SPOKANE VALLEY, WA -- Key Tronic reported fiscal fourth-quarter net income fell 42% from a year ago on a sharp drop in revenue.

For the period ended June 28, the EMS company recorded profits of $1.4 million on revenue of $72.1 million. Sales were down 14.8% from $84.6 million in the same period of fiscal 2013.

For its full fiscal 2014, total revenue was $305.4 million, compared to $361 million for fiscal 2013. Net income was $7.6 million, down from $12.6 million.

For the quarter, gross margin was 9% and operating margin was 3%, compared to 9% and 4%, respectively, a year ago.

Key Tronic also reiterated its pending acquisition of CDR Manufacturing (Ayrshire Electronics) for $46.9 million in cash. CDR has annual revenue of approximately $120 million, and is expected to be immediately accretive to earnings.

"While fiscal 2014 was a challenging year with respect to our total revenue, we continued to make significant progress in ramping up our new programs, expanding our customer base and extending our capabilities," said Craig Gates, president and chief executive. "Throughout the year, our revenue was impacted by slowdowns and delays from certain longstanding customers. At the same time, we saw the continued ramp up of our new programs, while maintaining operating efficiencies and a strong balance sheet.

"We continue to see a robust pipeline of potential new business and have further diversified our future revenue base during the fourth quarter by winning new customer programs involving healthcare, fitness, HVAC and gaming products.

At quarter's end Key Tronic had 196 separate programs across 59 customers, up from 183 programs and 56 customers a year ago.

"Our recent acquisition and successful integration of Sabre Manufacturing has also generated strong interest in our expanded capabilities across our combined customer base," Gates added.

Key Tronic guided for $76 million to $82 million in revenue for its fiscal 2015 first quarter, excluding the potential impact of the planned acquisition of CDR Manufacturing. 

"Moving into the first quarter of fiscal 2015, our new customer programs continue to steadily ramp up and we expect to see renewed sequential growth. Furthermore, our planned acquisition of CDR Manufacturing, if consummated, will represent a major step forward for Key Tronic, significantly growing our revenue and extending our capabilities and customer base worldwide," Gates said.