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Methode Electronics Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: September 1, 2011 07:52AM

Methode Electronics Inc. (MEI) filed Quarterly Report for the period ended 2011-07-30. Methode Electronics Inc. has a market cap of $361.4 million; its shares were traded at around $9.77 with a P/E ratio of 17.8 and P/S ratio of 0.8. The dividend yield of Methode Electronics Inc. stocks is 2.9%.



Highlight of Business Operations:

Net Sales. Consolidated net sales increased $11.8 million, or 11.9%, to $110.8 million for the three months ended July 30, 2011, from $99.0 million for the three months ended July 31, 2010. The Automotive segment net sales increased $12.7 million, or 25.4%, to $62.7 million for the first quarter of fiscal 2012, from $50.0 million for the first quarter of fiscal 2011. The Interconnect segment net sales decreased $2.2 million, or 6.4%, to $32.4 million for the first quarter of fiscal 2012, compared to $34.6 million for the first quarter of fiscal 2011. The Power Products segment net sales increased $1.3 million, or 11.3%, to $12.8 million for the first quarter of fiscal 2012, as compared to $11.5 million for the first quarter of fiscal 2011. The Other segment net sales increased $0.1 million, or 3.6%, to $2.9 million for the first quarter of fiscal 2012, as compared to $2.8 million for the first quarter of fiscal 2011. Translation of foreign operations net sales for the three months ended July 30, 2011 increased reported net sales by $2.6 million or 2.3% due to average currency rates in the first quarter of fiscal 2012, compared to the average currency rates in the first quarter of fiscal 2011.

Cost of Products Sold. Consolidated cost of products sold increased $11.3 million, or 14.2%, to $90.8 million for the three months ended July 30, 2011, compared to $79.5 million for the three months ended July 31, 2010. Consolidated cost of products sold as a percentage of sales were 81.9% for the first quarter of fiscal 2012, compared to 80.3% for the first quarter of fiscal 2011. The Automotive segment experienced additional costs for design, development, engineering and launch costs of $1.2 million related to new programs that will not begin production until fiscal 2013 and costs of $0.6 million related to a vendor's production and delivery issues. In addition, the Automotive segment experienced higher utility costs in the first quarter of fiscal 2012. The Power segment experienced increased costs of $0.6 million for new product development, specifically for an on board charger for an electric truck.

Selling and Administrative Expenses. Selling and administrative expenses increased by $3.0 million, or 19.2%, to $18.6 million for the three months ended July 30, 2011, compared to $15.6 million for the three months ended July 31, 2010. The increase is primarily due to higher non-executive performance based compensation and severance of $1.4 million and stock award amortization of $0.8 million. Legal expenses related to the Delphi litigation decreased by $0.6 million to $0.8 million in the first quarter of fiscal 2012, compared to $1.5 million in the first quarter of fiscal 2011. However, despite the decline in Delphi legal expenses, the total legal expense for the company was flat in the first quarter of fiscal 2012, compared to the first quarter of fiscal 2011. Selling and administrative expenses as a percentage of net sales increased to 16.8% for the three months ended July 30, 2011 from 15.8% for the three months ended July 31, 2010.

Income Tax Expense. Income tax expense decreased by $0.6 million to zero for the three months ended July 30, 2011, compared to $0.6 million for the three months ended July 31, 2010. During the first quarter of fiscal 2012, a benefit of $1.1 million was recorded relating to tax credits from our Malta facility, which was offset by $1.1 million of income tax expense related to foreign profits. The three months ended July 31, 2010 includes taxes on foreign profits of $0.5 million and $0.1 million related to Non-Federal U.S. taxes.

Net Sales. Automotive segment net sales increased $12.7 million, or 25.4%, to $62.7 million for the three months ended July 30, 2011, from $50.0 million for the three months ended July 31, 2010. Net sales increased in North America, Europe and Asia by 123.4%, 18.8% and 8.0%, respectively in the first quarter of fiscal 2012, compared to the first quarter of fiscal 2011. The increase in North America is due to increased sales for our Ford Center Console Program. The increase in Asia is due to increases in our transmission lead-frame and steering angle sensor products and the increase in Europe is primarily due to the euro strengthening against the U.S. dollar. Included in net sales is other income, which consisted primarily of earnings from engineering design fees and royalties. Other income increased $0.2 million, or 28.6%, to $0.9 million for the three months ended July 30, 2011, from $0.7 million for the three months ended July 31, 2010. Translation of foreign operations net sales for the three months ended July 30, 2011 increased reported net sales by $2.6 million, or 4.3%, due to average currency rates in the first quarter of fiscal 2012, compared to the average currency rates in the first quarter of fiscal 2011.

Selling and Administrative Expenses. Selling and administrative expenses decreased $0.1 million, or 1.4%, to $7.1 million for the three months ended July 30, 2011, compared to $7.2 million for the three months ended July 31, 2010. Legal expenses related to the Delphi litigation decreased $0.6 million, to $0.8 million for the first quarter of fiscal 2012, compared to $1.5 million for the first quarter of fiscal 2011. The lower Delphi legal expenses were partially offset by non-executive performance based compensation for the first quarter of fiscal 2012, compared to the first quarter of fiscal 2011. Selling and administrative expenses as a percentage of net sales were 11.3% for the three months ended July 30, 2011 and 14.4% for the three months ended July 31, 2010.

Read the The complete Report



Stocks Discussed: MEI,
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