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What changed in METHODE ELECTRONICS INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of METHODE ELECTRONICS INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+258 added−286 removedSource: 10-K (2025-07-09) vs 10-K (2024-07-11)

Top changes in METHODE ELECTRONICS INC's 2025 10-K

258 paragraphs added · 286 removed · 191 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeOur employees participate in annual training on preventing, identifying, reporting, and stopping any type of unlawful discrimination or unethical actions. Talent Acquisition, Development and Succession Planning We strive to build a diverse and inclusive workforce through investments in talent development and retention strategies. Methode is an Equal Opportunity Employer and offers opportunities to all qualified job seekers.
Biggest changeTalent Acquisition, Development and Succession Planning We strive to build an inclusive workforce through investments in talent development and retention strategies. Methode is proud to be an Equal Opportunity Employer committed to providing equal employment opportunities to all qualified applicants and employees. We focus significant attention on attracting and retaining talented and experienced individuals to manage and support our operations.
The Industrial segment manufactures exterior and interior lighting solutions, industrial safety radio remote controls, braided flexible cables, current-carrying laminated busbars and devices, custom power-product assemblies, such as our PowerRail® solution, high-current high-voltage flexible power cabling systems and powder-coated busbars that are used in various markets and applications, including aerospace, commercial vehicles, data centers, industrial equipment, power conversion, military, telecommunications and transportation.
The Industrial segment manufactures exterior and interior lighting solutions, industrial safety radio remote controls, braided flexible cables, current-carrying laminated busbars and devices, custom power-product assemblies, such as our PowerRail® solution, high-current high-voltage flexible power cabling systems and powder-coated busbars that are used in various markets and applications, including aerospace, commercial vehicles, data centers, industrial equipment, military, power conversion, telecommunications and transportation.
Sources and Availability of Materials The principal materials that we purchase include application-specific integrated circuits, coil and bar stock, ferrous and copper alloy sheets, glass, LED displays, plastic molding resins, capacitors and resistors, precious metals, and silicon die castings. All of these items are available from several suppliers, and we generally rely on more than one supplier for each item.
Sources and Availability of Materials The principal materials that we purchase include application-specific integrated circuits, capacitors and resistors, coil and bar stock, ferrous and copper alloy sheets, glass, LED displays, plastic molding resins, precious metals, and silicon die castings. All of these items are available from several suppliers, and we generally rely on more than one supplier for each item.
The Medical segment was made up of our medical device business, Dabir Surfaces, with its surface support technology aimed at pressure injury prevention. In the first quarter of fiscal 2024, we made the decision to initiate the discontinuation of Dabir Surfaces. In October 2023, we sold certain assets of the Dabir Surfaces business.
The Medical segment was made up of our former medical device business, Dabir Surfaces, with its surface support technology aimed at pressure injury prevention. In the first quarter of fiscal 2024, we made the decision to initiate the discontinuation of Dabir Surfaces. In October 2023, we sold certain assets of the Dabir Surfaces business.
Also posted on our website, among other documents, are our Corporate Governance Guidelines, Code of Business Conduct, Anti-Corruption Policy, Insider Trading Policy, Conflict Minerals Policy, Supplier Code of Conduct and other governance policies, and the charters of the Audit Committee, Compensation Committee, Executive Committee, Nominating and Governance Committee and Technology Committee.
Also posted on our website, among other documents, are our Corporate Governance Guidelines, Code of Business Conduct, Anti-Corruption Policy, Insider Trading Policy, Conflict Minerals Policy, Supplier Code of Conduct and other governance policies, and the charters of the Audit Committee, Compensation Committee, Executive Committee and Nominating and Governance Committee.
As a global business, the communication on Environmental, Health and Safety (“EHS”) matters is conducted at the local level and in the local language. All our manufacturing location’s structure compliance initiatives to adhere to their local environmental health and safety requirements. Site personnel provide new employee orientation and typically contractor induction training where relevant. Thereafter, relevant job-specific training is provided.
As a global business, the communication on Environmental, Health and Safety (“EHS”) matters is conducted at the local level and in the local language. All our manufacturing locations structure compliance initiatives to adhere to their local environmental health and safety requirements. Site personnel provide new employee orientation and typically contractor induction training where relevant. Thereafter, relevant job-specific training is provided.
Nevertheless, compliance with existing or future governmental regulations, including, but not limited to, those pertaining to international operations, environmental matters (including climate change), export controls, business acquisitions, consumer and data protection, and employee health and safety, could have a material impact on our business in subsequent periods.
Nevertheless, compliance with existing or future governmental regulations, including, but not limited to, those pertaining to international operations, environmental matters, export controls, business acquisitions, consumer and data protection, and employee health and safety, could have a material impact on our business in subsequent periods.
As highlighted in our Diversity & Inclusion Statement (available on our corporate website), diversity and inclusion are business imperatives that will enable us to build and empower our future workforce. We embrace the diversity of our employees, including their unique backgrounds, experiences, thoughts, and talents.
As highlighted in our Diversity & Inclusion Statement (available on our corporate website), diversity and inclusion are business imperatives that will enable us to build and empower our future global workforce. We embrace the diversity of our employees worldwide, including their unique backgrounds, experiences, thoughts, and talents.
We seek patents in order to protect our interest in unique and critical products and technologies, including our magneto-elastic torque/force sensing, current sensing, displacement sensing and radio-type products.
We seek patents in order to protect our interest in unique and critical products and technologies, including our magneto-elastic torque/force sensing, current sensing, lighting and radio-type products.
We strive to maintain a work environment with a safety culture grounded on the premise of eliminating workplace incidents, risks, and hazards. We have processes to help eliminate safety events and to reduce their frequency and severity. The safety of our employees is a top priority and vital to our success and our employees are trained on safety-related topics.
We strive to maintain a work environment with a safety culture grounded on the premise of eliminating workplace incidents, risks, and hazards. We have processes to help eliminate safety events and to reduce their frequency and severity. The safety of our employees is a top priority and vital to our success.
We have been granted a number of patents in the U.S., Europe and Asia and have additional domestic and international patent applications pending related to our products. Our existing patents expire on various dates between 2024 and 2044.
We have been granted a number of patents in the U.S., Europe and Asia and have additional domestic and international patent applications pending related to our products. Our existing patents expire on various dates between 2025 and 2045.
Research and development costs primarily relate to product engineering and design and development expenses and are classified as a component of costs of products sold on our consolidated statements of operations. Expenditures for such activities amounted to $49.1 million for fiscal 2024, $35.0 million for fiscal 2023 and $35.7 million for fiscal 2022.
Research and development costs primarily relate to product engineering and design and development expenses and are classified as a component of costs of products sold on our consolidated statements of operations. Expenditures for such activities amounted to $41.8 million for fiscal 2025, $49.1 million for fiscal 2024 and $35.0 million for fiscal 2023.
Fiscal Year Ended April 27, 2024 April 29, 2023 April 30, 2022 Automotive 53.7 % 62.4 % 67.1 % Industrial 41.3 % 32.6 % 27.3 % Interface 4.8 % 4.7 % 5.1 % Medical 0.2 % 0.3 % 0.4 % 2 Table of Contents Sales and Marketing The majority of our sales activities are directed by sales managers who are supported by field application engineers and other technical personnel who work with customers to design our products into their systems.
Fiscal Year Ended May 3, 2025 April 27, 2024 April 29, 2023 Automotive 48.6 % 53.7 % 62.4 % Industrial 46.5 % 41.3 % 32.6 % Interface 4.9 % 4.8 % 4.7 % Medical — % 0.2 % 0.3 % 2 Table of Contents Sales and Marketing The majority of our sales activities are directed by sales managers who are supported by field application engineers and other technical personnel who work with customers to design our products into their systems.
Our field application engineers also help us identify emerging markets and new products. Our products are primarily sold through our in-house sales staff. We also utilize independent manufacturers’ and sales representatives with offices throughout the world.
Our field application engineers also help us identify emerging markets and new products. Our products are sold through either our in-house sales staff, or through independent sales representatives with offices throughout the world.
Fiscal 2024 ended on April 27, 2024, fiscal 2023 ended on April 29, 2023 and fiscal 2022 ended on April 30, 2022, and each represented 52 weeks of results. Operating Segments Our business is managed, and our financial results are reported, based on the following four segments: Automotive, Industrial, Interface and Medical.
Fiscal 2024 ended on April 27, 2024 and fiscal 2023 ended on April 29, 2023, and each represented 52 weeks of results. Operating Segments Our business is managed, and our financial results are reported, based on the following three segments: Automotive, Industrial and Interface. We reported a fourth segment, Medical, through fiscal 2024.
Our site EHS personnel are also involved in the development of global EHS procedures and standards. Benefits and Compensation As part of our efforts to attract and motivate our employees, we offer competitive compensation and benefits that may vary by region and employee-type. We provide compensation packages that include base salary/wages, and short and long-term incentives.
Our site EHS personnel are also involved in the development of global EHS procedures and standards. Benefits and Compensation As part of our efforts to attract and motivate our employees, we offer competitive compensation and benefits that may vary by region and employee-type.
In general, these sales were for component parts used in particular vehicle models. Typically, our supply arrangement for each component part includes a blanket purchase order and production releases. In general, a blanket purchase order is issued for each part as identified by the customer part number. Each blanket purchase order includes standard terms and conditions, including price.
Generally, our supply arrangement for each component part we sell includes a blanket purchase order and production releases. In general, a blanket purchase order is issued for each part as identified by the customer part number. Each blanket purchase order includes standard terms and conditions, including price.
Backlog We manufacture products based on a combination of specific order requirements and forecasts of our customers’ demand. For many of our OEM customers, especially in the automotive and commercial vehicle markets, we have long-term supply arrangements where there is an expectation that we will supply products in future periods.
For many of our OEM customers, especially in the automotive and commercial vehicle markets, we have long-term supply arrangements where there is an expectation that we will supply products in future periods.
Consequently, our Automotive and Industrial segments may experience seasonal fluctuations based on the sales and the production schedules of our customers. Major Customers During fiscal 2024, our five largest customers accounted for approximately 40% of our consolidated net sales. One customer in the Automotive segment represented more than 10% of our consolidated net sales at 14.6%.
Consequently, our Automotive and Industrial segments may experience seasonal fluctuations based on the sales and the production schedules of our customers. Customers During fiscal 2025, our five largest customers accounted for approximately 36% of our consolidated net sales. No customers represented more than 10% of our consolidated net sales.
We believe that an increased focus on diversity and inclusion will make us a more desirable workplace and will lead to improved business performance. 4 Table of Contents Health and Safety The success of our business is connected to the well-being of our employees.
In addition to our focus on merit-based hiring and promotional opportunities, we believe that attracting and retaining a diverse workforce through an inclusive environment will make us a more desirable workplace and will lead to improved business performance. 4 Table of Contents Health and Safety The success of our business is connected to the well-being of our employees.
Our U.S. employees are not subject to any collective bargaining agreements although certain international employees are covered by national or local labor agreements. Our corporate culture includes a commitment to doing business with integrity, teamwork, and performance excellence.
Our U.S. employees are not subject to any collective bargaining agreements although certain international employees are covered by national or local labor agreements. We are committed to doing business with integrity, teamwork, and performance excellence. Our management team and all our employees are expected to exhibit the principles of fairness, honesty, and integrity in the actions we undertake.
We focus significant attention on attracting and retaining talented and experienced individuals to manage and support our operations. When we hire new employees, we focus not just on the skills required for current positions, but the ever-changing complex skills and competencies that will be required as we move forward.
When we hire new employees, we focus not just on the skills required for current positions, but the ever-changing complex skills and competencies that will be required as we move forward. We are revising our global talent review and succession planning process to align our talent plans with the current and future strategies of the business.
Our management team and all our employees are expected to exhibit the principles of fairness, honesty, and integrity in the actions we undertake. Our employees must adhere to our Code of Conduct that addresses topics such as anti-corruption, discrimination, harassment, privacy, appropriate use of company assets and protecting confidential information.
Our employees must adhere to our Code of Business Conduct that addresses topics such as anti-corruption, discrimination, harassment, privacy, appropriate use of company assets and protecting confidential information. Our employees participate in annual training on preventing, identifying, reporting, and stopping any type of unlawful discrimination or unethical actions.
In certain circumstances, we supply the requirements for a particular customer vehicle model for the life of the model, which can vary from three to seven years. Our customers order parts using production releases approved under the relevant blanket purchase order. The production releases include information regarding part quantities and delivery specifications.
Our customers order parts using production releases approved under the relevant blanket purchase order. The production releases include information regarding part quantities and delivery specifications. Backlog We manufacture products based on a combination of specific order requirements and forecasts of our customers’ demand.
Refer to Item 1A, “Risk Factors” in this Annual Report for a discussion of these potential impacts. Human Capital The Human Resources function at Methode is an active and visible partner to the business at all levels. Our Chief Human Resources Officer reports directly to the Chief Executive Officer and interacts frequently with our Board of Directors.
Refer to Item 1A, “Risk Factors” in this Annual Report for a discussion of these potential impacts. Human Capital At Methode, we truly believe that people are our greatest asset.
In fiscal 2025, our human capital focus will continue to be on talent acquisition and development, diversity and inclusion and employee health and safety. As of April 27, 2024, we employed approximately 7,500 employees worldwide, substantially all of whom were employed full time with approximately 95% of these employees located outside the U.S.
As of May 3, 2025, our global workforce totaled approximately 6,500 employees and 800 contractors. Substantially all of our global workforce is employed full time and approximately 95% of these employees and contractors are located outside the U.S.
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Acquisition of Nordic Lights Group Corporation (“Nordic Lights”) We acquired 92.2% of the outstanding shares of Nordic Lights on April 20, 2023. We acquired the remaining 7.8% of the outstanding shares of Nordic Lights in the year ended April 27, 2024. Accordingly, as of April 27, 2024, we own 100% of Nordic Lights.
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Fiscal Year Our fiscal year ends on the Saturday closest to April 30 of the following year, typically resulting in a 52-week year, but occasionally giving rise to an additional week, resulting in a 53-week year. The fiscal year ended May 3, 2025 was a 53-week fiscal year.
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The results of operations of Nordic Lights are reported within the Industrial segment. See Note 3, “Acquisition and Disposition” to the consolidated financial statements in this Annual Report for further information. Fiscal Year We maintain our financial records on the basis of a 52 or 53-week fiscal year ending on the Saturday closest to April 30.
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Our human capital focus will continue to drive an organization dedicated to placing the right talent, with the right capabilities in the right roles to allow us the opportunity to achieve the performance expectations of our shareholders. This philosophy has been reinforced with the appointment of our new President and Chief Executive Officer Jonathan DeGaynor.
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We have a global talent review and succession planning process designed to align our talent plans with the current and future strategies of the business. This includes the identification of key positions, assessment of internal talent and potential successors and plans for talent development.
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This will include the identification of key positions, assessment of internal talent and potential successors and plans for talent development. Inclusivity At Methode, we strive to maintain an inclusive workforce. We value every member of our workforce and want everyone to feel safe voicing their opinions and concerns.
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Our teams meet with leaders and team members across the company to develop action plans and goals focused on both personal and professional development. Diversity and Inclusion At Methode Electronics, we strive to maintain a diverse and inclusive workforce that reflects our global customer base and the communities that we serve.
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We provide compensation packages that include base salary/wages, short and long-term incentives and other benefits that we believe are competitive within our industry.
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We value every member of our workforce and want everyone to feel safe voicing their opinions and concerns. Our diversity goals apply to our entire organization, including leadership positions. We have diverse representation on our executive team and Board of Directors, with three out of ten Board members being women.
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Depending on the jurisdiction, we also provide employee benefits such as life, disability, and health (medical, dental, and vision) insurance, a 401(k) plan with a company match, paid time off, tuition reimbursement, military leave, and holiday pay. We believe those benefits are competitive within our industry.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, our senior secured credit agreement includes an “anti-cash hoarding” requirement, applicable during the period from the effective date of the Second Amendment until the earlier to occur of (a) the delivery of financial statements and a compliance certificate for the fiscal quarter ending July 25, 2025 and (b) the delivery of compliance certificates for two consecutive fiscal quarters demonstrating that our consolidated leverage ratio as of the last day of such fiscal quarters was less than 3.00:1.00, that if we have cash on hand (subject to certain exceptions) of more than $65 million for 10 consecutive business days, we shall prepay the indebtedness under our senior secured credit agreement by the amount of such excess.
Biggest changeIn addition, our senior secured credit agreement includes an “anti-cash hoarding” requirement, which provides that if we have cash on hand in the U.S. (subject to certain exceptions) of more than $65 million for 10 consecutive business days, we shall prepay the indebtedness under our senior secured credit agreement by the amount of such excess.
Any change in the availability of, lead times for, or price for, these materials could materially adversely affect our business, financial condition and results of operations. The loss or insolvency of our major customers, or a significant decline in the volume of products purchased by these customers, would adversely affect our future results.
Any change in the availability of, lead times for, or price of, these materials could materially adversely affect our business, financial condition and results of operations. The loss or insolvency of our major customers, or a significant decline in the volume of products purchased by these customers, would adversely affect our future results.
Similarly, many of our customers are dependent on an ever-greater number of global suppliers to manufacture their products. These global supply chains have been, and may continue to be, adversely impacted by events outside of our control, including macroeconomic events, trade restrictions, economic recessions, energy prices and availability, political crises, labor relations issues, liquidity constraints, or natural occurrences.
Similarly, many of our customers are dependent on an ever-greater number of global suppliers to manufacture their products. These global supply chains have been, and may continue to be, adversely impacted by events outside of our control, including macroeconomic events, tariffs and trade restrictions, economic recessions, energy prices and availability, political crises, labor relations issues, liquidity constraints, or natural occurrences.
The obligations under our senior secured credit agreement are secured by a lien on substantially all of the personal property of the Company and our U.S. subsidiaries that are guarantors, including 100% of the equity interests of their respective U.S. subsidiaries and 65% of the equity interests of their respective foreign subsidiaries (or such greater amount to the extent such pledge could not reasonably cause adverse tax consequences).
The obligations under our senior secured credit agreement are secured by a lien on substantially all of our personal property and our U.S. subsidiaries that are guarantors, including 100% of the equity interests of their respective U.S. subsidiaries and 65% of the equity interests of their respective foreign subsidiaries (or such greater amount to the extent such pledge could not reasonably cause adverse tax consequences).
Our senior secured credit agreement imposes various restrictions and covenants regarding the operation of our business, including covenants that require us to obtain the lenders’ consent before we can, among other things and subject to certain exceptions: (i) incur additional indebtedness or additional liens on our property; (ii) consummate certain acquisitions, dispositions, mergers or consolidations; (iii) make any material change in the nature of our business; (iv) enter into certain transactions with our affiliates; or (v) repurchase or redeem any outstanding shares of our common stock or pay cash dividends to our stockholders when a default exists or certain financial covenants are not maintained.
Our senior secured credit agreement imposes various restrictions and covenants regarding the operation of our business, including covenants that require us to obtain the lenders’ consent before we can, among other things and subject to certain exceptions: (i) incur additional indebtedness or additional liens on our property; (ii) consummate certain acquisitions, dispositions, mergers or consolidations; (iii) make any material change in the nature of our business; (iv) enter into certain transactions with our affiliates; or (v) repurchase or redeem any outstanding shares of our common stock or pay cash dividends to our stockholders in excess of certain amounts or when a default exists or certain financial covenants are not maintained.
Our senior secured credit agreement also imposes various other restrictions and covenants on the Company (including covenants requiring us to maintain compliance with a minimum consolidated interest coverage ratio and a maximum consolidated leverage ratio, in each case as of the end of each fiscal quarter of the Company).
Our senior secured credit agreement also imposes various other restrictions and covenants (including covenants requiring us to maintain compliance with a minimum consolidated interest coverage ratio and a maximum consolidated leverage ratio, in each case as of the end of each fiscal quarter of the Company).
If we do not accurately predict, prepare for, and respond to new kinds of market developments and changing customer needs, such as if OEMs significantly lower production or delay launches of EVs, our business could be materially and adversely impacted.
If we do not accurately predict, prepare for, and respond to new kinds of market developments and changing customer needs, such as if OEMs cancel, significantly lower production or delay launches of EVs, our business could be materially and adversely impacted.
The GDPR also imposes strict rules on the transfer of personal data out of the European Union to countries such as the U.S., enhances enforcement authority and imposes large penalties for noncompliance. 13 Table of Contents We may be unable to keep pace with rapid technological changes, which could adversely affect our business, financial condition and results of operations.
The GDPR also imposes strict rules on the transfer of personal data out of the European Union to countries such as the U.S., enhances enforcement authority and imposes large penalties for noncompliance. 15 Table of Contents We may be unable to keep pace with rapid technological changes, which could adversely affect our business, financial condition and results of operations.
EHS laws and regulations have generally become more stringent over time and could continue to do so, particularly in response to climate change concerns, imposing greater compliance costs and increasing risks and penalties associated with any violation, which also could materially adversely affect our business, financial condition and results of operations.
EHS laws and regulations have generally become more stringent over time in many jurisdictions and could continue to do so, particularly in response to climate change concerns, imposing greater compliance costs and increasing risks and penalties associated with any violation, which also could materially adversely affect our business, financial condition and results of operations.
These inflationary pressures have affected wages, the cost and availability of components and materials, and our ability to meet customer demand. Inflation may further exacerbate other risk factors discussed in this Annual Report, including customer demand, supply chain disruptions, availability of financing sources, and risks of international operations and the recruitment and retention of talent.
These inflationary pressures have affected wages, the cost and availability of components and materials, and our ability to meet customer demand. Inflation may further exacerbate other risk factors discussed in this Annual Report, including customer demand, supply chain disruptions, availability of financing sources, the impact of tariffs, risks of international operations and the recruitment and retention of talent.
We may not be successful in the development of a non-infringing alternative, or licenses may not be available on commercially acceptable terms, if at all, in which case we may lose sales and profits. In addition, any litigation could be lengthy and costly and could materially adversely affect us even if we are successful in the litigation.
We may not be successful in the development of a non-infringing alternative, or licenses may not be available on commercially acceptable terms, if at all, in which case we may lose sales and profits. In addition, any litigation could be lengthy and costly and could materially adversely affect us even if we are successful in the litigation. Item 1B.
However, cost overruns that we cannot pass on to our customers could adversely affect our business, financial condition and results of operations. Certain of our customers have exerted and continue to exert considerable pressure on us to reduce prices and costs, improve quality and provide additional design and engineering capabilities.
However, cost overruns that we cannot pass on to our customers could adversely affect our business, financial condition and results of operations. Certain of our customers have exerted and continue to exert considerable pressure on us to reduce prices and costs, improve quality, provide additional supplemental information, and provide additional design and engineering capabilities.
In addition, any such future waivers or amendments could cause us to incur significant costs, fees and expenses. Our failure to comply with the covenants or other restrictions contained in our senior secured credit agreement, or in any future debt arrangements, could result in an event of default.
In addition, any such future waivers or amendments could cause us to incur significant costs, fees and expenses. Our failure to comply with the covenants or other restrictions contained in our senior secured credit agreement, or in any other debt arrangement, could result in an event of default.
Any adverse occurrence, including industry slowdowns, recession, rising interest rates, rising fuel costs, political instability, costly or constraining regulations, armed hostilities, terrorism, excessive inflation, prolonged disruptions in one or more of our customers’ production schedules or labor disturbances or work stoppages, that results in a significant decline in sales volumes in these industries, or in an overall downturn in the business and operations of our customers in these industries, could materially adversely affect our business, financial condition and results of operations.
Any adverse occurrence, including industry slowdowns, recession, rising interest rates, rising fuel costs, political instability, changes in trade policy, costly or constraining regulations, armed hostilities, terrorism, excessive inflation, prolonged disruptions in one or more of our customers’ production schedules or labor disturbances or work stoppages, that results in a significant decline in sales volumes and mix in these industries, or in an overall downturn in the business and operations of our customers in these industries, could materially adversely affect our business, financial condition and results of operations.
In order to manage our exposure to interest rate risk, we have entered into, and may continue to enter into, derivative financial instruments, typically interest rate swaps, involving the exchange of floating for fixed rate interest payments.
In order to manage our exposure to interest rate risk, we have at times entered into, and may continue to enter into, derivative financial instruments, typically interest rate swaps, involving the exchange of floating for fixed rate interest payments.
The contracts we have entered into with most of our customers have terms ranging from one year to the life of the model (usually three to seven years), although customers often reserve the right to terminate for convenience.
The arrangements we have entered into with most of our customers have terms ranging from one year to the life of the model (usually three to seven years), although customers often reserve the right to terminate for convenience.
Failure to comply with Section 404 of the Sarbanes-Oxley Act of 2002 could negatively affect our business, financial condition and results of operations. A significant fluctuation between the U.S. dollar and other currencies could adversely impact our business, results of operations and financial condition. We transact business in various foreign countries.
Failure to comply with Section 404 of the Sarbanes-Oxley Act of 2002 could negatively affect our business, financial condition and results of operations. 12 Table of Contents A significant fluctuation between the U.S. dollar and other currencies could adversely impact our business, results of operations and financial condition. We transact business in various foreign countries.
If environmental laws or regulations or industry standards are either changed or adopted and impose significant operational restrictions and compliance requirements upon us, our operations, our products or our customers, or if our operations are disrupted due to physical impacts of climate change, our business, financial condition and results of operations could be materially adversely affected.
If environmental regulations or industry standards are either changed or adopted and impose significant operational restrictions, costs, and compliance requirements upon us, our operations, our products or our customers, or if our operations are disrupted due to physical impacts of environmental change, our business, financial condition and results of operations could be materially adversely affected.
Electric vehicle adoption may also be impacted by, among other factors: perceptions about EV features, quality, safety, performance, reliability and cost relative to internal combustion engine (“ICE”) vehicles; the drivable range on a EV’s battery; the availability of charging infrastructure; the cost of petroleum-based fuel; and the uncertainty of governments investments and incentives in the EV market and its supporting infrastructure.
Electric vehicle adoption may also be impacted by, among other factors: perceptions about EV features, quality, safety, performance, reliability and cost relative to internal combustion engine (“ICE”) vehicles; the drivable range on a EV’s battery; the availability of charging infrastructure; the cost of petroleum-based fuel; and the suspension or uncertainty of government investments and incentives in the EV market and its supporting infrastructure.
Sales to customers outside of the U.S. represented a substantial portion of our fiscal 2024 net sales. We expect our net sales in international markets to continue to represent a significant portion of our consolidated net sales.
Sales to customers outside of the U.S. represented a substantial portion of our fiscal 2025 net sales. We expect our net sales in international markets to continue to represent a significant portion of our consolidated net sales.
Volatility in the exchange rates between the foreign currencies and the U.S. dollar could have an adverse effect on our business, financial condition and results of operations. 12 Table of Contents Changes in our effective tax rate may adversely impact our results of operations.
Volatility in the exchange rates between the foreign currencies and the U.S. dollar could have an adverse effect on our business, financial condition and results of operations. Changes in our effective tax rate may adversely impact our results of operations.
The success of our acquisitions depends on our ability to: • execute the integration or consolidation of the acquired operations into our existing businesses; • develop or modify the financial reporting and information systems of the acquired entity to ensure overall financial integrity and adequacy of internal control procedures; • retain key personnel and key customers; • identify and take advantage of cost reduction opportunities; and • further penetrate new and existing markets with the product capabilities we may acquire.
The success of our acquisitions depends on our ability to: • integrate or consolidate the acquired operations into our existing businesses; • develop or modify the financial reporting and information systems of the acquired entity to ensure overall financial integrity and adequacy of internal control procedures; • retain key personnel and key customers; • identify and take advantage of cost reduction opportunities; and • further penetrate new and existing markets with the product capabilities we may acquire.
Our senior secured credit agreement provides for variable rates of interest based on the currency of the borrowing and our consolidated leverage ratio and contains customary representations and warranties, financial covenants, restrictive covenants and events of default.
Our senior secured credit agreement provides for variable rates of interest based on, among other things, the currency of the borrowing and our consolidated leverage ratio and contains customary representations and warranties, financial covenants, restrictive covenants and events of default.
We may be unable to generate sufficient production cost savings in the future to offset required price reductions. Future price reductions, increased quality standards and the cost of adding additional engineering capabilities may reduce our profitability and have a material adverse effect on our business, financial condition and results of operations.
We may be unable to generate sufficient production cost savings in the future to offset required price reductions and increased requirements and administrative burden. Future price reductions, increased quality and other requirements and the cost of adding additional engineering capabilities may reduce our profitability and have a material adverse effect on our business, financial condition and results of operations.
Changes in laws or policies governing the terms of foreign trade, and in particular increased trade restrictions, tariffs or taxes on imports from countries where we manufacture products, such as China, Egypt and Mexico, could have a material adverse effect on our business, financial condition and operating results.
Changes in laws or policies governing the terms of foreign trade, and in particular increased trade restrictions, export licenses, tariffs or taxes on imports from countries or geographic regions where we manufacture products, such as Canada, China, Egypt, Europe and Mexico, could have a material adverse effect on our business, financial condition and operating results.
Our inability, or our customers' inability, to effectively manage the timing, quality and costs of these new program launches could adversely affect our financial condition and results of operations. 5 Table of Contents Over the last several fiscal years, we have booked many EV-related programs.
Our inability, or our customers' inability, to effectively manage the timing, quality and costs of these new program launches, or a less commercially successful introduction of our customers’ new products, could adversely affect our financial condition and results of operations. 5 Table of Contents Over the last several fiscal years, we have booked many EV-related programs.
The price increases are often driven by raw material pricing and availability, component or part availability, manufacturing capacity, industry allocations, logistics capacity, military conflicts, natural disasters or pandemics, and significant changes in the financial or business condition of our suppliers. 7 Table of Contents Our products contain a significant number of components that we source globally.
The price increases are often driven by raw material pricing and availability, component or part availability, manufacturing capacity, industry allocations, logistics capacity, tariff or other trade barriers, military conflicts, natural disasters or pandemics, and significant changes in the financial or business condition of our suppliers. Our products contain a significant number of components that we source globally.
In addition, we have significant personnel, property, equipment and operations in a number of countries outside of the U.S., including Belgium, Canada, China, Egypt, Finland, India, Malta, Mexico and the United Kingdom. As of April 27, 2024, approximately 95% of our employees were located outside of the U.S.
In addition, we have significant personnel, property, equipment and operations in a number of countries outside of the U.S., including Belgium, Canada, China, Egypt, Finland, India, Malta, Mexico and the United Kingdom. As of May 3, 2025, approximately 95% of our employees were located outside of the U.S.
Future price reductions and increased quality standards may reduce our profitability and have a material adverse effect on our business, financial condition and results of operations. Our supply arrangements with our customers typically require us to provide our products at predetermined prices.
Any such business interruptions could materially affect our business, financial condition and results of operations. Future price reductions and increased quality standards may reduce our profitability and have a material adverse effect on our business, financial condition and results of operations. Our supply arrangements with our customers typically require us to provide our products at predetermined prices.
Product defects may result in delayed shipments and reduced demand for our products. We have incurred warranty liability claims and may be subject to increased costs due to warranty claims on defective products. Product defects may result in product liability claims against us where defects cause, or are alleged to cause, property damage, bodily injury or death.
We have incurred warranty liability claims and may be subject to increased costs due to warranty claims on defective products. Product defects may result in product liability claims against us where defects cause, or are alleged to cause, property damage, bodily injury or death.
War, terrorism, geopolitical uncertainties (including the current military conflicts between Russia and Ukraine, and between Israel and Hamas), public health emergencies, and other business interruptions have caused and could cause damage or disruption to international commerce and the global economy, and thus could have a strong negative effect on us, our suppliers, logistics providers, and customers.
War, terrorism, geopolitical uncertainties (including the current military conflicts between Russia and Ukraine, tensions in the Middle East and rising international trade disputes), public health emergencies, and other business interruptions have caused and could cause damage or disruption to international commerce and the global economy, and thus could have a strong negative effect on us, our suppliers, logistics providers, and customers.
We have completed acquisitions and divestitures in the past, including most recently the acquisition of Nordic Lights in April 2023. We may seek other acquisitions to grow our businesses and may divest operations to focus on our core businesses. We may fail to derive significant benefits from such transactions.
We have completed acquisitions and divestitures in the past and we may seek other acquisitions to grow our businesses and may divest operations to focus on our core businesses. We may fail to derive significant benefits from such transactions.
If we are unable to launch new products in a timely and cost-effective manner, or our customers delay the launch of their new programs, our business, financial condition and results of operations could be materially adversely affected. Changes in EV demand could affect our business. A significant portion of our business is derived from components for use in EV.
If we are unable to launch new products in a timely and cost-effective manner, or our customers delay the launch of their new programs or significantly reduce new product volumes, our business, financial condition and results of operations could be materially adversely affected. Changes in EV demand could affect our business.
Although we were able to enter into an amendment that, among other things, waived any default or event of default that may have occurred due to the non-compliance with such consolidated leverage ratio covenant for the quarter ended January 27, 2024, there can be no assurance that we would be able to negotiate waivers for any future covenant breaches.
Although we were able to enter into an amendment on July 7, 2025 that, among other things, waived any default or event of default that may have occurred due to the non-compliance with such consolidated leverage ratio and consolidated interest coverage ratio covenants for the quarter ended May 3, 2025, there can be no assurance that we would be able to negotiate waivers or amendments for any future actual or potential covenant breaches.
Products we manufacture may contain design or manufacturing defects that could result in reduced demand for our products or services and warranty liability claims against us. Despite our quality control and quality assurance efforts, defects may occur in the products we manufacture due to a variety of factors, including design or manufacturing errors, component failure or counterfeit parts.
Despite our quality control and quality assurance efforts, defects may occur in the products we manufacture due to a variety of factors, including design or manufacturing errors, component failure or counterfeit parts. Product defects may result in delayed shipments and reduced demand for our products.
We face certain security threats relating to the confidentiality and integrity of our information technology (“IT”) systems. Despite implementation of security measures, our IT systems may be vulnerable to damage from computer viruses, cyber-attacks and other unauthorized access, and these security breaches could result in a disruption to our operations.
Despite implementation of security measures, our IT systems may be vulnerable to damage from computer viruses, cyber-attacks and other unauthorized access, and these security breaches could result in a disruption to our operations.
We cannot assure you that we will be able to maintain compliance with the covenants and other restrictions in our senior secured credit agreement in the future or that we will be able to obtain waivers from the lenders or amend the covenants if needed or desirable.
We cannot assure you that we will not breach or violate in the future any of the covenants or other restrictions in our senior secured credit agreement or in any other debt arrangement, or that we will be able to obtain waivers from the lenders or amend the covenants or other restrictions if needed or desirable.
Additionally, we are subject to audits in the various taxing jurisdictions in which we conduct business. Based on the status of these audits and the protocol of finalizing audits by the relevant tax authorities, it is not possible to estimate the impact of changes, if any, to previously recorded uncertain tax positions.
Based on the status of these audits and the protocol of finalizing audits by the relevant tax authorities, it is not possible to estimate the impact of changes, if any, to previously recorded uncertain tax positions.
If we lose the services of our executive officers or our other highly qualified and experienced employees and cannot attract and retain other qualified personnel, our business could suffer due to less effective management or less successful products due to a reduced ability to design, manufacture and market our products. 6 Table of Contents Our customers may cancel their orders, change production quantities (take rates) or locations or delay production.
If we lose the services of our executive officers or our other highly qualified and experienced employees and cannot attract and retain other qualified personnel, our business could suffer due to less effective management or less successful products due to a reduced ability to design, manufacture and market our products.
If actual production orders from our customers are not consistent with our projected future sales volumes, we could realize substantially less revenue and incur greater expenses over the life of vehicle programs. The receipt of orders and resulting revenues from customers is significantly affected by global automotive production levels.
We also must incur costs and make commitments well in advance of the receipt of orders and resulting revenues from customers. If actual production orders from our customers are not consistent with our projected future sales volumes, we could realize substantially less revenue and incur greater expenses over the life of vehicle programs.
For example, a significant program for a major EV customer rolled-off in fiscal 2024 and we expect a major automotive center console program to roll-off prior to the end of fiscal 2025.
For example, a significant program for a major EV customer rolled-off in fiscal 2024 and a major automotive center console program rolled-off in fiscal 2025.
Recently, there have been lower-than-anticipated industrywide EV adoption rates, which has led many OEMs across the entire industry to adjust spending, order volumes, and/or product launch timing to align with the current consumer demand.
A significant portion of our business is derived from components for use in EV. Recently, there have been lower-than-anticipated industrywide EV adoption rates, which has led many OEMs across the entire industry to adjust spending, order volumes, and/or product launch timing, or cancel programs altogether to align with the current consumer demand.
As of January 27, 2024, we were not in compliance with the consolidated leverage ratio covenant contained in the then-current version of the credit agreement for our revolving credit facility.
As of May 3, 2025, we were not in compliance with both the consolidated leverage ratio and consolidated interest coverage ratio covenants contained in the then-current version of the credit agreement for our revolving credit facility.
We generally receive volume estimates, but not firm volume commitments from our customers, and may experience reduced or extended lead times in customer orders. Customers may cancel orders, change production quantities (take rates) and delay production for a number of reasons.
The receipt of orders and resulting revenues from customers is significantly affected by global automotive production levels. Our customers may cancel their orders, change production quantities (take rates) or locations or delay production. We generally receive volume estimates, but not firm volume commitments from our customers, and may experience reduced or extended lead times in customer orders.
A catastrophic event or other significant business interruption at any of our facilities could adversely affect our business, financial condition and results of operations. Weather conditions, natural disasters or other catastrophic events could cause significant disruptions at our manufacturing facilities or those of our major suppliers or customers.
Weather conditions, natural disasters or other catastrophic events could cause significant disruptions at our manufacturing facilities or those of our major suppliers or customers. In such event, losses could be incurred and significant recovery time could be required to resume operations and our business, financial condition and results of operations could be materially adversely affected.
Our primary sources of liquidity are cash generated from operations and availability under our $500 million revolving credit facility. As of April 27, 2024, $333.0 million was outstanding under the revolving credit facility.
Our primary sources of liquidity are cash generated from operations and availability under our $400 million revolving credit facility. As of May 3, 2025, $319.4 million was outstanding under the revolving credit facility.
We operate our business on a global basis and changes to trade policy, including tariffs and customs regulations, could have a material and adverse effect on our business. We manufacture and sell our products globally and rely on a global supply chain to deliver the required raw materials, components, and parts, as well as the final products to our customers.
We manufacture and sell our products globally and rely on a global supply chain to deliver the required raw materials, components, and parts, as well as the final products to our customers.
The loss of our major customers, or a decline in the production levels of these customers or particular models, could reduce our sales and thereby adversely affect our financial condition, operating results and cash flows.
Such supply arrangements cover a period from one year to the life of the model, which is generally three to seven years. The loss of our major customers, or a decline in the production levels of these customers or particular models, could reduce our sales and thereby adversely affect our financial condition, operating results and cash flows.
In the event that we determine that our goodwill or other intangible assets are impaired, we may be required to record a significant charge to earnings that could adversely affect our financial condition and results of operations. If we fail to maintain proper and effective internal controls over financial reporting, our financial results may not be accurately reported.
In the event that we determine that our goodwill or other intangible assets are impaired, we may be required to record a significant charge to earnings that could adversely affect our financial condition and results of operations. We have risks associated with inventory. Our business requires us to manage inventory effectively.
We often increase staffing and capacity and incur other expenses to meet the anticipated demand of our customers. On occasion, customers may require rapid increases in production, which may stress our resources. Any significant decrease or delay in customer orders or take rates could have a material adverse effect on our business, financial condition and results of operations.
We often increase staffing and capacity and incur other expenses to meet the anticipated demand of our customers. On occasion, customers may require rapid increases in production, which may stress our resources.
Our success depends upon the continued contributions of our executive officers and other key employees, many of whom have many years of experience with us and would be difficult to replace.
Our success depends upon the continued contributions of our executive officers and other key employees, many of whom have many years of industry experience and could be difficult to replace. If we are unable to retain these executive officers and key employees, our ability to implement our strategic initiatives may be impaired.
Our product revenues generally are based upon purchase orders issued by our customers, with updated production schedules for volume adjustments, and our customers generally do not guarantee sales volumes. As such, we typically do not have a backlog of firm orders at any point in time.
Our product revenues generally are based upon purchase orders issued by our customers, with updated production schedules for volume adjustments, and our customers generally do not guarantee sales volumes. In addition, awarded business may include business under arrangements that our customers have the right to terminate without penalty at any time.
The inability of our supply chain, or the supply chain of our customers, to deliver key components, such as semiconductors, could materially adversely affect our business, financial condition and results of operations and cause us to incur significant cost increases.
For example, a significant program for a major EV customer rolled-off in fiscal 2024 and a major automotive center console program rolled-off in fiscal 2025. 7 Table of Contents The inability of our supply chain, or the supply chain of our customers, to deliver key components could materially adversely affect our business, financial condition and results of operations and cause us to incur significant cost increases.
Depending upon their continued duration and potential expansion, these tariffs and other regulatory actions could materially affect our business, including in the form of an increase in cost of goods sold, decreased margins, increased pricing for customers, and reduced sales. 14 Table of Contents An emphasis on global climate change and other Environmental, Social and Governance (“ESG”) matters by various stakeholders could adversely impact our business and results of operations.
Depending upon the continued duration and potential expansion of these tariffs, as well as our ability to mitigate their impact, these tariffs and other regulatory actions could materially affect our business, including in the form of an increase in cost of goods sold, decreased margins, increased pricing for customers, disruptions in our supply chain, impaired ability to compete effectively, and reduced sales.
Many of the laws and regulations listed above are complex and often difficult to interpret and violations could result in significant criminal penalties or sanctions. Any of these factors may have an adverse effect on our international operations which could have a material adverse effect on our business, financial condition and results of operations.
Many of the laws and regulations listed above are complex and often difficult to interpret and violations could result in significant criminal penalties or sanctions.
We provide for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement criteria prescribed by applicable accounting standards. Fluctuations in federal, state and foreign taxes or a change to uncertain tax positions, including related interest and penalties, may impact our effective tax rate and results of operations.
Significant judgment is required to determine our effective tax rate and evaluate our tax positions. We provide for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement criteria prescribed by applicable accounting standards.
As disclosed in Item 9A, “Controls and Procedures,” of this Annual Report, in fiscal 2023, we identified a material weakness in our internal control over financial reporting related to revenue at one of our business units. This material weakness was remediated in fiscal 2024.
As disclosed in Item 9A, “Controls and Procedures,” of this Annual Report, in fiscal 2024, we identified three material weaknesses in our internal control over financial reporting related to information technology general controls, goodwill impairment and application of GAAP to non-routine events and conditions. These material weaknesses were remediated in fiscal 2025.
The material weaknesses, or difficulties encountered in implementing new or improved controls or remediation, could prevent us from accurately reporting our financial results, result in material misstatements in our financial statements or cause us to fail to meet our reporting obligations.
If such material weakness is not remediated effectively or in a sufficient amount time, this could prevent us from accurately reporting our financial results, result in material misstatements in our financial statements or cause us to fail to meet our reporting obligations.
Any negative or unexpected outcomes of these examinations and audits could have a material adverse impact on our results of operations and financial condition. Technology and Intellectual Property Risks Our operations could be negatively impacted by IT service interruptions, data corruption or misuse, cyber-based attacks, or network security breaches.
Technology and Intellectual Property Risks Our operations could be negatively impacted by IT service interruptions, data corruption or misuse, cyber-based attacks, or network security breaches. We face certain security threats relating to the confidentiality and integrity of our information technology (“IT”) systems.
Additionally, certain of our EV customers are start-up or emerging companies which may present additional and different risks than with our more established customers. These customers do not have an extensive product history.
Additionally, certain of our EV customers are start-up or emerging companies which may present additional and different risks due to a lack of product history, customer funding difficulties, and the generally speculative nature of a yet untested business.
Any such product defects or product liability claims could materially adversely affect our business, financial condition and results of operations. Item 1B. Unresolved Staff Comments None.
Any such product defects or product liability claims could materially adversely affect our business, financial condition and results of operations. 14 Table of Contents We are subject to government regulations, including EHS laws and regulations, that expose us to potential financial liability.
Our five largest customers accounted for approximately 40% of our consolidated net sales in fiscal 2024. One customer in the Automotive segment represented 14.6% of our consolidated net sales in fiscal 2024. In certain cases, the sales to these customers are concentrated in a single product.
Our five largest customers accounted for approximately 36% of our consolidated net sales in fiscal 2025. In certain cases, the sales to these customers are concentrated in a single product. The arrangements with our major customers generally provide for supplying their requirements for particular models, rather than for manufacturing a specific quantity of products.
Our inability to attract or retain key employees and a highly skilled workforce, along with recent executive turnover, may have an adverse effect on our business, financial condition and results of operations.
If changes in trade policy cause increased prices for vehicles, consumer demand may decline, prompting a reduction in global vehicle production volumes, which is a material driver of our operations, sales and profitability. Our inability to attract or retain key employees and a highly skilled workforce may have an adverse effect on our business, financial condition and results of operations.
Our judgments regarding the accounting for tax positions and the resolution of tax disputes may impact our results of operations and financial condition. Significant judgment is required to determine our effective tax rate and evaluate our tax positions.
As a result, these changes may have adverse consequences for us, may increase our compliance costs, and may increase the amount of tax we are required to pay in certain jurisdictions. Our judgments regarding the accounting for tax positions and the resolution of tax disputes may impact our results of operations and financial condition.
Therefore, our actual sales volumes, and thus the ultimate amount of revenue that we derive from such sales, are not committed. We also must incur costs and make commitments well in advance of the receipt of orders and resulting revenues from customers.
Further, our customers’ forecasts are subject to numerous assumptions, and such forecasts often are changed rapidly with limited notice. Therefore, our actual sales volumes, and thus the ultimate amount of revenue that we derive from such sales, are not committed.
We are actively developing remediation plans designed to address the material weaknesses; however, we cannot guarantee that these steps will be sufficient or that we will not have a material weakness in the future.
However, we cannot provide assurances that the remediated material weaknesses will not reoccur, or that a new material weakness will not occur in the future.
Increased public awareness and concern regarding environmental risks, including global climate change, may result in more international, regional and/or federal requirements, customer requirements, or industry standards to reduce or mitigate global warming and other environmental risks.
An emphasis on environmental matters by various stakeholders could adversely impact our business and results of operations. Increased public awareness regarding environmental risks may result in more legal or customer requirements, or industry standards to reduce or mitigate environmental risks. These requirements, regulations or standards could mandate more restrictive requirements or reporting.
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As a result, there is less demonstration of market acceptance of their products, making it more difficult for us to forecast needs and requirements than with established customers. In addition, funding for such companies may be more difficult to obtain and these customer relationships may not continue or materialize to the extent we plan or previously experienced.
Added
Certain OEMs have recently deferred or cancelled planned EV programs or reduced production volumes below previously quoted levels often citing softened consumer demand. We are pursuing these customers for price adjustments and other commercial recoveries in view of the pre-production, tooling, engineering, and other upfront costs incurred in anticipation of those programs.
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This tightening of financing for start-up customers, together with many start-up customers’ lack of prior operations and unproven product markets increase our credit risk, especially in trade accounts receivable and inventories.
Added
If we are unable to secure timely or full compensation from these customers, we may experience production inefficiencies, including underutilized capacity and workforce disruptions. These developments could adversely affect our profitability and operational planning.
Removed
Although we perform ongoing credit evaluations of our customers and adjust our allowance for doubtful accounts receivable for all customers, including start-up customers and emerging companies, based on the information available, these allowances may not be adequate.
Added
Customers may cancel orders, change production quantities (take rates) and delay production for a number of reasons.
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In addition, awarded business may include business under arrangements that our customers have the right to terminate without penalty at any time. Further, our customers’ forecasts are subject to numerous assumptions, and such forecasts often are changed rapidly with limited notice.
Added
Any significant cancellation, decrease or delay in customer orders or take rates could have a material adverse effect on our business, financial condition and results of operations. 6 Table of Contents We operate our business on a global basis and changes to trade policy, including tariffs and customs regulations, could have a material and adverse effect on our business.
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We have recently experienced significant executive turnover, whether planned (through retirement) or otherwise, including the retirement of our former Chief Executive Officer, the departure of his replacement, the departure of our former Chief Operating Officer and the planned retirement in July 2024 of our Chief Financial Officer.
Added
In the past few months, the U.S. administration has proposed and imposed extensive tariffs on many countries where we do business including a number of broad, product specific tariffs most notably with respect to the automotive and commercial vehicle industries. While some tariffs have been reduced from their peak numbers, trade tensions continue to be high.
Removed
On June 25, 2024, we announced the appointment of Jon DeGaynor as our new President and Chief Executive Officer, commencing as of July 15, 2024. If we are unable to manage this leadership transition effectively, including through our interim executive officer arrangements and on-boarding permanent replacements, our ability to implement our strategic initiatives may be impaired.
Added
We expect that new tariffs may continue to be imposed by the U.S. and retaliatory measures taken by other nations in turn.
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The arrangements with our major customers generally provide for supplying their requirements for particular models, rather than for manufacturing a specific quantity of products. Such supply arrangements cover a period from one year to the life of the model, which is generally three to seven years.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThese cybersecurity threats and related risks make it imperative that we remain vigilant and apprised of developments in the information security field, and we expend considerable resources on cybersecurity. With Board of Directors and Audit Committee oversight, as part of our annual enterprise-wide risk management process, we assess and manage the material risks associated with cybersecurity.
Biggest changeThese cybersecurity threats and related risks make it imperative that we remain vigilant and apprised of developments in the information security field, and we expend considerable resources on cybersecurity. With Board of Directors and Audit Committee oversight, we assess and manage the material risks associated with cybersecurity as part of our risk management process.
Our CEO, Chief Financial Officer, General Counsel and CIO are responsible for assessing such incidents for materiality, ensuring that any required notification, disclosure or communication occurs and determining, among other things, whether any prohibition on the trading of our common stock by insiders should be imposed prior to the disclosure of information about a material cybersecurity event.
Our CEO, Chief Financial Officer, General Counsel and CIO/CISO are responsible for assessing such incidents for materiality, ensuring that any required notification, disclosure or communication occurs and determining, among other things, whether any prohibition on the trading of our common stock by insiders should be imposed prior to the disclosure of information about a material cybersecurity event.
Our CIO, who has more than 25 years of experience in technology and information security risk management across a number of organizations, is responsible for overseeing the risks related to cybersecurity. He is responsible for cybersecurity incident preparedness, approving cybersecurity processes, reviewing security assessments and other security-related reports, and providing the senior leadership with regular updates on cybersecurity-related matters.
Our CIO/CISO, who has more than 25 years of experience in technology and information security risk management across a number of organizations, is responsible for overseeing the risks related to cybersecurity. He is responsible for cybersecurity incident preparedness, approving cybersecurity processes, reviewing security assessments and other security-related reports, and providing senior leadership with regular updates on cybersecurity-related matters.
In the event of a suspected incident, we intend to follow our incident response plan, which outlines the steps to be followed from incident detection to mitigation, recovery and notification, including notifying the CIO and functional areas (e.g. legal) as appropriate.
In the event of a suspected incident, we intend to follow our incident response plan, which outlines the steps to be followed from incident detection to mitigation, recovery and notification, including notifying the CIO/CISO and functional areas (e.g. legal) as appropriate.
Our cybersecurity program and related initiatives are managed by the CIO, and our IT team is responsible for enterprise-wide informational technology, coordinating with various functions and business groups to ensure they are following best practices.
Our cybersecurity program and related initiatives are managed by the CIO/CISO, and our IT team is responsible for enterprise-wide informational technology, coordinating with various functions and business groups to ensure they are following best practices.
The CIO will make any required communications to the Chief Executive Officer (CEO) and other senior leadership, with the CIO making any required communications to the Board and Audit Committee.
The CIO/CISO will make any required communications to the Chief Executive Officer (CEO) and other senior leadership, with the CIO/CISO making any required communications to the Board and Audit Committee.
For further information regarding cybersecurity risks, see Item 1A, “Risk Factors” in this Annual Report. 15 Table of Contents Governance Our Board of Directors, as a whole, has oversight responsibility for our strategic and operational risks, including cybersecurity. The Audit Committee of the Board of Directors is responsible for regularly reviewing with management our cybersecurity practices and policies.
For further information regarding cybersecurity risks , see Item 1A, “Risk Factors” in this Annual Report. 16 Table of Contents Governance Our Board of Directors, as a whole, has oversight responsibility for our strategic and operational risks, including cybersecurity. The Board of Directors is responsible for regularly reviewing with management our cybersecurity practices and policies.
As part of its oversight role, the Audit Committee receives regular reporting about our strategy, programs, incidents and threats, and other developments and action items related to cybersecurity regularly throughout the year, including through quarterly updates from the Chief Information Officer (“CIO”) who is also our Chief Information Security Officer.
As part of its oversight role, the Board of Directors receives regular reporting about our strategy, programs, incidents and threats, and other developments and action items related to cybersecurity regularly throughout the year , including through quarterly updates from the Chief Information Officer (“CIO”) who is also our Chief Information Security Officer (“CISO”).
Removed
The Audit Committee regularly reports risks and compliance actions to the Board.
Removed
In addition, on at least an annual basis, the full Board of Directors receives reports, summaries or presentations related to cybersecurity threats, risk, mitigation and related processes from our CIO.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following table provides details regarding our significant properties as of April 27, 2024: Location Segment(s) Use Owned/ Leased Approximate Square Footage Lontzen, Belgium Automotive Manufacturing and Warehousing Owned 108,500 Dongguan, China Automotive and Industrial Manufacturing Leased 197,000 Shanghai, China Automotive and Industrial Manufacturing Leased 85,000 Suzhou, China Automotive and Industrial Manufacturing Leased 358,000 Cairo, Egypt Automotive and Industrial Manufacturing Leased 277,000 Chicago, Illinois Other Corporate Headquarters Leased 24,000 Chicago, Illinois Interface Manufacturing Owned 118,000 McAllen, Texas Automotive, Industrial and Interface Manufacturing Leased 230,000 Mriehel, Malta Automotive and Industrial Manufacturing Leased 383,000 Monterrey, Mexico Automotive, Industrial and Interface Manufacturing Leased 379,000 Santa Catarina Nuevo Léon, Mexico Automotive Manufacturing Leased 158,000
Biggest changeThe following table provides details regarding our significant properties as of May 3, 2025: Location Segment(s) Use Owned/ Leased Approximate Square Footage Lontzen, Belgium Automotive and Industrial Manufacturing and Warehousing Owned 135,500 Dongguan, China Automotive and Industrial Manufacturing Leased 324,000 Shanghai, China Automotive and Industrial Manufacturing Leased 50,000 Suzhou, China Automotive and Industrial Manufacturing Leased 376,000 Cairo, Egypt Automotive and Industrial Manufacturing Leased 330,000 Chicago, Illinois Other Corporate Headquarters Leased 24,000 McAllen, Texas Automotive, Industrial and Interface Warehousing Leased 230,000 Mriehel, Malta Automotive and Industrial Manufacturing Leased 383,000 Monterrey, Mexico Automotive, Industrial and Interface Manufacturing Leased 379,000 Santa Catarina Nuevo Léon, Mexico Automotive Manufacturing Leased 158,000
Item 2. P roperties Our corporate headquarters is located in Chicago, Illinois. As of April 27, 2024, we leased or owned 34 operating facilities. We believe our facilities are in good condition and adequate to meet our current and reasonably anticipated future needs.
Item 2. P roperties Our corporate headquarters is located in Chicago, Illinois. As of May 3, 2025, we leased or owned 31 operating facilities. We believe our facilities are in good condition and adequate to meet our current and reasonably anticipated future needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings From time to time, we have and may become involved in various litigation matters, including administrative proceedings, regulatory proceedings, environmental matters, and commercial disputes. The impact and outcome of litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that could harm our business.
Biggest changeThe impact and outcome of litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that could harm our business. 17 Table of Contents
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We are not currently aware of any legal proceedings or claims to which we are a party or to which our property is subject that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or results of operations. 16 Table of Contents
Added
Item 3. Legal Proceedings From time to time, we have and may become involved in various litigation matters, including administrative proceedings, regulatory proceedings, environmental matters, and commercial disputes. See Note 12, “Commitments and Contingencies” to the consolidated financial statements in this Annual Report for a description of certain of our pending legal proceedings.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeVyverberg 55 General Counsel of the Company since June 2022 and previously Vice President Legal Affairs of the Company since February 2021; prior thereto, Of Counsel to the law firm Locke Lord LLP. All executive officers are elected by the Board of Directors and serve a term of one year or until their successors are duly elected and qualified.
Biggest changeVyverberg 56 General Counsel of the Company since June 2022 and previously Vice President Legal Affairs of the Company since February 2021; prior thereto, Of Counsel to the law firm Locke Lord LLP.
Item 4. Mine Sa fety Disclosures Not applicable. Supplementary Item: Information about our Executive Officers Name Age Offices and Positions Held and Length of Service as Officer Kevin Nystrom 64 Interim Chief Executive Officer since May 7, 2024. Partner and Managing Director of AlixPartners LLP, a business advisory firm, since 1999. Ronald L.G.
Item 4. Mine Sa fety Disclosures Not applicable. Supplementary Item: Information about our Executive Officers Name Age Offices and Positions Held and Length of Service as Officer Jonathan B. DeGaynor 59 President and Chief Executive Officer of the Company since July 2024; prior thereto, served as President and Chief Executive Officer of Stoneridge, Inc. from 2015 to 2023.
Removed
Tsoumas 63 Chief Financial Officer of the Company since 2018; prior thereto, served as Controller of the Company from 2007 to 2018. Andrea J. Barry 61 Chief Administrative Officer of the Company since January 2022 and Chief Human Resources Officer of the Company since 2017; served as CHRO for Wirtz Beverage Group from 2013 to 2016. Kevin M.
Added
Laura Kowalchik 56 Chief Financial Officer of the Company since October 2024; prior thereto, served as Chief Financial Officer of Communications & Power Industries from 2023 to 2024 and Chief Financial Officer of Dayco Products, LLC from 2019 to 2023. John T.
Removed
Martin 58 Vice President, North America since 2020; prior thereto, Vice President and General Manager, North America Automotive, from 2019 to 2020, General Manager, North America Automotive in 2018, and Director of Sales, North America Automotive from 2014 to 2017. Anil V.
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Erwin 57 Chief Procurement and EHS Officer of the Company since March 2025 and previously Chief Procurement Officer since July 2024; served in several roles at Guardian Industries, most recently as Global Vice President of Strategic Sourcing & Procurement from 2020 to 2021.
Removed
Shetty 58 Vice President of the Company since September 2023; prior thereto, President, Dabir Surfaces since 2018, Vice President and General Manager, Asia, from 2015 to 2018, and Executive Managing Director, Asia from 2011 to 2015. Kerry A.
Added
Lars Ullrich 54 Senior Vice President, Global Automotive Business of the Company since December 2024; prior thereto, served as Head of Region Americas and Chief Business Officer for Larsen and Toubro Semiconductor Technologies from February 2024 to November 2024 and Senior Vice President at Infineon Technologies Americas from 2019 to 2024. Kerry A.
Removed
As part of his regular employment, Mr. Nystrom has acted on assignment at a number of companies implementing restructuring plans, including through the United States bankruptcy laws, most recently Aero Group Holdings, an airline, from March 2022 through April 2024. We do not believe such events are material to an evaluation of the ability or integrity of Mr.
Added
All executive officers are elected by the Board of Directors and serve a term of one year or until their successors are duly elected and qualified. 18 Table of Contents PART II
Removed
Nystrom to serve as an interim executive officer of the Company. On June 25, 2024, we announced the appointment of Jon DeGaynor as our new President and Chief Executive Officer, beginning July 15, 2024. Mr. DeGaynor, age 58, currently serves as non-employee Executive Chairman of Racing and Performance, Inc., an automotive ‎performance systems supplier in the aftermarket space.
Removed
He previously served as President and CEO of Stoneridge, ‎Inc., a publicly traded global designer and manufacturer of highly engineered electrical and electronic systems, ‎components, and modules for the automotive, commercial, off-highway and agricultural vehicle markets, from ‎‎2015 to 2023. ‎ 17 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+5 added−3 removed2 unchanged
Biggest changeThe following table provides information about our purchases of equity securities during the three months ended April 27, 2024: Fiscal Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of the publicly announced plan Approximate dollar value of shares that may yet be purchased under the program (in millions) January 28, 2024 through February 24, 2024 68,000 $ 21.32 68,000 $ 68.5 February 25, 2024 through March 30, 2024 28,000 $ 21.44 28,000 $ 67.9 March 31, 2024 through April 27, 2024 78,215 $ 12.19 78,215 $ 66.9 Total 174,215 174,215 Securities Authorized for Issuance Under Equity Compensation Plans See Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters,” of this Annual Report for certain information relating to our equity compensation plans. 18 Table of Contents Stock Performance The following graph shows the cumulative total stockholder return on our common stock over the period spanning April 27, 2019 to April 27, 2024, as compared with that of the Russell 2000 Index, and our Fiscal 2024 Peer Group.
Biggest changeThe following table provides information about our purchases of equity securities during the three months ended May 3, 2025: Period Total number of shares purchased 1 Average price paid per share Total number of shares purchased as part of publicly announced plan Approximate dollar value of shares that may yet be purchased under the program (in millions) February 2, 2025 through March 1, 2025 27,784 $ 10.80 — $ 200.0 March 2, 2025 through April 5, 2025 63,799 $ 6.55 — $ 200.0 April 6, 2025 through May 3, 2025 13,445 $ 6.27 — $ 200.0 1 Represents 105,028 shares of common stock that were surrendered by employees to satisfy tax withholding obligations in connection with the vesting of restricted stock units.
Inc Patrick Industries, Inc. Benchmark Electronics, Inc. Gentherm Incorporated Rogers Corporation Cooper-Standard Holdings Inc LCI Industries Stoneridge, Inc. CTS Corporation Littelfuse, Inc. TTM Technologies, Inc. Fabrinet OSI Systems, Inc. Visteon Corporation The Compensation Committee of the Board of Directors reviews the peer group annually and from time to time changes the composition of the peer group where changes are appropriate.
Gentherm Incorporated Rogers Corporation Cooper-Standard Holdings Inc. LCI Industries Stoneridge, Inc. CTS Corporation Littelfuse, Inc. TTM Technologies, Inc. Fabrinet OSI Systems, Inc. Visteon Corporation The Compensation Committee of the Board of Directors reviews the peer group annually and from time to time changes the composition of the peer group where changes are appropriate.
Item 5. Market for Registrant’s Common Equity, Related Sto ckholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the New York Stock Exchange under the symbol “MEI”. As of July 8, 2024, we had 343 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Sto ckholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the New York Stock Exchange under the symbol “MEI”. As of June 26, 2025, we had 324 holders of record of our common stock.
On June 13, 2024, the Board of Directors authorized a new share buyback program, commencing on June 17, 2024, for the purchase of up to $200.0 million (the “2024 Buyback Program”) of our outstanding common stock through June 17, 2026.
Issuer Purchases of Equity Securities In June 2024, the Board of Directors approved a share buyback authorization for the purchase of up to $200.0 million of our outstanding common stock through June 17, 2026 (the “2024 Buyback Authorization”).
Purchases under these programs may be made on the open market, in private transactions or pursuant to purchase plans designed to comply with Rule 10b5-1 of the Securities Exchange Act of 1934. As of April 27, 2024, we had purchased and retired $133.1 million of common stock under the 2021 Buyback Program.
Purchases under the 2024 Buyback Authorization may be made on the open market, including pursuant to purchase plans designed to comply with Rule 10b5-1 of the Securities Exchange Act of 1934, or in private transactions. We have not made any purchases under the 2024 Buyback Authorization.
Removed
Issuer Purchases of Equity Securities On March 31, 2021, as subsequently amended on June 16, 2022, the Board of Directors authorized the purchase of up to $200.0 million of our outstanding common stock through June 14, 2024 (the “2021 Buyback Program”).
Added
Securities Authorized for Issuance Under Equity Compensation Plans See Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters,” of this Annual Report for certain information relating to our equity compensation plans.
Removed
We have assumed that dividends have been reinvested and that $100 was invested on April 27, 2019. The stock price performance included in this graph is historical and not necessarily indicative of future stock price performance.
Added
Stock Performance The following graph shows the cumulative total stockholder return on our common stock over the period spanning May 2, 2020 to May 3, 2025, as compared with that of the Russell 2000 Index, our current peer group (“Fiscal 2025 Peer Group”), and our previous per group (“Fiscal 2024 Peer Group”).
Removed
Company/Index April 27, 2019 May 2, 2020 May 1, 2021 April 30, 2022 April 29, 2023 April 27, 2024 Methode Electronics, Inc. $ 100.00 $ 98.67 $ 157.35 $ 158.18 $ 147.39 $ 45.17 Russell 2000 Index 100.00 80.39 146.20 121.54 117.11 134.58 Fiscal 2024 Peer Group 100.00 78.85 134.65 124.53 133.03 147.25 The Fiscal 2024 Peer Group consists of the following fifteen public companies: Belden Corporation Franklin Electric Company.
Added
Three companies were removed from the Fiscal 2024 Peer Group and replaced with three companies that align more closely to Methode in terms of revenue size and type of business. We have assumed that dividends have been reinvested and that $100 was invested on May 2, 2020.
Added
The stock price performance included in this graph is historical and not necessarily indicative of future stock price performance. 19 Table of Contents Company/Index May 2, 2020 May 1, 2021 April 30, 2022 April 29, 2023 April 27, 2024 May 3, 2025 Methode Electronics, Inc. $ 100.00 $ 159.46 $ 160.30 $ 149.37 $ 45.77 $ 26.53 Russell 2000 Index 100.00 181.87 151.19 145.68 167.42 171.33 Fiscal 2025 Peer Group 100.00 164.01 157.18 163.60 204.43 209.16 Fiscal 2024 Peer Group 100.00 170.77 157.95 168.72 186.76 188.18 The Fiscal 2025 Peer Group consists of the following fifteen public companies: Belden Inc.
Added
Franklin Electric Co., Inc. Modine Manufacturing Company Benchmark Electronics, Inc. Gentherm Incorporated OSI Systems, Inc. Cooper-Standard Holdings Inc. Kimball Electronics, Inc. Rogers Corporation CTS Corporation Knowles Corporation Stoneridge, Inc. Fabrinet Littelfuse, Inc. TTM Technologies, Inc. The Fiscal 2024 Peer Group consists of the following fifteen public companies: Belden Inc. Franklin Electric Co., Inc. Patrick Industries, Inc. Benchmark Electronics, Inc.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

71 edited+19 added−55 removed23 unchanged
Biggest changeThe table below compares our results of operations between fiscal 2024 and fiscal 2023: Fiscal Year Ended (in millions) April 27, 2024 April 29, 2023 Net sales $ 1,114.5 $ 1,179.6 Cost of products sold 935.7 915.5 Gross profit 178.8 264.1 Selling and administrative expenses 160.9 154.9 Goodwill impairment 105.9 — Amortization of intangibles 24.0 18.8 Interest expense, net 16.7 2.7 Other income, net (0.6 ) (2.4 ) Income tax (benefit) expense (4.8 ) 13.0 Net (loss) income (123.3 ) 77.1 Net income attributable to redeemable noncontrolling interest — — Net (loss) income attributable to Methode $ (123.3 ) $ 77.1 Net sales Net sales decreased $65.1 million, or 5.5%, to $1,114.5 million in fiscal 2024, compared to $1,179.6 million in fiscal 2023.
Biggest changeConsolidated Results of Operations A detailed comparison of our results of operations between fiscal 2024 and fiscal 2023 can be found in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our fiscal 2024 Annual Report on Form 10-K filed with the SEC on July 11, 2024 The table below compares our results of operations between fiscal 2025 and fiscal 2024: Fiscal Year Ended May 3, 2025 April 27, 2024 (in millions) (53 Weeks) (52 Weeks) Net sales $ 1,048.1 $ 1,114.5 Cost of products sold 884.7 935.7 Gross profit 163.4 178.8 Selling and administrative expenses 163.9 160.9 Goodwill impairment — 105.9 Amortization of intangibles 23.4 24.0 Interest expense, net 22.0 16.7 Other expense (income), net 4.2 (0.6 ) Income tax expense (benefit) 12.5 (4.8 ) Net loss $ (62.6 ) $ (123.3 ) Net sales Net sales decreased $66.4 million, or 6.0%, to $1,048.1 million in fiscal 2025, compared to $1,114.5 million in fiscal 2024.
Although we currently anticipate, based on our current projections and analyses, that we will be in compliance with the financial covenants contained in the Amended Credit Agreement, no assurance can be given that we will be and remain in compliance with such covenants in the future.
Although we currently anticipate, based on our current projections and analyses, that we will be in compliance with the amended financial covenants contained in the Amended Credit Agreement, no assurance can be given that we will be and remain in compliance with such covenants in the future.
The determination of discounted cash flows are based on management’s estimates of revenue growth rates and earnings before interest, taxes, depreciation and amortization (“EBITDA”) margin, taking into consideration business and market conditions for the countries and markets in which the reporting unit operates.
The determination of discounted cash flows is based on management’s estimates of revenue growth rates and earnings before interest, taxes, depreciation and amortization (“EBITDA”) margin, taking into consideration business and market conditions for the countries and markets in which the reporting unit operates.
We consider the qualitative factors and weight of the evidence obtained to determine if it is more likely than not that a reporting unit’s fair value is less than the carrying amount. 28 Table of Contents For the quantitative assessment, we utilize either of, or a combination of, the income approach and market approach to estimate the fair value of the reporting unit.
We consider the qualitative factors and weight of the evidence obtained to determine if it is more likely than not that a reporting unit’s fair value is less than the carrying amount. For the quantitative assessment, we utilize either, or a combination of, the income approach and market approach to estimate the fair value of the reporting unit.
On March 6, 2024, we entered into a First Amendment to Second Amended and Restated Credit Agreement (the “First Amendment”) with Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, the other Lenders party thereto and other parties thereto.
On March 6, 2024, we entered into a First Amendment to Second Amended and Restated Credit Agreement (the “First Amendment”) and on July 9, 2024, we entered into a Second Amendment to Second Amended and Restated Credit Agreement and First Amendment to Second Amended and Restated Guaranty (the “Second Amendment”) with Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, the other Lenders party thereto and other parties thereto.
New Accounting Pronouncements For more information regarding new applicable accounting pronouncements, see Note 1, “Description of Business and Summary of Significant Accounting Policies” to the consolidated financial statements included in this Annual Report. 30 Table of Contents
New Accounting Pronouncements For more information regarding new applicable accounting pronouncements, see Note 1, “Description of Business and Summary of Significant Accounting Policies” to the consolidated financial statements included in this Annual Report.
The Credit Agreement, as amended by the First Amendment and the Second Amendment, is referred to herein as the “Amended Credit Agreement.” The Amended Credit Agreement provides for a secured multicurrency revolving credit facility of $500 million.
The Credit Agreement, as amended by the First Amendment, the Second Amendment and the Third Amendment is referred to herein as the “Amended Credit Agreement.” The Amended Credit Agreement provides for a secured multicurrency revolving credit facility of $400 million.
On June 13, 2024, the Board of Directors authorized a new share buyback program, commencing on June 17, 2024, for the purchase of up to $200.0 million (the “2024 Buyback Program”) of our outstanding common stock through June 17, 2026.
On June 13, 2024, the Board of Directors authorized a new share buyback authorization, commencing on June 17, 2024, for the purchase of up to $200.0 million (the “2024 Buyback Authorization”) of our outstanding common stock through June 17, 2026.
Our solutions are found in the end markets of transportation (including automotive, commercial vehicle, e-bike, aerospace, bus and rail), cloud computing infrastructure, construction equipment and consumer appliance. Our business is managed on a segment basis, with those segments being Automotive, Industrial, Interface and Medical.
Our solutions are found in the end markets of transportation (including automotive, commercial vehicle, e-bike, aerospace, bus and rail), cloud computing infrastructure, construction equipment and consumer appliance. Our business is managed on a segment basis, with those segments being Automotive, Industrial and Interface. We reported a fourth segment, Medical, through fiscal 2024.
Share Buyback Programs On March 31, 2021, as subsequently amended on June 16, 2022, the Board of Directors authorized the purchase of up to $200.0 million of our outstanding common stock through June 14, 2024 (the “2021 Buyback Program”).
Repurchases of Common Stock On March 31, 2021, as subsequently amended on June 16, 2022, the Board of Directors authorized the purchase of up to $200.0 million of our outstanding common stock through June 14, 2024 (the “2021 Buyback Authorization”).
The decrease was due to lower net income adjusted for non-cash items, partially offset by higher cash inflows related to changes in operating assets and liabilities. The $23.8 million of cash inflows for operating assets and liabilities in fiscal 2024 was primarily due to lower accounts receivable, partially offset by higher inventory.
The decrease was due to lower cash inflows related to changes in operating assets and liabilities and lower net income adjusted for non-cash items. The $3.7 million of cash inflows for operating assets and liabilities in fiscal 2025 was primarily due to lower accounts receivable, partially offset by higher inventory.
We evaluate our ability to realize the tax benefits associated with deferred tax assets by assessing the adequacy of future expected taxable income, including the reversal of existing temporary differences, historical and projected operating results, and the availability of prudent and feasible tax planning strategies. As of April 27, 2024, we had a valuation allowance of $5.8 million.
We evaluate our ability to realize the tax benefits associated with deferred tax assets by assessing the adequacy of future expected taxable income, including the reversal of existing temporary differences, historical and projected operating results, and the availability of prudent and feasible tax planning strategies. As of May 3, 2025, we had a valuation allowance of $20.7 million.
Purchases may be made on the open market, in private transactions or pursuant to purchase plans designed to comply with Rule 10b5-1 of the Securities Exchange Act of 1934. As of April 27, 2024, a total of 3,417,961 shares had been purchased under the 2021 Buyback Program at a total cost of $133.1 million since the commencement of that program.
Purchases may be made on the open market, in private transactions or pursuant to purchase plans designed to comply with Rule 10b5-1 of the Securities Exchange Act of 1934. As of May 3, 2025, a total of 3,553,961 shares had been purchased under the 2021 Buyback Authorization at a total cost of $134.6 million since the commencement of that authorization.
Among other things, the Second Amendment (i) reduced the revolving credit commitments from $750 million to $500 million, (ii) granted a security interest in substantially all of the personal property of the Company and our U.S. subsidiaries that are guarantors, including 100% of the equity interests of their respective U.S. subsidiaries and 65% of the equity interests of their respective foreign subsidiaries (or such greater amount to the extent such pledge could not reasonably cause adverse tax consequences), (iii) amended the consolidated interest coverage ratio covenant for the quarters ending July 27, 2024, October 26, 2024, January 25, 2025 and April 26, 2025, (iv) amended the consolidated leverage ratio covenant for the quarter ending July 27, 2024 and each subsequent fiscal quarter, (v) amended certain interest rate provisions, (vi) added a requirement to provide monthly financial statements to the lenders through the period ending July 25, 2025, (vii) decreased the general basket exceptions to certain covenants restricting certain Company investments, liens and indebtedness for specified periods of time, (viii) increased, for fiscal year 2025, the general basket exception to a covenant restricting certain Company dispositions of property, (ix) added an “anti-cash hoarding” requirement, applicable during the period from the effective date of the Second Amendment until the earlier to occur of (a) the delivery of financial statements and a compliance certificate for the fiscal quarter ending July 25, 2025 and (b) the delivery of compliance certificates for two consecutive fiscal quarters demonstrating that the our consolidated leverage ratio as of the last day of such fiscal quarters was less than 3.00:1.00, that if we have cash on hand (subject to certain exceptions) of more than $65 million for 10 consecutive business days, we shall prepay the indebtedness under the credit facility by the amount of such excess and (x) made certain other changes to the investment, restricted payment and indebtedness baskets.
Among other things, the Second Amendment (i) reduced the revolving credit commitments from $750 million to $500 million (which commitments were subsequently further reduced, as discussed below), (ii) granted a security interest in substantially all of the personal property of the Company and its U.S. subsidiaries that are guarantors, including 100% of the equity interests of their respective U.S. subsidiaries and 65% of the equity interests of their respective foreign subsidiaries (or such greater amount to the extent such pledge could not reasonably cause adverse tax consequences), (iii) amended the consolidated interest coverage ratio covenant for each quarter in fiscal 2025 to relax that covenant to some extent for each of those quarters, (iv) amended the consolidated leverage ratio covenant for the quarter ending July 27, 2024 and each subsequent fiscal quarter to relax that covenant to some extent for each of those quarters, (v) amended certain interest rate provisions, (vi) added a requirement to provide monthly financial statements to the lenders through the period ending August 2, 2025, (vii) decreased the general basket exceptions to certain covenants restricting certain investments by, liens on and indebtedness of the Company and its subsidiaries for specified periods of time, (viii) increased, for fiscal 2025, the general basket exception to a covenant restricting certain dispositions of property by the Company and its subsidiaries, (ix) added an “anti-cash hoarding” requirement, applicable during the period from the effective date of the Second Amendment until the earlier to occur of (a) the delivery of financial statements and a compliance certificate for the fiscal quarter ending August 2, 2025 and (b) the delivery of compliance certificates for two consecutive fiscal quarters demonstrating that the our consolidated leverage ratio as of the last day of such fiscal quarters was less than 3.00:1.00, that if we have cash on hand in the U.S.
Medical Fiscal Year Ended (in millions) April 27, 2024 April 29, 2023 Net sales $ 2.4 $ 3.6 Gross profit $ (0.2 ) $ (0.5 ) Loss from operations $ (3.0 ) $ (6.1 ) In the first quarter of fiscal 2024, we made the decision to initiate the discontinuation of the Dabir Surfaces business (which accounts for all of the Medical segment’s financial results).
Medical Fiscal Year Ended May 3, 2025 April 27, 2024 (in millions) (53 Weeks) (52 Weeks) Net sales $ — $ 2.4 Gross profit $ — $ (0.2 ) Loss from operations $ — $ (3.0 ) In the first quarter of fiscal 2024, we made the decision to initiate the discontinuation of the Dabir Surfaces business (which accounts for all of the Medical segment’s financial results).
At April 27, 2024, we had $161.5 million of cash and cash equivalents, of which $53.4 million was held in subsidiaries outside the U.S. Cash held by these subsidiaries is used to fund operational activities and can be repatriated, primarily through the payment of dividends and the repayment of intercompany loans, without creating material additional income tax expense.
At May 3, 2025, we had $103.6 million of cash and cash equivalents, of which $78.2 million was held in subsidiaries outside the U.S. Cash held by these subsidiaries is used to fund operational activities and can be repatriated, primarily through the payment of dividends and the repayment of intercompany loans, without creating material additional income tax expense.
However, if we are not able to mitigate any direct or indirect supply chain disruptions, this may have a material adverse impact on our financial condition, results of operations and cash flows.
We continue to work closely with suppliers and customers to minimize the potential adverse impact from global supply chain disruptions. However, if we are not able to mitigate any direct or indirect supply chain disruptions, this may have a material adverse impact on our financial condition, results of operations and cash flows.
Amended Credit Agreement On October 31, 2022, we entered into a Second Amended and Restated Credit Agreement (the “Credit Agreement”) with Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and the Lenders and other parties named therein.
Upon adoption of the 2024 Buyback Authorization, no further repurchases can be made under the 2021 Buyback Authorization. 25 Table of Contents Amended Credit Agreement On October 31, 2022, we entered into a Second Amended and Restated Credit Agreement (the “Credit Agreement”) with Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and the Lenders and other parties named therein.
Contractual Obligations The following table summarizes our significant known contractual cash obligations and commercial commitments as of April 27, 2024: Payments Due By Period (in millions) Total Less than 1 year 1-3 years 3-5 years More than 5 years Finance leases $ 0.5 $ 0.2 $ 0.3 $ - $ — Operating leases 31.0 7.7 13.0 6.2 4.1 Debt (1) 334.5 0.2 0.4 333.5 0.4 Estimated interest on debt (2) 43.1 17.3 17.2 8.6 — Deferred compensation 9.7 2.3 5.4 1.4 0.6 Total $ 418.8 $ 27.7 $ 36.3 $ 349.7 $ 5.1 (1) Assumes the outstanding borrowings under the revolving credit facility will be repaid upon maturity of the credit agreement in October 2027.
In fiscal 2025, we paid $1.6 million of cash for share repurchases, compared to $13.7 million in fiscal 2024. 27 Table of Contents Contractual Obligations The following table summarizes our significant known contractual cash obligations and commercial commitments as of May 3, 2025: Payments Due By Period (in millions) Total Less than 1 year 1-3 years 3-5 years More than 5 years Finance leases $ 0.5 $ 0.2 $ 0.3 $ — $ — Operating leases 28.6 8.3 13.1 4.2 3.0 Debt (1) 320.7 0.2 319.8 0.4 0.3 Estimated interest on debt (2) 51.9 20.8 20.9 10.2 — Deferred compensation 9.4 1.5 1.9 0.9 5.1 Total $ 411.1 $ 31.0 $ 356.0 $ 15.7 $ 8.4 (1) Assumes the outstanding borrowings under the revolving credit facility will be repaid upon maturity of the credit agreement in October 2027.
The increase was due to higher gross profit and lower selling and administrative expenses, primarily professional fees.
The increase was primarily due to higher gross profit, partially offset by higher selling and administrative expenses.
We performed our annual goodwill impairment analysis for each of our reporting units at the beginning of the fourth quarter of fiscal 2024. Based on this analysis, we determined that the fair value of each of our reporting units was in excess of its carrying value.
At the beginning of the fourth quarter of fiscal 2025, we performed a quantitative goodwill impairment analysis for our Grakon Industrial and Nordic Lights reporting units. Based on this analysis, we determined that the fair value of both of these reporting units was in excess of its carrying value.
The increase was due to higher borrowings and increased interest rates. Other income, net Other income, net was $0.6 million in fiscal 2024, compared to $2.4 million in fiscal 2023. The decrease was due to lower international government assistance, partially offset by net gains on sale of assets and lower foreign exchange losses.
The decrease was due to higher foreign exchange losses and lower net gains on sale of assets, partially offset by higher international government assistance. Net foreign exchange loss was $5.5 million in fiscal 2025, compared to $2.2 million in fiscal 2024.
Industrial Fiscal Year Ended (in millions) April 27, 2024 April 29, 2023 Net sales $ 460.1 $ 384.9 Gross profit $ 137.7 $ 127.8 As a percent of net sales 29.9 % 33.2 % Income from operations $ 88.8 $ 93.1 As a percent of net sales 19.3 % 24.2 % Customer cost recoveries $ 0.8 $ 4.7 23 Table of Contents Net sales Industrial segment net sales increased $75.2 million, or 19.5%, to $460.1 million in fiscal 2024, compared to $384.9 million in fiscal 2023.
Industrial Fiscal Year Ended May 3, 2025 April 27, 2024 (in millions) (53 Weeks) (52 Weeks) Net sales $ 487.4 $ 460.1 Gross profit $ 144.2 $ 137.7 As a percent of net sales 29.6 % 29.9 % Income from operations $ 90.0 $ 88.8 As a percent of net sales 18.5 % 19.3 % Net sales Industrial segment net sales increased $27.3 million, or 5.9%, to $487.4 million in fiscal 2025, compared to $460.1 million in fiscal 2024.
In the event our operating performance improves or deteriorates in a filing jurisdiction or entity, future assessments could conclude a smaller or larger valuation allowance will be needed.
In the event our operating performance improves or deteriorates in a filing jurisdiction or entity, future assessments could conclude a smaller or larger valuation allowance will be needed. Due to the complexity of some of these uncertainties, the ultimate resolution may be materially different from the current estimate.
Our primary sources of liquidity are cash flows from operations, existing cash balances and borrowings under our senior secured credit agreement. We believe our liquidity position will be sufficient to fund our existing operations and current commitments for at least the next twelve months.
We believe our liquidity position will be sufficient to fund our existing operations and current commitments for at least the next twelve months.
However, as noted in Note 7 to the consolidated financial statements in this Annual Report, the fair value of the Nordic Lights and North American Automotive (“NAA”) reporting units exceeded their carrying value by less than 10%. As discussed below, the NAA reporting unit goodwill was fully impaired as of April 27, 2024.
However, as noted in Note 7 to the consolidated financial statements in this Annual Report, the fair value of the Nordic Lights reporting unit exceeded its carrying value by less than 10%.
The cash flow sensitivities do not consider the offsetting impact of a lower discount rate assumption to reflect the reduced risk in estimated future cash flow growth used under the income approach or the related impacts on pricing multiples used under the market approach. • A hypothetical increase in the discount rate of 50 basis points would result in goodwill impairment of approximately $6.0 million; and • A hypothetical decrease in cash flows of 10% over the entire forecast period would result in goodwill impairment of approximately $14.0 million.
The cash flow sensitivities do not consider the offsetting impact of a lower discount rate assumption to reflect the reduced risk in estimated future cash flow growth used under the income approach or the related impacts on pricing multiples used under the market approach. Impairment of long-lived assets.
Excluding the impact of foreign currency translation, gross profit decreased $96.7 million. Gross profit margins decreased to 5.1% in fiscal 2024, from 17.1% in fiscal 2023.
Gross profit Automotive segment gross profit decreased $25.7 million, or 84.5%, to $4.7 million in fiscal 2025, compared to $30.4 million in fiscal 2024. Excluding the impact of foreign currency translation, gross profit decreased $25.0 million. Gross profit margins decreased to 0.9% in fiscal 2025, from 5.1% in fiscal 2024.
Excluding Nordic Lights and foreign currency translation, net income decreased $204.3 million as a result of the reasons described above. 22 Table of Contents Operating Segments Automotive Fiscal Year Ended (in millions) April 27, 2024 April 29, 2023 Net sales North America $ 265.6 $ 349.0 Europe, the Middle East & Africa (“EMEA”) 216.2 231.2 Asia 116.4 156.0 Net sales 598.2 736.2 Gross profit $ 30.4 $ 126.2 As a percent of net sales 5.1 % 17.1 % (Loss) income from operations $ (140.2 ) $ 67.0 As a percent of net sales (23.4 )% 9.1 % Customer cost recoveries: North America $ 0.1 $ 9.7 EMEA 0.9 3.7 Asia — 0.6 Total $ 1.0 $ 14.0 Net sales Automotive segment net sales decreased $138.0 million, or 18.7%, to $598.2 million in fiscal 2024, compared to $736.2 million in fiscal 2023.
Operating Segments Automotive Fiscal Year Ended May 3, 2025 April 27, 2024 (in millions) (53 Weeks) (52 Weeks) Net sales North America $ 237.1 $ 265.6 Europe, the Middle East & Africa (“EMEA”) 239.5 216.2 Asia 32.3 116.4 Net sales 508.9 598.2 Gross profit $ 4.7 $ 30.4 As a percent of net sales 0.9 % 5.1 % Loss from operations $ (47.7 ) $ (140.2 ) As a percent of net sales (9.4 )% (23.4 )% 23 Table of Contents Net sales Automotive segment net sales decreased $89.3 million, or 14.9%, to $508.9 million in fiscal 2025, compared to $598.2 million in fiscal 2024.
Following the effectiveness of the First Amendment, we were in compliance with the consolidated leverage ratio covenant for the quarter ended January 27, 2024. 25 Table of Contents On July 9, 2024, we entered into a Second Amendment to Second Amended and Restated Credit Agreement and First Amendment to Second Amended and Restated Guaranty (the “Second Amendment”) with Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, the other Lenders party thereto and other parties thereto.
On July 7, 2025, we entered into a Third Amendment to Second Amended and Restated Credit Agreement (the “Third Amendment”) with Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, the other Lenders party thereto and other parties thereto.
Factors that could increase our risk of future non-compliance include those identified in Item 1A, “Risk Factors” of this Annual Report. 26 Table of Contents Cash Flows Fiscal Year Ended (in millions) April 27, 2024 April 29, 2023 Operating activities: Net (loss) income $ (123.3 ) $ 77.1 Non-cash items 147.0 59.2 Changes in operating assets and liabilities 23.8 (3.5 ) Net cash provided by operating activities 47.5 132.8 Net cash used in investing activities (17.5 ) (153.1 ) Net cash (used in) provided by financing activities (18.9 ) 3.2 Effect of foreign currency exchange rate changes on cash and cash equivalents (6.6 ) 2.1 Increase (decrease) in cash and cash equivalents 4.5 (15.0 ) Cash and cash equivalents at beginning of the period 157.0 172.0 Cash and cash equivalents at end of the period $ 161.5 $ 157.0 Operating activities Net cash provided by operating activities decreased $85.3 million to $47.5 million in fiscal 2024, compared to $132.8 million in fiscal 2023.
Cash Flows Fiscal Year Ended May 3, 2025 April 27, 2024 (in millions) (53 Weeks) (52 Weeks) Operating activities: Net loss $ (62.6 ) $ (123.3 ) Non-cash items 85.3 157.4 Changes in operating assets and liabilities 3.7 13.4 Net cash provided by operating activities 26.4 47.5 Net cash used in investing activities (32.9 ) (17.5 ) Net cash used in financing activities (58.9 ) (18.9 ) Effect of foreign currency exchange rate changes on cash and cash equivalents 7.5 (6.6 ) (Decrease) increase in cash and cash equivalents (57.9 ) 4.5 Cash and cash equivalents at beginning of the period 161.5 157.0 Cash and cash equivalents at end of the period $ 103.6 $ 161.5 Operating activities Net cash provided by operating activities decreased $21.1 million to $26.4 million in fiscal 2025, compared to $47.5 million in fiscal 2024.
Excluding Nordic Lights and the impact of foreign currency translation, income from operations decreased $11.9 million. The decrease was primarily due to lower gross profit, partially offset by slightly lower selling and administrative expenses. The decrease in selling and administrative expenses was primarily due to lower legal fees.
Loss from operations in fiscal 2024 included goodwill impairment of $105.9 million. Excluding goodwill impairment and the impact of foreign currency translation, loss from operations increased $12.7 million. The increase was primarily due to lower gross profit, partially offset by lower selling and administrative expenses.
Restructuring and impairment charges included within selling and administrative expenses were $2.0 million in fiscal 2024, compared to $0.5 million in fiscal 2023. Goodwill impairment In fiscal 2024, we recognized goodwill impairment of $105.9 million in the Automotive segment. For further information, see Note 6, “Goodwill and Other Intangible Assets” to the consolidated financial statements included in this Annual Report.
Restructuring and impairment charges included within selling and administrative expenses were $1.6 million in fiscal 2025, compared to $2.0 million in fiscal 2024. 22 Table of Contents Goodwill impairment In fiscal 2024, we recognized goodwill impairment of $105.9 million in the Automotive segment.
Interface Fiscal Year Ended (in millions) April 27, 2024 April 29, 2023 Net sales $ 53.8 $ 54.9 Gross profit $ 10.3 $ 9.3 As a percent of net sales 19.1 % 16.9 % Income from operations $ 6.9 $ 5.5 As a percent of net sales 12.8 % 10.0 % Customer cost recoveries $ 0.4 $ 2.2 Net sales Interface segment net sales decreased $1.1 million, or 2.0%, to $53.8 million in fiscal 2024, compared to $54.9 million in fiscal 2023.
The increase in selling and administrative expenses was primarily due to higher legal fees and compensation expense. 24 Table of Contents Interface Fiscal Year Ended May 3, 2025 April 27, 2024 (in millions) (53 Weeks) (52 Weeks) Net sales $ 51.8 $ 53.8 Gross profit $ 12.7 $ 10.3 As a percent of net sales 24.5 % 19.1 % Income from operations $ 10.3 $ 6.9 As a percent of net sales 19.9 % 12.8 % Net sales Interface segment net sales decreased $2.0 million, or 3.7%, to $51.8 million in fiscal 2025, compared to $53.8 million in fiscal 2024.
For further information, see Note 10, “Debt” to the consolidated financial statements included in this Annual Report.
The covenants in the Amended Credit Agreement include an “anti-cash hoarding” requirement, as discussed above. For further information about the Amended Credit Agreement, see Note 10, “Debt” to the consolidated financial statements included in this Annual Report.
However, we have been unable to fully mitigate or pass through the increases in our costs to our customers, which will likely continue in the future.
As a result of continued inflation, we have implemented measures to mitigate certain adverse effects of higher costs. However, we have been unable to fully mitigate or pass through the increases in our costs to our customers, which will likely continue in the future. Our business in the future will be impacted by the broad trend of electrification.
The Amended Credit Agreement matures on October 31, 2027. As of April 27, 2024, the outstanding balance under the revolving credit facility was $333.0 million, which included $294.0 million (€275.0 million) of euro-denominated borrowings.
The Amended Credit Agreement matures on October 31, 2027. 26 Table of Contents As of May 3, 2025, the outstanding balance under the revolving credit facility was $319.4 million, which included $226.4 million (€200.3 million) of euro-denominated borrowings and $93.0 million of U.S. dollar denominated borrowings.
Towards the end of the second quarter of fiscal 2024, we sold certain assets of the Dabir Surfaces business and have now exited this business, which accounts for the variances in the table above. 24 Table of Contents Financial Condition, Liquidity and Capital Resources Our liquidity requirements are primarily to fund our business operations, including capital expenditures and working capital requirements, as well as to fund debt service requirements, dividends and stock repurchases.
Towards the end of the second quarter of fiscal 2024, we sold certain assets of the Dabir Surfaces business and have now exited this business, which accounts for the variances in the table above.
See the risk factors identified under Item 1A, “Risk Factors” of this Annual Report for more information. Macroeconomic Conditions The global economy continues to experience volatile disruptions including to the commodity, labor and transportation markets, arising from a combination of geopolitical events and various economic and financial factors.
Macroeconomic Conditions The global economy continues to experience volatile disruptions including to the commodity, labor and transportation markets, arising from a combination of geopolitical events and various economic and financial factors. These disruptions have affected our operations and may continue to affect our business, financial condition and results of operations.
Income tax (benefit) expense Income tax benefit was $4.8 million in fiscal 2024, compared to income tax expense of $13.0 million in fiscal 2023. Our effective tax rate decreased to 3.7% in fiscal 2024, compared to 14.4% in fiscal 2023.
Income tax expense (benefit) Income tax expense was $12.5 million in fiscal 2025, compared to income tax benefit of $4.8 million in fiscal 2024.
Excluding Nordic Lights and foreign currency translation, cost of products sold decreased $45.4 million. The decrease was primarily due to lower material costs as a result of a decrease in sales volumes, partially offset by higher wages, product launch costs, freight and restructuring and impairment charges.
The decrease was primarily due to lower material and freight costs as a result of a decrease in sales volumes, lower premium freight and lower restructuring costs, partially offset by higher inventory obsolescence expense of $10.0 million. Restructuring and impairment charges included within cost of products sold were $1.1 million in fiscal 2025, compared to $1.7 million in fiscal 2024.
As of January 27, 2024, we were not in compliance with the original consolidated leverage ratio covenant contained in the Credit Agreement for the quarter ended January 27, 2024.
As of May 3, 2025, we were not in compliance with the consolidated leverage ratio and interest coverage ratio covenants contained in the Credit Agreement (as amended by the First Amendment and Second Amendment) for the quarter ended May 3, 2025.
The decrease was primarily due to lower sales in the Automotive segment, partially offset by the acquisition of Nordic Lights, which contributed $85.1 million of net sales to the Industrial segment, and favorable foreign currency translation of $4.3 million.
The decrease was primarily due to lower sales in the Automotive segment and unfavorable foreign currency translation of $0.7 million, partially offset by higher sales in the Industrial segment. Excluding the impact of foreign currency translation, net sales decreased $65.7 million, or 5.9%.
Investing activities Net cash used in investing activities was $17.5 million in fiscal 2024, compared to $153.1 million in fiscal 2023. In fiscal 2023, we paid $114.6 million of cash, net of cash acquired, for the acquisition of Nordic Lights. Capital expenditures in fiscal 2024 were $50.2 million, compared to $42.0 million in fiscal 2023.
Investing activities Net cash used in investing activities was $32.9 million in fiscal 2025, compared to $17.5 million in fiscal 2024. Capital expenditures in fiscal 2025 were $41.6 million, compared to $50.2 million in fiscal 2024. We received $5.6 million of cash from the sale of assets in fiscal 2025 compared to $21.3 million in fiscal 2024.
Excluding the impact of Nordic Lights, foreign currency translation and customer cost recoveries, net sales decreased $7.6 million, or 2.0%, primarily due to lower demand for power distribution products in the electric vehicle and data center markets and lower sales volumes of commercial vehicle lighting solutions products.
Excluding foreign currency translation, net sales increased $27.6 million, or 6.0%. The increase was due to higher sales volumes of power distribution products for data centers, partially offset by lower sales volumes for lighting products in the commercial vehicle and off-road equipment markets.
Stock-based compensation expense was lower due to a $3.6 million reversal of expense due to forfeitures in fiscal 2024 and a reduction in the number of restricted stock units subject to expense in fiscal 2024. The increase in professional fees was due to higher audit and consulting fees.
Stock-based compensation expense was higher due to a $3.6 million reversal of expense due to forfeitures in fiscal 2024 as well as new awards in fiscal 2025.
Gross profit margin increased to 19.1% in fiscal 2024, from 16.9% in fiscal 2023. The increase in gross profit margins was primarily due to higher sales volumes of appliance products. Income from operations Interface segment income from operations increased $1.4 million, or 25.5%, to $6.9 million in fiscal 2024, compared to $5.5 million in fiscal 2023.
The decrease was primarily due to lower sales volumes of transceivers for servers. Gross profit Interface segment gross profit increased $2.4 million, or 23.3%, to $12.7 million in fiscal 2025, compared to $10.3 million in fiscal 2024. Gross profit margin increased to 24.5% in fiscal 2025, from 19.1% in fiscal 2024.
We received $21.3 million of cash from the sale of assets in fiscal 2024 compared to $3.5 million in fiscal 2023. In fiscal 2024, we redeemed life insurance policies and received cash proceeds of $10.8 million.
In fiscal 2025, we received proceeds of $3.1 million from the settlement of a net investment hedge, compared to $0.6 million fiscal 2024. In fiscal 2024, we redeemed life insurance policies and received cash proceeds of $10.8 million. Financing activities Net cash used in financing activities was $58.9 million in fiscal 2025, compared to $18.9 million in fiscal 2024.
Excluding foreign currency translation and customer cost recoveries, net sales in Asia decreased $34.1 million primarily due to a program roll-off and lower overhead console sales volumes. Gross profit Automotive segment gross profit decreased $95.8 million, or 75.9%, to $30.4 million in fiscal 2024, compared to $126.2 million in fiscal 2023.
Net sales in Asia decreased $84.1 million, or 72.3%, to $32.3 million in fiscal 2025, compared to $116.4 million in fiscal 2024. Excluding foreign currency translation, net sales in Asia decreased $83.9 million primarily due to a program roll-off and lower sales volumes of lead frame products.
The covenants in the Amended Credit Agreement include an “anti-cash hoarding” requirement, as discussed above. As of April 27, 2024, we were in compliance with all the covenants in the Amended Credit Agreement, both prior to and after giving effect to the Second Amendment.
As of May 3, 2025, after giving effect to the Third Amendment, we were in compliance with all the covenants in the Amended Credit Agreement.
We were in compliance with the consolidated leverage ratio covenant and consolidated interest coverage ratio covenant for the quarter ended April 27, 2024, both prior to and after giving effect to the Second Amendment.
Following the effectiveness of the Third Amendment, we were in compliance with our consolidated interest coverage ratio covenant and our consolidated leverage ratio covenant for the quarter ended May 3, 2025.
Cost of products sold Cost of products sold increased $20.2 million, or 2.2%, to $935.7 million (84.0% of net sales) in fiscal 2024, compared to $915.5 million (77.6% of net sales) in fiscal 2023. The acquisition of Nordic Lights and foreign currency translation accounted for $62.6 million and $3.0 million, respectively, of the increase.
Cost of products sold Cost of products sold decreased $51.0 million, or 5.5%, to $884.7 million (84.4% of net sales) in fiscal 2025, compared to $935.7 million (84.0% of net sales) in fiscal 2024. Foreign currency translation decreased cost of products sold by $0.3 million. Excluding foreign currency translation, cost of products sold decreased $51.3 million.
We will continue to monitor the conflicts and assess the related restrictions and other effects on our employees, customers, suppliers and business. 20 Table of Contents Global Supply Chain Disruptions Although we saw improvements in our supply chain in fiscal 2024, including easing of the worldwide semiconductor supply shortage, new supply chain disruptions may occur in the future.
There is no guarantee these incentive programs will be available in the future. 21 Table of Contents Global Supply Chain Disruptions Although we saw improvements in our supply chain in fiscal 2025, including easing of the worldwide semiconductor supply shortage, new supply chain disruptions may occur in the future.
The decrease was primarily due to lower acquisition costs related to Nordic Lights and lower stock-based compensation expense, partially offset by higher professional fees and restructuring and impairment charges. In fiscal 2024, acquisition costs for Nordic Lights were $0.5 million, compared to $6.8 million in fiscal 2023.
The increase was primarily due to higher professional fees and stock-based compensation expense, partially offset by lower cash incentive compensation and salary expense and lower restructuring costs. Professional fees in fiscal 2025 include $9.8 million for consulting and interim executive services provided by AlixPartners.
Due to the complexity of some of these uncertainties, the ultimate resolution may be materially different from the current estimate. 29 Table of Contents Some or all of management’s judgments are subject to review by the taxing authorities.
Some or all of management’s judgments are subject to review by the taxing authorities.
In qualitatively assessing impairment, the primary qualitative factors include, but are not limited to, the results of prior year fair value calculations, changes in our market capitalization, the reporting unit and overall financial performance, and macroeconomic and industry conditions.
The assessment of impairment may first consider qualitative factors including, but not limited to, the results of prior quantitative tests performed, changes in the carrying amount of the reporting unit, recent and projected financial performance, and macroeconomic and industry conditions.
We performed a sensitivity analysis for the significant assumptions used in the goodwill impairment testing analysis for the Nordic Lights reporting unit. The sensitivities were calculated in isolation using the income approach and keeping all other assumptions constant.
We performed a sensitivity analysis for the significant assumptions used in the goodwill impairment testing analysis for the Nordic Lights reporting unit as follows: • A hypothetical increase in the discount rate of 100 basis points would result in goodwill impairment of approximately $7.3 million; • A hypothetical decrease in revenues of approximately 6% from fiscal 2026 to fiscal 2028 would result in goodwill impairment of approximately $5.3 million; and • A hypothetical decrease of forecasted EBITDA margins of 100 basis points over the entire forecast period would result in goodwill impairment of approximately $3.3 million. 28 Table of Contents The sensitivities above were calculated in isolation using the income approach and keeping all other assumptions constant.
Net foreign exchange losses were lower in fiscal 2024 due to higher efficiency in our foreign currency balance sheet remeasurement hedging program. In addition, net foreign exchange loss in fiscal 2023 included the recognition of $2.1 million of a foreign exchange loss reclassified from accumulated other comprehensive income as the result of a reorganization of a foreign owned subsidiary.
Net foreign exchange losses were higher in fiscal 2025 due to lower efficiency in our foreign currency balance sheet remeasurement hedging program. Net gains on sale of assets was $0.5 million in fiscal 2025, compared to $2.6 million in fiscal 2024.
The decrease was primarily due to lower gross profit and slightly higher selling and administrative expenses. Selling and administrative expenses increased due to higher salary and incentive compensation expense, and outbound freight expense.
Selling and administrative expenses decreased due to lower compensation expense, outbound freight and travel and entertainment expense.
Gross profit Industrial segment gross profit increased $9.9 million, or 7.7%, to $137.7 million in fiscal 2024, compared to $127.8 million in fiscal 2023. The increase was due to the acquisition of Nordic Lights, which contributed $22.5 million of gross profit, and $0.4 million of favorable foreign currency translation.
Gross profit Industrial segment gross profit increased $6.5 million, or 4.7%, to $144.2 million in fiscal 2025, compared to $137.7 million in fiscal 2024. Excluding foreign currency translation, gross profit increased $6.8 million. Gross profit improved due to higher sales volumes and lower salary and freight expense.
We paid cash dividends of $19.9 million in fiscal 2024, compared to $19.8 million in fiscal 2023. In fiscal 2024, we had net borrowings of $30.7 million, compared to $73.7 million in fiscal 2023. Fiscal 2023 net borrowings were primarily to fund the acquisition of Nordic Lights. In fiscal 2024, we paid $10.9 million to redeem a noncontrolling interest.
We paid cash dividends of $20.4 million in fiscal 2025, compared to $19.9 million in fiscal 2024. In fiscal 2025, we had net repayments of borrowings of $30.6 million, compared to net proceeds from borrowings of $30.7 million in fiscal 2024. In fiscal 2025, we paid $1.8 million of debt issuance costs, compared to $1.1 million in fiscal 2024.
The operational inefficiencies were caused mainly by planning deficiencies, inventory shortages, unrecoverable spot purchases and premium freight, and delayed shipments. 21 Table of Contents Selling and administrative expenses Selling and administrative expenses increased $6.0 million, or 3.9%, to $160.9 million (14.4% of net sales) in fiscal 2024, compared to $154.9 million (13.1% of net sales) in fiscal 2023.
Selling and administrative expenses Selling and administrative expenses increased $3.0 million, or 1.9%, to $163.9 million (15.6% of net sales) in fiscal 2025, compared to $160.9 million (14.4% of net sales) in fiscal 2024. Excluding foreign currency translation, selling and administrative expenses increased $3.1 million.
(2) Based on interest rates in effect as of April 27, 2024 (including the impact of interest rate swaps).
(2) Based on interest rates in effect as of May 3, 2025 (including the impact of interest rate swaps). Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements as defined under SEC rules.
Amortization of intangibles Amortization of intangibles increased $5.2 million, or 27.7%, to $24.0 million in fiscal 2024, compared to $18.8 million in fiscal 2023. The increase was due to the recognition of amortization expense associated with the acquisition of Nordic Lights. Interest expense, net Interest expense, net was $16.7 million in fiscal 2024, compared to $2.7 million in fiscal 2023.
Interest expense, net Interest expense, net was $22.0 million in fiscal 2025, compared to $16.7 million in fiscal 2024. The increase was due to higher borrowing rates. Other expense (income), net Other expense, net was $4.2 million in fiscal 2025, compared to other income, net of $0.6 million in fiscal 2024.
The net gain on sale of assets included a $2.4 million gain on sale of the company aircraft and a $0.6 million loss on the sale of certain assets of Dabir Surfaces. Net foreign exchange loss was $2.2 million in fiscal 2024, compared to $7.1 million in fiscal 2023.
The net gain on sale of assets in fiscal 2024 included a $2.4 million gain on the sale of the company aircraft. In fiscal 2025, we received $2.2 million of international government assistance, compared to $0.5 million in fiscal 2024. In addition, other expense, net in fiscal 2025 includes a non-cash write-off of $1.2 million of unamortized debt issuance costs.
Excluding customer cost recoveries, net sales increased $0.7 million, or 1.3%. The increase was primarily due to higher sales volumes of appliance products, partially offset by lower sales volumes of data solutions products. Gross profit Interface segment gross profit increased $1.0 million, or 10.8%, to $10.3 million in fiscal 2024, compared to $9.3 million in fiscal 2023.
Net sales in EMEA increased $23.3 million, or 10.8%, to $239.5 million in fiscal 2025, compared to $216.2 million in fiscal 2024. Excluding foreign currency translation, net sales in EMEA increased $23.5 million primarily due to new program launches, partially offset by lower sales volumes of sensor products.
Income from operations Industrial segment income from operations decreased $4.3 million, or 4.6%, to $88.8 million in fiscal 2024, compared to $93.1 million in fiscal 2023. The acquisition of Nordic Lights and favorable foreign currency translation accounted for $7.4 million and $0.2 million, respectively, of income from operations.
Gross profit margins slightly decreased to 29.6% in fiscal 2025, compared to 29.9% in fiscal 2024 due to product mix. Income from operations Industrial segment income from operations increased $1.2 million, or 1.4%, to $90.0 million in fiscal 2025, compared to $88.8 million in fiscal 2024.
In addition, we have experienced, and may continue to experience, business interruptions, including customer shutdowns and increased material and logistics costs and labor shortages. We continue to work closely with suppliers and customers to minimize the potential adverse impact from global supply chain disruptions.
In addition, we have experienced, and may continue to experience, business interruptions, including customer shutdowns and increased material and logistics costs and labor shortages. Changes in government regulations in areas including, but not limited to, trade and tariff regulations as noted above, could also increase our costs.
As of April 27, 2024, $66.9 million remained available under the 2021 Buyback Program to repurchase shares. Upon adoption of the 2024 Buyback Program, no further repurchases will be made under the 2021 Buyback Program.
As of May 3, 2025, $200.0 million remained available under the 2024 Buyback Authorization to repurchase shares.
For more information regarding the business and products of these segments, see Item 1, “Business” of this Annual Report. In the first quarter of fiscal 2024, we made the decision to initiate the discontinuation of the Dabir Surfaces business in the Medical segment.
For more information regarding the business and products of these segments, see Item 1, “Business” of this Annual Report. Trends Affecting Our Business The following trends significantly have and may continue to impact our business, financial condition and results of operations. See the risk factors identified under Item 1A, “Risk Factors” of this Annual Report for more information.
Excluding foreign currency translation and customer cost recoveries, net sales decreased $127.7 million, or 17.7%. Net sales in North America decreased $83.4 million, or 23.9%, to $265.6 million in fiscal 2024, compared to $349.0 million in fiscal 2023.
Excluding foreign currency translation, net sales decreased $88.9 million, or 14.8%. Net sales in North America decreased $28.5 million, or 10.7%, to $237.1 million in fiscal 2025, compared to $265.6 million in fiscal 2024. The decrease was due to the roll-off of legacy programs, partially offset by new program launches.
Removed
In October 2023, we sold certain assets of the Dabir Surfaces business, and no longer operate this business. For further information, see Note 3, “Acquisition and Disposition” to the consolidated financial statements included in this Annual Report. On April 20, 2023, we acquired 92.2% of the outstanding shares of Nordic Lights.
Added
Trade Policy/Tariffs We are exposed to market risk with respect to duties currently assessed on raw materials, component parts and finished goods we import into the U.S.
Removed
We acquired the remaining 7.8% of the outstanding shares of Nordic Lights in fiscal 2024. Accordingly, as of April 27, 2024, we own 100% of Nordic Lights. The results of operations of Nordic Lights are reported within the Industrial segment from the date of acquisition and were immaterial for fiscal 2023.
Added
Since February 1, 2025 and up to the date of this Annual Report, the U.S. has announced and implemented various tariffs, including: • 25% tariff on imports of automobiles and certain automobile parts into the U.S. from all countries.
Removed
See Note 3, “Acquisition and Disposition” to the consolidated financial statements in this Annual Report for further information. On June 25, 2024, we announced the appointment of Jon DeGaynor as our new President and Chief Executive Officer, beginning July 15, 2024. Mr.
Added
Automobile parts that meet specific rules of origin under the United States-Mexico-Canada Agreement (“USMCA”) are currently exempt, however it is possible that this exemption may be modified to only include the portion of U.S. content in the automobile part. • 50% tariff on imports of steel and certain steel derivatives into the U.S. • 25% tariff on imports of aluminum and certain aluminum derivatives into the U.S. • Reciprocal tariffs on most imports (currently 10% for most countries). • Incremental 20% tariff on all imports from China into the U.S.
Removed
DeGaynor, age 58, currently serves as non-employee Executive Chairman of Racing and Performance, Inc., an automotive ‎performance systems supplier in the aftermarket space.
Added
Although the U.S. tariffs did not have a material impact on our operating performance in fiscal 2025, the current situation is dynamic and we are continuing to assess the full implications of the changing international trade environment.
Removed
He previously served as President and CEO of Stoneridge, ‎Inc., a publicly traded global designer and manufacturer of highly engineered electrical and electronic systems, ‎components, and modules for the automotive, commercial, off-highway and agricultural vehicle markets, from ‎‎2015 to 2023. ‎ Trends Affecting Our Business The following trends significantly impact the indicators discussed above, as well as our business and operating results.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+1 added−1 removed6 unchanged
Biggest changeA portion of our balance sheet is exposed to foreign currency exchange rate fluctuations, which may result in non-operating foreign currency exchange gains or losses upon remeasurement. We use foreign currency forward contracts to provide an economic hedge against balance sheet exposure to certain monetary assets and liabilities denominated in currencies other than the functional currency of the subsidiary.
Biggest changeWe use foreign currency forward contracts to provide an economic hedge against balance sheet exposure to certain monetary assets and liabilities denominated in currencies other than the functional currency of the subsidiary. The forward contracts have a maturity of less than three months and are not designated as hedging instruments.
The effective portion of the gains or losses designated as net investment hedges are recognized within the cumulative translation adjustment component in the consolidated statements of comprehensive income to offset changes in the value of the net investment in these foreign currency-denominated operations.
The effective portion of the gains or losses designated as net investment hedges are recognized within the cumulative translation adjustment component in the consolidated statements of comprehensive income (loss) to offset changes in the value of the net investment in these foreign currency-denominated operations.
We manage our interest rate exposures through the use of interest rate swaps to effectively convert a portion of our variable-rate debt to a fixed rate. The notional amount of our interest rate swaps was $141.3 million as of April 27, 2024.
We manage our interest rate exposures through the use of interest rate swaps to effectively convert a portion of our variable-rate debt to a fixed rate. The notional amount of our interest rate swaps was $141.3 million as of May 3, 2025.
Based on borrowings outstanding under our Credit Agreement at April 27, 2024, net of the interest rate swaps, we estimate that a 1% increase in interest rates would result in increased annual interest expense of $1.5 million. Commodity price risk We are exposed to commodity price risk primarily on our raw material purchases.
Based on borrowings outstanding under our Credit Agreement at May 3, 2025, net of the interest rate swaps, we estimate that a 1% increase in interest rates would result in increased annual interest expense of $1.7 million. Commodity price risk We are exposed to commodity price risk primarily on our raw material purchases.
Translation adjustments are not included in determining net income but are included in accumulated other comprehensive income (loss) within shareholders’ equity on the consolidated balance sheets until a sale or substantially complete liquidation of the net investment in the international subsidiary takes place. As of April 27, 2024, the cumulative net currency translation adjustments decreased shareholders’ equity by $36.5 million.
Translation adjustments are not included in determining net (loss) income but are included in accumulated other comprehensive loss within shareholders’ equity on the consolidated balance sheets until a sale or substantially complete liquidation of the net investment in the international subsidiary takes place. As of May 3, 2025, the cumulative net currency translation adjustments decreased shareholders’ equity by $28.2 million.
As described in Note 8, “Derivative Financial Instruments and Hedging Activities” to our consolidated financial statements included in this Annual Report, in order to manage certain translational exposure to the euro, we have designated euro-denominated borrowings of $294.0 million as a net investment hedge in our euro-denominated subsidiaries.
As described in Note 8, “Derivative Financial Instruments and Hedging Activities” to our consolidated financial statements included in this Annual Report, in order to manage certain translational exposure to the euro, in the past we entered into cross-currency swaps or designated euro-denominated borrowings as a net investment hedge in our euro-denominated subsidiaries.
Interest rate risk We are exposed to interest rate risk on borrowings under our Credit Agreement which are based on variable rates. As of April 27, 2024, we had $333.0 million of borrowings under our Credit Agreement.
Interest rate risk We are exposed to interest rate risk on borrowings under our Credit Agreement which are based on variable rates. As of May 3, 2025, we had $319.4 million of borrowings under our Credit Agreement.
The forward contracts have a maturity of less than three months and are not designated as hedging instruments. As of April 27, 2024, the notional value of these outstanding contracts was $110.9 million. These hedges are intended to reduce, but may not entirely eliminate, foreign currency exchange risk.
As of May 3, 2025, the notional value of these outstanding contracts was $107.2 million. These hedges are intended to reduce, but may not entirely eliminate, foreign currency exchange risk.
We seek to manage our foreign exchange risk largely through operational means, including matching revenue with same-currency costs and assets with same-currency liabilities. We currently transact business in eight primary currencies worldwide, of which the most significant are the U.S. dollar, the euro, the Chinese renminbi and the Mexican peso.
We seek to manage our foreign exchange risk largely through operational means, including matching revenue with same-currency costs and assets with same-currency liabilities.
Removed
We have also entered into a euro-denominated cross-currency swap which is designated as a net investment hedge in our euro-denominated subsidiaries.
Added
We currently transact business in eight primary currencies worldwide, of which the most significant are the U.S. dollar, the euro, the Chinese renminbi and the Mexican peso. 29 Table of Contents A portion of our balance sheet is exposed to foreign currency exchange rate fluctuations, which may result in non-operating foreign currency exchange gains or losses upon remeasurement.

Other MEI 10-K year-over-year comparisons