EX-99.1 2 strt-ex99_1.htm EX-99.1

STRATTEC SECURITY CORPORATION Generated $20.7 million in Cash from Operations in Fiscal 2025 Third Quarter

May 8, 2025

Page 1

Exhibit 99.1

News Release

3333 West Good Hope Rd. • Milwaukee, Wisconsin 53209

IMMEDIATE RELEASE

STRATTEC SECURITY CORPORATION
Generated $20.7 million in Cash from Operations in Fiscal 2025 Third Quarter

•
Strong cash generation of $20.7 million in fiscal 2025 third quarter, the result of cash earnings and improved working capital velocity
•
Healthy balance sheet with limited debt and $62 million of cash provides safeguard against near term tariff turmoil and tempering market conditions
•
Net income attributable to STRATTEC Security Corporation was $5.4 million, or $1.32 per diluted share, compared with $1.5 million, or $0.37 per diluted share, in the year ago quarter
•
Delivered adjusted EBITDA 1 of $12.9 million, or 8.9% of sales, compared with $6.2 million, or 4.4%, in prior-year period
•
Further advanced cost reduction efforts with restructuring of Mexico operations in March; bringing total annualized restructuring savings to approximately $5 million including changes in Milwaukee operations in January

MILWAUKEE, WI, May 8, 2025 – STRATTEC SECURITY CORPORATION (Nasdaq: STRT) (“Company”), a leading provider of smart vehicle access, security and authorization solutions for the global automotive industry, reported financial results for its third quarter of fiscal year 2025, which ended March 30, 2025.

Jennifer Slater, President and CEO of STRATTEC, said, “We delivered another strong quarter as the actions we are taking to transform STRATTEC into a more predictable, higher performing business are flowing through to our bottom line. During the quarter, we captured margin accretive pricing, benefited from both increased and higher value content on winning platforms and improved operational performance.”

Addressing the evolving state of global trade, Ms. Slater added, “The tariff situation has created a rapidly changing environment with significant unknowns. Nevertheless, given what we know today with the USMCA exemption, we estimate that the annual impact of tariffs is approximately $9 million to $12 million of incremental costs, prior to any mitigation efforts. We have been moving quickly to implement tariff mitigation actions to reduce the impact on profit margins including shifting sources within our supply chain, passing through costs to customers and changing logistics processes with customers.”

“We have been making measurable change within the organization to drive cost savings which in the short term will help offset these tariff costs as we work through mitigation actions. In the long term, we believe these actions will make STRATTEC a better business. In total, we have reduced our headcount by 12% in the first nine months of fiscal 2025, including recent restructuring actions we have taken in Mexico. We believe there is additional potential for cost savings through modernization and rethinking our manufacturing and assembly processes. We are focused on instilling a culture of operational excellence to create an enterprise that can deliver stronger earnings power,” Ms. Slater concluded.

STRATTEC SECURITY CORPORATION Generated $20.7 million in Cash from Operations in Fiscal 2025 Third Quarter

May 8, 2025

Page 2

FY 2025 Third Quarter Financial Summary
(compared with prior-year period, except where otherwise noted)

Net sales were $144.1 million, an increase of $3.3 million, or 2.4%. Sales growth was driven by $2.5 million of price increases, $2.2 million in favorable product mix, and $1.6 million in net new program launches. This more than offset a $3.0 million reduction in sales volumes for existing platforms.

Gross profit increased $8.4 million to $23.1 million, while gross margin expanded 560 basis points. The improvement was due in part to $4.4 million, or 305 basis points, of favorable foreign currency exchange. The remainder of the increase was the result of pricing actions and materials and labor cost improvements which more than offset the $0.8 million increase in tariff expenses as a result of recent changes in U.S. tariff policy.

Engineering, selling and administrative (“ES&A”) expenses increased $3.3 million, or 25.9%, to $16.0 million. The increase reflected continued investments in the business, $1.2 million of higher incentive and bonus compensation as a result of better than expected performance and $0.8 million in restructuring charges.

A slight increase in interest expense was more than offset by the $0.4 million increase in interest income on higher cash balances and the $0.2 million improvement in other expense related to foreign currency forward contracts.

Net income attributable to STRATTEC was $5.4 million, or $1.32 per diluted share, compared with $1.5 million, or $0.37 per diluted share, in the prior-year period. On an adjusted basis, net income attributable to STRATTEC 1 grew 315% to $6.1 million. Adjusted diluted earnings per share 1 increased $1.13, or 305%, to $1.50. Adjusted EBITDA 1 for the quarter was $12.9 million compared with $6.2 million in the prior-year period. Expanded gross margin on higher sales more than offset investments in ES&A which led to adjusted EBITDA margin of 8.9%, a 450 basis point improvement over the third quarter of fiscal 2024.

Restructuring and Business Transformation Progress

During the third quarter of fiscal 2025, the Company made continued progress on improving its cost structure, by completing the elimination of a production shift in its Milwaukee operations and implementing a restructuring action in its operations in Mexico. The cash cost of the Mexico restructuring actions was $1.6 million, which will result in expected annual savings of $4.5 million. Collectively, restructuring activities implemented in fiscal 2025 are now expected to generate approximately $5 million of annual cost reductions, with savings amounts expected to be phased in and fully realized by the first quarter of fiscal 2026.

Balance Sheet and Liquidity

Increased cash earnings and improved working capital management delivered $20.7 million in cash from operations in the third quarter of fiscal 2025, compared with a use of cash in the prior-year period. Cash from operations for the nine-month period were $41.5 million.

At March 30, 2025, the Company had $62.1 million in cash and cash equivalents, up $19.5 million from the end of the second quarter of fiscal 2025. The Company had no borrowings outstanding under its $40 million revolving credit agreement, while our joint venture had $13.0 million outstanding under its $20 million revolving credit agreement.

Third Quarter Fiscal Year 2025 Webcast and Conference Call

The Company will host a conference call and webcast tomorrow, Friday, May 9, 2025, at 9:00 am Eastern Time to review the financial and operating results for the period ended March 30, 2025, and provide an update on its transformation progress. A question-and-answer session will follow.

You can access the call by phoning (201) 689-8470 or find the webcast and accompanying slide presentation at investors.strattec.com.

1 Refer to “Use of Non-GAAP Financial Metrics and Additional Financial Information” as well as accompanying reconciliations to GAAP

STRATTEC SECURITY CORPORATION Generated $20.7 million in Cash from Operations in Fiscal 2025 Third Quarter

May 8, 2025

Page 3

A telephonic replay will be available from 12:00 p.m. ET on the day of the call through Friday, May 23, 2025. To listen to the archived call, dial (412) 317-6671 and enter a replay PIN 13752650. The webcast replay will be available on the Investor Relations section of the Company’s website where a transcript will be posted once available.

About STRATTEC

STRATTEC is a leading global provider of advanced automotive access, security & authorization and select user interface solutions. With a history spanning over 110 years, STRATTEC has consistently been at the forefront of innovation in vehicle security, transitioning from mechanical to integrated electro-mechanical systems. The Company serves a broad range of customers, including leading automotive OEMs, offering power access solutions and advanced security systems that include door handles, lift gates, latches, and key fobs.

For more information on STRATTEC and its solutions, visit www.strattec.com.

Safe Harbor Statement
Certain statements contained in this release contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words or phrases such as “anticipate,” “believe,” “could,” “expect,” “intend,” “may,” “planned,” “potential,” “should,” “will,” and “would.” Such forward-looking statements are inherently subject to many uncertainties in the Company’s operations and business environment. These uncertainties include general economic conditions, in particular, relating to the automotive industry, consumer demand for the Company’s and its customers’ products, competitive and technological developments, customer purchasing actions, changes in warranty provisions and customer product recall policies, work stoppages at the Company or at the location of its key customers as a result of labor disputes, foreign currency fluctuations, uncertainties stemming from U.S. trade policies, tariffs and reactions to the same from foreign countries, matters adversely impacting the timing and availability of component parts and raw materials needed for the production of the Company’s products and the products of its customers and fluctuations in costs of operation. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are only made as of the date of this press release and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances occurring after the date of this release. In addition, such uncertainties and other operational matters are discussed further in the Company’s quarterly and annual filings with the Securities and Exchange Commission.

Use of Non-GAAP Financial Metrics and Additional Financial Information
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, STRATTEC provides Adjusted Non-GAAP information as additional information for its operating results. References to Adjusted Non-GAAP information are to non-GAAP financial measures. These measures are not required by, in accordance with, or an alternative for, GAAP and may be different from similarly titled non-GAAP financial measures used by other companies. STRATTEC’s management uses these measures to make strategic decisions, establish budget plans and forecasts, identify trends affecting STRATTEC’s business, and evaluate performance. Management believes that providing these non-GAAP financial measures to investors, as a supplement to GAAP financial measures, will help investors evaluate STRATTEC’s core operating and financial performance and business trends consistent with how management evaluates such performance and trends. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures.

Contact:

Deborah K. Pawlowski
Alliance Advisors IR
Phone: 716-843-3908
Email: dpawlowski@allianceadvisors.com

FINANCIAL TABLES FOLLOW

STRATTEC SECURITY CORPORATION Generated $20.7 million in Cash from Operations in Fiscal 2025 Third Quarter

May 8, 2025

Page 4

STRATTEC SECURITY CORPORATION |
Condensed Results of Operations |
(In Thousands, except per share amounts) |
(Unaudited) |
| Three Months Ended |  |  | Nine Months Ended |
| March 30, 2025 |  |  | March 31, 2024 |  |  | March 30, 2025 |  |  | March 31, 2024 |
Net sales | $ | 144,082 |  |  | $ | 140,773 |  |  | $ | 413,053 |  |  | $ | 394,711 |
Cost of goods sold |  | 120,977 |  |  |  | 126,089 |  |  |  | 353,876 |  |  |  | 347,810 |
Gross profit |  | 23,105 |  |  |  | 14,684 |  |  |  | 59,177 |  |  |  | 46,901 |
Gross margin |  | 16.0 | % |  |  | 10.4 | % |  |  | 14.3 | % |  |  | 11.9 | %
Engineering, selling and administrative expenses |  | 16,020 |  |  |  | 12,725 |  |  |  | 44,895 |  |  |  | 38,778 |
Income from operations |  | 7,085 |  |  |  | 1,959 |  |  |  | 14,282 |  |  |  | 8,123 |
Operating margin |  | 4.9 | % |  |  | 1.4 | % |  |  | 3.5 | % |  |  | 2.1 | %
Interest expense |  | (243 | ) |  |  | (222 | ) |  |  | (795 | ) |  |  | (661 | )
Investment income |  | 529 |  |  |  | 143 |  |  |  | 1,286 |  |  |  | 337 |
Other (expense) income, net |  | (16 | ) |  |  | (208 | ) |  |  | (369 | ) |  |  | 759 |
Income before provision for income taxes and non-controlling interest |  | 7,355 |  |  |  | 1,672 |  |  |  | 14,404 |  |  |  | 8,558 |
Provision for income taxes |  | 1,644 |  |  |  | 546 |  |  |  | 3,547 |  |  |  | 2,197 |
Net income |  | 5,711 |  |  |  | 1,126 |  |  |  | 10,857 |  |  |  | 6,361 |
Net income (loss) attributable to non- controlling interest |  | 315 |  |  |  | (380 | ) |  |  | 439 |  |  |  | (332 | )
Net income attributable to STRATTEC SECURITY CORPORATION | $ | 5,396 |  |  | $ | 1,506 |  |  | $ | 10,418 |  |  | $ | 6,693 |
Earnings per share attributable to STRATTEC SECURITY CORPORATION: |  |  |  |  |  |  |  |  |  |  |
Basic | $ | 1.34 |  |  | $ | 0.38 |  |  | $ | 2.59 |  |  | $ | 1.69 |
Diluted | $ | 1.32 |  |  | $ | 0.37 |  |  | $ | 2.56 |  |  | $ | 1.67 |
Weighted Average shares outstanding: |  |  |  |  |  |  |  |  |  |  |
Basic |  | 4,039 |  |  |  | 3,988 |  |  |  | 4,026 |  |  |  | 3,971 |
Diluted |  | 4,085 |  |  |  | 4,017 |  |  |  | 4,067 |  |  |  | 3,996 |

STRATTEC SECURITY CORPORATION Generated $20.7 million in Cash from Operations in Fiscal 2025 Third Quarter

May 8, 2025

Page 5

STRATTEC SECURITY CORPORATION |
Condensed Balance Sheet Data |
(In Thousands, except share amounts) |
(Unaudited) |
| March 30, 2025 |  |  | June 30, 2024 |
ASSETS |  |  |  |  |
Current Assets: |  |  |  |  |
Cash and cash equivalents | $ | 62,106 |  |  | $ | 25,410 |
Receivables, net |  | 109,160 |  |  |  | 99,297 |
Inventories: |  |  |  |  |
Finished products |  | 14,563 |  |  |  | 19,833 |
Work in process |  | 12,228 |  |  |  | 15,461 |
Purchased materials |  | 48,800 |  |  |  | 46,355 |
Inventories, net |  | 75,591 |  |  |  | 81,649 |
Pre-production costs |  | 9,740 |  |  |  | 22,173 |
Value-added tax recoverable |  | 22,342 |  |  |  | 19,684 |
Other current assets |  | 8,276 |  |  |  | 5,601 |
Total current assets |  | 287,215 |  |  |  | 253,814 |
Deferred income taxes |  | 17,084 |  |  |  | 17,593 |
Other long-term assets |  | 5,277 |  |  |  | 6,698 |
Net property, plant and equipment |  | 77,816 |  |  |  | 86,184 |
| $ | 387,392 |  |  | $ | 364,289 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |  |
Current Liabilities: |  |  |  |  |
Accounts payable | $ | 72,582 |  |  | $ | 54,911 |
Accrued Liabilities: |  |  |  |  |
Payroll and benefits |  | 19,431 |  |  |  | 28,953 |
Value-added tax payable |  | 10,844 |  |  |  | 9,970 |
Environmental |  | 1,390 |  |  |  | 1,390 |
Warranty |  | 10,745 |  |  |  | 10,695 |
Other current liabilities |  | 8,312 |  |  |  | 12,369 |
Total current liabilities |  | 123,304 |  |  |  | 118,288 |
Borrowings under credit facilities |  | 13,000 |  |  |  | 13,000 |
Postemployment obligations |  | 12,076 |  |  |  | 2,429 |
Other long-term liabilities |  | 4,411 |  |  |  | 4,957 |
Shareholders’ Equity: |  |  |  |  |
Common stock, authorized 18,000,000 shares, $.01 par value, 7,635,883 issued shares at March 30, 2025 and 7,586,920 issued shares at June 30, 2024 |  | 76 |  |  |  | 76 |
Capital in excess of par value |  | 102,888 |  |  |  | 101,024 |
Retained earnings |  | 261,030 |  |  |  | 250,612 |
Accumulated other comprehensive loss |  | (17,836 | ) |  |  | (15,689 | )
Less: treasury stock, at cost (3,596,918 shares at March 30, 2025 and 3,598,126 shares at June 30, 2024) |  | (135,459 | ) |  |  | (135,478 | )
Total STRATTEC SECURITY CORPORATION shareholders’ equity |  | 210,699 |  |  |  | 200,545 |
Non-controlling interest |  | 23,902 |  |  |  | 25,070 |
Total shareholders’ equity |  | 234,601 |  |  |  | 225,615 |
| $ | 387,392 |  |  | $ | 364,289 |

STRATTEC SECURITY CORPORATION Generated $20.7 million in Cash from Operations in Fiscal 2025 Third Quarter

May 8, 2025

Page 6

STRATTEC SECURITY CORPORATION Generated $20.7 million in Cash from Operations in Fiscal 2025 Third Quarter

May 8, 2025

Page 7

STRATTEC SECURITY CORPORATION |
Condensed Cash Flow Statement Data |
(In Thousands) |
(Unaudited) |
|  | Three Months Ended |  |  | Nine Months Ended |
|  | March 30, 2025 |  |  | March 31, 2024 |  |  | March 30, 2025 |  |  | March 31, 2024 |
CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |  |  |  |  |  |  |  |  |  |
Net income |  | $ | 5,711 |  |  | $ | 1,126 |  |  | $ | 10,857 |  |  | $ | 6,361 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Depreciation |  |  | 3,746 |  |  |  | 4,059 |  |  |  | 10,952 |  |  |  | 12,774 |
Foreign currency transaction loss (gain) |  |  | 141 |  |  |  | 475 |  |  |  | (1,052 | ) |  |  | 126 |
Unrealized (gain) loss on peso forward contracts |  |  | (705 | ) |  |  | 222 |  |  |  | 231 |  |  |  | (604 | )
Stock-based compensation expense |  |  | 760 |  |  |  | 240 |  |  |  | 1,839 |  |  |  | 1,224 |
Loss on settlement of postemployment obligation |  |  | — |  |  |  | — |  |  |  | 283 |  |  |  | — |
Change in operating assets and liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Receivables |  |  | (17,616 | ) |  |  | (26,685 | ) |  |  | (10,237 | ) |  |  | (7,507 | )
Inventories |  |  | 5,920 |  |  |  | 10,827 |  |  |  | 6,058 |  |  |  | (1,015 | )
Prepaid and other assets |  |  | (1,850 | ) |  |  | (4,494 | ) |  |  | 5,994 |  |  |  | (16,898 | )
Accounts payable |  |  | 20,720 |  |  |  | 9,339 |  |  |  | 16,730 |  |  |  | (7,102 | )
Accrued liabilities |  |  | 3,632 |  |  |  | 4,337 |  |  |  | (948 | ) |  |  | 4,747 |
Other, net |  |  | 261 |  |  |  | 245 |  |  |  | 794 |  |  |  | 671 |
Net cash provided by (used in) operating activities |  |  | 20,720 |  |  |  | (309 | ) |  |  | 41,501 |  |  |  | (7,223 | )
CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |  |  |  |  |  |  |  |  |  |
Proceeds from sale of interest in joint ventures |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,000 |
Purchase of property, plant and equipment |  |  | (1,170 | ) |  |  | (1,672 | ) |  |  | (4,160 | ) |  |  | (6,065 | )
Net cash used in investing activities |  |  | (1,170 | ) |  |  | (1,672 | ) |  |  | (4,160 | ) |  |  | (4,065 | )
CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |  |  |  |  |  |  |  |  |  |
Borrowings under credit facilities |  |  | — |  |  |  | — |  |  |  | 3,000 |  |  |  | 2,000 |
Repayment of borrowings under credit facilities |  |  | — |  |  |  | — |  |  |  | (3,000 | ) |  |  | (2,000 | )
Employee stock purchases |  |  | 16 |  |  |  | 18 |  |  |  | 44 |  |  |  | 55 |
Net cash provided by financing activities |  |  | 16 |  |  |  | 18 |  |  |  | 44 |  |  |  | 55 |
Foreign currency impact on cash |  |  | (85 | ) |  |  | (18 | ) |  |  | (689 | ) |  |  | 256 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |  |  | 19,481 |  |  |  | (1,981 | ) |  |  | 36,696 |  |  |  | (10,977 | )
CASH AND CASH EQUIVALENTS |  |  |  |  |  |  |  |  |  |  |  |
Beginning of period |  |  | 42,625 |  |  |  | 11,575 |  |  |  | 25,410 |  |  |  | 20,571 |
End of period |  | $ | 62,106 |  |  | $ | 9,594 |  |  | $ | 62,106 |  |  | $ | 9,594 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |  |  |  |  |  |  |  |  |  |  |  |
Cash paid during the period for: |  |  |  |  |  |  |  |  |  |  |  |
Income taxes |  | $ | 596 |  |  | $ | 1,731 |  |  | $ | 9,135 |  |  | $ | 3,177 |
Interest |  | $ | 172 |  |  | $ | 219 |  |  | $ | 731 |  |  | $ | 659 |
Non-cash investing activities: |  |  |  |  |  |  |  |  |  |  |  |

STRATTEC SECURITY CORPORATION Generated $20.7 million in Cash from Operations in Fiscal 2025 Third Quarter

May 8, 2025

Page 8

Change in capital expenditures in accounts payable |  | $ | 1,176 |  |  | $ | (89 | ) |  | $ | 726 |  |  | $ | (264 | )

STRATTEC SECURITY CORPORATION Generated $20.7 million in Cash from Operations in Fiscal 2025 Third Quarter

May 8, 2025

Page 9

STRATTEC SECURITY CORPORATION ("STRATTEC") |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Reconciliation of GAAP to Non-GAAP Financial Measures |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(in thousands, except per share amounts) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Fiscal 2024 |  |  | Fiscal 2025 |
|  | Q1 |  | Q2 |  | Q3 |  | Q4 |  | Total |  |  | Q1 |  | Q2 |  | Q3 |  | Q4 |  | Total |
ADJUSTED NET SALES: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net Sales (GAAP) |  |  | 135,406 |  |  | 118,532 |  |  | 140,773 |  |  | 143,055 |  | $ | 537,766 |  |  |  | 139,052 |  |  | 129,919 |  |  | 144,082 |  |  | - |  | $ | 413,053 |
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | - |  |  |  |  |
Retroactive FY23 one-time pricing recovery |  |  | (7,950 | ) |  | (1,551 | ) |  | (397 | ) |  | 175 |  |  | (9,723 | ) |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |
Adjusted Sales (Non-GAAP) |  |  | 127,456 |  |  | 116,981 |  |  | 140,376 |  |  | 143,230 |  |  | 528,043 |  |  |  | 139,052 |  |  | 129,919 |  |  | 144,082 |  |  | - |  |  | 413,053 |
ADJUSTED EBITDA: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income attributable to STRATTEC (GAAP) |  | $ | 4,165 |  | $ | 1,022 |  | $ | 1,506 |  | $ | 9,620 |  | $ | 16,313 |  |  | $ | 3,703 |  | $ | 1,319 |  | $ | 5,396 |  | $ | - |  | $ | 10,418 |
Net income (loss) attributable to non-controlling interest |  |  | 290 |  |  | (242 | ) |  | (380 | ) |  | 447 |  |  | 115 |  |  |  | 45 |  |  | 79 |  |  | 315 |  |  | - |  |  | 439 |
Provision for income tax |  |  | 1,387 |  |  | 264 |  |  | 546 |  |  | 1,578 |  |  | 3,775 |  |  |  | 1,498 |  |  | 405 |  |  | 1,644 |  |  | - |  |  | 3,547 |
Other (income) expense, net |  |  | 131 |  |  | (1,098 | ) |  | 208 |  |  | (1,958 | ) |  | (2,717 | ) |  |  | (129 | ) |  | 482 |  |  | 16 |  |  | - |  |  | 369 |
Investment and interest income |  |  | (87 | ) |  | (107 | ) |  | (143 | ) |  | (235 | ) |  | (572 | ) |  |  | (349 | ) |  | (408 | ) |  | (529 | ) |  | - |  |  | (1,286 | )
Interest expense |  |  | 220 |  |  | 219 |  |  | 222 |  |  | 239 |  |  | 900 |  |  |  | 295 |  |  | 257 |  |  | 243 |  |  | - |  |  | 795 |
Income from operations |  |  | 6,106 |  |  | 58 |  |  | 1,959 |  |  | 9,691 |  |  | 17,814 |  |  |  | 5,063 |  |  | 2,134 |  |  | 7,085 |  |  | - |  |  | 14,282 |
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

STRATTEC SECURITY CORPORATION Generated $20.7 million in Cash from Operations in Fiscal 2025 Third Quarter

May 8, 2025

Page 10

Depreciation |  |  | 4,385 |  |  | 4,330 |  |  | 4,059 |  |  | 3,773 |  | $ | 16,547 |  |  |  | 3,662 |  |  | 3,544 |  |  | 3,746 |  |  | - |  | $ | 10,952 |
Non-cash stock-based compensation |  |  | 505 |  |  | 479 |  |  | 240 |  |  | 243 |  |  | 1,467 |  |  |  | 188 |  |  | 891 |  |  | 760 |  |  | - |  |  | 1,839 |
Restructuring and similar charges |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  |  | - |  |  | 265 |  |  | 809 |  |  | - |  |  | 1,074 |
Retroactive FY23 one-time pricing recovery, net |  |  | (7,078 | ) |  | (641 | ) |  | (298 | ) |  | 24 |  |  | (7,993 | ) |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |
Executive transition costs |  |  | - |  |  | 774 |  |  | 211 |  |  | 73 |  |  | 1,058 |  |  |  | 941 |  |  | 921 |  |  | 214 |  |  | - |  |  | 2,076 |
Business transformation costs |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  |  | 74 |  |  | 215 |  |  | 259 |  |  | - |  |  | 548 |
|  |  | (2,188 | ) |  | 4,942 |  |  | 4,212 |  |  | 4,113 |  |  | 11,079 |  |  |  | 4,865 |  |  | 5,836 |  |  | 5,788 |  |  | - |  |  | 16,489 |
Adjusted EBITDA (Non-GAAP) |  | $ | 3,918 |  | $ | 5,000 |  | $ | 6,171 |  | $ | 13,804 |  | $ | 28,893 |  |  | $ | 9,928 |  | $ | 7,970 |  | $ | 12,873 |  | $ | - |  | $ | 30,771 |
Adjusted EBITDA as a % of Adjusted Net Sales |  |  | 3.1 | % |  | 4.3 | % |  | 4.4 | % |  | 9.6 | % |  | 5.5 | % |  |  | 7.1 | % |  | 6.1 | % |  | 8.9 | % |  |  |  | 7.4 | %
ADJUSTED NET INCOME AND EARNINGS/(LOSS) PER SHARE: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income attributable to STRATTEC (GAAP) |  | $ | 4,165 |  | $ | 1,022 |  | $ | 1,506 |  | $ | 9,620 |  | $ | 16,313 |  |  | $ | 3,703 |  | $ | 1,319 |  | $ | 5,396 |  | $ | - |  | $ | 10,418 |
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Restructuring and similar charges |  |  | 265 |  |  | 3 |  |  | - |  |  | 63 |  |  | 331 |  |  |  | - |  |  | 265 |  |  | 809 |  |  | - |  |  | 1,074 |
Retroactive FY23 one-time pricing recovery, net |  |  | (7,078 | ) |  | (641 | ) |  | (298 | ) |  | 24 |  |  | (7,993 | ) |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |
Executive transition costs |  |  | - |  |  | 973 |  |  | 211 |  |  | 73 |  |  | 1,257 |  |  |  | 1,224 |  |  | 1,225 |  |  | 214 |  |  | - |  |  | 2,663 |
Business transformation costs |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  |  | 74 |  |  | 215 |  |  | 259 |  |  | - |  |  | 548 |

STRATTEC SECURITY CORPORATION Generated $20.7 million in Cash from Operations in Fiscal 2025 Third Quarter

May 8, 2025

Page 11

Non-controlling interest impact on above adjustments |  |  | 1,014 |  |  | 181 |  |  | 55 |  |  | 22 |  |  | 1,272 |  |  |  | - |  |  | - |  |  | (160 | ) |  | - |  |  | (160 | )
Tax effect on above adjustments |  |  | 1,305 |  |  | (116 | ) |  | 7 |  |  | (41 | ) |  | 1,155 |  |  |  | (292 | ) |  | (384 | ) |  | (376 | ) |  | - |  |  | (1,052 | )
|  |  | (4,494 | ) |  | 400 |  |  | (25 | ) |  | 141 |  |  | (3,978 | ) |  |  | 1,006 |  |  | 1,321 |  |  | 746 |  |  | - |  |  | 3,073 |
Adjusted Net Income/(Loss) attributable to STRATTEC (Non-GAAP) |  | $ | (329 | ) | $ | 1,422 |  | $ | 1,481 |  | $ | 9,761 |  | $ | 12,335 |  |  | $ | 4,709 |  | $ | 2,640 |  | $ | 6,142 |  | $ | - |  | $ | 13,491 |
Weighted Average Basic Shares Outstanding |  |  | 3,948 |  |  | 3,976 |  |  | 3,988 |  |  | 3,988 |  |  | 3,975 |  |  |  | 4,005 |  |  | 4,035 |  |  | 4,039 |  |  | - |  |  | 4,026 |
Weighted Average Diluted Shares Outstanding |  |  | 3,974 |  |  | 3,998 |  |  | 4,017 |  |  | 4,027 |  |  | 4,004 |  |  |  | 4,046 |  |  | 4,070 |  |  | 4,085 |  |  | - |  |  | 4,067 |
Diluted earnings per share (GAAP) |  | $ | 1.05 |  | $ | 0.26 |  | $ | 0.37 |  | $ | 2.39 |  | $ | 4.07 |  |  | $ | 0.92 |  | $ | 0.32 |  | $ | 1.32 |  | $ | - |  | $ | 2.56 |
Adjusted dilutive earnings/(loss) per share (Non-GAAP) |  | $ | (0.08 | ) | $ | 0.36 |  | $ | 0.37 |  | $ | 2.42 |  | $ | 3.08 |  |  | $ | 1.16 |  | $ | 0.65 |  | $ | 1.50 |  | $ | - |  | $ | 3.32 |