Key Tronic Corp. recently obtained a line of credit that will aid in the company’s anticipated growth and provide more flexibility to ramp up production.
The Spokane Valley-based contract design and manufacturing services provider entered a $93 million loan and security agreement with Bank of America, the company announced Monday.
The loan was used to pay off a prior credit agreement with Wells Fargo Bank. The remainder of funds may be used to pay off other existing debt and to fund capital needs, according to a company release.
Key Tronic may increase the loan amount by an additional $25 million, subject to bank approval and other conditions, the release said.
Key Tronic has generated “strong and encouraging tailwinds” in its 2020 fiscal year as uncertainty from tariffs and trade tension between the U.S. and China, combined with disruptions caused by COVID-19 encouraged, customers to opt for a shared mix of China-based and localized supply chains, according to an Aug. 4 investor call.
“COVID-19 so far is a net positive to our business. Our focus on medical products over the past years resulted in a net gain in revenue as the virus drove demand, more than offsetting the decline in other COVID-affected businesses,” Craig Gates, Key Tronic’s president and CEO, said in the investor call.
The company, during its fiscal year, obtained new business from customers with programs involving sanitizer dispensing, automotive controllers, wireless security, electric vehicle charging infrastructure, aircraft flight controls and home exercise equipment, among other things, Gates said.
The company intends to continue investing in expansion of sheet metal and plastic molding capabilities in its U.S. and Mexico production facilities as well as ramping up production at its 86,000-square-foot manufacturing facility in Vietnam.
Key Tronic is also manufacturing face masks and high-end respirators in its Corinth, Mississippi, and Oakdale, Minnesota, facilities, respectively.