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
20, 2006
|
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
20, 2006, STRATTEC SECURITY CORPORATION issued a press release (the "Press
Release") announcing results for the fiscal third quarter ended April 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 April 20,
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:
April 20, 2006
BY
/s/
Patrick J.
Hansen
Patrick
J. Hansen, Senior Vice President
and
Chief
Financial Officer
3
EXHIBIT
99.1
FOR
RELEASE AT 6:00 AM 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 20, 2006 -- STRATTEC SECURITY CORPORATION (NASDAQ:STRT) today
reported operating results for the fiscal third quarter ended April 2,
2006.
Net
sales
for the Company’s three months ended April 2, 2006 were $46.6 million, compared
to net sales of $46.1 million for the three months ended March 27, 2005. Based
on the timing of the Company’s quarter end and it’s annual Christmas-New Year
holiday shutdown, the 2006 fiscal third quarter had 13 customer shipping weeks
while 2005 fiscal third quarter had 12 weeks. The impact of one additional
week
of customer shipments during the current quarter increased sales by
approximately $2.7 million. Net income for the period was $4.1 million, compared
to $3.7 million in the prior year quarter. Diluted earnings per share for the
period were $1.10 compared to $.98 in the prior year quarter. During the third
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, the increase in the third quarter operating results
reflects a $1.58 million ($994,000 after tax) net recovery for doubtful
accounts. This increased the current quarter earnings per share by $.27. For
further explanation see Note (A) in the “Results of Operations.”
For
the
nine months ended April 2, 2006, net sales were $134.6 million compared to
net
sales of $139.1 million in the prior year period. Net income was $8.5 million
compared to $11.8 million and diluted earnings per share were $2.27 compared
to
$3.07 in the prior year.
Sales
to
STRATTEC’s largest customers overall remained flat in the current quarter
compared to the prior year quarter levels. Sales to DaimlerChrysler Corporation
increased significantly during the current quarter to $15.7 million compared
to
$13.1 million due to additional product content and higher production volumes.
Sales to Mitsubishi Motor Manufacturing of America were $1.3 million compared
to
$1.1 million due to higher vehicle production volumes and product content.
Sales
to General Motors Corporation were $8.5 million compared to $9.8 million due
to
a combination of price reductions, discontinued models and lower production
volumes on certain GM vehicles. Sales to Delphi Corporation were $6.7 million
compared to $6.8 million due primarily to pre-programmed price reductions.
Sales
to Ford Motor Company were $6.9 million compared to $8.3 million due to
pre-programmed price reductions, discontinued models, and generally lower Ford
vehicle production volumes.
Gross
profit margins were 19.6 percent in the current quarter compared to 22.1 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 along with an unfavorable Mexico peso to U.S. dollar exchange
rate affecting the Company’s operations in Mexico.
Operating
expenses were $5.5 million in the current quarter, compared to $4.8 million
in
the prior year quarter. The increase in operating expenses during the current
quarter was attributed to higher spending in new product development and
recognizing stock based compensation expense under Financial Accounting Standard
123(R). The impact of adopting this new financial accounting standard at the
beginning of fiscal year 2006 reduced current quarter earnings per share by
$.05.
Provision
for income taxes in the current quarter includes a favorable State income tax
adjustment that positively impacted earnings per share by $.04.
During
the third quarter, STRATTEC repurchased 43,800 shares of its common stock under
the Company’s stock repurchase program at a cost of approximately $1.8 million.
Subsequent to the end of the quarter, 51,400 additional shares were repurchased
at a cost of approximately $1.8 million.
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 Automotive, Inc. of Grand Rapids, Michigan. 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.
3
STRATTEC
SECURITY CORPORATION
Results
of Operations
(In
Thousands except per share amounts)
|
Third
Quarter Ended
|
Nine
Months Ended
|
||||||||||||
|
|
|
|
April 2,
2006
|
|
|
March
27, 2005
|
|
|
April 2,
2006
|
|
|
March
27, 2005
|
|
|
(Unaudited)
|
(Unaudited)
|
||||||||||||
|
Net
Sales
|
$
|
46,575
|
$
|
46,102
|
$
|
134,646
|
$
|
139,129
|
|||||
|
Cost
of Goods Sold
|
37,453
|
35,892
|
107,208
|
106,700
|
|||||||||
|
Gross
Profit
|
9,122
|
10,210
|
27,438
|
32,429
|
|||||||||
|
Engineering,
Selling &
Administrative
Expenses
|
5,467
|
4,822
|
16,246
|
14,836
|
|||||||||
|
Provision
(Recovery) for Doubtful
Accounts,
net
|
(1,578
|
)(A)
|
-
|
1,622
|
-
|
||||||||
|
Income
from Operations
|
5,233
|
5,388
|
9,570
|
17,593
|
|||||||||
|
Interest
Income
|
670
|
326
|
1,733
|
742
|
|||||||||
|
Interest
Expense
|
-
|
-
|
-
|
-
|
|||||||||
|
Other
Income (Expense), Net
|
408
|
(50
|
)
|
572
|
109
|
||||||||
|
6,311
|
5,664
|
11,875
|
18,444
|
||||||||||
|
Provision
for Income Taxes
|
2,195
|
1,933
|
3,363
|
6,662
|
|||||||||
|
Net
Income
|
$
|
4,116
|
$
|
3,731
|
$
|
8,512
|
$
|
11,782
|
|||||
|
Earnings
Per Share:
|
|||||||||||||
|
Basic
|
$
|
1.11
|
$
|
.98
|
$
|
2.28
|
$
|
3.10
|
|||||
|
Diluted
|
$
|
1.10
|
$
|
.98
|
$
|
2.27
|
$
|
3.07
|
|||||
|
Average
Basic
|
|||||||||||||
|
Shares
Outstanding
|
3,722
|
3,798
|
3,737
|
3,803
|
|||||||||
|
Average
Diluted
|
|||||||||||||
|
Shares
Outstanding
|
3,725
|
3,815
|
3,742
|
3,836
|
|||||||||
|
Other
|
|||||||||||||
|
Capital
Expenditures
|
$
|
883
|
$
|
1,435
|
$
|
4,723
|
$
|
3,455
|
|||||
|
Depreciation
& Amortization
|
$
|
1,757
|
$
|
1,759
|
$
|
5,389
|
$
|
5,440
|
|||||
|
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
|
)
|
||
4
STRATTEC
SECURITY CORPORATION
Condensed
Balance Sheet Data
(In
Thousands)
|
April
2, 2006
|
|
July
3, 2005
|
|||||
|
(Unaudited)
|
|||||||
|
ASSETS
|
|||||||
|
Current
Assets:
|
|||||||
|
Cash
and Cash Equivalents
|
$
|
62,264
|
$
|
56,950
|
|||
|
Receivables,
net
|
24,156
|
26,053
|
|||||
|
Inventories
|
8,712
|
11,654
|
|||||
|
Other
Current Assets
|
11,753
|
10,030
|
|||||
|
Total
Current Assets
|
106,885
|
104,687
|
|||||
|
Deferred
Income Taxes
|
1,796
|
1,796
|
|||||
|
Investment
in Joint Venture
|
1,636
|
1,412
|
|||||
|
Other
Long Term Assets
|
593
|
603
|
|||||
|
Property,
Plant and Equipment, Net
|
28,646
|
29,592
|
|||||
|
$
|
139,556
|
$
|
138,090
|
||||
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
|||||||
|
Current
Liabilities:
|
|||||||
|
Accounts
Payable
|
$
|
16,981
|
$
|
17,218
|
|||
|
Other
|
11,479
|
12,850
|
|||||
|
Total
Current Liabilities
|
28,460
|
30,068
|
|||||
|
Borrowings
Under Line of Credit
|
-
|
-
|
|||||
|
Accrued
Pension and Post Retirement Obligations
|
11,896
|
16,271
|
|||||
|
Shareholders’
Equity
|
230,761
|
220,261
|
|||||
|
Accumulated
Other Comprehensive Loss
|
(12,115
|
)
|
(12,047
|
||||
|
Less:
Treasury Stock
|
(119,446
|
)
|
(116,463
|
)
|
|||
|
Total Shareholders’ Equity
|
99,200
|
91,751
|
|||||
|
$
|
139,556
|
$
|
138,090
|
||||
5
STRATTEC
SECURITY CORPORATION
Condensed
Cash Flow Statement Data
(In
Thousands)
|
Third
Quarter Ended
|
Nine
Months Ended
|
||||||||||||
|
|
|
|
April
2, 2006
|
|
|
March
27, 2005
|
April
2, 2006
|
March
27, 2005
|
|||||
|
(Unaudited)
|
(Unaudited)
|
||||||||||||
|
Cash
Flows from Operating Activities:
|
|||||||||||||
|
Net
Income
|
$
|
4,116
|
$
|
3,731
|
$
|
8,512
|
$
|
11,782
|
|||||
|
Adjustment
to Reconcile Net Income to
|
|||||||||||||
|
Cash
Used in Operating Activities:
|
|||||||||||||
|
Depreciation
and Amortization
|
1,757
|
1,759
|
5,389
|
5,440
|
|||||||||
|
Stock
Based Compensation Expense
|
301
|
-
|
861
|
-
|
|||||||||
|
Tax
Benefit from Options Exercised
|
-
|
277
|
61
|
949
|
|||||||||
|
Provision
(Recovery) for Doubtful Accounts
|
(1,578
|
)
|
-
|
1,622
|
-
|
||||||||
|
Change
in Operating Assets/Liabilities
|
5,242
|
(869
|
)
|
(4,464
|
)
|
(12,348
|
)
|
||||||
|
Other,
net
|
(71
|
)
|
-
|
-
|
224
|
||||||||
|
Net
Cash Provided by Operating Activities
|
9,767
|
4,898
|
11,981
|
6,047
|
|||||||||
|
Cash
Flows from Investing Activities:
|
|||||||||||||
|
Investment
in Joint Ventures
|
-
|
-
|
(50
|
)
|
(75
|
)
|
|||||||
|
Additions
to Property, Plant and Equipment
|
(883
|
)
|
(1,435
|
)
|
(4,723
|
)
|
(3,455
|
)
|
|||||
|
Proceeds
from Sale of Property, Plant and
Equipment |
-
|
-
|
22
|
-
|
|||||||||
|
Net
Cash Used in Investing Activities
|
(883
|
)
|
(1,435
|
)
|
(4,751
|
)
|
(3,530
|
)
|
|||||
|
Cash
Flow from Financing Activities:
|
|||||||||||||
|
Purchase
of Common Stock
|
(1,797
|
)
|
(2,572
|
)
|
(2,993
|
)
|
(8,826
|
)
|
|||||
|
Reissue/Exercise
of Stock Options
|
9
|
303
|
1,077
|
3,435
|
|||||||||
|
Net
Cash Used in Financing Activities
|
(1,788
|
)
|
(2,269
|
)
|
(1,916
|
)
|
(5,391
|
)
|
|||||
|
Net
Increase in Cash & Cash Equivalents
|
7,096
|
1,194
|
5,314
|
(2,874
|
)
|
||||||||
|
Cash
and Cash Equivalents:
|
|||||||||||||
|
Beginning
of Period
|
55,168
|
50,163
|
56,950
|
54,231
|
|||||||||
|
End
of Period
|
$
|
62,264
|
$
|
51,357
|
$
|
62,264
|
$
|
51,357
|
|||||
|
|
|||||||||||||
6