Strattec Security Corporation delivered a solid Q3 FY2025, underscored by meaningful margin expansion, robust operating cash flow, and progress on its strategic transformation. Revenue stood at $144.1 million with gross profit of $23.1 million and a gross margin of 16.0%, up 560 basis points year over year, driven by pricing actions, FX benefits, and ongoing cost efficiencies. Net income reached $5.4 million ($1.32 per diluted share), and Adjusted EBITDA was $12.9 million (8.9% margin), a substantial uplift from the prior-year period. Management attributed the margin improvement to structural cost reductions, disciplined pricing, and currency benefits, even as tariff headwinds added approximately $0.8 million of tariff costs in the quarter and an anticipated annual tariff impact of $9–$12 million before mitigations.
The company’s transformation includes approximately $5 million in annualized savings from restructuring actions in Milwaukee and Mexico, with full run-rate benefits expected in Q1 2026. STRT’s liquidity remains robust, finishing the quarter with about $62.1 million in cash and roughly $47 million available under its revolver, enabling continued investments in product programs, productivity, and IT infrastructure while maintaining an orderly balance sheet. Capex guidance for the year sits around $7.5 million to $10 million, with some spending anticipated in Q4 as anticipated savings ramp.
Management signaled a cautiously constructive outlook: demand supported by higher-value content on existing programs, modest revenue growth aided by pricing/mix, and ongoing tariff mitigation across logistics, pricing discussions, and supply-chain shifts. The company also noted potential strategic actions, including the Milwaukee facility sale process, and remains focused on expanding margin discipline and operational agility to navigate volume and tariff uncertainty. Investors should monitor tariff trajectory and customer recoveries, the pace of restructuring benefits, and the execution of the go-forward CapEx and transformation agenda as key near-term drivers of profitability and cash flow.