STRT Strattec Security Corporation

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): May 9, 2024

STRATTEC SECURITY CORPORATION

(Exact Name of Registrant as Specified in Charter)

Wisconsin		0-25150		39-1804239
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

 

3333 West Good Hope Road, Milwaukee, Wisconsin 53209

(Address of Principal Executive Offices, and Zip Code)

(414) 247-3333

Registrant’s Telephone Number, Including Area Code

 

 

(Former name or former address, if changed since last report)

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:

		Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

		Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

		Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, $.01 par value		STRT		The Nasdaq Global Stock Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

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Section 2 – Financial Information

 

Item 2.02. Results of Operations and Financial Condition.

 

On May 9, 2024, STRATTEC SECURITY CORPORATION (the “Company”) issued a press release (the “Press Release”) announcing results for the fiscal third quarter ended March 31, 2024. A copy of the Press Release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

 

Pursuant to General Instruction B.2 of Current Report on Form 8-K, the information in this Item 2.02 and Exhibit 99.1 is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section. Furthermore, the information in this Item 2.02 and Exhibit 99.1 shall not be deemed to be incorporated by reference into the filings of STRATTEC under the Securities Act of 1933, as amended (the “Securities Act”), except as may be expressly set forth by specific reference in such filing.

 

Item 7.01 Regulation FD Disclosure.

 

As described in “Item 2.02 Results of Operations and Financial Condition” above, on May 9, 2024, the Company issued a press release announcing earnings results for the fiscal third quarter ended March 31, 2024. The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K.

 

Pursuant to General Instruction B.2 of Current Report on Form 8-K, the information in this Item 7.01 and Exhibit 99.1 is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. Furthermore, the information in this Item 7.01 and Exhibit 99.1 shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act, except as may be expressly set forth by specific reference in such filing.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit

Number Description

 

99.1 Press Release of STRATTEC SECURITY CORPORATION, issued May 9, 2024.

 

104 Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

 

 

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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 hereunto duly authorized.

 

STRATTEC SECURITY CORPORATION

 

By: /s/ Dennis P. Bowe

Dennis P. Bowe, Vice President and

Chief Financial Officer

 

 

Date: May 9, 2024

 

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Exhibit 99.1

 

 

STRATTEC SECURITY CORPORATION REPORTS FISCAL 2024 THIRD QUARTER

OPERATING RESULTS

May 9, 2024

Third Fiscal Quarter earnings per share $0.37 vs $0.57 loss, an improvement driven by customer pricing increases and higher sales

Milwaukee, Wisconsin – STRATTEC SECURITY CORPORATION (NASDAQ:STRT) is a market leader of a comprehensive range of "Smart" Vehicle Power Access and Electronic and Security Solutions, serving the global automotive industry.

Third Quarter Fiscal 2024 Financial Highlights

STRATTEC Interim CEO Rolando Guillot said, “This quarter we continued to make progress on our financial performance due to improved pricing and new product introductions that are expanding STRATTEC’s offerings to our customers. We will continue to focus on addressing persistent cost challenges and the opportunities we have to optimize our working capital and a strong balance sheet.”

Third Quarter Fiscal 2024 Financial Summary

		Third Quarter Ending
		Mar 31, 2024		Apr. 2, 2023		Inc (Dec)
(Dollars in thousands, except per share data)
Net Sales		$ 140,773		$ 127,183		$ 13,590
Gross Profit		$ 14,684		$ 10,001		$ 4,683
Gross Margin		10.4%		7.9%
Operating Expenses		$ 12,725		$ 12,485		$ 240
Operating Income (Loss) from Operations		$ 1,959		$ (2,484)		$ 4,443
Net Income (Loss)		$ 1,506		$ (2,256)		$ 3,762
Diluted Earnings (Loss) Per Share		$ 0.37		$ (0.57)		$ 0.94

 

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Revenue growth was driven by $7.0 million of price increases to our major customers and $6.6 million of higher sales associated with the launch of new product programs, the latter representing a 5.2% growth in sales from prior year. The growth in new product sales primarily stems from additional content of our latch and power access product lines on a major truck platform.

Gross margin improvement was driven by pricing increases, higher sales, lower raw material costs, lower warranty costs and $384,000 of workforce and production efficiencies realized from our Mexican operations. Offsetting those positive trends were unfavorable absorption of labor and overhead costs with inventory reductions, $2.1 million of unfavorable U.S. dollar to Mexican peso exchange rate effects, $1.8 million of wage increases due to a mandatory Mexican minimum wage-increase, $1.2 million higher prices paid to certain suppliers and $778,000 of increased freight costs primarily related to the launch of new programs.

Operating expenses increased primarily due to a $817,000 expense associated with the company’s annual incentive bonus plan, which was partially offset with lower new product development costs compared with the prior year period. Net Income was $1.5 million compared to a loss of $2.3 million last year. Fully diluted earnings per share were $0.37 compared with a loss of $0.57 last year.

Balance Sheet & Cash Flow

As of March 31, 2024, the Company’s cash and cash equivalents on hand totaled $9.6 million. Total debt as of March 31, 2024 was $13.0 million, which was all held by the ADAC-STRATTEC LLC joint venture.

For the third quarter of fiscal 2024, operating cash flow was negative $309,000, compared to the prior year quarter operating cash flow of negative $1.2 million. The negative operating cash flow for the current quarter was driven by a temporary increase in working capital, specifically in accounts receivable related to higher sales in the quarter, partially offset by a $10.8 million reduction in inventory. Capital expenditures in the third quarter of fiscal 2024 were $1.7 million, compared with $4.2 million for the third quarter of fiscal 2023.

 

 

 

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About STRATTEC

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, power tailgate systems for trucks, 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 each company’s products to global customers as cooperating partners of the “VAST Automotive Group” brand name. STRATTEC’s history in the automotive business spans over 110 years.

Caution on Forward-Looking Statements

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, changes in warranty provisions and customer product recall policies, work stoppages at the Company or at the location of its key customers as a result of labor disputes, foreign currency fluctuations, uncertainties stemming from U.S. trade policies, tariffs and reactions to same from foreign countries, the volume and scope of product returns, adverse business and operational issues resulting from the continuing effects of the coronavirus (COVID-19) pandemic, matters adversely impacting the timing and availability of component parts and raw materials needed for the production of our products and the products of our customers and fluctuations in our costs of operation (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

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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.

 

Contact: Dennis Bowe

Vice President and

Chief Financial Officer

414-247-3399

www.strattec.com

 

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STRATTEC SECURITY CORPORATION

Condensed Results of Operations

(In Thousands except per share amounts)

(Unaudited)

 

	Three Months Ended				Nine Months Ended
	March 31, 2024		April 2, 2023		March 31, 2024		April 2, 2023
Net Sales	$ 140,773		$ 127,183		$ 394,711		$ 360,727
Cost of Goods Sold	126,089		117,182		347,810		330,843
Gross Profit	14,684		10,001		46,901		29,884
Engineering, Selling &      Administrative Expenses	12,725		12,485		38,778		37,266
Income (Loss) from Operations	1,959		(2,484)		8,123		(7,382)
Interest Expense	(222)		(266)		(661)		(591)
Interest Income	143		-		337		-
Other (Expense) Income, net	(208)		(404)		759		470
Income (Loss) Before Provision      for Income Taxes and Non-      Controlling Interest	1,672		(3,154)		8,558		(7,503)
Provision (Benefit) for Income      Taxes	546		133		2,197		(1,638)
Net Income (Loss)	1,126		(3,287)		6,361		(5,865)
Net Loss Attributable      to Non-Controlling Interest	(380)		(1,031)		(332)		(1,895)
Net Income (Loss) Attributable      to STRATTEC SECURITY      CORPORATION	$ 1,506		$ (2,256)		$ 6,693		$ (3,970)
Earnings (Loss) Per Share:
Basic	$ 0.38		$ (0.57)		$ 1.69		$ (1.01)
Diluted	$ 0.37		$ (0.57)		$ 1.67		$ (1.01)
Average Basic Shares      Outstanding	3,988		3,928		3,971		3,918
Average Diluted Shares      Outstanding	4,017		3,928		3,996		3,918
Other
Capital Expenditures	$1,672		$ 4,247		$ 6,065		$ 13,724
Depreciation	$4,059		$ 4,347		$ 12,774		$ 13,145

 

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STRATTEC SECURITY CORPORATION

Condensed Balance Sheet Data

(In Thousands)

(Unaudited)

 

				March 31, 2024		July 2, 2023
ASSETS
	Current Assets:
		Cash and Cash Equivalents		$ 9,594		$ 20,571
		Receivables, net		97,524		89,811
		Inventories, net		78,612		77,597
		Customer Tooling in Progress, net		25,505		20,800
		Value Added Tax Recoverable		19,272		7,912
		Other Current Assets		10,423		9,091
			Total Current Assets	240,930		225,782
	Other Long-term Assets			19,309		20,702
	Property, Plant and Equipment, net			88,310		94,446
				$ 348,549		$ 340,930
LIABILITIES AND SHAREHOLDERS' EQUITY
	Current Liabilities:
		Accounts Payable		$ 50,582		$ 57,927
		Value Added Tax Payable		8,906		6,499
		Borrowings Under Credit Facility - Current		13,000		-
		Other		48,284		44,560
			Total Current Liabilities	120,772		108,986
	Accrued Pension and Postretirement Obligations			2,463		2,363
	Borrowings Under Credit Facility - Long-Term			-		13,000
	Other Long-term Liabilities			5,200		5,557
	Shareholders' Equity			342,521		334,683
	Accumulated Other Comprehensive Loss			(13,205)		(14,194)
	Less: Treasury Stock			(135,489)		(135,526)
		Total STRATTEC SECURITY
			CORPORATION Shareholders' Equity	193,827		184,963
		Non-Controlling Interest		26,287		26,061
	Total Shareholders' Equity			220,114		211,024
				$ 348,549		$ 340,930

 

 

 

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STRATTEC SECURITY CORPORATION

Condensed Cash Flow Statement Data

(In Thousands)

(Unaudited)

				Three Months Ended					Nine Months Ended
				March 31, 2024		April 2, 2023			March 31, 2024		April 2, 2023
Cash Flows from Operating Activities:
Net Income (Loss)				$ 1,126		$ (3,287)			$ 6,361		$ (5,865)
Adjustments to Reconcile Net Income (Loss) to Cash (Used in) Provided by Operating Activities:
		Depreciation		4,059		4,347			12,774		13,145
		Equity (Earnings) Loss in Joint Ventures		-		(819)			269		(1,934)
		Foreign Currency Transaction Loss		475		1,529			126		2,114
		Unrealized Loss (Gain) on Peso Forward      Contracts		222		70			(604)		93
		Loss on Settlement of Pension Obligation		-		217			-		217
		Stock Based Compensation Expense		240		265			1,224		1,139
		Change in Operating Assets/Liabilities		(6,676)		(3,665)			(27,775)		(1,767)
	Other, net			245		120			402		370
Net Cash (Used in) Provided by Operating      Activities				(309)		(1,223)			(7,223)		7,512
Cash Flows from Investing Activities:
	Proceeds from sale of interest in VAST LLC			-		-			2,000		-
	Investment in Joint Ventures			-		(133)			-		(237)
	Additions to Property, Plant & Equipment			(1,672)		(4,247)			(6,065)		(13,724)
	Proceeds on Sales of Property, Plant &      Equipment			-		11			-		15
Net Cash Used in Investing Activities				(1,672)		(4,369)			(4,065)		(13,946)
Cash Flows from Financing Activities:
	Borrowings on Line of Credit Facility			-		4,000			2,000		13,000
	Payments on Line of Credit Facility			-		-			(2,000)		(3,000)
	Dividends Paid to Non-Controlling Interest of Subsidiary			-		-			-		(600)
	Exercise of Stock Options and Employee Stock Purchases			18		18			55		164
Net Cash Provided by Financing Activities				18		4,018			55		9,564
Effect of Foreign Currency Fluctuations on Cash				(18)		82			256		182
Net (Decrease) Increase in Cash & Cash Equivalents				(1,981)		(1,492)			(10,977)		3,312
Cash & Cash Equivalents:
	Beginning of Period			11,575		13,578			20,571		8,774
	End of Period			$ 9,594		$ 12,086			$ 9,594		$ 12,086

 

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v3.24.1.1.u2

Document and Entity Information	May 09, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	May 09, 2024
Entity File Number	0-25150
Entity Registrant Name	STRATTEC SECURITY CORPORATION
Entity Central Index Key	0000933034
Entity Incorporation, State or Country Code	WI
Entity Tax Identification Number	39-1804239
Entity Address, Address Line One	3333 West Good Hope Road
Entity Address, City or Town	Milwaukee
Entity Address, State or Province	WI
Entity Address, Postal Zip Code	53209
City Area Code	414
Local Phone Number	247-3333
Title of 12(b) Security	Common Stock, $.01 par value
Trading Symbol	STRT
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false

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