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): July 31,
2007
|
STRATTEC
SECURITY CORPORATION
|
|
(Exact
name of registrant as specified in its
charter)
|
|
Wisconsin
|
|
(State
or other jurisdiction of
incorporation)
|
|
0-25150
|
39-1804239
|
|
|
(Commission
File Number)
|
(I.R.S.
Employer I.D. Number)
|
|
3333
West Good Hope Road
Milwaukee,
WI
|
53209
|
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
|
(414)
247-3333
|
|
(Registrant's
telephone number; including area
code)
|
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):
(17
CFR
230.425)
(17
CFR
240.14a-12)
Exchange
Act (17 CFR 240.14d-2(b))
Exchange Act (17 CFR 240.13e-4(c))
Section
2 - Financial Information
Item
2.02. Results of Operations and Financial
Condition.
On
July
31, 2007, STRATTEC SECURITY CORPORATION issued a press release (the "Press
Release") announcing results for the fiscal fourth quarter and fiscal year
ended
July 1, 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.
(c) Exhibits
99.1
--
Press Release of STRATTEC SECURITY CORPORATION, issued July 31,
2007.
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: August
1, 2007
BY /s/
Patrick J.
Hansen
Patrick
J. Hansen, Senior Vice President
and
Chief
Financial Officer
Exhibit
99.1
FOR
RELEASE AT 3:00 PM CDT
Contact: Pat
Hansen
Senior
Vice President and
Chief
Financial Officer
414-247-3435
www.strattec.com
STRATTEC
SECURITY CORPORATION
REPORTS
FISCAL FOURTH QUARTER RESULTS
Milwaukee,
Wisconsin – July 31, 2007 -- STRATTEC SECURITY CORPORATION (NASDAQ:STRT) today
reported operating results for the fiscal fourth quarter ended July 1,
2007.
Net
sales
for the Company’s three months ended July 1, 2007 were $46.1 million, compared
to net sales of $46.6 million for the three months ended July 2,
2006. Net income for the period was $3.4 million, compared to $4.0
million in the prior year quarter. Diluted earnings per share for the
period were $.97 compared to $1.08 in the prior year
quarter. During the prior year quarter, the Company received a
$961,000 ($605,000 after tax) customer reimbursement for costs incurred related
to a production capacity constraints that the Company had expensed during
previous reporting periods. This reimbursement increased the prior
year quarterly diluted earnings per share by $.17. In addition, both
the current year quarter and the prior year quarter results included favorable
income tax adjustments that increased diluted earnings per share by $.31 and
$.22, respectively.
For
the
fiscal year ended July 1, 2007, net sales were $167.7 million compared to
net
sales of $181.2 million in the prior year period. Net income was $8.2
million compared to $12.5 million and diluted earnings per share were $2.30
compared to $3.35 in the prior year.
Sales
to
STRATTEC’s largest customers overall decreased in the current quarter compared
to the prior year quarter levels. Sales to DaimlerChrysler
Corporation were essentially flat between years at $15.4 million in the current
quarter compared to $15.2 million in the prior year quarter. Sales to
General Motors Corporation were $10.9 million compared to $8.3 million due
to
higher product content on certain GM vehicles and takeover of certain passenger
car lockset production from another supplier. Sales to Delphi
Corporation were $4.9 million compared to $6.7 million due primarily to reduced
component content and lower production volumes. Sales to Ford Motor
Company were $6.4 million compared to $7.0 million due to lower Ford vehicle
production volumes. Sales to Mitsubishi Motor Manufacturing of
America were $89,000 compared to $1.2 million due to the previously announced
phase-out of this customer relationship.
Gross
profit margins were 17.0 percent in the current quarter compared to 20.6 percent
in the prior year quarter. The lower gross profit margins in
the current year quarter compared to the prior year quarter were primarily
the
result of the customer reimbursement previously noted that favorably increased
the prior year gross profit margin by 2.1%. The remaining decrease
was attributed to lower overhead absorption of our manufacturing costs due
to
reduced production related to modest customer demand and a reduction in
inventory between the current quarter compared to the prior year
quarter.
Operating
expenses were $5.3 million in the current quarter, compared to $5.8 million
in
the prior year quarter.
Provision
for income taxes in both the current and previous year quarters were not our
normal effective income tax rate of 37%. The current year
quarter included a favorable adjustment primarily relating to foreign taxes
that
positively impacted diluted earnings per share by $.31 and the prior year
quarter included a State refund claim recovery and a favorable foreign tax
adjustment that increased diluted earnings per share by $.22.
During
the fourth quarter, the Company repurchased 24,313 STRATTEC SECURITY CORPORATION
shares under the Company’s stock repurchase program at a cost of
$1,153,000. For the year ended July 1, 2007, a total of 126,213
shares were repurchased at a cost of $5,075,000.
STRATTEC
designs, develops, manufacturers 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.
2
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.
3
STRATTEC
SECURITY CORPORATION
Results
of Operations
(In
Thousands except per share amounts)
|
Fourth
Quarter Ended
|
|
Years
Ended
|
||||||||||||||
|
July
1, 2007
|
July
2, 2006
|
July
1, 2007
|
July
2, 2006
|
|||||||||||||
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
|
Net
Sales
|
$ |
46,097
|
$ |
46,551
|
$ |
167,707
|
$ |
181,197
|
||||||||
|
Cost
of Goods Sold
|
38,279
|
36,943
|
141,213
|
144,151
|
||||||||||||
|
Gross
Profit
|
7,818
|
9,608
|
26,494
|
37,046
|
||||||||||||
|
Engineering,
Selling &
|
||||||||||||||||
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Administrative
Expenses
|
5,307
|
5,821
|
20,189
|
22,067
|
||||||||||||
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Provision
for Doubtful Accounts
|
-
|
-
|
-
|
1,622
|
||||||||||||
|
Income
from Operations
|
2,511
|
3,787
|
6,305
|
13,357
|
||||||||||||
|
Interest
Income
|
905
|
830
|
3,611
|
2,563
|
||||||||||||
|
Interest
Expense
|
-
|
-
|
-
|
-
|
||||||||||||
|
Other
Income (Expense), Net
|
225
|
388
|
715
|
960
|
||||||||||||
|
Minority
Interest
|
50
|
-
|
75
|
-
|
||||||||||||
|
3,691
|
5,005
|
10,706
|
16,880
|
|||||||||||||
|
Provision
for Income Taxes
|
257
|
1,040
|
2,523
|
4,403
|
||||||||||||
|
Net
Income
|
$ |
3,434
|
$ |
3,965
|
$ |
8,183
|
$ |
12,477
|
||||||||
|
Earnings
Per Share:
|
||||||||||||||||
|
Basic
|
$ |
.97
|
$ |
1.08
|
$ |
2.30
|
$ |
3.36
|
||||||||
|
Diluted
|
$ |
.97
|
$ |
1.08
|
$ |
2.30
|
$ |
3.35
|
||||||||
|
Average
Basic
|
||||||||||||||||
|
Shares
Outstanding
|
3,536
|
3,650
|
3,552
|
3,716
|
||||||||||||
|
Average
Diluted
|
||||||||||||||||
|
Shares
Outstanding
|
3,539
|
3,653
|
3,555
|
3,720
|
||||||||||||
|
Other
|
||||||||||||||||
|
Capital
Expenditures
|
$ |
2,103
|
$ |
1,043
|
$ |
5,748
|
$ |
5,766
|
||||||||
|
Depreciation
& Amortization
|
$ |
1,772
|
$ |
1,766
|
$ |
6,988
|
$ |
7,155
|
||||||||
4
STRATTEC SECURITY CORPORATION
Condensed
Balance Sheet Data
(In
Thousands)
|
July
1, 2007
|
July
2, 2006
|
|||||||
|
(Unaudited)
|
||||||||
|
ASSETS
|
||||||||
|
Current Assets:
|
||||||||
|
Cash
and cash equivalents
|
$ |
65,491
|
$ |
65,712
|
||||
|
Receivables,
net
|
26,890
|
28,254
|
||||||
|
Inventories
|
7,166
|
9,337
|
||||||
|
Other
current assets
|
13,017
|
10,468
|
||||||
|
Total
Current Assets
|
112,564
|
113,771
|
||||||
|
Deferred Income Taxes
|
2,117
|
-
|
||||||
|
Investment in Joint Venture
|
2,813
|
2,202
|
||||||
|
Prepaid Pension Cost (A)
|
4,385
|
10,358
|
||||||
|
Other
Long Term Assets
|
41
|
197
|
||||||
|
Property, Plant and Equipment, Net
|
26,526
|
27,764
|
||||||
| $ |
148,446
|
$ |
154,292
|
|||||
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
||||||||
|
Current Liabilities:
|
||||||||
|
Accounts
Payable
|
$ |
16,575
|
$ |
17,701
|
||||
|
Other
|
14,906
|
15,806
|
||||||
|
Total
Current Liabilities
|
31,481
|
33,507
|
||||||
|
Borrowings Under Line of Credit Facility
|
-
|
-
|
||||||
|
Deferred
Income Taxes
|
-
|
4,266
|
||||||
|
Accrued Pension and Post Retirement Obligations (A)
|
13,431
|
6,244
|
||||||
|
Minority Interest
|
574
|
-
|
||||||
|
Shareholders’ Equity
|
244,119
|
234,989
|
||||||
|
Accumulated Other Comprehensive Loss
|
(14,341 | ) | (2,958 | ) | ||||
|
Less: Treasury Stock
|
(126,818 | ) | (121,756 | ) | ||||
|
Total
Shareholders’ Equity
|
102,960
|
110,275
|
||||||
| $ |
148,446
|
$ |
154,292
|
|||||
|
|
(A)Includes
$19.2 million of unrecognized pension and postretirement liabilities
recorded at year end 2007 in accordance with SFAS No. 158 and $242,000
of
additional minimum pension liability recorded during the fourth quarter
of
2006.
|
5
STRATTEC
SECURITY CORPORATION
Condensed
Cash Flow Statement Data
(In
Thousands)
|
Fourth
Quarter Ended
|
Years
Ended
|
|||||||||||||||
|
July
1, 2007
|
July
2, 2006
|
July
1, 2007
|
July
2, 2006
|
|||||||||||||
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
|
Cash
Flows from Operating Activities:
|
||||||||||||||||
|
Net
Income
|
$ |
3,434
|
$ |
3,965
|
$ |
8,183
|
$ |
12,477
|
||||||||
|
Adjustment
to Reconcile Net Income to
|
||||||||||||||||
|
Cash
Used in Operating Activities:
|
||||||||||||||||
|
Minority
Interest
|
(50 | ) |
-
|
(75 | ) |
-
|
||||||||||
|
Depreciation
and Amortization
|
1,772
|
1,766
|
6,988
|
7,155
|
||||||||||||
|
Deferred
Income Taxes
|
(359 | ) |
350
|
(359 | ) |
350
|
||||||||||
|
Stock
Based Compensation Expense
|
172
|
257
|
738
|
1,118
|
||||||||||||
|
Tax
Benefit from Options Exercised
|
10
|
-
|
23
|
61
|
||||||||||||
|
Provision
for Doubtful Accounts
|
-
|
-
|
-
|
1,622
|
||||||||||||
|
Change
in Operating Assets/Liabilities
|
685
|
1,148
|
(5,609 | ) | (3,322 | ) | ||||||||||
|
Other,
net
|
(50 | ) | (172 | ) | (95 | ) | (166 | ) | ||||||||
|
Net
Cash Provided by Operating Activities
|
5,614
|
7,314
|
9,794
|
19,295
|
||||||||||||
|
Cash
Flows from Investing Activities:
|
||||||||||||||||
|
Investment
in Joint Ventures
|
-
|
(519 | ) | (100 | ) | (569 | ) | |||||||||
|
Additions
to Property, Plant and Equipment
|
(2,103 | ) | (1,043 | ) | (5,748 | ) | (5,766 | ) | ||||||||
|
Proceeds
from Sale of Property, Plant
|
||||||||||||||||
|
and
Equipment
|
-
|
-
|
21
|
22
|
||||||||||||
|
Net
Cash Used in Investing Activities
|
(2,103 | ) | (1,562 | ) | (5,827 | ) | (6,313 | ) | ||||||||
|
Cash
Flow from Financing Activities:
|
||||||||||||||||
|
Purchase
of Common Stock
|
(1,153 | ) | (2,313 | ) | (5,075 | ) | (5,306 | ) | ||||||||
|
Contribution
from Minority Interest
|
375
|
-
|
649
|
-
|
||||||||||||
|
Reissue/Exercise
of Stock Options
|
139
|
9
|
238
|
1,086
|
||||||||||||
|
Net
Cash Used in Financing Activities
|
(639 | ) | (2,304 | ) | (4,188 | ) | (4,220 | ) | ||||||||
|
Net
Increase (Decrease) in Cash & Cash Equivalents
|
2,872
|
3,448
|
(221 | ) |
8,762
|
|||||||||||
|
Cash
and Cash Equivalents:
|
||||||||||||||||
|
Beginning
of Period
|
62,619
|
62,264
|
65,712
|
56,950
|
||||||||||||
|
End
of Period
|
$ |
65,491
|
$ |
65,712
|
$ |
65,491
|
$ |
65,712
|
||||||||
6