STRATTEC SECURITY CORPORATION Reports Fiscal Third Quarter Results
MILWAUKEE, Wis., Apr 10, 2003 /PRNewswire-FirstCall via COMTEX/ -- STRATTEC SECURITY CORPORATION (Nasdaq: STRT) today reported operating results for the fiscal third quarter ended March 30, 2003.
Net sales for the Company's three months ended March 30, 2003 were $49.9 million, compared to net sales of $51.7 million for the three months ended March 31, 2002. Net income for the period was $4.2 million, compared to $4.0 million in the prior year quarter. Diluted earnings per share for the period were $1.11 compared to $.96 in the prior year quarter.
For the nine months ended March 30, 2003, net sales were $146.5 million compared to net sales of $150.3 million in the prior year period. Net income was $12.5 million compared to $10.9 million and diluted earnings per share were $3.22 compared to $2.62 in the prior year.
Sales to STRATTEC's largest customers overall decreased in the current quarter compared to the prior year quarter levels, with General Motors Corporation at $15.0 million compared to $15.7 million, and DaimlerChrysler Corporation at $8.6 million compared to $9.6 million. Sales to Ford Motor Company and Mitsubishi Motor Manufacturing of America, Inc. were flat during the current quarter at $10.6 million and $2.4 million, respectively. Sales to Delphi Corporation increased slightly at $7.6 million compared to $7.4 million in the prior year quarter.
Gross profit margins were 23.4 percent in the current quarter compared to 22.0 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 along with a favorable Mexican Peso to U.S. Dollar exchange rate.
Operating expenses were $5.0 million in the current quarter, approximately the same level as in the prior year quarter.
During the third quarter, 33,000 STRATTEC SECURITY CORPORATION shares were repurchased under the Company's stock repurchase program at a cost of approximately $1.6 million. The Company also contributed $5.0 million to its Pension Fund during the quarter.
Harold M. Stratton II, Chairman of the Board and Chief Executive Officer, commented: "I'm pleased that we continued to show solid operating results during the third quarter ended March 30, 2003 despite an uncertain U.S. economy. Our North American production increased approximately 5% in comparison to the prior year quarter. However, our sales continued to be reduced by product content changes and pre-programmed price reductions as has been the case throughout the current fiscal year. This sales pattern will continue into our fiscal fourth quarter. In addition, certain customers have announced vehicle production cutbacks for the upcoming quarter, while at the same time enhancing incentive programs to encourage consumer buying. The effectiveness of these incentive programs is dependent upon many factors, including the outcome of the war in Iraq. It is therefore difficult to predict the effect these actions will have on our fourth quarter. Regardless, we believe we have positioned ourselves operationally to meet the uncertainty, and anticipate a favorable finish to our fiscal year end in June."
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 30, March 31, March 30, March 31,
2003 2002 2003 2002
(Unaudited) (Unaudited)
Net Sales $49,926 $51,687 $146,512 $150,320
Cost of Goods Sold 38,255 40,313 112,550 118,758
Gross Profit 11,671 11,374 33,962 31,562
Engineering, Selling &
Administrative Expenses 5,043 4,954 14,225 14,596
Income from Operations 6,628 6,420 19,737 16,966
Interest Income 91 119 274 415
Interest Expense - - - -
Other Income (Expense),
Net 21 (142) (227) (49)
6,740 6,397 19,784 17,332
Provision for Income
Taxes 2,493 2,367 7,320 6,413
Net Income $4,247 $4,030 $12,464 $10,919
Earnings Per Share:
Basic $1.13 $.98 $3.28 $2,66
Diluted $1.11 $.96 $3.22 $2.62
Average Basic
Shares Outstanding 3,759 4,130 3,797 4,103
Average Diluted
Shares Outstanding 3,822 4,204 3,867 4,162
Other
Capital Expenditures $1,327 $1,489 $2,700 $3,774
Depreciation &
Amortization $1,968 $2,082 $5,884 $6,230
STRATTEC SECURITY CORPORATION
Condensed Balance Sheet Data
(In Thousands)
March 30, 2003 June 30, 2002
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $27,442 $34,956
Receivables, net 28,230 27,860
Inventories 11,067 8,242
Other current assets 11,623 11,582
Total Current Assets 78,362 82,640
Deferred Income Taxes 469 469
Property, Plant and Equipment, Net 35,042 38,531
$113,873 $121,640
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $16,279 $15,291
Other 15,608 16,234
Total Current Liabilities 31,887 31,525
Borrowings Under Revolving Credit Facility - -
Accrued Pension and Post Retirement
Obligations 11,625 15,448
Shareholders' Equity 167,083 153,644
Less: Treasury Stock (96,722) (78,977)
Total Shareholders' Equity 70,361 74,667
$113,873 $121,640
SOURCE STRATTEC SECURITY CORPORATION
Pat Hansen, Vice President and Chief Financial Officer of STRATTEC SECURITY CORPORATION, +1-414-247-3435
http://www.strattec.com