v2.4.1.9
Document and Entity Information
3 Months Ended
Jun. 26, 2015
Document And Entity Information  
Entity Registrant Name IEH CORPORATION
Entity Central Index Key 0000050292
Document Type 10-Q
Document Period End Date Jun. 26, 2015
Amendment Flag false
Current Fiscal Year End Date --03-25
Entity Filer Category Smaller Reporting Company
Entity Common Stock, Shares Outstanding 2,303,468dei_EntityCommonStockSharesOutstanding
Document Fiscal Period Focus Q1
Document Fiscal Year Focus 2016
v2.4.1.9
BALANCE SHEETS (USD $)
Jun. 26, 2015
Mar. 27, 2015
CURRENT ASSETS:    
Cash $ 1,716,367us-gaap_Cash $ 1,721,410us-gaap_Cash
Accounts receivable, less allowances for doubtful accounts of $11,562 at June 26, 2015 and March 27, 2015 2,924,336us-gaap_AccountsReceivableNetCurrent 2,226,707us-gaap_AccountsReceivableNetCurrent
Inventories (Note 3) 6,777,942us-gaap_InventoryNet 6,749,659us-gaap_InventoryNet
Excess payments to accounts receivable factor (Note 6) 283,956us-gaap_AccountsReceivableFromSecuritization 43,041us-gaap_AccountsReceivableFromSecuritization
Prepaid expenses and other current assets (Note 4) 297,719us-gaap_PrepaidExpenseAndOtherAssetsCurrent 354,451us-gaap_PrepaidExpenseAndOtherAssetsCurrent
Total Current Assets 12,000,320us-gaap_AssetsCurrent 11,095,268us-gaap_AssetsCurrent
PROPERTY, PLANT AND EQUIPMENT, less accumulated depreciation and amortization of $8,355,106 at June 26, 2015 and $8,272,106 March 27, 2015 (Note 5) 1,731,690us-gaap_PropertyPlantAndEquipmentNet 1,691,541us-gaap_PropertyPlantAndEquipmentNet
OTHER ASSETS:    
Other assets 54,361us-gaap_OtherAssetsNoncurrent 54,361us-gaap_OtherAssetsNoncurrent
Total Assets 13,786,371us-gaap_Assets 12,841,170us-gaap_Assets
CURRENT LIABILITIES:    
Accounts payable 116,760us-gaap_AccountsPayableCurrent 138,653us-gaap_AccountsPayableCurrent
Accrued corporate income taxes 369,150us-gaap_AccruedIncomeTaxesCurrent 181,934us-gaap_AccruedIncomeTaxesCurrent
Other current liabilities (Note 7) 663,400us-gaap_OtherLiabilitiesCurrent 630,125us-gaap_OtherLiabilitiesCurrent
Total Current Liabilities 1,149,310us-gaap_LiabilitiesCurrent 950,712us-gaap_LiabilitiesCurrent
Total Liabilities 1,149,310us-gaap_Liabilities 950,712us-gaap_Liabilities
STOCKHOLDERS' EQUITY:    
Common stock, $.01 par value; 10,000,000 shares authorized; 2,303,468 shares issued and outstanding at June 26, 2015 and March 27, 2015 23,035us-gaap_CommonStockValue 23,035us-gaap_CommonStockValue
Capital in excess of par value 2,744,573us-gaap_AdditionalPaidInCapitalCommonStock 2,744,573us-gaap_AdditionalPaidInCapitalCommonStock
Retained earnings (Note 8) 9,869,453us-gaap_RetainedEarningsAccumulatedDeficit 9,122,850us-gaap_RetainedEarningsAccumulatedDeficit
Total Stockholders' Equity 12,637,061us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest 11,890,458us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest
Total Liabilities and Stockholders' Equity $ 13,786,371us-gaap_LiabilitiesAndStockholdersEquity $ 12,841,170us-gaap_LiabilitiesAndStockholdersEquity
v2.4.1.9
BALANCE SHEETS (Parenthetical) (USD $)
Jun. 26, 2015
Mar. 27, 2015
BALANCE SHEETS [Abstract]    
Allowances for doubtful accounts $ 11,562us-gaap_AllowanceForDoubtfulAccountsReceivableCurrent $ 11,562us-gaap_AllowanceForDoubtfulAccountsReceivableCurrent
Accumulated depreciation and amortization $ 8,355,106us-gaap_AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment $ 8,272,106us-gaap_AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment
Common stock, par value $ 0.01us-gaap_CommonStockParOrStatedValuePerShare $ 0.01us-gaap_CommonStockParOrStatedValuePerShare
Common stock, shares authorized 10,000,000us-gaap_CommonStockSharesAuthorized 10,000,000us-gaap_CommonStockSharesAuthorized
Common stock, shares issued 2,303,468us-gaap_CommonStockSharesIssued 2,303,468us-gaap_CommonStockSharesIssued
Common stock, shares outstanding 2,303,468us-gaap_CommonStockSharesOutstanding 2,303,468us-gaap_CommonStockSharesOutstanding
v2.4.1.9
STATEMENT OF OPERATIONS (USD $)
Share data in Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Jun. 26, 2015
Jun. 27, 2014
STATEMENT OF OPERATIONS [Abstract]    
REVENUE, net sales $ 5,174,895us-gaap_SalesRevenueNet $ 3,935,647us-gaap_SalesRevenueNet
COSTS AND EXPENSES    
Cost of products sold 3,216,635us-gaap_CostOfGoodsSold 2,500,757us-gaap_CostOfGoodsSold
Selling, general and administrative 677,823us-gaap_SellingGeneralAndAdministrativeExpense 641,252us-gaap_SellingGeneralAndAdministrativeExpense
Interest expense 4,500us-gaap_InterestExpense 3,514us-gaap_InterestExpense
Depreciation 83,000us-gaap_DepreciationDepletionAndAmortization 82,100us-gaap_DepreciationDepletionAndAmortization
Total Costs and Expenses 3,981,958us-gaap_CostsAndExpenses 3,227,623us-gaap_CostsAndExpenses
OPERATING INCOME 1,192,937us-gaap_OperatingIncomeLoss 708,024us-gaap_OperatingIncomeLoss
OTHER INCOME 229us-gaap_NonoperatingIncomeExpense 167us-gaap_NonoperatingIncomeExpense
INCOME BEFORE INCOME TAXES 1,193,166us-gaap_IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest 708,191us-gaap_IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest
PROVISION FOR INCOME TAXES (446,563)us-gaap_IncomeTaxExpenseBenefit (320,979)us-gaap_IncomeTaxExpenseBenefit
NET INCOME $ 746,603us-gaap_NetIncomeLoss $ 387,212us-gaap_NetIncomeLoss
BASIC AND DILUTED EARNINGS PER SHARE (Note 2) $ 0.32us-gaap_EarningsPerShareBasicAndDiluted $ 0.17us-gaap_EarningsPerShareBasicAndDiluted
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (in thousands) 2,303us-gaap_WeightedAverageNumberOfShareOutstandingBasicAndDiluted 2,303us-gaap_WeightedAverageNumberOfShareOutstandingBasicAndDiluted
v2.4.1.9
STATEMENT OF CASH FLOWS (USD $)
3 Months Ended
Jun. 26, 2015
Jun. 27, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income $ 746,603us-gaap_NetIncomeLoss $ 387,212us-gaap_NetIncomeLoss
Adjustments to reconcile net income to net cash provided (used) by operating activities:    
Depreciation 83,000us-gaap_DepreciationDepletionAndAmortization 82,100us-gaap_DepreciationDepletionAndAmortization
Changes in assets and liabilities:    
(Increase) in accounts receivable (697,629)us-gaap_IncreaseDecreaseInAccountsReceivable (388,093)us-gaap_IncreaseDecreaseInAccountsReceivable
(Increase) in inventories (28,283)us-gaap_IncreaseDecreaseInInventories (239,568)us-gaap_IncreaseDecreaseInInventories
(Increase) decrease in excess payments to accounts receivable factor (240,915)us-gaap_IncreaseDecreaseInAccountsReceivableFromSecuritization (1,710)us-gaap_IncreaseDecreaseInAccountsReceivableFromSecuritization
(Increase) decrease in prepaid expenses and other current assets 56,732us-gaap_IncreaseDecreaseInPrepaidDeferredExpenseAndOtherAssets (67,102)us-gaap_IncreaseDecreaseInPrepaidDeferredExpenseAndOtherAssets
(Increase) in other assets    (3,000)us-gaap_IncreaseDecreaseInOtherNoncurrentAssets
(Decrease) in accounts payable (21,893)us-gaap_IncreaseDecreaseInAccountsPayable (73,853)us-gaap_IncreaseDecreaseInAccountsPayable
Increase in other current liabilities 33,275us-gaap_IncreaseDecreaseInOtherCurrentLiabilities 41,070us-gaap_IncreaseDecreaseInOtherCurrentLiabilities
Increase in accrued corporate taxes 187,216us-gaap_IncreaseDecreaseInAccruedIncomeTaxesPayable 139,474us-gaap_IncreaseDecreaseInAccruedIncomeTaxesPayable
Total adjustments (628,497)us-gaap_AdjustmentsNoncashItemsToReconcileNetIncomeLossToCashProvidedByUsedInOperatingActivities (510,682)us-gaap_AdjustmentsNoncashItemsToReconcileNetIncomeLossToCashProvidedByUsedInOperatingActivities
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 118,106us-gaap_NetCashProvidedByUsedInOperatingActivities (123,470)us-gaap_NetCashProvidedByUsedInOperatingActivities
CASH FLOWS FROM INVESTING ACTIVITIES:    
Acquisition of fixed assets (123,149)us-gaap_PaymentsToAcquirePropertyPlantAndEquipment (171,408)us-gaap_PaymentsToAcquirePropertyPlantAndEquipment
NET CASH (USED) BY INVESTING ACTIVITIES (123,149)us-gaap_NetCashProvidedByUsedInInvestingActivities (171,408)us-gaap_NetCashProvidedByUsedInInvestingActivities
(DECREASE) IN CASH (5,043)us-gaap_CashPeriodIncreaseDecrease (294,878)us-gaap_CashPeriodIncreaseDecrease
CASH, beginning of period 1,721,410us-gaap_Cash 1,733,460us-gaap_Cash
CASH, end of period 1,716,367us-gaap_Cash 1,438,582us-gaap_Cash
Cash paid during the three months for:    
Interest 3,000us-gaap_InterestPaid 3,514us-gaap_InterestPaid
Income Taxes $ 192,000us-gaap_IncomeTaxesPaidNet $ 210,000us-gaap_IncomeTaxesPaidNet
v2.4.1.9
INTERIM RESULTS AND BASIS OF PRESENTATION
3 Months Ended
Jun. 26, 2015
INTERIM RESULTS AND BASIS OF PRESENTATION [Abstract]  
INTERIM RESULTS AND BASIS OF PRESENTATION


Note 1- 

INTERIM RESULTS AND BASIS OF PRESENTATION: 

 

The accompanying unaudited financial statements as of June 26, 2015 and June 27, 2014 and for the three months then ended have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q. In the opinion of management, the unaudited financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of June 26, 2015 and June 27, 2014 and the results of operations and cash flows for the three months then ended. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the three months ended June 26, 2015, are not necessarily indicative of the results to be expected for any subsequent quarter or the entire fiscal year. The balance sheet at March 28, 2014 has been derived from the audited financial statements at that date.

 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The Company believes, however, that the disclosures in this report are adequate to make the information presented not misleading in any material respect. The accompanying financial statements should be read in conjunction with the audited financial statements and notes thereto of IEH Corporation for the fiscal year ended March 27, 2015 included in the Company's Annual Report on Form 10-K as filed with the SEC and the attached Management's Discussion and Analysis of Financial Condition and Results of Operations.

v2.4.1.9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3 Months Ended
Jun. 26, 2015
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

 

Description of Business:

 

The Company designs, develops and manufactures printed circuit connectors for high performance applications. We have also developed a high performance plastic circular connector line. All of our products utilize the HYPERBOLOID contact design, a rugged high-reliability contact system ideally suited for high-stress environments. We are the only independent producer of HYPERBOLOID in the United States.

 

Our customers consist of OEM's (Original Equipment Manufacturers), companies manufacturing medical equipment, and distributors who resell our products to OEMs.  We sell our products directly and through regional representatives located in all regions of the United States, Canada, Israel, India, various Pacific Rim countries, South Korea and the European Union (EU).

 

The customers of the Company services are in the following markets: Government, Military, Aerospace, Medical, Automotive, Industrial, Test Equipment and Commercial Electronics. The Company appears on the Military Qualified Product Listing “QPL” to MIL-DTL-55302 and supply customer requested modifications to this specification. Sales to the Commercial Electronic and Military markets were 37% and 55%, respectively, of the Company's net sales for the year ended March 27, 2015. The Company's offering of “QPL” items has recently been expanded to include additional products. 


In order to remain competitive, the Company has an internal program to upgrade, add and maintain machinery, review material costs and increase labor force productivity. We recently purchased several machines to increase the productivity of certain processes. This will help us meet this goal.

Business New Product Development:


The Company is sought after by many of its customers to design and manufacture custom connectors. This has created many new products that are innovative designs and employ new technologies. The Company continues to be successful because of its ability to assist its customers and create a new design, including engineering drawing packages, in a relatively short period of time. We will continue to support our customers to the best of our ability.

 

The circular product line of connectors introduced several years ago for the medical industry continues to be very rewarding for the Company. The line has been expanded to include connector cable assemblies utilizing the circular connectors.

 

A new product line featuring high density connectors is being added to the Company's product offering. This offering should be available within the next few months. The Company expects the new product line to bring additional revenue.

 

The standard printed circuit board connectors we produce are continually being expanded and utilized in many of the military programs being built today. We have recently received approval for additional products that we can offer under the Military Qualified Product Listing “QPL.”

 

Accounting Period:


The Company maintains an accounting period based upon a 52-53 week year, which ends on the nearest Friday in business days to March 31. The year ended March 27, 2015 was comprised of 52 weeks.


 

Revenue Recognition:

 

Revenues are recognized at the shipping date of the Company's products. The Company has historically adopted the shipping terms that title to merchandise passes to the customer at the shipping point (FOB Shipping Point). At this juncture, title has passed, the Company has recognized the sale, inventory has been relieved, and the customer has been invoiced. The Company does not offer any discounts, credits or other sales incentives.

 

The Company's policy with respect to customer returns and allowances as well as product warranty is as follows:

 

The Company will accept a return of defective product within one year from shipment for repair or replacement at the Company's option. If the product is repairable, the Company at its own cost, will repair and return it to the customer. If unrepairable, the Company will either offer an allowance against payment or will reimburse the customer for the total cost of product.

 

Most of the Company's products are custom ordered by customers for a specific use. The Company provides engineering services as part of the relationship with its customers in developing the custom product. The Company is not obligated to provide such engineering service to its customers. The Company does not invoice its customers separately for these services.


 

Inventories:

Inventories are stated at cost, on a first-in, first-out basis which does not exceed market value. 

The Company manufactures products pursuant to specific technical and contractual requirements.

The Company historically purchases material in excess of its requirements to avail itself of favorable pricing as well as the possibility of receiving additional orders from customers. This excess may result in material not being used in subsequent periods, which may result in this material being deemed obsolete.

The Company annually reviews its purchase and usage activity of its inventory of parts as well as work in process and finished goods to determine which items of inventory have become obsolete within the framework of current and anticipated orders. The Company based upon historical experience has determined that if a part has not been used and purchased or an item of finished goods has not been sold in three years, it is deemed to be obsolete. The Company estimates which materials may be obsolete and which products in work in process or finished goods may be sold at less than cost. A periodic adjustment, based upon historical experience, is made to inventory in recognition of this impairment.

 

Concentration of Credit Risk:

 

Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and accounts receivable.

 

Under the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act that was signed into law on July 21, 2010, the Federal Deposit Insurance Corporation (FDIC) will permanently insure all accounts maintained with each financial institution up to $250,000 in the aggregate.

 

As of June 26, 2015, the Company had funds on deposit in the amount of $1,716,367 in one financial institution comprised of the following:

 

Non-interest bearing accounts   $ 744,196  
Interest bearing account     972,171  
    $ 1,716,367  

 

The Company has not experienced any losses in such accounts and believes its cash balances are not exposed to any significant risk.



Property, Plant and Equipment:

 

Property, plant and equipment are stated at cost less accumulated depreciation and amortization.  The Company provides for depreciation and amortization using the Double Declining Balance method over the estimated useful lives (5-7 years) of the related assets.

 

Maintenance and repair expenditures are charged to operations, and renewals and betterments are capitalized.  Items of property, plant and equipment, which are sold, retired or otherwise disposed of, are removed from the asset and accumulated depreciation or amortization accounts.  Any gain or loss thereon is either credited or charged to operations.

 

Income Taxes:

 

The Company follows the policy of treating investment tax credits as a reduction in the provision for federal income tax in the year in which the credit arises or may be utilized. Deferred income taxes arise from temporary differences resulting from different depreciation methods used for financial and income tax purposes. The Company has adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 740, Income Taxes, which includes the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 109, “Accounting for Income Taxes.”

 

Net Income Per Share:

 

The Company has adopted the provisions of ASC Topic 260, Earnings per Share, which includes the provisions of SFAS No. 128, “Earnings Per Share,” which requires the disclosure of “basic” and “diluted” earnings (loss) per share. Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during each period. Diluted earnings per share is similar to basic earnings per share except that the weighted average number of common shares outstanding is increased to reflect the dilutive effect of potential common shares, such as those issuable upon the exercise of stock or warrants, as if they had been issued. For the three months ended June 26, 2015 and June 27, 2014, respectively, there were no items of potential dilution that would impact on the computation of diluted earnings or loss per share.

  

Fair Value of Financial Instruments:

 

The carrying value of the Company's financial instruments, consisting of accounts receivable, accounts payable, and borrowings, approximate their fair value due to the relatively short maturity (three months) of these instruments.

 

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 and liabilities, revenues and expenses, and disclosure of contingent assets and liabilities at the date of the financial statements.  Actual amounts could differ from those estimates.

 

Impairment of Long-Lived Assets:

 

The Company has adopted the provisions of ASC Topic, 360, Property, Plant and Equipment-Impairment or Disposal of Long-Lived Assets which includes the provisions of SFAS No. 144, “Accounting for The Impairment or Disposal of Long-Lived Assets,” and requires that long-lived assets and certain identifiable intangibles to be held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company has adopted SFAS No. 144. There were no long-lived asset impairments recognized by the Company for the three months ended June 26, 2015 and June 27, 2014, respectively.

 

Reporting Comprehensive Income:

 

The Company has adopted the provisions of ASC Topic, 220, Comprehensive Income which includes the provisions of SFAS No. 130, “Reporting Comprehensive Income.” This Statement established standards for reporting and display of comprehensive income and its components (revenues, expenses, gains and losses) in an entity's financial statements. This Statement requires an entity to classify items of other comprehensive income by their nature in a financial statement and display the accumulated balance of other comprehensive income separately from retained earnings and additional paid-in capital in the equity section of a statement of balance sheet. There were no material items of comprehensive income to report for the three months ended June 26, 2015 and June 27, 2014, respectively.


Segment Information:

 

The Company has adopted the provisions of ASC Topic, 280, Segment Reporting which includes the provisions of SFAS No. 131, “Disclosures About Segment of An Enterprise and Related Information.” This Statement requires public enterprises to report financial and descriptive information about its reportable operating segments and establishes standards for related disclosures about product and services, geographic areas, and major customers.  The adoption of ASC Topic 280 did not affect the Company's presentation of its results of operations or financial position.

 

Research and Development:


The Company provides personalized engineering services to its customers by designing connectors for specific customer applications. The employment of electromechanical engineers is the anticipated cornerstone of the Company's future growth. The Company maintains a testing laboratory where its engineers experiment with new connector designs based on changes in technology and in an attempt to create innovative, more efficient connector designs.

 

The Company did not expend any funds on nor receive any revenues related to customer sponsored research and development activities relating to the development of new designs, techniques and the improvement of existing design during the three months ended June 26, 2015 and June 27, 2014, respectively.

 

Effect of New Accounting Pronouncements: