STRATTEC SECURITY CORPORATION Reports Potential Loss On Trade Receivable With Chrysler...

STRATTEC SECURITY CORPORATION Reports Potential Loss On Trade Receivable With
Chrysler LLC and Fiscal Third Quarter Results

MILWAUKEE, May 5, 2009 (GLOBE NEWSWIRE) -- STRATTEC SECURITY CORPORATION
(Nasdaq:STRT) announced today that it has identified the need to increase its
reserve for uncollectible trade accounts receivables by $500,000 for the third
quarter of fiscal 2009. STRATTEC has approximately $2.7 million of pre-petition
bankruptcy accounts receivable due from Chrysler LLC, a portion of which the
Company believes could be uncollectible due to Chrysler LLC's filing for Chapter
11 bankruptcy protection for their U.S. legal entities on April 30, 2009. Prior
to this filing, the Company had been accepted into the United States Department
of Treasury "Auto Supplier Support Program" for Chrysler suppliers and is in the
process of determining what trade receivables are eligible for payment under
this Program.

Based on information currently available, the Company believes the increase in
its reserve is adequate to cover the potential loss exposure on this account as
of the fiscal third quarter that ended on March 29, 2009. The reserve for
uncollectible trade accounts receivable reduced the third quarter's earnings per
share by $.10. As further information becomes available, the Company may be
required to record an additional reserve in the fourth fiscal quarter of 2009
for the remaining loss exposure.

OPERATING RESULTS
FOR THE FISCAL THIRD QUARTER ENDED MARCH 29, 2009
Net sales for the Company's third quarter ended March 29, 2009 were $29.3
million, compared to net sales of $38.4 million for the third quarter ended
March 30, 2008. Net loss for the current period was $2.8 million, compared to
net income of $446,000 for the quarter ended March 30, 2008. Diluted loss per
share for the current quarterly period was $.87 compared to diluted earnings per
share of $.13 in the prior year quarter. The significant reduction in sales and
profitability for the current quarter reflect extensive customer assembly plant
shutdowns in the month of January and into the first half of February.
STRATTEC's OEM production volumes were down approximately 52% during the current
quarter which is slightly less than the overall decline in our customers' North
American light vehicle production volume. The current quarter results include
the operations of STRATTEC POWER ACCESS LLC, the power products business
acquired from Delphi Corporation on November 30, 2008. However, STRATTEC POWER
ACCESS sales were very low the first half of the quarter due to the
aforementioned customer assembly plant shutdowns. For comparison purposes, it
should also be noted that the prior year quarter sales were negatively impacted
by a prolonged strike against a major supplier to General Motors Corporation.

For the nine months ended March 29, 2009, net sales were $97.9 million compared
to net sales of $121.1 million in the prior year period. Net loss for the
current nine month period was $4.0 million compared to net income of $4.2
million in the prior year period and diluted loss per share was $1.22 compared
to diluted earnings per share of $1.19.

Sales to STRATTEC's largest customers overall were significantly lower in the
current quarter compared to the prior year quarter. Sales to General Motors
Corporation in the current quarter were $6.6 million compared to $10.1 million
in the prior year quarter due to lower vehicle production volumes, offset by the
takeover of certain passenger car lockset production from another supplier.
Sales to Chrysler LLC were $11.1 million compared to $9.7 million. The increased
Chrysler sales were due to $5.2 million of sales generated by STRATTEC POWER
ACCESS relating primarily to the products supplied on Dodge, Chrysler and
Volkswagen minivans, offset by a combination of lower vehicle production volume
and reduced component content in the lock products we supply. Sales to Ford
Motor Company were $3.6 million compared to $5.0 million and sales to Delphi
Corporation were $1.2 million compared to $3.8 million due to lower vehicle
production volumes. Sales during the current quarter were weaker than initially
anticipated for the above four customers due to their additional production
schedule cut backs following the Christmas holiday shutdown.

Gross profit margins were 7.0% in the current quarter compared to 16.3% in the
prior year quarter. The year-over-year decrease in gross profit margins was
primarily attributed to reduced customer production volumes offset by lower
purchased material costs for zinc and brass along with a favorable Mexico Peso
to U.S. dollar exchange rate affecting the Company's operations in Mexico.

Operating expenses were $7.2 million in the current quarter, compared to $6.1
million in the prior year quarter. The increased spending is primarily
attributed to including in the current quarter STRATTEC POWER ACCESS engineering
personnel costs and contracting with Delphi for temporary transition services
related to the acquisition of Delphi's power products business. The temporary
transition services and related expenses totaled $309,000 during the quarter
ended March 29, 2009. Also included in the current quarter is a one-time charge
of $350,000 for severance and outplacement costs relating to a U.S. salaried
work force reduction on January 15, 2009. We expect that the salaried work force
reduction, along with reductions in our 401k match, will save approximately $2.0
million annually.

RECENT DEVELOPMENTS
On April 23, 2009, General Motors announced assembly plant downtime for the
months of May through July in order to reduce excess inventories at their dealer
locations. Most of the approximately 190,000 vehicles removed from GM's
production schedules are those that we supply. On April 27, 2009, General Motors
announced certain aspects of its Revised Viability Plan including reduced
production volumes for calendar year 2009 and the subsequent five years. We will
be evaluating the impact this Plan will have on our business as more details
become available. On April 30, 2009, Chrysler LLC announced assembly plant
downtime for the months of May and June as part of their reorganization under
Chapter 11 bankruptcy.

As a result of these announced reductions in production by General Motors and
Chrysler LLC, we are also reducing our production schedules. These reductions
will affect both our sales and profitability for the fourth fiscal quarter
ending June 28, 2009.

STRATTEC designs, develops, manufactures and markets automotive Security
Products including mechanical locks and keys, electronically enhanced locks and
keys, steering column and instrument panel ignition lock housings; and Access
Control Products including latches, power sliding side door systems, power lift
gate systems, power deck lid systems and related products. These products are
provided to customers in North America, and on a global basis through the VAST
Alliance in which STRATTEC participates with WITTE Automotive of Velbert,
Germany and ADAC Automotive of Grand Rapids, Michigan. STRATTEC's history in the
automotive business spans 100 years.

The STRATTEC SECURITY CORPORATION logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=4700

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 in this release 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, foreign currency
fluctuations, and costs of operations. 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. 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. In
addition, such uncertainties and other operational matters are discussed further
in the Company's quarterly and annual filings with the Securities and Exchange
Commission.

STRATTEC SECURITY CORPORATION
-----------------------------
Results of Operations
(In Thousands except per share amounts)

Third Quarter Ended Nine Months Ended
March 29, March 30, March 29, March 30,
2009 2008 2009 2008
-------- -------- -------- --------
(Unaudited) (Unaudited)

Net Sales $ 29,348 $ 38,428 $ 97,878 $121,075
Cost of Goods Sold 27,295 32,161 87,503 99,508
-------- -------- -------- --------
Gross Profit 2,053 6,267 10,375 21,567

Engineering, Selling &
Administrative Expenses 7,175 6,109 19,796 17,740
Provision for Doubtful
Accounts 500 -- 500 --
-------- -------- -------- --------
(Loss) Income from Operations ( 5,622) 158 (9,921) 3,827

Interest Income 91 617 693 2,344
Other Income (Expense), Net 104 (58) 884 408
Minority Interest 503 (48) 614 70
-------- -------- -------- --------
(4,924) 669 (7,730) 6,649

Provision (Benefit)
for Income Taxes (2,092) 223 (3,703) 2,461
-------- -------- -------- --------
Net (Loss) Income $ (2,832) $ 446 $ (4,027) $ 4,188
======== ======== ======== ========

Earnings (Loss) Per Share:
Basic $ (0.87) $ 0.13 $ (1.22) $ 1.20
======== ======== ======== ========
Diluted $ (0.87) $ 0.13 $ (1.22) $ 1.19
======== ======== ======== ========

Average Basic
Shares Outstanding 3,261 3,476 3,285 3,500

Average Diluted
Shares Outstanding 3,262 3,482 3,290 3,506

Other
Capital Expenditures $ 2,418 $ 4,013 $ 10,929 $ 8,487
Depreciation & Amortization $ 1,649 $ 1,665 $ 4,495 $ 5,161

STRATTEC SECURITY CORPORATION
-----------------------------
Condensed Balance Sheet Data
(In Thousands)

March 29, June 29,
2009 2008
-------- --------
(Unaudited)

ASSETS
Current Assets:
Cash and cash equivalents $ 22,598 $ 51,501
Receivables, net 21,174 23,518
Inventories 11,513 10,269
Other current assets 18,870 17,978
-------- --------
Total Current Assets 74,155 103,266
Deferred Income Taxes 4,044 3,684
Investment in Joint Ventures 4,264 3,642
Prepaid Pension Cost 3,407 758
Other Long Term Assets 889 27
Property, Plant and Equipment, Net 36,535 30,336
-------- --------
$123,294 $141,713

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $ 10,694 $ 15,974
Other 17,717 16,965
-------- --------
Total Current Liabilities 28,411 32,939
Borrowings Under Line of Credit Facility -- --
Accrued Pension and Postretirement Obligations 12,317 12,389
Minority Interest 1,316 953
Shareholders' Equity 238,143 242,843
Accumulated Other Comprehensive Loss (20,790) (17,495)
Less: Treasury Stock (136,103) (129,916)
-------- --------
Total Shareholders' Equity 81,250 95,432
-------- --------
$123,294 $141,713

STRATTEC SECURITY CORPORATION
-----------------------------
Condensed Cash Flow Statement Data
(In Thousands)

Third Quarter Ended Nine Months Ended
March 29, March 30, March 29, March 30,
2009 2008 2009 2008
-------- -------- -------- --------
(Unaudited) (Unaudited)

Cash Flows from Operating
Activities:
Net Income (Loss) $ (2,832) $ 446 $ (4,027) $ 4,188
Adjustment to Reconcile Net
Income to Cash Used in
Operating Activities:
Minority Interest (499) 37 (600) (111)
Depreciation and Amortization 1,649 1,665 4,495 5,161
Intangible Amortization 24 -- 33 --
Stock Based Compensation
Expense 92 124 309 616
Provision for Doubtful
Accounts 500 -- 500 --
Change in Operating
Assets/Liabilities (5,258) 1,802 (8,196) (1,598)
Other, net (160) (19) (1,430) (341)
-------- -------- -------- --------

Net Cash Provided (Used) by
Operating Activities (6,484) 4,055 (8,916) 7,915

Cash Flows from Investing
Activities:
Investment in Joint Ventures -- -- (388) --
Purchase of Delphi
Power Products (1,118) -- (4,931) --
Additions to Property,
Plant and Equipment (2,418) (4,013) (10,929) (8,487)
-------- -------- -------- --------

Net Cash Used in Investing
Activities (3,536) (4,013) (16,248) (8,487)

Cash Flow from Financing
Activities:
Purchase of Common Stock -- (1,188) (6,214) (2,334)
Dividends Paid (488) (528) (1,511) (4,609)
Contribution from
Minority Interest 224 -- 986 349
Loan from Minority Interest 1,000 550 2,175 800
Exercise of Stock Options and
Employee Stock Purchases 10 8 30 21
-------- -------- -------- --------

Net Cash Provided (Used)
by Financing Activities 746 (1,158) (4,534) (5,773)

Effect of Foreign Currency
Fluctuations on Cash (6) 4 795 (16)
-------- -------- -------- --------

Net Decrease in Cash
& Cash Equivalents (9,280) (1,112) (28,903) (6,361)

Cash and Cash Equivalents:
Beginning of Period 31,878 60,242 51,501 65,491
-------- -------- -------- --------
End of Period $ 22,598 $ 59,130 $ 22,598 $ 59,130
======== ======== ======== ========
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CONTACT: STRATTEC SECURITY CORPORATION
Pat Hansen, Senior Vice President and
Chief Financial Officer
414-247-3435
www.strattec.com