Key Tronic Corporation Announces Results for the Second Quarter of Fiscal Year 2026

About this update from Key Tronic Corporation

Significant Cost Reduction Initiatives in China and Mexico; Continued Program Wins; Positive Cash Flow from Operations SPOKANE VALLEY, Wash., Feb. 03, 2026 (GLOBE NEWSWIRE) -- Key Tronic Corporation (Nasdaq: KTCC), a provider of electronic manufacturing services (EMS), today announced its results for the quarter ended December 27, 2025. For the second quarter of fiscal year 2026, Key Tronic reported total revenue of $96.3 million, compared to $113.9 million in the same period of fiscal year 2025. The reported revenue for the second quarter of fiscal year 2026 was adversely impacted by reduced demand from a longstanding customer, the transition of an end of life program and delays in new program launches as we believe customers continue to face uncertainties in the global economy and volatile trade policies. These decreases were also partially offset by an increase in demand from other longstanding customers and certain program ramps. Additionally, during the second quarter of fiscal year 2026, the Company continued ramping the consigned materials program that was previously announced. For the first six months of fiscal year 2026, total revenue was $195.1 million, compared to $245.4 million in the same period of fiscal year 2025. The Company continued to prepare for anticipated long-term growth by executing its near-shoring and tariff mitigation strategies to reduce costs while maintaining the diversity and flexibility of its key locations and capabilities. During the quarter, Key Tronic initiated a wind-down of its manufacturing operations at its China based facility and instead intends to refocus operations in China on sourcing and procurement activities intended to support its remaining global locations. This initiative is expected to shift more production to the Company’s expanding facilities in the US and Vietnam. The wind-down is expected to be completed by the end of the current fiscal year, and is anticipated to save approximately $1.2 million per quarter following completion. Key Tronic also further reduced its workforce in Mexico, which is expected to provide an additional approximate $1.5 million in quarterly savings, gradually, beginning in the third quarter. These strategic initiatives resulted in charges for severance, inventory write-offs and other related expenses of approximately $10.5 million for the second quarter of fiscal year 202...

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