-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WkXO+G8czMzvA+wUTDIi8flb44+r3G8JlhMimfZOnym7Q+inQiGFz+hQMLYSSlC+ xATaBlcfCdBDolCNMLOizA== 0000914317-98-000124.txt : 19980218 0000914317-98-000124.hdr.sgml : 19980218 ACCESSION NUMBER: 0000914317-98-000124 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971226 FILED AS OF DATE: 19980217 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: IEH CORPORATION CENTRAL INDEX KEY: 0000050292 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC CONNECTORS [3678] IRS NUMBER: 135549345 STATE OF INCORPORATION: NY FISCAL YEAR END: 0330 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-05278 FILM NUMBER: 98541235 BUSINESS ADDRESS: STREET 1: 140 58TH ST BLDG B UNIT 8E CITY: BROOKLYN STATE: NY ZIP: 11220 BUSINESS PHONE: 7184924440 MAIL ADDRESS: STREET 1: 369 LEXINGTON AVE CITY: NEW YORK STATE: NY ZIP: 10017 FORMER COMPANY: FORMER CONFORMED NAME: INDUSTRIAL ELECTRONIC HARDWARE CORP DATE OF NAME CHANGE: 19890123 FORMER COMPANY: FORMER CONFORMED NAME: INDUSTRIAL HEAT TREATING CO INC DATE OF NAME CHANGE: 19670926 10QSB 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------- FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 26, 1997 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to _______________ Commission File No. 0-5258 IEH CORPORATION (Exact name of registrant as specified in its charter) New York 1365549348 - ------------------------------- ---------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 140 58th Street, Suite 8E, Brooklyn, New York 11220 --------------------------------------------------- (Address of principal executive office) Registrant's telephone number, including area code: (718) 492-4440 --------------- - -------------------------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report. Check whether the Issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ] 2,303,502 shares of Common Shares, par value $.50 per share, were outstanding as of February 11, 1998. IEH CORPORATION CONTENTS PART 1- FINANCIAL INFORMATION ITEM 1- FINANCIAL STATEMENTS Balance Sheets as of December 26, 1997 (Unaudited) and March 28, 1997 Statement of Operations (Unaudited) for the three and nine months ended December 26, 1997 and December 27, 1996 Statement of Cash Flows (Unaudited) for the nine months ended December 26, 1997 and December 27, 1996 Notes to Financial Statements (Unaudited) ITEM 2- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS PART II- OTHER INFORMATION
IEH CORPORATION BALANCE SHEETS As of December 26, 1997 and March 28, 1997 December 26, March 28, 1997 1997 (Unaudited) (Note 1) ---------- ---------- ASSETS CURRENT ASSETS: Cash .............................................. $ 79,273 $ 15,274 Accounts receivable, less allowance for doubtful accounts of $10,062 at December 26, 1997 and March 28, 1997 .............................. 826,868 651,873 Inventories (Note 2) .............................. 910,200 1,107,100 Prepaid expenses and other current assets (Note 3) 28,643 52,629 Other receivables ................................. 8,665 30,492 ---------- ---------- Total current assets ...................... 1,853,649 1,857,368 ---------- ---------- PROPERTY, PLANT AND EQUIPMENT, less accumulated depreciation and amortization of $4,446,713 at December 26, 1997 and $ 4,238,093 at March 28, 1997 ................................. 1,421,902 1,480,841 ---------- ---------- OTHER ASSETS: Prepaid pension cost (Note 7) .................... 43,949 43,949 Other assets ..................................... 47,575 47,798 ---------- ---------- 91,524 91,747 ---------- ---------- Total assets .............................. $3,367,075 $3,429,956 ========== ==========
See accompanying notes to financial statements
IEH CORPORATION BALANCE SHEETS As of December 26, 1997 and March 28, 1997 December 26, March 28, 1997 1997 ----------- ----------- (Unaudited) (Note 1) LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts receivable financing .................... $ 586,628 $ 536,457 Notes payable, current portion (Note 6) .......... 54,861 1,789 Loans payable, current portion (Note 5) .......... 47,809 45,710 Accrued corporate income taxes ................... 16,087 8,217 Union pension and health & welfare, current portion (Note 7) .................... 120,000 120,000 Accounts payable .................................. 743,419 1,074,903 Other current liabilities (Note 4) ................ 159,406 131,835 ----------- ----------- Total current liabilities ................ 1,728,210 1,918,911 ----------- ----------- LONG-TERM LIABILITIES: Pension plan payable (Note 7) .................... 516,966 516,966 Notes payable, less current portion (Note 6) ..... 146,992 -- Loan payable, less current portion (Note 5) ...... 196,865 240,206 Union pension & health & health & welfare, less current portion (Note 7) ................ 133,764 194,491 ----------- ----------- Total long-term liabilities .............. 994,587 951,663 ----------- ----------- Total liabilities ........................ 2,722,797 2,870,574 ----------- ----------- STOCKHOLDERS' EQUITY: Common stock, $.50 par value; 10,000,000 shares authorized, 2,303,502 shares issued and outstanding ........................... 1,151,751 1,151,751 Capital in excess of par value .................... 1,615,874 1,615,874 Retained earnings (Deficit) ....................... (2,123,347) (2,208,243) Total stockholders' equity ............... 644,278 559,382 ----------- ----------- Total liabilities and stockholders' equity $ 3,367,075 $ 3,429,956 =========== ===========
See accompanying notes to financial statements
IEH CORPORATION STATEMENT OF OPERATIONS (Unaudited) Nine Months Ended Three Months Ended --------------------------- ---------------------------- Dec 26, Dec 27, Dec 26, Dec, 27 1997 1996 1997 1996 ----------- ----------- ----------- ----------- REVENUES, net sales ............... $ 3,646,250 $ 3,603,908 $ 1,100,515 $ 1,291,804 ----------- ----------- ----------- ----------- COSTS AND EXPENSES: Cost of products sold ............ 2,476,456 2,559,287 787,221 915,661 Selling, general and administrative 777,804 563,460 259,564 189,371 Interest expense .................. 86,370 114,623 33,997 40,825 Depreciation and amortization ..... 209,520 230,100 69,840 76,800 ----------- ----------- ----------- ----------- 3,550,150 3,467,470 1,150,622 1,223,117 ----------- ----------- ----------- ----------- OPERATING INCOME (LOSS) ........... 96,100 136,438 (50,107) 68,687 OTHER INCOME ...................... 902 1,084 243 457 ----------- ----------- ----------- ----------- INCOME (LOSS) BEFORE INCOME TAXES . 97,002 137,522 (49,864) 69,144 PROVISION FOR INCOME TAXES ........ 12,100 19,336 5,200 6,300 ----------- ----------- ----------- ----------- NET INCOME(LOSS) .................. $ 84,902 $ 118,186 $ (55,064) $ 62,844 =========== =========== =========== =========== NET INCOME PER COMMON SHARE ....... $ .037 $ .051 $ (.024) $ .027 =========== =========== =========== =========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (in thousands) .................. 2,304 2,304 2,304 2,304 =========== =========== =========== ===========
See accompanying notes to financial statements
IEH CORPORATION STATEMENT OF CASH FLOWS Increase (Decrease) in Cash For the Nine Months Ended December 26, 1997 and December 27, 1996 (Unaudited) December 26, December 27, 1997 1996 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income ......................................... $ 84,902 $ 118,186 --------- --------- Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization ...................... 209,520 230,100 Changes in assets and liabilities: (Increase) decrease in accounts receivable .......... (174,995) 47,038 (Increase) decrease in inventories .................. 196,900 (141,628) (Increase) decrease in prepaid expenses and other current assets ............................ 23,986 (17,478) Decrease in other receivables ....................... 21,827 35,791 Decrease in other assets ............................ 223 668 (Decrease) increase in accounts payable ............. (331,484) 176,130 (Decrease) increase in other current liabilities .... 27,571 (68,642) Increase in accrued corporate income taxes .......... 7,870 6,628 Increase in pension plan payable .................... -- 65,489 (Decrease) in due to union pension & health & welfare (60,727) (64,610) --------- --------- Total adjustments .......... (79,309) 269,486 --------- --------- NET CASH PROVIDED BY OPERATING ACTIVITIES ............................... 5,593 387,672 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of fixed assets ........................... (150,587) (164,200) --------- --------- NET CASH USED IN INVESTING ACTIVITIES . (150,587) (164,200) --------- ---------
See accompanying notes to financial statements
IEH CORPORATION STATEMENT OF CASH FLOWS Increase (Decrease) in Cash For The Nine Months Ended December 26, 1997 and December 27, 1996 (Unaudited) December 26, December 27, 1997 1996 --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on notes payable ................... $ -- $ (2,007) Increase in notes payable ............................. 200,064 -- Proceeds from accounts receivable financing ........... 50,171 9,727 Principal payments on loan payable .................... (41,242) (21,653) --------- --------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES ................................. 208,993 (13,933) --------- --------- INCREASE IN CASH ........................................ 63,999 209,539 CASH, beginning of period ............................... 15,274 3,416 --------- --------- CASH, end of period ...................... $ 79,273 $ 212,955 ========= ========= SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION, cash paid during the nine months for: Interest ........................................... $ 86,370 $ 114,623 ========= ========= Income Taxes ....................................... $ 12,100 $ 19,336 ========= =========
See accompanying notes to financial statements IEH CORPORATION NOTES TO FINANCIAL STATEMEMTS (Unaudited) Note 1- FINANCIAL STATEMENTS: The accompanying financial statements of IEH Corporation ("The Company") for the nine months ended December 26, 1997 have been prepared in accordance with the instructions for Form 10-QSB and do not include all of the information and footnotes required by generally accepted accounting principles. The financial statements have been prepared by management from the books and records of the Company and reflect, in the opinion of management, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the financial position, results of operations and cash flows of the Company for the nine months ended December 26, 1997. These statements are not necessarily indicative of the results to be expected for the full fiscal year. These statements should be read in conjunction with the financial statements and notes thereto included in the Company's annual report Form 10-KSB for the fiscal year ended March 28, 1997 as filed with the Securities and Exchange Commission. The balance sheet at March 28, 1997 has been taken from the audited financial statements of that date. Note 2- INVENTORIES: Inventories are comprised of the following:
December 26, March 28, 1997 1997 ---------- ---------- Raw materials $ 650,691 $ 791,452 Work in process 30,811 37,476 Finished goods 228,698 278,172 ---------- ---------- $ 910,200 $1,107,100 ========== ==========
Inventories are priced at the lower of cost (first-in, first-out method) or market, whichever is lower. The Company has established a reserve for obsolescence to reflect net realizable inventory value. The balance of this reserve as of December 26, 1997 was $37,800. At March 31, 1997, the balance of this reserve was $48,000. Inventories at December 26, 1997 and March 28, 1997 are recorded net of this reserve. IEH CORPORATION NOTES TO FINANCIAL STATEMENTS (Unaudited) Note 3- PREPAID EXPENSES AND OTHER CURRENT ASSETS: Prepaid expenses and other current assets are comprised of the following:
December 26, March 28, 1997 1997 ------- ------- Prepaid insurance $24,267 $48,054 Other current assets 4,376 4,575 ------- ------- $28,643 $52,629 ======= =======
Note 4- OTHER CURRENT LIABILITIES: Other current liabilities are comprised of the following:
December 26, March 28, 1997 1997 -------- -------- Payroll and vacation accruals $ 32,725 $ 12,817 Sales commissions 13,383 9,591 Pension plan payable 65,489 65,489 Other 47,809 43,938 -------- -------- $159,406 $131,835 ======== ========
Note 5- LOAN PAYABLE: On July 22, 1992, the Company obtained a loan of $435,000 from the New York State Urban Development Corporation,("UDC") collateralized by machinery and equipment. The loan is payable over ten years, with interest rates progressively increasing from 4% to 7% per annum. The balance remaining at December 26, 1997 was $244,674. Aggregate future principal payments are as follows: Fiscal Year Ending March: 1998 $ 11,685 1999 45,710 2000 48,529 2001 50,694 Thereafter 88,056 ------- $244,674 IEH CORPORATION NOTES TO FINANCIAL STATEMENTS (Unaudited) Note 5- LOAN PAYABLE (continued): In April 1997, the Company was informed by the UDC that the loan was sold and conveyed to WAMCO XXIV, Ltd. All the terms and conditions of the loan remained in effect. As of December 26, 1997, the Company had failed to meet one of the financial covenants of the loan agreement; namely that the "Company shall be obligated to maintain a tangible net worth of not less than $1,300,000 and the Company shall be obligated to maintain a ratio of current assets to current liabilities of 1.1 to 1.0. The Company reported tangible net worth of $644,278. The ratio of current assets to current liabilities was 1.1 to 1.0. The Company had previously received a waiver of this covenant from the UDC through the period ending March 31, 1994 and has applied for additional waivers of this covenant. Neither the UDC or WAMCO XXIV, Ltd. Has acted on these requests. There are no assurances that the Company will receive any additional waivers of this covenant. Should the Company not receive any additional waivers, then it will be deemed to be in default of this loan obligation and the entire loan plus interest will become due and payable. Note 6- NOTES PAYABLE: The Company was in arrears in the amount of $236,000 to the New York City Economic Development Corporation ("NYCEDC") for rent due for its offices and manufacturing facilities. In May 1997, the Company and the NYCEDC negotiated an agreement for the Company to pay off its indebtedness over a 48 month period by the Company issuing notes payable to NYCEDC. The notes bear interest at the rate of 8.25% per annum. The balance remaining at December 26, 1997 was $201,853. Note 7- COMMITMENTS: The Company has with the United Auto Workers of America, Local 259, a collective bargaining multi-employer pension plan. Contributions are made in accordance with a negotiated labor contract and are based on the number of covered employees employed per month. With the passage of the Multi-Employer Pension Amendments Act of 1980 ("The Act"), the Company may become subject to liabilities in excess of contributions made under the collective bargaining agreement. Generally, these liabilities are contingent upon the termination, withdrawal or partial withdrawal from the Plan. The Company has not taken any action to terminate, withdraw or partially withdraw from the Plan nor does it intend to do so in the future. Under the Act, liabilities would be based upon the Company's proportional share of the Plan's unfunded vested benefits which is currently IEH CORPORATION NOTES TO FINANCIAL STATEMENTS (Unaudited) Note 7- COMMITMENTS (continued): 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 this pension plan were $29,515 for the nine months ended December 26, 1997. In December 1993, the Company and Local 259 entered into a verbal agreement whereby the Company would satisfy this debt by the following payment schedule: The sum of $10,000 will be paid by the Company each month in satisfaction of the current arrears until this total debt has been paid. Additionally, both parties agreed that current obligatory funding by the Company will be made on a timely current basis. Effective February 1, 1995, the Company withdrew from the Union's health and welfare plan and offered its employees an alternative health insurance plan. As of December 26, 1997, the Company reported arrears with respect to its contributions to the Union's health and welfare and pension plans. The amount due the health and welfare plan was $155,189 and the amount due the pension plan was $98,575. The total amount due of $253,764 is reported on the accompanying balance sheet in two components; $120,000 reported as a current liability and $133,764 as a long-term liability. On June 30, 1995, the Company applied to the Pension Benefit Guaranty Corporation ("PBGC") to have the PBGC assume all of the Company's responsibilities and liabilities under its Salaried Pension Plan. On April 26, 1996, the PBGC determined that the Salaried Pension Plan did not have sufficient assets available to pay benefits which were and are currently due under the terms of the Plan. The PBGC further determined that pursuant to the provisions of the Employment Retirement Income Security Act of 1974, as amended ("ERISA") that the Plan must be terminated in order to protect the interests of the Plan's participants. Accordingly, the PBGC proceeded pursuant to ERISA to have the Plan terminated and the PBGC appointed as statutory trustee, and to have July 31, 1995 established as the Plan's termination date. IEH CORPORATION NOTES TO FINANCIAL STATEMENTS (Unaudited) Note 7- COMMITMENTS (continued): At December 26, 1997 and March 28, 1997, $65,489 of the pension liability is included in other current liabilities, with the balance of $516,966 shown as a long-term liability. On those dates, the long-term portion includes $226,041, which represents the recognition of additional minimum liability to comply with the requirements of Statement of Financial Standards No. 87. Note 8- CHANGES IN STOCKHOLDERS' EQUITY: Retained earnings increased by $84,902 which represents the net income for the nine months ended December 26, 1997. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations 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:
Nine Months Ended --------------------------- December 26, December 27, 1997 1996 -------- -------- Operating Revenues (in thousands) $ 3,646 $ 3,604 Operating Expenses: (As a percentage of Operating Revenues) Cost of Products Sold 67.9% 71.0% Selling, General and Administrative 21.2% 15.6% Interest Expense 2.5% 3.2% Depreciation and Amortization 5.8% 6.4% -------- -------- Total Costs and Expenses 97.4% 96.2% ======== ======== Operating Income 2.6% 3.8% ======== ======== Other Income -- -- ======== ======== Income Before Income Taxes 2.6% 3.8% ======== ======== Income Taxes .3% .5% ======== ======== Net Income 2.3% 3.3% ======== ========
Comparative Analysis: Nine Months Ended December 26, 1997 compared to December 27, 1996 Operating revenues for the nine months ended December 26, 1997 amounted to $3,646,250, reflecting a 1% increase versus the comparative nine months operating revenues of $3,603,908. The increase is a direst result of management's to redirect its dependence on governmental and military sales to commercial electronic sales. Comparative Analysis (continued) Cost of products sold amounted to $2,476,456 for the nine months ended December 26, 1997 or 67.9% of operating revenues. This reflected a decrease of $82,831 or 3.2% in the cost of products sold of $2,559,287 for the nine months ended December 27, 1996. This decrease is primarily due to management's efforts to better control costs. Cost of products sold decreased as a percentage of revenues in the comparative periods. Selling, general and administrative expenses were $770,804 or 21.2% of revenues compared to $563,460 or 15.6% of revenues for the comparable nine moth period ended December 27, 1996. This reflected an increase of 36.8% and reflects increased expense levels in this segment. Interest expense was $86,370 or 2.5% of revenues as compared to $114,623 or 3.2% of revenues in the nine month period ended December 27, 1996. This decrease of 24.6% reflects the reduction in interest rates in the current fiscal period. Depreciation and amortization of $209,520 or 5.8% of revenues was reported for the nine month period ended December 26, 1997. This reflects a decrease of 8.9% from the comparable nine month period ended December 27, 1996 of $230,100 or 6.4% of revenues. The decrease is a result of decreased depreciation levels on fixed assets during the nine month period ended December 26, 1997. The Company reported net income of $84,902 for the nine months ended December 26, 1997, representing income per common share of $.037 as compared to $118,186 or $.051 per common share for the nine months ended December 26, 1997. The resultant decrease in net income can be attributed to increased operating expenses in the current nine month period ending December 26, 1997. Results of Operations: The following table sets forth for the periods indicated, sales revenues and percentages for certain items in the financial data as such items bear to the revenues of the Company:
Three Months Ended ---------------------------------- December 26, December 27, 1997 1996 ------------ ------------ Operating Revenues (in thousands) $ 1,100,515 $ 1,291,804 Operating Expenses: (As a percentage of Operating Revenues) Cost of Products Sold 71.5% 70.9% Selling,General and Administrative 23.7% 14.8% Interest Expense 3.1% 3.1% Depreciation and Amortization 6.3% 5.9% ------------ ------------ Total Costs and Expenses 104.6% 94.7% ============ ============ Operating Income (Loss) (4.6%) 5.3% ============ ============ Other Income -- -- ============ ============ Income ( Loss) Before Income Taxes (4.6%) 5.3% ============ ============ Income Taxes .4% .5% Net Income ( Loss) (5.0%) 4.8% ============ ============
Comparative Analysis: Three Months Ended December 26, 1997 compared to December 26, 1996 Operating revenues for the three month period ending December 26, 1997 amounted to $1,100,515 reflecting a decrease of 14.8% versus the three month period ended December 27, 1996. The decrease in revenues is due to decreased sales in the commercial electronic sector. Comparative Analysis: Cost of products sold amounted to $787,221 or 71.5% of operating revenues for the three months ended December 26, 1997. This reflected a 14% decrease in the cost of products sold from $915,661 or 70.9% of operating revenues in the three months ended December 27, 1996. This decrease is due reduced costs associated with the decrease in sales in this three month period. Selling, general and administrative expenses were $259,564 or 23.7% of operating revenues as compared to $190,371 or 14.8% of operating revenues in the three months ended December 27, 1996. This increase of $69,193 or 36.3% is due to increased levels of expense in this sector. Interest expense was $33,997 or 3.1% of operating revenues as compared to $40,825 or 3.1% of revenues in the three months ended December 27, 1996.. This decrease of $6,828 or 16.7% is due to decreased rates of interest in the current period. Depreciation and amortization of $69,840 or 6.3% was reported for the three months ended December 26, 1997 as compared to $76,800 or 5.9% of revenues in the three months ended December 27, 1996. This expense as a percentage of revenues increased as a result of lower operating revenues in the current three month period ended December 26, 1997. The Company reported a net loss of $55,064 for the three months ended December 26, 1997, representing a net loss of $.024 per common share as compared to net income of $.027 per share in the three months ended December 27, 1996. Thus comparative decrease for the three month period is due to increased operating expenses and lower operating revenues. PART II Item 5. Other Matters As previously reported, the Company reached an agreement with its landlord, the New York Urban Development Corporation ("NYUDC") to settle certain matters related to the lease of its principal offices located in Brooklyn New York, including a lawsuit brought by the NYUDC against the Company. The lawsuit, entitled New York City Economic Development Corporation against IEH Corporation, had been commenced in the Civil Court of the City of New York, Kings County (Index No. L&T 88890/97). The NYUDC claimed that IEH had not paid the proper rent due under its lease for the period from September 1, 1992 through April 1997. The NYUDC claimed damages of $236,000 plus interest of approximately $41,000. The Company determined it was in its best interest to settle the lawsuit. The parties agreed to a settlement, effective as of May, 1997 whereby the Company agreed to a repayment schedule for the amount due payable with interest at 8.25% per year. The monthly installments equal approximately $5,790 per month. The settlement provides for the entry, following notice and a cure period, of a default judgement by the NYUDC in the event the Company fails to timely pay amounts due under the lease and the settlement. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 99.1 Stipulation and Escrow Agreement dated December 18, 1997 between the Company and New York Urban Development Corporation together with Stipulation, Consent and Final Judgement. (b) Reports on Form 8-k None In accordance with the requirements of the Exchange Act, the Registrant has duly cause this report to be signed on its behalf by the undersigned, thereunto duly authorized. IEH CORPORATION (Registrant) February 16, 1998 /s/Michael Offerman ------------------- Michael Offerman President February 16, 1998 /s/Robert Knoth --------------- Robert Knoth Chief Financial Officer SIGNATURES In accordance with the requirements of the Exchange Act, the Registrant has duly cause this report to be signed on its behalf by the undersigned, thereunto duly authorized. IEH CORPORATION (Registrant) February 16, 1998 /s/Michael Offerman ------------------- Michael Offerman President February 16, 1998 /s/Robert Knoth --------------- Chief Financial Officer EXHIBITS 99.1 Stipulation and Escrow Agreement between the Company and the New York City Economic Development Corporation, together with Stipulation, Consent Order and Final Judgement. CIVIL COURT OF THE CITY OF NEW YORK COUNTY OF KINGS: NON HOUSING PART 52 NEW YORK CITY ECONOMIC Index No. L&T 88890 /97 DEVELOPMENT CORPORATION, Petitioner-Landlord, STIPULATION AND ESCROW AGREEMENT -against- IEH CORPORATION, A New York Corporation, Brooklyn Army Terminal Building B Forming a Part of the Brooklyn Army Terminal, Units e and 8-F, The Space on the Eighth Floor, as more particularly delineated on the Floor Plan annexed hereto, marked Exhibit "A" in the building known as Building B forming a part of the Brooklyn Army Terminal, in the Borough of Brooklyn, City of New York, 140 58th Street Brooklyn, New York 11220 Respondent-Tenant, **"JOHN DOE" and/or "JANE DOE", and/or "XYZ CORP." Respondents-Undertenants, IT IS HEREBY STIPULATED AND AGREED, by and between the respective parties to the above-captioned proceeding as follows: 1. Respondent-Tenant IEH CORPORATION ("Respondent"), appears by its attorneys, Goldstein & DiGioia, LLP, 369 Lexington Avenue, New York, New York 10017, and admits and concedes the jurisdiction of this Court, and waives any and all jurisdictional defenses that it may have with respect to the instant proceeding. 2. This proceeding is hereby marked off-calendar on consent of the parties. 3. Simultaneous with the parties agreement to mark this proceeding off calendar, and as an expressed condition thereof, Petitioner and Respondent have entered into a written Stipulation, Consent Order, and Final Judgement (the "Stipulation") to be held in escrow in for of Petitioner, Leon I. Behar & associates, PC.,as Escrow Agent, 7 Penn Plaza , 14th Floor, New York, New York 10001 pending Respondents's compliance with repayment provisions set forth therein. 4. If Respondent fails to do the following, then the escrowed Stipulation judgement will be released to Petitioner and shall be filed with the Court: A. Comply with each and every provision of the Stipulation and the parties' existing lease agreement, including any and all provisions for repayment of rental arrears, and default in payment of current rent. 5. Upon Respondent's default in compliance with any of the provisions set forth in the Stipulation, Petitioner may move on Eight (8) Days Notice of Default by personal service, or Thirteen (13) days by mail, to Respondent's counsel for an Order that the court "so order" the parties' Stipulation, enter a final judgement of possession with a warrant of eviction to issue forthwith, and a monetary judgement against Respondent. 6. In consideration for Respondent's agreement to enter into this Stipulation and Escrow Agreement (the "Escrow Agreement"), Petitioner agrees not to seek a final judgement of possession or monetary judgement at this time. 7. Respondent agrees that upon default and failure to comply with any provision's contained in the Stipulation, that Respondent will be liable to Petitioner for legal fees, costs, expenses, and disbursements arising from Respondent's failure to abide by its obligations under the parties' Stipulation and Escrow Agreement, including, but not limited to, actual attorneys' fees incurred by Petitioner. - 2 - 8. Respondent further represents that it has entered into this Stipulation freely, voluntarily, and knowingly, without pressure, duress or harassment by the Petitioner, or any other person an/or entity, and acknowledges that the Petitioner has entered into this Stipulation in specific reliance upon Respondent's representations. 9. This court retained jurisdiction over this matter. 10. This Stipulation may not be modified orally. Dated: New York, New York December , 1997 IEH Corporation NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION Petitioner By: ________________ By: /s/Daniel P. Kurtz ------------------ Daniel P. Kurtz Executive Vice President GOLDSTEIN & DIGIOIA, LLP LEON I. BEHAR & ASSOCIATES, P.C. Attorneys for Respondent Attorneys for Petitioner 369 Lexington Avenue, 18th Floor 7 Penn Plaza, 14th Floor New York, New York 10017 New York, New York 10001 By: /s/Brian C. Daughney By: /s/Leon I. Behar -------------------- ---------------- Brian C. Daughney, Esq. Leon I. Behar, Esq. - 3 - CIVIL COURT OF THE CITY OF NEW YORK COUNTY OF KINGS: NON HOUSING PART 52 NEW YORK CITY ECONOMIC Index No. L&T 88890 /97 DEVELOPMENT CORPORATION, Petitioner-Landlord, STIPULATION CONSENT ORDER, AND FINAL JUDGEMENT -against- IEH CORPORATION, A New York Corporation, Brooklyn Army Terminal Building B Forming a Part of the Brooklyn Army Terminal, Units e and 8-F, The Space on the Eighth Floor, as more particularly delineated on the Floor Plan annexed hereto, marked Exhibit "A" in the building known as Building B forming a part of the Brooklyn Army Terminal, in the Borough of Brooklyn, City of New York, 140 58th Street Brooklyn, New York 11220 Respondent-Tenant, **"JOHN DOE" and/or "JANE DOE", and/or "XYZ CORP." Respondents-Undertenants, IT IS HEREBY STIPULATED AND AGREED, by and between the respective parties to the above-captioned proceeding as follows: 1. Respondent-Tenant IEH CORPORATION ("Respondent"), appears by its attorneys, Goldstein & DiGioia, LLP, 369 Lexington Avenue, New York, New York 10017, and admits and concedes the jurisdiction of this Court, and waives any and all jurisdictional defenses that it may have with respect to the instant proceeding. 2. Respondent consents to the entry of a final judgement of possession, warrant to issue forthwith, execution stayed as set forth herein. - 4 - 3. In consideration of Respondent's consent to enter of a final judgment of possession, and warrant to issue forthwith, as set forth above in Paragraph 2, Petitioner agrees to stay execution of the warrant provided that Respondent complies with the terms of the Stipulation, in their entirety, as set forth herein. 4. Respondent consents to the entry of a money judgement in favor of the Petitioner in the amount of $236,000.00 (the "Original Judgement"), representing rent and additional rent arrears due for the period from September 1, 1992 through and including April 1, 1997. All sums shall be tendered by certified check or company check only. The Clerk of the Court is directed to enter the Original Judgement in the amount of $236,000.00 in favor of Petitioner. 5. In connection with satisfaction of the Original Judgement, Respondent agrees to pay $277,880.64, i.e. the full amount of said arrears totaling $236,000.00, plus 8.25% interest thereon compounded annually over the repayment period totaling $41,880.64, as set forth in Paragraph 6(a), et. seq. and the repayment Schedule annexed hereto as Exhibit " A" and made part hereof as if fully set forth below. 6. In the event Respondent defaults in compliance with the repayment schedule as set forth in Paragraph 7(b), et. seq. and the repayment Schedule annexed hereto as Exhibit "A", the Clerk of the Court is directed to modify the Original Judgement in said amount in favor of Petitioner upon receipt of an Affidavit of Default to include the Original Judgement ($236,000.00) plus 8.25% interest thereon compounded annually over the repayment period totaling ($41,880.64) for a modified Judgement of $277,880.64 (the "Modified Judgement"). less any payments already made toward the Original Judgement. - 5 - 7. Respondent further agrees to pay said Original Judgement in accordance with the following repayment schedule set forth below, and as detailed on the repayment schedule annexed hereto as Exhibit "A" and made a part hereof: a. Commencing in May, 1997 and continuing thereafter, with said payments to be made as follows: $5,789.18 each month and continuing each and every month thereafter through and including April 2001 on or before the twentieth (20th) day of each month. b. Respondent's Arrears Payment Schedule is set forth as follows, and as annexed hereto as Exhibit "A".
Key Figures Inputs Annual Loan Payments $69,470.16 Loan Principal Amount $236,000.00 Monthly Payments $5,789.18 Annual Interest Rate 8.25% Interest In First Calendar Year $12,166.79 Loan Period In Years 4 Interest over Term of Loan $41,880.64 Base Year of Loan 1,997 Sum of All Payments $277,880.64 Base Month of Loan May
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Payments in First 12 Months Year Month Beginning Payments Principal Interest Cumulative Cumulative Ending Balance Principal Interest Balance - ------ ----- ---------- -------- -------- -------- ---------- ---------- ---------- Yr1997 May 236,000.00 5,789.18 4,166.68 1,622.5 4,166.68 1,622.50 231,833.00 June 231,833.32 5,789.18 4,195.33 1,593.85 8,362.018 3,216.35 227,637.99 July 227,637.99 5,789.18 4,224.17 1,565.01 12,586.18 4,781.36 223,413.82 Aug. 223,413.82 5,789.18 4,253.21 1,535.97 16,839.39 6,317.33 219,160.61 Sept. 219,160.61 5,789.18 4,282.45 1,506.73 21,121.84 7,824.06 214,878.16 Oct. 214,878.16 5,789.18 4,311.89 1,477.29 25,433.73 9,301.35 210,566.27 Nov. 210,566.27 5,789.18 4,341.54 1,447.64 29,775.27 10,748.99 206,224.73 Dec. 206,224.73 5,789.18 4,371.38 1,417.80 34,146.65 12,166.79 201,853.35 Yr1998 Jan. 201,853.35 5,789.18 4,401.44 1,387.74 38,548.09 13,554.53 197,451.91 Feb. 197,451.91 5,789.18 4,431.7 1,357.48 42,979.79 14,912.01 193,020.21 March 193,020.21 5,789.18 4,462.17 1,327.01 47,441.96 16,239.02 188,558.04 April 188,558.04 5,789.18 4,492.84 1,296.34 51,934.8 17,535.36 184,065.20 Yearly Schedule of Balances and Payments Year Beginning Payments Principal Interest Cumulative Cumulative Ending Balance Principal Interest Balance - ---- ---------- --------- --------- -------- --------- ---------- ---------- Yr. 1998 201,853.35 69,470.16 54,861.00 14,609.00 89,007.76 26,775.84 146,992.00 Yr. 1999 146,992.24 69,470.16 59,562.00 9,908.00 148,569.82 36,683.94 87,430.00 Yr. 2000 87,430.18 69,470.16 64,666.00 4,804.00 213,235.88 41,888.04 22,764.00 Yr. 2001 22,764.12 29,156.72 22,764.00 393.00 236,000.00 41,880.64 0.00
8. respondent agrees and acknowledges that timely compliance with the repayment provisions in Paragraph 7, are in addition to its existing obligation to timely paid monthly rent and additional rent by the twentieth (20th) day of each month. - 7 - a. Current monthly rent payments are: Rent: $18,071.36 Pilot $ 343.00 Heat/Maintenance $ 92.56 Electricity $ 3,000.00 (approximate) 9. Respondent further agrees and acknowledges that all current charges for monthly rent and additional rent in Paragraph 8(a), supra, are to be timely paid without failure, in addition to Respondent's adherence to the enclosed repayment schedule as set forth in Paragraph 7(b), et. seq., and annexed hereto as Exhibit "A". 10. In the event that Respondent fails to timely make any of the payments required under this Stipulation, Petitioner may immediately execute its warrant upon service of a 72-hour notice of eviction. However, if fully paid within the 72-Hour Notice period, Petitioner may not execute the warrant of eviction. 11. All parties to this Stipulation hereby acknowledge and represent that said stipulation's terms and consequences have been read, that same are agreeable to them, and that they concur in its terms and freely agree to be bound by same. 12. This retainer letter agreement is executed by Respondent with the authority and consent of the Board of Directors and Officers of Respondent IEH Corporation. 13. It is specifically understood and agreed by and between the parties that this Stipulation is the result of extensive negotiations between the parties. It is understood and agreed that all parties shall be deemed to have collectively drawn these documents in order to avoid any interference by an court as against the preparer of this document. - 8 - 14. Respondent further represents that it has entered into this Stipulation freely, voluntarily, and knowingly, without pressure, duress or harassment by the Petitioner, or any other person an/or entity, and acknowledges that the Petitioner has entered into this Stipulation in specific reliance upon Respondent's representations. 15. This court shall retain jurisdiction over this matter. 16. 16. This Stipulation may not be modified orally. Dated: New York, New York December , 1997 IEH Corporation NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION Petitioner By: ____________________ By: /s/Daniel P. Kurtz ------------------ Daniel P. Kurtz Executive Vice President GOLDSTEIN & DIGIOIA, LLP LEON I. BEHAR & ASSOCIATES, P.C. Attorneys for Respondent Attorneys for Petitioner 369 Lexington Avenue, 18th Floor 7 Penn Plaza, 14th Floor New York, New York 10017 New York, New York 10001 By: /s/Brian C. Daughney By: Leon I. Behar -------------------- ------------- Brian C. Daughney, Esq. Leon I. Behar, Esq. - 9 - EX-27 2
5 9-MOS MAR-26-1998 DEC-26-1997 79,273 0 836,930 10,062 910,200 1,853,649 5,868,615 4,446,713 3,367,075 1,728,210 0 0 0 1,151,751 (507,473) 3,367,075 3,646,250 3,647,152 2,476,456 2,476,456 980,324 0 86,370 97,002 0 97,002 0 0 0 84,902 .037 0
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