Strattec Security Corporation Reports Fiscal Fourth Quarter and Year End Results
Net sales for the three months ended June 27, 1999 were $56.5 million, an increase of 21 percent compared to net sales of $46.8 million for the three months ended June 28, 1998. Net income was $5.1 million, compared to $3.8 million in the prior year quarter. Diluted earnings per share for the three months ended June 27, 1999, were $.88 compared to $.65 in the prior year quarter, an increase of 35 percent.
For the year ended June 27, 1999, net sales were $202.6 million, an increase of 8 percent compared to net sales of $186.8 million in the prior year period. Net income was $17.0 million compared to $13.5 million and diluted earnings per share were $2.94 compared to $2.30, an increase of 28 percent.
Sales to all three of STRATTEC's largest customers increased in the current quarter compared to the prior year levels, with General Motors Corporation increasing 19 percent, DaimlerChrysler Corporation increasing 20 percent and Ford Motor Company increasing 18 percent. This sales growth was primarily due to a combination of higher value mechanical and electro-mechanical content, and increased production volumes. In addition, labor disruptions at General Motors Corporation during June, 1998 reduced sales to this customer by an estimated $3 million during the prior year quarter.
Gross profit margins were 23.9 percent in the current quarter compared to 22.8 percent in the prior year quarter. Operating expenses were $5.4 million in the current quarter, compared to $4.9 million in the prior year quarter.
During the June 1999 quarter 105,000 shares were repurchased under the Company's stock repurchase program at a cost of approximately $3.0 million.
Harold M. Stratton II, Chairman of the Board and Chief Executive Officer, commented: "Fiscal 1999 represents our sixth consecutive year of growth in sales and profitability. With the robust activity in the automotive sector, we set a number of records during the year, including new daily, weekly and monthly highs for both unit shipping and sales volume."
Stratton continued, "Our positive results in fiscal year 1999 are expected to continue into fiscal year 2000, unless the current strong demand for vehicles slows down significantly, or vehicle production is curtailed due to labor disruptions associated with the national labor contracts coming up for negotiation between our customers and the UAW."
STRATTEC SECURITY CORPORATION designs, develops, manufactures and markets mechanical locks, electro-mechanical locks and related security products for North American and select European automotive manufacturers.
Forward looking statements in this release are 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 products and costs of operations. 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. 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)
Three Months Ended Years Ended
June 27, 1999 June 28, 1998 June 27, 1999 June 28, 1998
(Unaudited)
Net Sales $ 56,514 $ 46,795 $ 202,625 $ 186,805
Cost of Goods
Sold 42,989 36,108 155,821 146,865
Gross Profit 13,525 10,687 46,804 39,940
Engineering,
Selling &
Administrative
Expenses 5,397 4,865 20,191 18,925
Income from
Operations 8,128 5,822 26,613 21,015
Interest Income 347 198 1,132 351
Interest Expense - - - (19)
Other Income
(Expense), Net (165) 47 (239) 73
8,310 6,067 27,506 21,420
Provision for
Income Taxes 3,241 2,244 10,491 7,931
Net Income $ 5,069 $ 3,823 $ 17,015 $ 13,489
Earnings
Per Share:
Basic $ .91 $ .67 $ 3.02 $ 2.36
Diluted $ .88 $ .65 $ 2.94 $ 2.30
Average Basic
Shares
utstanding 5,591 5,717 5,639 5,708
Average Diluted
Shares
Outstanding 5,737 5,891 5,791 5,863
Balance Sheet Data
(In Thousands)
June 27, 1999 June 28, 1998
Cash and Cash
Equivalents $ 28,600 $ 14,800
Accounts Receivable,
Net 36,100 25,300
Inventories 13,800 15,000
Debt - -
Shareholders' Equity 82,300 70,400
Contact: Pat Hansen
Vice President and
Chief Financial Officer
414-247-3435