Q1 FY2027
Filed Oct 29, 2026Strattec Transformation Continues to Deliver Strong Cash Generation; Generated $10.8 Million in Cash from Operations in First Quarter Fiscal 2027
Net sales, gross profit, operating income, net income, diluted EPS and adjusted EBITDA declined from the prior-year period, while gross margin improved sequentially, operating cash flow remained positive and the company ended the quarter with $111.8 million in cash and no debt.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net salesGAAP | $147.2M | – | a decrease of $5.2 million, or 3% |
| Cost of goods soldGAAP | 122,882 | – | – |
| Gross profitGAAP | $24.32M | – | – |
| Gross marginGAAP | 16.5% | – | contracted 80 basis points |
| Adjusted gross profitnon-GAAP | $24.42M | – | – |
| Adjusted gross marginnon-GAAP | 16.6% | – | – |
| Selling, administrative and engineering expensesGAAP | $17.89M | – | – |
| Selling, administrative and engineering expenses as a % of Net SalesGAAP | 12.2% | – | – |
| Adjusted selling, administrative and engineering expensesnon-GAAP | $15.04M | – | – |
| Adjusted selling, administrative and engineering expenses as a % of Net Salesnon-GAAP | 10.2% | – | – |
| Income from operationsGAAP | $6.42M | – | – |
| Operating marginGAAP | 4.4% | – | – |
| Adjusted operating incomenon-GAAP | $9.38M | – | – |
| Adjusted operating income as a % of Net Salesnon-GAAP | 6.4% | – | – |
| Interest incomeGAAP | $989K | – | increased $0.1 million |
| Interest expenseGAAP | −$37K | – | declined $0.1 million |
| Other expense, netGAAP | −$183K | – | – |
| Income before provision for income taxes and non-controlling interestGAAP | $7.19M | – | – |
| Income tax expenseGAAP | $1.88M | – | – |
| Effective tax rateGAAP | 26.2% | – | – |
| Net incomeGAAP | $5.31M | – | – |
| Net income attributable to non-controlling interestGAAP | $478K | – | – |
| Net income attributable to StrattecGAAP | $4.83M | – | – |
| Basic earnings per share attributable to StrattecGAAP | $1.22 | – | – |
| Diluted earnings per share attributable to StrattecGAAP | $1.19 | – | – |
| Adjusted net income attributable to Strattecnon-GAAP | $7.50M | – | – |
| Adjusted diluted earnings per sharenon-GAAP | $1.85 | – | – |
| Adjusted EBITDAnon-GAAP | $13.49M | – | – |
| Adjusted EBITDA as a % of Net Salesnon-GAAP | 9.2% | – | – |
| Net cash provided by operating activitiesGAAP | $10.77M | – | – |
| Purchase of property, plant and equipmentGAAP | −$1.19M | – | – |
| Net cash used in investing activitiesGAAP | −$1.19M | – | – |
| Net cash used in financing activitiesGAAP | −$6.00M | – | – |
| Net increase in cash and cash equivalentsGAAP | $3.52M | – | – |
| Cash and cash equivalentsGAAP | $111.8M | – | – |
| Receivables, netGAAP | $95.12M | – | – |
| Inventories, netGAAP | $64.90M | – | – |
| Property, plant and equipment, netGAAP | $67.32M | – | – |
| Total assetsGAAP | $381.5M | – | – |
| Total liabilitiesGAAP | $116.5M | – | – |
| Total Strattec shareholders’ equityGAAP | $237.9M | – | – |
| Total Shareholders' EquityGAAP | $265.1M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- Repurchased 67,904 shares of common stock for $5.0 million during the quarter.
- $35.0 million remained available under the Company’s share repurchase authorization.
- Repurchases of common stock under share repurchase program were $(4,973).
What drove it
- Pricing of $1.0 million somewhat offset the $6.2 million impact of lower customer production volumes.
- Pricing, $0.9 million in restructuring savings, lower overhead costs and better mix were more than offset by lower volume, elevated premium freight and annual labor cost increases.
- Unfavorable foreign currency exchange rates of $1.4 million had a 90 basis point negative impact to gross margin.
- The increase in selling, administrative and engineering expenses was due to $2.4 million in business development expenses.
- The company took actions in its Mexico operations expected to generate $1.3 million in annualized savings.
Concerns
- Net sales decreased by $5.2 million, or 3%, from the prior-year period.
- Gross margin contracted 80 basis points to 16.5% from 17.3% in the prior-year period.
- Income from operations was $6,423 compared with $10,447 in the prior-year period.
- Net income attributable to Strattec was $4,833 compared with $8,529 in the prior-year period.
- Adjusted EBITDA was $13,492, or 9.2% of net sales, compared with $15,551, or 10.2% of net sales, in the prior-year period.
- The effective tax rate was 26.2%, compared with 21.6% in the prior-year period, primarily reflecting discrete tax items.
- Additional acquisition-related expenses may be incurred in subsequent periods, with the amount and timing dependent on the progress of acquisition activities.
What to watch
- Progress in supply chain improvements and automation expected to support margin improvement.
- Realization of the $1.3 million in annualized savings from Mexico operational actions.
- Customer production volumes, premium freight, annual labor cost increases and foreign currency exchange rates.
- The amount and timing of additional acquisition-related expenses and the company’s strategic acquisition funnel.
- Whether adjusted SAE remains within the company’s target of SAE being 10% to 11% of sales.
Balance sheet and cash flow
- Cash and cash equivalents were $111.8 million and the Company had no debt at September 27, 2026.
- Cash and cash equivalents were $108.2 million at the end of fiscal 2026 and $90.5 million at the end of the first quarter of fiscal 2026.
- Cash provided by operating activities was $10.8 million, compared with $11.3 million in the prior-year period.
- Purchase of property, plant and equipment was $(1,185).
- Net cash used in financing activities was $(5,997).
Analysis
Strattec reported first-quarter fiscal 2027 net sales of $147.2 million, down $5.2 million, or 3%, from the prior-year period. Pricing of $1.0 million somewhat offset a $6.2 million impact from lower customer production volumes. The filing did not report revenue by operating segment. Gross profit was $24.3 million versus $26.3 million, and gross margin contracted 80 basis points to 16.5%. Foreign currency exchange rates had a $1.4 million and 90 basis point negative impact to gross margin.
Profitability declined year over year but improved sequentially on the reported margin measure. Income from operations was $6.4 million versus $10.4 million, while net income attributable to Strattec was $4.8 million, or $1.19 per diluted share, compared with $8.5 million, or $2.07 per diluted share. The effective tax rate increased to 26.2% from 21.6%, primarily reflecting discrete tax items. Adjusted net income attributable to Strattec was $7.5 million and adjusted diluted EPS was $1.85, versus $9.2 million and $2.22, respectively.
Adjusted EBITDA was $13.5 million, or 9.2% of net sales, compared with $15.6 million, or 10.2% of net sales. The 9.2% adjusted EBITDA margin was above the 8.3% reported for the fourth quarter of fiscal 2026. Gross margin also improved from 15.6% in the fourth quarter of fiscal 2026 to 16.5%, despite lower sales. Adjusted SAE was $15.0 million, or 10.2% of sales, within the company’s stated target of 10% to 11% of sales, while GAAP SAE increased because of $2.4 million in business development expenses.
Cash generation and liquidity remained key offsets to the earnings decline. Cash provided by operating activities was $10.8 million, compared with $11.3 million in the prior-year period. Strattec ended the quarter with $111.8 million in cash and cash equivalents and no debt. It repurchased 67,904 shares for $5.0 million, leaving $35.0 million available under its authorization. The company described an active acquisition funnel and stated that additional acquisition-related expenses may occur in subsequent periods.
The release provided no formal financial outlook. Management identified lower customer production volumes, premium freight, labor costs and foreign currency as current pressures, while citing pricing, restructuring savings, lower overhead costs and better mix as offsets. It also cited Mexico actions expected to generate $1.3 million in annualized savings and ongoing supply chain and automation opportunities as components of the transformation effort.
Management, verbatim
Our first quarter financial results demonstrate the impact of our transformation efforts, which enabled us to achieve a 9.2% adjusted EBITDA margin on $147.2 million in net sales.
Jennifer Slater, President and CEO of Strattec
During the quarter, we took actions in our Mexico operations that are expected to generate $1.3 million in annualized savings.
Jennifer Slater, President and CEO of Strattec
Importantly, the strength of our balance sheet provides us the flexibility to invest in our business while also returning capital to shareholders and pursuing strategic growth opportunities.
Jennifer Slater, President and CEO of Strattec
Not in the filing
stated, not guessed- Formal forward guidance for revenue, gross margin, operating expenses, tax rate, EPS, adjusted EBITDA, cash flow or capital expenditures was not provided.
- Previous-period outlook was not provided.
- Revenue by operating segment was not provided.
- Free cash flow was not reported.
- Dividend information was not reported.
- A balance-sheet debt line item and debt amount were not provided; the release states that the company had no debt.
- Prior-year balance-sheet comparatives were not provided for receivables, inventories, property, plant and equipment, total assets, total liabilities and shareholders’ equity.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.