Methode Electronics (MEI) Q4 2024 earnings summary

Executive summary

• Q4 2024 sales were $277.3M, down 8% year-over-year, mainly due to auto program roll-offs and weakness in e-bike and EV markets, resulting in a net loss driven by goodwill impairment and operational inefficiencies.

• Over $140M in new program awards were secured in Q4, marking the strongest quarter for business awards, especially in EV-related programs.

• Free cash flow and net debt reached their best levels of the year in Q4.

• Leadership transition announced, with Jon DeGaynor appointed as CEO effective July 15, 2024.

Financial highlights

• Q4 net sales: $277.3M, down from $301.2M prior year; Q4 loss from operations: -$61.5M, including $49.4M goodwill impairment; adjusted loss from operations: -$9.8M.

• Q4 diluted EPS: -$1.63 to -$1.85; adjusted EPS: -$0.23; Q4 EBITDA: -$44M; adjusted EBITDA: $5.3M.

• Fiscal 2024 net sales: $1,114.5M, down 6% year-over-year; net loss: $123.3M ($3.48/share); adjusted net loss: $15.0M ($0.43/share); adjusted EBITDA: $55.3M, down 64%.

• Fiscal 2024 free cash flow: -$2.7M to $42.0M; Q4 free cash flow: $9.1M to $15.8M.

Outlook and guidance

• Fiscal 2025 net sales expected to be similar to 2024, with adjusted pre-tax income approaching breakeven and stronger performance anticipated in the second half.

• Fiscal 2026 expected to return to growth and profitability, led by EV programs.

• Guidance subject to program launches, EV demand, cost recovery, inflation, supply chain, and restructuring.