Key Tronic Corporation Announces Preliminary Results for the Third Quarter of Fiscal Year 2024
SPOKANE VALLEY, Wash. (GLOBE NEWSWIRE) — Key Tronic Corporation (Nasdaq: KTCC), a provider of electronic manufacturing services (EMS), today announced its preliminary results for the three months ended March 30, 2024.
For the third quarter of fiscal 2024, Key Tronic expects to report revenue of approximately $140 million, in line with revenue expectations, and a net loss of approximately ($0.18) to ($0.23) per share, which is below expectations.
The lower than expected earnings are primarily a result of severance costs of approximately $3.7 million, or $0.27 per diluted share, as the Company reduced its workforce by over 450 employees in Mexico. Moreover, the severance costs were incurred late in the third quarter, which limited the previously planned payroll expense reductions anticipated in the third quarter. The workforce reduction reflects softening demand for a number of different programs with high labor content and is expected to save more than $10 million annually.
Key Tronic expects production levels from Mexico-based facilities to recover in coming quarters due to recently won programs. The Company does not anticipate needing to increase its net headcount in coming periods, which would reflect significant improvements to operating efficiencies.
During the third quarter of fiscal 2024, Key Tronic’s facilities in Mississippi and Arkansas were also offline for approximately two weeks due to severe winter weather events, resulting in unanticipated lost production capacity incurring a loss of contribution margin of approximately $1 million or $0.07 per diluted share. The Company also continued to be adversely impacted by the strengthening of the Mexican Peso by approximately 5% , increasing expenses by approximately $1.5 million or $0.11 per diluted share.
At the same time, Key Tronic continued to win significant new programs and reduce inventories to be more in line with current revenue levels.
For the fourth quarter of fiscal 2024, the Company expects to report revenue in the range of $135 million to $145 million and earnings in the range of $0.00 to $0.10 per diluted share.
The revenue and earnings estimates for the third and fourth quarters of fiscal 2024, and the finalization of financial results for the third quarter of 2024, are subject to completion of the Company’s quarterly close and review procedures which are still ongoing. The Company plans to report its complete results and host its earnings conference call for the third quarter of fiscal 2024 on May 7, 2024.
