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): August
1, 2006
|
STRATTEC
SECURITY CORPORATION
|
|
(Exact
name of registrant as specified in its
charter)
|
|
(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
August
1, 2006, STRATTEC SECURITY CORPORATION issued a press release (the "Press
Release") announcing results for the fourth quarter and fiscal year ended July
2, 2006. 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 August
1,
2006.
2
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:
August 2, 2006
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 CDT
Contact:
Pat Hansen
Senior
Vice President and
Chief
Financial Officer
414-247-3435
www.strattec.com
STRATTEC
SECURITY CORPORATION
REPORTS
FISCAL FOURTH QUARTER AND YEAR END RESULTS
Milwaukee,
Wisconsin - August 1, 2006 -- STRATTEC SECURITY CORPORATION (NASDAQ: STRT)
today
reported operating results for the fourth quarter and fiscal year ended July
2,
2006.
Net
sales
for the fourth quarter ended July 2, 2006 were $46.6 million, compared to net
sales of $51.2 million for the fourth quarter ended July 3, 2005. The 2006
fiscal fourth quarter was a typical 13 week period while 2005’s fourth quarter
was a 14 week period. The impact of the additional week of customer shipments
during the prior year quarter increased sales by approximately $2.9 million.
Net
income was $4.0 million, compared to $3.3 million in the prior year quarter.
Diluted earnings per share for the fourth quarter were $1.08 compared to $.87
in
the prior year quarter. The primary factors contributing to fourth quarter
operating results being more favorable than the prior year were a $961,000
($605,000 after tax) customer reimbursement relating to production capacity
constraint issues that were expensed during previous reported periods and a
state refund claim recovery along with a favorable foreign tax adjustment.
These
items increased current quarter earnings per share by $.39.
For
the
full fiscal year ended July 2, 2006, net sales were $181.2 million, compared
to
net sales of $190.3 million in the prior year period. The 2006 fiscal year
was
the typical 52 week period while 2005’s fiscal year was a 53 week period. Net
income was $12.5 million compared to $15.0 million and diluted earnings per
share were $3.35 compared to $3.94.
Sales
to
STRATTEC’s largest customers overall declined in the current quarter compared to
the prior year quarter levels. Sales to DaimlerChrysler Corporation increased
during the current quarter to $15.2 million compared to $14.7 million primarily
due to a more favorable vehicle content mix and higher vehicle production
volumes. Sales to Delphi Corporation were $6.6 million compared to $8.0 million
primarily due to lower component content. Sales to General Motors Corporation
were $8.3 million compared to $10.9 million due to a combination of discontinued
models and lower levels of production on certain General Motors vehicles. Sales
to Ford Motor Company were $7.0 million compared to $8.2 million due to price
reductions and lower production volumes on certain vehicles. Sales to Mitsubishi
Motor Manufacturing of America, Inc. were essentially flat between years at
$1.2
million in the current quarter compared to $1.1 million in the prior year
quarter.
Gross
profit margins were 20.6 percent in the current quarter compared to 20.1 percent
in the prior year quarter. The higher margins in the current year quarter were
primarily the result of the customer capacity claim reimbursement previously
noted, offset by higher purchased raw material costs for brass and zinc.
Operating
expenses were $5.8 million in the current quarter, compared to $5.9 million
in
the prior year quarter.
During
fiscal 2006, the Company was required under Financial Accounting Standard 123(R)
to recognize stock-based compensation expense in its financial statements.
The
impact of adopting this new financial accounting standard at the beginning
of
fiscal 2006 reduced the current quarter earnings per share by $.04 and year
ended July 2, 2006 earnings per share by $.19.
Provision
for income taxes in the current quarter includes a State refund claim recovery
and a favorable foreign tax adjustment that positively impacted earnings per
share by $.22.
During
the fourth quarter, the Company repurchased 63,600 STRATTEC SECURITY CORPORATION
shares under the Company’s stock repurchase program at a cost of approximately
$2.3 million. For the year ended July 2, 2006, a total of 130,995 shares were
repurchased at a cost of approximately $5.3 million.
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.
2
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)
|
Fourth
Quarter Ended
|
Years
Ended
|
||||||||||||
|
|
|
July
2, 2006
|
|
July
3, 2005
|
July
2, 2006
|
July
3, 2005
|
|||||||
|
(Unaudited)
|
|||||||||||||
|
Net
Sales
|
$
|
46,551
|
$
|
51,185
|
$
|
181,197
|
$
|
190,314
|
|||||
|
Cost
of Goods Sold
|
36,943
|
40,878
|
144,151
|
147,538
|
|||||||||
|
Gross
Profit
|
9,608
|
10,307
|
37,046
|
42,776
|
|||||||||
|
Engineering,
Selling &
Administrative
Expenses
|
5,821
|
5,852
|
22,067
|
20,688
|
|||||||||
|
Provision
for Doubtful Accounts
|
-
|
40
|
1,622
|
80
|
|||||||||
|
Income
from Operations
|
3,787
|
4,415
|
13,357
|
22,008
|
|||||||||
|
Interest
Income
|
830
|
427
|
2,563
|
1,169
|
|||||||||
|
Interest
Expense
|
-
|
-
|
-
|
-
|
|||||||||
|
Other
Income (Expense), Net
|
388
|
211
|
960
|
320
|
|||||||||
|
5,005
|
5,053
|
16,880
|
23,497
|
||||||||||
|
Provision
for Income Taxes
|
1,040
|
1,797
|
4,403
|
8,459
|
|||||||||
|
Net
Income
|
$
|
3,965
|
$
|
3,256
|
$
|
12,477
|
$
|
15,038
|
|||||
|
Earnings
Per Share:
|
|||||||||||||
|
Basic
|
$
|
1.08
|
$
|
.87
|
$
|
3.36
|
$
|
3.97
|
|||||
|
Diluted
|
$
|
1.08
|
$
|
.87
|
$
|
3.35
|
$
|
3.94
|
|||||
|
Average
Basic
|
|||||||||||||
|
Shares
Outstanding
|
3,650
|
3,753
|
3,716
|
3,790
|
|||||||||
|
Average
Diluted
|
|||||||||||||
|
Shares
Outstanding
|
3,653
|
3,761
|
3,720
|
3,816
|
|||||||||
|
Other
|
|||||||||||||
|
Capital
Expenditures
|
$
|
1,043
|
$
|
2,043
|
$
|
5,766
|
$
|
5,498
|
|||||
|
Depreciation
& Amortization
|
$
|
1,766
|
$
|
1,785
|
$
|
7,155
|
$
|
7,225
|
|||||
4
STRATTEC
SECURITY CORPORATION
Condensed
Balance Sheet Data
(In
Thousands)
|
July
2, 2006
|
|
July
3, 2005
|
|||||
|
ASSETS
|
|||||||
|
Current
Assets:
|
|||||||
|
Cash
and cash equivalents
|
$
|
65,712
|
$
|
56,950
|
|||
|
Receivables,
net
|
25,357
|
26,053
|
|||||
|
Inventories
|
9,337
|
11,654
|
|||||
|
Other
current assets
|
10,468
|
10,030
|
|||||
|
Total
Current Assets
|
110,874
|
104,687
|
|||||
|
Deferred
Income Taxes
|
-
|
1,796
|
|||||
|
Investment
in Joint Venture
|
2,202
|
1,412
|
|||||
|
Prepaid
Pension Cost (A)
|
7,602
|
-
|
|||||
|
Other
Long Term Assets
|
197
|
603
|
|||||
|
Property,
Plant and Equipment, Net
|
27,764
|
29,592
|
|||||
|
$
|
148,639
|
$
|
138,090
|
||||
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
|||||||
|
Current
Liabilities:
|
|||||||
|
Accounts
Payable
|
$
|
17,701
|
$
|
17,218
|
|||
|
Other
|
11,825
|
12,850
|
|||||
|
Total
Current Liabilities
|
29,526
|
30,068
|
|||||
|
Borrowings
Under Line of Credit Facility
|
-
|
-
|
|||||
|
Deferred
Income Taxes
|
4,266
|
-
|
|||||
|
Accrued
Pension and Post Retirement Obligations (A)
|
4,572
|
16,271
|
|||||
|
Shareholders’
Equity
|
234,989
|
220,261
|
|||||
|
Accumulated
Other Comprehensive Loss
|
(2,958
|
)
|
(12,047
|
)
|
|||
|
Less:
Treasury Stock
|
(121,756
|
)
|
(116,463
|
)
|
|||
|
Total
Shareholders’ Equity
|
110,275
|
91,751
|
|||||
|
$
|
148,639
|
$
|
138,090
|
||||
| (A) |
Includes
$242 and $15,804 of additional minimum pension liability recorded
during
the fourth quarter of 2006 and 2005,
respectively.
|
5
STRATTEC
SECURITY CORPORATION
Condensed
Cash Flow Statement Data
(In
Thousands)
|
Fourth
Quarter Ended
|
Years
Ended
|
||||||||||||
|
|
|
July
2, 2006
|
July
3, 2005
|
July
2, 2006
|
July
3, 2005
|
||||||||
|
(Unaudited)
|
|||||||||||||
|
Cash
Flows from Operating Activities:
|
|||||||||||||
|
Net
Income
|
$
|
3,965
|
$
|
3,256
|
$
|
12,477
|
$
|
15,038
|
|||||
|
Adjustment
to Reconcile Net Income to
|
|||||||||||||
|
Cash
Used in Operating Activities:
|
|||||||||||||
|
Depreciation
and Amortization
|
1,766
|
1,785
|
7,155
|
7,225
|
|||||||||
|
Deferred
Income Taxes
|
350
|
2,282
|
350
|
2,282
|
|||||||||
|
Stock
Based Compensation Expense
|
257
|
-
|
1,118
|
-
|
|||||||||
|
Tax
Benefit from Options Exercised
|
-
|
7
|
61
|
956
|
|||||||||
|
Provision
for Doubtful Accounts
|
-
|
40
|
1,622
|
80
|
|||||||||
|
Change
in Operating Assets/Liabilities
|
1,148
|
2,085
|
(3,322
|
)
|
(10,303
|
)
|
|||||||
|
Other,
net
|
(172
|
)
|
251
|
(166
|
)
|
474
|
|||||||
|
Net
Cash Provided by Operating Activities
|
7,314
|
9,706
|
19,295
|
15,752
|
|||||||||
|
Cash
Flows from Investing Activities:
|
|||||||||||||
|
Investment
in Joint Ventures
|
(519
|
)
|
(50
|
)
|
(569
|
)
|
(125
|
)
|
|||||
|
Additions
to Property, Plant and Equipment
|
(1,043
|
)
|
(2,043
|
)
|
(5,766
|
)
|
(5,498
|
)
|
|||||
|
Proceeds
from Sale of Property, Plant
|
|||||||||||||
|
and
Equipment
|
- |
22
|
22
|
22
|
|||||||||
|
Net
Cash Used in Investing Activities
|
(1,562
|
)
|
(2,071
|
)
|
(6,313
|
)
|
(5,601
|
)
|
|||||
|
Cash
Flow from Financing Activities:
|
|||||||||||||
|
Purchase
of Common Stock
|
(2,313
|
)
|
(2,173
|
)
|
(5,306
|
)
|
(10,999
|
)
|
|||||
|
Reissue/Exercise
of Stock Options
|
9
|
131
|
1,086
|
3,567
|
|||||||||
|
Net
Cash Used in Financing Activities
|
(2,304
|
)
|
(2,042
|
)
|
(4,220
|
)
|
(7,432
|
)
|
|||||
|
Net
Increase in Cash & Cash Equivalents
|
3,448
|
5,593
|
8,762
|
2,719
|
|||||||||
|
Cash
and Cash Equivalents:
|
|||||||||||||
|
Beginning
of Period
|
62,264
|
51,357
|
56,950
|
54,231
|
|||||||||
|
End
of Period
|
$
|
65,712
|
$
|
56,950
|
$
|
65,712
|
$
|
56,950
|
|||||
|
|
|||||||||||||
6