Cover Page
Cover Page - shares | 6 Months Ended | |
Apr. 02, 2021 | Apr. 28, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Apr. 2, 2021 | |
Entity File Number | 001-34376 | |
Entity Registrant Name | IEC ELECTRONICS CORP. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 13-3458955 | |
Entity Address, Address Line One | 105 Norton Street | |
Entity Address, City or Town | Newark | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 14513 | |
City Area Code | 315 | |
Local Phone Number | 331-7742 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | IEC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 10,619,360 | |
Entity Central Index Key | 0000049728 | |
Current Fiscal Year End Date | --09-30 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands | Apr. 02, 2021 | Sep. 30, 2020 |
Current assets: | ||
Cash | $ 391 | $ 312 |
Accounts receivable, net of allowance | 27,655 | 30,361 |
Unbilled contract revenue | 18,120 | 8,773 |
Inventories | 54,075 | 51,374 |
Other current assets | 2,836 | 1,757 |
Total current assets | 103,077 | 92,577 |
Property, plant and equipment, net | 49,915 | 23,587 |
Deferred income taxes | 5,193 | 4,840 |
Operating lease right-of-use assets, net of accumulated amortization | 215 | 260 |
Other long-term assets | 766 | 1,700 |
Total assets | 159,166 | 122,964 |
Current liabilities: | ||
Current portion of long-term debt | 248 | 0 |
Current portion of operating lease obligation | 63 | 61 |
Current portion of finance lease obligation | 1,486 | 436 |
Accounts payable | 23,244 | 29,733 |
Accrued payroll and related expenses | 1,938 | 3,659 |
Other accrued expenses | 455 | 457 |
Customer deposits | 27,779 | 19,783 |
Total current liabilities | 55,213 | 54,129 |
Long-term debt | 34,060 | 21,476 |
Long-term operating lease obligation | 152 | 184 |
Long-term finance lease obligation | 26,275 | 6,616 |
Other long-term liabilities | 2,977 | 1,404 |
Total liabilities | 118,677 | 83,809 |
Commitments and contingencies (Note 11) | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, $0.01 par value: 500,000 shares authorized; none issued or outstanding | ||
Common stock, $0.01 par value: Authorized: 50,000,000 shares; Issued: 11,665,696 and 11,556,214 shares, respectively; Outstanding: 10,610,208 and 10,500,726 shares, respectively | 106 | 105 |
Additional paid-in capital | 49,305 | 49,161 |
Accumulated deficit | (7,333) | (8,522) |
Treasury stock, at cost: 1,055,488 shares | (1,589) | (1,589) |
Total stockholders' equity | 40,489 | 39,155 |
Total liabilities and stockholders' equity | $ 159,166 | $ 122,964 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Apr. 02, 2021 | Sep. 30, 2020 |
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 | 11,665,696 | 11,556,214 |
Common stock, shares outstanding | 10,610,208 | 10,500,726 |
Treasury stock, shares | 1,055,488 | 1,055,488 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 02, 2021 | Mar. 27, 2020 | Apr. 02, 2021 | Mar. 27, 2020 | |
Income Statement [Abstract] | ||||
Net sales | $ 45,360 | $ 44,171 | $ 92,841 | $ 88,905 |
Cost of sales | 42,048 | 38,668 | 83,789 | 78,163 |
Gross profit | 3,312 | 5,503 | 9,052 | 10,742 |
Selling and administrative expenses | 3,487 | 3,217 | 7,005 | 6,516 |
Operating (loss)/profit | (175) | 2,286 | 2,047 | 4,226 |
Interest expense | 545 | 396 | 1,002 | 811 |
(Loss)/income before income taxes | (720) | 1,890 | 1,045 | 3,415 |
(Benefit from)/provision for income taxes | (372) | 367 | (144) | 703 |
Net (loss)/income | $ (348) | $ 1,523 | $ 1,189 | $ 2,712 |
Net (loss)/income per common share: | ||||
Basic net (loss)/income per share (in Dollars per share) | $ (0.03) | $ 0.15 | $ 0.11 | $ 0.26 |
Diluted net (loss)/income per share (in Dollars per share) | $ (0.03) | $ 0.14 | $ 0.11 | $ 0.25 |
Weighted average number of shares outstanding: | ||||
Basic (in shares) | 10,583,581 | 10,393,461 | 10,553,991 | 10,379,846 |
Diluted (in shares) | 10,583,581 | 10,703,112 | 11,024,357 | 10,666,001 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS of CHANGES in STOCKHOLDERS' EQUITY (unaudited) - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Treasury Stock, at cost | Total |
Beginning Balance (shares) at Sep. 30, 2019 | 10,338,548 | ||||
Beginning Balance at Sep. 30, 2019 | $ 103,000 | $ 48,001,000 | $ (15,275,000) | $ (1,589,000) | $ 31,240,000 |
Net (loss)/income | 1,189,000 | 1,189,000 | |||
Stock-based compensation | $ 152,000 | $ 152,000 | |||
Vested restricted stock and restricted stock units, net of shares withheld for payment of taxes (shares) | (24,000) | (24,000) | |||
Vested restricted stock and restricted stock units, net of shares withheld for payment of taxes | $ 6,367 | ||||
Exercise of stock options (shares) | 24,000 | ||||
Exercise of stock options | $ 130,000 | $ 130,000 | |||
Employee stock plan purchases (shares) | 6,449 | ||||
Employee stock plan purchases | 40,000 | 40,000 | |||
Ending Balance at Dec. 27, 2019 | $ 103,000 | 48,299,000 | (14,086,000) | (1,589,000) | 32,727,000 |
Ending Balance (shares) at Dec. 27, 2019 | 10,375,364 | ||||
Beginning Balance (shares) at Sep. 30, 2019 | 10,338,548 | ||||
Beginning Balance at Sep. 30, 2019 | $ 103,000 | 48,001,000 | (15,275,000) | (1,589,000) | 31,240,000 |
Net (loss)/income | $ 2,712,000 | ||||
Exercise of stock options (shares) | 26,000 | ||||
Ending Balance at Mar. 27, 2020 | $ 103,000 | 48,424,000 | (12,563,000) | (1,589,000) | $ 34,375,000 |
Ending Balance (shares) at Mar. 27, 2020 | 10,392,116 | ||||
Beginning Balance (shares) at Dec. 27, 2019 | 10,375,364 | ||||
Beginning Balance at Dec. 27, 2019 | $ 103,000 | 48,299,000 | (14,086,000) | (1,589,000) | 32,727,000 |
Net (loss)/income | 1,523,000 | 1,523,000 | |||
Stock-based compensation | $ 185,000 | $ 185,000 | |||
Restricted stock vested, net of shares withheld for payment of taxes (shares) | (33,000) | (33,000) | |||
Restricted stock vested, net of shares withheld for payment of taxes | 4,663 | ||||
Restricted stock units vested, net of shares withheld for payment of taxes (shares) | (35,000) | (35,000) | |||
Restricted stock units vested, net of shares withheld for payment of taxes | $ 10,089 | ||||
Employee stock plan purchases (shares) | 2,000 | ||||
Employee stock plan purchases | $ 8,000 | $ 8,000 | |||
Ending Balance at Mar. 27, 2020 | $ 103,000 | 48,424,000 | (12,563,000) | (1,589,000) | $ 34,375,000 |
Ending Balance (shares) at Mar. 27, 2020 | 10,392,116 | ||||
Beginning Balance (shares) at Sep. 30, 2020 | 10,500,726 | 10,500,726 | |||
Beginning Balance at Sep. 30, 2020 | $ 105,000 | 49,161,000 | (8,522,000) | (1,589,000) | $ 39,155,000 |
Net (loss)/income | 1,537,000 | 1,537,000 | |||
Stock-based compensation | $ 242,000 | $ 242,000 | |||
Vested restricted stock and restricted stock units, net of shares withheld for payment of taxes (shares) | 1,000 | (401,000) | (400,000) | ||
Vested restricted stock and restricted stock units, net of shares withheld for payment of taxes | $ 57,455 | ||||
Exercise of stock options (shares) | 14,000 | ||||
Exercise of stock options | $ 68,000 | $ 68,000 | |||
Employee stock plan purchases (shares) | 5,852 | ||||
Employee stock plan purchases | 45,000 | 45,000 | |||
Ending Balance at Jan. 01, 2021 | $ 106,000 | 49,115,000 | (6,985,000) | (1,589,000) | $ 40,647,000 |
Ending Balance (shares) at Jan. 01, 2021 | 10,578,033 | ||||
Beginning Balance (shares) at Sep. 30, 2020 | 10,500,726 | 10,500,726 | |||
Beginning Balance at Sep. 30, 2020 | $ 105,000 | 49,161,000 | (8,522,000) | (1,589,000) | $ 39,155,000 |
Net (loss)/income | $ 1,189,000 | ||||
Exercise of stock options (shares) | 14,000 | ||||
Ending Balance at Apr. 02, 2021 | $ 106,000 | 49,305,000 | (7,333,000) | (1,589,000) | $ 40,489,000 |
Ending Balance (shares) at Apr. 02, 2021 | 10,610,208 | 10,610,208 | |||
Beginning Balance (shares) at Jan. 01, 2021 | 10,578,033 | ||||
Beginning Balance at Jan. 01, 2021 | $ 106,000 | 49,115,000 | (6,985,000) | (1,589,000) | $ 40,647,000 |
Net (loss)/income | (348,000) | (348,000) | |||
Stock-based compensation | $ 226,000 | $ 226,000 | |||
Vested restricted stock and restricted stock units, net of shares withheld for payment of taxes (shares) | (85,000) | (85,000) | |||
Vested restricted stock and restricted stock units, net of shares withheld for payment of taxes | $ 27,603 | ||||
Employee stock plan purchases (shares) | 4,572 | ||||
Employee stock plan purchases | $ 49,000 | $ 49,000 | |||
Ending Balance at Apr. 02, 2021 | $ 106,000 | $ 49,305,000 | $ (7,333,000) | $ (1,589,000) | $ 40,489,000 |
Ending Balance (shares) at Apr. 02, 2021 | 10,610,208 | 10,610,208 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS of CASH FLOWS (unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Apr. 02, 2021 | Mar. 27, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 1,189 | $ 2,712 |
Non-cash adjustments: | ||
Stock-based compensation | 468 | 337 |
Depreciation and amortization | 2,405 | 1,587 |
Change in reserve for doubtful accounts | (38) | 48 |
Change in inventory reserve and warranty reserve | 557 | 1,296 |
Gain on sale of property, plant and equipment | (26) | |
Deferred tax expense | (353) | 1,201 |
Amortization of deferred gain | (57) | (57) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 2,744 | 1,031 |
Unbilled contract revenue | (9,347) | (1,072) |
Inventories | (3,010) | (2,055) |
Federal income tax receivable | (517) | |
Other current assets | (1,079) | (267) |
Other long-term assets | 290 | (116) |
Accounts payable | (6,710) | (2,771) |
Change in book overdraft position | (231) | |
Accrued expenses | (1,971) | (1,898) |
Customer deposits | 7,996 | 2,573 |
Net change in lease right-of-use assets and liabilities | 15 | (1) |
Other long-term liabilities | 134 | |
Net cash flows (used in)/provided by operating activities | (6,793) | 1,800 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property, plant and equipment | (9,320) | (1,351) |
Proceeds from disposal of property, plant and equipment | 665 | |
Proceeds received from capital grants | 1,500 | |
Net cash flows used in investing activities | (7,155) | (1,351) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Advances from revolving credit facility | 58,451 | 36,680 |
Repayments of revolving credit facility | (50,034) | (36,763) |
Borrowings under other loan agreements | 6,630 | 0 |
Repayments under other loan agreements | (2,171) | (685) |
Payments under finance lease | (583) | (182) |
Proceeds received from lease financing obligation | 2,151 | 415 |
Debt issuance costs | (94) | |
Proceeds from exercise of stock options | 68 | 138 |
Proceeds from employee stock plan purchases | 94 | 40 |
Cash paid for taxes upon vesting of restricted stock | (485) | (92) |
Net cash flows provided by/(used in) financing activities | 14,027 | (449) |
Net cash change for the period | 79 | 0 |
Cash, beginning of period | 312 | 0 |
Cash, end of period | 391 | 0 |
Supplemental cash flow information | ||
Interest paid | 990 | 779 |
Income taxes paid | 230 | $ 20 |
Non-cash transactions: | ||
Property, plant and equipment purchased with extended payment terms | $ 221 |
OUR BUSINESS AND SUMMARY OF SIG
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Apr. 02, 2021 | |
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1—OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Our Business IEC Electronics Corp. (“IEC,” the “Company,” “we,” “our,” or “us”) provides electronic manufacturing services (“EMS”) to advanced technology companies that produce life-saving and mission critical products for the medical, industrial, aerospace and defense sectors. The Company specializes in delivering technical solutions for the custom manufacture of complex full system assemblies by providing on-site analytical testing laboratories, custom design and test engineering services combined with a broad array of manufacturing services encompassing electronics, interconnect solutions, and precision metalworking. As a full service EMS provider, IEC holds all appropriate certifications for the market sectors it supports including ISO 9001:2015, AS9100D, and ISO 13485, and we are Nadcap accredited. IEC is headquartered in Newark, NY and also has operations in Rochester, NY and Albuquerque, NM. Additional information about IEC can be found on its website at www.iec-electronics.com 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 30 and the first three quarters generally end on the Friday closest to the last day of the calendar quarter. For the fiscal year ending September 30, 2021 (“fiscal 2021”), the fiscal quarters ended or will end on January 1, 2021, April 2, 2021 and July 2, 2021. For the fiscal year ended September 30, 2020 (“fiscal 2020”), the fiscal quarters ended on December 27, 2019, March 27, 2020 and June 26, 2020. Consolidation The condensed consolidated financial statements include the accounts of IEC and its wholly-owned subsidiaries: IEC Electronics Corp-Albuquerque (“Albuquerque”); IEC Analysis & Testing Laboratory, LLC (“ATL”). All intercompany transactions and accounts are eliminated in consolidation. Unaudited Financial Statements The accompanying unaudited condensed consolidated financial statements for the three and six months ended April 2, 2021 and March 27, 2020 have been prepared without an audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and do not include certain of the information the footnotes require by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, required for a fair presentation of the information have been made. The accompanying financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2020. Cash The Company’s cash represents deposit accounts with Manufacturers and Traders Trust Company (“M&T Bank”), a banking corporation headquartered in Buffalo, NY. The Company’s cash management system provides for the funding of the disbursement accounts on a daily basis as checks are presented for payment. Under this system, outstanding checks in excess of the bank balance create a book overdraft. Book overdrafts are presented in accounts payable in the condensed consolidated balance sheets. There were no book overdrafts at April 2, 2021 and September 30, 2020. Changes in the book overdrafts are presented within net cash flows (used in)/provided by operating activities within the condensed consolidated statements of cash flows. 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 the likelihood of collection is remote. Inventory Valuation Inventories are stated at the lower of cost or net realizable 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 the lower of cost or net realizable value. 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. Estimated PP&E Lives Useful Lives (years) Land improvements 10 Buildings and improvements 5 to 40 Machinery and equipment 3 to 10 Furniture and fixtures 3 to 7 Software 3 to 10 Reviewing Long-Lived Assets for Potential Impairment ASC 360 (Property, Plant and Equipment) requires the Company to test long-lived assets (PP&E and definite 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 long-lived assets during the three and six months ended April 2, 2021 and March 27, 2020. Legal Contingencies When legal proceedings are brought or claims are made against the Company and the outcome is uncertain, ASC 450 (Contingencies) requires the Company to 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. 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. 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. 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 and borrowings. IEC believes that recorded value approximates fair value for all cash, accounts receivable, accounts payable, accrued liabilities and borrowings. 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 the three and six months ended April 2, 2021 and March 27, 2020. 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 the purchase of Company common stock at a discounted stock purchase price. 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 tax 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 the 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 incurred is reported as interest expense. Any penalties incurred are reported as tax expense. The Company’s income tax filings are subject to audit by various tax jurisdictions and current open years are the fiscal year ended September 30, 2016 through fiscal year ended September 30, 2019. 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 Sixth Amended and Restated Credit Facility Agreement with M&T Bank includes certain restrictions on paying cash dividends, as more fully described in Note 6—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. Significant items subject to such estimates include: excess and obsolete inventory reserve, warranty reserves, the valuation of deferred income tax assets and revenue recognition related to the accounts for over time contracts. 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 (loss)/income. Segments The Company’s results of operations for the three and six months ended April 2, 2021 and March 27, 2020 represent a single operating and reporting segment, referred to as contract manufacturing within the EMS industry. The Company strategically directs production between its various manufacturing facilities based on a number of considerations to best meet its customers’ requirements. The Company shares resources between its facilities for sales, marketing, engineering, supply chain, information services, human resources, payroll and corporate accounting functions. Consolidated financial information is evaluated regularly by the chief operating decision maker in assessing performance and allocating resources. The Company’s operations as a whole reflect the level at which the business is managed and how the Company’s chief operating decision maker assesses performance internally. Leases At contract inception, the Company determines if the new contractual arrangement is a lease or contains a leasing arrangement. If a contract contains a lease, the Company evaluates whether it should be classified as an operating lease or a finance lease. Upon modification of the contract, the Company will reassess to determine if a contract is or contains a leasing arrangement. The Company records lease liabilities based on the future estimated cash payments discounted over the lease term, defined as the non-cancellable time period of the lease, together with all the following: ● Periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option; and ● Periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. Leases may also include options to terminate the arrangement or options to purchase the underlying lease property. Lease components provide the Company with the right to use an identified asset, which consist of real estate properties and equipment. Non-lease components consist primarily of maintenance services. As an implicit discount rate is not readily available in the Company’s lease agreements, the Company uses its estimated secured incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future lease payments. For certain leases with original terms of twelve months or less, the Company recognizes lease expense as incurred and does not recognize any lease liabilities. Short-term and long-term portions of operating lease liabilities are classified as other current liabilities and other long-term liabilities, respectively. A right-of-use (“ROU”) asset is measured as the amount of the lease liability with adjustments, if applicable, for lease prepayments made prior to or at lease commencement, initial direct costs incurred by the Company to implement the lease and lease incentives. ROU assets are classified as other long-term assets, on the Company’s condensed consolidated balance sheets. The Company evaluates the carrying value of ROU assets if there are indicators of potential impairment and performs the analysis concurrent with the review of the recoverability of the related asset group. If the carrying value of the asset group is determined to not be fully recoverable and is in excess of its estimated fair value, the Company will record the impairment loss in its condensed consolidated statements of operations. The Company did not recognize an impairment loss during the three and six months ended April 2, 2021 and March 27, 2020. Fixed lease expense payments are recognized on a straight-line basis over the lease term. Variable lease payments vary because of changes in facts or circumstances occurring after the commencement date, other than the passage of time, and are often due to changes in an external market rate or the value of an index (e.g. Consumer Price Index). The Company did not incur variable lease payments during the three and six months ended April 2, 2021 and March 27, 2020. Recently Issued Accounting Updates In March 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848)—Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides optional guidance for a limited time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this standard apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. The amendments in this standard are elective and are effective upon issuance for all entities. The Company is evaluating the expedients and exceptions provided by the amendments in this standard to determine their impact on the Company’s condensed consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which amends the existing guidance relating to the accounting for income taxes. This ASU is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles of accounting for income taxes and to improve the consistent application of GAAP for other areas of accounting for income taxes by clarifying and amending existing guidance. This ASU is effective for fiscal years beginning after December 15, 2021, with early adoption permitted. The Company is evaluating the effect of adopting this new accounting guidance but does not expect adoption will have a material impact on the Company’s condensed consolidated financial statements. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 6 Months Ended |
Apr. 02, 2021 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | NOTE 2—REVENUE RECOGNITION ASC 606: Revenue from Contracts with Customers Satisfaction of Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Many of the Company’s contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct. The Company primarily provides contract manufacturing services to its customers. The customer provides a design, the Company procures materials and manufactures to that design and ships the product to the customer. Revenue is derived primarily from the manufacturing of these electronics components that are built to customer specifications. The Company’s performance obligations are satisfied at a point in time or over time as work progresses. Revenue from goods and services transferred to customers at a point in time accounted for 48.7% and 49.3% of the Company’s revenue for the three and six months ended April 2, 2021, respectively. Revenue from goods and services transferred to customers at a point in time accounted for 47.4% and 49.9% of the Company’s revenue for the three and six months ended March 27, 2020, respectively. Revenue on these contracts is recognized when obligations under the terms of the customer contract are satisfied, generally this occurs with the transfer of control upon shipment. If there is no enforceable right to payment for work completed to date, or the Company does not recapture costs incurred plus an applicable margin, then the Company records revenue upon shipment to the customer. Revenue from goods and services transferred to customers over time accounted for 51.3% and 50.7% of the Company’s revenue for the three and six months ended April 2, 2021, respectively. Revenue from goods and services transferred to customers over time accounted for 52.6% and 50.1% of the Company’s revenue for the three and six months ended March 27, 2020, respectively. For revenue recognized over time, the Company uses an input measure to determine progress towards completion. Under this method, sales and gross profit are recognized as work is performed generally based on the relationship between the actual costs incurred and the total estimated costs at completion. If the Company has an enforceable right to payment for work completed to date, with a recapture of costs incurred plus an applicable margin, and the goods do not have an alternative future use once the manufacturing process has commenced, then the Company records an unbilled revenue associated with non-cancellable customer orders. The Company derives revenue from engineering and design services. 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 3% of total revenue in each of the three and six months ended April 2, 2021 and March 27, 2020. Returns and Discounts The Company does not offer its customers a right of return. Rather, the Company warrants that each unit received by the customer will meet the agreed upon technical and quality specifications and requirements. Only when the delivered units do not meet these requirements can the customer return the non-compliant units as a corrective action under the warranty. The remedy offered to the customer is repair of the returned units or replacement if repair is not viable. Accordingly, the Company records a warranty reserve and any warranty activities are not considered to be a separate performance obligation. Historically, warranty reserves have not been material. Provisions for discounts, allowances, estimated returns and other adjustments are recorded in the period the related sales are recognized. Shipping and Handling Costs Amounts billed to customers for shipping and handling activities after the customer obtains control are treated as a promised service performance obligation and recorded in net sales in the accompanying condensed consolidated statements of operations. Shipping and handling costs incurred by the Company for the delivery of goods to customers are considered a cost to fulfill the contract and are included in cost of sales in the accompanying condensed consolidated statements of operations. Contract Assets Contract assets consist of unbilled contract amounts resulting from sales under contracts when the revenue recognized exceeds the amount billed to the customer. Practical Expedients and Exemptions The Company generally expenses incremental costs of obtaining a contract when incurred because the amortization period would be less than one year. These costs primarily relate to sales commissions and are recorded in selling and administrative expenses in the condensed consolidated statements of operations. The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. Disaggregated Revenue The table below shows net sales from contracts with customers by market sector. See additional information regarding market sectors in Note 10—Market Sectors and Major Customers. Three Months Ended April 2, 2021 March 27, 2020 Point in Time Over Time Net Sales Point in Time Over Time Net Sales (in thousands) Aerospace & Defense $ 11,695 $ 20,057 $ 31,752 $ 12,336 $ 14,167 $ 26,503 Medical 5,924 2,694 8,618 3,151 7,450 10,601 Industrial 4,488 502 4,990 5,430 1,637 7,067 $ 22,107 $ 23,253 $ 45,360 $ 20,917 $ 23,254 $ 44,171 Six Months Ended April 2, 2021 March 27, 2020 Point in Time Over Time Net Sales Point in Time Over Time Net Sales (in thousands) Aerospace & Defense $ 25,373 $ 35,902 $ 61,275 $ 26,792 $ 27,440 $ 54,232 Medical 10,704 9,721 20,425 6,901 14,436 21,337 Industrial 9,736 1,405 11,141 10,628 2,708 13,336 $ 45,813 $ 47,028 $ 92,841 $ 44,321 $ 44,584 $ 88,905 Customer Deposits Customer deposits are recorded when cash payments are received or due in advance of revenue recognition from contracts with customers. The timing of revenue recognition may differ from the timing of billings to customers. The changes in customer deposits from the Company’s custom manufacturing services are as follows: Six Months Ended April 2, March 27, 2021 2020 (in thousands) Beginning balance $ 19,783 $ 13,229 Recognition of deferred revenue (12,008) (8,573) Deferral of revenue 20,004 11,146 Ending balance $ 27,779 $ 15,802 Sales Outside the United States For each of the three and six months ended April 2, 2021 and March 27, 2020, less than 2% of net sales were shipped to locations outside the United States. |
ALLOWANCE FOR DOUBTFUL ACCOUNTS
ALLOWANCE FOR DOUBTFUL ACCOUNTS | 6 Months Ended |
Apr. 02, 2021 | |
ALLOWANCE FOR DOUBTFUL ACCOUNTS | |
ALLOWANCE FOR DOUBTFUL ACCOUNTS | NOTE 3—ALLOWANCE FOR DOUBTFUL ACCOUNTS A summary follows of activity in the allowance for doubtful accounts during the six months ended April 2, 2021 and March 27, 2020: Six Months Ended April 2, March 27, Allowance for doubtful accounts 2021 2020 (in thousands) Allowance, beginning of period $ 185 $ 71 (Decrease)/increase in provision for doubtful accounts (38) 48 Write-offs (3) — Allowance, end of period $ 144 $ 119 |
INVENTORIES
INVENTORIES | 6 Months Ended |
Apr. 02, 2021 | |
INVENTORIES | |
INVENTORIES | NOTE 4—INVENTORIES A summary of inventory by category at period end follows: April 2, September 30, Inventories 2021 2020 (in thousands) Raw materials $ 39,122 $ 32,904 Work-in-process 11,180 15,009 Finished goods 3,773 3,461 Total inventories $ 54,075 $ 51,374 |
PROPERTY, PLANT & EQUIPMENT, NE
PROPERTY, PLANT & EQUIPMENT, NET | 6 Months Ended |
Apr. 02, 2021 | |
PROPERTY, PLANT & EQUIPMENT, NET | |
PROPERTY, PLANT & EQUIPMENT, NET | NOTE 5—PROPERTY, PLANT AND EQUIPMENT, NET A summary of property, plant and equipment and accumulated depreciation at period end follows: April 2, September 30, Property, Plant and Equipment 2021 2020 (in thousands) Land and improvements $ 788 $ 788 Buildings and improvements 28,194 7,430 Buildings under finance lease 7,750 7,750 Machinery and equipment 35,845 34,095 Furniture and fixtures 8,795 8,113 Software 5,215 5,215 Construction in progress 11,570 6,079 Total property, plant and equipment, at cost 98,157 69,470 Accumulated depreciation (48,242) (45,883) Property, plant and equipment, net $ 49,915 $ 23,587 In November 2020, the Company commenced a lease for certain property located in Newark, New York, which includes a new state-of-the art manufacturing facility and administrative offices having approximately 153,000 square feet (the “Property”). The lease for the Property has an initial term of 15 years with one renewal option of 10 years resulting in a right of use asset of $19.1 million. In October 2020, the Company acquired an industrial and office building and certain equipment located at 50 Jetview Drive, Rochester, New York (“Jetview building”). The value of the Jetview building is recorded at $4.8 million in the construction in progress section of the above schedule for the six months ended April 2, 2021. Depreciation expense during the three and six months ended April 2, 2021 and March 27, 2020 follows: Three Months Ended Six Months Ended April 2, March 27, April 2, March 27, Depreciation Expense 2021 2020 2021 2020 (in thousands) Depreciation expense $ 1,256 $ 795 $ 2,359 $ 1,552 |
CREDIT FACILITIES
CREDIT FACILITIES | 6 Months Ended |
Apr. 02, 2021 | |
CREDIT FACILITIES | |
CREDIT FACILITIES | NOTE 6—CREDIT FACILITIES A summary of borrowings at period end follows: Fixed/ April 2, 2021 September 30, 2020 Variable Maturity Interest Interest Credit Facility Debt Rate Date Balance Rate Balance Rate (in thousands) M&T Bank credit facilities: Revolving Credit Facility v 6/4/2023 $ 28,377 2.75 % $ 19,960 2.75 % Master Lease v 6/4/2023 2,543 3.00 1,782 3.00 Jetview Term Loan v 3/1/2026 3,698 2.78 — — Total debt, gross 34,618 21,742 Unamortized debt issuance costs (310) (266) Total debt, net 34,308 21,476 Less: current portion (248) — Long-term debt $ 34,060 $ 21,476 M&T Bank Credit Facilities Effective as of June 4, 2020, the Company and M&T Bank entered into the Sixth Amended and Restated Credit Facility Agreement, as amended by the Consent and First Amendment effective as of September 30, 2020 (as amended the “Credit Facility”) which replaced the Fifth Amended and Restated Credit Facility Agreement dated as of December 14, 2015, as amended by various amendments (collectively, the “Prior Credit Facility, as amended”). Pursuant to the Credit Facility, the Company increased its revolving credit facility to an aggregate principal amount of $45.0 million and added provisions that allow the Company, subject to certain requirements, to request further increases, in minimum amounts of $5.0 million, up to $55.0 million. The Credit Facility also amended the financial covenant, Fixed Charge Coverage Ratio, and set a Minimum Fixed Charge Coverage Ratio. In addition, the Credit Facility modified the definition of Applicable Margin used to determine interest charges on outstanding and unused borrowings under the revolving credit facility and modified the definition of Permitted Acquisitions. The Credit Facility also established a LIBOR floor of 1% and included a mechanism for adoption of a different benchmark rate in the event LIBOR is discontinued. The Credit Facility prohibits the Company from making cash dividends without first obtaining the consent of M&T Bank. Also, on June 4, 2020, the Company and M&T Bank entered into a master equipment lease (the “Master Lease”) for a lease line of up to $10.0 million in lease value of equipment to the Company. The Master Lease contains terms and provisions customary for transactions of this type, including obligations relating to the use, operation and maintenance of the equipment. The Master Lease also contains customary events of default, including nonpayment of amounts due under the lease and assignments for the benefit of creditors, bankruptcy or insolvency. In the event that an event of default occurs, M&T Bank may exercise one or more remedies specified in the Master Lease. At the conclusion of the lease term, the Company will have the right to purchase the equipment under the Master Lease. The Master Lease will renew automatically for additional 12-month terms until the Company provides M&T Bank with notice of non-renewal. On March 1, 2021, the Company and M&T Bank entered into the Second Amendment to the Sixth Amended and Restated Credit Facility Agreement (the “Second Amendment”) that amended the Credit Facility. The Second Amendment provides for a mortgage-backed term loan in the principal amount of $3.7 million. The loan is evidenced by a The Credit Facility is secured by a general security agreement covering the assets of the Company and its subsidiaries, a pledge of the Company’s equity interest in its subsidiaries, a negative pledge on the Company’s real property, and a guarantee by the Company’s subsidiaries, all of which restrict use of these assets to support other financial instruments. Individual debt facilities provided under the Credit Facility as of April 2, 2021 and September 30, 2020, are described below: a) Revolving Credit Facility (“Revolver”) : At April 2, 2021 and September 30, 2020, up to $45.0 million was available under the Credit Facility through June 4, 2023. The maximum amount the Company may borrow is determined based on a borrowing base calculation described below. b) Master Lease: At April 2, 2021 and September 30, 2020, we had drawn down $2.5 million and $1.8 million, respectively, pursuant to the Master Lease that was entered into as of June 4, 2020. c) Jetview Term Loan: IEC borrowed $3.7 million on March 1, 2021, which remained unchanged as of April 2, 2021. Principal is being repaid in equal monthly installments of $20.7 thousand plus a balloon payment of $2.5 million due at maturity. The maturity date of the loan is March 1, 2026 . Borrowing Base At April 2, 2021 and September 30, 2020, under the Credit Facility, the maximum amount the Company can borrow under the Revolver was the lesser of (i) 85% of eligible receivables plus (ii) up to 90% of eligible investment grade accounts plus (iii) a percentage of eligible inventories (up to a cap of $30.0 million). At April 2, 2021, the upper limit on Revolver borrowings was $43.3 million and $15.0 million was available. At September 30, 2020, the upper limit on Revolver borrowings was $39.4 million and $19.4 million was available. Average Revolver balances amounted to $30.9 million and $25.1 million (under the Prior Credit Facility, as amended) during the six months ended April 2, 2021 and March 27, 2020, respectively. Interest Rates Under the Credit Facility, variable rate debt accrues interest at LIBOR plus the applicable marginal interest rate that fluctuates based on the Company’s Fixed Charge Coverage Ratio, as defined below. At April 2, 2021, the applicable marginal interest rate was 1.75% for the Revolver. Changes to applicable margins and unused fees resulting from the Fixed Charge Coverage Ratio generally become effective mid-way through the subsequent quarter. The Company incurs quarterly unused commitment fees ranging from 0.25% to 0.375% of the excess of $45.0 million over average borrowings under the Revolver. For the fiscal quarter ended April 2, 2021, the unused commitment fee was fixed at 0.25%. Fees incurred amounted to $11.1 thousand and $23.5 thousand during the three and six months ended April 2, 2021, respectively. Fees incurred amounted to $6.7 thousand and $12.5 thousand during the three and six months ended March 27, 2020, respectively. The fee percentage varies based on the Company’s Fixed Charge Coverage Ratio, as defined below. Financial Covenants The Credit Facility contains various affirmative and negative covenants including financial covenants. As of April 2, 2021, the Company had to maintain a minimum fixed charge coverage ratio (“Fixed Charge Coverage Ratio”). The Fixed Charge Coverage Ratio compares (i) EBITDAS minus unfinanced capital expenditures minus income tax expense, to (ii) the sum of interest expense, principal payments, payments on all capital lease obligations and dividends, if any (fixed charges). “EBITDAS” is defined as earnings before interest, income taxes, depreciation, amortization and non-cash stock compensation expense. The Fixed Charge Coverage Ratio was measured for a trailing twelve months ended April 2, 2021 as a minimum of 1.10 times. The Fixed Charge Coverage Ratio was the only covenant in effect at April 2, 2021. The Credit Facility also provides for customary events of default, subject in certain cases to customary cure periods, in which the outstanding balance and any unpaid interest would become due and payable. The Company was in compliance with the financial debt covenant at April 2, 2021. Contractual Principal Payments A summary of contractual principal payments under IEC’s borrowings at April 2, 2021 for the next two years taking into consideration the Credit Facility is as follows: Contractual Principal Debt Repayment Schedule Payments (in thousands) Twelve months ending fiscal second quarter 2022 248 2023 2,791 2024 28,624 2025 (1) 248 2026 and thereafter 2,707 $ 34,618 (1) |
WARRANTY RESERVES
WARRANTY RESERVES | 6 Months Ended |
Apr. 02, 2021 | |
WARRANTY RESERVES | |
WARRANTY RESERVES | NOTE 7—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. The warranty reserve is included in other accrued expenses on the condensed consolidated balance sheets. A summary of additions to and charges against IEC’s warranty reserves during the period follows: Six Months Ended April 2, March 27, Warranty Reserve 2021 2020 (in thousands) Reserve, beginning of period $ 100 $ 165 Provision 248 27 Warranty costs (214) (50) Reserve, end of period $ 134 $ 142 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Apr. 02, 2021 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | NOTE 8—STOCK-BASED COMPENSATION The 2019 Stock Incentive Plan (the “2019 Plan”) was approved by the Company’s stockholders at the March 2019 Annual Meeting. The 2019 Plan replaced the 2010 Omnibus Incentive Compensation Plan (“2010 Plan”) that was approved by the Company’s stockholders at the January 2011 Annual Meeting. The 2019 Plan, like the 2010 Plan, is administered by the Compensation Committee of the Board of Directors and 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. The Company also has an ESPP, adopted in 2011, that provides for the purchase of Company common stock at a discounted stock purchase price. Under the 2019 Plan, 840,360 shares of common stock, plus any shares that are subject to awards granted under the 2010 Plan that expire, are forfeited or canceled without the issuance of shares (other than shares used to pay the exercise price of a stock option under the 2010 Plan and shares used to cover the tax withholding of the award under the 2010 Plan) may be issued over a term of ten years. Under the ESPP, 150,000 shares of common stock may be issued over a term of ten years. Stock-based compensation expense recorded under the 2010 Plan and the 2019 Plan, totaled $0.2 million and $0.5 million, respectively, for each of the three and six months ended April 2, 2021. Stock-based compensation expense recorded under the 2010 Plan and the 2019 Plan, totaled $0.2 and $0.3 million, respectively, for each of the three and six months ended March 27, 2020. At April 2, 2021, there were 507,829 shares of common stock available to be issued under the 2019 Plan and 64,294 shares of common stock available to be issued under the ESPP. 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 2019 Plan, the 2010 Plan and the ESPP is provided below. Stock Options When options are granted, IEC estimates fair value 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 and 2019 Plan is generally seven years. The volatility rate is based on the historical volatility of IEC’s common stock. Assumptions used in the Black-Scholes model and the estimated value of options granted during the six months ended April 2, 2021 and March 27, 2020 follows. Six Months Ended April 2, March 27, Valuation of Options 2021 2020 Assumptions for Black-Scholes: Risk-free interest rate 0.41 % 0.51 % Expected term in years 5.5 5.5 Volatility 40 % 40 % Expected annual dividends none none Value of options granted: Number of options granted 40,000 30,000 Weighted average fair value per share $ 3.82 $ 2.68 Fair value of options granted (000s) $ 153 $ 80 A summary of stock option activity, together with other related data, follows: Six Months Ended April 2, 2021 March 27, 2020 Wgtd. Avg. Wgtd. Avg. Number Exercise Number Exercise Stock Options of Options Price of Options Price Outstanding, beginning of period 670,145 $ 4.67 743,145 $ 4.54 Granted 40,000 9.65 30,000 5.03 Exercised (14,000) 4.84 (26,000) 5.31 Forfeited (7,000) 3.74 (10,000) 3.58 Expired (3,000) 3.74 (5,000) 6.91 Outstanding, end of period 686,145 $ 4.97 732,145 $ 4.53 For options expected to vest Number expected to vest 678,145 $ 4.95 722,582 $ 4.51 Weighted average remaining contractual term, in years 5.0 3.3 Intrinsic value (000s) $ 4,499 $ 1,510 For exercisable options Number exercisable 504,020 $ 4.33 545,645 $ 4.16 Weighted average remaining contractual term, in years 4.2 1.9 Intrinsic value (000s) $ 3,656 $ 1,354 For non-exercisable options Expense not yet recognized (000s) $ 408 $ 357 Weighted average years to be recognized 2.8 3.1 For options exercised Intrinsic value (000s) $ 82 $ 75 Restricted (Non-vested) Stock Certain holders of IEC restricted stock have voting and dividend rights as of the date of grant, and, 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 A summary of restricted stock activity, together with related data, follows: Six Months Ended April 2, 2021 March 27, 2020 Wgtd. Avg. Wgtd. Avg. Number of Non- Grant Date Number of Non- Grant Date Restricted (Non-vested) Stock vested Shares Fair Value vested Shares Fair Value Outstanding, beginning of period 49,825 $ 5.32 82,707 $ 5.25 Granted 17,907 11.11 24,850 5.03 Vested (19,585) 4.59 (36,812) 4.43 Forfeited (1,000) 4.12 (13,250) 6.09 Outstanding, end of period 47,147 $ 7.85 57,495 $ 5.49 For non-vested shares Expense not yet recognized (000s) $ 329 $ 286 Weighted average remaining years for vesting 2.1 1.9 For shares vested Aggregate fair value on vesting dates (000s) $ 264 $ 260 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. The Company has not paid any meeting fees in stock since May 21, 2013. Restricted Stock Units Holders of IEC restricted stock units do not have voting and dividend rights as of the date of grant, and, until vested, the unit may be forfeited and cannot be sold or otherwise transferred. At the end of the vesting period, which is typically three years, holders will receive shares of the Company’s common stock and have all the rights and privileges of any other common stockholder of the Company. The fair value of a restricted stock unit is the market value of the underlying shares of the Company’s stock on the date of grant and that value is recognized as stock compensation expense over the vesting period. A summary of restricted stock unit activity, together with related data, follows: Six Months Ended April 2, 2021 March 27, 2020 Wgtd. Avg. Wgtd. Avg. Number of Non- Grant Date Number of Non- Grant Date Restricted Stock Units vested Units Fair Value vested Units Fair Value Outstanding, beginning of period 186,727 $ 6.56 153,186 $ 5.36 Granted 67,597 7.65 50,556 9.19 Vested (102,624) 4.28 (17,015) 3.58 Forfeited — — — — Outstanding, end of period 151,700 $ 8.58 186,727 $ 6.56 For non-vested shares Expense not yet recognized (000s) $ 878 $ 906 Weighted average remaining years for vesting 1.9 2.2 For shares vested Aggregate fair value on vesting dates (000s) $ 1,268 $ 86 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Apr. 02, 2021 | |
INCOME TAXES | |
INCOME TAXES | NOTE 9—INCOME TAXES The provision for income taxes during each of the three and six months ended April 2, 2021 and March 27, 2020 follows: Three Months Ended Six Months Ended April 2, March 27, April 2, March 27, Income Taxes 2021 2020 2021 2020 (in thousands) (Benefit from)/provision for income taxes $ (372) $ 367 $ (144) $ 703 The income tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. In response to the COVID-19 pandemic, many governments have enacted or are contemplating measures to provide aid and economic stimulus. These measures may include deferring the due dates of tax payments or other changes to their income and non-income-based tax laws. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020 in the U.S., the Consolidated Appropriations Act, 2021 (the “Consolidated Appropriations Act”), which was enacted on December 21, 2020 in the U.S., and the American Rescue Plan Act of 2021 (the “American Rescue Plan”), which was enacted on March 11, 2021 in the U.S., include measures to assist companies, including temporary changes to income and non-income-based tax laws. The Company has assessed the provisions of the CARES Act, the Consolidated Appropriations Act, and the American Rescue Plan, and has determined that there were no material tax impacts to the condensed consolidated financial statements for the three and six months ended April 2, 2021. The Company’s effective tax rate for the three and six months ended April 2, 2021 is comprised of the federal tax rate of 21% plus the state tax rate of 1.58%, which is adjusted for permanent book tax differences. During the three and six months ended April 2, 2021, the permanent items included meals and entertainment and stock based compensation. The discrete tax benefit for the three and six month periods ended April 2, 2021 is related to excess tax benefits recognized upon vesting of restricted stock units or exercise of stock options during those quarters. |
MARKET SECTORS AND MAJOR CUSTOM
MARKET SECTORS AND MAJOR CUSTOMERS | 6 Months Ended |
Apr. 02, 2021 | |
MARKET SECTORS AND MAJOR CUSTOMERS | |
MARKET SECTORS AND MAJOR CUSTOMERS | NOTE 10—MARKET SECTORS AND MAJOR CUSTOMERS A summary of sales, according to the market sector within which IEC’s customers operate, follows: Three Months Ended Six Months Ended April 2, March 27, April 2, March 27, % of Sales by Sector 2021 2020 2021 2020 Aerospace & Defense 70 % 60 % 66 % 61 % Medical 19 % 24 % 22 % 24 % Industrial 11 % 16 % 12 % 15 % 100 % 100 % 100 % 100 % Four individual customers represented 10% or more of sales for the three months ended April 2, 2021. All four of these customers were from the aerospace & defense sector and represented 24%, 17%, 12% and 10% of sales. Four individual customers represented 10% or more of sales for the six months ended April 2, 2021. Three of these customers were from the aerospace & defense sector and represented 24%, 13% and 10% of sales. The fourth customer was from the medical sector and represented 11% of sales for the six months ended April 2, 2021. Four individual customers represented 10% or more of sales for the three months ended March 27, 2020. Three of these customers were from the aerospace & defense sector and represented 25%, 12% and 11% of sales. The fourth customer was from the medical sector and represented 17% of sales for the three months ended March 27, 2020. Three individual customers represented 10% or more of sales for the six months ended March 27, 2020. Two of these customers were from the aerospace & defense sector and represented 26% and 11% of sales. The third customer was from the medical sector and represented 16% of sales for the three months ended March 27, 2020. Two individual customers represented 10% or more of receivables and accounted for 34% of the outstanding balance at April 2, 2021. Two individual customers represented 10% or more of receivables and accounted for 30% of the outstanding balance at September 30, 2020. 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. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Apr. 02, 2021 | |
COMMITMENTS AND CONTINGENCIES. | |
COMMITMENTS AND CONTINGENCIES | NOTE 11—COMMITMENTS AND CONTINGENCIES Litigation From time to time, the Company may be involved in legal actions in the ordinary course of its business, but management does not believe that any such proceedings, individually or in the aggregate, will have a material adverse effect on the Company’s condensed consolidated financial statements. |
LEASES
LEASES | 6 Months Ended |
Apr. 02, 2021 | |
LEASES | |
LEASES | NOTE 12—LEASES Operating Leases IEC has a lease portfolio that consists of operating leases for equipment, and has remaining terms from less than one year to up to approximately five years, with contractual terms expiring from 2022 to 2024. None of these leases contain residual value guarantees, substantial restrictions, or covenants. Supplemental balance sheet information related to the Company’s operating leases were as follows: April 2, September 30, Operating Leases 2021 2020 Weighted average remaining lease term for operating leases (in years) 3.3 3.8 Weighted average discount rate for operating leases 5.47 % 5.47 % Finance Leases IEC’s lease portfolio also consists of finance leases for equipment and real estate, and has remaining terms of four years up to approximately fifteen years, with contractual terms expiring in 2024 through 2035. Supplemental balance sheet information related to the Company’s finance leases were as follows: April 2, September 30, Finance Leases 2021 2020 Finance lease right-of-use assets, net of accumulated amortization (included in PP&E) (in thousands) $ 27,539 $ 6,329 Weighted average remaining lease term for finance leases (in years) 13.2 11.3 Weighted average discount rate for finance leases 3.57 % 4.83 % In November 2020 the Company commenced a lease for the Property located in Newark, New York, which includes a new state-of-the art manufacturing facility and administrative offices. The lease for the property has an initial term of 15 years with one renewal option of 10 years, resulting in a ROU asset of $19.1 million. The Company entered into a finance lease under our Master Lease for certain equipment and leasehold improvements to be located at the property resulting in a ROU asset of $2.1 million during the six months ended April 2, 2021. The equipment and leasehold improvements are included in property, plant and equipment on the condensed consolidated balance sheets. The Master Lease is described in Note 6—Credit Facilities. Lease Expense The components of lease expense, recorded in cost of sales, selling and administrative expenses and interest expense in the condensed consolidated statements of operations, during the three and six months ended April 2, 2021 and March 27, 2020 were as follows: Three Months Ended Six Months Ended April 2, March 27, April 2, March 27, Lease Expense Classification 2021 2020 2021 2020 (in thousands) Operating lease expense Fixed payment operating lease expense (1) Cost of sales $ 79 $ 68 $ 130 $ 93 Fixed payment operating lease expense Selling and administrative expenses 6 15 19 29 Variable payment operating lease expense — — — — Finance lease expense Depreciation of ROU assets Cost of sales 497 144 827 273 Depreciation of ROU assets Selling and administrative expenses 33 — 55 — Interest Interest expense 253 88 468 174 Total lease expense $ 868 $ 315 $ 1,499 $ 569 (1) Supplemental Cash Flow Information Supplemental cash flow information related to the Company’s leases during the three and six months ended April 2, 2021 and March 27, 2020 were as follows: Six Months Ended April 2, March 27, Supplemental Cash Flow 2021 2020 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Cash paid for operating lease ROU assets $ 36 $ 47 Interest paid on finance leases 468 174 Financing cash flows from finance leases — — Lease liabilities arising from obtaining ROU assets: Operating leases — 33 Finance leases $ 19,142 $ — Contractual Lease Payments A summary of operating lease payments for the next five years follows: Contractual Lease Operating Lease Payment Schedule Payments (in thousands) Twelve months ending fiscal second quarter 2022 $ 73 2023 72 2024 71 2025 19 2026 and thereafter — Total operating lease payments 235 Less: amounts representing interest (20) Total operating lease obligation $ 215 A summary of finance lease payments for the next five years follows: Contractual Lease Finance Lease Payment Schedule Payments (in thousands) Twelve months ending fiscal second quarter 2022 $ 2,452 2023 2,506 2024 2,562 2025 2,660 2026 and thereafter 24,985 Total finance lease payments 35,165 Less: amounts representing interest (7,404) Total finance lease obligation $ 27,761 |
NET (LOSS)_INCOME PER SHARE
NET (LOSS)/INCOME PER SHARE | 6 Months Ended |
Apr. 02, 2021 | |
NET (LOSS)/INCOME PER SHARE | |
NET (LOSS)/INCOME PER SHARE | NOTE 13—NET (LOSS)/INCOME PER SHARE The Company applies the two-class method to calculate and present net (loss)/income per share. Certain of the Company’s restricted (non-vested) share awards contain non-forfeitable rights to dividends and are considered participating securities for purposes of computing net (loss)/income per share pursuant to the two-class method. Under the two-class method, net earnings are reduced by the amount of dividends declared (whether paid or unpaid) and the remaining undistributed earnings are then allocated to common stock and participating securities, based on their respective rights to receive dividends. As the Company incurred a net loss for the three months ended April 2, 2021, and losses are not allocated to participating securities under the two-class method, such method is not applicable for the aforementioned interim reporting period. 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 unvested restricted stock and restricted stock units. Options, restricted stock and restricted stock units are primarily held by directors, officers and certain employees. The Company uses the two-class method to calculate net (loss)/income per share as both classes share the same rights in dividends. Therefore, basic and diluted earnings per share (“EPS”) are the same for both classes of ordinary shares. A summary of shares used in the EPS calculations follows (in thousands except share and per share data): Three Months Ended Six Months Ended April 2, March 27, April 2, March 27, Net (Loss)/Income Per Share 2021 2020 2021 2020 (in thousands, except share and per share data) Basic net (loss)/income per share: Net (loss)/income $ (348) $ 1,523 $ 1,189 $ 2,712 Less: (Loss)/income attributable to non-vested shares (2) 8 5 15 Net (loss)/income available to common stockholders $ (346) $ 1,515 $ 1,184 $ 2,697 Weighted average common shares outstanding 10,583,581 10,393,461 10,553,991 10,379,846 Basic net (loss)/income per share $ (0.03) $ 0.15 $ 0.11 $ 0.26 Diluted net (loss)/income per share: Net (loss)/income $ (348) $ 1,523 $ 1,189 $ 2,712 Shares used in computing basic net (loss)/income per share 10,583,581 10,393,461 10,553,991 10,379,846 Dilutive effect of options and non-vested shares — 309,651 470,366 286,155 Shares used in computing diluted net (loss)/income per share 10,583,581 10,703,112 11,024,357 10,666,001 Diluted net (loss)/income per share $ (0.03) $ 0.14 $ 0.11 $ 0.25 The diluted weighted average share calculations do not include the following shares, which are anti-dilutive to the EPS calculations. Three Months Ended Six Months Ended April 2, March 27, April 2, March 27, 2021 2020 2021 2020 Anti-dilutive shares excluded — — 9,325 — |
OUR BUSINESS AND SUMMARY OF S_2
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Apr. 02, 2021 | |
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Our Business | Our Business IEC Electronics Corp. (“IEC,” the “Company,” “we,” “our,” or “us”) provides electronic manufacturing services (“EMS”) to advanced technology companies that produce life-saving and mission critical products for the medical, industrial, aerospace and defense sectors. The Company specializes in delivering technical solutions for the custom manufacture of complex full system assemblies by providing on-site analytical testing laboratories, custom design and test engineering services combined with a broad array of manufacturing services encompassing electronics, interconnect solutions, and precision metalworking. As a full service EMS provider, IEC holds all appropriate certifications for the market sectors it supports including ISO 9001:2015, AS9100D, and ISO 13485, and we are Nadcap accredited. IEC is headquartered in Newark, NY and also has operations in Rochester, NY and Albuquerque, NM. Additional information about IEC can be found on its website at www.iec-electronics.com |
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 30 and the first three quarters generally end on the Friday closest to the last day of the calendar quarter. For the fiscal year ending September 30, 2021 (“fiscal 2021”), the fiscal quarters ended or will end on January 1, 2021, April 2, 2021 and July 2, 2021. For the fiscal year ended September 30, 2020 (“fiscal 2020”), the fiscal quarters ended on December 27, 2019, March 27, 2020 and June 26, 2020. |
Consolidation | Consolidation The condensed consolidated financial statements include the accounts of IEC and its wholly-owned subsidiaries: IEC Electronics Corp-Albuquerque (“Albuquerque”); IEC Analysis & Testing Laboratory, LLC (“ATL”). All intercompany transactions and accounts are eliminated in consolidation. |
Unaudited Financial Statements | Unaudited Financial Statements The accompanying unaudited condensed consolidated financial statements for the three and six months ended April 2, 2021 and March 27, 2020 have been prepared without an audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and do not include certain of the information the footnotes require by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, required for a fair presentation of the information have been made. The accompanying financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2020. |
Cash | Cash The Company’s cash represents deposit accounts with Manufacturers and Traders Trust Company (“M&T Bank”), a banking corporation headquartered in Buffalo, NY. The Company’s cash management system provides for the funding of the disbursement accounts on a daily basis as checks are presented for payment. Under this system, outstanding checks in excess of the bank balance create a book overdraft. Book overdrafts are presented in accounts payable in the condensed consolidated balance sheets. There were no book overdrafts at April 2, 2021 and September 30, 2020. Changes in the book overdrafts are presented within net cash flows (used in)/provided by operating activities within the condensed consolidated statements of cash flows. |
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 the likelihood of collection is remote. |
Inventory Valuation | Inventory Valuation Inventories are stated at the lower of cost or net realizable 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 the lower of cost or net realizable value. |
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. Estimated PP&E Lives Useful Lives (years) Land improvements 10 Buildings and improvements 5 to 40 Machinery and equipment 3 to 10 Furniture and fixtures 3 to 7 Software 3 to 10 |
Reviewing Long-Lived Assets for Potential Impairment | Reviewing Long-Lived Assets for Potential Impairment ASC 360 (Property, Plant and Equipment) requires the Company to test long-lived assets (PP&E and definite 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 long-lived assets during the three and six months ended April 2, 2021 and March 27, 2020. |
Legal Contingencies | Legal Contingencies When legal proceedings are brought or claims are made against the Company and the outcome is uncertain, ASC 450 (Contingencies) requires the Company to 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. |
Legal Expense 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. |
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. |
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 and borrowings. IEC believes that recorded value approximates fair value for all cash, accounts receivable, accounts payable, accrued liabilities and borrowings. 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 the three and six months ended April 2, 2021 and March 27, 2020. |
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 the purchase of Company common stock at a discounted stock purchase price. |
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 tax 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 the 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 incurred is reported as interest expense. Any penalties incurred are reported as tax expense. The Company’s income tax filings are subject to audit by various tax jurisdictions and current open years are the fiscal year ended September 30, 2016 through fiscal year ended September 30, 2019. |
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. Furthermore, the Company’s Sixth Amended and Restated Credit Facility Agreement with M&T Bank includes certain restrictions on paying cash dividends, as more fully described in Note 6—Credit Facilities. |
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. Significant items subject to such estimates include: excess and obsolete inventory reserve, warranty reserves, the valuation of deferred income tax assets and revenue recognition related to the accounts for over time contracts. 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 (loss)/income. |
Segments | Segments The Company’s results of operations for the three and six months ended April 2, 2021 and March 27, 2020 represent a single operating and reporting segment, referred to as contract manufacturing within the EMS industry. The Company strategically directs production between its various manufacturing facilities based on a number of considerations to best meet its customers’ requirements. The Company shares resources between its facilities for sales, marketing, engineering, supply chain, information services, human resources, payroll and corporate accounting functions. Consolidated financial information is evaluated regularly by the chief operating decision maker in assessing performance and allocating resources. The Company’s operations as a whole reflect the level at which the business is managed and how the Company’s chief operating decision maker assesses performance internally. |
Leases | Leases At contract inception, the Company determines if the new contractual arrangement is a lease or contains a leasing arrangement. If a contract contains a lease, the Company evaluates whether it should be classified as an operating lease or a finance lease. Upon modification of the contract, the Company will reassess to determine if a contract is or contains a leasing arrangement. The Company records lease liabilities based on the future estimated cash payments discounted over the lease term, defined as the non-cancellable time period of the lease, together with all the following: ● Periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option; and ● Periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. Leases may also include options to terminate the arrangement or options to purchase the underlying lease property. Lease components provide the Company with the right to use an identified asset, which consist of real estate properties and equipment. Non-lease components consist primarily of maintenance services. As an implicit discount rate is not readily available in the Company’s lease agreements, the Company uses its estimated secured incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future lease payments. For certain leases with original terms of twelve months or less, the Company recognizes lease expense as incurred and does not recognize any lease liabilities. Short-term and long-term portions of operating lease liabilities are classified as other current liabilities and other long-term liabilities, respectively. A right-of-use (“ROU”) asset is measured as the amount of the lease liability with adjustments, if applicable, for lease prepayments made prior to or at lease commencement, initial direct costs incurred by the Company to implement the lease and lease incentives. ROU assets are classified as other long-term assets, on the Company’s condensed consolidated balance sheets. The Company evaluates the carrying value of ROU assets if there are indicators of potential impairment and performs the analysis concurrent with the review of the recoverability of the related asset group. If the carrying value of the asset group is determined to not be fully recoverable and is in excess of its estimated fair value, the Company will record the impairment loss in its condensed consolidated statements of operations. The Company did not recognize an impairment loss during the three and six months ended April 2, 2021 and March 27, 2020. Fixed lease expense payments are recognized on a straight-line basis over the lease term. Variable lease payments vary because of changes in facts or circumstances occurring after the commencement date, other than the passage of time, and are often due to changes in an external market rate or the value of an index (e.g. Consumer Price Index). The Company did not incur variable lease payments during the three and six months ended April 2, 2021 and March 27, 2020. |
Recently Issued Accounting Updates | Recently Issued Accounting Updates In March 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848)—Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides optional guidance for a limited time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this standard apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. The amendments in this standard are elective and are effective upon issuance for all entities. The Company is evaluating the expedients and exceptions provided by the amendments in this standard to determine their impact on the Company’s condensed consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which amends the existing guidance relating to the accounting for income taxes. This ASU is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles of accounting for income taxes and to improve the consistent application of GAAP for other areas of accounting for income taxes by clarifying and amending existing guidance. This ASU is effective for fiscal years beginning after December 15, 2021, with early adoption permitted. The Company is evaluating the effect of adopting this new accounting guidance but does not expect adoption will have a material impact on the Company’s condensed consolidated financial statements. |
Net (Loss)/Income Per Share | The Company applies the two-class method to calculate and present net (loss)/income per share. Certain of the Company’s restricted (non-vested) share awards contain non-forfeitable rights to dividends and are considered participating securities for purposes of computing net (loss)/income per share pursuant to the two-class method. Under the two-class method, net earnings are reduced by the amount of dividends declared (whether paid or unpaid) and the remaining undistributed earnings are then allocated to common stock and participating securities, based on their respective rights to receive dividends. As the Company incurred a net loss for the three months ended April 2, 2021, and losses are not allocated to participating securities under the two-class method, such method is not applicable for the aforementioned interim reporting period. 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 unvested restricted stock and restricted stock units. Options, restricted stock and restricted stock units are primarily held by directors, officers and certain employees. |
OUR BUSINESS AND SUMMARY OF S_3
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Apr. 02, 2021 | |
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of property plant and equipment useful lives | Depreciable lives generally used for PP&E are presented in the table below. Leasehold improvements are amortized over the shorter of the lease term or estimated useful life of the improvement. Estimated PP&E Lives Useful Lives (years) Land improvements 10 Buildings and improvements 5 to 40 Machinery and equipment 3 to 10 Furniture and fixtures 3 to 7 Software 3 to 10 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 6 Months Ended |
Apr. 02, 2021 | |
REVENUE RECOGNITION | |
Schedule of Net Sales from Contracts with Customers by Market Sector | The table below shows net sales from contracts with customers by market sector. See additional information regarding market sectors in Note 10—Market Sectors and Major Customers. Three Months Ended April 2, 2021 March 27, 2020 Point in Time Over Time Net Sales Point in Time Over Time Net Sales (in thousands) Aerospace & Defense $ 11,695 $ 20,057 $ 31,752 $ 12,336 $ 14,167 $ 26,503 Medical 5,924 2,694 8,618 3,151 7,450 10,601 Industrial 4,488 502 4,990 5,430 1,637 7,067 $ 22,107 $ 23,253 $ 45,360 $ 20,917 $ 23,254 $ 44,171 Six Months Ended April 2, 2021 March 27, 2020 Point in Time Over Time Net Sales Point in Time Over Time Net Sales (in thousands) Aerospace & Defense $ 25,373 $ 35,902 $ 61,275 $ 26,792 $ 27,440 $ 54,232 Medical 10,704 9,721 20,425 6,901 14,436 21,337 Industrial 9,736 1,405 11,141 10,628 2,708 13,336 $ 45,813 $ 47,028 $ 92,841 $ 44,321 $ 44,584 $ 88,905 |
Schedule of Changes in Customer Deposits Due to the Adoption of Topic 606 | Customer deposits are recorded when cash payments are received or due in advance of revenue recognition from contracts with customers. The timing of revenue recognition may differ from the timing of billings to customers. The changes in customer deposits from the Company’s custom manufacturing services are as follows: Six Months Ended April 2, March 27, 2021 2020 (in thousands) Beginning balance $ 19,783 $ 13,229 Recognition of deferred revenue (12,008) (8,573) Deferral of revenue 20,004 11,146 Ending balance $ 27,779 $ 15,802 |
ALLOWANCE FOR DOUBTFUL ACCOUN_2
ALLOWANCE FOR DOUBTFUL ACCOUNTS (Tables) | 6 Months Ended |
Apr. 02, 2021 | |
ALLOWANCE FOR DOUBTFUL ACCOUNTS | |
Schedule of Activity in the Allowance for Doubtful Accounts | A summary follows of activity in the allowance for doubtful accounts during the six months ended April 2, 2021 and March 27, 2020: Six Months Ended April 2, March 27, Allowance for doubtful accounts 2021 2020 (in thousands) Allowance, beginning of period $ 185 $ 71 (Decrease)/increase in provision for doubtful accounts (38) 48 Write-offs (3) — Allowance, end of period $ 144 $ 119 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Apr. 02, 2021 | |
INVENTORIES | |
Schedule of Inventory | A summary of inventory by category at period end follows: April 2, September 30, Inventories 2021 2020 (in thousands) Raw materials $ 39,122 $ 32,904 Work-in-process 11,180 15,009 Finished goods 3,773 3,461 Total inventories $ 54,075 $ 51,374 |
PROPERTY, PLANT & EQUIPMENT (Ta
PROPERTY, PLANT & EQUIPMENT (Tables) | 6 Months Ended |
Apr. 02, 2021 | |
PROPERTY, PLANT & EQUIPMENT, NET | |
Schedule of Property, Plant and Equipment and Accumulated Depreciation | April 2, September 30, Property, Plant and Equipment 2021 2020 (in thousands) Land and improvements $ 788 $ 788 Buildings and improvements 28,194 7,430 Buildings under finance lease 7,750 7,750 Machinery and equipment 35,845 34,095 Furniture and fixtures 8,795 8,113 Software 5,215 5,215 Construction in progress 11,570 6,079 Total property, plant and equipment, at cost 98,157 69,470 Accumulated depreciation (48,242) (45,883) Property, plant and equipment, net $ 49,915 $ 23,587 |
Schedule of depreciation expense | Three Months Ended Six Months Ended April 2, March 27, April 2, March 27, Depreciation Expense 2021 2020 2021 2020 (in thousands) Depreciation expense $ 1,256 $ 795 $ 2,359 $ 1,552 |
CREDIT FACILITIES (Tables)
CREDIT FACILITIES (Tables) | 6 Months Ended |
Apr. 02, 2021 | |
CREDIT FACILITIES | |
Summary of borrowings | A summary of borrowings at period end follows: Fixed/ April 2, 2021 September 30, 2020 Variable Maturity Interest Interest Credit Facility Debt Rate Date Balance Rate Balance Rate (in thousands) M&T Bank credit facilities: Revolving Credit Facility v 6/4/2023 $ 28,377 2.75 % $ 19,960 2.75 % Master Lease v 6/4/2023 2,543 3.00 1,782 3.00 Jetview Term Loan v 3/1/2026 3,698 2.78 — — Total debt, gross 34,618 21,742 Unamortized debt issuance costs (310) (266) Total debt, net 34,308 21,476 Less: current portion (248) — Long-term debt $ 34,060 $ 21,476 |
Schedule of Maturities of IEC's Borrowings | Contractual Principal Debt Repayment Schedule Payments (in thousands) Twelve months ending fiscal second quarter 2022 248 2023 2,791 2024 28,624 2025 (1) 248 2026 and thereafter 2,707 $ 34,618 (1) |
WARRANTY RESERVES (Tables)
WARRANTY RESERVES (Tables) | 6 Months Ended |
Apr. 02, 2021 | |
WARRANTY RESERVES | |
Schedule of Product Warranty Liability | A summary of additions to and charges against IEC’s warranty reserves during the period follows: Six Months Ended April 2, March 27, Warranty Reserve 2021 2020 (in thousands) Reserve, beginning of period $ 100 $ 165 Provision 248 27 Warranty costs (214) (50) Reserve, end of period $ 134 $ 142 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Apr. 02, 2021 | |
STOCK-BASED COMPENSATION | |
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 six months ended April 2, 2021 and March 27, 2020 follows. Six Months Ended April 2, March 27, Valuation of Options 2021 2020 Assumptions for Black-Scholes: Risk-free interest rate 0.41 % 0.51 % Expected term in years 5.5 5.5 Volatility 40 % 40 % Expected annual dividends none none Value of options granted: Number of options granted 40,000 30,000 Weighted average fair value per share $ 3.82 $ 2.68 Fair value of options granted (000s) $ 153 $ 80 |
Schedule of Stock Option Activity | A summary of stock option activity, together with other related data, follows: Six Months Ended April 2, 2021 March 27, 2020 Wgtd. Avg. Wgtd. Avg. Number Exercise Number Exercise Stock Options of Options Price of Options Price Outstanding, beginning of period 670,145 $ 4.67 743,145 $ 4.54 Granted 40,000 9.65 30,000 5.03 Exercised (14,000) 4.84 (26,000) 5.31 Forfeited (7,000) 3.74 (10,000) 3.58 Expired (3,000) 3.74 (5,000) 6.91 Outstanding, end of period 686,145 $ 4.97 732,145 $ 4.53 For options expected to vest Number expected to vest 678,145 $ 4.95 722,582 $ 4.51 Weighted average remaining contractual term, in years 5.0 3.3 Intrinsic value (000s) $ 4,499 $ 1,510 For exercisable options Number exercisable 504,020 $ 4.33 545,645 $ 4.16 Weighted average remaining contractual term, in years 4.2 1.9 Intrinsic value (000s) $ 3,656 $ 1,354 For non-exercisable options Expense not yet recognized (000s) $ 408 $ 357 Weighted average years to be recognized 2.8 3.1 For options exercised Intrinsic value (000s) $ 82 $ 75 |
Schedule of Restricted Stock Activity | A summary of restricted stock activity, together with related data, follows: Six Months Ended April 2, 2021 March 27, 2020 Wgtd. Avg. Wgtd. Avg. Number of Non- Grant Date Number of Non- Grant Date Restricted (Non-vested) Stock vested Shares Fair Value vested Shares Fair Value Outstanding, beginning of period 49,825 $ 5.32 82,707 $ 5.25 Granted 17,907 11.11 24,850 5.03 Vested (19,585) 4.59 (36,812) 4.43 Forfeited (1,000) 4.12 (13,250) 6.09 Outstanding, end of period 47,147 $ 7.85 57,495 $ 5.49 For non-vested shares Expense not yet recognized (000s) $ 329 $ 286 Weighted average remaining years for vesting 2.1 1.9 For shares vested Aggregate fair value on vesting dates (000s) $ 264 $ 260 |
Schedule of Restricted Stock Unit Activity | A summary of restricted stock unit activity, together with related data, follows: Six Months Ended April 2, 2021 March 27, 2020 Wgtd. Avg. Wgtd. Avg. Number of Non- Grant Date Number of Non- Grant Date Restricted Stock Units vested Units Fair Value vested Units Fair Value Outstanding, beginning of period 186,727 $ 6.56 153,186 $ 5.36 Granted 67,597 7.65 50,556 9.19 Vested (102,624) 4.28 (17,015) 3.58 Forfeited — — — — Outstanding, end of period 151,700 $ 8.58 186,727 $ 6.56 For non-vested shares Expense not yet recognized (000s) $ 878 $ 906 Weighted average remaining years for vesting 1.9 2.2 For shares vested Aggregate fair value on vesting dates (000s) $ 1,268 $ 86 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Apr. 02, 2021 | |
INCOME TAXES | |
Schedule of Components of Income Tax Expense (Benefit) | Three Months Ended Six Months Ended April 2, March 27, April 2, March 27, Income Taxes 2021 2020 2021 2020 (in thousands) (Benefit from)/provision for income taxes $ (372) $ 367 $ (144) $ 703 |
MARKET SECTORS AND MAJOR CUST_2
MARKET SECTORS AND MAJOR CUSTOMERS (Tables) | 6 Months Ended |
Apr. 02, 2021 | |
MARKET SECTORS AND MAJOR CUSTOMERS | |
Schedule of Sales by Market Sector | A summary of sales, according to the market sector within which IEC’s customers operate, follows: Three Months Ended Six Months Ended April 2, March 27, April 2, March 27, % of Sales by Sector 2021 2020 2021 2020 Aerospace & Defense 70 % 60 % 66 % 61 % Medical 19 % 24 % 22 % 24 % Industrial 11 % 16 % 12 % 15 % 100 % 100 % 100 % 100 % |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Apr. 02, 2021 | |
LEASES | |
Supplemental Balance Sheet Information Related to the Company's Leases | Supplemental balance sheet information related to the Company’s operating leases were as follows: April 2, September 30, Operating Leases 2021 2020 Weighted average remaining lease term for operating leases (in years) 3.3 3.8 Weighted average discount rate for operating leases 5.47 % 5.47 % Supplemental balance sheet information related to the Company’s finance leases were as follows: April 2, September 30, Finance Leases 2021 2020 Finance lease right-of-use assets, net of accumulated amortization (included in PP&E) (in thousands) $ 27,539 $ 6,329 Weighted average remaining lease term for finance leases (in years) 13.2 11.3 Weighted average discount rate for finance leases 3.57 % 4.83 % |
Components of Lease Expense and Supplemental Cash Flow Information | The components of lease expense, recorded in cost of sales, selling and administrative expenses and interest expense in the condensed consolidated statements of operations, during the three and six months ended April 2, 2021 and March 27, 2020 were as follows: Three Months Ended Six Months Ended April 2, March 27, April 2, March 27, Lease Expense Classification 2021 2020 2021 2020 (in thousands) Operating lease expense Fixed payment operating lease expense (1) Cost of sales $ 79 $ 68 $ 130 $ 93 Fixed payment operating lease expense Selling and administrative expenses 6 15 19 29 Variable payment operating lease expense — — — — Finance lease expense Depreciation of ROU assets Cost of sales 497 144 827 273 Depreciation of ROU assets Selling and administrative expenses 33 — 55 — Interest Interest expense 253 88 468 174 Total lease expense $ 868 $ 315 $ 1,499 $ 569 (1) Supplemental Cash Flow Information Supplemental cash flow information related to the Company’s leases during the three and six months ended April 2, 2021 and March 27, 2020 were as follows: Six Months Ended April 2, March 27, Supplemental Cash Flow 2021 2020 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Cash paid for operating lease ROU assets $ 36 $ 47 Interest paid on finance leases 468 174 Financing cash flows from finance leases — — Lease liabilities arising from obtaining ROU assets: Operating leases — 33 Finance leases $ 19,142 $ — |
Summary of Operating Lease Payments | A summary of operating lease payments for the next five years follows: Contractual Lease Operating Lease Payment Schedule Payments (in thousands) Twelve months ending fiscal second quarter 2022 $ 73 2023 72 2024 71 2025 19 2026 and thereafter — Total operating lease payments 235 Less: amounts representing interest (20) Total operating lease obligation $ 215 |
Summary of Finance Lease Payments | A summary of finance lease payments for the next five years follows: Contractual Lease Finance Lease Payment Schedule Payments (in thousands) Twelve months ending fiscal second quarter 2022 $ 2,452 2023 2,506 2024 2,562 2025 2,660 2026 and thereafter 24,985 Total finance lease payments 35,165 Less: amounts representing interest (7,404) Total finance lease obligation $ 27,761 |
NET (LOSS)_INCOME PER SHARE (Ta
NET (LOSS)/INCOME PER SHARE (Tables) | 6 Months Ended |
Apr. 02, 2021 | |
NET (LOSS)/INCOME PER SHARE | |
Schedule of Earnings Per Share, Basic and Diluted | A summary of shares used in the EPS calculations follows (in thousands except share and per share data): Three Months Ended Six Months Ended April 2, March 27, April 2, March 27, Net (Loss)/Income Per Share 2021 2020 2021 2020 (in thousands, except share and per share data) Basic net (loss)/income per share: Net (loss)/income $ (348) $ 1,523 $ 1,189 $ 2,712 Less: (Loss)/income attributable to non-vested shares (2) 8 5 15 Net (loss)/income available to common stockholders $ (346) $ 1,515 $ 1,184 $ 2,697 Weighted average common shares outstanding 10,583,581 10,393,461 10,553,991 10,379,846 Basic net (loss)/income per share $ (0.03) $ 0.15 $ 0.11 $ 0.26 Diluted net (loss)/income per share: Net (loss)/income $ (348) $ 1,523 $ 1,189 $ 2,712 Shares used in computing basic net (loss)/income per share 10,583,581 10,393,461 10,553,991 10,379,846 Dilutive effect of options and non-vested shares — 309,651 470,366 286,155 Shares used in computing diluted net (loss)/income per share 10,583,581 10,703,112 11,024,357 10,666,001 Diluted net (loss)/income per share $ (0.03) $ 0.14 $ 0.11 $ 0.25 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Three Months Ended Six Months Ended April 2, March 27, April 2, March 27, 2021 2020 2021 2020 Anti-dilutive shares excluded — — 9,325 — |
OUR BUSINESS AND SUMMARY OF S_4
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Apr. 02, 2021 | Mar. 27, 2020 | Apr. 02, 2021 | Mar. 27, 2020 | Sep. 30, 2020 | |
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Asset impairment charges | $ 0 | $ 0 | $ 0 | $ 0 | |
Bank Overdrafts | 0 | 0 | $ 0 | ||
Total operating lease obligation | $ 215 | $ 215 |
OUR BUSINESS AND SUMMARY OF S_5
OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Plant and Equipment (Details) | 6 Months Ended |
Apr. 02, 2021 | |
Land improvements | |
Estimated useful lives | 10 years |
Buildings and improvements | Minimum | |
Estimated useful lives | 5 years |
Buildings and improvements | Maximum | |
Estimated useful lives | 40 years |
Machinery and equipment | Minimum | |
Estimated useful lives | 3 years |
Machinery and equipment | Maximum | |
Estimated useful lives | 10 years |
Furniture and fixtures | Minimum | |
Estimated useful lives | 3 years |
Furniture and fixtures | Maximum | |
Estimated useful lives | 7 years |
Software | Minimum | |
Estimated useful lives | 3 years |
Software | Maximum | |
Estimated useful lives | 10 years |
REVENUE RECOGNITION - Narrative
REVENUE RECOGNITION - Narrative (Details) - Sales Revenue, Net | 3 Months Ended | 6 Months Ended | ||
Apr. 02, 2021 | Mar. 27, 2020 | Apr. 02, 2021 | Mar. 27, 2020 | |
Product Concentration Risk | Value-added support services revenue, including material management and repair work revenue | Maximum | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of sales revenue | 3.00% | 3.00% | 3.00% | 3.00% |
Geographic Concentration Risk | Outside of United States | Maximum | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of sales revenue | 2.00% | 2.00% | 2.00% | 2.00% |
Point in Time | Product Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of sales revenue | 48.70% | 47.40% | 49.30% | 49.90% |
Over Time | Product Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of sales revenue | 51.30% | 52.60% | 50.70% | 50.10% |
REVENUE RECOGNITION - Schedule
REVENUE RECOGNITION - Schedule of Net Sales from Contracts with Customers by Market Sector (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 02, 2021 | Mar. 27, 2020 | Apr. 02, 2021 | Mar. 27, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 45,360 | $ 44,171 | $ 92,841 | $ 88,905 |
Aerospace & Defense | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 31,752 | 26,503 | 61,275 | 54,232 |
Medical | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 8,618 | 10,601 | 20,425 | 21,337 |
Industrial | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 4,990 | 7,067 | 11,141 | 13,336 |
Point in Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 22,107 | 20,917 | 45,813 | 44,321 |
Point in Time | Aerospace & Defense | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 11,695 | 12,336 | 25,373 | 26,792 |
Point in Time | Medical | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 5,924 | 3,151 | 10,704 | 6,901 |
Point in Time | Industrial | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 4,488 | 5,430 | 9,736 | 10,628 |
Over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 23,253 | 23,254 | 47,028 | 44,584 |
Over Time | Aerospace & Defense | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 20,057 | 14,167 | 35,902 | 27,440 |
Over Time | Medical | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 2,694 | 7,450 | 9,721 | 14,436 |
Over Time | Industrial | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 502 | $ 1,637 | $ 1,405 | $ 2,708 |
REVENUE RECOGNITION - Customer
REVENUE RECOGNITION - Customer Deposits (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Apr. 02, 2021 | Mar. 27, 2020 | |
REVENUE RECOGNITION | ||
Beginning balance | $ 19,783 | $ 13,229 |
Recognition of deferred revenue | (12,008) | (8,573) |
Deferral of revenue | 20,004 | 11,146 |
Ending balance | $ 27,779 | $ 15,802 |
ALLOWANCE FOR DOUBTFUL ACCOUN_3
ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Apr. 02, 2021 | Mar. 27, 2020 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Allowance, beginning of period | $ 185 | $ 71 |
(Decrease)/increase in provision for doubtful accounts | (38) | 48 |
Write-offs | (3) | 0 |
Allowance, end of period | $ 144 | $ 119 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Apr. 02, 2021 | Sep. 30, 2020 |
INVENTORIES | ||
Raw materials | $ 39,122 | $ 32,904 |
Work-in-process | 11,180 | 15,009 |
Finished goods | 3,773 | 3,461 |
Total inventories | $ 54,075 | $ 51,374 |
PROPERTY, PLANT & EQUIPMENT - S
PROPERTY, PLANT & EQUIPMENT - Summary of Fixed Assets (Details) - USD ($) $ in Thousands | Apr. 02, 2021 | Sep. 30, 2020 |
PROPERTY, PLANT & EQUIPMENT, NET | ||
Land and improvements | $ 788 | $ 788 |
Buildings and improvements | 28,194 | 7,430 |
Buildings under finance lease | 7,750 | 7,750 |
Machinery and equipment | 35,845 | 34,095 |
Furniture and fixtures | 8,795 | 8,113 |
Software | 5,215 | 5,215 |
Construction in progress | 11,570 | 6,079 |
Total property, plant and equipment, at cost | 98,157 | 69,470 |
Accumulated depreciation | (48,242) | (45,883) |
Property, plant and equipment, net | $ 49,915 | $ 23,587 |
PROPERTY, PLANT & EQUIPMENT - L
PROPERTY, PLANT & EQUIPMENT - Leased Assets (Details) $ in Thousands | Apr. 02, 2021USD ($) | Nov. 30, 2020USD ($)ft² | Sep. 30, 2020USD ($) |
Lessee, Lease, Description [Line Items] | |||
Value of assets acquired under the lease | $ 7,750 | $ 7,750 | |
Value of property | 11,570 | $ 6,079 | |
Manufacturing Facility [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Area of the Property | ft² | 153,000 | ||
Lease term | 15 years | ||
Lease renewal term | 10 years | ||
Value of assets acquired under the lease | $ 19,100 | ||
Building [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Value of property | $ 4,800 |
PROPERTY, PLANT & EQUIPMENT - D
PROPERTY, PLANT & EQUIPMENT - Depreciation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 02, 2021 | Mar. 27, 2020 | Apr. 02, 2021 | Mar. 27, 2020 | |
PROPERTY, PLANT & EQUIPMENT, NET | ||||
Depreciation expense | $ 1,256 | $ 795 | $ 2,359 | $ 1,552 |
CREDIT FACILITIES - Summary of
CREDIT FACILITIES - Summary of Borrowings (Details) - USD ($) $ in Thousands | Mar. 01, 2021 | Apr. 02, 2021 | Sep. 30, 2020 |
Balance | $ 34,618 | $ 21,742 | |
Unamortized Debt Issuance Expense | (310) | (266) | |
Total debt, net | 34,308 | 21,476 | |
Less: current portion | (248) | 0 | |
Long-term debt | $ 34,060 | 21,476 | |
Master Lease | |||
Fixed/Variable Rate | Variable Interest Rate | ||
Maturity Date | Jun. 4, 2023 | ||
Balance | $ 2,543 | $ 1,782 | |
Interest Rate | 3.00% | 3.00% | |
Jetview Term Loan | |||
Fixed/Variable Rate | Variable Interest Rate | ||
Maturity Date | Mar. 1, 2026 | Mar. 1, 2026 | |
Balance | $ 3,698 | ||
Interest Rate | 2.78% | ||
Revolving Credit Facility | |||
Fixed/Variable Rate | Variable Interest Rate | ||
Maturity Date | Jun. 4, 2023 | ||
Balance | $ 28,377 | $ 19,960 | |
Interest Rate | 2.75% | 2.75% |
CREDIT FACILITIES - Narrative (
CREDIT FACILITIES - Narrative (Details) - USD ($) | Mar. 01, 2021 | Apr. 02, 2021 | Mar. 27, 2020 | Apr. 02, 2021 | Mar. 27, 2020 | Sep. 30, 2020 | Jun. 04, 2020 |
Revolving Credit Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum borrowing capacity | $ 45,000,000 | $ 45,000,000 | $ 45,000,000 | $ 45,000,000 | |||
Additional increase to borrowing capacity allowed | 55,000,000 | ||||||
Minimum incremental increase to borrowing capacity allowed | $ 5,000,000 | ||||||
Interest Rate | 2.75% | 2.75% | 2.75% | ||||
Maturity date | Jun. 4, 2023 | ||||||
Maximum borrowing capacity as percentage of eligible receivables | 85.00% | 85.00% | 85.00% | ||||
Maximum borrowing capacity as percentage of eligible investment grade accounts | 90.00% | 90.00% | 90.00% | ||||
Maximum borrowing capacity based on eligible inventories | $ 30,000,000 | $ 30,000,000 | $ 30,000,000 | ||||
Current borrowing capacity | 43,300,000 | 43,300,000 | 39,400,000 | ||||
Available capacity on credit facility | 15,000,000 | 15,000,000 | $ 19,400,000 | ||||
Average Revolver balances | $ 30,900,000 | $ 25,100,000 | |||||
Basis spread on variable rate | 1.75% | ||||||
Unused capacity, commitment fee percentage | 0.25% | ||||||
Unused capacity, commitment fee | $ 11,100 | $ 6,700 | $ 23,500 | $ 12,500 | |||
Commitment fee amount | $ 45,000,000 | ||||||
Minimum Fixed Charge Coverage Ratio | 1.10 | 1.10 | |||||
Revolving Credit Facility | Minimum | |||||||
Line of Credit Facility [Line Items] | |||||||
Unused capacity, commitment fee percentage | 0.25% | ||||||
Revolving Credit Facility | Maximum | |||||||
Line of Credit Facility [Line Items] | |||||||
Unused capacity, commitment fee percentage | 0.375% | ||||||
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) [Member] | Minimum | |||||||
Line of Credit Facility [Line Items] | |||||||
Interest Rate | 1.00% | ||||||
Master Lease | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum borrowing capacity | $ 10,000,000 | ||||||
Interest Rate | 3.00% | 3.00% | 3.00% | ||||
Renewal term | 12 months | ||||||
Maturity date | Jun. 4, 2023 | ||||||
Long-term line of credit | $ 2,500,000 | $ 2,500,000 | $ 1,800,000 | ||||
Jetview Term Loan | |||||||
Line of Credit Facility [Line Items] | |||||||
Interest Rate | 2.78% | 2.78% | |||||
Maturity date | Mar. 1, 2026 | Mar. 1, 2026 | |||||
Long-term line of credit | $ 3,700,000 | $ 3,700,000 | $ 3,700,000 | ||||
Periodic payment of principal | 20,700 | ||||||
Periodic balloon payment | 2,500,000 | ||||||
Current borrowing capacity | $ 3,700,000 | ||||||
Debt instrument term | 5 years | ||||||
Jetview Term Loan | London Interbank Offered Rate (LIBOR) [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 2.65% |
CREDIT FACILITIES - Long-term D
CREDIT FACILITIES - Long-term Debt Maturities (Details) - USD ($) $ in Thousands | Apr. 02, 2021 | Sep. 30, 2020 |
Debt Instrument [Line Items] | ||
2022 | $ 248 | |
2023 | 2,791 | |
2024 | 28,624 | |
2025 | 248 | |
2026 and thereafter | 2,707 | |
Total debt, net | 34,618 | $ 21,742 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
2025 | 28,400 | |
Total debt, net | $ 28,377 | $ 19,960 |
WARRANTY RESERVES (Details)
WARRANTY RESERVES (Details) - SEC Schedule, 12-09, Reserve, Warranty [Member] - USD ($) $ in Thousands | 6 Months Ended | |
Apr. 02, 2021 | Mar. 27, 2020 | |
Warranty Reserve | ||
Reserve, beginning of period | $ 100 | $ 165 |
Provision | 248 | 27 |
Warranty costs | (214) | (50) |
Reserve, end of period | $ 134 | $ 142 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 02, 2021 | Mar. 27, 2020 | Apr. 02, 2021 | Mar. 27, 2020 | |
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] | ||||
Shares available for issuance (in shares) | 507,829 | 507,829 | ||
2019 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Maximum number of common shares that may be issued (in shares) | 840,360 | 840,360 | ||
Common shares, issuance term | 10 years | |||
2010 and 2019 Plans [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | $ 0.2 | $ 0.2 | $ 0.5 | $ 0.3 |
2010 and 2019 Plans [Member] | Employee Stock Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award expiration period | 7 years | |||
ESPP [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Maximum number of common shares that may be issued (in shares) | 150,000 | 150,000 | ||
Common shares, issuance term | 10 years | |||
Shares available for issuance (in shares) | 64,294 | 64,294 |
STOCK-BASED COMPENSATION - Valu
STOCK-BASED COMPENSATION - Valuation Assumptions (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |
Apr. 02, 2021 | Mar. 27, 2020 | |
Assumptions for Black-Scholes: | ||
Risk-free interest rate | 0.41% | 0.51% |
Expected term in years | 5.5 | 5.5 |
Volatility | 40.00% | 40.00% |
Expected annual dividends | $ 0 | $ 0 |
Value of options granted: | ||
Number of options granted (in shares) | 40,000 | 30,000 |
Weighted average fair value per share (in dollars per share) | $ 3.82 | $ 2.68 |
Fair value of options granted (000s) | $ 153 | $ 80 |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |
Apr. 02, 2021 | Mar. 27, 2020 | |
Number of Options | ||
Outstanding, beginning of period (in shares) | 670,145 | 743,145 |
Granted (in shares) | 40,000 | 30,000 |
Exercised (in shares) | (14,000) | (26,000) |
Forfeited (in shares) | (7,000) | (10,000) |
Expired (in shares) | (3,000) | (5,000) |
Outstanding, end of period (in shares) | 686,145 | 732,145 |
Wgtd. Avg. Exercise Price | ||
Outstanding, beginning of period (in dollars per share) | $ 4.67 | $ 4.54 |
Granted (in dollars per share) | 9.65 | 5.03 |
Exercised (in dollars per share) | 4.84 | 5.31 |
Forfeited (in dollars per share) | 3.74 | 3.58 |
Expired (in dollars per share) | 3.74 | 6.91 |
Outstanding, end of period (in dollars per share) | $ 4.97 | $ 4.53 |
For options expected to vest | ||
Number expected to vest (in shares) | 678,145 | 722,582 |
Number expected to vest (in dollars per share) | $ 4.95 | $ 4.51 |
Weighted average remaining term, in years | 5 years | 3 years 3 months 18 days |
Intrinsic value (000s) | $ 4,499 | $ 1,510 |
For exercisable options | ||
Number exercisable (in shares) | 504,020 | 545,645 |
Number exercisable (in dollars per share) | $ 4.33 | $ 4.16 |
Weighted average remaining term, in years | 4 years 2 months 12 days | 1 year 10 months 24 days |
Intrinsic value (000s) | $ 3,656 | $ 1,354 |
For non-exercisable options | ||
Expense not yet recognized (000s) | $ 408 | $ 357 |
Weighted average years to be recognized | 2 years 9 months 18 days | 3 years 1 month 6 days |
For options exercised | ||
Intrinsic value (000s) | $ 82 | $ 75 |
STOCK-BASED COMPENSATION - Su_2
STOCK-BASED COMPENSATION - Summary of Restricted Stock Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |
Apr. 02, 2021 | Mar. 27, 2020 | |
Number of Non-vested Shares [Roll Forward] | ||
Vested (in shares) | (19,585) | |
Wgtd. Avg. Grant Date Fair Value [Roll Forward] | ||
Granted (in dollars per share) | $ 11.11 | |
Restricted Stock [Member] | ||
Number of Non-vested Shares [Roll Forward] | ||
Outstanding, beginning of period (in shares) | 49,825 | 82,707 |
Granted (in shares) | 17,907 | 24,850 |
Vested (in shares) | (36,812) | |
Forfeited (in shares) | (1,000) | (13,250) |
Outstanding, end of period (in shares) | 47,147 | 57,495 |
Wgtd. Avg. Grant Date Fair Value [Roll Forward] | ||
Outstanding, beginning of period (in dollars per share) | $ 5.32 | $ 5.25 |
Granted (in dollars per share) | 5.03 | |
Vested (in dollars per share) | 4.59 | 4.43 |
Forfeited (in dollars per share) | 4.12 | 6.09 |
Outstanding, end of period (in dollars per share) | $ 7.85 | $ 5.49 |
For non-vested shares | ||
Expense not yet recognized (000s) | $ 329 | $ 286 |
Weighted average remaining years for vesting | 2 years 1 month 6 days | 1 year 10 months 24 days |
For shares vested | ||
Aggregate fair value on vesting dates (000s) | $ 264 | $ 260 |
Restricted Stock [Member] | Minimum | ||
Award vesting period | 4 years | |
Restricted Stock [Member] | Maximum | ||
Award vesting period | 5 years | |
Director [Member] | Restricted Stock [Member] | ||
Award vesting period | 3 years |
STOCK-BASED COMPENSATION STOCK-
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - Schedule of Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |
Apr. 02, 2021 | Mar. 27, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in dollars per share) | $ 11.11 | |
Vested (in shares) | (19,585) | |
Restricted Stock Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding, beginning of period (in shares) | 186,727 | 153,186 |
Outstanding, beginning of period (in dollars per share) | $ 6.56 | $ 5.36 |
Granted (in shares) | 67,597 | 50,556 |
Granted (in dollars per share) | $ 7.65 | $ 9.19 |
Vested (in shares) | (102,624) | (17,015) |
Vested (in dollars per share) | $ 4.28 | $ 3.58 |
Forfeited (in shares) | 0 | |
Forfeited (in dollars per share) | $ 0 | $ 0 |
Outstanding, end of period (in shares) | 151,700 | 186,727 |
Outstanding, end of period (in dollars per share) | $ 8.58 | $ 6.56 |
For non-vested shares | ||
Expense not yet recognized (000s) | $ 878 | $ 906 |
Weighted average remaining years for vesting | 1 year 10 months 24 days | 2 years 2 months 12 days |
For shares vested | ||
Aggregate fair value on vesting dates (000s) | $ 1,268 | $ 86 |
INCOME TAXES - Tax Provision_Be
INCOME TAXES - Tax Provision/Benefit (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 02, 2021 | Mar. 27, 2020 | Apr. 02, 2021 | Mar. 27, 2020 | |
INCOME TAXES | ||||
(Benefit from)/provision for income taxes | $ (372) | $ 367 | $ (144) | $ 703 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) | 3 Months Ended | 6 Months Ended |
Apr. 02, 2021 | Apr. 02, 2021 | |
INCOME TAXES | ||
Federal tax rate | 21.00% | 21.00% |
State tax rate | 1.58% | 1.58% |
MARKET SECTORS AND MAJOR CUST_3
MARKET SECTORS AND MAJOR CUSTOMERS - Summary of Sales (Details) - Sales Revenue, Segment [Member] | 3 Months Ended | 6 Months Ended | ||
Apr. 02, 2021 | Mar. 27, 2020 | Apr. 02, 2021 | Mar. 27, 2020 | |
Concentration Risk [Line Items] | ||||
Percentage of sales revenue | 100.00% | 100.00% | 100.00% | 100.00% |
Aerospace & Defense | ||||
Concentration Risk [Line Items] | ||||
Percentage of sales revenue | 70.00% | 60.00% | 66.00% | 61.00% |
Medical | ||||
Concentration Risk [Line Items] | ||||
Percentage of sales revenue | 19.00% | 24.00% | 22.00% | 24.00% |
Industrial | ||||
Concentration Risk [Line Items] | ||||
Percentage of sales revenue | 11.00% | 16.00% | 12.00% | 15.00% |
MARKET SECTORS AND MAJOR CUST_4
MARKET SECTORS AND MAJOR CUSTOMERS - Narrative (Details) - customer | 3 Months Ended | 6 Months Ended | ||
Apr. 02, 2021 | Mar. 27, 2020 | Apr. 02, 2021 | Mar. 27, 2020 | |
Concentration Risk [Line Items] | ||||
Concentration risk, number of customers | 4 | 4 | 4 | 3 |
Customer Concentration Risk [Member] | Sales [Member] | Aerospace & Defense | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, number of customers | 4 | 3 | 3 | 2 |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, number of customers | 2 | 2 | ||
Concentration risk, percentage | 34.00% | 30.00% | ||
Customer Number One [Member] | Customer Concentration Risk [Member] | Sales [Member] | Aerospace & Defense | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 24.00% | 25.00% | 24.00% | 26.00% |
Customer Number Two [Member] | Customer Concentration Risk [Member] | Sales [Member] | Aerospace & Defense | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 17.00% | 12.00% | 13.00% | 11.00% |
Customer Number Three [Member] | Customer Concentration Risk [Member] | Sales [Member] | Aerospace & Defense | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 12.00% | 11.00% | 10.00% | |
Customer Number Three [Member] | Customer Concentration Risk [Member] | Sales [Member] | Medical | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 16.00% | |||
Customer Number Four [Member] | Customer Concentration Risk [Member] | Sales [Member] | Aerospace & Defense | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 10.00% | |||
Customer Number Four [Member] | Customer Concentration Risk [Member] | Sales [Member] | Medical | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 17.00% | 11.00% |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Thousands | Apr. 02, 2021 | Nov. 30, 2020 | Sep. 30, 2020 |
Lessee, Lease, Description [Line Items] | |||
Value of assets acquired under the lease | $ 7,750 | $ 7,750 | |
Manufacturing Facility [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Lease term | 15 years | ||
Lease renewal term | 10 years | ||
Value of assets acquired under the lease | $ 19,100 | ||
Leasehold Improvements [Member] | Master Lease | |||
Lessee, Lease, Description [Line Items] | |||
Value of assets acquired under the lease | $ 2,100 | ||
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease remaining lease term | 1 year | ||
Lessee, Finance Lease, Remaining Lease Term | 4 years | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease remaining lease term | 5 years | ||
Lessee, Finance Lease, Remaining Lease Term | 15 years |
LEASES - Supplemental Balance S
LEASES - Supplemental Balance Sheet Information Related To Operating Leases (Details) - USD ($) $ in Thousands | Apr. 02, 2021 | Sep. 30, 2020 |
LEASES | ||
Weighted average remaining lease term for operating leases (in years) | 3 years 3 months 18 days | 3 years 9 months 18 days |
Weighted average discount rate for operating leases (percent) | 5.47% | 5.47% |
Operating lease liabilities, current | $ 63 | $ 61 |
Long-term operating lease obligation | $ 152 | $ 184 |
LEASES - Supplemental Balance_2
LEASES - Supplemental Balance Sheet Information Related to Finance Leases (Details) - USD ($) $ in Thousands | Apr. 02, 2021 | Sep. 30, 2020 |
LEASES | ||
Finance lease right-of-use assets, net of accumulated amortization (included in PP&E) | $ 27,539 | $ 6,329 |
Weighted average remaining lease term for finance leases (in years) | 13 years 2 months 12 days | 11 years 3 months 18 days |
Weighted average discount rate for finance leases (percent) | 3.57% | 4.83% |
LEASES - Components of Operatin
LEASES - Components of Operating Lease Expense and Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 02, 2021 | Mar. 27, 2020 | Apr. 02, 2021 | Mar. 27, 2020 | |
Lessee, Lease, Description [Line Items] | ||||
Variable payment operating lease expense | $ 0 | $ 0 | $ 0 | $ 0 |
Interest | 253 | 88 | 468 | 174 |
Total lease expense | 868 | 315 | 1,499 | 569 |
Cash paid for operating lease ROU assets | 36 | 47 | ||
Interest paid on finance leases | 468 | 174 | ||
Financing cash flows from finance leases | 583 | 182 | ||
Lease liabilities arising from obtaining ROU assets: Operating leases | 33 | |||
Lease liabilities arising from obtaining ROU assets: Finance leases | 19,142 | |||
Cost of sales | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease expense | 79 | 68 | 130 | 93 |
Finance lease expense | 497 | 144 | 827 | 273 |
Selling and administrative expenses | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease expense | 6 | 15 | 19 | 29 |
Finance lease expense | $ 33 | $ 0 | $ 55 | $ 0 |
LEASES - Summary of Operating L
LEASES - Summary of Operating Lease Payments for Next Five Years (Details) $ in Thousands | Apr. 02, 2021USD ($) |
Twelve months ending first fiscal quarter | |
2022 | $ 73 |
2023 | 72 |
2024 | 71 |
2025 | 19 |
2026 and thereafter | 0 |
Total operating lease payments | 235 |
Less: amounts representing interest | (20) |
Total operating lease obligation | $ 215 |
LEASES - Summary of Finance Lea
LEASES - Summary of Finance Lease Payments for Next Five Years (Details) $ in Thousands | Apr. 02, 2021USD ($) |
Twelve months ending first fiscal quarter | |
2022 | $ 2,452 |
2023 | 2,506 |
2024 | 2,562 |
2025 | 2,660 |
2026 and thereafter | 24,985 |
Total finance lease payments | 35,165 |
Less: amounts representing interest | (7,404) |
Present value of minimum finance lease payment | $ 27,761 |
NET (LOSS)_INCOME PER SHARE - S
NET (LOSS)/INCOME PER SHARE - Summary of Shares Used in EPS Calculation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Apr. 02, 2021 | Jan. 01, 2021 | Mar. 27, 2020 | Dec. 27, 2019 | Apr. 02, 2021 | Mar. 27, 2020 | |
Basic net (loss)/income per share: | ||||||
Net (loss)/income | $ (348) | $ 1,537 | $ 1,523 | $ 1,189 | $ 1,189 | $ 2,712 |
Less: (Loss)/income attributable to non-vested shares | (2) | 8 | 5 | 15 | ||
Net (loss)/income available to common stockholders | $ (346) | $ 1,515 | $ 1,184 | $ 2,697 | ||
Basic (in shares) | 10,583,581 | 10,393,461 | 10,553,991 | 10,379,846 | ||
Basic net (loss)/income per share (in Dollars per share) | $ (0.03) | $ 0.15 | $ 0.11 | $ 0.26 | ||
Diluted net (loss)/income per share: | ||||||
Net (loss)/income | $ (348) | $ 1,537 | $ 1,523 | $ 1,189 | $ 1,189 | $ 2,712 |
Shares used in computing basic net (loss)/income per share | 10,583,581 | 10,393,461 | 10,553,991 | 10,379,846 | ||
Dilutive effect of options and non-vested shares | 309,651 | 470,366 | 286,155 | |||
Shares used in computing diluted net (loss)/income per share | 10,583,581 | 10,703,112 | 11,024,357 | 10,666,001 | ||
Diluted net (loss)/income per share (in Dollars per share) | $ (0.03) | $ 0.14 | $ 0.11 | $ 0.25 | ||
Anti-dilutive shares excluded (in shares) | 9,325 |