10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549  

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 27, 2020 

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number 0-25150

STRATTEC SECURITY CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Wisconsin	39-1804239
(State of Incorporation)	(I.R.S. Employer Identification No.)

3333 West Good Hope Road, Milwaukee, WI 53209

(Address of Principal Executive Offices)

(414) 247-3333

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of exchange on which registered
Common stock, $.01 par value	STRT	The Nasdaq Global Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller Reporting Company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes  ☐    No  ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.

Common stock, par value $0.01 per share: 3,859,892 shares outstanding as of September 29, 2020 (which number includes all restricted shares previously awarded that have not vested as of such date).

STRATTEC SECURITY CORPORATION

FORM 10-Q

September 27, 2020

INDEX

		Page
Part I - FINANCIAL INFORMATION
Item 1	Financial Statements
	Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited)	3
	Condensed Consolidated Balance Sheets (Unaudited)	4
	Condensed Consolidated Statements of Cash Flows (Unaudited)	5
	Notes to Condensed Consolidated Financial Statements (Unaudited)	6-18
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19-24
Item 3	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4	Controls and Procedures	25
Part II - OTHER INFORMATION
Item 1	Legal Proceedings	26
Item 1A	Risk Factors	26
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3	Defaults Upon Senior Securities	26
Item 4	Mine Safety Disclosures	26
Item 5	Other Information	26
Item 6	Exhibits	27

PROSPECTIVE INFORMATION

A number of the matters and subject areas discussed in this Form 10-Q 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,” “would,” “expect,” “intend,” “may,” “planned,” “potential,” “should,” “will,” and “could,” or the negative of these terms or words of similar meaning. These statements include expected future financial results, product offerings, global expansion, liquidity needs, financing ability, planned capital expenditures, management’s or the Company’s expectations and beliefs, and similar matters discussed in this Form 10-Q. The discussion of such matters and subject areas contained herein is qualified by the inherent risks and uncertainties surrounding future expectations generally, and also may materially differ from the Company’s actual future experience.

The Company’s business, operations and financial performance are subject to certain risks and uncertainties, which could result in material differences in actual results from the Company’s current expectations. These risks and uncertainties include, but are not limited to, 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 customers’ 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, changes in the costs of operations, changes in the volume and scope of product returns and warranty claims, adverse business and operational issues resulting from the Coronavirus (COVID-19) pandemic or the continuation or worsening therefore and other matters described in the section titled “Risk Factors” in the Company’s Form 10-K report filed on September 3, 2020 with the Securities and Exchange Commission for the year ended June 28, 2020.

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 Form 10-Q 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 Form 10-Q.

Item 1 Financial Statements

STRATTEC SECURITY CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Income and Comprehensive Income

(In Thousands, Except Per Share Amounts)

(Unaudited)

	Three Months Ended
	September 27, 2020			September 29, 2019
Net sales	$	126,234		$	119,962
Cost of goods sold		103,723			104,076
Gross profit		22,511			15,886
Engineering, selling and administrative expenses		11,314			12,954
Income from operations		11,197			2,932
Equity earnings of joint ventures		825			484
Interest expense		(112	)		(340	)
Other expense, net		(260	)		(97	)
Income before provision for income       taxes and non-controlling interest		11,650			2,979
Provision for income taxes		1,577			299
Net income		10,073			2,680
Net income attributable to non-controlling       interest		2,065			1,436
Net income attributable to STRATTEC       SECURITY CORPORATION	$	8,008		$	1,244
Comprehensive income:
Net income	$	10,073		$	2,680
Pension and postretirement plans, net of tax		70			73
Currency translation adjustments		1,699			(1,448	)
Other comprehensive income (loss), net of tax		1,769			(1,375	)
Comprehensive income		11,842			1,305
Comprehensive income attributable to        non-controlling interest		2,386			1,184
Comprehensive income attributable to       STRATTEC SECURITY CORPORATION	$	9,456		$	121
Earnings per share attributable to       STRATTEC SECURITY CORPORATION:
Basic	$	2.13		$	0.34
Diluted	$	2.11		$	0.33
Average shares outstanding:
Basic		3,765			3,710
Diluted		3,788			3,728
Cash dividends declared per share	$	—		$	0.14

The accompanying notes are an integral part of these Condensed Consolidated Statements of Income and Comprehensive Income.

3

STRATTEC SECURITY CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In Thousands, Except Share Amounts)

(Unaudited)

	September 27, 2020			June 28, 2020
ASSETS
Current Assets:
Cash and cash equivalents	$	11,983		$	11,774
Receivables, net		79,764			41,955
Inventories:
Finished products		13,122			13,142
Work in process		12,551			11,815
Purchased materials		31,523			34,333
Excess and obsolete reserve		(5,523	)		(4,890	)
Inventories, net		51,673			54,400
Other current assets		17,527			17,239
Total current assets		160,947			125,368
Investment in joint ventures		23,723			22,068
Deferred Income Taxes		6,402			6,490
Other long-term assets		6,547			6,471
Property, plant and equipment		268,166			266,216
Less: accumulated depreciation		(165,556	)		(161,068	)
Net property, plant and equipment		102,610			105,148
	$	300,229		$	265,545
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	40,809		$	18,549
Accrued Liabilities:
Payroll and benefits		16,314			13,498
Environmental		1,257			1,259
Warranty		8,405			8,500
Other		9,518			6,334
Total current liabilities		76,303			48,140
Borrowings under credit facilities		30,000			35,000
Accrued pension obligations		1,277			1,255
Accrued postretirement obligations		684			701
Other long-term liabilities		4,945			5,008
Shareholders’ Equity:
Common stock, authorized 12,000,000 shares, $.01 par value, 7,393,481    issued shares at September 27, 2020 and 7,358,812 issued shares at    June 28, 2020		74			74
Capital in excess of par value		98,188			97,977
Retained earnings		219,948			211,940
Accumulated other comprehensive loss		(20,665	)		(22,113	)
Less: treasury stock, at cost (3,608,214 shares at September 27, 2020 and    3,609,193 shares at June 28, 2020)		(135,640	)		(135,656	)
Total STRATTEC SECURITY CORPORATION shareholders’ equity		161,905			152,222
Non-controlling interest		25,115			23,219
Total shareholders’ equity		187,020			175,441
	$	300,229		$	265,545

The accompanying notes are an integral part of these Condensed Consolidated Balance Sheets.

4

STRATTEC SECURITY CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)

	Three Months Ended
	September 27, 2020			September 29, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	10,073		$	2,680
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		4,885			4,733
Foreign currency transaction loss		399			85
Unrealized gain on peso forward contracts		(335	)		—
Stock based compensation expense		208			413
Equity earnings of joint ventures		(825	)		(484	)
Non-cash compensation expense		—			2,228
Deferred income taxes		—			(524	)
Change in operating assets and liabilities:
Receivables		(37,796	)		4,952
Inventories		2,727			(4,238	)
Other assets		(288	)		3,240
Accounts payable and accrued liabilities		27,914			1,684
Other, net		338			239
Net cash provided by operating activities		7,300			15,008
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment		(1,514	)		(4,298	)
Proceeds received on sale of property, plant and equipment		3			15
Net cash used in investing activities		(1,511	)		(4,283	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under credit facility		—			—
Repayment of borrowings under credit facility		(5,000	)		(6,000	)
Dividends paid to non-controlling interests of subsidiaries		(490	)		(980	)
Dividends paid		—			(522	)
Exercise of stock options and employee stock purchases		19			239
Net cash used in financing activities		(5,471	)		(7,263	)
Foreign currency impact on cash		(109	)		(30	)
NET INCREASE IN CASH AND CASH EQUIVALENTS		209			3,432
CASH AND CASH EQUIVALENTS
Beginning of period		11,774			7,809
End of period	$	11,983		$	11,241
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid (received) during the period for:
Income taxes	$	(213	)	$	298
Interest	$	118		$	360
Non-cash investing activities:
Change in capital expenditures in accounts payable	$	318		$	(820	)

The accompanying notes are an integral part of these Condensed Consolidated Statements of Cash Flows.

5

STRATTEC SECURITY CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Basis of Financial Statements

STRATTEC SECURITY CORPORATION designs, develops, manufactures and markets automotive access control products including mechanical locks and keys, electronically enhanced locks and keys, passive entry passive start systems (PEPS), steering column and instrument panel ignition lock housings, latches, power sliding door systems, power tailgate systems, power lift gate systems, power deck lid systems, door handles and related products for primarily North American automotive customers. We also supply global automotive manufacturers through a unique strategic relationship with WITTE Automotive (“WITTE”) of Velbert, Germany, and ADAC Automotive (“ADAC”) of Grand Rapids, Michigan. Under this relationship, STRATTEC, WITTE and ADAC market the products of each company to global customers under the “VAST Automotive Group” brand name (as more fully described herein). STRATTEC products are shipped to customer locations in the United States, Canada, Mexico, Europe, South America, Korea, China and India, and we provide full service and aftermarket support for each VAST Automotive Group partner’s products.

The accompanying condensed consolidated financial statements reflect the consolidated results of STRATTEC SECURITY CORPORATION, its wholly owned Mexican subsidiary, STRATTEC de Mexico, and its majority owned subsidiaries, ADAC-STRATTEC, LLC and STRATTEC POWER ACCESS LLC. STRATTEC SECURITY CORPORATION is located in Milwaukee, Wisconsin. STRATTEC de Mexico is located in Juarez, Mexico. ADAC-STRATTEC, LLC and STRATTEC POWER ACCESS LLC have operations in El Paso, Texas and Juarez and Leon, Mexico. Equity investments in Vehicle Access Systems Technology LLC (“VAST LLC”), for which we exercise significant influence but do not control and are not variable interest entities of STRATTEC, are accounted for using the equity method. VAST LLC consists primarily of four wholly owned subsidiaries in China, one wholly owned subsidiary in Brazil and one joint venture entity in India. The results of the VAST LLC foreign subsidiaries and joint venture are reported on a one-month lag basis. We have only one reporting segment.

In the opinion of management, the accompanying condensed consolidated balance sheets as of September 27, 2020 and June 28, 2020, which has been derived from our audited financial statements, and the related unaudited interim condensed consolidated financial statements included herein contain all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and in accordance with Rule 10-01 of Regulation S-X. All significant intercompany transactions have been eliminated.

Interim financial results are not necessarily indicative of operating results for an entire year. The information included in this Form 10-Q should be read in conjunction with the financial statements and notes thereto included in the STRATTEC SECURITY CORPORATION 2020 Form 10-K, which was filed with the Securities and Exchange Commission on September 3, 2020.

Risks and Uncertainties

  In December 2019, a novel strain of coronavirus (COVID-19) was reported in Wuhan, China. The coronavirus has since spread, and infections have been found in multiple countries around the world, including the United States. In March 2020, the World Health Organization recognized the COVID-19 outbreak as a pandemic based on the global spread of the disease, the severity of illnesses it causes and its effects on society. In response to the COVID-19 outbreak, the governments of many countries, states, cities and other geographic regions have taken preventative or protective actions, such as imposing restrictions on travel and business operations and advising or requiring individuals to limit or forego their time outside of their homes. Accordingly, the COVID-19 outbreak has severely restricted the level of economic activity in many countries, and continues to adversely impact global economic activity.

STRATTEC’s operating performance is subject to global economic conditions and levels of consumer spending specifically within the automotive industry. During the period from late March 2020 through mid-June 2020, the majority of our OEM customer assembly plant operations were completely closed including most of the supply chain. Additionally, during most of this same period, STRATTEC’s Mexico facilities were closed as a result of the Mexican government’s shutdown of non-essential businesses. Re-opening of our OEM customer facilities and our Mexico facilities began in June 2020, and the automotive industry continued to ramp-up throughout our fiscal quarter ended September 27, 2020 resulting in an increase in our net sales for the current fiscal quarter compared to our prior year fiscal quarter. While we expect continued increased sales over our prior year through our second fiscal quarter, such estimates are dependent on the severity of the ongoing impacts of COVID-19 and any worsening of the impact of the pandemic on society and specifically on the automotive industry.

The extent of the impact of the COVID-19 outbreak on our future operating results will depend on certain developments, including the duration, intensity and continued spread of the outbreak, regulatory and private sector responses, which may be precautionary, and the impact to our customers, workforce and suppliers, all of which are uncertain and cannot be predicted. These

6

changing conditions may also affect the estimates and assumptions made by management. Such estimates and assumptions affect, among other things, our long-lived asset valuations, equity investment valuation, assessment of our annual effective tax rate, valuation of deferred income taxes, assessment of excess and obsolete inventory reserves, and assessment of collectability of trade receivables.

New Accounting Standards

In June 2016, the FASB issued ASU 2016-13, Financial instruments – Credit Losses. This update revises the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. Originally, the update was effective for fiscal years, and for interim periods with those fiscal years, beginning after December 15, 2019, with early adoption permitted. In November 2019, the FASB issued ASU 2019-10, Financial instruments – Credit Losses, Derivatives and Hedging Activities, and Leases. This ASU defers the effective date of ASU 2016-13 for public companies that are considered smaller reporting companies as defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We are planning to adopt this standard in the first quarter of our fiscal 2024. We are currently evaluating the potential effects of adopting the new guidance on our consolidated financial statements.

In December 2019, the FASB issued an update to accounting for income taxes. The update enhances and simplifies various aspects of income tax accounting including hybrid tax regimes, tax basis step-up in goodwill obtained in a transaction that is not a business combination, separate financial statements of entities not subject to tax, the intraperiod tax allocation exception to the incremental approach, investment ownership changes from a subsidiary to an equity method investment and vice versa, interim-period accounting for enacted changes in tax law, and the year-to-date loss limitation in interim-period tax accounting. This accounting update is effective for annual and interim periods beginning after December 15, 2020, with early adoption permitted. We do not expect that the adoption of this pronouncement will have a material impact on our consolidated financial statements.

Derivative Instruments

We own and operate manufacturing operations in Mexico. As a result, a portion of our manufacturing costs are incurred in Mexican pesos, which causes our earnings and cash flows to fluctuate due to changes in the U.S. dollar/Mexican peso exchange rate. We have contracts with Bank of Montreal that provide for monthly Mexican peso currency forward contracts for a portion of our estimated peso denominated operating costs. Our objective in entering into currency forward contracts is to minimize our earnings volatility resulting from changes in exchange rates affecting the U.S. dollar cost of our Mexican operations. The Mexican peso forward contracts are not used for speculative purposes and are not designated as hedges. As a result, all currency forward contracts are recognized in our accompanying condensed consolidated financial statements at fair value and changes in the fair value are reported in current earnings as part of Other Expense, net.

The following table quantifies the outstanding Mexican peso forward contracts as of September 27, 2020 (thousands of dollars, except with respect to the average forward contractual exchange rate):

	Effective Dates	Notional Amount		Average Forward Contractual Exchange Rate		Fair Value
Buy MXP/Sell USD	October 14, 2020 - December 16, 2020	$	3,000		21.40	$	(146	)

The fair market value of all outstanding Mexican peso forward contracts in the accompanying Condensed Consolidated Balance Sheets as of the dates specified was as follows (thousands of dollars):

	September 27, 2020		June 28, 2020
Not Designated as Hedging Instruments:
Other Current Liabilities:
Mexican Peso Forward Contracts	$	146	$	480

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The pre-tax effects of the Mexican peso forward contracts are included in Other Expense, net on the accompanying Condensed Consolidated Statements of Income and Comprehensive Income and consisted of the following for the periods indicated below (thousands of dollars):

	Three Months Ended
	September 27, 2020			September 29, 2019
Not Designated as Hedging Instruments:
Realized Loss	$	(59	)	$	—
Unrealized Gain	$	335		$	—

Fair Value of Financial Instruments

The fair value of our cash and cash equivalents, accounts receivable, accounts payable and borrowings under our credit facilities approximated book value as of September 27, 2020 and June 28, 2020. Fair value is defined as the exchange price that would be received for an asset or paid for a liability (an exit price) in the principal or most advantageous market in an orderly transaction between market participants on the measurement date.

The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of September 27, 2020 (in thousands):  

	Fair Value Inputs
	Level 1 Assets: Quoted Prices In Active Markets		Level 2 Assets: Observable Inputs Other Than Market Prices		Level 3 Assets: Unobservable Inputs
Assets:
Rabbi Trust Assets:
Stock Index Funds:
Small Cap	$	270	$	—	$	—
Mid Cap		310		—		—
Large Cap		623		—		—
International		870		—		—
Fixed Income Funds		803		—		—
Cash and Cash Equivalents		—		3		—
Total Assets at Fair Value	$	2,876	$	3	$	—
Liabilities:
Mexican Peso Forward Contracts	$	—	$	146	$	—

The Rabbi Trust assets fund our amended and restated supplemental executive retirement plan and are included in Other Long-term Assets in the accompanying Condensed Consolidated Balance Sheets. Refer to discussion of Mexican peso forward contracts under Derivative Instruments above. The fair value of the Mexican peso forward contracts considers the remaining term, current exchange rate, and interest rate differentials between the Mexican peso and the U.S. dollar.   

Investment in Joint Ventures and Majority Owned Subsidiaries

We participate in certain Alliance Agreements with WITTE Automotive (“WITTE”) and ADAC Automotive (“ADAC”). WITTE, of Velbert, Germany, is a privately held automotive supplier. WITTE designs, manufactures and markets automotive components, including locks and keys, hood latches, rear compartment latches, seat back latches, door handles and specialty fasteners. WITTE’s primary market for these products has been Europe. ADAC, of Grand Rapids, Michigan, is a privately held automotive supplier and manufactures engineered products, including door handles and other automotive trim parts, utilizing plastic injection molding, automated painting and various assembly processes.  

The Alliance Agreements include a set of cross-licensing agreements for the manufacture, distribution and sale of WITTE products by STRATTEC and ADAC in North America, and the manufacture, distribution and sale of STRATTEC and ADAC products by WITTE in Europe. Additionally, a joint venture company, Vehicle Access Systems Technology LLC (“VAST LLC”), in which WITTE, STRATTEC and ADAC each hold a one-third interest, exists to seek opportunities to manufacture and sell each company’s products in areas of the world outside of North America and Europe.  

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VAST LLC has investments in Sistema de Acesso Veicular Ltda, VAST Fuzhou, VAST Great Shanghai, VAST Shanghai Co., VAST Jingzhou Co. Ltd., and Minda-VAST Access Systems. Sistema de Acesso Veicular Ltda is located in Brazil and services customers in South America. VAST Fuzhou, VAST Great Shanghai, VAST Shanghai Co., and VAST Jingzhou Co. Ltd. (collectively known as VAST China), provide a base of operations to service each VAST partner’s automotive customers in the Asian market. Minda-VAST Access Systems is based in Pune, India and is a 50:50 joint venture between VAST LLC and Minda Management Services Limited, an affiliate of both Minda Corporation Limited and Spark Minda, Ashok Minda Group of New Delhi, India (collectively “Minda”). Minda and its affiliates cater to the needs of all major car, motorcycle, commercial vehicle, tractor and off-road vehicle manufacturers in India. They are a leading manufacturer in the Indian marketplace of security & access products, handles, automotive safety, restraint systems, driver information and telematics systems for both OEMs and the aftermarket. VAST LLC also maintains branch offices in South Korea and Japan in support of customer sales and engineering requirements.

The VAST LLC investments are accounted for using the equity method of accounting and the results of the VAST LLC foreign subsidiaries and joint venture are reported on a one-month lag basis. The activities related to the VAST LLC joint ventures resulted in equity earnings of joint ventures to STRATTEC of $825,000 during the three months ended September 27, 2020 and $487,000 during the three months ended September 29, 2019. During the three months ended September 27, 2020 and September 29, 2019, no capital contributions were made to VAST LLC by any of the members.

ADAC-STRATTEC LLC, a Delaware limited liability company, was formed in fiscal year 2007 to support injection molding and door handle assembly operations in Mexico. ADAC-STRATTEC LLC was 51 percent owned by STRATTEC and 49 percent owned by ADAC for all periods presented in this report. An additional Mexican entity, ADAC-STRATTEC de Mexico, is wholly owned by ADAC-STRATTEC LLC. ADAC-STRATTEC LLC’s financial results are consolidated with the financial results of STRATTEC and resulted in increased net income to STRATTEC of approximately $1.4 million during the three months ended September 27, 2020 and approximately $1.0 million during the three months ended September 29, 2019. ADAC STRATTEC LLC incurs an engineering, research and design fee as well as a sales fee with ADAC. Such fees are calculated as a percentage of net sales, are included in the consolidated results of STRATTEC, and totaled $2.4 million in the three months ended September 27, 2020 and $2.2 million in the three months ended September 29, 2019. Additionally, ADAC-STRATTEC LLC sells production parts to ADAC. Sales to ADAC are included in the consolidated results of STRATTEC and totaled $3.1 million in the three months ended September 27, 2020 and $3.7 million in the three months ended September 29, 2019.

STRATTEC POWER ACCESS LLC (“SPA”) was formed in fiscal year 2009 to supply the North American portion of the power sliding door, lift gate and deck lid system access control products which were acquired from Delphi Corporation. SPA was 80 percent owned by STRATTEC and 20 percent owned by WITTE for all periods presented in this report. An additional Mexican entity, STRATTEC POWER ACCESS de Mexico, is wholly owned by SPA. The financial results of SPA are consolidated with the financial results of STRATTEC and resulted in increased net income to STRATTEC of approximately $685,000 during the three months ended September 27, 2020 and $266,000 during the three months ended September 29, 2019. STRATTEC purchases production parts from WITTE. These purchases totaled $83,000 during the three months ended September 27, 2020 and $393,000 during the three months ended September 29, 2019.

Equity Earnings of Joint Ventures

As discussed above under Investment in Joint Ventures and Majority Owned Subsidiaries, we hold a one-third interest in a joint venture company, VAST LLC. Our investment in VAST LLC, for which we exercise significant influence but do not control and is not a variable interest entity of STRATTEC, is accounted for using the equity method. The results of the VAST LLC foreign subsidiaries and joint ventures are reported on a one-month lag basis. We assess the impairment of equity investments whenever events or changes in circumstances indicate that a decrease in value of the investment has occurred that is other than temporary.

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

	Three Months Ended
	September 27, 2020			September 29, 2019
Net Sales	$	50,411		$	42,567
Cost of Goods Sold		40,591			34,658
Gross Profit		9,820			7,909
Engineering, Selling and Administrative Expenses		6,603			6,681
Income From Operations		3,217			1,228
Other (Expense) Income, net		(149	)		860
Income before Provision for Income Taxes		3,068			2,088
Provision for Income Taxes		592			628
Net Income	$	2,476		$	1,460
STRATTEC’s Equity Earnings of VAST LLC	$	825		$	487

We have sales of component parts to VAST LLC, purchases of component parts from VAST LLC, expenses charged to VAST LLC for engineering and accounting services and expenses charged to us from VAST LLC for general headquarters expenses.  The following table summarizes these related party transactions with VAST LLC for the periods indicated below (in thousands):

	Three Months Ended
	September 27, 2020		September 29, 2019
Sales to VAST LLC	$	1,216	$	891
Purchases from VAST LLC	$	187	$	97
Expenses Charged to VAST LLC	$	507	$	831
Expenses Charged from VAST LLC	$	292	$	226

Leases

We have an operating lease for our El Paso, Texas finished goods and service parts distribution warehouse that has a current lease term through October 2023. This lease includes renewal terms that can extend the lease term for five additional years. For purposes of calculating operating lease obligations, we included the option to extend the lease as it is reasonably certain that we will exercise such option. The lease does not contain material residual value guarantees or restrictive covenants. Operating lease expense is recognized on a straight-line basis over the lease term.

As the lease does not provide an implicit rate, we used our incremental borrowing rate at lease commencement to determine the present value of our lease payments. The incremental borrowing rate is an entity-specific rate which represents the rate of interest we would pay to borrow over a similar term with similar payments.

The operating lease asset and obligation related to our El Paso warehouse lease included in the accompanying Condensed Consolidated Balance Sheet are presented below (in thousands):

	September 27, 2020
Right-of Use Asset Under Operating Lease:
Other Long-Term Assets	$	3,668
Lease Obligation Under Operating Lease:
Current Liabilities: Accrued Liabilities: Other	$	354
Other Long-Term Liabilities		3,314
	$	3,668

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Future minimum lease payments, by our fiscal year, including options to extend that are reasonably certain to be exercised, under the non-cancelable lease are as follows as of September 27, 2020 (in thousands):

2021 (for the remaining nine months)	$	357
2022		484
2023		497
2024		509
2025		522
Thereafter		1,834
Total Future Minimum Lease Payments		4,203
Less: Imputed Interest		(535	)
Total Lease Obligations	$	3,668

Cash flow information related to the operating lease is shown below (in thousands):

	Three Months Ended
	September 27, 2020
Operating Cash Flows:
Cash Paid Related to Operating Lease Obligation	$	116

The weighted average lease term and discount rate for the El Paso, Texas operating lease are shown below:

	September 27, 2020
Weighted Average Remaining Lease Term (in years)		8.1
Weighted Average Discount Rate		3.3	%

Operating lease expense for the three month periods ended September 27, 2020 and September 29, 2019 totaled $116,000 and $113,000, respectively.

Credit Facilities

STRATTEC has a $40 million secured revolving credit facility (the “STRATTEC Credit Facility”) with BMO Harris Bank. ADAC-STRATTEC LLC has a $25 million secured revolving credit facility (the “ADAC-STRATTEC Credit Facility”) with BMO Harris Bank N.A., which is guaranteed by STRATTEC. The credit facilities both expire August 1, 2022. Borrowings under either credit facility are secured by our U.S. cash balances, accounts receivable, inventory, and fixed assets. Interest on borrowings under the STRATTEC Credit Facility is at varying rates based, at our option, on the London Interbank Offering Rate (“LIBOR”) plus 1.0 percent or the bank’s prime rate. Interest on borrowings under the ADAC-STRATTEC Credit Facility is at varying rates based, at our option, on LIBOR plus 1.25 percent or the bank’s prime rate. Both credit facilities contain a restrictive financial covenant that requires the applicable borrower to maintain a minimum net worth level. The ADAC-STRATTEC Credit Facility includes an additional restrictive financial covenant that requires the maintenance of a minimum fixed charge coverage ratio. As of September 27, 2020, we were in compliance with all financial covenants required by these credit facilities.

Outstanding borrowings under the credit facilities were as follows (in thousands): 

	September 27, 2020		June 28, 2020
STRATTEC Credit Facility	$	13,000	$	18,000
ADAC-STRATTEC Credit Facility		17,000		17,000
	$	30,000	$	35,000

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Average outstanding borrowings and the weighted average interest rate under each credit facility referenced above were as follows for each period presented (in thousands):

	Three Months Ended
	Average Outstanding Borrowings				Weighted Average Interest Rate
	September 27, 2020		September 29, 2019		September 27, 2020			September 29, 2019
STRATTEC Credit Facility	$	17,231	$	16,033		1.2	%		3.3	%
ADAC-STRATTEC Credit Facility	$	17,000	$	23,473		1.4	%		3.5	%

Commitments and Contingencies

We are from time to time subject to various legal actions and claims incidental to our business, including those arising out of alleged defects, alleged breaches of contracts, product warranties, intellectual property matters and employment related matters. It is our opinion that the outcome of such matters will not have a material adverse impact on our consolidated financial position, results of operations or cash flows. With respect to warranty matters, although we cannot ensure that future costs of warranty claims by customers will not be material, we believe our established reserves are adequate to cover potential warranty settlements.

In 1995, we recorded a provision of $3 million for estimated costs to remediate an environmental contamination site at our Milwaukee facility. The facility was contaminated by a solvent spill, which occurred in 1985, from a former above ground solvent storage tank located on the east side of the facility. The reserve was originally established based on third party estimates to adequately cover the cost for active remediation of the contamination. Due to changing technology and related costs associated with active remediation of the contamination, in fiscal 2010, the reserve was adjusted based on updated third party estimates to adequately cover the cost for active remediation of the contamination. Additionally, in fiscal 2016, we obtained updated third party estimates for adequately covering the cost for active remediation of this contamination. Based upon the updated estimates, no further adjustment to the reserve was required. From 1995 through September 27, 2020, costs of approximately $618,000 have been incurred related to the installation of monitoring wells on the property and ongoing monitoring costs. We monitor and evaluate the site with the use of these groundwater monitoring wells. An environmental consultant samples these wells one or two times a year to determine the status of the contamination and the potential for remediation of the contamination by natural attenuation, the dissipation of the contamination over time to concentrations below applicable standards. If such sampling evidences a sufficient degree of and trend toward natural attenuation of the contamination at the site, we may be able to obtain a closure letter from the regulatory authorities resolving the issue without the need for active remediation. If a sufficient degree and trend toward natural attenuation is not evidenced by sampling, a more active form of remediation beyond natural attenuation may be required. The sampling has not yet satisfied all of the requirements for closure by natural attenuation. As a result, sampling continues and the reserve remains at an amount to reflect our estimated cost of active remediation. The reserve is not measured on a discounted basis. We believe, based on findings-to-date and known environmental regulations, that the remaining environmental reserve of $1.3 million at September 27, 2020 is adequate.

Shareholders’ Equity

A summary of activity impacting shareholders’ equity for the three month periods ended September 27, 2020 and September 29, 2019 were as follows (in thousands):

	Three Months Ended September 27, 2020
	Total Shareholders’ Equity			Common Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss			Treasury Stock			Non-Controlling Interest
Balance, June 28, 2020	$	175,441		$	74	$	97,977	$	211,940	$	(22,113	)	$	(135,656	)	$	23,219
Net Income		10,073			—		—		8,008		—			—			2,065
Dividend Declared – Non-    controlling Interests of    Subsidiaries		(490	)		—		—		—		—			—			(490	)
Translation Adjustments		1,699			—		—		—		1,378			—			321
Stock Based Compensation		208			—		208		—		—			—			—
Pension and Postretirement    Adjustment, Net of    Tax		70			—		—		—		70			—			—
Employee Stock Purchases		19			—		3		—		—			16			—
Balance, September 27, 2020	$	187,020		$	74	$	98,188	$	219,948	$	(20,665	)	$	(135,640	)	$	25,115

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	Three Months Ended September 29, 2019
	Total Shareholders’ Equity			Common Stock		Capital in Excess of Par Value		Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Non-Controlling Interest
Balance, June 30, 2019	$	187,816		$	73	$	96,491	$	221,117		$	(18,568	)	$	(135,725	)	$	24,428
Net Income		2,680			—		—		1,244			—			—			1,436
Dividend Declared		(522	)		—		—		(522	)		—			—			—
Dividend Declared – Non-    controlling Interests of    Subsidiaries		(980	)		—		—		—			—			—			(980	)
Translation Adjustments		(1,448	)		—		—		—			(1,196	)		—			(252	)
Stock Based Compensation		413			—		413		—			—			—			—
Pension and Postretirement     Adjustment, Net of     Tax		73			—		—		—			73			—			—
Stock Option Exercises		222			1		221		—			—			—			—
Employee Stock Purchases		17			—		3		—			—			14			—
Balance, September 29, 2019	$	188,271		$	74	$	97,128	$	221,839		$	(19,691	)	$	(135,711	)	$	24,632

Revenue from Contracts with Customers

We generate revenue from the production of parts sold to automotive and light-truck Original Equipment Manufacturers (“OEMs”), or Tier 1 suppliers at the direction of the OEM, under long-term supply agreements supporting new vehicle production. Such agreements also require related production of service parts subsequent to the initial vehicle production periods. Additionally, we generate revenue from the production of parts sold in aftermarket service channels and to non-automotive commercial customers.

Contract Balances:

We have no material contract assets as of September 27, 2020. Contract liability balances primarily include discounts recognized as a reduction in sales at the point of revenue recognition, but which will be applied by the customer agreement after the end of the reporting period. Contract liability balances are included in Other Accrued Liabilities in the accompanying Condensed Consolidated Balance Sheets. The activity related to contract liability balances during the three month period ended September 27, 2020 was as follows (thousands of dollars):

Balance, June 28, 2020	$	373
Discounts Recorded as a Reduction in Sales		118
Payments of Discounts to Customers		(129	)
Other		40
Balance, September 27, 2020	$	402

Revenue by Product Group and Customer:  

Revenue by product group for the periods presented was as follows (thousands of dollars):

	Three Months Ended
	September 27, 2020		September 29, 2019
Door Handles & Exterior Trim	$	34,091	$	31,391
Keys & Locksets		32,736		32,469
Power Access		20,620		19,458
Latches		13,835		13,897
Aftermarket & OE Service		13,137		10,913
Driver Controls		9,787		9,785
Other		2,028		2,049
	$	126,234	$	119,962

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Revenue by customer or customer group for the periods presented was as follows (thousands of dollars):

	Three Months Ended
	September 27, 2020		September 29, 2019
General Motors Company	$	37,756	$	33,838
Fiat Chrysler Automobiles		25,083		25,482
Ford Motor Company		15,846		15,812
Commercial and Other OEM     Customers		21,434		21,346
Tier 1 Customers		17,495		17,747
Hyundai / Kia		8,620		5,737
	$	126,234	$	119,962

Other Expense, net

Net other expense included in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income primarily included foreign currency transaction gains and losses, realized and unrealized losses on our Mexican peso currency forward contracts, net periodic pension and postretirement benefit costs, other than the service cost component, related to our supplemental executive retirement plan (“SEPR”) and postretirement plans and Rabbi Trust gains and losses. Foreign currency transaction gains and losses resulted from activity associated with foreign denominated assets held by our Mexican subsidiaries. We entered into the Mexican Peso currency forward contracts described above to minimize earnings volatility resulting from changes in exchange rates affecting the U.S. dollar cost of our Mexican operations. Unrealized gains and losses on the peso forward contracts recognized as a result of mark-to-market adjustments as of September 27, 2020 may or may not be realized in future periods, depending on the actual Mexican peso to U.S. dollar exchange rates experienced during the balance of the contract period. The Rabbi Trust assets fund our amended and restated supplemental executive retirement plan. The investments held in this Trust are considered trading securities.

The impact of these items for each of the periods presented was as follows (in thousands):

	Three Months Ended
	September 27, 2020			September 29, 2019
Foreign Currency Transaction Loss	$	(399	)	$	(85	)
Unrealized Gain on Peso Forward    Contracts		335			—
Realized Loss on Peso Forward Contracts		(59	)		—
Pension and Postretirement Plans Cost		(105	)		(117	)
Rabbi Trust Loss		(57	)		(2	)
Other		25			107
	$	(260	)	$	(97	)

Income Taxes

Our effective tax rate was 13.5% and 10.0% for the three months ended September 27, 2020 and September 29, 2019, respectively. Effective July 20, 2020, the U.S Treasury Department finalized and enacted previously proposed regulations regarding the Global Intangible Low Taxed Income (GILTI) tax provisions of the Tax Cuts and Jobs Act of 2017 (TCJA). Prior to this enactment, GILTI represented a significant U.S. income tax on our foreign earnings during fiscal 2020. With the enactment of these final regulations, we are now eligible for an exclusion from GILTI since we meet the provisions for the GILTI High-Tax exception included in the final regulations. In addition, the enactment of the new regulations and our eligibility for the GILTI High-Tax exception are retroactive to the original enactment of the GILTI tax provision, which includes our 2020 fiscal year. As a result of the newly enacted regulations, we recorded an income tax benefit of $675,000 during the three month period ended September 27, 2020. During the three month period ended September 29, 2019, our effective tax rate was impacted by the discrete impact of the non-cash compensation expense, as discussed under Pension and Postretirement Benefits below. Our effective tax rate differs from the statutory tax rate due to the GILTI provisions, our available R&D tax credit and the non-controlling interest portion of our pre-tax income. The non-controlling interest impacts the effective tax rate as ADAC-STRATTEC LLC and STRATTEC POWER ACCESS LLC entities are taxed as partnerships for U.S. tax purposes.

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STRATTEC is currently subject to state income tax examinations in our Wisconsin jurisdiction for fiscal years 2015, 2016, 2017, and 2018. The audit is currently in process and preliminary results are not yet available.

Earnings Per Share

Basic earnings per share is computed on the basis of the weighted average number of shares of common stock outstanding during the applicable period. Diluted earnings per share is computed on the basis of the weighted average number of shares of common stock plus the potential dilutive common shares outstanding during the applicable period using the treasury stock method. Potential dilutive common shares include outstanding stock options and unvested restricted stock awards.

A reconciliation of the components of the basic and diluted per-share computations follows (in thousands, except per share amounts):  

	Three Months Ended
	September 27, 2020						September 29, 2019
	Net Income		Shares		Per-Share Amount		Net Income		Shares		Per-Share Amount
Basic Earnings Per Share	$	8,008		3,765	$	2.13	$	1,244		3,710	$	0.34
Stock Option and Restricted    Stock Awards		—		23				—		18
Diluted Earnings Per Share	$	8,008		3,788	$	2.11	$	1,244		3,728	$	0.33

The calculation of earnings per share excluded 90,860 share-based payment awards for both of the quarters ended September 27, 2020 and September 29, 2019 because their inclusion would have been anti-dilutive.

Stock-based Compensation

We maintain an omnibus stock incentive plan. This plan provides for the granting of stock options, shares of restricted stock and stock appreciation rights. As of September 27, 2020, the Board of Directors had designated 1,850,000 shares of common stock available for the grant of awards under the plan. Remaining shares available to be granted under the plan as of September 27, 2020 were 76,434. Awards that expire or are canceled without delivery of shares become available for re-issuance under the plan. We issue new shares of common stock to satisfy stock option exercises. We included a proposal at our Annual Meeting of Shareholders held on October 6, 2020 to increase the number of shares available to be granted under this omnibus stock incentive plan by an additional 150,000 shares, which proposal was approved by our shareholders at the Annual Meeting.

Nonqualified and incentive stock options and shares of restricted stock have been granted to our officers, outside directors and specified associates under our stock incentive plan. Stock options granted under the plan may not be issued with an exercise price less than the fair market value of the common stock on the date the option is granted. Stock options become exercisable as determined at the date of grant by the Compensation Committee of the Board of Directors. The options expire 10 years after the grant date unless an earlier expiration date is set at the time of grant. The options vest 1 to 4 years after the date of grant as determined by the Compensation Committee of the Board of Directors. Shares of restricted stock granted under the plan are subject to vesting criteria determined by the Compensation Committee of the Board of Directors at the time the shares are granted and have a minimum vesting period of one year from the date of grant. Unvested restricted shares granted have voting rights, regardless of whether the shares are vested or unvested, but only have the right to receive cash dividends after such shares become vested. Restricted stock grants vest 1 to 5 years after the date of grant as determined by the Compensation Committee of the Board of Directors.

The fair value of each stock option grant was estimated as of the date of grant using the Black-Scholes pricing model. The fair value of each restricted stock grant was based on the market price of the underlying common stock as of the date of grant. The resulting compensation cost for fixed awards with graded vesting schedules is amortized on a straight line basis over the vesting period for the entire award.

A summary of stock option activity under our stock incentive plan for the three months ended September 27, 2020 was as follows:

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	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in thousands)
Outstanding, June 28, 2020		90,860	$	35.88
Outstanding, September 27, 2020		90,860	$	35.88		2.2	$	—
Exercisable, September 27, 2020		90,860	$	35.88		2.2	$	—

The intrinsic value of stock options exercised and the fair value of stock options that vested during the three month periods presented below were as follows (in thousands):

	Three Months Ended
	September 27, 2020		September 29, 2019
Intrinsic Value of Options Exercised	$	—	$	37
Fair Value of Stock Options Vesting	$	—	$	—

No options were granted during the three month periods ended September 27, 2020 or September 29, 2019.  

A summary of restricted stock activity under our omnibus stock incentive plan for the three months ended September 27, 2020 was as follows:

	Shares			Weighted Average Grant Date Fair Value
Nonvested Balance, June 28, 2020		69,394		$	30.59
Granted		39,900		$	21.20
Vested		(34,669	)	$	34.95
Nonvested Balance, September 27, 2020		74,625		$	23.54

As of September 27, 2020, all compensation cost related to outstanding stock options granted under our omnibus stock incentive plan has been recognized. As of September 27, 2020, there was approximately $1.4 million of total unrecognized compensation cost related to unvested restricted stock grants outstanding under the plan. This cost is expected to be recognized over a remaining weighted average period of 1.1 years. Total unrecognized compensation cost will be adjusted for any future changes in estimated and actual forfeitures of awards granted under our omnibus stock incentive plan.

Pension and Postretirement Benefits

We had a qualified, noncontributory defined benefit pension plan (“Qualified Pension Plan”) covering substantially all U.S. associates employed by us prior to January 1, 2010. Effective December 31, 2009, the Board of Directors amended the Qualified Pension Plan to freeze benefit accruals and future eligibility. The Board of Directors subsequently approved to proceed with the termination of the Qualified Pension Plan. During the quarter ended December 30, 2018, we completed a substantial portion of terminating the Qualified Pension Plan. In connection with the termination of the Qualified Pension Plan, distributions from the Qualified Pension Plan trust were made during the three month period ended December 30, 2018 to participants who elected lump-sum distributions. Additionally, during the three months ended December 30, 2018, we entered into an agreement with an insurance company to purchase from us, through a series of annuity contracts, our remaining obligations under the Qualified Pension Plan and, as a result, we settled the remaining obligations under the plan for the remaining participants utilizing funds available in the Qualified Pension Plan trust. No additional cash contributions to the trust were required to settle the pension obligations. As a result of these actions, a non-cash pre-tax settlement charge of $31.9 million was recorded during fiscal 2019. A non-cash compensation expense charge of $4.2 million was also recorded during fiscal 2019 related to the future transfer of the excess assets in the Qualified Pension Plan to a STRATTEC defined contribution plan for subsequent pay-out to eligible STRATTEC employees based on a plan approved by the Board of Directors in June 2019. An additional $4.8 million non-cash compensation expense charge related to the final transfer and pay-out of the excess Qualified Pension Plan assets was recorded during our fiscal 2020, of which $2.2 million of non-cash compensation expense was recorded during the three month period ended September 29, 2019. As of December 29, 2019, the excess Qualified Pension Plan assets were transferred to our defined contribution plan and distributed to eligible STRATTEC employees, which completed the full termination of the Qualified Pension Plan.

We have a noncontributory supplemental executive retirement plan (“SERP”), which is a nonqualified defined benefit plan. The SERP is funded through a Rabbi Trust with TMI Trust Company. Under the SERP, as amended December 31, 2013, participants

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received an accrued lump-sum benefit as of December 31, 2013, which was credited to each participant’s account. Subsequent to December 31, 2013, each eligible participant receives a supplemental retirement benefit equal to the foregoing lump sum benefit, plus an annual benefit accrual equal to 8 percent of the participant’s base salary and cash bonus, plus annual credited interest on the participant’s account balance. All then current participants as of December 31, 2013 are fully vested in their account balances with any new individuals participating in the SERP effective on or after January 1, 2014 being subject to a five year vesting period. The SERP, which is considered a nonqualified defined benefit plan under applicable rules and regulations of the Internal Revenue Code, will continue to be funded through use of a Rabbi Trust to hold investment assets to be used in part to fund any future required lump sum benefit payments to participants. The Rabbi Trust assets had a value of $2.9 million at both September 27, 2020 and June 28, 2020 and are included in Other Long-Term Assets in the accompanying Condensed Consolidated Balance Sheets.

We also sponsor a postretirement health care plan for all U.S. associates hired prior to June 1, 2001. The expected cost of retiree health care benefits is recognized during the years the associates who are covered under the plan render service. Effective January 1, 2010, an amendment to the postretirement health care plan limited the benefit for future eligible retirees to $4,000 per plan year and the benefit is further subject to a maximum five year coverage period based on the associate’s retirement date and age. The postretirement health care plan is unfunded.

The service cost component of the net periodic benefit costs under these plans is allocated between Cost of Goods Sold and Engineering, Selling and Administrative Expenses while the remaining components of the net periodic benefit costs are included in Other Expense, net in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income.

The following table summarizes the net periodic benefit cost recognized for each of the periods indicated under these plans (in thousands):

	SERP Benefits				Postretirement Benefits
	Three Months Ended				Three Months Ended
	September 27, 2020		September 29, 2019		September 27, 2020			September 29, 2019
Service Cost	$	16	$	19	$	3		$	3
Interest Cost		10		15	4				6
Amortization of Prior Service Credit		—		—		(2	)		(7	)
Amortization of Unrecognized Net Loss		3		4	89				99
Net Periodic Benefit Cost	$	29	$	38	$	94		$	101

Accumulated Other Comprehensive Loss

The following tables summarize the changes in accumulated other comprehensive loss (“AOCL”) for each period presented (in thousands):

	Three Months Ended September 27, 2020
	Foreign Currency Translation Adjustments			Retirement and Postretirement Benefit Plans			Total
Balance, June 28, 2020	$	20,136		$	1,977		$	22,113
Other Comprehensive Income Before Reclassifications		(1,699	)		—			(1,699	)
Net Other Comprehensive Income Before       Reclassifications		(1,699	)		—			(1,699	)
Reclassifications:
Prior Service Credits (A)		—			2			2
Unrecognized Net Loss (A)		—			(92	)		(92	)
Total Reclassifications Before Tax		—			(90	)		(90	)
Income Tax		—			20			20
Net Reclassifications		—			(70	)		(70	)
Other Comprehensive Income		(1,699	)		(70	)		(1,769	)
Other Comprehensive Income Attributable to Non-    Controlling Interest		(321	)		—			(321	)
Balance, September 27, 2020	$	18,758		$	1,907		$	20,665

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	Three Months Ended September 29, 2019
	Foreign Currency Translation Adjustments		Retirement and Postretirement Benefit Plans			Total
Balance, June 30, 2019	$	16,317	$	2,251		$	18,568
Other Comprehensive Loss Before Reclassifications		1,448		—			1,448
Net Other Comprehensive Loss Before       Reclassifications		1,448		—			1,448
Reclassifications:
Prior Service Credits (A)		—		7			7
Unrecognized Net Loss (A)		—		(103	)		(103	)
Total Reclassifications Before Tax		—		(96	)		(96	)
Income Tax		—		23			23
Net Reclassifications		—		(73	)		(73	)
Other Comprehensive Income		1,448		(73	)		1,375
Other Comprehensive Income Attributable to Non-    Controlling Interest		252		—			252
Balance, September 29, 2019	$	17,513	$	2,178		$	19,691

(A) Amounts reclassified are included in the computation of net periodic benefit cost, which is included in Other Expense, net in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income. See Pension and Postretirement Benefits note to these Notes to Condensed Consolidated Financial Statements above.

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Item 2

STRATTEC SECURITY CORPORATION AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis should be read in conjunction with STRATTEC SECURITY CORPORATION’s accompanying Condensed Consolidated Financial Statements and Notes thereto and its 2020 Form 10-K, which was filed with the Securities and Exchange Commission on September 3, 2020. Unless otherwise indicated, all references to quarters and years refer to fiscal quarters and fiscal years.

Outlook

Refer to discussion of Risks and Uncertainties included in the Notes to Condensed Consolidated Financial Statements beginning on page 6 of this Form 10-Q.

During the fourth quarter of our fiscal year ended June 2020, we responded to the COVID-19 pandemic and the temporary OEM customer plant shutdowns by implementing a permanent reduction in our salaried workforce, instituting temporary layoffs, reducing working hours, allowing (and in some cases encouraging) remote working from home, temporarily suspending our quarterly cash dividend, delaying capital expenditures and eliminating nonessential operating costs, all to preserve cash flow. In addition, during the fourth quarter of the prior fiscal year, we produced additional finished goods inventory in anticipation of our OEM customers pipeline fill to their dealers once vehicle production began starting up in June 2020.

During the first quarter ended September 2020, the Company experienced a strong sales recovery as our customers ramped up vehicle production as they restarted their assembly plant operations in order to replenish low inventory levels at the dealers. Likewise, our manufacturing operations in Milwaukee, WI and in Mexico ramped up production to meet this increased sales demand. However, these actions were, and continue to be hampered by, requirements imposed by the Mexican Government at our Mexican facilities that continue to limit operating capacity in Mexico due to COVID-19 which may in the future impact our ability to meet customer sales demand depending upon their order levels.

The sales outlook over the next few quarters appears strong as our customers continue to restock dealer inventories. However, this sales demand going forward is contingent on the impact and severity of the COVID-19 pandemic, including any potential worsening thereof, on the North American and overall global economy.

Analysis of Results of Operations

Three months ended September 27, 2020 compared to the three months ended September 29, 2019

	Three Months Ended
	September 27, 2020		September 29, 2019
Net Sales (in millions)	$	126.2	$	120.0

Net sales to each of our customers or customer groups in the current year quarter and prior year quarter were as follows (in millions): 

	Three Months Ended
	September 27, 2020		September 29, 2019
General Motors Company	$	37.8	$	33.8
Fiat Chrysler Automobiles		25.1		25.5
Ford Motor Company		15.8		15.8
Commercial and Other OEM Customers		21.4		21.4
Tier 1 Customers		17.5		17.8
Hyundai / Kia		8.6		5.7
	$	126.2	$	120.0

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The increase in sales to General Motors Company in the current year quarter as compared to the prior year quarter was attributed to higher production volumes on models for which we supply components. The impact of the UAW strike reduced net sales by an estimated $3.0 million in the prior year quarter. Sales to Fiat Chrysler Automobiles decreased slightly in the current year quarter as compared to the prior year quarter due to lower vehicle production volumes on the FCA minivans for which we supply components. The Dodge Grand Caravan minivan went out of production during July 2020. Sales to Ford Motor Company, Tier 1 Customers and Commercial and Other OEM Customers were flat in the current year quarter compared to the prior year quarter. Sales to Tier 1 Customers, Commercial and Other OEM Customers primarily represent purchasers of vehicle access control products, such as latches, key fobs, driver controls, steering column locks and door handles, that we have developed in recent years to complement our historic core business of locks and keys. The increased sales to Hyundai / Kia in the current year quarter as compared to the prior year quarter were due to higher levels of production on their new, recently launched Kia Sedona minivan for which we supply components.

	Three Months Ended
	September 27, 2020		September 29, 2019
Cost of Goods Sold (in millions)	$	103.7	$	104.1

Direct material costs are the most significant component of our cost of goods sold and comprised $70.5 million or 68.0 percent of our cost of goods sold in the current year quarter compared to $68.5 million or 65.8 percent of our cost of goods sold in the prior year quarter. The increase in our direct material costs between these quarters of $2.0 million or 2.9 percent was due to increased sales volumes in the current year quarter as compared to the prior year quarter and increased obsolescence costs in the current year quarter resulting from the discontinuance of a customer program. The increase in our direct material costs as a percentage of our cost of goods sold in the current year quarter as compared to the prior year quarter was due to reduced labor and overhead costs between periods as discussed below.

The remaining components of our cost of goods sold consist of labor and overhead costs which decreased $2.4 million or 6.7 percent to $33.2 million in the current year quarter from $35.6 million in the prior year quarter. The prior year quarter costs included a $1.4 million non-cash compensation expense charge related to the transfer of excess Qualified Pension Plan assets as described under Pension and Postretirement Benefits within Notes to Condensed Consolidated Financial Statement included herein. Additionally, labor and overhead costs in the current year quarter were favorably impacted by cost improvements implemented at our Milwaukee, WI and Mexico facilities, along with a favorable Mexican peso to U.S. dollar exchange rate affecting our operations in Mexico, which favorable impacts were partially offset by an increase in the variable portion of our labor and overhead costs as a result of the increase in sales volumes in the current year quarter as compared to the prior year quarter. The U.S. dollar value of our Mexican operations was favorably impacted by approximately $2.0 million in the current year quarter as compared to the prior year quarter due to a favorable Mexican peso to U.S. dollar exchange rate between these quarterly periods. The average U.S. dollar / Mexican peso exchange rate increased to approximately 22.21 pesos to the dollar in the current year quarter from approximately 19.61 pesos to the dollar in the prior year quarter.

	Three Months Ended
	September 27, 2020			September 29, 2019
Gross Profit (in millions)	$	22.5		$	15.9
Gross Profit as a percentage of net sales		17.8	%		13.2	%

Gross profit dollars increased in the current year quarter as compared to the prior year quarter as a result of both an increase in sales and an increase in cost of goods sold between periods, as discussed above. Gross profit as a percentage of net sales increased between periods. The increase was due to the prior year quarter non-cash compensation expense charge as well as cost improvements implemented at our Milwaukee and Mexico production facilities in the current year quarter as compared to the prior year quarter and a favorable Mexican peso to U.S. dollar exchange rate affecting our operations in Mexico as discussed above.

Engineering, selling and administrative expenses in the current year quarter and prior year quarter were as follows:

	Three Months Ended
	September 27, 2020			September 29, 2019
Expenses (in millions)	$	11.3		$	13.0
Expenses as a percentage of net sales		9.0	%		10.8	%

The decrease in engineering, selling and administrative expenses in the current year quarter decreased in comparison to the prior year quarter due to lower new product development costs, a temporary reduction in salary work force wages, permanent layoffs, and improved operating expense management in the current year quarter as compared to the prior year quarter. Additionally, the prior year quarter costs included an $862,000 non-cash compensation expense charge related to the transfer of excess Qualified Pension

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Plan assets as described under Pension and Postretirement Benefits within Notes to Condensed Consolidated Financial Statement included herein.

Income from operations was $11.2 million in the current year quarter compared to $2.9 million in the prior year quarter due to an increase in gross profit margin dollars and a decrease in engineering, selling and administrative expenses between quarters, all as discussed above.

The equity earnings of joint ventures was $825,000 in the current year quarter compared to $484,000 in the prior year quarter. Higher profitability from our Vehicle Access Systems Technology LLC (“VAST LLC”) joint ventures is due to higher profitability in our VAST China operation between periods. Our VAST LLC joint ventures in India and Brazil continue to report losses due to our limited amount of business in both regions.

Included in Other Expense, net in the current year quarter and prior year quarter were the following items (in thousands): 

	Three Months Ended
	September 27, 2020			September 29, 2019
Foreign Currency Transaction Loss	$	(399	)	$	(85	)
Unrealized Gain on Peso Forward Contracts		335			—
Realized Loss on Peso Forward Contracts		(59	)		—
Pension and Postretirement Plans Cost		(105	)		(117	)
Rabbi Trust Loss		(57	)		(2	)
Other		25			107
	$	(260	)	$	(97	)

Foreign currency transaction losses during the current year quarter and prior year quarter resulted from activity associated with foreign denominated assets held by our Mexican subsidiaries. We entered into the Mexican peso currency forward contracts to minimize earnings volatility resulting from changes in exchange rates affecting the U.S. dollar cost of our Mexican operations. Unrealized gains and losses on the peso forward contracts recognized as a result of mark-to-market adjustments as of September 27, 2020 may or may not be realized in future periods, depending on actual Mexican peso to U.S. dollar exchange rates experienced during the balance of the contract period. Pension and postretirement plan impacts include the components of net periodic benefit cost other than the service cost component. Our Rabbi Trust assets fund our amended and restated supplemental executive retirement plan. The investments held in the Trust are considered trading securities.  

Our effective tax rate was 13.5% and 10.0% for the three months ended September 27, 2020 and September 29, 2019, respectively. Effective July 20, 2020, the U.S Treasury Department finalized and enacted previously proposed regulations regarding the Global Intangible Low Taxed Income (GILTI) tax provisions of the Tax Cuts and Jobs Act of 2017 (TCJA). Prior to this enactment, GILTI represented a significant U.S. income tax on our foreign earnings during fiscal 2020. With the enactment of these final regulations, we are now eligible for an exclusion from GILTI since we meet the provisions for the GILTI High-Tax exception included in the final regulations. In addition, the enactment of the new regulations and our eligibility for the GILTI High-Tax exception are retroactive to the original enactment of the GILTI tax provision, which includes our 2020 fiscal year. As a result of the newly enacted regulations, we recorded an income tax benefit of $675,000 during the three month period ended September 27, 2020. During the three month period ended September 29, 2019, our effective tax rate was impacted by the discrete impact of the non-cash compensation expense, as discussed under Pension and Postretirement Benefits below. Our effective tax rate differs from the statutory tax rate due to the GILTI provisions, our available R&D tax credit and the non-controlling interest portion of our pre-tax income. The non-controlling interest impacts the effective tax rate as ADAC-STRATTEC LLC and STRATTEC POWER ACCESS LLC entities are taxed as partnerships for U.S. tax purposes.

Liquidity and Capital Resources

Working Capital (in millions)

	September 27, 2020		June 28, 2020
Current Assets	$	160.9	$	125.4
Current Liabilities		76.3		48.1
Working Capital	$	84.6	$	77.3

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Outstanding Receivable Balances from Major Customers

Our primary source of cash flow is from our major customers, which include Fiat Chrysler Automobiles, General Motors Company and Ford Motor Company. As of the date of filing this Form 10-Q with the Securities and Exchange Commission, all of our major customers are making payments on their outstanding accounts receivable in accordance with the payment terms included on their purchase orders. A summary of our outstanding receivable balances from our major customers as of September 27, 2020 was as follows (in millions):

General Motors Company	$	23.2
Fiat Chrysler Automobiles	$	16.2
Ford Motor Company	$	7.6

Cash Balances in Mexico

We earn a portion of our operating income in Mexico. As of September 27, 2020, $4.2 million of our $12.0 million cash and cash equivalents balance was held in Mexico. These funds are available for repatriation as deemed necessary.

Cash Flow Analysis (in millions)

	Three Months Ended
	September 27, 2020			September 29, 2019
Cash Flows from (in millions):
Operating Activities	$	7.3		$	15.0
Investing Activities	$	(1.5	)	$	(4.3	)
Financing Activities	$	(5.5	)	$	(7.3	)

The decrease in cash provided by operating activities between periods is due to a net increase in our working capital requirements between periods of approximately $13.2 million which was partially offset by improvement in our financial results between periods. The net increase in our working capital requirements between periods was made up of the following working capital changes (in millions):

	Increase (Decrease) in Working Capital Requirements
	Three Months Ended
	September 27, 2020			September 29, 2019			Change
Accounts Receivable	$	37.8		$	(5.0	)	$	42.8
Inventory	$	(2.7	)	$	4.2		$	(6.9	)
Other Assets	$	0.3		$	(3.2	)	$	3.5
Accounts Payable and Accrued Liabilities	$	(27.9	)	$	(1.7	)	$	(26.2	)

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The period over period change in the accounts receivable balances is the result of the amount and timing of sales during each period. The increase in accounts receivable balances during the current year period reflected reduced sales levels from the end of March 2020 through June 2020, which reduction was primarily due to our OEM customers reducing production schedules and closing their assembly plants due to the COVID-19 outbreak. The reduction in accounts receivable balances during the prior year period reflected reduced sales levels toward the end of our September 2019 period as compared to the end of our June 2019 period. The period over period change in inventory reflected a decrease in inventory balances during the current year period due to an inventory build-up as of June 2020 resulting from our OEM customers reducing production schedules and closing their assembly plants due to COVID-19 and an increase in inventory balances during the prior year period due to an inventory build-up of General Motors components stemming from the impacts of the General Motors strike. The period over period change in other assets reflected a reduction in our other assets balances in the prior year period, which was driven by changes in customer tooling balances. Customer tooling balances consisted of costs incurred for the development of tooling that will be directly reimbursed by our customer whose parts are produced from the tool. The prior year change in customer tooling balances was the result of the timing of tooling development spending required to meet customer production requirements and related customer billing for tooling cost reimbursement. The period over period change in accounts payable and accrued liability balances was primarily the result of an increase in accounts payable balances during the current year period. Accounts payable balances were significantly reduced as of June 2020 due to the impact of COVID-19. Accounts payable balances increased as of September 2020 as our business ramped-up along with the automotive industry. Accounts payable balances reflect the timing of purchases and payments with our vendors based on normal payment terms.

Net cash used by investing activities of $1.5 million during the current year period and $4.3 million during the prior year period were the result of capital expenditures made in support of requirements for new product programs and the upgrade and replacement of existing equipment.

Net cash used in financing activities during the current year period of $5.5 million included repayments of borrowings under credit facilities of $5.0 million and $490,000 of dividend payments to non-controlling interests in our subsidiaries. Net cash used in financing activities of $7.3 million during the prior year period included repayments of borrowings under credit facilities of $6.0 million, $522,000 of regular quarterly dividend payments to shareholders and $980,000 of dividend payments to non-controlling interests in our subsidiaries.

VAST LLC Cash Requirements

We currently anticipate that VAST China has adequate debt facilities in place over the next fiscal year to cover the future operating and capital requirements of its business. No capital contributions were made to VAST LLC during the three months ended September 27, 2020 or September 29, 2019. Due to economic conditions in Brazil, we anticipate Sistema de Acesso Veicular Ltda will require a capital contribution of approximately $300,000 collectively by all VAST LLC partners to fund operations during fiscal year 2021. STRATTEC’s portion of the capital contributions is anticipated to be $100,000. During the three months ended September 27, 2020, VAST LLC made no capital contributions to Minda-VAST Access Systems. Due to Minda-VAST Access System recently experiencing losses and due to the COVID-19 outbreak, future capital contributions may be required.

Future Capital Expenditures

We anticipate capital expenditures will be approximately $12 million in total in fiscal 2021, of which $1.5 million has been made through September 27, 2020, in support of requirements for new product programs and the upgrade and replacement of existing equipment.

Stock Repurchase Program

Our Board of Directors has authorized a stock repurchase program to buy back outstanding shares of our common stock. Shares authorized for buy back under the program totaled 3,839,395 at September 27, 2020. A total of 3,655,322 shares have been repurchased over the life of the program through September 27, 2020, at a cost of approximately $136.4 million. No shares were repurchased during the three month periods ended September 27, 2020 or September 29, 2019. Additional repurchases may occur from time to time and are expected to continue to be funded by cash flow from operations and current cash balances. Based on the current economic environment and our preference to conserve cash for other uses, we anticipate modest or no stock repurchase activity for the remainder of fiscal year 2021.

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Credit Facilities

STRATTEC has a $40 million secured revolving credit facility (the “STRATTEC Credit Facility”) with BMO Harris Bank N.A. ADAC-STRATTEC LLC has a $25 million secured revolving credit facility (the “ADAC-STRATTEC Credit Facility”) with BMO Harris Bank N.A., which is guaranteed by STRATTEC. The credit facilities both expire August 1, 2022. Borrowings under either credit facility are secured by our U.S. cash balances, accounts receivable, inventory, and fixed assets located in the U.S. Interest on borrowings under the STRATTEC Credit Facility is at varying rates based, at our option, on the London Interbank Offering Rate (“LIBOR”) plus 1.0 percent or the bank’s prime rate. Interest on borrowings under the ADAC-STRATTEC Credit Facility is at varying rates based, at our option, on LIBOR plus 1.25 percent or the bank’s prime rate. Both credit facilities contain a restrictive financial covenant that requires the applicable borrower to maintain a minimum net worth level. As of September 27, 2020, we were in compliance with all financial covenants required by these credit facilities. The ADAC-STRATTEC Credit Facility includes an additional restrictive financial covenant that requires the maintenance of a minimum fixed charge coverage ratio. Outstanding borrowings under the STRATTEC Credit Facility totaled $13 million at September 27, 2020 and $18 million at June 28, 2020. The average outstanding borrowings and weighted average interest rate on the STRATTEC Credit Facility loans were approximately $17.2 million and 1.2 percent, respectively, during the three months ended September 27, 2020. Outstanding borrowings under the ADAC-STRATTEC Credit Facility totaled $17 million at September 27, 2020 and $17.0 million at June 28, 2020. The average outstanding borrowings and weighted average interest rate on the ADAC-STRATTEC Credit Facility loans were approximately $17.0 million and 1.4 percent, respectively, during the three months ended September 27, 2020.

Inflation and Other Changes in Prices

Inflation Related Items:  Over the past several years, we have been impacted by rising health care costs, which have increased our cost of associate medical coverage. A portion of these increases have been offset by plan design changes and associate wellness initiatives. We have also been impacted by increases in the market price of metals (zinc, steel, brass, nickel silver and aluminum) and inflation in Mexico, which impacts the U. S. dollar costs of our Mexican operations. We have negotiated raw material price adjustment clauses with certain, but not all, of our customers to offset some of the market price fluctuations in the cost of zinc. We have from time to time entered into contracts with Bank of Montreal that provide for bi-weekly and monthly Mexican peso currency forward contracts for a portion of our estimated peso denominated operating costs to minimize our earnings volatility resulting from changes in exchange rates affecting the U.S. dollar cost of our Mexican operations. Refer to discussion under Notes to Condensed Consolidated Financial Statements: Derivative Instruments included herein.

Joint Ventures and Majority Owned Subsidiaries

Refer to the discussion of Investment in Joint Ventures and Majority Owned Subsidiaries and discussion of Equity Earnings of Joint Ventures included in Notes to Condensed Consolidated Financial Statements included within this Form 10-Q.

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Item 3 Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4 Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")), that are designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act, are recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that the information required to be disclosed by the Company in reports that it files or submits under the Exchange Act are accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of such period, our disclosure controls and procedures were effective at reaching a level of reasonable assurance. It should be noted that in designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost benefit relationship of possible controls and procedures. We have designed our disclosure controls and procedures to reach a level of reasonable assurance of achieving the desired control objectives.

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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Part II

Other Information

Item 1 Legal Proceedings

In the normal course of business, we may be involved in various legal proceedings from time to time. We do not believe we are currently involved in any claim or action the ultimate disposition of which would have a material adverse effect on our financial statements.

Item 1A—Risk Factors

There have been no material changes to the risk factors disclosed in our Form 10-K as filed with the Securities and Exchange Commission on September 3, 2020.

Item 2 Unregistered Sales of Equity Securities and Use of Proceeds—

Our Board of Directors authorized a stock repurchase program on October 16, 1996, and the program was publicly announced on October 17, 1996. The Board of Directors has periodically increased the number of shares authorized for repurchase under the program, most recently in August 2008. The program currently authorizes the repurchase of up to 3,839,395 shares of our common stock from time to time, directly or through brokers or agents, and has no expiration date. Over the life of the repurchase program through September 27, 2020, a total of 3,655,322 shares have been repurchased at a cost of approximately $136.4 million. No shares were repurchased during the three month period ended September 27, 2020.

Item 3 Defaults Upon Senior Securities—None

Item 4 Mine Safety Disclosures—None

Item 5 Other Information—None

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Item 6 Exhibits

(a) Exhibits

3.1	Amended and Restated Articles of Incorporation of the Company (Incorporated by reference from Exhibit 3.1 to the Form 10-K filed on September 7, 2017.)
3.2	Amendment to Amended and Restated Articles of Incorporation of the Company (Incorporated by reference from Exhibit 3.1 to the Form 10-Q report filed on November 7, 2019.)
3.3	Amended By-laws of the Company (Incorporated by reference from Exhibit 99.3 to the Form 8-K filed on October 7, 2005.)
10.1	Amended and Restated STRATTEC SECURITY CORPORATION Stock Incentive Plan (Incorporated by reference from Appendix B to the Company’s Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on September 3, 2020.)
10.2	Form of Restricted Stock Grant Agreement with Employees to be used under the Amended and Restated STRATTEC SECURITY CORPORATION Stock Incentive Plan
31.1	Rule 13a-14(a) Certification for Frank J. Krejci, President and Chief Executive Officer
31.2	Rule 13a-14(a) Certification for Patrick J. Hansen, Chief Financial Officer
32 (1)	18 U.S.C. Section 1350 Certifications
101	The following materials from STRATTEC SECURITY CORPORATION's Quarterly Report on Form 10-Q for the fiscal quarter ended September 27, 2020 formatted in XBRL (eXtensible Business Reporting Language) and furnished electronically herewith: (i) Condensed Consolidated Statements of Income and Comprehensive Income; (ii) Condensed Consolidated Balance Sheets; (iii) Condensed Consolidated Statements of Cash Flows; and (iv) Notes to Condensed Consolidated Financial Statements. XBRL Instance Document – the XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
104	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 27, 2020, formatted in Inline XBRL (included in Exhibit 101).

⁽¹⁾ This certification is not "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	STRATTEC SECURITY CORPORATION (Registrant)
Date: November 5, 2020	By:	/s/ Patrick J. Hansen
		Patrick J. Hansen
		Senior Vice President,
		Chief Financial Officer,
		Treasurer and Secretary
		(Principal Accounting and Financial Officer)

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EX-10.2

RESTRICTED STOCK GRANT AGREEMENT

THIS RESTRICTED STOCK GRANT AGREEMENT is dated as of ___________ (the "Grant Date") between STRATTEC SECURITY CORPORATION, a Wisconsin corporation (the "Company"), and ___________ ("Recipient").

RECITALS

A.The Company has adopted the STRATTEC SECURITY CORPORATION Stock Incentive Plan, as most recently amended and restated as of August 19, 2020 (the "Plan"), to provide eligible participants with the opportunity to obtain a proprietary interest, or otherwise increase their proprietary interest, in the Company.  Capitalized terms not defined herein shall have the meanings assigned such terms in the Plan.

B.In Connection with Recipient's provision of services to and for the benefit of the Company, the Company has agreed to issue certain shares of its common stock, par value $0.01 per share (the "Common Stock"), to Recipient pursuant to the terms and conditions of the Plan.

C.As a condition to the issuance of the Common Stock to Recipient, the Company and Recipient desire to impose certain restrictions on the shares of Common Stock granted pursuant to the terms of this Agreement.

AGREEMENTS

In consideration of the recitals and the mutual agreements which follow, the Company and the Recipient agree as follows:

1.Grant of Restricted Shares.  The Company hereby grants and issues 1,500 shares of the Common Stock (the "Restricted Shares") to Recipient, in accordance with this Agreement and the Plan.  Promptly following the execution and delivery of this Agreement by Recipient, the Company shall cause a certificate for the Restricted Shares to be delivered to Recipient containing the legend set forth in Section 7 below.

2.Vesting and Forfeiture of Restricted Shares.

(a)General Vesting.  Subject to the forfeiture provisions of section 2(b) and the accelerated vesting provisions of section 2(c), the Restricted Shares shall vest pro rata over a three period such that one-third of the Restricted Shares shall vest on the first anniversary date of the Grant Date, one-third of the

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Restricted Shares shall vest on the second anniversary date of the Grant Date and the remaining one-third of the Restricted Shares shall vest on the third anniversary date of the Grant Date (as each suchdate may be modified by application of section 2(c), the "Vesting Date").  All Restricted Shares which shall have vested are referred to herein as "Vested Shares."  All Restricted Shares which are not vested are referred to herein as "Unvested Shares."  Upon vesting, the Restricted Shares (or the portion thereof) shall no longer be subject to forfeiture pursuant to section 2(b) of this Agreement.

(b)Forfeiture Rights.  The Unvested Shares shall immediately be forfeited to the Company if, prior to the applicable Vesting Date, the Recipient's employment with the Company terminates for any reason, other than as described in section 2(c)(ii) below.  Upon any forfeiture of all or any portion of the Restricted Shares pursuant to this section 2(b), Recipient shall have no rights as a holder of such portion of the forfeited Restricted Shares and such forfeited Restricted Shares shall be deemed transferred to the Company, and the Company shall be deemed the owner and holder of such shares.

(c)Special Vesting.

(i)Change in Control.  All Restricted Shares (or the portion thereof) not otherwise vested shall automatically and immediately vest immediately prior to the effective date of a Change in Control.  Immediately following a Change in Control, this Agreement shall terminate and cease to be outstanding, unless assumed by the successor entity (or parent thereof) in connection with the Change in Control.

(ii)Termination as a Result of Death or Disability.  Notwithstanding anything herein to the contrary, if Recipient's employment with the Company terminates (i) as a result of Recipient's death or (ii) because Recipient suffers a Disability, then in each such case the Restricted Shares (to the extent not already vested) shall be deemed fully vested and shall become Vested Shares.

(iii)Termination as a Result of Eligible Voluntary Retirement.  Notwithstanding anything herein to the contrary, if Recipient's employment with the Company terminates as a result of voluntary Retirement (as defined in the Plan and provided Recipient has attained eligibility for Retirement under the Company's employment policies and the terms of the Plan), then upon recommendation of the Company's Chief Executive Officer to the Compensation Committee of the Company's Board of Directors, the Compensation Committee may determine, in its discretion, to deem the Restricted Shares (to the extent not

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already vested) fully vested and such Restricted Shares shall become Vested Shares.

(iv)Preservation of Rights.  This Agreement shall not in any way affect the right of the Company to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

3.Shareholder Rights.  Regardless of whether the Restricted Shares (or a portion thereof) are considered Unvested Shares under the terms of this Agreement, Recipient shall have all the rights of a shareholder (including voting rights) with respect to the Restricted Shares, other than, with respect to any Unvested Shares, the right to receive any cash dividends.  Recipient shall not be entitled to any cash dividends declared on any shares which are Unvested Shares as of the payment date for such dividend.

4.Restrictions on Transfer.  Recipient shall not sell, assign, transfer, pledge, encumber or dispose of all or any of his or her Restricted Shares (or portion thereof), either voluntarily or by operation of law, at any time prior to the applicable Vesting Date for such shares (or portion thereof).  Any attempted transfer of any Restricted Shares in violation of this Section 4 shall be invalid and of no effect.

5.Taxes.  

(a)The Company's obligation to deliver the Restricted Shares to Recipient shall be subject to the satisfaction of all applicable federal, state and local income and employment tax withholding requirements ("Withholding Taxes").  Recipient has reviewed with Recipient's own tax advisors the federal, state and local tax consequences of this investment and the transactions contemplated by this Agreement.  Recipient is relying solely on such advisors and not on any statements or representations of the Company or any of its agents.  Recipient understands that Recipient (and not the Company) shall be responsible for Recipient's own tax liability that may arise as a result of the transactions contemplated by this Agreement.  

(b)RECIPIENT ACKNOWLEDGES THAT HE OR SHE HAS BEEN INFORMED THAT RECIPIENT MUST DECIDE WHETHER OR NOT TO MAKE AN ELECTION UNDER SECTION 83(b) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, WITH RESPECT TO THE RESTRICTED SHARES AND THAT RECIPIENT IS SOLELY RESPONSIBLE FOR MAKING OR NOT MAKING A TIMELY SECTION 83(b) ELECTION (AND OBTAINING TAX ADVICE CONCERNING WHETHER AND HOW TO

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MAKE SUCH ELECTION).  Recipient hereby agrees to deliver to the Company a signed copy of any document he or she may execute and file with the Internal Revenue Service evidencing a section 83(b) Election, and to deliver such copy to the Company prior to, or promptly upon, such filing, accompanied by a cash payment in the amount the Company anticipates is required to fulfill the Withholding Taxes as a result of the making of such election.

(c)Recipient agrees to promptly make a cash payment to the Company of any Withholding Taxes to the Company when due.  Recipient further agrees that the Company may withhold from Recipient's wages or other remuneration the appropriate amount of Withholding Taxes (to the extent not covered by Recipient's cash payment related thereto to the Company).  Recipient further agrees that, if the Company does not withhold an amount from Recipient's wages or other remuneration sufficient to satisfy the withholding obligation of the Company, Recipient will make reimbursement on demand, in cash, for the amount underwithheld.

6.Adjustments for Stock Splits, Stock Dividends, Etc.  If from time to time during the term of this Agreement there is any stock split‑up, stock dividend, stock distribution or other reclassification of the Common Stock, any and all new, substituted or additional securities to which Recipient is entitled by reason of his or her ownership of the Restricted Shares shall be immediately subject to the forfeiture and other provisions of this Agreement in the same manner and to the same extent as the Restricted Shares.  If the Restricted Shares are converted into or exchanged for, or shareholders of the Company receive by reason of any distribution in total or partial liquidation, securities of another corporation, or other property (including cash), pursuant to any merger of the Company or acquisition of its assets, then the rights of the Company under this Agreement shall inure to the benefit of the Company's successor and this Agreement shall apply to the securities or other property received upon such conversion, exchange or distribution in the same manner and to the same extent as the Restricted Shares.

7.Legends.  The share certificate evidencing the Restricted Shares issued hereunder shall be endorsed with the following legend (in addition to any legend required under applicable federal or state securities laws) and the Company may issue stop-transfer instructions with its transfer agent in connection with such legend:

"THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF THE STRATTEC SECURITY CORPORATION STOCK INCENTIVE PLAN AND ANY GRANT AGREEMENT ENTERED INTO THEREUNDER RELATED TO

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THESE SHARES OF STOCK. COPIES OF SUCH PLAN AND AGREEMENT ARE ON FILE AT THE OFFICES OF STRATTEC SECURITY CORPORATION, 3333 WEST GOOD HOPE ROAD, GLENDALE, WISCONSIN 53209‑2043."

The legend set forth above shall be removed from the certificates evidencing the Restricted Shares (or a portion thereof) upon the applicable Vesting Date unless such Restricted Shares have been forfeited prior to the applicable Vesting Date pursuant to Section 2 above.

8.Miscellaneous.

(a)Severability; Binding Effect; Successors and Assigns.  The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, and each other provision of this Agreement shall be severable and enforceable to the extent permitted by law.  The provisions of this Agreement shall inure to the benefit of, and be binding upon, the Company and its successors and assigns and Recipient and his or her legal representatives, heirs, legatees, distributes, assigns and transferees.

(b)No Rights To Continued Service.  Nothing in this Agreement shall confer upon Recipient any right to continue in the employment of the Company for any period of time or interfere with or restrict in any way the rights of the Company or Recipient to terminate the employment of Recipient at any time for any reason whatsoever, with or without cause.

(c)Entire Agreement.  This Agreement constitutes the entire agreement between the parties, and supersedes all prior agreements and understandings, relating to the subject matter of this Agreement.

(d)Amendment.  This Agreement may be amended or modified only by a written instrument executed by both the Company and Recipient.

(e)Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Wisconsin, without giving effect to any choice of law or conflict of law provision or rule that would cause the application of the law of any jurisdiction other than the State of Wisconsin.

(f)Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

5

44241494

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

[Name]

STRATTEC SECURITY CORPORATION

BY

Frank J. Krejci

President & CEO

6

44241494

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Frank J. Krejci, certify that:

1.I have reviewed this quarterly report on Form 10-Q of STRATTEC SECURITY CORPORATION;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  November 5, 2020

/s/ Frank J. Krejci

Frank J. Krejci,

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Patrick J. Hansen, certify that:

1.I have reviewed this quarterly report on Form 10-Q of STRATTEC SECURITY CORPORATION;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  November 5, 2020

/s/ Patrick J. Hansen

Patrick J. Hansen,

Chief Financial Officer

EX-32

Exhibit 32

Certification of Periodic Financial Report

Pursuant to 18 U.S.C. Section 1350

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of STRATTEC SECURITY CORPORATION (the "Company") certifies that the Quarterly Report on Form 10-Q of the Company for the quarter ended September 27, 2020 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and information contained in that Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:  November 5, 2020 /s/ Frank J. Krejci

Frank J. Krejci,

Chief Executive Officer

Dated:  November 5, 2020 /s/ Patrick J. Hansen

Patrick J. Hansen,

Chief Financial Officer

This certification is made solely for purpose of 18 U.S.C. Section 1350, subject to the knowledge standard contained therein, and not for any other purpose.

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Document and Entity Information - shares	3 Months Ended
	Sep. 27, 2020	Sep. 29, 2020
Cover [Abstract]
Entity Registrant Name	STRATTEC SECURITY CORP
Entity Central Index Key	0000933034
Document Type	10-Q
Document Period End Date	Sep. 27, 2020
Amendment Flag	false
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--06-27
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false
Entity File Number	0-25150
Entity Incorporation, State or Country Code	WI
Entity Tax Identification Number	39-1804239
Entity Address, Address Line One	3333 West Good Hope Road
Entity Address, City or Town	Milwaukee
Entity Address, State or Province	WI
Entity Address, Postal Zip Code	53209
City Area Code	414
Local Phone Number	247-3333
Document Quarterly Report	true
Document Transition Report	false
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Common Stock Shares Outstanding		3,859,892
Security Exchange Name	NASDAQ
Trading Symbol	STRT
Title of 12(b) Security	Common stock, $.01 par value

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Condensed Consolidated Statements of Income (Loss) and Comprehensive (Loss) Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 27, 2020	Sep. 29, 2019
Income Statement [Abstract]
Net sales	$ 126,234	$ 119,962
Cost of goods sold	103,723	104,076
Gross profit	22,511	15,886
Engineering, selling and administrative expenses	11,314	12,954
Income from operations	11,197	2,932
Equity earnings of joint ventures	825	484
Interest expense	(112)	(340)
Other expense, net	(260)	(97)
Income before provision for income taxes and non-controlling interest	11,650	2,979
Provision for income taxes	1,577	299
Net income	10,073	2,680
Net income attributable to non-controlling interest	2,065	1,436
Net income attributable to STRATTEC SECURITY CORPORATION	8,008	1,244
Comprehensive income:
Net income	10,073	2,680
Pension and postretirement plans, net of tax	70	73
Currency translation adjustments	1,699	(1,448)
Other comprehensive income (loss), net of tax	1,769	(1,375)
Comprehensive income	11,842	1,305
Comprehensive income attributable to non-controlling interest	2,386	1,184
Comprehensive income attributable to STRATTEC SECURITY CORPORATION	$ 9,456	$ 121
Earnings per share attributable to STRATTEC SECURITY CORPORATION:
Basic	$ 2.13	$ 0.34
Diluted	$ 2.11	$ 0.33
Average shares outstanding:
Basic	3,765	3,710
Diluted	3,788	3,728
Cash dividends declared per share		$ 0.14

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Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 27, 2020	Jun. 28, 2020
Current Assets:
Cash and cash equivalents	$ 11,983	$ 11,774
Receivables, net	79,764	41,955
Inventories:
Finished products	13,122	13,142
Work in process	12,551	11,815
Purchased materials	31,523	34,333
Excess and obsolete reserve	(5,523)	(4,890)
Inventories, net	51,673	54,400
Other current assets	17,527	17,239
Total current assets	160,947	125,368
Investment in joint ventures	23,723	22,068
Deferred Income Taxes	6,402	6,490
Other long-term assets	6,547	6,471
Property, plant and equipment	268,166	266,216
Less: accumulated depreciation	(165,556)	(161,068)
Net property, plant and equipment	102,610	105,148
Total assets	300,229	265,545
Current Liabilities:
Accounts payable	40,809	18,549
Accrued Liabilities:
Payroll and benefits	16,314	13,498
Environmental	1,257	1,259
Warranty	8,405	8,500
Other	9,518	6,334
Total current liabilities	76,303	48,140
Borrowings under credit facilities	30,000	35,000
Accrued pension obligations	1,277	1,255
Accrued postretirement obligations	684	701
Other long-term liabilities	4,945	5,008
Shareholders’ Equity:
Common stock, authorized 12,000,000 shares, $.01 par value, 7,393,481 issued shares at September 27, 2020 and 7,358,812 issued shares at June 28, 2020	74	74
Capital in excess of par value	98,188	97,977
Retained earnings	219,948	211,940
Accumulated other comprehensive loss	(20,665)	(22,113)
Less: treasury stock, at cost (3,608,214 shares at September 27, 2020 and 3,609,193 shares at June 28, 2020)	(135,640)	(135,656)
Total STRATTEC SECURITY CORPORATION shareholders’ equity	161,905	152,222
Non-controlling interest	25,115	23,219
Total shareholders’ equity	187,020	175,441
Total liabilities and shareholders' equity	$ 300,229	$ 265,545

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Sep. 27, 2020	Jun. 28, 2020
Statement Of Financial Position [Abstract]
Common stock, shares authorized	12,000,000	12,000,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares issued	7,393,481	7,358,812
Treasury stock, shares	3,608,214	3,609,193

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Sep. 27, 2020	Sep. 29, 2019	Jun. 28, 2020	Jun. 30, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 10,073	$ 2,680
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	4,885	4,733
Foreign currency transaction loss	399	85
Unrealized gain on peso forward contracts	(335)
Stock based compensation expense	208	413
Equity earnings of joint ventures	(825)	(484)
Non-cash compensation expense		2,228	$ 4,800	$ 4,200
Deferred income taxes		(524)
Change in operating assets and liabilities:
Receivables	(37,796)	4,952
Inventories	2,727	(4,238)
Other assets	(288)	3,240
Accounts payable and accrued liabilities	27,914	1,684
Other, net	338	239
Net cash provided by operating activities	7,300	15,008
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment	(1,514)	(4,298)
Proceeds received on sale of property, plant and equipment	3	15
Net cash used in investing activities	(1,511)	(4,283)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of borrowings under credit facility	(5,000)	(6,000)
Dividends paid to non-controlling interests of subsidiaries	(490)	(980)
Dividends paid		(522)
Exercise of stock options and employee stock purchases	19	239
Net cash used in financing activities	(5,471)	(7,263)
Foreign currency impact on cash	(109)	(30)
NET INCREASE IN CASH AND CASH EQUIVALENTS	209	3,432
CASH AND CASH EQUIVALENTS
Beginning of period	11,774	7,809	7,809
End of period	11,983	11,241	$ 11,774	$ 7,809
Cash paid (received) during the period for:
Income taxes	(213)	298
Interest	118	360
Non-cash investing activities:
Change in capital expenditures in accounts payable	$ 318	$ (820)

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Basis of Financial Statements

3 Months Ended

Sep. 27, 2020

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Basis of Financial Statements

Basis of Financial Statements

STRATTEC SECURITY CORPORATION designs, develops, manufactures and markets automotive access control products including mechanical locks and keys, electronically enhanced locks and keys, passive entry passive start systems (PEPS), steering column and instrument panel ignition lock housings, latches, power sliding door systems, power tailgate systems, power lift gate systems, power deck lid systems, door handles and related products for primarily North American automotive customers. We also supply global automotive manufacturers through a unique strategic relationship with WITTE Automotive (“WITTE”) of Velbert, Germany, and ADAC Automotive (“ADAC”) of Grand Rapids, Michigan. Under this relationship, STRATTEC, WITTE and ADAC market the products of each company to global customers under the “VAST Automotive Group” brand name (as more fully described herein). STRATTEC products are shipped to customer locations in the United States, Canada, Mexico, Europe, South America, Korea, China and India, and we provide full service and aftermarket support for each VAST Automotive Group partner’s products.

The accompanying condensed consolidated financial statements reflect the consolidated results of STRATTEC SECURITY CORPORATION, its wholly owned Mexican subsidiary, STRATTEC de Mexico, and its majority owned subsidiaries, ADAC-STRATTEC, LLC and STRATTEC POWER ACCESS LLC. STRATTEC SECURITY CORPORATION is located in Milwaukee, Wisconsin. STRATTEC de Mexico is located in Juarez, Mexico. ADAC-STRATTEC, LLC and STRATTEC POWER ACCESS LLC have operations in El Paso, Texas and Juarez and Leon, Mexico. Equity investments in Vehicle Access Systems Technology LLC (“VAST LLC”), for which we exercise significant influence but do not control and are not variable interest entities of STRATTEC, are accounted for using the equity method. VAST LLC consists primarily of four wholly owned subsidiaries in China, one wholly owned subsidiary in Brazil and one joint venture entity in India. The results of the VAST LLC foreign subsidiaries and joint venture are reported on a one-month lag basis. We have only one reporting segment.

In the opinion of management, the accompanying condensed consolidated balance sheets as of September 27, 2020 and June 28, 2020, which has been derived from our audited financial statements, and the related unaudited interim condensed consolidated financial statements included herein contain all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and in accordance with Rule 10-01 of Regulation S-X. All significant intercompany transactions have been eliminated.

Interim financial results are not necessarily indicative of operating results for an entire year. The information included in this Form 10-Q should be read in conjunction with the financial statements and notes thereto included in the STRATTEC SECURITY CORPORATION 2020 Form 10-K, which was filed with the Securities and Exchange Commission on September 3, 2020.

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Risks and Uncertainties

3 Months Ended

Sep. 27, 2020

Risks And Uncertainties [Abstract]

Risks and Uncertainties

Risks and Uncertainties

  In December 2019, a novel strain of coronavirus (COVID-19) was reported in Wuhan, China. The coronavirus has since spread, and infections have been found in multiple countries around the world, including the United States. In March 2020, the World Health Organization recognized the COVID-19 outbreak as a pandemic based on the global spread of the disease, the severity of illnesses it causes and its effects on society. In response to the COVID-19 outbreak, the governments of many countries, states, cities and other geographic regions have taken preventative or protective actions, such as imposing restrictions on travel and business operations and advising or requiring individuals to limit or forego their time outside of their homes. Accordingly, the COVID-19 outbreak has severely restricted the level of economic activity in many countries, and continues to adversely impact global economic activity.

STRATTEC’s operating performance is subject to global economic conditions and levels of consumer spending specifically within the automotive industry. During the period from late March 2020 through mid-June 2020, the majority of our OEM customer assembly plant operations were completely closed including most of the supply chain. Additionally, during most of this same period, STRATTEC’s Mexico facilities were closed as a result of the Mexican government’s shutdown of non-essential businesses. Re-opening of our OEM customer facilities and our Mexico facilities began in June 2020, and the automotive industry continued to ramp-up throughout our fiscal quarter ended September 27, 2020 resulting in an increase in our net sales for the current fiscal quarter compared to our prior year fiscal quarter. While we expect continued increased sales over our prior year through our second fiscal quarter, such estimates are dependent on the severity of the ongoing impacts of COVID-19 and any worsening of the impact of the pandemic on society and specifically on the automotive industry.

The extent of the impact of the COVID-19 outbreak on our future operating results will depend on certain developments, including the duration, intensity and continued spread of the outbreak, regulatory and private sector responses, which may be precautionary, and the impact to our customers, workforce and suppliers, all of which are uncertain and cannot be predicted. These

changing conditions may also affect the estimates and assumptions made by management. Such estimates and assumptions affect, among other things, our long-lived asset valuations, equity investment valuation, assessment of our annual effective tax rate, valuation of deferred income taxes, assessment of excess and obsolete inventory reserves, and assessment of collectability of trade receivables.

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New Accounting Standards

3 Months Ended

Sep. 27, 2020

Accounting Changes And Error Corrections [Abstract]

New Accounting Standards

New Accounting Standards

In June 2016, the FASB issued ASU 2016-13, Financial instruments – Credit Losses. This update revises the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. Originally, the update was effective for fiscal years, and for interim periods with those fiscal years, beginning after December 15, 2019, with early adoption permitted. In November 2019, the FASB issued ASU 2019-10, Financial instruments – Credit Losses, Derivatives and Hedging Activities, and Leases. This ASU defers the effective date of ASU 2016-13 for public companies that are considered smaller reporting companies as defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We are planning to adopt this standard in the first quarter of our fiscal 2024. We are currently evaluating the potential effects of adopting the new guidance on our consolidated financial statements.

In December 2019, the FASB issued an update to accounting for income taxes. The update enhances and simplifies various aspects of income tax accounting including hybrid tax regimes, tax basis step-up in goodwill obtained in a transaction that is not a business combination, separate financial statements of entities not subject to tax, the intraperiod tax allocation exception to the incremental approach, investment ownership changes from a subsidiary to an equity method investment and vice versa, interim-period accounting for enacted changes in tax law, and the year-to-date loss limitation in interim-period tax accounting. This accounting update is effective for annual and interim periods beginning after December 15, 2020, with early adoption permitted. We do not expect that the adoption of this pronouncement will have a material impact on our consolidated financial statements.

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Derivative Instruments

3 Months Ended

Sep. 27, 2020

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

We own and operate manufacturing operations in Mexico. As a result, a portion of our manufacturing costs are incurred in Mexican pesos, which causes our earnings and cash flows to fluctuate due to changes in the U.S. dollar/Mexican peso exchange rate. We have contracts with Bank of Montreal that provide for monthly Mexican peso currency forward contracts for a portion of our estimated peso denominated operating costs. Our objective in entering into currency forward contracts is to minimize our earnings volatility resulting from changes in exchange rates affecting the U.S. dollar cost of our Mexican operations. The Mexican peso forward contracts are not used for speculative purposes and are not designated as hedges. As a result, all currency forward contracts are recognized in our accompanying condensed consolidated financial statements at fair value and changes in the fair value are reported in current earnings as part of Other Expense, net.

The following table quantifies the outstanding Mexican peso forward contracts as of September 27, 2020 (thousands of dollars, except with respect to the average forward contractual exchange rate):

	Effective Dates	Notional Amount		Average Forward Contractual Exchange Rate		Fair Value
Buy MXP/Sell USD	October 14, 2020 - December 16, 2020	$	3,000		21.40	$	(146	)

The fair market value of all outstanding Mexican peso forward contracts in the accompanying Condensed Consolidated Balance Sheets as of the dates specified was as follows (thousands of dollars):

	September 27, 2020		June 28, 2020
Not Designated as Hedging Instruments:
Other Current Liabilities:
Mexican Peso Forward Contracts	$	146	$	480

The pre-tax effects of the Mexican peso forward contracts are included in Other Expense, net on the accompanying Condensed Consolidated Statements of Income and Comprehensive Income and consisted of the following for the periods indicated below (thousands of dollars):

	Three Months Ended
	September 27, 2020			September 29, 2019
Not Designated as Hedging Instruments:
Realized Loss	$	(59	)	$	—
Unrealized Gain	$	335		$	—

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Fair Value of Financial Instruments

3 Months Ended

Sep. 27, 2020

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The fair value of our cash and cash equivalents, accounts receivable, accounts payable and borrowings under our credit facilities approximated book value as of September 27, 2020 and June 28, 2020. Fair value is defined as the exchange price that would be received for an asset or paid for a liability (an exit price) in the principal or most advantageous market in an orderly transaction between market participants on the measurement date.

The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of September 27, 2020 (in thousands):  

	Fair Value Inputs
	Level 1 Assets: Quoted Prices In Active Markets		Level 2 Assets: Observable Inputs Other Than Market Prices		Level 3 Assets: Unobservable Inputs
Assets:
Rabbi Trust Assets:
Stock Index Funds:
Small Cap	$	270	$	—	$	—
Mid Cap		310		—		—
Large Cap		623		—		—
International		870		—		—
Fixed Income Funds		803		—		—
Cash and Cash Equivalents		—		3		—
Total Assets at Fair Value	$	2,876	$	3	$	—
Liabilities:
Mexican Peso Forward Contracts	$	—	$	146	$	—

The Rabbi Trust assets fund our amended and restated supplemental executive retirement plan and are included in Other Long-term Assets in the accompanying Condensed Consolidated Balance Sheets. Refer to discussion of Mexican peso forward contracts under Derivative Instruments above. The fair value of the Mexican peso forward contracts considers the remaining term, current exchange rate, and interest rate differentials between the Mexican peso and the U.S. dollar.   

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Investment in Joint Ventures and Majority Owned Subsidiaries

3 Months Ended

Sep. 27, 2020

Equity Method Investments And Joint Ventures [Abstract]

Investment in Joint Ventures and Majority Owned Subsidiaries

Investment in Joint Ventures and Majority Owned Subsidiaries

We participate in certain Alliance Agreements with WITTE Automotive (“WITTE”) and ADAC Automotive (“ADAC”). WITTE, of Velbert, Germany, is a privately held automotive supplier. WITTE designs, manufactures and markets automotive components, including locks and keys, hood latches, rear compartment latches, seat back latches, door handles and specialty fasteners. WITTE’s primary market for these products has been Europe. ADAC, of Grand Rapids, Michigan, is a privately held automotive supplier and manufactures engineered products, including door handles and other automotive trim parts, utilizing plastic injection molding, automated painting and various assembly processes.  

The Alliance Agreements include a set of cross-licensing agreements for the manufacture, distribution and sale of WITTE products by STRATTEC and ADAC in North America, and the manufacture, distribution and sale of STRATTEC and ADAC products by WITTE in Europe. Additionally, a joint venture company, Vehicle Access Systems Technology LLC (“VAST LLC”), in which WITTE, STRATTEC and ADAC each hold a one-third interest, exists to seek opportunities to manufacture and sell each company’s products in areas of the world outside of North America and Europe.  

VAST LLC has investments in Sistema de Acesso Veicular Ltda, VAST Fuzhou, VAST Great Shanghai, VAST Shanghai Co., VAST Jingzhou Co. Ltd., and Minda-VAST Access Systems. Sistema de Acesso Veicular Ltda is located in Brazil and services customers in South America. VAST Fuzhou, VAST Great Shanghai, VAST Shanghai Co., and VAST Jingzhou Co. Ltd. (collectively known as VAST China), provide a base of operations to service each VAST partner’s automotive customers in the Asian market. Minda-VAST Access Systems is based in Pune, India and is a 50:50 joint venture between VAST LLC and Minda Management Services Limited, an affiliate of both Minda Corporation Limited and Spark Minda, Ashok Minda Group of New Delhi, India (collectively “Minda”). Minda and its affiliates cater to the needs of all major car, motorcycle, commercial vehicle, tractor and off-road vehicle manufacturers in India. They are a leading manufacturer in the Indian marketplace of security & access products, handles, automotive safety, restraint systems, driver information and telematics systems for both OEMs and the aftermarket. VAST LLC also maintains branch offices in South Korea and Japan in support of customer sales and engineering requirements.

The VAST LLC investments are accounted for using the equity method of accounting and the results of the VAST LLC foreign subsidiaries and joint venture are reported on a one-month lag basis. The activities related to the VAST LLC joint ventures resulted in equity earnings of joint ventures to STRATTEC of $825,000 during the three months ended September 27, 2020 and $487,000 during the three months ended September 29, 2019. During the three months ended September 27, 2020 and September 29, 2019, no capital contributions were made to VAST LLC by any of the members.

ADAC-STRATTEC LLC, a Delaware limited liability company, was formed in fiscal year 2007 to support injection molding and door handle assembly operations in Mexico. ADAC-STRATTEC LLC was 51 percent owned by STRATTEC and 49 percent owned by ADAC for all periods presented in this report. An additional Mexican entity, ADAC-STRATTEC de Mexico, is wholly owned by ADAC-STRATTEC LLC. ADAC-STRATTEC LLC’s financial results are consolidated with the financial results of STRATTEC and resulted in increased net income to STRATTEC of approximately $1.4 million during the three months ended September 27, 2020 and approximately $1.0 million during the three months ended September 29, 2019. ADAC STRATTEC LLC incurs an engineering, research and design fee as well as a sales fee with ADAC. Such fees are calculated as a percentage of net sales, are included in the consolidated results of STRATTEC, and totaled $2.4 million in the three months ended September 27, 2020 and $2.2 million in the three months ended September 29, 2019. Additionally, ADAC-STRATTEC LLC sells production parts to ADAC. Sales to ADAC are included in the consolidated results of STRATTEC and totaled $3.1 million in the three months ended September 27, 2020 and $3.7 million in the three months ended September 29, 2019.

STRATTEC POWER ACCESS LLC (“SPA”) was formed in fiscal year 2009 to supply the North American portion of the power sliding door, lift gate and deck lid system access control products which were acquired from Delphi Corporation. SPA was 80 percent owned by STRATTEC and 20 percent owned by WITTE for all periods presented in this report. An additional Mexican entity, STRATTEC POWER ACCESS de Mexico, is wholly owned by SPA. The financial results of SPA are consolidated with the financial results of STRATTEC and resulted in increased net income to STRATTEC of approximately $685,000 during the three months ended September 27, 2020 and $266,000 during the three months ended September 29, 2019. STRATTEC purchases production parts from WITTE. These purchases totaled $83,000 during the three months ended September 27, 2020 and $393,000 during the three months ended September 29, 2019.

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Equity Earnings of Joint Ventures

3 Months Ended

Sep. 27, 2020

Equity Method Investments And Joint Ventures [Abstract]

Equity Earnings of Joint Ventures

Equity Earnings of Joint Ventures

As discussed above under Investment in Joint Ventures and Majority Owned Subsidiaries, we hold a one-third interest in a joint venture company, VAST LLC. Our investment in VAST LLC, for which we exercise significant influence but do not control and is not a variable interest entity of STRATTEC, is accounted for using the equity method. The results of the VAST LLC foreign subsidiaries and joint ventures are reported on a one-month lag basis. We assess the impairment of equity investments whenever events or changes in circumstances indicate that a decrease in value of the investment has occurred that is other than temporary.

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

	Three Months Ended
	September 27, 2020			September 29, 2019
Net Sales	$	50,411		$	42,567
Cost of Goods Sold		40,591			34,658
Gross Profit		9,820			7,909
Engineering, Selling and Administrative Expenses		6,603			6,681
Income From Operations		3,217			1,228
Other (Expense) Income, net		(149	)		860
Income before Provision for Income Taxes		3,068			2,088
Provision for Income Taxes		592			628
Net Income	$	2,476		$	1,460
STRATTEC’s Equity Earnings of VAST LLC	$	825		$	487

We have sales of component parts to VAST LLC, purchases of component parts from VAST LLC, expenses charged to VAST LLC for engineering and accounting services and expenses charged to us from VAST LLC for general headquarters expenses.  The following table summarizes these related party transactions with VAST LLC for the periods indicated below (in thousands):

	Three Months Ended
	September 27, 2020		September 29, 2019
Sales to VAST LLC	$	1,216	$	891
Purchases from VAST LLC	$	187	$	97
Expenses Charged to VAST LLC	$	507	$	831
Expenses Charged from VAST LLC	$	292	$	226

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Leases

3 Months Ended

Sep. 27, 2020

Leases [Abstract]

Leases

Leases

We have an operating lease for our El Paso, Texas finished goods and service parts distribution warehouse that has a current lease term through October 2023. This lease includes renewal terms that can extend the lease term for five additional years. For purposes of calculating operating lease obligations, we included the option to extend the lease as it is reasonably certain that we will exercise such option. The lease does not contain material residual value guarantees or restrictive covenants. Operating lease expense is recognized on a straight-line basis over the lease term.

As the lease does not provide an implicit rate, we used our incremental borrowing rate at lease commencement to determine the present value of our lease payments. The incremental borrowing rate is an entity-specific rate which represents the rate of interest we would pay to borrow over a similar term with similar payments.

The operating lease asset and obligation related to our El Paso warehouse lease included in the accompanying Condensed Consolidated Balance Sheet are presented below (in thousands):

	September 27, 2020
Right-of Use Asset Under Operating Lease:
Other Long-Term Assets	$	3,668
Lease Obligation Under Operating Lease:
Current Liabilities: Accrued Liabilities: Other	$	354
Other Long-Term Liabilities		3,314
	$	3,668

Future minimum lease payments, by our fiscal year, including options to extend that are reasonably certain to be exercised, under the non-cancelable lease are as follows as of September 27, 2020 (in thousands):

2021 (for the remaining nine months)	$	357
2022		484
2023		497
2024		509
2025		522
Thereafter		1,834
Total Future Minimum Lease Payments		4,203
Less: Imputed Interest		(535	)
Total Lease Obligations	$	3,668

Cash flow information related to the operating lease is shown below (in thousands):

	Three Months Ended
	September 27, 2020
Operating Cash Flows:
Cash Paid Related to Operating Lease Obligation	$	116

The weighted average lease term and discount rate for the El Paso, Texas operating lease are shown below:

	September 27, 2020
Weighted Average Remaining Lease Term (in years)		8.1
Weighted Average Discount Rate		3.3	%

Operating lease expense for the three month periods ended September 27, 2020 and September 29, 2019 totaled $116,000 and $113,000, respectively.

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Credit Facilities

3 Months Ended

Sep. 27, 2020

Debt Disclosure [Abstract]

Credit Facilities

Credit Facilities

STRATTEC has a $40 million secured revolving credit facility (the “STRATTEC Credit Facility”) with BMO Harris Bank. ADAC-STRATTEC LLC has a $25 million secured revolving credit facility (the “ADAC-STRATTEC Credit Facility”) with BMO Harris Bank N.A., which is guaranteed by STRATTEC. The credit facilities both expire August 1, 2022. Borrowings under either credit facility are secured by our U.S. cash balances, accounts receivable, inventory, and fixed assets. Interest on borrowings under the STRATTEC Credit Facility is at varying rates based, at our option, on the London Interbank Offering Rate (“LIBOR”) plus 1.0 percent or the bank’s prime rate. Interest on borrowings under the ADAC-STRATTEC Credit Facility is at varying rates based, at our option, on LIBOR plus 1.25 percent or the bank’s prime rate. Both credit facilities contain a restrictive financial covenant that requires the applicable borrower to maintain a minimum net worth level. The ADAC-STRATTEC Credit Facility includes an additional restrictive financial covenant that requires the maintenance of a minimum fixed charge coverage ratio. As of September 27, 2020, we were in compliance with all financial covenants required by these credit facilities.

Outstanding borrowings under the credit facilities were as follows (in thousands): 

	September 27, 2020		June 28, 2020
STRATTEC Credit Facility	$	13,000	$	18,000
ADAC-STRATTEC Credit Facility		17,000		17,000
	$	30,000	$	35,000

Average outstanding borrowings and the weighted average interest rate under each credit facility referenced above were as follows for each period presented (in thousands):

	Three Months Ended
	Average Outstanding Borrowings				Weighted Average Interest Rate
	September 27, 2020		September 29, 2019		September 27, 2020			September 29, 2019
STRATTEC Credit Facility	$	17,231	$	16,033		1.2	%		3.3	%
ADAC-STRATTEC Credit Facility	$	17,000	$	23,473		1.4	%		3.5	%

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Commitments and Contingencies

3 Months Ended

Sep. 27, 2020

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

We are from time to time subject to various legal actions and claims incidental to our business, including those arising out of alleged defects, alleged breaches of contracts, product warranties, intellectual property matters and employment related matters. It is our opinion that the outcome of such matters will not have a material adverse impact on our consolidated financial position, results of operations or cash flows. With respect to warranty matters, although we cannot ensure that future costs of warranty claims by customers will not be material, we believe our established reserves are adequate to cover potential warranty settlements.

In 1995, we recorded a provision of $3 million for estimated costs to remediate an environmental contamination site at our Milwaukee facility. The facility was contaminated by a solvent spill, which occurred in 1985, from a former above ground solvent storage tank located on the east side of the facility. The reserve was originally established based on third party estimates to adequately cover the cost for active remediation of the contamination. Due to changing technology and related costs associated with active remediation of the contamination, in fiscal 2010, the reserve was adjusted based on updated third party estimates to adequately cover the cost for active remediation of the contamination. Additionally, in fiscal 2016, we obtained updated third party estimates for adequately covering the cost for active remediation of this contamination. Based upon the updated estimates, no further adjustment to the reserve was required. From 1995 through September 27, 2020, costs of approximately $618,000 have been incurred related to the installation of monitoring wells on the property and ongoing monitoring costs. We monitor and evaluate the site with the use of these groundwater monitoring wells. An environmental consultant samples these wells one or two times a year to determine the status of the contamination and the potential for remediation of the contamination by natural attenuation, the dissipation of the contamination over time to concentrations below applicable standards. If such sampling evidences a sufficient degree of and trend toward natural attenuation of the contamination at the site, we may be able to obtain a closure letter from the regulatory authorities resolving the issue without the need for active remediation. If a sufficient degree and trend toward natural attenuation is not evidenced by sampling, a more active form of remediation beyond natural attenuation may be required. The sampling has not yet satisfied all of the requirements for closure by natural attenuation. As a result, sampling continues and the reserve remains at an amount to reflect our estimated cost of active remediation. The reserve is not measured on a discounted basis. We believe, based on findings-to-date and known environmental regulations, that the remaining environmental reserve of $1.3 million at September 27, 2020 is adequate.

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Shareholders' Equity

3 Months Ended

Sep. 27, 2020

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

A summary of activity impacting shareholders’ equity for the three month periods ended September 27, 2020 and September 29, 2019 were as follows (in thousands):

	Three Months Ended September 27, 2020
	Total Shareholders’ Equity			Common Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss			Treasury Stock			Non-Controlling Interest
Balance, June 28, 2020	$	175,441		$	74	$	97,977	$	211,940	$	(22,113	)	$	(135,656	)	$	23,219
Net Income		10,073			—		—		8,008		—			—			2,065
Dividend Declared – Non-    controlling Interests of    Subsidiaries		(490	)		—		—		—		—			—			(490	)
Translation Adjustments		1,699			—		—		—		1,378			—			321
Stock Based Compensation		208			—		208		—		—			—			—
Pension and Postretirement    Adjustment, Net of    Tax		70			—		—		—		70			—			—
Employee Stock Purchases		19			—		3		—		—			16			—
Balance, September 27, 2020	$	187,020		$	74	$	98,188	$	219,948	$	(20,665	)	$	(135,640	)	$	25,115

	Three Months Ended September 29, 2019
	Total Shareholders’ Equity			Common Stock		Capital in Excess of Par Value		Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Non-Controlling Interest
Balance, June 30, 2019	$	187,816		$	73	$	96,491	$	221,117		$	(18,568	)	$	(135,725	)	$	24,428
Net Income		2,680			—		—		1,244			—			—			1,436
Dividend Declared		(522	)		—		—		(522	)		—			—			—
Dividend Declared – Non-    controlling Interests of    Subsidiaries		(980	)		—		—		—			—			—			(980	)
Translation Adjustments		(1,448	)		—		—		—			(1,196	)		—			(252	)
Stock Based Compensation		413			—		413		—			—			—			—
Pension and Postretirement     Adjustment, Net of     Tax		73			—		—		—			73			—			—
Stock Option Exercises		222			1		221		—			—			—			—
Employee Stock Purchases		17			—		3		—			—			14			—
Balance, September 29, 2019	$	188,271		$	74	$	97,128	$	221,839		$	(19,691	)	$	(135,711	)	$	24,632

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Revenue from Contracts with Customers

3 Months Ended

Sep. 27, 2020

Revenue From Contract With Customer [Abstract]

Revenue from Contracts with Customers

Revenue from Contracts with Customers

We generate revenue from the production of parts sold to automotive and light-truck Original Equipment Manufacturers (“OEMs”), or Tier 1 suppliers at the direction of the OEM, under long-term supply agreements supporting new vehicle production. Such agreements also require related production of service parts subsequent to the initial vehicle production periods. Additionally, we generate revenue from the production of parts sold in aftermarket service channels and to non-automotive commercial customers.

Contract Balances:

We have no material contract assets as of September 27, 2020. Contract liability balances primarily include discounts recognized as a reduction in sales at the point of revenue recognition, but which will be applied by the customer agreement after the end of the reporting period. Contract liability balances are included in Other Accrued Liabilities in the accompanying Condensed Consolidated Balance Sheets. The activity related to contract liability balances during the three month period ended September 27, 2020 was as follows (thousands of dollars):

Balance, June 28, 2020	$	373
Discounts Recorded as a Reduction in Sales		118
Payments of Discounts to Customers		(129	)
Other		40
Balance, September 27, 2020	$	402

Revenue by Product Group and Customer:  

Revenue by product group for the periods presented was as follows (thousands of dollars):

	Three Months Ended
	September 27, 2020		September 29, 2019
Door Handles & Exterior Trim	$	34,091	$	31,391
Keys & Locksets		32,736		32,469
Power Access		20,620		19,458
Latches		13,835		13,897
Aftermarket & OE Service		13,137		10,913
Driver Controls		9,787		9,785
Other		2,028		2,049
	$	126,234	$	119,962

Revenue by customer or customer group for the periods presented was as follows (thousands of dollars):

	Three Months Ended
	September 27, 2020		September 29, 2019
General Motors Company	$	37,756	$	33,838
Fiat Chrysler Automobiles		25,083		25,482
Ford Motor Company		15,846		15,812
Commercial and Other OEM     Customers		21,434		21,346
Tier 1 Customers		17,495		17,747
Hyundai / Kia		8,620		5,737
	$	126,234	$	119,962

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Other Expense, Net

3 Months Ended

Sep. 27, 2020

Other Income And Expenses [Abstract]

Other Expense, Net

Other Expense, net

Net other expense included in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income primarily included foreign currency transaction gains and losses, realized and unrealized losses on our Mexican peso currency forward contracts, net periodic pension and postretirement benefit costs, other than the service cost component, related to our supplemental executive retirement plan (“SEPR”) and postretirement plans and Rabbi Trust gains and losses. Foreign currency transaction gains and losses resulted from activity associated with foreign denominated assets held by our Mexican subsidiaries. We entered into the Mexican Peso currency forward contracts described above to minimize earnings volatility resulting from changes in exchange rates affecting the U.S. dollar cost of our Mexican operations. Unrealized gains and losses on the peso forward contracts recognized as a result of mark-to-market adjustments as of September 27, 2020 may or may not be realized in future periods, depending on the actual Mexican peso to U.S. dollar exchange rates experienced during the balance of the contract period. The Rabbi Trust assets fund our amended and restated supplemental executive retirement plan. The investments held in this Trust are considered trading securities.

The impact of these items for each of the periods presented was as follows (in thousands):

	Three Months Ended
	September 27, 2020			September 29, 2019
Foreign Currency Transaction Loss	$	(399	)	$	(85	)
Unrealized Gain on Peso Forward    Contracts		335			—
Realized Loss on Peso Forward Contracts		(59	)		—
Pension and Postretirement Plans Cost		(105	)		(117	)
Rabbi Trust Loss		(57	)		(2	)
Other		25			107
	$	(260	)	$	(97	)

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Income Taxes

3 Months Ended

Sep. 27, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Our effective tax rate was 13.5% and 10.0% for the three months ended September 27, 2020 and September 29, 2019, respectively. Effective July 20, 2020, the U.S Treasury Department finalized and enacted previously proposed regulations regarding the Global Intangible Low Taxed Income (GILTI) tax provisions of the Tax Cuts and Jobs Act of 2017 (TCJA). Prior to this enactment, GILTI represented a significant U.S. income tax on our foreign earnings during fiscal 2020. With the enactment of these final regulations, we are now eligible for an exclusion from GILTI since we meet the provisions for the GILTI High-Tax exception included in the final regulations. In addition, the enactment of the new regulations and our eligibility for the GILTI High-Tax exception are retroactive to the original enactment of the GILTI tax provision, which includes our 2020 fiscal year. As a result of the newly enacted regulations, we recorded an income tax benefit of $675,000 during the three month period ended September 27, 2020. During the three month period ended September 29, 2019, our effective tax rate was impacted by the discrete impact of the non-cash compensation expense, as discussed under Pension and Postretirement Benefits below. Our effective tax rate differs from the statutory tax rate due to the GILTI provisions, our available R&D tax credit and the non-controlling interest portion of our pre-tax income. The non-controlling interest impacts the effective tax rate as ADAC-STRATTEC LLC and STRATTEC POWER ACCESS LLC entities are taxed as partnerships for U.S. tax purposes.

STRATTEC is currently subject to state income tax examinations in our Wisconsin jurisdiction for fiscal years 2015, 2016, 2017, and 2018. The audit is currently in process and preliminary results are not yet available.

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Earnings Per Share

3 Months Ended

Sep. 27, 2020

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Basic earnings per share is computed on the basis of the weighted average number of shares of common stock outstanding during the applicable period. Diluted earnings per share is computed on the basis of the weighted average number of shares of common stock plus the potential dilutive common shares outstanding during the applicable period using the treasury stock method. Potential dilutive common shares include outstanding stock options and unvested restricted stock awards.

A reconciliation of the components of the basic and diluted per-share computations follows (in thousands, except per share amounts):  

	Three Months Ended
	September 27, 2020						September 29, 2019
	Net Income		Shares		Per-Share Amount		Net Income		Shares		Per-Share Amount
Basic Earnings Per Share	$	8,008		3,765	$	2.13	$	1,244		3,710	$	0.34
Stock Option and Restricted    Stock Awards		—		23				—		18
Diluted Earnings Per Share	$	8,008		3,788	$	2.11	$	1,244		3,728	$	0.33

The calculation of earnings per share excluded 90,860 share-based payment awards for both of the quarters ended September 27, 2020 and September 29, 2019 because their inclusion would have been anti-dilutive.

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Stock-Based Compensation

3 Months Ended

Sep. 27, 2020

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-based Compensation

Stock-based Compensation

We maintain an omnibus stock incentive plan. This plan provides for the granting of stock options, shares of restricted stock and stock appreciation rights. As of September 27, 2020, the Board of Directors had designated 1,850,000 shares of common stock available for the grant of awards under the plan. Remaining shares available to be granted under the plan as of September 27, 2020 were 76,434. Awards that expire or are canceled without delivery of shares become available for re-issuance under the plan. We issue new shares of common stock to satisfy stock option exercises. We included a proposal at our Annual Meeting of Shareholders held on October 6, 2020 to increase the number of shares available to be granted under this omnibus stock incentive plan by an additional 150,000 shares, which proposal was approved by our shareholders at the Annual Meeting.

Nonqualified and incentive stock options and shares of restricted stock have been granted to our officers, outside directors and specified associates under our stock incentive plan. Stock options granted under the plan may not be issued with an exercise price less than the fair market value of the common stock on the date the option is granted. Stock options become exercisable as determined at the date of grant by the Compensation Committee of the Board of Directors. The options expire 10 years after the grant date unless an earlier expiration date is set at the time of grant. The options vest 1 to 4 years after the date of grant as determined by the Compensation Committee of the Board of Directors. Shares of restricted stock granted under the plan are subject to vesting criteria determined by the Compensation Committee of the Board of Directors at the time the shares are granted and have a minimum vesting period of one year from the date of grant. Unvested restricted shares granted have voting rights, regardless of whether the shares are vested or unvested, but only have the right to receive cash dividends after such shares become vested. Restricted stock grants vest 1 to 5 years after the date of grant as determined by the Compensation Committee of the Board of Directors.

The fair value of each stock option grant was estimated as of the date of grant using the Black-Scholes pricing model. The fair value of each restricted stock grant was based on the market price of the underlying common stock as of the date of grant. The resulting compensation cost for fixed awards with graded vesting schedules is amortized on a straight line basis over the vesting period for the entire award.

A summary of stock option activity under our stock incentive plan for the three months ended September 27, 2020 was as follows:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in thousands)
Outstanding, June 28, 2020		90,860	$	35.88
Outstanding, September 27, 2020		90,860	$	35.88		2.2	$	—
Exercisable, September 27, 2020		90,860	$	35.88		2.2	$	—

The intrinsic value of stock options exercised and the fair value of stock options that vested during the three month periods presented below were as follows (in thousands):

	Three Months Ended
	September 27, 2020		September 29, 2019
Intrinsic Value of Options Exercised	$	—	$	37
Fair Value of Stock Options Vesting	$	—	$	—

No options were granted during the three month periods ended September 27, 2020 or September 29, 2019.  

A summary of restricted stock activity under our omnibus stock incentive plan for the three months ended September 27, 2020 was as follows:

	Shares			Weighted Average Grant Date Fair Value
Nonvested Balance, June 28, 2020		69,394		$	30.59
Granted		39,900		$	21.20
Vested		(34,669	)	$	34.95
Nonvested Balance, September 27, 2020		74,625		$	23.54

As of September 27, 2020, all compensation cost related to outstanding stock options granted under our omnibus stock incentive plan has been recognized. As of September 27, 2020, there was approximately $1.4 million of total unrecognized compensation cost related to unvested restricted stock grants outstanding under the plan. This cost is expected to be recognized over a remaining weighted average period of 1.1 years. Total unrecognized compensation cost will be adjusted for any future changes in estimated and actual forfeitures of awards granted under our omnibus stock incentive plan.

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Pension and Postretirement Benefits

3 Months Ended

Sep. 27, 2020

Compensation And Retirement Disclosure [Abstract]

Pension and Postretirement Benefits

Pension and Postretirement Benefits

We had a qualified, noncontributory defined benefit pension plan (“Qualified Pension Plan”) covering substantially all U.S. associates employed by us prior to January 1, 2010. Effective December 31, 2009, the Board of Directors amended the Qualified Pension Plan to freeze benefit accruals and future eligibility. The Board of Directors subsequently approved to proceed with the termination of the Qualified Pension Plan. During the quarter ended December 30, 2018, we completed a substantial portion of terminating the Qualified Pension Plan. In connection with the termination of the Qualified Pension Plan, distributions from the Qualified Pension Plan trust were made during the three month period ended December 30, 2018 to participants who elected lump-sum distributions. Additionally, during the three months ended December 30, 2018, we entered into an agreement with an insurance company to purchase from us, through a series of annuity contracts, our remaining obligations under the Qualified Pension Plan and, as a result, we settled the remaining obligations under the plan for the remaining participants utilizing funds available in the Qualified Pension Plan trust. No additional cash contributions to the trust were required to settle the pension obligations. As a result of these actions, a non-cash pre-tax settlement charge of $31.9 million was recorded during fiscal 2019. A non-cash compensation expense charge of $4.2 million was also recorded during fiscal 2019 related to the future transfer of the excess assets in the Qualified Pension Plan to a STRATTEC defined contribution plan for subsequent pay-out to eligible STRATTEC employees based on a plan approved by the Board of Directors in June 2019. An additional $4.8 million non-cash compensation expense charge related to the final transfer and pay-out of the excess Qualified Pension Plan assets was recorded during our fiscal 2020, of which $2.2 million of non-cash compensation expense was recorded during the three month period ended September 29, 2019. As of December 29, 2019, the excess Qualified Pension Plan assets were transferred to our defined contribution plan and distributed to eligible STRATTEC employees, which completed the full termination of the Qualified Pension Plan.

We have a noncontributory supplemental executive retirement plan (“SERP”), which is a nonqualified defined benefit plan. The SERP is funded through a Rabbi Trust with TMI Trust Company. Under the SERP, as amended December 31, 2013, participants

received an accrued lump-sum benefit as of December 31, 2013, which was credited to each participant’s account. Subsequent to December 31, 2013, each eligible participant receives a supplemental retirement benefit equal to the foregoing lump sum benefit, plus an annual benefit accrual equal to 8 percent of the participant’s base salary and cash bonus, plus annual credited interest on the participant’s account balance. All then current participants as of December 31, 2013 are fully vested in their account balances with any new individuals participating in the SERP effective on or after January 1, 2014 being subject to a five year vesting period. The SERP, which is considered a nonqualified defined benefit plan under applicable rules and regulations of the Internal Revenue Code, will continue to be funded through use of a Rabbi Trust to hold investment assets to be used in part to fund any future required lump sum benefit payments to participants. The Rabbi Trust assets had a value of $2.9 million at both September 27, 2020 and June 28, 2020 and are included in Other Long-Term Assets in the accompanying Condensed Consolidated Balance Sheets.

We also sponsor a postretirement health care plan for all U.S. associates hired prior to June 1, 2001. The expected cost of retiree health care benefits is recognized during the years the associates who are covered under the plan render service. Effective January 1, 2010, an amendment to the postretirement health care plan limited the benefit for future eligible retirees to $4,000 per plan year and the benefit is further subject to a maximum five year coverage period based on the associate’s retirement date and age. The postretirement health care plan is unfunded.

The service cost component of the net periodic benefit costs under these plans is allocated between Cost of Goods Sold and Engineering, Selling and Administrative Expenses while the remaining components of the net periodic benefit costs are included in Other Expense, net in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income.

The following table summarizes the net periodic benefit cost recognized for each of the periods indicated under these plans (in thousands):

	SERP Benefits				Postretirement Benefits
	Three Months Ended				Three Months Ended
	September 27, 2020		September 29, 2019		September 27, 2020			September 29, 2019
Service Cost	$	16	$	19	$	3		$	3
Interest Cost		10		15	4				6
Amortization of Prior Service Credit		—		—		(2	)		(7	)
Amortization of Unrecognized Net Loss		3		4	89				99
Net Periodic Benefit Cost	$	29	$	38	$	94		$	101

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Accumulated Other Comprehensive Loss

3 Months Ended

Sep. 27, 2020

Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract]

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

The following tables summarize the changes in accumulated other comprehensive loss (“AOCL”) for each period presented (in thousands):

	Three Months Ended September 27, 2020
	Foreign Currency Translation Adjustments			Retirement and Postretirement Benefit Plans			Total
Balance, June 28, 2020	$	20,136		$	1,977		$	22,113
Other Comprehensive Income Before Reclassifications		(1,699	)		—			(1,699	)
Net Other Comprehensive Income Before       Reclassifications		(1,699	)		—			(1,699	)
Reclassifications:
Prior Service Credits (A)		—			2			2
Unrecognized Net Loss (A)		—			(92	)		(92	)
Total Reclassifications Before Tax		—			(90	)		(90	)
Income Tax		—			20			20
Net Reclassifications		—			(70	)		(70	)
Other Comprehensive Income		(1,699	)		(70	)		(1,769	)
Other Comprehensive Income Attributable to Non-    Controlling Interest		(321	)		—			(321	)
Balance, September 27, 2020	$	18,758		$	1,907		$	20,665

	Three Months Ended September 29, 2019
	Foreign Currency Translation Adjustments		Retirement and Postretirement Benefit Plans			Total
Balance, June 30, 2019	$	16,317	$	2,251		$	18,568
Other Comprehensive Loss Before Reclassifications		1,448		—			1,448
Net Other Comprehensive Loss Before       Reclassifications		1,448		—			1,448
Reclassifications:
Prior Service Credits (A)		—		7			7
Unrecognized Net Loss (A)		—		(103	)		(103	)
Total Reclassifications Before Tax		—		(96	)		(96	)
Income Tax		—		23			23
Net Reclassifications		—		(73	)		(73	)
Other Comprehensive Income		1,448		(73	)		1,375
Other Comprehensive Income Attributable to Non-    Controlling Interest		252		—			252
Balance, September 29, 2019	$	17,513	$	2,178		$	19,691

(A) Amounts reclassified are included in the computation of net periodic benefit cost, which is included in Other Expense, net in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income. See Pension and Postretirement Benefits note to these Notes to Condensed Consolidated Financial Statements above.

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Derivative Instruments (Tables)

3 Months Ended

Sep. 27, 2020

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Schedule of Quantification of Outstanding Mexican Peso Forward Contracts

The following table quantifies the outstanding Mexican peso forward contracts as of September 27, 2020 (thousands of dollars, except with respect to the average forward contractual exchange rate):

	Effective Dates	Notional Amount		Average Forward Contractual Exchange Rate		Fair Value
Buy MXP/Sell USD	October 14, 2020 - December 16, 2020	$	3,000		21.40	$	(146	)

Fair Market Value of All Outstanding Peso Forward Contracts

The fair market value of all outstanding Mexican peso forward contracts in the accompanying Condensed Consolidated Balance Sheets as of the dates specified was as follows (thousands of dollars):

	September 27, 2020		June 28, 2020
Not Designated as Hedging Instruments:
Other Current Liabilities:
Mexican Peso Forward Contracts	$	146	$	480

Pre-Tax Effects of the Peso Forward Contracts

The pre-tax effects of the Mexican peso forward contracts are included in Other Expense, net on the accompanying Condensed Consolidated Statements of Income and Comprehensive Income and consisted of the following for the periods indicated below (thousands of dollars):

	Three Months Ended
	September 27, 2020			September 29, 2019
Not Designated as Hedging Instruments:
Realized Loss	$	(59	)	$	—
Unrealized Gain	$	335		$	—

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Fair Value of Financial Instruments (Tables)

3 Months Ended

Sep. 27, 2020

Fair Value Disclosures [Abstract]

Summary of Financial Assets and Liabilities at Fair Value on Recurring Basis

The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of September 27, 2020 (in thousands):  

	Fair Value Inputs
	Level 1 Assets: Quoted Prices In Active Markets		Level 2 Assets: Observable Inputs Other Than Market Prices		Level 3 Assets: Unobservable Inputs
Assets:
Rabbi Trust Assets:
Stock Index Funds:
Small Cap	$	270	$	—	$	—
Mid Cap		310		—		—
Large Cap		623		—		—
International		870		—		—
Fixed Income Funds		803		—		—
Cash and Cash Equivalents		—		3		—
Total Assets at Fair Value	$	2,876	$	3	$	—
Liabilities:
Mexican Peso Forward Contracts	$	—	$	146	$	—

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Equity Earnings of Joint Ventures (Tables) - VAST LLC

3 Months Ended

Sep. 27, 2020

Summarized Statements of Operations

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

	Three Months Ended
	September 27, 2020			September 29, 2019
Net Sales	$	50,411		$	42,567
Cost of Goods Sold		40,591			34,658
Gross Profit		9,820			7,909
Engineering, Selling and Administrative Expenses		6,603			6,681
Income From Operations		3,217			1,228
Other (Expense) Income, net		(149	)		860
Income before Provision for Income Taxes		3,068			2,088
Provision for Income Taxes		592			628
Net Income	$	2,476		$	1,460
STRATTEC’s Equity Earnings of VAST LLC	$	825		$	487

Summarize of Related Party Transaction

The following table summarizes these related party transactions with VAST LLC for the periods indicated below (in thousands):

	Three Months Ended
	September 27, 2020		September 29, 2019
Sales to VAST LLC	$	1,216	$	891
Purchases from VAST LLC	$	187	$	97
Expenses Charged to VAST LLC	$	507	$	831
Expenses Charged from VAST LLC	$	292	$	226

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Leases (Tables)

3 Months Ended

Sep. 27, 2020

Leases [Abstract]

Schedule of Operating Lease Asset and Obligation Included in Condensed Consolidated Balance Sheet

The operating lease asset and obligation related to our El Paso warehouse lease included in the accompanying Condensed Consolidated Balance Sheet are presented below (in thousands):

	September 27, 2020
Right-of Use Asset Under Operating Lease:
Other Long-Term Assets	$	3,668
Lease Obligation Under Operating Lease:
Current Liabilities: Accrued Liabilities: Other	$	354
Other Long-Term Liabilities		3,314
	$	3,668

Schedule of Future Minimum Lease Payments Under Non-Cancelable Lease Including Options to Extend

Future minimum lease payments, by our fiscal year, including options to extend that are reasonably certain to be exercised, under the non-cancelable lease are as follows as of September 27, 2020 (in thousands):

2021 (for the remaining nine months)	$	357
2022		484
2023		497
2024		509
2025		522
Thereafter		1,834
Total Future Minimum Lease Payments		4,203
Less: Imputed Interest		(535	)
Total Lease Obligations	$	3,668

Schedule of Cash Flow Information Related to Operating Lease

Cash flow information related to the operating lease is shown below (in thousands):

	Three Months Ended
	September 27, 2020
Operating Cash Flows:
Cash Paid Related to Operating Lease Obligation	$	116

Schedule of Weighted Average Lease Term and Discount Rate for Operating Lease

The weighted average lease term and discount rate for the El Paso, Texas operating lease are shown below:

	September 27, 2020
Weighted Average Remaining Lease Term (in years)		8.1
Weighted Average Discount Rate		3.3	%

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Credit Facilities (Tables)

3 Months Ended

Sep. 27, 2020

Debt Disclosure [Abstract]

Schedule of Outstanding Borrowings Under the Credit Facilities

Outstanding borrowings under the credit facilities were as follows (in thousands): 

	September 27, 2020		June 28, 2020
STRATTEC Credit Facility	$	13,000	$	18,000
ADAC-STRATTEC Credit Facility		17,000		17,000
	$	30,000	$	35,000

Schedule of Average Outstanding Borrowings and the Weighted Average Interest Rate

Average outstanding borrowings and the weighted average interest rate under each credit facility referenced above were as follows for each period presented (in thousands):

	Three Months Ended
	Average Outstanding Borrowings				Weighted Average Interest Rate
	September 27, 2020		September 29, 2019		September 27, 2020			September 29, 2019
STRATTEC Credit Facility	$	17,231	$	16,033		1.2	%		3.3	%
ADAC-STRATTEC Credit Facility	$	17,000	$	23,473		1.4	%		3.5	%

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Shareholders' Equity (Tables)

3 Months Ended

Sep. 27, 2020

Equity [Abstract]

Summary of Activity Impacting Shareholders' Equity

A summary of activity impacting shareholders’ equity for the three month periods ended September 27, 2020 and September 29, 2019 were as follows (in thousands):

	Three Months Ended September 27, 2020
	Total Shareholders’ Equity			Common Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss			Treasury Stock			Non-Controlling Interest
Balance, June 28, 2020	$	175,441		$	74	$	97,977	$	211,940	$	(22,113	)	$	(135,656	)	$	23,219
Net Income		10,073			—		—		8,008		—			—			2,065
Dividend Declared – Non-    controlling Interests of    Subsidiaries		(490	)		—		—		—		—			—			(490	)
Translation Adjustments		1,699			—		—		—		1,378			—			321
Stock Based Compensation		208			—		208		—		—			—			—
Pension and Postretirement    Adjustment, Net of    Tax		70			—		—		—		70			—			—
Employee Stock Purchases		19			—		3		—		—			16			—
Balance, September 27, 2020	$	187,020		$	74	$	98,188	$	219,948	$	(20,665	)	$	(135,640	)	$	25,115

	Three Months Ended September 29, 2019
	Total Shareholders’ Equity			Common Stock		Capital in Excess of Par Value		Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Non-Controlling Interest
Balance, June 30, 2019	$	187,816		$	73	$	96,491	$	221,117		$	(18,568	)	$	(135,725	)	$	24,428
Net Income		2,680			—		—		1,244			—			—			1,436
Dividend Declared		(522	)		—		—		(522	)		—			—			—
Dividend Declared – Non-    controlling Interests of    Subsidiaries		(980	)		—		—		—			—			—			(980	)
Translation Adjustments		(1,448	)		—		—		—			(1,196	)		—			(252	)
Stock Based Compensation		413			—		413		—			—			—			—
Pension and Postretirement     Adjustment, Net of     Tax		73			—		—		—			73			—			—
Stock Option Exercises		222			1		221		—			—			—			—
Employee Stock Purchases		17			—		3		—			—			14			—
Balance, September 29, 2019	$	188,271		$	74	$	97,128	$	221,839		$	(19,691	)	$	(135,711	)	$	24,632

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Revenue from Contracts with Customers (Tables)

3 Months Ended

Sep. 27, 2020

Revenue From Contract With Customer [Abstract]

Contract Liability Balances

The activity related to contract liability balances during the three month period ended September 27, 2020 was as follows (thousands of dollars):

Balance, June 28, 2020	$	373
Discounts Recorded as a Reduction in Sales		118
Payments of Discounts to Customers		(129	)
Other		40
Balance, September 27, 2020	$	402

Revenue by Product Group and Customer

Revenue by product group for the periods presented was as follows (thousands of dollars):

	Three Months Ended
	September 27, 2020		September 29, 2019
Door Handles & Exterior Trim	$	34,091	$	31,391
Keys & Locksets		32,736		32,469
Power Access		20,620		19,458
Latches		13,835		13,897
Aftermarket & OE Service		13,137		10,913
Driver Controls		9,787		9,785
Other		2,028		2,049
	$	126,234	$	119,962

Revenue by customer or customer group for the periods presented was as follows (thousands of dollars):

	Three Months Ended
	September 27, 2020		September 29, 2019
General Motors Company	$	37,756	$	33,838
Fiat Chrysler Automobiles		25,083		25,482
Ford Motor Company		15,846		15,812
Commercial and Other OEM     Customers		21,434		21,346
Tier 1 Customers		17,495		17,747
Hyundai / Kia		8,620		5,737
	$	126,234	$	119,962

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Other Expense, Net (Tables)

3 Months Ended

Sep. 27, 2020

Other Income And Expenses [Abstract]

Summary of Other Expense, Net

The impact of these items for each of the periods presented was as follows (in thousands):

	Three Months Ended
	September 27, 2020			September 29, 2019
Foreign Currency Transaction Loss	$	(399	)	$	(85	)
Unrealized Gain on Peso Forward    Contracts		335			—
Realized Loss on Peso Forward Contracts		(59	)		—
Pension and Postretirement Plans Cost		(105	)		(117	)
Rabbi Trust Loss		(57	)		(2	)
Other		25			107
	$	(260	)	$	(97	)

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Earnings Per Share (Tables)

3 Months Ended

Sep. 27, 2020

Earnings Per Share [Abstract]

Reconciliation of the Components of Basic and Diluted Per Share

A reconciliation of the components of the basic and diluted per-share computations follows (in thousands, except per share amounts):  

	Three Months Ended
	September 27, 2020						September 29, 2019
	Net Income		Shares		Per-Share Amount		Net Income		Shares		Per-Share Amount
Basic Earnings Per Share	$	8,008		3,765	$	2.13	$	1,244		3,710	$	0.34
Stock Option and Restricted    Stock Awards		—		23				—		18
Diluted Earnings Per Share	$	8,008		3,788	$	2.11	$	1,244		3,728	$	0.33

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Stock-Based Compensation (Tables)

3 Months Ended

Sep. 27, 2020

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Stock Option Activity Under Our Stock Incentive Plan

A summary of stock option activity under our stock incentive plan for the three months ended September 27, 2020 was as follows:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in thousands)
Outstanding, June 28, 2020		90,860	$	35.88
Outstanding, September 27, 2020		90,860	$	35.88		2.2	$	—
Exercisable, September 27, 2020		90,860	$	35.88		2.2	$	—

Intrinsic Value of Stock Options Exercised and the Fair Value of Stock Options Vested

The intrinsic value of stock options exercised and the fair value of stock options that vested during the three month periods presented below were as follows (in thousands):

	Three Months Ended
	September 27, 2020		September 29, 2019
Intrinsic Value of Options Exercised	$	—	$	37
Fair Value of Stock Options Vesting	$	—	$	—

Summary of Restricted Stock Activity Under Our Stock Incentive Plan

A summary of restricted stock activity under our omnibus stock incentive plan for the three months ended September 27, 2020 was as follows:

	Shares			Weighted Average Grant Date Fair Value
Nonvested Balance, June 28, 2020		69,394		$	30.59
Granted		39,900		$	21.20
Vested		(34,669	)	$	34.95
Nonvested Balance, September 27, 2020		74,625		$	23.54

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Pension and Postretirement Benefits (Tables)

3 Months Ended

Sep. 27, 2020

Compensation And Retirement Disclosure [Abstract]

Summary of Net Periodic Benefit Cost Recognized

The following table summarizes the net periodic benefit cost recognized for each of the periods indicated under these plans (in thousands):

	SERP Benefits				Postretirement Benefits
	Three Months Ended				Three Months Ended
	September 27, 2020		September 29, 2019		September 27, 2020			September 29, 2019
Service Cost	$	16	$	19	$	3		$	3
Interest Cost		10		15	4				6
Amortization of Prior Service Credit		—		—		(2	)		(7	)
Amortization of Unrecognized Net Loss		3		4	89				99
Net Periodic Benefit Cost	$	29	$	38	$	94		$	101

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Accumulated Other Comprehensive Loss (Tables)

3 Months Ended

Sep. 27, 2020

Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract]

Summary of Changes in Accumulated Other Comprehensive Loss

The following tables summarize the changes in accumulated other comprehensive loss (“AOCL”) for each period presented (in thousands):

	Three Months Ended September 27, 2020
	Foreign Currency Translation Adjustments			Retirement and Postretirement Benefit Plans			Total
Balance, June 28, 2020	$	20,136		$	1,977		$	22,113
Other Comprehensive Income Before Reclassifications		(1,699	)		—			(1,699	)
Net Other Comprehensive Income Before       Reclassifications		(1,699	)		—			(1,699	)
Reclassifications:
Prior Service Credits (A)		—			2			2
Unrecognized Net Loss (A)		—			(92	)		(92	)
Total Reclassifications Before Tax		—			(90	)		(90	)
Income Tax		—			20			20
Net Reclassifications		—			(70	)		(70	)
Other Comprehensive Income		(1,699	)		(70	)		(1,769	)
Other Comprehensive Income Attributable to Non-    Controlling Interest		(321	)		—			(321	)
Balance, September 27, 2020	$	18,758		$	1,907		$	20,665

	Three Months Ended September 29, 2019
	Foreign Currency Translation Adjustments		Retirement and Postretirement Benefit Plans			Total
Balance, June 30, 2019	$	16,317	$	2,251		$	18,568
Other Comprehensive Loss Before Reclassifications		1,448		—			1,448
Net Other Comprehensive Loss Before       Reclassifications		1,448		—			1,448
Reclassifications:
Prior Service Credits (A)		—		7			7
Unrecognized Net Loss (A)		—		(103	)		(103	)
Total Reclassifications Before Tax		—		(96	)		(96	)
Income Tax		—		23			23
Net Reclassifications		—		(73	)		(73	)
Other Comprehensive Income		1,448		(73	)		1,375
Other Comprehensive Income Attributable to Non-    Controlling Interest		252		—			252
Balance, September 29, 2019	$	17,513	$	2,178		$	19,691

(A) Amounts reclassified are included in the computation of net periodic benefit cost, which is included in Other Expense, net in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income. See Pension and Postretirement Benefits note to these Notes to Condensed Consolidated Financial Statements above.

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Basis of Financial Statements (Details Textual)	3 Months Ended
	Sep. 27, 2020 Subsidiary Joint_Venture Segment
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Number of reporting segments related to STRATTEC Security Corporation | Segment	1
VAST LLC | CHINA
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Number of wholly owned subsidiaries	4
VAST LLC | BRAZIL
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Number of wholly owned subsidiaries	1
VAST LLC | INDIA
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Number of joint venture entities | Joint_Venture	1

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Derivative Instruments - Schedule of Quantification of Outstanding Mexican Peso Forward Contracts (Details) - Buy MXP/Sell USD	3 Months Ended
	Sep. 27, 2020 USD ($) $ / $
Derivative [Line Items]
Derivative, Effective Dates, Inception	Oct. 14, 2020
Derivative, Effective Dates, Maturity	Dec. 16, 2020
Derivative, Notional Amount	$ 3,000,000
Derivative, Average Forward Contractual Exchange Rate | $ / $	21.40
Derivative, Fair Value	$ (146,000)

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Derivative Instruments - Fair Market Value of All Outstanding Peso Forward Contracts (Details) - USD ($) $ in Thousands	Sep. 27, 2020	Jun. 28, 2020
Other Current Liabilities | Mexican Peso Forward Contracts
Not designated as hedging instruments:
Fair market value of derivative instruments	$ 146	$ 480

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Derivative Instruments - Pre-Tax Effects of the Peso Forward Contracts (Details) $ in Thousands	3 Months Ended
	Sep. 27, 2020 USD ($)
Pre-tax effects of the Mexican peso forward contracts
Realized Loss	$ (59)
Unrealized Gain	335
Not Designated as Hedging Instrument | Other Expense, Net
Pre-tax effects of the Mexican peso forward contracts
Realized Loss	(59)
Unrealized Gain	$ 335

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Fair Value of Financial Instruments - Summary of Financial Assets and Liabilities at Fair Value on Recurring Basis (Details) - Fair Value Measurements Recurring $ in Thousands	Sep. 27, 2020 USD ($)
Level 1
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total Assets at Fair Value	$ 2,876
Level 1 | Fixed Income Funds
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total Assets at Fair Value	803
Level 1 | Stock Index Funds | Small Cap
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total Assets at Fair Value	270
Level 1 | Stock Index Funds | Mid Cap
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total Assets at Fair Value	310
Level 1 | Stock Index Funds | Large Cap
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total Assets at Fair Value	623
Level 1 | Stock Index Funds | International
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total Assets at Fair Value	870
Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total Assets at Fair Value	3
Level 2 | Cash and Cash Equivalents
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total Assets at Fair Value	3
Level 2 | Mexican Peso Forward Contracts
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total Liabilities at Fair Value	$ 146

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Investment in Joint Ventures and Majority Owned Subsidiaries (Details Textual) - USD ($)	3 Months Ended
	Sep. 27, 2020	Sep. 29, 2019
Schedule Of Equity Method Investments [Line Items]
Equity earnings of joint ventures	$ 825,000	$ 484,000
ADAC-STRATTEC LLC
Schedule Of Equity Method Investments [Line Items]
Percentage ownership interest in less than wholly owned consolidated subsidiary	51.00%	51.00%
Income (loss) from majority owned subsidiaries, impact on net income	$ 1,400,000	$ 1,000,000.0
STRATTEC POWER ACCESS LLC
Schedule Of Equity Method Investments [Line Items]
Percentage ownership interest in less than wholly owned consolidated subsidiary	80.00%	80.00%
Income (loss) from majority owned subsidiaries, impact on net income	$ 685,000	$ 266,000
ADAC | ADAC-STRATTEC LLC
Schedule Of Equity Method Investments [Line Items]
Percentage ownership interest in less than wholly owned consolidated subsidiary	49.00%	49.00%
Engineering, research, design and sales fee	$ 2,400,000	$ 2,200,000
Sales	$ 3,100,000	$ 3,700,000
WITTE | STRATTEC POWER ACCESS LLC
Schedule Of Equity Method Investments [Line Items]
Percentage ownership interest in less than wholly owned consolidated subsidiary	20.00%	20.00%
Purchases	$ 83,000	$ 393,000
VAST LLC
Schedule Of Equity Method Investments [Line Items]
Percentage ownership interest in equity method investment	33.33%
VAST LLC | MINDA-VAST ACCESS SYSTEMS
Schedule Of Equity Method Investments [Line Items]
Percentage ownership interest in equity method investment	50.00%
VAST LLC | STRATTEC
Schedule Of Equity Method Investments [Line Items]
Percentage ownership interest in equity method investment	33.30%
Equity earnings of joint ventures	$ 825,000	487,000
Payments to acquire interest in joint venture	$ 0	$ 0
VAST LLC | ADAC
Schedule Of Equity Method Investments [Line Items]
Percentage ownership interest in equity method investment	33.30%
VAST LLC | WITTE
Schedule Of Equity Method Investments [Line Items]
Percentage ownership interest in equity method investment	33.30%

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Equity Earnings of Joint Ventures (Details Textual)	Sep. 27, 2020
VAST LLC
Schedule Of Equity Method Investments [Line Items]
Percentage ownership interest in equity method investment	33.33%

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Equity Earnings of Joint Ventures - Summarized Statements of Operations (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 27, 2020	Sep. 29, 2019
Summarized statements of operations
Net sales	$ 126,234	$ 119,962
Cost of goods sold	103,723	104,076
Gross profit	22,511	15,886
Engineering, selling and administrative expenses	11,314	12,954
Income from operations	11,197	2,932
Other expense, net	(260)	(97)
Income before provision for income taxes and non-controlling interest	11,650	2,979
Provision for Income Taxes	1,577	299
Net income	10,073	2,680
Equity earnings of joint ventures	825	484
VAST LLC | Equity Method Investment Summarized Financial Information
Summarized statements of operations
Net sales	50,411	42,567
Cost of goods sold	40,591	34,658
Gross profit	9,820	7,909
Engineering, selling and administrative expenses	6,603	6,681
Income from operations	3,217	1,228
Other expense, net	(149)	860
Income before provision for income taxes and non-controlling interest	3,068	2,088
Provision for Income Taxes	592	628
Net income	2,476	1,460
Equity earnings of joint ventures	$ 825	$ 487

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Equity Earnings of Joint Ventures- Summarize of Related Party Transaction (Details) - VAST LLC - Equity Method Investee - USD ($) $ in Thousands	3 Months Ended
	Sep. 27, 2020	Sep. 29, 2019
Schedule Of Equity Method Investments [Line Items]
Sales	$ 1,216	$ 891
Purchases from VAST LLC	187	97
Expenses Charged to VAST LLC	507	831
Expenses Charged from VAST LLC	$ 292	$ 226

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Leases (Details Textual) - USD ($)	3 Months Ended
	Sep. 27, 2020	Sep. 29, 2019
Leases [Abstract]
Operating lease, existence of option to extend	true
Operating lease, renewal Term	5 years
Operating lease, expiration term	2023-10
Operating lease expense	$ 116,000	$ 113,000

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Leases - Schedule of Operating Lease Asset and Obligation Included in Condensed Consolidated Balance Sheet (Details) $ in Thousands	Sep. 27, 2020 USD ($)
Right-of Use Asset Under Operating Lease:
Operating lease right-of-use asset	$ 3,668
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	us-gaap:OtherAssetsNoncurrent
Lease Obligation Under Operating Lease:
Current Liabilities: Accrued Liabilities: Other	$ 354
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	us-gaap:OtherAccruedLiabilitiesCurrent
Other Long-Term Liabilities	$ 3,314
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	us-gaap:OtherLiabilitiesNoncurrent
Operating Lease, Liability	$ 3,668

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Leases - Schedule of Future Minimum Lease Payments Under Non-Cancelable Lease Including Options to Extend (Details) $ in Thousands	Sep. 27, 2020 USD ($)
Leases [Abstract]
2021 (for the remaining nine months)	$ 357
2022	484
2023	497
2024	509
2025	522
Thereafter	1,834
Total Future Minimum Lease Payments	4,203
Less: Imputed Interest	(535)
Total Lease Obligations	$ 3,668

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Leases - Schedule of Cash Flow Information Related to Operating Lease (Details) $ in Thousands	3 Months Ended
	Sep. 27, 2020 USD ($)
Operating Cash Flows:
Cash Paid Related to Operating Lease Obligation	$ 116

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Leases - Schedule of Weighted Average Lease Term and Discount Rate for Operating Lease (Details)	Sep. 27, 2020
Leases [Abstract]
Weighted Average Remaining Lease Term (in years)	8 years 1 month 6 days
Weighted Average Discount Rate	3.30%

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Credit Facilities (Details Textual)	3 Months Ended
	Sep. 27, 2020 USD ($)
STRATTEC Credit Facility
Line Of Credit Facility [Line Items]
Secured revolving credit facility	$ 40,000,000
Credit facility maturity date	Aug. 01, 2022
Interest rate on borrowings under the credit facility	the London Interbank Offering Rate (“LIBOR”) plus 1.0 percent or the bank’s prime rate.
Interest rate - percentage points added to LIBOR - on borrowings under credit facility	1.00%
ADAC-STRATTEC Credit Facility
Line Of Credit Facility [Line Items]
Secured revolving credit facility	$ 25,000,000
Credit facility maturity date	Aug. 01, 2022
Interest rate on borrowings under the credit facility	LIBOR plus 1.25 percent or the bank’s prime rate.
Interest rate - percentage points added to LIBOR - on borrowings under credit facility	1.25%

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Credit Facilities - Schedule of Outstanding Borrowings Under the Credit Facilities (Details) - USD ($) $ in Thousands	Sep. 27, 2020	Jun. 28, 2020
Line Of Credit Facility [Line Items]
Outstanding Borrowing	$ 30,000	$ 35,000
STRATTEC Credit Facility
Line Of Credit Facility [Line Items]
Outstanding Borrowing	13,000	18,000
ADAC-STRATTEC Credit Facility
Line Of Credit Facility [Line Items]
Outstanding Borrowing	$ 17,000	$ 17,000

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Credit Facilities - Schedule of Average Outstanding Borrowings and the Weighted Average Interest Rate (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 27, 2020	Sep. 29, 2019
STRATTEC Credit Facility
Line Of Credit Facility [Line Items]
Average Outstanding Borrowings	$ 17,231	$ 16,033
Weighted Average Interest Rate	1.20%	3.30%
ADAC-STRATTEC Credit Facility
Line Of Credit Facility [Line Items]
Average Outstanding Borrowings	$ 17,000	$ 23,473
Weighted Average Interest Rate	1.40%	3.50%

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Commitments and Contingencies (Details Textual) - USD ($)	3 Months Ended
	Sep. 27, 2020	Jun. 28, 2020
Commitments And Contingencies Disclosure [Abstract]
Environmental reserve originally established in 1995	$ 3,000,000
Environmental	1,257,000	$ 1,259,000
Cost incurred inception to date on installation and on-going monitoring of wells	$ 618,000

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Shareholders' Equity - Summary of Activity Impacting Shareholders' Equity (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 27, 2020	Sep. 29, 2019
Summary of activity impacting shareholders' equity
Beginning Balance	$ 175,441	$ 187,816
Net Income	10,073	2,680
Dividend Declared		(522)
Dividend Declared – Non- controlling Interests of Subsidiaries	(490)	(980)
Translation Adjustments	1,699	(1,448)
Stock Based Compensation	208	413
Pension and Postretirement Adjustment, Net of Tax	70	73
Stock Option Exercises		222
Employee Stock Purchases	19	17
Ending Balance	187,020	188,271
Common Stock
Summary of activity impacting shareholders' equity
Beginning Balance	74	73
Stock Option Exercises		1
Ending Balance	74	74
Capital in Excess of Par Value
Summary of activity impacting shareholders' equity
Beginning Balance	97,977	96,491
Stock Based Compensation	208	413
Stock Option Exercises		221
Employee Stock Purchases	3	3
Ending Balance	98,188	97,128
Retained Earnings
Summary of activity impacting shareholders' equity
Beginning Balance	211,940	221,117
Net Income	8,008	1,244
Dividend Declared		(522)
Ending Balance	219,948	221,839
Accumulated Other Comprehensive Loss
Summary of activity impacting shareholders' equity
Beginning Balance	(22,113)	(18,568)
Translation Adjustments	1,378	(1,196)
Pension and Postretirement Adjustment, Net of Tax	70	73
Ending Balance	(20,665)	(19,691)
Treasury Stock
Summary of activity impacting shareholders' equity
Beginning Balance	(135,656)	(135,725)
Employee Stock Purchases	16	14
Ending Balance	(135,640)	(135,711)
Non-Controlling Interest
Summary of activity impacting shareholders' equity
Beginning Balance	23,219	24,428
Net Income	2,065	1,436
Dividend Declared – Non- controlling Interests of Subsidiaries	(490)	(980)
Translation Adjustments	321	(252)
Ending Balance	$ 25,115	$ 24,632

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Revenue from Contracts with Customers - Contract Liability Balances (Details) - Other Accrued Liabilities $ in Thousands	3 Months Ended
	Sep. 27, 2020 USD ($)
Contract With Customer Liability [Line Items]
Balance, June 28, 2020	$ 373
Discounts Recorded as a Reduction in Sales	118
Payments of Discounts to Customers	(129)
Other	40
Balance, September 27, 2020	$ 402

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Revenue from Contracts with Customers - Revenue by Product Group (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 27, 2020	Sep. 29, 2019
Product Information [Line Items]
Revenue	$ 126,234	$ 119,962
Door Handles & Exterior Trim
Product Information [Line Items]
Revenue	34,091	31,391
Keys & Locksets
Product Information [Line Items]
Revenue	32,736	32,469
Power Access
Product Information [Line Items]
Revenue	20,620	19,458
Latches
Product Information [Line Items]
Revenue	13,835	13,897
Aftermarket & OE Service
Product Information [Line Items]
Revenue	13,137	10,913
Driver Controls
Product Information [Line Items]
Revenue	9,787	9,785
Other
Product Information [Line Items]
Revenue	$ 2,028	$ 2,049

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Revenue from Contracts with Customers - Revenue by Customer or Customer Group (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 27, 2020	Sep. 29, 2019
Entity Wide Revenue Major Customer [Line Items]
Revenue	$ 126,234	$ 119,962
General Motors Company
Entity Wide Revenue Major Customer [Line Items]
Revenue	37,756	33,838
Fiat Chrysler Automobiles
Entity Wide Revenue Major Customer [Line Items]
Revenue	25,083	25,482
Ford Motor Company
Entity Wide Revenue Major Customer [Line Items]
Revenue	15,846	15,812
Commercial and Other OEM Customers
Entity Wide Revenue Major Customer [Line Items]
Revenue	21,434	21,346
Tier 1 Customers
Entity Wide Revenue Major Customer [Line Items]
Revenue	17,495	17,747
Hyundai / Kia
Entity Wide Revenue Major Customer [Line Items]
Revenue	$ 8,620	$ 5,737

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Other Expense, Net - Summary of Other Expense, Net (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 27, 2020	Sep. 29, 2019
Other Income and Expenses [Abstract]
Foreign Currency Transaction Loss	$ (399)	$ (85)
Unrealized Gain on Peso Forward Contracts	335
Realized Loss on Peso Forward Contracts	(59)
Pension and Postretirement Plans Cost	(105)	(117)
Rabbi Trust Loss	(57)	(2)
Other	25	107
Other Expense, net	$ (260)	$ (97)

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Income Taxes (Details Textual) - USD ($)	3 Months Ended
	Sep. 27, 2020	Sep. 29, 2019
Income Tax Disclosure [Abstract]
Effective income tax rate	13.50%	10.00%
Income tax benefit from global intangible low-taxed income	$ 675,000

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Earnings Per Share - Reconciliation of the Components of Basic and Diluted Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 27, 2020	Sep. 29, 2019
Reconciliation of the components of the basic and diluted per share
Net Income, Basic Earnings Per Share	$ 8,008	$ 1,244
Net Income, Diluted Earnings Per Share	$ 8,008	$ 1,244
Basic Earnings Per Share, Number of Shares	3,765	3,710
Stock Option and Restricted Stock Awards, Number of shares	23	18
Diluted Earnings Per Share, Number of Shares	3,788	3,728
Basic Earnings Per Share	$ 2.13	$ 0.34
Diluted Earnings Per Share	$ 2.11	$ 0.33

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Earnings Per Share (Details Textual) - shares	3 Months Ended
	Sep. 27, 2020	Sep. 29, 2019
Stock Options
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from earnings per share computation	90,860	90,860

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Stock-Based Compensation (Details Textual) - USD ($) $ in Millions		3 Months Ended
	Oct. 06, 2020	Sep. 27, 2020	Sep. 29, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Options, granted		0	0
Employee Stock Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Options expires after date of grant		10 years
Employee Stock Option | Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period after the date of grant		1 year
Employee Stock Option | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period after the date of grant		4 years
Restricted stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation cost related to unvested restricted stock grants		$ 1.4
Weighted average period over which unrecognized compensation is expected to be recognized		1 year 1 month 6 days
Restricted stock | Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period after the date of grant		1 year
Restricted stock | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period after the date of grant		5 years
Omnibus Stock Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share based compensation arrangement by share based payment award number of shares authorized		1,850,000
Shares of common stock available for grant		76,434
Omnibus Stock Incentive Plan | Subsequent Event
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Additional shares of common stock available for grant	150,000

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Stock-Based Compensation - Summary of Stock Option Activity Under Our Stock Incentive Plan (Details)	3 Months Ended
	Sep. 27, 2020 $ / shares shares
Share Based Compensation [Abstract]
Shares, Beginning Balance | shares	90,860
Shares, Ending Balance | shares	90,860
Shares, Exercisable | shares	90,860
Weighted Average Exercise Price, Beginning Balance | $ / shares	$ 35.88
Weighted Average Exercise Price, Ending Balance | $ / shares	35.88
Weighted Average Exercise Price, Exercisable | $ / shares	$ 35.88
Weighted Average Remaining Contractual Term, Outstanding	2 years 2 months 12 days
Weighted Average Remaining Contractual Term, Exercisable, Outstanding	2 years 2 months 12 days

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Stock-Based Compensation - Intrinsic Value of Stock Options Exercised and the Fair Value of Stock Options Vested (Details) $ in Thousands	3 Months Ended
	Sep. 29, 2019 USD ($)
Intrinsic value of stock options exercised and the fair value of stock options vested
Intrinsic Value of Options Exercised	$ 37

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Stock-Based Compensation - Summary of Restricted Stock Activity Under Our Stock Incentive Plan (Details) - Restricted stock	3 Months Ended
	Sep. 27, 2020 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Nonvested, Shares Beginning Balance | shares	69,394
Granted, Shares | shares	39,900
Vested, Shares | shares	(34,669)
Nonvested, Shares Ending Balance | shares	74,625
Nonvested, Weighted Average Grant Date Fair Value Beginning Balance | $ / shares	$ 30.59
Granted, Weighted Average Grant Date Fair Value | $ / shares	21.20
Vested, Weighted Average Grant Date Fair Value | $ / shares	34.95
Nonvested, Weighted Average Grant Date Fair Value Ending Balance | $ / shares	$ 23.54

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Pension and Postretirement Benefits (Details Textual) - USD ($)	3 Months Ended		12 Months Ended
	Sep. 27, 2020	Sep. 29, 2019	Jun. 28, 2020	Jun. 30, 2019
Defined Benefit Plan Disclosure [Line Items]
Date the Board of Directors freeze benefit accruals and future eligibility under the Qualified Pension Plan	Dec. 31, 2009
Termination of Qualified Pension Plan, description	The Board of Directors subsequently approved to proceed with the termination of the Qualified Pension Plan. During the quarter ended December 30, 2018, we completed a substantial portion of terminating the Qualified Pension Plan. In connection with the termination of the Qualified Pension Plan, distributions from the Qualified Pension Plan trust were made during the three month period ended December 30, 2018 to participants who elected lump-sum distributions. Additionally, during the three months ended December 30, 2018, we entered into an agreement with an insurance company to purchase from us, through a series of annuity contracts, our remaining obligations under the Qualified Pension Plan and, as a result, we settled the remaining obligations under the plan for the remaining participants utilizing funds available in the Qualified Pension Plan trust.
Additional cash contributions to settle pension obligations	$ 0
Non-cash pre-tax settlement charge				$ 31,900,000
Non-cash compensation expense		$ 2,228,000	$ 4,800,000	$ 4,200,000
Rabbi Trust Assets - SERP	2,900,000		$ 2,900,000
Postretirement plan annual benefit limit for future eligible retirees	$ 4,000
Other postretirement benefits maximum benefit period	5 years
Supplemental Employee Retirement Plan, Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Percentage of participant's base salary received as Supplemental Retirement Benefits	8.00%
Vesting period, SERP	5 years

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Pension and Postretirement Benefits - Summary of Net Periodic Benefit Cost Recognized (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Sep. 27, 2020	Sep. 29, 2019	Jun. 30, 2019
COMPONENTS OF NET PERIODIC BENEFIT COST:
Plan Settlements			$ 31,900
SERP Benefits
COMPONENTS OF NET PERIODIC BENEFIT COST:
Service Cost	$ 16	$ 19
Interest Cost	10	15
Amortization of Unrecognized Net Loss	3	4
Net Periodic Benefit Cost	29	38
Postretirement Benefits
COMPONENTS OF NET PERIODIC BENEFIT COST:
Service Cost	3	3
Interest Cost	4	6
Amortization of Prior Service Credit	(2)	(7)
Amortization of Unrecognized Net Loss	89	99
Net Periodic Benefit Cost	$ 94	$ 101

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Accumulated Other Comprehensive Loss - Summary of Changes in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 27, 2020	Sep. 29, 2019
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	$ (175,441)	$ (187,816)
Other Comprehensive (Income) Loss Before Reclassifications	(1,699)	1,448
Net Other Comprehensive (Income) Loss Before Reclassifications	(1,699)	1,448
Reclassifications:
Prior service credits	2	7
Unrecognized Net Loss	(92)	(103)
Total Reclassifications Before Tax	(90)	(96)
Reclassifications, Income Tax	20	23
Net Reclassifications	(70)	(73)
Other Comprehensive Income	(1,769)	1,375
Ending balance	(187,020)	(188,271)
Foreign Currency Translation Adjustments
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	20,136	16,317
Other Comprehensive (Income) Loss Before Reclassifications	(1,699)	1,448
Net Other Comprehensive (Income) Loss Before Reclassifications	(1,699)	1,448
Reclassifications:
Other Comprehensive Income	(1,699)	1,448
Other Comprehensive Income Attributable to Non- Controlling Interest	(321)	252
Ending balance	18,758	17,513
Retirement and Postretirement Benefit Plans
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	1,977	2,251
Reclassifications:
Prior service credits	2	7
Unrecognized Net Loss	(92)	(103)
Total Reclassifications Before Tax	(90)	(96)
Reclassifications, Income Tax	20	23
Net Reclassifications	(70)	(73)
Other Comprehensive Income	(70)	(73)
Ending balance	1,907	2,178
Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	22,113	18,568
Reclassifications:
Ending balance	20,665	19,691
AOCI Including Portion Attributable to Noncontrolling Interest
Reclassifications:
Other Comprehensive Income	(1,769)	1,375
AOCI Attributable to Noncontrolling Interest
Reclassifications:
Other Comprehensive Income Attributable to Non- Controlling Interest	$ (321)	$ 252