EX-99.1 2 dex991.htm PRESS RELEASE, DATED AUGUST 24, 2004

Press Release, dated August 24, 2004

Exhibit 99.1

FOR IMMEDIATE RELEASE

CONTACTS:		Ron Klawitter		Michael Newman
		Chief Financial Officer		Investor Relations
		Key Tronic Corporation		StreetConnect
		(509) 927-5295		(206) 729-3625

KEY TRONIC CORPORATION ANNOUNCES

FOURTH QUARTER AND YEAR-END 2004 RESULTS

Quarterly Revenue Up 24% Year-over-Year

and Up 19% from the Previous Quarter

Spokane, WA—August 24, 2004—Key Tronic Corporation (Nasdaq: KTCC), a provider of electronic manufacturing services (EMS), today announced its results for the quarter and fiscal year ended July 3, 2004.

For the fourth quarter of fiscal 2004, Key Tronic reported total revenue of $44.4 million, up 19% from $37.3 million in the previous quarter and up 24% from $35.7 million for the fourth quarter of fiscal 2003. For fiscal 2004, total revenue was $148.9 million, up 14% from $130.9 million in fiscal 2003. Net income for the fourth quarter of fiscal 2004 was $265,000 or $0.03 per share, compared to $112,000 or $0.01 per share in the previous period and $551,000 or $0.06 per share for the fourth quarter of fiscal 2003.

“We are pleased with our continued revenue growth in the fourth quarter, a result of the solid execution of our growth strategy throughout fiscal 2004,” said Jack Oehlke, President and Chief Executive Officer. “During the year, we achieved our strategic goals of diversifying our customer base, penetrating deeper into existing customer accounts, increasing our revenues, expanding our capacity, controlling our costs and returning to profitability. Our strong growth in the fourth quarter was primarily driven by increased production on programs for established customers involving consumer products, gaming technology and specialty printer accessories.”

“The trend towards outsourcing continues to strengthen demand for EMS services worldwide and for our exceptional range of capabilities. Moving into fiscal 2005, we believe our sustained investments in our facilities in both Mexico and China have given us the production capacity and logistical advantages to help us continue to win new business. In the first quarter of fiscal 2005, we expect sequential revenue growth in the range of 5% to 15% and earnings in the range of $0.03 to $0.06 per share. We are pleased with our progress and excited about the opportunities ahead.”

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 800-218-8862 or +1 303-262-2131. A 48-hour replay will be available by calling 800-405-2236 or +1 303-590-3000 (Reservation No. 11004238). 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 2005. 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)

		Fourth Quarters Ended							Twelve Months Ended
		July 3 2004			June 28 2003				July 3 2004				June 28 2003
Net sales		$	44,366		$	35,664			$	148,901			$	130,894
Cost of sales			40,807			31,473				135,664				115,936
Gross profit on sales			3,559			4,191				13,237				14,958
Operating expenses:
Research, development and engineering			657			704				2,583				2,913
Selling			555			682				1,900				2,250
General and administrative			1,697			1,758				6,965				7,183
Total operating expenses			2,909			3,144				11,448				12,346
Operating income			650			1,047				1,789				2,612
Interest expense			296			266				1,091				1,026
Litigation settlement			—			—				—				(12,186	)
Other (income) expense			—			(1	)			(23	)			(237	)
Income before income taxes			354			782				721				14,009
Income tax provision			89			231				611				600
Net income		$	265		$	551			$	110			$	13,409
Earnings per share:
Earnings per common share - basic and diluted		$	0.03		$	0.06			$	0.01			$	1.39
Weighted average shares O/S - basic			9,675			9,673				9,673				9,673
Weighted average shares O/S - diluted			10,007			9,714				9,793				9,673

KEY TRONIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

		July 3 2004				June 28 2003
ASSETS
Current Assets:
Cash and cash equivalents		$	600			$	956
Trade receivables - net			24,439				17,078
Inventories			27,848				24,151
Other			1,833				2,050
Total current assets			54,720				44,235
Property, plant and equipment, net			11,131				11,982
Other Assets:
Restricted cash			705				1,142
Other - net			617				1,001
Goodwill - net			765				765
Total other assets			2,087				2,908
Total Assets		$	67,938			$	59,125
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Current portion of long term obligations		$	606			$	730
Accounts payable			24,354				13,145
Accrued compensation and vacation			4,015				4,213
Litigation settlement			925				1,124
Other			1,352				3,240
Total current liabilities			31,252				22,452
Long-Term Liabilities:
Revolving loan			10,851				9,864
Litigation settlement			1,536				2,593
Other			1,065				1,096
Total long-term liabilities			13,452				13,553
Shareholders’ Equity:
Common stock, no par value, authorized 25,000 shares; issued and outstanding 9,676 and 9,673 shares			38,397				38,393
Retained deficit			(15,163	)			(15,273	)
Total shareholders’ equity			23,234				23,120
Total Liabilities and Shareholders’ Equity		$	67,938			$	59,125