STRATTEC SECURITY CORPORATION Reports Fiscal Third Quarter Results
MILWAUKEE, April 8 /PRNewswire-FirstCall/ -- STRATTEC SECURITY CORPORATION (Nasdaq: STRT) today reported operating results for the fiscal third quarter ended March 28, 2004.
Net sales for the Company's three months ended March 28, 2004 were $49.3 million, compared to net sales of $49.9 million for the three months ended March 30, 2003. Net income for the period was $4.4 million, compared to $4.2 million in the prior year quarter. Diluted earnings per share for the period were $1.15 compared to $1.11 in the prior year quarter.
For the nine months ended March 28, 2004, net sales were $143.7 million compared to net sales of $146.5 million in the prior year period. Net income was $12.6 million compared to $12.5 million and diluted earnings per share were $3.30 compared to $3.22 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 General Motors Corporation were $11.9 million compared to $15.0 million due to a combination of pre-programmed price decreases, discontinued models and lower levels of production on certain General Motors vehicles. Sales to Ford Motor Company were $9.3 million compared to $10.6 million due to price reductions and lower production volumes on certain models. Sales to Mitsubishi Motor Manufacturing of America, Inc. were $1.6 million compared to $2.4 million due primarily to declines in their production volumes. Sales to Delphi Corporation were flat during the current quarter at $7.6 million. However, sales to DaimlerChrysler Corporation increased significantly during the current quarter to $11.5 million compared to $8.6 million due to higher production volume and a more favorable vehicle content mix. Increased aftermarket sales substantially offset the decreased sales to the Company's largest customers.
Gross profit margins were 24.7 percent in the current quarter compared to 23.4 percent in the prior year quarter. The higher margins in the current year quarter were a result of the Company's ongoing cost reduction initiatives, a more positive sales mix, along with a favorable Mexican Peso to U.S. Dollar exchange rate. These favorable items were partially offset by higher purchased raw material costs for brass and zinc.
Operating expenses were $5.1 million in the current quarter, approximately the same level as in the prior year quarter.
During the third quarter, 33,700 STRATTEC SECURITY CORPORATION shares were repurchased under the Company's stock repurchase program at a cost of approximately $2.1 million.
STRATTEC SECURITY CORPORATION designs, develops, manufactures and markets mechanical locks, electro-mechanical locks and related access control products for North American Automotive and other Global Automotive Manufacturers.
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.
STRATTEC SECURITY CORPORATION
Results of Operations
(In Thousands except per share amounts)
Third Quarter Ended Nine Months Ended
March 28, March 30, March 28, March 30,
2004 2003 2004 2003
(Unaudited) (Unaudited)
Net Sales $49,266 $49,926 $143,700 $146,512
Cost of Goods Sold 37,082 38,255 108,956 112,550
Gross Profit 12,184 11,671 34,744 33,962
Engineering, Selling &
Administrative Expenses 5,132 5,043 15,033 14,225
Income from Operations 7,052 6,628 19,711 19,737
Interest Income 112 91 289 274
Interest Expense - - - -
Other Income
(Expense), Net (49) 21 237 (227)
7,115 6,740 20,237 19,784
Provision for Income
Taxes 2,668 2,493 7,589 7,320
Net Income $4,447 $4,247 $12,648 $ 12,464
Earnings Per Share:
Basic $1.17 $1.13 $3.35 $3.28
Diluted $1.15 $1.11 $3.30 $3.22
Average Basic
Shares Outstanding 3,802 3,759 3,775 3,797
Average Diluted
Shares Outstanding 3,873 3,822 3,838 3,867
Other
Capital Expenditures $528 $1,327 $3,550 $2,700
Depreciation &
Amortization $1,883 $1,968 $5,842 $5,884
STRATTEC SECURITY CORPORATION
Condensed Balance Sheet Data
(In Thousands)
March 28, 2004 June 29, 2003
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $43,384 $29,902
Receivables, net 31,827 31,173
Inventories 8,868 7,884
Other current assets 10,335 12,127
Total Current Assets 94,414 81,086
Deferred Income Taxes 1,973 1,973
Investment in Joint Venture 1,363 1,141
Property, Plant and Equipment, Net 31,462 33,894
$129,212 $118,094
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $15,433 $13,990
Other 14,379 15,819
Total Current Liabilities 29,812 29,809
Borrowings Under Revolving Credit Facility - -
Accrued Pension and Post Retirement
Obligations 15,861 19,190
Shareholders' Equity 188,002 169,953
Less: Treasury Stock (104,463)( 100,858)
Total Shareholders' Equity 83,539 69,095
$129,212 $118,094
SOURCE STRATTEC SECURITY CORPORATION
CONTACT: Pat Hansen, Vice President and Chief Financial Officer of
STRATTEC SECURITY CORPORATION, +1-414-247-3435
Web site: http://www.strattec.com