<SEC-DOCUMENT>0001193125-12-175339.txt : 20120626
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<ACCEPTANCE-DATETIME>20120423130512
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ACCESSION NUMBER:		0001193125-12-175339
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20120423

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			KEY TRONIC CORP
		CENTRAL INDEX KEY:			0000719733
		STANDARD INDUSTRIAL CLASSIFICATION:	COMPUTER PERIPHERAL EQUIPMENT, NEC [3577]
		IRS NUMBER:				910849125
		STATE OF INCORPORATION:			WA
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		4424 N. SULLIVAN ROAD
		CITY:			SPOKANE
		STATE:			WA
		ZIP:			99216
		BUSINESS PHONE:		5099288000

	MAIL ADDRESS:	
		STREET 1:		P O BOX 14687
		CITY:			SPOKANE
		STATE:			WA
		ZIP:			99214
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<TYPE>CORRESP
<SEQUENCE>1
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">April&nbsp;23, 2012 </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Attn: Stephen G. Krikorian, Accounting Branch Chief </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">United States Securities and Exchange
Commission </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Division of Corporation Finance </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">100 F Street, N.E. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Washington D.C. 20549 </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">RE: FILE No. 000-11559 </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Key Tronic Corporation
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Form 10-K for Fiscal Year ended July&nbsp;2, 2011 </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Dear Mr.&nbsp;Krikorian: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">This provides Key Tronic Corporation&#146;s responses to the additional
comments received by facsimile on April&nbsp;9, 2012 from the staff of the Securities and Exchange Commission (&#147;Staff&#148;) regarding the above referenced filing. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">We have included in the attachment to this cover letter the Staff&#146;s comment prior to each of the Company&#146;s responses. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">We have attempted to provide clear and complete responses and resolutions/approaches to each of your comments. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">We welcome any additional questions, comments, or clarification requests. Please feel free to call me at 509-927-5295. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Sincerely, </FONT></P>
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<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/S/ RONALD F. KLAWITTER</FONT></TD></TR>
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<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Ronald F. Klawitter</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Executive Vice President of Administration,</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Chief Financial Officer and Treasurer</FONT></P></TD></TR>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Form 10-K for the Fiscal Year Ended July&nbsp;2, 2011 </U></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Management&#146;s Discussion and Analysis of Financial Conditions and Results of Operations </U></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Capital Resources and Liquidity, page 23 </U></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>We have read your response to prior comment 4 and note that substantially all of your cash and cash equivalents are held in foreign subsidiaries. While we note your
assertion that these funds are not considered a main source of liquidity for funding U.S. operations, we continue to believe that you should consider providing an enhanced liquidity discussion by disclosing the amount of cash held by foreign
subsidiaries that would be subject to the potential tax impact associated with the repatriation of undistributed earnings on foreign subsidiaries. As previously noted, this disclosure would illustrate that these cash and cash equivalents are not
presently available to fund domestic operations and obligations without paying a significant amount of taxes upon their repatriation.</I> </FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>RESPONSE:</B> In future filings, the Company will disclose the amount of cash held by foreign subsidiaries that would be subject to the potential tax impact associated with the repatriation of
undistributed earnings on foreign subsidiaries. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Notes to Consolidated Financial Statements </U></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Note 1. Significant Accounting Policies </U></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Research, Development, and Engineering, page 35 </U></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>2.</I></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>In your response to prior comment 2, you state that one of the primary activities included in RD&amp;E is customer-specific projects that are reimbursed by the
customer. Please tell us what consideration has been given to the disclosures required by ASC 730-20-50. </I></FONT></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>RESPONSE:</B> We have considered the disclosure requirements required by ASC 730-20-50. As of July&nbsp;2, 2011, we did not have any
material research and development contracts with any of our customers. In future filings, if we have a significant agreement that constitutes a research and development arrangement, we will disclose the terms of any those contracts as required by
ASC 730-20-50 as of the date of each balance sheet presented. Additionally, the majority of the specific project requests from our customers that we engage in, as discussed in your question above and in previous correspondence, are only reimbursed
upon successful completion and qualification of such activities by our customer. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">1 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Part III </U></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><U>Executive Compensation (Incorporated by Reference from Definitive Proxy Statement Filed September&nbsp;19, 2011) </U></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><U>Narrative Disclosure of Summary Compensation Table, page 10 </U></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>3.</I></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>We note your response to prior comment 5; however, it is unclear from your response how you determined that a nearly 20% increase in base salary was warranted. Your
discussion of &#147;adjusted&#148; survey information and &#147;aged&#148; data in this regard is not transparent and it is unclear how the compensation consultant&#146;s advisement that &#147;base salary data had moved up in each of [2010 and 2011]
by 3 to 4%&#148; supports the level of increased awarded. Please confirm that in the future, to the extent there are material changes in compensation awards or practices that are reflected in the summary compensation table, you will include a
narrative description that clearly outlines the factors necessary to an understanding of the information disclosed in the table. Refer to Item&nbsp;402 (o)&nbsp;of Regulation S-K. </I></FONT></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>RESPONSE:</B> In future filings, to the extent there are material changes in compensation awards or practices that are reflected in the
summary compensation table, we will include a narrative description that clearly outlines the factors necessary to gain an understanding of the information disclosed in the table. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">2 </FONT></P>

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