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- **Sequential Growth**: Q2 sales +3%, EBITDA +12% vs. prior quarter, despite $10M inventory build for data centers.
- **Operational Turnaround**: Egypt EBITDA +12%, Mexico costs down; 1,000+ jobs cut in key plants.
- **Data Center Growth**: $80M+ annual sales, vendor-managed inventory to accelerate share.
- **EV Risks Mitigated**: 71% of EV sales in Europe/Asia; North America EVs <12% of automotive revenue.
- **Free Cash Flow Improvement**: YoY improvement of $47M, positive H1 cash flow.

**【CEO Opening Remarks】**
- Q2 net sales: $247 million (+3% sequential), adjusted EBITDA: $18 million (+12% sequential). Full-year guidance reaffirmed: $900M-$1B sales, $70M-$80M EBITDA.
- Operational improvements in Egypt (+12% sequential EBITDA) and Mexico (cost reductions in labor, material). 
- Power Solutions growth driven by data centers ($80M+ annual sales) and EVs (41% of automotive sales, 71% in Europe). Vendor-managed inventory for data centers expected to boost share.

**【CFO Financial Commentary】**
- Q2 net sales: $246.9M (-16% YoY, +3% sequential). Adjusted EBITDA: $17.6M (-34% YoY, +12% sequential). 
- Free cash flow: -$11.6M (vs. -$58.4M YoY). Operating cash flow: -$7.4M (impacted by $10M inventory build for data centers). 
- Net debt down $29.6M YoY; cash: $118.5M (+$21.5M YoY). 
- Egypt gross margin nearly doubled; Mexico direct labor, material costs down.

**【Q&A Highlights】**
- **EV Exposure**: 41% of automotive sales, 12% in North America. Headwinds from delayed Stellantis programs ($100M+ annualized) offset by Europe/Asia growth. 
- **Data Centers**: Vendor-managed inventory to drive share; Q2 sales in line with guidance, potential upside in H2. 
- **Tariffs**: Working with customers to mitigate; USMCA facility helps reduce impact. 
- **2026 Outlook**: Stronger H2 driven by plant improvements; cautious on EVs but optimistic on data centers and CV recovery in 2027.

Methode Electronics, Inc. (MEI) Q2 2026 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

MEI

MEI fundamentals

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