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Custom-engineered solutions provider Methode Electronics, Inc (NYSE:MEI) reported a fourth-quarter fiscal 2024 net sales decline of 7.9% year-on-year to $277.30 million, beating the analyst consensus estimate of $264.04 million.
Lower Automotive segment sales in all geographic regions and unfavorable foreign currency translation led to a sales decrease for the quarter.
Adjusted EPS loss of $0.23 missed the analyst consensus loss estimate of $0.20. The stock price climbed after the print.
Segments: Automotive segment’s net sales were $145.9 million, down from $186.2 million primarily due to lower volume in Asia and Europe. Net sales for the Industrial segment were $117.2 million, up from $98.0 million driven by the acquisition of the Nordic Lights.
Sales in the Interface segment were $14.2 million, down from $15.8 million, mainly due to a lower volume of appliance products.
Gross profit fell 43.9% Y/Y to $35.5 million. Adjusted EBITDA was $5.3 million, significantly lower than $31.7 million in the same quarter a year ago.
The company exited the quarter with cash and equivalents totaling $161.5 million. Long-term debt was $330.7 million at the end of the quarter.
Interim CEO Kevin Nystrom highlighted that Q4 sales improved from Q3 but were down year-over-year due to auto program roll-offs and weak e-bike demand.
EV activity also declined due to program roll-offs and lower market demand. He noted that the automotive segment faced operational inefficiencies due to increased program launches, labor turnover, and higher costs, leading to an adjusted net loss.
Nystrom expects fiscal 2025 to be a repositioning year with flat organic sales growth and near-breakeven pre-tax income, followed by organic sales growth and significant pre-tax income improvement in fiscal 2026.
Outlook: For fiscal 2025, the company expects net sales to be similar to fiscal 2024 of $1.115 billion versus $1.044 billion analyst consensus.
It expects fiscal 2026 net sales to exceed fiscal 2025 net sales.
CEO Transition: In June, the company disclosed plans to tap Jon DeGaynor as the CEO and a director, effective July 15, 2024. DeGaynor will succeed Kevin Nystrom, a partner and managing director at AlixPartners LLP, who has served as interim CEO since May 7, 2024.
Price Action: MEI shares are trading higher by 8.29% to $10.22 premarket at the last check Thursday.
Posted In: MEI
