Methode Electronics(US:MEI)2026-03-05 21:32Financial Performance - Net sales for Q3 fiscal 2026 were $233.7 million, a decrease of 2.6% compared to $239.9 million in Q3 fiscal 2025, primarily due to lower sales volumes in the Automotive and Interface segments [4]. - Gross profit was $38.8 million, down from $41.3 million in the prior-year quarter, attributed to lower sales volume and product mix in the Automotive and Interface segments [5]. - Net loss for the quarter was $15.9 million, or 6.8% of net sales, compared to a loss of $14.4 million, or 6.0% of net sales in the same quarter of fiscal 2025 [6]. - Adjusted EBITDA for Q3 fiscal 2026 was $7.3 million, down from $12.3 million in the same quarter of fiscal 2025, reflecting a margin decrease from 4.8% to 3.1% [8]. - Net sales for the three months ended January 31, 2026, were $233.7 million, a decrease of 2.6% compared to $239.9 million for the same period in 2025 [25]. - Gross profit for the nine months ended January 31, 2026, was $130.0 million, down from $143.8 million in the prior year, reflecting a gross margin decline [25]. - Net loss for the three months ended January 31, 2026, was $15.9 million, compared to a net loss of $14.4 million for the same period in 2025 [25]. - Adjusted EBITDA for the nine months ended January 31, 2026, was $40.6 million, representing 5.6% of net sales, compared to 6.2% in the prior year [32]. - For the three months ended January 31, 2026, the company reported a net loss of $15.9 million, with a diluted loss per share of $0.45, compared to a net loss of $14.4 million and a diluted loss per share of $0.41 for the same period last year [35]. - For the nine months ended January 31, 2026, the company reported a net loss of $36.1 million, with a diluted loss per share of $1.02, compared to a net loss of $34.3 million and a diluted loss per share of $0.97 for the same period last year [35]. - The adjusted non-U.S. GAAP net loss for the three months ended January 31, 2026, was $13.1 million, with a diluted loss per share of $0.37 [35]. - The company’s adjusted non-U.S. GAAP net loss for the nine months ended January 31, 2026, was $27.6 million, with a diluted loss per share of $0.78 [35]. Guidance and Strategic Actions - The company narrowed its fiscal 2026 full-year net sales guidance to a range of $950 million to $1 billion, reflecting improved visibility [11]. - Adjusted EBITDA guidance for fiscal 2026 was lowered to a range of $58 million to $62 million [11]. - The company finalized the sale of its Harwood Heights facility and completed the sale of its dataMate business for $16 million, indicating a strategic focus on core growth areas [6]. - The company continues to focus on restructuring and transformation strategies to improve financial performance moving forward [35]. Cash Flow and Debt - Net cash provided by operating activities was $15.4 million for the quarter, down from $28.1 million in the same quarter of fiscal 2025 [10]. - Debt increased to $340.9 million at the end of the quarter, up from $317.6 million at the end of fiscal 2025, driven by increased borrowings and foreign currency translation [9]. - Cash and cash equivalents increased to $133.7 million as of January 31, 2026, from $103.6 million at the end of the previous period [29]. - Total current assets rose to $585.3 million as of January 31, 2026, compared to $559.9 million on May 3, 2025 [27]. - Long-term debt increased to $340.7 million as of January 31, 2026, from $317.4 million on May 3, 2025 [27]. - Total liabilities increased to $631.3 million as of January 31, 2026, compared to $612.5 million on May 3, 2025 [27]. - Free cash flow for the nine months ended January 31, 2026, was $16.5 million, compared to a negative $41.5 million in the prior year [33]. Costs and Valuation - The company incurred transformation costs of $0.9 million in the latest quarter, while restructuring costs and asset impairment charges amounted to $0.4 million [35]. - The company recognized a valuation allowance on deferred tax assets of $2.4 million in the latest quarter, contributing $0.07 to the adjusted non-U.S. GAAP results [35]. - The company achieved a valuation allowance on deferred tax assets of $6.4 million for the nine months, contributing $0.18 to the adjusted non-U.S. GAAP results [35]. - A partial write-off of unamortized debt issuance costs of $0.6 million was recorded, contributing $0.01 to the adjusted results for the nine months [35]. - The company reported transformation costs of $7.9 million for the nine months ended January 31, 2026, which impacted the overall financial performance [35]. - Cash dividends per share for the nine months ended January 31, 2026, were $0.17, down from $0.42 in the prior year [25]. Segment Performance - The Automotive segment experienced a net sales decline of 8.2% due to reduced electric vehicle volumes, while the Industrial segment saw a 9.5% increase in net sales driven by higher sales volumes for lighting products [12].