STRATTEC SECURITY CORPORATION designs, develops, manufactures and markets automotive access control products including mechanical locks and keys, electronically enhanced locks and keys, passive entry passive start systems (PEPS), steering column and instrument panel ignition lock housings, latches, power sliding door systems, power tailgate systems, power lift gate systems, power deck lid systems, door handles and related products for primarily North American automotive customers. We also supply global automotive manufacturers through a unique strategic relationship with WITTE Automotive (“WITTE”) of Velbert, Germany, and ADAC Automotive (“ADAC”) of Grand Rapids, Michigan. Under this relationship, STRATTEC, WITTE and ADAC market the products of each company to global customers under the “VAST Automotive Group” brand name (as more fully described herein). STRATTEC products are shipped to customer locations in the United States, Canada, Mexico, Europe, South America, Korea, China and India, and we, along with our VAST LLC partners, provide full service and aftermarket support for each VAST Automotive Group partner’s products.

The accompanying condensed consolidated financial statements reflect the consolidated results of STRATTEC SECURITY CORPORATION, its wholly owned Mexican subsidiary, STRATTEC de Mexico, and its majority owned subsidiaries, ADAC-STRATTEC, LLC and STRATTEC POWER ACCESS LLC. STRATTEC SECURITY CORPORATION is located in Milwaukee, Wisconsin. STRATTEC de Mexico is located in Juarez, Mexico. ADAC-STRATTEC, LLC and STRATTEC POWER ACCESS LLC have operations in El Paso, Texas and Juarez and Leon, Mexico. Equity investments in Vehicle Access Systems Technology LLC (“VAST LLC”), for which we exercise significant influence but do not control and are not variable interest entities of STRATTEC, are accounted for using the equity method. VAST LLC consists primarily of four wholly owned subsidiaries in China, one wholly owned subsidiary in Brazil and one joint venture entity in India. The results of the VAST LLC foreign subsidiaries and joint venture are reported on a one-month lag basis. We have only one reporting segment.

In the opinion of management, the accompanying condensed consolidated balance sheets as of January 1, 2023 and July 3, 2022, which have been derived from our audited financial statements, and the related unaudited interim condensed consolidated financial statements included herein contain all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and in accordance with Rule 10-01 of Regulation S-X. All significant intercompany transactions have been eliminated.

Interim financial results are not necessarily indicative of operating results for an entire year. The information included in this Form 10-Q should be read in conjunction with the financial statements and notes thereto included in the STRATTEC SECURITY CORPORATION 2022 Form 10-K, which was filed with the Securities and Exchange Commission on September 8, 2022.

During December 2022, management determined that a previously unrecorded liability for postretirement death benefits is required to be recognized in accordance with ASC 715. Eligible participants for this death benefit include all salaried retirees who retired prior to October 1, 2001 and all hourly retirees who were hired prior to June 27, 2005 and retired prior to January 1, 2010. As such, the actuarially calculated liability and the unrecognized actuarial losses impacting Accumulated Other Comprehensive Loss will be reported in the Condensed Consolidated Balance Sheets. Additionally, interest cost and amortization of actuarial losses will be reported in the in the Condensed Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income.

Additionally, management identified a correction to previously reported Equity Earnings of Joint Ventures in the Condensed Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income, which correction also impacts the previously reported Investment in Joint Ventures amount reported in the Condensed Consolidated Balance Sheets. While prior period amounts have been corrected for comparability, the corrections, both individually and in total, were not material to the previously reported condensed consolidated financial statements.

The impact of the prior period corrections on the Condensed Consolidated Balance Sheet, the related components of Stockholders’ Equity, and the related components of Accumulate Other Comprehensive Loss is as follows (thousands of dollars):


	July 3, 2022
	Previously Reported			Adjustment			As Reported
ASSETS
Investment in joint ventures	$	26,344		$	310		$	26,654
Deferred income taxes		6,937			144			7,081
Total assets	$	318,680		$	454		$	319,134

LIABILITIES AND SHAREHOLDERS' EQUITY
Accrued Liabilities: Payroll and benefits	$	17,905		$	54		$	17,959
Total current liabilities		81,475			54			81,529
Accrued postretirement obligations		463			866			1,329

Retained earnings		241,504			(535	)		240,969
Accumulated other comprehensive loss		(18,657	)		69			(18,588	)
Total STRATTEC SECURITY CORPORATION shareholders' equity		188,866			(466	)		188,400
Total shareholders' equity		220,413			(466	)		219,947
Total liabilities and shareholders' equity	$	318,680		$	454		$	319,134

Accumulated Other Comprehensive Loss:
Foreign currency translation adjustments	$	(16,723	)	$	(10	)	$	(16,733	)
Retirement and Postretirement Benefit Plans		(1,934	)		79			(1,855	)
Accumulated other comprehensive loss	$	(18,657	)	$	69		$	(18,588	)


	October 2, 2022									December 26, 2021
	Previously Reported			Adjustment			As Reported			Previously Reported			Adjustment			As Reported
Retained earnings	$	241,632		$	(538	)	$	241,094		$	237,967		$	(525	)	$	237,442
Accumulated other comprehensive loss		(19,320	)		64			(19,256	)		(17,391	)		(122	)		(17,513	)
Total STRATTEC SECURITY CORPORATION shareholders' equity		189,068			(474	)		188,594			185,820			(647	)		185,173
Total shareholders' equity	$	219,883		$	(474	)	$	219,409		$	217,071		$	(647	)	$	216,424

Accumulated Other Comprehensive Loss:
Foreign currency translation adjustments	$	(17,461	)	$	(10	)	$	(17,471	)	$	(15,438	)	$	2		$	(15,436	)
Retirement and Postretirement Benefit Plans		(1,859	)		74			(1,785	)		(1,953	)		(124	)		(2,077	)
Accumulated other comprehensive loss	$	(19,320	)	$	64		$	(19,256	)	$	(17,391	)	$	(122	)	$	(17,513	)

	September 26, 2021									June 27, 2021
	Previously Reported			Adjustment			As Reported			Previously Reported			Adjustment			As Reported
Retained earnings	$	234,573		$	(522	)	$	234,051		$	234,472		$	(519	)	$	233,953
Accumulated other comprehensive loss		(17,278	)		(120	)		(17,398	)		(16,797	)		(117	)		(16,914	)
Total STRATTEC SECURITY CORPORATION shareholders' equity		182,281			(642	)		181,639			181,646			(636	)		181,010
Total shareholders' equity	$	213,439		$	(642	)	$	212,797		$	213,433		$	(636	)	$	212,797

Accumulated Other Comprehensive Loss:
Foreign currency translation adjustments	$	(15,247	)	$	2		$	(15,245	)	$	(14,685	)	$	2		$	(14,683	)
Retirement and Postretirement Benefit Plans		(2,031	)		(122	)		(2,153	)		(2,112	)		(119	)		(2,231	)
Accumulated other comprehensive loss	$	(17,278	)	$	(120	)	$	(17,398	)	$	(16,797	)	$	(117	)	$	(16,914	)

The impact of the prior period corrections on the Condensed Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income is as follows (thousands of dollars):


	Three Months Ended December 26, 2021									Six Months Ended December 26, 2021
	Previously Reported			Adjustment			As Reported			Previously Reported			Adjustment			As Reported
Other (expense) income, net	$	(95	)	$	(5	)	$	(100	)	$	35		$	(9	)	$	26
Income before provision for income taxes and non-controlling interest		4,095			(5	)		4,090			4,354			(9	)		4,345
Provision for income taxes		255			(2	)		253			292			(3	)		289
Net income		3,840			(3	)		3,837			4,062			(6	)		4,056
Net income attributed to STRATTEC SECURITY CORPORATION	$	3,394		$	(3	)	$	3,391		$	3,495		$	(6	)	$	3,489

Comprehensive Loss:
Net income	$	3,840		$	(3	)	$	3,837		$	4,062		$	(6	)	$	4,056
Pension and postretirement plans, net of tax		78			(2	)		76			159			(5	)		154
Other comprehensive (loss) income, net of tax		(466	)		(2	)		(468	)		(1,097	)		(5	)		(1,102	)
Comprehensive income		3,374			(5	)		3,369			2,965			(11	)		2,954
Comprehensive income attributed to STRATTEC SECURITY CORPORATION	$	3,281		$	(5	)	$	3,276		$	2,901		$	(11	)	$	2,890

Earnings per share attributed to STRATTEC SECURITY CORPORATION: diluted	$	0.87		$	-		$	0.87		$	0.90		$	(0.01	)	$	0.89

The correction of prior period amounts had no impact on total operating, investing, and financing activities on the Condensed Consolidated Statements of Cash Flows during the six month period ended December 26, 2021. In conjunction with the correction of the prior period amounts, the following footnotes, which were impacted by the above adjustments, were also corrected: Shareholders’ Equity, Other Income (Expense), net, Earnings Per Share, Pension and Postretirement Benefits, and Accumulated Other Comprehensive Loss.