Revenue: As of FY2026 Q3, the actual value is USD 89.57 M.

EPS: As of FY2026 Q3, the actual value is USD -0.24.

EBIT: As of FY2026 Q3, the actual value is USD -238 K.

Key Tronic Corporation operates as a single operating segment, Electronics Manufacturing Services, which provides integrated electronic and mechanical engineering, assembly, sourcing, procurement, logistics, and new product testing for its customers .

Segment Revenue (Net Sales)

• Three Months Ended March 28, 2026: Net sales were $89,571 thousand, a 20.0% decrease from $111,974 thousand in the prior year period . This reduction was primarily due to decreased demand from a longstanding customer (-$16.1 million) and an end-of-life program transition (-$7.2 million), alongside impacts from Winter Storm Fern, customer design delays, and component allocation delays .
• Nine Months Ended March 28, 2026: Net sales totaled $284,640 thousand, representing a 20.4% decrease from $357,385 thousand in the prior year period . This decline was mainly attributed to a $97 million reduction in demand from longstanding or end-of-life customers, partially offset by an additional $25 million in revenue from ramping programs and increased demand from other customers .

Operational Metrics

• Gross Profit:
  • Three Months Ended March 28, 2026: Gross profit was $7,183 thousand, or 8.0% of net sales, an increase from 7.7% in the prior year period due to efficiency gains from cost reduction initiatives .
  • Nine Months Ended March 28, 2026: Gross profit was $15,997 thousand, or 5.6% of net sales, a decrease from 8.3% in the prior year period . This decrease is primarily due to significant one-time expenses related to the wind-down of China manufacturing operations and severance expenses in Mexico .
• Adjusted Gross Margin (Non-GAAP): Was 8.5% for the three months ended March 28, 2026, up from 8.4% in the prior year period, and 8.7% for the nine months ended March 28, 2026, down from 9.1% in the prior year period .
• Operating Expenses:
  • Research, Development, and Engineering (RD&E) Expenses: Were $1,825 thousand (2.0% of net sales) for the three months and $5,748 thousand (2.0% of net sales) for the nine months ended March 28, 2026 .
  • Selling, General, and Administrative (SG&A) Expenses: Were $6,233 thousand (7.0% of net sales) for the three months, a decrease from $6,758 thousand in the prior year due to fewer reserve charges for customer receivables . For the nine months, SG&A expenses were $21,966 thousand (7.7% of net sales), an increase from $19,835 thousand in the prior year due to approximately $3.4 million in estimated reserves for the China manufacturing wind-down, partially offset by reduced variable spend .
  • Gain on Insurance Proceeds, Net of Losses: Was -$637 thousand for both the three and nine months ended March 28, 2026 .
  • Total Operating Expenses: Amounted to $7,421 thousand for the three months and $27,077 thousand for the nine months ended March 28, 2026 .
• Operating Income (Loss):
  • Three Months Ended March 28, 2026: Operating income was -$238 thousand (-0.3% of net sales), an improvement from -$459 thousand (-0.4% of net sales) in the prior year period .
  • Nine Months Ended March 28, 2026: Operating loss was -$11,080 thousand (-3.9% of net sales), a decrease from an operating income of $2,864 thousand (0.8% of net sales) in the prior year period .
• Interest Expense, Net: Was $2,396 thousand for the three months and $7,543 thousand for the nine months ended March 28, 2026, decreasing from $2,581 thousand and $9,748 thousand, respectively, in the prior year periods . This decrease is primarily due to lower interest costs from debt refinancing in December 2024 and reduced borrowing amounts .
• Net Loss:
  • Three Months Ended March 28, 2026: Net loss was -$2,625 thousand, compared to -$604 thousand in the prior year period .
  • Nine Months Ended March 28, 2026: Net loss was -$13,450 thousand, compared to -$4,394 thousand in the prior year period . These year-over-year decreases resulted from the wind-down of China manufacturing operations, headcount reductions in Mexico, and reduced demand from longstanding customers .
• Adjusted Net Income (Loss) (Non-GAAP): Was -$2,799 thousand for the three months ended March 28, 2026, compared to $71 thousand in the prior year period . For the nine months ended March 28, 2026, adjusted net loss was -$3,887 thousand, compared to -$1,212 thousand in the prior year period .

Other Key Financial Metrics

• Inventory Adjustments to Net Realizable Value: Totaled $2,920 thousand for the nine months ended March 28, 2026, including approximately $1.0 million related to the China manufacturing wind-down .
• Allowance for Credit Losses: The provision for credit losses was $3,836 thousand for the nine months ended March 28, 2026, compared to $740 thousand in the prior year period .
• Stock-Based Compensation Expense: Was $468 thousand for the nine months ended March 28, 2026, compared to $109 thousand in the prior year period .
• Total Debt: Stood at $101,534 thousand as of March 28, 2026, down from $107,629 thousand as of June 28, 2025 .
• Working Capital: The company reported positive working capital of $106.9 million as of March 28, 2026 .
• Current Ratio: Was 2.1 as of March 28, 2026 .
• Debt-to-Equity Ratio: Was 1.0 as of March 28, 2026 .
• Backlog: The order backlog was approximately $159.5 million as of March 28, 2026, an increase from $138.1 million as of March 29, 2025, driven by strengthening demand and recent program wins .

Cash Flow

• Net Cash Provided by Operating Activities: Was $10.0 million for the nine months ended March 28, 2026, compared to $10.1 million in the prior year period . Key changes included a -$13.5 million net loss, adjusted for $7.1 million in depreciation and amortization, a $9.6 million decrease in accounts receivable, an $8.6 million decrease in inventories, and a $2.1 million increase in accounts payable .
• Cash Used in Investing Activities: Totaled $3.7 million for the nine months ended March 28, 2026, compared to $3.0 million in the prior year period, primarily for purchasing equipment to support new programs .
• Cash Used in Financing Activities: Amounted to $7.2 million for the nine months ended March 28, 2026, compared to $9.4 million in the prior year period .

Future Outlook and Strategy

Key Tronic Corporation expects continued revenue growth and further gross margin improvements throughout fiscal year 2026, supported by increased demand from legacy customers and new program launches in the fourth quarter, including a new manufacturing services contract with a large data processing OEM . The company is implementing near-shoring and tariff mitigation strategies by winding down China manufacturing operations, which is expected to be completed by fiscal year-end and save approximately $1.2 million per quarter, and by increasing production capacity in the U.S. and Vietnam . These efforts, along with restructuring Juarez operations to focus on higher volume manufacturing, are anticipated to enhance competitiveness, leading to both revenue and margin growth .