SPOKANE VALLEY, WA – Key Tronic Corp. posted fiscal third quarter revenue of $138.4 million, up 3% year-over-year.

Net income for the period was $1 million, an increase of 16% compared to the fiscal third quarter of 2021.

During the quarter, results were again impacted by intermittent parts supply, factory downtime and overtime expenses. The company’s facilities in Shanghai were closed for a portion of the third quarter by a mandated Covid shutdown, although the company expects operations to resume shortly.

Legal costs related specifically to the SEC’s review of last year’s whistleblower complaint totaled approximately $0.06 per diluted share during the quarter, and Key Tronic expects legal costs to potentially continue at a similar pace in coming periods.

For the first nine months ended Apr. 2, revenue was $405.6 million, an increase of 5% compared to the same period last year. Net income was $2.4 million, down 42.9%.

While year-over-year sales have increased, customer demand has been even higher, but production continues to be constrained by global supply chain and transportation issues, the firm says. In the coming quarters, the company expects to ramp a number of new programs, including the previously announced program with a power equipment company at its Mexico facility during the first part of the next fiscal year.

“We’re pleased with the successful ramp of new programs and our expanding customer base in the third quarter of fiscal 2022, despite the continued headwinds from the global supply chain challenges,” said Craig Gates, president and CEO. “At the same time, global logistics problems and heightened assurance of supply concerns continue to drive the favorable trend of contract manufacturing returning to North America. We believe we are well positioned to benefit from this growing demand.

“During the third quarter of fiscal year 2022, we won new programs involving outdoor recreation, RFID, industrial connectivity and electric mobility products. While the global supply chain and Covid-19 crises continue to present uncertainty and multiple business challenges in the fourth quarter, we see the potential for significant growth in fiscal 2023 and beyond.”

For the fiscal fourth quarter, Keytronic expects revenue in the range of $125 million to $135 million. Despite growing customer demand and backlog, the company expects the ongoing disruptions from the global supply chain and Covid-19 issues will continue to significantly limit production and adversely impact operating efficiencies, particularly for its China-based facilities. These expected results assume an effective tax rate of approximately 20% for the full fiscal year.

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