Exhibit 99.1

FOR RELEASE AT 3:00 PM CDT

Contact:  Pat Hansen
Senior Vice President and
Chief Financial Officer
414-247-3435
www.strattec.com

STRATTEC SECURITY CORPORATION
REPORTS FISCAL 2017 FOURTH QUARTER AND FULL YEAR
 OPERATING RESULTS
 
Milwaukee, Wisconsin – August 10, 2017-- STRATTEC SECURITY CORPORATION (“STRATTEC” or the “Company”) (NASDAQ:STRT) today reported operating results for the fiscal fourth quarter and year ended July 2, 2017.

Fourth Quarter
 
Net sales for the fourth quarter ended July 2, 2017 were $108.4 million, compared to net sales of $108.3 million for the fourth quarter ended July 3, 2016. The 2016 fiscal fourth quarter was a 14 week period while fiscal 2017’s fourth quarter was the typical 13 week period. The impact of the additional week of customer shipments during the prior year quarter increased sales during that quarter by approximately $7.5 million. Net income was $1.8 million in the current year quarter compared to $584,000 in the prior year quarter. Diluted earnings per share for the 2017 fourth quarter were $0.48 compared to $0.16 in the prior year quarter. The lower net income for the prior year quarter was primarily attributed to STRATTEC’s one third share ($2 million pre-tax or $1.26 million after tax) of a $6 million non-cash impairment charge related to Vehicle Access Systems Technology LLC’s (“VAST LLC”) investment in Minda VAST Access Systems joint venture in India. STRATTEC owns a one third interest in VAST LLC.  STRATTEC’s one third share of the impairment charge reduced its earnings per share in the prior year quarter by $0.35.
 

Net sales to each of our customers in the current year quarter and prior year quarter were as follows (in thousands):
 
   
Three Months Ended
 
   
July 2, 2017
   
July 3, 2016
 
             
Fiat Chrysler Automobiles
 
$
25,984
   
$
28,331
 
General Motors Company
   
22,518
     
21,765
 
Ford Motor Company
   
16,250
     
15,745
 
Tier 1 Customers
   
17,678
     
19,711
 
Commercial and Other OEM Customers
   
17,818
     
14,426
 
Hyundai / Kia
   
8,182
     
8,369
 
TOTAL
 
$
108,430
   
$
108,347
 

Sales to Fiat Chrysler Automobiles in the current year quarter decreased primarily due to discontinuing production on the Chrysler 200 and Dodge Dart effective December 2016, both vehicles for which we supplied components. Sales to General Motors Company and Ford Motor Company in the current year quarter were up slightly in comparison to the prior year quarter, which had one additional shipping week during that period.  Sales to Tier 1 Customers decreased in the current year quarter due to lower sales on our driver control products. Sales to Commercial and Other OEM Customers during the current year quarter increased in comparison to the prior year quarter. These customers primarily represent purchasers of vehicle access control products, such as latches and fobs, which have been developed in recent years to complement our historic core business of locks and keys.  The decreased sales to Hyundai / Kia in the current year quarter were principally due to one less shipping week on the Kia Sedona minivan for which we supply components in comparison to the prior year quarter.
 

Gross profit margins were 13.5 percent in the current year quarter compared to 14.0 percent in the prior year quarter.  The slight decrease in gross profit margin in the current year quarter was primarily attributed to asset impairment write-downs related to STRATTEC Advanced Logic, LLC, our biometric joint venture, and startup costs associated with our new Leon, Mexico facility. These items were offset by the reversal of warranty expense provisions and recoveries along with a favorable Mexican Peso to U.S. Dollar exchange rate affecting our operations in Mexico.

Operating expenses were $11.9 million in the current year quarter and $11.5 million in the prior year quarter.  As a percent of net sales in the current year quarter operating expenses were 10.8% compared to 10.6% in the prior year quarter.
 
Included in Other Income (Expense), Net in the current year quarter compared to the prior year quarter were the following items (in thousands of dollars):
 
   
July 2,
2017
   
July 3,
2016
 
             
             
Equity Earnings (Loss) of VAST LLC Joint Venture
 
$
1,110
   
$
(1,328
)
Equity Loss of STRATTEC Advanced Logic, LLC
   
(572
)
   
(421
)
Net Foreign Currency Transaction Gain (Loss)
   
64
     
(18
)
Other
   
12
     
124
 
   
$
614
   
$
(1,643
)

The prior year quarter equity loss in VAST LLC joint venture relates to STRATTEC’s share of the Minda VAST Access Systems impairment charge of $2 million previously discussed.

The lower tax provision in the current year quarter was attributed to a higher tax credit for research and development costs on new products in comparison to the prior year quarter end.
 

Full Year
 
 For the fiscal year ended July 2, 2017, STRATTEC net sales were $417.3 million compared to net sales of $401.4 million during fiscal 2016.  Net income for fiscal 2017 was $7.2 million compared to net income of $9.1 million in the prior year.  Diluted earnings per share for the current year were $1.96 compared to diluted earnings per share of $2.51 in the prior year.

Frank Krejci, President and CEO commented: “As a Company, we are not satisfied with this year’s profitability.   We have made progress in positioning ourselves to deliver new business during the upcoming year.  Costs are being reduced where opportunities have not materialized as planned.  Our new manufacturing plant in Leon, Mexico, will begin production on a new product line within the next month.  STRATTEC Advanced Logic, our biometric technology joint venture, has proved to be much more costly than planned.  As a result, we have taken steps to drastically reduce our exposure to that business.
 
For the upcoming year, we are focused on new product introduction, fine tuning processes and making capital investments to insure quality and improve efficiency as the automotive market has shown some recent signs of weakening.”

STRATTEC designs, develops, manufactures and markets automotive Access Control Products, including mechanical locks and keys, electronically enhanced locks and keys, steering column and instrument panel ignition lock housings, latches, power sliding side door systems, power lift gate systems, power deck lid systems, door handles and related products. These products are provided to customers in North America, and on a global basis through a unique strategic relationship with WITTE Automotive of Velbert, Germany and ADAC Automotive of Grand Rapids, Michigan.  Under this relationship, STRATTEC, WITTE and ADAC market each company's products to global customers under the “VAST” brand name.  STRATTEC’s history in the automotive business spans over 100 years.
 

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, changes in warranty provisions and customers’ product recall policies, foreign currency fluctuations, and costs of operations (including fluctuations in the cost of raw materials).  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
Condensed Results of Operations
(In Thousands, except per share amounts)

   
Fourth Quarter Ended
   
Years Ended
 
   
July 2, 2017
   
July 3, 2016
   
July 2, 2017
   
July 3, 2016
 
   
(Unaudited)
   
(Unaudited)
       
                         
Net Sales
 
$
108,430
   
$
108,347
   
$
417,325
   
$
401,419
 
Cost of Goods Sold
   
93,771
     
93,152
     
357,163
     
336,594
 
Gross Profit
   
14,659
     
15,195
     
60,162
     
64,825
 
                                 
Engineering, Selling & Administrative Expenses
   
11,892
     
11,467
     
46,460
     
43,917
 
Income from Operations
   
2,767
     
3,728
     
13,702
     
20,908
 
                                 
Interest Income
   
4
     
6
     
136
     
25
 
Interest Expense
   
(141
)
   
(81
)
   
(417
)
   
(176
)
Other Income (Expense), Net
   
614
     
(1,643
)
   
2,973
     
(1,567
)
Income before Provision for Income Taxes and Non-Controlling Interest
    3,244      
2,010
     
16,394
     
19,190
 
                                 
Provision for Income Taxes
   
224
     
211
     
4,284
     
5,068
 
                                   
Net Income
 
$
3,020
   
$
1,799
   
$
12,110
   
$
14,122
 
                                 
Net Income Attributable to Non-Controlling Interest
   
1,245
     
1,215
     
4,913
     
4,973
 
                                 
Net Income Attributable to STRATTEC SECURITY CORPORATION
 
$
1,775
   
$
584
   
$
7,197
   
$
9,149
 
                                 
Earnings Per Share:
                               
Basic
 
$
0.49
   
$
0.16
   
$
2.01
   
$
2.55
 
Diluted
 
$
0.48
   
$
0.16
   
$
1.96
   
$
2.51
 
Average Basic Shares Outstanding
   
3,595
     
3,565
     
3,588
     
3,559
 
                                 
Average Diluted Shares Outstanding
   
3,680
     
3,622
     
3,670
     
3,621
 
                                 
Other
                               
Capital Expenditures
 
$
10,368
   
$
9,157
   
$
37,010
   
$
23,496
 
Depreciation & Amortization
 
$
2,964
   
$
2,518
   
$
11,418
   
$
10,121
 
 

STRATTEC SECURITY CORPORATION

Condensed Balance Sheet Data
(In Thousands)

   
July 2, 2017
   
July 3, 2016
 
   
(Unaudited)
       
ASSETS
           
Current Assets:
           
Cash and cash equivalents
 
$
8,361
   
$
15,477
 
Receivables, net
   
64,933
     
63,726
 
Inventories, net
   
35,476
     
38,683
 
Other current assets
   
20,235
     
16,565
 
Total Current Assets
   
129,005
     
134,451
 
Investment in Joint Ventures
   
16,840
     
14,168
 
Other Long Term Assets
   
16,278
     
8,408
 
Property, Plant and Equipment, Net
   
111,591
     
85,149
 
   
$
273,714
   
$
242,176
 
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
Current Liabilities:
               
Accounts Payable
 
$
39,679
   
$
32,416
 
Other
   
28,216
     
31,799
 
Total Current Liabilities
   
67,895
     
64,215
 
Accrued Pension and Post Retirement Obligations
   
2,495
     
2,728
 
Borrowings Under Credit Facility
   
30,000
     
20,000
 
Other Long-term Liabilities
   
610
     
721
 
Shareholders’ Equity
   
319,798
     
312,876
 
Accumulated Other Comprehensive Loss
   
(32,888
)
   
(37,673
)
Less:  Treasury Stock
   
(135,822
)
   
(135,871
)
Total STRATTEC SECURITY CORPORATION Shareholders’ Equity
   
151,008
     
139,332
 
Non-Controlling Interest
   
21,626
     
15,180
 
Total Shareholders’ Equity
   
172,714
     
154,512
 
   
$
273,714
   
$
242,176
 
 

STRATTEC SECURITY CORPORATION
Condensed Cash Flow Statement Data
(In Thousands)

   
Fourth Quarter Ended
   
Years Ended
 
   
July 2, 2017
   
July 3, 2016
   
July 2, 2017
   
July 3, 2016
 
   
(Unaudited)
   
(Unaudited)
       
                         
Cash Flows from Operating Activities:
                       
Net Income
 
$
3,020
   
$
1,799
   
$
12,110
   
$
14,122
 
Adjustment to Reconcile Net Income to Cash Provided by (Used in) Operating Activities:
                               
Equity (Gain) Loss in Joint Ventures
   
(538
)
   
1,749
     
(666
)
   
2,235
 
Depreciation and Amortization
   
2,964
     
2,518
     
11,418
     
10,121
 
Foreign Currency Transaction Loss (Gain)
   
647
     
(764
)
   
(1,128
)
   
(2,559
)
Unrealized (Gain) Loss on Peso Contracts
   
(863
)
   
289
     
(2,010
)
   
889
 
Deferred Income Taxes
   
1,851
     
3,027
     
1,851
     
3,027
 
Stock Based Compensation Expense
   
354
     
378
     
1,508
     
1,625
 
Change in Operating Assets/Liabilities
   
3,517
     
(9,508
)
   
169
     
(21,510
)
Other, net
   
33
     
311
     
(110
)
   
268
 
                                 
Net Cash Provided by (Used in) Operating Activities
   
10,985
     
(201
)
   
23,142
     
8,218
 
                                 
Cash Flows from Investing Activities:
                               
Investment in Joint Ventures
   
(150
)
   
-
     
(400
)
   
(1,720
)
Additions to Property, Plant and Equipment
   
(10,368
)
   
(9,157
)
   
(37,010
)
   
(23,496
)
Other
   
(278
)
   
25
     
(2,128
)
   
(49
)
Net Cash Used in Investing Activities
   
(10,796
)
   
(9,132
)
   
(39,538
)
   
(25,265
)
                                 
Cash Flows from Financing Activities:
                               
Borrowings Under Credit Facility
   
6,000
     
6,000
     
36,000
     
26,500
 
Repayments Under Credit Facility
   
(2,000
)
   
(4,000
)
   
(26,000
)
   
(16,500
)
Dividends Paid
   
(503
)
   
(467
)
   
(2,012
)
   
(1,865
)
Dividends Paid to Non-Controlling Interest Of Subsidiaries
    (200
)
    -       (1,964
)
   
(1,568
)
Contribution from Non-Controlling Interest Of Subsidiaries
   
-
     
-
     
2,940
     
-
 
Exercise of Stock Options and Employee Stock Purchases, Including Excess Tax Benefits From Stock Based Compensation
   
75
     
34
     
262
     
643
 
                                 
Net Cash Provided by Financing Activities
   
3,372
     
1,567
     
9,226
     
7,210
 
                                 
Foreign Currency Impact on Cash
   
(191
)
   
85
     
54
     
(381
)
                                 
Net Increase (Decrease) in Cash & Cash Equivalents
   
3,370
     
(7,681
)
   
(7,116
)
   
(10,218
)
                                 
Cash and Cash Equivalents:
                               
Beginning of Period
   
4,991
     
23,158
     
15,477
     
25,695
 
End of Period
 
$
8,361
   
$
15,477
   
$
8,361
   
$
15,477
 
 
 


The following information was filed by Strattec Security Corp (STRT) on Thursday, August 10, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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