MILWAUKEE, Aug. 7, 2013 (GLOBE NEWSWIRE) -- STRATTEC SECURITY CORPORATION (Nasdaq:STRT) today reported operating results for the fiscal fourth quarter and year ended June 30, 2013.

Fourth Quarter

Net sales for the fourth quarter ended June 30, 2013 were $80.5 million, compared to net sales of $76.4 million for the fourth quarter ended July 1, 2012. Net income was $3.2 million both in the current and prior year quarters. Diluted earnings per share for the fourth quarter were $.92 compared to $.97 in the prior year quarter.

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

Increased sales to Chrysler Group LLC in the current quarter was primarily due to higher customer vehicle production volumes and increased content on models for which we supply components. 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. Increased sales to Ford Motor Company in the current quarter was largely attributed to a combination of business won with new products and higher vehicle production volumes. Increased sales to Tier 1 customers during the current year quarter related primarily to market growth and the increasing impact 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 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 18.2 percent in the current year quarter compared to 18.9 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, an unfavorable Mexico Peso to U.S. Dollar exchange rate affecting our operations in Mexico, and a higher expense provision for our frozen defined benefit pension plan. These negative items were partially offset by the benefits of higher overhead absorption from increased production volumes.  

Operating expenses were $9.3 million in the current year quarter and $9.0 million in the prior year quarter. The major contributor to the increase was a higher expense provision for our frozen defined benefit pension plan.

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

STRATTEC is a partner in VAST LLC, a global alliance of companies involved in the design and manufacture of automotive access products. VAST provides global growth opportunities while complementing our North American business. During the current quarter, the VAST LLC operations both in China and Brazil reported positive operating results for the first time in two years. In the prior year quarter operating results, the VAST LLC operations primarily in China incurred relocation costs associated with moves to a new facility and start-up costs associated with a new product line. In addition, the prior year quarter equity loss also included STRATTEC's portion of a goodwill impairment charge of $284,000 relating to VAST China.

During the current year quarter STRATTEC contributed $625,000 to its Defined Benefit Pension Trust to improve the overall funded status of the Plan.

Frank Krejci, President and CEO commented:

"My thanks go to both the STRATTEC team and our VAST partners for making significant progress this year. With a solid automotive market, STRATTEC achieved record sales of nearly $300 million along with growth in economic value added. Along with our VAST partners and joint ventures, the VAST Group supplies over $1.1 billion globally in automotive products.

Highlights in growth, performance and financial strength deserve special attention. After challenging years of new product introduction, our joint venture in China is once again profitable and growing. STRATTEC was honored as a Supplier of the Year by Chrysler for Electrical Products, one of their few product categories which accounts for most of our Chrysler business. Lastly, our frozen defined benefit pension plan funded status improved by over $18 million during the fiscal year as a result of contributions and investment earnings, and keeping our assumptions regarding the funded status of the plan consistent between fiscal years.

Looking to next year, we are optimistic about the projected continued growth of the automotive industry, with the average age of vehicles on the road at an all-time high."

Full Year

STRATTEC's fiscal 2013 net sales reached a record high, exceeding the prior year record by approximately 7% and adjusted diluted earnings per share increased approximately 18% in comparison to the prior year. (See Non-GAAP Financial Measure below).

For the fiscal year ended June 30, 2013, net sales were $298.2 million compared to net sales of $279.2 million in the prior year period. Net income was $9.4 million compared to net income of $8.8 million in the prior year period. Diluted earnings per share for the current year were $2.72 (or $3.11 without the third quarter $2.1 million pension settlement charge as shown in the table below) compared to diluted earnings per share of $2.64 in the prior year.

In addition to the results reported in accordance with U.S. generally accepted accounting principles ("GAAP") included in this release, the table above (as well as the information provided in this release) provides certain non-GAAP financial information, related to diluted earnings per share excluding the impact of a pension settlement charge (as described above). Management believes that the presentation of this non-GAAP financial measure provides useful information to investors because this information may allow investors to better evaluate ongoing business performance and certain components of STRATTEC's results. In addition, we believe the presentation of diluted earnings per share excluding the impact of the pension settlement charge enhances an investor's ability to make period-to-period comparisons of our operating results. This information should be considered in addition to the results presented in accordance with GAAP, and should not be considered a substitute for the GAAP results. We have reconciled the non-GAAP financial information included in this release to the nearest GAAP measure.

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.

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.

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