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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%.
