##### Table of Contents



3Signs of Progress 2 0 0 7 A N N U A L
R E P O R T




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Signs of Progress Over the past several years,
STRATTEC has embarked on a journey
to transition its business through
the expansion of products, customers
and global capabilities. Like all
journeys, the roads we take are not
always as smooth or straight as we
might want. Progress is not always
as fast or as obvious as we plan.
Yet progress is being made, and the
signs are there. Those signs of
progress are welcome confirmation
that our journey is taking us to a
successful future for STRATTEC, its
shareholders and partners around the
world.




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##### 



2007 ANNUAL REPORT
 
  CONTENTS
 LETTER TO THE SHAREHOLDERS
    
    
    2FINANCIAL HIGHLIGHTS
    
    
    4COMPANY DESCRIPTION
    
    
    5STRATTEC EQUIPPED VEHICLE LIST
    
    
    10MANAGEMENTS DISCUSSION AND ANALYSIS
    
    
    11FINANCIAL STATEMENTS
    
    
    19REPORT OF MANAGEMENT
    
    
    36REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    
    
    37FINANCIAL SUMMARY
    
    
    39PERFORMANCE GRAPH
    
    
    40DIRECTORS
/ OFFICERS / SHAREHOLDERS INFORMATION
    
    
    41
  PROSPECTIVE INFORMATION




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LETTER TO THE SHAREHOLDERS
 
 AUGUST, 2007




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##### Table of Contents



LETTER TO THE SHAREHOLDERS




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##### Table of Contents



FINANCIAL HIGHLIGHTS
 (IN MILLIONS)
 
 2007
    
    2006
    
    2005Net Sales
    
    $
    167.7
    
    
    $
    181.2
    
    
    $
    190.3Gross Profit
    
    
    26.5
    
    
    
    37.0
    
    
    
    42.8Income from Operations
    
    
    6.3
    
    
    
    13.4
    
    
    
    22.0Net Income
    
    
    8.2
    
    
    
    12.5
    
    
    
    15.0Total Assets
    
    
    148.4
    
    
    
    154.3
    
    
    
    138.1Total Debt
    
    
    
    
    
    
    
    
    
    
    Shareholders Equity
    
    
    103.0
    
    
    
    110.3
    
    
    
    91.8
 ECONOMIC VALUE ADDED (EVA ® )
 ®
 Net Operating Profit After Cash-Basis Taxes
    
    
    
    
    
    $
    5.5Average Net Capital Employed
    
    $
    38.5Capital Cost
    
    
    11
    %4.2Economic Value Added
    
    
    
    
    
    $
    1.3
 ® ® ® ®
 Net Operating Profit After Cash-Basis Taxes:
 2007 Net Income as Reported
    
    $
    8.2Investment Income
    
    
    (3.1
    )Deferred Tax Provision
    
    
    (.4
    )Other
    
    
    .8Net Operating Profit After
Cash-Basis Taxes
    
    $
    5.5
 Average Monthly Net Capital Employed:
 Total Shareholders Equity as Reported at July 1, 2007
    
    $
    103.0Current Interest Bearing Assets
    
    
    (69.6
    )Long-Term Liabilities
    
    
    13.4Prepaid Pension Obligations
    
    
    (4.4
    )Long-Term Deferred Tax Asset
    
    
    (2.1
    )Other
    
    
    .5Net Capital Employed at July 1, 2007
    
    $
    40.8Impact of 12 Month Average
    
    
    (2.3
    )Average Monthly Net Capital Employed
    
    $
    38.5
 ®




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COMPANY DESCRIPTION
 
 BASIC
BUSINESS
  
 HISTORY
   
 PRODUCTS
  
  
  MARKETS




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##### Table of Contents



COMPANY DESCRIPTION
 
   
  
   CUSTOMER
FOCUS




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##### Table of Contents



COMPANY
DESCRIPTION
 
  
   
  
 O P E R A T I O N S
  ADVANCED
DEVELOPMENT




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##### Table of Contents



COMPANY DESCRIPTION
 
 VAST ALLIANCE
    
 ADAC
- STRATTEC de MEXICO




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##### Table of Contents



COMPANY DESCRIPTION
 
  SEASONAL NATURE OF THE BUSINESS
  GLOBAL PARTNERS
 
 1. STRATTEC  Milwaukee, Wisconsin
 2. STRATTEC de Mexico  Juarez, Mexico
 3. STRATTEC Componentes Automotrices  Juarez, Mexico
 4. ADAC-STRATTEC de Mexico  Juarez, Mexico
 5. ADAC Plastics, Inc.  Grand Rapids and Muskegan, Michigan
 6. ADAC Paintbox, Limited  United Kingdom
 7. WITTE Automotive  Velbert, Germany
 8. WITTE Automotive  Nejdek, Czech Republic
 9. VAST do Brasil  Sao Paulo, Brazil
 10. VAST Fuzhou  Fuzhou, China
 11. VAST Great Shanghai Co.  Shanghai, China
 12. VAST Japan  Tokyo, Japan
 ECONOMIC VALUE COMMITMENT
 ® ® ®




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VEHICLE LIST 
 V E H I C L E L I S T
2 0 0 8 V E H I C L E S We are proud to be associated with many of the quality vehicles
produced in North America and elsewhere. The following model year
2008 cars and light trucks are equipped with STRATTEC products. C A R S A N D C A R B A S E D U T I L I T Y V E H I C L E S Buick Allure            Chrysler PT Cruiser            Jeep Compass (Canada only) Chrysler Sebring            Jeep Patriot Buick Enclave            Dodge Avenger            Lincoln Town Car Buick LaCrosse            Dodge Caliber            Mercury Grand Marquis Buick Lucerne            Dodge Charger            Mercury Sable Cadillac XLR            Dodge Magnum            Opel GT (Europe only) Cadillac CTS            Dodge Journey            Pontiac G5 Cadillac DTS            Dodge Viper            Pontiac G6 Chevrolet Cobalt            Ford Crown Victoria            Pontiac G8 Chevrolet Equinox            Ford Mustang            Pontiac Solstice Chevrolet Corvette            Ford Taurus            Pontiac Torrent Chevrolet HHR            Ford Taurus X            Saturn Aura Chevrolet Impala            GMC Acadia            Saturn Outlook Chevrolet Malibu            Holden Commodore            Saturn Sky Chrysler 300/300C (Australia only) Suzuki XL7 Chrysler Pacifica            Honda Civic L I G H T T R U C K S , VA N S            A N D S P O RT U T I L I T Y            V E H I C L E S Cadillac Escalade            Dodge Nitro            Hummer H2 Cadillac Escalade ESV            Dodge Ram Pickup            Jeep Commander Cadillac Escalade EXT            Ford Expedition            Jeep Grand Cherokee Chevrolet Avalanche            Ford Expedition EL            Jeep Liberty Chevrolet Express Van            Ford Explorer            Jeep Wrangler/Wrangler Chevrolet Silverado Pickup            Ford Explorer Sport Trac            Unlimited Chevrolet Suburban            Ford F-Series Pickup            Lincoln Mark LT Pickup Chevrolet Tahoe            Ford F-Series Supercrew            Lincoln Navigator Chevrolet Trailblazer            Ford F-Series Super Duty            Lincoln Navigator L Chevrolet Uplander            Ford Ranger Pickup            Mazda B-Series Pickup Chrysler Aspen            GMC Envoy            Mercury Mountaineer Chrysler Town & Country            GMC Savana            Nissan Titan Dodge Grand Caravan            GMC Sierra Pickup            Pontiac Montana SV6 Dodge Dakota Pickup            GMC Yukon            Saab 9-7X Dodge Durango            GMC Yukon XL




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MANAGEMENTS DISCUSSION AND ANALYSIS
 
  RESULTS OF OPERATIONS
2007 Compared to 2006




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MANAGEMENTS DISCUSSION AND ANALYSIS
 
  RESULTS OF OPERATIONS
2006 Compared to 2005




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##### Table of Contents



MANAGEMENTS DISCUSSION AND ANALYSIS
 
       LIQUIDITY
AND CAPITAL RESOURCES




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##### Table of Contents



MANAGEMENTS DISCUSSION AND ANALYSIS
 
     CONTRACTUAL OBLIGATIONS
  Payments Due By PeriodLess Than
    
    
    
    
    
    
    
    
    
    
    More ThanContractual Obligation
    
    Total
    
    
    1 Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    5 YearsOperating Leases
    
    $
    1,358
    
    
    $
    560
    
    
    $
    544
    
    
    $
    254
    
    
    $
    Purchase Obligations
    
    
    644
    
    
    
    644
    
    
    
    
    
    
    
    
    
    
    
    Pension and Postretirement
Obligations (a)
    
    
    4,173
    
    
    
    4,173
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    6,175
    
    
    $
    5,377
    
    
    $
    544
    
    
    $
    254
    
    
    $
    
 
 (a)
    
    As disclosed in our Notes to Financial Statements, estimated cash
funding related to our pension and postretirement benefit plans totals $4.2 million in
2008. Because the timing of funding related to these plans beyond 2008 is uncertain, and
is dependent on future movements in interest rates and investment returns, changes in
laws and regulations, and other variables, pension and postretirement outflows beyond
2008 have not been included in the table above. JOINT VENTURES




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##### Table of Contents



MANAGEMENTS DISCUSSION AND ANALYSIS
 
   RECENTLY ISSUED ACCOUNTING STANDARDS
   CRITICAL ACCOUNTING POLICIES
  Pension and Postretirement Health Benefits 




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##### Table of Contents



MANAGEMENTS DISCUSSION AND ANALYSIS
 
       Other Reserves 
 Stock-Based Compensation 




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##### Table of Contents



MANAGEMENTS DISCUSSION AND ANALYSIS
 
 RISK FACTORS
  Loss of Significant Customers, Vehicle Content, Vehicle Models and Market Share 
  Cost Reduction 
 Cyclicality and Seasonality in the Automotive Market 
 Foreign Operations 
 Currency Exchange Rate Fluctuations 
 Sources of and Fluctuations in Market Prices of Raw Materials 
 Disruptions Due to Work Stoppages and Other Labor Matters 




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##### Table of Contents



MANAGEMENTS DISCUSSION AND ANALYSIS
 
  Environmental
and Safety Regulations 
 Highly Competitive Automotive Supply Industry 
  Program Volume and Pricing Fluctuations 
 Investments in Customer Program Specific Assets 




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##### Table of Contents



CONSOLIDATED STATEMENTS OF INCOME  (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
 Years EndedJuly 1, 2007
    
    
    July 2, 2006
    
    
    July 3, 2005NET SALES
    
    $
    167,707
    
    
    $
    181,197
    
    
    $
    190,314Cost of goods sold
    
    
    141,213
    
    
    
    144,151
    
    
    
    147,538GROSS PROFIT
    
    
    26,494
    
    
    
    37,046
    
    
    
    42,776Engineering, selling, and administrative expenses
    
    
    20,189
    
    
    
    22,067
    
    
    
    20,688Provision for doubtful accounts, net
    
    
    
    
    
    
    1,622
    
    
    
    80INCOME FROM OPERATIONS
    
    
    6,305
    
    
    
    13,357
    
    
    
    22,008Interest income
    
    
    3,611
    
    
    
    2,563
    
    
    
    1,169Interest expense
    
    
    
    
    
    
    
    
    
    
    Other income, net
    
    
    715
    
    
    
    960
    
    
    
    320Minority interest
    
    
    75
    
    
    
    
    
    
    
    INCOME BEFORE PROVISION FOR
INCOME TAXES
    
    
    10,706
    
    
    
    16,880
    
    
    
    23,497Provision for income taxes
    
    
    2,523
    
    
    
    4,403
    
    
    
    8,459NET INCOME
    
    $
    8,183
    
    
    $
    12,477
    
    
    $
    15,038EARNINGS PER SHARE:BASIC
    
    $
    2.30
    
    
    $
    3.36
    
    
    $
    3.97DILUTED
    
    $
    2.30
    
    
    $
    3.35
    
    
    $
    3.94AVERAGE SHARES OUTSTANDING:BASIC
    
    
    3,552
    
    
    
    3,716
    
    
    
    3,790DILUTED
    
    
    3,555
    
    
    
    3,720
    
    
    
    3,816




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##### Table of Contents



CONSOLIDATED BALANCE SHEETS  (IN THOUSANDS, EXCEPT SHARE AMOUNTS AND PER SHARE AMOUNTS)
 
 July 1, 2007
    
    
    July 2, 2006ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    65,491
    
    
    $
    65,712Receivables, less allowance for doubtful accounts
of $250 at July 1, 2007 and July 2, 2006
    
    
    26,890
    
    
    
    28,254Inventories
    
    
    7,166
    
    
    
    9,337Customer tooling in progress
    
    
    1,824
    
    
    
    1,422Deferred income taxes
    
    
    2,729
    
    
    
    1,541Other current assets
    
    
    8,464
    
    
    
    7,505Total current assets
    
    
    112,564
    
    
    
    113,771DEFERRED INCOME TAXES
    
    
    2,117
    
    
    
    INVESTMENT IN JOINT VENTURES
    
    
    2,813
    
    
    
    2,202PREPAID PENSION OBLIGATIONS
    
    
    4,385
    
    
    
    10,358OTHER LONG-TERM ASSETS
    
    
    41
    
    
    
    197PROPERTY, PLANT AND EQUIPMENT, NET
    
    
    26,526
    
    
    
    27,764$
    148,446
    
    
    $
    154,292LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable
    
    $
    16,575
    
    
    $
    17,701Accrued liabilities:Payroll and benefits
    
    
    6,280
    
    
    
    6,559Environmental
    
    
    2,655
    
    
    
    2,683Commitments and Contingencies  see note on page 28Income taxes
    
    
    664
    
    
    
    1,340Other
    
    
    5,307
    
    
    
    5,224Total current liabilities
    
    
    31,481
    
    
    
    33,507BORROWINGS UNDER LINE OF CREDIT
    
    
    
    
    
    
    DEFERRED INCOME TAXES
    
    
    
    
    
    
    4,266ACCRUED PENSION OBLIGATIONS
    
    
    2,855
    
    
    
    2,608ACCRUED POSTRETIREMENT OBLIGATIONS
    
    
    10,576
    
    
    
    3,636MINORITY INTEREST
    
    
    574
    
    
    
    SHAREHOLDERS EQUITY:Common stock, authorized 12,000,000 shares, $.01 par value,
issued 6,887,757 shares at July 1, 2007 and 6,880,457
shares at July 2, 2006
    
    
    69
    
    
    
    69Capital in excess of par value
    
    
    78,122
    
    
    
    77,175Retained earnings
    
    
    165,928
    
    
    
    157,745Accumulated other comprehensive loss
    
    
    (14,341
    )
    
    
    (2,958
    )Less: Treasury stock at cost (3,368,619 shares at
July 1, 2007 and 3,243,177 shares at July 2, 2006)
    
    
    (126,818
    )
    
    
    (121,756
    )Total shareholders equity
    
    
    102,960
    
    
    
    110,275$
    148,446
    
    
    $
    154,292




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##### Table of Contents



CONSOLIDATED STATEMENTS OF
SHAREHOLDERS EQUITY (IN THOUSANDS)
 AccumulatedCapital in
    
    
    
    
    
    
    OtherCommon
    
    
    Excess of
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury
    
    
    ComprehensiveStock
    
    
    Par Value
    
    
    Earnings
    
    
    Loss
    
    
    Stock
    
    
    IncomeBALANCE
JUNE 27, 2004
    
    $
    68
    
    
    $
    70,415
    
    
    $
    130,230
    
    
    $
    (5,385
    )
    
    $
    (105,476
    )Net Income
    
    
    
    
    
    
    
    
    
    
    15,038
    
    
    
    
    
    
    
    
    
    
    $
    15,038Translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    283
    
    
    
    
    
    
    
    283Minimum pension liability,
net of tax of $4,257
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,945
    )
    
    
    
    
    
    
    (6,945
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    8,376Purchase of
common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,999
    )Exercise of stock options
and employee stock
purchases, including
tax benefit of $956
    
    
    1
    
    
    
    4,509
    
    
    
    
    
    
    
    
    
    
    
    12BALANCE
JULY 3, 2005
    
    $
    69
    
    
    $
    74,924
    
    
    $
    145,268
    
    
    $
    (12,047
    )
    
    $
    (116,463
    )Net Income
    
    
    
    
    
    
    
    
    
    
    12,477
    
    
    
    
    
    
    
    
    
    
    $
    12,477Translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (317
    )
    
    
    
    
    
    
    (317
    )Minimum pension liability,
net of tax of $5,765
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,406
    
    
    
    
    
    
    
    9,406Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    21,566Purchase of
common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,306
    )Stock-Based Compensation
    
    
    
    
    
    
    1,118
    
    
    
    
    
    
    
    
    
    
    
    Exercise of stock options
and employee stock
purchases, including tax
benefit of $62
    
    
    
    
    
    
    1,133
    
    
    
    
    
    
    
    
    
    
    
    13BALANCE
JULY 2, 2006
    
    $
    69
    
    
    $
    77,175
    
    
    $
    157,745
    
    
    $
    (2,958
    )
    
    $
    (121,756
    )Net Income
    
    
    
    
    
    
    
    
    
    
    8,183
    
    
    
    
    
    
    
    
    
    
    $
    8,183Translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    449
    
    
    
    
    
    
    
    449Minimum pension liability,
net of tax of $14
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24
    
    
    
    
    
    
    
    24Net gains in other
comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    473
    
    
    
    
    
    
    
    473Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    8,656Purchase of
common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,075
    )Stock-Based Compensation
    
    
    
    
    
    
    698
    
    
    
    
    
    
    
    
    
    
    
    Exercise of stock options
and employee stock
purchases, including
tax benefit of $69
    
    
    
    
    
    
    249
    
    
    
    
    
    
    
    
    
    
    
    13Adjustments
to initially adopt
SFAS No.158:Prior
service costs, net of tax
of $1,363
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,224
    
    
    
    Net losses,
net of tax of $8,629
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,080
    )
    
    
    BALANCE
JULY 1, 2007
    
    $
    69
    
    
    $
    78,122
    
    
    $
    165,928
    
    
    $
    (14,341
    )
    
    $
    (126,818
    )




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##### Table of Contents



CONSOLIDATED STATEMENTS OF CASH FLOWS  (IN THOUSANDS)
 
 Years EndedJuly 1, 2007
    
    
    July 2, 2006
    
    
    July 3, 2005CASH FLOWS FROM OPERATING ACTIVITIESNet Income
    
    $
    8,183
    
    
    $
    12,477
    
    
    $
    15,038Adjustments to reconcile net income to
net cash provided by operating activities:Minority Interest
    
    
    (75
    )
    
    
    
    
    
    
    Depreciation
    
    
    6,988
    
    
    
    7,155
    
    
    
    7,225Loss on disposition of property,
plant and equipment
    
    
    58
    
    
    
    320
    
    
    
    190Deferred income taxes
    
    
    (359
    )
    
    
    350
    
    
    
    2,282Tax benefit from options exercised
    
    
    23
    
    
    
    61
    
    
    
    956Stock-based compensation expense
    
    
    738
    
    
    
    1,118
    
    
    
    Provision for doubtful accounts
    
    
    
    
    
    
    1,622
    
    
    
    80Change in operating assets and liabilities:Receivables
    
    
    1,434
    
    
    
    (3,870
    )
    
    
    4,863Inventories
    
    
    2,171
    
    
    
    2,317
    
    
    
    (3,293
    )Other assets
    
    
    (7,277
    )
    
    
    (3,953
    )
    
    
    748Accounts payable and accrued liabilities
    
    
    (1,937
    )
    
    
    2,184
    
    
    
    (12,621
    )Other, net
    
    
    (153
    )
    
    
    (485
    )
    
    
    285Net cash provided by operating activities
    
    
    9,794
    
    
    
    19,296
    
    
    
    15,753CASH FLOWS FROM INVESTING ACTIVITIESInvestment in joint ventures
    
    
    (100
    )
    
    
    (569
    )
    
    
    (125
    )Additions to property, plant and equipment
    
    
    (5,748
    )
    
    
    (5,766
    )
    
    
    (5,498
    )Proceeds received on sale of property,
plant and equipment
    
    
    21
    
    
    
    22
    
    
    
    22Net cash used in investing activities
    
    
    (5,827
    )
    
    
    (6,313
    )
    
    
    (5,601
    )CASH FLOWS FROM FINANCING ACTIVITIESPurchase of common stock
    
    
    (5,075
    )
    
    
    (5,306
    )
    
    
    (10,999
    )Exercise of stock options
    
    
    238
    
    
    
    1,085
    
    
    
    3,566Contribution from minority interest
    
    
    649
    
    
    
    
    
    
    
    Net cash used in financing activities
    
    
    (4,188
    )
    
    
    (4,221
    )
    
    
    (7,433
    )NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS
    
    
    (221
    )
    
    
    8,762
    
    
    
    2,719CASH AND CASH EQUIVALENTSBeginning of year
    
    
    65,712
    
    
    
    56,950
    
    
    
    54,231End of year
    
    $
    65,491
    
    
    $
    65,712
    
    
    $
    56,950SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATIONIncome taxes paid
    
    $
    3,231
    
    
    $
    3,120
    
    
    $
    6,446Interest paid
    
    
    
    
    
    
    
    
    
    
    




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##### Table of Contents



NOTES TO FINANCIAL STATEMENTS
 
 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
    Principles of Consolidation and Presentation:
 Reclassifications:
 Fiscal Year:
 Use of Estimates:
 Cash and Cash Equivalents:
 Fair Value of Financial Instruments:
 Receivables:
 Balance,
    
    Provision
    
    
    
    
    
    Balance,Beginning
    
    Charged to
    
    Accounts
    
    End ofof Year
    
    Expense
    
    Written Off
    
    YearYear ended July 1, 2007
    
    $
    250
    
    
    $
    
    
    
    $
    
    
    
    $
    250Year ended July 2, 2006
    
    $
    250
    
    
    $
    1,622
    
    
    $
    1,622
    
    
    $
    250Year ended July 3, 2005
    
    $
    250
    
    
    $
    80
    
    
    $
    80
    
    
    $
    250
 Inventories:
 July 1, 2007
    
    
    July 2, 2006Finished products
    
    $
    2,660
    
    
    $
    2,937Work in process
    
    
    4,522
    
    
    
    5,401Purchased materials
    
    
    4,813
    
    
    
    5,802LIFO reserve
    
    
    (4,829
    )
    
    
    (4,803
    )$
    7,166
    
    
    $
    9,337




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##### Table of Contents



NOTES TO FINANCIAL STATEMENTS
 
 Customer Tooling in Progress:
 Repair and Maintenance Supply Parts:
 Balance,
    
    Provision
    
    
    
    
    
    Balance,Beginning
    
    Charged to
    
    Balances
    
    End ofof Year
    
    Expense
    
    Written Off
    
    YearYear ended July 1, 2007
    
    $
    650
    
    
    $
    32
    
    
    $
    42
    
    
    $
    640Year ended July 2, 2006
    
    $
    650
    
    
    $
    49
    
    
    $
    49
    
    
    $
    650Year ended July 3, 2005
    
    $
    750
    
    
    $
    (24
    )
    
    $
    76
    
    
    $
    650
 Property, Plant and Equipment:
 Classification
    
    Expected Useful LivesLand improvements
    
    20 yearsBuildings and improvements
    
    20 to 35 yearsMachinery and equipment
    
    3 to 10 years
  July 1, 2007
    
    
    July 2, 2006Land and improvements
    
    $
    1,405
    
    
    $
    1,404Buildings and improvements
    
    
    12,712
    
    
    
    12,593Machinery and equipment
    
    
    98,803
    
    
    
    94,874112,920
    
    
    
    108,871Less: accumulated depreciation
    
    
    (86,394
    )
    
    
    (81,107
    )$
    26,526
    
    
    $
    27,764
   Supplier Concentrations:




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##### Table of Contents



NOTES TO FINANCIAL STATEMENTS
 
 Labor Concentrations:
 Revenue Recognition:
 Research and Development Costs:
 Self Insurance and Loss Sensitive Plans:
    Balance,
    
    Provision
    
    
    
    
    
    Balance,Beginning
    
    Charged to
    
    
    
    
    
    End ofof Year
    
    Expense
    
    Payments
    
    YearYear ended July 1, 2007Incurred but not reported claims
reserve for self-insured plans
    
    $
    400
    
    
    $
    2,250
    
    
    $
    2,350
    
    
    $
    300Workers Compensation
    
    
    (185
    )
    
    
    331
    
    
    
    397
    
    
    
    (251
    )Year ended July 2, 2006Incurred but not reported claims
reserve for self-insured plans
    
    $
    500
    
    
    $
    2,733
    
    
    $
    2,833
    
    
    $
    400Workers Compensation
    
    
    (202
    )
    
    
    314
    
    
    
    297
    
    
    
    (185
    )Year ended July 3, 2005Incurred but not reported claims
reserve for self-insured plans
    
    $
    600
    
    
    $
    3,460
    
    
    $
    3,560
    
    
    $
    500Workers Compensation
    
    
    (202
    )
    
    
    672
    
    
    
    672
    
    
    
    (202
    )
 Product Warranty:




---



##### Table of Contents



NOTES TO FINANCIAL STATEMENTS
 
 Foreign Currency Translation:
 Accumulated Other Comprehensive Loss:
 July 1, 2007
    
    
    July 2, 2006
    
    
    July 3, 2005Minimum pension liability, net of tax
    
    $
    
    
    
    $
    62
    
    
    $
    9,467Unrecognized pension and postretirement
benefit liabilities, net of tax
    
    
    11,894
    
    
    
    
    
    
    
    Foreign currency translation
    
    
    2,447
    
    
    
    2,896
    
    
    
    2,580$
    14,341
    
    
    $
    2,958
    
    
    $
    12,047
  Accounting For Stock-Based Compensation:




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##### Table of Contents



NOTES TO FINANCIAL STATEMENTS
 
    Net IncomeAs reported
    
    $
    15,038Pro forma compensation expense, net of tax
    
    
    514Pro forma
    
    $
    14,524Basic earnings per shareAs reported
    
    $
    3.97Pro forma
    
    $
    3.83Diluted earnings per shareAs reported
    
    $
    3.94Pro forma
    
    $
    3.82
   Years EndedJuly 1, 2007
    
    
    July 2, 2006
    
    
    July 3, 2005Intrinsic value of options exercised
    
    $
    186
    
    
    $
    188
    
    
    $
    2,749Fair value of stock options vesting
    
    $
    762
    
    
    $
    1,480
    
    
    $
    925
  Options Granted During
    
    2006
    
    2005Weighted average grant date fair value:Options issued at grant date market value
    
    
    n/a
    
    
    $
    18.56Options issued above grant date market value
    
    $
    11.92
    
    
    
    n/aAssumptions:Risk free interest rates
    
    
    4.08
    %
    
    
    3.69
    %Expected volitilty
    
    
    31.77
    %
    
    
    24.64
    %Expected term (in years)
    
    
    4.00
    
    
    
    5.00
   Weighted Average RemainingNumber of Options
    
    
    Weighted Average Exercise
    
    
    Contractual Life OutstandingOutstanding/Exercisable
    
    
    Price Outstanding/Exercisable
    
    
    (In Years)$31.95-$44.93
    
    
    5,100/5,100
    
    
    $ 39.25/$39.25
    
    
    
    4.7$53.07-$58.59
    
    
    104,140/99,140
    
    
    $ 56.03/$56.03
    
    
    
    3.5Over $61.21
    
    
    126,180/76,840
    
    

$
61.72/$61.91
    
    
    
    3.4$ 58.71/$58.05
 Recent Accounting Pronouncements:




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##### Table of Contents



NOTES TO FINANCIAL STATEMENTS
 
   INVESTMENT IN JOINT VENTURES
      LINE OF CREDIT
  COMMITMENTS AND CONTINGENCIES




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##### Table of Contents



NOTES TO FINANCIAL STATEMENTS
 
   SUBSEQUENT EVENT
  INCOME TAXES
  2007
    
    
    2006
    
    
    2005Currently payable:Federal
    
    $
    2,624
    
    
    $
    5,089
    
    
    $
    4,780State
    
    
    485
    
    
    
    738
    
    
    
    1,016State refund claim recovery
    
    
    (506
    )
    
    
    (1,814
    )
    
    
    (250
    )Foreign
    
    
    279
    
    
    
    40
    
    
    
    6312,882
    
    
    
    4,053
    
    
    
    6,177Deferred tax (benefit) provision
    
    
    (359
    )
    
    
    350
    
    
    
    2,282$
    2,523
    
    
    $
    4,403
    
    
    $
    8,459
  2007
    
    2006
    
    2005U.S. statutory rate
    
    
    34.0
    %
    
    
    34.4
    %
    
    
    34.3
    %State taxes, net of Federal tax benefit
    
    
    2.6
    
    
    
    3.1
    
    
    
    3.8State refund claim recovery
    
    
    (3.1
    )
    
    
    (7.1
    )
    
    
    (.7
    )Foreign sales benefit
    
    
    (1.2
    )
    
    
    
    
    
    
    (.8
    )Favorable foreign adjustment
    
    
    (7.9
    )
    
    
    (3.9
    )
    
    
    Other
    
    
    (.8
    )
    
    
    (.4
    )
    
    
    (.6
    )23.6
    %
    
    
    26.1
    %
    
    
    36.0
    %




---



##### Table of Contents



NOTES TO FINANCIAL STATEMENTS
 
  July 1, 2007
    
    
    July 2, 2006Deferred income taxescurrent:Repair and maintenance supply parts reserve
    
    $
    243
    
    
    $
    247Payroll-related accruals
    
    
    475
    
    
    
    455Environmental reserve
    
    
    1,009
    
    
    
    1,019Accrued customer pricing
    
    
    1,245
    
    
    
    Other
    
    
    (243
    )
    
    
    (180
    )$
    2,729
    
    
    $
    1,541Deferred income taxesnoncurrent:Accrued pension obligations
    
    $
    (4,588
    )
    
    $
    (2,981
    )Additional minimum pension liability
    
    
    
    
    
    
    38Unrecognized pension and postretirement
benefit plan liabilities
    
    
    7,290
    
    
    
    Accumulated depreciation
    
    
    (2,863
    )
    
    
    (3,410
    )Stock-based compensation
    
    
    564
    
    
    
    350Postretirement obligations
    
    
    1,714
    
    
    
    1,737$
    2,117
    
    
    $
    (4,266
    )
    RETIREMENT PLANS AND POSTRETIREMENT COSTS




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##### Table of Contents



NOTES TO FINANCIAL STATEMENTS
 
    At July 1, 2007Prior to adopting
    
    Effect of adoptingSFAS No. 158
    
    SFAS No. 158
    
    As ReportedPrepaid pension costs
    
    $
    16,140
    
    
    $
    (11,755
    )
    
    $
    4,385Other long-term assets
    
    $
    171
    
    
    $
    (130
    )
    
    $
    41Deferred income taxes, net
    
    $
    (2,420
    )
    
    $
    7,266
    
    
    $
    4,846Accrued payroll and benefits
    
    $
    (6,280
    )
    
    $
    
    
    
    $
    (6,280
    )Accrued pension obligations
    
    $
    (2,855
    )
    
    $
    
    
    
    $
    (2,855
    )Accrued postretirement obligations
    
    $
    (3,339
    )
    
    $
    (7,237
    )
    
    $
    (10,576
    )Accumulated other comprehensive loss
    
    $
    2,485
    
    
    $
    11,856
    
    
    $
    14,341
  Pension and SERP Benefits
    
    
    Postretirement BenefitsPrior service cost (credit)
    
    $
    386
    
    
    $
    (2,610
    )Net actuarial loss
    
    
    7,021
    
    
    
    7,097$
    7,407
    
    
    $
    4,487




---



##### Table of Contents



NOTES TO FINANCIAL STATEMENTS
 
 Pension and SERP Benefits
    
    Postretirement BenefitsJuly 1,
    
    July 2,
    
    July 1,
    
    July 2,2007
    
    2006
    
    2007
    
    2006WEIGHTED-AVERAGE ASSUMPTIONSBenefit Obligations:Discount rate
    
    
    6.41
    %
    
    
    6.62
    %
    
    
    6.41
    %
    
    
    6.62
    %Rate of compensation increases
    
    
    3.5
    %
    
    
    3.5
    %
    
    
    n/a
    
    
    
    n/aNet Periodic Benefit Cost:Discount rate
    
    
    6.62
    %
    
    
    5.43
    %
    
    
    6.62
    %
    
    
    5.43
    %Expected return on plan assets
    
    
    8.5
    %
    
    
    8.5
    %
    
    
    n/a
    
    
    
    n/aRate of compensation increases
    
    
    3.5
    %
    
    
    3.5
    %
    
    
    n/a
    
    
    
    n/a2007
    
    
    2006
    
    
    2007
    
    
    2006CHANGE IN PROJECTED
BENEFIT OBLIGATION:Benefit obligation at beginning of year
    
    $
    66,953
    
    
    $
    73,242
    
    
    $
    10,851
    
    
    $
    9,331Service cost
    
    
    1,974
    
    
    
    2,540
    
    
    
    219
    
    
    
    232Interest Cost
    
    
    4,348
    
    
    
    3,924
    
    
    
    688
    
    
    
    591Plan amendments
    
    
    32
    
    
    
    255
    
    
    
    
    
    
    
    Actuarial (gain) loss
    
    
    3,773
    
    
    
    (10,502
    )
    
    
    1,221
    
    
    
    2,079Benefits paid
    
    
    (2,586
    )
    
    
    (2,506
    )
    
    
    (1,231
    )
    
    
    (1,382
    )Benefit obligation at end of year
    
    $
    74,494
    
    
    $
    66,953
    
    
    $
    11,748
    
    
    $
    10,851CHANGE IN PLAN ASSETS:Fair value of plan assets at beginning of year
    
    $
    61,989
    
    
    $
    53,225
    
    
    $
    
    
    
    $
    Actual return on plan assets
    
    
    9,478
    
    
    
    5,270
    
    
    
    
    
    
    
    Employer contribution
    
    
    7,000
    
    
    
    6,000
    
    
    
    1,231
    
    
    
    1,382Benefits paid
    
    
    (2,586
    )
    
    
    (2,506
    )
    
    
    (1,231
    )
    
    
    (1,382
    )Fair value of plan assets at end of year
    
    
    75,881
    
    
    
    61,989
    
    
    
    
    
    
    
    Funded status
    
    
    1,387
    
    
    
    (4,964
    )
    
    
    (11,748
    )
    
    
    (10,851
    )Unrecognized net loss
    
    
    
    
    
    
    12,119
    
    
    
    
    
    
    
    10,867Unrecognized prior service cost
    
    
    
    
    
    
    688
    
    
    
    
    
    
    
    (4,588
    )Additional minimum liability:Intangible asset
    
    
    
    
    
    
    (142
    )
    
    
    
    
    
    
    Accumulated other comprehensive loss
(pre-tax)
    
    
    
    
    
    
    (99
    )
    
    
    
    
    
    
    Prepaid (accrued) benefit obligations
    
    $
    1,387
    
    
    $
    7,602
    
    
    $
    (11,748
    )
    
    $
    (4,572
    )AMOUNTS RECOGNIZED IN
CONSOLIDATED BALANCE SHEETS:Accrued payroll and benefits (current liabilities)
    
    $
    (143
    )
    
    $
    (148
    )
    
    $
    (1,172
    )
    
    $
    (936
    )Accrued benefit obligations (long-term liabilities)
    
    
    (2,855
    )
    
    
    (2,608
    )
    
    
    (10,576
    )
    
    
    (3,636
    )Prepaid pension obligations (long-term assets)
    
    
    4,385
    
    
    
    10,358
    
    
    
    
    
    
    
    Net amount recognized
    
    $
    1,387
    
    
    $
    7,602
    
    
    $
    (11,748
    )
    
    $
    (4,572
    )
  Pension
    
    SERPJuly 1,
    
    July 2,
    
    July 1,
    
    July 2,2007
    
    2006
    
    2007
    
    2006Accumulated benefit obligation
    
    $
    65,385
    
    
    $
    57,920
    
    
    $
    2,998
    
    
    $
    2,756Projected benefit obligation
    
    $
    71,496
    
    
    $
    64,197
    
    
    $
    2,998
    
    
    $
    2,756




---



##### Table of Contents



NOTES TO FINANCIAL STATEMENTS
 
 Pension and SERP Benefits
    
    
    Postretirement Benefits2007
    
    
    2006
    
    
    2005
    
    
    2007
    
    
    2006
    
    
    2005COMPONENTS OF NET PERIODIC
BENEFIT COST:Service cost
    
    $
    1,974
    
    
    $
    2,540
    
    
    $
    2,224
    
    
    $
    219
    
    
    $
    232
    
    
    $
    299Interest cost
    
    
    4,348
    
    
    
    3,924
    
    
    
    3,552
    
    
    
    688
    
    
    
    491
    
    
    
    601Expected return on plan assets
    
    
    (5,348
    )
    
    
    (4,989
    )
    
    
    (4,277
    )
    
    
    
    
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    64
    
    
    
    20
    
    
    
    8
    
    
    
    (378
    )
    
    
    (378
    )
    
    
    10Amortization of unrecognized
net loss
    
    
    473
    
    
    
    1,275
    
    
    
    198
    
    
    
    641
    
    
    
    528
    
    
    
    255Amortization of net transition asset
    
    
    
    
    
    
    
    
    
    
    (49
    )
    
    
    
    
    
    
    
    
    
    
    Net periodic benefit cost
    
    $
    1,511
    
    
    $
    2,770
    
    
    $
    1,656
    
    
    $
    1,170
    
    
    $
    873
    
    
    $
    1,165
  1% Increase
    
    1% DecreaseEffect on total of service and interest cost components in fiscal 2007
    
    $
    87
    
    
    ($
    76
    )Effect on postretirement benefit obligation as of July 1, 2007
    
    $
    832
    
    
    ($
    744
    )
  Target Allocation
    
    July 1, 2007
    
    July 2, 2006Equity investments
    
    
    65
    %
    
    
    64
    %
    
    
    67
    %Fixed-Income Investments
    
    
    35
    %
    
    
    36
    %
    
    
    33
    %Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
   Pension and SERP Benefits
    
    Postretirement Benefits2008
    
    $
    3,000
    
    
    $
    1,1722009
    
    
    3,348
    
    
    
    1,2592010
    
    
    6,580
    
    
    
    1,3922011
    
    
    3,936
    
    
    
    1,3712012
    
    
    4,269
    
    
    
    1,3742013-2017
    
    
    25,951
    
    
    
    4,961




---



##### Table of Contents



NOTES TO FINANCIAL STATEMENTS
 
  SHAREHOLDERS EQUITY
   EARNINGS PER SHARE (EPS)
  2007
    
    
    2006
    
    
    2005Net
    
    
    
    
    
    
    Per Share
    
    
    Net
    
    
    
    
    
    
    Per Share
    
    
    Net
    
    
    
    
    
    
    Per ShareIncome
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    AmountBasic EPS
    
    $
    8,183
    
    
    
    3,552
    
    
    $
    2.30
    
    
    $
    12,477
    
    
    
    3,716
    
    
    $
    3.36
    
    
    $
    15,038
    
    
    
    3,790
    
    
    $
    3.97Stock-based
compensation
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    26Diluted EPS
    
    $
    8,183
    
    
    
    3,555
    
    
    $
    2.30
    
    
    $
    12,477
    
    
    
    3,720
    
    
    $
    3.35
    
    
    $
    15,038
    
    
    
    3,816
    
    
    $
    3.94
  STOCK OPTION AND PURCHASE PLANS
  Weighted
    
    
    Weighted Average
    
    
    AggregateAverage
    
    
    Remaining
    
    
    Intrinsic ValueShares
    
    
    Exercise Price
    
    
    Contractual Term (in years)
    
    
    (in thousands)Balance at June 27, 2004
    
    
    387,535
    
    
    $
    49.39Granted
    
    
    140,000
    
    
    $
    69.83Exercised
    
    
    (101,345
    )
    
    $
    34.74Expired
    
    
    (1,000
    )
    
    $
    53.07Terminated
    
    
    (143,330
    )
    
    $
    69.04Balance at July 3, 2005
    
    
    281,860
    
    
    $
    54.80Granted
    
    
    40,000
    
    
    $
    61.22Exercised
    
    
    (24,220
    )
    
    $
    43.30Expired
    
    
    (5,000
    )
    
    $
    54.99Terminated
    
    
    (9,110
    )
    
    $
    59.59Balance at July 2, 2006
    
    
    283,530
    
    
    $
    56.53Granted
    
    
    
    
    
    $
    Exercised
    
    
    (7,300
    )
    
    $
    21.74Expired
    
    
    (35,810
    )
    
    $
    49.24Terminated
    
    
    (5,000
    )
    
    $
    56.72Balance at July 1, 2007
    
    
    235,420
    
    
    $
    58.71
    
    
    
    3.5
    
    
    $
    39Exercisable as of:July 1, 2007
    
    
    181,080
    
    
    $
    58.05
    
    
    
    3.2
    
    
    $
    39July 2, 2006
    
    
    157,350
    
    
    $
    52.78
    
    
    
    4.0
    
    
    $
    361July 3, 2005
    
    
    95,530
    
    
    $
    45.75
    
    
    
    4.0
    
    
    $
    785Available for grant as of July 1, 2007
    
    
    342,823




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##### Table of Contents



NOTES TO FINANCIAL STATEMENTS
 
  WeightedAverageGrant DateShares
    
    
    Fair ValueNonvested Balance at July 3, 2005
    
    
    
    
    
    
    Granted
    
    
    9,900
    
    
    $
    51.24Vested
    
    
    
    
    
    
    Forfeited
    
    
    (300
    )
    
    $
    51.24Nonvested Balance at July 2, 2006
    
    
    9,600
    
    
    $
    51.24Granted
    
    
    10,000
    
    
    $
    40.00Vested
    
    
    
    
    
    
    Forfeited
    
    
    (200
    )
    
    $
    40.00Nonvested Balance at July 1, 2007
    
    
    19,400
    
    
    $
    45.56
   EXPORT SALES
  2007
    
    2006
    
    2005Export Sales
    
    $
    30,643
    
    
    $
    34,244
    
    
    $
    36,802Percent of Net Sales
    
    
    18
    %
    
    
    19
    %
    
    
    19
    %
  SALES AND RECEIVABLE CONCENTRATION
  2007
    
    
    2006
    
    
    2005Sales
    
    
    %
    
    
    Sales
    
    
    %
    
    
    Sales
    
    
    %General Motors Corporation
    
    $
    35,687
    
    
    
    21
    %
    
    $
    32,887
    
    
    
    18
    %
    
    $
    43,227
    
    
    
    23
    %Ford Motor Company
    
    
    21,013
    
    
    
    13
    %
    
    
    27,295
    
    
    
    15
    %
    
    
    32,021
    
    
    
    17
    %DaimlerChrysler Corporation
    
    
    58,099
    
    
    
    35
    %
    
    
    58,603
    
    
    
    32
    %
    
    
    51,523
    
    
    
    27
    %Delphi Corporation
    
    
    18,398
    
    
    
    11
    %
    
    
    26,721
    
    
    
    15
    %
    
    
    29,621
    
    
    
    15
    %$
    133,197
    
    
    
    80
    %
    
    $
    145,506
    
    
    
    80
    %
    
    $
    156,392
    
    
    
    82
    %
  July 1, 2007
    
    
    July 2, 2006Receivables
    
    
    %
        
    Receivables
        

%General Motors Corporation
    
    $
    8,174
    
    
    
    30
    %
    
    $
    6,385
    
    
    
    22
    %Ford Motor Company
    
    
    3,022
    
    
    
    11
    %
    
    
    3,122
    
    
    
    11
    %DaimlerChrysler Corporation
    
    
    9,965
    
    
    
    37
    %
    
    
    10,413
    
    
    
    37
    %Delphi Corporation
    
    
    1,116
    
    
    
    4
    %
    
    
    834
    
    
    
    3
    %$
    22,277
    
    
    
    82
    %
    
    $
    20,754
    
    
    
    73
    %




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##### Table of Contents



REPORTS
 
 REPORT
ON MANAGEMENTS ASSESSMENT OF INTERNAL
CONTROL OVER FINANCIAL REPORTING
     -s- Harold M. Stratton II
    
    -s- Patrick J. HansenHarold M. Stratton II
    
    Patrick J. HansenChairman, President and
    
    Senior Vice President andChief Executive Officer
    
    Chief Financial Officer




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##### Table of Contents



REPORTS
 
 
 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




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##### Table of Contents



REPORTS
 
 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




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##### Table of Contents



FINANCIAL
SUMMARY
 
 FIVE-YEAR FINANCIAL SUMMARY
  Fiscal Years2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003INCOME STATEMENT DATANet Sales
    
    $
    167,707
    
    
    $
    181,197
    
    
    $
    190,314
    
    
    $
    195,646
    
    
    $
    196,827Gross profit
    
    
    26,494
    
    
    
    37,046
    
    
    
    42,776
    
    
    
    47,513
    
    
    
    45,359Engineering, selling, and
administrative expenses
    
    
    20,189
    
    
    
    22,067
    
    
    
    20,688
    
    
    
    20,624
    
    
    
    19,613Provision for doubtful accounts, net
    
    
    
    
    
    
    1,622
    
    
    
    80
    
    
    
    26
    
    
    
    Income from operations
    
    
    6,305
    
    
    
    13,357
    
    
    
    22,008
    
    
    
    26,863
    
    
    
    25,746Interest income
    
    
    3,611
    
    
    
    2,563
    
    
    
    1,169
    
    
    
    426
    
    
    
    369Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other income (expense), net
    
    
    715
    
    
    
    960
    
    
    
    320
    
    
    
    362
    
    
    
    (156
    )Minority interest
    
    
    75
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Income before taxes
    
    
    10,706
    
    
    
    16,880
    
    
    
    23,497
    
    
    
    27,651
    
    
    
    25,959Provision for income taxes
    
    
    2,523
    
    
    
    4,403
    
    
    
    8,459
    
    
    
    10,369
    
    
    
    9,605Net income
    
    $
    8,183
    
    
    $
    12,477
    
    
    $
    15,038
    
    
    $
    17,282
    
    
    $
    16,354Earnings per share:Basic
    
    $
    2.30
    
    
    $
    3.36
    
    
    $
    3.97
    
    
    $
    4.56
    
    
    $
    4.32Diluted
    
    
    2.30
    
    
    
    3.35
    
    
    
    3.94
    
    
    
    4.49
    
    
    
    4.24BALANCE SHEET DATANet working capital
    
    $
    81,083
    
    
    $
    80,264
    
    
    $
    74,619
    
    
    $
    68,682
    
    
    $
    51,277Total assets
    
    
    148,446
    
    
    
    154,292
    
    
    
    138,090
    
    
    
    137,190
    
    
    
    118,094Long-term liabilities
    
    
    14,005
    
    
    
    10,510
    
    
    
    16,271
    
    
    
    12,054
    
    
    
    19,190Shareholders Equity
    
    
    102,960
    
    
    
    110,275
    
    
    
    91,751
    
    
    
    89,852
    
    
    
    69,095
 QUARTERLY FINANCIAL DATA (UNAUDITED)
  Earnings Per Share
    
    
    Market Price Per ShareQuarter
    
    Net Sales
    
    
    Gross Profit
    
    
    Net Income
    
    
    Basic
    
    
    Diluted
    
    
    High
    
    
    Low2007
    
    First
    
    $
    38,050
    
    
    $
    5,282
    
    
    $
    741
    
    
    $
    0.21
    
    
    $
    0.21
    
    
    $
    48.51
    
    
    $
    37.50Second
    
    
    37,913
    
    
    
    5,040
    
    
    
    1,094
    
    
    
    0.31
    
    
    
    0.31
    
    
    
    47.11
    
    
    
    33.85Third
    
    
    45,647
    
    
    
    8,354
    
    
    
    2,914
    
    
    
    0.82
    
    
    
    0.82
    
    
    
    51.40
    
    
    
    41.31Fourth
    
    
    46,097
    
    
    
    7,818
    
    
    
    3,434
    
    
    
    0.97
    
    
    
    0.97
    
    
    
    49.89
    
    
    
    40.49TOTAL
    
    $
    167,707
    
    
    $
    26,494
    
    
    $
    8,183
    
    
    $
    2.30
    
    
    $
    2.302006
    
    First
    
    $
    44,793
    
    
    $
    9,774
    
    
    $
    1,740
    
    
    $
    0.46
    
    
    $
    0.46
    
    
    $
    65.75
    
    
    $
    49.67Second
    
    
    43,278
    
    
    
    8,542
    
    
    
    2,656
    
    
    
    0.71
    
    
    
    0.71
    
    
    
    52.38
    
    
    
    39.71Third
    
    
    46,575
    
    
    
    9,122
    
    
    
    4,116
    
    
    
    1.11
    
    
    
    1.10
    
    
    
    45.04
    
    
    
    36.59Fourth
    
    
    46,551
    
    
    
    9,608
    
    
    
    3,965
    
    
    
    1.08
    
    
    
    1.08
    
    
    
    49.84
    
    
    
    33.00TOTAL
    
    $
    181,197
    
    
    $
    37,046
    
    
    $
    12,477
    
    
    $
    3.36
    
    
    $
    3.35




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##### Table of Contents



PERFORMANCE
GRAPH
 
  COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN*
 
 6/28/02
    
    6/27/03
    
    6/25/04
    
    7/1/05
    
    6/30/06
    
    6/29/07STRATTEC**
    
    
    100
    
    
    
    96
    
    
    
    122
    
    
    
    97
    
    
    
    90
    
    
    
    85NASDAQ Composite Index
    
    
    100
    
    
    
    110
    
    
    
    139
    
    
    
    142
    
    
    
    156
    
    
    
    191Dow Jones U.S. Auto Parts Index
    
    
    100
    
    
    
    88
    
    
    
    115
    
    
    
    102
    
    
    
    101
    
    
    
    138
 
 *
    
    $100 invested on 6/28/02 in stock or index-including reinvestment of dividends. Indexes
calculated on a month-end basis.**
    
    The fiscal year end closing price of STRATTEC Common Stock on June 28, 2002 was $55.32,
the closing price on June 27, 2003 was $52.87, the closing price on June 25, 2004 was
$67.57, the closing price on July 1, 2005 was $53.82, the closing price on June 30, 2006,
was $49.81 and the closing price on June 29, 2007 was $46.97.




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##### Table of Contents



DIRECTORS/OFFICERS/SHAREHOLDERS INFORMATION
C O R P O R AT E O F F I C E R S
Harold M. Stratton II,
59 Patrick J. Hansen, 48
Senior Vice President-Chief
Financial Officer, Treasurer and
Secretary Donald J. Harrod, 63 Vice
President-Engineering and Product
Development Dennis A. Kazmierski, 55
Vice President-Marketing and Sales
Kathryn E. Scherbarth, 51 Vice
President-Milwaukee Operations
Rolando J. Guillot, 39 Vice
President-Mexican Operations
STRATTEC Board of Directors: Milan R. Bundalo, 56 (Left to Right) Frank J.
Krejci, Michael J. Koss, Vice President-Materials Robert Feitler, Harold M.
Stratton II, David R. Zimmer Brian J. Reetz, 49
Vice President-Product Development
and Management
S H A R E H O L D E R
S  I N F O R M AT I O N
Annual Meeting
The Annual Meeting of Shareholders will
B O A R D O F D I R E C T O R S convene at 8:00 a.m. (CST) on October 9,
2007, at the
Harold M. Stratton II, 59 Radisson Hotel,
Chairman, President and Chief Executive Officer 7065 North Port Washington Road,
Milwaukee, WI 53217
Robert Feitler, 76 Common Stock
Former President and Chief Operating Officer STRATTEC SECURITY CORPORATION of Weyco Group,
Inc. common stock is traded on the NASDAQ
Chairman of the Executive Committee and Global Market under the symbol: STRT. Director
of Weyco Group, Inc. Form 10-K
You may receive a copy of the
Michael J. Koss, 53 STRATTEC SECURITY CORPORATION
President and Chief Executive Officer of            Form 10-K, filed with the Securities and
Koss Corporation Exchange Commission, by writing to the Director of Koss Corporation
Secretary at STRATTEC SECURITY
CORPORATION, 3333 W. Good Hope Frank J. Krejci, 57 Road, Milwaukee, WI 53209.
President and Chief Executive Officer of Corporate Governance
Wisconsin Furniture, LLC To review the Companys corporate governance, board committee charters
David R. Zimmer, 61 and code of business ethics, please visit the Corporate Governance section of
Managing Partner of our Web site at www.strattec.com.
Stonebridge Business Partners
Shareholder Inquiries
Communications concerning the
transfer of shares, lost certificates
or changes of address should be
directed to the Transfer Agent.
Transfer Agent and
Registrar Wells Fargo Bank,
N.A.
Shareholder Services
P.O. Box 64854 St.
Paul, MN 55164-0854
1.800.468.9716




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##### Table of Contents



T h e Tr u s t e d L e a d e r i n A u t o m o t i v e A c c e s s C o n t r o l P r o d u c t s
S T R A T T E C S E C U R I T Y C O R P O R A T I O N
3 3 3 3 W E S T G O O D H O P E R O A D
M I L W A U K E E , W I 5 3 2 0 9
P H O N E 4 1 4 . 2 4 7 . 3 3 3 3 F A X 4 1 4 . 2 4 7 . 3 3 2 9
w w w . s t r a t t e c . c o m