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): January
19, 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
January 19, 2006, STRATTEC SECURITY CORPORATION issued a press release (the
"Press Release") announcing results for the fiscal second quarter ended January
1, 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 January 19, 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:
January 19, 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 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 19, 2006 -- STRATTEC SECURITY CORPORATION (NASDAQ:STRT)
today reported operating results for the fiscal second quarter ended January
1,
2006.
Net
sales
for the Company’s second quarter ended January 1, 2006 were $43.3 million,
compared to net sales of $48.4 million for the second quarter ended December
26,
2004. Based on the timing of the Company’s quarter end and holiday shutdown, the
2006 fiscal second quarter had 12 customer shipping weeks while 2005 fiscal
second quarter had 13 weeks. The impact of one less week of customer shipments
during the current quarter reduced sales by approximately $2.4 million. Net
income for the period was $2.7 million, compared
to $4.4 million in the prior year quarter. Diluted earnings per share for the
period were $.71 compared to $1.15 in the prior year quarter.
For
the
six months ended January 1, 2006, net sales were $88.1 million compared to
net
sales of $93.0 million in the prior year period. Net income was $4.4 million
compared to net income of $8.1 million in the prior year period and diluted
earnings per share were $1.17 compared to $2.09. The current six months
operating results includes 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 first quarter and 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
slightly during the current quarter to $13.1 million compared to $12.8 million
due to a more favorable vehicle content mix. Sales to Mitsubishi Motor
Manufacturing of America, Inc. were $1.3 million compared to $1.0 million due
to
higher vehicle production volumes and product content. Sales to Ford Motor
Company were $6.8 million compared to $8.5 million due to pre-programmed price
reductions, discontinued models and lower levels of vehicle production. Sales
to
General Motors Corporation were $7.9 million compared to $10.8 million due
to a
combination of price reductions, discontinued models and lower levels of
production on General Motors full-size SUV’s due to change-over to new models
and inventory balancing on certain other vehicles.
Sales
to
Delphi Corporation were $7.1 million compared to $8.0 million due to
pre-programmed price reductions and lower levels of production.
Gross
profit margins were 19.7 percent in the current quarter compared to 23.7 percent
in the prior year quarter. The gross profit margin decline during the current
quarter was attributed to lower production volumes, higher purchased material
costs for brass, zinc, and magnesium along with an unfavorable Mexico peso
to
U.S. dollar exchange rate affecting the Company’s Mexico
Operations.
Operating
expenses were $5.5 million in the current quarter, compared to $4.8 million
in
the prior year quarter. Increase in operating expense during the current quarter
was attributed primarily to 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 $.06.
The
provision for income taxes in the current quarter includes a favorable foreign
tax adjustment that positively impacted earnings per share by $.08.
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)
|
Second
Quarter Ended
|
Six
Months Ended
|
||||||||||||
|
January
1,
2006
|
December
26,
2004
|
January
1,
2006
|
December
26,
2004
|
||||||||||
|
(Unaudited)
|
(Unaudited)
|
||||||||||||
|
Net
Sales
|
$
|
43,278
|
$
|
48,436
|
$
|
88,071
|
$
|
93,027
|
|||||
|
Cost
of Goods Sold
|
34,736
|
36,947
|
69,755
|
70,768
|
|||||||||
|
Gross
Profit
|
8,542
|
11,489
|
18,316
|
22,259
|
|||||||||
|
Engineering,
Selling &
|
|||||||||||||
|
Administrative
Expenses
|
5,494
|
4,848
|
10,779
|
10,014
|
|||||||||
|
Provision
for Doubtful Accounts
|
-
|
43
|
3,200
|
40
|
|||||||||
|
Income
from Operations
|
3,048
|
6,598
|
4,337
|
12,205
|
|||||||||
|
Interest
Income
|
574
|
233
|
1,063
|
416
|
|||||||||
|
Interest
Expense
|
-
|
-
|
-
|
-
|
|||||||||
|
Other
Income, Net
|
124
|
196
|
164
|
159
|
|||||||||
|
3,746
|
7,027
|
5,564
|
12,780
|
||||||||||
|
Provision
for Income Taxes
|
1,090
|
2,600
|
1,168
|
4,729
|
|||||||||
|
Net
Income
|
$
|
2,656
|
$
|
4,427
|
$
|
4,396
|
$
|
8,051
|
|||||
|
Earnings
Per Share:
|
|||||||||||||
|
Basic
|
$
|
.71
|
$
|
1.16
|
$
|
1.17
|
$
|
2.12
|
|||||
|
Diluted
|
$
|
.71
|
$
|
1.15
|
$
|
1.17
|
$
|
2.09
|
|||||
|
Average
Basic
|
|||||||||||||
|
Shares
Outstanding
|
3,744
|
3,806
|
3,745
|
3,806
|
|||||||||
|
Average
Diluted
|
|||||||||||||
|
Shares
Outstanding
|
3,748
|
3,840
|
3,751
|
3,847
|
|||||||||
|
Other
|
|||||||||||||
|
Capital
Expenditures
|
$
|
2,260
|
$
|
1,322
|
$
|
3,840
|
$
|
2,020
|
|||||
|
Depreciation
& Amortization
|
$
|
1,808
|
$
|
1,817
|
$
|
3,632
|
$
|
3,681
|
|||||
3
STRATTEC
SECURITY CORPORATION
Condensed
Balance Sheet Data
(In
Thousands)
|
January
1, 2006
|
|
July
3, 2005
|
|||||
|
(Unaudited)
|
|||||||
|
ASSETS
|
|||||||
|
Current
Assets:
|
|||||||
|
Cash
and Cash Equivalents
|
$
|
55,168
|
$
|
56,950
|
|||
|
Receivables,
net
|
20,588
|
26,053
|
|||||
|
Inventories
|
12,337
|
11,654
|
|||||
|
Other
Current Assets
|
11,244
|
10,030
|
|||||
|
Total
Current Assets
|
99,337
|
104,687
|
|||||
|
Deferred
Income Taxes
|
1,796
|
1,796
|
|||||
|
Investment
in Joint Venture
|
1,614
|
1,412
|
|||||
|
Other
Long Term Assets
|
596
|
603
|
|||||
|
Property,
Plant and Equipment, Net
|
29,648
|
29,592
|
|||||
|
$
|
132,991
|
$
|
138,090
|
||||
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
|||||||
|
Current
Liabilities:
|
|||||||
|
Accounts
Payable
|
$
|
14,742
|
$
|
17,218
|
|||
|
Other
|
10,054
|
12,850
|
|||||
|
Total
Current Liabilities
|
24,796
|
30,068
|
|||||
|
Borrowings
Under Line of Credit
|
-
|
-
|
|||||
|
Accrued
Pension and Post
|
|||||||
|
Retirement
Obligations
|
11,471
|
16,271
|
|||||
|
Shareholders’
Equity
|
226,339
|
220,261
|
|||||
|
Accumulated
Other
|
|||||||
|
Comprehensive
Loss
|
(11,962
|
)
|
(12,047
|
)
|
|||
|
Less:
Treasury Stock
|
(117,653
|
)
|
(116,463
|
)
|
|||
|
Total
Shareholders’ Equity
|
96,724
|
91,751
|
|||||
|
$
|
132,991
|
$
|
138,090
|
||||
4
STRATTEC
SECURITY CORPORATION
Condensed
Cash Flow Statement Data
(In
Thousands)
|
Second
Quarter Ended
|
|
Six
Months Ended
|
|||||||||||
|
January
1,
2006
|
|
December
26,
2004
|
|
January
1,
2006
|
|
December
26,
2004
|
|||||||
|
(Unaudited)
|
|
(Unaudited)
|
|||||||||||
|
Cash
Flows from Operating Activities:
|
|||||||||||||
|
Net
Income
|
$
|
2,656
|
$
|
4,427
|
$
|
4,396
|
$
|
8,051
|
|||||
|
Adjustment
to Reconcile Net Income to
|
|||||||||||||
|
Cash
Used in Operating Activities:
|
|||||||||||||
|
Depreciation
|
1,808
|
1,817
|
3,632
|
3,681
|
|||||||||
|
Stock
Based Compensation Expense
|
351
|
-
|
560
|
-
|
|||||||||
|
Tax
Benefit from Options Exercised
|
-
|
267
|
61
|
672
|
|||||||||
|
Change
in Operating Assets/Liabilities
|
4,701
|
(823
|
)
|
(6,512
|
)
|
(11,479
|
)
|
||||||
|
Other,
net
|
149
|
208
|
65
|
224
|
|||||||||
|
Net
Cash Provided by Operating Activities
|
9,665
|
5,896
|
2,202
|
1,149
|
|||||||||
|
Cash
Flows from Investing Activities:
|
|||||||||||||
|
Investment
in Joint Ventures
|
(50
|
)
|
-
|
(50
|
)
|
(75
|
)
|
||||||
|
Additions
to Property, Plant and Equipment
|
(2,260
|
)
|
(1,322
|
)
|
(3,840
|
)
|
(2,020
|
)
|
|||||
|
Proceeds
from Sale of Property, Plant
|
|||||||||||||
|
and
Equipment
|
22
|
-
|
22
|
-
|
|||||||||
|
Net
Cash Used in Investing Activities
|
(2,288
|
)
|
(1,322
|
)
|
(3,868
|
)
|
(2,095
|
)
|
|||||
|
Cash
Flow from Financing Activities:
|
|||||||||||||
|
Purchase
of Common Stock
|
-
|
(787
|
)
|
(1,196
|
)
|
(6,254
|
)
|
||||||
|
Reissue/Exercise
of Stock Options
|
20
|
1,083
|
1,080
|
3,132
|
|||||||||
|
Net
Cash Provided by (Used in) Financing Activities
|
20
|
296
|
(116
|
)
|
(3,122
|
)
|
|||||||
|
Net
Increase (Decrease) in Cash & Cash Equivalents
|
7,397
|
4,870
|
(1,782
|
)
|
(4,068
|
)
|
|||||||
|
Cash
and Cash Equivalents:
|
|||||||||||||
|
Beginning
of Period
|
47,771
|
45,293
|
56,950
|
54,231
|
|||||||||
|
End
of Period
|
$
|
55,168
|
$
|
50,163
|
$
|
55,168
|
$
|
50,163
|
|||||
5