GLOBE NEWSWIRE

MILWAUKEE -- STRATTEC SECURITY CORP. reported operating results for the fiscal second quarter ended Jan. 1, 2012.

Net sales for the company's second quarter ended January 1, 2012 were $65.9 million, compared to net sales of $61.2 million for the second quarter ended December 26, 2010. Net income for the period was $1.5 million, compared to net income of $1.2 million in the prior year quarter. Diluted earnings per share for the period were $.47 compared to diluted earnings per share of $.37 during the prior year quarter.

For the six months ended January 1, 2012, net sales were $132.2 million compared to net sales of $121.1 million during the prior year six month period. Net income during the current year-to-date period was $2.8 million compared to net income of $2.7 million during the prior year six month period and diluted earnings per share were $.85 for the six month period ended January 1, 2012 compared to diluted earnings per share of $.80 for the six month period ended December 26, 2010.

Sales to STRATTEC's largest customers overall increased in the current quarter compared to the prior year quarter levels. Sales to Chrysler Group LLC were $22.4 million in the current quarter compared to $17.6 million in the prior year quarter. Sales to General Motors Co. were $14.4 million in the current quarter compared to $16.3 million in the prior year quarter. Included in the prior year sales to General Motors were $1.3 million of sales to Nexteer Automotive, formerly a unit of General Motors. Sales to Ford Motor Co. were $8.1 million in the current quarter compared to $6.1 million in the prior year quarter. Sales to Hyundai/Kia were $3.7 million in the current quarter compared to $3.4 million in the prior year quarter.

Gross profit margins were 17.1 percent in the current quarter compared to 16.3 percent in the prior year quarter. The higher gross profit margin in the current year quarter was primarily the result of favorable customer vehicle production volumes, which increased overhead absorption of STRATTEC's manufacturing costs and a favorable Mexico Peso to U.S. Dollar exchange rate affecting the company's operations in Mexico. Items negatively impacting the year-over-year comparison of the current quarter gross margin were a less favorable product content sales mix and higher purchased raw material costs for zinc.

Operating expenses were $8.0 million in the current quarter, compared to $8.3 million in the prior year quarter.

As reported in its first quarter operating results, the VAST LLC operations in China and Brazil both incurred relocation costs associated with moves to new facilities and start-up costs associated with a new product line. Both of these items resulted in STRATTEC incurring an equity loss from this joint venture in the first and second quarters of fiscal year 2012 compared to the same quarters in the prior year in which STRATTEC had equity earnings from the joint venture. STRATTEC anticipates these transition costs and losses to continue over the remaining current fiscal year.

During the current quarter, the company contributed $1.0 million to its Defined Benefit Pension Trust.