Key Tronic Corp. (KTCC, Financial) filed Quarterly Report for the period ended 2010-10-02.
Key Tronic Corp. has a market cap of $65 million; its shares were traded at around $6.29 with a P/E ratio of 8.1 and P/S ratio of 0.3. KTCC is in the portfolios of Jim Simons of Renaissance Technologies LLC.
We maintain a strong balance sheet with a current ratio of 2.53 and a long-term debt to equity ratio of 0.18. Total cash used in operating activities as defined on our cash flow statement was $7.5 million during the three months ended October 2, 2010. We maintain sufficient liquidity for our expected future operations and had $11.1 million in borrowings on our $20.0 million revolving line of credit with Wells Fargo, N.A. of which $8.9 million remained available at October 2, 2010. Subsequent to the quarter ended October 2, 2010 we increased our revolving line of credit with Wells Fargo to $30 million. We believe cash flow generated from operations, our borrowing capacity, and equipment lease financing should provide adequate capital for planned growth over the long term.
In the first quarter of fiscal 2011, we continued to ramp up our new customer programs and further diversified our customer portfolio across a wide range of industries. Despite the macroeconomic uncertainty, we remain strongly positioned to win new business and currently expect to see growth in the second half of our fiscal year, driven by increased production levels of new programs for both new and longstanding customers. Sales in the second quarter of fiscal year 2011 are expected to be in the range of $61 million to $64 million and net sales for the full year are expected to be in the range of $270 million to $280 million. Future results will depend on actual levels of customers orders, the timing of the start up of production of new product programs and the impact of the industry-wide shortages in the global supply chain. We believe that we are well positioned in the EMS industry to continue expansion of our customer base and continue long-term growth.
Total selling general and administrative (SG&A) expenses were $2.4 million and $1.7 million during the first quarters of fiscal years 2011 and 2010, respectively. This $0.7 million increase in SG&A during the first quarter of fiscal year 2011 as compared with the first quarter of fiscal 2010 is primarily related to a $0.4 million increase in incentive compensation, a $0.2 million increase is professional fees, and a $0.1 million increase in labor costs.
Total research, development, and engineering (RD&E) expenses were $0.9 million and $0.6 million during the first quarters of fiscal years 2011 and 2010, respectively. This $0.3 million increase is primarily related to $0.2 million and $0.1 million increases in labor costs and incentive compensation costs, respectively.
On a comparative year-to year basis, the $11.4 million decrease in cash flows provided by operating activities during the three months ended October 2, 2010 as compared with the three months ended September 26, 2009 resulted primarily from a $6.0 million increase in inventory and a $1.1 million decreases in accounts payable during the three months ended October 2, 2010. Whereas during the three months ended September 26, 2009 inventory decreased
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Key Tronic Corp. has a market cap of $65 million; its shares were traded at around $6.29 with a P/E ratio of 8.1 and P/S ratio of 0.3. KTCC is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Net income for the three months ended October 2, 2010 was $1.7 million or $0.17 per diluted share, up from $0.3 million or $0.03 per diluted share for the three months ended September 26, 2009. The increase in net income for three months ended October 2, 2010 as compared to the same period in fiscal year 2010 was primarily due to an approximate 2.9 percentage point improvement in our gross margin, primarily resulting from a 53.3 percent increase in net sales.We maintain a strong balance sheet with a current ratio of 2.53 and a long-term debt to equity ratio of 0.18. Total cash used in operating activities as defined on our cash flow statement was $7.5 million during the three months ended October 2, 2010. We maintain sufficient liquidity for our expected future operations and had $11.1 million in borrowings on our $20.0 million revolving line of credit with Wells Fargo, N.A. of which $8.9 million remained available at October 2, 2010. Subsequent to the quarter ended October 2, 2010 we increased our revolving line of credit with Wells Fargo to $30 million. We believe cash flow generated from operations, our borrowing capacity, and equipment lease financing should provide adequate capital for planned growth over the long term.
In the first quarter of fiscal 2011, we continued to ramp up our new customer programs and further diversified our customer portfolio across a wide range of industries. Despite the macroeconomic uncertainty, we remain strongly positioned to win new business and currently expect to see growth in the second half of our fiscal year, driven by increased production levels of new programs for both new and longstanding customers. Sales in the second quarter of fiscal year 2011 are expected to be in the range of $61 million to $64 million and net sales for the full year are expected to be in the range of $270 million to $280 million. Future results will depend on actual levels of customers orders, the timing of the start up of production of new product programs and the impact of the industry-wide shortages in the global supply chain. We believe that we are well positioned in the EMS industry to continue expansion of our customer base and continue long-term growth.
Total selling general and administrative (SG&A) expenses were $2.4 million and $1.7 million during the first quarters of fiscal years 2011 and 2010, respectively. This $0.7 million increase in SG&A during the first quarter of fiscal year 2011 as compared with the first quarter of fiscal 2010 is primarily related to a $0.4 million increase in incentive compensation, a $0.2 million increase is professional fees, and a $0.1 million increase in labor costs.
Total research, development, and engineering (RD&E) expenses were $0.9 million and $0.6 million during the first quarters of fiscal years 2011 and 2010, respectively. This $0.3 million increase is primarily related to $0.2 million and $0.1 million increases in labor costs and incentive compensation costs, respectively.
On a comparative year-to year basis, the $11.4 million decrease in cash flows provided by operating activities during the three months ended October 2, 2010 as compared with the three months ended September 26, 2009 resulted primarily from a $6.0 million increase in inventory and a $1.1 million decreases in accounts payable during the three months ended October 2, 2010. Whereas during the three months ended September 26, 2009 inventory decreased
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