STRATTEC SECURITY CORPORATION Reports Fiscal Fourth Quarter Results
MILWAUKEE, Aug. 5, 2010 (GLOBE NEWSWIRE) -- STRATTEC SECURITY CORPORATION (Nasdaq:STRT) today reported operating results for the fiscal fourth quarter and year ended June 27, 2010.
Fiscal 2010 fourth quarter and full year net sales and income significantly improved over fiscal 2009. The year-over-year comparisons are dramatic, as the prior year fourth quarter and full year results were the Company's worst, reflecting widespread customer assembly plant shutdowns and bankruptcy filings by the Company's two largest customers, Chrysler and General Motors. Following the end of STRATTEC's fiscal 2009, the auto industry began making encouraging progress toward meaningful recovery. The positive trend continued throughout the Company's fiscal 2010, which subsequently fueled the Company's return to profitability.
Net sales for the Company's fourth quarter ended June 27, 2010 were $61.4 million, compared to net sales of $28.2 million for the prior year quarter ended June 28, 2009. Net income for the period was $853,000, compared to a net loss of $2.1 million in the prior year quarter. Diluted earnings per share for the period were $.26 compared to diluted loss per share of $.65 in the prior year quarter.Sales to STRATTEC's largest customers overall increased in the current quarter compared to the prior year quarter levels primarily due to higher vehicle production volumes. Sales to Chrysler Group LLC were $21.9 million in the current quarter compared to $5.8 million in the prior year quarter. Sales to General Motors Company were $16.0 million compared to $8.4 million. Included in the current quarter sales to General Motors were $1.9 million of sales to Nexteer Automotive, formerly a unit of Delphi Corporation, which is now owned by General Motors. Sales to Ford Motor Company were $5.1 million compared to $3.8 million. In the current quarter, sales of $3.1 million to Hyundai/Kia were generated by the STRATTEC POWER ACCESS business. Gross profit margins were 15.9 percent in the current quarter compared to 10.1 percent in the prior year quarter. The higher gross profit margin in the current year quarter was primarily the result of higher customer vehicle production volumes which increased overhead absorption of STRATTEC's manufacturing costs, offset by expense provisions for the Company's Economic Value Added (EVA ®) incentive bonus plan. During the current quarter and fiscal year, the Company significantly exceeded its planned financial targets on which payouts under the incentive bonus plan are based. The Company's operating results, therefore, reflect incentive bonus expense provisions of $2.8 million in the current quarter and $5.2 million for the fiscal year ended June 27, 2010. These expenses affect both cost of goods sold and operating expenses. In the prior fiscal year, no bonuses were provided for or paid based upon fiscal 2009 financial performance. Also impacting the current quarter results were lower purchased raw material costs for zinc. Operating expenses were $8.7 million in the current quarter, compared to $5.7 million in the prior year quarter. As referenced above, this increase was primarily the result of the incentive bonus expense incurred during fiscal 2010. Other factors offsetting the increase in operating expenses during the current year period included a $340,000 recovery of patent defense costs during the prior year quarter from a third party relating to outside legal costs expensed in previous reported periods and changes implemented in the prior year quarter with respect to the Company's U.S. salaried work force which included temporary reductions in wages and the Company 401(k) match, as well as several unpaid work furlough days.
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