Key Tronic Corp. reported a decline in net income in the company’s third fiscal quarter, but expects a rebound later in the year.
The Spokane Valley-based company reported a loss of more than $12 million – or $1.11 a share – in net income during its third quarter, compared with net income of $0.6 million in its third quarter of 2018.
The company indicated revenue in its third fiscal quarter of 2019 was “adversely impacted by reduced orders from two large, longstanding customers,” according to a company release.
One customer lowered its inventory in the third quarter, while a second customer is managing inventory as it transitions production from Key Tronic’s facilities in China to Mexico, the company said in a statement.
“While we were significantly impacted by the unanticipated decline in demand from two large customers, we expect both of these new programs to rebound and contribute significant revenue in the fourth quarter,” Craig Gates, president and CEO, said in a statement.
Key Tronic reduced its workforce by 10% because of strategic investments, resulting in a severance charge of $1.1 million in the third quarter of 2019.
Key Tronic is a contract manufacturer with facilities in the U.S., Mexico, China and Vietnam.
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