Strattec Security Corporation Reports Fiscal Third Quarter Results
Net sales for the three months ended March 28, 1999 were $51.2 million, an increase of 8 percent compared to net sales of $47.4 million for the three months ended March 29, 1998. Net income was $4.5 million, compared to $3.8 million in the prior year quarter, an increase of over 18%. Diluted earnings per share for the three months ended March 28, 1999, were $.77 compared to $.65 in the prior year quarter.
For the nine months ended March 28, 1999, net sales were $146.1 million, an increase of 4 percent compared to net sales of $140.0 million in the prior year period. Net income was $11.9 million, an increase of 23 percent compared to $9.7 million, and diluted earnings per share were $2.06 compared to $1.65.
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 5 percent, DaimlerChrysler Corporation increasing 20 percent and Ford Motor Company increasing 19 percent. This sales growth was primarily due to a combination of higher value mechanical and electro-mechanical content, and increased production volumes.
Gross profit margins were 23.6 percent in the current quarter compared to 22.4 percent in the prior year quarter. Operating expenses were $5.1 million in the current quarter, compared to $4.7 million in the prior year quarter.
During the March 1999 quarter 6,500 shares were repurchased under the Company's stock repurchase program at a cost of approximately $198,000.
Harold M. Stratton II, Chairman and Chief Executive Officer, commented, "Our strong profitability in the March quarter reflects sales growth from content expansion and continued improvement in operating margins. With North American vehicle production continuing at surprisingly robust levels, we expect our strong sales activity to continue at the current level in the fourth quarter. Consequently, we are looking forward to a strong finish to our fiscal year in June."
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, demand for the Company's products and costs of operations. 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)(Unaudited)
Three Months Ended Nine Months Ended
March 28, 1999 March 29, 1998 March 28, 1999 March 29, 1998
Net Sales $ 51,220 $ 47,420 $146,111 $140,010
Cost of Goods
Sold 39,149 36,797 112,832 110,757
Gross Profit 12,071 10,623 33,279 29,253
Engineering,
Selling &
Administrative
Expenses 5,078 4,672 14,794 14,060
Income from
Operations 6,993 5,951 18,485 15,193
Interest Income 309 98 785 153
Interest Expense - - - (19)
Other Income
(Expense), Net (91) 41 (74) 26
7,211 6,090 19,196 15,353
Provision for
Income Taxes 2,740 2,255 7,250 5,687
Net Income $ 4,471 $ 3,835 $11,946 $ 9,666
Earnings Per Share:
Basic $ .79 $ .67 $ 2.11 $ 1.69
Diluted $ .77 $ .65 $ 2.06 $ 1.65
Average Basic
Shares Outstanding 5,649 5,725 5,654 5,706
Average Diluted
Shares Outstanding 5,807 5,880 5,809 5,854
Balance Sheet Data
(In Thousands)(Unaudited)
March 28, 1999 March 29, 1998
Cash and Cash
Equivalents $21,100 $4,500
Accounts
Receivable,Net 34,700 31,400
Inventories 16,100 14,200
Debt - -
Shareholders' Equity 79,800 66,200
Contact: Patrick Hansen
Vice President and
Chief Financial Officer
414-247-3435