KEY TRONIC CORPORATION WINS NEW BUSINESS

WITH KAZ INCORPORATED

New Customer’s Programs Expected to Contribute

More Than $25 Million Annually

Spokane Valley, WA— September 9, 2008 -- Key Tronic Corporation (Nasdaq: KTCC), a provider of electronic manufacturing services (EMS), today announced that it expects to begin a new manufacturing program with Kaz, Incorporated, a worldwide leader in consumer, health, home and garden products, in December 2008.

Over the long term, Key Tronic expects to add several other Kaz product programs.  When the combined Kaz programs are in full production, they are anticipated to contribute over $25 million to Key Tronic’s annual revenue.   Key Tronic intends to perform the manufacturing operations in its primary manufacturing facility in Juarez, Mexico.  

“We are very pleased to be working with a world-class customer like Kaz,” said Jack Oehlke, President and Chief Executive Officer. “The Kaz programs will leverage our strong engineering, account management and production capabilities. This important new relationship represents the kind of quality programs we are pursuing and winning, which are expanding our customer base and contributing to profitable long-term growth."

About Kaz, Incorporated

Headquartered in Southborough, Massachusetts, Kaz, Incorporated is a leading global healthcare and home comfort device company.  Kaz has offered high-quality healthcare and home environment products since founder Max Katzman’s invention of the world’s first electric vaporizer over 80 years ago.  Today, Kaz Inc. is a privately held company which designs, manufactures and distributes innovative products worldwide.

About Key Tronic

Key Tronic is a leading contract manufacturer offering value-added design and manufacturing services from its facilities in the United States, Mexico and China.  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 Key Tronic visit: www.keytronic.com.

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 all passages containing verbs such as ‘aims, anticipates, believes, estimates, expects, hopes, intends, plans, predicts, projects or targets’ or nouns corresponding to such verbs.  Forward-looking statements also include other passages that are primarily relevant to expected future events 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 revenue. 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 level of demand in the marketplace for customer products; the accuracy of customer forecasts; success of new customer programs; timing of the ramp up of new programs and the other risks and uncertainties detailed from time to time in the Company’s SEC filings.