Key Tronic Corporation Announces Second Quarter Results

Key Tronic Corporation (Nasdaq:KTCC), a provider of electronic manufacturing services (EMS), today announced its results for the quarter ended December 31, 2011.

For the second quarter of fiscal 2012, Key Tronic reported total revenue of $84.5 million, up 38% from $61.0 million in the same period of fiscal 2011. For the first six months of fiscal 2012, total revenue was $154.2 million, up 24% from $124.4 million in the same period of fiscal 2011.

Net income for the second quarter of fiscal 2012 was $3.2 million or $0.30 per diluted share, up 83% from $1.7 million or $0.17 per diluted share for the same period of fiscal 2011. Net income per diluted share for the second quarter of fiscal 2012 included $0.11 for research and development tax credits. For the first six months of fiscal 2012, net income was $4.4 million or $0.42 per diluted share, up 27% from $3.5 million or $0.33 per diluted share for the same period of fiscal 2011.

For the second quarter of fiscal 2012, gross margin was 8% and operating margin was 3%, compared to 9% and 3%, respectively, in the same period of fiscal 2011. In the third quarter, the Company expects to see its gross margin increase to around 9%.

“We’re very pleased with our strong growth in revenue and earnings for the second quarter of fiscal 2012, driven primarily by the rapid production ramp up for new customer programs,” said Craig Gates, President and Chief Executive Officer, “During the quarter, we achieved the highest quarterly revenue in Key Tronic’s history and significantly increased our operating efficiencies from recent quarters. We also continued to diversify our future revenue base by winning new programs involving irrigation equipment, gaming devices, electric transportation and military equipment.

“Moving into the third quarter, we expect continued strong growth in revenue and earnings. As a result of the increasing recognition of our unique combination of world-class engineering, global logistics and cost-effective production, we’re capturing market share from many of our competitors. As we grow our business, we remain focused on maintaining outstanding customer service, carefully managing our operating expenses and maximizing our return on invested capital.”

Business Outlook

For the third quarter of fiscal 2012, the Company expects to report revenue in the range of $92 million to $97 million, and earnings in the range of $0.30 to $0.35 per diluted share. The expected earnings range assumes an effective tax rate of 30%.

Conference Call

Key Tronic will host a conference call today to discuss its financial results at 2:00 PM Pacific (5:00 PM Eastern). A broadcast of the conference call will be available at www.keytronic.com under “Investor Relations” or by calling 866-225-8754 or +1-480-629-9645. A 48-hour replay will be available by calling 800-406-7325 or +1-303-590-3030 (Access Code: 4503180). 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 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 quarterly revenue and earnings during fiscal 2012. 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 parts from the supply chain, 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.
KEY TRONIC CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
     
Three Months Ended Six Months Ended
December 31, January 1, December 31, January 1,
2011 2011 2011 2011
 
Net sales $ 84,454 $ 61,038 $ 154,215 $ 124,378
Cost of sales   77,586     55,592     142,342     112,962
Gross profit on sales 6,868 5,446 11,873 11,416
 
Operating expenses:
Research, development and engineering 1,157 961 2,113 1,875
Selling, general and administrative   2,916     2,770     5,350     5,202
 
Total operating expenses   4,073     3,731     7,463     7,077
 
Operating income 2,795 1,715 4,410 4,339
 
Interest expense   124     75     227     147
 
Income before income taxes 2,671 1,640 4,183 4,192
 
Income tax (benefit) provision   (503 )   (93 )   (238 )   717
 
Net income $ 3,174   $ 1,733   $ 4,421   $ 3,475
 
 
Earnings per share:
 
Earnings per common share - basic $ 0.30 $ 0.17 $ 0.42 $ 0.34
Weighted average shares outstanding - basic 10,447 10,345 10,432 10,321
 
Earnings per common share - diluted $ 0.30 $ 0.17 $ 0.42 $ 0.33
Weighted average shares outstanding - diluted 10,479 10,448 10,462 10,420
KEY TRONIC CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
 
 
December 31, July 2,
2011 2011
ASSETS
Current assets:
Cash and cash equivalents $ 596 $ 1,232
Trade receivables 47,479 40,350
Inventories 53,245 41,554
Deferred income tax asset 4,742 3,900
Other   4,016     4,549
Total current assets   110,078     91,585
 
Property, plant and equipment - net 16,556 14,917
 
Other assets:
Deferred income tax asset 7,553 4,219
Other   574     1,643
Total other assets   8,127     5,862
 
Total assets $ 134,761   $ 112,364
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 41,170 $ 26,149
Accrued compensation and vacation 4,276 4,436
Current portion of other long-term obligations 781 761
Other   3,905     1,932
Total current liabilities   50,132     33,278
 
Long-term liabilities:
Revolving loan 7,483 6,000
Deferred income tax liability 811 1,542
Other long-term obligations   7,554     3,521
Total long-term liabilities   15,848     11,063
 
Shareholders' equity:

Common stock, no par value ( in thousands) - shares authorized 25,000; issued and outstanding 10,447 and 10,399 shares, respectively
41,442 41,014
Retained earnings 29,690 25,269
Accumulated other comprehensive (loss) income   (2,351 )   1,740
Total shareholders' equity   68,781     68,023
 
Total liabilities and shareholders' equity $ 134,761   $ 112,364

Copyright Business Wire 2010

If you liked this article you might like

Key Tronic (KTCC) Downgraded From Buy to Hold

Key Tronic (KTCC) Downgraded From Buy to Hold

3 Stocks Pushing The Computer Hardware Industry Lower

3 Stocks Pushing The Computer Hardware Industry Lower

3 Stocks Pushing The Computer Hardware Industry Lower

3 Stocks Pushing The Computer Hardware Industry Lower

8 Stocks Surging on Big Volume

8 Stocks Surging on Big Volume

Key Tronic Stock Soars (KTCC)

Key Tronic Stock Soars (KTCC)