IEH Corp Swings to Loss Amid Revenue Decline, Soaring Costs

TL;DR

**IEH Corp is bleeding cash and losing money, signaling a tough road ahead for this niche manufacturer.**

AI Summary

IEH Corp reported a significant decline in financial performance for the six months ended September 30, 2025, with revenue decreasing by 7.3% to $13,385,747 from $14,446,101 in the prior year. The company swung to a net loss of $681,479, or $0.28 per basic share, compared to a net income of $639,230, or $0.27 per basic share, for the same period in 2024. This downturn was primarily driven by an increase in cost of products sold to $10,638,489 from $10,504,598, and higher selling, general, and administrative expenses, which rose to $3,229,979 from $3,061,151. Domestic revenue saw a substantial drop from $13,724,709 to $12,397,438, while international revenue increased to $988,309 from $721,392. The defense sector's contribution to total revenue decreased from 68.2% to 59.1%, whereas commercial aerospace increased its share from 19.2% to 31.5%. Cash decreased by $1,196,796 to $9,343,032 from $10,539,828 at the beginning of the period, largely due to cash used in operating activities amounting to $1,372,909.

Why It Matters

IEH Corp's shift from profitability to a net loss, coupled with declining revenue, signals potential operational inefficiencies and market challenges for investors. The significant drop in domestic revenue and the defense sector's reduced contribution could indicate a shift in core business demand or increased competition, impacting future growth prospects. For employees, this financial downturn might lead to cost-cutting measures or hiring freezes. Customers could see potential impacts on product development or service levels if financial pressures persist. In the broader market, this performance highlights the volatility in specialized manufacturing, particularly for military and aerospace components, where competitive pressures and supply chain dynamics are critical.

Risk Assessment

Risk Level: high — The company reported a net loss of $681,479 for the six months ended September 30, 2025, a stark contrast to the $639,230 net income in the prior year. Furthermore, cash used in operating activities was $1,372,909, indicating that core operations are consuming cash rather than generating it, which is a significant red flag for financial stability.

Analyst Insight

Investors should consider divesting or holding off on new investments in IEH Corp given the significant net loss and negative cash flow from operations. Await evidence of revenue stabilization, cost control, and a return to profitability before considering a position.

Financial Highlights

debt To Equity

0.16

revenue

$13,385,747

operating Margin

-6.4%

total Assets

$26,618,820

total Debt

$3,764,693

net Income

-$681,479

eps

-$0.28

gross Margin

21.2%

cash Position

$9,343,032

revenue Growth

-7.3%

Revenue Breakdown

Key Numbers

• $13.39M — Revenue (Decreased by 7.3% for the six months ended September 30, 2025, from $14.45M in 2024.)
• ($0.68M) — Net Loss (Swung from a net income of $0.64M in 2024 to a loss in 2025 for the six-month period.)
• ($0.28) — Basic Net Loss Per Share (Compared to $0.27 basic net income per share in the prior year for the six-month period.)
• ($1.37M) — Net Cash Used in Operating Activities (Indicates operations are consuming cash, a significant decline from $2.59M cash provided in 2024.)
• 62.2% — Defense Revenue Percentage (3 months) (Decreased from 67.5% in the prior year, showing a shift in industry concentration.)
• 28.3% — Commercial Aerospace Revenue Percentage (3 months) (Increased from 19.1% in the prior year, indicating growth in this segment.)
• $9.34M — Cash Balance (Decreased from $10.54M at March 31, 2025, reflecting negative cash flow.)
• $10.64M — Cost of Products Sold (Increased from $10.50M for the six months ended September 30, 2024, despite lower revenue.)
• $3.23M — Selling, General and Administrative Expenses (Increased from $3.06M for the six months ended September 30, 2024.)
• 2,431,278 — Shares Outstanding (As of November 10, 2025, reflecting a slight increase from March 31, 2025.)

Key Players & Entities

• IEH Corporation (company) — Registrant and primary subject of the 10-Q filing
• Louis Offerman (person) — Founder of L. Offerman Tool & Die, predecessor to IEH Corp
• Bernard Offerman (person) — Son of Louis Offerman, involved in founding L. Offerman Tool & Die
• Seymour Offerman (person) — Son of Louis Offerman, involved in founding L. Offerman Tool & Die
• U.S. Securities and Exchange Commission (regulator) — Governing body for SEC filings
• $13,385,747 (dollar_amount) — Total revenue for the six months ended September 30, 2025
• $681,479 (dollar_amount) — Net loss for the six months ended September 30, 2025
• $1,372,909 (dollar_amount) — Net cash used in operating activities for the six months ended September 30, 2025
• New York (company) — State of incorporation for IEH Corporation
• Bloomberg (company) — Financial news and data provider

FAQ

Risk Factors

• Shift in Revenue Mix [medium — market]: The company is experiencing a significant shift in its revenue mix, with defense sector contribution decreasing from 68.2% to 59.1% and commercial aerospace increasing from 19.2% to 31.5% for the six months ended September 30, 2025. This concentration shift could expose the company to greater volatility if the commercial aerospace market experiences downturns.
• Rising Cost of Products Sold [high — operational]: Cost of products sold increased to $10,638,489 for the six months ended September 30, 2025, from $10,504,598 in the prior year, despite a 7.3% decrease in overall revenue. This indicates potential inefficiencies or rising input costs that are eroding gross margins.
• Negative Operating Cash Flow [high — financial]: The company generated a net loss of $681,479 and used $1,372,909 in cash from operating activities for the six months ended September 30, 2025. This contrasts with a net income and positive operating cash flow in the prior year, signaling a deteriorating financial condition.
• Declining Domestic Revenue [high — market]: Domestic revenue saw a substantial drop from $13,724,709 to $12,397,438 for the six months ended September 30, 2025. This significant decline in the core market requires further investigation into underlying causes.
• Increasing SG&A Expenses [medium — operational]: Selling, general, and administrative expenses rose to $3,229,979 from $3,061,151 for the six months ended September 30, 2025. This increase, coupled with declining revenue, puts further pressure on profitability.

Industry Context

IEH Corp operates in a sector influenced by shifts between defense and commercial aerospace. The commercial aerospace sector is experiencing growth, attracting increased focus, while the defense sector's contribution is declining. This dynamic requires careful management of resources and market strategies to adapt to evolving demand and potential supply chain pressures.

Regulatory Implications

As a company with significant defense sector involvement, IEH Corp may be subject to specific government regulations, contract compliance requirements, and export controls. Changes in government spending priorities or geopolitical events could impact demand and regulatory landscapes.

What Investors Should Do

1. Monitor cost control measures
2. Analyze the revenue shift strategy
3. Evaluate cash burn rate
4. Scrutinize margin performance

Key Dates

• 2025-09-30: End of Second Fiscal Quarter — Reporting period for the 10-Q, showing a significant decline in revenue and a swing to net loss.
• 2025-03-31: End of First Fiscal Quarter / Beginning of Period — Starting balance sheet figures for the six-month period, showing a higher cash balance and retained earnings.

Glossary

Cost of products sold

The direct costs attributable to the production of the goods sold by a company. (An increase in this cost relative to revenue indicates pressure on gross margins, as seen in IEH Corp's results.)

Selling, general and administrative expenses (SG&A)

Expenses a business incurs to market and sell its products or services, plus the expenses to manage the company. (An increase in SG&A expenses, as reported by IEH Corp, can negatively impact profitability if not offset by revenue growth.)

Operating lease right-of-use assets

An asset representing a lessee's right to use an underlying asset for the lease term. (These assets and their corresponding liabilities are part of IEH Corp's balance sheet, reflecting obligations for leased property or equipment.)

Retained earnings

The cumulative amount of net income that a company has retained over time, rather than distributing to shareholders as dividends. (A decrease in retained earnings, as seen in IEH Corp's balance sheet, typically results from net losses.)

Weighted-average number of common shares outstanding

The average number of a company's common shares outstanding over a specific period, used for calculating earnings per share. (Changes in this number can affect the EPS calculation. IEH Corp shows an increase in basic shares outstanding from the prior year.)

Year-Over-Year Comparison

For the six months ended September 30, 2025, IEH Corp reported a 7.3% decrease in revenue to $13.39M, a stark contrast to the prior year's performance. The company swung from a net income of $0.64M to a net loss of $0.68M, with basic EPS falling from $0.27 to a loss of $0.28. Operating cash flow turned negative at $1.37M, compared to $2.59M provided in the prior year. Key risks include rising costs and a shift in revenue concentration towards commercial aerospace.

Key Financial Figures

• $0.01 — ch Registered: Shares of common stock, $0.01 par value IEHC OTC ID Market Indicate

Filing Documents

• ea0263479-10q_iehcorp.htm (10-Q) — 557KB
• ea026347901ex31-1_iehcorp.htm (EX-31.1) — 11KB
• ea026347901ex31-2_iehcorp.htm (EX-31.2) — 11KB
• ea026347901ex32-1_iehcorp.htm (EX-32.1) — 6KB
• 0001213900-25-108184.txt ( ) — 3795KB
• iehc-20250930.xsd (EX-101.SCH) — 31KB
• iehc-20250930_cal.xml (EX-101.CAL) — 30KB
• iehc-20250930_def.xml (EX-101.DEF) — 145KB
• iehc-20250930_lab.xml (EX-101.LAB) — 289KB
• iehc-20250930_pre.xml (EX-101.PRE) — 160KB
• ea0263479-10q_iehcorp_htm.xml (XML) — 488KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION 1 Item 1.

Financial Statements

Financial Statements 1 Condensed Balance Sheets as of September 30, 2025 (unaudited) and March 31, 2025 1 Condensed Statements of Operations for the three and six months ended September 30, 2025 and 2024 (unaudited) 2 Condensed Statements of Changes in Stockholders' Equity for the three and six months ended September 30, 2025 and 2024 (unaudited) 3 Condensed Statements of Cash Flows for the six months ended September 30, 2025 and 2024 (unaudited) 4 Notes to Unaudited Condensed Financial Statements 5 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 15 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 20 Item 4.

Controls and Procedures

Controls and Procedures 20

– OTHER INFORMATION

PART II – OTHER INFORMATION 21 Item 1.

Legal Proceedings

Legal Proceedings 21 Item 1A.

Risk Factors

Risk Factors 21 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 21 Item 3. Defaults Upon Senior Securities 21 Item 4. Mine Safety Disclosures 21 Item 5. Other Information 21 Item 6. Exhibits 21 EXHIBIT INDEX 22

SIGNATURES

SIGNATURES 23 i CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and Section 27A of the Securities Act of 1933, as amended (the "Securities Act"). Any statements contained in this report that are not statements of historical fact may be forward-looking statements. When we use the words "anticipates," "plans," "estimates," "expects," "believes," "should," "could," "may," "will" and similar expressions, we are identifying forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future financial events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Forward-looking statements involve risks and uncertainties described under "Risk Factors" in Part II, Item 1A, and elsewhere in this Quarterly Report on Form 10-Q, and as set forth in Part 1, Item 1A, "Risk Factors", of our Annual Report on Form 10-K for the fiscal year ended March 31, 2025, filed with the U.S. Securities and Exchange Commission (the "SEC") on June 12, 2025. Forward-looking statements may include statements related to, among other things: macroeconomic factors, including inflationary pressures, supply shortages and recessionary pressures; impact of tariffs on sourcing of raw materials; accounting estimates and assumptions; pricing pressures on our products caused by competition; the risk that our products will not gain market acceptance; our ability to obtain additional financing; our ability to successfully prevent our registration with the SEC from being suspended or revoked; our ability to operate our accounting systems effectively; our ability to protect intellectual property; and our ability to attract and retain key employees. No forward-looking statement is a guarantee of future

: FINANCIAL INFORMATION

PART I: FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements IEH CORPORATION CONDENSED BALANCE SHEETS As of September 30, 2025 March 31, 2025 (Unaudited) Assets Current assets: Cash $ 9,343,032 $ 10,539,828 Accounts receivable, net 4,238,728 3,210,840 Inventories, net 7,636,238 7,265,347 Corporate income taxes receivable 425,314 813,413 Prepaid expenses and other current assets 302,697 201,160 Total current assets 21,946,009 22,030,588 Non-current assets: Property, plant and equipment, net 2,815,959 3,128,177 Operating lease right-of-use assets 1,781,096 1,967,752 Security deposit 75,756 75,756 Total assets $ 26,618,820 $ 27,202,273 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 904,000 $ 876,730 Customer advance payments 2,529 173,074 Operating lease liabilities 424,807 395,325 Equipment financing line of credit 84,360 - Other current liabilities 725,483 801,245 Total current liabilities 2,141,179 2,246,374 Non-Current liabilities: Operating lease liabilities, net of current 1,623,514 1,841,993 Total liabilities 3,764,693 4,088,367 Commitments and Contingencies (Note 11) Stockholders' Equity Common Stock, $ 0.01 par value; 10,000,000 shares authorized; 2,431,278 and 2,388,251 shares issued and outstanding at September 30, 2025 and March 31, 2025, respectively 24,313 23,883 Additional paid-in capital 8,702,614 8,281,344 Retained earnings 14,127,200 14,808,679 Total Stockholders' Equity 22,854,127 23,113,906 Total Liabilities and Stockholders' Equity $ 26,618,820 $ 27,202,273 The accompanying notes are an integral part of these unaudited condensed financial statements. 1 IEH CORPORATION CONDENSED STATEMENT OF OPERATIONS (Unaudited) For the Three Months Ended September 30, For the Six Months Ended September 30, 2025 2024 2025 2024 Revenue $ 7,077,592 $ 7,341,124 $ 13,385,747 $ 14,446,101 Costs and expenses: Cost of products sol

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