Methode Electronics, Inc. Reports Fiscal 2004 Fourth Quarter and Year-End Results and Declares $0.05 Quarterly Dividend.CHICAGO Chicago, city, United States Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. -- Methode Electronics, Inc. (Nasdaq:METH) today announced operating results for the fourth quarter and fiscal year ended April 30, 2004. Fourth Quarter and Year-End year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. Financial Summary For the fiscal 2004 fourth quarter, Methode reported net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $99.7 million and net income of $7.6 million, or earnings of $0.21 per share. This compares to fiscal 2003 fourth quarter net sales of $94.1 million and net income of $6.7 million, or earnings of $0.18 per share. This represents a 6 percent increase in net sales and a 14 percent increase in net income. Customer tooling sales in the fiscal 2004 fourth quarter were $3.7 million compared to $7.0 million in the year ago period. Excluding customer tooling, product sales increased 10.2 percent to $96.0 million in this year's fourth quarter compared to $87.1 million in the same quarter last year. In the current quarter, results included an after tax charge of $0.5 million, or $0.01 earnings per share, related to denial of insurance coverage for certain costs in connection with the settlement of the class A shareholders' lawsuit lawsuit: see procedure; tort. . We also recorded a $0.5 million, or $0.01 earnings per share, benefit to income tax expense to reduce tax reserves for contingencies Contingencies (ISSN 1048-9851) is the bimonthly magazine of the American Academy of Actuaries, providing a large and diverse readership with general interest and technical articles on a wide range of issues related to the actuarial profession. no longer considered necessary. In the fourth quarter we provided for the closing of our UK manufacturing facilities, however, those costs were substantially offset by the actual cost for the closing of our Ireland Ireland, Irish Eire (âr`ə) [to it are related the poetic Erin and perhaps the Latin Hibernia], island, 32,598 sq mi (84,429 sq km), second largest of the British Isles. manufacturing facility in the third quarter being lower than initially estimated. For the 2004 fiscal year, Methode reported net sales of $358.9 million and net income of $19.7 million, or earnings of $0.55 per share. This compares with 2003 fiscal year net sales of $363.1 million and net income of $21.9 million, or $0.60 per share. Customer tooling sales, for the year, were $11.3 million compared to $22.8 million from fiscal 2003. Excluding customer tooling, net sales in fiscal 2004 were $347.6 million, a 2 percent increase from net sales of $340.3 million in the prior year. Net income for the 2004 fiscal year includes a $2.6 million, or $0.07 per share, charge for costs incurred to eliminate the Company's dual class stock structure and hostile tender offer hostile tender offer An offer to purchase shares from a firm's stockholders when directors of the target firm have recommended that stockholders not sell their stock. for its class B stock, a $1.4 million, or $0.04 per share, charge for the closing of Ireland and UK manufacturing facilities, and a $0.5 million, or $0.01 per share, benefit for the fourth quarter reduction in the reserve for tax contingencies. Donald Donald (Domnall, Domhnall, Dumhnuil, Dónall) is an anglicized version of a Scottish or Irish Gaelic personal name, containing the elements dumno "world" and val "rule", viz. "ruler of the world". Compare Dumnorix. Duda The Magyar duda—Hungarian duda—(also known as tömlösíp and börduda) is the traditional bagpipe of Hungary. It is an example of a group of bagpipes called Medio-Carparthian bagpipes. , Chief Executive Officer of Methode commented, "Our achievements were across many fronts, including increased margins, diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. within our automotive customer base, continued development of a lean manufacturing Lean manufacturing is the production of goods using less of everything compared to mass production: less human effort, less manufacturing space, less investment in tools, and less engineering time to develop a new product. philosophy and culture, global expansion and a more contemporary corporate structure with a single class of common stock. We are pleased with our progress." "With manufacturing, design and testing facilities in the U.S., Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. , Scotland Scotland, political division of Great Britain (1991 pop. 4,957,000), 30,414 sq mi (78,772 sq km), comprising the northern portion of the island of Great Britain and many surrounding islands. , Germany, Malta and soon in China, we believe Methode is well-positioned to meet the needs of our global customer base," concluded Mr. Duda. As a result of eliminating its dual class stock structure in January, Methode added four new independent members to its board of directors at the end of fiscal 2004. On June 18, 2004, Methode's board elected two additional independent members. They are, Isabelle C. Goosen, Vice President of Finance and Administration for the Chicago Symphony Orchestra Chicago Symphony Orchestra, founded in 1891 by Theodore Thomas, who conducted it until his death in 1905. Orchestra Hall was built for it in 1904 with funds raised by public subscription; the hall is now part of Symphony Center, which was completed in 1997. and Dr. Darren M. Dawson, Professor in the Electrical and Computer Engineering Department with Clemson University Clemson University, at Clemson, S.C.; coeducational; land-grant; state supported; opened in 1893 as a college, gained university status in 1964. The university includes programs in textile and computer research, wildlife biology, and aquaculture and maintains . The Company welcomes these new members to its board. Two of Methode's long-standing board members announced their retirements to coincide with this year's annual meeting on September 14, 2004. These board members are William C. Croft CROFT, obsolete. A little close adjoining to a dwelling-house, and enclosed for pasture or arable, or any particular use. Jacob's Law Dict. and George C. Wright who have served on Methode's board for 29 and 36 years, respectively. Mr. Duda commented, "We thank Messrs. Croft and Wright for their loyal and distinguished service to Methode." Also announcing his retirement from the board is William T. Jensen. Commenting on Mr. Jensen's retirement, Mr. Duda said, "After 42 years with Methode, Mr. Jensen is stepping down as Chairman of the Board. Mr. Jensen came out of retirement in 2001 after the passing of the Company's founder and steered the Company through a difficult transition. We thank him for his dedication and unwavering devotion Devotion may refer to:
Balance Sheet The cash balance at 2004 fiscal year-end Fiscal Year-End The completion of a one-year, or 12-month, accounting period. Notes: The reason that a company's fiscal year often differs from the calendar year and does not close on Dec 31, is due to the nature of company's needs. was $61.8 million, up $1.2 million during the fourth quarter. For the fiscal year, cash was down only $2.5 million, even though the Company paid $25.8 million for the purchase of its class B stock. Douglas Koman, Chief Financial Officer of Methode stated, "Our cash flow remains strong and will be beneficial as we continue to seek acquisitions to enhance and broaden our capabilities and markets served." "Increasing margins remains a significant corporate objective," continued Mr. Koman. "We continue to monitor our costs and look for methods to deliver greater return on investments. As our manufacturing processes improve and we further invest in and implement techniques such as flexible automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. manufacturing cells, we expect continued margin improvements, even against a backdrop Backdrop may refer to:
detrusor instability and higher healthcare costs." In the second half of the fiscal year, Methode closed its Ireland and U.K. manufacturing facilities, because of increased pricing pressure and a migration of business to lower cost Asian manufacturers. As Methode seeks to further its global expansion, the Company's Shanghai Shanghai (shăng`hī`, shäng`hī`), city (1994 est. pop. 12,980,000), in, but independent of, Jiangsu prov., E China, on the Huangpu (Whangpoo) River where it flows into the Chang (Yangtze) estuary. , China facility is prepared to begin production this fall to support customer needs, as well as position the Company to develop business in the Asian marketplace. Quarterly Dividend The Board of Directors of Methode Electronics has declared a quarterly dividend of $0.05 per outstanding share of common stock to be paid on July 30, 2004 to shareholders of record at the close of business on July 15, 2004. Business Outlook Methode is forecasting fiscal 2005 net sales of between $370.0 million and $385.0 million with net income in the range of $0.65 to $0.72 earnings per share. The Company expects to realize increased business from its Network Bus unit because of additional orders from the computer and military industries. The Automotive Safety Technology business is expected to increase as automakers ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale to meet the federal requirement to provide passive occupant occupant n. 1) someone living in a residence or using premises, as a tenant or owner. 2) a person who takes possession of real property or a thing which has no known owner, intending to gain ownership. (See: occupancy) detection for front passenger airbag deployment on all vehicles by model year 2006. These increases will be partially offset by expected pricing pressures and potential lower sales from Methode's traditional North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. automotive OEMs as we continue to transition away from less profitable programs. We also anticipate weaker U.S. sales in commoditized electronic components, however, production in China will help boost sales in Asia, thus slowing the decline of business from customers expressly seeking the lowest cost provider. For the first quarter of fiscal year 2005 which includes the July automotive model year change-over and related OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and plant shutdowns, Methode is projecting net sales of $80.0 million to $85.0 million with net income between $0.12 and $0.14 per share. Conference Call As previously announced, the Company will conduct a conference call led by its Chief Executive Officer, Donald W. Duda, and Chief Financial Officer, Douglas A. Koman, on June 24, 2004 at 10:00 a.m. Central Daylight Time. You may participate on the conference call by dialing 1-888-482-0024 or 617-801-9702 for International callers. Methode also invites you to listen to the webcast of this call by visiting the Company's website at http://www.methode.com and entering the "Investor Relations Investor relations The process by which the corporation communicates with its investors. " page and then clicking on the "Webcast" icon. A replay of the call will be available for seven days, by dialing 1-888-286-8010 or 617-801-6888 for International callers, both using passcode: 19145925. It will also be available on the Company's website. About Methode Electronics Methode Electronics, Inc. is a global manufacturer of component and subsystem A unit or device that is part of a larger system. For example, a disk subsystem is a part of a computer system. A bus is a part of the computer. A subsystem usually refers to hardware, but it may be used to describe software. devices. Methode designs, manufactures and markets devices employing electrical, electronic, wireless, sensing and optical technologies. Methode's components are found in the primary end markets of the automotive, communications (including information processing information processing: see data processing. information processing Acquisition, recording, organization, retrieval, display, and dissemination of information. Today the term usually refers to computer-based operations. and storage, networking equipment, wireless and terrestrial Dealing with the earth. See terrestrial link. voice/data systems), aerospace, rail and other transportation industries; and the consumer and industrial equipment markets. Further information can be found at Methode's website http://www.methode.com. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Certain statements in this press release dated June 24, 2004, containing information on Methode's fourth quarter and year-end reporting periods for fiscal 2004, and offering guidance for its first quarter and full year reporting periods for fiscal 2005, are forward-looking statements that are subject to certain risks and uncertainties. The Company's results will be subject to many of the same risks that apply to the automotive, computer and telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. industries, such as general economic conditions, interest rates, consumer spending Consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level. patterns and technological change. Other factors, which may result in materially different results for future periods, include market growth; operating costs operating costs npl → gastos mpl operacionales ; currency exchange rates and devaluations; delays in development, production and marketing of new products; and other factors set forth from time to time in the Company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and other reports filed with the Securities and Exchange Commission. The forward-looking statements in this press release are subject to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. protection provided under the securities law.
Methode Electronics, Inc.
Summary Statement of Income
(In thousands, except per share data)
Three Months Ended
April 30,
2004 2003
--------- ---------
(Unaudited)
Net sales $99,709 $94,131
Other income 146 232
Cost of products sold 78,988 76,585
Impairment of assets - 483
Selling and administrative expenses 10,983 8,096
Income from operations 9,884 9,199
Interest, net 170 300
Other income (expense), net 151 (59)
Income before income taxes 10,205 9,440
Income taxes 2,645 2,785
Net income 7,560 6,655
Basic and Diluted Earnings per Common Share: $0.21 $0.18
Average Number of Common Shares outstanding:
Basic 35,484 36,194
Diluted 35,809 36,366
Year Ended April 30,
2004 2003
--------- ---------
Net sales $358,867 $363,057
Other income 2,132 1,022
Cost of products sold 287,800 292,693
Impairment of assets - 483
Selling and administrative expenses 44,257 37,835
Income from operations 28,942 33,068
Interest, net 553 1,164
Other expense, net (989) (2,275)
Income before income taxes 28,506 31,957
Income taxes 8,825 10,085
Net income 19,681 21,872
Basic and Diluted Earnings per Common Share: $0.55 $0.60
Average Number of Common Shares outstanding:
Basic 35,778 36,170
Diluted 36,083 36,396
Methode Electronics, Inc.
Summary Balance Sheet
(In thousands)
April 30, April 30,
2004 2003
--------- ---------
Cash $61,757 $64,261
Accounts receivable - net 65,360 58,246
Inventories 29,207 31,936
Other current assets 13,031 20,720
--------- ---------
Total Current Assets 169,355 175,163
Property, plant and equipment - net 87,755 82,902
Goodwill - net 19,559 18,077
Intangible assets - net 24,266 25,458
Other assets 13,253 13,874
--------- ---------
Total Assets $314,188 $315,474
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Accounts and notes payable $28,542 $24,515
Other current liabilities 28,718 24,801
--------- ---------
Total current liabilities 57,260 49,316
Other liabilities 8,344 11,153
Shareholders' equity 248,584 255,005
--------- ---------
Total Liabilities and Shareholders' Equity $314,188 $315,474
========= =========
Methode Electronics, Inc.
Summary Statement of Cash Flows
(In thousands)
Year Ended April 30,
2004 2003
-------- ---------
OPERATING ACTIVITIES
Net income $19,681 $21,872
Provision for depreciation and amortization 20,780 16,621
Other 3,665 14,237
-------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 44,126 52,730
INVESTING ACTIVITIES
Purchases of property, plant and equipment (19,304) (23,171)
Acquisitions (3,641) (12,455)
Other 6,091 321
-------- ---------
NET CASH USED IN INVESTING ACTIVITIES (16,854) (35,305)
FINANCING ACTIVITIES
Purchase and retirement of Class B shares (25,788) -
Options exercised 2,767 521
Dividends (8,573) (7,237)
-------- ---------
NET CASH USED IN FINANCING ACTIVITIES (31,594) (6,716)
Effect of foreign exchange rate changes on cash 1,818 3,650
-------- ---------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (2,504) 14,359
Cash and cash equivalents at beginning of period 64,261 49,902
-------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $61,757 $64,261
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