Key Tronic Q1 FY27: Gross Margin Collapses to 2.5%, Net Loss Widens to $7.5M on Liquidity Crunch
KTCC is trading near its 52-week low of $2.04 (2.0% above the low).
Summary
Key Tronic's Q1 FY27 revenue held at $98.7M but gross margin collapsed to 2.5% and the net loss widened to $(7.5)M as supply chain financing constraints delayed about $18M of shipments. Backlog jumped 76% to $245.9M and the company says it is exploring new capital sources.
Key Events · Earnings and Guidance · KTCC
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Q1 FY27 Revenue Flat at $98.7M
Revenue of $98.7M compared to $98.8M in the same period of fiscal 2026, held back by roughly $18M of shipments delayed by supply chain financing constraints, mostly in Mexico and US programs.
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Gross Margin Collapses to 2.5%
Gross margin fell to 2.5% from 8.4% a year ago (adjusted 4.2% vs 9.6%), driven by production delays, higher material costs, about $6M of zero-margin inventory sales and $4.7M of manufacturing cost variances charged to cost of goods sold.
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Net Loss Widens to $(7.5)M
Net loss of $(7.5)M or $(0.69) per share versus $(2.3)M or $(0.21) a year ago; adjusted net loss was $(7.9)M or $(0.72) per diluted share. Operating loss was $(4.1)M after a $3.2M insurance recovery on the Mississippi roof.
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Backlog Up 76% to $245.9M
Backlog reached $245.9M, up 76% from the same period last year, and new program wins in utilities power management, waste management, data centers, construction and defense represent more than $60M in potential annual revenue.
Analysis · KTCC · Manufacturing
Revenue was flat at $98.7M, but profitability broke down: gross margin fell to 2.5% from 8.4% and the net loss widened to $(7.5)M from $(2.3)M. Management blames tightening credit across the supply chain, which delayed roughly $18M of shipments and left excess labor and $4.7M of manufacturing cost variances stranded in cost of goods sold. The offsetting story is demand: backlog is $245.9M, up 76% year over year, and new program wins represent more than $60M of potential annual revenue. The company says it is exploring new sources of capital — with $1.6M of cash against $108.8M of debt, that is the real question, and management declined to give Q2 guidance.
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At the time of this filing, KTCC was trading at $2.08 on NASDAQ in the Manufacturing sector, with a market capitalization of approximately $23M. The 52-week trading range was $2.04 to $4.42. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.