Methode Electronics, Inc. (NYSE: MEI), a leading
global supplier of custom-engineered solutions for user interface,
LED lighting and power distribution applications, today announced
financial results for the fourth quarter and full year of fiscal
2023 ended April 29, 2023.
Fiscal Fourth Quarter 2023 Highlights
- Net sales were $301.2 million
- Electric and hybrid vehicle applications were 23 percent of net
sales, a record on a dollar basis
- Net income was $8.1 million, or $0.22 per diluted share
- Net cash provided by operating activities was $49.0
million
- Company was awarded programs with expected annual sales of over
$250 million
- Company purchased 191,722 shares of its common stock for $8.5
million
Management CommentsPresident and Chief
Executive Officer Donald W. Duda said, “Methode had strong sales in
the quarter led by our lighting and power distribution solutions,
and our EV application sales set another record. Material cost
inflation continues to significantly challenge our margins, but we
were still able to deliver strong free cash flow. The main
highlight of the quarter was new awards of over $250 million, with
over 80% being in EV applications. We have now won $600 million in
EV awards over the past three years."
Mr. Duda added, "As our business continues to transition away
from user interface towards more lighting and power solutions, our
fiscal 2024 will see significant investment to support over 20 new
program launches. This transition investment combined with the
impact of legacy program roll offs will cause us to see lower
earnings in fiscal 2024. However, the strong award pipeline along
with an expected rebound in the commercial vehicle, data center and
e-bike markets will position us to deliver significant organic
sales and earnings growth in fiscal 2025 over fiscal 2024.”
Consolidated Fiscal Fourth Quarter 2023 Financial
ResultsMethode's net sales were $301.2 million, up 4.3%
compared to $288.7 million in the same quarter of fiscal 2022. The
fiscal 2023 fourth quarter’s net sales included an unfavorable
foreign currency impact of $7.7 million. Favorably impacting net
sales was $2.5 million of material spot buy and premium freight
cost recovery, which compared to $7.0 million in the prior year
quarter. Excluding the foreign currency and cost recovery impacts,
net sales were up 8.8% compared to the same quarter of fiscal 2022.
The increase was mainly the result of higher sales in the
Industrial segment driven by lighting solutions for commercial
vehicles and power distribution solutions for electric
vehicles.
Income from operations was $8.5 million or 2.8% of net sales,
compared to $14.6 million or 5.1% of net sales in the same quarter
of fiscal 2022. The decrease was primarily due to acquisition costs
from the Nordic Lights transaction. The fiscal 2023 fourth
quarter’s income from operations included an unfavorable foreign
currency impact of $1.6 million. Adjusted income from operations, a
non-GAAP financial measure, was $15.8 million, up from $14.6
million in the same quarter of fiscal 2022. The fiscal 2023 fourth
quarter adjusted income from operations excluded expenses of $6.8
million for acquisition-related costs and $0.5 million related to
the reorganization of a foreign subsidiary.
Other income, net was $0.7 million, compared to $3.2 million in
the same quarter of fiscal 2022. Net foreign exchange remeasurement
loss was $4.0 million, compared to $0.2 million in the same quarter
of fiscal 2022. The net foreign exchange remeasurement loss
included $2.1 million related to the reorganization of a foreign
subsidiary. International government assistance was $5.1 million,
compared to $2.9 million in the same quarter of fiscal 2022. The
government assistance was primarily related to grants for
maintaining certain employment levels as well as COVID-19
assistance in the prior year.
Income tax was a benefit of $0.3 million, compared to an expense
of $1.0 million in the same quarter of fiscal 2022. The fourth
quarter of fiscal 2023 had a net discrete tax event benefit of $9.6
million related to the reorganization of a foreign subsidiary.
Net income was $8.1 million or $0.22 per diluted share, compared
to $16.2 million or $0.43 per diluted share in the same quarter of
fiscal 2022. The fiscal 2023 fourth quarter’s net income included
an unfavorable foreign currency impact of $1.5 million, or $0.04
per diluted share. Adjusted net income, a non-GAAP financial
measure, was $7.7 million, or $0.21 per diluted share, compared to
$16.2 million, or $0.43 per diluted share, in the same quarter of
fiscal 2022. The fiscal 2023 fourth quarter adjusted net income
excluded an expense of $6.6 million, or $0.18 per diluted share,
for acquisition-related costs and a net benefit of $7.0 million, or
$0.19 per diluted share, for a discrete tax event related to the
reorganization of a foreign subsidiary.
EBITDA (Earnings Before Interest, Taxes, Depreciation and
Amortization of Intangibles), a non-GAAP financial measure, was
$21.9 million, compared to $30.8 million in the same quarter of
fiscal 2022. Adjusted EBITDA, a non-GAAP financial measure, was
$31.3 million, compared to $30.8 million in the same quarter of
fiscal 2022. Adjusted EBITDA excluded expenses of $6.8 million for
acquisition-related costs and $2.6 million related to the
reorganization of a foreign subsidiary.
Debt was $306.8 million at the end of the quarter, compared to
$210.5 million at the end of fiscal 2022. Net debt, a non-GAAP
financial measure defined as debt less cash and cash equivalents,
was $149.8 million, compared to $38.5 million at the end of fiscal
2022. The increase in debt and net debt was mainly due to the
Nordic Lights acquisition.
Net cash provided by operating activities was $49.0 million for
the quarter, compared to $42.0 million for the same quarter of
fiscal 2022. Free cash flow, a non-GAAP financial measure defined
as net cash provided by operating activities less purchases of
property, plant, and equipment, was $37.8 million, compared to
$33.6 million in the same quarter of fiscal 2022. The increase was
mainly due to working capital improvements.
As previously announced on June 16, 2022, the board of directors
authorized the purchase of an additional $100 million of the
company’s outstanding common stock to the authorization from March
2021, bringing the total program authorization to $200 million. The
company purchased and retired 191,722 shares of stock for $8.5
million in the quarter. As of April 29, 2023, a total of 2,790,375
shares have been purchased at a total cost of $119.3 million since
the commencement of the share buyback program.
Segment Fiscal Fourth Quarter 2023 Financial
ResultsComparing the Automotive segment's quarter to the
same quarter of fiscal 2022,
- Net sales were $186.2 million, down $8.1 million or 4.2% from
$194.3 million. The segment net sales were unfavorably impacted by
$5.1 million of foreign currency translation. Favorably impacting
net sales was $2.0 million of material spot buy and premium freight
cost recovery, which compared to $7.0 million in the prior year
quarter. Net of the foreign currency translation and cost recovery
impacts, net sales increased by $2.0 million or 1.1% due to higher
volume in EMEA and Asia, partially offset by lower volume in North
America. The North America decline was mainly due to the roll-off
of a major program.
- Income from operations was $10.2 million, down $7.0 million or
40.7% from $17.2 million due to inflationary pressures on material
and other manufacturing costs. Foreign currency translation was an
unfavorable $0.6 million. Net of the foreign currency translation,
income from operations decreased $6.4 million. Income from
operations was 5.5% of net sales, down from 8.9%.
Comparing the Industrial segment's quarter to the same quarter
of fiscal 2022,
- Net sales were $98.0 million, up $19.1 million or 24.2% from
$78.9 million. The segment net sales were unfavorably impacted by
$2.6 million of foreign currency translation. Net of foreign
currency translation, net sales increased by $21.7 million or 27.5%
driven by lighting for commercial vehicles and power distribution
for electric vehicles.
- Income from operations was $23.4 million, up $13.0 million or
125.0% from $10.4 million primarily due to higher sales volume and
improved manufacturing efficiencies in China related to COVID-19
lockdowns in the prior year, partially offset by higher selling and
administrative expense and unfavorable foreign currency translation
of $0.8 million. Net of the foreign currency translation, income
from operations increased $13.8 million. Income from operations was
23.9% of net sales, up from 13.2%.
Comparing the Interface segment's quarter to the same quarter of
fiscal 2022,
- Net sales were $15.8 million, up $1.9 million from $13.9
million. The increase was mainly due to higher demand for digital
data products.
- Income from operations was $1.3 million, down $1.0 million from
$2.3 million mainly due to the higher material costs. Income from
operations was 8.2% of net sales, down from 16.5%.
Comparing the Medical segment's quarter to the same quarter of
fiscal 2022,
- Net sales were $1.2 million, down $0.4 million from $1.6
million due to lower demand.
- Loss from operations was $1.4 million, compared to a loss of
$0.9 million.
Fiscal 2023Methode's net sales were a record
$1,179.6 million, which included an unfavorable foreign currency
impact of $57.3 million, compared to $1,163.6 million in fiscal
2022. Net sales included $20.9 million of spot buy and premium
freight cost recovery, compared to $22.1 million in fiscal 2022.
Excluding the foreign currency and cost recovery impacts, net sales
were up 6.5% compared to fiscal 2022, primarily due to higher sales
in the Industrial segment.
Net income was $77.1 million, or $2.10 per diluted share,
compared to $102.2 million, or $2.70 per diluted share, in fiscal
2022. The decrease was mainly due to higher selling and
administrative expense, primarily due to acquisition costs, and
inflationary pressures on material and other manufacturing costs,
which were partially offset by lower tax expense and higher sales
volumes. Adjusted net income, a non-GAAP financial measure, was
$76.7 million, or $2.09 per diluted share, compared to $102.2
million, or $2.70 per diluted share, in fiscal 2022. The fiscal
2023 adjusted net income excluded an expense of $6.6 million, or
$0.18 per diluted share, for acquisition-related costs and a net
benefit of $7.0 million, or $0.19 per diluted share, for a discrete
tax event related to the reorganization of a foreign
subsidiary.
EBITDA, a non-GAAP financial measure, was $142.3 million,
compared to $174.6 million in fiscal 2022. Adjusted EBITDA, a
non-GAAP financial measure, was $151.7 million, compared to $174.6
million in fiscal 2022. The fiscal 2023 adjusted EBITDA excluded
expenses of $6.8 million for acquisition-related costs and $2.6
million related to the reorganization of a foreign subsidiary.
Net cash provided by operating activities was $132.8 million for
fiscal 2023, compared to $98.8 million in the prior year. Free cash
flow, a non-GAAP financial measure, was $90.8 million, compared to
$60.8 million in fiscal 2022. The increase was mainly due to lower
working capital requirements, especially inventory, which was
partially offset by higher purchases of property, plant and
equipment.
Nordic Lights Group Corporation Acquisition
UpdateOn February 28, 2023, Methode announced an offer to
acquire Nordic Lights Group Corporation, a premium provider of
high-quality lighting solutions for heavy-duty equipment that
focuses on the mining, construction, forestry, agriculture and
material handling end markets. They manufacture lights for three
main applications: work lights, driving lights and signal
lights.
As of May 11, 2023, a total of 99.4 percent of the share capital
of Nordic Lights has been acquired by Methode for a consideration
for such shares of EUR 131.0 million. The company intends to
acquire the remaining outstanding shares by way of compulsory
redemption proceedings under Finnish law and apply for its
delisting from Nasdaq First North Growth Market Finland, which is
expected to be in the second quarter of fiscal 2024.
Nordic Lights is highly complementary to Methode’s existing LED
lighting and industrial radio remote control businesses and
advances its focus on engineered solutions for OEMs, on industrial
and non-auto transportation markets, and on customer and geographic
diversity. The results from this business will be included in the
Industrial segment. Once the redemption proceedings are completed,
the company expects to provide additional details.
Fiscal 2024 and 2025 Full Year GuidanceFor
fiscal 2024, the company expects net sales to be in the range of
$1,150 to $1,200 million and diluted earnings per share to be in a
range of $1.55 to $1.75. The lower earnings expectations are
largely due to additional costs to support new program launches and
the impact from program roll offs as well as market headwinds in
the higher margin Industrial segment. Both ranges include the
expected positive financial impact from the recent Nordic Lights
Group Corporation acquisition.
For fiscal 2025, the company expects net sales to be in the
range of $1,250 to $1,350 million and income from operations as a
percentage of net sales to be in a range of 11% to 12%. The
midpoint of the net sales guidance for fiscal 2025 represents
approximately 11% organic sales growth from the midpoint of the
fiscal 2024 net sales guidance.
The fiscal 2024 and 2025 guidance is unchanged from the
preliminary guidance provided on June 12, 2023. The guidance does
not include any new acquisition costs and is subject to change due
to a variety of factors including supply chain disruptions,
inflation, global economic instability, successful cost recovery
actions, the successful launch of multiple new programs, the
ultimate take rates on new EV programs, restructuring efforts, and
potential impairments or divestitures.
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, Ronald L. G. Tsoumas, today
at 10:00 a.m. CDT.
To participate in the conference call, please dial 888-506-0062
(domestic) or 973-528-0011 (international) at least five minutes
prior to the start of the event. A simultaneous webcast can be
accessed through the company’s website, www.methode.com, on the
Investors page.
A replay of the teleconference will be available shortly after
the call through July 6, 2023, by dialing 877-481-4010 and
providing passcode 48454. A webcast replay will also be available
through the company’s website, www.methode.com, on the Investors
page.
About Methode Electronics, Inc.Methode
Electronics, Inc. (NYSE: MEI) is a leading global supplier of
custom-engineered solutions with sales, engineering and
manufacturing locations in North America, Europe, Middle East and
Asia. We design, engineer, and produce mechatronic products for
OEMs utilizing our broad range of technologies for user interface,
LED lighting system, power distribution and sensor
applications.
Our solutions are found in the end markets of transportation
(including automotive, commercial vehicle, e-bike, aerospace, bus,
and rail), cloud computing infrastructure, construction equipment,
consumer appliance, and medical devices. Our business is managed on
a segment basis, with those segments being Automotive, Industrial,
Interface and Medical.
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 Selling and
Administrative Expenses, Adjusted Selling and Administrative
Expenses as a Percentage of Sales, EBITDA, Adjusted EBITDA, Net
Debt 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 and
benefits 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 (iii) are commonly used by other companies
in our industry and provide a comparison for investors to the
company’s performance versus its competitors and (iv) otherwise
provide supplemental information that may be useful to investors in
evaluating Methode.
Forward-Looking StatementsThis news 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 news 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 our supply chain, including
semiconductor suppliers; 2) Impact from pandemics, such as the
COVID-19 pandemic; 3) Dependence on the automotive and commercial
vehicle industries; 4) Impact from inflation; 5) Dependence on a
small number of large customers, including one large automotive
customer; 6) Dependence on the availability and price of materials;
7) Risks related to conducting global operations; 8) Ability to
withstand pricing pressures, including price reductions; 9)
Currency fluctuations; 10) Timing and magnitude of costs associated
with restructuring activities; 11) Failure to attract and retain
qualified personnel; 12) Recognition of goodwill and other
intangible asset impairment charges; 13) Timing, quality and cost
of new program launches; 14) International trade disputes resulting
in tariffs and our ability to mitigate tariffs; 15) Adjustments to
compensation expense for performance-based awards; 16) Investment
in programs prior to the recognition of revenue; 17) Ability to
compete effectively; 18) Impact from production delays or cancelled
orders; 19) Ability to withstand business interruptions; 20)
Ability to keep pace with rapid technological changes; 21) Breaches
to our information technology systems; 22) Ability to avoid design
or manufacturing defects; 23) Ability to manage our debt levels and
any restrictions thereunder; 24) Income tax rate fluctuations; 25)
Ability to protect our intellectual property; 26) Ability to
successfully benefit from acquisitions and divestitures; 27) Impact
from climate change and related regulations; 28) Judgments related
to accounting for tax positions; and 29) Costs associated with
environmental, health and safety regulations.
For Methode Electronics, Inc.Robert K.
CherryVice President, Investor
Relationsrcherry@methode.com+1-708-457-4030
|
METHODE ELECTRONICS, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) |
(in millions, except per-share data) |
|
|
|
Three Months Ended |
|
|
Fiscal Year Ended |
|
|
|
April 29, 2023 |
|
|
April 30, 2022 |
|
|
April 29, 2023 |
|
|
April 30, 2022 |
|
Net sales |
|
$ |
301.2 |
|
|
$ |
288.7 |
|
|
$ |
1,179.6 |
|
|
$ |
1,163.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products sold |
|
|
237.9 |
|
|
|
233.8 |
|
|
|
915.5 |
|
|
|
898.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
63.3 |
|
|
|
54.9 |
|
|
|
264.1 |
|
|
|
264.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and administrative
expenses |
|
|
50.1 |
|
|
|
35.6 |
|
|
|
154.9 |
|
|
|
134.1 |
|
Amortization of
intangibles |
|
|
4.7 |
|
|
|
4.7 |
|
|
|
18.8 |
|
|
|
19.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
|
8.5 |
|
|
|
14.6 |
|
|
|
90.4 |
|
|
|
111.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
1.4 |
|
|
|
0.6 |
|
|
|
2.7 |
|
|
|
3.5 |
|
Other income, net |
|
|
(0.7 |
) |
|
|
(3.2 |
) |
|
|
(2.4 |
) |
|
|
(10.3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax income |
|
|
7.8 |
|
|
|
17.2 |
|
|
|
90.1 |
|
|
|
118.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit)
expense |
|
|
(0.3 |
) |
|
|
1.0 |
|
|
|
13.0 |
|
|
|
16.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
8.1 |
|
|
|
16.2 |
|
|
|
77.1 |
|
|
|
102.2 |
|
Net income attributable to
redeemable noncontrolling interest |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
8.1 |
|
|
$ |
16.2 |
|
|
$ |
77.1 |
|
|
$ |
102.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted income per
share attributable to Methode: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.23 |
|
|
$ |
0.44 |
|
|
$ |
2.14 |
|
|
$ |
2.74 |
|
Diluted |
|
$ |
0.22 |
|
|
$ |
0.43 |
|
|
$ |
2.10 |
|
|
$ |
2.70 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends per share |
|
$ |
0.14 |
|
|
$ |
0.14 |
|
|
$ |
0.56 |
|
|
$ |
0.56 |
|
|
METHODE ELECTRONICS, INC. AND SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(in millions, except share and per-share
data) |
|
|
|
April 29, 2023 |
|
|
April 30, 2022 |
|
ASSETS |
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
157.0 |
|
|
$ |
172.0 |
|
Accounts receivable, net |
|
|
314.3 |
|
|
|
273.3 |
|
Inventories |
|
|
159.7 |
|
|
|
158.5 |
|
Income tax receivable |
|
|
12.9 |
|
|
|
8.3 |
|
Prepaid expenses and other current assets |
|
|
20.5 |
|
|
|
16.9 |
|
Total current assets |
|
|
664.4 |
|
|
|
629.0 |
|
Long-term assets: |
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
220.3 |
|
|
|
197.0 |
|
Goodwill |
|
|
301.9 |
|
|
|
233.0 |
|
Other intangible assets, net |
|
|
256.7 |
|
|
|
207.7 |
|
Operating lease right-of-use assets, net |
|
|
28.4 |
|
|
|
20.0 |
|
Deferred tax assets |
|
|
33.6 |
|
|
|
36.8 |
|
Pre-production costs |
|
|
36.1 |
|
|
|
27.2 |
|
Other long-term assets |
|
|
37.7 |
|
|
|
38.4 |
|
Total long-term assets |
|
|
914.7 |
|
|
|
760.1 |
|
Total assets |
|
$ |
1,579.1 |
|
|
$ |
1,389.1 |
|
|
|
|
|
|
|
|
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND
SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
138.7 |
|
|
$ |
108.5 |
|
Accrued employee liabilities |
|
|
36.7 |
|
|
|
30.0 |
|
Other accrued liabilities |
|
|
34.5 |
|
|
|
24.5 |
|
Short-term operating lease liabilities |
|
|
6.8 |
|
|
|
6.0 |
|
Short-term debt |
|
|
3.2 |
|
|
|
13.0 |
|
Income tax payable |
|
|
8.1 |
|
|
|
6.6 |
|
Total current liabilities |
|
|
228.0 |
|
|
|
188.6 |
|
Long-term liabilities: |
|
|
|
|
|
|
Long-term debt |
|
|
303.6 |
|
|
|
197.5 |
|
Long-term operating lease liabilities |
|
|
21.8 |
|
|
|
14.8 |
|
Long-term income tax payable |
|
|
16.7 |
|
|
|
22.1 |
|
Other long-term liabilities |
|
|
14.3 |
|
|
|
14.0 |
|
Deferred tax liabilities |
|
|
41.8 |
|
|
|
38.3 |
|
Total long-term liabilities |
|
|
398.2 |
|
|
|
286.7 |
|
Total liabilities |
|
|
626.2 |
|
|
|
475.3 |
|
Redeemable noncontrolling interest |
|
|
11.1 |
|
|
|
— |
|
Shareholders' equity: |
|
|
|
|
|
|
Common stock, $0.50 par value, 100,000,000 shares authorized,
37,167,375 shares and 38,276,968 shares issued as of April 29, 2023
and April 30, 2022, respectively |
|
|
18.6 |
|
|
|
19.2 |
|
Additional paid-in capital |
|
|
181.0 |
|
|
|
169.0 |
|
Accumulated other comprehensive loss |
|
|
(19.0 |
) |
|
|
(26.8 |
) |
Treasury stock, 1,346,624 shares as of April 29, 2023 and April 30,
2022 |
|
|
(11.5 |
) |
|
|
(11.5 |
) |
Retained earnings |
|
|
772.7 |
|
|
|
763.9 |
|
Total shareholders' equity |
|
|
941.8 |
|
|
|
913.8 |
|
Total liabilities, redeemable noncontrolling interest and
shareholders' equity |
|
$ |
1,579.1 |
|
|
$ |
1,389.1 |
|
|
METHODE ELECTRONICS, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited) |
(in millions) |
|
|
|
Fiscal Year Ended |
|
|
|
April 29, 2023 |
|
|
April 30, 2022 |
|
Operating activities: |
|
|
|
|
|
|
Net income |
|
$ |
77.1 |
|
|
$ |
102.2 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
49.5 |
|
|
|
52.6 |
|
Stock-based compensation expense |
|
|
11.5 |
|
|
|
11.8 |
|
Change in cash surrender value of life insurance |
|
|
0.3 |
|
|
|
0.1 |
|
Amortization of debt issuance costs |
|
|
0.7 |
|
|
|
0.7 |
|
Loss (gain) on sale of property, plant and equipment |
|
|
0.6 |
|
|
|
(0.3 |
) |
Impairment of long-lived assets |
|
|
0.7 |
|
|
|
3.1 |
|
Change in deferred income taxes |
|
|
(4.6 |
) |
|
|
(2.1 |
) |
Other |
|
|
0.5 |
|
|
|
0.5 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
|
(21.0 |
) |
|
|
(2.0 |
) |
Inventories |
|
|
8.9 |
|
|
|
(39.3 |
) |
Prepaid expenses and other assets |
|
|
(25.4 |
) |
|
|
1.5 |
|
Accounts payable |
|
|
19.8 |
|
|
|
(8.7 |
) |
Other liabilities |
|
|
14.2 |
|
|
|
(21.3 |
) |
Net cash
provided by operating activities |
|
|
132.8 |
|
|
|
98.8 |
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
Purchases of property, plant and equipment |
|
|
(42.0 |
) |
|
|
(38.0 |
) |
Acquisition of business, net of cash acquired |
|
|
(114.6 |
) |
|
|
— |
|
Sale of property, plant and equipment |
|
|
3.5 |
|
|
|
0.6 |
|
Net cash
used in investing activities |
|
|
(153.1 |
) |
|
|
(37.4 |
) |
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
Taxes paid related to net share settlement of equity awards |
|
|
(0.5 |
) |
|
|
(0.3 |
) |
Repayments of finance leases |
|
|
(0.4 |
) |
|
|
(0.7 |
) |
Proceeds from exercise of stock options |
|
|
1.5 |
|
|
|
0.5 |
|
Purchases of common stock |
|
|
(48.1 |
) |
|
|
(64.5 |
) |
Cash dividends |
|
|
(19.8 |
) |
|
|
(20.4 |
) |
Debt issuance costs |
|
|
(3.2 |
) |
|
|
— |
|
Proceeds from borrowings |
|
|
344.7 |
|
|
|
— |
|
Repayments of borrowings |
|
|
(271.0 |
) |
|
|
(29.2 |
) |
Net cash
used in financing activities |
|
|
3.2 |
|
|
|
(114.6 |
) |
Effect
of foreign currency exchange rate changes on cash and cash
equivalents |
|
|
2.1 |
|
|
|
(8.0 |
) |
Decrease in cash and cash equivalents |
|
|
(15.0 |
) |
|
|
(61.2 |
) |
Cash and
cash equivalents at beginning of the period |
|
|
172.0 |
|
|
|
233.2 |
|
Cash and cash equivalents at end of the
period |
|
$ |
157.0 |
|
|
$ |
172.0 |
|
|
|
|
|
|
|
|
Supplemental cash flow information: |
|
|
|
|
|
|
Cash paid during the period for: |
|
|
|
|
|
|
Interest |
|
$ |
5.6 |
|
|
$ |
3.6 |
|
Income taxes, net of refunds |
|
$ |
25.6 |
|
|
$ |
32.3 |
|
|
METHODE ELECTRONICS, INC. AND SUBSIDIARIES |
RECONCILIATION OF NON-GAAP MEASURES
(Unaudited) |
(in millions) |
|
|
|
Three Months Ended |
|
|
Fiscal Year Ended |
|
|
|
April 29, 2023 |
|
|
April 30, 2022 |
|
|
April 29, 2023 |
|
|
April 30, 2022 |
|
EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
8.1 |
|
|
$ |
16.2 |
|
|
$ |
77.1 |
|
|
$ |
102.2 |
|
Income tax (benefit) expense |
|
|
(0.3 |
) |
|
|
1.0 |
|
|
|
13.0 |
|
|
|
16.3 |
|
Interest expense, net |
|
|
1.4 |
|
|
|
0.6 |
|
|
|
2.7 |
|
|
|
3.5 |
|
Amortization of intangibles |
|
|
4.7 |
|
|
|
4.7 |
|
|
|
18.8 |
|
|
|
19.1 |
|
Depreciation |
|
|
8.0 |
|
|
|
8.3 |
|
|
|
30.7 |
|
|
|
33.5 |
|
EBITDA |
|
|
21.9 |
|
|
|
30.8 |
|
|
|
142.3 |
|
|
|
174.6 |
|
Acquisition costs |
|
|
6.8 |
|
|
|
— |
|
|
|
6.8 |
|
|
|
— |
|
Costs related to the reorganization of a foreign subsidiary |
|
|
2.6 |
|
|
|
— |
|
|
|
2.6 |
|
|
|
— |
|
Adjusted
EBITDA |
|
$ |
31.3 |
|
|
$ |
30.8 |
|
|
$ |
151.7 |
|
|
$ |
174.6 |
|
|
|
Three Months Ended |
|
|
Fiscal Year Ended |
|
|
|
April 29, 2023 |
|
|
April 30, 2022 |
|
|
April 29, 2023 |
|
|
April 30, 2022 |
|
Free Cash Flow: |
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
$ |
49.0 |
|
|
$ |
42.0 |
|
|
$ |
132.8 |
|
|
$ |
98.8 |
|
Purchases of property, plant and equipment |
|
|
(11.2 |
) |
|
|
(8.4 |
) |
|
|
(42.0 |
) |
|
|
(38.0 |
) |
Free
cash flow |
|
$ |
37.8 |
|
|
$ |
33.6 |
|
|
$ |
90.8 |
|
|
$ |
60.8 |
|
|
|
April 29, 2023 |
|
|
April 30, 2022 |
|
Net Debt: |
|
|
|
|
|
|
Short-term debt |
|
$ |
3.2 |
|
|
$ |
13.0 |
|
Long-term debt |
|
|
303.6 |
|
|
|
197.5 |
|
Total
debt |
|
|
306.8 |
|
|
|
210.5 |
|
Less:
cash and cash equivalents |
|
|
(157.0 |
) |
|
|
(172.0 |
) |
Net
debt |
|
$ |
149.8 |
|
|
$ |
38.5 |
|
|
METHODE ELECTRONICS, INC. AND SUBSIDIARIES |
RECONCILIATION OF NON-GAAP MEASURES
(Unaudited) |
(in millions, except per share data) |
|
Reconciliation of Non-GAAP Financial Measures for the Three
Months Ended April 29, 2023 |
|
|
|
U.S. GAAP (as reported) |
|
|
Acquisition costs |
|
|
Taxes and costs related to the reorganization of a foreign
subsidiary |
|
|
Non-U.S.GAAP |
|
Selling and administrative expenses |
|
$ |
50.1 |
|
|
$ |
(6.8 |
) |
|
$ |
(0.5 |
) |
|
$ |
42.8 |
|
Selling and administrative expenses (% of net sales) |
|
|
16.6 |
% |
|
|
(2.3 |
)% |
|
|
(0.2 |
)% |
|
|
14.2 |
% |
Income
from operations |
|
$ |
8.5 |
|
|
$ |
6.8 |
|
|
$ |
0.5 |
|
|
$ |
15.8 |
|
Net
income |
|
$ |
8.1 |
|
|
$ |
6.6 |
|
|
$ |
(7.0 |
) |
|
$ |
7.7 |
|
Diluted
earnings per share |
|
$ |
0.22 |
|
|
$ |
0.18 |
|
|
$ |
(0.19 |
) |
|
$ |
0.21 |
|
Reconciliation of Non-GAAP Financial Measures for the
Fiscal Year Ended April 29, 2023 |
|
|
|
U.S. GAAP (as reported) |
|
|
Acquisition costs |
|
|
Taxes and costs related to the reorganization of a foreign
subsidiary |
|
|
Non-U.S.GAAP |
|
Selling and administrative expenses |
|
$ |
154.9 |
|
|
$ |
(6.8 |
) |
|
$ |
(0.5 |
) |
|
$ |
147.6 |
|
Selling and administrative expenses (% of net sales) |
|
|
13.1 |
% |
|
|
(0.6 |
)% |
|
|
— |
% |
|
|
12.5 |
% |
Income
from operations |
|
$ |
90.4 |
|
|
$ |
6.8 |
|
|
$ |
0.5 |
|
|
$ |
97.7 |
|
Net
income |
|
$ |
77.1 |
|
|
$ |
6.6 |
|
|
$ |
(7.0 |
) |
|
$ |
76.7 |
|
Diluted
earnings per share |
|
$ |
2.10 |
|
|
$ |
0.18 |
|
|
$ |
(0.19 |
) |
|
$ |
2.09 |
|
Reconciliation of Non-GAAP Financial Measures for the Three
Months Ended April 30, 2022 |
|
|
|
U.S. GAAP (as reported) |
|
|
Acquisition costs |
|
|
Taxes and costs related to the reorganization of a foreign
subsidiary |
|
|
Non-U.S.GAAP |
|
Selling and administrative expenses |
|
$ |
35.6 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
35.6 |
|
Selling and administrative expenses (% of net sales) |
|
|
12.3 |
% |
|
n/a |
|
|
n/a |
|
|
|
12.3 |
% |
Income
from operations |
|
$ |
14.6 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
14.6 |
|
Net
income |
|
$ |
16.2 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
16.2 |
|
Diluted
earnings per share |
|
$ |
0.43 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
0.43 |
|
Reconciliation of Non-GAAP Financial Measures for the
Fiscal Year Ended April 30, 2022Reconciliation of Non-GAAP
Financial Measures for the Fiscal Year Ended April 30,
2022 |
|
|
|
U.S. GAAP (as reported) |
|
|
Acquisition costs |
|
|
Taxes and costs related to the reorganization of a foreign
subsidiary |
|
|
Non-U.S.GAAP |
|
Selling and administrative expenses |
|
$ |
134.1 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
134.1 |
|
Selling and administrative expenses (% of net sales) |
|
|
11.5 |
% |
|
n/a |
|
|
n/a |
|
|
|
11.4 |
% |
Income from operations |
|
$ |
111.7 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
111.7 |
|
Net income |
|
$ |
102.2 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
102.2 |
|
Diluted earnings per
share |
|
$ |
2.70 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2.70 |
|
Methode Electronics (NYSE:MEI)
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