Strattec Security Corp (STRT, Financial) released its Q1 fiscal 2024 earnings on October 26, 2023. The company reported a significant increase in net sales and net income compared to the same period last year. The report also highlighted the company's improved gross profit margins and the impact of its strategic decisions on its financial performance.
Financial Performance Highlights
Strattec Security Corp (STRT, Financial) reported net sales of $135.4 million for the first quarter ended October 1, 2023, compared to net sales of $120.4 million for the first quarter ended October 2, 2022. The company's net income was $4.2 million in the current year first quarter, compared to net income of $125,000 in the prior year first quarter. Diluted earnings per share for the current year quarter were $1.05 and for the prior year first quarter were $0.03.
Key Financial Details
The company's higher revenues this quarter reflect $10.8 million of negotiated pricing relief, $8.0 million of which relates to one-time retroactive pricing for parts shipped in the prior fiscal year, while the remaining $2.8 million is attributable to ongoing increases in current part prices. Gross Profit margins improved to 13.8% compared with 10.4% in the prior year driven primarily by the pricing relief achieved, of which 4.7 percentage points was one-time retroactive pricing related.
CEO Commentary
Frank Krejci, President and CEO commented: “I am very proud of our entire team for the results in the quarter. The team was able to capture inflationary price increases in the form of one-time recoveries as well as enhanced margins for the future. Additionally, the higher sales beyond the pricing relief achieved in the quarter reflected our ability to increase the reach of our most successful products across the product line-ups of our customers. And in support of our effort to protect margins, we implemented a salaried staff reduction in our Mexican operations. We will continue to adjust our execution to whatever the outcome, however, our earnings will be negatively impacted until the strike ends, at which time we will work in earnest with our customers to try and recover lost sales and profitability. Fortunately, our exit of a long-standing joint venture arrangement at the end of our prior fiscal year has meaningfully strengthened our balance sheet while providing greater focus on our core business. Now with greater control over our business, we look forward to the future.”
Financial Tables Summary
The financial tables provide a detailed breakdown of the company's performance. The Condensed Results of Operations table shows a significant increase in net sales and net income for the first quarter ended October 1, 2023, compared to the same period in the previous year. The Condensed Balance Sheet Data table indicates a stable financial position with total assets and total liabilities and shareholders' equity remaining consistent. The Condensed Cash Flow Statement Data table shows a decrease in cash and cash equivalents at the end of the period compared to the beginning of the period.
Company Overview
Strattec Security Corp (STRT, Financial) designs, develops, manufactures, and markets automotive Access Control Products. These products are provided to customers in North America, and on a global basis through a unique strategic relationship with WITTE Automotive of Velbert, Germany and ADAC Automotive of Grand Rapids, Michigan. STRATTEC’s history in the automotive business spans over 110 years.
Explore the complete 8-K earnings release (here) from Strattec Security Corp for further details.
