Key Tronic Corporation

Good day, and welcome to the Keytronic Q4 Fiscal 2020 Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Brett Larson. Please go ahead, sir.

Good afternoon, everyone. I am Brett Larson, Chief Financial Officer of Keytronic. I would like to thank everyone for joining us today for our investor call. Joining me here in our Spokane Valley headquarters is Craig Gates, our President and Chief Executive Officer. As always, I would like to remind you that during the course of this call, we might make projections or other forward-looking statements regarding future events or the company's future financial performance. Please remember that such statements are only predictions. Actual events or results may differ materially. For more information, you may review the risk factors outlined in the documents the company has filed with the SEC, specifically our latest 10-K, quarterly 10-Qs, and 8-Ks. Please note that on this call we will discuss historical financial and other statistical information regarding our business and operations. Some of this information is included in today's press release, and a recorded version of this call will be available on our website. Prior to getting into the details of the results of the most recent quarter, I would like to give Craig some time to address this past fiscal year and the series of unanticipated events that impacted Keytronic in its fiscal year of 2020.

Okay, thanks Brett. 2020 was a year of significant and unusual challenges and rewards for Keytronic. The dedication and courage of our employees, the support of our customers, both near and long-term, and the strategic decisions we made both recently and years ago enabled our promising exit of fiscal 2020 and encouraged us for the coming year. We began the year with a trade war between the U.S. and China, which was layered on top of a persistent worldwide supply pinch for electronic components. Due to the long hours and extreme effort of our materials groups on both sides of the ocean, we worked our way through most of the supply issues, albeit with painfully high levels of component inventory and some missed revenue opportunities. While the trade war related supply issues hurt us in the short term, they put the risk associated with an overly China-centric supply chain in clear focus for many of our current and prospective customers. As those customers began to assess their options, the benefits of our strategic focus on Juarez and U.S. production became clear to many of them. New business wins were the result. Over the years preceding 2020, our concerns surrounding China-centric strategies had led us to evaluate many other regions and prepare plans for diversification. As a result of this earlier work, we were able to launch and commission a new facility in Vietnam, which was up and running in about seven months. This unprecedented ramp put us in an excellent position to address the needs of customers looking for an Asia solution to China-centric sourcing. The ramp of our Da Nang facility continues with new business and new customers. Just as we gained some control over the trade war supply issues COVID-19 hit, Our employees were suddenly at risk. Scientifically proven safety measures were up for debate. Our Warris facility, along with many other Warris facilities, was closed for essentially two weeks. And supply chain issues, which were bad already, were enormously magnified. Our gaming customer demand went to zero. We implemented every safety measure we could in our facilities with overprotection as our goal. COVID-19 so far is a net positive to our business. Our focus on medical products over the past years resulted in a net gain in revenue as the virus drove demand, more than offsetting the decline in other COVID-affected businesses. China-centric potential customers who were concerned but on the fence during the trade war were pushed off the fence by the virus and pushed in our direction. Our sites in Juarez, The US and Vietnam served as a powerful risk mitigator for these customers, with several choosing to ramp new business in two or more of our locations. We enter 2021 with a forecast for growth and increased profits that is due to the courage, hard work, and strategic foresight of our employees, the support and trust of our new and established customers, and the support of our shareholders. For that, I am profoundly grateful. Brett?