SPOKANE VALLEY, WA -- Key Tronic reported third-quarter fiscal 2026 revenue of $89.6 million, down from $112 million a year earlier, as legacy customer demand declined and Winter Storm Fern temporarily disrupted operations.

Despite the lower revenue, the EMS provider reported improved operational efficiency and margin performance.  The company said cost-cutting initiatives, near-shoring efforts and tariff mitigation strategies continued to improve competitiveness. Key Tronic is winding down manufacturing operations in China and shifting production to facilities in the US and Vietnam, a move expected to save about $1.2 million per quarter once completed later this fiscal year.

Net loss for the quarter widened to $2.6 million, compared with a loss of $0.6 million a year earlier. However, the company said demand from existing customers and new program launches is expected to support revenue growth in the fourth quarter.

“Despite reduced demand from certain longstanding customers and the shutdowns caused by Winter Storm Fern in the third quarter, we’re encouraged by the improvements in our operating efficiencies,” said president and CEO Brett Larsen. “Our production backlog of customer demand has increased and we continue to expect our revenue to gradually begin to rebound and see a return to profitability in the fourth quarter of fiscal 2026.”