Methode Electronics reported a 10% year-over-year increase in net sales for the first quarter of fiscal 2027, reaching $265.4 million. However, adjusted earnings before interest, taxes, depreciation and amortization declined 13% to $13.7 million, reflecting margin pressure despite revenue growth.
The company’s automotive segment reported flat sales at $105.7 million, while its industrial segment posted a 27% rise to $156.8 million. The interface segment, impacted by the divestiture of DataMate and exits from non-core appliance programs, saw sales fall 73% to $2.9 million. Adjusted EBITDA for the industrial segment increased 19% to $31.6 million, while the automotive segment’s operating loss narrowed slightly to $11.7 million.
Free cash flow turned negative at $10.9 million in the quarter, compared with a positive $18.0 million in the prior-year period. Cash and cash equivalents at quarter-end totaled $116.2 million, down from $139.6 million at the end of fiscal 2026. Total debt decreased by $14.5 million to $310.5 million, including $10.1 million in net repayments and a $4.5 million favorable currency impact.
Methode’s power distribution and data center businesses continued to expand. Data center sales are expected to reach approximately $130 million in fiscal 2027, a 60% increase from the prior year’s $80 million. The power distribution business is projected to grow at a compound annual rate of about 30%, rising from $116 million in fiscal 2022 to an estimated $400 million by fiscal 2027.
The company secured new business awards totaling roughly $75 million in peak annual revenue during the quarter, with an estimated lifetime value of about $400 million. Operational improvements included a 500-basis-point margin expansion in Mexico operations and over 700 basis points in Egypt for the latest quarter and fiscal year, respectively. Malta operations contributed approximately $5 million in annual run-rate restructuring savings.
Methode amended its revolving credit facility, reducing commitments from $400 million to $375 million and extending maturities to October 2028. The company maintained its full-year fiscal 2027 guidance, projecting net sales between $1.025 billion and $1.075 billion and adjusted EBITDA between $72 million and $82 million, representing margins of 7.0% to 7.6%. Capital expenditures are expected to range from $25 million to $30 million, with free cash flow anticipated to remain comparable to fiscal 2026 levels.
