STRATTEC Navigates Auto Headwinds, OEM Sales Steady at 90%

TL;DR

**STRT is a solid auto supplier, but its heavy reliance on GM, Ford, and Stellantis makes it a captive play on their volatile production cycles.**

AI Summary

STRATTEC SECURITY CORP (STRT) reported its fiscal year ended June 29, 2025, with direct sales to OEMs representing approximately 90% of total sales, consistent with fiscal 2024. The company, a key supplier to General Motors Company, Ford Motor Company, and Stellantis, manufactures highly engineered automotive access products including mechanical and electronic locks, keys, passive entry systems, and power sliding/tailgate systems. STRT operates manufacturing facilities in Milwaukee, Wisconsin, and three locations in Juarez, Mexico, along with one in Leon, Mexico. The company faces risks from an uncertain economic environment, inflationary conditions, and the cyclical nature of the automotive industry, which could impact global vehicle production and demand. Supply chain disruptions, particularly regarding semiconductor chips and raw materials like high-grade zinc and plastic resins, remain a concern, potentially affecting production timing and costs. Strategic outlook emphasizes engineering expertise, customized solutions, and a strong competitive position as an incumbent supplier for vehicle platforms lasting five to seven years.

Why It Matters

STRT's reliance on a few major OEMs like General Motors, Ford, and Stellantis means its fortunes are tightly linked to their production volumes and market share, making it a bellwether for the broader automotive supply chain. For investors, this concentration presents both opportunity and risk; strong performance from these OEMs can boost STRT, but any downturn or shift in sourcing strategy could significantly impact revenue. Employees and customers benefit from STRT's deep engineering expertise and long-standing relationships, which foster stability and continuous innovation in critical vehicle access and security systems. The competitive landscape, with rivals like Magna and Valeo, underscores the need for STRT to maintain its technological edge and cost efficiency to secure future platform awards.

Risk Assessment

Risk Level: medium — The company faces a 'medium' risk level due to its high customer concentration, with a significant portion of annual sales to General Motors Company, Ford Motor Company, and Stellantis. This dependence means STRT is highly susceptible to these customers' production volumes and purchasing decisions. Additionally, the filing highlights risks from 'an uncertain economic environment and inflationary conditions coupled with the cyclical nature of the automotive industry,' which could adversely affect global vehicle production and demand for STRT's products.

Analyst Insight

Investors should monitor the production forecasts and sales performance of General Motors, Ford, and Stellantis, as these directly impact STRT's revenue. Diversification efforts or new customer wins would de-risk STRT, but for now, its performance is largely a proxy for these major OEMs.

Financial Highlights

debt To Equity

N/A

revenue

$135,807,533

operating Margin

N/A

total Assets

N/A

total Debt

N/A

net Income

N/A

eps

N/A

gross Margin

N/A

cash Position

N/A

revenue Growth

N/A

Executive Compensation

Key Numbers

• 90% — Direct sales to OEMs (Percentage of total sales for fiscal 2025 and 2024, indicating high customer concentration.)
• $135,807,533 — Aggregate market value of voting Common Stock held by non-affiliates (As of December 27, 2024, reflecting the company's market capitalization.)
• 4,161,334 — Shares of Common Stock outstanding (As of August 1, 2025, including unvested restricted shares.)
• 2,848 — Total associates (As of June 29, 2025, with 417 in the United States and 2,425 in Mexico.)
• 9.4% — Employees with union representation (Covers facilities in Milwaukee, Wisconsin, and Leon, Mexico.)
• 5-7 years — Typical vehicle platform lifecycle (Duration STRT typically supports products once designed into an application.)
• 3-5 years — Typical vehicle design cycle (Time ahead of start of production for engineering partnership.)

Key Players & Entities

• STRATTEC SECURITY CORP (company) — Registrant
• General Motors Company (company) — Significant customer
• Ford Motor Company (company) — Significant customer
• Stellantis (company) — Significant customer
• Jennifer Slater (person) — President and Chief Executive Officer
• Matthew Pauli (person) — Senior Vice President, Chief Financial Officer
• Rolando Guillot (person) — Senior Vice President, Chief Operating Officer
• Milwaukee, Wisconsin (location) — Headquarters and manufacturing facility
• Juarez, Mexico (location) — Three production facilities
• Leon, Mexico (location) — Production facility

FAQ

Risk Factors

• Automotive Industry Cyclicality and Demand Fluctuations [high — market]: The company's revenue is heavily dependent on the cyclical nature of the automotive industry. Global vehicle production and demand can be significantly impacted by economic conditions, consumer confidence, and shifts in consumer preferences, leading to unpredictable sales volumes for STRT's products.
• Supply Chain Disruptions [high — operational]: STRT faces ongoing risks from supply chain disruptions, particularly concerning semiconductor chips and essential raw materials like high-grade zinc and plastic resins. These disruptions can affect production timing, increase costs, and potentially lead to lost sales opportunities.
• Inflationary Conditions [medium — financial]: Persistent inflationary pressures can increase the cost of raw materials, labor, and other operational expenses. If STRT cannot fully pass these increased costs onto its customers, it could negatively impact its profit margins and overall financial performance.
• Customer Concentration [high — operational]: Approximately 90% of STRT's sales are directly to OEMs, with key customers including General Motors, Ford, and Stellantis. A significant reduction in business from any of these major customers could have a material adverse effect on the company's financial condition and results of operations.
• Reliance on Key Personnel and Engineering Expertise [medium — operational]: The company's success relies on its engineering expertise and the ability to develop customized solutions for long-term vehicle platform contracts (5-7 years). Loss of key engineering personnel or an inability to maintain its competitive edge in product development could impact future business.
• Cybersecurity Threats [medium — cybersecurity]: As a manufacturer of automotive components, STRT is subject to risks associated with cybersecurity threats. A breach could disrupt operations, compromise sensitive data, and lead to reputational damage and financial losses.

Industry Context

STRATTEC SECURITY CORP operates within the highly competitive automotive supply chain, focusing on access control systems. The industry is characterized by long product development cycles (3-5 years) and even longer vehicle platform lifecycles (5-7 years), requiring significant R&D investment and strong OEM relationships. Key trends include the increasing integration of electronic and software-based features in vehicle access, driven by consumer demand for convenience and security.

Regulatory Implications

STRT is subject to standard manufacturing and environmental regulations in the US and Mexico. While no specific regulatory risks are highlighted as critical in the provided context, compliance with evolving automotive safety standards and potential trade regulations impacting cross-border manufacturing and supply chains remain areas of attention.

What Investors Should Do

1. Monitor OEM customer concentration
2. Assess supply chain resilience
3. Evaluate competitive positioning in new vehicle technologies

Key Dates

• 2025-06-29: Fiscal Year End — Marks the end of the reporting period for the 10-K filing, providing the latest financial and operational data.
• 2024-12-27: Market Value of Common Stock Determination — Establishes the aggregate market value of voting common stock held by non-affiliates, a key component for calculating public float and market capitalization.
• 2025-08-01: Shares of Common Stock Outstanding — Provides the total number of outstanding shares, crucial for per-share calculations and understanding equity structure.
• 2025-06-29: Total Associates Count — Indicates the company's workforce size and distribution across geographies (US and Mexico).

Glossary

OEM

Original Equipment Manufacturer. Refers to companies that manufacture products based on a design or license from another company. (STRT's primary customers are OEMs in the automotive industry, making this a critical term for understanding their sales structure.)

Passive Entry Systems

Automotive systems that allow vehicle access and starting without the driver needing to physically insert a key or press a button. (A key product category for STRT, indicating their involvement in advanced vehicle technology.)

Vehicle Platform

A common architecture or set of components used across multiple vehicle models produced by an automotive manufacturer. (STRT's business is tied to these long-term platform contracts, highlighting the duration of their customer relationships.)

Incumbent Supplier

A company that is already supplying parts or systems for existing vehicle models and is likely to continue supplying for new models based on the same platform. (STRT's competitive advantage lies in being an incumbent supplier, which provides a stable revenue base.)

Year-Over-Year Comparison

The provided context indicates that direct sales to OEMs remained consistent at approximately 90% of total sales in fiscal 2025 compared to fiscal 2024, suggesting stability in customer concentration. No specific comparative financial metrics like revenue growth, margin changes, or new risks were detailed in the initial analysis to allow for a direct comparison to the previous year's filing.

Filing Documents

• strt-20250629.htm (10-K) — 2659KB
• strt-ex10_25.htm (EX-10.25) — 75KB
• strt-ex19.htm (EX-19) — 110KB
• strt-ex21.htm (EX-21) — 4KB
• strt-ex23_1.htm (EX-23.1) — 3KB
• strt-ex31_1.htm (EX-31.1) — 12KB
• strt-ex31_2.htm (EX-31.2) — 12KB
• strt-ex32.htm (EX-32) — 14KB
• strt-ex97.htm (EX-97) — 51KB
• 0000950170-25-111218.txt ( ) — 12364KB
• strt-20250629.xsd (EX-101.SCH) — 1495KB
• strt-20250629_htm.xml (XML) — 2507KB

Business

Business 2 Item 1A.

Risk Factors

Risk Factors 8 Item 1B. U nresolved Staff Comments 14 ITEM 1C. C ybersecurity 14 Item 2.

Properties

Properties 14 Item 3.

Legal Proceedings

Legal Proceedings 14 Item 4. M ine Safety Disclosures 15 PART II Item 5. M arket for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities 16 Item 6. [R eserved ] 16 Item 7. M anagement's Discussion and Analysis of Financial Condition and Results of Operations 17 Item 7A. Q uantitative and Qualitative Disclosures about Market Risk 21 Item 8. F inancial Statements and Supplementary Data 22 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 45 Item 9A.

Controls and Procedures

Controls and Procedures 45 Item 9B. Other Information 47 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 47 PART III Item 10. Directors, Executive Officers, and Corporate Governance 48 Item 11.

Executive Compensation

Executive Compensation 48 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 48 Item 13. Certain Relationships and Related Transactions and Director Independence 48 Item 14. Principal Accounting Fees and Services 48 PART IV Item 15. Exhibits and Financial Statement Schedules 49 ITEM 16. Form 10-K Summary 52

Signatures

Signatures 53 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS In this Annual Report on Form 10-K for Strattec Security Corporation ("Strattec," "the Company," "we," "us," or "our"), statements that are not reported financial results or other historic information are "forward-looking statements." These forward-looking statements relate to, among other things, the Company's future financial position, business strategy, targets, projected sales, costs, income, capital expenditures, debt levels and cash flows, and plans and objectives of management for future operations. The use of words such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "should," "project" or "plan" or similar terminology are generally intended to identify forward-looking statements. These forward-looking statements by their nature address matters that are, to different degrees, uncertain and are subject to risks, assumptions, and other factors, some of which are beyond the Company's control, that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. The Company's operations and financial performance are subject to certain risks and uncertainties, including: an uncertain economic environment and inflationary conditions coupled with the cyclical nature of the automotive industry may adversely affect global vehicle production and demand for our products; we operate in a highly competitive market and technological developments within our sphere of offerings are rapidly evolving; changes in customer purchasing actions, warranty provisions and product recall policies could adversely affect our business, results of operations and financial condition; work stoppages within our operations or at the location of our key customers as a result of labor disputes could adversely impact our business, results of operations and financial condition; labor cost inflation or unionization efforts in Mexico, couple

R ISK FACTORS

ITEM 1A. R ISK FACTORS Investors and readers should carefully consider each of the risks, assumptions, uncertainties and other factors described below and elsewhere in this Annual Report, as well as any amendments or updates reflected in subsequent filings with the Securities and Exchange Commission. We believe these risks, assumptions, uncertainties and other factors, individually or in the aggregate, could cause our actual results to differ materially from expected and historical results and could materially and adversely affect our business operations, results of operations, financial condition and liquidity. Business Risks Loss of Significant Customers, Vehicle Content, Vehicle Models and Market Share In fiscal 2025, our three largest customers, General Motors Company, Ford Motor Company and Stellantis, accounted for 29%, 23% and 12%, respectively, of our annual sales, compared to 30%, 21% and 14%, respectively, in fiscal 2024. The contracts with these customers provide for meeting the customer's requirements for a particular vehicle model with our products. The contracts do not specify a quantity of parts to be supplied over the life of the vehicle, which averages approximately four to five years. Components for certain customer models may also be "market tested" annually. Therefore, the loss of any one of these customers, the early cancellation or breach by either party of a contract for a specific vehicle model, a reduction in vehicle content, the early cancellation of a specific vehicle model, technological changes or a significant reduction in demand for certain models could occur, and if so, could have a material adverse effect on our existing and future revenue, operating results, financial condition and cash flows. We also make investments in machinery and equipment used exclusively to manufacture products for specific customer programs. This machinery and eq

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View this 10-K filing on SEC EDGAR