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 March 27, 2022 

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: 3,961,104 shares outstanding as of March 28, 2022 (which number includes all restricted shares previously awarded that have not vested as of such date).

STRATTEC SECURITY CORPORATION

FORM 10-Q

March 27, 2022

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)	6-19
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20-29
Item 3	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4	Controls and Procedures	30
Part II - OTHER INFORMATION
Item 1	Legal Proceedings	31
Item 1A	Risk Factors	31
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3	Defaults Upon Senior Securities	31
Item 4	Mine Safety Disclosures	31
Item 5	Other Information	31
Item 6	Exhibits	32

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,” “could,” “expect,” “intend,” “may,” “planned,” “potential,” “should,” “will,” and “would,” 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, customer cost reimbursement actions, and warranty claims, adverse business and operational issues resulting from semiconductor chip supply shortages and the Coronavirus (COVID-19) pandemic, including matters adversely impacting the timing, availability and cost of material component parts and raw materials for the production of our products and the products of our customers, or the continuation or worsening thereof, and other matters described in the section titled “Risk Factors” in the Company’s Form 10-K report filed on September 2, 2021 with the Securities and Exchange Commission for the year ended June 27, 2021.

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						Nine Months Ended
	March 27, 2022			March 28, 2021			March 27, 2022			March 28, 2021
Net sales	$	115,943		$	121,644		$	329,192		$	375,238
Cost of goods sold		101,305			102,990			287,072			311,832
Gross profit		14,638			18,654			42,120			63,406
Engineering, selling and administrative expenses		11,261			11,927			34,683			33,543
Income from operations		3,377			6,727			7,437			29,863
Equity earnings (loss) of joint ventures		577			(56	)		941			1,844
Interest expense		(54	)		(63	)		(159	)		(259	)
Other income (expense), net		285			455			320			(1,171	)
Income before provision for       income taxes and non-controlling interest		4,185			7,063			8,539			30,277
Provision for income taxes		50			1,153			342			4,721
Net income		4,135			5,910			8,197			25,556
Net income attributable to non-controlling       Interest		989			1,425			1,556			5,950
Net income attributable to STRATTEC       SECURITY CORPORATION	$	3,146		$	4,485		$	6,641		$	19,606
Comprehensive income:
Net income	$	4,135		$	5,910		$	8,197		$	25,556
Pension and postretirement plans, net of tax		79			69			238			208
Currency translation adjustments		685			(697	)		(571	)		5,419
Other comprehensive income (loss), net of tax		764			(628	)		(333	)		5,627
Comprehensive income		4,899			5,282			7,864			31,183
Comprehensive income attributable to        non-controlling interest		1,362			1,016			1,426			7,175
Comprehensive income attributable to       STRATTEC SECURITY CORPORATION	$	3,537		$	4,266		$	6,438		$	24,008
Earnings per share attributable to       STRATTEC SECURITY CORPORATION:
Basic	$	0.81		$	1.18		$	1.72		$	5.18
Diluted	$	0.80		$	1.15		$	1.70		$	5.11
Average shares outstanding:
Basic		3,871			3,797			3,856			3,783
Diluted		3,916			3,886			3,906			3,839
Cash dividends declared per share	$	—		$	—		$	—		$	—

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

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STRATTEC SECURITY CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In Thousands, Except Share Amounts)

(Unaudited)

	March 27, 2022			June 27, 2021
ASSETS
Current Assets:
Cash and cash equivalents	$	16,459		$	14,465
Receivables, net		76,526			69,902
Inventories:
Finished products		16,772			20,633
Work in process		17,650			14,707
Purchased materials		45,288			40,900
Excess and obsolete reserve		(6,400	)		(5,380	)
Inventories, net		73,310			70,860
Other current assets		23,422			19,677
Total current assets		189,717			174,904
Investment in joint ventures		28,405			27,224
Deferred Income Taxes		4,978			5,052
Other long-term assets		6,641			6,982
Property, plant and equipment		274,414			270,429
Less: accumulated depreciation		(182,991	)		(174,028	)
Net property, plant and equipment		91,423			96,401
	$	321,164		$	310,563
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	43,513		$	36,727
Accrued Liabilities:
Payroll and benefits		16,797			22,483
Environmental		1,390			1,390
Warranty		8,119			8,425
Other		10,173			8,547
Total current liabilities		79,992			77,572
Borrowings under credit facilities		12,000			12,000
Accrued pension obligations		2,409			2,334
Accrued postretirement obligations		528			599
Other long-term liabilities		4,381			4,625
Shareholders’ Equity:
Common stock, authorized 18,000,000 shares, $.01 par value, 7,481,169    issued shares at March 27, 2022 and 7,411,717 issued shares at    June 27, 2021		75			74
Capital in excess of par value		101,244			99,512
Retained earnings		241,113			234,472
Accumulated other comprehensive loss		(17,000	)		(16,797	)
Less: treasury stock, at cost (3,605,165 shares at March 27, 2022 and    3,606,652 shares at June 27, 2021)		(135,591	)		(135,615	)
Total STRATTEC SECURITY CORPORATION shareholders’ equity		189,841			181,646
Non-controlling interest		32,013			31,787
Total shareholders’ equity		221,854			213,433
	$	321,164		$	310,563

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

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STRATTEC SECURITY CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)

	Nine Months Ended
	March 27, 2022			March 28, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	8,197		$	25,556
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		14,724			14,730
Foreign currency transaction loss		76			1,926
Loss on disposal of property, plant and equipment		153			1,421
Unrealized gain on peso forward contracts		(500	)		(512	)
Stock based compensation expense		873			775
Equity earnings of joint ventures		(941	)		(1,844	)
Change in operating assets and liabilities:
Receivables		(6,637	)		(39,176	)
Inventories		(2,450	)		(3,930	)
Other assets		(4,370	)		(1,119	)
Accounts payable and accrued liabilities		2,297			27,213
Other, net		361			356
Net cash provided by operating activities		11,783			25,396
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in VAST LLC		(75	)		(100	)
Purchase of property, plant and equipment		(9,407	)		(6,401	)
Proceeds received on sale of property, plant and equipment		—			8
Net cash used in investing activities		(9,482	)		(6,493	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under credit facilities		11,000			—
Repayment of borrowings under credit facilities		(11,000	)		(19,000	)
Dividends paid to non-controlling interests of subsidiaries		(1,200	)		(490	)
Exercise of stock options and employee stock purchases		884			585
Net cash used in financing activities		(316	)		(18,905	)
Foreign currency impact on cash		9			(437	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		1,994			(439	)
CASH AND CASH EQUIVALENTS
Beginning of period		14,465			11,774
End of period	$	16,459		$	11,335
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid (recovered) during the period for:
Income taxes	$	(1,378	)	$	3,701
Interest	$	158		$	276
Non-cash investing activities:
Change in capital expenditures in accounts payable	$	824		$	(873	)

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, along with our VAST LLC partners, 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 March 27, 2022 and June 27, 2021, which have 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 2021 Form 10-K, which was filed with the Securities and Exchange Commission on September 2, 2021.

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 in certain cases, advising or requiring individuals to limit or forego their time outside of their homes or from participating in large group gatherings. Accordingly, the COVID-19 outbreak has severely restricted the level of economic activity in many countries, and continues to adversely impact global economic activity, including with respect to customer purchasing actions and supply chain continuity and disruption, and in particular the supply of semiconductor chips, transponders and related components to the automotive industry.

STRATTEC’s operating performance is subject to global economic conditions, inflationary pressures 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 year ended June 27, 2021. Nonetheless, during the fourth quarter of our fiscal 2021, our net sales were negatively impacted by a global semiconductor chip shortage (especially as it relates to the automotive industry), which shortage continued into our current fiscal 2022 nine month period ended March 27, 2022 resulting in a decrease in our net sales for both the current year quarter and year to date period as compared to the same periods in our prior fiscal year. Additionally, inflationary pressures resulted in increased raw material and purchased part costs as well as increased wage rates in Mexico beginning in calendar

6

2021. Such increases negatively impacted our operating results in both the current year quarter and year to date period as compared to the same periods in our prior fiscal year.

The extent of the impact of the COVID-19 outbreak and continued inflationary pressures on our future operating results will depend on the duration, intensity and continued spread of the COVID-19 outbreak, regulatory and private sector responses, which may be precautionary and may include potential restrictive operating measures imposed by governmental authorities, the impact to our customers, workforce and suppliers, in particular related to the sourcing of semiconductor chips, transponders and other critical supply chain components needed by us and our customers to meet expected production schedules, and continued inflation impacting wages and the prices of raw materials and purchased parts, all of which are uncertain and cannot be predicted as to timing and cost impacts. These changing conditions may also affect the estimates and assumptions made by our 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 within 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. The adoption of this pronouncement did not 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 from time to time 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 Income (Expense), net.

The following table quantifies the outstanding Mexican peso forward contracts as of March 27, 2022 (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	April 19, 2022 - June 14, 2022	$	5,250		20.80	$	168
Buy MXP/Sell USD	July 19, 2022 – June 13, 2023	$	9,000		22.42	$	575

7

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):

	March 27, 2022		June 27, 2021
Not Designated as Hedging Instruments:
Other Current Assets:
Mexican Peso Forward Contracts	$	743	$	243

The pre-tax effects of the Mexican peso forward contracts are included in Other Income (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					Nine Months Ended
	March 27, 2022			March 28, 2021		March 27, 2022			March 28, 2021
Not Designated as Hedging Instruments:
Realized Gain	$	83		$	11	$	267		$	87
Realized (Loss)	$	(18	)	$	—	$	(67	)	$	—
Unrealized Gain	$	724		$	32	$	500		$	512

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 March 27, 2022 and June 27, 2021. 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 March 27, 2022 (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	$	169	$	—	$	—
Mid Cap		345		—		—
Large Cap		492		—		—
International		515		—		—
Fixed Income Funds		1,040		—		—
Cash and Cash Equivalents		—		962		—
Mexican Peso Forward Contracts		—		743		—
Total Assets at Fair Value	$	2,561	$	1,705	$	—

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.

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.  

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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. As a result of these relationships, the entities involved purchase products from each other on an as needed basis to use as components in end products assembled and sold in their respective home markets. STRATTEC currently purchases such component parts from WITTE. These purchases totaled $200,000 and $615,000 during the three and nine month periods ended March 27, 2022, respectively, and $286,000 and $606,000 during the three and nine month periods ended March 28, 2021.

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 foreign subsidiaries and joint venture resulted in equity earnings of joint ventures to STRATTEC of $941,000 during the nine month period ended March 27, 2022 and $1.8 million during the nine month period ended March 28, 2021. During the nine months ended March 27, 2022, capital contributions totaling $225,000 were made to VAST LLC for purposes of funding operations in Brazil. STRATTEC’s portion of the capital contributions totaled $75,000. During the nine months ended March 28, 2021, capital contributions totaling $300,000 were made to VAST LLC for purposes of funding operations in Brazil. STRATTEC’s portion of the capital contributions totaled $100,000.

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 sales and increased net income to STRATTEC of approximately $81.2 million and $98,000, respectively, during the nine month period ended March 27, 2022 and increased net sales and increased net income to STRATTEC of approximately $98.7 million and $3.4 million, respectively, during the nine month period ended March 28, 2021. ADAC charges ADAC STRATTEC LLC an engineering, research and design fee as well as a sales fee. Such fees are calculated as a percentage of net sales, are included in the consolidated results of STRATTEC, and totaled $2.1 million and $5.7 million in the three and nine month periods ended March 27, 2022 and $2.1 million and $6.9 million in the three and nine month periods ended March 28, 2021. Additionally, ADAC-STRATTEC LLC sells production parts to ADAC. Sales to ADAC are included in the consolidated results of STRATTEC and totaled $2.9 million and $6.0 million in the three and nine month periods ended March 27, 2022 and $2.7 million and $9.1 million in the three and nine month periods ended March 28, 2021.

STRATTEC POWER ACCESS LLC (“SPA”) was originally formed in fiscal year 2009 to supply the North American portion of the power sliding door, lift gate, tail gate and deck lid system access control products some of which were acquired from Delphi Corporation in 2009. 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 sales and increased net income to STRATTEC of approximately $68.3 million and $3.8 million, respectively, during the nine month period ended March 27, 2022 and $72.0 million and $4.7 million, respectively, during the nine month period ended March 28, 2021.

Equity Earnings (Loss) 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 venture 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.

9

During the quarter ended March 27, 2022, VAST China experienced a fire at their Taicang plant. As a result, certain door handle and painting operations were subsequently transferred to their new Jingzhou facility and another supplier. The transfer of production negatively impacted VAST China’s profitability for the quarter ended March 27, 2022.

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

	Three Months Ended						Nine Months Ended
	March 27, 2022			March 28, 2021			March 27, 2022			March 28, 2021
Net Sales	$	55,281		$	51,748		$	153,454		$	160,511
Cost of Goods Sold		46,418			44,155			127,022			131,345
Gross Profit		8,863			7,593			26,432			29,166
Engineering, Selling and Administrative Expenses		7,575			7,684			24,075			22,936
Income (Loss) From Operations		1,288			(91	)		2,357			6,230
Other Income, net		692			327			1,085			1,363
Income before Provision for Income Taxes		1,980			236			3,442			7,593
Provision for Income Taxes		239			348			614			2,011
Net Income (Loss)	$	1,741		$	(112	)	$	2,828		$	5,582
STRATTEC's Share of VAST LLC Net Income (Loss)		581			(37	)		943			1,861
Intercompany Profit Elimination		(4	)		(19	)		(2	)		(17	)
STRATTEC’s Equity Earnings (Loss) of VAST LLC	$	577		$	(56	)	$	941		$	1,844

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				Nine Months Ended
	March 27, 2022		March 28, 2021		March 27, 2022		March 28, 2021
Sales to VAST LLC	$	316	$	1,059	$	1,533	$	3,273
Purchases from VAST LLC	$	6	$	139	$	157	$	340
Expenses Charged to VAST LLC	$	134	$	265	$	512	$	1,361
Expenses Charged from VAST LLC	$	151	$	302	$	593	$	953

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 Sheets are presented below (in thousands):

	March 27, 2022
Right-of Use Asset Under Operating Lease:
Other Long-Term Assets	$	3,118
Lease Obligation Under Operating Lease:
Current Liabilities: Accrued Liabilities: Other	$	389
Other Long-Term Liabilities		2,729
	$	3,118

10

Future minimum lease payments, by our fiscal year, including options to extend that are reasonably certain to be exercised, under this non-cancelable lease are as follows as of March 27, 2022 (in thousands):

2022 (for the remaining three months)	$	122
2023		497
2024		509
2025		522
2026		535
Thereafter		1,299
Total Future Minimum Lease Payments		3,484
Less: Imputed Interest		(366	)
Total Lease Obligations	$	3,118

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

	Nine Months Ended
	March 27, 2022		March 28, 2021
Operating Cash Flows:
Cash Paid Related to Operating Lease Obligation	$	362	$	354

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

	March 27, 2022
Weighted Average Remaining Lease Term (in years)		6.6
Weighted Average Discount Rate		3.3	%

Operating lease expense for the three and nine month periods ended March 27, 2022 totaled $122,000 and $362,000, respectively. Operating lease expense for the three and nine month periods ended March 28, 2021 totaled $119,000 and $354,000, respectively.

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, 2024. 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 through May 31, 2021 was 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 through May 31, 2021 was at varying rates based, at our option, on LIBOR plus 1.25 percent or the bank’s prime rate. Effective June 1, 2021, interest on borrowings under both credit facilities were 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 March 27, 2022, we were in compliance with all financial covenants required by these credit facilities.

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

	March 27, 2022		June 27, 2021
STRATTEC Credit Facility	$	—	$	—
ADAC-STRATTEC Credit Facility		12,000		12,000
	$	12,000	$	12,000

11

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

	Nine Months Ended
	Average Outstanding Borrowings				Weighted Average Interest Rate
	March 27, 2022		March 28, 2021		March 27, 2022			March 28, 2021
STRATTEC Credit Facility	$	421	$	11,436		1.9	%		1.2	%
ADAC-STRATTEC Credit Facility	$	14,784	$	15,000		1.4	%		1.4	%

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 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 years 2010, 2016, and 2021, we obtained updated third party estimates of projected costs to adequately cover the cost for active remediation of this contamination and adjusted the reserve as needed. 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 environmental reserve of $1.4 million at March 27, 2022 is adequate.

Shareholders’ Equity

A summary of activity impacting shareholders’ equity for the three and nine month periods ended March 27, 2022 and March 28, 2021 were as follows (in thousands):

	Three Months Ended March 27, 2022
	Total Shareholders’ Equity			Common Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss			Treasury Stock			Non-Controlling Interest
Balance, December 26, 2021	$	217,071		$	75	$	100,768	$	237,967	$	(17,391	)	$	(135,599	)	$	31,251
Net Income		4,135			—		—		3,146		—			—			989
Dividend Declared – Non-    controlling Interests of    Subsidiaries		(600	)		—		—		—		—			—			(600	)
Translation Adjustments		685			—		—		—		312			—			373
Stock Based Compensation		239			—		239		—		—			—			—
Pension and Postretirement    Adjustment, Net of    Tax		79			—		—		—		79			—			—
Stock Option Exercises		227			—		227		—		—			—			—
Employee Stock Purchases		18			—		10		—		—			8			—
Balance, March 27, 2022	$	221,854		$	75	$	101,244	$	241,113	$	(17,000	)	$	(135,591	)	$	32,013

12

	Three Months Ended March 28, 2021
	Total Shareholders’ Equity			Common Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss			Treasury Stock			Non-Controlling Interest
Balance, December 27, 2020	$	201,473		$	74	$	98,571	$	227,061	$	(17,492	)	$	(135,629	)	$	28,888
Net Income		5,910			—		—		4,485		—			—			1,425
Translation Adjustments		(697	)		—		—		—		(288	)		—			(409	)
Stock Based Compensation		193			—		193		—		—			—			—
Pension and Postretirement     Adjustment, Net of     Tax		69			—		—		—		69			—			—
Stock Option Exercises		526			—		526		—		—			—			—
Employee Stock Purchases		20			—		13		—		—			7			—
Balance, March 28, 2021	$	207,494		$	74	$	99,303	$	231,546	$	(17,711	)	$	(135,622	)	$	29,904

	Nine Months Ended March 27, 2022
	Total Shareholders’ Equity			Common Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss			Treasury Stock			Non-Controlling Interest
Balance, June 27, 2021	$	213,433		$	74	$	99,512	$	234,472	$	(16,797	)	$	(135,615	)	$	31,787
Net Income		8,197			—		—		6,641		—			—			1,556
Dividend Declared – Non-    controlling Interests of    Subsidiaries		(1,200	)		—		—		—		—			—			(1,200	)
Translation Adjustments		(571	)		—		—		—		(441	)		—			(130	)
Stock Based Compensation		873			—		873		—		—			—			—
Pension and Postretirement    Adjustment, Net of    Tax		238			—		—		—		238			—			—
Stock Option Exercises		827			1		826		—		—			—			—
Employee Stock Purchases		57			—		33		—		—			24			—
Balance, March 27, 2022	$	221,854		$	75	$	101,244	$	241,113	$	(17,000	)	$	(135,591	)	$	32,013

	Nine Months Ended March 28, 2021
	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		25,556			—		—		19,606		—			—			5,950
Dividend Declared – Non-    controlling Interests of    Subsidiaries		(490	)		—		—		—		—			—			(490	)
Translation Adjustments		5,419			—		—		—		4,194			—			1,225
Stock Based Compensation		775			—		775		—		—			—			—
Pension and Postretirement    Adjustment, Net of    Tax		208			—		—		—		208			—			—
Stock Option Exercises		526			—		526		—		—			—			—
Employee Stock Purchases		59			—		25		—		—			34			—
Balance, March 28, 2021	$	207,494		$	74	$	99,303	$	231,546	$	(17,711	)	$	(135,622	)	$	29,904

13

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 or contract liabilities as of March 27, 2022 or June 27, 2021.

Revenue by Product Group and Customer:  

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

	Three Months Ended				Nine Months Ended
	March 27, 2022		March 28, 2021		March 27, 2022		March 28, 2021
Door Handles & Exterior Trim	$	29,313	$	29,790	$	81,211	$	98,694
Keys & Locksets		28,230		28,616		77,725		91,488
Power Access		23,675		26,209		68,344		72,039
Latches		12,760		13,125		34,782		41,303
Aftermarket & OE Service		11,421		10,969		34,731		34,077
Driver Controls		8,525		10,822		25,317		31,144
Other		2,019		2,113		7,082		6,493
	$	115,943	$	121,644	$	329,192	$	375,238

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

	Three Months Ended				Nine Months Ended
	March 27, 2022		March 28, 2021		March 27, 2022		March 28, 2021
General Motors Company	$	34,738	$	34,543	$	91,551	$	111,322
Stellantis (Formerly Fiat Chrysler     Automobiles)		23,047		21,685		62,657		69,919
Ford Motor Company		19,162		21,722		57,927		54,356
Commercial and Other OEM     Customers		16,518		17,241		50,120		58,272
Tier 1 Customers		15,279		17,289		42,861		53,444
Hyundai / Kia		7,199		9,164		24,076		27,925
	$	115,943	$	121,644	$	329,192	$	375,238

Other Income (Expense), net

Net other income (expense) included in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income primarily included foreign currency transaction gains and losses, realized and unrealized gains or 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 (“SERP”) 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 March 27, 2022 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.

14

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

	Three Months Ended						Nine Months Ended
	March 27, 2022			March 28, 2021			March 27, 2022			March 28, 2021
Foreign Currency Transaction (Loss) Gain	$	(319	)	$	386		$	(76	)	$	(1,926	)
Unrealized Gain on Peso Forward    Contracts		724			32			500			512
Realized Gain on Peso Forward    Contracts, net		65			11			200			87
Pension and Postretirement Plans Cost		(120	)		(106	)		(360	)		(314	)
Rabbi Trust (Loss) Gain		(130	)		154			(60	)		472
Other		65			(22	)		116			(2	)
	$	285		$	455		$	320		$	(1,171	)

Income Taxes

Our effective tax rate was 1.2% and 16.3% for the three months ended March 27, 2022 and March 28, 2021, respectively. Our effective tax rate was 4.0% and 15.6% for the nine month periods ended March 27, 2022 and March 28, 2021, respectively. The reduction in our effective tax rate in the current three and nine months periods as compared to the respective prior year periods is due to adjustments we made to the amounts of our fiscal 2021 estimated foreign tax credits and estimated tax impacts associated with our investment in VAST LLC. These true-up adjustments resulted from the filing of our US income tax returns during the quarter ended March 27, 2022 and were attributable to actual results included in non-US income tax returns, which are filed on a calendar year basis, and which differ from estimates included in our fiscal 2021 tax provision. The adjustment amounts recorded during the three and nine month periods ended March 27, 2022 totaled $740,000 and $1.0 million, respectively. Our effective tax rate for the three and nine month periods ended March 27, 2022 excluding these adjustments were 18.9% and 15.7%, 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 our fiscal 2020. With the enactment of these final regulations, we became eligible for an exclusion from GILTI since we met the provisions for the GILTI High-Tax exception included in the final regulations. In addition, the enactment of these new regulations and our eligibility for the GILTI High-Tax exception was retroactive to the original enactment of the GILTI tax provision, which included our 2020 fiscal year. As a result, we recorded an income tax benefit of $675,000 during the nine month period ended March 28, 2021. 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.

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
	March 27, 2022						March 28, 2021
	Net Income		Shares		Per-Share Amount		Net Income		Shares		Per-Share Amount
Basic Earnings Per Share	$	3,146		3,871	$	0.81	$	4,485		3,797	$	1.18
Stock Option and Restricted    Stock Awards		—		45				—		89
Diluted Earnings Per Share	$	3,146		3,916	$	0.80	$	4,485		3,886	$	1.15

15

	Nine Months Ended
	March 27, 2022						March 28, 2021
	Net Income		Shares		Per-Share Amount		Net Income		Shares		Per-Share Amount
Basic Earnings Per Share	$	6,641		3,856	$	1.72	$	19,606		3,783	$	5.18
Stock Option and Restricted    Stock Awards		—		50				—		56
Diluted Earnings Per Share	$	6,641		3,906	$	1.70	$	19,606		3,839	$	5.11

The calculation of earnings per share excluded 9,010 share-based payment awards as of both March 27, 2022 and March 28, 2021 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 March 27, 2022, the Board of Directors had designated 2 million shares of common stock available for the grant of awards under the plan. Remaining shares available to be granted under the plan as of March 27, 2022 were 177,959. 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.

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 nine months ended March 27, 2022 follows:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in thousands)
Outstanding, June 27, 2021		72,624	$	37.65
Exercised		31,452	$	26.28
Outstanding, March 27, 2022		41,172	$	46.34		1.5	$	49
Exercisable, March 27, 2022		41,172	$	46.34		1.5	$	49

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

	Three Months Ended				Nine Months Ended
	March 27, 2022		March 28, 2021		March 27, 2022		March 28, 2021
Intrinsic Value of Options Exercised	$	120	$	555	$	451	$	555
Fair Value of Stock Options Vesting	$	—	$	—	$	—	$	—

No options were granted during the nine month periods ended March 27, 2022 or March 28, 2021.    

16

A summary of restricted stock activity under our stock incentive plan for the nine months ended March 27, 2022 follows:

	Shares			Weighted Average Grant Date Fair Value
Nonvested Balance, June 27, 2021		81,975		$	23.31
Granted		43,875		$	42.50
Vested		(38,000	)	$	25.56
Forfeited		(2,750	)	$	32.70
Nonvested Balance, March 27, 2022		85,100		$	31.89

As of March 27, 2022, all compensation cost related to outstanding stock options granted under our omnibus stock incentive plan has been recognized. As of March 27, 2022, there was approximately $1.6 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 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 $3.5 million at March 27, 2022 and $3.6 million at June 27, 2021 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 Income (Expense), net in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income.

The following tables summarize 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
	March 27, 2022		March 28, 2021		March 27, 2022		March 28, 2021
Service Cost	$	15	$	16	$	3	$	3
Interest Cost		15		10		4		4
Amortization of Prior Service Credit		—		—		—		(2	)
Amortization of Unrecognized Net Loss		20		3	82			91
Net Periodic Benefit Cost	$	50	$	29	$	89	$	96

17

	SERP Benefits				Postretirement Benefits
	Nine Months Ended				Nine Months Ended
	March 27, 2022		March 28, 2021		March 27, 2022		March 28, 2021
Service Cost	$	46	$	47	$	9	$	10
Interest Cost		40		31		10		12
Amortization of Prior Service Credit		—		—		—		(6	)
Amortization of Unrecognized Net Loss	63			8	247			269
Net Periodic Benefit Cost	$	149	$	86	$	266	$	285

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 March 27, 2022
	Foreign Currency Translation Adjustments			Retirement and Postretirement Benefit Plans			Total
Balance, December 26, 2021	$	15,438		$	1,953		$	17,391
Other Comprehensive Income Before Reclassifications		(1,291	)		—			(1,291	)
Income Tax		606			—			606
Net Other Comprehensive Income Before       Reclassifications		(685	)		—			(685	)
Reclassifications:
Unrecognized Net Loss (A)		—			(102	)		(102	)
Total Reclassifications Before Tax		—			(102	)		(102	)
Income Tax		—			23			23
Net Reclassifications		—			(79	)		(79	)
Other Comprehensive Income		(685	)		(79	)		(764	)
Other Comprehensive Income Attributable to Non-    Controlling Interest		(373	)		—			(373	)
Balance, March 27, 2022	$	15,126		$	1,874		$	17,000

	Three Months Ended March 28, 2021
	Foreign Currency Translation Adjustments		Retirement and Postretirement Benefit Plans			Total
Balance, December 27, 2020	$	15,654	$	1,838		$	17,492
Other Comprehensive Loss Before Reclassifications		697		—			697
Net Other Comprehensive Loss Before       Reclassifications		697		—			697
Reclassifications:
Prior Service Credits (A)		—		2			2
Unrecognized Net Loss (A)		—		(94	)		(94	)
Total Reclassifications Before Tax		—		(92	)		(92	)
Income Tax		—		23			23
Net Reclassifications		—		(69	)		(69	)
Other Comprehensive Loss		697		(69	)		628
Other Comprehensive Loss Attributable to Non-    Controlling Interest		409		—			409
Balance, March 28, 2021	$	15,942	$	1,769		$	17,711

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	Nine Months Ended March 27, 2022
	Foreign Currency Translation Adjustments			Retirement and Postretirement Benefit Plans			Total
Balance, June 27, 2021	$	14,685		$	2,112		$	16,797
Other Comprehensive Income Before Reclassifications		(35	)		—			(35	)
Income Tax		606			—			606
Net Other Comprehensive Income Before       Reclassifications		571			—			571
Reclassifications:
Unrecognized Net Loss (A)		—			(310	)		(310	)
Total Reclassifications Before Tax		—			(310	)		(310	)
Income Tax		—			72			72
Net Reclassifications		—			(238	)		(238	)
Other Comprehensive Loss		571			(238	)		333
Other Comprehensive Loss Attributable to Non-    Controlling Interest		130			—			130
Balance, March 27, 2022	$	15,126		$	1,874		$	17,000

	Nine Months Ended March 28, 2021
	Foreign Currency Translation Adjustments			Retirement and Postretirement Benefit Plans			Total
Balance, June 28, 2020	$	20,136		$	1,977		$	22,113
Other Comprehensive Loss Before Reclassifications		(5,419	)		—			(5,419	)
Net Other Comprehensive Loss Before       Reclassifications		(5,419	)		—			(5,419	)
Reclassifications:
Prior Service Credits (A)		—			6			6
Unrecognized Net Loss (A)		—			(277	)		(277	)
Total Reclassifications Before Tax		—			(271	)		(271	)
Income Tax		—			63			63
Net Reclassifications		—			(208	)		(208	)
Other Comprehensive Income		(5,419	)		(208	)		(5,627	)
Other Comprehensive Income Attributable to Non-    Controlling Interest		(1,225	)		—			(1,225	)
Balance, March 28, 2021	$	15,942		$	1,769		$	17,711

(A) Amounts reclassified are included in the computation of net periodic benefit cost, which is included in Other Income (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 2021 Form 10-K, which was filed with the Securities and Exchange Commission on September 2, 2021. 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 fiscal year 2020, 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 nine month period ended March 28, 2021, the Company experienced a strong sales recovery as our customers ramped up vehicle production as they restarted their assembly plant operations following the temporary plant shutdowns from COVID in order to replenish low inventory levels at the dealers. However, during the fourth quarter of fiscal year 2021, we were impacted by supply chain shortages of critical electronic component parts, primarily semiconductor chips, and certain raw materials which impacted the production schedules for our customers and, therefore, our production levels. These part shortages along with logistical constraints at the port of entry continued into our fiscal 2022 first, second and third quarters and as of the date of filing of this report, despite strong demand for vehicles, continue to impact customer production schedules and our ability to meet customer sales demand and ultimately continue to cause fluctuations in our and our customers’ production order levels.

Additionally, during the nine months ended March 27, 2022, certain of our customers temporarily closed several of their assembly plants or reduced their production schedules in North America due to these continuing global supply chain shortages of critical electronic component parts, including semiconductor chips, which could continue to disrupt customer production levels, higher supply chain costs and our sales volumes for several more quarters.

The sales outlook over the next few quarters may be strong as we expect our customers to seek to restock dealer inventories based on their consumers’ demand, which are in short supply. However, this expected strong sales demand going forward continues to be adversely impacted by the supply chain part shortages referenced above and by ongoing fluctuations in the severity of the COVID-19 pandemic, including any potential worsening thereof, on the North American and overall global economy and its continuing impact on the supply chain shortages of critical electronic component parts seen across the world.

Analysis of Results of Operations

Three months ended March 27, 2022 compared to the three months ended March 28, 2021

	Three Months Ended
	March 27, 2022		March 28, 2021
Net Sales (in millions)	$	115.9	$	121.6

20

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
	March 27, 2022		March 28, 2021
General Motors Company	$	34.7	$	34.5
Stellantis (Formerly Fiat Chrysler Automobiles)		23.0		21.7
Ford Motor Company		19.2		21.7
Commercial and Other OEM Customers		16.5		17.2
Tier 1 Customers		15.3		17.3
Hyundai / Kia		7.2		9.2
	$	115.9	$	121.6

Current year quarter sales continued to be adversely impacted by the global semiconductor chip shortage that temporarily closed several of our customers’ assembly plants, caused production schedule reductions for all of our customers and generally reduced our net sales to all customer groups (other than General Motors Company and Stellantis as noted below) in the current year quarter as compared to the prior year quarter. The following items further impacted sales to the noted customer groups between quarters:

- Sales to General Motors Company in the current year quarter increased in comparison to the prior year quarter due to higher door handle product sales. The favorable impact of the door handle sales more than offset the volume reduction in the current year quarter resulting from the global semiconductor chip shortage.

- Sales to Stellantis in the current year quarter increased in comparison to the prior year quarter due to higher production volumes on Chrysler Pacifica power sliding doors and for several lockset product platforms. The favorable impact of this higher product content more than offset the volume reduction in the current year quarter resulting from the global semiconductor chip shortage.

- Ford Motor Company sales were negatively impacted in the current year quarter by lower production volumes on the F-150 pickup trucks.

- Commercial and Other OEM Customers, along with Tier 1 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. Sales to Commercial and Other OEM Customers were negatively impacted in the current year quarter by a reduction in sales related to door handle products sold to Volkswagen. Sales to Tier 1 Customers in the current year quarter were negatively impacted in the current year quarter by lower volumes on our driver control steering column lock products.

- Hyundai / Kia sales were negatively impacted in the current year quarter due to lower levels of production on their Kia Carnival, formerly the Kia Sedona and Hyundai Starex minivans, for which we supply primarily power sliding door components.

	Three Months Ended
	March 27, 2022					March 28, 2021
	Millions of Dollars		Percent of Cost of Goods Sold			Millions of Dollars		Percent of Cost of Goods Sold
Direct Material Costs	$	67.6		66.7	%	$	66.5		64.6	%
Labor and Overhead Costs		33.7		33.3	%		36.5		35.4	%
Total Cost of Goods Sold	$	101.3				$	103.0

The direct material cost increase between quarters was due to higher costs for raw material and purchased components in the current year quarter as compared to the prior year quarter. The impact of these higher costs was partially offset by reduced sales volumes between quarters, as discussed above. Overall, the raw material and purchased component cost increases caused an increase in material costs between quarters while our sales decreased between quarters, as discussed above. Our labor and overhead cost decrease between quarters, as discussed below, outpaced our reduced sales dollars between quarters. This resulted in an increase in our direct material costs as a percentage of cost of goods sold between quarters and a decrease in our labor and overhead costs as a percentage of cost of goods sold between quarters.

Labor and overhead costs decreased $2.8 million between quarters. Due to lower levels of production at our facilities in the current year quarter as compared to the prior year quarter, we experienced less favorable absorption of our fixed overhead costs in the current year quarter as compared to the prior year quarter. This impact was more than offset by a reduction in the variable portion of our labor and overhead costs resulting from the production volume reduction between quarters and production efficiencies at our Milwaukee and Mexico facilities, which reduced labor and overhead costs in the current year quarter as compared to the prior year quarter. Labor and overhead costs were further impacted by the following:

Cost Increase:

21

- Mexico wages and benefits increased $1.4 million in the current year quarter as compared to the prior year quarter as a result of a January 1, 2022 government mandated minimum wage increase.

Cost Decrease:

- Expense provisions under our incentive bonus plan impacting cost of goods sold decreased $1.2 million between periods.

	Three Months Ended
	March 27, 2022			March 28, 2021
Gross Profit (in millions)	$	14.6		$	18.7
Gross Profit as a percentage of net sales		12.6	%		15.3	%

Gross profit dollars decreased in the current year quarter as compared to the prior year quarter as a result of the reduction in sales between periods, which was partially offset by a decrease in cost of goods sold between periods, as discussed above. Gross profit as a percentage of net sales decreased between periods. The decrease was the result of the reduced sales, higher costs for direct materials and purchased parts, increases in Mexico wages resulting from a January 1, 2022 government mandated minimum wage increase and less favorable absorption of our fixed overhead costs, which unfavorable impacts were partially offset by a reduction in the variable portion of our labor and overhead costs, a reduction in provisions for incentive bonuses and production efficiencies at our Milwaukee and Mexico facilities, which reduced labor and overhead costs, all as discussed above.

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

	Three Months Ended
	March 27, 2022			March 28, 2021
Expenses (in millions)	$	11.3		$	11.9
Expenses as a percentage of net sales		9.7	%		9.8	%

Engineering, selling and administrative expenses in the current year quarter decreased in comparison to the prior year quarter due to the prior year quarter including approximately $690,000 in expense provisions for the accrual of bonuses under our incentive bonus plan. No provisions for the accrual of bonuses were made during the current year quarter.

Income from operations was $3.4 million in the current year quarter compared to $6.7 million in the prior year quarter due to a decrease in gross profit margin dollars, which was partially offset by a decrease in engineering, selling and administrative expenses between quarters, all as discussed above.

The equity earnings of joint ventures was $577,000 in the current year quarter compared to equity loss of joint ventures of $56,000 in the prior year quarter. Improved profitability from our VAST LLC joint venture resulted from increased net sales and increased profitability in VAST China’s operations between quarters. VAST China’s profitability in the prior year quarter was negatively impacted by supply chain issues and extended OEM customer plant shutdowns associated with the COVID-19 pandemic in the prior year quarter. Additionally, during the current quarter, VAST China experienced a fire at their Taicang plant. As a result, certain door handle and painting operations were subsequently transferred to their new Jingzhou facility and another supplier. The transfer of production negatively impacted VAST China’s profitability for the quarter ended March 27, 2022. We currently believe a presence in the China market is a key component of our global strategy. We anticipate that it will contribute to our overall long-term market and financial strength as the China market continues to expand and as it seeks to rebound from the ongoing impacts of the COVID-19 pandemic and resulting supply chain shortages of critical electronic component parts. Due to our limited amount of business in both India and Brazil as well as the impact of COVID-19 and the global semiconductor chip shortage described above, our VAST LLC joint venture in India continues to have break-even operating results and our VAST LLC joint venture in Brazil continues to report losses.

22

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

	Three Months Ended
	March 27, 2022			March 28, 2021
Foreign Currency Transaction (Loss) Gain	$	(319	)	$	386
Unrealized Gain on Peso Forward Contracts		724			32
Realized Gain on Peso Forward Contracts, net		65			11
Pension and Postretirement Plans Cost		(120	)		(106	)
Rabbi Trust (Loss) Gain		(130	)		154
Other		65			(22	)
	$	285		$	455

Set forth below is a discussion of the items comprising certain of the components of our Other Income (Expense), net:

- Foreign currency transaction gains and losses resulted from activity associated with foreign denominated assets held by our Mexican subsidiaries.

- The Rabbi Trust assets fund our amended and restated supplemental executive retirement plan. The investments held in the Trust are considered trading securities.

- We entered into the Mexican peso currency forward contracts during fiscal 2022 and 2021 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 March 27, 2022 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 costs include the components of net periodic benefit cost other than the service cost component.

Our effective tax rate was 1.2% and 16.3% for the three months ended March 27, 2022 and March 28, 2021, respectively. The reduction in our effective tax rate in the current quarter as compared to the prior year quarter is due to adjustments we made to the amounts of our fiscal 2021 estimated foreign tax credits and estimated tax impacts associated with our investment in VAST LLC. These true-up adjustments resulted from the filing of our US income tax returns during the quarter ended March 27, 2022 and were attributable to actual results included in non-US income tax returns, which are filed on a calendar year basis, and which differ from estimates included in our fiscal 2021 tax provision. The adjustment amounts recorded during the three month period ended March 27, 2022 totaled $740,000. Our effective tax rate for the three month period ended March 27, 2022 excluding these adjustments was 18.9%. Additionally, 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 our fiscal 2020. With the enactment of these final regulations, we became eligible for an exclusion from GILTI since we met the provisions for the GILTI High-Tax exception included in the final regulations. In addition, the enactment of these new regulations and our eligibility for the GILTI High-Tax exception was retroactive to the original enactment of the GILTI tax provision, which included our 2020 fiscal year. As a result, our effective tax rate differs from the statutory tax rate due to the application of 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.

Nine months ended March 27, 2022 compared to the nine months ended March 28, 2021

	Nine Months Ended
	March 27, 2022		March 28, 2021
Net Sales (in millions)	$	329.2	$	375.2

23

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

	Nine Months Ended
	March 27, 2022		March 28, 2021
General Motors Company	$	91.6	$	111.3
Stellantis (Formerly Fiat Chrysler Automobiles)		62.7		69.9
Ford Motor Company		57.9		54.4
Commercial and Other OEM Customers		50.1		58.3
Tier 1 Customers		42.9		53.4
Hyundai / Kia		24.0		27.9
	$	329.2	$	375.2

Current year to date period sales continued to be adversely impacted by the global semiconductor chip shortage that temporarily closed several of our customers’ assembly plants, caused production schedule reductions for all of our customers and reduced our net sales to all customer groups (other than Ford Motor Company as noted below) in the current year period as compared to the prior year period. The following items further impacted sales to the noted customer groups between periods:

- Sales to Ford Motor Company were positively impacted in the current year period due to higher product content, and in particular for the new power tailgate program on the F-150 pickup trucks. The favorable impact of this higher product content more than offset the volume reduction in the current year period resulting from the global semiconductor chip shortage.

- Commercial and Other OEM Customers, along with Tier 1 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. Sales to Commercial and Other OEM Customers were negatively impacted in the current year period by a reduction in sales related to door handle products sold to Volkswagen. Sales to Tier 1 Customers in the current year period were negatively impacted by lower volumes on our driver control steering column lock products.

- Hyundai / Kia sales were negatively impacted in the current year period due to lower levels of production on their Kia Carnival, formerly the Kia Sedona and Hyundai Starex minivans, for which we supply primarily power sliding door components.

	Nine Months Ended
	March 27, 2022					March 28, 2021
	Millions of Dollars		Percent of Cost of Goods Sold			Millions of Dollars		Percent of Cost of Goods Sold
Direct Material Costs	$	188.0		65.5	%	$	208.4		66.8	%
Labor and Overhead Costs		99.1		34.5	%		103.4		33.2	%
Total Cost of Goods Sold	$	287.1				$	311.8

The direct material cost decrease between year to date periods was due to reduced sales volumes between periods, as discussed above, which more than offset an increase in direct material costs in the current year period as compared to the prior year period resulting from higher raw material and purchased component costs. In the current year period as compared to the prior year period, our direct material costs decreased as a percent of cost of goods sold while our labor and overhead costs increased as a percent of cost of goods sold. This shift was due to our material costs varying with the sales volume reduction between periods while our labor and overhead cost reduction, as discussed below, did not keep pace with the sales reduction between periods.

Labor and overhead costs decreased between year to date periods. The variable portion of our labor and overhead costs decreased due to lower levels of production at our facilities in the current year period as compared to the prior year period and production efficiencies at our Milwaukee and Mexico facilities, which reduced labor and overhead costs in the current year period as compared to the prior year period. This impact was partially offset by less favorable absorption of our fixed overhead costs in the current year period as compared to the prior year period resulting from the production volume reduction.  Labor and overhead costs were further impacted by the following:

Cost Increases:

- Mexico wages and benefits increased $3.6 million in the current year period as compared to the prior year period as a result of January 1, 2021 and January 1, 2022 government mandated minimum wage increases.

- The U.S. dollar value of our Mexican operations was negatively impacted by approximately $1.7 million in the current year period as compared to the prior year period due to an unfavorable Mexican peso to U.S. dollar exchange rate between these periods. The average U.S. dollar / Mexican peso exchange rate decreased to approximately 20.44 pesos to the dollar in the current year period from approximately 21.17 pesos to the dollar in the prior year period.

24

- Current year period costs included lump sum bonuses totaling $100,000 paid to our Milwaukee represented hourly workers upon the ratification of a new four-year labor contract, which contract is effective through November 1, 2025.

Cost Decreases:

- Expense provisions under our incentive bonus plan impacting cost of goods sold decreased $3.1 million between periods.

- The prior year period included a loss on disposal of fixed assets of $1.4 million comparted to a current year quarter loss of $153,000.

	Nine Months Ended
	March 27, 2022			March 28, 2021
Gross Profit (in millions)	$	42.1		$	63.4
Gross Profit as a percentage of net sales		12.8	%		16.9	%

Gross profit dollars decreased in the current year period as compared to the prior year period as a result of the reduction in sales between periods, which was partially offset by a decrease in cost of goods sold between periods, as discussed above. Gross profit as a percentage of net sales decreased between periods. The decrease was the result of reduced sales levels, higher costs for direct materials and purchased parts, an unfavorable Mexican peso to U.S. dollar exchange rate affecting our operations in Mexico, increases in Mexico wages resulting from January 1, 2021 and January 1, 2022 government mandated minimum wage increases, and less favorable absorption of our fixed overhead costs, which unfavorable impacts were partially offset during the current year period by a reduction in the variable portion of our labor and overhead costs, a reduction in provisions for incentive bonuses, a prior year loss on disposal of fixed assets and production efficiencies at our Milwaukee and Mexico facilities, which reduced labor and overhead costs, all as discussed above.

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

	Nine Months Ended
	March 27, 2022			March 28, 2021
Expenses (in millions)	$	34.7		$	33.5
Expenses as a percentage of net sales		10.5	%		8.9	%

Engineering, selling and administrative expenses in the current year period increased in comparison to the prior year period due to reduced costs during the prior year period. The prior year period included customer reimbursement of engineering development costs previously incurred in prior periods of $1.5 million, which reimbursement was agreed to with the customer during the prior year period. The prior year period also included temporary wage reductions for our salaried workforce, which we implemented to address the impacts of the COVID-19 pandemic on our operations. The impact of these prior year period cost reductions was partially offset by a reduction in the provision for bonus accruals between the current year period and the prior year period. The prior year period included approximately $2.2 million in expense provisions for the accrual of bonuses under our incentive bonus plan. No provisions for the accrual of bonuses were made during the current year period.

Income from operations was $7.4 million in the current year period compared to $29.9 million in the prior year period due to a decrease in gross profit margin dollars and an increase in engineering, selling and administrative expenses between periods, all as discussed above.

The equity earnings of joint ventures was $941,000 in the current year period compared to $1.8 million in the prior year period. Lower profitability from our VAST LLC joint venture resulted from reduced net sales and reduced profitability in our VAST China operation between periods. The reduced profitability in our VAST China operation stemmed from the current global semiconductor chip shortage described above. VAST China’s profitability in the current year period was also partially offset with continued startup losses related to their new plant in Jingzhou, China. Additionally, during the current quarter, VAST China experienced a fire at their Taicang plant. As a result, certain door handle and painting operations were subsequently transferred to their new Jingzhou facility and another supplier. The transfer of production negatively impacted VAST China’s profitability for the quarter ended March 27, 2022. We currently believe a presence in the China market is a key component of our global strategy. We anticipate that it will contribute to our overall long-term market and financial strength as the China market continues to expand and as it seeks to rebound from the ongoing impacts of the COVID-19 pandemic and resulting supply chain shortages of critical electronic component parts. Due to our limited amount of business in both India and Brazil as well as the impact of COVID-19 and the global semiconductor chip shortage described above, our VAST LLC joint venture in India continues to have break-even operating results and our VAST LLC joint venture in Brazil continues to report losses.

25

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

	Nine Months Ended
	March 27, 2022			March 28, 2021
Foreign Currency Transaction Loss	$	(76	)	$	(1,926	)
Unrealized Gain on Peso Forward Contracts		500			512
Realized Gain on Peso Forward Contracts, net		200			87
Pension and Postretirement Plans Cost		(360	)		(314	)
Rabbi Trust (Loss) Gain		(60	)		472
Other		116			(2	)
	$	320		$	(1,171	)

Set forth below is a discussion of the items comprising certain of the components of our Other Income (Expense), net:

- Foreign currency transaction gains and losses resulted from activity associated with foreign denominated assets held by our Mexican subsidiaries.

- The Rabbi Trust assets fund our amended and restated supplemental executive retirement plan. The investments held in the Trust are considered trading securities.

- We entered into the Mexican peso currency forward contracts during fiscal 2022 and 2021 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 March 27, 2022 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 costs include the components of net periodic benefit cost other than the service cost component.

Our effective tax rate was 4.0% and 15.6% for the nine months ended March 27, 2022 and March 28, 2021, respectively. The reduction in our effective tax rate in the current nine month period as compared to the prior year period is due to adjustments we made to the amount of our fiscal 2021 estimated foreign tax credits and estimated tax impacts associated with our investment in VAST LLC. These true-up adjustments resulted from the filing of our US income tax returns during the quarter ended March 27, 2022 and were attributable to actual results included in non-US income tax returns, which are filed on a calendar year basis, and which differ from estimates included in our fiscal 2021 tax provision. The adjustment amounts recorded during the nine month period ended March 27, 2022 totaled $1.0 million. Our effective tax rate for the nine month period ended March 27, 2022 excluding these adjustments was 15.7%. Additionally, 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 our fiscal 2020. With the enactment of these final regulations, we became eligible for an exclusion from GILTI since we met the provisions for the GILTI High-Tax exception included in the final regulations. In addition, the enactment of these new regulations and our eligibility for the GILTI High-Tax exception was retroactive to the original enactment of the GILTI tax provision, which included our 2020 fiscal year. As a result, we recorded an income tax benefit of $675,000 during the prior year period. Our effective tax rate differs from the statutory tax rate due to application of 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)

	March 27, 2022		June 27, 2021
Current Assets	$	189.7	$	174.9
Current Liabilities		80.0		77.6
Working Capital	$	109.7	$	97.3

26

Outstanding Receivable Balances from Major Customers

Our primary source of cash flow is from our major customers, which include General Motors Company, Stellantis 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 March 27, 2022 was as follows (in millions):

General Motors Company	$	23.2
Stellantis (Formerly Fiat Chrysler Automobiles)	$	15.2
Ford Motor Company	$	11.2

Cash Balances in Mexico

We earn a portion of our operating income in Mexico. As of March 27, 2022, $2.3 million of our $16.5 million cash and cash equivalents balance was held in Mexico. These funds are available for repatriation as deemed necessary.

Cash Flow Analysis (in millions) 

	Nine Months Ended
	March 27, 2022			March 28, 2021
Cash Flows from (in millions):
Operating Activities	$	11.8		$	25.4
Investing Activities	$	(9.5	)	$	(6.5	)
Financing Activities	$	(0.3	)	$	(18.9	)

The decrease in cash provided by operating activities between periods was due to a reduction in net income between periods. Additionally, our net working capital requirements decreased $5.8 million between periods and were comprised of the following items (in millions):

	Increase (Decrease) in Working Capital Requirements
	Nine Months Ended
	March 27, 2022			March 28, 2021			Change
Accounts Receivable	$	6.6		$	39.2		$	(32.6	)
Inventory	$	2.5		$	3.9		$	(1.4	)
Other Assets	$	4.4		$	1.1		$	3.3
Accounts Payable and Accrued Liabilities	$	(2.3	)	$	(27.2	)	$	24.9

Set forth below is a summary of the items impacting the change in our working capital requirements between year to date periods:

- The increase in accounts receivable balances during the current year to date period is the result of an increase in sales during the last two months of the quarter ended March 27, 2022 as compared to the last two months of the quarter ended June 27, 2021. The increase in accounts receivable balances during the prior year to date 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.

- Changes in inventory balances remained relatively consistent between year to date periods.

- The change in other assets in both the current year to date period and the prior year to date period is the result of the change in customer tooling balances. Customer tooling balance changes result from the timing of tooling development spending required to meet customer production requirements and the timing of related customer billings for tooling cost reimbursement.

- The change in accounts payable and accrued liability balances was the result of an increase in account payable balances during the current year to date period, which was mostly offset by the payment of fiscal 2021 accrued bonuses, and an increase in accounts payable balances during the prior year to date period. June 2021 bonus accruals at June 2021 paid in August 2021 totaled $6.6 million. The current year period increase in accounts payable balances reflected increased purchases as of the end of our March 2022 quarter in conjunction with the management of our inventory balances. The prior year period increase in accounts payable balances resulted from accounts payable balances being significantly reduced as of June 2020 due to the impact of COVID-19 and lower production levels stemming from that impact. Accounts payable balances increased during our fiscal 2021 first quarter as our business ramped-up to support increased OEM production schedules as customer plants reopened. Accounts payable balances for each period also reflected the timing of purchases and payments with our vendors based on normal, established payment terms.

27

Net cash used in investing activities included capital expenditures made in support of requirements for new product programs and the upgrade and replacement of existing equipment of $9.4 million during the current year to date period and $6.4 million during the prior year to date period. Net cash used in investing activities also included an investment in our VAST LLC joint venture of $75,000 in the current year to date period and $100,000 in the prior year to date period. The investments were made for the purpose of funding general expenses for Sistema de Acesso Veicular Ltda, our Brazilian joint venture.

Net cash used in financing activities during the current year to date period of $316,000 included borrowings under our credit facilities of $11.0 million and $884,000 received for the exercise of stock options under our stock incentive plan and purchases under our employee stock purchase plan, partially offset by $11.0 million of repayments of borrowings under our credit facilities and $1.2 million of dividend payments to non-controlling interests in our subsidiaries. Net cash used in financing activities of $18.9 million during the prior year to date period included repayments of borrowings under credit facilities of $19.0 million and $490,000 of dividend payments to non-controlling interests in our subsidiaries, partially offset by $585,000 received for purchases under our employee stock purchase plan.

VAST LLC Cash Requirements

We currently anticipate that VAST China has adequate debt facilities in place over the remainder of the 2022 fiscal year to cover the future operating and capital requirements of its business. During the nine months ended March 27, 2022, capital contributions totaling $225,000 were made to VAST LLC for purposes of funding operations in Brazil. STRATTEC’s portion of the capital contribution totaled $75,000. During the nine months ended March 28, 2021, capital contributions totaling $300,000 were made to VAST LLC for purposes of funding operations in Brazil. STRATTEC’s portion of the capital contribution totaled $100,000. Due to economic conditions in Brazil, we anticipate Sistema de Acesso Veicular Ltda may require an additional capital contribution of approximately $225,000 collectively by all VAST LLC partners to fund operations during our fiscal year 2022. STRATTEC’s portion of these capital contributions is anticipated to be $75,000. During the nine months ended March 27, 2022 and March 28, 2021, VAST LLC made no capital contributions to Minda-VAST Access Systems. We currently anticipate no required future capital contributions to Minda-VAST Access Systems.

Future Capital Expenditures

We anticipate capital expenditures will be approximately $12 million to $13 million in total in fiscal 2022, of which $9.4 million has been made through March 27, 2022, 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 March 27, 2022. A total of 3,655,322 shares have been repurchased over the life of the program through March 27, 2022, at a cost of approximately $136.4 million. No shares were repurchased during the nine month periods ended March 27, 2022 or March 28, 2021. 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 2022.

28

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, 2024. 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 through May 31, 2021 was 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 through May 31, 2021 was at varying rates based, at our option, on LIBOR plus 1.25 percent or the bank’s prime rate. Effective June 1, 2021 interest on borrowings under both credit facilities were at varying rates based, at our option, on the 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 March 27, 2022, we were in compliance with all financial covenants required by these credit facilities. There were no outstanding borrowings under the STRATTEC Credit Facility at March 27, 2022 and at June 27, 2021. The average outstanding borrowings and weighted average interest rate on the STRATTEC Credit Facility loans were approximately $421,000 and 1.9 percent, respectively, during the nine months ended March 27, 2022. Outstanding borrowings under the ADAC-STRATTEC Credit Facility totaled $12 million at both March 27, 2022 and June 27, 2021. The average outstanding borrowings and weighted average interest rate on the ADAC-STRATTEC Credit Facility loans were approximately $14.8 million and 1.4 percent, respectively, during the nine months ended March 27, 2022.

Inflation and Other Changes in Prices

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 zinc, steel, brass, nickel silver, and aluminum as well as inflation and wage increases 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 own and operate manufacturing operations in Mexico.  As a result, a portion of our manufacturing costs are incurred in Mexican pesos. 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 elsewhere 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 (Loss) of Joint Ventures included elsewhere in Notes to Condensed Consolidated Financial Statements within this Form 10-Q.

29

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.

30

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 2, 2021.

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 March 27, 2022, a total of 3,655,322 shares have been repurchased at a cost of approximately $136.4 million. No shares were repurchased during the nine month period ended March 27, 2022.

Item 3 Defaults Upon Senior Securities—None

Item 4 Mine Safety Disclosures—None

Item 5 Other Information—None

31

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	Amendment to Amended and Restated Articles of Incorporation of the Company (Incorporated by reference from Exhibit 3.1 to the Form 8-K report filed on October 21, 2021.)
3.4	Amended By-laws of the Company (Incorporated by reference from Exhibit 99.3 to the Form 8-K filed on October 7, 2005.)
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 March 27, 2022 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 March 27, 2022, 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.

32

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: May 5, 2022	By:	/s/ Patrick J. Hansen
		Patrick J. Hansen
		Senior Vice President,
		Chief Financial Officer,
		Treasurer and Secretary
		(Principal Accounting and Financial Officer)

33

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:  May 5, 2022

/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:  May 5, 2022

/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 March 27, 2022 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:  May 5, 2022 /s/ Frank J. Krejci

Frank J. Krejci,

Chief Executive Officer

Dated: May 5, 2022 /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	9 Months Ended
	Mar. 27, 2022	Mar. 28, 2022
Cover [Abstract]
Entity Registrant Name	STRATTEC SECURITY CORP
Entity Central Index Key	0000933034
Document Type	10-Q
Document Period End Date	Mar. 27, 2022
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--07-03
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		3,961,104
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 and Comprehensive (Loss) Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 27, 2022	Mar. 28, 2021	Mar. 27, 2022	Mar. 28, 2021
Income Statement [Abstract]
Net sales	$ 115,943	$ 121,644	$ 329,192	$ 375,238
Cost of goods sold	101,305	102,990	287,072	311,832
Gross profit	14,638	18,654	42,120	63,406
Engineering, selling and administrative expenses	11,261	11,927	34,683	33,543
Income from operations	3,377	6,727	7,437	29,863
Equity earnings (loss) of joint ventures	577	(56)	941	1,844
Interest expense	(54)	(63)	(159)	(259)
Other income (expense), net	285	455	320	(1,171)
Income before provision for income taxes and non-controlling interest	4,185	7,063	8,539	30,277
Provision for income taxes	50	1,153	342	4,721
Net income	4,135	5,910	8,197	25,556
Net income attributable to non-controlling Interest	989	1,425	1,556	5,950
Net income attributable to STRATTEC SECURITY CORPORATION	3,146	4,485	6,641	19,606
Comprehensive income:
Net income	4,135	5,910	8,197	25,556
Pension and postretirement plans, net of tax	79	69	238	208
Currency translation adjustments	685	(697)	(571)	5,419
Other comprehensive income (loss), net of tax	764	(628)	(333)	5,627
Comprehensive income	4,899	5,282	7,864	31,183
Comprehensive income attributable to non-controlling interest	1,362	1,016	1,426	7,175
Comprehensive income attributable to STRATTEC SECURITY CORPORATION	$ 3,537	$ 4,266	$ 6,438	$ 24,008
Earnings per share attributable to STRATTEC SECURITY CORPORATION:
Basic	$ 0.81	$ 1.18	$ 1.72	$ 5.18
Diluted	$ 0.80	$ 1.15	$ 1.70	$ 5.11
Average shares outstanding:
Basic	3,871	3,797	3,856	3,783
Diluted	3,916	3,886	3,906	3,839

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 27, 2022	Jun. 27, 2021
Current Assets:
Cash and cash equivalents	$ 16,459	$ 14,465
Receivables, net	76,526	69,902
Inventories:
Finished products	16,772	20,633
Work in process	17,650	14,707
Purchased materials	45,288	40,900
Excess and obsolete reserve	(6,400)	(5,380)
Inventories, net	73,310	70,860
Other current assets	23,422	19,677
Total current assets	189,717	174,904
Investment in joint ventures	28,405	27,224
Deferred Income Taxes	4,978	5,052
Other long-term assets	6,641	6,982
Property, plant and equipment	274,414	270,429
Less: accumulated depreciation	(182,991)	(174,028)
Net property, plant and equipment	91,423	96,401
Total assets	321,164	310,563
Current Liabilities:
Accounts payable	43,513	36,727
Accrued Liabilities:
Payroll and benefits	16,797	22,483
Environmental	1,390	1,390
Warranty	8,119	8,425
Other	10,173	8,547
Total current liabilities	79,992	77,572
Borrowings under credit facilities	12,000	12,000
Accrued pension obligations	2,409	2,334
Accrued postretirement obligations	528	599
Other long-term liabilities	4,381	4,625
Shareholders’ Equity:
Common stock, authorized 18,000,000 shares, $.01 par value, 7,481,169 issued shares at March 27, 2022 and 7,411,717 issued shares at June 27, 2021	75	74
Capital in excess of par value	101,244	99,512
Retained earnings	241,113	234,472
Accumulated other comprehensive loss	(17,000)	(16,797)
Less: treasury stock, at cost (3,605,165 shares at March 27, 2022 and 3,606,652 shares at June 27, 2021)	(135,591)	(135,615)
Total STRATTEC SECURITY CORPORATION shareholders’ equity	189,841	181,646
Non-controlling interest	32,013	31,787
Total shareholders’ equity	221,854	213,433
Total liabilities and shareholders' equity	$ 321,164	$ 310,563

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 27, 2022	Jun. 27, 2021
Statement Of Financial Position [Abstract]
Common stock, shares authorized	18,000,000	18,000,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares issued	7,481,169	7,411,717
Treasury stock, shares	3,605,165	3,606,652

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Mar. 27, 2022	Mar. 28, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 8,197	$ 25,556
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	14,724	14,730
Foreign currency transaction loss	76	1,926
Loss on disposal of property, plant and equipment	153	1,421
Unrealized gain on peso forward contracts	(500)	(512)
Stock based compensation expense	873	775
Equity earnings of joint ventures	(941)	(1,844)
Change in operating assets and liabilities:
Receivables	(6,637)	(39,176)
Inventories	(2,450)	(3,930)
Other assets	(4,370)	(1,119)
Accounts payable and accrued liabilities	2,297	27,213
Other, net	361	356
Net cash provided by operating activities	11,783	25,396
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in VAST LLC	(75)	(100)
Purchase of property, plant and equipment	(9,407)	(6,401)
Proceeds received on sale of property, plant and equipment		8
Net cash used in investing activities	(9,482)	(6,493)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under credit facilities	11,000
Repayment of borrowings under credit facilities	(11,000)	(19,000)
Dividends paid to non-controlling interests of subsidiaries	(1,200)	(490)
Exercise of stock options and employee stock purchases	884	585
Net cash used in financing activities	(316)	(18,905)
Foreign currency impact on cash	9	(437)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	1,994	(439)
CASH AND CASH EQUIVALENTS
Beginning of period	14,465	11,774
End of period	16,459	11,335
Cash paid (recovered) during the period for:
Income taxes	(1,378)	3,701
Interest	158	276
Non-cash investing activities:
Change in capital expenditures in accounts payable	$ 824	$ (873)

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Basis of Financial Statements

9 Months Ended

Mar. 27, 2022

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, along with our VAST LLC partners, 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 March 27, 2022 and June 27, 2021, which have 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 2021 Form 10-K, which was filed with the Securities and Exchange Commission on September 2, 2021.

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Risks and Uncertainties

9 Months Ended

Mar. 27, 2022

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 in certain cases, advising or requiring individuals to limit or forego their time outside of their homes or from participating in large group gatherings. Accordingly, the COVID-19 outbreak has severely restricted the level of economic activity in many countries, and continues to adversely impact global economic activity, including with respect to customer purchasing actions and supply chain continuity and disruption, and in particular the supply of semiconductor chips, transponders and related components to the automotive industry.

STRATTEC’s operating performance is subject to global economic conditions, inflationary pressures 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 year ended June 27, 2021. Nonetheless, during the fourth quarter of our fiscal 2021, our net sales were negatively impacted by a global semiconductor chip shortage (especially as it relates to the automotive industry), which shortage continued into our current fiscal 2022 nine month period ended March 27, 2022 resulting in a decrease in our net sales for both the current year quarter and year to date period as compared to the same periods in our prior fiscal year. Additionally, inflationary pressures resulted in increased raw material and purchased part costs as well as increased wage rates in Mexico beginning in calendar

2021. Such increases negatively impacted our operating results in both the current year quarter and year to date period as compared to the same periods in our prior fiscal year.

The extent of the impact of the COVID-19 outbreak and continued inflationary pressures on our future operating results will depend on the duration, intensity and continued spread of the COVID-19 outbreak, regulatory and private sector responses, which may be precautionary and may include potential restrictive operating measures imposed by governmental authorities, the impact to our customers, workforce and suppliers, in particular related to the sourcing of semiconductor chips, transponders and other critical supply chain components needed by us and our customers to meet expected production schedules, and continued inflation impacting wages and the prices of raw materials and purchased parts, all of which are uncertain and cannot be predicted as to timing and cost impacts. These changing conditions may also affect the estimates and assumptions made by our 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

9 Months Ended

Mar. 27, 2022

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 within 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. The adoption of this pronouncement did not have a material impact on our consolidated financial statements.

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Derivative Instruments

9 Months Ended

Mar. 27, 2022

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 from time to time 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 Income (Expense), net.

The following table quantifies the outstanding Mexican peso forward contracts as of March 27, 2022 (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	April 19, 2022 - June 14, 2022	$	5,250		20.80	$	168
Buy MXP/Sell USD	July 19, 2022 – June 13, 2023	$	9,000		22.42	$	575

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):

	March 27, 2022		June 27, 2021
Not Designated as Hedging Instruments:
Other Current Assets:
Mexican Peso Forward Contracts	$	743	$	243

The pre-tax effects of the Mexican peso forward contracts are included in Other Income (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					Nine Months Ended
	March 27, 2022			March 28, 2021		March 27, 2022			March 28, 2021
Not Designated as Hedging Instruments:
Realized Gain	$	83		$	11	$	267		$	87
Realized (Loss)	$	(18	)	$	—	$	(67	)	$	—
Unrealized Gain	$	724		$	32	$	500		$	512

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Fair Value of Financial Instruments

9 Months Ended

Mar. 27, 2022

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 March 27, 2022 and June 27, 2021. 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 March 27, 2022 (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	$	169	$	—	$	—
Mid Cap		345		—		—
Large Cap		492		—		—
International		515		—		—
Fixed Income Funds		1,040		—		—
Cash and Cash Equivalents		—		962		—
Mexican Peso Forward Contracts		—		743		—
Total Assets at Fair Value	$	2,561	$	1,705	$	—

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.

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Investment in Joint Ventures and Majority Owned Subsidiaries

9 Months Ended

Mar. 27, 2022

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. As a result of these relationships, the entities involved purchase products from each other on an as needed basis to use as components in end products assembled and sold in their respective home markets. STRATTEC currently purchases such component parts from WITTE. These purchases totaled $200,000 and $615,000 during the three and nine month periods ended March 27, 2022, respectively, and $286,000 and $606,000 during the three and nine month periods ended March 28, 2021.

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 foreign subsidiaries and joint venture resulted in equity earnings of joint ventures to STRATTEC of $941,000 during the nine month period ended March 27, 2022 and $1.8 million during the nine month period ended March 28, 2021. During the nine months ended March 27, 2022, capital contributions totaling $225,000 were made to VAST LLC for purposes of funding operations in Brazil. STRATTEC’s portion of the capital contributions totaled $75,000. During the nine months ended March 28, 2021, capital contributions totaling $300,000 were made to VAST LLC for purposes of funding operations in Brazil. STRATTEC’s portion of the capital contributions totaled $100,000.

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 sales and increased net income to STRATTEC of approximately $81.2 million and $98,000, respectively, during the nine month period ended March 27, 2022 and increased net sales and increased net income to STRATTEC of approximately $98.7 million and $3.4 million, respectively, during the nine month period ended March 28, 2021. ADAC charges ADAC STRATTEC LLC an engineering, research and design fee as well as a sales fee. Such fees are calculated as a percentage of net sales, are included in the consolidated results of STRATTEC, and totaled $2.1 million and $5.7 million in the three and nine month periods ended March 27, 2022 and $2.1 million and $6.9 million in the three and nine month periods ended March 28, 2021. Additionally, ADAC-STRATTEC LLC sells production parts to ADAC. Sales to ADAC are included in the consolidated results of STRATTEC and totaled $2.9 million and $6.0 million in the three and nine month periods ended March 27, 2022 and $2.7 million and $9.1 million in the three and nine month periods ended March 28, 2021.

STRATTEC POWER ACCESS LLC (“SPA”) was originally formed in fiscal year 2009 to supply the North American portion of the power sliding door, lift gate, tail gate and deck lid system access control products some of which were acquired from Delphi Corporation in 2009. 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 sales and increased net income to STRATTEC of approximately $68.3 million and $3.8 million, respectively, during the nine month period ended March 27, 2022 and $72.0 million and $4.7 million, respectively, during the nine month period ended March 28, 2021.

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Equity Earnings (Loss) of Joint Ventures

9 Months Ended

Mar. 27, 2022

Equity Method Investments And Joint Ventures [Abstract]

Equity Earnings (Loss) of Joint Ventures

Equity Earnings (Loss) 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 venture 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.

During the quarter ended March 27, 2022, VAST China experienced a fire at their Taicang plant. As a result, certain door handle and painting operations were subsequently transferred to their new Jingzhou facility and another supplier. The transfer of production negatively impacted VAST China’s profitability for the quarter ended March 27, 2022.

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

	Three Months Ended						Nine Months Ended
	March 27, 2022			March 28, 2021			March 27, 2022			March 28, 2021
Net Sales	$	55,281		$	51,748		$	153,454		$	160,511
Cost of Goods Sold		46,418			44,155			127,022			131,345
Gross Profit		8,863			7,593			26,432			29,166
Engineering, Selling and Administrative Expenses		7,575			7,684			24,075			22,936
Income (Loss) From Operations		1,288			(91	)		2,357			6,230
Other Income, net		692			327			1,085			1,363
Income before Provision for Income Taxes		1,980			236			3,442			7,593
Provision for Income Taxes		239			348			614			2,011
Net Income (Loss)	$	1,741		$	(112	)	$	2,828		$	5,582
STRATTEC's Share of VAST LLC Net Income (Loss)		581			(37	)		943			1,861
Intercompany Profit Elimination		(4	)		(19	)		(2	)		(17	)
STRATTEC’s Equity Earnings (Loss) of VAST LLC	$	577		$	(56	)	$	941		$	1,844

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				Nine Months Ended
	March 27, 2022		March 28, 2021		March 27, 2022		March 28, 2021
Sales to VAST LLC	$	316	$	1,059	$	1,533	$	3,273
Purchases from VAST LLC	$	6	$	139	$	157	$	340
Expenses Charged to VAST LLC	$	134	$	265	$	512	$	1,361
Expenses Charged from VAST LLC	$	151	$	302	$	593	$	953

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Leases

9 Months Ended

Mar. 27, 2022

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 Sheets are presented below (in thousands):

	March 27, 2022
Right-of Use Asset Under Operating Lease:
Other Long-Term Assets	$	3,118
Lease Obligation Under Operating Lease:
Current Liabilities: Accrued Liabilities: Other	$	389
Other Long-Term Liabilities		2,729
	$	3,118

Future minimum lease payments, by our fiscal year, including options to extend that are reasonably certain to be exercised, under this non-cancelable lease are as follows as of March 27, 2022 (in thousands):

2022 (for the remaining three months)	$	122
2023		497
2024		509
2025		522
2026		535
Thereafter		1,299
Total Future Minimum Lease Payments		3,484
Less: Imputed Interest		(366	)
Total Lease Obligations	$	3,118

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

	Nine Months Ended
	March 27, 2022		March 28, 2021
Operating Cash Flows:
Cash Paid Related to Operating Lease Obligation	$	362	$	354

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

	March 27, 2022
Weighted Average Remaining Lease Term (in years)		6.6
Weighted Average Discount Rate		3.3	%

Operating lease expense for the three and nine month periods ended March 27, 2022 totaled $122,000 and $362,000, respectively. Operating lease expense for the three and nine month periods ended March 28, 2021 totaled $119,000 and $354,000, respectively.

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Credit Facilities

9 Months Ended

Mar. 27, 2022

Debt Disclosure [Abstract]

Credit Facilities

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, 2024. 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 through May 31, 2021 was 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 through May 31, 2021 was at varying rates based, at our option, on LIBOR plus 1.25 percent or the bank’s prime rate. Effective June 1, 2021, interest on borrowings under both credit facilities were 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 March 27, 2022, we were in compliance with all financial covenants required by these credit facilities.

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

	March 27, 2022		June 27, 2021
STRATTEC Credit Facility	$	—	$	—
ADAC-STRATTEC Credit Facility		12,000		12,000
	$	12,000	$	12,000

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

	Nine Months Ended
	Average Outstanding Borrowings				Weighted Average Interest Rate
	March 27, 2022		March 28, 2021		March 27, 2022			March 28, 2021
STRATTEC Credit Facility	$	421	$	11,436		1.9	%		1.2	%
ADAC-STRATTEC Credit Facility	$	14,784	$	15,000		1.4	%		1.4	%

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Commitments and Contingencies

9 Months Ended

Mar. 27, 2022

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 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 years 2010, 2016, and 2021, we obtained updated third party estimates of projected costs to adequately cover the cost for active remediation of this contamination and adjusted the reserve as needed. 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 environmental reserve of $1.4 million at March 27, 2022 is adequate.

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Shareholders' Equity

9 Months Ended

Mar. 27, 2022

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

A summary of activity impacting shareholders’ equity for the three and nine month periods ended March 27, 2022 and March 28, 2021 were as follows (in thousands):

	Three Months Ended March 27, 2022
	Total Shareholders’ Equity			Common Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss			Treasury Stock			Non-Controlling Interest
Balance, December 26, 2021	$	217,071		$	75	$	100,768	$	237,967	$	(17,391	)	$	(135,599	)	$	31,251
Net Income		4,135			—		—		3,146		—			—			989
Dividend Declared – Non-    controlling Interests of    Subsidiaries		(600	)		—		—		—		—			—			(600	)
Translation Adjustments		685			—		—		—		312			—			373
Stock Based Compensation		239			—		239		—		—			—			—
Pension and Postretirement    Adjustment, Net of    Tax		79			—		—		—		79			—			—
Stock Option Exercises		227			—		227		—		—			—			—
Employee Stock Purchases		18			—		10		—		—			8			—
Balance, March 27, 2022	$	221,854		$	75	$	101,244	$	241,113	$	(17,000	)	$	(135,591	)	$	32,013

	Three Months Ended March 28, 2021
	Total Shareholders’ Equity			Common Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss			Treasury Stock			Non-Controlling Interest
Balance, December 27, 2020	$	201,473		$	74	$	98,571	$	227,061	$	(17,492	)	$	(135,629	)	$	28,888
Net Income		5,910			—		—		4,485		—			—			1,425
Translation Adjustments		(697	)		—		—		—		(288	)		—			(409	)
Stock Based Compensation		193			—		193		—		—			—			—
Pension and Postretirement     Adjustment, Net of     Tax		69			—		—		—		69			—			—
Stock Option Exercises		526			—		526		—		—			—			—
Employee Stock Purchases		20			—		13		—		—			7			—
Balance, March 28, 2021	$	207,494		$	74	$	99,303	$	231,546	$	(17,711	)	$	(135,622	)	$	29,904

	Nine Months Ended March 27, 2022
	Total Shareholders’ Equity			Common Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss			Treasury Stock			Non-Controlling Interest
Balance, June 27, 2021	$	213,433		$	74	$	99,512	$	234,472	$	(16,797	)	$	(135,615	)	$	31,787
Net Income		8,197			—		—		6,641		—			—			1,556
Dividend Declared – Non-    controlling Interests of    Subsidiaries		(1,200	)		—		—		—		—			—			(1,200	)
Translation Adjustments		(571	)		—		—		—		(441	)		—			(130	)
Stock Based Compensation		873			—		873		—		—			—			—
Pension and Postretirement    Adjustment, Net of    Tax		238			—		—		—		238			—			—
Stock Option Exercises		827			1		826		—		—			—			—
Employee Stock Purchases		57			—		33		—		—			24			—
Balance, March 27, 2022	$	221,854		$	75	$	101,244	$	241,113	$	(17,000	)	$	(135,591	)	$	32,013

	Nine Months Ended March 28, 2021
	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		25,556			—		—		19,606		—			—			5,950
Dividend Declared – Non-    controlling Interests of    Subsidiaries		(490	)		—		—		—		—			—			(490	)
Translation Adjustments		5,419			—		—		—		4,194			—			1,225
Stock Based Compensation		775			—		775		—		—			—			—
Pension and Postretirement    Adjustment, Net of    Tax		208			—		—		—		208			—			—
Stock Option Exercises		526			—		526		—		—			—			—
Employee Stock Purchases		59			—		25		—		—			34			—
Balance, March 28, 2021	$	207,494		$	74	$	99,303	$	231,546	$	(17,711	)	$	(135,622	)	$	29,904

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Revenue from Contracts with Customers

9 Months Ended

Mar. 27, 2022

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 or contract liabilities as of March 27, 2022 or June 27, 2021.

Revenue by Product Group and Customer:  

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

	Three Months Ended				Nine Months Ended
	March 27, 2022		March 28, 2021		March 27, 2022		March 28, 2021
Door Handles & Exterior Trim	$	29,313	$	29,790	$	81,211	$	98,694
Keys & Locksets		28,230		28,616		77,725		91,488
Power Access		23,675		26,209		68,344		72,039
Latches		12,760		13,125		34,782		41,303
Aftermarket & OE Service		11,421		10,969		34,731		34,077
Driver Controls		8,525		10,822		25,317		31,144
Other		2,019		2,113		7,082		6,493
	$	115,943	$	121,644	$	329,192	$	375,238

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

	Three Months Ended				Nine Months Ended
	March 27, 2022		March 28, 2021		March 27, 2022		March 28, 2021
General Motors Company	$	34,738	$	34,543	$	91,551	$	111,322
Stellantis (Formerly Fiat Chrysler     Automobiles)		23,047		21,685		62,657		69,919
Ford Motor Company		19,162		21,722		57,927		54,356
Commercial and Other OEM     Customers		16,518		17,241		50,120		58,272
Tier 1 Customers		15,279		17,289		42,861		53,444
Hyundai / Kia		7,199		9,164		24,076		27,925
	$	115,943	$	121,644	$	329,192	$	375,238

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Other Income (Expense), net

9 Months Ended

Mar. 27, 2022

Other Income And Expenses [Abstract]

Other Income (Expense), net

Other Income (Expense), net

Net other income (expense) included in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income primarily included foreign currency transaction gains and losses, realized and unrealized gains or 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 (“SERP”) 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 March 27, 2022 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						Nine Months Ended
	March 27, 2022			March 28, 2021			March 27, 2022			March 28, 2021
Foreign Currency Transaction (Loss) Gain	$	(319	)	$	386		$	(76	)	$	(1,926	)
Unrealized Gain on Peso Forward    Contracts		724			32			500			512
Realized Gain on Peso Forward    Contracts, net		65			11			200			87
Pension and Postretirement Plans Cost		(120	)		(106	)		(360	)		(314	)
Rabbi Trust (Loss) Gain		(130	)		154			(60	)		472
Other		65			(22	)		116			(2	)
	$	285		$	455		$	320		$	(1,171	)

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Income Taxes

9 Months Ended

Mar. 27, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Our effective tax rate was 1.2% and 16.3% for the three months ended March 27, 2022 and March 28, 2021, respectively. Our effective tax rate was 4.0% and 15.6% for the nine month periods ended March 27, 2022 and March 28, 2021, respectively. The reduction in our effective tax rate in the current three and nine months periods as compared to the respective prior year periods is due to adjustments we made to the amounts of our fiscal 2021 estimated foreign tax credits and estimated tax impacts associated with our investment in VAST LLC. These true-up adjustments resulted from the filing of our US income tax returns during the quarter ended March 27, 2022 and were attributable to actual results included in non-US income tax returns, which are filed on a calendar year basis, and which differ from estimates included in our fiscal 2021 tax provision. The adjustment amounts recorded during the three and nine month periods ended March 27, 2022 totaled $740,000 and $1.0 million, respectively. Our effective tax rate for the three and nine month periods ended March 27, 2022 excluding these adjustments were 18.9% and 15.7%, 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 our fiscal 2020. With the enactment of these final regulations, we became eligible for an exclusion from GILTI since we met the provisions for the GILTI High-Tax exception included in the final regulations. In addition, the enactment of these new regulations and our eligibility for the GILTI High-Tax exception was retroactive to the original enactment of the GILTI tax provision, which included our 2020 fiscal year. As a result, we recorded an income tax benefit of $675,000 during the nine month period ended March 28, 2021. 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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Earnings Per Share

9 Months Ended

Mar. 27, 2022

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
	March 27, 2022						March 28, 2021
	Net Income		Shares		Per-Share Amount		Net Income		Shares		Per-Share Amount
Basic Earnings Per Share	$	3,146		3,871	$	0.81	$	4,485		3,797	$	1.18
Stock Option and Restricted    Stock Awards		—		45				—		89
Diluted Earnings Per Share	$	3,146		3,916	$	0.80	$	4,485		3,886	$	1.15

	Nine Months Ended
	March 27, 2022						March 28, 2021
	Net Income		Shares		Per-Share Amount		Net Income		Shares		Per-Share Amount
Basic Earnings Per Share	$	6,641		3,856	$	1.72	$	19,606		3,783	$	5.18
Stock Option and Restricted    Stock Awards		—		50				—		56
Diluted Earnings Per Share	$	6,641		3,906	$	1.70	$	19,606		3,839	$	5.11

The calculation of earnings per share excluded 9,010 share-based payment awards as of both March 27, 2022 and March 28, 2021 because their inclusion would have been anti-dilutive.

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Stock-Based Compensation

9 Months Ended

Mar. 27, 2022

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 March 27, 2022, the Board of Directors had designated 2 million shares of common stock available for the grant of awards under the plan. Remaining shares available to be granted under the plan as of March 27, 2022 were 177,959. 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.

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 nine months ended March 27, 2022 follows:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in thousands)
Outstanding, June 27, 2021		72,624	$	37.65
Exercised		31,452	$	26.28
Outstanding, March 27, 2022		41,172	$	46.34		1.5	$	49
Exercisable, March 27, 2022		41,172	$	46.34		1.5	$	49

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

	Three Months Ended				Nine Months Ended
	March 27, 2022		March 28, 2021		March 27, 2022		March 28, 2021
Intrinsic Value of Options Exercised	$	120	$	555	$	451	$	555
Fair Value of Stock Options Vesting	$	—	$	—	$	—	$	—

No options were granted during the nine month periods ended March 27, 2022 or March 28, 2021.    

A summary of restricted stock activity under our stock incentive plan for the nine months ended March 27, 2022 follows:

	Shares			Weighted Average Grant Date Fair Value
Nonvested Balance, June 27, 2021		81,975		$	23.31
Granted		43,875		$	42.50
Vested		(38,000	)	$	25.56
Forfeited		(2,750	)	$	32.70
Nonvested Balance, March 27, 2022		85,100		$	31.89

As of March 27, 2022, all compensation cost related to outstanding stock options granted under our omnibus stock incentive plan has been recognized. As of March 27, 2022, there was approximately $1.6 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

9 Months Ended

Mar. 27, 2022

Compensation And Retirement Disclosure [Abstract]

Pension and Postretirement Benefits

Pension and Postretirement Benefits

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 $3.5 million at March 27, 2022 and $3.6 million at June 27, 2021 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 Income (Expense), net in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income.

The following tables summarize 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
	March 27, 2022		March 28, 2021		March 27, 2022		March 28, 2021
Service Cost	$	15	$	16	$	3	$	3
Interest Cost		15		10		4		4
Amortization of Prior Service Credit		—		—		—		(2	)
Amortization of Unrecognized Net Loss		20		3	82			91
Net Periodic Benefit Cost	$	50	$	29	$	89	$	96

	SERP Benefits				Postretirement Benefits
	Nine Months Ended				Nine Months Ended
	March 27, 2022		March 28, 2021		March 27, 2022		March 28, 2021
Service Cost	$	46	$	47	$	9	$	10
Interest Cost		40		31		10		12
Amortization of Prior Service Credit		—		—		—		(6	)
Amortization of Unrecognized Net Loss	63			8	247			269
Net Periodic Benefit Cost	$	149	$	86	$	266	$	285

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Accumulated Other Comprehensive Loss

9 Months Ended

Mar. 27, 2022

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 March 27, 2022
	Foreign Currency Translation Adjustments			Retirement and Postretirement Benefit Plans			Total
Balance, December 26, 2021	$	15,438		$	1,953		$	17,391
Other Comprehensive Income Before Reclassifications		(1,291	)		—			(1,291	)
Income Tax		606			—			606
Net Other Comprehensive Income Before       Reclassifications		(685	)		—			(685	)
Reclassifications:
Unrecognized Net Loss (A)		—			(102	)		(102	)
Total Reclassifications Before Tax		—			(102	)		(102	)
Income Tax		—			23			23
Net Reclassifications		—			(79	)		(79	)
Other Comprehensive Income		(685	)		(79	)		(764	)
Other Comprehensive Income Attributable to Non-    Controlling Interest		(373	)		—			(373	)
Balance, March 27, 2022	$	15,126		$	1,874		$	17,000

	Three Months Ended March 28, 2021
	Foreign Currency Translation Adjustments		Retirement and Postretirement Benefit Plans			Total
Balance, December 27, 2020	$	15,654	$	1,838		$	17,492
Other Comprehensive Loss Before Reclassifications		697		—			697
Net Other Comprehensive Loss Before       Reclassifications		697		—			697
Reclassifications:
Prior Service Credits (A)		—		2			2
Unrecognized Net Loss (A)		—		(94	)		(94	)
Total Reclassifications Before Tax		—		(92	)		(92	)
Income Tax		—		23			23
Net Reclassifications		—		(69	)		(69	)
Other Comprehensive Loss		697		(69	)		628
Other Comprehensive Loss Attributable to Non-    Controlling Interest		409		—			409
Balance, March 28, 2021	$	15,942	$	1,769		$	17,711

	Nine Months Ended March 27, 2022
	Foreign Currency Translation Adjustments			Retirement and Postretirement Benefit Plans			Total
Balance, June 27, 2021	$	14,685		$	2,112		$	16,797
Other Comprehensive Income Before Reclassifications		(35	)		—			(35	)
Income Tax		606			—			606
Net Other Comprehensive Income Before       Reclassifications		571			—			571
Reclassifications:
Unrecognized Net Loss (A)		—			(310	)		(310	)
Total Reclassifications Before Tax		—			(310	)		(310	)
Income Tax		—			72			72
Net Reclassifications		—			(238	)		(238	)
Other Comprehensive Loss		571			(238	)		333
Other Comprehensive Loss Attributable to Non-    Controlling Interest		130			—			130
Balance, March 27, 2022	$	15,126		$	1,874		$	17,000

	Nine Months Ended March 28, 2021
	Foreign Currency Translation Adjustments			Retirement and Postretirement Benefit Plans			Total
Balance, June 28, 2020	$	20,136		$	1,977		$	22,113
Other Comprehensive Loss Before Reclassifications		(5,419	)		—			(5,419	)
Net Other Comprehensive Loss Before       Reclassifications		(5,419	)		—			(5,419	)
Reclassifications:
Prior Service Credits (A)		—			6			6
Unrecognized Net Loss (A)		—			(277	)		(277	)
Total Reclassifications Before Tax		—			(271	)		(271	)
Income Tax		—			63			63
Net Reclassifications		—			(208	)		(208	)
Other Comprehensive Income		(5,419	)		(208	)		(5,627	)
Other Comprehensive Income Attributable to Non-    Controlling Interest		(1,225	)		—			(1,225	)
Balance, March 28, 2021	$	15,942		$	1,769		$	17,711

(A) Amounts reclassified are included in the computation of net periodic benefit cost, which is included in Other Income (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)

9 Months Ended

Mar. 27, 2022

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 March 27, 2022 (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	April 19, 2022 - June 14, 2022	$	5,250		20.80	$	168
Buy MXP/Sell USD	July 19, 2022 – June 13, 2023	$	9,000		22.42	$	575

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):

	March 27, 2022		June 27, 2021
Not Designated as Hedging Instruments:
Other Current Assets:
Mexican Peso Forward Contracts	$	743	$	243

Pre-Tax Effects of the Peso Forward Contracts

The pre-tax effects of the Mexican peso forward contracts are included in Other Income (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					Nine Months Ended
	March 27, 2022			March 28, 2021		March 27, 2022			March 28, 2021
Not Designated as Hedging Instruments:
Realized Gain	$	83		$	11	$	267		$	87
Realized (Loss)	$	(18	)	$	—	$	(67	)	$	—
Unrealized Gain	$	724		$	32	$	500		$	512

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Fair Value of Financial Instruments (Tables)

9 Months Ended

Mar. 27, 2022

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 March 27, 2022 (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	$	169	$	—	$	—
Mid Cap		345		—		—
Large Cap		492		—		—
International		515		—		—
Fixed Income Funds		1,040		—		—
Cash and Cash Equivalents		—		962		—
Mexican Peso Forward Contracts		—		743		—
Total Assets at Fair Value	$	2,561	$	1,705	$	—

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Equity Earnings (Loss) of Joint Ventures (Tables) - VAST LLC

9 Months Ended

Mar. 27, 2022

Summarized Statements of Operations

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

	Three Months Ended						Nine Months Ended
	March 27, 2022			March 28, 2021			March 27, 2022			March 28, 2021
Net Sales	$	55,281		$	51,748		$	153,454		$	160,511
Cost of Goods Sold		46,418			44,155			127,022			131,345
Gross Profit		8,863			7,593			26,432			29,166
Engineering, Selling and Administrative Expenses		7,575			7,684			24,075			22,936
Income (Loss) From Operations		1,288			(91	)		2,357			6,230
Other Income, net		692			327			1,085			1,363
Income before Provision for Income Taxes		1,980			236			3,442			7,593
Provision for Income Taxes		239			348			614			2,011
Net Income (Loss)	$	1,741		$	(112	)	$	2,828		$	5,582
STRATTEC's Share of VAST LLC Net Income (Loss)		581			(37	)		943			1,861
Intercompany Profit Elimination		(4	)		(19	)		(2	)		(17	)
STRATTEC’s Equity Earnings (Loss) of VAST LLC	$	577		$	(56	)	$	941		$	1,844

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				Nine Months Ended
	March 27, 2022		March 28, 2021		March 27, 2022		March 28, 2021
Sales to VAST LLC	$	316	$	1,059	$	1,533	$	3,273
Purchases from VAST LLC	$	6	$	139	$	157	$	340
Expenses Charged to VAST LLC	$	134	$	265	$	512	$	1,361
Expenses Charged from VAST LLC	$	151	$	302	$	593	$	953

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Leases (Tables)

9 Months Ended

Mar. 27, 2022

Leases [Abstract]

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

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

	March 27, 2022
Right-of Use Asset Under Operating Lease:
Other Long-Term Assets	$	3,118
Lease Obligation Under Operating Lease:
Current Liabilities: Accrued Liabilities: Other	$	389
Other Long-Term Liabilities		2,729
	$	3,118

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 this non-cancelable lease are as follows as of March 27, 2022 (in thousands):

2022 (for the remaining three months)	$	122
2023		497
2024		509
2025		522
2026		535
Thereafter		1,299
Total Future Minimum Lease Payments		3,484
Less: Imputed Interest		(366	)
Total Lease Obligations	$	3,118

Schedule of Cash Flow Information Related to Operating Lease

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

	Nine Months Ended
	March 27, 2022		March 28, 2021
Operating Cash Flows:
Cash Paid Related to Operating Lease Obligation	$	362	$	354

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:

	March 27, 2022
Weighted Average Remaining Lease Term (in years)		6.6
Weighted Average Discount Rate		3.3	%

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Credit Facilities (Tables)

9 Months Ended

Mar. 27, 2022

Debt Disclosure [Abstract]

Schedule of Outstanding Borrowings Under the Credit Facilities

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

	March 27, 2022		June 27, 2021
STRATTEC Credit Facility	$	—	$	—
ADAC-STRATTEC Credit Facility		12,000		12,000
	$	12,000	$	12,000

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): 

	Nine Months Ended
	Average Outstanding Borrowings				Weighted Average Interest Rate
	March 27, 2022		March 28, 2021		March 27, 2022			March 28, 2021
STRATTEC Credit Facility	$	421	$	11,436		1.9	%		1.2	%
ADAC-STRATTEC Credit Facility	$	14,784	$	15,000		1.4	%		1.4	%

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Shareholders' Equity (Tables)

9 Months Ended

Mar. 27, 2022

Equity [Abstract]

Summary of Activity Impacting Shareholders' Equity

A summary of activity impacting shareholders’ equity for the three and nine month periods ended March 27, 2022 and March 28, 2021 were as follows (in thousands):

	Three Months Ended March 27, 2022
	Total Shareholders’ Equity			Common Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss			Treasury Stock			Non-Controlling Interest
Balance, December 26, 2021	$	217,071		$	75	$	100,768	$	237,967	$	(17,391	)	$	(135,599	)	$	31,251
Net Income		4,135			—		—		3,146		—			—			989
Dividend Declared – Non-    controlling Interests of    Subsidiaries		(600	)		—		—		—		—			—			(600	)
Translation Adjustments		685			—		—		—		312			—			373
Stock Based Compensation		239			—		239		—		—			—			—
Pension and Postretirement    Adjustment, Net of    Tax		79			—		—		—		79			—			—
Stock Option Exercises		227			—		227		—		—			—			—
Employee Stock Purchases		18			—		10		—		—			8			—
Balance, March 27, 2022	$	221,854		$	75	$	101,244	$	241,113	$	(17,000	)	$	(135,591	)	$	32,013

	Three Months Ended March 28, 2021
	Total Shareholders’ Equity			Common Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss			Treasury Stock			Non-Controlling Interest
Balance, December 27, 2020	$	201,473		$	74	$	98,571	$	227,061	$	(17,492	)	$	(135,629	)	$	28,888
Net Income		5,910			—		—		4,485		—			—			1,425
Translation Adjustments		(697	)		—		—		—		(288	)		—			(409	)
Stock Based Compensation		193			—		193		—		—			—			—
Pension and Postretirement     Adjustment, Net of     Tax		69			—		—		—		69			—			—
Stock Option Exercises		526			—		526		—		—			—			—
Employee Stock Purchases		20			—		13		—		—			7			—
Balance, March 28, 2021	$	207,494		$	74	$	99,303	$	231,546	$	(17,711	)	$	(135,622	)	$	29,904

	Nine Months Ended March 27, 2022
	Total Shareholders’ Equity			Common Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss			Treasury Stock			Non-Controlling Interest
Balance, June 27, 2021	$	213,433		$	74	$	99,512	$	234,472	$	(16,797	)	$	(135,615	)	$	31,787
Net Income		8,197			—		—		6,641		—			—			1,556
Dividend Declared – Non-    controlling Interests of    Subsidiaries		(1,200	)		—		—		—		—			—			(1,200	)
Translation Adjustments		(571	)		—		—		—		(441	)		—			(130	)
Stock Based Compensation		873			—		873		—		—			—			—
Pension and Postretirement    Adjustment, Net of    Tax		238			—		—		—		238			—			—
Stock Option Exercises		827			1		826		—		—			—			—
Employee Stock Purchases		57			—		33		—		—			24			—
Balance, March 27, 2022	$	221,854		$	75	$	101,244	$	241,113	$	(17,000	)	$	(135,591	)	$	32,013

	Nine Months Ended March 28, 2021
	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		25,556			—		—		19,606		—			—			5,950
Dividend Declared – Non-    controlling Interests of    Subsidiaries		(490	)		—		—		—		—			—			(490	)
Translation Adjustments		5,419			—		—		—		4,194			—			1,225
Stock Based Compensation		775			—		775		—		—			—			—
Pension and Postretirement    Adjustment, Net of    Tax		208			—		—		—		208			—			—
Stock Option Exercises		526			—		526		—		—			—			—
Employee Stock Purchases		59			—		25		—		—			34			—
Balance, March 28, 2021	$	207,494		$	74	$	99,303	$	231,546	$	(17,711	)	$	(135,622	)	$	29,904

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Revenue from Contracts with Customers (Tables)

9 Months Ended

Mar. 27, 2022

Revenue From Contract With Customer [Abstract]

Revenue by Product Group and Customer

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

	Three Months Ended				Nine Months Ended
	March 27, 2022		March 28, 2021		March 27, 2022		March 28, 2021
Door Handles & Exterior Trim	$	29,313	$	29,790	$	81,211	$	98,694
Keys & Locksets		28,230		28,616		77,725		91,488
Power Access		23,675		26,209		68,344		72,039
Latches		12,760		13,125		34,782		41,303
Aftermarket & OE Service		11,421		10,969		34,731		34,077
Driver Controls		8,525		10,822		25,317		31,144
Other		2,019		2,113		7,082		6,493
	$	115,943	$	121,644	$	329,192	$	375,238

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

	Three Months Ended				Nine Months Ended
	March 27, 2022		March 28, 2021		March 27, 2022		March 28, 2021
General Motors Company	$	34,738	$	34,543	$	91,551	$	111,322
Stellantis (Formerly Fiat Chrysler     Automobiles)		23,047		21,685		62,657		69,919
Ford Motor Company		19,162		21,722		57,927		54,356
Commercial and Other OEM     Customers		16,518		17,241		50,120		58,272
Tier 1 Customers		15,279		17,289		42,861		53,444
Hyundai / Kia		7,199		9,164		24,076		27,925
	$	115,943	$	121,644	$	329,192	$	375,238

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Other Income (Expense), net (Tables)

9 Months Ended

Mar. 27, 2022

Other Income And Expenses [Abstract]

Summary of Other Income (Expense), net

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

	Three Months Ended						Nine Months Ended
	March 27, 2022			March 28, 2021			March 27, 2022			March 28, 2021
Foreign Currency Transaction (Loss) Gain	$	(319	)	$	386		$	(76	)	$	(1,926	)
Unrealized Gain on Peso Forward    Contracts		724			32			500			512
Realized Gain on Peso Forward    Contracts, net		65			11			200			87
Pension and Postretirement Plans Cost		(120	)		(106	)		(360	)		(314	)
Rabbi Trust (Loss) Gain		(130	)		154			(60	)		472
Other		65			(22	)		116			(2	)
	$	285		$	455		$	320		$	(1,171	)

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Earnings Per Share (Tables)

9 Months Ended

Mar. 27, 2022

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
	March 27, 2022						March 28, 2021
	Net Income		Shares		Per-Share Amount		Net Income		Shares		Per-Share Amount
Basic Earnings Per Share	$	3,146		3,871	$	0.81	$	4,485		3,797	$	1.18
Stock Option and Restricted    Stock Awards		—		45				—		89
Diluted Earnings Per Share	$	3,146		3,916	$	0.80	$	4,485		3,886	$	1.15

	Nine Months Ended
	March 27, 2022						March 28, 2021
	Net Income		Shares		Per-Share Amount		Net Income		Shares		Per-Share Amount
Basic Earnings Per Share	$	6,641		3,856	$	1.72	$	19,606		3,783	$	5.18
Stock Option and Restricted    Stock Awards		—		50				—		56
Diluted Earnings Per Share	$	6,641		3,906	$	1.70	$	19,606		3,839	$	5.11

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Stock-Based Compensation (Tables)

9 Months Ended

Mar. 27, 2022

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 nine months ended March 27, 2022 follows:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in thousands)
Outstanding, June 27, 2021		72,624	$	37.65
Exercised		31,452	$	26.28
Outstanding, March 27, 2022		41,172	$	46.34		1.5	$	49
Exercisable, March 27, 2022		41,172	$	46.34		1.5	$	49

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 and nine month periods presented below were as follows (in thousands):

	Three Months Ended				Nine Months Ended
	March 27, 2022		March 28, 2021		March 27, 2022		March 28, 2021
Intrinsic Value of Options Exercised	$	120	$	555	$	451	$	555
Fair Value of Stock Options Vesting	$	—	$	—	$	—	$	—

Summary of Restricted Stock Activity Under Our Stock Incentive Plan

A summary of restricted stock activity under our stock incentive plan for the nine months ended March 27, 2022 follows:

	Shares			Weighted Average Grant Date Fair Value
Nonvested Balance, June 27, 2021		81,975		$	23.31
Granted		43,875		$	42.50
Vested		(38,000	)	$	25.56
Forfeited		(2,750	)	$	32.70
Nonvested Balance, March 27, 2022		85,100		$	31.89

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Pension and Postretirement Benefits (Tables)

9 Months Ended

Mar. 27, 2022

Compensation And Retirement Disclosure [Abstract]

Summary of Net Periodic Benefit Cost Recognized

The following tables summarize 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
	March 27, 2022		March 28, 2021		March 27, 2022		March 28, 2021
Service Cost	$	15	$	16	$	3	$	3
Interest Cost		15		10		4		4
Amortization of Prior Service Credit		—		—		—		(2	)
Amortization of Unrecognized Net Loss		20		3	82			91
Net Periodic Benefit Cost	$	50	$	29	$	89	$	96

	SERP Benefits				Postretirement Benefits
	Nine Months Ended				Nine Months Ended
	March 27, 2022		March 28, 2021		March 27, 2022		March 28, 2021
Service Cost	$	46	$	47	$	9	$	10
Interest Cost		40		31		10		12
Amortization of Prior Service Credit		—		—		—		(6	)
Amortization of Unrecognized Net Loss	63			8	247			269
Net Periodic Benefit Cost	$	149	$	86	$	266	$	285

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Accumulated Other Comprehensive Loss (Tables)

9 Months Ended

Mar. 27, 2022

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 March 27, 2022
	Foreign Currency Translation Adjustments			Retirement and Postretirement Benefit Plans			Total
Balance, December 26, 2021	$	15,438		$	1,953		$	17,391
Other Comprehensive Income Before Reclassifications		(1,291	)		—			(1,291	)
Income Tax		606			—			606
Net Other Comprehensive Income Before       Reclassifications		(685	)		—			(685	)
Reclassifications:
Unrecognized Net Loss (A)		—			(102	)		(102	)
Total Reclassifications Before Tax		—			(102	)		(102	)
Income Tax		—			23			23
Net Reclassifications		—			(79	)		(79	)
Other Comprehensive Income		(685	)		(79	)		(764	)
Other Comprehensive Income Attributable to Non-    Controlling Interest		(373	)		—			(373	)
Balance, March 27, 2022	$	15,126		$	1,874		$	17,000

	Three Months Ended March 28, 2021
	Foreign Currency Translation Adjustments		Retirement and Postretirement Benefit Plans			Total
Balance, December 27, 2020	$	15,654	$	1,838		$	17,492
Other Comprehensive Loss Before Reclassifications		697		—			697
Net Other Comprehensive Loss Before       Reclassifications		697		—			697
Reclassifications:
Prior Service Credits (A)		—		2			2
Unrecognized Net Loss (A)		—		(94	)		(94	)
Total Reclassifications Before Tax		—		(92	)		(92	)
Income Tax		—		23			23
Net Reclassifications		—		(69	)		(69	)
Other Comprehensive Loss		697		(69	)		628
Other Comprehensive Loss Attributable to Non-    Controlling Interest		409		—			409
Balance, March 28, 2021	$	15,942	$	1,769		$	17,711

	Nine Months Ended March 27, 2022
	Foreign Currency Translation Adjustments			Retirement and Postretirement Benefit Plans			Total
Balance, June 27, 2021	$	14,685		$	2,112		$	16,797
Other Comprehensive Income Before Reclassifications		(35	)		—			(35	)
Income Tax		606			—			606
Net Other Comprehensive Income Before       Reclassifications		571			—			571
Reclassifications:
Unrecognized Net Loss (A)		—			(310	)		(310	)
Total Reclassifications Before Tax		—			(310	)		(310	)
Income Tax		—			72			72
Net Reclassifications		—			(238	)		(238	)
Other Comprehensive Loss		571			(238	)		333
Other Comprehensive Loss Attributable to Non-    Controlling Interest		130			—			130
Balance, March 27, 2022	$	15,126		$	1,874		$	17,000

	Nine Months Ended March 28, 2021
	Foreign Currency Translation Adjustments			Retirement and Postretirement Benefit Plans			Total
Balance, June 28, 2020	$	20,136		$	1,977		$	22,113
Other Comprehensive Loss Before Reclassifications		(5,419	)		—			(5,419	)
Net Other Comprehensive Loss Before       Reclassifications		(5,419	)		—			(5,419	)
Reclassifications:
Prior Service Credits (A)		—			6			6
Unrecognized Net Loss (A)		—			(277	)		(277	)
Total Reclassifications Before Tax		—			(271	)		(271	)
Income Tax		—			63			63
Net Reclassifications		—			(208	)		(208	)
Other Comprehensive Income		(5,419	)		(208	)		(5,627	)
Other Comprehensive Income Attributable to Non-    Controlling Interest		(1,225	)		—			(1,225	)
Balance, March 28, 2021	$	15,942		$	1,769		$	17,711

(A) Amounts reclassified are included in the computation of net periodic benefit cost, which is included in Other Income (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)	9 Months Ended
	Mar. 27, 2022 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)	9 Months Ended
	Mar. 27, 2022 USD ($) $ / $
Currency buy sell under contract one
Derivative [Line Items]
Derivative, Effective Dates, Inception	Apr. 19, 2022
Derivative, Effective Dates, Maturity	Jun. 14, 2022
Derivative, Notional Amount	$ 5,250,000
Derivative, Average Forward Contractual Exchange Rate | $ / $	20.80
Derivative, Fair Value	$ 168,000
Currency buy sell under contract two
Derivative [Line Items]
Derivative, Effective Dates, Inception	Jul. 19, 2022
Derivative, Effective Dates, Maturity	Jun. 13, 2023
Derivative, Notional Amount	$ 9,000,000
Derivative, Average Forward Contractual Exchange Rate | $ / $	22.42
Derivative, Fair Value	$ 575,000

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Derivative Instruments - Fair Market Value of All Outstanding Peso Forward Contracts (Details) - USD ($) $ in Thousands	Mar. 27, 2022	Jun. 27, 2021
Mexican Peso Forward Contracts | Other Current Assets
Not Designated as Hedging Instruments:
Fair market value of derivative instruments	$ 743	$ 243

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Derivative Instruments - Pre-Tax Effects of the Peso Forward Contracts (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 27, 2022	Mar. 28, 2021	Mar. 27, 2022	Mar. 28, 2021
Pre-tax effects of the Mexican peso forward contracts
Unrealized Gain	$ 724	$ 32	$ 500	$ 512
Not Designated as Hedging Instrument | Other Expense, Net
Pre-tax effects of the Mexican peso forward contracts
Realized Gain	83	11	267	87
Realized (Loss)	(18)		(67)
Unrealized Gain	$ 724	$ 32	$ 500	$ 512

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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	Mar. 27, 2022 USD ($)
Level 1
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total Assets at Fair Value	$ 2,561
Level 1 | Fixed Income Funds
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total Assets at Fair Value	1,040
Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total Assets at Fair Value	1,705
Level 2 | Mexican Peso Forward Contracts
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total Assets at Fair Value	743
Stock Index Funds | Level 1 | Small Cap
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total Assets at Fair Value	169
Stock Index Funds | Level 1 | Mid Cap
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total Assets at Fair Value	345
Stock Index Funds | Level 1 | Large Cap
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total Assets at Fair Value	492
Stock Index Funds | Level 1 | International
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total Assets at Fair Value	515
Cash and Cash Equivalents | Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total Assets at Fair Value	$ 962

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Investment in Joint Ventures and Majority Owned Subsidiaries (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 27, 2022	Mar. 28, 2021	Mar. 27, 2022	Mar. 28, 2021
Schedule Of Equity Method Investments [Line Items]
Equity earnings (loss) of joint ventures	$ 577,000	$ (56,000)	$ 941,000	$ 1,844,000
Payments to acquire interest in joint venture			75,000	100,000
VAST LLC | BRAZIL
Schedule Of Equity Method Investments [Line Items]
Payments to acquire interest in joint venture			$ 225,000	$ 300,000
VAST LLC | MINDA-VAST ACCESS SYSTEMS
Schedule Of Equity Method Investments [Line Items]
Percentage ownership interest in equity method investment	50.00%		50.00%
STRATTEC | ADAC-STRATTEC LLC
Schedule Of Equity Method Investments [Line Items]
Percentage ownership interest in less than wholly owned consolidated subsidiary	51.00%	51.00%	51.00%	51.00%
Majority owned subsidiary, impact on net income			$ 98,000	$ 3,400,000
Majority owned subsidiary, impact on net sales			$ 81,200,000	$ 98,700,000
STRATTEC | 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%	80.00%	80.00%
Majority owned subsidiary, impact on net income			$ 3,800,000	$ 4,700,000
Majority owned subsidiary, impact on net sales			$ 68,300,000	72,000,000.0
STRATTEC | VAST LLC
Schedule Of Equity Method Investments [Line Items]
Percentage ownership interest in equity method investment	33.33%		33.33%
Equity earnings (loss) of joint ventures			$ 941,000	1,800,000
Payments to acquire interest in joint venture			$ 75,000	$ 100,000
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%	49.00%	49.00%
Engineering, research, design and sales fee	$ 2,100,000	$ 2,100,000	$ 5,700,000	$ 6,900,000
Sales	$ 2,900,000	$ 2,700,000	$ 6,000,000.0	$ 9,100,000
ADAC | VAST LLC
Schedule Of Equity Method Investments [Line Items]
Percentage ownership interest in equity method investment	33.30%		33.30%
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%	20.00%	20.00%
WITTE | VAST LLC
Schedule Of Equity Method Investments [Line Items]
Percentage ownership interest in equity method investment	33.30%		33.30%
WITTE | STRATTEC
Schedule Of Equity Method Investments [Line Items]
Purchases	$ 200,000	$ 286,000	$ 615,000	$ 606,000

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Equity Earnings (Loss) of Joint Ventures (Details Textual)	Mar. 27, 2022
VAST LLC | STRATTEC
Schedule Of Equity Method Investments [Line Items]
Percentage ownership interest in equity method investment	33.33%

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Equity Earnings (Loss) of Joint Ventures - Summarized Statements of Operations (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 27, 2022	Mar. 28, 2021	Mar. 27, 2022	Mar. 28, 2021
Summarized statements of operations
Net sales	$ 115,943	$ 121,644	$ 329,192	$ 375,238
Cost of goods sold	101,305	102,990	287,072	311,832
Gross profit	14,638	18,654	42,120	63,406
Engineering, selling and administrative expenses	11,261	11,927	34,683	33,543
Income from operations	3,377	6,727	7,437	29,863
Other income (expense), net	285	455	320	(1,171)
Income before provision for income taxes and non-controlling interest	4,185	7,063	8,539	30,277
Provision for Income Taxes	50	1,153	342	4,721
Net income	4,135	5,910	8,197	25,556
STRATTEC’s Equity Earnings (Loss) of VAST LLC	577	(56)	941	1,844
VAST LLC | Equity Method Investment Summarized Financial Information
Summarized statements of operations
Net sales	55,281	51,748	153,454	160,511
Cost of goods sold	46,418	44,155	127,022	131,345
Gross profit	8,863	7,593	26,432	29,166
Engineering, selling and administrative expenses	7,575	7,684	24,075	22,936
Income from operations	1,288	(91)	2,357	6,230
Other income (expense), net	692	327	1,085	1,363
Income before provision for income taxes and non-controlling interest	1,980	236	3,442	7,593
Provision for Income Taxes	239	348	614	2,011
Net income	1,741	(112)	2,828	5,582
STRATTEC's Share of VAST LLC Net Income (Loss)	581	(37)	943	1,861
Intercompany Profit Elimination	(4)	(19)	(2)	(17)
STRATTEC’s Equity Earnings (Loss) of VAST LLC	$ 577	$ (56)	$ 941	$ 1,844

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Equity Earnings (Loss) of Joint Ventures - Summarize of Related Party Transaction (Details) - VAST LLC - Equity Method Investee - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 27, 2022	Mar. 28, 2021	Mar. 27, 2022	Mar. 28, 2021
Schedule Of Equity Method Investments [Line Items]
Sales to VAST LLC	$ 316	$ 1,059	$ 1,533	$ 3,273
Purchases from VAST LLC	6	139	157	340
Expenses Charged to VAST LLC	134	265	512	1,361
Expenses Charged from VAST LLC	$ 151	$ 302	$ 593	$ 953

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Leases (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 27, 2022	Mar. 28, 2021	Mar. 27, 2022	Mar. 28, 2021
Leases [Abstract]
Operating lease, existence of option to extend			true
Operating lease, renewal Term	5 years		5 years
Operating lease, expiration term			2023-10
Operating lease expense	$ 122,000	$ 119,000	$ 362,000	$ 354,000

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Leases - Schedule of Operating Lease Asset and Obligation Included in Condensed Consolidated Balance Sheets (Details) $ in Thousands	Mar. 27, 2022 USD ($)
Right-of Use Asset Under Operating Lease:
Operating lease right-of-use asset	$ 3,118
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Other long-term assets
Lease Obligation Under Operating Lease:
Current Liabilities: Accrued Liabilities: Other	$ 389
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Other
Other Long-Term Liabilities	$ 2,729
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Other long-term liabilities
Operating Lease, Liability	$ 3,118

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Leases - Schedule of Future Minimum Lease Payments Under Non-Cancelable Lease Including Options to Extend (Details) $ in Thousands	Mar. 27, 2022 USD ($)
Leases [Abstract]
2022 (for the remaining three months)	$ 122
2023	497
2024	509
2025	522
2026	535
Thereafter	1,299
Total Future Minimum Lease Payments	3,484
Less: Imputed Interest	(366)
Total Lease Obligations	$ 3,118

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Leases - Schedule of Cash Flow Information Related to Operating Lease (Details) - USD ($) $ in Thousands	9 Months Ended
	Mar. 27, 2022	Mar. 28, 2021
Operating Cash Flows:
Cash Paid Related to Operating Lease Obligation	$ 362	$ 354

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Leases - Schedule of Weighted Average Lease Term and Discount Rate for Operating Lease (Details)	Mar. 27, 2022
Leases [Abstract]
Weighted Average Remaining Lease Term (in years)	6 years 7 months 6 days
Weighted Average Discount Rate	3.30%

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Credit Facilities (Details Textual) - USD ($)	9 Months Ended	10 Months Ended	11 Months Ended
	Mar. 27, 2022	Mar. 27, 2022	May 31, 2021
Line Of Credit Facility [Line Items]
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%
STRATTEC Credit Facility
Line Of Credit Facility [Line Items]
Secured revolving credit facility	$ 40,000,000	$ 40,000,000
Credit facility maturity date	Aug. 01, 2024
Interest rate on borrowings under the credit facility		LIBOR plus 1.25 percent or the bank’s prime rate.	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		1.25%	1.00%
ADAC-STRATTEC Credit Facility
Line Of Credit Facility [Line Items]
Secured revolving credit facility	$ 25,000,000	$ 25,000,000
Credit facility maturity date	Aug. 01, 2024
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	Mar. 27, 2022	Jun. 27, 2021
Line Of Credit Facility [Line Items]
Outstanding Borrowing	$ 12,000	$ 12,000
ADAC-STRATTEC Credit Facility
Line Of Credit Facility [Line Items]
Outstanding Borrowing	$ 12,000	$ 12,000

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Credit Facilities - Schedule of Average Outstanding Borrowings and the Weighted Average Interest Rate (Details) - USD ($) $ in Thousands	9 Months Ended
	Mar. 27, 2022	Mar. 28, 2021
STRATTEC Credit Facility
Line Of Credit Facility [Line Items]
Average Outstanding Borrowings	$ 421	$ 11,436
Weighted Average Interest Rate	1.90%	1.20%
ADAC-STRATTEC Credit Facility
Line Of Credit Facility [Line Items]
Average Outstanding Borrowings	$ 14,784	$ 15,000
Weighted Average Interest Rate	1.40%	1.40%

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Commitments and Contingencies (Details Textual) - USD ($) $ in Thousands	Mar. 27, 2022	Jun. 27, 2021
Commitments And Contingencies Disclosure [Abstract]
Environmental	$ 1,390	$ 1,390

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Shareholders' Equity - Summary of Activity Impacting Shareholders' Equity (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 27, 2022	Mar. 28, 2021	Mar. 27, 2022	Mar. 28, 2021
Summary of activity impacting shareholders' equity
Beginning Balance	$ 217,071	$ 201,473	$ 213,433	$ 175,441
Net Income	4,135	5,910	8,197	25,556
Dividend Declared – Non- controlling Interests of Subsidiaries	(600)		(1,200)	(490)
Translation Adjustments	685	(697)	(571)	5,419
Stock Based Compensation	239	193	873	775
Pension and Postretirement Adjustment, Net of Tax	79	69	238	208
Stock Option Exercises	227	526	827	526
Employee Stock Purchases	18	20	57	59
Ending Balance	221,854	207,494	221,854	207,494
Common Stock
Summary of activity impacting shareholders' equity
Beginning Balance	75	74	74	74
Stock Option Exercises			1
Ending Balance	75	74	75	74
Capital in Excess of Par Value
Summary of activity impacting shareholders' equity
Beginning Balance	100,768	98,571	99,512	97,977
Stock Based Compensation	239	193	873	775
Stock Option Exercises	227	526	826	526
Employee Stock Purchases	10	13	33	25
Ending Balance	101,244	99,303	101,244	99,303
Retained Earnings
Summary of activity impacting shareholders' equity
Beginning Balance	237,967	227,061	234,472	211,940
Net Income	3,146	4,485	6,641	19,606
Ending Balance	241,113	231,546	241,113	231,546
Accumulated Other Comprehensive Loss
Summary of activity impacting shareholders' equity
Beginning Balance	(17,391)	(17,492)	(16,797)	(22,113)
Translation Adjustments	312	(288)	(441)	4,194
Pension and Postretirement Adjustment, Net of Tax	79	69	238	208
Ending Balance	(17,000)	(17,711)	(17,000)	(17,711)
Treasury Stock
Summary of activity impacting shareholders' equity
Beginning Balance	(135,599)	(135,629)	(135,615)	(135,656)
Employee Stock Purchases	8	7	24	34
Ending Balance	(135,591)	(135,622)	(135,591)	(135,622)
Non-Controlling Interest
Summary of activity impacting shareholders' equity
Beginning Balance	31,251	28,888	31,787	23,219
Net Income	989	1,425	1,556	5,950
Dividend Declared – Non- controlling Interests of Subsidiaries	(600)		(1,200)	(490)
Translation Adjustments	373	(409)	(130)	1,225
Ending Balance	$ 32,013	$ 29,904	$ 32,013	$ 29,904

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Revenue from Contracts with Customers - Revenue by Product Group (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 27, 2022	Mar. 28, 2021	Mar. 27, 2022	Mar. 28, 2021
Product Information [Line Items]
Revenue	$ 115,943	$ 121,644	$ 329,192	$ 375,238
Door Handles & Exterior Trim
Product Information [Line Items]
Revenue	29,313	29,790	81,211	98,694
Keys & Locksets
Product Information [Line Items]
Revenue	28,230	28,616	77,725	91,488
Power Access
Product Information [Line Items]
Revenue	23,675	26,209	68,344	72,039
Latches
Product Information [Line Items]
Revenue	12,760	13,125	34,782	41,303
Aftermarket & OE Service
Product Information [Line Items]
Revenue	11,421	10,969	34,731	34,077
Driver Controls
Product Information [Line Items]
Revenue	8,525	10,822	25,317	31,144
Other
Product Information [Line Items]
Revenue	$ 2,019	$ 2,113	$ 7,082	$ 6,493

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Revenue from Contracts with Customers - Revenue by Customer or Customer Group (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 27, 2022	Mar. 28, 2021	Mar. 27, 2022	Mar. 28, 2021
Entity Wide Revenue Major Customer [Line Items]
Revenue	$ 115,943	$ 121,644	$ 329,192	$ 375,238
General Motors Company
Entity Wide Revenue Major Customer [Line Items]
Revenue	34,738	34,543	91,551	111,322
Ford Motor Company
Entity Wide Revenue Major Customer [Line Items]
Revenue	19,162	21,722	57,927	54,356
Stellantis (Formerly Fiat Chrysler Automobiles)
Entity Wide Revenue Major Customer [Line Items]
Revenue	23,047	21,685	62,657	69,919
Commercial and Other OEM Customers
Entity Wide Revenue Major Customer [Line Items]
Revenue	16,518	17,241	50,120	58,272
Tier 1 Customers
Entity Wide Revenue Major Customer [Line Items]
Revenue	15,279	17,289	42,861	53,444
Hyundai / Kia
Entity Wide Revenue Major Customer [Line Items]
Revenue	$ 7,199	$ 9,164	$ 24,076	$ 27,925

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Other Income (Expense), Net - Summary of Other Income (Expense), Net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 27, 2022	Mar. 28, 2021	Mar. 27, 2022	Mar. 28, 2021
Other Income and Expenses [Abstract]
Foreign Currency Transaction (Loss) Gain	$ (319)	$ 386	$ (76)	$ (1,926)
Unrealized Gain	724	32	500	512
Realized Gain on Peso Forward Contracts, net	65	11	200	87
Pension and Postretirement Plans Cost	(120)	(106)	(360)	(314)
Rabbi Trust (Loss) Gain	(130)	154	(60)	472
Other	65	(22)	116	(2)
Other Income (Expense), net	$ 285	$ 455	$ 320	$ (1,171)

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Income Taxes (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 27, 2022	Mar. 28, 2021	Mar. 27, 2022	Mar. 28, 2021
Income Tax Disclosure [Abstract]
Effective income tax rate	1.20%	16.30%	4.00%	15.60%
Income tax benefit from global intangible low-taxed income				$ 675,000
Income tax adjustments	$ 740,000		$ 1,000,000.0
Percentage of effective income tax rate reconciliation excluding adjustment	18.90%		15.70%

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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		9 Months Ended
	Mar. 27, 2022	Mar. 28, 2021	Mar. 27, 2022	Mar. 28, 2021
Reconciliation of the components of the basic and diluted per share
Net Income, Basic Earnings Per Share	$ 3,146	$ 4,485	$ 6,641	$ 19,606
Net Income, Diluted Earnings Per Share	$ 3,146	$ 4,485	$ 6,641	$ 19,606
Basic Earnings Per Share, Number of Shares	3,871	3,797	3,856	3,783
Stock Option and Restricted Stock Awards, Number of Shares	45	89	50	56
Diluted Earnings Per Share, Number of Shares	3,916	3,886	3,906	3,839
Basic Earnings Per Share	$ 0.81	$ 1.18	$ 1.72	$ 5.18
Diluted Earnings Per Share	$ 0.80	$ 1.15	$ 1.70	$ 5.11

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Earnings Per Share (Details Textual) - shares	9 Months Ended
	Mar. 27, 2022	Mar. 28, 2021
Stock Options
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from earnings per share computation	9,010	9,010

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Stock-Based Compensation (Details Textual) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Mar. 27, 2022	Mar. 27, 2022	Mar. 28, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share based compensation arrangement by share based payment award number of shares authorized	2,000,000	2,000,000
Shares of common stock available for grant	177,959	177,959
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	$ 1.6	$ 1.6
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

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Stock-Based Compensation - Summary of Stock Option Activity Under Our Stock Incentive Plan (Details) $ / shares in Units, $ in Thousands	9 Months Ended
	Mar. 27, 2022 USD ($) $ / shares shares
Share Based Compensation [Abstract]
Shares, Beginning Balance | shares	72,624
Shares, Exercised | shares	31,452
Shares, Ending Balance | shares	41,172
Shares, Exercisable | shares	41,172
Weighted Average Exercise Price, Beginning Balance | $ / shares	$ 37.65
Weighted Average Exercise Price, Exercised | $ / shares	26.28
Weighted Average Exercise Price, Ending Balance | $ / shares	46.34
Weighted Average Exercise Price, Exercisable | $ / shares	$ 46.34
Weighted Average Remaining Contractual Term, Outstanding	1 year 6 months
Weighted Average Remaining Contractual Term, Exercisable, Outstanding	1 year 6 months
Aggregate Intrinsic Value, Outstanding | $	$ 49
Aggregate Intrinsic Value, Exercisable | $	$ 49

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Stock-Based Compensation - Intrinsic Value of Stock Options Exercised and the Fair Value of Stock Options Vested (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 27, 2022	Mar. 28, 2021	Mar. 27, 2022	Mar. 28, 2021
Intrinsic value of stock options exercised and the fair value of stock options vested
Intrinsic Value of Options Exercised	$ 120	$ 555	$ 451	$ 555

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Stock-Based Compensation - Summary of Restricted Stock Activity Under Our Stock Incentive Plan (Details) - Restricted stock	9 Months Ended
	Mar. 27, 2022 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Nonvested, Shares Beginning Balance | shares	81,975
Granted, Shares | shares	43,875
Vested, Shares | shares	(38,000)
Forfeited, Shares | shares	(2,750)
Nonvested, Shares Ending Balance | shares	85,100
Nonvested, Weighted Average Grant Date Fair Value Beginning Balance | $ / shares	$ 23.31
Granted, Weighted Average Grant Date Fair Value | $ / shares	42.50
Vested, Weighted Average Grant Date Fair Value | $ / shares	25.56
Forfeited, Weighted Average Grant Date Fair Value | $ / shares	32.70
Nonvested, Weighted Average Grant Date Fair Value Ending Balance | $ / shares	$ 31.89

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Pension and Postretirement Benefits (Details Textual) - USD ($)	9 Months Ended
	Mar. 27, 2022	Jun. 27, 2021
Defined Benefit Plan Disclosure [Line Items]
Rabbi Trust Assets - SERP	$ 3,500,000	$ 3,600,000
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		9 Months Ended
	Mar. 27, 2022	Mar. 28, 2021	Mar. 27, 2022	Mar. 28, 2021
SERP Benefits
COMPONENTS OF NET PERIODIC BENEFIT COST:
Service Cost	$ 15	$ 16	$ 46	$ 47
Interest Cost	15	10	40	31
Amortization of Unrecognized Net Loss	20	3	63	8
Net Periodic Benefit Cost	50	29	149	86
Postretirement Benefits
COMPONENTS OF NET PERIODIC BENEFIT COST:
Service Cost	3	3	9	10
Interest Cost	4	4	10	12
Amortization of Prior Service Credit		(2)		(6)
Amortization of Unrecognized Net Loss	82	91	247	269
Net Periodic Benefit Cost	$ 89	$ 96	$ 266	$ 285

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Accumulated Other Comprehensive Loss - Summary of Changes in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 27, 2022	Mar. 28, 2021	Mar. 27, 2022	Mar. 28, 2021
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	$ (217,071)	$ (201,473)	$ (213,433)	$ (175,441)
Other Comprehensive Income (Loss) Before Reclassifications	(1,291)	697	(35)	(5,419)
Income Tax	606		606
Net Other Comprehensive Income (Loss) Before Reclassifications	(685)	697	571	(5,419)
Reclassifications:
Prior Service Credits		2		6
Unrecognized Net Loss	(102)	(94)	(310)	(277)
Total Reclassifications Before Tax	(102)	(92)	(310)	(271)
Reclassifications, Income Tax	23	23	72	63
Net Reclassifications	(79)	(69)	(238)	(208)
Other Comprehensive Income	(764)	628	333	(5,627)
Ending balance	(221,854)	(207,494)	(221,854)	(207,494)
Foreign Currency Translation Adjustments
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	15,438	15,654	14,685	20,136
Other Comprehensive Income (Loss) Before Reclassifications	(1,291)	697	(35)	(5,419)
Income Tax	606		606
Net Other Comprehensive Income (Loss) Before Reclassifications	(685)	697	571	(5,419)
Reclassifications:
Other Comprehensive Income	(685)	697	571	(5,419)
Other Comprehensive Income Attributable to Non- Controlling Interest	(373)	409	130	(1,225)
Ending balance	15,126	15,942	15,126	15,942
Retirement and Postretirement Benefit Plans
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	1,953	1,838	2,112	1,977
Reclassifications:
Prior Service Credits		2		6
Unrecognized Net Loss	(102)	(94)	(310)	(277)
Total Reclassifications Before Tax	(102)	(92)	(310)	(271)
Reclassifications, Income Tax	23	23	72	63
Net Reclassifications	(79)	(69)	(238)	(208)
Other Comprehensive Income	(79)	(69)	(238)	(208)
Ending balance	1,874	1,769	1,874	1,769
Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	17,391	17,492	16,797	22,113
Reclassifications:
Ending balance	17,000	17,711	17,000	17,711
AOCI Including Portion Attributable to Noncontrolling Interest
Reclassifications:
Other Comprehensive Income	(764)	628	333	(5,627)
AOCI Attributable to Noncontrolling Interest
Reclassifications:
Other Comprehensive Income Attributable to Non- Controlling Interest	$ (373)	$ 409	$ 130	$ (1,225)