STRATTEC SECURITY CORP (STRT) SEC Filings & Earnings Calls

Cyclicality and Customer Concentration

“our business is inherently cyclical and tied to the prospects of the 'Big Three' domestic auto manufacturers” · word for word

Competitive Supplier Landscape

“our long-term success continues to depend on our ability to weather those inevitable fluctuations in demand and win new and replacement platform mandates in a competitive supplier landscape.” · word for word

Customer Concentration

“A significant portion of our sales are to General Motors Company, Ford Motor Company, and Stellantis.” · word for word

EV Program Cancellation

“Sales volumes reflected a $9.5 million increase on existing platforms and $3.3 million of net new program launches, which were partially offset by $9.5 million in reduced sales associated with customer cancelled electric vehicle ("EV") programs compared to the prior‑year.” · word for word

Foreign Exchange Exposure

“Increased conversion costs were due to higher sales volumes and a $6.5 million headwind from changes in foreign currency exchange rates.” · word for word

Foreign exchange pressure and tariff impact on margins

“Impacted by foreign exchange pressure and the effect of tariffs” · word for word

Customer cancelled EV programs causing volume decline

“$3.2 million related to customer cancelled EV programs” · word for word

Near-term demand uncertainty

“Near-term environment remains uncertain and we have much work to do to secure future OEM vehicle platforms” · word for word

Customer Concentration

“Sales to General Motors, Ford, and Stellantis accounted for 64% of total net sales in Q3 2026.”

EV Program Cancellation Impact

“Certain customer programs were cancelled or significantly reduced as OEMs adjusted electric vehicle production plans, resulting in a $3.5 million reduction in year-over-year third quarter sales.” · word for word

Tariff Cost Exposure

“Year-to-date incremental tariff costs of $1.9 million, partially offset by $2.6 million customer recoveries.”

Foreign Exchange Risk

“Unfavorable changes in foreign currency exchange rates impacted gross profit by $2.5 million in Q3 and $4.6 million YTD.” · word for word

Automotive demand weakness; EV program cancellations; tariff costs; FX headwinds; transformation execution risk.

“Lower sales were the result of $7.7 million in lower volume including $3.4 million lower sales related to customer EV program cancellations... $0.3 million of incremental tariff costs... unfavorable changes in foreign exchange rates.”

Customer Concentration

“Sales to General Motors, Ford, and Stellantis represented 65% of total net sales in Q2 FY2026.”

Tariff Exposure

“Incremental tariff costs of $0.9 million in Q2 FY2026.” · word for word

Foreign Exchange Risk

“Unfavorable changes in foreign currency exchange rates of $1.6 million in Q2 FY2026.” · word for word

Labor Cost Inflation

“$1.2 million of higher Mexico labor costs in Q2 FY2026.” · word for word

Softer U.S. automotive production expected in H2 FY2026, potentially impacting demand.

“The second half of fiscal 2026 is expected to have a softer U.S. automotive production market” · word for word

Continued FX headwinds, particularly from Mexican operations.

“Continued FX headwinds... $1.6 million related to unfavorable foreign exchange rates.” · word for word

Tariff costs of $0.9M in the quarter, with potential for further increases.

“$0.9 million of incremental tariff costs” · word for word

Labor cost increases in Mexico due to annual merit increases ($1.2M).

“$1.2 million of higher labor costs in Mexico related to annual merit increases” · word for word

Customer concentration

“Sales to GM, Ford, and Stellantis represented 64% of total net sales.”

Tariff exposure

“Offsetting headwinds included incremental tariff costs of $0.8 million” · word for word

OEM production volatility

“Lower near term North American light vehicle production estimates, which are subject to change, are a result of recent industry-wide supply chain disruptions, tariff uncertainties, and availability of raw materials including rare earth minerals.” · word for word

Automotive industry uncertainty from supply chain challenges, tariff environment, and OEM production changes.

“Uncertainty, nevertheless, is prevalent for the North American automotive industry given recent industry wide supply chain challenges, a dynamic tariff environment and the resulting changes in OEM production levels.” · word for word

Debt covenant requires minimum consolidated net worth of $165M plus 50% of positive net earnings; potential constraint if earnings decline.

“The Credit Facility requires the Company to maintain Consolidated Net Worth of at least (a) $165,000,000, plus (b) beginning with the fiscal year ending on June 28, 2026, 50% of the Company’s positive Consolidated Net Earnings for such fiscal year” · word for word