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Key Tronic Corp (NASDAQ:KTCC), a manufacturer of printed circuit boards, announced Monday it has amended its loan agreement with Bank of America, N.A., effectively extending the maturity date of the loan. The Fifth Amendment to the Loan, Guaranty, and Security Agreement, initially dated August 14, 2020, now carries a new maturity date of December 3, 2025, pushed back from the original date of September 3, 2025.
This extension provides the Spokane, Washington-based company with additional time to meet its loan obligations. The specific terms of the amendment were not fully disclosed, but the company filed the complete amendment as Exhibit 10.1 with the Securities and Exchange Commission (SEC), which is available for public viewing.
The extension of the maturity date may offer Key Tronic more financial flexibility as it continues its operations within the electronic manufacturing services industry. The company's stock is listed on the NASDAQ Global Market, where investors can track its performance.
In other recent news, Key Tronic Corporation reported a decrease in total revenue to $126.7 million in its fourth-quarter fiscal year 2024 results, a significant drop from $162.6 million in the same quarter of the previous year. This decline was largely due to a cybersecurity incident that resulted in $15 million of unfulfilled revenue. Despite this setback, the company improved its gross margin to 9% and operating margin to 2.2%. The company also reported a break-even net income for the quarter and a net loss of $800,000 for the full year.
Looking ahead, Keytronic expects to fulfill most of the delayed orders in fiscal year 2025 and projects revenue in the range of $140 million to $150 million for Q1 of FY2025. In other developments, the company has outlined new compensation structures and performance goals for its executives for fiscal year 2025, including incentive payments under the company's incentive compensation plan.
InvestingPro Insights
Key Tronic's recent loan amendment comes amid a challenging financial landscape for the company. According to InvestingPro data, Key Tronic's revenue for the last twelve months as of Q4 2024 stood at $559.4 million, with a revenue growth decline of 4.89% over the same period. This context underscores the importance of the loan extension, potentially providing the company with much-needed financial flexibility.
InvestingPro Tips highlight that Key Tronic is currently trading at a low Price / Book multiple of 0.46, which could indicate that the stock is undervalued relative to its assets. This might be of interest to value investors considering the company's recent financial maneuvers. Additionally, the company has shown a strong return over the last three months, with a price total return of 47.42% as of the latest data.
It's worth noting that Key Tronic's gross profit margin is relatively weak at 7.51%, which aligns with the InvestingPro Tip suggesting the company suffers from weak gross profit margins. This could explain the company's need for extended financial arrangements and may be a point of focus for management moving forward.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Key Tronic, providing a deeper understanding of the company's financial health and market position.
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