Exhibit 99.1
FOR IMMEDIATE RELEASE
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CONTACTS: | | Ron Klawitter Chief Financial Officer Key Tronic Corporation (509) 927-5295 | | Michael Newman Investor Relations StreetConnect (206) 729-3625 |
KEY TRONIC CORPORATION ANNOUNCES
THIRD QUARTER RESULTS
Revenue Increases 15% from the Previous Quarter
Spokane, WA—April 29, 2004—Key Tronic Corporation (Nasdaq: KTCC), a provider of electronic manufacturing services (EMS), today announced its results for the quarter ended April 3, 2004.
For the third quarter of fiscal 2004, Key Tronic reported total revenue of $37.3 million, up 15% from $32.6 million in the previous quarter and up 22% from $30.6 million for the third quarter of fiscal 2003. For the first nine months of fiscal 2004, total revenue was $104.5 million, up 10% from $95.2 million in the same period of fiscal 2003. Net income for the third quarter of fiscal 2004 was $112,000 or $0.01 per share, compared to a net loss of $287,000 or ($0.03) per share in the previous period and net income of $306,000 or $0.03 per share for the third quarter of fiscal 2003.
“We are pleased with our strong revenue growth in the third quarter,” said Jack Oehlke, President and Chief Executive Officer. “Our growth was driven by increased production on new programs involving consumer products and specialty printer accessories. Despite anticipated start-up costs associated with these new projects, we managed to achieve better than breakeven results in the third quarter.”
“The overall economic environment and the trend towards outsourcing continue to strengthen the demand for EMS services worldwide, and our exceptional range of capabilities and the logistical advantages of our facilities in Mexico continue to help us win new business. In the third quarter, we began production on new programs involving consumer products, electronic toys and office printers. In the fourth quarter, we expect sequential revenue growth in the range of 10% to 20% and earnings of $0.02 to $0.06 per share, as well as continued expansion of our manufacturing capacity.”
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 800-218-4007 or +1 303-262-2190 (Reservation No. 576619). A 48-hour replay will be available by calling 800-405-2236 or +1 303-590-3000 (Reservation No. 576619). 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, Ireland 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 2004. 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 accuracy of customers’ forecasts; success of customers’ programs; timing of new programs; success of new-product introductions; technology advances; changes in pricing policies by the Company, its competitors or customers; 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 OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
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| | | Third Quarters Ended
| | Nine Months Ended
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| | | April 3 2004
| | | March 29
2003
| | April 3
2004
| | | March 29
2003
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Net sales | | $ | 37,316 | | | $ | 30,645 | | $ | 104,535 | | | $ | 95,230 | |
Cost of sales | | | 33,604 | | | | 26,867 | | | 94,675 | | | | 84,463 | |
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Gross profit on sales | | | 3,712 | | | | 3,778 | | | 9,860 | | | | 10,767 | |
Operating expenses: | | | | | | | | | | | | | | | |
Research, development and engineering | | | 638 | | | | 725 | | | 1,926 | | | | 2,209 | |
Selling | | | 681 | | | | 646 | | | 1,527 | | | | 1,569 | |
General and administrative | | | 1,773 | | | | 1,799 | | | 5,268 | | | | 5,425 | |
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Total operating expenses | | | 3,092 | | | | 3,170 | | | 8,721 | | | | 9,203 | |
Operating income | | | 620 | | | | 608 | | | 1,139 | | | | 1,564 | |
Interest expense | | | 273 | | | | 262 | | | 795 | | | | 759 | |
Litigation settlement | | | — | | | | — | | | — | | | | (12,186 | ) |
Other (income) expense | | | (3 | ) | | | 26 | | | (23 | ) | | | (236 | ) |
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Income before income taxes | | | 350 | | | | 320 | | | 367 | | | | 13,227 | |
Income tax provision | | | 238 | | | | 14 | | | 522 | | | | 368 | |
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Net income | | $ | 112 | | | $ | 306 | | $ | (155 | ) | | $ | 12,859 | |
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Earnings per share: | | | | | | | | | | | | | | | |
Earnings per common share—basic and diluted | | | $0.01 | | | | $0.03 | | | ($0.02 | ) | | | $1.33 | |
Weighted average shares O/S—basic | | | 9,673 | | | | 9,673 | | | 9,673 | | | | 9,673 | |
Weighted average shares O/S—diluted | | | 9,793 | | | | 9,675 | | | 9,673 | | | | 9,673 | |
KEY TRONIC CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
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| | | April 3
2004
| | | June 28
2003
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ASSETS | | | | | | | | |
Current Assets: | | | | | | | | |
Cash and cash equivalents | | $ | 1,367 | | | $ | 956 | |
Trade receivables—net | | | 17,845 | | | | 17,078 | |
Inventories | | | 25,426 | | | | 24,151 | |
Other | | | 2,038 | | | | 2,050 | |
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Total current assets | | | 46,676 | | | | 44,235 | |
Property, plant and equipment, net | | | 10,784 | | | | 11,982 | |
Other Assets: | | | | | | | | |
Restricted cash | | | 937 | | | | 1,142 | |
Other—net | | | 808 | | | | 1,001 | |
Goodwill—net | | | 765 | | | | 765 | |
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Total other assets | | | 2,510 | | | | 2,908 | |
Total Assets | | $ | 59,970 | | | $ | 59,125 | |
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LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
Current Liabilities: | | | | | | | | |
Current portion of long term obligations | | $ | 411 | | | $ | 730 | |
Accounts payable | | | 18,363 | | | | 13,145 | |
Accrued compensation and vacation | | | 3,387 | | | | 4,213 | |
Litigation settlement | | | 910 | | | | 1,124 | |
Other | | | 1,484 | | | | 3,240 | |
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Total current liabilities | | | 24,555 | | | | 22,452 | |
Long-Term Liabilities: | | | | | | | | |
Revolving loan | | | 9,505 | | | | 9,864 | |
Litigation settlement | | | 1,861 | | | | 2,593 | |
Other | | | 1,084 | | | | 1,096 | |
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Total long-term liabilities | | | 12,450 | | | | 13,553 | |
Shareholders’ Equity: | | | | | | | | |
Common stock, no par value, authorized 25,000 shares;
issued and outstanding 9,673 and 9,673 shares | | | 38,393 | | | | 38,393 | |
Retained deficit | | | (15,428 | ) | | | (15,273 | ) |
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Total shareholders’ equity | | | 22,965 | | | | 23,120 | |
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Total Liabilities and Shareholders’ Equity | | $ | 59,970 | | | $ | 59,125 | |
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