Strattec Security Corporation Reports Record Fiscal Fourth Quarter and Year End Results
MILWAUKEE, Aug. 2 /PRNewswire/ --
STRATTEC SECURITY CORPORATION (Nasdaq: STRT) today reported record operating results for the fiscal fourth quarter and year ended July 2, 2000.
Net sales for the fourth quarter ended July 2, 2000 were $63.9 million, an increase of 13 percent compared to net sales of $56.5 million for the fourth quarter ended June 27, 1999. (The 2000 fiscal fourth quarter was 14 weeks while 1999's fourth quarter was the typical 13 weeks.) Net income was $5.5 million, compared to $5.1 million in the prior year quarter. Diluted earnings per share for the fourth quarter ended July 2, 2000, were $1.17 compared to $.88 in the prior year quarter, an increase of 33 percent.
For the year ended July 2, 2000, net sales were $224.8 million, an increase of 11 percent compared to net sales of $202.6 million in the prior year period. Net income was $18.5 million compared to $17.0 million and diluted earnings per share were $3.65 compared to $2.94, an increase of 24 percent.
Sales to STRATTEC's largest customers increased in the current quarter compared to the prior year levels, with General Motors Corporation and Delphi Automotive Systems Corporation increasing 5 percent, and both DaimlerChrysler Corporation and Ford Motor Company increasing 13 percent. Sales to Mitsubishi Motor Manufacturing of America, Inc. were $3,000,000 compared to $500,000 in the prior year quarter. The overall sales growth was driven by one additional shipping week in this years quarter, higher value mechanical and electro-mechanical content in the Company's lock products, and increased customer production volumes.
Gross profit margins were 22.0 percent in the current quarter which is consistent with the last two quarters but below the prior year quarter. The decrease in gross profit margins was attributed to product sales mix, facilities rearrangement costs and process improvement efforts that are nearly completed, as well as continued wage inflation in Mexico combined with an unfavorable Mexican Peso to U.S. dollar exchange rate.
Operating expenses were $5.6 million in the current quarter, compared to $5.4 million in the prior year quarter.
During the fourth quarter, 221,000 shares were repurchased under the Company's stock repurchase program at a cost of approximately $7.6 million. For the year ended July 2, 2000, 1,293,000 shares were repurchased at a cost of approximately $44.2 million. The impact of these share repurchases during the year reduced current quarter interest income to $231,000 compared to $347,000 realized in the prior year quarter.
Harold M. Stratton II, Chairman of the Board and Chief Executive Officer, commented: "Fiscal 2000 represents our seventh consecutive year of growth in sales and profit. Additionally, we have made good progress this year in positioning our business for the future, including process improvement initiatives, product expansion and globalization activities with our alliance partner, WiTTE-Velbert GmbH."
STRATTEC SECURITY CORPORATION designs, develops, manufactures and markets mechanical locks, electro-mechanical locks and related security products for North American and select European 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, 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. 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)
Fourth Quarter Ended Years Ended
July 2, 2000 June 27, 1999 July 2, 2000 June 27, 1999
(Unaudited)
Net Sales $63,885 $56,514 $224,817 $202,625
Cost of Goods Sold 49,815 42,989 175,322 155,821
Gross Profit 14,070 13,525 49,495 46,804
Engineering, Selling &
Administrative Expenses 5,624 5,397 20,254 20,191
Income from Operations 8,446 8,128 29,241 26,613
Interest Income 231 347 1,056 1,132
Interest Expense -- -- -- --
Other Income (Expense),
Net 292 (165) 52 (239)
8,969 8,310 30,349 27,506
Provision for Income
Taxes 3,498 3,241 11,836 10,491
Net Income $5,471 $5,069 $18,513 $17,015
Earnings Per Share:
Basic $1.20 $. 91 $3.75 $3.02
Diluted $1.17 $.88 $3.65 $2.94
Average Basic
Shares Outstanding 4,568 5,591 4,936 5,639
Average Diluted
Shares Outstanding 4,691 5,737 5,079 5,791
STRATTEC SECURITY CORPORATION
Condensed Balance Sheet Data
(In Thousands)
July 2, 2000 June 27, 1999
ASSETS
Current Assets:
Cash and cash equivalents $13,915 $28,611
Receivables, net 28,731 36,063
Inventories 14,342 13,804
Other current assets 9,613 8,805
Total Current Assets 66,601 87,283
Property, Plant and Equipment, Net 42,381 40,911
$108,982 $128,194
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $19,694 $17,386
Other 14,407 15,036
Total Current Liabilities 34,101 32,422
Deferred Income Taxes 299 512
Borrowings Under Revolving Credit Facility -- --
Accrued Pension and Post Retirement Obligations 14,132 12,915
Shareholders' Equity 113,710 91,428
Less: Treasury Stock (53,260) (9,083)
Total Shareholders' Equity 60,450 82,345
$108,982 $128,194
SOURCE Strattec Security Corporation
CONTACT: Pat Hansen, Vice President and Chief Financial Officer of