0000950170-24-123365 | 10-Q | XBRL Viewer

Investment in Majority Owned Subsidiary

3 Months Ended

Sep. 29, 2024

Equity Method Investments and Joint Ventures [Abstract]

NOTE 8. INVESTMENT IN MAJORITY OWNED SUBSIDIARY

ADAC-STRATTEC LLC, a Delaware limited liability company, was formed in fiscal year 2007 to support injection molding and door handle assembly operations in Mexico. ADAC-STRATTEC LLC was 51 percent owned by STRATTEC and 49 percent owned by ADAC Automotive of Grand Rapids, Michigan (“ADAC”) for all periods presented in this report. An additional Mexican entity, ADAC-STRATTEC de Mexico, is wholly owned by ADAC-STRATTEC LLC. ADAC-STRATTEC LLC’s financial results are consolidated with the financial results of STRATTEC and resulted in increased net sales to STRATTEC of approximately $35.4 million with no impact to net income during the three-month period ended September 29, 2024 and increased net sales and reduced net income to STRATTEC of approximately $32.8 million and $324,000, respectively, during the three-month period ended October 1, 2023.

ADAC charges ADAC STRATTEC LLC an engineering, research and design fee as well as a sales fee. Such fees are calculated as a percentage of net sales and are included in the consolidated results of STRATTEC. Additionally, ADAC-STRATTEC LLC sells production parts to ADAC. Sales to ADAC are included in the consolidated results of STRATTEC. The following table summarizes these related party transactions for the periods indicated below (in thousands):


	Three Months Ended
	September 29, 2024		October 1, 2023
Engineering, research and design fee charged to ADAC-STRATTEC LLC	$	2,480	$	2,294
Sales to ADAC	$	2,325	$	2,834

Income Taxes	3 Months Ended
Sep. 29, 2024
Income Tax Disclosure [Abstract]
Income Taxes	NOTE 17. INCOME TAXES Our effective tax rate was 28.6 percent and 23.7 percent for the three-month periods ended September 29, 2024 and October 1, 2023, respectively. The effective tax rate for the three-month periods ended September 29, 2024 and October 1, 2023 were impacted by the foreign tax rate differential. The effective tax rate for the three-month period ended September 29, 2024 was also impacted by a limitation on the utilization of our foreign tax credits and non-deductible items, which impacts also causes the effective tax rate to differ from the statutory tax rate.

Income Taxes

3 Months Ended

Sep. 29, 2024

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 17. INCOME TAXES

Our effective tax rate was 28.6 percent and 23.7 percent for the three-month periods ended September 29, 2024 and October 1, 2023, respectively. The effective tax rate for the three-month periods ended September 29, 2024 and October 1, 2023 were impacted by the foreign tax rate differential. The effective tax rate for the three-month period ended September 29, 2024 was also impacted by a limitation on the utilization of our foreign tax credits and non-deductible items, which impacts also causes the effective tax rate to differ from the statutory tax rate.

- Definition

The entire disclosure for income tax.

+ References

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+ Details

Leases (Details Textual)	3 Months Ended
Leases (Details Textual)	Sep. 29, 2024 OfficeSpace
El Paso Warehouse Lease [Member]
Lessee, Lease, Description [Line Items]
Operating lease, existence of option to extend	false
Operating lease, expiration term	2028-12
Korean Branch Office [Member]
Lessee, Lease, Description [Line Items]
Lease renewal term	2025-06
Leases term end date	2024-06
Number of operating leases	2
Lease extension period	4 years

Credit Facilities (Details Textual) - USD ($) $ in Millions			3 Months Ended	4 Months Ended	13 Months Ended	23 Months Ended
Credit Facilities (Details Textual) - USD ($) $ in Millions	May 29, 2024	Sep. 04, 2023	Sep. 29, 2024	Sep. 29, 2024	Sep. 29, 2024	May 30, 2024	Aug. 01, 2025
STRATTEC Credit Facility
Line Of Credit Facility [Line Items]
Secured revolving credit facility			$ 40	$ 40	$ 40
Credit facility maturity date			Aug. 01, 2026
STRATTEC Credit Facility \| SOFR
Line Of Credit Facility [Line Items]
Interest rate on borrowings under the credit facility		SOFR plus 1.35 percent prior to September 5, 2023			SOFR plus 1.85 percent subsequent to September 5, 2023
Interest rate - percentage points - on borrowings under credit facility		1.35%			1.85%
ADAC-STRATTEC Credit Facility
Line Of Credit Facility [Line Items]
Secured revolving credit facility			$ 20	$ 20	$ 20
ADAC-STRATTEC Credit Facility \| Forecast
Line Of Credit Facility [Line Items]
Secured revolving credit facility							$ 18
ADAC-STRATTEC Credit Facility \| SOFR
Line Of Credit Facility [Line Items]
Interest rate on borrowings under the credit facility	SOFR plus 1.35 percent prior to May 30, 2024			SOFR plus 3.10 percent subsequent to May 30, 2024
Interest rate - percentage points - on borrowings under credit facility	1.35%			3.10%
ADAC-STRATTEC Credit Facility \| Prime Rate
Line Of Credit Facility [Line Items]
Interest rate - percentage points - on borrowings under credit facility				2.00%		0.00%

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 29, 2024	Oct. 01, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ 3,703	$ 4,165

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Shareholders' Equity

3 Months Ended

Sep. 29, 2024

Equity [Abstract]

Shareholders' Equity

NOTE 14. SHAREHOLDERS' EQUITY

A summary of activity impacting shareholders’ equity for the three-month periods ended September 29, 2024 and October 1, 2023 were as follows (in thousands):


	Three months ended September 29, 2024
	Total Shareholders’ Equity			Common Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss			Treasury Stock			Non-Controlling Interest
Balance, June 30, 2024	$	225,615		$	76	$	101,024	$	250,612	$	(15,689	)	$	(135,478	)	$	25,070
Net income		3,748			—		—		3,703		—			—			45
Translation adjustments		(2,760	)		—		—		—		(1,671	)		—			(1,089	)
Stock based compensation		188			—		188		—		—			—			—
Pension and postretirement adjustment, net of tax		256			—		—		—		256			—			—
Employee stock purchases		13			—		6		—		—			7			—
Balance, September 29, 2024	$	227,060		$	76	$	101,218	$	254,315	$	(17,104	)	$	(135,471	)	$	24,026


	Three months ended October 1, 2023
	Total Shareholders’ Equity			Common Stock		Capital in Excess of Par Value			Retained Earnings		Accumulated Other Comprehensive Loss			Treasury Stock			Non-Controlling Interest
Balance, July 2, 2023	$	211,024		$	75	$	100,309		$	234,299	$	(14,194	)	$	(135,526	)	$	26,061
Net income		4,455			—		—			4,165		—			—			290
Translation adjustments		(649	)		—		—			—		(379	)		—			(270	)
Purchase of SPA non- controlling interest		(97	)		—		(97	)		—		—			—			—
Stock based compensation		505			—		505			—		—			—			—
Pension and postretirement adjustment, net of tax		46			—		—			—		46			—			—
Employee stock purchases		17			1		4			—		—			12			—
Balance, October 1, 2023	$	215,301		$	76	$	100,721		$	238,464	$	(14,527	)	$	(135,514	)	$	26,081

- Definition

The entire disclosure for equity.

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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1
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-URI https://asc.fasb.org/1943274/2147481112/505-10-50-18

+ Details

Leases - Schedule of Operating Lease Asset and Obligation Included in Condensed Consolidated Balance Sheets (Details) $ in Thousands	Sep. 29, 2024 USD ($)
Right-of use assets under operating lease:
Operating lease right-of-use assets	$ 3,617
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Other long-term assets
Lease obligations under operating lease:
Current liabilities: Accrued liabilities: other	$ 768
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Other
Other long-term liabilities	$ 3,190
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Other long-term liabilities
Operating lease, liability	$ 3,958

Property, Plant and Equipment (Tables)

3 Months Ended

Sep. 29, 2024

Property, Plant and Equipment [Abstract]

Summary of Property, Plant and Equipment

Property, plant and equipment consisted of the following as of September 29, 2024 and October 1, 2023 (in thousands):


	September 29, 2024			June 30, 2024
Land and improvements	$	6,384		$	6,697
Buildings and improvements		38,254			39,927
Machinery and equipment		231,912			258,622
		276,550			305,246
Less: accumulated depreciation		(194,029	)		(219,062	)
	$	82,521		$	86,184

Earnings Per Share - Reconciliation of the Components of Basic and Diluted Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 29, 2024	Oct. 01, 2023
Reconciliation of the components of the basic and diluted per share
Net Income, Basic earnings per share	$ 3,703	$ 4,165
Net Income , Diluted earnings per share	$ 3,703	$ 4,165
Basic earnings per share, Number of Shares	4,005	3,948
Stock option and restricted stock awards	41	26
Diluted earnings per share, Number of Shares	4,046	3,974
Basic earnings per share	$ 0.92	$ 1.05
Diluted earnings per share	$ 0.92	$ 1.05

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References

+ Details

- Definition

Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities; of income (loss) available to common shareholders.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

- Definition

Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities, and addition from assumption of issuance of common shares for dilutive potential common shares; of income (loss) available to common shareholders.

+ References + Details

Shareholders' Equity - Summary of Activity Impacting Shareholders' Equity (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 29, 2024	Oct. 01, 2023
Summary of activity impacting shareholders' equity
Beginning balance	$ 225,615	$ 211,024
Net income	3,748	4,455
Translation adjustments	(2,760)	(649)
Purchase of SPA non-controlling interest		(97)
Stock based compensation	188	505
Pension and postretirement adjustment, net of tax	256	46
Employee stock purchases	13	17
Ending balance	227,060	215,301
Common Stock
Summary of activity impacting shareholders' equity
Beginning balance	76	75
Employee stock purchases		1
Ending balance	76	76
Capital in Excess of Par Value
Summary of activity impacting shareholders' equity
Beginning balance	101,024	100,309
Purchase of SPA non-controlling interest		(97)
Stock based compensation	188	505
Employee stock purchases	6	4
Ending balance	101,218	100,721
Retained Earnings
Summary of activity impacting shareholders' equity
Beginning balance	250,612	234,299
Net income	3,703	4,165
Ending balance	254,315	238,464
Accumulated Other Comprehensive Loss
Summary of activity impacting shareholders' equity
Beginning balance	(15,689)	(14,194)
Translation adjustments	(1,671)	(379)
Pension and postretirement adjustment, net of tax	256	46
Ending balance	(17,104)	(14,527)
Treasury Stock
Summary of activity impacting shareholders' equity
Beginning balance	(135,478)	(135,526)
Employee stock purchases	7	12
Ending balance	(135,471)	(135,514)
Non-Controlling Interest
Summary of activity impacting shareholders' equity
Beginning balance	25,070	26,061
Net income	45	290
Translation adjustments	(1,089)	(270)
Ending balance	$ 24,026	$ 26,081

Leases

3 Months Ended

Sep. 29, 2024

Leases [Abstract]

Leases

NOTE 11. LEASES

Our right-of-use operating lease assets are recorded at the present value of future minimum lease payments, net of amortization. We have an operating lease for our El Paso, Texas finished goods and service parts distribution warehouse. This lease has a current lease term through December 2028 and does not include any options to extend the lease term beyond such timeframe. We have two operating leases for office space at our Korean branch office. Both of these leases have a lease term through June 2025 with automatic renewal. For purposes of calculating operating lease obligations, we included an extension of four years after June 2024 as it is reasonably certain that we will exercise such automatic renewals. Our leases do not contain material residual value guarantees or restrictive covenants. Operating lease expense is recognized on a straight-line basis over the lease term.

As the leases do not provide an implicit rate, we used our incremental borrowing rate at lease commencement to determine the present value of our lease payments. The incremental borrowing rate is an entity-specific rate which represents the rate of interest we would pay to borrow over a similar term with similar payments. Our operating lease assets and obligations included in the accompanying Condensed Consolidated Balance Sheets are presented below (in thousands):


	September 29, 2024
Right-of use assets under operating lease:
Other long-term assets	$	3,617
Lease obligations under operating lease:
Current liabilities: Accrued liabilities: other	$	768
Other long-term liabilities		3,190
	$	3,958

Future minimum lease payments, by our fiscal year, including options to extend that are reasonably certain to be exercised, under these non-cancelable leases are as follows as of September 29, 2024 (in thousands):


2025 (for the remaining nine months)	$	740
2026		1,026
2027		1,075
2028		1,127
2029		558
Thereafter		-
Total future minimum lease payments		4,526
Less: Imputed interest		(568	)
Total lease obligations	$	3,958

Cash flow information related to the operating leases is shown below (in thousands):


	Three Months Ended
	September 29, 2024		October 1, 2023
Operating cash flows:
Cash paid related to operating lease obligations	$	250	$	135

The weighted average lease term and discount rate for our operating leases are shown below:


	September 29, 2024
Weighted average remaining lease term (in years)		4.2
Weighted average discount rate		6.2	%

Operating lease expense was as follows for the periods presented below (in thousands):


	Three Months Ended
	September 29, 2024		October 1, 2023
Operating lease expense	$	247	$	247

Stock-Based Compensation (Tables)

3 Months Ended

Sep. 29, 2024

Share-Based Payment Arrangement [Abstract]

Summary of Stock Option Activity Under Our Stock Incentive Plan

A summary of stock option activity under our stock incentive plan for the three-month period ended September 29, 2024 follows:


	Shares			Weighted Average Exercise Price
Balance, June 30, 2024		8,070		$	79.73
Expired		(8,070	)	$	79.73
Balance, September 29, 2024		—

Summary of Restricted Stock Activity Under Our Stock Incentive Plan

A summary of restricted stock activity under our stock incentive plan for the three-month period ended September 29, 2024 follows:


	Shares			Weighted Average Grant Date Fair Value
Nonvested Balance, June 30, 2024		79,325		$	27.21
Granted		34,800		$	38.83
Vested		(37,200	)	$	30.20
Forfeited		(2,375	)	$	30.65
Nonvested Balance, September 29, 2024		74,550		$	31.03

Other Income, net - Summary of Other Income, Net (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 29, 2024	Oct. 01, 2023
Other Income and Expenses [Abstract]
Foreign currency transaction gain	$ 1,005	$ 226
Realized and unrealized loss on peso forward contracts, net	(735)
Pension and postretirement plans cost	(363)	(99)
Rabbi Trust gain	96	(42)
Other	126	49
Other income, net	$ 129	$ 134

Fair Value of Financial Instruments

3 Months Ended

Sep. 29, 2024

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

NOTE 7. FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of our cash and cash equivalents, accounts receivable, accounts payable and borrowings under our credit facilities approximated book value as of September 29, 2024 and June 30, 2024. Fair value is defined as the exchange price that would be received for an asset or paid for a liability (an exit price) in the principal or most advantageous market in an orderly transaction between market participants on the measurement date.

The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of September 29, 2024 and June 30, 2024 (in thousands):


	September 29, 2024
	Fair Value Inputs
	Level 1 Assets: Quoted Prices In Active Markets		Level 2 Assets: Observable Inputs Other Than Market Prices		Level 3 Assets: Unobservable Inputs
Assets:
Rabbi Trust assets:
Stock Index Funds:
Small cap	$	92	$	—	$	—
Mid cap		178		—		—
Large cap		369		—		—
International		432		—		—
Fixed income funds		478		—		—
Cash and cash equivalents		—		185		—
Total assets at fair value	$	1,549	$	185	$	—

Liabilities:
Mexican peso forward contracts	$	—	$	652	$	—
Total liabilities at fair value	$	—	$	652	$	—


	June 30, 2024
	Fair Value Inputs
	Level 1 Assets: Quoted Prices In Active Markets		Level 2 Assets: Observable Inputs Other Than Market Prices		Level 3 Assets: Unobservable Inputs
Assets:
Rabbi Trust assets:
Stock Index Funds:
Small cap	$	84	$	—	$	—
Mid cap		163		—		—
Large cap		349		—		—
International		399		—		—
Fixed income funds		458		—		—
Cash and cash equivalents		—		185		—
Total assets at fair value	$	1,453	$	185	$	—

The Rabbi Trust assets fund our Amended and Restated Supplemental Executive Retirement Plan and are included in Other Long-Term Assets in the accompanying Condensed Consolidated Balance Sheets.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
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-Name Accounting Standards Codification
-Section 55
-Paragraph 107
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-URI https://asc.fasb.org/1943274/2147478119/940-820-50-1

+ Details

Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands	Sep. 29, 2024	Jun. 30, 2024
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 276,550	$ 305,246
Less: accumulated depreciation	(194,029)	(219,062)
Net property, plant and equipment	82,521	86,184
Land and improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	6,384	6,697
Buildings and improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	38,254	39,927
Machinery and equipment
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 231,912	$ 258,622

Revenue from Contracts with Customers (Tables)

3 Months Ended

Sep. 29, 2024

Revenue from Contract with Customer [Abstract]

Revenue by Product Group and Customer

Revenue by product group for the periods presented was as follows (thousands of dollars):


	Three Months Ended
	September 29, 2024		October 1, 2023
Door handles & exterior trim	$	35,430	$	32,768
Power access		34,779		32,651
Keys & locksets		23,022		30,295
Latches		19,111		15,552
User interface controls		13,839		10,597
Aftermarket & OE service		10,063		10,905
Other		2,808		2,638
	$	139,052	$	135,406

Revenue by customer or customer group for the periods presented was as follows (thousands of dollars):


	Three Months Ended
	September 29, 2024		October 1, 2023
General Motors Company	$	42,160	$	40,505
Ford Motor Company		32,137		26,909
Stellantis		12,765		27,297
Tier 1 Customers		20,082		18,122
Commercial and Other OEM Customers		17,055		14,197
Hyundai / Kia		14,853		8,376
	$	139,052	$	135,406

Pension and Postretirement Benefits

3 Months Ended

Sep. 29, 2024

Retirement Benefits [Abstract]

Pension and Postretirement Benefits

NOTE 20. PENSION AND POSTRETIREMENT BENEFITS

We have a noncontributory Supplemental Executive Retirement Plan (“SERP”), which is a nonqualified defined benefit plan. The SERP is funded through a Rabbi Trust with TMI Trust Company. Under the SERP, as amended December 31, 2013, participants received an accrued lump-sum benefit as of December 31, 2013, which was credited to each participant’s account. Subsequent to December 31, 2013, each eligible participant receives a supplemental retirement benefit equal to the foregoing lump sum benefit, plus an annual benefit accrual equal to 8 percent of the participant’s base salary and cash bonus, plus annual credited interest on the participant’s account balance. All then current participants as of December 31, 2013 are fully vested in their account balances with any new individuals participating in the SERP effective on or after January 1, 2014 being subject to a five year vesting period. The SERP, which is considered a nonqualified defined benefit plan under applicable rules and regulations of the Internal Revenue Code, will continue to be funded through use of a Rabbi Trust to hold investment assets to be used in part to fund any future required lump sum benefit payments to participants. During the quarter ended September 29, 2024, SERP benefits of $1.2 million were cash settled. We incurred a related pre-tax settlement charge of $283,000 due to the requirement to expense a portion of the unrealized actuarial losses associated with the settlement. The Rabbi Trust assets had a value of $1.7 million at September 29, 2024 and $1.6 million at June 30, 2024. The Rabbi Trust asset balance is included in Other Long-Term Assets in the accompanying Condensed Consolidated Balance Sheets.

We also sponsor a postretirement health care plan for all current and future eligible U.S. retirees hired prior to June 1, 2001. The expected cost of retiree health care benefits is recognized during the years the associates who are covered under the plan render service. Effective January 1, 2010, an amendment to the postretirement health care plan limited the benefit for future eligible retirees to $4,000 per plan year and the benefit is further subject to a maximum five-year coverage period based on the associate’s retirement date and age. The postretirement health care plan is unfunded. Additionally, we sponsor a postretirement life plan for all U.S. salaried retirees who retired prior to October 1, 2001 and all U.S. hourly retirees who were hired prior to June 27, 2005 and retired prior to January 1, 2010. The benefit provides for a death benefit of $8,000. The postretirement life plan is unfunded.

The service cost component of the net periodic benefit costs under these plans is allocated between Cost of Goods Sold and Engineering, Selling and Administrative Expenses while the remaining components of the net periodic benefit costs are included in Other Income, net in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income.

The following tables summarize the net periodic benefit cost recognized for each of the periods indicated under these plans (in thousands):


	SERP Benefits				Postretirement Benefits
	Three Months Ended				Three Months Ended
	September 29, 2024		October 1, 2023		September 29, 2024		October 1, 2023
Service cost	$	23	$	21	$	2	$	2
Interest cost		18		22		16		17
Plan Settlements		283		—		—		—
Amortization of unrecognized net loss		6		12	40			48
Net periodic benefit cost	$	330	$	55	$	58	$	67

- Definition

The entire disclosure for retirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 70
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480794/715-70-50-1

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 17
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480482/715-20-55-17

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)(iv)(03)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)(i)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (q)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (l)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/715/tableOfContent

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)(iii)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (o)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (p)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (r)(1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (r)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480126/715-20-S99-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 60
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480266/715-60-50-3

+ Details

Summary of Significant Accounting Policies

3 Months Ended

Sep. 29, 2024

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

STRATTEC’s significant accounting policies are described under Organization and Summary of Significant Accounting Policies in Notes to Financial Statements included in our Annual Report. There have been no material changes to the significant accounting policies during the three-month period ended September 29, 2024.

Use of Estimates

These changing conditions may also affect the estimates and assumptions made by our management in our financial statements. Such estimates and assumptions affect, among other things, our long-lived asset valuations, assessment of our annual effective tax rate, valuation of deferred income taxes, assessment of excess and obsolete inventory reserves, and assessment of collectability of trade receivables.

Recently Adopted and Recently Issued Accounting Standards

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures. The update enhances annual and interim reportable segment disclosures primarily by requiring disclosures about significant reportable segment expenses and provides new segment disclosure requirements for entities with a single reportable segment. ASU 2023-07 is effective for public business entities for fiscal years beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. This update is to be applied retrospectively to all periods presented in the financial statements. Annual reporting under this update becomes effective for our 2025 fiscal year. Interim reporting under this update becomes effective for us in our fiscal 2026. We are assessing the impact of this standard and expect that any impact would be limited to the addition of single reportable segment disclosure with segment expense disclosures in the footnotes to our consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures. The update requires greater disaggregation of income tax disclosures related to the income tax rate reconciliation and income taxes paid. ASU 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024, with early adoption permitted. This update is to be applied on a prospective basis. Retrospective application is permitted. Annual reporting under this update becomes effective for us in our fiscal 2026. We are currently assessing the required disclosure impacts of this update.

Description of Business and Basis of Presentation (Details Textual)	3 Months Ended
	Sep. 29, 2024 Segment
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Number of reporting segment	1

Credit Facilities - Schedule of Outstanding Borrowings Under the Credit Facilities (Details) - USD ($) $ in Thousands	Sep. 29, 2024	Jun. 30, 2024
Line Of Credit Facility [Line Items]
Outstanding Borrowing, Non-current	$ 13,000	$ 13,000
ADAC-STRATTEC Credit Facility
Line Of Credit Facility [Line Items]
Outstanding Borrowing, Non-current	$ 13,000	$ 13,000

- Definition

The carrying value as of the balance sheet date of the noncurrent portion of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

+ References + Details

Leases (Tables)

3 Months Ended

Sep. 29, 2024

Leases [Abstract]

Schedule of Operating Lease Asset and Obligation Included in Condensed Consolidated Balance Sheets

Our operating lease assets and obligations included in the accompanying Condensed Consolidated Balance Sheets are presented below (in thousands):


	September 29, 2024
Right-of use assets under operating lease:
Other long-term assets	$	3,617
Lease obligations under operating lease:
Current liabilities: Accrued liabilities: other	$	768
Other long-term liabilities		3,190
	$	3,958

Schedule of Future Minimum Lease Payments Under Non-Cancelable Lease Including Options to Extend


2025 (for the remaining nine months)	$	740
2026		1,026
2027		1,075
2028		1,127
2029		558
Thereafter		-
Total future minimum lease payments		4,526
Less: Imputed interest		(568	)
Total lease obligations	$	3,958

Schedule of Cash Flow Information Related to Operating Lease

Cash flow information related to the operating leases is shown below (in thousands):


	Three Months Ended
	September 29, 2024		October 1, 2023
Operating cash flows:
Cash paid related to operating lease obligations	$	250	$	135

Schedule of Weighted Average Lease Term and Discount Rate for Operating Lease

The weighted average lease term and discount rate for our operating leases are shown below:


	September 29, 2024
Weighted average remaining lease term (in years)		4.2
Weighted average discount rate		6.2	%

Schedule of Operating Lease Expense

Operating lease expense was as follows for the periods presented below (in thousands):


	Three Months Ended
	September 29, 2024		October 1, 2023
Operating lease expense	$	247	$	247

Pension and Postretirement Benefits (Tables)

3 Months Ended

Sep. 29, 2024

Retirement Benefits [Abstract]

Summary of Net Periodic Benefit Cost Recognized

The following tables summarize the net periodic benefit cost recognized for each of the periods indicated under these plans (in thousands):


	SERP Benefits				Postretirement Benefits
	Three Months Ended				Three Months Ended
	September 29, 2024		October 1, 2023		September 29, 2024		October 1, 2023
Service cost	$	23	$	21	$	2	$	2
Interest cost		18		22		16		17
Plan Settlements		283		—		—		—
Amortization of unrecognized net loss		6		12	40			48
Net periodic benefit cost	$	330	$	55	$	58	$	67

Accumulated Other Comprehensive Loss

3 Months Ended

Sep. 29, 2024

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Loss

NOTE 21. ACCUMULATED OTER COMPREHENSIVE LOSS

The following tables summarize the changes in accumulated other comprehensive loss (“AOCL”) for each period presented (in thousands):


	Three Months Ended September 29, 2024
	Foreign Currency Translation Adjustments		Retirement and Postretirement Benefit Plans			Total
Balance, June 30, 2024	$	14,716	$	973		$	15,689
Other comprehensive loss before reclassifications		2,760		(283	)		2,477
Income tax		—		63			63
Net other comprehensive loss before reclassifications		2,760		(220	)		2,540
Reclassifications:
Unrecognized net loss (A)		—		(46	)		(46	)
Income tax		—		10			10
Net reclassifications		—		(36	)		(36	)
Other comprehensive loss		2,760		(256	)		2,504
Other comprehensive loss attributable to non- controlling interest		1,089		—			1,089
Balance, September 29, 2024	$	16,387	$	717		$	17,104


	Three Months Ended October 1, 2023
	Foreign Currency Translation Adjustments		Retirement and Postretirement Benefit Plans			Total
Balance, July 2, 2023	$	13,028	$	1,166		$	14,194
Other comprehensive loss before reclassifications		649		—			649
Net other comprehensive loss before reclassifications		649		—			649
Reclassifications:
Unrecognized net loss (A)		—		(60	)		(60	)
Income tax		—		14			14
Net reclassifications		—		(46	)		(46	)
Other comprehensive loss		649		(46	)		603
Other comprehensive loss attributable to non- controlling interest		270		—			270
Balance, October 1, 2023	$	13,407	$	1,120		$	14,527

(A) Amounts reclassified are included in the computation of net periodic benefit cost, which is included in Other Income, net in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income. See Pension and Postretirement Benefits note to these Notes to Condensed Consolidated Financial Statements above.

Value-Added Tax

3 Months Ended

Sep. 29, 2024

Value-Added Tax [Abstract]

Value-Added Tax

NOTE 5. VALUE-ADDED TAX

Our Mexican entities are subject to value-added tax (“VAT”). VAT is paid on goods and services and collected on sales. A VAT certification generally allows for relief from VAT tax for temporarily imported goods. Our VAT recoverable and payable balances were increased as of September 29, 2024 and June 30, 2024 due to a temporary issue with our VAT tax certification that began during our quarter ended October 1, 2023. Although the certification issue was resolved during our quarter ended December 31, 2023, we were required to pay VAT on all parts temporarily imported into Mexico before seeking reimbursement for periods in which the certification issue was outstanding, which periods are now open to audit with the Mexican tax authority along with all periods subsequent to resolution of the certification issue. We believe temporary increases in the VAT recoverable and payable balances will remain elevated until the periods under audit are closed.

Derivative Instruments (Tables)

3 Months Ended

Sep. 29, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Quantification of Outstanding Mexican Peso Forward Contracts

The following table quantifies the outstanding Mexican peso forward contracts as of September 29, 2024 (thousands of dollars, except with respect to the average forward contractual exchange rate):


	Effective Dates	Notional Amount		Average Forward Contractual Exchange Rate		Fair Value
Buy MXP/Sell USD	October 15, 2024 − August 18, 2025	$	31,000		19.77	$	(652	)

Fair Market Value of All Outstanding Peso Forward Contracts

The fair market value of all outstanding Mexican peso forward contracts in the accompanying Condensed Consolidated Balance Sheets as of the dates specified was as follows (thousands of dollars):


	September 29, 2024			June 30, 2024
Not designated as hedging instruments:
Other current liabilities:
Mexican peso forward contracts	$	(652	)	$	—

Pre-Tax Effects of the Peso Forward Contracts

The pre-tax effects of the Mexican peso forward contracts are included in Other Income, net on the accompanying Condensed Consolidated Statements of Income and Comprehensive Income and consisted of the following for the periods indicated below (thousands of dollars):


	Three Months Ended
	September 29, 2024			October 1, 2023
Not designated as hedging instruments:
Realized and unrealized loss, net	$	(735	)	$	—

Derivative Instruments - Fair Market Value of All Outstanding Peso Forward Contracts (Details) $ in Thousands	Sep. 29, 2024 USD ($)
Mexican Peso Forward Contracts \| Other Current Liabilities
Not Designated as Hedging Instruments:
Fair market value of derivative instruments	$ (652)

Leases - Schedule of Operating Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 29, 2024	Oct. 01, 2023
Leases [Abstract]
Operating lease expense	$ 247	$ 247

Other Income, net

3 Months Ended

Sep. 29, 2024

Other Income and Expenses [Abstract]

Other Income, net

NOTE 15. OTHER INCOME, NET

Net other income included in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income primarily included foreign currency transaction gains and losses, realized and unrealized gains and losses on our Mexican peso currency forward contracts, the components of net periodic benefit cost other than the service cost component related to our pension and postretirement plans and Rabbi Trust gains and losses. Foreign currency transaction gains and losses resulted from activity associated with foreign denominated assets and liabilities held by our Mexican subsidiaries. The Rabbi Trust assets fund our Amended and Restated Supplemental Executive Retirement Plan. The investments held in the Trust are considered trading securities. We entered into the Mexican peso currency forward contracts to reduce earnings volatility resulting from changes in exchange rates affecting the U.S. dollar cost of our Mexican operations. Unrealized gains and losses on the peso forward contracts recognized as a result of mark-to-market adjustments as of September 29, 2024 may or may not be realized in future periods. Pension and postretirement plan costs include the components of net periodic benefit cost other than the service cost component.

The impact of these items for each of the periods presented was as follows (in thousands):


	Three Months Ended
	September 29, 2024			October 1, 2023
Foreign currency transaction gain	$	1,005		$	226
Realized and unrealized loss on peso forward contracts, net		(735	)		—
Pension and postretirement plans cost		(363	)		(99	)
Rabbi Trust gain		96			(42	)
Other		126			49
	$	129		$	134

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 29, 2024	Jun. 30, 2024
Current Assets:
Cash and cash equivalents	$ 34,403	$ 25,410
Receivables, net	102,266	99,297
Inventories:
Finished products	18,540	19,833
Work in process	15,520	15,461
Purchased materials	49,734	46,355
Inventories, net	83,794	81,649
Pre-production costs	15,265	22,173
Value added tax recoverable	20,624	19,684
Other current assets	4,396	5,601
Total current assets	260,748	253,814
Deferred income taxes	17,235	17,593
Other long-term assets	6,363	6,698
Net property, plant and equipment	82,521	86,184
Total assets	366,867	364,289
Current Liabilities:
Accounts payable	59,461	54,911
Accrued Liabilities:
Payroll and benefits	25,421	28,953
Value added tax payable	10,982	9,970
Environmental	1,390	1,390
Warranty	10,698	10,695
Other	11,619	12,369
Total current liabilities	119,571	118,288
Borrowings under credit facilities - long term	13,000	13,000
Accrued pension obligations	1,417	1,379
Accrued postretirement obligations	1,041	1,050
Other long-term liabilities	4,778	4,957
Shareholders’ Equity:
Common stock	76	76
Capital in excess of par value	101,218	101,024
Retained earnings	254,315	250,612
Accumulated other comprehensive loss	(17,104)	(15,689)
Treasury stock, at cost	(135,471)	(135,478)
Total STRATTEC SECURITY CORPORATION shareholders’ equity	203,034	200,545
Non-controlling interest	24,026	25,070
Total shareholders’ equity	227,060	225,615
Total liabilities and shareholders' equity	$ 366,867	$ 364,289

Investment in Joint Ventures and Majority Owned Subsidiaries (Details Textual) - ADAC-STRATTEC LLC - USD ($)	3 Months Ended
	Sep. 29, 2024	Oct. 01, 2023
STRATTEC
Schedule Of Equity Method Investments [Line Items]
Percentage ownership interest in less than wholly owned consolidated subsidiary	51.00%
Majority owned subsidiary, impact on net income	$ 0	$ 324,000
Majority owned subsidiary, impact on net sales	$ 35,400,000	$ 32,800,000
ADAC
Schedule Of Equity Method Investments [Line Items]
Percentage ownership interest in less than wholly owned consolidated subsidiary	49.00%

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Sep. 29, 2024	Jun. 30, 2024
Statement of Financial Position [Abstract]
Common stock, shares authorized	18,000,000	18,000,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares issued	7,586,920	7,624,120
Treasury Stock	3,589,126	3,597,715

Derivative Instruments - Schedule of Quantification of Outstanding Mexican Peso Forward Contracts (Details) - Currency buy sell under contract one $ in Thousands	3 Months Ended
	Sep. 29, 2024 USD ($) $ / $
Derivative [Line Items]
Derivative, Effective Dates, Inception	Oct. 15, 2024
Derivative, Effective Dates, Maturity	Aug. 18, 2025
Derivative, Notional Amount	$ 31,000
Derivative, Average Forward Contractual Exchange Rate \| $ / $	19.77
Derivative, Fair Value	$ (652)

- Definition

Date derivative contract ends, in YYYY-MM-DD format.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 210
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478795/946-210-50-6

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 946
-SubTopic 210
-Name Accounting Standards Codification
-Section 55
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477439/946-210-55-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 210
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478795/946-210-50-6

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 320
-Name Accounting Standards Codification
-Section S99
-Paragraph 5
-Subparagraph (SX 210.12-13(Column A)(Footnote 3))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477271/946-320-S99-5

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 320
-Name Accounting Standards Codification
-Section S99
-Paragraph 5C
-Subparagraph (SX 210.12-13C(Column D))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477271/946-320-S99-5C

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 320
-Name Accounting Standards Codification
-Section S99
-Paragraph 5
-Subparagraph (SX 210.12-13(Column F))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477271/946-320-S99-5

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 320
-Name Accounting Standards Codification
-Section S99
-Paragraph 5A
-Subparagraph (SX 210.12-13A(Column C))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477271/946-320-S99-5A

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 320
-Name Accounting Standards Codification
-Section S99
-Paragraph 5B
-Subparagraph (SX 210.12-13B(Column D))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477271/946-320-S99-5B

+ Details

Fair Value of Financial Instruments (Tables)

3 Months Ended

Sep. 29, 2024

Fair Value Disclosures [Abstract]

Summary of Financial Assets and Liabilities at Fair Value on Recurring Basis

The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of September 29, 2024 and June 30, 2024 (in thousands):


	September 29, 2024
	Fair Value Inputs
	Level 1 Assets: Quoted Prices In Active Markets		Level 2 Assets: Observable Inputs Other Than Market Prices		Level 3 Assets: Unobservable Inputs
Assets:
Rabbi Trust assets:
Stock Index Funds:
Small cap	$	92	$	—	$	—
Mid cap		178		—		—
Large cap		369		—		—
International		432		—		—
Fixed income funds		478		—		—
Cash and cash equivalents		—		185		—
Total assets at fair value	$	1,549	$	185	$	—

Liabilities:
Mexican peso forward contracts	$	—	$	652	$	—
Total liabilities at fair value	$	—	$	652	$	—


	June 30, 2024
	Fair Value Inputs
	Level 1 Assets: Quoted Prices In Active Markets		Level 2 Assets: Observable Inputs Other Than Market Prices		Level 3 Assets: Unobservable Inputs
Assets:
Rabbi Trust assets:
Stock Index Funds:
Small cap	$	84	$	—	$	—
Mid cap		163		—		—
Large cap		349		—		—
International		399		—		—
Fixed income funds		458		—		—
Cash and cash equivalents		—		185		—
Total assets at fair value	$	1,453	$	185	$	—

Commitments and Contingencies (Details Textual) - USD ($) $ in Thousands	Sep. 29, 2024	Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
Environmental	$ 1,390	$ 1,390

Shareholders' Equity (Tables)

3 Months Ended

Sep. 29, 2024

Equity [Abstract]

Summary of Activity Impacting Shareholders' Equity

A summary of activity impacting shareholders’ equity for the three-month periods ended September 29, 2024 and October 1, 2023 were as follows (in thousands):


	Three months ended September 29, 2024
	Total Shareholders’ Equity			Common Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss			Treasury Stock			Non-Controlling Interest
Balance, June 30, 2024	$	225,615		$	76	$	101,024	$	250,612	$	(15,689	)	$	(135,478	)	$	25,070
Net income		3,748			—		—		3,703		—			—			45
Translation adjustments		(2,760	)		—		—		—		(1,671	)		—			(1,089	)
Stock based compensation		188			—		188		—		—			—			—
Pension and postretirement adjustment, net of tax		256			—		—		—		256			—			—
Employee stock purchases		13			—		6		—		—			7			—
Balance, September 29, 2024	$	227,060		$	76	$	101,218	$	254,315	$	(17,104	)	$	(135,471	)	$	24,026


	Three months ended October 1, 2023
	Total Shareholders’ Equity			Common Stock		Capital in Excess of Par Value			Retained Earnings		Accumulated Other Comprehensive Loss			Treasury Stock			Non-Controlling Interest
Balance, July 2, 2023	$	211,024		$	75	$	100,309		$	234,299	$	(14,194	)	$	(135,526	)	$	26,061
Net income		4,455			—		—			4,165		—			—			290
Translation adjustments		(649	)		—		—			—		(379	)		—			(270	)
Purchase of SPA non- controlling interest		(97	)		—		(97	)		—		—			—			—
Stock based compensation		505			—		505			—		—			—			—
Pension and postretirement adjustment, net of tax		46			—		—			—		46			—			—
Employee stock purchases		17			1		4			—		—			12			—
Balance, October 1, 2023	$	215,301		$	76	$	100,721		$	238,464	$	(14,527	)	$	(135,514	)	$	26,081

Stock-Based Compensation (Details Textual) - USD ($) $ in Millions	3 Months Ended
	Sep. 29, 2024	Jun. 30, 2024
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share based compensation arrangement by share based payment award number of shares authorized	2,250,000
Shares of common stock available for grant	336,730
Stock options outstanding	0	8,070
Restricted stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation cost related to unvested restricted stock grants	$ 1.7
Weighted average period over which unrecognized compensation is expected to be recognized	1 year 2 months 12 days
Restricted stock \| Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period after the date of grant	1 year
Restricted stock \| Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period after the date of grant	3 years

Pension and Postretirement Benefits - Summary of Net Periodic Benefit Cost Recognized (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 29, 2024	Oct. 01, 2023
SERP Benefits
COMPONENTS OF NET PERIODIC BENEFIT COST:
Service cost	$ 23	$ 21
Interest cost	18	22
Plan Settlements	283
Amortization of unrecognized net loss	6	12
Net periodic benefit cost	330	55
Postretirement Benefits
COMPONENTS OF NET PERIODIC BENEFIT COST:
Service cost	2	2
Interest cost	16	17
Amortization of unrecognized net loss	40	48
Net periodic benefit cost	$ 58	$ 67

Fair Value of Financial Instruments - Summary of Financial Assets and Liabilities at Fair Value on Recurring Basis (Details) - Fair Value Measurements Recurring - USD ($) $ in Thousands	Sep. 29, 2024	Jun. 30, 2024
Level 1
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total assets at fair value	$ 1,549	$ 1,453
Level 1 \| Fixed Income Funds \| Rabbi Trust Assets
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total assets at fair value	478	458
Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total assets at fair value	185	185
Total liabilities at fair value	652
Level 2 \| Mexican Peso Forward Contracts
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total liabilities at fair value	652
Stock Index Funds \| Level 1 \| Small Cap \| Rabbi Trust Assets
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total assets at fair value	92	84
Stock Index Funds \| Level 1 \| Mid Cap \| Rabbi Trust Assets
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total assets at fair value	178	163
Stock Index Funds \| Level 1 \| Large Cap \| Rabbi Trust Assets
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total assets at fair value	369	349
Stock Index Funds \| Level 1 \| International \| Rabbi Trust Assets
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total assets at fair value	432	399
Cash and Cash Equivalents \| Level 2 \| Rabbi Trust Assets
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total assets at fair value	$ 185	$ 185

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Sep. 29, 2024	Sep. 30, 2024
Cover [Abstract]
Entity Registrant Name	STRATTEC SECURITY CORP
Entity Central Index Key	0000933034
Document Type	10-Q
Document Period End Date	Sep. 29, 2024
Amendment Flag	false
Document Fiscal Year Focus	2025
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--06-29
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false
Entity File Number	0-25150
Entity Incorporation, State or Country Code	WI
Entity Tax Identification Number	39-1804239
Entity Address, Address Line One	3333 West Good Hope Road
Entity Address, City or Town	Milwaukee
Entity Address, State or Province	WI
Entity Address, Postal Zip Code	53209
City Area Code	414
Local Phone Number	247-3333
Document Quarterly Report	true
Document Transition Report	false
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Common Stock Shares Outstanding		4,101,092
Security Exchange Name	NASDAQ
Trading Symbol	STRT
Title of 12(b) Security	Common stock, $.01 par value

Commitments and Contingencies

3 Months Ended

Sep. 29, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 13. COMMITMENTS AND CONTINGENCIES

We are from time to time subject to various legal actions and claims incidental to our business, including those arising out of alleged defects, alleged breaches of contracts, product warranties, intellectual property matters and employment related matters. It is our opinion that the outcome of such matters will not have a material adverse impact on our consolidated financial position, results of operations or cash flows. With respect to warranty matters, although we cannot ensure that future costs of warranty claims by customers will not be material, we believe our established reserves are adequate to cover potential warranty settlements.

In 1995, we recorded a provision for estimated costs to remediate an environmental contamination site at our Milwaukee facility. The facility was contaminated by a solvent spill, which occurred in 1985, from a former above ground solvent storage tank located on the east side of the facility. The reserve was originally established based on third party estimates to adequately cover the cost for active remediation of the contamination. Due to changing technology and related costs associated with active remediation of the contamination, in fiscal years 2010, 2016, and 2021, we obtained updated third party estimates of projected costs to adequately cover the cost for active remediation of this contamination and adjusted the reserve as needed. We monitor and evaluate the site with the use of groundwater monitoring wells. An environmental consultant samples these wells one or two times a year to determine the status of the contamination and the potential for remediation of the contamination by natural attenuation, the dissipation of the contamination over time to concentrations below applicable standards. If such sampling evidences a sufficient degree of and trend toward natural attenuation of the contamination at the site, we may be able to obtain a closure letter from the regulatory authorities resolving the issue without the need for active remediation. If a sufficient degree and trend toward natural attenuation is not evidenced by sampling, a more active form of remediation beyond natural attenuation may be required. The sampling has not yet satisfied all of the requirements for closure by natural attenuation. As a result, sampling continues and the reserve remains at an amount to reflect our estimated cost of active remediation. The reserve is not measured on a discounted basis. We believe, based on findings-to-date and known environmental regulations, that the environmental reserve of $1.4 million at September 29, 2024 is adequate.

Stock-Based Compensation - Summary of Stock Option Activity Under Our Stock Incentive Plan (Details)	3 Months Ended
	Sep. 29, 2024 $ / shares shares
Share-Based Payment Arrangement, Noncash Expense [Abstract]
Shares, Beginning Balance	8,070
Shares, Expired	(8,070)
Shares, Ending Balance	0
Weighted Average Exercise Price, Beginning Balance \| $ / shares	$ 79.73
Weighted Average Exercise Price, Expired \| $ / shares	$ 79.73

Equity Loss from Joint Ventures

3 Months Ended

Sep. 29, 2024

Equity Method Investments and Joint Ventures [Abstract]

Equity Loss from Joint Ventures

NOTE 9. EQUITY LOSS FROM JOINT VENTURES

Prior to June 30, 2023, STRATTEC, WITTE Automotive of Velbert, Germany (“WITTE”) and ADAC each held a one-third interest in a joint venture company, Vehicle Access Systems LLC (“VAST LLC”). Effective June 30, 2023, we sold our one-third ownership interest in VAST LLC, under which we exercised significant influence but did not control. The equity loss of joint ventures for the three-month period ended October 1, 2023 was the result of additional professional fees incurred related to the sale of VAST LLC.

Warranty

3 Months Ended

Sep. 29, 2024

Guarantees and Product Warranties [Abstract]

Warranty

NOTE 16. WARRANTY

We have a warranty reserve recorded on our accompanying Condensed Consolidated Balance Sheets related to our known and potential exposure to warranty claims in the event our products fail to perform as expected and in the event we may be required to participate in the repair costs incurred by our customers for such products. The recorded warranty reserve balance involves judgment and estimates. Our reserve estimate is based on an analysis of historical warranty data as well as current trends and information. As additional information becomes available, actual results may differ from recorded estimates, which may require us to adjust the amount of our warranty provision. Changes in the warranty reserve for the three-month periods ended September 29, 2024 and October 1, 2023 were as follows (in thousands):


	Three Months Ended
	September 29, 2024			October 1, 2023
Balance, beginning of period	$	10,695		$	9,725
Provision Charged to expense		387			14
Payments		(384	)		(122	)
Balance, end of period	$	10,698		$	9,617

Leases - Schedule of Future Minimum Lease Payments Under Non-Cancelable Lease Including Options to Extend (Details) $ in Thousands	Sep. 29, 2024 USD ($)
Leases [Abstract]
2025 (for the remaining nine months)	$ 740
2026	1,026
2027	1,075
2028	1,127
2029	558
Total future minimum lease payments	4,526
Less: Imputed interest	(568)
Total lease obligations	$ 3,958

Warranty - Changes in Warranty Reserve (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 29, 2024	Oct. 01, 2023
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward]
Balance, beginning of period	$ 10,695	$ 9,725
Provision Charged to expense	387	14
Payments	(384)	(122)
Balance, end of period	$ 10,698	$ 9,617

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 29, 2024
Trading Arrangements, by Individual
Material Terms of Trading Arrangement	nor did the Company during such fiscal quarter adopt or terminate any “Rule 10b5-1 trading arrangement”.
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Derivative Instruments - Pre-Tax Effects of the Peso Forward Contracts (Details) $ in Thousands	3 Months Ended
	Sep. 29, 2024 USD ($)
Not Designated as Hedging Instrument \| Other Income, Net
Pre-tax effects of the Mexican peso forward contracts
Realized and unrealized loss, net	$ (735)

Leases - Schedule of Cash Flow Information Related to Operating Lease (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 29, 2024	Oct. 01, 2023
Operating cash flows:
Cash paid related to operating lease obligations	$ 250	$ 135

Revenue from Contracts with Customers - Revenue by Product Group (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 29, 2024	Oct. 01, 2023
Product Information [Line Items]
Revenue	$ 139,052	$ 135,406
Door Handles & Exterior Trim
Product Information [Line Items]
Revenue	35,430	32,768
Power Access
Product Information [Line Items]
Revenue	34,779	32,651
Keys & Locksets
Product Information [Line Items]
Revenue	23,022	30,295
Latches
Product Information [Line Items]
Revenue	19,111	15,552
User Interface Controls
Product Information [Line Items]
Revenue	13,839	10,597
Aftermarket & OE Service
Product Information [Line Items]
Revenue	10,063	10,905
Other
Product Information [Line Items]
Revenue	$ 2,808	$ 2,638

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
-Section 50
-Paragraph 41
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-41

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 1
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-URI https://asc.fasb.org/1943274/2147482964/270-10-50-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147479806/606-10-50-4

+ Details

Credit Facilities (Tables)

3 Months Ended

Sep. 29, 2024

Debt Disclosure [Abstract]

Schedule of Outstanding Borrowings Under the Credit Facilities

Outstanding borrowings under the credit facilities were as follows (in thousands):


	September 29, 2024		June 30, 2024
STRATTEC Credit Facility	$	—	$	—
ADAC-STRATTEC Credit Facility		13,000		13,000
	$	13,000	$	13,000

Schedule of Average Outstanding Borrowings and the Weighted Average Interest Rate

Average outstanding borrowings and the weighted average interest rate under each credit facility referenced above were as follows for each period presented (in thousands):


	Three Months Ended
	Average Outstanding Borrowings				Weighted Average Interest Rate
	September 29, 2024		October 1, 2023		September 29, 2024			October 1, 2023
STRATTEC Credit Facility	$	—	$	132	$	—			8.5	%
ADAC-STRATTEC Credit Facility	$	13,736	$	13,000		8.5	%		6.6	%

Investment in Majority Owned Subsidiary (Tables)

3 Months Ended

Sep. 30, 2024

Equity Method Investments and Joint Ventures [Abstract]

Summarize of Related Party Transaction

The following table summarizes these related party transactions for the periods indicated below (in thousands):


	Three Months Ended
	September 29, 2024		October 1, 2023
Engineering, research and design fee charged to ADAC-STRATTEC LLC	$	2,480	$	2,294
Sales to ADAC	$	2,325	$	2,834

Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 29, 2024	Oct. 01, 2023
Income Statement [Abstract]
Net sales	$ 139,052	$ 135,406
Cost of goods sold	120,131	116,686
Gross profit	18,921	18,720
Engineering, selling and administrative expenses	13,858	12,614
Income from operations	5,063	6,106
Equity loss from joint ventures	0	(265)
Interest expense	(295)	(220)
Investment income	349	87
Other income, net	129	134
Income before provision for income taxes and non-controlling interest	5,246	5,842
Provision for income taxes	1,498	1,387
Net income	3,748	4,455
Net income attributable to non-controlling interest	45	290
Net income attributable to STRATTEC SECURITY CORPORATION	3,703	4,165
Comprehensive income:
Net income	3,748	4,455
Pension and postretirement plans, net of tax	256	46
Currency translation adjustments	(2,760)	(649)
Other comprehensive loss, net of tax	(2,504)	(603)
Comprehensive income	1,244	3,852
Comprehensive (loss) income attributable to non-controlling interest	(1,044)	20
Comprehensive income attributable to STRATTEC SECURITY CORPORATION	$ 2,288	$ 3,832
Earnings per share attributable to STRATTEC SECURITY CORPORATION:
Basic	$ 0.92	$ 1.05
Diluted	$ 0.92	$ 1.05
Weighted Average shares outstanding:
Basic	4,005	3,948
Diluted	4,046	3,974

Accumulated Other Comprehensive Loss (Tables)

3 Months Ended

Sep. 29, 2024

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Summary of Changes in Accumulated Other Comprehensive Loss

The following tables summarize the changes in accumulated other comprehensive loss (“AOCL”) for each period presented (in thousands):


	Three Months Ended September 29, 2024
	Foreign Currency Translation Adjustments		Retirement and Postretirement Benefit Plans			Total
Balance, June 30, 2024	$	14,716	$	973		$	15,689
Other comprehensive loss before reclassifications		2,760		(283	)		2,477
Income tax		—		63			63
Net other comprehensive loss before reclassifications		2,760		(220	)		2,540
Reclassifications:
Unrecognized net loss (A)		—		(46	)		(46	)
Income tax		—		10			10
Net reclassifications		—		(36	)		(36	)
Other comprehensive loss		2,760		(256	)		2,504
Other comprehensive loss attributable to non- controlling interest		1,089		—			1,089
Balance, September 29, 2024	$	16,387	$	717		$	17,104


	Three Months Ended October 1, 2023
	Foreign Currency Translation Adjustments		Retirement and Postretirement Benefit Plans			Total
Balance, July 2, 2023	$	13,028	$	1,166		$	14,194
Other comprehensive loss before reclassifications		649		—			649
Net other comprehensive loss before reclassifications		649		—			649
Reclassifications:
Unrecognized net loss (A)		—		(60	)		(60	)
Income tax		—		14			14
Net reclassifications		—		(46	)		(46	)
Other comprehensive loss		649		(46	)		603
Other comprehensive loss attributable to non- controlling interest		270		—			270
Balance, October 1, 2023	$	13,407	$	1,120		$	14,527

Other Income, net (Tables)

9 Months Ended

Mar. 31, 2024

Other Income and Expenses [Abstract]

Summary of Other Income, net

The impact of these items for each of the periods presented was as follows (in thousands):


	Three Months Ended
	September 29, 2024			October 1, 2023
Foreign currency transaction gain	$	1,005		$	226
Realized and unrealized loss on peso forward contracts, net		(735	)		—
Pension and postretirement plans cost		(363	)		(99	)
Rabbi Trust gain		96			(42	)
Other		126			49
	$	129		$	134

Income Taxes (Details Textual)	3 Months Ended
Income Taxes (Details Textual)	Sep. 29, 2024	Oct. 01, 2023
Income Tax [Line Items]
Effective income tax rate	28.60%	23.70%

Revenue from Contracts with Customers - Revenue by Customer or Customer Group (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 29, 2024	Oct. 01, 2023
Entity Wide Revenue Major Customer [Line Items]
Revenue	$ 139,052	$ 135,406
General Motors Company
Entity Wide Revenue Major Customer [Line Items]
Revenue	42,160	40,505
Ford Motor Company
Entity Wide Revenue Major Customer [Line Items]
Revenue	32,137	26,909
Stellantis
Entity Wide Revenue Major Customer [Line Items]
Revenue	12,765	27,297
Tier 1 Customers
Entity Wide Revenue Major Customer [Line Items]
Revenue	20,082	18,122
Commercial and Other OEM Customers
Entity Wide Revenue Major Customer [Line Items]
Revenue	17,055	14,197
Hyundai / Kia
Entity Wide Revenue Major Customer [Line Items]
Revenue	$ 14,853	$ 8,376

- Definition

+ References

+ Details

Derivative Instruments

3 Months Ended

Sep. 29, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

NOTE 6. DERIVATIVE INSTRUMENTS

We own and operate manufacturing operations in Mexico. As a result, a portion of our manufacturing costs are incurred in Mexican pesos, which causes our earnings and cash flows to fluctuate due to changes in the U.S. dollar/Mexican peso exchange rate. During fiscal 2025, we entered into contracts with Bank of Montreal that provides for monthly Mexican peso currency forward contracts for a portion of our estimated peso denominated operating costs during the period September 2024 through August 2025. During fiscal 2024, we had contracts with Bank of Montreal that provided for monthly Mexican peso currency forward contracts for a portion of our estimated peso denominated operating costs during the period January 2024 through June 2024. Our objective in entering into currency forward contracts is to minimize our earnings volatility resulting from changes in exchange rates affecting the U.S. dollar cost of our Mexican operations. The Mexican peso forward contracts are not used for speculative purposes and are not designated as hedges. As a result, all currency forward contracts are recognized in our accompanying condensed consolidated financial statements at fair value and changes in the fair value are reported in current earnings as part of Other Income, net.

The following table quantifies the outstanding Mexican peso forward contracts as of September 29, 2024 (thousands of dollars, except with respect to the average forward contractual exchange rate):


	Effective Dates	Notional Amount		Average Forward Contractual Exchange Rate		Fair Value
Buy MXP/Sell USD	October 15, 2024 − August 18, 2025	$	31,000		19.77	$	(652	)

The fair market value of all outstanding Mexican peso forward contracts in the accompanying Condensed Consolidated Balance Sheets as of the dates specified was as follows (thousands of dollars):


	September 29, 2024			June 30, 2024
Not designated as hedging instruments:
Other current liabilities:
Mexican peso forward contracts	$	(652	)	$	—


	Three Months Ended
	September 29, 2024			October 1, 2023
Not designated as hedging instruments:
Realized and unrealized loss, net	$	(735	)	$	—

Investment in Joint Ventures and Majority Owned Subsidiaries - Summarize of Related Party Transaction (Details) - ADAC-STRATTEC LLC - ADAC - USD ($) $ in Thousands	3 Months Ended
	Sep. 29, 2024	Oct. 01, 2023
Related Party Transaction [Line Items]
Engineering, research and design fee	$ 2,480	$ 2,294
Related Party
Related Party Transaction [Line Items]
Revenue from related parties	$ 2,325	$ 2,834

- Definition

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

+ References

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+ Details

Leases - Schedule of Weighted Average Lease Term and Discount Rate for Operating Lease (Details)	Sep. 29, 2024
Leases [Abstract]
Weighted average remaining lease term (in years)	4 years 2 months 12 days
Weighted average discount rate	6.20%

Stock-Based Compensation

3 Months Ended

Sep. 29, 2024

Share-Based Payment Arrangement [Abstract]

Stock-based Compensation

NOTE 19. STOCK-BASED COMPENSATION

We maintain an omnibus stock incentive plan. This plan provides for the granting of stock options, shares of restricted stock and stock appreciation rights. As of September 29, 2024, the Board of Directors had designated 2,250,000 shares of common stock available for the grant of awards under the plan. Remaining shares available to be granted under the plan as of September 29, 2024 were 336,730. Awards that expire or are canceled without delivery of shares become available for re-issuance under the plan. We issue new shares of common stock to satisfy stock option exercises.

Nonqualified and incentive stock options and shares of restricted stock have been granted to our officers, outside directors and specified associates under our stock incentive plan. No stock options are outstanding under the plan as of September 29, 2024. Shares of restricted stock granted under the plan are subject to vesting criteria determined by the Compensation Committee at the time the shares are granted and have a minimum vesting period of one year from the date of grant. Unvested restricted shares granted have voting rights, regardless of whether the shares are vested or unvested, but only have the right to receive cash dividends after such shares become vested. Restricted stock grants vest 1 to 3 years after the date of grant as determined by the Compensation Committee.

A summary of stock option activity under our stock incentive plan for the three-month period ended September 29, 2024 follows:


	Shares			Weighted Average Exercise Price
Balance, June 30, 2024		8,070		$	79.73
Expired		(8,070	)	$	79.73
Balance, September 29, 2024		—

A summary of restricted stock activity under our stock incentive plan for the three-month period ended September 29, 2024 follows:


	Shares			Weighted Average Grant Date Fair Value
Nonvested Balance, June 30, 2024		79,325		$	27.21
Granted		34,800		$	38.83
Vested		(37,200	)	$	30.20
Forfeited		(2,375	)	$	30.65
Nonvested Balance, September 29, 2024		74,550		$	31.03

As of September 29, 2024, there was approximately $1.7 million of total unrecognized compensation cost related to unvested restricted stock grants outstanding under the plan. This cost is expected to be recognized over a remaining weighted average period of 1.2 years. Total unrecognized compensation cost will be adjusted for any future changes in estimated and actual forfeitures of awards granted under our omnibus stock incentive plan.

Warranty (Tables)

3 Months Ended

Sep. 29, 2024

Guarantees and Product Warranties [Abstract]

Changes in Warranty Reserve

Changes in the warranty reserve for the three-month periods ended September 29, 2024 and October 1, 2023 were as follows (in thousands):


	Three Months Ended
	September 29, 2024			October 1, 2023
Balance, beginning of period	$	10,695		$	9,725
Provision Charged to expense		387			14
Payments		(384	)		(122	)
Balance, end of period	$	10,698		$	9,617

Earnings Per Share (Tables)

3 Months Ended

Sep. 29, 2024

Earnings Per Share [Abstract]

Reconciliation of the Components of Basic and Diluted Per Share

A reconciliation of the components of the basic and diluted per-share computations follows (in thousands, except per share amounts):


	Three Months Ended
	September 29, 2024						October 1, 2023
	Net Income		Shares		Per-Share Amount		Net Loss		Shares		Per-Share Amount
Basic earnings per share	$	3,703		4,005	$	0.92	$	4,165		3,948	$	1.05
Stock option and restricted stock awards		—		41				—		26
Diluted earnings per share	$	3,703		4,046	$	0.92	$	4,165		3,974	$	1.05

Description of Business and Basis of Presentation

3 Months Ended

Sep. 29, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business and Basis of Presentation

NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

STRATTEC SECURITY CORPORATION (“STRATTEC”), headquartered in Milwaukee, Wisconsin, is a leading global provider of advanced automotive access, security, and select user interface solutions. Products include power access solutions such as automated lift gates and power doors, door handles, engineered latches, key fobs, advanced security systems, steering wheel controls, and electronic shifters. The majority of our sales are to the three largest automobile original equipment manufacturers (“OEMs”) in North America while we serve all major automotive OEMs globally.

STRATTEC’s condensed consolidated financial statements include our wholly owned subsidiaries STRATTEC de Mexico and STRATTEC POWER ACCESS LLC (“SPA”), and our majority owned subsidiary, ADAC-STRATTEC, LLC. We have one reporting segment.

In the opinion of management, the accompanying condensed consolidated balance sheets as of September 29, 2024 and June 30, 2024, which have been derived from our audited financial statements, and the related unaudited interim condensed consolidated financial statements included herein contain all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and in accordance with Rule 10-01 of Regulation S-X. All significant intercompany transactions have been eliminated.

STRATTEC’s results of operations and cash flows for the three months ended September 29, 2024 are not necessarily indicative of the results that may be expected for the current fiscal year, which ends June 29, 2025 (“fiscal 2025”). The information included in this Form 10-Q should be read in conjunction with the financial statements and notes thereto included in our Annual Report.

Stock-Based Compensation - Summary of Restricted Stock Activity Under Our Stock Incentive Plan (Details) - Restricted stock	3 Months Ended
	Sep. 29, 2024 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Nonvested, Shares Beginning Balance \| shares	79,325
Granted, Shares \| shares	34,800
Vested, Shares \| shares	(37,200)
Forfeited, Shares \| shares	(2,375)
Nonvested, Shares Ending Balance \| shares	74,550
Nonvested, Weighted Average Grant Date Fair Value Beginning Balance \| $ / shares	$ 27.21
Granted, Weighted Average Grant Date Fair Value \| $ / shares	38.83
Vested, Weighted Average Grant Date Fair Value \| $ / shares	30.2
Forfeited, Weighted Average Grant Date Fair Value \| $ / shares	30.65
Nonvested, Weighted Average Grant Date Fair Value Ending Balance \| $ / shares	$ 31.03

Credit Facilities - Schedule of Average Outstanding Borrowings and the Weighted Average Interest Rate (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 29, 2024	Oct. 01, 2023
STRATTEC Credit Facility
Line Of Credit Facility [Line Items]
Average Outstanding Borrowings		$ 132
Weighted Average Interest Rate		8.50%
ADAC-STRATTEC Credit Facility
Line Of Credit Facility [Line Items]
Average Outstanding Borrowings	$ 13,736	$ 13,000
Weighted Average Interest Rate	8.50%	6.60%

Accumulated Other Comprehensive Loss - Summary of Changes in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 29, 2024	Oct. 01, 2023
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	$ (225,615)	$ (211,024)
Reclassifications:
Other comprehensive loss	2,504	603
Ending Balance	(227,060)	(215,301)
Accumulated Foreign Currency Adjustment Including Portion Attributable to Noncontrolling Interest
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	14,716	13,028
Other comprehensive loss before reclassifications	2,760	649
Net other comprehensive loss before reclassifications	2,760	649
Reclassifications:
Other comprehensive loss	2,760	649
Other comprehensive loss attributable to non-controlling interest	1,089	270
Ending Balance	16,387	13,407
Retirement and Postretirement Benefit Plans
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	973	1,166
Other comprehensive loss before reclassifications	(283)
Income Tax	63
Net other comprehensive loss before reclassifications	(220)
Reclassifications:
Unrecognized net loss	(46)	(60)
Reclassifications, Income tax	10	14
Net reclassifications	(36)	(46)
Other comprehensive loss	(256)	(46)
Ending Balance	717	1,120
Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	15,689	14,194
Other comprehensive loss before reclassifications	2,477	649
Income Tax	63
Net other comprehensive loss before reclassifications	2,540	649
Reclassifications:
Unrecognized net loss	(46)	(60)
Reclassifications, Income tax	10	14
Net reclassifications	(36)	(46)
Other comprehensive loss	2,504	603
Other comprehensive loss attributable to non-controlling interest	1,089	270
Ending Balance	$ 17,104	$ 14,527

Earnings Per Share (Details Textual) - shares	3 Months Ended
Earnings Per Share (Details Textual) - shares	Sep. 29, 2024	Oct. 01, 2023
Stock Options
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from earnings per share computation	0	51,970

Earnings Per Share

3 Months Ended

Sep. 29, 2024

Earnings Per Share [Abstract]

Earnings Per Share

NOTE 18. EARNINGS PER SHARE

Basic earnings per share is computed on the basis of the weighted average number of shares of common stock outstanding during the applicable period. Diluted earnings per share is computed on the basis of the weighted average number of shares of common stock plus the potential dilutive common shares outstanding during the applicable period using the treasury stock method. Potential dilutive common shares include outstanding stock options and unvested restricted stock awards.

A reconciliation of the components of the basic and diluted per-share computations follows (in thousands, except per share amounts):


	Three Months Ended
	September 29, 2024						October 1, 2023
	Net Income		Shares		Per-Share Amount		Net Loss		Shares		Per-Share Amount
Basic earnings per share	$	3,703		4,005	$	0.92	$	4,165		3,948	$	1.05
Stock option and restricted stock awards		—		41				—		26
Diluted earnings per share	$	3,703		4,046	$	0.92	$	4,165		3,974	$	1.05

No share-based payment awards were excluded from the calculation of earnings per share as of September 29, 2024. The calculation of earnings per share excluded 51,970 share-based payment awards as of October 1, 2023 because their inclusion would have been anti-dilutive.

Pension and Postretirement Benefits (Details Textual) - USD ($)	3 Months Ended
	Sep. 29, 2024	Jun. 30, 2024
Defined Benefit Plan Disclosure [Line Items]
Postretirement plan annual benefit limit for future eligible retirees	$ 4,000
Other postretirement benefits maximum benefit period	5 years
Postretirement death benefit	$ 8,000
Other Long-Term Assets
Defined Benefit Plan Disclosure [Line Items]
Rabbi Trust Assets - SERP	$ 1,700,000	$ 1,600,000
Supplemental Employee Retirement Plan, Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Percentage of participant's base salary received as Supplemental Retirement Benefits	8.00%
Vesting period, SERP	5 years
Cash settled	$ 1,200,000
Settlement charge pre tax	$ 283,000

Credit Facilities

3 Months Ended

Sep. 29, 2024

Debt Disclosure [Abstract]

Credit Facilities

NOTE 12. CREDIT FACILITIES

STRATTEC has a $40 million secured revolving credit facility (the “STRATTEC Credit Facility”) with BMO Harris Bank N.A. ADAC-STRATTEC LLC has a $20 million secured revolving credit facility (the “ADAC-STRATTEC Credit Facility”) with BMO Harris Bank N.A., which is guaranteed by STRATTEC. The ADAC-STRATTEC Credit Facility borrowing limit decreases to $18 million on August 1, 2025. The credit facilities both expire August 1, 2026. Borrowings under either credit facility are secured by our U.S. cash balances, accounts receivable, inventory, and fixed assets located in the U.S. Interest on borrowings under the STRATTEC Credit Facility were at varying rates based, at our option, on the bank's prime rate or SOFR plus 1.35 percent prior to September 5, 2023 and SOFR plus 1.85 percent subsequent to September 5, 2023. Interest on borrowings under the ADAC-STRATTEC Credit Facility were at varying rates based, at our option, on the bank's prime rate with no interest rate margin through May 30, 2024 and a 2 percent interest rate margin subsequent to May 30, 2024 or SOFR plus 1.35 percent prior to May 30, 2024 and SOFR plus 3.10 percent subsequent to May 30, 2024. Both credit facilities contain a restrictive financial covenant that requires the applicable borrower to maintain a minimum net worth level. The ADAC-STRATTEC Credit Facility includes an additional restrictive financial covenant that requires the maintenance of a minimum fixed charge coverage ratio. As of September 29, 2024, we were in compliance with all financial covenants required by these credit facilities.

Outstanding borrowings under the credit facilities were as follows (in thousands):


	September 29, 2024		June 30, 2024
STRATTEC Credit Facility	$	—	$	—
ADAC-STRATTEC Credit Facility		13,000		13,000
	$	13,000	$	13,000

Average outstanding borrowings and the weighted average interest rate under each credit facility referenced above were as follows for each period presented (in thousands):


	Three Months Ended
	Average Outstanding Borrowings				Weighted Average Interest Rate
	September 29, 2024		October 1, 2023		September 29, 2024			October 1, 2023
STRATTEC Credit Facility	$	—	$	132	$	—			8.5	%
ADAC-STRATTEC Credit Facility	$	13,736	$	13,000		8.5	%		6.6	%

Summary of Significant Accounting Policies (Policies)	3 Months Ended
Summary of Significant Accounting Policies (Policies)	Sep. 29, 2024
Accounting Policies [Abstract]
Use of Estimates	Use of Estimates These changing conditions may also affect the estimates and assumptions made by our management in our financial statements. Such estimates and assumptions affect, among other things, our long-lived asset valuations, assessment of our annual effective tax rate, valuation of deferred income taxes, assessment of excess and obsolete inventory reserves, and assessment of collectability of trade receivables.
Recently Adopted and Recently Issued Accounting Standards	Recently Adopted and Recently Issued Accounting Standards In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures. The update enhances annual and interim reportable segment disclosures primarily by requiring disclosures about significant reportable segment expenses and provides new segment disclosure requirements for entities with a single reportable segment. ASU 2023-07 is effective for public business entities for fiscal years beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. This update is to be applied retrospectively to all periods presented in the financial statements. Annual reporting under this update becomes effective for our 2025 fiscal year. Interim reporting under this update becomes effective for us in our fiscal 2026. We are assessing the impact of this standard and expect that any impact would be limited to the addition of single reportable segment disclosure with segment expense disclosures in the footnotes to our consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures. The update requires greater disaggregation of income tax disclosures related to the income tax rate reconciliation and income taxes paid. ASU 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024, with early adoption permitted. This update is to be applied on a prospective basis. Retrospective application is permitted. Annual reporting under this update becomes effective for us in our fiscal 2026. We are currently assessing the required disclosure impacts of this update.

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Sep. 29, 2024	Oct. 01, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 3,748	$ 4,455
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation	3,662	4,385
Foreign currency transaction gain	(1,005)	(226)
Unrealized loss on peso forward contracts	652	0
Stock-based compensation expense	188	505
Equity loss of joint ventures	0	265
Loss on settlement of pension obligation	283	0
Change in operating assets and liabilities:
Receivables	(3,189)	2,333
Inventories	(2,145)	(3,770)
Other assets	5,881	(7,665)
Accounts payable and accrued liabilities	2,998	(4,054)
Other, net	264	(100)
Net cash provided by (used in) operating activities	11,337	(3,872)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of interest in joint ventures	0	2,000
Purchase of property, plant and equipment	(2,073)	(2,920)
Net cash used in investing activities	(2,073)	(920)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under credit facilities	3,000	2,000
Repayment of borrowings under credit facilities	(3,000)	(2,000)
Exercise of stock options and employee stock purchases	13	17
Net cash provided by financing activities	13	17
Foreign currency impact on cash	(284)	(131)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	8,993	(4,906)
CASH AND CASH EQUIVALENTS
Beginning of period	25,410	20,571
End of period	34,403	15,665
Cash paid during the period for:
Income taxes	4,081	764
Interest	280	218
Non-cash investing activities:
Change in capital expenditures in accounts payable	$ (506)	$ (193)

Revenue from Contracts with Customers

3 Months Ended

Sep. 29, 2024

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

NOTE 3. REVENUE FROM CONTRACTS WITH CUSTOMERS

We generate revenue from the production of parts sold to OEMs, or Tier 1 suppliers at the direction of the OEM, under long-term supply agreements supporting new vehicle production. Such agreements also require related production of service parts subsequent to the initial vehicle production periods. Additionally, we generate revenue from the production of parts sold in aftermarket service channels and to non-automotive commercial customers.

Contract Balances

We have no material contract assets or contract liabilities as of September 29, 2024 or June 30, 2024.

Revenue by Product Group and Customer

Revenue by product group for the periods presented was as follows (thousands of dollars):


	Three Months Ended
	September 29, 2024		October 1, 2023
Door handles & exterior trim	$	35,430	$	32,768
Power access		34,779		32,651
Keys & locksets		23,022		30,295
Latches		19,111		15,552
User interface controls		13,839		10,597
Aftermarket & OE service		10,063		10,905
Other		2,808		2,638
	$	139,052	$	135,406

Revenue by customer or customer group for the periods presented was as follows (thousands of dollars):


	Three Months Ended
	September 29, 2024		October 1, 2023
General Motors Company	$	42,160	$	40,505
Ford Motor Company		32,137		26,909
Stellantis		12,765		27,297
Tier 1 Customers		20,082		18,122
Commercial and Other OEM Customers		17,055		14,197
Hyundai / Kia		14,853		8,376
	$	139,052	$	135,406

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-15

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (a)
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-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 12
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-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Section 50
-Paragraph 12
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-Topic 606
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-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-13

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org/606/tableOfContent

+ Details

Property, Plant and Equipment

3 Months Ended

Sep. 29, 2024

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

NOTE 10. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following as of September 29, 2024 and October 1, 2023 (in thousands):


	September 29, 2024			June 30, 2024
Land and improvements	$	6,384		$	6,697
Buildings and improvements		38,254			39,927
Machinery and equipment		231,912			258,622
		276,550			305,246
Less: accumulated depreciation		(194,029	)		(219,062	)
	$	82,521		$	86,184

Pre-Production Costs

3 Months Ended

Sep. 29, 2024

Pre-production Costs [Abstarct]

Pre-Production Costs

NOTE 4. PRE-PRODUCTION COSTS

We incur customer-owned tooling and engineering development pre-production costs related to the products we produce for our customers. Pre-production costs for which reimbursement is contractually guaranteed by the customer are accumulated on the balance sheet and are then billed to the customer upon formal acceptance by the customer of products produced with the individual tools or upon customer approval of the completed engineering development. To the extent that the costs exceed expected reimbursement from the customer, we recognized expense. Costs for tooling that STRATTEC owns are capitalized as equipment costs and depreciated over the estimated useful lives of the tools.