Company today is their President and CEO, Jennifer Slater, and CFO, Matthew Pauli. Jennifer?
Thank you. Good morning, everybody. We'll start with the Safe Harbor statement. I'm sure you're all familiar with it. It just covers any forward-looking statements that either Matt or I may make during the presentation. I joined Strattec last July. I'm coming up on my one-year anniversary at Strattec, and I'm excited to talk to you a bit more today about the company and the progress that we're making across the company. As you can see, we're primarily an automotive supplier. Our products cover both internal combustion engine vehicles and electric vehicles, so our product portfolio is powertrain agnostic. If we look at our products, they really fall into three different segments. Historically, the company started in the lock and key business, and that's our security and authorization segment. In 2008, we acquired a division of Delphi, which created power access products.
You can think of power liftgates, power tailgates, sliding power doors, latching mechanisms. More recently, the company took our product technology capability in our lock and key business and our power access business and created a user interface control segment, which is primarily steering wheel switches and switch components. I'm really excited about the growth opportunities we have in our access products, both in security authorization, lock and key, as well as power access. In lock and key, we've been working on some new technology with digital keys. You can think of your key fob working with your phone. It really provides a more efficient solution for our customers and a seamless execution for consumers. In power access products, there's a lot of growth opportunity in this product as more and more features in the vehicle are powered and from an accessibility standpoint.
For our user interface control segment, you know, I'm really proud of what the team did there because they went into a completely brand-new product segment. If you think about switches in vehicles, it's a very crowded market, and over time, there are less and less switches in the vehicle. We're gonna support our customers through launch in that segment, but we're really gonna prioritize our resources and our growth in both our digital key, lock and key business, and power access business, where we think we have the best opportunity for longer-term growth. From a customer standpoint, primarily our addressable customers have been Ford, GM, and Stellantis, the big three in North America.
As I talked about with our user interface controls, we have demonstrated that we know how to build new customers, and I think that's where we continue to have opportunities is expanding our customer base. Because our customers in automotive, it's a long-cycle business, so you can expect that it's a three-five year time period from the time we start working on new products with our customers to the time we would see revenue in our business. Our product segment is relatively balanced. You can see that at the bottom graph. We have a balanced North America footprint. We have manufacturing facilities in both U.S. and Mexico, and our capabilities and expertise is in die cast, injection molding, stamping, assembly. We also have some PCBA assembly capabilities, and that's really on top of our engineering testing and validation capabilities for our customers.
Talking about the transformation, our focus has really been starting with the team, making sure that we've got the right team in place and the right business processes and accountability to drive the transformation in the business. The second area of focus has been on our margin improvement, both top line with pricing and bottom line, looking at our cost to make sure we've got the right cost structure. I talked about our long-cycle business. We've just been through a period of a lot of launches. Our addressable customers don't have any near-term launches, which gives us an opportunity to really focus on driving operational improvement of the business. From a growth standpoint, it's really about leveraging our capabilities that we've demonstrated with our customers for expanding with our addressable customers and continuing to grow.
First in North America, there are opportunities with the North America automotive customers, then thinking about transportation in general, off-road heavy vehicle, and then looking across where there may be other opportunities in other regions. Tariffs have been happening. I'm sure everybody knows that. What I would tell you is, you know, we have lost a little bit of momentum on our transformation, but we've learned a lot about our supply chain and our logistics managing through the tariff situation. We established daily tariff meetings cross-functionally to understand what impacts we would have and how do we mitigate it. I'm really proud of the work the team has done and the focus. The good thing is we've got a strong balance sheet that helps us mitigate any near-term challenges. The majority of our products are USMCA qualified, which means we do not have a tariff impact for those products.
We have various levers from changing logistics, looking at our supply chain as well as pricing to fully mitigate the tariff exposure as we know it today. I say that as, you know, it's been an evolving situation. Some of the indirect impacts from tariffs are North America automotive production. Our business is tied to production levels, so if there is longer-term production level softening, we will see that. We're continuing to look at our cost structure to make sure we can react to any changes in the overall production levels. I wanted to give a little bit more detail on some of the work that we've done over the past year. I talked about building the team. We were fortunate that we added a supply chain leader right around the time of tariffs that helped us with understanding at a more granular level the tariff impact.
I'm also very fortunate to be here with Matt. He's been a great partner in this transformation, and he's gonna be mad at me to say it's his birthday today, so I'm sure he's increasingly excited to present on his birthday. We're also looking at our operational excellence. We've listed our Milwaukee facility for sale. We're not in a hurry to sell it. We're in a really good position, but we know that for long-term, it's too big for us, and we wanna continue to drive culture change and modernization. We have optimized our structure. We've taken out a shift in Milwaukee. We've done restructuring in Mexico. We focused on pricing. We achieved $8 million in annual pricing at the beginning of our Q3, which was in January.
We are really looking at, I talked about the actions that we took on our product portfolio, and then it is all about modernizing the business. There is a lot to be done here, so the critical focus for us is making sure we have the right prioritization. You know, as we are making progress, we are finding more and more opportunities to the business, and it is keeping the team focused on what are the critical few that really drive the transformation of the business. While I am super proud of the work that has been done over the past year, there is quite a bit more for us to do. With that, I am gonna hand it over to Matt to talk a little bit more about our financials.
Thanks, Jen. Before I get into a review of our financial statements for our third quarter, I thought I'd just share kind of my finance priorities. As Jen mentioned, I joined a little over six months ago. When I came in, I knew it was a transformation for the business, but also a transformation for the finance and IT functions. We've been busy with the team working on improving some of the foundational processes around reporting, how do we do our quoting, standard costing, and also upgrading some of our IT infrastructure. Next, we'll turn the page and look at some of the IT applications that support the business and how do we improve some of those. We've also spent a considerable amount of time with our team focusing on two key financial metrics, that being EBITDA and cash from operation.
Those are also the two key metrics that play into our annual bonus payouts. We have got an opportunity on both of those to improve. I would say historically, the business did not have a strong focus on working capital management, which I think you will see in our financial results. You will see some of that progress through the first nine months of the year. The opportunity exists both from the base business as well as from our joint venture, which is a 51% owned joint venture. As Jen touched on, you know, tariffs have obviously been a priority over the last four months for the entire team, including the finance team. With that, I will go through kind of our financial results for our third quarter. As a reminder, we are at June 30th fiscal year end, so these results are as of the end of March.
From a highlights perspective, we generated $20 million of cash flow in the third quarter. First quarter, we generated about $10 million, $10 million in the second quarter, and an additional $20 million in the fourth quarter. It's a combination of cash earnings and a reduction in working capital. In our third quarter, we had a reduction in inventory, and we also made a concerted effort to extend our payable terms. We moved our payable terms with our vendors to more closely match our customer payment terms. From a revenue growth standpoint, our revenue in the third quarter was up about $3.3 million, largely driven by price increases that Jen mentioned and favorable product mix. That's on a backdrop of OEM North American production volumes during that period that were down kind of in the 5-7% range.
From a profitability standpoint, we delivered $12.9 million of EBITDA in the third quarter, or 8.9%. It's kind of double what we delivered in the third quarter of last year. As Jen mentioned, we did implement pricing. Kind of three key strategic initiatives were implemented in the third quarter. We executed on some strategic pricing. We also completed the restructuring in our Milwaukee operations. That's the elimination of a shift from three shifts down to two. We also announced a restructuring in our Mexico operations. That benefit that we did not see in our third quarter, that'll phase in here in the fourth quarter and into our first quarter of fiscal 2026. If you look at our sales on the pie chart on the left, it summarizes our sales by customers. Ford, GM, and Stellantis make up 75% of our sales.
We'll look to diversify that customer base on a longer-term basis. About 65% of our products are shipped to a U.S. OEM production site. The remainder are shipped internationally, primarily Mexico, Canada, and Korea, and some countries in Europe. On the right-hand side, you can see the mix of our products. Those five key product categories we serve both the OEM and the aftermarket. The aftermarket portion is a little less than 10% of our revenue. Our sales growth in the third quarter was 2.4%, which moderated a bit from the first half of the year. The first half of the year, our sales were up 5%-6%. I'd expect it to continue to moderate through the back half of the year.
On a longer-term basis, our sales will closely follow OEM production levels as we do not see a lot of significant program launches in the near term. If we look at our gross profit, our third quarter gross profit was 16%. On a year-to-date basis, it is 14.3%. We do have operations both in Milwaukee and in Mexico. Being in Mexico, there is obviously a currency impact of the peso and the strengthening of the U.S. dollar, which is a benefit not only in the quarter but on a year-to-date basis. On the flip side of that, we also see higher wages in Mexico just given the government-mandated wage increases. When I look at our results, we did have $800,000 of tariff expense in the quarter. That is just for the month of March, which we will then look to recover in our fourth quarter. From a margin perspective, 14.3%.
If I exclude the impact of the benefit from currency and some one-time pricing in the prior year, our gross profit margin has expanded about 200 basis points on a year-over-year basis, largely driven by pricing, additional volume, and some of the cost actions that we've taken. Next, just looking at our ES&A, or engineering, selling, and administrative expense, it's about 11% of our sales. Going forward, I expect it to be in kind of in that 11-12% range, just as we invest in headcount within the business. That's the biggest portion of our ES&A expense. Keep in mind, on a year-to-date basis, we have about $3.5 million of one-time costs associated with the restructuring actions and the changes in the executive leadership team. We also have incremental bonus expense in the current year, just given our financial performance.
Lastly, just to summarize kind of from a bottom-line perspective, we show net income, adjusted net income, and adjusted EBITDA. Whether you look at the metrics on a quarter-to-date basis or year-to-date basis, it's a significant improvement on a year-over-year basis. For our third quarter, we delivered $1.50 of earnings per share, and on a year-to-date basis, $3.32 a share. Next, if we move off of the income statement and talk about our balance sheet and our cash and liquidity, at the end of March, we had $13 million of debt outstanding. That's a revolver associated with our joint venture. We've got about $47 million of availability under revolving credit facilities. If you look at the chart on the top right, it shows the progression of our cash balance throughout the fiscal year.
At the end of March, we have $62.1 million of cash on the balance sheet. As far as capital priorities, our capital priorities are primarily internally focused, making sure we have the cash to support the business transformation. Also, we're comfortable operating with the cash balance we have on the balance sheet, just given some of the uncertainty around North American automotive production in light of the tariff situation. Longer term, I think we'll consider how we use that cash to maximize shareholder value, but in the short term, it's really focused on having the cash to support the business transformation. From a CapEx standpoint, think about CapEx as about 2% of sales, so about $10 million on an annual basis. It's a little bit light of that this year, but I think it'd be a little bit heavier next year, and it's just timing.
Most of our CapEx relates to customer program launches. Just to summarize the last slide, just the Strattec investment rationale, I think we've covered these points today. We're going through a business transformation. If I were to use a baseball analogy, I'd say we're probably in the third inning of a nine-inning game. We're early on in that transformation. There's still an opportunity, both from a commercial standpoint, how do we reimagine our product portfolio? How do we expand our served geographies? How do we expand our served customers and markets? There's also a significant opportunity around operations and supply chain. We've added resources there to unlock some of that value. We've got a new leadership team. We're working on kind of level two within the organization. We've added some resources to fill in some of the gaps.
Lastly, as I just touched on, we've got a strong balance sheet to support our business transformation. We're excited about the future of Strattec. That concludes our prepared remarks, but we'd open it up for Q&A.
The question was, you're taller than I am. The question was, we're selling the Milwaukee facility. What exactly are we selling and what is for sale? That facility is about 400,000 sq ft. It is in need of modernization. We don't need that much space, so we're looking to sell the existing facility that we own and move our operations and our corporate headquarters to another location.
It's listed for $17 million.
Repeat the question, yeah.
Good enough.
The question was, what is it listed for? It's listed for $17 million. We went to market in January this year. It has been listed for less than six months. We are not in a position where we need to sell it, so we will wait for the right offer for the building. Thank you.
I'll go ahead and take it.
Yeah, so the question is, we're kind of in a third inning of the transformation. Kind of where do you see the business longer term from a margin profile perspective? I think what we're focused on is, you know, today, from a gross margin perspective, it's about 16%. Our longer-term goal is to get to 20%. The business has been there in the past, but it's a combination of looking at our pricing, where do we deserve the pricing, its volume growth, and then it's also operational and supply chain improvements. I would say we're earlier in the process around the operations and the supply chain. Yes, we've done some restructuring around headcount, but we haven't looked at kind of footprint automation within on the shop floor, those types of areas, and then also looking at the direct material side of the business.
I think that's where a lot of the margin improvement will come on a go-forward basis. Yeah, from an ES&A perspective, today, it's like 10%-10.5% of sales. Again, I think longer term, it's probably in the 11%-12% zip code as we add some additional resources to help drive that growth that we talked about. From a bottom-line, EBITDA perspective, yes, it would be a couple percentage points increase in our EBITDA. Today, we're at about 8%, but longer term, obviously, the goal is not single-digit EBITDA.
Ethan's question was, are all of our different customers aware of the different products we make and sell? No. I recently had the opportunity to go to Hyundai Kia in Korea with Shay, who is our Chief Commercial Officer. We supply Hyundai Kia with some power access products for Korea production. We showed their Vice President of Purchasing our product portfolio, and he said, "Why aren't we doing business with you in North America for some of these components?" We have a real opportunity here to make sure that our customers that we serve today, that's an example of a customer we serve today, and customers that we think are very addressable, understand what our capabilities are and what we can deliver for them. Yep. Yeah. The question was the products that we're doing on the steering wheel and the genesis of those.
I brushed over it a little bit in my intro, but when we looked at our product segment and our product portfolio, there isn't a ton of growth in that segment, and there's a lot of suppliers that are already in that segment. While it showed the capability that we have, we're really deprioritizing that from a growth standpoint so we can utilize our resources more in our digital key and our growth and our power access products. We're going to keep those products through launch. We're just not going to go chase more business in that area. Yeah, the question was, are any of our products applicable in autonomous vehicles? I think the nice thing about our products is it really isn't tied to a specific powertrain or level of driver accessibility.
As long as there's access on a vehicle, our products apply to that vehicle segment. It's a nice place to be because it's less volatility on the changing priorities in the landscape between the cars that are there today and where the future is going. Yeah. The question was, we didn't say anything about acquisitions, and that's okay, but how do we think about it as we think about our future? What I would say in my experience, if you bolt on an acquisition, if you don't have a stable foundation, that creates chaos for both what you're buying and the core business.
Matt said we're in the third inning, so we're really focused on stabilizing what we have today, and we see opportunity, but it's something that we'll continue to look at to drive growth, thinking about what we can do organic, and if there's something that makes sense for us to acquire in the future, we'll continue to look at that, but we got to make sure we have a stable foundation. Yep. All right, I want to thank everyone for their time today. Hopefully, you see this as exciting as Matt and I do, and hope you have a good rest of the day.