STRATTEC SECURITY CORPORATION Reports Fiscal First Quarter Results
MILWAUKEE, Oct 21, 2010 (GlobeNewswire via COMTEX) --
STRATTEC SECURITY CORPORATION (Nasdaq:STRT) today reported operating results for the fiscal first quarter ended September 26, 2010.
Net sales for the Company's first quarter ended September 26, 2010 were $59.8 million, compared to net sales of $41.2 million for the prior year quarter ended September 27, 2009. Net income for the period was $1,418,000, compared to net income of $943,000 in the prior year quarter. Diluted earnings per share for the current period were $.43 compared to diluted earnings per share of $.29 in the prior year quarter. The higher sales and net income for the current year quarter can be attributed to the continuation of the auto industry's positive recovery trend that started in August 2009 following the U.S. Government's "Cash for Clunkers" program. In the prior year quarter, the Company's two largest customers, Chrysler and General Motors emerged from bankruptcy and had several customer assembly plants shutdown during the month of July.
Sales to STRATTEC's largest customers overall increased in the current quarter compared to the prior year quarter levels due to higher customer vehicle production volumes. Sales to Chrysler Group LLC were $19.6 million in the current quarter compared to $12.8 million in the prior year quarter. Sales to General Motors Company were $14.8 million compared to $9.9 million. Included in the current quarter sales to General Motors were $1.7 million of sales to Nexteer Automotive, formerly a unit of Delphi Corporation, which is now owned by General Motors. Sales to Ford Motor Company were $5.5 million compared to $3.7 million. Net sales to Hyundai/Kia were $4.3 million in the current quarter compared to $3.0 million in the prior year quarter.
Gross profit margin was 17.0 percent in the current quarter compared to 16.5 percent in the prior year quarter. The higher gross profit margin in the current year quarter was primarily the result of higher customer vehicle production volumes which increased overhead absorption of STRATTEC's manufacturing costs, offset by expense provisions for the Company's Economic Value Added (EVA(R)) incentive bonus plan. These bonus expenses affect both cost of goods sold and operating expenses. Also impacting the current quarter results were lower purchased raw material costs for zinc offset partially by higher purchased raw material costs for brass.
Operating expenses were $8.2 million in the current quarter, compared to $6.2 million in the prior year quarter. As referenced above, this increase was primarily the result of the incentive bonus expense incurred during the first quarter of fiscal 2011. Expenses in the prior year period were also lower due to temporary actions implemented with respect to the Company's U.S. salaried work force to help conserve cash during the recession. These actions included reductions in wages and the Company 401(k) match, as well as implementing several unpaid work furlough days.
On August 4, 2010, STRATTEC SECURITY CORPORATION'S Board of Directors declared a special dividend of $1.20 per share. The special dividend will be paid on October 29, 2010 to shareholders of record at the close of business on October 8, 2010.
At the Company's 2010 Annual Meeting held on October 5, 2010, STRATTEC Shareholders re-elected Frank J. Krejci to the Company's Board of Directors for an additional three-year term. The Shareholders also approved a proposal to amend and restate the STRATTEC SECURITY CORPORATION Stock Incentive Plan to include the Company's outside (non-employee) directors as eligible participants under the plan.
EVA(R) is a registered trademark of Stern, Stewart & Co.
STRATTEC designs, develops, manufactures and markets automotive Access Control Products, including mechanical locks and keys, electronically enhanced locks and keys, steering column and instrument panel ignition lock housings, 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 North America, and on a global basis through the VAST Alliance in which STRATTEC participates with WITTE Automotive of Velbert, Germany and ADAC Automotive of Grand Rapids, Michigan. STRATTEC's history in the automotive business spans over 100 years.
The STRATTEC SECURITY CORPORATION logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4700
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
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Results of Operations
(In Thousands except per share amounts)
(Unaudited)
First Quarter Ended
September September
26, 2010 27, 2009
--------- ---------
Net Sales $59,849 $41,181
Cost of Goods Sold 49,696 34,383
--------- ---------
Gross Profit 10,153 6,798
Engineering, Selling &
Administrative Expenses 8,165 6,199
Recovery of Doubtful
Accounts -- (220)
--------- ---------
Income from Operations 1,988 819
Interest Income 23 23
Other Income, Net 570 428
--------- ---------
2,581 1,270
Provision for Income
Taxes 801 341
--------- ---------
Net Income 1,780 929
Net (Income) Loss
Attributable
to Non-Controlling
Interest (362) 14
--------- ---------
Net Income Attributable
to
STRATTEC SECURITY
CORPORATION $1,418 $943
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Earnings Per Share:
Basic $0.43 $0.29
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Diluted $0.43 $0.29
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Average Basic
Shares Outstanding 3,280 3,266
Average Diluted
Shares Outstanding 3,299 3,271
Other
Capital Expenditures $1,776 $1,762
Depreciation &
Amortization $1,614 $1,751
STRATTEC SECURITY CORPORATION
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Condensed Balance Sheet Data
(In Thousands)
September June 27,
26, 2010 2010
----------- ---------
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $17,322 $21,867
Restricted Cash (A) 2,100 2,100
Receivables, net 36,064 36,084
Inventories 19,398 17,086
Other current assets 13,999 12,871
----------- ---------
Total Current Assets 88,883 90,008
Deferred Income Taxes 10,534 10,534
Loan to Joint Venture 1,500 1,500
Investment in Joint Venture 5,631 5,176
Other Long Term Assets 709 733
Property, Plant and
Equipment, Net 37,280 37,051
----------- ---------
$144,537 $145,002
----------- ---------
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $22,000 $21,192
Dividends Payable 3,987 --
Other 21,861 25,038
----------- ---------
Total Current
Liabilities 47,848 46,230
Borrowings Under Line of
Credit Facility -- --
Accrued Pension and Post
Retirement Obligations 22,802 22,982
Shareholders' Equity 239,695 242,115
Accumulated Other
Comprehensive Loss (31,778) (31,941)
Less: Treasury Stock (136,037) (136,047)
----------- ---------
Total STRATTEC SECURITY
CORPORATION
Shareholders' Equity 71,880 74,127
Non-Controlling Interest 2,007 1,663
----------- ---------
Total Shareholders' Equity 73,887 75,790
----------- ---------
$144,537 $145,002
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NOTE A: Represents a commercial guarantee by STRATTEC SECURITY CORPORATION relating to a promissory note issued by Vehicle Access Systems Technology, LLC (VAST, LLC).
STRATTEC SECURITY CORPORATION
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Condensed Cash Flow Statement Data
(In Thousands)
(Unaudited)
First Quarter Ended
September September
26, 2010 27, 2009
--------- ---------
Cash Flows from Operating Activities:
Net Income $1,418 $943
Adjustment to Reconcile Net Income to
Cash Used in Operating Activities:
Non-Controlling Interest 362 (14)
Equity Earnings in VAST LLC Joint
Venture (422) (96)
Depreciation and Amortization 1,638 1,751
Foreign Currency Transaction Loss
(Gain) 30 (65)
Stock Based Compensation Expense 143 106
Recovery of Doubtful Accounts -- (220)
Change in Operating
Assets/Liabilities (5,453) (1,251)
Other, net 5 32
--------- ---------
Net Cash (Used In) Provided by
Operating Activities (2,279) 1,186
Cash Flows from Investing Activities:
Purchase of Additional Interest in
ADAC-STRATTEC LLC (22) --
Additions to Property, Plant and
Equipment (1,776) (1,762)
--------- ---------
Net Cash Used in Investing Activities (1,798) (1,762)
Cash Flow from Financing Activities:
Repayment of Loan to Related Parties (500) --
Exercise of Stock Options and
Employee
Stock Purchases 13 11
--------- ---------
Net Cash (Used In) Provided by
Financing Activities (487) 11
Foreign Currency Impact on Cash 19 31
--------- ---------
Net Decrease in Cash & Cash Equivalents (4,545) (534)
Cash and Cash Equivalents:
Beginning of Period 21,867 22,764
--------- ---------
End of Period $17,322 $22,230
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This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: STRATTEC SECURITY CORPORATION
CONTACT: STRATTEC SECURITY CORPORATION Pat Hansen, Senior Vice President and Chief Financial Officer 414-247-3435 www.strattec.com