Key Tronic Corporation Announces First Quarter Fiscal Year 2013 Results

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Key Tronic Corporation Announces First Quarter Fiscal Year 2013 Results

Year-over-Year Revenue Up 40% and Net Income Up 200%

Continued New Customer Wins and Revenue Diversification


SPOKANE VALLEY, Wash.--(BUSINESS WIRE)-- Key Tronic Corporation (NAS: KTCC) , a provider of electronic manufacturing services (EMS), today announced its results for the three months ended September 29, 2012.

For the first quarter of fiscal year 2013, Key Tronic reported total revenue of $97.5 million, up 40% from $69.8 million in the same period of fiscal year 2012. Net income for the first quarter of fiscal year 2013 was $3.7 million or $0.35 per diluted share, up 200% from $1.2 million or $0.12 per diluted share for the same period of fiscal year 2012.

For the first quarter of fiscal year 2013, gross margin was 10% and operating margin was 6%, compared to 7% and 2%, respectively, in the same period of fiscal year 2012.

"We're pleased with our strong year-over-year growth in revenue and earnings for the first quarter of fiscal year 2013," said Craig Gates, President and Chief Executive Officer. "We achieved record quarterly revenue and continued to increase our operating efficiencies. At the end of the first quarter of fiscal 2013, we were generating revenue from 168 separate programs and had 51 distinct customers, up from 135 programs and 36 customers a year ago. We also continued to diversify our future revenue base during the first quarter of fiscal 2013 by winning new programs involving solar energy and power management products.

"While we continue to face global macroeconomic uncertainty, we believe our unique combination of world-class engineering, global logistics and world-class production capabilities in Mexico, China and the United States continues to provide us with competitive advantage. We expect to continue to see our new programs ramp up, our market share increase and our revenue base diversify. As we grow our business over the long term, we remain focused on maintaining outstanding customer service, carefully managing our operating expenses and maximizing our return on invested capital."

Business Outlook

For the second quarter of fiscal year 2013, the Company expects to report revenue in the range of $93 million to $99 million, and earnings in the range of $0.32 to $0.38 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 888-549-7880 or +1-480-629-9770. A 48-hour replay will be available by calling 800-406-7325 or +1 303 590 3030 (Access Code: 4569452). 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 2013. 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
September 29, 2012  October 1, 2011
Net sales$97,508$69,761
Cost of sales88,033 64,756
Gross profit9,4755,005
 
Research, development and engineering expenses1,250956
 
Selling, general and administrative expenses2,529 2,434
Total operating expenses3,779 3,390
Operating income5,6961,615
 
Interest expense, net116 103
Income before income taxes5,5801,512
 

Income tax provision

1,836 265

Net income

3,744 1,247
 
Net income per share — Basic$

0.36

 

$0.12
Weighted average shares outstanding — Basic10,48610,418
 
Net income per share — Diluted$0.35$0.12
Weighted average shares outstanding — Diluted10,83010,446
 
KEY TRONIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 
   September 29, 2012  June 30, 2012
ASSETS
Current assets:
Cash and cash equivalents$1,801$502
Trade receivables, net (allowance for doubtful accounts of $54 and $0)56,69160,709
Inventories56,91258,439
Deferred income tax asset3,8355,201
Other6,240 4,639 
Total current assets125,479 129,490 
Property, plant and equipment—net17,46317,306
Other assets:
Deferred income tax asset2,4162,703
Other1,980 1,413 
Total other assets4,396 4,116 
Total assets$147,338 $150,912 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable$37,918$43,025
Accrued compensation and vacation7,1626,337
Current portion of other long-term obligations739729
Other4,080 3,163 
Total current liabilities49,899 53,254 
Long-term liabilities:
Revolving loan11,09315,011
Deferred income tax liability1,3011,094
Other long-term obligations1,141 2,945 
Total long-term liabilities13,535 19,050 
Total liabilities63,434 72,304 
Shareholders' equity:
Common stock, no par value—shares authorized 25,000; issued and outstanding 10,489 and 10,481 shares, respectively42,69242,372
Retained earnings40,63936,895
Accumulated other comprehensive income (loss)573 (659)
Total shareholders' equity83,904 78,608 
Total liabilities and shareholders' equity$147,338 $150,912 



Key Tronic Corporation
Chief Financial Officer
Ron Klawitter, 509-927-5295
or
StreetConnect
Investor Relations
Michael Newman, 206-729-3625

KEYWORDS:   United States  North America  Washington

INDUSTRY KEYWORDS:

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