Key Tronic Corp., the Spokane Valley provider of electronic manufacturing services, has in the past year nearly doubled the number of client businesses for which it makes multiple products, ranging from household goods to medical thermometers.

Subsequently, a sharp rise in the contract manufacturer's sales and earnings year over year has investors taking notice.

Since January, the publicly traded company's share price has jumped sharply, catapulting from around $6 a share that month to around $9 to $10 a share on average in February and March. Last month, the share price rose above $11, and it hovered around $13 early this month.

"We're making a lot of money," says President and CEO Craig Gates. He says the company has grown during the past three years from $185 million in revenues to almost $400 million projected for its fiscal year, which ends June 30.

Key Tronic's Chief Financial Officer Ron Klawitter adds, "We've had a number of new customers just over the last 12 to 15 months. We've gone from 26 customers to 42 different customers generating revenue. Each customer may have multiple programs," which means any one client often has Key Tronic making many of its products.

Key Tronic's recent stock value surge follows 10 years during which its share price climbed as high as around the $6 range, but also fell at times below $2 a share. As recently as October, its share price dropped close to $3.

Gates and Klawitter attribute the company's recent stock value rise to people noticing Key Tronic's record sales and earnings in recent months. Also, among contract manufacturers in the industry known as EMS, or electronic manufacturing services, Key Tronic's performance has edged up within the top 10 companies in the U.S., Klawitter says.

"Overall, EMS companies trade at about 13 times earnings," Klawitter says. "I think we're now being recognized. We're now the ninth largest EMS company in the U.S. in terms of revenue."

Klawitter adds that the company is growing much faster than the overall U.S. economy, and faster than the EMS industry, which he says is growing at about an 8 percent to 10 percent rate per year. Klawitter says he expects that Key Tronic will show about a 35 percent annual growth rate for its 2012 fiscal year, based on projected revenues of $340 million to $345 million, up from about $254 million for its 2011 fiscal year.

For the first three quarters of its current fiscal year, Key Tronic reported net income of $7.8 million, or 74 cents a diluted share, up 86 percent from $4.2 million, or 40 cent a share, in the same period a year earlier. Total revenue for the nine months was at $249.7 million, up 33 percent from $187.8 million in the year-earlier period.

The company also recently hired 20 people in Spokane, where it has about 200 employees. The newer jobs are primarily professional level, Gates says, including procurement, engineering, and program management workers. "We have about 20 positions open right now," Klawitter adds.

Key Tronic declines to name most of its customers in part because of competitive reasons and also due to nondisclosure agreements. However, Gates and Klawitter say some client companies have been named in U .S. Securities and Exchange Commission public filings, which is required when revenues received from any one client rise above 10 percent of total sales.

Some of Key Tronic's larger clients include Calgary-based SMART Technologies Inc., which sells interactive whiteboard products that use computer technology for workplace collaboration; International Gaming Technology; and Kaz Inc., a Massachusetts-based provider of health care and home consumer products sold under such brand names as Braun and Honeywell.

It does some manufacturing from its headquarters at 4424 N. Sullivan as well as at about 35,000 square feet of space in the nearby Spokane Business & Industrial Park. Additionally, Key Tronic has large manufacturing operations in Juarez, Mexico, and Shanghai, China, both which have grown significantly in the past five years, Gates and Klawitter say.

The Mexico operation, with 3,200 employees, now is spread between six different buildings with a combined total of half a million square feet of space. Five of those buildings are owned by Key Tronic, Klawitter adds. The Shanghai operation has 140,000 square feet in two leased plants and employs about 400 people.

At its headquarters, the business leases 40,000 square feet on the main floor for professional offices and some manufacturing, Gates says, and the company in 2010 signed a 10-year lease to remain there.

Among the consumer products manufactured by the company, Key Tronic makes a toilet bowl cleaner wand tool for Clorox, another SEC publicly-named client company, Gates says. On the aerospace end of the spectrum, it makes what are called peripheral products—not those being supplied directly to Boeing, for example.

"Just about anything that has plastics or electronics in it we can do," Gates says. "We're the manufacturing arm of our customers. We're the factory."

He adds, "We make everything from toilet bowl cleaners to satellite tracking systems."

The company started in 1969 to manufacture computer keyboards. Today, keyboards make up only 1 percent of the company's business, Klawitter says. Its contract manufacturing services include printed circuit board assembly, plastic molding, and full product assembly to build a variety of products and devices.

In 1998, the company made a transition toward electronic manufacturing services, Gates adds. "It was about 2004 to 2005, when the lines in EMS became more of our revenue than keyboards. So we've gone from 1998 and grown EMS from zero to close to a $400 million revenue run rate a year."

Adds Klawitter, "It's really been organic. We had to find the customers and win the business and the keep the business."

Gates says Key Tronic works with designs received from its clients, but sometimes it does much of the design work. "More and more, we're doing it all," he says.

Many companies have moved away from being as vertically integrated—having sales, manufacturing, administration, and other functions all in-house.

"More and more companies are deciding to outsource their products, and more are hiring companies like us," Gates says. "Companies are realizing that their competitive edge is not manufacturing. Their competitive edge is the creation of the product, design, and the core technology in the product—that's the heart of their business. The manufacturing is pretty much a commodity."

Going forward, both say they expect that Key Tronic will continue to attract customers.

"The reason we're growing is we know how to build weird and unique items that few people other than the OEM (original equipment manufacturer) know how to manufacture," Gates says.

Adds Klawitter, "Our customers say here's a product, and if you do well with that product, here's another product we'll let you build. That's our goal, to win all of our customers' outsourced business."

"We try to keep that funnel full," Klawitter says. "There's a pretty good pipeline we have out there right now. The growth prospects look pretty good."