Spokane Valley-based electronic manufacturing services company Key Tronic Corp. has reported record annual revenue for fiscal year 2023, with sales totaling $588.1 million, an 11% increase compared with year- earlier revenue.

For the full fiscal year which ended on July 1, 2023, net income was $5.2 million, or 47 cents per share, which is up 53% from $3.4 million, or 31 cents per share for 2022.

Craig D. Gates, Key Tronic president and CEO, attributes the revenue increase to the ongoing trend of companies leaving China.

“Throughout the year, we continued to see a favorable trend of contract manufacturing returning to North America and a growing number of potential customers evaluating a migration of their China-based manufacturing to our facility in Vietnam,” says Gates. 

The company continued to expand its customer base in the fourth quarter and won new programs involving inventory control, clean energy, and distribution monitoring equipment, he adds.

For the fourth quarter ended July 1, the company reported total revenue of $162.6 million, up 29% from $126.2 million in the year-earlier quarter.

Fourth-quarter net income was $1.1 million, or 10 cents a share, up from $1 million, or nine cents a share, for the year-earlier quarter.

“We predicted this years ago,” says Gates. “(That) the fashion and momentum to just blindly go to China was going to get reversed, and it certainly has.”

Matt Dhane, portfolio manager for Yakima, Washington-based Tieton Capital Management LLC, says that in addition to its Vietnam facility, the company’s U.S.-based facilities also have gained in production from the shift.

Dhane keeps a close watch on Key Tronic as it has been a portfolio holding for Tieton since the firm’s inception in 2005. He notes that Key Tronic has done many things right to prepare itself for this manufacturing shift away from China.

“(Key Tronic) has caught a nice tailwind and new business as well from this trend,” he says. “The move away will continue for years and years to come.”

As of Sept. 25, the share price for Key Tronic stock (Nasdaq: KTCC) closed at $4.35, up from a 52-week low of $4 but below its 52-week high of $7.53.

As reported by the Journal earlier this year, the Spokane Valley-based company has been on the receiving end of a tenfold increase in contract bidding opportunities as many companies—prompted by production delays, rising costs, and tensions with China—are pulling business out of the country.

Headquartered at 4424 N. Sullivan Road, the company employed 289 people in Spokane Valley as of April, according to the Journal’s most recent list of Leading Spokane-Area Manufacturers.