CHICAGO – Methode Electronics reported fiscal second quarter record net sales of $300.8 million, up 17% year-over-year.

The increase in net sales was due to higher sales in the automotive segment and favorable foreign currency translation. The increase was driven in part by the $32 million negative impact from the United Auto Workers labor strike at General Motors in the same quarter of fiscal 2020. The quarter included $6.5 million positive impact from foreign currency translation, primarily related to the strengthening of the Euro and Chinese renminbi.

Electric and hybrid vehicle applications were more than 9% of net sales.

For the period ended Oct. 31, net income was $38.6 million, an increase of 62.2% compared to the same quarter of fiscal 2020.

EBITDA was $60.2 million, up 38.1% year-over-year.

Income from operations was a record $45 million, or 15% of net sales, compared to $30.7 million in the same quarter last year. The increase was mainly due to the higher gross profit on higher sales volume.

Other income was $2.6 million, up 160% year-over-year. Included was $3.3 million of government assistance received by certain foreign locations with respect to the Covid-19 pandemic. There was a $500,000 gain on a sale of a business in the same quarter of fiscal 2020.

During the fiscal second quarter, net cash provided by operating activities was $40.3 million.

Debt, which included the $100 million proactive draw from the company’s revolving credit facility in March due to Covid-19, was $347.6 million at the end of the quarter, down slightly compared to $352.1 million at the end of fiscal 2020.

Free cash flow was $36.7 million, compared to $35.1 million in the same quarter of fiscal 2020.

The automotive segment's net sales for the fiscal second quarter were $215.7 million, up 19.8%, from $180.1 million attributable to net sales increases of $11.1 million in North America, $5.5 million in Europe, and $19 million in Asia.

The quarter included $2.6 million of restructuring actions, compared to $200,000 in the fiscal second quarter last year.

For automotive, income from operations was $38.8 million, up 34.3%.

For the fiscal third quarter of 2021, the company expects net sales in the range of $265 million to $285 million, which is subject to disruption at any time due to a variety of factors, including the ongoing Covid-19 pandemic.

“I continue to express my gratitude to our employees, who have not only demonstrated incredible commitment to the company in the midst of an ongoing pandemic, but who also helped propel us to a record quarter for sales and income from operations," said president and CEO Donald W. Duda. "For our fiscal third quarter, we will continue to face market uncertainty due to the pandemic. However, the demand we experienced in the second quarter and are seeing early in the third quarter gives us the confidence to provide sales and EPS guidance for the third quarter. In addition, our order book continues to build in EV programs resulting from our three-pronged approach to EV with user interface, power distribution, and LED lighting solutions."

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