IEC Electronics Corp (NASDAQ:IEC) an electronic manufacturing services company, reported fiscal first-quarter 2020 results Wednesday, marking sixth consecutive quarters of impressive sequential revenue growth.
The Newark, New York-based company reported revenue of $44.7 million for the fiscal first quarter ended December 27, 2019, an increase of 26.2% compared to $35.4 million recorded in the first quarter the year before.
In response, investors sent IEC shares up 9.9% to $9 in late-morning trade.
In a statement accompanying the company’s latest numbers, IEC Electronics CEO Jeffrey T Schlarbaum said fiscal 2020 is off to a “strong start.”
“We reported not only substantial revenue growth of 26% over the same quarter last year but also our sixth consecutive quarter of sequential revenue growth,” said Schlarbaum.
“IEC has now consistently achieved revenue in excess of $40 million for the past three quarters, a key revenue milestone we had targeted when we initiated the turnaround of the business,” he added.
Gross profit for the first quarter of fiscal 2020 was $5.2 million, or 11.7% of sales which included the negative impact of a one-time inventory reserve of $1 million related to a reorganization at one of the company’s customers in the medical sector.
“During the first quarter we recorded a one-time inventory reserve of $1 million due to the reorganization at one of our end customers in the medical sector in late 2019,” explained Schlarbaum.
“Our gross margin for the first quarter of fiscal 2020 was 11.7% of sales. Excluding the one-time reserve, our adjusted gross margin would have been 13.9% of sales, consistent with gross margin for fiscal 2019. The scale and diversity in the customer base which we have greatly enhanced over the past few years provide a stronger foundation to absorb unforeseen customer events such as this,” he added.
The company reported net income of $1.2 million, or $0.11 per share for the first quarter of fiscal 2020, compared to net income of $1.1 million, or $0.10 per share in the first quarter of fiscal 2019.
Most importantly, adjusted for the impact of the one-time inventory reserve, adjusted net income per share would have been $0.19 per basic and $0.18 per diluted share.
Meanwhile, selling and admin expenses were $3.3 million in the first quarter of fiscal 2020, or 7.4% of sales, as compared to $3.4 million, or 9.5% of sales, in the first quarter of fiscal 2019. Operating profit was $1.9 million for the first quarter of fiscal 2020, an increase of 13.6% when compared to the same quarter in the prior fiscal year.
The IEC Electronics boss said the company entered fiscal 2020 with a “robust backlog.”
“Our pipeline remains strong. Our new state-of-the-art facility is expected to be opened this year, and with our proven success providing vertically integrated manufacturing solutions for lifesaving and mission critical products, we believe we are competitively positioned to win new customers,” said Schlarbaum.
Founded in 1966, IEC, together with its subsidiaries, provides electronic manufacturing services to the defense, medical, industrial, and aerospace sectors in the US.
Contact the author Uttara Choudhury at [email protected]
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