Attached files
file | filename |
---|---|
EX-31.1 - IEC ELECTRONICS CORP | v210260_ex31-1.htm |
EX-32.1 - IEC ELECTRONICS CORP | v210260_ex32-1.htm |
EX-31.2 - IEC ELECTRONICS CORP | v210260_ex31-2.htm |
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 31,
2010
or
¨ Transition Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
For the
transition period from ____ to ____
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)
Registrant's
telephone number, including area code: 315-331-7742
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 has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data file required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (sec. 232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files).
Yes ¨ No ¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer”,
“accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check one)
Large
accelerated filer
|
¨
|
Accelerated
filer
|
¨
|
Non-Accelerated
filer
|
¨
|
Smaller
Reporting Company
|
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 practicable date (exclude treasury shares):
Common
Stock, $0.01 par value - 9,517,018 shares as of February 4, 2011
PART I -
FINANCIAL INFORMATION
Page
|
|||
Number
|
|||
Item
1.
|
Financial
Statements
|
||
Consolidated
Balance Sheets as of December 31, 2010 (Unaudited) and
|
|||
September
30, 2010
|
3
|
||
Consolidated
Income Statements for the three months ended December 31,
2010
|
|||
and
December 25, 2009 (Unaudited)
|
4
|
||
Consolidated
Statements of Comprehensive Income and Shareholders' Equity
for
|
|||
the
three months ended December 31, 2010 and December 25, 2009
(Unaudited)
|
5
|
||
Consolidated
Statements of Cash Flows for the three months ended December
31,
|
|||
2010
and December 25, 2009 (Unaudited)
|
6
|
||
Notes
to Consolidated Financial Statements (Unaudited)
|
7
|
||
Item
2.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
23
|
|
Item
3.
|
Quantitative
and Qualitative Disclosures about Market Risk
|
25
|
|
Item
4.
|
Controls
and Procedures
|
25
|
|
PART
II -
|
OTHER
INFORMATION
|
||
|
|||
Item
1.
|
Legal
Proceedings
|
27
|
|
Item
1A.
|
Risk
Factors
|
27
|
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
27
|
|
Item
3.
|
Defaults
Upon Senior Securities
|
27
|
|
Item
4.
|
(Removed
and Reserved)
|
27
|
|
|
|||
Item
5.
|
Other
Information
|
27
|
|
Item
6.
|
Exhibits
|
27
|
|
Signatures
|
28
|
2
PART
I - FINANCIAL INFORMATION
Item
1. Financial
Statements
IEC
ELECTRONICS CORP. AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
DECEMBER
31 AND SEPTEMBER 30, 2010
(in
thousands, except share and per share data)
December
31,
|
September
30,
|
|||||||
2010
|
2010
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
(see Cash note)
|
$ | - | $ | - | ||||
Accounts
receivable, net of allowance
|
18,855 | 16,315 | ||||||
Inventories
(see Inventories note)
|
18,841 | 12,068 | ||||||
Deferred
income taxes
|
4,329 | 3,359 | ||||||
Other
current assets
|
1,156 | 234 | ||||||
Total
current assets
|
43,181 | 31,976 | ||||||
Fixed
assets, net of accumulated depreciation (see Fixed Assets
note)
|
14,832 | 13,098 | ||||||
Intangible
assets, net of accumulated amortization (Intangibles note)
|
420 | 331 | ||||||
Goodwill
|
21,147 | 58 | ||||||
Deferred
income taxes (see Income Taxes note)
|
8,679 | 10,113 | ||||||
Other
assets
|
221 | 106 | ||||||
Total
assets
|
$ | 88,480 | $ | 55,682 | ||||
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Current
portion of long-term debt
|
$ | 6,905 | $ | 2,899 | ||||
Accounts
payable
|
10,105 | 8,145 | ||||||
Accrued
payroll and related expenses
|
1,591 | 2,279 | ||||||
Other
accrued expenses
|
1,186 | 941 | ||||||
Customer
deposits
|
1,093 | - | ||||||
Total
current liabilities
|
20,880 | 14,264 | ||||||
Long-term
debt (see Credit Facilities note)
|
40,392 | 15,999 | ||||||
Total
liabilities
|
61,272 | 30,263 | ||||||
SHAREHOLDERS'
EQUITY
|
||||||||
Preferred
stock, $.01 par value: 500,000 shares authorized; none issued or
outstanding
|
- | - | ||||||
Common
stock, $.01 par value: 50,000,000 shares authorized; 10,359,057 and
10,100,589 shares issued, respectively
|
103 | 101 | ||||||
Additional
paid-in capital
|
41,876 | 41,138 | ||||||
Accumulated
deficit
|
(13,358 | ) | (14,407 | ) | ||||
Treasury
stock, at cost: 1,012,873 shares
|
(1,413 | ) | (1,413 | ) | ||||
Total
shareholders' equity
|
27,208 | 25,419 | ||||||
Total
liabilities and shareholders' equity
|
$ | 88,480 | $ | 55,682 |
The
accompanying notes are an integral part of these consolidated financial
statements.
3
IEC
ELECTRONICS CORP. AND SUBSIDIARIES
CONSOLIDATED
INCOME STATEMENTS
THREE-MONTH
PERIODS ENDED DECEMBER 31, 2010 and DECEMBER 25, 2009
(in
thousands, except share and per share data)
Three months ended
|
||||||||
December
31,
|
December
25,
|
|||||||
2010
|
2009
|
|||||||
(Unaudited)
|
||||||||
Net
sales
|
$ | 28,644 | $ | 18,060 | ||||
Cost
of sales
|
24,061 | 15,247 | ||||||
Gross
profit
|
4,583 | 2,813 | ||||||
Selling
and administrative expenses
|
2,620 | 1,500 | ||||||
Operating
profit
|
1,963 | 1,313 | ||||||
Interest
and financing expense
|
244 | 95 | ||||||
Other
(income)/expense
|
13 | 58 | ||||||
Income
before provision for income taxes
|
1,706 | 1,160 | ||||||
Provision
for income taxes
|
657 | 406 | ||||||
Net
income
|
$ | 1,049 | $ | 754 | ||||
Net
income per common and common equivalent share:
|
||||||||
Basic
|
$ | 0.11 | $ | 0.09 | ||||
Diluted
|
0.11 | 0.08 | ||||||
Weighted
average number of common and common equivalent shares
outstanding:
|
||||||||
Basic
|
9,224,877 | 8,828,604 | ||||||
Diluted
|
9,766,022 | 9,526,342 |
The
accompanying notes are an integral part of these consolidated financial
statements.
4
IEC
ELECTRONICS CORP. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS of COMPREHENSIVE INCOME and SHAREHOLDERS' EQUITY
THREE-MONTH
PERIODS ENDED DECEMBER 31, 2010 and DECEMBER 25, 2009
(thousands,
except per share)
(Unaudited)
Common
|
Additional
|
Retained
|
Treasury
|
Total
|
||||||||||||||||
Stock,
|
Paid-In
|
Earnings
|
Stock,
|
Shareholders'
|
||||||||||||||||
par $.01
|
Capital
|
(Deficit)
|
at cost
|
Equity
|
||||||||||||||||
Balances,
September 30, 2009
|
$ | 97 | $ | 40,632 | $ | (19,062 | ) | $ | (1,413 | ) | $ | 20,254 | ||||||||
Stock
compensation accruals
|
34 | 34 | ||||||||||||||||||
Directors'
fees paid in stock
|
5 | 5 | ||||||||||||||||||
Restricted
(non-vested) stock grants
|
- | - | ||||||||||||||||||
Exercise
of stock options
|
1 | 28 | 29 | |||||||||||||||||
Net
income/ Comprehensive income
|
754 | 754 | ||||||||||||||||||
Balances,
December 25, 2009
|
$ | 98 | $ | 40,699 | $ | (18,308 | ) | $ | (1,413 | ) | $ | 21,076 | ||||||||
Balances,
September 30, 2010
|
$ | 101 | $ | 41,138 | $ | (14,407 | ) | $ | (1,413 | ) | $ | 25,419 | ||||||||
Stock
compensation accruals
|
76 | 76 | ||||||||||||||||||
Directors'
fees paid in stock
|
11 | 11 | ||||||||||||||||||
Restricted
(non-vested) stock grants
|
1 | 1 | ||||||||||||||||||
Exercise
of stock options
|
32 | 32 | ||||||||||||||||||
Shares
issued in SCB acquisition
|
1 | 608 | 609 | |||||||||||||||||
Employee
stock plan purchases
|
11 | 11 | ||||||||||||||||||
Net
income/ Comprehensive income
|
1,049 | 1,049 | ||||||||||||||||||
Balances,
December 31, 2010
|
$ | 103 | $ | 41,876 | $ | (13,358 | ) | $ | (1,413 | ) | $ | 27,208 |
The
accompanying notes are an integral part of these consolidated financial
statements.
5
IEC
ELECTRONICS CORP. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
THREE-MONTH
PERIODS ENDED DECEMBER 31, 2010 and DECEMBER 25, 2009
(thousands,
except shares)
Three months ended
|
||||||||
December
31,
|
December
25,
|
|||||||
2010
|
2009
|
|||||||
(Unaudited)
|
||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net
income
|
$ | 1,049 | $ | 754 | ||||
Non-cash
adjustments:
|
||||||||
Stock-based
compensation
|
76 | 34 | ||||||
Depreciation
and amortization
|
500 | 135 | ||||||
Directors'
fees paid in stock
|
11 | 5 | ||||||
(Gain)/loss
on sale of fixed assets
|
- | (10 | ) | |||||
Deferred
tax expense
|
570 | 380 | ||||||
Changes
in current assets and liabilities:
|
||||||||
Accounts
receivable
|
(920 | ) | (943 | ) | ||||
Inventories
|
(3,983 | ) | (253 | ) | ||||
Other
current assets
|
59 | (14 | ) | |||||
Accounts
payable
|
1,457 | 2,005 | ||||||
Accrued
expenses
|
(505 | ) | (470 | ) | ||||
Customer
deposits
|
1,093 | (1 | ) | |||||
Net
cash flows from operating activities
|
(593 | ) | 1,622 | |||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchases
of fixed assets
|
(713 | ) | (344 | ) | ||||
Proceeds
from sale of fixed assets
|
- | 10 | ||||||
Acquisition
of SCB, cash portion (see Acquisitions note)
|
(27,011 | ) (a) | - | |||||
Acquisition
of GTC (see Acquisitions note)
|
- | (15,111 | ) (b) | |||||
Net
cash flows from investing activities
|
(27,724 | ) | (15,445 | ) | ||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Increase
(decrease) in borrowings under revolving line
|
9,121 | (c) | 5,153 | (d) | ||||
Borrowings
under other loan agreements
|
20,000 | 9,000 | ||||||
Repayments
under loan agreements and notes
|
(722 | ) | (285 | ) | ||||
Proceeds
from exercise of stock options
|
32 | 29 | ||||||
Proceeds
from shares issued under employee purchase plan
|
11 | - | ||||||
Financing
costs capitalized
|
(125 | ) | (74 | ) | ||||
Net
cash flows from financing activities
|
28,317 | 13,823 | ||||||
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
|
$ | 197 | $ | 92 | ||||
Income
taxes
|
27 | 107 | ||||||
Supplemental
disclosure of non-cash adjustments:
|
||||||||
100,000
common shares issued in SCB acquisition
|
$ | 609 | $ | - |
(a) Funds
advanced at closing of which $981 were repaid to purchaser based on
post-closing cash reconciliation.
(b)
During year following acquisition date, adjustments from seller reduced purchase
price to $14,761.
(c)
Revolver borrowings of $6,030 were utilized to partially fund December 2010
purchase of SCB.
(d)
Revolver borrowings of $6,111 were utilized to partially fund December 2009
purchase of GTC.
The
accompanying notes are an integral part of these consolidated financial
statements.
6
IEC
ELECTRONICS CORP. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2010
(Unaudited)
NOTE
1. OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Our
Business
IEC
Electronics Corp. ("IEC", "we", "our", “us”, “Company”) is a premier provider of
electronic manufacturing services (“EMS”) to advanced technology
companies. We specialize in the custom manufacture of high
reliability, complex circuit cards and system level assemblies; a wide array of
cable and wire harness assemblies capable of withstanding extreme environments;
and precision sheet metal. We excel where quality and reliability are
of paramount importance and when low to medium volume, high mix production is
the norm. We utilize state-of-the art, automated circuit card
assembly equipment together with a full complement of high-reliability
manufacturing stress testing methods. With our customers at the
center of everything we do, we have created a high-intensity, rapid, responsive
culture capable of reacting and adapting to their ever-changing
needs. Our customer-centric approach offers a high degree of
flexibility while simultaneously complying with rigorous quality and on-time
delivery standards. As a true extension of our customers' operations,
we have applied industry-leading Six Sigma and Lean Manufacturing principles to
eliminate waste and reduce our customers’ total cost of
ownership. While many EMS services are viewed as commodities, we
believe we set ourselves apart through an uncommon mix of capabilities,
including:
|
§
|
A
world class Technology Center that combines dedicated prototype
manufacturing with an on-site Materials Analysis Lab (headed by two 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.
|
Fiscal
Calendar
The
Company’s fiscal year begins on October 1st and quarters generally end on the
Friday closest to the end of the calendar quarter, with the exception of the
fourth quarter, which ends on September 30th.
Consolidation
The
consolidated financial statements include the accounts of IEC and its wholly
owned subsidiaries, IEC Electronics Wire and Cable, Inc. (“Wire and Cable”);
General Technology Corporation ("GTC") since December 16, 2009; and Southern
California Braiding, Inc. (“SCB”) since December 17, 2010. The Celmet
unit acquired on July 30, 2010 operates as a division of IEC. See
further discussion of SCB, GTC and Celmet in the Acquisitions
note. All significant intercompany transactions and accounts have
been eliminated.
Unaudited
Financial Statements
The
accompanying unaudited financial statements for the three months ended December
31, 2010 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 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,
2010 Annual Report on Form 10-K.
Reclassifications
Amounts
in prior year financial statements are reclassified as necessary to conform to
the current year presentation.
Cash
and Cash Equivalents
The
Company's cash and cash equivalents are maintained principally in deposit
accounts with Manufacturers and Traders Trust Company ("M&T"), a banking
corporation with headquarters in Buffalo, NY. Since cash receipts and
disbursements repay or draw on IEC’s revolving loan
balance with M&T, cash balances are typically de minimis.
7
Allowance
for Doubtful Accounts
The
Company establishes an allowance for doubtful accounts receivable based on the
age of outstanding invoices and management's evaluation of
collectability. Accounts are written off after all reasonable
collection efforts have been exhausted and management concludes that likelihood
of collection is remote.
Inventory
Valuation
Inventories
are stated at the lower of cost or market under the first-in, first-out
method. The Company regularly assesses slow-moving, excess and
obsolete inventory and maintains balance sheet reserves in amounts required to
reduce the recorded value of inventory to lower of cost or market.
Property,
Plant and Equipment
Property,
plant and equipment are stated at cost and are depreciated over various
estimated useful lives using the straight-line method. Maintenance
and repairs are charged to expense as incurred; renewals and improvements are
capitalized. At the time of retirement or other disposition of
property, plant and equipment, the cost and accumulated depreciation are removed
from the accounts and any gain or loss is reflected in other
income.
Depreciable
lives generally used for PP&E are presented in the table
below. Leasehold improvements are amortized over the shorter of the
lease term or estimated useful life of the improvement.
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
|
Leases
At
the inception of a lease covering equipment or real estate, the Company
evaluates the lease under criteria discussed in FASB ASC 840-10-25
(Leases). Leases meeting one of the four key criteria are accounted
for as capital leases and all others are treated as operating
leases. Under a capital lease, the discounted value of future lease
payments becomes the basis for recognizing an asset and a borrowing, and lease
payments are allocated between debt reduction and interest. Under
operating leases, payments are recorded as rent expense. Criteria for
a capital lease include (i) transfer of ownership during the lease term; (ii)
existence of a bargain purchase option under terms that make it likely to be
exercised; (iii) a lease term equal to 75 percent or more of the economic life
of the leased property; and (iv) minimum lease payments that equal at least 90
percent of fair value of the property.
In
June 2008, IEC entered into a sale-leaseback arrangement with M&T under
which fixed assets with a net book value of $2.0 million and an original cost of
$15.6 million were sold to M&T at a minimal loss and were leased back under
a five year operating lease. The sold assets were removed from the
accounts and minimal loss on the transaction is being amortized over the lease
term.
Intangible
Assets
In
December 2010, IEC entered into a five-year non-compete agreement with SCB's
selling shareholders and assigned a $100 thousand value to a corresponding
intangible asset. The intangible is being amortized over five
years.
GTC’s
building and land were acquired in December 2009 subject to an Industrial
Revenue Bond that exempts the property from real estate taxes for the term
of the IRB. At date of acquisition, the $360 thousand estimated value
of the tax abatement was recorded as an intangible asset that is being amortized
under the straight-line method to the maturity date of the
borrowing.
8
Goodwill
Under
FASB ASC 805 (Business Combinations), goodwill represents the excess of cost
over fair value of net assets acquired in a corporate
acquisition. While income tax rules allow fifteen-year, straight-line
amortization, ASC 350 (Intangibles & Goodwill) does not permit amortization
for financial reporting purposes. In lieu of amortizing, ASC 350
requires that goodwill be reviewed for impairment at least annually or when
events or circumstances indicate that carrying value may exceed fair
value. The review process entails estimating the overall fair value
of the unit to which the goodwill relates and comparing that value to the unit's
carrying value. If fair value exceeds carrying value, no goodwill
write-down is required. If fair value of the unit is less than
carrying value, a valuation of the unit's individual assets and liabilities is
required to determine whether or not goodwill should be written down to a lower
value.
Most
of IEC's recorded goodwill relates to the SCB unit acquired in the current
quarter and a small portion relates to Celmet, which was acquired in July 2010
(see Acquisitions note). No goodwill impairment has occurred to date
in connection with either unit.
Long-Lived
Assets
FASB
ASC 360-10 (Property, Plant and Equipment) requires the Company to test
long-lived assets for recoverability whenever events or circumstances indicate
that the carrying amount may not be recoverable. No impairment charges were
recorded during the quarters ended December 2010 or 2009.
Fair
Value of Financial Assets and Liabilities
Under
FASB ASC 825 (Financial Instruments), the Company is required to disclose the
fair value of financial instruments for which it is practicable to estimate
value. The Company’s financial instruments consist of cash, accounts
receivable, accounts payable, accrued liabilities and mainly floating-rate
debt. IEC believes that carrying amounts approximate fair value for
all such instruments.
FASB
ASC 820 (Fair Value Measurements and Disclosures) defines fair value,
establishes a framework for measurement, and expands disclosure about fair value
measurements. ASC 820 defines fair value as the price that would be
received upon sale of an asset or would be paid to transfer a liability in an
orderly transaction. Inputs used to measure fair value are
categorized under the following hierarchy:
Level
1:
|
Quoted
prices for identical assets or liabilities in active
markets.
|
Level
2:
|
Quoted
prices for similar assets or liabilities in markets whether active or not,
and model-derived valuations based on observable inputs or value
drivers.
|
Level
3:
|
Model-derived
valuations using inputs that are not observable, including situations in
which there is little or no market
activity.
|
Level
2 inputs were used in valuing fixed assets acquired in connection with IEC's
fiscal 2010 business combinations and will be used to value fixed assets
acquired with SCB in fiscal 2011. Intangible asset valuations
performed in connection with the Company's corporate acquisitions have been
based on level 3 inputs. Significant judgments are required in all
such valuation procedures. Asset and liability values assigned to the
SCB unit acquired in December 2010 are preliminary and subject to change in
amounts that could be material.
Revenue
Recognition
The
Company’s revenue is principally derived from the sale of electronic products
built to customer specifications, but also from other value added support
services and repair work. Revenue from product sales is recognized
when (a) goods are shipped or title and risk of ownership have passed, (b) the
price to the buyer is fixed or determinable, and (c) realization is reasonably
assured. Service revenues are recognized when services are
rendered. Provisions for discounts and rebates to customers,
estimated returns and allowances and other adjustments are recorded in the
period the related sales are recognized.
Stock-Based
Compensation
FASB
ASC 718 (Stock Compensation) requires that the cost of employee services
received in exchange for equity instruments be based on the grant-date fair
value of the instruments. Such costs are recorded over periods
employees render services to the Company and earn vested rights in the
instruments. Compensation cost relating to stock options and
restricted (non-vested) stock is credited directly to the common stock and
paid-in capital accounts.
9
Income
Taxes and Deferred Taxes
FASB
ASC 740 (Income Taxes) requires recognition of "deferred" tax assets and
liabilities for the expected future tax consequences of events that have been
included in the financial statements or tax returns, but not in
both. Deferred tax assets are also established for tax benefits
associated with tax loss and tax credit carryforwards. Such deferred
balances reflect tax rates that are scheduled to be in effect, based on
currently enacted tax laws, in the years the book/tax differences reverse and
tax loss and tax credit carryforwards are expected to be realized. An
allowance is established for any deferred tax asset for which realization is not
likely.
ASC
740 also prescribes a comprehensive model for how a company should measure,
recognize, present, and disclose in its financial statements uncertain tax
positions that the company has taken or expects to take on a tax
return. The Company recognizes the tax benefits from uncertain tax
positions only if it is more likely than not that the tax position will be
sustained following examination by taxing authorities, based on technical merits
of the position.
Tax
benefits from uncertain positions, that are recognized in the financial
statements, would be recorded at the largest amount having a greater than 50%
likelihood of ultimately being realized. Interest and penalties, if
incurred, are included in interest expense. The Company’s income tax
filings are subject to audit by various tax jurisdictions, and current open
years run from fiscal 2007 through 2009. The Company believes that it
has no material uncertain tax positions.
Earnings
Per Share
Basic
earnings per common share are calculated by dividing income available to common
shareholders by the weighted-average number of shares outstanding for each
period. Diluted earnings per common share are calculated by adding to
weighted-average shares outstanding the incremental shares resulting from the
assumed exercise of all potentially dilutive stock options, those with an
exercise price below the average market price during the
period. Restricted (non-vested) shares are reported as outstanding
from date of grant. A summary of shares used in the earnings per
share calculations follows.
Three months ended
|
||||||||
December
31,
|
December
25,
|
|||||||
Shares for EPS Calculation
|
2010
|
2009
|
||||||
Weighted
avg. shares outstanding
|
9,224,877 | 8,828,604 | ||||||
Incremental
shares from assumed exercise of stock options
|
541,145 | 697,738 | ||||||
Diluted
shares
|
9,766,022 | 9,526,342 | ||||||
Options
excluded from diluted shares due to exercise price being higher than
average market price
|
10,000 | 22,500 |
Dividends
IEC
does not pay dividends on its common stock, as it is the Company's current
policy to retain earnings for use in the business. Furthermore,
certain covenants in the Credit Agreement with M&T restrict the Company from
paying cash dividends. The Company does not expect to pay cash
dividends on common stock in the foreseeable future.
Use
of Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities, and the reported amounts of revenues and
expenses during the reporting period. Actual results may differ from
management’s estimates.
Statement
of Cash Flows
The
Company prepares the Consolidated Statement of Cash Flows utilizing the
indirect method of reporting. For companies acquired during the
periods, cash flows mainly represent activity subsequent to the acquisition
date. The net cash outflow attributable to the net cost of assets
acquired and liabilities assumed is presented as an investing cash
flow.
10
Recently
Issued Accounting Standards
FASB
Accounting Standards Update 2010-29, "Disclosure of Supplementary Pro Forma
Information for Business Combinations," was issued in December 2010 for
application to business combinations occurring no later than IEC's 2012 fiscal
year and beyond. The update clarifies that when prior period
financial statements are presented, the assumed acquisition date for preparing
pro forma information should be the start of the year preceding the year of
acquisition. As a result, the current period pro forma information is
then prepared excluding any one-time acquisition related expenses that are
included in the pro forma information for the preceding year
period. The update also requires disclosure of the nature and amount
of material, nonrecurring pro forma adjustments that affect the information
presented. IEC implemented this update during the quarter ended
December 31, 2010.
FASB
Accounting Standards Update 2010-20, "Disclosures about the Credit Quality of
Financing Receivables and the Allowance for Credit Losses" was issued in July
2010. The update requires entities to describe methods used to
estimate the allowance for doubtful accounts; disclose policies for charging off
uncollectible receivables; and present a summary of provisions, charge offs and
recoveries recorded in the allowance during each period. No changes
in accounting methods are required. Period-end disclosures must be
provided beginning in IEC's December 2010 quarter, and transaction-oriented
disclosures are required in subsequent periods. IEC implemented the
requirements of this update at September 30, 2010.
NOTE
2. ACQUISITIONS
On
December 17, 2010, IEC’s subsidiary, SCB acquired substantially all of the
assets of Southern California Braiding Company, Inc. in Bell Gardens, CA,
formerly a privately held manufacturer of high reliability wire, cable and
harness products for military and defense markets. The purchase price
was $25.0 million, subject to adjustment up or down if closing date working
capital is greater or less, respectively, than a target of $2.7
million. The final working capital adjustment will be based upon
post-closing verification of working capital as provided in the asset purchase
agreement. The final purchase price is also subject to potential
downward adjustment based on the level of SCB’s gross sales and backlog for
calendar year 2011. Cash paid at closing was $27.0 million, which
included an estimated working capital adjustment of $1.6 million, and of which
$981 thousand was returned to purchaser on January 6, 2011 following a
post-closing reconciliation of cash disbursements.
A portion
of the acquisition price, $609 thousand, was funded with 100,000 shares of newly
issued IEC common stock, and the remaining $26.0 million of net cash paid was
funded with bank debt. $3.1 million of the cash paid and shares
issued was deposited in escrow to be released to seller or returned to purchaser
under certain specified circumstances occurring at varying times through March
31, 2012. The selling shareholders entered into a five-year agreement
not to compete with SCB, and the president of Southern California Braiding
Company, Inc. continues in that capacity with SCB under IEC
ownership. Concurrent with the acquisition, the Company assumed
leases for operating premises of the business, with aggregate annual base rent
obligations of approximately $350 thousand.
Under
the acquisition method of accounting, the Company is required to measure and
record the fair value of assets acquired and liabilities assumed. If
the purchase price is greater than the value of identifiable net assets
acquired, as in the case of SCB, the difference is recorded as
goodwill. If net asset value exceeds the amount paid, the excess is
recorded in other income as a gain.
Estimated
fair values of the assets acquired and liabilities assumed in the SCB
acquisition are summarized below. The estimates may be revised as
working capital balances are verified and appraisals and valuations of fixed
assets, intangibles and other assets and liabilities are
completed. Due to the limited period of ownership, required
appraisals and valuations are pending at December 31, 2010, and potential
adjustments could be material.
11
SCB Opening Balance Sheet
|
December 17, 2010
|
|||
(thousands,
except shares)
|
||||
Accounts
receivable, net
|
$ | 1,620 | ||
Inventories
|
2,790 | |||
Leasehold
improvements
|
814 | |||
Machinery
& equipment
|
510 | |||
Furniture
& fixtures
|
176 | |||
Intangible
asset
|
100 | |||
Goodwill
|
21,088 | |||
Deferred
income taxes
|
106 | |||
Total
assets acquired
|
27,204 | |||
Accounts
payable
|
$ | 503 | ||
Accruals
and other liabilities
|
62 | |||
Total
liabilities assumed
|
565 | |||
Net
assets acquired/purchase price
|
$ | 26,639 | ||
Funded
with bank debt
|
$ | 26,030 | ||
Funded
with 100,000 shares of IEC common stock
|
609 | |||
Total
funding for SCB acquisition
|
$ | 26,639 |
On
July 30, 2010, the Company acquired certain assets and assumed certain
liabilities of Celmet, a privately held, precision sheet metal fabrication,
component assembly and metal stamping company located in Rochester,
NY. The purchase price of $1.9 million for the business, which is
being operated as the Celmet division of IEC, was funded with senior bank
debt. Concurrent with the acquisition, the Company entered into a
48-month lease for the operating premises of the business. Annual
base rent under the operating lease is $190 thousand.
Fair
values of the assets acquired and liabilities assumed in connection with the
Celmet acquisition are summarized below. Since the price paid
exceeded fair value of net assets acquired, $58 thousand of goodwill was
recorded.
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)
|
On
December 16, 2009, the Company acquired all the stock of General Technology
Corporation from Crane International Holdings, Inc. The acquired
business, located in Albuquerque, NM, employs complementary technologies and
serves markets similar to IEC’s. The purchase price of $14.8 million
was funded entirely with senior bank debt.
12
The
GTC acquisition resulted in a gain of $588 thousand, $418 thousand of which was
recognized during fiscal 2010. The remaining $170 thousand was
recorded in December 2010 upon IEC’s receipt of a purchase price refund from the
seller. The December payment resolved a dispute over working capital
values that had been referred to arbitration.
During
the twelve-month period following the GTC acquisition, certain adjustments were
made to purchase price and to the valuation of assets and liabilities acquired
as refunds were received and new information became available. The
summary of GTC’s acquisition-date balance sheet provided below displays
preliminary balances recorded in December 2009 and final balances reflected in
the December 2010 financial statements.
As of December 16, 2009
|
||||||||
Final
|
Preliminary
|
|||||||
GTC Opening Balance Sheet
|
December 2010
|
December 2009
|
||||||
(thousands)
|
||||||||
Accounts
receivable, net
|
$ | 3,931 | $ | 3,945 | ||||
Inventories
|
4,275 | 4,444 | ||||||
Other
current assets
|
69 | 69 | ||||||
Land
|
813 | 813 | ||||||
Building
|
5,074 | 5,087 | ||||||
Equipment
|
2,761 | 2,761 | ||||||
Intangible
asset
|
360 | 360 | ||||||
Deferred
income taxes
|
485 | - | ||||||
Total
assets acquired
|
17,768 | 17,479 | ||||||
Accounts
payable
|
$ | 1,128 | $ | 1,111 | ||||
Accruals
and other liabilities
|
1,191 | 1,157 | ||||||
Gain
on acquisition
|
588 | - | ||||||
Long-term
debt
|
100 | 100 | ||||||
Total
liabilities assumed
|
3,007 | 2,368 | ||||||
Net
assets acquired/purchase price
|
$ | 14,761 | $ | 15,111 | ||||
(Purchase
price funded with bank debt)
|
The
table that follows displays the revenue and earnings of SCB in 2010 and GTC in
2009 for the brief periods from the respective dates of acquisition to the ends
of the two quarters. The amounts presented are included in IEC's
consolidated income statements for the periods.
The
summary below also presents IEC's unaudited pro forma consolidated results for
the two quarters as if the SCB, Celmet and GTC acquisitions had occurred on
October 1, 2009. The pro forma results combine IEC's actual
consolidated amounts for the quarters with revenue and earnings generated by
SCB, Celmet and GTC for any time-periods within the quarters that they were not
members of the IEC consolidated group. While the pro forma results
take into consideration certain estimated changes in expenses resulting from the
merged operations, they do not reflect additional revenues that may be generated
by combining SCB, Celmet, GTC and IEC. The pro forma results are not
necessarily equivalent to those that would have been obtained by consummating
the acquisitions on October 1, 2009, nor are they necessarily indicative of
future results.
13
SCB and GTC Actual Results within
IEC
|
Three months ended
|
|||||||
and IEC Pro Forma Results for the
Quarters
|
December
31,
|
December
25,
|
||||||
2010
|
2009
|
|||||||
(in
thousands, except share and per share data)
|
(Unaudited)
|
|||||||
SCB results in 2010
and GTC results in 2009
from respective dates of acquisition |
||||||||
Net
sales
|
$ | 235 | $ | 679 | ||||
Income
(loss) before income taxes
|
(120 | ) | 111 | |||||
Net
income (loss)
|
(71 | ) | 72 | |||||
IEC
results as if GTC, Celmet and SCB were
acquired on October 1, 2009
|
||||||||
Net
sales
|
$ | 32,575 | $ | 27,361 | ||||
Income
before income taxes
|
2,480 | 1,757 | ||||||
Net
income
|
1,513 | 1,111 | ||||||
Earnings
per share:
|
||||||||
Basic
|
$ | 0.16 | $ | 0.12 | ||||
Diluted
|
0.15 | 0.12 | ||||||
Weighted
average common and common equivalent shares:
|
||||||||
Basic
|
9,308,573 | 8,928,604 | ||||||
Diluted
|
9,849,718 | 9,626,342 | ||||||
Significant pro forma adjustments:
(increase(decrease) in pretax income)
|
||||||||
Compensation
adjustments
|
$ | 458 | $ | 498 | ||||
Change
in sales commission program
|
49 | (9 | ) | |||||
Other
sales/marketing expense reductions
|
227 | - | ||||||
Insurance
expense reduction
|
62 | 87 | ||||||
Contract
staff cost changes
|
82 | (22 | ) | |||||
Depreciation
on fixed asset adjustments
|
9 | (85 | ) | |||||
Reduction
in legal/professional fees
|
154 | 64 | ||||||
Interest
expense on acquisition debt
|
(202 | ) | (366 | ) | ||||
Eliminate
former parent's management fee
|
- | 55 | ||||||
IEC's
acquisition expenses
|
109 | (159 | ) |
NOTE
3. ALLOWANCE FOR DOUBTFUL ACCOUNTS
A
summary follows of activity in the allowance for doubtful accounts for the
three-month periods ending in December 2010 and December 2009:
Three months ended
|
||||||||
December
31,
|
December
25,
|
|||||||
Allowance for Doubtful
Accounts
|
2010
|
2009
|
||||||
(thousands)
|
||||||||
Allowance,
beginning of period
|
$ | 250 | $ | 85 | ||||
Allowances
of acquired companies
|
25 | - | ||||||
Provision
(reversal)
|
(86 | ) | 40 | |||||
Write-offs
|
- | (6 | ) | |||||
Allowance,
end of period
|
$ | 189 | $ | 119 |
14
NOTE
4. INVENTORIES
A
summary of inventory by category follows:
December
31,
|
September
30,
|
|||||||
Inventories
|
2010
|
2010
|
||||||
(thousands)
|
||||||||
Raw
materials
|
$ | 11,378 | $ | 7,993 | ||||
Work-in-process
|
7,471 | 3,974 | ||||||
Finished
goods
|
1,263 | 1,012 | ||||||
Total
inventories
|
20,112 | 12,979 | ||||||
Reserve
for excess and obsolete inventory
|
(1,271 | ) | (911 | ) | ||||
Inventories,
net
|
$ | 18,841 | $ | 12,068 |
NOTE
5. FIXED ASSETS
Fixed
assets and accumulated depreciation consist of the following:
December
31,
|
September
30,
|
|||||||
Fixed
Assets
|
2010
|
2010
|
||||||
(thousands)
|
||||||||
Land
and improvements
|
$ | 1,556 | $ | 1,556 | ||||
Buildings
and improvements
|
9,730 | 9,581 | ||||||
Leasehold
improvements
|
827 | - | ||||||
Machinery
and equipment
|
16,354 | 15,434 | ||||||
Furniture
and fixtures
|
5,150 | 4,833 | ||||||
Total
fixed assets, at cost
|
33,617 | 31,404 | ||||||
Accumulated
depreciation
|
(18,785 | ) | (18,306 | ) | ||||
Net
fixed assets
|
$ | 14,832 | $ | 13,098 |
NOTE
6. INTANGIBLE ASSETS
Intangible
assets and accumulated amortization are as follows:
December
31,
|
September
30,
|
|||||||
Intangible
Assets
|
2010
|
2010
|
||||||
(thousands)
|
||||||||
Property
tax abatement
|
$ | 360 | $ | 360 | ||||
Non-compete
agreement
|
100 | - | ||||||
Total
intangibles, at cost
|
460 | 360 | ||||||
Accumulated
amortization
|
(40 | ) | (29 | ) | ||||
Net
intangible assets
|
$ | 420 | $ | 331 |
15
NOTE
7. CREDIT FACILITIES
A
summary of borrowings at December 31 and September 30, 2010
follows:
Fixed/
|
||||||||||||||||||||
Variable
|
Interest
Rate
|
December
31,
|
September
30,
|
|||||||||||||||||
Debt
|
Rate
|
Maturity
|
12/31/10
|
9/30/10
|
2010
|
2010
|
||||||||||||||
(percents)
|
(thousands)
|
|||||||||||||||||||
M&T borrowings
|
||||||||||||||||||||
Revolving
credit facility
|
v
|
12/17/13
|
3.56
|
3.50
|
$ | 14,944 | $ | 5,823 | ||||||||||||
SCB
term loan
|
v
|
12/17/15
|
3.81
|
-
|
20,000 | - | ||||||||||||||
GTC
term loan
|
v
|
12/16/14
|
3.81
|
3.75
|
4,000 | 4,250 | ||||||||||||||
GTC
mortgage loan
|
v
|
12/16/14
|
3.81
|
3.75
|
3,733 | 3,800 | ||||||||||||||
Celmet
term loan
|
v
|
07/30/15
|
3.81
|
3.75
|
1,833 | 1,933 | ||||||||||||||
Equipment
loan, variable
|
v
|
12/17/13
|
3.81
|
3.75
|
258 | 273 | ||||||||||||||
Equipment
loans (3), fixed
|
f
|
11/01/12
|
3.06
|
3.07
|
470 | 521 | ||||||||||||||
Term
loan
|
f
|
01/01/12
|
6.70
|
6.70
|
350 | 435 | ||||||||||||||
Energy
loan
|
f
|
04/02/13
|
2.08
|
2.08
|
95 | 105 | ||||||||||||||
Other borrowings
|
||||||||||||||||||||
Seller
notes, Wire & Cable
|
f
|
06/01/13
|
4.00
|
4.00
|
1,514 | 1,658 | ||||||||||||||
GTC
industrial revenue bond
|
f
|
03/01/19
|
5.63
|
5.63
|
100 | 100 | ||||||||||||||
Total
debt
|
47,297 | 18,898 | ||||||||||||||||||
Less:
current portion
|
(6,905 | ) | (2,899 | ) | ||||||||||||||||
Long-term
debt
|
$ | 40,392 | $ | 15,999 |
Note:
Sale-leaseback agreement with M&T is treated as an operating lease, not as
debt.
M&T
Credit Facilities
On
December 17, 2010, IEC entered into the Third Amended and Restated Credit
Facility Agreement (“Credit Agreement”) with M&T, replacing a prior
agreement dated July 30, 2010. The new arrangement added a $20.0
million term loan to be used for the SCB acquisition; increased the revolving
credit facility by $5.0 million to $20.0 million; eliminated a minimum threshold
for variable interest tied to LIBOR (London Interbank Offered Rate); and
modified certain other provisions as discussed below. The basic
structure of the agreement and many of the terms and conditions remained
unchanged from the prior agreement. Except as otherwise noted below,
Revolver and Term Loan borrowings under the Credit Agreement bear interest at
LIBOR plus a margin that varies based on the Company's ratio of debt to
EBITDARS, as defined. Individual facilities provided under the agreement are as
follows:
(a) $20
million Revolving Credit Facility (“Revolver”) available through December 17,
2013: The Company may borrow up to the lesser of (i) 85% of eligible
receivables plus 35% of eligible inventories up to $3.75 million, as defined, or
(ii) $20 million. Overline advances of 70% of inventories up to $4.75
million are permitted for limited periods at an increased interest
rate. At December 31, 2010, the maximum amount then available for
borrowing was $19.2 million. Average balances outstanding amounted to
$8.3 million and $5.1 million, during IEC's fiscal quarters ending December 2010
and 2009, respectively.
The
Company currently incurs a fee of 0.375% on any unused portion of the revolver
commitment, which amounted to $5 thousand for the quarter ended December
2010. This fee also varies based on IEC's ratio of debt to
EBITDARS.
(b) $20
million SCB Term Loan originated December 17, 2010: Principal is
repaid in sixty equal monthly installments. A $125 thousand
commitment fee is being amortized over life of the loan.
(c) $2
million Celmet Term Loan originated July 30, 2010: Principal is repaid in sixty
equal monthly installments.
(d) $5
million GTC Term Loan originated December 16, 2009: Principal is repaid in sixty
equal monthly installments.
16
(e) $4
million GTC Mortgage Loan originated December 16, 2009: The loan is effectively
secured by GTC property in Albuquerque, NM and principal is being repaid in 60
monthly installments of $22 thousand plus a balloon payment at
maturity.
(f) $1.5
million Equipment Line of Credit, reduced by prior borrowings under the line,
and available through December 17, 2011: This line is utilized for purchases of
capital equipment, and individual borrowings under the line are supported by
separate notes that specify fixed or variable interest, as selected by the
Company, and principal repayment terms. Monthly principal repayments
of each note are one-sixtieth of the loan amount plus any remaining balance at
termination date of the Revolver. Three fixed-rate loans outstanding
at December 31, 2010 were funded under a prior agreement that requires level
principal payments over 48 months, plus interest.
(g) $1.7
million Term Loan originated on May 30, 2008: Interest rate on this loan is
fixed at 6.70%, and principal is being repaid in monthly installments of $28
thousand plus the remainder at maturity. The loan's original
repayment period of 60 months was shortened to account for a $0.5 million
accelerated payment made in the fourth quarter of fiscal 2008.
(h) $0.2
million Energy Loan (also referred to as the "NYSERDA Loan"): Interest on this
loan is subsidized by New York State, and principal is being repaid in sixty
equal monthly installments.
The
Credit Agreement is secured by, among other things, a security interest in the
assets of IEC, Wire and Cable, GTC, Celmet, and SCB and a mortgage encumbering
GTC property, as mentioned above. The Agreement also contains various
affirmative and negative covenants including financial covenants. The
Company is required to maintain (i) a minimum level of quarterly EBITDARS, (ii)
a ratio of debt to twelve-month EBITDARS that is below a specified limit, and
(iii) a minimum fixed charge coverage ratio as described below.
For
the purpose of calculating compliance with the covenants, IEC's operating lease
obligation to M&T for certain equipment sold and leased back on June 27,
2008, is treated as debt. Rental payments amount to $389 thousand per
year, and payments remaining at December 31, 2010 total $941
thousand. The Company was in compliance with the three covenants at
December 31, 2010, as shown in the table at the end of this note.
Other
Credit Facilities
(i) The
May 2008 acquisition of Wire and Cable was financed in part by three promissory
notes totaling $3.8 million given to the sellers ("Seller
Notes"). These notes are subordinated to borrowings under the Credit
Agreement and are being repaid in quarterly installments amounting to $160
thousand, including interest, through maturity.
(j) When
IEC acquired GTC, the Company assumed responsibility for an Industrial Revenue
Bond issued by the City of Albuquerque. Interest on the bond is paid
semiannually and principal is due in its entirety at maturity.
Compliance
with covenants under the Credit Agreement, and aggregate debt maturities on all
IEC borrowings for the next five years are summarized in the tables that
follow:
Covenant
Compliance:
Type
|
Actual
at
|
|||||||||
Covenant
|
of limit
|
Limit
|
December 31, 2010
|
|||||||
Quarterly
EBITDARS (000's)
|
Lower
|
$ |
1,500
|
$ |
2,612
|
|||||
Total
debt to EBITDARS
|
Upper
|
3.50x
|
2.79x
|
|||||||
Fixed
charge coverage (a)
|
Lower
|
1.25x
|
3.95x
|
(a) The
ratio compares (i) 12-month EBITDA plus non-cash stock compensation
expense minus unfinanced capital expenditures minus cash taxes paid, to
(ii) fixed charges that include interest, principal payments,
sale-leaseback payments and dividends, if any.
17
Debt
Maturities:
Years
ending
|
Debt
|
|||
December
31,
|
Maturities
|
|||
(thousands)
|
||||
2011
|
$ | 6,905 | ||
2012
|
6,592 | |||
2013*
|
21,065 | |||
2014
|
5,730 | |||
2015
|
6,905 | |||
2016
and thereafter
|
100 | |||
$ | 47,297 |
*Includes
Revolver balance of $14,944 as of December 31, 2010.
NOTE
8. INCOME TAXES
The
provision for income taxes for the periods ended December 31, 2010 and December
25, 2009 is summarized below:
Three months ended
|
||||||||
December 31,
|
December 25,
|
|||||||
Income Tax Provision
|
2010
|
2009
|
||||||
(thousands)
|
||||||||
Current
tax expense:
|
||||||||
State
|
$ | 51 | $ | 3 | ||||
Federal
|
36 | 23 | ||||||
Deferred
tax expense:
|
||||||||
State
|
29 | 11 | ||||||
Federal
|
541 | 369 | ||||||
Total
income tax provision
|
$ | 657 | $ | 406 |
The
following table displays deferred tax assets by category as of December 31 and
September 30, 2010, respectively. Recorded amounts are affected by
deferred tax provisions and the establishment of deferred taxes for acquired
companies (see Acquisitions note).
December 31,
|
September 30,
|
|||||||
Deferred Tax Assets
|
2010
|
2010
|
||||||
(thousands)
|
||||||||
Net
operating loss carryforward
|
$ | 11,269 | $ | 11,862 | ||||
Alternative
minimum tax credit carryforward
|
406 | 373 | ||||||
Depreciation
and fixed assets
|
266 | 287 | ||||||
New
York State investment tax & other credits
|
1,691 | 1,765 | ||||||
Inventories
|
402 | 367 | ||||||
Other
|
665 | 583 | ||||||
Total
before allowance
|
14,699 | 15,237 | ||||||
Valuation
allowance
|
(1,691 | ) | (1,765 | ) | ||||
Deferred
tax asset (current and deferred)
|
$ | 13,008 | $ | 13,472 |
18
IEC has a
net operating loss carryforward (“NOL”) for income tax purposes of approximately
$33.2 million as of September 30, 2010, expiring mainly in years 2020 through
2025. It is estimated that the NOL will produce future tax benefits
totaling $11.9 million, as reflected in the Company's income tax
returns. Those estimated benefits have been fully recognized in IEC's
financial statements.
In
addition, $1.7 million of New York State investment tax and other credits are
available to the Company as carryforwards, expiring in various years through
2017. Since these credits cannot be utilized until the New York net
operating loss carryforward is exhausted, they are fully reserved for in the
Company's deferred tax valuation allowance. As the credits expire
unused, the deferred tax asset and offsetting valuation allowance are
reduced.
NOTE
9. WARRANTY RESERVES
IEC
provides warranties covering its products and workmanship, generally for up to
twelve months from date of shipment. As an offset to warranty claims,
the Company is sometimes able to obtain reimbursement for warranty-related costs
or losses from suppliers. Based on historical warranty claims
experience and in consideration of sales trends, a reserve is maintained for
estimated future warranty costs to be incurred on products shipped through the
balance sheet date. An analysis of additions to and charges against
IEC's warranty reserve during the three-month periods ended December 2010 and
December 2009 is provided below.
Three months ended
|
||||||||
December 31,
|
December 25,
|
|||||||
Warranty Reserve
|
2010
|
2009
|
||||||
(thousands)
|
||||||||
Reserve,
beginning of period
|
$ | 303 | $ | 111 | ||||
Reserves
of acquired companies
|
62 | 376 | ||||||
Provision
for warranty obligations
|
124 | 23 | ||||||
Warranty
costs
|
(85 | ) | (11 | ) | ||||
Reserve,
end of period
|
$ | 404 | $ | 499 |
NOTE
10. STOCK-BASED COMPENSATION
Under
IEC's 2001 Stock Option and Incentive Plan, as amended from time to time,
officers, key employees, directors and other individuals may be granted stock
options, restricted (non-vested) stock and other types of equity
awards. The plan was approved by shareholders in February
2002. A total of 3,100,000 common shares has been authorized for
issuance. Shares remaining available for grant totaled 306,648 and
461,106 at December 31 and September 30, 2010, respectively.
At the
January 19, 2011 Annual Meeting of Shareholders, the 2010 Omnibus Incentive
Compensation Plan was approved by shareholders. The plan will
be administered by the compensation committee of the Company's Board of
Directors and will involve the grant of the following types of potential awards:
incentive stock options, nonqualified options, stock appreciation rights,
restricted shares, restricted stock units, performance compensation awards, cash
incentive awards, director stock and other equity-based and equity-related
awards. Over a term of ten years, up to 2,000,000 common shares may
be issued under the plan.
Stock
Options
When
options are granted, IEC estimates fair value using a Black-Scholes model and
then subsequently amortizes that value as compensation cost over the vesting
period. A summary follows of assumptions utilized in the model and
the estimated value of options granted during the quarters ended in December
2010 and 2009, respectively.
19
Three months ended
|
||||||||
Valuation of Options
|
December 31,
|
December 25,
|
||||||
2010
|
2009
|
|||||||
Assumptions for
Black-Scholes:
|
||||||||
Risk-free
interest rate
|
1.50%
|
2.25%
|
||||||
Expected
term in years
|
4.9
|
4.9
|
||||||
Volatility
|
52%
|
54%
|
||||||
Expected
annual dividends
|
none
|
none
|
||||||
Value of options granted:
|
||||||||
Number
of options granted
|
51,500
|
43,882
|
||||||
Weighted
average fair value/share
|
$ |
2.51
|
$ |
2.26
|
||||
Fair
value of options granted (000's)
|
$ |
129
|
$ |
99
|
Changes
in options outstanding during the two December quarters are summarized below,
together with the number exercisable at each quarter end.
Three months ended
|
||||||||||||||||
December 31,
|
December 25,
|
|||||||||||||||
2010
|
2009
|
|||||||||||||||
Wgtd Avg
|
Wgtd Avg
|
|||||||||||||||
Stock Options
|
Number
|
Exercise
|
Number
|
Exercise
|
||||||||||||
of Options
|
Price
|
of Options
|
Price
|
|||||||||||||
Outstanding
at beginning of period
|
764,595 | $ |
1.66
|
973,722 | $ |
1.10
|
||||||||||
Granted
|
51,500 |
5.49
|
43,882 |
4.70
|
||||||||||||
Exercised
|
(53,750 | ) |
0.56
|
(28,776 | ) |
0.76
|
||||||||||
Forfeited
|
(4,000 | ) |
5.17
|
(30,000 | ) |
1.35
|
||||||||||
Outstanding
at end of period
|
758,345 | $ |
1.98
|
958,828 | $ |
1.27
|
||||||||||
For
exercisable options at period end:
|
||||||||||||||||
Number
exercisable
|
422,993 | $ |
0.84
|
594,708 | $ |
0.71
|
||||||||||
Wgtd.
avg. remaining term, in years
|
2.4 | 2.5 |
Restricted
(Non-vested) Stock
At
the end of the vesting period, holders of IEC's restricted stock have all the
rights and privileges of any other IEC common shareholder. Therefore,
the fair value of a share of restricted stock is its market value on the day of
grant, and that value is amortized as stock compensation expense over the
vesting period. A summary of restricted shares outstanding at the end
of the two three-month periods follows, together with activity during the
periods and the amount of expense yet to be recognized.
20
Three months ended
|
||||||||||||||||
December 31,
|
December 25,
|
|||||||||||||||
2010
|
2009
|
|||||||||||||||
Restricted (Non-vested) Stock
|
Number of
|
Wgtd Avg
|
Number of
|
Wgtd Avg
|
||||||||||||
Non-vested
|
Grant Date
|
Non-vested
|
Grant Date
|
|||||||||||||
Shares
|
Fair Value
|
Shares
|
Fair Value
|
|||||||||||||
Outstanding
at beginning of period
|
122,098 | $ |
4.10
|
10,000 | $ |
3.41
|
||||||||||
Granted
|
100,250 |
5.70
|
123,761 |
3.94
|
||||||||||||
Vesting
|
- |
-
|
- | - | ||||||||||||
Forfeited
|
- |
-
|
- | - | ||||||||||||
Outstanding
at end of period
|
222,348 | $ |
4.82
|
133,761 | $ |
3.90
|
||||||||||
For
non-vested shares at period end:
|
||||||||||||||||
Expense
not yet recognized (000s)
|
$ |
918
|
$ |
389
|
||||||||||||
Wgtd.
average remaining years for vesting
|
2.5
|
2.5
|
NOTE
11. INDUSTRY SECTORS AND MAJOR CUSTOMERS
Sales
by industry sector and to customers who account for ten percent or more of total
sales are summarized below. Management of credit risk associated with
all customers includes ongoing evaluations of payment history and customer
financial condition. IEC generally does not require customers to post
collateral.
Three months ended
|
||||||||
Industry Sectors
|
December 31,
|
December 25,
|
||||||
2010
|
2009
|
|||||||
% of Sales by Sector
|
||||||||
Military
& Aerospace
|
54%
|
49%
|
||||||
Industrial
& Communications
|
29%
|
40%
|
||||||
Medical
& Other
|
17%
|
11%
|
||||||
100%
|
100%
|
The
Company had three customers to whom sales exceeded 10% of total revenue during
the quarter ended December 31, 2010 and two customers to whom sales exceeded
that 10% threshold in the prior year comparable period. For the 2010
quarter there were two customers at 12% each and a third at 11% of
revenues. For the prior year quarter ended December 25, 2009, the two
customers represented 17% and 10% of revenues, respectively.
Receivables
from one customer accounted for 11% of total Company accounts receivable on
December 31, 2010. There was no one customer representing more than
10% of total Company accounts receivable for the prior year comparable
period.
NOTE
12. LITIGATION
There are
no pending material legal proceedings that involve IEC, its subsidiaries or
their properties. From time to time the Company may be involved in
legal actions in the ordinary course of its business; however management does
not believe that any such proceedings, individually or in the aggregate, will
have a material adverse effect on the Company’s consolidated financial
position.
21
NOTE
13. COMMITMENTS AND CONTINGENCIES
The
Company is obligated under non-cancelable operating leases, primarily for
manufacturing equipment, buildings and office equipment. Leases for
buildings occupied by IEC's subsidiaries expire as follows: Wire and Cable in
December 2012, Celmet in July 2014, and SCB mainly in September
2013. These operating leases generally contain renewal options and
provide for payment of executory costs by the lessee (the
Company). Executory costs typically include taxes, maintenance and
insurance. Approximate annual minimum lease obligations, together
with rent expense incurred during the quarters ending in December 2010 and 2009
are as follows:
Years ending
|
Annual lease
|
|||
December 31,
|
obligations
|
|||
(thousands)
|
||||
2011
|
$ | 1,167 | ||
2012
|
1,289 | |||
2013
|
1,291 | |||
2014
|
230 | |||
2015
|
13 | |||
Total
minimum lease obligation
|
$ | 3,990 | ||
Total
rent expense for 3-month periods ended:
|
||||
December
25, 2009
|
$ | 187 | ||
December
31, 2010
|
245 |
NOTE
14. RETIREMENT PLAN
The
Company administers a retirement savings plan for the benefit of its eligible
employees and their beneficiaries, under the provisions of Sections 401(a) and
(k) of the Internal Revenue Code. Eligible employees may contribute a
portion of their compensation to the plan, and the Company is permitted to make
discretionary contributions as determined by the Board of
Directors. Company contributions on behalf of GTC employees totaled
$7 thousand during the December 2010 quarter, while there were no such
contributions in the 2009 quarter.
22
Item
2. Management's Discussion and
Analysis of Financial Condition and Results of Operations
The
information in this Management's Discussion & Analysis should be read in
conjunction with the accompanying consolidated financial statements and
notes. Forward-looking statements in Management's Discussion and
Analysis are qualified by the cautionary statement preceding Item 1 in the
Company's Form 10-K for the year ended September 30, 2010 and the risk factors
identified in Item 1A of that Form 10-K.
Overview
Since
2004, we have focused our efforts on developing relationships with customers who
manufacture advanced technology products that are unlikely to migrate to
offshore suppliers due to proprietary technology content, governmental
restriction or volume considerations. We have continued to expand our
business by adding new customers and markets, and our customer base is stronger
and more diverse than ever. We continue to invest in areas we view as
important for our continued growth. IEC is ISO 9001:2008 registered;
a NSA approved supplier under the COMSEC standard; and ISO 13485 certified to
service the medical market sector. Four of our major units (IEC in
New York, Wire and Cable in New York, GTC in New Mexico, and SCB in California)
are AS9100 certified to service the military and commercial aerospace market
sector.
We have
identified and gained entry into advantageous markets by leveraging our ability
to provide products of the highest quality and reliability, including
significantly complex, low-run-volume assemblies. Currently, the
markets we serve include military, aerospace, communications, medical, and a
variety of industrial sectors.
We
continue to invest in improving our management bench strength and employee
skills, our reliability testing capabilities and our machinery and equipment
infrastructure to optimize production performance and effectively manage the
steady growth in volume and complexity that we are
experiencing. Based upon cautiously optimistic comments from
our customers in the military, aerospace, and medical sectors, we anticipate
continued growth in both revenue and profitability during the balance of the
current fiscal year.
Analysis of
Operations
A summary
of selected income statement amounts and percentages follows:
Three months ended
|
||||||||||||
December 31,
|
December 25,
|
% Increase/
|
||||||||||
Income Statement Data
|
2010
|
2009
|
-Decrease
|
|||||||||
($ in thousands)
|
||||||||||||
Net
sales
|
$ | 28,644 | $ | 18,060 |
58.6%
|
|||||||
Gross
profit
|
4,583 | 2,813 |
62.9%
|
|||||||||
Selling
& administrative expense
|
2,620 | 1,500 | ||||||||||
Interest
& financing expense
|
244 | 95 | ||||||||||
Other
(income)/expense
|
13 | 58 | ||||||||||
Income
before taxes
|
1,706 | 1,160 |
47.1%
|
|||||||||
Provision
for income taxes
|
657 | 406 | ||||||||||
Net
income
|
$ | 1,049 | $ | 754 |
39.1%
|
IEC
continues to experience strong top-line growth. First quarter revenue
increased 59% over the prior year and 81% from two years ago. While
the current quarter included GTC, Celmet and SCB revenues that were not present
in the prior fiscal year, the Company also achieved 27% organic growth in its
business. This significant increase was fueled by the expansion of
IEC's product offerings and by diversification among market
sectors. As a result of our emphasis on “Absolutely Positively
Perfect” execution, our customers have rewarded us with ongoing programs and
additional business. While ongoing programs represent a stable core
of our business, significant revenue growth in recent periods has come from the
military/aerospace and medical/other market sectors. Sales to the
industrial/communications sector have also increased, but at a more modest pace
reflective of U.S. economic conditions.
23
Our first
quarter gross profit has improved as a percent of sales from 10.3% in fiscal
2008 to 14.1% in 2009, 15.6% last year and now 16.0% in 2011. The
progress made in recent years is a direct result of our focus on improving
efficiency through training, investing in cost-effective capital equipment, and
adopting continuous improvement and lean manufacturing principles.
Selling
and administrative expenses remain under 10% of sales, but were 0.8% higher
during the first three months of fiscal 2011 than in the prior year
period. Approximately one half of the increase results from the
rising cost of providing healthcare and other benefits to our
employees. We view these increases as important to maintaining a top
flight workforce. The remainder of the increase is attributable to
adding the appropriate talent to support the size and scope of a growing
organization, today’s company and the larger company of the
future. Investments in our sales and marketing team have accompanied
our expansion into new markets, and lastly some of these increased costs are
associated with the integration of SCB.
Interest
expense was $244 thousand for the quarter, up from $95 thousand in the prior
year. This higher level of expense is associated with incremental
borrowings to fund the acquisition of GTC, Celmet and SCB that were reflected in
the current quarter, while only a few days of the GTC borrowing was reflected in
the quarter ended December 2009. We continue to focus on managing
working capital to maximize cash flow, with the objective of reducing the level
of our debt and related interest expense. Further information
regarding borrowings and interest rates is provided in NOTE 7. CREDIT FACILITIES
to the consolidated financial statements.
IEC
recorded net other expense (non-operating) of $13 thousand during the quarter
ended December 2010 versus $58 thousand in the year-ago
quarter. Expenses classified in the "other" category in both periods
primarily represent pre-merger costs incurred in arranging, analyzing and
executing acquisitions. In the current quarter, "other" expenses are
offset by an additional gain of $170 thousand realized on the GTC acquisition as
a result of an adjustment of purchase price received in December
2010. The adjustment settled a dispute concerning the seller’s
valuation placed on acquisition-date working capital, discussed further in the
balance sheet reconciliation related to the GTC acquisition contained in NOTE 2.
ACQUISITIONS to the consolidated financial statements.
The trend
in income tax expense reflects a substantial increase in pretax income for the
current quarter. However, it should be noted that a majority of the
liability is offset by the Company's NOL, such that payments to the taxing
authorities are significantly less than the expense recorded, as can be seen in
the difference between Current tax expense and Deferred tax expense in NOTE 8.
INCOME TAXES to the consolidated financial statements. Estimated
future cash tax benefits associated with the NOL as of September 30, 2010
amounted to $11.9 million. The 3.5% increase in tax expense as a
percent of pretax income, over the year ago quarter, is largely attributable to
IEC's expansion into states that do not permit tax deductions for pre-existing
NOL's.
Liquidity and Capital
Resources
Cash flow
of $0.6 million was used in operating activities during the December 2010
quarter, compared to $1.6 million of cash provided by operations in the 2009
quarter. Principal factors responsible for this $2.2 million change
were a $3.1 million increase in cash invested in working capital, offset by $0.3
million improvement in net income and a $0.4 million increase in the non-cash
adjustment for depreciation. Inventories in particular have increased
from $11.2 million one year ago to $18.8 million at December
2010. Approximately $3 million of this increase is associated with
the acquisition of Southern California Braiding and $0.5 million is attributable
to Celmet. The remaining $4.1 million represents a 37% increase in
our inventories to support a 59% increase in sales over the same
period.
Cash flow
used in investing activities was $27.7 million for the December 2010 quarter,
compared to $15.4 million in 2009. In December 2010, we acquired SCB
for cash of $26.0 million plus stock, while in the prior year, $15.1 million was
disbursed to acquire GTC. The $26.0 million is the net of $27.0 million paid at
closing for SCB and a post-closing reconciliation of cash disbursements in
connection with the acquisition that resulted in a return payment due IEC of
$981 thousand, received on January 6, 2011. In both quarters ended
December 2010 and December 2009, IEC also invested several hundred thousand
dollars in the addition of capital equipment designed to enhance
productivity.
Bank
funding for acquisitions represented most of the cash generated from financing
activities in both three-month periods. During the 2010 quarter, the
Company also drew on its Revolver to fund working capital, fixed asset additions
and payment to acquire SCB. In the quarter ended December 25, 2009,
favorable operating cash flows enabled us to partially pay down the Revolver
prior to drawing on it to fund the GTC acquisition.
At
December 31, 2010, borrowings under the Revolver amounted to $14.9 million, and
IEC had additional borrowing capacity of $4.3 million under the
Revolver. The Revolver and all of IEC's credit facilities are
discussed in NOTE 7. CREDIT FACILITIES to the consolidated financial
statements. The Company believes it has adequate liquidity to support
its operating requirements for the next twelve months.
24
The
Company’s financing agreements contain various affirmative and negative
covenants, including financial covenants. We are required to maintain
(i) a minimum level of quarterly EBITDARS, (ii) a ratio of debt to twelve-month
EBITDARS that is below a specified limit, and (iii) a minimum fixed charge
coverage ratio. The Company was in compliance with each
of the covenants at December 31, 2010. NOTE 7. CREDIT FACILITIES also
contains more detailed information concerning these financial
covenants.
Off-Balance Sheet
Arrangements
IEC is
not a party to any material off-balance sheet arrangements.
Application of Critical
Accounting Policies
Our
application of critical accounting policies are disclosed in our 2010 Annual
Report on Form 10-K filed for the fiscal year ended September 30,
2010. During the quarter ended December 31, 2010 there have been no
material changes to these policies.
Recently Issued Accounting
Standards
See NOTE
1. OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES for further
information concerning new accounting pronouncements.
Item
3. Quantitative and Qualitative
Disclosures About Market Risk
As a
result of its financing activities, the Company is exposed to changes in
interest rates that may adversely affect operating results. As of
December 31, 2010, the Company had $44.8 million of debt with variable interest
rates and $2.5 million with fixed rates. Interest rates on variable
loans (which are based on LIBOR) change frequently, causing interest on such
loans to vary from period to period. A sensitivity analysis to
measure the potential impact that a change in rates would have on the Company's
earnings indicates that a one-percentage point increase or decrease in interest
rates, which represents more than a 10% change, would increase or decrease the
Company's annual interest expense by approximately $448 thousand as of December
31, 2010.
The
Company is exposed to credit risk to the extent of non-performance by M&T
under the Credit Agreement. The bank's credit rating is monitored by
the Company, and credit loss arising from M&T's non-performance is not
anticipated.
Item
4. Controls and
Procedures
Evaluation of
disclosure controls and procedures: An evaluation was
performed, under the supervision and with the participation of IEC's management,
including our Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of the 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 have concluded that the business has
disclosure controls and procedures that were effective as of the end of the
period covered by this Quarterly Report on Form 10-Q to provide reasonable
assurance that information required to be disclosed by IEC 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. The Celmet operation will be
evaluated and management will report on the effectiveness of controls for that
operation in the 10-K filing for the year ended September 30,
2011. The SCB operation will be evaluated and management will report
on the effectiveness of controls for that operation in the 10-Q filing for the
first quarter of fiscal 2012.
Changes in
internal control over financial reporting: During the three
months ended December 31, 2010, there were no changes in our internal controls
that materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting.
Limitations on
the effectiveness of control systems: IEC's management,
including our Chief Executive Officer and Chief Financial Officer, does not
expect that our disclosure controls and internal controls will prevent all
errors and all fraud. Because of inherent limitations in any such
control system (e.g. faulty judgments, simple human error, or intentional
circumvention), none can provide absolute assurance that the objectives of the
control system are met. Moreover, the benefits of a control system
must be considered relative to the costs of the control system. The
design of any system is based in part upon management’s judgment of the
likelihood of future events, and the implications those judgments have on the
cost/benefit of various controls. Simply stated, there can be no
assurance that any control will succeed in achieving its goal under all possible
future conditions and as a result of these inherent limitations, misstatements
due to error or fraud may occur and may or may not be detected.
25
PART
II - OTHER INFORMATION
Item
1. Legal
Proceedings:
There
are no material, legal proceedings pending to which IEC or its subsidiaries are
a party or of which any of their 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 five percent
of common stock, or any associate of any of the foregoing, is a party which
would be adverse to IEC or its subsidiaries.
Item
1A. Risk
Factors:
There
are no material changes to the risk factors described in Item 1A of our Annual
Report on Form 10-K for the fiscal year ended September 30, 2010.
Item
2. Unregistered Sales of Equity
Securities and Use of Proceeds:
Information
relating to the issuance of 100,000 shares of IEC's common stock in connection
with the Company's acquisition of substantially all of the assets of Southern
California Braiding Company, Inc. on December 17, 2010 is contained in the
Acquisitions note to our consolidated financial statements in this Quarterly
Report on Form 10-Q for the quarter ended December 31, 2010 and is incorporated
herein by reference. The issuance of such shares is exempt from
registration requirements under the Securities Act of 1933, as amended (the
"Act"), pursuant to Section 4(2) of the Act as a transaction by an issuer not
involving a public offering. Neither the Company nor any person
acting on its behalf has offered or sold the securities by any form of general
solicitation or general advertising.
Item
3. Defaults Upon Senior
Securities: None
Item
4. (Removed and
Reserved)
Item
5. Other Information:
None
Item
6. Exhibits: The
following documents are filed as exhibits to this report.
Exhibit
No.
|
Page
|
|||
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
|
26
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)
|
|
February
8, 2011
|
/s/
W. Barry Gilbert
|
W.
Barry Gilbert
|
|
Chairman
and Chief Executive Officer
|
|
February
8, 2011
|
/s/
Susan E. Topel-Samek
|
Susan
E. Topel-Samek
|
|
Vice
President and Chief Financial
Officer
|
27