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| 8-K - FORM 8-K - KEY TRONIC CORP | d291101d8k.htm |
Exhibit 99.1
| FOR IMMEDIATE RELEASE | ||||
| CONTACTS: |
Ron Klawitter | Michael Newman | ||
| Chief Financial Officer | Investor Relations | |||
| Key Tronic Corporation | StreetConnect | |||
| (509) 927-5295 | (206) 729-3625 | |||
KEY TRONIC CORPORATION ANNOUNCES SECOND QUARTER RESULTS
Quarterly Revenue Up 38% and Net Income Up 83% Year-over-Year
Spokane Valley, WA — January 31, 2012 — Key Tronic Corporation (Nasdaq: KTCC), a provider of electronic manufacturing services (EMS), today announced its results for the quarter ended December 31, 2011.
For the second quarter of fiscal 2012, Key Tronic reported total revenue of $84.5 million, up 38% from $61.0 million in the same period of fiscal 2011. For the first six months of fiscal 2012, total revenue was $154.2 million, up 24% from $124.4 million in the same period of fiscal 2011.
Net income for the second quarter of fiscal 2012 was $3.2 million or $0.30 per diluted share, up 83% from $1.7 million or $0.17 per diluted share for the same period of fiscal 2011. Net income per diluted share for the second quarter of fiscal 2012 included $0.11 for research and development tax credits. For the first six months of fiscal 2012, net income was $4.4 million or $0.42 per diluted share, up 27% from $3.5 million or $0.33 per diluted share for the same period of fiscal 2011.
For the second quarter of fiscal 2012, gross margin was 8% and operating margin was 3%, compared to 9% and 3%, respectively, in the same period of fiscal 2011. In the third quarter, the Company expects to see its gross margin increase to around 9%.
“We’re very pleased with our strong growth in revenue and earnings for the second quarter of fiscal 2012, driven primarily by the rapid production ramp up for new customer programs,” said Craig Gates, President and Chief Executive Officer, “During the quarter, we achieved the highest quarterly revenue in Key Tronic’s history and significantly increased our operating efficiencies from recent quarters. We also continued to diversify our future revenue base by winning new programs involving irrigation equipment, gaming devices, electric transportation and military equipment.
“Moving into the third quarter, we expect continued strong growth in revenue and earnings. As a result of the increasing recognition of our unique combination of world-class engineering, global logistics and cost-effective production, we’re capturing market share from many of our competitors. As we grow our business, we remain focused on maintaining outstanding customer service, carefully managing our operating expenses and maximizing our return on invested capital.”
Business Outlook
For the third quarter of fiscal 2012, the Company expects to report revenue in the range of $92 million to $97 million, and earnings in the range of $0.30 to $0.35 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 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: 4503180). 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 2012. 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 | Six Months Ended | |||||||||||||||
| December
31, 2011 |
January
1, 2011 |
December
31, 2011 |
January
1, 2011 |
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| Net sales |
$ | 84,454 | $ | 61,038 | $ | 154,215 | $ | 124,378 | ||||||||
| Cost of sales |
77,586 | 55,592 | 142,342 | 112,962 | ||||||||||||
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| Gross profit on sales |
6,868 | 5,446 | 11,873 | 11,416 | ||||||||||||
| Operating expenses: |
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| Research, development and engineering |
1,157 | 961 | 2,113 | 1,875 | ||||||||||||
| Selling, general and administrative |
2,916 | 2,770 | 5,350 | 5,202 | ||||||||||||
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| Total operating expenses |
4,073 | 3,731 | 7,463 | 7,077 | ||||||||||||
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| Operating income |
2,795 | 1,715 | 4,410 | 4,339 | ||||||||||||
| Interest expense |
124 | 75 | 227 | 147 | ||||||||||||
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| Income before income taxes |
2,671 | 1,640 | 4,183 | 4,192 | ||||||||||||
| Income tax (benefit) provision |
(503 | ) | (93 | ) | (238 | ) | 717 | |||||||||
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| Net income |
$ | 3,174 | $ | 1,733 | $ | 4,421 | $ | 3,475 | ||||||||
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| Earnings per share: |
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| Earnings per common share - basic |
$ | 0.30 | $ | 0.17 | $ | 0.42 | $ | 0.34 | ||||||||
| Weighted average shares outstanding - basic |
10,447 | 10,345 | 10,432 | 10,321 | ||||||||||||
| Earnings per common share - diluted |
$ | 0.30 | $ | 0.17 | $ | 0.42 | $ | 0.33 | ||||||||
| Weighted average shares outstanding - diluted |
10,479 | 10,448 | 10,462 | 10,420 | ||||||||||||
KEY TRONIC CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
| December
31, 2011 |
July
2, 2011 |
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| ASSETS |
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| Current assets: |
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| Cash and cash equivalents |
$ | 596 | $ | 1,232 | ||||
| Trade receivables |
47,479 | 40,350 | ||||||
| Inventories |
53,245 | 41,554 | ||||||
| Deferred income tax asset |
4,742 | 3,900 | ||||||
| Other |
4,016 | 4,549 | ||||||
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| Total current assets |
110,078 | 91,585 | ||||||
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| Property, plant and equipment - net |
16,556 | 14,917 | ||||||
| Other assets: |
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| Deferred income tax asset |
7,553 | 4,219 | ||||||
| Other |
574 | 1,643 | ||||||
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| Total other assets |
8,127 | 5,862 | ||||||
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| Total assets |
$ | 134,761 | $ | 112,364 | ||||
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| LIABILITIES AND SHAREHOLDERS’ EQUITY |
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| Current liabilities: |
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| Accounts payable |
$ | 41,170 | $ | 26,149 | ||||
| Accrued compensation and vacation |
4,276 | 4,436 | ||||||
| Current portion of other long-term obligations |
781 | 761 | ||||||
| Other |
3,905 | 1,932 | ||||||
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| Total current liabilities |
50,132 | 33,278 | ||||||
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| Long-term liabilities: |
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| Revolving loan |
7,483 | 6,000 | ||||||
| Deferred income tax liability |
811 | 1,542 | ||||||
| Other long-term obligations |
7,554 | 3,521 | ||||||
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| Total long-term liabilities |
15,848 | 11,063 | ||||||
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| Shareholders’ equity: |
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| Common stock, no par value ( in thousands) - shares authorized 25,000; issued and outstanding 10,447 and 10,399 shares, respectively |
41,442 | 41,014 | ||||||
| Retained earnings |
29,690 | 25,269 | ||||||
| Accumulated other comprehensive (loss) income |
(2,351 | ) | 1,740 | |||||
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| Total shareholders’ equity |
68,781 | 68,023 | ||||||
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| Total liabilities and shareholders’ equity |
$ | 134,761 | $ | 112,364 | ||||
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