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Net Sales: $246.9 million, a decrease of 16% year-over-year, but a 3% sequential increase.

Adjusted Net Loss: $6.7 million, an $11.9 million change from fiscal 2025, with a $1.1 million sequential reduction.

Adjusted EBITDA: $17.6 million, down $9.1 million year-over-year, but a $1.9 million sequential increase.

Adjusted Diluted Loss Per Share: $0.19, a $0.33 decrease from the prior year second quarter, with a $0.03 improvement from Q1 fiscal 2026.

Net Debt: Reduced by $29.6 million year-over-year.

Cash Position: $118.5 million, up $21.5 million year-over-year.

Operating Cash Usage: $7.4 million in the second quarter, with $17.7 million generated in the first half of fiscal 2025.

Free Cash Flow: Usage of $11.6 million, a $46.8 million improvement year-over-year.

Fiscal 2026 Sales Guidance: Reaffirmed at $900 million to $1 billion.

Fiscal 2026 Adjusted EBITDA Guidance: Reaffirmed at $70 million to $80 million.

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Release Date: December 04, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Methode Electronics Inc (NYSE:MEI) reported a sequential increase in net sales by 3% to $247 million and a 12% rise in adjusted EBITDA to $18 million.

The company improved quarterly free cash flow by $47 million year-over-year, aligning with management estimates.

Significant operational improvements were noted in the Egypt and Mexico facilities, leading to quality, delivery, and cost enhancements.

Methode Electronics Inc (NYSE:MEI) is strategically relocating its corporate headquarters to Southfield, Michigan, to enhance growth and operational efficiency.

The company is optimistic about long-term growth in the data center sector, with sales doubling from $40 million in fiscal 2024 to over $80 million last year.

Year-over-year net sales decreased by 16% due to lower volume across all segments.

The company reported a second-quarter adjusted net loss of $6.7 million, a significant change from the previous fiscal year.

Second-quarter adjusted EBITDA decreased by $9.1 million compared to the same period last year.

The company experienced a $10 million inventory build to support the transition to vendor-managed inventory, impacting operating cash flow.

Methode Electronics Inc (NYSE:MEI) faces ongoing challenges with delayed or canceled EV program launches, particularly in North America.

Q: Can you provide insights into the current trends in the Power business, particularly regarding EV and data center growth? A: Jonathan DeGaynor, President and CEO, explained that the EV headwinds have already been accounted for due to delays and cancellations in North America. The data center business is performing as expected, with potential for growth through vendor-managed inventory, although guidance will not be adjusted until more certainty is achieved.

Q: How should we interpret the guidance for the second half of the fiscal year, considering the seasonality and expected improvements? A: DeGaynor noted that improvements in facilities, particularly in Egypt and Mexico, will drive better conversion on sales. CFO Laura Kowalchik added that gross margins in Egypt have nearly doubled due to cost reductions, while Mexico is also seeing cost improvements despite volume reductions.

Q: Are you comfortable with the current guidance range given the volatility in the market? A: DeGaynor stated that due to ongoing market volatility, including commercial vehicle sales and economic turbulence, the company has not narrowed its guidance range. The predictability of the business has improved, but external factors still pose challenges.

Q: What drove the sequential improvement in industrial operating profit? A: DeGaynor attributed the improvement to better plant performance, which benefits both industrial and automotive segments. The enhancements in plant operations, particularly in Mexico and Egypt, have contributed to this positive trend.

Q: Can you provide details on the program launches and their impact on future profitability? A: DeGaynor mentioned that most new program launches are power-based, focusing on EV and hybrid applications. The company has taken significant steps to improve plant operations and is now positioned to drive revenue growth, particularly as commercial vehicle volumes are expected to recover.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.