- **Revenue Growth**: 10% Q1 FY2026, driven by automation and restructuring. 
- **Margin Expansion**: Gross margin +370bps to 17.3%, EBITDA margin +310bps to 10.2%. 
- **Operational Resilience**: $90M cash cushion to navigate automotive industry headwinds. 
- **Strategic Moves**: Sale-leaseback of Milwaukee facility, test lab consolidation, and M&A exploration. 
- **Risk Factors**: Aluminum supplier fire and semiconductor shortages may delay production recovery.

**【Management Opening Remarks】**
- Introduced the call, highlighting the company's financial results and strategic initiatives. Emphasized forward-looking statements and non-GAAP measures for evaluating performance.

**【CEO Summary Section】**
- **Financial Performance**: Q1 FY2026 revenue grew 10%, gross profit margin expanded 370 basis points to 17.3%, and EBITDA margin improved 310 basis points to 10.2%. 
- **Cost Management**: Implemented restructuring actions saving $1M annually, offsetting $500K in tariffs and $200K in labor costs. 
- **Operational Updates**: 
  - Automating manual processes in Mexico (e.g., screw assembly) with quick ROI. 
  - Consolidating test labs in Michigan and modernizing corporate offices. 
  - Planning sale-leaseback of Milwaukee facility to optimize space and reduce costs. 
- **Industry Challenges**: Aluminum supplier fire and semiconductor shortages may impact Q2-Q3 production, with uncertain full-year effects.

**【CFO Financial Commentary】**
- **Gross Profit**: $7.4M increase driven by pricing, volumes, and $1.3M restructuring savings, offset by $500K tariffs and $200K labor costs. 
- **Cash Flow & Balance Sheet**: 
  - Operating cash flow $11.3M, capital expenditures $1.5M (1% of sales). 
  - $90M cash balance and $53M available under credit facilities. 
  - New $40M credit facility maturing in 2028, supporting M&A exploration. 
- **CapEx Outlook**: Full-year $12.5M (2% of sales), with automation investments yielding <1-year payback.

**【Q&A Highlights】**
- **Automation ROI**: CFO expects returns in Q2-Q3 FY2026, with low capital intensity. 
- **Customer Expansion**: Exploring relationships with new North American vehicle manufacturers for power access and digital key products. 
- **Risk Management**: Monitoring supply chain disruptions and adjusting cost structures proactively.

Strattec Security Corporation (STRT) Q1 2026 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

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STRT

STRT fundamentals

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