Methodode重申9亿美元至10亿美元的销售目标，转型推动连续改进

Earnings Call Insights: Methode Electronics (MEI) Q2 2026

Management View

• Jonathan DeGaynor, President and CEO, opened the call by stating, "The Methode transformation is firmly on track with much more work to do, but the trajectory is positive and is progressing largely according to plan." He reported, "Our net sales for the quarter were $247 million, up 3% sequentially, with adjusted EBITDA rising 12% sequentially to $18 million." DeGaynor also highlighted a "usage of cash in the quarter, driven by a onetime customer initiative," but noted a $47 million year-over-year improvement in free cash flow. The company is reaffirming its full year sales guidance of $900 million to $1 billion and adjusted EBITDA of $70 million to $80 million.

• He described significant management attention and leadership upgrades at Egypt and Mexico facilities, resulting in "quality, delivery and cost improvements in both sites." He further noted, "The top grading of leadership is now substantially completed across the organization, ensuring that we have the right people in place to execute our strategy."

• DeGaynor announced a major strategic action: "relocation of our corporate headquarters to Southfield, Michigan, which positions us for future growth and operational efficiency."

• On the product front, DeGaynor emphasized, "Our data center activity was just over $40 million in fiscal 2024 and last year generated over $80 million in annual sales," and expects long-term growth in this area.

• Laura Kowalchik, CFO, stated, "Second quarter net sales were $246.9 million compared to $292.6 million in fiscal 2025 as a decrease of 16%, while on a sequential basis, sales increased 3%." She added, "Second quarter adjusted net loss was $6.7 million, an $11.9 million change from fiscal 2025 and on a sequential quarter basis, a reduction of adjusted net loss by $1.1 million."

• Kowalchik reported, "Net debt was down $29.6 million compared to the same period last year as we continue to drive cash flow and debt reduction. We ended the quarter with $118.5 million in cash, which was up $21.5 million year-over-year."

Outlook

• Methode reaffirmed its fiscal 2026 guidance for sales to be in the range of $900 million to $1 billion and adjusted EBITDA of $70 million to $80 million. Kowalchik said, "We expect our second half results to be higher than the first half as we have previously communicated. Q3 results will reflect traditional seasonality with improvement expected in Q4."

• DeGaynor noted, "We continue to expect our fiscal 2026 Power sales to be in line with fiscal 2025. We also expect a sales acceleration in the future as our data center growth strategy positions us to take a larger share of customer demand."

Financial Results

• The company reported second quarter net sales of $246.9 million. Adjusted EBITDA was $17.6 million, and second quarter adjusted diluted loss per share was ($0.19). Free cash flow was a usage of $11.6 million, compared to a usage of $58.4 million in the prior year quarter, reflecting a $46.8 million improvement.

• Operating cash usage was $7.4 million for the quarter, with $17.7 million generated in the first half of fiscal 2026. The company ended the quarter with $118.5 million in cash.

• A $10 million inventory build supported the transition to vendor managed inventory for data center customers, impacting cash flow for the quarter.

Q&A

• Luke Junk, Baird: Asked about current trends in the Power business, the outlook for EV versus data center, and full year expectations. DeGaynor explained that the EV headwinds, especially in North America, had already been taken, stating, "Our EV exposure is not just in North America, it's in Europe and it's in Asia, and it's a much greater percentage of our total than in North America." He added that data center revenue for Q2 was "exactly in line with guidance."

• Junk sought clarification on guidance and seasonality. DeGaynor said, "You should expect to see it as a conversion on sales will be a lot higher because some of the cost of poor quality, the premium freight, some of the other things as we make improvements in the plants, and we get through these launches."

• John Franzreb, Sidoti: Questioned if guidance would land at the lower or upper end given volatility. DeGaynor replied, "It's why we haven't narrowed either the top or the bottom half of our guidance and why we continue to bracket both the revenue guidance and the EBITDA..."

• Franzreb also asked about sequential improvement in industrial operating profit. DeGaynor credited plant improvements, stating, "Our plants are getting better. And that's why we can feel confident about our guidance without it having to be revenue tailwind that drives it."

• Gary Prestopino, Barrington: Inquired about the percentage of sales to EV and hybrid applications. DeGaynor provided, "Automotive is 44% of our total sales or $217 million in the first half. EVs are 41% of that."

• Additional questions addressed cash outflow, program launches, and the impact of tariffs, with management clarifying there were no new updates on tariffs and program launches are "primarily in Mexico right now," with most new launches being power-based (EV or hybrid).

Sentiment Analysis

• Analysts pressed for clarity on the impact of program launches, regional EV exposure, and guidance confidence, displaying a neutral to slightly skeptical tone given ongoing market volatility and sales headwinds.

• Management maintained a confident and constructive tone, emphasizing improvement actions and future growth drivers. DeGaynor stated, "We feel very confident about the second half of the year." Kowalchik described operational gains in Egypt and Mexico, reinforcing the narrative of turnaround and progress.

• Compared to the previous quarter, both analysts and management remain focused on execution and operational improvement, though management's tone was more optimistic this quarter due to visible sequential progress and the completion of major transformation milestones.

Quarter-over-Quarter Comparison

• Guidance was reaffirmed at $900 million to $1 billion in sales and $70 million to $80 million in adjusted EBITDA, consistent with the previous quarter.

• Both quarters emphasized plant improvements in Egypt and Mexico, but this quarter highlighted that the "top grading of leadership is now substantially completed" and reported sequential improvements in key metrics.

• Management further discussed the headquarters relocation and vendor managed inventory for data centers as new or advanced initiatives.

• Analysts' focus remained on guidance clarity, regional exposures, and transformation execution, while management displayed increased confidence in operational recovery and margin expansion.

Risks and Concerns

• Management cited ongoing "exogenous volatility," unresolved issues with Nexperia, and "turbulent" commercial vehicle sales as reasons for not narrowing guidance.

• Tariff regimes and chip supply issues remain challenges, with management working closely with customers to mitigate and pass on unavoidable costs.

• Analysts probed for clarity on cash flow timing, program launches, and the sustainability of operational improvements, reflecting continued vigilance over execution risks and end-market uncertainty.

Final Takeaway

Methode Electronics' leadership underscored that the transformation is delivering measurable operational and financial improvement, with sequential gains in sales, EBITDA, and cash flow. The company reaffirmed its full-year guidance and highlighted progress at key facilities, leadership upgrades, and new strategic initiatives such as the headquarters relocation and data center growth strategy. The management team remains focused on executing cost improvements and ramping up new programs, positioning Methode for a stronger second half and future growth despite external market volatility and ongoing risks in automotive and commercial vehicle segments.

Read the full Earnings Call Transcript