strt3q8k.htm
UNITED STATES
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 21, 2011

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 21, 2011, STRATTEC SECURITY CORPORATION issued a press release (the "Press Release") announcing results for the fiscal third quarter ended March 27, 2011.  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.

(d)    Exhibits

99.1 -- Press Release of STRATTEC SECURITY CORPORATION, issued April 21, 2011.


 

 

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 21, 2011

BY /s/ Patrick J. Hansen                                                              
       Patrick J. Hansen, Senior Vice President and
       Chief Financial Officer
 
 
 

ex991strt3q8k.htm
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 THIRD QUARTER RESULTS


Milwaukee, Wisconsin – April 21, 2011 -- STRATTEC SECURITY CORPORATION (NASDAQ:STRT) today reported operating results for the fiscal third quarter ended March 27, 2011.

Net sales for the Company’s third quarter ended March 27, 2011 were $65.7 million, compared to net sales of $52.9 million for the third quarter ended March 28, 2010.  The higher net sales for the current quarter can be primarily attributed to increased customer production volumes.  Higher content on certain new products also contributed to the net sales improvement.

Net income for the period was $55,000, compared to a net income of $781,000 in the prior year quarter.  Diluted earnings per share for the period were $.02 compared to diluted earnings per share of $.24 in the prior year quarter. The lower net income for the current quarter was primarily due to a combination of STRATTEC’s share of the cost associated with a customer’s specific warranty claim, and an adjustment for customer price concessions.  These two items resulted in a pre-tax provision of $1.8 million during the current quarter and reduced diluted earnings per share by $.33.

 
 

 

For the nine months ended March 27, 2011, net sales were $186.7 million compared to net sales of $146.6 million in the prior year period.  Net income was $2.7 million compared to net income of $2.6 million in the prior year period and diluted earnings per share were $.82 compared to diluted earnings per share of $.78 in the prior year period.

The year-over-year net sales increase for the current quarter reflected increased sales to STRATTEC’s largest customers.  Sales to Chrysler Group LLC were $21.6 million in the current quarter compared to $17.0 million in the prior year quarter.  Sales to General Motors Company were $14.8 million compared to $13.5 million.  Included in the prior year quarter sales to General Motors were $1.7 million of sales to Nexteer Automotive, formerly a unit of General Motors.  Sales to Ford Motor Company were $7.0 million compared to $4.5 million.  Sales to Hyundai/Kia were $4.0 million compared to $2.8 million.

Gross profit margins were 13.9 percent in the current quarter compared to 16.8 percent in the prior year quarter.   The lower gross profit margin in the current year quarter was primarily the result of the $1.8 million pre-tax provision related to the two issues mentioned previously.  Also impacting the current quarter were higher purchased raw material costs for zinc and brass along with an unfavorable Mexico Peso to U.S. dollar exchange rate affecting the Company’s operations in Mexico.  Collectively, these items reduced the current quarter gross profit margin by 4 percentage points.

Operating expenses were $8.0 million in the current quarter, compared to $7.6 million in the prior year quarter.

 

 


During the current quarter the Company contributed $1.5 million to its Defined Benefit Pension Trust.
 
STRATTEC designs, develops, manufactures and markets automotive Access Control Products, including mechanical locks and keys, electronically enhanced locks and keys, steering column and instrument panel ignition lock housings, latches, power sliding side door systems, power lift gate systems, power deck lid systems, door handles and related products. These products are provided to customers in North America, and on a global basis through the VAST Alliance in which STRATTEC participates with WITTE Automotive of Velbert, Germany and ADAC Automotive of Grand Rapids, Michigan.  STRATTEC’s history in the automotive business spans over 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 (including fluctuations in the cost of raw materials).  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.

 

 

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

   
Third Quarter Ended
   
Nine Months Ended
 
   
March 27, 2011
   
March 28, 2010
   
March 27, 2011
   
March 28, 2010
 
                         
Net Sales
  $ 65,650     $ 52,883     $ 186,711     $ 146,604  
                                 
Cost of Goods Sold
    56,531       44,022       157,466       123,292  
                                 
Gross Profit
    9,119       8,861       29,245       23,312  
                                 
Engineering, Selling & Administrative Expenses
    7,953       7,620       24,436       21,274  
                                 
Impairment Charge
    -       -       -       223  
                                 
Environmental
    -       -       -       (1,125 )
                                 
Recovery of Bad Debts
    -       -       -       (421 )
                                 
Income from Operations
    1,166       1,241       4,809       3,361  
                                 
Interest Income
    36       16       84       58  
                                 
Interest Expense
    (38 )     (56 )     (134 )     (171 )
                                 
Other (Expense)/Income, Net
    (160 )     176       899       966  
                                 
      1,004       1,377       5,658       4,214  
                                 
Provision for Income Taxes
    262       328       1,394       1,390  
                                 
Net Income
    742       1,049       4,264       2,824  
                                 
Net Income Attributable to Non-Controlling Interest
    687       268       1,544       256  
 
                               
Net Income Attributable to STRATTEC SECURITY CORPORATION
  $ 55     $ 781     $ 2,720     $ 2,568  
 
                               
Earnings Per Share:
                               
Basic
  $ 0.02     $ 0.24     $ 0.83     $ 0.79  
Diluted
  $ 0.02     $ 0.24     $ 0.82     $ 0.78  
Average Basic Shares Outstanding
    3,286       3,273       3,284       3,270  
                                 
Average Diluted Shares Outstanding
    3,339       3,284       3,322       3,275  
                                 
Other
                               
     Capital Expenditures
  $ 2,245     $ 1,841     $ 5,727     $ 4,945  
     Depreciation & Amortization
  $ 1,677     $ 1,757     $ 4,904     $ 5,335  


 

 

STRATTEC SECURITY CORPORATION

Condensed Balance Sheet Data
(In Thousands)

   
March 27, 2011
   
June 27, 2010
 
    (Unaudited)        
ASSETS
           
    Current Assets:
           
          Cash and Cash Equivalents
  $ 12,680     $ 21,867  
          Restricted Cash (A)
    -       2,100  
          Receivables, Net
    42,528       36,084  
          Inventories
    23,431       17,086  
          Other Current Assets
    14,290       12,871  
              Total Current Assets
    92,929       90,008  
    Deferred Income Taxes
    10,534       10,534  
    Loan to Joint Venture
    1,500       1,500  
    Investment in Joint Venture
    6,759       5,176  
    Other Long Term Assets
    659       733  
    Property, Plant and Equipment, Net
    38,315       37,051  
    $ 150,696     $ 145,002  


LIABILITIES AND SHAREHOLDERS’ EQUITY
    Current Liabilities:
           
          Accounts Payable
    26,659     $ 21,192  
          Other
    25,120       25,038  
              Total Current Liabilities
    51,779       46,230  
    Borrowings Under Line of Credit Facility
    -       -  
    Accrued Pension and Post Retirement Obligations
    21,236       22,982  
    Shareholders’ Equity
    241,334       242,115    
    Accumulated Other Comprehensive Loss
    (30,838 )     (31,941 )
    Less:  Treasury Stock
    (136,022 )     (136,047 )
              Total STRATTEC SECURITY CORPORATION Shareholders’ Equity
    74,474       74,127  
               Non-Controlling Interest
    3,207       1,663  
    Total Shareholders’ Equity
    75,790       77,681  
    $ 150,696     $ 145,002  
 
NOTE A:
Represents a commercial guarantee by STRATTEC SECURITY CORPORATION relating to a promissory note issued by Vehicle Access Systems Technology, LLC (VAST, LLC).  This guarantee was canceled in October 2010.



 

 

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

   
Third Quarter Ended
   
Nine Months Ended
 
   
March 27, 2011
   
March 28, 2010
   
March 27, 2011
   
March 28, 2010
 
   
 
                   
                         
Cash Flows from Operating Activities:
                       
Net Income
  $ 742     $ 1,049     $ 4,264     $ 2,824  
Adjustment to Reconcile Net Income to
                               
     Cash (Used In) Provided by Operating Activities:
                               
          Equity Earnings in VAST LLC Joint Venture
    (197 )     (160 )     (1,000 )     (639 )
          Depreciation and Amortization
    1,677       1,757       4,904       5,335  
          Foreign Currency Transaction Loss
    368       168       558       325  
          Unrealized Loss Foreign Currency Option Contracts
    114       -       114       -  
          Stock Based Compensation Expense
    155       136       453       340  
          Recovery of Doubtful Accounts
    -       -       -       (421 )
          Deferred Tax Provision
    -       -       -       3,258  
          Curtailment Loss
    -       -       -       505  
          Impairment Charge
    -       -       -       223  
          Environmental
    -       -       -       (1,125 )
          Change in Operating Assets/Liabilities
    (5,453 )     (7,622 )     (9,650 )     (9,162 )
          Other, net
    32       13       49       35  
                                 
Net Cash (Used In) Provided by Operating Activities
    (2,562 )     (4,659 )     (308 )     1,498  
                                 
Cash Flows from Investing Activities:
                               
     Investment in Joint Ventures
    (150 )     -       (300 )     (100 )
     Loan to Joint Venture
    -       -       -       (1,500 )
     Restricted Cash
    -       -       2,100       (2,100 )
     Purchase of Additional Interest
             in ADAC-STRATTEC LLC
    -       -       (22 )     -  
     Additions to Property, Plant and Equipment
    (2,245 )     (1,841 )     (5,727 )     (4,945 )
     Proceeds from Sale of Property, Plant and Equipment
    21       -       21       10  
Net Cash Used in Investing Activities
    (2,374 )     (1,841 )     (3,928 )     (8,635 )
                                 
Cash Flow from Financing Activities:
                               
     Dividends Paid
    -       -       (3,989 )     -  
     Repayment of Loan to Related Parties
    (100 )     (225 )     (850 )     (225 )
     Exercise of Stock Options and Employee Stock
             Purchases
    16       10       44       33  
                                 
Net Cash Used in Financing Activities
    (84 )     (215 )     (4,795 )     (192 )
                                 
Effect of Foreign Currency Fluctuations on Cash
    (111 )     (103 )     (156 )     (237 )
                                 
Net Decrease in Cash & Cash Equivalents
    (5,131 )     (6,818 )     (9,187 )     (7,566 )
                                 
Cash and Cash Equivalents:
                               
     Beginning of Period
    17,811       22,016       21,867       22,764  
     End of Period
  $ 12,680     $ 15,198     $ 12,680     $ 15,198  

 

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