STRATTEC SECURITY CORPORATION Reports Fiscal Third Quarter Results
MILWAUKEE, April 11 /PRNewswire/ --
STRATTEC SECURITY CORPORATION (Nasdaq: STRT) today reported operating results for the fiscal third quarter ended April 1, 2001.
Net sales for the Company's three months ended April 1, 2001 were $48.2 million, compared to net sales of $54.5 million for the three months ended March 26, 2000. Net income for the period was $2.6 million, compared to $4.4 million in the prior year quarter. Diluted earnings per share for the period were $.60 compared to $.91 in the prior year quarter. During the current quarter, the Company recorded a pre-tax charge of $450,000 to cover severance and separation costs related to a realignment of the Company's human resources. The impact of this realignment will reduce operating costs by approximately $2.0 million annually, effective immediately.
For the nine months ended April 1, 2001, net sales were $150.6 million compared to net sales of $160.9 million in the prior year period. Net income was $9.9 million compared to $13.0 million and diluted earnings per share were $2.21 compared to 2.50.
Sales to STRATTEC's largest customers overall decreased in the current quarter compared to the record prior year quarter levels, with General Motors Corporation at $13.9 million compared to $15.9 million, Delphi Automotive Systems Corporation at $6.1 million compared to $7.6 million, DaimlerChrysler Corporation at $8.2 million compared to $8.9 million, and Ford Motor Company at $10.8 million compared to $13.4 million. Sales to Mitsubishi Motor Manufacturing of America, Inc. increased during the current quarter and were $2.7 million compared to $2.3 million in the prior year quarter.
Gross profit margins were 19.7 percent in the current quarter compared to 22.0 percent in the prior year quarter. The impact of the charge related to the realignment of human resources in the current quarter reduced gross profit margins by .5 percent. This quarter's gross profit margins were also significantly impacted by the effects of customer plant shutdowns and the resulting 20% reduction in the production of vehicles STRATTEC supplies. Additionally, the Company reduced inventory levels by approximately $6.5 million in comparison to the previous quarter.
Operating expenses were $5.2 million in the current quarter (including $225,000 of the pre-tax realignment charge) compared to $4.8 million in the prior year quarter.
During the third quarter, 352,000 shares were repurchased under the Company's stock repurchase program at a cost of approximately $11.3 million.
Harold M. Stratton II, Chairman of the Board and Chief Executive Officer, commented: "During our third fiscal quarter we implemented certain initiatives to support both our current and long range business strategies. These changes included focusing more resources on the development of our future products and streamlining our business processes to reflect the more efficient operating structure we have been working on throughout this fiscal year. We believe the changes we have implemented position the Company to react more effectively given the industry vehicle build fluctuations we have experienced over the last several months. Assuming our perception of more normalized vehicle production during April, May and June is correct, we expect earnings to improve in the fiscal fourth quarter compared to this quarter."
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.
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)
Third Quarter Ended Nine Months Ended
April 1, March 26, April 1, March 26,
2001 2000 2001 2000
(Unaudited) (Unaudited)
Net Sales $ 48,179 $54,539 $150,588 $160,932
Cost of Goods Sold 38,696 42,551 119,781 125,507
Gross Profit 9,483 11,988 30,807 35,425
Engineering, Selling &
Administrative
Expenses 5,182 4,847 14,872 14,630
Income from Operations 4,301 7,141 15,935 20,795
Interest Income 138 146 521 825
Interest Expense -- -- -- --
Other Expense, Net (227) (91) (403) (240)
4,212 7,196 16,053 21,380
Provision for Income
Taxes 1,601 2,806 6,132 8,338
Net Income $2,611 $4,390 $9,921 $ 13,042
Earnings Per Share:
Basic $.61 $.94 $2.26 $2.57
Diluted $.60 $.91 $2.21 $2.50
Average Basic
Shares Outstanding 4,297 4,667 4,397 5,068
Average Diluted
Shares Outstanding 4,382 4,808 4,492 5,219
STRATTEC SECURITY CORPORATION
Condensed Balance Sheet Data
(In Thousands)
April 1, 2001 July 2, 2000
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $7,978 $13,915
Receivables, net 27,225 28,731
Inventories 12,183 14,342
Other current assets 8,147 9,613
Total Current Assets 55,533 66,601
Property, Plant and Equipment, Net 42,839 42,381
$98,372 $108,982
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $14,117 $19,694
Other 11,356 14,407
Total Current Liabilities 25,473 34,101
Deferred Income Taxes 299 299
Borrowings Under Revolving Credit Facility -- --
Accrued Pension and Post Retirement Obligations 15,145 14,132
Shareholders' Equity 124,992 113,710
Less: Treasury Stock (67,537) (53,260)
Total Shareholders' Equity 57,455 60,450
$98,372 $108,982
SOURCE STRATTEC SECURITY CORPORATION
CONTACT: Pat Hansen, Vice President and Chief Financial Officer of