Methode Electronics(US:MEI)2026-03-05 21:44Financial Performance - Net sales decreased by $6.2 million, or 2.6%, to $233.7 million for the three months ended January 31, 2026, compared to $239.9 million for the same period in 2025[130]. - Net sales decreased by $69.9 million, or 8.8%, to $721.1 million for the nine months ended January 31, 2026, compared to $791.0 million for the same period in 2025[131]. - Net loss was $15.9 million in the three months ended January 31, 2026, compared to a net loss of $14.4 million in the same period of 2025[145]. Gross Profit and Margins - Gross profit margin was 16.6% of net sales for the three months ended January 31, 2026, down from 17.2% for the same period in 2025[134]. - Gross profit margin was 18.0% of net sales for the nine months ended January 31, 2026, compared to 18.2% for the same period in 2025[135]. - Gross profit in the Automotive segment decreased by $1.1 million, or 36.7%, to $1.9 million in the three months ended January 31, 2026, with gross profit margins dropping to 1.8% from 2.6%[148]. - Industrial segment gross profit increased by $1.6 million, or 4.5%, to $36.8 million in the three months ended January 31, 2026, with gross profit margins at 30.0%[156]. - Gross profit for the Interface segment decreased by $2.4 million, or 82.8%, to $0.5 million in the three months ended January 31, 2026, with gross profit margins dropping to 10.0% from 23.6%[162]. Expenses - Selling and administrative expenses increased by $1.4 million, or 3.7%, to $39.1 million for the three months ended January 31, 2026[136]. - Selling and administrative expenses decreased by $11.8 million, or 9.3%, to $114.7 million for the nine months ended January 31, 2026[137]. - Income tax expense was $2.8 million with a -21.4% effective tax rate in the three months ended January 31, 2026, compared to $6.2 million with a -75.6% effective tax rate in the same period of 2025[143]. Segment Performance - Net sales in the Automotive segment decreased by $9.5 million, or 8.2%, to $106.2 million in the three months ended January 31, 2026, compared to $115.7 million in the same period of 2025[147]. - The Automotive segment reported a loss from operations of $12.7 million in the three months ended January 31, 2026, compared to a loss of $9.0 million in the same period of 2025[151]. - Industrial segment net sales increased by $10.6 million, or 9.5%, to $122.5 million in the three months ended January 31, 2026, compared to $111.9 million in the same period of 2025[154]. - Industrial segment income from operations increased by $17.2 million, or 27.0%, to $81.0 million in the nine months ended January 31, 2026, compared to $63.8 million in the same period of 2025[159]. - Interface segment net sales decreased by $7.3 million, or 59.3%, to $5.0 million in the three months ended January 31, 2026, compared to $12.3 million in the same period of the previous year[161]. - Income from operations for the Interface segment decreased by $2.1 million, or 95.5%, to $0.1 million in the three months ended January 31, 2026, compared to $2.2 million in the same period of the previous year[164]. Cash Flow and Financial Position - As of January 31, 2026, the company had $133.7 million in cash and cash equivalents, with $71.3 million held in subsidiaries outside the U.S.[167]. - The company had net cash provided by operating activities of $33.1 million in the nine months ended January 31, 2026, compared to net cash used of $9.0 million in the same period of the previous year[177]. - Net cash used by investing activities was $13.6 million in the nine months ended January 31, 2026, down from $26.7 million in the same period of the previous year[178]. - The company paid cash dividends of $6.5 million in the nine months ended January 31, 2026, compared to $15.3 million in the same period of the previous year[180]. - As of January 31, 2026, the outstanding balance under the revolving credit facility was $302.6 million in euro-denominated borrowings and $40.0 million in U.S. denominated borrowings[174]. - The company anticipates compliance with financial covenants in the Amended Credit Agreement, but future compliance is uncertain due to various risk factors[175]. - The company has a share buyback authorization of up to $200.0 million, with no shares purchased under this authorization as of January 31, 2026[168]. Supply Chain Challenges - The company continues to face supply chain challenges, particularly in procuring automotive-grade semiconductors, which may adversely affect financial results[124].