[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) The company navigated significant operational challenges in fiscal 2025, impacting quarterly and full-year results while maintaining a focus on strategic transformation [Management Commentary & Strategic Highlights](index=1&type=section&id=Management%20Commentary%20%26%20Strategic%20Highlights) Management details its transformation progress amid significant challenges, including a major customer ramp-down and inventory write-downs - The company is undergoing a transformation, focusing on improving operational execution to drive long-term value[3](index=3&type=chunk) - Experienced significant challenges, including a ramp-down in demand from a major EV customer and **inventory write-downs** for canceled or delayed programs[3](index=3&type=chunk) - Achieved **record sales for data center power products**, finishing the year at over **$80 million**[3](index=3&type=chunk) - Generated **strong free cash flow** for the second consecutive quarter, enabling debt reduction[3](index=3&type=chunk) - Corporate actions include reducing the board size, relocating headquarters, reducing the dividend, and continuing a portfolio review[5](index=5&type=chunk) - For fiscal 2026, the company expects to **double its EBITDA** despite an anticipated **$100 million sales decline** due to lower EV demand[5](index=5&type=chunk) [Fourth Quarter Fiscal 2025 Performance](index=1&type=section&id=Fourth%20Quarter%20Fiscal%202025%20Performance) Fourth quarter results show decreased net sales to $257.1 million and a net loss of $28.3 million, impacted by inventory adjustments but with improved free cash flow Q4 Fiscal 2025 Key Financial Metrics | Metric | Q4 FY2025 | Q4 FY2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $257.1M | $277.3M | (7.3%) | | Loss from Operations | $(23.6)M | $(61.5)M | Improved | | Net Loss | $(28.3)M | $(57.3)M | Improved | | Diluted Loss per Share | $(0.80) | $(1.63) | Improved | | Adjusted Net Loss | $(27.4)M | $(7.9)M | Worsened | | Adjusted Diluted Loss per Share | $(0.77) | $(0.23) | Worsened | | Free Cash Flow | $26.3M | $15.8M | +66.5% | - The quarter's pre-tax loss included **$15.2 million of unplanned inventory adjustments**, primarily related to materials for reduced, delayed, or canceled programs[3](index=3&type=chunk)[4](index=4&type=chunk) - Total debt was reduced to **$317.6 million** from $327.9 million in the previous quarter, and net debt decreased to **$214.0 million** from $224.1 million[4](index=4&type=chunk)[10](index=10&type=chunk) [Full Year Fiscal 2025 Performance](index=3&type=section&id=Full%20Year%20Fiscal%202025%20Performance) For fiscal year 2025, net sales were $1,048.1 million, down 6.0%, driven by lower Automotive volumes partially offset by record Industrial sales Full Year Fiscal 2025 Key Financial Metrics | Metric | FY 2025 (53 wks) | FY 2024 (52 wks) | Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,048.1M | $1,114.5M | (6.0%) | | Loss from Operations | $(23.9)M | $(112.0)M | Improved | | Net Loss | $(62.6)M | $(123.3)M | Improved | | Diluted Loss per Share | $(1.77) | $(3.48) | Improved | | Adjusted Net Loss | $(39.7)M | $(15.0)M | Worsened | | Adjusted EBITDA | $42.5M | $55.3M | (23.1%) | - The decrease in annual sales was mainly due to lower volume in the Automotive segment, partially offset by **record volume in the Industrial segment** from data center power products[12](index=12&type=chunk) - Gross profit was impacted by a **$20.4 million expense for excess and obsolete inventory**, compared to $10.4 million in the prior year[13](index=13&type=chunk) [Segment Performance (Q4 2025)](index=3&type=section&id=Segment%20Performance%20(Q4%202025)) A review of Q4 2025 segment performance highlights strong growth in Industrial, a significant decline in Automotive, and a smaller drop in Interface [Automotive Segment](index=3&type=section&id=Automotive%20Segment) The Automotive segment's net sales fell 22.6% to $112.9 million in Q4 due to a program roll-off, resulting in an operating loss of $33.7 million Automotive Segment Q4 Performance (YoY) | Metric | Q4 FY2025 | Q4 FY2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $112.9M | $145.9M | (22.6%) | | Loss from Operations | $(33.7)M | $(64.9)M | Improved | - The sales decrease was mainly due to lower volume in North America from a center console program roll-off and reduced exterior lighting product sales[15](index=15&type=chunk) [Industrial Segment](index=3&type=section&id=Industrial%20Segment) The Industrial segment delivered strong Q4 growth, with net sales rising 13.1% to $132.6 million, driven by demand for data center products Industrial Segment Q4 Performance (YoY) | Metric | Q4 FY2025 | Q4 FY2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $132.6M | $117.2M | +13.1% | | Income from Operations | $26.2M | $20.0M | +31.0% | | Operating Margin | 19.8% | 17.1% | +270 bps | - The sales increase was primarily driven by **higher demand for power distribution products for data centers**[15](index=15&type=chunk) [Interface Segment](index=3&type=section&id=Interface%20Segment) The Interface segment's net sales declined to $11.6 million in Q4, but operating income remained stable, leading to an improved operating margin Interface Segment Q4 Performance (YoY) | Metric | Q4 FY2025 | Q4 FY2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $11.6M | $14.2M | (18.3%) | | Income from Operations | $1.5M | $1.5M | Unchanged | [Corporate Actions and Future Outlook](index=4&type=section&id=Corporate%20Actions%20and%20Future%20Outlook) The company announced a reduced quarterly dividend and provided its financial guidance for fiscal year 2026 [Dividend Announcement](index=4&type=section&id=Dividend%20Announcement) The Board of Directors approved a reduced quarterly dividend of $0.07 per share, payable on August 1, 2025 - The Board of Directors declared a quarterly dividend of **$0.07 per share**, payable on August 1, 2025, to stockholders of record on July 21, 2025[17](index=17&type=chunk) [Fiscal 2026 Guidance](index=4&type=section&id=Fiscal%202026%20Guidance) For fiscal 2026, the company projects net sales of $900-$1,000 million and EBITDA of $70-$80 million, with a stronger second half expected Fiscal 2026 Guidance | Metric | Guidance Range | | :--- | :--- | | Net Sales | $900M - $1,000M | | EBITDA | $70M - $80M | - The second half of fiscal 2026 is expected to be **stronger than the first half**[18](index=18&type=chunk) - Guidance is subject to risks including tariffs, EV program take rates, cost recovery actions, inflation, and supply chain disruptions[19](index=19&type=chunk) [Consolidated Financial Statements (Unaudited)](index=7&type=section&id=Consolidated%20Financial%20Statements%20(Unaudited)) This section provides the unaudited consolidated statements of operations, balance sheets, and cash flows for fiscal year 2025 [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) This section presents the company's unaudited consolidated statements of operations for the fourth quarter and full fiscal year ended May 3, 2025 Consolidated Statements of Operations (in millions) | | Three Months Ended | Fiscal Year Ended | | :--- | :--- | :--- | | | **May 3, 2025** | **April 27, 2024** | **May 3, 2025** | **April 27, 2024** | | Net sales | $257.1 | $277.3 | $1,048.1 | $1,114.5 | | Gross profit | $19.6 | $35.5 | $163.4 | $178.8 | | Loss from operations | $(23.6) | $(61.5) | $(23.9) | $(112.0) | | Pre-tax loss | $(30.4) | $(63.1) | $(50.1) | $(128.1) | | Net loss | $(28.3) | $(57.3) | $(62.6) | $(123.3) | | Diluted loss per share | $(0.80) | $(1.63) | $(1.77) | $(3.48) | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) This section provides the company's unaudited consolidated balance sheets as of May 3, 2025, and April 27, 2024 Consolidated Balance Sheet Highlights (in millions) | | May 3, 2025 | April 27, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $103.6 | $161.5 | | Total current assets | $559.9 | $637.7 | | Total assets | $1,305.8 | $1,403.5 | | **Liabilities & Equity** | | | | Total current liabilities | $233.2 | $231.4 | | Long-term debt | $317.4 | $330.7 | | Total liabilities | $612.5 | $637.5 | | Total shareholders' equity | $693.3 | $766.0 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section details cash flows from operating, investing, and financing activities for the fiscal year ended May 3, 2025 Consolidated Statement of Cash Flows Highlights (in millions) | | Fiscal Year Ended May 3, 2025 | Fiscal Year Ended April 27, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $26.4 | $47.5 | | Net cash used in investing activities | $(32.9) | $(17.5) | | Net cash used in financing activities | $(58.9) | $(18.9) | | (Decrease) increase in cash | $(57.9) | $4.5 | | Cash and cash equivalents at end of period | $103.6 | $161.5 | [Reconciliation of Non-GAAP Measures](index=10&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) This section provides detailed reconciliations of GAAP results to non-GAAP measures like Adjusted EBITDA, Free Cash Flow, and Adjusted Net Loss [Reconciliation of EBITDA, Free Cash Flow, and Net Debt](index=10&type=section&id=Reconciliation%20of%20EBITDA%2C%20Free%20Cash%20Flow%2C%20and%20Net%20Debt) This section reconciles GAAP Net Loss to Adjusted EBITDA and presents calculations for Free Cash Flow and Net Debt Adjusted EBITDA Reconciliation (in millions) | | Q4 FY2025 | Q4 FY2024 | FY 2025 | FY 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Loss | $(28.3) | $(57.3) | $(62.6) | $(123.3) | | EBITDA | $(8.9) | $(44.0) | $30.4 | $(53.5) | | Adjusted EBITDA | $(7.1) | $5.3 | $42.5 | $55.3 | Free Cash Flow and Net Debt (in millions) | Metric | Q4 FY2025 | Q4 FY2024 | May 3, 2025 | Feb 1, 2025 | | :--- | :--- | :--- | :--- | :--- | | Free Cash Flow | $26.3 | $15.8 | - | - | | Net Debt | - | - | $214.0 | $224.1 | [Reconciliation of Adjusted Operating Loss, Net Loss, and EPS](index=11&type=section&id=Reconciliation%20of%20Adjusted%20Operating%20Loss%2C%20Net%20Loss%2C%20and%20EPS) This section reconciles GAAP operating loss, pre-tax loss, and net loss to their adjusted (non-GAAP) counterparts for Q4 and the full fiscal year Q4 2025 GAAP to Non-GAAP Reconciliation (in millions, except per share) | Metric | U.S. GAAP | Non-U.S. GAAP (Adjusted) | | :--- | :--- | :--- | | Loss from operations | $(23.6) | $(21.6) | | Pre-tax loss | $(30.4) | $(28.6) | | Net loss | $(28.3) | $(27.4) | | Diluted loss per share | $(0.80) | $(0.77) | Full Year 2025 GAAP to Non-GAAP Reconciliation (in millions, except per share) | Metric | U.S. GAAP | Non-U.S. GAAP (Adjusted) | | :--- | :--- | :--- | | Loss from operations | $(23.9) | $(12.5) | | Pre-tax loss | $(50.1) | $(38.0) | | Net loss | $(62.6) | $(39.7) | | Diluted loss per share | $(1.77) | $(1.12) |

Core Insights - Methode Electronics reported a net loss of $28.3 million for the fourth quarter of fiscal 2025, an improvement from a loss of $57.3 million in the same quarter of fiscal 2024, primarily due to a significant goodwill impairment in the prior year [7][14]. - The company experienced a decrease in net sales to $257.1 million, down from $277.3 million in the same quarter of fiscal 2024, largely attributed to lower volume in the Automotive segment [4][12]. - Despite challenges, Methode achieved record sales in data center power products, exceeding $80 million for the fiscal year, and reported strong free cash flow of $26.3 million for the quarter [3][10]. Financial Performance - For fiscal 2025, Methode's total net sales were $1,048.1 million, a decline from $1,114.5 million in fiscal 2024, with the Automotive segment's performance negatively impacting overall sales [12]. - The loss from operations for the fourth quarter was $23.6 million, an improvement from a loss of $61.5 million in the same quarter of the previous year [5][13]. - The adjusted net loss for the fourth quarter was $27.4 million, compared to a loss of $7.9 million in the same quarter of fiscal 2024 [7][14]. Segment Performance - The Automotive segment reported net sales of $112.9 million, down 22.6% from $145.9 million, primarily due to program roll-offs and lower demand [11]. - The Industrial segment saw an increase in net sales to $132.6 million, up 13.1% from $117.2 million, driven by higher demand for power distribution products for data centers [11]. - Electric and hybrid vehicle applications accounted for 20% of net sales, indicating a significant reliance on this segment despite recent demand challenges [5]. Cash Flow and Debt Management - Net cash provided by operating activities was $35.4 million for the quarter, an increase from $24.9 million in the same quarter of fiscal 2024 [10]. - Free cash flow reached $26.3 million, marking the highest quarter since fiscal 2023, attributed to improvements in working capital [10]. - Total debt decreased to $317.6 million from $327.9 million in the previous quarter, with net debt also reduced to $214.0 million [9]. Future Outlook - For fiscal 2026, Methode expects net sales to range between $900 million and $1,000 million, with EBITDA projected between $70 million and $80 million [17]. - The company anticipates doubling its EBITDA in fiscal 2026 despite an expected decline of approximately $100 million in sales due to lower demand from electric vehicle customers [3][17].

Company Overview - Methode Electronics, Inc. is a leading global supplier of custom-engineered solutions for user interface, lighting system, and power distribution applications [5] - The company operates in various end markets including transportation, cloud computing infrastructure, construction equipment, and consumer appliances [6] - Methode's business is segmented into Automotive, Industrial, and Interface [6] Financial Results Announcement - The company will release its fourth quarter and full year fiscal 2025 results for the period ended May 3, 2025, on July 9, 2025, after market close [1] - A conference call and webcast will be held on July 10, 2025, at 10:00 a.m. CDT to review financial and operational highlights [2] - The call will be led by President and CEO Jon DeGaynor and CFO Laura Kowalchik [2] Participation and Replay Information - To participate in the conference call, dial 888-506-0062 (domestic) or 973-528-0011 (international) at least five minutes prior to the start [3] - A replay of the teleconference will be available until July 24, 2025, by dialing 877-481-4010 with passcode 52484 [4] - A webcast replay will also be accessible on the company's website [4]

Core Insights - Methode Electronics, Inc.'s Grakon business unit has been recognized as a top-performing supplier by PACCAR, a manufacturer of Kenworth and Peterbilt trucks [1][4] - The recognition is part of PACCAR's Supplier Performance Management (SPM) Program, which evaluates suppliers based on product development, operations, aftermarket support, and alignment with PACCAR's business objectives [2] - Grakon has played a significant role in multiple PACCAR launches, providing advanced lighting solutions for various truck models [3] Company Overview - Grakon, LLC specializes in the design, development, and manufacture of advanced lighting systems, controls, and components for OEM manufacturers in heavy trucks, buses, rail, commercial electric vehicles, and power sports markets [5] - Grakon operates as a business unit of Methode Electronics, Inc., which is a global supplier of custom-engineered solutions with a presence in North America, Europe, the Middle East, and Asia [5]

Core Insights - Methode Electronics, Inc.'s Grakon business unit has been recognized as a top-performing supplier by PACCAR, a manufacturer of Kenworth and Peterbilt trucks [1][4] - The recognition is part of PACCAR's Supplier Performance Management (SPM) Program, which evaluates suppliers based on product development, operations, aftermarket support, and alignment with PACCAR's business objectives [2] - Grakon has played a significant role in multiple PACCAR launches, providing advanced interior and exterior lighting solutions [3] Company Overview - Grakon, LLC specializes in the design, development, and manufacture of advanced lighting systems, controls, and components for various markets, including heavy trucks, buses, and commercial electric vehicles [5] - Grakon operates as a business unit of Methode Electronics, Inc., which is a global supplier of custom-engineered solutions with a presence in North America, Europe, the Middle East, and Asia [5]

Methode Electronics, Inc. (NYSE:MEI) Q3 2025 Earnings Conference Call March 6, 2025 11:00 AM ET Company Participants Robert Cherry - Investor Relations Jonathan DeGaynor - President and Chief Executive Officer Laura Kowalchik - Chief Financial Officer Conference Call Participants John Franzreb - Sidoti Luke Junk - Baird Gary Prestopino - Barrington Research Operator Good day, everyone. Welcome to the Methode Electronics Third Quarter Fiscal 2025 Results Conference Call. [Operator Instructions] I would now l ...

Methode Electronics, Inc. Earnings Presentation Third Quarter Fiscal 2025 March 6, 2025 Forward-Looking Statements This presentation includes 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 re ...

Financial Performance - Net sales decreased by $19.6 million, or 7.6%, to $239.9 million in the three months ended February 1, 2025, compared to $259.5 million in the same period last year [129]. - Net sales for the nine months ended February 1, 2025, decreased by $46.2 million, or 5.5%, to $791.0 million compared to $837.2 million in the prior year [130]. - Net sales in the Automotive segment decreased by $24.0 million, or 17.2%, to $115.7 million in the three months ended February 1, 2025, compared to $139.7 million in the same period last year [145]. - Net loss was $14.4 million in the three months ended February 1, 2025, compared to $11.6 million in the same period last year [143]. - Income tax expense was $6.2 million with a -75.6% effective tax rate in the three months ended February 1, 2025, compared to $1.1 million with a -10.5% effective tax rate in the same period last year [141]. Cost and Expenses - Cost of products sold decreased by $23.9 million, or 10.7%, to $198.6 million in the three months ended February 1, 2025, representing 82.8% of net sales [131]. - Selling and administrative expenses increased by $3.8 million, or 11.2%, to $37.7 million in the three months ended February 1, 2025, representing 15.7% of net sales [134]. - Interest expense, net increased to $5.5 million in the three months ended February 1, 2025, compared to $5.0 million in the same period last year [138]. Profitability - Gross profit margin increased to 17.2% of net sales in the three months ended February 1, 2025, compared to 14.3% in the same period last year [133]. - Gross profit in the Automotive segment decreased by $1.5 million, or 33.3%, to $3.0 million in the three months ended February 1, 2025, with gross profit margins decreasing to 2.6% [149]. - Industrial segment gross profit increased by $4.9 million, or 16.2%, to $35.2 million in the three months ended February 1, 2025, with gross profit margins increasing to 31.5% [156]. - Interface segment gross profit increased by $0.7 million, or 31.8%, to $2.9 million in the three months ended February 1, 2025, with gross profit margins increasing to 23.6% [163]. - Interface segment gross profit increased by $3.0 million, or 39.0%, to $10.7 million for the nine months ended February 1, 2025, compared to $7.7 million for the same period in 2024 [164]. - Gross profit margins improved to 26.6% in the nine months ended February 1, 2025, up from 19.4% in the nine months ended January 27, 2024 [164]. Segment Performance - Automotive segment loss from operations improved to $9.0 million in the three months ended February 1, 2025, compared to $11.0 million in the same period last year [151]. - Industrial segment net sales increased by $4.8 million, or 4.5%, to $111.9 million in the three months ended February 1, 2025, compared to $107.1 million in the same period last year [154]. - Interface segment net sales decreased by $0.4 million, or 3.1%, to $12.3 million in the three months ended February 1, 2025, compared to $12.7 million in the same period last year [161]. - Income from operations for the Interface segment rose by $3.4 million, or 63.0%, to $8.8 million for the nine months ended February 1, 2025, compared to $5.4 million for the same period in 2024 [165]. Cash Flow and Financial Position - As of February 1, 2025, the company had $103.8 million in cash and cash equivalents, with $71.4 million held in subsidiaries outside the U.S. [170]. - Net cash used in operating activities was $9.0 million for the nine months ended February 1, 2025, a decrease from net cash provided of $22.6 million for the same period in 2024 [177]. - Net cash used in investing activities was $26.7 million for the nine months ended February 1, 2025, compared to $39.0 million for the same period in 2024 [178]. - The company paid cash dividends of $15.3 million in the nine months ended February 1, 2025, compared to $15.0 million in the same period in 2024 [179]. - The outstanding balance under the revolving credit facility was $285.0 million in euro-denominated borrowings and $45.0 million in U.S. denominated borrowings as of February 1, 2025 [174]. - The company anticipates compliance with financial covenants in the Amended Credit Agreement, but future compliance is uncertain due to various risk factors [175]. Challenges and Strategic Decisions - The company continues to face challenges from global supply chain disruptions, including increased material and logistics costs [126]. - The adoption of electric vehicles (EVs) has been slower than anticipated, impacting the company's financial condition and results of operations [124]. - The company is monitoring the implications of new tariffs, including 25% tariffs on products from Canada and Mexico, which could affect margins and customer demand [121]. - The company has initiated the discontinuation of the Dabir business, which accounted for all of the Medical segment's financial results [167]. - The company recognized a goodwill impairment of $56.5 million in the Automotive segment in the nine months ended January 27, 2024 [136].

Core Insights - Methode Electronics reported a net sales of $239.9 million for Q3 fiscal 2025, a decrease from $259.5 million in the same quarter of fiscal 2024, primarily due to lower automotive segment volumes [4][6] - The company experienced a net loss of $14.4 million or $0.41 per diluted share, compared to a net loss of $11.6 million or $0.33 per diluted share in the same quarter of the previous year [6][7] - Despite challenges in the automotive market, Methode reaffirmed its guidance for profitable organic sales growth in fiscal 2026 based on customer forecasts [3][11] Financial Performance - Net sales decreased by $19.6 million year-over-year, with a notable drop in the Automotive segment, which was partially offset by higher sales in the Industrial segment driven by power products for data centers [4][6] - Gross profit increased to $41.3 million from $37.0 million in the prior year, attributed to improved operational execution and product sales mix [5][25] - The adjusted loss from operations improved to $1.3 million from $2.9 million in the same quarter of fiscal 2024, excluding transformation costs [5][7] Cash Flow and Debt - The company generated positive free cash flow of $19.6 million, an increase from $12.2 million in the same quarter of fiscal 2024, due to proactive management of accounts receivable and inventory levels [10][36] - Total debt at the end of the quarter was $327.9 million, down from $330.9 million at the end of fiscal 2024, with net debt increasing to $224.1 million from $169.4 million [9][36] Segment Performance - The Automotive segment reported net sales of $115.7 million, down 17.2% from $139.7 million, primarily due to lower volumes related to EV lighting program roll-offs [13] - The Industrial segment saw an increase in net sales to $111.9 million, up 4.5% driven by demand for power distribution products for data centers [13] - The Interface segment's net sales slightly decreased to $12.3 million, with an increase in income from operations attributed to product sales mix [13] Management Strategy - The company is in the process of launching 53 new programs over two years, with 20 already launched this fiscal year and 33 more expected in the next five quarters [3][11] - Management emphasized a focus on cost control and operational metrics, alongside rebuilding the executive team with experienced leaders [3][11]

Core Insights - Methode Electronics, Inc. has appointed Brad Corrodi as Chief Strategy Officer effective March 10, 2025, bringing over 30 years of strategic, investment, and operational experience to the company [1][2][3] - The appointment is part of Methode's efforts to reshape its future, focusing on organic growth opportunities and potential M&A activities, particularly in expanding its power solutions enterprise into new markets [2][3] Company Overview - Methode Electronics, Inc. is a leading global supplier of custom-engineered solutions with operations in North America, Europe, the Middle East, and Asia, specializing in mechatronic products for OEMs [4][5] - The company serves various end markets, including transportation, cloud computing infrastructure, construction equipment, and consumer appliances, and is organized into segments: Automotive, Industrial, and Interface [5]