STRATTEC SECURITY CORPORATION Reports Fiscal Fourth Quarter and Year End Results
Net sales for the fourth quarter ended June 30, 2002 were $57.0 million, compared to net sales of $52.4 million for the fourth quarter ended July 1, 2001. Net income was $4.7 million, compared to $3.1 million in the prior year quarter. Diluted earnings per share for the fourth quarter were $1.11 compared to $.75 in the prior year quarter. During the prior year quarter, operating results were negatively impacted by a 16-day strike at our Milwaukee facility.
Sales to STRATTEC's largest customers increased in the current quarter compared to the prior year quarter levels, with General Motors Corporation at $17.7 million compared to $15.7 million, Delphi Corporation at $8.2 million compared to $6.9 million, Ford Motor Company at $12.2 million compared to $11.9 million, DaimlerChrysler Corporation at $10.5 million compared to $9.8 million and Mitsubishi Motor Manufacturing of America, Inc. at $2.7 million compared to $2.4 million.
Gross profit margins were 21.7 percent in the current quarter compared to 18.5 percent in the prior year quarter. The impact of the prior year quarter strike reduced overall gross profit margins by 2 percent.
Operating expenses were $5.0 million in the current quarter, compared to $4.8 million in the prior year quarter. The increase was primarily related to spending associated with the development of new products.
For the year ended June 30, 2002, net sales were $207.3 million, compared to net sales of $203.0 million in the prior year period. Net income was $15.6 million compared to $13.0 million and diluted earnings per share were $3.73 compared to $2.96.
During the fourth quarter, 144,000 STRATTEC SECURITY CORPORATION shares were repurchased under the Company's stock repurchase program at a cost of approximately $7.7 million. For the year ended June 30, 2002, a total of 216,000 shares were repurchased at a cost of approximately $10.2 million. In addition, during July, 2002, the Company repurchased 136,000 shares at a cost of $5.7 million and the Company's Board of Directors authorized the repurchase of an additional 400,000 shares (approximately 10% of currently outstanding shares) under its' ongoing stock repurchase program. Shares may be repurchased from time to time in open market transactions and will be held as Treasury Shares.
Harold M. Stratton II, Chairman of the Board and Chief Executive Officer, commented: "Our fourth quarter and fiscal year operating results continued to be favorably impacted by our ongoing cost reduction efforts and a more stable customer vehicle production schedule resulting primarily from consumer financing and cash rebate incentives offered by the automotive manufacturers. The more stable operating environment and cost reduction activities also enabled us to further strengthen our balance sheet and cash flow positions. With the automakers' continued incentive programs and resulting robust vehicle build schedules, we anticipate continued positive results for our new fiscal year."
STRATTEC SECURITY CORPORATION designs, develops, manufactures and markets mechanical locks, electro-mechanical locks and related access control products for North American and 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)
Fourth Quarter Ended Years Ended
June 30, July 1, June 30, July 1,
2002 2001 2002 2001
(Unaudited)
Net Sales $ 56,966 $ 52,385 $ 207,286 $ 202,973
Cost of Goods Sold 44,612 42,709 163,370 162,735
Gross Profit 12,354 9,676 43,916 40,238
Engineering, Selling &
Administrative Expenses 5,048 4,804 19,644 19,676
Income from Operations 7,306 4,872 24,272 20,562
Interest Income 123 107 538 628
Interest Expense --- --- --- ---
Other Income (Expense), Net 7 (356) (42) (514)
7,436 4,623 24,768 20,676
Provision for Income Taxes 2,751 1,518 9,164 7,650
Net Income $4,685 $3,105 $15,604 $13,026
Earnings Per Share:
Basic $1.13 $.77 $3.80 $3.02
Diluted $1.11 $.75 $3.73 $2.96
Average Basic
Shares Outstanding 4,130 4,050 4,109 4,310
Average Diluted
Shares Outstanding 4,235 4,130 4,185 4,401
Other
Capital Expenditures 1,523 996 5,297 7,548
Depreciation & Amortization 2,040 2,033 8,270 7,939
STRATTEC SECURITY CORPORATION
Condensed Balance Sheet Data
(In Thousands)
June 30, 2002 July 1, 2001
ASSETS
Current Assets:
Cash and cash equivalents $34,956 $15,298
Receivables, net 27,860 27,189
Inventories 8,242 8,605
Other current assets 11,189 8,575
Total Current Assets 82,247 59,667
Deferred Income Taxes 469 130
Investment in Joint Venture 393 ---
Property, Plant and Equipment, Net 38,531 41,851
$121,640 $101,648
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $15,291 $14,178
Other 16,234 12,315
Total Current Liabilities 31,525 26,493
Borrowings Under Revolving Credit Facility --- ---
Accrued Pension and Post Retirement
Obligations 15,448 15,145
Shareholders' Equity 153,644 128,848
Less: Treasury Stock (78,977) (68,838)
Total Shareholders' Equity 74,667 60,010
$121,640 $101,648
SOURCE STRATTEC SECURITY CORPORATION
CONTACT: Pat Hansen, Vice President and Chief Financial Officer of
STRATTEC SECURITY CORPORATION, +1-414-247-3435
URL: http://www.strattec.com
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