Strattec Transformation Continues to Deliver Strong Cash Generation; Generated $10.8 Million in Cash from Operations in First Quarter Fiscal 2027

Cash increased despite share repurchases, while lower customer production volumes and higher expenses weighed on quarterly earnings.

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• Strong balance sheet with $111.8 million in cash and no debt at quarter end
• Financial strength enables continued investment in transformation, $5.0 million return of cash in the quarter to shareholders through purchase of 67,904 shares as well as pursuit of strategic growth
• First quarter net sales were $147.2 million, compared with $152.4 million in the prior year
• Net income attributable to Strattec of $4.8 million, or $1.19 per diluted share, compared with $8.5 million, or $2.07 per diluted share, in the prior-year period; adjusted diluted EPS¹ was $1.85, compared with $2.22
• Adjusted EBITDA¹ of $13.5 million, or 9.2% of net sales, compared with $15.6 million, or 10.2% of net sales, in the prior-year period

MILWAUKEE--(BUSINESS WIRE)-- Strattec (Nasdaq: STRT), a global provider of highly engineered access solutions for the automotive and mobility industries, today reported financial results for its first quarter of fiscal 2027, which ended September 27, 2026.

Jennifer Slater, President and CEO of Strattec, said, “Our first quarter financial results demonstrate the impact of our transformation efforts, which enabled us to achieve a 9.2% adjusted EBITDA margin on $147.2 million in net sales. We continue to improve our cost structure through targeted operational initiatives. During the quarter, we took actions in our Mexico operations that are expected to generate $1.3 million in annualized savings. We believe there remain meaningful opportunities to reduce costs through supply chain improvements and automation which we expect to support margin improvement and strengthen our competitive position.”

She added, “Importantly, the strength of our balance sheet provides us the flexibility to invest in our business while also returning capital to shareholders and pursuing strategic growth opportunities. We have an active acquisition funnel that we believe could advance our long-term strategy. Concurrently, we have remained focused on improving the performance of our operations and driving transformational change.”

FY 2027 First Quarter Financial Summary

(compared with prior-year period, except where otherwise noted)

Net sales were $147.2 million, a decrease of $5.2 million, or 3%. Pricing of $1.0 million somewhat offset the $6.2 million impact of lower customer production volumes.

Gross profit was $24.3 million, compared with $26.3 million in the prior-year period, and gross margin contracted 80 basis points to 16.5%. Pricing, $0.9 million in restructuring savings, lower overhead costs and better mix were more than offset by the impact of lower volume, elevated premium freight and annual labor cost increases. Unfavorable foreign currency exchange rates of $1.4 million had a 90 basis point negative impact to gross margin. Sequentially, gross margin improved from 15.6% in the fourth quarter of fiscal 2026 to 16.5% in the first quarter, on lower sales demonstrating continued progress with the transformation.

Selling, administrative and engineering (“SAE”) expenses were $17.9 million, or 12.2% of sales, compared with $15.9 million, or 10.4% of sales, in the prior-year period. The increase was due to $2.4 million in business development expenses. Excluding business development, business transformation and executive transition costs, adjusted SAE¹ was $15.0 million, or 10.2% of sales, in line with the Company’s target of SAE being 10% to 11% of sales.

Interest income increased $0.1 million to $1.0 million on higher cash balances, while interest expense declined $0.1 million as the Company had no outstanding bank borrowings. Other expense, net was $0.2 million, compared with $0.3 million in the prior-year period.

The effective tax rate was 26.2%, compared with 21.6% in the prior-year period. The higher effective tax rate primarily reflects discrete tax items. Net income attributable to non-controlling interest was $0.5 million, compared with less than $0.1 million in the prior-year period.

Net income attributable to Strattec was $4.8 million, or $1.19 per diluted share, compared with $8.5 million, or $2.07 per diluted share, in the prior-year period. On an adjusted basis, first quarter fiscal 2027 net income attributable to Strattec was $7.5 million, or $1.85 per diluted share, compared with $9.2 million, or $2.22 per diluted share, in the prior-year period. Adjusted EBITDA for the quarter was $13.5 million, or 9.2% of net sales, compared with $15.6 million, or 10.2% of net sales, in the prior-year period.

Business Development Efforts

The Company maintains an active acquisition funnel of strategic opportunities designed to diversify its customers and geographies, increase the scale of its operations and enhance its product offerings within Permission, Motion and Hold. During the first quarter of fiscal 2027, the Company incurred $2.4 million of business development expenses, primarily related to advancing and evaluating these inorganic growth opportunities. Additional acquisition-related expenses may be incurred in subsequent periods, with the amount and timing dependent on the progress of acquisition activities.

Financial Flexibility with Strong Balance Sheet

Cash provided by operating activities was $10.8 million in the first quarter of fiscal 2027, compared with $11.3 million in the prior-year period. During the quarter, the Company repurchased 67,904 shares of common stock for $5.0 million, leaving $35.0 million remaining available under the Company’s share repurchase authorization.

At September 27, 2026, the Company had $111.8 million in cash and cash equivalents and no debt, compared with $108.2 million in cash and cash equivalents at the end of fiscal 2026 and $90.5 million at the end of the first quarter of fiscal 2026.

First Quarter Fiscal 2027 Webcast and Conference Call

Strattec will host a conference call and webcast tomorrow, Friday, October 30, 2026, at 8:00 am Central Time/9:00 am Eastern Time, to review the financial and operating results for the period ended September 27, 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 12:00 pm CT on the day of the call through Friday, November 13, 2026. To listen to the archived call, dial +1 (412) 317-6671 and enter replay PIN 13762673. 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, the Company’s ability to identify, evaluate, negotiate and complete acquisitions or other strategic transactions on acceptable terms or at all, the costs incurred in pursuing such transactions, and the Company’s ability to integrate any acquired business and realize any potential benefits should a transaction occur. 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.

1 Refer to “Use of Non-GAAP Financial Metrics and Additional Financial Information” as well as accompanying reconciliations to GAAP

FINANCIAL TABLES FOLLOW

STRATTEC SECURITY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)
	Three Months Ended
	September 27, 2026				September 28, 2025
Net sales	$	147,197			$	152,399
Cost of goods sold		122,882				126,064
Gross profit		24,315				26,335
Gross margin		16.5	%			17.3	%
Selling, administrative and engineering expenses		17,892				15,888
Income from operations		6,423				10,447
Operating margin		4.4	%			6.9	%
Interest income		989				877
Interest expense		(37	)			(156	)
Other expense, net		(183	)			(275	)
Income before provision for income taxes and non-controlling interest		7,192				10,893
Income tax expense		1,881				2,356
Net income		5,311				8,537
Net income attributable to non-controlling interest		478				8
Net income attributable to Strattec	$	4,833			$	8,529
Earnings per share attributable to Strattec
Basic	$	1.22			$	2.10
Diluted	$	1.19			$	2.07
Weighted average shares outstanding:
Basic		3,970				4,054
Diluted		4,053				4,127

STRATTEC SECURITY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share amounts)
	September 27, 2026				June 28, 2026
ASSETS
Current Assets:
Cash and cash equivalents	$	111,766			$	108,243
Receivables, net		95,117				99,109
Inventories, net		64,903				64,310
Pre-production costs		5,072				6,489
Value-added tax recoverable		9,827				10,069
Other current assets		6,251				8,053
Total current assets		292,936				296,273
Noncurrent Assets:
Property, plant and equipment, net		67,321				69,845
Deferred income taxes		16,143				16,080
Other long-term assets		5,143				5,281
Total Assets	$	381,543			$	387,479
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	55,113			$	54,973
Accrued payroll and benefits		15,001				20,773
Value-added tax payable		7,667				7,429
Warranty reserve		5,677				6,673
Other current liabilities		13,467				12,383
Total current liabilities		96,925				102,231
Noncurrent Liabilities:
Post-employment benefits		12,800				13,350
Other noncurrent liabilities		6,760				6,401
Total Liabilities		116,485				121,982
Shareholders’ Equity:
Common stock, authorized 18,000,000 shares, $.01 par value, 7,738,324 issued shares at September 27, 2026 and 7,704,994 issued shares at June 28, 2026		77				77
Capital in excess of par value		107,766				107,138
Retained earnings		294,728				289,895
Accumulated other comprehensive loss		(14,352	)			(14,143	)
Less: treasury stock, at cost (3,807,746 shares at September 27, 2026 and 3,727,322 shares at June 28, 2026)		(150,363	)			(144,321	)
Total Strattec shareholders’ equity		237,856				238,646
Non-controlling interest		27,202				26,851
Total Shareholders' Equity		265,058				265,497
Total Liabilities and Shareholders' Equity	$	381,543			$	387,479

STRATTEC SECURITY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
	Three Months Ended
	September 27, 2026				September 28, 2025
OPERATING ACTIVITIES:
Net income	$	5,311			$	8,537
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		3,492				3,785
Foreign currency transaction (gain) loss		(194	)			671
Unrealized loss (gain) on peso forward contracts		1,425				(293	)
Stock-based compensation expense		618				669
Other, net		272				316
Change in operating assets and liabilities
Receivables		3,934				(574	)
Inventories		(593	)			3,109
Prepaids and other assets		2,239				3,804
Accounts payable		170				(4,817	)
Accrued liabilities		(5,909	)			(3,880	)
Net cash provided by operating activities		10,765				11,327
INVESTING ACTIVITIES:
Purchase of property, plant and equipment		(1,185	)			(1,529	)
Net used in investing activities		(1,185	)			(1,529	)
FINANCING ACTIVITIES:
Repayment of borrowings under credit facilities		—				(3,000	)
Payment for taxes withheld from stock-based awards		(1,039	)			(919	)
Repurchases of common stock under share repurchase program		(4,973	)			—
Employee stock purchases		15				16
Net cash used in financing activities		(5,997	)			(3,903	)
Foreign currency impact on cash		(60	)			(1	)
NET INCREASE IN CASH AND CASH EQUIVALENTS		3,523				5,894
CASH AND CASH EQUIVALENTS
Beginning of period		108,243				84,579
End of period	$	111,766			$	90,473
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Income taxes	$	466			$	582
Interest	$	—			$	123
Non-cash investing activities:
Change in capital expenditures in accounts payable	$	20			$	13

STRATTEC SECURITY CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited)
(In thousands, except per share amounts)
		Fiscal 2026																Fiscal 2027
		Q1			Q2			Q3			Q4			Total				Q1			Q2		Q3		Q4		Total
NET SALES:
Net Sales (GAAP)		$	152,399		$	137,534		$	137,632		$	151,827		$	579,392			$	147,197		$	-	$	-	$	-	$	147,197
ADJUSTED GROSS PROFIT:
Gross Profit (GAAP)		$	26,335		$	22,722		$	22,661		$	23,647		$	95,365			$	24,315		$	-	$	-	$	-	$	24,315
Gross Margin as a % of Net Sales			17.3	%		16.5	%		16.5	%		15.6	%		16.5	%			16.5	%								16.5	%
Adjustments:
Restructuring and similar charges			-			91			11			(10	)		92				-			-		-		-		-
Business transformation costs			-			-			138			265			403				103			-		-		-		103
Cancelled program settlements			-			-			(573	)		-			(573	)			-			-		-		-		-
			-			91			(424	)		255			(78	)			103			-		-		-		103
Adjusted Gross Profit (Non-GAAP)		$	26,335		$	22,813		$	22,237		$	23,902		$	95,287			$	24,418		$	-	$	-	$	-	$	24,418
Adjusted Gross Margin as a % of Net Sales			17.3	%		16.6	%		16.2	%		15.7	%		16.4	%			16.6	%								16.6	%
ADJUSTED SELLING, ADMINISTRATIVE AND ENGINEERING EXPENSES:
Selling, administrative and engineering expenses (GAAP)		$	15,888		$	17,860		$	17,615		$	17,479		$	68,842			$	17,892		$	-	$	-	$	-	$	17,892
Selling, administrative and engineering expenses as a % of Net Sales			10.4	%		13.0	%		12.8	%		11.5	%		11.9	%			12.2	%								12.2	%
Adjustments:
Restructuring and similar charges			-			(1,570	)		(430	)		44			(1,956	)			-			-		-		-		-
Executive transition costs			(136	)		(88	)		(423	)		(240	)		(887	)			(128	)		-		-		-		(128	)
Business transformation costs			(514	)		(994	)		(822	)		(796	)		(3,126	)			(360	)		-		-		-		(360	)
Business development costs			-			-			-			(763	)		(763	)			(2,368	)		-		-		-		(2,368	)
Cancelled program settlements			-			-			750			-			750				-			-		-		-		-
			(650	)		(2,652	)		(925	)		(1,755	)		(5,982	)			(2,856	)		-		-		-		(2,856	)
Adjusted Selling, administrative and engineering expenses (Non-GAAP)		$	15,238		$	15,208		$	16,690		$	15,724		$	62,860			$	15,036		$	-	$	-	$	-	$	15,036
Adjusted Selling, administrative and engineering expenses as a % of Net Sales			10.0	%		11.1	%		12.1	%		10.4	%		10.8	%			10.2	%								10.2	%
ADJUSTED OPERATING INCOME:
Income from operations (GAAP)		$	10,447		$	4,862		$	5,046		$	6,168		$	26,523			$	6,423		$	-	$	-	$	-	$	6,423
Operating Income as a % of Net Sales			6.9	%		3.5	%		3.7	%		4.1	%		4.6	%			4.4	%								4.4	%
Adjustments:
Restructuring and similar charges			-			1,661			441			(54	)		2,048				-			-		-		-		-
Executive transition costs			136			88			423			240			887				128			-		-		-		128
Business transformation costs			514			994			960			1,061			3,529				463			-		-		-		463
Business development costs			-			-			-			763			763				2,368			-		-		-		2,368
Cancelled program settlements			-			-			(1,323	)		-			(1,323	)			-			-		-		-		-
			650			2,743			501			2,010			5,904				2,959			-		-		-		2,959
Adjusted Operating Income (Non-GAAP)		$	11,097		$	7,605		$	5,547		$	8,178		$	32,427			$	9,382		$	-	$	-	$	-	$	9,382
Adjusted Operating Income as a % of Net Sales			7.3	%		5.5	%		4.0	%		5.4	%		5.6	%			6.4	%								6.4	%

STRATTEC SECURITY CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited)
(In thousands, except per share amounts)
		Fiscal 2026																Fiscal 2027
		Q1			Q2			Q3			Q4			Total				Q1			Q2		Q3		Q4		Total
ADJUSTED EBITDA:
Net income attributable to Strattec (GAAP)		$	8,529		$	4,947		$	3,240		$	3,882		$	20,598			$	4,833		$	-	$	-	$	-	$	4,833
Net income (loss) attributable to non-controlling interest			8			696			585			(264	)		1,025				478			-		-		-		478
Income tax expense			2,356			1,699			1,282			6,002			11,339				1,881			-		-		-		1,881
Other (income) expense, net			275			(1,691	)		748			(2,630	)		(3,298	)			183			-		-		-		183
Interest income			(877	)		(885	)		(879	)		(859	)		(3,500	)			(989	)		-		-		-		(989	)
Interest expense			156			96			70			37			359				37			-		-		-		37
Income from operations			10,447			4,862			5,046			6,168			26,523				6,423			-		-		-		6,423
Adjustments:
Depreciation		$	3,785		$	3,893		$	3,772		$	3,635		$	15,085			$	3,492		$	-	$	-	$	-	$	3,492
Non-cash stock-based compensation			669			1,125			811			700			3,305				618			-		-		-		618
Restructuring and similar charges			-			1,305			424			(30	)		1,699				-			-		-		-		-
Executive transition costs			136			88			423			240			887				128			-		-		-		128
Business transformation costs			514			994			960			1,061			3,529				463			-		-		-		463
Business development costs			-			-			-			763			763				2,368			-		-		-		2,368
Cancelled program settlements			-			-			(1,323	)		-			(1,323	)			-			-		-		-		-
			5,104			7,405			5,067			6,369			23,945				7,069			-		-		-		7,069
Adjusted EBITDA (Non-GAAP)		$	15,551		$	12,267		$	10,113		$	12,537		$	50,468			$	13,492		$	-	$	-	$	-	$	13,492
Adjusted EBITDA as a % of Net Sales			10.2	%		8.9	%		7.3	%		8.3	%		8.7	%			9.2	%								9.2	%
ADJUSTED NET INCOME AND EARNINGS/(LOSS) PER SHARE:
Net income attributable to Strattec (GAAP)		$	8,529		$	4,947		$	3,240		$	3,882		$	20,598			$	4,833		$	-	$	-	$	-	$	4,833
Adjustments:
Restructuring and similar charges			570			1,165			572			49			2,356				107			-		-		-		107
Executive transition costs			136			88			423			240			887				128			-		-		-		128
Business transformation costs			514			994			960			1,061			3,529				463			-		-		-		463
Business development costs			-			-			-			763			763				2,368			-		-		-		2,368
Cancelled program settlements			-			-			(1,323	)		-			(1,323	)			-			-		-		-		-
Non-controlling interest impact			(196	)		190			(9	)		28			13				(6	)		-		-		-		(6	)
Tax effect on above adjustments and other discrete tax items			(383	)		(335	)		(139	)		2,388			1,531				(392	)		-		-		-		(392	)
			641			2,102			484			4,529			7,756				2,668			-		-		-		2,668
Adjusted Net Income attributable to Strattec (Non-GAAP)		$	9,170		$	7,049		$	3,724		$	8,411		$	28,354			$	7,501		$	-	$	-	$	-	$	7,501
Weighted Average Basic Shares Outstanding			4,054			4,080			4,085			4,035			4,064				3,970			-		-		-		3,970
Weighted Average Diluted Shares Outstanding			4,127			4,131			4,141			4,091			4,122				4,053			-		-		-		4,053
Diluted earnings per share (GAAP)		$	2.07		$	1.20		$	0.78		$	0.95		$	5.00			$	1.19		$	-	$	-	$	-	$	1.19
Adjusted diluted earnings per share (Non-GAAP)		$	2.22		$	1.71		$	0.90		$	2.06		$	6.88			$	1.85		$	-	$	-	$	-	$	1.85

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20261029755177/en/

Investor Contact:
Deborah K. Pawlowski, IRC
Alliance Advisors IR
Phone: 716-843-3908
Email: dpawlowski@allianceadvisors.com

Source: Strattec

Key Terms

adjusted ebitda financial

Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.

non-gaap financial

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

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oems technical

OEMs, or Original Equipment Manufacturers, are companies that produce the main components or products that other companies use to build finished goods. For investors, OEMs are important because their performance can influence the supply chain, manufacturing costs, and overall market trends in industries like technology, automotive, and electronics. Their success often reflects broader economic health and consumer demand.