Key Tronic Corporation Announces Results for the Third Quarter of Fiscal 2013 Maintaining Strong Operating Efficiencies; Strengthening Balance Sheet; Continued New Customer Wins and Revenue Diversification Business Wire SPOKANE VALLEY, Wash. -- April 30, 2013 Key Tronic Corporation (Nasdaq: KTCC), a provider of electronic manufacturing services (EMS), today announced its results for the three and nine months ended March 30, 2013. For the third quarter of fiscal year 2013, Key Tronic reported total revenue of $84.3 million, compared to $95.5 million in the same period of fiscal year 2012. For the first nine months of fiscal 2013, total revenue was $276.4 million, up 11% from $249.7 million in the same period of fiscal 2012. Net income for the third quarter of fiscal year 2013 was $2.9 million or $0.26 per diluted share, compared to $3.4 million or $0.32 per diluted share for the same period of fiscal year 2012. For the first nine months of fiscal 2013, net income was $10.2 million or $0.94 per diluted share, up 30% from $7.8 million or $0.74 per diluted share for the same period of fiscal 2012. For the third quarter of fiscal year 2013, gross margin was 9% and operating margin was 4%, compared to 9% and 5%, respectively, in the same period of fiscal year 2012. “After strong year-over-year growth in the first half of fiscal 2013, our revenue in the third quarter was primarily impacted by the anticipated and previously disclosed slowdown from the large customer that began to reduce production levels in the second quarter,” said Craig Gates, President and Chief Executive Officer. “Although we saw a continued ramp up of our new programs in the third quarter, those increases did not yet offset the decreased demand from this one customer. At the same time, we maintained strong operating efficiencies and further strengthened our balance sheet. Over the last year we, paid off over $16.0 million of bank debt, bringing the debt balance to zero, and increased our cash balance by nearly $3.0 million. “We continue to see a robust pipeline of potential new business and have further diversified our future revenue base during the third quarter by winning new customer programs involving RFID, industrial power, LED lighting and commercial washroom equipment. At the end of the third quarter of fiscal 2013, we were generating revenue from 177 separate programs and had 56 distinct customers, up from 155 programs and 42 customers a year ago. While we expect our fourth quarter results to be similar to the third quarter, we currently anticipate renewed sequential growth during the coming fiscal year.” Business Outlook For the fourth quarter of fiscal year 2013, the Company expects to report revenue in the range of $83 million to $87 million, and earnings in the range of $0.21 to $0.27 per diluted share. The expected earnings range assumes an effective tax rate of 32%. 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: 4588514). 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 Nine Months Ended March 30, March 31, March 30, 2013 March 31, 2013 2012 2012 Net sales $ 84,343 $ 95,527 $ 276,418 $ 249,742 Cost of sales 76,483 86,803 249,587 229,145 Gross profit 7,860 8,724 26,831 20,597 Research, development and 1,329 1,153 3,804 3,266 engineering expenses Selling, general and 2,938 2,879 8,406 8,229 administrative expenses Total operating 4,267 4,032 12,210 11,495 expenses Operating income 3,593 4,692 14,621 9,102 Interest 38 130 246 357 expense, net Income before 3,555 4,562 14,375 8,745 income taxes Income tax 692 1,168 4,189 930 provision Net income $ 2,863 $ 3,394 $ 10,186 $ 7,815 Net income per $ 0.27 $ 0.32 $ 0.97 $ 0.75 share — Basic Weighted average shares 10,489 10,447 10,488 10,437 outstanding — Basic Net income per $ 0.26 $ 0.32 $ 0.94 $ 0.74 share — Diluted Weighted average shares 10,931 10,762 10,888 10,517 outstanding — Diluted KEY TRONIC CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) March 30, 2013 June 30, 2012 ASSETS Current assets: Cash and cash equivalents $ 3,202 $ 502 Trade receivables, net 48,435 60,709 Inventories 47,743 58,439 Deferred income tax asset 891 5,201 Other 7,610 4,639 Total current assets 107,881 129,490 Property, plant and equipment—net 18,195 17,306 Other assets: Deferred income tax asset 4,270 2,703 Other 3,896 1,413 Total other assets 8,166 4,116 Total assets $ 134,242 $ 150,912 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 27,284 $ 43,025 Accrued compensation and vacation 6,797 6,337 Current portion of other long-term 762 729 obligations Other 3,802 3,163 Total current liabilities 38,645 53,254 Long-term liabilities: Revolving loan — 15,011 Deferred income tax liability 1,607 1,094 Other long-term obligations 956 2,945 Total long-term liabilities 2,563 19,050 Total liabilities 41,208 72,304 Shareholders' equity: Common stock, no par value—shares authorized 25,000; 43,131 42,372 issued and outstanding 10,489 and 10,481 shares, respectively Retained earnings 47,081 36,895 Accumulated other comprehensive income (loss) 2,822 (659 ) Total shareholders' equity 93,034 78,608 Total liabilities and shareholders’ equity $ 134,242 $ 150,912 Contact: Key Tronic Corporation Chief Financial Officer Ron Klawitter, 509-927-5295 or StreetConnect Investor Relations Michael Newman, 206-729-3625
Key Tronic Corporation Announces Results for the Third Quarter of Fiscal 2013
Press spacebar to pause and continue. Press esc to stop.