Glendale-based Strattec Security Corp. saw an increase in revenue and earnings during the first quarter of fiscal 2018, but costs from new product launches and the startup of a new plant in Mexico limited the improvement.
Net income for the quarter improved from $1.5 million to $2.5 million and earnings jumped from 42 to 67 cents per diluted share. The company’s gross profit margin, however, was down from 14.8 percent to 13.1 percent, which Frank Krejci, Strattec president and chief executive officer, attributed to higher than expected production and expediting costs from new product launches and 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,” Krejci said. “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.”
The company’s revenue was up 2.2 percent to $102.5 million. Sales to Fiat Chrysler Automobiles and Ford Motor Company were essentially flat while sales to General Motors were down as some business shifted to be directly supplied to Opel Automotive.
The largest gain was in the commercial and other OEM customer category, which increased from $13.6 million to $17.9 million. The increase was driven mainly by new customer programs for Honda.
