Strattec Security Corp Reports Fiscal Q1 Results
8 October 1998
STRATTEC SECURITY CORPORATION Reports Fiscal First Quarter Results
MILWAUKEE, Oct. 7 -- STRATTEC SECURITY CORPORATION
today reported operating results for the fiscal first quarter
ended September 27, 1998.
Net sales for the three months ended September 27, 1998 were
$40.4 million, a decrease of 6 percent compared to net sales of $42.9 million
for the three months ended September 28, 1997. Net income increased to
$2.8 million, compared to $2.4 million in the prior year quarter. Diluted
earnings per share for the three months ended September 27, 1998, were $.48
compared to $.41 in the prior year quarter, an increase of 17 percent.
Sales to Chrysler Corporation increased by $1.4 million or 30 percent in
the current quarter compared to the prior year levels. The increase was
primarily due to Chrysler's increased vehicle production schedules and higher
value mechanical and electrical content in the locksets which STRATTEC
supplies. Labor disruptions early in the quarter at General Motors
Corporation reduced sales to this customer by $4.4 million or 22 percent
compared to the prior year quarter. Sales to Ford Motor Company were
comparable to the prior year levels. During the quarter STRATTEC began
production volume shipments to Mitsubishi Motor Manufacturing of America in
support of the launch of the 1999 Gallant. This is STRATTEC's initial program
with Mitsubishi.
Gross profit margins were 21.9 percent in the current quarter compared to
19.8 percent in the prior year quarter. The market cost of zinc, the
Company's primary raw material, continued to be substantially lower than the
prior year. Operating expenses were essentially the same as the prior year
quarter.
Harold M. Stratton II, President and Chief Executive Officer, commented:
"Despite lingering effects from the General Motors strike, we are pleased with
the operating results for our first fiscal quarter. As we move into the
seasonally stronger second fiscal quarter, we believe robust vehicle build
schedules at our customer's plants will result in a continuation of the
positive operating momentum of our business."
In addition to its operating results, STRATTEC announced that it
repurchased 118,500 of its outstanding shares under the Company's stock
repurchase program at a cost of $3,230,000.
STRATTEC SECURITY CORPORATION designs, develops, manufactures and markets
mechanical locks, electro-mechanical locks and related security products for
major 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, demand for the Company's
products and costs of operations. 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)
Three Months Ended
September 27, 1998 September 28, 1997
(Unaudited)
Net Sales $ 40,362 $ 42,868
Cost of Goods Sold 31,527 34,380
Gross Profit 8,835 8,488
Engineering, Selling &
Administrative Expenses 4,686 4,647
Income from Operations 4,149 3,841
Interest Income 244 9
Interest Expense -- 12
Other Income (Expense), Net 72 (28)
4,465 3,810
Provision for Income Taxes 1,652 1,412
Net Income $ 2,813 $ 2,398
Earnings Per Share:
Earnings Per Share:
Basic $ .49 $ .42
Diluted $ .48 $ .41
Average Basic
Shares Outstanding 5,701 5,675
Average Diluted
Shares Outstanding 5,860 5,810
Balance Sheet Data
(In Thousands)
September 27, 1998 September 28, 1997
(Unaudited)
Cash and Cash Equivalents $ 10,600 $ 200
Accounts Receivable, Net 29,100 31,500
Inventories 15,000 13,900
Debt -- 2,400
Shareholders' Equity 70,100 59,100