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Methode
🇺🇸 NYSE:MEI
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Jul 29, 2023

Methode Q1 2024 Earnings Report

Methode reported mixed results with strong sales offset by operational inefficiencies, leading to lowered earnings guidance for the full year.

Key Takeaways

Methode Electronics reported net sales of $289.7 million for Q1 2024, an increase from $282.4 million in the same quarter of fiscal 2023. However, net income decreased to $0.9 million, or $0.02 per diluted share, compared to $21.5 million, or $0.58 per diluted share, in the same quarter of the previous year. The company experienced operational inefficiencies in its North American Auto operations, which negatively impacted earnings.

Net sales increased to $289.7 million, with electric and hybrid vehicle applications accounting for 22% of net sales.

Net income decreased to $0.9 million, or $0.02 per diluted share.

Operational inefficiencies in North American Auto operations and accelerated expenses related to program launches led to an earnings shortfall.

The company was awarded programs with expected annual sales of over $70 million.

Total Revenue
$290M
Previous year: $282M
+2.6%
EPS
$0.06
Previous year: $0.58
-89.7%
Adjusted EBITDA
$19.3M
Tax Expense
$100K
Previous year: $4.4M
-97.7%
Interest Expense
$2.8M
Gross Profit
$54M
Previous year: $61.8M
-12.6%
Cash and Equivalents
$148M
Previous year: $152M
-3.0%
Free Cash Flow
-$19.4M
Previous year: $3.1M
-725.8%
Total Assets
$1.57B
Previous year: $1.39B
+13.3%

Methode

Methode

Methode Revenue by Segment

Forward Guidance

For the second quarter of fiscal 2024, Methode expects net sales to be in the range of $285 to $295 million and diluted earnings per share to be in the range of $0.08 to $0.13. For the full fiscal year 2024, the company expects net sales to be in the range of $1,140 to $1,180 million and diluted earnings per share to be in the range of $0.80 to $1.00.

Positive Outlook

  • Net sales for Q2 are expected to be between $285 and $295 million.
  • Adjusted diluted earnings per share for Q2 are expected to be between $0.12 and $0.17.
  • Net sales for fiscal year 2024 are expected to be between $1,140 and $1,180 million.
  • Adjusted diluted earnings per share for fiscal year 2024 are expected to be between $0.88 and $1.08.
  • Operational inefficiencies experienced in Q1 are expected to be resolved by Q3.

Challenges Ahead

  • Diluted earnings per share for Q2 are expected to be between $0.08 and $0.13.
  • Diluted earnings per share for fiscal year 2024 are expected to be between $0.80 and $1.00, down from the previous range of $1.55 to $1.75.
  • Operational inefficiencies experienced in Q1 are expected to similarly impact Q2 earnings.
  • A significant weakening in the e-bike market is expected to impact earnings.
  • The cost from operational inefficiencies experienced in the first quarter are expected to similarly impact the second quarter earnings

Revenue & Expenses

Visualization of income flow from segment revenue to net income

Company Overview

Full financial data and analysis

View Methode