STRATTEC(US:STRT)2025-10-31 15:13Financial Performance - Net sales for the three months ended September 28, 2025, increased to $152,399 thousand, up from $139,052 thousand for the same period in 2024, representing an increase of 9.6%[13] - Gross profit rose to $26,335 thousand, compared to $18,921 thousand in the prior year, reflecting a significant increase of 39.1%[13] - Net income attributable to Strattec for the three months ended September 28, 2025, was $8,529 thousand, a substantial increase from $3,703 thousand in the same period last year, marking a growth of 130.5%[13] - Earnings per share attributable to Strattec increased to $2.10 (basic) and $2.07 (diluted), compared to $0.92 for both in the prior year[13] - Comprehensive income attributable to Strattec for the three months ended September 28, 2025, was $9,189 thousand, compared to $2,288 thousand in the same period last year, indicating a growth of 302.5%[15] - For the three months ended September 28, 2025, net income attributable to Strattec was $8.529 million, compared to $3.703 million for the same period in 2024, representing a 130.5% increase[33] - Net sales for the first quarter of fiscal 2026 were $152.4 million, an increase of $13.3 million or 10% compared to the prior year[51] - Gross profit improved to $26.3 million with a gross margin of 17.3%, up from 13.6% in the prior year, reflecting a 370 basis point increase[52] - Net income attributable to Strattec was $8.5 million, a 130% increase from $3.7 million in the same quarter last year[50] Assets and Liabilities - Total current assets remained stable at $290,125 thousand as of September 28, 2025, compared to $290,063 thousand at June 29, 2025[16] - Cash and cash equivalents increased to $90,473 thousand at the end of the period, up from $84,579 thousand at the beginning of the period, reflecting a net increase of $5,894 thousand[17] - Total liabilities decreased to $134,278 thousand as of September 28, 2025, down from $145,023 thousand at June 29, 2025[16] - Strattec's retained earnings increased to $277,826 thousand as of September 28, 2025, compared to $269,297 thousand at June 29, 2025, reflecting a growth of 3.3%[16] - The Company had $90.5 million in cash and cash equivalents as of September 28, 2025, with no borrowings outstanding under the $40 million Strattec Credit Facility[58] Expenses and Costs - The Company reported a depreciation expense of $3,785 thousand for the three months ended September 28, 2025, compared to $3,662 thousand in the prior year[17] - Selling, administrative, and engineering expenses were $15.9 million, representing 10.4% of sales, an increase from 10.0% in the prior year[53] - Direct material costs increased by $5.8 million, while labor and overhead costs remained relatively flat, reflecting a $0.1 million increase[52] Tax and Legal Matters - The effective tax rate for the three-month period ended September 28, 2025 was 21.6%, down from 28.6% in the prior year, primarily due to the accrual of foreign income taxes[30][32] - The effective income tax rate decreased to 21.6% in the first quarter of fiscal 2026 from 28.6% in the prior year[56] - The company does not believe it is involved in any legal proceedings that would materially affect its financial statements[67] Credit Facilities and Borrowings - Outstanding borrowings under the Strattec Credit Facility were $0 as of September 28, 2025, while the ADAC-Strattec Credit Facility had outstanding borrowings of $5 million[28] - The average outstanding borrowings under the ADAC-Strattec Credit Facility for the three months ended September 28, 2025 was $6.552 million, with a weighted average interest rate of 7.4%[28] - The Company has a $40 million secured revolving credit facility with BMO Harris Bank N.A., which was amended to extend the maturity to October 2028[26][27] - A new revolving credit agreement was entered into on October 27, 2025, providing a $40 million line of credit maturing in October 2028[59] Share Repurchase and Stock Information - A total of 3,655,322 shares have been repurchased at a cost of approximately $136.4 million since the stock repurchase program began[69] - Currently, 184,073 shares remain available for repurchase under the program[69] - No shares were repurchased during the three-month period ended September 28, 2025[69] Management and Controls - The company maintains effective disclosure controls and procedures as evaluated by management[63] - There were no changes in internal control over financial reporting that materially affected the company during the last fiscal quarter[64] - The Company is currently evaluating the impact of recently issued accounting standards on its consolidated financial statements, including ASU 2023-09 and ASU 2024-03[23][24] Customer Concentration - Significant customers included General Motors (27% of net sales), Ford (22%), and Stellantis (15%), accounting for 64% of total net sales[44] Other Financial Information - The Company recognized a foreign currency transaction loss of $671,000 for the three months ended September 28, 2025, compared to a gain of $1.005 million in the prior year[37] - The Company’s management fee expense related to the joint venture was $2.737 million for the three months ended September 28, 2025, compared to $2.480 million in the prior year[40] - As of September 28, 2025, there was $1.7 million of unrecognized compensation cost related to non-vested performance stock units (PSUs) and $3.8 million related to non-vested restricted stock awards (RSAs)[35] - Primary working capital as a percentage of net sales was 17% for both Q1 fiscal 2026 and fiscal 2025[61] - Accounts receivable, net was $103 million with a PWC % of 17% as of September 28, 2025[61] - Inventory, net decreased to $62 million, reflecting a PWC % of 10%[61] - Accounts payable decreased to $(61) million, resulting in a PWC % of (10%)[61]