Methode Electronics Inc. (NYSE: MEI) stock fell over 1.7% on 21st June, 2019 (as of 9:48 am GMT-4; Source: Google finance)
The company for the fourth quarter of FY 19 has reported 6.8% rise in the consolidated sales and 10.1% for the year. In the fourth quarter of this year, non-GAAP adjusted income from operations increased 23.6% over last year. For the fourth quarter, Grakon and organic growth contributed $55 million in sales more than offsetting reduced vehicle production volumes that our customers impacted by the shift away from passenger cars. Fourth quarter sales were also negatively impacted by the continued late start of a major appliance program and reduced data program volumes in the Interface segment, as well as an unfavorable currency impact. Overall, the adjusted net income decreased to $23.5 million in the fourth quarter of Fiscal 2019 from $33.7 million in the same period of Fiscal 2018.
Moreover, adjusted gross margins as a percentage of sales, increased to 27.0 percent in the Fiscal 2019 fourth quarter from 24.9 percent in the same period of Fiscal 2018. Adjusted EBITDA improved to $47.2 million in the Fiscal 2019 fourth quarter from $39.5 million in the Fiscal 2018 period.
In FY19, MEI has posted $1 billion in revenue for the first time in the history, despite the decline in global passenger car production and tariff-induced headwinds as well as the introduction of the new European emission and testing standards, all of which had reduced the automotive sales by $47 million for the fiscal year compared to fiscal 2018.
For FY 20, MEI expects sales to be in the range of $1.130 billion to $1.170 billion, pre-tax income to be in the range of $150.3 million to $164.3 million and earnings per share to be in the range of $3.25 to $3.55. Further, the delayed laundry care program is expected to get launched in the third quarter. The company estimate that the effective tax rate will be in the range of 18% to 21% in fiscal 2020. The higher tax rate is due to new provisions under the US tax reform namely GILTI, and the mix of earnings from the businesses. For fiscal 2020 the company are anticipating capital investment to be in the $48 million to $54 million range and depreciation and amortization to be between $51 million and $54 million. The company also expects fiscal 2020 free cash flow to be between $122 million and $136 million.