Key Tronic Corporation's KTCC fourth-quarter fiscal 2024 results reflected significant impacts of a cybersecurity incident that disrupted its operations, leading to mixed performance. The company faced notable challenges, including a sharp year-over-year decline in revenues and break-even earnings, stemming from its inability to fulfill orders during the quarter.

However, strategic cost-cutting measures, including workforce reductions and favorable currency fluctuations, provided some relief. As the company navigates the aftermath of the cyberattack, management's outlook for the first quarter of fiscal 2025 suggests a recovery, with an anticipated boost in revenues and earnings as Key Tronic continues to capitalize on business opportunities and operational efficiencies.

Key Tronic Corporation Price, Consensus and EPS Surprise

 

Key Tronic Corporation price-consensus-eps-surprise-chart | Key Tronic Corporation Quote

Q4 Results

KTCC reported fourth-quarter fiscal 2024 break-even earnings per share, declining from 10 cents in the year-ago quarter.

Total quarterly revenues were $125.7 million, a significant decline from $162.6 million in the prior-year quarter.

Weak quarterly earnings primarily resulted from the inability to fulfill approximately $15 million in orders during the quarter as a result of the cyberattack. The negatives were partially offset by lower operating expenses, aided by workforce reductions in Mexico and favorable currency fluctuations.

Key Business Metrics

Net income for fourth-quarter fiscal 2024 was break-even, whereas it reported $1.1 million in fourth-quarter fiscal 2023. This decline reflects increased cybersecurity-related expenses, offset partially by an insurance gain and the weakening of the Mexican Peso, which reduced expenses.

Adjusted net income, which excludes certain one-time expenses, was $1.1 million, up slightly from $1 million in fourth-quarter fiscal 2023.

The company maintained a gross margin of 9% for fourth-quarter fiscal 2024, slightly up from 8.5% in the prior-year quarter, aided by workforce reductions in Mexico and favorable currency fluctuations.

Operating income for the quarter was $2.7 million, down from $4.2 million in the prior-year period. This decline was driven by lower revenues and higher operating expenses, including cybersecurity costs.

Expenses

The company saw a decrease in total operating expenses to $8.6 million from $9.7 million in the prior-year quarter.

However, interest expenses rose to $3.2 million from $2.9 million in fourth-quarter fiscal 2023, further pressuring the bottom line. The company reported a slight tax benefit in fourth-quarter fiscal 2024, which helped mitigate the overall net loss for the full fiscal year.