Q3 2024 Key Tronic Corp Earnings Call Transcript
Key Points
- Key Tronic Corp reported a significant reduction in inventory by approximately $39 million, reflecting improved component availability and effective inventory management.
- The company successfully amended its asset-based revolving credit facility, providing financial covenant relief for the next 12 months and addressing its breach of the fixed charge coverage ratio covenant.
- Despite challenges, Key Tronic Corp secured new customer programs potentially worth up to $33 million across various sectors, indicating strong business development and customer diversification.
- Revenue for the first nine months of fiscal 2024 showed an increase to $433.7 million from $425.5 million in the same period last year, demonstrating resilience and capacity for growth.
- Key Tronic Corp is making strategic adjustments in its operations, including workforce reductions aimed at saving more than $10 million annually, which could lead to improved profitability.
- Key Tronic Corp experienced a decrease in revenue for the third quarter of fiscal 2024, reporting $140.5 million compared to $164.6 million in the same period last year, partly due to severe weather impacts and softening demand in Mexico.
- The company reported a net loss of $2.2 million for the third quarter of fiscal 2024, a significant downturn from a net income of $2 million in the corresponding period of the previous year.
- Higher labor costs, increased interest expenses, and the strengthening of the Mexican peso adversely affected the company's margins and profitability during the quarter.
- Operational disruptions, including temporary facility closures due to severe weather, led to a loss of contribution margin estimated at $1 million.
- Accounts receivable days sales outstanding (DSO) increased to 83 days from 79 days a year ago, indicating potential issues in cash flow and collection times from customers.
And good day, and welcome to the third quarter fiscal 2024 Key Tronic Corporation conference call. Today's conference is being recorded.
At this time, I would like to turn the conference over to Brett Larsen. Please go.
Good afternoon, everyone. I am Brett Larsen, Chief Financial Officer of Key Tronic. So I'd like to thank everyone for joining us today for our investor conference call. Joining me here in our Spokane Valley headquarters is Craig Gates, our President and Chief Executive Officer, Tony Ward. He's our Vice President of Finance and Corporate Controller. As always, I would like to remind you that during the course of this call, we may make projections or other forward-looking statements regarding future events or the Company's future financial performance. Please remember that such statements are only predictions and actual events or results may differ materially. From more information. You may review the risk factors outlined in the documents the company has
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