-----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, Dxguc9Qi0janZh7Jg1GKW5fdjDSRSY0OfY7lMgesLGWTG56Y3OnfYa0vvyEVE563 OxFSTKh9YJd8RVfqoXNBLQ== 0000914317-99-000050.txt : 19990209 0000914317-99-000050.hdr.sgml : 19990209 ACCESSION NUMBER: 0000914317-99-000050 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981225 FILED AS OF DATE: 19990208 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: 99523589 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 25, 1998 [ ] 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 4, 1999. IEH CORPORATION CONTENTS Part I - FINANCIAL INFORMATION ITEM 1- FINANICAL STATEMENTS Balance Sheets as of December 25, 1998 (Unaudited) and March 27, 1998 Statement of Operations (Unaudited) for the three and nine months ended December 25, 1998 and December 26, 1997 Statement of Cash Flows (Unaudited) for the nine months ended December 25, 1998 and December 26, 1997 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 25, 1998 and March 27, 1998 Dec. 25 March 27 1998 1998 ---------- ---------- ASSETS CURRENT ASSETS: Cash .......................................................... $ 3,000 $ 19,454 Accounts receivable, less allowances for doubtful accounts of $10,062 at December 25, 1998 and March 27, 1998 ......... 827,860 838,721 Inventories (Note 2) .......................................... 908,494 949,282 Prepaid expenses and other current assets (Note 3) ............ 24,997 38,224 ---------- ---------- Total current assets ................................ 1,764,351 1,845,681 ---------- ---------- PROPERTY, PLANT AND EQUIPMENT, less accumulated depreciation and amortization of $4,710,007 at Dec. 25, 1998 and $4,504,267 at March 27, 1998 .......................... 1,405,870 1,405,625 ---------- ---------- OTHER ASSETS: Prepaid pension cost (Note 8) ............................... 43,949 43,949 Other assets ................................................ 46,320 47,429 ---------- ---------- 90,269 91,378 ---------- ---------- ---------- ---------- Total assets .................................................. $3,260,490 $3,342,684 ========== ==========
See accompanying notes to financial statements
IEH CORPORATION BALANCE SHEETS As of December 25, 1998 and March 27, 1998 Dec. 25 March 27 1998 1998 (Unaudited) (Note 1) ------------ ------------ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts receivable financing .......................................... $ 745,066 $ 656,015 Notes payable, equipment, current portion (Note 7) ..................... 10,198 -- Notes payable, current portion (Note 6) ................................ 59,562 56,000 Loans payable, current portion (Note 5) ................................ 50,190 48,530 Accrued corporate income taxes ......................................... 15,193 15,332 Union pension and health & welfare, current portion (Note 8) ........... 120,000 120,000 Accounts payable ....................................................... 712,143 722,957 Other current liabilities (Note 4) ..................................... 141,672 124,026 ------------ ------------ Total current liabilities .................................... 1,854,024 1,742,860 LONG-TERM LIABILITIES: Pension Plan payable (Note 8) .......................................... 516,966 516,966 Notes payable, equipment, less current portion (Note 7) ................ 45,372 -- Notes payable, less current portion (Note 6) ........................... 87,430 132,558 Loan payable, less current portion (Note 5) ............................ 146,856 184,440 Union pension & health & health & welfare, less current portion (Note 8) 38,827 110,827 ------------ ------------ Total long-term liabilities .................................. 835,451 944,791 ------------ ------------ Total liabilities ............................................ 2,689, 475 2,687,651 ------------ ------------ STOCKHOLDERS' EQUITY: Common stock, $.50 par value; 10,000,000 shares authorized, 2,303,468 shares issued and outstanding at Dec. 25, 1998 and 2,303,502 shares issued and outstanding March 27, 1998 (Note 9) ............................................................ 1,151,734 1,151,751 Capital in excess of par value ......................................... 1,615,891 1,615,874 Retained earnings (Deficit) ............................................ (2,196,610) (2,112,592) ------------ ------------ Total stockholders' equity ................................... 571,015 655,033 ------------ ------------ Total liabilities and stockholders' equity ................... $ 3,260,490 $ 3,342,684 ============ ============
See accompanying notes to financial statements
IEH CORPORATION STATEMENT OF OPERATIONS (Unaudited) Nine Months Ended Three Months Ended ---------------------------- ---------------------------- Dec. 25, Dec. 26, Dec. 25, Dec. 26, 1998 1997 1998 1997 ----------- ----------- ----------- ----------- REVENUE, net sales ................ $ 3,294,571 $ 3,646,250 $ 973,227 $ 1,100,515 COSTS AND EXPENSES Cost of products sold ............. 2,416,580 2,476,456 728,445 787,221 Selling, general and administrative 644,255 777,804 222,283 259,564 Interest expense .................. 99,650 86,370 33,288 33,997 Depreciation and amortization ..... 205,740 209,520 68,580 69,840 ----------- ----------- ----------- ----------- 3,366,225 3,550,150 1,052,596 1,150,622 ----------- ----------- ----------- ----------- OPERATING INCOME (LOSS) ........... (71,654) 96,100 (79,369) (50,107) OTHER INCOME ...................... 236 902 33 243 ----------- ----------- ----------- ----------- INCOME (LOSS) BEFORE INCOME TAXES . (71,418) 97,002 (79,336) (49,864) PROVISION FOR INCOME TAXES ........ 12,600 12,100 4,200 5,200 ----------- ----------- ----------- ----------- NET INCOME (LOSS) ................. $ (84,018) $ 84,902 $ (83,536) $ (55,064) =========== =========== =========== =========== BASIC AND DILUTED EARNINGS (LOSS) PER SHARE ...................... $ (.036) $ .037 $ (.036) $ (.024) =========== =========== =========== =========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (in thousands) 2,303 2,304 2,303 2,304 =========== =========== =========== ===========
See accompanying notes to financial statements
IEH CORPORATION STATEMENT OF CASH FLOWS Increase (Decrease) in Cash For the Nine Months Ended December 25, 1998 and December 26, 1997 (Unaudited) Dec. 25, Dec. 26, 1998 1997 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) .............................................. $ (84,018) $ 84,902 --------- --------- Adjustments to reconcile net income to net cash used in operating activities Depreciation and amortization .................................. 205,740 209,520 Changes in assets and liabilities: (Increase) decrease in accounts receivable ..................... 10,861 (174,995) (Increase) decrease inventories ................................ 40,788 196,900 (Increase) decrease in prepaid expenses and other current assets 13,227 23,986 (Increase) decrease in other receivables ....................... -- 21,827 (Increase) decrease in other assets ............................ 1,109 223 (Decrease) increase in accounts payable ........................ (10,805) (331,484) (Decrease) increase in other current liabilities ............... 17,646 27,571 Increase in accrued corporate income taxes ..................... (139) 7,870 (Decrease) in due to union pension & health & welfare .......... (72,000) (60,727) --------- --------- Total adjustments .................................... 206,427 (79,309) --------- --------- NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 122,409 5,593 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of fixed assets ...................................... (205,977) (150,587) --------- --------- NET CASH USED IN INVESTING ACTIVITIES .......................... (205,977) (150,587) --------- ---------
See accompanying notes to financial statements
IEH CORPORATION STATEMENT OF CASH FLOWS Increase (Decrease) in Cash For the Nine Months Ended December 25, 1998 and December 26, 1997 (Unaudited) Dec. 25, Dec. 26, 1998 1997 --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Retirement of common shares ....................... $ (17) $ -- Principal payments on notes payable ............... -- -- Increase in notes payable ......................... 14,004 200,064 Proceeds from accounts receivable financing ....... 89,051 50,171 Principal payments on loan payable ................ (35,924) (41,242) --------- --------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 67,114 208,993 --------- --------- INCREASE (DECREASE) IN CASH ....................... (16,454) 63,999 CASH, beginning of period ......................... 19,454 15,274 --------- --------- CASH, end of period ............................... $ 3,000 $ 79,273 ========= ========= SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION, cash paid during the nine months for: Interest ..................................... $ 99,650 $ 86,370 ========= ========= Income Taxes ................................. $ 12,600 $ 12,100 ========= =========
See accompanying notes to financial statements IEH CORPORATION NOTES TO FINANCIAL STATEMENTS (Unaudited) Note 1 - FINANCIAL STATEMENTS: The accompanying financial statements of IEH Corporation ("The Company") for the nine months ended December 25, 1998 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 25, 1998. 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 27, 1998 as filed with the Securities and Exchange Commission. The balance sheet at March 27, 1998 has been taken from the audited financial statements of that date. Note 2 - INVENTORIES: Inventories are comprised of the following: Dec. 25 March 27, 1998 1998 ----------- ----------- Raw materials $ 686,809 $ 651,975 Work in progress 104,840 99,523 Finished goods 116,845 197,784 ----------- ----------- $ 908,494 $ 949,282 =========== =========== 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 25, 1998 was $37,800. At March 27, 1998, the balance of this reserve was $50,400. Inventories at December 25, 1998 and March 27, 1998 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: Dec. 25 March 27, 1998 1998 ------------ ------------ Prepaid insurance $ 20,565 $ 34,356 Other current assets 4,432 3,868 ------------ ------------ $ 24,997 $ 38,224 ============ ============ Note 4 - OTHER CURRENT LIABILITIES: Other current liabilities are comprised of the following:
Dec. 25 March 27, 1998 1998 -------- --------- Payroll and vacation accruals $ -- $ 28,300 Sales commissions ........... 14,456 9,574 Pension Plan payable ........ 65,489 65,489 Other ....................... 61,727 20,663 -------- -------- $141,672 $124,026 ======== ========
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% annum. The balance remaining at December 25, 1998 was $197,046. Aggregate future principal payments are as follows: Fiscal Year Ending March: 1999 $ 50,190 2000 53,217 2001 57,634 2002 36,005 --------- $ 197,046 ========= IEH CORPORATION NOTES TO FINANCIAL STATEMENTS (Unaudited) In April 1997, the Company was informed by the UDC that the loan was sold and conveyed to WAMCO XXIV, Ltd. All of the terms and conditions of the loan remained in effect. As of December 25, 1998, 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. Note 5 - LOAN PAYABLE (continued) The Company reported tangible net worth of $571,015. The ratio of current assets to current liabilities was .95 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 XXVI, 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 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 note bears interest at the rate of 8.25% per annum. The balance remaining at December 25, 1998 was $146,992. Note 7 - NOTES PAYABLE EQUIPMENT: The Company financed the acquisition of new computer equipment and software with notes payable. The notes are payable over a sixty month period. The balance remaining at December 25, amounted to $55,570. Aggregate future principal payments are as follows: 1999 $ 10,198 2000 10,198 2001 10,198 2002 10,198 2003 10,198 Thereafter 4,580 ----------- $ 55,570 ========== IEH CORPORATION NOTES TO FINANCIAL STATEMENTS (Unaudited) Note 8 - 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 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 $28,186 for the nine months ended December 25, 1998. 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 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 25, 1998, 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 $3,638. The total amount due of $158,827 is reported on the accompanying balance sheet in two components; $120,000 reported as a current liability and $38,827 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 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 8 - COMMITMENTS:(continued) At December 25, 1998 and March 28, 1998, $65,489 of the pension liability is included in other current liabilities, with the balance of $516,966 shown as 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. In August 1998, the Company was notified by the PBGC that the Company is liable to the PBGC for the following amounts as of September 1, 1998: - $456,418 representing the amount of unfunded benefit liabilities of the Plan - $242,097 representing funding liability - $ 2,931 representing the premium liability The total amount claimed by the PBGC amounts to $701,446. The amount claimed is being contested by the Company and the PBGC has granted the Company an extension of time until February 22, 1999 in which to file an appeal. The Company has retained outside counsel in order to respond to this claim. On December 1, 1998, the Company amended its lease on its premises by surrendering a portion of its rented premises back to its landlord. Accordingly, the base monthly rent was reduced to $9,397.11 or $112,765.29 per annum through the conclusion of the lease which ends August 23, 2001. Note 9 - CHANGES IN STOCKHOLDERS' EQUITY: The Company retired 34 shares of its issued and outstanding common stock during the quarter ended September 25, 1998. Retained earnings (deficit) increased by $84,018, which represents the net loss for the nine months ended December 25, 1998. Note 10 - YEAR 2000 COMPUTER ISSUE: The Company does not believe that the impact of the year 2000 computer issue will have a significant impact on its operations or financial position. The Company has allocated approximately $100,000 to upgrade its computer operations to obviate any potential problems that might arise as a result of the impact of the year 2000. To date the Company has acquired new computer equipment at a cost of $65,847. However, if internal systems do not correctly recognize date information when the year changes to 2000, there could be an adverse impact on the Company's operations. Furthermore, there can be no assurances that another entity's failure to ensure year 2000 capability would not have an adverse effect on the Company. IEH CORPORATION NOTES TO FINANICAL STATEMENTS (Unaudited) 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, the percentages for certain items reflected in the financial data as such items bear to the revenues of the Company:
Nine Months Ended ----------------------- Dec. 25 Dec. 26, 1998 1997 -------- -------- Operating Revenues (in thousands) ........................ $ 3,295 $ 3,646 Operating Expenses: (as a percentage of operating revenues Cost of Products Sold .................................... 73.4% 67.9% Selling, General and Administrative ...................... 19.6% 21.2% Interest Expense ......................................... 3.0% 2.5% Depreciation and Amortization ............................ 6.2% 5.8% -------- -------- Total Costs and Expenses ....................... 102.2% 97.4% ======== ======== Operating Income (Loss) .................................. (2.2)% 2.6% ======== ======== Other Income ............................................. -- -- -------- -------- Income (Loss) Before Income Taxes ........................ (2.2)% 2.6% ======== ======== Income Taxes ............................................. .3% .3% -------- -------- Net Income ............................................... (2.5)% 2.3% ======== ========
IEH CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS COMPARATIVE ANALYSIS: Operating revenues for the nine months ended December 25, 1998 amounted to $3,294,571, reflecting a 9.6% decrease versus the comparative nine months operating revenues of $3,646,250. The decrease is a direct result of management's effort to redirect its dependence on government and military sales to developing new market sales in the commercial electronic sector. Cost of products sold amounted to $2,416,580 for the nine months ended December 25, 1998 or 73.4% of operating revenues. This reflected a decrease of $59,876 or 2.4% in the cost of products sold of $2,476,456 for the nine months ended December 26, 1997. This decrease is primarily due to reduced production costs inherent in producing new products. Cost of products sold increased as a percentage of revenues in the comparative periods. Selling, general and administrative expenses were $644,255 or 19.6% of revenues compared to $777,804 or 21.2% of revenues for the comparable nine month period ended December 26, 1997. This reflected a decrease of 17.2% and reflects management's efforts to better control expenses. Interest expense was $99,650 or 3.0% of revenues as compared to $86,370 or 2.5% of revenues in the nine month period ended December 26, 1997. This increase of 15.4% reflects the increase in borrowing by the Company in the current fiscal period. Depreciation and amortization of $205,740 or 6.2% of revenues was reported for the nine month period ended December 25, 1998. This reflects a decrease of 0.2% from the comparable nine month period ended December 26, 1997 of $209,520 or 5.8% of revenues. The decrease is a result of decreased depreciation levels on fixed assets during the nine month period ended December 25, 1998. The Company reported a net loss of $84,018 for the nine months ended December 25, 1998, representing basic loss per share of $.036 as compared to basic income of $84,902 or $.037 per common share for the nine months ended December 26, 1997. The resultant decrease in net income can be attributed to reduced sales in the commercial sector in the current nine month period ending December 25, 1998. IEH CORPORATION 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:
Three Months Ended ---------------------- Dec. 25, Dec. 26, 1998 1997 ------ --------- Operating Revenues (in thousands) ....................... $ 973 $ 1,101 Operating Expenses: (as a percentage of operating revenues) Cost of Products Sold ..................................... 74.9% 71.5% Selling, General and Administrative ....................... 22.9% 23.7% Interest Expense .......................................... 3.4% 3.1% Depreciation and Amortization ............................. 7.0% 6.3% ------ -------- Total Costs and Expenses ........................ 108.2% 104.6% Operating Income (loss) ................................... (8.2)% (4.6)% Other Income .............................................. -- -- ------ -------- Income (loss) before Income Taxes ......................... (8.2)% (4.6)% Income Taxes .............................................. .4% .4% ------ -------- Net Income (loss) ......................................... (8.6)% (5.0)%
COMPARATIVE ANALYSIS Operating revenues for the three months ended December 25, 1998 amounted to $973,227, reflecting a 11.6% decrease versus the comparative three months operating revenues of $1,100,515. The decrease is a direct result of management's to redirect its dependence on government and military sales to developing new market sales in the commercial electronic sector. Cost of products sold amounted to $728,445 for the three months ended December 25, 1998 or 74.9% of operating revenues. This reflected a decrease of $58,776 or 7.5% of the cost of products sold of $787,221 for the three months ended December 26, 1997. This decrease is primarily due to reduced production costs inherent in producing new products. Costs of products sold increased as a percentage of revenues in the comparative periods. Selling, general and administrative expenses were $222,283 or 22.9% of revenues compared to $259,564 or 23.7% of revenues for the comparable three month period ended December 26, 1997. This reflected a decrease of 14.3% and reflects management's efforts to better control expenses. Interest expense was $33,288 or 3.4% of revenues as compared to $33,997 or 3.1% of revenues in the three month period ended December 26, 1997. This decrease of 2.1% reflects this decrease in borrowing by the Company in the current fiscal period. Depreciation and amortization of $68,580 or 7.0% of revenues was reported for the three month period ended December 25, 1998. This reflects a decrease of .02% from the comparable three month period ended December 26, 1997 of $69,840 or 6.3% of revenues. The decrease is a result of decreased depreciation levels on fixed assets during the three month period ended December 25, 1998. The Company reported a net loss of $83,536 for the three months ended December 25, 1998, representing basic loss per common share of $.36 as compared to a basic loss of $55,064 or $.024 per common share for the three months ended December 25, 1998. The resultant decrease in net income can be attributed to reduced sales in the commercial sector in the current three month period ending December 25, 1998. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit 27. Financial Data Schedule (b) Reports on Form 8-K during Quarter None SIGNATURES In accordance with the requirements of the Exchange Act, the Registrant has duly cause this Report on Form 10QSB to be signed on its behalf by the undersigned, thereunto duly authorized. IEH CORPORATION (Registrant) February 5, 1999 /s/Michael Offerman ------------------- Michael Offerman President February 5, 1999 /s/Robert Knoth --------------- Robert Knoth Chief Financial Officer EX-27 2
5 3-MOS MAR-26-1999 DEC-25-1998 3,000 0 827,860 10,062 908,494 1,764,351 6,115,877 205,740 3,260,490 1,854,024 0 0 0 1,151,734 (580,719) 3,260,490 3,294,571 3,294,807 2,416,580 2,416,580 0 0 99,650 (71,418) 0 (71,418) 0 0 0 (84,018) (.036) 0
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