Business
Key Tronic Corporation Announces Results for the First Quarter of Fiscal Year 2020
Favorable Product Mix and Improved Efficiencies; Expecting Revenue Growth in the Second Quarter SPOKANE VALLEY, Wash., Oct. 29, 2019 (GLOBE NEWSWIRE) -- Key
About this update from Key Tronic Corporation
[{"type":"text","content":"Favorable Product Mix and Improved Efficiencies; Expecting Revenue Growth in the Second Quarter\n SPOKANE VALLEY, Wash., Oct. 29, 2019 (GLOBE NEWSWIRE) -- Key Tronic Corporation (Nasdaq: KTCC), a provider of electronic manufacturing services (EMS), today announced its results for the quarter ended September 28, 2019. For the first quarter of fiscal year 2020, Key Tronic reported total revenue of $105.3 million, compared to $127.5 million in the same period of fiscal year 2019. An unanticipatedly strong increase in the demand for sheet metals from both new and existing customers caused workload balancing challenges. The resulting capacity constraints caused production delays and were the primary reason for the unexpected shortfall in revenue. Despite the revenue shortfall, margin percentages improved when compared with the prior year on far less revenue as a result of favorable product mix and productivity efficiencies. For the first quarter of fiscal year 2020, gross margin was 8.8% and operating margin was 2.4%, compared to 7.5% and 2.0%, respectively, in the same period of fiscal 2019. For the first quarter of fiscal year 2020, net income was $1.6 million or $0.14 per share, compared to net income of $1.6 million or $0.15 per share for the same period of fiscal year 2019. “As the result of concerns over tariffs and trade tension between the US and China, a number of existing and new customers have accelerated their plans to transition from China facilities to our expanding facilities in Mexico and Vietnam,” said Craig Gates, President and Chief Executive Officer. “While this transition and increasing demands in sheet metals caused delays in production during the first quarter, we see this trend as an important and very positive sign over the longer term, as customers see the increasing advantages of our North American and Vietnam based production. We continue to invest in enabling and accelerating this transition as we capitalize on the successful ramp up of our Vietnam facility. “During the first quarter of fiscal 2020, we continued to win significant new business from EMS competitors and from existing customers, including new programs involving electric vehicle charging infrastructure, LED lighting, oil and gas sensors, and flight controls for experimental aircrafts. To prepare for growth in coming quarters, we continue to i...