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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

__________________

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): April 19, 2007

STRATTEC SECURITY CORPORATION
(Exact name of registrant as specified in its charter)

Wisconsin
(State or other jurisdiction of incorporation)

0-25150
  
39-1804239
(Commission File Number)
  
(I.R.S. Employer I.D. Number)

3333 West Good Hope Road
Milwaukee, WI
  
 
53209
(Address of Principal Executive Offices)
  
(Zip Code)

(414) 247-3333
(Registrant's telephone number; including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
        o    Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
 
        o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
 
        o    Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
 
o    Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))



Section 2 - Financial Information

Item 2.02. Results of Operations and Financial Condition.

On April 19, 2007, STRATTEC SECURITY CORPORATION issued a press release (the "Press Release") announcing results for the fiscal third quarter ended April 1, 2007. A copy of the Press Release is attached as Exhibit 99.1 to this report. The attached Exhibit 99.1 is furnished pursuant to Item 2.02 of Form 8-K.

The information in this Form 8-K and the Exhibit attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in such filing.

Section 9 - Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits.

(c)  Exhibits

99.1 -- Press Release of STRATTEC SECURITY CORPORATION, issued April 19, 2007.
 

 

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

STRATTEC SECURITY CORPORATION
Date:  April 20, 2007
BY  /s/ Patrick J. Hansen                                     
Patrick J. Hansen, Senior Vice President
and Chief Financial Officer

 
 
 
 
 
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Exhibit 99.1 to STRATTEC April 19, 2007 Form 8-K -

EXHIBIT 99.1


 
FOR RELEASE AT 3:00 PM CDT

Contact: Pat Hansen
Senior Vice President and
Chief Financial Officer
414-247-3435
www.strattec.com


STRATTEC SECURITY CORPORATION
REPORTS FISCAL THIRD QUARTER RESULTS
 

Milwaukee, Wisconsin - April 19, 2007 -- STRATTEC SECURITY CORPORATION (NASDAQ:STRT) today reported operating results for the fiscal third quarter ended April 1, 2007.

Net sales for the Company’s three months ended April 1, 2007 were $45.6 million, compared to net sales of $46.6 million for the three months ended April 2, 2006. Net income for the period was $2.9 million, compared to $4.1 million in the prior year quarter. Diluted earnings per share for the period were $.82 compared to $1.10 in the prior year quarter.

During the prior year quarter, the Company sold approximately $3.4 million of pre-petition Chapter 11 accounts receivable due from Delphi Corporation to a third party for $1.78 million. As a result, this increased the prior year quarter operating results by $1.58 million ($994,000 after tax) and increased the prior year quarter diluted earnings per share by $.27. For further explanation see Note (A) in the “Results of Operations.”
 
 
 
For the nine months ended April 1, 2007, net sales were $121.6 million compared to net sales of $134.6 million in the prior year period. Net income was $4.7 million compared to $8.5 million and diluted earnings per share were $1.33 compared to $2.27 in the prior year.
 
Sales to STRATTEC’s largest customers overall decreased in the current quarter compared to the prior year quarter levels. Sales to DaimlerChrysler Corporation increased slightly during the current quarter to $15.9 million compared to $15.7 million due to additional product content. Sales to General Motors Corporation were $9.5 million compared to $8.5 million due to higher product content on certain GM vehicles. Sales to Delphi Corporation were $4.8 million compared to $6.7 million due primarily to reduced component content. Sales to Ford Motor Company were $5.7 million compared to $6.9 million due to lower Ford vehicle production volumes. Sales to Mitsubishi Motor Manufacturing of America were $525,000 compared to $1.3 million due to the previously announced phase-out of this customer relationship.

Gross profit margins were 18.3 percent in the current quarter compared to 19.6 percent in the prior year quarter. The lower gross profit margins in the current year quarter were primarily the result of higher purchased raw material costs for brass and zinc that reduced gross profit margins by $2.2 million or approximately 4.9% from the prior year quarter. Despite the decline in the current quarter’s gross margin as compared to the prior year, this quarter’s gross margin improved over those reported for the first six months of this fiscal year. The improvement reflects two positive developments. First, the higher raw material costs we have been experiencing were partially offset by raw material adjustments received from some of our customers. Second, we began to experience the results of our cost reduction activities implemented during the previously reported quarters.

Operating expenses were $5.0 million in the current quarter, compared to $5.5 million in the prior year quarter.

Provision for income taxes in the current quarter was our normal effective income tax rate of 37% while the prior year quarter included a favorable State income tax adjustment that positively impacted diluted earnings per share by $.04.

During the third quarter, the Company contributed $4.0 million to its Pension Trust.

STRATTEC designs, develops, manufacturers and markets mechanical locks and keys, electronically enhanced locks and keys, steering column and instrument panel ignition lock housings, latches and related access control products for North American automotive customers, and for global automotive manufacturers through the VAST Alliance in which it participates with WITTE Automotive of Velbert, Germany and ADAC Plastics, Inc. of Grand Rapids, Michigan. The Company’s history in the automotive business spans nearly 100 years.

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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.


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STRATTEC SECURITY CORPORATION
Results of Operations
(In Thousands except per share amounts)

 
     
Third Quarter Ended
    
Nine Months Ended
  
 
 
 
April 1, 2007
 
 
April 2, 2006
    
April 1, 2007 
    
April 2, 2006
  
     
(Unaudited)
    
(Unaudited)
  
                           
Net Sales
  
$
45,647
  
$
46,575
  
$
121,610
  
$
134,646
  
Cost of Goods Sold
    
37,293
    
37,453
    
102,934
    
107,208
  
Gross Profit
    
8,354
    
9,122
    
18,676
    
27,438
  
                           
Engineering, Selling &
                         
Administrative Expenses
    
4,974
    
5,467
    
14,882
    
16,246
  
Provision (Recovery) for Doubtful
                          
Accounts, net
    
-
    
(1,578
)(A)
  
-
    
1,622
  
Income from Operations
    
3,380
    
5,233
    
3,794
    
9,570
  
                           
Interest Income
    
879
    
670
    
2,706
    
1,733
  
Interest Expense
    
-
    
-
    
-
    
-
  
Other Income, Net
    
341
    
408
    
490
    
572
  
Minority Interest
    
25
    
-
    
25
    
-
  
     
4,625
    
6,311
    
7,015
    
11,875
  
                           
Provision for Income Taxes
    
1,711
    
2,195
    
2,266
    
3,363
  
                           
Net Income
  
$
2,914
  
$
4,116
  
$
4,749
  
$
8,512
  
                           
Earnings Per Share:
                          
Basic
  
$
0.82
  
$
1.11
  
$
1.33
  
$
2.28
  
Diluted
  
$
0.82
  
$
1.10
  
$
1.33
  
$
2.27
  
                           
Average Basic
                          
Shares Outstanding
    
3,537
    
3,722
    
3,558
    
3,737
  
                           
Average Diluted
                          
Shares Outstanding
    
3,541
    
3,725
    
3,561
    
3,742
  
                           
Other
                          
Capital Expenditures
  
$
1,353
  
$
883
  
$
3,645
  
$
4,723
  
Depreciation & Amortization
  
$
1,699
  
$
1,757
  
$
5,216
  
$
5,389
  


NOTE A:
        
Pre-petition Chapter 11 Accounts Receivable due from Delphi Corporation
  
$
3,399
  
Provision for Doubtful Accounts recorded during the first quarter
    
($3,200
)
Sale of pre-petition accounts receivable to third party
    
($1,777
)
Net recovery during third quarter
    
($1,578
)
 
 
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STRATTEC SECURITY CORPORATION

Condensed Balance Sheet Data
(In Thousands)
 

   
April 1, 2007
  
July 2, 2006
  
   
(Unaudited)
      
ASSETS
              
Current Assets:
              
Cash and Cash Equivalents 
  
$
62,619
  
$
65,712
  
Receivables, net 
    
25,354
    
25,357
  
Inventories 
    
8,660
    
9,337
  
Other Current Assets 
    
10,620
    
10,468
  
Total Current Assets 
    
107,253
    
110,874
  
Investment in Joint Ventures 
    
2,586
    
2,202
  
Prepaid Pension Obligations 
    
13,469
    
7,602
  
Other Long Term Assets 
    
187
    
197
  
Property, Plant and Equipment, Net 
    
26,177
    
27,764
  
   
$
149,672
  
$
148,639
  
               
               
LIABILITIES AND SHAREHOLDERS’ EQUITY
              
Current Liabilities:
              
Accounts Payable 
  
$
17,255
  
$
17,701
  
Other 
    
11,286
    
11,825
  
Total Current Liabilities 
    
28,541
    
29,526
  
Borrowings Under Line of Credit 
    
-
    
-
  
Deferred Income Taxes 
    
4,266
    
4,266
  
Accrued Post Retirement Obligations 
    
4,588
    
4,572
  
Minority Interest 
    
250
    
-
  
Shareholders’ Equity 
    
240,406
    
234,989
  
Accumulated Other Comprehensive Loss 
    
(2,712
)
  
(2,958
)
Less: Treasury Stock 
    
(125,667
)
  
(121,756
)
Total Shareholders’ Equity 
    
112,027
    
110,275
  
   
$
149,672
  
$
148,639
  


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STRATTEC SECURITY CORPORATION
Condensed Cash Flow Statement Data
(In Thousands)


   
Third Quarter Ended
  
Nine Months Ended
  
   
April 1, 2007
  
April 2, 2006
  
April 1, 2007
  
April 2, 2006
  
   
(Unaudited)
 
(Unaudited)
  
                   
Cash Flows from Operating Activities:
                          
Net Income
  
$
2,914
  
$
4,116
  
$
4,749
  
$
8,512
  
Adjustment to Reconcile Net Income to
                          
Cash Used in Operating Activities:
                          
Minority Interest
    
(25
)
  
-
    
(25
)
  
-
  
Depreciation and Amortization
    
1,699
    
1,757
    
5,216
    
5,389
  
Stock Based Compensation Expense
    
187
    
301
    
566
    
861
  
Tax Benefit from Options Exercised
    
13
    
-
    
13
    
61
  
Provision (Recovery) for Doubtful Accounts
    
-
    
(1,578
)
  
-
    
1,622
  
Change in Operating Assets/Liabilities
    
(7,280
)
  
5,242
    
(6,294
)
  
(4,470
)
Other, net
    
(177
)
  
(71
)
  
(45
)
  
6
  
                           
Net Cash Provided (Used) by Operating Activities
    
(2,669
)
  
9,767
    
4,180
    
11,981
  
                           
Cash Flows from Investing Activities:
                          
Investment in Joint Ventures
    
-
    
-
    
(100
)
  
(50
)
Additions to Property, Plant and Equipment
    
(1,353
)
  
(883
)
  
(3,645
)
  
(4,723
)
Proceeds from Sale of Property, Plant
                         
and Equipment
    
-
    
-
    
21
    
22
  
Net Cash Used in Investing Activities
    
(1,353
)
  
(883
)
  
(3,724
)
  
(4,751
)
                           
Cash Flow from Financing Activities:
                          
Purchase of Common Stock
    
-
    
(1,797
)
  
(3,922
)
  
(2,993
)
Investment by Minority Interest
    
274
    
-
    
274
    
-
  
Reissue/Exercise of Stock Options
    
82
    
9
    
99
    
1,077
  
                           
Net Cash Provided (Used) by Financing Activities
    
356
    
(1,788
)
  
(3,549
)
  
(1,916
)
                           
Net Increase (Decrease) in Cash & Cash Equivalents
    
(3,666
)
  
7,096
    
(3,093
)
  
5,314
  
                           
Cash and Cash Equivalents:
                          
Beginning of Period
    
66,285
    
55,168
    
65,712
    
56,950
  
End of Period
  
$
62,619
  
$
62,264
  
$
62,619
  
$
62,264
  
 

 
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