STRATTEC SECURITY CORPORATION Reports Fiscal 2012 Second Quarter Results
MILWAUKEE, Jan 26, 2012 (GlobeNewswire via COMTEX) --STRATTEC SECURITY CORPORATION (Nasdaq:STRT) today reported operating results for the fiscal second quarter ended January 1, 2012.
Net sales for the Company's second quarter ended January 1, 2012 were $65.9 million, compared to net sales of $61.2 million for the second quarter ended December 26, 2010. Net income for the period was $1.5 million, compared to net income of $1.2 million in the prior year quarter. Diluted earnings per share for the period were $.47 compared to diluted earnings per share of $.37 during the prior year quarter.
For the six months ended January 1, 2012, net sales were $132.2 million compared to net sales of $121.1 million during the prior year six month period. Net income during the current year-to-date period was $2.8 million compared to net income of $2.7 million during the prior year six month period and diluted earnings per share were $.85 for the six month period ended January 1, 2012 compared to diluted earnings per share of $.80 for the six month period ended December 26, 2010.
Sales to STRATTEC's largest customers overall increased in the current quarter compared to the prior year quarter levels. Sales to Chrysler Group LLC were $22.4 million in the current quarter compared to $17.6 million in the prior year quarter. Sales to General Motors Company were $14.4 million in the current quarter compared to $16.3 million in the prior year quarter. Included in the prior year sales to General Motors were $1.3 million of sales to Nexteer Automotive, formerly a unit of General Motors. Sales to Ford Motor Company were $8.1 million in the current quarter compared to $6.1 million in the prior year quarter. Sales to Hyundai/Kia were $3.7 million in the current quarter compared to $3.4 million in the prior year quarter.
Gross profit margins were 17.1 percent in the current quarter compared to 16.3 percent in the prior year quarter. The higher gross profit margin in the current year quarter was primarily the result of favorable customer vehicle production volumes, which increased overhead absorption of STRATTEC's manufacturing costs and a favorable Mexico Peso to U.S. Dollar exchange rate affecting the Company's operations in Mexico. Items negatively impacting the year-over-year comparison of the current quarter gross margin were a less favorable product content sales mix and higher purchased raw material costs for zinc.
Operating expenses were $8.0 million in the current quarter, compared to $8.3 million in the prior year quarter.
Included in Other (Expense) Income in the current quarter compared to the prior year quarter were the following items (in thousands of dollars):
January December
1, 26,
2012 2010
------- --------
Foreign Currency Transaction Gain (Loss) $ (95) $ (160)
Impact of Mexican Peso Option Contracts, Net Gain 397 --
Rabbi Trust (Loss) Gain 144 134
Equity (Loss) Earnings of VAST LLC Joint Venture (192) 381
Other 57 83
------- --------
$ 311 $ 438
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As reported in our first quarter operating results, the VAST LLC operations in China and Brazil both incurred relocation costs associated with moves to new facilities and start-up costs associated with a new product line. Both of these items resulted in STRATTEC incurring an equity loss from this joint venture in the first and second quarters of fiscal year 2012 compared to the same quarters in the prior year in which STRATTEC had equity earnings from the joint venture. We anticipate these transition costs and losses to continue over the remaining current fiscal year.
During the current quarter, the Company contributed $1.0 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 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
January December January December
1, 2012 26, 2010 1, 2012 26, 2010
------- -------- -------- --------
Net Sales $65,886 $61,212 $132,263 $121,061
Cost of Goods Sold 54,646 51,239 109,519 100,935
------- -------- -------- --------
Gross Profit 11,240 9,973 22,744 20,126
Engineering, Selling &
Administrative Expenses 7,979 8,318 16,187 16,483
------- -------- -------- --------
Income from Operations 3,261 1,655 6,557 3,643
Interest Income 15 25 32 48
Interest Expense-Related
Parties (23) (45) (54) (96)
Other (Expense) Income, Net 311 438 (677) 1,059
------- -------- -------- --------
3,564 2,073 5,858 4,654
Provision for Income Taxes 1,260 331 1,581 1,132
------- -------- -------- --------
Net Income 2,304 1,742 4,277 3,522
Net Income Attributable
to Non-Controlling
Interest (756) (495) (1,447) (857)
------- -------- -------- --------
Net Income Attributable
to STRATTEC SECURITY
CORPORATION $1,548 $1,247 $2,830 $ 2,665
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Earnings Per Share:
Basic $0.47 $0.38 $0.86 $0.81
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Diluted $0.47 $0.37 $0.85 $0.80
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Average Basic Shares
Outstanding 3,301 3,286 3,298 3,283
Average Diluted Shares
Outstanding 3,329 3,329 3,328 3,314
Other
----------------------------
Capital Expenditures $2,797 $1,706 $6,289 $3,482
Depreciation & Amortization $1,679 $1,589 $3,331 $3,227
STRATTEC SECURITY CORPORATION
Condensed Balance Sheet Data
(In Thousands)
January 1, July 3,
2012 2011
----------- ----------
(Unaudited)
ASSETS
Current Assets:
Cash and Cash Equivalents $14,763 $17,250
Receivables, Net 34,907 39,649
Inventories 23,305 22,135
Other Current Assets 16,516 15,368
----------- ----------
Total Current Assets 89,491 94,402
Deferred Income Taxes 3,820 3,639
Loan to Joint Venture 1,500 1,500
Investment in Joint Venture 7,299 7,276
Other Long Term Assets 585 635
Property, Plant and
Equipment, Net 42,265 40,636
----------- ----------
$144,960 $148,088
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LIABILITIES AND SHAREHOLDERS'
EQUITY
Current Liabilities:
Accounts Payable $21,139 $22,851
Other 25,936 28,137
----------- ----------
Total Current Liabilities 47,075 50,988
Borrowings Under Line of
Credit Facility -- --
Accrued Pension and Post
Retirement Obligations 5,934 7,036
Other Long Term Liabilities 489 --
Shareholders' Equity 246,550 243,974
Accumulated Other
Comprehensive Loss (24,314) (21,750)
Less: Treasury Stock (135,989) (136,009)
----------- ----------
Total STRATTEC SECURITY
CORPORATION
Shareholders' Equity 86,247 86,215
Non-Controlling Interest 5,215 3,849
----------- ----------
Total Shareholders' Equity 91,462 90,064
----------- ----------
$ 144,960 $ 148,088
=========== ==========
STRATTEC SECURITY CORPORATION
Condensed Cash Flow Statement Data
(In Thousands)
(Unaudited)
Second Quarter
Ended Six Months Ended
January December January December
1, 2012 26, 2010 1, 2012 26, 2010
-------- -------- --------- --------
Cash Flows from Operating Activities:
Net Income $2,304 $1,742 $4,277 $3,522
Adjustment to Reconcile Net Income to Cash
Provided by Operating Activities:
Equity Loss (Earnings) in VAST LLC Joint
Venture 192 (381) 312 (803)
Depreciation and Amortization 1,679 1,589 3,331 3,227
Foreign Currency Transaction Loss (Gain) 94 160 (1,605) 190
Unrealized (Gain) Loss on Foreign
Currency Option Contracts (589) -- 1,716 --
Stock Based Compensation Expense 197 156 371 298
Change in Operating Assets/Liabilities 1,541 1,256 (3,208) (4,197)
Other, net -- 11 16 17
-------- -------- --------- --------
Net Cash Provided by Operating Activities 5,418 4,533 5,210 2,254
Cash Flows from Investing Activities:
Investment in Joint Ventures (200) (150) (200) (150)
Restricted Cash -- 2,100 -- 2,100
Purchase of Additional Interest in
ADAC-STRATTEC LLC -- -- -- (22)
Additions to Property, Plant and
Equipment (2,797) (1,706) (6,289) (3,482)
-------- -------- --------- --------
Net Cash (Used in) Provided by Investing
Activities (2,997) 244 (6,489) (1,554)
Cash Flow from Financing Activities:
Dividends Paid (335) (3,989) (670) (3,989)
Repayment of Loan to Related Parties (450) (250) (850) (750)
Exercise of Stock Options and Employee
Stock Purchases 48 15 64 28
-------- -------- --------- --------
Net Cash Used in Financing Activities (737) (4,224) (1,456) (4,711)
Effect of Foreign Currency Fluctuations on
Cash (109) (64) 248 (45)
-------- -------- --------- --------
Net Increase (Decrease) in Cash & Cash
Equivalents 1,575 489 (2,487) (4,056)
Cash and Cash Equivalents:
Beginning of Period 13,188 17,322 17,250 21,867
-------- -------- --------- --------
End of Period $14,763 $17,811 $ 14,763 $17,811
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This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: STRATTEC SECURITY CORPORATION
CONTACT: Pat Hansen
Senior Vice President and
Chief Financial Officer
414-247-3435
www.strattec.com