STRATTEC SECURITY CORPORATION Temporarily Suspending Quarterly Dividend Payment and Other Strategic Actions
May 14 2020 - 4:00PM
STRATTEC SECURITY CORPORATION (NASDAQ:STRT) announced today that
the Company’s Board of Directors, at its’ regular quarterly meeting
on May 13, 2020, took action to temporarily suspend payment of its
quarterly dividend.
Frank J. Krejci, STRATTEC’s President & CEO
commented: “While the Company’s current financial position is
strong, our Board of Directors believes that during the
unprecedented economic conditions we are facing, the conservation
of cash to sustain the business is of major strategic
importance. We therefore believe that the prudent action for
the long term benefit of our Company and its shareholders is to
suspend our quarterly dividend for the foreseeable future.
Other actions taken by the Company effective May
1, 2020, include our Officers reducing their pay 15% to 25%, our
outside members of the Board of Directors reducing their annual
cash retainer by 25% to 50% and most of all of our U.S. salaried
associates reducing their wages by 10% through a reduction in
working hours. In addition, our U.S. salaried work force was
reduced by approximately 10% by not replacing certain positions
that recently left and by permanent layoffs. Lastly our hourly work
force in Milwaukee Wisconsin, El Paso, Texas and our Mexico
operations agreed to take voluntary layoffs based on lower customer
productions schedules and government directives to shutdown due to
the COVID- 19 virus. All these actions were difficult but necessary
in order to preserve cash as we work our way through these
uncertain times. They will stay in effect until we determine they
are no longer necessary”.
STRATTEC designs, develops, manufactures and
markets automotive Access Control Products, including mechanical
locks and keys, electronically enhanced locks and keys, steering
column and instrument panel ignition lock housings, latches, power
sliding side door systems, power lift gate systems, power deck lid
systems, door handles and related products. These products
are provided to customers in North America, and on a global basis
through a unique strategic relationship with WITTE Automotive of
Velbert, Germany and ADAC Automotive of Grand Rapids,
Michigan. Under this relationship, STRATTEC, WITTE and ADAC
market each company’s products to global customers under the “VAST
Automotive Group” brand name. STRATTEC’s history in the
automotive business spans over 110 years.
Certain statements contained in this release
contain “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. These
statements may be identified by the use of forward-looking words or
phrases such as “anticipate,” “believe,” “could,” “expect,”
“intend,” “may,” “planned,” “potential,” “should,” “will,” and
“would.” Such forward-looking statements in this
release are inherently subject to many uncertainties in the
Company’s operations and business environment. These
uncertainties include general economic conditions, in particular,
relating to the automotive industry, consumer demand for the
Company’s and its customers’ products, competitive and
technological developments, customer purchasing actions, changes in
warranty provisions and customer product recall policies, work
stoppages at the Company or at the location of its key customers as
a result of labor disputes, foreign currency fluctuations,
uncertainties stemming from U.S. trade policies, tariffs and
reactions to same from foreign countries, the volume and scope of
product returns, adverse business and operational issues resulting
from the coronavirus pandemic, and fluctuations in our costs of
operation (including fluctuations in the cost of raw
materials). Shareholders, potential investors and other
readers are urged to consider these factors carefully in evaluating
the forward-looking statements and are cautioned not to place undue
reliance on such forward-looking statements. The
forward-looking statements made herein are only made as of the date
of this press release and the Company undertakes no obligation to
publicly update such forward-looking statements to reflect
subsequent events or circumstances occurring after the date of this
release. In addition, such uncertainties and other
operational matters are discussed further in the Company’s
quarterly and annual filings with the Securities and Exchange
Commission.
Contact: Pat HansenSenior Vice President
andChief Financial Officer414-247-3435www.strattec.com
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