STRATTEC SECURITY CORPORATION Reports Fiscal Third Quarter Results

Apr 11, 2001, 01:00 ET from STRATTEC SECURITY CORPORATION

    MILWAUKEE, April 11 /PRNewswire/ --
     STRATTEC SECURITY CORPORATION (Nasdaq:   STRT) today reported operating
 results for the fiscal third quarter ended April 1, 2001.
     Net sales for the Company's three months ended April 1, 2001 were
 $48.2 million, compared to net sales of $54.5 million for the three months
 ended March 26, 2000.  Net income for the period was $2.6 million, compared to
 $4.4 million in the prior year quarter.  Diluted earnings per share for the
 period were $.60 compared to $.91 in the prior year quarter.  During the
 current quarter, the Company recorded a pre-tax charge of $450,000 to cover
 severance and separation costs related to a realignment of the Company's human
 resources.  The impact of this realignment will reduce operating costs by
 approximately $2.0 million annually, effective immediately.
     For the nine months ended April 1, 2001, net sales were $150.6 million
 compared to net sales of $160.9 million in the prior year period.  Net income
 was $9.9 million compared to $13.0 million and diluted earnings per share were
 $2.21 compared to 2.50.
     Sales to STRATTEC's largest customers overall decreased in the current
 quarter compared to the record prior year quarter levels, with General Motors
 Corporation at $13.9 million compared to $15.9 million, Delphi Automotive
 Systems Corporation at $6.1 million compared to $7.6 million, DaimlerChrysler
 Corporation at $8.2 million compared to $8.9 million, and Ford Motor Company
 at $10.8 million compared to $13.4 million.  Sales to Mitsubishi Motor
 Manufacturing of America, Inc. increased during the current quarter and were
 $2.7 million compared to $2.3 million in the prior year quarter.
     Gross profit margins were 19.7 percent in the current quarter compared to
 22.0 percent in the prior year quarter.  The impact of the charge related to
 the realignment of human resources in the current quarter reduced gross profit
 margins by .5 percent.  This quarter's gross profit margins were also
 significantly impacted by the effects of customer plant shutdowns and the
 resulting 20% reduction in the production of vehicles STRATTEC supplies.
 Additionally, the Company reduced inventory levels by approximately
 $6.5 million in comparison to the previous quarter.
     Operating expenses were $5.2 million in the current quarter (including
 $225,000 of the pre-tax realignment charge) compared to $4.8 million in the
 prior year quarter.
     During the third quarter, 352,000 shares were repurchased under the
 Company's stock repurchase program at a cost of approximately $11.3 million.
     Harold M. Stratton II, Chairman of the Board and Chief Executive Officer,
 commented:  "During our third fiscal quarter we implemented certain
 initiatives to support both our current and long range business strategies.
 These changes included focusing more resources on the development of our
 future products and streamlining our business processes to reflect the more
 efficient operating structure we have been working on throughout this fiscal
 year.  We believe the changes we have implemented position the Company to
 react more effectively given the industry vehicle build fluctuations we have
 experienced over the last several months.  Assuming our perception of more
 normalized vehicle production during April, May and June is correct, we expect
 earnings to improve in the fiscal fourth quarter compared to this quarter."
 
     STRATTEC SECURITY CORPORATION designs, develops, manufactures and markets
 mechanical locks, electro-mechanical locks and related access control products
 for North American Automotive and other Global Automotive Manufacturers.
 
     Forward looking statements in this release are 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, 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.  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.
 
 
                         STRATTEC SECURITY CORPORATION
                             Results of Operations
                    (In Thousands except per share amounts)
 
                             Third Quarter Ended        Nine Months Ended
                             April 1,     March 26,   April 1,      March 26,
                              2001          2000        2001           2000
                                  (Unaudited)               (Unaudited)
 
     Net Sales             $ 48,179       $54,539     $150,588      $160,932
 
     Cost of Goods Sold      38,696        42,551      119,781       125,507
 
     Gross Profit             9,483        11,988       30,807        35,425
 
     Engineering, Selling &
      Administrative
       Expenses               5,182         4,847       14,872        14,630
 
     Income from Operations   4,301         7,141       15,935        20,795
 
     Interest Income            138           146          521           825
 
     Interest Expense            --            --           --            --
 
     Other Expense, Net        (227)          (91)        (403)         (240)
 
                              4,212         7,196       16,053        21,380
 
     Provision for Income
      Taxes                   1,601         2,806        6,132         8,338
 
     Net Income              $2,611        $4,390       $9,921      $ 13,042
 
     Earnings Per Share:
     Basic                     $.61          $.94        $2.26         $2.57
     Diluted                   $.60          $.91        $2.21         $2.50
 
     Average Basic
       Shares Outstanding     4,297         4,667        4,397         5,068
 
     Average Diluted
       Shares Outstanding     4,382         4,808        4,492         5,219
 
 
                         STRATTEC SECURITY CORPORATION
 
                          Condensed Balance Sheet Data
                                 (In Thousands)
 
                                                   April 1, 2001   July 2, 2000
                                                     (Unaudited)
 
     ASSETS
       Current Assets:
         Cash and cash equivalents                     $7,978        $13,915
         Receivables, net                              27,225         28,731
         Inventories                                   12,183         14,342
         Other current assets                           8,147          9,613
           Total Current Assets                        55,533         66,601
       Property, Plant and Equipment, Net              42,839         42,381
                                                      $98,372       $108,982
 
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
       Current Liabilities:
         Accounts Payable                             $14,117        $19,694
         Other                                         11,356         14,407
           Total Current Liabilities                   25,473         34,101
       Deferred Income Taxes                              299            299
       Borrowings Under Revolving Credit Facility          --             --
       Accrued Pension and Post Retirement Obligations 15,145         14,132
       Shareholders' Equity                           124,992        113,710
         Less:  Treasury Stock                        (67,537)       (53,260)
           Total Shareholders' Equity                  57,455         60,450
                                                      $98,372       $108,982
 
 

SOURCE STRATTEC SECURITY CORPORATION
    MILWAUKEE, April 11 /PRNewswire/ --
     STRATTEC SECURITY CORPORATION (Nasdaq:   STRT) today reported operating
 results for the fiscal third quarter ended April 1, 2001.
     Net sales for the Company's three months ended April 1, 2001 were
 $48.2 million, compared to net sales of $54.5 million for the three months
 ended March 26, 2000.  Net income for the period was $2.6 million, compared to
 $4.4 million in the prior year quarter.  Diluted earnings per share for the
 period were $.60 compared to $.91 in the prior year quarter.  During the
 current quarter, the Company recorded a pre-tax charge of $450,000 to cover
 severance and separation costs related to a realignment of the Company's human
 resources.  The impact of this realignment will reduce operating costs by
 approximately $2.0 million annually, effective immediately.
     For the nine months ended April 1, 2001, net sales were $150.6 million
 compared to net sales of $160.9 million in the prior year period.  Net income
 was $9.9 million compared to $13.0 million and diluted earnings per share were
 $2.21 compared to 2.50.
     Sales to STRATTEC's largest customers overall decreased in the current
 quarter compared to the record prior year quarter levels, with General Motors
 Corporation at $13.9 million compared to $15.9 million, Delphi Automotive
 Systems Corporation at $6.1 million compared to $7.6 million, DaimlerChrysler
 Corporation at $8.2 million compared to $8.9 million, and Ford Motor Company
 at $10.8 million compared to $13.4 million.  Sales to Mitsubishi Motor
 Manufacturing of America, Inc. increased during the current quarter and were
 $2.7 million compared to $2.3 million in the prior year quarter.
     Gross profit margins were 19.7 percent in the current quarter compared to
 22.0 percent in the prior year quarter.  The impact of the charge related to
 the realignment of human resources in the current quarter reduced gross profit
 margins by .5 percent.  This quarter's gross profit margins were also
 significantly impacted by the effects of customer plant shutdowns and the
 resulting 20% reduction in the production of vehicles STRATTEC supplies.
 Additionally, the Company reduced inventory levels by approximately
 $6.5 million in comparison to the previous quarter.
     Operating expenses were $5.2 million in the current quarter (including
 $225,000 of the pre-tax realignment charge) compared to $4.8 million in the
 prior year quarter.
     During the third quarter, 352,000 shares were repurchased under the
 Company's stock repurchase program at a cost of approximately $11.3 million.
     Harold M. Stratton II, Chairman of the Board and Chief Executive Officer,
 commented:  "During our third fiscal quarter we implemented certain
 initiatives to support both our current and long range business strategies.
 These changes included focusing more resources on the development of our
 future products and streamlining our business processes to reflect the more
 efficient operating structure we have been working on throughout this fiscal
 year.  We believe the changes we have implemented position the Company to
 react more effectively given the industry vehicle build fluctuations we have
 experienced over the last several months.  Assuming our perception of more
 normalized vehicle production during April, May and June is correct, we expect
 earnings to improve in the fiscal fourth quarter compared to this quarter."
 
     STRATTEC SECURITY CORPORATION designs, develops, manufactures and markets
 mechanical locks, electro-mechanical locks and related access control products
 for North American Automotive and other Global Automotive Manufacturers.
 
     Forward looking statements in this release are 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, 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.  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.
 
 
                         STRATTEC SECURITY CORPORATION
                             Results of Operations
                    (In Thousands except per share amounts)
 
                             Third Quarter Ended        Nine Months Ended
                             April 1,     March 26,   April 1,      March 26,
                              2001          2000        2001           2000
                                  (Unaudited)               (Unaudited)
 
     Net Sales             $ 48,179       $54,539     $150,588      $160,932
 
     Cost of Goods Sold      38,696        42,551      119,781       125,507
 
     Gross Profit             9,483        11,988       30,807        35,425
 
     Engineering, Selling &
      Administrative
       Expenses               5,182         4,847       14,872        14,630
 
     Income from Operations   4,301         7,141       15,935        20,795
 
     Interest Income            138           146          521           825
 
     Interest Expense            --            --           --            --
 
     Other Expense, Net        (227)          (91)        (403)         (240)
 
                              4,212         7,196       16,053        21,380
 
     Provision for Income
      Taxes                   1,601         2,806        6,132         8,338
 
     Net Income              $2,611        $4,390       $9,921      $ 13,042
 
     Earnings Per Share:
     Basic                     $.61          $.94        $2.26         $2.57
     Diluted                   $.60          $.91        $2.21         $2.50
 
     Average Basic
       Shares Outstanding     4,297         4,667        4,397         5,068
 
     Average Diluted
       Shares Outstanding     4,382         4,808        4,492         5,219
 
 
                         STRATTEC SECURITY CORPORATION
 
                          Condensed Balance Sheet Data
                                 (In Thousands)
 
                                                   April 1, 2001   July 2, 2000
                                                     (Unaudited)
 
     ASSETS
       Current Assets:
         Cash and cash equivalents                     $7,978        $13,915
         Receivables, net                              27,225         28,731
         Inventories                                   12,183         14,342
         Other current assets                           8,147          9,613
           Total Current Assets                        55,533         66,601
       Property, Plant and Equipment, Net              42,839         42,381
                                                      $98,372       $108,982
 
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
       Current Liabilities:
         Accounts Payable                             $14,117        $19,694
         Other                                         11,356         14,407
           Total Current Liabilities                   25,473         34,101
       Deferred Income Taxes                              299            299
       Borrowings Under Revolving Credit Facility          --             --
       Accrued Pension and Post Retirement Obligations 15,145         14,132
       Shareholders' Equity                           124,992        113,710
         Less:  Treasury Stock                        (67,537)       (53,260)
           Total Shareholders' Equity                  57,455         60,450
                                                      $98,372       $108,982
 
 SOURCE  STRATTEC SECURITY CORPORATION