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) August 24, 2004

Key Tronic Corporation

(Exact name of registrant as specified in its charter)

Washington	0-11559	91-0849123
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

4424 North Sullivan Road, Spokane Valley, Washington	99216
(Address of principal executive offices)	(Zip Code)

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

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provision (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On August 24, 2004, Key Tronic Corporation issued a press release announcing its financial results for the quarter and year ended July 3, 2004. 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.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(c) Exhibits

Exhibit Number	Description
99.1	Press Release dated August 24, 2004

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.

		KEY TRONIC CORPORATION
		(Registrant)
Date: August 24, 2004
	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 August 24, 2004

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

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

KEY TRONIC CORPORATION ANNOUNCES

FOURTH QUARTER AND YEAR-END 2004 RESULTS

Quarterly Revenue Up 24% Year-over-Year

and Up 19% from the Previous Quarter

Spokane, WA—August 24, 2004—Key Tronic Corporation (Nasdaq: KTCC), a provider of electronic manufacturing services (EMS), today announced its results for the quarter and fiscal year ended July 3, 2004.

For the fourth quarter of fiscal 2004, Key Tronic reported total revenue of $44.4 million, up 19% from $37.3 million in the previous quarter and up 24% from $35.7 million for the fourth quarter of fiscal 2003. For fiscal 2004, total revenue was $148.9 million, up 14% from $130.9 million in fiscal 2003. Net income for the fourth quarter of fiscal 2004 was $265,000 or $0.03 per share, compared to $112,000 or $0.01 per share in the previous period and $551,000 or $0.06 per share for the fourth quarter of fiscal 2003.

“We are pleased with our continued revenue growth in the fourth quarter, a result of the solid execution of our growth strategy throughout fiscal 2004,” said Jack Oehlke, President and Chief Executive Officer. “During the year, we achieved our strategic goals of diversifying our customer base, penetrating deeper into existing customer accounts, increasing our revenues, expanding our capacity, controlling our costs and returning to profitability. Our strong growth in the fourth quarter was primarily driven by increased production on programs for established customers involving consumer products, gaming technology and specialty printer accessories.”

“The trend towards outsourcing continues to strengthen demand for EMS services worldwide and for our exceptional range of capabilities. Moving into fiscal 2005, we believe our sustained investments in our facilities in both Mexico and China have given us the production capacity and logistical advantages to help us continue to win new business. In the first quarter of fiscal 2005, we expect sequential revenue growth in the range of 5% to 15% and earnings in the range of $0.03 to $0.06 per share. We are pleased with our progress and excited about the opportunities ahead.”

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 800-218-8862 or +1 303-262-2131. A 48-hour replay will be available by calling 800-405-2236 or +1 303-590-3000 (Reservation No. 11004238). 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 2005. 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)

	Fourth Quarters Ended					Twelve Months Ended
	July 3 2004		June 28 2003			July 3 2004			June 28 2003
Net sales	$	44,366	$	35,664		$	148,901		$	130,894
Cost of sales		40,807		31,473			135,664			115,936
Gross profit on sales		3,559		4,191			13,237			14,958
Operating expenses:
Research, development and engineering		657		704			2,583			2,913
Selling		555		682			1,900			2,250
General and administrative		1,697		1,758			6,965			7,183
Total operating expenses		2,909		3,144			11,448			12,346
Operating income		650		1,047			1,789			2,612
Interest expense		296		266			1,091			1,026
Litigation settlement		—		—			—			(12,186	)
Other (income) expense		—		(1	)		(23	)		(237	)
Income before income taxes		354		782			721			14,009
Income tax provision		89		231			611			600
Net income	$	265	$	551		$	110		$	13,409
Earnings per share:
Earnings per common share - basic and diluted	$	0.03	$	0.06		$	0.01		$	1.39
Weighted average shares O/S - basic		9,675		9,673			9,673			9,673
Weighted average shares O/S - diluted		10,007		9,714			9,793			9,673

KEY TRONIC CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

	July 3 2004			June 28 2003
ASSETS
Current Assets:
Cash and cash equivalents	$	600		$	956
Trade receivables - net		24,439			17,078
Inventories		27,848			24,151
Other		1,833			2,050
Total current assets		54,720			44,235
Property, plant and equipment, net		11,131			11,982
Other Assets:
Restricted cash		705			1,142
Other - net		617			1,001
Goodwill - net		765			765
Total other assets		2,087			2,908
Total Assets	$	67,938		$	59,125
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Current portion of long term obligations	$	606		$	730
Accounts payable		24,354			13,145
Accrued compensation and vacation		4,015			4,213
Litigation settlement		925			1,124
Other		1,352			3,240
Total current liabilities		31,252			22,452
Long-Term Liabilities:
Revolving loan		10,851			9,864
Litigation settlement		1,536			2,593
Other		1,065			1,096
Total long-term liabilities		13,452			13,553
Shareholders’ Equity:
Common stock, no par value, authorized 25,000 shares; issued and outstanding 9,676 and 9,673 shares		38,397			38,393
Retained deficit		(15,163	)		(15,273	)
Total shareholders’ equity		23,234			23,120
Total Liabilities and Shareholders’ Equity	$	67,938		$	59,125