Reading time ( words)
Key Tronic Corporation, a provider of electronic manufacturing services (EMS), today announced its results for the three months and full year ended June 27, 2015. The Company’s results were in-line with its previous guidance.
For the fourth quarter of fiscal year 2015, Key Tronic reported total revenue of $120.4 million, up 67% from $72.1 million in the same period of fiscal year 2014. Results for the fourth quarter of fiscal year 2015 included approximately $37 million in revenue from CDR Manufacturing, Inc. (dba Ayrshire Electronics), which was acquired on September 3, 2014.
For the full year of fiscal year 2015, total revenue was $434.0 million, up 42% from $305.4 million for fiscal year 2014. The Company continued to diversify its customer base, with the five largest customers in fiscal year 2015 representing 42% of its total revenue, compared to 62% in the prior year.
Net income for the fourth quarter of fiscal year 2015 was $2.3 million or $0.21 per diluted share, up from $1.4 million or $0.12 per diluted share for the same period of fiscal year 2014. Results for the fourth quarter of fiscal year 2015 included tax credits for research and development activities of approximately $0.5 million or $0.04 per diluted share. For the full year of fiscal year 2015, net income was $4.3 million or $0.38 per diluted share, compared to $7.6 million or $0.67 per diluted share for the same period of fiscal year 2014.
For the fourth quarter of fiscal year 2015, gross margin was 9% and operating margin was 3%, comparable to the same period of fiscal year 2014. For the full year of fiscal year 2015, gross margin was 8% and operating margin was 2%, compared to 9% and 3%, respectively, for fiscal year 2014. Over the longer term we expect our gross margin to gradually improve and move in the 9% to 10% range and expect increasing operating margin.
“During fiscal 2015, despite slowdowns by some longstanding customers, we made significant progress ramping up new programs, expanding our customer base and extending our worldwide capabilities,” said Craig Gates, President and Chief Executive Officer. “The major event of the year was our acquisition and successful integration of Ayrshire Electronics, which significantly increased our combined annual revenue and more than doubled our number of customers, giving us a much stronger and more diverse foundation for growth.”
“We’re especially encouraged to see Ayrshire customers continue to award us with additional business because of our combined capabilities and global manufacturing footprint. At the same time, we have continued to penetrate into an even wider range of industries. In the fourth quarter, we won new programs involving home building products, material handling systems and lighting equipment.”
“Entering fiscal 2016, as our new programs move into production and ramp up, we expect to see increasing revenue and earnings. Moreover, we continue to win new business, driven by the growing demand for our North American-based production, unique global structure, customer responsiveness, vertical integration and engineering capabilities. As we get the integration of the Ayrshire acquisition successfully behind us, we believe Key Tronic is increasingly well positioned to grow profitably, capture market share and capitalize on emerging opportunities.”
For the first quarter of fiscal year 2016, the Company expects to report revenue in the range of $122 million to $130 million, and earnings in the range of $0.17 to $0.24 per diluted share. The expected earnings range assumes an effective tax rate of 35%.
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 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.