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Methode Electronics Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: September 2, 2010 07:10AM

Methode Electronics Inc. (MEI) filed Quarterly Report for the period ended 2010-07-31. Methode Electronics Inc. has a market cap of $359.3 million; its shares were traded at around $9.42 with a P/E ratio of 16.6 and P/S ratio of 0.9. The dividend yield of Methode Electronics Inc. stocks is 2.9%.

MEI is in the portfolios of Chuck Royce of Royce& Associates, James Barrow of Barrow, Hanley, Mewhinney & Strauss, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Net Sales. Consolidated net sales increased $8.5 million, or 9.5%, to $98.3 million for the three months ended July 31, 2010 from $89.8 million for the three months ended August 1, 2009. The Automotive segment net sales decreased $1.9 million, or 3.7%, to $49.3 million for the first quarter of fiscal 2011 from $51.2 million for the first quarter of fiscal 2010. The Interconnect segment net sales increased $9.9 million, or 40.1%, to $34.6 million for the first quarter of fiscal 2011 as compared to $24.7 million for the first quarter of fiscal 2010. The Power Products segment net sales increased $0.3 million, or 2.7%, to $11.5 million for the first quarter of fiscal 2011 as compared to $11.2 million for the first quarter of fiscal 2010. The Other segment net sales increased $0.1 million, or 3.7%, to $2.8 million for the first quarter of fiscal 2011, as compared to $2.7 million in the first quarter of fiscal 2010. Translation of foreign operations net sales for the three months ended July 31, 2010 decreased reported net sales by $1.8 million or 2.0% due to average currency rates in the first quarter of fiscal 2011, compared to the average currency rates in the first quarter of fiscal 2010.

Restructuring. During fiscal 2010, we completed all of our planned restructuring initiatives. During the first quarter of fiscal 2010, we recorded a total restructuring charge of $3.6 million, which consisted of $1.9 for employee severance, $1.4 for accelerated depreciation and $0.3 million for other costs.

Selling and Administrative Expenses. Selling and administrative expenses decreased $0.3 million, or 1.9%, to $15.6 million for the three months ended July 31, 2010, compared to $15.9 million for the three months ended August 1, 2009. The decrease is primarily due to lower bonus, legal fees unrelated to the Delphi litigation, and other professional fees in the first quarter of fiscal 2011, compared to the first quarter of fiscal 2010. This was partially offset by higher legal expenses related to the Delphi supply agreement and patent dispute. The Delphi related legal fees in first quarter of fiscal 2011 were $1.5 million, compared to $0.4 million in the first quarter of fiscal 2010. Selling and administrative expenses as a percentage of net sales decreased to 15.9% for the three months ended July 31, 2010 from 17.7% for the three months ended August 1, 2009.

Interest Expense, Net. Interest expense, net was zero for the three months ended July 31, 2010, compared to $0.1 million for the three months ended August 1, 2009. Interest income was $0.2 million for the three months ended July 31, 2010, compared to $0.3 million for the three months ended August 1, 2009. The average cash balance was $63.4 million during the three months ended July 31, 2010 as compared to $61.1 million during the three months ended August 1, 2009. The average interest rate earned for the three months ended July 31, 2010 was 1.01%, compared to 0.39% in the three months ended August 1, 2009. Interest expense was $0.2 million for both the three months ended July 31, 2010 and August 1, 2009.

Other Income/(Expense), Net. Other income/(expense), net increased $1.2 million to income of $0.8 million for the three months ended July 31, 2010 as compared to an expense of $0.4 million for the three months ended August 1, 2009. The income of $0.8 million for the three months ended July 31, 2010 included income of $1.2 million for life insurance polices in connection with an employee deferred compensation plan. The loss of $0.4 million for the three months ended August 1, 2009 included income of $0.3 million related to an enhanced cash fund. All other amounts for both the three months ended July 31, 2010 and August 1, 2009, relate to currency rate fluctuations. The functional currencies of these operations are the British pound, Chinese yuan, Czech koruna, Euro, Indian Rupee, Mexican peso, Singapore dollar and Swiss Franc. Some foreign operations have transactions denominated in currencies other than their functional currencies, primarily sales in U.S. dollars and Euros, creating exchange rate sensitivities.

July 31, 2010 includes taxes on foreign profits of $0.5 million and $0.1 million related to Non-Federal U.S. taxes. The three months ended August 1, 2009 includes taxes on foreign profits of $0.2 million and $0.1 million related to non-Federal U.S. taxes.

Read the The complete Report



Stocks Discussed: MEI,
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