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Key Tronic (KTCC) investor relations material
Key Tronic Q2 2026 earnings summary
Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.Executive summary
Q2 FY2026 revenue was $96.3M, down from $113.9M year-over-year, mainly due to reduced demand from longstanding customers, program transitions, and delayed launches; gross margin fell to 0.6% from 6.8% year-over-year.
Strategic initiatives included winding down China manufacturing, right-sizing Mexico operations, and ramping up U.S. and Vietnam facilities to mitigate tariffs and geopolitical risks, with $10.5M in related charges.
New program launches in automotive, pest control, and industrial equipment, with significant investments in Arkansas and Vietnam facilities.
Adjusted net income for Q2 FY2026 was break-even, compared to an adjusted net loss of $4.1M last year.
Positive operating cash flow of $6.3M in Q2 FY2026, up from $1.3M year-over-year.
Financial highlights
Q2 FY2026 net loss was $8.6M ($0.79/share) vs. $4.9M ($0.46/share) year-over-year; six-month net loss was $10.8M ($1.00/share) vs. $3.8M ($0.35/share) prior year.
Adjusted gross margin for Q2 FY2026 was 7.9%, up from 6.8% year-over-year, reflecting exclusion of one-time charges.
Q2 operating margin was -10.7%, impacted by restructuring charges.
Operating cash flow for the six months was $14.0M, up from $11.5M year-over-year.
Debt reduced by $13.4M year-over-year.
Outlook and guidance
No forward-looking guidance for Q3 FY2026 due to macroeconomic uncertainty and timing of new program ramps.
Management expects revenue to gradually rebound and a return to profitability by end of FY2026, with anticipated break-even net income driven by new programs and cost savings.
Expect continued growth in U.S. and Vietnam production, with double-digit growth anticipated in Arkansas and major expansion in Vietnam.
Backlog as of December 27, 2025 was $139.1M, expected to increase with recent program wins.
The company expects to maintain sufficient liquidity for at least the next 12 months.
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