Delaware
|
13-3458955
|
(State
or other jurisdiction of
|
(IRS
Employer ID No.)
|
incorporation
or organization)
|
Common
Stock, $.01 par value
|
NYSE
Amex
|
|
(Title
of Class)
|
(Name
of each exchange on which
registered)
|
¨ Large accelerated
filer
|
¨ Accelerated
filer
|
¨ Non-accelerated
filer
|
x Smaller reporting
company
|
Page
|
||||
PART
I
|
||||
Item
1
|
Business
|
4
|
||
Item
1A
|
Risk
Factors
|
8
|
||
Item
1B
|
Unresolved
Staff Comments
|
12
|
||
Item
2
|
Properties
|
12
|
||
Item
3
|
Legal
Proceedings
|
13
|
||
Item
4
|
(Removed
and Reserved)
|
13
|
||
Executive
Officers of Registrant
|
14
|
|||
PART
II
|
||||
Item
5
|
Market
for Registrant's Common Equity, Related Stockholder Matters, and Issuer
Purchases of Equity Securities
|
15
|
||
Item
6
|
Selected
Consolidated Financial Data
|
17
|
||
Item
7
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
18
|
||
Item
7A
|
Quantitative
and Qualitative Disclosures about Market Risk
|
22
|
||
Item
8
|
Financial
Statements and Supplementary Data
|
22
|
||
Item
9
|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
|
22
|
||
Item
9A
|
Controls
and Procedures
|
22
|
||
Item
9B
|
Other
Information
|
23
|
||
PART
III
|
||||
Item
10
|
Directors,
Executive Officers, and Corporate Governance
|
23
|
||
Item
11
|
Executive
Compensation
|
24
|
||
Item
12
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
24
|
||
Item
13
|
Certain
Relationships and Related Transactions and Director
Independence
|
24
|
||
Item
14
|
Principal
Accountant Fees and Services
|
24
|
||
|
||||
PART
IV
|
||||
Item
15
|
Exhibits
and Financial Statement Schedules
|
25
|
|
Ø
|
A
world class Technology Center that combines dedicated prototype
manufacturing with an on-site Materials Analysis Lab (headed by two staff
PhD’s), enabling the seamless transition of complex electronics from
design to production
|
|
Ø
|
In-house
custom, functional test development supporting complex system-level
assembly, test, troubleshooting and end-order
fulfillment
|
|
Ø
|
An
authentic Lean/Six Sigma continuous improvement program supported by five
certified Six Sigma Blackbelts delivering best-in-class
results
|
|
Ø
|
An
industry-leading Web Portal providing customers real-time access to a wide
array of critical data
|
|
Year
ended September 30,
|
|||||
Industry
Sectors and Large Customers
|
2010
|
2009
|
||||
% of Sales by Sector
|
||||||
Military
& Aerospace
|
58% | 55% |
|
|||
Industrial
& Communications
|
29% | 37% | ||||
Medical
& Other
|
13% | 8% | ||||
100% | 100% | |||||
Customers Representing Over 10% of
Sales
|
||||||
General
Electric
|
14% | 15% | ||||
Ultralife
|
<
10%
|
13% | ||||
ViaSat,
Inc.
|
<
10%
|
12% | ||||
Percent
of 9/30 receivables owed by customers with balances exceeding 10%
of total
|
11% | 24% |
|
Ø
|
adverse
changes in general economic
conditions
|
|
Ø
|
the
level and timing of customer orders and the accuracy of their
forecasts
|
|
Ø
|
the
level of capacity utilization of our manufacturing facilities and
associated fixed costs
|
|
Ø
|
price
competition
|
|
Ø
|
market
acceptance of our customers'
products
|
|
Ø
|
business
conditions in our customers' end
markets
|
|
Ø
|
our
level of experience manufacturing a particular
product
|
|
Ø
|
change
in the sales mix of our customers
|
|
Ø
|
the
efficiencies achieved in managing inventories and fixed
assets
|
|
Ø
|
fluctuations
in cost and availability of
materials
|
|
Ø
|
the
timing of expenditures in anticipation of future
orders
|
|
Ø
|
changes
in cost and availability of labor and
components
|
|
Ø
|
our
effectiveness in managing the manufacturing
process.
|
|
Ø
|
the
inability of our customers to adapt to rapidly changing technology and
evolving industry standards, which result in short product life
cycles
|
|
Ø
|
the
inability of our customers to develop and market their products, some of
which are new and untested
|
|
Ø
|
the
potential that our customers' products may become obsolete or the failure
of our customers' products to gain widespread commercial
acceptance
|
|
Ø
|
periods
of significantly decreased demand in our customers'
markets
|
|
Ø
|
variation
in demand for our customers' products in their end
markets
|
|
Ø
|
actions
taken by our customers to manage their
inventory
|
|
Ø
|
product
design changes by our customers
|
|
Ø
|
changes
in our customers' manufacturing
strategy
|
|
Ø
|
reduced
demand for our customers' products
|
|
Ø
|
deciding
on the levels of business that we will
seek
|
|
Ø
|
production
schedules
|
|
Ø
|
component
procurement commitments
|
|
Ø
|
equipment
requirements
|
|
Ø
|
personnel
needs
|
|
Ø
|
other
resource requirements
|
|
Ø
|
integration
and management of operations
|
|
Ø
|
retention
of key personnel
|
|
Ø
|
integration
of information systems, internal procedures, accounts receivable as well
as management, financial and operational
controls
|
|
Ø
|
retention
of customer base of acquired
businesses
|
|
Ø
|
diversion
of management’s attention from other ongoing business
concerns
|
|
Ø
|
exposure
to unanticipated liabilities of acquired
companies
|
|
Ø
|
hire
and retain qualified engineering and technical
personnel
|
|
Ø
|
maintain
and enhance our technological
leadership
|
|
Ø
|
develop
and market manufacturing services that meet changing customer
needs
|
|
Ø
|
incur
debt
|
|
Ø
|
incur
or maintain liens
|
|
Ø
|
make
acquisitions of businesses or
entities
|
|
Ø
|
make
investments, including loans, guarantees and
advances
|
|
Ø
|
engage
in mergers, consolidations or certain sales of
assets
|
|
Ø
|
engage
in transactions with affiliates
|
|
Ø
|
pay
dividends or engage in stock redemptions or
repurchases
|
Location
|
Principal Use
|
Building SF
|
Owned/Leased
|
Lease Expiration
|
||||
Newark,
New York
|
AO,E,M,W,D
|
235,000
|
Owned
|
|||||
Victor,
New York
|
M,W,D
|
19,000
|
Leased
|
December
31, 2012
|
||||
Rochester,
New York
|
M,W,D
|
47,500
|
Leased
|
July
30, 2014
|
||||
Albuquerque,
New Mexico
|
AO,M,W,D
|
72,000
|
Owned
|
Age
|
||||
W.
Barry Gilbert
|
64
|
Chief
Executive Officer and Chairman of the Board
|
||
Jeffrey
T. Schlarbaum
|
44
|
Executive
Vice President
|
||
Donald
S. Doody
|
43
|
Senior
Vice President
|
||
Susan
E. Topel-Samek
|
52
|
Vice
President and Chief Financial
Officer
|
IEC Stock Prices
|
Low
|
High
|
||||
Fiscal Quarters
|
||||||
First
2009
|
$1.40 | $1.90 | ||||
Second
2009
|
1.19 | 1.60 | ||||
Third
2009
|
1.35 | 3.98 | ||||
Fourth
2009
|
3.30 | 7.45 | ||||
First
2010
|
$3.42 | $5.55 | ||||
Second
2010
|
4.15 | 6.18 | ||||
Third
2010
|
4.30 | 5.49 | ||||
Fourth
2010
|
4.57 | 5.26 |
Shares
|
||||||||||||
Stock Plan Shares
|
Shares to be
|
Wgtd average
|
available for
|
|||||||||
(as of September 30, 2010)
|
issued under
|
exercise price
|
issuance under
|
|||||||||
outstanding
|
of outstanding
|
equity compen-
|
||||||||||
Category
|
options
|
options
|
sation plans
|
|||||||||
(a,b)
|
||||||||||||
Under
plans approved by shareholders (c)
|
764,595 |
1.66
|
461,106 | |||||||||
Under
plans not approved by shareholders
|
- |
-
|
- | |||||||||
Total
|
764,595 | 461,106 | ||||||||||
Total
shares authorized under the plan (d)
|
3,100,000 | |||||||||||
Shares
issued under plan through 9/30/10
|
1,874,299 |
(a)
|
Excluding
shares reflected in first column of this
table.
|
(b)
|
These
shares may be issued in the form of stock options, restricted stock,
performance shares or other share-based
awards.
|
(c)
|
IEC's
2001 Stock Option and Incentive Plan was approved by shareholders in
February 2002.
|
(d)
|
Includes
plan amendments through September 30,
2010.
|
Years ended September 30,
|
||||||||||||||||||||
(amounts in thousands,
|
2010
|
2009
|
2008
|
2007
|
2006
|
|||||||||||||||
except per share)
|
(b)
|
(a)
|
||||||||||||||||||
Net
sales
|
$ | 96,674 | $ | 67,811 | $ | 51,092 | $ | 40,914 | $ | 22,620 | ||||||||||
Gross
profit
|
16,263 | 10,826 | 6,217 | 3,877 | 2,753 | |||||||||||||||
Operating
income
|
7,687 | 4,820 | 2,392 | 985 | 598 | |||||||||||||||
Income
before taxes
|
7,055 | 4,718 | 1,634 | 503 | 215 | |||||||||||||||
Tax
provision/(benefit)
|
2,400 | (238 | ) | (8,843 | ) | (372 | ) | - | ||||||||||||
Net
income
|
$ | 4,655 | $ | 4,956 | $ | 10,477 | $ | 875 | $ | 215 | ||||||||||
Gross
margin
|
16.8 | % | 16.0 | % | 12.2 | % | 9.5 | % | 12.2 | % | ||||||||||
Operating
income as % of sales
|
8.0 | % | 7.1 | % | 4.7 | % | 2.4 | % | 2.6 | % | ||||||||||
Income
before taxes, per share:
|
||||||||||||||||||||
Basic
|
$ | 0.78 | $ | 0.54 | $ | 0.19 | $ | 0.06 | $ | 0.03 | ||||||||||
Diluted
|
0.73 | 0.49 | 0.18 | 0.06 | 0.03 | |||||||||||||||
Net
income per share:
|
||||||||||||||||||||
Basic
|
$ | 0.52 | $ | 0.57 | $ | 1.22 | $ | 0.11 | $ | 0.03 | ||||||||||
Diluted
|
0.48 | 0.52 | 1.12 | 0.10 | 0.03 | |||||||||||||||
Common
and equivalent shares:
|
||||||||||||||||||||
Basic
|
8,990.2 | 8,728.9 | 8,553.6 | 8,114.5 | 7,973.2 | |||||||||||||||
Diluted
|
9,608.2 | 9,553.5 | 9,337.1 | 8,895.8 | 8,276.0 | |||||||||||||||
Working
capital (c)
|
$ | 17,712 | $ | 11,390 | $ | 9,246 | $ | 3,985 | $ | 5,775 | ||||||||||
Total
assets (d)
|
55,682 | 34,469 | 34,184 | 12,344 | 11,894 | |||||||||||||||
Long-term
debt (c)
|
15,999 | 6,600 | 8,910 | 1,441 | 3,972 | |||||||||||||||
Shareholders'
equity
|
25,419 | 20,254 | 15,976 | 4,163 | 3,092 |
(a)
|
IEC
acquired Val-U-Tech Corp. (now IEC Electronics Wire and Cable) on May 30,
2008.
|
(b)
|
IEC
acquired General Technology Corporation on December 16, 2009, and
purchased assets of Celmet Co., Inc. on July 30,
2010.
|
(c)
|
Revolver
borrowings for 2006 and 2007, originally reported as current liabilities,
have been reclassified to long term based on maturity date stated in
loan agreement.
|
(d)
|
Customer
deposits for 2006-2008, originally reported as inventory reserves, have
been reclassified to current
liabilities.
|
ITEM
7.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS 0F
OPERATIONS
|
Year ended September 30,
|
% Increase
|
|||||||||||
Summary Income Statement Data
|
2010
|
2009
|
(Decrease)
|
|||||||||
($ in thousands)
|
||||||||||||
Net
sales
|
$ | 96,674 | $ | 67,811 |
42.6%
|
|||||||
Gross
profit
|
16,263 | 10,826 |
50.2%
|
|||||||||
Selling
& administrative expense
|
8,576 | 6,006 |
42.8%
|
|||||||||
Interest
& financing expense
|
814 | 389 |
109.3%
|
|||||||||
Other
(income)/expense
|
(182 | ) | (287 | ) |
(36.6%)
|
|||||||
Income
before taxes
|
7,055 | 4,718 |
49.5%
|
|||||||||
Provision
(benefit) for income taxes
|
2,400 | (238 | ) |
nm
|
||||||||
Net
income
|
$ | 4,655 | $ | 4,956 |
(6.1%)
|
|||||||
Gross
margin
|
16.8 | % | 16.0 | % | ||||||||
S&A
expense as % of sales
|
8.9 | % | 8.9 | % | ||||||||
Pretax
income as % of sales
|
7.3 | % | 7.0 | % | ||||||||
Income
taxes as % of pretax income
|
34.0 | % | (5.0 | %) | ||||||||
Net
income as % of sales
|
4.8 | % | 7.3 | % | ||||||||
nm
- not meaningful.
|
Type
|
Actual at
|
|||||||||
Covenant
|
of limit
|
Limit
|
September 30, 2010
|
|||||||
($ in thousands)
|
||||||||||
Fourth
quarter EBITDARS
|
Lower
|
$ |
1,000
|
$ |
3,208
|
|||||
Annual
EBITDARS
|
Lower
|
$ |
5,000
|
$ |
10,629
|
|||||
Total
debt to EBITDARS
|
Upper
|
3.00x
|
1.88x
|
|||||||
Fixed
charge coverage
|
Lower
|
1.25x
|
1.98x
|
(i)
|
pertain
to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of assets of the
Company,
|
(ii)
|
provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the Company
are being made only in accordance with authorizations of management and
directors of the Company, and
|
(iii)
|
provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Company’s assets that
could have a material effect on financial
statements.
|
|
Page
|
|
Report
of Independent Registered Public Accounting Firm
|
29
|
|
Consolidated
Balance Sheets as of September 30, 2010 and 2009
|
30
|
|
Consolidated
Income Statements for the years ended September 30, 2010 and
2009
|
31
|
|
Consolidated
Statements of Comprehensive Income and Shareholders' Equity for the years
ended September 30, 2010 and 2009
|
32
|
|
Consolidated
Statements of Cash Flows for the years ended September 30, 2010 and
2009
|
33
|
|
Notes
to Consolidated Financial Statements
|
34
|
Exhibit
No.
|
Title
|
Page
|
||
2.1
|
Agreement
and Plan of Merger by and among IEC Electronics Corp., VUT Merger Corp.
and Val-U-Tech Corp. dated as of May 23, 2008 (incorporated by reference
to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 27, 2008)
|
|||
2.2
|
Stock
Purchase Agreement, dated December 16, 2009, by and among IEC Electronics
Corp, Crane International Holdings, Inc. and General Technology
Corporation (incorporated by reference to Exhibit 2.1 to the Company's
Current Report on Form 8-K filed December 23, 2009)
|
|||
3.1
|
Amended
and Restated Certificate of Incorporation of DFT Holdings Corp.
(incorporated by reference to Exhibit 3.1 to the Company's Registration
Statement on Form S-1, Registration No. 33-56498)
|
|||
3.2
|
Amended
and Restated By-Laws of the Company as of October 1, 2010 (incorporated by
reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed
October 7, 2010)
|
|||
3.3
|
Agreement
and Plan of Merger of IEC Electronics into DFT Holdings Corp.
(incorporated by reference to Exhibit 3.3 to the Company's Registration
Statement on Form S-1, Registration No. 33-56498)
|
|||
3.4
|
Certificate
of Merger of IEC Electronics Corp. into DFT Holdings Corp. - New York.
(incorporated by reference to Exhibit 3.4 to the Company's Registration
Statement on Form S-1, Registration No. 33-56498)
|
|||
3.5
|
Certificate
of Ownership and Merger merging IEC Electronics Corp. into DFT Holdings
Corp. - Delaware (incorporated by reference to Exhibit 3.5 to the
Company's Registration Statement on Form S-1, Registration No.
33-56498)
|
|||
3.6
|
Certificate
of Merger of IEC Acquisition Corp. into IEC Electronics Corp.
(incorporated by reference to Exhibit 3.6 to the Company’s Registration
Statement on Form S-1, Registration No. 33-56498)
|
|||
3.7
|
Certificate
of Amendment of Certificate of Incorporation of IEC Electronics Corp.
filed with the Secretary of State of the State of Delaware on Feb. 26,
1998 (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly
Report on Form 10-Q for the Quarter ended March 27, 1998)
|
Exhibit No.
|
Title
|
Page
|
||
3.8
|
Certificate
of Designations of the Series A Preferred Stock of IEC Electronics Corp.
filed with the Secretary of State of the State of Delaware on June 3, 1998
(incorporated by reference to Exhibit 3.8 of the Company's Annual Report
on Form 10-K for the year ended September 30, 1998)
|
|||
4.1
|
Specimen
of Certificate for Common Stock (incorporated by reference to Exhibit 4.1
to the Company's Registration Statement on Form S-1, Registration No.
33-56498)
|
|||
10.1
|
Credit
Facility Agreement dated as of May 30, 2008 by and among IEC Electronics
Corp. and Manufacturers and Traders Trust Company (incorporated by
reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 27, 2008)
|
|||
10.2
|
First
Amendment to Credit Facility Agreement made July 29, 2008 to be effective
as of May 30, 2008 between IEC Electronics Corp. and Manufacturers and
Traders Trust Company (incorporated by reference to Exhibit 10.8 to the
Company's Annual Report on Form 10-K for the year ended September 30,
2008)
|
|||
10.3
|
Amended
and Restated Credit Facility Agreement, dated as of December 16, 2009, by
and among IEC Electronics Corp. and Manufacturers and Traders Trust
Company (incorporated by reference to Exhibit 10.1 to the Company's
Current Report on Form 8-K filed December 23, 2009)
|
|||
10.4
|
Amendment
1, dated as of February 26, 2010, to the Amended and Restated Credit
Facility Agreement, dated as of December 16, 2009, by and among IEC
Electronics Corp. and Manufacturers and Traders Trust Company
(incorporated by reference to Exhibit 10.1 to the Company's Quarterly
Report on Form 10-Q for the quarter ended March 26, 2010)
|
|||
10.5
|
Second
amended and Restated Credit Facility Agreement, dated as of July 30, 2010,
by and among IEC Electronics Corp. and Manufacturers and Traders Trust
Company (incorporated by reference to Exhibit 10.1 to the Company's
Current Report on Form 8-K filed August 5, 2010)
|
|||
10.6*
|
Form
of Indemnity Agreement between the Company and its directors and executive
officers. (incorporated by reference to Exhibit 10.2 to the Company's
Quarterly Report on Form 10-Q for the quarter ended July 2,
1993)
|
|||
10.7*
|
IEC
Electronics Corp. 2001 Stock Option and Incentive Plan, as amended on
February 4, 2009 (incorporated by reference to Exhibit 10.4 to the
Company's Annual Report on Form 10-K for the year ended September 30,
2009)
|
|||
10.8*
|
Form
of Incentive Stock Option Agreement pursuant to 2001 Stock Option and
Incentive Plan (incorporated by reference to Exhibit 10.5 to the Company's
Annual Report on Form 10-K for the year ended September 30,
2009)
|
|||
10.9*
|
Form
of Outside Director Stock Option Agreement pursuant to 2001 Stock Option
and Incentive Plan (incorporated by reference to Exhibit 10.6
to the Company's Annual Report on Form 10-K for the year ended September
30, 2009)
|
|||
10.10*
|
Form
of Restricted Stock Award Agreement pursuant to 2001 Stock Option and
Incentive Plan (incorporated by reference to Exhibit 10.7 to the Company's
Annual Report on Form 10-K for the year ended September 30,
2009)
|
|||
10.11*
|
Form
of Challenge Award Option Agreement granted to senior management in Fiscal
2005 (incorporated by reference to Exhibit 10.14 to the Company’s Annual
Report on Form 10-K for the year ended September 30, 2005)
|
|||
10.12*
|
Form
of First Amendment to Challenge Award Option Agreement dated as of
September 29, 2006 (incorporated by reference to Exhibit 10.16 to the
Company's Annual Report on Form 10-K for the year ended September 30,
2007)
|
|||
10.13*
|
Form
of Second Amendment to Challenge Award Option Agreement dated as of
January 23, 2008 (incorporated by reference to Exhibit 10.11 to the
Company's Annual Report on Form 10-K for the year ended September 30,
2008)
|
|||
10.14*
|
Restricted
Stock Award Agreement between the Company and Jeffrey T. Schlarbaum dated
as of May 14, 2008 (incorporated by reference to Exhibit 10.15 to the
Company's Annual Report on Form 10-K for the year ended September 30,
2008)
|
|||
10.15*
|
Restricted
Stock Award Agreement between the Company and Donald S. Doody dated as of
May 14, 2008 (incorporated by reference to Exhibit 10.16 to the Company's
Annual Report on Form 10-K for the year ended September 30,
2008)
|
|||
10.16*
|
Separation
Agreement between the Company and Brian Davis dated February 15, 2008
(incorporated by reference to Exhibit 10.17 to the Company's Annual Report
on Form 10-K for the year ended September 30, 2008)
|
Exhibit
No.
|
Title
|
Page
|
||
10.17*
|
Independent
Consulting Agreement between the Company and Brian Davis dated February
15, 2008 (incorporated by reference to Exhibit 10.18 to the Company's
Annual Report on Form 10-K for the year ended September 30,
2008)
|
|||
10.18*
|
Separation
Agreement between the Company and Michael Schlehr dated May 24, 2010 and
Appendix A thereto (Independent Consulting Agreement) (incorporated by
reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 25, 2010)
|
|||
10.19*
|
Employment
Agreement between the Company and W. Barry Gilbert, effective April 24,
2009 (incorporated by reference to Exhibit 10.1 to the Company's Current
Report on Form 8-K filed April 30, 2009)
|
|||
10.20*
|
First
Amendment, dated September 17, 2010 and effective October 1, 2010, to the
Employment Agreement, dated April 24, 2009 between the Company and W.
Barry Gilbert (incorporated by reference to Exhibit 10.1 to the Company's
Current Report on Form 8-K filed October 1, 2010)
|
|||
10.21*
|
Offer
of Employment Letter Agreement between the Company and Susan E.
Topel-Samek dated May 19, 2010 (incorporated by reference to Exhibit 10.2
to the Company's Quarterly Report on Form 10-Q for the quarter ended June
25, 2010)
|
|||
10.22*
|
Salary
Continuation and Non-Competition Agreement dated and effective as of
October 1, 2010 between the Company and Jeffrey T.
Schlarbaum
|
|||
10.23*
|
Salary
Continuation and Non-Competition Agreement dated and effective as of
October 1, 2010 between the Company and Donald S. Doody
|
|||
10.24*
|
Summary
of the Company's 2010 Management Incentive Plan
|
|||
10.25*
|
Summary
of the Company's 2010 Long-Term Incentive Plan
|
|||
10.26*
|
IEC
Electronics Corp. Management Deferred Compensation Plan, effective January
1, 2009 (incorporated by reference to Exhibit 10.21 to the Company's
Annual Report on Form 10-K for the year ended September 30,
2009)
|
|||
10.27*
|
IEC
Electronics Corp. Board of Directors Deferred Compensation Plan, effective
January 1, 2009 (incorporated by reference to Exhibit 10.22 to the
Company's Annual Report on Form 10-K for the year ended September 30,
2009)
|
|||
10.28
|
Settlement
Agreement dated March 17, 2009 by and among the Company, Val-U-Tech Corp.,
Kathleen Brudek, Michael Brudek and Nicholas Vaseliv (incorporated by
reference to Exhibit 10.1 to the Company's Current Report on Form 8-K
filed on March 23, 2009)
|
|||
14
|
Code
of Business Conduct and Ethics (incorporated by reference to Exhibit 14 to
the Company’s Current Report on Form 8-K filed on September 1,
2004)
|
|||
21.1
|
Subsidiaries
of IEC Electronics Corp.
|
|||
23.1
|
Consent
of Independent Registered Public Accounting Firm
|
|||
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
|
IEC
Electronics Corp.
|
|
By: /s/ W. Barry Gilbert
|
|
W.
Barry Gilbert
|
|
Chief
Executive Officer and Chairman of the
Board
|
Signature
|
Title
|
Date
|
||
/s/
W. Barry Gilbert
|
Chief
Executive Officer and
|
November
19, 2010
|
||
W.
Barry Gilbert
|
Chairman
of the Board
|
|||
(Principal
executive officer and Director)
|
||||
/s/
Susan E. Topel-Samek
|
Vice
President and
|
November
19, 2010
|
||
Susan
E. Topel-Samek
|
Chief
Financial Officer
|
|||
|
(Principal
financial and accounting officer)
|
|||
/s/
Eben S. Moulton
|
Director
|
November
19, 2010
|
||
Eben
S. Moulton
|
||||
/s/
James C. Rowe
|
Director
|
November
19, 2010
|
||
James
C. Rowe
|
||||
/s/
Carl E. Sassano
|
Director
|
November
19, 2010
|
||
Carl
E. Sassano
|
||||
/s/
Amy L. Tait
|
Director
|
November
19, 2010
|
||
Amy
L. Tait
|
||||
/s/
Jerold L. Zimmerman
|
Director
|
November
19, 2010
|
||
Jerold
L. Zimmerman
|
September 30,
|
||||||||
2010
|
2009
|
|||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
(see Cash note)
|
$ | - | $ | - | ||||
Accounts
receivable, net
|
16,315 | 10,354 | ||||||
Inventories
|
12,068 | 6,491 | ||||||
Deferred
income taxes
|
3,359 | 2,050 | ||||||
Other
current assets
|
234 | 110 | ||||||
Total
current assets
|
31,976 | 19,005 | ||||||
Fixed
assets:
|
||||||||
Land
and improvements
|
1,556 | 742 | ||||||
Buildings
and improvements
|
9,581 | 4,339 | ||||||
Machinery
and equipment
|
15,434 | 10,335 | ||||||
Furniture
and fixtures
|
4,833 | 4,131 | ||||||
Total
fixed assets, at cost
|
31,404 | 19,547 | ||||||
Less:
Accumulated depreciation
|
(18,306 | ) | (17,156 | ) | ||||
Net
fixed assets
|
13,098 | 2,391 | ||||||
Intangible
asset (net of $29 amortization)
|
331 | - | ||||||
Deferred
income taxes
|
10,113 | 13,026 | ||||||
Other
assets (Goodwill: $58 in 2010, none in 2009)
|
164 | 47 | ||||||
Total
assets
|
$ | 55,682 | $ | 34,469 | ||||
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Current
portion of long-term debt
|
$ | 2,899 | $ | 1,147 | ||||
Accounts
payable
|
8,145 | 4,183 | ||||||
Accrued
payroll and related expenses
|
2,279 | 1,564 | ||||||
Other
accrued expenses
|
941 | 531 | ||||||
Customer
deposits
|
- | 190 | ||||||
Total
current liabilities
|
14,264 | 7,615 | ||||||
Long-term
debt
|
15,999 | 6,600 | ||||||
Total
liabilities
|
30,263 | 14,215 | ||||||
SHAREHOLDERS'
EQUITY
|
||||||||
Preferred
stock, $.01 par value: 500,000 shares authorized; Issued and
outstanding-none
|
- | - | ||||||
Common
Stock, $.01 par value: 50,000,000 shares authorized; 10,100,589 and
9,747,283 shares issued
|
101 | 97 | ||||||
Treasury
stock, at cost: 1,012,873 shares
|
(1,413 | ) | (1,413 | ) | ||||
Additional
paid-in capital
|
41,138 | 40,632 | ||||||
Accumulated
deficit
|
(14,407 | ) | (19,062 | ) | ||||
Total
shareholders' equity
|
25,419 | 20,254 | ||||||
Total
liabilities and shareholders' equity
|
$ | 55,682 | $ | 34,469 |
Year ended September 30,
|
||||||||
2010
|
2009
|
|||||||
Net
sales
|
$ | 96,674 | $ | 67,811 | ||||
Cost
of sales
|
80,411 | 56,985 | ||||||
Gross
profit
|
16,263 | 10,826 | ||||||
Selling
and administrative expenses
|
8,576 | 6,006 | ||||||
Operating
profit
|
7,687 | 4,820 | ||||||
Interest
and financing expense
|
814 | 389 | ||||||
Other
(income)/expense
|
(182 | ) | (287 | ) | ||||
Income
before provision for income taxes
|
7,055 | 4,718 | ||||||
Provision
(benefit) for income taxes:
|
||||||||
Currently
payable
|
249 | 97 | ||||||
Tax
expense (offset by NOL carryforwards)
|
2,151 | (335 | ) | |||||
Total
provision (benefit) for income taxes
|
2,400 | (238 | ) | |||||
Net
income
|
$ | 4,655 | $ | 4,956 | ||||
Net
income per common and common equivalent share:
|
||||||||
Basic
|
$ | 0.52 | $ | 0.57 | ||||
Diluted
|
0.48 | 0.52 | ||||||
Weighted
average number of common and common equivalent shares
outstanding:
|
||||||||
Basic
|
8,990,180 | 8,728,930 | ||||||
Diluted
|
9,608,174 | 9,553,526 |
Common
|
Treasury
|
Additional
|
Retained
|
Total
|
||||||||||||||||
Stock,
|
Stock,
|
Paid-In
|
Earnings
|
Shareholders'
|
||||||||||||||||
par
$.01
|
at
cost
|
Capital
|
(Deficit)
|
Equity
|
||||||||||||||||
Balances,
September 30, 2008
|
$ | 93 | $ | (223 | ) | $ | 40,124 | $ | (24,018 | ) | $ | 15,976 | ||||||||
Stock
compensation accruals
|
131 | 131 | ||||||||||||||||||
Directors'
fees paid in stock
|
44 | 44 | ||||||||||||||||||
Restricted
(non-vested) stock grants
|
- | - | ||||||||||||||||||
Exercise
of stock options
|
4 | 333 | 337 | |||||||||||||||||
Acquisition
of treasury shares
|
(1,190 | ) | (1,190 | ) | ||||||||||||||||
Net
income/ Comprehensive income
|
4,956 | 4,956 | ||||||||||||||||||
Balances,
September 30, 2009
|
97 | (1,413 | ) | 40,632 | (19,062 | ) | 20,254 | |||||||||||||
Stock
compensation accruals
|
282 | 282 | ||||||||||||||||||
Directors'
fees paid in stock
|
32 | 32 | ||||||||||||||||||
Restricted
(non-vested) stock grants
|
1 | 1 | ||||||||||||||||||
Exercise
of stock options
|
3 | 192 | 195 | |||||||||||||||||
Net
income/ Comprehensive income
|
4,655 | 4,655 | ||||||||||||||||||
Balances,
September 30, 2010
|
$ | 101 | $ | (1,413 | ) | $ | 41,138 | $ | (14,407 | ) | $ | 25,419 |
Year
ended September 30,
|
||||||||
2010
|
2009
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net
income
|
$ | 4,655 | $ | 4,956 | ||||
Non-cash
adjustments:
|
||||||||
Stock-based
compensation
|
282 | 131 | ||||||
Depreciation
and amortization
|
1,224 | 282 | ||||||
Directors'
fees paid in stock
|
32 | 44 | ||||||
(Gain)/loss
on sale of fixed assets
|
(8 | ) | (5 | ) | ||||
Gain
on corporate acquisition
|
(418 | ) | - | |||||
Deferred
tax expense (benefit)
|
2,151 | (335 | ) | |||||
Changes
in current assets and liabilities:
|
||||||||
Accounts
receivable
|
(1,453 | ) | (9 | ) | ||||
Inventories
|
(937 | ) | (260 | ) | ||||
Other
current assets
|
(32 | ) | (46 | ) | ||||
Accounts
payable
|
2,620 | (1,942 | ) | |||||
Accrued
expenses
|
(96 | ) | 685 | |||||
Customer
deposits
|
(190 | ) | (475 | ) | ||||
Net
cash flows from operating activities
|
7,830 | 3,026 | ||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchases
of fixed assets
|
(2,173 | ) | (1,816 | ) | ||||
Proceeds
from sale of fixed assets
|
10 | 11 | ||||||
Acquisition
of GTC (see Acquisitions note)
|
(14,932 | ) | - | |||||
Acquisition
of Celmet (see Acquisitions note)
|
(1,898 | ) | - | |||||
Net
cash flows from investing activities
|
(18,993 | ) | (1,805 | ) | ||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Increase
(decrease) in borrowings under revolving line *
|
1,942 | (1,110 | ) | |||||
Borrowings
under other loan agreements
|
11,316 | 828 | ||||||
Repayments
under loan agreements and notes
|
(2,207 | ) | (1,135 | ) | ||||
Proceeds
from exercise of stock options
|
196 | 196 | ||||||
Financing
costs capitalized
|
(84 | ) | - | |||||
Net
cash flows from financing activities
|
11,163 | (1,221 | ) | |||||
Net
cash flows for the period
|
0 | 0 | ||||||
Cash
and cash equivalents, beginning of period
|
0 | 0 | ||||||
Cash
and cash equivalents, end of period
|
$ | 0 | $ | 0 | ||||
Supplemental
disclosure of cash flow information:
|
||||||||
Cash
paid during the period for:
|
||||||||
Interest
|
$ | 769 | $ | 419 | ||||
Income
taxes
|
297 | 26 | ||||||
Supplemental
disclosure of non-cash adjustments:
|
||||||||
Deferred
tax adjustment relating to seller notes
|
$ | - | $ | 844 | ||||
Deferred
tax adjustment relating to shares returned
|
- | 1,050 | ||||||
Stock
option exercise paid for by delivering common shares
|
- | 140 |
NOTE
1.
|
OUR
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
|
|
§
|
A
world class Technology Center that combines dedicated prototype
manufacturing with an on-site Materials Analysis Lab (headed by two staff
PhD’s) enabling the seamless transition of complex electronics from design
to production.
|
|
§
|
In-house
custom, functional test development supporting complex system-level
assembly, test, troubleshooting and end-order
fulfillment.
|
|
§
|
An
authentic Lean/Six Sigma continuous improvement program supported by five
certified Six Sigma Blackbelts delivering best-in-class
results.
|
|
§
|
An
industry-leading Web Portal providing customers real-time access to a wide
array of critical data.
|
Estimated
|
||
Useful
Lives
|
||
(years)
|
||
Land
improvements
|
10
|
|
Buildings
and improvements
|
5
to 40
|
|
Machinery
and equipment
|
3
to 5
|
|
Furniture
and fixtures
|
3
to 7
|
Year
ended September 30,
|
||||||||
Shares for EPS Calculation
|
2010
|
2009
|
||||||
Weighted
avg. shares outstanding
|
8,990,180 | 8,728,930 | ||||||
Incremental
shares from assumed exercise of stock options
|
617,994 | 824,596 | ||||||
Diluted
shares
|
9,608,174 | 9,553,526 | ||||||
Options
excluded from diluted shares due to exercise price being higher
than average market price
|
34,000 | 20,000 |
NOTE
2.
|
ACQUISITIONS
|
GTC Opening Balance Sheet
|
December
16, 2009
|
|||
(thousands)
|
||||
Accounts
receivable, net
|
$ | 3,931 | ||
Inventories
|
4,276 | |||
Other
current assets
|
69 | |||
Land
|
813 | |||
Building
|
5,074 | |||
Equipment
|
2,761 | |||
Intangible
asset
|
360 | |||
Deferred
income taxes
|
485 | |||
Total
assets acquired
|
17,769 | |||
Accounts
payable
|
$ | 1,128 | ||
Accruals
and other liabilities
|
1,191 | |||
Gain
on acquisition
|
418 | |||
Long-term
debt
|
100 | |||
Total
liabilities assumed
|
2,837 | |||
Net
assets acquired/purchase price
|
$ | 14,932 | ||
(Purchase
price funded with bank debt)
|
Celmet Division Opening Balance
Sheet
|
July
30, 2010
|
|||
(thousands)
|
||||
Accounts
receivable, net
|
$ | 577 | ||
Inventories
|
364 | |||
Other
current assets
|
23 | |||
Equipment
|
1,058 | |||
Goodwill
|
58 | |||
Deferred
income taxes
|
62 | |||
Total
assets acquired
|
2,142 | |||
Accounts
payable
|
$ | 214 | ||
Accruals
and other liabilities
|
30 | |||
Total
liabilities assumed
|
244 | |||
Net
assets acquired/purchase price
|
$ | 1,898 | ||
(Purchase
price funded with bank debt)
|
GTC and Celmet Actual 2010
Results
|
||||||||
and IEC Pro Forma Results for 2010 and
2009
|
Year
ended September 30,
|
|||||||
2010
|
2009
|
|||||||
(in
thousands, except share and per share data)
|
||||||||
Acquiree results from dates of
acquistion
|
||||||||
Net
sales
|
$ | 18,537 | $ | - | ||||
Income
before income taxes
|
2,437 | - | ||||||
Net
income
|
1,502 | - | ||||||
IEC results, as if acquisitions on October
1
|
(Unaudited)
|
|||||||
Net
sales
|
$ | 104,877 | $ | 96,934 | ||||
Income
before income taxes
|
7,133 | 6,365 | ||||||
Net
income
|
4,696 | 5,975 | ||||||
Earnings
per share:
|
||||||||
Basic
|
$ | 0.52 | $ | 0.68 | ||||
Diluted
|
0.49 | 0.63 | ||||||
Weighted
average common and common equivalent shares:
|
||||||||
Basic
|
8,990,180 | 8,728,930 | ||||||
Diluted
|
9,608,174 | 9,553,526 |
NOTE
3.
|
ALLOWANCE
FOR DOUBTFUL ACCOUNTS
|
Year ended September 30,
|
||||||||
Allowance for Doubtful Accounts
|
2010
|
2009
|
||||||
(thousands)
|
||||||||
Allowance, beginning of
year
|
$ | 85 | $ | 145 | ||||
Allowances of acquired
companies
|
17 | - | ||||||
Provision for doubtful
accounts
|
254 | 15 | ||||||
Write-offs
|
(106 | ) | (75 | ) | ||||
Recoveries
|
- | - | ||||||
Allowance, end of
year
|
$ | 250 | $ | 85 |
NOTE
4.
|
INVENTORIES
|
September 30,
|
||||||||
Inventories
|
2010
|
2009
|
||||||
(thousands)
|
||||||||
Raw
materials
|
$ | 7,993 | $ | 3,944 | ||||
Work-in-process
|
3,974 | 2,555 | ||||||
Finished
goods
|
1,012 | 571 | ||||||
Total
inventories
|
12,979 | 7,070 | ||||||
Reserve
for excess and obsolete
inventory
|
(911 | ) | (579 | ) | ||||
Inventories,
net
|
$ | 12,068 | $ | 6,491 |
NOTE
5.
|
CREDIT
FACILITIES
|
Fixed/
|
Interest Rate
|
|||||||||||||||||||
Variable
|
September 30,
|
September 30,
|
||||||||||||||||||
Debt
|
Rate
|
Maturity
|
2010
|
2009
|
2010
|
2009
|
||||||||||||||
(percents)
|
(thousands)
|
|||||||||||||||||||
M&T
borrowings
|
||||||||||||||||||||
Revolving
credit facility
|
v
|
12/16/12
|
3.50
|
1.75
|
$ |
5,823
|
$ | 3,881 | ||||||||||||
GTC
term loan
|
v
|
12/16/14
|
3.75
|
-
|
4,250 | |||||||||||||||
Mortgage
loan
|
v
|
12/16/14
|
3.75
|
-
|
3,800 | |||||||||||||||
Celmet
term loan
|
v
|
07/30/15
|
3.75
|
|
-
|
1,933 | ||||||||||||||
Equipment
loan, variable
|
v
|
12/16/12
|
3.75
|
-
|
273 | |||||||||||||||
Equipment
loans (3), fixed
|
f
|
11/01/12
|
3.07
|
3.08
|
521 | 728 | ||||||||||||||
Term
loan
|
f
|
01/01/12
|
6.70
|
6.70
|
435 | 775 | ||||||||||||||
Energy
loan
|
f
|
04/02/13
|
2.08
|
2.08
|
105 | 146 | ||||||||||||||
Other
borrowings
|
||||||||||||||||||||
Seller
notes, Wire & Cable
|
f
|
06/01/13
|
4.00
|
4.00
|
1,658 | 2,217 | ||||||||||||||
GTC
industrial revenue bond
|
f
|
03/01/19
|
5.63
|
-
|
100 | |||||||||||||||
Total
debt
|
18,898 | 7,747 | ||||||||||||||||||
Less:
current portion
|
(2,899 | ) | (1,147 | ) | ||||||||||||||||
Long-term
debt
|
$ | 15,999 | $ | 6,600 |
Type
|
Actual at
|
|||||||
Covenant
|
of limit
|
Limit
|
September 30, 2010
|
|||||
($ in
thousands)
|
||||||||
Fourth quarter
EBITDARS
|
Lower
|
$1,000
|
$3,208
|
|||||
Annual
EBITDARS
|
Lower
|
$5,000
|
$10,629
|
|||||
Total debt to
EBITDARS
|
Upper
|
3.00x
|
1.88x
|
|||||
Fixed charge
coverage
|
Lower
|
1.25x
|
1.98x
|
Years
ending
|
Debt
|
|||
September
30,
|
Maturities
|
|||
(thousands)
|
||||
2011
|
$ | 2,899 | ||
2012
|
2,678 | |||
2013*
|
8,154 | |||
2014
|
1,730 | |||
2015
|
3,437 | |||
*Includes Revolver
balance of $5,823 as
of September 30,
2010.
|
NOTE
6.
|
INCOME
TAXES
|
Income Tax Provision
|
Year ended September 30,
|
|||||||
2010
|
2009
|
|||||||
Current tax
expense:
|
(thousands)
|
|||||||
State
|
$ | 107 | $ | 2 | ||||
Federal
|
142 | 95 | ||||||
Deferred tax expense
(benefit):
|
||||||||
State
|
(20 | ) | (10 | ) | ||||
Federal
|
2,171 | (325 | ) | |||||
Total income tax provision
(benefit)
|
$ | 2,400 | $ | (238 | ) |
Year
ended September 30,
|
||||||||
Taxes
as Percent of Pretax Income
|
2010
|
2009
|
||||||
Federal
statutory rate
|
34.0 | % | 34.0 | % | ||||
State
income taxes, net of federal benefit
|
0.8 | 1.0 | ||||||
Untaxed
gain on corporate acquisition
|
(2.0 | ) | ||||||
Reduction
in deferred tax valuation allowance
|
(40.0 | ) | ||||||
Other
|
1.2 | |||||||
Income
tax provision (benefit) as percent of pretax
income
|
34.0 | % | (5.0 | )% |
September
30,
|
||||||||
Deferred Tax
Assets
|
2010
|
2009
|
||||||
(thousands)
|
||||||||
Net operating loss
carryover
|
$ | 11,862 | $ | 13,702 | ||||
Alternative minimum tax credit
carryover
|
373 | 238 | ||||||
Depreciation and fixed
assets
|
287 | 546 | ||||||
New York State investment tax
& other credits
|
1,765 | 3,265 | ||||||
Inventories
|
367 | 140 | ||||||
Other
|
583 | 292 | ||||||
Total before
allowance
|
15,237 | 18,183 | ||||||
Valuation
allowance
|
(1,765 | ) | (3,107 | ) | ||||
Deferred tax asset (current and
deferred)
|
$ | 13,472 | $ | 15,076 |
NOTE
7.
|
WARRANTY
RESERVES
|
Year ended September
30,
|
||||||||
Warranty
Reserve
|
2010
|
2009
|
||||||
(thousands)
|
||||||||
Reserve, beginning of
year
|
$ | 111 | $ | 198 | ||||
Reserves of acquired
companies
|
376 | - | ||||||
Provision for warranty
obligations
|
21 | 54 | ||||||
Warranty
costs
|
(205 | ) | (141 | ) | ||||
Reserve, end of
year
|
$ | 303 | $ | 111 |
NOTE
8.
|
STOCK-BASED
COMPENSATION
|
Valuation of Options |
Year ended September
30,
|
|||||
2010
|
2009
|
|||||
Assumptions for
Black-Scholes:
|
||||||
Risk-free interest
rate
|
2.16%
|
2.25
|
||||
Expected term in
years
|
4.9
|
4.5
|
||||
Volatility
|
54%
|
51
|
||||
Expected annual
dividends
|
|
none
|
none
|
|||
Value of options
granted:
|
||||||
Number of options
granted
|
128,682
|
78,000
|
||||
Weighted average fair
value/share
|
$2.24
|
$0.92
|
||||
Fair value of options
granted
|
$288,248
|
$71,760
|
Year ended September
30,
|
||||||||||||||||
2010
|
2009
|
|||||||||||||||
Wgtd Avg
|
Wgtd Avg
|
|||||||||||||||
Number
|
Exercise
|
Number
|
Exercise
|
|||||||||||||
Stock
Options
|
of Options
|
Price
|
of Options
|
Price
|
||||||||||||
Outstanding at beginning of
year
|
973,722 | $ |
1.10
|
1,411,937 | $ |
0.97
|
||||||||||
Granted
|
128,682 |
4.69
|
78,000 |
1.80
|
||||||||||||
Exercised
|
(231,467 | ) |
0.82
|
(378,583 | ) |
0.82
|
||||||||||
Forfeited
|
(106,342 | ) |
2.02
|
(137,632 | ) |
|
0.97
|
|||||||||
Outstanding at end of
year
|
764,595 | $ |
1.66
|
973,722 | $ |
1.10
|
||||||||||
For exercisable options at year
end:
|
||||||||||||||||
Number
exercisable
|
474,868 | $ |
0.80
|
622,734 | $ |
0.71
|
||||||||||
Wgtd. avg. remaining term, in
years
|
2.7 | 3.0 |
Year ended September
30,
|
||||||||||||||||
2010
|
2009
|
|||||||||||||||
Number of
|
Wgtd Avg
|
Number of
|
Wgtd Avg
|
|||||||||||||
Non-vested
|
Grant Date
|
Non-vested
|
Grant Date
|
|||||||||||||
Restricted (Non-vested)
Stock
|
Shares
|
Fair Value
|
Shares
|
Fair Value
|
||||||||||||
Outstanding at beginning of
year
|
10,000 | $ |
3.41
|
27,000 | $ |
2.10
|
||||||||||
Granted
|
145,351 |
4.10
|
10,000 |
3.41
|
||||||||||||
Vesting
|
- | (27,000 | ) |
2.10
|
||||||||||||
Forfeited
|
(33,253 | ) |
3.63
|
- |
-
|
|||||||||||
Outstanding at end of
year
|
122,098 | $ |
4.10
|
10,000 | $ |
3.41
|
||||||||||
For non-vested shares at year
end:
|
||||||||||||||||
Compensation not yet recognized
(000s)
|
$ |
395
|
$ |
34
|
||||||||||||
Wgtd. avg. remaining years for
vesting
|
3.5
|
3.8
|
NOTE
9.
|
MAJOR
CUSTOMERS AND CREDIT RISK
|
Industry
Sectors and Large Customers
|
Year ended September
30,
|
|||||||
2010
|
2009
|
|||||||
% of Sales by
Sector
|
||||||||
Military &
Aerospace
|
58%
|
|
55%
|
|||||
Industrial &
Communications
|
29%
|
37%
|
||||||
Medical &
Other
|
13%
|
8%
|
||||||
100%
|
100%
|
|||||||
Customers Representing Over 10% of
Sales
|
||||||||
General
Electric
|
14%
|
15%
|
||||||
Ultralife
|
|
< 10%
|
13%
|
|||||
ViaSat,
Inc.
|
< 10%
|
12%
|
||||||
Percent of 9/30 receivables owed
by customers
|
||||||||
with balances exceeding 10% of
total
|
11%
|
24%
|
NOTE
10.
|
LITIGATION
|
NOTE
11.
|
COMMITMENTS
AND CONTINGENCIES
|
Year ending
|
Annual lease
|
|||
September 30,
|
obligations
|
|||
(thousands)
|
||||
2011
|
$ | 953 | ||
2012
|
953 | |||
2013
|
619 | |||
2014
|
210 | |||
2015
|
6 | |||
Total minimum lease
obligation
|
$ | 2,741 | ||
Total rent
expense:
|
||||
2009
|
$ | 707 | ||
2010
|
774 |
NOTE
12.
|
RETIREMENT
PLAN
|
NOTE
13.
|
SELECTED
QUARTERLY FINANCIAL DATA
(Unaudited)
|
Basic
|
Diluted
|
|||||||||||||||||||
Gross
|
Net
|
Earnings
|
Earnings
|
|||||||||||||||||
Net sales
|
Profit
|
Income
|
Per Share
|
Per Share
|
||||||||||||||||
(in thousands, except per
share)
|
||||||||||||||||||||
Fiscal
Quarters
|
||||||||||||||||||||
First 2009
|
$ | 15,857 | $ | 2,233 | $ | 532 | $ | 0.06 | $ | 0.06 | ||||||||||
Second 2009
|
16,335 | 2,607 | 2,618 | 0.30 | 0.29 | |||||||||||||||
Third 2009
|
17,346 | 2,790 | 903 | 0.11 | 0.10 | |||||||||||||||
Fourth 2009
|
18,273 | 3,196 | 903 | 0.10 | 0.09 | |||||||||||||||
First 2010
|
$ | 18,060 | $ | 2,813 | $ | 753 | $ | 0.09 | $ | 0.08 | ||||||||||
Second 2010
|
25,232 | 4,018 | 1,036 | 0.12 | 0.11 | |||||||||||||||
Third 2010
|
26,095 | 4,656 | 1,238 | 0.14 | 0.13 | |||||||||||||||
Fourth 2010
|
27,287 | 4,776 | 1,628 | 0.18 | 0.17 |