Strattec Security Corporation Reports Fiscal Third Quarter Results
MILWAUKEE, April 12 /PRNewswire/ -- STRATTEC SECURITY CORPORATION (Nasdaq: STRT) today reported operating results for the fiscal third quarter ended March 26, 2000.
Net sales for the three months ended March 26, 2000 were $54.5 million, an increase of 6 percent compared to net sales of $51.2 million for the three months ended March 28, 1999. Net income was $4.4 million, compared to $4.5 million in the prior year quarter. Diluted earnings per share for the three months ended March 26, 2000, were $.91 compared to $.77 in the prior year quarter.
For the nine months ended March 26, 2000, net sales were $160.9 million compared to $146.1 million in the prior year period. Net income was $13.0 million compared to $11.9 million and diluted earnings per share were $2.50 compared to $2.06.
During the current quarter, sales to General Motors Corporation, Ford Motor Co. and Delphi Automotive Systems Corporation each increased approximately 2 percent over the prior year quarter. Sales to DaimlerChrysler Corporation increased 9 percent, and sales to Mitsubishi Motor Manufacturing of America, Inc. were nearly five times last year's moderate level due to an increase in STRATTEC's share of this customer's production requirements.
Gross profit margins were 22 percent in the current quarter as the Company continued to invest in process changes, facilities rearrangement and training associated with its Lean Manufacturing initiatives. The major portion of the facilities rearrangement will be completed over the next 4-5 months and benefits are beginning to be realized in the form of cost reduction, inventory reduction and the enhanced ability to meet continually increasing customer requirements for productivity and quality.
The Mexican Peso to U.S. dollar exchange rate was unfavorable in the current quarter and when combined with annual wage increases effective January 2000, resulted in higher U.S. dollar costs for STRATTEC's Mexican operations. The Company believes the exchange rate will become more favorable in the last half of this calendar year.
Engineering, selling and administrative expenses were $4.8 million, which are comparable to the last two fiscal quarters, and lower than the $5.1 million reported for the prior year quarter. Current year expense levels reflect the favorable impact of moving the Company's service aftermarket warehouse and distribution back to its Milwaukee facility in April 1999. Also, included in current year expenses are substantial development activities associated with new products and STRATTEC's globalization activities with its alliance partner, WiTTE-Velbert Gmbh.
During the third quarter, 151,000 shares were repurchased under the Company's Stock Repurchase Program at a cost of approximately $5.0 million. For the nine months ended March 26, 2000, 1,072,000 shares were repurchased at a cost of approximately $36.6 million. The impact of these share repurchases during the year reduced current quarter interest income to $146,000 compared to $309,000 realized in the prior year quarter.
Harold M. Stratton II, Chairman of the Board and Chief Executive Officer, commented: "North American vehicle production levels reached an all-time high in March, and our sales revenue in the quarter reflects this activity. Assuming continued robust vehicle builds in the months ahead, we anticipate improved operating efficiencies during the upcoming fourth quarter and another record fiscal year."
STRATTEC SECURITY CORPORATION designs, develops, manufactures and markets mechanical locks, electro-mechanical locks and related access control products for major automotive manufacturers.
Forward-looking statements in this release are 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, foreign currency fluctuations, Year 2000 compliance issues and costs of operations. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the 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. 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)
(Unaudited)
Three Months Ended Nine Months Ended
March 26, March 28, March 26, March 28,
2000 1999 2000 1999
Net Sales $ 54,539 $ 51,220 $ 160,932 $ 146,111
Cost of Goods Sold 42,551 39,149 125,507 112,832
Gross Profit 11,988 12,071 35,425 33,279
Engineering, Selling &
Administrative Expenses 4,847 5,078 14,630 14,794
Income from Operations 7,141 6,993 20,795 18,485
Interest Income 146 309 825 785
Interest Expense -- -- -- --
Other Expense, Net (91) (91) (240) (74)
7,196 7,211 21,380 19,196
Provision for
Income Taxes 2,806 2,740 8,338 7,250
Net Income $ 4,390 $ 4,471 $ 13,042 $ 11,946
Earnings Per Share:
Basic $.94 $.79 $2.57 $2.11
Diluted $.91 $.77 $2.50 $2.06
Average Basic
Shares Outstanding 4,667 5,649 5,068 5,654
Average Diluted
Shares Outstanding 4,808 5,807 5,219 5,809
Balance Sheet Data
(In Thousands)
March 26, 2000 March 28, 1999
(Unaudited)
Cash and Cash Equivalents $ 9,200 $ 21,100
Accounts Receivable, Net 32,000 34,700
Inventories 14,900 16,100
Debt -- --
Shareholders' Equity 106,300 85,900
Less: Treasury Stock (45,700) (6,100)
Net Shareholders' Equity 60,600 79,800
SOURCE STRATTEC SECURITY CORPORATION
CONTACT: Patrick Hansen, Vice President and Chief Financial Officer of