1

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

[ X ]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2000

or

[   ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
EXCHANGE ACT OF 1934

For the transition period from              to
------------    ------------

Commission File Number 0-25150

STRATTEC SECURITY CORPORATION
(Exact Name of Registrant as Specified in Its Charter)

WISCONSIN                                         39-1804239
(State of Incorporation)                    (I.R.S. Employer Identification No.)

3333 WEST GOOD HOPE ROAD, MILWAUKEE, WI 53209
(Address of Principal Executive Offices)

(414) 247-3333
(Registrant's Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X  NO
---   ---

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.

Common stock, par value $0.01 per share: 4,384,777 shares outstanding as of
December 31, 2000.

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STRATTEC SECURITY CORPORATION

FORM 10-Q

December 31, 2000

INDEX

Page
----

Part I - FINANCIAL INFORMATION

Item 1   Consolidated Statements of Income                                                           3
Consolidated Balance Sheets                                                                 4
Consolidated Statements of Cash Flows                                                       5
Notes to Consolidated Financial Statements                                                  6

Item 2   Management's Discussion and Analysis of Results
of Operations and Financial Condition                                                  7-10

Item 3   Quantitative and Qualitative Disclosures About Market Risk                                 10

Part II - OTHER INFORMATION

Item 1   Legal Proceedings                                                                          11

Item 2   Changes in Securities and Use of Proceeds                                                  11

Item 3   Defaults Upon Senior Securities                                                            11

Item 4   Submission of Matters to a Vote of Security Holders                                        11

Item 5   Other Information                                                                          11

Item 6   Exhibits and Reports on Form 8-K                                                           11

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Item 1   Financial Statements

STRATTEC SECURITY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Amounts)

Three Months Ended                  Six Months Ended
------------------                  ----------------
December 31,     December 26,      December 31,     December 26,
2000             1999               2000             1999
---------------  ----------------  ---------------   ---------------
(unaudited)                         (unaudited)

Net sales                                                    $ 49,988         $ 56,726         $ 102,409         $ 106,393

Cost of goods sold                                             40,002           43,977            81,085            82,956
----------------  ---------------   ---------------  ---------------

Gross profit                                                9,986           12,749            21,324            23,437

Engineering, selling and administrative
expenses                                                    4,657            4,895             9,690             9,783
---------------  ---------------   ---------------  ----------------

Income from operations                                      5,329            7,854            11,634            13,654

Interest income                                                   190              291               383               679
Interest expense                                                    -                -                 -                -
Other income (expense), net                                        11             (41)             (176)             (149)
----------------  ---------------   ---------------  ---------------

Income before provision for income taxes                    5,530            8,104            11,841            14,184

Provision for income taxes                                      2,101            3,160             4,531             5,532
----------------  ---------------   ---------------  ---------------

Net income                                                     $3,429           $4,944            $7,310            $8,652
================  ===============   ===============  ===============

Earnings per share:
Basic                                                          $ 0.77           $ 0.98            $ 1.64            $ 1.64
================  ===============   ===============  ===============
Diluted                                                        $ 0.76           $ 0.95            $ 1.61            $ 1.60
================  ===============   ===============  ===============

The accompanying notes are an integral part of these consolidated statements.

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STRATTEC SECURITY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)

December 31,         July 2,
2000                2000
--------------     ---------------

ASSETS                                                                                    (unaudited)
Current Assets:
Cash and cash equivalents                                                                  $ 9,882            $ 13,915
Receivables, net                                                                            22,453              28,731
Inventories-
Finished products                                                                        6,150               3,630
Work in process                                                                         14,059              12,374
Raw materials                                                                              860               1,054
LIFO adjustment                                                                        (2,406)             (2,716)
--------------     ---------------
Total inventories                                                                    18,663              14,342
Customer tooling in progress                                                                 2,558               4,248
Other current assets                                                                         5,856               5,365
--------------     ---------------
Total current assets                                                                    59,412              66,601

Property, plant and equipment                                                                    93,914              89,912
Less: accumulated depreciation                                                                 (50,562)            (47,531)
--------------     ---------------
Net property, plant and equipment                                                           43,352              42,381
--------------     ---------------

$ 102,764            $108,982
==============     ===============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable                                                                          $ 13,492            $ 19,694
Environmental                                                                                2,765               2,770
Other accrued liabilities                                                                    6,100              11,637
--------------     ---------------
Total current liabilities                                                               22,357              34,101

Deferred income taxes                                                                               299                 299
Accrued pension and postretirement obligations                                                   14,720              14,132

Shareholders' equity:
Common stock, authorized 12,000,000 shares $.01 par value, issued 6,143,342
shares at December 31, 2000, and
6,120,788 shares at July 2, 2000                                                            61                 61
Capital in excess of par value                                                              48,439              47,924
Retained earnings                                                                           75,274              67,964
Cumulative translation adjustments                                                         (2,155)             (2,239)
Less: treasury stock, at cost (1,758,565 shares at December 31,
2000 and 1,668,179 shares at July 2, 2000)                                            (56,231)            (53,260)
--------------     ---------------
Total shareholders' equity                                                              65,388              60,450
--------------     ---------------

$ 102,764            $108,982
==============     ===============

The accompanying notes are an integral part of these
consolidated balance sheets.

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STRATTEC SECURITY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)

Six Months Ended
December 31,       December 26,
2000                1999
--------------     ---------------
(unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                                                $  7,310            $  8,652

Adjustments to reconcile net income to net cash provided 
by operating activities:
Depreciation                                                                             3,879               3,735
Change in operating assets and liabilities:
Decrease in receivables                                                               6,312               5,966
Increase in inventories                                                             (4,321)             (2,501)
(Increase) decrease in other assets                                                   1,234               (813)
Increase (decrease) in accounts payable and
accrued liabilities                                                            (11,216)               1,201
Tax benefit from options exercised                                                      141                 315
Other, net                                                                              167                 242
--------------     ---------------
Net cash provided by operating activities                                                    3,506              16,797

CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment                                                 (4,942)             (4,326)
--------------     ---------------
Net cash used in investing activities                                                      (4,942)             (4,326)

CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock                                                                 (2,996)            (31,590)
Exercise of stock options                                                                      399                 983
--------------     ---------------
Net cash used in financing activities                                                      (2,597)            (30,607)
--------------     ---------------

NET DECREASE IN CASH AND
CASH EQUIVALENTS                                                                           (4,033)            (18,136)

CASH AND CASH EQUIVALENTS
Beginning of period                                                                         13,915              28,611
--------------     ---------------
End of period                                                                             $  9,882            $ 10,475
==============     ===============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Income taxes paid                                                                         $  5,178            $  4,931
Interest paid                                                                                    -                   -

The accompanying notes are an integral part of these consolidated statements.

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STRATTEC SECURITY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BASIS OF FINANCIAL STATEMENTS     
STRATTEC SECURITY CORPORATION (the "Company") designs, develops,
manufactures and markets mechanical locks, electro-mechanical locks and related
access security products for major automotive manufacturers. The accompanying
financial statements reflect the consolidated results of the Company, its wholly
owned Mexican subsidiary, and its foreign sales corporation.

In the opinion of management, the accompanying unaudited financial
statements contain all adjustments which are of a normal recurring nature,
necessary to present fairly the financial position as of December 31, 2000, and
the results of operations and cash flows for the period then ended. All
significant intercompany transactions have been eliminated. Interim financial
results are not necessarily indicative of operating results for an entire year.

Certain amounts previously reported have been reclassified to conform to
the December 31, 2000 presentation.

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

Six Months Ended
----------------
December 31, 2000                 December 26, 1999
-----------------                 -----------------
Net                 Per-Share      Net                 Per-Share
Income     Shares      Amount      Income     Shares      Amount
------     ------      ------      ------     ------      ------

Basic Earnings Per Share                          $7,310      4,447         $1.64    $8,652       5,269        $1.64
=====                              =====
Stock Options                                                   100                                 155
---                                 ---
Diluted Earnings Per Share                        $7,310      4,547         $1.61    $8,652       5,424        $1.60
=====         =====                 =====        =====

Three Months Ended
------------------
December 31, 2000                  December 26, 1999
-----------------                  -----------------
Net                 Per-Share      Net                 Per-Share
Income     Shares      Amount      Income     Shares      Amount
------     ------      ------      ------     ------      ------

Basic Earnings Per Share                            $3,429    4,433         $0.77      $4,944     5,026        $0.98
=====                              =====
Stock Options                                                    96                                 151
--                                 ---
Diluted Earnings Per Share                          $3,429    4,529         $0.76      $4,944     5,177        $0.95
=====         =====                 =====        =====

Options to purchase 263,623 shares of common stock at prices ranging from
$33.63 to $45.79 per share and 163,623 shares of common stock at prices ranging
from $35.79 to $45.79 per share were outstanding as of December 31, 2000, and
December 26, 1999, respectively, but were not included in the computation of
diluted EPS because the options' exercise prices were greater than the average
market price of the common shares.

COMPREHENSIVE INCOME
The following table presents the Company's comprehensive income (in
thousands):

Three Months Ended                        Six Months Ended
------------------                        ----------------
December 31, 2000     December 26, 1999    December 31, 2000     December 26, 1999
-----------------     -----------------    -----------------     -----------------

Net Income                                     $3,429              $4,944                 $7,310              $8,652
Change in Cumulative Translation
Adjustments, net                          (119)                (59)                     84                  25
-----                ----                    ---                 ---
Total Comprehensive Income                     $3,310              $4,885                 $7,394              $8,677
======              ======                 ======              ======

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Item 2
STRATTEC SECURITY CORPORATION AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

The following Management's Discussion and Analysis should be read in
conjunction with the Company's accompanying Financial Statements and Notes
thereto and the Company's 2000 Annual Report. Unless otherwise indicated, all
references to years refer to fiscal years.

Analysis of Results of Operations

Three months ended December 31, 2000 compared to the three months ended
December 26, 1999

Net sales for the three months ended December 31, 2000, were $50.0 million
compared to net sales of $56.7 million for the three months ended December 26,
1999. Sales to the Company's largest customers overall decreased in the current
quarter compared to the robust prior year levels, with General Motors
Corporation at $13.4 million compared to $15.8 million, Delphi Automotive
Systems at $7.0 million compared to $8.0 million, DaimlerChrysler Corporation at
$7.1 million compared to $8.1 million, and Ford Motor Company at $10.6 million
compared to $13.3 million. Sales to Mitsubushi Motor Manufacturing of America,
Inc. increased during the current quarter to $3.1 million compared to $2.2
million in the prior year quarter due to the Company's increased market share of
Mitsubishi lockset requirements.

Gross profit as a percentage of net sales was 20.0 percent in the current
quarter compared to 22.5 percent in the prior year quarter. The lower gross
margin is the result of several factors including lower production volumes
resulting from the decline in automotive production, particularly in the last
half of the quarter, an increase in the cost of zinc, and increased U.S. dollar
costs at the Company's Mexico assembly facility. The cost of zinc per pound,
which the Company uses at a rate of approximately 1 million pounds per month,
increased to an average of $.57 in the current quarter compared to an average of
$.53 in the prior year quarter. The inflation rate in Mexico for the 12 months
ended December 31, 2000, was approximately 12% while the U.S. dollar/Mexican
peso exchange rate increased slightly to approximately 9.57 in the current
quarter from approximately 9.48 in the prior year quarter.

Engineering, selling and administrative expenses were relatively
consistent between quarters and totaled $4.7 million in the current quarter
compared to $4.9 million in the prior year quarter.

Income from operations was $5.3 million in the current quarter, compared
to $7.9 million in the prior year quarter. The decrease is the result of the
reduced sales and a reduction in the gross profit margin as previously
discussed.

The effective income tax rate for the current quarter was 38 percent
compared to 39 percent in the prior year quarter. The decrease is due to a
decrease in the state effective tax rate. The overall effective rate differs
from the federal statutory tax rate primarily due to the effects of state income
taxes.

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Six months ended December 31, 2000 compared to the six months ended December 26,
1999

Net sales for the six months ended December 31, 2000, were $102.4 million
compared to net sales of $106.4 million for the six months ended December 26,
1999. Sales to the Company's largest customers overall decreased in the six
months ended December 31, 2000, compared to the robust prior year levels, with
General Motors Corporation at $30.6 million compared to $34.1 million, Delphi
Automotive Systems at $13.9 million compared to $15.1 million, DaimlerChrysler
Corporation at $16.0 million compared to $16.2 million, and Ford Motor Company
at $22.6 million compared to $25.2 million. Sales to Mitsubushi Motor
Manufacturing of America, Inc. increased during the current period to $6.8
million compared to $4.1 million in the prior year period due to the Company's
increased market share of Mitsubishi lockset requirements.

Gross profit as a percentage of net sales was 20.8 percent in the six
months ended December 31, 2000, compared to 22.0 percent in the prior year
period. The lower gross margin is the result of several factors including lower
production volumes resulting from the decline in automotive production,
particularly in the last half of the December quarter, an increase in the cost
of zinc, and increased U.S. dollar costs at the Company's Mexico assembly
facility. The cost of zinc per pound, which the Company uses at a rate of
approximately 1 million pounds per month, increased to an average of $.58 in the
six months ended December 31, 2000, compared to an average of $.53 in the prior
year period. The inflation rate in Mexico for the 12 months ended December 31,
2000, was approximately 12% while the U.S. dollar/Mexican peso exchange rate
remained relatively flat between periods at approximately 9.45.

Engineering, selling and administrative expenses were relatively
consistent between periods and totaled $9.7 million in the six months ended
December 31, 2000 compared to $9.8 million in the prior year period.

Income from operations was $11.6 million in the six months ended December
31, 2000, compared to $13.7 million in the prior year period. The decrease is
the result of the reduced sales and a reduction in the gross profit margin as
previously discussed.

The effective income tax rate for the current period was 38 percent
compared to 39 percent in the prior year period. The decrease is due to a
decrease in the state effective tax rate. The overall effective rate differs
from the federal statutory tax rate primarily due to the effects of state income
taxes.

Liquidity and Capital Resources

The Company generated cash from operating activities of $3.5 million in
the six months ended December 31, 2000. In the six months ended December 26,
1999, the Company generated $16.8 million in cash from operating activities. The
decreased generation of cash is primarily due to the timing of payments of
accounts payable.

The Company's investment in accounts receivable decreased by approximately
$6.3 million to $22.5 million at December 31, 2000, as compared to $28.7 million
at July 2, 2000, primarily due to a decrease in sales levels in the last half of
the December quarter resulting from the decline in automotive production as
previously discussed. Inventories increased by approximately $4.4 million at
December 31, 2000, as compared to July 2, 2000. The increase is the result of a
typical reduction in inventory levels in the fourth quarter due to model year
change-overs.

Capital expenditures during the six months ended December 31, 2000, were
$4.9 million compared to $4.3 million during the six months ended December 26,
1999. The Company anticipates that capital expenditures will be approximately $9
million in 2001, primarily in support of requirements for new product programs
and the upgrade and replacement of existing equipment.

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The Board of Directors of the Company has authorized a stock repurchase
program to buy back up to 2,389,395 outstanding shares of common stock. A total
of 1,767,726 shares have been repurchased as of December 31, 2000, at a cost of
approximately $56.4 million. Additional repurchases may occur from time to time.
Funding for the repurchases was provided by cash flow from operations and to a
lesser extent from borrowings under existing credit facilities.

The Company has a $25 million unsecured, revolving credit facility (the
"Credit Facility") which expires October 2001. There were no outstanding
borrowings under the Credit Facility at December 31, 2000. Interest on
borrowings under the Credit Facility are at varying rates based, at the
Company's option, on the London Interbank Offering Rate, the Federal Funds Rate,
or the bank's prime rate. The credit facility contains various restrictive
covenants including covenants that require the Company to maintain minimum
levels for certain financial ratios such as tangible net worth, ratio of
indebtedness to tangible net worth and fixed charge coverage. The Company
believes that the Credit Facility will be adequate, along with cash flow from
operations, to meet its anticipated capital expenditure, working capital and
operating expenditure requirements.

Inflationary pressures have not significantly impacted the Company over
the last several years, except for zinc and Mexican assembly operations as noted
elsewhere in this Management's Discussion and Analysis.

Mexican Operations

The Company has assembly operations in Juarez, Mexico. Since December 28,
1998, and prior to December 30, 1996, the functional currency of the Mexican
operation has been the Mexican peso. The effects of currency fluctuations result
in adjustments to the U.S. dollar value of the Company's net assets and to the
equity accounts in accordance with Statement of Financial Accounting Standard
(SFAS) No. 52, "Foreign Currency Translation." During the period December 30,
1996, to December 27, 1998, the functional currency of the Mexican Operation was
the U.S. dollar, as Mexico was then considered to be a highly inflationary
economy in accordance with SFAS No. 52. The effect of currency fluctuations in
the remeasurement process was included in the determination of income. The
effect of the December 28, 1998, functional currency change was not material to
the financial results of the Company.

Other

On November 28, 2000, the Company signed certain alliance agreements with
E. WiTTE Verwaltungsgesellschaft GMBH, and its operating unit, WiTTE-Velbert
GmbH & Co. KG ("WiTTE"). WiTTE, of Velbert, Germany, is a privately held, QS
9000 and VDA 6.1 certified automotive supplier with sales of over DM300 million
in their last fiscal year. WiTTE designs, manufactures and markets components
including locks and keys, hood latches, rear compartment latches, seat back
latches, door handles and specialty fasteners. WiTTE's primary market for these
products has been Europe. The WiTTE-STRATTEC alliance provides a set of
cross-licensing agreements for the manufacture, distribution and sale of WiTTE
products by the Company in North America, and the manufacture, distribution and
sale of the Company's products by WiTTE in Europe. Additionally, a joint venture
company ("WiTTE-STRATTEC LLC") in which each company holds a 50 percent interest
has been established to seek opportunities to manufacture and sell both
companies' products in other areas of the world outside of North America and
Europe. These activities did not have a material impact on the December 31,
2000, financial statements.

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Forward Looking Statements

A number of the matters and subject areas discussed in this Form 10-Q that
are not historical or current facts deal with potential future circumstances and
developments. These include expected future financial results, product
offerings, global expansion, liquidity needs, financing ability, planned capital
expenditures, management's or the Company's expectations and beliefs, and
similar matters discussed in the Company's Management Discussion and Analysis of
Results of Operations and Financial Condition. The discussions of such matters
and subject areas are qualified by the inherent risk and uncertainties
surrounding future expectations generally, and also may materially differ from
the Company's actual future experience.

The Company's business, operations and financial performance are subject
to certain risks and uncertainties which could result in material differences in
actual results from the Company's current expectations. These risks and
uncertainties include, but are not limited to, general economic conditions, in
particular, relating to the automotive industry, consumer demand for the
Company's and its customer's products, competitive and technological
developments, 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 Form
10-Q and the Company undertakes no obligation to publicly update such
forward-looking statements to reflect subsequent events or circumstances.

Item 3  Quantitative and Qualitative Disclosures About Market Risk

The Company does not utilize financial instruments for trading purposes
and holds no derivative financial instruments which would expose the Company to
significant market risk. The Company has not had outstanding borrowings since
December 1997. The Company has been in an investment position since this time
and expects to remain in an investment position for the foreseeable future.
There is therefore no significant exposure to market risk for changes in
interest rates. The Company is subject to foreign currency exchange rate
exposure related to the Mexican assembly operations.

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Part II

Other Information

Item 1 Legal Proceedings - None

Item 2 Changes in Securities and Use of Proceeds - None

Item 3 Defaults Upon Senior Securities - None

Item 4 Submission of Matters to a Vote of Security Holders

At the Company's Annual Meeting held on October 24, 2000, the
shareholders voted to elect Harold M. Stratton II and Robert Feitler as
directors for a term to expire in 2003. The number of votes cast for
and withheld in the election of Harold M. Stratton II were 4,010,108
and 21,416, respectively. The number of votes cast for and withheld in
the election of Robert Feitler were 4,005,058 and 26,466, respectively.
Directors whose term continued after the meeting include Frank J.
Krejci with a term expiring in 2001 and Michael J. Koss and John G.
Cahill each with a term expiring in 2002.

Item 5 Other Information - None

Item 6 Exhibits and Reports on Form 8-K

(a)  Exhibits

3.1* Amended and Restated Articles of Incorporation of the
Company
3.2* By-Laws of the Company
4.1* Rights Agreement dated as of February 6, 1995 between the
Company and Firstar Trust Company, as Rights Agent

(b)  Reports on Form 8-K - None

* Incorporated by reference to Amendment No. 2 to the Company's Form 10 filed on
February 6, 1995.

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 (Registrant)

Date: February 12, 2001             By  /S/ Patrick J. Hansen  
--------------------------

Patrick J. Hansen
Vice President,
Chief Financial Officer,
Treasurer and Secretary
(Principal Accounting and Financial Officer)

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