SPOKANE VALLEY, WA – Key Tronic Corp. reported fiscal fourth quarter revenue of $116 million, up 10% year-over-year.

Net income was $1.5 million, up 87.5% year-over-year. Earnings included a tax benefit from releasing a portion of the company’s allowance on research and development credits taken in previous years of $1.3 million.

For the quarter ended June 27, the company’s revenue was constrained by the temporary shutdown of its facilities in Juarez by the Mexican government due to the Covid-19 pandemic and associated delays in production. Key Tronic incurred additional costs totaling approximately $2.2 million. These expenses are related to the temporary shutdown and restart of the Juarez facility, as well as preventative measures and equipment for employees at its facilities in the US, Mexico, China and Vietnam.

For fiscal 2020, total revenue was $449.5 million, down 3.1% compared to fiscal 2019. Net income was $4.8 million, compared to a net loss of $8 million in the prior year.

“During the past fiscal year, we overcame a number of powerful global headwinds, including component shortages, trade disputes and the Covid-19 crisis, but we see the favorable trend of contract manufacturing returning to North America accelerating,” said Craig Gates, president and CEO. “On balance, the effect of the pandemic on our customer’s demand was a net positive during the second half of fiscal 2020. While some of our customers, particularly in the gaming industry, have seen large decreases in their demand, others have significantly increased their demand, including programs for healthcare and home-oriented consumer products and exercise equipment.

“During the fourth quarter of fiscal year 2020, we won new programs involving sanitizer dispensing, automotive controllers, oil and gas drilling, wireless security and personal healthcare protective equipment. A large program we announced in the third quarter, which when fully ramped is anticipated to contribute $100 million in annual revenue, got underway in the fourth quarter and is expected to contribute to revenue in fiscal 2021.

“As we enter fiscal 2021, uncertainty remains around the continuing impact of Covid-19 and potential future disruptions to our production facilities, and we continue to focus on protecting the health of all of our employees by adhering to current health guidelines. Nevertheless, thanks to the dedication and sacrifices of our employees, we enter the year with increasingly positive momentum. We continue to invest in new capacity and remain optimistic about our long-term opportunities for growth.”

For the fiscal first quarter, Key Tronic expects revenue in the range of $118 million to $125 million.

The firm is working with its customers, suppliers and employees to minimize effects of delays attributable to the continued global pandemic. While the company’s facilities in the US, Mexico, China and Vietnam are currently operating and following health guidelines, uncertainty as to the possibility of future temporary closures, customer demand and costs, and future supply-chain disruptions could significantly impact operations in coming periods. Due to the heightened risks, the company may issue updated guidance during the upcoming quarter.

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