IEC to close Alabama plant

IEC Electronics Corp. will close its Arab, Alabama plant within 90 days.

Russell E. Stingel, Chairman and Chief Executive Officer of IEC Electronics, said, "We see the closing of our Alabama facility, which has significantly contributed to the recent losses, as an important step in returning IEC to profitability over the next few quarters. This closure will result in a one-time restructuring charge in the range of $2 to $5 million on a pre-tax basis."

He continued, "IEC will then be in a better position to utilize the capacity at our facilities in Newark and Edinburg, Texas, as well as the recently acquired contract manufacturing operation in Ireland, which will be servicing both our newly expanded customer base in Europe and satisfy customer requests from our existing customer base."

Stingel added, "As a result of industry-wide weakness in demand for manufacturing services, our fourth-quarter revenues may not equal the revenues of our third quarter. The resulting under-utilization of capacity is affecting our margins, so that the Company's fourth quarter operating loss will be significantly greater than that of the third quarter."

He says he expects IEC's financial picture to improve this fall.

He concluded: "Our balance sheet has been significantly improved. Our debt is at its lowest level in several years; our cash flow has been positive; our business development efforts to diversify our customer portfolio outside of the personal computer industry have been productive; and we have just begun to expand globally. We firmly believe that we are on the right track."

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