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 0-25150 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 28, 2025 STRATTEC SECURITY CORPORATION (Exact Name of Registrant as Specified in Its Charter) Wisconsin 39-1804239 (State of Incorporation) (I. ...

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Financial Data and Key Metrics Changes - Sales increased by 6% to $137.5 million, driven by pricing, favorable sales mix, higher content value, new program launches, and tariff recovery [8][12] - Gross margin improved to 16.5%, expanding by 330 basis points year-over-year [8][14] - Net income nearly quadrupled to $5 million, or $1.21 per diluted share, with adjusted earnings per share growing 163% to $1.71 [8][21] - Cash from operations reached $14 million for the quarter, totaling $25 million year-to-date [9][23] - The company has a strong balance sheet with $99 million in cash and total debt of only $2.5 million [9][25] Business Line Data and Key Metrics Changes - The company implemented a voluntary retirement program expected to generate $3.4 million in annualized savings [10][37] - Selling, Administrative, and Engineering expenses increased to $17.9 million, or 13% of sales, due to one-time charges and investments in business transformation [18][20] Market Data and Key Metrics Changes - North American automotive production is forecasted to remain flat to moderately decline, impacting the company's sales [28] - The company expects a slight improvement in sales in the third quarter, but anticipates a year-over-year decline of approximately 3%-4% in the second half [14][56] Company Strategy and Development Direction - The company is focused on deepening customer relationships in engineered access solutions and striving for operational excellence to enable sustainable, profitable growth [29] - Investments are prioritized for organic growth, process modernization, and evaluating M&A opportunities for long-term growth [26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from supply chain disruptions but noted minimal impact on sales due to customer adaptability [33] - The company is confident in its transformation efforts, having significantly expanded margins and tripled net income [28][29] Other Important Information - The company expects to generate about $40 million in cash from operations annually, with capital expenditures for fiscal 2026 projected to be less than $10 million [24][25] Q&A Session Summary Question: Were there actual revenue pushes from Q2 into Q3 due to supply chain disruptions? - Management indicated there was some slight impact from a supplier fire and chip challenges, but customers managed to work around these issues with minimal sales impact [33] Question: How should selling and administrative expenses be expected to trend in the second half? - Management expects these expenses to remain in the 10%-11% range for the back half of the year, with some adjustments for merit increases [35][36] Question: When will the $3.4 million in savings from the early retirement plan hit the bottom line? - The annual benefit will be phased in, with approximately $400,000 recognized in the current quarter and expected to reach about $800,000 per quarter by the fourth quarter [37][38] Question: What is the outlook for free cash flow? - Management noted that inventory build and restructuring costs will impact cash flow in the third quarter, but the company is intentionally building inventories to improve service delivery [39][40] Question: Can you discuss conversations with potential new customers in North America? - Management highlighted ongoing discussions focused on access products and digital keys, emphasizing the long sales cycle in the automotive industry [47][48] Question: Any updates on the product line review? - Management confirmed a focus on power access products and digital key technology, having deprioritized the switch business due to profitability concerns [55]

Financial Data and Key Metrics Changes - Sales increased by 6% to $137.5 million, driven by pricing, favorable sales mix, higher content value, new program launches, and tariff recovery [5][8] - Gross margin improved to 16.5%, expanding 330 basis points year-over-year [5][10] - Net income nearly quadrupled to $5 million, or $1.21 per diluted share, with adjusted earnings per share growing 163% to $1.71 [5][12] - Cash from operations reached $14 million for the quarter, totaling $25 million year-to-date [6][13] - The company has a strong balance sheet with $99 million in cash and total debt of only $2.5 million [6][14] Business Line Data and Key Metrics Changes - Gross margin increased by $5.6 million to $22.7 million, driven by pricing actions, higher production volumes, and restructuring savings [9][10] - Selling, Administrative, and Engineering expenses rose to $17.9 million, or 13% of sales, influenced by a one-time charge related to a voluntary retirement program [11][12] Market Data and Key Metrics Changes - North American automotive production is expected to remain flat to moderately decline, impacting the company's sales forecasts [16] - The company anticipates a year-over-year revenue decline of approximately 3%-4% in the second half of the fiscal year [9][42] Company Strategy and Development Direction - The company is focused on transforming its operations, improving profitability, and investing in employee development and innovation [5][7] - Strategic priorities include supporting organic growth, process modernization, and evaluating M&A opportunities for long-term growth [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges such as supply chain disruptions and foreign exchange pressures but expressed confidence in the company's transformation and operational improvements [5][16] - The company is optimistic about its ability to deepen customer relationships and achieve sustainable, profitable growth [16][17] Other Important Information - The company implemented a voluntary retirement program expected to generate $3.4 million in annualized savings [6][11] - Capital expenditures for the fiscal year are expected to be less than $10 million, focusing on new product programs and equipment investments [14] Q&A Session Summary Question: Impact of supply chain disruptions on revenue - Management noted slight impacts from supplier issues and chip challenges but indicated minimal overall impact on sales [19][20] Question: Outlook for selling and administrative expenses - Management expects SAE to remain in the 10%-11% range for the second half of the year, with some adjustments for merit increases [22][23] Question: Timing of savings from the early retirement plan - The $3.4 million in savings will be phased in, with about $400,000 benefit realized in the current quarter and expected to reach $800,000 per quarter by the fourth quarter [24] Question: Factors affecting free cash flow - Management confirmed intentional inventory build-up and restructuring costs will impact cash flow in the upcoming quarter [25][26] Question: Conversations with potential new customers - The company is engaging with potential customers regarding access products and digital key technology, with long sales cycles expected [33][34] Question: Product line review updates - Management deprioritized the switch business but remains focused on power access products and digital key technology [40] Question: Clarification on revenue expectations - Management clarified that revenue is expected to decline 3%-4% year-over-year in the second half [42]

Q2 FY2026 Financial Results Conference Call February 6, 2026 Nasdaq: STRT Jennifer Slater President and CEO Matthew Pauli Senior Vice President and CFO www.strattec.com Safe Harbor Statement Safe Harbor Statement Certain 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," "i ...

分组1 - Strattec Security reported quarterly earnings of $1.71 per share, exceeding the Zacks Consensus Estimate of $0.93 per share, and showing a significant increase from $0.65 per share a year ago, resulting in an earnings surprise of +83.87% [1] - The company achieved revenues of $137.53 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 5.89% and increasing from $129.92 million year-over-year [2] - Strattec Security has consistently outperformed consensus EPS and revenue estimates over the last four quarters, indicating strong financial performance [2] 分组2 - The stock has gained approximately 14.7% since the beginning of the year, significantly outperforming the S&P 500's gain of 0.5% [3] - The current consensus EPS estimate for the upcoming quarter is $1.47 on revenues of $141.35 million, and for the current fiscal year, it is $5.40 on revenues of $559.91 million [7] - The Zacks Industry Rank for Automotive - Original Equipment is currently in the bottom 40% of over 250 Zacks industries, which may impact the stock's performance [8]

Financial Performance - Net sales for the second quarter of fiscal 2026 were $137.5 million, an increase of $7.6 million, or 6%, driven by pricing, new program launches, and customer inventory builds[5] - Gross margin improved to 16.5%, up from 13.2% in the prior year, primarily due to pricing actions and higher production volumes[5] - Net income attributable to Strattec was $4.9 million, or $1.20 per diluted share, compared to $1.3 million, or $0.32 per diluted share, in the prior year[10] - Adjusted EBITDA for the quarter was $12.3 million, representing 8.9% of sales, compared to $8.0 million in the prior year[10] - Net income for the three months ended December 28, 2025, was $5,643 thousand, compared to $1,398 thousand for the same period in 2024, representing a significant increase of 303%[25] - Net sales for fiscal 2026 Q2 were $137.0 million, compared to $129.9 million in Q2 of fiscal 2025, representing a 5.4% increase year-over-year[26] - Adjusted EBITDA for Q2 of fiscal 2026 was $12.2 million, which is 8.9% of net sales, compared to 6.1% in Q2 of fiscal 2025[26] - Net income attributable to Strattec (GAAP) for Q2 of fiscal 2026 was $4.94 million, compared to $1.31 million in Q2 of fiscal 2025[27] - Adjusted net income attributable to Strattec (Non-GAAP) for Q2 of fiscal 2026 was $7.04 million, up from $2.64 million in Q2 of fiscal 2025[27] - Strattec's income from operations for Q2 of fiscal 2026 was $4.47 million, compared to $2.13 million in Q2 of fiscal 2025[26] Cash Flow and Assets - Cash from operations increased to $14 million, reflecting a 47% increase due to higher cash earnings[11] - The company had $99.0 million in cash and cash equivalents, up from $90.5 million at the end of the previous quarter[11] - Cash and cash equivalents at the end of the period reached $99,027 thousand, up from $84,579 thousand, marking a 17.5% increase[25] - Net cash provided by operating activities for the six months ended December 28, 2025, was $25,208 thousand, compared to $20,781 thousand for the same period in 2024, an increase of 21.7%[25] Liabilities and Equity - Total liabilities decreased to $129,231 thousand from $145,023 thousand, a reduction of 10.9%[23] - Total shareholders' equity increased to $263,014 thousand from $246,431 thousand, a growth of 6.7%[23] - Retained earnings rose to $282,773 thousand from $269,297 thousand, reflecting a growth of 5%[23] Expenses and Cost Management - Selling, administrative, and engineering expenses rose to $17.9 million, or 13.0% of sales, compared to 11.6% in the prior year[8] - The company reported a depreciation expense of $7,678 thousand for the six months ended December 28, 2025, compared to $7,206 thousand for the same period in 2024[25] - The company experienced a significant increase in business transformation costs, totaling $1.508 million for Q2 of fiscal 2026[27] Future Outlook - The second half of fiscal 2026 is anticipated to face a softer U.S. automotive production market and continued foreign exchange headwinds[4] - The company expects annual savings of $3.4 million from restructuring actions, including a voluntary early retirement program[4] - Strattec is focused on transforming its business for stronger earnings power and a predictable growth path[4] Borrowing and Financial Strategy - The current portion of borrowings under credit facilities was $2,500 thousand, indicating a new borrowing strategy[23] - The company experienced a foreign currency transaction loss of $463 thousand for the three months ended December 28, 2025[25]

MILWAUKEE--(BUSINESS WIRE)--Strattec Security Corporation (Nasdaq: STRT) Generated $14 million in Cash from Operations in Second Quarter Fiscal 2026. ...

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