STRATTEC SECURITY CORPORATION Generated $9.4 million in Cash from Operations in Fiscal 2025 Second Quarter MILWAUKEE, WI, February 6, 2025 – 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 second quarter of fiscal year 2025, which ended December 29, 2024. STRATTEC President and CEO Jennifer Slater said, "Our solid financial results reflect the focu ...

Company Performance - Strattec Security's shares have increased by 15% over the past month and reached a new 52-week high of $43.27, with a year-to-date gain of 68% compared to the Zacks AutoTires-Trucks sector's 11.6% and the Zacks Automotive - Original Equipment industry's -19.7% return [1] - The company has consistently exceeded earnings expectations, reporting an EPS of $0.92 against a consensus estimate of $0.56 in its last earnings report on November 4, 2024 [2] Earnings Forecast - For the current fiscal year, Strattec Security is projected to achieve earnings of $2.76 per share on revenues of $537.6 million, reflecting a -32.19% change in EPS and a -0.03% change in revenues [3] - The next fiscal year is expected to see earnings of $2.78 per share on revenues of $560.2 million, indicating a year-over-year change of 0.72% in EPS and 4.2% in revenues [3] Valuation Metrics - Strattec Security has a Value Score of A, with Growth and Momentum Scores of B, resulting in a combined VGM Score of A [6] - The stock trades at 15.4X current fiscal year EPS estimates, which is above the peer industry average of 14.2X, and has a trailing cash flow multiple of 5.3X compared to the peer group's average of 5.5X [7] - The PEG ratio stands at 1.54, indicating that while the stock is performing well, it may not be in the top tier from a value perspective [7] Zacks Rank - Strattec Security holds a Zacks Rank of 1 (Strong Buy), supported by favorable earnings estimate revisions from analysts [8] - The recommendation is for investors to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B, which applies to Strattec Security, suggesting potential for future growth [9] Industry Comparison - In comparison to industry peers, XPEL, Inc. has a Zacks Rank of 2 (Buy) and shows a solid performance, with expected earnings of $2.04 per share on revenues of $418.08 million for the current fiscal year [10][11] - XPEL, Inc. shares have gained 17.5% over the past month, trading at a forward P/E of 26.66X and a P/CF of 19.82X, indicating a competitive position within the Automotive - Original Equipment industry [12]

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 September 29, 2024 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 STRATTEC SECURITY CORPORATION (Exact Name of Registrant as Specified in Its Charter) Wisconsin 39-1804239 (State of Incorporation) (I ...

Group 1 - The core investment strategy focuses on long-only investment, evaluating companies from an operational and buy-and-hold perspective, rather than market-driven dynamics [1] - The articles emphasize understanding the long-term earnings power of companies and the competitive dynamics within their industries [1] - The majority of recommendations will be holds, indicating a cautious approach to market conditions, with only a small fraction of companies deemed suitable for purchase at any given time [1] Group 2 - The articles aim to provide important information for future investors and introduce a healthy skepticism towards a generally bullish market [1] - There is a clear distinction made between the author's opinions and professional investment advice, highlighting the need for readers to conduct their own due diligence [2][3]

Financial Data and Key Metrics Changes - The company generated $11.3 million in cash from operations, a substantial increase from the previous year, raising the cash balance to $34 million at the end of the quarter [11] - Revenue increased by 2.7% year-over-year, with net sales rising by 9.1% when excluding the impact of one-time retroactive pricing from the previous year [12][28] - Gross margin for the quarter was 13.6%, benefiting from ongoing price improvement and favorable sales mix, although last year's first quarter had a significant one-time pricing benefit [13][32] - Net income for the first quarter was $3.7 million or $0.92 per diluted share, down from the previous year on a GAAP basis but improved when excluding adjustments related to the one-time retroactive pricing benefit [39] Business Line Data and Key Metrics Changes - Total net sales for the first quarter reached $139.1 million, an increase of $3.6 million or 2.7% [28] - Sales of power door products to Hyundai/Kia increased significantly, driven by inventory stocking to meet production build rates, while sales to Ford rose by 19% due to new latch content on F-Series pickups [30] - Growth was primarily in power access, door handles, and latches, while there was a decline in sales of legacy keys and lock sets [31] Market Data and Key Metrics Changes - The automotive industry is experiencing headwinds due to broader macroeconomic conditions, with demand for products influenced by production rates [14] - The company is focusing on improving its operating model and product offerings to address these market challenges [15] Company Strategy and Development Direction - The company is prioritizing the development of a winning product portfolio, driving operational efficiencies, and enhancing team talent [16][21] - A market-driven approach is being taken to define the future product roadmap, focusing on areas where the company can add value and create a defensible position [17] - The company is re-evaluating its supply chain, inventory, and operational processes to modernize operations and improve profitability [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's ability to uncover potential operating efficiencies and strengthen profitability despite industry challenges [9][10] - The company aims to address headwinds with innovative products and a focus on increasing profitable content on next-generation platforms [15] - Management acknowledged the variability in profitability due to seasonal business patterns and customer/product mix [43] Other Important Information - The company announced the appointment of Linda Redmann as Chief People Officer and Chey Becker-Varto as Chief Commercial Officer to enhance talent management and drive revenue growth [23][25] - Capital expenditures are anticipated to be approximately $15 million in fiscal 2025, focusing on new product initiatives and productivity improvements [40] Q&A Session Summary Question: Impressions of the company relative to expectations - Management noted a strong history in the automotive industry, a solid product portfolio, and good people as key strengths [42] Question: Sustainability of gross margin - Management indicated that gross margin is subject to variability in volume and sales, with seasonal impacts and customer/product mix affecting profitability [43] Question: Expectations for unit volumes in 2025 - Management highlighted that industry production levels will significantly influence unit volumes, with a focus on being powertrain-agnostic [45] Question: Process of reducing pre-tooling balance - Management emphasized the importance of aligning the organization and defining accountability to drive performance improvement [46] Question: Pricing adjustments relative to inflation - Management confirmed progress in pricing adjustments, noting a return to a more normalized pricing environment [48] Question: Growth opportunities in power tailgates - Management is exploring opportunities within the product portfolio to grow the customer base and leverage new team expertise [49] Question: Prospects for stock buyback or reinstating dividends - Management stated that the focus is on ensuring a stable business before considering cash uses like stock buybacks or dividends [52]

Strattec Security (STRT) came out with quarterly earnings of $0.92 per share, beating the Zacks Consensus Estimate of $0.56 per share. This compares to earnings of $1.05 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 64.29%. A quarter ago, it was expected that this maker of automotive locks and keys would post earnings of $0.38 per share when it actually produced earnings of $2.39, delivering a surprise of 528.95%.Over the la ...

News Release Three Months Ended Change 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 b ...

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