Thursday, May 9, 2019
IEC Electronics (IEC)
Can margins keep up with this organic growth machine?
IEC Electronics Corp. provides electronic manufacturing services (EMS) to technology companies in the United States. It involves in the custom manufacture of circuit cards, system level assemblies, and an array of custom cable/wire harness assemblies.
Christian Herbosa, Research Analyst, Noble Capital Markets, Inc.
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- Delivering Consistent Organic
Growth. During Q2, IEC generated $37.3 million of revenue for a third consecutive quarter of sequential organic growth. Revenue for the quarter modestly beat our expectations of $37.0 million and was a 17.4% increase over Q2 last year. This consistent top line growth can be attributed to the successful business development efforts initiated two years ago when the then new management team began to rebuild the sales funnel. - Temporary Headwinds Impact Margins. Quarterly gross margins decreased to 12.3% down from 15.1% last year. Factors contributing to this decrease included: unusual tariff related costs, product mix, increased staffing, and costs related to electronic component sho…
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