☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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Item 2.02.

Results of Operations and Financial Condition.

Item 9.01.

Financial Statements and Exhibits.

(d)

Exhibits

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Net sales for the fiscal year 2020 second quarter were $106.3 million, representing a 5.8% decrease from net sales of $112.9 million in the prior year second quarter.  For the six months ended December 29, 2019, net sales were $226.2 million compared to net sales of $230.1 million during the prior year six month period.  As described above, the General Motors UAW strike adversely impacted our sales during both the three and six month periods ended December 29, 2019.

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GAAP net loss and diluted loss per share for the second quarter were $1,341,000 and $0.36 respectively, compared to GAAP net loss of $22.2 million and $5.96 loss per share in the comparable prior year period. Current year to date GAAP net loss and diluted loss per share were $97,000 and $0.03, respectively, compared to GAAP net loss of $18.7 million and $5.03 diluted loss per share in the comparable prior year to date period. The foregoing prior year second quarter results were adversely impacted by a one-time $32.4 million non-cash pre-tax pension settlement charge that reduced the prior year quarter diluted earnings per share by $6.67.

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For the fiscal year 2020 second quarter, we incurred non-cash compensation charges of $2.2 million related to the transfer of the excess assets remaining in the STRATTEC pension plan to the STRATTEC defined contribution plan.  Excluding the impact of these non-cash compensation expense charges for both years and the pension settlement charge during the prior year fiscal quarter, the current year adjusted second quarter net income was $376,000 and $0.10 adjusted diluted earnings per share compared to adjusted net income of $2.6 million and $0.71 adjusted diluted earnings per share in the prior year second quarter

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For the current and prior year six month periods, excluding the impact of the non-cash compensation expense charges for both years and the pension settlement charge during the prior year fiscal quarter, we had adjusted net income of $3.3 million and $0.89 adjusted diluted earnings per share in the current year to date period compared to adjusted net income of $5.7 million and adjusted diluted earnings per share of $1.55 in the prior year to date period.

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Borrowings on our credit facilities were reduced by $4 million during our fiscal year 2020 second quarter, $10 million during the current year to date six month period and $19 million over the last 18 month period.  As of December 29, 2019 the balance on our credit facilities totaled $32 million.

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RECONCILIATION OF NON-GAAP PERFORMANCE MEASURES TO GAAP PERFORMANCE MEASURES

(in thousands, except earnings per share data)

Non-GAAP Financial Measures

This press release contains financial measures not prepared in accordance with generally accepted accounting principles (referred to as Non-GAAP), specifically “adjusted net income,” “adjusted gross profit,” “adjusted engineering, selling & administrative expenses,” “adjusted operating income” and “adjusted diluted earnings per share.”  “Adjusted net income” is defined as net (loss) income attributable to STRATTEC SECURITY CORPORATION shareholders excluding both the pension settlement charges and the compensation expense charges, in each case net of tax (i.e., on an after tax basis), and excluding a favorable tax adjustment relating to “Tax Reform 2017”.  “Adjusted diluted earnings per share” is defined as “Adjusted net income” divided by average diluted shares of common stock outstanding during the applicable period.  “Adjusted gross profit” is defined as gross profit excluding the compensation expense charges, all on a pre-tax basis. “Adjusted engineering, selling & administrative expenses” is defined as engineering, selling & administrative expenses excluding the compensation expense charges, all on a pre-tax basis.  “Adjusted operating income” is defined as operating income excluding the compensation expense charges, all on a pre-tax basis. The Company believes that these Non-GAAP measures, when presented in conjunction with comparable GAAP measures, provide additional information for evaluating STRATTEC’s performance and are important measures by which STRATTEC’s management is able to assess the profitability and liquidity of STRATTEC’s business. These Non-GAAP measures should be considered in addition to, not as a substitute for or superior to, net income (loss) as a measure of operating performance. These Non-GAAP measures may be different than Non-GAAP financial measures used by other companies.

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 each company’s products to global customers under the “VAST Automotive Group” brand name.  STRATTEC’s history in the automotive business spans over 110 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, changes in warranty provisions and customers’ product recall policies, foreign currency fluctuations, uncertainties stemming from U.S. trade policies, tariffs and reaction to same from foreign countries 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.

Results of Operations

(In Thousands except per share amounts)

(Unaudited)

Condensed Balance Sheet Data

(In Thousands)

Condensed Cash Flow Statement Data

(In Thousands)

(Unaudited)