SPOKANE VALLEY, WA – Key Tronic expects to report fiscal third quarter revenue of approximately $111 million.

For the three months ended Mar. 28, the lower than anticipated revenue is primarily a result of disruptions to supply chains in China caused by the Covid-19 crisis, which delayed the arrival of key components.

In addition, earnings in the fiscal third quarter were impacted by a write-down of $600,000 of receivables from an already struggling customer that was impacted by the pandemic.

Despite the Covid-19 crisis, demand from many customers has remained strong, and some customers have significantly increased their demand, including programs for home-consumer products, healthcare and home exercise equipment. In addition, Key Tronic currently has programs producing subassemblies for personal respirators and is in discussions with potential customers for ventilator manufacturing, driven by the growing global need for these critical healthcare products.

To protect the health of its employees, the company has implemented the recommendations of WHO and the CDC, including social distancing, increased disinfecting, wearing masks, and other precautions. So far, Key Tronic’s facilities in Mexico, the US and Vietnam continue to operate without significant disruptions, except for delays caused by the shortage of critical components from China.

Moving into the fiscal fourth quarter, the firm’s China facilities appear to be returning to full operation, and the supply chain disruptions have been abating.

For the fiscal fourth quarter, Key Tronic expects increased revenue of $120 million to $130 million. These estimates assume China continues to recover from the Covid-19 crisis, including production and supply of key components, and the company’s production facilities in Mexico, the US, and Vietnam continue to operate without significant disruptions.

Key Tronic plans to report its complete fiscal third quarter results Apr. 28.