IEH Corp (IEHC)

IEH Corporation 2025 10-K Review: Niche Leader Returns to Profitability

IEH Corporation (NASDAQ: IEHC) just closed out its fiscal year ended March 31, 2025 with a notable return to profitability, after posting a net loss in 2024. Below, we break down the key takeaways from this small‐cap specialty manufacturer’s latest 10-K filing and offer an overall investment score.

Warren.AI 💰 6.7 / 10

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1. Business Overview

• Founded: 1941 in New York

• Core Product: Hyperboloid PCB connectors and interconnect solutions

• Technology: Manufactured under the MIL-DTL-55302 military specification for high-reliability applications—defense, aerospace, medical, industrial, commercial space launch

• Customers: Defense contractors, aerospace OEMs, test-equipment makers, medical device firms, commercial space companies

• Certifications: QPL (Qualified Product Listing) from the U.S. DLA, ISO 9001:2015

Competitive Position: IEH is one of the only independent U.S. makers of Hyperboloid connectors, boasting decades of proven reliability in harsh conditions. The company also offers custom engineering—a key differentiator against larger catalog-only competitors.

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2. Revenue by End Market

End Market	2025 Revenue %	2024 Revenue %
Defense	65.7%	60.6%
Commercial Aerospace	19.9%	27.3%
Commercial Space & Other*	14.4%	12.1%

*Includes space launch, medical, industrial, oil & gas.

Takeaway: Defense demand remains the lion’s share. Commercial aerospace dipped but commercial space is on the rise.

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3. 2025 vs. 2024 Financial Highlights

Metric	2025	2024	Change
Net Sales	$28.78 M	$21.52 M	+33.7%
Gross Profit	$7.48 M	$3.27 M	+128.7%
Operating Income (Loss)	$0.57 M	-$3.76 M	+$4.34 M
Net Income (Loss)	$0.99 M	-$2.92 M	+$3.92 M
Cash Flow from Ops	$4.88 M	-$1.91 M	+$6.80 M
Backlog (as of Yr End)	$12.45 M	$18.29 M	-31.9%
Cash & Cash Equivalents (Yr^)	$10.54 M	$6.14 M	+71.6%
Debt	$0.00	$0.00	—

^ excluding $3.5 M cash equivalents in 2024

Takeaway: Sales jumped 34%, gross margins widened to 26%, and the bottom line swung to nearly $1 million in profit. Cash flow turned strongly positive.

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4. Balance Sheet & Liquidity

• Cash & Liquid Assets: $10.5 million

• Receivables: $3.21 million (down from $3.91 M)

• Inventory: $7.27 million (down from $8.73 M)

• PP&E, Net: $3.13 million

• Operating Leases, Net Obligations: $2.24 million

• Working Capital: $19.8 million

Takeaway: The balance sheet remains conservatively leveraged, with no debt and a working capital cushion. Generous cash conversion cycle aided by lower receivables and inventories.

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5. Growth Drivers & Pipeline

1. Defense Spending: 66% of sales. Stable U.S. military budgets, plus rising demand for new systems and upgrades.
2. Commercial Space: 10.6% of sales in 2025 vs. 7.8% in 2024. Capturing growth from private space ventures.
3. Custom Solutions: Engineering‐intensive connectors tailored to customer specs, yielding higher margins.
4. New Products: Hybrid power/signal connectors, high-speed data variants, custom Hyperboloid interconnects.
5. Long-term QPL Listings ensure a continuing role in DLA and MIL-spec supply chains.

Backlog Dip: Customers have slowed new orders while managing inventories. Backlog at $12.45 M compared with $18.29 M a year ago. New contract wins could reignite order flow.

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6. Risks & Red Flags

6.1. Customer Concentration

• Top 2 customers = 32% of 2025 revenues. A loss or order reduction could significantly dent sales.

6.2. SEC Administrative Proceeding

• Past late filings triggered a Section 12(j) proceeding. Risk of suspension or revocation of stock registration. Management is fighting to keep trading alive.

6.3. Internal Controls & Restatements

• Internal control material weakness in IT general controls. 2022 restatements of 2022 & 2021. May strain resources and investor trust.

6.4. Supply Chain & Inflation

• Raw material lead times and costs under pressure. Tariffs and global uncertainty could raise costs or delay production.

6.5. Backlog & Cyclicality

• Backlog fell 32% to $12.45 M. Commercial aerospace remains soft; defense orders can be lumpy.

6.6. Small-Cap Liquidity

• OTC Pink trading; very limited volume and liquidity. Could hamper exit opportunities.

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7. Management & Governance

• CEO & President: David Offerman, 4th-gen family leader. MBA from NYU Stern.

• CFO: Subrata Purkayastha, CPA, seasoned controller and finance manager.

• Board: 7 members, 6 independent. Mix of aerospace, finance and manufacturing backgrounds.

• Stock Plans: 2020 Plan with 750 K share reserve. 565 K options outstanding, no new grants since March 2025. 2024 grants = 70 K options at $7.47.

Governance: Audit & Compensation committees, code of ethics, insider trading policy.

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8. Valuation & Investment Score (1–10)

Strengths:

• Niche technology with long military and aerospace track record
• 2025 return to profitability and strong cash flow
• Strong balance sheet (no debt)
• Growing role in commercial space launch

Risks:

• Customer concentration and backlogged orders down
• Ongoing SEC administrative matter and past restatements
• Limited liquidity (OTC Pink)

Score: 6.7 / 10

Rationale: IEHs leading Hyperboloid connectors carve out a defensible niche, and the 2025 results demonstrate a credible turnaround in both earnings and cash generation. However, customer concentration, a thinner backlog, and governance risks from past filing issues keep us from a higher score. Overall, this looks like a speculative small-cap play in the defense/aerospace components market. Conservative risk‐aware investors could consider a small allocation—but expect volatility and watch the 12(j) outcome closely.

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Net Income (Loss)

• Fiscal 2025: Net Income $ 999,038 (EPS $ 0.42 basic)

• Fiscal 2024: Net Loss –$ 2,916,902 (EPS –$ 1.23)

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Disclosure: This is an independent analysis based on publicly available information. This is not a recommendation to buy or sell securities. Always consult a financial advisor before making investment decisions.