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): October 22,
2009
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STRATTEC
SECURITY CORPORATION
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(Exact
name of registrant as specified in its
charter)
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Wisconsin
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(State
or other jurisdiction of
incorporation)
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0-25150
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39-1804239
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(Commission
File Number)
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(I.R.S.
Employer I.D. Number)
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3333
West Good Hope Road
Milwaukee,
WI
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53209
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(414)
247-3333
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(Registrant's
telephone number; including area
code)
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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
October 22, 2009, STRATTEC SECURITY CORPORATION issued a press release (the
"Press Release") announcing results for the fiscal first quarter ended September
27, 2009. 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 October 22,
2009.
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: October
23, 2009
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 FIRST QUARTER RESULTS
Milwaukee,
Wisconsin – October 22, 2009 -- STRATTEC SECURITY CORPORATION (NASDAQ:STRT)
today reported operating results for the fiscal first quarter ended September
27, 2009.
Net sales
for the Company’s first quarter ended September 27, 2009 were $41.2 million,
compared to net sales of $34.7 million for the prior year quarter ended
September 28, 2008. Net income for the period was $943,000, compared
to net income of $20,000 in the prior year quarter. Diluted earnings
per share for the period were $.29 compared to diluted earnings per share of
$.01 in the prior year quarter. The higher sales and net income for
the quarter can be attributed primarily to the power products business STRATTEC
acquired November 30, 2008. That business, now called STRATTEC POWER
ACCESS, generated $10.7 million of sales in the current
quarter.
Sales to
STRATTEC’s largest customers overall increased in the current quarter compared
to the prior year quarter levels. Sales to Chrysler Group LLC were
$12.8 million in the current quarter compared to $7.1 million in the prior year
quarter. Included in the current quarter were sales generated by
STRATTEC POWER ACCESS, offset by a combination of lower vehicle production
volume and reduced component content in the other security products we
supply. Sales to General Motors Company were $9.9 million compared to
$12.3 million due to lower vehicle production volumes. Sales to Ford
Motor Company were $3.7 million compared to $2.3 million due to higher Ford
vehicle production volumes. In the current quarter, sales to
Hyundai/Kia were $3.0 million relating to the STRATTEC POWER ACCESS
business.
Gross
profit margins were 16.5 percent in the current quarter compared to 15.6 percent
in the prior year quarter. The higher gross profit margin in the
current year quarter was positively impacted by a favorable Mexican Peso to U.S.
Dollar exchange rate affecting the Company’s operations in
Mexico. The gross profit margin was negatively affected by higher
expediting costs and overtime incurred during the month of September to meet
significantly increased production requirements from the Company’s largest
customers as they re-built retail inventories following the U.S. Government’s
“Cash for Clunkers” program that ended in August 2009.
Operating
expenses were $6.2 million in the current quarter, compared to $6.0 million in
the prior year quarter. The current quarter includes the expenses of
STRATTEC POWER ACCESS engineering and administrative personnel that were hired
as of the date of the acquisition.
2
Included in the current quarter results is a $220,000 recovery of the
allowance for doubtful accounts recorded in the third quarter ended March 29,
2009 relating to the Chrysler LLC bankruptcy filing. During the
current quarter, Chrysler paid a significant portion of the outstanding accounts
receivable STRATTEC held at the time of Chrysler’s bankruptcy filing.
At the
end of fiscal year 2009, we changed our method for accounting for inventories
from last-in, first-out (LIFO) to first-in, first-out (FIFO). The
prior year reported information has been retrospectively adjusted on a FIFO
basis.
Harold
Stratton, STRATTEC’s Chairman, President and CEO commented, “While we are
pleased to be able to report more favorable results this quarter, we do not
believe our customers’ September production rates are sustainable over the next
two quarters. We therefore foresee variable vehicle production over
the next several quarters which may hamper our opportunity to demonstrate
improved financial performance in those quarters.”
Subsequent
Events
At the
Company’s 2009 Annual Meeting held on October 6, 2009, STRATTEC Shareholders
re-elected both Harold M. Stratton II and Robert Feitler to the Company’s Board
of Directors for an additional three-year term.
On
October 8, 2009, the Company’s U.S. hourly represented associates agreed to
amend the Company’s U.S. qualified defined benefit pension plan to discontinue
benefit accruals for salary increases and services rendered after December 31,
2009. A similar amendment to the Company’s defined benefit pension
plan for it’s U.S. based salaried associates will become effective at the same
time. The Company will supplement its existing defined contribution
401(k) savings plan effective January 1, 2010 with a higher Company matching
contribution. In addition, the Company’s retiree health insurance
benefit program for eligible U.S. participants will also be changed to cap the
amount of future payouts for associates who retire after December 31,
2009. The financial impact of the above changes will be reflected in
the fiscal year 2010 second and third quarter reports.
3
STRATTEC
designs, develops, manufactures and markets automotive Security Products,
including mechanical locks and keys, electronically enhanced locks and keys,
steering column and instrument panel ignition lock housings; and Access Control
Products including latches, power sliding side door systems, power lift gate
systems, power deck lid systems, door handles and related products. These
products are provided to customers in North America, and on a global basis
through the VAST Alliance in which STRATTEC participates with WITTE Automotive
of Velbert, Germany and ADAC Automotive of Grand Rapids,
Michigan. STRATTEC’s history in the automotive business spans over
100 years.
Certain
statements contained in this release contain “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of 1995. These
statements may be identified by the use of forward-looking words or phrases such
as “anticipate,” “believe,” “could,” “expect,” “intend,” “may,” “planned,”
“potential,” “should,” “will,” and “would.” Such
forward-looking statements in this release are inherently subject to many
uncertainties in the Company’s operations and business
environment. These uncertainties include general economic conditions,
in particular, relating to the automotive industry, consumer demand for the
Company’s and its customers’ products, competitive and technological
developments, customer purchasing actions, 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.
4
STRATTEC SECURITY
CORPORATION
Results
of Operations
(In
Thousands except per share amounts)
(Unaudited)
|
First Quarter Ended
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||||||||
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September
27, 2009
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September
28, 2008
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(Note
A)
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Net
Sales
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$ | 41,181 | $ | 34,731 | ||||
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Cost
of Goods Sold
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34,383 | 29,307 | ||||||
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Gross
Profit
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6,798 | 5,424 | ||||||
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Engineering,
Selling &
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||||||||
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Administrative Expenses
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6,199 | 5,952 | ||||||
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Recovery of Doubtful Accounts
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(220 | ) | - | |||||
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Income (Loss) from Operations
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819 | (528 | ) | |||||
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Interest
Income
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23 | 318 | ||||||
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Interest
Expense
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- | - | ||||||
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Other
Income, Net
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428 | 223 | ||||||
| 1,270 | 13 | |||||||
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Provision
(Benefit) for Income
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||||||||
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Taxes
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341 | (193 | ) | |||||
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Net
Income
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929 | 206 | ||||||
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Net Loss (Income) Attributable
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to Non-Controlling Interest
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14 | (186 | ) | |||||
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Net Income Attributable to
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STRATTEC
SECURITY CORPORATION
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$ | 943 | $ | 20 | ||||
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Earnings
Per Share:
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Basic
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$ | 0.29 | $ | 0.01 | ||||
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Diluted
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$ | 0.29 | $ | 0.01 | ||||
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Average
Basic
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||||||||
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Shares
Outstanding
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3,266 | 3,332 | ||||||
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Average
Diluted
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Shares
Outstanding
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3,271 | 3,340 | ||||||
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Other
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Capital
Expenditures
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$ | 1,762 | $ | 5,316 | ||||
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Depreciation
& Amortization
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$ | 1,751 | $ | 1,380 | ||||
NOTE
A: Prior year balances have been restated to reflect the change from
LIFO to FIFO accounting for inventories.
5
STRATTEC SECURITY
CORPORATION
Condensed
Balance Sheet Data
(In
Thousands)
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September
27, 2009
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June
28, 2009
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(Unaudited)
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ASSETS
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||||||||
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Current Assets:
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||||||||
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Cash and cash equivalents
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$ | 22,230 | $ | 22,764 | ||||
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Receivables, net
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28,425 | 17,235 | ||||||
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Inventories
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15,157 | 16,589 | ||||||
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Other current assets
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13,779 | 15,970 | ||||||
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Total Current Assets
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79,591 | 72,558 | ||||||
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Deferred Income Taxes
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12,935 | 13,143 | ||||||
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Investment in Joint Venture
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4,580 | 4,483 | ||||||
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Other Long Term Assets
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1,041 | 1,069 | ||||||
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Property, Plant and Equipment, Net
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36,716 | 36,936 | ||||||
| $ | 134,863 | $ | 128,189 | |||||
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LIABILITIES
AND SHAREHOLDERS’ EQUITY
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Current Liabilities:
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Accounts Payable
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$ | 17,555 | $ | 11,369 | ||||
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Other
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19,972 | 19,479 | ||||||
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Total Current Liabilities
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37,527 | 30,848 | ||||||
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Borrowings Under Line of Credit Facility
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- | - | ||||||
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Accrued Pension and Post Retirement Obligations
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24,045 | 24,784 | ||||||
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Shareholders’ Equity
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239,649 | 238,601 | ||||||
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Accumulated Other Comprehensive Loss
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(31,406 | ) | (31,094 | ) | ||||
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Less:Treasury Stock
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(136,077 | ) | (136,089 | ) | ||||
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Total
STRATTEC SECURITY CORPORATION Shareholders’ Equity
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72,166 | 71,418 | ||||||
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Non-Controlling Interest
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1,125 | 1,139 | ||||||
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Total Shareholders’ Equity
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73,291 | 72,557 | ||||||
| 134,863 | 128,189 | |||||||
6
STRATTEC SECURITY
CORPORATION
Condensed
Cash Flow Statement Data
(In
Thousands)
(Unaudited)
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First
Quarter Ended
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September 27, 2009
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September 28, 2008
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Note
A
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Cash
Flows from Operating Activities:
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||||||||
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Net
Income
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$ | 943 | $ | 20 | ||||
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Adjustment
to Reconcile Net Income (Loss) to
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||||||||
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Cash
Used in Operating Activities:
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||||||||
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Non-Controlling Interest
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(14 | ) | 186 | |||||
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Depreciation and Amortization
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1,751 | 1,380 | ||||||
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Foreign Currency Transaction Gain
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(65 | ) | (238 | ) | ||||
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Stock Based Compensation Expense
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106 | 128 | ||||||
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Recovery of Doubtful Accounts
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(220 | ) | - | |||||
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Change in Operating Assets/Liabilities
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(1,251 | ) | (753 | ) | ||||
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Other, net
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(64 | ) | (40 | ) | ||||
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Net
Cash Provided by Operating Activities
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1,186 | 683 | ||||||
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Cash
Flows from Investing Activities:
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||||||||
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Investment in Joint Ventures
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- | (125 | ) | |||||
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Additions to Property, Plant and Equipment
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(1,762 | ) | (5,316 | ) | ||||
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Net
Cash Used in Investing Activities
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(1,762 | ) | (5,441 | ) | ||||
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Cash
Flow from Financing Activities:
|
||||||||
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Purchase of Common Stock
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- | (5,714 | ) | |||||
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Dividends Paid
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- | (521 | ) | |||||
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Loan from Non-Controlling Interest
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- | 375 | ||||||
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Exercise of Stock Options and Employee
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||||||||
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Stock Purchases
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11 | 10 | ||||||
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Net
Cash Provided by (Used In) Financing Activities
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11 | (5,850 | ) | |||||
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Foreign
Currency Impact on Cash
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31 | 165 | ||||||
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Net
Decrease in Cash & Cash Equivalents
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(534 | ) | (10,443 | ) | ||||
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Cash
and Cash Equivalents:
|
||||||||
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Beginning of Period
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22,764 | 51,501 | ||||||
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End of Period
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$ | 22,230 | $ | 41,058 | ||||
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NOTE
A: Prior year balances have been restated to reflect the change
from LIFO to FIFO accounting for inventories.
|
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7