Key Tronic Corporation

Fourth-quarter fiscal 2026 revenue was $102 million, compared with $89.6 million in the prior quarter and $110.5 million in the same period of fiscal 2025. Gross margin was 7.8% versus 6.2% a year ago; adjusted gross margin was 8.3% versus 6.2%. Net loss was $34.3 million, or $3.16 per share, versus a net loss of $3.9 million, or $0.36 per share, in Q4 fiscal 2025. Full-year fiscal 2026 revenue was $386.7 million versus $467.9 million in fiscal 2025; full-year net loss was $47.8 million, or $4.41 per share, versus a loss of $8.3 million, or $0.77 per share. Management said adjusted net loss for fiscal 2026 was $2.9 million, or $0.26 per diluted share, and also cited full-year adjusted net loss of $3.7 million, or $0.34 per diluted share, versus $5 million, or $0.47 per diluted share, in fiscal 2025. The company is not providing first-quarter fiscal 2027 guidance due to uncertainty around the timing of new product ramps, but management expects revenue growth in coming quarters of fiscal 2027 and said China exit savings should total about $4 million in fiscal 2027.

Brett Larsen framed the year as a transformation period, emphasizing the company’s exit from China manufacturing, the right-sizing of Mexico, and expanded capacity in the U.S. and Vietnam. He said these steps improved the cost structure, supply chain flexibility, and customer interest, and he expects revenue to gradually rebound with a return to profitability in fiscal 2027. His tone was constructive and confident, but he repeatedly acknowledged macro uncertainty, liquidity constraints, and delays to some new product ramps.

Tony Voorhees highlighted the hard numbers and the one-time items that distorted reported profitability. He cited the $102 million of Q4 revenue, 7.8% gross margin, 8.3% adjusted gross margin, $34.3 million net loss, and the $28.4 million non-cash valuation allowance against deferred tax assets, plus the $8.4 million receivable write-off and $5.3 million insurance recovery. On the balance sheet, he said inventory was down $1.5 million, current ratio was 2.1:1 versus 2.6:1 a year ago, DSOs improved to 75 days from 86 days, and capex was $2.7 million in Q4 and about $6.4 million for the full year.

Analysts focused on the more than $60 million of new awards, the nature of the company’s capital needs, and the $10 million of delayed shipments. Management broke out the new wins as a $40 million to $45 million per year data center program in Mexico, a $5 million to $10 million construction support program, and a roughly $15 million industrial power management program, with revenue contributions expected mainly in fiscal 2027. On capital, Brett said the company is working with customers on shared working capital and tooling/production-equipment funding, and also looking at financing backed by unencumbered foreign assets. He explained that the $10 million shipment delay was not lost revenue but a shift into a future quarter caused by parts and liquidity constraints.