected at the Annual Meeting are as follows:
David J. Beaubien
W. Barry Gilbert
Robert P.B. Kidd
Thomas W. Lovelock
Eben S. Moulton
Dermott O'Flanagan
James C. Rowe
Russell E. Stingel
Justin L. Vigdor
(c)(i) At the Annual Meeting, the tabulation of the votes with respect to
each nominee was as follows:
Nominee Votes FOR Authority Withheld
------- --------- ------------------
David J. Beaubien 6,661,632 26,811
W. Barry Gilbert 6,661,982 26,461
Robert P. B. Kidd 6,653,091 35,652
Thomas W. Lovelock 6,663,730 24,713
Eben S. Moulton 6,662,132 26,311
Dermott O'Flanagan 6,657,491 30,952
James C. Rowe 6,663,732 24,711
Russell E. Stingel 6,654,905 33,538
Justin L. Vigdor 6,653,861 34,552
(c)(ii) At the Annual Meeting, the stockholders also voted upon a proposal
to approve the Company's 2001 Employee Stock Purchase Plan. The tabulation of
votes with respect to such matter are as follows:
Votes Votes Votes Broker
FOR AGAINST OUTSTANDING NON-VOTES
6,590,981 88,527 8,935 0
Item 5 -- Other Information
None.
Item 6 -- Exhibits and Reports on Form 8-K
a. Exhibits
10.1 Lease Agreement dated as of March 21, 2001, between
Matamoros Industrial Partners, L.P. and IEC Electronicos
de Mexico, S. de R.L. de C.V.
10.2 2001 Employee Stock Purchase Plan
10.3 Employment Agreement between IEC Electronics Corp. and
Bill R. Anderson dated as of March 19, 2001.
b. Reports on Form 8-K
None.
Page 14 of 15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
IEC ELECTRONICS CORP.
REGISTRANT
Dated: ______________ /s/Thomas W. Lovelock
-----------------------------
Thomas W. Lovelock
President and Chief Executive Officer
Dated: ______________ /s/Richard L. Weiss
------------------------------
Richard L. Weiss
Vice President and
Chief Financial Officer
Page 15 of 15