EXHIBIT 99.1
FOR IMMEDIATE RELEASE
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| CONTACTS: | | Ron Klawitter | | Michael Newman |
| | Chief Financial Officer | | Investor Relations |
| | Key Tronic Corporation | | StreetConnect |
| | (509) 927-5295 | | (206) 729-3625 |
KEY TRONIC CORPORATION ANNOUNCES
THIRD QUARTER RESULTS
Growing Revenue Contribution from New Customers:
Taking Steps to Maintain Operating Efficiency; Winning New Business
Spokane Valley, WA— April 28, 2009 — Key Tronic Corporation (Nasdaq: KTCC), a provider of electronic manufacturing services (EMS), today announced its results for the quarter ended March 28, 2009.
For the third quarter of fiscal 2009, Key Tronic reported total revenue of $44.2 million, compared to $51.5 million in the same period of fiscal 2008. For the first nine months of fiscal 2009, total revenue was $139.5 million, compared to $146.8 million in the same period of fiscal 2008.
Net income for the third quarter of fiscal 2009 was $0.3 million or $0.03 per diluted share, compared to $1.2 million or $0.11 per
diluted share for the same period of fiscal 2008. For the first nine months of fiscal 2009, net income was $0.8 million or $0.08 per diluted share, compared to $3.0 million or $0.29 per diluted share for the same period in fiscal 2008.
Results for the third quarter of fiscal 2009 included charges of approximately $0.5 million or $0.05 per diluted share for increased reserves on a doubtful foreign receivable and approximately $0.2 million or $0.02 per diluted share for severance charges related to cost reduction efforts.
“With the challenging global economic environment, we continue to focus on reducing our costs and maintaining our operating efficiency and profitability,” said Craig Gates, President and Chief Executive Officer. “We are pleased that our operating performance for the third quarter was in line with our forecasts. While we have maintained our existing customer base, we continue to see slowdowns in orders among those programs. Although the revenue growth from many of our new programs has also been slowed due to the recession, all of those new programs continue to move forward.
“We continue to add to our pipeline of prospective new programs despite the challenging economy. During the third quarter, we won several new programs involving military electronics, computer networking and telecommunications. Our world-class facilities and unique set of capabilities continue to give us strong competitive advantages. In coming periods, we expect to win new business and further diversify our customer portfolio across a wide range of industries.”
Business Outlook
For the fourth quarter of fiscal 2009, the Company expects revenue in the range of $40 million to $43 million, with earnings in the range of breakeven to $0.02 per share.
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 atwww.keytronic.com under “Investor Relations” or by calling 800-240-5318 or +1 303-262-2130. A 48-hour replay will be available by calling 800-405-2236 or +1 303-590-3000 (Reservation No. 11130264). 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 2009. 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 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 OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
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| | | Third Quarters Ended | | Nine Months Ended | |
| | | March 28
2009 | | March 29
2008 | | March 28
2009 | | March 29
2008 | |
Net sales | | $ | 44,233 | | $ | 51,461 | | $ | 139,460 | | $ | 146,835 | |
Cost of sales | | | 40,921 | | | 47,234 | | | 128,925 | | | 136,039 | |
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Gross profit on sales | | | 3,312 | | | 4,227 | | | 10,535 | | | 10,796 | |
Operating expenses: | | | | | | | | | | | | | |
Research, development and engineering | | | 533 | | | 679 | | | 1,751 | | | 1,997 | |
Selling, general and administrative | | | 2,340 | | | 2,081 | | | 6,533 | | | 5,851 | |
Goodwill impairment | | | — | | | — | | | 765 | | | — | |
Gain on sale of real estate | | | — | | | — | | | — | | | (951 | ) |
| | | | | | | | | | | | | |
| | | 2,873 | | | 2,760 | | | 9,049 | | | 6,897 | |
Operating income | | | 439 | | | 1,467 | | | 1,486 | | | 3,899 | |
Interest expense | | | 131 | | | 254 | | | 493 | | | 764 | |
| | | | | | | | | | | | | |
Income before income taxes | | | 308 | | | 1,213 | | | 993 | | | 3,135 | |
Income tax provision | | | 46 | | | 46 | | | 217 | | | 149 | |
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Net income | | $ | 262 | | $ | 1,167 | | $ | 776 | | $ | 2,986 | |
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Earnings per share: | | | | | | | | | | | | | |
Earnings per common share - basic | | $ | 0.03 | | $ | 0.12 | | $ | 0.08 | | $ | 0.30 | |
Weighted average shares outstanding - basic | | | 10,066 | | | 10,024 | | | 10,057 | | | 9,988 | |
Earnings per common share - diluted | | $ | 0.03 | | $ | 0.11 | | $ | 0.08 | | $ | 0.29 | |
Weighted average shares outstanding - diluted | | | 10,066 | | | 10,207 | | | 10,075 | | | 10,293 | |
KEY TRONIC CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
| | | | | | | |
| | | March 28
2009 | | | June 28
2008 |
ASSETS | | | | | | | |
Current assets: | | | | | | | |
Cash and cash equivalents | | $ | 1,009 | | | $ | 2,879 |
Trade receivables | | | 28,581 | | | | 36,018 |
Inventories | | | 38,356 | | | | 37,927 |
Other | | | 4,568 | | | | 4,893 |
| | | | | | | |
Total current assets | | | 72,514 | | | | 81,717 |
Property, plant and equipment - net | | | 9,940 | | | | 10,798 |
Other assets: | | | | | | | |
Restricted cash | | | 92 | | | | 39 |
Deferred income tax asset | | | 4,177 | | | | 4,210 |
Other | | | 723 | | | | 815 |
Goodwill | | | — | | | | 765 |
| | | | | | | |
Total other assets | | | 4,992 | | | | 5,829 |
Total assets | | $ | 87,446 | | | $ | 98,344 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | |
Current liabilities: | | | | | | | |
Accounts payable | | $ | 21,061 | | | $ | 29,497 |
Accrued compensation and vacation | | | 2,712 | | | | 4,388 |
Current portion of other long term obligations | | | 410 | | | | 470 |
Revolving loan | | | 10,883 | | | | — |
Other | | | 2,090 | | | | 1,667 |
| | | | | | | |
Total current liabilities | | | 37,156 | | | | 36,022 |
Long-term liabilities: | | | | | | | |
Revolving loan | | | — | | | | 12,348 |
Other long-term obligations | | | 666 | | | | 893 |
| | | | | | | |
Total long-term liabilities | | | 666 | | | | 13,241 |
Shareholders’ equity: | | | | | | | |
Common stock, no par value - share authorized 25,000; issued and outstanding 10,066 and 10,024 shares, respectively | | | 39,358 | | | | 39,301 |
Retained earnings | | | 10,556 | | | | 9,780 |
Accumulated other comprehensive loss | | | (290 | ) | | | — |
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Total shareholders’ equity | | | 49,624 | | | | 49,081 |
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Total liabilities and shareholders’ equity | | $ | 87,446 | | | $ | 98,344 |
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