On September 5, 2024, Methode Electronics Inc (MEI, Financial) released its 8-K filing for the first quarter of fiscal 2025, ended July 27, 2024. Methode Electronics Inc, a leading global supplier of custom-engineered solutions for user interface, LED lighting, and power distribution applications, reported a net sales figure of $258.5 million, falling short of the analyst estimate of $264.65 million. However, the company reported an adjusted net loss per share of $0.31, which was worse than the estimated loss of $0.30 per share.
Company Overview
Methode Electronics Inc makes component and subsystem devices employing electrical, radio remote control, electronic, wireless, and sensing technologies. The firm is organized into various business segments: Automotive, Industrial, Interface, and Medical. The Automotive segment, which generates maximum revenue, supplies electronic and electro-mechanical devices and related products to automobiles. The products manufactured in the automotive segment include overhead and center consoles, hidden and ergonomic switches, insert molded components, LED-based lighting, and sensors. Geographically, the company generates maximum revenue from North America and the rest from Europe, the Middle East & Africa (EMEA), and Asia.
Performance and Challenges
Methode Electronics Inc (MEI, Financial) reported a net sales decrease to $258.5 million from $289.7 million in the same quarter of fiscal 2024. The decline was primarily driven by lower sales in Asia due to a previously disclosed automotive program roll-off and weakness in commercial vehicle lighting, partially offset by higher automotive sales in Europe. Excluding foreign currency translation, net sales were down 10.2% compared to the same quarter of fiscal 2024.
The company faced a pre-tax loss of $13.1 million, with an adjusted pre-tax loss of $9.1 million. The net loss was $18.3 million, or $0.52 per diluted share, compared to net income of $0.9 million, or $0.02 per diluted share, in the same quarter of fiscal 2024. The adjusted net loss was $10.9 million, or $0.31 per diluted share.
Financial Achievements
Despite the challenges, Methode Electronics Inc (MEI, Financial) reported significant improvements in cash flow. Net cash provided by operating activities was $10.9 million, up from a negative $5.6 million in the prior year. This improvement is crucial for the company as it navigates through a challenging transition from legacy programs to new program launches.
President and Chief Executive Officer Jon DeGaynor stated, “Our sales in the quarter were on track with our expectations, while our adjusted pre-tax loss was better than our expectations. We continue to navigate a challenging transition from our legacy programs to the launching of a multitude of new programs. Our bookings remained solid, and our EV activity rebounded from our previous quarter.”
Key Financial Metrics
| Metric | Q1 FY2025 | Q1 FY2024 |
|---|---|---|
| Net Sales | $258.5 million | $289.7 million |
| Gross Profit | $44.6 million | $54.0 million |
| Net Loss | ($18.3 million) | $0.9 million |
| Adjusted Net Loss | ($10.9 million) | $2.0 million |
| EBITDA | $5.8 million | $17.8 million |
| Adjusted EBITDA | $9.8 million | $19.3 million |
Segment Performance
The Automotive segment reported net sales of $134.8 million, down from $158.3 million in the same quarter of fiscal 2024. The Industrial segment saw a slight decline in net sales to $111.5 million from $115.4 million. The Interface segment also experienced a decrease in net sales to $12.2 million from $15.2 million.
Guidance and Future Outlook
Methode Electronics Inc (MEI, Financial) affirmed its guidance for fiscal years 2025 and 2026. For fiscal 2025, the company expects net sales to be similar to fiscal 2024 and adjusted pre-tax income to approach breakeven. For fiscal 2026, the company anticipates net sales to be greater than fiscal 2025 and pre-tax income to be positive and notably greater than fiscal 2025.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Methode Electronics Inc for further details.
