Methode Electronics, Inc. Reports Fiscal 2005 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, 2005. E[acute accent acute accent n. A mark (´) indicating: a. that a vowel is close or tense, as é in French été. b. that a vowel or syllable has a high or rising pitch, as in Chinese or Ancient Greek. c. ]For the fiscal 2005 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 $115.6 million, and net income of $9.7 million, or $0.27 per share. Net income includes a $1.0 million, or $0.03 per share gain on life insurance policies on two recently deceased deceased 1) adj. dead. 2) n. the person who has died, as used in the handling of his/her estate, probate of will and other proceedings after death, or in reference to the victim of a homicide (as: "The deceased had been shot three times. former employees. The effective tax rate in the current quarter was higher, primarily the result of reduced taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. at foreign operations with lower statutory rates, which reduced net income $0.02 per share. This compares to fiscal 2004 fourth quarter net sales of $99.7 million and net income of $7.6 million, or $0.21 per share. Net income for the fiscal 2004 fourth quarter included an after tax charge of $0.5 million, or $0.01 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. , and a $0.5 million, or $0.01 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 this year's fourth quarter, the Company incurred third-party Sarbanes-Oxley compliance costs of $1.6 million, or $0.03 per share, compared to no such costs in the fiscal 2004 fourth quarter. E[acute accent]Customer tooling sales in the fiscal 2005 fourth quarter were $13.3 million compared to $3.7 million in the year ago period. Excluding customer tooling, product sales were seven percent higher at $102.3 million in the fiscal 2005 fourth quarter compared to $96.0 million in the same quarter last year. E[acute accent]For the 2005 fiscal year, Methode reported net sales of $392.7 million and net income of $25.5 million, or earnings of $0.71 per share, which includes the $1.0 million insurance gain. The effective tax rate for the 2005 fiscal year was higher primarily the result of reduced taxable income at foreign operations with lower statutory rates, which reduced net income $0.02 per share. This compares with 2004 fiscal year net sales of $358.9 million and net income of $19.7 million, or $0.55 per share. Net income for the 2004 fiscal year included 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 its 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. and UK manufacturing facilities; and a $0.5 million, or $0.01 per share, benefit for the reduction in the reserve for tax contingencies. For the full year, the Company incurred third-party Sarbanes-Oxley compliance costs of $3.4 million, or $0.06 per share, compared to no such costs in the 2004 fiscal year. E[acute accent]Customer tooling sales, for the 2005 fiscal year, were $17.2 million compared to $11.3 million for the 2004 fiscal year. Excluding customer tooling, product sales in the 2005 fiscal year increased eight percent to $375.5 million, compared to $347.6 million in the 2004 fiscal year. E[acute accent]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. W. 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. , President and Chief Executive Officer, said, "Methode had a strong fourth quarter and our full year results were at the high end of our expectations. In automotive, the European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. and Automotive Safety Technologies business units had solid increases, offsetting lower sales from our domestic Automotive Electronic Controls unit. In non-automotive, our dataMate business had significant revenue growth due primarily to sales of its RJ-45 copper transceiver (TRANSmitter reCEIVER) An electronic device or circuit that transmits and receives analog or digital signals. It comes in many forms; for example, a transponder on a satellite, a network adapter in the computer or the circuits in a cellphone. product. Our Network Bus power distribution business also produced double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. sales growth. To address the needs of its customers, Network Bus has commenced construction of its Asia facility located just outside of 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, and is awaiting delivery of machinery and equipment that will allow Network Bus to mirror its North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. product offering in China." E[acute accent]Mr. Duda continued, "Overall in fiscal 2005, Methode's automotive business provided modest sales growth. These automotive businesses performed well this year despite the continuing demand to reduce selling prices and upward pressure on direct material costs, while operating in a difficult environment of reduced vehicle sales and market share loss by Methode's traditional North American OEMs. Our ongoing focus on 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. , automation, and migration to lower cost manufacturing regions has helped our automotive businesses sustain their performance in what has been a challenging year for Detroit Detroit, city, United States Detroit (dĭtroit`), city (1990 pop. 1,027,974), seat of Wayne co., SE Mich., on the Detroit River and between lakes St. Clair and Erie; inc. as a city 1815. ." E[acute accent]Selling and administrative expense for the 2005 fiscal year represented 13.0 percent of net sales, compared to 12.3 percent in the 2004 fiscal year. This increase is due primarily to expenses such as third-party Sarbanes-Oxley compliance costs, amortization of stock-based compensation, increased research and development costs, expanded sales presence in the Connectivity business, and corporate governance Corporate Governance The relationship between all the stakeholders in a company. This includes the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy, and rule of law. initiatives. In the 2004 fiscal year, certain costs associated with eliminating Methode's dual-class stock dual-class stock See stock class. structure increased selling and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. by one percent of net sales. E[acute accent]Balance Sheet and Cash Flow E[acute accent]The cash balance at 2006 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 $87.1 million. This is a $25.4 million increase for the fiscal year compared to a fiscal 2004 decrease in cash of $2.5 million. In fiscal 2004 Methode used $25.8 million to retire the class B common stock. Excluding this use of cash, year-over-year cash generation was relatively consistent. Inventories are up $12.4 million from fiscal 2004, primarily due to automotive tooling projects in process, the Cableco acquisition, and the China expansion. E[acute accent]Dividend E[acute accent]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 July: see month. 29, 2005 to shareholders of record at the close of business on July 15, 2005. E[acute accent]Business Outlook E[acute accent]Methode is forecasting 2006 fiscal year net sales of between $385.0 million and $400.0 million with net income in the range of $0.56 and $0.63 per share. Automotive Safety Technology sales are expected to increase, as automakers are required 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 airbag Noun a safety device in a car, consisting of a bag that inflates automatically in an accident to protect the driver or passenger airbag n → airbag m inv deployment on all vehicles for the 2006 model year and beyond. Network Bus anticipates continued growth from its domestic business with additional increases coming from Asia as well as the joint marketing capability gained from the Cableco acquisition. These increases will be significantly offset by negotiated price reductions and forecasted lower sales from Methode's traditional North American automotive OEMs along with the Company's continued transition away from less profitable programs. Methode has targeted approximately $3.2 million for new research and development initiatives in the coming fiscal year as it continues to develop products that will provide a higher value proposition to its customers and open doors to new OEMs and Tier 1 suppliers. Additional expenses are also anticipated from the China manufacturing project of Network Bus Products. In fiscal 2006, Methode will incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. increased expense for the amortization of stock-based compensation awards. E[acute accent]For the first quarter of fiscal year 2006 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 $85.0 million to $90.0 million with net income between $0.10 and $0.12 per share. E[acute accent]Conference Call E[acute accent]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 23, 2005 at 10:00 a.m. Central Time. You may participate on the conference call by dialing 1-877-407-8031 for domestic callers or 201-689-8031 for International callers. Methode also invites you to listen to the webcast of this call by visiting the Company's website at 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 1-877-660-6853 for domestic callers or 201-612-7415 for International callers, both using playback Playback could mean:
E[acute accent]About Methode Electronics E[acute accent]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. E[acute accent]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. E[acute accent]Certain statements in this press release dated June 23, 2005, containing information on Methode's fourth quarter and year-end reporting periods for fiscal 2005, and offering guidance for its first quarter and full year reporting periods for fiscal 2006, 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. The forward-looking statements in this press release are subject to the safe harbor protection provided under the securities law. All information in this press release is as of June 23, 2005. Methode undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations.
Methode Electronics, Inc.
Financial Highlights
(In thousands, except per share data)
Three Months Ended
April 30,
2005 2004
----------- ----------
Net sales $115,581 $99,709
Other income 501 146
Cost of products sold 89,158 78,988
Selling and administrative expenses 12,935 10,983
Income from operations 13,989 9,884
Interest, net 438 170
Other income, net 1,064 151
Income before income taxes 15,491 10,205
Income taxes 5,764 2,645
Net income 9,727 7,560
Basic Earnings per Common Share: $0.27 $0.21
Diluted Earnings per Common Share: $0.27 $0.21
Average Number of Common Shares outstanding:
Basic 36,130 35,484
Diluted 36,415 35,809
Year Ended April 30,
2005 2004
----------- ----------
Net sales $392,725 $358,867
Other income 1,720 2,132
Cost of products sold 306,618 287,800
Selling and administrative expenses 51,185 44,257
Income from operations 36,642 28,942
Interest, net 1,126 553
Other income (expense), net 679 (989)
Income before income taxes 38,447 28,506
Income taxes 12,914 8,825
Net income 25,533 19,681
Basic Earnings per Common Share: $0.71 $0.55
Diluted Earnings per Common Share: $0.71 $0.55
Average Number of Common Shares outstanding:
Basic 35,842 35,778
Diluted 36,153 36,083
Methode Electronics, Inc.
Financial Highlights
(In thousands)
April 30, April 30,
2005 2004
----------- ----------
Cash $87,142 $61,757
Accounts receivable - net 65,699 65,360
Inventories 41,583 29,207
Other current assets 10,908 13,031
----------- ----------
Total Current Assets 205,332 169,355
Property, plant and equipment - net 92,640 87,755
Goodwill - net 24,738 19,559
Intangible assets - net 20,367 24,266
Other assets 13,604 13,253
----------- ----------
Total Assets $356,681 $314,188
=========== ==========
Accounts and notes payable $32,406 $28,542
Other current liabilities 32,819 28,718
----------- ----------
Total current liabilities 65,225 57,260
Other liabilities 8,934 8,344
Shareholders' equity 282,522 248,584
----------- ----------
Total Liabilities and Shareholders' Equity $356,681 $314,188
=========== ==========
Methode Electronics, Inc.
Financial Highlights
(In thousands)
Year Ended April 30,
2005 2004
----------- ----------
OPERATING ACTIVITIES
Net income $25,533 $19,681
Provision for depreciation 17,123 16,867
Amortization of intangibles 4,311 3,913
Amortization of restricted stock awards 1,352 -
Other (3,365) 3,665
----------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 44,954 44,126
INVESTING ACTIVITIES
Purchases of property, plant and equipment (18,982) (19,304)
Acquisitions (4,374) (3,641)
Proceeds from life insurance policies 2,309
Other (6) 6,091
----------------------
NET CASH USED IN INVESTING ACTIVITIES (21,053) (16,854)
FINANCING ACTIVITIES
Purchase and retirement of Class B shares - (25,788)
Proceeds from exercise of stock options 6,462 2,767
Dividends (7,252) (8,573)
----------------------
NET CASH USED IN FINANCING ACTIVITIES (790) (31,594)
Effect of foreign exchange rate changes on cash 2,274 1,818
----------------------
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 25,385 (2,504)
Cash and cash equivalents at beginning of period 61,757 64,261
----------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $87,142 $61,757
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