Key Tronic Ushers In New Era Company To Focus On Broadening Customer Base

Key Tronic Corp., which has now “moved from a turnaround to a new building era,” will focus on broadening its customer base in 1996, according to Board Chairman Stanley Hiller.

“There will inevitably be deviations from a constant growth curve until our customer base is broadened and well balanced, and this we are certainly dedicated to,” Hiller told shareholders at the company’s annual meeting Thursday.

The meeting represented several milestone’s in the company’s evolution as company founder Lewis G. Zirkle’s retirement from Key Tronic’s board of directors was announced.

And Hiller, who has led Key Tronic in a remarkable turnaround over the past three years, introduced Fred Wenninger as Hiller’s successor as chief executive officer. Wenninger also holds the title of president, and Hiller replaced Wendell Satre as board chairman.

“Fred Wenninger completes the transition from past to future,” Hiller said.

The company’s earnings report for the first quarter of fiscal 1996 reflects the deviations from a constant growth curve to which Hiller referred. Key Tronic ended 1995 with strong earnings, and though the first quarter of 1996 showed a profit, those profits declined from the final quarter of fiscal 1995.

The stock market treated the decline with concern. The stock value was up to $16 last July, but has fallen to the $10 range recently.

Hiller said the company’s fortunes are still tied too heavily to the ups and downs of too few major customers.

“Although good progress has been made over the past several years in broadening our customer base, including more recently Microsoft and IBM,” Hiller told the shareholders, “a number of new targets of opportunity exist. Discussions are under way with a number of new accounts to get a broader base for this company to operate under.”

In pursuit of this goal, Hiller said Key Tronic is prepared to “adjust its technical scope and its production capacity” by any means necessary, including acquisitions and mergers, joint ventures and outsourcing.”

Key Tronic has five unannounced joint ventures in progress now, Hiller said. Although no acquisition discussions are currently active, he said the company is always open to the right deal.

Wenninger, who has been on the job since Sept. 1, said he is still in the process of evaluating the company’s strengths and weaknesses, but said Key Tronic will soon broaden its presence in the Pacific Rim.

“We are not as global as we need to be,” Wenninger said. “We have to do some things in the Pacific Rim that we are not now doing, and that will be a major focus in the short term.”

Hiller assured shareholders who have profited from the turnaround he has directed that he has no plans to withdraw from Key Tronic.

“At the moment I have no idea of going into another company,” Hiller said. “I will be chairman of the board as long as the board of directors decides I should be.”

He concluded that Key Tronic has put in place an organization over the past three years that will serve it well in the future.

“By accepting and anticipating the endless surprise phases of our global industry,” he said, “changes will be made before events overtake us. That is the flexibility many American companies have lacked.”

, DataTimes