MILWAUKEE, April 21, 2011 (GLOBE NEWSWIRE) -- STRATTEC SECURITY CORPORATION (Nasdaq:STRT) today reported operating results for the fiscal third quarter ended March 27, 2011.
Net sales for the Company's third quarter ended March 27, 2011 were $65.7 million, compared to net sales of $52.9 million for the third quarter ended March 28, 2010. The higher net sales for the current quarter can be primarily attributed to increased customer production volumes. Higher content on certain new products also contributed to the net sales improvement.
Net income for the period was $55,000, compared to a net income of $781,000 in the prior year quarter. Diluted earnings per share for the period were $.02 compared to diluted earnings per share of $.24 in the prior year quarter. The lower net income for the current quarter was primarily due to a combination of STRATTEC's share of the cost associated with a customer's specific warranty claim, and an adjustment for customer price concessions. These two items resulted in a pre-tax provision of $1.8 million during the current quarter and reduced diluted earnings per share by $.33.
For the nine months ended March 27, 2011, net sales were $186.7 million compared to net sales of $146.6 million in the prior year period. Net income was $2.7 million compared to net income of $2.6 million in the prior year period and diluted earnings per share were $.82 compared to diluted earnings per share of $.78 in the prior year period.
The year-over-year net sales increase for the current quarter reflected increased sales to STRATTEC's largest customers. Sales to Chrysler Group LLC were $21.6 million in the current quarter compared to $17.0 million in the prior year quarter. Sales to General Motors Company were $14.8 million compared to $13.5 million. Included in the prior year quarter sales to General Motors were $1.7 million of sales to Nexteer Automotive, formerly a unit of General Motors. Sales to Ford Motor Company were $7.0 million compared to $4.5 million. Sales to Hyundai/Kia were $4.0 million compared to $2.8 million.
Gross profit margins were 13.9 percent in the current quarter compared to 16.8 percent in the prior year quarter. The lower gross profit margin in the current year quarter was primarily the result of the $1.8 million pre-tax provision related to the two issues mentioned previously. Also impacting the current quarter were higher purchased raw material costs for zinc and brass along with an unfavorable Mexico Peso to U.S. dollar exchange rate affecting the Company's operations in Mexico. Collectively, these items reduced the current quarter gross profit margin by 4 percentage points.
Operating expenses were $8.0 million in the current quarter, compared to $7.6 million in the prior year quarter.
During the current quarter, the Company contributed $1.5 million to its Defined Benefit Pension Trust.
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 the VAST Alliance in which STRATTEC participates with WITTE Automotive of Velbert, Germany and ADAC Automotive of Grand Rapids, Michigan. STRATTEC's history in the automotive business spans over 100 years.
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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, 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.
CONTACT: Pat Hansen Senior Vice President and Chief Financial Officer 414-247-3435 www.strattec.com