Key Tronic Corporation Announces Expansion of Production Capacity in Arkansas and Vietnam to Meet Growing Customer Demand

Key Tronic Corporation plans to expand production in Arkansas and Vietnam to meet rising customer demand and mitigate tariffs.

Quiver AI Summary

Key Tronic Corporation announced plans to significantly expand its production capacity in Arkansas and Vietnam to meet increasing customer demand for contract manufacturing. The expansion aims to counteract potential negative effects from recently imposed tariffs on imports from China and Mexico. In Arkansas, the company has secured a new lease to enlarge its manufacturing space by June 2025, while in Vietnam, it plans to double its capacity by September 2025 through substantial investment in equipment. CEO Brett Larsen highlighted that the initiatives reflect a trend towards nearshoring production away from China, enhancing both flexibility and cost-effectiveness for customers. Further details on the expansions are expected in the coming months.

Potential Positives

• Key Tronic Corporation plans to significantly increase production capacity in Arkansas and Vietnam, responding to growing customer demand for contract manufacturing services.
• The expansion aims to mitigate potential adverse impacts and uncertainties related to tariffs on goods manufactured in China and Mexico.
• The company is investing in capital equipment to double its manufacturing capacity in Vietnam by September 2025.
• Customers have expressed excitement about the plans, indicating a positive response and potential for increased business opportunities.

Potential Negatives

• Expansion plans may be heavily contingent on customer demand and external factors, which introduces uncertainty and risk to the company's future production capabilities.
• Reference to a previous cybersecurity incident and ongoing internal investigation by the Audit Committee raises concerns about operational integrity and potential legal risks.
• The mention of previously reported financial statement restatements and related material weaknesses could undermine investor confidence in the company’s financial practices.

FAQ

What is Key Tronic Corporation planning to expand?

Key Tronic Corporation plans to significantly increase its manufacturing capacity in Arkansas and Vietnam.

Why is Key Tronic expanding production capacity?

The expansion aims to meet growing customer demand and mitigate the impact of tariffs on goods manufactured in China and Mexico.

When will the new manufacturing footprint in Arkansas be operational?

The new manufacturing footprint in Arkansas is expected to be operational by June 2025.

How much will Key Tronic increase its manufacturing capacity in Vietnam?

Key Tronic plans to double its manufacturing capacity in Vietnam by September 2025.

What benefits does US-based production offer Key Tronic's customers?

US-based production provides customers with flexibility, engineering support, and ease of communication.

Disclaimer: This is an AI-generated summary of a press release distributed by GlobeNewswire. The model used to summarize this release may make mistakes. See the full release here.

$KTCC Insider Trading Activity

$KTCC insiders have traded $KTCC stock on the open market 1 times in the past 6 months. Of those trades, 1 have been purchases and 0 have been sales.

Here’s a breakdown of recent trading of $KTCC stock by insiders over the last 6 months:

• CHERYL BERANEK purchased 2,000 shares for an estimated $9,166

To track insider transactions, check out Quiver Quantitative's insider trading dashboard.

$KTCC Hedge Fund Activity

We have seen 11 institutional investors add shares of $KTCC stock to their portfolio, and 9 decrease their positions in their most recent quarter.

Here are some of the largest recent moves:

• MORGAN STANLEY removed 75,225 shares (-4.0%) from their portfolio in Q3 2024, for an estimated $430,287
• LAIRD NORTON WETHERBY TRUST COMPANY, LLC added 73,000 shares (+inf%) to their portfolio in Q3 2024, for an estimated $417,560
• RENAISSANCE TECHNOLOGIES LLC added 13,000 shares (+28.7%) to their portfolio in Q3 2024, for an estimated $74,360
• KENNEDY CAPITAL MANAGEMENT LLC added 11,654 shares (+9.9%) to their portfolio in Q3 2024, for an estimated $66,660
• VIRTU FINANCIAL LLC added 10,972 shares (+inf%) to their portfolio in Q3 2024, for an estimated $62,759
• TIETON CAPITAL MANAGEMENT, LLC removed 10,513 shares (-1.7%) from their portfolio in Q3 2024, for an estimated $60,134
• LPL FINANCIAL LLC removed 10,151 shares (-100.0%) from their portfolio in Q3 2024, for an estimated $58,063

To track hedge funds' stock portfolios, check out Quiver Quantitative's institutional holdings dashboard.

Full Release

SPOKANE VALLEY, Wash., Feb. 04, 2025 (GLOBE NEWSWIRE) --

Key Tronic Corporation

(Nasdaq KTCC), a world class provider of manufacturing and design engineering services, today announced that it plans to significantly increase production capacity in Arkansas and Vietnam in order to continue to benefit from the growing customer demand for rebalancing their contract manufacturing. This expansion is also expected to help mitigate the adverse impact and uncertainties surrounding the recently announced tariffs on goods manufactured in China and Mexico.

In Arkansas, the Company has signed a new lease to significantly increase the size of its current manufacturing footprint by June 2025. In Vietnam, Key Tronic has ample space in its current facility and plans to double its manufacturing capacity by September 2025 with a significant investment in capital equipment.

“Our customers are very excited about our plans to increase our production capacity capabilities in the US and in Vietnam,” said Brett Larsen, President and CEO of Key Tronic Corporation. “These initiatives reflect the longstanding trend to nearshore production away from China, and may also help address the potential adverse impact of tariff increases. Our US-based production provides customers with outstanding flexibility, engineering support, and ease of communications, and our Vietnam-based production offers the high-quality, low-cost choice that was associated with China in the past. In the coming months, we’ll have more to say about these expansions.”

About Key Tronic

Key Tronic is a leading design engineering and contract manufacturer offering value-added design and manufacturing services from its facilities in the United States, Mexico, China and Vietnam. Key Tronic provides its customers full engineering services, materials management, worldwide manufacturing facilities, assembly services, in-house testing, and worldwide distribution. Its customers include some of the world’s leading original equipment manufacturers. For more information about Key Tronic visit:

www.keytronic.com

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Forward-Looking Statements

Some of the statements in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including Key Tronic’s opportunities and its partnership, the potential success of Key Tronic and the customer, and related revenues. Forward-looking statements include all passages containing verbs such as aims, anticipates, believes, estimates, expects, hopes, intends, plans, predicts, projects or targets or nouns corresponding to such verbs.  Forward-looking statements also include other passages that are primarily relevant to expected future events or revenue or that can only be fully evaluated by events that will occur in the future.  There are many factors, risks and uncertainties that could cause actual results to differ materially from those predicted or projected in forward-looking statements, including but not limited to: the success and timing of our expansion plans; the success and timing of ramping; availability and timing and receipt of critical parts or components; demand from customers and sales channels; the future of the global economic environment and its impact on our customers and suppliers; the availability of a healthy workforce; the accuracy of suppliers’ and customers’ forecasts; development and success of customers’ programs and products; success of new-product introductions; the risk of legal proceedings or governmental investigations relating to the previously reported financial statement restatements and related material weaknesses, the May 2024 cybersecurity incident and the subject of the internal investigation by the Company’s Audit Committee and related or other unrelated matters; acquisitions or divestitures of operations or facilities; technology advances; changes in pricing policies by the Company, its competitors, customers or suppliers; impact of new governmental legislation and regulation, including tax reform, tariffs and related activities, such trade negotiations and other risks; and other factors, risks, and uncertainties detailed from time to time in the Company’s SEC filings.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.