Key Tronic Corp. announced unaudited consolidated earnings results for the first quarter ended September 26, 2009. For the first quarter of fiscal 2010, the company reported total revenue of $41.3 million, compared to $48.2 million in the same period of fiscal 2009. Net income was $0.3 million or $0.03 per basic and diluted share, compared to $0.4 million or $0.04 per basic and diluted share for the same period of fiscal 2009. Operating income was $0.4 million compared to $0.6 million a year ago. Income before income taxes was $0.33 million compared to $0.46 million a year ago. The company provided earnings guidance for the second quarter of fiscal 2010. For the quarter, the company expects revenue in the range of $38 million to $43 million, with earnings in the range of $0.02 to $0.05 per share.

Key Tronic Corp., Q1 2010 Earnings Call, Oct 27 2009

On August 19, 2009, Key Tronic Corp. entered into a credit agreement and revolving line of credit note each dated as of August 19 2009, between the company and Wells Fargo Bank, N.A. The credit agreement replaces the company�s existing revolving line of credit facility with CIT Group/Business Credit Inc. (CIT). The credit agreement provides a $20 million revolving line of credit facility to provide for working capital and general corporate purpose needs. The credit agreement terminates on August 18, 2011. The line of credit is secured by a first priority, perfected security interest in all present and hereafter acquired accounts receivable, inventory and equipment of company and its domestic subsidiaries and pledge of 65% of the stock of the company�s foreign subsidiaries. At the company�s option, the line of credit bears interest at either the Base Rate or when a Fixed Rate Term is selected, at a fixed rate per annum of 2.10% above LIBOR. The note provides that, if the company�s EBITDA falls below $3.75 million measured quarterly on a trailing four quarter basis, the Fixed Rate Term margin shall be increased from 2.10% to 2.50%. The base rate is, for any day, a fluctuating rate equal to the highest of (i) the prime rate in effect on such day, (ii) a rate determined by the lender to be 1.50% above daily one month LIBOR in effect on such day, and (iii) the Federal Funds Rate plus 1.50%. On the effective date of the credit agreement the company used the line of credit to pay off the existing indebtedness in the amount of $2,112,225.19 owing to CIT under the existing facility. The financial covenants contained in the credit agreement include a maximum ratio of funded debt to EBITDA and a minimum net profit, after payment of all applicable taxes, of not less than $500,000 measured quarterly on a four quarter trailing basis. The credit agreement includes representations and warranties, conditions, affirmative covenants, negative covenants and events of default customary for this type of transaction.