Methode Electronics Inc. (MEI, Financial) filed Quarterly Report for the period ended 2008-11-01.
Methode Electronics Inc. manufactures component devices world-wide for Original Equipment Manufacturers of information processing and networking equipment voice and data communications systems consumer electronics automobiles aerospace vehicles and industrial equipment. Products employ electrical electronic and optical technologies as sensors interconnections and controls. The company manufactures bus systems and provides independent laboratory services for qualification testing and certification of electronic and optical components. Methode Electronics Inc. has a market cap of $328.61 million; its shares were traded at around $9.62 with a P/E ratio of 7.12 and P/S ratio of 0.6. The dividend yield of Methode Electronics Inc. stocks is 3.28%. Methode Electronics Inc. had an annual average earning growth of 0.7% over the past 10 years.
net sales declined $14.6 million or 16.3% to $75.2 million in the second quarter of fiscal 2009 from $89.8 million in the second quarter of fiscal 2008. The decline is attributable to the softening of the global economic environment, especially the direct effect on the North American automotive industry. Recently, the Detroit 3 automakers reported sales volume declines of between 30 to 40 percent. The Automotive segment net sales were negatively impacted by anticipated lower Chrysler sales, but, were also negatively impacted by price increases of $2.2 million in the second quarter of fiscal 2009, compared to $3.7 million in the second quarter of fiscal 2008. In July 2007, we decided to exit production for certain Chrysler products at the expiration of our manufacturing commitment, but, at the request of the customer, agreed to produce until production was transferred to other suppliers. The transfer of the Chrysler product is expected to be completed by the end of the third quarter of fiscal 2009. The Interconnect segment net sales increased $1.7 million, or 5.6% to $32.0 million in the second quarter of fiscal 2009 as compared to $30.3 million in the second quarter of fiscal 2008. The increase is primarily due to the acquisition of Hetronic, purchased on September 30, 2008. Translation of foreign operations net sales in the three months ended November 1, 2008 increased reported net sales by $0.8 million or 0.6% due to currency rate fluctuations.
Restructuring. On January 24, 2008, we announced a restructuring of our U.S.-based automotive operations and the decision to discontinue producing certain legacy products in the Interconnect segment. During the fiscal quarter ended November 1, 2008, we recorded a restructuring charge of $6.3 million, which consisted of $1.6 million for employee severance, $4.4 million for impairment and accelerated depreciation for buildings and improvements and machinery and equipment and $0.3 million relating to professional fees.
Interest Income, Net. Net interest income decreased 33.3% in the three months ended November 1, 2008 to $0.4 million as compared to $0.6 million in the three months ended October 27, 2007. The average cash balance was $94.6 million during the three months ended November 1, 2008 as compared to $79.3 million during the three months ended October 27, 2007. The average interest rate earned in the three months ended November 1, 2008 was 2.38% compared to 3.35% in the three months ended October 27, 2007. The portfolio was weighted more heavily to tax-exempt investments in the second quarter of fiscal 2009 as compared to the second quarter of fiscal 2008. The
At November 1, 2008, approximately $5.9 million was invested in an enhanced cash fund sold as an alternative to traditional money-market funds. We have historically invested a portion of our on hand cash balances in this fund. These investments are subject to credit, liquidity, market and interest rate risk. Based on the information available to us, we have estimated the fair value of this fund at $0.882 per unit as of November 1, 2008. During the quarter ended November 1, 2008 we recorded a loss of $0.5 million, of which $0.2 million was realized on partial redemptions of $3.8 million, and $0.3 million was unrealized.
Net Sales. Automotive segment net sales decreased $14.6 million, or 16.3%, to $75.2 million for the three months ended November 1, 2008 from $89.8 million for the three months ended October 27, 2007. The decline is attributable to the softening of the global economic environment, especially the effect on the North American automotive industry. Recently, the Detroit 3 automakers reported volume declines of between 30 to 40 percent. Net sales have declined in the second quarter of fiscal 2009 as compared to fiscal 2008 by 21.6% in North America, 10.1% in Europe and 11.1% in Asia. The Automotive segment net sales were negatively impacted by anticipated lower Chrysler sales, but, were also negatively impacted by price increases of $2.2 million in the second quarter of fiscal 2009, compared to $3.7 million in the second quarter of fiscal 2008. In July 2007, we decided to exit production for certain Chrysler products at the expiration of our manufacturing commitment, but, at the request of the customer, agreed to produce until production was transferred to other suppliers. The transfer of the Chrysler product is expected to be completed by the end of the third quarter of fiscal 2009. Translation of foreign operations net sales in the three months ended November 1, 2008 increased reported net sales by $0.5 million, or 0.6%, due to currency rate fluctuations.
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Methode Electronics Inc. manufactures component devices world-wide for Original Equipment Manufacturers of information processing and networking equipment voice and data communications systems consumer electronics automobiles aerospace vehicles and industrial equipment. Products employ electrical electronic and optical technologies as sensors interconnections and controls. The company manufactures bus systems and provides independent laboratory services for qualification testing and certification of electronic and optical components. Methode Electronics Inc. has a market cap of $328.61 million; its shares were traded at around $9.62 with a P/E ratio of 7.12 and P/S ratio of 0.6. The dividend yield of Methode Electronics Inc. stocks is 3.28%. Methode Electronics Inc. had an annual average earning growth of 0.7% over the past 10 years.
Highlight of Business Operations:
On January 24, 2008, we announced a restructuring of our U.S.-based automotive operations and a decision to discontinue producing certain legacy electronic Interconnect products. The Automotive and Interconnect restructuring is expected to be completed during fiscal 2010. During the three months ended November 1, 2008, we recorded a restructuring charge of $6,284, which consisted of $1,609 for employee severance, $4,350 in impairment and accelerated depreciation for buildings and improvements and machinery and equipment, and $325 relating to professional fees. During the six months ended November 1, 2008, we recorded a restructuring charge of $11,201, which consisted of $4,430 for employee severance, $5,900 in impairment and accelerated depreciation for buildings and improvements and machinery and equipment, $153 in inventory write-downs and $718 relating to professional fees. We record the expense in the restructuring section of our consolidated statement of income. We estimate that we will record additional pre-tax charges through fiscal 2010 of between $5,000 and $10,000, of which $2,000 to $3,000 will relate to the termination of approximately 550 employees and the cost of one-time employee benefits,net sales declined $14.6 million or 16.3% to $75.2 million in the second quarter of fiscal 2009 from $89.8 million in the second quarter of fiscal 2008. The decline is attributable to the softening of the global economic environment, especially the direct effect on the North American automotive industry. Recently, the Detroit 3 automakers reported sales volume declines of between 30 to 40 percent. The Automotive segment net sales were negatively impacted by anticipated lower Chrysler sales, but, were also negatively impacted by price increases of $2.2 million in the second quarter of fiscal 2009, compared to $3.7 million in the second quarter of fiscal 2008. In July 2007, we decided to exit production for certain Chrysler products at the expiration of our manufacturing commitment, but, at the request of the customer, agreed to produce until production was transferred to other suppliers. The transfer of the Chrysler product is expected to be completed by the end of the third quarter of fiscal 2009. The Interconnect segment net sales increased $1.7 million, or 5.6% to $32.0 million in the second quarter of fiscal 2009 as compared to $30.3 million in the second quarter of fiscal 2008. The increase is primarily due to the acquisition of Hetronic, purchased on September 30, 2008. Translation of foreign operations net sales in the three months ended November 1, 2008 increased reported net sales by $0.8 million or 0.6% due to currency rate fluctuations.
Restructuring. On January 24, 2008, we announced a restructuring of our U.S.-based automotive operations and the decision to discontinue producing certain legacy products in the Interconnect segment. During the fiscal quarter ended November 1, 2008, we recorded a restructuring charge of $6.3 million, which consisted of $1.6 million for employee severance, $4.4 million for impairment and accelerated depreciation for buildings and improvements and machinery and equipment and $0.3 million relating to professional fees.
Interest Income, Net. Net interest income decreased 33.3% in the three months ended November 1, 2008 to $0.4 million as compared to $0.6 million in the three months ended October 27, 2007. The average cash balance was $94.6 million during the three months ended November 1, 2008 as compared to $79.3 million during the three months ended October 27, 2007. The average interest rate earned in the three months ended November 1, 2008 was 2.38% compared to 3.35% in the three months ended October 27, 2007. The portfolio was weighted more heavily to tax-exempt investments in the second quarter of fiscal 2009 as compared to the second quarter of fiscal 2008. The
At November 1, 2008, approximately $5.9 million was invested in an enhanced cash fund sold as an alternative to traditional money-market funds. We have historically invested a portion of our on hand cash balances in this fund. These investments are subject to credit, liquidity, market and interest rate risk. Based on the information available to us, we have estimated the fair value of this fund at $0.882 per unit as of November 1, 2008. During the quarter ended November 1, 2008 we recorded a loss of $0.5 million, of which $0.2 million was realized on partial redemptions of $3.8 million, and $0.3 million was unrealized.
Net Sales. Automotive segment net sales decreased $14.6 million, or 16.3%, to $75.2 million for the three months ended November 1, 2008 from $89.8 million for the three months ended October 27, 2007. The decline is attributable to the softening of the global economic environment, especially the effect on the North American automotive industry. Recently, the Detroit 3 automakers reported volume declines of between 30 to 40 percent. Net sales have declined in the second quarter of fiscal 2009 as compared to fiscal 2008 by 21.6% in North America, 10.1% in Europe and 11.1% in Asia. The Automotive segment net sales were negatively impacted by anticipated lower Chrysler sales, but, were also negatively impacted by price increases of $2.2 million in the second quarter of fiscal 2009, compared to $3.7 million in the second quarter of fiscal 2008. In July 2007, we decided to exit production for certain Chrysler products at the expiration of our manufacturing commitment, but, at the request of the customer, agreed to produce until production was transferred to other suppliers. The transfer of the Chrysler product is expected to be completed by the end of the third quarter of fiscal 2009. Translation of foreign operations net sales in the three months ended November 1, 2008 increased reported net sales by $0.5 million, or 0.6%, due to currency rate fluctuations.
Read the The complete Report
More on MEI:
Gurus buys and sells of MEI
10-year financial history of MEI.
Insider buys/sells of MEI.
