Methode Electronics (MEI) Q2 2026 earnings summary

Executive summary

• Net sales for the quarter were $246.9 million, down 15.6% year-over-year but up 3% sequentially, with adjusted EBITDA rising 12% sequentially to $18 million.

• Free cash flow improved by $47 million year-over-year, with first half cash flow in line with management estimates and positive $6.4 million.

• Transformation efforts included operational improvements, especially in Egypt and Mexico, leadership upgrades, and cost reductions.

• Corporate headquarters relocated to Southfield, Michigan, to enhance operational efficiency and proximity to automotive customers.

• Product portfolio aligned with megatrends such as data centers and vehicle electrification, supporting long-term growth.

Financial highlights

• Second quarter net sales were $246.9 million, down 15.6% year-over-year but up 3% sequentially; adjusted EBITDA was $17.6 million, down year-over-year but up sequentially.

• Adjusted net loss for the quarter was $6.7 million, or $0.19 per diluted share; net loss was $9.9 million, or $0.28 per share.

• Free cash flow for the quarter was negative $11.6 million, a $46.8 million improvement year-over-year; first half free cash flow was positive $6.4 million.

• Net debt reduced by $29.6 million year-over-year to $214 million; cash balance at quarter end was $118.5 million.

• Operating cash usage was $7.4 million in Q2, but $17.7 million was generated in the first half.

Outlook and guidance

• Full year sales guidance reaffirmed at $900 million–$1 billion, with adjusted EBITDA expected between $70–$80 million.

• Second half of fiscal 2026 expected to be stronger, with Q3 reflecting seasonality and Q4 showing improvement.

• Fiscal 2026 free cash flow expected to be positive, compared to a $15 million outflow in the prior year.

• Capital expenditures for fiscal 2026 guided at $24–$29 million, down from $42 million in fiscal 2025.

• Guidance range maintained due to ongoing market volatility, tariffs, and external uncertainties.