For Third Quarter Fiscal 2026, Strattec Continued to Advance Transformation Efforts to Strengthen Business Performance

Strong balance sheet provides financial flexibility with $107 million of cash; $11.4 million of cash generated from operations in the third quarter Sales declined 4.5%, consistent with expectations, on lower North American OEM automotive production volumes of key platforms Gross margin improved 50 basis points year-over-year to 16.5%, despite the sales decline and 170 basis point foreign currency exchange rate headwind Net income attributable to Strattec was $3.2 million, or $0.78 per diluted share; Adjusted EBITDA1 was $10.1 million, or 7.3% of net sales MILWAUKEE--(BUSINESS WIRE)--May 7, 2026-- Strattec (Nasdaq: STRT), a global provider of highly engineered access solutions for the automotive and mobility industries, today reported financial results for its third quarter of fiscal year 2026, which ended March 29, 2026. Jennifer Slater, President and CEO of Strattec, said, “We are continuing to progress on our strategy to transform Strattec into a more predictable, higher performing business even as we continually face the challenges of the automotive industry including weak end market demand, platform changes, tariffs and the long-cycle nature of the sector. Our near-term objectives remain focused on improving our cost structure and driving a stronger more predictable business while positioning ourselves to win new opportunities on future platforms for model years 2029 and beyond and developing deeper relationships with both current and prospective customers.” She concluded, “Our team is leaning into the challenges and recognizes there is still more work to be done. We are encouraged with our potential and are supported with a very solid balance sheet and strong cash generation.” FY 2026 Third Quarter Financial Summary Net sales were $137.6 million, down $6.5 million, or 4.5% from the prior-year period. Lower sales were the result of $7.7 million in lower volume including $3.4 million lower sales related to customer EV program cancellations. The volume declines were partially offset by $1.3 million in pricing including $0.6 million in tariff recoveries. Gross profit was $22.7 million, compared with $23.1 million in the prior year, on lower volume. Gross margin expanded 50 basis points to 16.5% primarily as a result of $1.7 million in restructuring savings and $0.6 million of recoveries from customer program cancellations. Partially offsetting these benefits were $2.5 million higher costs related to unfavorable changes in foreign exchange rates, a $0.5 million increase in labor and benefit costs, and $0.3 million of incremental tariff costs. Selling, administrative and engineering (“SAE”) expenses increased $1.6 million to $17.6 million, or 12.8% of sales, compared with $16.0 million, or 11.1% of sales, in the prior-year period. Elevated SAE expenses included $1.4 million in business transformation and executive transition costs, $1.3 million increase in salaries and employee benefits and $0.4 million increase in professional fees. These costs were partially offset by $0.7 million in recoveries related to customer cancelled EV programs and restructuring savings of $0.2 million. Interest income grew $0.4 million on higher cash balances, while interest expenses declined $0.2 million on lower borrowings. Other expense increased $0.7 million primarily as a result of unfavorable foreign currency movements at the end of the reported period and related fair value adjustments to foreign currency forward contracts. Net income attributable to Strattec was $3.2 million, or $0.78 per diluted share, compared with $5.4 million, or $1.32 per diluted share, in the prior-year period. On an adjusted basis, third quarter fiscal 2026 net income attributable to Strattec was $3.7 million and adjusted diluted earnings per share1 was $0.90, compared with $1.50 in the prior year. Lower adjusted dilutive earnings per share was primarily the result of changes in foreign currency exchange rates, which unfavorably impacted year-over-year comparisons of both cost of goods sold and other income and expense. Adjusted EBITDA1 for the quarter was $10.1 million compared with $12.9 million in the prior-year period. Adjusted EBITDA margin of 7.3%, compared with 8.9% in the fiscal 2025 third quarter. Strong Balance Sheet Cash from operations in the third quarter of fiscal 2026 was $11.4 million, compared with $20.7 million in the prior-year period. Despite lower net income, cash from operations benefited from the collection of $5.0 million of VAT balances and $1.5 million in recovery of pre-production costs. At March 29, 2026, Strattec had $107 million in cash and cash equivalents, up from $99.0 million at the end of the second quarter of fiscal 2026 and $84.6 million at the end of the prior fiscal year. Subsequent to end of the quarter, the Company replaced its existing joint venture credit facility with a new revolving credit facility which extended the maturity date. Third Quarter Fiscal Year 2026 Webcast and Conference Call Strattec will host a conference call and webcast tomorrow, Friday, May 8, 2026, at 8:00 am Central Time/9:00 am Eastern Time to review the financial and operating results for the period ended March 29, 2026, and provide an update on its transformation progress. A question-and-answer session will follow. You can access the call by phoning +1 (201) 689-8470 or find the webcast and accompanying slide presentation at investors.strattec.com. A telephonic replay will be available from 12:00 p.m. ET on the day of the call through Thursday, May 21, 2026. To listen to the archived call, dial +1 (412) 317-6671 and enter replay PIN 13759857. The webcast replay will be available on the Investor Relations section of the Company’s website investors.strattec.com, where a transcript will be posted once available. ____________________ 1 Refer to use of “Non-GAAP Financial Metrics and Additional Financial Information” as well as accompanying reconciliations to GAAP About Strattec 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. For more information, visit www.strattec.com. Safe Harbor Statement Certain statements contained in this release contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words or phrases such as “anticipate,” “believe,” “could,” “expect,” “intend,” “may,” “planned,” “potential,” “should,” “will,” and “would.” Such forward-looking statements are inherently subject to many uncertainties in the Company’s operations and business environment. These uncertainties include general economic conditions, in particular, relating to the automotive industry, consumer demand for the Company’s and its customers’ products, competitive and technological developments, customer purchasing actions, changes in warranty provisions and customer product recall policies, work stoppages at the Company or at the location of its key customers as a result of labor disputes, foreign currency fluctuations, uncertainties stemming from U.S. trade policies, tariffs and reactions to the same from foreign countries, matters adversely impacting the timing and availability of component parts and raw materials needed for the production of the Company’s products and the products of its customers and fluctuations in costs of operation. 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. Such uncertainties and other operational matters are discussed further in the Company’s quarterly and annual filings with the Securities and Exchange Commission. The forward-looking statements made herein are only made as of the date of this press release and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances occurring after the date of this release. Use of Non-Gaap Financial Metrics and Additional Financial Information In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Strattec provides Adjusted Non-GAAP information as additional information for its operating results. References to Adjusted Non-GAAP information are to non-GAAP financial measures. These measures are not required by, in accordance with, or an alternative for, GAAP and may be different from similarly titled non-GAAP financial measures used by other companies. Strattec’s management uses these measures to make strategic decisions, establish budget plans and forecasts, identify trends affecting Strattec’s business, and evaluate performance. Management believes that providing these non-GAAP financial measures to investors, as a supplement to GAAP financial measures, will help investors evaluate Strattec’s core operating and financial performance and business trends consistent with how management evaluates such performance and trends. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures. Strattec Security Corporation Consolidated Statements of Income (Unaudited) (in thousands, except per share amounts) Three Months Ended Nine Months Ended March 29, 2026 March 30, 2025 March 29, 2026 March 30, 2025 Net sales $ 137,632 $ 144,082 $ 427,565 $ 413,053 Cost of goods sold 114,971 120,977 355,848 353,876 Gross profit 22,661 23,105 71,717 59,177 Gross margin 16.5 % 16.0 % 16.8 % 14.3 % Selling, administrative and engineering expenses 17,615 16,020 51,362 44,895 Income from operations 5,046 7,085 20,355 14,282 Operating margin 3.7 % 4.9 % 4.8 % 3.5 % Interest income 879 529 2,641 1,286 Interest expense (70 ) (243 ) (322 ) (795 ) Other (expense) income, net (748 ) (16 ) 668 (369 ) Income before provision for income taxes and non-controlling interest 5,107 7,355 23,342 14,404 Income tax expense 1,282 1,644 5,337 3,547 Net income 3,825 5,711 18,005 10,857 Net income attributable to non-controlling interest 585 315 1,289 439 Net income attributable to Strattec $ 3,240 $ 5,396 $ 16,716 $ 10,418 Earnings per share attributable to Strattec Basic $ 0.79 $ 1.34 $ 4.10 $ 2.59 Diluted $ 0.78 $ 1.32 $ 4.04 $ 2.56 Weighted average shares outstanding: Basic 4,085 4,039 4,073 4,026 Diluted 4,141 4,085 4,133 4,067 Strattec Security Corporation Consolidated Balance Sheets (Unaudited) (in thousands, except share amounts) March 29, 2026 June 29, 2025 ASSETS Current Assets: Cash and cash equivalents $ 106,957 $ 84,579 Receivables, net 102,164 102,061 Inventories, net 73,401 64,701 Pre-production costs 5,304 8,657 Value-added tax recoverable 9,935 19,389 Other current assets 6,396 10,676 Total current assets 304,157 290,063 Noncurrent Assets: Property, plant and equipment, net 71,400 77,410 Deferred income taxes 19,694 19,531 Other long-term assets 4,296 4,450 Total Assets $ 399,547 $ 391,454 LIABILITIES AND SHAREHOLDERS’ EQUITY Current Liabilities: Accounts payable $ 64,742 $ 65,824 Accrued payroll and benefits 18,074 22,956 Value-added tax payable 7,905 11,933 Warranty reserve 8,603 8,900 Current portion of borrowings under credit facilities 1,000 — Other current liabilities 15,522 9,737 Total current liabilities 115,846 119,350 Noncurrent Liabilities: Noncurrent portion of borrowings under credit facilities — 8,000 Post-employment benefits 12,774 13,325 Other noncurrent liabilities 3,774 4,348 Total Liabilities 132,394 145,023 Shareholders’ Equity: Common stock, authorized 18,000,000 shares, $.01 par value, 7,701,768 issued shares at March 29, 2026 and 7,635,883 issued shares at June 29, 2025 77 76 Capital in excess of par value 106,425 103,784 Retained earnings 286,013 269,297 Accumulated other comprehensive loss (15,209 ) (16,113 ) Less: treasury stock, at cost (3,616,086 shares at March 29, 2026 and 3,596,549 shares at June 29, 2025) (136,795 ) (135,452 ) Total Strattec shareholders’ equity 240,511 221,592 Non-controlling interest 26,642 24,839 Total Shareholders' Equity 267,153 246,431 Total Liabilities and Shareholders' Equity $ 399,547 $ 391,454 Strattec Security Corporation Consolidated Statements of Cash Flows (Unaudited) (in thousands) Three Months Ended Nine Months Ended March 29, 2026 March 30, 2025 March 29, 2026 March 30, 2025 OPERATING ACTIVITIES: Net income $ 3,825 $ 5,711 $ 18,005 $ 10,857 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 3,772 3,746 11,450 10,952 Foreign currency transaction loss (gain) (603 ) 141 531 (1,052 ) Stock-based compensation expense 811 760 2,605 1,839 Unrealized (gain) loss on peso forward contracts 3,182 (705 ) 2,810 231 Other, net (439 ) 261 105 1,077 Change in operating assets and liabilities Receivables (11,266 ) (17,616 ) 1,628 (10,237 ) Inventories (1,467 ) 5,920 (8,700 ) 6,058 Prepaids and other assets 5,333 (1,850 ) 11,982 5,994 Accounts payable 5,428 20,720 (934 ) 16,730 Accrued liabilities 2,865 3,632 (2,832 ) (948 ) Net cash provided by operating activities 11,441 20,720 36,650 41,501 INVESTING ACTIVITIES: Purchase of property, plant and equipment (1,752 ) (1,170 ) (5,913 ) (4,160 ) Proceeds from sale of property, plant and equipment — — 259 — Net cash used in investing activities (1,752 ) (1,170 ) (5,654 ) (4,160 ) FINANCING ACTIVITIES: Borrowings under credit facilities — — — 3,000 Repayment of borrowings under credit facilities (1,500 ) — (7,000 ) (3,000 ) Payment for debt issuance costs — — (98 ) — Payment for taxes withheld from stock-based awards (79 ) — (1,353 ) — Share issuances 16 16 47 44 Net cash (used in) provided by financing activities (1,563 ) 16 (8,404 ) 44 Foreign currency impact on cash (196 ) (85 ) (214 ) (689 ) NET INCREASE IN CASH AND CASH EQUIVALENTS 7,930 19,481 22,378 36,696 CASH AND CASH EQUIVALENTS Beginning of period 99,027 42,625 84,579 25,410 End of period $ 106,957 $ 62,106 $ 106,957 $ 62,106 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Income taxes $ 764 $ 596 $ 1,921 $ 9,135 Interest $ 34 $ 172 $ 218 $ 731 Non-cash investing activities: Change in capital expenditures in accounts payable $ (7 ) $ 1,176 (7 ) $ 726 Strattec Security Corporation Reconciliation of GAAP to Non-GAAP Financial Measures (In thousands, except per share amounts) Fiscal 2025 Fiscal 2026 Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total NET SALES: Net Sales (GAAP) $ 139,052 $ 129,919 $ 144,082 $ 152,013 $ 565,066 $ 152,399 $ 137,534 $ 137,632 $ 427,565 ADJUSTED EBITDA: Net income attributable to Strattec (GAAP) $ 3,703 $ 1,319 $ 5,396 $ 8,267 $ 18,685 $ 8,529 $ 4,947 $ 3,240 $ 16,716 Net income (loss) attributable to non-controlling interest 45 79 315 (205 ) 234 8 696 585 1,289 Income tax expense 1,498 405 1,644 2,170 5,717 2,356 1,699 1,282 5,337 Other (income) expense, net (129 ) 482 16 (1,189 ) (820 ) 275 (1,691 ) 748 (668 ) Interest income (349 ) (408 ) (529 ) (753 ) (2,039 ) (877 ) (885 ) (879 ) (2,641 ) Interest expense 295 257 243 212 1,007 156 96 70 322 Income from operations 5,063 2,134 7,085 8,502 22,784 10,447 4,862 5,046 - 20,355 Adjustments: Depreciation 3,662 3,544 3,746 3,812 $ 14,764 3,785 3,893 3,772 $ 11,450 Non-cash stock-based compensation 188 891 760 887 2,726 669 1,125 811 2,605 Restructuring and similar charges - 265 809 (676 ) 398 - 1,305 424 1,729 Retroactive FY23 one-time pricing recovery, net - - - - - - - - Cancelled program settlements - - - - - - - (1,323 ) (1,323 ) Executive transition costs 941 921 214 (17 ) 2,058 136 88 423 647 Business transformation costs 74 215 259 479 1,027 514 994 960 2,468 4,865 5,836 5,788 4,485 20,974 5,104 7,405 5,067 - 17,576 Adjusted EBITDA (Non-GAAP) $ 9,928 $ 7,970 $ 12,873 $ 12,987 $ 43,758 $ 15,551 $ 12,267 $ 10,113 $ - $ 37,931 Adjusted EBITDA as a % of Net Sales 7.1 % 6.1 % 8.9 % 8.5 % 7.7 % 10.2 % 8.9 % 7.3 % 8.9 % ADJUSTED NET INCOME AND EARNINGS/(LOSS) PER SHARE: Net income attributable to Strattec (GAAP) $ 3,703 $ 1,319 $ 5,396 $ 8,267 $ 18,685 $ 8,529 $ 4,947 $ 3,240 $ 16,716 Adjustments: Restructuring and similar charges - 265 809 (676 ) 398 570 1,165 572 2,307 Cancelled program settlements - - - - - - - (1,323 ) (1,323 ) Executive transition costs 1,224 1,225 214 115 2,778 136 88 423 647 Business transformation costs 74 215 259 479 1,027 514 994 960 2,468 Non-controlling interest impact on above adjustments - - (160 ) 160 - (196 ) 190 (9 ) (15 ) Tax effect on above adjustments (292 ) (384 ) (376 ) 107 (945 ) (383 ) (335 ) (139 ) (857 ) 1,006 1,321 746 185 3,258 641 2,102 484 - 3,227 Adjusted Net Income attributable to Strattec (Non-GAAP) $ 4,709 $ 2,640 $ 6,142 $ 8,452 $ 21,943 $ 9,170 $ 7,049 $ 3,724 $ - $ 19,943 Weighted Average Basic Shares Outstanding 4,005 4,035 4,039 4,039 4,030 4,054 4,080 4,085 4,073 Weighted Average Diluted Shares Outstanding 4,046 4,070 4,085 4,105 4,076 4,127 4,131 4,141 4,133 Diluted earnings per share (GAAP) $ 0.92 $ 0.32 $ 1.32 $ 2.01 $ 4.58 $ 2.07 $ 1.20 $ 0.78 $ 4.04 Adjusted dilutive earnings per share (Non-GAAP) $ 1.16 $ 0.65 $ 1.50 $ 2.06 $ 5.38 $ 2.22 $ 1.71 $ 0.90 $ 4.83 View source version on businesswire.com: https://www.businesswire.com/news/home/20260507108431/en/ Investor Contact: Deborah K. Pawlowski, IRC Alliance Advisors IR Phone: 716-843-3908 Email: [email protected] Source: Strattec