STRATTEC Security Corporation Reports Fiscal 2018 First Quarter Operating Results
Net sales for the Company’s fiscal 2018 first quarter ended
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 |
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October 1, 2017 | October 2, 2016 | |||
Fiat Chrysler Automobiles | $ 24,102 | $ 23,872 | ||
General Motors Company | 20,338 | 21,983 | ||
Ford Motor Company | 15,373 | 14,953 | ||
Tier 1 Customers | 15,743 | 17,838 | ||
Commercial and Other OEM Customers | 17,867 | 13,612 | ||
Hyundai / Kia | 9,037 | 7,986 | ||
TOTAL | $ 102,460 | $ 100,244 |
Sales to
The gross profit margins were 13.1 percent in the current year quarter compared to 14.8 percent in the prior year quarter. The decrease in gross profit margin in the current year quarter compared to the prior year quarter was attributed to higher than expected production and expediting costs with new product launches occurring during the 2018 fiscal first quarter, in particular in connection with the opening of our new paint facility in
Engineering, Selling and Administrative expenses as a percentage of net sales decreased to 9.8 percent in the current year quarter from 11.3 percent in the prior year quarter. Overall, operating expenses were lower in the current year quarter primarily due to utilizing fewer third party vendors for a portion of our new product development work as compared to the prior year quarter.
Included in “Other Income (Expense), Net” in the current year quarter compared to the prior year quarter were the following items (in thousands of dollars):
October 1, | October 2, | ||||||
2017 | 2016 | ||||||
Equity Earnings of VAST LLC Joint Venture | $ | 1,035 | $ | 390 | |||
Equity Loss of STRATTEC Advanced Logic LLC | (9) | (328 | ) | ||||
Net Foreign Currency Transaction Gain (Loss) | 63 | (440 | ) | ||||
Other | 24 | 198 | |||||
$ | 1,113 | ($180 | ) |
“We are going through a very busy and exciting time as we launch an unusually large amount of new business over the next year. At the same time, our new plant in
I am very proud of our
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
Certain statements contained in this release are “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, 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
STRATTEC SECURITY CORPORATION | ||||||
Results of Operations |
||||||
(In Thousands except per share amounts) | ||||||
(Unaudited) | ||||||
First Quarter Ended | ||||||
October 1, 2017 | October 2, 2016 | |||||
Net Sales | $ | 102,460 | $ | 100,244 | ||
Cost of Goods Sold | 88,997 | 85,441 | ||||
Gross Profit | 13,463 | 14,803 | ||||
Engineering, Selling & | ||||||
Administrative Expenses | 10,042 | 11,283 | ||||
Income from Operations | 3,421 | 3,520 | ||||
Interest Income | 4 | 41 | ||||
Interest Expense | (203) | (78) | ||||
Other Income (Expense), Net | 1,113 | (180) | ||||
Income before Provision for Income | ||||||
Taxes and Non-Controlling Interest | 4,335 | 3,303 | ||||
Provision for Income Taxes | 1,066 | 898 | ||||
Net Income | 3,269 | 2,405 | ||||
Net Income Attributable | ||||||
to Non-Controlling Interest | (813) | (863) | ||||
Net Income Attributable | ||||||
to STRATTEC SECURITY CORP. | $ 2,456 | $ 1,542 | ||||
Earnings Per Share: | ||||||
Basic | $ | 0.68 | $ | 0.43 | ||
Diluted | $ | 0.67 | $ | 0.42 | ||
Average Basic | ||||||
Shares Outstanding | 3,611 | 3,576 | ||||
Average Diluted | ||||||
Shares Outstanding | 3,681 | 3,661 | ||||
Other | ||||||
Capital Expenditures | $7,571 | $7,446 | ||||
Depreciation & Amortization | $3,095 | $2,760 |
STRATTEC SECURITY CORPORATION | |||||||
Condensed Balance Sheet Data | |||||||
(In Thousands) | |||||||
October 1, 2017 | July 2, 2017 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 8,498 | $ | 8,361 | |||
Receivables, net | 64,016 | 64,933 | |||||
Inventories, net | 39,395 | 35,476 | |||||
Other current assets | 21,959 | 20,235 | |||||
Total Current Assets | 133,868 | 129,005 | |||||
Investment in Joint Ventures | 18,416 | 16,840 | |||||
Other Long Term Assets | 16,906 | 16,278 | |||||
Property, Plant and Equipment, Net | 114,506 | 111,591 | |||||
$ | 283,696 | $ | 273,714 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current Liabilities: | |||||||
Accounts Payable | $ | 39,908 | $ | 39,679 | |||
Other | 26,286 | 28,216 | |||||
Total Current Liabilities | 66,194 | 67,895 | |||||
Accrued Pension and Post Retirement Obligations | 2,455 | 2,495 | |||||
Borrowings Under Credit Facility | 40,000 | 30,000 | |||||
Other Long-term Liabilities | 618 | 610 | |||||
Shareholders’ Equity | 322,131 | 319,798 | |||||
Accumulated Other Comprehensive Loss | (32,235 | ) | (32,888 | ) | |||
Less: Treasury Stock | (135,811 | ) | (135,822 | ) | |||
Total STRATTEC SECURITY CORPORATION Shareholders’ Equity | |||||||
154,085 | 151,008 | ||||||
Non-Controlling Interest | 20,344 | 21,626 | |||||
Total Shareholders’ Equity | 174,429 | 172,714 | |||||
$ | 283,696 | $ | 273,714 |
STRATTEC SECURITY CORPORATION | ||||||||
Condensed Cash Flow Statement Data | ||||||||
(In Thousands) | ||||||||
(Unaudited) | ||||||||
First Quarter Ended | ||||||||
October 1, 2017 | October 2, 2016 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net Income | $ 3,269 | $ | 2,405 | |||||
Adjustment to Reconcile Net Income to Net | ||||||||
Cash Provided by Operating Activities: | ||||||||
Depreciation and Amortization | 3,095 | 2,760 | ||||||
Equity Earnings in Joint Ventures | (1,026 | ) | (62 | ) | ||||
Foreign Currency Transaction Gain (Loss) | 137 | (689 | ) | |||||
Unrealized Loss Peso Forward Contracts | 258 | 899 | ||||||
Stock Based Compensation Expense | 371 | 428 | ||||||
Change in Operating Assets/Liabilities | (5,745 | ) | (540 | ) | ||||
Other, net | (5 | ) | (172 | ) | ||||
Net Cash Provided by Operating Activities | 354 | 5,029 | ||||||
Cash Flows from Investing Activities: | ||||||||
Loan to Joint Ventures | - | (850 | ) | |||||
Repayments from Loan to Joint Ventures | - | 75 | ||||||
Additions to Property, Plant and Equipment | (7,571 | ) | (7,446 | ) | ||||
Net Cash Used in Investing Activities | (7,571 | ) | (8,221 | ) | ||||
Cash Flow from Financing Activities: | ||||||||
Borrowings on Credit Facility | 12,000 | 8,000 | ||||||
Repayment of Borrowings under Credit Facility | (2,000 | ) | (4,000 | ) | ||||
Contribution from Non-controlling Interest | - | 2,940 | ||||||
Dividends Paid to Non-Controlling Interest of Subsidiaries | (2,017 | ) | (1,764 | ) | ||||
Dividends Paid | (508 | ) | (503 | ) | ||||
Exercise of Stock Options and Employee | ||||||||
Stock Purchases | 25 | 74 | ||||||
Net Cash Provided by Financing Activities | 7,500 | 4,747 | ||||||
Foreign Currency Impact on Cash | (146 | ) | 37 | |||||
Net Increase in Cash & Cash Equivalents | 137 | 1,592 | ||||||
Cash and Cash Equivalents: | ||||||||
Beginning of Period | 8,361 | 15,477 | ||||||
End of Period | $ | 8,498 | $ | 17,069 |
Contact:
Senior Vice President and
Chief Financial Officer
414-247-3435
www.strattec.com
Source: Strattec Security Corporation