Methode Electronics (MEI) Q3 2026 earnings summary

Executive summary

• Net sales for Q3 FY26 were $233.7–$234 million, down 2.6% year-over-year, with year-to-date net sales at $721 million, reflecting lower Automotive and Interface volumes, partially offset by Industrial growth and favorable FX.

• Net loss was $15.9 million ($0.45 per diluted share), up from $14.4 million in the prior year; adjusted net loss was $13.1 million ($0.37 per share).

• Transformation initiatives included operational improvements, Mexico operations progress, portfolio refinement, cost structure alignment, and capital reallocation toward higher-growth power solutions.

• Completed sale of the dataMate business for $16–$16.4 million and finalized sale of the Harwood Heights facility, with proceeds used for debt reduction and working capital.

• Headquarters relocated from Chicago to Southfield, Michigan, and facility subleased to reduce footprint.

Financial highlights

• Adjusted EBITDA for Q3 FY26 was $7.3 million (3.1% margin), down 41% year-over-year; year-to-date Adjusted EBITDA was $40.6 million.

• Gross profit was $38.8 million, with gross margin at 16.6% for the quarter, down from 17.2% year-over-year.

• Net loss for Q3 FY26 was $15.9 million, with adjusted net loss of $13.1 million and adjusted EPS of $(0.37).

• Free cash flow for Q3 FY26 was $10.1 million; year-to-date free cash flow reached $16.5–$17 million.

• Cash balance at quarter-end was $133.7 million, up $30.1 million from fiscal 2025; net debt reduced by $16.9 million year-over-year to $207.2 million.

Outlook and guidance

• FY26 net sales guidance narrowed to $950 million–$1 billion, with the low end raised by $50 million, mainly due to FX benefits.

• Adjusted EBITDA guidance for FY26 is $58–$62 million, lowered from prior $70–$80 million, reflecting North American auto program delays and higher Mexico transformation costs.

• Capital expenditures for FY26 expected at $24–$29 million, down from $42 million in FY25.

• Guidance excludes proceeds from recent asset sales and potential customer recoveries; subject to risks including tariffs, geopolitical instability, EV adoption, and supply chain disruptions.

• Expectation for positive free cash flow in Q4 and full year, compared to an outflow in the previous year.