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): October 24, 2013
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STRATTEC SECURITY CORPORATION
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(Exact name of registrant as specified in charter)
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Wisconsin
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(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)
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(I.R.S. Employer I.D. Number)
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3333 West Good Hope Road
Milwaukee, WI
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53209
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(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)
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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 24, 2013, STRATTEC SECURITY CORPORATION issued a press release (the "Press Release") announcing results for the fiscal first quarter ended September 29, 2013. 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 October 24, 2013.
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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 24, 2013
By: /s/ Patrick J. Hansen
Patrick J. Hansen, Senior Vice President and
Chief Financial Officer
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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 2014 FIRST QUARTER RESULTS
Milwaukee, Wisconsin – October 24, 2013 -- STRATTEC SECURITY CORPORATION (NASDAQ:STRT) today reported operating results for the fiscal first quarter ended September 29, 2013.
Net sales for the Company’s first quarter ended September 29, 2013 were $79.6 million, compared to net sales of $70.8 million for the prior year quarter ended September 30, 2012. Net income for the current year quarter was $3,211,000, compared to net income of $2,670,000 in the prior year quarter. Diluted earnings per share for the current year quarter were $.91 compared to diluted earnings per share of $.78 in the prior year quarter.
Net sales to each of our customers or customer groups in the current year quarter and prior year quarter were as follows (in thousands):
| Three Months Ended | ||||||||
| September 29, 2013 | September 30, 2012 | |||||||
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Chrysler Group LLC
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$ | 26,585 | $ | 22,381 | ||||
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General Motors Company
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15,004 | 15,050 | ||||||
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Ford Motor Company
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11,434 | 9,595 | ||||||
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Tier 1 Customers
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15,786 | 13,178 | ||||||
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Commercial and Other OEM Customers
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8,637 | 7,771 | ||||||
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Hyundai / Kia
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2,149 | 2,832 | ||||||
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TOTAL
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$ | 79,595 | $ | 70,807 | ||||
Increased sales to Chrysler Group LLC and Ford Motor Company in the current year quarter were primarily due to higher customer vehicle production volumes and increased product content on models for which we supply components. The reduction in sales to General Motors Company in the current year quarter over the same period in the prior year was mainly attributable to lower OE Service sales. Increased sales to Tier 1, Commercial and Other OEM customers during the current year quarter related principally to market growth and the increasing impact in our sales of other vehicle access control products, such as latches, fobs, and driver controls, that we have developed in recent years to complement our historic core business of locks and keys. The reduction in sales to Hyundai / Kia in the current year quarter was primarily due to lower customer vehicle production volume on models for which we supply components.
The gross profit margin was 18.2 percent in the current year quarter compared to 19.4 percent in the prior year quarter. The reduction in gross profit margin in the current year quarter was impacted by a less favorable product sales mix, higher costs associated with new product launches and increased raw material costs for zinc.
Engineering, Selling and Administrative expense spending was fairly consistent between years and decreased as a percentage of net sales to 11.9 percent in the current year quarter from 12.9 percent in the prior year quarter.
During the current year quarter STRATTEC contributed $750,000 to its Defined Benefit Pension Trust.
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Frank Krejci, President and CEO commented:
STRATTEC continues to benefit from the solid performance of the North American automotive industry. Not only has it resulted in market growth, but new innovative industry designs have created opportunities for us to develop new products. Globally, as part of VAST, we continue to benefit from the growth and return to profitability of our VAST China operations as well as the benefits of leveraging technology, purchasing, customer support and manufacturing resources with our partners.
We also have had many other recent successes that do not get reflected in our earnings or our increased quarterly dividend. In addition to being named a Supplier of the Year by Chrysler a few months ago, during this quarter we won local awards as Healthiest Employer for our wellness programs and the Melvin Lurie Award for excellence in labor-management relations. I am very proud of the accomplishments of our Company and all of our associates.
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 a unique strategic relationship with WITTE Automotive of Velbert, Germany and ADAC Automotive of Grand Rapids, Michigan. Under this relationship, STRATTEC, WITTE and ADAC market our companies' products to global customers under the “VAST” brand name. 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.
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STRATTEC SECURITY CORPORATION
Results of Operations
(In Thousands except per share amounts)
(Unaudited)
| First Quarter Ended | ||||||||
| September 29, 2013 | September 30, 2012 | |||||||
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Net Sales
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$ | 79,595 | $ | 70,807 | ||||
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Cost of Goods Sold
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65,080 | 57,094 | ||||||
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Gross Profit
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14,515 | 13,713 | ||||||
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Engineering, Selling & Administrative Expenses
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9,470 | 9,120 | ||||||
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Income from Operations
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5,045 | 4,593 | ||||||
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Interest Income
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6 | 3 | ||||||
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Equity Earnings (Loss) of Joint Ventures
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294 | (12 | ) | |||||
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Interest Expense
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(14 | ) | (5 | ) | ||||
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Other Income (Expense), Net
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279 | (18 | ) | |||||
| 5,610 | 4,561 | |||||||
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Provision for Income
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Taxes
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1,756 | 1,246 | ||||||
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Net Income
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3,854 | 3,315 | ||||||
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Net Income Attributable
to Non-Controlling Interest |
(643 | ) | (645 | ) | ||||
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Net Income Attributable
to STRATTEC SECURITY CORPORATION
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$ | 3,211 | $ | 2,670 | ||||
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Earnings Per Share:
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Basic
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$ | 0.93 | $ | 0.79 | ||||
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Diluted
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$ | 0.91 | $ | 0.78 | ||||
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Average Basic
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Shares Outstanding
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3,382 | 3,309 | ||||||
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Average Diluted
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Shares Outstanding
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3,460 | 3,340 | ||||||
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Other
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Capital Expenditures
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$ | 2,876 | $ | 2,711 | ||||
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Depreciation & Amortization
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$ | 2,112 | $ | 1,758 | ||||
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STRATTEC SECURITY CORPORATION
Condensed Balance Sheet Data
(In Thousands)
| September 29, 2013 | June 30, 2013 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
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Current Assets:
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Cash and cash equivalents
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$ | 12,806 | $ | 20,307 | ||||
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Receivables, net
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52,013 | 47,514 | ||||||
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Inventories, net
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27,344 | 24,312 | ||||||
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Other current assets
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15,308 | 14,366 | ||||||
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Total Current Assets
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107,471 | 106,499 | ||||||
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Investment in Joint Ventures
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9,464 | 9,166 | ||||||
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Other Long Term Assets
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5,258 | 2,420 | ||||||
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Property, Plant and Equipment, Net
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51,978 | 51,415 | ||||||
| $ | 174,171 | $ | 169,500 | |||||
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LIABILITIES AND SHAREHOLDERS’ EQUITY
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Current Liabilities:
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Accounts Payable
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$ | 28,452 | $ | 25,543 | ||||
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Borrowings Under Credit Facility
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3,000 | 2,250 | ||||||
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Other
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20,866 | 22,932 | ||||||
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Total Current Liabilities
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52,318 | 50,725 | ||||||
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Accrued Pension and Post Retirement Obligations
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4,181 | 4,181 | ||||||
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Deferred Income Taxes
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1,020 | 1,009 | ||||||
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Other Long-term Liabilities
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1,729 | 1,705 | ||||||
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Shareholders’ Equity
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265,649 | 262,368 | ||||||
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Accumulated Other Comprehensive Loss
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(22,093 | ) | (22,212 | ) | ||||
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Less: Treasury Stock
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(135,934 | ) | (135,938 | ) | ||||
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Total STRATTEC SECURITY
CORPORATION Shareholders’ Equity |
107,622 | 104,218 | ||||||
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Non-Controlling Interest
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7,301 | 7,662 | ||||||
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Total Shareholders’ Equity
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114,923 | 111,880 | ||||||
| $ | 174,171 | $ | 169,500 | |||||
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STRATTEC SECURITY CORPORATION
Condensed Cash Flow Statement Data
(In Thousands)
(Unaudited)
| First Quarter Ended | ||||||||
| September 29, 2013 | September 30, 2012 | |||||||
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Cash Flows from Operating Activities:
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Net Income
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$ | 3,854 | $ | 3,315 | ||||
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Adjustment to Reconcile Net Income to Net
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Cash (Used in) Provided by Operating Activities:
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Depreciation and Amortization
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2,112 | 1,758 | ||||||
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Equity (Earnings) Loss in Joint Ventures
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(294 | ) | 12 | |||||
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Foreign Currency Transaction (Gain) Loss
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(212 | ) | 455 | |||||
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Unrealized Gain on Foreign Currency Option Contracts
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- | (311 | ) | |||||
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Stock Based Compensation Expense
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354 | 76 | ||||||
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Change in Operating Assets/Liabilities
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(10,040 | ) | (3,572 | ) | ||||
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Other, net
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86 | (30 | ) | |||||
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Net Cash (Used in) Provided by Operating Activities
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(4,140 | ) | 1,703 | |||||
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Cash Flows from Investing Activities:
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Investment in VAST LLC Joint Venture
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- | (200 | ) | |||||
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Proceeds from Sale of Property, Plant and Equipment
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8 | 30 | ||||||
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Additions to Property, Plant and Equipment
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(2,876 | ) | (2,711 | ) | ||||
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Net Cash Used in Investing Activities
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(2,868 | ) | (2,881 | ) | ||||
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Cash Flow from Financing Activities:
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Borrowings on Line of Credit Facility
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750 | 1,500 | ||||||
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Dividends Paid to Non-Controlling Interest of Subsidiaries
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(984 | ) | (1,131 | ) | ||||
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Dividends Paid
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(380 | ) | (336 | ) | ||||
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Exercise of Stock Options and Employee Stock Purchases
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98 | 19 | ||||||
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Net Cash (Used in) Provided by Financing Activities
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(516 | ) | 52 | |||||
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Foreign Currency Impact on Cash
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23 | (87 | ) | |||||
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Net Decrease in Cash & Cash Equivalents
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(7,501 | ) | (1,213 | ) | ||||
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Cash and Cash Equivalents:
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Beginning of Period
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20,307 | 17,487 | ||||||
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End of Period
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$ | 12,806 | $ | 16,274 | ||||
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