SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
__________________
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of
Report (Date of earliest event reported): July 29,
2008
|
STRATTEC
SECURITY CORPORATION
|
|
(Exact
name of registrant as specified in its
charter)
|
|
Wisconsin
|
|
(State
or other jurisdiction of
incorporation)
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0-25150
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39-1804239
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|
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(Commission
File Number)
|
(I.R.S.
Employer I.D. Number)
|
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3333
West Good Hope Road
Milwaukee,
WI
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53209
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(414)
247-3333
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(Registrant's
telephone number; including area
code)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General
Instruction A.2. below):
o
Written communications pursuant to Rule 425 under the Securities Act
(17
CFR
230.425
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act(17
CFR
240.14a-12)
o
Pre-commencement
communications pursuant to Rule 14d-2(b) under
the Exchange
Act (17 CFR 240.14d-2(b))
o
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Section
2 – Financial Information
Item
2.02.
Results
of
Operations and Financial Condition.
On
July 29, 2008,
STRATTEC SECURITY CORPORATION issued a
press release (the "Press Release") announcing results for the fiscal
fourth quarter
and
fiscal year ended June 29,
2008. A copy of
the Press Release is attached as Exhibit 99.1 to this
report. The attached Exhibit 99.1 is furnished pursuant to Item 2.02
of Form 8-K.
The
information in this Form 8-K and the Exhibit attached hereto shall not be deemed
"filed" for purposes of Section 18 of the Securities Exchange Act of 1934,
nor
shall it be deemed incorporated by reference in any filing under the Securities
Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly
set forth by specific reference in such filing.
Section
9 - Financial Statements and Exhibits
Item
9.01. Financial
Statements and
Exhibits.
(d) Exhibits
99.1 -- Press Release of STRATTEC SECURITY CORPORATION, issued July 29,
2008.
2
SIGNATURE
Pursuant
to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report
to
be signed on its behalf by the undersigned thereunto duly
authorized.
STRATTEC
SECURITY CORPORATION
Date: August
1, 2008
BY /s/ Patrick
J.
Hansen
Patrick
J. Hansen, Senior Vice President
and
Chief
Financial Officer
3
EXHIBIT
99.1
FOR
RELEASE AT 3:00 PM CDT
Contact: Pat
Hansen
Senior
Vice President and
Chief
Financial Officer
414-247-3435
www.strattec.com
STRATTEC
SECURITY CORPORATION
REPORTS
FISCAL FOURTH QUARTER RESULTS
Milwaukee,
Wisconsin – July 29, 2008 -- STRATTEC SECURITY CORPORATION (NASDAQ:STRT) today
reported operating results for the fiscal fourth quarter ended June 29,
2008.
Net
sales
for the Company’s fourth quarter ended June 29, 2008 were $38.6 million,
compared to net sales of $46.1 million for the prior year quarter ended July
1,
2007. Net loss for the period was $921,000, compared to net income of
$3.4 million in the prior year quarter. Diluted loss per share for
the period was $.27 compared to diluted earnings per share of $.97 in the prior
year quarter. The lower sales and net loss for the quarter primarily
resulted from two factors; a 12-week strike against a major supplier to General
Motors, and a dramatic shift in vehicle demand by consumers. The
strike, which occurred over the last 4 weeks of our third quarter and 8 weeks
of
the fourth quarter, affected GM’s production,
resulting in the temporary closure of several vehicle plants we
supply. These are normally high-volume production
plants. Most of these plants have been producing large pick-up trucks
and SUVs. During the quarter, gasoline prices reached, and then
exceeded $4.00/gallon, significantly accelerating a shift in consumer
preferences away from larger vehicles. The resulting glut of large
vehicles at retail has caused all of our major customers to re-align their
production schedules and mix, emphasizing smaller vehicles. The
volume of vehicles produced by our customers during this re-alignment has
declined, resulting in our lower sales and production. While the
effect of the strike was a one-time event, we believe the re-alignment of
production to reflect changing consumer preferences is a long-term
issue. With this outlook for the industry, and the overall weakness
in the US economy, we expect to experience reduced sales levels and operating
results for our traditional business over the next fiscal year.
For
the
fiscal year ended June 29, 2008, net sales were $159.6 million compared to
net
sales of $167.7 million in the prior year period. Net income was $3.3
million compared to $8.2 million and diluted earnings per share were $.94
compared to $2.30 in the prior year.
Sales
to
STRATTEC’s largest customers overall decreased in the current quarter compared
to the prior year quarter levels. Sales to Chrysler LLC were $9.9
million in the current quarter compared to $15.4 million in the prior year
quarter due to a combination of lower vehicle production volume and reduced
component content in the products we supply. Sales to General Motors
Corporation were $10.4 million compared to $10.9 million due to higher product
content on certain GM vehicles and takeover of certain passenger car lockset
production from another supplier, offset by lower vehicle production volumes
for
trucks and SUV’s. Sales to Delphi Corporation were $3.3 million
compared to $4.9 million
due primarily to lower production volumes. Sales to Ford Motor
Company were $4.5 million compared to $6.4 million due to lower Ford vehicle
production volumes.
Gross
profit margins were 10.3 percent in the current quarter compared to 17.0 percent
in the prior year quarter. The lower gross profit margin in the
current year quarter compared to the prior year quarter were primarily the
result of our customers’ reduced vehicle production volumes which lowered
overhead absorption of our manufacturing costs. Also impacting the
current quarter were two unusual items: A lump sum bonus paid to the
Company’s Milwaukee represented hourly workers resulting from a new 4-year labor
contract ratified on June 22, 2008; and the disposal of a customer-specific
fixed asset that is no longer in service. Together these two unusual
items increased the diluted loss per share by $.11.
Operating
expenses were $6.2 million in the current quarter, compared to $5.3 million
in
the prior year quarter. The increased spending is attributed to the
hiring of additional engineers to support new product development and customer
programs that are currently under launch.
Provision
for income taxes in both the current and previous year quarters were not our
normal effective income tax rate of 37%. Both the current year
and prior year quarter included a favorable adjustment primarily relating to
foreign taxes that positively impacted diluted earnings per share by $.16 and
$.31, respectively.
During
the fourth quarter, the Company contributed $1.0 million to its Pension Fund
and
repurchased 20,328 STRATTEC SECURITY CORPORATION shares under the Company’s
stock repurchase program
at a cost of $776,000. For the year ended June 29, 2008, a total of
76,633 shares were repurchased at a cost of $3,109,000.
As
previously announced on May 27, 2008, STRATTEC SECURITY CORPORATION, in
combination with WITTE Automotive of Velbert, Germany, and Vehicle Access
Systems Technology LLC (VAST), a joint venture between STRATTEC, WITTE and
ADAC
Automotive of Grand Rapids, Michigan, has reached a definitive agreement to
acquire certain assets, primarily equipment and inventory, and assume certain
employee liabilities of Delphi Corporation’s Power Products
business. STRATTEC will acquire the North American portion of
Delphi’s Power Products business and expects to complete the acquisition before
the end of calendar year 2008.
STRATTEC
designs, develops, manufactures and markets mechanical locks and keys,
electronically enhanced locks and keys, steering column and instrument panel
ignition lock housings, latches and related access control products for North
American automotive customers, and for global automotive manufacturers through
the VAST Alliance in which it participates with WITTE Automotive of Velbert,
Germany and ADAC Automotive of Grand Rapids, Michigan. The Company’s
history in the automotive business spans 100 years.
2
Certain
statements contained in this release contain “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of 1995. These
statements may be identified by the use of forward-looking words or phrases
such
as “anticipate,” “believe,” “could,” “expect,” “intend,” “may,” “planned,”
“potential,” “should,” “will,” and “would.” Such
forward-looking statements in this
release are inherently subject to many uncertainties in the Company’s operations
and business environment. These uncertainties include general
economic conditions, in particular, relating to the automotive industry,
consumer demand for the Company’s and its customers’ products, competitive and
technological developments, customer purchasing actions, foreign currency
fluctuations, and costs of operations. Shareholders, potential
investors and other readers are urged to consider these factors carefully in
evaluating the forward-looking statements and are cautioned not to place undue
reliance on such forward-looking statements. The forward-looking
statements made herein are only made as of the date of this press release and
the Company undertakes no obligation to publicly update such forward-looking
statements to reflect subsequent events or circumstances occurring after the
date of this release. In addition, such uncertainties and other
operational matters are discussed further in the Company’s quarterly and annual
filings with the Securities and Exchange Commission.
3
STRATTEC
SECURITY
CORPORATION
Results
of Operations
(In
Thousands except per share amounts)
|
Fourth
Quarter Ended
|
Years
Ended
|
|||||||||||||||
|
June
29, 2008
|
July
1, 2007
|
June
29, 2008
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July
1, 2007
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|||||||||||||
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(Unaudited)
|
(Unaudited)
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|||||||||||||||
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Net
Sales
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$ | 38,567 | $ | 46,097 | $ | 159,642 | $ | 167,707 | ||||||||
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Cost
of Goods Sold
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34,583 | 38,279 | 134,091 | 141,213 | ||||||||||||
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Gross
Profit
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3,984 | 7,818 | 25,551 | 26,494 | ||||||||||||
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Engineering,
Selling &
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||||||||||||||||
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Administrative
Expenses
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6,222 | 5,307 | 23,962 | 20,189 | ||||||||||||
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Income
(Loss) from Operations
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(2,238 | ) | 2,511 | 1,589 | 6,305 | |||||||||||
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Interest
Income
|
405 | 905 | 2,749 | 3,611 | ||||||||||||
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Interest
Expense
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- | - | - | - | ||||||||||||
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Other
Income (Expense), Net
|
(178 | ) | 225 | 230 | 715 | |||||||||||
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Minority
Interest
|
(146 | ) | 50 | (76 | ) | 75 | ||||||||||
| (2,157 | ) | 3,691 | 4,492 | 10,706 | ||||||||||||
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Provision
(Benefit) for Income
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||||||||||||||||
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Taxes
|
(1,236 | ) | 257 | 1,225 | 2,523 | |||||||||||
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Net
Income (Loss)
|
$ | (921 | ) | $ | 3,434 | $ | 3,267 | $ | 8,183 | |||||||
|
Earnings
(Loss) Per Share:
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||||||||||||||||
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Basic
|
$ | (0.27 | ) | $ | .97 | $ | 0.94 | $ | 2.30 | |||||||
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Diluted
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$ | (0.27 | ) | $ | .97 | $ | 0.94 | $ | 2.30 | |||||||
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Average
Basic
|
||||||||||||||||
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Shares
Outstanding
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3,449 | 3,536 | 3,487 | 3,552 | ||||||||||||
|
Average
Diluted
|
||||||||||||||||
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Shares
Outstanding
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3,457 | 3,539 | 3,494 | 3,555 | ||||||||||||
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Other
|
||||||||||||||||
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Capital
Expenditures
|
$ | 2,443 | $ | 2,103 | $ | 10,930 | $ | 5,748 | ||||||||
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Depreciation
& Amortization
|
$ | 1,669 | $ | 1,772 | $ | 6,830 | $ | 6,988 | ||||||||
4
STRATTEC
SECURITY
CORPORATION
Condensed
Balance Sheet Data
(In
Thousands)
|
June
29, 2008
|
July
1, 2007
|
|||||||
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(Unaudited)
|
||||||||
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ASSETS
|
||||||||
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Current
Assets:
|
||||||||
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Cash
and cash equivalents
|
$ | 51,501 | $ | 65,491 | ||||
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Receivables,
net
|
23,518 | 26,890 | ||||||
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Inventories
|
10,269 | 7,166 | ||||||
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Other
current assets
|
17,978 | 13,017 | ||||||
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Total
Current Assets
|
103,266 | 112,564 | ||||||
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Deferred
Income Taxes
|
3,684 | 2,117 | ||||||
|
Investment
in Joint Venture
|
3,642 | 2,813 | ||||||
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Prepaid
Pension Cost
|
758 | 4,385 | ||||||
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Other
Long Term Assets
|
27 | 41 | ||||||
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Property,
Plant and Equipment, Net
|
30,336 | 26,526 | ||||||
| $ | 141,713 | $ | 148,446 | |||||
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LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
||||||||
|
Current
Liabilities:
|
||||||||
|
Accounts
Payable
|
$ | 15,974 | $ | 16,575 | ||||
|
Other
|
16,965 | 14,906 | ||||||
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Total
Current Liabilities
|
32,939 | 31,481 | ||||||
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Borrowings
Under Line of Credit Facility
|
- | - | ||||||
|
Accrued
Pension and Post Retirement Obligations
|
12,389 | 13,431 | ||||||
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Minority
Interest
|
953 | 574 | ||||||
|
Shareholders’
Equity
|
242,843 | 244,119 | ||||||
|
Accumulated
Other Comprehensive Loss
|
(17,495 | ) | (14,341 | ) | ||||
|
Less: Treasury
Stock
|
(129,916 | ) | (126,818 | ) | ||||
|
Total
Shareholders’ Equity
|
95,432 | 102,960 | ||||||
| $ | 141,713 | $ | 148,446 | |||||
5
STRATTEC
SECURITY
CORPORATION
Condensed
Cash Flow Statement Data
(In
Thousands)
|
Fourth
Quarter
Ended
|
Years
Ended
|
|||||||||||||||
|
June
29, 2008
|
July
1, 2007
|
June
29, 2008
|
July
1, 2007
|
|||||||||||||
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
|
Cash
Flows from Operating Activities:
|
||||||||||||||||
|
Net
Income (Loss)
|
$ | (921 | ) | $ | 3,434 | $ | 3,267 | $ | 8,183 | |||||||
|
Adjustment
to Reconcile Net Income (Loss) to
|
||||||||||||||||
|
Cash
Used in Operating Activities:
|
||||||||||||||||
|
Minority
Interest
|
136 | (50 | ) | 25 | (75 | ) | ||||||||||
|
Depreciation
and Amortization
|
1,669 | 1,772 | 6,830 | 6,988 | ||||||||||||
|
Deferred
Income Taxes
|
920 | (359 | ) | 920 | (359 | ) | ||||||||||
|
Stock
Based Compensation Expense
|
125 | 172 | 741 | 738 | ||||||||||||
|
Tax
Benefit from Options Exercised
|
- | 10 | - | 23 | ||||||||||||
|
Change
in Operating Assets/Liabilities
|
(6,290 | ) | 685 | (7,888 | ) | (5,609 | ) | |||||||||
|
Other,
net
|
215 | (50 | ) | (142 | ) | (95 | ) | |||||||||
|
Net
Cash (Used) Provided in Operating Activities
|
(4,146 | ) | 5,614 | 3,753 | 9,794 | |||||||||||
|
Cash
Flows from Investing Activities:
|
||||||||||||||||
|
Investment
in Joint Ventures
|
- | - | - | (100 | ) | |||||||||||
|
Additions
to Property, Plant and Equipment
|
(2,443 | ) | (2,103 | ) | (10,930 | ) | (5,748 | ) | ||||||||
|
Proceeds
from Sale of Property, Plant and Equipment
|
- | - | - | 21 | ||||||||||||
|
Net
Cash Used in Investing Activities
|
(2,443 | ) | (2,103 | ) | (10,930 | ) | (5,827 | ) | ||||||||
|
Cash
Flow from Financing Activities:
|
||||||||||||||||
|
Purchase
of Common Stock
|
(775 | ) | (1,153 | ) | (3,109 | ) | (5,075 | ) | ||||||||
|
Dividends
Paid
|
(524 | ) | - | (5,133 | ) | - | ||||||||||
|
Loan
from Minority Interest
|
250 | - | 1,050 | - | ||||||||||||
|
Contribution
from Minority Interest
|
- | 375 | 349 | 649 | ||||||||||||
|
Exercise
of Stock Options and Employee Stock Purchases
|
9 | 139 | 30 | 238 | ||||||||||||
|
Net
Cash Used in Financing Activities
|
(1,040 | ) | (639 | ) | (6,813 | ) | (4,188 | ) | ||||||||
|
Net
(Decrease) Increase in Cash & Cash Equivalents
|
(7,629 | ) | 2,872 | (13,990 | ) | (221 | ) | |||||||||
|
Cash
and Cash Equivalents:
|
||||||||||||||||
|
Beginning
of Period
|
59,130 | 62,619 | 65,491 | 65,712 | ||||||||||||
|
End
of Period
|
$ | 51,501 | $ | 65,491 | $ | 51,501 | $ | 65,491 | ||||||||
6