Slide 1: Fiscal 2020 Second Quarter Financial Results
December 5, 2019 FISCAL 2020 SECOND QUARTER FINANCIAL RESULTS
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: Use of Non-GAAP Financial Measures
Use of 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 measures. Reconciliation to the nearest GAAP measures of all non-GAAP measures includ
Slide 4: FY20 YTD Highlights
FY20 YTD Highlights1, 2 (Dollars in Millions except per share amount) Adjusted Net Net Income Adjusted Net Sales Net Income Income Per Per Share Income Share YoY YoY YoY YoY YoY FY 19 FY 20 FY 19 FY 20 FY 19 FY 20 FY 19 FY 20 FY 19 FY 20 Change Change Change Change Change YTD $487.4 $527.4 8.2% $38.
Slide 5: YTD Sales Drivers
YTD Sales Drivers (Dollars in Millions) Reduced Radio Remote Control, Incremental Impact from Sales from Effect of YTD FY19 Q2 Weaker Auto Busbar and YTD FY20 Q2 Sales from UAW labor New Weaker Euro Sales Sales Appliance Sales Grakon strike at GM Launches and RMB Product Volumes 5
Slide 6: FY20 Financial Guidance Reaffirmed
FY20 Financial Guidance Reaffirmed $150.3-164.3M $122-$136M $48-$54M Pre-Tax Income Free Cash Flow* CapEx $3.25-$3.55 18-21% $51-$54M EPS Income Tax Rate Depreciation and Amortization FY20 Revenue Guidance Adjusted Due to adverse impact of UAW labor strike at GM of $32M $1.10-1.13B Revenue * Net Inc
Slide 7: Cross-selling our technology
Cross-selling our technology Grakon is booking new interior ambient lighting solutions business in the commercial vehicle and electric vehicle market by leveraging our Pacific Insight’s RGB LED light engine technology. PI’s RGB and single color LED light engines were originally developed for the Aut
Slide 8: New Sensor Application – Tow Load Sensor [TLS] System
New Sensor Application – Tow Load Sensor [TLS] System Potential Benefits Ftongue ▪ Tongue Load ▪ Tow Load ▪ Driver Information Display Fsway ▪ Improved Ride and Handling While Ftow Towing 8
Slide 9: Q2 FY20 Highlights and Path for Growth
Q2 FY20 Highlights and Path for Growth Global Auto Sensor Growth Strong mix of products for SUVs and pickup Magneto-elastic and Eddy current sensing trucks Q2 YOY E-bike growth > 100% Limited exposure to domestic Chinese New application development automotive OEMs Operational Efficiencies New Busine
Slide 10: FY20 Q2 Highlights
FY20 Q2 Highlights1, 2 (Dollars in Millions except per share amount) Adjusted Net Net Income Adjusted Net Sales Net Income Income Per Per Share Income Share YoY YoY YoY YoY YoY FY 19 FY 20 FY 19 FY 20 FY 19 FY 20 FY 19 FY 20 FY 19 FY 20 Change Change Change Change Change Q2 $264.0 $257.2 (2.6%) $14.
Slide 11: Q2 FY20 Financial Results
Q2 FY20 Financial Results* Gross Margins Adjusted Gross Margins S&A Adjusted S&A • Benefit of Grakon sales Excludes: • Lower expense for initiatives to reduce Excludes: • Expense for initiatives to costs and improve operational • Expense for initiatives to Partially offset by: reduce costs and impro
Slide 12: YTD FY20 Financial Results
YTD FY20 Financial Results* Gross Margins Adjusted Gross Margins S&A Adjusted S&A • Benefit of Grakon sales Excludes: • Lower expense for initiatives to reduce Excludes: • Expense for initiatives to costs and improve operational • Expense for initiatives to Partially offset by: reduce costs and impr
Slide 13: Q2 FY20 Financial Results: EBITDA
Q2 FY20 Financial Results* (Dollars in Millions) EBITDA Adjusted EBITDA Excludes • Expense for initiatives to reduce costs and improve operational profitability • Acquisition-related expenses • Stock-based compensation accrual adjustments 49% (12%) $43.6 ** $50.0 $29.2 44.1 ** Q2 FY19 Q2 FY20 Q2 FY1
Slide 14: YTD FY20 Financial Results: EBITDA
YTD FY20 Financial Results* (Dollars in Millions) EBITDA Adjusted EBITDA Excludes • Expense for initiatives to reduce costs and improve operational profitability • Acquisition-related expenses • Stock-based compensation accrual adjustment 42% $93.9 ** 7% $94.4 ** $66.0 $88.2 YTD FY19 YTD FY20 YTD FY
Slide 15: Free Cash Flow (FCF)
Free Cash Flow (FCF)* (Dollars in Millions) 6 Months 6 Months Oct 27, 2018 Oct 26, 2019 Net Income $38.3 $52.1 YTD FY020 Depreciation and 18.4 23.7 FCF Amortization $49.0M CapEx (28.6) (26.8) FCF $28.1 $49.0 * See Appendix for reconciliation to GAAP 15
Slide 16: Deleveraging Since Grakon Acquisition in Q2 FY19
Deleveraging Since Grakon Acquisition in Q2 FY19 (Dollars in Millions) TTM Gross Debt / EBITDA Ratio* is 1.5 at end of Q2 FY20 Gross Debt and Net Debt $357.6 $302.9 $292.6 $283.1 $275.1 $246.7 $229.2 $209.4 $209.3 $179.5 Q2 FY19 Q2 FY19 Q3 FY19 Q3 FY19 Q4 FY19 Q4 FY19 Q1 FY20 Q1 FY20 Q2 FY20 Q2 FY20
Slide 17: Determining Projected FY20 EBITDA
Determining Projected FY20 EBITDA (Dollars in Millions) $29 $4 $221 $5 $11 $14 $17 $24 2Q Impact ($10M) 3Q & 4Q Replenishment $2M, Cost Reduction Actions $3M $155 FY19 EBITDA Grakon Auto & Laundry FY19 Initiatives to FY19 Acq & Incremental UAW labor strike Reduced FY20 Projected Performance Launches
Slide 18: Appendix: Non-GAAP Financial Measures
Appendix Non-GAAP Financial Measures To supplement the Company's financial statements presented in accordance with generally accepted accounting principles in the United States (“GAAP”), Methode uses Adjusted Net Income, Adjusted Earnings Per Share, Adjusted Income from Operations, Adjusted Gross Pr
Slide 19: Reconciliation, Three Months Ended October 26, 2019
Appendix METHODE ELECTRONICS, INC. AND SUBSIDIARIES ($ in millions, except per share data) Reconciliation of Non-GAAP Financial Measures for the Three Months Ended October 26, 2019 19
Slide 20: Reconciliation, Three Months Ended October 27, 2018
Appendix METHODE ELECTRONICS, INC. AND SUBSIDIARIES ($ in millions, except per share data) Reconciliation of Non-GAAP Financial Measures for the Three Months Ended October 27, 2018 20
Slide 21: Reconciliation, Six Months Ended October 26, 2019
Appendix METHODE ELECTRONICS, INC. AND SUBSIDIARIES ($ in millions, except per share data) Reconciliation of Non-GAAP Financial Measures for the Six Months Ended October 26, 2019 21
Slide 22: Reconciliation, Six Months Ended October 27, 2018
Appendix METHODE ELECTRONICS, INC. AND SUBSIDIARIES ($ in millions, except per share data) Reconciliation of Non-GAAP Financial Measures for the Six Months Ended October 27, 2018 22
Slide 23: Reconciliation of EBITDA and Adjusted EBITDA to Net Income
Appendix METHODE ELECTRONICS, INC. AND SUBSIDIARIES ($ in millions) Reconciliation of EBITDA and Adjusted EBITDA to Net Income 23
Slide 24: Reconciliation of Free Cash Flow to Net Income
Appendix METHODE ELECTRONICS, INC. AND SUBSIDIARIES ($ in millions) Reconciliation of Free Cash Flow to Net Income 24
Slide 25: Thank you
AETHODE ELECTRONICS Thank you