Key Tronic Corporation Announces Results for the Third Quarter of Fiscal Year 2023
Record Revenue During the Quarter and Earnings Up 100%; New Program Wins
SPOKANE VALLEY, Wash.– Key Tronic Corporation (Nasdaq: KTCC), a provider of electronic manufacturing services (EMS), today announced its results for the quarter ended April 1, 2023.
For the third quarter of fiscal year 2023, Keytronic reported total revenue of $164.6 million, up 19% from $138.4 million in the same period of fiscal year 2022. As expected, the significant increase in revenue for the third quarter of fiscal year 2023 included production for a large program with a leading power equipment company, as well as increased demand from a number of other customers. For the first nine months of fiscal year 2023, total revenue was $425.5 million, up 5% from $405.6 million in the same period of fiscal year 2022.
For the third quarter of fiscal year 2023, the Company’s gross margin was 8.7% and operating margin was 3.1%, up from a gross margin of 8.3% and an operating margin of 2.0% in the same period of fiscal year 2022. The gross margin in the third quarter of fiscal year 2023 benefited from increased revenue levels and some stabilization in the supply chain and labor market, but it was adversely impacted by foreign currency fluctuations, specifically the strengthening of the Mexican Peso relative to the US Dollar.
For the third quarter of fiscal year 2023, net income was $2.0 million or $0.18 per share, up 100% from $1.0 million or $0.09 per share for the same period of fiscal year 2022. For the first nine months of fiscal year 2023, net income was $4.1 million or $0.38 per share, up 73% from $2.4 million or $0.22 per share for the same period of fiscal year 2022.
“We’re pleased with the significant growth in our revenue and earnings in the third quarter of fiscal 2023, driven by our successful ramp of new programs, including major contributions from the large power equipment program,” said Craig Gates, President and Chief Executive Officer. “We continue to our expand our customer base and won new programs involving security equipment, video and pinball machines, mining safety and productivity products, and telecommunications devices.”
“During the third quarter of fiscal year 2023, we continued to see the favorable trend of contract manufacturing returning to North America and a growing number of potential customers evaluating a migration of their China-based manufacturing to our facility in Vietnam. We move into the fourth quarter with significant backlog levels and a strong pipeline of potential new business, and we’re seeing improvement in the global supply issues and lower labor turnover, which severely limited our production in prior periods.”
The financial data presented for the third quarter of fiscal year 2023 should be considered preliminary and could be subject to change, as the Company’s independent auditor has not completed their review procedures.
Business Outlook
For the fourth quarter of fiscal 2023, Keytronic expects to report revenue in the range of $150 million to $160 million and earnings in the range of $0.10 to $0.20 per diluted share. These expected results assume an effective tax rate of 20% in the coming quarter.
Conference Call
Keytronic will host a conference call to discuss its financial results at 2:00 PM Pacific (5:00 PM Eastern) today. A broadcast of the conference call will be available at www.keytronic.com under “Investor Relations” or by calling 888-394-8218 or +1-323-994-2093 (Access Code: 9727885). A replay will be available at www.keytronic.com under “Investor Relations”.
