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Methode (MEI) reported 10.4% sales growth and $400M of lifetime program awards. When will growth restore operating profit? Published September 8, 2026 at 9:54 pm EDT Methode Electronics, Inc. (NYSE:MEI) reported fiscal first-quarter 2027 net sales of $265.4 million, up 10.4% from $240.5 million a year earlier. The increase primarily reflected higher Industrial segment volumes and mix, including organic data-center growth and higher on-highway and off-highway lighting volumes with customer recoveries. Gross profit rose to $47.7 million from $43.5 million, while gross margin was nearly unchanged at 18.0%. Selling and administrative expenses increased 25.4% to $45.9 million on higher employee costs and professional fees. Methode Electronics, Inc. recorded a $3.9 million operating loss, compared with $1.1 million of operating income in the prior-year quarter. Methode Electronics, Inc. also reported new non-data-center program awards representing approximately $75 million of peak annual revenue and $400 million of lifetime revenue. These company-reported award metrics are not recognized revenue or guaranteed volumes. Bull case. Industrial segment sales increased 27.0% to $156.8 million, while segment operating income rose 19.2% to $31.6 million. Data-center and lighting volumes indicate that growth extended across several applications. The lifetime awards also broaden visibility beyond the current data-center cycle, and successful launches could improve fixed-cost absorption. Automotive operating loss narrowed to $11.7 million from $12.5 million. Methode Electronics, Inc. made $10.1 million of net repayments on outstanding borrowings. After quarter-end, Methode Electronics, Inc. extended the maturity date of certain revolving loans through October 29, 2028, while reducing aggregate revolving commitments to $375 million. Fiscal 2027 guidance remains $1.025 billion to $1.075 billion of sales and $72 million to $82 million of company-defined non-GAAP adjusted EBITDA. This measure adds taxes, net interest expense, depreciation, and intangible amortization to net income, then adjusts for items including restructuring and impairment charges, transaction and strategic costs, debt-issuance write-offs, and gains on non-core assets. Bear case. Adjusted EBITDA declined to $13.7 million from $15.7 million despite the sales increase, and adjusted EBITDA margin fell to 5.2% from 6.5%. Reaching the full-year guidance requires $58.3 million to $68.3 million over the final three quarters, or an average of approximately $19.4 million to $22.8 million per quarter. Industrial gross margin fell to 29.3% from 32.1% because of higher materials and freight costs. Automotive remained unprofitable, while Interface recorded a $0.8 million operating loss following the dataMate divestiture and program roll-offs. Management said adjusted EBITDA would have grown without the divestiture effect but did not quantify the bridge. Operating activities used $7.8 million of cash, compared with providing $25.1 million a year earlier, primarily because timing increased receivables and inventory. Company-defined non-GAAP free cash flow, operating cash flow less purchases of property, plant and equipment, was negative $10.9 million versus positive $18.0 million. Company-defined non-GAAP net debt, short-term and long-term debt less cash and cash equivalents, increased to $194.3 million from $185.4 million because cash declined more than borrowings. Hedge fund sentiment. The filings available so far reflect positions held before Methode Electronics, Inc. reported its fiscal 2027 first-quarter results and $400 million of lifetime program awards. Insider Monkey's database showed 23 hedge funds holding Methode Electronics, Inc. at the end of 2Q2026, up from 17 funds three months earlier. Conclusion. Demand and bookings are improving faster than reported profitability. Methode Electronics, Inc. has enough volume growth and program visibility to support an operating-recovery thesis, but the conversion is not yet visible in consolidated earnings. Award conversion, launch quality, adjusted EBITDA margin, and continued debt reduction will show whether the recovery is genuine.

Methode Electronics shares fell 8.8% after the company reported second-quarter earnings that missed analyst estimates for sales and adjusted EBITDA. The custom-engineered solutions manufacturer posted net sales of $265.4 million, up 10.4% year-over-year. However, adjusted EBITDA dropped to $13.7 million from $15.7 million, with a 5.2% margin missing expectations by 3.3%. The decline was attributed to one-time expenses, talent investments, and the dataMate divestiture, which offset operational gains and higher sales. Methode Electronics reaffirmed its full-year 2026 guidance, expecting revenue around $1.05 billion at the midpoint. Investors appeared to react negatively to weaker-than-expected margin performance despite the quarterly revenue upside.

Johnson Fistel, PLLP begins investigation on behalf of long-term shareholders of Methode Electronics, Inc. (MEI), Molina Healthcare, Inc. (MOH), Monolithic Power Systems, Inc. (MPWR), and NET Power Inc. (NPWR). SAN DIEGO, July 28, 2026 (GLOBE NEWSWIRE) - Johnson Fistel, PLLP is investigating potential claims on behalf of current, long-term shareholders of Methode Electronics, Inc. (NYSE: MEI), Molina Healthcare, Inc. (NYSE: MOH), Monolithic Power Systems, Inc. (NASDAQ: MPWR), and NET Power Inc. (NYSE: NPWR) against certain of their officers and directors for alleged breaches of fiduciary duty. Shareholders who have held shares continuously since prior to the dates listed below may have standing to seek corporate governance reforms focused on executive oversight, the return of funds to the Company, and a court-approved incentive award, at no cost to them. Methode Electronics, Inc. (NYSE: MEI) If you have held Methode Electronics shares continuously since prior to June 23, 2022, you may have standing to seek corporate governance reforms focused on executive oversight at Methode Electronics. To learn more, visit: https://www.johnsonfistel.com/investigations/methode-electronics-inc-2/ or contact Johnson Fistel, PLLP at [email protected] or (619) 814-4471. Complaint Allegations A previously filed securities class action complaint alleges that Defendants made false and/or misleading statements and/or failed to disclose material adverse facts, including that: (1) Methode lost highly skilled and experienced employees during the COVID-19 pandemic necessary to complete its transition from a low-mix, high-volume production model to a high-mix, low-volume model at its Monterrey facility; (2) Methode's efforts to replace General Motors center console production with diversified, specialized products for additional OEMs - particularly in the EV space - were plagued by production planning deficiencies, inventory shortages, vendor and supplier problems, and execution failures; (3) manufacturing systems at the Monterrey facility suffered from logistical defects, including improper coding, shipping errors, erroneous delivery times, deficient quality control, and failures to timely procure raw materials; (4) Methode fell substantially behind on the launch of new EV programs at the Monterrey facility, delaying revenue from new program awards; and (5) as a result, Methode was not on track to achieve 2023 diluted EPS guidance or its represented three-year 6% organic sales CAGR, and such estimates allegedly lacked a reasonable factual basis. Molina Healthcare, Inc. (NYSE: MOH) If you have held Molina Healthcare shares continuously since prior to February 5, 2025, you may have standing to seek corporate governance reforms focused on executive oversight at Molina Healthcare. To learn more, visit: https://www.johnsonfistel.com/investigations/molina-healthcare-moh/ or contact Johnson Fistel, PLLP at [email protected] or (619) 814-4471. Complaint Allegations A previously filed securities class action complaint alleges that Defendants made materially false and misleading statements and/or failed to disclose that Molina Healthcare, Inc.'s medical cost trend assumptions were materially inaccurate; that the Company was experiencing a dislocation between premium rates and actual medical cost trends, with medical costs rising faster than represented; that Molina's near-term growth and financial performance depended on unusually low utilization of services, including behavioral health, pharmacy, and inpatient and outpatient care; and that, as a result of these undisclosed conditions, Molina's fiscal year 2025 financial guidance allegedly lacked a reasonable basis and was substantially likely to be reduced, rendering Defendants' public statements materially misleading when made. Monolithic Power Systems, Inc. (NASDAQ: MPWR) If you have held Monolithic Power Systems shares continuously since prior to February 8, 2024, you may have standing to seek corporate governance reforms focused on executive oversight at Monolithic Power Systems. To learn more, visit: https://www.johnsonfistel.com/investigations/monolithic-power-systems-inc/ or contact Johnson Fistel, PLLP at [email protected] or (619) 814-4471. Complaint Allegations A previously filed securities class action complaint alleges that Defendants made false and/or misleading statements and/or failed to disclose that: (1) Monolithic's voltage regulator modules and power management integrated circuits were suffering from significant performance and quality control issues; (2) these defects negatively impacted the performance of certain products offered by Nvidia in which Monolithic's products were used; (3) Monolithic failed to adequately address and resolve known issues affecting the performance of the power management solutions supplied to Nvidia; (4) Monolithic's relationship with Nvidia - allegedly the Company's most important customer - had been irreparably damaged due to these performance and quality issues and Monolithic's alleged failure to remedy them; and (5) as a result, Monolithic was exposed to undisclosed risks of significant business, financial, and reputational harm. NET Power Inc. (NYSE: NPWR) If you have held NET Power shares continuously since prior to June 9, 2023, you may have standing to seek corporate governance reforms focused on executive oversight at NET Power. To learn more, visit: https://www.johnsonfistel.com/investigations/net-power/ or contact Johnson Fistel, PLLP at [email protected] or (619) 814-4471. Complaint Allegations A previously filed securities class action complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operations, and prospects. Specifically, the complaint alleges that Defendants failed to disclose that: (1) NET Power was unlikely to complete Project Permian on schedule and the project was likely to be significantly more expensive than represented due to, among other things, supply chain issues and site- and region-specific challenges; (2) projections regarding the time and capital needed to complete Project Permian were unrealistic; (3) the increased time and capital required were likely to have a significant negative impact on the Company's business and financial results; and (4) as a result, Defendants' public statements were materially false and misleading when made. About Johnson Fistel, PLLP | Top Law Firm, Securities Fraud, Investor Rights Johnson Fistel, PLLP is a nationally recognized shareholder rights law firm with offices in California, New York, Georgia, Idaho, and Colorado. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits and also represents foreign investors who have purchased securities on U.S. exchanges. Attorney advertising. Past results do not guarantee future outcomes. Services may be performed by attorneys in any of our offices. Johnson Fistel, PLLP has paid for the dissemination of this promotional communication, and Frank J. Johnson is the attorney responsible for its content. Legal Disclaimer: EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.