DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - shares | 3 Months Ended | |
Jul. 29, 2017 | Aug. 29, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | METHODE ELECTRONICS INC | |
Entity Central Index Key | 65,270 | |
Current Fiscal Year End Date | --04-28 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jul. 29, 2017 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 36,810,853 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jul. 29, 2017 | Apr. 29, 2017 |
Current Assets: | ||
Cash and Cash Equivalents | $ 297.9 | $ 294 |
Accounts Receivable, Net | 164.5 | 165.3 |
Inventories: | ||
Finished Products | 15.7 | 10.9 |
Work in Process | 8.5 | 8.7 |
Materials | 40.6 | 38.3 |
Total Inventories | 64.8 | 57.9 |
Prepaid and Refundable Income Taxes | 0.6 | 0.6 |
Prepaid Expenses and Other Current Assets | 19.1 | 12.5 |
Total Current Assets | 546.9 | 530.3 |
Property Plan and Equipment: | ||
Land | 0.6 | 0.6 |
Buildings and Building Improvements | 62 | 48.2 |
Machinery and Equipment | 313.9 | 287.9 |
Property, Plant and Equipment, Gross | 376.5 | 336.7 |
Less Allowances for Depreciation | 259.1 | 246.1 |
Property, Plant and Equipment, Net | 117.4 | 90.6 |
Other Assets: | ||
Goodwill | 18 | 1.6 |
Other Intangible Assets, Net | 18.1 | 6.6 |
Cash Surrender Value of Life Insurance | 8.1 | 7.8 |
Deferred Income Taxes | 44.7 | 40.4 |
Pre-production Costs | 19.2 | 15.5 |
Other | 11 | 11.2 |
Total Other Assets | 119.1 | 83.1 |
Total Assets | 783.4 | 704 |
Current Liabilities: | ||
Accounts Payable | 81.2 | 75.3 |
Salaries, Wages and Payroll Taxes | 17.5 | 18.7 |
Other Accrued Expenses | 17.9 | 17.7 |
Short-term Debt | 3.8 | 0 |
Income Tax Payable | 6.1 | 12.7 |
Total Current Liabilities | 126.5 | 124.4 |
Long-term Debt | 47.6 | 27 |
Other Liabilities | 6.4 | 2.6 |
Deferred Income Taxes | 4.3 | 0 |
Deferred Compensation | 9.2 | 8.9 |
Total Liabilities | 194 | 162.9 |
Shareholders' Equity: | ||
Common Stock, $0.50 par value, 100,000,000 shares authorized, 38,157,477 and 38,133,925 shares issued as of July 29, 2017 and April 29, 2017, respectively | 19.1 | 19.1 |
Additional Paid-in Capital | 136.3 | 132.2 |
Accumulated Other Comprehensive Loss | (1.1) | (25.7) |
Treasury Stock, 1,346,624 shares as of July 29, 2017 and April 29, 2017 | (11.5) | (11.5) |
Retained Earnings | 446.6 | 427 |
Total Shareholders' Equity | 589.4 | 541.1 |
Total Liabilities and Shareholders' Equity | $ 783.4 | $ 704 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jul. 29, 2017 | Apr. 29, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.5 | $ 0.5 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 38,157,477 | 38,133,925 |
Treasury stock (in shares) | 1,346,624 | 1,346,624 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 3 Months Ended | |
Jul. 29, 2017 | Jul. 30, 2016 | |
Income Statement [Abstract] | ||
Net Sales | $ 201.2 | $ 191.9 |
Cost of Products Sold | 145.6 | 137.8 |
Gross Profit | 55.6 | 54.1 |
Selling and Administrative Expenses | 29.6 | 26.8 |
Amortization of Intangible Assets | 0.6 | 0.6 |
Income from Operations | 25.4 | 26.7 |
Interest Income, Net | (0.2) | 0 |
Other Expense, Net | 0.8 | 0 |
Income before Income Taxes | 24.8 | 26.7 |
Income Tax Expense | 4.3 | 5.5 |
Net Income | $ 20.5 | $ 21.2 |
Basic and Diluted Income per Share: | ||
Basic (in dollars per share) | $ 0.55 | $ 0.57 |
Diluted (in dollars per share) | 0.55 | 0.57 |
Cash Dividends: | ||
Common stock (in dollars per share) | $ 0.09 | $ 0.09 |
Weighted Average Number of Common Shares Outstanding: | ||
Basic (in shares) | 37,248,689 | 37,322,548 |
Diluted (in shares) | 37,561,240 | 37,469,292 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Jul. 29, 2017 | Jul. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||
Net Income | $ 20.5 | $ 21.2 |
Foreign Currency Translation Adjustment | 24.6 | (6.7) |
Comprehensive Income | $ 45.1 | $ 14.5 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Jul. 29, 2017 | Jul. 30, 2016 | |
Operating Activities: | ||
Net Income | $ 20.5 | $ 21.2 |
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | ||
Provision for Depreciation | 5 | 5.2 |
Amortization of Intangible Assets | 0.6 | 0.6 |
Stock-based Compensation | 4.1 | 3.6 |
Changes in Operating Assets and Liabilities: | ||
Accounts Receivable | 15.1 | 17.6 |
Inventories | (1.5) | (0.6) |
Prepaid Expenses and Other Assets | (9.1) | (5.3) |
Accounts Payable and Other Expenses | (11.1) | (7.9) |
Net Cash Provided by Operating Activities | 23.6 | 34.4 |
Investing Activities: | ||
Purchases of Property, Plant and Equipment | (8) | (4.2) |
Acquisition of Business, Net of Cash Received | (22.2) | 0 |
Sale of Business/Investment/Property | 0.3 | 0 |
Net Cash Used in Investing Activities | (29.9) | (4.2) |
Financing Activities: | ||
Taxes Paid Related to Net Share Settlement of Equity Awards | (0.3) | (0.3) |
Proceeds from Exercise of Stock Options | 0 | 0.9 |
Tax Benefit from Stock Option Exercises | 0 | 0.3 |
Cash Dividends | (3.4) | (3.3) |
Repayment of Borrowings | (2) | (3) |
Net Cash Used in Financing Activities | (5.7) | (5.4) |
Effect of Foreign Currency Exchange Rate Changes on Cash | 15.9 | (3.3) |
Increase in Cash and Cash Equivalents | 3.9 | 21.5 |
Cash and Cash Equivalents at Beginning of Year | 294 | 227.8 |
Cash and Cash Equivalents at End of Period | $ 297.9 | $ 249.3 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Jul. 29, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Methode Electronics, Inc. was incorporated in 1946 as an Illinois corporation and reincorporated in Delaware in 1966. As used herein, “we,” “us,” “our,” the “Company” or “Methode” means Methode Electronics, Inc. and its subsidiaries. Our business is managed and our financial results are reported on a segment basis, with those segments being Automotive, Interface, Power Products and Other. The condensed consolidated financial statements and related disclosures as of July 29, 2017 and results of operations for the three months ended July 29, 2017 and July 30, 2016 are unaudited, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The April 29, 2017 condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. In our opinion, these financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for the fair statement of the results for the interim periods. These financial statements should be read in conjunction with the financial statements included in our Form 10-K for the year ended April 29, 2017 , filed with the SEC on June 22, 2017 . Results may vary from quarter to quarter for reasons other than seasonality. |
RECENTLY ISSUED ACCOUNTING PRON
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Jul. 29, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In May 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2017-09, "Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting." The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The amendments are effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The standard will be effective for us in fiscal years beginning April 29, 2018. This ASU is not expected to have a material effect on Methode's financial statements. If, in the future, Methode makes modifications to its existing share-based payment awards, those modifications will need to be evaluated based on the criteria detailed in this ASU and accounted for accordingly. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments.” The amendments in this update provide guidance on eight specific cash flow presentation issues that have developed due to diversity in practice. The issues include, but are not limited to, debt prepayment or extinguishment costs, contingent consideration payments made after a business combination, and proceeds from the settlement of insurance claims. The amendments in this ASU, where practicable, are to be applied retrospectively. The standard will be effective for us in fiscal years beginning April 29, 2018. Earlier adoption is permitted. We do not believe this pronouncement will have a material impact on our consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” The core principle is that a company should recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In March 2016, the FASB issued ASU 2016-08, "Revenue from Contracts with Customers - Principal versus Agent Considerations (Reporting revenue gross versus net)," which clarifies gross versus net revenue reporting when another party is involved in the transaction. In April 2016, the FASB issued ASU 2016-10, "Identifying Performance Obligations and Licensing," which amends the revenue guidance on identifying performance obligations and accounting for licenses of intellectual property. The standard will be effective for us in the fiscal years beginning April 29, 2018. Earlier adoption is permitted. We are currently evaluating the impact this guidance will have on our consolidated financial statements. We have started our evaluation by engaging third-party consultants to assist in the process. We have established a project management team to analyze the impact of this standard by reviewing our current accounting policies and practices and our customer contracts and arrangements to identify potential differences that would result from the application of this standard. The types of provisions currently being evaluated which could impact the allocation and timing of revenue include contractually guaranteed price reductions and over-time recognition of revenue. There are two transition methods available under the new standard, either full retrospective or modified retrospective. We expect to adopt the standard utilizing the modified retrospective method and expect enhanced disclosure requirements post-adoption. In February 2016, the FASB issued ASU 2016-02, "Leases (ASC 842)," which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. ASC 842 supersedes the previous leases standard, ASC 840 Leases. The amendments in this update are effective for fiscal years beginning after December 15, 2018, which is our fiscal 2020, beginning on April 28, 2019. We are currently evaluating the impact this guidance will have on our consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, "Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities." The new standard requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. The amendments in this update are effective for fiscal years beginning after December 15, 2017, which is our fiscal 2019, beginning on April 29, 2018. We are currently evaluating the impact this guidance will have on our consolidated financial statements. RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS In January 2017, the FASB issued ASU No. 2017-04, “Intangibles-Goodwill and Other (Topic 350).” The amendments in this ASU simplify goodwill impairment testing by removing the requirement of Step 2 to determine the implied fair value of the goodwill of a reporting unit which fails Step 1. The effects of this update result in the amount by which a carrying amount exceeds the reporting unit's fair value to be recognized as an impairment charge in the period identified. The standard is effective for us for annual and interim goodwill impairment tests in fiscal years beginning May 3, 2020. The Company has adopted this ASU on a prospective basis effective as of April 30, 2017 and has concluded that this pronouncement has no material impact on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” The amendments in this update clarify the definition of a business, with the objective of assisting entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The clarified definition requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. To be considered a business, an asset must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. The amendments are effective for us in fiscal years beginning April 29, 2018, with early adoption permitted. The Company has adopted this ASU effective as of April 30, 2017 on a prospective basis and has concluded that this pronouncement has no material impact on our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, "Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 impacts the timing of when excess tax benefits are recognized by eliminating the delay in the recognition of a tax benefit until the tax benefit is realized through a reduction to income taxes payable. The amendments in this update are effective for annual periods beginning after December 15, 2016, which is our fiscal 2018, which began on April 30, 2017. The Company applied the modified retrospective transition method and recognized an increase to deferred tax assets and retained earnings of $2.7 million as of April 30, 2017 to recognize excess tax benefits that had been previously delayed. On a prospective basis, all excess tax benefits and tax deficiencies are recognized as income tax expense or benefit in the statement of operations. As a result of applying the modified retrospective transition method, prior periods were not adjusted. Further, the Company will continue to estimate the number of awards that are expected to vest. In September 2015, the FASB issued ASU 2015-16, "Business Combinations Simplifying the Accounting for Measurement-Period Adjustments." The standard requires that an acquirer recognize measurement-period adjustments in the period in which the adjustments are determined. The income effects of such measurement-period adjustments are to be recorded in the same period’s financial statements but calculated as if the accounting had been completed as of the acquisition date. The impact of measurement-period adjustments to earnings that relate to prior period financial statements are to be presented separately on the income statement or disclosed by line item. The Company has adopted this ASU effective April 30, 2017 on a prospective basis. The adoption of this standard did not have a material impact on our consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, "Inventory (Topic 330): Simplifying the Measurement of Inventory." This ASU requires an entity to measure inventory at the lower of cost or net realizable value, rather than at the lower of cost or market. The Company has adopted this ASU effective April 30, 2017 on a prospective basis. The adoption of this standard did not have a material impact on our consolidated financial statements. |
ACQUISITIONS
ACQUISITIONS | 3 Months Ended |
Jul. 29, 2017 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS Fiscal 2018 Acquisitions On July 27, 2017 , we acquired 100% of the stock of Procoplast S.A. ("Procoplast") for $22.2 million in cash, net of cash acquired, as well as the assumption of debt of $26.5 million . The business, located near the Belgian-German border, is an independent manufacturer of automotive assemblies. The accounts and transactions of Procoplast have been included in the Automotive segment in the consolidated financial statements from the effective date of the acquisition. The Company has not yet completed the process of estimating the fair value of assets acquired and liabilities assumed. Accordingly, the Company's preliminary estimates and the allocation of the purchase price to the assets acquired and liabilities assumed may change as the Company completes the process, which would likely impact the Company's allocation of the purchase price to goodwill. Based on the Company's preliminary allocation of the purchase price, the fair values of the assets acquired and liabilities assumed were: (Dollars in Millions) Cash $ 1.3 Accounts Receivable 7.9 Inventory 4.0 Prepaid Expenses and Other Current Assets 3.2 Intangible Assets 12.0 Goodwill 16.3 Other Assets 0.1 Property, Plant and Equipment 21.2 Accounts Payable (4.9 ) Salaries, Wages and Payroll Taxes (2.8 ) Short-term Debt (3.8 ) Long-term Debt (22.7 ) Deferred Compensation (4.0 ) Deferred Income Tax Liability (4.3 ) Total Purchase Price $ 23.5 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Jul. 29, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS We review our goodwill and other intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable, and at least annually in accordance with ASC No. 350, Intangibles — Goodwill and Others. The values assigned to goodwill and intangible assets are normally based on estimates and judgments regarding expectations for the success and life cycle of products and technologies acquired. A severe decline in expectations could result in significant impairment charges, which could have a material adverse effect on our financial condition and results of operations. As part of the acquisition of Procoplast in fiscal 2018, the Company acquired estimated goodwill of $16.3 million . The following table shows the roll-forward of goodwill in the financial statements as of July 29, 2017 : Automotive Interface Power Products Total Balance as of April 29, 2017 $ — $ 0.6 $ 1.0 $ 1.6 Acquired 16.3 — — 16.3 Impairment — — — — Foreign Currency Translation — 0.1 — 0.1 Balance as of July 29, 2017 $ 16.3 $ 0.7 $ 1.0 $ 18.0 As part of the acquisition of Procoplast in fiscal 2018, the Company acquired estimated intangible assets of 12.0 million , which are classified as customer relationships and agreements and are being amortized over 10 years . The following tables present details of the Company’s intangible assets: As of July 29, 2017 Gross Accumulated Amortization Net Wtd. Avg. Remaining Amortization Periods (Years) Customer Relationships and Agreements $ 28.3 $ 15.6 $ 12.7 9.8 Trade Names, Patents and Technology Licenses 25.8 20.4 5.4 1.2 Covenants Not to Compete 0.1 0.1 — 0.2 Total $ 54.2 $ 36.1 $ 18.1 As of April 29, 2017 Gross Accumulated Amortization Net Wtd. Avg. Remaining Amortization Periods (Years) Customer Relationships and Agreements $ 16.3 $ 15.6 $ 0.7 6.8 Trade Names, Patents and Technology Licenses 25.8 19.9 5.9 1.4 Covenants Not to Compete 0.1 0.1 — 0.4 Total $ 42.2 $ 35.6 $ 6.6 The estimated aggregate amortization expense for the current fiscal year and each of the four succeeding fiscal years is as follows: 2018 $3.1 2019 $3.3 2020 $1.4 2021 $1.3 2022 $1.3 As of July 29, 2017 and April 29, 2017 , the trade names, patents and technology licenses include $1.8 million of trade names that are not subject to amortization. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Jul. 29, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company recognized an income tax provision of $4.3 million and $5.5 million for the three months ended July 29, 2017 and July 30, 2016 , respectively. The Company's effective tax rate was 17.1% and 20.6% for the three months ended July 29, 2017 and July 30, 2016 , respectively. The income tax provision for both of the three months ended July 29, 2017 and July 30, 2016 is lower than the U.S. statutory rate primarily due to foreign investment tax credits and foreign operations with lower statutory rates. |
COMMON STOCK AND STOCK-BASED CO
COMMON STOCK AND STOCK-BASED COMPENSATION | 3 Months Ended |
Jul. 29, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
COMMON STOCK AND STOCK-BASED COMPENSATION | COMMON STOCK AND STOCK-BASED COMPENSATION In fiscal 2016, the Compensation Committee of the Board of Directors (the "Compensation Committee") authorized a new long-term incentive program for key employees consisting of performance-based restricted stock awards (“RSAs”) and time-based restricted stock units (“RSUs”). In the first quarter of of fiscal 2018, the Compensation Committee awarded a maximum of 117,113 RSAs to key members of management. In addition, they were also awarded 23,175 RSUs. In the aggregate, the number of RSAs earned will vary based on performance relative to established goals for fiscal 2020 adjusted EBITDA, with 50% of the target shares earned for threshold performance (representing 410,538 shares), 100% of the target shares earned for target performance (representing 821,075 shares) and 150% of the target shares earned for maximum performance (representing 1,231,613 shares). At the target level of performance, the expected expense for the RSAs is $28.0 million . During the three months ended July 29, 2017 , the Company recorded $1.5 million in compensation expense related to the RSAs. During the three months ended July 30, 2016 , the Company recorded $1.3 million in compensation expense related to the RSAs. As of July 29, 2017 , the Company is recording the RSA compensation expense based on target performance. In future periods, if management makes a determination that exceeding the target is probable for fiscal 2020, a catch-up adjustment to compensation expense will be recorded in that period. In addition, if management makes a determination that it is not probable the Company will meet the target for fiscal 2020, a reversal of expense will be recorded in that period. These amounts could be material to the financial statements. In the aggregate, the Company has granted 631,175 RSUs to key employees under the program, of which 567,175 are still outstanding. The RSUs are subject to a vesting period, with 30% vesting on April 28, 2018, 30% vesting on April 27, 2019 and 40% vesting on May 2, 2020. The total expense for the RSUs is expected to be $19.5 million through 2020. During the three months ended July 29, 2017 , the Company recorded $1.5 million of compensation expense related to the RSUs. During the three months ended July 30, 2016 , the Company recorded $1.3 million in compensation expense related to the RSUs. During the first quarter of fiscal 2018, the Company issued 24,000 shares of common stock to our independent directors, all of which vested immediately upon grant. We recorded $1.0 million of compensation expense related to these shares during the three months ended July 29, 2017 . |
NET INCOME PER SHARE
NET INCOME PER SHARE | 3 Months Ended |
Jul. 29, 2017 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | NET INCOME PER SHARE Basic net income per share is calculated by dividing net income by the weighted average number of common shares outstanding for the applicable period. Diluted net income per share is calculated after adjusting the denominator of the basic net income per share calculation for the effect of all potentially dilutive stock compensation awards outstanding during the period. The following table sets forth the computation of basic and diluted net income per share: Three Months Ended July 29, July 30, Numerator - Net Income $ 20.5 $ 21.2 Denominator: Denominator for Basic Net Income per Share-Weighted Average Shares Outstanding and Vested/Unissued Restricted Stock Awards 37,248,689 37,322,548 Dilutive Potential Common Shares-Employee Stock Options, Restricted Stock Awards and Restricted Stock Units 312,551 146,744 Denominator for Diluted Net Income per Share 37,561,240 37,469,292 Net Income per Share: Basic $ 0.55 $ 0.57 Diluted $ 0.55 $ 0.57 For the three months ended July 29, 2017 , no options to purchase shares have been excluded in the computation of diluted net income per share because the exercise price was less than the average market price for that period. RSAs for 821,075 shares have been excluded from the computation of diluted net income per share for the three months ended July 29, 2017 as these awards are contingent on the Company's full-year performance in fiscal 2020. For the three months ended July 30, 2016 , options to purchase 138,500 shares have been excluded in the computation of diluted net income per share because the exercise price was greater than the average market price for those periods, and therefore, would have been anti-dilutive. RSAs for 822,000 shares have been excluded in the computation of diluted net income per share for the three months ended July 30, 2016 as these awards are contingent on the Company's full-year performance in fiscal 2020. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Jul. 29, 2017 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION We are a global manufacturer of component and subsystem devices. We design, manufacture and market devices employing electrical, electronic, wireless, sensing and optical technologies. Our components are found in the primary end-markets of the automotive, appliance, communications (including information processing and storage, networking equipment, wireless and terrestrial voice/data systems), consumer and industrial equipment, aerospace, rail and other transportation industries. ASC No. 280, “Segment Reporting” establishes annual and interim reporting standards for an enterprise’s operating segments and related disclosures about its products, services, geographic areas and major customers. 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, as defined by ASC No. 280, is the Company’s President and Chief Executive Officer (“CEO”). We have multiple operating segments that are aggregated into four reportable segments. Those segments are Automotive, Interface, Power Products and Other. The Automotive segment supplies electronic and electro-mechanical devices and related products to automobile OEMs, either directly or through their tiered suppliers. Our products include integrated center consoles, hidden switches, ergonomic switches, transmission lead-frames and sensors, which incorporate magneto-elastic sensing and other technologies that monitor the operation or status of a component or system. The Interface segment provides a variety of copper and fiber-optic interface and interface solutions for the aerospace, appliance, commercial food service, construction, consumer, material handling, medical, military, mining, point-of-sale, and telecommunications markets. Solutions include conductive polymers, industrial safety radio remote controls, optical and copper transceivers, and solid-state field-effect consumer touch panels. Services include the design and installation of fiber-optic and copper infrastructure systems and manufacturing active and passive optical components. Through fiscal 2017, the Interface segment included our Connectivity reporting unit, which provided solutions for computer and networking markets, including connectors and custom cable assemblies. This reporting unit was shuttered at the end of fiscal 2017 due to market conditions. The Power Products segment manufactures 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 and power conversion, military, telecommunications, and transportation. The Other segment is primarily made up of our medical device business, Dabir Surfaces, our surface support technology aimed at pressure ulcer prevention. Methode is developing the technology for use by patients who are immobilized or otherwise at risk for pressure ulcers, including patients undergoing long-duration surgical procedures. Through fiscal 2017, the Other segment included our Active Energy Solutions reporting unit, which provided inverters, battery systems and insulated gate bipolar transistor solutions. Due to market conditions, this reporting unit was shuttered at the end of fiscal 2017. The accounting policies of the segments are the same as those described in the summary of significant accounting policies in our Form 10-K for the fiscal year ended April 29, 2017 . We allocate resources to segments based on operating income. Transfers between segments are recorded using internal transfer prices set by us. The tables below present information about our reportable segments: Three Months Ended July 29, 2017 Automotive Interface Power Products Other Eliminations/Corporate Consolidated Net Sales $ 158.9 $ 29.5 $ 15.2 $ 0.1 $ (2.5 ) $ 201.2 Transfers between Segments (2.4 ) (0.1 ) — — 2.5 — Net Sales to Unaffiliated Customers $ 156.5 $ 29.4 $ 15.2 $ 0.1 $ — $ 201.2 Income (Loss) from Operations $ 35.8 $ 0.4 $ 3.3 $ (2.7 ) $ (11.4 ) $ 25.4 Interest Income, Net (0.2 ) Other Expense, Net 0.8 Income before Income Taxes $ 24.8 Three Months Ended July 30, 2016 Automotive Interface Power Products Other Eliminations/Corporate Consolidated Net Sales $ 148.6 $ 33.1 $ 12.1 $ 0.4 $ (2.4 ) $ 191.8 Transfers between Segments (1.5 ) (0.2 ) (0.1 ) (0.3 ) 2.2 0.1 Net Sales to Unaffiliated Customers $ 147.1 $ 32.9 $ 12.0 $ 0.1 $ (0.2 ) $ 191.9 Income (Loss) from Operations $ 36.1 $ (0.7 ) $ 2.5 $ (2.3 ) $ (8.9 ) $ 26.7 Interest Income, Net — Other Income, Net — Income before Income Taxes $ 26.7 |
CONTINGENCIES
CONTINGENCIES | 3 Months Ended |
Jul. 29, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES Certain litigation arising in the normal course of business is pending against us. We are, 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. We consider 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 our opinion, based on the information available, that we have 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. We became aware that the Fuchs companies and their managing director, Albert Fuchs, had materially violated those agreements. As a result, we terminated all of our agreements with the Fuchs companies. On June 20, 2014, we 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 have filed counterclaims alleging breach of contract, interference with business relations and business slander. On April 2, 2015, we amended our complaint against the Fuchs companies to add additional unfair competition and Lanham Act claims and to add additional affiliated parties. As of July 29, 2017 , the matter remains in the discovery stage. |
PRE-PRODUCTION COSTS RELATED TO
PRE-PRODUCTION COSTS RELATED TO LONG-TERM SUPPLY ARRANGEMENTS | 3 Months Ended |
Jul. 29, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PRE-PRODUCTION COSTS RELATED TO LONG-TERM SUPPLY ARRANGEMENTS | PRE-PRODUCTION COSTS RELATED TO LONG-TERM SUPPLY ARRANGEMENTS We incur pre-production tooling costs related to certain products produced for our customers under long-term supply agreements. We had $19.2 million and $15.5 million as of July 29, 2017 and April 29, 2017 , 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. Engineering, testing and other costs incurred in the design and development of production parts are expensed as incurred, unless the costs are reimbursable, as specified in a customer contract. We had $7.1 million at both July 29, 2017 and April 29, 2017 of Company owned pre-production tooling, which is capitalized within property, plant and equipment. |
DEBT AND CREDIT AGREEMENT
DEBT AND CREDIT AGREEMENT | 3 Months Ended |
Jul. 29, 2017 | |
Debt Disclosure [Abstract] | |
DEBT AND CREDIT AGREEMENT | DEBT AND CREDIT AGREEMENT We are party to a Credit Agreement with Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, Wells Fargo Bank, National Association, as L/C Issuer, and the Lenders named therein (the “Credit Agreement”). The Credit Agreement has a maturity date of November 18, 2021. The credit facility is in the maximum principal amount of $150.0 million , with an option to increase the principal amount by up to an additional $100.0 million , subject to customary conditions and approval of the lender(s) providing new commitment(s). The credit facility is available for general corporate purposes, including working capital and acquisitions. The credit facility provides for variable rates of interest based on the type of borrowing and the Company's debt to EBITDA financial ratio. The Credit Agreement is guaranteed by the Company’s wholly-owned U.S. subsidiaries. The Credit Agreement contains customary representations and warranties, financial covenants, restrictive covenants and events of default. At July 29, 2017 , the interest rate on the credit facility was 1.25% plus LIBOR and we were in compliance with the covenants of the agreement. During the three months ended July 29, 2017 , we had no borrowings and payments of $2.2 million , which includes interest of $0.2 million , under this credit facility. As of July 29, 2017 , there were outstanding balances against the credit facility of $25.0 million . We believe the fair value approximates the carrying amount as of July 29, 2017 . On July 27, 2017, the Company acquired Procoplast in a deal that included both a cash payment and the assumption of $3.8 million of short-term debt and $22.7 million of long-term debt with interest rates ranging from 0.79% to 3.06% and maturities ranging from 2018 to 2031. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Jul. 29, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On August 1, 2017 , Methode entered into an agreement to purchase 100% of the outstanding common shares of Pacific Insight Electronics Corp. ("Pacific Insight") in a cash transaction worth approximately $114 million , which will be funded with available cash and Methode's existing credit facility. Pacific Insight is a global solutions provider offering design, development, manufacturing and delivery of lighting and electronic products and full service solutions to the automotive and commercial vehicle markets. Its technology in LED-based ambient and direct lighting will expand our presence within the automotive interior, as well as augment our efforts in overhead console and other areas. The closing of the transaction is subject to customary conditions, including, but not limited to, shareholder and regulatory approvals. The transaction is expected to close in the second quarter of fiscal 2018. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Jul. 29, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
New Accounting Pronouncements, Policy [Policy Text Block] | In May 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2017-09, "Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting." The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The amendments are effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The standard will be effective for us in fiscal years beginning April 29, 2018. This ASU is not expected to have a material effect on Methode's financial statements. If, in the future, Methode makes modifications to its existing share-based payment awards, those modifications will need to be evaluated based on the criteria detailed in this ASU and accounted for accordingly. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments.” The amendments in this update provide guidance on eight specific cash flow presentation issues that have developed due to diversity in practice. The issues include, but are not limited to, debt prepayment or extinguishment costs, contingent consideration payments made after a business combination, and proceeds from the settlement of insurance claims. The amendments in this ASU, where practicable, are to be applied retrospectively. The standard will be effective for us in fiscal years beginning April 29, 2018. Earlier adoption is permitted. We do not believe this pronouncement will have a material impact on our consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” The core principle is that a company should recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In March 2016, the FASB issued ASU 2016-08, "Revenue from Contracts with Customers - Principal versus Agent Considerations (Reporting revenue gross versus net)," which clarifies gross versus net revenue reporting when another party is involved in the transaction. In April 2016, the FASB issued ASU 2016-10, "Identifying Performance Obligations and Licensing," which amends the revenue guidance on identifying performance obligations and accounting for licenses of intellectual property. The standard will be effective for us in the fiscal years beginning April 29, 2018. Earlier adoption is permitted. We are currently evaluating the impact this guidance will have on our consolidated financial statements. We have started our evaluation by engaging third-party consultants to assist in the process. We have established a project management team to analyze the impact of this standard by reviewing our current accounting policies and practices and our customer contracts and arrangements to identify potential differences that would result from the application of this standard. The types of provisions currently being evaluated which could impact the allocation and timing of revenue include contractually guaranteed price reductions and over-time recognition of revenue. There are two transition methods available under the new standard, either full retrospective or modified retrospective. We expect to adopt the standard utilizing the modified retrospective method and expect enhanced disclosure requirements post-adoption. In February 2016, the FASB issued ASU 2016-02, "Leases (ASC 842)," which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. ASC 842 supersedes the previous leases standard, ASC 840 Leases. The amendments in this update are effective for fiscal years beginning after December 15, 2018, which is our fiscal 2020, beginning on April 28, 2019. We are currently evaluating the impact this guidance will have on our consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, "Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities." The new standard requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. The amendments in this update are effective for fiscal years beginning after December 15, 2017, which is our fiscal 2019, beginning on April 29, 2018. We are currently evaluating the impact this guidance will have on our consolidated financial statements. RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS In January 2017, the FASB issued ASU No. 2017-04, “Intangibles-Goodwill and Other (Topic 350).” The amendments in this ASU simplify goodwill impairment testing by removing the requirement of Step 2 to determine the implied fair value of the goodwill of a reporting unit which fails Step 1. The effects of this update result in the amount by which a carrying amount exceeds the reporting unit's fair value to be recognized as an impairment charge in the period identified. The standard is effective for us for annual and interim goodwill impairment tests in fiscal years beginning May 3, 2020. The Company has adopted this ASU on a prospective basis effective as of April 30, 2017 and has concluded that this pronouncement has no material impact on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” The amendments in this update clarify the definition of a business, with the objective of assisting entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The clarified definition requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. To be considered a business, an asset must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. The amendments are effective for us in fiscal years beginning April 29, 2018, with early adoption permitted. The Company has adopted this ASU effective as of April 30, 2017 on a prospective basis and has concluded that this pronouncement has no material impact on our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, "Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 impacts the timing of when excess tax benefits are recognized by eliminating the delay in the recognition of a tax benefit until the tax benefit is realized through a reduction to income taxes payable. The amendments in this update are effective for annual periods beginning after December 15, 2016, which is our fiscal 2018, which began on April 30, 2017. The Company applied the modified retrospective transition method and recognized an increase to deferred tax assets and retained earnings of $2.7 million as of April 30, 2017 to recognize excess tax benefits that had been previously delayed. On a prospective basis, all excess tax benefits and tax deficiencies are recognized as income tax expense or benefit in the statement of operations. As a result of applying the modified retrospective transition method, prior periods were not adjusted. Further, the Company will continue to estimate the number of awards that are expected to vest. In September 2015, the FASB issued ASU 2015-16, "Business Combinations Simplifying the Accounting for Measurement-Period Adjustments." The standard requires that an acquirer recognize measurement-period adjustments in the period in which the adjustments are determined. The income effects of such measurement-period adjustments are to be recorded in the same period’s financial statements but calculated as if the accounting had been completed as of the acquisition date. The impact of measurement-period adjustments to earnings that relate to prior period financial statements are to be presented separately on the income statement or disclosed by line item. The Company has adopted this ASU effective April 30, 2017 on a prospective basis. The adoption of this standard did not have a material impact on our consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, "Inventory (Topic 330): Simplifying the Measurement of Inventory." This ASU requires an entity to measure inventory at the lower of cost or net realizable value, rather than at the lower of cost or market. The Company has adopted this ASU effective April 30, 2017 on a prospective basis. The adoption of this standard did not have a material impact on our consolidated financial statements. |
Commitments and Contingencies, Policy [Policy Text Block] | Certain litigation arising in the normal course of business is pending against us. We are, 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. We consider insurance coverage and third-party indemnification when determining required accruals for pending litigation and claims. |
Goodwill and Intangible Assets, Policy [Policy Text Block] | We review our goodwill and other intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable, and at least annually in accordance with ASC No. 350, Intangibles — Goodwill and Others. The values assigned to goodwill and intangible assets are normally based on estimates and judgments regarding expectations for the success and life cycle of products and technologies acquired. A severe decline in expectations could result in significant impairment charges, which could have a material adverse effect on our financial condition and results of operations. |
Segment Reporting, Policy [Policy Text Block] | The accounting policies of the segments are the same as those described in the summary of significant accounting policies in our Form 10-K for the fiscal year ended April 29, 2017 . We allocate resources to segments based on operating income. Transfers between segments are recorded using internal transfer prices set by us. |
Earnings Per Share, Policy [Policy Text Block] | Basic net income per share is calculated by dividing net income by the weighted average number of common shares outstanding for the applicable period. Diluted net income per share is calculated after adjusting the denominator of the basic net income per share calculation for the effect of all potentially dilutive stock compensation awards outstanding during the period. |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 3 Months Ended |
Jul. 29, 2017 | |
Business Combinations [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed | Based on the Company's preliminary allocation of the purchase price, the fair values of the assets acquired and liabilities assumed were: (Dollars in Millions) Cash $ 1.3 Accounts Receivable 7.9 Inventory 4.0 Prepaid Expenses and Other Current Assets 3.2 Intangible Assets 12.0 Goodwill 16.3 Other Assets 0.1 Property, Plant and Equipment 21.2 Accounts Payable (4.9 ) Salaries, Wages and Payroll Taxes (2.8 ) Short-term Debt (3.8 ) Long-term Debt (22.7 ) Deferred Compensation (4.0 ) Deferred Income Tax Liability (4.3 ) Total Purchase Price $ 23.5 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Jul. 29, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill Roll-forward | The following table shows the roll-forward of goodwill in the financial statements as of July 29, 2017 : Automotive Interface Power Products Total Balance as of April 29, 2017 $ — $ 0.6 $ 1.0 $ 1.6 Acquired 16.3 — — 16.3 Impairment — — — — Foreign Currency Translation — 0.1 — 0.1 Balance as of July 29, 2017 $ 16.3 $ 0.7 $ 1.0 $ 18.0 |
Schedule of Intangible Assets | The following tables present details of the Company’s intangible assets: As of July 29, 2017 Gross Accumulated Amortization Net Wtd. Avg. Remaining Amortization Periods (Years) Customer Relationships and Agreements $ 28.3 $ 15.6 $ 12.7 9.8 Trade Names, Patents and Technology Licenses 25.8 20.4 5.4 1.2 Covenants Not to Compete 0.1 0.1 — 0.2 Total $ 54.2 $ 36.1 $ 18.1 As of April 29, 2017 Gross Accumulated Amortization Net Wtd. Avg. Remaining Amortization Periods (Years) Customer Relationships and Agreements $ 16.3 $ 15.6 $ 0.7 6.8 Trade Names, Patents and Technology Licenses 25.8 19.9 5.9 1.4 Covenants Not to Compete 0.1 0.1 — 0.4 Total $ 42.2 $ 35.6 $ 6.6 |
Schedule of Estimated Aggregate Amortization Expense of Intangible Assets | The estimated aggregate amortization expense for the current fiscal year and each of the four succeeding fiscal years is as follows: 2018 $3.1 2019 $3.3 2020 $1.4 2021 $1.3 2022 $1.3 |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 3 Months Ended |
Jul. 29, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Income Per Share | The following table sets forth the computation of basic and diluted net income per share: Three Months Ended July 29, July 30, Numerator - Net Income $ 20.5 $ 21.2 Denominator: Denominator for Basic Net Income per Share-Weighted Average Shares Outstanding and Vested/Unissued Restricted Stock Awards 37,248,689 37,322,548 Dilutive Potential Common Shares-Employee Stock Options, Restricted Stock Awards and Restricted Stock Units 312,551 146,744 Denominator for Diluted Net Income per Share 37,561,240 37,469,292 Net Income per Share: Basic $ 0.55 $ 0.57 Diluted $ 0.55 $ 0.57 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Jul. 29, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Three Months Ended July 29, 2017 Automotive Interface Power Products Other Eliminations/Corporate Consolidated Net Sales $ 158.9 $ 29.5 $ 15.2 $ 0.1 $ (2.5 ) $ 201.2 Transfers between Segments (2.4 ) (0.1 ) — — 2.5 — Net Sales to Unaffiliated Customers $ 156.5 $ 29.4 $ 15.2 $ 0.1 $ — $ 201.2 Income (Loss) from Operations $ 35.8 $ 0.4 $ 3.3 $ (2.7 ) $ (11.4 ) $ 25.4 Interest Income, Net (0.2 ) Other Expense, Net 0.8 Income before Income Taxes $ 24.8 Three Months Ended July 30, 2016 Automotive Interface Power Products Other Eliminations/Corporate Consolidated Net Sales $ 148.6 $ 33.1 $ 12.1 $ 0.4 $ (2.4 ) $ 191.8 Transfers between Segments (1.5 ) (0.2 ) (0.1 ) (0.3 ) 2.2 0.1 Net Sales to Unaffiliated Customers $ 147.1 $ 32.9 $ 12.0 $ 0.1 $ (0.2 ) $ 191.9 Income (Loss) from Operations $ 36.1 $ (0.7 ) $ 2.5 $ (2.3 ) $ (8.9 ) $ 26.7 Interest Income, Net — Other Income, Net — Income before Income Taxes $ 26.7 |
RECENTLY ISSUED ACCOUNTING PR24
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Details) - Accounting Standards Update 2016-09 $ in Millions | Apr. 30, 2017USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Increase to deferred tax assets | $ 2.7 |
Retained Earnings | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Increase to retained earnings | $ 2.7 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Millions | Jul. 27, 2017 | Jul. 29, 2017 | Jul. 30, 2016 |
Business Acquisition [Line Items] | |||
Cash paid, net of cash acquired | $ 22.2 | $ 0 | |
Procoplast | |||
Business Acquisition [Line Items] | |||
Percentage acquired | 100.00% | ||
Cash paid, net of cash acquired | $ 22.2 | ||
Assumption of debt | $ 26.5 |
ACQUISITIONS - Assets and Liab
ACQUISITIONS - Assets and Liabilities Acquired (Details) - USD ($) $ in Millions | Jul. 29, 2017 | Jul. 27, 2017 | Apr. 29, 2017 |
Business Acquisition [Line Items] | |||
Goodwill | $ 18 | $ 1.6 | |
Procoplast | |||
Business Acquisition [Line Items] | |||
Cash | $ 1.3 | ||
Accounts Receivable | 7.9 | ||
Inventory | 4 | ||
Prepaid Expenses and Other Current Assets | 3.2 | ||
Intangible Assets | 12 | ||
Goodwill | 16.3 | ||
Other Assets | 0.1 | ||
Property, Plant and Equipment | 21.2 | ||
Accounts Payable | (4.9) | ||
Salaries, Wages and Payroll Taxes | (2.8) | ||
Short-term Debt | (3.8) | ||
Long-term Debt | (22.7) | ||
Deferred Compensation | (4) | ||
Deferred Income Tax Liability | (4.3) | ||
Total Purchase Price | $ 23.5 |
GOODWILL AND INTANGIBLE ASSET27
GOODWILL AND INTANGIBLE ASSETS - Schedule of Goodwill Roll-forward (Details) $ in Millions | 3 Months Ended |
Jul. 29, 2017USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 1.6 |
Acquired | 16.3 |
Impairment | 0 |
Foreign Currency Translation | 0.1 |
Ending balance | 18 |
Automotive | |
Goodwill [Roll Forward] | |
Beginning balance | 0 |
Acquired | 16.3 |
Impairment | 0 |
Foreign Currency Translation | 0 |
Ending balance | 16.3 |
Interface | |
Goodwill [Roll Forward] | |
Beginning balance | 0.6 |
Acquired | 0 |
Impairment | 0 |
Foreign Currency Translation | 0.1 |
Ending balance | 0.7 |
Power Products | |
Goodwill [Roll Forward] | |
Beginning balance | 1 |
Acquired | 0 |
Impairment | 0 |
Foreign Currency Translation | 0 |
Ending balance | $ 1 |
GOODWILL AND INTANGIBLE ASSET28
GOODWILL AND INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($) $ in Millions | Jul. 27, 2017 | Jul. 29, 2017 | Apr. 29, 2017 |
Finite-lived Intangible Assets [Roll Forward] | |||
Gross | $ 54.2 | $ 42.2 | |
Accumulated Amortization | 36.1 | 35.6 | |
Net | 18.1 | 6.6 | |
Customer Relationships and Agreements | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Gross | 28.3 | 16.3 | |
Accumulated Amortization | 15.6 | 15.6 | |
Net | $ 12.7 | $ 0.7 | |
Wtd. Avg. Remaining Amortization Periods (Years) | 9 years 9 months 21 days | 6 years 9 months 18 days | |
Trade Names, Patents and Technology Licenses | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Gross | $ 25.8 | $ 25.8 | |
Accumulated Amortization | 20.4 | 19.9 | |
Net | $ 5.4 | $ 5.9 | |
Wtd. Avg. Remaining Amortization Periods (Years) | 1 year 2 months 27 days | 1 year 4 months 24 days | |
Covenants Not to Compete | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Gross | $ 0.1 | $ 0.1 | |
Accumulated Amortization | 0.1 | 0.1 | |
Net | $ 0 | $ 0 | |
Wtd. Avg. Remaining Amortization Periods (Years) | 2 months | 4 months 24 days | |
Procoplast | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible Assets Acquired | $ 12 | ||
Procoplast | Customer Relationships and Agreements | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization period | 10 years |
GOODWILL AND INTANGIBLE ASSET29
GOODWILL AND INTANGIBLE ASSETS - Schedule of Estimated Aggregate Amortization Expense of Intangible Assets (Details) $ in Millions | Jul. 29, 2017USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,018 | $ 3.1 |
2,019 | 3.3 |
2,020 | 1.4 |
2,021 | 1.3 |
2,022 | $ 1.3 |
GOODWILL AND INTANGIBLE ASSET30
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions | Jul. 29, 2017 | Apr. 29, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Trade names not subject to amortization | $ 1.8 | $ 1.8 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jul. 29, 2017 | Jul. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||
Income Tax Expense | $ 4.3 | $ 5.5 |
Effective income tax rate | 17.10% | 20.60% |
COMMON STOCK AND STOCK-BASED 32
COMMON STOCK AND STOCK-BASED COMPENSATION - Narrative (Details) - Two Thousand Fourteen Stock Plan - USD ($) $ in Millions | 3 Months Ended | |
Jul. 29, 2017 | Jul. 30, 2016 | |
Restricted Stock Awards (RSAs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Multiplier - Threshold Performance | 50.00% | |
Multiplier - Target Performance | 100.00% | |
Multiplier - Maximum Performance | 150.00% | |
Expected expense | $ 28 | |
Restricted Stock Awards (RSAs) | Management | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense | 1.5 | $ 1.3 |
Restricted Stock Awards (RSAs) | Independent directors | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense | $ 1 | |
Number of shares issued (in shares) | 24,000 | |
Time-Based Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected expense | $ 19.5 | |
Compensation expense | $ 1.5 | $ 1.3 |
Time-Based Restricted Stock Units (RSUs) | Management | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awarded (in shares) | 23,175 | |
Granted (in shares) | 631,175 | |
Outstanding (in shares) | 567,175 | |
Time-Based Restricted Stock Units (RSUs) | Percentage Vesting on April 28, 2018 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percent | 30.00% | |
Time-Based Restricted Stock Units (RSUs) | Percentage Vesting on April 27, 2019 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percent | 30.00% | |
Time-Based Restricted Stock Units (RSUs) | Percentage Vesting on May 2, 2020 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percent | 40.00% | |
2020 EBITDA Threshold Performance | Restricted Stock Awards (RSAs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares represented (in shares) | 410,538 | |
2020 EBITDA Target Performance | Restricted Stock Awards (RSAs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares represented (in shares) | 821,075 | |
2020 EBITDA Maximum Performance | Restricted Stock Awards (RSAs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares represented (in shares) | 1,231,613 | |
2020 EBITDA Maximum Performance | Restricted Stock Awards (RSAs) | Management | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awarded (in shares) | 117,113 |
NET INCOME PER SHARE - Schedule
NET 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. 29, 2017 | Jul. 30, 2016 | |
Earnings Per Share [Abstract] | ||
Numerator - Net Income | $ 20.5 | $ 21.2 |
Denominator for basic net income per share-weighted average shares outstanding and vested/unissued restricted stock awards (in shares) | 37,248,689 | 37,322,548 |
Dilutive potential common shares-employee and director stock options, restricted stock awards and restricted stock units (in shares) | 312,551 | 146,744 |
Denominator for diluted net income per share (in shares) | 37,561,240 | 37,469,292 |
Net Income per Share: | ||
Basic (in dollars per share) | $ 0.55 | $ 0.57 |
Diluted (in dollars per share) | $ 0.55 | $ 0.57 |
NET INCOME PER SHARE - Narrativ
NET INCOME PER SHARE - Narrative (Details) - shares | 3 Months Ended | |
Jul. 29, 2017 | Jul. 30, 2016 | |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of EPS (in shares) | 0 | 138,500 |
Restricted Stock Awards (RSAs) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of EPS (in shares) | 821,075 | 822,000 |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) | 3 Months Ended |
Jul. 29, 2017segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 4 |
SEGMENT INFORMATION - Schedule
SEGMENT INFORMATION - Schedule of Segment Reporting Information, by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jul. 29, 2017 | Jul. 30, 2016 | |
Segment Reporting Information [Line Items] | ||
Net sales to unaffiliated customers | $ 201.2 | $ 191.9 |
Income (loss) from operations | 25.4 | 26.7 |
Interest Income, Net | (0.2) | 0 |
Other Expense (Income), net | 0.8 | 0 |
Income before Income Taxes | 24.8 | 26.7 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Net sales | 201.2 | 191.8 |
Transfers between segments | ||
Segment Reporting Information [Line Items] | ||
Net sales | 0 | 0.1 |
Automotive | ||
Segment Reporting Information [Line Items] | ||
Net sales to unaffiliated customers | 156.5 | 147.1 |
Income (loss) from operations | 35.8 | 36.1 |
Automotive | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Net sales | 158.9 | 148.6 |
Automotive | Transfers between segments | ||
Segment Reporting Information [Line Items] | ||
Net sales | (2.4) | (1.5) |
Interface | ||
Segment Reporting Information [Line Items] | ||
Net sales to unaffiliated customers | 29.4 | 32.9 |
Income (loss) from operations | 0.4 | (0.7) |
Interface | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Net sales | 29.5 | 33.1 |
Interface | Transfers between segments | ||
Segment Reporting Information [Line Items] | ||
Net sales | (0.1) | (0.2) |
Power Products | ||
Segment Reporting Information [Line Items] | ||
Net sales to unaffiliated customers | 15.2 | 12 |
Income (loss) from operations | 3.3 | 2.5 |
Power Products | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Net sales | 15.2 | 12.1 |
Power Products | Transfers between segments | ||
Segment Reporting Information [Line Items] | ||
Net sales | 0 | (0.1) |
Other | ||
Segment Reporting Information [Line Items] | ||
Net sales to unaffiliated customers | 0.1 | 0.1 |
Income (loss) from operations | (2.7) | (2.3) |
Other | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Net sales | 0.1 | 0.4 |
Other | Transfers between segments | ||
Segment Reporting Information [Line Items] | ||
Net sales | 0 | (0.3) |
Eliminations/Corporate | ||
Segment Reporting Information [Line Items] | ||
Net sales to unaffiliated customers | 0 | (0.2) |
Income (loss) from operations | (11.4) | (8.9) |
Eliminations/Corporate | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Net sales | (2.5) | (2.4) |
Eliminations/Corporate | Transfers between segments | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ 2.5 | $ 2.2 |
PRE-PRODUCTION COSTS RELATED 37
PRE-PRODUCTION COSTS RELATED TO LONG-TERM SUPPLY ARRANGEMENTS - Narrative (Details) - USD ($) $ in Millions | Jul. 29, 2017 | Apr. 29, 2017 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Pre-production tooling costs | $ 19.2 | $ 15.5 |
Company owned pre-production tooling capitalized within property, plant and equipment | $ 7.1 | $ 7.1 |
DEBT AND CREDIT AGREEMENT - Nar
DEBT AND CREDIT AGREEMENT - Narrative (Details) $ in Millions | 3 Months Ended |
Jul. 29, 2017USD ($) | |
Line of Credit Facility [Line Items] | |
Maximum principal amount | $ 150 |
Option to increase principal amount, additional amount (up to) | 100 |
Proceeds from Borrowings | 0 |
Repayments in the period | (2.2) |
Amount outstanding | $ 25 |
Line of credit | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 1.25% |
Variable rate basis | LIBOR |
Interest expense | $ (0.2) |
DEBT AND CREDIT AGREEMENT - De
DEBT AND CREDIT AGREEMENT - Debt (Details) - Procoplast - USD ($) $ in Millions | Jul. 27, 2017 | Jul. 29, 2017 |
Business Acquisition [Line Items] | ||
Assumption of debt | $ 26.5 | |
Short-term Debt | ||
Business Acquisition [Line Items] | ||
Assumption of debt | 3.8 | |
Long-term Debt | ||
Business Acquisition [Line Items] | ||
Assumption of debt | $ 22.7 | |
Minimum | ||
Business Acquisition [Line Items] | ||
Interest rate | 0.79% | |
Maximum | ||
Business Acquisition [Line Items] | ||
Interest rate | 3.06% |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event $ in Millions | Aug. 01, 2017USD ($) |
Subsequent Event [Line Items] | |
Percentage acquired | 100.00% |
Payments to acquire business | $ 114 |