SPOKANE VALLEY, WA -- Key Tronic today reported fiscal fourth quarter revenue of $126.2 million, down from $132.6 million in 2021. 

For the quarter ended July 2 net income was $1 million, up from $200,00 in 2021.

The results were impacted by intermittent parts supply and factory downtime. The company’s facilities in Shanghai were closed for most of the quarter due to a government mandated Covid shutdown. (Operations have since resumed.)

Gross margin was 9.3% and operating margin was 1.8%, compared to 7.8% and 1.1%, respectively, in the same period of fiscal year 2021.

The increased margins primarily reflect an increase in sales pricing to recoup higher materials and labor costs incurred by the company throughout the fiscal year. While the fourth quarter was a significant improvement of gross margin, margins are expected to return to historical levels in coming quarters.

For its fiscal 2022 ended July 2, total revenue was $531.8 million, up 3% year-over-year. Net income was $3.4 million, versus $4.3 million in fiscal 2021. During fiscal year 2022, order backlogs reached historic highs, but global supply chain constraints and transportation issues continued to limit production throughout the year.

“Despite the continued headwinds from the global supply chain challenges during fiscal 2022, we still managed to grow our business, driven by the successful ramp of new programs and our expanding customer base,” said Craig Gates, president and chief executive. “During the fourth quarter, we won new programs involving audio products, GPS devices, utility meters, personal safety devices, and innovative internet solutions.

“Moving into fiscal 2023, the global supply chain and Covid-19 crises continue to present uncertainty and multiple business challenges. 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.”

“In fiscal 2023, we expect to ramp a number of new programs, including the previously announced program with a leading power equipment company in our Mexico facility during the second quarter. We believe we are well positioned to benefit from the growing demand for North American onshoring and see the potential for significant growth in fiscal 2023 and beyond.”

The financial data presented for the fourth quarter and year end of fiscal year 2022 should be considered preliminary and could be subject to change, as the Company’s independent auditor has not completed their audit.

For the first quarter of fiscal 2023, Keytronic expects to report 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. 

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