SPOKANE VALLEY, Wash., Aug. 20, 2013 (GLOBE NEWSWIRE) -- Key Tronic Corporation (Nasdaq:KTCC), a provider of electronic manufacturing services (EMS), today announced its results for the three months and full year ended June 29, 2013.
For the fourth quarter of fiscal 2013, Key Tronic reported total revenue of $84.6 million, compared to $96.7 million in the same period of fiscal 2012. For the full year of fiscal 2013, total revenue was $361.0 million, up 4% from $346.5 million for fiscal 2012.
Net income for the fourth quarter of fiscal 2013 was $2.4 million or $0.22 per diluted share, compared to $3.8 million or $0.35 per diluted share for the same period of fiscal 2012. For the full year of fiscal 2013, net income was $12.6 million or $1.15 per diluted share, up 8% from $11.6 million or $1.10 per diluted share for the same period of fiscal 2012.
For the fourth quarter of fiscal year 2013, gross margin was 9% and operating margin was 4%, compared to 10% and 5%, respectively, in the same period of fiscal 2012. For the full year of fiscal 2013, gross margin was 10% and operating margin was 5%, up from 9% and 4%, respectively, for fiscal 2012.
On July 1, 2013, the Company completed its previously announced acquisition of Sabre Manufacturing, a sheet metal fabrication company, for approximately $6.0 million in cash. Sabre enables Key Tronic to offer metal fabrication directly to its customers, in combination with plastic molding, PCB assembly, complete product assembly, design engineering and testing engineering services. The acquisition furthers the Company's strategic focus on providing all the EMS services available from a much larger tier I company, while still bringing the flexibility and high customer service levels of a tier II supplier.
"For fiscal 2013, despite a challenging second half, we achieved record annual revenue and earnings," said Craig Gates, President and Chief Executive Officer. "After strong year-over-year growth in the first half of fiscal 2013, our revenue in the second half was primarily impacted by the anticipated slowdown from a large customer. At the same time, we saw the continued ramp up of our new programs, while maintaining strong operating efficiencies and significantly strengthening our balance sheet. During fiscal 2013, we increased our cash by over $10 million, fully paid off over $15 million of bank debt and reduced our inventory by approximately $14 million.
"We continue to see a robust pipeline of potential new business and have further diversified our future revenue base during the fourth quarter by winning new customer programs involving automotive, RFID, power supply and off road vehicle equipment. At the end of the fourth quarter of fiscal 2013, we were generating revenue from 183 separate programs and had 56 distinct customers, up from 165 programs and 48 customers a year ago.
"Moving into the first quarter of fiscal 2014, we are currently seeing a reduction in orders from another large customer and a few of our new programs are not ramping up as rapidly as anticipated. Nevertheless, most of our new customer programs continue to steadily ramp up and we expect to see renewed sequential growth during the second quarter. Moreover, our recent acquisition of Sabre is already paying off. It is accretive to our earnings, winning us new business and generating strong interest in our expanded capabilities across our combined customer base."
Business Outlook
For the first quarter of fiscal 2014, the Company expects to report revenue in the range of $73 million to $78 million, and earnings in the range of $0.15 to $0.20 per diluted share. The expected earnings range assumes an effective tax rate of 30%.
Conference Call
Key Tronic will host a conference call today to discuss its financial results at 2:00 PM Pacific (5:00 PM Eastern). A broadcast of the conference call will be available at www.keytronic.com under "Investor Relations" or by calling 877-654-5175 or +1-914-495-8527. A 48-hour replay will be available by calling 855-859-2056 or +1 404-537-3406 (Conference ID: 17454857). A replay will also be available on the Company's Web site.
About Key Tronic
Key Tronic is a leading contract manufacturer offering value-added design and manufacturing services from its facilities in the United States, Mexico and China. The Company provides its customers full engineering services, materials management, worldwide manufacturing facilities, assembly services, in-house testing, and worldwide distribution. Its customers include some of the world's leading original equipment manufacturers. For more information about Key Tronic visit: www.keytronic.com.
Some of the statements in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all passages containing verbs such as 'aims, anticipates, believes, estimates, expects, hopes, intends, plans, predicts, projects or targets' or nouns corresponding to such verbs. Forward-looking statements also include other passages that are primarily relevant to expected future events or that can only be fully evaluated by events that will occur in the future. Forward-looking statements in this release include, without limitation, the Company's statements regarding its expectations with respect to quarterly revenue and earnings during fiscal 2014. There are many factors, risks and uncertainties that could cause actual results to differ materially from those predicted or projected in forward-looking statements, including but not limited to the future of the global economic environment and its impact on our customers and suppliers, the availability of parts from the supply chain, the accuracy of customers' forecasts; success of customers' programs; timing of new programs; success of new-product introductions; acquisitions or divestitures of operations or facilities; technology advances; changes in pricing policies by the Company, its competitors, customers or suppliers; and the other risks and uncertainties detailed from time to time in the Company's SEC filings.
| KEY TRONIC CORPORATION AND SUBSIDIARIES | ||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||
| (In thousands, except per share amounts) | ||||
| (Unaudited) | ||||
| Three Months Ended | Twelve Months Ended | |||
| June 29, 2013 | June 30, 2012 | June 29, 2013 | June 30, 2012 | |
| Net sales | $84,615 | $96,733 | $361,033 | $346,475 |
| Cost of sales | 76,934 | 87,494 | 326,521 | 316,639 |
| Gross profit | 7,681 | 9,239 | 34,512 | 29,836 |
| Research, development and engineering expenses | 1,352 | 1,178 | 5,156 | 4,444 |
| Selling, general and administrative expenses | 2,824 | 2,812 | 11,230 | 11,041 |
| Total operating expenses | 4,176 | 3,990 | 16,386 | 15,485 |
| Operating income | 3,505 | 5,249 | 18,126 | 14,351 |
| Interest expense, net | 25 | 153 | 271 | 510 |
| Income before income taxes | 3,480 | 5,096 | 17,855 | 13,841 |
| Income tax provision | 1,083 | 1,285 | 5,272 | 2,215 |
| Net income | $2,397 | $3,811 | $12,583 | $11,626 |
| Net income per share — Basic | $0.23 | $0.36 | $1.20 | $1.11 |
| Weighted average shares outstanding — Basic | 10,495 | 10,474 | 10,490 | 10,447 |
| Net income per share — Diluted | $0.22 | $0.35 | $1.15 | $1.10 |
| Weighted average shares outstanding — Diluted | 10,946 | 10,843 | 10,897 | 10,609 |
| KEY TRONIC CORPORATION AND SUBSIDIARIES | ||
| CONSOLIDATED BALANCE SHEETS | ||
| (In thousands) | ||
| (Unaudited) | ||
| June 29, 2013 | June 30, 2012 | |
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $10,819 | $502 |
| Trade receivables, net | 47,009 | 60,709 |
| Inventories | 44,664 | 58,439 |
| Deferred income tax asset | 507 | 5,201 |
| Other | 7,508 | 4,639 |
| Total current assets | 110,507 | 129,490 |
| Property, plant and equipment, net | 17,911 | 17,306 |
| Other assets: | ||
| Deferred income tax asset | 4,439 | 2,703 |
| Other | 2,273 | 1,413 |
| Total other assets | 6,712 | 4,116 |
| Total assets | $135,130 | $150,912 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable | $26,400 | $43,025 |
| Accrued compensation and vacation | 7,413 | 6,337 |
| Current portion of other long-term obligations | 576 | 729 |
| Other | 3,551 | 3,163 |
| Total current liabilities | 37,940 | 53,254 |
| Long-term liabilities: | ||
| Revolving loan | — | 15,011 |
| Deferred income tax liability | 1,585 | 1,094 |
| Other long-term obligations | 1,445 | 2,945 |
| Total long-term liabilities | 3,030 | 19,050 |
| Total liabilities | 40,970 | 72,304 |
| Shareholders' equity: | ||
| Common stock, no par value—shares authorized 25,000; issued and outstanding 10,502 and 10,481 shares, respectively | 43,369 | 42,372 |
| Retained earnings | 49,478 | 36,895 |
| Accumulated other comprehensive income (loss) | 1,313 | (659) |
| Total shareholders' equity | 94,160 | 78,608 |
| Total liabilities and shareholders' equity | $135,130 | $150,912 |