AskMuncher
3 years ago
$IEHC IEH Corp Provides Guidance Related to Changes in OTC Market and its Common Stock
Press Release | 09/24/2021
BROOKLYN, NY / ACCESSWIRE / September 24, 2021 / IEH Corporation (OTC PINK:IEHC). In response to shareholder inquiries, IEH Corporation confirmed today that on September 28 2021 trading in its stock will be in accordance with the OTC Pink Sheet No Information tier, as a result of the implementation of the SEC's rules changes to the OTC Market implemented through Amended Rule 15c2-11.
The effect of the change in the Rule will be that broker dealer firms will not be able to provide stock quotes for IEH's common stock. Transactions will be limited to the "Expert" market. Persons who hold IEH common stock or wish to purchase IEH common stock will have to contact their brokers directly in order to buy or sell shares.
Among other requirements, the Amended Rule requires listed companies to be current in their SEC filings or provide alternative information, including financial information and financial statements to the OTC. IEH Corporation has been delinquent in its SEC filings, and is unable at this time to provide the required level of information to the OTC but is working diligently to cure this delinquency.
"We have been aware of this Amended Rule, and had hoped to be caught up on our filings in time to enable an eventual reinstatement to our prior trading platforms on the OTC. Despite not making the deadline, we want our shareholders to know that we are extremely focused on getting current with our filings with the SEC" said David Offerman, IEH Corp President and CEO. "As previously noted, our inability to make our SEC filings has been driven by a reconciling of two disparate accounting systems, our legacy system and our new one. At the heart of the issue is how the two disparate systems itemize inventory categories; namely what is considered raw material, work-in-progress (WIP) and finished goods. It is intense, demanding work, requiring a blending of our old ERP system and the new one, as well as discriminating periodic inventory costing from perpetual inventory costing. As we have previously disclosed, we have engaged outside resources and focused internal resources to address these subjects appropriately so that we can keep moving forward. While it has taken much longer to resolve than previously anticipated, we are much closer to completion, and anticipate resolution before the end of the 2021 calendar year.
Despite these issues, I am happy to confirm previously provided revenue guidance of between 5% to 10% year over year which is fiscal 2021 over fiscal 2020. Our $2.1M PPP loan was fully forgiven, our balance sheet remains strong, and cash on hand is at an all-time high. Although revenues in the current Fiscal '22 will be lower due to the severe retraction in the commercial aviation sector due to COVID, recent upticks in air travel herald an earlier than expected recovery in that industry."
About IEH Corporation
For over 80 years and 4 generations of family-run management, IEH Corporation has designed, developed, and manufactured printed circuit board (PCB) connectors, custom interconnects and contacts for high performance applications. With its signature Hyperboloid technology, IEH supplies the most durable, reliable connectors for the most demanding environments. The company markets primarily to companies in defense, aerospace, space and industrial applications, in the United States, Canada, Europe, Southeast and Central Asia and the Mideast. The company was founded in 1941 and is based in Brooklyn, New York.
CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS
Certain statements contained in this report, and in related comments by the Company's management, include "forward-looking statements." Forward-looking statements include information concerning the Company's liquidity and its possible or assumed future results of operations, including descriptions of its business strategies. These statements often include words such as "believe," "expect," "project," "potential," "anticipate," "intend," "plan," "estimate," "seek," "will," "may," "would," "should," "could," "forecasts" or similar expressions. These statements are based on certain assumptions that the Company has made on its current expectations and projections about future events and trends in light of its experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate in these circumstances. The Company believes these judgments are reasonable, but you should understand that these statements are not guarantees of performance or results, and you should not place undue reliance on any forward-looking statements. The Company's actual results could differ materially from those expressed in the forward-looking statements due to a variety of important factors, both positive and negative, that may be revised or supplemented in subsequent reports on Forms 10-K, 10-Q and 8-K, as they will depend on many factors about which we are unsure, including many factors beyond our control. Among other items, such factors could include: any claims, investigations or proceedings arising as a result of the delinquency we have experienced in filing recent periodic reports under the Securities and Exchange Act of 1934, as amended, our ability to remediate the material weaknesses in our internal controls over financial reporting or our need to amend previously issued financial results for our fiscal quarters ended September 27, 2019 and December 31, 2019; changes in accounting principles, or their application or interpretation, and our ability to make accurate estimates and the assumptions underlying the estimates, which could have an effect on earnings; the continued impact of the coronavirus ("COVID-19") virus, including the measures to reduce its spread, and its effects on the economy and the business sectors for which we provide products and services; pricing pressures on our product caused by competition; the risk that our products will not gain market acceptance; increased levels of competition; changes in political, economic or regulatory conditions generally and in the markets in which we operate; our ability to protect intellectual property; our relationships with key customers; adverse conditions in the industries in which our customers operate; our ability to quickly and effectively respond to new technological developments; and our ability to attract and retain key employees. Additional information concerning these and other factors can be found in our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K for the year ended March 31, 2020. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements. Except as may be required by applicable law, we do not undertake or intend to update or revise our forward-looking statements, and we assume no obligation to update any forward-looking statements contained in this report as a result of new information or future events or developments. Thus, you should not assume that our silence over time means that actual events are bearing out as expressed or implied in such forward-looking statements. You should carefully review and consider the various disclosures we make in our reports filed with the Securities and Exchange Commission that attempt to advise interested parties of the risks, uncertainties and other factors that may affect our business.
Contact:
Dave Offerman
IEH Corporation
dave@iehcorp.com
718-492-4448
SOURCE: IEH Corporation
View source version on accesswire.com:
https://www.accesswire.com/665442/IEH-Corp-Provides-Guidance-Related-to-Changes-in-OTC-Market-and-its-Common-Stock
AskMuncher
3 years ago
$IEHC IEH Corporation Provides Update on Completion of Financial Statements and SEC Filings
Press Release | 06/24/2021
BROOKLYN, NY / ACCESSWIRE / June 24, 2021 / IEH Corporation (OTC PINK:IEHC). IEH Corporation announced today that it does not expect to file its Form 10-K for the fiscal year ended March 31 2021 on a timely basis, as previously anticipated. The report is due under the Securities and Exchange Act of 1934, as amended on June 29, 2021. Further, Quarterly Reports on Form 10-Q for the fiscal quarters ended June 30, 2020, September 31, 2020 and December 31, 2020 have not yet been completed.
Dave Offerman, President and CEO of IEH Corporation commented, "We are totally focused on getting current with our SEC filings, and have made great progress towards resolving the related inventory and ERP accounting system issues that have caused the delay in the filing with the Securities and Exchange Commission of our Exchange Act reports over the last year. Once these issues are resolved, we expect to complete the missing filings and once again be current in our reporting obligations. No one wants this fixed more than us, but we want to make sure we get it right.
Mr. Offerman continued, "Although we did expect to have this resolved to file our 10-K for the year ended March 31, 2021 on time, the sheer volume of data that we have to sort and filter in order to reconcile our legacy system with our new system has proven quite challenging. At the heart of the issue is how the two disparate systems itemize inventory categories; namely what is considered raw material, work-in-progress (WIP) and finished goods. It is intense, demanding work, requiring a blending of our old ERP system and the new one, as well as discriminating periodic inventory costing from perpetual inventory costing. We have engaged outside resources and focused internal resources to address these subjects appropriately so that we can keep moving forward.
Despite these issues, I am happy to confirm our revenue guidance of between 5% to 10% year over year which is fiscal 2021 over fiscal 2020. We have received notification that our $2.1M PPP loan has been fully forgiven, our balance sheet remains strong, and cash is at an all-time high. Although revenues in the current Fiscal '22 are expected to be lower due to the severe retraction in the commercial aviation sector due to COVID, recent upticks in air travel herald an earlier than expected recovery in that industry. It has been one of the more challenging periods in our 80-year history, and we appreciate the support and continued patience of our investors."
About IEH Corporation
For 80 years and 4 generations of family-run management, IEH Corporation has designed, developed, and manufactured printed circuit board (PCB) connectors, custom interconnects and contacts for high performance applications. With its signature Hyperboloid technology, IEH supplies the most durable, reliable connectors for the most demanding environments. The company markets primarily to companies in defense, aerospace, space and industrial applications, in the United States, Canada, Europe, Southeast and Central Asia and the Mideast. The company was founded in 1941 and is based in Brooklyn, New York.
CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS
Certain statements contained in this report, and in related comments by the Company's management, include "forward-looking statements." Forward-looking statements include information concerning the Company's liquidity and its possible or assumed future results of operations, including descriptions of its business strategies. These statements often include words such as "believe," "expect," "project," "potential," "anticipate," "intend," "plan," "estimate," "seek," "will," "may," "would," "should," "could," "forecasts" or similar expressions. These statements are based on certain assumptions that the Company has made on its current expectations and projections about future events and trends in light of its experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate in these circumstances. The Company believes these judgments are reasonable, but you should understand that these statements are not guarantees of performance or results, and you should not place undue reliance on any forward-looking statements. The Company's actual results could differ materially from those expressed in the forward-looking statements due to a variety of important factors, both positive and negative, that may be revised or supplemented in subsequent reports on Forms 10-K, 10-Q and 8-K, as they will depend on many factors about which we are unsure, including many factors beyond our control. Among other items, such factors could include: any claims, investigations or proceedings arising as a result of the delinquency we have experienced in filing recent periodic reports under the Securities and Exchange Act of 1934, as amended, our ability to remediate the material weaknesses in our internal controls over financial reporting or our need to amend previously issued financial results for our fiscal quarters ended September 27, 2019 and December 31, 2019; changes in accounting principles, or their application or interpretation, and our ability to make accurate estimates and the assumptions underlying the estimates, which could have an effect on earnings; the continued impact of the coronavirus ("COVID-19") virus, including the measures to reduce its spread, and its effects on the economy and the business sectors for which we provide products and services; pricing pressures on our product caused by competition; the risk that our products will not gain market acceptance; increased levels of competition; changes in political, economic or regulatory conditions generally and in the markets in which we operate; our ability to protect intellectual property; our relationships with key customers; adverse conditions in the industries in which our customers operate; our ability to quickly and effectively respond to new technological developments; and our ability to attract and retain key employees. Additional information concerning these and other factors can be found in our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K for the year ended March 31, 2020. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements. Except as may be required by applicable law, we do not undertake or intend to update or revise our forward-looking statements, and we assume no obligation to update any forward-looking statements contained in this report as a result of new information or future events or developments. Thus, you should not assume that our silence over time means that actual events are bearing out as expressed or implied in such forward-looking statements. You should carefully review and consider the various disclosures we make in our reports filed with the Securities and Exchange Commission that attempt to advise interested parties of the risks, uncertainties and other factors that may affect our business.
Contact:
Dave Offerman
IEH Corporation
dave@iehcorp.com
718-492-4448
SOURCE: IEH Corporation
View source version on accesswire.com:
https://www.accesswire.com/652985/IEH-Corporation-Provides-Update-on-Completion-of-Financial-Statements-and-SEC-Filings
10 bagger
13 years ago
IEHC..$3.96. latest 10 Q.. down earnings..
IEH CORPORATION
BALANCE SHEETS
As of September 24, 2010 and March 26, 2010
September 24, March 26,
2010 2010
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash $ 452,100 $ 320,006
Accounts receivable, less allowances for doubtful accounts of $11,562 at September 24, 2010 and March 26, 2010 1,718,625 1,520,364
Inventories (Note 3) 3,041,900 2,573,196
Excess payments to accounts receivable factor (Note 6) - 224,040
Prepaid expenses and other current assets (Note 4) 861,340 110,320
Total Current Assets 6,073,965 4,747,926
PROPERTY, PLANT AND EQUIPMENT, less accumulated depreciation and amortization of $7,159,552 at September 24, 2010 and $7,084,552 at March 26, 2010 (Note 5) 1,247,440 1,195,240
1,247,440 1,195,240
OTHER ASSETS:
Other assets 25,109 25,019
25,109 25,019
Total Assets $ 7,346,514 $ 5,968,185
The accompanying notes should be read in conjunction with the financial statements.
- 3 -
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Table of Contents
IEH CORPORATION
BALANCE SHEETS (Continued)
As of September 24, 2010 and March 26, 2010
September 24, March 26,
2010 2010
(Unaudited)
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts receivable financing (Note 6) $ 97,838 $ -
Accrued corporate income taxes 728,351 8,009
Accounts payable 435,287 389,013
Workers compensation insurance assessments-
current portion (Note 8) 47,638 39,285
Other current liabilities (Note 7) 365,733 432,188
Total Current Liabilities 1,674,847 869,495
LONG-TERM LIABILITIES:
Workers compensation insurance assessments- net of
current portion (Note 8) 141,209 174,365
Total Long-Term Liabilities 141,209 174,365
Total Liabilities 1,816,056 1,042,860
STOCKHOLDERS’ EQUITY:
Common stock, $.01 par value; 10,000,000 shares authorized;
2,303,468 shares issued and outstanding at September 24, 2010 and March 26, 2010 23,035 23,035
Capital in excess of par value 2,744,573 2,744,573
Retained earnings (Note 9) 2,762,850 2,157,717
Total Stockholders’ Equity 5,530,458 4,925,325
Total Liabilities and Stockholders’ Equity $ 7,346,514 $ 5,968,185
The accompanying notes should be read in conjunction with the financial statements.
- 4 -
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Table of Contents
IEH CORPORATION
STATEMENTS OF OPERATIONS
(Unaudited)
For the Six Months Ended September 24, 2010 and September 25, 2009
Six Months Ended Three Months Ended
Sept. 24, Sept. 25, Sept. 24, Sept. 25,
2010 2009 2010 2009
REVENUE, net sales $ 6,667,527 $ 5,864,724 $ 3,314,446 $ 2,987,024
COSTS AND EXPENSES
Cost of products sold 4,274,228 3,870,207 2,164,322 1,976,674
Selling, general and administrative 975,911 843,517 515,148 425,628
Interest expense 17,225 26,175 9,817 14,595
Depreciation 75,000 88,314 37,500 42,600
5,342,364 4,828,213 2,726,787 2,459,497
OPERATING INCOME 1,325,163 1,036,511 587,659 527,527
OTHER INCOME 312 122 148 32
INCOME BEFORE INCOME TAXES 1,325,475 1,036,633 587,807 527,559
PROVISION FOR INCOME TAXES 720,342 315,600 377,542 157,800
NET INCOME $ 605,133 $ 721,033 $ 210,265 $ 369,759
BASIC AND DILUTED EARNINGS PER SHARE (Note 2) $ .26 $ .31 $ .09 $ .16
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
(in thousands) 2,303 2,303 2,303 2,303
10 bagger
14 years ago
IEHC.. $4.15 Latest 10Q
As of June 25, 2010 and March 26, 2010
June 25, March 26,
2010 2010
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash $ 427,131 $ 320,006
Accounts receivable, less allowances for doubtful accounts of $11,562 at June 25, 2010 and March 26, 2010 1,805,394 1,520,364
Inventories (Note 3) 2,757,200 2,573,196
Excess payments to accounts receivable factor (Note 6) - 224,040
Prepaid expenses and other current assets (Note 4) 568,516 110,320
Total Current Assets 5,558,241 4,747,926
PROPERTY, PLANT AND EQUIPMENT, less accumulated
depreciation and amortization of $7,122,052 at June 25, 2010 and $7,084,552 at March 26, 2010 (Note 5) 1,217,985 1,195,240
1,217,985 1,195,240
OTHER ASSETS:
Other assets 25,059 25,019
25,059 25,019
Total Assets $ 6,801,285 $ 5,968,185
The accompanying notes should be read in conjunction with the financial statements.
- 3 -
--------------------------------------------------------------------------------
IEH CORPORATION
BALANCE SHEETS
As of June 25, 2010 and March 26, 2010
June 25, March 26,
2010 2010
(Unaudited)
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts receivable financing (Note 6) $ 26,054 $ -
Accrued corporate income taxes 350,809 8,009
Accounts payable 383,819 389,013
Workers compensation insurance assessments-
current portion (Note 8) 39,285 39,285
Other current liabilities (Note 7) 511,829 432,188
Total Current Liabilities 1,311,796 869,495
LONG-TERM LIABILITIES:
Workers compensation insurance assessments- net of
current portion (Note 8) 169,296 174,365
Total Long-Term Liabilities 169,296 174,365
Total Liabilities 1,481,092 1,042,860
STOCKHOLDERS’ EQUITY:
Common stock, $.01 par value; 10,000,000 shares authorized;
2,303,468 shares issued and outstanding at June 25, 2010 and March 26, 2010 23,035 23,035
Capital in excess of par value 2,744,573 2,744,573
Retained earnings (Note 9) 2,552,585 2,157,717
Total Stockholders’ Equity 5,320,193 4,925,325
Total Liabilities and Stockholders’ Equity $ 6,801,285 $ 5,968,185
The accompanying notes should be read in conjunction with the financial statements.
- 4 -
--------------------------------------------------------------------------------
IEH CORPORATION
STATEMENT OF OPERATIONS
(Unaudited)
For the Three Months Ended June 25, 2010 and June 26, 2009
Three Months Ended
June 25, June 26,
2010 2009
REVENUE, net sales $ 3,353,081 $ 2,877,700
COSTS AND EXPENSES
Cost of products sold 2,109,906 1,893,533
Selling, general and administrative 460,763 417,889
Interest expense 7,408 11,580
Depreciation 37,500 45,714
2,615,577 2,368,716
OPERATING INCOME 737,504 508,984
OTHER INCOME 164 90
INCOME BEFORE INCOME TAXES 737,668 509,074
PROVISION FOR INCOME TAXES (342,800 ) (157,800 )
NET INCOME $ 394,868 $ 351,274
BASIC AND DILUTED EARNINGS PER SHARE (Note 2) $ .17 $ .15
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING (in thousands) 2,303 2,303
The accompanying notes should be read in conjunction with the financial statements.
- 5 -
--------------------------------------------------------------------------------
IEH CORPORATION
STATEMENT OF CASH FLOWS
(Unaudited)
For the Three Months Ended June 25, 2010 and June 26, 2009
Three Months Ended
June 25, June 26,
2010 2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 394,868 $ 351,274
Adjustments to reconcile net income to net cash used in
operating activities:
Depreciation 37,500 45,714
Changes in assets and liabilities:
(Increase) in accounts receivable (285,030 ) (11,100 )
(Increase) in inventories (184,004 ) (119,497 )
Decrease in excess payments to accounts receivable factor 224,040 -
(Increase) in prepaid expenses and other current assets (458,196 ) (6,367 )
(Increase) in other assets (40 ) (25 )
(Decrease) in accounts payable (5,194 ) (34,020 )
Increase in other current liabilities 79,641 115,498
Increase in accrued corporate income taxes 342,800 71,184
(Decrease) in workers compensation assessment (5,069 ) (5,067 )
Total adjustments (253,552 ) 56,320
NET CASH PROVIDED BY OPERATING ACTIVITIES 141,316 407,594
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of fixed assets (60,245 ) (42,381 )
NET CASH USED BY INVESTING ACTIVITIES $ (60,245 ) $ (42,381 )
The accompanying notes should be read in conjunction with the financial statements.
- 6 -
--------------------------------------------------------------------------------
IEH CORPORATION
STATEMENT OF CASH FLOWS
(Unaudited)
For the Three Months Ended June 25, 2010 and June 26, 2009
Three Months Ended
June 25, June 26,
2010 2009
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Activity of accounts receivable financing $ 26,054 $ (308,132 )
NET CASH (USED) BY FINANCING ACTIVITIES 26,054 (308,132 )
INCREASE IN CASH 107,125 57,081
CASH, beginning of period 320,006 169,316
CASH, end of period $ 427,131 $ 226,397
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the three months for:
Interest $ 3,563 $ 11,580
Income Taxes $ 355,000 $ 42,000
The accompanying should be read in conjunction with the financial statements.
- 7 -
--------------------------------------------------------------------------------
IEH CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1- INTERIM RESULTS AND BASIS OF PRESENTATION:
The accompanying unaudited financial statements as of June 25, 2010 and June 26, 2009 and for the three months then ended have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q. In the opinion of management, the unaudited financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of June 25, 2010 and June 26, 2009 and the results of operations and cash flows for the three months then ended. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the three months ended June 25, 2010, are not necessarily indicative of the results to be expected for any subsequent quarter or the entire fiscal year. The balance sheet at March 26, 2010 has been derived from the audited financial statements at that date.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The Company believes, however, that the disclosures in this report are adequate to make the information presented not misleading in any material respect. The accompanying financial statements should be read in conjunction with the audited financial statements and notes thereto of IEH Corporation for the fiscal year ended March 26, 2010 included in the Company’s Annual Report on Form 10-K as filed with the SEC and the attached Management’s Discussion and Analysis of Financial Condition and Results of Operations.
10 bagger
14 years ago
IEHC.. $4.15.. Latest Filing..
14 TYPE OF REPORTING PERSON
LP
================================================================================
The following constitutes the Schedule 13D filed by the undersigned
(the "Schedule 13D").
ITEM 1 SECURITY AND ISSUER
Title of Class of Securities
Common Shares, par value $.01 per share
(the "Shares")
Name and Address of Issuer
IEH CORPORATION
(the "Company"or the "Issuer")
140 58th Street, Suite 8E, Brooklyn, New York 11220
ITEM 2 IDENTITY AND BACKGROUND
(a)This statement is filed by:
(i)Hummingbird Value Fund, L.P., a Delaware limited partnership
("Hummingbird Value"), with respect to the Shares directly and
beneficially owned by it;
(ii)Tarsier Nanocap Value Fund, L.P., a Delaware limited partnership
("Tarsier"), with respect to the Shares directly and beneficially owned by it;
(iii)Hummingbird Management, LLC, a Delaware limited liability company
("Hummingbird Management"), who serves as the investment manager of each of
Hummingbird Value and Tarsier;
(iv)Hummingbird Capital, LLC, a Delaware limited liability company
("Hummingbird Capital"), who serves a
s the general partner of each of
Hummingbird Value and Tarsier; and
(v)Paul D. Sonkin ("Mr. Sonkin"), who serves as the managing
member of each of Hummingbird Management and Hummingbird Capital and
as the investment manager to certain managed accounts (the "Managed Accounts");
Each of the foregoing is referred to as a "Reporting Person" and
collectively as the "Reporting Persons." Each of the Reporting
Persons is party to that certain Joint Filing Agreement, as further
described in Item 6. Accordingly, the Reporting Persons are hereby filing
a joint Schedule 13D.
(b)The address of the principal office of each of the Reporting
Persons is 145 East 57th Street, 8th Floor, New York, New York 10022.
(c)The principal business of each of Hummingbird Value and
Tarsier is serving as a private investment fund. The principal
business of Hummingbird Management is serving as the investment
manager of each of Hummingbird Value and Tarsier. The principal
business of Hummingbird Capital is serving as the general partner of each
of Hummingbird Value and Tarsier. The principal occupation of Mr. Sonkin is
serving as the managing member of each of Hummingbird
Management and Hummingbird
Capital and as the investment manager to the Managed Accounts.
(d)No Reporting Person has, during the last five years,
been convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors).
(e)No Reporting Person has, during the last five years,
been party to a civil proceeding of a judicial or administrative
body of competent jurisdiction and as a result of such proceeding was or is
subject to a judgment, decree or final order enjoining future violations of,
or prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
(f)Mr. Sonkin is a citizen of the United States of America.
ITEM 3 SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The Shares purchased by Hummingbird Value and Tarsier were purchased with
working capital (which may, at any given time, include margin loans made
by brokerage firms in the ordinary course of business) in open market
purchases, except as otherwise noted, as set forth in Schedule A,
which is incorporated by reference herein. The aggregate purchase
cost of the 231,589 Shares beneficially owned in the aggregate by
Hummingbird Value and Tarsier is approximately $77,582,
excluding brokerage commissions.
As of April 21, 2010, Mr. Sonkin has caused the Managed Accounts to
invest approximately $52,197 in the Shares of the Issuer using
working capital.
ITEM 4 PURPOSE OF TRANSACTION
The Reporting Persons purchased the Shares based on their belief
that the Shares, when purchased, were undervalued and represented an
attractive investment opportunity. Depending upon overall market
conditions, other investment opportunities available to the Reporting
Persons, and the availability of Shares at prices that would make
the purchase of additional Shares desirable, the Reporting Persons
may endeavor to increase their respective positions in the Issuer
through, among other things, the purchase of Shares on the open
market or in private transactions or otherwise, on such terms and
at such times as the Reporting Persons may deem advisable.
No Reporting Person has any present plan or proposal which
would relate to or result in any of the matters set forth in
subparagraphs (a) - (j) of Item 4 of Schedule 13D except as
set forth herein or such as would occur upon completion of any
of the actions discussed above. The Reporting Persons intend to
review their respective investments in the Issuer on a continuing
basis and engage in discussions with management, the Board of
Directors, shareholders and franchisees of the Issuer concerning
the business, operations and future plans of the Issuer. Depending
on various factors including, without limitation, the Issuer's
financial position and investment strategy, the price levels of the
Shares, conditions in the securities markets and general economic
and industry conditions, the Reporting Persons may in the future
take such actions with respect to their respective investments in
the Issuer as they deem appropriate including, without limitation,
communications with management and the Board of the Issuer,
engaging in discussions with third parties about the Issuer
and the Reporting Persons' investment, seeking Board
representation, making proposals to the Issuer concerning
changes to the capitalization, ownership structure or
operations of the Issuer, purchasing additional Shares,
selling some or all of their Shares, engaging in short
selling of or any hedging or similar transaction with
respect to the Shares or changing their intention with
respect to any and all matters referred to in Item 4.
ITEM 5 INTEREST IN SECURITIES OF THE ISSUER
(a)The aggregate percentage of Shares reported
owned by each person named herein is based upon 2,613,861
Shares outstanding as of December 25, 2009 which is the total number
of Shares outstanding as reported in the Issuer's quarterly report
on Form 10Q, filed with the Securities and Exchange
Commission on February 16, 2010.
As of the close of business on April 21, 2010, Hummingbird Value
directly owned 194,444 Shares, constituting approximately
8.44% of the Shares outstanding. As the investment
manager of Hummingbird Value, Hummingbird Management may
be deemed to beneficially own the 194,444 Shares owned
by Hummingbird Value, constituting approximately 8.44%
of the Shares outstanding. As the general partner of
Hummingbird Value, Hummingbird Capital may be deemed to
beneficially own the 194,444S hares owned by Hummingbird
Value, constituting approximately 8.44% of the Shares outstanding.
As of the close of business on April 21, 2010, Tarsier directly
owned 97,162 Shares, constituting approximately 4.22%
of the Shares outstanding. As the investment manager of
Tarsier, Hummingbird Management may be deemed to
beneficially own the 97,162 Shares owned by Tarsier,
constituting approximately 4.22% of the Shares outstanding.
As the general partner of Tarsier, Hummingbird Capital may
be deemed to beneficially own the 194,444 Shares owned by
Hummingbird Value, constituting approximately 8.44% of the
Shares outstanding.
Mr. Sonkin, as the managing member of each of Hummingbird
Management and Hummingbird Capital, who serve as the
investment manager and general partner, respectively,
of each of Hummingbird Value and Tarsier, may be deemed
to beneficially own the 304,422 Shares owned in the
aggregate by Hummingbird Value and Tarsier, constituting
approximately 13.22% of the Shares outstanding. Mr. Sonkin,
as the investment manager to the Managed Accounts, may be
deemed to beneficially own the 12,816 Shares owned by the
Managed Accounts, constituting approximately .56% of the
Shares outstanding.
(b)By virtue of his position with Hummingbird
Management and Hummingbird Capital, Mr. Sonkin has the
sole power to vote and dispose of the Shares beneficially
owned by Hummingbird Value and Tarsier. Mr. Sonkin has
sole power to vote and dispose of the Shares beneficially
owned by the Managed Accounts.
(c)Schedule A annexed hereto lists all transactions
in securities of the Issuer during the past sixty days by
the Reporting Persons. All of such transactions were
effected in the open market, unless indicated otherwise.
(d)No person other than the Reporting Persons is
known to have the right to receive, or the power to
direct the receipt of dividends from, or proceeds
from the sale of, the Shares, except for the clients
of Mr. Sonkin with respect to the Shares held in the Managed Accounts.
(e)Not applicable.
The filing of this Schedule 13D shall not be construed
as an admission that the Reporting Persons are, for purposes
of Section 13(d) of the Securities Exchange Act of 1934, as
amended, the beneficial owners of any of the Shares reported
herein. Each of the Reporting Persons specifically disclaims
beneficial ownership of the Shares reported herein that are
not directly owned by such Reporting Person, except to the
extent of its or his pecuniary interest therein.
ITEM 6 Inapplicable
ITEM 7 MATERIAL TO BE FILED AS EXHIBITS
Exhibit Exhibit
No. Description
--- ---------------------------------------------------------------
1 Joint Filing Agreement dated April 22, 2010 by and among
Hummingbird Management, LLC, Hummingbird Value Fund, L.P.,
The Tarsier Nanocap Value Fund LP, Hummingbird Capital, LLC,
and Paul Sonkin.
SIGNATURES
After reasonable inquiry and to the best of our knowledge and belief,
we certify that the information set forth in this statement is true, complete
and correct.
Dated: April 22, 2010 HUMMINGBIRD MANAGEMENT, LLC
By: /s/ Paul D. Sonkin
---------------------------------
Name: Paul D. Sonkin
Title: Managing Member
/s/ Paul D. Sonkin
-------------------------------------
PAUL D. SONKIN
HUMMINGBIRD VALUE FUND, L.P.
By: Hummingbird Capital, LLC
By: /s/ Paul D. Sonkin
---------------------------------
Name: Paul D. Sonkin
Title: Managing Member
The Tarsier Nanocap Value Fund, L.P.
By: Hummingbird Capital, LLC
By: /s/ Paul D. Sonkin
---------------------------------
Name: Paul D. Sonkin
Title: Managing Member
HUMMINGBIRD CAPITAL, LLC
By: /s/ Paul D. Sonkin
---------------------------------
Name: Paul D. Sonkin
Title: Managing Member
By: /s/ Paul D. Sonkin
---------------------------------
Name: Paul D. Sonkin
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(k)(1)(iii) under the Securities Exchange
Act of 1934, as amended, the persons named below agree to the joint filing on
behalf of each of them of a Statement
on Schedule 13D dated April 22, 2010,
(including amendments thereto) with respect to the Common Stock of
Meade Instrument Corp. This Joint Filing Agreement shall be filed as an Exhibit
to such Statement.
Dated: April 22, 2010 HUMMINGBIRD MANAGEMENT, LLC
By: /s/ Paul D. Sonkin
---------------------------------
Name: Paul D. Sonkin
Title: Managing Member
/s/ Paul D. Sonkin
-------------------------------------
PAUL D. SONKIN
HUMMINGBIRD VALUE FUND, L.P.
By: Hummingbird Capital, LLC
By: /s/ Paul D. Sonkin
---------------------------------
Name: Paul D. Sonkin
Title: Managing Member
The Tarsier Nanocap Value Fund, L.P.
By: Hummingbird Capital, LLC
By: /s/ Paul D. Sonkin
---------------------------------
Name: Paul D. Sonkin
Title: Managing Member
By: Hummingbird Capital, LLC
By: /s/ Paul D. Sonkin
---------------------------------
Name: Paul D. Sonkin
Title: Managing Member
HUMMINGBIRD CAPITAL, LLC
By: /s/ Paul D. Sonkin
---------------------------------
Name: Paul D. Sonkin
Title: Managing Member
By: /s/ Paul D. Sonkin
---------------------------------
Name: Paul D. Sonkin
10 bagger
14 years ago
IEHC.. $4.54
"The Company reported net income of $1,024,600 for the nine months ended December 25, 2009 representing basic earnings of $.45 per share as compared to net income of $760,881 or $.33 per share for the nine months ended December 26, 2008. The increase in net income for the current nine month period can be attributed primarily to the increased revenue recorded during the current nine months."
IEH CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)
Results of Operations
Comparative Analysis-Nine Months Ended December 25, 2009 and December 26, 2008
The following table sets forth for the periods indicated, percentages for certain items reflected in the financial data as such items bear to the revenues of the Company:
Relationship to Total Revenues
Dec. 25, Dec. 26,
2009 2008
Operating Revenues (in thousands) $ 8,952 $ 7,932
Operating Expenses: (as a percentage of Operating Revenues)
Costs of Products Sold 65.33 % 67.96 %
Selling, General and Administrative 14.73 % 14.44 %
Interest Expense .41 % .66 %
Depreciation and amortization 1.46 % 1.70 %
TOTAL COSTS AND EXPENSES 81.93 % 84.76 %
Operating Income (loss) 18.07 % 15.24 %
Other Income - .01 %
Income (loss) before Income Taxes 18.07 % 15.25 %
Income Taxes (6.63 %) 5.65 %
Net Income (loss) 11.44 % 9.60 %
Operating revenues for the nine months ended December 25, 2009 amounted to $8,951,957 reflecting a 12.86% increase versus the nine months ended December 26, 2008 revenues of $7,932,098. The sharp increase in revenues can be attributed to a dramatic increase in commercial aerospace spending, new customers in the medical device manufacturing sector as well as internal production efficiencies.
Cost of products sold amounted to $5,848,266. for the nine months ended December 25, 2009, or 65.33% of operating revenues. This reflected a $457,673 or 8.49% increase in the cost of products sold from $5,390,593 or 67.96% of operating revenues for the nine months ended December 26, 2008. The increase in cost of product sold is due primarily to costs necessary to support the increase in revenue.
IEH CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)
Comparative Analysis-Nine Months Ended December 25, 2009 and December 26, 2008
(continued)
Selling, general and administrative expenses were $1,318,628 or 14.73% of operating revenues for the nine months ended December 25, 2009 compared to $1,145,487 or 14.44% of operating revenues for the nine months ended December 26, 2008. This category of expenses increased by $173,141 or 15.12% from the prior year. The increase can be attributed to an increase in salaries to sales personnel, commissions and travel expenses.
Interest expense was $36,404 for the nine months ended December 25, 2009 or .41% of operating revenues.
For the fiscal nine months ended December 26, 2008, interest expense was $52,643 or .66% of operating revenues. The decrease of $16,239 or 30.85% reflects primarily management's commitment to apply revenues to reduce the Company's debt.
Depreciation and amortization of $130,914 or 1.46% of operating revenues was reported for the nine months ended December 25, 2009. This reflects a decrease of $4,126 from the comparable nine month period ended December 26, 2008 of $135,040 or 1.70% of operating revenues. The reduction in depreciation is the result of assets being written off during the nine months ended December 25, 2009.
The Company reported net income of $1,024,600 for the nine months ended December 25, 2009 representing basic earnings of $.45 per share as compared to net income of $760,881 or $.33 per share for the nine months ended December 26, 2008. The increase in net income for the current nine month period can be attributed primarily to the increased revenue recorded during the current nine months.
10 bagger
14 years ago
IEHC.. $4.35
IEH CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)
Comparative Analysis-Three Months Ended September 25, 2009 and September 26, 2008 (continued)
Selling, general and administrative expenses were $425,628 or 14.25% of operating revenues for the three months ended September 25, 2009 compared to $378,464 or 14.27% of operating revenues for the three months ended September 26, 2008. This category of expenses increased by $47,164 or 12.46% from the prior year. The increase can be attributed to an increase in salaries to sales personnel, commissions and travel.
Interest expense was $14,595 for the three months ended September 25, 2009 or .49% of operating revenues. For the fiscal three months ended September 26, 2008, interest expense was $17,277 or .65% of operating revenues. The decrease of $2,682 or 15.52% reflects primarily management's commitment to apply revenues to reduce the Company's debt.
Depreciation and amortization of $42,600 or 1.43% of operating revenues was reported for the three months ended September 25, 2009. This reflects a decrease of $1,680 or 3.79% from the prior three months ended September 26, 2008 of $44,280 or 1.67% of operating revenues.
The Company reported net income of $369,759 for the three months ended September 25, 2009 representing basic earnings of $.16 per share as compared to a net income of $287,694 or $.13 per share for the three months ended September 26, 2008. The increase in net income for the current three month period can be attributed primarily to the increased revenue recorded during the current quarter.
============================================
IEH CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)
Comparative Analysis-Three Months Ended June 26, 2009 and June 27, 2008
(continued)
Selling, general and administrative expenses were $417,889 or 14.5% of operating revenues for the three months ended June 26, 2009 compared to $366,830 or 14.2% of operating revenues for the three months ended June 27, 2008. This category of expense increased by $51,059 or 13.9% from the prior year. The increase can be attributed to an increase in salaries to sales personnel, commissions and travel expenses.
Interest expense was $11,580 for the three months ended June 26, 2009 or .4% of operating revenues. For the fiscal three months ended June 27, 2008, interest expense was $21,209 or .8% of operating revenues. The decrease of $9,629 or 45.4% reflects primarily management's commitment to apply revenues to reduce the Company's debt.
Depreciation and amortization of $45,714 or 1.6% of operating revenues was reported for the three months ended June 26, 2009. This reflects a decrease of $166 from the comparable three month period ended June 27, 2008 of $45,880 or 1.8% of operating revenues. The reduction in depreciation is the result of assets being written off prior to the three months ended June 26, 2009.
The Company reported net income of $351,274 for the three months ended June 26, 2009 representing basic earnings of $.15 per share as compared to net income of $415,220 or $.18 per share for the three months ended June 27, 2008. The decrease in net income for the current three month period can be attributed primarily to the increase in provision for corporate taxes.
10 bagger
14 years ago
IEHC.. $4.35
Operating revenues for the six months ended September 25, 2009 amounted to $5,864,724 reflecting a 12.13% increase versus the six months ended September 26, 2008 revenues of $5,230,328. The sharp increase in revenues can be attributed to a dramatic increase in commercial aerospace spending, new customers in the medical device manufacturing sector as well as internal production efficiencies.
9-Nov-2009
Quarterly Report
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Forward Looking Statements
This report contains forward looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended (the "1934 Act") and
Section 27A of the Securities Act of 1933 (the "1933 Act"). Statements contained in this report which are not statements of historical facts may be considered forward-looking information with respect to plans, projections, or future performance of the Company as defined under the Private Securities litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those projected. The words "anticipate", "believe", "estimate", "expect", "objective", and "think" or similar expressions used herein are intended to identify forward-looking statements. The forward-looking statements are based on the Company's current views and assumptions and involve risks and uncertainties that include, among other things, the effects of the Company's business, actions of competitors, changes in laws and regulations, including accounting standards, employee relations, customer demand, prices of purchased raw material and parts, domestic economic conditions, including housing starts and changes in consumer disposable income, and foreign economic conditions, including currency rate fluctuations. Some or all of the facts are beyond the Company's control.
Except as may be required by applicable law, we do not undertake or intend to update or revise our forward-looking statements, and we assume no obligation to update any forward-looking statements contained in this report as a result of new information or future events or developments. Thus, you should not assume that our silence over time means that actual events are bearing out as expressed or implied in such forward-looking statements. You should carefully review and consider the various disclosures we make in this report and our other reports filed with the SEC that attempt to advise interested parties of the risks, uncertainties and other factors that m ay affect our business. The following discussion and analysis should be read in conjunction with the financial statements and related footnotes which provide additional information concerning the Company's financial activities and condition.
Critical Accounting Policies
The Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which require the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the Financial Statements, and revenues and expenses during the periods reported. Actual results could differ from those estimates. The Company believes the following are the critical accounting policies, which could have the most significant effect on the Company's reported results and require the most difficult, subjective or complex judgments by management.
o Impairment of Long-Lived Assets:
The Company reviews its long-lived assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the expected cash flows, undiscounted and without interest, is less than the carrying amount of the asset, an impairment loss is recognized as the amount by which the carrying amount of the asset exceeds its fair value. The Company makes estimates of its future cash flows related to assets subject to impairment review.
o Inventory Valuation:
Raw materials and supplies are valued at the lower of first-in, first-out cost or market. Finished goods and work in process are valued at the lower of actual cost, determined on a specific identification basis, or market. The Company estimates which materials may be obsolete and which products in work in process or finished goods may be sold at less than cost, and adjusts their inventory value accordingly. Future periods could include either income or expense items if estimates change and for differences between the estimated.........
IEH CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)
Critical Accounting Policies (continued)
actual amount realized from the sale of inventory.
o Income Taxes:
The Company records a liability for potential tax assessments based on its estimate of the potential exposure. Due to the subjectivity and complex nature of the underlying issues, actual payments or assessments may differ from estimates. Income tax expense in future periods could be adjusted for the difference between actual payments and the Company's recorded liability based on its assessments and estimates.
o Revenue Recognition:
Revenues are recognized at the shipping date of the Company's products. The Company has historically adopted the shipping terms that title merchandise passes to the customer at the shipping point (FOB Shipping Point). At this juncture, title has passed, the Company has recognized the sale, inventory has been relieved, and the customer has been invoiced. The Company does not offer any discounts, credits or other sales incentives.
The Company's policy with respect to customer returns and allowances as well as product warranty is as follows:
The Company will accept a return of defective product within one year from shipment for repair or replacement at the Company's option. If the product is repairable, the Company at its own cost will repair and return it to the customer. If unrepairable, the Company will either offer an allowance against payment or will reimburse the customer for the total cost of the product.
Most of the Company's products are custom ordered by customers for a specific use. The Company provides engineering services as part of the relationship with its customers in developing the custom product. The Company is not obligated to provide such engineering service to its customers. The Company does not charge separately for these services.
o Research & Development:
The Company provides personalized engineering services to its customers by designing connectors for specific customer applications. The employment of electromechanical engineers is the anticipated cornerstone of the Company's future growth. The Company maintains a testing laboratory where its engineers experiment with new connector designs based on changes in technology and in an attempt to create innovative, more efficient connector designs.
IEH CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)
Results of Operations
Comparative Analysis-Six Months Ended September 25, 2009 and September 26, 2008
The following table sets forth for the periods indicated, percentages for certain items reflected in the financial data as such items bear to the revenues of the Company:
Relationship to Total Revenues
Sept. 25, Sept. 26,
2009 2008
------------ ----------
Operating Revenues (in thousands) $ 5,865 $ 5,230
Operating Expenses:
(as a percentage of Operating Revenues)
Costs of Products Sold 65.99% 69.05%
Selling, General and Administrative 14.38% 14.25%
Interest Expense .45% .74%
Depreciation and amortization 1.51% 1.72%
------------ ------------
TOTAL COSTS AND EXPENSES 82.33% 85.76%
------------ ------------
Operating Income (loss) 17.67% 14.24%
Other Income -- .01%
------------ ------------
Income (loss) before Income Taxes 17.67% 14.25%
Income Taxes (5.38%) (.80%)
------------ ------------
Net Income (loss) 12.29% 13.45%
============ ============
Operating revenues for the six months ended September 25, 2009 amounted to $5,864,724 reflecting a 12.13% increase versus the six months ended September 26, 2008 revenues of $5,230,328. The sharp increase in revenues can be attributed to a dramatic increase in commercial aerospace spending, new customers in the medical device manufacturing sector as well as internal production efficiencies.
Cost of products sold amounted to $3,870,207 for the six months ended September 25, 2009, or 65.99% of operating revenues. This reflected a $258,457 or 7.16% increase in the cost of products sold from $3,611,750 or 69.05% of operating revenues for the six months ended September 26, 2008. The increase in cost of product sold is due primarily to costs necessary to support the increase in revenue.
IEH CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)
Comparative Analysis-Six Months Ended September 25, 2009 and September 26, 2008
(continued)
Selling, general and administrative expenses were $843,517 or 14.38% of operating revenues for the six months ended September 25, 2009 compared to $745,294 or 14.25% of operating revenues for the six months ended September 26, 2008. This category of expenses increased by $98,223 or 13.18% from the prior year. The increase can be attributed to an increase in salaries to sales personnel, commissions and travel expenses.
Interest expense was $26,175 for the six months ended September 25, 2009 or .45% of operating revenues. For the fiscal six months ended September 26, 2008, interest expense was $38,486 or .74% of operating revenues. The decrease of $12,311 or 31.99% reflects primarily management's commitment to apply revenues to reduce the Company's debt.
Depreciation and amortization of $88,314 or 1.51% of operating revenues was reported for the six months ended September 25, 2009. This reflects a decrease of $1,846 from the comparable six month period ended September 26, 2008 of $90,160 or 1.72% of operating revenues. The reduction in depreciation is the result of assets being written off during the six months ended September 25, 2009.
The Company reported net income of $721,033 for the six months ended September 25, 2009 representing basic earnings of $.31 per share as compared to net income of $702,914 or $.31 per share for the six months ended September 26, 2008. The increase in net income for the current six month period can be attributed primarily to the increased revenue recorded during the current quarter.
IEH CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)
Comparative Analysis-Three Months Ended September 25, 2009 and September 26, 2008
The following table sets forth for the periods indicated, percentages for certain items reflected in the financial data as such items bear to the revenues of the Company:
Relationship to Total Revenues
Sept. 25, Sept. 26,
2009 2008
------------- -----------
Operating Revenues (in thousands) $ 2,987 $ 2,653
------------- ------------
Operating Expenses:
(as a percentage of Operating Revenues)
Costs of Products Sold 66.18% 71.90%
Selling, General and Administrative 14.25% 14.27%
Interest Expense .49% .65%
Depreciation and amortization 1.43% 1.67%
------------- -----------
TOTAL COSTS AND EXPENSES 82.35% 88.49%
------------- -----------
Operating Income (loss) 17.65% 11.51%
Other Income -- --
------------- -----------
Income (loss) before Income Taxes 17.65% 11.51%
Income Taxes ((5.29)%) (.68%)
------------- -----------
Net Income (loss) 12.36% 10.83%
============= ===========
Operating revenues for the three months ended September 25, 2009 amounted to $2,987,024 reflecting a 12.60% increase versus the three months ended September 26, 2008 revenues of $2,652,855. The increase in revenues is due to an increase in commercial sales orders including aerospace and medical devices as well as internal production efficiencies during the current quarter.
Cost of products sold amounted to $1,976,674 for the three months ended September 25, 2009, or 66.18% of operating revenues. This reflected a $69,315 or 3.63% increase in the cost of products sold from $1,907,359 or 71.90% of operating revenues for the three months ended September 26, 2008. The increase in product sold is due primarily to costs necessary to support the increase in revenues during the quarter.
IEH CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)
Comparative Analysis-Three Months Ended September 25, 2009 and September 26, 2008 (continued)
Selling, general and administrative expenses were $425,628 or 14.25% of operating revenues for the three months ended September 25, 2009 compared to $378,464 or 14.27% of operating revenues for the three months ended September 26, 2008. This category of expenses increased by $47,164 or 12.46% from the prior year. The increase can be attributed to an increase in salaries to sales personnel, commissions and travel.
Interest expense was $14,595 for the three months ended September 25, 2009 or .49% of operating revenues. For the fiscal three months ended September 26, 2008, interest expense was $17,277 or .65% of operating revenues. The decrease of $2,682 or 15.52% reflects primarily management's commitment to apply revenues to reduce the Company's debt.
Depreciation and amortization of $42,600 or 1.43% of operating revenues was reported for the three months ended September 25, 2009. This reflects a decrease of $1,680 or 3.79% from the prior three months ended September 26, 2008 of $44,280 or 1.67% of operating revenues.
The Company reported net income of $369,759 for the three months ended September 25, 2009 representing basic earnings of $.16 per share as compared to a net income of $287,694 or $.13 per share for the three months ended September 26, 2008. The increase in net income for the current three month period can be attributed primarily to the increased revenue recorded during the current quarter.
Liquidity and Capital Resources
The Company reported working capital of $3,388,105 as of September 25, 2009
compared to a working capital of $2,715,072 as of March 27, 2009. The increase
in working capital of $673,033 was attributable to the following items:
Net income $ 721,033
Depreciation and amortization 88,314
Capital expenditures (126,153)
Other transactions (10,161)
As a result of the above, the current ratio (current assets to current liabilities) was 3.97 to 1 at September 25, 2009 as compared to 2.74 to 1 at March 27, 2009. Current liabilities at September 25, 2009 were $1,139,752 compared to $1,558,972 at March 27, 2009.
The Company reported $126,153 in capital expenditures for the six months ended September 25, 2009 and reported depreciation of $88,314 for the same six month period.
The net income of $721,033 for the six months ended September 25, 2009 resulted in an increase in stockholders' equity to $4,576,921 as compared to stockholders' equity of $3,855,888 at March 27, 2009.
The Company has an accounts receivable financing agreement with a factor, which bears interest at 2 1/2 % above prime. However, the agreement does stipulate that the minimum interest rate is 12% per annum. At September 25, 2009 the amount outstanding with the factor was $117,732 as compared to $454,723 at March 27, 2009. The loan is secured by the Company's accounts receivables and inventories.
IEH CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)
Liquidity and Capital Resources (continued)
The factor provides discounted funds to the Company based upon the Company's accounts receivables. These funds provide the primary source of working capital for operations.
In the past two fiscal years, management has been reviewing its collection practices and policies for outstanding receivables and has revised its collection procedures to a more aggressive collection policy. As a consequence of this new policy the Company's experience is that its customers have been remitting payments on a more consistent and timely basis. The Company reviews the collectability of all accounts receivable on a monthly basis. The reserve is less than 2% of average gross accounts receivable and is considered to be conservatively adequate.
The Company has the Multi-Employer Plan with the UAW. Contributions are made by the Company in accordance with a negotiated labor contract and are based on the number of covered employees employed per month. With the passage of the 1990 Act, the Company may become subject to liabilities in excess of contributions made under the collective bargaining agreement. Generally, these are contingent upon termination, withdrawal, or partial withdrawal from the Multi-Employer Plan. The Company has not taken any action to terminate, withdraw or partially withdraw from the Multi-Employer Plan, nor does it intend to do so in the future. Under the 1990 Act, liabilities would be based upon the Company's proportional share of the Multi-Employer Plan's unfunded vested benefits which is currently not available. The amount of accumulated benefits and net assets of such Plan also is not currently available to the Company. The total contributions charged to operations under the provisions of the Multi-Employer Plan were $55,692 and $45,281 for the six months ended September 25, 2009 and September 26, 2008, respectively.
On September 21, 2001 the Company's shareholders approved the adoption of the 2002 Plan to provide for the grant of options to purchase up to 750,000 shares of the Company's common stock to all employees, including senior management. No options have been granted under the Employee Option Plan to date.
Options granted to employees under the 2002 Plan may be designated as options which qualify for incentive stock option treatment under Section 422A of the Internal Revenue Code, or option which do not so qualify.
Under the 2002 Plan, the exercise price of an option designated as an incentive stock option shall not be less than the fair market value of the Company's common stock on the day the option is granted. In the event an option designated as an incentive stock option is granted to a ten percent (10%) shareholder, such exercise price shall be at least 110 Percent (110%) of the fair market value or the Company's common stock and the option must not be exercisable after the expiration of five years from the day of the grant. Exercise prices of non-incentive stock options may be less than the fair market value of the Company's common stock. The aggregate fair market value of shares subject to options granted to its participants, which are designated as incentive stock options, and which become exercisable in any calendar year, shall not exceed $100,000. As of September 25, 2009, no options had been granted under the 2002 Plan.
In 1987, the Company adopted the Cash Bonus Plan for executive officers. Contributions to the Cash Bonus Plan are made by the Company only after pre-tax operating profits exceed $150,000 for a fiscal year, and then to the extent of 10% of the excess of the greater of $150,000 or 25% of pre-tax operating profits.
IEH CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued)
Liquidity and Capital Resources (continued)
The Company accrued $60,000 for the six months ended September 25, 2009. For the year ended March 27, 2009, the contribution was $121,000.
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