IEC Electronics building solid manufacturing niche that is exclusively 'US made'

Provides electronic-manufacturing services to the aerospace, defense, industrial, and medical sectors Manufactures 100% of its products in the US, unlike many of its competitors Fiscal 2Q 2021 revenue was $45.4 million What IEC Electronics does: IEC Electronics Inc (NASDAQ:IEC) is a provider of electronic manufacturing services to advanced technology companies that produce life-saving and mission-critical products in the aerospace, defense, industrial, and medical sectors.  Founded in 1966, the Newark, New York-based company breaks its business down into six key areas: full-system assemblies, design & test development, analysis & testing lab, electronics manufacturing, interconnect solutions, and precision metalworking.  The company specializes in delivering technical solutions via the custom manufacture of complex full-system assemblies (such as circuit boards) and by providing on-site analytical testing laboratories, custom-design, and test-engineering services.  IEC manufactures 100% of its products in the US, unlike many of its competitors. For the medical industry, the company's products include infusion pumps, resuscitation and imaging systems, and diagnostic equipment. IEC's BioWaveHome Neuromodulation Pain Therapy System helps manage pain through electrical stimulus. The Veterans Administration and the National Football League have expressed interest in the product which is seen as a viable alternative to using highly addictive opioid drugs to treat pain.  It also makes ruggedized industrial controls, remote-inspection equipment, and weather-detection instruments for the industrial sector.  In the aerospace and defense areas, the company produces encrypted satellite communication, weapons, and flight-control systems as well as handheld tactical radios for US troops in war zones.  How is it doing: IEC Electronics has made a strong start to 2021. In its second-quarter of 2021 financial results, reported on May 5, the company generated revenue of $45.4 million, a year-over-year increase of 2.7% from $44.2 million at the same stage in 2020. In the three months ended April 30, gross profit was $3.3 million, 7.3% of sales, compared to gross profit of $5.5 million, 12.5% of sales, in the 2Q of fiscal 2020. The company's fiscal 1Q 2021 numbers, posted at the beginning of February, included a net income jump of 29% year-over-year to $1.5 million, or $0.15 per share. The company noted that its top-line revenue also improved to $47.5 million, a 6% increase from the same period last year, while its gross profit margin for the quarter rose 40 basis points to 12.1% of sales. The company reported a net loss of $300,000, $0.03 per diluted share, compared to net income of $1.5 million, $0.14 per diluted share, a year earlier.  Meanwhile, in July 2021, IEC was awarded a multi-year contract, valued in excess of $45 million, from a Tier 2 Department of Defense contractor.  The award is a follow-on order extending IEC’s participation with a program it has supported for several years. In 2019 the contractor awarded IEC the entire outsourcing of this program associated with secured communications equipment for US aircraft, ground vehicles, and surface warships. IEC also has entered into an agreement to purchase an 86,000 square-foot facility in Rochester, New York state. The new facility is expected to provide additional capacity and more importantly, access to a larger pool of qualified resources to support future organic growth.  Looking ahead to the second half of its fiscal 2021, IEC expects revenue to continue to grow as it brings online a pair of high-value programs and ramps up production. Inflection points: Further top-line revenue growth New high-value electronics programs  Accelerating production for and increasing its visibility to companies in aerospace, defense, and more What the boss says: “We are pleased to have received this contract extension from a valued, longstanding customer, which we believe demonstrates their recognition of our capabilities and expertise as an advanced manufacturing partner for high complexity, life-saving and mission critical programs,” said CEO Jeffrey Schlarbaum after the company won a $45 million defense contract.  “Since the beginning of the relationship, IEC has consistently performed to rigorous standards, from our initial role working with a single service line, to our current role supporting their entire life-cycle outsourcing needs. As a 100% US-based manufacturer with a full portfolio of vertically integrated production services, IEC is a particularly attractive partner for companies in the aerospace and defense industry and we welcome this opportunity to continue to support a premier defense contractor.” Contact the author: patrick@proactiveinvestors.com Follow him on Twitter @PatrickMGraham