STRATTEC(US:STRT)2025-02-07 13:30Financial Performance - Net sales for the second quarter of fiscal 2025 were $129.9 million, an increase of $11.4 million (9.6%) compared to the prior year[58]. - Gross profit for the second quarter of fiscal 2025 was $17.2 million, with a gross profit margin improvement from 11.4% to 13.2% year-over-year[59]. - Net sales in the first half of fiscal 2025 reached $269.0 million, an increase of $15.1 million (5.9%) compared to the prior year period[65]. - The company delivered 6% sales growth over the first six months of fiscal 2025, driven by new program launches and increased volumes[56]. - Ford Motor Company net sales grew 18% in the second quarter of fiscal 2025, attributed to increased volume of key & lockset products[60]. - Hyundai Motor Group net sales increased 21% in the second quarter of fiscal 2025 due to higher demand for power access solutions[60]. Cost and Expenses - Material costs increased by $10.0 million year-over-year in the first half of fiscal 2025 due to higher production levels[67]. - Engineering, selling, and administrative expenses for the first half of fiscal 2025 were $28.9 million, compared to $26.1 million in the prior year[68]. Tax and Compliance - The effective income tax rate for the second quarter of fiscal 2025 was 22.5%, down from 25.3% in the prior year[64]. - The company was in compliance with all covenants under its credit facilities as of December 29, 2024[75]. Cash Flow and Liquidity - As of December 29, 2024, the company had $42.6 million in cash and cash equivalents, with $40.1 million held domestically[72]. - Cash provided by operating activities for the first half of fiscal 2025 was $20.8 million, a significant increase from a cash use of $6.9 million in the prior year period[72]. - The company believes its cash on hand and anticipated operating cash flows will be adequate to meet future funding requirements[75]. Investment and Capital Expenditures - Net cash used in investing activities was $3.0 million in the first half of fiscal 2025, compared to $2.4 million in the prior year[73]. - Capital expenditures for new product programs and equipment upgrades were $3.0 million in the current year, down from $4.4 million in the prior year[73]. Working Capital - Primary working capital as a percentage of sales (PWC %) was 24% as of December 29, 2024, compared to 22% as of June 30, 2024[76]. - Accounts receivable, net was $92 million with a PWC % of 18% as of December 29, 2024[76]. - Inventory, net was $82 million with a PWC % of 16% as of December 29, 2024[76]. Strategic Focus - The company is focused on improving its cost structure and driving cash flow through enhanced asset and working capital utilization[56]. - The company had no borrowings outstanding under the $40 million STRATTEC revolving credit agreement as of December 29, 2024[75].