iec-20200327

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 27, 2020

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ____ to ____

Commission File Number 001-34376

IEC ELECTRONICS CORP.

(Exact name of registrant as specified in its charter)


Delaware						13-3458955
(State or other jurisdiction of						(I.R.S. Employer Identification No.)
incorporation or organization)

105 Norton Street, Newark, New York 14513

(Address of Principal Executive Offices) (Zip Code)

315-331-7742

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	IEC	Nasdaq Global Market

Indicate by check mark whether the registrant: (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 ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	x	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the

Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Common Stock, $0.01 par value – 10,478,992 shares as of May 1, 2020

TABLE OF CONTENTS


Part I	FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements and Notes to Condensed Consolidated Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	37
Part II	OTHER INFORMATION
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Item 6.	Exhibits	40
SIGNATURES			41

Part I FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

IEC ELECTRONICS CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

MARCH 27, 2020 and SEPTEMBER 30, 2019

(unaudited; in thousands, except share and per share data)


	March 27, 2020		September 30, 2019
ASSETS
Current assets:
Cash	$	—	$	—
Accounts receivable, net of allowance	26,539		27,618
Unbilled contract revenue	10,601		9,529
Inventories	45,053		44,267
Federal income tax receivable	1,034		517
Other current assets	1,721		1,454
Total current assets	84,948		83,385

Property, plant and equipment, net	19,232		19,433
Deferred income taxes	5,953		7,154
Operating lease right-of-use assets, net of accumulated amortization	275		—
Other long-term assets	976		860
Total assets	$	111,384	$	110,832

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	1,371	$	1,371
Current portion of operating lease obligation	59		—
Current portion of finance lease obligation	419		338
Accounts payable	20,688		23,690
Accrued payroll and related expenses	1,486		3,174
Other accrued expenses	485		668
Customer deposits	15,802		13,229
Total current liabilities	40,310		42,470

Long-term debt	28,182		28,910
Long-term operating lease obligation	215		—
Long-term finance lease obligation	6,837		6,685
Other long-term liabilities	1,465		1,527
Total liabilities	77,009		79,592
Commitments and contingencies (Note 11)
STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 par value:
500,000 shares authorized; none issued or outstanding	—		—
Common stock, $0.01 par value:
Authorized: 50,000,000 shares
Issued: 11,447,604 and 11,394,036 shares, respectively
Outstanding: 10,392,116 and 10,338,548 shares, respectively	103		103


Additional paid-in capital	48,424		48,001
Accumulated deficit	(12,563)		(15,275)
Treasury stock, at cost: 1,055,488 shares	(1,589)		(1,589)
Total stockholders’ equity	34,375		31,240
Total liabilities and stockholders’ equity	$	111,384	$	110,832

The accompanying notes are an integral part of these condensed consolidated financial statements.

IEC ELECTRONICS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

THREE and SIX MONTHS ENDED MARCH 27, 2020 and MARCH 29, 2019

(unaudited; in thousands, except share and per share data)


	Three Months Ended						Six Months Ended
	March 27, 2020		March 29, 2019		March 27, 2020		March 29, 2019

Net sales	$	44,171	$	37,294	$	88,905	$	72,735
Cost of sales	38,668		32,708		78,163		63,090
Gross profit	5,503		4,586		10,742		9,645

Selling and administrative expenses	3,217		3,328		6,516		6,680
Operating income	2,286		1,258		4,226		2,965

Interest and financing expense	396		385		811		708

Income before income taxes	1,890		873		3,415		2,257

Income tax expense	367		203		703		515

Net income	$	1,523	$	670	$	2,712	$	1,742

Net income per common share:
Basic	$	0.15	$	0.06	$	0.26	$	0.17
Diluted	$	0.14	$	0.06	$	0.25	$	0.16

Weighted average number of shares outstanding:
Basic	10,393,461		10,286,876		10,379,846		10,274,772
Diluted	10,703,112		10,678,058		10,666,001		10,574,076

The accompanying notes are an integral part of these condensed consolidated financial statements.

IEC ELECTRONICS CORP.

CONDENSED CONSOLIDATED STATEMENT of CHANGES in STOCKHOLDERS’ EQUITY

SIX MONTHS ENDED MARCH 27, 2020

(unaudited; in thousands, except share data)


	Number of Shares Outstanding	Common Stock, par $0.01		Additional Paid-In Capital		Accumulated Deficit		Treasury Stock, at cost		Total Stockholders’ Equity

Balances, September 30, 2019	10,338,548	$	103	$	48,001	$	(15,275)	$	(1,589)	$	31,240

Net income	—	—		—		1,189		—		1,189
Stock-based compensation	—	—		152				—		152
Restricted stock vested, net of shares withheld for payment of taxes	6,367	—		(24)		—		—		(24)

Exercise of stock options, net of shares surrendered	24,000	—		130		—		—		130
Employee stock plan purchases	6,449	—		40		—		—		40

Balances, December 27, 2019	10,375,364	$	103	$	48,299	$	(14,086)	$	(1,589)	$	32,727

Net income	—	—		—		1,523		—		1,523
Stock-based compensation	—	—		185				—		185
Restricted stock vested, net of shares withheld for payment of taxes	4,663	—		(33)		—		—		(33)
Restricted stock units vested, net of shares withheld for payment of taxes	10,089	—		(35)		—		—		(35)
Exercise of stock options, net of shares surrendered	2,000	—		8		—		—		8


Balances, March 27, 2020	10,392,116	$	103	$	48,424	$	(12,563)	$	(1,589)	$	34,375

The accompanying notes are an integral part of these condensed consolidated financial statements.

IEC ELECTRONICS CORP.

CONDENSED CONSOLIDATED STATEMENT of CHANGES in STOCKHOLDERS’ EQUITY

SIX MONTHS ENDED MARCH 29, 2019

(unaudited; in thousands, except share data)


	Number of Shares Outstanding	Common Stock, par $0.01		Additional Paid-In Capital		Accumulated Deficit		Treasury Stock, at cost		Total Stockholders’ Equity

Balances, September 30, 2018	10,248,905	$	102	$	47,326	$	(20,463)	$	(1,589)	$	25,376

Impact of adoption of ASC 606, net of taxes	—	—		—		441		—		441
Net income	—	—		—		1,072		—		1,072
Stock-based compensation	—	—		146				—		146
Restricted stock vested, net of shares withheld for payment of taxes	4,439	—		—		—		—		—
Exercise of stock options, net of shares surrendered	2,553	—		—		—		—		—
Employee stock plan purchases	5,674	—		20		—		—		20

Balances, December 28, 2018	10,261,571	$	102	$	47,492	$	(18,950)	$	(1,589)	$	27,055

Net income	—	—		—		670		—		670
Stock-based compensation	—	—		152				—		152
Restricted stock vested, net of shares withheld for payment of taxes	38,538	1		—		—		—		1
Exercise of stock options, net of shares surrendered	11,654	—		51		—		—		51


Balances, March 29, 2019	10,311,763	$	103	$	47,695	$	(18,280)	$	(1,589)	$	27,929

The accompanying notes are an integral part of these condensed consolidated financial statements.

IEC ELECTRONICS CORP.

CONDENSED CONSOLIDATED STATEMENTS of CASH FLOWS

SIX MONTHS ENDED MARCH 27, 2020 and MARCH 29, 2019

(unaudited; in thousands)


	Six Months Ended
	March 27, 2020		March 29, 2019

CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	2,712	$	1,742
Non-cash adjustments:
Stock-based compensation	337		298
Depreciation and amortization	1,587		1,290

Change in reserve for doubtful accounts	48		(39)
Change in inventory reserve and warranty reserve	1,296		89
Deferred tax expense	1,201		511
Amortization of deferred gain	(57)		(56)
Changes in operating assets and liabilities:
Accounts receivable	1,031		(2,615)
Unbilled contract revenue	(1,072)		(1,710)
Inventories	(2,055)		(8,547)
Federal income tax receivable	(517)		—
Other current assets	(267)		(53)
Other long-term assets	(116)		(253)
Accounts payable	(2,771)		(1,362)
Change in book overdraft position	(231)		(922)
Accrued expenses	(1,898)		220
Customer deposits	2,573		2,631
Net change in lease right-of-use assets and liabilities	(1)		—
Other long-term liabilities	—		(75)
Net cash flows provided by/(used in) operating activities	1,800		(8,851)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment	(1,351)		(805)


Net cash flows used in investing activities	(1,351)		(805)

CASH FLOWS FROM FINANCING ACTIVITIES
Advances from revolving credit facility	36,680		39,307
Repayments of revolving credit facility	(36,763)		(29,388)
Borrowings under other loan agreements	—		391
Repayments under other loan agreements	(685)		(568)
Payments under finance lease	(182)		(152)
Proceeds received from lease financing obligation	415		—
Debt issuance costs	—		(6)
Proceeds from exercise of stock options	138		52
Proceeds from employee stock plan purchases	40		20
Cash paid for taxes upon vesting of restricted stock	(92)		—
Net cash flows (used in)/provided by financing activities	(449)		9,656

Net cash change for the period	—		—
Cash, beginning of period	—		—
Cash, end of period	$	—	$	—

Supplemental cash flow information
Interest paid	$	779	$	753
Income taxes paid	20		—

The accompanying notes are an integral part of these condensed consolidated financial statements.

IEC ELECTRONICS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1—OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Our Business

IEC Electronics Corp. (“IEC,” or the “Company”) provides electronic manufacturing services (“EMS”) to advanced technology companies that produce life-saving and mission critical products for the medical, industrial, aerospace and defense sectors. The Company specializes in delivering technical solutions for the custom manufacture of complex full system assemblies by providing on-site analytical testing laboratories, custom design and test engineering services combined with a broad array of manufacturing services encompassing electronics, interconnect solutions, and precision metalworking. As a full service EMS provider, IEC holds all appropriate certifications for the market sectors it supports including ISO 9001:2015, AS9100D, and ISO 13485, and we are Nadcap accredited. IEC is headquartered in Newark, NY and also has operations in Rochester, NY and Albuquerque, NM. Additional information about IEC can be found on its web site at www.iec-electronics.com. The contents of this website are not incorporated by reference into this quarterly report.

Generally Accepted Accounting Principles

IEC’s financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), as set forth in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”).

Fiscal Calendar

The Company’s fiscal year ends on September 30 and the first three quarters generally end on the Friday closest to the last day of the calendar quarter. For the fiscal year ending September 30, 2020 (“fiscal 2020”), the fiscal quarters end on December 27, 2019, March 27, 2020 and June 26, 2020. For the fiscal year ended September 30, 2019 (“fiscal 2019”), the fiscal quarters ended on December 28, 2018, March 29, 2019 and June 28, 2019.

Consolidation

The consolidated financial statements include the accounts of IEC and its wholly-owned subsidiaries: IEC Electronics Corp-Albuquerque (“Albuquerque”); IEC Analysis & Testing Laboratory, LLC (“ATL”); and IEC California Holdings, Inc., which was dissolved as of September 18, 2019. The Rochester unit operates as a division of IEC. All intercompany transactions and accounts are eliminated in consolidation.

Unaudited Financial Statements

The accompanying unaudited condensed consolidated financial statements for the three and six months ended March 27, 2020 and March 29, 2019 have been prepared without an audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and do not include certain of the information the footnotes require by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, required for a fair presentation of the information have been made. The accompanying financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2019.

Cash

The Company’s cash represents deposit accounts with Manufacturers and Traders Trust Company (“M&T Bank”), a banking corporation headquartered in Buffalo, NY. The Company’s cash management system provides for the funding of the disbursement accounts on a daily basis as checks are presented for payment. Under this system, outstanding checks in excess of the bank balance create a book overdraft. Book overdrafts are presented in accounts payable in the condensed consolidated balance sheets. Book overdrafts were $0.1 million and $0.3 million as of March 27, 2020 and September 30, 2019, respectively. Changes in the book overdrafts are presented within net cash flows provided by operating activities within the condensed consolidated statements of cash flows.

Allowance for Doubtful Accounts

The Company establishes an allowance for doubtful accounts receivable based on the age of outstanding invoices and management’s evaluation of collectability. Accounts are written off after all reasonable collection efforts have been exhausted and management concludes that the likelihood of collection is remote.

Inventory Valuation

Inventories are stated at the lower of cost or net realizable value under the first-in, first-out method. The Company regularly assesses slow-moving, excess and obsolete inventory and maintains balance sheet reserves in amounts required to reduce the recorded value of inventory to the lower of cost or net realizable value.

Property, Plant and Equipment

Property, plant and equipment (“PP&E”) are stated at cost and are depreciated over various estimated useful lives using the straight-line method. Maintenance and repairs are charged to expense as incurred, while renewals and improvements are capitalized. At the time of retirement or other disposition of PP&E, cost and accumulated depreciation are removed from the accounts and any gain or loss is recorded in earnings.

Depreciable lives generally used for PP&E are presented in the table below. Leasehold improvements are amortized over the shorter of the lease term or estimated useful life of the improvement.


PP&E Lives						Estimated Useful Lives
						(years)
Land improvements						10
Buildings and improvements						5 to 40
Machinery and equipment						3 to 10
Furniture and fixtures						3 to 7
Software						3 to 10

Reviewing Long-Lived Assets for Potential Impairment

ASC 360 (Property, Plant and Equipment) requires the Company to test long-lived assets (PP&E and definite lived assets) for recoverability whenever events or circumstances indicate that the carrying amount may not be recoverable. If carrying value exceeds undiscounted future cash flows attributable to an asset, it is considered impaired and the excess of carrying value over fair value must be charged to earnings. No impairment charges were recorded by IEC for long-lived assets during either of the three and six months ended March 27, 2020 and March 29, 2019.

Legal Contingencies

When legal proceedings are brought or claims are made against the Company and the outcome is uncertain, ASC 450 (Contingencies) requires the Company to determine whether it is probable that an asset has been impaired or a liability has been incurred. If such impairment or liability is probable and the amount of loss can be reasonably estimated, the loss must be charged to earnings.

When it is considered probable that a loss has been incurred but the amount of loss cannot be estimated, disclosure but not accrual of the probable loss is required. Disclosure of a loss contingency is also required when it is reasonably possible, but not probable, that a loss has been incurred.

Legal Expense Accrual

The Company records legal expenses as they are incurred, based on invoices received or estimates provided by legal counsel. Future estimated legal expenses are not recorded until incurred.

Customer Deposits

Customer deposits represent amounts invoiced to customers for which the revenue has not yet been earned and therefore represent a commitment for the Company to deliver goods or services in the future. Deposits are generally short term in nature and are recognized as revenue when earned.

Fair Value Measurements

Under ASC 825 (Financial Instruments), the Company is required to disclose the fair value of financial instruments for which it is practicable to estimate value. The Company’s financial instruments consist of cash, accounts receivable, accounts payable, accrued liabilities and borrowings. IEC believes that recorded value approximates fair value for all cash, accounts receivable, accounts payable, accrued liabilities and borrowings.

ASC 820 (Fair Value Measurements and Disclosures) defines fair value, establishes a framework for measurement, and prescribes related disclosures. ASC 820 defines fair value as the price that would be received upon sale of an asset or would be paid to transfer a liability in an orderly transaction. Inputs used to measure fair value are categorized under the following hierarchy:

Level 1: Quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date.

Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations in which all significant inputs are observable market data.

Level 3: Model-derived valuations in which one or more significant inputs are unobservable.

The Company deems a transfer between levels of the fair value hierarchy to have occurred at the beginning of the reporting period. There were no such transfers during each of the three and six months ended March 27, 2020 and March 29, 2019.

Stock-Based Compensation

ASC 718 (Stock Compensation) requires that compensation expense be recognized for equity awards based on fair value as of the date of grant. For stock options, the Company uses the Black-Scholes pricing model to estimate grant date fair value. Costs associated with stock awards are recorded over requisite service periods, generally the vesting period. If vesting is contingent on the achievement of performance objectives, fair value is accrued over the period the objectives are expected to be achieved only if it is considered probable that the objectives will be achieved. The Company also has an employee stock purchase plan (“ESPP”) that provides for the purchase of Company common stock at a discounted stock purchase price.

Income Taxes and Deferred Taxes

ASC 740 (Income Taxes) requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns, but not in both. Deferred tax assets are also established for tax benefits associated with tax loss and tax credit carryforwards. Such deferred tax balances reflect tax rates that are scheduled to be in effect, based on currently enacted legislation, in the years the book/tax differences reverse and tax loss and tax credit carryforwards are expected to be realized. An allowance is established for any deferred tax asset for which realization is not likely.

ASC 740 also prescribes the manner in which a company measures, recognizes, presents and discloses in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the position will be sustained following examination by taxing authorities, based on technical merits of the position. The Company believes that it has no material uncertain tax positions.

Any interest incurred is reported as interest expense. Any penalties incurred are reported as tax expense. The Company’s income tax filings are subject to audit by various tax jurisdictions and current open years are the fiscal year ended September 30, 2014 through fiscal year ended September 30, 2018.

Dividends

IEC does not pay dividends on its common stock as it is the Company’s current policy to retain earnings for use in the business. Furthermore, the Company’s Fifth Amended and Restated Credit Facility Agreement, as amended, with M&T Bank includes certain restrictions on paying cash dividends, as more fully described in Note 6—Credit Facilities.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses and the disclosure of contingent assets and liabilities. Significant items subject to such estimates include: excess and obsolete inventory reserve, warranty reserves, the valuation of deferred income tax assets and revenue recognition related to the accounts for over time contracts. Actual results may differ from management’s estimates.

Statements of Cash Flows

The Company presents operating cash flows using the indirect method of reporting under which non-cash income and expense items are removed from net income.

Segments

The Company’s results of operations for the three and six months ended March 27, 2020 and March 29, 2019 represent a single operating and reporting segment, referred to as contract manufacturing within the EMS industry. The Company strategically directs production between its various manufacturing facilities based on a number of considerations to best meet its customers’ requirements. The Company shares resources for sales, marketing, engineering, supply chain, information services, human resources, payroll and corporate accounting functions. Consolidated financial information is available that is evaluated regularly by the chief operating decision maker in assessing performance and allocating resources. The Company’s operations as a whole reflect the level at which the business is managed and how the Company’s chief operating decision maker assesses performance internally.

Leases

At contract inception, the Company determines if the new contractual arrangement is a lease or contains a leasing arrangement. If a contract contains a lease, the Company evaluates whether it should be classified as an operating lease or a finance lease. Upon modification of the contract, the Company will reassess to determine if a contract is or contains a leasing arrangement.

The Company records lease liabilities based on the future estimated cash payments discounted over the lease term, defined as the non-cancellable time period of the lease, together with all the following:

•Periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option; and

•Periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option.

Leases may also include options to terminate the arrangement or options to purchase the underlying lease property. Lease components provide the Company with the right to use an identified asset, which consist of real estate properties and equipment. Non-lease components consist primarily of maintenance services.

As an implicit discount rate is not readily available in the Company’s lease agreements, the Company uses its estimated secured incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future lease payments. For certain leases with original terms of twelve months or less, the Company recognizes lease expense as incurred and does not recognize any lease liabilities. Short-term and long-term portions of operating lease liabilities are classified as other current liabilities and other long-term liabilities, respectively.

A right-of-use (“ROU”) asset is measured as the amount of the lease liability with adjustments, if applicable, for lease prepayments made prior to or at lease commencement, initial direct costs incurred by the Company to implement the lease and lease incentives. ROU assets are classified as other long-term assets, on the Company’s condensed consolidated balance sheets. The Company evaluates the carrying value of ROU assets if there are indicators of potential impairment, and performs the analysis concurrent with the review of the recoverability of the related asset group. If the carrying value of the asset group is determined to not be fully recoverable and is in excess of its estimated fair value, the Company will record the impairment loss in its condensed consolidated statements of operations. The Company did not recognize an impairment loss during the three and six months ended March 27, 2020.

Fixed lease expense payments are recognized on a straight-line basis over the lease term. Variable lease payments vary because of changes in facts or circumstances occurring after the commencement date, other than the passage of time, and are often due to changes in an external market rate or the value of an index (e.g. Consumer Price Index). The Company did not incur variable lease payments during the three and six months ended March 27, 2020.

Recently Adopted Accounting Standards

FASB ASU 2016-02, “Leases” (Topic 842) was issued in February 2016. The guidance was effective for the Company beginning with the first quarter of fiscal 2020. As a result of this adoption, the following accounting policies were implemented or changed.

The Company elected the optional transition method to initially apply the new lease standard at the adoption date and not adjust its comparative period consolidated financial statements. The Company has elected the package of three practical expedients, which permits the Company not to reassess prior conclusions about lease identification, lease classification and initial direct costs. The Company has not elected the use-of-hindsight or the practical expedient in determining lease term or impairment of ROU assets. In addition, the Company has elected a short-term lease exemption policy that permits the Company to not apply the recognition requirements of the new lease standard to leases with a term of 12 months or less. The Company has also elected an accounting policy to not separate lease and non-lease components for certain classes of leases.

Adoption of Topic 842 resulted in recognition of additional net lease assets of approximately $0.3 million and net lease liabilities of approximately $0.3 million as of October 1, 2019 based on the present value of remaining minimum rental payments and corresponding ROU assets based upon the operating lease liabilities. The adoption did not impact our beginning stockholders’ equity and did not have a material impact on the condensed consolidated statements of operations or cash flows.

NOTE 2—REVENUE RECOGNITION

ASC 606: Revenue from Contracts with Customers

Satisfaction of Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC 606. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Many of the Company's contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct. The Company primarily provides contract manufacturing services to its customers. The customer provides a design, the Company procures materials and manufactures to that design and ships the product to the customer. Revenue is derived primarily from the manufacturing of these electronics components that are built to customer specifications.

The Company's performance obligations are satisfied at a point in time or over time as work progresses. Revenue from goods and services transferred to customers at a point in time accounted for 47.4% and 49.9% of the Company's revenue for the three and six months ended March 27, 2020, respectively. Revenue from goods and services transferred to customers at a point in time accounted for 52.4% and 50.0% of the Company's revenue for the three and six months ended March 29, 2019, respectively. Revenue on these contracts is recognized when obligations under the terms of the customer contract are satisfied; generally this occurs with the transfer of control upon shipment. If there is no enforceable right to payment for work completed to date, or the Company does not recapture costs incurred plus an applicable margin, then the Company records revenue upon shipment to the customer.

Revenue from goods and services transferred to customers over time accounted for 52.6% and 50.1% of our revenue for the three and six months ended March 27, 2020, respectively. Revenue from goods and services transferred to customers over time accounted for 47.6% and 50.0% of our revenue for the three and six months ended March 29, 2019, respectively. For revenue recognized over time, the Company uses an input measure to determine progress towards completion. Under this method, sales and gross profit are recognized as work is performed generally based on the relationship between the actual costs incurred and the total estimated costs at completion. If the Company has an enforceable right to payment for work completed to date, with a recapture of costs incurred plus an applicable margin, and the goods do not have an alternative future use once the manufacturing process has commenced, then the Company records an unbilled revenue associated with non-cancellable customer orders.

The Company derives revenue from engineering and design services. Service revenue is generally recognized once the service has been rendered. For material management arrangements, revenue is generally recognized as services are rendered. Under such arrangements, some or all of the following services may be provided: design, bid, procurement, testing, storage or other activities relating to materials the customer expects to incorporate into products that it manufactures. Value-added support services revenue, including material management and repair work revenue, amounted to less than 2% of total revenue in each of the three and six months ended March 27, 2020 and March 29, 2019.

Returns and Discounts

The Company does not offer its customers a right of return. Rather, the Company warrants that each unit received by the customer will meet the agreed upon technical and quality specifications and requirements. Only when the delivered units do not meet these requirements can the customer return the non-compliant units as a corrective action under the warranty. The remedy offered to the customer is repair of the returned units or replacement if repair is not viable. Accordingly, the Company records a warranty reserve and any warranty activities are not considered to be a separate performance obligation. Historically, warranty reserves have not been material.

Provisions for discounts, allowances, estimated returns and other adjustments are recorded in the period the related sales are recognized.

Shipping and Handling Costs

Amounts billed to customers for shipping and handling activities after the customer obtains control are treated as a promised service performance obligation and recorded in net sales in the accompanying condensed consolidated statements of operations. Shipping and handling costs incurred by the Company for the delivery of goods to customers are considered a cost to fulfill the contract and are included in cost of sales in the accompanying condensed consolidated statements of operations.

Contract Assets

Contract assets consist of unbilled contract amounts resulting from sales under contracts when the revenue recognized exceeds the amount billed to the customer.

Practical Expedients and Exemptions

The Company generally expenses incremental costs of obtaining a contract when incurred because the amortization period would be less than one year. These costs primarily relate to sales commissions and are recorded in selling and administrative expense in the condensed consolidated statements of operations.

The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.

Disaggregated Revenue

The tables below show net sales from contracts with customers by market sector. See additional information regarding market sectors in Note 10—Market Sectors and Major Customers.


	Three Months Ended
	March 27, 2020										March 29, 2019
	Point in Time		Over Time		Net Sales		Point in Time		Over Time		Net Sales
(in thousands)
Aerospace & Defense	$	12,336	$	14,167	$	26,503	$	11,075	$	12,047	$	23,122
Medical	3,151		7,450		10,601		3,872		3,214		7,086
Industrial	5,430		1,637		7,067		4,583		2,503		7,086
	$	20,917	$	23,254	$	44,171	$	19,530	$	17,764	$	37,294


	Six Months Ended
	March 27, 2020										March 29, 2019
	Point in Time		Over Time		Net Sales		Point in Time		Over Time		Net Sales
(in thousands)
Aerospace & Defense	$	26,792	$	27,440	$	54,232	$	19,002	$	22,457	$	41,459
Medical	6,901		14,436		21,337		8,040		8,689		16,729
Industrial	10,628		2,708		13,336		9,318		5,229		14,547
	$	44,321	$	44,584	$	88,905	$	36,360	$	36,375	$	72,735

Customer Deposits

Customer deposits are recorded when cash payments are received or due in advance of revenue recognition from contracts with customers. The timing of revenue recognition may differ from the timing of billings to customers. The changes in customer deposits from the Company's custom manufacturing services are as follows:


	Six Months Ended
	March 27, 2020		March 29, 2019
(in thousands)
Beginning balance	$	13,229	$	7,595
Recognition of deferred revenue	(8,573)		(4,821)
Deferral of revenue	11,146		7,452
Ending balance	$	15,802	$	10,226

Sales Outside the United States

For each of the three and six months ended March 27, 2020 and March 29, 2019, less than 2% of net sales were shipped to locations outside the United States.

NOTE 3—ALLOWANCE FOR DOUBTFUL ACCOUNTS

A summary follows of activity in the allowance for doubtful accounts during the six months ended March 27, 2020 and March 29, 2019:


	Six Months Ended
Allowance for doubtful accounts	March 27, 2020		March 29, 2019
(in thousands)
Allowance, beginning of period	$	71	$	85
Increase in provision for doubtful accounts	48		(39)
Write-offs	—		(7)
Allowance, end of period	$	119	$	39

NOTE 4—INVENTORIES

A summary of inventory by category at period end follows:


Inventories	March 27, 2020		September 30, 2019
(in thousands)
Raw materials	$	28,644	$	25,393
Work-in-process	13,308		15,928
Finished goods	3,101		2,946
Total inventories	$	45,053	$	44,267

NOTE 5—PROPERTY, PLANT AND EQUIPMENT, NET

A summary of property, plant and equipment and accumulated depreciation at period end follows:


Property, Plant and Equipment	March 27, 2020		September 30, 2019
(in thousands)
Land and improvements	$	788	$	788
Buildings and improvements	7,430		7,411
Building under capital lease	7,750		7,750
Machinery and equipment	32,869		31,708
Furniture and fixtures	8,290		8,047
Software	5,215		5,215
Construction in progress	1,087		1,173
Total property, plant and equipment, at cost	63,429		62,092
Accumulated depreciation	(44,197)		(42,659)
Property, plant and equipment, net	$	19,232	$	19,433

Depreciation expense during the three and six months ended March 27, 2020 and March 29, 2019 follows:


	Three Months Ended						Six Months Ended
Depreciation Expense	March 27, 2020		March 29, 2019		March 27, 2020		March 29, 2019
(in thousands)
Depreciation expense	$	795	$	646	$	1,552	$	1,301

NOTE 6—CREDIT FACILITIES

A summary of borrowings at period end follows:


			March 27, 2020						September 30, 2019
Credit Facility Debt	Fixed/Variable Rate	Maturity Date	Balance		Interest Rate		Balance		Interest Rate
(in thousands)
M&T Bank credit facilities:
Revolving Credit Facility	v	5/5/2022	$	26,563	3.25	%	$	26,646	4.31	%
Term Loan B	v	5/5/2022	2,351		4.08		2,779		4.59

Equipment Line Term Note	v	Various	868		3.44		1,125		4.56
Total debt, gross			29,782				30,550
Unamortized debt issuance costs			(229)				(269)
Total debt, net			29,553				30,281
Less: current portion			(1,371)				(1,371)
Long-term debt			$	28,182			$	28,910

M&T Bank Credit Facilities

Effective as of July 8, 2019, the Company and M&T Bank entered into the Ninth Amendment to the Fifth Amended and Restated Credit Facility Agreement, which amended the Fifth Amended and Restated Credit Facility Agreement dated as of December 14, 2015, as amended by various amendments (collectively, the “Credit Facility, as amended”).

The Credit Facility, as amended, is secured by a general security agreement covering the assets of the Company and its subsidiaries, a pledge of the Company’s equity interest in its subsidiaries, a negative pledge on the Company’s real property, and a guarantee by the Company’s subsidiaries, all of which restrict use of these assets to support other financial instruments.

Individual debt facilities provided under the Credit Facility, as amended, are described below:

a)Revolving Credit Facility (“Revolver”): At March 27, 2020, up to $35.0 million is available through May 5, 2022. The maximum amount the Company may borrow is determined based on a borrowing base calculation described below.

b)Term Loan B: $14.0 million was borrowed on January 18, 2013. Principal was being repaid in 120 equal monthly installments of $117 thousand. As part of an amendment to the Credit Facility, as amended, the principal was modified from $8.0 million to $6.0 million and principal is being repaid in equal monthly installments of $71 thousand plus a balloon payment of $0.6 million. The maturity date of the loan is May 5, 2022.

c)Equipment Line Advances: Up to $1.5 million is available through May 5, 2022. Interest only is paid until maturity. Principal is due in three or six months after borrowing or can be converted to an Equipment Line Term Loan.

d)Equipment Line Term Note: On July 26, 2018, $0.8 million was converted from an Equipment Line Advance, principal is being repaid in 36 equal monthly installments of $21 thousand and matures July 26, 2021. On September 27, 2018, $0.1 million was converted from an Equipment Line Advance, principal is being repaid in 36 equal monthly installments of $2 thousand and matures September 27, 2021. On March 18, 2019, $0.3 million was converted from an Equipment Line Advance, principal is being repaid in 36 equal monthly installments of $9 thousand and matures March 18, 2022. On May 6, 2019, $0.4 million was converted from an Equipment Line Advance, principal is being repaid in 36 equal monthly installments of $11 thousand and matures May 6, 2022.

Borrowing Base

At March 27, 2020 and September 30, 2019, under the Credit Facility, as amended, the maximum amount the Company can borrow under the Revolver was the lesser of (i) 85% of eligible receivables plus a percentage of eligible inventories (up to a cap of $14.0 million) or (ii) $35.0 million.

At March 27, 2020, the upper limit on Revolver borrowings was $35.0 million and $8.4 million was available. At September 30, 2019, the upper limit on Revolver borrowings was $35.0 million and $8.4 million was available. Average Revolver balances amounted to $25.1 million and $18.4 million during the six months ended March 27, 2020 and March 29, 2019, respectively.

Interest Rates

Under the Credit Facility, as amended, variable rate debt accrues interest at LIBOR plus the applicable marginal interest rate that fluctuates based on the Company’s Fixed Charge Coverage Ratio, as defined below. At March 27, 2020 and September 30, 2019, the applicable marginal interest rate was 2.25% for the Revolver and 2.50% for Term Loan B and Equipment Line Advances. Changes to applicable margins and unused fees resulting from the Fixed Charge Coverage Ratio generally become effective mid-way through the subsequent quarter.

The Company incurs quarterly unused commitment fees ranging from 0.25% to 0.375% of the excess of $27.0 million over average borrowings under the Revolver. Fees incurred amounted to $6.7 thousand and $12.5 thousand during the three and six months ended March 27, 2020, respectively. Fees incurred amounted to $4.5 thousand and $12.7 thousand during the three and six months ended March 29, 2019, respectively. The fee percentage varies based on the Company’s Fixed Charge Coverage Ratio, as defined below.

Financial Covenants

The Credit Facility, as amended, contains various affirmative and negative covenants including financial covenants. As of March 27, 2020, the Company had to maintain a minimum fixed charge coverage ratio (“Fixed Charge Coverage Ratio”). The Fixed Charge Coverage Ratio compares (i) EBITDAS minus unfinanced capital expenditures minus income tax expense, to (ii) the sum of interest expense, principal payments, payments on all capital lease obligations and dividends, if any (fixed charges). “EBITDAS” is defined as earnings before interest, income taxes, depreciation, amortization and non-cash stock compensation expense. The Fixed Charge Coverage Ratio was measured for a trailing twelve months ended March 27, 2020 as a minimum of 1.10 times. The Fixed Charge Coverage Ratio was the only covenant in effect at March 27, 2020. The Credit Facility, as amended, also provides for customary events of default, subject in certain cases to customary cure periods, in which the outstanding balance and any unpaid interest would become due and payable.

The Company was in compliance with the financial debt covenant at March 27, 2020.

Contractual Principal Payments

A summary of contractual principal payments under IEC’s borrowings at March 27, 2020 for the next three years taking into consideration the Credit Facility, as amended, is as follows:


Debt Repayment Schedule			Contractual Principal Payments
(in thousands)
Twelve months ending March
2021	$	1,371
2022	1,190
2023 ¹	27,221


	$	29,782

¹ Includes Revolver balance of $26.6 million at March 27, 2020.

NOTE 7—WARRANTY RESERVES

IEC generally warrants its products and workmanship for up to twelve months from date of sale. As an offset to warranty claims, the Company is sometimes able to obtain reimbursement from suppliers for warranty-related costs or losses. Based on historical warranty claims experience and in consideration of sales trends, a reserve is maintained for estimated future warranty costs to be incurred on products and services sold through the balance sheet date. The warranty reserve is included in other accrued expenses on the condensed consolidated balance sheets.

A summary of additions to and charges against IEC’s warranty reserves during the period follows:


	Six Months Ended
Warranty Reserve	March 27, 2020		March 29, 2019
(in thousands)
Reserve, beginning of period	$	165	$	173
Provision	27		27
Warranty costs	(50)		(56)
Reserve, end of period	$	142	$	144

NOTE 8—STOCK-BASED COMPENSATION

The 2019 Stock Incentive Plan (the “2019 Plan”) was approved by the Company’s stockholders at the March 2019 Annual Meeting. The 2019 Plan replaced the 2010 Omnibus Incentive Compensation Plan (“2010 Plan”) that was approved by the Company’s stockholders at the January 2011 Annual Meeting. The 2019 Plan, like the 2010 Plan, is administered by the Compensation Committee of the Board of Directors and provides for the following types of awards: incentive stock options, nonqualified options, stock appreciation rights, restricted shares, restricted stock units, performance compensation awards, cash incentive awards, director stock and other equity-based and equity-related awards. Awards are generally granted to certain members of management and employees, as well as directors. The Company also has an ESPP, adopted in 2011, that provides for the purchase of Company common stock at a discounted stock purchase price. Under the 2019 Plan, 840,360 shares of common stock, plus any shares that are subject to awards granted under the 2010 Plan that expire, are forfeited or canceled without the issuance of shares (other than shares used to pay the exercise price of a stock option under the 2010 Plan and shares used to cover the tax withholding of the award under the 2010 Plan) may be issued over a term of ten years. Under the ESPP, 150,000 shares of common stock may be issued over a term of ten years.

Stock-based compensation expense recorded under the 2010 Plan and the 2019 Plan, totaled $0.2 million and $0.3 million for the three and six months ended March 27, 2020, respectively. Stock-based compensation expense recorded under the 2010 Plan and the 2019 Plan, totaled $0.2 million and $0.3 million for the three and six months ended March 29, 2019, respectively.

At March 27, 2020, there were 621,369 shares of common stock remaining available to be issued under the 2019 Plan and 83,252 shares of common stock remaining available to be issued under the ESPP.

Expenses relating to stock options that comply with certain U.S. income tax rules are neither deductible by the Company nor taxable to the employee. Further information regarding awards granted under the 2010 Plan and ESPP is provided below.

Stock Options

When options are granted, IEC estimates fair value using the Black-Scholes option pricing model and recognizes the computed value as compensation cost over the vesting period, which is typically four years. The contractual term of options granted under the 2010 Plan and 2019 Plan is generally seven years. The volatility rate is based on the historical volatility of IEC's common stock.

Assumptions used in the Black-Scholes model and the estimated value of options granted during the six months ended March 27, 2020 and March 29, 2019 follows:


	Six Months Ended
Valuation of Options	March 27, 2020			March 29, 2019
Assumptions for Black-Scholes:
Risk-free interest rate	0.51		%	2.85		%
Expected term in years	5.5			5.5
Volatility	40		%	37		%
Expected annual dividends	none			none

Value of options granted:
Number of options granted	30,000			10,000
Weighted average fair value per share	$	2.68		$	2.40
Fair value of options granted (000s)	$	80		$	24

A summary of stock option activity, together with other related data, follows:


	Six Months Ended
	March 27, 2020				March 29, 2019
Stock Options	Number of Options	Wgtd. Avg. Exercise Price		Number of Options	Wgtd. Avg. Exercise Price

Outstanding, beginning of period	743,145	$	4.54	737,145	$	4.33
Granted	30,000	5.03		10,000	6.20
Exercised	(26,000)	5.31		(26,500)	4.71
Forfeited	(10,000)	3.58		(24,250)	3.70
Expired	(5,000)	6.91		(5,000)	4.08
Outstanding, end of period	732,145	$	4.53	691,395	$	4.36

For options expected to vest
Number expected to vest	722,582	$	4.51	683,135	$	4.35
Weighted average remaining contractual term, in years	3.3			3.6
Intrinsic value (000s)		$	1,510		$	1,706

For exercisable options
Number exercisable	545,645	$	4.16	510,895	$	4.18
Weighted average remaining contractual term, in years	1.9			2.9
Intrinsic value (000s)		$	1,354		$	1,365

For non-exercisable options
Expense not yet recognized (000s)		$	357		$	230
Weighted average years to be recognized	3.1			3.3

For options exercised
Intrinsic value (000s)		$	75		$	57

Restricted (Non-vested) Stock

Certain holders of IEC restricted stock have voting and dividend rights as of the date of grant, and, until vested, the shares may be forfeited and cannot be sold or otherwise transferred. At the end of the vesting period, which is typically four or five years (three years in the case of directors), holders have all the rights and privileges of any other common stockholder of the Company. The fair value of a share of restricted stock is its market value on the date of grant, and that value is recognized as stock compensation expense over the vesting period.

A summary of restricted stock activity, together with related data, follows:


	Six Months Ended
	March 27, 2020				March 29, 2019
Restricted (Non-vested) Stock	Number of Non-vested Shares	Wgtd. Avg. Grant Date Fair Value		Number of Non-vested Shares	Wgtd. Avg. Grant Date Fair Value

Outstanding, beginning of period	82,707	$	5.25	103,233	$	4.08
Granted	24,850	5.03		15,000	6.97
Vested	(36,812)	4.43		(46,136)	4.09
Forfeited	(13,250)	6.09		(1,400)	4.13
Outstanding, end of period	57,495	$	5.49	70,697	$	4.72

For non-vested shares
Expense not yet recognized (000s)		$	286		$	291
Weighted average remaining years for vesting	1.9			2.1

For shares vested
Aggregate fair value on vesting dates (000s)		$	260		$	311

Stock Issued to Board Members

In addition to annual grants of restricted stock, included in the table above, board members may elect to have their meeting fees paid in the form of shares of the Company’s common stock. The Company has not paid any meeting fees in stock since May 21, 2013.

Restricted Stock Units

Holders of IEC restricted stock units do not have voting and dividend rights as of the date of grant, and, until vested, the unit may be forfeited and cannot be sold or otherwise transferred. At the end of the vesting period, which is typically three years, holders will receive shares of the Company's common stock and have all the rights and privileges of any other common stockholder of the Company. The fair value of a restricted stock unit is the market value of the underlying shares of the Company's stock on the date of grant and that value is recognized as stock compensation expense over the vesting period.

A summary of restricted stock unit activity, together with related data, follows:


	Six Months Ended
	March 27, 2020				March 29, 2019
Restricted Stock Units	Number of Non-vested Units	Wgtd. Avg. Grant Date Fair Value		Number of Non-vested Units	Wgtd. Avg. Grant Date Fair Value

Outstanding, beginning of period	153,186	$	5.36	170,492	$	3.96
Granted	50,556	9.19		—	—
Vested	(17,015)	3.58		—	—
Forfeited	—	—		—	—
Outstanding, end of period	186,727	$	6.56	170,492	$	3.96

For non-vested shares
Expense not yet recognized (000s)		$	906		$	282
Weighted average remaining years for vesting	2.2			1.9

For shares vested
Aggregate fair value on vesting dates (000s)		$	86		$	—

NOTE 9—INCOME TAXES

The income tax expense during each of the three and six months ended March 27, 2020 and March 29, 2019 follows:


	Three Months Ended						Six Months Ended
	March 27, 2020		March 29, 2019		March 27, 2020		March 29, 2019
(in thousands)
Income tax expense	$	367	$	203	$	703	$	515

The income tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. There is a potential for volatility of the effective tax rate due to several factors, including discrete items, changes in the mix and amount of pre-tax income, changes in tax laws, business reorganizations, and settlements with taxing authorities, if any.

In response to the COVID-19 pandemic, many governments have enacted or are contemplating measures to provide aid and economic stimulus. These measures may include deferring the due dates of tax payments or other changes to their income and non-income-based tax laws. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020 in the U.S., includes measures to assist companies, including temporary changes to income and non-income-based tax laws. For the three months ended March 27, 2020, there were no material tax impacts to our condensed consolidated financial statements as it relates to COVID-19 measures. We continue to monitor additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service and others.

The CARES Act includes a provision which accelerates the refund of alternative minimum tax (“AMT”) credits to allow a full utilization or refund of the remaining credits beginning in tax year 2019. As the Company expects to have net operating loss carryforward to offset its 2019 taxable income in full, the AMT credit should be refundable in full. As such, at March 27, 2020, the Company reclassified the remaining portion of its AMT credit from deferred income tax to federal income tax receivable in the condensed consolidated balance sheet.

The Company's estimated annual effective tax rate for fiscal 2020 is comprised of the federal tax rate of 21% plus the state tax rate of 1.58%, which is adjusted for permanent book tax differences. During the three and six months ended March 27, 2020, the permanent items included meals and entertainment and stock based compensation. There were no material discrete items recognized in the three and six months ended March 27, 2020.

NOTE 10—MARKET SECTORS AND MAJOR CUSTOMERS

A summary of sales, according to the market sector within which IEC’s customers operate, follows:


	Three Months Ended			Six Months Ended
% of Sales by Sector	March 27, 2020	March 29, 2019	March 27, 2020	March 29, 2019

Aerospace & Defense	60%	62%	61%	57%
Medical	24%	19%	24%	23%
Industrial	16%	19%	15%	20%
	100%	100%	100%	100%

Four individual customers represented 10% or more of sales for the three months ended March 27, 2020. Three of these customers were from the aerospace & defense sector and represented 25%, 12% and 11% of sales. The fourth customer was from the medical sector and represented 17% of sales for the three months ended March 27, 2020. Three individual customers represented 10% or more of sales for the six months ended March 27, 2020. Two of these customers were from the aerospace & defense sector and represented 26% and 11% of sales. The third customer was from the medical sector and represented 16% of sales for the six months ended March 27, 2020.

One individual customer represented 10% or more of sales for the three months ended March 29, 2019. This customer was from the aerospace & defense sector and represented 22% of sales. Two individual customers each represented 10% or more of sales for the six months ended March 29, 2019. One customer was from the aerospace & defense sector and represented 21% of sales, while one customer was from the medical sector and represented 11% of sales.

Two individual customers represented 10% or more of receivables and accounted for 30% of the outstanding balance at March 27, 2020. Two individual customers represented 10% or more of receivables and accounted for 38% of the outstanding balance at September 30, 2019.

Credit risk associated with individual customers is periodically evaluated by analyzing the entity’s financial condition and payment history. Customers generally are not required to post collateral.

NOTE 11—COMMITMENTS AND CONTINGENCIES

Litigation

From time to time, the Company may be involved in legal actions in the ordinary course of its business, but management does not believe that any such proceedings, individually or in the aggregate, will have a material adverse effect on the Company’s condensed consolidated financial statements.

NOTE 12—LEASES

Operating Leases

IEC has a lease portfolio that consists of operating leases for equipment, and has remaining terms from less than one year to up to approximately five years, with contractual terms expiring from 2020 to 2024. None of these leases contain residual value guarantees, substantial restrictions, or covenants.

Supplemental balance sheet information related to the Company’s operating leases were as follows:


	March 27, 2020

Weighted average remaining lease term for operating leases (in years)	4.2
Weighted average discount rate for operating leases	5.47	%

Finance Leases

IEC's lease portfolio also consists of finance leases for equipment and real estate, and has remaining terms of five years up to approximately thirteen years, with contractual terms expiring in 2024 through 2033.

Supplemental balance sheet information related to the Company’s finance leases were as follows:


	March 27, 2020

Finance lease right-of-use assets, net of accumulated amortization (included in PP&E) (in thousands)	$	6,617
Weighted average remaining lease term for finance leases (in years)	11.7
Weighted average discount rate for finance leases	4.83		%

Lease Expense

The components of lease expense, recorded in cost of sales, selling and administrative expenses and interest and financing expense in the condensed consolidated statements of operation, during the three and six months ended March 27, 2020 were as follows:


		Three Months Ended		Six Months Ended
Lease Expense	Classification	March 27, 2020		March 27, 2020
(in thousands)
Operating lease expense
Fixed payment operating lease expense ¹	Cost of sales	$	68	$	93
Fixed payment operating lease expense	Selling and administrative expenses	15		29
Variable payment operating lease expense		—		—
Finance lease expense
Depreciation of ROU assets	Cost of sales	144		273
Interest	Interest and financing expense	88		174
Total lease expense		$	315	$	569

¹ Includes short-term leases which are not material.

Supplemental Cash Flow Information

Supplemental cash flow information related to the Company's leases during the six months ended March 27, 2020 were as follows:


	Six Months Ended
Supplemental Cash Flow	March 27, 2020
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Cash paid for operating lease ROU assets	$	47
Interest paid on finance leases	174
Financing cash flows from finance leases	—

Lease liabilities arising from obtaining ROU assets:
Operating leases	33

Contractual Lease Payments

A summary of operating lease payments for the next five years follows:


Operating Lease Payment Schedule	Contractual Lease Payments
(in thousands)
Twelve months ending March
2021	$	77
2022	73
2023	72
2024	72
2025 and thereafter	18
Total operating lease payments	312
Less: amounts representing interest	(38)
Total operating lease obligation	$	274

A summary of finance lease payments for the next five years follows:


Finance Lease Payment Schedule	Contractual Lease Payments
(in thousands)
Twelve months ending March
2021	$	760
2022	774
2023	788
2024	802
2025 and thereafter	6,481
Total finance lease payments	9,605
Less: amounts representing interest	(2,349)
Total finance lease obligation	$	7,256

Disclosures Related to Periods Prior to Adoption of the New Lease Standard

As previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2019 and under the previous lease accounting standard, the maturities of lease liabilities at September 30, 2019 were as follows:


Capital Lease Payment Schedule	Contractual Payments
(in thousands)
Twelve months ending September 30,
2020	$	673
2021	686
2022	700
2023	714
2024 and thereafter	6,720
Total capital lease payments	9,493
Less: amounts representing interest	(2,470)
Present value of minimum lease payment	$	7,023

As of March 27, 2020, the Company has one outstanding lease agreement that has not yet commenced for certain property located in Newark, New York that will include a new manufacturing facility and administrative offices. The lease is expected to commence in late fiscal 2020 when construction of the asset is complete.

NOTE 13—NET INCOME PER SHARE

Basic earnings per common share are calculated by dividing income available to common stockholders by the weighted average number of shares outstanding during each period. Diluted earnings per common share add to the denominator incremental shares resulting from the assumed exercise of all potentially dilutive stock options, as well as unvested restricted stock and restricted stock units. Options, restricted stock and restricted stock units are primarily held by directors, officers and certain employees.

The Company uses the two-class method to calculate net income per share as both classes share the same rights in dividends. Therefore, basic and diluted earnings per share (“EPS”) are the same for both classes of ordinary shares.

A summary of shares used in the EPS calculations follows (in thousands except share and per share data):


	Three Months Ended						Six Months Ended
Net Income Per Share	March 27, 2020		March 29, 2019		March 27, 2020		March 29, 2019
(in thousands, except share and per share data)
Basic net income per share:
Net income	$	1,523	$	670	$	2,712	$	1,742
Less: Income attributable to non-vested shares	8		4		15		9
Net income available to common stockholders	$	1,515	$	666	$	2,697	$	1,733

Weighted average common shares outstanding	10,393,461		10,286,876		10,379,846		10,274,772

Basic net income per share	$	0.15	$	0.06	$	0.26	$	0.17

Diluted net income per share:
Net income	$	1,523	$	670	$	2,712	$	1,742
Shares used in computing basic net income per share	10,393,461		10,286,876		10,379,846		10,274,772
Dilutive effect of non-vested shares	309,651		391,182		286,155		299,304
Shares used in computing diluted net income per share	10,703,112		10,678,058		10,666,001		10,574,076

Diluted net income per share	$	0.14	$	0.06	$	0.25	$	0.16

The diluted weighted average share calculations do not include the following shares, which are not dilutive to the EPS calculations.

Three Months Ended

Six Months Ended

March 27,
2020

March 29,
2019

March 27,
2020

March 29,
2019

Anti-dilutive shares excluded

—

19,583

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The information in this Management’s Discussion and Analysis should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and notes. All references to “Notes” are to the accompanying condensed consolidated financial statements and notes included in this Quarterly Report on Form 10-Q (“Form 10-Q”).

Cautionary Note Regarding Forward-Looking Statements

References in this report to “IEC,” the “Company,” “we,” “our,” or “us” mean IEC Electronics Corp. and its subsidiaries except where the context otherwise requires. This Form 10-Q contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. These forward-looking statements include, but are not limited to, statements regarding future sales and operating results, future prospects, the capabilities and capacities of business operations, any financial or other guidance and all statements that are not based on historical fact, but rather reflect our current expectations concerning future results and events. The ultimate correctness of these forward-looking statements is dependent upon a number of known and unknown risks and events and is subject to various uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements.

The following important factors, among others, could affect future results and events, causing those results and events to differ materially from those views expressed or implied in our forward-looking statements: the impact of the coronavirus (“COVID-19”) pandemic on our business, including our supply chain, workforce and customer demand; business conditions and growth or contraction in our customers’ industries, the electronic manufacturing services industry and the general economy; our ability to control our material, labor and other costs; our dependence on a limited number of major customers; uncertainties as to availability and timing of governmental funding for our customers; the impact of government regulations, including FDA regulations; unforeseen product failures and the potential product liability claims that may be associated with such failures; technological, engineering and other start-up issues related to new programs and products; variability and timing of customer requirements; the potential consolidation of our customer base; availability of component supplies; dependence on certain industries; the ability to realize the full value of our backlog; the types and mix of sales to our customers; litigation and governmental investigations; intellectual property litigation; variability of our operating results; our ability to maintain effective internal controls over financial reporting; the availability of capital and other economic, business and competitive factors affecting our customers, our industry and business generally; failure or breach of our information technology systems; and natural disasters. Any one or more of such risks and uncertainties could have a material adverse effect on us or the value of our common stock. For a further list and description of various risks, relevant factors and uncertainties that could cause future results or events to differ materially from those expressed or implied in our forward-looking statements, see the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections in this Form 10-Q, our Annual Report on Form 10-K for the fiscal year ended September 30, 2019, and our other filings with the Securities and Exchange Commission (the “SEC”).

All forward-looking statements included in this Form-10-Q are made only as of the date indicated or as of the date of this Form 10-Q. We do not undertake any obligation to, and may not, publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur or which we hereafter become aware of, except as required by law. New risks and uncertainties arise from time to time and we cannot predict these events or how they may affect us and cause actual results to differ materially from those expressed or implied by our forward-looking statements. Therefore, you should not rely on our forward-looking statements as predictions of future events. When considering these risks, uncertainties and assumptions, you should keep in mind the cautionary statements contained in this report and any documents incorporated herein by reference. You should read this document and the documents that we reference in this Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. All forward-looking statements attributable to us are expressly qualified by these cautionary statements.

Overview

IEC Electronics Corp. (“IEC,” “we,” “our,” “us,” “Company”) conducts business directly, as well as through its subsidiaries, IEC Electronics Corp-Albuquerque (“Albuquerque”), and IEC Analysis & Testing Laboratory, LLC (“ATL”). Our former subsidiary, IEC California Holdings, Inc., was dissolved as of September 18, 2019. Our Rochester unit operates as a division of IEC.

We are a premier provider of electronic manufacturing services (“EMS”) to advanced technology companies that produce life-saving and mission critical products for the medical, industrial, aerospace and defense sectors. We specialize in delivering technical solutions for the custom manufacturing, product configuration, and verification testing of highly engineered complex products that require a sophisticated level of manufacturing to ensure quality and performance.

Within the EMS sector, we have unique capabilities which allow our customers to rely on us to solve their complex challenges, minimize their supply chain risk and deliver full system solutions for their supply chain. These capabilities include, among others:

•Our engineering services include the design, development, and fabrication of customized stress testing platforms to simulate a product’s end application, such as thermal cycling and vibration, in order to ensure reliable performance and avoid catastrophic failure when the product is placed in service.

•Our vertical manufacturing model offers customers the ability to simplify their supply chain by utilizing a single supplier for their critical components including complex printed circuit board assembly (“PCBA”), precision metalworking, and interconnect solutions. This service model allows us to control the cost, lead time, and quality of these critical components which are then integrated into full system assemblies and minimizes our customers’ supply chain risk.

•We provide direct order fulfillment services for our customers by integrating with their configuration management process to obtain their customer orders, customize the product to the specific requirements, functionally test the product and provide verification data, and direct ship to their end customer in order to reduce time, cost, and complexity within our customer’s supply chain.

•We believe we are the only EMS provider with an on-site laboratory that has been approved by the Defense Logistics Agency (“DLA”) for their Qualified Testing Supplier List (“QTSL”) program which deems the site suitable to conduct various QTSL and military testing standards including counterfeit component analysis and environmental testing to qualify a part fit for use. In addition, this advanced laboratory is utilized for complex design analysis and manufacturing process development to solve challenges and accelerate our customers’ time to market.

We are a 100% U.S. manufacturer which attracts customers who are unlikely to utilize offshore suppliers due to the proprietary nature of their products, governmental restrictions or volume considerations. Our locations include:

•Newark, New York - Located approximately one hour east of Rochester, New York, our Newark location is our corporate headquarters and is our largest manufacturing location providing complex circuit board manufacturing, interconnect solutions, and system-level assemblies along with an on-site material analysis laboratory for advanced manufacturing process development.

•Rochester, New York - Focuses on precision metalworking services including complex metal chassis and assemblies.

•Albuquerque, New Mexico - Specializes in the aerospace and defense markets with complex circuit board and system-level assemblies along with a state of the art analysis and testing laboratory which conducts root cause failure analysis, reliability, inspection and authenticity testing.

We excel at complex, highly engineered products that require sophisticated manufacturing support where quality and reliability are of paramount importance. With our customers at the center of everything we do, we have created a high-intensity, rapid response culture capable of reacting and adapting to their ever-changing needs. Our customer-centric approach offers a high degree of flexibility while simultaneously complying with rigorous quality and on-time delivery standards.

We proactively invest in areas we view as important for our continued long-term growth. All of our locations are ISO 9001:2015 certified and ITAR registered. We are Nadcap accredited and AS9100D certified at our Newark and Albuquerque locations to support the stringent quality requirements of the aerospace industry. Our Newark location is ISO 13485 certified to serve the medical sector and is an approved supplier by the National Security Agency (“NSA”) under the COMSEC standard regarding communications security. Our analysis and testing laboratory in Albuquerque is ISO 17025 accredited, an IPC-approved Validation Services Qualified Test Laboratory, and we believe is the only on-site EMS laboratory that has been approved by the DLA for their QTSL program which deems the site suitable to conduct various QTSL and military testing standards including counterfeit component analysis and environmental testing to qualify a part fit for use. Albuquerque also performs work per NASA-STD-8739 and J-STD-001ES space standards.

The technical expertise of our experienced workforce enables us to build some of the most advanced electronic, wire and cable, interconnect solutions, and precision metal systems sought by original equipment manufacturers (“OEMs”).

Employees

Employees are our single greatest resource. Our total employees numbered 866, all of which are full time employees, at March 27, 2020. Some of our full-time employees are temporary employees. We make a concerted effort to engage our employees in initiatives that improve our business and provide opportunities for growth, and we believe that our employee relations are good. We have access to large and technically qualified workforces in close proximity to our operating locations in Rochester, NY and Albuquerque, NM.

COVID-19 Pandemic

In December 2019, a novel strain of coronavirus, COVID-19, was reported in Wuhan, China. The World Health Organization determined that the outbreak constituted a “Public Health Emergency of International Concern” and declared a pandemic. The COVID-19 pandemic is disrupting supply chains and affecting production and sales across a range of industries. The extent of the impact of the COVID-19 pandemic on our supply chain, workforce, customer demand, operations and financial performance will depend on certain developments, including the duration and spread of the outbreak, impact on our customers, employees and vendors all of which are uncertain and cannot be predicted.

In accordance with the Department of Defense guidance issued in March 2020, designating the Defense Industrial Base as a critical infrastructure workforce, our production facilities have continued to operate in support of essential products and services required to meet national security commitments to the U.S. government and the U.S. military.

Please see Item 1A. Risk Factors in this report for additional information regarding certain risks associated with the COVID-19 pandemic.

Supply Chain

The COVID-19 pandemic presents a level of uncertainty around the availability of raw material components in future periods. We are aware of some component manufacturers that have been required to shut down temporarily, as a result of COVID-19 related illnesses impacting their employee populations or to comply with government mandates. Due to the lifesaving and mission critical nature of the products we support, many of our suppliers and the related programs are given certain priority ratings, which helps to ensure the required supply of material will continue.

We are continually assessing potential supply chain impacts and working with our distribution partners to identify existing, on hand stock that we can access. We are also working with our customer base to determine their interest in participating in inventory pre-purchase arrangements, which would be funded through additional customer deposits.

Workforce

The safety and well-being of our employees has been, and continues to be, our top priority, especially during the COVID-19 pandemic. Although we are deemed an essential business based on the lifesaving and mission critical products we support, and we remain fully operational, we chose early on to ask our non-essential employees to work from home in order to reduce the employee density in our facilities. In support of those working on site, we have taken numerous actions to help provide for a safe work environment and for appropriate social distancing, where possible. Some examples of the actions we have taken include, but are not limited to, the following:

•Adjusted shift start and end times to limit the number of people entering and exiting our facilities simultaneously;

•Adjusted break and lunch times to reduce the number of people in common areas;

•Designated stairwells and walkways as one-way to ensure employees are not passing each other in tight quarters; and

•Implemented additional cleaning protocols to ensure work surfaces, high touch areas and common spaces are routinely cleaned and disinfected in accordance with guidelines from the Centers for Disease Control and Prevention.

We have also developed contingency plans in the event that one of our employees tests positive for COVID-19. We expect to continue to enhance our practices to remain aligned with state and federal guidelines.

Customer Demand

Due to the nature of the lifesaving and mission critical products that we support, the majority of our customers are also deemed to be essential businesses and remain operational. At a macro level, we have seen increases in demand from some of our existing customers, especially those in the medical sector. However, certain customers have requested that a portion of their

demand be moved out to future periods beyond fiscal 2020. To date, these requests represent a small percentage of our current backlog and we do not expect to see a material impact from these requests. We continue to work in partnership with our customers to continually assess any potential impacts from the pandemic and opportunities to mitigate risk.

Three Months Results

A summary of selected income statement amounts for the three months ended follows:


	Three Months Ended
Income Statement Data	March 27, 2020		March 29, 2019
(in thousands)
Net sales	$	44,171	$	37,294

Gross profit	5,503		4,586
Selling and administrative expenses	3,217		3,328
Interest and financing expense	396		385
Income before income taxes	1,890		873
Income tax expense	367		203
Net income	$	1,523	$	670

A summary of sales, according to the market sector within which our customers operate, follows:


	Three Months Ended
% of Sales by Sector	March 27, 2020	March 29, 2019

Aerospace & Defense	60%	62%
Medical	24%	19%
Industrial	16%	19%
	100%	100%

Revenue increased in the second quarter of fiscal 2020 by $6.9 million or 18% as compared to the second quarter of the prior fiscal year. Revenues from the aerospace & defense sector increased $3.4 million, revenue from the medical sector increased $3.5 million and revenue from the industrial sector decreased $0.1 million.

Various increases and decreases in sales to our aerospace & defense customers resulted in a net increase of $3.4 million in the second quarter of fiscal 2020. Production ramp up of various customers resulted in an increase of revenue of $5.4 million. Net increases in customer demand resulted in an additional $1.1 million increase in revenue. These increases were partially offset by reductions to revenue due to disengaging with certain customers.

The medical sector saw an increase of $3.5 million in the second quarter of fiscal 2020 compared to the same period of the prior fiscal year. We saw increases related to new programs ramping up with one customer amounting to $4.2 million and various net increases in customer demand of $1.6 million. These increases were partially offset by decreases of $0.5 million from a program being on hold from one customer and a decrease of $1.7 million from a discontinued program with another customer. We continue to expect some volatility in the medical sector going forward.

The net decrease in the industrial sector of $0.1 million resulted primarily from the decreases in customer demand of $1.1 million. There was also a decrease of $0.6 million from programs being on hold from two customers. These decreases were partially offset by increase in customer demand of $1.5 million from various customers.

Gross margin for the second quarter of fiscal 2020 decreased to 12.5% of sales versus 12.3% of sales in the second quarter of the prior fiscal year. Customer mix had the most significant impact on gross profit.

Selling and administrative (“S&A”) expenses decreased $0.1 million and represented 7.3% of sales in the second quarter of fiscal 2020 compared to 8.9% of sales in the same quarter of the prior fiscal year. The decrease in S&A expenses was primarily due to lower payroll and related expenses.

Interest and financing expense remained flat in the second quarter of fiscal 2020 compared to the same quarter of the prior fiscal year. The weighted average interest rate on our debt was 1.20% lower during the second quarter of fiscal 2020 compared to the second quarter of the prior fiscal year. Our average outstanding debt balances increased by $3.9 million in the second quarter of fiscal 2020 compared to the second quarter of fiscal 2019 because of higher balances on our revolving credit facility, offset by lower balance on equipment line term notes to fund capital purchases. Cash paid for interest on credit facility debt was approximately $0.3 million for the second quarter of each of fiscal 2020 and fiscal 2019. Detailed information regarding our borrowings is provided in Note 6—Credit Facilities.

With respect to tax payments, in the near term, we expect to be largely sheltered by sizable net operating loss (“NOL”) carryforwards for federal income tax purposes. In the quarter ended March 27, 2020, we paid minimal taxes. At the end of fiscal 2019, the gross NOL carryforwards amounted to approximately $23.4 million. The NOL carryforwards expire in varying amounts between 2023 and 2035, unless utilized prior to these dates.

Year to Date Results

A summary of selected income statement amounts for the six months ended follows:


	Six Months Ended
Income Statement Data	March 27, 2020		March 29, 2019
(in thousands)
Net sales	$	88,905	$	72,735

Gross profit	10,742		9,645
Selling and administrative expenses	6,516		6,680
Interest and financing expense	811		708
Income before income taxes	3,415		2,257
Income tax expense	703		515
Net income	$	2,712	$	1,742

A summary of sales, according to the market sector within which our customers operate, follows:


	Six Months Ended
% of Sales by Sector	March 27, 2020	March 29, 2019

Aerospace & Defense	61%	57%
Medical	24%	23%
Industrial	15%	20%
	100%	100%

Revenue increased in the first six months of fiscal 2020 by $16.2 million or 22% as compared to the first six months of the prior fiscal year. Revenues from the aerospace & defense sector increased $12.3 million, revenue from the medical sector increased $5.3 million and revenue from the industrial sector decreased $1.4 million.

Various increases and decreases in sales to our aerospace & defense customers resulted in a net increase of $12.3 million in the first six months of fiscal 2020. Ramping up of production of various customers resulted in an increase of revenue of $6.9 million. Net increases in customer demand resulted in an additional $6.8 million increase in revenue. These increases were partially offset by disengagements with customers resulting in a decrease of $1.6 million in the first six months of fiscal 2020.

The medical sector saw an increase of $5.3 million in the first six months of fiscal 2020 compared to the same period of the prior fiscal year. We saw increases related to a new program ramping up with one customer amounting to $6.9 million and net increases in customer demand of $2.2 million at various customers. These increases were partially offset by decreases of $3.2 million from a program being on hold from one customer. We continue to expect some volatility in the medical sector going forward.

The net decrease in the industrial sector of $1.4 million resulted primarily from the decreases in customer demand of $1.2 million in the first six months of fiscal 2020. There was also a decrease of $1.9 million from a program being on hold from one customer. These decreases were partially offset by increase in customer demand of $1.6 million from various customers.

Due to the Chapter 11 bankruptcy filing of a customer, we incurred a $1.0 million pre-tax non-cash charge during the first six months of fiscal 2020, related to the increase in our excess and obsolete inventory reserve. The customer communicated to its vendors to “cease providing all products” under its court-supervised process. No portion of the impairment charge is anticipated to result in future cash expenditures. We intend to preserve all rights and pursue available legal remedies to recover any losses suffered as a result of the customer’s Chapter 11 bankruptcy filing. These charges impacted our GAAP financial results. Net income in the first six months was $2.7 million, and, adjusted for the $1.0 million impact from the one-time inventory reserve, adjusted net income was $3.5 million. Information regarding this non-GAAP measure and a reconciliation of net income to adjusted net income is provided below under “Non-GAAP Financial Measures.”

Gross margin for the first six months of fiscal 2020 decreased to 12.1% of sales versus 13.3% of sales in the first six months of the prior fiscal year. The customer bankruptcy filing had the most significant impact on gross profit, in addition to customer mix. Excluding the non-cash charge related to the customer's Chapter 11 bankruptcy filing, our adjusted gross margin would have been 13.2% of sales. Information regarding this non-GAAP measure and a reconciliation of gross profit and gross margin to adjusted gross profit and adjusted gross margin are provided below under “Non-GAAP Financial Measures.”

Selling and administrative (“S&A”) expenses decreased $0.2 million and represented 7.3% of sales in the first six months of fiscal 2020 compared to 9.2% of sales in the first six months of the prior fiscal year. The decrease in S&A expenses was primarily due to lower payroll and related expenses.

Interest and financing expense increased by $0.1 million in the first six months of fiscal 2020 compared to the same quarter of the prior fiscal year. The weighted average interest rate on our debt was 1.16% lower during the first six months of fiscal 2020 compared to the first six months of the prior fiscal year. Our average outstanding debt balances increased by $6.5 million in the first six months of fiscal 2020 compared to the first six months of fiscal 2019 because of higher balances on our revolving credit facility, offset by lower balance on equipment line term notes to fund capital purchases. Cash paid for interest on credit facility debt was approximately $0.6 million for the first six months of each of fiscal 2020 and fiscal 2019. Detailed information regarding our borrowings is provided in Note 6—Credit Facilities.

With respect to tax payments, in the near term, we expect to be largely sheltered by sizable NOL carryforwards for federal income tax purposes. In the first six months of fiscal 2020, we paid minimal taxes. At the end of fiscal 2019, the gross NOL carryforwards amounted to approximately $23.4 million. The NOL carryforwards expire in varying amounts between 2023 and 2035, unless utilized prior to these dates.

Non-GAAP Financial Measures

In addition to reporting net income, gross profit and gross margin, U.S. GAAP measures, we present adjusted net income, adjusted gross profit and adjusted gross margin, which are non-GAAP measures, to reflect the impact of a one-time inventory reserve related to a customer’s bankruptcy. We believe these non-GAAP measures are important measures of our performance because they allow management, investors and others to evaluate and compare our performance from period to period by removing the impact of the one-time inventory reserve related to a customer's bankruptcy. Adjusted net income, adjusted gross profit and adjusted gross margin are not measures of financial performance under GAAP and are not calculated through the application of GAAP. As such, they should not be considered as a substitute for the GAAP measures of net income gross profit and gross margin, and therefore, should not be used in isolation of, but in conjunction with, the GAAP measures. These non-GAAP measures may produce results that vary from the GAAP measures and may not be comparable to a similarly defined non-GAAP measure used by other companies.


	Six Months Ended
	March 27, 2020
Reconciliation to adjusted gross profit:
Gross profit	$	10,742
Non-cash charge ⁽¹⁾	987
Adjusted gross profit	$	11,729

Reconciliation to adjusted gross margin:
Gross margin	12.1		%
Non-cash charge ⁽¹⁾	1.1		%
Adjusted gross margin	13.2		%

Reconciliation to adjusted net income:
Net income	$	2,712
Non-cash charge ⁽¹⁾	987
Income tax effect ⁽²⁾	(207)
Adjusted net income	$	3,492

Reconciliation to adjusted net income per common share:
Net income per common share, basic	$	0.26
Non-cash charge, net of tax ⁽¹⁾⁽²⁾	0.08
Adjusted net income per common share, basic	$	0.34

Net income per common share, diluted	$	0.25
Non-cash charge, net of tax ⁽¹⁾⁽²⁾	0.07
Adjusted net income per common share, diluted ⁽³⁾	$	0.32

⁽¹⁾A non-cash charge related to the increase in our excess and obsolete inventory reserve due to the Chapter 11 bankruptcy filing of a customer of IEC.

⁽²⁾ The income tax effect related to the non-cash charge was calculated using an effective tax rate of 21%.

⁽³⁾Adjusted net income per common share, diluted is calculated based on adjusted net income and reflects the dilutive impact of shares, where applicable, based on adjusted net income.

Liquidity and Capital Resources

Capital Resources

As of March 27, 2020, there were $2.3 million of outstanding capital expenditure commitments for manufacturing equipment. We generally fund capital expenditures with cash flows from operations, our revolving credit facility and our equipment line advances. Based on our current expectations, we believe that our projected cash flows provided by operations and potential borrowings under the revolving credit facility and equipment line advances, are sufficient to meet our working capital, debt service and capital expenditure requirements for the next twelve months.

Our cash management system provides for the funding of the disbursement accounts on a daily basis as checks are presented for payment. Under this system, outstanding checks in excess of the bank balance create a book overdraft.

Summary of Cash Flows

A summary of selected cash flow amounts for the six months ended March 27, 2020 and March 29, 2019 follows:


	Six Months Ended
Cash Flow Data	March 27, 2020		March 29, 2019
(in thousands)
Cash, beginning of period	$	—	$	—
Net cash provided by/(used in):
Operating activities	1,800		(8,851)
Investing activities	(1,351)		(805)
Financing activities	(449)		9,656
Net cash change for the period	—		—
Cash, end of period	$	—	$	—

Operating activities

Cash flows from operations, before considering changes in our working capital accounts, provided $7.1 million and $3.8 million for the first six months of fiscal 2020 and fiscal 2019, respectively. Net income of $2.7 million in the first six months of fiscal 2020 improved compared to the same period of the prior fiscal year mainly due to increased sales. Net income was $1.7 million during the first six months of the prior fiscal year.

Working capital used cash flows of $5.3 million in the first six months of fiscal 2020 and $12.7 million in the first six months of fiscal 2019. The change in working capital in the first six months of fiscal 2020 was due to decreases in accounts receivable of $1.0 million, increases in unbilled contract revenue of $1.1 million, increases in inventories of $2.1 million, decreases in accounts payable $2.8 million, decreases in accrued expenses of $1.9 million and increases in customer deposits of $2.6 million. Inventory and customer deposit increases were driven by the higher customer demand to meet increased backlog and securing materials for future production. The decrease in accounts receivable was primarily due to the timing of sales and billings. The decrease in accrued expenses was due to a decrease in payroll and related costs due to timing.

Investing activities

Cash flows used in investing activities were $1.4 million and $0.8 million for the first six months of fiscal 2020 and 2019, respectively. Cash flows used in each of the first six months of fiscal 2020 and fiscal 2019 consisted of purchases of equipment.

Financing activities

Cash flows used in financing activities were $0.4 million for the first six months of fiscal 2020 compared to inflows of $9.7 million for the first six months of fiscal 2019. During the first six months of fiscal 2020, net repayments under all credit facilities were $0.8 million, with $0.1 million of net repayments under the Revolver, as defined below, and repayments of $0.7 million for term debt. During the first six months of fiscal 2019, net borrowings under all credit facilities were $9.7 million, with $9.9 million of net borrowings under the Revolver, repayments of $0.6 million for term debt and $0.4 million of new borrowings related to equipment line advances.

Credit Facilities

At March 27, 2020, borrowings outstanding under the revolving credit facility (the “Revolver”) under the Ninth Amendment to the Fifth Amended and Restated Credit Facility Agreement (which amended the Fifth Amended and Restated Credit Facility Agreement dated as of December 14, 2015, as amended by various amendments, collectively, the “Credit Facility, as amended”) amounted to $26.6 million, and the upper limit was $35.0 million. We believe that our liquidity is sufficient to satisfy anticipated operating requirements during the next twelve months.

The Credit Facility, as amended, contains various affirmative and negative covenants including financial covenants. As of March 27, 2020, we had to maintain a minimum fixed charge coverage ratio (“Fixed Charge Coverage Ratio”). The Fixed Charge Coverage Ratio compares (i) EBITDAS minus unfinanced capital expenditures minus tax expense, to (ii) the sum of interest expense, principal payments, payments on all capital lease obligations and dividends, if any (fixed charges). “EBITDAS” is defined as earnings before interest, taxes, depreciation, amortization and non-cash stock compensation expense. The Fixed Charge Coverage Ratio was measured for a trailing twelve months ended March 27, 2020. The Credit Facility, as amended, also provides for customary events of default, subject in certain cases to customary cure periods, in which events, the outstanding balance and any unpaid interest would become due and payable.

Pursuant to the Credit Facility, as amended, the Fixed Charge Coverage Ratio covenant of a minimum of 1.10 was the only covenant in effect at March 27, 2020. The Fixed Charge Coverage Ratio was calculated as 2.58 at March 27, 2020. The Company was in compliance with the financial debt covenant at March 27, 2020.

Detailed information regarding our borrowings at March 27, 2020 is provided in Note 6—Credit Facilities.

Off-Balance Sheet Arrangements

IEC is not a party to any material off-balance sheet arrangements.

Application of Critical Accounting Policies

Our application of critical accounting policies is disclosed in our Annual Report on Form 10-K filed for the fiscal year ended September 30, 2019.

Recently Issued Accounting Standards

See Note 1—Our Business and Summary of Significant Accounting Policies for further information concerning recently issued accounting pronouncements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a result of its financing activities, the Company is exposed to changes in interest rates that may adversely affect operating results. The Company actively monitors its exposure to interest rate risk and from time to time may use derivative financial instruments to manage the impact of this risk. The Company may use derivatives only for the purpose of managing risk associated with underlying exposures. The Company does not trade or use instruments with the objective of earning financial gains on the interest rate nor does the Company use derivatives instruments where it does not have underlying exposure. The Company did not have any derivative financial instruments at March 27, 2020 or September 30, 2019.

At March 27, 2020, the Company had $29.8 million of debt, all comprised of variable interest rates. Interest rates on variable loans are based on London interbank offered rate (“LIBOR”). The credit facilities are more fully described in Note 6—Credit Facilities. Interest rates based on LIBOR currently adjust daily, causing interest on such loans to vary from period to period. A sensitivity analysis as of March 27, 2020 indicated that a one-percentage point increase or decrease in our variable interest rates, which represents more than a 10% change, would increase or decrease the Company’s annual interest expense by approximately $0.3 million.

The Company is exposed to credit risk to the extent of non-performance by M&T Bank under the Credit Facility, as amended. M&T Bank’s credit rating is monitored by the Company, and IEC expects that M&T Bank will perform in accordance with the terms of the Credit Facility, as amended.

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures

Our management, with the participation of our Chief Executive Officer (our principal executive officer) and our Chief Financial

Officer (our principal financial officer), evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of March 27, 2020, the end of the period covered by this Form 10-Q. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of March 27, 2020, our disclosure controls and procedures were effective.

Changes in internal control over financial reporting

The Company is in the process of implementing a financial reporting system, Epicor ERP Software (“Epicor”), as part of a multi-year plan to integrate and upgrade our systems and processes. During the year ended September 30, 2019, the Company began implementation of Epicor by converting one legacy ERP system to Epicor. The implementation of Epicor is occurring in phases and is expected to be fully completed after fiscal 2020.

As part of the Epicor implementation, certain changes to our processes and procedures have and will continue to occur. These changes will result in changes to our internal control over financial reporting. While Epicor is designed to strengthen our internal financial controls by automating certain manual processes and standardizing business processes and reporting across our organization, management will continue to evaluate and monitor our internal controls as each of the affected areas evolve.

In response to the COVID-19 pandemic, some of our employees began working remotely during the second quarter of fiscal 2020. Management has taken measures to ensure that our internal controls over financial reporting remained effective and were not materially affected by these changes to the working environment during this period. We are continually monitoring and assessing the impact of the COVID-19 pandemic on our internal controls to minimize the impact on their design and operating effectiveness.

During the quarter ended March 27, 2020, there have been no other changes in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the effectiveness of control systems

IEC’s management does not expect that our disclosure controls and internal controls will prevent all errors and fraud. Because of inherent limitations in any such control system (e.g. faulty judgments, human error, information technology system error, or intentional circumvention), there can be no assurance that the objectives of a control system will be met under all circumstances. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. The benefits of a control system also must be considered relative to the costs of the system and management’s judgments regarding the likelihood of potential events. In summary, there can be no assurance that any control system will succeed in achieving its goals under all possible future conditions, and as a result of these inherent limitations, misstatements due to error or fraud may occur and may or may not be detected.

Part II OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may be involved in legal actions in the ordinary course of our business, but management does not believe that any such proceedings individually or in the aggregate, will have a material effect on our condensed consolidated financial statements.

Item 1A. Risk Factors

For a discussion of the Company’s potential risks or uncertainties, please see “Part I—Item 1A—Risk Factors” and “Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended September 30, 2019 filed with the SEC on November 22, 2019, and “Part I—Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations” herein. Other than as described below, there have been no material changes from the risk factors as previously disclosed in our Annual Report on Form 10-K for the year ended September 30, 2019.

Our business, results of operations and financial condition may be adversely impacted by the recent coronavirus (“COVID-19”) pandemic.

The COVID-19 pandemic has negatively affected the U.S. and global economy, disrupted global supply chains, resulted in significant travel and transport restrictions, including mandated closures and orders to “shelter-in-place,” and created significant disruption of the financial markets. We are closely monitoring the impact of the COVID-19 pandemic on all aspects of our business, including how it will impact our customers, employees, supply chain, and distribution network. While the COVID-19 pandemic did not have a material adverse effect on our reported results for our second quarter of fiscal 2020, we are unable to predict the ultimate impact that it may have on our business, future results of operations, financial position or cash flows. The extent to which our operations may be impacted by the COVID-19 pandemic will depend largely on future developments, which are highly uncertain and cannot be accurately predicted, including new information which may emerge concerning the severity of the outbreak and actions by government authorities to contain the outbreak or treat its impact. Even after the COVID-19 pandemic has subsided, we may experience materially adverse impacts to our business due to any resulting economic recession or depression. Furthermore, the impacts of a potential worsening of global economic conditions and the continued disruptions to and volatility in the financial markets remain unknown.

The impact of the COVID-19 pandemic may also exacerbate other risks discussed in Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended September 30, 2019, any of which could have a material effect on us. This situation is changing rapidly and additional impacts may arise that we are not aware of currently.

Our business will be adversely affected if the COVID-19 pandemic, or similar health epidemics, negatively impacts our supply chain.

We depend on a limited number of suppliers for components that are critical to our manufacturing processes. The COVID-19 pandemic has resulted in significant governmental measures being implemented to control the spread of the virus, including, among others, restrictions on manufacturing and the movement of employees in many regions of the country and in regions worldwide. As a result of the pandemic and the measures designed to contain the spread of the virus, our suppliers may not have the materials, capacity, or capability to supply our components according to our schedule and specifications. Any reduction in production capacity or capacity at our suppliers may reduce or even halt the supply of goods and necessary components for many of our customers’ products, which could result in product shortages and an increase in our inventory of unfinished products. Further, there may be logistics issues, including our ability and our supply chain’s ability to quickly ramp up production, and transportation demands that may cause further delays. If our suppliers’ operations are curtailed, we may need to seek alternate sources of supply, which may be more expensive. Alternate sources may not be available or may result in delays in shipments to us from our supply chain and subsequently to our customers, each of which would affect our results of operations. While the disruptions and restrictions on the ability to travel, quarantines, and any temporary closures of the facilities of our suppliers, as well as general limitations on movement are expected to be temporary, the duration of the production and supply chain disruption, and related financial impact, cannot be estimated at this time. Should the production and distribution closures continue for an extended period of time, the impact on our supply chain could have a material adverse effect on our results of operations and cash flows.

The COVID-19 pandemic may significantly disrupt our workforce and internal operations.

The COVID-19 pandemic may significantly disrupt our workforce, including our ability to hire and onboard employees, if a significant percentage of our employees or any potential hires are unable to work due to illness, quarantines, government

actions, facility closures in response to the pandemic, fear of acquiring COVID-19 while performing essential business functions, or as a result of recent changes to unemployment insurance where unemployed workers can receive, in the short-term, benefits in excess of what would be offered for working for us. While we remain fully operational at this time, we cannot guarantee that we will be able to adequately staff our operations when needed, particularly as the COVID-19 pandemic progresses, which may strain our existing personnel, increase costs, and negatively impact our operations. As a result, our internal operations may experience disruptions. The pandemic may create additional challenges in attracting and retaining quality employees in the future. In addition, COVID-19 related-illness could impact members of our Board of Directors resulting in absenteeism from meetings of the directors or committees of directors, making it more difficult to convene the quorums of the full Board of Directors or its committees needed to conduct meetings for the management of our affairs. We cannot predict the extent to which the COVID-19 pandemic may disrupt our workforce and internal operations.

We have taken certain precautions due to the COVID-19 pandemic that could harm our business.

In response to the COVID-19 pandemic, we have taken measures intended to protect the health and well-being of our employees, customers and our communities, which could negatively impact our business. These measures include temporarily requiring certain employees to work remotely, restricted employee travel, increasing the frequency and extent of cleaning and disinfecting facilities, developing social distancing plans, and cancelling in-person meetings, events and conferences. The health of our workforce, customers and others is of primary concern and we may take further actions as may be required by government authorities or as we determine are in the best interests of our employees, customers and others. In addition, our management team has, and will likely continue to, spend significant time, attention and resources monitoring the COVID-19 pandemic and seeking to manage its effects on our business and workforce. The extent to which the pandemic and our precautionary measures may impact our business will depend on future developments, which are highly uncertain and cannot be predicted at this time.

The COVID-19 pandemic may decrease demand for our services and any such decrease in demand would adversely affect our backlog, revenues and results of operations.

The COVID-19 pandemic is creating uncertainty in the markets we serve and the duration, scope or impact of the outbreak cannot be predicted. While we have experienced some increase in demand from the medical and aerospace & defense sectors, we may face decreased demand in these or other sectors in the future. Demand for our services may be affected by changes in demand from our customers as a result of the pandemic, including any heightened emphasis on shorter lead times which places increased demands on our capacity and may result in increased costs, or the ordering of smaller quantities which prevents us from acquiring component materials in larger volumes at lower costs. In addition, the COVID-19 pandemic may require customers to make unexpected changes to their product offerings which may adversely affect our business and operating results. Any material modifications, delays, payment defaults or cancellations on underlying contracts relating to the COVID-19 pandemic could reduce the amount of backlog currently reported and, consequently, could inhibit the conversion of that backlog into revenues. In addition, worsening overall market conditions could result in further reductions of backlog, which will impact our financial performance. While the pandemic is expected to affect customer demand, it is difficult to predict such changes at this time and the impact that such changes will have on our revenues and operating margins. There can be no assurance that we will be successful in implementing effective strategies to counter any changes in demand. Any decrease in demand or disruption to our business resulting from the COVID-19 pandemic would adversely affect our revenues and results of operations.

We may be unable to meet the demands of our customers, including those in the aerospace & defense and medical sectors, as expected which may adversely and materially affect our business, results of operations and financial conditions.

During the second quarter of fiscal 2020, the aerospace & defense sector represented 60% of our business and the medical sector represented 24% of our business. Due to the nature of the lifesaving and mission critical products provided by these markets, many of our customers in these sectors are deemed to be essential businesses. In response to the pandemic and the increased demand for aerospace & defense, medical and lifesaving products, we experienced some increases in demand from existing customers in the aerospace & defense and medical sectors. This demand has increased at the same time our supply chain has begun to face limitations, which may result in a shortage of supply, increased costs, and delays, requiring us in certain instances to pass through expenses or otherwise increase prices. Customers may reject any attempts to pass through expenses or increase pricing which would negatively impact our business. Further, if we are unable to ramp up our production, hire and onboard sufficient staff to meet the increased demand, or if we are otherwise unable to timely meet the demand from our customers, our business and results of operations will be negatively affected. The realization of our backlog is affected by our performance and the late completion of a project may result in decreased revenues derived from those projects. In addition, the increase in demand we are currently experiencing from the medical sector as a result of the COVID-19 pandemic may not continue after the pandemic subsides. Moreover, the increase in demand may result in decreased demand for such products after the COVID-19 pandemic subsides because there may be a large surplus of such medical products after the pandemic subsides.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not Applicable

Item 5. Other Information

None

Item 6. Exhibits

INDEX TO EXHIBITS


Exhibit No.						Description
31.1*						Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*						Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*						Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101						The following items from this Quarterly Report on Form 10-Q formatted in Extensible Business Reporting Language: (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Income Statements (unaudited), (iii) Consolidated Statements of Changes in Stockholders’ Equity (unaudited), (iv) Consolidated Statements of Cash Flows (unaudited), and (v) Notes to Consolidated Financial Statements.

* Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		IEC Electronics Corp.
		(Registrant)

May 6, 2020	By:	/s/ Thomas L. Barbato
		Thomas L. Barbato
		Senior Vice President and Chief Financial Officer
		(On behalf of the Registrant and as Principal Financial and Accounting Officer)

Document

Exhibit 31.1

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Jeffrey T. Schlarbaum, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the three and six months ended March 27, 2020 of IEC Electronics Corp.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be

designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Dated: May 6, 2020	By:	/s/ Jeffrey T. Schlarbaum
		Jeffrey T. Schlarbaum
		President & Chief Executive Officer
		(On behalf of the Registrant and as Principal Executive Officer)

Document

Exhibit 31.2

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Thomas L. Barbato, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the three and six months ended March 27, 2020 of IEC Electronics Corp.;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Dated: May 6, 2020						/s/ Thomas L. Barbato
						Thomas L. Barbato
						Senior Vice President and Chief Financial Officer
						(On behalf of the Registrant and as Principal Financial and Accounting Officer)

Document

Exhibit 32.1

Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of IEC Electronics Corp. (the "Company") on Form 10-Q for the three and six months ended March 27, 2020 as filed with the Securities and Exchange Commission on the day hereof (the "Report"), I, Jeffrey T. Schlarbaum, President & Chief Executive Officer of the Company and I, Thomas L. Barbato, Senior Vice President and Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Dated: May 6, 2020						/s/ Jeffrey T. Schlarbaum
						Jeffrey T. Schlarbaum
						President & Chief Executive Officer
						(On behalf of the Registrant and as Principal Executive Officer)


Dated: May 6, 2020						/s/ Thomas L. Barbato
						Thomas L. Barbato
						Senior Vice President and Chief Financial Officer
						(On behalf of the Registrant and as Principal Financial and Accounting Officer)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 27, 2020	Mar. 29, 2019	Mar. 27, 2020	Mar. 29, 2019
Income Statement [Abstract]
Net sales	$ 44,171	$ 37,294	$ 88,905	$ 72,735
Cost of sales	38,668	32,708	78,163	63,090
Gross profit	5,503	4,586	10,742	9,645
Selling and administrative expenses	3,217	3,328	6,516	6,680
Operating income	2,286	1,258	4,226	2,965
Interest and financing expense	396	385	811	708
Income before income taxes	1,890	873	3,415	2,257
Income tax expense	367	203	703	515
Net Income (Loss) Attributable to Parent, Diluted		670	2,712	1,742
Net income/(loss)	$ 1,523	$ 670	$ 2,712	$ 1,742
Weighted average number of shares outstanding:
Basic (in shares)	10,393,461	10,286,876	10,379,846	10,274,772
Diluted (in shares)	10,703,112	10,678,058	10,666,001	10,574,076
Basic net income (loss) per share (in usd per share)	$ 0.15	$ 0.06	$ 0.26	$ 0.17
Diluted net income (loss) per share (in usd per share)	$ 0.14	$ 0.06	$ 0.25	$ 0.16

INVENTORIES (Details) - USD ($) $ in Thousands	Mar. 27, 2020	Sep. 30, 2019
Inventory Disclosure [Abstract]
Raw materials	$ 28,644	$ 25,393
Work-in-process	13,308	15,928
Finished goods	3,101	2,946
Total inventories	$ 45,053	$ 44,267

CREDIT FACILITIES - Narrative (Details) - USD ($)					1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
CREDIT FACILITIES - Narrative (Details) - USD ($)	May 06, 2019	Mar. 18, 2019	Sep. 27, 2018	Jul. 26, 2018	Jan. 31, 2013	Mar. 27, 2020	Mar. 29, 2019	Mar. 27, 2020	Mar. 29, 2019	Sep. 30, 2019	Jan. 18, 2013
Line of Credit Facility [Line Items]
Maximum borrowing capacity						$ 35,000,000.0		$ 35,000,000.0
Advances from revolving credit facility								36,680,000	$ 39,307,000
Repayments of long-term debt						29,553,000		29,553,000		$ 30,281,000
Commitment fee amount						6,700	$ 4,500	12,500	$ 12,700
Credit Agreement 2013 [Member] \| Term Loan B [Member]
Line of Credit Facility [Line Items]
Long-term line of credit											$ 14,000,000.0
Repayment monthly installments					120 equal monthly installments
Line of credit facility, periodic payment, principal					$ 117,000			71,000
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid						600,000		600,000
Face amount						6,000,000.0		6,000,000.0			$ 8,000,000.0
Basis spread on variable rate										2.50%
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity						35,000,000.0		$ 35,000,000.0
Maturity date								May 05, 2022
Repayments of long-term debt						$ 26,600,000		$ 26,600,000		$ 26,646,000
Maximum borrowing capacity as percentage of eligible receivables						85.00%		85.00%
Maximum borrowing capacity based on eligible inventories						$ 14,000,000.0		$ 14,000,000.0
Current borrowing capacity						35,000,000.0		35,000,000.0		35,000,000.0
Line of Credit Facility, Remaining Borrowing Capacity						8,400,000		$ 8,400,000		$ 8,400,000
Line of Credit Facility, Average Outstanding Amount						25,100,000	$ 18,400,000
Revolving Credit Facility [Member] \| Minimum [Member]
Line of Credit Facility [Line Items]
Unused capacity, commitment fee percentage								0.25%
Revolving Credit Facility [Member] \| Maximum [Member]
Line of Credit Facility [Line Items]
Unused capacity, commitment fee percentage								0.375%
Revolving Credit Facility [Member] \| Credit Agreement 2013 [Member]
Line of Credit Facility [Line Items]
Average borrowing capacity						$ 27,000,000.0		$ 27,000,000.0
Basis spread on variable rate								2.25%
Line of Credit Facility, Covenant, Minimum Fixed Charge Coverage Ratio						1.10		1.10
Equipment Line Advances [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity						$ 1,500,000		$ 1,500,000
Equipment Line Advances Term Note [Member]
Line of Credit Facility [Line Items]
Debt Conversion, Converted Instrument, Amount	$ 400,000	$ 300,000	$ 100,000	$ 800,000
Debt instrument, periodic payment, principal	$ 11,000	$ 9,000	$ 2,000	$ 21,000
Term Loan B [Member]
Line of Credit Facility [Line Items]
Maturity date								May 05, 2022

ALLOWANCE FOR DOUBTFUL ACCOUNTS

6 Months Ended

Mar. 27, 2020

Receivables [Abstract]

ALLOWANCE FOR DOUBTFUL ACCOUNTS

NOTE 3—ALLOWANCE FOR DOUBTFUL ACCOUNTS

A summary follows of activity in the allowance for doubtful accounts during the six months ended March 27, 2020 and March 29, 2019:


	Six Months Ended
Allowance for doubtful accounts	March 27, 2020		March 29, 2019
(in thousands)
Allowance, beginning of period	$	71	$	85
Increase in provision for doubtful accounts	48		(39)
Write-offs	—		(7)
Allowance, end of period	$	119	$	39

STOCK-BASED COMPENSATION - Valuation Assumptions (Details) - $ / shares	6 Months Ended
	Mar. 27, 2020	Mar. 29, 2019
Value of options granted:
Number of options granted (in shares)	30,000	10,000
Weighted average fair value per share (in dollars per share)	$ 2.68	$ 2.40
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Minimum	0.51%	2.85%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term, Simplified Method	5.5	5.5
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price	$ 5.03	$ 6.20
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate	40.00%	37.00%

MARKET SECTORS AND MAJOR CUSTOMERS (Tables)

6 Months Ended

Mar. 27, 2020

Risks and Uncertainties [Abstract]

Schedules of Concentration of Risk, by Risk Factor

A summary of sales, according to the market sector within which IEC’s customers operate, follows:


	Three Months Ended			Six Months Ended
% of Sales by Sector	March 27, 2020	March 29, 2019	March 27, 2020	March 29, 2019

Aerospace & Defense	60%	62%	61%	57%
Medical	24%	19%	24%	23%
Industrial	16%	19%	15%	20%
	100%	100%	100%	100%

CREDIT FACILITIES (Tables)

6 Months Ended

Mar. 27, 2020

Debt Disclosure [Abstract]

Schedule of Debt

A summary of borrowings at period end follows:


			March 27, 2020						September 30, 2019
Credit Facility Debt	Fixed/Variable Rate	Maturity Date	Balance		Interest Rate		Balance		Interest Rate
(in thousands)
M&T Bank credit facilities:
Revolving Credit Facility	v	5/5/2022	$	26,563	3.25	%	$	26,646	4.31	%
Term Loan B	v	5/5/2022	2,351		4.08		2,779		4.59

Equipment Line Term Note	v	Various	868		3.44		1,125		4.56
Total debt, gross			29,782				30,550
Unamortized debt issuance costs			(229)				(269)
Total debt, net			29,553				30,281
Less: current portion			(1,371)				(1,371)
Long-term debt			$	28,182			$	28,910

Schedule of Maturities of Long-term Debt


Debt Repayment Schedule			Contractual Principal Payments
(in thousands)
Twelve months ending March
2021	$	1,371
2022	1,190
2023 ¹	27,221


	$	29,782

1 Includes Revolver balance of $26.6 million at March 27, 2020

REVENUE RECOGNITION (Tables)

6 Months Ended

Mar. 27, 2020

Revenue from Contract with Customer [Abstract]

Schedule of Net Sales from Contracts with Customers by Market Sector

The tables below show net sales from contracts with customers by market sector. See additional information regarding market sectors in Note 10—Market Sectors and Major Customers.


	Three Months Ended
	March 27, 2020										March 29, 2019
	Point in Time		Over Time		Net Sales		Point in Time		Over Time		Net Sales
(in thousands)
Aerospace & Defense	$	12,336	$	14,167	$	26,503	$	11,075	$	12,047	$	23,122
Medical	3,151		7,450		10,601		3,872		3,214		7,086
Industrial	5,430		1,637		7,067		4,583		2,503		7,086
	$	20,917	$	23,254	$	44,171	$	19,530	$	17,764	$	37,294

Schedule of Impact of Topic 606 Adoption on Consolidated Financial Statements


	Six Months Ended
	March 27, 2020		March 29, 2019
(in thousands)
Beginning balance	$	13,229	$	7,595
Recognition of deferred revenue	(8,573)		(4,821)
Deferral of revenue	11,146		7,452
Ending balance	$	15,802	$	10,226

LEASES (Tables)

6 Months Ended

Mar. 27, 2020

Leases [Abstract]

Supplmental balance Sheet Information Related to the Company's Leases

Supplemental balance sheet information related to the Company’s operating leases were as follows:


	March 27, 2020

Weighted average remaining lease term for operating leases (in years)	4.2
Weighted average discount rate for operating leases	5.47	%

Components of Lease Expense and Supplemental Cash Flow Information


		Three Months Ended		Six Months Ended
Lease Expense	Classification	March 27, 2020		March 27, 2020
(in thousands)
Operating lease expense
Fixed payment operating lease expense ¹	Cost of sales	$	68	$	93
Fixed payment operating lease expense	Selling and administrative expenses	15		29
Variable payment operating lease expense		—		—
Finance lease expense
Depreciation of ROU assets	Cost of sales	144		273
Interest	Interest and financing expense	88		174
Total lease expense		$	315	$	569

¹ Includes short-term leases which are not material.

Supplemental Cash Flow Information

Supplemental cash flow information related to the Company's leases during the six months ended March 27, 2020 were as follows:


	Six Months Ended
Supplemental Cash Flow	March 27, 2020
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Cash paid for operating lease ROU assets	$	47
Interest paid on finance leases	174
Financing cash flows from finance leases	—

Lease liabilities arising from obtaining ROU assets:
Operating leases	33

Summary of Operating Lease Payments

A summary of operating lease payments for the next five years follows:


Operating Lease Payment Schedule	Contractual Lease Payments
(in thousands)
Twelve months ending March
2021	$	77
2022	73
2023	72
2024	72
2025 and thereafter	18
Total operating lease payments	312
Less: amounts representing interest	(38)
Total operating lease obligation	$	274

Summary of Finance Lease Payments

A summary of finance lease payments for the next five years follows:


Finance Lease Payment Schedule	Contractual Lease Payments
(in thousands)
Twelve months ending March
2021	$	760
2022	774
2023	788
2024	802
2025 and thereafter	6,481
Total finance lease payments	9,605
Less: amounts representing interest	(2,349)
Total finance lease obligation	$	7,256

Schedule of Future Minimum Lease Payments for Capital Leases


Capital Lease Payment Schedule	Contractual Payments
(in thousands)
Twelve months ending September 30,
2020	$	673
2021	686
2022	700
2023	714
2024 and thereafter	6,720
Total capital lease payments	9,493
Less: amounts representing interest	(2,470)
Present value of minimum lease payment	$	7,023

REVENUE RECOGNITION - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 27, 2020	Mar. 29, 2019	Oct. 01, 2018
Disaggregation of Revenue [Line Items]
Net income			$ 441
Product Concentration Risk [Member] \| Sales Revenue, Net [Member] \| Value-added support services revenue, including material management and repair work revenue [Member]
Disaggregation of Revenue [Line Items]
Percentage of sales revenue	2.00%	2.00%
Point in Time \| Product Concentration Risk [Member] \| Sales Revenue, Net [Member]
Disaggregation of Revenue [Line Items]
Percentage of sales revenue	47.40%
Over Time \| Product Concentration Risk [Member] \| Sales Revenue, Net [Member]
Disaggregation of Revenue [Line Items]
Percentage of sales revenue	52.60%

REVENUE RECOGNITION - Customer Deposits (Details) - USD ($) $ in Thousands	6 Months Ended
	Mar. 27, 2020	Mar. 29, 2019
Revenue from Contract with Customer [Abstract]
Beginning balance	$ 13,229	$ 7,595
Recognition of deferred revenue	(8,573)	(4,821)
Deferral of revenue	11,146	7,452
Ending balance	$ 15,802	$ 10,226

LEASES

6 Months Ended

Mar. 27, 2020

Leases [Abstract]

LEASES

NOTE 12—LEASES

Operating Leases

Supplemental balance sheet information related to the Company’s operating leases were as follows:


	March 27, 2020

Weighted average remaining lease term for operating leases (in years)	4.2
Weighted average discount rate for operating leases	5.47	%

Finance Leases

Supplemental balance sheet information related to the Company’s finance leases were as follows:


	March 27, 2020

Finance lease right-of-use assets, net of accumulated amortization (included in PP&E) (in thousands)	$	6,617
Weighted average remaining lease term for finance leases (in years)	11.7
Weighted average discount rate for finance leases	4.83		%

Lease Expense


		Three Months Ended		Six Months Ended
Lease Expense	Classification	March 27, 2020		March 27, 2020
(in thousands)
Operating lease expense
Fixed payment operating lease expense ¹	Cost of sales	$	68	$	93
Fixed payment operating lease expense	Selling and administrative expenses	15		29
Variable payment operating lease expense		—		—
Finance lease expense
Depreciation of ROU assets	Cost of sales	144		273
Interest	Interest and financing expense	88		174
Total lease expense		$	315	$	569

¹ Includes short-term leases which are not material.

Supplemental Cash Flow Information

Supplemental cash flow information related to the Company's leases during the six months ended March 27, 2020 were as follows:


	Six Months Ended
Supplemental Cash Flow	March 27, 2020
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Cash paid for operating lease ROU assets	$	47
Interest paid on finance leases	174
Financing cash flows from finance leases	—

Lease liabilities arising from obtaining ROU assets:
Operating leases	33

Contractual Lease Payments

A summary of operating lease payments for the next five years follows:


Operating Lease Payment Schedule	Contractual Lease Payments
(in thousands)
Twelve months ending March
2021	$	77
2022	73
2023	72
2024	72
2025 and thereafter	18
Total operating lease payments	312
Less: amounts representing interest	(38)
Total operating lease obligation	$	274

A summary of finance lease payments for the next five years follows:


Finance Lease Payment Schedule	Contractual Lease Payments
(in thousands)
Twelve months ending March
2021	$	760
2022	774
2023	788
2024	802
2025 and thereafter	6,481
Total finance lease payments	9,605
Less: amounts representing interest	(2,349)
Total finance lease obligation	$	7,256

Disclosures Related to Periods Prior to Adoption of the New Lease Standard


Capital Lease Payment Schedule	Contractual Payments
(in thousands)
Twelve months ending September 30,
2020	$	673
2021	686
2022	700
2023	714
2024 and thereafter	6,720
Total capital lease payments	9,493
Less: amounts representing interest	(2,470)
Present value of minimum lease payment	$	7,023

LEASES

NOTE 12—LEASES

Operating Leases

Supplemental balance sheet information related to the Company’s operating leases were as follows:


	March 27, 2020

Weighted average remaining lease term for operating leases (in years)	4.2
Weighted average discount rate for operating leases	5.47	%

Finance Leases

Supplemental balance sheet information related to the Company’s finance leases were as follows:


	March 27, 2020

Finance lease right-of-use assets, net of accumulated amortization (included in PP&E) (in thousands)	$	6,617
Weighted average remaining lease term for finance leases (in years)	11.7
Weighted average discount rate for finance leases	4.83		%

Lease Expense


		Three Months Ended		Six Months Ended
Lease Expense	Classification	March 27, 2020		March 27, 2020
(in thousands)
Operating lease expense
Fixed payment operating lease expense ¹	Cost of sales	$	68	$	93
Fixed payment operating lease expense	Selling and administrative expenses	15		29
Variable payment operating lease expense		—		—
Finance lease expense
Depreciation of ROU assets	Cost of sales	144		273
Interest	Interest and financing expense	88		174
Total lease expense		$	315	$	569

¹ Includes short-term leases which are not material.

Supplemental Cash Flow Information

Supplemental cash flow information related to the Company's leases during the six months ended March 27, 2020 were as follows:


	Six Months Ended
Supplemental Cash Flow	March 27, 2020
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Cash paid for operating lease ROU assets	$	47
Interest paid on finance leases	174
Financing cash flows from finance leases	—

Lease liabilities arising from obtaining ROU assets:
Operating leases	33

Contractual Lease Payments

A summary of operating lease payments for the next five years follows:


Operating Lease Payment Schedule	Contractual Lease Payments
(in thousands)
Twelve months ending March
2021	$	77
2022	73
2023	72
2024	72
2025 and thereafter	18
Total operating lease payments	312
Less: amounts representing interest	(38)
Total operating lease obligation	$	274

A summary of finance lease payments for the next five years follows:


Finance Lease Payment Schedule	Contractual Lease Payments
(in thousands)
Twelve months ending March
2021	$	760
2022	774
2023	788
2024	802
2025 and thereafter	6,481
Total finance lease payments	9,605
Less: amounts representing interest	(2,349)
Total finance lease obligation	$	7,256

Disclosures Related to Periods Prior to Adoption of the New Lease Standard


Capital Lease Payment Schedule	Contractual Payments
(in thousands)
Twelve months ending September 30,
2020	$	673
2021	686
2022	700
2023	714
2024 and thereafter	6,720
Total capital lease payments	9,493
Less: amounts representing interest	(2,470)
Present value of minimum lease payment	$	7,023

STOCK-BASED COMPENSATION

6 Months Ended

Mar. 27, 2020

Share-based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

NOTE 8—STOCK-BASED COMPENSATION

At March 27, 2020, there were 621,369 shares of common stock remaining available to be issued under the 2019 Plan and 83,252 shares of common stock remaining available to be issued under the ESPP.

Stock Options

Assumptions used in the Black-Scholes model and the estimated value of options granted during the six months ended March 27, 2020 and March 29, 2019 follows:


	Six Months Ended
Valuation of Options	March 27, 2020			March 29, 2019
Assumptions for Black-Scholes:
Risk-free interest rate	0.51		%	2.85		%
Expected term in years	5.5			5.5
Volatility	40		%	37		%
Expected annual dividends	none			none

Value of options granted:
Number of options granted	30,000			10,000
Weighted average fair value per share	$	2.68		$	2.40
Fair value of options granted (000s)	$	80		$	24

A summary of stock option activity, together with other related data, follows:


	Six Months Ended
	March 27, 2020				March 29, 2019
Stock Options	Number of Options	Wgtd. Avg. Exercise Price		Number of Options	Wgtd. Avg. Exercise Price

Outstanding, beginning of period	743,145	$	4.54	737,145	$	4.33
Granted	30,000	5.03		10,000	6.20
Exercised	(26,000)	5.31		(26,500)	4.71
Forfeited	(10,000)	3.58		(24,250)	3.70
Expired	(5,000)	6.91		(5,000)	4.08
Outstanding, end of period	732,145	$	4.53	691,395	$	4.36

For options expected to vest
Number expected to vest	722,582	$	4.51	683,135	$	4.35
Weighted average remaining contractual term, in years	3.3			3.6
Intrinsic value (000s)		$	1,510		$	1,706

For exercisable options
Number exercisable	545,645	$	4.16	510,895	$	4.18
Weighted average remaining contractual term, in years	1.9			2.9
Intrinsic value (000s)		$	1,354		$	1,365

For non-exercisable options
Expense not yet recognized (000s)		$	357		$	230
Weighted average years to be recognized	3.1			3.3

For options exercised
Intrinsic value (000s)		$	75		$	57

Restricted (Non-vested) Stock

A summary of restricted stock activity, together with related data, follows:


	Six Months Ended
	March 27, 2020				March 29, 2019
Restricted (Non-vested) Stock	Number of Non-vested Shares	Wgtd. Avg. Grant Date Fair Value		Number of Non-vested Shares	Wgtd. Avg. Grant Date Fair Value

Outstanding, beginning of period	82,707	$	5.25	103,233	$	4.08
Granted	24,850	5.03		15,000	6.97
Vested	(36,812)	4.43		(46,136)	4.09
Forfeited	(13,250)	6.09		(1,400)	4.13
Outstanding, end of period	57,495	$	5.49	70,697	$	4.72

For non-vested shares
Expense not yet recognized (000s)		$	286		$	291
Weighted average remaining years for vesting	1.9			2.1

For shares vested
Aggregate fair value on vesting dates (000s)		$	260		$	311

Stock Issued to Board Members

Restricted Stock Units

A summary of restricted stock unit activity, together with related data, follows:


	Six Months Ended
	March 27, 2020				March 29, 2019
Restricted Stock Units	Number of Non-vested Units	Wgtd. Avg. Grant Date Fair Value		Number of Non-vested Units	Wgtd. Avg. Grant Date Fair Value

Outstanding, beginning of period	153,186	$	5.36	170,492	$	3.96
Granted	50,556	9.19		—	—
Vested	(17,015)	3.58		—	—
Forfeited	—	—		—	—
Outstanding, end of period	186,727	$	6.56	170,492	$	3.96

For non-vested shares
Expense not yet recognized (000s)		$	906		$	282
Weighted average remaining years for vesting	2.2			1.9

For shares vested
Aggregate fair value on vesting dates (000s)		$	86		$	—

LEASES - Components of Operating Lease Expense and Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Mar. 27, 2020	Mar. 27, 2020	Mar. 29, 2019
Leases [Abstract]
Operating Lease, Expense	$ 15	$ 29
Finance Lease, Right-of-Use Asset, Amortization	144	273
Cash paid for amounts included in the measurement of lease liabilities:	68	93
Cash paid for operating lease ROU assets		47
ROU assets obtained in exchange for new finance lease liabilities		415	$ 0
Finance Lease, Interest Expense	$ 88	$ 174

MARKET SECTORS AND MAJOR CUSTOMERS - Summary of Sales (Details) - Sales Revenue, Segment [Member]	3 Months Ended		6 Months Ended
	Mar. 27, 2020	Mar. 29, 2019	Mar. 27, 2020	Mar. 29, 2019
Concentration Risk [Line Items]
Percentage of sales revenue	100.00%	100.00%	100.00%	100.00%
Aerospace & Defense
Concentration Risk [Line Items]
Percentage of sales revenue	60.00%	62.00%	61.00%	57.00%
Medical
Concentration Risk [Line Items]
Percentage of sales revenue	24.00%	19.00%	24.00%	23.00%
Industrial
Concentration Risk [Line Items]
Percentage of sales revenue	16.00%	19.00%	15.00%	20.00%

STOCK-BASED COMPENSATION - Summary of Restricted Stock Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended
	Mar. 27, 2020	Mar. 29, 2019
Number of Non-vested Shares [Roll Forward]
Vested (in shares)	(36,812)
Wgtd. Avg. Grant Date Fair Value [Roll Forward]
Granted (in dollars per share)	$ 5.03
Restricted Stock [Member]
Number of Non-vested Shares [Roll Forward]
Outstanding, beginning of period (in shares)	82,707	103,233
Granted (in shares)	24,850	15,000
Vested (in shares)		(46,136)
Forfeited (in shares)	(13,250)	(1,400)
Outstanding, end of period (in shares)	57,495	70,697
Wgtd. Avg. Grant Date Fair Value [Roll Forward]
Outstanding, beginning of period (in dollars per share)	$ 5.25	$ 4.08
Granted (in dollars per share)		6.97
Vested (in dollars per share)	4.43	4.09
Forfeited (in dollars per share)	6.09	4.13
Outstanding, end of period (in dollars per share)	$ 5.49	$ 4.72
For non-vested shares
Expense not yet recognized (000s)	$ 286	$ 291
Weighted average remaining years for vesting	1 year 10 months 24 days	2 years 1 month 6 days
For shares vested
Aggregate fair value on vesting dates (000s)	$ 260	$ 311

ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($) $ in Thousands	6 Months Ended
	Mar. 27, 2020	Mar. 29, 2019
Allowance for Doubtful Accounts Receivable [Roll Forward]
Allowance, beginning of period	$ 71	$ 85
Increase in provision for doubtful accounts	48	(39)
Write-offs	0	(7)
Allowance, end of period	$ 119	$ 39

NET INCOME PER SHARE (Tables)

6 Months Ended

Mar. 27, 2020

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

A summary of shares used in the EPS calculations follows (in thousands except share and per share data):


	Three Months Ended						Six Months Ended
Net Income Per Share	March 27, 2020		March 29, 2019		March 27, 2020		March 29, 2019
(in thousands, except share and per share data)
Basic net income per share:
Net income	$	1,523	$	670	$	2,712	$	1,742
Less: Income attributable to non-vested shares	8		4		15		9
Net income available to common stockholders	$	1,515	$	666	$	2,697	$	1,733

Weighted average common shares outstanding	10,393,461		10,286,876		10,379,846		10,274,772

Basic net income per share	$	0.15	$	0.06	$	0.26	$	0.17

Diluted net income per share:
Net income	$	1,523	$	670	$	2,712	$	1,742
Shares used in computing basic net income per share	10,393,461		10,286,876		10,379,846		10,274,772
Dilutive effect of non-vested shares	309,651		391,182		286,155		299,304
Shares used in computing diluted net income per share	10,703,112		10,678,058		10,666,001		10,574,076

Diluted net income per share	$	0.14	$	0.06	$	0.25	$	0.16

REVENUE RECOGNITION - Schedule of Net Sales from Contracts with Customers by Market Sector (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 27, 2020	Mar. 29, 2019	Mar. 27, 2020	Mar. 29, 2019
Disaggregation of Revenue [Line Items]
Net sales	$ 44,171	$ 37,294	$ 88,905	$ 72,735
Aerospace & Defense
Disaggregation of Revenue [Line Items]
Net sales	26,503	23,122	54,232	41,459
Medical
Disaggregation of Revenue [Line Items]
Net sales	10,601	7,086	21,337	16,729
Industrial
Disaggregation of Revenue [Line Items]
Net sales	7,067	7,086	13,336	14,547
Point in Time
Disaggregation of Revenue [Line Items]
Net sales	20,917	19,530	44,321	36,360
Point in Time \| Aerospace & Defense
Disaggregation of Revenue [Line Items]
Net sales	12,336	11,075	26,792	19,002
Point in Time \| Medical
Disaggregation of Revenue [Line Items]
Net sales	3,151	3,872	6,901	8,040
Point in Time \| Industrial
Disaggregation of Revenue [Line Items]
Net sales	5,430	4,583	10,628	9,318
Over Time
Disaggregation of Revenue [Line Items]
Net sales	23,254	17,764	44,584	36,375
Over Time \| Aerospace & Defense
Disaggregation of Revenue [Line Items]
Net sales	14,167	12,047	27,440	22,457
Over Time \| Medical
Disaggregation of Revenue [Line Items]
Net sales	7,450	3,214	14,436	8,689
Over Time \| Industrial
Disaggregation of Revenue [Line Items]
Net sales	$ 1,637	$ 2,503	$ 2,708	$ 5,229

COMMITMENTS AND CONTINGENCIES	6 Months Ended
COMMITMENTS AND CONTINGENCIES	Mar. 27, 2020
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 11—COMMITMENTS AND CONTINGENCIES Litigation From time to time, the Company may be involved in legal actions in the ordinary course of its business, but management does not believe that any such proceedings, individually or in the aggregate, will have a material adverse effect on the Company’s condensed consolidated financial statements.

WARRANTY RESERVES

6 Months Ended

Mar. 27, 2020

Product Warranties Disclosures [Abstract]

WARRANTY RESERVES

NOTE 7—WARRANTY RESERVES

A summary of additions to and charges against IEC’s warranty reserves during the period follows:


	Six Months Ended
Warranty Reserve	March 27, 2020		March 29, 2019
(in thousands)
Reserve, beginning of period	$	165	$	173
Provision	27		27
Warranty costs	(50)		(56)
Reserve, end of period	$	142	$	144

INCOME TAXES - Narrative (Details)	3 Months Ended
INCOME TAXES - Narrative (Details)	Mar. 27, 2020
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent	1.58%

STOCK-BASED COMPENSATION - Changes in Non-Vested Options Outstanding (Details) - $ / shares	6 Months Ended
	Mar. 27, 2020	Mar. 29, 2019
Number of Options
Granted (in shares)	30,000	10,000
Wgtd. Avg. Grant Date Fair Value
Granted (in dollars per share)	$ 2.68	$ 2.40

LEASES - Supplemental Balance Sheet Information Related To Operating Leases (Details) - USD ($) $ in Thousands	Mar. 27, 2020	Oct. 01, 2019	Sep. 30, 2019
Leases [Abstract]
Operating lease right-of-use assets, net of accumulated amortization		$ 300
Operating lease liabilities, current	$ 59		$ 0
Operating lease liabilities, non-current	$ 215		$ 0
Weighted average remaining lease term for operating leases (in years)	4 years 2 months 12 days
Weighted average discount rate for operating leases (percent)	5.47%

NET INCOME PER SHARE Earnings Per Share - Summary of Shares Used in EPS Calculation (Details) $ / shares in Units, $ in Thousands	3 Months Ended				6 Months Ended
	Mar. 27, 2020 USD ($) $ / shares shares	Dec. 27, 2019 USD ($)	Mar. 29, 2019 USD ($) $ / shares shares	Dec. 28, 2018 USD ($)	Mar. 27, 2020 USD ($) $ / shares shares	Mar. 29, 2019 USD ($) $ / shares shares
Earnings Per Share [Abstract]
Common stock, number of classes	2				2
Basic net income per share:
Net income \| $	$ 1,523	$ 1,189	$ 670	$ 1,072	$ 2,712	$ 1,742
Less: Income attributable to non-vested shares \| $	8		4		15	9
Net income available to common stockholders \| $	$ 1,515		$ 666		$ 2,697	$ 1,733
Basic (in shares)	10,393,461		10,286,876		10,379,846	10,274,772
Basic net income (loss) per share (in usd per share) \| $ / shares	$ 0.15		$ 0.06		$ 0.26	$ 0.17
Diluted net income per share:
Net income \| $			$ 670		$ 2,712	$ 1,742
Shares used in computing basic net income (loss) per share(in shares)	10,393,461		10,286,876		10,379,846	10,274,772
Dilutive effect of non-vested shares	309,651		391,182		286,155	299,304
Shares used in computing diluted net income per share	10,703,112		10,678,058		10,666,001	10,574,076
Diluted net income (loss) per share (in usd per share) \| $ / shares	$ 0.14		$ 0.06		$ 0.25	$ 0.16
Anti-dilutive shares excluded (in shares)	0		0		0	19,583

INVENTORIES

6 Months Ended

Mar. 27, 2020

Inventory Disclosure [Abstract]

INVENTORIES

NOTE 4—INVENTORIES

A summary of inventory by category at period end follows:


Inventories	March 27, 2020		September 30, 2019
(in thousands)
Raw materials	$	28,644	$	25,393
Work-in-process	13,308		15,928
Finished goods	3,101		2,946
Total inventories	$	45,053	$	44,267

STOCK-BASED COMPENSATION - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended
	Mar. 27, 2020	Mar. 29, 2019
Number of Options
Outstanding, beginning of period (in shares)	743,145	737,145
Granted (in shares)	30,000	10,000
Exercised (in shares)	(26,000)	(26,500)
Forfeited (in shares)	(10,000)	(24,250)
Expired (in shares)	(5,000)	(5,000)
Outstanding, end of period (in shares)	732,145	691,395
Wgtd. Avg. Exercise Price
Outstanding, beginning of period (in dollars per share)	$ 4.54	$ 4.33
Granted (in dollars per share)	5.03	6.20
Exercised (in dollars per share)	5.31	4.71
Forfeited (in dollars per share)	3.58	3.70
Expired (in dollars per share)	6.91	4.08
Outstanding, end of period (in dollars per share)	$ 4.53	$ 4.36
For options expected to vest
Number expected to vest (in shares)	722,582	683,135
Number expected to vest (in dollars per share)	$ 4.51	$ 4.35
Weighted average remaining term, in years	3 years 3 months 18 days	3 years 7 months 6 days
Intrinsic value (000s)	$ 1,510	$ 1,706
For exercisable options
Number exercisable (in shares)	545,645	510,895
Number exercisable (in dollars per share)	$ 4.16	$ 4.18
Weighted average remaining term, in years	1 year 10 months 24 days	2 years 10 months 24 days
Intrinsic value (000s)	$ 1,354	$ 1,365
For non-exercisable options
Expense not yet recognized (000s)	$ 357	$ 230
Weighted average years to be recognized	3 years 1 month 6 days	3 years 3 months 18 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value	$ 75	$ 57

PROPERTY, PLANT & EQUIPMENT - Summary of Fixed Assets (Details) - USD ($) $ in Thousands	Mar. 27, 2020	Sep. 30, 2019
Property, Plant and Equipment [Abstract]
Land and improvements	$ 788	$ 788
Buildings and improvements	7,430	7,411
Building under capital lease	7,750	7,750
Machinery and equipment	32,869	31,708
Furniture and fixtures	8,290	8,047
Capitalized Computer Software, Gross	5,215	5,215
Construction in progress	1,087	1,173
Total property, plant and equipment, at cost	63,429	62,092
Accumulated depreciation	(44,197)	(42,659)
Property, plant and equipment, net	$ 19,232	$ 19,433

CONDENSED CONSOLIDATED STATEMENTS of CHANGES in STOCKHOLDERS' EQUITY (unaudited) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Treasury Stock, at cost
Beginning balance (shares) at Sep. 30, 2018	10,338,548	10,248,905
Beginning Balance at Sep. 30, 2018	$ 25,376	$ 102	$ 47,326	$ (20,463)	$ (1,589)
Net income	1,072			1,072
Stock-based compensation	146		146
Restricted stock vested, net of shares withheld for payment of taxes (shares)		4,439
Restricted stock vested, net of shares withheld for payment of taxes	0	$ 0	0
Exercise of stock options, net of shares surrendered (shares)		2,553
Exercise of stock options, net of shares surrendered	0
Employee stock plan purchases (shares)		5,674
Exercise of stock options, net of shares surrendered	20		20
Ending Balance at Dec. 28, 2018	$ 27,055	$ 102	47,492	(18,950)	(1,589)
Ending balance (shares) at Dec. 28, 2018		10,261,571
Beginning balance (shares) at Sep. 30, 2018	10,338,548	10,248,905
Beginning Balance at Sep. 30, 2018	$ 25,376	$ 102	47,326	(20,463)	(1,589)
Net income	$ 1,742
Exercise of stock options, net of shares surrendered (shares)	26,500
Ending Balance at Mar. 29, 2019	$ 27,929	$ 103	47,695	(18,280)	(1,589)
Ending balance (shares) at Mar. 29, 2019		10,311,763
Beginning balance (shares) at Dec. 28, 2018		10,261,571
Beginning Balance at Dec. 28, 2018	27,055	$ 102	47,492	(18,950)	(1,589)
Net income	670			670
Stock-based compensation	152		152
Restricted stock vested, net of shares withheld for payment of taxes (shares)		38,538
Restricted stock vested, net of shares withheld for payment of taxes	1	$ 1
Exercise of stock options, net of shares surrendered (shares)		11,654
Exercise of stock options, net of shares surrendered	51		51
Ending Balance at Mar. 29, 2019	27,929	$ 103	47,695	(18,280)	(1,589)
Ending balance (shares) at Mar. 29, 2019		10,311,763
Beginning balance (shares) at Sep. 30, 2019		10,338,548
Beginning Balance at Sep. 30, 2019	31,240	$ 103	48,001	(15,275)	(1,589)
Net income	1,189			1,189
Stock-based compensation	152		152
Restricted stock vested, net of shares withheld for payment of taxes (shares)		6,367
Restricted stock vested, net of shares withheld for payment of taxes	(24)		(24)
Exercise of stock options, net of shares surrendered (shares)		24,000
Exercise of stock options, net of shares surrendered	130		130
Employee stock plan purchases (shares)		6,449
Exercise of stock options, net of shares surrendered	40		40
Ending Balance at Dec. 27, 2019	32,727	$ 103	48,299	(14,086)	(1,589)
Ending balance (shares) at Dec. 27, 2019		10,375,364
Beginning balance (shares) at Sep. 30, 2019		10,338,548
Beginning Balance at Sep. 30, 2019	31,240	$ 103	48,001	(15,275)	(1,589)
Net income	$ 2,712
Exercise of stock options, net of shares surrendered (shares)	26,000
Ending Balance at Mar. 27, 2020	$ 34,375	$ 103	48,424	(12,563)	(1,589)
Ending balance (shares) at Mar. 27, 2020	10,392,116	10,392,116
Beginning balance (shares) at Dec. 27, 2019		10,375,364
Beginning Balance at Dec. 27, 2019	$ 32,727	$ 103	48,299	(14,086)	(1,589)
Net income	1,523			1,523
Stock-based compensation	185		185
Restricted stock vested, net of shares withheld for payment of taxes (shares)		4,663
Restricted stock vested, net of shares withheld for payment of taxes	(33)		(33)
Restricted stock units vested, net of shares withheld for payment of taxes (shares)		10,089
Restricted stock units vested, net of shares withheld for payment of taxes	(35)		(35)
Exercise of stock options, net of shares surrendered (shares)		2,000
Exercise of stock options, net of shares surrendered	8		8
Ending Balance at Mar. 27, 2020	$ 34,375	$ 103	$ 48,424	$ (12,563)	$ (1,589)
Ending balance (shares) at Mar. 27, 2020	10,392,116	10,392,116

Cover Page - shares	6 Months Ended
Cover Page - shares	Mar. 27, 2020	May 01, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 27, 2020
Document Transition Report	false
Entity File Number	001-34376
Entity Registrant Name	IEC ELECTRONICS CORP.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	13-3458955
Entity Address, Address Line One	105 Norton Street
Entity Address, City or Town	Newark
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	14513
City Area Code	315
Local Phone Number	331-7742
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	IEC
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		10,478,992
Entity Central Index Key	0000049728
Current Fiscal Year End Date	--09-30
Amendment Flag	false
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2020

CREDIT FACILITIES - Long-term Debt Maturities (Details) - USD ($)
$ in Thousands

6 Months Ended

Mar. 27, 2020

Sep. 30, 2019

Debt Instrument [Line Items]

2021

$ 1,371

2022

^[1]

1,190

2023

27,221

Total debt, net

$ 29,782

$ 30,550

Revolving Credit Facility [Member]

Debt Instrument [Line Items]

Maturity date

May 05, 2022

[1]	Includes Revolver balance of $26.6 million at March 27, 2020.

PROPERTY, PLANT & EQUIPMENT (Tables)

6 Months Ended

Mar. 27, 2020

Property, Plant and Equipment [Abstract]

Summary of Property, Plant and Equipment


PP&E Lives						Estimated Useful Lives
						(years)
Land improvements						10
Buildings and improvements						5 to 40
Machinery and equipment						3 to 10
Furniture and fixtures						3 to 7
Software						3 to 10

A summary of property, plant and equipment and accumulated depreciation at period end follows:


Property, Plant and Equipment	March 27, 2020		September 30, 2019
(in thousands)
Land and improvements	$	788	$	788
Buildings and improvements	7,430		7,411
Building under capital lease	7,750		7,750
Machinery and equipment	32,869		31,708
Furniture and fixtures	8,290		8,047
Software	5,215		5,215
Construction in progress	1,087		1,173
Total property, plant and equipment, at cost	63,429		62,092
Accumulated depreciation	(44,197)		(42,659)
Property, plant and equipment, net	$	19,232	$	19,433

Depreciation expense during the three and six months ended March 27, 2020 and March 29, 2019 follows:


	Three Months Ended						Six Months Ended
Depreciation Expense	March 27, 2020		March 29, 2019		March 27, 2020		March 29, 2019
(in thousands)
Depreciation expense	$	795	$	646	$	1,552	$	1,301

OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Mar. 27, 2020

Accounting Policies [Abstract]

Property, Plant and Equipment


PP&E Lives						Estimated Useful Lives
						(years)
Land improvements						10
Buildings and improvements						5 to 40
Machinery and equipment						3 to 10
Furniture and fixtures						3 to 7
Software						3 to 10

A summary of property, plant and equipment and accumulated depreciation at period end follows:


Property, Plant and Equipment	March 27, 2020		September 30, 2019
(in thousands)
Land and improvements	$	788	$	788
Buildings and improvements	7,430		7,411
Building under capital lease	7,750		7,750
Machinery and equipment	32,869		31,708
Furniture and fixtures	8,290		8,047
Software	5,215		5,215
Construction in progress	1,087		1,173
Total property, plant and equipment, at cost	63,429		62,092
Accumulated depreciation	(44,197)		(42,659)
Property, plant and equipment, net	$	19,232	$	19,433

Depreciation expense during the three and six months ended March 27, 2020 and March 29, 2019 follows:


	Three Months Ended						Six Months Ended
Depreciation Expense	March 27, 2020		March 29, 2019		March 27, 2020		March 29, 2019
(in thousands)
Depreciation expense	$	795	$	646	$	1,552	$	1,301

INCOME TAXES (Tables)

6 Months Ended

Mar. 27, 2020

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

during each of the three and six months ended March 27, 2020 and March 29, 2019 follows:


	Three Months Ended						Six Months Ended
	March 27, 2020		March 29, 2019		March 27, 2020		March 29, 2019
(in thousands)
Income tax expense	$	367	$	203	$	703	$	515

NET INCOME PER SHARE

6 Months Ended

Mar. 27, 2020

Earnings Per Share [Abstract]

NET INCOME PER SHARE

NOTE 13—NET INCOME PER SHARE

A summary of shares used in the EPS calculations follows (in thousands except share and per share data):


	Three Months Ended						Six Months Ended
Net Income Per Share	March 27, 2020		March 29, 2019		March 27, 2020		March 29, 2019
(in thousands, except share and per share data)
Basic net income per share:
Net income	$	1,523	$	670	$	2,712	$	1,742
Less: Income attributable to non-vested shares	8		4		15		9
Net income available to common stockholders	$	1,515	$	666	$	2,697	$	1,733

Weighted average common shares outstanding	10,393,461		10,286,876		10,379,846		10,274,772

Basic net income per share	$	0.15	$	0.06	$	0.26	$	0.17

Diluted net income per share:
Net income	$	1,523	$	670	$	2,712	$	1,742
Shares used in computing basic net income per share	10,393,461		10,286,876		10,379,846		10,274,772
Dilutive effect of non-vested shares	309,651		391,182		286,155		299,304
Shares used in computing diluted net income per share	10,703,112		10,678,058		10,666,001		10,574,076

Diluted net income per share	$	0.14	$	0.06	$	0.25	$	0.16

The diluted weighted average share calculations do not include the following shares, which are not dilutive to the EPS calculations.

Three Months Ended

Six Months Ended

March 27,
2020

March 29,
2019

March 27,
2020

March 29,
2019

Anti-dilutive shares excluded

—

19,583

INCOME TAXES

6 Months Ended

Mar. 27, 2020

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 9—INCOME TAXES

The income tax expense during each of the three and six months ended March 27, 2020 and March 29, 2019 follows:


	Three Months Ended						Six Months Ended
	March 27, 2020		March 29, 2019		March 27, 2020		March 29, 2019
(in thousands)
Income tax expense	$	367	$	203	$	703	$	515

PROPERTY, PLANT & EQUIPMENT, NET

6 Months Ended

Mar. 27, 2020

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT & EQUIPMENT, NET

NOTE 5—PROPERTY, PLANT AND EQUIPMENT, NET

A summary of property, plant and equipment and accumulated depreciation at period end follows:


Property, Plant and Equipment	March 27, 2020		September 30, 2019
(in thousands)
Land and improvements	$	788	$	788
Buildings and improvements	7,430		7,411
Building under capital lease	7,750		7,750
Machinery and equipment	32,869		31,708
Furniture and fixtures	8,290		8,047
Software	5,215		5,215
Construction in progress	1,087		1,173
Total property, plant and equipment, at cost	63,429		62,092
Accumulated depreciation	(44,197)		(42,659)
Property, plant and equipment, net	$	19,232	$	19,433

Depreciation expense during the three and six months ended March 27, 2020 and March 29, 2019 follows:


	Three Months Ended						Six Months Ended
Depreciation Expense	March 27, 2020		March 29, 2019		March 27, 2020		March 29, 2019
(in thousands)
Depreciation expense	$	795	$	646	$	1,552	$	1,301

OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($)	6 Months Ended
	Mar. 27, 2020	Oct. 01, 2019	Sep. 30, 2019	Oct. 01, 2018
Accounting Policies [Abstract]
Asset impairment charges	$ 0
Bank Overdrafts	100,000		$ 300,000
Restricted stock vested, net of shares withheld for payment of taxes				$ 441,000
Operating lease right-of-use assets, net of accumulated amortization		$ 300,000
Total operating lease obligation	$ 274,000	$ 300,000

REVENUE RECOGNITION - Impact of Topic 606 on Consolidated Income Statement (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 27, 2020	Mar. 29, 2019	Mar. 27, 2020	Mar. 29, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Revenues	$ 44,171	$ 37,294	$ 88,905	$ 72,735
Cost of sales	38,668	32,708	78,163	63,090
Gross profit	5,503	4,586	10,742	9,645
Income tax expense	$ 367	203	703	515
Net income		$ 670	$ 2,712	$ 1,742

MARKET SECTORS AND MAJOR CUSTOMERS - Narrative (Details) - customer	3 Months Ended		6 Months Ended
	Mar. 27, 2020	Mar. 29, 2019	Mar. 27, 2020	Mar. 29, 2019
Concentration Risk [Line Items]
Concentration risk, number of customers	4	1
Sales [Member]
Concentration Risk [Line Items]
Concentration risk, number of customers			3
Sales [Member] \| Aerospace and Defense [Member]
Concentration Risk [Line Items]
Concentration risk, number of customers	3		2
Customer Concentration Risk [Member] \| Accounts Receivable [Member]
Concentration Risk [Line Items]
Concentration risk, number of customers				2
Concentration risk, percentage			30.00%	38.00%
Customer Number One [Member] \| Sales [Member] \| Aerospace and Defense [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	25.00%		26.00%
Customer Number One [Member] \| Customer Concentration Risk [Member] \| Sales [Member] \| Aerospace and Defense [Member]
Concentration Risk [Line Items]
Concentration risk, percentage		22.00%		21.00%
Customer Number Two [Member] \| Sales [Member] \| Aerospace and Defense [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	12.00%		11.00%
Customer Number Two [Member] \| Customer Concentration Risk [Member] \| Sales [Member] \| Medical
Concentration Risk [Line Items]
Concentration risk, percentage				11.00%
Customer Number Three [Member] \| Sales [Member] \| Aerospace and Defense [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	11.00%
Customer Number Three [Member] \| Sales [Member] \| Medical
Concentration Risk [Line Items]
Concentration risk, percentage			16.00%
Customer Number Two [Member] \| Sales [Member] \| Medical
Concentration Risk [Line Items]
Concentration risk, percentage	17.00%

STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - Schedule of Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended
	Mar. 27, 2020	Mar. 29, 2019	Sep. 30, 2019	Sep. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	30,000	10,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 5.03
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	(36,812)
Restricted Stock Units (RSUs) [Member] \| Vested [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	186,727	170,492	153,186	170,492
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	$ 6.56	$ 3.96	$ 5.36	$ 3.96
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	50,556	0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 9.19	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	(17,015)	0
Vested (in dollars per share)	$ 3.58	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value	$ 0	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period	0	0
Restricted Stock Units (RSUs) [Member] \| Non-vested [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expense not yet recognized (000s)	$ 906	$ 282
Weighted average remaining years for vesting	2 years 2 months 12 days	1 year 10 months 24 days

REVENUE RECOGNITION

6 Months Ended

Mar. 27, 2020

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

NOTE 2—REVENUE RECOGNITION

ASC 606: Revenue from Contracts with Customers

Satisfaction of Performance Obligations

Returns and Discounts

Provisions for discounts, allowances, estimated returns and other adjustments are recorded in the period the related sales are recognized.

Shipping and Handling Costs

Contract Assets

Contract assets consist of unbilled contract amounts resulting from sales under contracts when the revenue recognized exceeds the amount billed to the customer.

Practical Expedients and Exemptions

The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.

Disaggregated Revenue

The tables below show net sales from contracts with customers by market sector. See additional information regarding market sectors in Note 10—Market Sectors and Major Customers.


	Three Months Ended
	March 27, 2020										March 29, 2019
	Point in Time		Over Time		Net Sales		Point in Time		Over Time		Net Sales
(in thousands)
Aerospace & Defense	$	12,336	$	14,167	$	26,503	$	11,075	$	12,047	$	23,122
Medical	3,151		7,450		10,601		3,872		3,214		7,086
Industrial	5,430		1,637		7,067		4,583		2,503		7,086
	$	20,917	$	23,254	$	44,171	$	19,530	$	17,764	$	37,294


	Six Months Ended
	March 27, 2020										March 29, 2019
	Point in Time		Over Time		Net Sales		Point in Time		Over Time		Net Sales
(in thousands)
Aerospace & Defense	$	26,792	$	27,440	$	54,232	$	19,002	$	22,457	$	41,459
Medical	6,901		14,436		21,337		8,040		8,689		16,729
Industrial	10,628		2,708		13,336		9,318		5,229		14,547
	$	44,321	$	44,584	$	88,905	$	36,360	$	36,375	$	72,735

Customer Deposits


	Six Months Ended
	March 27, 2020		March 29, 2019
(in thousands)
Beginning balance	$	13,229	$	7,595
Recognition of deferred revenue	(8,573)		(4,821)
Deferral of revenue	11,146		7,452
Ending balance	$	15,802	$	10,226

Sales Outside the United States

For each of the three and six months ended March 27, 2020 and March 29, 2019, less than 2% of net sales were shipped to locations outside the United States.

CREDIT FACILITIES - Summary of Borrowings (Details) - USD ($) $ in Thousands	6 Months Ended
	Mar. 27, 2020	Sep. 30, 2019
Total debt, gross	$ 29,553	$ 30,281
Long-term Debt, Gross	29,782	30,550
Unamortized Debt Issuance Expense	(229)	(269)
Less: current portion	(1,371)	(1,371)
Long-term debt	$ 28,182	$ 28,910
Revolving Credit Facility [Member]
Maturity Date	May 05, 2022
Term Loan B [Member]
Fixed/Variable Rate	Variable Interest Rate
Maturity Date	May 05, 2022
Interest Rate	4.08%	4.59%
Equipment Line Advances [Member]
Fixed/Variable Rate	Variable Interest Rate
Equipment Line Advances Term Note [Member]
Fixed/Variable Rate	Variable Interest Rate
Interest Rate	3.44%	4.56%
Equipment Line Advances Term Note [Member]
Total debt, gross	$ 868	$ 1,125
Term Loan B [Member]
Total debt, gross	$ 2,351	$ 2,779
Revolving Credit Facility [Member]
Fixed/Variable Rate	Variable Interest Rate
Maturity Date	May 05, 2022
Interest Rate	3.25%	4.31%
Total debt, gross	$ 26,600	$ 26,646

STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 27, 2020	Mar. 29, 2019	Mar. 27, 2020	Mar. 29, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for issuance (in shares)	83,252		83,252
Number of options granted (in shares)			30,000	10,000
Compensation expense			$ 337	$ 298
Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period			3 years
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period			4 years
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period			5 years
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period			4 years
2010 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum number of common shares that may be issued (in shares)	840,360		840,360
Common shares, issuance term			10 years
Allocated share-based compensation expense	$ 200	$ 200	$ 300	$ 300
Shares available for issuance (in shares)	621,369		621,369
2010 Plan [Member] \| Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award expiration period			7 years

CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] - $ / shares	Mar. 27, 2020	Sep. 30, 2018
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	500,000	500,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	11,447,604	11,394,036
Common stock, shares outstanding	10,392,116	10,338,548
Treasury stock, shares	1,055,488	1,055,488

LEASES - Summary of Operating Lease Payments for Next Five Years (Details) - USD ($) $ in Thousands	Mar. 27, 2020	Oct. 01, 2019
Twelve months ending March
2020	$ 77
2021	73
2022	72
2023	72
2025 and thereafter	18
Total operating lease payments	312
Less: amounts representing interest	(38)
Total operating lease obligation	$ 274	$ 300

WARRANTY RESERVES (Tables)

6 Months Ended

Mar. 27, 2020

Product Warranties Disclosures [Abstract]

Schedule of Product Warranty Liability

A summary of additions to and charges against IEC’s warranty reserves during the period follows:


	Six Months Ended
Warranty Reserve	March 27, 2020		March 29, 2019
(in thousands)
Reserve, beginning of period	$	165	$	173
Provision	27		27
Warranty costs	(50)		(56)
Reserve, end of period	$	142	$	144

ALLOWANCE FOR DOUBTFUL ACCOUNTS (Tables)

6 Months Ended

Mar. 27, 2020

Receivables [Abstract]

Allowance for Credit Losses on Financing Receivables

A summary follows of activity in the allowance for doubtful accounts during the six months ended March 27, 2020 and March 29, 2019:


	Six Months Ended
Allowance for doubtful accounts	March 27, 2020		March 29, 2019
(in thousands)
Allowance, beginning of period	$	71	$	85
Increase in provision for doubtful accounts	48		(39)
Write-offs	—		(7)
Allowance, end of period	$	119	$	39

Label	Element	Value
Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 441,000

PROPERTY, PLANT & EQUIPMENT - Depreciation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 27, 2020	Mar. 29, 2019	Mar. 27, 2020	Mar. 29, 2019
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 795	$ 646	$ 1,552	$ 1,301

CONDENSED CONSOLIDATED STATEMENTS of CASH FLOWS (unaudited) - USD ($) $ in Thousands	6 Months Ended
	Mar. 27, 2020	Mar. 29, 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 2,712	$ 1,742
Non-cash adjustments:
Stock-based compensation	337	298
Depreciation expense	1,587	1,290
Change in reserve for doubtful accounts	48	(39)
Inventory Write-down	1,296	89
Increase (Decrease) in Deferred Income Taxes	1,201	511
Amortization of Deferred Charges	(57)	(56)
Increase (Decrease) in Operating Capital [Abstract]
Accounts receivable	1,031	(2,615)
Unbilled contract revenue	(1,072)	(1,710)
Inventories	(2,055)	(8,547)
Federal income tax receivable	(517)	0
Other current assets	(267)	(53)
Other long-term assets	(116)	(253)
Accounts payable	(2,771)	(1,362)
Change in book overdraft position	(231)	(922)
Accrued expenses	(1,898)	220
Customer deposits	2,573	2,631
Net change in lease right-of-use assets and liabilities	(1)	0
Other long-term liabilities	0	(75)
Net cash flows provided by/(used in) operating activities	1,800	(8,851)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment	(1,351)	(805)
Net cash flows used in investing activities	(1,351)	(805)
CASH FLOWS FROM FINANCING ACTIVITIES
Advances from revolving credit facility	36,680	39,307
Repayments of revolving credit facility	(36,763)	(29,388)
Borrowings under other loan agreements	0	391
Repayments under other loan agreements	(685)	(568)
Payments under finance lease	(182)	(152)
Proceeds received from lease financing obligation	415	0
Payments of Debt Issuance Costs	0	(6)
Proceeds from exercise of stock options	138	52
Proceeds from employee stock plan purchases	40	20
Cash paid for taxes upon vesting of restricted stock	(92)	0
Net cash flows (used in)/provided by financing activities	(449)	9,656
Net cash change for the period	0	0
Cash, end of period	0	0
Cash, beginning of period	0	0
Supplemental Cash Flow Information [Abstract]
Interest paid	779	753
Income taxes paid	$ 20	$ 0

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands	Mar. 27, 2020	Sep. 30, 2019
Current assets:
Cash	$ 0	$ 0
Accounts receivable, net of allowance	26,539	27,618
Unbilled contract revenue	10,601	9,529
Inventories	45,053	44,267
Federal income tax receivable	1,034	517
Other current assets	1,721	1,454
Total current assets	84,948	83,385
Property, plant and equipment, net	19,232	19,433
Deferred income taxes	5,953	7,154
Operating Lease and Finance Lease, Right-of-Use Asset	275	0
Operating lease liabilities, current	59	0
Other long-term assets	976	860
Total assets	111,384	110,832
Current liabilities:
Current portion of long-term debt	1,371	1,371
Current portion of capital lease obligation	419	338
Current portion of capital lease obligation	20,688	23,690
Accounts payable	1,486	3,174
Accrued payroll and related expenses	485	668
Customer deposits	15,802	13,229
Total current liabilities	40,310	42,470
Long-term debt	28,182	28,910
Long-term capital lease obligation	6,837	6,685
Operating lease liabilities, non-current	215	0
Other long-term liabilities	1,465	1,527
Total liabilities	77,009	79,592
STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 par value: 500,000 shares authorized; none issued or outstanding	0	0
Common stock, $0.01 par value: Authorized: 50,000,000 shares; Issued: 11,372,111 and 11,330,151 shares, respectively; Outstanding: 10,316,623 and 10,274,663 shares, respectively	103	103
Additional paid-in capital	48,424	48,001
Accumulated deficit	(12,563)	(15,275)
Treasury stock, at cost: 1,055,488 shares	(1,589)	(1,589)
Total stockholders’ equity	34,375	31,240
Total liabilities and stockholders’ equity	$ 111,384	$ 110,832

WARRANTY RESERVES (Details) - SEC Schedule, 12-09, Reserve, Warranty [Member] - USD ($) $ in Thousands	6 Months Ended
	Mar. 27, 2020	Mar. 29, 2019
Warranty Reserve
Reserve, beginning of period	$ 165	$ 173
Provision	27	27
Warranty costs	(50)	(56)
Reserve, end of period	$ 142	$ 144

LEASES - Summary of Future Minimum Payments on Capital Leases (Details) $ in Thousands	Mar. 27, 2020 USD ($)
Leases [Abstract]
2020	$ 760
2021	774
2022	788
2023	802
2024 and thereafter	6,481
Total finance lease payments	9,605
Less: amounts representing interest	(2,349)
Total finance lease obligation	$ 7,256

STOCK-BASED COMPENSATION (Tables)

6 Months Ended

Mar. 27, 2020

Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block]

Restricted Stock Units

A summary of restricted stock unit activity, together with related data, follows:


	Six Months Ended
	March 27, 2020				March 29, 2019
Restricted Stock Units	Number of Non-vested Units	Wgtd. Avg. Grant Date Fair Value		Number of Non-vested Units	Wgtd. Avg. Grant Date Fair Value

Outstanding, beginning of period	153,186	$	5.36	170,492	$	3.96
Granted	50,556	9.19		—	—
Vested	(17,015)	3.58		—	—
Forfeited	—	—		—	—
Outstanding, end of period	186,727	$	6.56	170,492	$	3.96

For non-vested shares
Expense not yet recognized (000s)		$	906		$	282
Weighted average remaining years for vesting	2.2			1.9

For shares vested
Aggregate fair value on vesting dates (000s)		$	86		$	—

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

during the six months ended March 27, 2020 and March 29, 2019 follows:


	Six Months Ended
Valuation of Options	March 27, 2020			March 29, 2019
Assumptions for Black-Scholes:
Risk-free interest rate	0.51		%	2.85		%
Expected term in years	5.5			5.5
Volatility	40		%	37		%
Expected annual dividends	none			none

Value of options granted:
Number of options granted	30,000			10,000
Weighted average fair value per share	$	2.68		$	2.40
Fair value of options granted (000s)	$	80		$	24

Changes in Number of Options Outstanding with Other Related Data

A summary of stock option activity, together with other related data, follows:


	Six Months Ended
	March 27, 2020				March 29, 2019
Stock Options	Number of Options	Wgtd. Avg. Exercise Price		Number of Options	Wgtd. Avg. Exercise Price

Outstanding, beginning of period	743,145	$	4.54	737,145	$	4.33
Granted	30,000	5.03		10,000	6.20
Exercised	(26,000)	5.31		(26,500)	4.71
Forfeited	(10,000)	3.58		(24,250)	3.70
Expired	(5,000)	6.91		(5,000)	4.08
Outstanding, end of period	732,145	$	4.53	691,395	$	4.36

For options expected to vest
Number expected to vest	722,582	$	4.51	683,135	$	4.35
Weighted average remaining contractual term, in years	3.3			3.6
Intrinsic value (000s)		$	1,510		$	1,706

For exercisable options
Number exercisable	545,645	$	4.16	510,895	$	4.18
Weighted average remaining contractual term, in years	1.9			2.9
Intrinsic value (000s)		$	1,354		$	1,365

For non-exercisable options
Expense not yet recognized (000s)		$	357		$	230
Weighted average years to be recognized	3.1			3.3

For options exercised
Intrinsic value (000s)		$	75		$	57

Changes in Number of Restricted Non-vested Stock Outstanding with Other Related Data

A summary of restricted stock activity, together with related data, follows:


	Six Months Ended
	March 27, 2020				March 29, 2019
Restricted (Non-vested) Stock	Number of Non-vested Shares	Wgtd. Avg. Grant Date Fair Value		Number of Non-vested Shares	Wgtd. Avg. Grant Date Fair Value

Outstanding, beginning of period	82,707	$	5.25	103,233	$	4.08
Granted	24,850	5.03		15,000	6.97
Vested	(36,812)	4.43		(46,136)	4.09
Forfeited	(13,250)	6.09		(1,400)	4.13
Outstanding, end of period	57,495	$	5.49	70,697	$	4.72

For non-vested shares
Expense not yet recognized (000s)		$	286		$	291
Weighted average remaining years for vesting	1.9			2.1

For shares vested
Aggregate fair value on vesting dates (000s)		$	260		$	311

INVENTORIES (Tables)

6 Months Ended

Mar. 27, 2020

Inventory Disclosure [Abstract]

Schedule of Inventory

A summary of inventory by category at period end follows:


Inventories	March 27, 2020		September 30, 2019
(in thousands)
Raw materials	$	28,644	$	25,393
Work-in-process	13,308		15,928
Finished goods	3,101		2,946
Total inventories	$	45,053	$	44,267

MARKET SECTORS AND MAJOR CUSTOMERS

6 Months Ended

Mar. 27, 2020

Risks and Uncertainties [Abstract]

MARKET SECTORS AND MAJOR CUSTOMERS

NOTE 10—MARKET SECTORS AND MAJOR CUSTOMERS

A summary of sales, according to the market sector within which IEC’s customers operate, follows:


	Three Months Ended			Six Months Ended
% of Sales by Sector	March 27, 2020	March 29, 2019	March 27, 2020	March 29, 2019

Aerospace & Defense	60%	62%	61%	57%
Medical	24%	19%	24%	23%
Industrial	16%	19%	15%	20%
	100%	100%	100%	100%

CREDIT FACILITIES

6 Months Ended

Mar. 27, 2020

Debt Disclosure [Abstract]

CREDIT FACILITIES

NOTE 6—CREDIT FACILITIES

A summary of borrowings at period end follows:


			March 27, 2020						September 30, 2019
Credit Facility Debt	Fixed/Variable Rate	Maturity Date	Balance		Interest Rate		Balance		Interest Rate
(in thousands)
M&T Bank credit facilities:
Revolving Credit Facility	v	5/5/2022	$	26,563	3.25	%	$	26,646	4.31	%
Term Loan B	v	5/5/2022	2,351		4.08		2,779		4.59

Equipment Line Term Note	v	Various	868		3.44		1,125		4.56
Total debt, gross			29,782				30,550
Unamortized debt issuance costs			(229)				(269)
Total debt, net			29,553				30,281
Less: current portion			(1,371)				(1,371)
Long-term debt			$	28,182			$	28,910

M&T Bank Credit Facilities

Individual debt facilities provided under the Credit Facility, as amended, are described below:

Borrowing Base

Interest Rates

Financial Covenants

The Company was in compliance with the financial debt covenant at March 27, 2020.

Contractual Principal Payments

A summary of contractual principal payments under IEC’s borrowings at March 27, 2020 for the next three years taking into consideration the Credit Facility, as amended, is as follows:


Debt Repayment Schedule			Contractual Principal Payments
(in thousands)
Twelve months ending March
2021	$	1,371
2022	1,190
2023 ¹	27,221


	$	29,782

1 Includes Revolver balance of $26.6 million at March 27, 2020.

OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Mar. 27, 2020

Accounting Policies [Abstract]

Our Business

Generally Accepted Accounting Principles

Fiscal Calendar

Consolidation

Unaudited Financial Statements

Allowance for Doubtful Accounts

Inventory Valuation

Property, Plant and Equipment


PP&E Lives						Estimated Useful Lives
						(years)
Land improvements						10
Buildings and improvements						5 to 40
Machinery and equipment						3 to 10
Furniture and fixtures						3 to 7
Software						3 to 10

Reviewing Long-Lived Assets for Potential Impairment

Legal Contingencies

Customer Deposits

Fair Value Measurements

Level 1: Quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date.

Level 3: Model-derived valuations in which one or more significant inputs are unobservable.

Stock-Based Compensation

Legal Expenses Accrual

Legal Expense Accrual

The Company records legal expenses as they are incurred, based on invoices received or estimates provided by legal counsel. Future estimated legal expenses are not recorded until incurred.

Income Taxes and Deferred Taxes

Dividends

Use of Estimates

Statements of Cash Flows

The Company presents operating cash flows using the indirect method of reporting under which non-cash income and expense items are removed from net income.

Segment Reporting, Policy [Policy Text Block]

Segments

Recently Issued Accounting Standards

Recently Adopted Accounting Standards

Earnings Per Share

The Company applies the two-class method to calculate and present net income per share. Certain of the Company's restricted (non-vested) share awards contain non-forfeitable rights to dividends and are considered participating securities for purposes of computing net income per share pursuant to the two-class method. Under the two-class method, net earnings are reduced by the amount of dividends declared (whether paid or unpaid) and the remaining undistributed earnings are then allocated to common stock and participating securities, based on their respective rights to receive dividends. Basic earnings per common share are calculated by dividing income available to common stockholders by the weighted average number of shares outstanding during each period. Diluted earnings per common share add to the denominator incremental shares resulting from the assumed exercise of all potentially dilutive stock options, as well as unvested restricted stock and restricted stock units. Options, restricted stock and restricted stock units are primarily held by directors, officers and certain employees.

OUR BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Plant and Equipment (Details)	6 Months Ended
	Mar. 27, 2020
Land improvements [Member]
Estimated useful lives	10 years
Buildings and improvements [Member] \| Minimum [Member]
Estimated useful lives	5 years
Buildings and improvements [Member] \| Maximum [Member]
Estimated useful lives	40 years
Machinery and equipment [Member] \| Minimum [Member]
Estimated useful lives	3 years
Machinery and equipment [Member] \| Maximum [Member]
Estimated useful lives	10 years
Furniture and fixtures [Member] \| Minimum [Member]
Estimated useful lives	3 years
Furniture and fixtures [Member] \| Maximum [Member]
Estimated useful lives	7 years
Software and Software Development Costs [Member] \| Minimum [Member]
Estimated useful lives	3 years
Software and Software Development Costs [Member] \| Maximum [Member]
Estimated useful lives	10 years

REVENUE RECOGNITION - Impact of Topic 606 on Consolidated Balance Sheet (Details) - USD ($) $ in Thousands	Mar. 27, 2020	Sep. 30, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Unbilled contract revenue	$ 10,601	$ 9,529
Inventories	45,053	44,267
Accumulated deficit	$ (12,563)	$ (15,275)

LEASES - Narrative (Details) - USD ($) $ in Thousands	Mar. 27, 2020	Sep. 30, 2019
Leases [Abstract]
Lessee, Operating Lease, Term of Contract	5 years
Value of assets acquired under the lease	$ 7,750	$ 7,750

INCOME TAXES - Tax Provision/Benefit (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 27, 2020	Mar. 29, 2019	Mar. 27, 2020	Mar. 29, 2019
Income Tax Disclosure [Abstract]
Income tax expense	$ 367	$ 203	$ 703	$ 515