Key Technology Announces Fiscal 2010 First Quarter Results

January 28, 2010

Source

Key Technology, Inc. (Nasdaq:KTEC) today announced sales and operating results for the first quarter of fiscal 2010 ended December 31, 2009.

Net sales for the three-month period ended December 31, 2009 totaled $22.4 million, compared to $27.4 million recorded in the same quarter last year. The Company reported a net loss for the first quarter of fiscal 2010 of $57,000, or $0.01 per diluted share. Net earnings for the same quarter last year were $569,000, or $0.10 per diluted share.

Gross profit for the first quarter of fiscal 2010 was $7.9 million compared to $11.3 million in the corresponding period last year. As a percentage of net sales, gross profit for the quarter was 35.0% compared to 41.3% in the first quarter of fiscal 2009.

David Camp, President and Chief Executive Officer, commented, "The results in the fiscal 2010 first quarter are in line with our expectations. The gross margin percentage was negatively affected by under-utilization of manufacturing operations and continuing competitive pricing pressures."

Operating expenses for the quarter ended December 31, 2009 were $8.0 million, or 35.5% of sales, compared to $10.5 million, or 38.4% of sales in the same quarter last year.

Camp further commented, "While operating expense in the first quarter decreased by $2.5 million year-over-year due primarily to lower first quarter volume and cost-reduction actions previously taken, we expect operating expense increases in future quarters."

Orders received during the first quarter of fiscal 2010 were $28.3 million, compared to $22.9 million in the same period last year. The Company's backlog at December 31, 2009 was $35.5 million, compared to a backlog of $29.3 million at the end of the same quarter last year.

Camp concluded, "Orders in the first quarter slightly exceeded our expectations, and we anticipate shipments in the second quarter will be significantly higher than in the first quarter given the order levels for the past six months and the ending backlog. However, it is still difficult to determine whether we are experiencing a short-term recovery in orders or a longer-term trend."