1 unchanged sentence
STRATTEC SECURITY CORPORATION AND SUBSIDIARIES
−Removed: Condensed Consolidated Statements of Income and Comprehensive Income
+Added: Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)
(In Thousands, Except Per Share Amounts)
Three Months Ended
−Removed: September 27,
−Removed: September 29,
+Added: Six Months Ended
Cost of goods sold
Engineering, selling and administrative expenses
−Removed: Income from operations
+Added: Income (loss) from operations
Equity earnings of joint ventures
Interest expense
−Removed: Other expense, net
−Removed: Income before provision for income
−Removed: taxes and non-controlling interest
−Removed: Provision for income taxes
+Added: Other (expense) income, net
+Added: Income (loss) before provision (benefit) for
+Added: income taxes and non-controlling interest
+Added: Provision (benefit) for income taxes
+Added: Net income (loss)
Net income attributable to non-controlling
−Removed: Net income attributable to STRATTEC
+Added: Net income (loss) attributable to STRATTEC
SECURITY CORPORATION
Comprehensive income:
+Added: Net income (loss)
Pension and postretirement plans, net of tax
Currency translation adjustments
−Removed: Other comprehensive income (loss), net of tax
+Added: Other comprehensive income, net of tax
Comprehensive income
1 unchanged sentence
non-controlling interest
−Removed: Comprehensive income attributable to
+Added: Comprehensive income (loss) attributable to
STRATTEC SECURITY CORPORATION
−Removed: Earnings per share attributable to
+Added: Earnings (loss) per share attributable to
STRATTEC SECURITY CORPORATION:
1 unchanged sentence
Cash dividends declared per share
−Removed: The accompanying notes are an integral part of these Condensed Consolidated Statements of Income and Comprehensive Income.
+Added: The accompanying notes are an integral part of these Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss).
STRATTEC SECURITY CORPORATION AND SUBSIDIARIES
1 unchanged sentence
(In Thousands, Except Share Amounts)
−Removed: September 27,
Current Assets:
27 unchanged sentences
Common stock, authorized 12,000,000 shares, $ .01 par value, 7,393,481
−Removed: issued shares at September 27, 2020 and 7,358,812 issued shares at
+Added: issued shares at December 27, 2020 and 7,358,812 issued shares at
June 28, 2020
2 unchanged sentences
Accumulated other comprehensive loss
−Removed: treasury stock, at cost ( 3,608,214 shares at September 27, 2020 and
+Added: treasury stock, at cost ( 3,607,464 shares at December 27, 2020 and
3,609,193 shares at June 28, 2020)
6 unchanged sentences
(In Thousands)
−Removed: Three Months Ended
−Removed: September 27,
−Removed: September 29,
+Added: Six Months Ended
CASH FLOWS FROM OPERATING ACTIVITIES:
1 unchanged sentence
Foreign currency transaction loss
+Added: Loss on disposal of property, plant and equipment
Unrealized gain on peso forward contracts
7 unchanged sentences
CASH FLOWS FROM INVESTING ACTIVITIES:
+Added: Investment in VAST LLC
Purchase of property, plant and equipment
2 unchanged sentences
CASH FLOWS FROM FINANCING ACTIVITIES:
−Removed: Borrowings under credit facility
Repayment of borrowings under credit facility
4 unchanged sentences
Foreign currency impact on cash
−Removed: NET INCREASE IN CASH AND CASH EQUIVALENTS
+Added: NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS
2 unchanged sentences
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
−Removed: Cash paid (received) during the period for:
+Added: Cash paid during the period for:
Non-cash investing activities:
13 unchanged sentences
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.
−Removed: VAST LLC consists primarily of four wholly owned subsidiaries in China, one wholly owned subsidiary in Brazil and one joint venture entity in India.
+Added: VAST LLC consists primarily of three 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.
−Removed: In the opinion of management, the accompanying condensed consolidated balance sheets as of September 27, 2020 and June 28, 2020, which has been derived from our audited financial statements, and the related unaudited interim condensed consolidated financial statements included herein contain all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with accounting principles generally accepted in the United States of America (“U.S.
+Added: In the opinion of management, the accompanying condensed consolidated balance sheets as of December 27, 2020 and June 28, 2020, 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.
7 unchanged sentences
In response to the COVID-19 outbreak, the governments of many countries, states, cities and other geographic regions have taken preventative or protective actions, such as imposing restrictions on travel and business operations and advising or requiring individuals to limit or forego their time outside of their homes.
−Removed: Accordingly, the COVID-19 outbreak has severely restricted the level of economic activity in many countries, and continues to adversely impact global economic activity.
+Added: 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.
STRATTEC’s operating performance is subject to global economic conditions and levels of consumer spending specifically within the automotive industry.
1 unchanged sentence
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.
−Removed: Re-opening of our OEM customer facilities and our Mexico facilities began in June 2020, and the automotive industry continued to ramp-up throughout our fiscal quarter ended September 27, 2020 resulting in an increase in our net sales for the current fiscal quarter compared to our prior year fiscal quarter.
−Removed: While we expect continued increased sales over our prior year through our second fiscal quarter, such estimates are dependent on the severity of the ongoing impacts of COVID-19 and any worsening of the impact of the pandemic on society and specifically on the automotive industry.
+Added: 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 six-month fiscal period ended December 27, 2020 resulting in an increase in our net sales for this current fiscal six-month period compared to our prior year period.
+Added: While we expect increased sales over our prior year during our third and fourth fiscal quarters due to our customers’ reduction in production schedules and their assembly plant closures during the period late March 2020 through mid-June 2020, such estimates are dependent on the severity of the ongoing impacts of COVID-19 and any worsening of the impact of the pandemic (including relating to potential restrictive operating measures imposed by governmental authorities) on society and specifically on the automotive industry.
The extent of the impact of the COVID-19 outbreak on our future operating results will depend on certain developments, including the duration, intensity and continued spread of the outbreak, regulatory and private sector responses, which may be precautionary, and the impact to our customers, workforce and suppliers, all of which are uncertain and cannot be predicted.
−Removed: changing conditions may also affect the estimates and assumptions made by management.
+Added: These changing conditions may also affect the estimates and assumptions made by management.
Such estimates and assumptions affect, among other things, our long-lived asset valuations, equity investment valuation, assessment of our annual effective tax rate, valuation of deferred income taxes, assessment of excess and obsolete inventory reserves, and assessment of collectability of trade receivables.
15 unchanged sentences
dollar/Mexican peso exchange rate.
−Removed: 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.
−Removed: Our objective in entering into currency forward contracts is to minimize our earnings volatility resulting from changes in exchange rates affecting the U.S.
+Added: We had contracts with Bank of Montreal that provided for monthly Mexican peso currency forward contracts for a portion of our estimated peso denominated operating costs.
+Added: 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.
−Removed: The Mexican peso forward contracts are not used for speculative purposes and are not designated as hedges.
−Removed: As a result, all currency forward contracts are recognized in our accompanying condensed consolidated financial statements at fair value and changes in the fair value are reported in current earnings as part of Other Expense, net.
−Removed: The following table quantifies the outstanding Mexican peso forward contracts as of September 27, 2020 (thousands of dollars, except with respect to the average forward contractual exchange rate):
−Removed: Effective Dates
−Removed: Notional Amount
−Removed: Average Forward Contractual Exchange Rate
−Removed: Buy MXP/Sell USD
−Removed: October 14, 2020 - December 16, 2020
+Added: The Mexican peso forward contracts we previously entered into were not used for speculative purposes and were not designated as hedges.
+Added: As a result, all currency forward contracts were recognized in our accompanying condensed consolidated financial statements at fair value and changes in the fair value were reported in current earnings as part of Other (Expense) Income, net.
+Added: No currency forward contracts were outstanding as of December 27, 2020.
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):
−Removed: September 27,
Not Designated as Hedging Instruments:
1 unchanged sentence
Mexican Peso Forward Contracts
−Removed: The pre-tax effects of the Mexican peso forward contracts are included in Other Expense , net on the accompanying Condensed Consolida ted Statements of Income and Comprehensive Income and consisted of the following for the periods indicated below (thousands of dollars):
+Added: The pre-tax effects of the Mexican peso forward contracts are included in Other (Expense) Income, net on the accompanying Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) and consisted of the following for the periods indicated below (thousands of dollars):
Three Months Ended
−Removed: September 27,
−Removed: September 29,
+Added: Six Months Ended
Not Designated as Hedging Instruments:
2 unchanged sentences
Fair Value of Financial Instruments
−Removed: The fair value of our cash and cash equivalents, accounts receivable, accounts payable and borrowings under our credit facilities approximated book value as of September 27, 2020 and June 28, 2020.
+Added: The fair value of our cash and cash equivalents, accounts receivable, accounts payable and borrowings under our credit facilities approximated book value as of December 27, 2020 and June 28, 2020.
Fair value is defined as the exchange price that would be received for an asset or paid for a liability (an exit price) in the principal or most advantageous market in an orderly transaction between market participants on the measurement date.
−Removed: The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of September 27, 2020 (in thousands):
+Added: The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of December 27, 2020 (in thousands):
Fair Value Inputs
10 unchanged sentences
Total Assets at Fair Value
−Removed: Mexican Peso Forward Contracts
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.
−Removed: Refer to discussion of Mexican peso forward contracts under Derivative Instruments above.
−Removed: The fair value of the Mexican peso forward contracts considers the remaining term, current exchange rate, and interest rate differentials between the Mexican peso and the U.S.
Investment in Joint Ventures and Majority Owned Subsidiaries
6 unchanged sentences
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.
+Added: 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.
+Added: STRATTEC currently purchases such component parts from WITTE.
+Added: These purchases totaled $ 237,000 and $ 320,000 during the three and six month periods ended December 27, 2020, respectively, and $ 250,000 and $ 643,000 during the three and six month periods ended December 29, 2019, respectively.
VAST LLC has investments in Sistema de Acesso Veicular Ltda, VAST Fuzhou, VAST Great Shanghai, VAST Shanghai Co., VAST Jingzhou Co.
9 unchanged sentences
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.
−Removed: The activities related to the VAST LLC joint ventures resulted in equity earnings of joint ventures to STRATTEC of $ 825,000 during the three months ended September 27, 2020 and $ 487,000 during the three months ended September 29, 2019.
−Removed: During the three months ended September 27, 2020 and September 29, 2019, no capital contributions were made to VAST LLC by any of the members.
+Added: The activities related to the VAST LLC foreign subsidiaries and joint venture resulted in equity earnings of joint ventures to STRATTEC of $ 1.9 million during the six month period ended December 27, 2020 and $ 983,000 during the six month period ended December 29, 2019.
+Added: During the six months ended December 27, 2020, capital contributions totaling $ 300,000 were made to VAST LLC for purposes of funding operations in Brazil.
+Added: STRATTEC’s portion of the capital contributions totaled $ 100,000 .
+Added: During the six months ended December 29, 2019, no capital contributions were made to VAST LLC by any of the members.
ADAC-STRATTEC LLC, a Delaware limited liability company, was formed in fiscal year 2007 to support injection molding and door handle assembly operations in Mexico.
1 unchanged sentence
An additional Mexican entity, ADAC-STRATTEC de Mexico, is wholly owned by ADAC-STRATTEC LLC.
−Removed: ADAC-STRATTEC LLC’s financial results are consolidated with the financial results of STRATTEC and resulted in increased net income to STRATTEC of approximately $ 1.4 million during the three months ended September 27, 2020 and approximately $ 1.0 million during the three months ended September 29, 2019.
−Removed: ADAC STRATTEC LLC incurs an engineering, research and design fee as well as a sales fee with ADAC.
−Removed: Such fees are calculated as a percentage of net sales, are included in the consolidated results of STRATTEC, and totaled $ 2.4 million in the three months ended September 27, 2020 and $ 2.2 million in the three months ended September 29, 2019.
+Added: ADAC-STRATTEC LLC’s financial results are consolidated with the financial results of STRATTEC and resulted in increased net income to STRATTEC of approximately $ 2.7 million during the six month period ended December 27, 2020 and approximately $ 1.3 million during the six month period ended December 29, 2019.
+Added: ADAC charges ADAC STRATTEC LLC an engineering, research and design fee as well as a sales fee.
+Added: Such fees are calculated as a percentage of net sales, are included in the consolidated results of STRATTEC, and totaled $ 2.4 million and $ 4.8 million in the three and six month periods ended December 27, 2020, respectively, and $ 1.8 million and $ 4.0 million in the three and six month periods ended December 29, 2019, respectively.
Additionally, ADAC-STRATTEC LLC sells production parts to ADAC.
−Removed: Sales to ADAC are included in the consolidated results of STRATTEC and totaled $ 3.1 million in the three months ended September 27, 2020 and $ 3.7 million in the three months ended September 29, 2019.
+Added: Sales to ADAC are included in the consolidated results of STRATTEC and totaled $ 3.3 million and $ 6.4 million in the three and six month periods ended December 27, 2020, respectively, and $ 2.0 million and $ 5.7 million in the three and six month periods ended December 29, 2019, respectively.
STRATTEC POWER ACCESS LLC (“SPA”) was formed in fiscal year 2009 to supply the North American portion of the power sliding door, lift gate and deck lid system access control products which were acquired from Delphi Corporation.
1 unchanged sentence
An additional Mexican entity, STRATTEC POWER ACCESS de Mexico, is wholly owned by SPA.
−Removed: The financial results of SPA are consolidated with the financial results of STRATTEC and resulted in increased net income to STRATTEC of approximately $ 685,000 during the three months ended September 27, 2020 and $ 266,000 during the three months ended September 29, 2019.
−Removed: STRATTEC purchases production parts from WITTE.
−Removed: These purchases totaled $ 83,000 during the three months ended September 27, 2020 and $ 393,000 during the three months ended September 29, 2019.
+Added: The financial results of SPA are consolidated with the financial results of STRATTEC and resulted in increased net income to STRATTEC of approximately $ 3.2 million during the six month period ended December 27, 2020 and $ 1.9 million during the six month period ended December 29, 2019.
Equity Earnings of Joint Ventures
1 unchanged sentence
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.
−Removed: The results of the VAST LLC foreign subsidiaries and joint ventures are reported on a one-month lag basis.
+Added: 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.
1 unchanged sentence
Three Months Ended
−Removed: September 27,
−Removed: September 29,
+Added: Six Months Ended
Cost of Goods Sold
1 unchanged sentence
Income From Operations
−Removed: Other (Expense) Income, net
+Added: Other Income, net
Income before Provision for Income Taxes
Provision for Income Taxes
+Added: STRATTEC's Share of VAST LLC Net Income
+Added: Intercompany Profit Elimination
STRATTEC’s Equity Earnings of VAST LLC
2 unchanged sentences
Three Months Ended
−Removed: September 27,
−Removed: September 29,
+Added: Six Months Ended
Sales to VAST LLC
9 unchanged sentences
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.
−Removed: The operating lease asset and obligation related to our El Paso warehouse lease included in the accompanying Condensed Consolidated Balance Sheet are presented below (in thousands):
−Removed: September 27,
+Added: 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):
Right-of Use Asset Under Operating Lease:
4 unchanged sentences
Other Long-Term Liabilities
−Removed: Future minimum lease payments, by our fiscal year, including options to extend that are reasonably certain to be exercised, under the non-cancelable lease are as follows as of September 27, 2020 (in thousands):
−Removed: 2021 (for the remaining nine months)
+Added: 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 December 27, 2020 (in thousands):
+Added: 2021 (for the remaining six months)
Total Future Minimum Lease Payments
2 unchanged sentences
Cash flow information related to the operating lease is shown below (in thousands):
−Removed: Three Months Ended
−Removed: September 27,
+Added: Six Months Ended
Operating Cash Flows:
1 unchanged sentence
The weighted average lease term and discount rate for the El Paso, Texas operating lease are shown below:
−Removed: September 27,
Weighted Average Remaining Lease Term (in years)
Weighted Average Discount Rate
−Removed: Operating lease expense for the three month periods ended September 27, 2020 and September 29, 2019 totaled $ 116,000 and $ 113,000 , respectively.
+Added: Operating lease expense for the three and six month periods ended December 27, 2020 totaled $ 119,000 and $ 235,000 , respectively.
+Added: Operating lease expense for the three and six month periods ended December 29, 2019 totaled $ 116,000 and $ 229,000 , respectively.
Credit Facilities
−Removed: STRATTEC has a $ 40 million secured revolving credit facility (the “STRATTEC Credit Facility”) with BMO Harris Bank.
+Added: 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.
6 unchanged sentences
The ADAC-STRATTEC Credit Facility includes an additional restrictive financial covenant that requires the maintenance of a minimum fixed charge coverage ratio.
−Removed: As of September 27, 2020, we were in compliance with all financial covenants required by these credit facilities.
+Added: As of December 27, 2020, we were in compliance with all financial covenants required by these credit facilities.
Outstanding borrowings under the credit facilities were as follows (in thousands):
−Removed: September 27,
STRATTEC Credit Facility
1 unchanged sentence
Average outstanding borrowings and the weighted average interest rate under each credit facility referenced above were as follows for each period presented (in thousands):
−Removed: Three Months Ended
+Added: Six Months Ended
Average Outstanding Borrowings
Weighted Average Interest Rate
−Removed: September 27,
−Removed: September 29,
−Removed: September 27,
−Removed: September 29,
STRATTEC Credit Facility
10 unchanged sentences
Based upon the updated estimates, no further adjustment to the reserve was required.
−Removed: From 1995 through September 27, 2020, costs of approximately $ 618,000 have been incurred related to the installation of monitoring wells on the property and ongoing monitoring costs.
+Added: From 1995 through December 27, 2020, costs of approximately $ 625,000 have been incurred related to the installation of monitoring wells on the property and ongoing monitoring costs.
We monitor and evaluate the site with the use of these groundwater monitoring wells.
5 unchanged sentences
The reserve is not measured on a discounted basis.
−Removed: We believe, based on findings-to-date and known environmental regulations, that the remaining environmental reserve of $ 1.3 million at September 27, 2020 is adequate.
+Added: We believe, based on findings-to-date and known environmental regulations, that the remaining environmental reserve of $ 1.3 million at December 27, 2020 is adequate.
Shareholders’ Equity
−Removed: A summary of activity impacting shareholders’ equity for the three month periods ended September 27, 2020 and September 29, 2019 were as follows (in thousands):
−Removed: Three Months Ended September 27, 2020
+Added: A summary of activity impacting shareholders’ equity for the three and six month periods ended December 27, 2020 and December 29, 2019 were as follows (in thousands):
+Added: Three Months Ended December 27, 2020
Shareholders’
4 unchanged sentences
Non-Controlling Interest
+Added: Balance, September 27, 2020
+Added: Translation Adjustments
+Added: Stock Based Compensation
+Added: Pension and Postretirement
+Added: Adjustment, Net of
+Added: Employee Stock Purchases
+Added: Balance, December 27, 2020
+Added: Three Months Ended December 29, 2019
+Added: Shareholders’
+Added: Capital in Excess of Par Value
+Added: Retained Earnings
+Added: Accumulated Other Comprehensive Loss
+Added: Treasury Stock
+Added: Non-Controlling Interest
+Added: Balance, September 29, 2019
+Added: Dividend Declared
+Added: Translation Adjustments
+Added: Stock Based Compensation
+Added: Pension and Postretirement
+Added: Adjustment, Net of
+Added: Stock Option Exercises
+Added: Employee Stock Purchases
+Added: Balance, December 29, 2019
+Added: Six Months Ended December 27, 2020
+Added: Shareholders’
+Added: Capital in Excess of Par Value
+Added: Retained Earnings
+Added: Accumulated Other Comprehensive Loss
+Added: Treasury Stock
+Added: Non-Controlling Interest
Balance, June 28,2020
6 unchanged sentences
Employee Stock Purchases
−Removed: Balance, September 27, 2020
−Removed: Three Months Ended September 29, 2019
+Added: Balance, December 27, 2020
+Added: Six Months Ended December 29, 2019
Shareholders’
14 unchanged sentences
Employee Stock Purchases
−Removed: Balance, September 29, 2019
+Added: Balance, December 29, 2019
Revenue from Contracts with Customers
3 unchanged sentences
Contract Balances:
−Removed: We have no material contract assets as of September 27, 2020.
+Added: We have no material contract assets as of December 27, 2020.
Contract liability balances primarily include discounts recognized as a reduction in sales at the point of revenue recognition, but which will be applied by the customer agreement after the end of the reporting period.
Contract liability balances are included in Other Accrued Liabilities in the accompanying Condensed Consolidated Balance Sheets.
−Removed: The activity related to contract liability balances during the three month period ended September 27, 2020 was as follows (thousands of dollars):
+Added: The activity related to contract liability balances during the six month period ended December 27, 2020 was as follows (thousands of dollars):
Balance, June 28, 2020
1 unchanged sentence
Payments of Discounts to Customers
−Removed: Balance, September 27, 2020
+Added: Balance, December 27, 2020
Revenue by Product Group and Customer:
1 unchanged sentence
Three Months Ended
−Removed: September 27,
−Removed: September 29,
+Added: Six Months Ended
Door Handles & Exterior Trim
4 unchanged sentences
Three Months Ended
−Removed: September 27,
−Removed: September 29,
+Added: Six Months Ended
General Motors Company
4 unchanged sentences
Hyundai / Kia
−Removed: Other Expense, net
−Removed: Net other expense included in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income primarily included foreign currency transaction gains and losses, realized and unrealized losses on our Mexican peso currency forward contracts, net periodic pension and postretirement benefit costs, other than the service cost component, related to our supplemental executive retirement plan (“SEPR”) and postretirement plans and Rabbi Trust gains and losses.
+Added: Other (Expense) Income, net
+Added: Net other (expense) income included in the accompanying Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) primarily included foreign currency transaction gains and losses, realized and unrealized gains 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.
1 unchanged sentence
dollar cost of our Mexican operations.
−Removed: Unrealized gains and losses on the peso forward contracts recognized as a result of mark-to-market adjustments as of September 27, 2020 may or may not be realized in future periods, depending on the actual Mexican peso to U.S.
−Removed: dollar exchange rates experienced during the balance of the contract period.
The Rabbi Trust assets fund our Amended and Restated Supplemental Executive Retirement Plan.
2 unchanged sentences
Three Months Ended
−Removed: September 27,
−Removed: September 29,
+Added: Six Months Ended
Foreign Currency Transaction Loss
Unrealized Gain on Peso Forward
−Removed: Realized Loss on Peso Forward Contracts
+Added: Realized Gain on Peso Forward Contracts
Pension and Postretirement Plans Cost
−Removed: Rabbi Trust Loss
−Removed: Our effective tax rate was 13.5 % and 10.0 % for the three months ended September 27, 2020 and September 29, 2019, respectively.
+Added: Rabbi Trust Gain
+Added: Our effective tax rate was 17.2 % and 26.7 % for the three months ended December 27, 2020 and December 29, 2019, respectively.
+Added: Our effective tax rate was 15.4 % and ( 6.7 ) % for the six months ended December 27, 2020 and December 29, 2019, respectively.
Effective July 20, 2020, the U.S Treasury Department finalized and enacted previously proposed regulations regarding the Global Intangible Low Taxed Income (GILTI) tax provisions of the Tax Cuts and Jobs Act of 2017 (TCJA).
3 unchanged sentences
In addition, the enactment of the new regulations and our eligibility for the GILTI High-Tax exception are retroactive to the original enactment of the GILTI tax provision, which includes our 2020 fiscal year.
−Removed: As a result of the newly enacted regulations, we recorded an income tax benefit of $ 675,000 during the three month period ended September 27, 2020.
−Removed: During the three month period ended September 29, 2019, our effective tax rate was impacted by the discrete impact of the non-cash compensation expense, as discussed under Pension and Postretirement Benefits below.
+Added: As a result of the newly enacted regulations, we recorded an income tax benefit of $ 675,000 during the six month period ended December 27, 2020.
+Added: During the three and six month periods ended December 29, 2019, our effective tax rate was impacted by the discrete impact of the non-cash compensation expense, as discussed under Pension and Postretirement Benefits below.
Our effective tax rate differs from the statutory tax rate due to the GILTI provisions, our available R&D tax credit and the non-controlling interest portion of our pre-tax income.
3 unchanged sentences
The audit is currently in process and preliminary results are not yet available.
−Removed: Earnings Per Share
−Removed: Basic earnings per share is computed on the basis of the weighted average number of shares of common stock outstanding during the applicable period.
+Added: Earnings (Loss) Per Share
+Added: Basic earnings (loss) 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.
2 unchanged sentences
Three Months Ended
−Removed: September 27,
−Removed: September 29,
Per-Share Amount
Per-Share Amount
−Removed: Basic Earnings Per Share
+Added: Basic Earnings (Loss) Per Share
Stock Option and Restricted
−Removed: Diluted Earnings Per Share
−Removed: The calculation of earnings per share excluded 90,860 share-based payment awards for both of the quarters ended September 27, 2020 and September 29, 2019 because their inclusion would have been anti-dilutive.
+Added: Diluted Earnings (Loss) Per Share
+Added: Six Months Ended
+Added: Per-Share Amount
+Added: Per-Share Amount
+Added: Basic Earnings (Loss) Per Share
+Added: Stock Option and Restricted
+Added: Diluted Earnings (Loss) Per Share
+Added: The calculation of earnings per share excluded 41,200 and 163,749 share-based payment awards as of December 27, 2020 and December 29, 2019, respectively, because their inclusion would have been anti-dilutive.
Stock-based Compensation
1 unchanged sentence
This plan provides for the granting of stock options, shares of restricted stock and stock appreciation rights.
−Removed: As of September 27, 2020, the Board of Directors had designated 1,850,000 shares of common stock available for the grant of awards under the plan.
−Removed: Remaining shares available to be granted under the plan as of September 27, 2020 were 76,434 .
+Added: As of December 27, 2020, the Board of Directors had designated 2 million shares of common stock available for the grant of awards under the plan.
+Added: Remaining shares available to be granted under the plan as of December 27, 2020 were 218,034 .
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.
−Removed: We included a proposal at our Annual Meeting of Shareholders held on October 6, 2020 to increase the number of shares available to be granted under this omnibus stock incentive plan by an additional 150,000 shares, which proposal was approved by our shareholders at the Annual Meeting.
Nonqualified and incentive stock options and shares of restricted stock have been granted to our officers, outside directors and specified associates under our stock incentive plan.
9 unchanged sentences
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.
−Removed: A summary of stock option activity under our stock incentive plan for the three months ended September 27, 2020 was as follows:
+Added: A summary of stock option activity under our stock incentive plan for the six months ended December 27, 2020 was as follows:
Exercise Price
1 unchanged sentence
Outstanding, June 28, 2020
−Removed: Outstanding, September 27, 2020
−Removed: Exercisable, September 27, 2020
−Removed: The intrinsic value of stock options exercised and the fair value of stock options that vested during the three month periods presented below were as follows (in thousands):
+Added: Outstanding, December 27, 2020
+Added: Exercisable, December 27, 2020
+Added: The intrinsic value of stock options exercised and the fair value of stock options that vested during the three and six month periods presented below were as follows (in thousands):
Three Months Ended
−Removed: September 27,
−Removed: September 29,
+Added: Six Months Ended
Intrinsic Value of Options Exercised
Fair Value of Stock Options Vesting
−Removed: No options were granted during the three month periods ended September 27, 2020 or September 29, 2019.
−Removed: A summary of restricted stock activity under our omnibus stock incentive plan for the three months ended September 27, 2020 was as follows:
+Added: No options were granted during the six month periods ended December 27, 2020 or December 29, 2019.
+Added: A summary of restricted stock activity under our omnibus stock incentive plan for the six months ended December 27, 2020 was as follows:
Nonvested Balance, June 28, 2020
−Removed: Nonvested Balance, September 27, 2020
−Removed: As of September 27, 2020, all compensation cost related to outstanding stock options granted under our omnibus stock incentive plan has been recognized.
−Removed: As of September 27, 2020, there was approximately $ 1.4 million of total unrecognized compensation cost related to unvested restricted stock grants outstanding under the plan.
−Removed: This cost is expected to be recognized over a remaining weighted average period of 1.1 years.
+Added: Nonvested Balance, December 27, 2020
+Added: As of December 27, 2020, all compensation cost related to outstanding stock options granted under our omnibus stock incentive plan has been recognized.
+Added: As of December 27, 2020, there was approximately $ 1.2 million of total unrecognized compensation cost related to unvested restricted stock grants outstanding under the plan.
+Added: This cost is expected to be recognized over a remaining weighted average period of 1 year.
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.
10 unchanged sentences
A non-cash compensation expense charge of $ 4.2 million was also recorded during fiscal 2019 related to the future transfer of the excess assets in the Qualified Pension Plan to a STRATTEC defined contribution plan for subsequent pay-out to eligible STRATTEC employees based on a plan approved by the Board of Directors in June 2019.
−Removed: An additional $ 4.8 million non-cash compensation expense charge related to the final transfer and pay-out of the excess Qualified Pension Plan assets was recorded during our fiscal 2020, of which $ 2.2 million of non-cash compensation expense was recorded during the three month period ended September 29, 2019.
−Removed: As of December 29, 2019, the excess Qualified Pension Plan assets were transferred to our defined contribution plan and distributed to eligible STRATTEC employees, which completed the full termination of the Qualified Pension Plan.
+Added: An additional $ 4.8 million non-cash compensation expense charge related to the final transfer and pay-out of the excess Qualified Pension Plan assets was recorded during our fiscal 2020, of which $ 2.3 million of non-cash compensation expense was recorded during the three month period ended December 29, 2019 and $ 4.5 million of non-cash compensation expense was recorded during the six month period ended December 29, 2019.
+Added: During fiscal 2020, the excess Qualified Pension Plan assets were transferred to our defined contribution plan and distributed to eligible STRATTEC employees, which completed the full termination of the Qualified Pension Plan.
We have a noncontributory Supplemental Executive Retirement Plan (“SERP”), which is a nonqualified defined benefit plan.
The SERP is funded through a Rabbi Trust with TMI Trust Company.
−Removed: Under the SERP, as amended December 31, 2013, participants
−Removed: received an accrued lump-sum benefit as of December 31, 2013, which was credited to each participant’s account.
−Removed: Subsequent to December 31, 2013, each eligible part icipant 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.
+Added: 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.
+Added: 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.
−Removed: The Rabbi Trust assets had a value of $ 2.9 million at both September 27 , 2020 and June 2 8, 2020 and are included in Other Long-Term Assets in the accompanying Condens ed Consolidated Balance Sheets.
+Added: The Rabbi Trust assets had a value of $ 3.3 million at December 27, 2020 and $ 2.9 million at June 28, 2020 and are included in Other Long-Term Assets in the accompanying Condensed Consolidated Balance Sheets.
We also sponsor a postretirement health care plan for all U.S.
3 unchanged sentences
The postretirement health care plan is unfunded.
−Removed: The service cost component of the net periodic benefit costs under these plans is allocated between Cost of Goods Sold and Engineering, Selling and Administrative Expenses while the remaining components of the net periodic benefit costs are included in Other Expense, net in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income.
+Added: The service cost component of the net periodic benefit costs under these plans is allocated between Cost of Goods Sold and Engineering, Selling and Administrative Expenses while the remaining components of the net periodic benefit costs are included in Other (Expense) Income, net in the accompanying Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss).
The following table summarizes the net periodic benefit cost recognized for each of the periods indicated under these plans (in thousands):
3 unchanged sentences
Three Months Ended
−Removed: September 27,
−Removed: September 29,
−Removed: September 27,
−Removed: September 29,
Interest Cost
2 unchanged sentences
Net Periodic Benefit Cost
+Added: SERP Benefits
+Added: Postretirement Benefits
+Added: Six Months Ended
+Added: Six Months Ended
+Added: Interest Cost
+Added: Amortization of Prior Service Credit
+Added: Amortization of Unrecognized Net Loss
+Added: Net Periodic Benefit Cost
Accumulated Other Comprehensive Loss
The following tables summarize the changes in accumulated other comprehensive loss (“AOCL”) for each period presented (in thousands):
−Removed: Three Months Ended September 27, 2020
+Added: Three Months Ended December 27, 2020
Postretirement
Benefit Plans
−Removed: Balance, June 28, 2020
+Added: Balance, September 27, 2020
Other Comprehensive Income Before Reclassifications
9 unchanged sentences
Controlling Interest
+Added: Balance, December 27, 2020
+Added: Three Months Ended December 29, 2019
+Added: Postretirement
+Added: Benefit Plans
Balance, September 29, 2019
−Removed: Three Months Ended September 29, 2019
+Added: Other Comprehensive Income Before Reclassifications
+Added: Net Other Comprehensive Income Before
+Added: Reclassifications
+Added: Reclassifications:
+Added: Prior Service Credits (A)
+Added: Unrecognized Net Loss (A)
+Added: Total Reclassifications Before Tax
+Added: Net Reclassifications
+Added: Other Comprehensive Income
+Added: Other Comprehensive Income Attributable to Non-
+Added: Controlling Interest
+Added: Balance, December 29, 2019
+Added: Six Months Ended December 27, 2020
Postretirement
1 unchanged sentence
Balance, June 28, 2020
−Removed: Other Comprehensive Loss Before Reclassifications
−Removed: Net Other Comprehensive Loss Before
+Added: Other Comprehensive Income Before Reclassifications
+Added: Net Other Comprehensive Income Before
Reclassifications
7 unchanged sentences
Controlling Interest
−Removed: Balance, September 29, 2019
−Removed: Amounts reclassified are included in the computation of net periodic benefit cost, which is included in Other Expense, net in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income.
+Added: Balance, December 27, 2020
+Added: Six Months Ended December 29, 2019
+Added: Postretirement
+Added: Benefit Plans
+Added: Balance, June 30, 2019
+Added: Other Comprehensive Income Before Reclassifications
+Added: Net Other Comprehensive Income Before
+Added: Reclassifications
+Added: Reclassifications:
+Added: Prior Service Credits (A)
+Added: Unrecognized Net Loss (A)
+Added: Total Reclassifications Before Tax
+Added: Net Reclassifications
+Added: Other Comprehensive Income
+Added: Other Comprehensive Income Attributable to Non-
+Added: Controlling Interest
+Added: Balance, December 29, 2019
+Added: Amounts reclassified are included in the computation of net periodic benefit cost, which is included in Other (Expense) Income, net in the accompanying Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss).
See Pension and Postretirement Benefits note to these Notes to Condensed Consolidated Financial Statements above.
7 unchanged sentences
In addition, during the fourth quarter of the prior fiscal year, we produced additional finished goods inventory in anticipation of our OEM customers pipeline fill to their dealers once vehicle production began starting up in June 2020.
−Removed: During the first quarter ended September 2020, the Company experienced a strong sales recovery as our customers ramped up vehicle production as they restarted their assembly plant operations in order to replenish low inventory levels at the dealers.
+Added: During the six month period ended December 27, 2020, the Company experienced a strong sales recovery as our customers ramped up vehicle production as they restarted their assembly plant operations in order to replenish low inventory levels at the dealers.
Likewise, our manufacturing operations in Milwaukee, WI and in Mexico ramped up production to meet this increased sales demand.
−Removed: However, these actions were, and continue to be hampered by, requirements imposed by the Mexican Government at our Mexican facilities that continue to limit operating capacity in Mexico due to COVID-19 which may in the future impact our ability to meet customer sales demand depending upon their order levels.
+Added: However, these actions were, and continue to be hampered by, requirements imposed by the Mexican Government at our Mexican facilities that continue to limit operating capacity in Mexico due to COVID-19 which may in the future impact our ability to meet customer sales demand depending upon fluctuations in their order levels.
The sales outlook over the next few quarters appears strong as our customers continue to restock dealer inventories.
1 unchanged sentence
Analysis of Results of Operations
−Removed: Three months ended September 27, 2020 compared to the three months ended September 29, 2019
+Added: Three months ended December 27, 2020 compared to the three months ended December 29, 2019
Three Months Ended
−Removed: September 27,
−Removed: September 29,
Net Sales (in millions)
1 unchanged sentence
Three Months Ended
−Removed: September 27,
−Removed: September 29,
General Motors Company
4 unchanged sentences
Hyundai / Kia
−Removed: The increase in sales to General Motors Company in the current year quarter as compared to the prior year quarter was attributed to higher production volumes on models for which we supply components.
+Added: The increase in sales to General Motors Company in the current year quarter as compared to the prior year quarter was attributed to higher production volumes and content on models for which we supply components, and in particular on the Chevrolet Silverado.
The impact of the UAW strike reduced net sales by an estimated $7.0 million in the prior year quarter.
−Removed: Sales to Fiat Chrysler Automobiles decreased slightly in the current year quarter as compared to the prior year quarter due to lower vehicle produc tion volumes on the FCA minivans for which we supply components.
+Added: Sales to Fiat Chrysler Automobiles (FCA) decreased in the current year quarter as compared to the prior year quarter due to lower vehicle production volumes on the FCA minivans for which we supply components.
The Dodge Grand Caravan minivan went out of production during July 2020.
−Removed: Sales to Ford Motor Company , Tier 1 Customers and Commercial and Other OEM Customers were flat in the current year quarter compared to the prior year quarter.
−Removed: Sales to Tier 1 Customers, Commercial and Other OEM Customers primarily represent purchasers of vehicle access control products, such as latches, key fobs, driver controls, steering column locks and door handles , that we have developed in recent years to complement our historic core business of locks and keys.
−Removed: The in creased sales to Hyundai / Kia in the current year quarter as compared to the prio r year quarter were due to higher levels of production on their new, recently launched Kia Sedona minivan for which we supply components.
+Added: Sales to Ford Motor Company increased in the current year quarter as compared to the prior year quarter due to higher product content, and in particular for the new power tailgate program on the F-150 pickup trucks starting during the current quarter.
+Added: Sales to Tier 1 customers increased in the current year quarter in comparison to the prior year quarter as a result of higher sales volume on product ultimately used on General Motors and FCA type vehicles.
+Added: Sales to Commercial and Other OEM Customers during the current year quarter were slightly lower in comparison to the prior year quarter.
+Added: Sales to 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.
+Added: The increased sales to Hyundai / Kia in the current year quarter as compared to the prior year quarter were due to higher levels of production on their recently launched new Kia Sedona minivan for which we supply components.
Three Months Ended
−Removed: September 27,
−Removed: September 29,
Cost of Goods Sold (in millions)
Direct material costs are the most significant component of our cost of goods sold and comprised $71.3 million or 67.8 percent of our cost of goods sold in the current year quarter compared to $59.7 million or 62.2 percent of our cost of goods sold in the prior year quarter.
−Removed: The increase in our direct material costs between these quarters of $2.0 million or 2.9 percent was due to increased sales volumes in the current year quarter as compared to the prior year quarter and increased obsolescence costs in the current year quarter resulting from the discontinuance of a customer program.
+Added: The increase in our direct material costs between these quarters of $11.6 million or 19.4 percent was due to increased sales volumes in the current year quarter as compared to the prior year quarter.
The increase in our direct material costs as a percentage of our cost of goods sold in the current year quarter as compared to the prior year quarter was due to reduced labor and overhead costs between periods as discussed below.
The remaining components of our cost of goods sold consist of labor and overhead costs which decreased $2.5 million or 6.9 percent to $33.8 million in the current year quarter from $36.3 million in the prior year quarter.
−Removed: The prior year quarter costs included a $1.4 million non-cash compensation expense charge related to the transfer of excess Qualified Pension Plan assets as described under Pension and Postretirement Benefits within Notes to Condensed Consolidated Financial Statement included herein.
−Removed: Additionally, labor and overhead costs in the current year quarter were favorably impacted by cost improvements implemented at our Milwaukee, WI and Mexico facilities, along with a favorable Mexican peso to U.S.
−Removed: dollar exchange rate affecting our operations in Mexico, which favorable impacts were partially offset by an increase in the variable portion of our labor and overhead costs as a result of the increase in sales volumes in the current year quarter as compared to the prior year quarter.
+Added: The current year quarter included a loss on the disposal of property, plant and equipment of $1.2 million compared to $88,000 in the prior year quarter.
+Added: The prior year quarter costs included a $1.4 million non-cash compensation expense charge related to the transfer of excess Qualified Pension Plan assets as described under Pension and Postretirement Benefits within Notes to Condensed Consolidated Financial Statements included elsewhere herein.
+Added: Additionally, labor and overhead costs in the current year quarter were favorably impacted by cost improvements implemented at our Milwaukee, WI and Mexico facilities in response to the COVID-19 pandemic, along with a favorable Mexican peso to U.S.
+Added: dollar exchange rate affecting our operations in Mexico.
+Added: These favorable impacts were partially offset by an increase in the variable portion of our labor and overhead costs as a result of the increase in sales volumes in the current year quarter as compared to the prior year quarter and an increase of approximately $970,000 in expense provisions for the accrual of bonuses under our incentive bonus plan between quarters.
dollar value of our Mexican operations was favorably impacted by approximately $1.4 million in the current year quarter as compared to the prior year quarter due to a favorable Mexican peso to U.S.
3 unchanged sentences
Three Months Ended
−Removed: September 27,
−Removed: September 29,
Gross Profit (in millions)
Gross Profit as a percentage of net sales
−Removed: Gross profit dollars increased in the current year quarter as compared to the prior year quarter as a result of both an increase in sales and an increase in cost of goods sold between periods, as discussed above.
+Added: Gross profit dollars increased in the current year quarter as compared to the prior year quarter as a result of an increase in sales between periods, which was partially offset by an increase in cost of goods sold between periods, as discussed above.
Gross profit as a percentage of net sales increased between periods.
The increase was due to the prior year quarter non-cash compensation expense charge as well as cost improvements implemented at our Milwaukee and Mexico production facilities in the current year quarter as compared to the prior year quarter and a favorable Mexican peso to U.S.
−Removed: dollar exchange rate affecting our operations in Mexico as discussed above.
+Added: dollar exchange rate affecting our operations in Mexico, all of which were partially offset by an increase in expense provisions for the accrual of bonuses under our incentive bonus plan as discussed above.
Engineering, selling and administrative expenses in the current year quarter and prior year quarter were as follows:
Three Months Ended
−Removed: September 27,
−Removed: September 29,
Expenses (in millions)
Expenses as a percentage of net sales
−Removed: The decrease in engineering, selling and administrative expenses in the current year quarter decreased in comparison to the prior year quarter due to lower new product development costs, a temporary reduction in salary work force wages, permanent layoffs, and improved operating expense management in the current year quarter as compared to the prior year quarter.
−Removed: Additionally, the prior year quarter costs included an $862,000 non-cash compensation expense charge related to the transfer of excess Qualified Pension
−Removed: Plan assets as described under Pension and Postretirement Benefits within Notes to Condensed Consolidated Financial Statement included herein.
−Removed: Income from operations was $11.2 million in the current year quarter compared to $2.9 million in the prior year quarter due to an increase in gross profit margin dollars and a decrease in engineering, selling and administrative expenses between quarters, all as discussed above.
−Removed: The equity earnings of joint ventures was $825,000 in the current year quarter compared to $484,000 in the prior year quarter.
−Removed: Higher profitability from our Vehicle Access Systems Technology LLC (“VAST LLC”) joint ventures is due to higher profitability in our VAST China operation between periods.
+Added: Engineering, selling and administrative expenses in the current year quarter decreased in comparison to the prior year quarter due to a customer reimbursement of engineering development costs previously incurred in prior periods of $1.5 million, which reimbursement was agreed to in the current year quarter, a temporary reduction in salary work force wages, permanent layoffs, and improved operating expense management in the current year quarter as compared to the prior year quarter.
+Added: Additionally, the prior year quarter costs included an $869,000 non-cash compensation expense charge related to the transfer of excess Qualified Pension Plan assets as described under Pension and Postretirement Benefits within Notes to Condensed Consolidated Financial Statements included elsewhere herein.
+Added: These favorable impacts were partially offset by an increase of approximately $780,000 in expense provisions for the accrual of bonuses under our incentive bonus plan between quarters.
+Added: Income from operations was $11.9 million in the current year quarter compared to a loss from operations of $1.8 million in the prior year quarter due to an increase in gross profit margin dollars and a decrease in engineering, selling and administrative expenses between quarters, all as discussed above.
+Added: The equity earnings of joint ventures was $1.1 million in the current year quarter compared to $492,000 in the prior year quarter.
+Added: Higher profitability from our Vehicle Access Systems Technology LLC (“VAST LLC”) joint ventures was due to higher net sales and improved profitability in our VAST China operation between periods.
+Added: VAST China’s profitability in the current year quarter was partially offset by startup costs for their new plant in Jingzhou, China and by costs associated with the closure of our VAST China plant in Fuzhou, China, which operations were consolidated into the new Jingzhou facility.
+Added: We continue to believe these actions will give VAST China added capacity, greater operating efficiencies and a broader geographic footprint in the China market going forward.
+Added: VAST LLC, including VAST China, is a crucial part of our global strategy and we anticipate that it will contribute to our overall long term market strength as it continues to grow.
Our VAST LLC joint ventures in India and Brazil continue to report losses due to our limited amount of business in both regions.
−Removed: Included in Other Expense, net in the current year quarter and prior year quarter were the following items (in thousands):
+Added: Included in Other (Expense) Income, net in the current year quarter and prior year quarter were the following items (in thousands):
Three Months Ended
−Removed: September 27,
−Removed: September 29,
Foreign Currency Transaction Loss
Unrealized Gain on Peso Forward Contracts
−Removed: Realized Loss on Peso Forward Contracts
+Added: Realized Gain on Peso Forward Contracts
Pension and Postretirement Plans Cost
−Removed: Rabbi Trust Loss
+Added: Rabbi Trust Gain
Foreign currency transaction losses during the current year quarter and prior year quarter resulted from activity associated with foreign denominated assets held by our Mexican subsidiaries.
−Removed: We entered into the Mexican peso currency forward contracts to minimize earnings volatility resulting from changes in exchange rates affecting the U.S.
+Added: We have historically entered into the Mexican peso currency forward contracts to minimize earnings volatility resulting from changes in exchange rates affecting the U.S.
dollar cost of our Mexican operations.
−Removed: Unrealized gains and losses on the peso forward contracts recognized as a result of mark-to-market adjustments as of September 27, 2020 may or may not be realized in future periods, depending on actual Mexican peso to U.S.
−Removed: dollar exchange rates experienced during the balance of the contract period.
Pension and postretirement plan impacts include the components of net periodic benefit cost other than the service cost component.
1 unchanged sentence
The investments held in the Trust are considered trading securities.
−Removed: Our effective tax rate was 13.5% and 10.0% for the three months ended September 27, 2020 and September 29, 2019, respectively.
+Added: Our effective tax rate was 17.2% and 26.7% for the three months ended December 27, 2020 and December 29, 2019, respectively.
Effective July 20, 2020, the U.S Treasury Department finalized and enacted previously proposed regulations regarding the Global Intangible Low Taxed Income (GILTI) tax provisions of the Tax Cuts and Jobs Act of 2017 (TCJA).
2 unchanged sentences
With the enactment of these final regulations, we are now eligible for an exclusion from GILTI since we meet the provisions for the GILTI High-Tax exception included in the final regulations.
+Added: During the three month period ended December 29, 2019, our effective tax rate was impacted by the discrete impact of the non-cash compensation expense, as discussed above under Pension and Postretirement Benefits within Notes to Condensed Consolidated Financial Statements included elsewhere herein.
+Added: 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.
+Added: 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.
+Added: tax purposes.
+Added: Six months ended December 27, 2020 compared to the six months ended December 29, 2019
+Added: Six Months Ended
+Added: Net Sales (in millions)
+Added: Net sales to each of our customers or customer groups in the current year period and prior year period were as follows (in millions):
+Added: Six Months Ended
+Added: General Motors Company
+Added: Fiat Chrysler Automobiles
+Added: Ford Motor Company
+Added: Commercial and Other OEM Customers
+Added: Tier 1 Customers
+Added: Hyundai / Kia
+Added: The increase in sales to General Motors Company in the current year period as compared to the prior year period was attributed to higher production volumes and content on models for which we supply components, and in particular on the Chevrolet Silverado.
+Added: The impact of the UAW strike reduced net sales by an estimated $10 million in the prior year period.
+Added: Sales to Fiat Chrysler Automobiles (FCA) decreased in the current year period as compared to the prior year period due to lower vehicle production volumes on the FCA minivans for which we supply components.
+Added: The Dodge Grand Caravan minivan went out of production during July 2020.
+Added: Sales to Ford Motor Company increased in the current year period as compared to the prior year period due to higher product content, and in particular for the new power tailgate program on the F-150 pickup trucks starting during the quarter ended December 27, 2020.
+Added: Sales to Tier 1 customers increased in the current year period in comparison to the prior year period as a result of higher sales volume on product ultimately used on General Motors and FCA type vehicles.
+Added: Sales to Commercial and Other OEM Customers during the current year period were slightly lower in comparison to the prior year period.
+Added: Sales to 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.
+Added: The increased sales to Hyundai / Kia in the current year period as compared to the prior year period were due to higher levels of production on their recently launched new Kia Sedona minivan for which we supply components.
+Added: Six Months Ended
+Added: Cost of Goods Sold (in millions)
+Added: Direct material costs are the most significant component of our cost of goods sold and comprised $141.9 million or 68.0 percent of our cost of goods sold in the current year period compared to $128.2 million or 64.1 percent of our cost of goods sold in the prior year period.
+Added: The increase in our direct material costs between these periods of $13.7 million or 10.7 percent was due to increased sales volumes in the current year period as compared to the prior year period and increased obsolescence costs in the current year period resulting from the discontinuance of a customer program.
+Added: The increase in our direct material costs as a percentage of our cost of goods sold in the current year period as compared to the prior year period was due to reduced labor and overhead costs between periods as discussed below.
+Added: The remaining components of our cost of goods sold consist of labor and ove rhead costs which decreased $4.9 million or 6.8 percent to $66.9 mil lion in the current year period from $71.8 m illion in the prior year period .
+Added: The current year period included a loss on disposal of property, plant and equipment of $1.4 million compared to $283,000 in the prior year period.
+Added: The prior year period costs included a $2.7 million non-cash compensation expense charge related to the transfer of excess Qualified Pension Plan assets as described under Pension and Postretirement Benefits within Notes to Condensed Consolidated Financial Statement s included elsewhere herein.
+Added: Additionally, labor and overhead c osts in the current year period were favorably impacted by cost improvements implemented at our Milw aukee, WI and Mexico facilities in response to the COVID-19 pandemic, along with a favorable Mexican peso to U.S.
+Added: dollar exchange rate affecting our operations in Mexico.
+Added: These favorable impacts were partially offset by an increase in the variable portion of our labor and overhead costs as a result of the increase in sales vol umes in the current year period as co mpared to the prior year period and an increase o f approximately $1.6 million in expense provisions for the accrual of bonuses under our incentive bonus plan between periods .
+Added: dollar value of our Mexican operations was favorabl y impacted by approximately $3.4 mil lion in the current year period as co mpared to the prior year period due to a favorable Mexican peso to U.S.
+Added: dollar excha nge rate between these year-to-date periods .
+Added: The average U.S.
+Added: dollar / Mexican peso exchange rate increased to approximately 21.48 pesos to the dollar in the current year period from approximately 19.46 pesos to the dollar in the prior year period .
+Added: Six Months Ended
+Added: Gross Profit (in millions)
+Added: Gross Profit as a percentage of net sales
+Added: Gross profit dollars increased in the current year period as compared to the prior year period as a result of an increase in sales between periods, which was partially offset by an increase in cost of goods sold between periods, as discussed above.
+Added: Gross profit as a percentage of net sales increased between periods.
+Added: The increase was due to the prior year period non-cash compensation expense charge as well as cost improvements implemented at our Milwaukee and Mexico production facilities in the current year period as compared to the prior year period and a favorable Mexican peso to U.S.
+Added: dollar exchange rate affecting our operations in Mexico, all of which were partially offset by an increase in expense provisions for the accrual of bonuses under our incentive bonus plan as discussed above.
+Added: Engineering, selling and administrative expenses in the current year period and prior year period were as follows:
+Added: Six Months Ended
+Added: Expenses (in millions)
+Added: Expenses as a percentage of net sales
+Added: Engineering, selling and administrative expenses in the current year period decreased in comparison to the prior year period due to a customer reimbursement of engineering development costs previously incurred in prior periods of $1.5 million, which reimbursement was agreed to in the current year period, lower new product development costs, a temporary reduction in salary work force wages, permanent layoffs, and improved operating expense management in the current year period as compared to the prior year period.
+Added: Additionally, the prior year period costs included a $1.7 million non-cash compensation expense charge related to the transfer of excess Qualified Pension Plan assets as described under Pension and Postretirement Benefits within Notes to Condensed Consolidated Financial Statements included elsewhere herein.
+Added: These favorable impacts were partially offset by an increase of approximately $1.3 million in expense provisions for the accrual of bonuses under our incentive bonus plan between periods.
+Added: Income from operations was $23.1 million in the current year period compared to $1.2 million in the prior year period due to an increase in gross profit margin dollars and a decrease in engineering, selling and administrative expenses between periods, all as discussed above.
+Added: The equity earnings of joint ventures was $1.9 million in the current year period compared to $976,000 in the prior year period.
+Added: Higher profitability from our VAST LLC joint venture was due to higher net sales and improved profitability in our VAST China operation between periods.
+Added: VAST China’s profitability in the current year period was partially offset by startup costs for their new plant in Jingzhou, China and by costs associated with the closure of our VAST China plant in Fuzhou, China, which operations were consolidated into the new Jingzhou facility.
+Added: We continue to believe these actions will give VAST China added capacity, greater operating efficiencies and a broader geographic footprint in the China market going forward.
+Added: VAST LLC, including VAST China, is a crucial part of our global strategy and we anticipate that it will contribute to our overall long term market strength as it continues to
+Added: Our VAST LLC joint ventures in India and Brazil continue to report losses due to our limited amount of business in both regions.
+Added: Included in Other (Expense) Income, net in the current year period and prior year period were the following items (in thousands):
+Added: Six Months Ended
+Added: Foreign Currency Transaction Loss
+Added: Unrealized Gain on Peso Forward Contracts
+Added: Realized Gain on Peso Forward Contracts
+Added: Pension and Postretirement Plans Cost
+Added: Rabbi Trust Gain
+Added: Foreign currency transaction losses during the current year period and prior year period resulted from activity associated with foreign denominated assets held by our Mexican subsidiaries.
+Added: We have historically entered into the Mexican peso currency forward contracts to minimize earnings volatility resulting from changes in exchange rates affecting the U.S.
+Added: dollar cost of our Mexican operations.
+Added: Pension and postretirement plan impacts include the components of net periodic benefit cost other than the service cost component.
+Added: Our Rabbi Trust assets fund our Amended and Restated Supplemental Executive Retirement Plan.
+Added: The investments held in the Trust are considered trading securities.
+Added: Our effective tax rate was 15.4% and (6.7)% for the six months ended December 27, 2020 and December 29, 2019, respectively.
+Added: 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).
+Added: Prior to this enactment, GILTI represented a significant U.S.
+Added: income tax on our foreign earnings during fiscal 2020.
+Added: With the enactment of these final regulations, we are now eligible for an exclusion from GILTI since we meet the provisions for the GILTI High-Tax exception included in the final regulations.
In addition, the enactment of the new regulations and our eligibility for the GILTI High-Tax exception are retroactive to the original enactment of the GILTI tax provision, which includes our 2020 fiscal year.
−Removed: As a result of the newly enacted regulations, we recorded an income tax benefit of $675,000 during the three month period ended September 27, 2020.
−Removed: During the three month period ended September 29, 2019, our effective tax rate was impacted by the discrete impact of the non-cash compensation expense, as discussed under Pension and Postretirement Benefits below.
+Added: As a result of the newly enacted regulations, we recorded an income tax benefit of $675,000 during the six month period ended December 27, 2020.
+Added: During the six month period ended December 29, 2019, our effective tax rate was impacted by the discrete impact of the non-cash compensation expense, as discussed above under Pension and Postretirement Benefits within Notes to Condensed Consolidated Financial Statements included elsewhere herein.
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.
3 unchanged sentences
Working Capital (in millions)
−Removed: September 27,
Current Assets
4 unchanged sentences
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.
−Removed: A summary of our outstanding receivable balances from our major customers as of September 27, 2020 was as follows (in millions):
+Added: A summary of our outstanding receivable balances from our major customers as of December 27, 2020 was as follows (in millions):
General Motors Company
3 unchanged sentences
We earn a portion of our operating income in Mexico.
−Removed: As of September 27, 2020, $4.2 million of our $12.0 million cash and cash equivalents balance was held in Mexico.
+Added: As of December 27, 2020, $5.2 million of our $10.4 million cash and cash equivalents balance was held in Mexico.
These funds are available for repatriation as deemed necessary.
Cash Flow Analysis (in millions)
−Removed: Three Months Ended
−Removed: September 27,
−Removed: September 29,
−Removed: Cash Flows from (in millions):
+Added: Six Months Ended
+Added: Cash Flows from:
Operating Activities
1 unchanged sentence
Financing Activities
−Removed: The decrease in cash provided by operating activities between periods is due to a net increase in our working capital requirements between periods of approximately $13.2 million which was partially offset by improvement in our financial results between periods.
+Added: The decrease in cash provided by operating activities between periods is due to a net increase in our working capital requirements between periods of approximately $20.0 million which was mostly offset by improvement in our financial results between periods.
The net increase in our working capital requirements between periods was made up of the following working capital changes (in millions):
Increase (Decrease) in Working Capital Requirements
−Removed: Three Months Ended
−Removed: September 27,
−Removed: September 29,
+Added: Six Months Ended
Accounts Receivable
1 unchanged sentence
The period over period change in the accounts receivable balances is the result of the amount and timing of sales during each period.
−Removed: The increase in accounts receivable balances during the current yea r period refle cted reduced sales levels from th e 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 .
−Removed: The reduction in accounts receivable b alances during the prior year period reflected reduced sales le vels toward the end of our September 2019 period as comp ared to the end of our June 2019 period.
−Removed: The period over period cha nge in inventory reflected a de crease in inventory balances during the current year period due to an inventory build-up as of June 2020 resulting from our OEM customers reducing production schedules and closing their assembly plants due to COVID-19 and an increase in inventory balances during the prior year period due to an inventory build-up of General Motors components stemming from the impacts of the General Motors strike .
−Removed: The period over period change in other assets reflected a reduction in our other assets balances in the prior year period, which was driven by changes in customer tooling balances.
−Removed: Customer tooling balances consisted of costs incurred for the development of tooling that will be directly reimbursed by our customer whose parts are produced from the too l.
−Removed: The prior year change in customer tooling balances was the result of the timing of tooling development spending required to meet customer production requirements and related customer billing for tooling cost reimbursement.
−Removed: The period over period change in accounts payable and accrued liability balances was primarily the result of an increase in accounts p ayable balances during the current year period.
−Removed: Accounts payable balances were significantly reduced as of June 2020 due to the impact of COVID-19.
−Removed: Accounts payable balances increase d as of September 2020 as our business ramped-up along with the automotive industry.
−Removed: Accounts payable balances reflect the timing of purchases and payments with our vendors based on normal payment terms.
+Added: The increase in accounts receivable balances during the current year period reflected reduced sales levels from the end of March 2020 through June 2020, which reduction was primarily due to our OEM customers reducing production schedules and closing their assembly plants due to the COVID-19 outbreak.
+Added: The reduction in accounts receivable balances during the prior year period reflected reduced sales levels toward the end of our December 2019 period as compared to the end of our June 2019 period.
+Added: The period over period change in inventory reflected an increase in inventory balances during the current year period due to an inventory build-up as of December 2020 as we continued to build inventory while our OEM customers were shut-down during late December and an increase in inventory balances during the prior year period due to an inventory build-up of General Motors components stemming from the impacts of the General Motors strike occurring during our prior fiscal year.
+Added: The period over period change in other assets reflected a reduction in our other assets balances in the current year period and in the prior year period, which was driven by changes in customer tooling balances.
+Added: Customer tooling balances consisted of costs incurred for the development of tooling that will be directly reimbursed by our customer whose parts are produced from the tool.
+Added: The change in customer tooling balances each year was the result of the timing of tooling development spending required to meet customer production requirements and related customer billing for tooling cost reimbursement.
+Added: The period over period change in accounts payable and accrued liability balances was primarily the result of an increase in accounts payable balances during the current year period and a decrease in accounts payable balances during the prior year period.
+Added: Accounts payable balances were significantly reduced as of June 2020 due to the impact of COVID-19 and the lower production levels stemming from that impact.
+Added: Accounts payable balances increased as of September 2020 as our business ramped-up along with the automotive industry.
+Added: Accounts payable balances reflect the timing of purchases and payments with our vendors based on normal, established payment terms.
Net cash used by investing activities of $4.7 million during the current year period and $7.4 million during the prior year period were the result of capital expenditures made in support of requirements for new product programs and the upgrade and replacement of existing equipment.
+Added: Net cash used by investment activities during the current year period also included an investment in our VAST LLC joint venture of $100,000.
+Added: The investment was made for the purpose of funding general operating expenses for Sistema de Acesso Veicular Ltda, our Brazilian joint venture.
Net cash used in financing activities during the current year period of $13.5 million included repayments of borrowings under credit facilities of $13.0 million and $490,000 of dividend payments to non-controlling interests in our subsidiaries.
−Removed: Net cash used in financing activities of $7.3 million during the prior year period included repayments of borrowings under credit facilities of $6.0 million, $522,000 of regular quarterly dividend payments to shareholders and $980,000 of dividend payments to non-controlling interests in our subsidiaries.
+Added: Net cash used in financing activities of $11.5 million during the prior year period included repayments of borrowings under credit facilities of $10.0 million, $1.0 million of regular quarterly dividend payments to shareholders and $980,000 of dividend payments to non-controlling interests in our subsidiaries.
VAST LLC Cash Requirements
We currently anticipate that VAST China has adequate debt facilities in place over the next fiscal year to cover the future operating and capital requirements of its business.
−Removed: No capital contributions were made to VAST LLC during the three months ended September 27, 2020 or September 29, 2019.
−Removed: Due to economic conditions in Brazil, we anticipate Sistema de Acesso Veicular Ltda will require a capital contribution of approximately $300,000 collectively by all VAST LLC partners to fund operations during fiscal year 2021.
−Removed: STRATTEC’s portion of the capital contributions is anticipated to be $100,000.
−Removed: During the three months ended September 27, 2020, VAST LLC made no capital contributions to Minda-VAST Access Systems.
+Added: During the six months ended December 27, 2020, capital contributions totaling $300,000 were made to VAST LLC for purposes of funding operations in Brazil.
+Added: STRATTEC’s portion of the capital contribution totaled $100,000.
+Added: No capital contributions were made to VAST LLC during the six months ended December 29, 2019.
+Added: Due to economic conditions in Brazil, we anticipate Sistema de Acesso Veicular Ltda may require an additional capital contribution of approximately $300,000 collectively by all VAST LLC partners to fund operations during the remaining of our fiscal year 2021.
+Added: STRATTEC’s remaining portion of the capital contributions is anticipated to be $100,000.
+Added: During the six months ended December 27, 2020, VAST LLC made no capital contributions to Minda-VAST Access Systems.
Due to Minda-VAST Access System recently experiencing losses and due to the COVID-19 outbreak, future capital contributions may be required.
Future Capital Expenditures
−Removed: We anticipate capital expenditures will be approximately $12 million in total in fiscal 2021, of which $1.5 million has been made through September 27, 2020, in support of requirements for new product programs and the upgrade and replacement of existing equipment.
+Added: We anticipate capital expenditures will be approximately $12 million in total in fiscal 2021, of which $4.6 million has been made through December 27, 2020, in support of requirements for new product programs and the upgrade and replacement of existing equipment.
Stock Repurchase Program
Our Board of Directors has authorized a stock repurchase program to buy back outstanding shares of our common stock.
−Removed: Shares authorized for buy back under the program totaled 3,839,395 at September 27, 2020.
−Removed: A total of 3,655,322 shares have been repurchased over the life of the program through September 27, 2020, at a cost of approximately $136.4 million.
−Removed: No shares were repurchased during the three month periods ended September 27, 2020 or September 29, 2019.
+Added: Shares authorized for buy back under the program totaled 3,839,395 at December 27, 2020.
+Added: A total of 3,655,322 shares have been repurchased over the life of the program through December 27, 2020, at a cost of approximately $136.4 million.
+Added: No shares were repurchased during the six month periods ended December 27, 2020 or December 29, 2019.
Additional repurchases may occur from time to time and are expected to continue to be funded by cash flow from operations and current cash balances.
9 unchanged sentences
Both credit facilities contain a restrictive financial covenant that requires the applicable borrower to maintain a minimum net worth level.
−Removed: As of September 27, 2020, we were in compliance with all financial covenants required by these credit facilities.
+Added: As of December 27, 2020, we were in compliance with all financial covenants required by these credit facilities.
The ADAC-STRATTEC Credit Facility includes an additional restrictive financial covenant that requires the maintenance of a minimum fixed charge coverage ratio.
−Removed: Outstanding borrowings under the STRATTEC Credit Facility totaled $13 million at September 27, 2020 and $18 million at June 28, 2020.
−Removed: The average outstanding borrowings and weighted average interest rate on the STRATTEC Credit Facility loans were approximately $17.2 million and 1.2 percent, respectively, during the three months ended September 27, 2020.
−Removed: Outstanding borrowings under the ADAC-STRATTEC Credit Facility totaled $17 million at September 27, 2020 and $17.0 million at June 28, 2020.
−Removed: The average outstanding borrowings and weighted average interest rate on the ADAC-STRATTEC Credit Facility loans were approximately $17.0 million and 1.4 percent, respectively, during the three months ended September 27, 2020.
+Added: Outstanding borrowings under the STRATTEC Credit Facility totaled $8 million at December 27, 2020 and $18 million at June 28, 2020.
+Added: The average outstanding borrowings and weighted average interest rate on the STRATTEC Credit Facility loans were approximately $13.7 million and 1.2 percent, respectively, during the six months ended December 27, 2020.
+Added: Outstanding borrowings under the ADAC-STRATTEC Credit Facility totaled $14 million at December 27, 2020 and $17.0 million at June 28, 2020.
+Added: The average outstanding borrowings and weighted average interest rate on the ADAC-STRATTEC Credit Facility loans were approximately $16.3 million and 1.4 percent, respectively, during the six months ended December 27, 2020.
Inflation and Other Changes in Prices
2 unchanged sentences
A portion of these increases have been offset by plan design changes and associate wellness initiatives.
−Removed: We have also been impacted by increases in the market price of metals (zinc, steel, brass, nickel silver and aluminum) and inflation in Mexico, which impacts the U.
+Added: We have also been impacted by fluctuations in the market price of metals (zinc, steel, brass, nickel silver and aluminum) and inflation in Mexico, which impacts the U.
dollar costs of our Mexican operations.
3 unchanged sentences
Refer to discussion under Notes to Condensed Consolidated Financial Statements:
−Removed: Derivative Instruments included herein.
+Added: Derivative Instruments included elsewhere herein.
Joint Ventures and Majority Owned Subsidiaries
−Removed: Refer to the discussion of Investment in Joint Ventures and Majority Owned Subsidiaries and discussion of Equity Earnings of Joint Ventures included in Notes to Condensed Consolidated Financial Statements included within this Form 10-Q.
+Added: Refer to the discussion of Investment in Joint Ventures and Majority Owned Subsidiaries and discussion of Equity Earnings of Joint Ventures included elsewhere in Notes to Condensed Consolidated Financial Statements within this Form 10-Q.
Item 3 Quantitative and Qualitative Disclosures About Market Risk
1 unchanged sentence
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.