STRATTEC(US:STRT)2026-02-05 21:30Financial 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]