# Methode Electronics Inc: Form 10-Q for the period ended Aug 2, 2025

- Company: [Methode Electronics Inc](/companies/mei.md) (CIK 65270)
- Form: 10-Q
- Filed: 2025-09-09
- Accepted by EDGAR: Sep 9, 2025, 16:30 ET
- Period: 2025-08-02
- Accession: 0000950170-25-113818
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/65270/000095017025113818/mei-20250802.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/65270/000095017025113818/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-08-02.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-05-04 to 2025-08-02 | $240.5m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-05-04 to 2025-08-02 | $197.0m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2025-05-04 to 2025-08-02 | $43.5m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2025-05-04 to 2025-08-02 | $36.6m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-05-04 to 2025-08-02 | $1.1m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-05-04 to 2025-08-02 | $4.2m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-05-04 to 2025-08-02 | −$10.3m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-05-04 to 2025-08-02 | −$0.29 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-05-04 to 2025-08-02 | −$0.29 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-05-04 to 2025-08-02 | 35,372,619 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-05-04 to 2025-08-02 | $25.1m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2025-05-04 to 2025-08-02 | $7.1m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 3 months, 2025-05-04 to 2025-08-02 | $2.8m | us-gaap:PaymentsOfDividendsCommonStock |
| Share repurchases | 3 months, 2025-05-04 to 2025-08-02 | $0 | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2025-08-02 | $121.1m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-08-02 | $549.2m | us-gaap:AssetsCurrent |
| Total assets | at 2025-08-02 | $1.29bn | us-gaap:Assets |
| Current liabilities | at 2025-08-02 | $219.6m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-08-02 | $603.2m | us-gaap:Liabilities |
| Long-term debt | at 2025-08-02 | $323.2m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2025-08-02 | $200.0k | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2025-08-02 | $688.1m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 30,487 characters.

As used herein, “we,” “us,” “our,” the “Company” or “Methode” means Methode Electronics, Inc. and its subsidiaries.

### CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Quarterly Report”) includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect, when made, our current views with respect to current events and financial performance. Such forward-looking statements are subject to many risks, uncertainties and factors relating to our operations and business environment, which may cause our actual results to be materially different from any future results, express or implied, by such forward-looking statements. All statements that address future operating, financial or business performance or our strategies or expectations are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “potential,” “outlook” or “continue,” and other comparable terminology. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following:

- Dependence on the automotive, commercial vehicle, and construction industries;
- Timing, quality and cost of new program launches;
- Changes in electric vehicle (“EV”) demand;
- Investment in programs prior to the recognition of revenue;
- Impact from production delays or cancelled orders;
- Changes in global trade policies, including tariffs;
- Failure to attract and retain qualified personnel;
- Impact from inflation;
- Dependence on the availability and price of materials;
- Dependence on a small number of large customers;
- Dependence on our supply chain;
- Risks related to conducting global operations;
- Effects of potential catastrophic events or other business interruptions;
- Ability to withstand pricing pressures, including price reductions;
- Ability to compete effectively;
- Our lengthy sales cycle;
- Risks relating to our use of requirements contracts;
- Potential work stoppages;
- Ability to successfully benefit from acquisitions and divestitures;
- Ability to manage our debt levels;
- Ability to comply with restrictions and covenants under our credit agreement;
- Interest rate changes and variable rate instruments;
- Timing and magnitude of costs associated with restructuring activities;
- Recognition of goodwill and other intangible asset impairment charges;
- Risks associated with inventory;
- Ability to remediate a material weakness in our internal control over financial reporting;
- Currency fluctuations;
- Income tax rate fluctuations;
- Judgments related to accounting for tax positions;
- Risks associated with litigation and government inquiries;
- Risks associated with warranty claims;
- Impact of changing government regulations;
- Changing requirements by stakeholders on environmental or social matters;
- Effects of IT disruptions or cybersecurity incidents;
- Ability to innovate and keep pace with technological changes; and
- Ability to protect our intellectual property.

Additional details and factors are discussed under the caption “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended May 3, 2025 and in Part II, Item 1A of this Quarterly Report. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. Any forward-looking statements made by us speak only as of the date on which they are made. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements, whether as a result of new information, subsequent events or otherwise.

### Overview

We are a leading global supplier of custom engineered solutions with sales, engineering and manufacturing locations in North America, Europe, Middle East and Asia. We design, engineer and produce mechatronic products for Original Equipment Manufacturers (“OEMs”) utilizing our broad range of technologies for user interface, light-emitting diode (“LED”) lighting system, power distribution and sensor applications.

Our solutions are found in the end markets of transportation (including automotive, commercial vehicle, e-bike, aerospace, bus and rail), cloud computing infrastructure, construction equipment and consumer appliance.

### Macroeconomic Conditions

There is continued uncertainty about the future relationship between the U.S. and various other countries with respect to tariffs, trade policies, government regulations, treaties and trade agreements. We are exposed to market risk with respect to increased and volatile duties assessed on raw materials (including copper, steel and aluminum), component parts (including semiconductors) and finished goods we import into the U.S. from our various manufacturing sites, including those in Mexico, China, Egypt, Europe and Canada. Should any of these tariffs expand, raw materials and finished goods that we import will face higher prices, which could lead to reduced margins or increased prices that could, in turn, cause decreased customer demand. To the extent that we are unable to obtain price increases or there is a significant decrease in customer demand, the impact of new or higher tariffs could have a material impact on our results of operations.

The global economy continues to experience volatile disruptions including to the commodity, labor and transportation markets, arising from a combination of geopolitical events and various economic and financial factors. These disruptions have affected our operations and may continue to affect our business, financial condition and results of operations. As a result of continued inflation, we have implemented measures to mitigate certain adverse effects of higher costs. However, we have been unable to fully mitigate or pass through the increases in our costs to our customers, which will likely continue in the future.

Our business in the future will be impacted by the broad trend of electrification. The adoption of EVs has been slower than anticipated, which may impact our financial condition and results of operations. In addition, there are various government policies, subsidies, and economic incentives designed to increase EV adoption in many jurisdictions. There is no guarantee these incentive programs will be available in the future.

### Global Supply Chain Disruptions

Although we saw improvements in our supply chain in fiscal 2025, including easing of the worldwide semiconductor supply shortage, new supply chain disruptions may occur in the future. In addition, we have experienced, and may continue to experience, business interruptions, including customer shutdowns and increased material and logistics costs and labor shortages. Changes in government regulations in areas including, but not limited to, trade and tariff regulations as noted above, could also increase our costs. We continue to work closely with suppliers and customers to minimize the potential adverse impact from global supply chain disruptions. However, if we are not able to mitigate any direct or indirect supply chain disruptions, this may have a material adverse impact on our financial condition, results of operations and cash flows.

### Consolidated Results of Operations

The table below compares our results of operations between the three months ended August 2, 2025 and the three months ended July 27, 2024:

*(in millions)*

|  | Three Months Ended August 2, 2025 (13 Weeks) | July 27, 2024 (13 Weeks) |
| --- | ---: | ---: |
| Net sales | $240.5 | $258.5 |
| Cost of products sold | 197.0 | 213.9 |
| Gross profit | 43.5 | 44.6 |
| Selling and administrative expenses | 36.6 | 46.2 |
| Amortization of intangibles | 5.8 | 5.9 |
| Interest expense, net | 5.9 | 4.8 |
| Other expense, net | 1.3 | 0.8 |
| Income tax expense | 4.2 | 5.2 |
| Net loss | $(10.3) | $(18.3) |

24

### Net sales

Net sales decreased $18.0 million, or 7.0%, to $240.5 million in the three months ended August 2, 2025, compared to $258.5 million in the three months ended July 27, 2024. Foreign currency translation increased net sales by $7.4 million. Excluding foreign currency translation, net sales decreased $25.4 million. The decrease was primarily due to lower sales volumes in the Automotive segment, partially offset by higher sales volumes in the Industrial segment.

### Cost of products sold

Cost of products sold decreased $16.9 million, or 7.9%, to $197.0 million (81.9% of net sales) in the three months ended August 2, 2025, compared to $213.9 million (82.7% of net sales) in the three months ended July 27, 2024. Foreign currency translation increased cost of products sold by $5.7 million. Excluding foreign currency translation, cost of products sold decreased $22.6 million. The decrease was primarily due to lower material, freight and operating costs as a result of lower sales volumes.

### Gross profit margin

Gross profit margin was 18.1% of net sales in the three months ended August 2, 2025, compared to 17.3% of net sales in the three months ended July 27, 2024. The increase in gross profit margin was primarily a result of product mix from higher sales in the Industrial segment.

### Selling and administrative expenses

Selling and administrative expenses decreased $9.6 million, or 20.8%, to $36.6 million (15.2% of net sales) in the three months ended August 2, 2025, compared to $46.2 million (17.9% of net sales) in the three months ended July 27, 2024. Foreign currency translation increased selling and administrative expenses by $0.6 million. Excluding foreign currency translation, selling and administrative expenses decreased $10.2 million. The decrease was primarily due to lower professional fees and compensation expense.

### Amortization of intangibles

Amortization of intangibles was $5.8 million in the three months ended August 2, 2025, compared to $5.9 million in the three months ended July 27, 2024.

### Interest expense, net

Interest expense, net was $5.9 million in the three months ended August 2, 2025, compared to $4.8 million in the three months ended July 27, 2024. The increase was due to a higher level of borrowings and increased interest rates under our credit facility.

### Other expense, net

Other expense, net was $1.3 million in the three months ended August 2, 2025, compared to $0.8 million in the three months ended July 27, 2024. Net foreign exchange loss was $1.5 million in the three months ended August 2, 2025, compared to $0.6 million in the three months ended July 27, 2024.

In the three months ended August 2, 2025, other expense, net included a non-cash write-off of $0.6 million of unamortized debt issuance costs compared to $1.2 million in the three months ended July 27, 2024. Other expense, net also includes $0.5 million of a net gain on sale of assets in the three months ended August 2, 2025.

### Income tax expense

Income tax expense was $4.2 million (-68.9% effective tax rate) in the three months ended August 2, 2025, compared to $5.2 million (-39.7% effective tax rate) in the three months ended July 27, 2024.

The effective tax rate for the three months ended August 2, 2025 differs from the U.S. federal statutory tax rate of 21% primarily due to an increase in a valuation allowance for U.S. deferred tax assets, an unfavorable impact from global intangible low-tax income and non-deductible interest, partially offset by the impact of income derived from foreign operations with lower statutory tax rates. The effective tax rate for the three months ended July 27, 2024 differs from the U.S. federal statutory tax rate of 21% primarily due to income derived from foreign operations with lower statutory tax rates and research deductions claimed in foreign jurisdictions, partially offset by global intangible low-tax income and non-deductible expenses.

### Net loss

Net loss was $10.3 million in the three months ended August 2, 2025, compared to $18.3 million in the three months ended July 27, 2024. The net loss was a result of the reasons described above.

### Reportable Operating Segments

### Automotive

*($ in millions)*

| Net sales | Three Months Ended August 2, 2025 (13 Weeks) | July 27, 2024 (13 Weeks) |
| --- | ---: | ---: |
| North America | $36.6 | $66.3 |
| Europe, the Middle East & Africa ("EMEA") | 61.6 | 59.3 |
| Asia | 7.9 | 9.2 |
| Net sales | 106.1 | 134.8 |
| Gross profit | $0.1 | $8.6 |
| As a percent of net sales | 0.1% | 6.4% |
| Loss from operations | $(12.5) | $(5.7) |
| As a percent of net sales | (11.8)% | (4.2)% |

#### Net sales

Automotive segment net sales decreased $28.7 million, or 21.3%, to $106.1 million in the three months ended August 2, 2025, compared to $134.8 million in the three months ended July 27, 2024. Excluding foreign currency translation, net sales decreased $32.5 million.

Net sales in North America decreased $29.7 million to $36.6 million in the three months ended August 2, 2025, compared to $66.3 million in the three months ended July 27, 2024. The decrease was due to the roll-off of legacy programs, partially offset by new program launches. Net sales in EMEA increased $2.3 million to $61.6 million in the three months ended August 2, 2025, compared to $59.3 million in the three months ended July 27, 2024. Excluding foreign currency translation, net sales in EMEA decreased $1.4 million due to lower sales volumes of sensor products. Net sales in Asia decreased $1.3 million to $7.9 million in the three months ended August 2, 2025, compared to $9.2 million in the three months ended July 27, 2024. Excluding foreign currency translation, net sales in Asia decreased $1.4 million primarily due to lower sales of products for EVs.

#### Gross profit

Automotive segment gross profit decreased $8.5 million, or 98.8%, to $0.1 million in the three months ended August 2, 2025, compared to $8.6 million in the three months ended July 27, 2024. Excluding foreign currency translation, gross profit decreased $8.9 million. Gross profit margins decreased to 0.1% in the three months ended August 2, 2025, compared to 6.4% in the three months ended July 27, 2024. The decrease in gross profit was primarily due to lower sales volumes in North America, partially offset by lower freight and warranty costs.

#### Loss from operations

Automotive segment loss from operations was $12.5 million in the three months ended August 2, 2025, compared to $5.7 million in the three months ended July 27, 2024. The higher loss from operations was due to lower gross profit, partially offset by lower selling and administrative expenses. Selling and administrative expenses decreased primarily due to lower compensation expense.

### Industrial

*($ in millions)*

|  | Three Months Ended August 2, 2025 (13 Weeks) | July 27, 2024 (13 Weeks) |
| --- | ---: | ---: |
| Net sales | $123.5 | $111.5 |
| Gross profit | $39.7 | $32.8 |
| As a percent of net sales | 32.1% | 29.4% |
| Income from operations | $26.5 | $16.9 |
| As a percent of net sales | 21.5% | 15.2% |

26

#### Net sales

Industrial segment net sales increased $12.0 million, or 10.8%, to $123.5 million in the three months ended August 2, 2025, compared to $111.5 million in the three months ended July 27, 2024. Excluding foreign currency translation, net sales increased $8.4 million.

The increase was due to higher sales volumes of power products, including for data centers, and lighting products for off-road equipment markets, partially offset by lower sales volumes for radio remote control devices and lighting products for commercial vehicles.

#### Gross profit

Industrial segment gross profit increased $6.9 million, or 21.0%, to $39.7 million in the three months ended August 2, 2025, compared to $32.8 million in the three months ended July 27, 2024. Excluding foreign currency translation, gross profit increased $5.6 million. Gross profit margins increased to 32.1% in the three months ended August 2, 2025, compared to 29.4% in the three months ended July 27, 2024. Gross profit improved due to higher sales volumes and lower freight costs.

#### Income from operations

Industrial segment income from operations increased $9.6 million, or 56.8%, to $26.5 million in the three months ended August 2, 2025, compared to $16.9 million in the three months ended July 27, 2024. Excluding foreign currency translation, income from operations increased $8.6 million. The increase was primarily due to higher gross profit and lower selling and administrative expenses. The decrease in selling and administrative expenses was primarily due to lower legal fees.

### Interface

*($ in millions)*

|  | Three Months Ended August 2, 2025 (13 Weeks) | July 27, 2024 (13 Weeks) |
| --- | ---: | ---: |
| Net sales | $10.9 | $12.2 |
| Gross profit | $3.4 | $2.6 |
| As a percent of net sales | 31.2% | 21.3% |
| Income from operations | $3.0 | $1.9 |
| As a percent of net sales | 27.5% | 15.6% |

#### Net sales

Interface segment net sales decreased $1.3 million, or 10.7% to $10.9 million in the three months ended August 2, 2025, compared to $12.2 million in the three months ended July 27, 2024. The decrease was primarily due to lower sales volumes of touch panels for appliances, partially offset by higher sales volumes for transceivers for servers.

#### Gross profit

Interface segment gross profit increased $0.8 million, or 30.8%, to $3.4 million in the three months ended August 2, 2025, compared to $2.6 million in the three months ended July 27, 2024. Gross profit margins increased to 31.2% in the three months ended August 2, 2025, compared to 21.3% in the three months ended July 27, 2024. The improvement was due to product mix.

#### Income from operations

Interface segment income from operations increased $1.1 million, or 57.9%, to $3.0 million in the three months ended August 2, 2025, compared to $1.9 million in the three months ended July 27, 2024. The increase was primarily due to higher gross profit and lower selling and administrative expenses.

### Financial Condition, Liquidity and Capital Resources

Our liquidity requirements are primarily to fund our business operations, including capital expenditures and working capital requirements, as well as to fund debt service requirements, dividends and stock repurchases. Our primary sources of liquidity are cash flows from operations, existing cash balances and borrowings under our senior secured credit agreement. We believe our liquidity position will be sufficient to fund our existing operations and current commitments for at least the next twelve months. However, if economic conditions remain impacted for longer than we expect due to supply chain disruptions, inflationary pressure or other geopolitical risks, or if we are unable to maintain compliance with our debt covenants, our liquidity position could be severely impacted.

As of August 2, 2025, we had $121.1 million of cash and cash equivalents, of which $76.1 million was held in subsidiaries outside the U.S. Cash held by these subsidiaries is used to fund operational activities and can be repatriated, primarily through the payment of dividends and the repayment of intercompany loans, without creating material additional income tax expense.

### Repurchases of Common Stock

On June 13, 2024, the Board of Directors approved a new share buyback authorization, commencing on June 17, 2024, for the purchase of up to $200.0 million of our outstanding common stock through June 17, 2026 (the “2024 Buyback Authorization”). Purchases may be made on the open market, including pursuant to purchase plans designed to comply with Rule 10b5-1 of the Securities Exchange Act of 1934, or in private transactions. No shares have been purchased under the 2024 Buyback Authorization. As of August 2, 2025, the dollar value of shares that remained available to be purchased under 2024 Buyback Authorization was $200.0 million.

### Amended Credit Agreement

On October 31, 2022, we entered into a Second Amended and Restated Credit Agreement (the “Credit Agreement”) with Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and the Lenders and other parties named therein. On March 6, 2024, we entered into a First Amendment to Second Amended and Restated Credit Agreement (the “First Amendment”) and on July 9, 2024, we entered into a Second Amendment to Second Amended and Restated Credit Agreement and First Amendment to Second Amended and Restated Guaranty (the “Second Amendment”) with Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, the other Lenders party thereto and other parties thereto. On July 7, 2025, we entered into a Third Amendment to Second Amended and Restated Credit Agreement (the “Third Amendment”) with Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, the other Lenders party thereto and other parties thereto.

Among other things, the Third Amendment (i) reduced the revolving credit commitments from $500 million to $400 million, (ii) eliminated our option to increase the revolving credit commitments and/or add one or more tranches of term loans under the credit facility from time to time subject to certain limitations and conditions including approval of certain lenders, (iii) amended the consolidated interest coverage ratio covenant for the quarters ending August 2, 2025, November 1, 2025, January 31, 2026 and May 2, 2026 to relax that covenant to some extent for each of those quarters, (iv) amended the consolidated leverage ratio covenant for the quarters ending August 2, 2025, November 1, 2025, January 31, 2026, May 2, 2026 and August 1, 2026 to relax that covenant to some extent for each of those quarters, (v) amended the definition of “Consolidated EBITDA,” to include an add back for a portion of the inventory write-down taken in the fourth quarter of fiscal 2025, (vi) increased the interest rate during the period from July 7, 2025 to the date that financial statements and a compliance certificate are delivered for the fiscal quarter ending October 31, 2026 (such period, the “Third Amendment Period”), (vii) changed the commitment fee payment during the Third Amendment Period, (viii) extended, through the maturity date, the requirement to provide monthly financial statements to the lenders, (ix) restricted or decreased, during the Third Amendment Period, the amount of certain exceptions to covenants restricting liens on, investments by and indebtedness of the Company and its subsidiaries, (x) limited to $2.5 million, in any fiscal quarter during the Third Amendment Period, the general basket exception to a covenant restricting certain restricted payments (including dividends) by the Company and its subsidiaries, while allowing under that general basket exceptions up to an aggregate of $25 million of restricted payments during any other period, (xi) extended, through the maturity date, an “anti-cash hoarding” requirement contained in the Second Amendment such that that if we have cash on hand in the U.S. (subject to certain exceptions) of more than $65 million for 10 consecutive business days, we shall prepay the indebtedness under the credit facility by the amount of such excess, and (xii) eliminated, during the Third Amendment Period, the investment, restricted payment and indebtedness baskets that had allowed for unlimited investments, restricted payments and indebtedness, as applicable, so long as (among other requirements) we met certain pro forma consolidated leverage ratio tests.

As of August 2, 2025, we were not in compliance with a covenant restricting certain restricted payments (including dividends) by us and our subsidiaries contained in the Credit Agreement (as amended by the First Amendment, the Second Amendment and the Third Amendment) for the quarter ended August 2, 2025. On September 8, 2025, we entered into a Waiver Letter (the “Waiver Letter”) with Bank of America, N.A., as Administrative Agent, and the other Lenders party thereto. Among other things, the Waiver Letter (i) acknowledged that an event of default under the Credit Agreement (as amended by the First Amendment, the Second Amendment and the Third Amendment) occurred as the result of us making approximately $2.8 million of restricted payments during the quarter ended August 2, 2025, which was in excess of the $2.5 million general basket exception to a covenant restricting certain restricted payments (including dividends) by us and our subsidiaries during the quarter ended August 2, 2025, (ii) reduced, for the quarter ending November 1, 2025, the general basket exception to a covenant restricting certain restricted payments (including dividends) by us and our subsidiaries by the amount of excess restricted payments made during the quarter ended August 2, 2025 (which change reduced such basket exception from $2.5 million to approximately $2.2 million for the quarter ending November 1, 2025), and (iii) waived the acknowledged event of default.

The Credit Agreement, as amended by the First Amendment, the Second Amendment, the Third Amendment and the Waiver Letter, is referred to herein as the “Amended Credit Agreement.”

The Amended Credit Agreement provides for a secured multicurrency revolving credit facility of $400 million. The Amended Credit Agreement matures on October 31, 2027.

As of August 2, 2025, the outstanding balance under the revolving credit facility consisted of $295.8 million (€255.3 million) of euro-denominated borrowings and $30.0 million of U.S. denominated borrowings. The Amended Credit Agreement contains various representations and warranties, financial covenants (including covenants requiring us to maintain compliance with a minimum consolidated interest coverage ratio and a maximum consolidated leverage ratio, in each case as of the end of each fiscal quarter), restrictive and other covenants, and events of default. The covenants in the Amended Credit Agreement include an “anti-cash hoarding” requirement, as discussed above. As of August 2, 2025, we were in compliance with all the covenants in the Amended Credit Agreement (other than a covenant restricting certain restricted payments (including dividends) by the Company and its

subsidiaries during the quarter ended August 2, 2025, which event of default was subsequently waived as discussed above). For further information, see Note 8, “Debt” to the condensed consolidated financial statements included in this Quarterly Report.

Although we currently anticipate, based on our current projections and analyses, that we will be in compliance with the financial covenants contained in the Amended Credit Agreement, no assurance can be given that we will be and remain in compliance with such covenants in the future. Factors that could increase our risk of future non-compliance include those identified in Part I – Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended May 3, 2025, as supplemented by subsequent filings with the Securities and Exchange Commission, including under Part II – Item 1A, “Risk Factors” of this Quarterly Report.

### Cash Flows

*(in millions)*

| Operating activities: | Three Months Ended August 2, 2025 (13 Weeks) | July 27, 2024 (13 Weeks) |
| --- | ---: | ---: |
| Net loss | $(10.3) | $(18.3) |
| Non-cash items | 17.7 | 19.8 |
| Changes in operating assets and liabilities | 17.7 | 9.4 |
| Net cash provided by operating activities | 25.1 | 10.9 |
| Net cash used in investing activities | (5.8) | (13.6) |
| Net cash used in financing activities | (4.5) | (48.2) |
| Effect of foreign currency exchange rate changes on cash and cash equivalents | 2.7 | 0.7 |
| Increase (decrease) in cash and cash equivalents | 17.5 | (50.2) |
| Cash and cash equivalents at beginning of the period | 103.6 | 161.5 |
| Cash and cash equivalents at end of the period | $121.1 | $111.3 |

#### Operating activities

Net cash provided by operating activities was $25.1 million in the three months ended August 2, 2025, compared to $10.9 million in the three months ended July 27, 2024. The increase was due to a lower net loss adjusted for non-cash items and higher cash inflows from operating assets and liabilities. The $17.7 million of cash inflows for operating assets and liabilities in the three months ended August 2, 2025 was primarily due to lower accounts receivable, prepaid expenses and other assets, partially offset by lower accounts payable and other liabilities.

#### Investing activities

Net cash used in investing activities was $5.8 million in the three months ended August 2, 2025, compared to $13.6 million in the three months ended July 27, 2024. Capital expenditures were $7.1 million in the three months ended August 2, 2025, compared to $13.6 million in the three months ended July 27, 2024. In the three months ended August 2, 2025, we received proceeds of $1.3 million from the sale of property, plant and equipment.

#### Financing activities

Net cash used in financing activities was $4.5 million in the three months ended August 2, 2025, compared to $48.2 million in the three months ended July 27, 2024. We paid cash dividends of $2.8 million in the three months ended August 2, 2025, compared to $5.1 million in the three months ended July 27, 2024. Dividends paid in the three months ended August 2, 2025 and July 27, 2024, include $0.3 million and $0.2 million, respectively, of dividend equivalent payments for restricted stock units that vested. In the three months ended August 2, 2025, we had net proceeds from borrowings of $0.4 million, compared to net repayments of borrowings of $39.1 million in the three months ended July 27, 2024. In the three months ended August 2, 2025, we paid $1.6 million of debt issuance costs associated with the Third Amendment, compared to $1.8 million of debt issuance costs associated with the Second Amendment in the three months ended July 27, 2024. In the three months ended July 27, 2024, we used $1.6 million of cash for the purchase of shares under the 2021 Buyback Authorization.

### Recent Accounting Pronouncements

See Note 1, “Description of Business and Summary of Significant Accounting Policies” to the condensed consolidated financial statements included in Item 1.

### Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements as defined under SEC rules.

## Market risk

As filed, 704 characters.

We are exposed to market risks from foreign currency exchange, interest rates, and commodity prices, which could affect our operating results, financial position and cash flows. We manage a portion of these risks through use of derivative financial instruments in accordance with our policies. We do not enter into derivative financial instruments for speculative or trading purposes.

There has been no significant change in our exposure to market risk during the three months ended August 2, 2025. For a discussion of our exposure to market risk, refer to Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” contained in our Annual Report on Form 10-K for the year ended May 3, 2025.

## Controls and procedures

As filed, 1,278 characters.

#### Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report, we performed an evaluation under the supervision and with the participation of the Company’s management, including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), of our “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934). Our disclosure controls and procedures are designed to ensure that the information required to be disclosed by the Company in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s applicable rules and forms. As a result of this evaluation, our CEO and CFO concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were effective.

#### Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the three months ended August 2, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 4,286 characters.

Our business, financial condition, results of operations and cash flows are subject to various ‎risks which could cause actual results to vary from recent results or from anticipated future results. ‎Please refer to Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended May 3, 2025, for a description of certain material risks and uncertainties to which our business, financial condition and results of operations are subject. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially ‎and adversely affect our business, financial condition and/or operating results.‎

Except as updated below, there have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended May 3, 2025:

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

We manufacture and sell our products globally and rely on a global supply chain to deliver the required raw materials, components, and parts, as well as the final products to our customers. Existing free trade laws and regulations, such as the United States-Mexico-Canada Agreement (“USMCA”), 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, export licenses, tariffs or taxes on imports from countries or geographic regions where we manufacture products, such as Canada, China, Egypt, Europe and Mexico, could have a material adverse effect on our business, financial condition and operating results.

In the past several months, the U.S. administration has proposed and imposed extensive tariffs on many countries where we do business including a number of broad, product specific tariffs most notably with respect to the automotive and commercial vehicle industries. As such, there is continued uncertainty about the future relationship between the U.S. and various other countries with respect to tariffs, trade policies, government regulations, treaties and trade agreements. Depending upon the continued duration and potential expansion of these tariffs, as well as our ability to mitigate their impact, these tariffs and other regulatory actions could materially affect our business, including in the form of an increase in cost of goods sold, decreased margins, increased pricing for customers, disruptions in our supply chain, impaired ability to compete effectively, and reduced sales. If changes in trade policy cause increased prices for vehicles, consumer demand may decline, prompting a reduction in global vehicle production volumes, which is a material driver of our operations, sales and profitability.

Although the exception for USMCA-qualifying goods is expected to remain in place, the extent and permanence of this exception has not been confirmed by the current U.S. Administration. In addition to potential increases in customs duties and tariffs in the U.S. and other countries, the USMCA is subject to renewal in 2026. There can be no assurance that the USMCA will be renewed or, if renewed, any newly negotiated terms in the USMCA will not adversely affect our business.

Our product portfolio exposes us to several categories that are highly contested in the expanding international trade disputes. For example, because we provide parts to automotive OEMs, some of our finished goods are classified as auto parts and subject to additional tariffs. Our products made for commercial vehicle customers could be potentially exposed to similar tariffs. We also utilize semiconductors and copper--and to a lesser extent--steel and aluminum in our products. This means we are exposed to increased costs for inbound components and could potentially be added as derivative products for tariff purposes in the future. Should any of these tariffs expand, raw materials and finished goods that we import will face higher prices, which could lead to reduced margins or increased prices that could, in turn, cause decreased customer demand.

Filed Sep 9, 2025.
Source: SEC EDGAR, the filing index for accession 0000950170-25-113818. Last ingested by Listed: Nov 3, 2026, 22:17 ET. No prices; not investment advice.