Strattec Expands Gross Margin in Fiscal 2025 Fourth Quarter
-
Gross margin for the quarter was 16.7% compared with 13.0% in prior year period; fiscal 2025 gross margin was 15.0%, a 280 basis point improvement year-over-year on sales of
$565.1 million -
Cash from operations was
$30.2 million in fiscal 2025 fourth quarter and$71.7 million for the full year -
Further strengthened already healthy balance sheet by reducing debt by
$5 million ;$84.6 million in cash enables continued investment in transformation efforts and provides safeguard against near term market tempering -
Net income attributable to Strattec for the fourth quarter fiscal 2025 was
$8.3 million , or$2.01 per diluted share; adjusted EBITDA1 was$13.0 million , or 8.5% of sales -
Net income attributable to Strattec for fiscal 2025 was
$18.7 million , or$4.58 per diluted share, compared with$16.3 million , or$4.07 per diluted share in the prior year
“Looking forward, we are excited about our longer-term future but recognize in the near term we face market uncertainty. North American automotive production estimates have recently been revised downward, coupled with a lull in the launch cycle of new vehicles by our key customers. In the near term, we will continue to stabilize our business operations, deepen and expand our customer relationships, enhance our product roadmaps and improve our competitive position, as we transform Strattec to be a more dynamic and innovative enterprise,” she concluded.
FY 2025 Fourth Quarter Financial Summary
(compared with prior-year period, except where otherwise noted)
Net sales were
Gross profit increased
Selling, administrative and engineering (“SAE”) expenses increased
Interest income grew
Net income attributable to Strattec was
|
_______________________ |
|
|
1 |
Refer to “Use of Non-GAAP Financial Metrics and Additional Financial Information” as well as accompanying reconciliations to GAAP |
Balance Sheet and Liquidity
Increased cash earnings and improved working capital management delivered
At
Fourth Quarter Fiscal Year 2025 Webcast and Conference Call
The Company will host a conference call and webcast tomorrow,
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
About Strattec
Strattec is a leading global provider of advanced automotive access, security & authorization solutions for leading vehicle manufacturers, primarily in the
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
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.
FINANCIAL TABLES FOLLOW
|
|
|||||||||||||||
|
Three Months Ended |
|
Years Ended |
|||||||||||||
|
|
|
|
|
|
|
|
|||||||||
| Net sales |
$ |
152,013 |
|
$ |
143,055 |
|
$ |
565,066 |
|
$ |
537,766 |
|
|||
| Cost of goods sold |
|
126,613 |
|
|
124,488 |
|
|
480,489 |
|
|
472,298 |
|
|||
| Gross profit |
|
25,400 |
|
|
18,567 |
|
|
84,577 |
|
|
65,468 |
|
|||
| Gross margin |
|
16.7 |
% |
|
13.0 |
% |
|
15.0 |
% |
|
12.2 |
% |
|||
| Selling, administrative and engineering expenses |
|
16,898 |
|
|
8,876 |
|
|
61,793 |
|
|
47,654 |
|
|||
| Income from operations |
|
8,502 |
|
|
9,691 |
|
|
22,784 |
|
|
17,814 |
|
|||
| Operating margin |
|
5.6 |
% |
|
6.8 |
% |
|
4.0 |
% |
|
3.3 |
% |
|||
| Interest income |
|
753 |
|
|
235 |
|
|
2,039 |
|
|
572 |
|
|||
| Interest expense |
|
(212 |
) |
|
(239 |
) |
|
(1,007 |
) |
|
(900 |
) |
|||
| Other income (expense), net |
|
1,189 |
|
|
1,958 |
|
|
820 |
|
|
2,717 |
|
|||
| Income before provision for income taxes and non-controlling interest |
|
10,232 |
|
|
11,645 |
|
|
24,636 |
|
|
20,203 |
|
|||
| Provision for income taxes |
|
2,170 |
|
|
1,578 |
|
|
5,717 |
|
|
3,775 |
|
|||
| Net income |
|
8,062 |
|
|
10,067 |
|
|
18,919 |
|
|
16,428 |
|
|||
| Net income (loss) attributable to non-controlling interest |
|
(205 |
) |
|
447 |
|
|
234 |
|
|
115 |
|
|||
| Net income attributable to Strattec |
$ |
8,267 |
|
$ |
9,620 |
|
$ |
18,685 |
|
$ |
16,313 |
|
|||
| Earnings per share attributable to Strattec | |||||||||||||||
| Basic |
$ |
2.05 |
|
$ |
2.41 |
|
$ |
4.64 |
|
$ |
4.10 |
|
|||
| Diluted |
$ |
2.01 |
|
$ |
2.39 |
|
$ |
4.58 |
|
$ |
4.07 |
|
|||
| Weighted Average shares outstanding: | |||||||||||||||
| Basic |
|
4,039 |
|
|
3,988 |
|
|
4,030 |
|
|
3,975 |
|
|||
| Diluted |
|
4,105 |
|
|
4,027 |
|
|
4,076 |
|
|
4,004 |
|
|||
|
|
|||||||
|
|
|
||||||
| ASSETS | |||||||
| Current Assets: | |||||||
| Cash and cash equivalents |
$ |
84,579 |
|
$ |
25,410 |
|
|
| Receivables, net |
|
102,061 |
|
|
99,297 |
|
|
| Inventories, net |
|
64,701 |
|
|
81,649 |
|
|
| Pre-production costs |
|
8,657 |
|
|
22,173 |
|
|
| Value-added tax recoverable |
|
19,389 |
|
|
19,684 |
|
|
| Income tax recoverable |
|
2,465 |
|
|
319 |
|
|
| Other current assets |
|
8,211 |
|
|
5,282 |
|
|
| Total current assets |
|
290,063 |
|
|
253,814 |
|
|
| Noncurrent Assets: | |||||||
| Property, plant and equipment, net |
|
77,410 |
|
|
86,184 |
|
|
| Deferred income taxes |
|
19,531 |
|
|
17,593 |
|
|
| Other long-term assets |
|
4,450 |
|
|
6,698 |
|
|
| Total Assets |
$ |
391,454 |
|
$ |
364,289 |
|
|
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
| Current Liabilities: | |||||||
| Accounts payable |
$ |
65,824 |
|
$ |
54,911 |
|
|
| Accrued payroll and benefits |
|
22,956 |
|
|
28,953 |
|
|
| Value-added tax payable |
|
11,933 |
|
|
9,970 |
|
|
| Income tax payable |
|
88 |
|
|
5,103 |
|
|
| Warranty reserve |
|
8,900 |
|
|
10,695 |
|
|
| Other current liabilities |
|
9,649 |
|
|
8,656 |
|
|
| Total current liabilities |
|
119,350 |
|
|
118,288 |
|
|
| Noncurrent Liabilities: | |||||||
| Borrowings under credit facilities |
|
8,000 |
|
|
13,000 |
|
|
| Post-employment benefits |
|
13,325 |
|
|
2,429 |
|
|
| Other noncurrent liabilities |
|
4,348 |
|
|
4,957 |
|
|
| Total Liabilities |
|
145,023 |
|
|
138,674 |
|
|
| Shareholders’ Equity: | |||||||
| Common stock, authorized 18,000,000 shares, |
|
76 |
|
|
76 |
|
|
| Capital in excess of par value |
|
103,784 |
|
|
101,024 |
|
|
| Retained earnings |
|
269,297 |
|
|
250,612 |
|
|
| Accumulated other comprehensive loss |
|
(16,113 |
) |
|
(15,689 |
) |
|
| Less: treasury stock, at cost (3,596,549 shares at |
|
(135,452 |
) |
|
(135,478 |
) |
|
| Total Strattec shareholders’ equity |
|
221,592 |
|
|
200,545 |
|
|
| Non-controlling interest |
|
24,839 |
|
|
25,070 |
|
|
| Total Shareholders' Equity |
|
246,431 |
|
|
225,615 |
|
|
| Total Liabilities and Shareholders' Equity |
$ |
391,454 |
|
$ |
364,289 |
|
|
|
|
|||||||||||||||
|
Three Months Ended |
|
Years Ended |
|||||||||||||
|
|
|
|
|
|
|
|
|||||||||
| OPERATING ACTIVITIES: | |||||||||||||||
| Net income |
$ |
8,062 |
|
$ |
10,067 |
|
$ |
18,919 |
|
$ |
16,428 |
|
|||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
| Depreciation |
|
3,812 |
|
|
3,773 |
|
|
14,764 |
|
|
16,547 |
|
|||
| Foreign currency transaction loss (gain) |
|
1,643 |
|
|
(2,279 |
) |
|
591 |
|
|
(2,153 |
) |
|||
| Deferred income taxes |
|
(1,890 |
) |
|
(4,711 |
) |
|
(1,890 |
) |
|
(4,711 |
) |
|||
| Stock-based compensation expense |
|
886 |
|
|
243 |
|
|
2,725 |
|
|
1,467 |
|
|||
| Unrealized (gain) loss on peso forward contracts |
|
(2,545 |
) |
|
604 |
|
|
(2,314 |
) |
|
— |
|
|||
| Change in operating assets and liabilities | |||||||||||||||
| Receivables |
|
7,152 |
|
|
(1,849 |
) |
|
(3,085 |
) |
|
(9,356 |
) |
|||
| Inventories |
|
10,890 |
|
|
(3,037 |
) |
|
16,948 |
|
|
(4,052 |
) |
|||
| Other assets |
|
6,033 |
|
|
3,336 |
|
|
12,027 |
|
|
(13,562 |
) |
|||
| Accounts payable |
|
(6,056 |
) |
|
4,086 |
|
|
10,674 |
|
|
(3,016 |
) |
|||
| Accrued liabilities |
|
1,918 |
|
|
9,007 |
|
|
970 |
|
|
13,754 |
|
|||
| Other, net |
|
271 |
|
|
248 |
|
|
1,348 |
|
|
919 |
|
|||
| Net cash provided by operating activities |
|
30,176 |
|
|
19,488 |
|
|
71,677 |
|
|
12,265 |
|
|||
| INVESTING ACTIVITIES: | |||||||||||||||
| Proceeds from sale of interest in joint ventures |
|
— |
|
|
— |
|
|
— |
|
|
2,000 |
|
|||
| Purchase of property, plant and equipment |
|
(2,996 |
) |
|
(3,723 |
) |
|
(7,156 |
) |
|
(9,788 |
) |
|||
| Net cash used in investing activities |
|
(2,996 |
) |
|
(3,723 |
) |
|
(7,156 |
) |
|
(7,788 |
) |
|||
| FINANCING ACTIVITIES: | |||||||||||||||
| Borrowings under credit facilities |
|
— |
|
|
— |
|
|
3,000 |
|
|
2,000 |
|
|||
| Repayment of borrowings under credit facilities |
|
(5,000 |
) |
|
— |
|
|
(8,000 |
) |
|
(2,000 |
) |
|||
| Employee stock purchases |
|
17 |
|
|
17 |
|
|
61 |
|
|
72 |
|
|||
| Net cash (used in) provided by financing activities |
|
(4,983 |
) |
|
17 |
|
|
(4,939 |
) |
|
72 |
|
|||
| Foreign currency impact on cash |
|
276 |
|
|
34 |
|
|
(413 |
) |
|
290 |
|
|||
| NET INCREASE IN CASH AND CASH EQUIVALENTS |
|
22,473 |
|
|
15,816 |
|
|
59,169 |
|
|
4,839 |
|
|||
| CASH AND CASH EQUIVALENTS | |||||||||||||||
| Beginning of period |
|
62,106 |
|
|
9,594 |
|
|
25,410 |
|
|
20,571 |
|
|||
| End of period |
$ |
84,579 |
|
$ |
25,410 |
|
$ |
84,579 |
|
$ |
25,410 |
|
|||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||||||||||||||
| Cash paid during the period for: | |||||||||||||||
| Income taxes |
$ |
5,039 |
|
$ |
624 |
|
$ |
14,174 |
|
$ |
3,801 |
|
|||
| Interest |
$ |
276 |
|
$ |
229 |
|
$ |
1,007 |
|
$ |
888 |
|
|||
| Non-cash investing activities: | |||||||||||||||
| Change in capital expenditures in accounts payable |
$ |
(1,148 |
) |
$ |
435 |
|
$ |
(422 |
) |
$ |
171 |
|
|||
|
|
||||||||||||||||||||||||||||||||
|
Fiscal 2024 |
|
Fiscal 2025 |
||||||||||||||||||||||||||||||
|
Q1 |
Q2 |
Q3 |
Q4 |
Total |
|
Q1 |
Q2 |
Q3 |
Q4 |
Total |
||||||||||||||||||||||
|
ADJUSTED |
||||||||||||||||||||||||||||||||
|
|
|
135,406 |
|
|
118,532 |
|
|
140,773 |
|
|
143,055 |
|
$ |
537,766 |
|
|
139,052 |
|
|
129,919 |
|
|
144,082 |
|
|
152,013 |
|
$ |
565,066 |
|
||
| 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 |
|
|
144,082 |
|
|
152,013 |
|
|
565,066 |
|
||
| ADJUSTED EBITDA: | ||||||||||||||||||||||||||||||||
| Net income attributable to Strattec (GAAP) |
$ |
4,165 |
|
$ |
1,022 |
|
$ |
1,506 |
|
$ |
9,620 |
|
$ |
16,313 |
|
$ |
3,703 |
|
$ |
1,319 |
|
$ |
5,396 |
|
$ |
8,267 |
|
$ |
18,685 |
|
||
| Net income (loss) attributable to non-controlling interest |
|
290 |
|
|
(242 |
) |
|
(380 |
) |
|
447 |
|
|
115 |
|
|
45 |
|
|
79 |
|
|
315 |
|
|
(205 |
) |
|
234 |
|
||
| Provision for income tax |
|
1,387 |
|
|
264 |
|
|
546 |
|
|
1,578 |
|
|
3,775 |
|
|
1,498 |
|
|
405 |
|
|
1,644 |
|
|
2,170 |
|
|
5,717 |
|
||
| Other (income) expense, net |
|
131 |
|
|
(1,098 |
) |
|
208 |
|
|
(1,958 |
) |
|
(2,717 |
) |
|
(129 |
) |
|
482 |
|
|
16 |
|
|
(1,189 |
) |
|
(820 |
) |
||
| Investment and interest income |
|
(87 |
) |
|
(107 |
) |
|
(143 |
) |
|
(235 |
) |
|
(572 |
) |
|
(349 |
) |
|
(408 |
) |
|
(529 |
) |
|
(753 |
) |
|
(2,039 |
) |
||
| Interest expense |
|
220 |
|
|
219 |
|
|
222 |
|
|
239 |
|
|
900 |
|
|
295 |
|
|
257 |
|
|
243 |
|
|
212 |
|
|
1,007 |
|
||
| Income from operations |
|
6,106 |
|
|
58 |
|
|
1,959 |
|
|
9,691 |
|
|
17,814 |
|
|
5,063 |
|
|
2,134 |
|
|
7,085 |
|
|
8,502 |
|
|
22,784 |
|
||
| Adjustments: | ||||||||||||||||||||||||||||||||
| Depreciation |
|
4,385 |
|
|
4,330 |
|
|
4,059 |
|
|
3,773 |
|
$ |
16,547 |
|
|
3,662 |
|
|
3,544 |
|
|
3,746 |
|
|
3,812 |
|
$ |
14,764 |
|
||
| Non-cash stock-based compensation |
|
505 |
|
|
479 |
|
|
240 |
|
|
243 |
|
|
1,467 |
|
|
188 |
|
|
891 |
|
|
760 |
|
|
887 |
|
|
2,726 |
|
||
| Restructuring and similar charges |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
265 |
|
|
809 |
|
|
(676 |
) |
|
398 |
|
||
| Retroactive FY23 one-time pricing recovery, net |
|
(7,078 |
) |
|
(641 |
) |
|
(298 |
) |
|
24 |
|
|
(7,993 |
) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
| Executive transition costs |
|
- |
|
|
774 |
|
|
211 |
|
|
73 |
|
|
1,058 |
|
|
941 |
|
|
921 |
|
|
214 |
|
|
(17 |
) |
|
2,058 |
|
||
| Business transformation costs |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
74 |
|
|
215 |
|
|
259 |
|
|
479 |
|
|
1,027 |
|
||
|
|
(2,188 |
) |
|
4,942 |
|
|
4,212 |
|
|
4,113 |
|
|
11,079 |
|
|
4,865 |
|
|
5,836 |
|
|
5,788 |
|
|
4,485 |
|
|
20,974 |
|
|||
| Adjusted EBITDA (Non-GAAP) |
$ |
3,918 |
|
$ |
5,000 |
|
$ |
6,171 |
|
$ |
13,804 |
|
$ |
28,893 |
|
$ |
9,928 |
|
$ |
7,970 |
|
$ |
12,873 |
|
$ |
12,987 |
|
$ |
43,758 |
|
||
| Adjusted EBITDA as a % of Adjusted |
|
3.1 |
% |
|
4.3 |
% |
|
4.4 |
% |
|
9.6 |
% |
|
5.5 |
% |
|
7.1 |
% |
|
6.1 |
% |
|
8.9 |
% |
|
8.5 |
% |
|
7.7 |
% |
||
| 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 |
|
$ |
5,396 |
|
$ |
8,267 |
|
$ |
18,685 |
|
||
| Adjustments: | ||||||||||||||||||||||||||||||||
| Restructuring and similar charges |
|
265 |
|
|
3 |
|
|
- |
|
|
63 |
|
|
331 |
|
|
- |
|
|
265 |
|
|
809 |
|
|
(676 |
) |
|
398 |
|
||
| 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 |
|
|
214 |
|
|
115 |
|
|
2,778 |
|
||
| Business transformation costs |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
74 |
|
|
215 |
|
|
259 |
|
|
479 |
|
|
1,027 |
|
||
| Non-controlling interest impact on above adjustments |
|
1,014 |
|
|
181 |
|
|
55 |
|
|
22 |
|
|
1,272 |
|
|
- |
|
|
- |
|
|
(160 |
) |
|
160 |
|
|
- |
|
||
| Tax effect on above adjustments |
|
1,305 |
|
|
(116 |
) |
|
7 |
|
|
(41 |
) |
|
1,155 |
|
|
(292 |
) |
|
(384 |
) |
|
(376 |
) |
|
107 |
|
|
(945 |
) |
||
|
|
(4,494 |
) |
|
400 |
|
|
(25 |
) |
|
141 |
|
|
(3,978 |
) |
|
1,006 |
|
|
1,321 |
|
|
746 |
|
|
185 |
|
|
3,258 |
|
|||
| Adjusted Net Income/(Loss) attributable to Strattec (Non-GAAP) |
$ |
(329 |
) |
$ |
1,422 |
|
$ |
1,481 |
|
$ |
9,761 |
|
$ |
12,335 |
|
$ |
4,709 |
|
$ |
2,640 |
|
$ |
6,142 |
|
$ |
8,452 |
|
$ |
21,943 |
|
||
| Weighted Average Basic Shares Outstanding |
|
3,948 |
|
|
3,976 |
|
|
3,988 |
|
|
3,988 |
|
|
3,975 |
|
|
4,005 |
|
|
4,035 |
|
|
4,039 |
|
|
4,039 |
|
|
4,030 |
|
||
| Weighted Average Diluted Shares Outstanding |
|
3,974 |
|
|
3,998 |
|
|
4,017 |
|
|
4,027 |
|
|
4,004 |
|
|
4,046 |
|
|
4,070 |
|
|
4,085 |
|
|
4,105 |
|
|
4,076 |
|
||
| Diluted earnings per share (GAAP) |
$ |
1.05 |
|
$ |
0.26 |
|
$ |
0.37 |
|
$ |
2.39 |
|
$ |
4.07 |
|
$ |
0.92 |
|
$ |
0.32 |
|
$ |
1.32 |
|
$ |
2.01 |
|
$ |
4.58 |
|
||
| Adjusted dilutive earnings/(loss) per share (Non-GAAP) |
$ |
(0.08 |
) |
$ |
0.36 |
|
$ |
0.37 |
|
$ |
2.42 |
|
$ |
3.08 |
|
$ |
1.16 |
|
$ |
0.65 |
|
$ |
1.50 |
|
$ |
2.06 |
|
$ |
5.38 |
|
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20250814654271/en/
Alliance Advisors IR
Phone: 716-843-3908
Email: dpawlowski@allianceadvisors.com
Source:
