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 31, 2006

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, an 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 - 8,328,658 shares as of April 20, 2006.

Page 1 of 15

PART 1 FINANCIAL INFORMATION
Page
Number

Item 1. Financial Statements

Balance Sheets as of:
March 31, 2006 (Unaudited) and September 30, 2005............ 3

Statements of Operations for the three months ended:
March 31, 2006 (Unaudited) and April 1, 2005
(Unaudited)................................................... 4

Statements of Operations for the six months ended:
March 31, 2006 (Unaudited) and April 1, 2005
(Unaudited)................................................... 5

Statements of Cash Flows for the six months ended:
March 31, 2005 (Unaudited) and April 1, 2005
(Unaudited)................................................... 6

Notes to Financial Statements (Unaudited)..................... 7

Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.................... 10

Item 3. Quantitative and Qualitative Disclosures about Market Risk....... 13

Item 4. Controls and Procedures.......................................... 13

PART II OTHER INFORMATION

Item 1. Legal Proceedings.............................................. 14

Item 1A.Risk Factors................................................... 14

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.... 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 ...................................................... 15

Signatures............................................................. 15

Page 2 of 15

Part 1. Financial Information
Item 1 -- Financial Statements

IEC ELECTRONICS CORP.
BALANCE SHEET
MARCH 31, 2006 AND SEPTEMBER 30, 2005
(in thousands)

MARCH 31, 2006 SEPTEMBER 30,2005
------------------ ------------------
(Unaudited)

ASSETS
CURRENT ASSETS:
Cash $ -- $ 461
Accounts receivable (net of allowance for 4,439 2,344
Doubtful accounts of $47 and $35 respectively)
Inventories 2,276 630
Deferred income taxes 250 250
Other current assets 217 279
------------------ ------------------
Total current assets 7,182 3,964
------------------ ------------------
FIXED ASSETS:
Land and land improvements 707 707
Building and improvements 4,089 4,080
Machinery and equipment 22,848 22,582
Furniture and fixtures 4,163 4,138
------------------ ------------------
SUB-TOTAL GROSS PROPERTY 31,807 31,507
LESS ACCUMULATED DEPRECIATION (30,458) (30,000)
------------------ ------------------
1,349 1,507
OTHER NON-CURRENT ASSETS 35 67
------------------ ------------------
$ 8,566 $ 5,538
================== ==================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short term borrowings $ 2,821 $ 345
Accounts payable 2,099 918
Accrued payroll and related expenses 199 264
Other accrued expenses 332 399
------------------ ------------------
Total current liabilities 5,451 1,926
------------------ ------------------
LONG TERM VENDOR NOTES 23 57
LONG TERM BANK DEBT 460 535
------------------ ------------------
TOTAL LIABILITIES 5,934 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 - 8,325,558 and
8,292,450 shares 83 83
Treasury Shares at Cost 412,873 and 573
Shares, Respectively (223) (11)
Additional paid-in capital 38,573 38,533
Accumulated deficit (35,801) (35,585
------------------ ------------------
Total shareholders' equity 2,632 3,020
------------------ ------------------
$ 8,566 $ 5,538
================== ==================

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

Page 3 of 15

IEC ELECTRONICS CORP.
STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND APRIL 1, 2005
(in thousands, except share and per share data)

3 MONTHS ENDED 3 MONTHS ENDED
MARCH 31, 2006 APRIL 1, 2005
---------------- ----------------
(Unaudited) (Unaudited)

Net sales $ 5,580 $ 4,682
Cost of sales 5,149 4,019
---------------- ----------------
Gross profit 431 663
---------------- ----------------
Selling and administrative expenses 515 587
Restructuring charge -- 41
---------------- ----------------
Operating profit (84) 35

Interest and financing expense (87) (102)
Gain on sale of fixed assets 3 113
Other income -- 27
---------------- ----------------
Net income before income taxes (168) 73

Provision for income taxes -- --
---------------- ----------------
Net income (loss) $ (168) $ 73
================ ================

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

Basic $ (0.02) $ 0.01
Diluted $ (0.02) $ 0.01

Weighted average number of common and common equivalent shares outstanding:

Basic 7,911,343 8,253,995
Diluted 7,911,343 8,530,654

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

Page 4 of 15

IEC ELECTRONICS CORP.
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2006 AND APRIL 1, 2005
(in thousands, except share and per share data)

6 MONTHS ENDED 6 MONTHS ENDED
MARCH 31, 2006 APRIL 1, 2005
---------------- ----------------
(Unaudited) (Unaudited)

Net sales $ 9,187 $ 10,906
Cost of sales 8,237 9,493
---------------- ----------------
Gross profit 950 1,413
---------------- ----------------
Selling and administrative expenses 997 1,216
Restructuring charge -- 55
---------------- ----------------
Operating profit (47) 142

Interest and financing expense (171) (199)
Gain on sale of fixed assets 2 185
Other income -- 28
---------------- ----------------
Net income before income taxes (216) 156

Provision for income taxes -- --
---------------- ----------------
Net income (loss) $ (216) $ 156
================ ================

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

Basic $ (0.03) $ 0.02
Diluted $ (0.03) $ 0.02

Weighted average number of common and common equivalent shares outstanding:

Basic 7,962,096 8,242,246
Diluted 7,962,096 8,523,921

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

Page 5 of 15

IEC ELECTRONICS CORP.
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED MARCH 31, 2006 AND APRIL 1, 2005
(in thousands)

6 MONTHS ENDED 6 MONTHS ENDED
MARCH 31, 2006 APRIL 1, 2005
---------------- ----------------
(Unaudited) (Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ (216) $ 156
Non-cash adjustments:
Compensation Expense - Stock Options 22 --
Depreciation 489 521
Gain on sale of fixed assets (3) (185)
Issuance of director's fees in stock 18 11
Changes in operating assets and liabilities:
Accounts receivable (2,095) 1,566
Inventories (1,646) 824
Other current assets 63 1
Accounts payable 1,181 (1,019)
Accrued expenses (132) (196)
---------------- ----------------
Net cash flows from operating activities (2,319) 1,679
---------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property 3 185
Purchases of plant, property & equipment (300) (42)
---------------- ----------------
Net cash flows from investing activities (297) 143
---------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments under loan agreements (221) (231)
Borrowings (payments) on line of credit 2,588 (1,025)
Proceeds from exercise of stock options -- 5
Purchase of Treasury Stock (212) --
---------------- ----------------
Net cash flows from financing activities 2,155 (1,251)
---------------- ----------------

Change in cash and cash equivalents (461) 571
Cash and cash equivalents at beginning of period 461 --
---------------- ----------------
Cash and cash equivalents at end of period $ -- $ 571
================ ================

Supplemental Disclosures of Cash Flow Information:
================ ================
Cash paid during the period for:
Interest $ 126 $ 148

Income taxes $ -- $ --

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

Page 6 of 15

IEC ELECTRONICS CORP.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2006

(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").

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):

March 31, 2006 September 30, 2005
----------------- ------------------
(Unaudited)
Raw materials $ 1,439 $ 432
Work-in-process 821 197
Finished goods 16 1
----------------- ----------------
$ 2,276 $ 630
================= ================

Unaudited Financial Statements

The accompanying unaudited financial statements as of March 31, 2006, and
for the three and six months ended March 31, 2006 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.

Page 7 of 15

IEC ELECTRONICS CORP.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2006

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.
There were no dilutive effects of stock options at March 31, 2006 as the effect
would be anti-dilutive.

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. The Company has adopted 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. The adoption of SFAS No. 153 did not 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 received a
waiver to the EBITDA covenant for the three month period ended March 31, 2006,
and was therefore compliant as of this date.

Page 8 of 15

IEC ELECTRONICS CORP.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2006

(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 $22,000 to selling and administrative expenses.

For the three month period ended April 1, 2005, and the six month period
ended April 1, 2005, 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 (unaudited):

3 MONTHS ENDED 6 MONTHS ENDED
APRIL 1, 2005 APRIL 1, 2005
---------------- ----------------
Net earnings, as reported $ 73 $ 156
Deduct: Compensation Cost using the
Fair value method, net of tax $ (4) $ (50)
---------------- ----------------
Pro forma net earnings $ 69 $ 106
Earnings per share:
Basic - as reported $ 0.01 $ 0.02
Basic - pro forma $ 0.01 $ 0.01
Diluted - as reported $ 0.01 $ 0.02
Diluted - pro forma $ 0.01 $ 0.01

During the three and six months ended March 31, 2006 the Company issued
25,000 options. During the three and six months ended April 1, 2005, the Company
issued 34,000 and 84,000 options, respectively. The fair value of each option
issued during these periods was estimated on the date of grant using the
Black-Scholes option pricing model with the following weighted average
assumptions:

3 MO. ENDED 6 MO. ENDED 3 MO. ENDED 6 MO. ENDED
MAR 31, 2006 MAR 31, 2006 APR 1, 2005 APR 1, 2005
-------------- -------------- -------------- --------------

Risk free interest rate 4.35% 4.35% 3.73% 3.71%
Expected term 5 years 5 years 5 years 6years
Volatility 270.1% 270.1% 282.6% 313.8%
Expected annual dividends none none none none

The weighted average fair value of options granted during the three and
six months ended March 31, 2006 was $.50 with an aggregate total value of
$12,500. The weighted average fair value of options granted during the three
months ended April 1 2005 was $.51 with an aggregate value of $17,340. The
weighted average fair value of options granted during the six months ended April
1 2005 was $.48 with an aggregate value of $40,340.

(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 made a motion to dismiss the action in Connecticut for lack of
jurisdiction. During the pendency of the motion, IEC filed for a protective
cross claim against Vishay, and GE 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 were dismissed. In March 2006, the New York action was
voluntarily discontinued by consent of all the parties. IEC and Vishay are
proceeding to defend GE's Connecticut action on the merits and IEC is proceeding
with its cross claim against Vishay. 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 9 of 15

IEC ELECTRONICS CORP.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2006

(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 half of 2005, the Company paid $55,000 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 March 31, 2006, Compared to
the Three Months Ended April 1, 2005.

Net sales for the three month period ended December 30, 2005, were $5.6
million, compared to $4.7 million for the comparable period of the prior fiscal
year, an increase of 19 percent. The increase in sales is due to the addition of
several new customers, and an increase in orders from existing customers.

Our five largest customers accounted for 74% of our sales for the quarter
ended March 31, 2006, and 71% of our sales for the quarter ended April 1, 2005.

Gross profit was $0.4 million or 8 percent of sales for the three month
period ended March 31, 2006, versus $0.7 million or 14 percent of sales in the
comparable period of the prior fiscal year. The decrease in gross profit
percentage was primarily due to start-up costs associated with new customers,
and a higher operational structure required to support long term growth. We
expect our gross profit percentage to improve as our sales increase, and new
customers move beyond the start-up phase.

Selling and administrative expenses were $0.5 million for the three month
period ended March 31, 2005, and $0.6 million for the comparable period of the
prior fiscal year. Selling and administrative expenses were 9 percent of sales
during the current period, compared to 13 percent of sales during the same
quarter of the prior fiscal year. The reduction is primarily due to lower
commissions paid to our manufacturer's representatives.

Restructuring costs were $41,000 for the three month period ended April 1,
2005. The costs were for severance paid to terminated employees.

Interest expense was $87,000 for the three month period ended March 31,
2006, down from $102,000 in the comparable period of the prior fiscal year.
Interest expense was $26,000 lower than prior year because certain costs
associated with our 2003 refinancing have become fully amortized. This was
offset by an $11,000 increase associated with increased borrowing from our line
of credit.

We recorded a $3,000 gain on the sale of excess equipment during the three
months ended March 31, 2006 compared to a $113,000 gain on the sale of excess
equipment during the three months ended April 1, 2005.

Other income for the three month period ended April 1, 2005 was $27,000.
This was primarily due to an asset tax refund received from our Mexican
subsidiary.

Net income (loss) for the three months ended March 31, 2006 was ($168,000)
versus a net income of $73,000 in the comparable quarter of the prior fiscal
year.

Diluted income (loss) per share was ($0.02) as compared to diluted income
per share of $0.01 in the comparable quarter of the prior fiscal year.

Accounts receivable increased by $2.1 million during the three month
period ended March 31, 2006. The increase is primarily due to higher sales
compared to the prior quarter, most of which were shipped too late in the
quarter to collect payment prior to the end of the period.

Page 10 of 15

Results of Operations - Six Months Ended March 31, 2006, Compared to
the Six Months Ended April 1, 2005.

Net sales for the six month period ended March 31, 2006, were $9.2
million, compared to $10.9 million for the comparable period of the prior fiscal
year, a decrease of 16 percent. $1.4 million of the $1.7 million sales reduction
is due to the loss of two customers. We expect this loss to be made up by
additional revenues from new customers during the next few quarters.

Our five largest customers accounted for 69% of our sales for the six
months ended March 31, 2006, and 73% of our sales for the six months ended April
1, 2005.

Gross profit was $1.0 million or 10 percent of sales for the six month
period ended March 31, 2006, versus $1.4 million or 13 percent of sales in the
comparable period of the prior fiscal year. The decrease in gross profit
percentage was primarily due to start-up costs associated with new customers,
and a higher operational structure required to support long term growth. We
expect our gross profit percentage to improve as our sales increase, and new
customers move beyond the start-up phase.

Selling and administrative expenses were $1.0 million for the six month
period ended March 31, 2006, and $1.2 million for the comparable period of the
prior fiscal year. Selling and administrative expenses were 11 percent of sales
during both fiscal periods. The reduced spending in fiscal 2006 is primarily due
to lower commissions paid to our manufacturer's representatives.

Restructuring costs were $55,000 for the six month period ended April 1,
2005. The costs were for severance paid to terminated employees.

Interest expense was $171,000 for the six month period ended March 31,
2006, down from $199,000 in the comparable period of the prior fiscal year.
Interest expense was $26,000 lower than prior year because certain costs
associated with our 2003 refinancing have become fully amortized.

We recorded a $2,000 gain on the sale of excess equipment during the six
months ended March 31, 2006 compared to a $185,000 gain on the sale of excess
equipment during the six months ended April 1, 2005.

Other income for the six month period ended April 1, 2005 was $28,000.
This was primarily due to an asset tax refund received from our Mexican
subsidiary.

Net income (loss) for the six months ended March 31, 2006 was ($216,000)
versus a net income of $156,000 in the comparable period of the prior fiscal
year.

Diluted income (loss) per share was ($0.03) as compared to diluted income
per share of $0.02 in the comparable period of the prior fiscal year.

Inventory increased by $1.6 million during the six month period ended
March 31, 2006. The increase is primarily due to materials purchased to fill new
orders that are scheduled to ship during our next fiscal quarter.

Accounts receivable increased by $2.1 million during the six month period
ended March 31, 2006. The increase is primarily due to higher sales compared to
the fourth quarter of fiscal 2005, most of which were shipped too late in the
quarter to collect payment prior to the end of the period.

We purchased $300,000 of capital equipment during the six month period
ended March 31, 2006. This equipment is necessary to support unique requirements
associated with new customer orders.

Page 11 of 15

Liquidity and Capital Resources

Cash flow provided by (used in) operating activities was ($2,319,000) for
the six months ended March 31, 2006 compared to $1,679,000 for the six months
ended April 1, 2005. We also used $300,000 to purchase new equipment (investing
activities) and $212,000 to repurchase company stock (financing activity) during
the six months ended March 31, 2006. The lower operating cash flow during fiscal
2006 versus 2005 is primarily due to a $1.6 million increase in inventory and a
$2.1 million increase in accounts receivable. Both increases were due to new
customer business activities.

Working capital on March 31, 2006 totaled $1.7 million, compared to $2.0
million in the same period of the prior year. At March 31, 2006, we were
borrowing $2.6 million 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 $1.2 million on March 31, 2006. We believe that our liquidity
is adequate to cover operating requirements for the next 12 months.

We also have a term loan balance of $610,000 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 $8,000, 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 final payment on the equipment
Loan is payable 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, capital expenditures,
fixed charge coverage ratios, and minimum earnings before interest, taxes,
depreciation and amortization (EBITDA). The Company received a waiver to the
EBITDA covenant for the three month period ended March 31, 2006, and was
therefore compliant as of this date.

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,
provisions for doubtful accounts, provisions for inventory obsolescence,
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 12 0f 15

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 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. The Company adopted these provisions at the
beginning of fiscal 2006. The adoption of SFAS No. 151 did not have a material
impact on our financial statements.

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

Based on their evaluation as of the end of the period covered by this
Report, IEC's Chief Executive Officer and Chief Financial Officer have concluded
that IEC's disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")) are
effective to ensure that information required to be disclosed by IEC in reports
that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in Securities and
Exchange Commission rules and forms.

There were no changes in IEC's internal control over financial reporting
during the second quarter of fiscal 2006 or in other factors that materially
affected or are reasonably likely to materially affect our internal control over
financial reporting.

Page 13 of 15

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

The information set forth in Note (4) of the Notes to Consolidated
Financial Statements included in Part I - Item 1 of this Form 10-Q is
incorporated by reference.

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

None.

Item 3 -- Defaults Upon Senior Securities

None.

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

The Annual Meeting of Stockholders was held on January 25, 2006.

Proxies for the meeting were solicited pursuant to Regulation 14A under
the Securities Exchange Act of 1934, there was no solicitation in opposition to
the management's nominees as listed in the proxy statement and all of such
nominees were elected.

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 7,334,419 72,526
W. Barry Gilbert 7,327,219 79,726
Eben S. Moulton 7,334,419 72,526
James C. Rowe 7,294,219 112,726
Justin L. Vigdor 7,287,487 119,458
Jerold L. Zimmerman 7,365,246 41,699

Item 5 -- Other Information

None.

Page 14 of 15

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: April 20, 2006 /s/ W. Barry Gilbert
-----------------------------
W. Barry Gilbert
Chairman and
Chief Executive Officer

Dated: April 20, 2006 /s/ Brian H. Davis
----------------------------
Brian H. Davis
Chief Financial Officer and
Controller

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