Financial Overview

(in million USD)

	FY2009	FY2008	Rate of Change (%)	Factors
Sales	126.1	159.6	(21.0)	-The Company's financial results for the year ended June 28, 2009 reflect the overall weakness in the U.S. economy, and in particular the sharp decline in vehicle sales and production during the year. In its quarter ended June 28, 2009, the Company's two largest customers, Chrysler LLC and General Motors Corporation, filed for Chapter 11 bankruptcy protection for their U.S. legal entities. May and June of 2009 were therefore extremely slow sales months for the Company, each nearly 45 percent below its April 2009 sales levels.
Gross profit	13.2	24.7	(46.6)
Income from operations	(12.7)	0.8	-
Net income	(6.1)	2.7	-

Sales by Customer

-Sales to General Motors Corporation in FY2009 were $39.2 million compared to $45.0 million in FY2008 due to lower vehicle production volumes on the vehicles the Company supplies. The impact of the lower volumes was partially offset by the takeover of certain passenger car lockset production from another supplier and $800,000 of sales generated by SPA (Strattec Power Access) primarily relating to products supplied on the Buick minivan produced in China.

-Sales to Chrysler LLC were $31.9 million in FY2009 compared to $40.2 million in FY2008. This sales reduction was due to a combination of lower vehicle production volumes and reduced component content in the security products the Company supplies, offset by $9.8 million of sales generated by SPA relating primarily to the products supplied on the Dodge, Chrysler and Volkswagen minivans.

-Sales to Ford Motor Company were $12.6 million in FY2009 compared to $19.4 million in FY2008 and sales to Delphi Corporation were $6.3 million in FY2009 compared to $14.9 million in FY2008. Included in FY2009 Ford sales were $800,000 of sales generated by SPA primarily relating to products supplied on the Lincoln Town Car. The lower sales to Ford and Delphi were primarily due to lower vehicle production volumes.

Acquisition

-The Company, in combination with WITTE Automotive (WITTE) and Vehicle Access Systems Technology (VAST), completed the acquisition of certain assets of Delphi Corporation's global Power Products business for approximately 6.7 million dollars. The Company established a new subsidiary, Strattec Power Access LLC, which is 80% owned by the Company and 20% by WITTE, to operate the North American portion of the business. The new company develops, manufactures, and sells power systems to operate vehicle sliding side doors as well as liftgates and trunk lids. Customers for these products supplied from North America are Chrysler LLC, Hyundai Motor Company, General Motors and Ford. WITTE acquired the European portion while VAST, a joint venture between the Company, WITTE and ADAC Automotive, took control of the Asian portion. (From a press release on Dec. 11, 2008)

R&D Expenditure

(in million USD)

	FY2009	FY2008	FY2007
Total	1.9	1.9	2.2
% of sales	1.5	1.2	1.3

 

R&D Structure

-Research and development activities are centered around research engineering staff called "Advanced Development Group". Projects focus on electronic and mechanical access control products, modularization of related access/security control components and new manufacturing processes to reduce costs for itself and its customers.

-The Company's engineering resources are organized by product type. It has four product groups: Locks and Keys, Latches, Driver Control/Ignition Lock Housings and Electrical.Each group has engineers who design and develop products for specific applications.