MILWAUKEE, Oct. 21, 2010 (GLOBE NEWSWIRE) -- STRATTEC SECURITY CORPORATION (Nasdaq:STRT) today reported operating results for the fiscal first quarter ended September 26, 2010.
Net sales for the Company's first quarter ended September 26, 2010 were $59.8 million, compared to net sales of $41.2 million for the prior year quarter ended September 27, 2009. Net income for the period was $1,418,000, compared to net income of $943,000 in the prior year quarter. Diluted earnings per share for the current period were $.43 compared to diluted earnings per share of $.29 in the prior year quarter. The higher sales and net income for the current year quarter can be attributed to the continuation of the auto industry's positive recovery trend that started in August 2009 following the U.S. Government's "Cash for Clunkers" program. In the prior year quarter, the Company's two largest customers, Chrysler and General Motors emerged from bankruptcy and had several customer assembly plants shutdown during the month of July.
Sales to STRATTEC's largest customers overall increased in the current quarter compared to the prior year quarter levels due to higher customer vehicle production volumes. Sales to Chrysler Group LLC were $19.6 million in the current quarter compared to $12.8 million in the prior year quarter. Sales to General Motors Company were $14.8 million compared to $9.9 million. Included in the current quarter sales to General Motors were $1.7 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 $5.5 million compared to $3.7 million. Net sales to Hyundai/Kia were $4.3 million in the current quarter compared to $3.0 million in the prior year quarter.Gross profit margin was 17.0 percent in the current quarter compared to 16.5 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. These bonus expenses affect both cost of goods sold and operating expenses. Also impacting the current quarter results were lower purchased raw material costs for zinc offset partially by higher purchased raw material costs for brass. Operating expenses were $8.2 million in the current quarter, compared to $6.2 million in the prior year quarter. As referenced above, this increase was primarily the result of the incentive bonus expense incurred during the first quarter of fiscal 2011. Expenses in the prior year period were also lower due to temporary actions implemented with respect to the Company's U.S. salaried work force to help conserve cash during the recession. These actions included reductions in wages and the Company 401(k) match, as well as implementing several unpaid work furlough days.