A profitable second quarter for Key Technology Inc. may be a sign of economic recovery. But officials with the Walla Walla manufacturing firm remain cautious amid an increasingly competitive market.
Net sales for the three-month period that ended March 31 were $30.7 million, compared to $23.3 million in the corresponding period a year ago. The company reported quarterly net earnings of $1.4 million, or 26 cents per share, compared to a net loss of $1.5 million, or 29 cents a share, during the same time in 2009. Gross profit for the second quarter of fiscal 2010 was $10.8 million, compared to $8.1 million last year.
Net sales for the first six months of the fiscal year climbed to $53.2 million for the quarter from $50.6 million last year.
Key reported that net earnings for the three- and six-month periods included pre-tax gains of $325,000 and $475,000 respectively. Those were related to collections of its note receivable from the sale in fiscal 2007 of its interest in the InspX joint venture. During the same time period in 2009 Key's net loss included pre-tax charges of $845,000 related to a workforce reduction and a $343,000 write-off of costs associated with a potential facility expansion.
In a prepared statement, Key CEO David Camp said the market's acceptance of new products from the firm contributed to increased revenues.
"It is still difficult for us to determine the strength and duration of the recovery we are experiencing; however, we are encouraged by the improved results attributable to the hard work and actions we initiated in 2009," he said.
Gross profit over the last six months was $18.7 million, compared to $19.4 million for the same period in fiscal 2009.
"Price competition in our markets remains fierce, reflecting excess manufacturing capacity in our industry and adversely affecting gross margins," Camp said.