Methode Electronics: Fiscal 2022 Fourth Quarter Results Conference Call Presentation



June 23, 2022

Forward-looking statements

This presentation 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 safe harbor protections under securities laws.

Methode undertakes no obligation to update any forward-looking statement to conform to actual results or to changes in Methode’s expectations on a quarterly basis or otherwise. The forward-looking statements contained in this presentation involve a number of risks and uncertainties. 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. These factors may include, but are not limited to, the following: 1) Dependence on our supply chain, including semiconductor suppliers; 2) Impact of pandemics, such as the COVID-19 pandemic; 3) Dependence on the automobile industry and utility vehicles; 4) Impact of inflation; 5) Dependence on a small number of large customers, including a large automotive customer; 6) Dependence on availability and price of materials; 7) Risks related to the conduct of global operations; 8) Ability to withstand price pressures, including price reductions; 9) Currency fluctuations; 10) Timing and magnitude of costs associated with restructuring activities; 11) Failure to attract and retain qualified personnel; 12) Recognition of goodwill and other intangible asset impairment charges; 13) Timing, quality and cost of new program launches; 14) International trade disputes resulting in tariffs and our ability to mitigate tariffs; 15) Compensation expense adjustments for performance-based awards; 16) Investment in programs before revenue recognition; 17) Ability to compete effectively; 18) Impact of production delays or canceled orders; 19) Ability to withstand business interruptions; 20) Ability to keep pace with rapid technological change; 21) Breaches of our computer systems; 22) Ability to avoid design or manufacturing defects; 23) Ability to manage our levels of indebtedness and any resulting restrictions; 24) Fluctuations in income tax rates; 25) Ability to protect our intellectual property; 26) Ability to successfully leverage acquisitions and divestitures; 27) Impact of climate change and related regulations; 28) Judgments relating to the recognition of tax positions; and 29) Costs associated with environmental, health and safety regulations.

Non-GAAP Financial Measures

To supplement the company’s financial statements presented in accordance with United States generally accepted accounting principles (“GAAP”), Methode uses certain non-GAAP financial measures, such as EBITDA, net debt and free cash flow. . The reconciliation to the closest GAAP measures of all non-GAAP measures included in this presentation is available in the appendix. Management believes that EBITDA is useful to investors because it is a measure commonly used by other companies in our industry and allows investors to compare the company’s performance against its competitors. Management believes that net debt is a meaningful measure for investors because management assesses the company’s debt position after considering available cash that could be used to repay outstanding debt. Management believes that free cash flow is a meaningful measure for investors because management reviews cash flow from operations after considering capital expenditures, which are both necessary to maintain the business base. assets of the business and which are expected to generate future cash flows from operations. Method definitions of these non-GAAP measures may differ from similarly titled measures used by others. These non-GAAP measures should be considered supplemental and not a substitute for financial information prepared in accordance with GAAP.

Fourth Quarter FY22 Highlights

Quarterly performance

Electric vehicle activity

Sales of $289 million, including $7 million in cost recovery

17% of fourth quarter consolidated sales

North American and European Headwinds

Impacted by COVID-19 lockdowns in China

Lockdowns related to COVID-19 in China

Expect 20% in FY23

Commercial activities

Balance sheet and cash flow

Material cost inflation and unfavorable product mix

Ongoing debt reduction

Program award over $100 million

Free cash flow of $34 million

EV Programs ~ 90% of Rewards

$100 million increase in share buyback authorization

FY22 Q4 Select Business Awards

Electric vehicles

European Automotive OEM Battery Busbar Assembly

US Automotive OEM Battery Busbar Assembly

American Automotive OEM Brake Light Assembly

Battery Current Sensor for US Automotive OEM

$90 million*

US Automotive OEM Puddle Lamp Assembly

US Automotive OEM Side Repeater Assembly

Overhead console assembly for Asian automotive supplier

Asian Auto OEM Brake Switch Assembly

Asian Auto OEM Brake Switch Assembly


Torque Sensor for Asian Electric Bike Powertrain OEM


Vehicle control module for American motorsport supplier

Busbar assembly for a US data center supplier


Over $100 million in rewards with approximately 90% EV applications

*Expected annual sales at full production

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Electronic Method Inc. published this content on June 23, 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unmodified, on June 23, 2022 11:14:10 AM UTC.

Public now 2022

All the latest from METHODE ELECTRONICS, INC.

2022 sales 1,164 million

Net income 2022 102 million

Net debt 2022 55.8 million

PER 2022 ratio 14.2x
2022 return
Capitalization 1,406 million
1,406 million
EV / Sales 2022 1.26x
EV / Sales 2023 1.21x
# of employees 7,200
Floating 92.4%


Duration :

Period :

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Trends in Technical Analysis METHODE ELECTRONICS, INC.

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To buy

Medium consensus SURPASS
Number of analysts 3
Last closing price $38.08
Average target price $50.50
Average Spread / Target 32.6%

Michael P. Boser