Strattec Transformation Delivers Margin Improvement and Strong Cash Generation in Fiscal 2026

About this update from Strattec Security Corporation

Strattec (Nasdaq: STRT), a global provider of highly engineered access solutions for the automotive and mobility industries, today reported financial results for its fourth quarter and fiscal year 2026, which ended June 28, 2026. Jennifer Slater, President and CEO of Strattec, said, “Fiscal 2026 was a year of progress and discipline as we continued to reshape Strattec into a more resilient, higher-performing business. While our fourth quarter and full-year results were impacted by foreign exchange pressure and the effect of tariffs, we nonetheless delivered year-over-year growth in sales and gross margin expansion through disciplined pricing, cost actions and operational improvements.” She added, “We recognize that the near-term environment remains uncertain and we have much work to do to secure future OEM vehicle platforms. We are managing costs and capital prudently, while our strong cash position gives us the flexibility to continue investing in our product technologies, production automation and customer relationships. These investments will better position us to benefit when industry conditions improve. The strength of our balance sheet also allows us to consider opportunities that could enhance scale and diversify our customers, products and programs over time.” ________________________  1 Refer to use of “Non-GAAP Financial Metrics and Additional Financial Information” as well as accompanying reconciliations to GAAP   FY 2026 Fourth Quarter Financial Summary Net sales were $151.8 million, relatively unchanged from $152.0 million in the prior-year period, and reflected better than expected OEM vehicle production volumes relative to industry forecasts. A majority of the volume decline, including $3.2 million related to customer cancelled EV programs, was offset by pricing actions. Gross profit was $23.6 million, compared with $25.4 million in the prior year while gross margin contracted 110 basis points to 15.6%. Restructuring savings of $0.8 million, a $0.9 million reduction in tariff charges and pricing were more than offset by $1.9 million of higher costs related to unfavorable foreign currency exchange rates and the prior year benefit of $1.3 million of incremental tooling gains. Selling, administrative and engineering (“SAE”) expenses increased 3%, or $0.6 million, to $17.5 million, or 11.5% of sales, compared with $16.9 million, or 11.1% of sales, in the prior-year period. Higher SAE expenses included $1.4 million in business transformation and executive transition costs. These costs were partially offset by a $0.7 million reduction in engineering and professional fees and $0.2 million of restructuring savings. Interest income grew $0.1 million on higher cash balances, while interest expenses declined $0.2 million on lower borrowings. Other income increased $1.4 million primarily as a result of changes in foreign currency exchange rates. Net income attributable to Strattec was $3.9 million, or $0.95 per diluted share, compared with $8.3 million, or $2.01 per diluted share, in the prior-year period. On an adjusted basis, fourth quarter fiscal 2026 net income attributable to Strattec was $8.4 million and adjusted diluted earnings per share1 was $2.06 unchanged from the prior year. Adjusted EBITDA 1 for the quarter was $12.5 million compared with $13.0 million in the prior-year period. Adjusted EBITDA margin of 8.3%, compared with 8.5% in the fiscal 2025 fourth quarter. Solid Balance Sheet Cash from operations in the fourth quarter of fiscal 2026 was $9.7 million, compared with $30.2 million in the prior-year period which benefited from a significant reduction in working capital. At June 28, 2026, Strattec had $108.2 million in cash and cash equivalents, up from $107.0 million at the end of the third quarter of fiscal 2026 and $84.6 million at the end of the prior fiscal year. During the quarter, the Company paid down the remaining $1.0 million in outstanding borrowings on the JV credit facility. The Company also repurchased 110,269 shares for $7.4 million for an average price of $67.10. There is $40 million remaining under the current share repurchase authorization. Fourth Quarter and Fiscal Year 2026 Webcast and Conference Call Strattec will host a conference call and webcast tomorrow, Wednesday, August 26, 2026, at 8:00 am Central Time/9:00 am Eastern Time to review the financial and operating results for the period ended June 28, 2026, and provide an update on its transformation progress. A question-and-answer session will follow. You can access the call by phoning +1 (201) 689-8470 or find the webcast and accompanying slide presentation at investors.strattec.com . A telephonic replay will be available from approximately 11:00 am CT on the day of the call through Wednesday, September 9, 2026. To listen to the archived call, dial +1 (412) 317-6671 and enter replay PIN 13761060. The webcast replay will be available on the Investor Relations section of the Company’s website at investors.strattec.com , where a transcript will be posted once available. About Strattec Strattec is a global automotive access company that designs and delivers safe, secure, and highly engineered access solutions for the automotive and mobility industries. Built on generations of access and security engineering expertise, Strattec partners closely with OEMs to create differentiated, system‑level access experiences for end consumers. Strattec’s portfolio spans the access journey from Permission, enabling secure vehicle entry through advanced mechanical and electronic systems; to Motion, delivering effortless, reliable powered access that enhances everyday usability; and through to Hold, providing precision‑engineered latching solutions that give drivers confidence through proven strength, safety, and durability trusted by OEMs worldwide. As access becomes increasingly intelligent, connected, and central to vehicle experience, Strattec’s strategy is to expand its market share, further diversify its customers and geographic reach while becoming the most trusted access partner to drive long‑term growth across global automotive and mobility markets. For more information, visit www.strattec.com . Safe Harbor Statement Certain statements contained in this release contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words or phrases such as “anticipate,” “believe,” “could,” “expect,” “intend,” “may,” “planned,” “potential,” “should,” “will,” and “would.” Such forward-looking statements are inherently subject to many uncertainties in the Company’s operations and business environment. These uncertainties include general economic conditions, in particular, relating to the automotive industry, consumer demand for the Company’s and its customers’ products, competitive and technological developments, customer purchasing actions, changes in warranty provisions and customer product recall policies, work stoppages at the Company or at the location of its key customers as a result of labor disputes, foreign currency fluctuations, uncertainties stemming from U.S. trade policies, tariffs and reactions to the same from foreign countries, matters adversely impacting the timing and availability of component parts and raw materials needed for the production of the Company’s products and the products of its customers and fluctuations in costs of operation. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Such uncertainties and other operational matters are discussed further in the Company’s quarterly and annual filings with the Securities and Exchange Commission. The forward-looking statements made herein are only made as of the date of this press release and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances occurring after the date of this release. Use of Non-Gaap Financial Metrics and Additional Financial Information In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Strattec provides Adjusted Non-GAAP information as additional information for its operating results. References to Adjusted Non-GAAP information are to non-GAAP financial measures. These measures are not required by, in accordance with, or an alternative for, GAAP and may be different from similarly titled non-GAAP financial measures used by other companies. Strattec’s management uses these measures to make strategic decisions, establish budget plans and forecasts, identify trends affecting Strattec’s business, and evaluate performance. Management believes that providing these non-GAAP financial measures to investors, as a supplement to GAAP financial measures, will help investors evaluate Strattec’s core operating and financial performance and business trends consistent with how management evaluates such performance and trends. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures.       Strattec Security Corporation Consolidated Statements of Income (Unaudited) (In thousands, except per share amounts)     Three Months Ended   Twelve Months Ended June 28, 2026   June 29, 2025   June 28, 2026   June 29, 2025 Net sales  $   151,827      $            152,013      $            579,392      $            565,066   Cost of goods sold     128,179       126,613       484,027       480,489   Gross profit   23,648       25,400       95,365       84,577   Gross margin   15.6 %     16.7 %     16.5 %     15.0 % Selling, administrative and engineering expenses     17,480     16,898       68,842     61,793   Income from operations     6,168       8,502       26,523       22,784   Operating margin   4.1 %     5.6 %     4.6 %     4.0 % Interest income     859       753       3,500       2,039   Interest expense     (37 )       (212 )       (359 )       (1,007 ) Other income, net     2,630       1,189       3,298       820   Income before provision for income taxes and non-controlling interest     9,620       10,232       32,962       24,636   Income tax expense     6,002       2,170       11,339       5,717   Net income     3,618       8,062       21,623       18,919   Net income (loss) attributable to non-controlling interest     (264 )     (205 )     1,025       234   Net income attributable to Strattec  $                 3,882      $                 8,267      $               20,598      $               18,685     Earnings per share attributable to Strattec               Basic  $                   0.96    $                   2.05    $                   5.07    $                   4.64   Diluted  $                   0.95      $                   2.01      $                   5.00      $                   4.58     Weighted average shares outstanding:               Basic     4,035       4,039       4,064       4,030   Diluted     4,091         4,105         4,122         4,076           STRATTEC SECURITY CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except share amounts)   June 28, 2026 June 29, 2025 ASSETS       Current Assets: Cash and cash equivalents  $ 108,243      $ 84,579   Receivables, net     99,109       102,061   Inventories, net   64,310       64,701   Pre-production costs     6,489       8,657   Value-added tax recoverable     10,069         19,389   Other current assets     8,053       10,676   Total current assets     296,273         290,063   Noncurrent Assets: Property, plant and equipment, net   69,845       77,410   Deferred income taxes     16,080       19,531   Other long-term assets     5,281         4,450   Total Assets  $                387,479    $                391,454   LIABILITIES AND SHAREHOLDERS’ EQUITY       Current Liabilities: Accounts payable  $ 54,973      $ 65,824   Accrued payroll and benefits     20,773       22,956   Value-added tax payable     7,429         11,933   Warranty reserve     6,673       8,900   Other current liabilities     12,383         9,737   Total current liabilities     102,231       119,350   Noncurrent Liabilities:       Borrowings under credit facilities     —       8,000   Post-employment benefits     13,350         13,325   Other noncurrent liabilities     6,401       4,348   Total Liabilities     121,982         145,023   Shareholders’ Equity: Common stock, authorized 18,000,000 shares, $.01 par value, 7,704,994 issued shares at June 28, 2026 and 7,635,883 issued shares at June 29, 2025     77         76   Capital in excess of par value     107,138       103,784   Retained earnings     289,895         269,297   Accumulated other comprehensive loss     (14,143 )     (16,113 ) Less: treasury stock, at cost (3,727,322 shares at June 28, 2026 and  3,596,549 shares at June 29, 2025)     (144,321 )       (135,452 ) Total Strattec shareholders’ equity     238,646       221,592   Non-controlling interest     26,851         24,839   Total Shareholders' Equity     265,497       246,431   Total Liabilities and Shareholders' Equity  $            387,479      $            391,454           Strattec Security Corporation Consolidated Statements of Cash Flows (Unaudited) (In thousands)     Three Months Ended   Twelve Months Ended June 28, 2026   June 29, 2025   June 28, 2026   June 29, 2025 OPERATING ACTIVITIES:               Net income  $                  3,618    $                  8,062    $               21,623    $               18,919   Adjustments to reconcile net income to net cash provided by operating activities:               Depreciation     3,635       3,812       15,085       14,764   Foreign currency transaction loss (gain)     1,029         1,643         1,560         591   Deferred income taxes     3,563       (1,890 )     3,563       (1,890 ) Stock-based compensation expense     700         886         3,305         2,725   Unrealized (gain) loss on peso forward contracts     (2,461 )     (2,545 )     349       (2,314 ) Other, net     240         271         345         1,348   Change in operating assets and liabilities Receivables     1,364         7,152         2,992         (3,085 ) Inventories     9,091       10,890       391       16,948   Prepaids and other assets     (2,516 )       6,033         9,466         12,027   Accounts payable     (9,497 )     (6,056 )     (10,431 )     10,674   Accrued liabilities     888         1,918         (1,944 )       970   Net cash provided by operating activities     9,654       30,176       46,304       71,677   INVESTING ACTIVITIES:               Purchase of property, plant and equipment     (1,415 )     (2,996 )     (7,328 )     (7,156 ) Proceeds from sale of property, plant and equipment     1,671         —         1,930         —   Net cash (used in) provided by investing activities     256       (2,996 )     (5,398 )     (7,156 ) FINANCING ACTIVITIES:               Borrowings under credit facilities     —       —       —       3,000   Repayment of borrowings under credit facilities     (1,000 )       (5,000 )       (8,000 )       (8,000 ) Payment for debt issuance costs     (34 )     —       (132 )     —   Repurchases of common stock under share repurchase program     (7,400 )       —         (7,400 )       —   Payment for taxes withheld from stock-based awards     (89 )     —       (1,442 )     —   Share issuances     17         17         64         61   Net cash used in financing activities     (8,506 )     (4,983 )     (16,910 )     (4,939 ) Foreign currency impact on cash     (118 )       276         (332 )       (413 ) NET INCREASE IN CASH AND CASH EQUIVALENTS     1,286       22,473       23,664       59,169                   CASH AND CASH EQUIVALENTS Beginning of period     106,957         62,106         84,579         25,410   End of period  $             108,243    $               84,579    $             108,243    $               84,579   SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:               Cash paid during the period for: Income taxes  $                  2,825      $                  5,039      $                  4,746      $               14,174   Interest  $   —    $ 276    $   218    $ 1,007   Non-cash investing activities:               Change in capital expenditures in accounts payable  $                     (72 )  $                (1,148 )     (79 )  $                   (422 )         Strattec Security Corporation Reconciliation of GAAP to Non-GAAP Financial Measures (In thousands, except per share amounts)     Fiscal 2025   Fiscal 2026 Q1 Q2 Q3 Q4 Total   Q1 Q2 Q3 Q4 Total NET SALES:                         Net Sales (GAAP)  $     139,052    $     129,919    $     144,082    $     152,013    $     565,066    $     152,399    $     137,534    $     137,632    $     151,827    $     579,392                             ADJUSTED EBITDA: Net income attributable to Strattec (GAAP)    $ 3,703    $ 1,319    $ 5,396    $ 8,267    $ 18,685      $ 8,529    $ 4,947    $ 3,240    $ 3,882    $ 20,598   Net income (loss) attributable to non-controlling interest   45     79     315     (205 )   234       8     696     585     (264 )   1,025   Income tax expense     1,498     405     1,644     2,170       5,717       2,356     1,699     1,282     6,002     11,339   Other (income) expense, net     (129 )   482     16     (1,189 )   (820 )   275       (1,691 )   748     (2,630 )   (3,298 ) Interest income     (349 )   (408 )   (529 )   (753 )   (2,039 )     (877 )   (885 )   (879 )   (859 )   (3,500 ) Interest expense   295     257     243     212     1,007     156       96     70     37     359   Income from operations       5,063     2,134     7,085     8,502     22,784       10,447     4,862     5,046     6,168     26,523     Adjustments:                         Depreciation   3,662     3,544     3,746     3,812    $ 14,764     3,785     3,893     3,772                 3,635    $ 15,085   Non-cash stock-based compensation     188     891     760     887     2,726       669     1,125     811       700     3,305   Restructuring and similar charges     -     265     809     (676 )   398     -     1,305     424     (30 )   1,699   Cancelled program settlements        -        -       -        -       -         -       -     (1,323 )     -     (1,323 ) Executive transition costs     941     921     214       (17 )   2,058     136     88     423     240     887   Business transformation costs     74     215       259     479     1,027       514     994     960     1,824     4,292     4,865     5,836     5,788     4,485     20,974     5,104     7,405     5,067     6,369     23,945   Adjusted EBITDA (Non-GAAP)    $         9,928    $         7,970    $       12,873    $       12,987    $       43,758      $       15,551    $       12,267    $       10,113    $       12,537    $       50,468     Adjusted EBITDA as a % of Net Sales     7.1 %   6.1 %   8.9 %   8.5 %   7.7 %     10.2 %   8.9 %   7.3 %   8.3 %   8.7 %                             ADJUSTED NET INCOME AND EARNINGS PER SHARE: Net income attributable to Strattec (GAAP)    $ 3,703    $ 1,319    $ 5,396    $ 8,267    $ 18,685      $   8,529    $ 4,947    $ 3,240    $ 3,882    $ 20,598   Adjustments: Restructuring and similar charges     -     265       809     (676 )   398       570     1,165     572     49     2,356   Cancelled program settlements     -       -       -       -     -       -       -     (1,323 )     -     (1,323 ) Executive transition costs     1,224     1,225     214     115     2,778       136     88     423     240       887   Business transformation costs   74     215     259     479     1,027     514     994     960     1,824     4,292   Non-controlling interest impact        -       -     (160 )   160       -       (196 )   190     (9 )     28     13   Tax effect on above adjustments and other discrete tax items     (292 )     (384 )   (376 )   107     (945 )   (383 )   (335 )   (139 )   2,388     1,531         1,006     1,321     746     185     3,258       641     2,102     484     4,529     7,756   Adjusted Net Income attributable to Strattec (Non-GAAP)  $ 4,709    $ 2,640    $ 6,142    $ 8,452    $ 21,943    $ 9,170    $ 7,049    $ 3,724    $ 8,411    $ 28,354                             Weighted Average Basic Shares Outstanding   4,005     4,035     4,039     4,039     4,030     4,054       4,080     4,085     4,035     4,064   Weighted Average Diluted Shares Outstanding     4,046     4,070     4,085     4,105     4,076       4,127     4,131     4,141     4,091     4,122     Diluted earnings per share (GAAP)    $ 0.92    $ 0.32    $ 1.32    $ 2.01    $ 4.58      $ 2.07    $ 1.20    $ 0.78    $ 0.95    $ 5.00   Adjusted dilutive earnings per share (Non-GAAP)  $ 1.16    $ 0.65    $ 1.50    $ 2.06    $ 5.38    $ 2.22    $ 1.71    $ 0.90    $ 2.06    $ 6.88         View source version on businesswire.com: https://www.businesswire.com/news/home/20260825826321/en/

View stock analysis, news, and events for Strattec Security Corporation