Methode Electronics, Inc. Reports Third Quarter Fiscal Year 2006 Results.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), a global manufacturer of electronic 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, today announced operating results for the fiscal 2006 third quarter ended January January: see month. 31, 2006. Methode reported third quarter fiscal 2006 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 $95.1 million, and net income of $2.8 million, or $0.08 per share. This compares with net sales of $92.4 million and net income of $4.7 million, or $0.13 per share in last year's third quarter. Customer paid tooling sales this quarter were $2.9 million compared to $2.0 million in the prior-year period. In the first nine months of fiscal 2006, net sales were $305.3 million, compared to $277.1 million from the same period last year. Net income was $12.8 million in the first nine months of fiscal year 2006, or $0.35 per share, compared to $15.8 million, or $0.44 per share last year. Customer paid tooling sales for the nine month period were $8.8 million compared to $3.9 million in last year's nine month period. For the third quarter of fiscal 2006, as a percent of sales, selling and administrative expense was 13.9 percent, 1.4 percentage points lower than the same period last year. This is primarily the result of less third-party Sarbanes-Oxley expense in fiscal 2006. For the first nine months of fiscal 2006, as a percent of sales, selling and administrative expense remained relatively flat, with lower third party Sarbanes-Oxley expense offset by the second quarter charge for the Delphi bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most and higher stock-based compensation expense. Cost of products sold increased to 81.6 percent of net sales in the third quarter of fiscal 2006 compared to 77.8 percent from the prior-year period. This reflects lower production volumes and pricing pressure from our traditional North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. automotive OEMs, higher raw material and energy prices and the continued ramp-up for automotive programs and power distribution start-up Start-up The earliest stage of a new business venture. in 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. . Methode's 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. automotive facility increased sales 27.7 percent in the third quarter and 59.0 percent in the first nine months of fiscal year 2006 compared to the prior-year period. However, it has failed to reach anticipated profitability primarily as the result of new product launch issues. Management and operational changes are being implemented to facilitate Scotland's move to profitability. 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 for Methode Electronics, said: "We exceeded our sales expectations for the quarter. The ability to do so in the current automotive environment highlights Methode's diverse product mix, which spans several key industries. While net income was within our previously announced guidance range it did not keep pace with our sales growth. Our goals to move Shanghai beyond its start-up mode and to resolve launch issues in our Scotland operation provide us with solid opportunities for future income improvement." Methode expects to achieve fiscal year 2006 sales results between $405 million and $410 million. Fiscal year 2006 earnings per share are expected to be in the range of $0.53 to $0.55, which reflects the second quarter $0.06 per share, Delphi bad-debt provision but does not include the potential tax expense for any cash repatriation Repatriation The process of converting a foreign currency into the currency of one's own country. Notes: If you are American, converting British Pounds back to U.S. dollars is an example of repatriation. under the American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Jobs Creation Act of 2004, which we continue to analyze and evaluate. Methode Receives Shingo Prize for Excellence in Manufacturing The Shingo Prize for Excellence in Manufacturing is awarded annually to by Utah State University to North American companies that "achieve world-class manufacturing status." It was established in 1988 and is named in honor of Shigeo Shingo. External links
Methode is proud to announce that its Monterrey Monterrey (mōntārā`), city (1990 pop. 1,068,996), capital of Nuevo León state, NE Mexico, the third largest city of Mexico. Located c.150 mi (240 km) S of Laredo, Tex. , 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. , facility has been awarded the coveted cov·et v. cov·et·ed, cov·et·ing, cov·ets v.tr. 1. To feel blameworthy desire for (that which is another's). See Synonyms at envy. 2. To wish for longingly. See Synonyms at desire. Shingo Prize for Excellence in Manufacturing. Methode was one of only 10 companies in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. to receive this award. The Shingo Shingo can refer to:
Conference Call As previously announced, the Company will conduct a conference call led by its President and Chief Executive Officer, Donald W. Duda, and Chief Financial Officer, Douglas A. Koman, on March 9, 2006, at 10:00 a.m. Central Time. Methode 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. You may participate on the conference call by dialing 877-407-8031 for domestic callers and 201-689-8031 for international. A telephone replay of the call will be available for seven days, by dialing 877-660-6853 for domestic callers and 201-612-7415 for international, both using the playback Playback could mean:
About Methode Electronics Methode Electronics, Inc. is a global manufacturer of electronic component and subsystem 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 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 March 9, 2006, containing information on Methode's third quarter reporting period for fiscal 2006 and offering guidance for its fourth quarter and full year reporting periods for fiscal 2006 are forward-looking statements that are subject to certain risks and uncertainties. Our business is highly dependent upon three large automotive customers and specific makes and models of automobiles. 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 changes. Other factors, which may result in materially different results for future periods, include Delphi Corporation's bankruptcy petition; other significant customer bankruptcy filings; restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). , operational improvement and cost reduction programs currently under review by Methode; the current macroeconomic mac·ro·ec·o·nom·ics n. (used with a sing. verb) The study of the overall aspects and workings of a national economy, such as income, output, and the interrelationship among diverse economic sectors. environment, including higher petroleum and copper prices effecting material and components used by Methode; potential manufacturing plant shut-downs by automotive customers, potential strikes at automotive customers; and significant fluctuations in the demand for certain automobile models. In addition, 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 our reports filed with the Securities and Exchange Commission, impact our business. Any of these factors could cause our actual results to differ materially from those described in the forward-looking statements. 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 laws. All information in this press release is as of March 9, 2006. 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, unaudited)
Three Months Ended
January 31,
2006 2005
----------- ---------
Net sales $95,050 $92,381
Other income 103 373
Cost of products sold 77,597 71,844
Selling and administrative expenses 13,214 14,133
Income from operations 4,342 6,777
Interest, net 647 326
Other, net (719) (248)
Income before income taxes 4,270 6,855
Income taxes 1,460 2,150
Net income 2,810 4,705
Basic and Diluted Earnings per Common Share $0.08 $0.13
Average Number of Common Shares outstanding:
Basic 36,264 36,043
Diluted 36,413 36,383
Nine Months Ended
January 31,
2006 2005
----------- ---------
Net sales $305,318 $277,145
Other income 661 1,219
Cost of products sold 245,419 217,461
Selling and administrative expenses 42,686 38,250
Income from operations 17,874 22,653
Interest, net 1,655 688
Other, net (625) (385)
Income before income taxes 18,904 22,956
Income taxes 6,145 7,150
Net income 12,759 15,806
Basic and Diluted Earnings per Common Share $0.35 $0.44
Average Number of Common Shares outstanding:
Basic 36,250 35,751
Diluted 36,451 36,071
Summary Balance Sheets
(In thousands)
January April
31, 30,
2006 2005
----------- ---------
(Unaudited)
Cash $79,379 $87,142
Accounts receivable -- net 60,023 65,699
Inventories 50,366 41,583
Other current assets 13,205 10,908
----------- ---------
Total Current Assets 202,973 205,332
Property, plant and equipment -- net 90,568 92,640
Goodwill -- net 28,868 24,738
Intangible assets -- net 18,576 20,367
Other assets 15,713 13,604
----------- ---------
Total Assets $356,698 $356,681
=========== =========
Accounts and notes payable $30,967 $32,406
Other current liabilities 29,446 32,819
----------- ---------
Total current liabilities 60,413 65,225
Other liabilities 8,861 8,934
Shareholders' equity 287,424 282,522
----------- ---------
Total Liabilities and Shareholders' Equity $356,698 $356,681
=========== =========
Summary Statements of Cash Flows (Unaudited)
(In thousands)
Nine Months Ended
January 31,
2006 2005
-------- --------
Operating Activities:
Net income $12,759 $15,806
Provision for depreciation 13,277 12,925
Amortization of intangibles 4,184 3,214
Amortization of restricted stock awards 1,777 1,003
Provision for losses on accounts receivable 3,150 33
Deferred income taxes (3,404) 475
Changes in operating assets and liabilities (10,313) 1,700
Other 318 29
-------- --------
Net Cash Provided by Operating Activities 21,748 35,185
Investing Activities:
Purchases of property, plant and equipment (14,689) (15,675)
Proceeds from sale of building 1,712 -
Acquisitions (5,127) (2,671)
Acquisitions of technology licenses (2,402) -
Other (452) 88
-------- --------
Net Cash Used in Investing Activities: (20,958) (18,258)
Financing Activities
Options exercised 598 5,792
Dividends (5,600) (5,399)
Repurchase of common stock (1,664) -
-------- --------
Net Cash Provided by (Used in) Financing Activities (6,666) 393
Effect of foreign exchange rate changes on cash (1,887) 2,224
-------- --------
Increase (Decrease) in Cash and Cash Equivalents (7,763) 19,544
Cash and cash equivalents at beginning of period 87,142 61,757
-------- --------
Cash and Cash Equivalents at End of Period $79,379 $81,301
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