What guidance did Key Tronic's management provide for the next earnings period?

Did Key Tronic beat or miss consensus estimates last quarter?

What does Key Tronic do and what are its main business segments?

What is the revenue and EPS growth rate for Key Tronic year over year?

What is the market's earnings forecast for Key Tronic next quarter?

What is Key Tronic's gross profit margin?

What were the key takeaways from Key Tronic's earnings call?

What were the key takeaways from Key Tronic’s earnings call?

- **Revenue decline**: -25% YoY to $98.8M due to customer demand drop and program delays.
- **Gross margin improvement**: 8.4% (QoQ +220bps) driven by cost cuts; targeting 10%+ with new programs.
- **Consigned program potential**: $20M+ annual revenue with 60-70% margin vs. 10% for turnkey.
- **Geographic expansion**: 50%+ manufacturing in U.S./Vietnam by FY26 end; Vietnam medical device capacity doubled.
- **Bank support**: Strong lender relationship despite short-term losses; revolver availability increased.

**【CFO Financial Commentary】**
- Q1 FY26 revenue: $98.8M (down 25% YoY) due to reduced demand from a key customer and delayed program launches.
- Gross margin: 8.4% (up 220bps QoQ, down 170bps YoY) driven by operational efficiencies and workforce reductions.
- Net loss: $2.3M ($0.21/share) vs. $1.1M profit YoY; adjusted net loss: $1.1M ($0.10/share).
- Cash flow: $7.6M from operations; debt reduced by $12M YoY.
- Inventory stable YoY; AR days improved to 81 from 92.

**【CEO Strategic Initiatives】**
- Expanded U.S. manufacturing: New R&D facility in Arkansas; Vietnam capacity doubled for medical devices.
- Mexico rightsizing: Streamlined operations to reduce costs; 60% of manufacturing expected in U.S./Vietnam by FY26 end.
- New program wins: $5M medical device, $6M industrial; consigned materials program in Mississippi ($1M Q1, $20M+ annual target).
- Tariff mitigation: USMCA compliance for Mexico; Vietnam offers low-cost alternative to China.

**【Q&A Highlights】**
- **Consigned Program Success**: 60-70% margin improvement vs. turnkey; customer manages inventory, reducing Key Tronic's working capital needs.
- **Vietnam Medical Expansion**: Received certification; $20M+ annual potential.
- **Mexico Utilization**: Excess capacity expected to fill in H2 FY26; 20%+ EBITDA if fully utilized.
- **Bank Relationship**: Strong lender support; revolver availability increased YoY despite short-term losses.
- **Tariff Impact**: 20-30% tariffs on Vietnam imports; customers bear U.S. import duties.

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