SPOKANE VALLEY, WA – Key Tronic reported fiscal third quarter revenue of approximately $108 million, flat year-over-year but below previous guidance.

For the three months ended Mar. 31, the lower revenue is primarily a result of reduced orders from two large, longstanding customers. One of these customers expects a rebound in demand in the fiscal fourth quarter; the other customer is managing inventory as it transitions production from Key Tronic’s China facilities to Key Tronic’s Mexico facilities.

In addition, there were unanticipated delays in the launch of production for two new customers in the third quarter.  The company expects both to contribute significant revenue in the fiscal fourth quarter.

Key Tronic reduced its workforce by approximately 10%, resulting in a severance charge of $1 million during the period. The resultant cost reduction is expected to reduce annual manufacturing and operating expenses by approximately $3 million annually.

The firm expects to report a loss for the fiscal third quarter. Complete results will be released Apr. 30.

For the fiscal fourth quarter, Key Tronic expects to report revenue in the range of $115 million to $120 million.