Key Tronic Corporation announces the results of the first

By on November 2, 2021 0

SPOKANE VALLEY, Washington, November 02, 2021 (GLOBE NEWSWIRE) – Key Tronic Corporation (Nasdaq: KTCC), an electronics manufacturing service provider (EMS), today announced its results for the quarter ended October 2, 2021.

For the first quarter of fiscal 2022, Keytronic reported revenue of approximately $ 132.8 million, up 8% from $ 123.2 million in the same period of l ‘Fiscal Year 2021. Although demand remained strong from new and existing customers, Q1 FY2022 revenue continued to be severely constrained by supply chain challenges. global in materials, transportation, logistics and pandemic.

The global supply chain, pandemic and transportation issues continued to disrupt production during the quarter. The intermittent supply of parts required both plant downtime and overtime expense, which negatively impacted the Company’s margins and profits. In the first quarter of fiscal 2022, the gross margin was 7.6% and the operating margin was 1.6%, compared to a gross margin of 8.1% and an operating margin of 2.3 %, for the same period of fiscal year 2021.

For the first quarter of fiscal 2022, net income was $ 0.8 million or $ 0.07 per share, compared to $ 1.7 million or $ 0.16 per share for the same fiscal 2021 period. Fiscal 2022 first quarter profit was also impacted by other professional services expenses related to the previously disclosed internal investigation of approximately $ 0.4 million during the year. trimester.

Financial data presented for the first quarter of fiscal 2022 should be considered preliminary and may be subject to change as the Company’s independent auditor has not completed its review.

“We are pleased with strong customer demand in the first quarter of fiscal 2022 and our successful launch of major new programs despite persistent headwinds due to global component shortages, transportation bottlenecks and global pandemic, ”said Craig Gates, President and Chief Executive Officer. “During the first quarter of fiscal 2022, we won new programs involving industrial test equipment, medical diagnostic products and pharmaceutical water treatment.

“As fiscal 2022 approaches, component shortages, logistics delays and the COVID-19 crisis continue to present multiple business challenges, but we continue to see the favorable trend for the return of contract manufacturing in North America. With our recent investments in new capacity in North America and Vietnam, we are well prepared for long-term growth as supply chains improve.

Business outlook

For the second quarter of fiscal 2022, Keytronic expects to report revenues of between $ 125 million and $ 135 million and earnings of between $ 0.03 and $ 0.08 per diluted share. These expected results assume an effective tax rate of 25% during the next quarter. Despite growing customer demand and the backlog, we expect delays in the supply of key components for the Company’s operations will continue to significantly limit production and have a negative impact on operational efficiency.

Conference call

Keytronic will host a conference call to discuss its financial results at 2:00 p.m. Pacific (5:00 p.m. Eastern Time) on November 2, 2021. A broadcast of the conference call will be available at www.keytronic.com under “Investor Relations” or in calling 866-248-8441 or + 1-323-289-6576 (access code: 4740716). A replay will be available by calling 888-203-1112 or + 1-719-457-0820 (access code: 4740716).

About Key Tronic

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

Forward-looking statements

Some of the statements contained in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, those containing terms such as objectives, anticipates, believes, continues , could, estimate, expect, hope, intend, plan, predict, project, target or want, similar verbs or nouns corresponding to these verbs, which can be prospective. Forward-looking statements also include other passages which are relevant to expected future events, performance and actions or which can only be fully assessed by events which will occur in the future. Forward-looking statements contained in this press release include, without limitation, statements by the Company regarding its expectations regarding financial condition and results, including revenues, profits, legal and internal review costs and additional costs in fiscal year 2022; expenses related to the COVID-19 pandemic and estimated recovery from it; demand from new and existing customers; and the sourcing of key components and other supply chain, transportation and logistics issues. 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: risks associated with internal investigation by the audit committee, including legal and internal review costs, the risk of legal proceedings or government investigations relating to the subject of the internal investigation and related or unrelated matters; the future of the global economic environment and its impact on our customers and suppliers, especially during the COVID-19 health crisis; the availability of supply chain components; the availability of a healthy workforce; the accuracy of supplier and customer forecasts; the development and success of client programs and products; the timing and effectiveness of the ramp-up of new programs; the success of new product launches; acquisitions or disposals of activities or facilities; technological advances ; changes in pricing policies by the Company, its competitors, customers or suppliers; the impact of new government laws and regulations, including tax reform, tariffs and related activities, these trade negotiations and other risks, including those related to the response to COVID-19; and other factors, risks and uncertainties detailed from time to time in the Company’s filings with the SEC.

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

Three months ended
October 2, 2021 September 26, 2020
Net sales $ 132,762 $ 123,207
Cost of sales 122,624 113,192
Gross profit 10 138 10 015
Research, development and engineering costs 2,449 2 245
Selling, general and administrative expenses 5,595 4,974
Total operating expenses 8,044 7,219
Operating result 2,094 2,796
Interest expense, net 992 681
Income before taxes 1,102 2 115
Provision for income tax 287 396
Net revenue $ 815 $ 1,719
Net earnings per share – Basic $ 0.08 $ 0.16
Weighted Average Shares Outstanding – Basic 10 762 10 760
Net earnings per share – Diluted $ 0.07 $ 0.16
Weighted Average Shares Outstanding – Diluted 11.052 11,040

KEY TRONIC CORPORATION AND SUBSIDIARIES
CONSOLIDATED RESULTS
(In thousands)
(Unaudited)

October 2, 2021 July 3, 2021
ASSETS
Current assets:
Cash and cash equivalents $ 1,544 $ 3 473
Trade receivables, net of allowance for doubtful accounts of $ 303 and $ 275 126,453 110,324
Contract assets 23 651 24,781
Net stocks 143,131 137,329
Other 30 957 23 345
Total current assets 325,736 299,252
Net tangible assets 31,198 35,735
Operating lease right of use assets, net 18,994 15,745
Other assets:
Deferred tax asset 10 252 9 656
Other 5,151 1,458
Total other assets 15,403 11 114
Total assets $ 391 331 $ 361,846
LIABILITIES AND SHAREHOLDERS EQUITY
Current liabilities :
Accounts payable $ 111,659 $ 92,823
Cumulative remuneration and vacation 8,476 11,471
Current share of debt, net 3 951 2 143
Other 17 938 20,268
Total current liabilities 142,024 126,705
Long-term liabilities:
Term loans 7,463 7,906
Revolving loan 100 760 90 362
Operating lease debts 13 727 11,428
Other long-term obligations 4,300 1,740
Total long-term liabilities 126,250 111,436
Total responsibilities 268,274 238,141
Equity:
Common shares, without par value – authorized shares 25,000; 10,762 and 10,762 shares issued and outstanding, respectively 47,249 47,181
Retained earnings 75,267 74,452
Cumulative other comprehensive income 541 2,072
Total equity 123,057 123,705
Total liabilities and equity $ 391 331 $ 361,846
CONTACTS: Brett Larsen Michael newman
Financial director Investor Relations
Key Tronic Corporation StreetConnect
(509) 927-5500 (206) 729-3625


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