Exhibit 13.1
 
 2009 ANNUAL REPORT Surviving the Storm




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Surviving the Storm The stormy economic climate ushered in by the Great Recession of 2008-2009 has wreaked havoc on the
entire auto industry and brought chaos to the normal routines of business. STRATTEC, like most
companies tied to the global auto industry, got caught in the storm. But being surrounded by
economic uncertainty and unprecedented waves of change has strengthened our resolve to not only
survive the storm, but emerge in the calmer days ahead as a stronger company, ready for the future.




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(GRAPHIC)
 2009 ANNUAL REPORT
 
  CONTENTS
 LETTER TO THE SHAREHOLDERS
    
    
    2FINANCIAL HIGHLIGHTS
    
    
    4COMPANY DESCRIPTION
    
    
    5STRATTEC EQUIPPED VEHICLE LIST
    
    
    12MANAGEMENTS DISCUSSION AND ANALYSIS
    
    
    13FINANCIAL STATEMENTS
    
    
    25REPORT OF MANAGEMENT
    
    
    44REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    
    
    45FINANCIAL SUMMARY
    
    
    47PERFORMANCE GRAPH
    
    
    48DIRECTORS / OFFICERS / SHAREHOLDERS INFORMATION
    
    
    49
 PROSPECTIVE INFORMATION




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LETTER TO THE SHAREHOLDERS
 AUGUST, 2009
   2009 STRATTEC Annual Report
    
    2




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LETTER TO THE SHAREHOLDERS
   2009 STRATTEC Annual Report
    
    3




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FINANCIAL HIGHLIGHTS   (IN MILLIONS)
 2009
    
    2008
    
    2007Net Sales
    
    $
    126.1
    
    
    $
    159.6
    
    
    $
    167.7Gross Profit
    
    
    13.2
    
    
    
    24.8
    
    
    
    26.5(Loss) Income from Operations
    
    
    (12.7
    )
    
    
    .8
    
    
    
    6.3Net (Loss) Income
    
    
    (6.1
    )
    
    
    2.8
    
    
    
    8.2Total Assets
    
    
    128.2
    
    
    
    144.2
    
    
    
    151.4Total Debt
    
    
    
    
    
    
    
    
    
    
    Shareholders Equity
    
    
    71.4
    
    
    
    98.0
    
    
    
    106.0
 ECONOMIC VALUE ADDED (EVA®)
 ® ® ® ® ®
 Net Operating Loss After Cash-Basis Taxes
    
    
    
    
    
    $
    (5.2
    )Average Monthly Net Capital Employed
    
    $
    84.8Cost of Capital
    
    
    10
    %Capital Charge
    
    
    
    
    
    
    (8.5
    )Economic Value Added
    
    
    
    
    
    $
    (13.7
    )
 ® ® ® ®
 Net Operating Loss After Cash-Basis Taxes:
 2009 Net Loss as Reported
    
    $
    (6.1
    )Deferred Tax Provision
    
    
    (3.0
    )Other
    
    
    3.9Net Operating Profit After
Cash-Basis Taxes
    
    $
    (5.2
    )
 Average Monthly Net Capital Employed:
 Total Shareholders Equity as Reported at June 28, 2009
    
    $
    71.4Long-Term Liabilities
    
    
    24.8Deferred Tax Asset
    
    
    (15.3
    )Other
    
    
    (2.4
    )Net Capital Employed at June 28, 2009
    
    $
    78.5Impact of 12 Month Average
    
    
    6.3Average Monthly Net Capital Employed
    
    $
    84.8
 ®
   2009 STRATTEC Annual Report
    
    4




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COMPANY DESCRIPTION
 BASIC BUSINESS
  
 HISTORY
   
 PRODUCTS
  
  
  2009 STRATTEC Annual Report
    
    5




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COMPANY DESCRIPTION
   MARKETS
   2009 STRATTEC Annual Report
    
    6




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COMPANY DESCRIPTION
  
  
 
 CUSTOMER FOCUS
  
 The Aston Martin DBS uses an electronic key fob and mating docking station developed by STRATTEC
exclusively for Aston Martin.
 
 
 2009 STRATTEC Annual Report
    
    7




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COMPANY DESCRIPTION
     OPERATIONS
   ADVANCED DEVELOPMENT
   2009 STRATTEC Annual Report
    
    8




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COMPANY DESCRIPTION
 VAST ALLIANCE
   2009 STRATTEC Annual Report

    
    9




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COMPANY DESCRIPTION
 ADAC-STRATTEC de MEXICO
  (GRAPHIC)(GRAPHIC)
 STRATTEC has just introduced the worlds first codeable padlock. In a simple one-step process,
users can code the padlock to their vehicle key. This provides significant convenience by reducing
the number of keys users need to secure their lockers, storage sheds and vehicle accessories such
as tool boxes, trailer hitches, etc.
 STRATTEC POWER ACCESS LLC
  SEASONAL NATURE OF THE BUSINESS
   2009 STRATTEC Annual Report
    
    10




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##### 



COMPANY DESCRIPTION
  GLOBAL PRESENCE
 
 1. STRATTEC  Milwaukee, Wisconsin12. STRATTEC de Mexico  Juarez, Mexico13. STRATTEC de Mexico  Key Finishing  Juarez, Mexico14. ADAC-STRATTEC de Mexico  Juarez, Mexico5. STRATTEC Power Access de Mexico  Juarez, Mexico6. ADAC Automotive  Grand Rapids and Muskegan, Michigan17. ADAC Automotive, STRATTEC and STRATTEC POWER ACCESS(Sales/Engineering Offices  Detroit, Michigan18. WITTE Automotive  Velbert, Germany19. WITTE Automotive  Nejdek, Czech Republic110. VAST do Brasil  Sao Paulo, Brazil211. VAST Fuzhou  Fuzhou, China212. VAST Great Shanghai Co.  Shanghai, China213. VAST Japan  Tokyo, Japan (Branch Office)214. VAST Korea  Anyang, Korea (Branch Office)2
 
 1
    
    Members of the VAST Alliance. 2 Units of VAST LLC joint venture. ECONOMIC VALUE COMMITMENT
 ® ® ®
   2009 STRATTEC Annual Report
    
    11




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2009 STRATTEC Annual Report
    
    12




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS
  Purchase of Delphi Power Products Business
     RESULTS OF OPERATIONS   Fiscal 2009 Highlights
   2009 STRATTEC Annual Report
    
    13




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MANAGEMENTS DISCUSSION AND ANALYSIS
     2009 Compared to 2008
   2009 STRATTEC Annual Report
    
    14




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MANAGEMENTS DISCUSSION AND ANALYSIS
          2008 Compared to 2007
   2009 STRATTEC Annual Report
    
    15




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##### 



MANAGEMENTS DISCUSSION AND ANALYSIS
   2009 STRATTEC Annual Report
    
    16




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MANAGEMENTS DISCUSSION AND ANALYSIS
  LIQUIDITY AND CAPITAL RESOURCES
  U.S.
    
    Canada
    
    Mexico
    
    TotalGeneral Motors
    
    $
    6,814
    
    
    $
    
    
    
    $
    215
    
    
    $
    7,029Ford
    
    $
    2,192
    
    
    $
    184
    
    
    $
    
    
    
    $
    2,376Chrysler
    
    $
    1,599
    
    
    $
    543
    
    
    $
    485
    
    
    $
    2,627
   2009 STRATTEC Annual Report
    
    17




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MANAGEMENTS DISCUSSION AND ANALYSIS
    OFF-BALANCE SHEET ARRANGEMENTS
  Payments Due By PeriodLess Than
    
    
    
    
    
    
    
    
    
    
    More ThanContractual Obligation
    
    Total
    
    
    1 Year
    
    
    13 Years
    
    
    35 Years
    
    
    5 YearsOperating Leases
    
    $
    2,784
    
    
    $
    645
    
    
    $
    1,150
    
    
    $
    789
    
    
    $
    200Other Purchase Obligations
    
    
    9,997
    
    
    
    7,941
    
    
    
    2,056
    
    
    
    
    
    
    
    Pension and
Postretirement
Obligations (a)
    
    
    7,492
    
    
    
    7,492
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    20,273
    
    
    $
    16,078
    
    
    $
    3,206
    
    
    $
    789
    
    
    $
    200
 
 (a)
    
    As disclosed in our Notes to Financial Statements, estimated cash funding
related to our pension and postretirement benefit plans totals $7.5 million in 2010. Because
the timing of funding related to these plans beyond 2010 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 2010 have not been included
in the table above.  JOINT VENTURES
   2009 STRATTEC Annual Report
    
    18




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MANAGEMENTS DISCUSSION AND ANALYSIS
   RECENTLY ISSUED ACCOUNTING STANDARDS
   Fair Value Measurements
 Subsequent Events
   2009 STRATTEC Annual Report
    
    19




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MANAGEMENTS DISCUSSION AND ANALYSIS
  CRITICAL ACCOUNTING POLICIES
  Pension and Postretirement Health Benefits 
   2009 STRATTEC Annual Report
    
    20




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MANAGEMENTS DISCUSSION AND ANALYSIS
   Other Reserves 
   2009 STRATTEC Annual Report
    
    21




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MANAGEMENTS DISCUSSION AND ANALYSIS
   Stock-Based Compensation 
 RISK FACTORS
  Loss of Significant Customers, Vehicle Content, Vehicle Models and Market Share 
   Production Slowdowns for Customers 
   2009 STRATTEC Annual Report
    
    22




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MANAGEMENTS DISCUSSION AND ANALYSIS
  Financial Distress of Automotive Supply Base 
 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 
   2009 STRATTEC Annual Report
    
    23




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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 
 Financial Industry / Credit Market Risk 
   2009 STRATTEC Annual Report
    
    24




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CONSOLIDATED STATEMENTS OF OPERATIONS
 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 Years EndedJune 28, 2009
    
    
    June 29, 2008
    
    
    July 1, 2007NET SALES
    
    $
    126,097
    
    
    $
    159,642
    
    
    $
    167,707Cost of goods sold
    
    
    112,857
    
    
    
    134,875
    
    
    
    141,187GROSS PROFIT
    
    
    13,240
    
    
    
    24,767
    
    
    
    26,520Engineering, selling, and
administrative expenses
    
    
    25,480
    
    
    
    23,962
    
    
    
    20,189Provision for doubtful accounts, net
    
    
    500
    
    
    
    
    
    
    
    (LOSS) INCOME FROM OPERATIONS
    
    
    (12,740
    )
    
    
    805
    
    
    
    6,331Interest income
    
    
    731
    
    
    
    2,749
    
    
    
    3,611Interest expense
    
    
    
    
    
    
    
    
    
    
    Other income, net
    
    
    885
    
    
    
    230
    
    
    
    715Minority interest
    
    
    801
    
    
    
    (76
    )
    
    
    75(LOSS) INCOME BEFORE PROVISION FOR
INCOME TAXES
    
    
    (10,323
    )
    
    
    3,708
    
    
    
    10,732(Benefit) provision for income taxes
    
    
    (4,201
    )
    
    
    927
    
    
    
    2,533NET (LOSS) INCOME
    
    $
    (6,122
    )
    
    $
    2,781
    
    
    $
    8,199(LOSS) EARNINGS PER SHARE:BASIC
    
    $
    (1.87
    )
    
    $
    0.80
    
    
    $
    2.31DILUTED
    
    $
    (1.86
    )
    
    $
    0.80
    
    
    $
    2.31AVERAGE SHARES OUTSTANDING:BASIC
    
    
    3,280
    
    
    
    3,487
    
    
    
    3,552DILUTED
    
    
    3,284
    
    
    
    3,494
    
    
    
    3,555
   2009 STRATTEC Annual Report
    
    25




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##### 



CONSOLIDATED BALANCE SHEETS
 (IN THOUSANDS, EXCEPT SHARE AMOUNTS AND PER SHARE AMOUNTS)
 June 28, 2009
    
    
    June 29, 2008ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    22,764
    
    
    $
    51,501Receivables, less allowance for doubtful accounts
of $750 at June 28, 2009 and $250 at June 29, 2008
    
    
    17,235
    
    
    
    23,518Inventories
    
    
    16,589
    
    
    
    14,314Customer tooling in progress
    
    
    1,714
    
    
    
    3,914Deferred income taxes
    
    
    2,124
    
    
    
    1,715Income taxes recoverable
    
    
    1,181
    
    
    
    1,815Other current assets
    
    
    10,951
    
    
    
    8,997Total current assets
    
    
    72,558
    
    
    
    105,774DEFERRED INCOME TAXES
    
    
    13,143
    
    
    
    3,684INVESTMENT IN JOINT VENTURES
    
    
    4,483
    
    
    
    3,642PREPAID PENSION OBLIGATIONS
    
    
    
    
    
    
    758OTHER LONG-TERM ASSETS
    
    
    1,069
    
    
    
    27PROPERTY, PLANT AND EQUIPMENT, NET
    
    
    36,936
    
    
    
    30,336$
    128,189
    
    
    $
    144,221LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable
    
    $
    11,369
    
    
    $
    15,974Accrued liabilities:Payroll and benefits
    
    
    8,232
    
    
    
    7,319Environmental
    
    
    2,636
    
    
    
    2,648Income taxes
    
    
    
    
    
    
    Other
    
    
    8,611
    
    
    
    6,998Total current liabilities
    
    
    30,848
    
    
    
    32,939COMMITMENTS AND CONTINGENCIES see note on page 37BORROWINGS UNDER LINE OF CREDIT
    
    
    
    
    
    
    ACCRUED PENSION OBLIGATIONS
    
    
    15,183
    
    
    
    2,606ACCRUED POSTRETIREMENT OBLIGATIONS
    
    
    9,601
    
    
    
    9,783MINORITY INTEREST
    
    
    1,139
    
    
    
    953SHAREHOLDERS EQUITY:Common stock, authorized 12,000,000 shares, $.01 par value,
issued 6,897,957 shares at June 28, 2009 and
6,887,757 shares at June 29, 2008
    
    
    69
    
    
    
    69Capital in excess of par value
    
    
    79,247
    
    
    
    78,885Retained earnings
    
    
    159,285
    
    
    
    166,397Accumulated other comprehensive loss
    
    
    (31,094
    )
    
    
    (17,495
    )Less: Treasury stock at cost (3,635,989 shares at
June 28, 2009 and 3,444,548 shares at June 29, 2008)
    
    
    (136,089
    )
    
    
    (129,916
    )Total shareholders equity
    
    
    71,418
    
    
    
    97,940$
    128,189
    
    
    $
    144,221
   2009 STRATTEC Annual Report
    
    26




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CONSOLIDATED STATEMENTS OF
SHAREHOLDERS EQUITY   (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 AccumulatedCapital in
    
    
    
    
    
    
    OtherCommon
    
    
    Excess of
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury
    
    
    ComprehensiveStock
    
    
    Par Value
    
    
    Earnings
    
    
    Loss
    
    
    Stock
    
    
    IncomeBALANCE JULY 2, 2006
    
    $
    69
    
    
    $
    77,175
    
    
    $
    160,723
    
    
    $
    (2,958
    )
    
    $
    (121,756
    )Net Income
    
    
    
    
    
    
    
    
    
    
    8,199
    
    
    
    
    
    
    
    
    
    
    $
    8,199Translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    449
    
    
    
    
    
    
    
    449Minimum pension liability,
net of tax of $14
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24
    
    
    
    
    
    
    
    24Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    8,672Purchase 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 $1363
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,224Net losses, net of tax of $8,629
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,080
    )
    
    
    BALANCE JULY 1, 2007
    
    $
    69
    
    
    $
    78,122
    
    
    $
    168,922
    
    
    $
    (14,341
    )
    
    $
    (126,818
    )Net Income
    
    
    
    
    
    
    
    
    
    
    2,781
    
    
    
    
    
    
    
    
    
    
    $
    2,781Translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    714
    
    
    
    
    
    
    
    714Pension and postretirement
status adjustment, net of tax
of $2,371
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,868
    )
    
    
    
    
    
    
    (3,868
    )Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (373
    )Purchase of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,109
    )Cash dividends declared
($1.60 per share)
    
    
    
    
    
    
    
    
    
    
    (5,652
    )
    
    
    
    
    
    
    Stock-Based Compensation,
including tax benefit on
restricted
stock dividends of $13
    
    
    
    
    
    
    745
    
    
    
    
    
    
    
    
    
    
    
    Adoption of FIN 48
    
    
    
    
    
    
    
    
    
    
    346
    
    
    
    
    
    
    
    Employee stock purchases
    
    
    
    
    
    
    18
    
    
    
    
    
    
    
    
    
    
    
    11BALANCE JUNE 29, 2008
    
    $
    69
    
    
    $
    78,885
    
    
    $
    166,397
    
    
    $
    (17,495
    )
    
    $
    (129,916
    )Net loss
    
    
    
    
    
    
    
    
    
    
    (6,122
    )
    
    
    
    
    
    
    
    
    
    $
    (6,122
    )Translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,485
    )
    
    
    
    
    
    
    (2,485
    )Pension and postretirement
funded status adjustment,
net of tax of $6,812
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,114
    )
    
    
    
    
    
    
    (11,114
    )Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (19,721
    )Purchase of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,214
    )Cash dividends declared
($0.30 per share)
    
    
    
    
    
    
    
    
    
    
    (990
    )
    
    
    
    
    
    
    Stock-Based
Compensation, including
tax benefit on restricted stock
dividends of $5
    
    
    
    
    
    
    363
    
    
    
    
    
    
    
    
    
    
    
    Employee stock purchases
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    41BALANCE JUNE 28, 2009
    
    $
    69
    
    
    $
    79,247
    
    
    $
    159,285
    
    
    $
    (31,094
    )
    
    $
    (136,089
    )
   2009 STRATTEC Annual Report
    
    27




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CONSOLIDATED STATEMENTS OF CASH FLOWS   (IN THOUSANDS)
 Years EndedJune 28, 2009
    
    
    June 29, 2008
    
    
    July 1, 2007CASH FLOWS FROM OPERATING ACTIVITIESNet (Loss) Income
    
    $
    (6,122
    )
    
    $
    2,781
    
    
    $
    8,199Adjustments to reconcile net (loss) income to
net cash provided by operating activities:Minority Interest
    
    
    (780
    )
    
    
    26
    
    
    
    (75
    )Depreciation and amortization
    
    
    6,264
    
    
    
    6,830
    
    
    
    6,988Foreign Currency Transaction (Gain) Loss
    
    
    (918
    )
    
    
    320
    
    
    
    296Loss on disposition of property,
plant and equipment
    
    
    39
    
    
    
    434
    
    
    
    58Deferred income taxes
    
    
    (2,986
    )
    
    
    622
    
    
    
    (349
    )Tax benefit from options exercised
    
    
    
    
    
    
    
    
    
    
    23Stock-based compensation expense
    
    
    419
    
    
    
    741
    
    
    
    738Provision for doubtful accounts
    
    
    500
    
    
    
    
    
    
    
    Change in operating assets and liabilities:Receivables
    
    
    5,235
    
    
    
    3,465
    
    
    
    1,434Inventories
    
    
    1,033
    
    
    
    (2,319
    )
    
    
    2,145Other assets
    
    
    (1,966
    )
    
    
    (8,413
    )
    
    
    (7,277
    )Accounts payable and accrued liabilities
    
    
    (7,326
    )
    
    
    163
    
    
    
    (1,937
    )Other, net
    
    
    (228
    )
    
    
    (832
    )
    
    
    (392
    )Net cash (used) provided by operating
activities
    
    
    (6,836
    )
    
    
    3,818
    
    
    
    9,851CASH FLOWS FROM INVESTING ACTIVITIESInvestment in joint ventures
    
    
    (551
    )
    
    
    
    
    
    
    (100
    )Additions to property, plant and equipment
    
    
    (12,492
    )
    
    
    (10,930
    )
    
    
    (5,748
    )Purchase of Delphi Power Products
    
    
    (4,931
    )
    
    
    
    
    
    
    Proceeds received on sale of property,
plant and equipment
    
    
    8
    
    
    
    
    
    
    
    21Net cash used in investing activities
    
    
    (17,966
    )
    
    
    (10,930
    )
    
    
    (5,827
    )CASH FLOWS FROM FINANCING ACTIVITIESPurchase of common stock
    
    
    (6,214
    )
    
    
    (3,109
    )
    
    
    (5,075
    )Exercise of stock options and employee stock
purchases
    
    
    40
    
    
    
    29
    
    
    
    238Dividends paid
    
    
    (1,511
    )
    
    
    (5,133
    )
    
    
    Loan from minority interest
    
    
    2,175
    
    
    
    1,050
    
    
    
    Contribution from minority interest
    
    
    986
    
    
    
    349
    
    
    
    649Net cash used in financing activities
    
    
    (4,524
    )
    
    
    (6,814
    )
    
    
    (4,188
    )FOREIGN CURRENCY IMPACT ON CASH
    
    
    589
    
    
    
    (64
    )
    
    
    (57
    )NET DECREASE IN CASH
AND CASH EQUIVALENTS
    
    
    (28,737
    )
    
    
    (13,990
    )
    
    
    (221
    )CASH AND CASH EQUIVALENTSBeginning of year
    
    
    51,501
    
    
    
    65,491
    
    
    
    65,712End of year
    
    $
    22,764
    
    
    $
    51,501
    
    
    $
    65,491SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATIONIncome taxes (recovered) paid
    
    $
    (1,869
    )
    
    $
    3,238
    
    
    $
    3,231Interest paid
    
    
    
    
    
    
    
    
    
    
    
   2009 STRATTEC Annual Report
    
    28




---



##### 



NOTES TO FINANCIAL STATEMENTS
 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
    Purchase of Delphi Power Products Business:
    Principles of Consolidation and Presentation:
 Reclassifications:
 Fiscal Year:
 Use of Estimates:
 Cash and Cash Equivalents:
 Fair Value of Financial Instruments:
   2009 STRATTEC Annual Report
    
    29




---



##### 



NOTES TO FINANCIAL STATEMENTS
  Level 1
    
    Level 2
    
    Level 3
    
    TotalRabbi Trust assets
    
    $
    3,534
    
    
    $
    
    
    
    $
    
    
    
    $
    3,534
  Receivables:
 Balance,
    
    Provision
    
    
    
    
    
    Balance,Beginning
    
    Charged to
    
    Balances
    
    End ofof Year
    
    Expense
    
    Written Off
    
    YearYear ended June 28, 2009
    
    $
    250
    
    
    $
    500
    
    
    $
    
    
    
    $
    750Year ended June 29, 2008
    
    $
    250
    
    
    $
    
    
    
    $
    
    
    
    $
    250Year ended July 1, 2007
    
    $
    250
    
    
    $
    
    
    
    $
    
    
    
    $
    250
 Inventories:
 June 28, 2009
    
    
    June 29, 2008Finished products
    
    $
    3,812
    
    
    $
    2,521Work in process
    
    
    3,432
    
    
    
    4,379Purchased materials
    
    
    9,345
    
    
    
    7,414$
    16,589
    
    
    $
    14,314
   2009 STRATTEC Annual Report
    
    30




---



##### 



NOTES TO FINANCIAL STATEMENTS
 2008
    
    2007Originally
    
    As Computed
    
    Originally
    
    As ComputedReported
    
    Under FIFO
    
    Reported
    
    Under FIFOConsolidated Statements of
Operations:Cost of goods sold
    
    $
    134,091
    
    
    $
    134,875
    
    
    $
    141,213
    
    
    $
    141,187Provision for income taxes
    
    
    1,225
    
    
    
    927
    
    
    
    2,523
    
    
    
    2,533Net income
    
    
    3,267
    
    
    
    2,781
    
    
    
    8,183
    
    
    
    8,199Basic earnings per share
    
    
    0.94
    
    
    
    0.80
    
    
    
    2.30
    
    
    
    2.31Diluted earnings per share
    
    
    0.94
    
    
    
    0.80
    
    
    
    2.30
    
    
    
    2.31Consolidated Balance SheetsInventories
    
    
    10,269
    
    
    
    14,314
    
    
    
    7,166
    
    
    
    11,995Deferred income taxes  current
    
    
    3,252
    
    
    
    1,715
    
    
    
    2,729
    
    
    
    894Retained earnings
    
    
    163,889
    
    
    
    166,397
    
    
    
    165,928
    
    
    
    168,922Consolidated Statements of
Cash FlowsDeferred income taxes
    
    
    920
    
    
    
    622
    
    
    
    (359
    )
    
    
    (349
    )Change in inventories
    
    
    (3,103
    )
    
    
    (2,319
    )
    
    
    2,171
    
    
    
    2,145
  September 28, 2008
    
    December 28, 2008
    
    March 29, 2009As
    
    
    
    
    
    As
    
    
    
    
    
    AsComputed
    
    
    
    
    
    Computed
    
    
    
    ComputedOriginally
    
    Under
    
    Originally
    
    Under
    
    Originally
    
    UnderReported
    
    FIFO
    
    Reported
    
    FIFO
    
    Reported
    
    FIFOConsolidated Statements of
Operations:Cost of goods sold
    
    $
    29,289
    
    
    $
    29,307
    
    
    $
    30,919
    
    
    $
    30,888
    
    
    $
    27,295
    
    
    $
    27,285Net income (loss)
    
    
    38
    
    
    
    20
    
    
    
    (1,233
    )
    
    
    (1,202
    )
    
    
    (2,832
    )
    
    
    (2,822
    )Basic earnings (loss) per share
    
    
    0.01
    
    
    
    0.01
    
    
    
    (0.38
    )
    
    
    (0.37
    )
    
    
    (0.87
    )
    
    
    (0.87
    )Diluted earnings per share
    
    
    0.01
    
    
    
    0.01
    
    
    
    (0.38
    )
    
    
    (0.37
    )
    
    
    (0.87
    )
    
    
    (0.87
    )Consolidated Balance SheetsInventories
    
    
    10,625
    
    
    
    14,652
    
    
    
    14,793
    
    
    
    18,851
    
    
    
    11,513
    
    
    
    15,581Other current assets
    
    
    19,123
    
    
    
    17,586
    
    
    
    19,313
    
    
    
    17,776
    
    
    
    18,870
    
    
    
    17,333Retained earnings
    
    
    163,430
    
    
    
    165,920
    
    
    
    161,703
    
    
    
    164,224
    
    
    
    158,872
    
    
    
    161,403
  Customer Tooling in Progress:
 Repair and Maintenance Supply Parts:
   2009 STRATTEC Annual Report
    
    31




---



##### 



NOTES TO FINANCIAL STATEMENTS
 Balance,
    
    Provision
    
    
    
    
    
    Balance,Beginning
    
    Charged to
    
    Amounts
    
    End ofof Year
    
    Expense
    
    Written Off
    
    YearYear ended June 28, 2009
    
    $
    650
    
    
    $
    80
    
    
    $
    100
    
    
    $
    630Year ended June 29, 2008
    
    $
    640
    
    
    $
    145
    
    
    $
    135
    
    
    $
    650Year ended July 1, 2007
    
    $
    650
    
    
    $
    32
    
    
    $
    42
    
    
    $
    640
 Property, Plant and Equipment:
 Classification
    
    Expected Useful LivesLand improvements
    
    20 yearsBuildings and improvements
    
    
    20 to 35 yearsMachinery and equipment
    
    
    3 to 10 years
  June 28, 2009
    
    
    June 29, 2008Land and improvements
    
    $
    2,841
    
    
    $
    3,349Buildings and improvements
    
    
    17,862
    
    
    
    12,913Machinery and equipment
    
    
    110,799
    
    
    
    103,183131,502
    
    
    
    119,445Less: accumulated depreciation
    
    
    (94,566
    )
    
    
    (89,109
    )$
    36,936
    
    
    $
    30,336
   Supplier Concentrations:
 Labor Concentrations:
 Revenue Recognition:
 Research and Development Costs:
 Other Income, Net:
   2009 STRATTEC Annual Report
    
    32




---



##### 



NOTES TO FINANCIAL STATEMENTS
 Years EndedJune 28, 2009
    
    
    June 29, 2008
    
    
    July 1, 2007Foreign currency transaction gain (loss)
    
    $
    918
    
    
    $
    (320
    )
    
    $
    (296
    )Equity in earnings from joint venture
    
    
    245
    
    
    
    561
    
    
    
    394Rabbi Trust (loss) gain
    
    
    (393
    )
    
    
    (174
    )
    
    
    450$
    770
    
    
    $
    67
    
    
    $
    548
 Self Insurance and Loss Sensitive Plans:
    Balance,
    
    Provision
    
    
    
    
    
    Balance,Beginning
    
    Charged to
    
    
    
    
    
    End ofof Year
    
    Expense
    
    Payments
    
    YearYear ended June 28, 2009Incurred but not reported claims
reserve for self-insured plans
    
    $
    300
    
    
    $
    2,468
    
    
    $
    2,468
    
    
    $
    300Workers Compensation
    
    
    (140
    )
    
    
    208
    
    
    
    146
    
    
    
    (78
    )Year ended June 29, 2008Incurred but not reported claims
reserve for self-insured plans
    
    $
    300
    
    
    $
    2,408
    
    
    $
    2,408
    
    
    $
    300Workers Compensation
    
    
    (251
    )
    
    
    254
    
    
    
    143
    
    
    
    (140
    )Year ended July 1, 2007Incurred but not reported claims
reserve for self-insured plans
    
    $
    400
    
    
    $
    2,250
    
    
    $
    2,350
    
    
    $
    300Workers Compensation
    
    
    (185
    )
    
    
    331
    
    
    
    397
    
    
    
    (251
    )
 Product Warranty:
   2009 STRATTEC Annual Report
    
    33




---



##### 



NOTES TO FINANCIAL STATEMENTS
 Foreign Currency Translation:
 Accumulated Other Comprehensive Loss:
 June 28, 2009
    
    
    June 29, 2008
    
    
    July 1, 2007Unrecognized pension and postretirement
benefit liabilities, net of tax
    
    $
    26,876
    
    
    $
    15,762
    
    
    $
    11,894Foreign currency translation
    
    
    4,218
    
    
    
    1,733
    
    
    
    2,447$
    31,094
    
    
    $
    17,495
    
    
    $
    14,341
  Accounting For Stock-Based Compensation:
      Years EndedJune 28, 2009
    
    June 29, 2008
    
    July 1, 2007Intrinsic value of options exercised
    
    $
    0
    
    
    $
    0
    
    
    $
    186Fair value of stock options vesting
    
    $
    469
    
    
    $
    273
    
    
    $
    762
   2009 STRATTEC Annual Report
    
    34




---



##### 



NOTES TO FINANCIAL STATEMENTS
 2009Options Granted DuringWeighted average grant date fair value:Options issued at grant date market value
    
    
    $3.80Options issued above grant date market value
    
    
    n/aAssumptions:Risk free interest rates
    
    
    2.22
    %Expected volatility
    
    
    32.96
    %Dividends
    
    
    1.67
    %Expected term (in years)
    
    
    5.5
  Weighted Average RemainingNumber of Options
    
    Weighted Average Exercise
    
    Contractual Life OutstandingOutstanding/Exercisable
    
    Price Outstanding/Exercisable
    
    (In Years)$10.92-$18.00
    
    
    96,800/-
    
    
    
    $11.80/-
    
    
    
    9.6$31.95-$44.99
    
    
    5,100/5,100
    
    
    
    $39.27/$39.27
    
    
    
    2.7$53.07-$56.08
    
    
    54,500/54,500
    
    
    
    $53.90/$53.90
    
    
    
    4.4Over $61.21
    
    
    70,840/70,840
    
    
    
    $61.72/$61.72
    
    
    
    2.9$38.08/$57.58
 Recent Accounting Pronouncements:
  Fair Value Measurements
   2009 STRATTEC Annual Report
    
    35




---



##### 



NOTES TO FINANCIAL STATEMENTS
 Subsequent Events
 Form 10-Q.
 INVESTMENT IN JOINT VENTURES
       LINE OF CREDIT
   2009 STRATTEC Annual Report
    
    36




---



##### 



NOTES TO FINANCIAL STATEMENTS
  COMMITMENTS AND CONTINGENCIES
   INCOME TAXES
   2009
    
    
    2008
    
    
    2007Currently (refundable) payable:Federal
    
    $
    (1,747
    )
    
    $
    62
    
    
    $
    2,624State
    
    
    150
    
    
    
    226
    
    
    
    485State refund claim recovery
    
    
    
    
    
    
    
    
    
    
    (506
    )Foreign
    
    
    382
    
    
    
    17
    
    
    
    279(1,215
    )
    
    
    305
    
    
    
    2,882Deferred tax (benefit) provision
    
    
    (2,986
    )
    
    
    622
    
    
    
    (349
    )$
    (4,201
    )
    
    $
    927
    
    
    $
    2,533
  2009
    
    2008
    
    2007U.S. statutory rate
    
    
    34.0
    %
    
    
    34.0
    %
    
    
    34.0
    %State taxes, net of Federal tax benefit
    
    
    1.3
    
    
    
    4.7
    
    
    
    2.6State refund claim recovery
    
    
    
    
    
    
    
    
    
    
    (3.1
    )Foreign sales benefit
    
    
    
    
    
    
    
    
    
    
    (4.2
    )Foreign Subsidiaries
    
    
    4.6
    
    
    
    (9.8
    )
    
    
    (4.9
    )Other
    
    
    .8
    
    
    
    (3.9
    )
    
    
    (.8
    )40.7
    %
    
    
    25.0
    %
    
    
    23.6
    %
   2009 STRATTEC Annual Report
    
    37




---



##### 



NOTES TO FINANCIAL STATEMENTS
   June 28, 2009
    
    
    June 29, 2008Deferred income taxescurrent:Repair and maintenance supply parts reserve
    
    $
    239
    
    
    $
    247Payroll-related accruals
    
    
    814
    
    
    
    850Environmental reserve
    
    
    1,002
    
    
    
    1,006Accrued customer pricing
    
    
    934
    
    
    
    1,245Method change for inventory valuation
    
    
    (1,317
    )
    
    
    (1,537
    )Other
    
    
    452
    
    
    
    (96
    )$
    2,124
    
    
    $
    1,715Deferred income taxesnoncurrent:Accrued pension obligations
    
    $
    (7,384
    )
    
    $
    (6,513
    )Unrecognized pension and postretirement
benefit plan liabilities
    
    
    16,472
    
    
    
    9,661Accumulated depreciation
    
    
    (1,807
    )
    
    
    (2,319
    )Stock-based compensation
    
    
    707
    
    
    
    806Postretirement obligations
    
    
    1,625
    
    
    
    1,721NOL/credit carry-forwards
    
    
    3,259
    
    
    
    Other
    
    
    271
    
    
    
    328$
    13,143
    
    
    $
    3,684
      Unrecognized tax benefits June 29, 2008
    
    $
    1,178Gross increases  tax positions in prior years
    
    
    362Gross decreases  tax positions in prior years
    
    
    (4
    )Gross increases  current period tax positions
    
    
    310Lapse of statute of limitations
    
    
    (626
    )Unrecognized tax benefits June 28, 2009
    
    $
    1,220
 2009 STRATTEC Annual Report
    
    38




---



##### 



NOTES TO FINANCIAL STATEMENTS
  RETIREMENT PLANS AND POSTRETIREMENT COSTS
     Pension and SERP Benefits
    
    
    Postretirement BenefitsPrior service cost (credit)
    
    $
    400
    
    
    $
    (2,216
    )Net actuarial loss
    
    
    22,423
    
    
    
    6,269$
    22,823
    
    
    $
    4,053
   2009 STRATTEC Annual Report
    
    39




---



##### 



NOTES TO FINANCIAL STATEMENTS
 Pension and SERP Benefits
    
    
    Postretirement Benefits2009
    
    
    2008
    
    
    2007
    
    
    2009
    
    
    2008
    
    
    2007COMPONENTS OF NET PERIODIC BENEFIT
COST:Service cost
    
    $
    1,935
    
    
    $
    2,018
    
    
    $
    1,974
    
    
    $
    191
    
    
    $
    221
    
    
    $
    219Interest cost
    
    
    5,083
    
    
    
    4,680
    
    
    
    4,348
    
    
    
    737
    
    
    
    718
    
    
    
    688Expected return on plan assets
    
    
    (6,562
    )
    
    
    (6,210
    )
    
    
    (5,348
    )
    
    
    
    
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    79
    
    
    
    64
    
    
    
    64
    
    
    
    (388
    )
    
    
    (378
    )
    
    
    (378
    )Amortization of unrecognized net loss
    
    
    255
    
    
    
    643
    
    
    
    473
    
    
    
    695
    
    
    
    702
    
    
    
    641Net periodic benefit cost
    
    $
    790
    
    
    $
    1,195
    
    
    $
    1,511
    
    
    $
    1,235
    
    
    $
    1,263
    
    
    $
    1,170
 Pension and SERP Benefits
    
    
    Postretirement BenefitsJune 28,
    
    
    June 29,
    
    
    June 28,
    
    
    June 29,2009
    
    
    2008
    
    
    2009
    
    
    2008WEIGHTED-AVERAGE
ASSUMPTIONSBenefit Obligations:Discount rate
    
    
    6.86
    %
    
    
    7.13
    %
    
    
    6.86
    %
    
    
    7.13
    %Expected return on
plan assets
    
    
    8.0
    %
    
    
    8.0
    %
    
    
    n/a
    
    
    
    n/aRate of compensation
increases
    
    
    3.0
    %
    
    
    3.5
    %
    
    
    n/a
    
    
    
    n/aNet Periodic Benefit
Cost:Discount rate
    
    
    7.13
    %
    
    
    6.41
    %
    
    
    7.13
    %
    
    
    6.41
    %Expected return on
plan assets
    
    
    8.25
    %
    
    
    8.5
    %
    
    
    n/a
    
    
    
    n/aRate of compensation
increases
    
    
    3.5
    %
    
    
    3.5
    %
    
    
    n/a
    
    
    
    n/a
 2009
    
    
    2008
    
    
    2009
    
    
    2008CHANGE IN PROJECTED
BENEFIT OBLIGATION:Benefit obligation at
beginning of year
    
    $
    72,939
    
    
    $
    74,494
    
    
    $
    10,871
    
    
    $
    11,748Service cost
    
    
    1,935
    
    
    
    2,018
    
    
    
    191
    
    
    
    221Interest cost
    
    
    5,083
    
    
    
    4,680
    
    
    
    737
    
    
    
    718Plan amendments
    
    
    
    
    
    
    167
    
    
    
    
    
    
    
    (131
    )Actuarial loss (gain)
    
    
    1,567
    
    
    
    (5,399
    )
    
    
    502
    
    
    
    (441
    )Benefits paid
    
    
    (3,466
    )
    
    
    (3,021
    )
    
    
    (1,489
    )
    
    
    (1,244
    )Benefit obligation at
end of year
    
    $
    78,058
    
    
    $
    72,939
    
    
    $
    10,812
    
    
    $
    10,871CHANGE IN PLAN ASSETS:Fair value of plan
assets at beginning of
year
    
    $
    70,996
    
    
    $
    75,881
    
    
    $
    
    
    
    $
    Actual return on plan
assets
    
    
    (9,936
    )
    
    
    (6,864
    )
    
    
    
    
    
    
    Employer contribution
    
    
    3,000
    
    
    
    5,000
    
    
    
    1,489
    
    
    
    1,244Benefits paid
    
    
    (3,466
    )
    
    
    (3,021
    )
    
    
    (1,489
    )
    
    
    (1,244
    )Fair value of plan
assets at end of year
    
    
    60,594
    
    
    
    70,996
    
    
    
    
    
    
    
    Funded status  prepaid
(accrued) benefit
obligations
    
    $
    (17,464
    )
    
    $
    (1,943
    )
    
    $
    (10,812
    )
    
    $
    (10,871
    )AMOUNTS RECOGNIZED IN
CONSOLIDATED BALANCE
SHEETS:Accrued payroll and
benefits (current
liabilities)
    
    $
    (2,282
    )
    
    $
    (95
    )
    
    $
    (1,211
    )
    
    $
    (1,088
    )Accrued benefit
obligations (long-term
liabilities)
    
    
    (15,183
    )
    
    
    (2,606
    )
    
    
    (9,601
    )
    
    
    (9,783
    )Prepaid pension
obligations (long-term
assets)
    
    
    0
    
    
    
    758
    
    
    
    
    
    
    
    Net amount recognized
    
    $
    (17,465
    )
    
    $
    (1,943
    )
    
    $
    (10,812
    )
    
    $
    (10,871
    )
   2009 STRATTEC Annual Report
    
    40




---



##### 



NOTES TO FINANCIAL STATEMENTS
 Pension and SERP Benefits
    
    
    Postretirement BenefitsJune 28,
    
    
    June 29,
    
    
    June 28,
    
    
    June 29,2009
    
    
    2008
    
    
    2009
    
    
    2008CHANGES IN PLAN ASSETS AND
BENEFIT OBLIGATIONS RECOGNIZED
IN OTHER COMPREHENSIVE INCOME:Net periodic benefit cost
    
    $
    790
    
    
    $
    1,195
    
    
    $
    1,235
    
    
    $
    1,263Net actuarial (gain) loss
    
    
    18,065
    
    
    
    7,675
    
    
    
    502
    
    
    
    (441
    )Prior service cost
    
    
    
    
    
    
    167
    
    
    
    
    
    
    
    (131
    )Amortization of prior service (cost) credits
    
    
    (79
    )
    
    
    (64
    )
    
    
    388
    
    
    
    378Amortization of unrecognized net loss
    
    
    (255
    )
    
    
    (643
    )
    
    
    (695
    )
    
    
    (702
    )Total recognized in other comprehensive
income, before tax
    
    
    17,731
    
    
    
    7,135
    
    
    
    195
    
    
    
    (896
    )Total recognized in net periodic benefit
cost and other comprehensive income
    
    $
    18,521
    
    
    $
    8,330
    
    
    $
    1,430
    
    
    $
    367
  Pension
    
    SERPJune 28, 2009
    
    June 29, 2008
    
    June 28, 2009
    
    June 29, 2008Accumulated benefit obligation
    
    $
    71,167
    
    
    $
    65,626
    
    
    $
    2,826
    
    
    $
    2,434Projected benefit obligation
    
    $
    75,079
    
    
    $
    70,238
    
    
    $
    2,979
    
    
    $
    2,701
   1% Increase
    
    1% DecreaseEffect on total of service and interest cost components in
fiscal 2009
    
    $
    67
    
    
    $
    (59
    )Effect on postretirement benefit obligation as of June 28, 2009
    
    $
    653
    
    
    $
    (589
    )
  Target Allocation
    
    June 28, 2009
    
    June 29, 2008Equity investments
    
    
    65
    %
    
    
    61
    %
    
    
    59
    %Fixed-income investments
    
    
    35
    %
    
    
    39
    %
    
    
    41
    %Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
   Pension and SERP Benefits
    
    Postretirement Benefits2010
    
    $
    6,386
    
    
    $
    1,2112011
    
    
    4,397
    
    
    
    1,4042012
    
    
    4,694
    
    
    
    1,5002013
    
    
    5,126
    
    
    
    1,5322014
    
    
    5,308
    
    
    
    1,5022015-2019
    
    
    30,131
    
    
    
    4,570
   2009 STRATTEC Annual Report
    
    41




---



##### 



NOTES TO FINANCIAL STATEMENTS
  SHAREHOLDERS EQUITY
   (LOSS) EARNINGS PER SHARE (LPS) (EPS)
  2009
    
    
    2008
    
    
    2007Net
    
    
    
    
    
    
    Per Share
    
    
    Net
    
    
    
    
    
    
    Per Share
    
    
    Net
    
    
    
    
    
    
    Per ShareLoss
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    AmountBasic (LPS) EPS
    
    $
    (6,122
    )
    
    
    3,280
    
    
    $
    (1.87
    )
    
    $
    2,781
    
    
    
    3,487
    
    
    $
    0.80
    
    
    $
    8,199
    
    
    
    3,552
    
    
    $
    2.31Stock-based
compensation
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    3Diluted (LPS) EPS
    
    $
    (6,122
    )
    
    
    3,284
    
    
    $
    (1.86
    )
    
    $
    2,781
    
    
    
    3,494
    
    
    $
    0.80
    
    
    $
    8,199
    
    
    
    3,555
    
    
    $
    2.31
  STOCK OPTION AND PURCHASE PLANS
  Weighted
    
    Weighted Average
    
    AggregateAverage
    
    Remaining
    
    Intrinsic ValueShares
    
    Exercise Price
    
    Contractual Term (in years)
    
    (in thousands)Balance 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
    
    
    $
    58.71Granted
    
    
    
    
    
    $
    Exercised
    
    
    
    
    
    $
    Expired
    
    
    (47,640
    )
    
    $
    58.59Terminated
    
    
    
    
    
    $
    Balance at June 29, 2008
    
    
    187,780
    
    
    $
    58.74Granted
    
    
    96,800
    
    
    $
    11.80Exercised
    
    
    
    
    
    $
    Expired
    
    
    (52,340
    )
    
    $
    61.68Terminated
    
    
    (5,000
    )
    
    $
    58.55Balance at June 28, 2009
    
    
    227,240
    
    
    $
    38.07
    
    
    
    6.1
    
    
    $
    253Exercisable as of:June 28, 2009
    
    
    130,440
    
    
    $
    57.57
    
    
    
    3.5
    
    
    $
    June 29, 2008
    
    
    148,440
    
    
    $
    58.09
    
    
    
    3.6
    
    
    $
    3July 1, 2007
    
    
    181,080
    
    
    $
    58.05
    
    
    
    3.2
    
    
    $
    39Available for grant as of
June 28, 2009
    
    
    332,003
   2009 STRATTEC Annual Report
    
    42




---



##### 



NOTES TO FINANCIAL STATEMENTS
  Weighted AverageGrant DateShares
    
    Fair ValueNonvested Balance at July 2, 2006
    
    
    9,600
    
    
    $
    51.24Granted
    
    
    10,000
    
    
    $
    40.00Vested
    
    
    
    
    
    $
    Forfeited
    
    
    (200
    )
    
    $
    40.00Nonvested Balance at July 1, 2007
    
    
    19,400
    
    
    $
    45.56Granted
    
    
    10,000
    
    
    $
    47.78Vested
    
    
    
    
    
    $
    Forfeited
    
    
    
    
    
    $
    Nonvested Balance at June 29, 2008
    
    
    29,400
    
    
    $
    46.32Granted
    
    
    10,000
    
    
    $
    29.00Vested
    
    
    (10,200
    )
    
    $
    50.58Forfeited
    
    
    (1,000
    )
    
    $
    46.22Nonvested Balance at June 28, 2009
    
    
    28,200
    
    
    $
    38.64
  EXPORT SALES
  2009
    
    2008
    
    2007Export Sales
    
    $
    28,050
    
    
    $
    25,714
    
    
    $
    30,643Percent of Net
Sales
    
    
    22
    %
    
    
    16
    %
    
    
    18
    %
  SALES AND RECEIVABLE CONCENTRATION
  2009
    
    
    2008
    
    
    2007Sales
    
    
    %
    
    
    Sales
    
    
    %
    
    
    Sales
    
    
    %General Motors Corporation
    
    $
    39,156
    
    
    
    31
    %
    
    $
    45,039
    
    
    
    28
    %
    
    $
    35,687
    
    
    
    21
    %Ford Motor Company
    
    
    12,575
    
    
    
    10
    %
    
    
    19,419
    
    
    
    12
    %
    
    
    21,013
    
    
    
    13
    %Chrysler LLC
    
    
    31,864
    
    
    
    25
    %
    
    
    40,209
    
    
    
    25
    %
    
    
    58,099
    
    
    
    35
    %Delphi Corporation
    
    
    6,326
    
    
    
    5
    %
    
    
    14,872
    
    
    
    9
    %
    
    
    18,398
    
    
    
    11
    %$
    89,921
    
    
    
    71
    %
    
    $
    119,539
    
    
    
    75
    %
    
    $
    133,197
    
    
    
    80
    %
  June 28, 2009
    
    
    June 29, 2008Receivables
    
    
    %
    
    
    Receivables
    
    
    %General Motors Corporation
    
    $
    7,029
    
    
    
    41
    %
    
    $
    8,367
    
    
    
    35
    %Ford Motor Company
    
    
    2,376
    
    
    
    14
    %
    
    
    2,030
    
    
    
    9
    %Chrysler LLC
    
    
    2,627
    
    
    
    15
    %
    
    
    6,582
    
    
    
    28
    %Delphi Corporation
    
    
    139
    
    
    
    1
    %
    
    
    830
    
    
    
    3
    %$
    12,171
    
    
    
    71
    %
    
    $
    17,809
    
    
    
    75
    %
   2009 STRATTEC Annual Report
    
    43




---



##### 



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
   2009 STRATTEC Annual Report
    
    44




---



##### 



REPORTS
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
   2009 STRATTEC Annual Report
    
    45




---



##### 



REPORTS
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
   2009 STRATTEC Annual Report
    
    46




---



##### 



FINANCIAL SUMMARY
 FIVE-YEAR FINANCIAL SUMMARY
  Fiscal Years2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005INCOME STATEMENT DATANet sales
    
    $
    126,097
    
    
    $
    159,642
    
    
    $
    167,707
    
    
    $
    181,197
    
    
    $
    190,314Gross profit
    
    
    13,240
    
    
    
    24,767
    
    
    
    26,520
    
    
    
    38,354
    
    
    
    42,912Engineering, selling, and
administrative expenses
    
    
    25,480
    
    
    
    23,962
    
    
    
    20,189
    
    
    
    22,067
    
    
    
    20,688Provision for doubtful
accounts, net
    
    
    500
    
    
    
    
    
    
    
    
    
    
    
    1,622
    
    
    
    80(Loss) Income from operations
    
    
    (12,740
    )
    
    
    805
    
    
    
    6,331
    
    
    
    14,665
    
    
    
    22,144Interest income
    
    
    731
    
    
    
    2,749
    
    
    
    3,611
    
    
    
    2,563
    
    
    
    1,169Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other income, net
    
    
    885
    
    
    
    230
    
    
    
    715
    
    
    
    960
    
    
    
    320Minority interest
    
    
    801
    
    
    
    (76
    )
    
    
    75
    
    
    
    
    
    
    
    (Loss) Income before taxes
    
    
    (10,323
    )
    
    
    3,708
    
    
    
    10,732
    
    
    
    18,188
    
    
    
    23,633(Benefit) Provision for
income taxes
    
    
    (4,201
    )
    
    
    927
    
    
    
    2,533
    
    
    
    4,900
    
    
    
    8,511Net (loss) income
    
    $
    (6,122
    )
    
    $
    2,781
    
    
    $
    8,199
    
    
    $
    13,288
    
    
    $
    15,122(Loss) Earnings per share:Basic
    
    $
    (1.87
    )
    
    $
    0.80
    
    
    $
    2.31
    
    
    $
    3.58
    
    
    $
    3.99Diluted
    
    
    (1.86
    )
    
    
    0.80
    
    
    
    2.31
    
    
    
    3.57
    
    
    
    3.96Cash dividends declared
per share:
    
    $
    0.30
    
    
    $
    1.60
    
    
    $
    
    
    
    $
    
    
    
    $
    BALANCE SHEET DATANet working capital
    
    $
    41,710
    
    
    $
    72,835
    
    
    $
    84,077
    
    
    $
    83,242
    
    
    $
    76,786Total assets
    
    
    128,189
    
    
    
    144,221
    
    
    
    151,440
    
    
    
    157,270
    
    
    
    140,257Long-term liabilities
    
    
    24,784
    
    
    
    12,389
    
    
    
    13,431
    
    
    
    10,510
    
    
    
    16,271Shareholders Equity
    
    
    71,418
    
    
    
    97,940
    
    
    
    105,954
    
    
    
    113,253
    
    
    
    93,918
 QUARTERLY FINANCIAL DATA (UNAUDITED)
  Cash(Loss)
    
    
    DividendsEarnings Per Share
    
    
    Declared
    
    
    Market Price Per ShareQuarter
    
    Net Sales
    
    
    Gross Profit
    
    
    Net Income (Loss)
    
    
    Basic
    
    
    Diluted
    
    
    Per Share
    
    
    High
    
    
    Low2009
    
    First
    
    $
    34,731
    
    
    $
    5,424
    
    
    $
    20
    
    
    $
    0.01
    
    
    $
    0.01
    
    
    $
    0.15
    
    
    $
    38.45
    
    
    $
    25.63Second
    
    
    33,799
    
    
    
    2,911
    
    
    
    (1,202
    )
    
    
    (0.37
    )
    
    
    (0.37
    )
    
    
    0.15
    
    
    
    28.90
    
    
    
    12.06Third
    
    
    29,348
    
    
    
    2,063
    
    
    
    (2,822
    )
    
    
    (0.87
    )
    
    
    (0.87
    )
    
    
    0.00
    
    
    
    18.89
    
    
    
    6.26Fourth
    
    
    28,219
    
    
    
    2,842
    
    
    
    (2,118
    )
    
    
    (0.65
    )
    
    
    (0.65
    )
    
    
    0.00
    
    
    
    16.03
    
    
    
    7.40TOTAL
    
    $
    126,097
    
    
    $
    13,240
    
    
    $
    (6,122
    )
    
    $
    (1.87
    )
    
    $
    (1.86
    )
    
    $
    0.302008
    
    First
    
    $
    42,739
    
    
    $
    7,965
    
    
    $
    1,990
    
    
    $
    0.57
    
    
    $
    0.56
    
    
    $
    1.15
    
    
    $
    51.04
    
    
    $
    45.03Second
    
    
    39,908
    
    
    
    6,873
    
    
    
    1,290
    
    
    
    0.37
    
    
    
    0.37
    
    
    $
    0.15
    
    
    
    49.18
    
    
    
    42.00Third
    
    
    38,428
    
    
    
    6,229
    
    
    
    408
    
    
    
    0.12
    
    
    
    0.12
    
    
    $
    0.15
    
    
    
    44.87
    
    
    
    35.06Fourth
    
    
    38,567
    
    
    
    3,700
    
    
    
    (907
    )
    
    
    (0.26
    )
    
    
    (0.26
    )
    
    $
    0.15
    
    
    
    43.95
    
    
    
    34.57TOTAL
    
    $
    159,642
    
    
    $
    24,767
    
    
    $
    2,781
    
    
    $
    0.80
    
    
    $
    0.80
    
    
    $
    1.60
   2009 STRATTEC Annual Report
    
    47




---



##### 



PERFORMANCE GRAPH
  COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN*
 
 COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN*
Among STRATTEC SECURITY CORPORATION, The NASDAQ
Composite Index And The Dow Jones U.S. Auto Parts Index 6/25/04
    
    
    7/1/05
    
    
    6/30/06
    
    
    7/1/07
    
    
    6/29/08
    
    
    6/28/09STRATTEC**
    
    
    
    100
    
    
    
    
    80
    
    
    
    
    74
    
    
    
    
    70
    
    
    
    
    54
    
    
    
    
    22NASDAQ Composite Index
    
    
    
    100
    
    
    
    
    101
    
    
    
    
    109
    
    
    
    
    132
    
    
    
    
    117
    
    
    
    
    93Dow Jones U.S. Auto
Parts Index
    
    
    
    100
    
    
    
    
    88
    
    
    
    
    88
    
    
    
    
    120
    
    
    
    
    89
    
    
    
    
    65
 *
    
    $100 invested on June 25, 2004 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 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, the
closing price on June 29, 2007, was $46.97, the closing price on June 27, 2008 was $34.99, and the
closing price on June 26, 2009 was $13.90.
   2009 STRATTEC Annual Report
    
    48




---



##### 



DIRECTORS/OFFICERS/SHAREHOLDERS INFORMATIOSTRATTEC Board of Directors (Left to Right) Frank J. Krejci, Michael J. Koss
Robert Feitler, Harold M. Stratton II, David R. Zimmer 3 STRATTEC BOARD OF
DIRECTORS Harold M. Stratton II, 61 Chairman, President and Chief Executive Officer Robert Feitler, 78
Former President and Chief Operating Officer of Weyco Group, Inc. Chairman of the Executive Committee and
Director of Weyco Group, Inc. Michael J. Koss, 55 President and Chief Executive Officer of Koss
Corporation Director of Koss Corporation Frank J. Krejci, 59
President and Chief Executive Officer of The Custom Shoppe David R. Zimmer, 63 Managing Partner of .
Stonebridge Business Partners CORPORATE OFFICER Harold M. Stratton II, 61 Patrick J. Hansen, 50 Senior
Vice President-Chief Financial Officer, Treasurer and Secretary Dennis A. Kazmierski, 57 Vice President-Marketing and Sales
Kathryn E. Scherbarth, 53 Vice President-Milwaukee Operations Rolando J. Guillot, 41 Vice
President-Mexican Operations Milan R. Bundalo, 58 Vice President-Materials Brian J. Reetz,
51 Vice President-Security Products Richard P. Messina, 44Vice President-Access Products
SHAREHOLDERS INFORMATIONAnnual Meeting The Annual Meeting of Shareholders willconvene at 8:00 a.m.
(CST) on October 6, 2009, at thRadisson Hotel,7065 North Port Washington Road,Milwaukee, WI 5321Common Stock
STRATTEC SECURITY CORPORATION common stock is traded on the NASDAQ Global Market under the symbol:
STRTForm 10-K You may receive a copy of the STRATTEC SECURITY CORPORATION Form 10-K, filed with the Securities
and Exchange Commission, by writing to the Secretary at STRATTEC SECURITY CORPORATION, 3333 W. Good
Hope Road, Milwaukee, WI 53209Corporate GovernanceTo review the Companys corporate governance, board committee
charters and code of business ethics,please visit the Corporate Governance section of our Web site at www.strattec.com .
Shareholder InquiriesCommunications 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.AShareholder ServiceP.O. Box 64854 St.
Paul, MN 55164-08541.800.468.9716 49




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##### 



3 STRATTEC The Trusted Leader in Automotive Access Control Products
STRATTEC SECURITY CORPORATION 3333 WEST GOOD HOPE ROAD MILWAUKEE,
WI 53209 PHONE 414.247.3333 FAX 414.247.3329 www. st ra ttec.com