EX-99.1 3 dex991.htm PRESS RELEASE, DATED OCTOBER 28, 2003 Press Release, dated October 28, 2003

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

 

CONTACTS:    Ron Klawitter    Michael Newman
    

Chief Financial Officer

Key Tronic Corporation

(509) 927-5295

   

Investor Relations

StreetConnect

(206) 729-3625

 

KEY TRONIC CORPORATION ANNOUNCES FIRST QUARTER RESULTS

Preparing for Growth in Second Half of Fiscal 2004

 

Spokane, WA—October 28, 2003—Key Tronic Corporation (Nasdaq: KTCC), a provider of electronic manufacturing services (EMS), today announced its results for the quarter ended September 27, 2003.

 

For the first quarter of fiscal 2004, Key Tronic reported total revenue of $34.7 million, compared to $35.7 million in the previous quarter and $34.0 million for the first quarter of fiscal 2003. Net income for the first quarter of fiscal 2004 was $20,000 or $0.00 per share, compared to $551,000 or $0.06 per share in the previous period and $12.5 million or $1.29 per share for the first quarter of fiscal 2003. Net income for the first quarter of fiscal 2003 included a benefit of $12.2 million or $1.26 per share from a litigation settlement, which related to a charge of $24.7 million or ($2.55) per share for a litigation judgment and associated tax expense in fiscal 2002.

 

“As we move into fiscal 2004, we are gradually booking new business, continuing to focus on controlling our costs and expanding our manufacturing capacity in preparation for future growth,” said Jack Oehlke, President and Chief Executive Officer. “Despite the worldwide economic challenges for our industry, we established new customer relationships in the first quarter involving specialty printer components and computer accessories.”

 

“Our ability to offer an exceptional range of capabilities, competitive pricing, global logistics and responsive customer service continues to help us win new business. In the second quarter, we expect revenue in the range of $31 million to $34 million, and near breakeven results. We anticipate growing revenue and earnings in the second half of fiscal 2004, when a number of our new programs move from the design and development stage into full production.”

 

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 800-218-0713 or +1 303-262-2050 (Reservation No. 554971). A 48-hour replay will be available by calling 800-405-2236 or +1 303-590-3000 (Reservation No. 554971). 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, Ireland 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 2004. 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 accuracy of customers’ forecasts; success of customers’ programs; timing of new programs; success of new-product introductions; technology advances; changes in pricing policies by the Company, its competitors or customers; 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 OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

     First Quarters Ended
  
     September 27
2003
     September 28
2002
  

Net sales

    $ 34,652     $ 34,034  

Cost of sales

      31,236       30,528  
    
 

Gross profit on sales

      3,416       3,506  

Operating expenses:

                 

Research, development and engineering

      700       710  

Selling

      508       467  

General and administrative

      1,764       1,794  
    
 

Total operating expenses

      2,972       2,971  

Operating income

      444       535  

Interest expense

      258       238  

Litigation settlement

      —         (12,186 )

Other income

      (7 )     (235 )
    
 

Income before income taxes

      193       12,718  

Income tax provision

      173       239  
    
 

Net income

    $ 20     $ 12,479  
    
 

Earnings per share:

                 

Earnings per common share—basic and diluted

    $ 0.00     $ 1.29  

Weighted average shares O/S—basic

      9,673       9,673  

Weighted average shares O/S—diluted

      9,775       9,673  

KEY TRONIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

    

September 27

2003

    

June 29

2003

  

ASSETS

                 

Current Assets:

                 

Cash and cash equivalents

    $ 621     $ 956  

Trade receivables—net

      20,448       17,078  

Inventories

      22,275       24,151  

Other

      2,444       2,050  
    
 

Total current assets

      45,788       44,235  

Property, plant and equipment at cost

      86,615       86,469  

Less accumulated depreciation

      75,007       74,487  
    
 

Total property, plant and equipment

      11,608       11,982  

Other Assets:

                 

Restricted cash

      759       1,142  

Other—net

      957       1,001  

Goodwill—net

      765       765  
    
 

Total other assets

      2,481       2,908  
    
 

Total Assets

    $ 59,877     $ 59,125  
    
 

LIABILITIES AND SHAREHOLDERS’ EQUITY

                 

Current Liabilities:

                 

Current portion of long term obligations

    $ 600     $ 730  

Accounts payable

      15,898       13,145  

Accrued compensation and vacation

      4,277       4,213  

Litigation settlement

      823       1,124  

Other

      2,225       3,240  
    
 

Total current liabilities

      23,823       22,452  

Long-Term Liabilities:

                 

Revolving loan

      9,497       9,864  

Litigation settlement

      2,370       2,593  

Other

      1,047       1,096  
    
 

Total long-term liabilities

      12,914       13,553  

Shareholders’ Equity:

                 

Common stock, no par value, authorized 25,000 shares; issued and outstanding 9,673 and 9,673 shares

      38,393       38,393  

Retained deficit

      (15,253 )     (15,273 )
    
 

Total shareholders’ equity

      23,140       23,120  
    
 

Total Liabilities and Shareholders’ Equity

    $ 59,877     $ 59,125