FARMINGDALE, NY -- Cemtrex today issued its latest volley in a back-and-forth with Key Tronic, the EMS company it says it wants to buy.

In response to a Sept. 15 press release from Key Tronic, in which the company dissected the reasons for not accepting Cemtrex's assertions on why a merger would be beneficial, Cemtrex said it "stands by the facts" it presented in its own press release on Sept. 13. Further, the would-be suitor attempted to "refute the contentions" made by Key Tronic.

“As Key Tronic’s management team has stated in its last release, Key Tronic looks at its business as ‘mature.’ Their belief that its business has a limited opportunity for growth is apparent when looking at its financial performance over the past year or even last few years. Cemtrex has a much different view of the market and the opportunity for Key Tronic’s business. We see a path to achieve higher margins and greater exposure in the global markets to higher value electronic manufacturing services for our customers as a combined business. We believe our proposal is compelling and we look forward to discussing it with the shareholders of both Key Tronic and Cemtrex,” stated Saagar Govil, chairman and CEO of Cemtrex.

In its latest announcement, Cemtrex said its proposed exchange offer will be made once the filing is declared effective by the SEC. Key Tronic has noted its has seen no written offer of Cemtrex's interest filed with the SEC.

Cemtrex also boosted its management experience, touted cross-marketing opportunities through Cemtrex’s "diverse customer base in high margin industries," and said it would achieve cost savings by "removing Key Tronic’s public company expenses and consolidating advisory costs." It's not clear how the latter would be accomplished as both firms are publicly traded.

Cemtrex also took aim at Key Tronic’s executive compensation, noting its five officers received approximately $3.4 million in compensation for 2016, approximately 12% of Key Tronic’s total operating expenses, and complained that Key Tronic's officers aren't buying shares in the open market. It called Key Tronic's questions over Cemtrex's accounting practices "an irrelevant diversion."

Finally, Cemtrex says that Key Tronic's ignorance of Cemtrex is a feature, not a bug, that owes to the former's more strategic geographical and end-market positioning. "Cemtrex suspects that the reason Key Tronic has never encountered Cemtrex is because Key Tronic is not competing in the growth markets in which Cemtrex is currently focused. Cemtrex is focused on higher-end clients in the EMS market space with customers needing more advanced electronics, as compared to Key Tronic’s low-margin customers."

Key Tronic has not yet responded to the latest comments from Cemtrex.

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