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Here are 1-2 brief analogies to describe Methode Electronics (MEI):

• Like a more focused TE Connectivity or Amphenol, building custom electronic and electrical components and solutions (e.g., sensors, human-machine interfaces) for various industries.
• Similar to Sensata Technologies for sensors, but with an added focus on human-machine interfaces and power distribution solutions.

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• User Interface Solutions: Manufactures human-machine interface (HMI) products, including touchscreens, displays, and custom controls, primarily for the automotive and industrial sectors.
• Power Distribution Solutions: Designs and produces a range of power distribution components such as busbars, power cables, and connectors for industrial, automotive, and data center applications.
• Sensor and Cable Solutions: Provides custom sensors, flexible circuits, and high-speed data and signal transmission cables for demanding applications across various industries.

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Methode Electronics (symbol: MEI) primarily sells to other companies, making it a business-to-business (B2B) supplier. While the company does not typically disclose the specific names of its major customers due to confidentiality agreements, its latest annual report (Form 10-K for the fiscal year ended April 29, 2023) provides the following insights into its major customer base:

• One unnamed customer in its Automotive segment accounted for approximately 11% of Methode Electronics' consolidated net sales during fiscal year 2023. This indicates a significant reliance on a single, large entity within the global automotive supply chain, likely a major Original Equipment Manufacturer (OEM) or a Tier 1 supplier to such an OEM.

Beyond this specific disclosure, Methode Electronics serves a broad range of Original Equipment Manufacturers (OEMs) and Tier 1 suppliers across its various segments. These categories represent the types of companies that constitute its broader customer base:

• Automotive OEMs and Tier 1 Suppliers: Companies that design and manufacture passenger vehicles, commercial vehicles, and their major components for the global automotive industry.

• Industrial OEMs and Tier 1 Suppliers: Businesses operating in sectors such as commercial vehicle (e.g., heavy trucks, buses), construction (e.g., heavy machinery), rail, agriculture (e.g., farming equipment), and general industrial applications. They supply components and systems to manufacturers in these heavy equipment and industrial sectors.

• Medical Device OEMs: Companies involved in the development and manufacturing of a wide array of medical devices and healthcare equipment.

• Aerospace OEMs and Tier 1 Suppliers: Manufacturers of aircraft, spacecraft, defense systems, and their critical sub-assemblies and components.

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Jonathan B. DeGaynor, President and Chief Executive Officer

Mr. DeGaynor has served as President and Chief Executive Officer of Methode Electronics since July 2024. He has a 35-year career in the automotive and manufacturing industries, focusing on new technology and organizational transformation. Prior to joining Methode, he was President and CEO of Stoneridge, Inc., a publicly traded global designer and manufacturer of electrical and electronic systems for the automotive industry, from 2015 to 2023. At Stoneridge, he led a team that executed a strategic shift and drove significant growth and value creation, including coordinating high-value acquisitions such as Orlaco Inc. in 2017. He previously held roles as Vice President of Strategic Planning and Innovation at Guardian Industries Corp. and Chief Operating Officer, International for Autocam Corporation. Mr. DeGaynor currently serves as non-employee Executive Chairman of Racing and Performance, Inc. While his background includes managing and transforming companies, there is no explicit information indicating he founded other companies, sold companies he was previously involved with to an acquirer, or has a pattern of managing companies specifically backed by private equity firms.

Laura Kowalchik, Chief Financial Officer

Ms. Kowalchik has served as Chief Financial Officer of Methode Electronics since October 2024. She brings over 25 years of experience in strategic, management, and financial roles in both public and private companies within the automotive and industrial markets. Prior to Methode, Ms. Kowalchik was the CFO of Communications & Power Industries (CPI) from 2023 to 2024. Before CPI, she served as CFO of Dayco Products, LLC from 2019 to 2023. Her experience also includes senior financial management positions at Kenwal Steel Corp., Urban Science, and Kaydon Corporation. She has led multiple finance organizations through successful strategic transformations. While she has experience with private companies, a specific pattern of managing private equity-backed companies, or founding or selling companies she was involved with to an acquirer, is not explicitly detailed in the available information.

John T. Erwin, Chief Procurement and EHS Officer

Mr. Erwin has served as Chief Procurement and EHS Officer of Methode Electronics since March 2025, having been Chief Procurement Officer since July 2024. He has a 35-year career in procurement and supply chain management for OEMs and Tier 1 suppliers. Prior to Methode, Mr. Erwin was with Guardian Industries, where he held various roles including Global Vice President - Strategic Sourcing and Procurement. He also held positions at TI Automotive and General Motors.

Lars Ullrich, Senior Vice President, Global Automotive Business

Mr. Ullrich has served as Senior Vice President, Global Automotive Business of Methode Electronics since December 2024. He brings over 20 years of business and strategic leadership experience from multinational companies. Prior to joining Methode, Mr. Ullrich was Head of Region Americas and Chief Business Officer for Larsen and Toubro Semiconductor Technologies since February 2024. He also held Vice President and Senior Vice President roles at Infineon Technologies Americas from 2019 to 2024, and manager, director, and vice president positions at Robert Bosch from 2000 to 2019.

Kerry A. Vyverberg, General Counsel

Ms. Vyverberg has served as General Counsel of Methode Electronics since June 2022, and as Vice President Legal Affairs since February 2021. Before joining Methode Electronics, she practiced law for over twenty years at Locke Lord LLP, a full-service law firm.

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The key risks to Methode Electronics' (MEI) business are primarily centered on its operational performance, legal and regulatory challenges, and significant reliance on the automotive industry.

1. Operational and Financial Performance Decline: Methode Electronics has faced considerable operational challenges, including production delays and quality issues at its Monterrey factory, which have directly contributed to a decline in its financial performance. The company experienced a revenue drop from $1,179.6 million in 2022 to $1,068.3 million in 2024, and its net income fell to -$91.6 million. This downturn is further exacerbated by sales contraction due to headwinds in the automotive sector and delayed program launches, particularly in the electric vehicle (EV) segment. The company has also shown weak cash profitability and a declining operating margin, indicating structural problems that hinder its return to a healthy profit area.
2. Legal and Regulatory Risks: Methode Electronics is currently subject to a shareholder lawsuit and an ongoing U.S. Securities and Exchange Commission (SEC) investigation concerning possible violations of the Foreign Corrupt Practices Act (FCPA). If the company is found responsible for breaching FCPA guidelines, it could face substantial fines, potentially ranging from several million to tens of millions of dollars, and incur significant costs for implementing stricter compliance systems. Such legal and regulatory issues could also damage the company's reputation, potentially leading to concerns among its major automotive customers.
3. High Dependence on the Automotive Industry and Key Customers: A significant portion of Methode Electronics' business and revenue is derived from the automotive and commercial vehicle industries. The company is highly dependent on a small number of large customers, with its five largest customers accounting for approximately 36% of its consolidated net sales in fiscal 2025 and 49% in fiscal 2023. This reliance makes Methode Electronics vulnerable to fluctuations in these industries, customer-specific production delays, or canceled orders, which can materially impact its sales and profitability.

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Methode Electronics (MEI) operates in several key markets. The addressable market sizes for their main products and services are as follows:

• Automotive: The global automotive industry market is projected to grow from USD 4075.65 billion in 2024 to USD 8508.56 billion by 2035. Global car sales reached 74.6 million units in 2024.
• Industrial: The global industrial services market size was valued at USD 41.78 billion in 2024 and is projected to reach USD 64.61 billion by 2032. The global industrial machinery market size was estimated at USD 714.5 billion in 2024 and is expected to grow to USD 1.61 trillion in 2034.
• Interface (Data Center Interconnect): The global data center interconnect market was valued at approximately USD 10.63 billion in 2024 and is expected to reach USD 30.13 billion by 2032.
• Medical Devices: The global medical devices market size was valued at USD 542.21 billion in 2024 and is projected to grow to USD 886.68 billion by 2032. Another estimate projects the global medical device market to reach nearly US$800 billion by 2030.
• Human Machine Interface (HMI): The global human-machine interface market size was valued at USD 5.5 billion in 2024 and is projected to reach USD 9.4 billion by 2033.

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Methode Electronics (MEI) is focusing on several key areas to drive future revenue growth over the next 2-3 years, even while navigating a challenging market environment. The primary expected drivers include:

1. New Program Launches, especially in the Electric Vehicle (EV) Market: Methode Electronics is investing in launching a significant number of new programs, with over 20 in fiscal year 2024 and plans for 30 in fiscal year 2026. These initiatives are expected to fuel organic growth, particularly within the rapidly expanding electric vehicle sector. While the near-term EV market in North America has shown softness, the company anticipates a notable rebound in overall EV sales in fiscal year 2027, with strength observed in Europe and Asia.

2. Expansion in Data Center Applications with Power Products: The data center market is emerging as a significant area of growth for Methode Electronics. The company's power product sales into data center applications have experienced substantial year-over-year increases, driven by both AI-related demand and the general expansion of data center infrastructure. Methode Electronics is actively seeking to further expand its presence in this high-margin sector.

3. Strategic Pivot to Industrial Business: Methode Electronics is undertaking a strategic shift to reduce its reliance on user interface solutions and increase its focus on industrial business, leveraging its power product sales for electric vehicles and data centers. This aims to create a more balanced sales portfolio and potentially higher-margin opportunities, moving away from the cyclical nature of certain automotive segments.

4. Operational Efficiencies and Cost Reductions: While not a direct revenue driver, the company's efforts to improve execution, reduce operational costs such as scrap and premium freight, and lower selling, general, and administrative (SG&A) expenses are crucial. These operational improvements contribute to a lower breakeven point and enhanced profitability, which in turn enables the company to invest in and sustain future revenue-generating initiatives and remain competitive.

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1. Share Repurchases

   • In fiscal year 2022, Methode Electronics had a share repurchase authorization of $200 million, under which 1,593,139 shares were purchased at a total cost of $71.2 million as of April 30, 2022.
   • During the third quarter of fiscal year 2023, the company bought back shares for $8 million, contributing to a year-to-date total of $39.6 million in repurchases.
   • In the fourth quarter of fiscal year 2024, Methode Electronics purchased and retired 174,215 shares of its stock for $3.0 million.

2. Outbound Investments

   • On April 20, 2023, Methode Electronics acquired 92.2% of Nordic Lights Group Corporation for €121.8 million ($134.2 million) in cash.
   • The remaining 7.8% of Nordic Lights Group Corporation shares were acquired during the fiscal year ended April 27, 2024, completing the ownership to 100%.
   • This acquisition aimed to complement Methode's existing LED lighting solutions and aligned with its inorganic growth strategy, focusing on engineered solutions for OEMs and expanding industrial and non-auto transportation market exposure.

3. Capital Expenditures

   • Capital expenditures for the third quarter of fiscal year 2023 were $12.8 million, an increase of $4.5 million compared to the previous year.
   • Free cash flow, defined as net cash provided by operating activities less purchases of property, plant, and equipment, was $15.8 million in the fourth quarter of fiscal year 2024.