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Key Tronic Corporation (NASDAQ:KTCC), a provider of electronic manufacturing services (EMS), today announced its preliminary results for the three months ended September 30, 2023.
For the first quarter of fiscal 2024, Keytronic expects to report revenue of approximately $147.7 million, in line with revenue expectations, and earnings of approximately $0.02 per share, which are below expectations.
The lower than expected earnings are primarily a result of unanticipated severance costs of $0.6 million, or approximately $0.04 to $0.05 per diluted share, as the Company reduced its workforce by over 100 employees in Mexico and in the US. The workforce reduction reflects softening demand for a number of different programs and is expected to save more than $5 million annually. While we expect increased demand for many of these Mexico-based customers towards the second half of fiscal year 2024, we now anticipate production for the previously announced program with a leading power equipment company to resume materially in fiscal 2025 rather than 2024, with a redesigned product.
Keytronic also continues to be adversely impacted by the strength of the Mexican Peso and high interest expense, though we are seeing some gradual improvement with gross margins. At the same time, we continue to win significant new programs and reduce inventories to be more in line with current revenue levels.
For the second quarter of fiscal 2024, the Company expects to report revenue in the range of $135 million to $145 million and earnings in the range of $0.05 to $0.10 per diluted share.
The revenue and earnings estimates for the first and second quarters of fiscal 2024, and the finalization of financial results for the first quarter of 2024, are subject to completion of the Company's quarterly close and review procedures which are still ongoing. The Company plans to report its complete results and host its earnings conference call for the first quarter of fiscal 2024 on October 31, 2023. Details for the conference call have been announced in a separate press release.
Posted In: KTCC
