{"id":524331,"date":"2021-08-05T16:03:08","date_gmt":"2021-08-05T20:03:08","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/strattec-security-corporation-reports-fiscal-2021-fourth-quarter-and-record-full-year-operating-results\/"},"modified":"2021-08-05T16:03:08","modified_gmt":"2021-08-05T20:03:08","slug":"strattec-security-corporation-reports-fiscal-2021-fourth-quarter-and-record-full-year-operating-results","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/strattec-security-corporation-reports-fiscal-2021-fourth-quarter-and-record-full-year-operating-results\/","title":{"rendered":"STRATTEC SECURITY CORPORATION Reports Fiscal 2021 Fourth Quarter and Record Full Year Operating Results"},"content":{"rendered":"
\n

MILWAUKEE, Aug. 05, 2021 (GLOBE NEWSWIRE) — STRATTEC SECURITY CORPORATION (NASDAQ:STRT) today reported operating results for the fiscal fourth quarter and full year ended June 27, 2021. The comparative prior year fourth quarter operating results were significantly impacted by the COVID-19 virus which is further described in this press release.<\/p>\n

\n
\n Fourth Quarter Overview<\/u>
\n <\/strong>
\n
Net sales for the Company\u2019s fourth quarter ended June 27, 2021 were $110.1 million, compared to net sales of $42.1 million for the fourth quarter ended June 28, 2020. Net income for the current year quarterly period was $2.9 million, compared to a net loss of $10.5 million in the prior year fourth quarter. Diluted earnings per share for the current year quarterly period were $0.75 compared to diluted loss per share of $2.80 in the prior year quarter.<\/p>\n

Both the current and prior fiscal year fourth quarter had certain items that negatively impacted our operating results. During the current year quarter several of our customer assembly plants were temporarily shut down due to the global semiconductor chip shortage reducing net sales and profitability in the fiscal 2021 fourth quarter. In the prior year fourth quarter, the significantly reduced net sales and net loss was primarily attributed to our customers shutting down their assembly plant operations during April and May due to the impact of the COVID-19 pandemic. Those shutdowns reduced our net sales in the prior year fourth quarter by approximately $72 million. In addition, during our prior year fourth quarter, STRATTEC incurred an impairment charge resulting from its one-third ownership interest in Vehicle Access Systems Technology LLC (\u201cVAST LLC\u201d) related to VAST LLC\u2019s joint venture investment in India, Minda VAST Access Systems. STRATTEC\u2019s one third share of the $2 million non-cash impairment charge related to this joint venture in India amounted to $667,000 on a pre-tax basis or $510,000 on an after tax basis and reduced our diluted earnings per share in the prior year fourth quarter by $0.14.<\/p>\n

\n
\n Full Year Earnings Overview<\/u>
\n <\/strong>
\n
For the year ended June 27, 2021, the Company\u2019s net sales were $485.3 million compared to net sales of $385.3 million in the prior year period. Net income during the current year was $22.5 million compared to a net loss of $7.6 million in the prior year period. Diluted earnings per share were $5.85 for the year ended June 27, 2021 compared to diluted loss per share of $2.04 during the prior year ended June 28, 2020. Fiscal year 2021 set a Company record for both net income and diluted earnings per share.<\/p>\n

\n
\n Discussion of Quarterly Results<\/u>
\n <\/strong>
\n
Net sales to each of our customers or customer groups in the current year quarter and prior year quarter were as follows (in thousands):<\/p>\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\nThree Months Ended<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\nJune 27, 2021<\/td>\n\u00a0<\/td>\nJune 28, 2020<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\nGeneral Motors Company<\/td>\n\u00a0<\/td>\n$<\/td>\n35,225<\/td>\n\u00a0<\/td>\n$<\/td>\n11,588<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\nFiat Chrysler Automobiles<\/td>\n\u00a0<\/td>\n15,710<\/td>\n\u00a0<\/td>\n6,324<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\nFord Motor Company<\/td>\n\u00a0<\/td>\n13,314<\/td>\n\u00a0<\/td>\n6,139<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\nTier 1 Customers<\/td>\n\u00a0<\/td>\n13,332<\/td>\n\u00a0<\/td>\n5,982<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\nCommercial and Other OEM Customers<\/td>\n\u00a0<\/td>\n18,689<\/td>\n\u00a0<\/td>\n8,910<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\nHyundai \/ Kia<\/td>\n\u00a0<\/td>\n13,787<\/td>\n\u00a0<\/td>\n3,174<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\nTOTAL<\/td>\n\u00a0<\/td>\n$<\/td>\n110,057<\/td>\n\u00a0<\/td>\n$<\/td>\n42,117<\/td>\n\u00a0<\/td>\n<\/tr>\n<\/table>\n

As mentioned previously, the current year quarter sales were adversely impacted by the global semiconductor chip shortage and, in the prior year quarter, our global sales were significantly and negatively impacted by the decision of our OEM customers to fully close their assembly plants in April and May 2020 due to the Coronavirus (COVID-19) pandemic. The impact of these production schedule reductions reduced our net sales in the prior year quarter by approximately $72.0 million dollars. Sales to all customer groups in the current year quarter were significantly higher in comparison to the prior year quarter due to the foregoing impact of the COVID-19 virus disruption. Sales to Hyundai \/ Kia were also exceptionally higher in the current year quarter due to the introduction of the new Kia Sedona and Hyundai Starex minivans for which we supply primarily power sliding door components.<\/p>\n

Gross profit margins were 13.9 percent in the current year quarter compared to a negative 18.5 percent in the prior year quarter. The increase in gross profit margin in the current year quarter compared to the prior year quarter was primarily attributed to being more fully operational in the current year quarter as compared to temporarily shutting down our operations at both our Milwaukee and Mexico production facilities due to the COVID-19 virus in the prior year quarter. The current year quarter gross profit margins were also negatively impacted by an unfavorable U.S. Dollar to Mexican Peso exchange rate affecting our operations in Mexico, accruals for bonus expense and higher purchased costs for certain raw materials and components.<\/p>\n

Engineering, Selling and Administrative expenses overall were higher in the current year quarter as compared to the prior year quarter. The prior year quarter was significantly lower due to a ten percent reduction in the salaried work force, a temporary reduction in hours worked, and reductions in various other operating costs, many of which were implemented as cost saving measures to mitigate the impact of the COVID-19 pandemic on our reduced sales levels.<\/p>\n

Included in Other Income, Net in the current year quarter compared to the prior year quarter were the following items (in thousands of dollars):<\/p>\n\n\n\n\n\n\n\n\n\n\n
\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\nJune 27, 2021<\/td>\n\u00a0<\/td>\nJune 28, 2020<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\nEquity Earnings (Loss) of VAST LLC Joint Venture<\/td>\n\u00a0<\/td>\n$<\/td>\n716<\/td>\n\u00a0<\/td>\n$<\/td>\n(601<\/td>\n)<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\nEquity Earnings of SAL Joint Venture<\/td>\n\u00a0<\/td>\n–\u00a0 \u00a0<\/td>\n\u00a0<\/td>\n337<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\nGain on Rabbi Trust<\/td>\n\u00a0<\/td>\n393<\/td>\n\u00a0<\/td>\n363<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\nNet Foreign Currency Realized and<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\nUnrealized Transaction (Loss) Gain<\/td>\n\u00a0<\/td>\n(231<\/td>\n)<\/td>\n65<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\nOther (Expense) Income<\/td>\n\u00a0<\/td>\n(156<\/td>\n)<\/td>\n265<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n$<\/td>\n722<\/td>\n\u00a0<\/td>\n$<\/td>\n429<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n<\/table>\n

The lower profitability at our VAST LLC operations during the prior year quarter related primarily to our one third share of the impairment charge, or $667,000, relating to our Minda VAST Access Systems joint venture previously discussed. In addition, our VAST China and Minda VAST Access Systems Operations were impacted by the COVID -19 virus with lower sales and profitability during the prior year quarter. The STRATTEC Advanced Logic (SAL) Joint Venture was dissolved during the prior year quarter.<\/p>\n

Frank Krejci, President & CEO commented: \u201cOver the last few months, our sales and profits have been reduced because of customers temporarily shutting down their assembly plants. This is due to the widely reported shortages of semiconductor chips, not because of reduced demand. In fact, inventories on dealer lots and car rental agencies are at abnormally low levels.<\/p>\n

Despite these issues, we are pleased to highlight summary results for the year:<\/p>\n