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Key Tronic Corp., a provider of electronic manufacturing services (EMS), has announced total revenue of $116.4 million for the second quarter of fiscal year 2016, up 2% from $114.3 million in the same period of fiscal year 2015. For the first six months of fiscal year 2016, total revenue was $242.6 million, up 21% from $200.7 million in the same period of fiscal year 2015.
As expected, the company saw sequential improvement in operating efficiencies. For the second quarter of fiscal year 2016, gross margin was 7.8% and operating margin was 2.1%, up from 7.1% and 1.4%, respectively, in the prior quarter.
Net income for the second quarter of fiscal year 2016 was $1.8 million or $0.16 per share, up from $1.6 million or $0.14 per share for the second quarter of fiscal year 2015. The results for 2Q FY 2016 include $675,000 or $0.06 per share of tax credits related to recently approved research and development federal tax incentives. For the first six months of fiscal year 2016, net income was $2.6 million or $0.23 per share, up from $103,000 or $0.01 per share for the same period of fiscal year 2015.
"We're pleased to see sequential profit growth, as our new programs continue to ramp and more than offset the reduced demand from a certain customer that has significantly impacted our results in recent quarters," said Craig Gates, president and chief executive officer. "We continue to see a robust pipeline of potential new business and recently won four new programs, involving industrial equipment, consumer products and lighting devices.
"In the second half of fiscal year 2016, we expect that the ramp of new programs will continue to outpace the previously discussed decline of a longstanding customer. Even as we onboard several new customers and programs, we anticipate that we will continue to see gradually improving operating efficiencies in coming periods."
For the third quarter of fiscal year 2016, the Key Tronic expects to report revenue in the range of $117 million to $122 million, and earnings in the range of $0.12 to $0.17 per diluted share. These expected results assume an effective tax rate of 30%.