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Key Tronic Corporation, a provider of electronic manufacturing services (EMS), announced its results for the quarter ended April 3, 2021. Reporting the results for the third quarter of fiscal 2021 was delayed until the Audit Committee of the Company’s Board of Directors completed its previously announced internal investigation.
For the third quarter of fiscal year 2021, Key Tronic reported revenue of approximately $134.6 million, up 21% from $111.5 million in the same period of fiscal year 2020. Customer demand has remained strong and new and existing customers have increased their backlog. In the third quarter, customer demand exceeded $150 million; the highest in the Company’s history. For the first nine months of fiscal year 2021, total revenue was $386.1 million, up 16% from $333.5 million in the same period of fiscal year 2020.
At the same time, results for the third quarter of fiscal year 2021 were constrained by the following: a tightening worldwide supply chain and transportation and logistics issues which delayed the arrival of key components; causing both factory downtime and overtime expenses; legal expenses related to the previously disclosed internal investigation of approximately $0.7 million; a four-day closure of our Mexico facilities during a late winter storm that caused power disruptions in the region; and continued but lessening expenses related to COVID-19.
For the third quarter of fiscal year 2021, net income was $0.9 million or $0.08 per share, comparable to the same period of fiscal year 2020. The lower than anticipated earnings for the third quarter of fiscal 2021 are primarily a result of a tax true up of federal research and development credits of $0.4 million. For the first nine months of fiscal year 2021, net income was $4.2 million or $0.38 per share, up from $3.3 million or $0.30 per share for the same period of fiscal year 2020.
During the third quarter, the Company was awarded a customer program to build consumer products that could provide up to $30 million or more in annual revenue when it reaches full production. This new program is expected to commence production in the latter half of fiscal year 2022, and is another example of a customer onshoring an existing program to manage logistic risk. The production process is highly automated and involves a high level of partnership with the customer to build out the production equipment in the coming months. In support of the new program, Key Tronic expanded its facility footprint at its Juarez, Mexico campus by leasing an additional contiguous building of 145,000 square feet.
“We’re pleased with the successful launch of new programs, and our rebounding and increasing customer demand in fiscal 2021,” said Craig Gates, President and Chief Executive Officer. “We are currently ramping a number of new programs and, while production has been hindered by limited supply of key components, we are extremely encouraged by both new customer and new program wins.”
“Moving into fiscal 2022, the COVID-19 crisis, component shortages and logistic delays continue to present macroeconomic along with multiple business challenges, but we continue to see the favorable trend of contract manufacturing returning to North America. We are excited to expand our Mexico operations with new program awards, and also to see our domestic sites benefiting from customers’ onshoring initiatives. We expect continued strong revenue growth in the coming quarters and continue to invest in new capacity to prepare for long-term growth.”
For the fourth quarter of fiscal 2021, Key Tronic expects to report revenue in the range of $120 million to $125 million, as delays in the supply of key components for the Company’s business continue to significantly limit production. As a result of additional legal and internal review costs associated with the internal investigation, we expect that earnings for the fourth quarter of fiscal 2021 will be below the previous guidance range provided on May 4, 2021, but updated guidance for earnings is not available at this time. We expect to release final results for the fourth quarter in the coming weeks.