Key Tronic Corporation Announces Preliminary Results for the Third Quarter of Fiscal Year 2021
May 05 2021 - 4:05PM
Key Tronic Corporation (Nasdaq: KTCC), a provider
of electronic manufacturing services (EMS), today announced its
preliminary results for the quarter ended April 3, 2021.
For the third quarter of fiscal 2021, Key Tronic expects to
report revenue of approximately $134.6 million and earnings of
approximately $0.10 to $0.12 per share.
Customer demand has remained strong and new and existing
customers have increased their backlog. While component supply
issues limited our production, the third quarter was the best
quarter in our history for customer demand, which exceeded $150
million.
The lower than anticipated earnings for the third quarter of
fiscal 2021 are primarily a result of tightening worldwide supply
chain and transportation and logistics issues which delayed the
arrival of key components, causing both factory downtime and
overtime expenses. In addition, earnings in the third quarter of
2021 were impacted by legal expenses related to the previously
disclosed internal investigation discussed below, a temporary
four-day closure of our Mexico facilities during a late winter
storm that caused power disruptions in the region, and continued
but lessening expenses related to COVID-19.
For the fourth quarter of fiscal 2021, Key Tronic expects to
report revenue in the range of $130 million to $140 million with
earnings in the range of $0.10 to $0.20 per share. These estimates
assume continued recovery from the COVID-19 crisis, no worsening of
key components supply for the Company’s business, and additional
legal and internal review expenses during the quarter. Customer
demand remains very strong and we believe could again exceed $150
million if component supply meets demand.
The financial data presented for the third quarter of fiscal
2021 is preliminary and subject to completion of the Company’s
quarterly close and review procedures and completion of the
internal investigation, as discussed below. Further, the Company’s
independent auditor has not completed its review.
As previously disclosed, the Audit Committee of the Company’s
Board of Directors (the “Audit Committee”) is conducting an
internal investigation related to a notification from an employee
regarding irregularities of the classification of inventory at a
production facility. The investigation is ongoing, and the Audit
Committee continues to work diligently with independent counsel and
advisors to complete the investigation as soon as possible. As a
result, the Company has not yet filed its Quarterly Report on Form
10-Q for the quarter ended December 26, 2020 and does not believe
it will file its Quarterly Report on Form 10-Q for the quarter
ended April 3, 2021 on a timely basis, and the second and third
quarters of fiscal 2021 remain open from an accounting perspective.
The Company’s financial results and guidance may be subject to
change based on the outcome of the internal investigation,
subsequent accounting review or potentially other reasons.
The Company expects that it will finalize its financial
statements and review procedures for the second and third quarters
of fiscal 2021 and file the related Quarterly Reports as soon as
practicable after the conclusion of the internal investigation.
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 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 word as aims, anticipates,
believes, estimates, expects, hopes, intends, plans, predicts,
projects, targets, could, or will, 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, earnings and legal and internal review expenses during
third quarter and fourth quarter of fiscal 2021; its ability to
file, and the timing of any such filing, of the Quarterly Reports
for the second and third quarters of fiscal 2021; actions with
respect to the internal investigation and related matters; expenses
related to, and estimated recovery from, the COVID-19 health
pandemic; demand from new and existing customers; and key
components supply and other supply chain and transportation and
logistics issues. 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: risks relating to the ongoing internal
investigation by the Audit Committee, including (i) the risk that
the internal investigation may take longer to complete than
expected, (ii) the risk that the internal investigation identifies
errors, which may be material, in the Company’s financial results,
or impacts the timing of Company filings, and (iii) the risk of
legal proceedings or government investigations relating to the
subject of the internal investigation or related matters; the
future of the global economic environment and its impact on our
customers and suppliers, particularly during the COVID-19 health
crisis; 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; 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 including those related to
COVID-19 response; and other factors, risks, and uncertainties
detailed from time to time in the Company’s SEC filings.
CONTACTS: |
Brett Larsen |
Michael Newman |
|
Chief Financial Officer |
Investor Relations |
|
Key Tronic Corporation |
StreetConnect |
|
(509) 927-5500 |
(206) 729-3625 |
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