Key Tronic Corp
NASDAQ:KTCC
Key Tronic Corp
Key Tronic Corp. engages in the provision of electronics manufacturing services. The company is headquartered in Spokane, Washington and currently employs 5,450 full-time employees. The firm is engaged in designing, building and delivering keyboards for computers in the United States. The firm provides a mix of manufacturing services for outsourced original equipment manufacturing (OEM) products and electronic manufacturing services (EMS). The firm provides EMS services include product designing, surface mount technologies and pin through hole capability for printed circuit board assembly, tool making, precision plastic molding, sheet metal fabrication and painting, liquid injection molding, complex assembly, automated tape winding, prototype design and full product assembly. The company focuses on manufacturing as contract manufacturer of various products. Its design and engineering in electronics, mechanical engineering, sheet metal fabrication and stamping, and precision plastics and assembly on an international basis while providing customer service.
Key Tronic Corp. engages in the provision of electronics manufacturing services. The company is headquartered in Spokane, Washington and currently employs 5,450 full-time employees. The firm is engaged in designing, building and delivering keyboards for computers in the United States. The firm provides a mix of manufacturing services for outsourced original equipment manufacturing (OEM) products and electronic manufacturing services (EMS). The firm provides EMS services include product designing, surface mount technologies and pin through hole capability for printed circuit board assembly, tool making, precision plastic molding, sheet metal fabrication and painting, liquid injection molding, complex assembly, automated tape winding, prototype design and full product assembly. The company focuses on manufacturing as contract manufacturer of various products. Its design and engineering in electronics, mechanical engineering, sheet metal fabrication and stamping, and precision plastics and assembly on an international basis while providing customer service.
Revenue Decline: Key Tronic reported Q2 revenue of $96.3 million, down from $113.9 million in the same quarter last year, driven mainly by reduced demand from a long-standing customer and end-of-life program transitions.
Margins Impacted: Gross margin fell to 0.6% and operating margin to negative 10.7%, primarily due to $10.5 million in charges related to winding down China operations and Mexico workforce reductions.
Cost Savings Initiatives: The company is winding down its China plant and reducing the Mexico workforce, expecting combined annualized savings of about $2.7 million per quarter after implementation.
Adjusted Margins Higher: Excluding restructuring charges, adjusted gross margin for Q2 was 7.9%.
Profitability Outlook: Net loss widened to $8.6 million ($0.79 per share), but management expects breakeven net income by fiscal year-end as cost savings and new programs ramp up.
CapEx Guidance: Capital expenditures are expected to be $8–10 million for the year, aimed at automation and new equipment.
No Forward Guidance: Due to macro uncertainty and timing of new program ramps, the company is not providing Q3 guidance.
