Strattec First Quarter Fiscal 2026 Financial Results Validate Operational Improvements

MILWAUKEE--( BUSINESS WIRE)-- Strattec Security Corporation (Nasdaq: STRT) (“Company” or “Strattec”), a leading provider of smart vehicle access, security and authorization solutions for the global automotive industry, reported financial results for its first quarter of fiscal year 2026, which ended September 28, 2025.

Jennifer Slater, President and CEO of Strattec, said, “Our first quarter results demonstrate the hard work of the team over this last year to streamline our operations, simplify the organization and improve our profitability. We continue to manage our cost structure to be responsive to changing sales levels and have started various automation projects to further enhance our gross margins. At the end of the quarter, we implemented an additional restructuring action in our Mexico operations which is expected to deliver $1 million in annualized savings.

“We remain focused on advancing our business transformation, implementing improved foundational processes, systems and tools and are encouraged with our progress. We are carefully balancing a continuous review of our cost structure with investments in growth initiatives. We are actively engaged with customers to develop highly engineered products as we work to secure content on future vehicle platforms. Uncertainty, nevertheless, is prevalent for the North American automotive industry given recent industry wide supply chain challenges, a dynamic tariff environment and the resulting changes in OEM production levels. Our cash position and strong balance sheet support our resiliency through this dynamic environment and allow us to continue to execute on the business transformation while pursuing organic growth opportunities,” Ms. Slater concluded.

FY 2026 First Quarter Financial Summary

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

Net sales were $152.4 million, an increase of $13.3 million, or 10%. Sales growth was driven by $4.3 million of sales related to higher demand on existing platforms, $3.9 million of pricing, $3.0 million associated with favorable sales mix and higher content value and $2.1 million in net new program launches.

Gross profit increased $7.4 million to $26.3 million, while gross margin expanded 370 basis points. The improvement was primarily the result of pricing actions and the contribution from higher volume complemented by $1.3 million in restructuring savings. This more than offset $1.1 million higher labor costs in Mexico related to annual merit increases, $0.8 million of incremental tariff costs, and $0.5 million related to unfavorable foreign exchange rates.

Selling, administrative and engineering (“SAE”) expenses increased $2.0 million to $15.9 million, or 10.4% of sales, compared with $13.9 million, or 10.0% of sales, in the prior-year period. Higher SAE expenses include a $0.5 million increase in equity compensation costs, timing of professional fees, $0.9 million investment in additional headcount, and $0.4 million of incremental business transformation costs. Partially offsetting the higher SAE expenses were lower executive transition costs of $0.1 million in the first quarter of fiscal 2026 compared with $0.9 million in the first quarter of fiscal 2025.

Interest income grew $0.5 million on higher cash balances, while interest expenses declined $0.1 million on lower borrowings. Other expense was $0.3 million, down from other income of $0.1 million in the prior-year period. The change was primarily due to $0.6 million in costs related to restructuring actions which was partially offset by a $0.3 million benefit as a result of changes in foreign currency exchange rates.

Net income attributable to Strattec was $8.5 million, or $2.07 per diluted share, compared with $3.7 million, or $0.92 per diluted share, in the prior-year period. On an adjusted basis, first quarter fiscal 2026 net income attributable to Strattec 1 was $9.2 million, and adjusted diluted earnings per share 1 was $2.22. Adjusted EBITDA 1 for the quarter was $15.6 million compared with $9.9 million in the prior-year period. Adjusted EBITDA margin of 10.2%, compared with 7.1% in the fiscal 2025 first quarter.

Financial Flexibility with Strong Balance Sheet

As expected, cash from operations in the first quarter of fiscal 2026 was $11.3 million, similar to the prior-year period.

At September 28, 2025, the Company had $90.5 million in cash and cash equivalents, up from $84.6 million from the end of the fourth quarter of fiscal 2025. The Company had no borrowings outstanding under its $40 million revolving credit agreement. Borrowings under the joint venture’s $18 million revolving credit agreement were $5.0 million, down from $8.0 million at the end of the fourth quarter of fiscal 2025.

On October 27, 2025, the Company entered into a new revolving credit agreement to replace the existing $40 million facility that was scheduled to mature in August 2026. The new credit facility extends the maturity to October 2028 and bears interest at a rate of SOFR plus an applicable margin of 1.50%.

First Quarter Fiscal Year 2026 Webcast and Conference Call

The Company will host a conference call and webcast tomorrow, Friday, October 31, 2025, at 9:00 am Eastern Time to review the financial and operating results for the period ended September 28, 2025, and provide an update on its transformation progress. A question-and-answer session will follow.

You can access the call by phoning (201) 689-8470 or find the webcast and accompanying slide presentation at investors.strattec.com.

A telephonic replay will be available from 12:00 p.m. ET on the day of the call through Friday, November 14, 2025. To listen to the archived call, dial +1 (412) 317-6671 and enter replay PIN 13755694. The webcast replay will be available on the Investor Relations section of the Company’s website investors.strattec.com, where a transcript will be posted once available.

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

ABOUT STRATTEC

Strattec is a leading global provider of advanced automotive access, security & authorization solutions for leading vehicle manufacturers, primarily in the U.S. With a history spanning over 110 years, Strattec has consistently been at the forefront of innovation in vehicle security, transitioning from mechanical to integrated electro-mechanical systems. Its highly-engineered products include power access solutions, latches, vehicle start systems, keys, fobs & accessories, locks & locksets, door handles and other access products. Power access solutions provide the motion control for power liftgates, sliding power doors and power tailgates. For more information on Strattec and its solutions, 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. 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.

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.

FINANCIAL TABLES FOLLOW

Strattec Security Corporation

Consolidated Statements of Income

(Unaudited)

(In thousands, except per share amounts)

152,399

139,052

126,064

120,131

26,335

18,921

17.3

13.6

15,888

13,858

10,447

5,063

6.9

3.6

877

349

(156

)

(295

)

(275

)

129

10,893

5,246

2,356

1,498

8,537

3,748

8,529

3,703

2.10

0.92

2.07

0.92

4,054

4,005

4,127

4,046

Strattec Security Corporation

Consolidated Balance Sheets

(Unaudited)

(In thousands, except share amounts)

90,473

84,579

102,674

102,061

61,592

64,701

7,480

8,657

20,194

19,389

7,712

10,676

290,125

290,063

75,634

77,410

19,649

19,531

4,649

4,450

390,057

391,454

61,077

65,824

15,386

22,956

13,259

11,933

9,848

8,900

5,000

—

11,939

9,737

116,509

119,350

—

8,000

13,609

13,325

4,160

4,348

134,278

145,023

104,464

103,784

277,826

269,297

(15,453

)

(16,113

)

(136,366

)

(135,452

)

230,547

221,592

25,232

24,839

255,779

246,431

390,057

391,454

Strattec Security Corporation

Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

8,537

3,748

3,785

3,662

671

(1,005

)

669

652

(293

)

188

(574

)

(3,189

)

3,109

(2,145

)

3,804

5,881

(4,817

)

5,036

(3,880

)

(2,038

)

316

547

11,327

11,337

(1,529

)

(2,073

)

(1,529

)

(2,073

)

—

3,000

(3,000

)

(3,000

)

(919

)

—

(3,903

)

(284

)

5,894

8,993

84,579

25,410

90,473

34,403

582

4,081

123

280

(506

)

Strattec Security Corporation

Reconciliation of GAAP to Non-GAAP Financial Measures

(in thousands, except per share amounts)

139,052

129,919

144,082

152,013

565,066

152,399

3,703

1,319

5,396

8,267

18,685

8,529

315

(205

)

234

1,498

405

1,644

2,170

5,717

2,356

(129

)

482

(1,189

)

(820

)

275

(349

)

(408

)

(529

)

(753

)

(2,039

)

(877

)

(877

)

295

257

243

212

1,007

156

5,063

2,134

7,085

8,502

22,784

10,447

3,662

3,544

3,746

3,812

14,764

3,785

188

891

760

887

2,726

669

265

809

(676

)

398

941

921

214

(17

)

2,058

136

215

259

479

1,027

514

4,865

5,836

5,788

4,485

20,974

5,104

9,928

7,970

12,873

12,987

43,758

15,551

7.1

6.1

8.9

8.5

7.7

10.2

3,703

1,319

5,396

8,267

18,685

8,529

265

809

(676

)

398

570

1,224

1,225

214

115

2,778

136

215

259

479

1,027

514

(160

)

160

(196

)

(196

)

(292

)

(384

)

(376

)

107

(945

)

(383

)

(383

)

1,006

1,321

746

185

3,258

641

4,709

2,640

6,142

8,452

21,943

9,170

4,005

4,035

4,039

4,030

4,054

4,046

4,070

4,085

4,105

4,076

4,127

0.92

0.32

1.32

2.01

4.58

2.07

1.16

0.65

1.50

2.06

5.38

2.22