METHODE ELECTRONICS INC
For the period ended Feb 1, 2025. Filed Mar 5, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Feb 1, 2025 · Filed Mar 5, 2025
MEI$10.76+5.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-11-02; filed 2024-12-05.
0000950170-24-133526
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-02-01; filed 2025-03-05.
0000950170-25-033708
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 131 previous paragraphs and 133 current paragraphs.
81 unchanged; 33 reworded; 19 added; 16 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
Current report
Trade Policy/Tariffs
Current report
We are exposed to market risk with respect to duties currently assessed on raw materials, component parts and finished goods we import into the U.S. Since February 1, 2025 and up to March 4, 2025, the United States has announced and implemented various tariffs, including 25% tariffs on all products from Canada and Mexico, modifying the steel and aluminum tariffs that were imposed in 2018, and charging reciprocal tariffs against countries that tax or limit markets for U.S. goods.
Current report
The current situation is dynamic and we are continuing to assess the full implications of the newly announced tariffs. Given our sizable manufacturing operations in Mexico, China, Europe and Canada, should these enacted tariffs continue, raw materials and finished goods that we import will face higher prices, which could lead to reduced margins or increased prices that could cause decreased customer demand. We continue to monitor similar actions by other countries with which we do business. It is possible other countries may impose retaliatory tariffs on goods imported into their countries from the U.S. We will seek price increases from our customers to offset these incremental costs. If we are unable to obtain price increases, the impact of new or higher tariffs could have a material impact on our results of operations.
Current report
Net sales decreased $46.2 million, or 5.5%, to $791.0 million in the nine months ended February 1, 2025, compared to $837.2 million in the nine months ended January 27, 2024. Foreign currency translation decreased net sales by $0.7 million. Excluding foreign currency translation, net sales decreased $45.5 million. The decrease was primarily due to lower sales volumes in the Automotive segment, partially offset by higher sales volumes in the Industrial segment.
Current report
Cost of products sold decreased $23.9 million, or 10.7%, to $198.6 million (82.8% of net sales) in the three months ended February 1, 2025, compared to $222.5 million (85.7% of net sales) in the three months ended January 27, 2024. Foreign currency translation decreased cost of products sold by $2.3 million. Excluding foreign currency translation, cost of products sold decreased $21.6 million. The decrease was primarily due to lower material and freight costs as a result of lower sales volumes.
Current report
Selling and administrative expenses increased $3.8 million, or 11.2%, to $37.7 million (15.7% of net sales) in the three months ended February 1, 2025, compared to $33.9 million (13.1% of net sales) in the three months ended January 27, 2024. Excluding foreign currency translation, selling and administrative expenses increased $4.1 million. The increase was due to higher stock-based compensation expense and professional fees. Stock-based compensation expense was higher as the three months ended January 27, 2024 included a $3.6 million expense reversal due to forfeitures in that period. Professional fees in the three months ended February 1, 2025 include $0.9 million for consulting services provided by AlixPartners.
Current report
Other expense, net
Current report
Automotive segment net sales decreased $24.0 million, or 17.2%, to $115.7 million in the three months ended February 1, 2025, compared to $139.7 million in the three months ended January 27, 2024. Excluding foreign currency translation, net sales decreased $22.3 million.
Current report
Automotive segment net sales decreased $56.3 million, or 12.4%, to $396.0 million in the nine months ended February 1, 2025, compared to $452.3 million in the nine months ended January 27, 2024. Excluding foreign currency translation, net sales decreased $55.8 million.
Current report
Automotive segment gross profit decreased $5.6 million, or 17.8%, to $25.8 million in the nine months ended February 1, 2025, compared to $31.4 million in the nine months ended January 27, 2024. Gross profit margins decreased to 6.5% in the nine months ended February 1, 2025, compared to 6.9% in the nine months ended January 27, 2024. The decrease in gross profit was due to lower sales volumes in Asia and higher salary and warranty expense, partially offset by lower freight costs.
Current report
Loss from operations
Current report
Industrial segment net sales increased $4.8 million, or 4.5%, to $111.9 million in the three months ended February 1, 2025, compared to $107.1 million in the three months ended January 27, 2024. Excluding foreign currency translation, net sales increased $6.4 million.
Current report
Industrial segment net sales increased $11.9 million, or 3.5%, to $354.8 million in the nine months ended February 1, 2025, compared to $342.9 million in the nine months ended January 27, 2024. Excluding foreign currency translation, net sales increased $12.1 million.
Current report
Industrial segment gross profit increased $4.9 million, or 16.2%, to $35.2 million in the three months ended February 1, 2025, compared to $30.3 million in the three months ended January 27, 2024. Excluding foreign currency translation, gross profit increased $5.5 million. Gross profit margins increased to 31.5% in the three months ended February 1, 2025, compared to 28.3% in the three months ended January 27, 2024. Gross profit improved due to higher sales volumes and lower operating expenses.
Current report
Industrial segment gross profit increased $2.2 million, or 2.1%, to $106.0 million in the nine months ended February 1, 2025, compared to $103.8 million in the nine months ended January 27, 2024. Excluding foreign currency translation, gross profit increased $2.5 million. Gross profit improved due to higher sales volumes and lower operating expenses. Gross profit margins decreased to 29.9% in the nine months ended February 1, 2025, compared to 30.3% in the nine months ended January 27, 2024 due to product mix.
Current report
Interface segment gross profit increased $0.7 million, or 31.8%, to $2.9 million in the three months ended February 1, 2025, compared to $2.2 million in the three months ended January 27, 2024. Gross profit margins increased to 23.6% in the three months ended February 1, 2025, compared to 17.3% in the three months ended January 27, 2024. The improvement was due to product mix.
Current report
Interface segment gross profit increased $3.0 million, or 39.0%, to $10.7 million in the nine months ended February 1, 2025, compared to $7.7 million in the nine months ended January 27, 2024. Gross profit margins increased to 26.6% in the nine months ended February 1, 2025, compared to 19.4% in the nine months ended January 27, 2024. The improvement was primarily due to higher sales volumes and product mix.
Current report
Interface segment income from operations increased $0.7 million, or 46.7%, to $2.2 million in the three months ended February 1, 2025, compared to $1.5 million in the three months ended January 27, 2024.
Current report
Interface segment income from operations increased $3.4 million, or 63.0%, to $8.8 million in the nine months ended February 1, 2025, compared to $5.4 million in the nine months ended January 27, 2024.
Removed paragraphs (16)
Previous report
Net sales increased $4.6 million, or 1.6%, to $292.6 million in the three months ended November 2, 2024, compared to $288.0 million in the three months ended October 28, 2023. Foreign currency translation increased net sales by $4.3 million. Excluding foreign currency translation, net sales increased $0.3 million. The increase was primarily due to higher sales volumes in the Industrial segment, partially offset by lower sales volumes in the Automotive segment.
Previous report
Cost of products sold decreased $1.0 million, or 0.4%, to $234.7 million (80.2% of net sales) in the three months ended November 2, 2024, compared to $235.7 million (81.8% of net sales) in the three months ended October 28, 2023. Foreign currency translation increased cost of products sold by $3.3 million. Excluding foreign currency translation, cost of products sold decreased $4.3 million. The decrease was primarily due to lower freight and warranty costs, partially offset by higher salary expense.
Previous report
Other expense (income), net
Previous report
Automotive segment net sales decreased $8.8 million, or 5.7%, to $145.5 million in the three months ended November 2, 2024, compared to $154.3 million in the three months ended October 28, 2023. Excluding foreign currency translation, net sales decreased $10.9 million.
Previous report
Automotive segment net sales decreased $32.3 million, or 10.3%, to $280.3 million in the six months ended November 2, 2024, compared to $312.6 million in the six months ended October 28, 2023. Excluding foreign currency translation, net sales decreased $33.6 million.
Previous report
Automotive segment gross profit increased $2.6 million, or 22.4%, to $14.2 million in the three months ended November 2, 2024, compared to $11.6 million in the three months ended October 28, 2023. Excluding foreign currency translation, gross profit increased $2.3 million. Gross profit margins increased to 9.8% in the three months ended November 2, 2024, compared to 7.5% in the three months ended October 28, 2023. The increase in gross profit was primarily due to higher sales volumes in EMEA and lower freight and warranty costs.
Previous report
Income (loss) from operations
Previous report
Industrial segment net sales increased $11.0 million, or 9.1%, to $131.4 million in the three months ended November 2, 2024, compared to $120.4 million in the three months ended October 28, 2023. Excluding foreign currency translation, net sales increased $8.8 million.
Previous report
Industrial segment net sales increased $7.1 million, or 3.0%, to $242.9 million in the six months ended November 2, 2024, compared to $235.8 million in the six months ended October 28, 2023. Excluding foreign currency translation, net sales increased $5.8 million.
Previous report
Industrial segment gross profit increased $0.1 million, or 0.3%, to $38.0 million in the three months ended November 2, 2024, compared to $37.9 million in the three months ended October 28, 2023. Excluding foreign currency translation, gross profit decreased $0.6 million. Gross profit margins decreased to 28.9% in the three months ended November 2, 2024, compared to 31.5% in the three months ended October 28, 2023. Gross profit margins were impacted by product mix and higher operating expenses.
Previous report
Industrial segment gross profit decreased $2.7 million, or 3.7%, to $70.8 million in the six months ended November 2, 2024, compared to $73.5 million in the six months ended October 28, 2023. Excluding foreign currency translation, gross profit decreased $3.0 million. Gross profit margins decreased to 29.1% in the six months ended November 2, 2024, compared to 31.2% in the six months ended October 28, 2023. Gross profit margins were impacted by product mix.
Previous report
Interface segment gross profit increased $3.3 million, or 173.7%, to $5.2 million in the three months ended November 2, 2024, compared to $1.9 million in the three months ended October 28, 2023. Gross profit margins increased to 33.1% in the three months ended November 2, 2024, compared to 16.2% in the three months ended October 28, 2023.
Previous report
Interface segment gross profit increased $2.3 million, or 41.8%, to $7.8 million in the six months ended November 2, 2024, compared to $5.5 million in the six months ended October 28, 2023. Gross profit margins increased to 28.0% in the six months ended November 2, 2024, compared to 20.4% in the six months ended October 28, 2023.
Previous report
The increase in gross profit and gross profit margins in both periods was primarily due to higher sales volumes and an inventory reserve reduction.
Previous report
Interface segment income from operations increased $3.7 million, or 370.0%, to $4.7 million in the three months ended November 2, 2024, compared to $1.0 million in the three months ended October 28, 2023.
Previous report
Interface segment income from operations increased $2.7 million, or 69.2%, to $6.6 million in the six months ended November 2, 2024, compared to $3.9 million in the six months ended October 28, 2023.
Reworded paragraphs (33)
Previous wording
Additional details and factors are discussed under the caption “Risk Factors” in Part 1, Item 1A of our Annual Report on Form 10-K for the year ended April 27, 2024. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. Any forward-looking statements made by us speak only as of the date on which they are made. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements, whether as a result of new information, subsequent events or otherwise.
Current wording
Additional details and factors are discussed under the caption “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended April 27, 2024 and in Part II, Item 1A of this Quarterly Report. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. Any forward-looking statements made by us speak only as of the date on which they are made. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements, whether as a result of new information, subsequent events or otherwise.
Previous wording
Although we saw improvements in our supply chain in fiscal 2024, including easing of the worldwide semiconductor supply shortage, new supply chain disruptions may occur in the future. In addition, we have experienced, and may continue to experience, business interruptions, including customer shutdowns and increased material and logistics costs and labor shortages. We could also be impacted by changes in government regulations in areas including, but not limited to, trade and tariff regulations, which would increase our costs. We continue to work closely with suppliers and customers to minimize the potential adverse impact from global supply chain disruptions. However, if we are not able to mitigate any direct or indirect supply chain disruptions, this may have a material adverse impact on our financial condition, results of operations and cash flows.
Current wording
Although we saw improvements in our supply chain in fiscal 2024, including easing of the worldwide semiconductor supply shortage, new supply chain disruptions may occur in the future. In addition, we have experienced, and may continue to experience, business interruptions, including customer shutdowns and increased material and logistics costs and labor shortages. Changes in government regulations in areas including, but not limited to, trade and tariff regulations as noted above, could also increase our costs. We continue to work closely with suppliers and customers to minimize the potential adverse impact from global supply chain disruptions. However, if we are not able to mitigate any direct or indirect supply chain disruptions, this may have a material adverse impact on our financial condition, results of operations and cash flows.
Previous wording
We maintain our financial records on the basis of a 52 or 53-week fiscal year ending on the Saturday closest to April 30. Fiscal 2025 is a 53-week year and fiscal 2024 was a 52-week year. For the three months ended November 2, 2024, our accounting period included 14 weeks compared to 13 weeks for the three months ended October 28, 2023. For the six months ended November 2, 2024, our accounting period included 27 weeks compared to 26 weeks for the six months ended October 28, 2023. The following discussions of comparative results among periods should be reviewed in this context.
Current wording
We maintain our financial records on the basis of a 52 or 53-week fiscal year ending on the Saturday closest to April 30. Fiscal 2025 is a 53-week year and fiscal 2024 was a 52-week year. The three months ended February 1, 2025 and January 27, 2024 were 13-week periods, while the nine months ended February 1, 2025 and January 27, 2024, were 40 and 39-week periods, respectively. The following discussions of comparative results among periods should be reviewed in this context.
Previous wording
The table below compares our results of operations between the three and six months ended November 2, 2024 and the three and six months ended October 28, 2023:
Current wording
The table below compares our results of operations between the three and nine months ended February 1, 2025 and the three and nine months ended January 27, 2024:
Previous wording
Net sales decreased $26.6 million, or 4.6%, to $551.1 million in the six months ended November 2, 2024, compared to $577.7 million in the six months ended October 28, 2023. Foreign currency translation increased net sales by $2.6 million. Excluding foreign currency translation, net sales decreased $29.2 million. The decrease was primarily due to lower sales volumes in the Automotive segment, partially offset by higher sales volumes in the Industrial segment.
Current wording
Net sales decreased $19.6 million, or 7.6%, to $239.9 million in the three months ended February 1, 2025, compared to $259.5 million in the three months ended January 27, 2024. Foreign currency translation decreased net sales by $3.3 million. Excluding foreign currency translation, net sales decreased $16.3 million. The decrease was primarily due to lower sales volumes in the Automotive segment, partially offset by higher sales volumes in the Industrial segment.
Previous wording
Cost of products sold decreased $22.8 million, or 4.8%, to $448.6 million (81.4% of net sales) in the six months ended November 2, 2024, compared to $471.4 million (81.6% of net sales) in the six months ended October 28, 2023. Foreign currency translation increased cost of products sold by $2.0 million. Excluding foreign currency translation, cost of products sold decreased $24.8 million. The decrease was primarily due to lower material and freight costs as a result of a decrease in sales volumes, partially offset by higher salary expense. Restructuring and asset impairment charges included within cost of products sold were $0.4 million in the six months ended November 2, 2024, compared to $0.8 million in the six months ended October 28, 2023.
Current wording
Cost of products sold decreased $46.7 million, or 6.7%, to $647.2 million (81.8% of net sales) in the nine months ended February 1, 2025, compared to $693.9 million (82.9% of net sales) in the nine months ended January 27, 2024. Foreign currency translation decreased cost of products sold by $0.3 million. Excluding foreign currency translation, cost of products sold decreased $46.4 million. The decrease was primarily due to lower material and freight costs as a result of a decrease in sales volumes, partially offset by higher salary and warranty expense. Restructuring and asset impairment charges included within cost of products sold were $0.4 million in the nine months ended February 1, 2025, compared to $0.9 million in the nine months ended January 27, 2024.
Previous wording
Gross profit margin was 19.8% of net sales in the three months ended November 2, 2024, compared to 18.2% of net sales in the three months ended October 28, 2023. Gross profit margin was 18.6% of net sales in the six months ended November 2, 2024, compared to 18.4% of net sales in the six months ended October 28, 2023.
Current wording
Gross profit margin was 17.2% of net sales in the three months ended February 1, 2025, compared to 14.3% of net sales in the three months ended January 27, 2024. Gross profit margin was 18.2% of net sales in the nine months ended February 1, 2025, compared to 17.1% of net sales in the nine months ended January 27, 2024.
Previous wording
The increase in gross profit margin in both periods was primarily a result of product mix from higher sales in the Industrial segment and lower operating expenses.
Current wording
The increase in gross profit margin in both periods was primarily a result of product mix from higher sales in the Industrial segment.
Previous wording
Selling and administrative expenses increased $1.7 million, or 4.2%, to $42.6 million (14.6% of net sales) in the three months ended November 2, 2024, compared to $40.9 million (14.2% of net sales) in the three months ended October 28, 2023. The increase was due to higher incentive compensation expense and professional fees, partially offset by lower salary expense. Professional fees include $5.4 million for consulting and interim executive services provided by AlixPartners.
Current wording
Selling and administrative expenses increased $7.2 million, or 6.0%, to $126.5 million (16.0% of net sales) in the nine months ended February 1, 2025, compared to $119.3 million (14.2% of net sales) in the nine months ended January 27, 2024. Excluding foreign currency translation, selling and administrative expenses increased $7.3 million. The increase was primarily due to higher professional fees and incentive compensation expense, partially offset by lower salary expense. Professional fees in the nine months ended February 1, 2025 include $9.8 million for consulting and interim executive services provided by AlixPartners.
Previous wording
In the three and six months ended October 28, 2023, we recognized a goodwill impairment of $56.5 million in the Automotive segment. For further information, see Note 6, “Goodwill and Other Intangible Assets” to the condensed consolidated financial statements included in this Report.
Current wording
In the nine months ended January 27, 2024, we recognized a goodwill impairment of $56.5 million in the Automotive segment. For further information, see Note 6, “Goodwill and Other Intangible Assets” to the condensed consolidated financial statements included in this Quarterly Report.
Previous wording
Amortization of intangibles was $5.9 million in the three months ended November 2, 2024, compared to $6.2 million in the three months ended October 28, 2023. Amortization of intangibles was $11.8 million in the six months ended November 2, 2024, compared to $11.9 million in the six months ended October 28, 2023.
Current wording
Amortization of intangibles was $5.8 million in the three months ended February 1, 2025, compared to $6.1 million in the three months ended January 27, 2024. Amortization of intangibles was $17.6 million in the nine months ended February 1, 2025, compared to $18.0 million in the nine months ended January 27, 2024.
Previous wording
Interest expense, net was $6.2 million in the three months ended November 2, 2024, compared to $4.4 million in the three months ended October 28, 2023. Interest expense, net was $11.0 million in the six months ended November 2, 2024, compared to $7.2 million in the six months ended October 28, 2023. The increase in both periods was due to a higher level of borrowings and increased interest rates.
Current wording
Interest expense, net was $5.5 million in the three months ended February 1, 2025, compared to $5.0 million in the three months ended January 27, 2024. Interest expense, net was $16.5 million in the nine months ended February 1, 2025, compared to $12.2 million in the nine months ended January 27, 2024. The increase in both periods was due to a higher level of borrowings and increased interest rates.
Previous wording
Other expense, net was $1.6 million in the three months ended November 2, 2024, compared to other income, net of $0.2 million in the three months ended October 28, 2023. Net foreign exchange loss was $1.7 million in the three months ended November 2, 2024, compared to net foreign exchange gain of $0.3 million in the three months ended October 28, 2023.
Current wording
Other expense, net was $0.5 million in the three months ended February 1, 2025, compared to $2.5 million in the three months ended January 27, 2024. Net foreign exchange loss was $1.3 million in the three months ended February 1, 2025, compared to $2.8 million in the three months ended January 27, 2024. In the three months ended February 1, 2025, we received $0.8 million of international government assistance, compared to $0.2 million in the three months ended January 27, 2024.
Previous wording
Other expense, net was $2.4 million in the six months ended November 2, 2024, compared to other income, net of $0.2 million in the six months ended October 28, 2023. Other expense, net in the six months ended November 2, 2024 includes a non-cash write-off of $1.2 million of unamortized debt issuance costs. Net foreign exchange loss was $2.3 million in the six months ended November 2, 2024, compared to net foreign exchange gain of $0.5 million in the six months ended October 28, 2023. In the six months ended November 2, 2024, we received $1.0 million of international government assistance.
Current wording
Other expense, net was $2.9 million in the nine months ended February 1, 2025, compared to $2.3 million in the nine months ended January 27, 2024. Other expense, net in the nine months ended February 1, 2025 includes a non-cash write-off of $1.2 million of unamortized debt issuance costs. Net foreign exchange loss was $3.6 million in the nine months ended February 1, 2025, compared to $2.2 million in the nine months ended January 27, 2024. In the nine months ended February 1, 2025, we received $1.8 million of international government assistance, compared to $0.3 million in the nine months ended January 27, 2024.
Previous wording
Income tax expense was $3.2 million (200.0% effective tax rate) in the three months ended November 2, 2024, compared to an income tax benefit of $0.2 million (0.4% effective tax rate) in the three months ended October 28, 2023. Income tax expense was $8.4 million (-73.0% effective tax rate) in the six months ended November 2, 2024, compared to an income tax benefit of $0.1 million (0.2% effective tax rate) in the six months ended October 28, 2023.
Current wording
Income tax expense was $6.2 million (-75.6% effective tax rate) in the three months ended February 1, 2025, compared to $1.1 million (-10.5% effective tax rate) in the three months ended January 27, 2024. Income tax expense was $14.6 million (-74.1% effective tax rate) in the nine months ended February 1, 2025, compared to $1.0 million (-1.5% effective tax rate) in the nine months ended January 27, 2024.
Previous wording
The effective tax rate for the three and six months ended November 2, 2024 was higher than the U.S. federal statutory tax rate of 21% primarily due to an increase in a valuation allowance for U.S. deferred tax assets and global intangible low-tax income, partially offset by the impact of income derived from foreign operations with lower statutory tax rates, research deductions claimed in foreign jurisdictions and foreign exchange loss. The effective tax rate for the three and six months ended October 28, 2023 was lower than the U.S. federal statutory tax rate of 21% primarily due to income derived from foreign operations with lower statutory tax rates and research deductions claimed in foreign jurisdictions, partially offset by global intangible low-tax income and non-deductible expenses.
Current wording
The effective tax rate for the three and nine months ended February 1, 2025 differs from the U.S. federal statutory tax rate of 21% primarily due to an increase in a valuation allowance for U.S. deferred tax assets and an unfavorable impact from global intangible low-tax income, partially offset by the impact of income derived from foreign operations with lower statutory tax rates. The effective tax rate for the three and nine months ended January 27, 2024 differs from the U.S. federal statutory tax rate of 21% primarily due to income derived from foreign operations with lower statutory tax rates and research deductions claimed in foreign jurisdictions, partially offset by global intangible low-tax income and non-deductible expenses.
Previous wording
Net loss was $1.6 million in the three months ended November 2, 2024, compared to $55.3 million in the three months ended October 28, 2023. Net loss was $19.9 million in the six months ended November 2, 2024, compared to $54.4 million in the six months ended October 28, 2023. The net loss was a result of the reasons described above.
Current wording
Net loss was $14.4 million in the three months ended February 1, 2025, compared to $11.6 million in the three months ended January 27, 2024. Net loss was $34.3 million in the nine months ended February 1, 2025, compared to $66.0 million in the nine months ended January 27, 2024. The net loss was a result of the reasons described above.
Previous wording
Net sales in North America decreased $1.2 million to $69.7 million in the three months ended November 2, 2024, compared to $70.9 million in the three months ended October 28, 2023. The decrease was due to the roll off of legacy programs offset by new program launches. Net sales in EMEA increased $16.8 million to $66.5 million in the three months ended November 2, 2024, compared to $49.7 million in the three months ended October 28, 2023. The stronger euro, relative to the U.S. dollar, increased net sales in EMEA by $1.9 million. Excluding foreign currency translation, net sales in EMEA were higher due to new program launches, partially offset by lower sales volumes of sensor products. Net sales in Asia decreased $24.4 million to $9.3 million in the three months ended November 2, 2024, compared to $33.7 million in the three months ended October 28, 2023. The stronger Chinese renminbi, relative to the U.S. dollar, increased net sales in Asia by $0.2 million. Excluding foreign currency translation, net sales in Asia decreased primarily due to a program roll-off.
Current wording
Net sales in North America decreased $4.9 million to $51.8 million in the three months ended February 1, 2025, compared to $56.7 million in the three months ended January 27, 2024. The decrease was due to the roll-off of legacy programs, partially offset by new program launches. Net sales in EMEA increased $3.9 million to $55.9 million in the three months ended February 1, 2025, compared to $52.0 million in the three months ended January 27, 2024. Excluding foreign currency translation, net sales in EMEA increased $5.4 million due to new program launches, partially offset by lower sales volumes of sensor products. Net sales in Asia decreased $23.0 million to $8.0 million in the three months ended February 1, 2025, compared to $31.0 million in the three months ended January 27, 2024. Excluding foreign currency translation, net sales in Asia decreased $22.8 million primarily due to a program roll-off.
Previous wording
Net sales in North America decreased $1.7 million to $136.0 million in the six months ended November 2, 2024, compared to $137.7 million in the six months ended October 28, 2023. The decrease was due to the roll off of legacy programs offset by new program launches. Net sales in EMEA increased $23.9 million to $125.8 million in the six months ended November 2, 2024, compared to $101.9 million in the six months ended October 28, 2023. The stronger euro, relative to the U.S. dollar, increased net sales in EMEA by $1.3 million. Excluding foreign currency translation, net sales in EMEA were higher due to new program launches, partially offset by lower sales volumes of sensor products. Net sales in Asia decreased $54.5 million to $18.5 million in the six months ended November 2, 2024, compared to $73.0 million in the six months ended October 28, 2023. The decrease was primarily due to a program roll-off.
Current wording
Net sales in North America decreased $6.6 million to $187.8 million in the nine months ended February 1, 2025, compared to $194.4 million in the nine months ended January 27, 2024. The decrease was due to the roll-off of legacy programs, partially offset by new program launches. Net sales in EMEA increased $27.8 million to $181.7 million in the nine months ended February 1, 2025, compared to $153.9 million in the nine months ended January 27, 2024. Excluding foreign currency translation, net sales in EMEA increased $28.2 million due to new program launches, partially offset by lower sales volumes of sensor products. Net sales in Asia decreased $77.5 million to $26.5 million in the nine months ended February 1, 2025, compared to $104.0 million in the nine months ended January 27, 2024. Excluding foreign currency translation, net sales in Asia decreased $77.4 million primarily due to a program roll-off.
Previous wording
Automotive segment gross profit decreased $4.1 million, or 15.2%, to $22.8 million in the six months ended November 2, 2024, compared to $26.9 million in the six months ended October 28, 2023. Excluding foreign currency translation, gross profit decreased $4.4 million. Gross profit margins decreased to 8.1% in the six months ended November 2, 2024, compared to 8.6% in the six months ended October 28, 2023. The decrease in gross profit was due to lower sales volumes and higher salary expense, partially offset by lower freight and warranty costs.
Current wording
Automotive segment gross profit decreased $1.5 million, or 33.3%, to $3.0 million in the three months ended February 1, 2025, compared to $4.5 million in the three months ended January 27, 2024. Excluding foreign currency translation, gross profit decreased $1.1 million. Gross profit margins decreased to 2.6% in the three months ended February 1, 2025, compared to 3.2% in the three months ended January 27, 2024. The decrease in gross profit was primarily due to lower sales volumes in Asia, partially offset by lower freight costs.
Previous wording
Automotive segment income from operations was $0.7 million in the three months ended November 2, 2024, compared to a loss of $61.5 million in the three months ended October 28, 2023. Loss from operations in the three months ended October 28, 2023, includes goodwill impairment of $56.5 million. Excluding goodwill impairment and foreign currency translation, income from operations increased $5.6 million. The improvement was due to higher gross profit and lower selling and administrative expenses. Selling and administrative expenses decreased due to lower compensation expense, travel and entertainment expense, and professional fees.
Current wording
Automotive segment loss from operations was $9.0 million in the three months ended February 1, 2025, compared to $11.0 million in the three months ended January 27, 2024. The improvement was due to lower selling and administrative expenses, partially offset by lower gross profit. Selling and administrative expenses decreased due to lower compensation expense.
Previous wording
Automotive segment loss from operations was $5.0 million in the six months ended November 2, 2024, compared to $64.3 million in the six months ended October 28, 2023. Loss from operations in the six months ended October 28, 2023, includes goodwill impairment of $56.5 million. Excluding goodwill impairment and foreign currency translation, loss from operations decreased $2.8 million. The improvement was due to lower selling and administrative expenses, partially offset by lower gross profit. Selling and administrative expenses decreased due to lower outbound freight, travel and entertainment expense, compensation expense and professional fees.
Current wording
Automotive segment loss from operations was $14.0 million in the nine months ended February 1, 2025, compared to $75.3 million in the nine months ended January 27, 2024. Loss from operations in the nine months ended January 27, 2024, included goodwill impairment of $56.5 million. Excluding goodwill impairment, loss from operations decreased $4.8 million. The improvement was due to lower selling and administrative expenses, partially offset by lower gross profit. Selling and administrative expenses decreased due to lower outbound freight, travel and entertainment expense, compensation expense and professional fees.
Previous wording
Industrial segment income from operations decreased $8.7 million, or 17.4%, to $41.2 million in the six months ended November 2, 2024, compared to $49.9 million in the six months ended October 28, 2023. Excluding foreign currency translation, income from operations decreased $9.0 million. The decrease was primarily due to lower gross profit and higher selling and administrative expenses. The increase in selling and administrative expenses was primarily due to higher legal fees and compensation expense.
Current wording
Industrial segment income from operations increased $3.7 million, or 19.6%, to $22.6 million in the three months ended February 1, 2025, compared to $18.9 million in the three months ended January 27, 2024. Excluding foreign currency translation, income from operations increased $4.1 million. The increase was primarily due to higher gross profit, partially offset by higher selling and administrative expenses. The increase in selling and administrative expenses was primarily due to higher compensation expense, partially offset by lower legal fees.
Previous wording
Industrial segment income from operations decreased $1.4 million, or 5.4%, to $24.3 million in the three months ended November 2, 2024, compared to $25.7 million in the three months ended October 28, 2023. Excluding foreign currency translation, income from operations decreased $1.9 million. The decrease was primarily due to lower gross profit and higher selling and administrative expenses. The increase in selling and administrative expenses was primarily due to higher compensation expense, partially offset by lower legal fees.
Current wording
Industrial segment income from operations decreased $5.0 million, or 7.3%, to $63.8 million in the nine months ended February 1, 2025, compared to $68.8 million in the nine months ended January 27, 2024. Excluding foreign currency translation, income from operations decreased $4.9 million. The decrease was primarily due to higher selling and administrative expenses, partially offset by higher gross profit. The increase in selling and administrative expenses was primarily due to higher legal fees and compensation expense.
Previous wording
Interface segment net sales increased $1.0 million, or 3.7%, to $27.9 million in the six months ended November 2, 2024, compared to $26.9 million in the six months ended October 28, 2023. The increase was due to higher sales volumes of transceivers for servers, partially offset by lower sales volumes of touch panels for appliances.
Current wording
Interface segment net sales decreased $0.4 million, or 3.1% to $12.3 million in the three months ended February 1, 2025, compared to $12.7 million in the three months ended January 27, 2024. The decrease was primarily due to lower sales volumes of transceivers for servers, partially offset by higher sales volumes for touch panels for appliances.
Previous wording
Interface segment net sales increased $4.0 million, or 34.2% to $15.7 million in the three months ended November 2, 2024, compared to $11.7 million in the three months ended October 28, 2023. The increase was primarily due to higher sales volumes of transceivers for servers and touch panels for appliances.
Current wording
Interface segment net sales increased $0.6 million, or 1.5%, to $40.2 million in the nine months ended February 1, 2025, compared to $39.6 million in the nine months ended January 27, 2024. The increase was due to higher sales volumes of touch panels for appliances.
Previous wording
As of November 2, 2024, we had $97.0 million of cash and cash equivalents, of which $49.8 million was held in subsidiaries outside the U.S. Cash held by these subsidiaries is used to fund operational activities and can be repatriated, primarily through the payment of dividends and the repayment of intercompany loans, without creating material additional income tax expense.
Current wording
As of February 1, 2025, we had $103.8 million of cash and cash equivalents, of which $71.4 million was held in subsidiaries outside the U.S. Cash held by these subsidiaries is used to fund operational activities and can be repatriated, primarily through the payment of dividends and the repayment of intercompany loans, without creating material additional income tax expense.
Previous wording
On March 31, 2021, as subsequently amended on June 16, 2022, the Board of Directors authorized the purchase of up to $200.0 million of our outstanding common stock through June 14, 2024 (the “2021 Buyback Authorization”). On June 13, 2024, the Board of Directors approved a new share buyback authorization, commencing on June 17, 2024, for the purchase of up to $200.0 million of our outstanding common stock through June 17, 2026 (the “2024 Buyback Authorization”). Purchases may be made on the open market, including pursuant to purchase plans designed to comply with Rule 10b5-1 of the Securities Exchange Act of 1934, or in private transactions. Prior to its expiration, a total of 3,553,961 shares were purchased under the 2021 Buyback Authorization at a total cost of $134.6 million. No further shares can be purchased under the 2021 Buyback Authorization. In the three and six months ended November 2, 2024, zero and 136,000 shares were purchased under the 2021 Buyback Authorization and no shares were purchased under the 2024 Buyback Authorization. As of November 2, 2024, the dollar value of shares that remained available to be purchased under 2024 Buyback Authorization was $200.0 million.
Current wording
On March 31, 2021, as subsequently amended on June 16, 2022, the Board of Directors authorized the purchase of up to $200.0 million of our outstanding common stock through June 14, 2024 (the “2021 Buyback Authorization”). On June 13, 2024, the Board of Directors approved a new share buyback authorization, commencing on June 17, 2024, for the purchase of up to $200.0 million of our outstanding common stock through June 17, 2026 (the “2024 Buyback Authorization”). Purchases may be made on the open market, including pursuant to purchase plans designed to comply with Rule 10b5-1 of the Securities Exchange Act of 1934, or in private transactions. Prior to its expiration, a total of 3,553,961 shares were purchased under the 2021 Buyback Authorization at a total cost of $134.6 million. No further shares can be purchased under the 2021 Buyback Authorization. In the three and nine months ended February 1, 2025, zero and 136,000 shares were purchased under the 2021 Buyback Authorization and no shares were purchased under the 2024 Buyback Authorization. As of February 1, 2025, the dollar value of shares that remained available to be purchased under 2024 Buyback Authorization was $200.0 million.
Previous wording
Among other things, the Second Amendment (i) reduced the revolving credit commitments under the Credit Agreement from $750 million to $500 million, (ii) granted a security interest in substantially all of the personal property of the Company and our U.S. subsidiaries that are guarantors, including 100% of the equity interests of their respective U.S. subsidiaries and 65% of the equity interests of their respective foreign subsidiaries (or such greater amount to the extent such pledge could not reasonably cause adverse tax consequences), (iii) amended the consolidated interest coverage ratio covenant for the quarters ending July 27, 2024, November 2, 2024, January 25, 2025 and May 3, 2025, (iv) amended the consolidated leverage ratio covenant for the quarter ending July 27, 2024 and each subsequent fiscal quarter, (v) amended certain interest rate provisions, (vi) added a requirement to provide monthly financial statements to the lenders through the period ending July 25, 2025, (vii) decreased the general basket exceptions to certain covenants restricting certain Company investments, liens and indebtedness for specified periods of time, (viii) increased, for fiscal year 2025, the general basket exception to a covenant restricting certain Company dispositions of property, (ix) added an “anti-cash hoarding” requirement, applicable during the period from the effective date of the Second Amendment until the earlier to occur of (a) the delivery of financial statements and a compliance certificate for the fiscal quarter ending July 25, 2025 and (b) the delivery of compliance certificates for two consecutive fiscal quarters demonstrating that the our consolidated leverage ratio as of the last day of such fiscal quarters was less than 3.00:1.00, that if we have cash on hand (subject to certain exceptions) of more than $65 million for 10 consecutive business days, we shall prepay the indebtedness under the credit facility by the amount of such excess and (x) made certain other changes to the investment, restricted payment and indebtedness baskets. The Credit Agreement, as amended by the First Amendment and the Second Amendment, is referred to herein as the “Amended Credit Agreement.”
Current wording
Among other things, the Second Amendment (i) reduced the revolving credit commitments under the Credit Agreement from $750 million to $500 million, (ii) granted a security interest in substantially all of the personal property of the Company and our U.S. subsidiaries that are guarantors, including 100% of the equity interests of their respective U.S. subsidiaries and 65% of the equity interests of their respective foreign subsidiaries (or such greater amount to the extent such pledge could not reasonably cause adverse tax consequences), (iii) amended the consolidated interest coverage ratio covenant for each quarter in fiscal year 2025, (iv) amended the consolidated leverage ratio covenant for the quarter ending July 27, 2024 and each subsequent fiscal quarter, (v) amended certain interest rate provisions, (vi) added a requirement to provide monthly financial statements to the lenders through the period ending July 25, 2025, (vii) decreased the general basket exceptions to certain covenants restricting certain Company investments, liens and indebtedness for specified periods of time, (viii) increased, for fiscal year 2025, the general basket exception to a covenant restricting certain Company dispositions of property, (ix) added an “anti-cash hoarding” requirement, applicable during the period from the effective date of the Second Amendment until the earlier to occur of (a) the delivery of financial statements and a compliance certificate for the fiscal quarter ending July 25, 2025 and (b) the delivery of compliance certificates for two consecutive fiscal quarters demonstrating that our consolidated leverage ratio as of the last day of such fiscal quarters was less than 3.00:1.00, that if we have cash on hand (subject to certain exceptions) of more than $65 million for 10 consecutive business days, we shall prepay the indebtedness under the credit facility by the amount of such excess and (x) made certain other changes to the investment, restricted payment and indebtedness baskets. The Credit Agreement, as amended by the First Amendment and the Second Amendment, is referred to herein as the “Amended Credit Agreement.”
Previous wording
As of November 2, 2024, the outstanding balance under the revolving credit facility consisted of $297.9 million (€275.0 million) of euro-denominated borrowings and $45.0 million of US denominated borrowings. The Amended Credit Agreement contains various representations and warranties, financial covenants (including covenants requiring us to maintain compliance with a minimum consolidated interest coverage ratio and a maximum consolidated leverage ratio, in each case as of the end of each fiscal quarter of the Company), restrictive and other covenants, and events of default. The covenants in the Amended Credit Agreement include an “anti-cash hoarding” requirement, as discussed above. As of November 2, 2024, we were in compliance with all the covenants in the Amended Credit Agreement. For further information, see Note 8, “Debt” to the condensed consolidated financial statements included in this Report.
Current wording
As of February 1, 2025, the outstanding balance under the revolving credit facility consisted of $285.0 million (€275.0 million) of euro-denominated borrowings and $45.0 million of US denominated borrowings. The Amended Credit Agreement contains various representations and warranties, financial covenants (including covenants requiring us to maintain compliance with a minimum consolidated interest coverage ratio and a maximum consolidated leverage ratio, in each case as of the end of each fiscal quarter), restrictive and other covenants, and events of default. The covenants in the Amended Credit Agreement include an “anti-cash hoarding” requirement, as discussed above. As of February 1, 2025, we were in compliance with all the covenants in the Amended Credit Agreement. For further information, see Note 8, “Debt” to the condensed consolidated financial statements included in this Quarterly Report.
Previous wording
Net cash used in operating activities was $37.1 million in the six months ended November 2, 2024, compared to $6.2 million in the six months ended October 28, 2023. The increase was due to a higher net loss adjusted for non-cash items and higher cash outflows from operating assets and liabilities. The $54.7 million of cash outflows for operating assets and liabilities in the six months ended November 2, 2024 was primarily due to higher inventory and lower other liabilities, partially offset by lower accounts receivable.
Current wording
Net cash used in operating activities was $9.0 million in the nine months ended February 1, 2025, compared to net cash provided by operating activities of $22.6 million in the nine months ended January 27, 2024. The decrease was due to lower net loss adjusted for non-cash items and higher cash outflows from operating assets and liabilities. The $25.7 million of cash outflows for operating assets and liabilities in the nine months ended February 1, 2025 was primarily due to higher inventory and lower accounts payable, partially offset by lower accounts receivable.
Previous wording
Net cash used in investing activities was $21.0 million in the six months ended November 2, 2024, compared to $22.3 million in the six months ended October 28, 2023. Capital expenditures were $24.0 million in the six months ended November 2, 2024, compared to $24.5 million in the six months ended October 28, 2023. In the six months ended November 2, 2024, we received proceeds of $3.0 million from the sale of assets, compared to $1.6 million in the six months ended October 28, 2023.
Current wording
Net cash used in investing activities was $26.7 million in the nine months ended February 1, 2025, compared to $39.0 million in the nine months ended January 27, 2024. Capital expenditures were $32.5 million in the nine months ended February 1, 2025, compared to $41.1 million in the nine months ended January 27, 2024. In the nine months ended February 1, 2025, we received proceeds of $2.7 million from the sale of assets, compared to $1.5 million in the nine months ended January 27, 2024. In the nine months ended February 1, 2025, we received proceeds of $3.1 million from the settlement of a net investment hedge as compared to $0.6 million in the nine months ended January 27, 2024.
Previous wording
Net cash used in financing activities was $8.1 million in the six months ended November 2, 2024, compared to net cash provided by financing activities of $1.9 million in the six months ended October 28, 2023. In the six months ended November 2, 2024, we used $1.6 million of cash for the purchase of shares under the 2021 Buyback Authorization, compared to $7.8 million in the six months ended October 28, 2023. We paid cash dividends of $10.0 million in the six months ended November 2, 2024, compared to $10.1 million in the six months ended October 28, 2023. In the six months ended November 2, 2024, we had net proceeds from borrowings of $5.9 million, compared to net proceeds from borrowings of $34.6 million in the six months ended October 28, 2023. In the six months ended November 2, 2024, we paid $1.8 million of debt issuance costs associated with the Second Amendment. In the six months ended October 28, 2023, we paid $10.9 million for the purchase of redeemable noncontrolling interests related to Nordic Lights.
Current wording
Net cash used in financing activities was $16.6 million in the nine months ended February 1, 2025, compared to $15.0 million in the nine months ended January 27, 2024. We paid cash dividends of $15.3 million in the nine months ended February 1, 2025, compared to $15.0 million in the nine months ended January 27, 2024. In the nine months ended February 1, 2025, we had net proceeds from borrowings of $5.8 million, compared to net proceeds from borrowings of $25.7 million in the nine months ended January 27, 2024. In the nine months ended February 1, 2025, we paid $1.8 million of debt issuance costs associated with the Second Amendment. In the nine months ended February 1, 2025, we used $1.6 million of cash for the purchase of shares under the 2021 Buyback Authorization, compared to $10.8 million in the nine months ended January 27, 2024. In the nine months ended January 27, 2024, we paid $10.9 million for the purchase of redeemable noncontrolling interests related to Nordic Lights.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Selling and administrative expenses increased $3.4 million, or 4.0%, to $88.8 million (16.1% of net sales) in the six months ended November 2, 2024, compared to $85.4 million (14.8% of net sales) in the six months ended October 28, 2023. The increase was primarily due to higher professional fees and incentive compensation expense, partially offset by lower salary expense. Professional fees include $8.9 million for consulting and interim executive services provided by AlixPartners.