STRATTEC SECURITY CORPORATION Reports Fiscal Fourth Quarter Results
Net sales for the Company's fourth quarter ended
In the current quarter, our two largest customers,
The bankruptcy filings had little affect on our receivables with Chrysler and GM, as both Companies were able to continue making payments to suppliers for parts they had purchased prior to their bankruptcy filings. We increased our reserve for doubtful accounts at the end of our fiscal third quarter by
During the prior year quarter, a strike by a major supplier to
The sales decreases in the current quarter were experienced across all of our largest customers. Sales to
Gross profit margins were 10.1 percent in the current quarter compared to 9.6 percent in the prior year quarter. The gross profit margins in both the current year quarter and prior year quarter were significantly impacted by our customers' reduced vehicle production volumes which lowered the absorption of our fixed manufacturing costs. The current quarter was favorably impacted by lower purchased material costs for both zinc and brass along with a favorable Mexico Peso to U.S. dollar exchange rate affecting the Company's operations in
Operating expenses were
Reflecting the deepest recession to impact the U.S. and global economies since the Great Depression, and the well-publicized difficulties in the U.S. auto industry of which STRATTEC is a part, net sales for the fiscal year ended
During the current quarter, we changed our method for accounting for inventories from last-in, first out (LIFO) to first-in, first out (FIFO). Both the current and prior year reported information was retrospectively adjusted on a FIFO basis in accordance with Statement of Financial Accounting Standards No. 154.
STRATTEC designs, develops, manufactures and markets automotive Security Products, including mechanical locks and keys, electronically enhanced locks and keys, steering column and instrument panel ignition lock housings; and Access Control Products including latches, power sliding side door systems, power lift gate systems, power deck lid systems, door handles and related products. These products are provided to customers in
The
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
STRATTEC SECURITY CORPORATION
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Results of Operations
(In Thousands except per share amounts)
Fourth Quarter Ended Years Ended
June 28, June 29, June 28, June 29,
2009 2008 2009 2008
----------- ----------- ----------- -----------
(Unaudited) (Note A) (Unaudited) (Note A)
Net Sales $ 28,219 $ 38,567 $ 126,097 $ 159,642
Cost of Goods Sold 25,377 34,867 112,857 134,875
----------- ----------- ----------- -----------
Gross Profit 2,842 3,700 13,240 24,767
Engineering, Selling
& Administrative
Expenses 5,684 6,222 25,480 23,962
Provision for
Doubtful Accounts -- -- 500 --
----------- ----------- ----------- -----------
(Loss) Income from
Operations (2,842) (2,522) (12,740) 805
Interest Income 38 405 731 2,749
Other Income
(Expense), Net 1 (178) 885 230
Minority Interest 187 (146) 801 (76)
----------- ----------- ----------- -----------
(2,616) (2,441) (10,323) 3,708
(Benefit) Provision
for Income Taxes (498) (1,534) (4,201) 927
----------- ----------- ----------- -----------
Net (Loss) Income $ (2,118) $ (907) $ (6,122) $ 2,781
=========== =========== =========== ===========
(Loss) Earnings
Per Share:
Basic $ (0.65) $ (0.26) $ (1.87) $ 0.80
=========== =========== =========== ===========
Diluted $ (0.65) $ (0.26) $ (1.86) $ 0.80
=========== =========== =========== ===========
Average Basic
Shares Outstanding 3,262 3,449 3,280 3,487
Average Diluted
Shares Outstanding 3,266 3,457 3,284 3,494
Other
Capital Expenditures $ 1,563 $ 2,443 $ 12,492 $ 10,930
Depreciation &
Amortization $ 1,736 $ 1,669 $ 6,264 $ 6,830
NOTE A: Prior year balances have been restated to reflect the
change from LIFO to FIFO accounting for inventories.
STRATTEC SECURITY CORPORATION
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Condensed Balance Sheet Data
(In Thousands)
June 28, 2009 June 29, 2008
------------- -------------
(Unaudited) (Note A)
ASSETS
Current Assets:
Cash and cash equivalents $ 22,764 $ 51,501
Receivables, net 17,235 23,518
Inventories 16,589 14,314
Other current assets 15,970 16,441
------------- -------------
Total Current Assets 72,558 105,774
Deferred Income Taxes 13,143 3,684
Investment in Joint Venture 4,483 3,642
Prepaid Pension Cost -- 758
Other Long Term Assets 1,069 27
Property, Plant and Equipment,
Net 36,936 30,336
------------- -------------
$ 128,189 $ 144,221
============= =============
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current Liabilities:
Accounts Payable $ 11,369 $ 15,974
Other 19,479 16,965
------------- -------------
Total Current Liabilities 30,848 32,939
Borrowings Under Line of Credit
Facility -- --
Accrued Pension and Post
Retirement Obligations 24,784 12,389
Minority Interest 1,139 953
Shareholders' Equity 238,601 245,351
Accumulated Other Comprehensive
Loss (31,094) (17,495)
Less: Treasury Stock (136,089) (129,916)
------------- -------------
Total Shareholders' Equity 71,418 97,940
------------- -------------
$ 128,189 $ 144,221
============= =============
NOTE A: Prior year balances have been restated to reflect the
change from LIFO to FIFO accounting for inventories.
STRATTEC SECURITY CORPORATION
Condensed Cash Flow Statement Data
(In Thousands)
Fourth Quarter Ended Years Ended
June 28, June 29, June 28, June 29,
2009 2008 2009 2008
----------- ----------- ----------- -----------
(Unaudited) (Note A) (Unaudited) (Note A)
Cash Flows from
Operating Activities:
Net (Loss) Income $ (2,118) $ (907) $ (6,122) $ 2,781
Adjustment to
Reconcile Net (Loss)
Income to Cash
Provided (Used) in
Operating Activities:
Minority Interest (180) 136 (780) 25
Depreciation and
Amortization 1,736 1,669 6,264 6,830
Foreign Currency
Transaction Loss
(Gain) 315 243 (918) 320
Deferred Income
Taxes (2,986) 622 (2,986) 622
Stock Based
Compensation
Expense 110 125 419 741
Provision for
Doubtful Accounts -- -- 500 --
Change in
Operating Assets/
Liabilities 5,195 (6,006) (3,024) (7,104)
Other, net 8 20 (189) (398)
----------- ----------- ----------- -----------
Net Cash Provided
(Used) in Operating
Activities 2,080 (4,098) (6,836) 3,817
Cash Flows from
Investing Activities:
Investment in
Joint Ventures (163) -- (551) --
Purchase of Delphi
Power Products -- -- (4,931) --
Additions to
Property, Plant
and Equipment (1,563) (2,443) (12,492) (10,930)
Proceeds from Sale
of Property, Plant
and Equipment 8 -- 8 --
----------- ----------- ----------- -----------
Net Cash Used in
Investing Activities (1,718) (2,443) (17,966) (10,930)
Cash Flow from
Financing Activities:
Purchase of Common
Stock -- (775) (6,214) (3,109)
Dividends Paid -- (524) (1,511) (5,133)
Loan from Minority
Interest -- 250 2,175 1,050
Contribution from
Minority Interest -- -- 986 349
Exercise of Stock
Options and
Employee Stock
Purchases 10 9 40 30
----------- ----------- ----------- -----------
Net Cash Provided
(Used) in Financing
Activities 10 (1,040) (4,524) (6,813)
Foreign Currency
Impact on Cash (206) (48) 589 (64)
----------- ----------- ----------- -----------
Net Increase
(Decrease) in Cash
& Cash Equivalents 166 (7,629) (28,737) (13,990)
Cash and Cash
Equivalents:
Beginning of Period 22,598 59,130 51,501 65,491
----------- ----------- ----------- -----------
End of Period $ 22,764 $ 51,501 $ 22,764 $ 51,501
=========== =========== =========== ===========
NOTE A: Prior year balances have been restated to reflect the
change from LIFO to FIFO accounting for inventories.
CONTACT: Chief Financial Officer
414-247-3435
www.strattec.com