Sales and Marketing

The majority of our sales activities are directed by sales managers who are supported by field application engineers and other engineeringtechnical personnel who work with customers to design our products into their systems. Our field application engineers also help us identify emerging markets and new products. Our products are primarily sold through our in-house sales staff andstaff. We also utilize independent manufacturers’ representatives with offices throughout the world. Information about our sales and operations in different geographic regions is summarized in Note 1215, “Segment Information and Geographic Area Information” to our consolidated financial statements.statements in this Annual Report. Sales are made primarily to OEMs, either directly or through their tiered suppliers, as well as to selling partners and distributors.

Sources and Availability of Materials. 

The principal materials that we purchase include application-specific integrated circuits, coil and bar stock, ferrous and copper alloy sheets, glass, LED displays, plastic molding materials,resins, capacitors and resistors, precious metals, and silicon die castings. All of these items are available from several suppliers and we generally rely on more than one supplier for each item.

Intellectual Property

We normally do not carry inventories of raw materials or finished products in excess of those reasonably requiredgenerally rely on patents, trade secrets, trademarks, licenses, and non-disclosure agreements to meet productionprotect our intellectual property and shipping schedules. In fiscal 2018, the Company experienced increased costs for copper.proprietary products. We did not experience any significant price increases in fiscal 2017 or fiscal 2016. We experienced some lower costs for certain commodities, primarily the cost of resin-based products, in fiscal 2016.

Seasonality. 

A significant portion of our business is dependent upon automotive and commercial vehicle industries. Consequently, our Automotive and Industrial segments may experience seasonal fluctuations based on the automotive sales and vehiclethe production schedules of our customers. The automotive market isand commercial vehicle markets are cyclical and dependsdepend on general economic conditions, interest rates, fuel prices and consumer spending patterns.

Major Customers. 

During the fiscal year ended April 28, 2018,2021, shipments to General Motors Corporation (“GM”) and Ford Motor Company (“Ford”), or their tiered suppliers, represented 43.3%27.5% and 12.3%8.8%, respectively, of consolidated net sales. In general, these sales were for component parts used in particular vehicle models of the OEMs. Typically, our FordGM and GMFord supply arrangements for each component part include a blanket purchase order and production releases. In general, a blanket purchase order is issued for each FordGM or GMFord part as identified by the customer part number. Each such Ford or GM blanket purchase order accounted for less than 10.0% of our fiscal 2018 consolidated net sales. Each blanket purchase order includes standard terms and conditions, including price. In certain circumstances, we supply FordGM or GMFord the requirements for a particular customer vehicle model for the life of the model, which can vary from three to seven years. Both FordGM and GMFord order parts using production releases approved under the relevant blanket purchase order. The production releases are submitted by the various FordGM or GMFord plants and include information regarding part quantities and delivery specifications.

Backlog. Our backlog

We manufacture products based on a combination of specific order requirements and forecasts of our customers’ demand. For many of our OEM customers, especially in the automotive and commercial vehicle markets, we have long-term supply arrangements where there is an expectation that we will supply products in future periods, however these arrangements do not necessarily constitute firm orders was approximately $249.2 millionand these OEM customers are not required to purchase any minimum amount of products from us. Firm orders are generally limited to authorized customer purchase orders which are typically based on April 28, 2018,customer release schedules. We fulfill these purchase orders as promptly as possible. The dollar amount of such purchase order releases on hand and $203.2 million on April 29, 2017.  We expect that most ofnot processed at any point in time is not believed to be significant based upon the time frame involved. Accordingly, backlog at April 28, 2018 willany given time might not be shipped within fiscal 2019.

The markets in which we operate are highly competitive and characterized by rapid changes due to technological improvements and developments. We compete with a large number of other manufacturers in each of our product areas;areas and many of these competitors have greater resources and sales. Price, service and product performance are significant elements of competition in the sale of our products.

Research and Development. 

We maintain a research and development program involving a number of professional employees who devote a majority of their time to the enhancement of existing products and to the development of new products and processes. Research and development costs primarily relate to product engineering and design and development expenses

Our corporate culture is committed to environmental matters affecting us is presenteddoing business with integrity, teamwork, and performance excellence. Our management team and all our employees are expected to exhibit the principles of fairness, honesty, and integrity in Note 8the actions we undertake. Our employees must adhere to our consolidated financial statements.

As highlighted in our Diversity & Inclusion Statement, we believe that diversity and inclusion are business imperatives that will enable us to build and empower our employee relationsfuture workforce. We strive to maintain a diverse and inclusive workforce that reflects our global customer base and the communities that we serve. We embrace the diversity of our employees, including their unique backgrounds, experiences, thoughts, and talents. Employees are good.

The success of our business is summarized in Note 12fundamentally connected to the well-being of our employees. We maintain a work environment with a safety culture grounded on the premise of eliminating workplace incidents, risks, and hazards. We have created and implemented processes to help eliminate safety events and reduce their frequency and severity. The safety of our employees is a top priority and vital to our consolidated financial statements.

Benefits and information statements and other information regarding Methode.

As part of our website.efforts to attract and motivate our employees, we offer competitive compensation and benefits that may vary by region and employee-type. We provide compensation packages that include base salary/wages, and short and long-term incentives. We also provide employee benefits such as life, disability, and health (medical, dental, and vision) insurance, a 401(k) plan with a company match, paid time off, tuition reimbursement, military leave, and holiday pay. We believe those benefits are competitive within our industry.

The Human Resources function at Methode is an active and visible partner to the business at all levels. Our Chief Human Resources Officer reports directly to the Chief Executive Officer and interacts frequently with our Board of Directors. In fiscal 2022, our human capital focus will be on employee health and safety, employee and leadership development, and communications.

Available Information

Through our internet website at www.methode.com, we make available, free of charge, copies of our annual reportAnnual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, filed or furnished pursuant to Section 13(a) or 15(d) ofand other filings with the Securities and Exchange ActCommission (“SEC”), as soon as reasonably practicable after filing such material electronicallythey are filed or otherwise furnishing itfurnished to the SEC. Our filings are also available on the SEC’s website at www.sec.gov. Also posted on our website are the Company’sour Corporate Governance Guidelines, Code of Business Conduct, Anti-Corruption Policy, Insider Trading Policy, Diversity & Inclusion Statement and the charters of the Audit Committee, Compensation Committee, Medical Products Committee, Nominating and Governance Committee and Technology Committee. Copies of these documents are also available free of charge by sending a request to Methode Electronics, Inc., 74018750 West WilsonBryn Mawr Avenue, Suite 1000, Chicago, Illinois 60706,60631, Attention: Investor Relations Department. Information onThe references in this Annual Report to our website isaddress or any third party’s website address, including but not incorporated into this Form 10-K or our other securities filingslimited to the SEC’s website, do not constitute incorporation by reference of the information contained in those websites and isshould not abe considered part of them.

Our business, financial condition and results of operations are subject to certainvarious risks, and uncertainties.  We undertake no dutyincluding, but not limited to, update any such forward-looking statements to conform tothose set forth below, which could cause actual results to vary materially from recent results or changesfrom anticipated future results. These risk factors should be considered together with information included elsewhere in this Annual Report.

Operational and Industry Risks

The COVID-19 pandemic has adversely affected our expectations.  Our business, is dependent upon two large automotivefinancial condition and results of operations. The extent of the effects of the COVID-19 pandemic on our business depends on future events that continue to be highly uncertain and beyond our control.

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 created significant volatility and disruption of financial markets. The continued volatility of the global economy adversely affected our results of operations for fiscal 2021, and we are currently unable to quantify the full and long-term impact of the pandemic on our business, financial condition and results of operations. The extent of the impact on our business will depend on a number of evolving factors, all of which remain uncertain, including the duration and spread of the pandemic, actions taken by governmental authorities to restrict business operations and social activity and impose travel restrictions, shifting consumer demand, the ability of our supply chain to deliver in a timely and cost-effective manner, the ability of our employees and manufacturing facilities to operate efficiently and effectively, the continued viability and financial stability of our customers and specific makessuppliers and modelsfuture access to capital.

We have implemented numerous actions in order to effectively manage the unprecedented challenges and uncertainties of automobiles.  Ourthe COVID-19 pandemic on a global basis, such as implementing new workplace hygiene and disinfection protocols, redesigning production processes, leveraging our global purchasing power to secure PPE for our entire workforce, adopting processes to continuously monitor and strengthen our supply chain and consolidating operations. We may be required to take additional actions in response to evolving conditions, such as renewed travel restrictions, quarantine and stay-at-home orders, as well as uncertainty regarding the widespread availability and adoption of vaccines. A prolonged extension of the disruptions resulting directly or indirectly from the COVID-19 pandemic could have a material adverse impact on our business, financial condition and results will be subjectof operations

The COVID-19 pandemic and the ongoing measures to reduce its spread may also impact many of our other risk factors discussed in this Annual Report on Form 10-K, including customer demand, supply chain disruptions, availability of financing sources and risks of international operations. The ultimate significance of the same risksCOVID-19 pandemic on our business will depend on events that apply to the automotive, appliance, computerare beyond our control and communications industries, such as general economic conditions, interest rate fluctuations, consumer spending patterns and technological changes.  Other factors which may result in materially different results for future periods include the following risk factors.that we cannot predict. Additional risks and uncertainties not presently known to us or that our managementwe currently believe to be insignificantdeem immaterial may also affect our business, financial condition and results of operations.

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We are susceptible to trends and factors affecting the automotive and commercial vehicle industries.

We derive a substantial portion of our revenues from customers in the automotive and commercial vehicle industries. Factors negatively affecting these industries also negatively affect our business, financial condition and results of operations. Automotive sales and production are highly cyclical and, in addition to general economic conditions, also depend on other factors, such as consumer confidence and consumer preferences. Any adverse occurrence, including industry slowdowns, recession, rising interest rates, political instability, costly or constraining regulations, armed hostilities, terrorism, excessive inflation, prolonged disruptions in one or more of our customers’ production schedules or labor disturbances or work stoppages, that results in a significant decline in sales volumes in these industries, or in an overall downturn in the business and operations of our customers in these industries, could materially adversely affect our business, financial condition orand results of operations.  These risk factors should be considered

The COVID-19 pandemic has significantly disrupted, and may continue to significantly disrupt, the global automotive and commercial vehicle industries and customer sales, production volumes and purchases of vehicles by consumers. In addition, the spread of COVID-19 has created a significant disruption in connection with evaluating the forward-looking statements containedmanufacturing operations, delivery systems and overall supply chains of automobile and commercial vehicle manufacturers and suppliers. Further, the COVID-19 pandemic resulted in this report because these factors could cause our actual results and condition to differ materially from those projected in forward-looking statements.  The forward-looking statements in this report are subject to the safe harbor protection provided under the securities laws and are made asa temporary shutdown of substantially all of the datemajor OEMs in our markets at various times in fiscal 2021, which impacted our sales volumes. Although automotive and commercial vehicle production has resumed, customer sales and production volumes may significantly decrease or may be very volatile due to supply chain issues or other global economic impacts and uncertainties which could materially adversely affect our business, financial condition and results of this report.

During the year ended April 28, 2018, shipmentsfiscal 2021, sales to GM and Ford, or their tiered suppliers, represented 43.3%27.5% and 12.3%8.8%, respectively, of our consolidated net sales. The sales to GM primarily consisted of integrated center consoles produced for use in light trucks and SUV's,SUV’s. The sales to Ford consist of ambient lighting, overhead consoles and other integrated modules, including control panels, for a shift in consumer preference for smaller or more fuel efficient vehicles could adversely affect our operating results.variety of models. The supply arrangements with these customers generally provide for supplying the customers’ requirements for particular models, rather than for manufacturing a specific quantity of products. Such supply arrangements cover a period from one year to the life of the model, which is generally three to seven years. Therefore, theThe loss of a FordGM or GMFord supply arrangement for a particular model or product or a significant decrease in demandproduction volumes for one or more of these modelsproducts could have a material adverse impact on our business, financial condition and results of operations and financial condition.operations. We also compete to supply products for successor models and are subject to the risk that FordGM or GMFord will not select us to produce products on any such successor model, which could have a material adverse impact on our results of operations and financial condition. The Company, from time to time, provides price concessions in connection with the awarding of new business.

We are dependent on the availability and price of raw materials.

We require substantial amounts of materials, including application-specific integrated circuits, coil and bar stock, ferrous and copper alloy sheets, extrusions, glass, LED displays, plastic molding materials, precious metals, silicon die castings and wire. The availability and prices of materials may be subject to curtailment or change due to, among other things, new laws or regulations, suppliers’ allocations to other purchasers, supply chain disruptions, changes in exchange rates and worldwide price levels. Any adverse occurrence, including industry slowdown, recession, rising interest rates, political instability, costly or constraining regulations, armed hostilities, terrorism, excessive inflation, prolonged disruptions in one or more of our customers’ production schedules or labor disturbances, that results in significant declinechange in the volumeavailability of, sales inlead times for, or price for, these industries, or in an overall downturn in the business and operations of our customers in these industries,materials could materially adversely affect our business, financial condition and operating results.

Many of the repatriation of dividends or other funds, new or higher tariffs, duties or customs (for example, on products imported from Mexico or China), new barriers to entry or domestic preference procurement requirements and changes to, or withdrawals from, free trade agreements; changes in foreign currency exchange rates and interest rates; economic downturns in foreign countries or geographic regions where we have significant operations, such as Mexico and China; significant changes in conditions in the countries in which we operate with the effect of competition from new market entrants and, in the United Kingdom, with passage of a referendum to discontinue membership in the European Union; impact of compliance with U.S. and other foreign countries’ export controls and economic sanctions; liabilities resulting from U.S. and foreign laws and regulations including those relatedlisted above are complex and often difficult to the Foreign Corrupt Practices Actinterpret and certain other anti-corruption laws; differing labor regulations and union relationships; logistical and communications challenges; and differing protections for our intellectual property.

We have completed acquisitions and financial condition. 

Weather conditions, natural disasters or other catastrophic events could cause significant disruptions in operations, including, specifically, disruptions at our manufacturing facilities or those of our major suppliers or customers. In turn, the quality, cost and volumes of the products we produce and sellsuch event, losses could be unexpectedly, negatively affected, which will impactincurred and significant recovery time could be required to resume operations and our salesbusiness, financial condition and profitability.

War, terrorism, geopolitical uncertainties, public health issues (such as the COVID-19 pandemic), and other business interruptions have caused and could cause damage or disruption to international commerce and the global economy, and thus could have a strong negative effect on us, our suppliers, logistics providers, manufacturing partners and customers. Our business operations could be subject to interruption by power shortages, terrorist attacks and other hostile acts, labor disputes, public health issues, and other events beyond our control. Such events could decrease demand for our products or make it difficult or impossible for us to produce and deliver products to our customers, or to receive components from our suppliers, thereby creating delays and inefficiencies in our supply chain.suppliers. Should major public health issues, including pandemics, arise, we could be negatively affected by shutdowns, shelter in place orders, more stringent employee travel restrictions, additional limitations in freight services, governmental actions limiting the movement of products between regions, and disruptions in the operations of our manufacturing partners and component suppliers. The majority of our research and development activities, our corporate headquarters, information technology systems, and other criticalAny such business operations, including certain component suppliers and manufacturing partners, are in locations thatinterruptions could be affected by natural disasters. In the event of a natural disaster, losses could be incurred and significant recovery time could be required to resume operations and our financial condition and operating results could be materially adversely affected. While we may purchase insurance policies to cover the direct economic impact experienced following a natural disaster occurring at one of our own facilities, there can be no assurance that such insurance policies will cover the full extent of our financial loss nor will they cover losses which are not economic in nature such as, for example, our reputation as a reliable supplier.

Technology and Intellectual Property Risks

Our operations could be materially adversely affected.

We face certain security threats relating to the confidentiality and integrity of our ITinformation technology (“IT”) systems. Despite implementation of security measures, our IT systems may be vulnerable to damage from computer viruses, cyber attackscyber-attacks and other unauthorized access, and these security breaches could result in a disruption to our operations. A material network breach of our IT systems could involve the theft of our and our customers' intellectual property or trade secrets which may be used by competitors to develop competing products. To the extent that any security breach results in a loss or damage to data, or inappropriate disclosure of confidential or proprietary information, it could cause significant damage to our reputation, affect our customer relations, lead to claims against us, increase our costs to protect against future damage and could result in a material adverse effect on our business, financial condition and financial position.

In particular, the General Data Privacy Regulation (“GDPR”) of the European Union creates a range of compliance obligations applicable to the collection, use, retention, security, processing and transfer of personal data in the products we manufacture dueEuropean Union. The GDPR, which is wide-ranging in scope, imposes several requirements relating to a varietythe consent of factors, including design or manufacturing errors, component failure or counterfeit parts. Product defects may resultthe individuals to whom the personal data relates, the information provided to the individuals, the security and confidentiality of the personal data, data breach notification and the use of third-party processors in delayed shipmentsconnection with the processing of the personal data. The GDPR also imposes strict rules on the transfer of personal data out of the European Union to countries such as the U.S., enhances enforcement authority and reduced demandimposes large penalties for our products. noncompliance.

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We may be subject to increased costs due to warranty claims on defective products. Product defects may result in product liability claims against us where defects cause, or are alleged to cause, property damage, bodily injury or death. We may be required to participate in a recall involving products that are, or are alleged to be, defective. We carry insurance for certain legal matters involving product liability, however, we do not have coverage for all costs related to product defects or recalls and the costs of such claims, including costs of defense and settlement, may exceed our available coverage.

We have numerous United StatesU.S. and foreign patents, trade secrets and license agreements covering certain of our products and manufacturing processes. Our ability to compete effectively with other companies depends, in part, on our ability to maintain the proprietary nature of our technology. Although we have been awarded, have filed applications for, or have been licensed under numerous patents in the United StatesU.S. and other countries, there can be no assurance concerning the degree of protection afforded by these patents or the likelihood that pending patents will be issued. The loss of certain patents and trade secrets could adversely affect our sales, margins or profitability.

We have and may become involved in litigation in the future to protect our intellectual property or because others may allege that we infringe on their intellectual property. These claims and any resulting lawsuit could subject us to liability for damages and invalidate our intellectual property rights. If an infringement claim is successfully asserted by a holder of intellectual property rights, we may be required to cease marketing or selling certain products, pay a penalty for past infringement and spend significant time and money to develop a non-infringing product or process or to obtain licenses for the technology, process or information from the holder. We may not be successful in the development of a non-infringing alternative, or licenses may not be available on commercially acceptable terms, if at all, in which case we may lose sales and profits. In addition, any litigation could be lengthy and costly and could materially adversely affect us even if we are successful in the litigation.

We operate our business on a global basis and changes to trade policy, including tariffs and customs regulations, could have completed acquisitionsa material and divestituresadverse effect on our business.

We manufacture and sell our products globally and rely on a global supply chain to deliver the required raw materials, components, and parts, as well as the final products to our customers. Existing free trade laws and regulations, such as the United States-Mexico-Canada Agreement, provide certain duties and tariffs for qualifying imports and exports, subject to compliance with the applicable classification and other requirements. Changes in laws or policies governing the terms of foreign trade, and in particular increased trade restrictions, tariffs or taxes on imports from countries where we manufacture products, such as China, Egypt and Mexico, could have a material adverse effect on our business, financial condition and operating results. For instance, beginning in 2018, the U.S. and Chinese governments have imposed a series of significant incremental retaliatory tariffs to certain imported products. Most notably with respect to the automotive and commercial vehicle industries, the U.S. imposed tariffs on imports of certain steel, aluminum and automotive components, and China imposed retaliatory tariffs on imports of U.S. vehicles and certain automotive components. Depending upon their duration and implementation, as well as our ability to mitigate their impact, these tariffs and other regulatory actions could materially affect our business, including in the pastform of an increase in cost of goods sold, decreased margins, increased pricing for customers, and wereduced sales.

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Climate change and climate change regulations could adversely impact our business and results of operation.

Increased public awareness and concern regarding environmental risks, including global climate change, may continueresult in more international, regional and/or federal requirements or industry standards to seek acquisitions to grow our businesses. We may also divest operations to focus on our core businesses. We may fail to derive significant benefits from such transactions. Also, if we fail to achieve sufficient financial performance from an acquisition, certain long-lived assets,reduce or mitigate global warming and other environmental risks. These regulations or standards could mandate more restrictive requirements, such as property, plantstricter limits on greenhouse gas emissions and equipmentproduction of single use plastics. In addition, the risks of climate change may impact manufacturing, product demand, the availability and intangible assets,cost of materials and natural resources, and sources and supply of energy, and could become impairedincrease insurance and result in the recognitionother operating costs. If environmental laws or regulations or industry standards are either changed or adopted and impose significant operational restrictions and compliance requirements upon us, our operations or products, or our operations are disrupted due to physical impacts of an impairment loss.

Despite our quality control and quality assurance efforts, defects may occur in the products we manufacture due to a variety of factors, including design or strategic divestitures may:

Financial Risks

We have significant goodwill and other intangible assets, and future impairment of these assets could have a material adverse impact on our financial condition and results of operations. Further, if

A significant portion of our long-term assets consists of goodwill and long-lived assets recorded as a result of past acquisitions. We do not amortize goodwill and indefinite long-lived intangible assets, but rather review them for impairment on an annual basis or more frequently whenever events or changes in circumstances indicate that their carrying value may not be recoverable. In the event that we determine that our goodwill or long-lived assets are impaired, we may be required to record a significant charge to earnings that could adversely affect our financial condition and results of operations.

We have incurred indebtedness and our level of indebtedness and restrictions under our indebtedness could adversely affect our operations and liquidity.

Our primary sources of liquidity are cash generated from operations and availability under our revolving credit facility. Our senior unsecured credit agreement consists of a $200.0 million revolving credit facility and a $250.0 million term loan. As of May 1, 2021, $228.6 million in principal was outstanding under these financing arrangements and we had $190.1 million of availability remaining under the revolving credit facility. The term loan matures in September 2023 and requires quarterly principal payments of $3.1 million over the five-year term, with the remaining balance due upon maturity. The senior unsecured credit agreement provides for variable rates of interest based on the type of borrowing and our debt to EBITDA financial ratio and contains customary representations and warranties, financial covenants, restrictive covenants and events of default.

Our senior unsecured credit agreement provides an option to increase the size of our revolving credit facility and term loan by an additional $200.0 million, subject to customary conditions and approval of the lenders providing the new commitments. There can be no assurance that lenders will approve additional commitments under current circumstances.

Our senior unsecured credit agreement imposes various restrictions and covenants regarding the operation of our business, including covenants that require us to obtain the lenders’ consent before we can, among other things and subject to certain exceptions: (i) incur additional indebtedness or additional liens on our property; (ii) consummate certain acquisitions, dispositions, mergers or consolidations; (iii) make any material change in the nature of our business; (iv) enter into certain transactions with our affiliates; or (v) repurchase or redeem any outstanding shares of our common stock or pay cash dividends to our stockholders when a default exists or certain financial covenants are not maintained.

The amount of our outstanding indebtedness could have an adverse effect on our operations and liquidity, including by, among other things: (i) making it more difficult for us to pay or refinance our debts as they become due during adverse economic and industry conditions, because we may not have sufficient cash flows to make our scheduled debt payments; (ii) causing us to use a larger portion of our cash flows to fund interest and principal payments, thereby reducing the availability of cash to fund working capital, product development, capital expenditures and other business activities; (iii) making it more difficult for us to take advantage of significant business opportunities, such as acquisition opportunities or other strategic transactions, and to react to changes in market or industry conditions; and (iv) limiting our ability to borrow additional monies in the future to fund the activities and expenditures described above and for other general corporate purposes as and when needed, which could force us to suspend, delay or curtail business prospects, strategies or operations.

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A significant fluctuation between the U.S. dollar and other currencies could adversely impact our business, results of operations and financial condition.

We transact business in various foreign countries. We present our consolidated financial statements in U.S. dollars, but a portion of our revenues and expenditures are transacted in other currencies. As a result, we are unableexposed to certify thatfluctuations in foreign currencies. Additionally, we have currency fluctuation exposure arising from funds held in local currencies in foreign countries. Volatility in the exchange rates between the foreign currencies and the U.S. dollar could have an adverse effect on our productsbusiness, financial condition and results of operations.

Changes in our effective tax rate may adversely impact our results of operations.

A number of factors may increase our effective tax rate, which could reduce our net income, including:

Our judgments regarding the accounting for tax positions and the resolution of tax disputes may impact our results of operations and financial condition.

Significant judgment is required to determine our effective tax rate and evaluate our tax positions. We provide for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement criteria prescribed by applicable accounting standards. Fluctuations in federal, state and foreign taxes or a change to uncertain tax positions, including related interest and penalties, may impact our effective tax rate and results of operations. Additionally, we are conflict free,subject to audits in the various taxing jurisdictions in which we conduct business. Based on the status of these audits and the protocol of finalizing audits by the relevant tax authorities, it is not possible to estimate the impact of changes, if any, to previously recorded uncertain tax positions. Any negative or unexpected outcomes of these examinations and audits could have a material adverse impact on our results of operations and financial condition.

Performance-based awards under our long-term incentive plan may require significant adjustments to compensation expense which could have a material adverse impact on our results of operations.

Compensation expense for the performance-based restricted stock awards (“RSAs”) and performance units (“Performance Units”) recently awarded under our five-year long-term incentive program will be ‎recognized over the vesting ‎period based on the projected probability of achieving the relevant performance goals for fiscal 2025. As of May 1, 2021, we have not recorded any compensation expense for the RSAs or the Performance Units based on the probability assessment required under the accounting rules and regulations. Each quarter, we will assess the probability of vesting for the RSAs and the Performance Units and will adjust the compensation expense as necessary. At such time, we may face challenges withbe required to record compensation ‎expense relating to prior periods, and such ‎compensation expense adjustment could be ‎material to our customers, whichresults of operation.‎

Reorganization activities may place us at a competitive disadvantage,lead to additional costs and material adverse effects.

In the past, we have taken actions to restructure and optimize our reputationproduction and manufacturing capabilities and efficiencies through relocations, consolidations, facility closings or asset sales. In the future, we may take additional restructuring actions including the consolidating, closing or selling of additional facilities. These actions could result in impairment charges and various charges for such items as idle capacity, disposition costs and severance costs, in addition to normal or attendant risks and uncertainties. We may be harmed.

Item 2. Properties

From time to time, we were nothave and may become involved in various litigation matters, including administrative proceedings, regulatory proceedings, environmental matters, and commercial disputes. The impact and outcome of litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that could harm our business. We are not currently aware of any material legal proceedings or any administrativeclaims to which we are a party or judicial proceedings with governmental authorities pertaining to which our property is subject that we believe will have, individually or in the dischargeaggregate, a material adverse effect on our business, financial condition or results of materials into the environment.

Not Applicable

All executive officers are elected by the Board of Directors and serve a term of one year or until their successors are duly elected and qualified.

Market Information

Our common stock is traded on the New York Stock Exchange. The followingExchange under the symbol “MEI”. As of June 17, 2021, we had 382 holders of record of our common stock. This does not include persons whose stock is a tabulation of highin nominee or “street name” accounts held by banks, brokers and low sales prices for the periods presented andother nominees.

Dividends

While we currently expect that quarterly cash dividends declared per share. 

Issuer Purchases of Equity Securities

On June 14, 2018,March 31, 2021, the Board of Directors declared a dividendauthorized the purchase of $0.11 per share of common stock, payable on July 27, 2018,up to holders of record on July 13, 2018. As of June 19, 2018, the number of record holders$100.0 million of our common stock, expiring on March 31, 2023. Purchases under this program 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. In fiscal 2021, we purchased and retired $7.5 million of common stock.

The following table provides information about our purchases of equity securities that are registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) during the quarter ended May 1, 2021:

Securities Authorized for Issuance Under Equity Compensation Plans

See Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters,” of this Annual Report for certain information relating to our equity compensation plans.

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Stock Performance

The following graph shows the cumulative total stockholder return on our common stock over the period spanning April 30, 2016 to May 1, 2021, as compared with that of the NYSE Composite Index (“NYSE Index”), our Fiscal 2020 Peer Group and our Fiscal 2021 Peer Group. We have assumed that dividends have been reinvested and that $100 was 411.invested on April 30, 2016. The stock price performance included in this graph is historical and not necessarily indicative of future stock price performance.

The Fiscal 2021 Peer Group consists of the following fifteen public companies:

The Compensation Committee of the Board of Directors reviews the peer group annually and from time to time changes the composition of the peer group where changes are appropriate. In fiscal 2021, the Compensation Committee added Delphi Technologies PLC and Visteon Corporation and removed Dorman Products, Inc. and Standard Motor Products, Inc. based on our revenue, market capitalization and industry criteria for the peer group. Delphi Technologies PLC, Kemet Corporation and MTS Systems Corporation were all acquired in fiscal 2021 and were excluded from the five-year cumulative total returns.