Key Tronic Corp (KTCC) has reported a 46.10 percent plunge in profit for the quarter ended Apr. 01, 2017. The company has earned $0.96 million, or $0.09 a share in the quarter, compared with $1.78 million, or $0.16 a share for the same period last year.
Revenue during the quarter dropped 4.09 percent to $113.60 million from $118.45 million in the previous year period. Gross margin for the quarter contracted 36 basis points over the previous year period to 8.04 percent. Total expenses were 98.37 percent of quarterly revenues, up from 97.67 percent for the same period last year. That has resulted in a contraction of 70 basis points in operating margin to 1.63 percent.
Operating income for the quarter was $1.85 million, compared with $2.76 million in the previous year period.
"During the third quarter of fiscal 2017, our new programs continued to ramp, despite a slowdown in demand from a few longstanding customers, which has also impacted our margins," said Craig Gates, president and chief executive officer. "At the same time, we continued to ramp significant new business from other EMS competitors that we expect will set up revenue growth in fiscal 2018."
For the fourth-quarter, Key Tronic Corp projects revenue to be in the range of $112 million to $117 million. It forecasts diluted earnings per share to be in the range of $0.10 to $0.15 for the same period.
Working capital increases marginally
Key Tronic Corp has recorded an increase in the working capital over the last year. It stood at $97.92 million as at Apr. 01, 2017, up 1.71 percent or $1.64 million from $96.27 million on Apr. 02, 2016. Current ratio was at 2.30 as on Apr. 01, 2017, up from 2.16 on Apr. 02, 2016.
Cash conversion cycle (CCC) has decreased to 46 days for the quarter from 90 days for the last year period. Days sales outstanding went up to 49 days for the quarter compared with 48 days for the same period last year.
Days inventory outstanding has decreased to 43 days for the quarter compared with 93 days for the previous year period. At the same time, days payable outstanding went down to 46 days for the quarter from 51 for the same period last year.
Debt comes down marginally
Key Tronic Corp has recorded a decline in total debt over the last one year. It stood at $44.31 million as on Apr. 01, 2017, down 3.77 percent or $1.74 million from $46.04 million on Apr. 02, 2016. Total debt was 19.29 percent of total assets as on Apr. 01, 2017, compared with 19.65 percent on Apr. 02, 2016. Debt to equity ratio was at 0.39 as on Apr. 01, 2017, down from 0.44 as on Apr. 02, 2016. Interest coverage ratio deteriorated to 3.27 for the quarter from 4.45 for the same period last year.
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