Strattec Security (STRT) 16th Annual East Coast IDEAS Conference summary

Business and Strategic Transformation

• Underwent significant transformation over the past two years, including cultural change, rebranding, and a refreshed leadership team, with about half of senior leaders new in the last two years.

• Aims to be the global leader in safe, secure access solutions for automotive and mobility industries, focusing on innovation, customer experience, and scaling operations.

• Transformation includes operational excellence, reducing headcount by 20% and realizing $9.5 million in savings, plus $15.6 million in pricing improvements.

• Modernization efforts include automation, IT enhancements, flexible assembly lines, and facility optimization to improve efficiency and competitiveness.

• Rebranding as a solutions provider and moving headquarters to a modern facility to attract talent and support transformation.

Product Portfolio, Innovation, and Customer Engagement

• Offers a comprehensive range of mechanical and electronic access products, including lock and key, digital key technology, latches, and power access systems, serving EV, hybrid, and ICE vehicles.

• Digital key fob technology remains in demand, with 70% of revenue from aftermarket sales.

• Differentiates through integration of mechanical, software, and motor components, with strong engineering capabilities and vertical integration.

• Developing next-generation software compatible with evolving vehicle electrical architectures, including Ultra-Wideband technology.

• Early and advanced customer engagement strategies implemented to win new business and set product specifications, with revenue impact expected from 2029 onward.

Financial Performance and Outlook

• Fiscal year ends June 30; first nine months sales were $427 million, up 3.5% year-over-year, with trailing 12-month sales at $579.6 million.

• Gross margin improved from 14.3% to 16.8%, targeting 18%-20% through further operational improvements, with a 250 basis point Y/Y expansion.

• Net income grew 61% YTD FY26, with adjusted net income for nine months at $19.9 million ($4.83/share) and adjusted EBITDA up 23% to $37 million (9% margin).

• Strong balance sheet with $107 million cash, $1 million debt, and $36.6 million cash from operations YTD FY26; $7.5 million in share buybacks post-quarter.

• Announced a $40 million share buyback program and extended revolving credit maturity to 2028.