CHICAGO, IL -- (Marketwire) -- 12/08/11 -- Methode Electronics, Inc. (
Second-Quarter Fiscal 2012
Methode's second-quarter Fiscal 2012 net sales increased $8.2 million, or 7.6 percent, to $115.9 million from $107.7 million in the same quarter of Fiscal 2011. Translation of foreign currency increased net sales $1.0 million, or 0.8 percent, in the year-over-year comparison.
Net income increased $0.8 million to $0.3 million, or $0.01 per share, in the second quarter of Fiscal 2012 from a loss of $0.5 million, or $0.01 per share, in the same period of Fiscal 2011. Year over year, Fiscal 2012 second-quarter net income was negatively affected by:
Year over year, Fiscal 2012 second-quarter net income benefitted from:
Consolidated gross margins as a percentage of sales were 18.0 percent in the Fiscal 2012 second quarter compared to 21.9 percent in the same period of Fiscal 2011. The decrease was due primarily to design, development and engineering costs for new automotive programs launching in Fiscal years 2012 and 2013, Power Products segment product launch costs, as well as increased sales of automotive product that has higher prime cost due to the current high percentage of purchased content, partially offset by the absence of customer cancellation charges and negotiated program termination charges.
Selling and administrative expenses decreased $2.9 million, or 13.7 percent, to $18.3 million in the Fiscal 2012 second quarter compared to $21.2 million in the prior-year second quarter due primarily to the absence of expense for unsecured claims compared to $3.8 million of expense in the Fiscal 2011 period, partially offset by higher stock award amortization, higher legal expenses and the absence of a Malta grant. Selling and administrative expenses as a percentage of net sales were 15.8 percent for the Fiscal 2012 second quarter compared to 19.7 percent in the same period last year.
In the Fiscal 2012 second quarter, income tax expense increased $1.4 million to $2.2 million compared to $0.8 million for the Fiscal 2011 period. For the Fiscal 2012 period, the income tax expense relates to income taxes on foreign profits of $1.1 million, $0.9 million for foreign taxes on a foreign dividend, and other taxes of $0.2 million. For the Fiscal 2011 period, the income tax expense relates to income taxes on foreign profits.
Second-Quarter Fiscal 2012 Segment Comparison
Comparing the Automotive segment's second quarter of Fiscal 2012 to the same period of Fiscal 2011,
Comparing the Interconnect segment's second quarter of Fiscal 2012 to the same period of Fiscal 2011,
Comparing the Power Products segment's second quarter of Fiscal 2012 to the same period of Fiscal 2011,
Six-Month Period Fiscal 2012
Methode's six-month Fiscal 2012 net sales increased $20.0 million, or 9.7 percent, to $226.7 million from $206.7 million in the same period of Fiscal 2011. Translation of foreign currency increased net sales $3.7 million, or 1.7 percent, in the year-over-year comparison.
Net income decreased $1.8 million to $1.8 million, or $0.05 per share, in the six months of Fiscal 2012 compared to $3.6 million, or $0.10 per share, in the same period of Fiscal 2011. Year over year, Fiscal 2012 six-month net income was negatively affected by:
Year over year, Fiscal 2012 six-month net income benefitted from:
Consolidated gross margins as a percentage of sales were 18.0 percent in the Fiscal 2012 six-month period compared to 21.2 percent in the same period of Fiscal 2011. The decrease was due primarily to design, development and engineering costs for new automotive programs launching in Fiscal years 2012 and 2013, Power Products segment product launch costs, as well as increased sales of automotive product that has higher prime cost due to the current high percentage of purchased content, partially offset by the absence of costs related to environmental matters, customer cancellation charges and negotiated program termination charges.
Selling and administrative expenses decreased $0.7 million, or 1.9 percent, to $36.8 million in the Fiscal 2012 six-month period compared to $37.5 million in the prior-year period due primarily to the absence of expense for unsecured claims compared to $3.8 million of expense in the Fiscal 2011 period, partially offset by higher stock award amortization, higher legal expense, costs associated with acquisitions and the absence of a Malta grant. Selling and administrative expenses as a percentage of net sales decreased to 16.2 percent for the Fiscal 2012 six months compared to 18.1 percent in the same period last year.
In the Fiscal 2012 six-month period, income tax expense increased $0.8 million to $2.2 million compared to $1.4 million for the Fiscal 2011 period. For the Fiscal 2012 period, the income tax expense relates to income taxes on foreign profits of $2.2 million, $0.9 million for taxes on a foreign dividend and other taxes of $0.2 million, partially offset by a benefit of $1.1 million relating to tax credits from Malta. For the Fiscal 2011 period, the income tax expense of $1.4 million relates to income taxes on foreign profits.
Six-Month Fiscal 2012 Segment Comparison
Comparing the Automotive segment's first six months of Fiscal 2012 to the same period of Fiscal 2011,
Comparing the Interconnect segment's first six months of Fiscal 2012 to the same period of Fiscal 2011,
Comparing the Power Products segment's first six months of Fiscal 2012 to the same period of Fiscal 2011,
Management Comments
President and Chief Executive Officer Donald W. Duda said, "In the first half of Methode's Fiscal 2012, we experienced improved sales in our Automotive and Power Products segments, the direct result of our strategy to deliver innovative solutions that incorporate our broad range of field-proven technologies and manufacturing capabilities."
Mr. Duda concluded, "We see a considerable opportunity for meaningful improvement in our earnings beginning in the fourth quarter of Fiscal 2012, and in our revenues, which are projected to grow from Fiscal 2012 to Fiscal 2015 by nearly 16 percent compounded."
Guidance
Methode reiterates its Fiscal 2012 guidance of $450 to $465 million in sales and earnings per share of $0.13 to $0.21, and Fiscal 2013 guidance of $495 to $525 million in sales and earnings per share of $0.52 to $0.67.
Conference Call
The Company will conduct a conference call and Webcast today to review financial and operational highlights led by its President and Chief Executive Officer, Donald W. Duda, and Chief Financial Officer, Douglas A. Koman, at 10:00 a.m. Central time.
To participate in the conference call, please dial (877) 407-8031 (domestic) or (201) 689-8031 (international) at least five minutes prior to the start of the event. A simultaneous Webcast can be accessed through the Company's Web site, www.methode.com, by selecting the Investor Relations page, and then clicking on the "Webcast" icon.
A replay of the conference call, as well as an MP3 download, will be available shortly after the call through December 22 by dialing (877) 660-6853 (domestic) or (201) 612-7415 (international) and providing Account number 286 and Conference ID number 383861. On the Internet, a replay will be available for 30 days through the Company's Web site, www.methode.com, by selecting the Investor Relations page and then clicking on the "Webcast" icon.
About Methode Electronics, Inc.
Methode Electronics, Inc. (
Forward-Looking Statements
This press 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 press 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 a small number of large customers, including two large automotive customers; (2) dependence on the automotive, appliance, computer and communications industries; (3) further downturns in the automotive industry or the bankruptcy of certain automotive customers; (4) ability to compete effectively; (5) customary risks related to conducting global operations; (6) dependence on the availability and price of raw materials; (7) dependence on our supply chain; (8) ability to keep pace with rapid technological changes; (9) ability to avoid design or manufacturing defects; (10) ability to protect our intellectual property; (11) ability to withstand price pressure; (12) the usage of a significant amount of our cash and resources to launch new North American automotive programs; (13) location of a significant amount of cash outside of the U.S.; (14) currency fluctuations; (15) ability to successfully benefit from acquisitions and divestitures; (16) ability to withstand business interruptions; (17) unfavorable tax laws; (18) ability to implement and profit from newly acquired technology; and (19) the future trading price of our stock.
METHODE ELECTRONICS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except per share data) Three Months Ended Six Months Ended ------------------------- ------------------------- October 29, October 30, October 29, October 30, 2011 2010 2011 2010 ------------ ------------ ------------ ------------ Net sales $ 115,890 $ 107,716 $ 226,695 $ 206,703 Cost of products sold 94,972 84,073 185,794 162,853 ------------ ------------ ------------ ------------ Gross margins 20,918 23,643 40,901 43,850 Restructuring - (21) - (21) Selling and administrative expenses 18,278 21,293 36,840 37,650 ------------ ------------ ------------ ------------ Income from operations 2,640 2,371 4,061 6,221 Interest expense, net 1 61 5 88 Other expense, net 194 2,032 152 1,183 ------------ ------------ ------------ ------------ Income before income taxes 2,445 278 3,904 4,950 Income tax expense 2,221 768 2,243 1,410 ------------ ------------ ------------ ------------ Net income/(loss) 224 (490) 1,661 3,540 Less: Net income/(loss) attributable to noncontrolling interest (87) 23 (145) (12) ------------ ------------ ------------ ------------ NET INCOME/(LOSS) ATTRIBUTABLE TO METHODE ELECTRONICS, INC. $ 311 (513) 1,806 3,552 ============ ============ ============ ============ Amounts per common share attributable to Methode Electronics, Inc.: Basic $ 0.01 $ (0.01)$ 0.05 $ 0.10 Diluted $ 0.01 $ (0.01)$ 0.05 $ 0.10 Cash dividends: Common stock $ 0.07 $ 0.07 $ 0.14 $ 0.14 Weighted average number of Common Shares outstanding: Basic 37,309,890 37,058,108 37,293,598 37,051,058 Diluted 37,520,247 37,058,108 37,516,998 37,281,600 METHODE ELECTRONICS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) As of As of October 29, April 30, 2011 2011 ------------ ------------ (Unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 75,548 $ 57,445 Accounts receivable, net 96,092 88,036 Inventories: Finished products 7,212 6,271 Work in process 12,097 10,981 Materials 21,268 21,305 ------------ ------------ 40,577 38,557 Deferred income taxes 3,728 3,778 Prepaid and refundable income taxes 881 851 Prepaid expenses and other current assets 9,029 7,294 ------------ ------------ TOTAL CURRENT ASSETS 225,855 195,961 PROPERTY, PLANT AND EQUIPMENT 266,251 298,254 Less allowances for depreciation 199,263 236,743 ------------ ------------ 66,988 61,511 GOODWILL 16,422 16,422 INTANGIBLE ASSETS, net 17,533 18,423 PRE-PRODUCTION COSTS 16,084 14,645 OTHER ASSETS 27,316 27,782 ------------ ------------ 77,355 77,272 ------------ ------------ TOTAL ASSETS $ 370,198 $ 334,744 ============ ============ LIABILITIES AND EQUITY CURRENT LIABILITIES Accounts payable $ 40,712 $ 37,152 Other current liabilities 25,912 26,335 ------------ ------------ TOTAL CURRENT LIABILITIES 66,624 63,487 LONG-TERM DEBT 36,500 - OTHER LIABILITIES 4,793 5,619 DEFERRED COMPENSATION 4,801 4,494 NON-CONTROLLING INTEREST 422 - SHAREHOLDERS' EQUITY Common stock, $0.50 par value, 100,000,000 shares authorized, 38,363,078 and 38,312,243 shares issued as of October 29, 2011 and April 30, 2011, respectively 19,182 19,156 Additional paid-in capital 75,588 72,113 Accumulated other comprehensive income 20,849 23,152 Treasury stock, 1,342,188 shares as of October 29, 2011 and April 30, 2011 (11,377) (11,377) Retained earnings 152,614 155,989 ------------ ------------ TOTAL METHODE ELECTRONICS, INC. SHAREHOLDERS' EQUITY 256,856 259,033 Noncontrolling interest 202 2,111 ------------ ------------ TOTAL EQUITY 257,058 261,144 ------------ ------------ TOTAL LIABILITIES AND EQUITY $ 370,198 $ 334,744 ============ ============ METHODE ELECTRONICS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Six Months Ended -------------------------- October 29, October 30, 2011 2010 ------------ ------------ OPERATING ACTIVITIES Net income $ 1,661 $ 3,540 Adjustments to reconcile net income to net cash provided by/(used in) operating activities: Provision for depreciation 7,047 6,647 Impairment of tangible assets - 1,299 Amortization of intangibles 898 1,139 Amortization of stock awards and stock options 1,959 541 Gain on bargain purchase (255) - Changes in operating assets and liabilities (10,112) (9,416) Other 539 77 ------------ ------------ NET CASH PROVIDED BY OPERATING ACTIVITIES 1,737 3,827 INVESTING ACTIVITIES Purchases of property, plant and equipment (9,125) (5,605) Acquisition of businesses (6,353) (750) Proceeds from life insurance policies - 1,515 ------------ ------------ NET CASH USED IN INVESTING ACTIVITIES (15,478) (4,840) FINANCING ACTIVITIES Proceeds from exercise of stock options 198 13 Cash dividends (5,181) (5,154) Net borrowings 36,500 18,000 ------------ ------------ NET CASH PROVIDED BY FINANCING ACTIVITIES 31,517 12,859 Effect of foreign currency exchange rate changes on cash 327 1,525 INCREASE IN CASH AND CASH EQUIVALENTS 18,103 13,371 Cash and cash equivalents at beginning of period 57,445 63,821 ------------ ------------ CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 75,548 $ 77,192 ============ ============
For Methode Electronics, Inc. - Investor Contacts:
Kristine Walczak
Dresner Corporate Services
312-780-7205
kwalczak@dresnerco.com
Philip Kranz
Dresner Corporate Services
312-780-7240
pkranz@dresnerco.com