8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported) October 28, 2003

Key Tronic Corporation

(Exact Name of Registrant as Specified in Charter)

Washington (State or Other Jurisdiction of Incorporation) 0-11559 (Commission File Number) 91-0849123 (IRS Employer Identification No.)

4424 North Sullivan Road, Spokane, Washington (Address of Principal Executive Offices) 99216 (Zip Code)

Registrant’s telephone number, including area code (509) 928-8000

(Former Name or Address, if Changed Since Last Report)

ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On October 28, 2003, Key Tronic Corporation issued a press release announcing its financial results for the quarter ended September 27, 2003. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information in this Form 8-K including the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section and shall not be deemed incorporated by reference into any filing of Key Tronic Corporation under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as set forth by specific reference in such a filing.

SAFE HARBOR STATEMENT. Statements contained in the Exhibit to this report that state Key Tronic Corporation’s or its management’s expectations or predictions of the future are forward-looking statements intended to be covered by the safe harbor provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. Key Tronic Corporation’s actual results could differ materially from those projected in such forward-looking statements. Factors that could affect those results include those mentioned in the documents that Key Tronic Corporation has filed with the Securities and Exchange Commission.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: October 28, 2003.

KEY TRONIC CORPORATION
By:	/s/     Ronald F. Klawitter
	Ronald F. Klawitter Executive Vice President of Administration and Treasurer

EXHIBIT INDEX

EXHIBIT NUMBER	DESCRIPTION
99.1	Press Release, dated October 28, 2003

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

CONTACTS:	Ron Klawitter	Michael Newman
	Chief Financial Officer Key Tronic Corporation (509) 927-5295	Investor Relations StreetConnect (206) 729-3625

KEY TRONIC CORPORATION ANNOUNCES FIRST QUARTER RESULTS

Preparing for Growth in Second Half of Fiscal 2004

Spokane, WA—October 28, 2003—Key Tronic Corporation (Nasdaq: KTCC), a provider of electronic manufacturing services (EMS), today announced its results for the quarter ended September 27, 2003.

For the first quarter of fiscal 2004, Key Tronic reported total revenue of $34.7 million, compared to $35.7 million in the previous quarter and $34.0 million for the first quarter of fiscal 2003. Net income for the first quarter of fiscal 2004 was $20,000 or $0.00 per share, compared to $551,000 or $0.06 per share in the previous period and $12.5 million or $1.29 per share for the first quarter of fiscal 2003. Net income for the first quarter of fiscal 2003 included a benefit of $12.2 million or $1.26 per share from a litigation settlement, which related to a charge of $24.7 million or ($2.55) per share for a litigation judgment and associated tax expense in fiscal 2002.

“As we move into fiscal 2004, we are gradually booking new business, continuing to focus on controlling our costs and expanding our manufacturing capacity in preparation for future growth,” said Jack Oehlke, President and Chief Executive Officer. “Despite the worldwide economic challenges for our industry, we established new customer relationships in the first quarter involving specialty printer components and computer accessories.”

“Our ability to offer an exceptional range of capabilities, competitive pricing, global logistics and responsive customer service continues to help us win new business. In the second quarter, we expect revenue in the range of $31 million to $34 million, and near breakeven results. We anticipate growing revenue and earnings in the second half of fiscal 2004, when a number of our new programs move from the design and development stage into full production.”

Key Tronic will host a conference call today to discuss its financial results at 2:00 PM Pacific (5:00 PM Eastern). A broadcast of the conference call will be available at www.keytronic.com under “Investor Relations” or by calling 800-218-0713 or +1 303-262-2050 (Reservation No. 554971). A 48-hour replay will be available by calling 800-405-2236 or +1 303-590-3000 (Reservation No. 554971). A replay will also be available on the Company’s Web site.

About Key Tronic

Key Tronic is a leading contract manufacturer offering value-added design and manufacturing services from its facilities in the United States, Mexico, Ireland and China. The Company 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.

Some of the statements in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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 that can only be fully evaluated by events that will occur in the future. Forward-looking statements in this release include, without limitation, the Company’s statements regarding its expectations with respect to quarterly revenue and earnings during fiscal 2004. 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 accuracy of customers’ forecasts; success of customers’ programs; timing of new programs; success of new-product introductions; technology advances; changes in pricing policies by the Company, its competitors or customers; and the other risks and uncertainties detailed from time to time in the Company’s SEC filings.

KEY TRONIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	First Quarters Ended
	September 27 2003			September 28 2002
Net sales	$	34,652		$	34,034
Cost of sales		31,236			30,528
Gross profit on sales		3,416			3,506
Operating expenses:
Research, development and engineering		700			710
Selling		508			467
General and administrative		1,764			1,794
Total operating expenses		2,972			2,971
Operating income		444			535
Interest expense		258			238
Litigation settlement		—			(12,186	)
Other income		(7	)		(235	)
Income before income taxes		193			12,718
Income tax provision		173			239
Net income	$	20		$	12,479
Earnings per share:
Earnings per common share—basic and diluted	$	0.00		$	1.29
Weighted average shares O/S—basic		9,673			9,673
Weighted average shares O/S—diluted		9,775			9,673

KEY TRONIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

	September 27 2003			June 29 2003
ASSETS
Current Assets:
Cash and cash equivalents	$	621		$	956
Trade receivables—net		20,448			17,078
Inventories		22,275			24,151
Other		2,444			2,050
Total current assets		45,788			44,235
Property, plant and equipment at cost		86,615			86,469
Less accumulated depreciation		75,007			74,487
Total property, plant and equipment		11,608			11,982
Other Assets:
Restricted cash		759			1,142
Other—net		957			1,001
Goodwill—net		765			765
Total other assets		2,481			2,908
Total Assets	$	59,877		$	59,125
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Current portion of long term obligations	$	600		$	730
Accounts payable		15,898			13,145
Accrued compensation and vacation		4,277			4,213
Litigation settlement		823			1,124
Other		2,225			3,240
Total current liabilities		23,823			22,452
Long-Term Liabilities:
Revolving loan		9,497			9,864
Litigation settlement		2,370			2,593
Other		1,047			1,096
Total long-term liabilities		12,914			13,553
Shareholders’ Equity:
Common stock, no par value, authorized 25,000 shares; issued and outstanding 9,673 and 9,673 shares		38,393			38,393
Retained deficit		(15,253	)		(15,273	)
Total shareholders’ equity		23,140			23,120
Total Liabilities and Shareholders’ Equity	$	59,877		$	59,125