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 December 30, 2005

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 by check mark whether the registrant is a large accelerated filer
or a non-accelerated filer. See definition of "accelerated filer and large
accelerated filer" in Rule 12b-2 of the Exchange Act.

Large accelerated filer |_| Accelerated filer |_| Non-Accelerated filer
|X|

Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).

YES |_| NO |X|

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 - 8,303,260 shares as of January 23, 2005.

Page 1 of 13

PART 1 FINANCIAL INFORMATION
Page
Number

Item 1. Financial Statements

Consolidated Balance Sheets as of:
December 30, 2005 (Unaudited) and September 30, 2005......... 3

Consolidated Statements of Operations for the three months
ended: December 30, 2005 (Unaudited) and December 31, 2004
(Unaudited)................................................... 4

Consolidated Statements of Cash Flows for the three months
ended: December 30, 2005 (Unaudited) and December 31, 2004
(Unaudited)................................................... 5

Notes to Consolidated Financial Statements (Unaudited)........ 6

Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.................... 9

Item 3. Quantitative and Qualitative Disclosures about Market Risk....... 11

Item 4. Controls and Procedures.......................................... 11

PART II OTHER INFORMATION

Item 1. Legal Proceedings.............................................. 12

Item 1A.Risk Factors................................................... 12

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.... 12

Item 3. Defaults Upon Senior Securities................................ 12

Item 4. Submission of Matters to a Vote of Security Holders............ 12

Item 5. Other Information.............................................. 12

Item 6. Exhibits ...................................................... 13

Signatures............................................................. 13

Page 2 of 13

Part 1. Financial Information
Item 1 -- Financial Statements

IEC ELECTRONICS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETSDECEMBER 30, 2005 AND SEPTEMBER 30, 2005
(in thousands)

DECEMBER 30, SEPTEMBER 30,
2005 2005
------------ ------------

ASSETS (Unaudited)
CURRENT ASSETS:
Cash $ -- $ 461
Accounts receivable (net of allowance for 2,476 2,344
Doubtful accounts of $41 and $35 respectively)
Inventories 2,160 630
Deferred income taxes 250 250
Other current assets 190 279
------------ ------------
Total current assets 5,076 3,964
------------ ------------
FIXED ASSETS:
Land and land improvements 707 707
Building and improvements 4,080 4,080
Machinery and equipment 22,830 22,582
Furniture and fixtures 4,138 4,138
------------ ------------
SUB-TOTAL GROSS PROPERTY 31,755 31,507
LESS ACCUMULATED DEPRECIATION (30,226) (30,000)
------------ ------------
1,529 1,507
OTHER NON-CURRENT ASSETS 43 67
------------ ------------
$ 6,648 $ 5,538
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short term borrowings $ 678 $ 345
Accounts payable 2,070 918
Accrued payroll and related expenses 251 264
Other accrued expenses 341 399
------------ ------------
Total current liabilities 3,340 1,926
------------ ------------
LONG TERM VENDOR NOTES 35 57
LONG TERM BANK DEBT 498 535
------------ ------------
TOTAL LIABILITIES 3,873 2,518
------------ ------------
SHAREHOLDERS' EQUITY:
Preferred stock, $.01 par value, Authorized
- 500,000 shares; None issued or outstanding -- --
Common stock, $.01 par value, Authorized
- 50,000,000 shares; Issued - 8,301,710 and
8,292,450 shares, respectively 83 83
Treasury stock, at cost 412,873 and 573
shares, respectively (223) (11)
Additional paid-in capital 38,548 38,533
Accumulated deficit (35,633) (35,585)
------------ ------------
Total shareholders' equity 2,775 3,020
------------ ------------
$ 6,648 $ 5,538
============ ============

The accompanying notes are an integral part of these financial statements.

Page 3 of 13

IEC ELECTRONICS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 30, 2005 AND DECEMBER 31, 2004
(in thousands, except share and per share data)

3 MONTHS ENDED 3 MONTHS ENDED
DECEMBER 30, DECEMBER 31,
2005 2004
------------ ------------
(Unaudited) (Unaudited)

Net sales $ 3,607 $ 6,223
Cost of sales 3,088 5,474
------------ ------------
Gross profit 519 749
------------ ------------
Selling and administrative expenses 483 628
Restructuring charge -- 13
------------ ------------
Operating profit 36 108

Interest and financing expense (84) (98)
Other income -- 72
------------ ------------
Net income before income taxes (48) 82

Provision for income taxes -- --
------------ ------------
Net income (loss) $ (48) $ 82
============ ============

Net income (loss) per common and common equivalent share:

Basic $ (0.01) $ 0.01
Diluted $ (0.01) $ 0.01

Weighted average number of common and common equivalent shares outstanding:

Basic 8,012,849 8,230,497
Diluted 8,012,849 8,512,307

The accompanying notes are an integral part of these financial statements.

Page 4 of 13

IEC ELECTRONICS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED DECEMBER 30, 2005 AND DECEMBER 30, 2004
(in thousands)

3 MONTHS ENDED 3 MONTHS ENDED
DECEMBER 30, DECEMBER 31,
2005 2004
------------ ------------
(Unaudited) (Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ (48) $ 82
Non-cash adjustments:
Compensation Expense - Stock Options 10 --
Depreciation 249 281
Gain on sale of fixed assets -- (72)
Issuance of director's fees in stock 5 6
Changes in operating assets and liabilities:
Accounts receivable (132) 71
Inventories (1,530) 367
Other current assets 89 63
Accounts payable 1,153 (32)
Accrued expenses (71) (29)
------------ ------------
Net cash flows from operating activities (275) 737
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property -- 72
Purchases of plant, property & equipment (248) --
------------ ------------
Net cash flows from investing activities (248) 72
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments under loan agreements (109) (286)
Net borrowings (payments) on line of credit 383 (519)
Proceeds from exercise of stock options -- 4
Purchase of Treasury Stock (212) --
------------ ------------
Net cash flows from financing activities 62 (801)
------------ ------------

Change in cash and cash equivalents (461) 8
Cash and cash equivalents at beginning of period 461 --
------------ ------------
Cash and cash equivalents at end of period $ -- $ 8
============ ============

Supplemental Disclosures of Cash Flow Information:

Cash paid during the period for:
Interest $ 58 $ 78

Income taxes $ -- $ --

The accompanying notes are an integral part of these financial statements.

Page 5 of 13

IEC ELECTRONICS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 30, 2005

(1) Business and Summary of Significant Accounting Policies

IEC Electronics Corp. ("IEC", the "Company") is an independent
electronics manufacturing services ("EMS") provider of complex printed circuit
board assemblies and electronic products and systems. The Company provides high
quality electronics manufacturing services with state-of-the-art manufacturing
capabilities and production capacity. Utilizing automated manufacturing and test
machinery and equipment, IEC provides manufacturing services employing surface
mount technology ("SMT") and pin-through-hole ("PTH") interconnection
technologies. As an independent full-service EMS provider, the Company offers
its customers a wide range of manufacturing services, on either a turnkey or
consignment basis. These services include product development, prototype
assembly, material procurement, volume assembly, test engineering support,
statistical quality assurance, order fulfillment and repair services. The
Company's strategy is to cultivate strong manufacturing relationships with
established and emerging original equipment manufacturers ("OEMs").

Consolidation

The consolidated financial statements include the accounts of IEC and its
wholly-owned subsidiary, IEC Electronicos de Mexico ("Mexico"), (collectively,
"IEC"). Operations in Texas and Mexico were closed in July 2002. All significant
intercompany transactions and accounts have been eliminated.

Revenue Recognition

The Company's net revenue is derived from the sale of electronic products
built to customer specifications. The Company also derives revenue from design
services and repair work. Revenue from sales is generally recognized, net of
estimated product return costs, when goods are shipped; title and risk of
ownership have passed; the price to the buyer is fixed or determinable; and
recovery is reasonably assured. Service related revenues are recognized upon
completion of the services. The Company assumes no significant obligations after
product shipment.

Allowance for Doubtful Accounts

The Company establishes an allowance for uncollectable trade accounts
receivable based on the age of outstanding invoices and management's evaluation
of collectibility of outstanding balances.

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 that 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):

DECEMBER 30, 2005 September 30, 2005
---------------- ----------------
(Unaudited)

Raw materials $ 1,080 $ 432
Work-in-process 726 197
Finished goods 354 1
---------------- ----------------
$ 2,160 $ 630
================ ================

Page 6 of 13

IEC ELECTRONICS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 30, 2005

Unaudited Financial Statements

The accompanying unaudited financial statements as of December 30, 2005,
and for the three months ended December 30, 2005 have been prepared in
accordance with generally accepted accounting principles for 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, 2005 Annual Report on Form 10-K.

Earnings Per Share

Net income per share is computed in accordance with Statement of Financial
Accounting Standards No. 128, "Earnings Per Share". Basic earnings per share is
calculated by dividing income available to common shareholders by the
weighted-average number of common shares outstanding for each period. Diluted
earnings per common share is calculated by adjusting the weighted-average shares
outstanding, assuming conversion of all potentially dilutive stock options.

New Pronouncements

In November 2004, the FASB issued SFAS No. 151 "Inventory Costs" (SFAS
151). This statement amends the guidance in ARB No. 43, Chapter 4, "Inventory
Pricing," to clarify the accounting for abnormal amounts of idle facility
expense, freight, handling costs, and wasted material (spoilage). SFAS 151
requires that those items be recognized as current-period charges. In addition,
this Statement requires that allocation of fixed production overheads to costs
of conversion be based upon the normal capacity of the production facilities.
The provisions of SFAS 151 are effective for inventory cost incurred in fiscal
years beginning after June 15, 2005. As such, the Company is required to adopt
these provisions at the beginning of fiscal 2006. The adoption of SFAS No. 151
did not have a material impact on our financial statements.

On December 16, 2004, the FASB issued SFAS No. 153, "Exchanges of
Nonmonetary Assets, an amendment of APB Opinion No. 29". SFAS No. 153 replaces
the exception from fair value measurement in APB Opinion No. 29 for nonmonetary
exchanges of similar productive assets with a general exception from fair value
measurement for exchanges of nonmonetary assets that do not have commercial
substance. A nonmonetary exchange has commercial substance if the future cash
flows of the entity are expected to change significantly as a result of the
exchange. SFAS No. 153 is to be applied prospectively, and is effective for
nonmonetary asset exchanges occurring in fiscal periods beginning after the date
of issuance of SFAS No. 153. We do not expect the adoption of SFAS No. 153 to
have a material impact on our financial statements.

In December 2004, the FASB issued SFAS No. 123R, Share Based Payments,
which requires companies to measure compensation cost for all share-based
payments, including employee stock options. SFAS No. 123R was effective as of
the first fiscal period beginning after June 15, 2005. In March 2005, the SEC
issued SAB No. 107 regarding the SEC's interpretation of SFAS No. 123R and the
valuation of share-based payments for public companies. The Company adopted SFAS
No. 123R on October 1, 2005, and the adoption did not have a material impact on
the Company's financial statements. See Note 3 to these consolidated financial
statements for further discussion regarding stock based compensation.

In June 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections", a replacement of APB Opinion No. 20, "Accounting Changes", and
SFAS No. 3, "Reporting Accounting Changes in Interim Financial Statements". SFAS
No. 154 changes the requirements of the accounting for and reporting of a change
in accounting principle. Previously, most voluntary changes in accounting
principles required recognition via a cumulative effect adjustment within net
income of the period of the change. SFAS No. 154 requires retrospective
application to prior periods' financial statements, unless it is impractical to
determine either the period-specific effects or the cumulative effect of the
change. SFAS No. 154 is effective for accounting changes made in fiscal years
beginning after December 15, 2005; however, the Statement does not change the
transition provisions of any of the existing accounting pronouncements. We do
not believe adoption of SFAS No. 154 will have a material effect on our
consolidated financial position, results of operations or cash flows.

(2) Financing Agreements

The Company's financing agreements contain various affirmative and
negative covenants including, among others, limitations on the amount available
under the revolving line of credit relative to the borrowing base, capital
expenditures, fixed charge coverage ratios, and minimum earnings before
interest, taxes, depreciation and amortization (EBITDA). The Company was
compliant with these covenants on December 30, 2005.

Page 7 of 13

(3) Stock Option Plans

In December 2004, the FASB issued SFAS No. 123R, "Share-Based Payment".
SFAS No. 123R requires all share-based payments to employees, including grants
of employee stock options, to be recognized as compensation expense in the
consolidated financial statements based on their fair values. That expense will
be recognized over the period during which an employee is required to provide
services in exchange for the award, known as the requisite service period
(usually the vesting period). We adopted SFAS No. 123R effective beginning
October 1, 2005 using the Modified Prospective Application Method. Under this
method, SFAS No. 123R applies to new awards and to awards modified, repurchased
or cancelled after the effective date. The impact of adopting SFAS No. 123R was
an increase of $10,000 to selling and administrative expenses.

For the three months ended December 31, 2004, the following table includes
disclosures required by SFAS No. 123, "Accounting for Stock-Based Compensation,"
as amended by SFAS No. 148, "Accounting for Stock-Based Compensation -
Transition and Disclosure," and illustrates the effect on net earnings and net
earnings per share as if we had applied the fair value recognition provisions of
SFAS No. 123:

3 MONTHS ENDED
DECEMBER 31, 2004
(Unaudited)
----------------

Net earnings, as reported $ 82
Deduct: Compensation Cost using the
fair value method, net of tax (46)
----------------
Pro forma net earnings $ 36

Earnings per share:
Basic - as reported $ 0.01
Basic - pro forma $ 0.00
Diluted - as reported $ 0.01
Diluted - pro forma $ 0.00

During the three months ended December 30, 2005 and December 31, 2004, the
Company issued 0 and 50,000 options, respectively. The fair value of each option
issued during the three months ended December 31, 2004 was estimated on the date
of grant using the Black-Scholes option pricing model with the following
weighted average assumptions:

3 MONTHS ENDED
DECEMBER 31, 2004
(Unaudited)
----------------
Risk free interest rate 3.69%
Expected term 7 years
Volatility 334.95%
Expected annual dividends none

The weighted average fair value of options granted during the three months
ended December 31, 2004 was $ .46 with an aggregate total value of $23,000.

(4) Litigation

Except as set forth below, there are no material legal proceedings pending
to which IEC or any of its subsidiaries is a party or to which any of IEC's or
its subsidiaries' property is subject. To our knowledge, there are no material
legal proceedings to which any director, officer or affiliate of IEC, or any
beneficial owner of more than 5 percent (5%) of Common Stock, or any associate
of any of the foregoing, is a party adverse to IEC or any of its subsidiaries.

On August 13, 2003, General Electric Company ("GE") commenced an action in
the state of Connecticut against the Company and Vishay Intertechnology, Inc.
("Vishay"). The complaint was amended on February 13, 2004. The action alleges
causes of action for breach of a manufacturing services contract, which had an
initial value of $4.4 million, breach of express warranty, breach of implied
warranty and a violation of the Connecticut Unfair Trade Practices Act. Vishay
supplied a component that the Company used to assemble printed circuit boards
for GE that GE contends failed to function properly requiring a product recall.
GE claims damages "in excess of $15,000" plus interest and attorneys' fees. The
Company has made a motion to dismiss the action in Connecticut for lack of
jurisdiction and the motion is pending. During the pendency of the motion, IEC
has filed for a protective cross claim against Vishay, and GE has filed a second
action against IEC and Vishay in New York State Supreme Court as a protective
measure in the event that its Connecticut action is dismissed. Vishay has moved
to dismiss the New York action and that motion has been adjourned by the court
to await the court's decision on jurisdiction in Connecticut. IEC has received
an indefinite extension of time to answer in the New York action pending the
Connecticut court's decision. The position of the Company is that the contract
with GE was substantially completed and that it has meritorious defenses and
basis for a cross claim against Vishay.

Page 8 of 13

(5) Restructuring

During May 2004, the Company commenced a restructuring initiative in an
attempt to more closely align resources to customer requirements. During the
first quarter of 2005, the Company paid $13,000 in severance and hiring costs
related to this initiative.

(6) Treasury Shares

On November 11, 2005, the Board of Directors authorized the Company to
purchase up to 10% of its outstanding common stock, at a price not to exceed
$1.00 per share and a maximum aggregate price not to exceed $425,000. This
repurchase program remains in effect until November 10, 2006. During the fiscal
quarter ended December 30, 2005, the Company purchased 412,300 shares at a cost
of $212,000. These were privately negotiated transactions.

Item 2 -- Management's Discussion and Analysis of Financial Condition and
Results of Operations

Results of Operations - Three Months Ended December 30,
2005, Compared to the Three Months Ended December 31, 2004.

Net sales for the three month period ended December 30, 2005, were $3.6
million, compared to $6.2 million for the comparable period of the prior fiscal
year, a decrease of 42 percent. The decrease in sales is due to a decline in
orders from two of our larger customers, and because of a last minute design
change that prevented us from making a shipment to another large customer.

Our five largest customers accounted for 61% of our sales for the quarter
ended December 30, 2005, and 82% of our sales for the quarter ended December 31,
2004.

Gross profit was $0.5 million or 14 percent of sales for the three month
period ended December 30, 2005, versus $0.7 million or 12 percent of sales in
the comparable period of the prior fiscal year. The increase in gross profit
percentage was largely due to our favorable product mix and prior year
restructuring efforts.

Selling and administrative expenses were $0.5 million for the three month
period ended December 2005, and $0.6 million for the comparable period of the
prior fiscal year. Selling and administrative expenses were 13 percent of sales
during the current period, compared to 10 percent of sales during the same
quarter of the prior fiscal year. The percentage increase is due to certain
fixed costs being spread over fewer sales dollars.

Restructuring costs were $13,000 for the three month period ended December
31, 2004. The costs were primarily related to severance costs.

Interest expense was $84,000 for the three month period ended December 30,
2005, down from $98,000 in the comparable period of the prior fiscal year. The
decrease was primarily due to a reduction in borrowing from our line of credit.

Other income was $72,000 for the three month period ended December 31,
2004. This was primarily due to gains on the sale of excess equipment. There was
no other income for the three month period ended December 30, 2005.

Net income (loss) for the three months ended December 30, 2005 was
($48,000) versus a net income of $82,000 in the comparable quarter of the prior
fiscal year.

Diluted income (loss) per share was ($0.01) as compared to diluted income
per share of $0.01 in the comparable quarter of the prior fiscal year.

Inventory increased by $1.5 million during the three month period ended
December 30, 2005. The increase is primarily due to materials purchased to fill
new orders that are scheduled to ship during our next fiscal quarter. We also
purchased $248,000 of capital equipment during the three month period ended
December 30, 2005. This equipment is necessary to support unique requirements
associated with new customer orders.

Page 9 of 13

Liquidity and Capital Resources

Cash flow provided by operating activities was ($275,000) for the three
months ended December 30, 2005 compared to $737,000 for the three months ended
December 31, 2004. The lower cash flow during fiscal 2006 versus 2005 is
primarily due to an increase in inventory purchases that were made to fill
customer orders during the next fiscal quarter. We also used $248,000 to make
equipment purchases (investing activities), and $212,000 to purchase 412,300
shares of company stock in two privately negotiated transactions (financing
activities).

Working capital on December 30, 2005 totaled $1.7 million, compared to
$0.9 million in the same period of the prior year. At December 30, 2005, we were
borrowing $383,000 under our revolving credit facility. The maximum borrowing
limit under our revolving credit facility is limited to the lesser of (i) $3.8
million or (ii) an amount equal to the sum of 85% of the receivables borrowing
base and 35% of the inventory borrowing base. Availability under the line of
credit was $1.8 million on December 30, 2005. The interest rate is prime plus
2.0%. We believe that our liquidity is adequate to cover operating requirements
for the next 12 months.

We also have a term loan balance of $648,000 that is secured by a first
mortgage on the IEC plant in Newark, New York (the "Real Estate Loan"), and a
second term loan balance of $58,000, that is secured by machinery and equipment
(the "Equipment Loan"). The Real Estate Loan is payable in 39 monthly
installments of $12,500 that commenced on October 1, 2005, and a final payment
of the remaining balance on January 1, 2009. The Equipment Loan is payable in 6
monthly installments of $16,667 that commenced October 1, 2005, and a final
payment of the remaining balance on April 1, 2006. Each loan has an interest
rate of prime plus 2.0%.

The financing agreements contain various affirmative and negative
covenants including, among others, limitations on the amount available under the
revolving line of credit relative to the borrowing base, and minimum earnings
before interest, taxes, depreciation and amortization (EBITDA). We were
compliant with these covenants at December 30, 2005.

Application of Critical Accounting Policies

Our financial statements and accompanying notes are prepared in accordance
with generally accepted accounting principles in the United States. Preparing
financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenue, and expenses. These
estimates and assumptions are affected by management's application of accounting
policies. Critical accounting policies for us include revenue recognition,
impairment of long-lived assets, accounting for legal contingencies and
accounting for income taxes.

We recognize revenue in accordance with Staff Accounting Bulletin No.101,
"Revenue Recognition in Financial Statements." Sales are recorded when products
are shipped to customers. Provisions for discounts and rebates to customers,
estimated returns and allowances and other adjustments are provided for in the
same period the related sales are recorded.

We evaluate our long-lived assets for financial impairment on a regular
basis in accordance with Statement of Financial Accounting Standards No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets." We evaluate
the recoverability of long-lived assets not held for sale by measuring the
carrying amount of the assets against the estimated discounted future cash flows
associated with them. At the time such evaluations indicate that the future
discounted cash flows of certain long-lived assets are not sufficient to recover
the carrying value of such assets, the assets are adjusted to their fair values.

We are subject to various legal proceedings and claims, the outcomes of
which are subject to significant uncertainty. Statement of Financial Accounting
Standards No. 5, "Accounting for Contingencies", requires that an estimated loss
from a loss contingency should be accrued by a charge to income if it is
probable that an asset has been impaired or a liability has been incurred and
the amount of the loss can be reasonably estimated.

Disclosure of a contingency is required if there is at least a reasonable
possibility that a loss has been incurred. We evaluate, among other factors, the
degree of probability of an unfavorable outcome and the ability to make a
reasonable estimate of the amount of loss. Changes in these factors could
materially impact our financial position or our results of operations.

Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes," establishes financial accounting and reporting standards for the
effect of income taxes. The objectives of accounting for income taxes are to
recognize the amount of taxes payable or refundable for the current year and
deferred tax liabilities and assets for the future tax consequences of events
that have been recognized in an entity's financial statements or tax returns.
Judgment is required in assessing the future tax consequences of events that
have been recognized in our financial statements or tax returns. Fluctuations in
the actual outcome of these future tax consequences could impact our financial
position or our results of operations.

Page 10 0f 13

Impact of Inflation

The impact of inflation on our operations has been minimal due to the fact
that we have been able to adjust our bids to reflect any inflationary increases
in costs.

New Pronouncements

In June 2005, the FASB issued SFAS No. 154, " Accounting Changes and Error
Corrections", a replacement of APB Opinion No. 20, "Accounting Changes", and
SFAS No. 3, "Reporting Accounting Changes in Interim Financial Statements". SFAS
No. 154 changes the requirements of the accounting for and reporting of a change
in accounting principle. Previously, most voluntary changes in accounting
principles required recognition via a cumulative effect adjustment within net
income of the period of the change. SFAS No. 154 requires retrospective
application to prior periods' financial statements, unless it is impractical to
determine either the period-specific effects or the cumulative effect of the
change. SFAS No. 154 is effective for accounting changes made in fiscal years
beginning after December 15, 2005; however, the Statement does not change the
transition provisions of any of the existing accounting pronouncements. We do
not believe adoption of SFAS No. 154 will have a material effect on our
consolidated financial position, results of operations or cash flows.

Item 3 -- 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 IEC due to adverse changes in financial rates. We
are exposed to market risk in the area of interest rates. One exposure is
directly related to our 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
IEC's results of operations.

Item 4 -- Controls and Procedures

An evaluation was performed under the supervision and with the
participation of our management, including our Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures as of the end of the period covered by this
Quarterly Report on Form 10-Q as required by Rule 13a-15 under the Securities
Exchange Act of 1934 (the "Exchange Act"). Based on that evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that the Company's
disclosure controls and procedures were effective as of the end of the period
covered by the Quarterly Report on 10-Q to provide reasonable assurance that
information required to be disclosed by the Company in the reports that it files
or submits under the Exchange Act is recorded, processed, summarized and
reported within the time period specified in the SEC rules and forms and that
such information is accumulated and communicated to our management (including
the Chief Executive Officer and Chief Financial Officer) to allow timely
decisions regarding disclosures.

Page 11 of 13

In connection with the evaluation described above, our management, including our
Chief Executive Officer and Chief Financial Officer, identified no change in our
internal control over financial reporting that occurred during our fiscal
quarter ended December 30, 2005, that materially affected, or is reasonably
likely to materially affect, our internal controls over financial reporting.

Forward-looking Statements

Forward-looking statements in this Form 10-Q include, without limitation,
statements relating to the Company's plans, future prospects, strategies,
objectives, expectations, intentions and adequacy of resources and are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These statements may be identified by their use of words
like "plans", "expects", "aims", "believes", "projects", "anticipates",
"intends", "estimates", "will", "should", "could", and other expressions that
indicate future events and trends. These forward-looking statements involve
known and unknown risks, uncertainties and other factors that may cause the
actual results, performance or achievement of the Company to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. These factors include, among others,
the following: general economic and business conditions, the timing of orders
and shipments, availability of material, product mix, changes in customer
requirements and in the volume of sales to principal customers, competition and
technological change, the ability of the Company to control manufacturing and
operating costs, and satisfactory relationships with vendors. The Company's
actual results of operations may differ significantly from those contemplated by
such forward-looking statements as a result of these and other factors,
including factors set forth in the Company's Annual Report on Form 10-K for the
year ended September 30, 2005 and in other filings with the Securities and
Exchange Commission.

PART II. OTHER INFORMATION

Item 1 -- Legal Proceedings

Item 1A - Risk Factors

There are no material changes to the Risk Factors described under the
title "Factors Affecting Future Results" in our Annual Report on form 10-K for
the fiscal year ended September 30, 2005.

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds

On November 11, 2005, the Board of Directors authorized the Company to
purchase up to 10% of its outstanding common stock, at a price not to exceed
$1.00 per share and a maximum aggregate price not to exceed $425,000. This
repurchase program, which has not been publicly announced, remains in effect
until November 10, 2006. During the fiscal quarter ended December 30, 2005, the
Company purchased 412,300 shares at a cost of $212,000 in two privately
negotiated transactions.

- -------------------------------------------------------------------------------------------------------------------------
Period (a) (b) (c) (d)
Maximum Dollar Value
of Shares that May
Total Number of Yet be Purchased
Total Number of Average Price Paid Shares Purchased as Under the Plan.
Shares Purchased per Share Part of Publicly
Announced Plan.
- -------------------------------------------------------------------------------------------------------------------------

November 14, 2005 51,300 $0.61 0 $393,707
- -------------------------------------------------------------------------------------------------------------------------
November 18, 2005 361,000 $0.50 0 $211,707
- -------------------------------------------------------------------------------------------------------------------------

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Item 3 -- Defaults Upon Senior Securities

None.

Item 4 -- Submission of Matters to a Vote of Security Holders

None

Item 5 -- Other Information

None.

Item 6 - Exhibits

The following documents are filed as exhibits to this Report:

31.1 Certification of Chief Executive Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002

31.2 Certification of Chief Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002

32.1 Certification of Chief Executive Officer and Chief Financial Officer
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C.
Section 1350

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: January 30, 2006 /s/ W. Barry Gilbert
-----------------------------
W. Barry Gilbert
Chairman and
Chief Executive Officer

Dated: January 30, 2006 /s/ Brian H. Davis
------------------------------
Brian H. Davis
Chief Financial Officer and Controller

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