Key Tronic Corporation reported a challenging but improving Q4 FY2024, as revenue declined year over year but margins stabilized and cost actions began to accrue. GAAP gross margin expanded to about 9% with an operating margin near 2.2%, while GAAP net income essentially broke even at the quarter level. Management highlighted the cyber disruption experienced late in the period, which added approximately $2.3 million in costs, and a favorable peso movement that offset about $0.6 million. On a full-year basis, KTCC posted a net loss of roughly $0.8 million, while adjusted net income for FY2024 was about $3.4 million ($0.31 per share), reflecting the company’s ongoing efforts to rightsize costs and improve operational efficiency.
Inventory reductions remained a bright spot, with approximately $29 million (about 21%) of inventory pulled down year-over-year, aligning working capital with revenue. Management stressed a wait-and-see stance on further restructuring given the cyber recovery, but indicated some additional efficiency actions could occur in fiscal 2025. The company reaffirmed its onshoring thesis, emphasizing the U.S. and Vietnam facilities as growth anchors and signaling Vietnam as the lowest-cost footprint as volumes mature.
Looking forward, KTCC guided for Q1 FY2025 revenue of $140–$150 million and net income of $0.10–$0.20 per diluted share, supported by new program ramps, ongoing overhead reductions, and a weaker peso. Management also noted a robust pipeline of potential new business across security, industrial, environmental, medical, and consumer segments, with a focus on expanding U.S. and Vietnam production capacity and balancing Mexico, the U.S., and Vietnam operations.