Equity Earnings (Loss) of Joint Ventures

6 Months Ended

Dec. 29, 2013

Equity Earnings (Loss) of Joint Ventures

Equity Earnings (Loss) of Joint Ventures

We hold a one-third interest in a joint venture company, Vehicle Access Systems Technology LLC (“VAST LLC”), with WITTE Automotive of Velbert, Germany (“WITTE”), and ADAC Automotive of Grand Rapids, Michigan (“ADAC”). VAST LLC exists to seek opportunities to manufacture and sell all three companies’ products in areas of the world outside of North America and Europe. VAST LLC consists primarily of three wholly owned subsidiaries in China and one joint venture in Brazil. Our investment in VAST LLC, for which we exercise significant influence but do not control and are not the primary beneficiary, is accounted for using the equity method.

The following are summarized statements of operations for VAST LLC (thousands of dollars):

	Three Months Ended						Six Months Ended
	December 29, 2013			December 30, 2012				December 29, 2013			December 30, 2012
Net Sales	$	27,135		$	22,684			$	51,664		$	43,965
Cost of Goods Sold		22,943			18,662				43,358			35,903
Gross Profit		4,192			4,022				8,306			8,062
Engineering, Selling and Administrative Expenses		2,791			4,679				6,281			8,721
Income (Loss) From Operations		1,401			(657	)			2,025			(659	)
Other (Expense) Income, net		(19	)		259				(21	)		299
Income (Loss) before Provision for Income taxes		1,382			(398	)			2,004			(360	)
Provision for (benefit from) Income Taxes		219			(94	)			(235	)		(14	)
Net Income (Loss)	$	1,163		$	(304	)		$	2,239		$	(346	)
STRATTEC’s Share of VAST LLC Net Income (Loss)	$	387		$	(101	)			746		$	(115	)
Intercompany Profit Elimination		2			2				(4	)		4
STRATTEC’s Equity Earnings (Loss) of VAST LLC	$	389		$	(99	)		$	742		$	(111	)

During April 2013, we acquired a 51% ownership interest in a newly formed joint venture company, NextLock LLC, which was formed to introduce a new generation of biometric security products based upon designs of Actuator Systems LLC, our partner. We anticipate shipment of the biometric security products to begin in the fourth quarter of our 2014 fiscal year through this new joint venture. Our investment in NextLock, for which we exercise significant influence but do not control, is accounted for using the equity method.

The following are summarized statements of operations for NextLock LLC (thousands of dollars):

	Three Months Ended					Six Months Ended
	December 29, 2013			December 30, 2012		December 29, 2013			December 30, 2012
Engineering, Selling and Administrative Expenses	$	181		$	-	$	297		$	-
Loss From Operations		(181	)		-		(297	)		-
Net Loss	$	(181	)	$	-	$	(297	)	$	-
STRATTEC’s Equity Loss of NextLock LLC	$	(92	)	$	-	$	(151	)	$	-