Strattec Security Corporation FY Conference Summary Company Overview - **Company Name**: Strattec Security Corporation - **Ticker**: NasdaqGM: STRT - **Market Cap**: Approximately $280 million with about $200 million in equity cap - **Shares Outstanding**: Roughly 4 million shares - **Location**: Milwaukee, Wisconsin - **Debt**: No debt at the parent level, $90 million in net cash, and $25 million in minority interest [1][3] Industry and Product Portfolio - **Industry**: Automotive access control systems - **Core Products**: - Vehicle locks - Active tailgates and liftgates - Enhanced locks and keys - Passive entry systems - **Revenue Breakdown**: Approximately 8% of revenue from aftermarket sales [1][3][4] Strategic Initiatives - **Leadership Changes**: New CEO Jen Slater and CFO Matthew Pauli have focused on operational changes and team restructuring [2][4] - **Cultural Shift**: Emphasis on innovation, collaboration, and results-driven performance [5][6] - **Business Operating System**: Implementation of a business operating system to improve margin and cash generation [6][7] Financial Performance - **Q1 FY 2026 Revenue**: $152 million, up 10% year-over-year, outperforming North American automotive production growth of 5% [12] - **Sales Growth**: Continuous growth observed post-chip shortages, with a trailing 12-month sales figure of $578 million [13] - **Gross Profit Margin**: 17.3% for Q1 FY 2026, significantly improved due to price increases and restructuring benefits [14] - **Net Income**: $8.5 million or $2.07 per share for Q1 FY 2026, with adjusted EBITDA of $15.6 million and a 10.2% EBITDA margin [16] Cost Structure and Tariffs - **Cost Management**: Focus on cost structure improvements, with a 15% reduction in headcount year-over-year [14][15] - **Tariff Impact**: Annual tariff costs estimated at $5-7 million, largely offset by price increases [15][34] Future Outlook - **Revenue Projections**: Expected to align with North American automotive production volumes [11] - **Product Development**: Focus on modernizing product offerings, including the development of digital key fobs and power access products [10][11] - **M&A Considerations**: Future M&A opportunities are being evaluated, with a focus on organic growth and capital allocation [18][37] Operational Flexibility - **Manufacturing Footprint**: Operations in both the U.S. and Mexico, with over 90% of products compliant with USMCA [24][28] - **Adaptability**: Ability to adjust manufacturing strategies in response to tariff changes and customer needs [28][29] Key Takeaways - Strattec is undergoing a significant transformation under new leadership, focusing on operational efficiency and product innovation - Financial performance has improved markedly, with strong revenue growth and profitability metrics - The company is well-positioned to adapt to market changes and capitalize on growth opportunities in the automotive sector [18][43]