Slide 1: Fiscal 2021 Second Quarter Financial Results
FISCAL 2021 SECOND QUARTER FINANCIAL RESULTS December 3, 2020
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains certain forward-looking statements, which reflect management's expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements are subject to the safe harbor protection provide
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures To supplement the company's financial statements presented in accordance with generally accepted accounting principles in the United States (“GAAP”), Methode uses certain non-GAAP financial measures, such as EBITDA, Free Cash Flow and Net Debt. Reconciliation to the neare
Slide 4: Q2 Financial Highlights
FY21 Q2 Financial Highlights (Dollars in millions except per share amount) Diluted Earnings Net Sales Net Income Per Share 17% $300.8 60% $1.01 $257.2 62% $38.6 $0.63 $23.8 FY20 Q2* FY21 Q2 FY20 Q2* FY21 Q2 FY20 Q2* FY21 Q2 * Includes impact of UAW strike at GM 4
Slide 5: Q2 Business Highlights
FY21 Q2 Business Highlights Quarterly Performance Electric Vehicle Growth Record Sales of $301 Million Over 9% of Q2 Consolidated Sales Record Income from Operations of $45 Million Continued Strength in EV Awards Income from Operations Margin of 15% Leveraging UI, Power, and LED Lighting Solutions G
Slide 6: Q2 Select Business Awards
FY21 Q2 Select Business Awards (Expected annual sales, dollars in millions) Electric & Hybrid Electric Vehicles • Busbar for U.S.-Asian Auto OEM JV $14.5 • LED Ambient Lighting for U.S. Auto OEM $9.7 • LED Ambient & Functional Lighting for European Auto OEM $2.0 • LED Overhead Lamp for Chinese Auto
Slide 7: Strategic Priorities
Strategic Priorities Customer & Program Diversification ▪ Capitalize on Exposure to Trends in EV, Commercial Vehicle, & Cloud Computing ▪ Leverage Power, LED Lighting, and Sensor Technology across Customer Base ▪ Increase Investment in Field Sales, Process, and Incentives Organic & Inorganic Growth
Slide 8: Electric Vehicle Solutions
Electric Vehicle Solutions Power Solutions Ambient & Functional Lighting Busbars for Inverter, Busbars for Battery Overhead Consoles Turn Signal w/ Camera Charger, & e-Motor Pack Connections Connections Battery Disconnect HV Power Connectors Interior LED Modules Exterior LED Lighting Battery Pack Ch
Slide 9: Increased Content Per Vehicle
Increased Content Per Vehicle EV Expected to be HSD % of FY21 Total Sales, Growing to 10%+ in FY22 Internal Combustion Vehicles Battery & Hybrid Electric Vehicles • User Interface • User Interface • Interior & Exterior Lighting • Interior & Exterior Lighting • Sensors • Sensors • e-Powertrain 9 Tran
Slide 10: FY25 Long-Term Incentive Plan EBITDA Target
FY25 Long-Term Incentive Plan EBITDA Target EBITDA* EBITDA Growth Drivers ($ in millions) $300 + Organic Sales Growth $207 + Operational Improvements + Acquisitions $144 − End-of-Life Programs − Business Exits FY15 FY20 FY25 Target * See Appendix for reconciliation to GAAP In September 2020, our exe
Slide 11: Financial Results
Q@AETHODE ELECTRONICS Financial Results
Slide 12: Q2 Financial Highlights
FY21 Q2 Financial Highlights (Dollars in millions except per share amount) Diluted Earnings Net Sales Net Income Per Share 17% $300.8 60% $1.01 $257.2 62% $38.6 $0.63 $23.8 FY20 Q2* FY21 Q2 FY20 Q2* FY21 Q2 FY20 Q2* FY21 Q2 * Includes impact of UAW strike at GM 12
Slide 13: Q2 Financial Results: Gross Margins and Sales & Administrative
FY21 Q2 Financial Results Gross Margins Sales & Administrative • Higher sales in all segments increased • Lower compensation, stock-based compensation overhead coverage and travel expenses Partially offset by: Partially offset by: • Restructuring costs of $2.7 million to reduce • Restructuring costs
Slide 14: Q2 Financial Results: Net Income and EBITDA
FY21 Q2 Financial Results (Dollars in millions) Net Income EBITDA* • Higher sales in all segments • Higher income from operations • Lower compensation, stock-based compensation • Higher other income and travel expenses • Government COVID-19 assistance of $2.8 million ($3.3 million pre-tax) Partially
Slide 15: Deleveraging Since Grakon Acquisition in FY19 Q2
Deleveraging Since Grakon Acquisition in FY19 Q2 (Dollars in millions) Gross and Net Debt $357.6 $352.1 $349.8 $347.6 $302.9 $292.6 $283.1 $275.1 $246.7 $257.0 $229.2 $209.4 $209.3 $179.5 $177.1 $134.8 $138.8 $105.3 FY19 FY19 FY19 FY19 FY19 FY19 FY20 FY20 FY20 FY20 FY20 FY20 FY20 FY20 FY21 FY21 FY21
Slide 16: Q2 Free Cash Flow
FY21 Q2 Free Cash Flow (Dollars in millions) FY20 Q2 FY21 Q2 Cash Provided by FY21 Q2 $48.7 $40.3 Operating Activities Free Cash Flow CapEx ($13.6) ($3.6) $36.7 Free Cash Flow $35.1 $36.7 16
Slide 17: Q3 Guidance
FY21 Q3 Guidance • Net sales for FY21 Q3 of $265 - $285 million • FY21 Q3 is a 13-week quarter, FY20 Q3 was a 14-week quarter • Diluted earnings per share for FY21 Q3 of $0.69 - $0.85 • Subject to disruption at any time due to a variety of risk factors including the ongoing COVID-19 pandemic situati
Slide 18: Thank You
AETHODE ELECTRONICS Thank You
Slide 19: Appendix: Reconciliation of Non-GAAP Measures
fA Appendix THOSE METHODE ELECTRONICS, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES (Unaudited) (in millions) Three Months Ended ‘Six Months Ended ‘October 31, ‘October 26, ‘October 31, October 26, 2020 2019 2020 2019 EBITDA: Net Income $ 386 $ BS $ 393 $ 521 Income Tax Expense 76 52 25
Slide 20: Appendix: Reconciliation of Non-GAAP Measures
Appendix METHODE ELECTRONICS, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES (Unaudited) (in millions) FY15 FY16 FY17 FY18 FY19 FY20 EBITDA: Net Income $ 101.1 $ 84.6 $ 92.9 $ 57.2 $ 91.6 $ 123.4 Income Tax Expense 19.8 26.3 23.0 66.6 12.0 25.3 Interest (Income) Expense, Net (0.7) (0.7) (
Slide 21: Appendix: Total Gross and Net Debt/EBITDA
Appendix TOTAL GROSS DEBT/EBITDA (Dollars in Millions) Net Income Income Tax Expense Interest Expense, Net Amortization of Intangibles Depreciation EBITDA Short-term Debt Long-term Debt Gross Debt Total Gross Deb/EBITDA TOTAL NET DEBT/EBITDA (Dollars in Millions) Net Income Income Tax Expense Intere