Key Tronic Reports Q1 2027 Net Loss Amid Liquidity and Production Constraints
Key Tronic (KTCC) reported a challenging first quarter for fiscal 2027, characterized by flat revenue of $98.7 million and an increased net loss of $7.5 million ($0.69 per share). The company's profitability was significantly impacted by declining gross margins, which fell to 2.5% from 8.4% the previous year, driven by production delays, excess labor costs, and supply chain financing constraints in Mexico and the United States. Despite these headwinds, demand remains robust with an order backlog of $245.9 million, representing a 76% increase year-over-year. Management is focusing on cost-cutting measures, including an expected $8 million annual reduction in labor costs through U.S. workforce streamlining. To mitigate liquidity pressures, the company has secured $60 million in new program wins across data centers and defense sectors, with some customers providing upfront capital for equipment.