{"success":true,"data":{"pressRelease":{"id":"129782","rtpr_id":"nGNX3Zkd29","ticker":"KTCC","exchange":"NASDAQ","all_tickers":["KTCC"],"title":"Key Tronic Corporation Announces Results for the Fourth Quarter and Year End of Fiscal 2026","author":"Globe Newswire","published_at":"2026-08-27T20:03:00.244Z","article_body":"SPOKANE VALLEY, Wash., Aug. 27, 2026 (GLOBE NEWSWIRE) -- Key Tronic\nCorporation (Nasdaq: KTCC), a provider of electronic manufacturing services\n(EMS), today announced its results for the quarter ended June 27, 2026.\n\nFor the fourth quarter of fiscal year 2026, Key Tronic reported total revenue\nof $102.0 million, compared to $89.6 million in the prior quarter and $110.5\nmillion in the same period of fiscal year 2025. The 14% sequential increase in\nrevenue in the fourth quarter of fiscal year 2026 was driven by strong demand\nfrom both legacy and new programs. In particular, revenue from Key Tronic’s\nVietnam-based production more than doubled sequentially, driven by medical\ndevice and consumer products programs.\n\nWhile customer demand rebounded significantly in the fourth quarter of fiscal\nyear 2026, Key Tronic's production was constrained by tightening credit\navailability and liquidity pressures across the global supply chain. These\ncapital constraints have affected the entire EMS industry as suppliers,\ncustomers, and manufacturers navigate ongoing macroeconomic uncertainty.\nSupply chain financing constraints delayed approximately $10 million of the\nCompany's shipments during the quarter. The Company is actively working with\nits customers and suppliers, while also evaluating additional sources of\ncapital, to support growth and alleviate these temporary constraints in future\nperiods. We believe our operational discipline, strengthened manufacturing\nfootprint, and long-standing customer relationships have positioned us better\nthan many of our competitors. As a result, we continue to win new business and\ngain market share in several target markets in new program awards in the\nfourth quarter of fiscal 2026.\n\nFor the full fiscal year 2026, total revenue was $386.7 million, compared to\n$467.9 million in the fiscal year 2025, largely reflecting reduced demand from\ncertain legacy and end-of-life programs, as well as a variety of uncertainties\nin the global economy throughout the year. The Company has experienced an\nincrease in new program wins and new sales funnel activity leading to expected\nrevenue growth in coming quarters of fiscal 2027.\n\nGross margin was 7.8% in the fourth quarter of fiscal year 2026, up from 6.2%\nin the same period of fiscal year 2025. The Company’s gross margin\nimprovements in the fourth quarter of fiscal year 2026, despite the adverse\nsupply chain challenges, demonstrated the operating efficiencies gained from\nits cost-cutting initiatives over the past two years. Operating margin was\n(3.6)% in the fourth quarter of fiscal year 2026, down from (2.1)% in the same\nperiod of fiscal year 2025. The operating margin for the fourth quarter of\nfiscal 2026 was adversely affected by an $8.4 million write-off of long-term\nreceivables and related legal costs incurred in pursuing recovery from\nlongstanding customers experiencing financial distress and no longer\ngenerating program revenues. These adverse impacts were partially offset by a\n$5.3 million insurance recovery related to a roof replacement at the Company's\nMississippi facility.\n\nAdjusted gross margin was 8.3% for the fourth quarter of fiscal year 2026 up\nfrom 6.2% in the same period of fiscal year 2025 (see “Non-GAAP Financial\nMeasures,” below for additional information about adjusted gross margin).\nThese margin gains highlight the Company’s resilience and commitment to\nimproving its operating efficiency. With revenue expected to continue to\nincrease, Key Tronic anticipates continued margin growth in coming quarters.\n\nThroughout fiscal year 2026, the Company continued to prepare for anticipated\nlong-term growth by executing its near-shoring and tariff mitigation\nstrategies to reduce costs while maintaining the diversity and flexibility of\nits key locations and capabilities. Key Tronic believes that these cost\nreductions have enabled the Company to become more competitive on recent\nquoting opportunities. During the fourth quarter, Key Tronic completed the\nwind-down of its manufacturing operations in China, shifting more production\nto the Company’s expanding facilities in the US and Vietnam. The wind-down\nof manufacturing in China is anticipated to save approximately $4.0 million in\nfiscal 2027.\n\nThe Company’s net loss was $(34.3) million or $(3.16) per share for the\nfourth quarter of fiscal year 2026, compared to net loss of $(3.9) million or\n$(0.36) per share for the same period of fiscal year 2025. For the full fiscal\nyear 2026, the net loss was $(47.8) million or $(4.41) per share, compared to\n$(8.3) million or $(0.77) per share for the full fiscal year 2025.\n\nThe Company recorded a $28.4 million non-cash charge during the quarter to\nestablish a valuation allowance against certain deferred tax assets. The\naccounting adjustment was driven primarily by the cumulative loss of US\ntaxable income over the last few years. While management remains confident in\nthe Company's expected return to profitability and the future expected\nutilization of certain tax benefits, the valuation allowance was based on the\nrelative weighting of historical results. The adjustment has no impact on cash\nflows, debt covenant compliance, or the Company's underlying operating\nperformance. As described above, approximately $8.4 million of distressed\ncustomer related long term receivables were also written off during the\nquarter.\n\nThe adjusted net loss was $(2.9) million or $(0.26) per diluted share for the\nfourth quarter of fiscal year 2026, compared to adjusted net loss of $(3.8)\nmillion or $(0.35) per diluted share for the same period of fiscal year 2025.\nFor the full fiscal year 2026, the adjusted net loss was $(3.7) million or\n$(0.34) per diluted share, compared to adjusted net loss of $(5.0) million or\n$(0.47) per diluted share for fiscal year 2025. See “Non-GAAP Financial\nMeasures,” below for additional information about adjusted net income (loss)\nand adjusted net income (loss) per share.\n\n\"Over the past year, we have taken decisive actions to strengthen Key Tronic's\ncompetitive position and create a more efficient global manufacturing\nfootprint,” said Brett Larsen, President and CEO. “We successfully exited\nmanufacturing operations in China, right-sized our Mexico facility, and\nexpanded production capacity in both the United States and Vietnam. These\ninitiatives have improved our cost structure, enhanced supply chain\nflexibility, and enabled us to provide customers with attractive manufacturing\noptions amid ongoing macroeconomic and geopolitical uncertainties.\nApproximately half of our manufacturing took place in our US and Vietnam\nfacilities during the fourth quarter of fiscal 2026, and we have significant\ncapacity available to support future growth.”\n\n\"Our strategic restructuring and cost reduction initiatives are translating\ndirectly into new business opportunities and market share gains. During the\nfourth quarter of fiscal 2026, we secured more than $60 million in new program\nawards in the data center, construction, and industrial power management\nmarkets. These wins reflect increasing customer recognition of Key Tronic's\nability to deliver high-quality manufacturing solutions with a globally\ncompetitive cost structure. In an environment where liquidity and capital\nconstraints are affecting much of the EMS industry, customers are increasingly\nseeking financially stable, operationally disciplined partners capable of\nsupporting long-term growth. Many of these new programs feature innovative\npartnership models that provide a more balanced approach to ramp-up capital\nrequirements, allowing customers to participate in the upfront investment\nwhile enabling Key Tronic to accelerate growth and improve returns on invested\ncapital.”\n\n“While we continue to face near-term liquidity challenges within the global\nsupply chain, our backlog of customer demand has increased, and we expect\nrecently awarded programs to ramp into production over the coming quarters.\nSupported by our stronger competitive position and growing pipeline of\nbusiness opportunities, we expect continued revenue growth and a return to\nprofitability in fiscal 2027.\"\n\nThe financial data presented for the fourth quarter and full year of fiscal\n2026 should be considered preliminary and could be subject to change, as the\nCompany’s independent auditor has not completed their audit procedures.\n\nBusiness Outlook\n\nDue to uncertainty in the timing of new program ramps and continued\nmacroeconomic uncertainty, Key Tronic will not be issuing revenue or earnings\nguidance for the first quarter of fiscal year 2027.\n\nConference Call\n\nKey Tronic will host a conference call to discuss its financial results at\n2:00 PM Pacific (5:00 PM Eastern) today. A broadcast of the conference call\nwill be available at www.keytronic.com under “Investor Relations” or by\ncalling 800-330-6710 or +1-213-279-1505 (Access Code: 5639032). The Company\nwill also reference accompanying slides that can be viewed with the webcast at\nwww.keytronic.com under “Investor Relations”. A replay will be available\nat www.keytronic.com under “Investor Relations”.\n\nAbout Key Tronic\n\nKey Tronic is a leading contract manufacturer offering value-added design,\nsourcing and manufacturing services from its facilities in the United States,\nMexico, and Vietnam. The Company provides its customers with full engineering\nservices, materials management, worldwide manufacturing facilities, assembly\nservices, in-house testing, and worldwide distribution. Its customers include\nsome of the world’s leading original equipment manufacturers. For more\ninformation about Key Tronic visit: www.keytronic.com\n\nForward-Looking Statements\n\nSome of the statements in this press release are forward-looking statements\nwithin the meaning of the Private Securities Litigation Reform Act of 1995.\nForward-looking statements include, but are not limited to those including\nsuch words as aims, anticipates, believes, continues, estimates, expects,\nhopes, intends, plans, predicts, projects, targets, will, or would, similar\nverbs, or nouns corresponding to such verbs, which may be forward looking.\nForward-looking statements also include other passages that are relevant to\nexpected future events, performances, and actions or that can only be fully\nevaluated by events that will occur in the future. Forward-looking statements\nin this release include, without limitation, the Company’s statements\nregarding its expectations with respect to financial conditions and results,\nincluding revenue, earnings, and margins, the Company’s plans to address\nproduction constraints, including its ability to access additional capital,\nthe Company’s ability to shift its focus in China and build out production\ncapacity in the US and Vietnam and the timing of completion of those\nfacilities, cost savings from headcount reduction and the wind-down of\nmanufacturing operations in China, demand for certain products and the\neffectiveness of some of its programs, business from customers and programs,\nnew program launches, impacts from operational streamlining and efficiencies,\nincluding reductions in inventories, future utilization of certain tax\nbenefits, and impacts of repairs to its facilities from winter storm damage.\nThere are many factors, risks and uncertainties that could cause actual\nresults to differ materially from those predicted or projected in\nforward-looking statements, including but not limited to: the future of the\nglobal economic environment and its impact on our customers and suppliers; the\nimpact of new governmental legislation and regulation, including tax reform,\ntariffs and related activities, such as trade negotiations and other risks;\nthe success and timing of our expansion plans; the availability of components\nfrom the supply chain; the availability of a healthy workforce; the accuracy\nof suppliers’ and customers’ forecasts; development and success of\ncustomers’ programs and products; timing and effectiveness of ramping of new\nprograms; success of new-product introductions; the risk of legal proceedings\nrelating to the previously reported financial statement restatements and\nrelated material weaknesses, the May 2024 cybersecurity incident and the\nsubject of the internal investigation by the Company’s Audit Committee and\nrelated or other unrelated matters; acquisitions or divestitures of operations\nor facilities; technology advances; changes in pricing policies by the\nCompany, its competitors, customers or suppliers; and other factors, risks,\nand uncertainties detailed from time to time in the Company’s SEC filings.\n\nNon-GAAP Financial Measures\n\nTo supplement our consolidated financial statements, which are prepared in\naccordance with generally accepted accounting principles in the United States\n(GAAP), we use certain non-GAAP financial measures; adjusted net loss, and\nadjusted net loss per share, diluted. We provide these non-GAAP financial\nmeasures because we believe they provide greater transparency related to our\ncore operations and represent supplemental information used by management in\nits financial and operational decision making. We exclude (or include) certain\nitems in our non-GAAP financial measures as we believe the net result is a\nmeasure of our core business. We believe this facilitates operating\nperformance comparisons from period to period by eliminating potential\ndifferences caused by the existence and timing of certain income and expense\nitems that would not otherwise be apparent on a GAAP basis.\n\nIn addition, during this period, we have provided adjusted cost of sales,\nadjusted gross profit, and adjusted gross margin. These additions supplement\nadjusted net loss by mapping the portion of the identified adjustments\nutilized in the calculation of adjusted net loss to relevant financial\nstatement line items for re-calculation of the adjusted metrics presented. We\nhave provided these additional non-GAAP financial measures because we believe\nthey provide greater transparency related to our core operations and represent\nsupplemental information used by management in its financial and operational\ndecision making.\n\nNon-GAAP performance measures should be considered in addition to, and not as\na substitute for, results prepared in accordance with GAAP. We strongly\nencourage investors and shareholders to review our financial statements and\npublicly-filed reports in their entirety and not to rely on any single\nfinancial measure. Our non-GAAP financial measures may be different from those\nreported by other companies.\n\nSee the table below entitled “Reconciliation of GAAP to non-GAAP measures”\nfor reconciliations of adjusted net loss and adjusted cost of sales to the\nmost directly comparable GAAP measure, which is GAAP net loss, and GAAP cost\nof sales, respectively, as well as the computation of adjusted gross profit,\nadjusted gross margin, and adjusted net loss per share, diluted.\n\n \n KEY TRONIC CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) \n \n Three Months Ended Twelve Months Ended \n June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 \n Net sales $ 102,027 $ 110,486 $ 386,667 $ 467,871 \n Cost of sales 94,087 103,675 362,730 431,444 \n Gross profit 7,940 6,811 23,937 36,427 \n Research, development and engineering expenses 2,263 2,246 8,011 9,163 \n Selling, general and administrative expenses 14,580 6,867 36,546 26,702 \n Gain on insurance proceeds, net of losses (5,267 ) — (5,904 ) — \n Total operating expenses 11,576 9,113 38,653 35,865 \n Operating income (loss) (3,636 ) (2,302 ) (14,716 ) 562 \n Interest expense, net 2,531 2,775 10,074 12,523 \n Loss before income taxes (6,167 ) (5,077 ) (24,790 ) (11,961 ) \n Income tax provision (benefit) 28,176 (1,153 ) 23,003 (3,643 ) \n Net loss $ (34,343 ) $ (3,924 ) $ (47,793 ) $ (8,318 ) \n Net loss per share — Basic $ (3.16 ) $ (0.36 ) $ (4.41 ) $ (0.77 ) \n Weighted average shares outstanding — Basic 10,859 10,762 10,837 10,762 \n Net loss per share — Diluted $ (3.16 ) $ (0.36 ) $ (4.41 ) $ (0.77 ) \n Weighted average shares outstanding — Diluted 10,859 10,762 10,837 10,762 \n \n\n\n\n \n KEY TRONIC CORPORATION AND SUBSIDIARIES \n CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) \n \n June 27, 2026 June 28, 2025 \n ASSETS \n Current assets: \n Cash and cash equivalents $ 584 $ 1,384 \n Trade receivables, net of credit losses of $4,659 and $3,479 83,650 96,142 \n Contract assets, net of credit losses of $856 and $0 24,219 17,409 \n Inventories, net 95,844 97,321 \n Other, net of credit losses of $0 and $1,463 19,462 21,917 \n Total current assets 223,759 234,173 \n Property, plant and equipment, net 28,854 27,727 \n Operating lease right-of-use assets, net 26,550 11,347 \n Other assets: \n Deferred income tax asset 1,451 23,397 \n Other, net of credit losses of $8,438 and $500 19,152 19,230 \n Total other assets 20,603 42,627 \n Total assets $ 299,766 $ 315,874 \n LIABILITIES AND SHAREHOLDERS ’ EQUITY \n Current liabilities: \n Accounts payable $ 75,961 $ 63,725 \n Accrued compensation and vacation 5,450 8,157 \n Current portion of long-term debt 7,162 6,215 \n Other 17,919 13,894 \n Total current liabilities 106,492 91,991 \n Long-term liabilities: \n Long-term debt, net 99,056 98,936 \n Operating lease liabilities 20,120 6,859 \n Deferred income tax liability 41 — \n Other long-term obligations 4,874 954 \n Total long-term liabilities 124,091 106,749 \n Total liabilities 230,583 198,740 \n Shareholders’ equity: \n Common stock, no par value—shares authorized 25,000; issued and outstanding 10,859 and 10,762 shares, respectively 48,135 47,502 \n Retained earnings 20,810 68,603 \n Accumulated other comprehensive income 238 1,029 \n Total shareholders’ equity 69,183 117,134 \n Total liabilities and shareholders’ equity $ 299,766 $ 315,874 \n \n\n\n\n \n KEY TRONIC CORPORATION AND SUBSIDIARIES \n Reconciliation of GAAP to non-GAAP measures (In thousands, except per share amounts) (Unaudited) \n \n Three Months Ended Twelve Months Ended \n June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 \n GAAP net loss $ (34,343 ) $ (3,924 ) $ (47,793 ) $ (8,318 ) \n Restructuring charges 579 51 13,201 2,908 \n Receivables allowance for distressed customers 8,358 — 10,346 — \n Stock-based compensation expense 165 109 633 218 \n Gain on insurance proceeds, net of losses (5,267 ) — (5,904 ) — \n Write-off of unamortized loan fees — — — 1,012 \n Write-off of deferred tax asset 28,422 — 29,455 — \n Income tax effect of non-GAAP adjustments (1) (767 ) (32 ) (3,655 ) (828 ) \n Adjusted net loss $ (2,853 ) $ (3,796 ) $ (3,717 ) $ (5,008 ) \n \n Adjusted net loss per share — non-GAAP Diluted $ (0.26 ) $ (0.35 ) $ (0.34 ) $ (0.47 ) \n Weighted average shares outstanding — Diluted 10,859 10,762 10,837 10,762 \n \n \n GAAP cost of sales $ 94,087 $ 103,675 $ 362,730 $ 431,444 \n Restructuring charges 521 51 9,251 2,908 \n Adjusted cost of sales $ 93,566 $ 103,624 $ 353,479 $ 428,536 \n \n Total gross profit adjustments $ 521 $ 51 $ 9,251 $ 2,908 \n \n GAAP gross profit $ 7,940 $ 6,811 $ 23,937 $ 36,427 \n Total gross profit adjustments 521 51 9,251 2,908 \n Adjusted gross profit $ 8,461 $ 6,862 $ 33,188 $ 39,335 \n \n GAAP net sales $ 102,027 $ 110,486 $ 386,667 $ 467,871 \n Adjusted gross margin 8.3 % 6.2 % 8.6 % 8.4 % \n \n (1) Income tax effects are calculated using an effective tax rate of 20%, which approximates the statutory GAAP tax rate for the presented periods. \n \n\n\n\n \n CONTACTS: Tony Voorhees Michael Newman \n Chief Financial Officer Investor Relations \n Key Tronic Corporation StreetConnect \n (509)-927-5345 (206) 729-3625 \n \n\n\n\n(https://www.globenewswire.com/NewsRoom/AttachmentNg/75af6ada-b27d-4c19-8e99-561b30041028)\n\n\n\nGlobeNewswire, Inc. 2026","article_body_html":"","raw_payload":{"data":{"id":"nGNX3Zkd29","title":"Key Tronic Corporation Announces Results for the Fourth Quarter and Year End of Fiscal 2026","author":"Globe Newswire","ticker":"KTCC","created":"2026-08-27T20:03:00.244Z","tickers":["KTCC"],"exchange":"NASDAQ","article_body":"SPOKANE VALLEY, Wash., Aug. 27, 2026 (GLOBE NEWSWIRE) -- Key Tronic\nCorporation (Nasdaq: KTCC), a provider of electronic manufacturing services\n(EMS), today announced its results for the quarter ended June 27, 2026.\n\nFor the fourth quarter of fiscal year 2026, Key Tronic reported total revenue\nof $102.0 million, compared to $89.6 million in the prior quarter and $110.5\nmillion in the same period of fiscal year 2025. The 14% sequential increase in\nrevenue in the fourth quarter of fiscal year 2026 was driven by strong demand\nfrom both legacy and new programs. In particular, revenue from Key Tronic’s\nVietnam-based production more than doubled sequentially, driven by medical\ndevice and consumer products programs.\n\nWhile customer demand rebounded significantly in the fourth quarter of fiscal\nyear 2026, Key Tronic's production was constrained by tightening credit\navailability and liquidity pressures across the global supply chain. These\ncapital constraints have affected the entire EMS industry as suppliers,\ncustomers, and manufacturers navigate ongoing macroeconomic uncertainty.\nSupply chain financing constraints delayed approximately $10 million of the\nCompany's shipments during the quarter. The Company is actively working with\nits customers and suppliers, while also evaluating additional sources of\ncapital, to support growth and alleviate these temporary constraints in future\nperiods. We believe our operational discipline, strengthened manufacturing\nfootprint, and long-standing customer relationships have positioned us better\nthan many of our competitors. As a result, we continue to win new business and\ngain market share in several target markets in new program awards in the\nfourth quarter of fiscal 2026.\n\nFor the full fiscal year 2026, total revenue was $386.7 million, compared to\n$467.9 million in the fiscal year 2025, largely reflecting reduced demand from\ncertain legacy and end-of-life programs, as well as a variety of uncertainties\nin the global economy throughout the year. The Company has experienced an\nincrease in new program wins and new sales funnel activity leading to expected\nrevenue growth in coming quarters of fiscal 2027.\n\nGross margin was 7.8% in the fourth quarter of fiscal year 2026, up from 6.2%\nin the same period of fiscal year 2025. The Company’s gross margin\nimprovements in the fourth quarter of fiscal year 2026, despite the adverse\nsupply chain challenges, demonstrated the operating efficiencies gained from\nits cost-cutting initiatives over the past two years. Operating margin was\n(3.6)% in the fourth quarter of fiscal year 2026, down from (2.1)% in the same\nperiod of fiscal year 2025. The operating margin for the fourth quarter of\nfiscal 2026 was adversely affected by an $8.4 million write-off of long-term\nreceivables and related legal costs incurred in pursuing recovery from\nlongstanding customers experiencing financial distress and no longer\ngenerating program revenues. These adverse impacts were partially offset by a\n$5.3 million insurance recovery related to a roof replacement at the Company's\nMississippi facility.\n\nAdjusted gross margin was 8.3% for the fourth quarter of fiscal year 2026 up\nfrom 6.2% in the same period of fiscal year 2025 (see “Non-GAAP Financial\nMeasures,” below for additional information about adjusted gross margin).\nThese margin gains highlight the Company’s resilience and commitment to\nimproving its operating efficiency. With revenue expected to continue to\nincrease, Key Tronic anticipates continued margin growth in coming quarters.\n\nThroughout fiscal year 2026, the Company continued to prepare for anticipated\nlong-term growth by executing its near-shoring and tariff mitigation\nstrategies to reduce costs while maintaining the diversity and flexibility of\nits key locations and capabilities. Key Tronic believes that these cost\nreductions have enabled the Company to become more competitive on recent\nquoting opportunities. During the fourth quarter, Key Tronic completed the\nwind-down of its manufacturing operations in China, shifting more production\nto the Company’s expanding facilities in the US and Vietnam. The wind-down\nof manufacturing in China is anticipated to save approximately $4.0 million in\nfiscal 2027.\n\nThe Company’s net loss was $(34.3) million or $(3.16) per share for the\nfourth quarter of fiscal year 2026, compared to net loss of $(3.9) million or\n$(0.36) per share for the same period of fiscal year 2025. For the full fiscal\nyear 2026, the net loss was $(47.8) million or $(4.41) per share, compared to\n$(8.3) million or $(0.77) per share for the full fiscal year 2025.\n\nThe Company recorded a $28.4 million non-cash charge during the quarter to\nestablish a valuation allowance against certain deferred tax assets. The\naccounting adjustment was driven primarily by the cumulative loss of US\ntaxable income over the last few years. While management remains confident in\nthe Company's expected return to profitability and the future expected\nutilization of certain tax benefits, the valuation allowance was based on the\nrelative weighting of historical results. The adjustment has no impact on cash\nflows, debt covenant compliance, or the Company's underlying operating\nperformance. As described above, approximately $8.4 million of distressed\ncustomer related long term receivables were also written off during the\nquarter.\n\nThe adjusted net loss was $(2.9) million or $(0.26) per diluted share for the\nfourth quarter of fiscal year 2026, compared to adjusted net loss of $(3.8)\nmillion or $(0.35) per diluted share for the same period of fiscal year 2025.\nFor the full fiscal year 2026, the adjusted net loss was $(3.7) million or\n$(0.34) per diluted share, compared to adjusted net loss of $(5.0) million or\n$(0.47) per diluted share for fiscal year 2025. See “Non-GAAP Financial\nMeasures,” below for additional information about adjusted net income (loss)\nand adjusted net income (loss) per share.\n\n\"Over the past year, we have taken decisive actions to strengthen Key Tronic's\ncompetitive position and create a more efficient global manufacturing\nfootprint,” said Brett Larsen, President and CEO. “We successfully exited\nmanufacturing operations in China, right-sized our Mexico facility, and\nexpanded production capacity in both the United States and Vietnam. These\ninitiatives have improved our cost structure, enhanced supply chain\nflexibility, and enabled us to provide customers with attractive manufacturing\noptions amid ongoing macroeconomic and geopolitical uncertainties.\nApproximately half of our manufacturing took place in our US and Vietnam\nfacilities during the fourth quarter of fiscal 2026, and we have significant\ncapacity available to support future growth.”\n\n\"Our strategic restructuring and cost reduction initiatives are translating\ndirectly into new business opportunities and market share gains. During the\nfourth quarter of fiscal 2026, we secured more than $60 million in new program\nawards in the data center, construction, and industrial power management\nmarkets. These wins reflect increasing customer recognition of Key Tronic's\nability to deliver high-quality manufacturing solutions with a globally\ncompetitive cost structure. In an environment where liquidity and capital\nconstraints are affecting much of the EMS industry, customers are increasingly\nseeking financially stable, operationally disciplined partners capable of\nsupporting long-term growth. Many of these new programs feature innovative\npartnership models that provide a more balanced approach to ramp-up capital\nrequirements, allowing customers to participate in the upfront investment\nwhile enabling Key Tronic to accelerate growth and improve returns on invested\ncapital.”\n\n“While we continue to face near-term liquidity challenges within the global\nsupply chain, our backlog of customer demand has increased, and we expect\nrecently awarded programs to ramp into production over the coming quarters.\nSupported by our stronger competitive position and growing pipeline of\nbusiness opportunities, we expect continued revenue growth and a return to\nprofitability in fiscal 2027.\"\n\nThe financial data presented for the fourth quarter and full year of fiscal\n2026 should be considered preliminary and could be subject to change, as the\nCompany’s independent auditor has not completed their audit procedures.\n\nBusiness Outlook\n\nDue to uncertainty in the timing of new program ramps and continued\nmacroeconomic uncertainty, Key Tronic will not be issuing revenue or earnings\nguidance for the first quarter of fiscal year 2027.\n\nConference Call\n\nKey Tronic will host a conference call to discuss its financial results at\n2:00 PM Pacific (5:00 PM Eastern) today. A broadcast of the conference call\nwill be available at www.keytronic.com under “Investor Relations” or by\ncalling 800-330-6710 or +1-213-279-1505 (Access Code: 5639032). The Company\nwill also reference accompanying slides that can be viewed with the webcast at\nwww.keytronic.com under “Investor Relations”. A replay will be available\nat www.keytronic.com under “Investor Relations”.\n\nAbout Key Tronic\n\nKey Tronic is a leading contract manufacturer offering value-added design,\nsourcing and manufacturing services from its facilities in the United States,\nMexico, and Vietnam. The Company provides its customers with full engineering\nservices, materials management, worldwide manufacturing facilities, assembly\nservices, in-house testing, and worldwide distribution. Its customers include\nsome of the world’s leading original equipment manufacturers. For more\ninformation about Key Tronic visit: www.keytronic.com\n\nForward-Looking Statements\n\nSome of the statements in this press release are forward-looking statements\nwithin the meaning of the Private Securities Litigation Reform Act of 1995.\nForward-looking statements include, but are not limited to those including\nsuch words as aims, anticipates, believes, continues, estimates, expects,\nhopes, intends, plans, predicts, projects, targets, will, or would, similar\nverbs, or nouns corresponding to such verbs, which may be forward looking.\nForward-looking statements also include other passages that are relevant to\nexpected future events, performances, and actions or that can only be fully\nevaluated by events that will occur in the future. Forward-looking statements\nin this release include, without limitation, the Company’s statements\nregarding its expectations with respect to financial conditions and results,\nincluding revenue, earnings, and margins, the Company’s plans to address\nproduction constraints, including its ability to access additional capital,\nthe Company’s ability to shift its focus in China and build out production\ncapacity in the US and Vietnam and the timing of completion of those\nfacilities, cost savings from headcount reduction and the wind-down of\nmanufacturing operations in China, demand for certain products and the\neffectiveness of some of its programs, business from customers and programs,\nnew program launches, impacts from operational streamlining and efficiencies,\nincluding reductions in inventories, future utilization of certain tax\nbenefits, and impacts of repairs to its facilities from winter storm damage.\nThere are many factors, risks and uncertainties that could cause actual\nresults to differ materially from those predicted or projected in\nforward-looking statements, including but not limited to: the future of the\nglobal economic environment and its impact on our customers and suppliers; the\nimpact of new governmental legislation and regulation, including tax reform,\ntariffs and related activities, such as trade negotiations and other risks;\nthe success and timing of our expansion plans; the availability of components\nfrom the supply chain; the availability of a healthy workforce; the accuracy\nof suppliers’ and customers’ forecasts; development and success of\ncustomers’ programs and products; timing and effectiveness of ramping of new\nprograms; success of new-product introductions; the risk of legal proceedings\nrelating to the previously reported financial statement restatements and\nrelated material weaknesses, the May 2024 cybersecurity incident and the\nsubject of the internal investigation by the Company’s Audit Committee and\nrelated or other unrelated matters; acquisitions or divestitures of operations\nor facilities; technology advances; changes in pricing policies by the\nCompany, its competitors, customers or suppliers; and other factors, risks,\nand uncertainties detailed from time to time in the Company’s SEC filings.\n\nNon-GAAP Financial Measures\n\nTo supplement our consolidated financial statements, which are prepared in\naccordance with generally accepted accounting principles in the United States\n(GAAP), we use certain non-GAAP financial measures; adjusted net loss, and\nadjusted net loss per share, diluted. We provide these non-GAAP financial\nmeasures because we believe they provide greater transparency related to our\ncore operations and represent supplemental information used by management in\nits financial and operational decision making. We exclude (or include) certain\nitems in our non-GAAP financial measures as we believe the net result is a\nmeasure of our core business. We believe this facilitates operating\nperformance comparisons from period to period by eliminating potential\ndifferences caused by the existence and timing of certain income and expense\nitems that would not otherwise be apparent on a GAAP basis.\n\nIn addition, during this period, we have provided adjusted cost of sales,\nadjusted gross profit, and adjusted gross margin. These additions supplement\nadjusted net loss by mapping the portion of the identified adjustments\nutilized in the calculation of adjusted net loss to relevant financial\nstatement line items for re-calculation of the adjusted metrics presented. We\nhave provided these additional non-GAAP financial measures because we believe\nthey provide greater transparency related to our core operations and represent\nsupplemental information used by management in its financial and operational\ndecision making.\n\nNon-GAAP performance measures should be considered in addition to, and not as\na substitute for, results prepared in accordance with GAAP. We strongly\nencourage investors and shareholders to review our financial statements and\npublicly-filed reports in their entirety and not to rely on any single\nfinancial measure. Our non-GAAP financial measures may be different from those\nreported by other companies.\n\nSee the table below entitled “Reconciliation of GAAP to non-GAAP measures”\nfor reconciliations of adjusted net loss and adjusted cost of sales to the\nmost directly comparable GAAP measure, which is GAAP net loss, and GAAP cost\nof sales, respectively, as well as the computation of adjusted gross profit,\nadjusted gross margin, and adjusted net loss per share, diluted.\n\n \n KEY TRONIC CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) \n \n Three Months Ended Twelve Months Ended \n June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 \n Net sales $ 102,027 $ 110,486 $ 386,667 $ 467,871 \n Cost of sales 94,087 103,675 362,730 431,444 \n Gross profit 7,940 6,811 23,937 36,427 \n Research, development and engineering expenses 2,263 2,246 8,011 9,163 \n Selling, general and administrative expenses 14,580 6,867 36,546 26,702 \n Gain on insurance proceeds, net of losses (5,267 ) — (5,904 ) — \n Total operating expenses 11,576 9,113 38,653 35,865 \n Operating income (loss) (3,636 ) (2,302 ) (14,716 ) 562 \n Interest expense, net 2,531 2,775 10,074 12,523 \n Loss before income taxes (6,167 ) (5,077 ) (24,790 ) (11,961 ) \n Income tax provision (benefit) 28,176 (1,153 ) 23,003 (3,643 ) \n Net loss $ (34,343 ) $ (3,924 ) $ (47,793 ) $ (8,318 ) \n Net loss per share — Basic $ (3.16 ) $ (0.36 ) $ (4.41 ) $ (0.77 ) \n Weighted average shares outstanding — Basic 10,859 10,762 10,837 10,762 \n Net loss per share — Diluted $ (3.16 ) $ (0.36 ) $ (4.41 ) $ (0.77 ) \n Weighted average shares outstanding — Diluted 10,859 10,762 10,837 10,762 \n \n\n\n\n \n KEY TRONIC CORPORATION AND SUBSIDIARIES \n CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) \n \n June 27, 2026 June 28, 2025 \n ASSETS \n Current assets: \n Cash and cash equivalents $ 584 $ 1,384 \n Trade receivables, net of credit losses of $4,659 and $3,479 83,650 96,142 \n Contract assets, net of credit losses of $856 and $0 24,219 17,409 \n Inventories, net 95,844 97,321 \n Other, net of credit losses of $0 and $1,463 19,462 21,917 \n Total current assets 223,759 234,173 \n Property, plant and equipment, net 28,854 27,727 \n Operating lease right-of-use assets, net 26,550 11,347 \n Other assets: \n Deferred income tax asset 1,451 23,397 \n Other, net of credit losses of $8,438 and $500 19,152 19,230 \n Total other assets 20,603 42,627 \n Total assets $ 299,766 $ 315,874 \n LIABILITIES AND SHAREHOLDERS ’ EQUITY \n Current liabilities: \n Accounts payable $ 75,961 $ 63,725 \n Accrued compensation and vacation 5,450 8,157 \n Current portion of long-term debt 7,162 6,215 \n Other 17,919 13,894 \n Total current liabilities 106,492 91,991 \n Long-term liabilities: \n Long-term debt, net 99,056 98,936 \n Operating lease liabilities 20,120 6,859 \n Deferred income tax liability 41 — \n Other long-term obligations 4,874 954 \n Total long-term liabilities 124,091 106,749 \n Total liabilities 230,583 198,740 \n Shareholders’ equity: \n Common stock, no par value—shares authorized 25,000; issued and outstanding 10,859 and 10,762 shares, respectively 48,135 47,502 \n Retained earnings 20,810 68,603 \n Accumulated other comprehensive income 238 1,029 \n Total shareholders’ equity 69,183 117,134 \n Total liabilities and shareholders’ equity $ 299,766 $ 315,874 \n \n\n\n\n \n KEY TRONIC CORPORATION AND SUBSIDIARIES \n Reconciliation of GAAP to non-GAAP measures (In thousands, except per share amounts) (Unaudited) \n \n Three Months Ended Twelve Months Ended \n June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 \n GAAP net loss $ (34,343 ) $ (3,924 ) $ (47,793 ) $ (8,318 ) \n Restructuring charges 579 51 13,201 2,908 \n Receivables allowance for distressed customers 8,358 — 10,346 — \n Stock-based compensation expense 165 109 633 218 \n Gain on insurance proceeds, net of losses (5,267 ) — (5,904 ) — \n Write-off of unamortized loan fees — — — 1,012 \n Write-off of deferred tax asset 28,422 — 29,455 — \n Income tax effect of non-GAAP adjustments (1) (767 ) (32 ) (3,655 ) (828 ) \n Adjusted net loss $ (2,853 ) $ (3,796 ) $ (3,717 ) $ (5,008 ) \n \n Adjusted net loss per share — non-GAAP Diluted $ (0.26 ) $ (0.35 ) $ (0.34 ) $ (0.47 ) \n Weighted average shares outstanding — Diluted 10,859 10,762 10,837 10,762 \n \n \n GAAP cost of sales $ 94,087 $ 103,675 $ 362,730 $ 431,444 \n Restructuring charges 521 51 9,251 2,908 \n Adjusted cost of sales $ 93,566 $ 103,624 $ 353,479 $ 428,536 \n \n Total gross profit adjustments $ 521 $ 51 $ 9,251 $ 2,908 \n \n GAAP gross profit $ 7,940 $ 6,811 $ 23,937 $ 36,427 \n Total gross profit adjustments 521 51 9,251 2,908 \n Adjusted gross profit $ 8,461 $ 6,862 $ 33,188 $ 39,335 \n \n GAAP net sales $ 102,027 $ 110,486 $ 386,667 $ 467,871 \n Adjusted gross margin 8.3 % 6.2 % 8.6 % 8.4 % \n \n (1) Income tax effects are calculated using an effective tax rate of 20%, which approximates the statutory GAAP tax rate for the presented periods. \n \n\n\n\n \n CONTACTS: Tony Voorhees Michael Newman \n Chief Financial Officer Investor Relations \n Key Tronic Corporation StreetConnect \n (509)-927-5345 (206) 729-3625 \n \n\n\n\n(https://www.globenewswire.com/NewsRoom/AttachmentNg/75af6ada-b27d-4c19-8e99-561b30041028)\n\n\n\nGlobeNewswire, Inc. 2026"},"type":"article","timestamp":"2026-08-27T20:03:00.300638928Z","server_sent_at_ms":1787860980300},"received_at":"2026-08-27T20:03:00.487Z","source_url":null},"analysis":{"id":"118695","press_release_id":"129782","analysis_json":{"industry":{"label":"Technology Hardware, Storage & Peripherals","sector":"Information Technology"},"redFlags":["Liquidity constraints delayed $10 million of shipments during the quarter","Cash balance dropped to $584,000 from $1.38 million year-over-year","$28.4 million valuation allowance recorded against deferred tax assets","Company withheld revenue and earnings guidance for Q1 fiscal 2027","Preliminary financial results subject to change as audit is not completed"],"eventType":"earnings","narrative":"Key Tronic reported Q4 revenue of $102.0 million, a 14% sequential increase but an 7.7% decrease year-over-year, with gross margin expanding to 7.8%.\n\nThe company recorded a net loss of $34.3 million, heavily impacted by a $28.4 million valuation allowance on deferred tax assets and an $8.4 million write-off of receivables from distressed customers; on an adjusted basis, the net loss narrowed to $2.9 million.\n\nOperational constraints, including liquidity issues that delayed $10 million in shipments, persist alongside strategic shifts like the completed exit from China which is expected to save $4.0 million annually.","sentiment":"mixed","agentHooks":{"shouldPost":false,"suggestedAngle":"Sequential revenue rebound and margin expansion overshadowed by severe liquidity stress and large non-cash charges."},"keyFigures":{"revenue":102000000,"guidance":"None provided due to uncertainty in timing of new program ramps and macroeconomic conditions","revenueYoy":"-7.7%","customDimensions":{"cash_balance":584000,"gross_margin":"7.8%","operating_margin":"-3.6%","china_exit_savings":4000000,"new_program_awards":60000000,"revenue_seq_growth":"14%","adjusted_gross_margin":"8.3%","receivables_write_off":8400000,"dta_valuation_allowance":28400000}},"quotedText":"While we continue to face near-term liquidity challenges within the global supply chain, our backlog of customer demand has increased, and we expect recently awarded programs to ramp into production over the coming quarters.","namedEntities":{"people":[{"name":"Brett Larsen","role":"President and CEO"},{"name":"Tony Voorhees","role":"Chief Financial Officer"},{"name":"Michael Newman","role":"Investor Relations"}],"products":[],"companies":[{"name":"Key Tronic Corporation","ticker":"KTCC"},{"name":"StreetConnect","relationship":"Investor Relations"}],"dollarAmounts":[{"amount":"$102.0 million","context":"Q4 fiscal 2026 total revenue"},{"amount":"$89.6 million","context":"Q3 fiscal 2026 total revenue (sequential)"},{"amount":"$110.5 million","context":"Q4 fiscal 2025 total revenue (year-over-year)"},{"amount":"$386.7 million","context":"Full fiscal year 2026 total revenue"},{"amount":"$10 million","context":"Shipments delayed due to supply chain financing constraints"},{"amount":"$8.4 million","context":"Write-off of long-term receivables from distressed customers"},{"amount":"$5.3 million","context":"Insurance recovery related to roof replacement"},{"amount":"$34.3 million","context":"Q4 net loss"},{"amount":"$47.8 million","context":"Full fiscal year 2026 net loss"},{"amount":"$28.4 million","context":"Non-cash charge to establish valuation allowance against deferred tax assets"},{"amount":"$2.9 million","context":"Q4 adjusted net loss"},{"amount":"$60 million","context":"New program awards in Q4"},{"amount":"$4.0 million","context":"Anticipated savings in fiscal 2027 from China wind-down"}]},"materialImpact":{"score":3,"reasoning":"While sequential revenue grew 14% and gross margins improved, the company faces significant liquidity constraints and posted a large GAAP net loss driven by a $28.4 million valuation allowance and an $8.4 million receivable write-off. The preliminary nature of the results and withheld guidance add uncertainty."},"tickerRelevance":{"others":[],"primary":"KTCC"},"globalImportance":10,"audienceRelevance":10,"eventTypeSecondary":["restructuring","operations_update"],"importanceComponents":{"tickerTier":"micro-cap","eventGravity":"mixed earnings with liquidity stress","sectorWeight":"EMS"}},"event_type":"earnings","event_type_secondary":["restructuring","operations_update"],"sentiment":"mixed","material_impact_score":3,"narrative":"Key Tronic reported Q4 revenue of $102.0 million, a 14% sequential increase but an 7.7% decrease year-over-year, with gross margin expanding to 7.8%.\n\nThe company recorded a net loss of $34.3 million, heavily impacted by a $28.4 million valuation allowance on deferred tax assets and an $8.4 million write-off of receivables from distressed customers; on an adjusted basis, the net loss narrowed to $2.9 million.\n\nOperational constraints, including liquidity issues that delayed $10 million in shipments, persist alongside strategic shifts like the completed exit from China which is expected to save $4.0 million annually.","key_figures":{"revenue":102000000,"guidance":"None provided due to uncertainty in timing of new program ramps and macroeconomic conditions","revenueYoy":"-7.7%","customDimensions":{"cash_balance":584000,"gross_margin":"7.8%","operating_margin":"-3.6%","china_exit_savings":4000000,"new_program_awards":60000000,"revenue_seq_growth":"14%","adjusted_gross_margin":"8.3%","receivables_write_off":8400000,"dta_valuation_allowance":28400000}},"named_entities":{"people":[{"name":"Brett Larsen","role":"President and CEO"},{"name":"Tony Voorhees","role":"Chief Financial Officer"},{"name":"Michael Newman","role":"Investor Relations"}],"products":[],"companies":[{"name":"Key Tronic Corporation","ticker":"KTCC"},{"name":"StreetConnect","relationship":"Investor Relations"}],"dollarAmounts":[{"amount":"$102.0 million","context":"Q4 fiscal 2026 total revenue"},{"amount":"$89.6 million","context":"Q3 fiscal 2026 total revenue (sequential)"},{"amount":"$110.5 million","context":"Q4 fiscal 2025 total revenue (year-over-year)"},{"amount":"$386.7 million","context":"Full fiscal year 2026 total revenue"},{"amount":"$10 million","context":"Shipments delayed due to supply chain financing constraints"},{"amount":"$8.4 million","context":"Write-off of long-term receivables from distressed customers"},{"amount":"$5.3 million","context":"Insurance recovery related to roof replacement"},{"amount":"$34.3 million","context":"Q4 net loss"},{"amount":"$47.8 million","context":"Full fiscal year 2026 net loss"},{"amount":"$28.4 million","context":"Non-cash charge to establish valuation allowance against deferred tax assets"},{"amount":"$2.9 million","context":"Q4 adjusted net loss"},{"amount":"$60 million","context":"New program awards in Q4"},{"amount":"$4.0 million","context":"Anticipated savings in fiscal 2027 from China wind-down"}]},"model_name":"glm-4.7","prompt_hash":"sha256:727b4b9429a443af","schema_hash":"sha256:05005c02d9cffac9","created_at":"2026-08-27T20:07:09.552Z","global_importance":10,"audience_relevance":10,"importance_components":{"tickerTier":"micro-cap","eventGravity":"mixed earnings with liquidity stress","sectorWeight":"EMS"}},"durationMs":182412,"modelName":"glm-4.7"}}