SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
__________________
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of
Report (Date of earliest event reported): January 17,
2008
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STRATTEC
SECURITY CORPORATION
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(Exact
name of registrant as specified in its
charter)
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Wisconsin
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(State
or other jurisdiction of
incorporation)
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0-25150
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39-1804239
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(Commission
File Number)
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(I.R.S.
Employer I.D. Number)
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3333
West Good Hope Road
Milwaukee,
WI
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53209
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(414)
247-3333
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(Registrant's
telephone number; including area
code)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General
Instruction A.2. below.
o
Written
communications pursuant to Rule 425 under the Securities
Act(17
CFR
230.425)
o
Soliciting material
pursuant to Rule 14a-12 under the Exchange Act
(17
CFR
240.14a-12)
o
Pre-commencement
communications pursuant to Rule 14d-2(b) under
theExchange
Act (17 CFR 240.14d-2(b))
o
Pre-commencement
communications pursuant to Rule 13e-4(c) under the
Exchange
Act (17 CFR 240.13e-4(c))
Section 2
– Financial Information
Item
2.02. Results
of
Operations and Financial Condition.
On
January
17, 2008, STRATTEC SECURITY CORPORATION
issued a
press release (the "Press Release") announcing results for the fiscal
second quarter
ended
December 30, 2007. A copy of the Press Release
is attached as Exhibit 99.1 to this report. The attached Exhibit
99.1 is furnished pursuant to Item 2.02 of Form 8-K.
The
information in this Form 8-K and the
Exhibit attached hereto shall not be deemed "filed" for purposes of Section
18
of the Securities Exchange Act of 1934, nor shall it be deemed incorporated
by
reference in any filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except as shall be expressly set forth by specific
reference in such filing.
Section
9 - Financial Statements and Exhibits
Item
9.01. Financial
Statements and
Exhibits.
(d) Exhibits
99.1
-- Press Release of STRATTEC SECURITY CORPORATION, issued January 17,
2008.
2
SIGNATURE
Pursuant
to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report
to
be signed on its behalf by the undersigned thereunto duly
authorized.
STRATTEC
SECURITY CORPORATION
Date: January
18, 2008
BY_____________________________________
Patrick J. Hansen, Senior Vice President
and Chief Financial Officer
3
Exhibit
99.1
Contact: Pat
Hansen
Senior
Vice President and
Chief
Financial Officer
414-247-3435
www.strattec.com
STRATTEC
SECURITY CORPORATION
REPORTS
FISCAL SECOND QUARTER RESULTS
Milwaukee,
Wisconsin – January 17, 2008 -- STRATTEC SECURITY CORPORATION (NASDAQ:STRT)
today reported operating results for the fiscal second quarter ended December
30, 2007.
Net
sales
for the Company’s second quarter ended December 30, 2007 were $39.9 million,
compared to net sales of $37.9 million for the second quarter ended December
31,
2006. Net income for the period was $1.3 million, compared to $1.1
million in the prior year quarter. Diluted earnings per share for the
period were $.38 compared to $.31 in the prior year quarter.
For
the
six months ended December 30, 2007, net sales were $82.6 million compared to
net
sales of $76.0 million in the prior year period. Net income was $3.7
million compared to net income of $1.8 million in the prior year period and
diluted earnings per share were $1.06 compared to $.51.
Sales
to
STRATTEC’s largest customers overall were flat in the current quarter compared
to the prior year quarter. Sales to General Motors Corporation in the
current quarter were $11.9 million compared to $7.4 million in the prior year
quarter due to higher product content on certain GM vehicles and the takeover
of
certain passenger car locksets production from another
supplier. Sales to Chrysler LLC were $10.0 million compared to $14.3
million and sales to Delphi Corporation were $3.8 million compared to $4.2
million due to reduced component content and lower vehicle production
volumes. Sales to Ford Motor Company were $4.4 million compared to
$4.3 million. Sales during the current quarter were weaker than
initially anticipated for the above four customers due to their production
cut
backs. Subsequently, these customers announced additional production
cuts that will effect both our sales and profitability for the third fiscal
quarter ending March 30, 2008.
Gross
profit margins were 17.3% in the current quarter compared to 13.3% in the prior
year quarter. The year-over-year increase in gross profit
margins was primarily attributed to lower purchased material costs for zinc
and
brass along with price increases to recover the higher purchased raw material
costs we experienced last year. In addition, the prior year quarter
included a charge for severance and separation costs related to the move of
service product assembly from Milwaukee, Wisconsin to Juarez, Mexico that
reduced the gross profit margin by approximately 1%.
Operating
expenses were $5.8 million in the current quarter, compared to $4.9 million
in
the prior year quarter. The increased spending is attributed to
hiring additional engineering personnel along with costs associated with new
product development.
The
provision for income taxes in the current quarter was our normal 37% effective
tax rate where as the prior year quarter included a State refund claim recovery
that positively impacted earnings per share by $.09.
During
the current quarter, the Company contributed $1.5 million to its Pension Fund
and repurchased 25,500 STRATTEC SECURITY CORPORATION shares under the Company’s
stock repurchase program at a cost of $1,146,000.
STRATTEC
designs, develops, manufactures and markets mechanical locks and keys,
electronically enhanced locks and keys, steering column and instrument panel
ignition lock housings, latches and related access control products for North
American automotive customers, and for global automotive manufacturers through
the VAST Alliance in which it participates with WITTE Automotive of Velbert,
Germany and ADAC Plastics, Inc. of Grand Rapids, Michigan. The
Company’s history in the automotive business spans nearly 100
years.
Certain
statements contained in this release contain “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of 1995. These
statements may be identified by the use of forward-looking words or phrases
such
as “anticipate,” “believe,” “could,” “expect,” “intend,” “may,” “planned,”
“potential,” “should,” “will,” and “would.” Such
forward-looking statements in this release are inherently subject to many
uncertainties in the Company’s operations and business
environment. These uncertainties include general economic conditions,
in particular, relating to the automotive industry, consumer demand for the
Company’s and its customers’ products, competitive and technological
developments, customer purchasing actions, foreign currency fluctuations, and
costs of operations. Shareholders, potential investors and other
readers are urged to consider these factors carefully in evaluating the
forward-looking statements and are cautioned not to place undue reliance on
such
forward-looking statements. The forward-looking statements made
herein are only made as of the date of this press release and the Company
undertakes no obligation to publicly update such forward-looking statements
to
reflect subsequent events or circumstances occurring after the date of this
release. In addition, such uncertainties and other operational
matters are discussed further in the Company’s quarterly and annual filings with
the Securities and Exchange Commission.
2
STRATTEC
SECURITY
CORPORATION
Results
of Operations
(In
Thousands except per share amounts)
(Unaudited)
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Second
Quarter Ended
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Six
Months Ended
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|||||||||||||||
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December
30, 2007
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December
31, 2006
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December
30, 2007
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December
31, 2006
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|||||||||||||
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Net
Sales
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$ | 39,908 | $ | 37,913 | $ | 82,647 | $ | 75,963 | ||||||||
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Cost
of Goods Sold
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33,002 | 32,873 | 67,347 | 65,641 | ||||||||||||
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Gross
Profit
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6,906 | 5,040 | 15,300 | 10,322 | ||||||||||||
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Engineering,
Selling &
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||||||||||||||||
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Administrative
Expenses
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5,838 | 4,852 | 11,631 | 9,908 | ||||||||||||
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Income
from Operations
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1,068 | 188 | 3,669 | 414 | ||||||||||||
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Interest
Income
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814 | 905 | 1,727 | 1,827 | ||||||||||||
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Interest
Expense
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- | - | - | - | ||||||||||||
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Other
Income, Net
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158 | 121 | 466 | 149 | ||||||||||||
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Minority
Interest
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69 | - | 118 | - | ||||||||||||
| 2,109 | 1,214 | 5,980 | 2,390 | |||||||||||||
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Provision
for Income Taxes
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786 | 120 | 2,238 | 555 | ||||||||||||
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Net
Income
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$ | 1,323 | $ | 1,094 | $ | 3,742 | $ | 1,835 | ||||||||
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Earnings
Per Share:
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||||||||||||||||
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Basic
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$ | 0.38 | $ | 0.31 | $ | 1.07 | $ | 0.51 | ||||||||
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Diluted
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$ | 0.38 | $ | 0.31 | $ | 1.06 | $ | 0.51 | ||||||||
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Average
Basic
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||||||||||||||||
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Shares
Outstanding
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3,506 | 3,539 | 3,513 | 3,568 | ||||||||||||
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Average
Diluted
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||||||||||||||||
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Shares
Outstanding
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3,512 | 3,542 | 3,518 | 3,571 | ||||||||||||
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Other
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||||||||||||||||
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Capital
Expenditures
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$ | 2,728 | $ | 1,377 | $ | 4,474 | $ | 2,292 | ||||||||
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Depreciation
& Amortization
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$ | 1,758 | $ | 1,768 | $ | 3,496 | $ | 3,517 | ||||||||
3
STRATTEC
SECURITY
CORPORATION
Condensed
Balance Sheet Data
(In
Thousands)
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December
30, 2007
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July
1, 2007
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|||||||
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(Unaudited)
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||||||||
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ASSETS
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||||||||
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Current
Assets:
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||||||||
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Cash
and cash equivalents
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$ | 60,242 | $ | 65,491 | ||||
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Receivables,
net
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20,090 | 26,890 | ||||||
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Inventories
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10,726 | 7,166 | ||||||
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Other
current assets
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13,308 | 13,017 | ||||||
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Total
Current Assets
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104,366 | 112,564 | ||||||
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Deferred
Income Taxes
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2,420 | 2,117 | ||||||
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Investment
in Joint Ventures
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3,201 | 2,813 | ||||||
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Prepaid
Pension Cost
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6,948 | 4,385 | ||||||
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Other
Long Term Assets
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35 | 41 | ||||||
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Property,
Plant and Equipment, Net
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27,479 | 26,526 | ||||||
| $ | 144,449 | $ | 148,446 | |||||
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LIABILITIES
AND SHAREHOLDERS’ EQUITY
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||||||||
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Current
Liabilities:
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||||||||
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Accounts
Payable
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$ | 12,524 | $ | 16,575 | ||||
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Other
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16,049 | 14,906 | ||||||
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Total
Current Liabilities
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28,573 | 31,481 | ||||||
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Borrowings
Under Line of Credit Facility
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- | - | ||||||
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Accrued
Pension and Postretirement Obligations
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13,639 | 13,431 | ||||||
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Minority
Interest
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775 | 574 | ||||||
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Shareholders’
Equity
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243,755 | 244,119 | ||||||
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Accumulated
Other Comprehensive Loss
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(14,333 | ) | (14,341 | ) | ||||
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Less: Treasury
Stock
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(127,960 | ) | (126,818 | ) | ||||
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Total
Shareholders’ Equity
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101,462 | 102,960 | ||||||
| $ | 144,449 | $ | 148,446 | |||||
4
STRATTEC
SECURITY
CORPORATION
Condensed
Cash Flow Statement Data
(In
Thousands)
(Unaudited)
|
Second
Quarter Ended
|
Six
Months Ended
|
|||||||||||||||
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December
30, 2007
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December
31, 2006
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December
30, 2007
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December
31, 2006
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|||||||||||||
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Cash
Flows from Operating Activities:
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||||||||||||||||
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Net
Income
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$ | 1,323 | $ | 1,094 | $ | 3,742 | $ | 1,835 | ||||||||
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Adjustment
to Reconcile Net Income to
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||||||||||||||||
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Cash
Provided by Operating Activities:
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||||||||||||||||
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Minority
Interest
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(87 | ) | - | (148 | ) | - | ||||||||||
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Depreciation
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1,758 | 1,768 | 3,496 | 3,517 | ||||||||||||
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Stock
Based Compensation Expense
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179 | 186 | 492 | 379 | ||||||||||||
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Change
in Operating Assets/Liabilities
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19 | 852 | (3,400 | ) | 986 | |||||||||||
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Other,
net
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(124 | ) | 33 | (342 | ) | 132 | ||||||||||
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Net
Cash Provided by Operating Activities
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3,068 | 3,933 | 3,840 | 6,849 | ||||||||||||
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Cash
Flows from Investing Activities:
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||||||||||||||||
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Investment in Joint Ventures
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- | (100 | ) | - | (100 | ) | ||||||||||
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Additions to Property, Plant and Equipment
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(2,728 | ) | (1,377 | ) | (4,474 | ) | (2,292 | ) | ||||||||
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Proceeds from Sale of Property, Plant and Equipment
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- | - | - | 21 | ||||||||||||
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Net
Cash Used in Investing Activities
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(2,728 | ) | (1,477 | ) | (4,474 | ) | (2,371 | ) | ||||||||
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Cash
Flow from Financing Activities:
|
||||||||||||||||
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Purchase of Common Stock
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(1,146 | ) | (596 | ) | (1,146 | ) | (3,922 | ) | ||||||||
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Dividends Paid
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(31 | ) | - | (4,081 | ) | - | ||||||||||
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Contribution from Minority Interest
|
- | - | 349 | - | ||||||||||||
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Loan from Minority Interest
|
250 | - | 250 | - | ||||||||||||
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Exercise
of Stock Options and Employee Stock Purchases
|
6 | 8 | 13 | 17 | ||||||||||||
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Net
Cash Used in Financing Activities
|
(921 | ) | (588 | ) | (4,615 | ) | (3,905 | ) | ||||||||
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Net
Increase (Decrease) in Cash & Cash Equivalents
|
(581 | ) | 1,868 | (5,249 | ) | 573 | ||||||||||
|
Cash
and Cash Equivalents:
|
||||||||||||||||
|
Beginning of Period
|
60,823 | 64,417 | 65,491 | 65,712 | ||||||||||||
|
End of Period
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$ | 60,242 | $ | 66,285 | $ | 60,242 | $ | 66,285 | ||||||||
5