STRATTEC SECURITY CORPORATION Reports Fiscal Fourth Quarter Results
MILWAUKEE, Aug 9, 2011 (GlobeNewswire via COMTEX) -- STRATTEC SECURITY CORPORATION (Nasdaq:STRT) today reported operating results for the fiscal fourth quarter and year ended July 3, 2011.
Fiscal 2011 fourth quarter and full year net sales and income significantly improved over fiscal 2010, continuing the positive trend which began early in the Company's prior fiscal year. The Company's fiscal 2011 net sales reached a record high, exceeding the previous record by approximately 16%.
Net sales for the fourth quarter ended July 3, 2011 were $74.2 million, compared to net sales of $61.4 million for the fourth quarter ended June 27, 2010. The 2011 fiscal fourth quarter was 14 weeks while 2010's fourth quarter was the typical 13 weeks. The impact of the additional week of customer shipments during the current year quarter increased sales by approximately $4.5 million. Net income was $2.7 million during the current quarter, compared to $853,000 in the prior year quarter. Diluted earnings per share for the fourth quarter were $.81 compared to $.26 in the prior year quarter.
Sales to STRATTEC's largest customers overall increased in the current quarter compared to the prior year quarter levels. Sales to Chrysler Group LLC were $22.1 million in the current quarter compared to $21.9 million in the prior year quarter. Sales to General Motors Company were $17.6 million in the current quarter compared to $16.0 million in the prior year quarter. Included in the prior quarter sales to General Motors were $1.9 million of sales to Nexteer Automotive, formerly a unit of General Motors. Sales to Ford Motor Company were $8.3 million in the current quarter compared to $5.1 million in the prior year quarter. Sales to Hyundai/Kia were $4.0 million in the current quarter compared to $3.1 million in the prior year quarter.
Gross profit margins were 17.4 percent in the current quarter compared to 15.9 percent in the prior year quarter. The higher gross profit margin in the current year quarter was primarily the result of a combination of higher content on certain new products we supply and higher customer vehicle production volumes which increased overhead absorption of STRATTEC's manufacturing costs. Also favorably impacting the current quarter were lower expense provisions for the Company's incentive bonus plans as compared to the prior year quarter. Items negatively impacting the current quarter were higher purchased raw material costs for zinc and brass along with an unfavorable Mexico Peso to U.S. dollar exchange rate affecting the Company's operations in Mexico, which items collectively reduced the current quarter gross profit margin by 1.7 percentage points.
Operating expenses were $9.0 million in the current quarter, compared to $8.7 million in the prior year quarter. This increase was primarily due to the extra week of expense offset by lower expense provisions under the Company's incentive bonus plans incurred in fiscal 2011 compared to fiscal 2010.
The provision for income taxes in both the current and previous year quarters included a favorable adjustment primarily relating to foreign taxes.
For the fiscal year ended July 3, 2011, net sales were $260.9 million compared to net sales of $208.0 million in the prior year period. Net income was $5.4 million compared to net income of $3.4 million in the prior year period and diluted earnings per share for the current year were $1.63 compared to diluted earnings per share of $1.04 in the prior year.
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 a unique strategic relationship with WITTE Automotive of Velbert, Germany and ADAC Automotive of Grand Rapids, Michigan. Under this relationship, STRATTEC, WITTE and ADAC market our products to global customers under the "VAST" brand name. 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 (including fluctuations in the cost of raw materials). 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)
Fourth Quarter Ended Years Ended
June
July 3, 27, July 3, June 27,
2011 2010 2011 2010
----------- ------- ----------- --------
(Unaudited) (Unaudited)
Net Sales $74,222 $61,360 $260,933 $207,964
Cost of Goods Sold 61,304 51,630 218,770 174,922
----------- ------- ----------- --------
Gross Profit 12,918 9,730 42,163 33,042
Engineering, Selling &
Administrative Expenses 9,007 8,665 33,443 29,939
Impairment Charge -- -- -- 223
Environmental -- -- -- (1,125)
Recovery of Doubtful
Accounts -- -- -- (421)
----------- ------- ----------- --------
Income from Operations 3,911 1,065 8,720 4,426
Interest Income 35 28 119 86
Interest Expense-Related
Parties (41) (54) (175) (225)
Other Income, Net 567 354 1,466 1,320
----------- ------- ----------- --------
4,472 1,393 10,130 5,607
Provision for Income
Taxes 1,146 276 2,540 1,666
----------- ------- ----------- --------
Net Income $3,326 $1,117 $7,590 $3,941
=========== ======= =========== ========
Net Income Attributed
to Non-Controlling
Interest 628 264 2,172 520
----------- ------- ----------- --------
Net Income Attributed
to STRATTEC SECURITY
CORPORATION $ 2,698 $853 $5,418 $3,421
=========== ======= =========== ========
Earnings Per Share:
Basic $0.82 $0.26 $1.65 $1.05
=========== ======= =========== ========
Diluted $0.81 $0.26 $1.63 $1.04
=========== ======= =========== ========
Average Basic
Shares Outstanding 3,288 3,275 3,285 3,271
Average Diluted
Shares Outstanding 3,326 3,296 3,323 3,280
Other
Capital Expenditures $3,804 $1,958 $9,531 $6,903
Depreciation &
Amortization $1,715 $1,808 $6,619 $7,143
STRATTEC SECURITY CORPORATION
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Condensed Balance Sheet Data
(In Thousands)
July 3, June 27,
2011 2010
----------- ----------
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 17,250 $ 21,867
Restricted Cash (A) -- 2,100
Receivables, net 39,649 36,084
Inventories 22,135 17,086
Other current assets 15,368 12,871
----------- ----------
Total Current Assets 94,402 90,008
Deferred Income Taxes 3,639 10,534
Loan to Joint Venture 1,500 1,500
Investment in Joint Venture 7,276 5,176
Other Long Term Assets 635 733
Property, Plant and
Equipment, Net 40,636 37,051
----------- ----------
$ 148,088 $ 145,002
=========== ==========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current Liabilities:
Accounts Payable $ 22,851 $ 21,192
Other 28,137 25,038
----------- ----------
Total Current Liabilities 50,988 46,230
Borrowings Under Line of
Credit Facility -- --
Accrued Pension and Post
Retirement Obligations 7,036 22,982
Shareholders' Equity 243,974 242,115
Accumulated Other
Comprehensive Loss (21,750) (31,941)
Less: Treasury Stock (136,009) (136,047)
----------- ----------
Total STRATTEC SECURITY
CORPORATION
Shareholders' Equity 86,215 74,127
Non-Controlling Interest 3,849 1,663
----------- ----------
Total Shareholders' Equity 90,064 75,790
----------- ----------
$ 148,088 $ 145,002
=========== ==========
NOTE A: Represents a commercial guarantee by STRATTEC
SECURITY CORPORATION relating to a
promissory note issued by Vehicle Access Systems
Technology, LLC (VAST, LLC). This guarantee was
canceled in October 2010.
STRATTEC SECURITY CORPORATION
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Condensed Cash Flow Statement Data
(In Thousands)
Fourth Quarter Ended Years Ended
July 3, June 27, July 3, June 27,
2011 2010 2011 2010
----------- --------- ----------- ---------
(Unaudited) (Unaudited)
Cash Flows from Operating Activities:
Net Income $3,326 $1,117 $7,590 $3,941
Adjustment to Reconcile Net Income to
Cash Provided by Operating
Activities:
Equity Earnings in Joint Venture (246) (369) (1,246) (1,008)
Depreciation and Amortization 1,715 1,808 6,619 7,143
Foreign Currency Transaction Loss
(Gain) 278 (42) 836 283
Unrealized Gain on Foreign Currency
Option Contracts (359) -- (245) --
Deferred Income Taxes (177) 170 (177) 3,428
Stock Based Compensation Expense 168 128 621 468
Provision (Recovery) for Doubtful
Accounts -- -- -- (421)
Curtailment Loss -- -- -- 505
Impairment Charge -- -- -- 223
Environmental -- -- -- (1,125)
Change in Operating
Assets/Liabilities 4,011 5,737 (5,639) (3,425)
Other, net (37) 18 12 53
----------- --------- ----------- ---------
Net Cash Provided by Operating
Activities 8,679 8,567 8,371 10,065
Cash Flows from Investing Activities:
Investment in Joint Ventures (150) -- (450) (100)
Purchase of Additional Interest in
Minority
Owned Subsidiaries -- -- (22) --
Restricted Cash -- -- 2,100 (2,100)
Loan to Joint Venture -- -- -- (2,500)
Proceeds from Repayment of Loan to
Joint Venture -- -- -- 1,000
Additions to Property, Plant and
Equipment (3,804) (1,958) (9,531) (6,903)
Proceeds from Sale of Property,
Plant
and Equipment 90 11 111 21
----------- --------- ----------- ---------
Net Cash Used in Investing Activities (3,864) (1,947) (7,792) (10,582)
Cash Flow from Financing Activities:
Dividends Paid -- -- (3,989) --
Repayment of Loan to Related Parties (300) -- (1,150) (225)
Excess Tax Benefits from Stock Based
Compensation 12 9 12 9
Exercise of Stock Options and
Employee
Stock Purchases 48 39 90 72
----------- --------- ----------- ---------
Net Cash (Used in) Provided by
Financing Activities (240) 48 (5,037) (144)
Foreign Currency Impact on Cash (5) 1 (159) (236)
----------- --------- ----------- ---------
Net Increase (Decrease) in Cash &
Cash Equivalents 4,570 6,669 (4,617) (897)
Cash and Cash Equivalents:
Beginning of Period 12,680 15,198 21,867 22,764
----------- --------- ----------- ---------
End of Period $ 17,250 $ 21,867 $ 17,250 $ 21,867
=========== ========= =========== =========
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: STRATTEC SECURITY CORPORATION
CONTACT: Pat Hansen
Senior Vice President and
Chief Financial Officer
414-247-3435
www.strattec.com