Methode Electronics Reports Decline in Sales and Increased Net Loss for Third Quarter

Methode Electronics, Inc. reported a decline in financial performance for the three and nine months ended February 1, 2025, as detailed in its latest 10-Q filing. The company recorded net sales of $239.9 million for the third quarter, a decrease of 7.6% from $259.5 million in the same period last year. For the nine-month period, net sales fell to $791.0 million, down 5.5% from $837.2 million. The decrease in revenue was primarily attributed to lower sales volumes in the Automotive segment, which was partially offset by increased sales in the Industrial segment. The gross profit for the third quarter improved to $41.3 million, compared to $37.0 million a year earlier, while the gross profit margin increased to 17.2% from 14.3%.

The company reported a net loss of $14.4 million for the third quarter, compared to a loss of $11.6 million in the prior year. For the nine months, the net loss was $34.3 million, a significant improvement from a loss of $66.0 million in the same period last year, which included a goodwill impairment charge of $56.5 million. The reduction in net loss was attributed to lower selling and administrative expenses and improved gross profit margins, particularly in the Industrial segment.

Methode Electronics has also made strategic adjustments, including the discontinuation of its Dabir business in the Medical segment, which was sold off in the previous fiscal year. The company continues to focus on its core segments, with the Automotive segment generating $115.7 million in sales for the third quarter, down from $139.7 million a year prior. The Industrial segment, however, saw a slight increase in sales to $111.9 million, reflecting a positive trend in power distribution products.

Operationally, Methode Electronics reported a decrease in cash and cash equivalents to $103.8 million as of February 1, 2025, down from $161.5 million at the end of the previous fiscal year. The company’s total assets also declined to $1.3 billion from $1.4 billion. The total liabilities decreased to $600.3 million, with long-term debt slightly reduced to $327.7 million. The company’s employee headcount remained stable, with 35,690,749 shares of common stock outstanding.

Looking ahead, Methode Electronics anticipates continued challenges due to macroeconomic conditions, including inflation and supply chain disruptions. The company is actively monitoring geopolitical developments and their potential impact on operations. Despite these challenges, Methode remains committed to enhancing its operational efficiency and maintaining compliance with its financial covenants under its credit agreement, which matures in 2027. The company is also focused on leveraging its strengths in the Industrial segment while navigating the evolving landscape of the Automotive market.