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): October
20, 2005
|
STRATTEC
SECURITY CORPORATION
|
|
(Exact
name of registrant as specified in its
charter)
|
|
Wisconsin
|
|
(State
or other jurisdiction of
incorporation)
|
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0-25150
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39-1804239
|
|
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(Commission
File Number)
|
(I.R.S.
Employer I.D. Number)
|
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3333
West Good Hope Road
Milwaukee,
WI
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53209
|
|
|
(Address
of Principal Executive Offices)
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(Zip
Code)
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(414)
247-3333
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(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
October 20, 2005, STRATTEC SECURITY CORPORATION issued a press release (the
"Press Release") announcing results for the fiscal first quarter ended October
2, 2005. 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 October 20,
2005.
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:
October 25,
2005
BY /s/ Patrick J.
Hansen
Patrick
J. Hansen, Senior Vice President
and Chief Financial Officer
3
EXHIBIT
99.1
FOR
RELEASE AT 3:00 CDT
Contact:
Pat Hansen
Senior
Vice President and
Chief
Financial Officer
414-247-3435
www.strattec.com
STRATTEC
SECURITY CORPORATION
REPORTS
FISCAL FIRST QUARTER RESULTS
Milwaukee,
Wisconsin - October 20, 2005 -- STRATTEC SECURITY CORPORATION (NASDAQ:STRT)
today reported sales and operating results for the fiscal first quarter ended
October 2, 2005.
Net
sales
for the three months ended October 2, 2005 were $44.8 million compared to net
sales of $44.6 million for the three months ended September 26, 2004. Net income
for the period was $1.7 million, compared to $3.6 million in the prior year
quarter. Diluted earnings per share for the period were $.46 compared to $.94
in
the prior year quarter. The primary factor causing the first quarter operating
results to be less than last year was 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 on October 8, 2005. This reduced the current quarter’s earnings per
share by $.54.
Sales
to
STRATTEC’s largest customers decreased slightly in the current quarter compared
to the prior year quarter levels. Sales to General Motors Corporation were
$8.2
million compared to $11.4 million due to a combination of discontinued models
and lower levels of production on certain vehicles. Sales to Delphi Corporation
were $6.2 million compared to $6.8 million due to pre-programmed price
reductions and lower levels of production. Sales to Ford Motor Company were
$6.6
million compared to $7.5 million, due to price reductions and lower vehicle
production. Sales to DaimlerChrysler Corporation increased significantly during
the current quarter to $14.6 million compared to $11.0 million due to a more
favorable vehicle content mix. Sales to Mitsubishi Motor Manufacturing of
America, Inc. were $1.6 million compared to $1.2 million due to higher vehicle
production volumes. Sales to new customers contributed to the overall sales
increase for the current quarter compared to the prior year quarter.
Gross
profit margin was 21.8 percent in the current quarter compared to 24.2 percent
in the prior year quarter. The decrease in gross profit margin was attributed
to
higher purchased material costs for brass, zinc, and magnesium along with an
unfavorable Mexico peso to U.S. dollar exchange rate.
Normal
operating expenses were $5.3 million in the current quarter, compared to $5.2
million in the prior year quarter.
During
the current quarter, the Company adopted Financial Accounting Standard 123(R)
to
recognize stock-based compensation expense in its financial statements. The
impact of adopting this new standard reduced the current quarter earnings per
share by $.04.
The
provision for income taxes in the current quarter includes a state refund claim
recovery that positively impacted earnings per share by $.13.
During
the quarter, the Company contributed $6.0 million to its Pension Fund and
repurchased 23,595 STRATTEC SECURITY CORPORATION shares under the Company’s
stock repurchase program at a cost of $1.2 million.
At
the
Company’s 2005 Annual Meeting held October 4, 2005, STRATTEC shareholders
re-elected Mr. Michael Koss to the Company’s Board of Directors for an
additional three-year term. In addition, the shareholders also approved the
proposal to amend and restate the Company Stock Incentive Plan.
STRATTEC
designs, develops, manufacturers and markets mechanical locks,
electro-mechanical locks, latches, and related access control products for
global automotive manufacturers. Its products are shipped to customers in the
United States, Mexico, Europe and South America. The Company’s history in the
automotive business spans more than 95 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.
2
STRATTEC
SECURITY CORPORATION
Results
of Operations
(In
Thousands except per share amounts)
|
First
Quarter Ended
|
|||||||
|
October
2, 2005
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September
26, 2004
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||||||
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(Unaudited)
|
|||||||
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Net
Sales
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$
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44,793
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$
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44,591
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|||
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Cost
of Goods Sold
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35,019
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33,818
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|||||
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Gross
Profit
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9,774
|
10,773
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|||||
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Engineering,
Selling & Administrative Expenses
|
5,285
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5,166
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|||||
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Provision
for Doubtful Accounts
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3,200
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-
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|||||
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Income
from Operations
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1,289
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5,607
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|||||
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Interest
Income
|
489
|
183
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|||||
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Other
Income (Expense), Net
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40
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(37
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)
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||||
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Income
Before Provision for Income Taxes
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1,818
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5,753
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|||||
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Provision
for Income Taxes
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78
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2,129
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|||||
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Net
Income
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$
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1,740
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$
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3,624
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|||
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Earnings
Per Share:
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|||||||
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Basic
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$
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.46
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$
|
.95
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|||
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Diluted
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$
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.46
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$
|
.94
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|||
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Average
Basic Shares
Outstanding
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3,746
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3,805
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|||||
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Average
Diluted Shares
Outstanding
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3,754
|
3,855
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|||||
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Other:
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|||||||
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Capital
Expenditures
|
$
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1,580
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$
|
698
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|||
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Depreciation
& Amortization
|
$
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1,824
|
$
|
1,864
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|||
3
STRATTEC
SECURITY CORPORATION
Condensed
Balance Sheet Data
(In
Thousands)
|
October
2, 2005
|
|
July
3, 2005
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|||||
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ASSETS
|
|||||||
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Current
Assets:
|
|||||||
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Cash
and cash equivalents
|
$
|
47,771
|
$
|
56,950
|
|||
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Receivables,
net
|
29,680
|
26,053
|
|||||
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Inventories
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11,548
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11,654
|
|||||
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Other
current assets
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9,538
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10,030
|
|||||
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Total
Current Assets
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98,537
|
104,687
|
|||||
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Deferred
Income Taxes
|
1,796
|
1,796
|
|||||
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Investment
in Joint Venture
|
1,512
|
1,412
|
|||||
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Other
Long Term Assets
|
600
|
603
|
|||||
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Property,
Plant and Equipment, Net
|
29,344
|
29,592
|
|||||
|
|
$
|
131,789
|
$
|
138,090
|
|||
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
|||||||
|
Current
Liabilities:
|
|||||||
|
Accounts
Payable
|
$
|
17,066
|
$
|
17,218
|
|||
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Other
|
10,260
|
12,850
|
|||||
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Total
Current Liabilities
|
27,326
|
30,068
|
|||||
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Borrowings
Under Revolving Credit Facility
|
-
|
-
|
|||||
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Accrued
Pension and Post Retirement Obligations
|
10,825
|
16,271
|
|||||
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Shareholders’
Equity
|
223,326
|
220,261
|
|||||
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Accumulated
Other Comprehensive Loss
|
(12,032
|
)
|
(12,047
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)
|
|||
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Less:
Treasury Stock
|
(117,656
|
)
|
(116,463
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)
|
|||
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Total
Shareholders’ Equity
|
93,638
|
91,75
|
|||||
|
$
|
131,789
|
$
|
138,090
|
||||
4
STRATTEC
SECURITY CORPORATION
Condensed
Cash Flow Statement Data
(In
Thousands)
|
First
Quarter Ended
|
|||||||
|
October
2, 2005
|
|
September
26, 2004
|
|||||
|
(Unaudited)
|
|||||||
|
Cash
Flows from Operating Activities:
|
|||||||
|
Net
Income
|
$
|
1,740
|
$
|
3,624
|
|||
|
Adjustments
to Reconcile Net Income to
|
|||||||
|
Cash
Used in Operating Activities:
|
|||||||
|
Depreciation
|
1,824
|
1,864
|
|||||
|
Stock
Option Compensation Expense
|
209
|
-
|
|||||
|
Tax
Benefit from Options Exercised
|
61
|
406
|
|||||
|
Change
in Operating Assets/Liabilities
|
(11,213
|
)
|
(10,656
|
)
|
|||
|
Other,
net
|
(84
|
)
|
16
|
||||
|
Net
Cash Used in Operating Activities
|
(7,463
|
)
|
(4,746
|
)
|
|||
|
Cash
Flows from Investing Activities:
|
|||||||
|
Investment
in Joint Ventures
|
-
|
(75
|
)
|
||||
|
Additions
to Property, Plant and Equipment
|
(1,580
|
)
|
(698
|
)
|
|||
|
Net
Cash Used in Investing Activities
|
(1,580
|
)
|
(773
|
)
|
|||
|
Cash
Flow from Financing Activities:
|
|||||||
|
Purchase
of Common Stock
|
(1,196
|
)
|
(5,467
|
)
|
|||
|
Exercise
of Stock Options
|
1,060
|
2,048
|
|||||
|
Net
Cash Used in Financing Activities
|
(136
|
)
|
(3,419
|
)
|
|||
|
Net
Decrease in Cash and Cash Equivalents
|
(9,179
|
)
|
(8,938
|
)
|
|||
|
Cash
and Cash Equivalents:
|
|||||||
|
Beginning
of Period
|
56,950
|
54,231
|
|||||
|
End
of Period
|
$
|
47,771
|
$
|
45,293
|
|||
5