Strattec Security Corp 10-Q for FY2026 Q3
Strattec Security Corp (STRT)
About this 10-Q
Strattec Security Corp filed this 10-Q on May 8, 2026, covering the quarter ended March 29, 2026 (FY2026 Q3).
Headline figures
Quarter ended March 29, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $137.63M
- down 4.5% from $144.08M a year earlier
- Net income
- $3.24M
- down 40.0% from net income of $5.4M a year earlier
- Diluted EPS
- $0.78
- down 40.9% from $1.32 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number
(Exact Name of Registrant as Specified in Its Charter)
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(State of Incorporation) |
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(I.R.S. Employer Identification No.) |
(Address of Principal Executive Offices)
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(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol |
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Name of exchange on which registered |
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The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.
Common stock, par value $0.01 per share:
STRATTEC SECURITY CORPORATION
TABLE OF CONTENTS
March 29, 2026
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Item 1. |
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4 |
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4 |
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Condensed Consolidated Statement of Comprehensive Income (Unaudited) |
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6 |
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Condensed Consolidated Statements of Shareholders' Equity (Unaudited) |
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Notes to Condensed Consolidated Financial Statements (Unaudited) |
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ITEM 2. |
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Management's Discussion and Analysis of Financial Condition and Results of Operations |
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ITEM 3. |
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ITEM 4. |
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ITEM 1. |
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ITEM 1A. |
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ITEM 2. |
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Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities |
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ITEM 3. |
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ITEM 4. |
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ITEM 5. |
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ITEM 6. |
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
In this Quarterly Report on Form 10-Q for Strattec Security Corporation ("Strattec," "the Company," "we," "us," or "our"), statements that are not reported financial results or other historic information are "forward-looking statements." These forward-looking statements relate to, among other things, the Company's future financial position, business strategy, targets, projected sales, costs, income, capital expenditures, debt levels and cash flows, and plans and objectives of management for future operations. The use of words such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "should," "project" or "plan" or similar terminology are generally intended to identify forward-looking statements. These forward-looking statements by their nature address matters that are, to different degrees, uncertain and are subject to risks, assumptions, and other factors, some of which are beyond the Company's control, that could cause actual results to differ materially from those expressed or implied by such forward-looking statements.
The Company’s operations and financial performance are subject to certain risks and uncertainties, including:
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 Form 10-Q and the Company undertakes no obligation to update such forward-looking statements.
3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
STRATTEC SECURITY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(in thousands, except per share amounts)
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Three Months Ended |
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Nine Months Ended |
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March 29, |
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March 30, |
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March 29, |
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March 30, |
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Net sales |
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$ |
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$ |
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$ |
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$ |
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Cost of goods sold |
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Gross profit |
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Selling, administrative and engineering expenses |
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Income from operations |
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Interest income |
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Interest expense |
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Other income (expense), net |
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Income before income taxes and non-controlling interest |
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Income tax expense |
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Net income |
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Net income attributable to non-controlling interest |
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Net income attributable to Strattec |
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$ |
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$ |
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$ |
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$ |
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Earnings per share attributable to Strattec |
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Basic |
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$ |
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$ |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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$ |
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$ |
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Weighted average shares outstanding: |
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Basic |
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Diluted |
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The accompanying notes are an integral part of the Condensed Consolidated Financial Statements
4
STRATTEC SECURITY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(in thousands)
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Three Months Ended |
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Nine Months Ended |
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March 29, |
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March 30, |
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March 29, |
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March 30, |
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Net income |
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$ |
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$ |
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$ |
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$ |
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Other comprehensive income (loss), net of tax: |
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Currency translation adjustments |
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( |
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( |
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Pension and postretirement plans |
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Total other comprehensive income (loss), net of tax |
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Comprehensive income |
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Comprehensive income (loss) attributable to non-controlling interest |
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Comprehensive income attributable to Strattec |
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$ |
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$ |
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$ |
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$ |
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The accompanying notes are an integral part of the Condensed Consolidated Financial Statements
5
STRATTEC SECURITY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except share amounts and per share amounts)
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March 29, |
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June 29, |
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ASSETS |
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Current Assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Receivables, net |
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Inventories: |
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Finished products |
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Work in process |
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Purchased materials |
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Inventories, net |
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Pre-production costs |
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Value-added tax recoverable |
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Other current assets |
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Total current assets |
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Noncurrent Assets: |
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Property, plant and equipment: |
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Land and improvements |
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Buildings and improvements |
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Machinery and equipment |
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Total property, plant and equipment |
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Less: accumulated depreciation |
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Property, plant and equipment, net |
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Deferred income taxes |
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Other noncurrent assets |
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Total Assets |
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$ |
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$ |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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Current Liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued payroll and benefits |
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Value-added tax payable |
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Warranty reserve |
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Current portion of borrowings under credit facilities |
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Other current liabilities |
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Total current liabilities |
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Noncurrent Liabilities: |
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Noncurrent portion of borrowings under credit facilities |
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Post-employment benefits |
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Other noncurrent liabilities |
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Total Liabilities |
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Shareholders' Equity: |
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Common stock, authorized |
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Capital in excess of par value |
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Retained earnings |
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Accumulated other comprehensive loss |
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( |
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( |
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Less: treasury stock, at cost ( |
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( |
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( |
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Total Strattec shareholders’ equity |
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Non-controlling interest |
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Total Shareholders' Equity |
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Total Liabilities and Shareholders' Equity |
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$ |
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$ |
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The accompanying notes are an integral part of the Condensed Consolidated Financial Statements
6
STRATTEC SECURITY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
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Nine Months Ended |
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March 29, |
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March 30, |
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OPERATING ACTIVITIES: |
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Net income |
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$ |
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$ |
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Adjustments to reconcile net income to net cash provided by operating |
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Depreciation |
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Foreign currency transaction loss (gain) |
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( |
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Unrealized (gain) loss on peso contracts |
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Stock-based compensation expense |
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Other, net |
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Change in operating assets and liabilities: |
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Receivables |
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( |
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Inventories |
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( |
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Prepaids and other assets |
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Accounts payable |
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( |
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Accrued liabilities |
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( |
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( |
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Net cash provided by operating activities |
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INVESTING ACTIVITIES: |
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Purchase of property, plant and equipment |
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( |
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( |
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Proceeds from sale of property, plant and equipment |
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Net cash used in investing activities |
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( |
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( |
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FINANCING ACTIVITIES: |
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Borrowings under credit facilities |
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Repayments under credit facilities |
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( |
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( |
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Payment for debt issuance costs |
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( |
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Payment for taxes withheld from stock-based awards |
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( |
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Share issuances |
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Net cash (used in) provided by financing activities |
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( |
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Foreign currency impact on cash |
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( |
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( |
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NET INCREASE IN CASH AND CASH EQUIVALENTS |
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CASH AND CASH EQUIVALENTS: |
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Beginning of period |
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End of period |
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$ |
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$ |
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
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Cash paid during the period for: |
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Income taxes |
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$ |
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$ |
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Interest |
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$ |
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$ |
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Non-cash investing activities: |
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Change in capital expenditures in accounts payable |
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$ |
( |
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$ |
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The accompanying notes are an integral part of the Condensed Consolidated Financial Statements
7
STRATTEC SECURITY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(in thousands)
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Common Stock |
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Capital in Excess of Par Value |
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Retained Earnings |
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Accumulated Other Comprehensive Loss |
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Treasury Stock |
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Non-Controlling Interest |
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Total |
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Balance -- June 29, 2025 |
$ |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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Currency translation adjustments |
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— |
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— |
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— |
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— |
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Pension and postretirement adjustment, net of tax |
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— |
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— |
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— |
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— |
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— |
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Shares withheld for taxes on stock-based awards |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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( |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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Share issuances |
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— |
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— |
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— |
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— |
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Balance -- September 28, 2025 |
$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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Currency translation adjustments |
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— |
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— |
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— |
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— |
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Pension and postretirement adjustment, net of tax |
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— |
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— |
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— |
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— |
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— |
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Shares withheld for taxes on stock-based awards |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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( |
) |
Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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1,125 |
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Share issuances |
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— |
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— |
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— |
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Balance -- December 28, 2025 |
$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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Currency translation adjustments |
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— |
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— |
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— |
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( |
) |
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— |
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( |
) |
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( |
) |
Pension and postretirement adjustment, net of tax |
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— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Shares withheld for taxes on stock-based awards |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Stock-based compensation |
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Share issuances |
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Balance -- March 29, 2026 |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
8
STRATTEC SECURITY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(in thousands)
|
Common Stock |
|
|
Capital in Excess of Par Value |
|
|
Retained Earnings |
|
|
Accumulated Other Comprehensive Loss |
|
|
Treasury Stock |
|
|
Non-Controlling Interest |
|
|
Total |
|
|||||||
Balance -- June 30, 2024 |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
Net income |
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Currency translation adjustments |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Pension and postretirement adjustment, net of tax |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Stock-based compensation |
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Share issuances |
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Balance -- September 29, 2024 |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
Net income |
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Currency translation adjustments |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Pension and postretirement adjustment, net of tax |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Stock-based compensation |
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Share issuances |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance -- December 29, 2024 |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
Net income |
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Currency translation adjustments |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Pension and postretirement adjustment, net of tax |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Stock-based compensation |
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Share issuances |
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Balance -- March 30, 2025 |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements
9
STRATTEC SECURITY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Strattec Security Corporation (the "Company" or “Strattec”), headquartered in Milwaukee, Wisconsin, is a leading global manufacturer and provider of highly engineered advanced automotive access and security products and solutions. Products include power access solutions, locks & locksets, keys & fobs, engineered latches, vehicle start systems, door handles, and other vehicle access products. Power access solutions provide the motion control for power liftgates, sliding power doors and power tailgates. While the Company serves major automotive original equipment manufacturers (“OEMs”) globally, the majority of sales are to the three largest OEMs in North America.
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial reporting and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The condensed consolidated balance sheet data as of June 29, 2025 was derived from the Company’s audited financial statements but does not include all disclosures required by GAAP. For additional information, including the Company’s significant accounting policies, refer to the consolidated financial statements and related footnotes in the Annual Report.
In the opinion of management, all adjustments considered necessary for a fair statement of financial results have been made. Such adjustments consist of only those of a normal recurring nature. Operating results for the three and nine months ended March 29, 2026 are not necessarily indicative of the results that may be expected for the entire fiscal year ending June 28, 2026. The condensed consolidated financial statements include the results of all wholly owned subsidiaries, as well as the results of a majority owned joint venture.
NOTE 2. RECENTLY ISSUED ACCOUNTING STANDARDS
In December 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU is intended to enhance the transparency and decision usefulness of income tax disclosures to provide information to better assess how an entity's operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. For the Company, this ASU is effective for annual periods beginning after December 15, 2024 (fiscal 2026). The adoption of ASU 2023-09 will not affect the Company’s financial position or its results of operations but will result in additional disclosures for the fiscal 2026 annual period and for interim periods thereafter.
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation, intangible asset amortization and depletion) included in certain expense captions presented on the face of the income statement. The ASU is effective for fiscal years beginning after December 15, 2026 (fiscal 2028) and for interim periods beginning after December 15, 2027 (fiscal 2029). The adoption of ASU 2024-03 will not affect the Company’s financial position or its results of operations but will result in additional disclosures for the fiscal 2028 annual period and for interim periods thereafter.
NOTE 3. WARRANTY
The Company generally offers its customers an assurance warranty on products sold, although warranty periods may vary by product type and application. The Company has a warranty reserve related to known and potential exposure to warranty claims in the event products fail to perform as expected and in the event the Company may be required to participate in the repair costs incurred by customers for such products. The estimation of the warranty reserve involves judgment and assumptions and is based on an analysis of historical warranty data as well as current trends and information.
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
||||||||||
|
|
March 29, |
|
|
March 30, |
|
|
March 29, |
|
|
March 30, |
|
|
||||
Balance, beginning of period |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
Provision charged to expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Payments, net of recoveries |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Balance, end of period |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
10
NOTE 4. CREDIT FACILITIES
The Company has a revolving credit agreement with BMO Harris N.A. ("Amended & Restated Credit Agreement"), which provides for a $
The Company's joint venture, ADAC-Strattec LLC, previously had an $
As of March 29, 2026, the Company and the joint venture were in compliance with all financial covenants.
Outstanding borrowings under the ADAC-Strattec Credit Facility were as follows (in thousands):
|
|
March 29, 2026 |
|
|
June 29, 2025 |
|
||
Outstanding borrowings |
|
$ |
|
|
$ |
|
||
Average outstanding borrowings and the weighted average interest rate under the ADAC-Strattec Credit Facility were as follows (in thousands, except percentages):
|
|
Nine Months Ended |
|
|||||
|
|
March 29, 2026 |
|
|
March 30, 2025 |
|
||
Average outstanding borrowings |
|
$ |
|
|
$ |
|
||
Weighted average interest rate |
|
|
% |
|
|
% |
||
NOTE 5. DERIVATIVE INSTRUMENTS
A portion of the Company's manufacturing costs are incurred in Mexican pesos, which causes earnings and cash flows to fluctuate with changes in the U.S. dollar/Mexican peso exchange rate. During the three and nine month periods ended March 29, 2026 and March 30, 2025, the Company entered into contracts with a creditworthy counterparty that provide for monthly Mexican peso currency forward contracts for a portion of peso denominated operating costs.
|
|
Effective Dates |
|
Notional Amount |
|
|
Average Forward Exchange Rate |
|
|
Fair Market Value |
|
|||
Buy MXP/Sell USD |
|
- |
|
$ |
|
|
|
|
|
$ |
( |
) |
||
NOTE 6. INCOME TAXES
The Company's income tax expense and effective tax rate for the three and nine month periods ended March 29, 2026 and March 30, 2025 were as follows (in thousands and percentage of Income before income taxes and non-controlling interest):
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
March 29, |
|
|
March 30, |
|
|
March 29, |
|
|
March 30, |
|
||||
Income before income taxes and non-controlling interest |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Income tax expense |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Effective tax rate |
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
11
The Company is subject to income taxes in the United States and foreign jurisdictions, primarily Mexico. The Company's income tax positions are based on interpretations of income tax laws and rulings in each of the jurisdictions in which the Company operates. Interim income tax expense is determined based on an estimate of the overall annual effective income tax rate which can vary due to the relationship of foreign and domestic earnings, state taxes and available deductions, credits and discrete items. The effective tax rate for each period presented differs from the U.S. federal statutory rate of
On July 4, 2025, the One Big Beautiful Bill Act was enacted. There are multiple business tax provisions for which further guidance from the U.S. Treasury and the Internal Revenue Service is needed. The Company is currently reviewing and evaluating the impact of the guidance provided to date that could affect our income tax payable and deferred tax liability, including changes related to bonus depreciation and the expensing of research and development expenditures, among other topics.
NOTE 7. EARNINGS PER SHARE
A reconciliation of the components of the basic and diluted per-share computations follows (in thousands, except per share amounts):
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
March 29, |
|
|
March 30, |
|
|
March 29, |
|
|
March 30, |
|
||||
Net income attributable to Strattec |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic weighted-average shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
||||
Effect of dilutive securities - employee stock compensation plan |
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted weighted-average shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings per share attributable to Strattec |
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Diluted |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
NOTE 8. STOCK-BASED COMPENSATION
The Company has granted service-based restricted stock awards ("RSAs") and performance stock units ("PSUs") to employees and non-employee directors under existing stock incentive plans.
The number of shares of the Company's common stock authorized under the current 2024 Equity Incentive Plan is
As of March 29, 2026, there was $
A summary of restricted stock award and performance stock unit activity was as follows:
|
|
RSAs |
|
|
PSUs |
|
||||||||||
|
|
|
|
|
Weighted |
|
|
|
|
|
Weighted |
|
||||
|
|
|
|
|
Grant Date |
|
|
|
|
|
Grant Date |
|
||||
|
|
Shares |
|
|
Fair Value |
|
|
Shares |
|
|
Fair Value |
|
||||
Nonvested balance, June 29, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Granted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Vested |
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
— |
|
|
Forfeited |
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
— |
|
|
Nonvested balance, March 29, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
12
NOTE 9. OTHER INCOME (EXPENSE), NET
The following table summarizes the components of Other income (expense), net included in the accompanying consolidated statements of income (in thousands):
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
||||||||||
|
March 29, |
|
|
March 30, |
|
|
March 29, |
|
|
March 30, |
|
|
||||
Foreign currency transaction gain (loss) |
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
||
Rabbi trust assets gain (loss) |
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Realized gain (loss) on peso forward contracts, net |
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
||
Unrealized gain (loss) on peso forward contracts, net |
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
Non-service pension and postemployment cost |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
|
NOTE 10. ACCUMULATED OTHER COMPREHENSIVE LOSS BY COMPONENT
The following tables summarize the changes in accumulated other comprehensive loss (“AOCL”) by component (in thousands):
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
March 29, |
|
|
March 30, |
|
|
March 29, |
|
|
March 30, |
|
||||
Foreign currency translation adjustments: |
|
|
|
|
|
|
|
|
|
|
|
||||
Balance, beginning of period |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Other comprehensive (income) loss before reclassifications |
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Other comprehensive (income) loss attributable to non-controlling interest |
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Balance, end of period |
|
|
|
|
|
|
|
|
|
|
|
||||
Retirement and postretirement benefit plans: |
|
|
|
|
|
|
|
|
|
|
|
||||
Balance, beginning of period |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Other comprehensive (income) loss before reclassifications |
|
|
|
|
|
|
|
|
|
|
|
||||
Unrecognized net income |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance, end of period |
|
|
|
|
|
|
|
|
|
|
|
||||
Accumulated other comprehensive loss, end of period |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
NOTE 11. RELATED PARTY
The Company owns
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
March 29, |
|
|
March 30, |
|
|
March 29, |
|
|
March 30, |
|
||||
Management fee expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Net sales to joint venture partner |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
March 29, |
|
|
June 29, |
|
||
Accounts receivable from joint venture partner |
|
$ |
|
|
$ |
|
||
Accounts payable to joint venture partner |
|
$ |
|
|
$ |
|
||
13
NOTE 12. SEGMENT INFORMATION
The Company's Chief Operating Decision Maker ("CODM") is the . The CODM assesses the performance and makes capital and resource allocation decisions based on Net income
Net sales and significant segment expenses are as follows (in thousands):
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
March 29, 2026 |
|
|
March 30, 2025 |
|
|
March 29, 2026 |
|
|
March 30, 2025 |
|
||||
Net sales |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Significant expenses: |
|
|
|
|
|
|
|
|
|
|
|
||||
Direct material costs |
|
|
|
|
|
|
|
|
|
|
|
||||
Labor and overhead costs |
|
|
|
|
|
|
|
|
|
|
|
||||
Selling costs |
|
|
|
|
|
|
|
|
|
|
|
||||
Administrative costs |
|
|
|
|
|
|
|
|
|
|
|
||||
Engineering costs |
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
||||
Other (income) expense, net |
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
|
|
|
|
|
|
|
|
|
|
|
||||
Net income attributable to non-controlling interest |
|
|
|
|
|
|
|
|
|
|
|
||||
Net income attributable to Strattec |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Sales by product group were as follows (in thousands):
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
||||||||||
|
March 29, |
|
|
March 30, |
|
|
March 29, |
|
|
March 30, |
|
|
||||
Power access solutions |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
Door handles & exterior trim |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Keys & locksets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Latches |
|
|
|
|
|
|
|
|
|
|
|
|
||||
User interface controls |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Aftermarket and service |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
Sales to and receivables from customers that individually accounted for 10% or more of the Company's total net sales were as follows (in thousands and percent of total):
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||||||||||||||||
|
March 29, 2026 |
|
|
March 30, 2025 |
|
|
March 29, 2026 |
|
|
March 30, 2025 |
|
||||||||||||||||||||
|
Net Sales |
|
|
% |
|
|
Net Sales |
|
|
% |
|
|
Net Sales |
|
|
% |
|
|
Net Sales |
|
|
% |
|
||||||||
General Motors Company |
$ |
|
|
|
% |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||||||
Ford Motor Company |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Stellantis |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||||||
14
|
March 29, 2026 |
|
|
June 29, 2025 |
|
||||||||||
|
Receivables |
|
|
% |
|
|
Receivables |
|
|
% |
|
||||
General Motors Company |
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Ford Motor Company |
|
|
|
|
|
|
|
|
|
|
|
||||
Stellantis |
|
|
|
|
|
|
|
|
|
|
|
||||
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
NOTE 13. COMMITMENTS AND CONTINGENCIES
From time to time, the Company is party to various legal actions, administrative proceedings, and claims arising in the ordinary course of business, including matters related to alleged product defects and warranties, contract disputes, intellectual property, and employment issues. The Company recognizes accruals for such matters in accordance with U.S. GAAP when a loss is probable and reasonably estimable. While the outcome of these matters cannot be predicted with certainty, based on currently available information, management does not believe the ultimate resolution of these proceedings, individually or in the aggregate, will have a material adverse effect on the Company's financial position, results of operations, or cash flows.
15
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following Management's Discussion and Analysis should be read in conjunction with the accompanying condensed consolidated financial statements and notes.
Business Overview
Strattec is a global automotive access company that designs and delivers safe, secure, and highly engineered access solutions for the automotive and mobility industries. Built on generations of access and security engineering expertise, Strattec partners closely with OEMs to create differentiated, system‑level access experiences for end consumers. Strattec’s portfolio spans the access journey from Permission, enabling secure vehicle entry through advanced mechanical and electronic systems; to Motion, delivering effortless, reliable powered access that enhances everyday usability; and through to Hold, providing precision‑engineered latching solutions that give drivers confidence through proven strength, safety, and durability trusted by OEMs worldwide. As access becomes increasingly intelligent, connected, and central to vehicle experience, Strattec’s strategy is to expand its market share, further diversify its customers and geographic reach while becoming the most trusted access partner to drive long‑term growth across global automotive and mobility markets.
Our strategic priority is to execute a business transformation to strengthen the Company’s profitability and deliver sustainable sales growth. We expect to improve our business with upgraded systems and processes, modernization of our support functions and a focus on productivity and efficiencies in our manufacturing operations. We believe this will result in an optimized cost structure and consistent cash generation through improved working capital velocity and efficient asset utilization. In the short term, cash generated from our operations will be reinvested in our business to fund our transformational efforts and growth initiatives. To drive organic growth, we will leverage our technical engineering expertise, market-leading positions and strong customer relationships to generate innovative solutions and capture more content on current platforms, win new platforms with current customers, gain new customers both domestically and abroad and build opportunities in the broader transportation industry.
Volatility in the North American automotive industry is driven by supply chain disruptions, global inflation, thinning labor availability, rising global commodity costs and a changing global trade and geopolitical climate. These macro conditions, coupled with changes in production volumes by OEMs in response to new vehicle consumer demand, impact our sales and profitability levels. An evolving tariff landscape, combined with heightened geopolitical instability in certain global regions has further disrupted supply chains and has added complexity to production and cost planning across the industry. Lower near term North American light vehicle production estimates, which are subject to change, reflect these dynamics in addition to continued industry-wide supply chain disruptions and availability of raw materials including rare earth minerals. As we look forward and navigate these macroeconomic challenges and fluctuating OEM production volumes, we are focused on executing new initiatives to improve our cost structure, continuing to mitigate the impact of incremental tariff costs, driving cash flow through improved working capital utilization and securing new platforms to solidify future sales growth.
16
Analysis of Results of Operations
Three months ended March 29, 2026 (third quarter fiscal 2026) compared with the three months ended March 30, 2025 (third quarter fiscal 2025)
The Company's consolidated results of operations were as follows (in thousands):
|
|
Three Months Ended |
|
|
Change |
|
||||||||||
|
|
March 29, 2026 |
|
|
March 30, 2025 |
|
|
$ |
|
|
% |
|
||||
Net sales |
|
$ |
137,632 |
|
|
$ |
144,082 |
|
|
$ |
(6,450 |
) |
|
|
-4 |
% |
Direct material costs |
|
|
73,858 |
|
|
|
78,696 |
|
|
|
(4,838 |
) |
|
|
-6 |
% |
Labor and overhead costs |
|
|
41,113 |
|
|
|
42,281 |
|
|
|
(1,168 |
) |
|
|
(3 |
%) |
Cost of goods sold |
|
|
114,971 |
|
|
|
120,977 |
|
|
|
(6,006 |
) |
|
|
-5 |
% |
Gross profit |
|
|
22,661 |
|
|
|
23,105 |
|
|
|
(444 |
) |
|
|
-2 |
% |
Gross margin |
|
|
16.5 |
% |
|
|
16.0 |
% |
|
|
|
|
|
40 |
bp |
|
Selling, administrative and engineering expenses |
|
|
17,615 |
|
|
|
16,020 |
|
|
|
1,595 |
|
|
|
10 |
% |
Income from operations |
|
|
5,046 |
|
|
|
7,085 |
|
|
|
(2,039 |
) |
|
|
-29 |
% |
Operating margin |
|
|
3.7 |
% |
|
|
4.9 |
% |
|
|
|
|
|
-130 |
bp |
|
Interest income |
|
|
879 |
|
|
|
529 |
|
|
|
350 |
|
|
|
66 |
% |
Interest expense |
|
|
(70 |
) |
|
|
(243 |
) |
|
|
173 |
|
|
|
-71 |
% |
Other income (expense), net |
|
|
(748 |
) |
|
|
(16 |
) |
|
|
(732 |
) |
|
|
4,575 |
% |
Income before income taxes and non-controlling interest |
|
|
5,107 |
|
|
|
7,355 |
|
|
|
(2,248 |
) |
|
|
-31 |
% |
Income tax expense |
|
|
1,282 |
|
|
|
1,644 |
|
|
|
(362 |
) |
|
|
-22 |
% |
Net income |
|
|
3,825 |
|
|
|
5,711 |
|
|
|
(1,886 |
) |
|
|
-33 |
% |
Net income attributable to non-controlling interest |
|
|
585 |
|
|
|
315 |
|
|
|
270 |
|
|
|
86 |
% |
Net income attributable to Strattec |
|
$ |
3,240 |
|
|
$ |
5,396 |
|
|
$ |
(2,156 |
) |
|
|
-40 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings per share attributable to Strattec: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
0.79 |
|
|
$ |
1.34 |
|
|
$ |
(0.54 |
) |
|
|
-41 |
% |
Diluted |
|
$ |
0.78 |
|
|
$ |
1.32 |
|
|
$ |
(0.54 |
) |
|
|
-41 |
% |
Third quarter fiscal 2026 sales were $137.6 million, representing a decrease of $6.5 million or 4.5%, compared to the prior year, primarily due to lower OEM production volumes and the cancellation of certain customer programs. Third quarter North American automotive industry production declined 2.7% as OEMs managed supply chain challenges and dealer inventory levels. In addition, certain customer programs were cancelled or significantly reduced as OEMs adjusted electric vehicle (“EV”) production plans and product portfolios, which resulted in a $3.5 million reduction in year-over-year third quarter sales. Partially offsetting these volume declines was $1.3 million of pricing, including $0.6 million of US tariff cost recoveries.
Gross profit was $22.7 million in the third quarter of fiscal 2026, compared to $23.1 million in the comparable prior year quarter. Despite lower volumes and the unfavorable impact of changes in foreign currency exchange rates of $2.5m, gross margin improved from 16.0% in the prior year to 16.5% in the current year. The improvement primarily reflects the benefits of cost reduction initiatives (including $1.7 million of savings from restructuring actions), productivity improvements of $1.6 million, net pricing realization of $1.0 million and $0.3 million of lower tariff costs. Third quarter fiscal 2026 gross profit also benefited from a $0.6 million recovery of previously expensed costs associated with OEM cancelled EV programs.
Selling, administrative, and engineering expenses were $17.6 million, a $1.6 million increase year-over-year. Increased costs in the current quarter were the result of incremental employee costs of $1.0 million, as higher benefit costs were partially offset by lower bonus provisions and timing of outside service spend. The current quarter also includes $0.7 million of incremental business transformation costs and a $0.7 million recovery associated with customer program cancellations.
Interest income increased $0.4 million due to increased levels of cash and cash equivalents, which are invested in overnight money market funds. Interest expense decreased $0.2 million, the result of a continued reduction in the average amounts outstanding under revolving credit agreements.
Other income (expense) was $0.7 million of expense in the current period. Changes in other income (expense) reflect foreign currency transaction gains and losses, unrealized mark-to-market gains and losses on foreign currency forward contracts, and non-service post-employment costs.
17
The effective income tax rate was 25.1% and 22.4% for the third quarter of fiscal 2026 and 2025, respectively. The effective tax rate for each period presented differs from the U.S. federal statutory rate of 21% primarily due to the accrual of foreign income taxes, which are generally higher than the U.S. federal statutory rate, partially offset by the recognition of U.S. research and development tax credits and discrete income tax benefits associated with share-based payments. The effective tax rate for the third quarter of fiscal 2026 increased primarily due to a shift in the geographic mix of earnings toward higher-tax jurisdictions.
Nine months ended March 29, 2026 compared with the nine months ended March 30, 2025
The Company's consolidated results of operations were as follows (in thousands):
|
|
Nine Months Ended |
|
|
Change |
|
||||||||||
|
|
March 29, 2026 |
|
|
March 30, 2025 |
|
|
$ |
|
|
% |
|
||||
Net sales |
|
$ |
427,565 |
|
|
$ |
413,053 |
|
|
$ |
14,512 |
|
|
|
4 |
% |
Direct material costs |
|
|
234,169 |
|
|
|
229,270 |
|
|
|
4,899 |
|
|
|
2 |
% |
Labor and overhead costs |
|
|
121,679 |
|
|
|
124,606 |
|
|
|
(2,927 |
) |
|
|
(2 |
%) |
Cost of goods sold |
|
|
355,848 |
|
|
|
353,876 |
|
|
|
1,972 |
|
|
|
1 |
% |
Gross profit |
|
|
71,717 |
|
|
|
59,177 |
|
|
|
12,540 |
|
|
|
21 |
% |
Gross margin |
|
|
16.8 |
% |
|
|
14.3 |
% |
|
|
|
|
|
240 |
bp |
|
Selling, administrative and engineering expenses |
|
|
51,362 |
|
|
|
44,895 |
|
|
|
6,467 |
|
|
|
14 |
% |
Income from operations |
|
|
20,355 |
|
|
|
14,282 |
|
|
|
6,073 |
|
|
|
43 |
% |
Operating margin |
|
|
4.8 |
% |
|
|
3.5 |
% |
|
|
|
|
|
130 |
bp |
|
Interest income |
|
|
2,641 |
|
|
|
1,286 |
|
|
|
1,355 |
|
|
|
105 |
% |
Interest expense |
|
|
(322 |
) |
|
|
(795 |
) |
|
|
473 |
|
|
|
-59 |
% |
Other income (expense), net |
|
|
668 |
|
|
|
(369 |
) |
|
|
1,037 |
|
|
|
(281 |
%) |
Income before income taxes and non-controlling interest |
|
|
23,342 |
|
|
|
14,404 |
|
|
|
8,938 |
|
|
|
62 |
% |
Income tax expense |
|
|
5,337 |
|
|
|
3,547 |
|
|
|
1,790 |
|
|
|
50 |
% |
Net income |
|
|
18,005 |
|
|
|
10,857 |
|
|
|
7,148 |
|
|
|
66 |
% |
Net income attributable to non-controlling interest |
|
|
1,289 |
|
|
|
439 |
|
|
|
850 |
|
|
|
194 |
% |
Net income attributable to Strattec |
|
$ |
16,716 |
|
|
$ |
10,418 |
|
|
$ |
6,298 |
|
|
|
60 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings per share attributable to Strattec: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
4.10 |
|
|
$ |
2.59 |
|
|
$ |
1.52 |
|
|
|
59 |
% |
Diluted |
|
$ |
4.04 |
|
|
$ |
2.56 |
|
|
$ |
1.48 |
|
|
|
58 |
% |
Year-to-date net sales totaled $427.6 million, representing an increase of $14.5 million, or 4%, compared to the prior year period. The year-over-year increase in net sales was primarily driven by $9.5 million of pricing (including $2.6 million of customer recoveries for tariffs), and a $5 million increase in shipment volumes. Sales volumes reflected a $4.6 million increase on existing platforms and $3.8 million of net new program launches, which were partially offset as sales associated with cancelled EV programs declined $3.4 million compared to the prior‑year period.
Year-to-date gross profit was $71.7 million, compared with $59.2 million in the comparable prior year period. Despite unfavorable changes in foreign currency exchange rates of $4.6 million and incremental tariff costs of $1.9 million, gross profit margin improved year-over-year from 14.3% to 16.8%, a 240 basis point improvement. Material costs increased $4.9 million on higher production levels while labor and overhead costs decreased $2.9 million. Lower year-over-year conversion costs on higher sales reflect our focused efforts to manage our cost structure, which includes a $4.6 million labor cost benefit from completed restructuring actions.
Selling, administrative, and engineering expenses were 12.0% of sales for the nine months ended March 29, 2026, compared with 10.9% in the prior year period. Year-to-date expenses were $51.4 million, a $6.5 million increase year-over-year. The increase in costs reflects $3.0 million associated with headcount additions and higher incentive compensation costs $0.5 million, $2.5 million of business transformation costs ($0.5 million in the prior year period), and efforts to improve our cost structure including restructuring and voluntary retirement costs of $1.7 million ($1.1 million in the prior year period). These increases were partially offset by reduced executive transition costs of $1.4 million.
Interest income increased $1.4 million due to increased levels of cash and cash equivalents, which are invested in overnight money market funds. Interest expense decreased $0.5 million, the result of a continued reduction in the average amounts outstanding under revolving credit agreements.
18
Other income (expense) was $0.7 million of income in the current period. Changes in other income (expense) reflect foreign currency transaction gains and losses, unrealized mark-to-market gains and losses on foreign currency forward contracts, and non-service post-employment costs.
The effective income tax rate was 22.9% and 24.0% for the year-to-date period of fiscal 2026 and 2025, respectively. The change in the effective rate between period was primarily impacted by earnings mix and the foreign tax rate differential.
Liquidity and Capital Resources
At March 29, 2026, we had $107.0 million of cash and cash equivalents, of which $5.3 million was held by foreign subsidiaries. Excess cash is held in money market funds. The following table summarizes our cash flows provided by (used in) operating, investing and financing activities (in millions):
|
Nine Months Ended |
|
|||||
|
March 29, 2026 |
|
|
March 30, 2025 |
|
||
Cash provided by operating activities |
$ |
36.7 |
|
|
$ |
41.5 |
|
Cash used in investing activities |
|
(5.7 |
) |
|
|
(4.2 |
) |
Cash used in financing activities |
|
(8.4 |
) |
|
|
— |
|
Effect of exchange rate changes on cash |
|
(0.2 |
) |
|
|
(0.7 |
) |
Net increase in cash and cash equivalents |
$ |
22.4 |
|
|
$ |
36.7 |
|
Cash flow from operations was $36.7 million, a decrease of $4.8 million compared with the prior year. Current year-to-date cash from operations reflects improved cash earnings, while the prior year period benefited from a $17 million reduction in operating assets and liability, including the benefit of extending vendor accounts payable. Cash used in investing activities, which includes capital expenditures to support customer programs and modernization of equipment was $5.7 million year-to-date compared with $4.2 million in the prior year period. Current year cash used in financing activities resulted from the repayment of $7.0 million under the joint venture revolving credit agreement and the payment of $1.4 million for taxes withheld related to the vesting of share-based awards.
At March 29, 2026, no borrowings were outstanding under the $40.0 million Amended & Restated Credit Agreement and $1.0 million was outstanding under the $18.0 million joint venture revolving credit agreement.
On April 30, 2026, ADAC-Strattec LLC entered into an amended and restated revolving credit agreement with BMO Harris N.A. (the "Amended & Restated JV Credit Facility"), which provides for a $10 million asset-based revolving line of credit, subject to a borrowing base, maturing October 2028. The Amended & Restated JV Credit Facility replaces the previous $18.0 million joint venture facility, which was terminated upon the closing of the agreement.
We believe that the revolving credit lines, combined with our existing cash and anticipated operating cash flows will be adequate to meet operating, debt service and capital expenditure funding requirements. In the short-term., cash generated from operations will be reinvested in our business to fund our transformational efforts and growth initiatives.
Primary Working Capital Management
We use primary working capital as a percentage of sales (PWC %) as a key metric of working capital management. We define this metric as the sum of net accounts receivable and net inventory less accounts payable, divided by the past three months sales annualized. The following table shows a comparison of primary working capital (dollars in millions):
|
March 29, 2026 |
|
|
PWC % |
|
|
June 29, 2025 |
|
|
PWC % |
|
||||
Accounts Receivable, net |
$ |
102.2 |
|
|
|
19 |
% |
|
$ |
102.1 |
|
|
|
17 |
% |
Inventory, net |
|
73.4 |
|
|
|
13 |
% |
|
|
64.7 |
|
|
|
11 |
% |
Accounts payable |
|
(64.7 |
) |
|
|
(12 |
%) |
|
|
(65.8 |
) |
|
|
(11 |
%) |
Net primary working capital |
$ |
110.9 |
|
|
|
20 |
% |
|
$ |
101.0 |
|
|
|
17 |
% |
Primary working capital levels at March 29, 2026 are higher than the beginning of the fiscal year, as inventory levels were increased $8.7 million to improve customer deliveries.
19
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act, are recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that the information required to be disclosed by the Company in reports that it files or submits under the Exchange Act are accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of such period, our disclosure controls and procedures were effective at reaching a level of reasonable assurance. It should be noted that in designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost benefit relationship of possible controls and procedures. We have designed our disclosure controls and procedures to reach a level of reasonable assurance of achieving the desired control objectives.
There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
20
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In the normal course of business, we may be involved in various legal proceedings from time to time. We do not believe we are currently involved in any claim or action the ultimate disposition of which would have a material adverse effect on our financial statements.
ITEM 1A. RISK FACTORS
An investment in our Common Stock involves risks. Before making an investment decision, you should carefully consider all of the information in this Quarterly Report, including the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Condensed Consolidated Financial Statements and related notes. In addition, you should carefully consider the risks and uncertainties described in the section entitled “Risk Factors” in our Annual Report. If any of the identified risks are realized, our business, financial condition and operating results could be materially and adversely affected. In that case, the trading price of our Common Stock may decline. In addition, other risks of which we are currently unaware, or which we currently do not view as material, could have a material adverse effect on our business, financial condition and operating results. There have been no material changes to the risk factors disclosed in our Annual Report on Form 10‑K for the year ended June 29, 2025 filed with the SEC on August 25, 2025.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF
EQUITY SECURITIES
Our Board of Directors initially authorized a stock repurchase program on October 16, 1996. The Board of Directors has periodically increased the number of shares authorized for repurchase under the program, most recently in August 2008. The program currently authorizes the repurchase of up to 3,839,395 shares of our common stock from time to time, directly or through brokers or agents, and has no expiration date. Over the life of the repurchase program through March 29, 2026, a total of 3,655,322 shares have been repurchased at a cost of approximately $136.4 million. Currently 184,073 shares remain available to be repurchased under the program. No shares were repurchased during the nine month period ended March 29, 2026.
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
None.
ITEM 5. OTHER INFORMATION
(c) Trading Plans.
During the fiscal quarter ended March 29, 2026, no director or officer of the Company
ITEM 6. EXHIBITS
Exhibit |
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If Incorporated by Reference, Documents with Which Exhibit was Previously Filed with SEC |
31.1 |
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Rule 13a-14(a) Certification of Jennifer L. Slater, Chief Executive Officer |
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Filed herewith |
31.2 |
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Rule 13a-14(a) Certification of Matthew Pauli, Chief Financial Officer |
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Filed herewith |
32 |
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This certification is not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended. |
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101 |
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Interactive Data Files pursuant to Rule 405 of Regulation S-T. XBRL Instance Document – the XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
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104 |
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The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 29, 2026 has been formatted in Inline XBRL. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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Strattec Security Corporation (Registrant) |
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Date: May 8, 2026 |
By: |
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/s/ Matthew Pauli |
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Matthew Pauli |
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Senior Vice President, |
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Chief Financial Officer, |
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Secretary and Treasurer |
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(Principal Financial and Accounting Officer) |
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Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Jennifer L. Slater, certify that:
Date: May 8, 2026
/s/ Jennifer L. Slater
Jennifer L. Slater,
Chief Executive Officer
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Matthew Pauli, certify that:
Date: May 8, 2026
/s/ Matthew Pauli
Matthew Pauli,
Chief Financial Officer
Exhibit 32
Certification of Periodic Financial Report
Pursuant to 18 U.S.C. Section 1350
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of STRATTEC SECURITY CORPORATION (the "Company") certifies that the Quarterly Report on Form 10-Q of the Company for the quarter ended March 29, 2026 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and information contained in that Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: May 8, 2026 |
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/s/ Jennifer L. Slater |
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Jennifer L. Slater, |
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Chief Executive Officer |
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Dated: May 8, 2026 |
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/s/ Matthew Pauli |
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Matthew Pauli, |
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Chief Financial Officer |
This certification is made solely for purpose of 18 U.S.C. Section 1350, subject to the knowledge standard contained therein, and not for any other purpose.