STRATTEC SECURITY CORPORATION
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(Exact name of registrant as specified in charter)
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Wisconsin
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(State or other jurisdiction of incorporation)
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0-25150
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39-1804239
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(Commission File Number)
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(I.R.S. Employer I.D. Number)
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3333 West Good Hope Road
Milwaukee, WI
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53209
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(Address of Principal Executive Offices)
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(Zip Code)
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(414) 247-3333
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(Registrant's telephone number; including area code)
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Title of each class
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Trading symbol(s)
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Name of exchange on which registered
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Common stock, $.01 par value
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STRT
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The Nasdaq Global Stock Market
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☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 2.02. |
Results of Operations and Financial Condition.
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Item 9.01. |
Financial Statements and Exhibits.
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(d)
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Exhibits
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‑‑ Press Release of STRATTEC SECURITY CORPORATION, issued April 23, 2020.
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STRATTEC SECURITY CORPORATION
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|||
Date: April 23, 2020
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|||
By:
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/s/ Patrick J. Hansen
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||
Patrick J. Hansen, Senior Vice President and
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|||
Chief Financial Officer
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Three Months Ended
|
||||||||
March 29, 2020
|
March 31, 2019
|
|||||||
Fiat Chrysler Automobiles
|
$
|
26,050
|
$
|
29,917
|
||||
General Motors Company
|
31,656
|
30,969
|
||||||
Ford Motor Company
|
15,462
|
15,942
|
||||||
Tier 1 Customers
|
17,495
|
20,078
|
||||||
Commercial and Other OEM Customers
|
20,184
|
22,794
|
||||||
Hyundai / Kia
|
6,091
|
8,530
|
||||||
TOTAL
|
$
|
116,938
|
$
|
128,230
|
March 29, 2020
|
March 31, 2019
|
|||||||
(Loss) Equity Earnings of VAST LLC Joint Venture
|
$
|
(947
|
)
|
$
|
25
|
|||
Net Foreign Currency Realized and Unrealized Transaction Gain (Loss)
|
1,467
|
(47
|
)
|
|||||
Other
|
(392
|
)
|
297
|
|||||
$
|
128
|
$
|
275
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
March 29, 2020
|
March 31, 2019
|
March 29, 2020
|
March 31, 2019
|
|||||||||||||
Gross profit (GAAP measure)
|
$
|
17,010
|
$
|
15,682
|
$
|
43,229
|
$
|
43,601
|
||||||||
Compensation charge, pre-tax
|
-
|
-
|
2,742
|
-
|
||||||||||||
Adjusted gross profit (Non-GAAP measure)
|
$
|
17,010
|
$
|
15,682
|
$
|
45,971
|
$
|
43,601
|
||||||||
Engineering, selling & administrative expenses (GAAP measure)
|
$
|
10,727
|
$
|
11,721
|
$
|
35,775
|
$
|
33,222
|
||||||||
Compensation charge, pre-tax
|
-
|
-
|
1,731
|
-
|
||||||||||||
Adjusted engineering, selling & administrative expenses (Non-GAAP measure)
|
$
|
10,727
|
$
|
11,721
|
$
|
34,044
|
$
|
33,222
|
||||||||
Operating income (GAAP measure)
|
$
|
6,283
|
$
|
3,961
|
$
|
7,454
|
$
|
10,379
|
||||||||
Compensation charge, pre-tax
|
-
|
-
|
4,473
|
-
|
||||||||||||
Adjusted operating income (Non-GAAP measure)
|
$
|
6,283
|
$
|
3,961
|
$
|
11,927
|
$
|
10,379
|
||||||||
Net income (loss) (GAAP measure)
|
$
|
2,994
|
$
|
1,730
|
$
|
2,897
|
$
|
(16,967
|
)
|
|||||||
Compensation charge, net of tax
|
-
|
-
|
3,422
|
-
|
||||||||||||
Pension settlement charge, net of tax
|
-
|
-
|
-
|
24,812
|
||||||||||||
Favorable tax adjustment related to “Tax Reform 2017”
|
-
|
-
|
-
|
(372
|
)
|
|||||||||||
Adjusted net income (Non-GAAP measure)
|
$
|
2,994
|
$
|
1,730
|
$
|
6,319
|
$
|
7,473
|
||||||||
Diluted loss per share (GAAP measure)
|
$
|
0.79
|
$
|
0.46
|
$
|
0.77
|
$
|
(4.62
|
)
|
|||||||
Compensation charge, net of tax
|
-
|
-
|
0.91
|
-
|
||||||||||||
Pension settlement charge, net of tax
|
-
|
-
|
-
|
6.73
|
||||||||||||
Favorable tax adjustment related to “Tax Reform 2017”
|
-
|
-
|
-
|
(0.10
|
)
|
|||||||||||
Adjusted diluted earnings per share (Non-GAAP measure)
|
$
|
0.79
|
$
|
0.46
|
$
|
1.68
|
$
|
2.01
|
Third Quarter Ended
|
Nine Months Ended
|
|||||||||||||||
March 29, 2020
|
March 31, 2019
|
March 29, 2020
|
March 31, 2019
|
|||||||||||||
Net Sales
|
$
|
116,938
|
$
|
128,230
|
$
|
343,183
|
$
|
358,302
|
||||||||
Cost of Goods Sold
|
99,928
|
112,548
|
299,954
|
314,701
|
||||||||||||
Gross Profit
|
17,010
|
15,682
|
43,229
|
43,601
|
||||||||||||
Engineering, Selling & Administrative Expenses
|
10,727
|
11,721
|
35,775
|
33,222
|
||||||||||||
Income from Operations
|
6,283
|
3,961
|
7,454
|
10,379
|
||||||||||||
Interest Expense
|
(204
|
)
|
(413
|
)
|
(792
|
)
|
(1,224
|
)
|
||||||||
Pension Termination Settlement Charge
|
-
|
-
|
-
|
(32,434
|
)
|
|||||||||||
Other Income, Net
|
128
|
275
|
1,030
|
2,153
|
||||||||||||
Income (Loss) before Provision (Benefit) for Income Taxes and Non-Controlling Interest
|
6,207
|
3,823
|
7,692
|
(21,126
|
)
|
|||||||||||
Provision (Benefit) for Income Taxes
|
1,294
|
786
|
1,194
|
(6,994
|
)
|
|||||||||||
Net Income (Loss)
|
4,913
|
3,037
|
6,498
|
(14,132
|
)
|
|||||||||||
Net Income Attributable to Non-Controlling Interest
|
(1,919
|
)
|
(1,307
|
)
|
(3,601
|
)
|
(2,835
|
)
|
||||||||
Net Income (Loss) Attributable to STRATTEC SECURITY CORPORATION
|
$
|
2,994
|
$
|
1,730
|
$
|
2,897
|
$
|
(16,967
|
)
|
|||||||
Earnings (Loss) Per Share:
|
||||||||||||||||
Basic
|
$
|
0.80
|
$
|
0.47
|
$
|
0.78
|
$
|
(4.62
|
)
|
|||||||
Diluted
|
$
|
0.79
|
$
|
0.46
|
$
|
0.77
|
$
|
(4.62
|
)
|
|||||||
Average Basic Shares Outstanding
|
3,748
|
3,684
|
3,733
|
3,670
|
||||||||||||
Average Diluted Shares Outstanding
|
3,768
|
3,728
|
3,752
|
3,670
|
||||||||||||
Other
|
||||||||||||||||
Capital Expenditures
|
$
|
2,923
|
$
|
4,148
|
$
|
10,307
|
$
|
13,550
|
||||||||
Depreciation
|
$
|
4,769
|
$
|
4,420
|
$
|
14,349
|
$
|
12,543
|
March 29, 2020
|
June 30, 2019
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$
|
10,173
|
$
|
7,809
|
||||
Receivables, net
|
72,805
|
84,230
|
||||||
Inventories, net
|
58,348
|
47,262
|
||||||
Other current assets
|
15,216
|
17,331
|
||||||
Total Current Assets
|
156,542
|
156,632
|
||||||
Investment in Joint Ventures
|
23,190
|
23,528
|
||||||
Other Long Term Assets
|
10,363
|
14,456
|
||||||
Property, Plant and Equipment, Net
|
107,416
|
118,120
|
||||||
$
|
297,511
|
$
|
312,736
|
|||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Current Liabilities:
|
||||||||
Accounts Payable
|
$
|
43,104
|
$
|
41,889
|
||||
Other
|
32,968
|
37,374
|
||||||
Total Current Liabilities
|
76,072
|
79,263
|
||||||
Accrued Pension and Post Retirement Obligations
|
2,403
|
2,425
|
||||||
Borrowings Under Credit Facility
|
27,000
|
42,000
|
||||||
Other Long-term Liabilities
|
4,781
|
1,232
|
||||||
Shareholders’ Equity
|
320,289
|
317,681
|
||||||
Accumulated Other Comprehensive Loss
|
(22,270
|
)
|
(18,568
|
)
|
||||
Less: Treasury Stock
|
(135,676
|
)
|
(135,725
|
)
|
||||
Total STRATTEC SECURITY CORPORATION Shareholders’ Equity
|
162,343
|
163,388
|
||||||
Non-Controlling Interest
|
24,912
|
24,428
|
||||||
Total Shareholders’ Equity
|
187,255
|
187,816
|
||||||
$
|
297,511
|
$
|
312,736
|
Third Quarter Ended
|
Nine Months Ended
|
|||||||||||||||
March 29, 2020
|
March 31, 2019
|
March 29, 2020
|
March 31, 2019
|
|||||||||||||
Cash Flows from Operating Activities:
|
||||||||||||||||
Net Income (Loss)
|
$
|
4,913
|
$
|
3,037
|
$
|
6,498
|
$
|
(14,132
|
)
|
|||||||
Adjustment to Reconcile Net Income (Loss) to Cash Provided by Operating Activities:
|
||||||||||||||||
Equity Loss (Earnings) in Joint Ventures
|
921
|
(66
|
)
|
(55
|
)
|
(2,451
|
)
|
|||||||||
Depreciation
|
4,769
|
4,420
|
14,349
|
12,543
|
||||||||||||
Foreign Currency Transaction (Gain) Loss
|
(2,515
|
)
|
192
|
(2,067
|
)
|
261
|
||||||||||
Unrealized Loss (Gain) on Peso Forward Contracts
|
1,048
|
(23
|
)
|
1,048
|
(116
|
)
|
||||||||||
Stock Based Compensation Expense
|
165
|
241
|
789
|
867
|
||||||||||||
Non-Cash Compensation Expense
|
-
|
-
|
4,473
|
-
|
||||||||||||
Pension Settlement Charge
|
-
|
-
|
-
|
32,434
|
||||||||||||
Deferred Income taxes
|
-
|
-
|
(1,032
|
)
|
(8,131
|
)
|
||||||||||
Change in Operating Assets/Liabilities
|
(1,266
|
)
|
(2,805
|
)
|
4,212
|
3,727
|
||||||||||
Other, net
|
94
|
3
|
522
|
(281
|
)
|
|||||||||||
Net Cash Provided by Operating Activities
|
8,129
|
4,999
|
28,737
|
24,721
|
||||||||||||
Cash Flows from Investing Activities: | ||||||||||||||||
Investment in Joint Ventures
|
-
|
(200
|
)
|
-
|
(200
|
)
|
||||||||||
Additions to Property, Plant and Equipment
|
(2,923
|
)
|
(4,148
|
)
|
(10,307
|
)
|
(13,550
|
)
|
||||||||
Proceeds from Sale of Property, Plant and Equipment
|
14
|
-
|
29
|
12
|
||||||||||||
Net Cash Used in Investing Activities
|
(2,909
|
)
|
(4,348
|
)
|
(10,278
|
)
|
(13,738
|
)
|
||||||||
Cash Flows from Financing Activities:
|
||||||||||||||||
Borrowings Under Credit Facility
|
-
|
-
|
-
|
2,000
|
||||||||||||
Repayment of Borrowings Under Credit Facility
|
(5,000
|
)
|
(2,000
|
)
|
(15,000
|
)
|
(9,000
|
)
|
||||||||
Dividends Paid to Non-Controlling Interests of Subsidiaries
|
-
|
(400
|
)
|
(980
|
)
|
(1,384
|
)
|
|||||||||
Dividends Paid
|
(525
|
)
|
(517
|
)
|
(1,572
|
)
|
(1,546
|
)
|
||||||||
Exercise of Stock Options and Employee Stock Purchases
|
24
|
172
|
543
|
244
|
||||||||||||
Net Cash Used In Financing Activities
|
(5,501
|
)
|
(2,745
|
)
|
(17,009
|
)
|
(9,686
|
)
|
||||||||
Effect of Foreign Currency Fluctuations on Cash
|
1,169
|
(77
|
)
|
914
|
(185
|
)
|
||||||||||
Net Increase (Decrease) in Cash & Cash Equivalents
|
888
|
(2,171
|
)
|
2,364
|
1,112
|
|||||||||||
Cash and Cash Equivalents:
|
||||||||||||||||
Beginning of Period
|
9,285
|
11,373
|
7,809
|
8,090
|
||||||||||||
End of Period
|
$
|
10,173
|
$
|
9,202
|
$
|
10,173
|
$
|
9,202
|