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STRATTEC SECURITY CORPORATION Reports Fiscal 2013 Second Quarter Results



STRATTEC SECURITY CORPORATION Reports Fiscal 2013 Second Quarter Results

MILWAUKEE, Jan. 24, 2013 (GLOBE NEWSWIRE) -- STRATTEC SECURITY CORPORATION
(Nasdaq:STRT) ("STRATTEC" or the "Company") today reported operating results
for the fiscal second quarter ended December 30, 2012.

Net sales for the Company's second quarter ended December 30, 2012 were $72.2
million, compared to net sales of $65.9 million for the second quarter ended
January 1, 2012. Net income for the current quarterly period was $2.4 million,
compared to net income of $1.5 million in the prior year quarter. Diluted
earnings per share for the current quarterly period were $.70 compared to
diluted earnings per share of $.47 during the prior year quarter.

For the six months ended December 30, 2012, net sales were $143.1 million
compared to net sales of $132.3 million during the prior year six month
period. Net income during the current six month period was $5.1 million
compared to net income of $2.8 million during the prior year six month period.
Diluted earnings per share were $1.48 for the current six month period ended
December 30, 2012 compared to diluted earnings per share of $.85 for the prior
year six month period ended January 1, 2012.

Net sales to each of our customers in the current year quarter and prior year
quarter were as follows (in millions):

                                   Three Months Ended
                                   December 30, 2012 January 1, 2012
                                                      
Chrysler Group LLC                 $23.0             $22.4
General Motors Company             13.5              14.4
Ford Motor Company                 10.5              8.1
Tier 1 Customers                   15.0              11.4
Commercial and Other OEM Customers 7.7               5.9
Hyundai / Kia                      2.5               3.7
TOTAL                              $72.2             $65.9

Increased sales to Chrysler Group LLC and Ford Motor Company in the current
quarter were primarily due to increased customer vehicle production volumes on
models for which we supply components. New product content also contributed to
the increased sales to Ford Motor Company. The reduction in sales to General
Motors Company in the current quarter was primarily attributed to business we
lost to other suppliers during the latter half of the 2012 model year,
 partially offset by higher production on other General Motors vehicles for
which we continue to supply components. Increased sales to Tier 1, Commercial
and Other OEM customers during the current quarter relates to market growth
and the increasing impact of other vehicle access control products such as
latches, fobs, and driver controls that have been developed in recent years to
complement our historic core business of locks and keys. The reduction in
sales to Hyundai / Kia in the current quarter was principally due to lower
customer vehicle production volume and the discontinuation of a vehicle model
for which we had been supplying components.

Gross profit margins were 17.0 percent in the current quarter compared to 17.1
percent in the prior year quarter.   The benefits of higher volumes on gross
profit margin in the current year quarter were negatively impacted by a less
favorable product sales mix, an unfavorable Mexico Peso to U.S. Dollar
exchange rate affecting the Company's operations in Mexico, higher expense
provisions for our pension plan and for the accrual of bonuses earned under
our incentive bonus plans.  The Company froze its Defined Benefit Pension Plan
for future benefit accruals effective January 1, 2010.  Therefore the increase
in pension expense during the current year is attributed to a lower discount
rate and the corresponding lower expected return on invested assets that are
measured at the end of fiscal year 2012. During the current quarter, the
Company contributed $1.75 million to its Defined Benefit Pension Trust.

Operating expenses as a percent of net sales in the current quarter decreased
to 11.7% from 12.1% in comparison to the prior year quarter. These expenses
would have declined further except for increased costs primarily for our
pension and incentive bonus plans as discussed above.

The Company is a partner in VAST LLC, a global alliance of companies involved
in the design and manufacture of automotive access products.  As reported in
our prior earnings releases, VAST's  operations in China incurred relocation
costs associated with moves to a new facility and start-up costs associated
with a new product line. The facility move has been completed but we
anticipate these start-up costs and losses to continue over the remaining
current fiscal year.

Included in Other (Expense) Income in the current quarter compared to the
prior year quarter were the following items (in thousands of dollars):

                                                       December 30, January 1,
                                                       2012         2012
                                                                     
Foreign Currency Transaction Gain (Loss)               $142         $(95)
Net Realized and Unrealized Gains on Mexican Peso      38           397
Option Contracts
Rabbi Trust (Loss) Gain                                (11)         144
Other                                                  18           57
                                                       $187         $503

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 products to global customers under the "VAST" brand
name. STRATTEC's history in the automotive business spans over 100 years.

The STRATTEC SECURITY CORPORATION logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=4700

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 fluctuations in 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)
                                                                     
                               Second Quarter Ended    Six Months Ended
                               December 30, January 1, December 30, January 1,
                               2012         2012       2012         2012
                                                                     
Net Sales                      $72,243      $65,886    $143,050     $132,263
                                                                     
Cost of Goods Sold             59,936       54,646     117,030      109,519
                                                                     
Gross Profit                   12,307       11,240     26,020       22,744
                                                                     
Engineering, Selling &         8,481        7,979      17,601       16,187
Administrative Expenses
                                                                     
                                                                     
Income from Operations         3,826        3,261      8,419        6,557
                                                                     
Interest Income                10           15         13           32
                                                                     
Equity Loss of VAST LLC Joint  (99)         (192)      (111)        (312)
Venture
                                                                     
Interest Expense               (10)         (23)       (15)         (54)
                                                                     
Other Income (Expense), Net    187          503        169          (365)
                                                                     
                               3,914        3,564      8,475        5,858
                                                                     
Provision for Income Taxes     1,074        1,260      2,320        1,581
                                                                     
Net Income                     2,840        2,304      6,155        4,277
                                                                     
Net Income Attributable to     (446)        (756)      (1,091)      (1,447)
Non-Controlling Interest
                                                                     
Net Income Attributable to     $2,394       $1,548     $5,064       $2,830
STRATTEC SECURITY CORPORATION
                                                                     
Earnings Per Share:                                                  
Basic                          $0.71        $0.47      $1.50        $0.86
Diluted                        $0.70        $0.47      $1.48        $0.85
Average Basic Shares           3,317        3,301      3,313        3,298
Outstanding
                                                                     
Average Diluted Shares         3,353        3,329      3,346        3,328
Outstanding
                                                                     
Other                                                                
Capital Expenditures           $2,477       $2,797     $5,188       $6,289
Depreciation & Amortization    $1,773       $1,679     $3,531       $3,331

 
 
 
 
STRATTEC SECURITY CORPORATION
Condensed Balance Sheet Data
(In Thousands)
                                                                   
                                                December 30, 2012 July 1, 2012
                                                (Unaudited)        
ASSETS                                                             
Current Assets:                                                    
Cash and Cash Equivalents                       $18,569           $17,487
Receivables, Net                                40,709            44,496
Inventories                                     26,536            21,236
Other Current Assets                            16,195            18,072
Total Current Assets                            102,009           101,291
Deferred Income Taxes                           9,735             9,742
Investment in Joint Venture                     8,400             8,139
Other Long Term Assets                          486               536
Property, Plant and Equipment, Net              48,285            46,330
                                                $168,915          $166,038
                                                                   
LIABILITIES AND SHAREHOLDERS' EQUITY                               
Current Liabilities:                                               
Accounts Payable                                $22,483           $24,149
Borrowings Under Line of Credit Facility        2,250             --
Other                                           30,723            32,824
Total Current Liabilities                       55,456            56,973
Accrued Pension and Post Retirement Obligations 21,155            21,667
Shareholders' Equity                            256,524           252,280
Accumulated Other Comprehensive Loss            (35,087)          (35,757)
Less: Treasury Stock                            (135,955)         (135,971)
Total STRATTEC SECURITY CORPORATION             85,482            80,552
Shareholders' Equity
Non-Controlling Interest                        6,822             6,846
Total Shareholders' Equity                      92,304            87,398
                                                $168,915          $166,038

 
 
 
STRATTEC SECURITY CORPORATION
Condensed Cash Flow Statement Data
(In Thousands)
(Unaudited)
                                                                     
                               Second Quarter Ended    Six Months Ended
                               December 30, January 1, December 30, January 1,
                               2012         2012       2012         2012
                                                                     
Cash Flows from Operating                                            
Activities:
Net Income                     $2,840       $2,304     $6,155       $4,277
Adjustment to Reconcile Net
Income to Cash Provided by                                           
Operating Activities:
Equity Loss in VAST LLC Joint  99           192        111          312
Venture
Depreciation and Amortization  1,773        1,679      3,531        3,331
Foreign Currency Transaction   (142)        94         313          (1,605)
(Gain) Loss
Unrealized (Gain) Loss on
Foreign Currency Option        (38)         (589)      (349)        1,716
Contracts
Stock Based Compensation       394          197        470          371
Expense
Change in Operating            (622)        1,541      (4,194)      (3,208)
Assets/Liabilities
Other, net                     (31)         --         (61)         16
                                                                     
Net Cash Provided by Operating 4,273        5,418      5,976        5,210
Activities
                                                                     
Cash Flows from Investing                                            
Activities:
Investment in Joint Ventures   --           (200)      (200)        (200)
Additions to Property, Plant   (2,477)      (2,797)    (5,188)      (6,289)
and Equipment
Proceeds from Sale of Property 31           --         61           --
and Equipment
Net Cash Used in Investing     (2,446)      (2,997)    (5,327)      (6,489)
Activities
                                                                     
Cash Flow from Financing                                             
Activities:
Borrowings on Line of Credit   750          --         2,250        --
Facility
Dividends Paid to
Non-Controlling Interest of    --           --         (1,131)      --
Subsidiary
Dividends Paid                 (352)        (335)      (688)        (670)
Repayment of Loan to Related   --           (450)      --           (850)
Parties
Exercise of Stock Options and  52           48         71           64
Employee Stock Purchases
                                                                     
Net Cash Provided by (Used in) 450          (737)      502          (1,456)
Financing Activities
                                                                     
Effect of Foreign Currency     18           (109)      (69)         248
Fluctuations on Cash
                                                                     
Net Increase (Decrease) in     2,295        1,575      1,082        (2,487)
Cash & Cash Equivalents
                                                                     
Cash and Cash Equivalents:                                           
Beginning of Period            16,274       13,188     17,487       17,250
End of Period                  $18,569      $14,763    $18,569      $14,763

CONTACT: Pat Hansen
         Senior Vice President and
         Chief Financial Officer
         414-247-3435
         www.strattec.com

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