Methode Electronics, Inc. Reports Fiscal 2025 Third Quarter Financial Results

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]