Cover Page
Cover Page - shares | 3 Months Ended | |
Jul. 30, 2022 | Aug. 26, 2022 | |
Cover [Abstract] | ||
Entity Registrant Name | METHODE ELECTRONICS, INC. | |
Entity Central Index Key | 0000065270 | |
Document Type | 10-Q | |
Document Period End Date | Jul. 30, 2022 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --04-29 | |
Entity Current Reporting Status | Yes | |
Trading Symbol | MEI | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 36,574,090 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity File Number | 001-33731 | |
Entity Tax Identification Number | 36-2090085 | |
Entity Address, Address Line One | 8750 West Bryn Mawr Avenue | |
Entity Address, Address Line Two | Suite 1000 | |
Entity Address, City or Town | Chicago | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60631-3518 | |
City Area Code | 708 | |
Local Phone Number | 867-6777 | |
Entity Incorporation, State or Country Code | DE | |
Entity Interactive Data Current | Yes | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Title of 12(b) Security | Common Stock, $0.50 Par Value | |
Security Exchange Name | NYSE |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions | 3 Months Ended | |
Jul. 30, 2022 | Jul. 31, 2021 | |
Income Statement [Abstract] | ||
Net sales | $ 282.4 | $ 287.8 |
Cost of products sold | 220.6 | 216.1 |
Gross profit | 61.8 | 71.7 |
Selling and administrative expenses | 35.3 | 32.8 |
Amortization of intangibles | 4.7 | 4.8 |
Income from operations | 21.8 | 34.1 |
Interest expense, net | 0 | 1.1 |
Other income, net | (4.1) | (1.8) |
Income before income taxes | 25.9 | 34.8 |
Income tax expense | 4.4 | 5.7 |
Net income | $ 21.5 | $ 29.1 |
Basic and diluted income per share: | ||
Basic (in dollars per share) | $ 0.59 | $ 0.77 |
Diluted (in dollars per share) | 0.58 | 0.76 |
Cash dividends per share | $ 0.14 | $ 0.14 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Jul. 30, 2022 | Jul. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 21.5 | $ 29.1 |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustments | (10.9) | (4.1) |
Derivative financial instruments | 1.5 | 0.9 |
Total comprehensive income | $ 12.1 | $ 25.9 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jul. 30, 2022 | Apr. 30, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 152.4 | $ 172 |
Accounts receivable, net | 282 | 273.3 |
Inventories | 173.9 | 158.5 |
Income taxes receivable | 7.7 | 8.3 |
Prepaid expenses and other current assets | 23.1 | 16.9 |
Total current assets | 639.1 | 629 |
Long-term assets: | ||
Property, plant and equipment, net | 194.6 | 197 |
Goodwill | 232.7 | 233 |
Other intangible assets, net | 202.6 | 207.7 |
Operating lease right-of-use assets, net | 18.2 | 20 |
Deferred tax assets | 36.2 | 36.8 |
Pre-production costs | 26.5 | 27.2 |
Other long-term assets | 40 | 38.4 |
Total long-term assets | 750.8 | 760.1 |
Total assets | 1,389.9 | 1,389.1 |
Current liabilities: | ||
Accounts payable | 116.4 | 108.5 |
Accrued employee liabilities | 26.8 | 30 |
Other accrued liabilities | 27.6 | 24.5 |
Short-term operating lease liabilities | 5.6 | 6 |
Short-term debt | 13 | 13 |
Income tax payable | 6.4 | 6.6 |
Total current liabilities | 195.8 | 188.6 |
Long-term liabilities: | ||
Long-term debt | 194.2 | 197.5 |
Long-term operating lease liabilities | 13.5 | 14.8 |
Long-term income taxes payable | 22.1 | 22.1 |
Other long-term liabilities | 15.6 | 14 |
Deferred tax liabilities | 37.3 | 38.3 |
Total long-term liabilities | 282.7 | 286.7 |
Total liabilities | 478.5 | 475.3 |
Shareholders' equity: | ||
Common stock, $0.50 par value, 100,000,000 shares authorized, 38,001,714 shares and 38,276,968 shares issued as of July 30, 2022 and April 30, 2022, respectively | 19 | 19.2 |
Additional paid-in capital | 172 | 169 |
Accumulated other comprehensive loss | (36.2) | (26.8) |
Treasury stock, 1,346,624 shares as of July 30, 2022 and April 30, 2022 | (11.5) | (11.5) |
Retained earnings | 768.1 | 763.9 |
Total shareholders' equity | 911.4 | 913.8 |
Total liabilities and shareholders' equity | $ 1,389.9 | $ 1,389.1 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jul. 30, 2022 | Apr. 30, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.50 | $ 0.50 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 38,001,714 | 38,276,968 |
Treasury stock (in shares) | 1,346,624 | 1,346,624 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Retained Earnings |
Beginning balance at May. 01, 2021 | $ 918 | $ 19.8 | $ 157.6 | $ 6.1 | $ (11.5) | $ 746 |
Beginning balance (in shares) at May. 01, 2021 | 39,644,913 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of restricted stock, net of tax withholding | (0.3) | $ 0.1 | (0.1) | (0.3) | ||
Issuance of restricted stock, net of tax withholding (in shares) | 44,245 | |||||
Exercise of stock options | 0.5 | 0.5 | ||||
Exercise of Stock Options (in shares) | 13,000 | |||||
Purchases of common stock | $ (7.6) | $ (0.1) | (7.5) | |||
Purchases of common stock (in shares) | (157,513) | (157,513) | ||||
Stock-based compensation expense | $ 3.2 | 3.2 | ||||
Other comprehensive income (loss) | (3.2) | (3.2) | ||||
Net income | 29.1 | 29.1 | ||||
Dividends on common stock | (5.4) | (5.4) | ||||
Ending balance at Jul. 31, 2021 | 934.3 | $ 19.8 | 161.2 | 2.9 | (11.5) | 761.9 |
Ending balance (in shares) at Jul. 31, 2021 | 39,544,645 | |||||
Beginning balance at Apr. 30, 2022 | 913.8 | $ 19.2 | 169 | (26.8) | (11.5) | 763.9 |
Beginning balance (in shares) at Apr. 30, 2022 | 38,276,968 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of restricted stock, net of tax withholding | (0.4) | (0.4) | ||||
Issuance of restricted stock, net of tax withholding (in shares) | 42,381 | |||||
Purchases of common stock | $ (11.9) | $ (0.2) | (11.7) | |||
Purchases of common stock (in shares) | (317,635) | (317,635) | ||||
Stock-based compensation expense | $ 3 | 3 | ||||
Other comprehensive income (loss) | (9.4) | (9.4) | ||||
Net income | 21.5 | 21.5 | ||||
Dividends on common stock | (5.2) | (5.2) | ||||
Ending balance at Jul. 30, 2022 | $ 911.4 | $ 19 | $ 172 | $ (36.2) | $ (11.5) | $ 768.1 |
Ending balance (in shares) at Jul. 30, 2022 | 38,001,714 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Jul. 30, 2022 | Jul. 31, 2021 | |
Operating activities: | ||
Net income | $ 21.5 | $ 29.1 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 12.3 | 12.6 |
Stock-based compensation expense | 4 | 4 |
Change in cash surrender value of life insurance | 0.2 | (0.4) |
Amortization of debt issuance costs | 0.2 | 0.2 |
Gain on sale of property, plant and equipment | (0.4) | |
Change in deferred income taxes | (1.8) | (0.1) |
Other | 0.1 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (11.9) | 4.7 |
Inventories | (17.4) | (18.5) |
Prepaid expenses and other assets | (4.3) | (5) |
Accounts payable | 10.5 | (8.1) |
Other liabilities | (0.6) | (8.5) |
Net cash provided by operating activities | 12.7 | 9.7 |
Investing activities: | ||
Purchases of property, plant and equipment | (9.6) | (15.9) |
Sale of property, plant and equipment | 0.5 | |
Net cash used in investing activities | (9.6) | (15.4) |
Financing activities: | ||
Taxes paid related to net share settlement of equity awards | (0.5) | (0.3) |
Repayments of finance leases | (0.1) | (0.2) |
Proceeds from exercise of stock options | 0.5 | |
Purchases of common stock | (11.9) | (8.4) |
Cash dividends | (5) | (5.2) |
Repayments of borrowings | (3.3) | (4.7) |
Net cash used in financing activities | (20.8) | (18.3) |
Effect of foreign currency exchange rate changes on cash and cash equivalents | (1.9) | (1.3) |
Decrease in cash and cash equivalents | (19.6) | (25.3) |
Cash and cash equivalents at beginning of the period | 172 | 233.2 |
Cash and cash equivalents at end of the period | 152.4 | 207.9 |
Cash paid during the period for: | ||
Interest | 0.8 | 0.9 |
Income taxes, net of refunds | 5.6 | 7.3 |
Operating lease obligations | $ 1.9 | $ 1.9 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 3 Months Ended |
Jul. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | Note 1. Description of Business and Summary of Significant Accounting Policies Description of business Methode Electronics, Inc. (the “Company” or “Methode”) is a leading global supplier of custom engineered solutions with sales, engineering and manufacturing locations in North America, Europe, Middle East and Asia. The Company designs, engineers and produces mechatronic products for Original Equipment Manufacturers (“OEMs”) utilizing its broad range of technologies for user interface, light-emitting diode (“LED”) lighting system, power distribution and sensor applications. The Company’s solutions are found in the end markets of transportation (including automotive, commercial vehicle, e-bike, aerospace, bus and rail), cloud computing infrastructure, construction equipment, consumer appliance and medical devices. Impact of the COVID-19 pandemic and supply chain disruptions The COVID-19 pandemic and the ongoing measures to reduce its spread have negatively impacted the global economy, disrupted consumer and customer demand and global supply chains, and resulted in manufacturing inefficiencies and increased freight costs due to global capacity constraints. As a result of a resurgence of the virus in China and corresponding government lock-down orders, the COVID-19 pandemic had a negative impact on the Company's China operations in the three months ended July 30, 2022. Further resurgences of the COVID-19 virus or its variants in other regions, including corresponding lock-downs or similar government orders, could also impact the Company's results of operations. Various government programs have been enacted to provide assistance to businesses impacted by the COVID-19 pandemic. The amount of assistance the Company received was $ 4.1 million and $ 1.9 million in the three months ended July 30, 2022 and July 31, 2021, respectively. Government assistance has been reported as other income. The Company continues to experience increased material and logistics costs, labor shortages, and most significantly, impacts from the worldwide semiconductor supply shortage. The semiconductor supply shortage is due, in part, to increased demand across multiple industries, including the automotive industry, resulting in a slowdown in their production schedules. The semiconductor supply shortage is also impacting the Company’s supply chain and its ability to meet demand at some of its non-automotive customers. The Russia-Ukraine military conflict has negatively impacted the Company's European customers and suppliers. Although the Company does not have any operations in Russia, economic sanctions imposed by the international community has further increased existing supply chain, logistics, and inflationary challenges. Basis of presentation The unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). All intercompany balances and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. These interim condensed consolidated financial statements include all adjustments (consisting of normal recurring adjustments, except as otherwise disclosed) that management believes are necessary for a fair presentation of the results of operations, financial position and cash flows of the Company for the interim periods presented. These financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Form 10-K for the year ended April 30, 2022, filed with the SEC on June 23, 2022. Results may vary from quarter to quarter for reasons other than seasonality. Financial reporting periods The Company maintains its financial records on the basis of a 52- or 53-week fiscal year ending on the Saturday closest to April 30. The three months ended July 30, 2022 and July 31, 2021 were both 13-week periods. Use of estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and the accompanying notes. Actual results could differ from these estimates. Summary of significant accounting policies The Company’s significant accounting policies are described in Note 1, “Description of Business and Summary of Significant Accounting Policies,” to the consolidated financial statements included in the Company’s Form 10-K for the year ended April 30, 2022. There have been no material changes to the significant accounting policies in the three months ended July 30, 2022 . New accounting pronouncements not yet adopted In November 2021, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2021-10, “ Government Assistance (Topic 832) ,” which requires annual disclosures when an entity has received government assistance. This guidance is intended to improve the transparency of government assistance received by requiring disclosure of: (1) the types of government assistance received; (2) the accounting for such assistance; and (3) the effect of the assistance on the registrant’s financial statements. The Company will adopt this standard effective April 29, 2023 and expects the standard to only impact annual financial statement footnote disclosures. |
Revenue
Revenue | 3 Months Ended |
Jul. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Note 2. Revenue The Company generates revenue from the manufacturing of products for customers in diversified global markets. The substantial majority of the Company’s revenue is recognized at a point in time. The Company has determined that the most definitive demonstration that control of the product has transferred to a customer is physical shipment or delivery, depending on the contractual shipping terms, except for consignment transactions. Consignment transactions are arrangements where the Company transfers product to a customer location but retains ownership and control of such product until it is used by the customer. Revenue for consignment arrangements is recognized upon the customer’s usage. Revenue associated with products which the Company believes have no alternative use (such as highly customized parts), and where the Company has an enforceable right to payment, are recognized on an over time basis. Revenue is recognized based on progress to date, which is typically even over the production process through transfer of control to the customer. From time to time, customers may negotiate annual price downs. Management has evaluated these price downs and determined that in some instances, these price downs give rise to a material right. In instances that a material right exists, a portion of the transaction price is allocated to the material right and recognized over the life of the contract. Across all products, the amount of revenue recognized corresponds to the related purchase order and is adjusted for variable consideration (such as discounts). Sales and other taxes collected concurrent with revenue-producing activities are excluded from revenue. The Company’s performance obligations are typically short-term in nature. As a result, the Company has elected the practical expedient that provides an exemption from the disclosure requirements regarding information about remaining performance obligations on contracts that have original expected durations of one year or less. Contract balances A contract asset is an entity’s right to consideration in exchange for goods or services that the entity has transferred to a customer. A contract liability exists when an entity has received consideration, or the amount is due from the customer in advance of revenue recognition. The net changes in the contract asset and contract liability balances for the three months ended July 30, 2022 and July 31, 2021 were not material. Disaggregated revenue information The following table represents a disaggregation of revenue from contracts with customers by segment and geographical location. Net sales are attributed to regions based on the location of production. Though revenue recognition patterns and contracts are generally consistent, the amount, timing and uncertainty of revenue and cash flows may vary in each reportable segment due to geographic and economic factors. Three Months Ended July 30, 2022 (in millions) Automotive Industrial Interface Medical Total Geographic net sales: North America $ 94.7 $ 40.7 $ 13.0 $ 0.7 $ 149.1 EMEA 52.1 28.5 — — 80.6 Asia 29.8 22.9 — — 52.7 Total net sales $ 176.6 $ 92.1 $ 13.0 $ 0.7 $ 282.4 Timing of revenue recognition: Goods transferred at a point in time $ 172.1 $ 92.1 $ 13.0 $ 0.7 $ 277.9 Goods transferred over time 4.5 — — — 4.5 Total net sales $ 176.6 $ 92.1 $ 13.0 $ 0.7 $ 282.4 Three Months Ended July 31, 2021 (in millions) Automotive Industrial Interface Medical Total Geographic net sales: North America $ 99.1 $ 42.4 $ 12.5 $ 0.8 $ 154.8 EMEA 57.8 19.8 — — 77.6 Asia 38.9 16.3 0.2 — 55.4 Total net sales $ 195.8 $ 78.5 $ 12.7 $ 0.8 $ 287.8 Timing of revenue recognition: Goods transferred at a point in time $ 189.7 $ 78.5 $ 12.7 $ 0.8 $ 281.7 Goods transferred over time 6.1 — — — 6.1 Total net sales $ 195.8 $ 78.5 $ 12.7 $ 0.8 $ 287.8 |
Income Taxes
Income Taxes | 3 Months Ended |
Jul. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 3. Income Taxes The provision for income taxes for an interim period is based on an estimated annual effective income tax rate applied to ordinary year-to-date earnings or losses. The estimated annual effective income tax rate is determined excluding the effects of unusual or significant one-time items that are reported net of the related tax effects in the period in which they occur. In addition, any material effects of enacted tax law or rate changes as well as the Company’s ability to utilize various tax assets is recognized in the period in which the change occurs. The computation of the estimated annual effective income tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected pre-tax income (or loss) for the year by jurisdiction, certain book to tax adjustments, and the likelihood of the realizability of deferred tax assets generated in the current year. The estimates used to compute the provision or benefit for income taxes may change as new events occur, additional information is obtained or as the Company’s tax environment changes. The Company’s income tax expense and effective tax rate for the three months ended July 30, 2022 and July 31, 2021 were as follows: Three Months Ended ($ in millions) July 30, 2022 July 31, 2021 Income before income taxes $ 25.9 $ 34.8 Income tax expense $ 4.4 $ 5.7 Effective tax rate 17.0 % 16.4 % The effective tax rate for the three months ended July 30, 2022 was lower than the U.S. statutory tax rate primarily due income derived from foreign operations with lower statutory tax rates partially offset by non-deductible expenses. The effective tax rate for the three months ended July 31, 2021 was lower than the U.S. statutory tax rate primarily due to income derived from foreign operations with lower statutory tax rates. The Company’s gross unrecognized income tax benefits were $ 5.1 million as of both July 30, 2022 and April 30, 2022 . If any portion of the Company’s unrecognized tax benefits is recognized, it would impact the Company’s effective tax rate. The unrecognized tax benefits are reviewed periodically and adjusted for changing facts and circumstances, such as tax audits, the lapsing of applicable statutes of limitations and changes in tax law. The Company recognizes interest and penalties related to income tax uncertainties in income tax expense. Accrued interest and penalties were $ 0.3 million and $ 0.2 million as of July 30, 2022 and April 30, 2022, respectively. On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was enacted in the United States. The IR Act imposes a 1 % excise tax on the fair market value of stock repurchases made by covered corporations after December 31, 2022. The total taxable value of shares repurchased is reduced by the fair market value of any newly issued shares during the taxable year. The Company is assessing the potential impact of the stock repurchase excise tax, but based on its preliminary assessment, the Company does not expect a material impact on its consolidated financial statements. Further, the remaining corporate tax changes included in the IR Act are not expected to have a material impact on the Company’s consolidated financial statements. |
Balance Sheet Components
Balance Sheet Components | 3 Months Ended |
Jul. 30, 2022 | |
Balance Sheet Components [Abstract] | |
Balance Sheet Components | Note 4. Balance Sheet Components Cash and cash equivalents Cash and cash equivalents consist of cash and highly liquid investments with maturities of three months or less. Highly liquid investments include money market funds which are classified within Level 1 of the fair value hierarchy. As of July 30, 2022 and April 30, 2022 , the Company had a balance of $ 40.1 million and $ 40.0 million, respectively, in money market accounts. Accounts receivable and allowance for doubtful accounts Accounts receivable are customer obligations due under normal trade terms and are presented net of an allowance for doubtful accounts. The Company establishes an allowance for doubtful accounts based on the current expected credit loss impairment model. The Company applies a historical loss rate based on historic write-offs to aging categories. The historical loss rate is adjusted for current conditions and reasonable and supportable forecasts of future losses as necessary. The Company may also record a specific reserve for individual accounts when it becomes aware of specific customer circumstances, such as in the case of a bankruptcy filing or deterioration in the customer’s operating results or financial position. The allowance for doubtful accounts balance was $ 1.0 million as of both July 30, 2022 and April 30, 2022. Inventories Inventories are stated at the lower-of-cost or net realizable value. Cost is determined using the first-in, first-out method. Finished products and work-in-process inventories include direct material costs and direct and indirect manufacturing costs. The Company records reserves for inventory that may be obsolete or in excess of current and future market demand. A summary of inventories is shown below: (in millions) July 30, 2022 April 30, 2022 Finished products $ 38.0 $ 31.8 Work in process 13.0 12.9 Raw materials 122.9 113.8 Total inventories $ 173.9 $ 158.5 Property, plant and equipment Property, plant and equipment is stated at cost. Maintenance and repair costs are expensed as incurred. Depreciation is calculated using the straight-line method using estimated useful lives of 5 to 40 years for buildings and building improvements and 3 to 15 years for machinery and equipment. A summary of property, plant and equipment is shown below: (in millions) July 30, 2022 April 30, 2022 Land $ 3.1 $ 3.3 Buildings and building improvements 89.5 89.2 Machinery and equipment 402.5 407.5 Construction in progress 27.1 21.5 Total property, plant and equipment, gross 522.2 521.5 Less: accumulated depreciation ( 327.6 ) ( 324.5 ) Property, plant and equipment, net $ 194.6 $ 197.0 Depreciation expense was $ 7.6 million and $ 7.8 million in the three months ended July 30, 2022 and July 31, 2021, respectively. As of July 30, 2022 and April 30, 2022 , capital expenditures recorded in accounts payable totaled $ 3.4 million and $ 4.4 million, respectively. Pre-production tooling costs related to long-term supply arrangements The Company incurs pre-production tooling costs related to products produced for its customers under long-term supply arrangements. Engineering, testing and other costs incurred in the design and development of production parts are expensed as incurred, unless the costs are reimbursable by the customer. As of July 30, 2022 and April 30, 2022, the Company had $ 26.5 million and $ 27.2 million, respectively, of pre-production tooling costs related to customer-owned tools for which reimbursement is contractually guaranteed by the customer or for which the customer has provided a non-cancelable right to use the tooling. Costs for molds, dies and other tools used in products produced for its customers under long-term supply arrangements for which the Company has title are capitalized in property, plant and equipment and amortized over the shorter of the life of the arrangement or over the estimated useful life of the assets. As of July 30, 2022 and April 30, 2022 , Company-owned tooling was $ 13.2 million and $ 14.6 million, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Jul. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Note 5. Goodwill and Other Intangible Assets Goodwill Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. A summary of the changes in the carrying amount of goodwill, by segment, is shown below: (in millions) Automotive Industrial Total Balance as of April 30, 2022 $ 105.9 $ 127.1 $ 233.0 Foreign currency translation ( 0.2 ) ( 0.1 ) ( 0.3 ) Balance as of July 30, 2022 $ 105.7 $ 127.0 $ 232.7 The Company tests goodwill and indefinite-lived intangible assets for impairment on an annual basis as of the beginning of the fourth quarter each fiscal year. In addition, the Company continuously monitors for events and circumstances that could negatively impact the key assumptions used in determining fair value and therefore require interim goodwill impairment testing, including long-term revenue growth projections, profitability, discount rates, volatility in the Company's market capitalization, and general industry, market and macroeconomic conditions. No impairment indicators were identified in the first quarter of fiscal 2023. Other intangible assets, net Details of identifiable intangible assets are shown below: As of July 30, 2022 (in millions) Gross Accumulated Net Weighted Amortized intangible assets: Customer relationships and agreements $ 231.8 $ ( 58.1 ) $ 173.7 14.5 Trade names, patents and technology licenses 57.9 ( 30.8 ) 27.1 6.0 Total amortized intangible assets 289.7 ( 88.9 ) 200.8 Unamortized trade name 1.8 — 1.8 Total other intangible assets $ 291.5 $ ( 88.9 ) $ 202.6 As of April 30, 2022 (in millions) Gross Accumulated Net Weighted Amortized intangible assets: Customer relationships and agreements $ 232.3 $ ( 55.1 ) $ 177.2 14.7 Trade names, patents and technology licenses 58.0 ( 29.3 ) 28.7 6.2 Total amortized intangible assets 290.3 ( 84.4 ) 205.9 Unamortized trade name 1.8 — 1.8 Total other intangible assets $ 292.1 $ ( 84.4 ) $ 207.7 Based on the current amount of intangible assets subject to amortization, the estimated aggregate amortization expense for each of the five succeeding fiscal years and thereafter is as follows: (in millions) Fiscal Year: Remainder of 2023 $ 14.1 2024 18.5 2025 17.9 2026 17.0 2027 16.4 Thereafter 116.9 Total $ 200.8 |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Jul. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Note 6. Derivative Instruments and Hedging Activities The Company is exposed to various market risks including, but not limited to, foreign currency exchange rates and market interest rates. The Company strives to control its exposure to these risks through our normal operating activities and, where appropriate, through the use of derivative financial instruments. Derivative financial instruments are measured at fair value on a recurring basis. For a designated cash flow hedge, the effective portion of the change in the fair value of the derivative financial instrument is recorded in accumulated other comprehensive income (“AOCI”) in the condensed consolidated balance sheets. When the underlying hedged transaction is realized, the gain or loss previously included in AOCI is recorded in earnings and reflected in the condensed consolidated statements of income on the same line as the gain or loss on the hedged item attributable to the hedged risk. The gain or loss associated with changes in the fair value of derivatives not designated as hedges are recorded immediately in the condensed consolidated statements of income on the same line as the associated risk. For a designated net investment hedge, the effective portion of the change in the fair value of the derivative financial instrument is recorded as a cumulative translation adjustment in AOCI in the condensed consolidated balance sheets. Net investment hedges The Company has a variable-rate, cross-currency swap, maturing on August 31, 2023 , with a notional value of $ 60.0 million (€ 54.8 million). The Company entered into the cross-currency swap to mitigate changes in net assets due to changes in U.S. dollar-euro spot exchange rates. The cross-currency swap is designated as a hedge of the Company’s net investment in a euro-based subsidiary. Hedge effectiveness is assessed at the inception of the hedging relationship and quarterly thereafter, under the spot-to-spot method. The Company recognizes the impact of all other changes in fair value of the derivative, which represents the interest rate differential of the cross-currency swap, through interest expense. For the three months ended July 30, 2022 and July 31, 2021 , the Company recorded gains of $ 0.3 million and $ 0.1 million, respectively, in interest expense, net in the condensed consolidated statements of income. Interest rate swaps The Company has interest rate swaps, maturing on August 31, 2023 , with a notional value of $ 100.0 million, to manage its exposure and to mitigate the impact of interest rate variability. The interest rate swaps are designated as cash flow hedges. Hedge effectiveness is assessed at the inception of the hedging relationship and quarterly thereafter. The effective portion of the periodic changes in fair value is recognized in AOCI. Subsequently, the accumulated gains and losses recorded in AOCI are reclassified to income in the period during which the hedged cash flow impacts earnings, which are expected to be immaterial over the next 12 months. No ineffectiveness was recognized in the three months ended July 30, 2022 or July 31, 2021. Derivatives not designated as hedges The Company uses short-term foreign currency forward contracts to reduce the earnings impact that exchange rate fluctuations have on non-functional currency balance sheet exposures. These forward contracts are not designated as hedging instruments. Gains and losses on these forward contracts are recognized in other income, net, along with the foreign currency gains and losses on monetary assets and liabilities in the condensed consolidated statements of income. As of July 30, 2022 and April 30, 2022 , the Company held foreign currency forward contracts with a notional value of $ 44.1 million and $ 38.6 million, respectively. During the three months ended July 30, 2022 , the Company recognized a loss of $ 0.4 million related to foreign currency forward contracts in the condensed consolidated statements of income. During the three months ended July 31, 2021, an immaterial gain was recognized in the condensed consolidated statements of income. Fair value of derivative instruments on the balance sheet The fair value of derivative instruments are classified as Level 2 within the fair value hierarchy and are recorded in the balance sheets as follows: Asset/(Liability) (in millions) Financial Statement Caption July 30, 2022 April 30, 2022 Derivatives designated as hedging instruments: Net investment hedges Other long-term assets $ 3.9 $ 1.9 Interest rate swaps Other long-term assets $ 3.0 $ 3.0 Derivatives not designated as hedging instruments: Foreign currency forward contracts Prepaid expenses and other current assets $ 0.1 $ — Foreign currency forward contracts Other accrued liabilities $ ( 0.1 ) $ ( 0.2 ) Effect of derivative instruments on comprehensive income (loss) Gross amounts recorded in other comprehensive income (loss) were as follows: Three Months Ended (in millions) July 30, 2022 July 31, 2021 Net investment hedges $ 2.0 $ 1.1 Interest rate swaps — — Total $ 2.0 $ 1.1 |
Debt
Debt | 3 Months Ended |
Jul. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Note 7. Debt A summary of debt is shown below: (in millions) July 30, 2022 April 30, 2022 Term loan $ 203.1 $ 206.3 Other debt 4.8 5.1 Unamortized debt issuance costs ( 0.7 ) ( 0.9 ) Total debt 207.2 210.5 Less: current maturities ( 13.0 ) ( 13.0 ) Total long-term debt $ 194.2 $ 197.5 Revolving credit facility/term loan The Company is a party to an Amended and Restated Credit Agreement (“Credit Agreement”) with Bank of America, N.A., as Administrative Agent, and Wells Fargo Bank, N.A. The Credit Agreement terminates in September 2023 and consists of a senior unsecured revolving credit facility (“Revolving Credit Facility”) of $ 200.0 million and a senior unsecured term loan (“Term Loan”) of $ 250.0 million. In addition, the Company has an option to increase the size of the Revolving Credit Facility and Term Loan by up to an additional $ 200.0 million, subject to customary conditions and approval of the lenders providing new commitments. The Credit Agreement is guaranteed by the Company’s wholly-owned U.S. subsidiaries. For the Term Loan, the Company is required to make quarterly principal payments of 1.25 % of the original Term Loan ($ 3.1 million) through maturity, with the remaining balance due on September 12, 2023. On December 10, 2021, the Company entered into a First Amendment to the Credit Agreement (“First Amendment”). The First Amendment amended and restated the Credit Agreement to provide, among other things, that upon the occurrence of certain events, the interest rate calculation method will generally transition from the London Interbank Offered Rate (“LIBOR”) to an alternate reference rate, including the Secured Overnight Financing Rate (“SOFR”) for U.S. dollar denominated borrowings. Outstanding borrowings under the Credit Agreement bear interest at variable rates based on the type of borrowing and the Company’s debt to EBITDA financial ratio, as defined in the Credit Agreement. The weighted-average interest rate on outstanding borrowings under the Credit Agreement was approximately 3.6 % as of July 30, 2022. The Credit Agreement contains customary representations and warranties, financial covenants, restrictive covenants and events of default. As of July 30, 2022, the Company was in compliance with all the covenants in the Credit Agreement. Other debt One of the Company’s European subsidiaries has debt that consists of three notes with maturities ranging from 2023 to 2031. The weighted-average interest rate on this debt was approximately 1.4 % at July 30, 2022 and $ 0.5 million of the debt was classified as short-term. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Jul. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Shareholders' Equity | Note 8. Shareholders’ Equity Share buyback program On March 31, 2021, the Board of Directors authorized the purchase of up to $ 100.0 million of the Company’s outstanding common stock through March 31, 2023. On June 16, 2022, the Board of Directors authorized an increase in the share buyback program of an additional $ 100.0 million, and also extended the expiration from March 31, 2023 to June 14, 2024. Such 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. The following table summarizes the Company’s stock buyback activity under this share buyback program: Three Months Ended (in millions, except share and per share data) July 30, 2022 July 31, 2021 Shares purchased 317,635 157,513 Average price per share $ 37.43 $ 48.35 Total cost $ 11.9 $ 7.6 As of July 30, 2022, a total of 1,910,774 shares have been purchased at a total cost of $ 83.1 million since the commencement of the share buyback program. All purchased shares were retired and are reflected as a reduction of common stock for the par value of shares, with the excess applied as a reduction to retained earnings. As of July 30, 2022, the dollar value of shares that remained available to be purchased by the Company under this share buyback program was $ 116.9 million. Dividends The Company paid dividends totaling $ 5.0 million and $ 5.2 million in the three months ended July 30, 2022 and July 31, 2021, respectively. Accumulated other comprehensive income (loss) Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. A summary of changes in AOCI, net of tax is shown below: Three Months Ended July 30, 2022 (in millions) Currency Translation Adjustments Derivative Instruments Total Balance at beginning of period $ ( 30.5 ) $ 3.7 $ ( 26.8 ) Other comprehensive income (loss) ( 10.9 ) 2.0 ( 8.9 ) Tax (expense) benefit - ( 0.5 ) ( 0.5 ) Net other comprehensive income (loss) ( 10.9 ) 1.5 ( 9.4 ) Balance at the end of period $ ( 41.4 ) $ 5.2 $ ( 36.2 ) Three Months Ended July 31, 2021 (in millions) Currency Translation Adjustments Derivative Instruments Total Balance at beginning of period $ 11.5 $ ( 5.4 ) $ 6.1 Other comprehensive income (loss) ( 3.9 ) 1.1 ( 2.8 ) Tax (expense) benefit ( 0.2 ) ( 0.2 ) ( 0.4 ) Net other comprehensive income (loss) ( 4.1 ) 0.9 ( 3.2 ) Balance at the end of period $ 7.4 $ ( 4.5 ) $ 2.9 Stock-based compensation On June 16, 2022, the Company's Board of Directors, on the recommendation of the Compensation Committee, adopted the Methode Electronics, Inc. 2022 Omnibus Incentive Plan (the “2022 Incentive Plan”), subject to the approval of the Company's stockholders. The 2022 Incentive Plan provides for discretionary grants of stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units and performance grants to employees and directors. The 2022 Incentive Plan provides that upon approval of the 2022 Incentive Plan by the Company's stockholders, no further awards shall be granted under the Methode Electronics, Inc. 2014 Omnibus Incentive Plan (“2014 Plan”). If the 2022 Incentive Plan is approved, subject to adjustment as provided in the 2022 Incentive Plan and the 2022 Incentive Plan’s share counting provisions, the number of shares of the Company's common stock that will initially be available for all awards under the 2022 Incentive Plan is 5,550,000 , less one share for every one share of common stock subject to an option or SAR award granted after April 30, 2022 under the 2014 Plan and 2.28 shares for every one share that was subject to an award other than an option or SAR granted after April 30, 2022 under the 2014 Plan. The Company has granted stock options, restricted stock awards (“RSAs”), performance units (“PUs”), restricted stock units (“RSUs”) and stock awards to employees and non-employee directors under 2014 Plan, the Methode Electronics, Inc. 2010 Stock Plan (“2010 Plan”), the Methode Electronics, Inc. 2007 Stock Plan (“2007 Plan”) and the Methode Electronics, Inc. 2004 Stock Plan (“2004 Plan”). The Company can no longer make grants under the 2010 Plan, 2007 Plan and 2004 Plan. The number of shares of common stock originally authorized under the 2014 Plan is 3,000,000 . As of July 30, 2022 , there were 17,269 shares available for award under the 2014 Plan. Restricted stock awards and performance units As of July 30, 2022 , the Company had 928,412 RSAs outstanding which will be earned based on the achievement of an earnings before net interest, taxes, fixed asset depreciation and intangible asset amortization (“EBITDA”) measure for fiscal 2025. The RSAs will vest ranging from 0 % (for performance below threshold) to 100 % (target performance) based on the achievement of the EBITDA performance measure and continued employment. In addition, if the target performance is exceeded, an additional 464,206 PUs can be earned that will be settled in cash. At the discretion of the Compensation Committee, the PUs may be settled in shares of common stock. The fair value of the RSAs was based on the closing stock price on the date of grant and the RSAs earn dividend equivalents during the vesting period, which are forfeitable if the RSAs do not vest. Compensation expense for the RSAs is recognized when it is probable the minimum threshold performance criteria will be achieved. Compensation expense for the PUs is recognized when it is probable that the target performance criteria will be exceeded. The Company assesses the probability of vesting at each balance sheet date and adjusts compensation costs based on the probability assessment. The cash-settled PUs represent a non-equity unit with a conversion value equal to the fair market value of a share of the Company’s common stock on the vesting date. The PUs are classified as liability awards due to the cash settlement feature and are re-measured at each balance sheet date. In accordance with Accounting Standards Codification 718, based on projections of the Company’s current business portfolio, no compensation expense has not been recognized for the RSAs or PUs to-date, as the performance conditions are not probable of being met. Unrecognized stock-based compensation expense at target level of performance is $ 26.5 million as of July 30, 2022, which, subject to the performance conditions being met, will be recognized through fiscal 2025. Restricted stock units RSUs granted under the 2014 Plan vest over a pre-determined period of time, up to five years from the date of grant. The fair value of the RSUs granted are based on the closing stock price on the date of grant and earn dividend equivalents during the vesting periods, which are forfeitable if the RSUs don’t vest. The following table summarizes RSU activity under the 2014 Plan: Restricted Stock Weighted Non-vested at April 30, 2022 936,391 $ 29.16 Awarded 52,832 $ 39.44 Vested — $ — Forfeited ( 734 ) $ 48.41 Non-vested at July 30, 2022 988,489 $ 29.70 Under the various stock plans, common stock underlying vested RSUs held by certain executives will not be delivered until termination of employment or a change of control of the Company. As of July 30, 2022 , common stock to be delivered to these executives totaled 577,055 shares. Director awards The Company grants stock awards to its non-employee directors as a component of their compensation. The stock awards vest immediately upon grant. Non-employee directors may elect to defer receipt of their shares under the Company’s non-qualified deferred compensation plan. In the three months ended July 30, 2022 , the Company granted 42,735 shares, of which 27,195 shares were deferred. All dividends on deferred shares are reinvested into additional deferred shares based on the closing price of the Company’s common stock on the dividend payment date. Deferred shares will be settled with shares of common stock upon each director’s retirement from the Company’s Board of Directors. As of July 30, 2022 , there were 45,304 deferred shares outstanding. Stock options The following table summarizes combined stock option activity under the 2010 Plan: Shares Weighted average exercise price Weighted- Aggregate Outstanding and exercisable at April 30, 2022 60,000 $ 37.01 2.2 $ 0.5 Exercised — $ — Forfeited — $ — Outstanding and exercisable at July 30, 2022 60,000 $ 37.01 1.9 $ 0.3 The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on that date. Stock-based compensation expense All stock-based awards to employees and non-employee directors are recognized in selling and administrative expenses on the condensed consolidated statements of income. Awards subject to graded vesting are recognized using the accelerated recognition method over the requisite service period. The table below summarizes the stock-based compensation expense related to the equity awards: Three Months Ended (in millions) July 30, 2022 July 31, 2021 RSUs $ 2.4 $ 2.5 Deferred director awards 1.0 0.8 Director awards 0.6 0.7 Total stock-based compensation expense $ 4.0 $ 4.0 |
Income per Share
Income per Share | 3 Months Ended |
Jul. 30, 2022 | |
Earnings Per Share [Abstract] | |
Income per Share | Note 9. Income per Share Basic income per share is calculated by dividing net income by the weighted average number of common shares outstanding for the applicable period but excludes any contingently issued shares where the contingency has not been resolved. The weighted average number of common shares used in the diluted income per share calculation is determined using the treasury stock method which includes the effect of all potential dilutive common shares outstanding during the period. The following table sets forth the computation of basic and diluted income per share: Three Months Ended July 30, 2022 July 31, 2021 Numerator: Net income (in millions) $ 21.5 $ 29.1 Denominator: Denominator for basic income per share - weighted average shares outstanding and vested/unissued restricted stock units 36,565,975 37,939,488 Dilutive potential common shares 649,825 518,470 Denominator for diluted income per share 37,215,800 38,457,958 Basic and diluted income per share: Basic income per share $ 0.59 $ 0.77 Diluted income per share $ 0.58 $ 0.76 Number of anti-dilutive potentially issuable shares excluded from diluted common shares outstanding 928,534 928,412 |
Segment Information
Segment Information | 3 Months Ended |
Jul. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | Note 10. Segment Information An operating segment is defined as a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses, and about which separate financial information is regularly evaluated by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources. The CODM is the Company’s President and Chief Executive Officer (“CEO”). The Company has four reporting segments as described below. The Automotive segment supplies electronic and electro-mechanical devices and related products to automobile OEMs, either directly or through their tiered suppliers. Products include integrated center consoles, hidden switches, ergonomic switches, transmission lead-frames, LED-based lighting and sensors, which incorporate magneto-elastic sensing and other technologies that monitor the operation or status of a component or system. The Industrial segment manufactures external 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 low-voltage flexible power cabling systems and powder-coated busbars that are used in various markets and applications, including aerospace, computers, industrial, power conversion, military, telecommunications and transportation. The Interface segment provides a variety of copper and fiber-optic interface and interface solutions for the appliance, commercial food service, construction, consumer, material handling, point-of-sale and telecommunications markets. Solutions include copper transceivers and solid-state field-effect consumer touch panels. The Medical segment is made up of the Company’s medical device business, Dabir Surfaces, with its surface support technology aimed at pressure injury prevention. Methode has developed the technology for use by patients who are immobilized or otherwise at risk for pressure injuries, including patients undergoing long-duration surgical procedures. The tables below present information about the Company’s reportable segments: Three Months Ended July 30, 2022 (in millions) Automotive Industrial Interface Medical Eliminations Consolidated Net sales $ 177.3 $ 93.7 $ 13.0 $ 0.7 $ ( 2.3 ) $ 282.4 Transfers between segments ( 0.7 ) ( 1.6 ) — — 2.3 — Net sales to unaffiliated customers $ 176.6 $ 92.1 $ 13.0 $ 0.7 $ — $ 282.4 Income (loss) from operations $ 14.7 $ 22.4 $ 1.6 $ ( 1.5 ) $ ( 15.4 ) $ 21.8 Interest expense, net — Other income, net ( 4.1 ) Income before income taxes $ 25.9 Three Months Ended July 31, 2021 (in millions) Automotive Industrial Interface Medical Eliminations Consolidated Net sales $ 197.0 $ 81.2 $ 12.7 $ 0.8 $ ( 3.9 ) $ 287.8 Transfers between segments ( 1.2 ) ( 2.7 ) — — 3.9 — Net sales to unaffiliated customers $ 195.8 $ 78.5 $ 12.7 $ 0.8 $ — $ 287.8 Income (loss) from operations $ 27.3 $ 20.2 $ 1.1 $ ( 1.2 ) $ ( 13.3 ) $ 34.1 Interest expense, net 1.1 Other income, net ( 1.8 ) Income before income taxes $ 34.8 (in millions) July 30, 2022 April 30, 2022 Identifiable assets: Automotive $ 700.8 $ 689.8 Industrial 460.5 455.3 Interface 107.9 108.1 Medical 7.3 7.9 Eliminations/Corporate 113.4 128.0 Total identifiable assets $ 1,389.9 $ 1,389.1 |
Contingencies
Contingencies | 3 Months Ended |
Jul. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Note 11. Contingencies Certain litigation arising in the normal course of business is pending against us. The Company is, from time-to-time, subject to various legal actions and claims incidental to our business, including those arising out of alleged defects, breach of contracts, employment-related matters, environmental matters and intellectual property matters. The Company considers insurance coverage and third-party indemnification when determining required accruals for pending litigation and claims. Although the outcome of potential legal actions and claims cannot be determined, it is the Company's opinion, based on the information available, that it has adequate reserves for these liabilities. Hetronic Germany-GmbH Matters For several years, Hetronic Germany-GmbH and Hydronic-Steuersysteme-GmbH (the “Fuchs companies”) served as our distributors for Germany, Austria and other central and eastern European countries pursuant to their respective intellectual property licenses and distribution and assembly agreements. The Company became aware that the Fuchs companies and their managing director, Albert Fuchs, had materially violated those agreements. As a result, the Company terminated all of its agreements with the Fuchs companies. On June 20, 2014, the Company filed a lawsuit against the Fuchs companies in the Federal District Court for the Western District of Oklahoma alleging material breaches of the distribution and assembly agreements and seeking damages, as well as various forms of injunctive relief. The defendants filed counterclaims alleging breach of contract, interference with business relations and business slander. On April 2, 2015, the Company amended its complaint against the Fuchs companies to add additional unfair competition and Lanham Act claims and to add additional affiliated parties. A trial with respect to the matter began in February 2020. During the trial, the defendants dismissed their one remaining counterclaim with prejudice. On March 2, 2020, the jury returned a verdict in favor of the Company. The verdict included approximately $ 102 million in compensatory damages and $ 11 million in punitive damages. On April 22, 2020, the Court entered a permanent injunction barring defendants from selling infringing products and ordering them to return Hetronic’s confidential information. Defendants appealed entry of the permanent injunction. On May 29, 2020, the Court held defendants in contempt for violating the permanent injunction and entered the final judgment. Defendants appealed entry of the final monetary judgment as well. The appeal of the permanent injunction and the appeal of the final judgment were consolidated into a single appeal before the U.S. Court of Appeals for the Tenth Circuit. On August 24, 2021, the Tenth Circuit issued a decision affirming the lower court’s ruling with the exception that it instructed the District Court to modify the injunction from the entire world to all of the countries in which Hetronic sells its products. On April 20 and 21, 2022, the District Court held a hearing related to modifying the injunction pursuant to the Tenth Circuit’s opinion, and the parties currently are preparing post-hearing briefs. The defendants also filed a petition for certiorari with the United States Supreme Court seeking to further appeal the extraterritorial application of the Lanham Act in this case. Hetronic has opposed that petition. The Supreme Court has requested the views of the Solicitor General on the petition for certiorari. Like any judgment, particularly any judgment involving defendants outside of the United States, there is no guarantee that the Company will be able to collect all or any portion of the judgment. |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Jul. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of presentation The unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). All intercompany balances and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. These interim condensed consolidated financial statements include all adjustments (consisting of normal recurring adjustments, except as otherwise disclosed) that management believes are necessary for a fair presentation of the results of operations, financial position and cash flows of the Company for the interim periods presented. These financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Form 10-K for the year ended April 30, 2022, filed with the SEC on June 23, 2022. Results may vary from quarter to quarter for reasons other than seasonality. |
Financial Reporting Periods | Financial reporting periods The Company maintains its financial records on the basis of a 52- or 53-week fiscal year ending on the Saturday closest to April 30. The three months ended July 30, 2022 and July 31, 2021 were both 13-week periods. |
Use of Estimates | Use of estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and the accompanying notes. Actual results could differ from these estimates. |
Summary of Significant Accounting Policies | Summary of significant accounting policies The Company’s significant accounting policies are described in Note 1, “Description of Business and Summary of Significant Accounting Policies,” to the consolidated financial statements included in the Company’s Form 10-K for the year ended April 30, 2022. There have been no material changes to the significant accounting policies in the three months ended July 30, 2022 . |
Recently Adopted Accounting Pronouncements | accounting pronouncements not yet adopted In November 2021, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2021-10, “ Government Assistance (Topic 832) ,” which requires annual disclosures when an entity has received government assistance. This guidance is intended to improve the transparency of government assistance received by requiring disclosure of: (1) the types of government assistance received; (2) the accounting for such assistance; and (3) the effect of the assistance on the registrant’s financial statements. The Company will adopt this standard effective April 29, 2023 and expects the standard to only impact annual financial statement footnote disclosures. |
Revenue | The Company generates revenue from the manufacturing of products for customers in diversified global markets. The substantial majority of the Company’s revenue is recognized at a point in time. The Company has determined that the most definitive demonstration that control of the product has transferred to a customer is physical shipment or delivery, depending on the contractual shipping terms, except for consignment transactions. Consignment transactions are arrangements where the Company transfers product to a customer location but retains ownership and control of such product until it is used by the customer. Revenue for consignment arrangements is recognized upon the customer’s usage. Revenue associated with products which the Company believes have no alternative use (such as highly customized parts), and where the Company has an enforceable right to payment, are recognized on an over time basis. Revenue is recognized based on progress to date, which is typically even over the production process through transfer of control to the customer. From time to time, customers may negotiate annual price downs. Management has evaluated these price downs and determined that in some instances, these price downs give rise to a material right. In instances that a material right exists, a portion of the transaction price is allocated to the material right and recognized over the life of the contract. Across all products, the amount of revenue recognized corresponds to the related purchase order and is adjusted for variable consideration (such as discounts). Sales and other taxes collected concurrent with revenue-producing activities are excluded from revenue. The Company’s performance obligations are typically short-term in nature. As a result, the Company has elected the practical expedient that provides an exemption from the disclosure requirements regarding information about remaining performance obligations on contracts that have original expected durations of one year or less. |
Inventory | Inventories are stated at the lower-of-cost or net realizable value. Cost is determined using the first-in, first-out method. Finished products and work-in-process inventories include direct material costs and direct and indirect manufacturing costs. The Company records reserves for inventory that may be obsolete or in excess of current and future market demand. |
Property, Plant and Equipment | Property, plant and equipment is stated at cost. Maintenance and repair costs are expensed as incurred. Depreciation is calculated using the straight-line method using estimated useful lives of 5 to 40 years for buildings and building improvements and 3 to 15 years for machinery and equipment. |
Income per Share | Basic income per share is calculated by dividing net income by the weighted average number of common shares outstanding for the applicable period but excludes any contingently issued shares where the contingency has not been resolved. The weighted average number of common shares used in the diluted income per share calculation is determined using the treasury stock method which includes the effect of all potential dilutive common shares outstanding during the period. |
Contingencies | Certain litigation arising in the normal course of business is pending against us. The Company is, from time-to-time, subject to various legal actions and claims incidental to our business, including those arising out of alleged defects, breach of contracts, employment-related matters, environmental matters and intellectual property matters. The Company considers insurance coverage and third-party indemnification when determining required accruals for pending litigation and claims. Although the outcome of potential legal actions and claims cannot be determined, it is the Company's opinion, based on the information available, that it has adequate reserves for these liabilities. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Jul. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregated Revenue Information | The following table represents a disaggregation of revenue from contracts with customers by segment and geographical location. Net sales are attributed to regions based on the location of production. Though revenue recognition patterns and contracts are generally consistent, the amount, timing and uncertainty of revenue and cash flows may vary in each reportable segment due to geographic and economic factors. Three Months Ended July 30, 2022 (in millions) Automotive Industrial Interface Medical Total Geographic net sales: North America $ 94.7 $ 40.7 $ 13.0 $ 0.7 $ 149.1 EMEA 52.1 28.5 — — 80.6 Asia 29.8 22.9 — — 52.7 Total net sales $ 176.6 $ 92.1 $ 13.0 $ 0.7 $ 282.4 Timing of revenue recognition: Goods transferred at a point in time $ 172.1 $ 92.1 $ 13.0 $ 0.7 $ 277.9 Goods transferred over time 4.5 — — — 4.5 Total net sales $ 176.6 $ 92.1 $ 13.0 $ 0.7 $ 282.4 Three Months Ended July 31, 2021 (in millions) Automotive Industrial Interface Medical Total Geographic net sales: North America $ 99.1 $ 42.4 $ 12.5 $ 0.8 $ 154.8 EMEA 57.8 19.8 — — 77.6 Asia 38.9 16.3 0.2 — 55.4 Total net sales $ 195.8 $ 78.5 $ 12.7 $ 0.8 $ 287.8 Timing of revenue recognition: Goods transferred at a point in time $ 189.7 $ 78.5 $ 12.7 $ 0.8 $ 281.7 Goods transferred over time 6.1 — — — 6.1 Total net sales $ 195.8 $ 78.5 $ 12.7 $ 0.8 $ 287.8 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Jul. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Expense And Effective Tax Rate | The Company’s income tax expense and effective tax rate for the three months ended July 30, 2022 and July 31, 2021 were as follows: Three Months Ended ($ in millions) July 30, 2022 July 31, 2021 Income before income taxes $ 25.9 $ 34.8 Income tax expense $ 4.4 $ 5.7 Effective tax rate 17.0 % 16.4 % |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 3 Months Ended |
Jul. 30, 2022 | |
Balance Sheet Components [Abstract] | |
Summary of Inventories | A summary of inventories is shown below: (in millions) July 30, 2022 April 30, 2022 Finished products $ 38.0 $ 31.8 Work in process 13.0 12.9 Raw materials 122.9 113.8 Total inventories $ 173.9 $ 158.5 |
Summary of Property, Plant and Equipment | A summary of property, plant and equipment is shown below: (in millions) July 30, 2022 April 30, 2022 Land $ 3.1 $ 3.3 Buildings and building improvements 89.5 89.2 Machinery and equipment 402.5 407.5 Construction in progress 27.1 21.5 Total property, plant and equipment, gross 522.2 521.5 Less: accumulated depreciation ( 327.6 ) ( 324.5 ) Property, plant and equipment, net $ 194.6 $ 197.0 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Jul. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of the Changes in the Carrying Amount of Goodwill by Segment | A summary of the changes in the carrying amount of goodwill, by segment, is shown below: (in millions) Automotive Industrial Total Balance as of April 30, 2022 $ 105.9 $ 127.1 $ 233.0 Foreign currency translation ( 0.2 ) ( 0.1 ) ( 0.3 ) Balance as of July 30, 2022 $ 105.7 $ 127.0 $ 232.7 |
Schedule of Other Intangible Assets, Net | Details of identifiable intangible assets are shown below: As of July 30, 2022 (in millions) Gross Accumulated Net Weighted Amortized intangible assets: Customer relationships and agreements $ 231.8 $ ( 58.1 ) $ 173.7 14.5 Trade names, patents and technology licenses 57.9 ( 30.8 ) 27.1 6.0 Total amortized intangible assets 289.7 ( 88.9 ) 200.8 Unamortized trade name 1.8 — 1.8 Total other intangible assets $ 291.5 $ ( 88.9 ) $ 202.6 As of April 30, 2022 (in millions) Gross Accumulated Net Weighted Amortized intangible assets: Customer relationships and agreements $ 232.3 $ ( 55.1 ) $ 177.2 14.7 Trade names, patents and technology licenses 58.0 ( 29.3 ) 28.7 6.2 Total amortized intangible assets 290.3 ( 84.4 ) 205.9 Unamortized trade name 1.8 — 1.8 Total other intangible assets $ 292.1 $ ( 84.4 ) $ 207.7 |
Schedule of Estimated Aggregate Amortization Expense of Intangible Assets | Based on the current amount of intangible assets subject to amortization, the estimated aggregate amortization expense for each of the five succeeding fiscal years and thereafter is as follows: (in millions) Fiscal Year: Remainder of 2023 $ 14.1 2024 18.5 2025 17.9 2026 17.0 2027 16.4 Thereafter 116.9 Total $ 200.8 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended |
Jul. 30, 2022 | |
Text Block [Abstract] | |
Schedule of Fair Value of Derivative Instruments Classified as Level 2 Within Fair Value Recorded in the Balance Sheet | The fair value of derivative instruments are classified as Level 2 within the fair value hierarchy and are recorded in the balance sheets as follows: Asset/(Liability) (in millions) Financial Statement Caption July 30, 2022 April 30, 2022 Derivatives designated as hedging instruments: Net investment hedges Other long-term assets $ 3.9 $ 1.9 Interest rate swaps Other long-term assets $ 3.0 $ 3.0 Derivatives not designated as hedging instruments: Foreign currency forward contracts Prepaid expenses and other current assets $ 0.1 $ — Foreign currency forward contracts Other accrued liabilities $ ( 0.1 ) $ ( 0.2 ) |
Schedule of Derivative Instruments Effect on Other Comprehensive Income (Loss) | Gross amounts recorded in other comprehensive income (loss) were as follows: Three Months Ended (in millions) July 30, 2022 July 31, 2021 Net investment hedges $ 2.0 $ 1.1 Interest rate swaps — — Total $ 2.0 $ 1.1 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Jul. 30, 2022 | |
Debt Disclosure [Abstract] | |
Summary of Debt | A summary of debt is shown below: (in millions) July 30, 2022 April 30, 2022 Term loan $ 203.1 $ 206.3 Other debt 4.8 5.1 Unamortized debt issuance costs ( 0.7 ) ( 0.9 ) Total debt 207.2 210.5 Less: current maturities ( 13.0 ) ( 13.0 ) Total long-term debt $ 194.2 $ 197.5 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Jul. 30, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of Stock Buyback Activity Under Share Buyback Program | The following table summarizes the Company’s stock buyback activity under this share buyback program: Three Months Ended (in millions, except share and per share data) July 30, 2022 July 31, 2021 Shares purchased 317,635 157,513 Average price per share $ 37.43 $ 48.35 Total cost $ 11.9 $ 7.6 |
Summary of Changes in Accumulated Other Comprehensive Income (Loss), Net of Tax | A summary of changes in AOCI, net of tax is shown below: Three Months Ended July 30, 2022 (in millions) Currency Translation Adjustments Derivative Instruments Total Balance at beginning of period $ ( 30.5 ) $ 3.7 $ ( 26.8 ) Other comprehensive income (loss) ( 10.9 ) 2.0 ( 8.9 ) Tax (expense) benefit - ( 0.5 ) ( 0.5 ) Net other comprehensive income (loss) ( 10.9 ) 1.5 ( 9.4 ) Balance at the end of period $ ( 41.4 ) $ 5.2 $ ( 36.2 ) Three Months Ended July 31, 2021 (in millions) Currency Translation Adjustments Derivative Instruments Total Balance at beginning of period $ 11.5 $ ( 5.4 ) $ 6.1 Other comprehensive income (loss) ( 3.9 ) 1.1 ( 2.8 ) Tax (expense) benefit ( 0.2 ) ( 0.2 ) ( 0.4 ) Net other comprehensive income (loss) ( 4.1 ) 0.9 ( 3.2 ) Balance at the end of period $ 7.4 $ ( 4.5 ) $ 2.9 |
Summary of Stock-based Compensation Expense Related to Equity Awards | The table below summarizes the stock-based compensation expense related to the equity awards: Three Months Ended (in millions) July 30, 2022 July 31, 2021 RSUs $ 2.4 $ 2.5 Deferred director awards 1.0 0.8 Director awards 0.6 0.7 Total stock-based compensation expense $ 4.0 $ 4.0 |
2014 Incentive Plan | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of RSA and RSU Activity | The following table summarizes RSU activity under the 2014 Plan: Restricted Stock Weighted Non-vested at April 30, 2022 936,391 $ 29.16 Awarded 52,832 $ 39.44 Vested — $ — Forfeited ( 734 ) $ 48.41 Non-vested at July 30, 2022 988,489 $ 29.70 |
2010 Plan and 2007 Plan | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of combined stock option activity and related information for stock options granted | The following table summarizes combined stock option activity under the 2010 Plan: Shares Weighted average exercise price Weighted- Aggregate Outstanding and exercisable at April 30, 2022 60,000 $ 37.01 2.2 $ 0.5 Exercised — $ — Forfeited — $ — Outstanding and exercisable at July 30, 2022 60,000 $ 37.01 1.9 $ 0.3 |
Income per Share (Tables)
Income per Share (Tables) | 3 Months Ended |
Jul. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Income per Share | The following table sets forth the computation of basic and diluted income per share: Three Months Ended July 30, 2022 July 31, 2021 Numerator: Net income (in millions) $ 21.5 $ 29.1 Denominator: Denominator for basic income per share - weighted average shares outstanding and vested/unissued restricted stock units 36,565,975 37,939,488 Dilutive potential common shares 649,825 518,470 Denominator for diluted income per share 37,215,800 38,457,958 Basic and diluted income per share: Basic income per share $ 0.59 $ 0.77 Diluted income per share $ 0.58 $ 0.76 Number of anti-dilutive potentially issuable shares excluded from diluted common shares outstanding 928,534 928,412 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Jul. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Reportable Segments | The tables below present information about the Company’s reportable segments: Three Months Ended July 30, 2022 (in millions) Automotive Industrial Interface Medical Eliminations Consolidated Net sales $ 177.3 $ 93.7 $ 13.0 $ 0.7 $ ( 2.3 ) $ 282.4 Transfers between segments ( 0.7 ) ( 1.6 ) — — 2.3 — Net sales to unaffiliated customers $ 176.6 $ 92.1 $ 13.0 $ 0.7 $ — $ 282.4 Income (loss) from operations $ 14.7 $ 22.4 $ 1.6 $ ( 1.5 ) $ ( 15.4 ) $ 21.8 Interest expense, net — Other income, net ( 4.1 ) Income before income taxes $ 25.9 Three Months Ended July 31, 2021 (in millions) Automotive Industrial Interface Medical Eliminations Consolidated Net sales $ 197.0 $ 81.2 $ 12.7 $ 0.8 $ ( 3.9 ) $ 287.8 Transfers between segments ( 1.2 ) ( 2.7 ) — — 3.9 — Net sales to unaffiliated customers $ 195.8 $ 78.5 $ 12.7 $ 0.8 $ — $ 287.8 Income (loss) from operations $ 27.3 $ 20.2 $ 1.1 $ ( 1.2 ) $ ( 13.3 ) $ 34.1 Interest expense, net 1.1 Other income, net ( 1.8 ) Income before income taxes $ 34.8 (in millions) July 30, 2022 April 30, 2022 Identifiable assets: Automotive $ 700.8 $ 689.8 Industrial 460.5 455.3 Interface 107.9 108.1 Medical 7.3 7.9 Eliminations/Corporate 113.4 128.0 Total identifiable assets $ 1,389.9 $ 1,389.1 |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jul. 30, 2022 | Jul. 31, 2021 | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Fiscal period duration | 3 months | 3 months |
Covid19 | ||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Other Income | $ 4.1 | $ 1.9 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jul. 30, 2022 | Jul. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 282.4 | $ 287.8 |
Goods Transferred at a Point in Time | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 277.9 | 281.7 |
Goods Transferred Over Time | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 4.5 | 6.1 |
Automotive | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 176.6 | 195.8 |
Automotive | Goods Transferred at a Point in Time | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 172.1 | 189.7 |
Automotive | Goods Transferred Over Time | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 4.5 | 6.1 |
Industrial | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 92.1 | 78.5 |
Industrial | Goods Transferred at a Point in Time | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 92.1 | 78.5 |
Interface | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 13 | 12.7 |
Interface | Goods Transferred at a Point in Time | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 13 | 12.7 |
Medical | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 0.7 | 0.8 |
Medical | Goods Transferred at a Point in Time | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 0.7 | 0.8 |
North America | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 149.1 | 154.8 |
North America | Automotive | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 94.7 | 99.1 |
North America | Industrial | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 40.7 | 42.4 |
North America | Interface | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 13 | 12.5 |
North America | Medical | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 0.7 | 0.8 |
EMEA | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 80.6 | 77.6 |
EMEA | Automotive | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 52.1 | 57.8 |
EMEA | Industrial | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 28.5 | 19.8 |
Asia | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 52.7 | 55.4 |
Asia | Automotive | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 29.8 | 38.9 |
Asia | Industrial | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 22.9 | 16.3 |
Asia | Interface | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 0.2 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income before Income Taxes, Income Tax Expense and Effective Income Tax Rate (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jul. 30, 2022 | Jul. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Income before income taxes | $ 25.9 | $ 34.8 |
Income tax expense | $ 4.4 | $ 5.7 |
Effective tax rate | 17% | 16.40% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | Aug. 16, 2022 | Jul. 30, 2022 | Apr. 30, 2022 |
Income Tax Examination [Line Items] | |||
Gross unrecognized income tax benefits | $ 5.1 | $ 5.1 | |
Income tax penalties and interest accrued | $ 0.3 | $ 0.2 | |
Subsequent Event | |||
Income Tax Examination [Line Items] | |||
Exercise tax rate | 1% |
Balance Sheet Components - Cash
Balance Sheet Components - Cash and Cash Equivalents - Narrative (Details) - USD ($) $ in Millions | Jul. 30, 2022 | Apr. 30, 2022 |
Cash And Cash Equivalents [Line Items] | ||
Cash and cash equivalents | $ 152.4 | $ 172 |
Money Market Accounts | ||
Cash And Cash Equivalents [Line Items] | ||
Cash and cash equivalents | $ 40.1 | $ 40 |
Balance Sheet Components - Acco
Balance Sheet Components - Accounts Receivable and Allowance for Doubtful Accounts - Narrative (Details) - USD ($) $ in Millions | Jul. 30, 2022 | Apr. 30, 2022 |
Inventory, Net, Items Net of Reserve Alternative [Abstract] | ||
Allowance for doubtful accounts receivable | $ 1 | $ 1 |
Balance Sheet Components - Summ
Balance Sheet Components - Summary of Inventories (Details) - USD ($) $ in Millions | Jul. 30, 2022 | Apr. 30, 2022 |
Inventory, Net, Items Net of Reserve Alternative [Abstract] | ||
Finished products | $ 38 | $ 31.8 |
Work in process | 13 | 12.9 |
Raw materials | 122.9 | 113.8 |
Total inventories | $ 173.9 | $ 158.5 |
Balance Sheet Components - Prop
Balance Sheet Components - Property, Plant and Equipment - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Jul. 30, 2022 | Jul. 31, 2021 | Apr. 30, 2022 | |
Property Plant And Equipment [Line Items] | |||
Depreciation | $ 7.6 | $ 7.8 | |
Capital expenditures recorded in accounts payable | $ 3.4 | $ 4.4 | |
Minimum | Buildings and Building Improvements | |||
Property Plant And Equipment [Line Items] | |||
Property, plant and equipment, useful life | 5 years | ||
Minimum | Machinery and Equipment | |||
Property Plant And Equipment [Line Items] | |||
Property, plant and equipment, useful life | 3 years | ||
Maximum | Buildings and Building Improvements | |||
Property Plant And Equipment [Line Items] | |||
Property, plant and equipment, useful life | 40 years | ||
Maximum | Machinery and Equipment | |||
Property Plant And Equipment [Line Items] | |||
Property, plant and equipment, useful life | 15 years |
Balance Sheet Components - Pr_2
Balance Sheet Components - Property, Plant and Equipment (Details) - USD ($) $ in Millions | Jul. 30, 2022 | Apr. 30, 2022 |
Property Plant And Equipment [Line Items] | ||
Total property, plant and equipment, gross | $ 522.2 | $ 521.5 |
Less: accumulated depreciation | (327.6) | (324.5) |
Property, plant and equipment, net | 194.6 | 197 |
Land | ||
Property Plant And Equipment [Line Items] | ||
Total property, plant and equipment, gross | 3.1 | 3.3 |
Buildings and Building Improvements | ||
Property Plant And Equipment [Line Items] | ||
Total property, plant and equipment, gross | 89.5 | 89.2 |
Machinery and Equipment | ||
Property Plant And Equipment [Line Items] | ||
Total property, plant and equipment, gross | 402.5 | 407.5 |
Construction In Progress | ||
Property Plant And Equipment [Line Items] | ||
Total property, plant and equipment, gross | $ 27.1 | $ 21.5 |
Balance Sheet Components - Pre-
Balance Sheet Components - Pre-production Tooling Costs Related to Long-term Supply Arrangements - Narrative (Details) - USD ($) $ in Millions | Jul. 30, 2022 | Apr. 30, 2022 |
Preproduction Tooling Costs Relatedto Longterm Supply Arrangements [Abstract] | ||
Pre-production costs | $ 26.5 | $ 27.2 |
Preproduction costs related to long-term supply arrangements, asset for molds dies and tools owned | $ 13.2 | $ 14.6 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Schedule of Summary of the Changes in the Carrying Amount of Goodwill by Segment (Details) $ in Millions | 3 Months Ended |
Jul. 30, 2022 USD ($) | |
Goodwill [Line Items] | |
Beginning balance | $ 233 |
Foreign currency translation | (0.3) |
Ending balance | 232.7 |
Automotive | |
Goodwill [Line Items] | |
Beginning balance | 105.9 |
Foreign currency translation | (0.2) |
Ending balance | 105.7 |
Industrial | |
Goodwill [Line Items] | |
Beginning balance | 127.1 |
Foreign currency translation | (0.1) |
Ending balance | $ 127 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Narrative (Details) | 3 Months Ended |
Jul. 30, 2022 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Impairment, identified | $ 0 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Schedule of Other Intangible Assets, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Jul. 30, 2022 | Apr. 30, 2022 | |
Finite-lived Intangible Assets [Roll Forward] | ||
Gross | $ 289.7 | $ 290.3 |
Accumulated Amortization | (88.9) | (84.4) |
Net/Total | 200.8 | 205.9 |
Other intangible assets, gross | 291.5 | 292.1 |
Other intangible assets, accumulated amortization | (88.9) | (84.4) |
Other intangible assets, net | 202.6 | 207.7 |
Unamortized Trade Name | ||
Finite-lived Intangible Assets [Roll Forward] | ||
Gross | 1.8 | 1.8 |
Net | 1.8 | 1.8 |
Customer Relationships and Agreements | ||
Finite-lived Intangible Assets [Roll Forward] | ||
Gross | 231.8 | 232.3 |
Accumulated Amortization | (58.1) | (55.1) |
Net/Total | $ 173.7 | $ 177.2 |
Weighted average useful life (years) | 14 years 6 months | 14 years 8 months 12 days |
Trade Names, Patents and Technology Licenses | ||
Finite-lived Intangible Assets [Roll Forward] | ||
Gross | $ 57.9 | $ 58 |
Accumulated Amortization | (30.8) | (29.3) |
Net/Total | $ 27.1 | $ 28.7 |
Weighted average useful life (years) | 6 years | 6 years 2 months 12 days |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Schedule of Estimated Aggregate Amortization Expense of Intangible Assets (Details) - USD ($) $ in Millions | Jul. 30, 2022 | Apr. 30, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2022 | $ 14.1 | |
2023 | 18.5 | |
2024 | 17.9 | |
2025 | 17 | |
2026 | 16.4 | |
Thereafter | 116.9 | |
Net/Total | $ 200.8 | $ 205.9 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Narrative Information (Details) € in Millions, $ in Millions | 3 Months Ended | |||
Jul. 30, 2022 USD ($) | Jul. 31, 2021 USD ($) | Jul. 30, 2022 EUR (€) | Apr. 30, 2022 USD ($) | |
Derivatives Fair Value [Line Items] | ||||
Derivative, maturity date | Aug. 31, 2023 | |||
Derivative, notional amount | $ 60 | € 54.8 | ||
Gains on derivative | $ 0.3 | $ 0.1 | ||
Interest Rate Swap | ||||
Derivatives Fair Value [Line Items] | ||||
Derivative, maturity date | Aug. 31, 2023 | |||
Derivative, notional amount | $ 100 | |||
Foreign Exchange Forward | ||||
Derivatives Fair Value [Line Items] | ||||
Derivative, notional amount | 44.1 | $ 38.6 | ||
Loss on foreign currency derivatives | $ 0.4 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Schedule of Fair Value of Derivative Instruments Classified as Level 2 Within Fair Value Recorded in the Balance Sheet (Details) - Level 2 - USD ($) $ in Millions | Jul. 30, 2022 | Apr. 30, 2022 |
Derivatives Designated as Hedging Instruments | Net Investment Hedges | Other Long-term Assets | ||
Derivative Instruments Gain Loss [Line Items] | ||
Fair value of derivative instruments assets (liabilities) net | $ 3.9 | $ 1.9 |
Derivatives Designated as Hedging Instruments | Interest Rate Swap | Other Long-term Assets | ||
Derivative Instruments Gain Loss [Line Items] | ||
Fair value of derivative instruments assets (liabilities) net | 3 | 3 |
Derivatives Not Designated as Hedging Instruments | Foreign Exchange Forward | Prepaid Expenses and Other Current Assets | ||
Derivative Instruments Gain Loss [Line Items] | ||
Fair value of derivative instruments assets (liabilities) net | 0.1 | |
Derivatives Not Designated as Hedging Instruments | Foreign Exchange Forward | Other Accrued Liabilities | ||
Derivative Instruments Gain Loss [Line Items] | ||
Fair value of derivative instruments assets (liabilities) net | $ (0.1) | $ (0.2) |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities - Schedule of Derivative Instruments Effect on Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jul. 30, 2022 | Jul. 31, 2021 | |
Derivative Instruments Gain Loss [Line Items] | ||
Gross amounts recorded in other comprehensive income (loss) Net | $ 2 | $ 1.1 |
Net Investment Hedges | ||
Derivative Instruments Gain Loss [Line Items] | ||
Gross amounts recorded in other comprehensive income (loss) Net | $ 2 | $ 1.1 |
Debt - Summary of Debt (Details
Debt - Summary of Debt (Details) - USD ($) $ in Millions | Jul. 30, 2022 | Apr. 30, 2022 |
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | $ (0.7) | $ (0.9) |
Total debt | 207.2 | 210.5 |
Less: current maturities | (13) | (13) |
Long-term debt | 194.2 | 197.5 |
Term loan | ||
Debt Instrument [Line Items] | ||
Debt | 203.1 | 206.3 |
Other Debt | ||
Debt Instrument [Line Items] | ||
Debt | 4.8 | $ 5.1 |
Less: current maturities | $ (0.5) |
Debt - Revolving Credit Facilit
Debt - Revolving Credit Facility/Term Loan (Details) - Bank of America, N.A., and Wells Fargo Bank, N.A. [Member] - Revolving Credit Facility | 3 Months Ended |
Jul. 30, 2022 USD ($) | |
Debt Instrument [Line Items] | |
Credit Agreement terminates | 2023-09 |
Borrowing capacity, increase limit | $ 200,000,000 |
Interest rate (as a percent) | 3.60% |
Line of credit | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 200,000,000 |
Term loan | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 250,000,000 |
Periodic payment, principal, proportion of total borrowing (as a percent) | 1.25% |
Periodic payment, principal | $ 3,100,000 |
Debt - Other Debt (Details)
Debt - Other Debt (Details) $ in Millions | 3 Months Ended | |
Jul. 30, 2022 USD ($) Note | Apr. 30, 2022 USD ($) | |
Debt Instrument [Line Items] | ||
Debt, short-term | $ 13 | $ 13 |
Other Debt | ||
Debt Instrument [Line Items] | ||
Number of notes | Note | 3 | |
Weighted-average interest rate (as a percent) | 1.40% | |
Debt, short-term | $ 0.5 |
Shareholders' Equity - Share re
Shareholders' Equity - Share repurchase program (Details) - USD ($) $ in Millions | 3 Months Ended | 16 Months Ended | |||
Jul. 30, 2022 | Jul. 31, 2021 | Jul. 30, 2022 | Jun. 16, 2022 | Mar. 31, 2021 | |
Equity Class Of Treasury Stock [Line Items] | |||||
Stock repurchase program, additional authorized amount | $ 100 | ||||
Shares purchased | 317,635 | 157,513 | 1,910,774 | ||
Stock repurchase cost | $ 11.9 | $ 7.6 | $ 83.1 | ||
Remaining authorized repurchase amount | $ 116.9 | $ 116.9 | |||
Maximum | |||||
Equity Class Of Treasury Stock [Line Items] | |||||
Stock repurchase program, Authorized amount | $ 100 |
Shareholders' Equity - Summary
Shareholders' Equity - Summary of Stock Buyback Activity Under Share Buyback Program (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 16 Months Ended | |
Jul. 30, 2022 | Jul. 31, 2021 | Jul. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |||
Shares purchased | 317,635 | 157,513 | 1,910,774 |
Average price per share | $ 37.43 | $ 48.35 | |
Total cost | $ 11.9 | $ 7.6 | $ 83.1 |
Shareholders' Equity - Dividend
Shareholders' Equity - Dividends (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jul. 30, 2022 | Jul. 31, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Cash dividends | $ (5) | $ (5.2) |
Shareholders' Equity - Summar_2
Shareholders' Equity - Summary of Changes in Accumulated Other Comprehensive Income (Loss), Net of Tax (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jul. 30, 2022 | Jul. 31, 2021 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning balance | $ 913.8 | $ 918 |
Other comprehensive income (loss) | (8.9) | (2.8) |
Tax (expense) benefit | (0.5) | (0.4) |
Net other comprehensive income (loss) | (9.4) | (3.2) |
Ending balance | 911.4 | 934.3 |
Currency Translation Adjustments | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning balance | (30.5) | 11.5 |
Other comprehensive income (loss) | (10.9) | (3.9) |
Tax (expense) benefit | (0.2) | |
Net other comprehensive income (loss) | (10.9) | (4.1) |
Ending balance | (41.4) | 7.4 |
Derivative Instruments | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning balance | 3.7 | (5.4) |
Other comprehensive income (loss) | 2 | 1.1 |
Tax (expense) benefit | (0.5) | (0.2) |
Net other comprehensive income (loss) | 1.5 | 0.9 |
Ending balance | 5.2 | (4.5) |
Accumulated Other Comprehensive Income (Loss) | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning balance | (26.8) | 6.1 |
Net other comprehensive income (loss) | (9.4) | (3.2) |
Ending balance | $ (36.2) | $ 2.9 |
Shareholders' Equity - General
Shareholders' Equity - General (Details) - shares | 3 Months Ended | |
Jul. 30, 2022 | Jun. 16, 2022 | |
2014 Incentive Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of shares authorized (in shares) | 3,000,000 | |
Number of shares available for award (in shares) | 17,269 | |
Number of shares common stock subject an option granted | 1 | |
Number of shares common stock subject an other than option granted | 2.28 | |
2022 Incentive Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of shares available for award (in shares) | 5,550,000 | |
Stock-based compensation, description | the number of shares of the Company's common stock that will initially be available for all awards under the 2022 Incentive Plan is 5,550,000, less one share for every one share of common stock subject to an option or SAR award granted after April 30, 2022 under the 2014 Plan and 2.28 shares for every one share that was subject to an award other than an option or SAR granted after April 30, 2022 under the 2014 Plan. |
Shareholders' Equity - Narrativ
Shareholders' Equity - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jul. 30, 2022 | Apr. 30, 2022 | |
RSAs | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Shares granted in period (in shares) | 928,412 | |
Additional stock issuable, shares | 464,206 | |
Unrecognized stock-based compensation cost | $ 26.5 | |
RSAs | Director | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Shares granted in period (in shares) | 42,735 | |
Deferred share | 27,195 | |
Deferred share outstanding | 45,304 | |
RSUs | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Deferred RSU's | 577,055 | |
Stock Options | 2010 Plan and 2007 Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Deferred share outstanding | 60,000 | 60,000 |
Minimum | RSAs | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting percentage | 0% | |
Maximum | RSAs | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting percentage | 100% | |
Maximum | RSUs | 2014 Incentive Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period | 5 years |
Shareholders' Equity - Summar_3
Shareholders' Equity - Summary of Restricted Stock Awards and Restricted Stock Units Activity (Details) - RSUs - 2014 Incentive Plan | 3 Months Ended |
Jul. 30, 2022 $ / shares shares | |
Shares | |
Non-vested and unissued, beginning balance (in shares) | shares | 936,391 |
Awarded (in shares) | shares | 52,832 |
Forfeited (in shares) | shares | (734) |
Non-vested and unissued, ending balance (in shares) | shares | 988,489 |
Wtd. Avg. Grant Date Fair Value | |
Non-vested and unissued, beginning balance (in dollars per share) | $ / shares | $ 29.16 |
Weighted average value, awarded (in dollars per share) | $ / shares | 39.44 |
Weighted average value, forfeited (in dollars per share) | $ / shares | 48.41 |
Non-vested and unissued, ending balance (in dollars per share) | $ / shares | $ 29.70 |
Shareholders' Equity - Summar_4
Shareholders' Equity - Summary of Combined Stock Option Activity and Related Information for Stock Options Granted (Details) - Stock Options - 2010 Plan and 2007 Plan - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended |
Jul. 30, 2022 | Apr. 30, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award Options Outstanding [Roll Forward] | ||
Outstanding - beginning balance (in shares) | 60,000 | |
Outstanding - ending balance (in shares) | 60,000 | 60,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Wtd. Avg. Exercise Price, Outstanding - beginning balance (in dollars per share) | $ 37.01 | |
Wtd. Avg. Exercise Price, Outstanding - ending balance (in dollars per share) | $ 37.01 | $ 37.01 |
Weighted-average life of outstanding options | 1 year 10 months 24 days | 2 years 2 months 12 days |
Intrinsic value of outstanding options | $ 0.3 | $ 0.5 |
Shareholders' Equity - Stock-ba
Shareholders' Equity - Stock-based Compensation Expense (Details) - 2014 Incentive Plan - USD ($) $ in Millions | 3 Months Ended | |
Jul. 30, 2022 | Jul. 31, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 4 | $ 4 |
RSUs | Management | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | 2.4 | 2.5 |
RSUs | Deferred Director Awards | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | 1 | 0.8 |
RSAs | Director | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 0.6 | $ 0.7 |
Income per Share - Schedule of
Income per Share - Schedule of Computation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Jul. 30, 2022 | Jul. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Net income | $ 21.5 | $ 29.1 |
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | ||
Denominator for basic income per share - weighted average shares outstanding and vested/unissued restricted stock units | 36,565,975 | 37,939,488 |
Dilutive potential common shares | 649,825 | 518,470 |
Denominator for diluted income per share | 37,215,800 | 38,457,958 |
Basic income per share: | ||
Basic Income per Share (in dollars per share) | $ 0.59 | $ 0.77 |
Diluted income per share: | ||
Diluted Income per Share (in dollars per share) | $ 0.58 | $ 0.76 |
Number of anti-dilutive potentially issuable shares excluded from diluted common shares outstanding | 928,534 | 928,412 |
Segment Information - Schedule
Segment Information - Schedule of Segment Reporting Information, by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jul. 30, 2022 | Jul. 31, 2021 | Apr. 30, 2022 | |
Segment Reporting Information [Line Items] | |||
Net sales | $ 282.4 | $ 287.8 | |
Income (loss) from operations | 21.8 | 34.1 | |
Interest expense, net | 0 | 1.1 | |
Other income, net | (4.1) | (1.8) | |
Income before income taxes | 25.9 | 34.8 | |
Identifiable assets | 1,389.9 | $ 1,389.1 | |
Automotive | |||
Segment Reporting Information [Line Items] | |||
Net sales | 176.6 | 195.8 | |
Income (loss) from operations | 14.7 | 27.3 | |
Identifiable assets | 700.8 | 689.8 | |
Industrial | |||
Segment Reporting Information [Line Items] | |||
Net sales | 92.1 | 78.5 | |
Income (loss) from operations | 22.4 | 20.2 | |
Identifiable assets | 460.5 | 455.3 | |
Interface | |||
Segment Reporting Information [Line Items] | |||
Net sales | 13 | 12.7 | |
Income (loss) from operations | 1.6 | 1.1 | |
Identifiable assets | 107.9 | 108.1 | |
Medical | |||
Segment Reporting Information [Line Items] | |||
Net sales | 0.7 | 0.8 | |
Income (loss) from operations | (1.5) | (1.2) | |
Identifiable assets | 7.3 | 7.9 | |
Eliminations/Corporate | |||
Segment Reporting Information [Line Items] | |||
Net sales | 0 | 0 | |
Income (loss) from operations | (15.4) | (13.3) | |
Identifiable assets | 113.4 | $ 128 | |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Net sales | 282.4 | 287.8 | |
Operating Segments | Automotive | |||
Segment Reporting Information [Line Items] | |||
Net sales | 177.3 | 197 | |
Operating Segments | Industrial | |||
Segment Reporting Information [Line Items] | |||
Net sales | 93.7 | 81.2 | |
Operating Segments | Interface | |||
Segment Reporting Information [Line Items] | |||
Net sales | 13 | 12.7 | |
Operating Segments | Medical | |||
Segment Reporting Information [Line Items] | |||
Net sales | 0.7 | 0.8 | |
Operating Segments | Eliminations/Corporate | |||
Segment Reporting Information [Line Items] | |||
Net sales | (2.3) | (3.9) | |
Transfers between Segments | |||
Segment Reporting Information [Line Items] | |||
Net sales | 0 | 0 | |
Transfers between Segments | Automotive | |||
Segment Reporting Information [Line Items] | |||
Net sales | (0.7) | (1.2) | |
Transfers between Segments | Industrial | |||
Segment Reporting Information [Line Items] | |||
Net sales | (1.6) | (2.7) | |
Transfers between Segments | Interface | |||
Segment Reporting Information [Line Items] | |||
Net sales | 0 | 0 | |
Transfers between Segments | Medical | |||
Segment Reporting Information [Line Items] | |||
Net sales | 0 | 0 | |
Transfers between Segments | Eliminations/Corporate | |||
Segment Reporting Information [Line Items] | |||
Net sales | $ 2.3 | $ 3.9 |
Contingencies - Narrative (Deta
Contingencies - Narrative (Details) $ in Millions | Mar. 02, 2020 USD ($) |
Compensatory Damages | |
Loss Contingencies [Line Items] | |
Gain Contingency, Unrecorded Amount | $ 102 |
Punitive Damages | |
Loss Contingencies [Line Items] | |
Gain Contingency, Unrecorded Amount | $ 11 |