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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________________
FORM 10 - Q
(Mark One) [_] Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities and Exchange Act of 1934
for the quarterly period ended July 31, 1996
or
[_] Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934.
__________________________________
Commission file number 0-2816.
METHODE ELECTRONICS, INC.
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(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
---------------------------
None
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(Former name, former address, former fiscal year, if changed since last report)
At September 6, 1996, Registrant had 34,101,878 shares of Class A Common
Stock and 1,233,237 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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1
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INDEX
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
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Item 1. Financial Statements (unaudited)
Condensed consolidated balance sheets---July 31, 1996 and April 30, 1996.
Condensed consolidated statements of income---Three months ended July 31,
1996 and 1995.
Condensed statements of cash flows---Three months ended July 31, 1996 and
1995.
Notes to condensed consolidated financial statements---July 31, 1996.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
PART II. OTHER INFORMATION
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Item 6. Exhibits and reports on Form 8-K
SIGNATURES
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<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
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ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
July 31, April 30,
1996 1996
(Unaudited)
ASSETS
<S> <C> <C>
CURRENT ASSETS $ 60,535,778 $ 50,185,934
Cash and cash equivalents
Accounts receivable, less allowance
(July 31, 1996 -- $1,230,000;
April 30, 1996 -- $1,285,000) 43,860,027 48,326,214
Inventories:
Finished products 6,240,081 5,199,125
Work in process 13,294,012 15,330,639
Materials 11,112,460 11,557,591
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30,646,553 32,087,355
Current deferred income taxes 3,029,000 3,029,000
Prepaid expenses 2,235,395 3,382,073
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TOTAL CURRENT ASSETS 140,306,753 137,010,576
PROPERTY, PLANT AND EQUIPMENT 156,870,899 152,507,769
Less allowance for depreciation 88,728,394 85,721,950
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68,142,505 66,785,819
INTANGIBLE BENEFIT PLAN ASSET 3,434,860 3,601,793
OTHER ASSETS 15,502,221 15,881,185
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$227,386,339 $223,279,373
============ ============
</TABLE>
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
CURRENT LIABILITIES
<S> <C> <C>
Accounts and notes payable $ 22,770,265 $ 26,388,255
Other current liabilities 19,632,290 19,567,826
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TOTAL CURRENT LIABILITIES 42,402,555 45,956,081
OTHER LIABILITIES 1,918,391 1,918,391
DEFERRED COMPENSATION 7,198,477 7,301,175
ACCUMULATED BENEFIT PLAN OBLIGATION 3,072,078 2,999,422
SHAREHOLDERS' EQUITY
Common Stock 17,740,764 17,661,116
Paid in capital 17,721,860 15,249,444
Retained earnings 137,316,260 131,073,343
Other shareholders' equity 15,954 1,120,401
------------ ------------
172,794,838 165,104,304
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$227,386,339 $223,279,373
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Three Months Ended
July 31,
------------------------
1996 1995
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<S> <C> <C>
INCOME:
Net sales $78,965,710 $68,215,814
Other 1,378,883 1,165,843
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Total 80,344,593 69,381,657
COSTS AND EXPENSES:
Cost of products sold 57,640,514 49,590,774
Selling and administrative expenses 10,089,491 9,234,437
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Total 67,730,005 58,825,211
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Income before income taxes 12,614,588 10,556,446
Provision for income taxes 4,605,000 3,853,000
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NET INCOME $ 8,009,588 $ 6,703,446
=========== ===========
Weighted average number of Common
Shares outstanding 35,171,000 34,779,000
Earnings per Common Share $.23 $.19
==== ====
Cash dividends per Common Share $.05 $.04
==== ====
</TABLE>
See notes to condensed consolidated financial statements.
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Three Months Ended
July 31
------------------
1996 1995
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 8,009,588 $ 6,703,446
Provision for depreciation
and amortization 3,354,197 3,051,381
Changes in operating assets
and liabilities 5,460,181 3,201,370
Other 272,808 280,373
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NET CASH PROVIDED BY
OPERATING ACTIVITIES 17,096,774 13,236,570
INVESTING ACTIVITIES
Purchases of property, plant and
equipment (4,710,883) (4,368,837)
Other 1,451,075 646,278
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NET CASH USED IN
INVESTING ACTIVITIES (3,259,808) (3,722,559)
FINANCING ACTIVITIES
Dividends (1,766,671) (1,399,695)
Other (1,720,451) (4,360,050)
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NET CASH USED IN
FINANCING ACTIVITIES (3,487,122) (5,759,745)
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INCREASE IN CASH
AND CASH EQUIVALENTS 10,349,844 3,754,266
Cash and cash equivalents at
beginning of period 50,185,934 40,763,656
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CASH AND CASH EQUIVALENTS
AT END OF PERIOD $60,535,778 $44,517,922
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
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METHODE ELECTRONICS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
July 31, 1996
NOTE 1 -- 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 month
period ended July 31, 1996 are not necessarily indicative of the results that
may be expected for the year ending April 30, 1997. 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, 1996.
NOTE 2 -- COMMON STOCK SPLIT
In October, 1995, the Company's Board of Directors declared a three for
two stock split, paid on October 31, 1995, whereby one additional share of
Class A Common Stock was issued for each two shares of Class A and Class B
Common Stock outstanding. All share and per share amounts give retroactive
effect to this stock split.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
---------------------
Net sales for the first quarter of fiscal 1997 increased 16% to
$78,966,000, compared with $68,216,000 for the first quarter last year. Sales
of automotive controls, which represent approximately half of Methode's
business, experienced sales gains in excess of 20% compared with the first
quarter last year. Our dataMate smart interconnect sales grew by more than
50% and sales of fiber optic connectors and assemblies rose more than 40% over
last year's first quarter. These sales gains were partially offset by a
slowdown in the mainframe computer market which dropped our Network Buss sales
by more than 20% for the quarter compared to the prior year and a slight
decrease in sales by our overseas connector operations.
Other income consisted primarily of earnings from an automotive joint
venture, interest income on short-term investments and royalties.
Cost of products sold as a percentage of sales for the quarter remained
relatively constant at 73.0% compared with the year-ago period of 72.7%.
Selling and administrative expenses as a percentage of sales were 12.8%
in the first quarter of fiscal 1997, down from 13.5% for the year-ago period.
Sales volume gains were primarily responsible for this improvement.
The effective income tax rate was 36.5% for the quarters ended July 31,
1996 and 1995. The effective income tax rate exceeds the statutory federal
rate of 35% because of the effect of state income taxes partially offset by
lower statutory rates on foreign operations.
Financial Conditions, Liquidity and Capital Resources
-----------------------------------------------------
Net cash provided by operating activities was $17,097,000 in the first
quarter of fiscal 1997, up from the $13,237,000 provided during the year-ago
period. The increase was primarily the result of decreased working capital
requirements and increased net income.
Capital expenditures and depreciation expense were $4,711,000 and
$3,354,000 in fiscal 1997 and $4,369,000 and $3,051,000 in fiscal 1996. It is
presently expected that fixed asset additions for fiscal 1997 will approach
$25,000,000 and will be financed with internally generated funds.
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PART II. OTHER INFORMATION
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Item 6. Exhibits and Reports on Form 8-K
--------------------------------
a) Exhibits
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequential
Exhibit Page
Number Description Number
- ------ ----------- ----------
<S> <C> <C>
3.1 Certificate of Incorporation of Registrant, as amended and
currently in effect(1)
3.2 By-Laws of Registrant, as amended and currently in effect(1)
4.1 Article Fourth of Certificate of Incorporation of Registrant,
as amended and currently in effect (Included in Exhibit 3.1)
10.1 Methode Electronics, Inc. Employee Stock Ownership Plan dated
February 24, 1977(2)*
10.2 Methode Electronics, Inc. Employee Stock Ownership Plan and
Trust Amendment No. 1(2)*
10.3 Methode Electronics, Inc. Employee Stock Ownership Trust(2)*
10.4 Methode Electronics, Inc. Employee Stock Ownership Trust-
Amendment No. 1(2)*
10.5 Methode Electronics, Inc. Incentive Stock Award Plan(3)*
10.6 Methode Electronics, Inc. Supplemental Executive Benefit Plan(4)*
10.7 Methode Electronics, Inc. Managerial Bonus and Matching Bonus
Plan (also referred to as the Longevity Contingent Bonus
Program)(4)*
10.8 Methode Electronics, Inc. Capital Accumulation Plan(4)*
10.9 Incentive Stock Award Plan for Non-Employee Directors(5)*
10.10 Methode Electronics, Inc. 401(k) Savings Plan(5)*
10.11 Methode Electronics, Inc. 401(k) Savings Trust(5)*
10.12 Methode Electronics, Inc. Electronic Controls Division Cash and
Class A Common Stock Bonus Plan(6)*
27 Financial Data Schedules 10
__________
(1) Previously filed with Registrant's Form S-3 Registration Statement
No.33-61940 filed April 30, 1993 and incorporated herein by reference.
</TABLE>
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(2) Previously filed with Registrant's S-8 Registration Statement No.2-60613
and incorporated herein by reference.
(3) Previously filed with Registrant's Registration Statement No.2-92902
filed August 23, 1984 and incorporated herein by reference.
(4) Previously filed with Registrant's Form 10-Q for three months ended
January 31, 1994 and incorporated herein by reference.
(5) Previously filed with Registrant's Form 10-K for the year ended
April 30, 1994 and incorporated herein by reference.
(6) Previously filed with Registrant's S-8 Registration Statement No.33-
88036 and incorporated herein by reference.
*Management contract or compensatory plan or arrangement required to be
filed as an exhibit to this Report on Form 10-Q pursuant to Item 6 of
Form 10-Q.
b) Reports on Form 8-K
-------------------
The Company did not file a report on Form 8-K during the three months
ended July 31, 1996.
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, Chief Financial Officer
(Principal Financial and
Accounting Officer)
Dated: September 10, 1996
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-END> JUL-31-1996
<CASH> 60,535,778
<SECURITIES> 0
<RECEIVABLES> 45,090,027
<ALLOWANCES> 1,230,000
<INVENTORY> 30,646,553
<CURRENT-ASSETS> 140,306,753
<PP&E> 156,870,899
<DEPRECIATION> 88,728,394
<TOTAL-ASSETS> 227,386,339
<CURRENT-LIABILITIES> 42,402,555
<BONDS> 0
<COMMON> 17,740,764
0
0
<OTHER-SE> 155,054,074
<TOTAL-LIABILITY-AND-EQUITY> 227,386,339
<SALES> 78,965,710
<TOTAL-REVENUES> 80,344,593
<CGS> 57,640,514
<TOTAL-COSTS> 57,640,514
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 45,210
<INCOME-PRETAX> 12,614,588
<INCOME-TAX> 4,605,000
<INCOME-CONTINUING> 8,009,588
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,009,588
<EPS-PRIMARY> .23
<EPS-DILUTED> .23
</TABLE>
