Form 8-K - Current report

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): November 4, 2024

STRATTEC SECURITY CORPORATION

(Exact Name of Registrant as Specified in Charter)

Wisconsin		0-25150		39-1804239
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

 

3333 West Good Hope Road, Milwaukee, Wisconsin 53209

(Address of Principal Executive Offices, and Zip Code)

[phone]

Registrant’s Telephone Number, Including Area Code

 

 

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

		Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

		Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

		Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, $.01 par value		STRT		The Nasdaq Global Stock Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

 

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. ☐

 

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Section 2 – Financial Information

 

Item 2.02. Results of Operations and Financial Condition.

 

On November 4, 2024, STRATTEC SECURITY CORPORATION (the “Company”) issued a press release (the “Press Release”) announcing results for the fiscal first quarter ended September 29, 2024. A copy of the Press Release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

 

Also on November 4, 2024, the Company first provided investors with a supplemental presentation regarding fiscal first quarter earnings and other current financial information, attached as Exhibit 99.2 hereto and incorporated by reference herein (the “Investor Presentation”).

 

Pursuant to General Instruction B.2 of Current Report on Form 8-K, the information in this Item 2.02 and Exhibits 99.1 and 99.2 are being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section. Furthermore, the information in this Item 2.02 and Exhibit 99.1 shall not be deemed to be incorporated by reference into the filings of STRATTEC under the Securities Act of 1933, as amended (the “Securities Act”), except as may be expressly set forth by specific reference in such filing.

 

Item 7.01 Regulation FD Disclosure.

 

As described in “Item 2.02 Results of Operations and Financial Condition” above, on November 4, 2024, the Company issued a Press Release announcing earnings results for the fiscal first quarter ended September 29, 2024 and an Investor Presentation containing supplemental fiscal first quarter earnings and other current financial information. The Press Release and Investor Presentation issued in connection with the announcement are attached as Exhibits 99.1 and 99.2 to this Current Report on Form 8-K.

 

Pursuant to General Instruction B.2 of Current Report on Form 8-K, the information in this Item 7.01 and Exhibits 99.1 and 99.2 are being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. Furthermore, the information in this Item 7.01 and Exhibits 99.1 and 99.2 shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act, except as may be expressly set forth by specific reference in such filing.

 

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description
99.1	Press Release of STRATTEC SECURITY CORPORATION, issued November 4, 2024
99.2	Investor Presentation
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

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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 hereunto duly authorized.

 

STRATTEC SECURITY CORPORATION

 

By: /s/ Dennis P. Bowe

Dennis P. Bowe, Vice President and

Chief Financial Officer

 

 

Date: November 4, 2024

 

 

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News Release

 

3333 West Good Hope Rd. • Milwaukee, Wisconsin 53209

IMMEDIATE RELEASE

STRATTEC SECURITY CORPORATION
Reports Fiscal 2025 First Quarter Financial Results

•

Generated cash from operations of $11.3 million

•

Reduced pre-production costs, primarily customer tooling, by $6.9 million

•

Grew revenue 2.7% year-over-year, reflecting ongoing pricing benefit and higher overall sales

•

Achieved gross margin of 13.6% versus 13.8% in prior-year period (which included a 470 bps net benefit
of one-time pricing)

•

Rethinking product portfolio and identifying opportunities to optimize operational footprint and improve profitability

MILWAUKEE, WI, November 4, 2024 – STRATTEC SECURITY CORPORATION (Nasdaq: STRT) (“Company”), a leading provider of smart vehicle access, security and authorization solutions for the global automotive industry, reported financial results for its first quarter of fiscal year 2025, which ended September 29, 2024.

STRATTEC President and CEO Jennifer Slater said, “We delivered a solid quarter through improved pricing, favorable mix, and by providing innovative content on the right platforms. We are making headway on rethinking the STRATTEC business model including the evaluation of our product portfolio, determining an optimal operating and cost structure and developing a strategy to strengthen profitability and drive sustainability. We are in the very early stages of the process as we delve further into the operations to better understand the variability in performance of the business and what needs to change to provide more consistent, profitable results. We separately announced today the addition of a chief people officer, a new role for this organization of over 3,300 people. We also appointed a new chief commercial officer who brings a breadth of experience that incorporates the depth of knowledge required to grow revenue profitably. We expect to leverage the deep relationships we have with our customers and provide high quality, timely and value-added solutions for our mutual success.”

FY 2025 First Quarter Net Sales
(compared with prior-year period, except where otherwise noted)

 

	Three Months Ended			Change
($ in thousands)	9/29/2024	10/1/2023		$	%
Adjusted Net Sales Attributable to STRATTEC	$ 139,052	$ 127,406		$ 11,646	9.1%
One-time retroactive pricing	-	8,000		(8,000)	-100.0%
Net Sales Attributable to STRATTEC	$ 139,052	$ 135,406		$ 3,646	2.7%

See Reconciliation of Net Sales Attributable to STRATTEC and Adjusted Net Sales Attributable to STRATTEC on Page 8

Net sales attributable to STRATTEC were $139.1 million, which included $2.2 million of ongoing price increases to major customers made subsequent to last year’s first quarter. This compares with net sales of $135.4 million in fiscal first quarter 2024, which included $8.0 million in one-time retroactive price increases. Excluding that one-time pricing impact, adjusted net sales attributable to STRATTEC1 increased by $11.6 million, or 9.1%.

After taking into account the impact of ongoing price increases, the following summarizes noted changes to sales:

•

Sales to Hyundai/Kia increased due to timing of customer demand for power door products

 

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STRATTEC SECURITY CORPORATION Reports First Quarter Fiscal 2025 Financial Results

November 4, 2024

 

•

Sales to Ford Motor Company grew from new tailgate latch content on the Ford F-Series pickups

•

Sales to Commercial and Other OEM customers grew from new business with Aston Martin

•

Sales to Stellantis declined primarily due to inventory destocking and lower production volumes

FY 2025 First Quarter Operation Review
(compared with prior-year period, except where otherwise noted)

Gross profit increased $0.2 million to $18.9 million. Gross margin was 13.6% compared with 13.8% in prior-year period (which included a 470 basis point benefit from one-time pricing).

Adjusted gross profit1 and adjusted gross margin1 improved as a result of favorable sales mix and change in foreign exchange (“FX”) rate of $2.7 million, improved pricing of $2.2 million, and $1.3 million reduction in raw material and purchased component costs. The favorable change in FX provided a 190 basis point benefit to gross margin between quarterly periods. These benefits more than offset unfavorable impacts of $1.4 million in higher Mexico manufacturing costs, $0.7 million of accrual for short-term incentive bonus plans and $0.4 million of expedited shipping costs.

 

($ in thousands)	Three Months Ended
	9/29/2024		10/1/2023
Gross profit	$ 18,921		$ 18,720
Add back (deduct):
Retroactive pricing	-		(7,100)
Adjusted Gross Profit1	$ 18,921		$ 11,620
Net sales	$ 139,052		$ 135,406
Adjusted Net Sales	$ 139,052		$ 127,406
Gross margin	13.6%		13.8%
Adjusted Gross Margin	13.6%		9.1%

See Reconciliation of Net Sales, Gross Profit and Gross Margin to non-GAAP Adjusted Net Sales, Adjusted Gross Profit and Adjusted Gross Margin on Page 8

Engineering, selling and administrative expenses increased $1.2 million, or 9.9%, to $13.9 million primarily due to increased accrual for short-term incentive plan compensation and organizational investments. As a result, operating income decreased $1.0 million to $5.1 million compared with the prior-year period. Last year’s first quarter benefited by
$7.1 million for the one-time pricing impact.

Net income attributable to STRATTEC was $3.7 million compared with $4.2 million last year. Diluted earnings per share were $0.92 compared with $1.05 last year. Adjusted net income attributable to STRATTEC1 was $3.7 million compared with a loss of $0.6 million in last fiscal year’s first quarter. Adjusted diluted earnings per share was $0.92 compared with a loss of $0.14 in the prior-year period.

Balance Sheet and Liquidity

First quarter fiscal 2025 cash flow from operations was $11.3 million, compared with operating cash used in operations of $3.9 million in the prior year first quarter, primarily reflecting a reduction in working capital between periods. Capital expenditures in the first quarter of fiscal 2025 were $2.1 million, compared with $2.9 million for the first quarter of fiscal 2024.

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1 Adjusted net sales, adjusted gross profit, adjusted gross margin, adjusted net income attributable to STRATTEC and adjusted diluted earnings per share are non-GAAP financial measure. Further information can be found under “Non-GAAP Financial Measures” and the reconciliations of GAAP financial measures to non-GAAP financial measures that accompany this press release.

 

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STRATTEC SECURITY CORPORATION Reports First Quarter Fiscal 2025 Financial Results

November 4, 2024

 

At September 29, 2024, STRATTEC had $34.4 million in cash and cash equivalents, compared with $25.4 million at June 30, 2024. Pre-production costs, which are primarily related to customer tooling, declined $6.9 million. The Company’s objective is to return the customer tooling balance to approximately $10 million by the end of the fiscal year.

The Company’s 51% joint venture subsidiary ADAC-STRATTEC LLC had $13.0 million in debt, unchanged from the end of fiscal 2024. STRATTEC had $40 million and ADAC-STRATTEC LLC had $7 million in borrowing capacity as of September 29, 2024.

Webcast and Conference Call

The Company will host a conference call and webcast today to review the financial and operating results for the period ended September 29, 2024. A question-and-answer session will follow.

First Quarter Fiscal Year 2025 Conference Call

Date: Monday, November 4, 2024

Time: 4:45 p.m. Eastern Time

Phone: [phone]

Webcast and accompanying slide presentation: investors.strattec.com

A telephonic replay will be available from 8:00 p.m. ET on the day of the call through Monday, November 18, 2024. To listen to the archived call, dial [phone] and enter replay PIN 13749209. 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.

About STRATTEC

STRATTEC is a leading global provider of advanced automotive access, security & authorization and select user interface solutions. With a history spanning over 110 years, STRATTEC has consistently been at the forefront of innovation in vehicle security, transitioning from mechanical to integrated electro-mechanical systems. The Company serves a broad range of customers, including leading automotive OEMs, offering power access solutions and advanced security systems that include door handles, lift gates, latches, and key fobs.

For more information on STRATTEC and its solutions, 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 same from foreign countries, the volume and scope of product returns, adverse business and operational issues resulting from the continuing effects of the coronavirus (COVID-19) pandemic, matters adversely impacting the timing and availability of component parts and raw materials needed for the production of our products and the products of our customers and fluctuations in our costs of operation (including fluctuations in the cost of raw materials). 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 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. In addition, such uncertainties and other operational matters are discussed further in the Company’s quarterly and annual filings with the Securities and Exchange Commission.

 

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STRATTEC SECURITY CORPORATION Reports First Quarter Fiscal 2025 Financial Results

November 4, 2024

 

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 non-GAAP financial measures used by other companies. STRATTEC’s management uses these measures for reviewing the financial results of STRATTEC for budget planning purposes and for making operational and financial decisions. Management believes that providing these non-GAAP financial measures to investors, as a supplement to GAAP financial measures, help investors evaluate STRATTEC’s core operating and financial performance and business trends consistent with how management evaluates such performance and trends.

 

Contact Information:

 

Investors:

Deborah K. Pawlowski

Alliance Advisors IR

Phone: [phone]

Email: [e-mail]

 

 

FINANCIAL TABLES FOLLOW

 

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STRATTEC SECURITY CORPORATION Reports First Quarter Fiscal 2025 Financial Results

November 4, 2024

 

STRATTEC SECURITY CORPORATION

Condensed Results of Operations

(In thousands, except per share amounts)

(Unaudited)

 

	Three Months Ended
	September 29, 2024				October 1, 2023
Net sales	$	139,052			$	135,406
Cost of goods sold		120,131				116,686
Gross profit		18,921				18,720
Engineering, selling and administrative expenses		13,858				12,614
Income from operations		5,063				6,106
Equity loss from joint ventures		—				(265	)
Interest expense		(295	)			(220	)
Investment income		349				87
Other income, net		129				134
Income before provision for income taxes and non-controlling interest		5,246				5,842
Provision for income taxes		1,498				1,387
Net income		3,748				4,455
Net income attributable to non-controlling interest		45				290
Net income attributable to STRATTEC SECURITY CORPORATION	$	3,703			$	4,165
Earnings per share attributable to       STRATTEC SECURITY CORPORATION:
Basic	$	0.92			$	1.05
Diluted	$	0.92			$	1.05
Weighted Average shares outstanding:
Basic		4,005				3,948
Diluted		4,046				3,974

 

 

 

 

 

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STRATTEC SECURITY CORPORATION Reports First Quarter Fiscal 2025 Financial Results

November 4, 2024

 

STRATTEC SECURITY CORPORATION

Condensed Balance Sheet Data

(In thousands, except share amounts)

(Unaudited)

 

	September 29, 2024				June 30, 2024
ASSETS
Current Assets:
Cash and cash equivalents	$	34,403			$	25,410
Receivables, net		102,266				99,297
Inventories:
Finished products		18,540				19,833
Work in process		15,520				15,461
Purchased materials		49,734				46,355
Inventories, net		83,794				81,649
Pre-production costs		15,265				22,173
Value-added tax recoverable		20,624				19,684
Other current assets		4,396				5,601
Total current assets		260,748				253,814
Deferred income taxes		17,235				17,593
Other long-term assets		6,363				6,698
Net property, plant and equipment		82,521				86,184
	$	366,867			$	364,289
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	59,461			$	54,911
Accrued Liabilities:
Payroll and benefits		25,421				28,953
Value-added tax payable		10,982				9,970
Environmental		1,390				1,390
Warranty		10,698				10,695
Other		11,619				12,369
Total current liabilities		119,571				118,288
Borrowings under credit facilities – long-term		13,000				13,000
Accrued pension obligations		1,417				1,379
Accrued postretirement obligations		1,041				1,050
Other long-term liabilities		4,778				4,957
Shareholders’ Equity:
Common stock, authorized 18,000,000 shares, $.01 par value, 7,624,120    issued shares at September 29, 2024 and 7,586,920 issued shares at    June 30, 2024		76				76
Capital in excess of par value		101,218				101,024
Retained earnings		254,315				250,612
Accumulated other comprehensive loss		(17,104	)			(15,689	)
Less: treasury stock, at cost (3,597,715 shares at September 29, 2024 and    3,589,126 shares at June 30, 2024)		(135,471	)			(135,478	)
Total STRATTEC SECURITY CORPORATION shareholders’ equity		203,034				200,545
Non-controlling interest		24,026				25,070
Total shareholders’ equity		227,060				225,615
	$	366,867			$	364,289

 

 

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STRATTEC SECURITY CORPORATION Reports First Quarter Fiscal 2025 Financial Results

November 4, 2024

 

STRATTEC SECURITY CORPORATION

Condensed Cash Flow Statement Data

(In Thousands)

(Unaudited)

 

	Three Months Ended
	September 29, 2024				October 1, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	3,748			$	4,455
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		3,662				4,385
Foreign currency transaction gain		(1,005	)			(226	)
Unrealized loss on peso forward contracts		652				—
Stock-based compensation expense		188				505
Equity loss of joint ventures		—				265
Loss on settlement of pension obligation		283				—
Change in operating assets and liabilities:
Receivables		(3,189	)			2,333
Inventories		(2,145	)			(3,770	)
Other assets		5,881				(7,665	)
Accounts payable and accrued liabilities		2,998				(4,054	)
Other, net		264				(100	)
Net cash provided by (used in) operating activities		11,337				(3,872	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of interest in joint ventures		—				2,000
Purchase of property, plant and equipment		(2,073	)			(2,920	)
Net cash used in investing activities		(2,073	)			(920	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under credit facilities		3,000				2,000
Repayment of borrowings under credit facilities		(3,000	)			(2,000	)
Exercise of stock options and employee stock purchases		13				17
Net cash provided by financing activities		13				17
Foreign currency impact on cash		(284	)			(131	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		8,993				(4,906	)
CASH AND CASH EQUIVALENTS
Beginning of period		25,410				20,571
End of period	$	34,403			$	15,665
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Income taxes	$	4,081			$	764
Interest	$	280			$	218
Non-cash investing activities:
Change in capital expenditures in accounts payable	$	(506	)		$	(193	)

 

 

 

 

 

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STRATTEC SECURITY CORPORATION Reports First Quarter Fiscal 2025 Financial Results

November 4, 2024

 

STRATTEC SECURITY CORPORATION

NON-GAAP FINANCIAL MEASURES

The following information provides definitions and reconciliations of the non-GAAP financial measures presented in this earnings release to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles (GAAP). The Company has provided this non-GAAP financial information, which is not calculated or presented in accordance with GAAP, as information supplemental and in addition to the financial measures presented in this earnings release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in this earnings release. Adjusted net sales, adjusted gross profit, adjusted gross margin, adjusted net income attributable to STRATTEC and adjusted diluted earnings per shares are not measures determined in accordance with GAAP and may not be comparable with net sales, adjusted gross profit, adjusted gross margin, adjusted net income and adjusted diluted earnings per share as used by other companies. Nevertheless, STRATTEC believes that providing these non-GAAP financial measures are important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s financial results to the historical periods' financial results.

Reconciliation of Net Sales to Adjusted Net Sales
($ in thousands)	Three Months Ended
	9/29/2024		10/1/2023
Net sales (GAAP)	$ 139,052		$ 135,406
One-time retroactive pricing from customers	-		(8,000)
Adjusted net sales	$ 139,052		$ 127,406

 

Reconciliation of Gross Profit to Adjusted Gross Profit
($ in thousands)	Three Months Ended
	9/29/2024		10/1/2023
Gross profit (GAAP)	$ 18,921		$ 18,720
One-time retroactive pricing from customers	-		(8,000)
One-time retroactive pricing to suppliers	-		900
Adjusted gross profit	$ 18,921		$ 11,620

 

Reconciliation of Gross Margin to Adjusted Gross Margin
	Three Months Ended
	9/29/2024		10/1/2023
Gross margin (GAAP)	13.6%		13.8%
One-time retroactive pricing from customers			(5.4)
One-time retroactive pricing to suppliers	-		0.7
Adjusted gross margin	13.6%		9.1%

 

Reconciliation of Net Income Attributable to STRATTEC to Adjusted Net Income Attributable to STRATTEC
($ in thousands)	Three Months Ended
	9/29/2024		10/1/2023
Net income attributable to STRATTEC SECURITY CORPORATION (GAAP)	$ 3,703		$ 4,165
One-time retroactive pricing from customers	-		(8,000)
One-time retroactive pricing to suppliers	-		900
Non-controlling interest impact of retroactive pricing	-		1,014
Tax impact of retroactive pricing (1)	-		1,364
Adjusted net income attributable to STRATTEC SECURITY CORPORATION	$ 3,703		$ (557)

 

 

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STRATTEC SECURITY CORPORATION Reports First Quarter Fiscal 2025 Financial Results

November 4, 2024

 

 

Reconciliation of Diluted Earnings Per Share to Adjusted Earnings Per Share
	Three Months Ended
	9/29/2024		10/1/2023
Diluted earnings per share (GAAP)	$ 0.92		$ 1.05
One-time retroactive pricing from customers	-		(2.01)
One-time retroactive pricing to suppliers	-		0.23
Non-controlling interest impact of retroactive pricing	-		0.26
Tax impact of retroactive pricing (1)	-		0.34
Adjusted diluted earnings per share	$ 0.92		$ (0.14)
(1) The tax impact is calculated using the statutory tax rate for the impacted jurisdiction

 

 

Supplemental Information

 

 

Impact of Retroactive Pricing in Fiscal Year 2024

($ in thousands)

 

One-time Pricing Impact to:	Q1 FY2024		Q2 FY2024		Q3 FY2024		Q4 FY2024		FY 2024
Net Sales	$ 8,000		$ 1,600		NM(1)		NM		$ 9,700
Cost of Goods Sold(2)	(900)		(910)		-		-		(1,700)
Gross Profit	$ 7,100		$ 690		NM		NM		$ 8,000
Gross Margin Contribution	4.7%		2.4%		NM		NM		1.3%

(1) Not meaningful

(2)After factoring in impact of supplier one-time price increases

 

 

 

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Q1 FY2025 Financial ResultsNovember 4, 2024Nasdaq: STRT Jennifer Slater President and CEO  Dennis Bowe Vice President and Chief Financial Officer www.strattec.com

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Safe Harbor Statement Safe Harbor StatementCertain statements contained in this presentation 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 same from foreign countries, the volume and scope of product returns, adverse business and operational issues resulting from the continuing effects of the coronavirus (COVID-19) pandemic, matters adversely impacting the timing and availability of component parts and raw materials needed for the production of our products and the products of our customers and fluctuations in our costs of operation (including fluctuations in the cost of raw materials). 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 presentation 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 presentation. In addition, such uncertainties and other operational matters are discussed further in the Company’s quarterly and annual filings with the Securities and Exchange Commission. Use of Non-GAAP Financial Metrics and Additional Financial InformationIn 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 non-GAAP financial measures used by other companies. STRATTEC’s management uses these measures for reviewing the financial results of STRATTEC for budget planning purposes and for making operational and financial decisions. Management believes that providing these non-GAAP financial measures to investors, as a supplement to GAAP financial measures, help investors evaluate STRATTEC’s core operating and financial performance and business trends consistent with how management evaluates such performance and trends. Additionally, management believes these measures facilitate comparisons with the core operating and financial results and business trends of competitors and other companies. The Company has provided reconciliations of comparable GAAP to non-GAAP measures in the supplemental slides of this presentation.

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STRATTEC Q1 FY2025Highlights Strong cash generation of $11.3 million Included reduction in customer tooling balance Solid balance sheet $34.4 million in cash $13 million in JV debt (STRT 51% owner) Revenue up 2.7%, or 9.1% on adjusted net sales(1) Solid position on F-Series pickups New products and content on Aston Martin Launched content on new platform with leading EV OEM Gross margin of 13.6% vs. 13.8% Current year quarter had 190 bps of favorable FX PY quarter had 470 bps benefit of one-time pricing (1) Adjusted net sales is a non-GAAP metric. See the reconciliation of GAAP to non-GAAP in the Supplemental tables included in this presentation.

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Rethinking STRATTEC Priorities for Transformation Reimagine product portfolio What do customers want What has defensible market position What delivers on profits What defines future product road map Improve operational efficiency Supply chain, inventory and operational process Optimizing operational footprint Develop team and talent Accountability and responsibility Added Chief People Officer Appointed new Chief Commercial Officer

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Customer Sales Changes Hyundai/Kia up $6.5 million due to timing of demand for power doors Ford up 19% on new tailgate latch content on Ford F-Series pickups Stellantis down $14.5 million: inventory destocking and lower production volumes ($ in millions; narrative compared with prior-year period unless otherwise noted) Q1 FY25 Sales Increased 2.7% Y/Y Net Sales & Adj. Net Sales(1) Q1 FY25 vs. Q1 FY24 Up $3.6 million, or 2.7% Net of $8.0 million one-time pricing in prior quarter, sales improved $11.6 million, or 9.1% Captured $2.2 million of ongoing pricing Product Sales Changes Growth in core products of door handles and power access Continued decline in keys & locksets Q1 FY25 Sales by Customer Q1 FY25 Sales by Product $135.4 $139.1 (1) Adjusted Net Sales is a non-GAAP metric. Refer to the reconciliation of GAAP to non-GAAP metrics in the supplemental tables of this presentation.

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9.1% 13.6% Q1 FY25 Gross Profit FX benefit of $2.7 million in Q1 2025 190 basis point benefit Also benefiting gross profit: Favorable sales mix $2.2 million of ongoing price increases $1.3 million reduction in material costs Offsets included higher: $1.4 million in Mexico manufacturing costs $0.7 million incentive compensation $0.4 million in expedited freight costs ($ in millions; narrative compared with prior-year period unless otherwise noted) Q1 FY25 Gross Profit & Adj. Gross Profit(1) Adj. Gross Profit (Qtr.) (1) Adj. Gross Margin (1) 13.6% vs 9.1% in Q1 2024 450 basis point expansion Adjusts for $7.1 million one-time retroactive pricing benefit in PY period Gross Profit (Qtr.) (1) Adjusted Gross Profit and Adjusted Gross Margin are non-GAAP metrics. Refer to the reconciliation of GAAP to non-GAAP metrics in the supplemental tables of this presentation. 13.8% 13.6%

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($ in millions; narrative compared with prior-year period unless otherwise noted) (1) Engineering, selling and administrative expenses Q1 FY25 compared with Q1 FY24 Up $1.3 million to 10% of sales driven by: $0.8 million short-term incentive plan (PY period had no accrual for short-term incentive plan) $0.6 million executive transition costs ES&A expenses are primarily fixed but can vary based on: Expected investments in operational improvements Temporary costs of professional services to drive the transformation Reduction in costs from streamlining and simplifying the business 9.3% 10.0% 8.9% 9.1% ES&A(1) And as a % of Sales Engineering, Selling & Administrative Expense

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($ in millions except earnings per share data; narrative compared with prior-year period unless otherwise noted) $1.05 $0.92 Diluted Earnings per Share Q1 FY25 Net Income(1) Down $0.5 million $0.5 million of investment and other income, net, partially offset the $1.0 million decline in operating income Q1 FY25 Adj. Net Income(2) Up $4.3 million, with adj. EPS increasing to $0.92 Excludes $8.0 million one-time retroactive pricing benefit in Q1 2024 Excludes $0.9 million in retroactive pricing to suppliers $1.0 million adjustment for non-controlling interest impact of retroactive pricing Net Income (Qtr.) Adj. Net Income (Qtr) (2) Q1 FY25 Net Income (1) and Adj. Net Income(2) $(0.14) $0.92 Adjusted Diluted Earnings per Share (1) Net Income Attributable to STRATTEC(2) Adjusted Net Income and Adjusted Diluted Earnings per Share are non-GAAP metrics. Refer to the reconciliation of GAAP to non-GAAP metrics in the supplemental tables of this presentation.

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$15.2 million increase in operating cash flow Improved operating performance Lower net working capital Financial flexibility $34.4 million in cash $40 million revolver with no borrowings $13 million on JV (ADAC-STRATTEC) revolver (at ~8.5% in 2024) FY 2025 CapEx expectations ~$15 million Supports new product programs, productivity enhancements and general equipment maintenance Capitalization September 29, 2024 June 30, 2024 Cash and cash equivalents $ 34.4 $  25.4 Total debt 13.0 13.0 Stockholders’ equity 227.1 225.6 Total capitalization $ 240.1 $ 238.6 Debt / total capitalization 5.4% 5.4% Twelve Months Ended September 29, 2024 October 1, 2023 Net cash provided by operating activities $ 11.3 $ (3.9) CapEx (2.1) (2.9) Free cash flow (FCF)* $ 9.3 $ (6.8) ($ in millions; narrative compared with prior-year period unless otherwise noted) *Free cash flow is a non-GAAP metric defined as cash flow from operations less capital expenditures (CapEx) Strong Cash Generation

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Q1 FY2025 Financial ResultsSupplemental Slides www.strattec.com Nasdaq: STRT

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Reconciliations of Net Sales, Gross Profit and Gross Margin to non-GAAP Reconciliation of Net Sales to Adjusted Net Sales ($ in thousands) Three Months Ended 9/29/2024 10/1/2023 Net sales (GAAP) $ 139,052 $ 135,406 One-time retroactive pricing from customers - (8,000) Adjusted net sales $ 139,052 $ 127,406 Reconciliation of Gross Profit to Adjusted Gross Profit ($ in thousands) Three Months Ended 9/29/2024 10/1/2023 Gross profit (GAAP) $ 18,921 $ 18,720 One-time retroactive pricing from customers - (8,000) One-time retroactive pricing to suppliers - 900 Adjusted gross profit $ 18,921 $ 11,620 Reconciliation of Gross Margin to Adjusted Gross Margin Three Months Ended 9/29/2024 10/1/2023 Gross margin (GAAP) 13.6% 13.8% One-time retroactive pricing from customers (5.4) One-time retroactive pricing to suppliers - 0.7 Adjusted gross margin 13.6% 9.1% NON-GAAP FINANCIAL MEASURES The following information provides definitions and reconciliations of the non-GAAP financial measures presented in this earnings release to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles (GAAP). The Company has provided this non-GAAP financial information, which is not calculated or presented in accordance with GAAP, as information supplemental and in addition to the financial measures presented in this earnings release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in this earnings release. Adjusted net sales, adjusted gross profit, adjusted gross margin, adjusted net income attributable to STRATTEC and adjusted diluted earnings per shares are not measures determined in accordance with GAAP and may not be comparable with net sales, adjusted gross profit, adjusted gross margin, adjusted net income and adjusted diluted earnings per share as used by other companies. Nevertheless, STRATTEC believes that providing these non-GAAP financial measures are important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s financial results to the historical periods' financial results.

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Adjusted Net Income Reconciliation Reconciliation of Net Income Attributable to STRATTEC to Adjusted Net Income Attributable to STRATTEC ($ in thousands) Three Months Ended 9/29/2024 10/1/2023 Net income attributable to STRATTEC SECURITY CORPORATION (GAAP) $ 3,703 $ 4,165 One-time retroactive pricing from customers - (8,000) One-time retroactive pricing to suppliers - 900 Non-controlling interest impact of retroactive pricing - 1,014 Tax impact of retroactive pricing (1) - 1,364 Adjusted net income attributable to STRATTEC SECURITY CORPORATION $ 3,703 $ (557) Reconciliation of Diluted Earnings Per Share to Adjusted Earnings Per Share   Three Months Ended 9/29/2024 10/1/2023 Diluted earnings per share (GAAP) $ 0.92 $ 1.05 One-time retroactive pricing from customers - (2.01) One-time retroactive pricing to suppliers - 0.23 Non-controlling interest impact of retroactive pricing - 0.26 Tax impact of retroactive pricing (1) - 0.34 Adjusted diluted earnings per share $ 0.92 $ (0.14) (1) The tax impact is calculated using the statutory tax rate for the impacted jurisdiction NON-GAAP FINANCIAL MEASURES The following information provides definitions and reconciliations of the non-GAAP financial measures presented in this earnings release to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles (GAAP). The Company has provided this non-GAAP financial information, which is not calculated or presented in accordance with GAAP, as information supplemental and in addition to the financial measures presented in this earnings release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in this earnings release. Adjusted net sales, adjusted gross profit, adjusted gross margin, adjusted net income attributable to STRATTEC and adjusted diluted earnings per shares are not measures determined in accordance with GAAP and may not be comparable with net sales, adjusted gross profit, adjusted gross margin, adjusted net income and adjusted diluted earnings per share as used by other companies. Nevertheless, STRATTEC believes that providing these non-GAAP financial measures are important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current quarter’s financial results to the historical periods' financial results.

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Impact of Retroactive Pricing in Fiscal Year 2024 One-time Pricing Impact to: Q1 FY2024   Q2 FY2024   Q3 FY2024   Q4 FY2024   FY 2024 Net Sales $ 8,000 $ 1,600 NM(1) NM $ 9,700 Cost of Goods Sold(2) (900)   (910)   -   -   (1,700) Gross Profit $ 7,100 $ 690 NM NM $ 8,000 Gross Margin Contribution 4.7%   2.4%   NM   NM   1.3% (1) Not meaningful               (2)After factoring in impact of supplier one-time price increases             ($ in thousands)  

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Q1 FY2025 Financial ResultsNovember 4, 2024 www.strattec.com Nasdaq: STRT Investor Relations Contact: Deborah K. Pawlowski, Alliance Advisors IR716-843-3908 [e-mail]

Document and Entity Information	Nov. 04, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Nov. 04, 2024
Entity Registrant Name	STRATTEC SECURITY CORPORATION
Entity Central Index Key	0000933034
Entity Emerging Growth Company	false
Entity Incorporation, State or Country Code	WI
Entity File Number	0-25150
Entity Tax Identification Number	39-1804239
Entity Address, Address Line One	3333 West Good Hope Road
Entity Address, City or Town	Milwaukee
Entity Address, State or Province	WI
Entity Address, Postal Zip Code	53209
City Area Code	(414)
Local Phone Number	247-3333
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $.01 par value
Trading Symbol	STRT
Security Exchange Name	NASDAQ

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