STRATTEC SECURITY CORPORATION Reports Fiscal Second Quarter Results
MILWAUKEE, Jan. 15, 2004 -- STRATTEC SECURITY CORPORATION today reported operating results for the fiscal second quarter ended December 28, 2003.
Net sales for the Company's second quarter ended December 28, 2003 were $50.0 million, compared to net sales of $48.7 million for the second quarter ended December 29, 2002. Net income for the period was $4.6 million, compared to $4.0 million in the prior year quarter. Diluted earnings per share for the period were $1.21 compared to $1.05 in the prior year quarter.
For the six months ended December 28, 2003, net sales were $94.4 million compared to net sales of $96.6 million in the prior year period. Net income was $8.2 million in both six month periods and diluted earnings per share were $2.15 compared to $2.11.
Overall sales to STRATTEC's largest customers decreased slightly in the current quarter compared to the prior year quarter levels. Sales to General Motors and Ford Motor Company decreased, with General Motors at $14.0 million compared to $15.7 million and Ford at $9.7 million compared to $10.1 million. Mitsubishi Motor Manufacturing of America, Inc. remained flat at $2.1 million, while DaimlerChrysler increased to $9.5 million compared to $8.1 million, and Delphi Corporation increased to $8.0 million compared to $7.5 million in the prior year quarter. Sales to heavy truck and other industrial customers modestly increased compared to the prior year quarter as did aftermarket sales.
Gross profit margins were 24.2 percent in the current quarter compared to 22.5 percent in the prior year quarter. The gross profit margin improvement during the current quarter was attributed primarily to our on-going manufacturing process improvement initiatives, along with a favorable Mexican peso to U.S. dollar exchange rate and product mix.
Operating expenses were $5.0 million in the current quarter, compared to $4.6 million in the prior year quarter, and $4.9 million in the first quarter.
During the current quarter, the Company repurchased 20,000 STRATTEC SECURITY CORPORATION shares under the Company's stock repurchase program at a cost of $1.1 million.
STRATTEC SECURITY CORPORATION designs, develops, manufactures and markets mechanical locks, electro-mechanical locks and related access control products for North American and other global automotive manufacturers.
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.
STRATTEC SECURITY CORPORATION
Results of Operations
(In Thousands except per share amounts)
Second Quarter Ended Six Months Ended
December 28, December 29, December 28, December 29,
2003 2002 2003 2002
(Unaudited) (Unaudited)
Net Sales $ 50,014 $ 48,680 $ 94,434 $ 96,586
Cost of Goods Sold 37,912 37,742 71,874 74,295
Gross Profit 12,102 10,938 22,560 22,291
Engineering, Selling &
Administrative Expenses 4,983 4,571 9,901 9,182
Income from Operations 7,119 6,367 12,659 13,109
Interest Income 88 85 177 183
Interest Expense - - - -
Other Income (Expense),
Net 184 (45) 286 (248)
7,391 6,407 13,122 13,044
Provision for Income
Taxes 2,772 2,371 4,921 4,827
Net Income $4,619 $4,036 $8,201 $8,217
Earnings Per Share:
Basic $1.23 $1.07 $2.18 $2.15
Diluted $1.21 $1.05 $2.15 $2.11
Average Basic
Shares Outstanding 3,765 3,756 3,762 3,816
Average Diluted
Shares Outstanding 3,824 3,832 3,821 3,889
Other
Capital Expenditures $1,926 $576 $3,022 $1,373
Depreciation &
Amortization $1,942 $1,953 $3,959 $3,916
STRATTEC SECURITY CORPORATION
Condensed Balance Sheet Data
(In Thousands)
December 28, June 29,
2003 2003
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $36,332 $29,902
Receivables, net 28,688 31,173
Inventories 10,090 7,884
Other current assets 10,646 12,127
Total Current Assets 85,756 81,086
Deferred Income Taxes 1,973 1,973
Investment in Joint Venture 1,379 1,141
Property, Plant and Equipment, Net 32,797 33,894
$121,905 $118,094
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $17,551 $13,990
Other 11,995 15,819
Total Current Liabilities 29,546 29,809
Accrued Pension and Post Retirement
Obligations 15,251 19,190
Shareholders' Equity 179,453 169,953
Less: Treasury Stock (102,345) (100,858)
Total Shareholders' Equity 77,108 69,095
$121,905 $118,094