Exhibit 99.1 News Release 3333 West Good Hope Rd. • Milwaukee, Wisconsin 53209 IMMEDIATE RELEASE Strattec First Quarter Fiscal 2026 Financial Results Validate Operational Improvements MILWAUKEE, WI, October 30, 2025 – Strattec Security Corporation (Nasdaq: STRT) ("Company" or "Strattec"), 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 2026, which ended September 28, 2025. Jen ...

Core Insights - Strattec Security Corp. has entered the top 10th percentile of U.S.-listed stocks in terms of momentum, indicating strong performance relative to peers [1][2] - The company's momentum score increased from 89.28 to 91.48, reflecting a significant gain and positioning it among leading stocks like AMD and Nvidia [2] - Despite generating 80-90% of revenue from major automakers, Strattec has remained under the radar, but its growth, quality, and value rankings are in the top quartiles [3][4] Momentum Ranking - Momentum is defined as a measure of a stock's relative price strength, volatility patterns, and trend persistence across multiple timeframes, suggesting that Strattec may be poised for a breakout [3] - The stock combines defensive fundamentals with strong technical momentum, although it has shown weak price trends in the short and medium term [4] Market Performance - Strattec's shares were down 4.82% in premarket trading, with a year-to-date decline of 12.28% and a 15.27% drop over the year, contrasting with the S&P 500's gains of 17.42% YTD [5] - The broader market indices, including the S&P 500, Dow Jones, and Nasdaq 100, experienced mixed performance, with slight declines in some cases [6]

Core Insights - Strattec Security Corp. has entered the top 10th percentile of U.S.-listed stocks in terms of momentum, indicating strong price performance [1][2] - The company's momentum score increased from 89.28 to 91.48, reflecting a significant gain and placing it among elite momentum performers [2][3] - Despite generating 80-90% of its revenue from major automakers, Strattec has remained under the radar, but its growth, quality, and value rankings are in the top quartiles [3][4] Performance Metrics - Strattec's momentum score has risen by 2.2 points over the week, signaling potential for a sustained breakout [2][3] - The company has a growth ranking of 86.51, quality ranking of 78.39, and value ranking of 88.48, indicating strong defensive fundamentals combined with technical momentum [4] - However, the stock has underperformed the market, with a year-to-date decline of 12.28% compared to the S&P 500's increase of 17.42% [5]

Core Insights - The article emphasizes the focus on growth and momentum stocks that are reasonably priced and expected to outperform the market in the long term [1] - It highlights a significant investment opportunity, noting that the S&P 500 increased by 367% and the Nasdaq by 685% from March 2009 to 2019, indicating a strong recovery and growth potential in the market [1] Investment Strategy - The investment strategy involves long-term investment in quality stocks, with the use of options to enhance returns [1] - The article suggests that investors should consider high-quality growth stocks to maximize their investment returns [1]

Core Viewpoint - Strattec Security Corporation (NASDAQ: STRT) has been identified as a top quant-rated stock, with a previous recommendation to buy the stock based on its performance and ratings [1]. Group 1 - The company was reviewed on July 12, and the analysis supported the quant rating, indicating a positive outlook for the stock [1]. - The analyst holds a beneficial long position in STRT shares, which may influence the perspective presented in the analysis [1].

Group 1 - Strattec Security Corporation (NASDAQ: STRT) was reviewed on July 12 and was identified as a top quant-rated stock [1] - The analysis at that time supported the quant rating and indicated that the stock was a buy [1] - The company has a beneficial long position in its shares through stock ownership, options, or other derivatives [1]

Summary of Strattec Security (STRT) FY Conference Call - August 26, 2025 Company Overview - **Company Name**: Strattec Security (STRT) - **Industry**: Automotive parts manufacturing - **Headquarters**: Milwaukee, Wisconsin - **Public Company Since**: 1995 - **Key Customers**: Ford, General Motors, Stellantis [3][27] Core Business and Product Portfolio - **Product Range**: Includes power access products (power lift gates, tailgates, power sliding doors), lock and key systems, and key fobs [2][3] - **Powertrain Agnostic**: Products are designed for both electric vehicles and internal combustion engines, allowing for a balanced product offering amid industry transformation [3] Transformation and Operational Improvements - **Transformation Status**: The company is in the early stages of transformation, focusing on team alignment and operational excellence [4][11] - **Team Enhancements**: A refreshed executive team has been established, including new roles such as Chief Commercial Officer and Chief People Officer [5][7] - **Cost Structure**: Achieved $8 million in annual pricing improvements and reduced headcount by 15% without impacting customer service [6][11] - **Modernization Efforts**: Focus on updating outdated processes, systems, and tools to ensure sustainable business growth [6][40] Financial Performance - **Revenue Growth**: Achieved $152 million in sales for Q4, a 6% year-over-year increase, with 60% of the increase driven by volume and 40% by pricing [14][15] - **Gross Profit Margin**: Finished Q4 with a gross profit margin of 16.7%, with a full-year margin of 15% [15][19] - **Adjusted Net Income**: Generated $21 million in adjusted net income for FY 2025, equating to $5.38 per share [19] - **Cash Flow**: Generated $71 million in cash flow from operations, driven by cash earnings and a reduction in working capital [20][23] Future Outlook - **2026 Projections**: Expected revenues to be flat or modestly down, with a projected 6% decline in North American automotive production volumes [21][22] - **Margin Improvement Focus**: Continued emphasis on improving margins and cash generation, with long-term gross profit targets of 18% to 20% [22][34] - **M&A Considerations**: M&A will be considered for long-term growth, but the focus remains on stabilizing the business first [47] Strategic Opportunities - **Geographic Expansion**: Plans to explore opportunities outside traditional North American customers and into other transportation markets [27] - **Hedging Against Currency Volatility**: Engaging in hedging activities to mitigate risks associated with peso fluctuations, with approximately $60 million of spend in pesos [31] Key Takeaways - **Transformation Journey**: The company is in the early innings of a significant transformation, with a strong focus on operational efficiencies and modernization [24] - **Leadership and Talent**: A new leadership team is in place to drive growth and operational improvements [24] - **Strong Financial Position**: The company maintains a strong balance sheet with $84 million in cash and only $8 million in debt, providing a solid foundation for future initiatives [19][20]

PART I [Business](index=4&type=section&id=ITEM%201.%20Business) STRATTEC is a global manufacturer of highly engineered automotive access and security products with over 100 years of industry experience - STRATTEC has over **100 years** of history in the automotive industry, incorporated as a stand-alone company in **1995**[15](index=15&type=chunk) - The company's product portfolio includes security and authorization solutions (mechanical/electronic locks, keys, fobs, passive entry/start, digital key), vehicle access systems (power sliding doors, tailgates, liftgate systems), and user-interface control products (steering wheel switches, e-shifters)[16](index=16&type=chunk)[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk) - All products are safety-critical, powertrain agnostic (applicable to ICE, hybrid, EV), and require robust engineering partnership during the **3-5 year** vehicle design cycle[21](index=21&type=chunk) - Direct sales to OEMs (including Tier 1 suppliers) represented approximately **90%** of total sales for both fiscal **2025** and **2024**[24](index=24&type=chunk) - Significant portion of annual sales are to General Motors Company (**29%** in FY25, **30%** in FY24), Ford Motor Company (**23%** in FY25, **21%** in FY24), and Stellantis (**12%** in FY25, **14%** in FY24)[25](index=25&type=chunk)[47](index=47&type=chunk) - Manufacturing operations are primarily in the United States (Milwaukee, WI) and Mexico (Juarez and Leon facilities), specializing in die casting, stamping, plating, plastic injection molding, and assembly[31](index=31&type=chunk) - The company competes based on product design, engineering support, quality, delivery, and price, with key competitors including Aisin, Brose, Continental, Magna, and Valeo[36](index=36&type=chunk)[37](index=37&type=chunk) - As of June 29, 2025, STRATTEC had **2,848** employees globally (**417** in US, **2,425** in Mexico, **6** in other countries), with **9.4%** unionized[38](index=38&type=chunk) [Risk Factors](index=10&type=section&id=ITEM%201A.%20Risk%20Factors) The company faces various risks that could materially affect its business, operations, financial condition, and liquidity - Top three customers (GM, Ford, Stellantis) accounted for **64%** of annual sales in fiscal **2025** (**29%**, **23%**, **12%** respectively) and **66%** in fiscal **2024** (**30%**, **21%**, **14%** respectively), posing a significant customer concentration risk[47](index=47&type=chunk)[225](index=225&type=chunk) - The business is highly dependent on the global automobile industry, making it vulnerable to production slowdowns, economic downturns, global conflicts, pandemics, and part supply shortages[49](index=49&type=chunk) - Operations are impacted by international trade dynamics, tariffs (e.g., recently announced broad tariffs on goods imported into the U.S.), and the potential non-renewal or adverse changes to trade agreements like USMCA[50](index=50&type=chunk)[51](index=51&type=chunk)[55](index=55&type=chunk) - The automotive component supply industry is highly competitive, with pressure on pricing and margins from competitors and customers[56](index=56&type=chunk) - Supply chain disruptions, increases in raw material costs (zinc, brass, nickel silver, steel, aluminum, plastic resins, semiconductor chips), and labor cost inflation (especially in Mexico) are ongoing operational risks[13](index=13&type=chunk)[35](index=35&type=chunk)[60](index=60&type=chunk)[63](index=63&type=chunk)[103](index=103&type=chunk) - Cybersecurity incidents, including sophisticated attacks leveraging AI, pose risks to sensitive data, critical systems, and business operations, potentially leading to financial and reputational damage[13](index=13&type=chunk)[66](index=66&type=chunk) - Fluctuations in the U.S. dollar/Mexican peso exchange rate can materially affect profitability and cash flows due to manufacturing operations in Mexico[76](index=76&type=chunk)[103](index=103&type=chunk) - The company is exposed to warranty claims if products fail, with potential for material costs depending on the nature and volume of claims[84](index=84&type=chunk)[127](index=127&type=chunk) [Unresolved Staff Comments](index=21&type=section&id=ITEM%201B.%20Unresolved%20Staff%20Comments) The company reported no unresolved staff comments from the SEC - No unresolved staff comments were reported[88](index=88&type=chunk) [Cybersecurity](index=21&type=section&id=ITEM%201C.%20Cybersecurity) STRATTEC maintains a robust cybersecurity governance framework, conducting regular internal and third-party risk assessments - The company conducts regular cybersecurity risk assessments internally and with third-party assistance[89](index=89&type=chunk) - The Information Technology Director reports on assessment results and recommendations to the Board of Directors at least annually[89](index=89&type=chunk) - Cybersecurity strategy is based on the NIST framework, focusing on prevention, detection, and mitigation, with a cross-functional approach to preserve confidentiality, manage data security, and respond to incidents[89](index=89&type=chunk) - Key risk management practices include multi-factor authentication, updated security solutions, annual employee training, email phishing campaigns, external penetration testing, and disaster recovery/incident response plans[91](index=91&type=chunk) - No cybersecurity incidents have materially affected or are reasonably likely to materially affect the business strategy, results of operations, or financial condition[91](index=91&type=chunk) [Properties](index=21&type=section&id=ITEM%202.%20Properties) STRATTEC operates five manufacturing plants, one warehouse, and two sales offices, believed to be well-maintained and sufficient Company Facilities as of June 29, 2025 | Location | Type | Sq. Ft. | Owned or Leased | | :-------------------- | :--------------------------------- | :-------- | :-------------- | | Milwaukee, Wisconsin | Corporate headquarters and manufacturing | 345,123 | Owned | | Juarez, Chihuahua Mexico | Manufacturing | 169,926 | Owned | | Juarez, Chihuahua Mexico | Manufacturing | 77,527 | Owned | | Juarez, Chihuahua Mexico | Manufacturing | 114,841 | Owned | | Leon, Mexico | Manufacturing | 130,532 | Owned | | El Paso, Texas | Distribution warehouse | 114,715 | Leased | | Auburn Hills, Michigan | Sales and engineering | 62,736 | Owned | | Seoul, South Korea | Sales and engineering | 2,859 | Leased | [Legal Proceedings](index=21&type=section&id=ITEM%203.%20Legal%20Proceedings) The company is involved in various legal proceedings but does not anticipate a material adverse effect on its financial condition - The company is involved in various legal proceedings and claims incidental to its business, but none are expected to have a material adverse effect on financial condition, results of operations, or cash flows[93](index=93&type=chunk) [Mine Safety Disclosures](index=23&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Mine Safety Disclosures are not applicable to the company[94](index=94&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=24&type=section&id=ITEM%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) STRATTEC's common stock trades on NASDAQ, with 756 shareholders and 184,073 shares remaining for repurchase - Common stock is traded on the NASDAQ Global Market under the symbol "**STRT**"[4](index=4&type=chunk) - As of June 29, 2025, there were **756** registered shareholders[96](index=96&type=chunk) - **184,073** shares remain available for repurchase under the stock repurchase program, but no shares were repurchased in fiscal **2025** or **2024**[118](index=118&type=chunk)[211](index=211&type=chunk) [RESERVED](index=24&type=section&id=ITEM%206.%20%5BRESERVED%5D) This item is reserved and contains no information [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=ITEM%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) STRATTEC's fiscal 2025 saw significant financial improvement, with sales and net income growth from new programs and operational efficiencies Key Financial Highlights (Fiscal 2025 vs. 2024) | Metric | FY2025 ($M) | FY2024 ($M) | Change ($M) | Change (%) | | :-------------------------------------- | :---------- | :---------- | :---------- | :--------- | | Net sales | 565.1 | 537.8 | 27.3 | 5% | | Net income attributable to Strattec | 18.7 | 16.3 | 2.4 | 15% | | Diluted EPS | 4.58 | 4.07 | 0.51 | 12% | | Cash flow from operations | 71.7 | 12.2 | 59.5 | 488% | | Gross profit | 84.6 | 65.5 | 19.1 | 29% | | Gross margin | 15.0% | 12.2% | 2.8 pp | 23% | | Income from operations | 22.8 | 17.8 | 5.0 | 28% | | Operating margin | 4.0% | 3.3% | 0.7 pp | 21% | | Selling, administrative and engineering expenses | 61.8 | 47.7 | 14.1 | 30% | - Sales growth in fiscal **2025** was driven by **$15.9 million** from net new program launches and favorable mix, plus **$13.9 million** from higher production volumes and customer inventory builds, partially offset by a **$2.6 million** reduction in pricing[106](index=106&type=chunk) - Gross margin improvement was attributed to a stronger U.S. dollar, improved leverage of fixed cost structure on higher sales, and benefits from pricing and restructuring actions[108](index=108&type=chunk) - Selling, administrative, and engineering expenses increased by **$14.1 million**, partly due to a prior-year one-time recovery of **$4.8 million** in engineering costs, increased incentive compensation (**$5.2 million**), and business transformation costs (**$1.0 million**)[109](index=109&type=chunk) - North American light vehicle production is forecasted to be flat over the next several years, with a projected **5-6%** decline in fiscal **2026** due to tariff uncertainties and fewer new platform launches[101](index=101&type=chunk) - The company estimates an annual impact of **$5-$7 million** increase in cost of goods sold from recently enacted tariffs, with a majority already mitigated through supply chain changes, cost pass-throughs, and logistics process changes[102](index=102&type=chunk) - Restructuring activities in Milwaukee and Mexico operations are expected to generate approximately **$5 million** in annual cost reductions[103](index=103&type=chunk) - Cash flow from operations significantly improved to **$71.7 million** in fiscal **2025** from **$12.3 million** in fiscal **2024**, driven by reduced purchasing levels, accounts receivable collection, and pre-production cost recovery[114](index=114&type=chunk) Primary Working Capital Management (FY2025 vs. FY2024) | Metric | June 29, 2025 ($M) | PWC % | June 30, 2024 ($M) | PWC % | | :-------------------------- | :----------------- | :---- | :----------------- | :---- | | Accounts receivable, net | 102 | 17% | 99 | 17% | | Inventory, net | 65 | 11% | 82 | 14% | | Accounts payable | (66) | (11%) | (55) | (10%) | | Net primary working capital | 101 | 17% | 126 | 22% | - Anticipated capital expenditures for fiscal **2026** are approximately **$13 million** for new product programs and equipment upgrades[116](index=116&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=33&type=section&id=ITEM%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section is marked as not applicable, providing no specific market risk disclosures beyond other sections - This item is not applicable[132](index=132&type=chunk) [Financial Statements and Supplementary Data](index=34&type=section&id=ITEM%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited consolidated financial statements with an unqualified opinion, noting a critical audit matter for warranty reserves - Deloitte & Touche LLP issued an unqualified opinion on the consolidated financial statements for fiscal years ended June 29, 2025, and June 30, 2024[133](index=133&type=chunk) - Deloitte & Touche LLP also issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of June 29, 2025[134](index=134&type=chunk)[146](index=146&type=chunk) - A critical audit matter was identified concerning the specific warranty reserve, highlighting the significant management judgment and auditor effort required to evaluate future warranty costs[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk) Consolidated Statements of Income (in thousands) | Metric | June 29, 2025 | June 30, 2024 | | :-------------------------------------- | :------------ | :------------ | | Net sales | $565,066 | $537,766 | | Cost of goods sold | 480,489 | 472,298 | | Gross profit | 84,577 | 65,468 | | Selling, administrative and engineering expenses | 61,793 | 47,654 | | Income from operations | 22,784 | 17,814 | | Interest income | 2,039 | 572 | | Interest expense | (1,007) | (900) | | Other income, net | 820 | 2,717 | | Income before income taxes and non-controlling interest | 24,636 | 20,203 | | Income tax expense | 5,717 | 3,775 | | Net income | 18,919 | 16,428 | | Net income attributable to non-controlling interest | 234 | 115 | | Net income attributable to Strattec | $18,685 | $16,313 | | Basic EPS | $4.64 | $4.10 | | Diluted EPS | $4.58 | $4.07 | Consolidated Balance Sheets (in thousands) | Asset/Liability/Equity | June 29, 2025 | June 30, 2024 | | :-------------------------------------- | :------------ | :------------ | | **ASSETS** | | | | Cash and cash equivalents | $84,579 | $25,410 | | Receivables, net | 102,061 | 99,297 | | Inventories, net | 64,701 | 81,649 | | Total current assets | 290,063 | 253,814 | | Property, plant and equipment, net | 77,410 | 86,184 | | Total Assets | $391,454 | $364,289 | | **LIABILITIES AND SHAREHOLDERS' EQUITY** | | | | Accounts payable | $65,824 | $54,911 | | Total current liabilities | 119,350 | 118,288 | | Borrowings under credit facilities | 8,000 | 13,000 | | Total Liabilities | $145,023 | $138,674 | | Total Strattec shareholders' equity | 221,592 | 200,545 | | Total Shareholders' Equity | 246,431 | 225,615 | | Total Liabilities and Shareholders' Equity | $391,454 | $364,289 | Consolidated Statements of Cash Flows (in thousands) | Activity | June 29, 2025 | June 30, 2024 | | :-------------------------------------- | :------------ | :------------ | | Net cash provided by operating activities | $71,677 | $12,265 | | Net cash used in investing activities | (7,156) | (7,788) | | Net cash (used in) provided by financing activities | (4,939) | 72 | | Net increase in cash and cash equivalents | $59,169 | $4,839 | | Cash and cash equivalents, end of year | $84,579 | $25,410 | [NOTE 1. ORGANIZATION AND NATURE OF BUSINESS](index=45&type=section&id=NOTE%201.%20ORGANIZATION%20AND%20NATURE%20OF%20BUSINESS) STRATTEC is a global provider of automotive security and access solutions, primarily serving major North American OEMs - STRATTEC is a leading global provider of advanced automotive security, access, and user interface solutions[163](index=163&type=chunk) - The majority of sales are to the three largest North American automotive OEMs[163](index=163&type=chunk) [NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=45&type=section&id=NOTE%202.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines STRATTEC's significant accounting policies, including consolidation, estimates, and recently issued accounting standards - Financial statements are prepared in accordance with U.S. GAAP, with the fiscal year ending on the Sunday nearest June 30[164](index=164&type=chunk) - Recently adopted ASU 2023-07 (Improvements to Reportable Segment Disclosures) requires disclosure of significant segment expenses and CODM information[166](index=166&type=chunk) - New ASUs on Income Tax Disclosures (ASU 2023-09, effective FY2026) and Expense Disaggregation Disclosures (ASU 2024-03, effective FY2028) are being evaluated for impact[167](index=167&type=chunk)[168](index=168&type=chunk) - Inventories are stated at the lower of cost or market using the FIFO method, with excess and obsolete inventory reserves recorded based on historical and estimated future demand[171](index=171&type=chunk)[172](index=172&type=chunk) - The excess and obsolete reserve balance increased to **$11.2 million** at June 29, 2025, from **$7.8 million** at June 30, 2024[172](index=172&type=chunk) - Research and development expenditures were **$21.7 million** in fiscal **2025** and **$14.8 million** in fiscal **2024**, expensed as incurred[180](index=180&type=chunk) - The company uses currency forward contracts to minimize earnings volatility from Mexican peso/U.S. dollar exchange rate changes, not for trading or speculative purposes[182](index=182&type=chunk) Warranty Reserve Changes (in thousands) | Metric | June 29, 2025 | June 30, 2024 | | :-------------------------- | :------------ | :------------ | | Balance, beginning of period | $10,695 | $9,725 | | Provision charged to expense | (376) | 2,608 | | Payments | (1,419) | (1,638) | | Balance, end of period | $8,900 | $10,695 | - A valuation allowance for deferred tax assets was **$3.9 million** at June 29, 2025, and **$2.6 million** at June 30, 2024[129](index=129&type=chunk) - The liability for unrecognized tax benefits was **$1.9 million** at June 29, 2025, and **$1.6 million** at June 30, 2024[130](index=130&type=chunk) [NOTE 3. CREDIT FACILITIES](index=51&type=section&id=NOTE%203.%20CREDIT%20FACILITIES) STRATTEC has a $40 million secured revolving credit facility and guarantees a $20 million facility for its joint venture, both expiring in 2026 - STRATTEC has a **$40 million** secured revolving credit facility (Strattec Credit Facility) and guarantees a **$20 million** secured revolving credit facility for its joint venture (ADAC-Strattec Credit Facility)[119](index=119&type=chunk)[193](index=193&type=chunk) - Availability under the ADAC-Strattec Credit Facility will reduce to **$18 million** on August 1, 2025[119](index=119&type=chunk)[193](index=193&type=chunk) - Both credit facilities expire on August 1, 2026, and are secured by U.S. cash balances, accounts receivable, inventory, and fixed assets[193](index=193&type=chunk) Outstanding Borrowings Under Credit Facilities (in thousands) | Credit Facility | June 29, 2025 | June 30, 2024 | | :-------------------- | :------------ | :------------ | | Strattec Credit Facility | $0 | $0 | | ADAC-Strattec Credit Facility | $8,000 | $13,000 | Average Outstanding Borrowings and Weighted Average Interest Rate (in thousands, except percentages) | Credit Facility | FY2025 Average Outstanding Borrowings | FY2025 Weighted Average Interest Rate | FY2024 Average Outstanding Borrowings | FY2024 Weighted Average Interest Rate | | :-------------------- | :------------------------------------ | :------------------------------------ | :------------------------------------ | :------------------------------------ | | Strattec Credit Facility | $0 | 0% | $33 | 8.5% | | ADAC-Strattec Credit Facility | $12,654 | 7.9% | $13,000 | 6.8% | - The company was in compliance with all financial covenants as of June 29, 2025[194](index=194&type=chunk) [NOTE 4. DERIVATIVE INSTRUMENTS](index=51&type=section&id=NOTE%204.%20DERIVATIVE%20INSTRUMENTS) STRATTEC uses monthly Mexican peso currency forward contracts to hedge operating costs and minimize earnings volatility - The company uses monthly Mexican peso currency forward contracts to hedge a portion of peso-denominated operating costs[196](index=196&type=chunk) - These contracts are not designated as accounting hedges; changes in fair value are recognized in Other income, net[182](index=182&type=chunk) Outstanding Forward Contracts as of June 29, 2025 (in thousands) | Effective Dates | Notional Amount | Average Forward Contractual Exchange Rate | Fair Market Value | | :------------------------ | :-------------- | :---------------------------------------- | :---------------- | | July 7, 2025 - June 15, 2026 | $31,959 | 20.64 | $2,314 | [NOTE 5. LEASES](index=51&type=section&id=NOTE%205.%20LEASES) STRATTEC has one operating lease for its El Paso distribution warehouse, with a weighted average remaining term of 3.5 years - The company has one operating lease for its El Paso, Texas distribution warehouse[197](index=197&type=chunk) Operating Lease Expense (in thousands) | Metric | June 29, 2025 | June 30, 2024 | | :-------------------- | :------------ | :------------ | | Operating lease expense | $951 | $989 | Operating Lease Metrics | Metric | June 29, 2025 | June 30, 2024 | | :------------------------------ | :------------ | :------------ | | Weighted average remaining lease term (years) | 3.5 | 4.5 | | Weighted average discount rate | 6.2% | 6.2% | Future Minimum Lease Payments (in thousands) | Fiscal Year | Amount | | :---------- | :----- | | 2026 | $988 | | 227 | $1,037 | | 2028 | $1,089 | | 2029 | $558 | | Thereafter | $0 | | Total future minimum lease payments | $3,672 | | Less: imputed interest | ($386) | | Total lease obligations | $3,286 | [NOTE 6. INCOME TAXES](index=52&type=section&id=NOTE%206.%20INCOME%20TAXES) STRATTEC's income tax expense increased to $5.7 million in fiscal 2025, with an effective tax rate of 23.2% Income Tax Expense (in thousands) | Category | June 29, 2025 | June 30, 2024 | | :------------ | :------------ | :------------ | | Current | $7,607 | $8,486 | | Deferred | (1,890) | (4,711) | | Total | $5,717 | $3,775 | Effective Income Tax Rate Reconciliation | Factor | June 29, 2025 | June 30, 2024 | | :---------------------------- | :------------ | :------------ | | Federal statutory rate | 21.0% | 21.0% | | State taxes, net of federal tax benefit | 1.0 | 2.7 | | Foreign subsidiaries | (1.7) | 5.4 | | Valuation allowance | 4.9 | 2.6 | | Research and development tax credit | (6.0) | (8.1) | | Effective income tax rate | 23.2% | 18.7% | Components of Deferred Tax Assets and Liabilities (in thousands) | Category | June 29, 2025 | June 30, 2024 | | :---------------------------- | :------------ | :------------ | | Gross deferred tax assets | $28,697 | $25,385 | | Valuation allowance | (3,865) | (2,569) | | Net deferred tax assets | 24,832 | 22,816 | | Gross deferred tax liabilities | (5,301) | (5,223) | | Net deferred tax assets (total) | $19,531 | $17,593 | - The total liability for unrecognized tax benefits was **$1.9 million** as of June 29, 2025, and **$1.6 million** as of June 30, 2024[201](index=201&type=chunk) - The One Big Beautiful Bill Act, signed July 4, 2025, may impact the company by allowing immediate expensing of R&D costs and permanent extensions of certain 2017 Tax Cuts and Jobs Act provisions; the company is evaluating its future impact[203](index=203&type=chunk) [NOTE 7. RETIREMENT PLANS AND OTHER POST-EMPLOYMENT BENEFITS](index=54&type=section&id=NOTE%207.%20RETIREMENT%20PLANS%20AND%20OTHER%20POST-EMPLOYMENT%20BENEFITS) STRATTEC maintains a SERP, postretirement health plans, and Mexico post-employment benefits, with 401(k) contributions of $2.0 million - The Supplemental Executive Retirement Plan (SERP) had a projected benefit obligation of **$1.6 million** at June 29, 2025, down from **$2.6 million** at June 30, 2024[204](index=204&type=chunk) - Rabbi Trust assets related to the SERP were valued at **$1.6 million** at June 29, 2025[204](index=204&type=chunk) Mexico Post-employment Benefits Net Periodic Benefit Cost (in thousands) | Component | June 29, 2025 | June 30, 2024 | | :-------------------- | :------------ | :------------ | | Service cost | $1,012 | $1,027 | | Interest cost | 849 | 910 | | Return on plan assets | (118) | (113) | | Net periodic benefit cost | $1,709 | $1,665 | Mexico Post-employment Benefit Obligation and Plan Assets (in thousands) | Metric | June 29, 2025 | June 30, 2024 | | :------------------------------------ | :------------ | :------------ | | Benefit obligation at end of year | $11,998 | $12,296 | | Fair value of plan assets at end of year | $1,253 | $1,158 | | Funded status – accrued benefit obligations | $(10,745) | $(11,138) | - The company expects to contribute **$956,000** to its Mexico post-employment benefit plan assets in fiscal **2026**[209](index=209&type=chunk) - Contributions to the 401(k) plan for U.S. employees were **$2.0 million** in fiscal **2025**, up from **$1.9 million** in fiscal **2024**[210](index=210&type=chunk) [NOTE 8. SHAREHOLDERS' EQUITY](index=56&type=section&id=NOTE%208.%20SHAREHOLDERS'%20EQUITY) As of June 29, 2025, STRATTEC had 4,039,334 common shares outstanding, with no repurchases in fiscal 2025 or 2024 Common Stock Changes | Metric | June 29, 2025 | June 30, 2024 | | :------------------------------------ | :------------ | :------------ | | Outstanding at beginning of period | 3,988,794 | 3,929,046 | | Shares issued under employee stock purchase plan | 1,577 | 2,998 | | Shares issued under equity incentive plans | 48,963 | 56,750 | | Outstanding at end of period | 4,039,334 | 3,988,794 | - **184,073** shares remain available for repurchase under the stock repurchase program; no shares were repurchased in fiscal **2025** or **2024**[211](index=211&type=chunk) - **41,227** shares remain available for purchase under the Employee Stock Purchase Plan as of June 29, 2025[217](index=217&type=chunk) [NOTE 9. EARNINGS PER SHARE](index=56&type=section&id=NOTE%209.%20EARNINGS%20PER%20SHARE) STRATTEC reported basic EPS of $4.64 and diluted EPS of $4.58 for fiscal 2025, reflecting employee stock compensation Earnings Per Share Attributable to Strattec | Metric | June 29, 2025 | June 30, 2024 | | :------------------------------------ | :------------ | :------------ | | Net income attributable to Strattec | $18,685 | $16,313 | | Basic weighted-average shares outstanding | 4,030 | 3,975 | | Effect of dilutive securities - employee stock compensation plan | 46 | 29 | | Diluted weighted-average shares outstanding | 4,076 | 4,004 | | Basic EPS | $4.64 | $4.10 | | Diluted EPS | $4.58 | $4.07 | [NOTE 10. STOCK-BASED COMPENSATION](index=56&type=section&id=NOTE%2010.%20STOCK-BASED%20COMPENSATION) STRATTEC grants RSAs and PSUs under its 2024 Equity Incentive Plan, with $3.2 million in unrecognized compensation cost - The company grants service-based restricted stock awards (RSAs) and performance stock units (PSUs) under the **2024** Equity Incentive Plan[213](index=213&type=chunk) - As of June 29, 2025, **435,742** shares were available for future awards under the **2024** Equity Incentive Plan[214](index=214&type=chunk) Restricted Stock Award (RSA) and Performance Stock Unit (PSU) Activity | Metric | RSAs (Shares) | RSAs (Avg. Grant Date Fair Value) | PSUs (Shares) | PSUs (Avg. Grant Date Fair Value) | | :------------------------------------ | :------------ | :-------------------------------- | :------------ | :-------------------------------- | | Nonvested Balance at July 2, 2023 | 87,900 | $32.09 | - | — | | Granted | 51,675 | $22.16 | - | — | | Vested | (56,750) | $30.12 | - | — | | Forfeited | (3,500) | $29.79 | - | — | | Nonvested Balance at June 30, 2024 | 79,325 | $27.21 | - | — | | Granted | 115,302 | $39.31 | 16,878 | $39.16 | | Vested | (48,963) | $29.49 | - | — | | Forfeited | (16,525) | $31.26 | - | — | | Nonvested Balance at June 29, 2025 | 129,139 | $36.37 | 16,878 | $39.16 | - As of June 29, 2025, unrecognized compensation cost was **$567,000** for PSUs and **$2.6 million** for RSAs, to be expensed over approximately **2 years**[215](index=215&type=chunk)[216](index=216&type=chunk) [NOTE 11. OTHER INCOME, NET](index=57&type=section&id=NOTE%2011.%20OTHER%20INCOME%2C%20NET) Other income, net, decreased to $0.8 million in fiscal 2025, primarily due to foreign currency transaction losses Components of Other Income, Net (in thousands) | Component | June 29, 2025 | June 30, 2024 | | :------------------------------------------ | :------------ | :------------ | | Foreign currency transaction (loss) gain | $(591) | $2,153 | | Rabbi Trust assets gain | 186 | 211 | | Realized and unrealized gain on Mexican peso forward contracts, net | 1,908 | 885 | | Non-service pension and postemployment expense | (1,176) | (395) | | Other | 493 | (137) | | Total Other income, net | $820 | $2,717 | [NOTE 12. ACCUMULATED OTHER COMPREHENSIVE LOSS](index=58&type=section&id=NOTE%2012.%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20LOSS) Accumulated other comprehensive loss increased to $16.1 million, driven by foreign currency translation adjustments Changes in Accumulated Other Comprehensive Loss (in thousands) | Component | June 29, 2025 | June 30, 2024 | | :------------------------------------------ | :------------ | :------------ | | Balance as of beginning of period | $15,689 | $14,194 | | Other comprehensive loss (income) | 889 | 2,601 | | Other comprehensive loss attributable to non-controlling interest | 465 | 1,106 | | Balance as of end of period | $16,113 | $15,689 | - Foreign currency translation adjustments resulted in a loss of **$1.17 million** in fiscal **2025**, compared to a loss of **$2.79 million** in fiscal **2024**[155](index=155&type=chunk)[219](index=219&type=chunk) - Pension and postretirement plans contributed an income of **$281,000** in fiscal **2025**, compared to an income of **$193,000** in fiscal **2024**[155](index=155&type=chunk)[219](index=219&type=chunk) [NOTE 13. RELATED PARTY](index=58&type=section&id=NOTE%2013.%20RELATED%20PARTY) STRATTEC owns 51% of a joint venture with ADAC Automotive, supporting customers with painted door handle products - STRATTEC owns **51%** of a joint venture with ADAC Automotive, focused on painted door handle and exterior trim products[220](index=220&type=chunk) Related Party Transactions (in thousands) | Transaction | June 29, 2025 | June 30, 2024 | | :-------------------------- | :------------ | :------------ | | Management fee expense | $9,893 | $9,511 | | Net sales to joint venture partner | $6,916 | $9,718 | | Accounts receivable from joint venture partner | $731 | $833 | | Accounts payable to joint venture partner | $7,413 | $1,679 | [NOTE 14. SEGMENT INFORMATION](index=59&type=section&id=NOTE%2014.%20SEGMENT%20INFORMATION) STRATTEC operates as a single reportable segment, with the CEO using consolidated net income for performance evaluation - The company operates as a single reportable segment within the automotive industry[221](index=221&type=chunk) - The Chief Executive Officer is the Chief Operating Decision Maker (CODM), using Net income attributable to Strattec to evaluate performance and allocate resources[222](index=222&type=chunk) Net Sales by Country (in thousands) | Country | June 29, 2025 | June 30, 2024 | | :------------ | :------------ | :------------ | | United States | $381,405 | $382,386 | | Mexico | $52,845 | $42,979 | | Canada | 59,717 | 57,061 | | Korea | 56,855 | 44,735 | | Other | 14,244 | 10,605 | | Total Foreign | $183,661 | $155,380 | Tangible Long-Lived Assets, Net by Country (in thousands) | Country | June 29, 2025 | June 30, 2024 | | :------------ | :------------ | :------------ | | United States | $26,186 | $28,542 | | Mexico | $53,633 | $60,726 | | Canada | $20 | $9 | | Korea | $9 | $155 | | Other | $504 | $553 | | Total Foreign | $54,166 | $61,443 | Sales by Product Group (in thousands and percent of total net sales) | Product Group | June 29, 2025 Net Sales | June 29, 2025 % | June 30, 2024 Net Sales | June 30, 2024 % | | :------------------------ | :---------------------- | :-------------- | :---------------------- | :-------------- | | Power access solutions | $138,402 | 24% | $126,680 | 24% | | Door handles & exterior trim | $140,554 | 25% | $135,355 | 25% | | Keys & locksets | $99,788 | 18% | $106,374 | 20% | | Latches | $75,359 | 13% | $67,844 | 13% | | User interface controls | $53,405 | 9% | $47,637 | 9% | | Aftermarket and service | $46,703 | 8% | $42,732 | 8% | | Other | $10,855 | 2% | $11,144 | 2% | | Total | $565,066 | 100% | $537,766 | 100% | Sales to and Receivables from Major Customers (in thousands and percent of total) | Customer | June 29, 2025 Net Sales | June 29, 2025 % | June 30, 2024 Net Sales | June 30, 2024 % | June 29, 2025 Receivables | June 29, 2025 % | June 30, 2024 Receivables | June 30, 2024 % | | :------------------- | :---------------------- | :-------------- | :---------------------- | :-------------- | :------------------------ | :-------------- | :------------------------ | :-------------- | | General Motors Company | $165,701 | 29% | $163,097 | 30% | $26,581 | 26% | $28,645 | 29% | | Ford Motor Company | $129,193 | 23% | $114,937 | 21% | $19,916 | 20% | $24,832 | 25% | | Stellantis | $65,821 | 12% | $77,665 | 14% | $14,812 | 15% | $12,213 | 12% | | Total | $360,715 | 64% | $355,699 | 66% | $61,309 | 60% | $65,690 | 66% | [NOTE 15. COMMITMENTS AND CONTINGENCIES](index=60&type=section&id=NOTE%2015.%20COMMITMENTS%20AND%20CONTINGENCIES) The company does not anticipate material adverse impacts from legal actions and maintains a $1.4 million environmental reserve - The company does not anticipate any materially adverse impact on its financial statements from current legal actions and claims[226](index=226&type=chunk) - An environmental reserve of **$1.4 million** is maintained for a **1985** solvent spill at the Milwaukee facility, considered adequate as of June 29, 2025[227](index=227&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=61&type=section&id=ITEM%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reported no changes in or disagreements with accountants on accounting and financial disclosure matters - No changes in or disagreements with accountants on accounting and financial disclosure were reported[229](index=229&type=chunk) [Controls and Procedures](index=61&type=section&id=ITEM%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls and internal control over financial reporting were effective as of June 29, 2025 - The CEO and CFO concluded that disclosure controls and procedures were effective at a reasonable assurance level as of June 29, 2025[230](index=230&type=chunk) - No material changes in internal control over financial reporting occurred during the most recently completed fiscal quarter[231](index=231&type=chunk) - Management assessed the company's internal control over financial reporting as effective as of June 29, 2025, based on the COSO framework[235](index=235&type=chunk) - Deloitte & Touche LLP issued an attestation report on the effectiveness of the company's internal control over financial reporting[235](index=235&type=chunk) [Other Information](index=63&type=section&id=ITEM%209B.%20Other%20Information) This item is marked as not applicable, indicating no other information is required to be disclosed - This item is not applicable[236](index=236&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=63&type=section&id=ITEM%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is marked as not applicable, indicating no foreign jurisdictions prevent inspections of the company's operations - This item is not applicable[237](index=237&type=chunk) PART III [Directors, Executive Officers, and Corporate Governance](index=64&type=section&id=ITEM%2010.%20Directors%2C%20Executive%20Officers%2C%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the Proxy Statement - Information is incorporated by reference from the Proxy Statement for the annual meeting on October 15, 2025[7](index=7&type=chunk)[240](index=240&type=chunk) - The Audit Committee comprises five outside independent directors: Matteo Anversa (Chairman), Frederic Jack Liebau, Jr., Bruce Lisman, Thomas W. Florsheim, Jr., and Tina Chang[241](index=241&type=chunk) - The company has adopted a Code of Business Ethics applicable to its principal executive and senior financial officers, available on its website[242](index=242&type=chunk) - An Insider Trading Policy is applicable to all directors, officers, and employees, as well as the company itself, to promote compliance with insider trading laws[243](index=243&type=chunk) [Executive Compensation](index=64&type=section&id=ITEM%2011.%20Executive%20Compensation) Information on executive compensation is incorporated by reference from the company's Proxy Statement - Information on executive compensation is incorporated by reference from the Proxy Statement[244](index=244&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=64&type=section&id=ITEM%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Details on security ownership and related stockholder matters are incorporated by reference from the company's Proxy Statement - Information on security ownership and related stockholder matters is incorporated by reference from the Proxy Statement[245](index=245&type=chunk) [Certain Relationships and Related Transactions and Director Independence](index=64&type=section&id=ITEM%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence) Information concerning certain relationships, related transactions, and director independence is incorporated by reference from the Proxy Statement - Information on certain relationships, related transactions, and director independence is incorporated by reference from the Proxy Statement[246](index=246&type=chunk) [Principal Accounting Fees and Services](index=64&type=section&id=ITEM%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services is incorporated by reference from the company's Proxy Statement - Information on principal accounting fees and services is incorporated by reference from the Proxy Statement[247](index=247&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=65&type=section&id=ITEM%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all exhibits and financial statement schedules filed as part of the Form 10-K, many incorporated by reference - Includes the Report of Independent Registered Public Accounting Firm and consolidated financial statements for fiscal years ended June 29, 2025, and June 30, 2024[251](index=251&type=chunk) - Lists various exhibits, including amended and restated articles of incorporation, credit agreements, and stock incentive plans, many of which are incorporated by reference from prior SEC filings[250](index=250&type=chunk)[251](index=251&type=chunk)[252](index=252&type=chunk)[253](index=253&type=chunk)[254](index=254&type=chunk)[255](index=255&type=chunk)[256](index=256&type=chunk)[257](index=257&type=chunk) [FORM 10-K Summary](index=71&type=section&id=ITEM%2016.%20FORM%2010-K%20Summary) This item indicates that no Form 10-K Summary is provided - No Form 10-K Summary is provided[258](index=258&type=chunk) [Signatures](index=72&type=section&id=Signatures) The report is duly signed by the President and CEO, CFO, and other directors, certifying its submission to the SEC - The report is signed by Jennifer L. Slater (President and CEO) and Matthew P. Pauli (Senior VP, CFO), along with other directors[260](index=260&type=chunk)[261](index=261&type=chunk) - Signatures are dated August 25, 2025, for executive officers and August 19, 2025, for directors[261](index=261&type=chunk)

Financial Data and Key Metrics Changes - The company reported a revenue growth of 6% in the fourth quarter and 5% for the fiscal year [7] - Cash generated from operations was $30 million for the quarter and $71 million for the fiscal year, indicating strong cash generation [7][18] - Gross margin expanded by 370 basis points to 16.7% in the fourth quarter and improved by 280 basis points for the year [12][14] - Adjusted EBITDA margin for the fourth quarter was 8.5%, with a year-over-year expansion of 220 basis points to 7.7% [7][16] Business Line Data and Key Metrics Changes - The company is focusing on digital key and power access products to expand its customer base and drive growth [10] - The gross profit for the fourth quarter increased to $25.4 million, driven by strategic pricing actions and higher production volumes [12] Market Data and Key Metrics Changes - North American automotive production is projected to decline by about 5% to 6% in fiscal year 2026, with softness expected in the second half [20] - The company anticipates that its sales will generally follow North American OEM production volumes [20] Company Strategy and Development Direction - The company aims to create shareholder value through transformation actions and operational improvements [8] - Future growth will focus on leveraging product expertise and expanding into new customer segments, particularly in transportation and heavy vehicles [10][30] - The company is committed to maintaining a healthy balance sheet to weather market uncertainties and invest in growth [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing transformation process, indicating that significant changes have been made but more long-term efforts are required [26] - The company expects to continue generating solid cash from operations but at a more normalized rate moving forward [21] - Management highlighted the importance of pricing actions and operational improvements to achieve long-term gross margins in the 18% to 20% range [21] Other Important Information - The company reduced headcount by 15% and simplified operations as part of its transformation efforts [6] - Capital expenditures for the year totaled $7.2 million, focusing on new product programs and IT infrastructure upgrades [19] Q&A Session Summary Question: How far along is the transformation process? - Management indicated that they are still in the early stages of transformation, having addressed many low-hanging fruits in the past fiscal year [26] Question: Is the company considering exiting or divesting product lines? - Management mentioned that they are refocusing efforts on products with more growth potential, such as power access products and digital key fobs, while still supporting existing customers [28] Question: What is the expected sustainable range for gross margin in fiscal 2026? - Management expects gross margins to be impacted by pricing actions and labor inflation, with a target of maintaining margins around 15% [31] Question: How much cash is the company willing to hold given uncertain times? - Management expressed comfort with their current cash position, emphasizing the importance of liquidity for focusing on business transformation [39] Question: What are the expectations for free cash flow in the future? - Management indicated that free cash flow is expected to return to more normalized levels, estimating around $20 million to $30 million per year [58]

Financial Performance Highlights - Q4 FY25 revenue increased by $9 million, representing a 63% growth, reaching $152 million[8] - FY25 revenue grew by $273 million, a 51% increase, totaling $5651 million[21] - Q4 FY25 gross margin expanded by 370 basis points[31] - FY25 gross margin expanded by 280 basis points[6, 32] - FY25 Adjusted EBITDA margin expanded by 220 basis points to 77%[9, 41] - FY25 Net Income increased by 145%[41] - FY25 Adjusted EPS grew by 75% to $538[41] Cash Flow and Capitalization - Q4 FY25 operational cash flow was $302 million[6] - FY25 cash from operations reached $717 million[6] - Cash and cash equivalents stood at $846 million as of June 29, 2025[44] - Debt was reduced by $5 million to $8 million[46]