MILWAUKEE, Jan. 13 /PRNewswire-FirstCall/ -- STRATTEC SECURITY CORPORATION (Nasdaq: STRT) today reported operating results for the fiscal second quarter ended December 26, 2004.

Net sales for the Company's second quarter ended December 26, 2004 were $48.4 million, compared to net sales of $50.0 million for the second quarter ended December 28, 2003. Net income for the period was $4.4 million, compared to $4.6 million in the prior year quarter. Diluted earnings per share for the period were $1.15 compared to $1.21 in the prior year quarter.

For the six months ended December 26, 2004, net sales were $93.0 million compared to net sales of $94.4 million in the prior year period. Net income was $8.1 million compared to net income of $8.2 million in the prior year period and diluted earnings per share were $2.09 compared to $2.15.

Overall sales to STRATTEC's largest customers decreased in the current quarter compared to the prior year quarter levels. Sales to DaimlerChrysler Corporation increased significantly during the current quarter to $12.8 million compared to $9.5 million due to a more favorable vehicle content mix. Sales to Delphi Corporation were flat at $8.0 million. Sales to General Motors Corporation were $10.8 million compared to $14.0 million due to a combination of price reductions, discontinued models and lower levels of production on certain vehicles. Sales to Mitsubishi Motor Manufacturing of America, Inc. were $1.0 million compared to $2.1 million due to lower vehicle production volumes. Sales to Ford Motor Company decreased slightly at $8.5 million compared to $9.0 million due to pre-programmed price reductions. The Ford Motor Company sales in the current quarter do not reflect approximately $600,000 of new lockset content relating to the Ford Mustang. This vehicle content is sold directly to Ford's joint venture partner AutoAlliance.

Gross profit margins were 23.6 percent in the current quarter compared to 24.2 percent in the prior year quarter. The gross profit margin decline during the current quarter was attributed primarily to product sales mix, lower production volumes, and higher purchased material costs for brass and zinc.

Operating expenses were $4.8 million in the current quarter, compared to $5.0 million in the prior year quarter.

During the quarter, the Company contributed $3.0 million to its Pension Fund and repurchased 12,500 STRATTEC SECURITY CORPORATION shares under the Company's stock repurchase program at a cost of $787,000.

STRATTEC SECURITY CORPORATION designs, develops, manufactures and markets mechanical locks, electro-mechanical locks and related access control products for North American 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)

                           Second Quarter Ended       Six Months Ended
                       December 26   December 28 December 26  December 28
                              2004         2003         2004         2003
                                (Unaudited)                (Unaudited)
    Net Sales             $ 48,436     $ 50,014     $ 93,027     $ 94,434

    Cost of Goods Sold      36,990       37,912       70,808       71,874

    Gross Profit            11,446       12,102       22,219       22,560

    Engineering, Selling &
    Administrative Expenses  4,848        4,983       10,014        9,901

    Income from Operations   6,598        7,119       12,205       12,659

    Interest Income            233           88          416          177

    Interest Expense             -            -            -            -

    Other Income, Net          196          184          159          286

                             7,027        7,391       12,780       13,122

    Provision for Income
     Taxes                   2,600        2,772        4,729        4,921


    Net Income              $4,427       $4,619       $8,051       $8,201

    Earnings Per Share:
    Basic                    $1.16        $1.23        $2.12        $2.18
    Diluted                  $1.15        $1.21        $2.09        $2.15

    Average Basic
      Shares Outstanding     3,806        3,765        3,806        3,762

    Average Diluted
      Shares Outstanding     3,840        3,824        3,847        3,821


    Other
      Capital Expenditures  $1,322       $1,926       $2,020       $3,022
      Depreciation &
       Amortization         $1,817       $1,942       $3,681       $3,959



                        STRATTEC SECURITY CORPORATION

                         Condensed Balance Sheet Data
                                (In Thousands)

                                           December 26, 2004  June 27, 2004
                                                  (Unaudited)

    ASSETS
    Current Assets:
      Cash and cash equivalents                      $50,163        $54,231
      Receivables, net                                27,693         30,931
      Inventories                                     11,098          8,361
      Other current assets                             9,655         10,903
        Total Current Assets                          98,609        104,426
      Investment in Joint Ventures                     1,365          1,336
      Prepaid Pension Obligation                       1,011              -
      Property, Plant and Equipment, Net              29,700         31,428
                                                    $130,685       $137,190


    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current Liabilities:
      Accounts Payable                               $16,583        $18,787
      Other                                           12,947         16,497
        Total Current Liabilities                     29,530         35,284
      Borrowings Under Revolving Credit Facility           -              -
      Deferred Income Taxes                              543            543
      Accrued Pension and Post Retirement Obligations  5,062         11,511
      Shareholders' Equity                           212,565        200,713
      Accumulated Other Comprehensive Loss            (5,291)        (5,385)
        Less: Treasury Stock                        (111,724)      (105,476)
        Total Shareholders' Equity                    95,550          89,852
                                                    $130,685        $137,190

SOURCE STRATTEC SECURITY CORPORATION
CONTACT: Pat Hansen Vice President and Chief Financial Officer of STRATTEC SECURITY CORPORATION, +1-414-247-3435/ /Web site: http://www.strattec.com