STRT

ITEM 1A. Risk Factors 21 ITEM 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities 21 ITEM 3. Defaults Upon Senior Securities 22 ITEM 4. Mine Safety Disclosures 22 ITEM 5. Other Information 22 ITEM 6. Exhibits 22 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS In this Quarterly Report on Form 10-Q for Strattec Security Corporation ("Strattec," "the Company," "we," "us," or "our"), statements that are not reported financial results or other historic information are "forward-looking statements." These forward-looking statements relate to, among other things, the Company's future financial position, business strategy, targets, projected sales, costs, income, capital expenditures, debt levels and cash flows, and plans and objectives of management for future operations. The use of words such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "should," "project" or "plan" or similar terminology are generally intended to identify forward-looking statements. These forward-looking statements by their nature address matters that are, to different degrees, uncertain and are subject to risks, assumptions, and other factors, some of which are beyond the Company's control, that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. The Company’s operations and financial performance are subject to certain risks and uncertainties, including: •an uncertain economic environment and inflationary conditions coupled with the cyclical nature of the automotive industry may adversely affect global vehicle production and demand for our products; •we operate in a highly competitive market and technological developments within our sphere of offerings are rapidly evolving; •changes in customer purchasing actions, warranty provisions and product recall policies could adversely affect our business, results of operations and financial condition; •work stoppages within our operations or at the location of our key customers as a result of labor disputes could adversely impact our business, results of operations and financial condition; •labor cost inflation or unionization efforts in Mexico, coupled with a shortage of skilled laborers in the United States, could increase our manufacturing expenses and impact production efficiency; •changes in tariffs or international trade policies could adversely affect our results, particularly with respect to goods imported into the United States or produced under U.S. trade agreements such as the USMCA; •delays and restrictions impacting the import of goods and components stemming from heightened security procedures or changes in policies implemented by the U.S. or Mexican governments related to U.S.-Mexico border crossings could have a negative effect on our business; •an increase in the volume and scope of product returns or customer cost reimbursement actions could adversely impact our business, results of operations and financial condition; •our ability to manage changes in the costs of operations, warranty claims, adverse business and operational issues could be affected by a material global supply chain and logistics disruption; •future shortages in the supply of semiconductor chips and other matters adversely impacting the timing, availability and costs of material component parts and raw materials for the production of our products could adversely affect our business, results of operations and financial condition; •macroeconomic and geopolitical conditions, including regional conflicts, could adversely affect our business, results of operations and financial condition; •interruptions to our information security management systems and cybersecurity incidents could adversely affect our business, results of operations and financial condition; and •other matters including, but not limited to, the factors listed in the “Risk Factors” in Part I, Item 1A included in the Company’s Annual Report on Form 10-K for the year ended June 29, 2025 filed with the SEC on August 25, 2025 (the "Annual Report"). Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are only made as of the date of this Form 10-Q and the Company undertakes no obligation to update such forward-looking statements. 3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS STRATTEC SECURITY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (in thousands, except per share amounts) Three Months Ended Nine Months Ended March 29, 2026 March 30, 2025 March 29, 2026 March 30, 2025 Net sales $ 137,632 $ 144,082 $ 427,565 $ 413,053 Cost of goods sold 114,971 120,977 355,848 353,876 Gross profit 22,661 23,105 71,717 59,177 Selling, administrative and engineering expenses 17,615 16,020 51,362 44,895 Income from operations 5,046 7,085 20,355 14,282 Interest income 879 529 2,641 1,286 Interest expense (70 ) (243 ) (322 ) (795 ) Other income (expense), net (748 ) (16 ) 668 (369 ) Income before income taxes and non-controlling interest 5,107 7,355 23,342 14,404 Income tax expense 1,282 1,644 5,337 3,547 Net income 3,825 5,711 18,005 10,857 Net income attributable to non-controlling interest 585 315 1,289 439 Net income attributable to Strattec $ 3,240 $ 5,396 $ 16,716 $ 10,418 Earnings per share attributable to Strattec Basic $ 0.79 $ 1.34 $ 4.10 $ 2.59 Diluted $ 0.78 $ 1.32 $ 4.04 $ 2.56 Weighted average shares outstanding: Basic 4,085 4,039 4,073 4,026 Diluted 4,141 4,085 4,133 4,067 The accompanying notes are an integral part of the Condensed Consolidated Financial Statements 4 STRATTEC SECURITY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (in thousands) Three Months Ended Nine Months Ended March 29, 2026 March 30, 2025 March 29, 2026 March 30, 2025 Net income $ 3,825 $ 5,711 $ 18,005 $ 10,857 Other comprehensive income (loss), net of tax: Currency translation adjustments (465 ) (77 ) 1,322 (4,082 ) Pension and postretirement plans 32 36 96 328 Total other comprehensive income (loss), net of tax (433 ) (41 ) 1,418 (3,754 ) Comprehensive income 3,392 5,670 19,423 7,103 Comprehensive income (loss) attributable to non-controlling interest 426 283 1,803 (1,168 ) Comprehensive income attributable to Strattec $ 2,966 $ 5,387 $ 17,620 $ 8,271 The accompanying notes are an integral part of the Condensed Consolidated Financial Statements 5 STRATTEC SECURITY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except share amounts and per share amounts) March 29, 2026 June 29, 2025 ASSETS Current Assets: Cash and cash equivalents $ 106,957 $ 84,579 Receivables, net 102,164 102,061 Inventories: Finished products 13,968 12,398 Work in process 12,933 11,303 Purchased materials 46,500 41,000 Inventories, net 73,401 64,701 Pre-production costs 5,304 8,657 Value-added tax recoverable 9,935 19,389 Other current assets 6,396 10,676 Total current assets 304,157 290,063 Noncurrent Assets: Property, plant and equipment: Land and improvements 6,758 6,582 Buildings and improvements 41,807 39,821 Machinery and equipment 224,669 236,545 Total property, plant and equipment 273,234 282,948 Less: accumulated depreciation 201,834 205,538 Property, plant and equipment, net 71,400 77,410 Deferred income taxes 19,694 19,531 Other noncurrent assets 4,296 4,450 Total Assets $ 399,547 $ 391,454 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable $ 64,742 $ 65,824 Accrued payroll and benefits 18,074 22,956 Value-added tax payable 7,905 11,933 Warranty reserve 8,603 8,900 Current portion of borrowings under credit facilities 1,000 - Other current liabilities 15,522 9,737 Total current liabilities 115,846 119,350 Noncurrent Liabilities: Noncurrent portion of borrowings under credit facilities - 8,000 Post-employment benefits 12,774 13,325 Other noncurrent liabilities 3,774 4,348 Total Liabilities 132,394 145,023 Shareholders' Equity: Common stock, authorized 18,000,000 shares, $.01 par value, 7,701,768 issued shares at March 29, 2026 and 7,635,883 issued shares at June 29, 2025 77 76 Capital in excess of par value 106,425 103,784 Retained earnings 286,013 269,297 Accumulated other comprehensive loss (15,209 ) (16,113 ) Less: treasury stock, at cost (3,616,086 shares at March 29, 2026 and 3,596,549 shares at June 29, 2025) (136,795 ) (135,452 ) Total Strattec shareholders’ equity 240,511 221,592 Non-controlling interest 26,642 24,839 Total Shareholders' Equity 267,153 246,431 Total Liabilities and Shareholders' Equity $ 399,547 $ 391,454 The accompanying notes are an integral part of the Condensed Consolidated Financial Statements 6 STRATTEC SECURITY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) Nine Months Ended March 29, 2026 March 30, 2025 OPERATING ACTIVITIES: Net income $ 18,005 $ 10,857 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 11,450 10,952 Foreign currency transaction loss (gain) 531 (1,052 ) Unrealized (gain) loss on peso contracts 2,810 231 Stock-based compensation expense 2,605 1,839 Other, net 105 1,077 Change in operating assets and liabilities: Receivables 1,628 (10,237 ) Inventories (8,700 ) 6,058 Prepaids and other assets 11,982 5,994 Accounts payable (934 ) 16,730 Accrued liabilities (2,832 ) (948 ) Net cash provided by operating activities 36,650 41,501 INVESTING ACTIVITIES: Purchase of property, plant and equipment (5,913 ) (4,160 ) Proceeds from sale of property, plant and equipment 259 — Net cash used in investing activities (5,654 ) (4,160 ) FINANCING ACTIVITIES: Borrowings under credit facilities — 3,000 Repayments under credit facilities (7,000 ) (3,000 ) Payment for debt issuance costs (98 ) — Payment for taxes withheld from stock-based awards (1,353 ) — Share issuances 47 44 Net cash (used in) provided by financing activities (8,404 ) 44 Foreign currency impact on cash (214 ) (689 ) NET INCREASE IN CASH AND CASH EQUIVALENTS 22,378 36,696 CASH AND CASH EQUIVALENTS: Beginning of period 84,579 25,410 End of period $ 106,957 $ 62,106 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Income taxes $ 1,921 $ 9,135 Interest $ 218 $ 731 Non-cash investing activities: Change in capital expenditures in accounts payable $ (7 ) $ 726 The accompanying notes are an integral part of the Condensed Consolidated Financial Statements 7 STRATTEC SECURITY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (in thousands) Common Stock Capital in Excess of Par Value Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Non-Controlling Interest Total Shareholders’ Equity Balance -- June 29, 2025 $ 76 $ 103,784 $ 269,297 $ (16,113 ) $ (135,452 ) $ 24,839 $ 246,431 Net income — — 8,529 — — 8 8,537 Currency translation adjustments — — — 628 — 385 1,013 Pension and postretirement adjustment, net of tax — — — 32 — — 32 Shares withheld for taxes on stock-based awards — — — — (919 ) — (919 ) Stock-based compensation — 669 — — — — 669 Share issuances — 11 — — 5 — 16 Balance -- September 28, 2025 $ 76 $ 104,464 $ 277,826 $ (15,453 ) $ (136,366 ) $ 25,232 $ 255,779 Net income — — 4,947 — — 696 5,643 Currency translation adjustments — — — 486 — 288 774 Pension and postretirement adjustment, net of tax — — — 32 — — 32 Shares withheld for taxes on stock-based awards — — — — (355 ) — (355 ) Stock-based compensation — 1,125 — — — — 1,125 Share issuances 1 12 — — 3 — 16 Balance -- December 28, 2025 $ 77 $ 105,601 $ 282,773 $ (14,935 ) $ (136,718 ) $ 26,216 $ 263,014 Net income — — 3,240 — — 585 3,825 Currency translation adjustments — — — (306 ) — (159 ) (465 ) Pension and postretirement adjustment, net of tax — — — 32 — — 32 Shares withheld for taxes on stock-based awards — — — — (79 ) — (79 ) Stock-based compensation — 811 — — — — 811 Share issuances — 13 — — 2 — 15 Balance -- March 29, 2026 $ 77 $ 106,425 $ 286,013 $ (15,209 ) $ (136,795 ) $ 26,642 $ 267,153 8 STRATTEC SECURITY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (in thousands) Common Stock Capital in Excess of Par Value Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Non-Controlling Interest Total Shareholders’ Equity Balance -- June 30, 2024 $ 76 $ 101,024 $ 250,612 $ (15,689 ) $ (135,478 ) $ 25,070 $ 225,615 Net income — — 3,703 — — 45 3,748 Currency translation adjustments — — — (1,671 ) — (1,089 ) (2,760 ) Pension and postretirement adjustment, net of tax — — — 256 — — 256 Stock-based compensation — 188 — — — — 188 Share issuances — 6 — — 7 — 13 Balance -- September 29, 2024 $ 76 $ 101,218 $ 254,315 $ (17,104 ) $ (135,471 ) $ 24,026 $ 227,060 Net income — — 1,319 — — 79 1,398 Currency translation adjustments — — — (759 ) — (486 ) (1,245 ) Pension and postretirement adjustment, net of tax — — — 36 — — 36 Stock-based compensation — 891 — — — — 891 Share issuances — 9 6 15 Balance -- December 29, 2024 $ 76 $ 102,118 $ 255,634 $ (17,827 ) $ (135,465 ) $ 23,619 $ 228,155 Net income — — 5,396 — — 315 5,711 Currency translation adjustments — — — (45 ) — (32 ) (77 ) Pension and postretirement adjustment, net of tax — — — 36 — — 36 Stock-based compensation — 760 — — — — 760 Share issuances — 10 — — 6 — 16 Balance -- March 30, 2025 $ 76 $ 102,888 $ 261,030 $ (17,836 ) $ (135,459 ) $ 23,902 $ 234,601 The accompanying notes are an integral part of the Condensed Consolidated Financial Statements 9 STRATTEC SECURITY CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Strattec Security Corporation (the "Company" or “Strattec”), headquartered in Milwaukee, Wisconsin, is a leading global manufacturer and provider of highly engineered advanced automotive access and security products and solutions. Products include power access solutions, locks & locksets, keys & fobs, engineered latches, vehicle start systems, door handles, and other vehicle access products. Power access solutions provide the motion control for power liftgates, sliding power doors and power tailgates. While the Company serves major automotive original equipment manufacturers (“OEMs”) globally, the majority of sales are to the three largest OEMs in North America. The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial reporting and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The condensed consolidated balance sheet data as of June 29, 2025 was derived from the Company’s audited financial statements but does not include all disclosures required by GAAP. For additional information, including the Company’s significant accounting policies, refer to the consolidated financial statements and related footnotes in the Annual Report. In the opinion of management, all adjustments considered necessary for a fair statement of financial results have been made. Such adjustments consist of only those of a normal recurring nature. Operating results for the three and nine months ended March 29, 2026 are not necessarily indicative of the results that may be expected for the entire fiscal year ending June 28, 2026. The condensed consolidated financial statements include the results of all wholly owned subsidiaries, as well as the results of a majority owned joint venture. NOTE 2. RECENTLY ISSUED ACCOUNTING STANDARDS In December 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU is intended to enhance the transparency and decision usefulness of income tax disclosures to provide information to better assess how an entity's operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. For the Company, this ASU is effective for annual periods beginning after December 15, 2024 (fiscal 2026). The adoption of ASU 2023-09 will not affect the Company’s financial position or its results of operations but will result in additional disclosures for the fiscal 2026 annual period and for interim periods thereafter. In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation, intangible asset amortization and depletion) included in certain expense captions presented on the face of the income statement. The ASU is effective for fiscal years beginning after December 15, 2026 (fiscal 2028) and for interim periods beginning after December 15, 2027 (fiscal 2029). The adoption of ASU 2024-03 will not affect the Company’s financial position or its results of operations but will result in additional disclosures for the fiscal 2028 annual period and for interim periods thereafter. NOTE 3. WARRANTY The Company generally offers its customers an assurance warranty on products sold, although warranty periods may vary by product type and application. The Company has a warranty reserve related to known and potential exposure to warranty claims in the event products fail to perform as expected and in the event the Company may be required to participate in the repair costs incurred by customers for such products. The estimation of the warranty reserve involves judgment and assumptions and is based on an analysis of historical warranty data as well as current trends and information. Changes in the warranty reserve were as follows (in thousands): Three Months Ended Nine Months Ended March 29, 2026 March 30, 2025 March 29, 2026 March 30, 2025 Balance, beginning of period $ 8,567 $ 10,946 $ 8,900 $ 10,695 Provision charged to expense 577 284 2,470 1,253 Payments, net of recoveries (541 ) (485 ) (2,767 ) (1,203 ) Balance, end of period $ 8,603 $ 10,745 $ 8,603 $ 10,745 10 NOTE 4. CREDIT FACILITIES The Company has a revolving credit agreement with BMO Harris N.A. ("Amended & Restated Credit Agreement"), which provides for a $40 million revolving line of credit maturing October 2028. The facility bears interest at varying rates based on the bank's prime rate or SOFR plus 1.50%. There were no outstanding borrowings on the facility during the nine months ended March 29, 2026 and March 30, 2025. The credit facility is secured by U.S. cash balances, accounts receivable, inventory, and fixed assets located in the U.S. and contains a restrictive financial covenant that requires a minimum net worth level. The Company's joint venture, ADAC-Strattec LLC, previously had an $18 million secured revolving credit facility (the “ADAC-Strattec Credit Facility”) with BMO Harris Bank N.A., under which the Company was a guarantor. Interest on borrowings under the ADAC-Strattec Credit Facility were at varying rates based on the bank's prime rate plus 2% or SOFR plus 3.10%. On April 30, 2026, the joint venture entered into an amended and restated revolving credit agreement with BMO Harris N.A. (the "Amended & Restated JV Credit Facility"), which provides for a $10 million asset-based revolving line of credit, subject to a borrowing base, maturing October 2028. The Amended & Restated JV Credit Facility bears interest at varying rates based on the bank's prime rate plus 1.00% or SOFR plus 1.75%. The Amended & Restated JV Credit Facility replaces the previous joint venture facility, which was terminated upon the closing of the agreement. The credit facility is secured by substantially all of the joint venture's assets and contains restrictive financial covenants that require a minimum net worth level and a minimum fixed charge coverage ratio. As of March 29, 2026, the Company and the joint venture were in compliance with all financial covenants. Outstanding borrowings under the ADAC-Strattec Credit Facility were as follows (in thousands): March 29, 2026 June 29, 2025 Outstanding borrowings $ 1,000 $ 8,000 Average outstanding borrowings and the weighted average interest rate under the ADAC-Strattec Credit Facility were as follows (in thousands, except percentages): Nine Months Ended March 29, 2026 March 30, 2025 Average outstanding borrowings $ 3,964 $ 13,245 Weighted average interest rate 7.2 % 7.9 % NOTE 5. DERIVATIVE INSTRUMENTS A portion of the Company's manufacturing costs are incurred in Mexican pesos, which causes earnings and cash flows to fluctuate with changes in the U.S. dollar/Mexican peso exchange rate. During the three and nine month periods ended March 29, 2026 and March 30, 2025, the Company entered into contracts with a creditworthy counterparty that provide for monthly Mexican peso currency forward contracts for a portion of peso denominated operating costs. The following table quantifies the outstanding forward contracts as of March 29, 2026 (in thousands, except with respect to the average forward exchange rate): Effective Dates Notional Amount Average Forward Exchange Rate Fair Market Value Buy MXP/Sell USD January 2026 - March 2027 $ 60,866 18.27 $ (496 ) NOTE 6. INCOME TAXES The Company's income tax expense and effective tax rate for the three and nine month periods ended March 29, 2026 and March 30, 2025 were as follows (in thousands and percentage of Income before income taxes and non-controlling interest): Three Months Ended Nine Months Ended March 29, 2026 March 30, 2025 March 29, 2026 March 30, 2025 Income before income taxes and non-controlling interest $ 5,107 $ 7,355 $ 23,342 $ 14,404 Income tax expense $ 1,282 $ 1,644 $ 5,337 $ 3,547 Effective tax rate 25.1 % 22.4 % 22.9 % 24.6 % 11 The Company is subject to income taxes in the United States and foreign jurisdictions, primarily Mexico. The Company's income tax positions are based on interpretations of income tax laws and rulings in each of the jurisdictions in which the Company operates. Interim income tax expense is determined based on an estimate of the overall annual effective income tax rate which can vary due to the relationship of foreign and domestic earnings, state taxes and available deductions, credits and discrete items. The effective tax rate for each period presented differs from the U.S. federal statutory rate of 21% primarily due to the accrual of foreign income taxes, which are generally higher than the U.S. federal statutory rate, partially offset by the recognition of U.S. research and development tax credits and discrete income tax benefits associated with share-based payments. On July 4, 2025, the One Big Beautiful Bill Act was enacted. There are multiple business tax provisions for which further guidance from the U.S. Treasury and the Internal Revenue Service is needed. The Company is currently reviewing and evaluating the impact of the guidance provided to date that could affect our income tax payable and deferred tax liability, including changes related to bonus depreciation and the expensing of research and development expenditures, among other topics. NOTE 7. EARNINGS PER SHARE A reconciliation of the components of the basic and diluted per-share computations follows (in thousands, except per share amounts): Three Months Ended Nine Months Ended March 29, 2026 March 30, 2025 March 29, 2026 March 30, 2025 Net income attributable to Strattec $ 3,240 $ 5,396 $ 16,716 $ 10,418 Basic weighted-average shares outstanding 4,085 4,039 4,073 4,026 Effect of dilutive securities - employee stock compensation plan 56 46 60 41 Diluted weighted-average shares outstanding 4,141 4,085 4,133 4,067 Earnings per share attributable to Strattec Basic $ 0.79 $ 1.34 $ 4.10 $ 2.59 Diluted $ 0.78 $ 1.32 $ 4.04 $ 2.56 NOTE 8. STOCK-BASED COMPENSATION The Company has granted service-based restricted stock awards ("RSAs") and performance stock units ("PSUs") to employees and non-employee directors under existing stock incentive plans. The number of shares of the Company's common stock authorized under the current 2024 Equity Incentive Plan is 550,000. As of March 29, 2026, there were 362,816 shares available for future awards. As of March 29, 2026, there was $1.6 million of unrecognized compensation cost related to non-vested PSUs and $3.5 million of unrecognized compensation cost related to non-vested RSAs, which will be expensed over the remaining vesting period of approximately 2 years. As of March 30, 2025, there was $3.3 million of unrecognized compensation cost related to non-vested RSAs and PSUs. A summary of restricted stock award and performance stock unit activity was as follows: RSAs PSUs Weighted Average Weighted Average Grant Date Grant Date Shares Fair Value Shares Fair Value Nonvested balance, June 29, 2025 129,139 $ 36.37 16,878 $ 39.16 Granted 36,912 67.45 19,506 68.06 Vested (65,885 ) 35.13 — — Forfeited (6,248 ) 44.57 — — Nonvested balance, March 29, 2026 93,918 $ 48.40 36,384 $ 54.65 12 NOTE 9. OTHER INCOME (EXPENSE), NET The following table summarizes the components of Other income (expense), net included in the accompanying consolidated statements of income (in thousands): Three Months Ended Nine Months Ended March 29, 2026 March 30, 2025 March 29, 2026 March 30, 2025 Foreign currency transaction gain (loss) $ 603 $ (141 ) $ (531 ) $ 1,052 Rabbi trust assets gain (loss) (46 ) (1 ) 87 76 Realized gain (loss) on peso forward contracts, net 1,681 (332 ) 3,924 (706 ) Unrealized gain (loss) on peso forward contracts, net (3,183 ) 704 (2,810 ) (231 ) Non-service pension and postemployment cost (312 ) (283 ) (645 ) (726 ) Other 509 37 643 166 $ (748 ) $ (16 ) $ 668 $ (369 ) NOTE 10. ACCUMULATED OTHER COMPREHENSIVE LOSS BY COMPONENT The following tables summarize the changes in accumulated other comprehensive loss (“AOCL”) by component (in thousands): Three Months Ended Nine Months Ended March 29, 2026 March 30, 2025 March 29, 2026 March 30, 2025 Foreign currency translation adjustments: Balance, beginning of period $ 14,307 $ 17,146 $ 15,421 $ 14,716 Other comprehensive (income) loss before reclassifications 465 77 (1,322 ) 4,082 Other comprehensive (income) loss attributable to non-controlling interest 159 32 (514 ) 1,607 Balance, end of period 14,613 17,191 14,613 17,191 Retirement and postretirement benefit plans: Balance, beginning of period $ 628 $ 681 $ 692 $ 973 Other comprehensive (income) loss before reclassifications — — — — Unrecognized net income (32 ) (36 ) (96 ) (328 ) Balance, end of period 596 645 596 645 Accumulated other comprehensive loss, end of period $ 15,209 $ 17,836 $ 15,209 $ 17,836 NOTE 11. RELATED PARTY The Company owns 51% of a joint venture, which was formed in fiscal 2007 to jointly conduct the business of manufacturing, warehousing and selling painted door handles and exterior trim products in Canada, the United States and Mexico. The following tables summarize the related party transactions that arise as a result of the joint venture operating agreement (in thousands): Three Months Ended Nine Months Ended March 29, 2026 March 30, 2025 March 29, 2026 March 30, 2025 Management fee expense $ 2,035 $ 2,488 $ 7,260 $ 7,284 Net sales to joint venture partner $ 1,480 $ 1,604 $ 4,484 $ 5,227 March 29, 2026 June 29, 2025 Accounts receivable from joint venture partner $ 933 $ 754 Accounts payable to joint venture partner $ 6,550 $ 6,538 13 NOTE 12. SEGMENT INFORMATION The Company's Chief Operating Decision Maker ("CODM") is the Chief Executive Officer. The CODM assesses the performance and makes capital and resource allocation decisions based on Net income attributable to Strattec. The CODM considers the impact of significant segment expenses on this measure to assess profitability and guide strategic decision making including entering into significant contracts, expanding into new markets or launching new products, making significant capital expenditures, hiring and terminating key personnel and approving operating budgets. Net sales and significant segment expenses are as follows (in thousands): Three Months Ended Nine Months Ended March 29, 2026 March 30, 2025 March 29, 2026 March 30, 2025 Net sales $ 137,632 $ 144,082 $ 427,565 $ 413,053 Significant expenses: Direct material costs 73,858 78,696 234,169 229,270 Labor and overhead costs 41,113 42,281 121,679 124,606 Selling costs 2,803 2,563 8,157 7,648 Administrative costs 8,507 6,293 23,082 16,991 Engineering costs 6,305 7,164 20,123 20,256 Interest income (879 ) (529 ) (2,641 ) (1,286 ) Interest expense 70 243 322 795 Other (income) expense, net 748 16 (668 ) 369 Income tax expense 1,282 1,644 5,337 3,547 Net income 3,825 5,711 18,005 10,857 Net income attributable to non-controlling interest 585 315 1,289 439 Net income attributable to Strattec $ 3,240 $ 5,396 $ 16,716 $ 10,418 Sales by product group were as follows (in thousands): Three Months Ended Nine Months Ended March 29, 2026 March 30, 2025 March 29, 2026 March 30, 2025 Power access solutions $ 33,481 $ 36,508 $ 106,063 $ 101,570 Door handles & exterior trim 35,319 35,315 108,980 103,559 Keys & locksets 27,861 27,817 83,948 70,905 Latches 17,415 18,944 53,466 55,763 User interface controls 11,137 12,817 36,474 40,647 Aftermarket and service 9,962 9,980 30,139 32,619 Other 2,457 2,701 8,495 7,990 $ 137,632 $ 144,082 $ 427,565 $ 413,053 Sales to and receivables from customers that individually accounted for 10% or more of the Company's total net sales were as follows (in thousands and percent of total): Three Months Ended Nine Months Ended March 29, 2026 March 30, 2025 March 29, 2026 March 30, 2025 Net Sales % Net Sales % Net Sales % Net Sales % General Motors Company $ 37,471 27 % $ 40,920 28 % $ 118,635 28 % $ 122,630 30 % Ford Motor Company 28,828 21 32,538 23 88,123 21 93,631 23 Stellantis 21,769 16 20,956 15 69,890 16 45,448 11 $ 88,068 64 % $ 94,414 66 % $ 276,648 65 % $ 261,709 64 % 14 March 29, 2026 June 29, 2025 Receivables % Receivables % General Motors Company $ 29,353 29 % $ 26,581 26 % Ford Motor Company 17,710 17 19,916 20 Stellantis 18,241 18 14,812 15 $ 65,304 64 % $ 61,309 61 % NOTE 13. COMMITMENTS AND CONTINGENCIES From time to time, the Company is party to various legal actions, administrative proceedings, and claims arising in the ordinary course of business, including matters related to alleged product defects and warranties, contract disputes, intellectual property, and employment issues. The Company recognizes accruals for such matters in accordance with U.S. GAAP when a loss is probable and reasonably estimable. While the outcome of these matters cannot be predicted with certainty, based on currently available information, management does not believe the ultimate resolution of these proceedings, individually or in the aggregate, will have a material adverse effect on the Company's financial position, results of operations, or cash flows. 15