Strattec earnings increase despite costs of new production plant in Guanajuato
Strattec Security Corp., a Wisconsin-based developer and manufacturer of automotive locking systems, posted an increase in revenue and earnings during the first quarter of fiscal year 2018, which ended October 1, 2017, despite an increase in costs related to new product launches and the startup of a new plant in Mexico.
Net income for the quarter improved from US$ 1.5 million to US$ 2.5 million with earnings hiking from 42 to 67 cents per diluted share. The company’s gross profit margin, however, was down from 14.8% to 13.1%, attributed to higher than expected production and expediting costs from new product launches, as well as the opening of a new paint facility in Leon, Mexico.
“While both efforts put pressure on our earnings now, they are expected to have a positive impact in the years ahead,” Frank Krejci, President and CEO, said in the report. “Throughout this fiscal year our focus will continue to be on improving operating efficiency, reducing costs and discontinuing small customer programs which are not meeting our expectations,” Krejci added.
The company’s revenue was up 2.2% to US$ 102.5 million despite sales to Fiat Chrysler Automobiles and Ford Motor Company were essentially flat, while sales to General Motors were down.
The largest gain was in the commercial and other OEM customer category, which increased from US$ 13.6 million to US$ 17.9 million. The increase was driven mainly by new customer programs for Honda.
Strattec operates three manufacturing sites in Juarez, Chihuahua, and one which recently opened in Leon, Guanajuato.
The company designs, develops, manufactures and markets automotive Access Control Products, including mechanical locks and keys, electronically enhanced locks and keys, steering column and instrument panel ignition lock housings, latches, power sliding side door systems, power lift gate systems, power deck lid systems, door handles and other related products.