Key Tronic Corporation reported a decrease in revenue for Q4 and fiscal year 2025, attributing it to reduced demand and tariff disruptions.
To align costs with demand, the company cut jobs and focused on automation, leading to improved competitiveness.
Key Tronic is expanding its manufacturing footprint with a new US facility and increased capacity in Vietnam to support near-shoring strategies.
Revenue Impact
Total revenue for Q4 and FY 2025 declined due to reduced demand and delays caused by global tariffs fluctuations.
Cost Reduction Measures
Key Tronic cut approximately 300 jobs in Q4 2025 and reduced 800 jobs in FY 2025 to align costs with customer demand.
Cash Flow and Margins
Cash flow from operations increased in Q4 and FY 2025, allowing debt reduction. Gross margin decreased in Q4 but improved year-over-year.
Operational Efficiency
Operational efficiencies from workforce reductions contributed to the increase in gross margin, with further improvements expected in FY 2026.
Net Losses
Net losses increased in Q4 and FY 2025 primarily due to reduced revenue, increased severance expenses, and adjustments for estimated collections from customers.
- Key Tronic expects long-term growth and profitability despite revenue declines in FY 2025.
- The company's measures to align costs and boost automation have improved competitiveness for new program bids.
- Expansion of manufacturing facilities in the US and Vietnam supports near-shoring and tariff mitigation strategies.
Key Tronic Corporation remains focused on enhancing operational efficiencies and expects improvements in margins and revenue in the upcoming fiscal year. The company's near-shoring and tariff mitigation strategies position it for long-term growth and competitiveness.