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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q


[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 27, 2005

or

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File Number 0-25150
 

STRATTEC SECURITY CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
 
Wisconsin
  
39-1804239
(State of Incorporation)
  
(I.R.S. Employer Identification No.)

3333 West Good Hope Road, Milwaukee, WI 53209
(Address of Principal Executive Offices)

(414) 247-3333
(Registrant’s Telephone Number, Including Area Code)
 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES  X   NO ___

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). YES  X    NO ___

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.

Common stock, par value $0.01 per share: 3,782,507 shares outstanding as of March 27, 2005.


STRATTEC SECURITY CORPORATION

FORM 10-Q

March 27, 2005

INDEX


Part I - FINANCIAL INFORMATION

   
Page
Item 1
Financial Statements
  
 
Condensed Consolidated Statements of Income
3
 
Condensed Consolidated Balance Sheets
4
 
Condensed Consolidated Statements of Cash Flows
5
 
Notes to Condensed Consolidated Financial Statements
6-8
Item 2
Management’s Discussion and Analysis of Financial Condition and
  
 
Results of Operations
9-15
Item 3
Quantitative and Qualitative Disclosures About Market Risk
15
Item 4
Controls and Procedures
15


Part II - OTHER INFORMATION

Item 1
Legal Proceedings
16
Item 2
Unregistered Sales of Equity Securities and Use of Proceeds
16
Item 3
Defaults Upon Senior Securities
16
Item 4
Submission of Matters to a Vote of Security Holders
16
Item 5
Other Information
16
Item 6
Exhibits
16
 

2

Item 1 Financial Statements
 
STRATTEC SECURITY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Amounts)
(Unaudited)

 
   
Three Months Ended 
  
Nine Months Ended
  
   
March 27,
  
March 28,
  
March 27,
  
March 28,
  
   
 2005
  
2004
  
2005
  
2004
  
                   
                           
Net sales
  
$
46,102
  
$
49,266
  
$
139,129
  
$
143,700
  
Cost of goods sold
    
35,892
    
37,082
    
106,700
    
108,956
  
Gross profit
    
10,210
    
12,184
    
32,429
    
34,744
  
Engineering, selling and administrative
                          
expenses
    
4,822
    
5,132
    
14,836
    
15,033
  
Income from operations
    
5,388
    
7,052
    
17,593
    
19,711
  
Interest income
    
326
    
112
    
742
    
289
  
Other (expense) income, net
    
(50
)
  
(49
)
  
109
    
237
  
Income before provision for income taxes
    
5,664
    
7,115
    
18,444
    
20,237
  
Provision for income taxes
    
1,933
    
2,668
    
6,662
    
7,589
  
Net income
  
$
3,731
  
$
4,447
  
$
11,782
  
$
12,648
  
                           
Earnings per share:
                          
Basic
  
$
0.98
  
$
1.17
  
$
3.10
  
$
3.35
  
Diluted
  
$
0.98
  
$
1.15
  
$
3.07
  
$
3.30
  
Average Shares Outstanding:
                          
Basic
    
3,798
    
3,802
    
3,803
    
3,775
  
Diluted
    
3,815
    
3,873
    
3,836
    
3,838
  

The accompanying notes are an integral part of these condensed consolidated statements.


3

STRATTEC SECURITY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Amounts)
 
   
March 27, 
    June 27,  
   
2005
  
2004
  
ASSETS
  
(unaudited)
     
Current Assets:
          
Cash and cash equivalents
  
$
51,357
  
$
54,231
  
Receivables, net
    
28,793
    
30,931
  
Inventories-
              
Finished products
    
3,761
    
2,659
  
Work in process
    
5,177
    
4,620
 
Purchased Materials
    
5,684
    
4,441
 
LIFO adjustment
    
(2,863
)
  
(3,359
)
Total inventories
    
11,759
    
8,361
 
Other current assets
    
9,943
    
10,903
 
Total current assets
    
101,852
    
104,426
 
               
Investment in joint ventures
    
1,349
    
1,336
  
Prepaid pension obligations
    
605
    
-
  
               
Property, plant and equipment
    
104,236
    
102,610
  
Less: accumulated depreciation
    
(74,909
)
  
(71,182
)
Net property, plant and equipment
    
29,327
    
31,428
 
               
   
$
133,133
  
$
137,190
  
               
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
          
Accounts payable
  
$
16,409
  
$
18,787
  
Accrued Liabilities:
              
Payroll and benefits
    
6,940
    
11,067
  
Environmental reserve
    
2,701
    
2,710
 
Other
   
4,211
    
2,720
 
Total current liabilities
    
30,261
    
35,284
 
               
Deferred income taxes
    
543
    
543
  
Accrued postretirement obligations
    
5,096
    
11,511
 
               
Shareholders' equity:
              
Common stock, authorized 12,000,000 shares $.01 par value,
              
 issued 6,853,647 shares at March 27, 2005 and 6,754,892 shares at June 27, 2004
    
69
    
68
  
Capital in excess of par value
    
74,793
    
70,415