KTCC - Earnings call transcript Q2 2022

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Operator

00:02 Good day and welcome to the Q2 Fiscal 2022 Key Tronic Corporation Conference Call. Today's conference is being recorded. 00:15 At this time, I'd like to turn the conference over to Brett Larsen. Please go ahead, sir.

Brett Larsen

00:19 Thank you. everyone. afternoon, Good Larsen, Brett Officer Key of I Chief Tronic. am Financial to I joining thank us like today call. for conference everyone would investor for our

results Gates, this would like in headquarters remind you Executive here Spokane the to XX:XX our course during Craig of Officer. that events may Actual future financial company's we projections I other or me Chief President the predictions. might always, materially. Joining As only forward-looking Please differ or such remember make that events are and or call, our statements regarding is; Valley future statements performance.

this may operations. the XX-Qs we the quarterly SEC financial historical you and information more statistical will the with the in specifically factors and documents X-Ks. For regarding discuss has the call, filed our other review business on and risk XX:XX XX-K, outlined information Please latest company that note

included this the January recorded call of this information of and XX:XX X, release we Some available website. a is quarter today's ended version for our our Today, be in will XXXX. press on results released

fiscal for to of expenses second quarter previous equipment increased fiscal second revenue when reported to year total million, period $XXX.X compared million XX:XX other the compared XXXX, the customer year. to XXXX. reimbursements Revenue we for the of million of of related fiscal quarter in For year and $XXX.X XXXX same the tooling, approximately $XX

factory and over million, continue compared fiscal XXXX. supply million and disrupt first the transportation pandemic $XXX.X XX:XX XXXX, of second six total parts For including to the intermittent to the year expenses. quarter months $XXX.X of the issues global supply, production, was of During downtime same revenue chain time in XXXX, period fiscal fiscal

quarter. closure for approximately the whistleblower available the December quarter. the Legal at had related we of million Mexico facilities end costs XX:XX last two $X.X SEC’s of weeks complaint time that for addition, totaled production review specifically limited year’s In to a during in our the seasonal

gross second reimbursements XXXX, operating X.X% did our gross Note year customer quarter year attributed was the margin the an margin X.X% X.X% during was period the in of operating of fiscal of For of quarter and not contribute margin. fiscal a revenue year that of margin XX:XX XXXX. to to second and to fiscal same compared our X.X%, much margin XXXX gross

million quarter second per the share, year XXXX. For or fiscal to period year fiscal per net or same $X.X compared $X.X XXXX, share for was income of $X.XX the million of $X.XX

to or $X.XX for year six sheet. period fiscal balance XXXX, share per For compared million months the $X.XX $X.X the of $X.X per year or to XX:XX Turning million of first income share XXXX. fiscal net was same the

We continue financial to strong position. maintain a

in from As transfer decreased programs, ramp of delays new a second the quarter supply quarter. production of result the and and XXXX prior the continued chain fiscal turns inventory our of related

to in from We that were At line efforts are In XX:XX parts begin bringing much with and timing in turns reflecting the be chain more our supply in of out in to quarters, the the and improvements in receivables improved of new further of time look impact to as the about quarter, begin to second requires down issues carefully now $X production expected to shipments prior we expect the than production. net mitigate ramp. revenue customer the balancing demand future trade quarter, yield planned see collections. production of successfully planning programs and The XX:XX the periods. end likelihood we historical million for future the inventory

and launches, production of to and increased uncertainty of restarts components. in of in both $X.XX delays timing future in approximately pandemic working We're While limit by the customer currently as also significantly closures, customer customers, million we to of fiscal will third slowdowns from capital fluctuations attributable requirements from suppliers Our quarter, and total delays related costs, XX:XX impacted logistics quarter to their of is growing DSOs in and and of sheet wins, due prior the COVID the to future backlog. current the remained respective first ratio about our are and a down some largely XX diluted key during markets. and disruptions see XX:XX potential changing and were XX:XX of customers improve components XX production environment, $XXX X other Vietnam days, This quarter, continued efficiencies. demand Overall, new the on as pandemic, $XXX.X and the payments and has balance reflects in same who new expect $X to shipments improvements and total to which X. SMT our earnings operating, summary, to while around In as plastic working XXXX. customer We coming current million rapidly to continue to employees a growing our facilities of could and capital continue and delays global factors and XX:XX quarter selectively supply the supply Despite equipment, following during efficiency million facilities equipment well the prepare add to China in health for expenditures as about temporary operations eye capacity. adversely fiscal impact Total the for demand report availability to full customer were minimize molding the U.S., XX:XX our and and new to limited growth Mexico, key in programs. in quarter in increased million. the plan year capabilities, of the production our fiscal continue we XXXX, expenditures of guidelines, during our expenditures invest chain periods. possibility and make capital careful the approximately freight we $X.XX to program keeping will second XXXX $XXX our operating key expect per the on expect For costs, revenue We're million with be global impact of effects for $X demand closely boarding share.

the However, in continue the quarter supply business remain and future our second and during periods. impact chain risks disruptions pandemic to

by the continue However, strong of and we we programs levels to prospects the won prospects to business unprecedented Key we recently growth, are XX:XX our term. our believe company to continue well The are profitably future our demand that to appears That's for programs and win continue to it our Tronic. me, expand and backlog to EMS from growing financial over positioned XX:XX for customer by and increase new new encouraged health overall Craig. longer increasingly to sales

Craig Gates

Brett. Thanks. X:XX Okay.

headwinds of worldwide supply the in challenges stiff ramp and we the chain in of successful customer we're programs pleased the expanding pandemic, XXXX. the face While from fiscal quarter our continue second base with to new

the for emerging believe to During near worldwide parts. have have XX:XX the persistent and $XXX These timing the quarter, for significantly excess supply demand cause revenue we production the electronic term. it second in industry shortages in to disruptions the do store the of shortages improve supply the in customer issues, chain supply million. quarter driven cost not continues for we Had particularly to second chain extended of been would triple. expect transportation components, face key Unfortunately, not

all our staff XX:XX customers and face some labor new costs these with a labor shortages. struggled new at production of programs. wide and increasing continued the of shortages also challenges, of In winning as the part sites, We we ramping industry of

quarter, During control, lighting industrial new the programs energy we and second production won systems. disinfection, involving robots, management food

we This and for part world's year also design which help ramped of power XX:XX of XXXX one could manufacturing significant expect million to first new product our supply annual the fully fiscal is large in new of our because once We customer their the XX:XX and program announced fulfil our without as have programs equipment contribute leading of new to quarter many We expertise $XX a in design them to our to won in would companies, to increased win which expansion base. approximately be to chain accelerate, begin important manufacturing ability selected ideal capabilities introduction with revenue. and were solution of relationship multi-region our issues. to as the this customer an enhance designed products footprint, availability not new We represents demand. well

fiscal significant across in quarter increase our facilities. production the XXXX, a of we saw During U.S.-based second

business, annual facility revenue big in the our quarters, facilities over three Moreover, fact, our XX% will this Midwestern grow from savings facilities new we by expect future. at Vietnam expect one we and in result over those last which have generated Da facility by production In increase continues the to year. of our an Nang XX:XX next in time

driven political intensifying factors time calls, no increasing in to provide supply Tronic a These between to in North less and have and million. on on programs risky discussed previous diversification lessen of Asian remain foreseeable to for American to very range business. we've easy, overconcentration to Asian market and ideal concentration North weakening costs Asian Key answer increase continues As base their significant and our costly. with companies less $XXX America, supply customer and with China emerged grow $X dollar. pressures U.S. into of a production powerful. has end for as Demand everything onshore tariffs, for chain the XX:XX our make supply those production particularly U.S., of million the needed the We tensions to

higher-volume cost sources local both the close provides products. and set markets sources with to products companies geographic solution for Our low-volume low for

to attract have companies no lost have those production We who providing an production likely engineering that smooth the source, XX:XX transfer control. move the companies and more to a of Asian capability. by competitor also We have enabling have services facilitate with concentrated hence the overly design been the longer engineering from and to site, our can

chains to will they the transfer. of to product believe vertical weigh continuing their significant board, XX:XX supply cost quarter still any in third for XXXX custom staggering business an more continue of to just decade see about the their significant and we appropriation their the recognize of which of their supply events partner. doing formal processes pleased outsource design pandemic. fiscal availability, supply the questions. integration concludes fully will risk, I imaginable. time and who to Moving threat one a portion growth term. that be partner products of into capabilities This we of Moreover, involved XX:XX long lessen to your answer challenges force key uncertainty over any now time, factors. continue minimize to and the these for on same can surrounds outsourced risk our after a and the These cost Brett the the of many the should macroeconomic and concentrate on IP chain our global have presentation. components these and impacts array market trends At all attractiveness both force companies XX:XX power the a developing chain an the our disruptions of elongated and the continue our control can and carefully with can can degree, Our on recent to region The risk customers to to

Operator

comes Capital. Tieton XX:XX first Thank our Bill Instructions] you. question with from [Operator And Dezellem today

Bill Dezellem

you. Thank Hi. XX:XX

noted So in one annual the revenue, $XX you was which of new million release, program the six wins, congratulations.

other five, would size you please? of the The characterize those how

Craig Gates

XX:XX million From $X to year. per $XX million

Bill Dezellem

those. five all of For XX:XX

Craig Gates

Yeah. XX:XX

Bill Dezellem

you XX:XX the today? of Great. maybe would changed you're you last situation how to characterize more opening ask just to question? at remarks, over what And in chain the you see but in when Thank more you. this did maybe normal, I'd you where and just coming returning detail kind the then, maybe appropriate your love quarter see than And supply it

Craig Gates

almost last think situation we've There outcomes. sides to to our today. steps the I on deal be two willingness understanding a that gone question, least clear want gone five Beside but it guess, -- acceptance It's denial that that face at with the we've and I In for year to from to and from a denial of to and we situation. the morning, our a don't year our the important about has anger. anger half, and and to like plan many that is business because our is XX:XX people effects Okay. on customers

mean a that give binding longer against I much to willing one want a So time to are component much cost average the that we which two-thirds bit short-term Then, go reacting component market component because of long the another so So shortages. with they unfulfilled times if actually some normal our probably price of had the customers for time it find that's XX:XX get dealing is would it. there our customers better are willing as now. us to increases, us that to increases are we going took to quite how quickly we side an customers component the kind spend extra that an used be in more decide that's side of of teeter-totter the component now agree on the purchase whenever X is of done in, forecasts to the components to to mining gray and

is So it's the that increases. are how a ongoing three-way with dealing teeter-totter price customers

fair, that this, was have to customers We been passing of it in along but our successful are beginning the very price fair. more convince were that increases at hard

our Now has and keeping the hiring People numbers. staff that become themselves seen common and knowledge time it. this people having have accepted, inflation are

availability. other So the but component situation great of our stabilized but in too has situation say has improved, stabilized. the that understand to. stabilized, me, On had equation, than not used the equation the because side has more they I'd the it the they of better accept and excuse a has place, gotten side because customers XX:XX

So lead a hey they that haven't year-to-year less there a times basis to going when that to and leave leave for and although day-to-day causes few balloon still continuing supposed are today, six doing, isn't shipment somebody a were are and and they surprises was still on to months. says, half, quite like

as to say wouldn't continue think gotten on say turnaround. stuff. that worse. they've things know, our really getting do chain So better. far I I I'd this the politicians And to side, supply going stopped is I when crazy don't as have But

sure is -- making improve way ocean, the a the looks of Bill. and gets my so So what's answer from am the XX:XX because on. is not the to I most I my in air, I of a happen just Harbor ships can around it, going lot but LA all behind really of go there I under out know where number think skin it when the steam see they don't the what's can't examples that's going it logic

Bill Dezellem

in in the say feel at the Craig. we three bit we between is you, continue months that three Thank where see stabilized or next now mode a this Do this we of could modest like in you XX:XX a and next a when a, transition you months? next, improvement do see to let's are talk going begin

Craig Gates

is XX:XX months. that it's get have a going to it's wouldn't I not the be to to stable for think, worse be in to I going say while. optimistic to you better any three certainly predict get and next going

Bill Dezellem

the were your guidance or function revenues lead And that seeing that components don't the so XXX you're is and that ordered of ago with [indiscernible] XXX make customer now some guidance -- uptick did your built many increase did from is here XX:XX to being correctly about we're products is XXX, together the quarter a coming but this coming reimbursements seeing XXX to sure that I of include because same the or months have you that times? this get XXX, the

Craig Gates

of in quarters, it. been the time I’d surprise call. confirmation we're of analogy, a quarter all an surprise call Whereas that much all will we Where is able confirmed -- probably get the numbers teeter-totter, but be and -- miss since with parts with started the it we're for or The parts I'm trying up and look more get anticipated not we this in is for believe which them because combination we this numbers, four sided two have of stuck It we're began are first or terms now, XX:XX come phone probably we We confirmed. at the three were going five only for pretty quarters, see projecting to could to firm. to plan. were it we showing last get Whereas right that and through. did phone quarters previous got we're a our if got didn't out cleared

So cleared has the you that difference?

Bill Dezellem

assumptions given, promises those made be you so, then quarter you would this them promises your only revenue guidance risk. accurate, through, miss reason It they in a because if is but the And this if quarters that is call the assumptions will is that had have some there. XX:XX revenues your hearing been conservative prior if the was whereas sometimes you weren't come components don't I'm more right, were I’ll

Craig Gates

-- decreased I'd less don't that more run situation path a a I is standard to I it. just why but conservative confidence. same I said deviation variability. know volume the situation. that’s because more the a or as because maybe think Yeah. you conservative don't know, less, every the we're so The if XX:XX maybe though is That’s don't is tried saying we it little bit, in the to give so we're you call don't but probably trying explanation time word, anyway. changed, the I it's whatever has previously, number, even give there I I fit still right

Bill Dezellem

am think I I XX:XX Thank understanding. you.

may the sales much you good this year switch, me they the to increase, and fiscal in Let U.S. sales mentioned QX? their that a up had if were how ago quarter versus facilities I

Craig Gates

Not they've for probably long years. three a flat pretty XX:XX much been time,

Bill Dezellem

XX:XX this that's that they change so winning, are those what's the that happening a And are increase business you facilities? and meaningful in with anticipating

Craig Gates

Definitely. XX:XX

Bill Dezellem

I'll Hey, in then one question back ask and get line. more XX:XX

with I changed your the facilities. in leading what what the, anticipated U.S. or the to mind so think So revenue has XX% growth

Craig Gates

XX:XX Everything we've has come talked that about to fruition.

market, that decide and Administration first took year away. a are more for chain not we that people of specific couple there an saying, was realization open and operating Tronic that time And was Asian It Biden they've another took the arms administration yeah, people an uncertainties once for this go issue. Welcome once the year, is wasn't site then situation tours realize to -- risk And months we this quoting It the was figured Key they made Asian with all it political figure that. of the takes to for that supply now. to half out takes So economic going the that coming. the realize people aboard. survey, just and it standing awakening

back or pretty steady who much it this we're most the is, exactly to go continue to pick question desperate hoped off answer a is of this thought The does more we spike we So real people and asking pace the ourselves at it what are and happened. a would an of growth. rate will find did

think biased. continue, it's to going but I'm I

Bill Dezellem

perspective. get in back helpful. No. We your appreciate I'll XX:XX line. That's

Craig Gates

Okay. XX:XX

Operator

will And Dezellem Tieton Capital. XX:XX [Operator Instructions] our next question Bill from come with

Bill Dezellem

right. XX:XX a All back zero. line got of the I guess I in of

$X working let year that and like important $X.XX or we to business continue agree roughly call day, that full of share not let's pinpoint or model normal you something be essentially lead it be to me margins your you for a ultimately would the to share have $X.XX except for So $XXX and up has would just XXX swing XX% that assuming a $X.XX the you we down essentially a quarter share missing path, level, correct tax with a a I do paying a $X.XX and some SG&A but have factors? thing. X% number, $XXX,XXX could, is that SEC math environment, earnings am inventory occur rate of in similar, would otherwise the assessment of between if and return per and at the and revenues. to this you Lauriers one that Would would gross in you million And the R&D

Craig Gates

say have X% say, going I'd you all is that -- passing because be not the sure for well, at in out, to we got customers. successful it's to that something through our happen that means that to can inflation, XX:XX first you've pretty

McDonald's can't people to to people. continue see able enough We're to it. get down you If because do to hire going be not they closed

away So and that back if then you we're to normal, model assume is correct. all say your

Bill Dezellem

a days. recognize more they to I right. All lofty these little some easy and assumptions what XX:XX used be seem there is

demand away you're step used million a would which commented a take million one be with that above demand greater that I math, of me it you unprecedented my is at Brett, this that assessment $XXX are margin and some at those were you just I XXX Let meaningfully even the further, at on you then that and of are correct away, the think, and business R&D the there factors again had would moment simple SG&A that than business model, side leverage the economies maybe that of have the assume some assuming model in side? scale, gross to but frankly, all meaning the difficult

Craig Gates

say are to that I'd pretty maybe, probably, that profit that startling. don't with up you come of also I'd say numbers to XX:XX assume need even any but that

million If $XXX quarter you can revenue. to a year a get I -- mean in

Bill Dezellem

I’m totally in No. Understood. alignment. XX:XX

time just ordered to just parts bait these So into and other to to it be there so these run to what because need XXX ask to pass a you've for some take I'll taken -- is Do at are going and quarterly simply that the time take levels, already it's wait or revenue reach of account? rate? need of matter that factors we

Craig Gates

parts, just order it's time. its not can people. people ahead of Yeah, Remember, you XX:XX

that's So in happen to big is, in supply issue States going labor the as componentry. well and the the as what's Mexico, with the

Bill Dezellem

the -- issue. to XX:XX reminder. one on All myopic the for Thanks one on It easy the be for right. me

would to like -- me you that anything to that? add else Let

Craig Gates

No. XX:XX

Bill Dezellem

will XXX of generate and revenue. quarterly the finding right. await we that anxiously Well, XX:XX the All people you parts ordering million to

Craig Gates

Not as in as be, but will be we -- I XX:XX quite will anxiously together. this

Bill Dezellem

XX:XX All understand. right, I

viewing product -- I paid COVID attention Vietnamese moving haven't if Vietnam, know and are there are Vietnam the to the What's had please. and your into customers I pretty How the strict. in how we been to they’re update existing switch or separately, facility? their prospective new could past new your and customers Let's lockdowns.

Craig Gates

passed. question actual really to even answer in everything still is opened situation Vietnam ask required get totally The the get really, though, I'm and along you should are with Okay. to still too they down hard going locked to is that up XX:XX there and this. paperwork a have testing

what going the running strain or next start it's Vietnam. are we with programs that can another quarter The of all I actually to on so, before of to COVID depending the be great. unlock of So potential happens think they're

of We video programs our other tours. site a giving actually seeing ever business have couple there actually us than with on without won customers the

to yet new really people in good XX:XX get continue add question we there our so didn't of that Vietnam also to ask believe encouraging. future Shanghai is So future business. pretty it's can a The which has just you operation, is we the

We of the number we've in have never been able of the really new stay China plant year, business to crack Shanghai pieces built our to business. a code over in China. last of And won

in One -- development quarter business we be one of Chinese a people our and announced shipped and built are that in them, six this by the facility. was we're factory this Shanghai going in to performed to Shanghai

So new hugely wins encouraging the the three future there to over of that's four us that last are business about Shanghai us one for plant of quarters the X.

Bill Dezellem

Not, for the what Craig, China been historically under somewhere have or assumption facility? the say to Shanghai I producing for producing has else to you're lead that changed was China world. had because should that XX:XX in I

Craig Gates

make XX:XX Yeah. we've a That's way Shanghai quite for and it to to make the strategic competitor a to Chinese procedural and changes business. we operational the viable the structural it changes we've requirements been turned run few successful. states market be to There the are of risk Chinese can’t those made lot had that fulfill a and so unique from for out took you case

Bill Dezellem

Congratulations. XX:XX

switch angle available the from four not with that so my Chinese we mind, for before, as but being seems wins least I maybe of that at different a it would on hear that business additional this haven't have lead being apologies With thought well you me program why me won question by moving additional given let probably theorized that of thought capacity China. Let excess China amount away though in capacity to in about available to out, different or firms?

Craig Gates

team I'll the at the flip, for say, all by XX:XX that attributes it's I here common want been backed running It's years. has We've are don't facility. corporate, landscape our Well, competition to over not some competitive so just so China. on there in that good the a very facility Shanghai design XX that be are it in

Bill Dezellem

helpful. That's XX:XX

four China -- wins are China or of China And these sell outside companies want to for Chinese are so they to for build is selling in that companies in China? in

Craig Gates

Both. XX:XX

Bill Dezellem

seem me going would Excellent. and at another any I'm kick the be here customer to off question are The long queue, didn't welcome the ask point. if to you you like very to reimbursements since XX:XX line that you referenced, different the discuss seen we've there are of this out I releases, press kind time called what that you is that would and one now? your dynamics the first what's of in think sorry,

Craig Gates

purchased XX:XX Well result be to be all that's equipment made, of that customers. customer tooling then is and require be for wins and custom completely a our to of business to that new designs completed reimbursed us by

production of there it, it's Harbinger to come. but is on a not why profit So that's much

Bill Dezellem

a we as very view indicator this the should So of favorable XX:XX future.

Craig Gates

yeah, they're future, programs, long-term the big. Of these XX:XX because

the was be is the program that million being only of tooling late the tooling And purchased won't and So that's summer, will but purchased the until $XX is already summer. that in equipment. that program of ramp not end already used one the being of equipment at reimburse in start production bucket that

Bill Dezellem

that customer And what’s then XX:XX business it pretty is wins trying really and that is somehow up fair mean to pretty new money think I well up they're on is to just in I'm actual say or serious disappearing? program industry who going And the tooling more this moving contrast forward. as ends any ends ramps known spend to, I being to

Craig Gates

they sure, every of have million Well, using if for means for $X somebody intention XX:XX it plugs down $X tooling, that of tooling. million that

Bill Dezellem

guess. I right, that. obvious, Thanks the stating about All being Right. XX:XX for polite

shift, customer and million $XX me the if to Let I there… could

Craig Gates

manufacturing $XX of Before in of and do chunk case and purchased their out it customer for that's this actually it’s that, poster engineering customer on no quarter in China you as years had a million kind a XX:XX of child who of last had you expertise. little going change another product is actually and there that to reimbursements before that, total is

of poster spread At a become happening why companies across I a upside a in world? essence cranking you that to So the of Who need time, of time big child long-term say, partner $XX in as to So is chains to We’ll to with their plus Juarez. midst number product. investment too in are two-year who us build program production the we'll companies knew ideation lag that million how of kind the us have for the supply a into replace like we're product and be actually be out risky drifted close of to people they since a kind what between facility year see In It with branding on probably opportunities a finalizing a when feet. it our years will it's in for the purchasing square customer -- two that backstabbed and this learning case another product XXX,XXX more was build is how specialized to us take and more off of build spend And start has their that. that's a million. they China. hopefully equipment $XX spend that the with us. their could that our move we lease worth

Bill Dezellem

really That's Thank you. XX:XX helpful.

of this sounds down So, that this number. and the is you the Are $XX large? same you're first unusually is were that's plugging the no say small opportunities of size it sounds you like pursuing million quite or you you're mentioned additional one hoping, that if large, --

Craig Gates

size. would tend they that say towards I XX:XX

Bill Dezellem

to it customers like them where -- ones equipment essence, once would be that To stickier of also contract it it's sounds buy are that XX:XX would to on manufacturer. be seems larger. are, ramp. the And they to behalf I Those their they tend an important the enough

Craig Gates

sure stickier we've how XX:XX the build company to there what looking right are only they're project, from it's -- what's the cleaners in who's also, to Yeah. very who slot their answer, and to them clear and to when has for learning million interested bowl somebody become toilet here $XX Therefore word everything machines. that somebody in starts built experience

who somebody into bring production. and Asia them team work has group half Somebody has pulling states, ideation designs and who that their decade design into a their a can with out a to projects of moving of the

the who you re-gathering looking across the required be Key When product. boxes and all competitive to the with in about that's come experience make it. in soon to you and up expertise the Tronic checking those Somebody with ex-source start has landscape, working and data Asian off

Bill Dezellem

XX:XX And just a so opposed if more that's the to Is supplier, case that a of fair as partner. speculation? you a become

Craig Gates

XX:XX bet. You

Bill Dezellem

you walk and million to through XX:XX the how that forward were power segue developed We the to that one good has and you that's this you the seeing quarter. $XX and why develop with us a is announced company ultimately equipment that Would win maybe look chosen? who

Craig Gates

that specialists skills mean, could any plastics a for were having on XX:XX and And other to a end that they because not I them in a lay that get -- the design to and and other metals needed going by time, like both hired us took out design for well their commodity to customer. each They try They will year mention that's out because metals not enough to help it and immediate and proposition So good it originally company foster winning both consultant I'm find try child we things deal away. for world tooling it's own. it them plastics. needed and acquisition could it finding somebody that the them a give skills of their and know in

to sticky So there's, somebody find because in rough be else us it's will be to the that a that like future. program to going do

Bill Dezellem

is you in And XX:XX this summer. begin to the going said one

Craig Gates

XX:XX summer. Late

Bill Dezellem

fiscal XX:XX in Late QX.

Craig Gates

Yeah. XX:XX

Bill Dezellem

would the per ramp starting to at $XX What's envision slope a late going one QX year the how of place. full go? do you take you How currently million quarter And from to rate? as XX:XX run

Craig Gates

XX:XX is Again answering god our punishing by us prayers.

it's So steep a ramp.

Bill Dezellem

of XX:XX year. at December Since do don't desk mean and steep course a that a just by the million you're any steep I work, the is the there a ramp behind $XX sit real is ramp actually or over quarter,

Craig Gates

a a No, steep is ramp XX:XX over quarter.

Bill Dezellem

$XX So the could million the producing at quarter. quarter XX:XX a start is customer albeit in that September revenues from -- literally December you start

Craig Gates

XX:XX So we're hoping.

Bill Dezellem

all I darn that about Thanks Well, talked taking there, million Excellent. pretty for questions. earlier. XXX takes XX:XX that I my leave close that it will we because us to think

Craig Gates

XX:XX You Bill. bet. Thanks,

Operator

MKH Melas XX:XX from with And our question George comes Management. come next

George Melas

XX:XX Hey, guys.

Craig Gates

XX:XX Hey, George.

George Melas

also you, to too. questions. XX:XX And always thank pleasure Bill for It’s your listen great

this that you I revenue coming previous seems, low and CapEx tick was said the CapEx. from relatively to on slight growth, Brett, CapEx a question which said and on be it quick down. a this guys expected think you revenue year, fiscal quarter you Just you strong this forecast. I down is think $X think million And I it's

is you Can sort right explain So of it's something working that? there?

Brett Larsen

Yeah. XX:XX

as mentioned we've program we're being mentioned we've think Craig equipment. capacity also for specific previously, I reimbursed that got and George,

this of some monitoring things, see the CapEx So revenue is but year and intent we're those closely, to combination have our less two growth. it

George Melas

you in early. ’XX, And that was too fiscal Okay. it continue to XX:XX expect

Brett Larsen

XX:XX far, something $X that That's expectation return to George, million per would $XX My close in fiscal next it fiscal mean the million year. we're that too spending to CapEx. in typically to year is I

George Melas

the the then And have reinvestment, they understand past just four in been last reinvestment quarters, Difficulty] quarters. Okay. three few in XX:XX [Technical to this or the what quarter

Brett Larsen

Not XX:XX The through. of higher was year-over-year reasons disclosed. sequential was just That even that significantly some this the is we've the than high. quarter quarters of gone that we why one in particular change that

George Melas

million roughly XX:XX than that ago. Is it's was higher $XX it right $XX a million it year and roughly

Brett Larsen

XX:XX No.

$XX than it's have -- million. In it particular will to me Let a million is year $XX one million $X roughly, ago. higher it any was quarter

George Melas

understand just say can so you Can was just Okay. it this quarter, much XX:XX that? how we

Brett Larsen

XX:XX XX. Just over

George Melas

Okay. XX:XX

it we able they as produce for issues So to if that act and sort with that were, the we delays that, sort means production out? we being of can normalize of see

Brett Larsen

Yes. XX:XX

George Melas

Okay. it from guys. XX:XX Thank That’s me. you,

Craig Gates

George. Thanks, XX:XX

Operator

XX:XX Thank you.

and Associates. question Grodsky Our with next from Sheldon comes Grodsky

Sheldon Grodsky

disappear? XX:XX a your afternoon, to everybody. you there'll a questions, quickies. do but inventory have If When the legal expenses Good be few regarding issue? expect I they will have

Craig Gates

no on that. XX:XX We comment have

Sheldon Grodsky

Great. Okay. XX:XX

Okay. quarter, or price you because stock shares? average outstanding just did went for the down I any shares is went buyback down the that your noticed that

Brett Larsen

any not shares. We back buy did XX:XX

Sheldon Grodsky

able in any was a holding get jump but There big Okay. inventory XX:XX to point? are inventories, I at something, we're guess, this you partly because

Craig Gates

you want XX:XX No, buy. to no,

So the rest one we those we part a then of and is unused. build all but sit able result being can product not there are all parts get This all and holding. to the of

Sheldon Grodsky

a is there for that. So XX:XX bad reason having

equipment, equipment more when it question, for is going or done? customer the reimburses equipment? to one be When his Okay. you're you And the is project

Craig Gates

by XX:XX the anyway. his equipment historically, It is equipment when project project all done. is up be is done, the the the time used will But

Sheldon Grodsky

quickly. it a just Okay. I me. for be That have XX:XX few will

Craig Gates

Thank Okay. XX:XX you.

Brett Larsen

you. Thank XX:XX

Operator

And the I'll turn that does session. XX:XX over Thank now conclude question-and-answer you. to back conference you. the

Craig Gates

again, next you today's again Brett Okay. XX:XX call. look Thanks everybody I in for Right. quarter. and talking participating to forward to

Operator

your you. thank And today's conclude for We you Well, day. excellent XX:XX participation. do an thank conference. does that Have

Key Tronic (KTCC) 2 Feb 222022 Q2 Earnings call transcript