Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Jul. 01, 2016 | Aug. 01, 2016 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | IEC ELECTRONICS CORP | |
Entity Central Index Key | 49,728 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | IEC | |
Entity Common Stock, Shares Outstanding | 10,274,403 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jul. 1, 2016 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,016 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jul. 01, 2016 | Sep. 30, 2015 |
Current assets: | ||
Cash | $ 603 | $ 407 |
Accounts receivable, net of allowance | 19,098 | 24,923 |
Inventories, net | 20,113 | 25,753 |
Other current assets | 1,340 | 1,444 |
Total current assets | 41,154 | 52,527 |
Fixed assets, net | 15,231 | 15,443 |
Intangible assets, net | 105 | 134 |
Goodwill | 101 | 101 |
Deferred income taxes | 3 | 0 |
Other long term assets | 268 | 57 |
Discontinued operations - long term assets | 0 | 0 |
Total assets | 56,862 | 68,262 |
Current liabilities: | ||
Current portion of long-term debt | 2,665 | 2,908 |
Accounts payable | 13,616 | 18,336 |
Accrued payroll and related expenses | 3,638 | 2,338 |
Other accrued expenses | 662 | 1,318 |
Customer deposits | 3,186 | 5,761 |
Total current liabilities | 23,767 | 30,661 |
Long-term debt | 18,943 | 28,323 |
Other long-term liabilities | 583 | 590 |
Total liabilities | 43,293 | 59,574 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, $0.01 par value: 500,000 shares authorized; none issued or outstanding | 0 | 0 |
Common stock, $0.01 par value: Authorized: 50,000,000 shares; Issued: 11,314,780 and 11,232,017 shares, respectively; Outstanding: 10,259,292 and 10,196,145 shares, respectively | 113 | 112 |
Additional paid-in capital | 46,175 | 45,845 |
Retained earnings/(accumulated deficit) | (31,130) | (35,740) |
Treasury stock, at cost: 1,055,488 and 1,035,872 shares, respectively | (1,589) | (1,529) |
Total stockholders' equity | 13,569 | 8,688 |
Total liabilities and stockholders' equity | $ 56,862 | $ 68,262 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] - $ / shares | Jul. 01, 2016 | Sep. 30, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 500,000 | 500,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 11,314,780 | 11,232,017 |
Common stock, shares outstanding | 10,259,292 | 10,196,145 |
Treasury stock, shares | 1,055,488 | 1,035,872 |
CONDENSED CONSOLIDATED INCOME S
CONDENSED CONSOLIDATED INCOME STATEMENTS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 01, 2016 | Jun. 26, 2015 | Jul. 01, 2016 | Jun. 26, 2015 | |
Income Statement [Abstract] | ||||
Net sales | $ 32,508 | $ 32,577 | $ 98,590 | $ 93,061 |
Cost of sales | 27,045 | 27,888 | 81,573 | 81,944 |
Gross profit | 5,463 | 4,689 | 17,017 | 11,117 |
Selling and administrative expenses | 3,463 | 3,689 | 11,218 | 13,255 |
Restatement and related expenses | 12 | 312 | 4 | 953 |
Operating profit/(loss) | 1,988 | 688 | 5,795 | (3,091) |
Interest and financing expense | 389 | 316 | 1,191 | 1,516 |
Income/(loss) from continuing operations before income taxes | 1,599 | 372 | 4,604 | (4,607) |
Provision for/(benefit from) income taxes | (6) | (4) | (6) | (4) |
Income/(loss) from continuing operations | 1,605 | 376 | 4,610 | (4,603) |
Loss on discontinued operations, net | 0 | (4,392) | 0 | (5,745) |
Net income/(loss) | $ 1,605 | $ (4,016) | $ 4,610 | $ (10,348) |
Basic net income/(loss) per common and common equivalent share: | ||||
Earnings/(loss) from continuing operations (in dollars per share) | $ 0.16 | $ 0.04 | $ 0.45 | $ (0.46) |
Earnings/(loss) from discontinued operations (in dollars per share) | 0 | (0.43) | 0 | (0.57) |
Net earnings/loss (in dollars per share) | 0.16 | (0.39) | 0.45 | (1.03) |
Diluted net income/(loss) per common and common equivalent share: | ||||
Earnings/(loss) from continuing operations (in dollars per share) | 0.16 | 0.04 | 0.45 | (0.46) |
Earnings/(loss) from discontinued operations (in dollars per share) | 0 | (0.43) | 0 | (0.57) |
Net earnings/loss (in dollars per share) | $ 0.16 | $ (0.39) | $ 0.45 | $ (1.03) |
Weighted average number of common and common equivalent shares outstanding: | ||||
Basic (in shares) | 10,211,347 | 10,199,431 | 10,210,805 | 10,049,395 |
Diluted (in shares) | 10,211,347 | 10,199,431 | 10,210,805 | 10,049,395 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS of CHANGES in STOCKHOLDERS' EQUITY (unaudited) - USD ($) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings/ (Accumulated Deficit) [Member] | Treasury Stock, at cost [Member] |
Beginning Balance at Sep. 30, 2014 | $ 17,405,000 | $ 111,000 | $ 44,302,000 | $ (25,554,000) | $ (1,454,000) |
Net income (loss) | (10,348,000) | (10,348,000) | |||
Stock-based compensation | 1,990,000 | 1,990,000 | |||
Restricted (non-vested) stock grants, net of forfeitures | 0 | 2,000 | (2,000) | ||
Exercise of stock options | 3,000 | 78,000 | (75,000) | ||
Shares withheld for payment of taxes upon vesting of restricted stock | (604,000) | (1,000) | (603,000) | ||
Ending Balance at Jun. 26, 2015 | 8,446,000 | 112,000 | 45,765,000 | (35,902,000) | (1,529,000) |
Beginning Balance at Sep. 30, 2015 | 8,688,000 | 112,000 | 45,845,000 | (35,740,000) | (1,529,000) |
Net income (loss) | 4,610,000 | 4,610,000 | |||
Stock-based compensation | 324,000 | 324,000 | |||
Restricted (non-vested) stock grants, net of forfeitures | 0 | 1,000 | (1,000) | ||
Exercise of stock options | 0 | ||||
Employee stock plan purchases | 7,000 | 7,000 | |||
Shares withheld for payment of taxes upon vesting of restricted stock | 60,000 | ||||
Return of incentive compensation shares | (60,000) | (60,000) | |||
Ending Balance at Jul. 01, 2016 | $ 13,569,000 | $ 113,000 | $ 46,175,000 | $ (31,130,000) | $ (1,589,000) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS of CASH FLOWS (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Jul. 01, 2016 | Jun. 26, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income/(loss) | $ 4,610 | $ (10,348) |
Less: Loss on discontinued operations, net | 0 | (5,745) |
Income/(loss) from continuing operations | 4,610 | (4,603) |
Non-cash adjustments: | ||
Stock-based compensation | 324 | 1,990 |
Incentive compensation shares returned | (60) | 0 |
Depreciation and amortization | 2,432 | 2,948 |
(Gain)/loss on sale of fixed assets | 1 | 0 |
Reserve for doubtful accounts | 253 | (23) |
Provision for excess/obsolete inventory | (34) | 378 |
Deferred tax expense/benefit | (3) | 0 |
Changes in assets and liabilities: | ||
Accounts receivable | 5,572 | 1,346 |
Inventory | 5,674 | (5,563) |
Other current assets | 104 | 888 |
Other long term assets | 3 | 130 |
Accounts payable | (4,720) | (59) |
Accrued expenses | 644 | (959) |
Customer deposits | (2,575) | 3,293 |
Other long term liabilities | 25 | (124) |
Net cash flows from operating activities-continuing operations | 12,250 | (358) |
Net cash flows from operating activities-discontinued operations | 0 | (536) |
Net cash flows from operating activities-continuing operations | 12,250 | (894) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of fixed assets | (2,165) | (2,495) |
Grant proceeds from outside parties | 0 | 698 |
Net cash flows from investing activities-continuing operations | (2,165) | (1,797) |
Net cash flows from investing activities-discontinued operations | 0 | (26) |
Net cash flows from investing activities-continuing operations | (2,165) | (1,823) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Advances from revolving line of credit | 43,116 | 49,578 |
Repayments of revolving line of credit | (50,315) | (45,769) |
Borrowings under other loan agreements | 0 | 0 |
Repayments under other loan agreements | (2,456) | (2,181) |
Debt issuance costs | (241) | 0 |
Proceeds from exercise of stock options | 0 | 3 |
Proceeds from employee stock plan purchases | 7 | 0 |
Shares withheld for payment of taxes upon vesting of restricted stock | 0 | (604) |
Net cash flows from financing activities-continuing operations | (9,889) | 1,027 |
Net cash flows from financing activities-discontinued operations | 0 | 0 |
Net cash flows from financing activities | (9,889) | 1,027 |
Net increase/(decrease) in cash and cash equivalents | 196 | (1,690) |
Cash and cash equivalents, beginning of period | 407 | 1,980 |
Cash and cash equivalents, end of period | 603 | 290 |
Supplemental cash flow information: | ||
Interest paid | 1,188 | 1,184 |
Income taxes paid | 3 | 0 |
Non-cash transactions: | ||
Fixed assets purchased with extended payment terms | 0 | 22 |
Incentive compensation shares returned | $ 60 | $ 0 |
OUR BUSINESS AND SUMMARY OF SIG
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Jul. 01, 2016 | |
Accounting Policies [Abstract] | |
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1—OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Our Business IEC Electronics Corp. (“IEC”, “we”, “our”, “us”, or the “Company”) provides electronic contract manufacturing services (“EMS”) to companies in various industries that require advanced technology. We specialize in the custom manufacture of high reliability, complex circuit boards and system-level assemblies; a wide array of cable and wire harness assemblies capable of withstanding extreme environments; and precision metal components. We provide EMS 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 board assembly equipment together with a full complement of high-reliability manufacturing stress testing methods. Our customers are at the center of everything we do and we are 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. Generally Accepted Accounting Principles IEC's financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), as set forth in the Financial Accounting Standards Board's (“FASB”) Accounting Standards Codification (“ASC”). Fiscal Calendar The Company’s fiscal year ends on September 30th and the first three quarters end generally on the Friday closest to the last day of the calendar quarter. Consolidation The consolidated financial statements include the accounts of IEC and its wholly owned subsidiaries: IEC Electronics Wire and Cable, Inc. (“Wire and Cable”); IEC Electronics Corp-Albuquerque (“Albuquerque”); and IEC Analysis & Testing Laboratory, LLC (“ATL”), formerly Dynamic Research and Testing Laboratories, LLC. The Celmet unit (“Celmet”) operates as a division of IEC. As further discussed in Note 2—SCB Divestiture and Discontinued Operations , the operations of our wholly-owned subsidiary, formerly known as Southern California Braiding, Inc. (“SCB”), were divested during the fourth quarter of fiscal 2015. All significant intercompany transactions and accounts are eliminated in consolidation. Unaudited Financial Statements The accompanying unaudited financial statements for the three and nine months ended July 1, 2016 and June 26, 2015 have been prepared in accordance with GAAP for interim financial information. In the opinion of management, all adjustments required for a fair presentation of the information have been made. The accompanying financial statements should be read in conjunction with the financial statements and notes included in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2015 . Reclassifications Prior year financial statement amounts are reclassified as necessary to conform to the current year presentation, including presentation of results of discontinued operations. Cash and Cash Equivalents The Company’s cash and cash equivalents principally represent deposit accounts with Manufacturers and Traders Trust Company (“M&T Bank”), a banking corporation headquartered in Buffalo, NY. 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 value 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 (“PP&E”) 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, while renewals and improvements are capitalized. At the time of retirement or other disposition of PP&E, cost and accumulated depreciation are removed from the accounts and any gain or loss is recorded in earnings. 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. PP&E Lives Estimated (years) Land improvements 10 Buildings and improvements 5 to 40 Machinery and equipment 3 to 5 Furniture and fixtures 3 to 7 Intangible Assets Intangible assets (other than goodwill) are those that lack physical substance and are not financial assets. Such assets held by IEC were acquired in connection with business combinations and the remaining assets represent economic benefits associated with a property tax abatement. Values assigned to individual intangible assets are amortized using the straight-line method over their estimated useful lives. Reviewing Long-Lived Assets for Potential Impairment ASC 360-10 (Property, Plant and Equipment) and ASC 350-30 (Intangibles) require the Company to test long-lived assets (PP&E and definitive lived assets) for recoverability whenever events or circumstances indicate that the carrying amount may not be recoverable. If carrying value exceeds undiscounted future cash flows attributable to an asset, it is considered impaired and the excess of carrying value over fair value must be charged to earnings. No impairment charges were recorded by IEC for property, plant and equipment or intangibles in fiscal 2016. Goodwill Goodwill represents the excess of cost over fair value of net assets acquired in a business combination. Under ASC 350, goodwill is not amortized but is reviewed for impairment at least annually or when events or circumstances indicate that carrying value may exceed fair value. The Company may elect to precede a quantitative review for impairment with a qualitative assessment of the likelihood that fair value of a particular reporting unit exceeds carrying value. If the qualitative assessment leads to a conclusion that it is more than 50 percent likely that fair value exceeds carrying value, no further testing is required. In the event of a less favorable outcome, the Company is required to proceed with quantitative testing. The quantitative process entails comparing the overall fair value of the unit to which goodwill relates to carrying value. If fair value exceeds carrying value, no further assessment of potential impairment 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 is impaired. Goodwill impairment losses are charged to earnings. IEC’s remaining goodwill relates to Celmet, which was acquired in July 2010. Leases At the inception of a lease covering equipment or real estate, the lease agreement is evaluated under criteria discussed in ASC 840-10-25 (Leases). Leases meeting one of 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. For 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 or exceed 90 percent of the fair value of the property. Legal Contingencies When legal proceedings are brought or claims are made against us and the outcome is uncertain, ASC 450-10 (Contingencies) requires that we determine whether it is probable that an asset has been impaired or a liability has been incurred. If such impairment or liability is probable and the amount of loss can be reasonably estimated, the loss must be charged to earnings. When it is considered probable that a loss has been incurred, but the amount of loss cannot be estimated, disclosure but not accrual of the probable loss is required. Disclosure of a loss contingency is also required when it is reasonably possible, but not probable, that a loss has been incurred. Customer Deposits Customer deposits represent amounts invoiced to customers for which the revenue has not yet been earned and therefore represent a commitment for the Company to deliver goods or services in the future. Deposits are generally short term in nature and are recognized as revenue when earned. Grants from Outside Parties Grants from outside parties are recorded as other long-term liabilities and are amortized over the same period during which the associated fixed assets are depreciated. Derivative Financial Instruments The Company actively monitors its exposure to interest rate risk and from time to time uses derivative financial instruments to manage the impact of this risk. The Company uses derivatives only for purposes of managing risk associated with underlying exposures. The Company does not trade or use instruments with the objective of earning financial gains on the interest rate, nor does the Company use derivative instruments where it does not have underlying exposures. The Company manages its hedging position and monitors the credit ratings of counterparties and does not anticipate losses due to counterparty nonperformance. However, the Company’s use of derivative financial instruments may result in short-term gains or losses and increased earnings volatility. The Company’s instruments are recorded in the consolidated balance sheets at fair value in other assets or other long-term liabilities. Fair Value Measurements Under 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, borrowings and an interest rate swap agreement. IEC believes that recorded value approximates fair value for all cash, accounts receivable, accounts payable and accrued liabilities. ASC 820 (Fair Value Measurements and Disclosures) defines fair value, establishes a framework for measurement, and prescribes related disclosures. 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 in active markets for identical assets or liabilities that the Company can access at the measurement date. Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations in which all significant inputs are observable market data. Level 3: Model-derived valuations in which one or more significant inputs are unobservable. The Company deems a transfer between levels of the fair value hierarchy to have occurred at the beginning of the reporting period. There were no such transfers during fiscal 2016 or fiscal 2015. 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 (i) goods are shipped or title and risk of ownership have passed, (ii) the price to the buyer is fixed or determinable, and (iii) realization is reasonably assured. Service revenue is generally recognized once the service has been rendered. For material management arrangements, revenue is generally recognized as services are rendered. Under such arrangements, some or all of the following services may be provided: design, bid, procurement, testing, storage or other activities relating to materials the customer expects to incorporate into products that it manufactures. Value-added support services revenue, including material management and repair work revenue, amounted to less than 5% of total revenue in each of the first nine months of fiscal 2016 and fiscal 2015 . Provisions for discounts, allowances, rebates, estimated returns and other adjustments are recorded in the period the related sales are recognized. Stock-Based Compensation ASC 718 (Stock Compensation) requires that compensation expense be recognized for equity awards based on fair value as of the date of grant. For stock options, the Company uses the Black-Scholes pricing model to estimate grant date fair value. Costs associated with stock awards are recorded over requisite service periods, generally the vesting period. If vesting is contingent on the achievement of performance objectives, fair value is accrued over the period the objectives are expected to be achieved only if it is considered probable that the objectives will be achieved. The Company also has an employee stock purchase plan (“ESPP”) that provides for discounted stock purchase price. Compensation expense related to the discount is recognized as employees contribute to the plan. During fiscal 2015 and the first quarter of fiscal 2016, the ESPP was suspended in connection with the 2014 Restatements described below. The ESPP was reinstated as of the beginning of the second quarter of fiscal 2016. Restatement and Related Expenses The Company restated its consolidated financial statements for the fiscal year ended September 30, 2012, and the interim fiscal quarters and year to date periods within the year ended September 30, 2012, included in the Company’s Annual Report on Form10-K/A and the fiscal quarter ended December 28, 2012, as reported in the Company’s Quarterly Report on Form 10-Q/A for that fiscal quarter (the “Prior Restatement”). The Company also restated its consolidated financial statements for the fiscal year ended September 30, 2014, and its interim financial statements for each quarterly period within the year ended September 30, 2014, included in the Company's Annual Report on Form 10-K/A, to correct an error in the valuation allowance on deferred income tax assets as well as an error in estimating excess and obsolete inventory reserves (the “2014 Restatements”). The Prior Restatement and the 2014 Restatements together are referred to as the “Restatements”. Restatement and related expenses represent third-party expenses arising from the Restatements. These expenses include legal and accounting fees incurred by the Company from external counsel and independent accountants directly attributable to the Restatements as well as other matters arising from the Prior Restatement including those more fully described in Note 17—Litigation . The Company receives reimbursement for certain of these expenses which may result in a benefit in a given period. Legal Expense Accrual The Company records legal expenses as they are incurred, based on invoices received or estimates provided by legal counsel. Future estimated legal expenses are not recorded until incurred. Income Taxes and Deferred Taxes 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 legislation, 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 the manner in which a company measures, recognizes, presents, and discloses in its financial statements uncertain tax positions that a company has taken or expects to take on a tax return. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the position will be sustained following examination by taxing authorities, based on technical merits of the position. The Company believes that it has no material uncertain tax positions. Any interest or penalties incurred are reported as interest expense. The Company’s income tax filings are subject to audit by various tax jurisdictions and current open years are fiscal 2010 through fiscal 2014. The Company is currently under federal income tax audit for fiscal 2013 and does not expect the audit to have a material impact on the financial statements. Earnings Per Share Basic earnings per common share are calculated by dividing income available to common stockholders by the weighted average number of shares outstanding during each period. Diluted earnings per common share add to the denominator incremental shares resulting from the assumed exercise of all potentially dilutive stock options, as well as restricted (non-vested) stock, restricted stock units (“RSUs”) and anticipated issuances under the employee stock purchase plan. Options, restricted stock and RSUs are primarily held by directors, officers and certain employees. A summary of shares used in earnings per share (“EPS”) calculations follows. Three Months Ended Nine Months Ended Shares for EPS Calculation July 1, June 26, July 1, June 26, Weighted average shares outstanding 10,211,347 10,199,431 10,210,805 10,049,395 Incremental shares — — — — Diluted shares 10,211,347 10,199,431 10,210,805 10,049,395 Anti-dilutive shares excluded 940,354 734,605 940,354 734,605 As a result of the incremental shares being negative for the three and nine months ended July 1, 2016 , the Company calculated diluted earnings per share using weighted average basic shares outstanding, as using diluted shares would be anti-dilutive. As a result of the net loss for three and nine months ended June 26, 2015 , the Company calculated diluted earnings per share using weighted average basic shares outstanding, as using diluted shares would be anti-dilutive to loss per share. 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, the Company’s Fifth Amended and Restated Credit Facility Agreement with M&T Bank includes certain restrictions on paying cash dividends, as more fully described in Note 8—Credit Facilities . Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses and the disclosure of contingent assets and liabilities. Actual results may differ from management’s estimates. Statements of Cash Flows The Company presents operating cash flows using the indirect method of reporting under which non-cash income and expense items are removed from net income. Recently Issued Accounting Standards FASB Accounting Standard Update (“ASU”) 2014-09, “Revenue from Contracts with Customers” was issued May 2014 and updates the principles for recognizing revenue. The ASU will supersede most of the existing revenue recognition requirements in GAAP and will require entities to recognize revenue at an amount that reflects the consideration to which a company expects to be entitled in exchange for transferring goods or services to a customer. This ASU also amends the required disclosures of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within that period. Early adoption is permitted for annual periods beginning after December 15, 2016. The Company is determining its implementation approach and evaluating the potential impacts of the new standard on its existing revenue recognition policies and procedures. FASB ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations” was issued in March 2016 and improves implementation guidance on principal versus agent considerations. The effective dates are the same as those for Topic 606. FASB ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” was issued in April 2016 and adds further guidance on identifying performance obligations as well as improving licensing implementation guidance. The amendments do not change the core principle of the guidance in Topic 606. The effective dates are the same as those for Topic 606. FASB ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” was issued in June 2016 and clarifies the objective of the collectability criterion, presentation of taxes collected from customers, non-cash consideration, contract modifications at transition, completed contracts at transition and how guidance in Topic 606 is retrospectively applied. The amendments do not change the core principle of the guidance in Topic 606. The effective dates are the same as those for Topic 606. FASB ASU 2014-12, “Compensation - Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period” was issued June 2014. This guidance was issued to resolve diversity in accounting for performance targets. A performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition and should not be reflected in the award’s grant date fair value. Compensation cost should be recognized over the required service period, if it is probable that the performance condition will be achieved. The guidance is effective for annual periods beginning after December 15, 2015 and interim periods within those annual periods. This update did not have a significant impact upon early adoption. FASB ASU 2014-15, “Presentation of Financial Statements-Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” was issued September 2014. This provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The ASU applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The Company does not anticipate a significant impact upon adoption. FASB ASU 2015-03, “Interest - Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs” was issued in April 2015. These amendments require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The ASU applies to all entities and is effective for public business entities for annual periods beginning after December 15, 2015, and interim periods thereafter, with early adoption permitted. The guidance should be applied on a retrospective basis. The Company does not anticipate a significant impact upon adoption. FASB ASU 2015-11, “Simplifying the Measurement of Inventory” was issued in July 2015. This requires entities to measure most inventory “at the lower of cost and net realizable value,” thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. The ASU will not apply to inventories that are measured by using either the last-in, first-hout method or the retail inventory method. For public business entities, the ASU is effective prospectively for annual periods beginning after December 15, 2016, and interim periods therein. Upon transition, entities must disclose the nature of and reason for the accounting change. The Company does not anticipate a significant impact upon adoption. FASB ASU No. 2015-15, Interest—Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements” was issued in August 2015 which permits an entity to report deferred debt issuance costs associated with a line-of-credit arrangement as an asset and to amortize such costs over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings under the credit line. The ASU applies to all entities and is effective for public business entities for annual periods beginning after December 15, 2015, and interim periods thereafter, with early adoption permitted. The guidance should be applied on a retrospective basis. The Company does not anticipate a significant impact upon adoption. FASB ASU 2015-17, “Income Taxes Balance Sheet Classification of Deferred Taxes” was issued in November 2015. This requires entities to classify deferred tax liabilities and assets as noncurrent in a classified statement of financial position and applies to all entities that present a classified statement of financial position. For public entities, this update is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company does not anticipate a significant impact upon adoption. FASB ASU 2016-09, “Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting” was issued in March 2016. This simplifies accounting for several aspects of share-based payment including income tax consequences, classification of awards as either equity or liability and classification on the statement of cash flows. For public entities, this update is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company does not anticipate a significant impact upon adoption. FASB ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326)” was issued in June 2016. This ASU amends the Board’s guidance on the impairment of financial instruments. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses. This ASU is effective for fiscal years beginning after December 15, 2019. Early adoption will be permitted. The Company does not anticipate a significant impact upon adoption. |
SCB DIVESTITURE AND DISCONTINUE
SCB DIVESTITURE AND DISCONTINUED OPERATIONS | 9 Months Ended |
Jul. 01, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
SBC DIVESTURE AND DISCONTINUED OPERATIONS | NOTE 2—SCB DIVESTITURE AND DISCONTINUED OPERATIONS As previously disclosed, SCB, a wholly owned subsidiary of the Company, entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”), effective as of July 9, 2015, by and between SCB and DCX-Chol Enterprises, Inc. (“DCX”), whereby DCX purchased the multi-conductor stranded copper cable and harness assemblies manufacturing and servicing business previously operated by SCB. DCX, a provider of engineered high performance interconnect products, purchased substantially all assets and assumed certain obligations and liabilities of SCB for the agreed upon selling price of $2.5 million , adjusted to $2.4 million due to certain deposits and prorations. DCX paid the adjusted purchase price in cash at closing. The Asset Purchase Agreement contains indemnification provisions of each party with respect to breaches of representations, warranties and covenants and certain other specified matters. Prior to this transaction, there were no material relationships between the Company and DCX or between DCX and any officer, director or affiliate of the Company. During the third quarter of fiscal 2015, the Company received an offer from DCX to purchase substantially all the assets and assume certain liabilities of SCB for approximately $2.5 million . The Company's willingness to accept the offer was considered to be an indication of fair value and as such, impairment charges of $4.1 million were taken to adjust SCB's assets to fair value as of June 26, 2015. The pre-tax loss on the sale of SCB for the year ended September 30, 2015 included in Loss on discontinued operations, net in the income statement was calculated as follows: July 9, 2015 (in thousands) (unaudited) Purchase price $ 2,405 Net book value of assets sold (2,630 ) Legal fees associated with closing (114 ) Finder's fee (50 ) Sales tax on asset sale (20 ) Other (24 ) Loss on sale of SCB $ (433 ) Carrying amounts of major classes of assets and liabilities that were disposed of follows: July 9, 2015 (in thousands) (unaudited) Inventories, net $ 1,803 Other current assets 53 Fixed assets, net 916 Intangible assets, net — Customer deposits (142 ) Net assets sold $ 2,630 SCB's revenue and loss before income taxes follows: Three Months Ended Nine Months Ended June 26, June 26, (in thousands) Net sales $ 1,867 $ 5,287 Loss before income taxes $ (4,392 ) $ (5,745 ) The loss on discontinued operations for the three and nine months ended June 26, 2015 was comprised of operating losses; there was no provision or benefit from taxes for these periods. |
ALLOWANCE FOR DOUBTFUL ACCOUNTS
ALLOWANCE FOR DOUBTFUL ACCOUNTS | 9 Months Ended |
Jul. 01, 2016 | |
Receivables [Abstract] | |
ALLOWANCE FOR DOUBTFUL ACCOUNTS | NOTE 3—ALLOWANCE FOR DOUBTFUL ACCOUNTS A summary follows of activity in the allowance for doubtful accounts during the nine months ended July 1, 2016 and June 26, 2015 . Nine Months Ended Allowance for Doubtful Accounts July 1, June 26, (in thousands) Allowance, beginning of period $ 423 $ 525 Provision for doubtful accounts 253 (23 ) Write-offs (298 ) (64 ) Allowance, end of period $ 378 $ 438 |
INVENTORIES
INVENTORIES | 9 Months Ended |
Jul. 01, 2016 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 4—INVENTORIES A summary of inventory by category at period end follows: Inventories July 1, September 30, (in thousands) Raw materials $ 12,705 $ 17,637 Work-in-process 5,855 8,512 Finished goods 3,256 1,341 Total inventories 21,816 27,490 Reserve for excess/obsolete inventory (1,703 ) (1,737 ) Inventories, net $ 20,113 $ 25,753 |
FIXED ASSETS
FIXED ASSETS | 9 Months Ended |
Jul. 01, 2016 | |
Property, Plant and Equipment [Abstract] | |
FIXED ASSETS | NOTE 5—FIXED ASSETS A summary of fixed assets and accumulated depreciation at period end follows: Fixed Assets July 1, September 30, (in thousands) Land and improvements $ 1,601 $ 1,601 Buildings and improvements 14,199 14,161 Machinery and equipment 26,341 26,061 Furniture and fixtures 7,349 7,291 Construction in progress 2,807 1,028 Total fixed assets, at cost 52,297 50,142 Accumulated depreciation (37,066 ) (34,699 ) Fixed assets, net $ 15,231 $ 15,443 Depreciation expense during the three and nine months ended July 1, 2016 and June 26, 2015 follows: Three Months Ended Nine Months Ended July 1, June 26, July 1, June 26, (in thousands) Depreciation expense $ 717 $ 926 $ 2,364 $ 2,910 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Jul. 01, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 6—INTANGIBLE ASSETS IEC's intangible assets (other than goodwill) were acquired in connection with purchase of Albuquerque in fiscal 2010. Albuquerque's building and land were acquired subject to an Industrial Revenue Bond (“IRB”) that exempts the property from real estate taxes for the term of the IRB. The tax abatement was valued at $360 thousand at the date of acquisition, and such value is being amortized over the 9.2 year exemption period that remained as of the acquisition date. No impairment has been taken for this asset since the Albuquerque acquisition. A summary of intangible assets by category and accumulated amortization at period end follows: Intangible Assets July 1, September 30, (in thousands) Property tax abatement - Albuquerque 360 360 Accumulated amortization (255 ) (226 ) Intangible assets, net $ 105 $ 134 Amortization expense during the three and nine months ended July 1, 2016 and June 26, 2015 follows: Three Months Ended Nine Months Ended Amortization Expense July 1, June 26, July 1, June 26, (in thousands) Intangible amortization expense $ 10 $ 10 $ 29 $ 29 A summary of amortization expense for the next five years follows: Future Amortization Estimated future amortization (in thousands) Twelve months ended June, 2017 $ 39 2018 39 2019 27 2020 and thereafter — |
GOODWILL
GOODWILL | 9 Months Ended |
Jul. 01, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | NOTE 7—GOODWILL The goodwill balance of $0.1 million resulted from the acquisition of Celmet in fiscal 2010. There has been no impairment for this goodwill since the acquisition date. |
CREDIT FACILITIES
CREDIT FACILITIES | 9 Months Ended |
Jul. 01, 2016 | |
Debt Disclosure [Abstract] | |
CREDIT FACILITIES | NOTE 8—CREDIT FACILITIES A summary of borrowings at period end follows: Fixed/ July 1, 2016 September 30, 2015 Variable Interest Interest Debt Rate Maturity Date Balance Rate (1) Balance Rate (1) ($ in thousands) M&T credit facilities: Revolving Credit Facility v 1/18/2018 $ 5,216 4.75 % $ 12,415 4.50 % Term Loan A f 2/1/2020 3,878 3.98 4,804 3.98 Term Loan B v 2/1/2023 9,217 3.71 10,383 3.45 Albuquerque Mortgage Loan v 2/1/2018 2,244 5.00 2,467 4.75 Celmet Building Term Loan f 11/7/2018 953 4.72 1,062 4.72 Other credit facilities: Albuquerque Industrial Revenue Bond f 3/1/2019 100 5.63 100 5.63 Total debt 21,608 31,231 Less: current portion (2,665 ) (2,908 ) Long-term debt $ 18,943 $ 28,323 (1) Rates noted are before impact of interest rate swap. M&T Bank Credit Facilities On December 14, 2015, the Company and M&T Bank entered into the Fifth Amended and Restated Credit Facility Agreement (“Fifth Amended Credit Agreement”), which amends and restates in its entirety the Fourth Amended and Restated Credit Facility Agreement dated as of January 18, 2013, as amended (the “2013 Credit Agreement”). Borrowings under the Fifth Amended Credit Agreement are secured by, among other things, the assets of IEC and its subsidiaries. The Fifth Amended Credit Agreement prohibits the Company from paying dividends or repurchasing or redeeming its common stock without first obtaining the consent of M&T Bank. Except as described below, the terms, conditions, covenants, guarantees and collateral previously in effect under the 2013 Credit Agreement will continue substantially unchanged under the Fifth Amended Credit Agreement. Before entering into the Fifth Amended Credit Agreement, the Company and M&T Bank were performing under the terms of the Sixth Amendment to the 2013 Credit Agreement entered into on May 8, 2015 (the “Sixth Amendment”). Individual debt facilities provided under the Fifth Amended Credit Agreement, which remain mostly unchanged from the 2013 Credit Agreement, are described below: a) Revolving Credit Facility (“Revolver”) : Up to $20 million is available through January 18, 2018 . The maximum amount the Company may borrow is determined based on a borrowing base calculation described below. b) Term Loan A : $10.0 million was borrowed on January 18, 2013. Principal is being repaid in 108 equal monthly installments of $93 thousand . c) Term Loan B: $14.0 million was borrowed on January 18, 2013. Principal is being repaid in 120 equal monthly installments of $117 thousand . d) Albuquerque Mortgage Loan : $4.0 million was borrowed on December 16, 2009. The loan is secured by real property in Albuquerque, NM, and principal is being repaid in equal monthly installments of $22 thousand plus a balloon payment of $1.8 million due at maturity. e) Celmet Building Term Loan: $1.3 million was borrowed on November 8, 2013 pursuant to an amendment to the 2013 Credit Agreement. The proceeds were used to reimburse the Company’s cost of purchasing its Rochester, New York facility. Principal is being repaid in 59 equal monthly installments of $11 thousand plus a balloon payment due at maturity. Borrowing Base Under the Fifth Amended Credit Agreement, the maximum amount the Company can borrow under the Revolver is the lesser of (i) 85% of eligible receivables plus 35% of eligible inventories (up to a cap of $3.75 million ) or (ii) $20.0 million . The Sixth Amendment removed the provision from the 2013 Credit Agreement, that allowed the Company to elect that another 35% of eligible inventories be included in the borrowing base for limited periods of time during which a higher rate of interest was charged on the Revolver. Borrowings based on inventory balances were limited to a cap of $3.75 million , or when subject to the higher percentage limit, $4.75 million . The Sixth Amendment also removed the provision in the 2013 Credit Agreement that allowed for borrowing at an increased interest rate margin based on 85% of eligible receivables plus 70% of eligible inventories up to a maximum of $4.75 million . At July 1, 2016 and September 30, 2015 , the upper limit on Revolver borrowings was $17.7 million and $20.0 million , respectively. Average available balances on the Revolver amounted to $9.7 million during the nine months ended July 1, 2016 . Interest Rates Under the Fifth Amended Credit Agreement, variable rate debt accrues interest at LIBOR plus the applicable marginal interest rate that fluctuates based on the Company's Debt to EBITDAS Ratio, as defined below. Under the Fifth Amended Credit Agreement the applicable marginal interest rate was fixed on December 14, 2015 as follows: 4.25% for the Revolver, 4.50% for the Albuquerque Mortgage Loan and 3.25% for the Term Loan B, until the tenth day following the date the Company delivered its quarterly covenant calculation for the first quarter of fiscal 2016. Subsequent to this date, for the variable rate debt, the interest rate is LIBOR plus the applicable margin interest rate that is based on the Company's Debt to EBITDAS Ratio. Changes to applicable margins and unused fees resulting from the Debt to EBITDAS Ratio generally become effective mid-way through the subsequent quarter. The applicable margins based on the second quarter covenant calculations were as follows: 4.25% for the Revolver, 4.50% for the Albuquerque Mortgage Loan and 3.25% for the Term Loan B. Prior to December 14, 2015, the Sixth Amendment fixed each facility’s applicable margin through March 31, 2016 as follows: 4.25% for the Revolver, 4.50% for the Albuquerque Mortgage Loan and 3.25% for the Term Loan B. The applicable unused line fee of 0.50% also was extended through March 31, 2016, and thereafter if the Company is not in compliance with its financial covenants. The Company incurs quarterly unused commitment fees ranging from 0.250% to 0.500% of the excess of $20.0 million over average borrowings under the Revolver. Fees incurred amounted to $44.9 thousand and $38.2 thousand during the nine months ended July 1, 2016 and June 26, 2015 , respectively. The fee percentage varies based on the Company's Debt to EBITDAS Ratio. Interest Rate Swap In connection with the 2013 Credit Agreement, on January 18, 2013, the Company and M&T Bank entered into an interest rate swap arrangement (“Swap Transaction”). The Swap Transaction is for a notional amount of $14.0 million with an effective date of February 1, 2013 and a termination date of February 1, 2023. The Swap Transaction is designed to reduce the variability of future interest payments with respect to Term Loan B by effectively fixing the annual interest rate payable on the loan’s outstanding principal. Pursuant to the Swap Transaction, the Company’s one month LIBOR rate is swapped for a fixed rate of 1.32% . When the swap fixed rate is added to the Term Loan B spread of 3.25% , the Company’s interest rate applicable to Term Loan B is effectively fixed at 4.57% . Financial Covenants The Fifth Amended Credit Agreement also contains various affirmative and negative covenants including financial covenants. The Company is required to maintain (i) a minimum level of quarterly EBITDAS, as defined below (“Quarterly EBITDAS”), (ii) a ratio of total debt to twelve month EBITDAS (“Debt to EBITDAS Ratio”) that is below a specified limit, (iii) a minimum fixed charge coverage ratio (“Fixed Charge Coverage Ratio”), (iv) a maximum level of inventory (“Maximum Inventory”), and (v) a maximum amount of capital expenditures (“Maximum Capital Expenditures”). The Debt to EBITDAS Ratio is the ratio of debt to earnings before interest, taxes, depreciation, amortization and non-cash stock compensation expense (“EBITDAS”). The Fixed Charge Coverage Ratio compares (i) 12 month EBITDA plus non-cash stock compensation expense minus unfinanced capital expenditures minus taxes paid, to (ii) the sum of interest expense, principal payments and dividends, if any (fixed charges). The Maximum Inventory covenant allows for specific levels of inventory as defined by the agreement. The Maximum Capital Expenditures covenants allow for a maximum amount of capital expenditures on an annual basis. On June 20, 2016, the Company and M&T entered into a First Amendment to Fifth Amended and Restated Credit Facility Agreement (the “First Amendment”), which amended the Fifth Amended Credit Facility. The First Amendment increased the Maximum Capital Expenditures, as defined in the Credit Agreement, covenant from $3.5 million to $ 4.5 million annually. Covenant Ratios in effect at July 1, 2016 , pursuant to the Fifth Amended Credit Agreement, as amended by the First Amendment, are as follows: Debt to EBITDAS Ratio: 6/26/15 through and including 9/30/15 < 5.75 to 1.00 10/01/15 through and including 1/01/16 < 5.10 to 1.00 1/02/16 through and including 4/01/16 < 3.95 to 1.00 4/02/16 through and including 7/01/16 < 3.65 to 1.00 7/02/16 through and including 9/30/16 < 3.10 to 1.00 Thereafter < 3.10 to 1.00 Minimum Quarterly EBITDAS : Fiscal Quarter ending 9/30/15 $ 1,500,000 Fiscal Quarter ending 1/01/16 1,785,000 Fiscal Quarter ending 4/01/16 1,900,000 Fiscal Quarter ending 7/01/16 1,800,000 Fiscal Quarter ending 9/30/16 2,190,000 Thereafter 2,190,000 Fixed Charge Coverage Ratio: 6/26/15 through and including 9/30/15 > 0.45 to 1.00 10/01/15 through and including 1/01/16 > 0.75 to 1.00 1/02/16 through and including 4/01/16 > 1.00 to 1.00 4/02/16 through and including 7/01/16 > 1.10 to 1.00 7/2/16 and thereafter > 1.25 to 1.00 Maximum Inventory: As of January 1, 2016 $ 30,000,000 As of April 1, 2016 29,000,000 As of July 1, 2016 28,000,000 As of September 30, 2016 27,000,000 As of December 30, 2016 26,000,000 As of the end of the Fiscal Quarter ending March 31, 2017 25,000,000 As of the end of each Fiscal Quarter thereafter 25,000,000 Maximum Capital Expenditures $ 4,500,000 Prior to the Fifth Amended Credit Agreement, pursuant to the Sixth Amendment, M&T Bank agreed to (i) modify the financial covenants related to Quarterly EBITDARS, the Debt to EBITDARS Ratio and the Fixed Coverage Charge Ratio and (ii) waive events of default arising from the Company’s non-compliance with these covenants during the fiscal quarters ended December 26, 2014 and March 27, 2015. Quarterly EBITDARS was the quarterly measurement of earnings before interest, taxes, depreciation, amortization, rent expense and non-cash stock compensation expense. The Debt to EBITDARS Ratio was the ratio of debt to earnings before interest, taxes, depreciation, amortization, rent expense and non-cash stock compensation expense. The Fixed Charge Coverage Ratio compared (i) 12 month EBITDA plus non-cash stock compensation expense minus unfinanced capital expenditures minus cash taxes paid, to (ii) the sum of interest expense, principal payments, sale-leaseback payments and dividends, if any (fixed charges). The Sixth Amendment also amended the definition of EBITDARS under the 2013 Credit Agreement to add back a maximum amount of professional services fees and expenses incurred and paid or to be paid prior to September 30, 2015. EBITDARS as amended and restated meant, for the applicable period, earnings before interest, taxes, depreciation, amortization, plus (i) payments due under the M&T sale-leaseback arrangement, (ii) non-cash stock option expense and (iii) professional services fees and expenses incurred and paid or to be paid prior to September 30, 2015, up to a maximum of (a) for the fiscal quarter ended December 26, 2014, $235,112 , (b) for the fiscal quarter ending March 27, 2015, $2,652,659 , (c) for the fiscal quarter ending June 26, 2015, $200,000 plus costs incurred and paid by the Company during such fiscal quarter in connection with mortgages, environmental site assessments, title insurance and appraisals and (d) for the fiscal quarter ending September 30, 2015, $200,000 plus costs incurred and paid by the Company during such fiscal quarter, all on a consolidated basis and determined in accordance with GAAP on a consistent basis. The Sixth Amendment also modified the Quarterly EBITDARS covenant to be equal to or greater than $1.25 million for the fiscal quarter ending June 26, 2015, and $1.5 million for each fiscal quarter thereafter. A summary of financial covenant compliance follows: Quarterly EBITDAS Debt to EBITDAS Ratio Fixed Charge Coverage Ratio Maximum Inventory Maximum Capital Expenditures Fiscal Quarters Third 2016 Compliant Compliant Compliant Compliant Measured Annually Second 2016 Compliant Compliant Compliant Compliant Measured Annually First 2016 Compliant Compliant Compliant Compliant Measured Annually Fourth 2015 Compliant Compliant Compliant Not Applicable Not Applicable Third 2015 (1) Compliant Compliant Compliant Not Applicable Not Applicable Second 2015 (1) Waived Waived Waived Not Applicable Not Applicable First 2015 (1) Waived Waived Waived Not Applicable Not Applicable (1) The Company was subject to the 2013 Credit Agreement during these periods. As a result of the 2014 Restatements as described in Note 1—Our Business and Summary of Significant Accounting Policies , the Company was in default of the Credit Agreement for failure to deliver financial statements prepared in accordance with GAAP for each of the quarters of fiscal 2014 and the fiscal quarter ending December 26, 2014. The Company received a waiver from M&T regarding this event of default. Other Borrowings a) Albuquerque Industrial Revenue Bond : When IEC acquired Albuquerque, the Company assumed responsibility for a $100 thousand 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. Events of Default There were no events of default for the nine months ended July 1, 2016 . Contractual Principal Payments A summary of contractual principal payments under IEC's borrowings for the next five years taking into consideration the Fifth Amended Credit Agreement follows: Debt Repayment Schedule Contractual (in thousands) Twelve months ended June, 2017 $ 2,665 2018 (1) 9,857 2019 3,315 2020 2,037 2021 and thereafter 3,734 $ 21,608 (1) Includes Revolver balance of $5.2 million at July 1, 2016 . |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 9 Months Ended |
Jul. 01, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | NOTE 9—DERIVATIVE FINANCIAL INSTRUMENTS Interest Rate Risk Management In connection with the 2013 Credit Agreement, on January 18, 2013, the Company and M&T Bank entered into the Swap Transaction. The Swap Transaction is for a notional amount of $14.0 million with an effective date of February 1, 2013 and a termination date of February 1, 2023. The Swap Transaction is designed to reduce the variability of future interest payments with respect to Term Loan B by effectively fixing the annual interest rate payable on outstanding principal of Term Loan B. Pursuant to the interest rate swap, the Company’s one month LIBOR rate is swapped for a fixed rate of 1.32% . As more fully described in Note 8—Credit Facilities , the applicable margin on Term Loan B was fixed at 3.25% until the tenth day following the date the Company delivered its quarterly covenant calculation for the second quarter of fiscal 2016. The applicable margin on Term Loan B based on the quarterly covenant calculation for the second quarter of fiscal 2016 was 3.25% . When the swap fixed rate is added to the Term Loan B spread of 3.25% , the Company’s interest rate applicable to Term Loan B is effectively fixed at 4.57% . The fair value of the interest rate swap agreement represented a liability of $163.1 thousand and $46.0 thousand at July 1, 2016 and September 30, 2015 , respectively, and was estimated based on Level 2 valuation inputs. The Company did not designate the swap as a cash flow hedge at inception and therefore, the gains or losses from the changes in fair value of the derivative instrument are recognized in earnings for the periods ended July 1, 2016 and September 30, 2015 within interest expense. The fair value of the interest rate swap of $163.1 thousand and $46.0 thousand is recorded in other long-term liability in the Consolidated Balance Sheet at July 1, 2016 and September 30, 2015 , respectively. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 9 Months Ended |
Jul. 01, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 10—FAIR VALUE OF FINANCIAL INSTRUMENTS Financial Instruments Carried at Fair Value The Company’s Swap Transaction is recorded on the balance sheet as either an asset or a liability measured at fair value. The Company estimates the fair value of its Swap Transaction based on Level 2 valuation inputs, including fixed interest rates, LIBOR implied forward interest rates and the remaining time to maturity. At July 1, 2016 , the Swap Transaction was a liability with a fair value of $163.1 thousand . Financial Instruments Carried at Historical Cost The Company’s long-term debt is not quoted. Fair value was estimated using a discounted cash flow analysis based on Level 2 valuation inputs, including borrowing rates the Company believes are currently available to it for loans with similar terms and maturities. The Company’s debt is carried at historical cost on the balance sheet. A summary of the fair value and carrying value of fixed rate debt at period end follows: July 1, 2016 September 30, 2015 Fair Value Carrying Value Fair Value Carrying Value (in thousands) Term Loan A $ 3,746 $ 3,878 $ 4,412 $ 4,804 Celmet Building Term Loan $ 891 $ 953 $ 954 $ 1,062 The fair value of the remainder of the Company’s debt approximated carrying value at July 1, 2016 and September 30, 2015 as it is variable rate debt. |
WARRANTY RESERVES
WARRANTY RESERVES | 9 Months Ended |
Jul. 01, 2016 | |
Product Warranties Disclosures [Abstract] | |
WARRANTY RESERVES | NOTE 11—WARRANTY RESERVES IEC generally warrants its products and workmanship for up to twelve months from date of sale. As an offset to warranty claims, the Company is sometimes able to obtain reimbursement from suppliers for warranty-related costs or losses. 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 and services sold through the balance sheet date. A summary of additions to and charges against IEC’s warranty reserves during the period follows: Nine Months Ended Warranty Reserve July 1, June 26, (in thousands) Reserve, beginning of period $ 399 $ 251 Provision 126 287 Warranty costs (228 ) (237 ) Reserve, end of period $ 297 $ 301 |
DEFERRED GRANTS
DEFERRED GRANTS | 9 Months Ended |
Jul. 01, 2016 | |
Deferred Grants [Abstract] | |
DEFERRED GRANTS | NOTE 12—DEFERRED GRANTS The Company received grants for certain facility improvements from state and local agencies in which the Company operates. These grants reimburse the Company for a portion of the actual cost or provide in kind services in support of capital projects. The Company received a total of $0.9 million of grants prior to fiscal 2015. There were no deferred grants recorded in fiscal 2016 or fiscal 2015. One of the Company’s grants is a loan to grant agreement. The Company signed a promissory note, which was to be forgiven if certain employment targets are met at specified dates. The portion of the promissory note to be forgiven is calculated by applying the ratio of jobs created to jobs committed to the original note amount. If the employment targets are not met, the Company is obligated to repay the loan with interest. The Company received a government grant for the purchase of equipment upgrades to accommodate existing and anticipated business growth. Required employment targets for this grant were met as of September 30, 2014. The Company is also the recipient of matching grants from two local governmental agencies related to certain renovations for one of its operating locations. One agency contributed in kind services and property of $0.1 million while the other contributed cash of $0.1 million to match expenditures by the Company of at least the same amount. The grants are amortized over the useful lives of the related fixed assets when there is reasonable assurance that the Company will meet the employment targets. Accumulated amortization for the portion of the Company's loan to grant that was converted to a promissory note was adjusted in the three months ended January 1, 2016. Grant amortization during the three and nine months ended July 1, 2016 and June 26, 2015 follows: Three Months Ended Nine Months Ended July 1, June 26, July 1, June 26, (in thousands) (unaudited) (unaudited) Grant amortization $ 56 $ 41 $ 123 $ 123 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Jul. 01, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 13—STOCK-BASED COMPENSATION The 2010 Omnibus Incentive Compensation Plan (the “2010 Plan”) was approved by the Company’s stockholders at the January 2011 Annual Meeting. This plan replaced IEC’s 2001 Stock Option and Incentive Plan (the “2001 Plan”), which expired in December 2011. The 2010 Plan, which is administered by the Compensation Committee of the Board of Directors, provides for the following types of 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. Awards are generally granted to certain members of management and employees, as well as directors. Under the 2010 Plan, up to 2,000,000 shares of common stock may be issued over a term of ten years . Stock-based compensation expense recorded under the 2010 and 2001 Plans as well as the ESPP totaled $0.3 million and $2.0 million for the nine months ended July 1, 2016 and June 26, 2015 , respectively. As further discussed in Note 17—Litigation , during the nine months ended July 1, 2016 , incentive compensation shares were returned by the Company's former CEO resulting in a reduction to compensation expense of $60.0 thousand . At July 1, 2016 there were 663,940 shares available to be issued under the 2010 Plan. On February 2, 2015 , the Company announced that its stockholders elected all seven Vintage Opportunity Fund, LP nominated directors to the Company’s Board of Directors. This change in the Company's Board of Directors was deemed a change in control event which triggered automatic vesting for all awards outstanding under the 2010 and 2001 Plans. On the change in control date, 390,882 shares of restricted stock and 119,500 stock options vested, which resulted in stock-based compensation expense of $1.8 million . Expenses relating to stock options that comply with certain U.S. income tax rules are neither deductible by the Company nor taxable to the employee. Further information regarding awards granted under the 2001 Plan, 2010 Plan and employee stock purchase plan is provided below. Stock Options When options are granted, IEC estimates the fair value of the option using the Black-Scholes option pricing model and recognizes the computed value as compensation cost over the vesting period, which is typically four years. The contractual term of options granted under the 2010 Plan is generally seven years. Assumptions used in the Black-Scholes model and the estimated value of options granted during the nine months ended July 1, 2016 and June 26, 2015 are included in the table below. Nine Months Ended Valuation of Options July 1, June 26, Assumptions for Black-Scholes: Risk-free interest rate 1.10 % 1.29 % Expected term in years 4.0 4.5 Volatility 39 % 40 % Expected annual dividends none none Value of options granted: Number of options granted 10,000 517,145 Weighted average fair value per share $ 1.40 $ 1.44 Fair value of options granted (000's) $ 14 $ 745 A summary of stock option activity, together with other related data, follows: Nine Months Ended July 1, 2016 June 26, 2015 Stock Options Number Wgtd. Avg. Number Wgtd. Avg. Outstanding, beginning of period 717,645 $ 4.40 234,000 $ 4.48 Granted 10,000 4.64 517,145 4.14 Exercised — — (25,932 ) 1.87 Shares withheld for payment of exercise — — (16,068 ) 1.88 Forfeited — — (8,300 ) 6.04 Expired (17,250 ) 5.82 (9,200 ) 6.06 Outstanding, end of period 710,395 $ 4.37 691,645 $ 4.35 For options expected to vest Number expected to vest 686,417 $ 4.38 519,399 $ 4.44 Weighted average remaining term, in years 5.2 5.5 Intrinsic value (000s) $ 74 $ 213 For exercisable options Number exercisable 265,286 $ 4.82 20,550 $ 5.01 Weighted average remaining term, in years 4.2 3.6 Intrinsic value (000s) $ 19 $ 70 For non-exercisable options Expense not yet recognized (000s) $ 553 $ 660 Weighted average years to be recognized 2.8 3.8 For options exercised Intrinsic value (000s) $ — $ 119 Changes in the number of non-vested options outstanding, together with other related data, follows: Nine Months Ended July 1, 2016 June 26, 2015 Stock Options Number Wgtd. Avg. Number Wgtd. Avg. Non-vested, beginning of period 546,145 $ 1.41 112,350 $ 2.15 Granted 10,000 1.40 517,145 1.44 Vested (111,036 ) 1.43 (135,050 ) 2.08 Forfeited — — (8,300 ) 2.35 Non-vested, end of period 445,109 $ 1.41 486,145 $ 1.42 Restricted (Non-vested) Stock Holders of IEC restricted stock have voting and dividend rights as of the date of grant, but until vested, the shares may be forfeited and cannot be sold or otherwise transferred. At the end of the vesting period, which is typically four or five years ( three years in the case of directors), holders have all the rights and privileges of any other IEC common stockholder. The fair value of a share of restricted stock is its market value on the date of grant, and that value is recognized as stock compensation expense over the vesting period. A summary of restricted stock activity, together with related data, follows: Nine Months Ended July 1, 2016 June 26, 2015 Restricted (Non-vested) Stock Number of Wgtd. Avg. Number of Wgtd. Avg. Outstanding, beginning of period 54,960 $ 4.23 322,873 $ 4.97 Granted 187,449 4.43 171,155 5.02 Vested (12,300 ) 4.23 (316,539 ) 5.08 Shares withheld for payment of (150 ) 4.20 (133,329 ) 4.53 Forfeited — — (1,200 ) 3.91 Outstanding, end of period 229,959 $ 4.39 42,960 $ 4.22 For non-vested shares Expense not yet recognized (000s) $ 988 $ 180 Weighted average remaining years for vesting 2.4 2.1 For shares vested Aggregate fair value on vesting dates (000s) $ 47 $ 2,062 Employee Stock Purchase Plan The Company administers an ESPP that provides for a discounted stock purchase price. On February 13, 2015, the Compensation Committee of the Company’s Board of Directors suspended operation of the ESPP indefinitely in connection with the 2014 Restatements described in Note 1—Our Business and Summary of Significant Accounting Policies . The Compensation Committee of the Company's Board of Directors reinstated the ESPP on December 2, 2015; however, participants were not able to contribute to the ESPP until January 2016. Employees currently receive a 10% discount on stock purchases through the ESPP. Employee contributions to the plan, net of withdrawals were $13.8 thousand and $8.0 thousand for the nine months ended July 1, 2016 and June 26, 2015 , respectively. Compensation expense recognized under the ESPP was $1.8 thousand and $1.0 thousand for the nine months ended July 1, 2016 and June 26, 2015 , respectively. Stock Issued to Board Members In addition to annual grants of restricted stock, included in the table above, Board members may elect to have their meeting fees paid in the form of shares of the Company’s common stock. In connection with the Prior Restatement of the Company’s financial statements, the Company determined not to pay, and has not paid, any meeting fees in stock since May 21, 2013. |
RETIREMENT PLAN
RETIREMENT PLAN | 9 Months Ended |
Jul. 01, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
RETIREMENT PLAN | 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. The Company contributes 25% of the first 6% contributed by all employees at all locations. Company contributions during the nine months ended July 1, 2016 and June 26, 2015 totaled $195 thousand and $200 thousand , respectively. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Jul. 01, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 15—INCOME TAXES Provision for income taxes during the three and nine months ended July 1, 2016 and June 26, 2015 follows: Three Months Ended Nine Months Ended Income Tax Provision/Benefit July 1, June 26, July 1, June 26, (in thousands) Provision for/(benefit from) income taxes $ (6 ) $ (4 ) $ (6 ) $ (4 ) The Company has recorded a full valuation allowance on all deferred tax assets. Although we have recorded a full valuation allowance for all deferred tax assets, including net operating loss carryforwards (“NOLs”), these NOLs remain available to the Company to offset taxable income and reduce tax payments. IEC has federal NOLs for income tax purposes of approximately $35.8 million at September 30, 2015 , expiring mainly in years 2021 through 2026. At September 30, 2015 , the Company also had state NOLs of $27.9 million , expiring mainly in years 2021 through 2025 and $1.2 million of New York state investment tax and other credit carryforwards, expiring in various years through 2028. The credits cannot be utilized until the New York NOL is exhausted. Recent New York state corporate tax reform has reduced the business income base rate for qualified manufacturers in New York state to 0% beginning in fiscal 2015 for IEC. As a result of this legislation, the Company has not attributed any value to its state NOLs. |
MARKET SECTORS AND MAJOR CUSTOM
MARKET SECTORS AND MAJOR CUSTOMERS | 9 Months Ended |
Jul. 01, 2016 | |
Risks and Uncertainties [Abstract] | |
MARKET SECTORS AND MAJOR CUSTOMERS | NOTE 16—MARKET SECTORS AND MAJOR CUSTOMERS A summary of sales, according to the market sector within which IEC's customers operate, follows: Three Months Ended Nine Months Ended % of Sales by Sector July 1, June 26, July 1, June 26, Aerospace & Defense 43% 32% 39% 37% Medical 39% 34% 44% 32% Industrial 16% 32% 15% 28% Communications & Other 2% 2% 2% 3% 100% 100% 100% 100% Two individual customers each represented 10% or more of sales for the nine months ended July 1, 2016 . Both customers were from the Medical sector and represented 17% of sales each. Three individual customers represented 10% or more of sales for the nine months ended June 26, 2015 . One customer in the Industrial sector represented 19% of sales, while two customers in the Medical sector represented 14% and 12% of sales for the nine months ended June 26, 2015 . Four individual customers represented 10% or more of receivables and accounted for 44% of outstanding balances at July 1, 2016 . Three individual customers represented 10% or more of receivables and accounted for 43% of the outstanding balances at June 26, 2015 . Credit risk associated with individual customers is periodically evaluated by analyzing the entity’s financial condition and payment history. Customers generally are not required to post collateral. |
LITIGATION
LITIGATION | 9 Months Ended |
Jul. 01, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
LITIGATION | NOTE 17—LITIGATION On June 28, 2016, the Company consented to the entry of a settled administrative order by the U.S. Securities and Exchange Commission (the “SEC”) alleging violations of the antifraud, periodic and current reporting, internal controls, and books-and-records provisions of the federal securities laws. As part of the settled administrative order, the Company (i) neither admitted nor denied the SEC’s findings, (ii) paid a penalty of $200,000 , and (iii) agreed to cease-and-desist from committing or causing any violations or future violations of those provisions. In addition, the settled administrative order included settled charges and sanctions against two individuals who are no longer associated with the Company - a former Executive Vice President of the Company and a former Controller of SCB that was the subject of the Prior Restatement. In connection with the Prior Restatement, W. Barry Gilbert, our former chief executive officer and director, voluntarily returned to the Company certain incentive compensation and the proceeds from certain sales of the Company's common stock. These transfers, which were made during the three months ended January 1, 2016, were in the form of cash of $42 thousand and shares of common stock valued at $60 thousand . Effective March 16, 2016, the Company entered into a separation agreement with Mr. Gilbert (the “Separation Agreement”). Pursuant to the terms of the Separation Agreement, Mr. Gilbert received a separation benefit of $500 thousand that was paid on March 16, 2016 and $200 thousand paid on May 16, 2016, and he will receive $100 thousand payable on both March 16, 2017 and March 16, 2018, and $75 thousand payable on each of March 16, 2019 and March 16, 2020. The expense associated with the separation agreement is included in selling and administrative expenses, a portion of which was recorded in the prior fiscal year. The remaining unpaid amount is included in accrued payroll and related expenses. The separation benefit is subject to acceleration in the event of certain changes in control of the Company. The Company also released Mr. Gilbert from any and all claims and causes of action directly or indirectly related to Mr. Gilbert’s employment relationship with the Company. In consideration of the foregoing, Mr. Gilbert agreed to release the Company from any and all claims and causes of action arising out of or relating to his previous employment with the Company, as well as certain other covenants set forth in the Separation Agreement. From time to time, the Company may be involved in other legal action in the ordinary course of its business, but management does not believe that any such other proceedings commenced through the date of the financial statements included in this Form 10-Q, individually or in the aggregate, will have material adverse effect on the Company’s consolidated financial position. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Jul. 01, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 18—COMMITMENTS AND CONTINGENCIES Loss Contingencies As discussed in Note 17—Litigation , on June 28, 2016, the Company consented to the entry of a settled administrative order by the SEC. The settled administrative order included settled charges and sanctions against two individuals who are no longer associated with the Company. The Company has insurance that covers the Company and certain individuals (including the two former employees discussed above) for certain expenses incurred in connection with the SEC investigation. Through July 1, 2016 , the Company has received aggregate reimbursements from its primary carrier of approximately $9.0 million . The Company’s insurance policy contains exclusion provisions that are triggered when “a final, non-appealable adjudication” in an underlying proceeding or action “establishes” certain conduct, including “any deliberately fraudulent act or omission or any willful violation of any statute or regulation.” The Company's resolution of the SEC investigation was on a “no admit or deny” basis and, as such, does not “establish” any conduct as part of any “final, non-appealable adjudication.” Accordingly, the Company has concluded it is not probable that the insurance carrier would (i) seek to recoup the reimbursement of expenses it has made to the Company or (ii) be successful in the event that recoupment were sought. Purchase Commitments During August 2011, one of IEC's operating units entered into a five -year agreement with one of its suppliers to purchase a minimum volume of materials in exchange for receiving favorable pricing on the unit's purchases. The agreement was subsequently amended to extend through September 30, 2018. In the event the unit's cumulative purchases do not equal or exceed stated minimums, the supplier has a right to terminate the agreement and the IEC unit would be obligated to pay an early termination fee that declines from $365 thousand to zero over the term of the agreement. As of the date of this Form 10-Q, the Company expects to exceed the minimum purchase requirements under the agreement, thereby avoiding any termination fee. |
OUR BUSINESS AND SUMMARY OF S25
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Jul. 01, 2016 | |
Accounting Policies [Abstract] | |
Our Business | Our Business IEC Electronics Corp. (“IEC”, “we”, “our”, “us”, or the “Company”) provides electronic contract manufacturing services (“EMS”) to companies in various industries that require advanced technology. We specialize in the custom manufacture of high reliability, complex circuit boards and system-level assemblies; a wide array of cable and wire harness assemblies capable of withstanding extreme environments; and precision metal components. We provide EMS 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 board assembly equipment together with a full complement of high-reliability manufacturing stress testing methods. Our customers are at the center of everything we do and we are 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. |
Generally Accepted Accounting Principles | Generally Accepted Accounting Principles IEC's financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), as set forth in the Financial Accounting Standards Board's (“FASB”) Accounting Standards Codification (“ASC”). |
Fiscal Calendar | Fiscal Calendar The Company’s fiscal year ends on September 30th and the first three quarters end generally on the Friday closest to the last day of the calendar quarter. |
Consolidation | Consolidation The consolidated financial statements include the accounts of IEC and its wholly owned subsidiaries: IEC Electronics Wire and Cable, Inc. (“Wire and Cable”); IEC Electronics Corp-Albuquerque (“Albuquerque”); and IEC Analysis & Testing Laboratory, LLC (“ATL”), formerly Dynamic Research and Testing Laboratories, LLC. The Celmet unit (“Celmet”) operates as a division of IEC. As further discussed in Note 2—SCB Divestiture and Discontinued Operations , the operations of our wholly-owned subsidiary, formerly known as Southern California Braiding, Inc. (“SCB”), were divested during the fourth quarter of fiscal 2015. All significant intercompany transactions and accounts are eliminated in consolidation. |
Unaudited Financial Statements | Unaudited Financial Statements The accompanying unaudited financial statements for the three and nine months ended July 1, 2016 and June 26, 2015 have been prepared in accordance with GAAP for interim financial information. In the opinion of management, all adjustments required for a fair presentation of the information have been made. The accompanying financial statements should be read in conjunction with the financial statements and notes included in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2015 . |
Reclassifications | Reclassifications Prior year financial statement amounts are reclassified as necessary to conform to the current year presentation, including presentation of results of discontinued operations. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company’s cash and cash equivalents principally represent deposit accounts with Manufacturers and Traders Trust Company (“M&T Bank”), a banking corporation headquartered in Buffalo, NY. |
Allowance for Doubtful Accounts | 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 | Inventory Valuation Inventories are stated at the lower of cost or market value 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 Property, plant and equipment (“PP&E”) 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, while renewals and improvements are capitalized. At the time of retirement or other disposition of PP&E, cost and accumulated depreciation are removed from the accounts and any gain or loss is recorded in earnings. 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. PP&E Lives Estimated (years) Land improvements 10 Buildings and improvements 5 to 40 Machinery and equipment 3 to 5 Furniture and fixtures 3 to 7 |
Intangible Assets | Intangible Assets Intangible assets (other than goodwill) are those that lack physical substance and are not financial assets. Such assets held by IEC were acquired in connection with business combinations and the remaining assets represent economic benefits associated with a property tax abatement. Values assigned to individual intangible assets are amortized using the straight-line method over their estimated useful lives. |
Reviewing Long-Lived Assets for Potential Impairment | Reviewing Long-Lived Assets for Potential Impairment ASC 360-10 (Property, Plant and Equipment) and ASC 350-30 (Intangibles) require the Company to test long-lived assets (PP&E and definitive lived assets) for recoverability whenever events or circumstances indicate that the carrying amount may not be recoverable. If carrying value exceeds undiscounted future cash flows attributable to an asset, it is considered impaired and the excess of carrying value over fair value must be charged to earnings. No impairment charges were recorded by IEC for property, plant and equipment or intangibles in fiscal 2016. |
Goodwill | Goodwill Goodwill represents the excess of cost over fair value of net assets acquired in a business combination. Under ASC 350, goodwill is not amortized but is reviewed for impairment at least annually or when events or circumstances indicate that carrying value may exceed fair value. The Company may elect to precede a quantitative review for impairment with a qualitative assessment of the likelihood that fair value of a particular reporting unit exceeds carrying value. If the qualitative assessment leads to a conclusion that it is more than 50 percent likely that fair value exceeds carrying value, no further testing is required. In the event of a less favorable outcome, the Company is required to proceed with quantitative testing. The quantitative process entails comparing the overall fair value of the unit to which goodwill relates to carrying value. If fair value exceeds carrying value, no further assessment of potential impairment 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 is impaired. Goodwill impairment losses are charged to earnings. |
Leases | Leases At the inception of a lease covering equipment or real estate, the lease agreement is evaluated under criteria discussed in ASC 840-10-25 (Leases). Leases meeting one of 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. For 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 or exceed 90 percent of the fair value of the property. |
Legal Contingencies | Legal Contingencies When legal proceedings are brought or claims are made against us and the outcome is uncertain, ASC 450-10 (Contingencies) requires that we determine whether it is probable that an asset has been impaired or a liability has been incurred. If such impairment or liability is probable and the amount of loss can be reasonably estimated, the loss must be charged to earnings. When it is considered probable that a loss has been incurred, but the amount of loss cannot be estimated, disclosure but not accrual of the probable loss is required. Disclosure of a loss contingency is also required when it is reasonably possible, but not probable, that a loss has been incurred. |
Customer Deposits | Customer Deposits Customer deposits represent amounts invoiced to customers for which the revenue has not yet been earned and therefore represent a commitment for the Company to deliver goods or services in the future. Deposits are generally short term in nature and are recognized as revenue when earned. |
Grants from Outside Parties | Grants from Outside Parties Grants from outside parties are recorded as other long-term liabilities and are amortized over the same period during which the associated fixed assets are depreciated. |
Derivative Financial Instruments | Derivative Financial Instruments The Company actively monitors its exposure to interest rate risk and from time to time uses derivative financial instruments to manage the impact of this risk. The Company uses derivatives only for purposes of managing risk associated with underlying exposures. The Company does not trade or use instruments with the objective of earning financial gains on the interest rate, nor does the Company use derivative instruments where it does not have underlying exposures. The Company manages its hedging position and monitors the credit ratings of counterparties and does not anticipate losses due to counterparty nonperformance. However, the Company’s use of derivative financial instruments may result in short-term gains or losses and increased earnings volatility. The Company’s instruments are recorded in the consolidated balance sheets at fair value in other assets or other long-term liabilities. |
Fair Value Measurements | Fair Value Measurements Under 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, borrowings and an interest rate swap agreement. IEC believes that recorded value approximates fair value for all cash, accounts receivable, accounts payable and accrued liabilities. ASC 820 (Fair Value Measurements and Disclosures) defines fair value, establishes a framework for measurement, and prescribes related disclosures. 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 in active markets for identical assets or liabilities that the Company can access at the measurement date. Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations in which all significant inputs are observable market data. Level 3: Model-derived valuations in which one or more significant inputs are unobservable. The Company deems a transfer between levels of the fair value hierarchy to have occurred at the beginning of the reporting period. |
Revenue Recognition | 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 (i) goods are shipped or title and risk of ownership have passed, (ii) the price to the buyer is fixed or determinable, and (iii) realization is reasonably assured. Service revenue is generally recognized once the service has been rendered. For material management arrangements, revenue is generally recognized as services are rendered. Under such arrangements, some or all of the following services may be provided: design, bid, procurement, testing, storage or other activities relating to materials the customer expects to incorporate into products that it manufactures. Value-added support services revenue, including material management and repair work revenue, amounted to less than 5% of total revenue in each of the first nine months of fiscal 2016 and fiscal 2015 . Provisions for discounts, allowances, rebates, estimated returns and other adjustments are recorded in the period the related sales are recognized. |
Stock-Based Compensation | Stock-Based Compensation ASC 718 (Stock Compensation) requires that compensation expense be recognized for equity awards based on fair value as of the date of grant. For stock options, the Company uses the Black-Scholes pricing model to estimate grant date fair value. Costs associated with stock awards are recorded over requisite service periods, generally the vesting period. If vesting is contingent on the achievement of performance objectives, fair value is accrued over the period the objectives are expected to be achieved only if it is considered probable that the objectives will be achieved. The Company also has an employee stock purchase plan (“ESPP”) that provides for discounted stock purchase price. Compensation expense related to the discount is recognized as employees contribute to the plan. |
Restatement and Related Expenses | Restatement and Related Expenses The Company restated its consolidated financial statements for the fiscal year ended September 30, 2012, and the interim fiscal quarters and year to date periods within the year ended September 30, 2012, included in the Company’s Annual Report on Form10-K/A and the fiscal quarter ended December 28, 2012, as reported in the Company’s Quarterly Report on Form 10-Q/A for that fiscal quarter (the “Prior Restatement”). The Company also restated its consolidated financial statements for the fiscal year ended September 30, 2014, and its interim financial statements for each quarterly period within the year ended September 30, 2014, included in the Company's Annual Report on Form 10-K/A, to correct an error in the valuation allowance on deferred income tax assets as well as an error in estimating excess and obsolete inventory reserves (the “2014 Restatements”). The Prior Restatement and the 2014 Restatements together are referred to as the “Restatements”. Restatement and related expenses represent third-party expenses arising from the Restatements. These expenses include legal and accounting fees incurred by the Company from external counsel and independent accountants directly attributable to the Restatements as well as other matters arising from the Prior Restatement including those more fully described in Note 17—Litigation . The Company receives reimbursement for certain of these expenses which may result in a benefit in a given period. |
Legal Expenses Accrual | Legal Expense Accrual The Company records legal expenses as they are incurred, based on invoices received or estimates provided by legal counsel. Future estimated legal expenses are not recorded until incurred. |
Income Taxes and Deferred Taxes | Income Taxes and Deferred Taxes 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 legislation, 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 the manner in which a company measures, recognizes, presents, and discloses in its financial statements uncertain tax positions that a company has taken or expects to take on a tax return. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the position will be sustained following examination by taxing authorities, based on technical merits of the position. The Company believes that it has no material uncertain tax positions. Any interest or penalties incurred are reported as interest expense. The Company’s income tax filings are subject to audit by various tax jurisdictions and current open years are fiscal 2010 through fiscal 2014. |
Earnings Per Share | Earnings Per Share Basic earnings per common share are calculated by dividing income available to common stockholders by the weighted average number of shares outstanding during each period. Diluted earnings per common share add to the denominator incremental shares resulting from the assumed exercise of all potentially dilutive stock options, as well as restricted (non-vested) stock, restricted stock units (“RSUs”) and anticipated issuances under the employee stock purchase plan. Options, restricted stock and RSUs are primarily held by directors, officers and certain employees. |
Dividends | 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. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses and the disclosure of contingent assets and liabilities. Actual results may differ from management’s estimates. |
Statements of Cash Flows | Statements of Cash Flows The Company presents operating cash flows using the indirect method of reporting under which non-cash income and expense items are removed from net income. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards FASB Accounting Standard Update (“ASU”) 2014-09, “Revenue from Contracts with Customers” was issued May 2014 and updates the principles for recognizing revenue. The ASU will supersede most of the existing revenue recognition requirements in GAAP and will require entities to recognize revenue at an amount that reflects the consideration to which a company expects to be entitled in exchange for transferring goods or services to a customer. This ASU also amends the required disclosures of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within that period. Early adoption is permitted for annual periods beginning after December 15, 2016. The Company is determining its implementation approach and evaluating the potential impacts of the new standard on its existing revenue recognition policies and procedures. FASB ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations” was issued in March 2016 and improves implementation guidance on principal versus agent considerations. The effective dates are the same as those for Topic 606. FASB ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” was issued in April 2016 and adds further guidance on identifying performance obligations as well as improving licensing implementation guidance. The amendments do not change the core principle of the guidance in Topic 606. The effective dates are the same as those for Topic 606. FASB ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” was issued in June 2016 and clarifies the objective of the collectability criterion, presentation of taxes collected from customers, non-cash consideration, contract modifications at transition, completed contracts at transition and how guidance in Topic 606 is retrospectively applied. The amendments do not change the core principle of the guidance in Topic 606. The effective dates are the same as those for Topic 606. FASB ASU 2014-12, “Compensation - Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period” was issued June 2014. This guidance was issued to resolve diversity in accounting for performance targets. A performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition and should not be reflected in the award’s grant date fair value. Compensation cost should be recognized over the required service period, if it is probable that the performance condition will be achieved. The guidance is effective for annual periods beginning after December 15, 2015 and interim periods within those annual periods. This update did not have a significant impact upon early adoption. FASB ASU 2014-15, “Presentation of Financial Statements-Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” was issued September 2014. This provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The ASU applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The Company does not anticipate a significant impact upon adoption. FASB ASU 2015-03, “Interest - Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs” was issued in April 2015. These amendments require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The ASU applies to all entities and is effective for public business entities for annual periods beginning after December 15, 2015, and interim periods thereafter, with early adoption permitted. The guidance should be applied on a retrospective basis. The Company does not anticipate a significant impact upon adoption. FASB ASU 2015-11, “Simplifying the Measurement of Inventory” was issued in July 2015. This requires entities to measure most inventory “at the lower of cost and net realizable value,” thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. The ASU will not apply to inventories that are measured by using either the last-in, first-hout method or the retail inventory method. For public business entities, the ASU is effective prospectively for annual periods beginning after December 15, 2016, and interim periods therein. Upon transition, entities must disclose the nature of and reason for the accounting change. The Company does not anticipate a significant impact upon adoption. FASB ASU No. 2015-15, Interest—Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements” was issued in August 2015 which permits an entity to report deferred debt issuance costs associated with a line-of-credit arrangement as an asset and to amortize such costs over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings under the credit line. The ASU applies to all entities and is effective for public business entities for annual periods beginning after December 15, 2015, and interim periods thereafter, with early adoption permitted. The guidance should be applied on a retrospective basis. The Company does not anticipate a significant impact upon adoption. FASB ASU 2015-17, “Income Taxes Balance Sheet Classification of Deferred Taxes” was issued in November 2015. This requires entities to classify deferred tax liabilities and assets as noncurrent in a classified statement of financial position and applies to all entities that present a classified statement of financial position. For public entities, this update is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company does not anticipate a significant impact upon adoption. FASB ASU 2016-09, “Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting” was issued in March 2016. This simplifies accounting for several aspects of share-based payment including income tax consequences, classification of awards as either equity or liability and classification on the statement of cash flows. For public entities, this update is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company does not anticipate a significant impact upon adoption. FASB ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326)” was issued in June 2016. This ASU amends the Board’s guidance on the impairment of financial instruments. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses. This ASU is effective for fiscal years beginning after December 15, 2019. Early adoption will be permitted. The Company does not anticipate a significant impact upon adoption. |
OUR BUSINESS AND SUMMARY OF S26
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Jul. 01, 2016 | |
Accounting Policies [Abstract] | |
Property, Plant and Equipment | 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. PP&E Lives Estimated (years) Land improvements 10 Buildings and improvements 5 to 40 Machinery and equipment 3 to 5 Furniture and fixtures 3 to 7 |
Schedule of Weighted Average Number of Shares | A summary of shares used in earnings per share (“EPS”) calculations follows. Three Months Ended Nine Months Ended Shares for EPS Calculation July 1, June 26, July 1, June 26, Weighted average shares outstanding 10,211,347 10,199,431 10,210,805 10,049,395 Incremental shares — — — — Diluted shares 10,211,347 10,199,431 10,210,805 10,049,395 Anti-dilutive shares excluded 940,354 734,605 940,354 734,605 |
SCB DIVESTITURE AND DISCONTIN27
SCB DIVESTITURE AND DISCONTINUED OPERATIONS (Tables) | 9 Months Ended |
Jul. 01, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | The pre-tax loss on the sale of SCB for the year ended September 30, 2015 included in Loss on discontinued operations, net in the income statement was calculated as follows: July 9, 2015 (in thousands) (unaudited) Purchase price $ 2,405 Net book value of assets sold (2,630 ) Legal fees associated with closing (114 ) Finder's fee (50 ) Sales tax on asset sale (20 ) Other (24 ) Loss on sale of SCB $ (433 ) Carrying amounts of major classes of assets and liabilities that were disposed of follows: July 9, 2015 (in thousands) (unaudited) Inventories, net $ 1,803 Other current assets 53 Fixed assets, net 916 Intangible assets, net — Customer deposits (142 ) Net assets sold $ 2,630 SCB's revenue and loss before income taxes follows: Three Months Ended Nine Months Ended June 26, June 26, (in thousands) Net sales $ 1,867 $ 5,287 Loss before income taxes $ (4,392 ) $ (5,745 ) |
ALLOWANCE FOR DOUBTFUL ACCOUN28
ALLOWANCE FOR DOUBTFUL ACCOUNTS (Tables) | 9 Months Ended |
Jul. 01, 2016 | |
Receivables [Abstract] | |
Allowance for Credit Losses on Financing Receivables | A summary follows of activity in the allowance for doubtful accounts during the nine months ended July 1, 2016 and June 26, 2015 . Nine Months Ended Allowance for Doubtful Accounts July 1, June 26, (in thousands) Allowance, beginning of period $ 423 $ 525 Provision for doubtful accounts 253 (23 ) Write-offs (298 ) (64 ) Allowance, end of period $ 378 $ 438 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Jul. 01, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | A summary of inventory by category at period end follows: Inventories July 1, September 30, (in thousands) Raw materials $ 12,705 $ 17,637 Work-in-process 5,855 8,512 Finished goods 3,256 1,341 Total inventories 21,816 27,490 Reserve for excess/obsolete inventory (1,703 ) (1,737 ) Inventories, net $ 20,113 $ 25,753 |
FIXED ASSETS (Tables)
FIXED ASSETS (Tables) | 9 Months Ended |
Jul. 01, 2016 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets Schedule And Accumulated Depreciation Disclosure | A summary of fixed assets and accumulated depreciation at period end follows: Fixed Assets July 1, September 30, (in thousands) Land and improvements $ 1,601 $ 1,601 Buildings and improvements 14,199 14,161 Machinery and equipment 26,341 26,061 Furniture and fixtures 7,349 7,291 Construction in progress 2,807 1,028 Total fixed assets, at cost 52,297 50,142 Accumulated depreciation (37,066 ) (34,699 ) Fixed assets, net $ 15,231 $ 15,443 Depreciation expense during the three and nine months ended July 1, 2016 and June 26, 2015 follows: Three Months Ended Nine Months Ended July 1, June 26, July 1, June 26, (in thousands) Depreciation expense $ 717 $ 926 $ 2,364 $ 2,910 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Jul. 01, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Indefinite-Lived Intangible Assets (Excluding Goodwill) | A summary of intangible assets by category and accumulated amortization at period end follows: Intangible Assets July 1, September 30, (in thousands) Property tax abatement - Albuquerque 360 360 Accumulated amortization (255 ) (226 ) Intangible assets, net $ 105 $ 134 |
Schedule of Amortization Expense | Amortization expense during the three and nine months ended July 1, 2016 and June 26, 2015 follows: Three Months Ended Nine Months Ended Amortization Expense July 1, June 26, July 1, June 26, (in thousands) Intangible amortization expense $ 10 $ 10 $ 29 $ 29 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | A summary of amortization expense for the next five years follows: Future Amortization Estimated future amortization (in thousands) Twelve months ended June, 2017 $ 39 2018 39 2019 27 2020 and thereafter — |
CREDIT FACILITIES (Tables)
CREDIT FACILITIES (Tables) | 9 Months Ended |
Jul. 01, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | A summary of borrowings at period end follows: Fixed/ July 1, 2016 September 30, 2015 Variable Interest Interest Debt Rate Maturity Date Balance Rate (1) Balance Rate (1) ($ in thousands) M&T credit facilities: Revolving Credit Facility v 1/18/2018 $ 5,216 4.75 % $ 12,415 4.50 % Term Loan A f 2/1/2020 3,878 3.98 4,804 3.98 Term Loan B v 2/1/2023 9,217 3.71 10,383 3.45 Albuquerque Mortgage Loan v 2/1/2018 2,244 5.00 2,467 4.75 Celmet Building Term Loan f 11/7/2018 953 4.72 1,062 4.72 Other credit facilities: Albuquerque Industrial Revenue Bond f 3/1/2019 100 5.63 100 5.63 Total debt 21,608 31,231 Less: current portion (2,665 ) (2,908 ) Long-term debt $ 18,943 $ 28,323 (1) Rates noted are before impact of interest rate swap. |
Schedule of Debt Covenant | A summary of financial covenant compliance follows: Quarterly EBITDAS Debt to EBITDAS Ratio Fixed Charge Coverage Ratio Maximum Inventory Maximum Capital Expenditures Fiscal Quarters Third 2016 Compliant Compliant Compliant Compliant Measured Annually Second 2016 Compliant Compliant Compliant Compliant Measured Annually First 2016 Compliant Compliant Compliant Compliant Measured Annually Fourth 2015 Compliant Compliant Compliant Not Applicable Not Applicable Third 2015 (1) Compliant Compliant Compliant Not Applicable Not Applicable Second 2015 (1) Waived Waived Waived Not Applicable Not Applicable First 2015 (1) Waived Waived Waived Not Applicable Not Applicable (1) The Company was subject to the 2013 Credit Agreement during these periods. Covenant Ratios in effect at July 1, 2016 , pursuant to the Fifth Amended Credit Agreement, as amended by the First Amendment, are as follows: Debt to EBITDAS Ratio: 6/26/15 through and including 9/30/15 < 5.75 to 1.00 10/01/15 through and including 1/01/16 < 5.10 to 1.00 1/02/16 through and including 4/01/16 < 3.95 to 1.00 4/02/16 through and including 7/01/16 < 3.65 to 1.00 7/02/16 through and including 9/30/16 < 3.10 to 1.00 Thereafter < 3.10 to 1.00 Minimum Quarterly EBITDAS : Fiscal Quarter ending 9/30/15 $ 1,500,000 Fiscal Quarter ending 1/01/16 1,785,000 Fiscal Quarter ending 4/01/16 1,900,000 Fiscal Quarter ending 7/01/16 1,800,000 Fiscal Quarter ending 9/30/16 2,190,000 Thereafter 2,190,000 Fixed Charge Coverage Ratio: 6/26/15 through and including 9/30/15 > 0.45 to 1.00 10/01/15 through and including 1/01/16 > 0.75 to 1.00 1/02/16 through and including 4/01/16 > 1.00 to 1.00 4/02/16 through and including 7/01/16 > 1.10 to 1.00 7/2/16 and thereafter > 1.25 to 1.00 Maximum Inventory: As of January 1, 2016 $ 30,000,000 As of April 1, 2016 29,000,000 As of July 1, 2016 28,000,000 As of September 30, 2016 27,000,000 As of December 30, 2016 26,000,000 As of the end of the Fiscal Quarter ending March 31, 2017 25,000,000 As of the end of each Fiscal Quarter thereafter 25,000,000 Maximum Capital Expenditures $ 4,500,000 |
Schedule of Maturities of Long-term Debt | A summary of contractual principal payments under IEC's borrowings for the next five years taking into consideration the Fifth Amended Credit Agreement follows: Debt Repayment Schedule Contractual (in thousands) Twelve months ended June, 2017 $ 2,665 2018 (1) 9,857 2019 3,315 2020 2,037 2021 and thereafter 3,734 $ 21,608 (1) Includes Revolver balance of $5.2 million at July 1, 2016 . |
FAIR VALUE OF FINANCIAL INSTR33
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Jul. 01, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value and Carrying Value of Variable Rate Debt | A summary of the fair value and carrying value of fixed rate debt at period end follows: July 1, 2016 September 30, 2015 Fair Value Carrying Value Fair Value Carrying Value (in thousands) Term Loan A $ 3,746 $ 3,878 $ 4,412 $ 4,804 Celmet Building Term Loan $ 891 $ 953 $ 954 $ 1,062 |
WARRANTY RESERVES (Tables)
WARRANTY RESERVES (Tables) | 9 Months Ended |
Jul. 01, 2016 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Product Warranty Liability | A summary of additions to and charges against IEC’s warranty reserves during the period follows: Nine Months Ended Warranty Reserve July 1, June 26, (in thousands) Reserve, beginning of period $ 399 $ 251 Provision 126 287 Warranty costs (228 ) (237 ) Reserve, end of period $ 297 $ 301 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Jul. 01, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | Assumptions used in the Black-Scholes model and the estimated value of options granted during the nine months ended July 1, 2016 and June 26, 2015 are included in the table below. Nine Months Ended Valuation of Options July 1, June 26, Assumptions for Black-Scholes: Risk-free interest rate 1.10 % 1.29 % Expected term in years 4.0 4.5 Volatility 39 % 40 % Expected annual dividends none none Value of options granted: Number of options granted 10,000 517,145 Weighted average fair value per share $ 1.40 $ 1.44 Fair value of options granted (000's) $ 14 $ 745 |
Changes in Number of Options Outstanding with Other Related Data | A summary of stock option activity, together with other related data, follows: Nine Months Ended July 1, 2016 June 26, 2015 Stock Options Number Wgtd. Avg. Number Wgtd. Avg. Outstanding, beginning of period 717,645 $ 4.40 234,000 $ 4.48 Granted 10,000 4.64 517,145 4.14 Exercised — — (25,932 ) 1.87 Shares withheld for payment of exercise — — (16,068 ) 1.88 Forfeited — — (8,300 ) 6.04 Expired (17,250 ) 5.82 (9,200 ) 6.06 Outstanding, end of period 710,395 $ 4.37 691,645 $ 4.35 For options expected to vest Number expected to vest 686,417 $ 4.38 519,399 $ 4.44 Weighted average remaining term, in years 5.2 5.5 Intrinsic value (000s) $ 74 $ 213 For exercisable options Number exercisable 265,286 $ 4.82 20,550 $ 5.01 Weighted average remaining term, in years 4.2 3.6 Intrinsic value (000s) $ 19 $ 70 For non-exercisable options Expense not yet recognized (000s) $ 553 $ 660 Weighted average years to be recognized 2.8 3.8 For options exercised Intrinsic value (000s) $ — $ 119 |
Schedule of Nonvested Stock Options Activity | Changes in the number of non-vested options outstanding, together with other related data, follows: Nine Months Ended July 1, 2016 June 26, 2015 Stock Options Number Wgtd. Avg. Number Wgtd. Avg. Non-vested, beginning of period 546,145 $ 1.41 112,350 $ 2.15 Granted 10,000 1.40 517,145 1.44 Vested (111,036 ) 1.43 (135,050 ) 2.08 Forfeited — — (8,300 ) 2.35 Non-vested, end of period 445,109 $ 1.41 486,145 $ 1.42 |
Changes in Number of Restricted Non-vested Stock Outstanding with Other Related Data | A summary of restricted stock activity, together with related data, follows: Nine Months Ended July 1, 2016 June 26, 2015 Restricted (Non-vested) Stock Number of Wgtd. Avg. Number of Wgtd. Avg. Outstanding, beginning of period 54,960 $ 4.23 322,873 $ 4.97 Granted 187,449 4.43 171,155 5.02 Vested (12,300 ) 4.23 (316,539 ) 5.08 Shares withheld for payment of (150 ) 4.20 (133,329 ) 4.53 Forfeited — — (1,200 ) 3.91 Outstanding, end of period 229,959 $ 4.39 42,960 $ 4.22 For non-vested shares Expense not yet recognized (000s) $ 988 $ 180 Weighted average remaining years for vesting 2.4 2.1 For shares vested Aggregate fair value on vesting dates (000s) $ 47 $ 2,062 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Jul. 01, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | Provision for income taxes during the three and nine months ended July 1, 2016 and June 26, 2015 follows: Three Months Ended Nine Months Ended Income Tax Provision/Benefit July 1, June 26, July 1, June 26, (in thousands) Provision for/(benefit from) income taxes $ (6 ) $ (4 ) $ (6 ) $ (4 ) |
MARKET SECTORS AND MAJOR CUST37
MARKET SECTORS AND MAJOR CUSTOMERS (Tables) | 9 Months Ended |
Jul. 01, 2016 | |
Risks and Uncertainties [Abstract] | |
Schedules of Concentration of Risk, by Risk Factor | A summary of sales, according to the market sector within which IEC's customers operate, follows: Three Months Ended Nine Months Ended % of Sales by Sector July 1, June 26, July 1, June 26, Aerospace & Defense 43% 32% 39% 37% Medical 39% 34% 44% 32% Industrial 16% 32% 15% 28% Communications & Other 2% 2% 2% 3% 100% 100% 100% 100% |
OUR BUSINESS AND SUMMARY OF S38
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Plant and Equipment(Details) | 9 Months Ended |
Jul. 01, 2016 | |
Land improvements [Member] | |
Estimated useful lives | 10 years |
Buildings and improvements [Member] | Minimum [Member] | |
Estimated useful lives | 5 years |
Buildings and improvements [Member] | Maximum [Member] | |
Estimated useful lives | 40 years |
Machinery and equipment [Member] | Minimum [Member] | |
Estimated useful lives | 3 years |
Machinery and equipment [Member] | Maximum [Member] | |
Estimated useful lives | 5 years |
Furniture and fixtures [Member] | Minimum [Member] | |
Estimated useful lives | 3 years |
Furniture and fixtures [Member] | Maximum [Member] | |
Estimated useful lives | 7 years |
OUR BUSINESS AND SUMMARY OF S39
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) | 9 Months Ended | |
Jul. 01, 2016 | Jun. 26, 2015 | |
Asset impairment charges | $ 0 | |
Material Management [Member] | ||
Maximum percentage of total revenue | 5.00% | 5.00% |
OUR BUSINESS AND SUMMARY OF S40
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Earnings Per Share(Details) - shares | 3 Months Ended | 9 Months Ended | |||
Jul. 01, 2016 | Jun. 26, 2015 | Mar. 27, 2015 | Jul. 01, 2016 | Jun. 26, 2015 | |
Accounting Policies [Abstract] | |||||
Weighted average shares outstanding (in shares) | 10,211,347 | 10,199,431 | 10,210,805 | 10,049,395 | |
Incremental shares (in shares) | 0 | 0 | 0 | 0 | |
Diluted shares (in shares) | 10,211,347 | 10,199,431 | 10,210,805 | 10,049,395 | |
Anti-dilutive shares excluded (in shares) | 940,354 | 734,605 | 940,354 | 734,605 |
SCB DIVESTITURE AND DISCONTIN41
SCB DIVESTITURE AND DISCONTINUED OPERATIONS (Narrative) (Details) - USD ($) | Jul. 09, 2015 | Jun. 26, 2015 | Jun. 26, 2015 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Sale of SCB assets | $ 2,500,000 | ||
Sales tax on asset sale | $ 0 | $ 0 | |
Southern California Braiding, Inc. [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Sale of SCB assets | 2,500,000 | ||
Consideration | 2,405,000 | ||
Impairment charges | $ 4,100,000 | ||
Sales tax on asset sale | $ 20,000 |
SCB DIVESTITURE AND DISCONTIN42
SCB DIVESTITURE AND DISCONTINUED OPERATIONS (Loss from Disposal of Discontinued Operations) (Details) - USD ($) | Jul. 09, 2015 | Jun. 26, 2015 | Jun. 26, 2015 | Sep. 30, 2015 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Sales tax on asset sale | $ 0 | $ 0 | ||
Southern California Braiding, Inc. [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Purchase price | $ 2,405,000 | |||
Net book value of assets sold | 2,630,000 | |||
Legal fees associated with closing | 114,000 | |||
Finder's fee | 50,000 | |||
Sales tax on asset sale | 20,000 | |||
Other | $ 24,000 | |||
Loss on sale of SCB | $ (433,000) |
SCB DIVESTITURE AND DISCONTIN43
SCB DIVESTITURE AND DISCONTINUED OPERATIONS (Assets Sold, Net) (Details) - Southern California Braiding, Inc. [Member] $ in Thousands | Jul. 09, 2015USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Inventories, net | $ 1,803 |
Other current assets | 53 |
Fixed assets, net | 916 |
Intangible assets, net | 0 |
Customer deposits | 142 |
Net assets sold | $ 2,630 |
SCB DIVESTITURE AND DISCONTIN44
SCB DIVESTITURE AND DISCONTINUED OPERATIONS (Net Sales and Loss Before Taxes) (Details) - Southern California Braiding, Inc. [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Jun. 26, 2015 | Jun. 26, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net sales | $ 1,867 | $ 5,287 |
Loss before income taxes | $ (4,392) | $ (5,745) |
ALLOWANCE FOR DOUBTFUL ACCOUN45
ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Jul. 01, 2016 | Jun. 26, 2015 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Allowance, beginning of period | $ 423 | $ 525 |
Provision for doubtful accounts | 253 | (23) |
Write-offs | (298) | (64) |
Allowance, end of period | $ 378 | $ 438 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jul. 01, 2016 | Sep. 30, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 12,705 | $ 17,637 |
Work-in-process | 5,855 | 8,512 |
Finished goods | 3,256 | 1,341 |
Total inventories | 21,816 | 27,490 |
Reserve for excess/obsolete inventory | (1,703) | (1,737) |
Inventories, net | $ 20,113 | $ 25,753 |
FIXED ASSETS - Summary of Fixed
FIXED ASSETS - Summary of Fixed Assets (Details) - USD ($) $ in Thousands | Jul. 01, 2016 | Sep. 30, 2015 |
Property, Plant and Equipment [Abstract] | ||
Land and improvements | $ 1,601 | $ 1,601 |
Buildings and improvements | 14,199 | 14,161 |
Machinery and equipment | 26,341 | 26,061 |
Furniture and fixtures | 7,349 | 7,291 |
Construction in progress | 2,807 | 1,028 |
Total fixed assets, at cost | 52,297 | 50,142 |
Accumulated depreciation | (37,066) | (34,699) |
Fixed assets, net | $ 15,231 | $ 15,443 |
FIXED ASSETS - Depreciation Exp
FIXED ASSETS - Depreciation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 01, 2016 | Jun. 26, 2015 | Jul. 01, 2016 | Jun. 26, 2015 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 717 | $ 926 | $ 2,364 | $ 2,910 |
INTANGIBLE ASSETS - Narrative (
INTANGIBLE ASSETS - Narrative (Details) - Property tax abatement [Member] - Albuquerque [Member] - USD ($) | 3 Months Ended | 9 Months Ended | |
Jul. 01, 2016 | Jul. 01, 2016 | Sep. 30, 2015 | |
Amount allocated to intangibles | $ 360,000 | $ 360,000 | $ 360,000 |
Estimated useful life | 9 years 2 months 12 days | ||
Impairment of intangible assets | $ 0 |
INTANGIBLE ASSETS - Summary of
INTANGIBLE ASSETS - Summary of Intangibles (Details) - USD ($) $ in Thousands | Jul. 01, 2016 | Sep. 30, 2015 |
Accumulated amortization | $ (255) | $ (226) |
Intangible assets, net | 105 | 134 |
Property tax abatement [Member] | Albuquerque [Member] | ||
Property tax abatement - Albuquerque | $ 360 | $ 360 |
INTANGIBLE ASSETS - Amortizatio
INTANGIBLE ASSETS - Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 01, 2016 | Jun. 26, 2015 | Jul. 01, 2016 | Jun. 26, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Intangible amortization expense | $ 10 | $ 10 | $ 29 | $ 29 |
INTANGIBLE ASSETS - Amortizat52
INTANGIBLE ASSETS - Amortization Expense Maturity Schedule (Details) $ in Thousands | Jul. 01, 2016USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,017 | $ 39 |
2,018 | 39 |
2,019 | 27 |
2020 and thereafter | $ 0 |
GOODWILL (Details)
GOODWILL (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Jul. 01, 2016 | Sep. 30, 2010 | |
Goodwill impairment | $ 0 | |
Celmet [Member] | ||
Goodwill from acquisitions | $ 100,000 |
CREDIT FACILITIES - Summary of
CREDIT FACILITIES - Summary of Borrowings (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Jul. 01, 2016 | Sep. 30, 2015 | ||
Total debt | $ 21,608 | $ 31,231 | |
Less: current portion | (2,665) | (2,908) | |
Long-term debt | $ 18,943 | $ 28,323 | |
Term Loan A [Member] | |||
Fixed/Variable Rate | Fixed Interest Rate | ||
Maturity Date | Feb. 1, 2020 | ||
Interest Rate | [1] | 3.98% | 3.98% |
Total debt | $ 3,878 | $ 4,804 | |
Term Loan B [Member] | |||
Fixed/Variable Rate | Variable Interest Rate | ||
Maturity Date | Feb. 1, 2023 | ||
Interest Rate | [1] | 3.71% | 3.45% |
Total debt | $ 9,217 | $ 10,383 | |
Albuquerque Mortgage Loan [Member] | |||
Fixed/Variable Rate | Variable Interest Rate | ||
Maturity Date | Feb. 1, 2018 | ||
Interest Rate | [1] | 5.00% | 4.75% |
Total debt | $ 2,244 | $ 2,467 | |
Celmet Building Term Loan [Member] | |||
Fixed/Variable Rate | Fixed Interest Rate | ||
Maturity Date | Nov. 7, 2018 | ||
Interest Rate | [1] | 4.72% | 4.72% |
Total debt | $ 953 | $ 1,062 | |
Albuquerque Industrial Revenue Bond [Member] | |||
Fixed/Variable Rate | Fixed Interest Rate | ||
Maturity Date | Mar. 1, 2019 | ||
Interest Rate | [1] | 5.63% | 5.63% |
Total debt | $ 100 | $ 100 | |
Revolving Credit Facility [Member] | |||
Fixed/Variable Rate | Variable Interest Rate | ||
Maturity Date | Jan. 18, 2018 | ||
Interest Rate | [1] | 4.75% | 4.50% |
Total debt | $ 5,200 | $ 12,415 | |
[1] | Rates noted are before impact of interest rate swap. |
CREDIT FACILITIES - Narrative (
CREDIT FACILITIES - Narrative (Details) | Jun. 20, 2016USD ($) | Dec. 14, 2015 | Nov. 30, 2013USD ($) | Jan. 31, 2013USD ($) | Dec. 31, 2009USD ($) | Sep. 30, 2015USD ($) | Jun. 26, 2015USD ($) | Mar. 27, 2015USD ($) | Dec. 26, 2014USD ($) | Jun. 19, 2016USD ($) | Jul. 01, 2016USD ($)event | Jun. 26, 2015USD ($) | Nov. 08, 2013USD ($) | Jan. 18, 2013USD ($) | Dec. 16, 2009USD ($) |
Maximum borrowing capacity | $ 20,000,000 | ||||||||||||||
Average borrowing capacity | $ 9,700,000 | ||||||||||||||
Unused capacity, commitment fee percentage | 0.50% | ||||||||||||||
Notional amount | $ 14,000,000 | ||||||||||||||
Fixed interest rate | 1.32% | ||||||||||||||
Maximum Capital Expenditures | $ 4,500,000 | $ 3,500,000 | |||||||||||||
Albuquerque [Member] | |||||||||||||||
Liabilities assumed | $ 100,000 | ||||||||||||||
Amendment 2014 [Member] | |||||||||||||||
Net earnings before interest,taxes, depreciation and amortization | $ 1,250,000 | $ 1,500,000 | |||||||||||||
Term Loan B [Member] | |||||||||||||||
Fixed interest rate | 3.25% | ||||||||||||||
Interest rate, effective percentage | 4.57% | ||||||||||||||
Term Loan B [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 3.25% | ||||||||||||||
Credit Agreement 2013 [Member] | Term Loan A [Member] | |||||||||||||||
Long-term line of credit | $ 10,000,000 | ||||||||||||||
Repayment monthly installments | 108 equal monthly installments | ||||||||||||||
Line of credit facility, periodic payment, principal | $ 93,000 | ||||||||||||||
Credit Agreement 2013 [Member] | Term Loan B [Member] | |||||||||||||||
Long-term line of credit | $ 14,000,000 | ||||||||||||||
Repayment monthly installments | 120 equal monthly installments | ||||||||||||||
Line of credit facility, periodic payment, principal | $ 117,000 | ||||||||||||||
Credit Agreement 2013 [Member] | Albuquerque Mortgage Loan [Member] | |||||||||||||||
Repayment monthly installments | 59 equal monthly installments | monthly installments | |||||||||||||
Credit Agreement 2013 [Member] | Celmet Term Loan [Member] | |||||||||||||||
Debt instrument, periodic payment, principal | $ 11,000 | ||||||||||||||
Sixth Amendment [Member] | |||||||||||||||
Maximum Legal And Accounting Fees Associated With The Restatement | $ 200,000 | $ 200,000 | $ 2,652,659 | $ 235,112 | |||||||||||
Sixth Amendment [Member] | Term Loan B [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 3.25% | ||||||||||||||
Fifth Amendment [Member] | |||||||||||||||
Number of events of default | event | 0 | ||||||||||||||
Fifth Amendment [Member] | Term Loan B [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 3.25% | ||||||||||||||
Revolving Credit Facility [Member] | |||||||||||||||
Maximum borrowing capacity | $ 20,000,000 | ||||||||||||||
Maturity date | Jan. 18, 2018 | ||||||||||||||
Maximum borrowing capacity as percentage of eligible receivables | 85.00% | ||||||||||||||
Maximum borrowing capacity as percentage of eligible inventory | 35.00% | ||||||||||||||
Maximum borrowing capacity based on eligible inventories | $ 3,750,000 | ||||||||||||||
Maximum borrowing capacity based on eligible inventories, upper limit | 4,750,000 | ||||||||||||||
Current borrowing capacity | $ 20,000,000 | $ 17,700,000 | |||||||||||||
Revolving Credit Facility [Member] | Minimum [Member] | |||||||||||||||
Unused capacity, commitment fee percentage | 0.25% | ||||||||||||||
Revolving Credit Facility [Member] | Maximum [Member] | |||||||||||||||
Unused capacity, commitment fee percentage | 0.50% | ||||||||||||||
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 4.25% | ||||||||||||||
Revolving Credit Facility [Member] | Credit Agreement 2013 [Member] | |||||||||||||||
Average borrowing capacity | $ 20,000,000 | ||||||||||||||
Commitment fee amount | $ 44,900 | $ 38,200 | |||||||||||||
Revolving Credit Facility [Member] | Sixth Amendment [Member] | |||||||||||||||
Maximum borrowing capacity as percentage of eligible receivables | 85.00% | ||||||||||||||
Maximum borrowing capacity as percentage of eligible inventory | 70.00% | ||||||||||||||
Maximum borrowing capacity based on eligible inventories, upper limit | $ 4,750,000 | ||||||||||||||
Revolving Credit Facility [Member] | Sixth Amendment [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 4.25% | ||||||||||||||
Revolving Credit Facility [Member] | Fifth Amendment [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 4.25% | ||||||||||||||
Albuquerque Mortgage Loan [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 4.50% | ||||||||||||||
Albuquerque Mortgage Loan [Member] | Credit Agreement 2013 [Member] | |||||||||||||||
Long-term line of credit | $ 4,000,000 | ||||||||||||||
Debt instrument, periodic payment, principal | $ 22,000 | ||||||||||||||
Balloon payment to be paid | $ 1,800,000 | ||||||||||||||
Albuquerque Mortgage Loan [Member] | Sixth Amendment [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 4.50% | ||||||||||||||
Albuquerque Mortgage Loan [Member] | Fifth Amendment [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 4.50% | ||||||||||||||
Celmet Term Loan [Member] | Third Amendment [Member] | |||||||||||||||
Face amount | $ 1,300,000 |
CREDIT FACILITIES - Covenant Ra
CREDIT FACILITIES - Covenant Ratios (Details) | Jun. 20, 2016USD ($) | Jun. 19, 2016USD ($) | Jul. 01, 2016USD ($) |
Maximum Inventory: | |||
Maximum Capital Expenditures | $ 4,500,000 | $ 3,500,000 | |
Fifth Amendment [Member] | |||
Maximum Inventory: | |||
Maximum Capital Expenditures | $ 4,500,000 | ||
Fifth Amendment [Member] | As of January 1, 2016 [Member] | |||
Maximum Inventory: | |||
Inventory | 30,000,000 | ||
Fifth Amendment [Member] | As of April 1, 2016 [Member] | |||
Maximum Inventory: | |||
Inventory | 29,000,000 | ||
Fifth Amendment [Member] | As of July 1, 2016 [Member] | |||
Maximum Inventory: | |||
Inventory | 28,000,000 | ||
Fifth Amendment [Member] | As of September 30, 2016 [Member] | |||
Maximum Inventory: | |||
Inventory | 27,000,000 | ||
Fifth Amendment [Member] | As of December 30, 2016 [Member] | |||
Maximum Inventory: | |||
Inventory | 26,000,000 | ||
Fifth Amendment [Member] | As of the end of the Fiscal Quarter ending March 31, 2017 [Member] | |||
Maximum Inventory: | |||
Inventory | 25,000,000 | ||
Fifth Amendment [Member] | As of the end of each Fiscal Quarter thereafter [Member] | |||
Maximum Inventory: | |||
Inventory | $ 25,000,000 | ||
Fifth Amendment [Member] | First Quarter Ending September 30, 2015 [Member] | |||
Debt to EBITDAS Ratio: | |||
Debt to EBITDAS ratio | 5,750 | ||
Minimum Quarterly EBITDAS : | |||
Net earnings before interest,taxes, depreciation and amortization | $ 1,500,000 | ||
Fixed Charge Coverage Ratio: | |||
Fixed charge coverage ratio | 450 | ||
Fifth Amendment [Member] | First Quarter Ending January 1, 2016 [Member] | |||
Debt to EBITDAS Ratio: | |||
Debt to EBITDAS ratio | 5,100 | ||
Minimum Quarterly EBITDAS : | |||
Net earnings before interest,taxes, depreciation and amortization | $ 1,785,000 | ||
Fixed Charge Coverage Ratio: | |||
Fixed charge coverage ratio | 750 | ||
Fifth Amendment [Member] | Fiscal Quarter Ending April 1, 2016 [Member] | |||
Debt to EBITDAS Ratio: | |||
Debt to EBITDAS ratio | 3,950 | ||
Minimum Quarterly EBITDAS : | |||
Net earnings before interest,taxes, depreciation and amortization | $ 1,900,000 | ||
Fixed Charge Coverage Ratio: | |||
Fixed charge coverage ratio | 1,000 | ||
Fifth Amendment [Member] | Fiscal Quarter Ending July 1, 2016 [Member] | |||
Debt to EBITDAS Ratio: | |||
Debt to EBITDAS ratio | 3,650 | ||
Minimum Quarterly EBITDAS : | |||
Net earnings before interest,taxes, depreciation and amortization | $ 1,800,000 | ||
Fixed Charge Coverage Ratio: | |||
Fixed charge coverage ratio | 1,100 | ||
Fifth Amendment [Member] | Fiscal Quarter Ending September 30, 2016 [Member] | |||
Debt to EBITDAS Ratio: | |||
Debt to EBITDAS ratio | 3,100 | ||
Minimum Quarterly EBITDAS : | |||
Net earnings before interest,taxes, depreciation and amortization | $ 2,190,000 | ||
Fixed Charge Coverage Ratio: | |||
Fixed charge coverage ratio | 1,250 | ||
Fifth Amendment [Member] | Thereafter September 30, 2016 [Member] | |||
Debt to EBITDAS Ratio: | |||
Debt to EBITDAS ratio | 3,100 | ||
Minimum Quarterly EBITDAS : | |||
Net earnings before interest,taxes, depreciation and amortization | $ 2,190,000 |
CREDIT FACILITIES - Long-term D
CREDIT FACILITIES - Long-term Debt Maturities (Details) - USD ($) $ in Thousands | Jul. 01, 2016 | Sep. 30, 2015 | |
Debt Instrument [Line Items] | |||
2,017 | $ 2,665 | ||
2,018 | [1] | 9,857 | |
2,019 | 3,315 | ||
2,020 | 2,037 | ||
2021 and thereafter | 3,734 | ||
Total debt | 21,608 | $ 31,231 | |
Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Total debt | $ 5,200 | $ 12,415 | |
[1] | Includes Revolver balance of $5.2 million at July 1, 2016. |
DERIVATIVE FINANCIAL INSTRUME58
DERIVATIVE FINANCIAL INSTRUMENTS (Details) - USD ($) | Jul. 01, 2016 | Apr. 01, 2016 | Sep. 30, 2015 | Jan. 18, 2013 |
Notional amount | $ 14,000,000 | |||
Fixed interest rate | 1.32% | |||
Interest Rate Swap [Member] | ||||
Fair value of interest rate swap asset | $ 163,100 | $ 46,000 | ||
Term Loan B [Member] | ||||
Fixed interest rate | 3.25% | |||
Applicable margin rate | 3.25% | 4.57% |
FAIR VALUE OF FINANCIAL INSTR59
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) | Jul. 01, 2016 | Sep. 30, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Value | $ 21,608,000 | $ 31,231,000 |
Term Loan A [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 3,746,000 | 4,412,000 |
Carrying Value | 3,878,000 | 4,804,000 |
Celmet Building Term Loan [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 891,000 | 954,000 |
Carrying Value | 953,000 | 1,062,000 |
Interest Rate Swap [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap asset | $ 163,100 | $ 46,000 |
WARRANTY RESERVES (Details)
WARRANTY RESERVES (Details) - Warranty Reserves [Member] - USD ($) $ in Thousands | 9 Months Ended | |
Jul. 01, 2016 | Jun. 26, 2015 | |
Warranty Reserve | ||
Reserve, beginning of period | $ 399 | $ 251 |
Provision | 126 | 287 |
Warranty costs | (228) | (237) |
Reserve, end of period | $ 297 | $ 301 |
DEFERRED GRANTS (Details)
DEFERRED GRANTS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Jul. 01, 2016 | Jun. 26, 2015 | Jul. 01, 2016 | Jun. 26, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | |
Deferred Grants [Line Items] | ||||||
Grant proceeds | $ 0 | $ 0 | $ 0 | $ 900,000 | ||
Grant amortization | 56,000 | $ 41,000 | 123,000 | $ 123,000 | ||
Local Government Agency Two [Member] | ||||||
Deferred Grants [Line Items] | ||||||
Grant proceeds | 100,000 | 100,000 | ||||
Local Government Agency One [Member] | ||||||
Deferred Grants [Line Items] | ||||||
Grant proceeds | $ 100,000 | $ 100,000 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) | Feb. 02, 2015USD ($)Directorshares | Jul. 01, 2016USD ($)shares | Jun. 26, 2015USD ($)shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 324,000 | $ 1,990,000 | |
Reduction to compensation expense | $ 60,000 | $ (604,000) | |
Number of directors elected | Director | 7 | ||
Shares vested (in shares) | shares | 111,036 | 135,050 | |
Compensation expense | $ 324,000 | $ 1,990,000 | |
Director [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 4 years | ||
Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 5 years | ||
Employee Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 4 years | ||
2010 Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum number of common shares that may be issued (in shares) | shares | 2,000,000 | ||
Common shares, issuance term | 10 years | ||
Shares available for issuance (in shares) | shares | 663,940 | ||
2010 Plan [Member] | Employee Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award expiration period | 7 years | ||
2010 and 2001 Plans [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 1,800,000 | ||
2010 and 2001 Plans [Member] | Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares vested (in shares) | shares | 390,882 | ||
2010 and 2001 Plans [Member] | Employee Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares vested (in shares) | shares | 119,500 | ||
ESPP [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Employee stock purchase discount (percent) | 10.00% | ||
Employee contributions | $ 13,800 | 8,000 | |
Compensation expense | $ 1,800 | $ 1,000 |
STOCK-BASED COMPENSATION - Valu
STOCK-BASED COMPENSATION - Valuation Assumptions (Details) - USD ($) | 9 Months Ended | |
Jul. 01, 2016 | Jun. 26, 2015 | |
Assumptions for Black-Scholes: | ||
Risk-free interest rate | 1.10% | 1.29% |
Expected term in years | 4 years 6 months | |
Volatility | 39.00% | 40.00% |
Expected annual dividends | $ 0 | $ 0 |
Value of options granted: | ||
Number of options granted (in shares) | 10,000 | 517,145 |
Weighted average fair value per share (in dollars per share) | $ 1.40 | $ 1.44 |
Fair value of options granted (000's) | $ 14,000 | $ 745,000 |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Jul. 01, 2016 | Jun. 26, 2015 | |
Number of Options | ||
Outstanding, beginning of period (in shares) | 717,645 | 234,000 |
Granted (in shares) | 10,000 | 517,145 |
Exercised (in shares) | 0 | (25,932) |
Shares withheld for payment of taxes upon exercise of stock option (in shares) | 0 | (16,068) |
Forfeited (in shares) | 0 | (8,300) |
Expired (in shares) | (17,250) | (9,200) |
Outstanding, end of period (in shares) | 710,395 | 691,645 |
Wgtd. Avg. Exercise Price | ||
Outstanding, beginning of period (in dollars per share) | $ 4.40 | $ 4.48 |
Granted (in dollars per share) | 4.64 | 4.14 |
Exercised (in dollars per share) | 0 | 1.87 |
Shares withheld for payment of taxes upon exercise of stock option (in dollars per share) | 0 | 1.88 |
Forfeited (in dollars per share) | 0 | 6.04 |
Expired (in dollars per share) | 5.82 | 6.06 |
Outstanding, end of period (in dollars per share) | $ 4.37 | $ 4.35 |
For options expected to vest | ||
Number expected to vest (in shares) | 686,417 | 519,399 |
Number expected to vest (in dollars per share) | $ 4.38 | $ 4.44 |
Weighted average remaining term, in years | 5 years 2 months 20 days | 5 years 6 months |
Intrinsic value (000s) | $ 74 | $ 0 |
For exercisable options | ||
Number exercisable (in shares) | 265,286 | 20,550 |
Number exercisable (in dollars per share) | $ 4.82 | $ 5.01 |
Weighted average remaining term, in years | 4 years 2 months 28 days | 3 years 7 months |
Intrinsic value (000s) | $ 19 | $ 0 |
For non-exercisable options | ||
Expense not yet recognized (000s) | $ 553 | $ 1 |
Weighted average years to be recognized | 2 years 9 months 26 days | 3 years 9 months |
For options exercised, Intrinsic value (000s) | $ 0 | $ 119 |
STOCK-BASED COMPENSATION - Chan
STOCK-BASED COMPENSATION - Changes in Non-Vested Options Outstanding (Details) - $ / shares | 9 Months Ended | |
Jul. 01, 2016 | Jun. 26, 2015 | |
Number of Options | ||
Non-vested, beginning of period (in shares) | 546,145 | 112,350 |
Granted (in shares) | 10,000 | 517,145 |
Vested (in shares) | (111,036) | (135,050) |
Forfeited (in shares) | 0 | (8,300) |
Non-vested, end of period (in shares) | 445,109 | 486,145 |
Wgtd. Avg. Grant Date Fair Value | ||
Non-vested, beginning of period (in dollars per share) | $ 1.41 | $ 2.15 |
Granted (in dollars per share) | 1.40 | 1.44 |
Vested (in dollars per share) | 1.43 | 2.08 |
Forfeited (in dollars per share) | 0 | 2.35 |
Non-vested, end of period (in dollars per share) | $ 1.41 | $ 1.42 |
STOCK-BASED COMPENSATION - Su66
STOCK-BASED COMPENSATION - Summary of Restricted Stock Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Jul. 01, 2016 | Jun. 26, 2015 | |
Number of Non-vested Shares [Roll Forward] | ||
Vested (in shares) | (12,300) | |
Shares withheld for payment of taxes upon vesting of restricted stock (in shares) | 0 | (16,068) |
Wgtd. Avg. Grant Date Fair Value [Roll Forward] | ||
Granted (in dollars per share) | $ 4.43 | |
Shares withheld for payment of taxes upon vesting of restricted stock (in dollars per share) | $ 0 | $ 1.88 |
Restricted Stock [Member] | ||
Number of Non-vested Shares [Roll Forward] | ||
Outstanding, beginning of period (in shares) | 54,960 | 322,873 |
Granted (in shares) | 187,449 | 171,155 |
Vested (in shares) | (316,539) | |
Shares withheld for payment of taxes upon vesting of restricted stock (in shares) | (150) | (133,329) |
Forfeited (in shares) | 0 | (1,200) |
Outstanding, end of period (in shares) | 229,959 | 42,960 |
Wgtd. Avg. Grant Date Fair Value [Roll Forward] | ||
Outstanding, beginning of period (in dollars per share) | $ 4.23 | $ 4.97 |
Granted (in dollars per share) | 5.02 | |
Vested (in dollars per share) | 4.23 | 5.08 |
Shares withheld for payment of taxes upon vesting of restricted stock (in dollars per share) | 4.20 | 4.53 |
Forfeited (in dollars per share) | 0 | 3.91 |
Outstanding, end of period (in dollars per share) | $ 4.39 | $ 4.22 |
For non-vested shares | ||
Expense not yet recognized (000s) | $ 988 | $ 180 |
Weighted average remaining years for vesting | 2 years 4 months 21 days | 2 years 1 month |
For shares vested | ||
Aggregate fair value on vesting dates (000s) | $ 47 | $ 2,062 |
RETIREMENT PLAN (Details)
RETIREMENT PLAN (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Jul. 01, 2016 | Jun. 26, 2015 | |
Compensation and Retirement Disclosure [Abstract] | ||
Contributions by employer, percentage | 25.00% | |
Defined Contribution Plan, Employer Matching Contribution, Percent of Match | 6.00% | |
Contributions by employer | $ 195 | $ 200 |
INCOME TAXES - Tax Provision_Be
INCOME TAXES - Tax Provision/Benefit (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 01, 2016 | Jun. 26, 2015 | Jul. 01, 2016 | Jun. 26, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Provision for/(benefit from) income taxes | $ (6) | $ (4) | $ (6) | $ (4) |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) $ in Millions | Sep. 30, 2015USD ($) |
Business income base tax rate | 0.00% |
Investment Tax Credit Carryforward [Member] | |
Operating loss carryforwards | $ 1.2 |
Domestic Tax Authority [Member] | |
Operating loss carryforwards | 35.8 |
State and Local Jurisdiction [Member] | |
Operating loss carryforwards | $ 27.9 |
MARKET SECTORS AND MAJOR CUST70
MARKET SECTORS AND MAJOR CUSTOMERS - Summary of Sales (Details) - Sales Revenue, Segment [Member] | 3 Months Ended | 9 Months Ended | ||
Jul. 01, 2016 | Jun. 26, 2015 | Jul. 01, 2016 | Jun. 26, 2015 | |
Percentage of Sales by Sector | 100.00% | 100.00% | 100.00% | 100.00% |
Aerospace & Defense [Member] | ||||
Percentage of Sales by Sector | 43.00% | 32.00% | 39.00% | 37.00% |
Medical [Member] | ||||
Percentage of Sales by Sector | 39.00% | 34.00% | 44.00% | 32.00% |
Industrial [Member] | ||||
Percentage of Sales by Sector | 16.00% | 32.00% | 15.00% | 28.00% |
Communications & Other [Member] | ||||
Percentage of Sales by Sector | 2.00% | 2.00% | 2.00% | 3.00% |
MARKET SECTORS AND MAJOR CUST71
MARKET SECTORS AND MAJOR CUSTOMERS - Narrative (Details) - customer | 9 Months Ended | |
Jul. 01, 2016 | Jun. 26, 2015 | |
Concentration risk, number of customers | 2 | 3 |
Customer Concentration Risk [Member] | Sales [Member] | Industrial [Member] | ||
Concentration risk, number of customers | 1 | |
Concentration risk, percentage | 19.00% | |
Customer Concentration Risk [Member] | Sales [Member] | Medical [Member] | ||
Concentration risk, number of customers | 2 | |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | ||
Concentration risk, number of customers | 4 | 3 |
Concentration risk, percentage | 44.00% | 43.00% |
Customer Number One [Member] | Customer Concentration Risk [Member] | Sales [Member] | Medical [Member] | ||
Concentration risk, percentage | 14.00% | |
Customer Number Two [Member] | Customer Concentration Risk [Member] | Sales [Member] | Medical [Member] | ||
Concentration risk, percentage | 17.00% | 12.00% |
LITIGATION (Details)
LITIGATION (Details) - USD ($) | Mar. 16, 2020 | Mar. 16, 2019 | Mar. 16, 2018 | Mar. 16, 2017 | Jun. 28, 2016 | May 16, 2016 | Mar. 16, 2016 | Jan. 01, 2016 | Jul. 01, 2016 | Jun. 26, 2015 |
Loss Contingencies [Line Items] | ||||||||||
Cash portion of incentive compensation and stock proceeds returned | $ 42,000 | |||||||||
Incentive compensation shares returned | $ (60,000) | $ 0 | ||||||||
W. Barry Gilbert Arbitration [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Value of damages sought | $ 200,000 | $ 500,000 | ||||||||
W. Barry Gilbert Arbitration [Member] | Scenario, Forecast [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Value of damages sought | $ 75,000 | $ 75,000 | $ 100,000 | $ 100,000 | ||||||
Pending Litigation [Member] | SEC Investigation [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Penalty payment | $ 200,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | Jun. 28, 2016employee | Aug. 31, 2011USD ($) | Jan. 01, 2016USD ($) |
Number of former employees receiving Wells Notes related to SEC investigation | employee | 2 | ||
Insurance recoveries | $ 9,000,000 | ||
Long-term purchase commitment, period | 5 years | ||
Maximum [Member] | |||
Early termination fee | $ 365,000 | ||
Minimum [Member] | |||
Early termination fee | $ 0 |