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METHODE ELECTRONICS INC — Interim / Quarterly Report 2000
Mar 15, 2000
33443_10-q_2000-03-15_60fda2ee-f844-4269-b7a2-00ac61e4570c.zip
Interim / Quarterly Report
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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| (Mark One) (X) | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 for the quarterly period ended January 31, 2000 |
|---|---|
| or | |
| ( ) | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. |
end of user-specified TAGGED TABLE
Commission file number 0-2816
METHODE ELECTRONICS, INC.
(Exact name of registrant as specified in its charter.)
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| Delaware | 36-2090085 |
|---|---|
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| 7444 West Wilson Avenue, Harwood Heights, Illinois (Address of principal executive offices) | 60656 (Zip Code) |
end of user-specified TAGGED TABLE
(Registrant's telephone number, including area code) (708) 867-9600
None (Former name, former address, former fiscal year, if changed since last report)
At March 10, 2000, Registrant had 34,422,483 shares of Class A Common Stock and 1,147,860 shares of Class B Common Stock outstanding.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such report(s)), and (2) has been subject to such filing requirements for the past 90 days.
Yes X No
ZEQ.=1,SEQ=1,EFW="2007432",CP="METHODE ELECTRONICS, INC.",DN="1",CHK=198045,FOLIO=blank,FILE='DISK021:[00CHI9.00CHI1959]DE1959A.;17',USER='MWEINST',CD='15-MAR-2000;15:08 Generated by Merrill Corporation (www.merrillcorp.com)
INDEX METHODE ELECTRONICS, INC. AND SUBSIDIARIES
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| PART I. FINANCIAL INFORMATION | |
|---|---|
| Item 1. | Financial Statements (unaudited) |
| Condensed consolidated balance sheets January 31, 2000 and April 30, 1999 | |
| Condensed consolidated statements of incomethree months and nine months ended January 31, 2000 and 1999 | |
| Condensed consolidated statements of cash flowsnine months ended January 31, 2000 and 1999 | |
| Notes to condensed consolidated financial statementsJanuary 31, 2000 | |
| Item 2. | Management's discussion and analysis of financial condition and results of operations |
| PART II. OTHER INFORMATION | |
| Item 6. | Exhibits and reports on Form 8-K |
| SIGNATURES |
end of user-specified TAGGED TABLE
2
ZEQ.=1,SEQ=2,EFW="2007432",CP="METHODE ELECTRONICS, INC.",DN="1",CHK=967363,FOLIO=2,FILE='DISK021:[00CHI9.00CHI1959]DG1959A.;5',USER='MWEINST',CD='15-MAR-2000;15:13 Generated by Merrill Corporation (www.merrillcorp.com)
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS CONDENSED CONSOLIDATED BALANCE SHEETS METHODE ELECTRONICS, INC. AND SUBSIDIARIES
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| January 31, 2000 | ||||
|---|---|---|---|---|
| (Unaudited) | ||||
| ASSETS | ||||
| CURRENT ASSETS | ||||
| Cash and cash equivalents | $ 24,976,816 | $ | 22,764,887 | |
| Accounts receivablenet | 71,516,398 | 88,194,471 | ||
| Inventories: | ||||
| Finished products | 8,623,973 | 9,877,422 | ||
| Work in process | 28,490,226 | 25,180,203 | ||
| Materials | 21,167,164 | 14,157,216 | ||
| 58,281,363 | 49,214,841 | |||
| Current deferred income taxes | 6,439,000 | 5,239,000 | ||
| Prepaid expenses | 2,985,321 | 5,596,373 | ||
| TOTAL CURRENT ASSETS | 164,198,898 | 171,009,572 | ||
| PROPERTY, PLANT AND EQUIPMENT | 225,747,812 | 217,183,692 | ||
| Less allowance for depreciation | 129,283,386 | 126,284,573 | ||
| 96,464,426 | 90,899,119 | |||
| GOODWILLnet | 48,706,527 | 39,770,435 | ||
| INTANGIBLE BENEFIT PLAN ASSET | 1,097,798 | 1,598,597 | ||
| OTHER ASSETS | 13,859,640 | 13,344,897 | ||
| $ 324,327,289 | $ | 316,622,620 | ||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
| CURRENT LIABILITIES | ||||
| Accounts and notes payable | $ 25,696,837 | $ | 30,826,887 | |
| Other current liabilities | 22,316,954 | 26,244,165 | ||
| TOTAL CURRENT LIABILITIES | 48,013,791 | 57,071,052 | ||
| OTHER LIABILITIES | 2,459,094 | 2,918,650 | ||
| DEFERRED COMPENSATION | 7,893,442 | 7,320,313 | ||
| ACCUMULATED BENEFIT PLAN OBLIGATION | | 837,939 | ||
| SHAREHOLDERS' EQUITY | ||||
| Common Stock | 17,983,655 | 17,909,545 | ||
| Paid in capital | 26,404,457 | 23,066,837 | ||
| Retained earnings | 231,000,594 | 215,116,544 | ||
| Other shareholders' equity | (9,427,744 | ) | (7,618,260 | ) |
| 265,960,962 | 248,474,666 | |||
| $ 324,327,289 | $ | 316,622,620 |
end of user-specified TAGGED TABLE
See notes to condensed consolidated financial statements.
3
ZEQ.=1,SEQ=3,EFW="2007432",CP="METHODE ELECTRONICS, INC.",DN="1",CHK=443308,FOLIO=3,FILE='DISK021:[00CHI9.00CHI1959]DH1959A.;6',USER='MWEINST',CD='15-MAR-2000;15:16 Generated by Merrill Corporation (www.merrillcorp.com)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
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| Three Months Ended January 31, — 2000 | 1999 | Nine Months Ended January 31, — 2000 | 1999 | |
|---|---|---|---|---|
| INCOME: | ||||
| Net sales | $ 102,022,877 | $ 96,387,118 | $ 304,990,428 | $ 292,224,430 |
| Other | 1,227,432 | 834,098 | 4,798,092 | 3,142,685 |
| Total | 103,250,309 | 97,221,216 | 309,788,520 | 295,367,115 |
| COSTS AND EXPENSES: | ||||
| Cost of products sold | 78,027,506 | 72,976,151 | 232,398,815 | 219,379,198 |
| Selling and administrative expenses | 13,820,028 | 13,367,641 | 44,619,722 | 39,365,348 |
| Total | 91,847,534 | 86,343,792 | 277,018,537 | 258,744,546 |
| Income before income taxes | 11,402,775 | 10,877,424 | 32,769,983 | 36,622,569 |
| Provision for income taxes | 4,050,000 | 3,755,000 | 11,560,000 | 12,635,000 |
| NET INCOME | $ 7,352,775 | $ 7,122,424 | $ 21,209,983 | $ 23,987,569 |
| Basic and diluted earnings per Common Share | $ 0.21 | $ 0.20 | $ 0.60 | $ 0.68 |
| Cash dividends per Common Share | $ 0.05 | $ 0.05 | $ 0.15 | $ 0.15 |
| Weighted average number of Common Shares outstanding: | ||||
| Basic | 35,316,000 | 35,336,000 | 35,288,000 | 35,344,000 |
| Diluted | 35,586,000 | 35,445,000 | 35,476,000 | 35,425,000 |
end of user-specified TAGGED TABLE
See notes to condensed consolidated financial statements.
4
ZEQ.=1,SEQ=4,EFW="2007432",CP="METHODE ELECTRONICS, INC.",DN="1",CHK=812791,FOLIO=4,FILE='DISK021:[00CHI9.00CHI1959]DI1959A.;8',USER='MWEINST',CD='15-MAR-2000;15:18 Generated by Merrill Corporation (www.merrillcorp.com)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
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| Nine Months Ended January 31, — 2000 | 1999 | |||
|---|---|---|---|---|
| OPERATING ACTIVITIES | ||||
| Net income | $ 21,209,983 | $ | 23,987,569 | |
| Provision for depreciation and amortization | 14,432,645 | 14,028,329 | ||
| Changes in operating assets and liabilities | 2,705,445 | (16,920,108 | ) | |
| Other | 3,482,420 | 1,794,522 | ||
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 41,830,493 | 22,890,312 | ||
| INVESTING ACTIVITIES | ||||
| Purchases of property, plant and equipment | (19,715,399 | ) | (15,509,754 | ) |
| Sale of assets | 3,529,019 | 1,294,560 | ||
| Acquisitions | (12,962,606 | ) | (1,698,789 | ) |
| Other | (3,577,857 | ) | (3,172,946 | ) |
| NET CASH USED IN INVESTING ACTIVITIES | (32,726,843 | ) | (19,086,929 | ) |
| FINANCING ACTIVITIES | ||||
| Dividends | (5,325,933 | ) | (5,332,635 | ) |
| Other | (1,565,788 | ) | 2,578,586 | |
| NET CASH USED IN FINANCING ACTIVITIES | (6,891,721 | ) | (2,754,049 | ) |
| INCREASE IN CASH AND CASH EQUIVALENTS | 2,211,929 | 1,049,334 | ||
| Cash and cash equivalents at beginning of period | 22,764,887 | 24,178,868 | ||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 24,976,816 | $ | 25,228,202 |
end of user-specified TAGGED TABLE
See notes to condensed consolidated financial statements.
5
ZEQ.=1,SEQ=5,EFW="2007432",CP="METHODE ELECTRONICS, INC.",DN="1",CHK=656761,FOLIO=5,FILE='DISK021:[00CHI9.00CHI1959]DJ1959A.;5',USER='MWEINST',CD='15-MAR-2000;15:08 Generated by Merrill Corporation (www.merrillcorp.com)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
METHODE ELECTRONICS, INC. AND SUBSIDIARIES
January 31, 2000
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month and nine-month periods ended January 31, 2000 are not necessarily indicative of the results that may be expected for the year ending April 30, 2000. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended April 30, 1999.
Comprehensive income consists of net income and foreign currency translation adjustments and totaled $5,204,000 and $6,171,000 for the third quarters of fiscal 2000 and 1999, and $19,608,000 and $23,264,000 for the nine months ended January 31, 2000 and 1999.
2. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per share:
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| Three Months Ended January 31, — 2000 | 1999 | Nine Months Ended January 31, — 2000 | 1999 | |
|---|---|---|---|---|
| Numerator-net income | $ 7,352,775 | $ 7,122,424 | $ 21,209,983 | $ 23,987,569 |
| Denominator: | ||||
| Denominator for basic earnings per share Weighted-average shares outstanding | 35,316,000 | 35,336,000 | 35,288,000 | 35,344,000 |
| Dilutive potential Common Shares-Employee stock options and stock awards | 270,000 | 109,000 | 188,000 | 81,000 |
| Denominator for diluted earnings per share-adjusted weighted-average shares and assumed conversions | 35,586,000 | 35,445,000 | 35,476,000 | 35,425,000 |
| Basic and diluted earnings per share | $ 0.21 | $ 0.20 | $ 0.60 | $ 0.68 |
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Options to purchase 35,000 shares of Common Stock at a weighted-average option price of $32.60 per share were not included in the computation of diluted earnings per share for the three and nine-month periods ended January 31, 2000 because the option exercise price was greater than the average market price of the Common Shares and, therefore, the effect would be antidilutive.
3. SEGMENT INFORMATION
The Company is managed on a technology product basis with those technology segments being Electronic, Optical and Other. The business units whose results are identified in the Electronic segment principally employ electronic processes to connect, control and convey signals. The business units whose results are identified in the Optical segment principally employ light to convert and convey electronic signals. The Company's businesses that manufacture multi-layer printed circuit board and bus systems as well as its independent test laboratories are included in the Other segment. The Company exited the printed circuit board businesses at the end of the second quarter of fiscal 2000.
6
ZEQ.=1,SEQ=6,EFW="2007432",CP="METHODE ELECTRONICS, INC.",DN="1",CHK=689850,FOLIO=6,FILE='DISK021:[00CHI9.00CHI1959]DL1959A.;8',USER='MWEINST',CD='15-MAR-2000;15:08
The table below presents information about the Company's reportable segments:
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| Three Months Ended January 31, 2000 — Electronic | Optical | Other | Eliminations | Consolidated | |||
|---|---|---|---|---|---|---|---|
| Net sales to unaffiliated customers | $ 75,413,000 | $ 21,301,000 | $ 5,309,000 | $ 102,023,000 | |||
| Transfers between technology segments | 19,000 | 567,000 | 211,000 | $ (797,000 | ) | | |
| Total net sales | $ 75,432,000 | $ 21,868,000 | $ 5,520,000 | $ (797,000 | ) | $ 102,023,000 | |
| Income before income taxes | $ 12,794,000 | $ 2,751,000 | 655,000 | $ 16,200,000 | |||
| Corporate expenses | (4,797,000 | ) | |||||
| Total income before income taxes | $ 11,403,000 |
end of user-specified TAGGED TABLE User-specified TAGGED TABLE
| Three Months Ended January 31, 1999 — Electronic | Optical | Other | Eliminations | Consolidated | |||
|---|---|---|---|---|---|---|---|
| Net sales to unaffiliated customers | $ 76,068,000 | $ 13,116,000 | $ 7,203,000 | $ 96,387,000 | |||
| Transfers between technology segments | 1,000 | 609,000 | 163,000 | $ (773,000 | ) | | |
| Total net sales | $ 76,069,000 | $ 13,725,000 | $ 7,366,000 | $ (773,000 | ) | $ 96,387,000 | |
| Income (loss) before income taxes | $ 12,459,000 | $ 2,265,000 | $ (399,000 | ) | $ 14,325,000 | ||
| Corporate expenses | (3,448,000 | ) | |||||
| Total income before income taxes | $ 10,877,000 |
end of user-specified TAGGED TABLE User-specified TAGGED TABLE
| Nine Months Ended January 31, 2000 — Electronic | Optical | Other | Eliminations | Consolidated | |||
|---|---|---|---|---|---|---|---|
| Net sales to unaffiliated customers | $ 226,650,000 | $ 58,118,000 | $ 20,222,000 | $ 304,990,000 | |||
| Transfers between technology segments | 39,000 | 1,585,000 | 759,000 | $ (2,383,000 | ) | | |
| Total net sales | $ 226,689,000 | $ 59,703,000 | $ 20,981,000 | $ (2,383,000 | ) | $ 304,990,000 | |
| Income before income taxes | $ 35,574,000 | $ 9,356,000 | $ 565,000 | $ 45,495,000 | |||
| Corporate expenses | (12,725,000 | ) | |||||
| Total income before income taxes | $ 32,770,000 |
end of user-specified TAGGED TABLE User-specified TAGGED TABLE
| Nine Months Ended January 31, 1999 — Electronic | Optical | Other | Eliminations | Consolidated | |||
|---|---|---|---|---|---|---|---|
| Net sales to unaffiliated customers | $ 230,144,000 | $ 39,359,000 | $ 22,721,000 | $ 292,224,000 | |||
| Transfers between technology segments | 3,000 | 1,402,000 | 482,000 | $ (1,887,000 | ) | | |
| Total net sales | $ 230,147,000 | $ 40,761,000 | $ 23,203,000 | $ (1,887,000 | ) | $ 292,224,000 | |
| Income (loss) before income taxes | $ 39,562,000 | $ 7,085,000 | $ (617,000 | ) | $ 46,030,000 | ||
| Corporate expenses | (9,407,000 | ) | |||||
| Total income before income taxes | $ 36,623,000 |
end of user-specified TAGGED TABLE
7
ZEQ.=2,SEQ=7,EFW="2007432",CP="METHODE ELECTRONICS, INC.",DN="1",CHK=722901,FOLIO=7,FILE='DISK021:[00CHI9.00CHI1959]DL1959A.;8',USER='MWEINST',CD='15-MAR-2000;15:08
4. ACQUISITIONS
On December 30, 1999 Methode purchased for approximately $13,000,000 in cash, including costs of acquisition, substantially all the assets of the Optoelectronics business segment of Spire Corporation. The excess of purchase price over assets acquired of $9,330,000, is being amortized on a straight-line basis over 25 years.
5. RECLASSIFICATIONS
Certain prior year amounts have been reclassified to conform to the current year presentation.
8
ZEQ.=3,SEQ=8,EFW="2007432",CP="METHODE ELECTRONICS, INC.",DN="1",CHK=634291,FOLIO=8,FILE='DISK021:[00CHI9.00CHI1959]DL1959A.;8',USER='MWEINST',CD='15-MAR-2000;15:08 Generated by Merrill Corporation (www.merrillcorp.com)
2. MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
Consolidated net sales for the third quarter of fiscal 2000 increased 6% to $102,023,000 from $96,387,000 a year ago. Consolidated net sales for the nine-month period ended January 31, 2000 increased 4% over the same period a year ago to $304,990,000 from $292,224,000.
Sales of the Electronic segment represented 74% of consolidated sales in the third quarter and first nine months of fiscal 2000 compared with 79% in both periods of fiscal 1999. Electronic segment sales decreased 1% during the quarter from the prior year third quarter and 2% for the nine-month period compared to last year. Sales to the automotive industry increased 4% in the third quarter and were up 6% for the nine-month period compared to the comparable periods last year. Sales to the automotive industry represented 68% of Electronic segment sales in the quarter and the nine-month period compared with 64% and 63% in the comparable periods last year. Sales of the dataMate and various other electrical and electronic connector and cable assembly product lines were off 10% for the quarter and 15% for the nine-month period compared to the prior year.
Sales of the Optical segment represented 21% of consolidated sales in the third quarter and 19% in the first nine months of fiscal 2000 compared with 14% and 13% in the comparable periods of fiscal 1999. Optical segment sales increased 62% and 48% in the third quarter and nine-month period compared with the prior year comparable periods. Sales of optical transceivers increased about 120% for the quarter and 71% for the nine-month period compared to last year. Sales of optical transceivers represented 60% and 59% of Optical segment sales in the quarter and nine-month period ended January 31, 2000 compared to 44% and 51% in the prior year.
Sales of Other products (chiefly current carrying devices and printed circuit boards) decreased 26% in the current quarter and 11% for the nine-month period compared with last year due to the closing of the Company's printed circuit and related businesses at the end of September 1999. Last year this segment included sales of the closed businesses of $3,277,000 and $10,753,000 in the third quarter and nine-month period compared to none in the current quarter and $4,950,000 in the current nine-month period.
Other income consisted primarily of earnings from the Company's automotive joint venture, interest income from short-term investments, royalties and license fees. The increase in fiscal 2000 was largely due to $1,163,000 of income related to the licensing program of the Company's optoelectronic patent portfolio.
Cost of products sold as a percentage of sales for the third quarter increased to 76.5% compared with the year-ago period of 75.7%. For the nine-month period ended January 31, 2000 this percentage increased to 76.2% from 75.1% for the same period last year. Gross margins declined as the result of continued difficulties with the consolidation and reorganization of two electrical cable assembly operations and sales volume declines in dataMate products and at our Singapore connector operation. Gross margins for the nine-month period also were adversely affected by the winding-down of the printed circuit businesses.
Selling and administrative expenses as a percentage of sales were 13.5% and 14.6% in the current quarter and nine-month period of fiscal 2000, compared with 13.9% and 13.5% for the comparable periods last year. During the second quarter of 2000 the Company recorded a $3,000,000 provision for bad debts relating to the bankruptcy of an automotive sub-contractor, a relationship directed by a large OEM customer. Excluding this special charge, selling and administrative expenses for the nine-month period were comparable to last year.
The effective tax rate was 35.5% in the third quarter and 35.3% for the nine-month period of fiscal 2000 compared with 34.5% in both the third quarter and nine-month period of fiscal 1999. Lower tax rates on results from foreign operations reduce the Company's effective tax rate below the combined statutory federal and state income tax rate.
9
ZEQ.=1,SEQ=9,EFW="2007432",CP="METHODE ELECTRONICS, INC.",DN="1",CHK=573903,FOLIO=9,FILE='DISK021:[00CHI9.00CHI1959]DM1959A.;6',USER='MWEINST',CD='15-MAR-2000;15:08
Financial Conditions, Liquidity and Capital Resources
Net cash provided by operating activities was $41,830,000 in the first nine months of fiscal 2000, up substantially from the $22,890,000 provided during the year-ago period. The increase in cash provided was chiefly due to accelerated collection of accounts receivable that included substantial amounts related to automotive tooling programs.
Depreciation and amortization expense was $14,433,000 in fiscal 2000 compared with $14,028,000 in fiscal 1999, with capital additions of $19,715,000 and $15,510,000, respectively. Fiscal 2000 capital additions include the purchase of a 15,000 square foot clean room oriented facility to house the Company's Methode Communication Modules subsidiary. It is presently expected that fixed asset additions for fiscal 2000 will approach $27,000,000 and will be financed with internally generated funds.
During the third quarter of fiscal 2000, the Company purchased selected assets of Spire Corporation's optoelectronic business segment for cash of approximately $13,000,000. This acquisition provides the Company with established capabilities in research and development into formulating optoelectronically active semiconductors for expanded bandwidth applications. This acquisition was funded by internally generated funds.
On February 23, 2000 the Company announced its intention to carve out a portion of its Optical segment into a new publicly traded company. It is expected that the new optical products company will offer approximately 15% of its Common Stock in an initial public offering during the first half of fiscal 2000. Methode expects to distribute the remaining shares to its stockholders in a tax-free transaction at a later date. The Company intends to accomplish significant business objectives through the initial public offering and spin-off. Although the intended use of proceeds will not be finalized for some time, Methode believes that the new optical products company will receive the majority if not all of the proceeds if the public offering is completed.
An initial public offering of the common stock of the new optical products company is subject to, among other things, the development of definitive separation agreements, the preparation and filing of a registration statement with the Securities and Exchange Commission and market conditions. The spin-off will be subject to, among other things, the receipt of a favorable Internal Revenue Service ruling that the separation will be tax-free to Methode and its stockholders for U.S. federal income tax purposes. No offer of securities in the new optical products company will be made except by means of a prospectus. While an initial public offering of common stock of the new optical products company is planned for the first half of fiscal 2001 and a spin-off at a later date, it should be noted that due to numerous uncertainties involved in these matters, there can be no assurances that an initial public offering or full separation will be completed as described or within the time periods outlined above.
Impact of Year 2000
In prior years, the Company discussed the nature and progress of its plans to become Year 2000 ready. In late calendar 1999, the Company completed its remediation and testing of systems. As a result of those planning and implementation efforts, the Company experienced no significant disruptions in mission critical information technology and non-information technology systems and believes those systems successfully responded to the Year 2000 date change. The Company expensed approximately $500,000 in connection with remediating its systems. The Company is not aware of any material problems resulting from Year 2000 issues, either with its products, its internal systems, or the products and services of third parties. The Company will continue to monitor its mission critical computer applications and those of its suppliers and vendors throughout the year 2000 to ensure that any latent Year 2000 matters that may arise are addressed promptly.
10
ZEQ.=2,SEQ=10,EFW="2007432",CP="METHODE ELECTRONICS, INC.",DN="1",CHK=33521,FOLIO=10,FILE='DISK021:[00CHI9.00CHI1959]DM1959A.;6',USER='MWEINST',CD='15-MAR-2000;15:08
Euro Conversion
On January 1, 1999, eleven member countries of the European Union established fixed conversion rates between their existing currencies ("legal currencies") and one common currency, the Euro. The Euro is now trading on currency exchanges and may be used in certain transactions such as electronic payments. Beginning in January 2002, new Euro-denominated notes and coins will be used, and legacy currencies will be withdrawn from circulation. The conversion to the Euro has eliminated currency exchange rate risk for transactions between the member countries, which for the Company primarily consists of sales to certain customers and payments to certain suppliers. The Company is currently addressing the issues involved with the new currency, which include converting information technology systems, recalculating currency risk, and revising processes for preparing accounting and taxation records. Based on the work completed so far, the Company does not believe the Euro conversion will have a significant impact on the results of its operations or cash flows.
Cautionary Statement
Certain statements in this report are forward-looking statements that are subject to certain risks and uncertainties. The Company's business is highly dependent upon specific makes and models of automobiles. Therefore, the Company's financial results will be subject to many of the same risks that apply to the automotive industry, such as general economic conditions, interest rates and consumer spending patterns. A significant portion of the balance of the Company's business relates to the computer and telecommunication industries which are subject to many of the same risks facing the automotive industry as well as fast-moving technological change. Other factors which may result in materially different results for future periods include actual growth in the Company's various markets; operating costs; currency exchange rates and devaluations; delays in development, production and marketing of new products; and other factors set forth from time to time in the Company's Form 10-K and other reports filed with the Securities and Exchange Commission. Any of these factors could cause the Company's actual results to differ materially from those described in the forward-looking statements. The forward-looking statements in this report are intended to be subject to the safe harbor protection provided under the securities law.
11
ZEQ.=3,SEQ=11,EFW="2007432",CP="METHODE ELECTRONICS, INC.",DN="1",CHK=386332,FOLIO=11,FILE='DISK021:[00CHI9.00CHI1959]DM1959A.;6',USER='MWEINST',CD='15-MAR-2000;15:08 Generated by Merrill Corporation (www.merrillcorp.com)
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
INDEX TO EXHIBITS
User-specified TAGGED TABLE
| Exhibit Number | Description |
|---|---|
| 3.1 | Certificate of Incorporation of Registrant, as amended and currently in effect(1) |
| 3.2 | By-Laws of Registrant, as amended and currently in effect(1) |
| 4.1 | Article Fourth of Certificate of Incorporation of Registrant, as amended and currently in effect (included in Exhibit 3.1) |
| 10.1 | Methode Electronics, Inc. Employee Stock Ownership Plan dated February 24,1977(2)* |
| 10.2 | Methode Electronics, Inc. Employee Stock Ownership Plan and Trust Amendment No. 1(2)* |
| 10.3 | Methode Electronics, Inc. Employee Stock Ownership Trust(2)* |
| 10.4 | Methode Electronics, Inc. Employee Stock Ownership Trust-Amendment No. 1(2)* |
| 10.5 | Methode Electronics, Inc. Incentive Stock Award Plan(3)* |
| 10.6 | Methode Electronics Inc. Supplemental Executive Benefit Plan(4)* |
| 10.7 | Methode Electronics. Inc. Managerial Bonus and Matching Bonus Plan (also referred to as the Longevity Contingent Bonus Program) (4)* |
| 10.8 | Methode Electronics, Inc. Capital Accumulation Plan(4)* |
| 10.9 | Incentive Stock Award Plan for Non-Employee Directors(5)* |
| 10.10 | Methode Electronics, Inc. 401(k) Savings Plan(5)* |
| 10.11 | Methode Electronics, Inc. 401(k) Savings Trust(5)* |
| 10.12 | Methode Electronics, Inc. Electronic Controls Division Cash and Class A Common Stock Bonus Plan(6)* |
| 10.13 | Methode Electronics, Inc. 1997 Stock Plan (7) |
| 27 | Financial Data Schedules 14 |
end of user-specified TAGGED TABLE (1) Previously filed with Registrant's Form S-3 Registration Statement No. 33-61940 filed April 30, 1993 and incorporated herein by reference. (2) Previously filed with Registrant's S-8 Registration Statement No. 2-60613 and incorporated herein by reference. (3) Previously filed with Registrant's Registration Statement No. 2-92902 filed August 23, 1984, and incorporated herein by reference.
12
ZEQ.=1,SEQ=12,EFW="2007432",CP="METHODE ELECTRONICS, INC.",DN="1",CHK=655150,FOLIO=12,FILE='DISK021:[00CHI9.00CHI1959]DN1959A.;9',USER='MWEINST',CD='15-MAR-2000;15:20
(4) Previously filed with Registrant's Form 10-Q for three months ended January 31, 1994, and incorporated herein by reference. (5) Previously filed with Registrant's Form 10-K for the year ended April 30, 1994, and incorporated herein by reference. (6) Previously filed with Registrant's S-8 Registration Statement No. 33-88036 and incorporated herein by reference. (7) Previously filed with Registrant's Registration Statement No. 333-49671 and incorporated herein by reference. * Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Report on Form 10-Q pursuant to Item 6 of Form 10-Q.
13
ZEQ.=2,SEQ=13,EFW="2007432",CP="METHODE ELECTRONICS, INC.",DN="1",CHK=691926,FOLIO=13,FILE='DISK021:[00CHI9.00CHI1959]DN1959A.;9',USER='MWEINST',CD='15-MAR-2000;15:20
Generated by Merrill Corporation (www.merrillcorp.com)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Dated: March 15, 2000
14
ZEQ.=1,SEQ=14,EFW="2007432",CP="METHODE ELECTRONICS, INC.",DN="1",CHK=636463,FOLIO=14,FILE='DISK021:[00CHI9.00CHI1959]DO1959A.;6',USER='MWEINST',CD='15-MAR-2000;15:08 Generated by Merrill Corporation (www.merrillcorp.com) SEQ=,FILE='QUICKLINK',USER=SLYUBOM,SEQ=,EFW="2007432",CP="METHODE ELECTRONICS, INC.",DN="1"