0000950131-95-002554.txt : 19950915 0000950131-95-002554.hdr.sgml : 19950915 ACCESSION NUMBER: 0000950131-95-002554 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950731 FILED AS OF DATE: 19950913 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: METHODE ELECTRONICS INC CENTRAL INDEX KEY: 0000065270 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC CONNECTORS [3678] IRS NUMBER: 362090085 STATE OF INCORPORATION: DE FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-02816 FILM NUMBER: 95573446 BUSINESS ADDRESS: STREET 1: 7444 W WILSON AVE CITY: HARWOOD HEIGHTS STATE: IL ZIP: 60656 BUSINESS PHONE: 7088679600 MAIL ADDRESS: STREET 1: 7444 WEST WILSON AVENUE CITY: CHICAGO STATE: IL ZIP: 60656 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 __________________________________ FORM 1 0 - Q (Mark One) [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 for the quarterly period ended July 31, 1995 or [_] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. __________________________________ Commission file number 0-2816. METHODE ELECTRONICS, INC. ------------------------------------------------------------------------------- (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.) 7444 West Wilson Avenue, Harwood Heights, Illinois 60656 ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (Registrant's telephone number, including area code) (708) 867-9600 -------------------------- None ------------------------------------------------------------------------------- (Former name, former address, former fiscal year, if changed since last report) At September 8, 1995, Registrant had 22,170,059 shares of Class A Common Stock and 1,268,766 shares of Class B Common Stock outstanding. Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such report(s)), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ----- ----- Page 1 of 9 INDEX METHODE ELECTRONICS, INC. AND SUBSIDIARIES PART I. FINANCIAL INFORMATION ------------------------------ Item 1. Financial Statements (unaudited) Condensed consolidated balance sheets---July 31, 1995 and April 30, 1995. Condensed consolidated statements of income---Three months ended July 31, 1995 and 1994. Condensed statements of cash flows---Three months ended July 31, 1995 and 1994. Note to condensed consolidated financial statements---July 31, 1995. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations PART II. OTHER INFORMATION -------------------------- Item 6. Exhibits and reports on Form 8-K SIGNATURES ---------- Page 2 PART I. FINANCIAL INFORMATION ------------------------------ ITEM 1. FINANCIAL STATEMENTS CONDENSED CONSOLIDATED BALANCE SHEETS METHODE ELECTRONICS, INC. AND SUBSIDIARIES
July 31, April 30, 1995 1995 (Unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 44,517,922 $ 40,763,656 Accounts receivable, less allowance of $1,295,000 36,517,495 39,467,500 Inventories: Finished products 5,279,307 5,213,948 Work in process 15,005,545 16,863,248 Materials 10,129,495 10,845,224 ------------ ------------ 30,414,347 32,922,420 Current deferred income taxes 3,601,000 3,601,000 Prepaid expenses 1,608,905 2,939,338 ----------- ------------ TOTAL CURRENT ASSETS 116,659,669 119,693,914 PROPERTY, PLANT AND EQUIPMENT 137,053,459 132,740,901 Less allowance for depreciation 79,569,399 76,574,297 ------------ ------------ 57,484,060 56,166,604 INTANGIBLE BENEFIT PLAN ASSET 4,102,592 4,269,525 OTHER ASSETS 10,946,039 11,365,852 ------------ ------------ $189,192,360 $191,495,895 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts and notes payable $ 15,115,961 $ 25,064,915 Other current liabilities 20,404,875 18,607,699 ------------ ------------ TOTAL CURRENT LIABILITIES 35,520,836 43,672,614 OTHER LIABILITIES 2,586,815 2,616,815 DEFERRED COMPENSATION 6,613,880 6,654,879 ACCUMULATED BENEFIT PLAN OBLIGATION 3,696,986 3,629,330 SHAREHOLDERS' EQUITY Common Stock 11,714,062 11,665,489 Paid in capital 18,733,561 17,106,383 Retained earnings 109,626,460 104,322,709 Other shareholders' equity 699,760 1,827,676 ------------ ------------ 140,773,843 134,922,257 ------------ ------------ $189,192,360 $191,495,895 ============ ============
See note to condensed consolidated financial statements. Page 3 CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) METHODE ELECTRONICS, INC. AND SUBSIDIARIES
Three Months Ended July 31, ------------------------ 1995 1994 ----------- ----------- INCOME: Net Sales $68,215,814 $57,763,484 Other 1,165,843 806,642 ----------- ----------- Total 69,381,657 58,570,126 COSTS AND EXPENSES: Cost of products sold 49,590,774 40,981,003 Selling and administrative expenses 9,234,437 8,185,178 ----------- ----------- Total 58,825,211 49,166,181 ----------- ----------- Income before income taxes 10,556,446 9,403,945 Provision for income taxes 3,853,000 3,575,000 ----------- ----------- NET INCOME $ 6,703,446 $ 5,828,945 =========== =========== Weighted average number of Common Shares outstanding 23,186,000 23,073,000 Earnings per Common Share $.29 $.25 ==== ==== Cash dividends per Common Share Class A $.06 $.030 Class B $.06 $.025
See note to condensed consolidated financial statements. Page 4 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) METHODE ELECTRONICS, INC. AND SUBSIDIARIES
Three Months Ended July 31 -------------------------- 1995 1994 ----------- ----------- OPERATING ACTIVITIES Net Income $ 6,703,446 $ 5,828,945 Provision for depreciation and amortization 3,051,381 2,466,626 Changes in operating assets and liabilities 3,201,370 (5,474,835) Other 280,373 400,199 ----------- ----------- NET CASH PROVIDED BY OPERATING ACTIVITIES 13,236,570 3,220,935 INVESTING ACTIVITIES Purchases of property, plant and equipment (4,368,837) (4,194,027) Other 646,278 809,028 ----------- ----------- NET CASH USED IN INVESTING ACTIVITIES (3,722,559) (3,384,999) FINANCING ACTIVITIES Dividends (1,399,695) (690,355) Other (4,360,050) 490,778 ----------- ----------- NET CASH USED IN FINANCING ACTIVITIES (5,759,745) (199,577) ----------- ----------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3,754,266 (363,641) Cash and cash equivalents at beginning of period 40,763,656 26,785,962 ----------- ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $44,517,922 $26,422,321 =========== ===========
See note to condensed consolidated financial statements. Page 5 METHODE ELECTRONICS, INC. AND SUBSIDIARIES NOTE TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) July 31, 1995 NOTE -- BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended July 31, 1995 are not necessarily indicative of the results that may be expected for the year ending April 30, 1996. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended April 30, 1995. Page 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS Results of Operations --------------------- Net sales for the first quarter of fiscal 1996 increased 18% to $68,216,000, compared with $57,763,000 for the first quarter last year. The connector operations had significant sales gains over the prior year first quarter led by a strong performance by our worldwide fiber optic sales and boosted by the inclusion of the former ETOS Fujikara International operation purchased by Methode in the second quarter of fiscal 1995. Sales of automotive controls, which represent approximately half of Methode's business, posted only a modest increase during the current quarter compared to the prior year first quarter. Sales of Network Buss products improved significantly aided by an improved mainframe computer marketplace and the successful acquisition of the Rogers Corporation buss bar business which Methode purchased in late fiscal 1994. Sales by our circuit operations were down compared with last year's first quarter. Other income consisted primarily of interest income on short-term investments, earnings from an automotive joint venture, and royalties. Cost of products sold as a percentage of sales for the quarter increased to 72.7% compared with the year-ago period of 70.9%. Gross margins on connectors and controls, which represent approximately 85% of our business, narrowed during the quarter due to price pressure and lower margins on the cable assembly business acquired in 1995. Margins on our Network Buss products improved due to the volume gains discussed above. Selling and administrative expenses as a percentage of sales were 13.5% in the first quarter of fiscal 1996, down from 14.2% for the year-ago period. Sales volume gains were primarily responsible for this improvement. The effective income tax rates were 36.5% and 38% for the quarters ended July 31, 1995 and 1994, respectively. The effective income tax rates exceed the statutory federal rate of 35% because of the effect of state income taxes partially offset by lower statutory rates on foreign operations. Financial Conditions, Liquidity and Capital Resources ----------------------------------------------------- Net cash provided by operating activities was $13,237,000 in the first quarter of fiscal 1996, up from the $3,221,000 provided during the year-ago period. The increase was primarily the result of decreased working capital requirements which rose sharply in the first quarter of 1995 to support volume gains and increased net income. Capital expenditures and depreciation expense were $4,369,000 and $3,051,000 in fiscal 1996 and $4,194,000 and $2,467,000 in fiscal 1995. It is presently expected that fixed asset additions for fiscal 1996 will approximate $20,000,000 and will be financed with internally generated funds. Page 7 PART II. OTHER INFORMATION --------------------------- Item 6. Exhibits and Reports on Form 8-K -------------------------------- a) Exhibits -------- INDEX TO EXHIBITS Sequential Exhibit Page Number Description Number ------ ----------- ------ 3.1 Certificate of Incorporation of Registrant, as amended and currently in effect(1) 3.2 By-Laws of Registrant, as amended and currently in effect(1) 4.1 Article Fourth of Certificate of Incorporation of Registrant, as amended and currently in effect (Included in Exhibit 3.1) 10.1 Methode Electronics, Inc. Employee Stock Ownership Plan dated February 24, 1977(3)* 10.2 Methode Electronics, Inc. Employee Stock Ownership Plan and Trust Amendment No. 1(3)* 10.3 Methode Electronics, Inc. Employee Stock Ownership Trust(3)* 10.4 Methode Electronics, Inc. Employee Stock Ownership Trust- Amendment No. 1(3)* 10.5 Letter Agreement dated December 27, 1978, between the Registrant and Kevin Hayes regarding management bonus(2)* 10.6 Letter Agreement dated December 27, 1978, between the Registrant and William T. Jensen regarding management bonus(2)* 10.7 Letter Agreement dated December 27, 1978, between the Registrant and William J. McGinley regarding management bonus(2)* 10.8 Lease Agreement between the City of Carthage, Illinois and Carthage Precision Electric Co.(4) dated as of June 1, 1975(2) 10.9 Supplemental Lease Agreement between the City of Carthage, Illinois and Carthage Precision Electric Co.(4) dated as of June 1, 1977(2) 10.10 Supplemental Lease Agreement between the City of Carthage, Illinois and Carthage Precision Electric Co.(4) dated as of April 1, 1983(5) 10.11 Methode Electronics, Inc. Incentive Stock Award Plan(5)* 10.12 Methode Electronics, Inc. Supplemental Executive Benefit Plan(6)* 10.13 Methode Electronics, Inc. Managerial Bonus and Matching Bonus Plan (also referred to as the Longevity Contingent Bonus Program)(6)* 10.14 Methode Electronics, Inc. Capital Accumulation Plan(6)* 10.15 Incentive Stock Award Plan for Non-Employee Directors(7)* 10.16 Methode Electronics, Inc. 401(k) Savings Plan(7)* 10.17 Methode Electronics, Inc. 401(k) Savings Trust(7)* 10.18 Methode Electronics, Inc. Electronic Controls Division Cash and Class A Common Stock Bonus Plan(8)* 27 Financial Data Schedules 10 __________ (1) Previously filed with Registrant's Form S-3 Registration Statement No.33- 61940 filed April 30, 1993 and incorporated herein by reference. (2) Previously filed with Registrant's Registration Statement No.2-80666 filed December 1, 1982 and incorporated herein by reference. Page 8 (3) Previously filed with Registrant's S-8 Registration Statement No.2-60613 and incorporated herein by reference. (4) Carthage Precision Electric Co., a former subsidiary of the Registrant, was merged into the Registrant on July 30, 1984. (5) Previously filed with Registrant's Registration Statement No.2-92902 filed August 23, 1984 and incorporated herein by reference. (6) Previously filed with Registrant's Form 10-Q for three months ended January 31, 1994 and incorporated herein by reference. (7) Previously filed with Registrant's Form 10-K for the year ended April 30, 1994 and incorporated herein by reference. (8) Previously filed with Registrant's S-8 Registration Statement No.33-88036 and incorporated herein by reference. *Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Report on Form 10-Q pursuant to Item 6 of Form 10-Q. b) Reports on Form 8-K ------------------- The Company did not file a report on Form 8-K during the three months ended July 31, 1995. 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: _____________________________________ Kevin Hayes, Vice President (Principal Financial and Accounting Officer) Dated: September 12, 1995 --------------------- Page 9
EX-27 2 FINANCIAL DATA SCHEDULE
5 1 3-MOS APR-30-1996 JUL-31-1995 44,517,922 0 37,812,495 1,295,000 30,414,347 116,659,669 137,053,459 79,569,399 189,192,360 35,520,836 0 11,714,062 0 0 129,059,781 189,192,360 68,215,814 69,381,657 49,590,774 49,590,774 0 0 48,421 10,556,446 3,853,000 6,703,446 0 0 0 6,703,446 .29 .29