Methode Electronics, Inc. Updates Sales Guidance and Initiates Earnings Guidance for Fiscal Second Quarter 2021

Rhea-AI Summary

Methode Electronics, Inc. (NYSE: MEI) updated its fiscal Q2 2021 guidance, expecting net sales between $270 million and $285 million, an increase from the previous estimate of $230 million to $250 million. The company also forecasts diluted EPS of $0.71 to $0.81, accounting for $3 million in restructuring costs. This revised projection is driven by improved customer demand, particularly in the automotive sector, despite ongoing risks related to COVID-19 disruptions.

Positive

• Increased revenue guidance from $230-$250 million to $270-$285 million.
• Initiated diluted EPS guidance of $0.71 to $0.81.
• Improvement in customer demand forecasts across multiple sectors.

Negative

• Ongoing risks from potential COVID-19 disruptions.
• Approximately $3 million in restructuring costs impacting EPS.

CHICAGO, Sept. 24, 2020 (GLOBE NEWSWIRE) -- Methode Electronics, Inc. (NYSE: MEI), a global developer of custom engineered and application specific products and solutions, announced an update today to its fiscal second quarter 2021 financial guidance.

The company expects net sales in the fiscal second quarter of 2021 to be in the range of $270 to $285 million, as compared to the original range of $230 to $250 million provided on September 3, 2020.

In addition, the company initiated fiscal second quarter 2021 guidance for diluted earnings per share in the range of $0.71 to $0.81. This guidance assumes no discrete tax impacts and includes approximately $3 million of restructuring costs, or $0.06 per diluted share, related to actions taken to reduce overall costs and improve operational profitability.

This financial guidance reflects the company’s current estimates and is based upon management's expectations regarding a variety of factors and involve a number of risks and market uncertainties, including, but not limited to, those identified in its fiscal first quarter 2021 results released on September 3, 2020, and its most recent 10-Q filing.

President and Chief Executive Officer Donald W. Duda said, “The recent stabilization and meaningful increase in customer demand forecasts have provided us the confidence to raise our sales guidance and initiate earnings guidance. While the increase in activity is mainly in the automotive markets, we are experiencing improvement across most of our other businesses.”

Mr. Duda added, “While our customers still face the risk of COVID-19 related disruptions, I am pleased that the strength of our global manufacturing operations allows us to fully meet increasing customer requirements.”

About Methode Electronics, Inc.
Methode Electronics, Inc. (NYSE: MEI) is a global developer of custom engineered and application specific products and solutions with manufacturing, design and testing facilities in Belgium, Canada, China, Egypt, Germany, India, Italy, Lebanon, Malta, Mexico, the Netherlands, Singapore, Switzerland, the United Kingdom and the United States. We design, manufacture and market devices employing electrical, radio remote control, electronic, LED lighting and sensing technologies. Our business is managed on a segment basis, with those segments being Automotive, Industrial, Interface and Medical.

Our components are found in the primary end-markets of the aerospace, appliance, construction, consumer and industrial equipment, communications (including information processing and storage, networking equipment, wireless and terrestrial voice/data systems), medical, rail, consumer automotive, commercial vehicle, and other transportation industries.

Forward-Looking Statements
This press release contains certain forward-looking statements, which reflect management's expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements are subject to the safe harbor protection provided under the securities laws. Methode undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in Methode's expectations on a quarterly basis or otherwise. The forward-looking statements in this press release involve a number of risks and uncertainties. The factors that could cause actual results to differ materially from our expectations are detailed in Methode's filings with the Securities and Exchange Commission, such as our annual and quarterly reports. Such factors may include, without limitation, the following: (1) impact from pandemics, such as the COVID-19 pandemic; (2) dependence on the automotive, appliance, commercial vehicle, computer and communications industries; (3) dependence on a small number of large customers, including two large automotive customers; (4) recognition of goodwill and long-lived asset impairment charges; (5) costs associated with restructuring activities; (6) international trade disputes resulting in tariffs and our ability to mitigate tariffs; (7) timing, quality and cost of new program launches; (8) ability to withstand price pressure, including pricing reductions; (9) failure to attract and retain qualified personnel; (10) ability to successfully market and sell Dabir Surfaces products; (11) currency fluctuations; (12) customary risks related to conducting global operations; (13) costs associated with environmental, health and safety regulations; (14) ability to withstand business interruptions; (15) ability to successfully benefit from acquisitions and divestitures; (16) investment in programs prior to the recognition of revenue; (17) dependence on the availability and price of materials; (18) dependence on our supply chain; (19) judgments related to accounting for tax positions; (20) income tax rate fluctuations; (21) ability to keep pace with rapid technological changes; (22) breaches to our information technology systems; (23) ability to avoid design or manufacturing defects; (24) ability to compete effectively; (25) ability to protect our intellectual property; (26) success of recent acquisitions and/or our ability to implement and profit from new applications of the acquired technology; (27) ability to manage our debt levels and any restrictions thereunder; and (28) impact to interest expense from the replacement or modification of LIBOR.

For Methode Electronics, Inc.
Robert K. Cherry
Vice President Investor Relations
rcherry@methode.com
708-457-4030

FAQ

What is Methode Electronics' updated sales guidance for fiscal Q2 2021?

Methode Electronics expects net sales in the range of $270 to $285 million for fiscal Q2 2021.

What is the projected EPS for Methode Electronics in fiscal Q2 2021?

The projected diluted EPS for fiscal Q2 2021 is between $0.71 and $0.81.

What factors influenced the sales guidance increase for Methode Electronics?

The increase in sales guidance is due to a meaningful rise in customer demand forecasts, particularly in the automotive sector.

Are there any risks mentioned in the press release for Methode Electronics?

Yes, the press release mentions risks related to COVID-19 disruptions and dependence on a small number of large customers.