Strattec Security Corp (STRT) 2025 Q4 法說會逐字稿

Greetings, and welcome to the Strattec Security Corporation fourth quarter fiscal year 2025 financial results conference call. (Operator Instructions) As a reminder, this conference is being recorded.

您好，歡迎參加 Strattec Security Corporation 2025 財年第四季財務業績電話會議。（操作員指示）提醒一下，本次會議正在錄音。

It is now my pleasure to introduce your host, Deb Pawlowski, investor relations for Strattec. Thank you. You may begin.

現在我很高興向大家介紹主持人、Strattec 投資者關係主管 Deb Pawlowski。謝謝。你可以開始了。

Thank you, and good morning, everyone. We greatly appreciate you joining us for Strattec's Fourth Quarter and Fiscal '25 Year-end financial results conference call. Joining me on the call this morning are Jennifer Slater, President and CEO; and Mathew Pauli, Vice President and Chief Financial Officer. Jen and Matt will review our financial results, the progress being made to transform Strattec and our expectations for fiscal 2026.

謝謝大家，早安。非常感謝您參加 Strattec 第四季和 25 財政年度年終財務業績電話會議。今天早上與我一起參加電話會議的還有總裁兼執行長珍妮佛‧斯萊特 (Jennifer Slater) 和副總裁兼財務長馬修‧保利 (Mathew Pauli)。Jen 和 Matt 將審查我們的財務表現、轉型 Strattec 所取得的進展以及我們對 2026 財年的預期。

You can find a copy of the press release and the slides that accompany our conversation today on the investor relations section of the company's website. If you are reviewing these slides, please turn to slide 2 for the safe harbor statement. As you are aware, we may make some forward-looking statements on this call during the formal discussion as well as during the Q&A.

您可以在公司網站的投資者關係部分找到新聞稿和我們今天談話的幻燈片的副本。如果您正在查看這些投影片，請翻到投影片 2 查看安全港聲明。如您所知，我們可能會在正式討論以及問答過程中對本次電話會議做出一些前瞻性陳述。

These statements apply to future events that are subject to risks and uncertainties as well as other factors that could cause actual results to differ materially from what is stated on today's call. These risks and uncertainties and other factors are discussed in the earnings release as well as with other documents filed by the company with the Securities and Exchange Commission.

這些聲明適用於受風險和不確定性以及可能導致實際結果與今天電話會議所述結果存在重大差異的其他因素影響的未來事件。這些風險、不確定性和其他因素在收益報告以及公司向美國證券交易委員會提交的其他文件中進行了討論。

You can find these documents on our website as well. I want to also point out that during today's call, we will discuss some non-GAAP measures, which we believe will be useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP.

您也可以在我們的網站上找到這些文件。我還想指出，在今天的電話會議中，我們將討論一些非公認會計準則指標，我們認為這些指標將有助於評估我們的績效。您不應孤立地考慮呈現這些附加信息，也不應將其視為根據 GAAP 編制的結果的替代品。

We have provided reconciliations of non-GAAP to comparable GAAP measures in the tables accompanying the earnings release and slides. So with that, if you would please turn to slide 3, I will turn it over to Jen to begin. Jen?

我們在收益報告和幻燈片附帶的表格中提供了非 GAAP 與可比較 GAAP 指標的對帳。因此，請翻到投影片 3，我將把它交給 Jen 開始。珍？

Thank you, Deb, and welcome, everyone. We ended fiscal 2025 on a strong note with solid sales growth, expanded margins, strong cash generation and a much better business from where we were at the beginning of the fiscal year when I joined the company as CEO. Our success was a result of our team, whom I want to thank for their energy, perseverance and hard work.

謝謝你，Deb，歡迎大家。我們以強勁的業績結束了 2025 財年，銷售額穩步增長，利潤率不斷提高，現金流強勁，業務狀況也比我加入公司擔任執行長時財年初的狀況好得多。我們的成功歸功於我們的團隊，我要感謝他們的活力、毅力和辛勤工作。

We covered a lot of ground and underwent significant change in fiscal '25. We have a refreshed and energized executive team. We added critical talent throughout the organization and continue to do so. We simplified our operations and reduced headcount by 15%. We implemented an operating cadence and created communication channels that had not existed in the organization before.

我們在 25 財年取得了巨大進展並經歷了重大變革。我們擁有一支充滿活力、幹勁十足的執行團隊。我們在整個組織中增加了關鍵人才，並將繼續這樣做。我們簡化了營運並將員工人數減少了 15%。我們實施了一種營運節奏並創建了組織中以前不存在的溝通管道。

We also began the work to reshape our product portfolio, and we advanced our plans to modernize our manufacturing operations. These efforts were clearly demonstrated in our financial results, which I will now touch on for the quarter and the year. We delivered very strong cash generation as we generated $30 million in cash from operations for the quarter and $71 million for the fiscal year.

我們也開始重塑我們的產品組合，並推進我們的製造業務現代化計劃。這些努力在我們的財務表現中得到了清晰的體現，現在我將談談本季和全年的財務表現。我們實現了非常強勁的現金創造，本季營運現金流為 3,000 萬美元，本財年營運現金流為 7,100 萬美元。

In addition to achieving stronger cash earnings, we improved our working capital velocity and benefited from some one-time opportunities to unlock value from the balance sheet that Matt will discuss later. Revenue grew 6% in the quarter and 5% for the year. Higher sales and favorable foreign currency exchange, combined with the initial benefits from our restructuring efforts helped to drive 370 basis points of gross margin expansion for the quarter as well as 280 basis points of margin improvement for the year.

除了實現更強勁的現金收益外，我們還提高了營運資本週轉率，並從一些一次性機會中受益，以從資產負債表中釋放價值，馬特稍後將討論這一點。本季營收成長 6%，全年營收成長 5%。銷售額成長、外匯匯率有利，加上重組努力帶來的初步效益，推動本季毛利率擴大 370 個基點，全年利潤率提高 280 個基點。

Fourth quarter EBITDA margin of 8.5% also demonstrated our continued progress through the year but was up against a tough comparator in the prior year that benefited from a onetime engineering cost recovery of $4.8 million. Our efforts resulted in EBITDA margin expansion of 220 basis points for the year to 7.7%. Please turn to slide 4. Our priorities for fiscal 2025 were to create shareholder value, which we believe our transformation actions to date have accomplished across key focus areas of the business.

第四季 8.5% 的 EBITDA 利潤率也證明了我們全年的持續進步，但與前一年相比，這是一個艱難的比較對象，因為去年受益於 480 萬美元的一次性工程成本回收。我們的努力使全年 EBITDA 利潤率擴大 220 個基點，達到 7.7%。請翻到幻燈片 4。我們 2025 財年的首要任務是創造股東價值，我們相信迄今為止我們的轉型行動已經在業務的關鍵重點領域實現了這一目標。

This is demonstrated by the significant progress we have made to improve our underlying operations, unlock working capital and build a strong team. As we move into fiscal year '26, we will continue to focus on these same priorities. While we did unlock most of the low-hanging fruit, we still believe we have opportunity to improve our margin profile.

我們在改善基礎營運、釋放營運資金和建立強大團隊方面取得的重大進展就證明了這一點。隨著我們進入 26 財年，我們將繼續關注這些相同的優先事項。雖然我們確實解鎖了大部分唾手可得的成果，但我們仍然相信我們有機會改善我們的利潤狀況。

We are also focusing on leveraging our product expertise in key areas of the business such as digital key and power access to expand our customer base and facilitate growth. Our healthy balance sheet will help us weather any weakening market condition and continue to invest in the growth of the business and create value for our shareholders.

我們也致力於利用我們在數位金鑰和電源存取等關鍵業務領域的產品專業知識來擴大我們的客戶群並促進成長。我們健康的資產負債表將幫助我們抵禦任何疲軟的市場狀況，並繼續投資於業務成長並為股東創造價值。

If you will turn to slide 5, you can see that there were a number of drivers to sales growth in both the quarter and the year. The fourth quarter benefited from our strategic pricing initiatives as well as higher demand. Throughout the year, we have had the advantage of several new program launches as well as being well positioned on better selling platforms.

如果您翻到投影片 5，您會發現本季和全年的銷售成長都受到多種驅動因素​​的影響。第四季度受益於我們的策略定價措施以及更高的需求。在這一年中，我們不僅推出了多項新計劃，還在更好的銷售平台上佔據了有利地位。

We are expecting our growth from new vehicle launches to moderate as we are in between significant launch cycles with our existing customers. Due to the long-cycle nature of our business, we are actively working today to be included on model year '29 and '30 platforms. We are also working to broaden our reach to a larger customer set than we have addressed historically.

由於我們正處於與現有客戶的重要產品發布週期之間，我們預計新車發布的成長將放緩。由於我們業務的長週期性質，我們目前正在積極努力，以納入 29 年和 30 年車型平台。我們也致力於擴大我們的覆蓋範圍，覆蓋比以往更大的客戶群。

We are excited about the future for Strattec and expect that over the long term, we can continue to drive a growing stronger margin profile business with greater predictability and earnings power.

我們對 Strattec 的未來充滿期待，並期望從長遠來看，我們能夠繼續推動利潤率業務的成長，並具有更高的可預測性和獲利能力。

Let me now turn it over to Matt.

現在讓我把它交給馬特。

Thanks, Jen, and good morning, everyone. Let's begin with slide 6. Fourth quarter gross profit increased to $25.4 million and gross margin expanded by 370 basis points to 16.7%. Gross profit improvement was the result of a $3 million benefit from a stronger US dollar, strategic pricing actions, $1.7 million in tooling gains, higher production volumes and $1.3 million of restructuring savings.

謝謝，Jen，大家早安。讓我們從第 6 張投影片開始。第四季毛利增至 2,540 萬美元，毛利率擴大 370 個基點至 16.7%。毛利的成長得益於美元走強帶來的 300 萬美元收益、策略性定價行動、170 萬美元的工具收益、更高的產量以及 130 萬美元的重組節省。

These gains more than offset $1.6 million of net tariff expenses stemming from recent changes in US trade policy and higher labor costs in Mexico, albeit on a lower headcount. Based on the currently enacted tariff rates, we estimate that the annual cost increase is between $5 million to $7 million before any mitigation efforts.

這些收益足以抵消美國貿易政策近期變化和墨西哥勞動力成本上升（儘管員工人數較少）而產生的 160 萬美元淨關稅支出。根據目前實施的關稅稅率，我們估計在採取任何緩解措施之前，每年的成本增加在 500 萬至 700 萬美元之間。

However, we have taken steps to change our logistic routes, review our supply chain and implement price increases or tariff recoveries from customers. Our tariff mitigation efforts have continued after our fiscal year-end. And as of today, we have line of sight to recover the majority of the cost, but the recovery of tariff costs will lag the associated expenses.

然而，我們已採取措施改變物流路線，審查供應鏈，並向客戶實施價格上漲或關稅回收。我們的關稅減免努力在財政年度結束後仍在繼續。截至今天，我們預計將收回大部分成本，但關稅成本的收回將落後於相關費用的收回。

For the full fiscal year, gross margin improved by 280 basis points, reflecting these same drivers, pricing actions, cost optimization and FX, partially offset by elevated labor costs in Mexico and ongoing tariff headwinds. Turning to slide 7. Selling, administration -- administrative and engineering expenses or SAE, was $16.9 million.

在整個財年，毛利率提高了 280 個基點，反映了相同的驅動因素、定價行動、成本優化和外匯，但被墨西哥勞動力成本上升和持續的關稅阻力部分抵消。翻到幻燈片 7。銷售、管理－行政和工程費用或 SAE 為 1,690 萬美元。

Prior year SAE benefited from $4.8 million of onetime engineering recoveries that makes the year-over-year comparison difficult. What's important to take away is that we are holding our SAE steady at about 11% of sales. The absolute spend reflects deliberate investments in our transformation initiatives as well as a $2.2 million increase related to incentive compensation and bonus expense that were the result of strong financial performance for the year.

去年，SAE 受益於 480 萬美元的一次性工程回收，這使得同比比較變得困難。重要的是，我們的 SAE 穩定保持在銷售額的 11% 左右。絕對支出反映了我們對轉型計劃的深思熟慮的投資，以及與激勵薪酬和獎金支出相關的 220 萬美元的增長，這是本年度強勁財務業績的結果。

For the fiscal year, our SAE included $6.7 million of incremental incentive compensation costs given our financial performance, $1 million in additional executive transition costs and $1 million of business transformation costs. Let's move to slide 8, where we summarize our profitability. Net income attributable to Strattec for the quarter on both a GAAP and an adjusted basis declined primarily due to the prior year's engineering recovery benefit that I mentioned earlier and the increase in bonus provision this year on improved performance.

在本財政年度，我們的 SAE 包括根據我們的財務表現計算的 670 萬美元增量激勵薪酬成本、100 萬美元額外高階主管過渡成本和 100 萬美元業務轉型成本。讓我們轉到幻燈片 8，其中我們總結了我們的盈利能力。本季度按 GAAP 和調整後計算的 Strattec 淨收入均有所下降，這主要是由於我之前提到的上一年的工程恢復收益以及今年因業績提高而增加的獎金撥備。

Adjusted EBITDA was $13 million, representing an adjusted EBITDA margin of 8.5%. Our results reflect the team's commitment to delivering sustainable margin improvement. Let me point out that over the long term, we believe the business model would suggest a low-teen EBITDA margin. Now turning to slide 9, which highlights our cash flow, balance sheet and capital priorities.

調整後的 EBITDA 為 1,300 萬美元，調整後的 EBITDA 利潤率為 8.5%。我們的業績反映了團隊致力於實現可持續利潤率提高的承諾。我要指出的是，從長遠來看，我們認為該商業模式將意味著較低的 EBITDA 利潤率。現在翻到第 9 張投影片，重點介紹我們的現金流量、資產負債表和資本優先事項。

Operating cash flow was strong for the quarter at $30.2 million, a 55% improvement over the same period last year. This reflects higher cash earnings, disciplined working capital management, the collection of about $5 million of historical VAT balances in Mexico and the benefit of timing on receivables. During the quarter, we also had an $11 million reduction in inventory levels, partially attributable to reduced in-transit inventory.

本季經營現金流強勁，達到 3,020 萬美元，比去年同期成長 55%。這反映了更高的現金收益、嚴格的營運資本管理、在墨西哥收取約 500 萬美元的歷史增值稅餘額以及應收帳款的時間優勢。本季度，我們的庫存水準也減少了 1,100 萬美元，部分原因是運輸途中庫存減少。

While this benefited working capital, I should point out that we will need to increase some inventory to maintain timely deliveries to our customers. For the year, operating cash flow reached $71.7 million, a record for the company. We had the one-time opportunities captured during the year that I mentioned earlier, which makes repeating this performance a challenge until we gain more scale.

雖然這對營運資金有利，但我要指出的是，我們需要增加一些庫存以確保及時向客戶交貨。全年營業現金流達 7,170 萬美元，創下公司歷史新高。正如我之前提到的，我們在這一年中抓住了一次性的機會，這使得在我們獲得更大的規模之前重複這一表現成為一個挑戰。

Year-to-date, capital expenditures totaled $7.2 million, consistent with our focus on new product programs, productivity enhancements and IT infrastructure upgrades. This resulted in free cash flow for the year of $64.5 million. We ended the year with a very healthy cash position of $84.6 million. We also have approximately $52 million available under our revolving credit facilities.

年初至今，資本支出總額為 720 萬美元，這與我們對新產品計劃、生產力提高和 IT 基礎設施升級的關註一致。這使得當年的自由現金流達到 6,450 萬美元。我們以 8460 萬美元的非常健康的現金狀況結束了這一財年。我們的循環信貸額度下還有大約 5,200 萬美元可用。

Our capital priorities in the near term are to create organic growth through investment in our commercial initiatives, drive operational improvements through modernization and continue new product innovation. We are also being conservative with our cash through these uncertain times, including moderated market conditions.

我們近期的資本重點是透過投資商業計劃實現有機成長，透過現代化推動營運改善並繼續進行新產品創新。在這些不確定的時期，包括市場狀況放緩，我們對現金也採取了保守的態度。

Over the longer term, once we've established a greater amount of predictability in the business, we'll be in a better position to consider shareholder distributions as well as M&A. If you turn to slide 10, I'll outline in general, our expectations for fiscal 2026, given our perspective on our end markets as we know it today. As most of you are aware, we are a very long-cycle business and the work we are doing today, as Jen mentioned, will be apparent in our model years 2029 and beyond.

從長遠來看，一旦我們在業務中建立了更高的可預測性，我們將能夠更好地考慮股東分配以及併購。如果您翻到第 10 張投影片，我將根據我們對目前終端市場的看法，概述我們對 2026 財年的預期。正如你們大多數人所知，我們是一家週期非常長的企業，正如 Jen 所提到的，我們今天所做的工作將在 2029 年及以後的模式年中顯現出來。

In the meantime, our sales will generally follow North American OEM production volumes given that we will lap several key launches that we benefited from in fiscal '25. Current third-party industry projections estimate that North American automotive production for our fiscal 2026 will be lower by about 5% to 6%, with softness more prevalent in the second half of the fiscal year.

同時，由於我們將在 25 財年推出幾款讓我們受益的關鍵產品，因此我們的銷售量將大致跟隨北美 OEM 的產量。目前第三方產業預測估計，2026財年北美汽車產量將下降約5%至6%，且疲軟趨勢將在本財年下半年更加普遍。

We expect that we will still benefit from our recent pricing actions, especially in the first half of the year. We believe the business over the longer term and with sufficient volume is capable of achieving gross margins in the 18% to 20% range. Until then, we will continue to focus on what we can control with margins, productivity, working capital and cash generation.

我們預計我們仍將受益於最近的定價行動，尤其是在今年上半年。我們相信，從長遠來看，如果業務量夠大，該業務的毛利率能夠達到 18% 至 20% 左右。在此之前，我們將繼續關注利潤、生產力、營運資金和現金產生方面我們可以控制的方面。

As I mentioned earlier, we had a very robust year from a cash generation that was boosted by several one-time opportunities. For 2026 and beyond, we expect to continue to generate solid cash from operations but at a more normalized rate. In summary, we are pleased with our solid financial progress and the momentum we are building through our strategic execution.

正如我之前提到的，由於幾次一次性機會的推動，我們今年的現金創造非常強勁。到 2026 年及以後，我們預計將繼續從營運中產生穩定的現金，但速度將更加正常。總而言之，我們對穩健的財務進展以及透過策略執行所建立的勢頭感到滿意。

With that, operator, we're ready to open the line for questions.

接線員，現在我們可以開始回答問題了。

(Operator Instructions) John Franzreb, Sidoti.

（操作員指示）John Franzreb，Sidoti。

Congratulations on another great quarter. I'd like to start with the transformation process, Jen. I'm curious how far along do you think you are in it? And how long do you think it will take before you're satisfied with the majority of it being completed?

恭喜您又一個出色的季度。我想從轉變過程開始，Jen。我很好奇，您認為自己已經走了多遠了？您認為需要多長時間才能完成大部分工作並感到滿意？

Thanks for the question, John. I would say we're still in the early innings of the transformation. We did have the opportunity this past fiscal year to address a lot of the low-hanging fruit. And now as we focus on further transformation items, they'll be more longer term in nature than what we were able to see in fiscal year '25.

謝謝你的提問，約翰。我想說我們仍處於轉型的初期。在過去的財政年度，我們確實有機會解決許多容易解決的問題。現在，當我們關注進一步的轉型項目時，它們的本質將比我們在 25 財年看到的更長期。

Okay. And when I look at that slide on slide page 4, I was wondering, does that mean you're considering exiting or divesting product lines? Is that a possibility in that process?

好的。當我看到第 4 頁的幻燈片時，我在想，這是否意味著您正在考慮退出或剝離產品線？在那個過程中有這種可能性嗎？

I think I can give one example. We had some products really our switch product line. And when we look at that market, there's less and less switches in the vehicle today. It's already a crowded market. We have other areas of our business like our power access products and our digital keyfobs that we feel we have a lot of opportunity.

我想我可以舉個例子。我們確實有一些產品是我們的開關產品線。當我們觀察這個市場時，我們發現如今車輛上的開關越來越少。這已經是一個擁擠的市場了。我們的其他業務領域，如電源接入產品和數位鑰匙扣，我們認為有很多機會。

So we're still supporting our customers that we have in production, but we're really refocusing our engineering efforts around those products that we feel have more growth and provide more value to our customers.

因此，我們仍在為生產中的客戶提供支持，但我們確實將工程工作的重點重新放在那些我們認為具有更大成長並為客戶帶來更多價值的產品上。

And I guess the other side of that question on the same slide is the larger customer set. I mean, -- I assume that means outside the automotive market. Can you give some examples of how you -- any hits yet or what you'd be looking at?

我想同一張投影片上該問題的另一面是更大的客戶群。我的意思是——我認為這意味著汽車市場之外。您能否舉一些例子來說明您目前所取得的成果或您正在關注的內容？

Yes. It doesn't necessarily mean outside of the automotive market, John. If you look at our customer concentration, we've been pretty concentrated around some of the larger North American customers. So we feel we have opportunity within automotive. And then the second layer of that is if you think about transportation, heavy vehicle off-road, there's opportunity for us there, too. But our priority really is to continue to start within automotive.

是的。這並不一定意味著汽車市場之外，約翰。如果你看一下我們的客戶集中度，你會發現我們主要集中在一些較大的北美客戶上。因此，我們覺得我們在汽車領域有機會。第二層是，如果你考慮交通運輸、重型越野車輛，我們也有機會。但我們的首要任務確實是繼續從汽車產業起步。

Okay. And I guess one last question, I'll get back into queue. On the gross margins, two great quarters of above 16%. I believe Matt said the long-term target is in the 18% to 20% range. What should we think about in fiscal 2026 is -- kind of a sustainable range for gross margin?

好的。我想還有最後一個問題，我會回到隊列。就毛利率而言，兩季均超過16%。我相信馬特所說的長期目標是在 18% 到 20% 的範圍內。我們應該考慮 2026 財年的毛利率是否處於可持續範圍？

Yes, John, this is Matt. I think we finished the year at 15% gross margin for the fiscal year. We provided a little bit of a view on what we see on a go-forward basis on slide 10, but revenues will be down to flattish in fiscal '26. So we do have the tailwinds in the first half of '26 around the pricing that we implemented in January, which is about $8 million and some of the restructuring actions. But on the flip side, we also have incremental costs around Mexico labor inflation, which we'll see in the back half of the year.

是的，約翰，這是馬特。我認為我們本財年的毛利率為 15%。我們在第 10 張投影片上對未來前景做了一些展望，但 26 財年的營收將會下降至持平。因此，我們在 26 年上半年確實遇到了順風，圍繞著我們在 1 月實施的定價，約為 800 萬美元，以及一些重組行動。但另一方面，墨西哥勞動力通膨也帶來了增量成本，我們將在今年下半年看到這一點。

I guess, Matt, I'm curious, this might be too soon to ask this question, but do you have a sense of what the incremental decremental margins of the company are going to look like after some of these actions are completed?

馬特，我想，我很好奇，現在問這個問題可能還為時過早，但是您是否知道在完成其中一些行動後，公司的增量遞減利潤率將會是什麼樣子？

Yes. We generally see incremental decremental margins in kind of the 25% to 30% range.

是的。我們通常看到的增量減量利潤率在 25% 到 30% 的範圍內。

Brian Sponheimer, Gabelli.

布萊恩·斯蓬海默，加貝利。

Congratulations. A couple of questions on the balance sheet and then just a couple on operations and product. So you mentioned that you want to invest organically, invest in new products, but it's $21 a share, $22 a share and $21.5 a share in cash. To what extent are you willing to hold that substantial amount of cash where -- basically, what's your cushion given the uncertain times?

恭喜。關於資產負債表有幾個問題，然後是營運和產品幾個問題。所以你提到你想進行有機投資，投資新產品，但每股價格為 21 美元、每股 22 美元和每股 21.5 美元現金。您願意在多大程度上持有大量現金——基本上，在不確定的時期，您的緩衝是什麼？

And then what is in excess of what you would consider to be the appropriate cushion for this business and then how you would think about the excess cash on the balance sheet?

那麼，您認為這項業務的適當緩衝超出了多少，您如何看待資產負債表上的多餘現金？

Yes. Thanks for the question, Brian. And Matt and I were expecting to get this question. Really where we are right now, the good thing is that we're not worried day-to-day about liquidity, which is really helping us focus on driving the improvement in the underlying business. There's a lot of uncertainty still in North America production.

是的。謝謝你的提問，布萊恩。馬特和我都預料到會問到這個問題。事實上，就我們目前的情況而言，好消息是我們不再每天擔心流動性問題，這確實有助於我們專注於推動基礎業務的改善。北美生產仍存在許多不確定性。

And as you heard Matt say, we really are following what those productions, what North America production schedule is. So when we have this market uncertainty, we feel very comfortable that we've got the cash that we have to help us continue to focus on the transformation of the business. So I think as we think about it, we really look to make sure that we've got stability in the underlying business, continuing to focus on the transformation.

正如馬特所說，我們確實在關注那些製作，並關注北美的製作計劃。因此，當我們面臨市場不確定性時，我們感到非常安心，因為我們擁有足夠的現金來幫助我們繼續專注於業務轉型。因此，我認為，當我們考慮這個問題時，我們確實希望確保基礎業務的穩定性，並繼續專注於轉型。

And then get through a little bit more certainty on what's going to happen in the market before we can get to a point where we're thinking about what is that cash cushion and how do we want to allocate longer-term shareholder value.

然後，在我們開始思考現金緩衝是什麼以及如何分配長期股東價值之前，我們需要對市場將會發生什麼有更明確的認識。

Okay. Understood. You mentioned investing in new products with digital keyfob as an area for growth. I'm curious how you see that digital keyfob balancing with potentially the secular decline of more of the physical keyfob business that you had and whether it's kind of a net neutral for the overall business and whether there's any sort of subscription revenue that could come from a digital keyfob product?

好的。明白了。您提到投資以數位金鑰卡為成長領域的新產品。我很好奇，您如何看待數位鑰匙圈與您擁有的更多實體鑰匙圈業務的潛在長期衰退之間的平衡，以及它是否對整體業務具有淨中性，以及數位鑰匙圈產品是否可以帶來任何形式的訂閱收入？

Yes. We've done a lot of third-party market studies on what does it look like for a digital keyfob longer term. And we still see that there's both a consumer drive and the customer drive to have the physical keyfob, which helps us get our confidence around having a digital keyfob that's connecting to the car and the phone for the consumer.

是的。我們已經對數位金鑰卡的長期前景進行了大量第三方市場研究。我們仍然看到消費者和客戶都希望擁有實體鑰匙扣，這有助於我們對為消費者提供連接汽車和手機的數位鑰匙扣充滿信心。

As far as subscription services, a lot of the customers are holding that opportunity. So I think it's premature, Brian, with where we are in our product development to think about where we have further subscription opportunity. But obviously, that's something we'll continue to understand as we work with our customers and see what their needs are for themselves and the consumers.

就訂閱服務而言，許多客戶都抓住了這個機會。因此，布萊恩，我認為，就我們現在的產品開發水平來考慮我們還有哪些進一步的訂閱機會還為時過早。但顯然，我們會在與客戶合作的過程中繼續了解這一點，並了解他們自己和消費者的需求。

Okay. Great. And last one for me. You talked about next year being more of a flattish year, but if you were to take $2 in earnings for the quarter in what traditionally hasn't been -- you traditionally haven't been the most seasonal businesses. But obviously, you extrapolate that out to $7.5, $8 a share. How much do you think the performance of this $2 a share earnings is repeatable?

好的。偉大的。對我來說這是最後一個。您談到明年將會是較為平淡的一年，但如果您在本季獲得 2 美元的收益，而這在傳統上並非如此——傳統上，您的企業並不是最具季節性的。但顯然，你可以將其推算為每股 7.5 美元或 8 美元。您認為每股 2 美元的收益表現在多大程度上具有可重複性？

And how many -- how much potentially were some more onetime items that you think we shouldn't be considering if we're thinking about an earnings number for 2026, 2027?

如果我們考慮 2026 年、2027 年的獲利數字，您認為有多少潛在的一次性項目是我們不應該考慮的？

I think I'm just going to frame that a little bit with the market again, Brian, because I think as we talked about, it will be connected to where the North America production market is. And if you were to look at third-party projections earlier in this calendar year versus later in the calendar year, production levels dropped 10% to what they were projecting earlier from a third-party standpoint. I'll let Matt add on from his perspective.

布萊恩，我想我還是要再次從市場的角度來稍微闡述這一點，因為我認為正如我們所討論的，它將與北美生產市場的位置相關。如果你對比今年稍早和今年稍後的第三方預測，你會發現，從第三方的角度來看，產量水準比他們之前預測的下降了 10%。我會讓馬特從他的角度補充。

Yes. It really comes down to volume. I think we've done a good job over the past year of the things that we can control. So we've been more aggressive on pushing pricing where we have the opportunity and also on the cost takeout, which is what you see kind of in the back half of the year. We'll balance that with some of the inflationary pressures that we see on a go-forward basis as well as kind of the headwinds from volume and some of the investments we still need to make in the business.

是的。這實際上取決於音量。我認為，過去一年我們在我們能夠控制的事情上做得很好。因此，我們在有機會的情況下更加積極地推動定價，並降低成本，這就是您在今年下半年所看到的情況。我們將平衡未來面臨的一些通膨壓力、產量方面的阻力以及我們仍需在業務中進行的一些投資。

Understood. Well, clearly, you're on an excellent track and we look forward to seeing what's ahead.

明白了。好吧，顯然，你正走在一條非常好的道路上，我們期待看到未來。

Dennis Scannell, Rutabaga Capital.

丹尼斯·斯坎內爾（Dennis Scannell），Rutabaga Capital。

Congratulations on a great quarter and a great finish to the year. Just a couple of quick things. To follow up on the margin question, to get to that low teens EBITDA margin potential, is that just volume growth? Or will that take -- how do I want to put it, kind of like the new programs that you're targeting in the, say, the '29, '30 model year in terms of achieving that kind of margin improvement?

恭喜您本季取得了優異的成績，並順利結束了這一年。只是幾件簡單的事。為了跟進利潤率問​​題，要達到低十幾個百分點的 EBITDA 利潤率潛力，僅僅是銷售成長嗎？或者說，這需要——怎麼說呢，有點像你們在 29、30 車型年為實現利潤率提高而製定的新計劃？

Yes. So the margin improvement really comes at the gross margin line. And I think it's -- there's kind of three drivers there that will help us get to those longer-term margins. So first off, it's pricing. So we've demonstrated the ability to get price. I think we'll continue to drive pricing where we command a premium. The second piece is around volume, which is the new model year launches.

是的。因此，利潤率的提高實際上來自於毛利率。我認為，有三種驅動因素​​可以幫助我們實現長期利潤。首先是定價。因此，我們已經證明了獲取價格的能力。我認為我們將繼續推動溢價定價。第二部分是關於銷量，即新車型的推出。

And then the third is really around operational improvements. And so there's a funnel of continuous improvement, ideas around both the four-wall costs as well as supply chain. And we've added two new leaders to help us there in identifying kind of the opportunity set. And then longer term, there's obviously kind of structural changes we could make around our footprint on a go-forward basis.

第三個實際上是關於營運改善。因此，存在一個持續改進的管道，圍繞著四面牆成本和供應鏈的想法。我們增加了兩位新領導者來幫助我們識別機會。從長遠來看，我們顯然可以對我們的足跡進行一些結構性改變。

Yes. And I think I would just add on to that. Matt touched on the two new leaders. So we've recently added a Vice President of Operations. He's hit the ground running and helping us, as Matt said, look at our four-wall costs and making sure that we're implementing standard operating procedures and understanding what the opportunity is on that side of the business.

是的。我想我只是想補充一下這一點。馬特談到了兩位新領導人。因此我們最近增加了一位營運副總裁。正如馬特所說，他立即開始工作並幫助我們審視我們的四面牆成本，並確保我們實施標準作業程序並了解業務方面的機會。

We also added supply chain talent for us to look at logistics and our overall supply chain. And as we talked about our low-hanging fruit that we addressed last year, we've done some cost efficiency opportunities, but we haven't really looked at that longer-term structural changes.

我們也增加了供應鏈人才來負責管理物流和我們的整體供應鏈。正如我們去年談到的那些唾手可得的成果一樣，我們已經做了一些成本效益方面的工作，但我們還沒有真正考慮過長期的結構性變化。

Got it. Great. Just a couple of other quick things. So obviously, a great year in terms of cash flow and some benefiting from some onetime items. So Matt, when you said that you expect free cash flow to return to more normalized levels, again, I feel like you guys have changed the business a lot. So what do you see as normalized levels? Is that kind of $20 million to $30 million free cash flow per year? Or how do we think about that?

知道了。偉大的。還有一些其他簡單的事情。因此，顯然，從現金流方面來看，這是非常好的一年，而且有些人也受益於一些一次性項目。所以馬特，當你說你預計自由現金流將恢復到更正常的水平時，我再次感覺到你們已經對業務進行了很大的改變。那麼您認為正常化程度是多少？這是每年 2000 萬到 3000 萬美元的自由現金流嗎？或者我們如何看待這個問題？

Yes. So I'd referenced our results in '25. We delivered $71 million of cash from operations. I'd say about half of that is kind of the normal and the other half was kind of recovery of some preproduction balances, which we reduced by about 50% during the year and then also a $25 million reduction in working capital, which I'd categorize that as kind of low-hanging fruit.

是的。所以我參考了我們在 25 年的結果。我們從營運中獲得了 7,100 萬美元的現金。我想說其中大約一半是正常的，另一半是一些預生產餘額的恢復，我們在今年減少了約 50％，然後還減少了 2500 萬美元的營運資金，我將其歸類為唾手可得的成果。

So I'm encouraged by the efforts the team has made around our working capital. At the beginning of the year, it was roughly 22% of our sales. And at the end of the year here, it's a little over 16%. We've stated kind of our longer-term target around primary working capital, that being receivables, inventory and payables is 15%. So we've made a nice move here in the fiscal year.

因此，團隊圍繞著我們的營運資金所做的努力令我感到鼓舞。年初，它約占我們銷售額的 22%。而今年底，這一比例略高於 16%。我們已經闡明了圍繞主要營運資本的長期目標，即應收帳款、庫存和應付帳款佔 15%。因此，我們在本財政年度取得了不錯的進展。

Excellent. Excellent. Just one other little thing. So on the VAT recovery, nice to hear that we collected $5 million during the year. It's still pretty elevated relative to where it was a few years ago. I kind of remember something under $10 million. Is that -- I don't know, do you expect that to come down? Or is that kind of -- will it kind of -- will that receivable kind of stay in that kind of $19 million to $20 million level?

出色的。出色的。還有一件小事。關於增值稅追回，很高興聽到我們今年收了 500 萬美元。與幾年前相比，這一水平仍然相當高。我記得大概是 1000 萬美元以下。那是——我不知道，你預計它會下降嗎？或者說，應收帳款會維持在 1,900 萬美元到 2,000 萬美元的水平嗎？

That's one of the opportunities we have on a go-forward basis to leverage our balance sheet. We collected $5 million in the quarter. It's about 50% of the balance that we were trying to collect from 2023. And then obviously, there's some for 2024 that we need to collect as well. So that's an opportunity for us on a go-forward basis.

這是我們未來利用資產負債表的機會之一。本季我們籌集了 500 萬美元。這大約是我們試圖從 2023 年開始收取的餘額的 50%。顯然，我們也需要收集一些 2024 年的資料。所以這對我們來說是一個前進的機會。

John Franzreb, Sidoti.

約翰‧法蘭茲雷布、西多蒂。

Yes. I was just curious about the comments on inventory. Matt, you alluded to it was a temporary drawdown. How much does that have to go back up to be in equilibrium with your demand profile? Can you kind of frame that for us?

是的。我只是對庫存的評論感到好奇。馬特，你暗示這只是暫時的刪減。要達到與您的需求狀況平衡，需要回升多少？你能為我們解釋一下嗎？

Yes. So I think our inventory turns at the end of the year were just over 7. And so yes, it was a temporary reduction. We'd expect it to go up here in '26 just from an on-time delivery with our customers. But our inventory at the end of the year was roughly about $65 million. I'd probably put it in the $5 million-ish range of -- we'd be more comfortable with another $5 million of inventory.

是的。所以我認為我們年底的庫存週轉率略高於 7。是的，這只是暫時的減少。只要我們按時向客戶交貨，我們預計它的價格將在 26 年上漲。但我們年底的庫存大約是 6500 萬美元。我可能會把它放在 500 萬美元左右的範圍內——我們更願意接受另外 500 萬美元的庫存。

Obviously, we're going through the process to understand on a part level basis, kind of make to stock, make to order and what's the right levels of inventory by item.

顯然，我們正在透過這個流程來了解零件層面的情況、按庫存生產、按訂單生產的情況以及每個項目的正確庫存水準。

Yes. And I think I'd add on to that, John, the two leaders we just added to the team are going to also help us make sure we've got the right level of inventory in the right places to serve our customers.

是的。約翰，我想補充一點，我們剛剛加入團隊的兩位領導也將幫助我們確保在正確的位置擁有適當的庫存水平來為我們的客戶提供服務。

And since you brought that up, Jen, I'm just curious, how much more personnel do you need to add to your team? Or do you think you have the proper people around you to execute what you're looking for on a go-forward basis?

既然你提到了這一點，Jen，我很好奇，你的團隊還需要增加多少人員？還是您認為您身邊有合適的人選來執行您今後所尋求的目標？

Yes. I think we -- Matt and I are comfortable with the levels of investment that we have on a percent revenue basis. We've put investment in place. But as a whole, I feel good with what we have, John. We'll continue to address the organization where we need to add capability but it doesn't necessarily relate to always incremental investment.

是的。我認為我們——馬特和我對我們的投資水平（按收入百分比計算）感到滿意。我們已經進行了投資。但總的來說，我對我們所擁有的一切感到滿意，約翰。我們將繼續解決需要增加能力的組織問題，但這不一定與增量投資有關。

Okay. And one last question. I'm just curious where you stand on selling the Milwaukee facility? Any kind of update there?

好的。最後一個問題。我只是好奇您對出售密爾瓦基工廠的立場是什麼？有任何更新嗎？

Yes. So again, kind of with our cash position, we're not in a hurry to exit the building. We want to make sure that we've got the right opportunity for our operations and our headquarter and getting it at the right price. So we're still in the process, John, but there's no new update.

是的。所以，鑑於我們的現金狀況，我們並不急於退出。我們希望確保我們的營運和總部擁有合適的機會，並以合適的價格獲得它。所以我們仍在進行中，約翰，但沒有新的更新。

Congrats again.

再次恭喜。

Mario Gabelli, Gabelli & Company.

馬裡奧·加貝利（Mario Gabelli），加貝利公司。

Just a couple of dots. Currency, how hedged are you? And is your cash strictly in US banks or still some in the outside the United States and subsidiaries in Mexico or elsewhere?

只是幾個點。貨幣，您如何對沖？您的現金是否全部存放在美國銀行，還是仍有一些存放在美國境外以及墨西哥或其他地方的子公司？

The majority of our cash is in US bank accounts. And from a hedging standpoint, we have --

我們的大部分現金都存入美國銀行帳戶。從對沖的角度來看，我們有--

Whoa, stop. Majority means 51%. Can you give me a better number?

哇哦，停下來。多數是指 51%。你能給我一個更好的號碼嗎？

It's over 70% of it's in the US.

其中 70% 以上在美國。

All right. So that means 30% is not. But the currency moves sometimes have impacts on your quarters. And second question is tax bill that was just passed. When you're doing R&D on your digital, is that expensed? Or is that -- what else benefits in terms of any other elements?

好的。所以這意味著 30% 不是。但貨幣變動有時會對您的季度產生影響。第二個問題是剛通過的稅收法案。當您進行數位研發時，這算費用嗎？或者說——就其他元素而言還有什麼好處？

The tax bill will benefit us from a cash tax savings going forward. We have about a $10 million deferred tax asset that we'll realize because we don't need to defer those R&D expenses from a tax standpoint on an annual basis. That's probably the biggest benefit is on the R&D side.

這項稅收法案將使我們受益於未來的現金稅收節省。我們擁有約 1,000 萬美元的遞延稅項資產，因為從稅務角度來看，我們不需要每年延後這些研發費用。這可能是研發方面最大的好處。

All right. That's great. And I have a few more, but I'll get those through Brian's and others. But one strategic, just to kind of go back to the question of your F-O-B business, or fobs. Let's assume there's 300 million vehicles on the roads in the United States and another 1.4 billion around the world. How much D&A do you have on the fobs in the US? And who's your competitor? Just refresh us.

好的。那太棒了。我還有一些其他的，但我會透過 Brian 和其他人來獲取它們。但從策略上來說，我們只需要回到離岸價業務或離岸價業務的問題。假設美國道路上有 3 億輛汽車，全球道路上有 14 億輛汽車。您對美國的 fob 有多少 D&A？你的競爭對手是誰？只是讓我們精神煥發。

Yes. So again, Mario, traditionally, we've served the North America big three customers. So our focus has been there. Our competitors in that space are Continental, DENSO and Huf.

是的。馬裡奧，再說一次，傳統上，我們服務北美三大客戶。所以我們的重點一直都在那裡。我們在該領域的競爭對手是大陸集團、電裝集團和赫夫集團。

Any discussions of taking over their DNA, so to speak, of their base, given all of the challenges that are taking place on tariff movements?

考慮到關稅變動方面出現的所有挑戰，是否有人討論過接管他們的 DNA，也就是接管他們的基地？

Yes. We're continually looking at where we can provide value if it's new incremental for us or if it's opportunity with our footprint for our customers.

是的。我們一直在尋找能夠提供價值的地方，無論是對我們來說是新的增量，還是為我們的客戶帶來的機會。

And this is a question from us. How do I get recurring revenues on an ongoing basis from subscriptions? This is like direct or direct-to-consumer. Right now, most of your channels are this year. I walk into a Ford dealer for my lost car key and I'm paying x dollars. How easy is it to look at given that channel of distribution going to a direct-to-consumer type bypass the Ford dealerships?

這是我們提出的問題。我如何從訂閱中持續獲得經常性收入？這就像直接或直接面向消費者。目前，你們的大多數頻道都是今年的。我走進一家福特經銷商尋找丟失的車鑰匙並支付了 x 美元。鑑於分銷通路繞過福特經銷商，直接面向消費者，這有多容易理解？

We do have some aftermarket business. Today, 7% of our revenue is through aftermarket and some of that's dealer direct, some of that's through distributors. This is something that we're focusing on, but it's a little -- we're still in kind of the early stages of understanding where we would have further opportunity there.

我們確實有一些售後市場業務。如今，我們 7% 的收入來自售後市場，其中一些來自經銷商直銷，有些來自經銷商。這是我們關注的重點，但有點——我們仍處於了解哪裡有進一步機會的早期階段。

Well, thanks for the update, Jen. And obviously, the only reason I asked that it has an impact on the multiple some of the AI parts of the world would pay for your stock earnings. Look forward to continuing to congratulate you on all you're accomplishing.

好吧，謝謝你的更新，Jen。顯然，我問這個問題的唯一原因是它對世界上一些人工智慧部分支付的股票收益產生了影響。期待繼續祝賀您所取得的所有成就。

We have no further phone questions at this time. Ms. Pawlowski, I'd like to turn the floor back to you for web questions.

目前我們沒有其他電話問題。帕沃斯基女士，我想把網路問題交還給您。

Thanks, Christine. And I did have one question from one of our investors who congratulated Strattec on a nice quarter and year and wanted to know if we have any thoughts to share at present on possible new product offerings or new revenue opportunities over the next three to five years.

謝謝，克里斯汀。我們的一位投資者確實向我提出了一個問題，他對 Strattec 本季和本年度的出色表現表示祝賀，並想知道我們目前是否對未來三到五年內可能推出的新產品或新的收入機會有什麼想法可以分享。

Yes. Thanks for the question. We're pretty comfortable with the products that we have and understanding that we think we have continued opportunity to expand our customer set within our current product portfolio, and that's where our focus is around our power access business and our digital key and addressing the customers we have today, but also expanding into new customers.

是的。謝謝你的提問。我們對現有的產品非常滿意，並且知道我們認為我們有機會在現有產品組合中繼續擴大我們的客戶群，而我們的重點是圍繞我們的電源接入業務和數位金鑰，滿足我們現有的客戶需求，同時也拓展新客戶。

Excellent. And so everyone, thank you very much for joining us today. This concludes our call. I will point out that we will be at the Midwest IDEAS Conference on the 26th of September and also participating in -- well, I actually take that back. So maybe we can see you at the IDEAS conference. Thank you very much. Have a great day.

出色的。非常感謝各位今天的到來。我們的通話到此結束。我要指出的是，我們將於 9 月 26 日參加中西部 IDEAS 會議，並且還將參加——好吧，我收回剛才說的話。也許我們可以在 IDEAS 會議上見到您。非常感謝。祝你有美好的一天。

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.

女士們、先生們，今天的電話會議到此結束。現在您可以斷開線路。感謝您的參與，祝您有美好的一天。