Methode Electronics Inc (MEI, Financial) released its 8-K filing on December 5, 2024, reporting its financial results for the second quarter of fiscal 2025, which ended on November 2, 2024. The company, a global supplier of custom-engineered solutions, operates across various segments including Automotive, Industrial, Interface, and Medical, with significant revenue generated from North America.
Performance Overview
Methode Electronics Inc (MEI, Financial) reported net sales of $292.6 million for the second quarter, surpassing the analyst estimate of $267.59 million. This marks an increase from $288.0 million in the same quarter of fiscal 2024. The growth was primarily driven by higher demand for power distribution products for data centers, despite challenges in the automotive sector in Asia.
The company reported a net loss of $1.6 million, or $0.05 per diluted share, which is narrower than the analyst estimate of a $0.17 loss per share. Adjusted net income was $5.2 million, or $0.14 per diluted share, compared to $2.4 million, or $0.06 per diluted share, in the same quarter of the previous year.
Financial Achievements and Challenges
Methode Electronics Inc (MEI, Financial) achieved a positive pre-tax income of $1.6 million, with an adjusted pre-tax income of $6.2 million. The company also secured over $50 million in program awards, indicating strong future prospects. However, the company faced a tax expense of $3.2 million due to an increase in valuation allowance for U.S. deferred tax assets.
President and CEO Jon DeGaynor stated, “The team is energized, and these results demonstrate that we are heading in the right direction. Our sales in the quarter were the highest that we have reported since fiscal 2023, and our pre-tax income returned to positive territory.”
Segment Performance
The Automotive segment reported net sales of $145.5 million, a decrease from $154.3 million in the same quarter of fiscal 2024, primarily due to lower volumes in Asia. The Industrial segment saw an increase in net sales to $131.4 million from $120.4 million, driven by higher demand for power distribution products. The Interface segment also experienced growth, with net sales rising to $15.7 million from $11.7 million.
Balance Sheet and Cash Flow
As of November 2, 2024, Methode Electronics Inc (MEI, Financial) reported total assets of $1,375.1 million, with cash and cash equivalents of $97.0 million. The company's total debt stood at $340.6 million, resulting in a net debt of $243.6 million. Net cash used in operating activities was $48.0 million, compared to $0.6 million in the same quarter of fiscal 2024, primarily due to timing of payments and the extended fiscal quarter.
Guidance and Strategic Outlook
The company raised its guidance for fiscal 2025 adjusted pre-tax income, expecting it to approach breakeven. For fiscal 2026, Methode Electronics Inc (MEI, Financial) reaffirmed its expectation for net sales to exceed fiscal 2025 levels, with positive and significantly greater pre-tax income.
Methode Electronics Inc (MEI, Financial) continues to focus on executing program launches and controlling costs, while navigating the transition towards a more balanced portfolio with increased emphasis on power and lighting solutions.
Explore the complete 8-K earnings release (here) from Methode Electronics Inc for further details.
