IEC Electronics Corp. provides electronic manufacturing services to technology companies that produce products for the medical, industrial, aerospace and defense sectors. It delivers technical solutions for the custom manufacturing, product configuration, and verification testing of engineered products. The company was founded by Roger E. Main in 1966 and is headquartered in Newark, NY.
We depend on a relatively small number of customers, the loss of one or more of whom may negatively affect our operating results.
We participate in the electronics industry, which historically produces technologically advanced products with short life cycles.
Because a significant portion of our business is defense-related, reductions or delays in U.S. defense spending may have a material adverse effect on our revenues.
We are subject to extensive regulation and audit by the Defense Contract Audit Agency.
Our business could be negatively impacted by economic slowdowns in the medical sector.
Global economic and financial market conditions may have a material adverse effect on our results of operations and financial condition.
Tariffs imposed by the U.S. and those imposed in response by other countries, as well as rapidly changing trade relations, could have a material adverse effect on our business and results of operations.
A failure of our information technology systems, including the implementation of our new enterprise resource planning system, could have a material adverse effect on our business.
Products we manufacture may contain defects in workmanship, which could result in reduced demand for our services and product liability claims against us.
We may not be able to maintain the engineering, technological and manufacturing capabilities required by our customers in the future.
Our operating results may fluctuate from period to period.
The agreements governing our debt contain various covenants that may constrain the operation of our business, and our failure to comply with these covenants may have a material adverse effect on our financial condition.
We are subject to ongoing compliance obligations in connection with an administrative order and our failure to comply with those obligations could adversely affect our business and the liquidity of our common stock.
Start-up costs and inefficiencies related to new or transferred programs can have a material adverse effect on our operating results and may not be recoverable.
Some of our customers may have regulatory issues that adversely affect our operating results.
We may not realize the full value of our backlog, which may result in lower than expected revenue.
Increased competition may result in decreased demand or reduced prices for our products and services.
We depend on a limited number of suppliers for components that are critical to our manufacturing processes. A shortage of these components or an increase in their price could interrupt our operations and adversely affect our operating results.
Security breaches and other disruptions, both physical and virtual, could compromise our information, harm customer relationships and expose us to liability, which would cause our business and reputation to suffer.
Our manufacturing processes and services may result in exposure to intellectual property infringement and other claims.
A failure to comply with customer-driven policies and standards, including those related to social responsibility and conflict minerals, could adversely affect our business and reputation.
If we are unable to maintain satisfactory capacity utilization rates, our results of operations and financial condition would be adversely affected.
If our customers choose to provide manufacturing services in-house or overseas, our results of operations could suffer.
We may experience disruptions to our business as a result of the relocation of our headquarters and a significant portion of our operations.
We may face heightened liability risks specific to our medical device business as a result of additional healthcare regulatory related compliance requirements and the potential severe consequences that could result from manufacturing defects or malfunctions (e.g., death or serious injury) of the medical devices we manufacture, design or test.
Revenue increased 34.3%, or $40.1 million, during fiscal 2019 as compared to the prior fiscal year. The increase was driven by increases in sales in all sectors: aerospace and defense sector of $27.8 million, medical sector of $7.5 million and the industrial sector of $4.7 million.
Various increases and decreases for our aerospace and defense customers resulted in a net increase in sales of $27.8 million for fiscal 2019 compared to fiscal 2018. Programs frequently fluctuate in demand or end and are replaced by new programs. Aggregate increases in sales in fiscal 2019 were due to net increases in customer demand was $13.3 million. We saw an increase in sales of $18.8 million from production ramp ups. However, these increases were partially offset by ending customer relationships, contracts reaching the end of their term and other customer delays, which caused a decrease in sales of $4.3 million during fiscal 2019.
The net increase of $7.5 million in sales in the medical sector was primarily due to programs ramping up of $7.3 million. The remaining changes were the result of changes in customer demand.