SPOKANE VALLEY, WA – Key Tronic reported fiscal third quarter revenue of $108 million, flat with the same quarter last year.

For the quarter, the firm posted a net loss of approximately $12 million, compared to net income of $600,000 in the same quarter of fiscal 2018.

The company’s results were adversely impacted by reduced orders from two large, longstanding customers. One of these customers needed to lower its inventory but expects a rebound in demand in the fiscal fourth quarter. The other customer is managing inventory as it is transitioning its 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.

Key Tronic reduced its workforce by approximately 10% during the period, resulting in a severance charge of $1.1 million.

For the nine months ended Mar. 30, revenue was $358.5 million, up 9% year-over-year. The company posted a net loss of $8.8 million, compared to net income of $900,000 in the same nine-month period last year.

“While we were significantly impacted by the unanticipated decline in demand from two large customers, we expect both of these new programs to rebound and contribute significant revenue in the fourth quarter,” said Craig Gates, president and CEO. “At the same time, our new programs continue to ramp, and we continue to win significant new business from both EMS competitors and existing customers, including four new programs involving consumer kitchen tools, emergency medical equipment, paper dispensing products, and outdoor LED lighting.

“We expect to report growth in revenue for the fourth quarter and the year. Moreover, our investments in increased efficiencies in recent periods have allowed us to streamline our operations, lowering manufacturing and operating expenses by approximately $3 million annually.”

For the fiscal fourth quarter, Key Tronic expects revenue in the range of $112 million to $117 million.

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