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Key Tronic Corporation has released its financial results for the fourth quarter and year ended July 1, 2023. The company reported total revenue of 2.6 million for the fourth quarter, a 29% increase compared to the same period in fiscal year 2022. For the full year, total revenue reached a record 8.1 million, up 11% from the previous year.

The revenue growth in fiscal year 2023 was attributed to new program ramps and increased demand from longstanding customer programs. Despite the positive results, the gross margin for the fourth quarter was 8.5%, lower than the 9.3% in the same period last year. This was primarily due to the strengthening of the Mexican peso against the US dollar, impacting production costs.

However, Key Tronic Corporation has implemented measures to improve production efficiencies and reduce labor costs. There has also been a gradual stabilization in the supply chain and labor markets. These efforts contributed to a net income of .1 million, or {TRESC}.10 per share, for the fourth quarter, up from million, or {TRESC}.09 per share, in the same period of fiscal year 2022.

The company ended the fourth quarter with total working capital of 8.3 million and a current ratio of 2.3:1. Receivables increased by .8 million, reflecting the growth in revenue. Days Sales Outstanding (DSOs) decreased from 92.5 days to 82.5 days, indicating improvement in customer disruptions and supply chain issues.

Key Tronic Corporation made efforts to reduce inventory by approximately .8 million, resulting in inventory turns of 3.7 times in the fourth quarter, compared to 2.9 times last year. The company plans to continue reducing inventory levels in line with revenue levels.

Looking ahead, Key Tronic Corporation expects revenue in the range of 5 million to 5 million for the first quarter of fiscal year 2024, with earnings projected between {TRESC}.05 and {TRESC}.10 per diluted share. Despite some challenges, the company believes it is well-positioned to win new EMS programs and expand its business profitably in the long term.

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