Key Tronic Corporation Announces Results for the Fourth Quarter of Fiscal Year 2024
Key Tronic (KTCC) reported Q4 fiscal 2024 results, with revenue of $125.7 million, down from $162.6 million in Q4 2023. Full-year 2024 revenue was $559.4 million, compared to $588.1 million in 2023. Despite a cybersecurity incident causing $15 million in unfulfilled orders and $2.3 million in additional expenses, the company improved its gross margin to 9.0% in Q4. Net income for Q4 was $0.0 million or $0.00 per share, compared to $1.1 million or $0.10 per share in Q4 2023. For fiscal 2025's first quarter, Key Tronic expects revenue between $140-150 million and earnings of $0.10-$0.20 per diluted share.
Key Tronic (KTCC) ha riportato i risultati del quarto trimestre dell'anno fiscale 2024, con un fatturato di 125,7 milioni di dollari, in calo rispetto ai 162,6 milioni di dollari del quarto trimestre 2023. Il fatturato totale per il 2024 è stato di 559,4 milioni di dollari, rispetto ai 588,1 milioni di dollari del 2023. Nonostante un incidente di cybersecurity che ha causato ordini non evasi per 15 milioni di dollari e spese aggiuntive di 2,3 milioni di dollari, l'azienda ha migliorato il suo margine lordo al 9,0% nel quarto trimestre. Il reddito netto per il quarto trimestre è stato di 0,0 milioni di dollari o 0,00 dollari per azione, rispetto a 1,1 milioni di dollari o 0,10 dollari per azione nel quarto trimestre 2023. Per il primo trimestre dell'anno fiscale 2025, Key Tronic prevede un fatturato tra 140 e 150 milioni di dollari e utili di 0,10-0,20 dollari per azione diluita.
Key Tronic (KTCC) reportó los resultados del cuarto trimestre del año fiscal 2024, con ingresos de 125,7 millones de dólares, una disminución respecto a los 162,6 millones de dólares en el cuarto trimestre de 2023. Los ingresos totales para el año 2024 fueron de 559,4 millones de dólares, en comparación con los 588,1 millones de dólares en 2023. A pesar de un incidente de ciberseguridad que causó 15 millones de dólares en órdenes no cumplidas y 2,3 millones de dólares en gastos adicionales, la compañía mejoró su margen bruto al 9,0% en el cuarto trimestre. La utilidad neta para el cuarto trimestre fue de 0,0 millones de dólares o 0,00 dólares por acción, comparado con 1,1 millones de dólares o 0,10 dólares por acción en el cuarto trimestre de 2023. Para el primer trimestre del año fiscal 2025, Key Tronic espera ingresos entre 140 y 150 millones de dólares y ganancias de 0,10 a 0,20 dólares por acción diluida.
키트로닉 (KTCC)은 2024 회계연도 4분기 결과를 보고했으며, 매출은 1억 2,570만 달러로 2023년 4분기의 1억 6,260만 달러에서 감소하였습니다. 2024년의 전체 연간 매출은 5억 5,940만 달러로, 2023년의 5억 8,810만 달러와 비교되었습니다. 사이버 보안 사건으로 인해 1,500만 달러의 미이행 주문과 추가 비용 230만 달러가 발생했음에도 불구하고, 4분기 총 매출 총이익률은 9.0%로 개선되었습니다. 4분기 순이익은 0.0 백만 달러 또는 주당 0.00 달러로, 2023년 4분기의 110만 달러 또는 주당 0.10 달러와 비교됩니다. 2025 회계연도 첫 분기에 대해 키트로닉은 1억 4,000만에서 1억 5,000만 달러의 매출과 주당 0.10에서 0.20 달러의 순익을 예상하고 있습니다.
Key Tronic (KTCC) a publié les résultats du quatrième trimestre de l'exercice fiscal 2024, avec un chiffre d'affaires de 125,7 millions de dollars, en baisse par rapport à 162,6 millions de dollars au quatrième trimestre 2023. Le chiffre d'affaires total pour l'année 2024 s'est élevé à 559,4 millions de dollars, contre 588,1 millions de dollars en 2023. Malgré un incident de cybersécurité ayant entraîné 15 millions de dollars de commandes non honorées et 2,3 millions de dollars de dépenses supplémentaires, l'entreprise a amélioré sa marge brute à 9,0% au quatrième trimestre. Le revenu net pour le quatrième trimestre était de 0,0 million de dollars ou 0,00 dollar par action, comparé à 1,1 million de dollars ou 0,10 dollar par action au quatrième trimestre 2023. Pour le premier trimestre de l'exercice fiscal 2025, Key Tronic prévoit des revenus compris entre 140 et 150 millions de dollars et des bénéfices de 0,10 à 0,20 dollar par action diluée.
Key Tronic (KTCC) hat die Ergebnisse des vierten Quartals des Geschäftsjahres 2024 veröffentlicht, mit einem Umsatz von 125,7 Millionen Dollar, ein Rückgang von 162,6 Millionen Dollar im vierten Quartal 2023. Der Gesamterlös für das Jahr 2024 betrug 559,4 Millionen Dollar, im Vergleich zu 588,1 Millionen Dollar im Jahr 2023. Trotz eines Cyber-Sicherheitsvorfalls, der zu 15 Millionen Dollar an unerfüllten Bestellungen und 2,3 Millionen Dollar an zusätzlichen Kosten führte, gelang es dem Unternehmen, die Bruttomarge im vierten Quartal auf 9,0% zu erhöhen. Der Nettogewinn für das vierte Quartal betrug 0,0 Millionen Dollar beziehungsweise 0,00 Dollar pro Aktie, verglichen mit 1,1 Millionen Dollar oder 0,10 Dollar pro Aktie im vierten Quartal 2023. Für das erste Quartal des Geschäftsjahres 2025 erwartet Key Tronic einen Umsatz zwischen 140 und 150 Millionen Dollar sowie Gewinne von 0,10 bis 0,20 Dollar pro verwässerter Aktie.
- Improved gross margin to 9.0% in Q4 2024 from 8.5% in Q4 2023
- Workforce reductions in Mexico expected to save over $10 million annually
- Expansion of customer base with new program wins in various industries
- Positive Q1 fiscal 2025 guidance with expected revenue of $140-150 million
- Q4 2024 revenue decreased to $125.7 million from $162.6 million in Q4 2023
- Full-year 2024 revenue declined to $559.4 million from $588.1 million in 2023
- Cybersecurity incident caused $15 million in unfulfilled orders and $2.3 million in additional expenses
- Net income for Q4 2024 dropped to $0.0 million from $1.1 million in Q4 2023
- Full-year 2024 resulted in a net loss of $(0.8) million compared to $5.2 million net income in 2023
Insights
Key Tronic's Q4 FY2024 results reveal a mixed picture. Despite a cybersecurity incident causing a
The adjusted net income of
The cybersecurity incident at Key Tronic underscores the critical importance of robust IT infrastructure in manufacturing. The
Moving forward, investors should monitor Key Tronic's ongoing cybersecurity measures. The incident's resolution and the company's statement about increased defenses against future attacks are positive signs. However, the full extent of the breach and its long-term implications on customer trust and future contracts remain uncertain. This event serves as a stark reminder of the growing cybersecurity risks in the manufacturing sector.
Key Tronic's results reflect broader trends in the EMS industry. The company's expansion into new programs across various sectors, including industrial equipment and medical devices, aligns with the increasing demand for diversified manufacturing capabilities. The mention of a "strong pipeline of new business" and trends towards on-shoring and dual sourcing is particularly noteworthy.
The improved utilization of US and Vietnam facilities for lower-volume, high-service-level products indicates a strategic shift towards higher-margin operations. This, combined with the expected
New Program Wins and Improving Gross Margins
SPOKANE VALLEY, Wash., Aug. 13, 2024 (GLOBE NEWSWIRE) -- Key Tronic Corporation (Nasdaq: KTCC), a provider of electronic manufacturing services (EMS), today announced its results for the quarter and fiscal year ended June 29, 2024.
For the fourth quarter of fiscal year 2024, Key Tronic reported total revenue of
As previously disclosed, a cybersecurity incident caused disruptions and limited access to portions of the Company’s business applications supporting operations and corporate functions at its Mexico and U.S. sites during the fourth quarter of fiscal 2024. During the disruption of business, Key Tronic continued to pay wages in accordance with statutory requirements. The Company also deployed new IT-related infrastructure and engaged cyber security experts to remediate the incident. As a result, the Company incurred additional expenses of approximately
Partially offsetting these additional cybersecurity-related expenses was a favorable weakening of the Mexican Peso that began in the latter half of the fourth quarter, decreasing expenses by approximately
Despite the business disruption event, Key Tronic improved its gross margin during Q4, primarily reflecting its workforce reductions in Mexico during the third quarter and the weakening of the Mexican Peso. The Company’s gross margin was
Net income was
Adjusted net income was
“Despite the significant business disruption from the cyberattack in the fourth quarter, we have taken the necessary steps to get back to full production and increase our defenses against future attacks. We’re seeing improving operating efficiencies from our recent workforce reductions in Mexico, which we expect will continue to save us more than
“As we move into fiscal 2025, we’re seeing a gradual rebound in our Mexico-based production for higher-volume manufacturing and increased utilization of our US and Vietnam facilities for lower-volume products with higher service level requirements. The strong pipeline of new business underscores the continued trend towards on-shoring and dual sourcing of contract manufacturing. We’re well-positioned for growth and improved profitability in coming periods.”
The financial data presented for the fourth quarter and full year of fiscal 2024 should be considered preliminary and could be subject to change, as the Company’s independent auditor has not completed their audit procedures.
Business Outlook
For the first quarter of fiscal 2025, Key Tronic expects to report revenue in the range of
Conference Call
Key Tronic will host a conference call to discuss its financial results at 2:00 PM Pacific (5:00 PM Eastern) today. A broadcast of the conference call will be available at www.keytronic.com under “Investor Relations” or by calling 888-394-8218 or +1-313-209-4906 (Access Code: 2512974). The Company will also reference accompanying slides that can be viewed with the webcast at www.keytronic.com under “Investor Relations”. A replay will be available at www.keytronic.com under “Investor Relations”.
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, China and Vietnam. The Company provides its customers with 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
Forward-Looking Statements
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, but are not limited to those including such words as aims, anticipates, believes, continues, estimates, expects, hopes, intends, plans, predicts, projects, targets, will, or would, similar verbs, or nouns corresponding to such verbs, which may be forward looking. Forward-looking statements also include other passages that are relevant to expected future events, performances, and actions 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 financial conditions and results, including revenue and earnings, including as a result of the impact of the cybersecurity incident, cost savings from workforce reduction, demand for certain products and the effectiveness of some of its programs, business from customers and programs, and impacts from operational streamlining, and efficiencies. 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 completion of the Company’s investigation regarding the cybersecurity incident, including the possibility that containment and remediation may not be successful; the improper use of exfiltrated information from the cybersecurity incident and related regulatory proceedings or litigation; the future of the global economic environment and its impact on our customers and suppliers; the availability of components from the supply chain; the availability of a healthy workforce; the accuracy of suppliers’ and customers’ forecasts; development and success of customers’ programs and products; timing and effectiveness of ramping of new programs; success of new-product introductions; the risk of legal proceedings or governmental investigations relating to the subject of the internal investigation by the Company’s Audit Committee and related or other unrelated matters; acquisitions or divestitures of operations or facilities; technology advances; changes in pricing policies by the Company, its competitors, customers or suppliers; impact of new governmental legislation and regulation, including tax reform, tariffs and related activities, such trade negotiations and other risks; and other factors, risks, and uncertainties detailed from time to time in the Company’s SEC filings.
Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared in accordance with generally accepted accounting principles in the United States (GAAP), we use certain non-GAAP financial measures, adjusted net income and adjusted net income per share. We provide these non-GAAP financial measures because we believe they provide greater transparency related to our core operations and represent supplemental information used by management in its financial and operational decision making. We exclude (or include) certain items in our non-GAAP financial measures as we believe the net result is a measure of our core business. We believe this facilitates operating performance comparisons from period to period by eliminating potential differences caused by the existence and timing of certain income and expense items that would not otherwise be apparent on a GAAP basis. Non-GAAP performance measures should be considered in addition to, and not as a substitute for, results prepared in accordance with GAAP. We strongly encourage investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. Our non-GAAP financial measures may be different from those reported by other companies. See the table below entitled “Reconciliation of GAAP to non-GAAP measures” for reconciliations of adjusted net income and adjusted net income per share to the most directly comparable GAAP measures, which are GAAP net income and GAAP net income per share.
| KEY TRONIC CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited) | ||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||
| June 29, 2024 | July 1, 2023 | June 29, 2024 | July 1, 2023 | |||||||||||
| Net sales | $ | 125,689 | $ | 162,610 | $ | 559,396 | $ | 588,135 | ||||||
| Cost of sales | 114,363 | 148,712 | 517,364 | 540,663 | ||||||||||
| Gross profit | 11,326 | 13,898 | 42,032 | 47,472 | ||||||||||
| Research, development and engineering expenses | 2,135 | 2,573 | 8,368 | 9,735 | ||||||||||
| Selling, general and administrative expenses | 7,203 | 7,363 | 25,465 | 25,715 | ||||||||||
| Gain on insurance proceeds, net of losses | (715 | ) | (261 | ) | (1,146 | ) | (4,301 | ) | ||||||
| Total operating expenses | 8,623 | 9,675 | 32,687 | 31,149 | ||||||||||
| Operating income | 2,703 | 4,223 | 9,345 | 16,323 | ||||||||||
| Interest expense, net | 3,173 | 2,941 | 11,945 | 10,023 | ||||||||||
| Income (loss) before income taxes | (470 | ) | 1,282 | (2,600 | ) | 6,300 | ||||||||
| Income tax (benefit) provision | (507 | ) | 220 | (1,836 | ) | 1,143 | ||||||||
| Net income (loss) | $ | 37 | $ | 1,062 | $ | (764 | ) | $ | 5,157 | |||||
| Net income (loss) per share — Basic | $ | 0.00 | $ | 0.10 | $ | (0.07 | ) | $ | 0.48 | |||||
| Weighted average shares outstanding — Basic | 10,762 | 10,762 | 10,762 | 10,762 | ||||||||||
| Net income (loss) per share — Diluted | $ | 0.00 | $ | 0.10 | $ | (0.07 | ) | $ | 0.47 | |||||
| Weighted average shares outstanding — Diluted | 10,762 | 10,996 | 10,762 | 10,938 | ||||||||||
| KEY TRONIC CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) | ||||||||
| June 29, 2024 | July 1, 2023 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 4,752 | $ | 3,603 | ||||
| Trade receivables, net of allowance for doubtful accounts of | 135,065 | 150,600 | ||||||
| Contract assets | 21,272 | 29,925 | ||||||
| Inventories, net | 108,997 | 137,911 | ||||||
| Other | 25,672 | 27,510 | ||||||
| Total current assets | 295,758 | 349,549 | ||||||
| Property, plant and equipment, net | 28,806 | 28,870 | ||||||
| Operating lease right-of-use assets, net | 15,416 | 16,202 | ||||||
| Other assets: | ||||||||
| Deferred income tax asset | 16,069 | 12,254 | ||||||
| Other | 5,346 | 11,397 | ||||||
| Total other assets | 21,415 | 23,651 | ||||||
| Total assets | $ | 361,395 | $ | 418,272 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 79,394 | $ | 115,899 | ||||
| Accrued compensation and vacation | 6,510 | 13,351 | ||||||
| Current portion of long-term debt | 3,123 | 3,138 | ||||||
| Other | 15,348 | 19,578 | ||||||
| Total current liabilities | 104,375 | 151,966 | ||||||
| Long-term liabilities: | ||||||||
| Long-term debt, net | 116,382 | 121,531 | ||||||
| Operating lease liabilities | 10,312 | 10,317 | ||||||
| Deferred income tax liability | 263 | 274 | ||||||
| Other long-term obligations | 219 | 3,567 | ||||||
| Total long-term liabilities | 127,176 | 135,689 | ||||||
| Total liabilities | 231,551 | 287,655 | ||||||
| Shareholders’ equity: | ||||||||
| Common stock, no par value—shares authorized 25,000; issued and outstanding 10,762 and 10,762 shares, respectively | 47,837 | 47,728 | ||||||
| Retained earnings | 82,222 | 82,986 | ||||||
| Accumulated other comprehensive income (loss) | (215 | ) | (97 | ) | ||||
| Total shareholders’ equity | 129,844 | 130,617 | ||||||
| Total liabilities and shareholders’ equity | $ | 361,395 | $ | 418,272 | ||||
| KEY TRONIC CORPORATION AND SUBSIDIARIES Reconciliation of GAAP to non-GAAP measures (In thousands, except per share amounts) (Unaudited) | ||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||
| June 29, 2024 | July 1, 2023 | June 29, 2024 | July 1, 2023 | |||||||||||
| GAAP net income (loss) | 37 | $ | 1,062 | $ | (764 | ) | $ | 5,157 | ||||||
| Cybersecurity expenses | 2,340 | — | 2,340 | — | ||||||||||
| Severance expenses (benefit) | (223 | ) | 73 | 3,846 | 354 | |||||||||
| Gain on insurance proceeds (net of losses) | (715 | ) | (261 | ) | (1,146 | ) | (4,301 | ) | ||||||
| Stock-based compensation expense | (54 | ) | 76 | 109 | 254 | |||||||||
| Income tax effect of non-GAAP adjustments (1) | (270 | ) | 22 | (1,030 | ) | 739 | ||||||||
| Adjusted net income: | $ | 1,115 | $ | 972 | $ | 3,355 | $ | 2,203 | ||||||
| Adjusted net income (loss) per share — non-GAAP Diluted | $ | 0.10 | $ | 0.09 | $ | 0.31 | $ | 0.20 | ||||||
| Weighted average shares outstanding — Diluted | 10,762 | 10,996 | 10,854 | 10,938 | ||||||||||
| (1) Income tax effects are calculated using an effective tax rate of | ||||||||||||||
| CONTACTS: | Tony Voorhees | Michael Newman | ||
| Chief Financial Officer | Investor Relations | |||
| Key Tronic Corporation | StreetConnect | |||
| (509)-927-5345 | (206) 729-3625 |
FAQ
What was Key Tronic's (KTCC) revenue for Q4 fiscal 2024?
How did the cybersecurity incident affect Key Tronic's (KTCC) Q4 2024 results?
What is Key Tronic's (KTCC) revenue guidance for Q1 fiscal 2025?
How much does Key Tronic (KTCC) expect to save annually from workforce reductions in Mexico?
