• Key Tronic Corporation Announces Results for the Second Quarter of Fiscal Year 2023

    Источник: Nasdaq GlobeNewswire / 31 янв 2023 16:01:50   America/New_York

    SPOKANE VALLEY, Wash., Jan. 31, 2023 (GLOBE NEWSWIRE) -- Key Tronic Corporation (Nasdaq: KTCC), a provider of electronic manufacturing services (EMS), today announced its results for the quarter ended December 31, 2022.

    For the second quarter of fiscal year 2023, Key Tronic reported total revenue of $123.7 million, compared to $134.5 million in the same period of fiscal year 2022. For the first six months of fiscal year 2023, total revenue was $261.0 million, compared to $267.2 million in the same period of fiscal year 2022.

    As previously announced, revenue for the second quarter of fiscal year 2023 was impacted by a six-week delay in starting production for a large program with a leading power equipment company. This delayed revenue by approximately $20 million from the second quarter of fiscal 2023, but production for this program is currently underway and increasing in the third quarter.

    For the second quarter of fiscal year 2023, the Company’s gross margin was 7.2% and operating margin was 2.9%, compared to a gross margin of 7.3% and an operating margin of 1.2% in the same period of fiscal year 2022. The gross margin in the second quarter of fiscal year 2023 was adversely impacted by business interruption and other operational losses related to storm damage to the Company’s Arkansas facility, as well as by preparations for expected sales growth in the second quarter and increased labor costs in both the US and Mexico. While profitability is expected to improve in coming quarters with expected increases in revenue, higher interest rates on our line of credit and increasing wages will limit a portion of that expected improvement.

    For the second quarter of fiscal year 2023, net income was $1.0 million or $0.09 per share, compared to $0.6 million or $0.05 per share for the same period of fiscal year 2022. The Company’s results for the second quarter of fiscal year 2023 include a gain on insurance proceeds of $2.7 million or approximately $0.19 per share related to equipment damaged in the storm at the Company’s Arkansas facility. The Company is still determining further business interruption proceeds related to the operational losses incurred in the past two quarters as a result of the storm damage. For the first six months of fiscal year 2023, net income was $2.1 million or $0.20 per share, compared to $1.4 million or $0.13 per share for the same period of fiscal year 2022.

    “We’re pleased with the successful ramp of new programs and our expanding customer base in the second quarter of fiscal 2023, despite the six-week delay for the large, previously announced power equipment program,” said Craig Gates, President and Chief Executive Officer. “Production for that program is now back on track and rapidly ramping up.”

    “During the second quarter of fiscal year 2023, we continued to see the favorable trend of contract manufacturing returning to North America. We won new programs involving outdoor power equipment, battery management, automated sprinklers and biometric sensor technology. We move into the third quarter with record backlog and we’re seeing improvement in the global supply issues for certain components that have severely limited our production in recent periods.”

    The financial data presented for the second quarter of fiscal year 2023 should be considered preliminary and could be subject to change, as the Company’s independent auditor has not completed their review procedures.

    Business Outlook

    For the third quarter of fiscal 2023, Key Tronic expects to report revenue in the range of $160 million to $170 million and earnings in the range of $0.15 to $0.25 per diluted share. These expected results assume an effective tax rate of 25% in the coming quarter.

    Conference Call

    Keytronic will host a conference call to discuss its financial results at 2:00 PM Pacific (5:00 PM Eastern) today. A broadcast of the conference call will be available at www.keytronic.com under “Investor Relations” or by calling 888-204-4368 or +1-323-994-2093 (Access Code: 5318438). A replay will be available at www.keytronic.com under “Investor Relations”.

    About Key Tronic

    Keytronic is a leading contract manufacturer offering value-added design and manufacturing services from its facilities in the United States, Mexico, China and Vietnam. The Company provides its customers full engineering services, materials management, worldwide manufacturing facilities, assembly services, in-house testing, and worldwide distribution. Its customers include some of the world’s leading original equipment manufacturers. For more information about Keytronic visit: www.keytronic.com.

    Forward-Looking Statements

    Some of the statements in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to those including such words as aims, anticipates, believes, continues, estimates, expects, hopes, intends, plans, predicts, projects, targets, or will, similar verbs, or nouns corresponding to such verbs, which may be forward looking. Forward-looking statements also include other passages that are relevant to expected future events, performances, and actions or that can only be fully evaluated by events that will occur in the future. Forward-looking statements in this release include, without limitation, the Company’s statements regarding its expectations with respect to financial conditions and results, including revenue and earnings during periods of fiscal year 2023, risks of manufacturing supply chain and operational disruptions, demand for certain products and the effectiveness of some of our programs, business from new customers and programs, improvement of supply chain delivery and impacts from operational streamlining. There are many factors, risks and uncertainties that could cause actual results to differ materially from those predicted or projected in forward-looking statements, including but not limited to: the future of the global economic environment and its impact on our customers and suppliers; the availability of components from the supply chain; the availability of a healthy workforce; the accuracy of suppliers’ and customers’ forecasts; development and success of customers’ programs and products; timing and effectiveness of ramping of new programs; success of new-product introductions; the risk of legal proceedings or governmental investigations relating to the subject of the internal investigation by the Company’s Audit Committee and related or other unrelated matters; acquisitions or divestitures of operations or facilities; technology advances; changes in pricing policies by the Company, its competitors, customers or suppliers; impact of new governmental legislation and regulation, including tax reform, tariffs and related activities, such trade negotiations and other risks; and other factors, risks, and uncertainties detailed from time to time in the Company’s SEC filings.


    KEY TRONIC CORPORATION AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF INCOME
    (In thousands, except per share amounts)
    (Unaudited)

     Three Months EndedSix Months Ended
     December 31, 2022 January 1, 2022December 31, 2022 January 1, 2022
    Net sales$123,708  $134,456 $260,971  $267,218
    Cost of sales 114,788   124,648  241,672   247,272
    Gross profit 8,920   9,808  19,299   19,946
    Research, development and engineering expenses 2,287   2,498  4,583   4,947
    Selling, general and administrative expenses 5,735   5,659  11,391   11,254
    Gain on insurance proceeds, net of losses (2,710)    (3,644)  
    Total operating expenses 5,312   8,157  12,330   16,201
    Operating income 3,608   1,651  6,969   3,745
    Interest expense, net 2,507   1,095  4,394   2,087
    Income before income taxes 1,101   556  2,575   1,658
    Income tax provision 134   (31) 456   256
    Net income$967  $587 $2,119  $1,402
    Net income per share — Basic$0.09  $0.05 $0.20  $0.13
    Weighted average shares outstanding — Basic 10,762   10,762  10,762   10,762
    Net income per share — Diluted$0.09  $0.05 $0.20  $0.13
    Weighted average shares outstanding — Diluted 10,832   11,057  10,832   11,055


    KEY TRONIC CORPORATION AND SUBSIDIARIES
    CONSOLIDATED BALANCE SHEETS
    (In thousands)
    (Unaudited)

      December 31, 2022 July 2, 2022
    ASSETS    
    Current assets:    
    Cash and cash equivalents $810  $1,707 
    Trade receivables, net of allowance for doubtful accounts of $14 and $12  134,290   135,876 
    Contract assets  28,329   21,974 
    Inventories, net  171,749   155,741 
    Other  28,969   24,710 
    Total current assets  364,147   340,008 
    Property, plant and equipment, net  27,110   26,012 
    Operating lease right-of-use assets, net  18,652   16,731 
    Other assets:    
    Deferred income tax asset  10,911   10,055 
    Other  11,928   14,117 
    Total other assets  22,839   24,172 
    Total assets $432,748  $406,923 
    LIABILITIES AND SHAREHOLDERS EQUITY    
    Current liabilities:    
    Accounts payable $140,704  $121,393 
    Accrued compensation and vacation  7,813   11,836 
    Current portion of debt, net  6,667   7,402 
    Other  18,285   23,036 
    Total current liabilities  173,469   163,667 
    Long-term liabilities:    
    Term loans  4,603   5,716 
    Revolving loan  109,704   94,577 
    Operating lease liabilities  13,084   12,023 
    Deferred income tax liability  24   64 
    Other long-term obligations  4,553   5,998 
    Total long-term liabilities  131,968   118,378 
    Total liabilities  305,437   282,045 
    Shareholders’ equity:    
    Common stock, no par value—shares authorized 25,000; issued and outstanding 10,762 and 10,762 shares, respectively  47,576   47,474 
    Retained earnings  79,948   77,829 
    Accumulated other comprehensive income (loss)  (213)  (425)
    Total shareholders’ equity  127,311   124,878 
    Total liabilities and shareholders’ equity $432,748  $406,923 


         
    CONTACTS: Brett Larsen Michael Newman
      Chief Financial Officer Investor Relations
      Key Tronic Corporation StreetConnect
      (509) 927-5500 (206) 729-3625

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