Methode Electronics, Inc. (NYSE: MEI), a global
developer of custom-engineered and application-specific products
and solutions, announced financial results for the third quarter of
Fiscal 2019 ended January 26, 2019.
Third Quarter Fiscal 2019Methode's
third-quarter Fiscal 2019 net sales increased $18.9 million, or 8.3
percent, to $246.9 million from $228.0 million in the same quarter
of Fiscal 2018. Year over year, currency rate fluctuations
decreased net sales $2.2 million.
GAAP net income increased $55.0 million to $30.7 million, or
$0.82 per share, in the third quarter of Fiscal 2019 from a loss of
$24.3 million, or a loss of $0.65 per share, in the same period of
Fiscal 2018.
Adjusted net income, a non-GAAP financial measure, increased to
$31.3 million, or $0.83 per share, in the third quarter of Fiscal
2019 from $27.5 million, or $0.74 per share, in the same period of
Fiscal 2018. Adjusted net income excludes expenses for initiatives
to reduce overall costs and improve operational profitability,
acquisition-related costs (including purchase accounting
adjustments), long-term incentive plan accrual adjustments and the
transition tax and the impact of revaluing deferred taxes due to
the change in the federal tax rate from U.S. Tax Reform in the
applicable periods.
Year over year, Fiscal 2019 third-quarter GAAP net income
benefitted from:
- lower income tax expense of $66.4 million;
- higher sales in the Industrial segment (inclusive of
Grakon);
- increased international government grants of $2.1 million;
- lower legal expense of $0.8 million; and
- the favorable impact of the weakening Mexican peso compared to
the U.S. dollar.
Year over year, Fiscal 2019 third-quarter GAAP net income was
negatively affected by:
- reduced passenger car demand and production in Europe and
Asia;
- higher stock award amortization expense of $4.7 million, due
primarily to the change from target to threshold performance
estimates in the third quarter of fiscal 2018;
- increased acquisition-related costs ($0.8 million) and
increased purchase accounting adjustments related to inventory
($3.0 million) totaling $3.8 million;
- increased intangible asset amortization expense related to the
Grakon acquisition of $3.5 million;
- higher net interest expense of $2.9 million;
- initiatives to reduce overall costs and improve operational
profitability of $2.6 million;
- tariff expense on imported Chinese goods of $2.1 million;
- the absence of the gain in the Fiscal 2018 period related to
the sale of exclusive rights for a licensing agreement of $1.6
million; and
- customer pricing reductions.
Consolidated gross margins as a percentage of net sales
decreased to 26.0 percent for the Fiscal 2019 third quarter
compared to 26.4 percent in the same period last year. Year over
year, gross margins were negatively impacted by the effect of
reduced passenger car demand in Europe and Asia and pricing
reductions on certain products in the Automotive segment, as well
as lower sales in the Interface segment, acquisition-related
purchase accounting adjustments, initiatives to reduce overall
costs and improve operational profitability and tariff expense.
These decreases were partially offset by increased sales and a
favorable sales mix in the Industrial segment and a favorable
currency impact. Adjusted gross margins as a percentage of sales, a
non-GAAP financial measure, increased to 27.7 percent in the Fiscal
2019 third quarter from 26.4 percent in the same period of Fiscal
2018 and exclude expense for initiatives to reduce overall costs
and improve operational profitability and acquisition-related
purchase accounting adjustments in the applicable periods.
Selling and administrative expenses as a percentage of sales
increased to 13.3 percent for the Fiscal 2019 third quarter
compared to 9.9 percent in the same period last year due to higher
stock award amortization expense, selling and administrative
expenses attributable to the Grakon acquisition, increased
acquisition-related costs and initiatives to reduce overall costs
and improve operational profitability, partially offset by lower
legal expense. Adjusted selling and administrative expenses as a
percentage of sales, a non-GAAP financial measure, were unchanged
at 12.5 percent in the Fiscal 2019 and Fiscal 2018 third quarters
and exclude acquisition-related costs, initiatives to reduce
overall costs and improve operational profitability and long-term
incentive plan accrual adjustments in the applicable periods.
Year over year, intangible asset amortization expense in the
third quarter of Fiscal 2019 increased $3.5 million, or 175.0
percent, to $5.5 million, due to amortization expense related to
the Grakon acquisition.
In the Fiscal 2019 third quarter, income tax expense decreased
$66.4 million to a benefit of $3.0 million compared to an expense
of $63.4 million in the Fiscal 2018 third quarter primarily due to
the transition tax and the impact of revaluing deferred taxes due
to the change in the federal tax rate from U.S. Tax Reform in
the applicable periods. In addition, the Company recognized a tax
benefit from foreign tax credits and a release of a tax reserve.
The Company’s effective tax rate decreased to a benefit of 10.4
percent in the Fiscal 2019 period from an expense of 162.1 percent
in the previous third quarter.
EBITDA (Earnings Before Interest, Taxes, Depreciation and
Amortization of Intangibles), a non-GAAP financial measure, in the
Fiscal 2019 third quarter was $43.1 million compared to $46.5
million in the Fiscal 2018 period. Adjusted EBITDA, a non-GAAP
financial measure, excludes expenses for initiatives to reduce
overall costs and improve operational profitability,
acquisition-related costs (including purchase accounting
adjustments) and long-term incentive plan accrual adjustments from
EBITDA, improved to $49.5 million in the Fiscal 2019 third quarter
from $40.5 million in the Fiscal 2018 period.
Segment Comparisons (GAAP Reported)Comparing
the Automotive segment's Fiscal 2019 third quarter to the same
period of Fiscal 2018,
- Net sales decreased 6.5 percent, or $12.0 million, attributable
to:
- a 25.5 percent sales decline in Asia due to a combination of
pricing reductions and reduced volume of transmission lead-frame
assembly product as a result of lower passenger car demand and
production, as well as decreased steering angle sensor volume as
the product approaches end of production; and
- a 19.9 percent sales decrease in Europe mainly the result of
lower passenger car production due to European emission testing
standards and an overall reduction in passenger car demand, as well
as the exclusion of pre-production tooling sales as the result of
newly adopted accounting guidelines regarding revenue recognition
under ASC 606, partially offset by higher sensor product volumes;
partially offset by
- a 5.8 percent sales increase in North America attributable to
automotive sales from Grakon of $13.2 million and new launches,
partially offset by pricing reductions and sales mix of center
console products, and a combination of pricing reductions and
reduced volume of transmission lead-frame assembly product due to
reduced passenger car demand and production.
- Gross margins as a percentage of sales decreased to 24.2
percent from 27.9 percent mainly due to lower sales volume as the
result of an overall reduction in passenger car demand and
production in Europe and Asia, as well as pricing reductions,
initiatives to reduce overall costs and improve operational
profitability and tariff expense, partially offset by a favorable
currency impact.
- Income from operations decreased $12.4 million, or 31.5
percent, resulting from lower sales volume due to an overall
reduction in passenger car demand and production in Europe and
Asia, pricing reductions and sales mix in North America,
initiatives to reduce overall costs and improve operational
profitability and higher stock award amortization expense,
partially offset by income from Grakon and a favorable currency
impact.
Comparing the Industrial segment's Fiscal 2019 third quarter to
the same period of Fiscal 2018,
- Net sales increased 136.1 percent, or $34.7 million,
attributable to:
- a 324.7 percent sales improvement in North America as the
result of sales from Grakon of $31.4 million, partially offset by
lower busbar product volume;
- a 33.7 percent sales improvement in Europe due to sales from
Grakon of $1.9 million, as well as improved busbar and radio remote
control product volumes, partially offset by decreased bypass
switch volume; and
- a 21.5 percent sales increase in Asia attributable to sales
from Grakon of $0.4 million and higher busbar product volume.
- Gross margins as a percentage of sales increased to 33.1
percent from 24.7 percent due to higher sales and a favorable sales
mix partially offset by purchase accounting adjustments and tariff
expense.
- Income from operations improved to $8.9 million compared to
$3.2 million resulting from income from Grakon, increased radio
remote control volume and lower legal expense, partially offset by
purchase accounting adjustments and tariff expense.
Comparing the Interface segment's Fiscal 2019 third quarter to
the same period of Fiscal 2018,
- Net sales decreased 22.2 percent, or $3.9 million, attributable
to:
- a 20.8 percent sales decline in North America as the result of
the delayed launch of a major appliance program and reduced legacy
data solution product volume; and
- a 50.0 percent sales decrease in Asia due to lower sales
volumes of legacy products.
- Gross margins as a percentage of sales decreased to 16.1
percent from 19.3 percent due to lower sales volumes, partially
offset by a favorable currency impact.
- Income from operations declined $1.6 million to break even
resulting from lower sales, partially offset by a favorable
currency impact.
Comparing the Medical segment's Fiscal 2019 third quarter to the
same period of Fiscal 2018,
- Net sales were constant at $0.1 million year over year.
First Nine Months Fiscal 2019Methode's first
nine months of Fiscal 2019 net sales increased $75.0 million, or
11.4%, to $734.3 million from $659.3 million in the same period of
Fiscal 2018. Year over year, currency rate fluctuations decreased
net sales by $1.1 million.
GAAP net income increased $48.6 million to $69.0 million, or
$1.83 per share, in the first nine months of Fiscal 2019 from $20.4
million, or $0.54 per share, in the same period of Fiscal 2018.
Adjusted net income, a non-GAAP financial measure, increased to
$87.9 million, or $2.34 per share, in the nine months of Fiscal
2019 compared to $77.9 million, or $2.07 per share, in the same
period of Fiscal 2018. Adjusted net income excludes expenses for
initiatives to reduce overall costs and improve operational
profitability, acquisition-related costs (including purchase
accounting adjustments), long-term incentive plan accrual
adjustments and the transition tax and the impact of revaluing
deferred taxes due to the change in the federal tax rate from U.S.
Tax Reform in the applicable periods.
Year over year, first nine months of Fiscal 2019 GAAP net income
benefitted from:
- lower income tax expense of $68.1 million;
- higher sales in the Automotive and Industrial segments
(inclusive of Pacific Insight, Procoplast and Grakon);
- lower legal expense of $3.6 million;
- increased international government grants of $2.1 million;
and
- the favorable impact of the weakening Mexican peso compared to
the U.S. dollar.
Year over year, first nine months of Fiscal 2019 GAAP net income
was negatively affected by:
- reduced passenger car demand and production in Europe and
Asia;
- increased acquisition-related costs ($3.7 million) and
increased purchase accounting adjustments related to inventory
($4.8 million) totaling $8.5 million;
- higher stock award amortization expense of $8.4 million;
- increased intangible asset amortization expense related to the
Pacific Insight, Procoplast and Grakon acquisitions of $7.4
million;
- initiatives to reduce overall costs and improve operational
profitability of $5.8 million;
- higher net interest expense of $4.7 million;
- tariff expense on imported Chinese goods of $2.1 million;
- the absence of the gain in the Fiscal 2018 period related to
the sale of exclusive rights for a licensing agreement of $1.6
million; and
- customer pricing reductions.
Consolidated gross margins as a percentage of sales decreased
slightly to 26.6 percent in the first nine months of Fiscal 2019
from 27.0 percent in the first nine months of Fiscal 2018. Year
over year, gross margins were negatively impacted by the effect of
reduced passenger car demand and production in Europe and Asia,
sales mix and pricing reductions on certain products in the
Automotive segment, as well as lower sales in the Interface
segment, purchase accounting adjustments, initiatives to reduce
overall costs and improve operational profitability and tariff
expense. These decreases were partially offset by a favorable sales
mix in the Industrial segment and favorable currency impact.
Adjusted gross margins as a percentage of sales, a non-GAAP
financial measure, increased to 27.8 percent in the Fiscal 2019
first nine months from 27.1 percent in the same period of Fiscal
2018 and exclude expense for initiatives to reduce overall costs
and improve operational profitability and acquisition-related
purchase accounting adjustments in the applicable periods.
Selling and administrative expenses as a percentage of sales
increased to 15.0 percent for the first nine months of Fiscal 2019
compared to 12.6 percent in the first nine months of Fiscal 2018
due to selling and administrative expenses attributable to the
Procoplast and Grakon acquisitions, higher stock award amortization
expense, increased acquisition-related costs, initiatives to reduce
overall costs and improve operational profitability and higher
personnel-related costs, partially offset by lower legal expense.
Adjusted selling and administrative expenses as a percentage of
sales, a non-GAAP financial measure, decreased to 12.3 percent in
the Fiscal 2019 first nine months compared to 12.6 percent in the
first nine months of Fiscal 2018 and exclude acquisition-related
costs, expense for initiatives to reduce overall costs and improve
operational profitability and long-term incentive plan accrual
adjustments in the applicable periods.
Year over year, intangible asset amortization expense in the
first nine months of Fiscal 2019 increased $7.4 million, or 200.0
percent, to $11.1 million, due to the Pacific Insight, Procoplast
and Grakon acquisitions.
In the first nine months of Fiscal 2019, income tax expense
decreased $68.1 million to $4.5 million compared to $72.6 million
in the first nine months of Fiscal 2018 primarily due to the
transition tax and the impact of revaluing deferred taxes due to
the change in the federal tax rate from U.S. Tax Reform in the
applicable periods. In addition, the Company recognized a tax
benefit from foreign tax credits and a release of a tax reserve.
The Company’s effective tax rate decreased to 6.1 percent in the
first nine months of Fiscal 2019 from 78.1 percent in the first
nine months of Fiscal 2018.
EBITDA (Earnings Before Interest, Taxes, Depreciation and
Amortization of Intangibles), a non-GAAP financial measure, in the
first nine months of Fiscal 2019 was $109.1 million compared to
$113.3 million in the first nine months of Fiscal 2018. Adjusted
EBITDA, a non-GAAP financial measure, excludes expenses for
initiatives to reduce overall costs and improve operational
profitability, acquisition-related costs (including purchase
accounting adjustments) and long-term incentive plan accrual
adjustments from EBITDA, improved to $137.6 million in the first
nine months of Fiscal 2019 from $114.1 million in the first nine
months of Fiscal 2018.
Segment Comparisons (GAAP Reported)Comparing
the Automotive segment's Fiscal 2019 first nine months to the same
period of Fiscal 2018,
- Net sales increased 4.1 percent, or $21.7 million, attributable
to:
- a 13.7 percent sales improvement in North America due to higher
sales from Pacific Insight of $37.2 million, sales from Grakon of
$19.3 million and new launches, partially offset by pricing
reductions and sales mix of center console products, and a
combination of pricing reductions and reduced volume of
transmission lead-frame assembly product as the result of reduced
passenger car demand and production; partially offset by
- a 16.0 percent sales decrease in Asia mainly attributable to a
combination of pricing reductions and reduced volume of
transmission lead-frame assembly product due to reduced passenger
car demand and production, and lower steering angle sensor product
volume as the product approaches end of production; and
- a 4.7 percent sales decrease in Europe mainly as a result of
lower passenger car production attributable to European emission
testing standards and an overall reduction in passenger car demand
and production, as well as the exclusion of pre-production tooling
sales due to newly adopted accounting guidelines regarding revenue
recognition under ASC 606, partially offset by higher sales from
Procoplast of $6.6 million and improved sensor products
volume.
- Gross margins as a percentage of sales declined to 26.1 percent
from 28.4 percent due to unfavorable sales mix in Asia and at
Pacific Insight, pricing reductions, initiatives to reduce overall
costs and improve operational profitability and tariff expense,
partially offset by a favorable currency impact.
- Income from operations decreased $21.4 million, or 18.1
percent, resulting from an unfavorable sales mix, higher stock
award amortization expense, initiatives to reduce overall costs and
improve operational profitability, pricing reductions, tariff
expense and increased intangible asset amortization expense,
partially offset by Grakon and Pacific Insight sales and a
favorable currency impact.
Comparing the Industrial segment's Fiscal 2019 first nine months
to the same period of Fiscal 2018,
- Net sales increased 83.9 percent, or $63.8 million,
attributable to:
- a 182.1 percent sales improvement in North America as the
result of sales from Grakon of $48.3 million and increased radio
remote control and busbar products volume;
- a 40.3 percent sales increase in Asia due to sales from Grakon
of $0.7 million and higher busbar product volume; and
- a 17.3 percent sales improvement in Europe attributable to
sales from Grakon of $2.8 million and higher radio remote control
and busbar products volume, partially offset by lower bypass switch
product volume.
- Gross margins as a percentage of sales improved to 31.8 percent
from 25.5 percent due to a favorable sales mix partially offset by
purchase accounting adjustments and tariff expense.
- Income from operations increased to $21.1 million from $8.3
million as result of income from Grakon, improved radio remote
control and busbar sales volume and lower legal expense, partially
offset by higher stock award amortization expense, purchase
accounting adjustments and tariff expense.
Comparing the Interface segment's Fiscal 2019 first nine months
to the same period of Fiscal 2018,
- Net sales decreased 20.1 percent, or $11.1 million,
attributable to:
- a 19.7 percent sales decrease in North America as the result of
the delayed launch of a major appliance program and reduced legacy
data solution products volume; and
- a 35.3 percent sales decline in Asia due to lower legacy
product volume.
- Gross margins as a percentage of sales declined to 15.0 percent
from 20.1 percent due to lower sales volumes and an unfavorable
sales mix, partially offset by a favorable currency impact.
- Income from operations decreased $4.8 million, or 96.0 percent,
as the result of lower sales volumes and an unfavorable sales mix,
partially offset by a favorable currency impact.
Comparing the Medical segment's Fiscal 2019 first nine months to
the same period of Fiscal 2018,
- Net sales increased $0.5 million due primarily to an expanded
customer base.
Fiscal 2019 GuidanceMethode anticipates Fiscal
2019 sales to be at the lower end of the previous guidance range of
$1.0 billion to $1.04 billion. The Company has updated guidance for
pre-tax income to a range of $104.5 million to $111.5 million and
earnings per share to a range of $2.50 to $2.67 from pre-tax income
in the range of $91.5 million to $105.5 million and earnings per
share in the range of $2.02 to $2.33.
Fiscal 2019 guidance considers:
- Tax-related benefits of $7.2 million of which $4.8 million is
due to finalization of U.S. Tax Reform;
- Improved anticipated operational results at Grakon from
guidance issued in Fiscal 2019 second quarter;
- Lower anticipated impact of tariffs on imported Chinese goods
at 10 percent to approximately $4.3 million from $5.5 million
issued in Fiscal 2019 second quarter guidance;
- Pre-tax expense for initiatives to reduce overall costs and
improve operational profitability in Fiscal 2019 of $7.3
million;
- Stock award amortization expense due to change in Fiscal 2020
EBITDA estimate from Threshold to Target of $5.7 million;
- Acquisition-related costs of $7.9 million;
- Purchase accounting adjustments for inventory and severance
related to the acquisition of Grakon of $7.0 million; and
- International government grant of $5.9 million.
The guidance ranges for Fiscal 2019 are based upon management's
expectations regarding a variety of factors and involve a number of
risks and uncertainties, including, but not limited to, the
following:
- sales volumes and timing thereof for certain makes and models
of pickup trucks, sports utility vehicles and passenger cars;
- the potential impact of the current and proposed Chinese
tariffs and the costs associated with mitigating those
tariffs;
- the successful integration of acquisitions;
- the price of commodities, particularly copper and resins;
- sales mix within the markets served;
- currency exchange effect of the operations of foreign
businesses;
- supplier issues or manufacturing quality events;
- any unusual or one-time items; and
- an effective tax rate in the 9 to 11 percent range and no
significant changes in tax credit movement, valuation allowances or
enacted tax laws.
Management CommentsPresident and Chief
Executive Officer Donald W. Duda said, “Although we are facing
challenging automotive market conditions, including an overall
reduction in passenger car demand and production and European
emission testing standards, Fiscal 2019 third-quarter and
nine-month sales grew year over year due mainly to our Grakon
acquisition. Additionally, we generated $63 million in free cash
flow through the nine months of Fiscal 2019. This allowed us to
repay $55 million of our debt during the quarter, making
significant progress toward our goal to reduce debt. With a solid
balance sheet and sound financial performance, we remain well
positioned to execute on our plan to deleverage our balance sheet
while also investing for growth."
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 Income from Operations, Adjusted Gross Profit,
Adjusted Gross Margins as a Percentage of Sales, Adjusted Selling
and Administrative Expenses, Adjusted Selling and Administrative
Expenses as a Percentage of Sales, EBITDA, Adjusted EBITDA, 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 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
and (iii) otherwise provide supplemental information that may be
useful to investors in evaluating Methode.
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, Ron Tsoumas, today at 10:00
a.m. Central time.
To participate in the conference call, please dial (877)
407-9210 (domestic) or (201) 689-8049 (international) at least five
minutes prior to the start of the event. A simultaneous Webcast can
be accessed through the Company’s Web site, www.methode.com, by
selecting the Investor Relations page, and then clicking on the
“Webcast” icon.
A replay of the conference call will be available shortly after
the call through April 7, 2019, by dialing (877) 481-4010 and
providing Conference ID number 44548. On the Internet, a replay
will be available for 30 days through the Company’s Web site,
www.methode.com, by selecting the Investor Relations page and then
clicking on the “Webcast” icon.
About Methode Electronics, Inc.Methode
Electronics, Inc. (NYSE: MEI) is a global developer of custom
engineered and application specific products and solutions with
manufacturing, design and testing facilities in Belgium, Canada,
China, Egypt, Germany, India, Italy, Lebanon, Malta, Mexico, the
Netherlands, Singapore, Switzerland, the United Kingdom and the
United States. We design, manufacture and market devices employing
electrical, electronic, wireless, safety radio remote control,
sensing and optical technologies to control and convey signals
through sensors, interconnections and controls. Our business is
managed on a segment basis, with those segments being Automotive,
Industrial, Interface and Medical. Our components are in the
primary end markets of the automobile, commercial vehicle,
computer, information processing and networking equipment, voice
and data communication systems, consumer electronics, appliances,
aerospace vehicles and industrial equipment industries. Further
information can be found on Methode's Web site www.methode.com.
Forward-Looking StatementsThis press release
contains certain forward-looking statements, which reflect
management's expectations regarding future events and operating
performance and speak only as of the date hereof. These
forward-looking statements are subject to the safe harbor
protection provided under the securities laws. Methode undertakes
no duty to update any forward-looking statement to conform the
statement to actual results or changes in Methode's expectations on
a quarterly basis or otherwise. The forward-looking statements in
this press release involve a number of risks and uncertainties. The
factors that could cause actual results to differ materially from
our expectations are detailed in Methode's filings with the
Securities and Exchange Commission, such as our annual and
quarterly reports. Such factors may include, without limitation,
the following: (1) dependence on a small number of large customers,
including two large automotive customers; (2) dependence on the
automotive, appliance, commercial vehicle, computer and
communications industries; (3) international trade disputes
resulting in tariffs: (4) investment in programs prior to the
recognition of revenue; (5) timing, quality and cost of new program
launches; (6) changes in U.S. trade policy; (7) ability to
withstand price pressure, including pricing reductions; (8) ability
to successfully market and sell Dabir Surfaces products; (9)
currency fluctuations; (10) customary risks related to
conducting global operations; (11) recognition of goodwill
impairment charges; (12) dependence on the availability and price
of raw materials; (13) fluctuations in our gross margins; (14)
ability to withstand business interruptions; (15) ability to
successfully benefit from acquisitions and divestitures; (16)
dependence on our supply chain; (17) income tax rate fluctuations;
(18) ability to keep pace with rapid technological changes; (19)
breach of our information technology systems; (20) ability to avoid
design or manufacturing defects; (21) ability to compete
effectively; (22) ability to protect our intellectual property;
(23) success of Pacific Insight, Procoplast and Grakon and/or our
ability to implement and profit from new applications of the
acquired technology; (24) significant adjustments to expense based
on the probability of meeting certain performance levels in our
long-term incentive plan; and (25) costs and expenses due to
regulations regarding conflict minerals.
For Methode Electronics, Inc.Kristine
WalczakVice President - Corporate
Communications708-457-4030kwalczak@methode.com
Steve CarrDresner Corporate
Services312-780-7211scarr@dresnerco.com
METHODE ELECTRONICS, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited)($ in millions, except per
share data)
| |
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
January 26, 2019 |
|
January 27, 2018 |
|
January 26, 2019 |
|
January 27, 2018 |
|
|
|
|
|
|
|
|
|
|
|
Net Sales |
|
$ |
246.9 |
|
|
$ |
228.0 |
|
|
$ |
734.3 |
|
|
$ |
659.3 |
|
|
|
|
|
|
|
|
|
|
|
| Cost of Products
Sold |
|
182.6 |
|
|
167.9 |
|
|
539.1 |
|
|
481.6 |
|
| |
|
|
|
|
|
|
|
|
| Gross Profit |
|
64.3 |
|
|
60.1 |
|
|
195.2 |
|
|
177.7 |
|
| |
|
|
|
|
|
|
|
|
| Selling and
Administrative Expenses |
|
32.8 |
|
|
22.5 |
|
|
110.3 |
|
|
83.3 |
|
| Amortization of
Intangibles |
|
5.5 |
|
|
2.0 |
|
|
11.1 |
|
|
3.7 |
|
| |
|
|
|
|
|
|
|
|
| Income from
Operations |
|
26.0 |
|
|
35.6 |
|
|
73.8 |
|
|
90.7 |
|
| |
|
|
|
|
|
|
|
|
| Interest Expense,
Net |
|
3.2 |
|
|
0.3 |
|
|
5.0 |
|
|
0.3 |
|
| Other Income, Net |
|
(4.9 |
) |
|
(3.8 |
) |
|
(4.7 |
) |
|
(2.6 |
) |
| |
|
|
|
|
|
|
|
|
| Income before Income
Taxes |
|
27.7 |
|
|
39.1 |
|
|
73.5 |
|
|
93.0 |
|
| |
|
|
|
|
|
|
|
|
| Income Tax Expense
(Benefit) |
|
(3.0 |
) |
|
63.4 |
|
|
4.5 |
|
|
72.6 |
|
| |
|
|
|
|
|
|
|
|
| Net Income (Loss) |
|
$ |
30.7 |
|
|
$ |
(24.3 |
) |
|
$ |
69.0 |
|
|
$ |
20.4 |
|
| |
|
|
|
|
|
|
|
|
| Basic and Diluted
Income (Loss) per Share: |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.82 |
|
|
$ |
(0.65 |
) |
|
$ |
1.84 |
|
|
$ |
0.54 |
|
|
Diluted |
|
$ |
0.82 |
|
|
$ |
(0.65 |
) |
|
$ |
1.83 |
|
|
$ |
0.54 |
|
| |
|
|
|
|
|
|
|
|
| Cash Dividends per
Common Share |
|
$ |
0.11 |
|
|
$ |
0.11 |
|
|
$ |
0.33 |
|
|
$ |
0.29 |
|
| |
|
|
|
|
|
|
|
|
| Weighted Average Number
of Common Shares Outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
37,405,550 |
|
|
37,292,934 |
|
|
37,387,181 |
|
|
37,275,041 |
|
|
Diluted |
|
37,654,250 |
|
|
37,292,934 |
|
|
37,637,470 |
|
|
37,661,020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
METHODE ELECTRONICS, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(in millions, except per share
data)
| |
|
January 26, 2019 |
|
April 28, 2018 |
| |
|
(Unaudited) |
|
|
| Assets: |
|
|
|
|
| Current Assets: |
|
|
|
|
| Cash and Cash
Equivalents |
|
$ |
73.7 |
|
|
$ |
246.1 |
|
| Accounts
Receivable, Net |
|
211.5 |
|
|
202.6 |
|
|
Inventories: |
|
|
|
|
| Finished
Products |
|
33.9 |
|
|
15.4 |
|
| Work in
Process |
|
9.3 |
|
|
14.6 |
|
|
Materials |
|
80.8 |
|
|
54.1 |
|
| Total
Inventories |
|
124.0 |
|
|
84.1 |
|
| Prepaid
and Refundable Income Taxes |
|
14.7 |
|
|
2.4 |
|
| Prepaid
Expenses and Other Current Assets |
|
22.5 |
|
|
14.8 |
|
| Total Current
Assets |
|
446.4 |
|
|
550.0 |
|
| Property Plan and
Equipment: |
|
|
|
|
| Land |
|
3.6 |
|
|
0.8 |
|
| Buildings
and Building Improvements |
|
74.7 |
|
|
69.2 |
|
| Machinery
and Equipment |
|
390.3 |
|
|
364.7 |
|
| Property,
Plant and Equipment, Gross |
|
468.6 |
|
|
434.7 |
|
| Less:
Allowances for Depreciation |
|
279.5 |
|
|
272.5 |
|
| Property, Plant and
Equipment, Net |
|
189.1 |
|
|
162.2 |
|
| Other Assets: |
|
|
|
|
|
Goodwill |
|
236.8 |
|
|
59.2 |
|
| Other
Intangible Assets, Net |
|
267.6 |
|
|
61.0 |
|
| Cash
Surrender Value of Life Insurance |
|
8.6 |
|
|
8.2 |
|
| Deferred
Income Taxes |
|
32.8 |
|
|
42.3 |
|
|
Pre-production Costs |
|
32.5 |
|
|
20.5 |
|
|
Other |
|
12.4 |
|
|
12.5 |
|
| Total Other Assets |
|
590.7 |
|
|
203.7 |
|
| Total Assets |
|
$ |
1,226.2 |
|
|
$ |
915.9 |
|
| Liabilities and
Shareholders' Equity: |
|
|
|
|
| Current
Liabilities: |
|
|
|
|
| Accounts
Payable |
|
$ |
88.6 |
|
|
$ |
89.5 |
|
| Salaries,
Wages and Payroll Taxes |
|
21.4 |
|
|
22.8 |
|
| Other
Accrued Expenses |
|
34.4 |
|
|
21.6 |
|
|
Short-term Debt |
|
15.2 |
|
|
4.4 |
|
| Income
Tax Payable |
|
16.8 |
|
|
18.7 |
|
| Total Current
Liabilities |
|
176.4 |
|
|
157.0 |
|
| Long-term Debt |
|
287.7 |
|
|
53.4 |
|
| Long-term Income Taxes
Payable |
|
33.0 |
|
|
42.6 |
|
| Other Liabilities |
|
6.7 |
|
|
4.6 |
|
| Deferred Income
Taxes |
|
38.9 |
|
|
18.3 |
|
| Deferred
Compensation |
|
9.4 |
|
|
10.0 |
|
| Total Liabilities |
|
552.1 |
|
|
285.9 |
|
| Shareholders'
Equity: |
|
|
|
|
| Common
Stock, $0.50 par value, 100,000,000 shares authorized, 38,333,576
and 38,198,353 shares issued as of January 26, 2019 and
April 28, 2018, respectively |
|
19.2 |
|
|
19.1 |
|
|
Additional Paid-in Capital |
|
148.2 |
|
|
136.5 |
|
|
Accumulated Other Comprehensive Income (Loss) |
|
(8.5 |
) |
|
13.9 |
|
| Treasury
Stock, 1,346,624 shares as of January 26, 2019 and April 28,
2018 |
|
(11.5 |
) |
|
(11.5 |
) |
| Retained
Earnings |
|
526.7 |
|
|
472.0 |
|
| Total Shareholders'
Equity |
|
674.1 |
|
|
630.0 |
|
| Total Liabilities and
Shareholders' Equity |
|
$ |
1,226.2 |
|
|
$ |
915.9 |
|
|
|
|
|
|
|
METHODE ELECTRONICS, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (Unaudited)($ in millions)
| |
|
Nine Months Ended |
| |
|
January 26, 2019 |
|
January 27, 2018 |
|
|
|
|
|
|
|
|
|
|
| Operating Activities: |
|
|
|
|
|
|
|
|
| Net
Income |
|
$ |
69.0 |
|
|
$ |
20.4 |
|
|
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities: |
|
|
|
|
| Gain on
Sale of Fixed Assets |
|
(0.6 |
) |
|
— |
|
| Gain on
Sale of Licensing Agreement |
|
— |
|
|
(1.6 |
) |
|
Depreciation of Property, Plant and Equipment |
|
19.5 |
|
|
16.3 |
|
|
Amortization of Intangible Assets |
|
11.1 |
|
|
3.7 |
|
|
Stock-based Compensation |
|
11.7 |
|
|
3.3 |
|
| Provision
for Bad Debt |
|
0.1 |
|
|
0.1 |
|
| Change in
Deferred Income Taxes |
|
(0.5 |
) |
|
(12.2 |
) |
| Changes
in Operating Assets and Liabilities, Net of Acquistions: |
|
|
|
|
|
Accounts Receivable |
|
12.2 |
|
|
5.9 |
|
|
Inventories |
|
(10.9 |
) |
|
(5.8 |
) |
|
Prepaid Expenses and Other Assets |
|
(16.4 |
) |
|
14.6 |
|
|
Accounts Payable and Other Expenses |
|
(30.9 |
) |
|
42.4 |
|
| Net Cash Provided by
Operating Activities |
|
64.3 |
|
|
87.1 |
|
| Investing
Activities: |
|
|
|
|
| Purchases
of Property, Plant and Equipment |
|
(37.0 |
) |
|
(34.7 |
) |
|
Acquisition of Business, Net of Cash Received |
|
(421.6 |
) |
|
(129.9 |
) |
| Purchases
of Technology Licenses, Net |
|
— |
|
|
(0.7 |
) |
| Sale of
Business/Investment/Property |
|
0.3 |
|
|
0.3 |
|
| Net Cash Used in
Investing Activities |
|
(458.3 |
) |
|
(165.0 |
) |
| Financing
Activities: |
|
|
|
|
| Taxes
Paid Related to Net Share Settlement of Equity Awards |
|
(1.7 |
) |
|
(0.3 |
) |
| Proceeds
from Exercise of Stock Options |
|
— |
|
|
0.2 |
|
| Cash
Dividends |
|
(12.7 |
) |
|
(10.6 |
) |
| Proceeds
from Borrowings |
|
350.0 |
|
|
71.3 |
|
| Repayment
of Borrowings |
|
(103.3 |
) |
|
(3.0 |
) |
| Net Cash Provided in
Financing Activities |
|
232.3 |
|
|
57.6 |
|
| Effect of Foreign
Currency Exchange Rate Changes on Cash and Cash Equivalents |
|
(10.7 |
) |
|
30.3 |
|
| Increase (Decrease) in
Cash and Cash Equivalents |
|
(172.4 |
) |
|
10.0 |
|
| Cash and Cash
Equivalents at Beginning of Year |
|
246.1 |
|
|
294.0 |
|
| Cash and Cash
Equivalents at End of Period |
|
$ |
73.7 |
|
|
$ |
304.0 |
|
|
|
|
|
|
|
METHODE ELECTRONICS, INC. AND
SUBSIDIARIES(Unaudited)($ in
millions, except per share data)
Reconciliation of Non-GAAP Financial
Measures for the Three Months Ended January 26, 2019
| |
|
|
|
|
|
Acquisition-Related Costs |
|
|
|
|
|
|
| |
|
U.S. GAAP(As
Reported) |
|
Expense for Initiatives to Reduce Overall Costs
and Improve Operational Profitability |
|
Purchase Accounting Adjustments Related to
Inventory |
|
Severance |
|
Other |
|
Long-term Incentive Plan Accrual Adjustment due
to change in Fiscal 2020 EBITDA estimate |
|
Transition tax and the impact of revaluing
deferred taxes due to the change in the federal tax rate from U.S.
Tax Reform |
|
Non-U.S. GAAP Financial Measures |
|
Gross Profit |
|
$ |
64.3 |
|
|
$ |
1.3 |
|
|
$ |
3.0 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
68.6 |
|
| Gross
Margin (% of sales) |
|
26.0 |
% |
|
0.5 |
% |
|
1.2 |
% |
|
— |
% |
|
— |
% |
|
— |
% |
|
— |
% |
|
27.7 |
% |
| Selling and Administrative
Expenses |
|
$ |
32.8 |
|
|
$ |
(1.3 |
) |
|
$ |
— |
|
|
$ |
(0.1 |
) |
|
$ |
(0.7 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
30.7 |
|
| Selling
and Administrative Expenses (% of sales) |
|
13.3 |
% |
|
(0.5 |
)% |
|
— |
% |
|
— |
% |
|
(0.3 |
)% |
|
— |
% |
|
— |
% |
|
12.5 |
% |
| Income from
Operations |
|
$ |
26.0 |
|
|
$ |
2.6 |
|
|
$ |
3.0 |
|
|
$ |
0.1 |
|
|
$ |
0.7 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
32.4 |
|
| Net Income |
|
$ |
30.7 |
|
|
$ |
2.2 |
|
|
$ |
2.5 |
|
|
$ |
0.1 |
|
|
$ |
0.6 |
|
|
$ |
— |
|
|
$ |
(4.8 |
) |
|
$ |
31.3 |
|
| Diluted Earnings per
Share |
|
$ |
0.82 |
|
|
$ |
0.06 |
|
|
$ |
0.07 |
|
|
$ |
— |
|
|
$ |
0.01 |
|
|
$ |
— |
|
|
$ |
(0.13 |
) |
|
$ |
0.83 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial
Measures for the Three Months Ended January 27, 2018
| |
|
|
|
|
|
Acquisition-Related Costs |
|
|
|
|
|
|
| |
|
U.S. GAAP(As
Reported) |
|
Expense for Initiatives to Reduce Overall Costs
and Improve Operational Profitability |
|
Purchase Accounting Adjustments Related to
Inventory |
|
Severance |
|
Other |
|
Long-term Incentive Plan Accrual Adjustment due
to change in Fiscal 2020 EBITDA estimate |
|
Transition tax and the impact of revaluing
deferred taxes due to the change in the federal tax rate from U.S.
Tax Reform |
|
Non-U.S. GAAP Financial Measures |
|
Gross Profit |
|
$ |
60.1 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
60.1 |
|
| Gross
Margin (% of sales) |
|
26.4 |
% |
|
— |
% |
|
— |
% |
|
— |
% |
|
— |
% |
|
— |
% |
|
— |
% |
|
26.4 |
% |
| Selling and Administrative
Expenses |
|
$ |
22.5 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
6.0 |
|
|
$ |
— |
|
|
$ |
28.5 |
|
| Selling
and Administrative Expenses (% of sales) |
|
9.9 |
% |
|
— |
% |
|
— |
% |
|
— |
% |
|
— |
% |
|
2.6 |
% |
|
— |
% |
|
12.5 |
% |
| Income from
Operations |
|
$ |
35.6 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(6.0 |
) |
|
$ |
— |
|
|
$ |
29.6 |
|
| Net Income (Loss) |
|
$ |
(24.3 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(5.0 |
) |
|
$ |
56.8 |
|
|
$ |
27.5 |
|
| Diluted Earnings (Loss)
per Share |
|
$ |
(0.65 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(0.13 |
) |
|
$ |
1.52 |
|
|
$ |
0.74 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial
Measures for the Nine Months Ended January 26, 2019
| |
|
|
|
|
|
Acquisition-Related Costs |
|
|
|
|
|
|
| |
|
U.S. GAAP(As
Reported) |
|
Expense for Initiatives to Reduce Overall Costs
and Improve Operational Profitability |
|
Purchase Accounting Adjustments Related to
Inventory |
|
Severance |
|
Other |
|
Long-term Incentive Plan Accrual Adjustment due
to change in Fiscal 2020 EBITDA estimate |
|
Transition tax and the impact of revaluing
deferred taxes due to the change in the federal tax rate from U.S.
Tax Reform |
|
Non-U.S. GAAP Financial Measures |
|
Gross Profit |
|
$ |
195.2 |
|
|
$ |
2.7 |
|
|
$ |
5.6 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
203.5 |
|
| Gross
Margin (% of sales) |
|
26.6 |
% |
|
0.4 |
% |
|
0.8 |
% |
|
— |
% |
|
— |
% |
|
— |
% |
|
— |
% |
|
27.8 |
% |
| Selling and Administrative
Expenses |
|
$ |
110.3 |
|
|
$ |
(3.1 |
) |
|
$ |
— |
|
|
$ |
(1.5 |
) |
|
$ |
(8.2 |
) |
|
$ |
(7.4 |
) |
|
$ |
— |
|
|
$ |
90.1 |
|
| Selling
and Administrative Expenses (% of sales) |
|
15.0 |
% |
|
(0.4 |
)% |
|
— |
% |
|
(0.2 |
)% |
|
(1.1 |
)% |
|
(1.0 |
)% |
|
— |
% |
|
12.3 |
% |
| Income from
Operations |
|
$ |
73.8 |
|
|
$ |
5.8 |
|
|
$ |
5.6 |
|
|
$ |
1.5 |
|
|
$ |
8.2 |
|
|
$ |
7.4 |
|
|
$ |
— |
|
|
$ |
102.3 |
|
| Net Income |
|
$ |
69.0 |
|
|
$ |
4.8 |
|
|
$ |
4.7 |
|
|
$ |
1.2 |
|
|
$ |
6.8 |
|
|
$ |
6.2 |
|
|
$ |
(4.8 |
) |
|
$ |
87.9 |
|
| Diluted Earnings per
Share |
|
$ |
1.83 |
|
|
$ |
0.13 |
|
|
$ |
0.13 |
|
|
$ |
0.03 |
|
|
$ |
0.18 |
|
|
$ |
0.17 |
|
|
$ |
(0.13 |
) |
|
$ |
2.34 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
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Reconciliation of Non-GAAP Financial
Measures for the Nine Months Ended January 27, 2018
| |
|
|
|
|
|
Acquisition-Related Costs |
|
|
|
|
|
|
| |
|
U.S. GAAP(As
Reported) |
|
Expense for Initiatives to Reduce Overall Costs
and Improve Operational Profitability |
|
Purchase Accounting Adjustments Related
to Inventory |
|
Severance |
|
Other |
|
Long-term Incentive Plan Accrual Adjustment due
to change in Fiscal 2020 EBITDA estimate |
|
Transition tax and the impact of revaluing
deferred taxes due to the change in the federal tax rate from U.S.
Tax Reform |
|
Non-U.S. GAAP Financial Measures |
|
Gross Profit |
|
$ |
177.7 |
|
|
$ |
— |
|
|
$ |
0.8 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
178.5 |
|
| Gross
Margin (% of sales) |
|
27.0 |
% |
|
— |
% |
|
0.1 |
% |
|
— |
% |
|
— |
% |
|
— |
% |
|
— |
% |
|
27.1 |
% |
| Selling and
Administrative Expenses |
|
$ |
83.3 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(6.0 |
) |
|
$ |
6.0 |
|
|
$ |
— |
|
|
$ |
83.3 |
|
| Selling
and Administrative Expenses (% of sales) |
|
12.6 |
% |
|
— |
% |
|
— |
% |
|
— |
% |
|
(9.1 |
)% |
|
9.1 |
% |
|
— |
% |
|
12.6 |
% |
| Income from
Operations |
|
$ |
90.7 |
|
|
$ |
— |
|
|
$ |
0.8 |
|
|
$ |
— |
|
|
$ |
6.0 |
|
|
$ |
(6.0 |
) |
|
$ |
— |
|
|
$ |
91.5 |
|
| Net Income |
|
$ |
20.4 |
|
|
$ |
— |
|
|
$ |
0.7 |
|
|
$ |
— |
|
|
$ |
5.0 |
|
|
$ |
(5.0 |
) |
|
$ |
56.8 |
|
|
$ |
77.9 |
|
| Diluted Earnings per
Share |
|
$ |
0.54 |
|
|
$ |
— |
|
|
$ |
0.02 |
|
|
$ |
— |
|
|
$ |
0.13 |
|
|
$ |
(0.13 |
) |
|
$ |
1.51 |
|
|
$ |
2.07 |
|
| |
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| |
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|
|
Reconciliation of EBITDA and Adjusted
EBITDA to Net Income
| |
Three Months Ended |
|
Nine Months Ended |
| |
January 26,
2019 |
|
January 27,
2018 |
|
January 26,
2019 |
|
January 27,
2018 |
|
Net Income |
$ |
30.7 |
|
|
$ |
(24.3 |
) |
|
$ |
69.0 |
|
|
$ |
20.4 |
|
| Income
Tax Expense (Benefit) |
(3.0 |
) |
|
63.4 |
|
|
4.5 |
|
|
72.6 |
|
| Interest
Expense, Net |
3.2 |
|
|
0.3 |
|
|
5.0 |
|
|
0.3 |
|
|
Amortization of Intangibles |
5.5 |
|
|
2.0 |
|
|
11.1 |
|
|
3.7 |
|
|
Depreciation |
6.7 |
|
|
5.1 |
|
|
19.5 |
|
|
16.3 |
|
| EBITDA |
43.1 |
|
|
46.5 |
|
|
109.1 |
|
|
113.3 |
|
| Expense
for Initiatives to Reduce Overall Costs and Improve Operational
Profitability |
2.6 |
|
|
— |
|
|
5.8 |
|
|
— |
|
|
Acquisition-related Costs - Purchase Accounting Adjustments Related
to Inventory |
3.0 |
|
|
— |
|
|
5.6 |
|
|
0.8 |
|
|
Acquisition-related Costs - Severance |
0.1 |
|
|
— |
|
|
1.5 |
|
|
— |
|
|
Acquisition-related Costs - Other |
0.7 |
|
|
— |
|
|
8.2 |
|
|
6.0 |
|
| Long-term
Incentive Plan Accrual Adjustment due to change in Fiscal 2020
EBITDA estimate |
— |
|
|
(6.0 |
) |
|
7.4 |
|
|
(6.0 |
) |
| Adjusted EBITDA |
$ |
49.5 |
|
|
$ |
40.5 |
|
|
$ |
137.6 |
|
|
$ |
114.1 |
|
|
|
|
|
|
|
Reconciliation of Free Cash Flow to Net
Income
| |
Three Months Ended |
|
Nine Months Ended |
| |
January 26,2019 |
|
January 27,2018 |
|
January 26,2019 |
|
January 27,2018 |
|
Net Income |
$ |
30.7 |
|
|
$ |
(24.3 |
) |
|
$ |
69.0 |
|
|
$ |
20.4 |
|
|
Amortization of Intangibles |
5.5 |
|
|
2.0 |
|
|
11.1 |
|
|
3.7 |
|
|
Depreciation |
6.7 |
|
|
5.1 |
|
|
19.5 |
|
|
16.3 |
|
| Purchases
of Property, Plant and Equipment |
(8.4 |
) |
|
(18.3 |
) |
|
(37.0 |
) |
|
(34.7 |
) |
| Free Cash Flow |
$ |
34.5 |
|
|
$ |
(35.5 |
) |
|
$ |
62.6 |
|
|
$ |
5.7 |
|
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