Spokane Valley,
WA— April 27, 2010 -- Key Tronic Corporation
(Nasdaq: KTCC), a provider of electronic manufacturing services (
For the third quarter of fiscal 2010, Key Tronic
reported total revenue of $51.7 million, up 16% from $44.8 million in the
previous quarter and up 17% from $44.2 million in the same period of fiscal
2009. For the first nine months of
fiscal 2010, total revenue was $137.8 million, compared to $139.5 million in the
same period of fiscal 2009.
Net income for the third quarter of fiscal 2010 was $4.4 million or $0.43 per diluted share, up from $1.7 million or $0.17 per diluted share in the previous quarter and up from $0.3 million or $0.03 per diluted share for the same period of fiscal 2009. Results for the third quarter of fiscal 2010 include a net deferred tax benefit of $2.2 million or approximately $0.22 per diluted share. For the first nine months of fiscal 2010, net income was $6.4 million or $0.63 per diluted share, up from $0.8 million or $0.08 per diluted share for the same period of fiscal 2009.
Higher than anticipated production volumes for the
third quarter of fiscal 2010 resulted in a strong gross margin of 10% and an
operating margin of 4%, up from 7% and 1%, respectively, in the same period of
fiscal 2009.
“We’re very pleased with our strong sequential
growth in revenue and earnings during the third quarter of fiscal 2010, driven
by increased demand from both new and longstanding customers,” said Craig
Gates, President and Chief Executive Officer, “We’ve remained profitable for
25 consecutive quarters by continuing to control our costs, maintain strong
operating efficiencies and improve our new product introduction processes, even
as we have brought many new programs into production and grown our business.
“During the third quarter of fiscal 2010, we
continued to diversify our revenue base by winning new programs involving
specialty printers, motion warning systems and video communications equipment.
We had about $5 million in orders that were delayed to the fourth quarter
because of industry-wide shortages in the global supply chain.
In coming periods, we plan to expand capacity in our world-class campuses
in Mexico and China to accommodate new programs that we have already won and are
moving into production.”
Business
Outlook
For
the fourth quarter of fiscal 2010, the Company
expects to report revenue in the range of $52 million to $58 million, and
earnings in the range of $0.14 to $0.19 per share, reflecting an effective tax
rate of approximately 33%. Previous
quarters have had near zero effective tax rates because profits were offset by
the benefits of net operating loss carryforwards, which have now been fully
recognized. The Company’s forecast
for the fourth quarter of fiscal 2010 may be impacted by continuing supply chain
issues that could result in variances in its results as the world’s solid
state supply ramps up to meet demand.
Conference
Call
Key Tronic will host
a conference call today to discuss its financial results at 2:00 PM Pacific
(5:00 PM Eastern) on April 27, 2010. A
broadcast of the conference call will be available at www.keytronic.com
under “Investor Relations” or by calling 877-941-6010 or +1 480-629-9773. A
48-hour replay will be available by calling 800-406-7325 or +1 303 590 3030
(Access Code: 4282480). A replay
will also be available on the Company’s Web site.
About
Key Tronic
Key
Tronic is a leading contract manufacturer offering value-added design and
manufacturing services from its facilities in the
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 quarterly revenue and earnings during fiscal 2010.
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 accuracy of
customers’ forecasts; success of customers’ programs; timing of new
programs; success of new-product introductions; acquisitions or divestitures of
operations or facilities; technology advances; changes in pricing policies by
the Company, its competitors, customers or suppliers; and the other risks and
uncertainties detailed from time to time in the Company’s SEC filings.
