10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC  20549

__________________________________ 

FORM 10-Q

(Mark One)

x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the quarterly period ended August 1, 2015

or

o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

for the transition period from ______ to ______

 __________________________________ 

Commission file number 0-2816

METHODE ELECTRONICS, INC.

(Exact name of registrant as specified in its charter)

Delaware	36-2090085
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

7401 West Wilson Avenue, Harwood Heights, Illinois	60706-4548
(Address of principal executive offices)	(Zip Code)

(Registrant’s telephone number, including area code) (708) 867-6777

None

(Former name, former address and former fiscal year, if changed since last report)

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 reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x  No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or smaller reporting company.  See definitions of “large accelerated filer” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x	Accelerated filer o
Non-accelerated filer o	Smaller reporting company o

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o  No x

At September 1, 2015, registrant had 38,475,617 shares of common stock outstanding.

METHODE ELECTRONICS, INC.

FORM 10-Q

August 1, 2015

TABLE OF CONTENTS

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed consolidated balance sheets as of August 1, 2015 (unaudited) and May 2, 2015	2
	Condensed consolidated statements of operations (unaudited) – three months ended August 1, 2015 and August 2, 2014	3
	Condensed consolidated statements of comprehensive income (unaudited) – three months ended August 1, 2015 and August 2, 2014	4
	Condensed consolidated statements of cash flows (unaudited) – three months ended August 1, 2015 and August 2, 2014	5
	Notes to condensed consolidated financial statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4.	Controls and Procedures	22
PART II.	OTHER INFORMATION
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 6.	Exhibits	23
SIGNATURES		24
INDEX TO EXHIBITS		25

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

($ in millions)

	As of			As of
	August 1, 2015			May 2, 2015
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	167.9		$	168.1
Accounts receivable, net	159.7			170.4
Inventories:
Finished products	15.4			16.0
Work in process	11.7			12.2
Materials	42.6			42.7
	69.7			70.9
Deferred income taxes	14.8			15.0
Prepaid expenses and other current assets	15.0			13.9
TOTAL CURRENT ASSETS	427.1			438.3
PROPERTY, PLANT AND EQUIPMENT	308.7			309.2
Less allowances for depreciation	218.8			215.9
	89.9			93.3
GOODWILL	1.6			1.7
INTANGIBLE ASSETS, net	10.7			11.3
PRE-PRODUCTION COSTS	10.8			10.5
DEFERRED INCOME TAXES	28.0			32.1
OTHER ASSETS	19.7			18.6
	70.8			74.2
TOTAL ASSETS	$	587.8		$	605.8
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable	$	68.0		$	70.1
Other current liabilities	36.0			60.5
TOTAL CURRENT LIABILITIES	104.0			130.6
LONG-TERM DEBT	2.0			5.0
OTHER LIABILITIES	3.9			4.0
DEFERRED COMPENSATION	7.9			7.2
SHAREHOLDERS’ EQUITY
Common stock, $0.50 par value, 100,000,000 shares authorized, 40,081,131 and 39,702,036 shares issued as of August 1, 2015 and May 2, 2015, respectively	20.0			19.9
Additional paid-in capital	106.2			102.2
Accumulated other comprehensive income	(14.4		)	(8.3		)
Treasury stock, 1,605,514 shares and 1,346,624 as of August 1, 2015 and May 2, 2015, respectively	(18.4		)	(11.5		)
Retained earnings	376.5			356.5
TOTAL METHODE ELECTRONICS, INC. SHAREHOLDERS’ EQUITY	469.9			458.8
Noncontrolling interest	0.1			0.2
TOTAL EQUITY	470.0			459.0
TOTAL LIABILITIES AND EQUITY	$	587.8		$	605.8

See notes to condensed consolidated financial statements.

2

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

($ in millions, except per share data)

	Three Months Ended
	August 1, 2015			August 2, 2014
Net sales	$	203.3		$	218.1
Cost of products sold	149.7			167.6
Gross profit	53.6			50.5
Selling and administrative expenses	23.2			22.2
Income from operations	30.4			28.3
Interest income, net	(0.2		)	—
Other income, net	(0.3		)	(0.1		)
Income before income taxes	30.9			28.4
Income tax expense	7.4			7.0
Net income	23.5			21.4
Less: Net income attributable to noncontrolling interest	—			—
NET INCOME ATTRIBUTABLE TO METHODE ELECTRONICS, INC.	$	23.5		$	21.4
Amounts per common share attributable to Methode Electronics, Inc.:
Basic	$	0.60		$	0.56
Diluted	$	0.60		$	0.55
Cash dividends:
Common stock	$	0.09		$	0.09
Weighted average number of Common Shares outstanding:
Basic	38,904,743			38,464,558
Diluted	39,030,798			38,648,204

See notes to condensed consolidated financial statements.

3

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

($ in millions)

	Three Months Ended
	August 1, 2015			August 2, 2014
Net income	$	23.5		$	21.4
Foreign currency translation adjustment	(6.1		)	(5.3		)
Comprehensive income	17.4			16.1
Less: Comprehensive income attributable to non-controlling interest	—			—
Comprehensive income attributable to Methode Electronics, Inc.	$	17.4		$	16.1

See notes to consolidated financial statements.

4

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

($ in millions)

	Three Months Ended
	August 1, 2015			August 2, 2014
OPERATING ACTIVITIES
Net income	$	23.5		$	21.4
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for depreciation	5.6			5.6
Amortization of intangibles	0.6			0.4
Amortization of stock awards and stock options	0.4			1.0
Changes in operating assets and liabilities	(11.1		)	4.8
NET CASH PROVIDED BY OPERATING ACTIVITIES	19.0			33.2
INVESTING ACTIVITIES
Purchases of property, plant and equipment	(5.9		)	(3.3		)
NET CASH USED IN INVESTING ACTIVITIES	(5.9		)	(3.3		)
FINANCING ACTIVITIES
Taxes paid related to net share settlement of equity awards	(6.9		)	—
Proceeds from exercise of stock options	—			4.5
Excess tax benefit from equity-based compensation	3.8			—
Cash dividends	(3.5		)	(3.4		)
Repayment of borrowings	(3.0		)	(10.0		)
NET CASH USED IN FINANCING ACTIVITIES	(9.6		)	(8.9		)
Effect of foreign currency exchange rate changes on cash	(3.7		)	(1.7		)
INCREASE IN CASH AND CASH EQUIVALENTS	(0.2		)	19.3
Cash and cash equivalents at beginning of period	168.1			116.4
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	167.9		$	135.7

See notes to condensed consolidated financial statements.

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METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Dollar amounts in millions, except per share data)

1.BASIS OF PRESENTATION

Methode Electronics, Inc. was incorporated in 1946 as an Illinois corporation and reincorporated in Delaware in 1966.  As used herein, “we,” “us,” “our,” the “Company” or “Methode” means Methode Electronics, Inc. and its subsidiaries.  Our business is managed and our financial results are reported on a segment basis, with those segments being Automotive, Interface, Power Products and Other.  The condensed consolidated financial statements and related disclosures as of August 1, 2015 and results of operations for the three months ended August 1, 2015 and August 2, 2014 are unaudited, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).  The May 2, 2015 condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”).  Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations.  In our opinion, these financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for the fair statement of the results for the interim periods.  These financial statements should be read in conjunction with the financial statements included in our Form 10-K for the year ended May 2, 2015, filed with the SEC on June 25, 2015.  Results may vary from quarter to quarter for reasons other than seasonality.

2.RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09 “Revenue from Contracts with Customers”, which creates Accounting Standards Codification (“ASC”) 606 “Revenue from Contracts with Customers” and supersedes the revenue recognition requirements in ASC 605 “Revenue Recognition”. The update outlines a comprehensive model for all entities to use in accounting for revenue arising from contracts with customers as well as required disclosures. Entities have the option of using either a full retrospective or modified approach to adopt the new guidance. The ASU is effective for annual reporting periods beginning after December 15, 2016 and interim periods within those annual periods. In July 2015, the FASB reached a decision to delay the adoption date of the new ASU until December 15, 2017. We are still assessing the impact of adoption on our consolidated financial statements.

In July 2015, FASB issued ASU 2015-11, "Inventory (Topic 330): Simplifying the Measurement of Inventory". This ASU requires an entity to measure inventory at the lower of cost and net realizable value, rather than at the lower of cost or market. The guidance is effective for interim and annual periods beginning after December 15, 2016, and is to be applied prospectively. Early adoption is permitted. Management is assessing the impact of adoption on its consolidated financial statements.

In May 2015, the FASB issued ASU 2015-7, "Fair Value Measurement: Disclosure for Investments in Certain Entities that calculates Net Asset Value per Share (or its Equivalent)". This amendment removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net value asset per share. This new guidance is effective for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted. We do not believe the adoption of this standard will have significant effect on our ongoing financial reporting.

In April 2015, the FASB issued ASU 2015-03, "Simplifying the Presentation of Debt Issuance Costs". This ASU requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The amendments in this ASU are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The update requires retrospective application and represents a change in accounting principle. We do not believe the adoption of this standard will have a significant effect on our ongoing financial reporting.

In February 2015, the FASB issued an accounting standard ASU 2015-02, "Consolidation (Topic 810) - Amendments to the Consolidation Analysis", which changes the way reporting enterprises evaluate whether (a) they should consolidate limited partnerships and similar entities, (b) fees paid to a decision maker or service provider are variable interests in a variable interest entity VIE, and (c) variable interests in a VIE held by related parties of the reporting enterprise require the reporting enterprise to consolidate the variable interest entity. The new accounting standard is effective for annual and interim periods in fiscal years beginning after December 15, 2015. We do not believe the adoption of this standard will have a significant effect on our ongoing financial reporting.

In January 2015, the FASB issued an accounting standard ASU 2015-01, "Income Statement - Extraordinary and Unusual Items (Subtopic 225-20)", which eliminates the concept of extraordinary items.The standard does not affect disclosure

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METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Dollar amounts in millions, except per share data)

guidance for events or transactions that are unusual in nature or infrequent in their occurrence. The ASU is effective in annual periods, and interim periods within those annual periods, beginning after December 15, 2015. The standard allows prospective or retrospective application. Early adoption is permitted if applied from the beginning of the fiscal year of adoption. We do not believe the adoption of this standard will have any significant effect on our ongoing financial reporting.

3.GOODWILL AND INTANGIBLE ASSETS

We review our goodwill and other intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable, and at least annually in accordance with Accounting Standards Codification ("ASC") No. 350, “Intangibles — Goodwill and Other”.  The values assigned to goodwill and intangible assets are normally based on estimates and judgments regarding expectations for the success and life cycle of products and technologies acquired.  A severe decline in expectations could result in significant impairment charges, which could have a material adverse effect on our financial condition and results of operations.

The following table shows the roll-forward of goodwill in the financial statements for the three months ended August 1, 2015:

	As of August 1, 2015
				Power
	Interface			Products		Total
Balance as of May 2, 2015	$	0.7		$	1.0	$	1.7
Foreign currency translation	(0.1		)	—		(0.1		)
Balance as of August 1, 2015	$	0.6		$	1.0	$	1.6

The following tables present details of the Company’s intangible assets:

	As of August 1, 2015
							Wtd. Avg.
							Remaining
			Accumulated				Amortization
	Gross		Amortization		Net		Periods (Years)
Customer relationships and agreements	$	16.3	$	15.1	$	1.2	8.5
Trade names, patents and technology licenses	25.8		16.3		9.5		3.1
Covenants not to compete	0.1		0.1		—		2.2
Total	$	42.2	$	31.5	$	10.7

	As of May 2, 2015
							Wtd. Avg.
							Remaining
			Accumulated				Amortization
	Gross		Amortization		Net		Periods (Years)
Customer relationships and agreements	$	16.3	$	15.0	$	1.3	8.8
Trade names, patents and technology licenses	25.8		15.8		10.0		3.3
Covenants not to compete	0.1		0.1		—		2.4
Total	$	42.2	$	30.9	$	11.3

The estimated aggregate amortization expense for the current fiscal year and each of the four succeeding fiscal years is as follows:

2016	$2.4
2017	$2.3
2018	$2.2
2019	$2.1
2020	$0.2

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METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Dollar amounts in millions, except per share data)

As of August 1, 2015 and May 2, 2015, the trade names, patents and technology licenses include $1.8 million of trade names that are not subject to amortization.

4.INCOME TAXES

At May 2, 2015, we recorded a deferred tax benefit of $7.2 million related to the release of a foreign valuation allowance and a $1.4 million deferred tax benefit related to the release of our state valuation allowance. The Company evaluated all available positive and negative evidence, including past operating results and projection of future taxable income and determined it is more likely than not that expected future taxable income will be sufficient to utilize substantially all of our foreign, federal and US state net deferred tax assets. The Company maintained a valuation allowance of $1.2 million at August 1, 2015 and May 2, 2015 related to certain state and federal net operating loss carryovers and expects to continue to maintain this allowance until we determine that these deferred tax assets are more likely than not realizable.

At August 1, 2015, we had available $2.1 million of federal and $80.6 million of state net operating loss carry forwards (having a tax benefit of $0.7 million and $3.8 million, respectively) and $3.7 million of foreign tax credit carry forwards. If unused, the U.S. federal net operating loss carry forwards will expire in the fiscal years 2018 through 2031. The state net operating loss carry forwards will expire in the fiscal years 2016 through 2035. The foreign tax credits will expire in the fiscal years 2023 through 2024.

The tax laws of Malta provide for investment tax credits of 30% of certain qualified expenditures. Unused credits of $16.1 million as of August 1, 2015 can be carried forward indefinitely. We record investment tax credits using the "flow through" method.

The Company recognized an income tax provision of $7.4 million and $7.0 million for the three months ended August 1, 2015 and August 2, 2014, respectively. The Company's effective tax rate was 23.9% and 24.6% for the three months ended August 1, 2015 and August 2, 2014, respectively. The income tax provision for the three months ended August 1, 2015 and August 2, 2014 is lower than the U.S. statutory rate primarily due to foreign investment tax credits and foreign operations with lower statutory rates.

We recognize interest and penalties accrued related to the unrecognized tax benefits in the provision for income taxes.  We had approximately $0.1 million accrued at August 1, 2015 for the payment of interest and penalties.  The total unrecognized tax benefit as of August 1, 2015 was $0.9 million. We recorded an unrecognized tax benefit of $0.1 million in the first quarter of fiscal 2016. There have been no material changes to the accrued amounts in the current fiscal year.

The Company and all of its domestic subsidiaries file income tax returns in the U.S. federal jurisdiction and various states.  Our foreign subsidiaries file income tax returns in certain foreign jurisdictions since they have operations outside the U.S.  The Company and its subsidiaries are generally no longer subject to U.S. federal, state and local examinations by tax authorities for all years except fiscal 2014, 2013, 2012 and 2011.

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METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Dollar amounts in millions, except per share data)

5.NET INCOME PER SHARE

Basic net income per share is calculated by dividing net income attributable to Methode shareholders by the weighted average number of common shares outstanding for the applicable period.  Diluted net income per share is calculated after adjusting the denominator of the basic net income per share calculation for the effect of all potentially dilutive stock compensation awards outstanding during the period.

The following table sets forth the computation of basic and diluted net income per share:

	Three Months Ended
	August 1, 2015		August 2, 2014
Numerator - net income attributable to Methode Electronics, Inc.	$	23.5	$	21.4
Denominator:	—		—
Denominator for basic net income per share-weighted average shares outstanding and vested/unissued restricted stock awards	38,904,743		38,464,558
Dilutive potential common shares-employee and director stock options, restricted stock awards and restricted stock units	126,055		183,646
Denominator for diluted net income per share	39,030,798		38,648,204
Net income per share:
Basic	$	0.60	$	0.56
Diluted	$	0.60	$	0.55

For the three months ended August 2, 2014, options to purchase 158,500 shares have been excluded in the computation of diluted net income per share because the exercise price was greater than the average market price for that period, and therefore, would have been anti-dilutive. Restricted stock awards for 700,000 shares have been excluded in the computation of diluted net income per share for the three months ended August 2, 2014 as these awards were contingent on the Company's full year performance in fiscal 2015.

6.SEGMENT INFORMATION

We are a global manufacturer of component and subsystem devices.  We design, manufacture and market devices employing electrical, electronic, wireless, sensing and optical technologies.  Our components are found in the primary end markets of the automotive, appliance, communications (including information processing and storage, networking equipment, wireless and terrestrial voice/data systems), aerospace, rail and other transportation industries, and the consumer and industrial equipment markets.

ASC No. 280, “Segment Reporting”, establishes annual and interim reporting standards for an enterprise’s operating segments and related disclosures about its products, services, geographic areas and major customers. An operating segment is defined as a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses, and about which separate financial information is regularly evaluated by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources.  The CODM, as defined by ASC No. 280, is the Company’s President and Chief Executive Officer (“CEO”).

We have multiple operating segments that are aggregated in four reportable segments. Those segments are Automotive, Interface, Power Products and Other.

The Automotive segment supplies electronic and electromechanical devices and related products to automobile Original Equipment Manufacturers ("OEMs"), either directly or through their tiered suppliers. Our products include control switches for electrical power and signals, connectors for electrical devices, integrated control components, switches and sensors

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METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Dollar amounts in millions, except per share data)

that monitor the operation or status of a component or system, and packaging of electrical components as well as design and manufacture of magnetic torque sensing products.

The Interface segment provides a variety of copper and fiber-optic interconnect and interface solutions for the aerospace, appliance, commercial, computer, construction, consumer, material handling, medical, military, mining, networking, storage, and telecommunications markets.  Solutions include conductive polymers, connectors, custom cable assemblies, industrial safety radio remote controls, optical and copper transceivers, personal computer and express card packaging and terminators, solid-state field effect interface panels, and thick film inks.  Services include the design and installation of fiber optic and copper infrastructure systems, and manufacturing active and passive optical components.

The Power Products segment manufactures braided flexible cables, current-carrying laminated bus devices, custom power-product assemblies, high-current low voltage flexible power cabling systems and powder coated bus bars that are used in various markets and applications, including aerospace, computers, industrial and power conversion, military, telecommunications, and transportation.

The Other segment includes medical devices, inverters and battery systems and insulated gate bipolar transistor solutions.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies in our Form 10-K for the fiscal year ended May 2, 2015.  We allocate resources to segments based on operating income. Transfers between segments are recorded using internal transfer prices set by us.

	Three Months Ended August 1, 2015
	Automotive			Interface			Power Products		Other			Eliminations/Corporate			Consolidated
Net sales	$	154.9		$	34.1		$	16.5	$	0.1		$	(2.3	)	$	203.3
Transfers between segments	(1.8		)	(0.4		)	—		(0.1		)	2.3			—
Net sales to unaffiliated customers	$	153.1		$	33.7		$	16.5	$	—		$	—		$	203.3
Income (loss) from operations	$	35.9		$	0.7		$	3.1	$	(2.3	)	$	(7.0	)	$	30.4
Interest income, net															(0.2		)
Other income, net															(0.3		)
Income before income taxes															$	30.9

	Three Months Ended August 2, 2014
	Automotive			Interface			Power Products			Other			Eliminations/Corporate			Consolidated
Net sales	$	156.8		$	44.6		$	16.3		$	1.6		$	(1.2	)	$	218.1
Transfers between segments	(0.5		)	(0.6		)	(0.1		)	—			1.2			—
Net sales to unaffiliated customers	$	156.3		$	44.0		$	16.2		$	1.6		$	—		$	218.1
Income/(loss) from operations	$	27.3		$	7.0		$	3.0		$	(1.9	)	$	(7.1	)	$	28.3
Other income, net																(0.1		)
Income before income taxes																$	28.4

7.          CONTINGENCIES

Certain litigation arising in the normal course of business is pending against us.  We are from time to time subject to various legal actions and claims incidental to our business, including those arising out of alleged defects, breach of contracts, employment-related matters and environmental matters.  We consider insurance coverage and third-party indemnification when determining required accruals for pending litigation and claims.  Although the outcome of potential legal actions and claims cannot be determined, it is our opinion, based on the information available, that we have adequate reserves for these liabilities.

Hetronic Germany-GmbH Matters    

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METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Dollar amounts in millions, except per share data)

For several years, Hetronic Germany-GmbH and Hydronic-Steuersysteme-GmbH (the “Fuchs companies”) served as our distributors for Germany, Austria and other central and eastern European countries pursuant to their respective intellectual property licenses and distribution and assembly agreements. We became aware that the Fuchs companies and their managing director, Albert Fuchs, had materially violated those agreements. As a result, weterminated all of our agreements with the Fuchs companies. On June 20, 2014, we filed a lawsuit against the Fuchs companies in the Federal District Court for the Western District of Oklahoma alleging material breaches of the distribution and assembly agreements seeking damages, as well as various forms of injunctive relief. The defendants have filed counterclaims alleging breach of contract, interference with business relations and business slander. On April 2, 2015, we amended our complaint against the Fuchs companies to add additional unfair competition and Lanham Act claims and to add additional, affiliated parties. The defendants filed motions to dismiss that are fully briefed and are awaiting ruling by the Court. Discovery has commenced in the case and is ongoing. 

8.          PRE-PRODUCTION COSTS RELATED TO LONG-TERM SUPPLY ARRANGEMENTS

We incur pre-production tooling costs related to certain products produced for our customers under long-term supply agreements.  We had $10.8 million and $10.5 million as of August 1, 2015 and May 2, 2015, respectively, of pre-production tooling costs related to customer-owned tools for which reimbursement is contractually guaranteed by the customer or for which the customer has provided a non-cancelable right to use the tooling.  Engineering, testing and other costs incurred in the design and development of production parts are expensed as incurred, unless the costs are reimbursable, as specified in a customer contract.

9.          DEBT AND CREDIT AGREEMENT

We are party to an Amended and Restated Credit Agreement with Bank of America, N.A., as administrative agent, and certain other financial institutions, which has a maturity of September 21, 2017. The credit facility is in the aggregate principal amount of $100.0 million, with an option to increase the principal amount by an additional $50.0 million, subject to customary conditions and approval of the lender(s) providing new commitment(s). The credit facility provides for variable rates of interest based on the type of borrowing and the Company's debt to EBITDA financial ratio. The Amended and Restated Credit Agreement is guaranteed by certain of our U.S. subsidiaries. At August 1, 2015, the interest rate on the credit facility was 1.5% plus LIBOR and we were in compliance with the covenants of the agreement. During the first three months of fiscal 2016, we had no borrowings and payments of $3.1 million, which includes interest of $0.1 million, under this credit facility. As of August 1, 2015, there were outstanding balances against the credit facility of $2.0 million.  There was $98.0 million available to borrow under the credit facility as of August 1, 2015, which does not include the option to increase the principal amount. We believe the fair value approximates the carrying amount as of August 1, 2015.

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Statement

Certain statements in this report are forward-looking statements that are subject to certain risks and uncertainties.  We undertake no duty to update any such forward-looking statements to conform to actual results or changes in our expectations.  Our business is highly dependent upon two large automotive customers and specific makes and models of automobiles.  Our results will be subject to many of the same risks that apply to the automotive, appliance, computer and communications industries, such as general economic conditions, interest rate fluctuations, consumer spending patterns and technological changes.   Other factors which may result in materially different results for future periods include the following risk factors. Additional risks and uncertainties not presently known or that our management currently believe to be insignificant may also adversely affect our financial condition or results of operations.  These risk factors should be considered in connection with evaluating the forward-looking statements contained in this report because these factors could cause our actual results and condition to differ materially from those projected in forward-looking statements.  The forward-looking statements in this report are subject to the safe harbor protection provided under the securities laws and are made as of the date of this report.

• Our business is highly dependent on two large automotive customers. If we were to lose either of these customers or experienced a significant decline in the volume or price of products purchased by these customers, or if either of the customers declare bankruptcy, our future results could be adversely affected.

• Because we derive a substantial portion of our revenues from customers in the automotive, appliance, computer and communications industries, we are susceptible to trends and factors affecting those industries.

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• Our ability to market our automotive products is subject to a lengthy sales cycle, which requires significant investment prior to significant sales revenues, and there is no assurance that our products will be implemented in any particular vehicle.

• We are subject to continuing pressure to lower our prices.

• A significant fluctuation between the U.S. dollar and other currencies could adversely impact our operating results.

• Our inability to effectively manage the timing, volume, quality and cost of new program launches could adversely affect our financial performance.

• Disruption of our supply chain could have an adverse effect on our business, financial condition and results of operations.

• We are dependent on the availability and price of materials.

• A significant portion of our business activities are conducted in foreign countries, exposing us to additional risks that may not exist in the United States.

• Changes in our effective tax rate may harm our results of operations.

• Our gross margins are subject to fluctuations due to many factors such as geographical and vertical market pricing mix, changes in the mix of our prototyping and production-based business, competitive pricing dynamics and customer mix, pricing concessions, various manufacturing cost variables including product yields, package and assembly costs and provisions for obsolete inventory and the absorption of manufacturing overhead and any significant decrease in our gross margins could adversely affect our business, financial condition and results of operations.

• We may be required to recognize impairment charges.

• We may be unable to keep pace with rapid technological changes, which could adversely affect our business.

• We currently have a significant amount of our cash located outside the U.S.

• Any decision to strategically divest one or more current businesses or our inability to capitalize on prior or future acquisitions may adversely affect our business.

• Products we manufacture may contain design or manufacturing defects that could result in reduced demand for our products or services, costs associated with recalls, or liability claims against us.

• If we are unable to protect our intellectual property or we infringe, or are alleged to infringe, on another person’s intellectual property, our business, financial condition and operating results could be materially adversely affected.

• Our technology-based business and the markets in which we operate are highly competitive. If we are unable to compete effectively, our sales could decline.

• Should a catastrophic event or other significant business interruption occur at any of our facilities, we could face significant reconstruction or remediation costs, penalties, third party liability and loss of production capacity, which could adversely affect our business.

• Our information technology (“IT”) systems could be breached.

• Regulations related to the use of conflict-free minerals may increase our costs and expenses, and an inability to certify that our products are conflict-free may adversely affect customer relationships.

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Any such forward-looking statements are not guarantees of future performance and actual results, developments and business decisions may differ materially from those foreseen in such forward-looking statements.  These forward-looking statements speak only as of the date of the report, press release, statement, document, webcast or oral discussion in which they are made.  We do not intend to update any forward-looking statements, all of which are expressly qualified by the foregoing.  See Part I — Item 1A, Risk Factors of our Form 10-K for the fiscal year ended May 2, 2015, for a further discussion regarding some of the reasons that actual results may be materially different from those we anticipate.

Overview

We are a global manufacturer of component and subsystem devices with manufacturing, design and testing facilities in China, Egypt, Germany, India, Italy, Lebanon, Malta, Mexico, Singapore, Switzerland, the United Kingdom and the United States. We are a global designer and manufacturer of electronic and electro-mechanical devices. We design, manufacture and market devices employing electrical, radio remote control, electronic, wireless, sensing and optical technologies. Our business is managed on a segment basis, with those segments being Automotive, Interface, Power Products and Other.  For more information regarding the business and products of these segments, see “Item 1. Business.” of our Form 10-K for the fiscal year ended May 2, 2015.

Our components are found in the primary end markets of the aerospace, appliance, automotive, construction, consumer and industrial equipment markets, communications (including information processing and storage, networking equipment, wireless and terrestrial voice/data systems), rail and other transportation industries.

Sale of Trace Laboratories    

On February 3, 2015, we sold our 100% ownership interest in our Trace Laboratories businesses for $11.7 million,

including $0.5 million held in escrow which is expected to be received in fiscal 2016. The businesses, located in Maryland and

Illinois, provided services for qualification testing and certification, and analysis of electronic and optical components. The net

assets of the businesses had a book value of $4.0 million. We recorded a pre-tax gain of $7.7 million, related to the sale of the net assets in the fourth quarter of fiscal 2015.

Hetronic Germany-GmbH Matters    

For several years, Hetronic Germany-GmbH and Hydronic-Steuersysteme-GmbH (the “Fuchs companies”) served as our distributors for Germany, Austria and other central and eastern European countries pursuant to their respective intellectual property licenses and distribution and assembly agreements. We became aware that the Fuchs companies and their managing director, Albert Fuchs, had materially violated those agreements. As a result, weterminated all of our agreements with the Fuchs companies. On June 20, 2014, we filed a lawsuit against the Fuchs companies in the Federal District Court for the Western District of Oklahoma alleging material breaches of the distribution and assembly agreements seeking damages, as well as various forms of injunctive relief. The defendants have filed counterclaims alleging breach of contract, interference with business relations and business slander. On April 2, 2015, we amended our complaint against the Fuchs Companies to add additional unfair competition and Lanham Act claims and to add additional, affiliated parties. The defendants filed motions to dismiss that are fully briefed and are awaiting ruling by the Court. Discovery has commenced in the case and is ongoing.

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Results of Operations for the Three Months Ended August 1, 2015 as Compared to the Three Months Ended August 2, 2014

Consolidated Results

Below is a table summarizing results for the three months ended:

($ in millions)

(“N/M” equals not meaningful)

	August 1, 2015			August 2, 2014			Net Change			Net Change
Net sales	$	203.3		$	218.1		$	(14.8	)	(6.8	)%
Cost of products sold	149.7			167.6			(17.9		)	(10.7	)%
Gross profit	53.6			50.5			3.1			6.1	%
Selling and administrative expenses	23.2			22.2			1.0			4.5	%
Interest income, net	(0.2		)	—			(0.2		)	N/M
Other income, net	(0.3		)	(0.1		)	(0.2		)	N/M
Income tax expense	7.4			7.0			0.4			5.7	%
Net income attributable to Methode Electronics, Inc.	$	23.5		$	21.4		$	2.1		9.8	%
Percent of sales:	August 1, 2015			August 2, 2014
Net sales	100.0		%	100.0		%
Cost of products sold	73.6		%	76.8		%
Gross margins	26.4		%	23.2		%
Selling and administrative expenses	11.4		%	10.2		%
Interest income, net	(0.1		)%	—		%
Other income, net	(0.1		)%	—		%
Income tax expense	3.6		%	3.2		%
Net income attributable to Methode Electronics, Inc.	11.6		%	9.8		%

Net Sales.  Consolidated net sales decreased$14.8 million, or 6.8%, to $203.3 million for the three months ended August 1, 2015, from $218.1 million for the three months ended August 2, 2014.  The Automotive segment net sales decreased$3.2 million, or 2.0%, to $153.1 million for the first quarter of fiscal 2016, from $156.3 million for the first quarter of fiscal 2015, primarily due to lower sales volumes of the Ford Center Console program, lower sales due to currency rates fluctuations and pricing concessions on certain products, partially offset by increased sales volumes for the GM Center Console program and transmission lead-frame assemblies.  The Interface segment net sales decreased$10.3 million, or 23.4%, to $33.7 million for the first quarter of fiscal 2016, compared to $44.0 million for the first quarter of fiscal 2015, due to lower sales volumes of appliance products and data solutions products and lower radio remote control sales volumes. The Power Products segment net sales increased$0.3 million, or 1.9%, to $16.5 million for the first quarter of fiscal 2016, compared to $16.2 million for the first quarter of fiscal 2015, primarily due to higher sales volumes for cabling and busbar products, partially offset with lower sales volumes for our datacom products.  The Other segment had no sales in the first quarter of fiscal 2016 because the Company sold its Trace Laboratories operating units in the fourth quarter of fiscal 2015 and the remaining operating units in this segment, medical devices, inverters and battery systems, did not have any substantial net sales in the first quarter of fiscal 2016 or fiscal 2015. Translation of foreign operations net sales for the three months ended August 1, 2015 decreased reported net sales by $6.1 million, or 2.9%, due to average currency rate fluctuations in the first quarter of fiscal 2016, compared to the first quarter of fiscal 2015, primarily due to the strengthening of the U.S. dollar compared to the euro.

Cost of Products Sold.  Consolidated cost of products sold decreased$17.9 million, or 10.7%, to $149.7 million for the three months ended August 1, 2015, compared to $167.6 million for the three months ended August 2, 2014.  Consolidated cost of products sold as a percentage of net sales was 73.6% for the first quarter of fiscal 2016, compared to 76.8% for the first

14

quarter of fiscal 2015.  The Automotive segment experienced a decrease in cost of products sold as a percentage of net sales substantially due to favorable commodity pricing of raw materials and favorable currency impact on both the purchase of certain raw materials and labor costs in our foreign operations. The cost of products sold as a percentage of sales was also favorably impacted in the first quarter of fiscal 2016 due to the ramp-up of production in our lower cost manufacturing operation in Egypt. The Interface segment experienced an increase in cost of products sold as a percentage of net sales primarily due to additional costs and inefficiencies experienced during the first quarter of fiscal 2016 related to the move of the radio remote control operation from the Philippines to Egypt. The Power Products segment experienced an increase in cost of goods sold as a percentage of sales due to manufacturing inefficiencies related to decreased sales volumes in North America.

Gross Profit.  Consolidated gross profit increased$3.1 million, or 6.1%, to $53.6 million for the three months ended August 1, 2015, as compared to $50.5 million for the three months ended August 2, 2014.  Gross margins as a percentage of net sales increased to 26.4% for the three months ended August 1, 2015, compared to 23.2% for the three months ended August 2, 2014.  The increase is primarily due to favorable commodity pricing and the favorable currency impact on the purchase of certain raw materials and labor costs in our foreign operations, partially offset with inefficiencies and expenses related to the move of our Philippine operation and inefficiencies as a result of lower sales volumes in the U.S. for the Interface and Power Products segments.

Selling and Administrative Expenses.  Selling and administrative expenses increased by $1.0 million, or 4.5%, to $23.2 million for the three months ended August 1, 2015, compared to $22.2 million for the three months ended August 2, 2014.  Selling and administrative expenses as a percentage of net sales increased to 11.4% for the three months ended August 1, 2015 from 10.2% for the three months ended August 2, 2014. In the first quarter of fiscal 2016, expenses for legal and other professional fees increased $1.2 million and travel expenses increased $0.4 million, partially offset by lower stock award compensation expense of $0.6 million.

Interest Income, Net.  Interest income, net was income of $0.2 million for the three months ended August 1, 2015, compared to no interest income for the three months ended August 2, 2014.

Other Income, Net. Other income, net increased $0.2 million, to $0.3 million for the three months ended August 1, 2015, compared to $0.1 million for the three months ended August 2, 2014. The first quarter of fiscal 2016 includes a miscellaneous expense of $0.3 million. All other amounts for both the first quarter of fiscal 2016 and the first quarter of fiscal 2015, relate to currency rate fluctuations. The functional currencies of these operations are the British pound, Chinese yuan, Euro, Indian rupee, Mexican peso, Singapore dollar and Swiss franc. Some foreign operations have transactions denominated in currencies other than their functional currencies, primarily sales in U.S. dollars and euros, creating exchange rate sensitivities.

Income Tax Expense.  Income tax expense increased$0.4 million, or 5.7%, to $7.4 million for the three months ended August 1, 2015, compared to $7.0 million for the three months ended August 2, 2014.  The Company's effective tax rate decreased slightly to 23.9% in the first quarter of fiscal 2016, compared to 24.6% in the first quarter quarter of fiscal 2015.

Net Income Attributable to Methode Electronics, Inc.  Net income attributable to Methode Electronics, Inc. increased$2.1 million, or 9.8%, to $23.5 million for the three months ended August 1, 2015, compared to $21.4 million for the three months ended August 2, 2014, primarily due to favorable commodity pricing of raw materials and favorable currency impact on both the purchase of certain raw materials and labor costs in our foreign operations and lower stock award compensation expense, partially offset by no sales or earnings due to the sale of Trace Laboratories, lower sales volumes, cost associated with the move of the Philippines operation to Egypt and higher legal and travel expenses.

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Operating Segments

Automotive Segment Results

Below is a table summarizing results for the three months ended:

($ in millions)

	August 1, 2015			August 2, 2014			Net Change			Net Change
Net sales	$	153.1		$	156.3		$	(3.2	)	(2.0	)%
Cost of products sold	109.6			121.4			(11.8		)	(9.7	)%
Gross profit	43.5			34.9			8.6			24.6	%
Selling and administrative expenses	7.6			7.6			—			—	%
Income from operations	$	35.9		$	27.3		$	8.6		31.5	%
Percent of sales:	August 1, 2015			August 2, 2014
Net sales	100.0		%	100.0		%
Cost of products sold	71.6		%	77.7		%
Gross margins	28.4		%	22.3		%
Selling and administrative expenses	5.0		%	4.9		%
Income from operations	23.4		%	17.5		%

Net Sales.  Automotive segment net sales decreased$3.2 million, or 2.0%, to $153.1 million for the three months ended August 1, 2015, from $156.3 million for the three months ended August 2, 2014.  Net sales decreased in North America by $6.3 million, or 6.7%, to $87.5 million in the first quarter of fiscal 2016, compared to $93.8 million in the first quarter of fiscal 2015, primarily due to lower sales volumes of the Ford Center Console program which substantially completed production at the end of fiscal 2015. Sales volumes of the GM Center Console program increased, partially offset with pricing concessions on certain products. In addition, sales volumes increased for our transmission lead-frame assemblies in the first quarter of fiscal 2016 as compared to the first quarter of fiscal 2015. Net sales decreased in Europe by $2.5 million, or 6.0%, to $38.9 million in the first quarter of fiscal 2016, compared to $41.4 million in the first quarter of fiscal 2015, primarily due to currency rate fluctuations, partially offset with higher tooling sales and increased sales volumes for hidden switch products. Net sales in Asia increased $5.6 million, or 26.5%, to $26.7 million in the first quarter of fiscal 2016, compared to $21.1 million in the first quarter of fiscal 2015, primarily due to higher sales volumes for our transmission lead-frame assemblies, linear position sensor products and interior lighting products, partially offset with lower sales volumes of steering angle sensor products. Translation of foreign operations net sales for the three months ended August 1, 2015 decreased reported net sales by $6.1 million, or 3.8%, due to average currency rates in the first quarter of fiscal 2016, compared to the average currency rates in the first quarter of fiscal 2015, primarily due to the strengthening of the U.S. dollar as compared to the euro.

Cost of Products Sold.  Automotive segment cost of products sold decreased $11.8 million, or 9.7%, to $109.6 million for the three months ended August 1, 2015, compared to $121.4 million for the three months ended August 2, 2014.  The Automotive segment cost of products sold as a percentage of net sales decreased to 71.6% in the first quarter of fiscal 2016, compared to 77.7% in the first quarter of fiscal 2015.  The decrease is substantially due to favorable commodity pricing of raw materials and favorable currency impact on both the purchase of certain raw materials and labor costs in our foreign operations. The cost of products sold as a percentage of sales was also favorably impacted in the first quarter of fiscal 2016 due to the ramp-up of production in our lower cost manufacturing operation in Egypt. In addition, the first quarter of fiscal 2016 was favorably impacted by $1.3 million due to a refund of import duties from prior periods as a result of the U.S. signing into law in June 2015 to renew a trade program that retrospectively removes tariffs on imports from certain countries.

Gross Profit.  Automotive segment gross profit increased$8.6 million, or 24.6%, to $43.5 million for the three months ended August 1, 2015, as compared to $34.9 million for the three months ended August 2, 2014.  The Automotive segment

16

gross margins as a percentage of net sales increased to 28.4% for the three months ended August 1, 2015, as compared to 22.3% for the three months ended August 2, 2014.  The increase is substantially due to favorable commodity pricing of raw materials and favorable currency impact on both the purchase of certain raw materials and labor costs in our foreign operations. The gross margins as a percentage of sales was also favorably impacted in the first quarter of fiscal 2016 due to the ramp-up of production in our lower cost manufacturing operation in Egypt and the refund of tariffs on imports of raw matererial, partially offset by price concessions.

Selling and Administrative Expenses.  Selling and administrative expenses remained constant at $7.6 million for both the three months ended August 1, 2015 and August 2, 2014.  Selling and administrative expenses as a percentage of net sales increased to 5.0% for the three months ended August 1, 2015 from 4.9% for the three months ended August 2, 2014, due to lower sales volumes. The expenses in the first quarter quarter of fiscal 2016 increased for higher salary expense and travel expenses, offset with lower legal fees and stock award compensation expenses.

Income from Operations.  Automotive segment income from operations increased$8.6 million, or 31.5%, to $35.9 million for the three months ended August 1, 2015, compared to $27.3 million for the three months ended August 2, 2014. The first quarter of fiscal 2016 benefitted from favorable commodity pricing of raw materials and favorable currency impact on both the purchase of certain raw materials and labor costs in our foreign operations, partially offset with lower sales volumes and customer pricing concessions.

Interface Segment Results

Below is a table summarizing results for the three months ended:

($ in millions)

	August 1, 2015			August 2, 2014			Net Change			Net Change
Net sales	$	33.7		$	44.0		$	(10.3	)	(23.4	)%
Cost of products sold	26.5			31.9			(5.4		)	(16.9	)%
Gross profit	7.2			12.1			(4.9		)	(40.5	)%
Selling and administrative expenses	6.5			5.1			1.4			27.5	%
Income from operations	$	0.7		$	7.0		$	(6.3	)	(90.0	)%
Percent of sales:	August 1, 2015			August 2, 2014
Net sales	100.0		%	100.0		%
Cost of products sold	78.6		%	72.5		%
Gross margins	21.4		%	27.5		%
Selling and administrative expenses	19.3		%	11.6		%
Income from operations	2.1		%	15.9		%

Net Sales.  Interface segment net sales decreased$10.3 million, or 23.4%, to $33.7 million for the three months ended August 1, 2015, from $44.0 million for the three months ended August 2, 2014.  Net sales decreased in North America by $8.6 million, or 24.7%, to $26.2 million in the first quarter of fiscal 2016, compared to $34.8 million in the first quarter of fiscal 2015, primarily due to lower sales volumes of appliance products and data solutions products, partially offset with higher radio remote control sales volumes. Net sales in Europe increased $0.5 million, or 7.9%, to $6.8 million in the first quarter of fiscal 2016, compared to $6.3 million in the first quarter of fiscal 2015, primarily due to higher radio remote control sales volumes, partially offset with lower data solutions and sensor sales volumes. Net sales in Asia decreased $2.2 million, or 75.9%, to $0.7 million in the first quarter of fiscal 2016, compared to $2.9 million in the first quarter of fiscal 2015, primarily due to lower sales volumes of radio remote controls. The Philippine radio remote control operation was moved to Egypt during the first quarter of fiscal 2016.

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Cost of Products Sold.  Interface segment cost of products sold decreased$5.4 million, or 16.9%, to $26.5 million for the three months ended August 1, 2015, compared to $31.9 million for the three months ended August 2, 2014.  Interface segment cost of products sold as a percentage of net sales increased to 78.6% for the three months ended August 1, 2015, compared to 72.5% for the three months ended August 2, 2014.  The increase in cost of products sold as a percentage of net sales is primarily due additional costs and inefficiencies experienced during the first quarter of fiscal 2016 related to the move of the radio remote control operation from the Philippines to Egypt. The Company experienced moving costs, severance and redundant staffing of $1.0 million during the first quarter of fiscal 2016 in addition to the manufacturing inefficiencies. Cost of goods sold as a percentage of sales also increased in the first quarter of fiscal 2016 due to lower sales volumes for appliance and data solutions products.

Gross Profit.  Interface segment gross profit decreased$4.9 million, or 40.5%, to $7.2 million for the three months ended August 1, 2015, compared to $12.1 million for the three months ended August 2, 2014.  Gross margins as a percentage of net sales decreased to 21.4% for the three months ended August 1, 2015, from 27.5% for the three months ended August 2, 2014.  The decrease in gross margins as a percentage of net sales is primarily due to moving costs, severance and redundant staffing related to the move from the Philippines to Egypt and lower appliance and data solution products sales volumes.

Selling and Administrative Expenses.  Selling and administrative expenses increased$1.4 million, or 27.5%, to $6.5 million for the three months ended August 1, 2015, compared to $5.1 million for the three months ended August 2, 2014.  Selling and administrative expenses as a percentage of net sales increased to 19.3% for the three months ended August 1, 2015, from 11.6% for the three months ended August 2, 2014. The increase in selling and administrative expenses is due to increased legal expenses, intangible asset amortization expense, travel and other selling expenses.

Income from Operations.  Interface segment income from operations decreased$6.3 million, or 90.0%, to $0.7 million for the three months endedAugust 1, 2015, compared to $7.0 million for the three months endedAugust 2, 2014, primarily due to lower sales volumes, additional costs and inefficiencies experienced during the first quarter of fiscal 2016 related to the move of the radio remote control operation from the Philippines to Egypt, increased legal expenses, intangible asset amortization expense, travel and other selling expenses.

Power Products Segment Results

Below is a table summarizing results for the three months ended:

($ in millions)

	August 1, 2015			August 2, 2014			Net Change			Net Change
Net sales	$	16.5		$	16.2		$	0.3		1.9	%
Cost of products sold	12.4			12.0			0.4			3.3	%
Gross profit	4.1			4.2			(0.1		)	(2.4	)%
Selling and administrative expenses	1.0			1.2			(0.2		)	(16.7	)%
Income from operations	$	3.1		$	3.0		$	0.1		3.3	%
Percent of sales:	August 1, 2015			August 2, 2014
Net sales	100.0		%	100.0		%
Cost of products sold	75.2		%	74.1		%
Gross margins	24.8		%	25.9		%
Selling and administrative expenses	6.1		%	7.4		%
Income from operations	18.8		%	18.5		%

Net Sales.  Power Products segment net sales increased$0.3 million, or 1.9%, to $16.5 million for the three months endedAugust 1, 2015, compared to $16.2 million for the three months endedAugust 2, 2014.  Net sales decreased in North

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America by $1.7 million, or 16.2%, to $8.8 million in the first quarter of fiscal 2016, compared to $10.5 million in the first quarter of fiscal 2015, primarily due to lower sales volumes of busbar and heat sink products. Net sales in Europe increased $1.6 million, or 266.7%, to $2.2 million in the first quarter of fiscal 2016, compared to $0.6 million in the first quarter of fiscal 2015, primarily due to higher sales volumes of bypass switches and busbar products. Net sales in Asia increased $0.4 million, or 7.8%, to $5.5 million in the first quarter of fiscal 2016, compared to $5.1 million in the first quarter of fiscal 2015, primarily due to increased sales volumes of busbar and cabling products.

Cost of Products Sold.  Power Products segment cost of products sold increased$0.4 million, or 3.3%, to $12.4 million for the three months ended August 1, 2015, compared to $12.0 million for the three months ended August 2, 2014.  The Power Products segment cost of products sold as a percentage of net sales increased to 75.2% for the three months ended August 1, 2015, from 74.1% for the three months ended August 2, 2014.  The increase in cost of products sold as a percentage of net sales is primarily due to manufacturing inefficiencies related to decreased sales volumes in North America.

Gross Profit.  Power Products segment gross profit decreased$0.1 million, or 2.4%, to $4.1 million in the first quarter of fiscal 2015, compared to $4.2 million in the first quarter of fiscal 2014.  Gross margins as a percentage of net sales decreased to 24.8% for the three months ended August 1, 2015 from 25.9% for the three months ended August 2, 2014. The decrease in gross margins as a percentage of net sales is primarily due to manufacturing inefficiencies related to decreased sales volumes in North America.

Selling and Administrative Expenses.  Selling and administrative expenses decreased$0.2 million, or 16.7%, to $1.0 million for the three months ended August 1, 2015, compared to $1.2 million for the three months ended August 2, 2014.  Selling and administrative expenses as a percentage of net sales decreased to 6.1% for the three months ended August 1, 2015 from 7.4% for the three months ended August 2, 2014. Selling and administrative expenses decreased primarily due to lower commission and bonus expense in North America.

Income From Operations.  Power Products segment income from operations increased$0.1 million, or 3.3%, to $3.1 million for the three months ended August 1, 2015, compared to $3.0 million for the three months ended August 2, 2014, due to increased sales volumes, lower commission and bonus expense in North America, partially offset with manufacturing inefficiencies related to decreased sales volumes in North America. 

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Other Segment Results

Below is a table summarizing results for the three months ended:

($ in millions)

(“N/M” equals not meaningful)

	August 1, 2015			August 2, 2014			Net Change			Net Change
Net sales	$	—		$	1.6		$	(1.6	)	(100.0	)%
Cost of products sold	1.0			2.0			(1.0		)	(50.0	)%
Gross profit	(1.0		)	(0.4		)	(0.6		)	150.0	%
Selling and administrative expenses	1.3			1.5			(0.2		)	(13.3	)%
Loss from operations	$	(2.3	)	$	(1.9	)	$	(0.4	)	N/M
Percent of sales:	August 1, 2015			August 2, 2014
Net sales	N/M			100.0		%
Cost of products sold	N/M			125.0		%
Gross margins	N/M			(25.0		)%
Selling and administrative expenses	N/M			93.8		%
Loss from operations	N/M			(118.8		)%

Net Sales.  The Other segment net sales decreased$1.6 million, due to no sales for the three months ended August 1, 2015, compared to $1.6 million for the three months ended August 2, 2014. The decrease is primarily due to sale of Trace Laboratories business at the beginning of the fourth quarter of fiscal 2015. The remaining operating units in this segment, medical devices, inverters and battery systems, do not have any substantial net sales in the first quarter of fiscal 2016 or fiscal 2015.

Cost of Products Sold.  Other segment cost of products sold decreased$1.0 million, or 50.0%, to $1.0 million for the three months ended August 1, 2015, compared to $2.0 million for the three months ended August 2, 2014. The decrease is primarily due to the sale of Trace Laboratories, partially offset with development costs in our medical devices, inverters and battery systems operating units.

Gross Profit.  The Other segment gross profit was a loss of $1.0 million for the three months ended August 1, 2015, compared to a loss of $0.4 million in the three months ended August 2, 2014.  The decrease is primarily due to the sale of Trace Laboratories, partially offset with development costs in our medical devices, inverters and battery systems operating units.

Selling and Administrative Expenses.  Selling and administrative expenses decreased$0.2 million, or 13.3%, to $1.3 million for the three months ended August 1, 2015, compared to $1.5 million for the three months ended August 2, 2014.  The decrease is primarily due to the sale of Trace Laboratories business, partially offset by increased headcount and professional fees in our medical devices, inverters and battery systems operating units.

Loss From Operations  The Other segment loss from operations increased$0.4 million, to $2.3 million for the three months ended August 1, 2015, compared to $1.9 million for the three months ended August 2, 2014.  The increased loss was primarily due to sale of Trace Laboratories business, increased development expenses, professional fees and headcount.

20

Liquidity and Capital Resources

We believe our current world-wide cash balances together with expected future cash flows to be generated from operations and our committed credit facility will be sufficient to support current operations. A significant amount of cash and expected future cash flows are located outside of the U.S. Of the $167.9 million of cash and cash equivalents as of August 1, 2015, virtually all was held in subsidiaries outside the U.S. and all of this amount is deemed to be permanently reinvested and therefore not available to fund our domestic operations. We currently have $2.1 million of federal net operating loss carry-forwards in the U.S. which would reduce the cash tax obligation (if the carry-forward has not otherwise been used) upon any future repatriation of funds.

We are party to an Amended and Restated Credit Agreement with Bank of America, N.A., as administrative agent, and certain other financial institutions, which has a maturity of September 21, 2017. The credit facility is in the aggregate principal amount of $100.0 million, with an option to increase the principal amount by an additional $50.0 million, subject to customary conditions and approval of the lender(s) providing new commitment(s). The credit facility provides for variable rates of interest based on the type of borrowing and the Company's debt to EBITDA financial ratio. The Amended and Restated Credit Agreement is guaranteed by certain of our U.S. subsidiaries. At August 1, 2015, the interest rate on the credit facility was 1.5% plus LIBOR and we were in compliance with the covenants of the agreement. During the first three months of fiscal 2016, we had no borrowings and payments of $3.1 million, which includes interest of $0.1 million, under this credit facility. As of August 1, 2015, there were outstanding balances against the credit facility of $2.0 million.  There was $98.0 million available to borrow under the credit facility as of August 1, 2015, which does not include the option to increase the principal amount.

Cash Flow - Operating Activities

Net cash provided by operating activities decreased$14.2 million to $19.0 million for the first three months of fiscal 2016, compared to $33.2 million for the first three months of fiscal 2015, primarily due to the increased cash use of $15.9 million from the changes in operating assets and liabilities, partially offset with the increase in net income of $2.1 million. The net changes in assets and liabilities resulted in the cash use of $11.1 million in the first three months of fiscal 2016, compared to cash generation of $4.8 million in the first three months of fiscal 2015. The increased cash use in the first three months of fiscal 2016 compared to the first three months of fiscal 2015 is primarily driven by the increased cash payments for bonuses and payroll taxes, partially offset with timing of receivable collections.

Cash Flow - Investing Activities

Net cash used in investing activities increased by $2.6 million due to purchases of property, plant and equipment of $5.9 million for the first three months of fiscal 2016, compared to $3.3 million for the first three months of fiscal 2015. 

Cash Flow - Financing Activities

Net cash used by financing activities increased $0.7 million to $9.6 million in the first three months of fiscal 2016, compared to $8.9 million for the first three months of fiscal 2015.  During the first three months of fiscal 2016, the Company had net payments against the credit facility of $3.0 million, compared to net payments of $10.0 million in the first three months of fiscal 2015. We paid dividends of $3.5 million and $3.4 million, for the first three months of fiscal 2016 and fiscal 2015, respectively. The first three months of fiscal 2016 includes $6.9 million of taxes paid related to net share settlement of equity awards, partially offset by a $3.8 million excess tax benefit on those shares. The first three months of fiscal 2015 includes $4.5 million of proceeds for the exercise of stock options.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, other than operating leases and purchase obligations entered into in the normal course of business.

Item 3.  Quantitative And Qualitative Disclosures About Market Risk

Certain of our foreign operations enter into transactions in currencies other than their functional currency, primarily the U.S. dollar and the Euro.  A 10% change in foreign currency exchange rates from balance sheet date levels could impact our income before income taxes by $6.6 million as of August 1, 2015 and $6.7 million as of May 2, 2015.  We also have foreign currency exposure arising from the translation of our net equity investment in our foreign operations to U.S. dollars.  We

21

generally view our investments in foreign operations with functional currencies other than the U.S. dollar as long-term.  The currencies to which we are exposed are the British pound, Chinese yuan, Euro, Indian Rupee, Mexican peso, Singapore dollar and Swiss franc.  A 10% change in foreign currency exchange rates from balance sheet date levels could impact our net foreign investments by $29.8 million at August 1, 2015 and $28.0 million at May 2, 2015.

We are exposed to market risk from changes in interest rates. The interest rate risk for our credit agreement, under which we had $2.0 million of net borrowings at August 1, 2015, is variable and is determined based on LIBOR. We estimate that a one percentage point change in interest rates would not have a material impact on our results of operations for fiscal 2016 based upon our current and expected levels of our debt.

Item 4.  Controls And Procedures

As of the end of the period covered by this quarterly report on Form 10-Q, we performed an evaluation under the supervision and with the participation of the Company’s management, including our Chief Executive Officer and our Chief Financial Officer, of our “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934).  The Company’s disclosure controls and procedures are designed to ensure that the information required to be disclosed by the Company in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s applicable rules and forms.  As a result of this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective.

There have been no changes in our internal control over financial reporting during the quarter ended August 1, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

22

PART II.         OTHER INFORMATION

Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds.

The following table provides information about the Company's purchase of shares of Company's common stock during the quarter ended August 1, 2015.

ISSUER PURCHASES OF EQUITY SECURITIES

				Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or approximate dollar value) of Shares that may be Purchased Under the Plans or Programs
Period	Total Number of Shares Purchases (1)	Average Price Paid Per Share
May 3, 2015 through June 3, 2015	—	$	—	—	$	—
June 4, 2015 through July 4, 2015	—	$	—	—	$	—
July 5, 2015 through August 1, 2015	258,890	$	26.84	—	$	—

⁽¹⁾ Represents shares surrendered by employees to the Company to satisfy tax withholding obligations in connection with the vesting of shares of restricted stock.

Item 6.          Exhibits

Exhibit Number	Description
10.1	Form Annual Cash Bonus Award Agreement
31.1	Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer
31.2	Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer
32	Certification of Periodic Financial Report Pursuant to 18 U.S.C. Section 1350
101	Interactive Data File

23

SIGNATURES

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:	/s/ Douglas A. Koman
			Douglas A. Koman
			Chief Financial Officer
			(principal financial officer)
Dated:	September 3, 2015

24

INDEX TO EXHIBITS

Exhibit Number	Description
10.1	Form Annual Cash Bonus Award Agreement
31.1	Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer
31.2	Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer
32	Certification of Periodic Financial Report Pursuant to 18 U.S.C. Section 1350
101	Interactive Data File

25

EX-10.1

Exhibit 10.1

METHODE ELECTRONICS, INC.

2014 OMNIBUS INCENTIVE PLAN

ANNUAL BONUS PERFORMANCE UNIT

FORM AWARD AGREEMENT

This Annual Bonus Performance Unit Award Agreement, effective as of ________ __, 201_ (the “Award Agreement”), is entered into by and between Methode Electronics, Inc., a Delaware corporation (the “Company”), and ____________________ (“Grantee”).

WHEREAS, the Company desires to reward Grantee for his services to the Company and to encourage him to continue to work for the benefit of the Company in a manner that will benefit all Company shareholders.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and obligations hereinafter set forth, the Company agrees to award to Grantee the annual bonus Performance Unit described herein under the Company’s 2014 Omnibus Incentive Plan (the “Plan”), subject to the terms and conditions set forth herein and in the Plan.

1.General. This Award Agreement and the Performance Unit awarded herein are subject to all of the provisions of the Plan applicable to Performance Units and Qualified Performance-Based Awards. Unless the context otherwise requires, capitalized terms used herein shall have the same meanings as in the Plan. Grantee hereby acknowledges receipt of a copy of the Plan and has read the Plan and fully understands its content. In the event of any conflict between the terms of this Award Agreement and the terms of the Plan, the terms of the Plan shall control.

2.Grant. The Company hereby grants to Grantee an annual bonus Performance Unit with a value equal to the dollar amount[s] set forth on Exhibit A based on the achievement of the corresponding Performance Goal[s] set forth on such exhibit (the “Award”). This Award is intended to be a Qualified Performance-Based Award within the meaning of Section 11 of the Plan.

For each Performance Goal certified as achieved by the Committee, the Company will pay to Grantee the amount set forth on Exhibit A hereto corresponding to the respective Performance Goal. Unless the Award is properly deferred under the terms of the Plan, the Performance Unit shall be settled and paid in cash within 2 ½ months after the end of the Performance Period (or earlier as provided in the Plan).

3.Construction. This Award Agreement is subject to the terms of the Plan and shall be construed in accordance therewith. The construction and operation of this Award Agreement are governed by the laws of the State of Illinois without regard to any conflicts or choice of law rules or principles that might otherwise refer construction or interpretation of this Award Agreement to the substantive law of another jurisdiction, and any litigation arising out of this Award Agreement shall be brought in the Circuit Court of the State of Illinois or the United States District Court for the Eastern Division of the Northern District of Illinois.

4.Amendment. This Award Agreement may be amended at any time by written agreement between the Company and Grantee. Any such amendment shall be made pursuant to a resolution of the Committee.

5.Severability. In the event that any provision or portion of this Award Agreement shall be determined to be invalid or unenforceable for any reason, the remaining provisions of this Award Agreement shall be unaffected thereby and shall remain in full force and effect.

6.Dispute Resolution. The parties initially shall attempt to resolve by direct negotiation any dispute, controversy or claim arising out of or relating to this Award Agreement or its breach or interpretation (each, a

“Dispute”). For purposes of this negotiation, the Company shall be represented by one or more of its independent directors appointed by the Board of Directors. If the parties are unable to resolve the Dispute by direct negotiation within 30 days after written notice by one party to the other of the Dispute, the Dispute shall be settled by submission by either party of the Dispute to binding arbitration in Chicago, Illinois (unless the parties agree in writing to a different location), before a single arbitrator in accordance with the American Arbitration Association's National Rules for the Resolution of Employment Disputes then in effect. The arbitrator will be an attorney licensed to practice law in the State of Illinois. The decision and award made by the arbitrator shall be final, binding and conclusive on all parties hereto for all purposes, and judgment may be entered thereon in any court having jurisdiction thereof. Except as set forth below, each party shall pay: the fees of his or its attorneys; the expenses of his or its witnesses; and all other expenses connected with presenting his or its case. Except as set forth below, the costs of the arbitration, including the cost of any record or transcripts of the arbitration hearing, administrative fees, the fees of the arbitrator, and all other fees and costs shall be borne equally by the parties. In the event of a Dispute following or in connection with a Change of Control, the Company shall pay the fees of the arbitrator as well as the cost of any record or transcripts of the arbitration hearing and other administrative fees and costs. In all Disputes, the arbitrator will have discretion to make an award of fees, costs and expenses to the prevailing party.

7.Section 409A Compliance. It is the intention of the Company and the Grantee that the Award and other benefits awarded under this Award Agreement shall be exempt from the requirements of Section 409A of the Code and its implementing regulations (“Section 409A”) and shall be interpreted in a manner consistent with this interpretation. In the event that the Company or the Grantee reasonably determines that any award under this Award Agreement may be subject to Section 409A, the Company and Grantee shall work together to adopt such amendments to this Award Agreement or adopt other policies or procedures (including amendments, policies and procedures with retroactive effective to the extent allowable by applicable laws), or take any other commercially reasonable actions necessary or appropriate to cause the Award and other benefits awarded under this Award Agreement to (i) be exempt from Section 409A, or (ii) otherwise comply with the requirements of Section 409A.

8.Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

9.Entire Agreement and Clawback Policy. This Agreement supersedes and cancels all prior written or oral agreements and understandings relating to the terms of this Agreement. This Agreement and the Award granted hereunder are subject to any Company Clawback Policy in effect as of the date of this Agreement or as subsequently amended, modified or replaced and the terms of any Change of Control Agreement between the Company and Grantee, as the same may be amended from time to time, if any.

10.No Retention Rights. Nothing herein contained shall confer on the Grantee any right with respect to continuation of employment or services by the Company or its Subsidiaries or Affiliates, or interfere with the right of the Company or its Subsidiaries or Affiliates to terminate at any time the employment or service of the Grantee.

IN WITNESS WHEREOF, the Company by one of its duly authorized officers has executed this Award Agreement as of the day and year first above written.

METHODE ELECTRONICS, INC.

By:

Isabelle C. Goossen

Its:Chair, Compensation Committee

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Donald W. Duda, certify that:

1. I have reviewed this report on Form 10-Q of Methode Electronics, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrants fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated:	September 3, 2015
		/s/ Donald W. Duda
		Chief Executive Officer
		(principal executive officer)

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Douglas A. Koman, certify that:

1. I have reviewed this report on Form 10-Q of Methode Electronics, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrants fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated:	September 3, 2015
		/s/ Douglas A. Koman
		Chief Financial Officer
		(principal financial officer)

EX-32.1

Exhibit 32

METHODE ELECTRONICS, INC.

Certification of Periodic Financial Report

Pursuant to 18 U.S.C. Section 1350

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of Methode Electronics, Inc. (the “Company”) certifies that the Quarterly Report on Form 10-Q of the Company for the quarter ended August 1, 2015 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in that Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:	September 3, 2015	/s/ Donald W. Duda
		Donald W. Duda
		Chief Executive Officer
Dated:	September 3, 2015	/s/ Douglas A. Koman
		Douglas A. Koman
		Chief Financial Officer

1

XML

NET INCOME PER SHARE - Schedule of Computation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Aug. 01, 2015	Aug. 02, 2014
Earnings Per Share [Abstract]
Numerator - net income attributable to Methode Electronics, Inc.	$ 23.5	$ 21.4
Denominator for basic net income per share-weighted average shares outstanding and vested/unissued restricted stock awards (in shares)	38,904,743	38,464,558
Dilutive potential common shares-employee and director stock options, restricted stock awards and restricted stock units (in shares)	126,055	183,646
Denominator for diluted net income per share (in shares)	39,030,798	38,648,204
Net income per share - basic (in dollars per share)		$ 0.56
Net income per share - diluted (in dollars per share)		$ 0.55

XML

GOODWILL AND INTANGIBLE ASSETS

3 Months Ended

Aug. 01, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

We review our goodwill and other intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable, and at least annually in accordance with Accounting Standards Codification ("ASC") No. 350, “Intangibles — Goodwill and Other”.  The values assigned to goodwill and intangible assets are normally based on estimates and judgments regarding expectations for the success and life cycle of products and technologies acquired.  A severe decline in expectations could result in significant impairment charges, which could have a material adverse effect on our financial condition and results of operations.

The following table shows the roll-forward of goodwill in the financial statements for the three months ended August 1, 2015:

	As of August 1, 2015
				Power
	Interface			Products		Total
Balance as of May 2, 2015	$	0.7		$	1.0	$	1.7
Foreign currency translation	(0.1		)	—		(0.1		)
Balance as of August 1, 2015	$	0.6		$	1.0	$	1.6

The following tables present details of the Company’s intangible assets:

	As of August 1, 2015
							Wtd. Avg.
							Remaining
			Accumulated				Amortization
	Gross		Amortization		Net		Periods (Years)
Customer relationships and agreements	$	16.3	$	15.1	$	1.2	8.5
Trade names, patents and technology licenses	25.8		16.3		9.5		3.1
Covenants not to compete	0.1		0.1		—		2.2
Total	$	42.2	$	31.5	$	10.7

	As of May 2, 2015
							Wtd. Avg.
							Remaining
			Accumulated				Amortization
	Gross		Amortization		Net		Periods (Years)
Customer relationships and agreements	$	16.3	$	15.0	$	1.3	8.8
Trade names, patents and technology licenses	25.8		15.8		10.0		3.3
Covenants not to compete	0.1		0.1		—		2.4
Total	$	42.2	$	30.9	$	11.3

The estimated aggregate amortization expense for the current fiscal year and each of the four succeeding fiscal years is as follows:

2016	$2.4
2017	$2.3
2018	$2.2
2019	$2.1
2020	$0.2

As of August 1, 2015 and May 2, 2015, the trade names, patents and technology licenses include $1.8 million of trade names that are not subject to amortization.

XML

PRE-PRODUCTION COSTS RELATED TO LONG-TERM SUPPLY ARRANGEMENTS - Narrative (Details) - USD ($) $ in Millions	Aug. 01, 2015	May. 02, 2015
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Pre-production costs	$ 10.8	$ 10.5

XML

SEGMENT INFORMATION - Schedule of Segment Reporting Information, by Segment (Details) - USD ($) $ in Millions	3 Months Ended
	Aug. 01, 2015	Aug. 02, 2014
Segment Reporting Information [Line Items]
Net sales		$ 218.1
Transfers between segments		(218.1)
Net sales to unaffiliated customers	$ 203.3	218.1
Income (loss) from operations	30.4	28.3
Interest income, net	(0.2)	0.0
Other income, net	(0.3)	(0.1)
Income before income taxes	30.9	28.4
Operating Segments
Segment Reporting Information [Line Items]
Net sales	203.3
Transfers between segments	(203.3)
Intersegment Eliminations
Segment Reporting Information [Line Items]
Net sales	0.0	0.0
Transfers between segments	0.0	0.0
Automotive
Segment Reporting Information [Line Items]
Net sales to unaffiliated customers	153.1	156.3
Income (loss) from operations	35.9	27.3
Automotive | Operating Segments
Segment Reporting Information [Line Items]
Net sales	154.9	156.8
Transfers between segments	(154.9)	(156.8)
Automotive | Intersegment Eliminations
Segment Reporting Information [Line Items]
Net sales	1.8	0.5
Transfers between segments	(1.8)	(0.5)
Interface
Segment Reporting Information [Line Items]
Net sales to unaffiliated customers	33.7	44.0
Income (loss) from operations	0.7	7.0
Interface | Operating Segments
Segment Reporting Information [Line Items]
Net sales	34.1	44.6
Transfers between segments	(34.1)	(44.6)
Interface | Intersegment Eliminations
Segment Reporting Information [Line Items]
Net sales	0.4	0.6
Transfers between segments	(0.4)	(0.6)
Power Products
Segment Reporting Information [Line Items]
Net sales to unaffiliated customers	16.5	16.2
Income (loss) from operations	3.1	3.0
Power Products | Operating Segments
Segment Reporting Information [Line Items]
Net sales	16.5	16.3
Transfers between segments	(16.5)	(16.3)
Power Products | Intersegment Eliminations
Segment Reporting Information [Line Items]
Net sales	0.0	0.1
Transfers between segments	0.0	(0.1)
Other
Segment Reporting Information [Line Items]
Net sales to unaffiliated customers	0.0	1.6
Income (loss) from operations	(2.3)	(1.9)
Other | Operating Segments
Segment Reporting Information [Line Items]
Net sales	0.1	1.6
Transfers between segments	(0.1)	(1.6)
Other | Intersegment Eliminations
Segment Reporting Information [Line Items]
Net sales	0.1	0.0
Transfers between segments	(0.1)	0.0
Eliminations/Corporate
Segment Reporting Information [Line Items]
Net sales	(2.3)	(1.2)
Transfers between segments	2.3	1.2
Net sales to unaffiliated customers	0.0	0.0
Income (loss) from operations	(7.0)	(7.1)
Eliminations/Corporate | Intersegment Eliminations
Segment Reporting Information [Line Items]
Net sales	(2.3)	(1.2)
Transfers between segments	$ 2.3	$ 1.2

XML

DEBT AND CREDIT AGREEMENT - Narrative (Details) - USD ($)	3 Months Ended
	Aug. 01, 2015	Aug. 02, 2014
Line of Credit Facility [Line Items]
Repayments in the period	$ 3,000,000	$ 10,000,000
Line of credit
Line of Credit Facility [Line Items]
Maximum borrowing capacity	100,000,000.0
Optional increase in borrowing capacity, up to	$ 50,000,000.0
Basis spread on variable rate	1.50%
Variable rate basis	LIBOR
Proceeds from borrowings	$ 0
Repayments in the period	3,100,000
Interest expense	100,000
Amount outstanding	2,000,000
Available borrowing capacity	$ 98,000,000

XML

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

3 Months Ended

Aug. 01, 2015

Accounting Changes and Error Corrections [Abstract]

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09 “Revenue from Contracts with Customers”, which creates Accounting Standards Codification (“ASC”) 606 “Revenue from Contracts with Customers” and supersedes the revenue recognition requirements in ASC 605 “Revenue Recognition”. The update outlines a comprehensive model for all entities to use in accounting for revenue arising from contracts with customers as well as required disclosures. Entities have the option of using either a full retrospective or modified approach to adopt the new guidance. The ASU is effective for annual reporting periods beginning after December 15, 2016 and interim periods within those annual periods. In July 2015, the FASB reached a decision to delay the adoption date of the new ASU until December 15, 2017. We are still assessing the impact of adoption on our consolidated financial statements.

In July 2015, FASB issued ASU 2015-11, "Inventory (Topic 330): Simplifying the Measurement of Inventory". This ASU requires an entity to measure inventory at the lower of cost and net realizable value, rather than at the lower of cost or market. The guidance is effective for interim and annual periods beginning after December 15, 2016, and is to be applied prospectively. Early adoption is permitted. Management is assessing the impact of adoption on its consolidated financial statements.

In May 2015, the FASB issued ASU 2015-7, "Fair Value Measurement: Disclosure for Investments in Certain Entities that calculates Net Asset Value per Share (or its Equivalent)". This amendment removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net value asset per share. This new guidance is effective for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted. We do not believe the adoption of this standard will have significant effect on our ongoing financial reporting.

In April 2015, the FASB issued ASU 2015-03, "Simplifying the Presentation of Debt Issuance Costs". This ASU requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The amendments in this ASU are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The update requires retrospective application and represents a change in accounting principle. We do not believe the adoption of this standard will have a significant effect on our ongoing financial reporting.

In February 2015, the FASB issued an accounting standard ASU 2015-02, "Consolidation (Topic 810) - Amendments to the Consolidation Analysis", which changes the way reporting enterprises evaluate whether (a) they should consolidate limited partnerships and similar entities, (b) fees paid to a decision maker or service provider are variable interests in a variable interest entity VIE, and (c) variable interests in a VIE held by related parties of the reporting enterprise require the reporting enterprise to consolidate the variable interest entity. The new accounting standard is effective for annual and interim periods in fiscal years beginning after December 15, 2015. We do not believe the adoption of this standard will have a significant effect on our ongoing financial reporting.

In January 2015, the FASB issued an accounting standard ASU 2015-01, "Income Statement - Extraordinary and Unusual Items (Subtopic 225-20)", which eliminates the concept of extraordinary items.The standard does not affect disclosure guidance for events or transactions that are unusual in nature or infrequent in their occurrence. The ASU is effective in annual periods, and interim periods within those annual periods, beginning after December 15, 2015. The standard allows prospective or retrospective application. Early adoption is permitted if applied from the beginning of the fiscal year of adoption. We do not believe the adoption of this standard will have any significant effect on our ongoing financial reporting.

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CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Aug. 01, 2015	May. 02, 2015
CURRENT ASSETS
Cash and cash equivalents	$ 167.9	$ 168.1
Accounts receivable, net	159.7	170.4
Inventories:
Finished products	15.4	16.0
Work in process	11.7	12.2
Materials	42.6	42.7
Net inventory	69.7	70.9
Deferred income taxes	14.8	15.0
Prepaid expenses and other current assets	15.0	13.9
TOTAL CURRENT ASSETS	427.1	438.3
PROPERTY, PLANT AND EQUIPMENT	308.7	309.2
Less allowances for depreciation	218.8	215.9
Net property, plant and equipment	89.9	93.3
GOODWILL	1.6	1.7
INTANGIBLE ASSETS, net	10.7	11.3
PRE-PRODUCTION COSTS	10.8	10.5
DEFERRED INCOME TAXES	28.0	32.1
OTHER ASSETS	19.7	18.6
Total other long-term assets	70.8	74.2
TOTAL ASSETS	587.8	605.8
CURRENT LIABILITIES
Accounts payable	68.0	70.1
Other current liabilities	36.0	60.5
TOTAL CURRENT LIABILITIES	104.0	130.6
LONG-TERM DEBT	2.0	5.0
OTHER LIABILITIES	3.9	4.0
DEFERRED COMPENSATION	7.9	7.2
SHAREHOLDERS’ EQUITY
Common stock, $0.50 par value, 100,000,000 shares authorized, 40,081,131 and 39,702,036 shares issued as of August 1, 2015 and May 2, 2015, respectively	20.0	19.9
Additional paid-in capital	106.2	102.2
Accumulated other comprehensive income	(14.4)	(8.3)
Treasury stock, 1,605,514 shares and 1,346,624 as of August 1, 2015 and May 2, 2015, respectively	(18.4)	(11.5)
Retained earnings	376.5	356.5
TOTAL METHODE ELECTRONICS, INC. SHAREHOLDERS’ EQUITY	469.9	458.8
Noncontrolling interest	0.1	0.2
TOTAL EQUITY	470.0	459.0
TOTAL LIABILITIES AND EQUITY	$ 587.8	$ 605.8

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	3 Months Ended
	Aug. 01, 2015	Aug. 02, 2014
OPERATING ACTIVITIES
Net income	$ 23.5	$ 21.4
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for depreciation	5.6	5.6
Amortization of intangibles	0.6	0.4
Amortization of stock awards and stock options	0.4	1.0
Changes in operating assets and liabilities	(11.1)	4.8
NET CASH PROVIDED BY OPERATING ACTIVITIES	19.0	33.2
INVESTING ACTIVITIES
Purchases of property, plant and equipment	(5.9)	(3.3)
NET CASH USED IN INVESTING ACTIVITIES	(5.9)	(3.3)
FINANCING ACTIVITIES
Taxes paid related to net share settlement of equity awards	(6.9)	0.0
Proceeds from exercise of stock options	0.0	4.5
Excess tax benefit from equity-based compensation	3.8	0.0
Cash dividends	(3.5)	(3.4)
Repayment of borrowings	(3.0)	(10.0)
NET CASH USED IN FINANCING ACTIVITIES	(9.6)	(8.9)
Effect of foreign currency exchange rate changes on cash	(3.7)	(1.7)
INCREASE IN CASH AND CASH EQUIVALENTS	(0.2)	19.3
Cash and cash equivalents at beginning of period	168.1	116.4
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$ 167.9	$ 135.7

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GOODWILL AND INTANGIBLE ASSETS - Schedule of Estimated Aggregate Amortization Expense of Intangible Assets (Details) $ in Millions	Aug. 01, 2015 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2016	$ 2.4
2017	2.3
2018	2.2
2019	2.1
2020	$ 0.2

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INCOME TAXES - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Aug. 01, 2015	Aug. 02, 2014	May. 02, 2015	May. 03, 2014
Valuation Allowance [Line Items]
Deferred tax benefit related to release of foreign valuation allowance			$ 7.2
Deferred tax benefit related to release of state valuation allowance			$ 1.4
Federal tax expense (benefit)	$ (0.7)
State tax expense (benefit)	(3.8)
Foreign tax credit carryforward	3.7
Income tax expense	$ 7.4	$ 7.0
Effective income tax rate	23.90%	24.60%
Unrecognized tax benefits, income tax penalties and interest accrued	$ 0.1
Total unrecognized tax benefit	0.9
Unrecognized tax benefit recorded	$ 0.1
Malta | Investment Tax Credit Carryforward
Valuation Allowance [Line Items]
Investment tax credit on qualified expenditures, percent	30.00%
Unused credits	$ 16.1
Domestic federal and state
Valuation Allowance [Line Items]
Valuation allowances against deferred tax assets	1.2			$ 1.2
Federal
Valuation Allowance [Line Items]
Operating loss carryforwards	2.1
State
Valuation Allowance [Line Items]
Operating loss carryforwards	$ 80.6

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BASIS OF PRESENTATION

3 Months Ended

Aug. 01, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION

BASIS OF PRESENTATION

Methode Electronics, Inc. was incorporated in 1946 as an Illinois corporation and reincorporated in Delaware in 1966.  As used herein, “we,” “us,” “our,” the “Company” or “Methode” means Methode Electronics, Inc. and its subsidiaries.  Our business is managed and our financial results are reported on a segment basis, with those segments being Automotive, Interface, Power Products and Other.  The condensed consolidated financial statements and related disclosures as of August 1, 2015 and results of operations for the three months ended August 1, 2015 and August 2, 2014 are unaudited, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).  The May 2, 2015 condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”).  Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations.  In our opinion, these financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for the fair statement of the results for the interim periods.  These financial statements should be read in conjunction with the financial statements included in our Form 10-K for the year ended May 2, 2015, filed with the SEC on June 25, 2015.  Results may vary from quarter to quarter for reasons other than seasonality.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Aug. 01, 2015	May. 02, 2015
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.5	$ 0.5
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	40,081,131	39,702,036
Treasury stock (in shares)	1,605,514	1,346,624

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GOODWILL AND INTANGIBLE ASSETS (Tables)

3 Months Ended

Aug. 01, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill Roll-forward

The following table shows the roll-forward of goodwill in the financial statements for the three months ended August 1, 2015:

	As of August 1, 2015
				Power
	Interface			Products		Total
Balance as of May 2, 2015	$	0.7		$	1.0	$	1.7
Foreign currency translation	(0.1		)	—		(0.1		)
Balance as of August 1, 2015	$	0.6		$	1.0	$	1.6

Schedule of Intangible Assets

The following tables present details of the Company’s intangible assets:

	As of August 1, 2015
							Wtd. Avg.
							Remaining
			Accumulated				Amortization
	Gross		Amortization		Net		Periods (Years)
Customer relationships and agreements	$	16.3	$	15.1	$	1.2	8.5
Trade names, patents and technology licenses	25.8		16.3		9.5		3.1
Covenants not to compete	0.1		0.1		—		2.2
Total	$	42.2	$	31.5	$	10.7

	As of May 2, 2015
							Wtd. Avg.
							Remaining
			Accumulated				Amortization
	Gross		Amortization		Net		Periods (Years)
Customer relationships and agreements	$	16.3	$	15.0	$	1.3	8.8
Trade names, patents and technology licenses	25.8		15.8		10.0		3.3
Covenants not to compete	0.1		0.1		—		2.4
Total	$	42.2	$	30.9	$	11.3

Schedule of Estimated Aggregate Amortization Expense of Intangible Assets

The estimated aggregate amortization expense for the current fiscal year and each of the four succeeding fiscal years is as follows:

2016	$2.4
2017	$2.3
2018	$2.2
2019	$2.1
2020	$0.2

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DOCUMENT AND ENTITY INFORMATION - shares	3 Months Ended
	Aug. 01, 2015	Sep. 01, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	METHODE ELECTRONICS INC
Entity Central Index Key	0000065270
Current Fiscal Year End Date	--04-30
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Aug. 01, 2015
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		38,475,617

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NET INCOME PER SHARE (Tables)

3 Months Ended

Aug. 01, 2015

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted Net Income Per Share

The following table sets forth the computation of basic and diluted net income per share:

	Three Months Ended
	August 1, 2015		August 2, 2014
Numerator - net income attributable to Methode Electronics, Inc.	$	23.5	$	21.4
Denominator:	—		—
Denominator for basic net income per share-weighted average shares outstanding and vested/unissued restricted stock awards	38,904,743		38,464,558
Dilutive potential common shares-employee and director stock options, restricted stock awards and restricted stock units	126,055		183,646
Denominator for diluted net income per share	39,030,798		38,648,204
Net income per share:
Basic	$	0.60	$	0.56
Diluted	$	0.60	$	0.55

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions	3 Months Ended
	Aug. 01, 2015	Aug. 02, 2014
Income Statement [Abstract]
Net sales	$ 203.3	$ 218.1
Cost of products sold	149.7	167.6
Gross profit	53.6	50.5
Selling and administrative expenses	23.2	22.2
Income from operations	30.4	28.3
Interest income, net	(0.2)	0.0
Other income, net	(0.3)	(0.1)
Income before income taxes	30.9	28.4
Income tax expense	7.4	7.0
Net income	23.5	21.4
Less: Net income attributable to noncontrolling interest	0.0	0.0
NET INCOME ATTRIBUTABLE TO METHODE ELECTRONICS, INC.	$ 23.5	$ 21.4
Amounts per common share attributable to Methode Electronics, Inc.:
Basic (in dollars per share)	$ 0.60	$ 0.56
Diluted (in dollars per share)	0.60	0.55
Cash dividends:
Common stock (in dollars per share)	$ 0.09	$ 0.09
Weighted average number of Common Shares outstanding:
Basic (in shares)	38,904,743	38,464,558
Diluted (in shares)	39,030,798	38,648,204

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SEGMENT INFORMATION

3 Months Ended

Aug. 01, 2015

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

We are a global manufacturer of component and subsystem devices.  We design, manufacture and market devices employing electrical, electronic, wireless, sensing and optical technologies.  Our components are found in the primary end markets of the automotive, appliance, communications (including information processing and storage, networking equipment, wireless and terrestrial voice/data systems), aerospace, rail and other transportation industries, and the consumer and industrial equipment markets.

ASC No. 280, “Segment Reporting”, establishes annual and interim reporting standards for an enterprise’s operating segments and related disclosures about its products, services, geographic areas and major customers. An operating segment is defined as a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses, and about which separate financial information is regularly evaluated by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources.  The CODM, as defined by ASC No. 280, is the Company’s President and Chief Executive Officer (“CEO”).

We have multiple operating segments that are aggregated in four reportable segments. Those segments are Automotive, Interface, Power Products and Other.

The Automotive segment supplies electronic and electromechanical devices and related products to automobile Original Equipment Manufacturers ("OEMs"), either directly or through their tiered suppliers. Our products include control switches for electrical power and signals, connectors for electrical devices, integrated control components, switches and sensors that monitor the operation or status of a component or system, and packaging of electrical components as well as design and manufacture of magnetic torque sensing products.

The Interface segment provides a variety of copper and fiber-optic interconnect and interface solutions for the aerospace, appliance, commercial, computer, construction, consumer, material handling, medical, military, mining, networking, storage, and telecommunications markets.  Solutions include conductive polymers, connectors, custom cable assemblies, industrial safety radio remote controls, optical and copper transceivers, personal computer and express card packaging and terminators, solid-state field effect interface panels, and thick film inks.  Services include the design and installation of fiber optic and copper infrastructure systems, and manufacturing active and passive optical components.

The Power Products segment manufactures braided flexible cables, current-carrying laminated bus devices, custom power-product assemblies, high-current low voltage flexible power cabling systems and powder coated bus bars that are used in various markets and applications, including aerospace, computers, industrial and power conversion, military, telecommunications, and transportation.

The Other segment includes medical devices, inverters and battery systems and insulated gate bipolar transistor solutions.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies in our Form 10-K for the fiscal year ended May 2, 2015.  We allocate resources to segments based on operating income. Transfers between segments are recorded using internal transfer prices set by us.

	Three Months Ended August 1, 2015
	Automotive			Interface			Power Products		Other			Eliminations/Corporate			Consolidated
Net sales	$	154.9		$	34.1		$	16.5	$	0.1		$	(2.3	)	$	203.3
Transfers between segments	(1.8		)	(0.4		)	—		(0.1		)	2.3			—
Net sales to unaffiliated customers	$	153.1		$	33.7		$	16.5	$	—		$	—		$	203.3
Income (loss) from operations	$	35.9		$	0.7		$	3.1	$	(2.3	)	$	(7.0	)	$	30.4
Interest income, net															(0.2		)
Other income, net															(0.3		)
Income before income taxes															$	30.9

	Three Months Ended August 2, 2014
	Automotive			Interface			Power Products			Other			Eliminations/Corporate			Consolidated
Net sales	$	156.8		$	44.6		$	16.3		$	1.6		$	(1.2	)	$	218.1
Transfers between segments	(0.5		)	(0.6		)	(0.1		)	—			1.2			—
Net sales to unaffiliated customers	$	156.3		$	44.0		$	16.2		$	1.6		$	—		$	218.1
Income/(loss) from operations	$	27.3		$	7.0		$	3.0		$	(1.9	)	$	(7.1	)	$	28.3
Other income, net																(0.1		)
Income before income taxes																$	28.4

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NET INCOME PER SHARE

3 Months Ended

Aug. 01, 2015

Earnings Per Share [Abstract]

NET INCOME PER SHARE

NET INCOME PER SHARE

Basic net income per share is calculated by dividing net income attributable to Methode shareholders by the weighted average number of common shares outstanding for the applicable period.  Diluted net income per share is calculated after adjusting the denominator of the basic net income per share calculation for the effect of all potentially dilutive stock compensation awards outstanding during the period.

The following table sets forth the computation of basic and diluted net income per share:

	Three Months Ended
	August 1, 2015		August 2, 2014
Numerator - net income attributable to Methode Electronics, Inc.	$	23.5	$	21.4
Denominator:	—		—
Denominator for basic net income per share-weighted average shares outstanding and vested/unissued restricted stock awards	38,904,743		38,464,558
Dilutive potential common shares-employee and director stock options, restricted stock awards and restricted stock units	126,055		183,646
Denominator for diluted net income per share	39,030,798		38,648,204
Net income per share:
Basic	$	0.60	$	0.56
Diluted	$	0.60	$	0.55

For the three months ended August 2, 2014, options to purchase 158,500 shares have been excluded in the computation of diluted net income per share because the exercise price was greater than the average market price for that period, and therefore, would have been anti-dilutive. Restricted stock awards for 700,000 shares have been excluded in the computation of diluted net income per share for the three months ended August 2, 2014 as these awards were contingent on the Company's full year performance in fiscal 2015.

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GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions	Aug. 01, 2015	May. 02, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Trade names not subject to amortization	$ 1.8	$ 1.8

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SEGMENT INFORMATION (Tables)

3 Months Ended

Aug. 01, 2015

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

	Three Months Ended August 1, 2015
	Automotive			Interface			Power Products		Other			Eliminations/Corporate			Consolidated
Net sales	$	154.9		$	34.1		$	16.5	$	0.1		$	(2.3	)	$	203.3
Transfers between segments	(1.8		)	(0.4		)	—		(0.1		)	2.3			—
Net sales to unaffiliated customers	$	153.1		$	33.7		$	16.5	$	—		$	—		$	203.3
Income (loss) from operations	$	35.9		$	0.7		$	3.1	$	(2.3	)	$	(7.0	)	$	30.4
Interest income, net															(0.2		)
Other income, net															(0.3		)
Income before income taxes															$	30.9

	Three Months Ended August 2, 2014
	Automotive			Interface			Power Products			Other			Eliminations/Corporate			Consolidated
Net sales	$	156.8		$	44.6		$	16.3		$	1.6		$	(1.2	)	$	218.1
Transfers between segments	(0.5		)	(0.6		)	(0.1		)	—			1.2			—
Net sales to unaffiliated customers	$	156.3		$	44.0		$	16.2		$	1.6		$	—		$	218.1
Income/(loss) from operations	$	27.3		$	7.0		$	3.0		$	(1.9	)	$	(7.1	)	$	28.3
Other income, net																(0.1		)
Income before income taxes																$	28.4

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DEBT AND CREDIT AGREEMENT

3 Months Ended

Aug. 01, 2015

Debt Disclosure [Abstract]

DEBT AND CREDIT AGREEMENT

DEBT AND CREDIT AGREEMENT

We are party to an Amended and Restated Credit Agreement with Bank of America, N.A., as administrative agent, and certain other financial institutions, which has a maturity of September 21, 2017. The credit facility is in the aggregate principal amount of $100.0 million, with an option to increase the principal amount by an additional $50.0 million, subject to customary conditions and approval of the lender(s) providing new commitment(s). The credit facility provides for variable rates of interest based on the type of borrowing and the Company's debt to EBITDA financial ratio. The Amended and Restated Credit Agreement is guaranteed by certain of our U.S. subsidiaries. At August 1, 2015, the interest rate on the credit facility was 1.5% plus LIBOR and we were in compliance with the covenants of the agreement. During the first three months of fiscal 2016, we had no borrowings and payments of $3.1 million, which includes interest of $0.1 million, under this credit facility. As of August 1, 2015, there were outstanding balances against the credit facility of $2.0 million.  There was $98.0 million available to borrow under the credit facility as of August 1, 2015, which does not include the option to increase the principal amount. We believe the fair value approximates the carrying amount as of August 1, 2015.

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CONTINGENCIES

3 Months Ended

Aug. 01, 2015

Commitments and Contingencies Disclosure [Abstract]

CONTINGENCIES

CONTINGENCIES

Certain litigation arising in the normal course of business is pending against us.  We are from time to time subject to various legal actions and claims incidental to our business, including those arising out of alleged defects, breach of contracts, employment-related matters and environmental matters.  We consider insurance coverage and third-party indemnification when determining required accruals for pending litigation and claims.  Although the outcome of potential legal actions and claims cannot be determined, it is our opinion, based on the information available, that we have adequate reserves for these liabilities.

Hetronic Germany-GmbH Matters    

For several years, Hetronic Germany-GmbH and Hydronic-Steuersysteme-GmbH (the “Fuchs companies”) served as our distributors for Germany, Austria and other central and eastern European countries pursuant to their respective intellectual property licenses and distribution and assembly agreements. We became aware that the Fuchs companies and their managing director, Albert Fuchs, had materially violated those agreements. As a result, weterminated all of our agreements with the Fuchs companies. On June 20, 2014, we filed a lawsuit against the Fuchs companies in the Federal District Court for the Western District of Oklahoma alleging material breaches of the distribution and assembly agreements seeking damages, as well as various forms of injunctive relief. The defendants have filed counterclaims alleging breach of contract, interference with business relations and business slander. On April 2, 2015, we amended our complaint against the Fuchs companies to add additional unfair competition and Lanham Act claims and to add additional, affiliated parties. The defendants filed motions to dismiss that are fully briefed and are awaiting ruling by the Court. Discovery has commenced in the case and is ongoing.

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PRE-PRODUCTION COSTS RELATED TO LONG-TERM SUPPLY ARRANGEMENTS

3 Months Ended

Aug. 01, 2015

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

PRE-PRODUCTION COSTS RELATED TO LONG-TERM SUPPLY ARRANGEMENTS

PRE-PRODUCTION COSTS RELATED TO LONG-TERM SUPPLY ARRANGEMENTS

We incur pre-production tooling costs related to certain products produced for our customers under long-term supply agreements.  We had $10.8 million and $10.5 million as of August 1, 2015 and May 2, 2015, respectively, of pre-production tooling costs related to customer-owned tools for which reimbursement is contractually guaranteed by the customer or for which the customer has provided a non-cancelable right to use the tooling.  Engineering, testing and other costs incurred in the design and development of production parts are expensed as incurred, unless the costs are reimbursable, as specified in a customer contract.

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BASIS OF PRESENTATION (Policies)

3 Months Ended

Aug. 01, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Goodwill and Intangible Assets

We review our goodwill and other intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable, and at least annually in accordance with Accounting Standards Codification ("ASC") No. 350, “Intangibles — Goodwill and Other”.  The values assigned to goodwill and intangible assets are normally based on estimates and judgments regarding expectations for the success and life cycle of products and technologies acquired.  A severe decline in expectations could result in significant impairment charges, which could have a material adverse effect on our financial condition and results of operations.

Net Income Per Share

Basic net income per share is calculated by dividing net income attributable to Methode shareholders by the weighted average number of common shares outstanding for the applicable period.  Diluted net income per share is calculated after adjusting the denominator of the basic net income per share calculation for the effect of all potentially dilutive stock compensation awards outstanding during the period.

Segment Information

The accounting policies of the segments are the same as those described in the summary of significant accounting policies in our Form 10-K for the fiscal year ended May 2, 2015.  We allocate resources to segments based on operating income. Transfers between segments are recorded using internal transfer prices set by us.

Contingencies

Certain litigation arising in the normal course of business is pending against us.  We are from time to time subject to various legal actions and claims incidental to our business, including those arising out of alleged defects, breach of contracts, employment-related matters and environmental matters.  We consider insurance coverage and third-party indemnification when determining required accruals for pending litigation and claims.

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GOODWILL AND INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Aug. 01, 2015	May. 02, 2015
Finite-lived Intangible Assets [Roll Forward]
Gross	$ 42.2	$ 42.2
Accumulated Amortization	31.5	30.9
Net	10.7	11.3
Customer relationships and agreements
Finite-lived Intangible Assets [Roll Forward]
Gross	16.3	16.3
Accumulated Amortization	15.1	15.0
Net	$ 1.2	$ 1.3
Wtd. Avg. Remaining Amortization Periods (Years)	8 years 6 months 18 days	8 years 9 months 18 days
Trade names, patents and technology licenses
Finite-lived Intangible Assets [Roll Forward]
Gross	$ 25.8	$ 25.8
Accumulated Amortization	16.3	15.8
Net	$ 9.5	$ 10.0
Wtd. Avg. Remaining Amortization Periods (Years)	3 years 1 month 9 days	3 years 4 months 6 days
Covenants not to compete
Finite-lived Intangible Assets [Roll Forward]
Gross	$ 0.1	$ 0.1
Accumulated Amortization	0.1	0.1
Net	$ 0.0	$ 0.0
Wtd. Avg. Remaining Amortization Periods (Years)	2 years 2 months	2 years 5 months

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NET INCOME PER SHARE - Narrative (Details)	3 Months Ended
	Aug. 02, 2014 shares
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of EPS (in shares)	158,500
Restricted Stock Awards (RSA's)
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of EPS (in shares)	700,000

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) - USD ($) $ in Millions	3 Months Ended
	Aug. 01, 2015	Aug. 02, 2014
Statement of Comprehensive Income [Abstract]
Net income	$ 23.5	$ 21.4
Foreign currency translation adjustment	(6.1)	(5.3)
Comprehensive income	17.4	16.1
Less: Comprehensive income attributable to non-controlling interest	0.0	0.0
Comprehensive income attributable to Methode Electronics, Inc.	$ 17.4	$ 16.1

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INCOME TAXES

3 Months Ended

Aug. 01, 2015

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

At May 2, 2015, we recorded a deferred tax benefit of $7.2 million related to the release of a foreign valuation allowance and a $1.4 million deferred tax benefit related to the release of our state valuation allowance. The Company evaluated all available positive and negative evidence, including past operating results and projection of future taxable income and determined it is more likely than not that expected future taxable income will be sufficient to utilize substantially all of our foreign, federal and US state net deferred tax assets. The Company maintained a valuation allowance of $1.2 million at August 1, 2015 and May 2, 2015 related to certain state and federal net operating loss carryovers and expects to continue to maintain this allowance until we determine that these deferred tax assets are more likely than not realizable.

At August 1, 2015, we had available $2.1 million of federal and $80.6 million of state net operating loss carry forwards (having a tax benefit of $0.7 million and $3.8 million, respectively) and $3.7 million of foreign tax credit carry forwards. If unused, the U.S. federal net operating loss carry forwards will expire in the fiscal years 2018 through 2031. The state net operating loss carry forwards will expire in the fiscal years 2016 through 2035. The foreign tax credits will expire in the fiscal years 2023 through 2024.

The tax laws of Malta provide for investment tax credits of 30% of certain qualified expenditures. Unused credits of $16.1 million as of August 1, 2015 can be carried forward indefinitely. We record investment tax credits using the "flow through" method.

The Company recognized an income tax provision of $7.4 million and $7.0 million for the three months ended August 1, 2015 and August 2, 2014, respectively. The Company's effective tax rate was 23.9% and 24.6% for the three months ended August 1, 2015 and August 2, 2014, respectively. The income tax provision for the three months ended August 1, 2015 and August 2, 2014 is lower than the U.S. statutory rate primarily due to foreign investment tax credits and foreign operations with lower statutory rates.

We recognize interest and penalties accrued related to the unrecognized tax benefits in the provision for income taxes.  We had approximately $0.1 million accrued at August 1, 2015 for the payment of interest and penalties.  The total unrecognized tax benefit as of August 1, 2015 was $0.9 million. We recorded an unrecognized tax benefit of $0.1 million in the first quarter of fiscal 2016. There have been no material changes to the accrued amounts in the current fiscal year.

The Company and all of its domestic subsidiaries file income tax returns in the U.S. federal jurisdiction and various states.  Our foreign subsidiaries file income tax returns in certain foreign jurisdictions since they have operations outside the U.S.  The Company and its subsidiaries are generally no longer subject to U.S. federal, state and local examinations by tax authorities for all years except fiscal 2014, 2013, 2012 and 2011.

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SEGMENT INFORMATION - Narrative (Details)	3 Months Ended
	Aug. 01, 2015 segment
Segment Reporting [Abstract]
Number of reportable segments	4

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GOODWILL AND INTANGIBLE ASSETS - Schedule of Goodwill Roll-forward (Details) $ in Millions	3 Months Ended
	Aug. 01, 2015 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 1.7
Foreign currency translation	(0.1)
Ending balance	1.6
Interconnect
Goodwill [Roll Forward]
Beginning balance	0.7
Foreign currency translation	(0.1)
Ending balance	0.6
Power Products
Goodwill [Roll Forward]
Beginning balance	1.0
Foreign currency translation	0.0
Ending balance	$ 1.0