SPOKANE VALLEY, WA – Key Tronic reported fiscal first quarter revenue of $127.5 million, up 16.8% year-over-year and 9% sequentially.

For the quarter ended Sept. 29, net income was $1.6 million, compared net income of $400,000 in the same period last year.

“For the first quarter of fiscal 2019, our new programs continued to ramp, including a strong contribution from Skybell Technologies, despite the continued industry-wide supply chain issues for key components that hampered our growth,” said Craig Gates, president and CEO. “During the first quarter, results were adversely impacted by rising utility costs in Mexico and increasing labor costs. However, we also continued to win new business from EMS competitors, including new programs involving industrial motion control products, power metering, and fire protection systems.

"Moving into the second quarter of fiscal year 2019, although we continue to face industry-wide supply chain issues and increased production costs, we are making significant investments in new equipment and processes to be more productive in both our Mexico and US facilities in anticipation of future growth. Although the details of the tariff situation remain unclear, it seems highly probable the final outcome will be favorable for our US and Mexican operations. Additionally, customers utilizing our facility in China, who are considering repatriating their business back to North America, are finding our centralized systems and controls to be highly advantageous. For these customers, a move back to our facilities in Mexico or the US can be easily implemented.”

During the quarter, the company adopted the new revenue recognition standard, ASU 2014-09 Revenue from Contracts with Customers (Topic 606), beginning July 1. The impact of the adoption resulted in the recognition of $4.9 million in accelerated revenue as the standard requires.

For the fiscal second quarter, Key Tronic expects revenue in the range of $120 million to $125 million.

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