Methode Electronics (MEI) Oppenheimer 21st Annual Industrial Growth Virtual Conference summary

Business transformation and operational strategy

• Underwent significant transformation, shifting from regional to global operations and changing 70% of top leadership, with over 50% turnover in the top 100 roles.

• Focused on harmonizing operating practices, driving operational excellence, and aligning leadership globally to present a unified company to customers.

• Completed the sale of the dataMate business and Harwood Heights facility, reducing footprint and aligning the portfolio with mega trends.

• Emphasized leveraging core competencies in power and lighting, targeting growth in data centers, vehicle electrification, and industrial applications.

• Prioritized continuous improvement, team upgrades, and disciplined capital allocation to drive shareholder returns.

Financial performance and guidance

• Q3 FY 2026 net sales were $234 million, down from $240 million YoY, mainly due to lower automotive and interface segment volumes.

• Gross profit for Q3 FY 2026 was $39 million, down from $41 million YoY; adjusted EBITDA was $7 million, up from $5 million in the prior year.

• Q3 FY 2026 adjusted net loss was $13 million, with a year-to-date adjusted net loss of $28 million; adjusted loss per diluted share increased to $0.78.

• Ended Q3 FY 2026 with $134 million in cash and $17 million lower net debt YoY; free cash flow was $16.5 million year-to-date.

• FY 2026 guidance: net sales of $950 million–$1 billion, adjusted EBITDA of $58–$62 million, and positive free cash flow.

Segment and portfolio updates

• Industrial segment showed momentum, especially in data center power solutions, with a 25% CAGR targeted by leveraging core competencies.

• Data center business focused on busbars for hyperscalers, moving toward preferred supplier status and vendor-managed inventory.

• Automotive segment pressured by North American EV program delays and cancellations; exposure to EVs now relatively small and new business focused on hybrids and ICE.

• Portfolio rationalization continues, with further actions possible where global leverage or engineering competencies are lacking.

• Mexico facility turnaround is ongoing, about six months behind Egypt, with significant improvement included in FY 2026 EBITDA guidance.