SPOKANE VALLEY, WA -- Key Tronic reported total revenue rose 2% year-over-year to $118.5 million in the December quarter.

Net income was $1.5 million, down $300,000 from 2016.

For the fiscal second quarter gross margin was 8.1% and operating margin was 2.1%, compared to 7.8% and 2.1%, respectively, in the same period of fiscal 2016.

“During the second quarter of fiscal 2017, our new programs continued to ramp, more than offsetting a modest slowdown in demand from a few longstanding customers, which is consistent with EMS industry-wide experience,” said Craig Gates, president and chief executive. “At the same time, we captured significant new business from other EMS competitors, including established programs that will begin generating revenue before the end of fiscal 2017.”

“We recently won new programs involving inventory automation systems and commercial lighting. Moving into the third quarter, we continue to see a robust pipeline of potential new business and our new programs continue to ramp, effectively offsetting softening sales demand in some current programs. In preparation for future growth, we continue to invest in expanding our SMT, sheet metal and plastic molding capabilities.”

For its fiscal third quarter, the EMS company expects revenue in the range of $115 million to $120 million.

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