STRATTEC SECURITY CORPORATION Reports Potential Loss On Trade Receivable With Chrysler LLC and Fiscal Third Quarter Results
Based on information currently available, the Company believes the increase in its reserve is adequate to cover the potential loss exposure on this account as of the fiscal third quarter that ended on
OPERATING RESULTS
FOR THE FISCAL THIRD QUARTER ENDED
Net sales for the Company's third quarter ended
For the nine months ended
Sales to STRATTEC's largest customers overall were significantly lower in the current quarter compared to the prior year quarter. Sales to
Gross profit margins were 7.0% in the current quarter compared to 16.3% in the prior year quarter. The year-over-year decrease in gross profit margins was primarily attributed to reduced customer production volumes offset by lower purchased material costs for zinc and brass along with a favorable Mexico Peso to U.S. dollar exchange rate affecting the Company's operations in
Operating expenses were
RECENT DEVELOPMENTS
On
As a result of these announced reductions in production by
STRATTEC designs, develops, manufactures and markets automotive Security Products including mechanical locks and keys, electronically enhanced locks and keys, steering column and instrument panel ignition lock housings; and Access Control Products including latches, power sliding side door systems, power lift gate systems, power deck lid systems and related products. These products are provided to customers in
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. 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
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Results of Operations
(In Thousands except per share amounts)
Third Quarter Ended Nine Months Ended
March 29, March 30, March 29, March 30,
2009 2008 2009 2008
-------- -------- -------- --------
(Unaudited) (Unaudited)
Net Sales $ 29,348 $ 38,428 $ 97,878 $121,075
Cost of Goods Sold 27,295 32,161 87,503 99,508
-------- -------- -------- --------
Gross Profit 2,053 6,267 10,375 21,567
Engineering, Selling &
Administrative Expenses 7,175 6,109 19,796 17,740
Provision for Doubtful
Accounts 500 -- 500 --
-------- -------- -------- --------
(Loss) Income from Operations ( 5,622) 158 (9,921) 3,827
Interest Income 91 617 693 2,344
Other Income (Expense), Net 104 (58) 884 408
Minority Interest 503 (48) 614 70
-------- -------- -------- --------
(4,924) 669 (7,730) 6,649
Provision (Benefit)
for Income Taxes (2,092) 223 (3,703) 2,461
-------- -------- -------- --------
Net (Loss) Income $ (2,832) $ 446 $ (4,027) $ 4,188
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Earnings (Loss) Per Share:
Basic $ (0.87) $ 0.13 $ (1.22) $ 1.20
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Diluted $ (0.87) $ 0.13 $ (1.22) $ 1.19
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Average Basic
Shares Outstanding 3,261 3,476 3,285 3,500
Average Diluted
Shares Outstanding 3,262 3,482 3,290 3,506
Other
Capital Expenditures $ 2,418 $ 4,013 $ 10,929 $ 8,487
Depreciation & Amortization $ 1,649 $ 1,665 $ 4,495 $ 5,161
STRATTEC SECURITY CORPORATION
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Condensed Balance Sheet Data
(In Thousands)
March 29, June 29,
2009 2008
-------- --------
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 22,598 $ 51,501
Receivables, net 21,174 23,518
Inventories 11,513 10,269
Other current assets 18,870 17,978
-------- --------
Total Current Assets 74,155 103,266
Deferred Income Taxes 4,044 3,684
Investment in Joint Ventures 4,264 3,642
Prepaid Pension Cost 3,407 758
Other Long Term Assets 889 27
Property, Plant and Equipment, Net 36,535 30,336
-------- --------
$123,294 $141,713
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $ 10,694 $ 15,974
Other 17,717 16,965
-------- --------
Total Current Liabilities 28,411 32,939
Borrowings Under Line of Credit Facility -- --
Accrued Pension and Postretirement Obligations 12,317 12,389
Minority Interest 1,316 953
Shareholders' Equity 238,143 242,843
Accumulated Other Comprehensive Loss (20,790) (17,495)
Less: Treasury Stock (136,103) (129,916)
-------- --------
Total Shareholders' Equity 81,250 95,432
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$123,294 $141,713
STRATTEC SECURITY CORPORATION
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Condensed Cash Flow Statement Data
(In Thousands)
Third Quarter Ended Nine Months Ended
March 29, March 30, March 29, March 30,
2009 2008 2009 2008
-------- -------- -------- --------
(Unaudited) (Unaudited)
Cash Flows from Operating
Activities:
Net Income (Loss) $ (2,832) $ 446 $ (4,027) $ 4,188
Adjustment to Reconcile Net
Income to Cash Used in
Operating Activities:
Minority Interest (499) 37 (600) (111)
Depreciation and Amortization 1,649 1,665 4,495 5,161
Intangible Amortization 24 -- 33 --
Stock Based Compensation
Expense 92 124 309 616
Provision for Doubtful
Accounts 500 -- 500 --
Change in Operating
Assets/Liabilities (5,258) 1,802 (8,196) (1,598)
Other, net (160) (19) (1,430) (341)
-------- -------- -------- --------
Net Cash Provided (Used) by
Operating Activities (6,484) 4,055 (8,916) 7,915
Cash Flows from Investing
Activities:
Investment in Joint Ventures -- -- (388) --
Purchase of Delphi
Power Products (1,118) -- (4,931) --
Additions to Property,
Plant and Equipment (2,418) (4,013) (10,929) (8,487)
-------- -------- -------- --------
Net Cash Used in Investing
Activities (3,536) (4,013) (16,248) (8,487)
Cash Flow from Financing
Activities:
Purchase of Common Stock -- (1,188) (6,214) (2,334)
Dividends Paid (488) (528) (1,511) (4,609)
Contribution from
Minority Interest 224 -- 986 349
Loan from Minority Interest 1,000 550 2,175 800
Exercise of Stock Options and
Employee Stock Purchases 10 8 30 21
-------- -------- -------- --------
Net Cash Provided (Used)
by Financing Activities 746 (1,158) (4,534) (5,773)
Effect of Foreign Currency
Fluctuations on Cash (6) 4 795 (16)
-------- -------- -------- --------
Net Decrease in Cash
& Cash Equivalents (9,280) (1,112) (28,903) (6,361)
Cash and Cash Equivalents:
Beginning of Period 31,878 60,242 51,501 65,491
-------- -------- -------- --------
End of Period $ 22,598 $ 59,130 $ 22,598 $ 59,130
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CONTACT:
Chief Financial Officer
414-247-3435
www.strattec.com