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Strattec Security Corp. (STRT) filed Quarterly Report for the period ended 2011-10-02.
Strattec Security Corp. has a market cap of $68.7 million; its shares were traded at around $20.52 with a P/E ratio of 10.7 and P/S ratio of 0.3. The dividend yield of Strattec Security Corp. stocks is 2%.
This is the annual revenues and earnings per share of STRT over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of STRT.
Highlight of Business Operations:
Net sales for the three months ended October 2, 2011 were $66.4 million compared to net sales of $59.8 million for the three months ended September 26, 2010. Sales to our largest customers overall increased in the current quarter compared to the prior year quarter levels due to higher customer vehicle production volumes. Sales to Chrysler Group LLC were $19.8 million in the current quarter compared to $19.6 million in the prior year quarter. Sales to General Motors Company were $16.1 million in the current quarter compared to $14.8 million in the prior year quarter. Included in the prior quarter sales to General Motors were $1.7 million of sales to Nexteer Automotive, which was then owned by General Motors. Sales to Ford Motor Company increased to $8.3 million in the current quarter compared to $5.5 million in the prior year quarter. Sales to Hyundai/Kia were $3.8 million in the current quarter compared to $4.3 million in the prior year quarter.Gross profit as a percentage of net sales was 17.3 percent in the current quarter compared to 17.0 percent in the prior year quarter. The higher gross profit margin was primarily the result of higher customer vehicle production volumes compared to the prior year quarter which resulted in more favorable absorption of fixed manufacturing costs. This was partially offset, with respect to the current quarter, by a less favorable product content sales mix, higher purchased raw material costs for zinc and brass, and an unfavorable Mexican peso to U.S. dollar exchange rate affecting the U.S. dollar cost of our Mexican operations for most of the quarter. The average zinc price paid per pound increased to $1.07 in the current quarter from $0.97 in the prior year quarter. During the current quarter, we used approximately 2.7 million pounds of zinc. This resulted in increased zinc costs of approximately $275,000 in the current quarter compared to the prior year quarter. The average brass price paid per pound increased to $4.40 in the current quarter from $3.67 in the prior year quarter. During the current quarter, we used approximately 220,000 pounds of brass. This resulted in increased brass costs of approximately $160,000 in the current quarter compared to the prior year quarter. The average U.S. dollar/Mexican peso exchange rate decreased to approximately 12.36 pesos to the dollar in the current quarter from approximately 12.76 pesos to the dollar in the prior year quarter. This resulted in increased costs related to our Mexican operations of approximately $335,000 in the current quarter over the prior year quarter.
Our income from operations in the current quarter was $3.3 million compared to $2.0 million in the prior year quarter. This change was primarily the result of the increase in sales and gross profit margin as discussed above.
Net other expense was $868,000 in the current quarter compared to net other income of $199,000 in the prior year quarter. This change was primarily due to an unrealized loss on Mexican peso option contracts of $2.3 million in the current quarter and foreign currency transaction gains resulting from foreign currency transactions entered into by our Mexican subsidiaries of $1.7 million in the current quarter. Foreign currency transaction losses totaled $31,000 in the prior year quarter. The Mexican peso option contracts were not in place during the prior year quarter. In September of the current quarter, the Mexican peso devalued significantly to the U.S. dollar creating both foreign currency transaction gains and unrealized losses on our Mexican peso currency option contracts. Our objective in entering into these currency option contracts is to minimize our earnings volatility resulting from changes in exchange rates affecting the U.S. dollar cost of our Mexican operations. The unrealized losses recognized in the current quarter result from mark-to-market adjustments as of October 2, 2011 and may or may not be realized, depending on actual Mexican peso to U.S. dollar exchange rates experienced during the balance of the fiscal year. In addition, losses related to our Rabbi Trust totaled $241,000 in the current quarter compared to gains of $124,000 in the prior year quarter. The Rabbi Trust funds our supplemental executive retirement plan. The investments held in the Trust are considered trading securities.
The VAST LLC investments are accounted for using the equity method of accounting. The activities related to the VAST LLC joint ventures resulted in equity loss of joint ventures to STRATTEC of approximately $120,000 during the three months ended October 2, 2011 and equity earnings of joint ventures to STRATTEC of approximately $422,000 during the three months ended September 26, 2010. No capital contributions were made to VAST LLC during the current or prior year quarters.
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