On August 8, 2024, Strattec Security Corp (STRT, Financial) released its 8-K filing reporting robust fiscal 2024 fourth quarter and full-year operating results. Strattec Security Corp designs, develops, manufactures, and markets mechanical locks, electronically enhanced locks, and keys. The company also produces ignition lock housings and access control products, including latches, power sliding door systems, and door handles. Strattec serves customers in the United States, Canada, Mexico, Europe, South America, Korea, and China, and provides full-service aftermarket support.
Fourth Quarter Financial Highlights
Strattec Security Corp (STRT, Financial) reported diluted earnings per share (EPS) of $2.39 for the fourth quarter of fiscal 2024, a significant improvement from a loss of $0.69 per share in the same period last year. This performance exceeded analyst estimates of $0.40 per share. The company's revenue for the quarter was $143.06 million, surpassing the estimated $139.32 million and reflecting an 8.2% increase from the previous year.
Performance and Challenges
The revenue growth was driven by $6.9 million in price increases to major customers and $3.9 million in higher sales from new product programs. The gross margin expanded to 13.0% from 9.3% last year, primarily due to pricing increases, higher sales, and lower raw material costs. However, the company faced challenges such as $2.1 million in wage increases due to a mandatory Mexican minimum wage hike, $1.7 million in increased annual incentive bonuses, and $1.2 million in higher supplier prices.
Financial Achievements
Strattec Security Corp (STRT, Financial) achieved notable financial milestones, including a net income of $9.62 million for the fourth quarter, compared to a loss of $2.7 million in the same period last year. The company's operating expenses decreased by $2.1 million, primarily due to a $3.2 million increase in customer billings for the reimbursement of development costs. These achievements are significant for the Vehicles & Parts industry, highlighting the company's ability to manage costs and improve profitability despite external challenges.
Key Financial Metrics
Important metrics from the income statement, balance sheet, and cash flow statement include:
| Metric | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 |
|---|---|---|---|---|
| Net Sales | $143.06M | $132.22M | $537.77M | $492.95M |
| Gross Profit | $18.57M | $12.27M | $65.47M | $42.15M |
| Net Income | $9.62M | $(2.70)M | $16.31M | $(6.67)M |
| Diluted EPS | $2.39 | $(0.69) | $4.07 | $(1.70) |
Analysis of Performance
Strattec Security Corp (STRT, Financial) demonstrated strong financial performance in the fourth quarter and full year of fiscal 2024. The company's ability to increase prices and introduce new products contributed significantly to revenue growth and margin expansion. Despite facing cost challenges, including wage increases and higher supplier prices, Strattec managed to improve its profitability and reduce operating expenses.
Overall, Strattec Security Corp (STRT, Financial) has shown resilience and strategic agility in navigating a challenging economic environment. The company's focus on optimizing working capital and maintaining a strong balance sheet positions it well for future growth and stability in the Vehicles & Parts industry.
Explore the complete 8-K earnings release (here) from Strattec Security Corp for further details.
