Key Tronic Corporation Announces Results for the Fourth Quarter and Year End of Fiscal 2026
Rhea-AI Summary
Key Tronic (Nasdaq: KTCC) reported fourth-quarter fiscal 2026 revenue of $102.0 million, up 14% sequentially from $89.6 million but down from $110.5 million a year earlier. Full-year 2026 revenue was $386.7 million versus $467.9 million in 2025, reflecting lower demand from legacy and end-of-life programs.
Fourth-quarter gross margin improved to 7.8% (adjusted 8.3%) from 6.2% a year ago, while operating margin was (3.6)%. Net loss for the quarter was $(34.3) million, driven largely by a $28.4 million non-cash deferred tax valuation allowance and an $8.4 million write-off of long-term receivables, partially offset by a $5.3 million insurance recovery. Adjusted net loss was $(2.9) million or $(0.26) per share.
During the quarter, Key Tronic completed the wind-down of China manufacturing, expanded US and Vietnam capacity, and expects about $4.0 million in fiscal 2027 savings. Approximately $10 million of Q4 shipments were delayed by supply-chain financing constraints. The company will not provide Q1 fiscal 2027 guidance and characterizes these results as preliminary pending completion of the audit.
Positive
- Q4 2026 revenue up 14% sequentially to $102.0 million
- Vietnam production revenue more than doubled sequentially in Q4 2026
- Q4 gross margin improved to 7.8%, adjusted 8.3%, from 6.2% year-over-year
- Adjusted net loss Q4 narrowed to $2.9 million from $3.8 million year-over-year
- China manufacturing exit expected to save about $4.0 million in fiscal 2027
- New program awards over $60 million in Q4 2026 across multiple end markets
Negative
- Full-year 2026 revenue declined to $386.7 million from $467.9 million
- GAAP net loss Q4 2026 widened to $34.3 million from $3.9 million
- Full-year 2026 net loss increased to $47.8 million from $8.3 million
- $28.4 million non-cash deferred tax valuation allowance recorded in Q4 2026
- $8.4 million write-off of long-term receivables from distressed customers in Q4 2026
- Approximately $10 million of Q4 shipments delayed by supply chain financing constraints
News Explained
At June 27, reported cash sat alongside $106,492 thousand of current liabilities, while new capital remained uncommitted.
Key Tronic reports preliminary fiscal 2026 results, with the independent audit unfinished, and says it is evaluating additional capital amid liquidity pressure; the release does not announce a completed financing.
The release also reports 10,859 thousand issued and outstanding shares at
For context, the
Sources and calculations
- Key Tronic fiscal 2026 results release (2026-08-27)
- Dilution definition (undated)
- Key Tronic latest reported third-quarter fundamentals (2026Q3)
- Available liquidity against the last reported quarterly operating outflow, in days at that rate $431,000 / ($4,011,000 / 91) = 9.8 days
Market reaction after 4Q26 earnings report: KTCC -27.01%
Following this news, KTCC has declined 27.01%, reflecting a significant negative market reaction. Our momentum scanner has triggered 24 alerts so far, indicating elevated trading interest and price volatility. The stock is currently trading at $2.81. Trading volume is exceptionally heavy at 13.8x the average, suggesting significant selling pressure.
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Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| May 05 | Third-quarter earnings | Negative | +10.7% | Revenue declined year over year despite improved margins and restructuring progress. |
| Feb 03 | Second-quarter earnings | Negative | +0.0% | Losses and restructuring charges offset cash generation and debt reduction. |
| Nov 04 | First-quarter earnings | Negative | -13.2% | Revenue declined and customer bankruptcy provisions accompanied a quarterly loss. |
| Oct 20 | First-quarter reporting date | Neutral | +1.2% | The company scheduled its fiscal first-quarter results and conference call. |
| Aug 27 | Fourth-quarter earnings | Negative | -4.4% | Annual and quarterly revenue declined alongside reported net losses. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Tag-specific earnings reactions were mixed, with negative releases sometimes aligning with declines and the May 2026 release diverging with a 10.69% gain.
Key Terms
electronic manufacturing services technical
non-gaap financial
valuation allowance financial
deferred tax assets financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
Strong Sequential Quarterly Revenue Growth; Completed Restructuring of Global Manufacturing Footprint; Improving Operating Efficiencies Drive Continued Program Wins
SPOKANE VALLEY, Wash., Aug. 27, 2026 (GLOBE NEWSWIRE) -- Key Tronic Corporation (Nasdaq: KTCC), a provider of electronic manufacturing services (EMS), today announced its results for the quarter ended June 27, 2026.
For the fourth quarter of fiscal year 2026, Key Tronic reported total revenue of
While customer demand rebounded significantly in the fourth quarter of fiscal year 2026, Key Tronic's production was constrained by tightening credit availability and liquidity pressures across the global supply chain. These capital constraints have affected the entire EMS industry as suppliers, customers, and manufacturers navigate ongoing macroeconomic uncertainty. Supply chain financing constraints delayed approximately
For the full fiscal year 2026, total revenue was
Gross margin was
Adjusted gross margin was
Throughout fiscal year 2026, the Company continued to prepare for anticipated long-term growth by executing its near-shoring and tariff mitigation strategies to reduce costs while maintaining the diversity and flexibility of its key locations and capabilities. Key Tronic believes that these cost reductions have enabled the Company to become more competitive on recent quoting opportunities. During the fourth quarter, Key Tronic completed the wind-down of its manufacturing operations in China, shifting more production to the Company’s expanding facilities in the US and Vietnam. The wind-down of manufacturing in China is anticipated to save approximately
The Company’s net loss was
The Company recorded a
The adjusted net loss was
"Over the past year, we have taken decisive actions to strengthen Key Tronic's competitive position and create a more efficient global manufacturing footprint,” said Brett Larsen, President and CEO. “We successfully exited manufacturing operations in China, right-sized our Mexico facility, and expanded production capacity in both the United States and Vietnam. These initiatives have improved our cost structure, enhanced supply chain flexibility, and enabled us to provide customers with attractive manufacturing options amid ongoing macroeconomic and geopolitical uncertainties. Approximately half of our manufacturing took place in our US and Vietnam facilities during the fourth quarter of fiscal 2026, and we have significant capacity available to support future growth.”
"Our strategic restructuring and cost reduction initiatives are translating directly into new business opportunities and market share gains. During the fourth quarter of fiscal 2026, we secured more than
“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. Supported by our stronger competitive position and growing pipeline of business opportunities, we expect continued revenue growth and a return to profitability in fiscal 2027."
The financial data presented for the fourth quarter and full year of fiscal 2026 should be considered preliminary and could be subject to change, as the Company’s independent auditor has not completed their audit procedures.
Business Outlook
Due to uncertainty in the timing of new program ramps and continued macroeconomic uncertainty, Key Tronic will not be issuing revenue or earnings guidance for the first quarter of fiscal year 2027.
Conference Call
Key Tronic will host a conference call to discuss its financial results at 2:00 PM Pacific (5:00 PM Eastern) today. A broadcast of the conference call will be available at www.keytronic.com under “Investor Relations” or by calling 800-330-6710 or +1-213-279-1505 (Access Code: 5639032). The Company will also reference accompanying slides that can be viewed with the webcast at www.keytronic.com under “Investor Relations”. A replay will be available at www.keytronic.com under “Investor Relations”.
About Key Tronic
Key Tronic is a leading contract manufacturer offering value-added design, sourcing and manufacturing services from its facilities in the United States, Mexico, and Vietnam. The Company provides its customers with full engineering services, materials management, worldwide manufacturing facilities, assembly services, in-house testing, and worldwide distribution. Its customers include some of the world’s leading original equipment manufacturers. For more information about Key Tronic visit: www.keytronic.com
Forward-Looking Statements
Some of the statements in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to those including such words as aims, anticipates, believes, continues, estimates, expects, hopes, intends, plans, predicts, projects, targets, will, or would, similar verbs, or nouns corresponding to such verbs, which may be forward looking. Forward-looking statements also include other passages that are relevant to expected future events, performances, and actions or that can only be fully evaluated by events that will occur in the future. Forward-looking statements in this release include, without limitation, the Company’s statements regarding its expectations with respect to financial conditions and results, including revenue, earnings, and margins, the Company’s plans to address production constraints, including its ability to access additional capital, the Company’s ability to shift its focus in China and build out production capacity in the US and Vietnam and the timing of completion of those facilities, cost savings from headcount reduction and the wind-down of manufacturing operations in China, demand for certain products and the effectiveness of some of its programs, business from customers and programs, new program launches, impacts from operational streamlining and efficiencies, including reductions in inventories, future utilization of certain tax benefits, and impacts of repairs to its facilities from winter storm damage. There are many factors, risks and uncertainties that could cause actual results to differ materially from those predicted or projected in forward-looking statements, including but not limited to: the future of the global economic environment and its impact on our customers and suppliers; the impact of new governmental legislation and regulation, including tax reform, tariffs and related activities, such as trade negotiations and other risks; the success and timing of our expansion plans; the availability of components from the supply chain; the availability of a healthy workforce; the accuracy of suppliers’ and customers’ forecasts; development and success of customers’ programs and products; timing and effectiveness of ramping of new programs; success of new-product introductions; the risk of legal proceedings relating to the previously reported financial statement restatements and related material weaknesses, the May 2024 cybersecurity incident and the subject of the internal investigation by the Company’s Audit Committee and related or other unrelated matters; acquisitions or divestitures of operations or facilities; technology advances; changes in pricing policies by the Company, its competitors, customers or suppliers; and other factors, risks, and uncertainties detailed from time to time in the Company’s SEC filings.
Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared in accordance with generally accepted accounting principles in the United States (GAAP), we use certain non-GAAP financial measures; adjusted net loss, and adjusted net loss per share, diluted. We provide these non-GAAP financial measures because we believe they provide greater transparency related to our core operations and represent supplemental information used by management in its financial and operational decision making. We exclude (or include) certain items in our non-GAAP financial measures as we believe the net result is a measure of our core business. We believe this facilitates operating performance comparisons from period to period by eliminating potential differences caused by the existence and timing of certain income and expense items that would not otherwise be apparent on a GAAP basis.
In addition, during this period, we have provided adjusted cost of sales, adjusted gross profit, and adjusted gross margin. These additions supplement adjusted net loss by mapping the portion of the identified adjustments utilized in the calculation of adjusted net loss to relevant financial statement line items for re-calculation of the adjusted metrics presented. We have provided these additional non-GAAP financial measures because we believe they provide greater transparency related to our core operations and represent supplemental information used by management in its financial and operational decision making.
Non-GAAP performance measures should be considered in addition to, and not as a substitute for, results prepared in accordance with GAAP. We strongly encourage investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. Our non-GAAP financial measures may be different from those reported by other companies.
See the table below entitled “Reconciliation of GAAP to non-GAAP measures” for reconciliations of adjusted net loss and adjusted cost of sales to the most directly comparable GAAP measure, which is GAAP net loss, and GAAP cost of sales, respectively, as well as the computation of adjusted gross profit, adjusted gross margin, and adjusted net loss per share, diluted.
| KEY TRONIC CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) | |||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||
| June 27, 2026 | June 28, 2025 | June 27, 2026 | June 28, 2025 | ||||||||||||
| Net sales | $ | 102,027 | $ | 110,486 | $ | 386,667 | $ | 467,871 | |||||||
| Cost of sales | 94,087 | 103,675 | 362,730 | 431,444 | |||||||||||
| Gross profit | 7,940 | 6,811 | 23,937 | 36,427 | |||||||||||
| Research, development and engineering expenses | 2,263 | 2,246 | 8,011 | 9,163 | |||||||||||
| Selling, general and administrative expenses | 14,580 | 6,867 | 36,546 | 26,702 | |||||||||||
| Gain on insurance proceeds, net of losses | (5,267 | ) | — | (5,904 | ) | — | |||||||||
| Total operating expenses | 11,576 | 9,113 | 38,653 | 35,865 | |||||||||||
| Operating income (loss) | (3,636 | ) | (2,302 | ) | (14,716 | ) | 562 | ||||||||
| Interest expense, net | 2,531 | 2,775 | 10,074 | 12,523 | |||||||||||
| Loss before income taxes | (6,167 | ) | (5,077 | ) | (24,790 | ) | (11,961 | ) | |||||||
| Income tax provision (benefit) | 28,176 | (1,153 | ) | 23,003 | (3,643 | ) | |||||||||
| Net loss | $ | (34,343 | ) | $ | (3,924 | ) | $ | (47,793 | ) | $ | (8,318 | ) | |||
| Net loss per share — Basic | $ | (3.16 | ) | $ | (0.36 | ) | $ | (4.41 | ) | $ | (0.77 | ) | |||
| Weighted average shares outstanding — Basic | 10,859 | 10,762 | 10,837 | 10,762 | |||||||||||
| Net loss per share — Diluted | $ | (3.16 | ) | $ | (0.36 | ) | $ | (4.41 | ) | $ | (0.77 | ) | |||
| Weighted average shares outstanding — Diluted | 10,859 | 10,762 | 10,837 | 10,762 | |||||||||||
| KEY TRONIC CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) | ||||||||
| June 27, 2026 | June 28, 2025 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 584 | $ | 1,384 | ||||
| Trade receivables, net of credit losses of | 83,650 | 96,142 | ||||||
| Contract assets, net of credit losses of | 24,219 | 17,409 | ||||||
| Inventories, net | 95,844 | 97,321 | ||||||
| Other, net of credit losses of | 19,462 | 21,917 | ||||||
| Total current assets | 223,759 | 234,173 | ||||||
| Property, plant and equipment, net | 28,854 | 27,727 | ||||||
| Operating lease right-of-use assets, net | 26,550 | 11,347 | ||||||
| Other assets: | ||||||||
| Deferred income tax asset | 1,451 | 23,397 | ||||||
| Other, net of credit losses of | 19,152 | 19,230 | ||||||
| Total other assets | 20,603 | 42,627 | ||||||
| Total assets | $ | 299,766 | $ | 315,874 | ||||
| LIABILITIES AND SHAREHOLDERS’EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 75,961 | $ | 63,725 | ||||
| Accrued compensation and vacation | 5,450 | 8,157 | ||||||
| Current portion of long-term debt | 7,162 | 6,215 | ||||||
| Other | 17,919 | 13,894 | ||||||
| Total current liabilities | 106,492 | 91,991 | ||||||
| Long-term liabilities: | ||||||||
| Long-term debt, net | 99,056 | 98,936 | ||||||
| Operating lease liabilities | 20,120 | 6,859 | ||||||
| Deferred income tax liability | 41 | — | ||||||
| Other long-term obligations | 4,874 | 954 | ||||||
| Total long-term liabilities | 124,091 | 106,749 | ||||||
| Total liabilities | 230,583 | 198,740 | ||||||
| Shareholders’ equity: | ||||||||
| Common stock, no par value—shares authorized 25,000; issued and outstanding 10,859 and 10,762 shares, respectively | 48,135 | 47,502 | ||||||
| Retained earnings | 20,810 | 68,603 | ||||||
| Accumulated other comprehensive income | 238 | 1,029 | ||||||
| Total shareholders’ equity | 69,183 | 117,134 | ||||||
| Total liabilities and shareholders’ equity | $ | 299,766 | $ | 315,874 | ||||
| KEY TRONIC CORPORATION AND SUBSIDIARIES Reconciliation of GAAP to non-GAAP measures (In thousands, except per share amounts) (Unaudited) | |||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||
| June 27, 2026 | June 28, 2025 | June 27, 2026 | June 28, 2025 | ||||||||||||
| GAAP net loss | $ | (34,343 | ) | $ | (3,924 | ) | $ | (47,793 | ) | $ | (8,318 | ) | |||
| Restructuring charges | 579 | 51 | 13,201 | 2,908 | |||||||||||
| Receivables allowance for distressed customers | 8,358 | — | 10,346 | — | |||||||||||
| Stock-based compensation expense | 165 | 109 | 633 | 218 | |||||||||||
| Gain on insurance proceeds, net of losses | (5,267 | ) | — | (5,904 | ) | — | |||||||||
| Write-off of unamortized loan fees | — | — | — | 1,012 | |||||||||||
| Write-off of deferred tax asset | 28,422 | — | 29,455 | — | |||||||||||
| Income tax effect of non-GAAP adjustments (1) | (767 | ) | (32 | ) | (3,655 | ) | (828 | ) | |||||||
| Adjusted net loss | $ | (2,853 | ) | $ | (3,796 | ) | $ | (3,717 | ) | $ | (5,008 | ) | |||
| Adjusted net loss per share — non-GAAP Diluted | $ | (0.26 | ) | $ | (0.35 | ) | $ | (0.34 | ) | $ | (0.47 | ) | |||
| Weighted average shares outstanding — Diluted | 10,859 | 10,762 | 10,837 | 10,762 | |||||||||||
| GAAP cost of sales | $ | 94,087 | $ | 103,675 | $ | 362,730 | $ | 431,444 | |||||||
| Restructuring charges | 521 | 51 | 9,251 | 2,908 | |||||||||||
| Adjusted cost of sales | $ | 93,566 | $ | 103,624 | $ | 353,479 | $ | 428,536 | |||||||
| Total gross profit adjustments | $ | 521 | $ | 51 | $ | 9,251 | $ | 2,908 | |||||||
| GAAP gross profit | $ | 7,940 | $ | 6,811 | $ | 23,937 | $ | 36,427 | |||||||
| Total gross profit adjustments | 521 | 51 | 9,251 | 2,908 | |||||||||||
| Adjusted gross profit | $ | 8,461 | $ | 6,862 | $ | 33,188 | $ | 39,335 | |||||||
| GAAP net sales | $ | 102,027 | $ | 110,486 | $ | 386,667 | $ | 467,871 | |||||||
| Adjusted gross margin | 8.3 | % | 6.2 | % | 8.6 | % | 8.4 | % | |||||||
| (1) Income tax effects are calculated using an effective tax rate of | |||||||||||||||
| CONTACTS: | Tony Voorhees | Michael Newman | ||
| Chief Financial Officer | Investor Relations | |||
| Key Tronic Corporation | StreetConnect | |||
| (509)-927-5345 | (206) 729-3625 | |||
