Methode Electronics, Inc. (NYSE: MEI), a leading
global supplier of custom-engineered solutions for user interface,
LED lighting and power distribution applications, today announced
financial results for the second quarter of fiscal 2024 ended
October 28, 2023.
Fiscal Second Quarter 2024 Highlights
- Net sales were $288.0 million
- Electric and hybrid vehicle applications were 19 percent of net
sales
- Goodwill impairment of $56.5 million in North American and
European Automotive Reporting Units
- Net loss was $55.3 million, or $1.55 per diluted share
- Adjusted net income was $2.4 million, or $0.06 per diluted
share
- The impact of the UAW strike on earnings was $0.03 per diluted
share
- Company purchased 322,779 shares of its common stock for $7.8
million
Management CommentsPresident and Chief
Executive Officer Donald W. Duda said, “Methode had solid sales in
the quarter. However, headwinds related to auto program roll offs,
a difficult year-over-year comparison in Asia, continued softness
in the e-bike market, and the impact from the UAW strike all
contributed to our decreased sales. In addition to the lower sales,
operational inefficiencies in our North American Auto operations,
that were identified last quarter, continued to drive higher
premium freight, labor, and material costs. Together, these
challenges, along with increased expenses related to program
launches, led to an adjusted earnings shortfall relative to our
guidance.”
Mr. Duda added, “The operational challenges that we have
experienced are being actively managed via corrective action plans.
However, the residual effects will continue to impact our second
half and, along with price/cost challenges and the looming softness
in EV market, are the primary drivers for the lowering of earnings
guidance. Our outlook for EVs remains positive long term, but in
the near term it is tempered by program delays and take rate
projections. Fiscal 2024 for Methode is all about investment,
corrective actions, and transition. While we have lowered our
expectations for fiscal 2025 due primarily to EV market trends, we
still expect sales and earnings growth in fiscal 2025.”
Consolidated Fiscal Second Quarter 2024 Financial
ResultsMethode's net sales were $288.0 million, compared
to $315.9 million in the same quarter of fiscal 2023. The decrease
was mainly driven by lower Automotive segment sales in all
geographic regions, which was partially offset by sales from the
Nordic Lights acquisition and favorable foreign currency
translation. Excluding Nordic Lights and foreign currency
translation, net sales were down 16.6% compared to the same quarter
of fiscal 2023.
Loss from operations was $51.3 million, compared to income of
$32.8 million in the same quarter of fiscal 2023. The decrease was
primarily due to a goodwill impairment in the Automotive segment
and to lower sales volume and higher freight costs, both mainly in
the Automotive segment. The decrease was partially offset by the
Nordic Lights acquisition. Adjusted income from operations, a
non-GAAP financial measure, was $6.0 million, down from $33.3
million in the same quarter of fiscal 2023. The fiscal 2024 second
quarter adjusted income from operations excluded expenses of $56.5
million for the goodwill impairment, $0.2 million for purchase
accounting adjustments related to inventory, and $0.6 million of
restructuring costs.
Net loss was $55.3 million or $1.55 per diluted share, compared
to net income of $27.6 million or $0.75 per diluted share in the
same quarter of fiscal 2023. The lower net income was primarily
driven by lower income from operations and higher interest expense,
which were partially offset by lower tax expense. Adjusted net
income, a non-GAAP financial measure, was $2.4 million, or $0.06
per diluted share, compared to $28.0 million or $0.76 per diluted
share, in the same quarter of fiscal 2023. The fiscal 2024 second
quarter adjusted net income excluded an expense of $56.5 million,
or $1.58 per diluted share, for the goodwill impairment, $0.2
million, or $0.01 per diluted share, for purchase accounting
adjustments related to inventory, and $1.0 million, or $0.02 per
diluted share, for restructuring costs and loss on sale of assets
from the exit of Dabir Surfaces.
EBITDA (Earnings Before Interest, Taxes, Depreciation and
Amortization of Intangibles), a non-GAAP financial measure, was a
negative $36.7 million, compared to a positive $46.1 million in the
same quarter of fiscal 2023. Adjusted EBITDA, a non-GAAP financial
measure, was $21.2 million, compared to $46.6 million in the same
quarter of fiscal 2023. Adjusted EBITDA excluded expenses of $56.5
million for the goodwill impairment, $0.2 million for purchase
accounting adjustments related to inventory, and $1.2 million
related to restructuring costs and loss on sale of assets from the
exit of Dabir Surfaces.
Debt was $332.0 million at the end of the quarter, compared to
$306.8 million at the end of fiscal 2023. Net debt, a non-GAAP
financial measure defined as debt less cash and cash equivalents,
was $209.5 million, compared to $149.8 million at the end of fiscal
2023. The increase in debt and net debt was mainly due to working
capital investment and increased purchases of property, plant, and
equipment.
Net cash used in operating activities was $0.6 million for the
quarter, compared to net cash provided by operating activities of
$15.4 million in the same quarter of fiscal 2023. Free cash flow, a
non-GAAP financial measure defined as net cash provided by
operating activities less purchases of property, plant, and
equipment, was a negative $11.3 million, compared to a positive
$7.0 million in the same quarter of fiscal 2023. The decrease was
mainly due to lower net income and increased purchases of property,
plant, and equipment.
The company purchased and retired 322,779 shares of stock for
$7.8 million in the quarter. As of October 28, 2023, a total of
3,113,154 shares have been purchased at a total cost of $127.1
million since the commencement of the $200.0 million share buyback
authorization.
Segment Fiscal Second Quarter 2024 Financial
ResultsComparing the Automotive segment’s quarter to the
same quarter of fiscal 2023,
- Net sales were $154.3 million, down from $196.9 million. Net
sales decreased by $42.6 million or 21.6% mainly due to lower
volume in North America related to program roll-offs and the UAW
strike, in Asia related to higher prior year sales driven by
catch-up demand from COVID-19 lockdowns, and in Europe related to
lower sensor sales resulting from an overstocked e-bike market.
Partially offsetting the decline was a favorable foreign currency
translation of $2.2 million.
- Loss from operations was $61.5 million, down from income from
operations of $23.4 million. Loss from operations was a negative
39.9% of net sales, down from a positive 11.9% primarily due to the
goodwill impairment of $56.5 million in the North American
Automotive and European Automotive reporting units, lower sales
volume, higher freight expense, and higher labor costs. The higher
freight and labor costs resulted from the operational
inefficiencies in North America that arose in the fiscal first
quarter and carried over to the second fiscal quarter as previously
communicated by the company.
Comparing the Industrial segment’s quarter to the same quarter
of fiscal 2023,
- Net sales were $120.4 million, up from $103.8 million. The
acquisition of the Nordic Lights business contributed $20.9 million
and favorable foreign currency translation contributed $1.3 million
to the sales increase. Net of the acquisition and foreign currency
translation, net sales decreased by $5.6 million or 5.4% driven
primarily due to lower demand for power distribution products in
the data center market.
- Income from operations was $25.7 million, up from $25.0
million. The acquisition of the Nordic Lights business contributed
$1.8 million, and foreign currency translation was a favorable $0.4
million. Income from operations was 21.3% of net sales, down from
24.1% mainly due to product mix.
Comparing the Interface segment’s quarter to the same quarter of
fiscal 2023,
- Net sales were $11.7 million, down from $14.1 million. The
decrease was mainly due to lower demand for data solutions
products, which was partially offset by strength in the appliance
market.
- Income from operations was $1.0 million, down from $1.6
million. Income from operations was 8.5% of net sales, down from
11.3%. Both decreases were mainly due to the lower sales
volume.
Comparing the Medical segment's quarter to the same quarter of
fiscal 2023,
- Net sales were $1.6 million, up from $1.1 million. The increase
was mainly due to last time purchases of Dabir products.
- Loss from operations was $0.7 million, compared to a loss of
$1.4 million.
- In the first quarter of fiscal 2024, the discontinuation of the
Dabir Surfaces, Inc. business (which accounts for all of the
Medical segment’s financial results) was announced. The company has
now substantially completed the wind down process of the business,
including an asset sale which resulted in a loss on sale of assets
of $0.6 million.
GuidanceFor fiscal 2024 third quarter, the
company expects net sales to be similar to the second quarter and
adjusted diluted earnings per share to be modestly higher than the
second quarter.
For fiscal 2024 full year, the company continues to expect net
sales to be in a range of $1,140 to $1,180 million. The company has
revised diluted earnings per share to be in a range of -$1.40 to
-$1.14, down from the previous range of $0.80 to $1.00. The lower
range is mainly due to the goodwill impairment, operational
inefficiencies, product mix, the lower second quarter results, and
other higher costs. The adjusted diluted earnings per share are now
expected to be in a range of $0.24 to $0.50, which excludes $1.58
for the goodwill impairment, $0.04 for costs related to the
discontinuation of Dabir Surfaces, and $0.02 for costs related to
the acquisition of Nordic Lights.
For fiscal 2025 full year, the company now expects net sales to
be in a range of $1,150 to $1,250 million, as compared to the
previous range of $1,250 to $1,350 million. The lower range is
mainly due to expected customer delays with EV programs and program
roll offs. The company has also revised income from operations as a
percentage of net sales to be in a range of 6% to 8%, as compared
to the previous range of 11% to 12%. The lower rate is mainly due
to the lower expected net sales.
The guidance is subject to change due to a variety of factors
including the successful launch of multiple new programs, the
ultimate take rates on new EV programs, successful cost recovery
actions, inflation, global economic instability, supply chain
disruptions, potential restructuring efforts, and potential
impairments.
Conference CallThe company will conduct a
conference call and webcast to review financial and operational
highlights led by its President and Chief Executive Officer, Donald
W. Duda, and Chief Financial Officer, Ronald L. G. Tsoumas, today
at 10:00 a.m. CST.
To participate in the conference call, please dial 888-506-0062
(domestic) or 973-528-0011 (international) at least five minutes
prior to the start of the event. A simultaneous webcast can be
accessed through the company’s website, www.methode.com, on the
Investors page.
A replay of the teleconference will be available shortly after
the call through December 21, 2023, by dialing 877-481-4010 and
providing passcode 49414. A webcast replay will also be available
through the company’s website, www.methode.com, on the Investors
page.
About Methode Electronics, Inc.Methode
Electronics, Inc. (NYSE: MEI) is a leading global supplier of
custom-engineered solutions with sales, engineering and
manufacturing locations in North America, Europe, Middle East and
Asia. We design, engineer, and produce mechatronic products for
OEMs utilizing our broad range of technologies for user interface,
LED lighting system, power distribution and sensor
applications.
Our solutions are found in the end markets of transportation
(including automotive, commercial vehicle, e-bike, aerospace, bus,
and rail), cloud computing infrastructure, construction equipment,
and consumer appliance. Our business is managed on a segment basis,
with those segments being Automotive, Industrial, Interface and
Medical.
Non-GAAP Financial MeasuresTo supplement the
company's financial statements presented in accordance with
generally accepted accounting principles in the United States
(“GAAP”), Methode uses Adjusted Net Income, Adjusted Earnings Per
Share, Adjusted Pre-Tax Income, Adjusted Income from Operations,
EBITDA, Adjusted EBITDA, Net Debt and Free Cash Flow as non-GAAP
measures. Reconciliation to the nearest GAAP measures of all
non-GAAP measures included in this press release can be found at
the end of this release. Methode's definitions of these non-GAAP
measures may differ from similarly titled measures used by others.
These non-GAAP measures should be considered supplemental to, and
not a substitute for, financial information prepared in accordance
with GAAP. The company believes that these non-GAAP measures are
useful because they (i) provide both management and investors
meaningful supplemental information regarding financial performance
by excluding certain expenses and benefits that may not be
indicative of recurring core business operating results, (ii)
permit investors to view Methode's performance using the same tools
that management uses to evaluate its past performance, reportable
business segments and prospects for future performance (iii) are
commonly used by other companies in our industry and provide a
comparison for investors to the company’s performance versus its
competitors and (iv) otherwise provide supplemental information
that may be useful to investors in evaluating Methode.
Forward-Looking StatementsThis press release
contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 that reflect, when
made, our current views with respect to current events and
financial performance. Such forward-looking statements are subject
to many risks, uncertainties and factors relating to our operations
and business environment, which may cause our actual results to be
materially different from any future results, expressed or implied,
by such forward-looking statements. All statements that address
future operating, financial or business performance or our
strategies or expectations are forward-looking statements. In some
cases, you can identify these statements by forward-looking words
such as “may,” “might,” “will,” “should,” “expects,” “plans,”
“intends,” “anticipates,” “believes,” “estimates,” “predicts,”
“projects,” “potential,” “outlook” or “continue,” and other
comparable terminology. Factors that could cause actual results to
differ materially from these forward-looking statements include,
but are not limited to, the following:
- Dependence on our supply chain,
including semiconductor suppliers;
- Impact from pandemics, such as the
COVID-19 pandemic;
- Dependence on the automotive and
commercial vehicle industries;
- Impact from inflation;
- Dependence on a small number of
large customers, including one large automotive customer;
- Risks relating to our use of
requirements contracts;
- Failure to attract and retain
qualified personnel;
- Risks related to conducting global
operations;
- Potential work stoppages;
- Dependence on the availability and
price of materials;
- Timing, quality and cost of new
program launches;
- Ability to compete
effectively;
- Ability to withstand pricing
pressures, including price reductions;
- Our lengthy sales cycle;
- Ability to successfully benefit
from acquisitions and divestitures;
- Impact from production delays or
cancelled orders;
- Investment in programs prior to the
recognition of revenue;
- Electric vehicle ("EV") adoption
rates;
- Ability to withstand business
interruptions;
- Breaches to our information
technology systems or service interruptions;
- Ability to keep pace with rapid
technological changes;
- Ability to protect our intellectual
property;
- Costs associated with
environmental, health and safety regulations;
- International trade disputes
resulting in tariffs and our ability to mitigate tariffs;
- Impact from climate change and
related regulations;
- Ability to avoid design or
manufacturing defects;
- Ability to remediate a material
weakness in our internal control over financial reporting;
- Recognition of goodwill and other
intangible asset impairment charges;
- Ability to manage our debt levels
and any restrictions thereunder;
- Interest rate changes and variable
rate instruments;
- Currency fluctuations;
- Adjustments to compensation expense
for performance-based awards;
- Timing and magnitude of costs
associated with restructuring activities;
- Income tax rate fluctuations;
and
- Judgments related to accounting for
tax positions.
Additional details and factors are discussed under the caption
“Risk Factors” in our Annual Report. New risks and uncertainties
arise from time to time, and it is impossible for us to predict
these events or how they may affect us. Any forward-looking
statements made by us speak only as of the date on which they are
made. We are under no obligation to, and expressly disclaim any
obligation to, update or alter our forward-looking statements,
whether as a result of new information, subsequent events or
otherwise.
For Methode Electronics, Inc.Robert K.
CherryVice President, Investor
Relationsrcherry@methode.com+1-708-457-4030
METHODE ELECTRONICS, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME
(unaudited)(in millions, except per-share
data) |
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
October 28, 2023 |
|
|
October 29, 2022 |
|
|
October 28, 2023 |
|
|
October 29, 2022 |
|
Net sales |
|
$ |
288.0 |
|
|
$ |
315.9 |
|
|
$ |
577.7 |
|
|
$ |
598.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
products sold |
|
|
235.7 |
|
|
|
241.8 |
|
|
|
471.4 |
|
|
|
462.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
|
52.3 |
|
|
|
74.1 |
|
|
|
106.3 |
|
|
|
135.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling
and administrative expenses |
|
|
40.9 |
|
|
|
36.6 |
|
|
|
85.4 |
|
|
|
71.9 |
|
Goodwill
impairment |
|
|
56.5 |
|
|
|
— |
|
|
|
56.5 |
|
|
|
— |
|
Amortization of intangibles |
|
|
6.2 |
|
|
|
4.7 |
|
|
|
11.9 |
|
|
|
9.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
income from operations |
|
|
(51.3 |
) |
|
|
32.8 |
|
|
|
(47.5 |
) |
|
|
54.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense, net |
|
|
4.4 |
|
|
|
0.5 |
|
|
|
7.2 |
|
|
|
0.5 |
|
Other
income, net |
|
|
(0.2 |
) |
|
|
(1.1 |
) |
|
|
(0.2 |
) |
|
|
(5.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
(loss) income |
|
|
(55.5 |
) |
|
|
33.4 |
|
|
|
(54.5 |
) |
|
|
59.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
tax (benefit) expense |
|
|
(0.2 |
) |
|
|
5.8 |
|
|
|
(0.1 |
) |
|
|
10.2 |
|
Net
(loss) income |
|
|
(55.3 |
) |
|
|
27.6 |
|
|
|
(54.4 |
) |
|
|
49.1 |
|
Net
income attributable to redeemable noncontrolling interest |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(loss) income attributable to Methode |
|
$ |
(55.3 |
) |
|
$ |
27.6 |
|
|
$ |
(54.4 |
) |
|
$ |
49.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
income per share attributable to Methode: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(1.55 |
) |
|
$ |
0.76 |
|
|
$ |
(1.52 |
) |
|
$ |
1.35 |
|
Diluted |
|
$ |
(1.55 |
) |
|
$ |
0.75 |
|
|
$ |
(1.52 |
) |
|
$ |
1.33 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
dividends per share |
|
$ |
0.14 |
|
|
$ |
0.14 |
|
|
$ |
0.28 |
|
|
$ |
0.28 |
|
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (unaudited)(in millions, except
share and per-share data) |
|
|
|
October 28, 2023 |
|
|
April 29, 2023 |
|
|
|
(unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
122.5 |
|
|
$ |
157.0 |
|
Accounts receivable, net |
|
|
292.3 |
|
|
|
314.3 |
|
Inventories |
|
|
183.9 |
|
|
|
159.7 |
|
Income tax receivable |
|
|
16.7 |
|
|
|
12.9 |
|
Prepaid expenses and other current assets |
|
|
21.1 |
|
|
|
20.5 |
|
Total current assets |
|
|
636.5 |
|
|
|
664.4 |
|
Long-term assets: |
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
224.6 |
|
|
|
220.3 |
|
Goodwill |
|
|
220.7 |
|
|
|
301.9 |
|
Other intangible assets, net |
|
|
264.7 |
|
|
|
256.7 |
|
Operating lease right-of-use assets, net |
|
|
26.9 |
|
|
|
28.4 |
|
Deferred tax assets |
|
|
33.0 |
|
|
|
33.6 |
|
Pre-production costs |
|
|
44.5 |
|
|
|
36.1 |
|
Other long-term assets |
|
|
34.0 |
|
|
|
37.7 |
|
Total long-term assets |
|
|
848.4 |
|
|
|
914.7 |
|
Total assets |
|
$ |
1,484.9 |
|
|
$ |
1,579.1 |
|
|
|
|
|
|
|
|
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND
SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
133.5 |
|
|
$ |
138.7 |
|
Accrued employee liabilities |
|
|
29.0 |
|
|
|
36.7 |
|
Other accrued liabilities |
|
|
38.7 |
|
|
|
34.5 |
|
Short-term operating lease liabilities |
|
|
6.6 |
|
|
|
6.8 |
|
Short-term debt |
|
|
3.0 |
|
|
|
3.2 |
|
Income tax payable |
|
|
7.5 |
|
|
|
8.1 |
|
Total current liabilities |
|
|
218.3 |
|
|
|
228.0 |
|
Long-term liabilities: |
|
|
|
|
|
|
Long-term debt |
|
|
329.0 |
|
|
|
303.6 |
|
Long-term operating lease liabilities |
|
|
20.9 |
|
|
|
21.8 |
|
Long-term income tax payable |
|
|
9.3 |
|
|
|
16.7 |
|
Other long-term liabilities |
|
|
16.5 |
|
|
|
14.3 |
|
Deferred tax liabilities |
|
|
46.0 |
|
|
|
41.8 |
|
Total long-term liabilities |
|
|
421.7 |
|
|
|
398.2 |
|
Total liabilities |
|
|
640.0 |
|
|
|
626.2 |
|
Redeemable noncontrolling interest |
|
|
— |
|
|
|
11.1 |
|
Shareholders' equity: |
|
|
|
|
|
|
Common stock, $0.50 par value, 100,000,000 shares authorized,
37,034,050 shares and 37,167,375 shares issued as of October 28,
2023, and April 29, 2023, respectively |
|
|
18.5 |
|
|
|
18.6 |
|
Additional paid-in capital |
|
|
183.8 |
|
|
|
181.0 |
|
Accumulated other comprehensive loss |
|
|
(42.9 |
) |
|
|
(19.0 |
) |
Treasury stock, 1,346,624 shares as of October 28, 2023, and April
29, 2023 |
|
|
(11.5 |
) |
|
|
(11.5 |
) |
Retained earnings |
|
|
697.0 |
|
|
|
772.7 |
|
Total shareholders' equity |
|
|
844.9 |
|
|
|
941.8 |
|
Total liabilities, redeemable noncontrolling interest and
shareholders' equity |
|
$ |
1,484.9 |
|
|
$ |
1,579.1 |
|
METHODE ELECTRONICS, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)(in millions) |
|
|
|
Six Months Ended |
|
|
|
October 28, 2023 |
|
|
October 29, 2022 |
|
Operating activities: |
|
|
|
|
|
|
Net (loss) income |
|
$ |
(54.4 |
) |
|
$ |
49.1 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
28.4 |
|
|
|
24.5 |
|
Stock-based compensation expense |
|
|
3.9 |
|
|
|
6.7 |
|
Change in cash surrender value of life insurance |
|
|
(0.2 |
) |
|
|
(0.2 |
) |
Amortization of debt issuance costs |
|
|
0.4 |
|
|
|
0.3 |
|
Loss on sale of assets |
|
|
0.5 |
|
|
|
0.1 |
|
Impairment of long-lived assets |
|
|
0.6 |
|
|
|
0.4 |
|
Goodwill impairment |
|
|
56.5 |
|
|
|
— |
|
Change in deferred income taxes |
|
|
(1.0 |
) |
|
|
1.0 |
|
Other |
|
|
0.8 |
|
|
|
0.2 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
|
12.5 |
|
|
|
(50.6 |
) |
Inventories |
|
|
(29.1 |
) |
|
|
(19.5 |
) |
Prepaid expenses and other assets |
|
|
(10.8 |
) |
|
|
(15.7 |
) |
Accounts payable |
|
|
(1.8 |
) |
|
|
21.5 |
|
Other liabilities |
|
|
(12.5 |
) |
|
|
10.3 |
|
Net cash
(used in) provided by operating activities |
|
|
(6.2 |
) |
|
|
28.1 |
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
Purchases of property, plant and equipment |
|
|
(24.5 |
) |
|
|
(18.0 |
) |
Proceeds from settlement of net investment hedge |
|
|
0.6 |
|
|
|
— |
|
Proceeds from disposition of assets |
|
|
1.6 |
|
|
|
3.5 |
|
Net cash
used in investing activities |
|
|
(22.3 |
) |
|
|
(14.5 |
) |
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
Taxes paid related to net share settlement of equity awards |
|
|
(3.8 |
) |
|
|
(0.5 |
) |
Repayments of finance leases |
|
|
(0.1 |
) |
|
|
(0.2 |
) |
Purchases of common stock |
|
|
(7.8 |
) |
|
|
(31.6 |
) |
Cash dividends |
|
|
(10.1 |
) |
|
|
(9.9 |
) |
Purchase of redeemable noncontrolling interest |
|
|
(10.9 |
) |
|
|
— |
|
Proceeds from borrowings |
|
|
213.9 |
|
|
|
— |
|
Repayments of borrowings |
|
|
(179.3 |
) |
|
|
(6.5 |
) |
Net cash
provided by (used in) financing activities |
|
|
1.9 |
|
|
|
(48.7 |
) |
Effect
of foreign currency exchange rate changes on cash and cash
equivalents |
|
|
(7.9 |
) |
|
|
(7.3 |
) |
Decrease in cash and cash equivalents |
|
|
(34.5 |
) |
|
|
(42.4 |
) |
Cash and
cash equivalents at beginning of the period |
|
|
157.0 |
|
|
|
172.0 |
|
Cash and cash equivalents at end of the
period |
|
$ |
122.5 |
|
|
$ |
129.6 |
|
|
|
|
|
|
|
|
Supplemental cash flow information: |
|
|
|
|
|
|
Cash paid during the period for: |
|
|
|
|
|
|
Interest |
|
$ |
6.7 |
|
|
$ |
1.4 |
|
Income taxes, net of refunds |
|
$ |
14.5 |
|
|
$ |
12.5 |
|
Operating lease obligations |
|
$ |
4.5 |
|
|
$ |
4.0 |
|
METHODE ELECTRONICS, INC. AND
SUBSIDIARIESRECONCILIATION OF NON-GAAP MEASURES
(Unaudited)(in millions) |
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
October 28, 2023 |
|
|
October 29, 2022 |
|
|
October 28, 2023 |
|
|
October 29, 2022 |
|
EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(55.3 |
) |
|
$ |
27.6 |
|
|
$ |
(54.4 |
) |
|
$ |
49.1 |
|
Income tax (benefit) expense, net |
|
|
(0.2 |
) |
|
|
5.8 |
|
|
|
(0.1 |
) |
|
|
10.2 |
|
Interest expense, net |
|
|
4.4 |
|
|
|
0.5 |
|
|
|
7.2 |
|
|
|
0.5 |
|
Amortization of intangibles |
|
|
6.2 |
|
|
|
4.7 |
|
|
|
11.9 |
|
|
|
9.4 |
|
Depreciation |
|
|
8.2 |
|
|
|
7.5 |
|
|
|
16.5 |
|
|
|
15.1 |
|
EBITDA |
|
|
(36.7 |
) |
|
|
46.1 |
|
|
|
(18.9 |
) |
|
|
84.3 |
|
Goodwill impairment |
|
|
56.5 |
|
|
|
— |
|
|
|
56.5 |
|
|
|
— |
|
Acquisition costs |
|
|
— |
|
|
|
— |
|
|
|
0.5 |
|
|
|
— |
|
Acquisition-related costs - purchase accounting adjustments related
to inventory |
|
|
0.2 |
|
|
|
— |
|
|
|
0.5 |
|
|
|
— |
|
Restructuring costs |
|
|
0.6 |
|
|
|
0.5 |
|
|
|
1.3 |
|
|
|
0.6 |
|
Loss on sale of Dabir assets |
|
|
0.6 |
|
|
|
— |
|
|
|
0.6 |
|
|
|
— |
|
Adjusted
EBITDA |
|
$ |
21.2 |
|
|
$ |
46.6 |
|
|
$ |
40.5 |
|
|
$ |
84.9 |
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
October 28, 2023 |
|
|
October 29, 2022 |
|
|
October 28, 2023 |
|
|
October 29, 2022 |
|
Free Cash Flow: |
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by operating activities |
|
$ |
(0.6 |
) |
|
$ |
15.4 |
|
|
$ |
(6.2 |
) |
|
$ |
28.1 |
|
Purchases of property, plant and equipment |
|
|
(10.7 |
) |
|
|
(8.4 |
) |
|
|
(24.5 |
) |
|
|
(18.0 |
) |
Free
cash flow |
|
$ |
(11.3 |
) |
|
$ |
7.0 |
|
|
$ |
(30.7 |
) |
|
$ |
10.1 |
|
|
|
October 28, 2023 |
|
|
April 29, 2023 |
|
Net Debt: |
|
|
|
|
|
|
Short-term debt |
|
$ |
3.0 |
|
|
$ |
3.2 |
|
Long-term debt |
|
|
329.0 |
|
|
|
303.6 |
|
Total
debt |
|
|
332.0 |
|
|
|
306.8 |
|
Less:
cash and cash equivalents |
|
|
(122.5 |
) |
|
|
(157.0 |
) |
Net
debt |
|
$ |
209.5 |
|
|
$ |
149.8 |
|
METHODE ELECTRONICS, INC. AND
SUBSIDIARIESRECONCILIATION OF NON-GAAP MEASURES
(Unaudited)(in millions, except per share
data) |
|
Reconciliation of Non-GAAP Financial Measures for the Three
Months Ended October 28, 2023 |
|
|
|
U.S. GAAP (as reported) |
|
|
Goodwill impairment |
|
|
Acquisition costs |
|
|
Purchase accounting adjustments related to
inventory |
|
|
Restructuring costs |
|
|
Loss on sale of Dabir assets |
|
|
Non-U.S.GAAP |
|
(Loss) income from operations |
|
$ |
(51.3 |
) |
|
$ |
56.5 |
|
|
$ |
— |
|
|
$ |
0.2 |
|
|
$ |
0.6 |
|
|
$ |
— |
|
|
$ |
6.0 |
|
Pre-tax
(loss) income |
|
$ |
(55.5 |
) |
|
$ |
56.5 |
|
|
$ |
— |
|
|
$ |
0.2 |
|
|
$ |
0.6 |
|
|
$ |
0.6 |
|
|
$ |
2.4 |
|
Net
(loss) income |
|
$ |
(55.3 |
) |
|
$ |
56.5 |
|
|
$ |
— |
|
|
$ |
0.2 |
|
|
$ |
0.5 |
|
|
$ |
0.5 |
|
|
$ |
2.4 |
|
Diluted
(loss) income per share |
|
$ |
(1.55 |
) |
|
$ |
1.58 |
|
|
$ |
— |
|
|
$ |
0.01 |
|
|
$ |
0.01 |
|
|
$ |
0.01 |
|
|
$ |
0.06 |
|
Reconciliation of Non-GAAP Financial Measures for the Three
Months Ended October 29, 2022 |
|
|
|
U.S. GAAP (as reported) |
|
|
Goodwill impairment |
|
|
Acquisition costs |
|
|
Purchase accounting adjustments related to
inventory |
|
|
Restructuring costs |
|
|
Loss on sale of Dabir assets |
|
|
Non-U.S.GAAP |
|
Income from operations |
|
$ |
32.8 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
0.5 |
|
|
$ |
— |
|
|
$ |
33.3 |
|
Pre-tax
income |
|
$ |
33.4 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
0.5 |
|
|
$ |
— |
|
|
$ |
33.9 |
|
Net
income |
|
$ |
27.6 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
0.4 |
|
|
$ |
— |
|
|
$ |
28.0 |
|
Diluted
income per share |
|
$ |
0.75 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
0.01 |
|
|
$ |
— |
|
|
$ |
0.76 |
|
Reconciliation of Non-GAAP Financial Measures for the Six
Months Ended October 28, 2023 |
|
|
|
U.S. GAAP (as reported) |
|
|
Goodwill impairment |
|
|
Acquisition costs |
|
|
Purchase accounting adjustments related to
inventory |
|
|
Restructuring costs |
|
|
Loss on sale of Dabir assets |
|
|
Non-U.S.GAAP |
|
(Loss) income from operations |
|
$ |
(47.5 |
) |
|
$ |
56.5 |
|
|
$ |
0.5 |
|
|
$ |
0.5 |
|
|
$ |
1.3 |
|
|
$ |
— |
|
|
$ |
11.3 |
|
Pre-tax (loss) income |
|
$ |
(54.5 |
) |
|
$ |
56.5 |
|
|
$ |
0.5 |
|
|
$ |
0.5 |
|
|
$ |
1.3 |
|
|
$ |
0.6 |
|
|
$ |
4.9 |
|
Net (loss) income |
|
$ |
(54.4 |
) |
|
$ |
56.5 |
|
|
$ |
0.4 |
|
|
$ |
0.4 |
|
|
$ |
1.0 |
|
|
$ |
0.5 |
|
|
$ |
4.4 |
|
Diluted (loss) income per
share |
|
$ |
(1.52 |
) |
|
$ |
1.58 |
|
|
$ |
0.01 |
|
|
$ |
0.01 |
|
|
$ |
0.03 |
|
|
$ |
0.01 |
|
|
$ |
0.12 |
|
Reconciliation of Non-GAAP Financial Measures for the Six
Months Ended October 29, 2022 |
|
|
|
U.S. GAAP (as reported) |
|
|
Goodwill impairment |
|
|
Acquisition costs |
|
|
Purchase accounting adjustments related to
inventory |
|
|
Restructuring costs |
|
|
Loss on sale of Dabir assets |
|
|
Non-U.S.GAAP |
|
Income from operations |
|
$ |
54.6 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
0.6 |
|
|
$ |
— |
|
|
$ |
55.2 |
|
Pre-tax income |
|
$ |
59.3 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
0.6 |
|
|
$ |
— |
|
|
$ |
59.9 |
|
Net income |
|
$ |
49.1 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
0.5 |
|
|
$ |
— |
|
|
$ |
49.6 |
|
Diluted income per share |
|
$ |
1.33 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
0.01 |
|
|
$ |
— |
|
|
$ |
1.34 |
|
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