SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
__________________
FORM
8-K/A
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of
Report (Date of earliest event reported): January
18, 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))
Explanatory
Note: This amendment to the Current Report on Form 8-K of STRATTEC
SECURITY CORPORATION dated January 18, 2007, is being filed to correct
formatting errors in the Condensed Cash Flow Statement Data included in
Exhibit 99.1. The corrected Exhibit is furnished herewith in its
entirety.
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.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits
The
following exhibit
is furnished herewith:
99.1
-- Press Release
of STRATTEC SECURITY CORPORATION, issued January 18, 2007.
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:
January 25, 2007
BY
/s/
Patrick J.
Hansen
Patrick J. Hansen, Senior Vice President and
Chief
Financial Officer
3
EXHIBIT
99.1
FOR
RELEASE AT 3:00 PM CST
Contact:
Pat Hansen
Senior
Vice President and
Chief
Financial Officer
414-247-3435
www.strattec.com
STRATTEC
SECURITY CORPORATION
REPORTS
FISCAL SECOND QUARTER RESULTS
Milwaukee,
Wisconsin - January 18, 2007 -- STRATTEC SECURITY CORPORATION (NASDAQ:STRT)
today reported operating results for the fiscal second quarter ended December
31, 2006.
Net
sales
for the Company’s second quarter ended December 31, 2006 were $37.9 million,
compared to net sales of $43.3 million for the second quarter ended January
1,
2006. Net income for the period was $1.1 million, compared to $2.7 million
in
the prior year quarter. Diluted earnings per share for the period were $.31
compared to $.71 in the prior year quarter.
The
significant change in sales and profitability for the second quarter compared
to
last year is a continuation of the trend that impacted our first quarter
operating results. First, the Company’s largest customers continued to reduce
their production schedules during the second quarter to match the unusually
low
sales demand for their products. Correspondingly, our overall sales volume
for
these customers was down 20% during the current quarter compared to the prior
year. This sales decline had a minimal impact on our manufacturing efficiencies
as we were able to effectively manage our operational costs at the lower
production volume. The largest contributor to the second quarter’s lower
profitability was the cost of the primary raw materials (zinc and brass) used
in
our products which continued to escalate during the quarter and were
approximately 107% higher than the prior year quarter, negatively impacting
our
gross profit margins by 6.3%. In addition, during the current quarter, the
Company recorded a $366,000 ($231,000 after tax) charge to cover severance
and
separation costs related to the move of our service products assembly operation
from Milwaukee, Wisconsin to our Juarez, Mexico facilities. The impact of this
move is expected to reduce annual operating costs by approximately $1.5
million.
For
the
six months ended December 31, 2006, net sales were $76.0 million compared to
net
sales of $88.1 million in the prior year period. Net income was $1.8 million
compared to net income of $4.4 million in the prior year period and diluted
earnings per share were $.51 compared to $1.17. In comparing results for the
current six months and the prior year six months it should be noted that the
prior year operating results included a $3.2 million ($2.02 million after tax)
charge to increase the Company’s reserve for uncollectible trade accounts
receivable related to the filing for Chapter 11 bankruptcy protection by Delphi
Corporation. This reduced the prior year six months earnings per share by
$.54.
Overall
sales to STRATTEC’s largest customers decreased in the current quarter compared
to the prior year quarter levels. Sales to DaimlerChrysler Corporation increased
during the current quarter to $14.3 million compared to $13.1 million due to
additional vehicle content. Sales to Ford Motor Company were $4.3 million
compared to $6.8 million due to lower levels of vehicle production and
pre-programmed price reductions. Sales to General Motors Corporation were $7.4
million compared to $7.9 million due to a combination of price reductions and
lower levels of production. Sales to Delphi Corporation were $4.2 million
compared to $7.1 million due to a combination of lower levels of production
and
reduced component content. Sales to Mitsubishi Motor Manufacturing of America,
Inc. were $560,000 compared to $1.3 million due to discontinued models and
lower
vehicle production volumes.
Gross
profit margins were 13.3 % in the current quarter compared to 19.7 % in the
prior year quarter. As stated earlier, the decrease in gross profit margin
was
primarily attributed to higher purchased material costs for zinc and brass
that
reduced gross profit margins by $2.4 million or approximately 6.3 % from the
prior year quarter. The remaining decrease was attributed to lower production
and the impact of the charge for severance and separation costs related to
the
move of service product assembly, offset by other favorable
variances.
Operating
expenses were $4.9 million in the current quarter, compared to $5.5 million
in
the prior year quarter.
The
provision for income taxes in the current quarter includes a State refund claim
recovery that positively impacted earnings per share by $.09. The prior year
tax
provision included a favorable foreign tax adjustment that positively impacted
earnings per share by $.08.
During
the current quarter, the Company contributed $1.5 million to its Pension Fund
and repurchased 17,000 STRATTEC SECURITY CORPORATION shares under the Company’s
stock repurchase program at a cost of $596,000.
2
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.
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.
3
STRATTEC
SECURITY CORPORATION
Results
of Operations
(In
Thousands except per share amounts)
|
Second
Quarter Ended
|
Six
Months Ended
|
|
|||||||||||
|
|
|
|
December
31,
2006
|
|
|
January
1,
2006
|
December
31,
2006
|
January
1,
2006
|
|||||
|
(Unaudited)
|
(Unaudited)
|
||||||||||||
|
Net
Sales
|
$
|
37,913
|
$
|
43,278
|
$
|
75,963
|
$
|
88,071
|
|||||
|
Cost
of Goods Sold
|
32,873
|
34,736
|
65,641
|
69,755
|
|||||||||
|
Gross
Profit
|
5,040
|
8,542
|
10,322
|
18,316
|
|||||||||
|
Engineering,
Selling &
|
|||||||||||||
|
Administrative
Expenses
|
4,852
|
5,494
|
9,908
|
10,779
|
|||||||||
|
Provision
for Doubtful Accounts
|
-
|
-
|
-
|
3,200
|
|||||||||
|
Income
from Operations
|
188
|
3,048
|
414
|
4,337
|
|||||||||
|
Interest
Income
|
905
|
574
|
1,827
|
1,063
|
|||||||||
|
Interest
Expense
|
-
|
-
|
-
|
-
|
|||||||||
|
Other
Income, Net
|
121
|
124
|
149
|
164
|
|||||||||
|
1,214
|
3,746
|
2,390
|
5,564
|
||||||||||
|
Provision
for Income Taxes
|
120
|
1,090
|
555
|
1,168
|
|||||||||
|
Net
Income
|
$
|
1,094
|
$
|
2,656
|
$
|
1,835
|
$
|
4,396
|
|||||
|
Earnings
Per Share:
|
|||||||||||||
|
Basic
|
$
|
0.31
|
$
|
.71
|
$
|
0.51
|
$
|
1.17
|
|||||
|
Diluted
|
$
|
0.31
|
$
|
.71
|
$
|
0.51
|
$
|
1.17
|
|||||
|
Average
Basic
|
|||||||||||||
|
Shares
Outstanding
|
3,539
|
3,744
|
3,568
|
3,745
|
|||||||||
|
Average
Diluted
|
|||||||||||||
|
Shares
Outstanding
|
3,542
|
3,748
|
3,571
|
3,751
|
|||||||||
|
Other
|
|||||||||||||
|
Capital
Expenditures
|
$
|
1,377
|
$
|
2,260
|
$
|
2,292
|
$
|
3,840
|
|||||
|
Depreciation
& Amortization
|
$
|
1,768
|
$
|
1,808
|
$
|
3,517
|
$
|
3,632
|
|||||
4
STRATTEC
SECURITY CORPORATION
Condensed
Balance Sheet Data
(In
Thousands)
|
December
31,
2006
|
July
2,
2006
|
||||||
|
(Unaudited)
|
|||||||
|
ASSETS
|
|||||||
|
Current
Assets:
|
|||||||
|
Cash
and cash equivalents
|
$
|
66,285
|
$
|
65,712
|
|||
|
Receivables,
net
|
18,292
|
25,357
|
|||||
|
Inventories
|
8,140
|
9,337
|
|||||
|
Other
current assets
|
10,601
|
10,468
|
|||||
|
Total
Current Assets
|
103,318
|
110,874
|
|||||
|
Investment
in Joint Ventures
|
2,495
|
2,202
|
|||||
|
Prepaid
Pension Obligations
|
9,847
|
7,602
|
|||||
|
Other
Long Term Assets
|
191
|
197
|
|||||
|
Property,
Plant and Equipment, Net
|
26,584
|
27,764
|
|||||
|
$
|
142,435 |
$
|
148,639
|
||||
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
|||||||
|
Current
Liabilities:
|
|||||||
|
Accounts
Payable
|
$
|
13,551
|
$
|
17,701
|
|||
|
Other
|
11,060
|
11,825
|
|||||
|
Total
Current Liabilities
|
24,611
|
29,526
|
|||||
|
Borrowings
Under Line of Credit
|
-
|
-
|
|||||
|
Deferred
Income Taxes
|
4,266
|
4,266
|
|||||
|
Accrued
Postretirement Obligations
|
4,592
|
4,572
|
|||||
|
Shareholders’
Equity
|
237,214
|
234,989
|
|||||
|
Accumulated
Other Comprehensive Loss
|
(2,578
|
)
|
(2,958
|
)
|
|||
|
Less:
Treasury Stock
|
(125,670
|
)
|
(121,756
|
)
|
|||
|
Total
Shareholders’ Equity
|
108,966
|
110,275
|
|||||
|
$
|
142,435
|
$
|
148,639
|
5
STRATTEC
SECURITY CORPORATION
Condensed
Cash Flow Statement Data
(In
Thousands)
|
Second
Quarter Ended
|
Six
Months Ended
|
||||||||||||
|
December
31,
2006
|
January
1,
2006
|
December
31,
2006
|
January
1,
2006
|
||||||||||
|
(Unaudited)
|
(Unaudited)
|
||||||||||||
|
Cash
Flows from Operating Activities:
|
|||||||||||||
|
Net
Income
|
$
|
1,094
|
$
|
2,656
|
$
|
1,835
|
$
|
4,396
|
|||||
|
Adjustment
to Reconcile Net Income to
|
|||||||||||||
|
Cash
Provided by Operating Activities:
|
|||||||||||||
|
Depreciation
|
1,768
|
1,808
|
3,517
|
3,632
|
|||||||||
|
Stock
Based Compensation Expense
|
186
|
351
|
379
|
560
|
|||||||||
|
Tax
Benefit from Options Exercised
|
-
|
- | - |
61
|
|||||||||
|
Provision
for Doubtful Accounts
|
-
|
- | - |
3,200
|
|||||||||
|
Change
in Operating Assets/Liabilities
|
852
|
4,701
|
986
|
(9,712
|
)
|
||||||||
|
Other,
net
|
33
|
149
|
132
|
65
|
|||||||||
|
Net
Cash Provided by Operating Activities
|
3,933
|
9,665
|
6,849
|
2,202
|
|||||||||
|
Cash
Flows from Investing Activities:
|
|||||||||||||
|
Investment
in Joint Ventures
|
(100
|
)
|
(50
|
)
|
(100
|
)
|
(50
|
)
|
|||||
|
Additions
to Property, Plant and Equipment
|
(1,377
|
)
|
(2,260
|
)
|
(2,292
|
)
|
(3,840
|
)
|
|||||
|
Proceeds
from Sale of Property, Plant
|
|||||||||||||
|
and
Equipment
|
-
|
22
|
21
|
22
|
|||||||||
|
Net
Cash Used in Investing Activities
|
(1,477
|
)
|
(2,288
|
)
|
(2,371
|
)
|
(3,868
|
)
|
|||||
|
Cash
Flow from Financing Activities:
|
|||||||||||||
|
Purchase
of Common Stock
|
(596)
|
-
|
|
(3,922
|
)
|
(1,196
|
)
|
||||||
|
Exercise
of Stock Options and
|
|||||||||||||
|
Employee
Stock Purchases
|
8
|
20
|
17
|
1,080
|
|||||||||
|
Net
Cash (Used in) Provided by Financing Activities
|
(588
|
)
|
20
|
(3,905
|
)
|
(116
|
)
|
||||||
|
Net
Increase (Decrease) in Cash & Cash Equivalents
|
1,868
|
7,397
|
573
|
(1,782
|
)
|
||||||||
|
Cash
and Cash Equivalents:
|
|||||||||||||
|
Beginning
of Period
|
64,417
|
47,771
|
65,712
|
56,950
|
|||||||||
|
End
of Period
|
$
|
66,285
|
$
|
55,168
|
$
|
66,285
|
$
|
55,168
|
|||||
6