XML 20 R10.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Equity Earnings of Joint Ventures | 6 Months Ended
--- | ---
Dec. 31, 2017
Equity Method Investments And Joint Ventures [Abstract] |
Equity Earnings of Joint Ventures | Equity Earnings of Joint Ventures We hold a one-third interest in a joint venture company, VAST LLC, with WITTE and ADAC. VAST LLC exists to seek opportunities to manufacture and sell all three companies’ products in areas of the world outside of North America and Europe. Our investment in VAST LLC, for which we exercise significant influence but do not control and are not the primary beneficiary, is accounted for using the equity method. The following are summarized statements of operations for VAST LLC (in thousands):
| Three Months Ended |  |  | Six Months Ended |  |
| December 31, 2017 |  |  | January 1, 2017 |  |  | December 31, 2017 |  |  | January 1, 2017 |  |
Net Sales | $ | 45,333 |  |  | $ | 34,007 |  |  | $ | 83,843 |  |  | $ | 59,016 |  |
Cost of Goods Sold |  | 35,263 |  |  |  | 27,124 |  |  |  | 64,276 |  |  |  | 47,217 |  |
Gross Profit |  | 10,070 |  |  |  | 6,883 |  |  |  | 19,567 |  |  |  | 11,799 |  |
Engineering, Selling and Administrative Expenses |  | 6,325 |  |  |  | 5,212 |  |  |  | 12,346 |  |  |  | 9,227 |  |
Income From Operations |  | 3,745 |  |  |  | 1,671 |  |  |  | 7,221 |  |  |  | 2,572 |  |
Other Income, net |  | 636 |  |  |  | 730 |  |  |  | 786 |  |  |  | 1,171 |  |
Income before Provision for Income Taxes |  | 4,381 |  |  |  | 2,401 |  |  |  | 8,007 |  |  |  | 3,743 |  |
Provision for Income Taxes |  | 162 |  |  |  | 405 |  |  |  | 684 |  |  |  | 577 |  |
Net Income | $ | 4,219 |  |  | $ | 1,996 |  |  | $ | 7,323 |  |  | $ | 3,166 |  |
STRATTEC’s Share of VAST LLC Net Income | $ | 1,406 |  |  | $ | 665 |  |  | $ | 2,441 |  |  | $ | 1,055 |  |
Intercompany Profit Elimination |  | (2 | ) |  |  | (23 | ) |  |  | (2 | ) |  |  | (23 | ) |
STRATTEC’s Equity Earnings of VAST LLC | $ | 1,404 |  |  | $ | 642 |  |  | $ | 2,439 |  |  | $ | 1,032 |  |
We hold a 51% ownership interest in a joint venture company, SAL LLC, which was formed to introduce a new generation of biometric security products based upon the designs of Actuator Systems LLC, our partner. SAL LLC is considered a variable interest entity based on loans from STRATTEC as discussed below. STRATTEC is not the primary beneficiary and does not control the entity. Accordingly, our investment in SAL LLC is accounted for using the equity method. SAL LLC maintains a license agreement with Westinghouse allowing SAL LLC to do business as Westinghouse Security. Payments due Westinghouse under the license agreement were guaranteed by STRATTEC. As of December 31, 2017 and July 2, 2017, STRATTEC has a recorded liability equal to the estimated fair value of the future payments due under this guarantee of $250,000. The liability is included in Accrued Liabilities: Other in the accompanying Condensed Consolidated Balance Sheets. Loans were made from STRATTEC to SAL LLC in support of operating expenses and working capital needs. The outstanding loan amounts totaled $2.6 million as of December 31, 2017 and July 2, 2017. As of each balance sheet date, the outstanding loan amount was eliminated against STRATTEC’s Investment in SAL LLC in the preparation of the consolidated financial statements. Even though we maintain a 51 percent ownership interest in SAL LLC, effective with our fiscal 2015 fourth quarter, 100 percent of the funding for SAL LLC was being made by loans from STRATTEC to SAL LLC. Therefore, STRATTEC recognized 100 percent of the losses of SAL LLC up to our committed financial support through Equity (Loss) Earnings of Joint Ventures in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income (Loss) for all periods presented in this report. The equity earnings reported for the quarter and year to date periods ended December 31, 2017 was the result of a reduction in our estimated required financial support needed to satisfy the liabilities of SAL LLC. The following are summarized statements of operations for SAL, LLC (in thousands):
|  | Three Months Ended |  |  | Six Months Ended |  |
|  | December 31, 2017 |  |  | January 1, 2017 |  |  | December 31, 2017 |  |  | January 1, 2017 |  |
Net Sales |  | $ | 122 |  |  | $ | 96 |  |  | $ | 230 |  |  | $ | 196 |  |
Cost of Goods Sold |  |  | 259 |  |  |  | 97 |  |  |  | 411 |  |  |  | 184 |  |
Gross (Loss) Profit |  |  | (137 | ) |  |  | (1 | ) |  |  | (181 | ) |  |  | 12 |  |
Engineering, Selling and Administrative Expenses |  |  | (15 | ) |  |  | 369 |  |  |  | (25 | ) |  |  | 706 |  |
Loss From Operations |  |  | (122 | ) |  |  | (370 | ) |  |  | (156 | ) |  |  | (694 | ) |
Other Expense, net |  |  | (64 | ) |  |  | (35 | ) |  |  | (129 | ) |  |  | (47 | ) |
Net Loss |  | $ | (186 | ) |  | $ | (405 | ) |  | $ | (285 | ) |  | $ | (741 | ) |
STRATTEC’s Equity Earnings (Loss) of SAL LLC |  | $ | 69 |  |  | $ | (413 | ) |  | $ | 60 |  |  | $ | (741 | ) |
Currently, we, along with our joint venture partner, are winding down operating the business of SAL LLC. We have sales of component parts to VAST LLC and SAL LLC, purchases of component parts from VAST LLC, expenses charged to VAST LLC for engineering and accounting services and expenses charged to us from VAST LLC for general headquarters expenses. The following table summarizes these related party transactions with VAST LLC and SAL LLC for the periods indicated below (in thousands):
|  | Three Months Ended |  |  | Six Months Ended |  |
|  | December 31, 2017 |  |  | January 1, 2017 |  |  | December 31, 2017 |  |  | January 1, 2017 |  |
Sales to VAST LLC |  | $ | 987 |  |  | $ | 50 |  |  | $ | 1,583 |  |  | $ | 103 |  |
Sales to SAL, LLC |  | $ | 147 |  |  | $ | 52 |  |  | $ | 182 |  |  | $ | 127 |  |
Purchases from VAST LLC |  | $ | 84 |  |  | $ | 71 |  |  | $ | 129 |  |  | $ | 102 |  |
Expenses Charged to VAST LLC |  | $ | 171 |  |  | $ | 226 |  |  | $ | 383 |  |  | $ | 454 |  |
Expenses Charged from VAST LLC |  | $ | 312 |  |  | $ | 349 |  |  | $ | 530 |  |  | $ | 758 |  |

X
- References No definition available. + Details
Name: | us-gaap_EquityMethodInvestmentsAndJointVenturesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=66011266&loc=d3e33918-111571 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 35 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=64825282&loc=d3e32847-111569 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.12) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 35 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=64825282&loc=d3e32787-111569 + Details
Name: | us-gaap_EquityMethodInvestmentsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration