Strattec Security Corporation Reports Fiscal Second Quarter Results
12 January 1999
Strattec Security Corporation Reports Fiscal Second Quarter Results
MILWAUKEE, Jan. 12 -- STRATTEC SECURITY CORPORATION
today reported record operating results for the fiscal second
quarter ended December 27, 1998.
Net sales for the three months ended December 27, 1998 were $54.5 million,
an increase of 10 percent compared to net sales of $49.7 million for the three
months ended December 28, 1997. Net income increased to $4.7 million,
compared to $3.4 million in the prior year quarter. Diluted earnings per
share for the three months ended December 27, 1998, were $.81 compared to $.59
in the prior year quarter, an increase of 37 percent. The prior year results
included a pre-tax charge of $750,000 recorded in November, 1997 relating to
the ratification of a collective bargaining agreement.
For the six months ended December 27, 1998, net sales were $94.9 million
compared to $92.6 million in the prior year period. Net income was
$7.5 million compared to $5.8 million and diluted earnings per share were
$1.29 compared to $1.00.
Several daily and weekly shipping records were set and then exceeded
during the most recent quarter. These strong shipments were primarily the
result of continued robust vehicle build schedules at our customers' plants,
higher value content on the locksets we supply and General Motors
Corporation's actions to replenish vehicle inventory balances following its
labor disruptions last summer and early fall. Sales to General Motors
Corporation were $25.9 million, an increase of 4% over very strong sales
levels in the prior year quarter. Sales to the Ford Motor Company increased
16% to $14.0 million, and sales to DaimlerChrysler Corporation increased 11%
to $7.5 million due to both increased unit production at these two customers
and a more favorable product mix.
Gross profit margins were 22.7 percent in the current quarter compared to
20.4 percent in the prior year quarter, which included the collective
bargaining agreement change. The market cost of zinc, the Company's primary
raw material, continued to be substantially lower than the prior year.
Engineering, selling and administrative expenses were $5.0 million in the
current quarter compared to $4.7 million in the prior year quarter. The
increase was primarily related to the addition of associates to support
current and future programs, and the recruiting costs to bring these people on
board.
Harold M. Stratton II, President and Chief Executive Officer, commented:
"I am very pleased with the operating results for the second fiscal quarter.
The quarter's record sales and profitability were mainly the result of our
customers surprisingly robust vehicle build schedules. Auto industry experts
forecast this robustness to continue. To the extent that it does, we believe
we will sustain the positive operating momentum in our business."
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)
(Unaudited)
Three Months Ended Six Months Ended
Dec. 27, Dec. 28, Dec. 27, Dec. 28,
1998 1997 1998 1997
Net Sales $54,529 $49,722 $94,891 $92,590
Cost of Goods Sold 42,156 39,580 73,683 73,960
Gross Profit 12,373 10,142 21,208 18,630
Engineering, Selling &
Administrative
Expenses 5,030 4,741 9,716 9,388
Income from Operations 7,343 5,401 11,492 9,242
Interest Income 232 46 476 55
Interest Expense -- (7) -- (19)
Other Income (Expense),
Net (55) 13 17 (15)
7,520 5,453 11,985 9,263
Provision for Income
Taxes 2,858 2,020 4,510 3,432
Net Income $4,662 $3,433 $7,475 $5,831
Earnings Per Share:
Basic $.83 $.60 $1.32 $1.02
Diluted $.81 $.59 $1.29 $1.00
Average Basic
Shares Outstanding 5,613 5,716 5,657 5,696
Average Diluted
Shares Outstanding 5,759 5,873 5,810 5,841
Balance Sheet Data
(In Thousands)
December 27, 1998 December 28, 1997
(Unaudited)
Cash and Cash Equivalents $17,500 $2,700
Accounts Receivable, Net 29,900 30,100
Inventories 15,700 15,400
Debt -- 1,000
Shareholders' Equity 75,100 63,000