<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________________
FORM 1 0 - Q
Quarterly Report Under Section 13 or 15(d)
of the Securities and Exchange Act of 1934.
__________________________________
For three months ended January 31, 1995. Commission file number 0-2816.
METHODE ELECTRONICS, INC.
- - --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter.)
Delaware 36-2090085
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7444 West Wilson Avenue, Harwood Heights, Illinois 60656
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (708) 867-9600
--------------------------
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Former name, former address, former fiscal year, if changed since last report.
At March 1, 1995, Registrant had 21,959,402 shares of Class A Common Stock
and 1,268,766 shares of Class B Common Stock outstanding.
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such report(s)), and (2) has been subject to
such filing requirements for the past 90 days.
Yes x No
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Page 1 of 8
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INDEX
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
- - ---------------------------------
Item 1. Financial Statements (unaudited)
Condensed consolidated balance sheets---January 31, 1995 and April 30,
1994.
Condensed consolidated statements of income---Three months and nine months
ended January 31, 1995 and 1994.
Condensed consolidated statements of cash flows---nine months ended
January 31, 1995 and 1994.
Note to condensed consolidated financial statements---January 31, 1995.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
PART II. OTHER INFORMATION
- - -----------------------------
Item 6. Exhibits and reports on Form 8-K.
SIGNATURES
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2
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PART I. FINANCIAL INFORMATION
- - ------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
January 31, April 30,
1995 1994
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 32,300,925 $ 26,785,962
Accounts receivable, less allowance
(January 31, 1995--$1,324,000;
April 30, 1994--$1,200,000) 41,922,916 36,984,273
Inventories:
Finished products 5,323,246 3,650,084
Work in process 18,043,629 17,856,713
Materials 8,755,691 6,107,491
------------ ------------
32,122,566 27,614,288
Current deferred income taxes 3,434,000 3,434,000
Prepaid expenses 1,854,380 2,216,332
------------ ------------
TOTAL CURRENT ASSETS 111,634,787 97,034,855
PROPERTY, PLANT AND EQUIPMENT 128,074,882 113,449,702
Less allowance for depreciation 74,031,634 64,995,753
------------ ------------
54,043,248 48,453,949
INTANGIBLE BENEFIT PLAN ASSET 4,436,458 4,937,257
OTHER ASSETS 10,944,144 10,204,303
------------ ------------
$181,058,637 $160,630,364
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts and notes payable $ 24,242,112 $ 22,155,074
Other current liabilities 18,033,769 16,021,498
------------ ------------
TOTAL CURRENT LIABILITIES 42,275,881 38,176,572
OTHER LIABILITIES 2,310,000 4,361,120
DEFERRED COMPENSATION 6,289,267 5,997,203
ACCUMULATED BENEFIT PLAN OBLIGATION 4,355,653 4,218,764
SHAREHOLDERS' EQUITY
Common Stock 11,663,580 11,610,707
Paid in capital 16,439,788 14,795,130
Retained earnings 96,676,030 80,963,058
Other shareholders' equity 1,048,438 507,810
------------ ------------
125,827,836 107,876,705
------------ ------------
$181,058,637 $160,630,364
============ ============
</TABLE>
See note to condensed consolidated financial statements.
3
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
January 31, January 31,
---------------------------- -----------------------------
1995 1994 1995 1994
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
INCOME:
Net sales $67,386,826 $52,985,895 $191,933,901 $149,470,417
Other 947,242 763,769 2,568,663 1,719,939
----------- ----------- ------------ ------------
Total 68,334,068 53,749,664 194,502,564 151,190,356
COSTS AND EXPENSES:
Cost of products sold 49,509,074 38,312,228 139,485,597 108,469,559
Selling and administrative expenses 9,505,182 7,149,373 26,722,848 20,834,910
----------- ----------- ------------ ------------
Total 59,014,256 45,461,601 166,208,445 129,304,469
----------- ----------- ------------ ------------
Income before income taxes 9,319,812 8,288,063 28,294,119 21,885,887
Provision for income taxes 3,355,000 3,150,000 10,510,000 8,268,000
----------- ----------- ------------ ------------
NET INCOME $ 5,964,812 $ 5,138,063 $ 17,784,119 $ 13,617,887
=========== =========== ============ ============
Earnings per Common Share $ .26 $ .22 $ .77 $ .59
=========== =========== ============ ============
Cash dividends per Common Share:
Class A $ .030 $ .012 $ .090 $ .036
Class B $ .025 $ .010 $ .075 $ .030
Weighted average number of Common
Shares outstanding 23,126,000 23,037,000 23,100,000 23,009,000
</TABLE>
See note to condensed consolidated financial statements.
4
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Nine Months Ended
January 31,
----------------------------
1995 1994
------------- -------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 17,784,119 $ 13,617,887
Provision of depreciation
and amortization 7,772,921 6,782,138
Changes in operating assets
and liabilities ( 3,735,956) (12,580,358)
Other 1,221,837 961,890
------------ ------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 23,042,921 8,781,557
INVESTING ACTIVITIES
Purchases of property, plant and
equipment (12,463,056) ( 9,355,738)
Purchase of subsidiary ( 2,593,063) -
Other 568,546 ( 813,546)
------------ ------------
NET CASH USED IN
INVESTING ACTIVITIES (14,487,573) (10,169,284)
FINANCING ACTIVITIES
Dividends ( 2,071,147) ( 834,868)
Other ( 969,238) 2,047,280
------------ ------------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES ( 3,040,385) 1,212,412
------------ ------------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 5,514,963 ( 175,315)
Cash and cash equivalents at
beginning of period 26,785,962 21,901,720
------------ ------------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 32,300,925 $ 21,726,405
============ ============
</TABLE>
See note to condensed consolidated financial statements.
5
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METHODE ELECTRONICS, INC. AND SUBSIDIARIES
NOTE TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
January 31, 1995
NOTE-- BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and nine month periods ended
Janaury 31, 1995 are not necessarily indicative of the results that may be
expected for the year ending April 30, 1995. For further information, refer to
the consolidated financial statements and footnotes thereto included in the
Company's annual report on Form 10-K for the year ended April 30, 1994.
6
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MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
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Net sales for the third quarter of fiscal 1995 increased 27% to $67,387,000,
compared to $52,986,000 for the third quarter last year. Sales for the nine
month period ended January 31, 1995 were $191,934,000, up 28% from $149,470,000
last year. Sales gains in the three and nine month periods were led by sales of
power buss products which more than doubled from last year's levels, primarily
the result of the improvement in the mainframe computer market. Our automotive
controls business which represents over half of Methode's business continued to
show double-digit gains. This business benefitted from a relatively strong
automotive market and an increase in per-vehicle controls requirements. Fiscal
1995 also was helped by the commencement of production of automotive air bag
products by our Dumbarton, Scotland plant to service the European market. Our
fiber optic connector products and our dataMate termination products also had
strong sales gains. The acquisition of a molded cable assembly business during
the second quarter helped raise overall connector sales for the third quarter by
30% over the year-ago period. Sales of printed circuits in the third quarter
1995 were sharply above the prior year's period which was interrupted by the
January 17, 1994 earthquake.
Other income consisted primarily of earnings from our automotive joint venture,
royalties and interest income from short-term investments.
Cost of products sold as a percentage of sales for the third quarter increased
to 73.5% from 72.3% for the year-ago period. For the nine month period ended
January 31, 1995, this percentage was flat when compared with the same period
last year. Gross margins in the third quarter 1995 narrowed from the 1994 third
quarter due in part to a slowdown of our chip carrier socket business and lower
margins on the businesses acquired in fiscal 1995.
Selling and administrative expenses as a percentage of sales were 14.1% for the
current quarter, up from 13.5% for the year-ago period. This percentage was
13.9% for the nine month periods of both years. Costs related to the start-up
of newer operations and products contributed to the increase experienced in the
third quarter.
The effective income tax rates were 36.0% and 37.1% for the three and nine month
periods of the current year compared with 38.0% and 37.8% last year. The
effective income tax rates exceed the statutory federal rate of 35% because of
the effect of state income taxes partially offset by lower statutory rates on
foreign operations. Because of the earnings mix in the third quarter, 1995,
lower statutory rates on foreign operations had a greater impact on the
effective tax rate.
Financial Conditions, Liquidity and Capital Resources
- - -----------------------------------------------------
Net cash provided by operating activities was $23,043,000 in the first nine
months of fiscal 1995, up from the $8,782,000 provided during the year-ago
period. The increase was primarily the result of a leveling off of working
capital requirements and increased net income.
The molded cable assembly business acquisition discussed above was acquired for
cash of just under $2,600,000. Capital expenditures and depreciation expense
were $12,463,000 and $7,773,000 in fiscal 1995 and $9,356,000 and $6,782,000 in
fiscal 1994. It is presently expected that fixed asset additions for fiscal
1995 will approximate $16,000,000 and will be financed with internally generated
funds.
7
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Methode Electronics, Inc.
----------------------------------------
By: KEVIN HAYES
------------------------------------
Kevin Hayes, Vice President
(Principal Financial and
Accounting Officer)
Dated: March 7, 1995
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8
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-30-1995
<PERIOD-END> JAN-31-1995
<CASH> 32,300,925
<SECURITIES> 0
<RECEIVABLES> 43,246,916
<ALLOWANCES> 1,324,000
<INVENTORY> 32,122,566
<CURRENT-ASSETS> 111,634,787
<PP&E> 128,074,882
<DEPRECIATION> 74,031,634
<TOTAL-ASSETS> 181,058,637
<CURRENT-LIABILITIES> 42,275,881
<BONDS> 0
<COMMON> 11,663,580
0
0
<OTHER-SE> 114,164,256
<TOTAL-LIABILITY-AND-EQUITY> 181,058,637
<SALES> 191,933,901
<TOTAL-REVENUES> 194,502,564
<CGS> 139,485,597
<TOTAL-COSTS> 139,485,597
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 277,403
<INCOME-PRETAX> 28,294,119
<INCOME-TAX> 10,510,000
<INCOME-CONTINUING> 17,784,119
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17,784,119
<EPS-PRIMARY> .77
<EPS-DILUTED> .77
</TABLE>
