Strattec Security Corporation · NASDAQ:STRT
Strattec Security — Sidoti & Company Presentation (June 2020)
38 slides from Strattec Security's conference presentation, Jun 30, 2020
Slide 1: Sidoti & Company
me STRATTEC Sidoti & Company June 30, 2020 VEHICLE ACCESS SYSTEMS TECHNOLOGY WITTE * STRATTEC * ADAC
Slide 2: Disclosure for Presentation on June 30, 2020
mMSTRATTEC Disclosure for Presentation on June 30, 2020 This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may include expected future financial results, product offerings, global expansion, liquidity n
Slide 3: Frank J. Krejci, President & CEO
mw STRATTEC Frank J. Krejci (CRAY’ CHEE) President & CEO MASI ; en SYSTEMS TECHNOLOGY iC * ADAC VEHICLE ACCESS
Slide 4: Background Information
mw STRATTEC Background Information WAS; 4 af VEHICLE ACCESS SYSTEMS TECHNOLOGY WITTE * STRATTEC * ADAC
Slide 5: STRATTEC - Facts & Figures
STRATTEC -— Facts & Figures mM STRATTEC » Headquarters: Milwaukee, Wisconsin » Established: 1908 » Employees: ~4,000 » Core Products: + Locksets (Keys, Fobs, Locks) - Ignition / Start Systems + Steering Column Locking Systems » Power Liftgate and Sliding Door Mechanisms » Latches + Door Handles « VA
Slide 6: Sales by Customers and Products
Sales by Customers and Products MN STRATTEC Customers ; Products Driver Miscellaneo Controls us Industrial OEM 2% Service & Aftermarket 9% Hyundai/Kia 7% Power Access & Latches 29% Key & Locksets 28% Fiscal Year 2019 Fiscal Year 2019 Net Sales = $487 million Net Sales = $487 million NOTE: Tier 1’s s
Slide 7: Facilities
Facilities mw STRATTEC Milwaukee, WI « STRATTEC Headquarters * Manufacturing « Engineering ° Testing Auburn Hills, Ml * STRATTEC Power Access HQ + STRATTEC Sales Office + Engineering * Program Management El Paso, TX (Distribution) —_ — TRATTEC Mexico Operations - Juarez, Mexico ADAC STRATTEC de Mexi
Slide 8: Patrick J. Hansen, Senior Vice President & CFO
mw STRATTEC Patrick J. Hansen Senior Vice President & CFO ; be) VEHICLE ACCESS SYSTEMS TECHNOLOGY WITTE * STRATTEC * ADAC
Slide 9: Financial Information
mm STRATTEC Financial Information id Pe, VEHICLE ACCESS SYSTEMS TECHNOLOGY WITTE * STRATTEC + ADAC
Slide 10: Statements of Income
Statements of Income “ 3'4 Quarter March 2020 & 2019 (in thousands of USD) S STRATTEC Actual % of Actual % of QTR Mar 2020 NetSales QTR Mar 2019 Net Sales Net Sales $ 116,938 $ 128,230 Cost of Goods Sold 99,928 85.5% 112,548 87.8% Gross Profit 17,010 14.5% 15,682 12.2% Engineering, Selling, & Admini
Slide 11: Year Net Sales Growth
3 Year Net Sales Growth (in millions $) mw STRATTEC $500 $487 $417 $439 $400 $300 = $200 Kl $100 g + i =llL FY 2017 FY 2018 FY 2019 Was; | 11 te VEHICLE ACCESS SYSTEMS TECHNOLOGY WITTE * STRATTEC * ADAC
Slide 12: Year Adjusted EPS
3 Year Adjusted EPS mi STRATTEC 4.00 —$$_—$_$__—_—_—_— $3.50 $3.39 $3.00 -— yy :7 Co $2.50 $2.00 a $1.50 $1.00 - $0.50 $- ——T FY 2017 FY 2018 FY 2019 ——j ___. *Adjusted for Non-Cash Pension Settlement and compensation charges of $36.0 million pre-tax. VWVAQT 12 ae VEHICLE ACCESS SYSTEMS TECHNOLOGY W
Slide 13: Year EBITDA Summary
3 Year EBITDA Summary mw STRATTEC $40 | a $35 $30 $25 $20 T FY 2018 FY2019 FY 2020 (9 months) FY 2017 NOTE: The fiscal 2019 EBITDA was adjusted to add back the pre-tax/non-cash pension settlement charge of $31.8 million and non-cash compensation expense of $4.2 million. Fiscal 2020 was adjusted for
Slide 14: Fiscal Year End Capital Spending, Depreciation Expense and Projected FY 2020
3 Fiscal Year End Capital Spending, = BY. STRATTEC Depreciation Expense and Projected FY 2020 (in millions $) $19.5 $15 5.0 = Capital Spending = Depreciation Expense FY 2017 FY 201 8 FY 201 9 “FY 2020 Projected NOTE: FY 2017 STRATTEC spent $24.0 million to construct the Leon, Mexico mold, paint and
Slide 15: Fiscal Year End Debt Outstanding
3 Fiscal Year End Debt Outstanding as i STRATTEC of March 29, 2020 (in millions $) $60 $51.0 $50 ; oe 42.0 $40 s co $30 $30.0 _ eg $27.0 | S| iC. $20 -—— - si c 10 Ss a A c $ s ic —s — Z rn $0 t <== T FY 2017 FY 2018 FY 2019 FY 2020 March 29, 2020 (9 months) WwWAQTT 15 ae VEHICLE ACCESS SYSTEMS TECH
Slide 16: Capitalization as of March 29, 2020
Capitalization as of March 29, 2020, Sy STRATTEC June 30, 2019 and July 1, 2018 (in millions $) March 29, 2020 June 30, 2019 July 1, 2018 Total Debt $27.0 $42.0 $51.0 Less: Cash & Cash Equivalents ($10.2) ($7.8) ($8.1) Total Net Debt $16.8 $34.2 $42.9 Shareholders’ Equity Attributable to STRATTEC $1
Slide 17: Outlook Going Forward for Fiscal Year 2020
Outlook Going Forward for Fiscal Year 2020 mSTRATTEC ° During the 1st and 2" quarters of fiscal 2020, STRATTEC had lost sales of $10 million due to the strike at General Motors. The impact of COVID -19 OEM Plant closures in the Third Quarter reduced sales by $7 million. ° The impact of the OEM assem
Slide 18: Frank J. Krejci, President & CEO
mSTRATTEC Frank J. Krejci (CRAY’ CHEE) President & CEO wasn | 18 te a SYSTEMS TECHNOLOGY \TTE + ADAC VEHICLE ACCESS
Slide 19: Product Information
mSTRATTEC Product Information VEHICLE ACCESS SYSTEMS TECHNOLOGY WITTE * STRATTEC * ADAC
Slide 20: Core Products: Security Products
Core Products: Security Products mw STRATTEC Locksets & Keyfobs Start Systems, Column Locks (mechanical and electrical) oS om @© WwALQIT 20 ae VEHICLE ACCESS SYSTEMS TECHNOLOGY WITTE * STRATTEC » ADAC
Slide 21: Core Products: Access Products
Core Products: Access Products mSTRATTEC Latch Products Power Access Systems STRATTEC POWER ACCESS wry wr 24 VEHICLE ACCESS SYSTEMS TECHNOLOGY vm. WITTE * STRATTEC « ADAC
Slide 22: Industry Leading Technology
Industry Leading Technology MSTRATTEC * STRATTEC'’s innovation provided the Power Tailgate solution allowing GM to be first to market with this feature. This option has been the focus of GM’s ad campaign targeted at Chevrolet being an innovation leader. * Winner of two PACE awards in 2018 and 2019 a
Slide 23: Power Tail Gate Sales Content Opportunity
Power Tail Gate Sales Content Opportunity Mm STRATTEC * Chevrolet Silverado projected take rate 15%-20% ¢ Ford F-series Pickups projected take rate 15%-20% * Opportunity for higher sales content if consumer acceptance is greater than 20% VAST 23 te. VEHICLE ACCESS SYSTEMS TECHNOLOGY WITTE * STRATTEC
Slide 24: Vehicle Access Systems Technology d/b/a VAST Automotive Group
MSTRATTEC a Vehicte Access Systems Technology d/b/a VAST Automotive Group wAnQr 24 Ce VEHICLE ACCESS SYSTEMS TECHNOLOGY WITTE * STRATTEC * ADAC
Slide 25: Vehicle Access Systems Technology
VEHICLE ACCESS SYSTEMS TECHNOLOGY WSTRATTEC ¢ Unique joint venture partnership (STRATTEC, ADAC, and WITTE) * Shared technology ¢ Joint investments outside of our home markets of North America and Europe WALI 25 ae VEHICLE ACCESS SYSTEMS TECHNOLOGY WITTE + STRATTEC * ADAC.
Slide 26: Vehicle Access Systems Technology
VEHICLE ACCESS SYSTEMS TECHNOLOGY mw STRATTEC o SS WITTE ISSTRATTEC ISADAC Founded 1899 Founded 1908 tu ee q Founded 1975 7 HEADQUARTERS: HEADQUARTERS: . ‘ HEADQUARTERS: ig , Velbert, Germany Grand Rapids, Michigan, = Privately-held EMPLOYEES: 4,000 Milwaukee, Wisconsin, U.S. Publicly-traded (STRT N
Slide 27: VAST Profile
WAST Profile mMSTRATTEC ° $1.7 billion + sales ° 18 Manufacturing sites ° 13 Engineering Centers °* Employment over 10,000 ® Fiscal year 2019 STRATTEC’s 1/3 share of VAST LLC Net Income = $2,655,000 WwASI 27 ce VEHICLE ACCESS SYSTEMS TECHNOLOGY WITTE + STRATTEC + ADAC.
Slide 28: VAST China
WAST China mw STRATTEC In Millions Of US Dollars $200 )»—— = $180 $160 = $140 $174.2 $161.0 $120 $100 == 128. 2 $123.2 : $80 = $78.0 s763 | $67. 7 Pf FF pO A oOo oOo } 1 —Fi0a gan *4* 5. sa Hs. il $11. $114.0 i $924 — — f $37.2 $37.5 allilll he ill | 2003 "2004 2005 2006 2007 2008 2009 2010 2011 201
Slide 29: Summary
Summary mM STRATTEC ® Product Growth primarily in Power Access Products (Power End Gates with General Motors Chevrolet Silverado and FORD F-150 Pickup Trucks). ° Financially strong Balance Sheet & Cash Flow ° Defined Benefit Pension Obligation behind us ° Working to Improve Gross Profit Margins thro
Slide 30: Questions?
mw STRATTEC Questions? WAS 30 ae VEHICLE ACCESS SYSTEMS TECHNOLOGY WITTE * STRATTEC * ADAC.
Slide 31: Appendix
mw STRATTEC Appendix was; ia 31 te & ACCESS SYSTEMS TECHNOLOGY .
Slide 32: Statements of Income
Statements of Income March 2020 & 2019 YTD (in thousands of USD) MSTRATTEC Net Sales Cost of Goods Sold Non Cash Compensation Expense Gross Profit Engineering, Selling, & Adminstrative Expense Non Cash Compensation Expense Total Expense Operating Income Interest Expense Gain (Loss) on Investment in
Slide 33: Balance Sheet (March 2020)
Balance Sheet (March 2020, in thousands of USD) MSTRATTEC March 29, 2020 June 30, 2019 ASSETS Current Assets: Cash and Cash Equivalents $ 10,173 $s 7,809 Receivables, net 72,805 84,230 Inventories, net 58,348 47,262 Other Current Assets 15,216 17,331 Total Current Assets 156,542 156,632 Investment i
Slide 34: Cash Flow Statement
Cash Flow Statement = STRATTEC YTD March 2020 & 2019 (in thousands of USD) YTD YTD Mar 2020 Mar 2019 Cash Flows From Operating Acti Net Income (Loss) $ 6498 $ (14,132) Adjustments to Reconcile Net Income to Cash Provided by Operating Activities: Depreciation 14,349 12,543 Equity Earnings in Joint Ve
Slide 35: Legal Ownership Structure including VAST
mw STRATTEC BM STRATTEC Legal Ownership Structure including VAST: STRATTEC Power Access ADAC utc STRATTEC LLC (Delaware LLC) (A) 80% (Delaware LLC) (A) 20% 51% 49% mi WiITTE MSTRATTEC mM ADAC WITTE Velbert GmbH STRATTEC SECURITY ADAC Plastic Inc. & Co. Kg CORPORATION (DBA ADAC Automotive) {E. Witte,
Slide 36: VAST Formed: 2000
VAST Formed: 2000 MSTRATTEC <q STRATTEC - Milwaukee, Wisconsin- Founded 1908, Public »* Company 1995. a NY WiTTE - Velbert, Germany — Founded 1899, Private AUTOMOTIVE NY ADAC - Grand Rapids, Michigan— Founded 1975, Private AUTOMOTIVE SIN | - 33% Ownership by STRATTEC (2001) CGC HIN ADACISTRATTEC — -
Slide 37: Global Presence
war GLOBAL PRESENCE mw STRATTEC Fass? France () (@/00 — 1 US, Milwaukee 2 US, Grand Rapids 9 Mexico 3 US., Saranac 4 US, Muskegon (3) 5 Mexico, Juarez (3) @ Engineering Centers 6 Mexico, Leon VAST 1 US, Milwaukee 7 Germany, Velbert nas | 2° USS, Auburn Hills 8 Germany, Wuelfrath | 16 3 USS, Grand Ra
Slide 38: VAST Customers
VAST Customers mSTRATTEC Passenger Vehicle Manufacturers ware GOD Sor Qa O@ © so = Auer BENTLEY GUICK yo CHERY cHevrover a Be @ @ QO avec KJ I) RRR, { ii oe, @. =, pA oO © @ .°. ae 3 =O- ; =} Ri Ou == hy ve O BY 2 . Bieven i GD SS. 4 2 oS @ WY TOYOTA Saat Commercial Vehicle Manufacturers BAe ql wWec
STRATTEC Security — Sidoti & Company Presentation (June 2020) on 6ix