SPOKANE VALLEY, WA -- Key Tronic Corp. today announced revenues rose 8.5% sequentially and fell 4.7% year-over-year for the quarter ended Dec. 26.

For its fiscal 2010 second quarter, Key Tronic reported total revenue of $44.8 million, driven by increased demand from both new and longstanding customers.

Net income was $1.7 million, up from $300,000 in the September quarter and $100,000 last year.

A favorable sales mix in the second quarter of fiscal 2010 resulted in unusually high gross margins of 11% and operating margins of 4%, up from 8% and 1%, respectively, in the same period of fiscal 2009.

It was the 24th consecutive quarter the company turned a net profit. During the period, Key Tronic added capacity in its Mexico and China facilities.

In a statement, president and chief executive Craig Gates said, “During the second quarter we won new programs involving telecommunications, industrial, specialty printer, gaming and financial transaction equipment. Our continued success in diversifying our revenue base across a wide range of industries make us confident that our profitable growth trends are sustainable in coming periods.”

The company guided for fiscal third-quarter revenue of $44 million to $47 million. The company also expects to see sequential growth in the fourth quarter of fiscal 2010.

In December, Key Tronic was named CIRCUITS ASSEMBLY EMS Company of the Year.