UNITED STATES
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): April 27, 2010
|
STRATTEC SECURITY CORPORATION
|
|
(Exact name of registrant as specified in charter)
|
|
Wisconsin
|
|
(State or other jurisdiction of incorporation)
|
|
0-25150
|
39-1804239
|
|
|
(Commission File Number)
|
(I.R.S. Employer I.D. Number)
|
|
3333 West Good Hope Road
Milwaukee, WI
|
53209
|
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
|
(414) 247-3333
|
|
(Registrant's telephone number; including area code)
|
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 April 27, 2010, STRATTEC SECURITY CORPORATION issued a press release (the "Press Release") announcing results for the fiscal third quarter ended March 28, 2010. 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 Item 2.02 and Exhibit 99.1 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 April 27, 2010.
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: April 28, 2010
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 CST
Contact: Pat Hansen
Senior Vice President and
Chief Financial Officer
414-247-3435
www.strattec.com
STRATTEC SECURITY CORPORATION
REPORTS FISCAL THIRD QUARTER RESULTS
Milwaukee, Wisconsin – April 27, 2010 -- STRATTEC SECURITY CORPORATION (NASDAQ:STRT) today reported operating results for the fiscal third quarter ended March 28, 2010.
Net sales for the Company’s third quarter ended March 28, 2010 were $52.9 million, compared to net sales of $29.3 million for the third quarter ended March 29, 2009. Net income for the period was $781,000, compared to a net loss of $2.8 million in the prior year quarter. Diluted earnings per share for the period were $.24 compared to diluted loss per share of $.87 in the prior year quarter. The higher net sales and net income for the current quarter can be primarily attributed to increased customer production volumes from an improved and more stable U.S. economy. The significant decline last year was the direct result of the severe economic recession impacting both North America and other major markets in the rest of the world. The prior year quarter also included a $500,000 pre-tax pro
vision for potential uncollectible trade accounts receivable relating to Chrysler LLC’s filing for Chapter 11 bankruptcy protection for their U.S. legal entities on April 30, 2009.
For the nine months ended March 28, 2010, net sales were $146.6 million compared to net sales of $97.9 million in the prior year period. Net income was $2.6 million compared to net a loss of $4.0 million in the prior year period and diluted earnings per share were $.78 compared to diluted loss per share of $1.22.
Sales to STRATTEC’s largest customers overall increased in the current quarter compared to the prior year quarter levels primarily due to higher vehicle production volumes. Sales to Chrysler Group LLC were $17.0 million in the current quarter compared to $11.1 million in the prior year quarter. Sales to General Motors Company were $13.5 million compared to $6.6 million. Included in the current quarter sales to General Motors were $1.7 million of sales to Nexteer Automotive, formerly a unit of Delphi Corporation, which is now owned by General Motors. Sales to Ford Motor Company were $4.5 million compared to $3.6 million. In the current quarter, sales to Hyundai/Kia of $2.8 million were generated by the STRATTEC POWER ACCESS business.
Gross profit margins were 16.8 percent in the current quarter compared to 7.0 percent in the prior year quarter. The higher gross profit margin in the current year quarter was primarily the result of higher customer vehicle production volumes compared to the prior year quarter which increased overhead absorption of our manufacturing costs. Also impacting the current quarter to a lesser extent were lower purchased raw material costs for zinc offset by an unfavorable Mexico Peso to U.S. dollar exchange rate affecting the Company’s operations in Mexico.
2
Operating expenses were $7.6 million in the current quarter, compared to $7.2 million in the prior year quarter.
During the current quarter the Company contributed $1.0 million to its Defined Benefit Pension Trust.
At the end of fiscal year 2009, we changed our method of 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.
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 Compa
ny’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)
(Unaudited)
| Third Quarter Ended | Nine Months Ended | |||||||||||||||
| March 28, 2010 |
March 29, 2009
(Note A)
|
March 28, 2010 |
March 29, 2009
(Note A)
|
|||||||||||||
|
Net Sales
|
$ | 52,883 | $ | 29,348 | $ | 146,604 | $ | 97,878 | ||||||||
|
Cost of Goods Sold
|
44,022 | 27,285 | 123,292 | 87,480 | ||||||||||||
|
Gross Profit
|
8,861 | 2,063 | 23,312 | 10,398 | ||||||||||||
|
Engineering, Selling & Administrative Expenses
|
7,620 | 7,175 | 21,274 | 19,796 | ||||||||||||
|
Impairment Charge
|
- | - | 223 | - | ||||||||||||
|
Environmental
|
- | - | (1,125 | ) | - | |||||||||||
|
Provision (Recovery) for Doubtful Accounts
|
- | 500 | (421 | ) | 500 | |||||||||||
|
Income (Loss) from Operations
|
1,241 | (5,612 | ) | 3,361 | (9,898 | ) | ||||||||||
|
Interest Income
|
16 | 91 | 58 | 693 | ||||||||||||
|
Other Income, Net
|
120 | 104 | 795 | 884 | ||||||||||||
| 1,377 | (5,417 | ) | 4,214 | (8,321 | ) | |||||||||||
|
Provision (Benefit) for Income Taxes
|
328 | (2,095 | ) | 1,390 | (3,716 | ) | ||||||||||
|
Net Income (Loss)
|
$ | 1,049 | $ | (3,322 | ) | $ | 2,824 | $ | (4,605 | ) | ||||||
|
Net Income (Loss) Attributable to
Non-Controlling Interest
|
268 | (500 | ) | 256 | (601 | ) | ||||||||||
|
Net Income (Loss) Attributable to STRATTEC
SECURITY CORPORATION
|
$ | 781 | $ | (2,822 | ) | $ | 2,568 | $ | (4,004 | ) | ||||||
|
Earnings (Loss) Per Share:
|
||||||||||||||||
|
Basic
|
$ | 0.24 | $ | (0.87 | ) | $ | 0.79 | $ | (1.22 | ) | ||||||
|
Diluted
|
$ | 0.24 | $ | (0.87 | ) | $ | 0.78 | $ | (1.22 | ) | ||||||
|
Average Basic Shares Outstanding
|
3,273 | 3,261 | 3,270 | 3,285 | ||||||||||||
|
Average Diluted Shares Outstanding
|
3,284 | 3,262 | 3,275 | 3,290 | ||||||||||||
|
Other
|
||||||||||||||||
|
Capital Expenditures
|
$ | 1,841 | $ | 2,418 | $ | 4,945 | $ | 10,929 | ||||||||
|
Depreciation & Amortization
|
$ | 1,757 | $ | 1,673 | $ | 5,335 | $ | 4,528 | ||||||||
NOTE A: Prior year balances have been restated to reflect the change from LIFO to FIFO accounting for inventories.
4
STRATTEC SECURITY CORPORATION
Condensed Balance Sheet Data
(In Thousands)
|
March 28, 2010
|
June 28, 2009
|
|||||||
| (Unaudited) | ||||||||
|
ASSETS
|
||||||||
|
Current Assets:
|
||||||||
|
Cash and cash equivalents
|
$ | 15,198 | $ | 22,764 | ||||
|
Restricted Cash (A)
|
2,100 | - | ||||||
|
Receivables, net
|
33,122 | 17,235 | ||||||
|
Inventories
|
16,836 | 16,589 | ||||||
|
Other current assets
|
18,960 | 15,970 | ||||||
|
Total Current Assets
|
86,216 | 72,558 | ||||||
|
Deferred Income Taxes
|
9,976 | 13,143 | ||||||
|
Investment in Joint Venture
|
4,811 | 4,483 | ||||||
|
Other Long Term Assets
|
2,262 | 1,069 | ||||||
|
Property, Plant and Equipment, Net
|
37,013 | 36,936 | ||||||
| $ | 140,278 | $ | 128,189 | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
Current Liabilities:
|
||||||||
|
Accounts Payable
|
$ | 20,972 | $ | 11,369 | ||||
|
Other
|
20,708 | 19,479 | ||||||
|
Total Current Liabilities
|
41,680 | 30,848 | ||||||
|
Borrowings Under Line of Credit Facility
|
- | - | ||||||
|
Accrued Pension and Post Retirement Obligations
|
22,270 | 24,784 | ||||||
|
Shareholders’ Equity
|
241,100 | 238,601 | ||||||
|
Accumulated Other Comprehensive Loss
|
(30,118 | ) | (31,094 | ) | ||||
|
Less: Treasury Stock
|
(136,055 | ) | (136,089 | ) | ||||
|
Total STRATTEC SECURITY CORPORATION Shareholders’ Equity
|
74,927 | 71,418 | ||||||
|
Non-Controlling Interest
|
1,401 | 1,139 | ||||||
|
Total Shareholders’ Equity
|
76,328 | 72,557 | ||||||
| $ | 140,278 | $ | 128,189 | |||||
|
NOTE A:
|
Represents a commercial guarantee by STRATTEC SECURITY CORPORATION relating to a promissory note issued by Vehicle Access Systems Technology, LLC (VAST, LLC).
|
5
STRATTEC SECURITY CORPORATION
Condensed Cash Flow Statement Data
(In Thousands)
(Unaudited)
| Third Quarter Ended | Nine Months Ended | |||||||||||||||
|
March 28, 2010
|
March 29, 2009
(Note A)
|
March 28, 2010
|
March 29, 2009
(Note A)
|
|||||||||||||
|
Cash Flows from Operating Activities:
|
||||||||||||||||
|
Net Income (Loss)
|
$ | 781 | $ | (2,822 | ) | $ | 2,568 | $ | (4,004 | ) | ||||||
|
Adjustment to Reconcile Net Income (Loss) to Cash
Used in Operating Activities:
|
||||||||||||||||
|
Non-Controlling Interest
|
268 | (500 | ) | 256 | (601 | ) | ||||||||||
|
Depreciation
|
1,732 | 1,649 | 5,261 | 4,495 | ||||||||||||
|
Intangible Amortization
|
25 | 24 | 74 | 33 | ||||||||||||
|
Stock Based Compensation Expense
|
136 | 92 | 340 | 309 | ||||||||||||
|
Provision (Recovery) for Doubtful Accounts
|
- | 500 | (421 | ) | 500 | |||||||||||
|
Deferred Tax Provision
|
- | - | 3,258 | - | ||||||||||||
|
Curtailment Loss
|
- | - | 505 | - | ||||||||||||
|
Impairment Charge
|
- | - | 223 | - | ||||||||||||
|
Environmental
|
- | - | (1,125 | ) | - | |||||||||||
|
Change in Operating Assets/Liabilities
|
(7,622 | ) | (5,268 | ) | (9,162 | ) | (8,219 | ) | ||||||||
|
Other, net
|
21 | (159 | ) | (279 | ) | (1,429 | ) | |||||||||
|
Net Cash Provided (Used) by Operating Activities
|
(4,659 | ) | (6,484 | ) | 1,498 | (8,916 | ) | |||||||||
|
Cash Flows from Investing Activities:
|
||||||||||||||||
|
Investment in Joint Ventures
|
- | - | (100 | ) | (388 | ) | ||||||||||
|
Restricted Cash
|
- | - | (2,100 | ) | - | |||||||||||
|
Loan to Joint Venture, net
|
- | - | (1,500 | ) |
-
|
|||||||||||
|
Purchase of Delphi Power Products
|
- | (1,118 | ) | - | (4,931 | ) | ||||||||||
|
Additions to Property, Plant and Equipment
|
(1,841 | ) | (2,418 | ) | (4,945 | ) | (10,929 | ) | ||||||||
|
Proceeds from Sales of Property,
Plant and Equipment
|
- | - | 10 | - | ||||||||||||
|
Net Cash Used in Investing Activities
|
(1,841 | ) | (3,536 | ) | (8,635 | ) | (16,248 | ) | ||||||||
|
Cash Flow from Financing Activities:
|
||||||||||||||||
|
Purchase of Common Stock
|
- | - | - | (6,214 | ) | |||||||||||
|
Dividends Paid
|
- | (488 | ) | - | (1,511 | ) | ||||||||||
|
Contribution from Non-Controlling Interest
|
- | 224 | - | 986 | ||||||||||||
|
Net Borrowing (Repayment) of Loan from
Non-Controlling Interest
|
(225 | ) | 1,000 | (225 | ) | 2,175 | ||||||||||
|
Exercise of Stock Options and Employee
Stock Purchases
|
10 | 10 | 33 | 30 | ||||||||||||
|
Net Cash Provided (Used) by Financing Activities
|
(215 | ) | 746 | (192 | ) | (4,534 | ) | |||||||||
|
Effect of Foreign Currency Fluctuations on Cash
|
(103 | ) | (6 | ) | (237 | ) | 795 | |||||||||
|
Net Decrease in Cash & Cash Equivalents
|
(6,818 | ) | (9,280 | ) | (7,566 | ) | (28,903 | ) | ||||||||
|
Cash and Cash Equivalents:
|
||||||||||||||||
|
Beginning of Period
|
22,016 | 31,878 | 22,764 | 51,501 | ||||||||||||
|
End of Period
|
$ | 15,198 | $ | 22,598 | $ | 15,198 | $ | 22,598 | ||||||||
NOTE A: Prior year balances have been restated to reflect the change from LIFO to FIFO accounting for inventories.
6