Key Tronic Corporation · NASDAQ:KTCC
Key Tronic — Investor Presentation (February 2012)
32 slides from Key Tronic's investor presentation, Feb 6, 2012
Slide 1: Key Tronic (NASDAQ: KTCC)
Exhibit 99.1 NASDAQ: KTCC
Slide 2: Craig D. Gates, President and CEO
Craig D. Gates President and CEO
Slide 3: Leading provider of Electronic Manufacturing Services
Leading provider of Electronic Manufacturing Services (EMS) with unique combination of global capabilities and customer responsiveness
Slide 4: Safe Harbor Statement
Safe Harbor Statement This presentation may contain forward-looking statements within the meaning of the federal securities laws and are subject to the safe harbor under those laws. These forward-looking statements can be identified by the use of words such as "expect", believe", "anticipate", "will
Slide 5: Key Investment Highlights
Outsourcing market expected to continue to grow Strong competitive position: - Unique combination of global capabilities and customer responsiveness - Increasing demand for EMS services in North America and Asia - Unique degree of vertical integration Expanding customer portfolio across diverse indu
Slide 6: Electronic Manufacturing Services Market
Electronic Manufacturing Services Market $0 $50 $100 $150 $200 $250 $300 2011 2012 2013 2014 2015 2016 In Billions Source: IDC, 2012
Slide 7: EMS Provider Tiers
EMS Provider Tiers Tier I: Over $2 billion in annual revenue Tier II: $400 million to $2 billion in annual revenue Tier III: $100 million to $400 million in annual revenue
Slide 8: Integrated Global Operations: US
Integrated Global Operations: US Spokane, Washington - Corporate headquarters - Command and Control - Centralized program management, production control, quality control, material management - Tooling and prototyping - Low volume PCA and box build El Paso, Texas - Product distribution
Slide 9: Integrated Global Operations: Mexico
Integrated Global Operations: Mexico Juarez, Mexico - Volume PCA, box build and plastic molding - Repair operations - 500,000 square feet - Contiguous campus of five facilities - Long term presence since 1984
Slide 10: Integrated Global Operations: China
Integrated Global Operations: China Shanghai, China - International material sourcing organization - High-volume PCA and box build - 130,000 square feet - Presence since 1999
Slide 11: Worldwide Production Mix
Worldwide Production Mix Shanghai China 20% Spokane USA 2% Juarez Mexico 78%
Slide 12: Leveraging Global Capacities
USA-based Management Operations Materials Production Control Quality Control Engineering USA-Based Production Prototyping Low Volume Mexico-based Production Low to high volume China-based Production High volume USA-Based Purchasing Parts China-Based Purchasing Parts Leveraging Global Capacities
Slide 13: Virtual Tier I Capabilities
Virtual Tier I Capabilities International sourcing yields close to Tier I material pricing Chinese and Mexican production yields Tier I conversion costs One Stop Shopping: - Strong production and process design capabilities - Multiple production technologies and vertical Integration - Scalability as
Slide 14: Tier III Responsiveness
Tier III Responsiveness USA-based centralized operations management Customer interface in English Experienced program management for low/mid/high volume programs Experienced management of offshore facilities
Slide 15: Cost/Service Comparison For $5 to $80 Million Program
Tier I Tier II Tier III COST COST RESPONSIVENESS RESPONSIVENESS Rapid Rapid Slow Slow Low Low High High Cost/Service Comparison For $5 to $80 Million Program
Slide 16: Target Accounts
Target Accounts Program with $5 million to $80 million in annual revenue Involves at least two production technologies: - Plastic injection molding - Electrical assembly - Full box build Complex product assembly at account maturity Customer places high value on responsiveness Customer seeking long-t
Slide 17: Profitable and Diverse Customer Programs
Profitable and Diverse Customer Programs Trust. Commitment. Results.
Slide 18: From Wide-Ranging Industries
…From Wide-Ranging Industries Consumer plastic products Consumer electronics Medical devices Specialty printers Gaming Telecommunications Automotive Educational equipment Electric transportation Computer accessories Industrial tools Industrial controls Networking equipment Scientific instruments Dat
Slide 19: Number of Customers Generating Revenue
Number of Customers Generating Revenue Trust. Commitment. Results.
Slide 20: Number of Programs Generating Revenue
Number of Programs Generating Revenue Trust. Commitment. Results.
Slide 21: Historic Transition to EMS
Historic Transition to EMS * Projected Q3 Results
Slide 22: Growth Strategy
Growth Strategy Continue to emphasize unique combination of Tier I capabilities and Tier III responsiveness Continue to invest in volume driven capacity Continue to leverage materials and parts procurement Continue to diversify customer portfolio across many industries Expand into more high-value-ad
Slide 23: Financials - Ronald F. Klawitter, CFO
Financials Ronald F. Klawitter Chief Financial Officer and Treasurer
Slide 24: Core Operating Objectives
Core Operating Objectives Grow faster than EMS industry Maintain strong operating margins and profitability Maintain strong balance sheet ROIC that exceeds cost of capital
Slide 25: Quarterly Revenue
In Millions $60 $40 $20 $- ; 1 ; ; : Q2-FY11 Q3-FY11 Q4-FY11 Q1-FY12 Q2-FY12 Q3-FY12e
Slide 26: Annual Revenue
Annual Revenue * Based on annualized projection through Q3
Slide 27: Target Financial Model
8.2% 4.8% 3.4% Q2-FY12 8.9% 6.1% 2.8% Q2-FY11 7.2% 4.9% 2.3% Q1-FY12 9% - 10% 3% - 4% 5% - 7% Target Financial Model Gross Margin Operating Expenses Operating Margin Expecting gradual improvement with long term growth
Slide 28: Annual Earnings
Annual Earnings * Based on annualized projection through Q3
Slide 29: Operating Margin Percentage
Operating Margin Percentage
Slide 30: Current Ratio and Debt to Equity Ratio
FYO8 FYO9 FY10 FY11 FY12 —@Current Ratio -&Debtto Equity Ratio
Slide 31: KTC ROIC vs Industry Average ROIC
S=— FY 2008 FY 2009 FY2010 FY2011 FY2012 (Projected through Q3 annualized) —*KTCROIC -#Industry Average ROIC
Slide 32: Key Investment Highlights
Outsourcing market expected to continue to grow Strong competitive position: - Unique combination of global capabilities and customer responsiveness - Increasing demand for EMS services in North America and Asia - Unique degree of vertical integration Expanding customer portfolio across diverse indu