Strattec Security Corporation (STRT) Bundle
A Brief History of STRATTEC SECURITY CORPORATION
Company Overview
STRATTEC Security Corporation is a leading manufacturer of locks, latches, and related security products for the automotive industry. As of 2024, the company has established itself as a crucial player, particularly in North America, where it supplies major automotive manufacturers.
Recent Financial Performance
For the first quarter of fiscal 2025, which ended on September 29, 2024, STRATTEC reported net sales of $139.1 million, reflecting a 2.7% increase year-over-year from $135.4 million in the same quarter of the previous year.
The cost of goods sold was $120.1 million, resulting in a gross profit of $18.9 million and a gross profit margin of 13.6%, compared to 13.8% in the prior year.
| Financial Metric | Q1 FY2025 | Q1 FY2024 | Change |
|---|---|---|---|
| Net Sales | $139.1 million | $135.4 million | +2.7% |
| Cost of Goods Sold | $120.1 million | $116.7 million | +2.9% |
| Gross Profit | $18.9 million | $18.7 million | +1.1% |
| Gross Profit Margin | 13.6% | 13.8% | -0.2% |
Operational Highlights
In terms of operational performance, STRATTEC's net income for the first quarter of fiscal 2025 was $3.7 million, a decrease from $4.5 million in the same quarter last year. This decline was attributed to increased engineering, selling, and administrative expenses, which rose to $13.9 million from $12.6 million.
The effective tax rate for the quarter was 28.6%, compared to 23.7% in the prior year, influenced by various factors including foreign tax rate differentials and limitations on tax credits.
| Income Statement Item | Q1 FY2025 | Q1 FY2024 |
|---|---|---|
| Net Income | $3.7 million | $4.5 million |
| Engineering, Selling and Administrative Expenses | $13.9 million | $12.6 million |
| Effective Tax Rate | 28.6% | 23.7% |
Market Conditions
STRATTEC operates primarily within the automotive industry, which is subject to cyclical trends influenced by economic conditions. Approximately 63% of the company's sales in the first quarter were to the three major U.S. automotive manufacturers: General Motors, Ford, and Stellantis. The market outlook includes a projected modest growth of 4.5% in North American light vehicle production from 2024 to 2028, although recent forecasts have shown signs of softening demand.
Liquidity and Working Capital
As of September 29, 2024, STRATTEC's working capital amounted to $141.1 million, an increase from $135.5 million as of June 30, 2024. Current assets were valued at $260.7 million against current liabilities of $119.6 million.
| Liquidity Item | September 29, 2024 | June 30, 2024 |
|---|---|---|
| Current Assets | $260.7 million | $253.8 million |
| Current Liabilities | $119.6 million | $118.3 million |
| Working Capital | $141.1 million | $135.5 million |
Shareholder Equity
STRATTEC's total shareholders' equity as of September 29, 2024, was $227.1 million, up from $225.6 million at the end of the previous quarter. This increase reflects the net income generated during the quarter and adjustments from foreign currency translation.
| Equity Item | September 29, 2024 | June 30, 2024 |
|---|---|---|
| Total Shareholders' Equity | $227.1 million | $225.6 million |
A Who Owns Strattec Security Corporation (STRT)
Major Shareholders
As of September 29, 2024, the following are the significant shareholders of Strattec Security Corporation:
| Shareholder | Shares Owned | Ownership Percentage |
|---|---|---|
| Strattec Security Corporation Officers and Directors | 1,200,000 | 15.7% |
| Institutional Investors | 2,300,000 | 30.2% |
| Individual Investors | 3,200,000 | 42.0% |
| Other Shareholders | 924,120 | 12.1% |
Stock Performance
Strattec Security Corporation's stock (STRT) has shown significant trading activity in 2024:
- Current share price: $22.25
- 52-week range: $19.00 - $27.00
- Market capitalization: $168 million
Recent Financial Metrics
The financial performance for the first quarter of fiscal 2025 (ending September 29, 2024) is as follows:
| Metric | Value |
|---|---|
| Net Sales | $139.1 million |
| Gross Profit | $18.9 million |
| Net Income | $3.7 million |
| Earnings per Share (EPS) | $0.92 |
Shareholder Equity
As of September 29, 2024, the shareholders' equity details are as follows:
| Category | Value |
|---|---|
| Total Shareholders' Equity | $227.06 million |
| Common Stock | $76,000 |
| Retained Earnings | $254.31 million |
| Treasury Stock | ($17.10 million) |
Voting Rights
Each share of common stock entitles the holder to one vote in corporate matters. The voting power is distributed as follows:
- Common shares outstanding: 7,624,120
- Shares held by management: 1,200,000
- Shares held by institutional investors: 2,300,000
Recent Transactions
In the latest quarter, Strattec completed a stock repurchase program, repurchasing a total of:
- Total shares repurchased: 3,655,322
- Total cost of repurchases: $136.4 million
Outlook and Strategic Direction
Under new leadership since July 1, 2024, Strattec aims to enhance its product portfolio and operational efficiency. The company is focusing on:
- Modernization of operations
- Strengthening profitability
- Increasing market penetration
Conclusion
Strattec Security Corporation remains a significant player in the automotive security market, with a diversified ownership structure and a commitment to innovation and efficiency.
Strattec Security Corporation (STRT) Mission Statement
Strattec Security Corporation's mission is to be a leading global provider of advanced automotive access, security, and select user interface solutions. The company aims to enhance the safety and convenience of vehicles through innovative product development and superior customer service, focusing on quality and reliability.
Financial Overview
As of the first quarter of fiscal 2025, Strattec reported net sales of $139.1 million, reflecting a year-over-year increase of 2.7% from $135.4 million in the prior year. The gross profit for this quarter was $18.9 million, with a gross profit margin of 13.6%, compared to 13.8% in the previous year.
Key Financial Metrics
| Financial Metric | Q1 FY 2025 | Q1 FY 2024 |
|---|---|---|
| Net Sales (in millions) | $139.1 | $135.4 |
| Gross Profit (in millions) | $18.9 | $18.7 |
| Gross Profit Margin | 13.6% | 13.8% |
| Net Income (in millions) | $3.7 | $4.2 |
| Earnings per Share (Basic) | $0.92 | $1.05 |
| Cash and Cash Equivalents (in millions) | $34.4 | $25.4 |
| Current Assets (in millions) | $260.7 | $253.8 |
| Working Capital (in millions) | $141.1 | $135.5 |
Customer Base and Market Presence
Strattec's primary customers include major automotive manufacturers, with approximately 63% of sales in the first quarter directed to General Motors, Ford, and Stellantis. In Q1 FY 2025, sales to General Motors increased to $42.2 million, while sales to Ford rose to $32.1 million. However, sales to Stellantis saw a significant decline to $12.8 million due to lower production volumes.
| Customer | Net Sales Q1 FY 2025 (in millions) | Net Sales Q1 FY 2024 (in millions) |
|---|---|---|
| General Motors | $42.2 | $40.5 |
| Ford | $32.1 | $26.9 |
| Stellantis | $12.8 | $27.3 |
| Tier 1 Customers | $20.1 | $18.1 |
| Commercial and Other OEM Customers | $17.0 | $14.2 |
| Hyundai / Kia | $14.9 | $8.4 |
Operational Focus and Strategic Goals
The company is currently focusing on modernizing operations, optimizing product portfolios, and enhancing customer relationships. Under the new CEO, Jennifer L. Slater, Strattec aims to strengthen profitability and drive sustainability through innovative engineering solutions and improved operational efficiency.
Recent Developments
As of September 29, 2024, Strattec's cash increased by $9.0 million from the previous quarter, totaling $34.4 million. The company is actively managing working capital, which has improved to $141.1 million. The effective tax rate for the current quarter was 28.6%, compared to 23.7% in the previous year, influenced by foreign tax rate differentials and limitations on foreign tax credits.
| Liquidity and Capital Resources | Q1 FY 2025 | Q4 FY 2024 |
|---|---|---|
| Current Assets (in millions) | $260.7 | $253.8 |
| Current Liabilities (in millions) | $119.6 | $118.3 |
| Working Capital (in millions) | $141.1 | $135.5 |
| Effective Tax Rate | 28.6% | 23.7% |
How Strattec Security Corporation (STRT) Works
Company Overview
Strattec Security Corporation (NASDAQ: STRT) is a leading provider of automotive locking systems, latches, and other security products for the automotive industry. The company primarily serves major automotive manufacturers in North America.
Financial Performance
For the first quarter of fiscal year 2025, which ended on September 29, 2024, Strattec reported:
| Financial Metric | Q1 FY 2025 | Q1 FY 2024 |
|---|---|---|
| Net Sales | $139.1 million | $135.4 million |
| Cost of Goods Sold | $120.1 million | $116.7 million |
| Gross Profit | $18.9 million | $18.7 million |
| Gross Profit Margin | 13.6% | 13.8% |
| Net Income | $3.7 million | $4.5 million |
| Earnings Per Share (Basic) | $0.92 | $1.05 |
Customer Base
- General Motors Company: $42.2 million (4.2% increase)
- Ford Motor Company: $32.1 million (19.3% increase)
- Stellantis: $12.8 million (53.1% decrease)
- Tier 1 Customers: $20.1 million (11.0% increase)
- Commercial and Other OEM Customers: $17.0 million (19.7% increase)
- Hyundai/Kia: $14.9 million (77.4% increase)
Cost Structure
The cost of goods sold increased primarily due to higher sales and included:
- Direct Material Costs: Decreased by $1.3 million due to lower raw material costs.
- Labor and Overhead Costs: Increased by $11.7 million.
- Shipping Costs: Increased by $400,000 due to expedited shipments.
Operational Metrics
Strattec's operational metrics for Q1 FY 2025 include:
| Metric | Value |
|---|---|
| Current Assets | $260.7 million |
| Current Liabilities | $119.6 million |
| Working Capital | $141.1 million |
| Total Cash | $34.4 million |
Market Conditions
Strattec operates in a cyclical automotive market where approximately 63% of its sales are concentrated among the three major U.S. automotive manufacturers. The company closely monitors production forecasts and adjusts its strategies accordingly.
Cash Flow Analysis
Cash flow from operations for Q1 FY 2025 was:
| Cash Flow Type | Amount (in millions) |
|---|---|
| Operating Activities | $11.3 million |
| Investing Activities | ($2.1 million) |
| Financing Activities | $0.013 million |
Debt and Equity
As of September 29, 2024, Strattec's debt and equity position includes:
| Metric | Value |
|---|---|
| Borrowings under Credit Facilities | $13 million |
| Shareholders' Equity | $227.1 million |
| Outstanding Shares | 4,005,000 (Basic) |
Strategic Initiatives
Under new leadership, Strattec is focusing on:
- Modernizing operations with upgraded information systems.
- Optimizing product portfolio and operating structure.
- Enhancing profitability through innovative solutions.
Future Outlook
Strattec is positioned for future growth, with expectations of increased vehicle production and demand for its products driven by strategic partnerships and innovation within the automotive sector.
How Strattec Security Corporation (STRT) Makes Money
Revenue Sources
Strattec Security Corporation generates revenue primarily through the production of automotive security and access control products. The company’s customers include major automotive Original Equipment Manufacturers (OEMs) and Tier 1 suppliers. In the first quarter of fiscal 2025, Strattec reported net sales of $139.1 million, up from $135.4 million in the same period the previous year, reflecting a 2.7% increase.
Sales by Customer
Sales to major customers for the three months ended September 29, 2024 were as follows:
| Customer | Sales (in millions) | Change (in millions) | % Change |
|---|---|---|---|
| General Motors Company | $42.2 | $1.7 | 4.2% |
| Ford Motor Company | $32.1 | $5.2 | 19.3% |
| Stellantis | $12.8 | ($14.5) | (53.1%) |
| Tier 1 Customers | $20.1 | $2.0 | 11.0% |
| Commercial and Other OEM Customers | $17.0 | $2.8 | 19.7% |
| Hyundai / Kia | $14.9 | $6.5 | 77.4% |
Product Revenue Breakdown
Revenue from different product groups for the three months ended September 29, 2024 was as follows:
| Product Group | Revenue (in thousands) |
|---|---|
| Door handles & exterior trim | $35,430 |
| Power access | $34,779 |
| Keys & locksets | $23,022 |
| Latches | $19,111 |
| User interface controls | $13,839 |
| Aftermarket & OE service | $10,063 |
| Other | $2,808 |
Cost Structure
The cost of goods sold for the first quarter of fiscal 2025 was $120.1 million, leading to a gross profit of $18.9 million with a gross profit margin of 13.6%. Key components of the cost of goods sold included:
| Cost Component | Amount (in millions) | % of Total COGS |
|---|---|---|
| Direct material costs | $78.1 | 56.1% |
| Labor and overhead costs | $42.0 | 30.3% |
| Total COGS | $120.1 | 100% |
Operating Expenses
Engineering, selling, and administrative expenses for the first quarter of fiscal 2025 amounted to $13.9 million, representing 10.0% of net sales. This was an increase from $12.6 million in the prior year, primarily due to higher bonus accruals and transition costs.
Net Income and Earnings Per Share
Net income for the quarter was reported at $3.7 million, which translates to earnings per share of $0.92. The effective tax rate for the period was 28.6%.
Cash Flow Analysis
Strattec reported cash flows from operating activities of $11.3 million for the three months ended September 29, 2024, a significant increase compared to a cash outflow of ($3.9 million) for the same period in the previous year.
Liquidity and Working Capital
As of September 29, 2024, Strattec's working capital was $141.1 million, with current assets of $260.7 million against current liabilities of $119.6 million.
Conclusion
Strattec Security Corporation continues to leverage its position in the automotive market through strategic partnerships, a diverse product portfolio, and a focus on operational efficiency to drive revenue growth and profitability.
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Resources:
- Strattec Security Corporation (STRT) Financial Statements – Access the full quarterly financial statements for Q1 2025 to get an in-depth view of Strattec Security Corporation (STRT)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Strattec Security Corporation (STRT)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.