STRT Strattec Security Corporation

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): February 6, 2025

STRATTEC SECURITY CORPORATION

(Exact Name of Registrant as Specified in Charter)

Wisconsin		0-25150		39-1804239
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

 

3333 West Good Hope Road, Milwaukee, Wisconsin 53209

(Address of Principal Executive Offices, and Zip Code)

(414) 247-3333

Registrant’s Telephone Number, Including Area Code

 

 

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

		Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

		Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

		Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, $.01 par value		STRT		The Nasdaq Global Stock Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Section 2 – Financial Information

 

Item 2.02. Results of Operations and Financial Condition.

 

On February 6, 2025, STRATTEC SECURITY CORPORATION (the “Company”) issued a press release (the “Press Release”) announcing results for the fiscal second quarter ended December 29, 2024. A copy of the Press Release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

 

Pursuant to General Instruction B.2 of Current Report on Form 8-K, the information in this Item 2.02 and Exhibit 99.1 is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section. Furthermore, the information in this Item 2.02 and Exhibit 99.1 shall not be deemed to be incorporated by reference into the filings of STRATTEC under the Securities Act of 1933, as amended (the “Securities Act”), except as may be expressly set forth by specific reference in such filing.

 

Item 7.01 Regulation FD Disclosure.

 

As described in “Item 2.02 Results of Operations and Financial Condition” above, on February 6, 2025, the Company issued a Press Release announcing earnings results for the fiscal first quarter ended December 29, 2024 and an Investor Presentation containing supplemental fiscal first quarter earnings and other current financial information. The Press Release and Investor Presentation issued in connection with the announcement are attached as Exhibit 99.1 to this Current Report on Form 8-K.

 

Pursuant to General Instruction B.2 of Current Report on Form 8-K, the information in this Item 7.01 and Exhibit 99.1 is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. Furthermore, the information in this Item 7.01 and Exhibit 99.1 shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act, except as may be expressly set forth by specific reference in such filing.

 

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description
99.1	Press Release of STRATTEC SECURITY CORPORATION, issued February 6, 2025
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

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SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

STRATTEC SECURITY CORPORATION

 

By: /s/ Matthew Pauli

Matthew Pauli, Senior Vice President and

Chief Financial Officer

 

 

Date: February 6, 2025

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News Release

 

3333 West Good Hope Rd. • Milwaukee, Wisconsin 53209

IMMEDIATE RELEASE

STRATTEC SECURITY CORPORATION
Generated $9.4 million in Cash from Operations in Fiscal 2025 Second Quarter

MILWAUKEE, WI, February 6, 2025 – STRATTEC SECURITY CORPORATION (Nasdaq: STRT) (“Company”), a leading provider of smart vehicle access, security and authorization solutions for the global automotive industry, reported financial results for its second quarter of fiscal year 2025, which ended December 29, 2024.

STRATTEC President and CEO Jennifer Slater said, “Our solid financial results reflect the focus the team is placing on our key priorities of stabilizing the business, optimizing costs, and identifying where our engineering innovation commands the right to win. Sales growth was the result of production trends with key customers and, in particular, with the platforms on which we have higher value content. We made progress this last quarter to strengthen our earnings power as we restructured our U.S. manufacturing operations by reducing the number of shifts, which is expected to generate $1.2 million in annualized savings. In addition, we continued to unlock value on our balance sheet as we collected on our tooling investments.”

Ms. Slater concluded, “Talent is critical for our transformation, and we made further investments this quarter. We are gaining traction with our customers as our new chief commercial officer identifies opportunities for both new projects as well as pricing that reflects the value of our product offering. We recognize that an engaged and motivated team generates creativity and excitement for our future and we are creating a stronger, more open culture with new leadership in human resources. Importantly as well, we now have the financial leadership needed to support our strategic objectives. We are making solid progress as a team and, in addition to these strategic efforts, we are proactively addressing the potential challenges the tariffs may present.”

FY 2025 Second Quarter Financial Summary
(compared with prior-year period, except where otherwise noted)

Net sales were $129.9 million, an increase of $11.4 million, or 9.6%, compared with the second quarter prior year. Sales growth was driven by $6.0 million of net new program launches, $1.3 million of higher content and product mix. In addition,

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net sales on current platforms increased $7.3 million as a result of customers building inventory, slightly higher production levels and the prior year second quarter reflecting increased customer plant shutdowns. This growth more than offset the net impact of the prior year period’s one-time pricing benefits of $3.9 million. Sales growth was broad based across most of the product portfolio, excluding keys & locksets.

Gross profit increased $3.7 million to $17.2 million, from higher volume and a $3.5 million benefit from foreign currency translation. This was mostly offset by increased labor costs in Mexico, a $0.6 million bonus provision and the favorable retroactive pricing in the prior year second quarter. Gross margin was 13.2% compared with 11.4%.

Engineering, selling and administrative expenses increased $1.6 million, or 11.7%, to $15.0 million. The increase reflected continued investments in the business, an annual bonus provision of $0.8 million and $0.3 million in restructuring charges. No bonus provision was recorded in the prior-year period.

Operating income increased $2.0 million to $2.1 million and was 1.6% of sales. Investment income increased $0.3 million on higher cash balances, while changes in foreign currency exchange rates resulted in a $1.4 million increase in other expense. Net income attributable to STRATTEC was $1.3 million compared with $1.1 million last year.

Diluted earnings per share were $0.32 compared with $0.26 last year. On an adjusted basis, net income attributable to STRATTEC1 grew 86% to $2.6 million. Adjusted diluted earnings per share1 increased $0.29, or 81% to $0.65. Adjusted EBITDA1 for the quarter was $8.0 million compared with $5.0 million in the prior-year period.

Balance Sheet and Liquidity

Second quarter fiscal 2025 cash flow from operations was $9.4 million, bringing year-to-date cash flow from operations to $20.8 million. Improved working capital management and recovery of pre-production tooling costs benefited operating cash flows. Capital expenditures in the second quarter of fiscal 2025 were $0.9 million, down $0.6 million from the prior year period.

At December 29, 2024, STRATTEC had $42.6 million in cash and cash equivalents, up $8.2 million from the end of the first quarter of fiscal 2025.

At December 29, 2024 the Company had $13 million of outstanding borrowings under its joint venture revolving credit facility, which is unchanged from the end of fiscal 2024. Total availability under existing lines of credit was $47 million at December 29, 2024.

Second Quarter Fiscal Year 2025 Webcast and Conference Call

The Company will host a conference call and webcast tomorrow, Friday, February 7, 2025, at 9:00 am Eastern Time to review the financial and operating results for the period ended December 29, 2024, and provide an update on its transformation progress. A question-and-answer session will follow.

You can access the call by phoning (201) 689-8470 or find the webcast and accompanying slide presentation at investors.strattec.com.

A telephonic replay will be available from 12:00 p.m. ET on the day of the call through Friday, February 21, 2025. To listen to the archived call, dial (412) 317-6671 and enter a replay PIN 13751178. The webcast replay will be available on the Investor Relations section of the Company’s website where a transcript will be posted once available.

About STRATTEC

STRATTEC is a leading global provider of advanced automotive access, security & authorization and select user interface solutions. With a history spanning over 110 years, STRATTEC has consistently been at the forefront of innovation in vehicle security, transitioning from mechanical to integrated electro-mechanical systems. The Company serves a broad range of

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customers, including leading automotive OEMs, offering power access solutions and advanced security systems that include door handles, lift gates, latches, and key fobs.

For more information on STRATTEC and its solutions, visit www.strattec.com.

Safe Harbor Statement
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 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, changes in warranty provisions and customer product recall policies, work stoppages at the Company or at the location of its key customers as a result of labor disputes, foreign currency fluctuations, uncertainties stemming from U.S. trade policies, tariffs and reactions to the same from foreign countries, matters adversely impacting the timing and availability of component parts and raw materials needed for the production of our products and the products of our customers and fluctuations in our costs of operation. 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.

Use of Non-GAAP Financial Metrics and Additional Financial Information
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, STRATTEC provides Adjusted Non-GAAP information as additional information for its operating results. References to Adjusted Non-GAAP information are to non-GAAP financial measures. These measures are not required by, in accordance with, or an alternative for, GAAP and may be different from similarly titled non-GAAP financial measures used by other companies. STRATTEC’s management uses these measures to make strategic decisions, establish budget plans and forecasts, identify trends affecting STRATTEC’s business, and evaluate performance. Management believes that providing these non-GAAP financial measures to investors, as a supplement to GAAP financial measures, will help investors evaluate STRATTEC’s core operating and financial performance and business trends consistent with how management evaluates such performance and trends. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures.

Contact:

Deborah K. Pawlowski

Alliance Advisors IR

Phone: 716-843-3908

Email: dpawlowski@allianceadvisors.com

FINANCIAL TABLES FOLLOW

 

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STRATTEC SECURITY CORPORATION
Condensed Results of Operations
(In Thousands, except per share amounts)
(Unaudited)
	Three Months Ended								Six Months Ended
	December 29, 2024				December 31, 2023				December 29, 2024				December 31, 2023
Net sales	$	129,919			$	118,532			$	268,971			$	253,938
Cost of goods sold		112,768				105,035				232,899				221,721
Gross profit		17,151				13,497				36,072				32,217
Engineering, selling and administrative expenses		15,017				13,439				28,875				26,053
Income from operations		2,134				58				7,197				6,164
Interest expense		(257	)			(219	)			(552	)			(439	)
Investment income		408				107				757				194
Other (expense) income, net		(482	)			1,098				(353	)			967
Income before provision for       income taxes and non-controlling interest		1,803				1,044				7,049				6,886
Provision for income taxes		405				264				1,903				1,651
Net income		1,398				780				5,146				5,235
Net income (loss) attributable to non-       controlling interest		79				(242	)			124				48
Net income attributable to STRATTEC       SECURITY CORPORATION	$	1,319			$	1,022			$	5,022			$	5,187
Earnings per share attributable to       STRATTEC SECURITY CORPORATION:
Basic	$	0.33			$	0.26			$	1.25			$	1.31
Diluted	$	0.32			$	0.26			$	1.24			$	1.30
Weighted Average shares outstanding:
Basic		4,035				3,976				4,020				3,962
Diluted		4,070				3,998				4,058				3,986

 

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STRATTEC SECURITY CORPORATION
Condensed Balance Sheet Data
(In Thousands, except share amounts)
(Unaudited)
	December 29, 2024				June 30, 2024
ASSETS
Current Assets:
Cash and cash equivalents	$	42,625			$	25,410
Receivables, net		91,567				99,297
Inventories:
Finished products		18,808				19,833
Work in process		13,462				15,461
Purchased materials		49,241				46,355
Inventories, net		81,511				81,649
Pre-production costs		11,651				22,173
Value-added tax recoverable		21,083				19,684
Other current assets		5,497				5,601
Total current assets		253,934				253,814
Deferred income taxes		17,102				17,593
Other long-term assets		5,587				6,698
Net property, plant and equipment		79,272				86,184
	$	355,895			$	364,289
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	50,615			$	54,911
Accrued Liabilities:
Payroll and benefits		15,604				28,953
Value-added tax payable		10,054				9,970
Environmental		1,390				1,390
Warranty		10,946				10,695
Other current liabilities		8,966				12,369
Total current liabilities		97,575				118,288
Borrowings under credit facilities		13,000				13,000
Postemployment obligations		12,563				2,429
Other long-term liabilities		4,602				4,957
Shareholders’ Equity:
Common stock, authorized 18,000,000 shares, $.01 par value, 7,635,883    issued shares at December 29, 2024 and 7,586,920 issued shares at    June 30, 2024		76				76
Capital in excess of par value		102,118				101,024
Retained earnings		255,634				250,612
Accumulated other comprehensive loss		(17,827	)			(15,689	)
Less: treasury stock, at cost (3,597,299 shares at December 29, 2024 and    3,598,126 shares at June 30, 2024)		(135,465	)			(135,478	)
Total STRATTEC SECURITY CORPORATION shareholders’ equity		204,536				200,545
Non-controlling interest		23,619				25,070
Total shareholders’ equity		228,155				225,615
	$	355,895			$	364,289

 

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STRATTEC SECURITY CORPORATION
Condensed Cash Flow Statement Data
(In Thousands)
(Unaudited)
		Three Months Ended								Six Months Ended
		December 29,  2024				December 31,  2023				December 29, 2024				December 31, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$	1,398			$	780			$	5,146			$	5,235
Adjustments to reconcile net income to net cash   provided by (used in) operating activities:
Depreciation			3,544				4,330				7,206				8,715
Foreign currency transaction gain			(188	)			(123	)			(1,193	)			(349	)
Unrealized loss (gain) on peso forward    contracts			284				(826	)			936				(826	)
Stock-based compensation expense			891				479				1,079				984
Loss on settlement of postemployment obligation			—				—				283				—
Change in operating assets and liabilities:
Receivables			10,568				16,845				7,379				19,178
Inventories			2,283				(8,072	)			138				(11,842	)
Prepaid and other assets			1,963				(4,739	)			7,844				(12,404	)
Accounts payable			(9,026	)			(9,083	)			(3,990	)			(16,441	)
Accrued liabilities			(2,542	)			(2,894	)			(4,580	)			410
Other, net			269				261				533				426
Net cash provided by (used in) operating activities			9,444				(3,042	)			20,781				(6,914	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of interest in joint ventures			—				—				—				2,000
Purchase of property, plant and equipment			(917	)			(1,473	)			(2,990	)			(4,393	)
Net cash used in investing activities			(917	)			(1,473	)			(2,990	)			(2,393	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under credit facilities			—				—				3,000				2,000
Repayment of borrowings under credit facilities			—				—				(3,000	)			(2,000	)
Employee stock purchases			15				20				28				37
Net cash provided by financing activities			15				20				28				37
Foreign currency impact on cash			(320	)			405				(604	)			274
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS			8,222				(4,090	)			17,215				(8,996	)
CASH AND CASH EQUIVALENTS
Beginning of period			34,403				15,665				25,410				20,571
End of period		$	42,625			$	11,575			$	42,625			$	11,575
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Income taxes		$	4,458			$	682			$	8,539			$	1,446
Interest		$	279			$	222			$	559			$	440
Non-cash investing activities:
Change in capital expenditures in accounts payable		$	56			$	18			$	(450	)		$	(175	)

 

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STRATTEC SECURITY CORPORATION ("STRATTEC")
Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except per share amounts)
		Fiscal 2024																Fiscal 2025
		Q1			Q2			Q3			Q4			Total				Q1			Q2			Q3			Q4			Total
ADJUSTED NET SALES:
Net Sales (GAAP)			135,406			118,532			140,773			143,055		$	537,766				139,052			129,919			-			-		$	268,971
Adjustments:
Retroactive FY23 one-time pricing recovery			(7,950	)		(1,551	)		(397	)		175			(9,723	)			-			-			-			-			-
Adjusted Sales (Non-GAAP)			127,456			116,981			140,376			143,230			528,043				139,052			129,919			-			-			268,971
ADJUSTED EBITDA:
Net income attributable to STRATTEC (GAAP)		$	4,165		$	1,022		$	1,506		$	9,620		$	16,313			$	3,703		$	1,319		$	-		$	-		$	5,022
Net income (loss) attributable to non-controlling interest			290			(242	)		(380	)		447			115				45			79			-			-			124
Provision for income tax			1,387			264			546			1,578			3,775				1,498			405			-			-			1,903
Other (income) expense, net			131			(1,098	)		208			(1,958	)		(2,717	)			(129	)		482			-			-			353
Investment and interest income			(87	)		(107	)		(143	)		(235	)		(572	)			(349	)		(408	)		-			-			(757	)
Interest expense			220			219			222			239			900				295			257			-			-			552
Income from operations			6,106			58			1,959			9,691			17,814				5,063			2,134			-			-			7,197
Adjustments:
Depreciation			4,385			4,330			4,059			3,773		$	16,547				3,662			3,544			-			-		$	7,206
Non-cash stock-based compensation			505			479			240			243			1,467				188			891			-			-			1,079
Restructuring and similar charges			-			-			-			-			-				-			265			-			-			265
Retroactive FY23 one-time pricing recovery, net			(7,078	)		(641	)		(298	)		24			(7,993	)			-			-			-			-			-
Executive transition costs			-			774			211			73			1,058				941			921			-			-			1,862
Business transformation costs			-			-			-			-			-				73			215			-			-			288
			(2,188	)		4,942			4,212			4,113			11,079				4,864			5,836			-			-			10,700
Adjusted EBITDA (Non-GAAP)		$	3,918		$	5,000		$	6,171		$	13,804		$	28,893			$	9,927		$	7,970		$	-		$	-		$	17,897

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Adjusted EBITDA as a % of Adjusted Net Sales			3.1	%		4.3	%		4.4	%		9.6	%		5.5	%			7.1	%		6.1	%								6.7	%
ADJUSTED NET INCOME AND EARNINGS/(LOSS) PER SHARE:
Net income attributable to STRATTEC (GAAP)		$	4,165		$	1,022		$	1,506		$	9,620		$	16,313			$	3,703		$	1,319		$	-		$	-		$	5,022
Adjustments:
Restructuring and similar charges			265			3			-			63			331				-			265			-			-			265
Retroactive FY23 one-time pricing recovery, net			(7,078	)		(641	)		(298	)		24			(7,993	)			-			-			-			-			-
Executive transition costs			-			973			211			73			1,257				1,224			1,225			-			-			2,449
Business transformation costs			-			-			-			-			-				73			215			-			-			288
Non-controlling interest impact on above adjustments			1,014			181			55			22			1,272				-			-			-			-			-
Tax effect on above adjustments			1,305			(116	)		7			(41	)		1,155				(292	)		(384	)		-			-			(676	)
			(4,494	)		400			(25	)		141			(3,978	)			1,005			1,321			-			-			2,326
Adjusted Net Income/(Loss) attributable to STRATTEC (Non-GAAP)		$	(329	)	$	1,422		$	1,481		$	9,761		$	12,335			$	4,708		$	2,640		$	-		$	-		$	7,348
Weighted Average Basic Shares Outstanding			3,948			3,976			3,988			3,988			3,975				4,005			4,035			-			-			4,020
Weighted Average Diluted Shares Outstanding			3,974			3,998			4,017			4,027			4,004				4,046			4,070			-			-			4,058
Diluted earnings per share (GAAP)		$	1.05		$	0.26		$	0.37		$	2.39		$	4.07			$	0.92		$	0.32		$	-		$	-		$	1.24
Adjusted dilutive earnings/(loss) per share (Non-GAAP)		$	(0.08	)	$	0.36		$	0.37		$	2.42		$	3.08			$	1.16		$	0.65		$	-		$	-		$	1.81

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v3.25.0.1

Document and Entity Information	Feb. 06, 2025
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Feb. 06, 2025
Entity Registrant Name	STRATTEC SECURITY CORPORATION
Entity Central Index Key	0000933034
Entity Emerging Growth Company	false
Entity Incorporation, State or Country Code	WI
Entity File Number	0-25150
Entity Tax Identification Number	39-1804239
Entity Address, Address Line One	3333 West Good Hope Road
Entity Address, City or Town	Milwaukee
Entity Address, State or Province	WI
Entity Address, Postal Zip Code	53209
City Area Code	(414)
Local Phone Number	247-3333
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $.01 par value
Trading Symbol	STRT
Security Exchange Name	NASDAQ

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