SPOKANE VALLEY, Wash., Oct. 24, 2023 (GLOBE NEWSWIRE) -- Key Tronic Corporation (NASDAQ:KTCC), a provider of electronic manufacturing services (EMS), today announced its preliminary results for the three months ended September 30, 2023.
For the first quarter of fiscal 2024, Keytronic expects to report revenue of approximately $147.7 million, in line with revenue expectations, and earnings of approximately $0.02 per share, which are below expectations.
The lower than expected earnings are primarily a result of unanticipated severance costs of $0.6 million, or approximately $0.04 to $0.05 per diluted share, as the Company reduced its workforce by over 100 employees in Mexico and in the US. The workforce reduction reflects softening demand for a number of different programs and is expected to save more than $5 million annually. While we expect increased demand for many of these Mexico-based customers towards the second half of fiscal year 2024, we now anticipate production for the previously announced program with a leading power equipment company to resume materially in fiscal 2025 rather than 2024, with a redesigned product.
Keytronic also continues to be adversely impacted by the strength of the Mexican Peso and high interest expense, though we are seeing some gradual improvement with gross margins. At the same time, we continue to win significant new programs and reduce inventories to be more ...