Glendale-based Strattec Security Corp. nearly doubled its net income and earnings during the third quarter of fiscal 2017 and improved sales to all its customer groups.
The maker of automotive locks, keys and other vehicle access products reported net income of $3.5 million, an increase of 84.3 percent. Earnings improved from 52 cents to 95 cents per diluted share. Gross profit margin increased from 15.4 percent to 15.9 percent, which the company attributed to a favorable exchange rate from its Mexican operations. The currency gain was offset by a less favorable product mix and startup costs related to the Leon, Mexico facility set to begin production in September.
“After last quarter, where earnings were significantly impacted by a combination of lower sales, manufacturing initiatives, higher engineering expenses to execute new business won, we have seen improvements in all three of those areas,” said Frank Krejci, Strattec president and chief executive officer. “In our current quarter, while continuing to add new capital equipment, incurring start-up expenses related to our new facility in Leon, Mexico and investing in our manufacturing processes, I am pleased that we generated improved operating performance”
Revenue during the quarter increased 16.7 percent to $109.7 million. Sales to the company’s largest customer, Fiat Chrysler Automobiles increased slightly from $27.2 million to $28 million. Sales to General Motors were up 17.2 percent to $22 million and sales to Ford increased 21 percent to $16.8 million. Those increases were driven by higher content sales of latches and locksets on certain models. Higher production volumes for driver control, door handle components and switches pushed sales to tier 1 customers up 38 percent to $19.6 million. Increased sales of latches and fobs drove sales to commercial and other OEM customers while higher volumes of the Sedona minivan increased sales to Hyundai and Kia.
The largest boost to the company’s bottom line came from other income sources, up from $73,000 to $1.3 million, including equity earnings from the VAST LLC joint venture and the net of foreign currency realized and unrealized transaction gains.
