STRATTEC SECURITY Reports Record Fiscal Second Quarter Results
13 January 2000
STRATTEC SECURITY CORPORATION Reports Record Fiscal Second Quarter Results
MILWAUKEE, Jan. 12 --
STRATTEC SECURITY CORPORATION today reported record operating
results for the fiscal second quarter ended December 26, 1999.
Net sales for the three months ended December 26, 1999 were $56.7 million,
an increase of 4 percent compared to net sales of $54.5 million for the three
months ended December 27, 1998. Net income increased to $4.9 million,
compared to $4.7 million in the prior year quarter. Diluted earnings per
share for the three months ended December 26, 1999, were $ .95 compared to
$.81 in the prior year quarter, an increase of 17 percent.
For the six months ended December 26, 1999, net sales were $106.4 million
compared to $94.9 million in the prior year period. Net income was
$8.7 million compared to $7.5 million and diluted earnings per share were
$1.60 compared to $1.29.
During the current quarter, sales to General Motors Corporation and Delphi
Automotive Systems Corporation were $26.4 million, an increase of 2% over very
strong sales levels in the prior year quarter following the settlement of GM's
labor disruption during the summer of 1998. Sales to the Ford Motor Company
were comparable to the prior year quarter levels due to a combination of model
mix changes, and lower Taurus/Sable production. Sales to DaimlerChrysler
Corporation increased 18% to $8.9 million. The increase was primarily due to
increased vehicle production schedules and higher value mechanical and
electrical content in the locksets STRATTEC supplies. Sales to the Mitsubishi
Motor Manufacturing of America increased to $2.2 million compared to $600,000
in the prior year quarter. This increase was attributed to STRATTEC supplying
locksets on the newly introduced Mitsubishi Eclipse.
Gross profit margins were 22.5 percent in the current quarter compared to
22.7 percent in the prior year quarter. The decrease in gross profit margins
is primarily attributed to appreciation of the Mexican peso and higher wage
inflation experienced at our Mexico assembly facility in comparison to the
prior year quarter.
Engineering, selling and administrative expenses were $4.9 million in the
current quarter compared to $5.0 million in the prior year quarter.
During the second quarter, 780,900 shares were repurchased under the
Company's Stock Repurchase Program at a cost of approximately $26.8 million.
Harold M. Stratton II, Chairman of the Board and Chief Executive Officer,
commented: "The strength of the auto industry and our internal efforts have
contributed to the on-going positive momentum in our core business.
Additionally, our recently announced alliance with Witte Velbert in Germany
and our internal product developments gives us significant new opportunities
for the future. We look forward to building upon our strong core business
with these opportunities."
STRATTEC SECURITY CORPORATION designs, develops, manufactures and markets
mechanical locks, electro-mechanical locks and related access control 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, in particular, relating to
the automotive industry, consumer demand for the Company's and its customers
products, competitive and technological developments, foreign currency
fluctuations, Year 2000 compliance issues and costs of operations.
Shareholders, potential investors and other readers are urged to consider
these factors carefully in evaluating the 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)
(Unaudited)
Three Months Ended Six Months Ended
Dec. 26, Dec. 27, Dec. 26, Dec. 27,
1999 1998 1999 1998
Net Sales $ 56,726 $ 54,529 $ 106,393 $ 94,891
Cost of Goods Sold 43,977 42,156 82,956 73,683
Gross Profit 12,749 12,373 23,437 21,208
Engineering, Selling &
Administrative Expenses 4,895 5,030 9,783 9,716
Income from Operations 7,854 7,343 13,654 11,492
Interest Income 291 232 679 476
Interest Expense -- -- -- --
Other Income (Expense),
Net (41) (55) (149) 17
8,104 7,520 14,184 11,985
Provision for
Income Taxes 3,160 2,858 5,532 4,510
Net Income $ 4,944 $ 4,662 $ 8,652 $ 7,475
Earnings Per Share:
Basic $.98 $.83 $ 1.64 $1.32
Diluted $.95 $.81 $ 1.60 $1.29
Average Basic
Shares Outstanding 5,026 5,613 5,269 5,657
Average Diluted
Shares Outstanding 5,177 5,759 5,424 5,810
Balance Sheet Data
(In Thousands)
December 26, 1999 December 27, 1998
(Unaudited)
Cash and Cash Equivalents $10,500 $17,500
Accounts Receivable, Net 30,100 29,900
Inventories 16,300 15,700
Debt -- --
Shareholders' Equity 60,700 75,100