EX-99.1 2 d293921dex991.htm MANAGEMENT PRESENTATION

NASDAQ: KTCC Trust. Commitment. Results. Exhibit 99.1

Craig D. Gates President and CEO Trust. Commitment. Results.

Leading provider of Electronic Manufacturing Services (EMS) with unique combination of global capabilities and customer responsiveness Trust. Commitment. Results.

Safe Harbor Statement This presentation may contain forward-looking statements within the meaning of the federal securities laws and are subject to the safe harbor under those laws. These forward-looking statements can be identified by the use of words such as "expect", believe", "anticipate", "will", "may", "should", "plan" and similar expressions. Forward-looking statements include statements made as to future revenue and earnings, trends in the EMS industry, existing and potential new customer relationships and competition. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the statements. These risks and uncertainties include, but are not limited to the challenge of effectively managing operations in an uncertain economic environment to prepare for growth in coming periods; the accuracy of customers' forecasts; success of customers' programs; timing of new programs; changes in pricing policies by the Company, its competitors or customers; the dependence on a small number of large customers and the other risks described under "Management's Discussion and Analysis of Financial Condition and Results of Operations - Risks and Uncertainties That Could Affect Future Results" in the Company's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and current reports on Form 8-K, filed with the SEC. Any forward-looking statements in this presentation are based on the Company's current expectations and the Company assumes no obligation to update these forward-looking statements. Trust. Commitment. Results.

Outsourcing market expected to continue to grow Strong competitive position: - Unique combination of global capabilities and customer responsiveness - Increasing demand for EMS services in North America and Asia - Unique degree of vertical integration Expanding customer portfolio across diverse industries Strong revenue and earnings growth Financial performance exceeds industry average Strong balance sheet Key Investment Highlights Trust. Commitment. Results.

Electronic Manufacturing Services Market $0 $50 $100 $150 $200 $250 $300 2011 2012 2013 2014 2015 2016 In Billions Source: IDC, 2012 Trust. Commitment. Results.

EMS Provider Tiers Tier I: Over $2 billion in annual revenue Tier II: $400 million to $2 billion in annual revenue Tier III: $100 million to $400 million in annual revenue Trust. Commitment. Results.

Integrated Global Operations: US Spokane, Washington - Corporate headquarters - Command and Control - Centralized program management, production control, quality control, material management - Tooling and prototyping - Low volume PCA and box build El Paso, Texas - Product distribution Trust. Commitment. Results.

Integrated Global Operations: Mexico Juarez, Mexico - Volume PCA, box build and plastic molding - Repair operations - 500,000 square feet - Contiguous campus of five facilities - Long term presence since 1984 Trust. Commitment. Results.

Integrated Global Operations: China Shanghai, China - International material sourcing organization - High-volume PCA and box build - 130,000 square feet - Presence since 1999 Trust. Commitment. Results.

Worldwide Production Mix Trust. Commitment. Results. Shanghai China 20% Spokane USA 2% Juarez Mexico 78%

USA-based Management Operations Materials Production Control Quality Control Engineering USA-Based Production Prototyping Low Volume Mexico-based Production Low to high volume China-based Production High volume USA-Based Purchasing Parts China-Based Purchasing Parts Leveraging Global Capacities Trust. Commitment. Results.

Virtual Tier I Capabilities International sourcing yields close to Tier I material pricing Chinese and Mexican production yields Tier I conversion costs One Stop Shopping: - Strong production and process design capabilities - Multiple production technologies and vertical Integration - Scalability as volume grows: Spokane Juarez China Trust. Commitment. Results.

Tier III Responsiveness USA-based centralized operations management Customer interface in English Experienced program management for low/mid/high volume programs Experienced management of offshore facilities Trust. Commitment. Results.

Tier I COST COST Tier II Tier III RESPONSIVENESS RESPONSIVENESS Rapid Rapid Slow Slow Low Low High High Cost/Service Comparison For $5 to $80 Million Program Trust. Commitment. Results.

Target Accounts Program with $5 million to $80 million in annual revenue Involves at least two production technologies: - Plastic injection molding - Electrical assembly - Full box build Complex product assembly at account maturity Customer places high value on responsiveness Customer seeking long-term relationship Trust. Commitment. Results.

Profitable and Diverse Customer Programs Trust. Commitment. Results.

…From Wide-Ranging Industries Consumer plastic products Consumer electronics Medical devices Specialty printers Gaming Telecommunications Automotive Educational equipment Electric transportation Computer accessories Industrial tools Industrial controls Networking equipment Scientific instruments Data storage Financial Transaction Military equipment Irrigation equipment Trust. Commitment. Results.

Number of Customers Generating Revenue Trust. Commitment. Results.

Number of Programs Generating Revenue Trust. Commitment. Results.

Historic Transition to EMS * Projected Q3 Results Trust. Commitment. Results.

Growth Strategy Continue to emphasize unique combination of Tier I capabilities and Tier III responsiveness Continue to invest in volume driven capacity Continue to leverage materials and parts procurement Continue to diversify customer portfolio across many industries Expand into more high-value-added, multi-production technology programs Trust. Commitment. Results.

Financials Ronald F. Klawitter Chief Financial Officer and Treasurer Trust. Commitment. Results.

Core Operating Objectives Grow faster than EMS industry Maintain strong operating margins and profitability Maintain strong balance sheet ROIC that exceeds cost of capital Trust. Commitment. Results.

Quarterly Revenue Trust. Commitment. Results.

Annual Revenue * Based on annualized projection through Q3 Trust. Commitment. Results.

Financial Model 8.2% 4.8% 3.4% Q2-FY12 8.9% 6.1% 2.8% Q2-FY11 7.2% 4.9% 2.3% Q1-FY12 Gross Margin Operating Expenses Operating Margin 9% - 10% 3% - 4% 5% - 7% Target Expecting gradual improvement with long term growth Trust. Commitment. Results.

Annual Earnings * Based on annualized projection through Q3 Trust. Commitment. Results.

Operating Margin Percentage Trust. Commitment. Results.

Key Balance Sheet Ratios Trust. Commitment. Results.

Return on Invested Capital Trust. Commitment. Results.

Outsourcing market expected to continue to grow Strong competitive position: - Unique combination of global capabilities and customer responsiveness - Increasing demand for EMS services in North America and Asia - Unique degree of vertical integration Expanding customer portfolio across diverse industries Strong revenue and earnings growth Financial performance exceeds industry average Strong balance sheet Key Investment Highlights Trust. Commitment. Results.