- ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended April 30, 1996 COMMISSION FILE NUMBER 0-2816 METHODE ELECTRONICS, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) <TABLE> <S> <C> DELAWARE 36-2090085 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) </TABLE> <TABLE> <S> <C> 7444 WEST WILSON AVENUE CHICAGO, ILLINOIS 60656 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) </TABLE> REGISTRANT'S TELEPHONE NUMBER (INCLUDING AREA CODE): (708) 867-9600 SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: <TABLE> <CAPTION> NAME OF EACH EXCHANGE TITLE OF EACH CLASS ON WHICH REGISTERED ------------------- --------------------- <S> <C> None None </TABLE> SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: CLASS A COMMON STOCK ($.50 PAR VALUE) CLASS B COMMON STOCK ($.50 PAR VALUE) (TITLE OF CLASS) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K [_] . The aggregate market value of the Class A and Class B Common Stock, $.50 par value, held by non-affiliates of the Registrant on July 15, 1996 based upon the average of the closing bid and asked prices on that date as reported by Nasdaq was $571,975,000. Registrant had 34,101,878 shares of Class A, $.50 par value, and 1,233,247 shares of Class B, $.50 par value, outstanding as of July 15, 1996. DOCUMENTS INCORPORATED BY REFERENCE Portions of the proxy statement for the annual shareholders meeting to be held September 10, 1996, are incorporated by reference into Part III. - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------
PART I ITEM 1. BUSINESS Methode Electronics, Inc. was incorporated in 1946 as an Illinois corporation and reincorporated in Delaware in 1966. As used herein, Methode Electronics, Inc. shall be referred to as the "Registrant" or the "Company". The Registrant operates in one industry segment, which consists of the manufacture of electronic components and devices that connect, control and convey electrical energy, pulse and signal, including connectors, automotive components, interconnect devices, printed circuits, and current carrying distribution systems. Components and devices manufactured by the Registrant are used in the production of electronic equipment and other products with applications in the automotive, computer, voice and data communications equipment, industrial, military and aerospace, and consumer electronics industries. The following tabulation reflects the percentages of net sales of the major classes of products of the Registrant for the last three fiscal years: <TABLE> <CAPTION> APRIL 30, ---------------- 1994 1995 1996 ---- ---- ---- <S> <C> <C> <C> Connectors and Controls................................. 86.0% 86.0% 88.6% Printed Circuit Boards and Services..................... 6.7 5.5 4.4 Current Carrying Distribution Systems................... 7.3 8.5 7.0 </TABLE> The sales activities of the Registrant are directed by sales managers who are supported by engineering personnel who provide technical services. The Registrant's products are sold through its sales staff and through independent manufacturers' representatives with offices throughout the world. Sales are made primarily to original equipment manufacturers and also to independent distributors. Sources and Availability of Raw Materials. Principal raw materials purchased by Registrant include copper-clad laminate, ferrous and copper alloy strips, plastic molding materials, fiber optic cable, etching and plating chemicals, die castings and precious metals. All of these items are available from several suppliers, and the Registrant generally relies on more than one for each item. Patents; Licensing Agreements. The Registrant has various patents and licensing agreements, but does not consider its business to be materially dependent upon such patents and licensing agreements. Seasonality. The business of the Registrant is not seasonal. Working Capital Items. The Registrant is required to maintain adequate levels of inventory to meet scheduled delivery requirements of customers. It is not normal for the Registrant to carry significant amounts of finished goods, as the preponderance of orders received are for scheduled future deliveries. Material Customers. During the year ended April 30, 1996, shipments to Chrysler Corporation and Ford Motor Corporation each were 10% or greater of consolidated net sales and, in the aggregate, amounted to approximately 40% of consolidated net sales. Such shipments included a wide variety of the Registrant's automotive component products. Backlog. The Registrant's backlog of orders for its continuing operations was approximately $53,100,000 at May 31, 1995 and $55,200,000 at May 31, 1996. It is expected that most of the total backlog at May 31, 1996 will be shipped within the current fiscal year. Contracts Subject to Termination at the Election of the Government. Shipments as a subcontractor for various military programs constitute a significant portion of the Registrant's multi layer printed circuitry output, 2
although not material to the Registrant's business as a whole. Although existing government orders are subject to termination at the election of the Government, the Registrant historically has never experienced a significant termination and has no information to lead it to believe that there is a likelihood of such an event during fiscal year 1997. Competitive Conditions. The markets in which the Registrant operates are highly competitive and characterized by rapid changes due to technological improvements and developments. Registrant competes with a large number of other manufacturers in each of its product areas; many of these competitors have greater resources and total sales. Price, service and product performance are significant elements of competition in the sale of Registrant's products. Research and Development. Registrant maintains a Research and Development program involving a number of professional employees who devote a majority of their time to the development of new products and processes and the advancement of existing ones. Senior management of the Registrant also participates directly in the program. Expenditures for the aforementioned activities amounted to $11,120,000, $14,120,000 and $17,425,000 for the fiscal years ended April 30, 1994, 1995 and 1996, respectively. Environmental Quality. Compliance with federal, state and local provisions regulating the discharge of materials into the environment has not materially affected capital expenditures, earnings or the competitive position of the Registrant. Currently, there are no environmental-related lawsuits or material administrative proceedings pending against the Registrant. Further information as to environmental matters affecting the Registrant is presented in Note 7 to the consolidated financial statements included in Item 14(a)(1). Employees. At April 30, 1995 and 1996, Registrant had approximately 3,000 and 3,250 employees, respectively. Foreign Sales. Information about the Registrant's operations in different geographic regions is summarized in Note 9 to the consolidated financial statements included in Item 14 (a) (1). ITEM 2. PROPERTIES The Registrant has 19 manufacturing and three service facilities containing approximately 785,000 square feet of space, of which approximately 118,000 square feet are leased. Ten of the facilities are located in Illinois, four in California, one in Connecticut, one in New Jersey, one in Maryland, one in Ireland, two in Singapore and two in the United Kingdom. Approximately 90,000 square feet of space for the manufacture of connectors and controls was added in fiscal 1995 and 38,000 square feet of manufacturing space and a 20,000 square foot Research Center was added in 1996. The Registrant expects to occupy a new 40,000 square foot automotive component manufacturing facility in Suzhou, China outside Shanghai in the second half of fiscal 1997. Management believes that the Registrant's production capacity is sufficient to supply current orders and anticipated increased demands. Registrant's manufacturing facilities have been modernized as necessary in the opinion of management to keep pace with developments in the electronics industry. ITEM 3. LEGAL PROCEEDINGS As of July 15, 1996, the Registrant was not involved in any material litigation or any litigation or material administrative proceedings with governmental authorities pertaining to the discharge of materials into the environment. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS There were no matters submitted to security holders during the fourth quarter of fiscal 1996. 3
EXECUTIVE OFFICERS OF THE REGISTRANT <TABLE> <CAPTION> NAME AGE OFFICES AND POSITIONS HELD AND LENGTH OF SERVICE AS OFFICER ---- --- ----------------------------------------------------------- <S> <C> <C> William J. 73 Chairman of the Board of the Registrant since December, 1994. McGinley Prior thereto, he was President and a Director since 1946. Mr. William J. McGinley is the father of James W. McGinley. William T. 69 President of the Registrant since December, 1994. Prior there- Jensen to, he was Senior Executive Vice President since 1992. Execu- tive Vice President since 1952 and a Director since 1959. Michael G. 56 Senior Executive Vice President of the Registrant since Decem- Andre ber, 1994. Prior thereto, he was Executive Vice President-- Interconnect Products Group since January, 1984 and a Direc- tor since September, 1984. Kevin J. 55 Chief Financial Officer since 1996 and Assistant Secretary Hayes since 1995. Prior thereto, he was Vice President since 1974 and a Director since September, 1984. Treasurer 1972 to 1996. James W. 46 Secretary since 1995. Partner--Keck, Mahin & Cate (a law firm Ashley, retained as counsel to the Registrant). Jr. James W. 41 President since December, 1994 and prior thereto Executive McGinley Vice President, Optical Interconnect Products Group. Director since June 1993. Prior thereto, he was General Manager of the Company's Connector Division from November 1984 to January 1989, and was Vice President, Corporate Sales and Marketing from January 1989 to June 1993. Mr. James W. McGinley is the son of Mr. William J. McGinley. </TABLE> All executive officers serve a term of office of one year which, for the current year, expires on September 10, 1996, or until their successors are duly elected and qualified. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS The Registrant's Class A and Class B Common Stock are traded on the Nasdaq National Market System under the symbols METHA and METHB. The following is a tabulation of high and low closing sales prices for the periods indicated as reported by Nasdaq. Historical data has been restated for the three for two stock split effective October 31, 1995. <TABLE> <CAPTION> CLASS A CLASS B STOCK PRICE STOCK PRICE ----------- ----------- HIGH LOW HIGH LOW ----- ----- ----- ----- <S> <C> <C> <C> <C> Fiscal Year ended April 30, 1996 First Quarter................................... 14.83 11.00 15.00 11.67 Second Quarter.................................. 16.17 14.17 16.33 14.33 Third Quarter................................... 16.25 12.63 16.25 13.25 Fourth Quarter.................................. 16.75 13.50 16.75 13.75 Fiscal Year ended April 30, 1995 First Quarter................................... 11.67 9.83 11.67 10.67 Second Quarter.................................. 13.67 10.50 14.33 11.00 Third Quarter................................... 13.00 8.75 14.17 9.83 Fourth Quarter.................................. 11.67 8.67 12.33 11.00 </TABLE> The Registrant pays dividends quarterly and for fiscal year 1995, it paid at an annual rate of $.080 and $.067 on the Class A and Class B Stock. In fiscal 1996, quarterly dividends were paid at an annual rate of $.16 on both the Class A and Class B Common Stock. On June 21, 1996, the Board voted to increase the cash dividend on its 4
Class A and Class B Common Stock to an annual rate of $.20, and declared a dividend of $.05 per Class A share and Class B share, payable on July 31, 1996 to holders of record on July 15, 1996. The Registrant expects to continue its policy of paying regular cash dividends, although there is no assurance as to future dividends because they are dependent on future earnings, capital requirements and financial condition. As of July 15, 1996, the approximate number of record holders of the Company's Class A Stock was 1,300 and the approximate number of record holders of the Company's Class B Stock was 540. ITEM 6. SELECTED FINANCIAL DATA <TABLE> <CAPTION> 1996 1995 1994 1993 1992 -------- -------- -------- -------- -------- (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) <S> <C> <C> <C> <C> <C> Income Statement Data Net sales.................. $307,538 $270,748 $213,298 $172,038 $148,085 Income from continuing operations before income taxes..................... 50,572 40,846 33,476 22,548 13,614 Income Taxes............... 18,600 14,725 12,500 7,800 4,085 Income from continuing operations................ 32,373 26,121 20,976 14,748 9,529 Discontinued operations (loss).................... -- -- -- 690 (4,898) Net income................. 32,373 26,121 20,976 15,438 4,632 Per Common Share: Income from continuing operations.............. $ .93 $ .75 $ .61 $ .43 $ .29 Net income............... .93 .75 .61 .45 .14 Dividends, Class A....... .16 .08 .03 .03 .03 Dividends, Class B....... .16 .07 .03 .03 .02 Book value............... 4.69 3.87 3.11 2.47 1.98 Long-term debt............. -- -- 107 204 301 Funded debt to total capital................... 1:57 1:28 1:21 1:35 1:59 Retained earnings.......... $131,073 $104,323 $ 80,963 $ 61,165 $ 46,662 Fixed assets (net)......... 66,786 56,167 48,454 44,419 35,265 Total assets............... 223,279 191,476 160,630 129,029 106,986 From continuing operations: Return on equity......... 22% 22% 22% 19% 15% Pretax income as % of sales................... 16.6% 15.1% 15.7% 13.1% 9.2% Income as % of sales..... 10.5% 9.6% 9.8% 8.6% 6.4% </TABLE> ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Net sales increased 14% in fiscal 1996 following increases of 27% and 24% in 1995 and 1994, respectively, led by gains in sales of connectors and automotive components of 17% in 1996, 22% in 1995 and 27% in 1994. Sales of electronic and optical connectors and automotive components represented 89% of sales in fiscal 1996 and 86% in 1995 and 1994. Connector sales during the three year period ended April 30, 1996 benefitted from the acquisition of a PCMCIA connector and package producer in the second quarter of fiscal 1996; acquisitions of two molded cable operations in the second quarter of fiscal 1995; and purchase of a fiber optic connector business in the second quarter of fiscal 1994. Methode connectors and components are used broadly in voice and data communications networks, automobiles, computers, industrial automation equipment and consumer electronics. Sales of other connectivity devices (chiefly buss devices and printed circuit boards) and services declined 8% in fiscal 1996 versus gains of 72% and 1% in fiscal 1995 and fiscal 1994. This area experienced difficult market conditions as a result of less than anticipated sales of mainframe computers (for which Methode 5
supplies power and signal distribution busswork) and reduced defense procurement (for which Methode provides sophisticated multilayer circuit boards). Management is taking action to broaden the markets for these products. Other income consisted primarily of earnings from our automotive joint venture, interest income from short-term investments, and royalties. Cost of goods sold as a percentage of sales for 1996, 1995 and 1994 were 72.1%, 72.8% and 71.9%. Selling and administrative expenses as a percentage of sales were 12.9%, 13.3% and 13.4% in 1996, 1995 and 1994, respectively. Effective income tax rates were 36.5%, 36.1% and 37.3% for fiscal 1996, 1995 and 1994, respectively. The effective income tax rates exceed the statutory federal rate of 35% due to the effect of state income taxes offset, in part, by lower tax rates on foreign operations. FINANCIAL CONDITION, LIQUIDITY, AND CAPITAL RESOURCES Net cash provided by operations was $43,429,000, $37,320,000, and $16,896,000 in 1996, 1995 and 1994, primarily as a result of higher net income. Average collection period increased slightly to 52 days in 1996 from 51 days in 1995 and 53 days in 1994 balanced by a slight increase in inventory turnover to 6.8 turns in 1996 from 6.5 turns in 1995 and 6.7 turns in 1994. Depreciation expense was $12,117,000, $10,608,000 and $8,988,000 in fiscal 1996, 1995 and 1994, respectively, reflecting higher levels of fixed assets in each year. Capital expenditures were $22,124,000, $17,422,000 and $12,697,000 in fiscal 1996, 1995 and 1994. Principal capital investments involved expansions at our Automotive Electronic Controls, Optoelectronic Products and Fiber Optic Products facilities in 1996 and a new test lab in 1995. Capital expenditures in 1996, 1995 and 1994 were funded from operating cash flows. It is anticipated that fixed capital acquisitions for 1997 will also be funded from operating cash flows. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA See Item 14 for an Index to Financial Statements and Financial Statement Schedules. Such Financial Statements and Schedules are incorporated herein by reference. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES None. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Information regarding the directors of the Registrant is included under the caption "Election of Directors" in the Registrant's proxy statement to be dated on or about August 9, 1996, and is incorporated herein by reference. Information regarding the executive officers of the Registrant is included under a separate caption in Part I hereof, and is incorporated herein by reference, in accordance with General Instruction G(3) to Form 10-K and Instruction 3 to Item 401(b) of Regulation S-K. ITEM 11. EXECUTIVE COMPENSATION Information regarding the above is included under the caption "Executive Compensation" in the Registrant's proxy statement to be dated on or about August 9, 1996 and is incorporated herein by reference. 6
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Information regarding the above is included under the caption "Security Ownership" in the Registrant's proxy statement to be dated on or about August 9, 1996 and is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Information regarding the above is included under the caption "Election of Directors" in the Registrant's proxy statement to be dated on or about August 9, 1996 and is incorporated herein by reference. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) (1) (2) LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES The response to this portion of Item 14 is included in this report under the caption "List of Financial Statements and Financial Statement Schedules" which is incorporated herein by reference. (a) (3) LIST OF EXHIBITS REQUIRED BY ITEM 601 OF REGULATION S-K See "Exhibit Index" immediately following the financial statement schedules. (b) REPORTS ON FORM 8-K No reports on Form 8-K have been filed during the last quarter of the period covered by this report. (c) EXHIBITS REQUIRED BY ITEM 601 OF REGULATION S-K See "Exhibit Index" immediately following the financial statement schedules. (d) FINANCIAL STATEMENT SCHEDULES The response to this portion of Item 14 is included in this report under the caption "List of Financial Statements and Financial Statement Schedules" which is incorporated herein by reference. Schedules and exhibits other than those listed are omitted for the reasons that they are not required, are not applicable or that equivalent information has been included in the financial statements, and notes thereto, or elsewhere herein. 7
SIGNATURES PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED. Methode Electronics, Inc. (Registrant) By: _________________________________ Kevin J. Hayes Chief Financial Officer & Director Dated: July 26, 1996 PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED. <TABLE> <CAPTION> SIGNATURE TITLE DATE --------- ----- ---- <S> <C> <C> Chairman of the Board & July 26, 1996 ____________________________________ Director (Principal William J. McGinley Executive Officer) President & Director July 26, 1996 ____________________________________ William T. Jensen Senior Executive Vice July 26, 1996 ____________________________________ President & Director Michael G. Andre Chief Financial Officer & July 26, 1996 ____________________________________ Director Kevin J. Hayes President, Optical July 26, 1996 ____________________________________ Interconnect Products, & James W. McGinley Director Secretary & Director July 26, 1996 ____________________________________ James W. Ashley Director July 26, 1996 ____________________________________ William C. Croft Director July 26, 1996 ____________________________________ Raymond J. Roberts Director July 26, 1996 ____________________________________ George C. Wright </TABLE> 8
METHODE ELECTRONICS, INC. AND SUBSIDIARIES FORM 10-K ITEM 14(A)(1) AND (2) LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES The following consolidated financial statements of Methode Electronics, Inc. and subsidiaries are included in Item 8: Consolidated Balance Sheets--April 30, 1996 and 1995 Consolidated Statements of Income--Years Ended April 30, 1996, 1995 and 1994 Consolidated Statements of Shareholders' Equity--Years Ended April 30, 1996, 1995 and 1994 Consolidated Statements of Cash Flows--Years Ended April 30, 1996, 1995 and 1994 Notes to Consolidated Financial Statements The schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inappropriate and, therefore, have been omitted. 9
REPORT OF INDEPENDENT AUDITORS The Board of Directors and Shareholders Methode Electronics, Inc. We have audited the accompanying consolidated balance sheets of Methode Electronics, Inc. and subsidiaries as of April 30, 1996 and 1995, and the related consolidated statements of income, shareholders' equity, and cash flows for each of the three years in the period ended April 30, 1996. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Methode Electronics, Inc. and subsidiaries at April 30, 1996 and 1995, and the consolidated results of their operations and their cash flows for each of the three years in the period ended April 30, 1996, in conformity with generally accepted accounting principles. Ernst & Young LLP Chicago, Illinois June 18, 1996 10
METHODE ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS <TABLE> <CAPTION> APRIL 30 -------------------------- 1996 1995 ------------ ------------ <S> <C> <C> ASSETS Current assets: Cash and cash equivalents......................... $ 50,185,934 $ 40,763,656 Accounts receivable, less allowance (1996--$1,285,000; 1995--$1,295,000)............. 48,326,214 39,467,500 Inventories: Finished products............................... 5,199,125 5,213,948 Work in process................................. 15,330,639 16,863,248 Materials....................................... 11,557,591 10,845,224 ------------ ------------ 32,087,355 32,922,420 Current deferred income taxes..................... 3,029,000 3,601,000 Prepaid expenses.................................. 3,382,073 2,939,338 ------------ ------------ Total current assets.......................... 137,010,576 119,693,914 OTHER ASSETS Intangible benefit plan asset (Note 5).............. 3,601,793 4,269,525 Cash surrender value of life insurance.............. 5,939,690 5,019,519 Other............................................... 9,941,495 6,346,333 ------------ ------------ 19,482,978 15,635,377 PROPERTY, PLANT AND EQUIPMENT Land................................................ 1,684,985 1,184,310 Buildings and building improvements................. 32,757,588 28,222,215 Machinery and equipment............................. 118,065,196 103,334,376 ------------ ------------ 152,507,769 132,740,901 Less allowances for depreciation.................... 85,721,950 76,574,297 ------------ ------------ 66,785,819 56,166,604 ------------ ------------ $223,279,373 $191,495,895 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable.................................. $ 23,448,875 $ 19,997,465 Salaries, wages and payroll taxes................. 7,355,329 5,977,969 Other accrued expenses............................ 9,367,295 10,410,379 Federal and state income taxes.................... 2,845,202 2,219,351 Notes payable..................................... 2,939,380 5,067,450 ------------ ------------ Total current liabilities..................... 45,956,081 43,672,614 Accumulated benefit plan obligation (Note 5)........ 2,999,422 3,629,330 Other liabilities................................... 1,918,391 2,616,815 Deferred compensation............................... 7,301,175 6,654,879 SHAREHOLDERS' EQUITY (NOTE 3) Common Stock, Class A............................... 17,036,666 11,025,006 Common Stock, Class B............................... 624,450 640,483 Stock Awards........................................ (969,745) (988,015) Additional paid-in capital.......................... 15,249,444 17,106,383 Retained earnings................................... 131,073,343 104,322,709 Foreign currency translation adjustment............. 2,134,352 2,859,897 ------------ ------------ 165,148,510 134,966,463 Less cost of shares in treasury..................... 44,206 44,206 ------------ ------------ 165,104,304 134,922,257 ------------ ------------ $223,279,373 $191,495,895 ============ ============ </TABLE> See notes to consolidated financial statements. 11
METHODE ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME <TABLE> <CAPTION> YEAR ENDED APRIL 30, -------------------------------------- 1996 1995 1994 ------------ ------------ ------------ <S> <C> <C> <C> Income: Net sales (Note 9).................... $307,538,466 $270,747,848 $213,297,846 Other................................. 4,945,265 3,732,237 2,461,106 ------------ ------------ ------------ 312,483,731 274,480,085 215,758,952 Costs and expenses: Cost of products sold................. 221,605,285 197,215,648 153,370,316 Selling and administrative expenses... 39,571,740 36,056,404 28,513,994 Interest expense...................... 334,092 361,644 398,215 ------------ ------------ ------------ 261,511,117 233,633,696 182,282,525 ------------ ------------ ------------ Income before income taxes.............. 50,972,614 40,846,389 33,476,427 Income taxes (Note 6)................... 18,600,000 14,725,000 12,500,000 ------------ ------------ ------------ Net income.......................... $ 32,372,614 $ 26,121,389 $ 20,976,427 ============ ============ ============ Amounts per Common Share (Note 3): Net income............................ $.93 $.75 $.61 Cash dividends: Class A............................. $.16 $.08 $.03 Class B............................. $.16 $.07 $.03 Weighted average number of Common Shares outstanding................... 34,967,000 34,671,000 34,506,000 </TABLE> See notes to consolidated financial statements. 12
METHODE ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY YEARS ENDED APRIL 30, 1996, 1995 AND 1994 <TABLE> <CAPTION> FOREIGN COMMON COMMON ADDITIONAL CURRENCY STOCK, STOCK, STOCK PAID-IN RETAINED TRANSLATION TREASURY CLASS A CLASS B AWARDS CAPITAL EARNINGS ADJUSTMENT STOCK ----------- -------- ----------- ----------- ------------ ----------- -------- <S> <C> <C> <C> <C> <C> <C> <C> Balance at May 1, 1993.. $10,859,160 $646,857 $ (500,287) $11,757,411 $ 61,165,121 $ 864,013 $(44,206) Stock Award grant of 160,328 shares of Common Stock, Class A.. 53,443 -- (1,229,178) 1,175,735 -- -- -- Earned portion of Stock Awards................. -- -- 1,009,401 -- -- -- -- Tax benefit from appreciation of Stock Awards................. -- -- -- 788,000 -- -- -- Issuance of 153,744 shares of Common Stock, Class A (Note 2)....... 51,247 -- -- 1,073,984 -- -- -- Conversion of 8,024 shares of Common Stock, Class B, to 8,024 shares of Common Stock, Class A................ 4,011 (4,011) -- -- -- -- -- Foreign currency translation adjustment. -- -- -- -- -- 408,067 -- Net income for the year. -- -- -- -- 20,976,427 -- -- Cash dividends on Common Stock.................. -- -- -- -- (1,178,490) -- -- ----------- -------- ----------- ----------- ------------ ---------- -------- Balance at April 30, 1994................... 10,967,861 642,846 (720,064) 14,795,130 80,963,058 1,272,080 (44,206) Stock Award grant of 164,348 shares of Common Stock, Class A.. 54,782 -- (1,767,035) 1,712,253 -- -- -- Earned portion of Stock Awards................. -- 1,499,084 -- -- -- -- Tax benefit from appreciation of Stock Awards................. -- -- -- 599,000 -- -- -- Conversion of 4,725 shares of Common Stock, Class B, to 4,725 shares of Common Stock, Class A................ 2,363 (2,363) -- -- -- -- -- Foreign currency translation adjustment. -- -- -- -- -- 1,587,817 -- Net income for the year. -- -- -- -- 26,121,389 -- -- Cash dividends on Common Stock.................. -- -- -- -- (2,761,738) -- -- ----------- -------- ----------- ----------- ------------ ---------- -------- Balance at April 30, 1995................... 11,025,006 640,483 (988,015) 17,106,383 104,322,709 2,859,897 (44,206) Stock Award grant of 169,062 shares of Common Stock, Class A.. 56,354 -- (1,910,688) 1,854,334 -- -- -- Earned portion of Stock Awards................. -- -- 1,928,958 -- -- -- -- Tax benefit from appreciation of Stock Awards................. -- -- -- 68,000 -- -- -- Issuance of 165,708 shares of Common Stock, Class A (Note 2)....... 55,236 -- -- 2,104,764 -- -- -- Three-for-two stock split paid in Common Stock, Class A......... 5,884,037 -- -- (5,884,037) -- -- -- Conversion of 32,066 shares of Common Stock, Class B, to 32,066 shares of Common Stock, Class A................ 16,033 (16,033) -- -- -- -- -- Foreign currency translation adjustment. -- -- -- -- -- (725,545 ) -- Net income for the year. -- -- -- -- 32,372,614 -- -- Cash dividends on Common Stock.................. -- -- -- -- (5,621,980) -- -- ----------- -------- ----------- ----------- ------------ ---------- -------- Balance at April 30, 1996................... $17,036,666 $624,450 $(969,745) $15,249,444 $131,073,343 $2,134,352 $(44,206) =========== ======== =========== =========== ============ ========== ======== </TABLE> See notes to consolidated financial statements. 13
METHODE ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS <TABLE> <CAPTION> YEARS ENDED APRIL 30, ---------------------------------------- 1996 1995 1994 ------------ ------------ ------------ <S> <C> <C> <C> OPERATING ACTIVITIES Net Income.......................... $ 32,372,614 $ 26,121,389 $ 20,976,427 Adjustments to reconcile net income to net cash provided by operating activities: Provision for depreciation and amortization..................... 12,117,010 10,608,121 8,988,054 Provision for losses on accounts receivable....................... 35,000 157,000 155,000 Provision for deferred compensation and supplemental executive benefit plan........... 684,120 735,974 803,978 Provision for deferred income taxes............................ 792,000 150,000 250,000 Amortization of Stock Awards...... 1,928,958 1,499,084 1,009,401 Changes in operating assets and liabilities: Accounts receivable............. (8,312,521) (2,640,227) (10,247,415) Inventories..................... 1,061,181 (3,659,668) (8,511,944) Current deferred income taxes and prepaid expenses........... (548,935) (355,103) (936,757) Accounts payable and accrued expenses....................... 3,299,795 4,703,232 4,409,463 ------------ ------------ ------------ NET CASH PROVIDED BY OPERATING ACTIVITIES......................... 43,429,222 37,319,802 16,896,207 INVESTING ACTIVITIES Purchases of property, plant, and equipment.......................... (22,123,827) (17,421,612) (12,696,706) Purchase of subsidiaries (Note 2)... -- (2,593,063) -- Purchases of life insurance policies........................... (920,171) (493,631) (598,672) Other............................... (2,692,727) 287,899 (209,518) ------------ ------------ ------------ NET CASH USED IN INVESTING ACTIVITIES......................... (25,736,725) (20,220,407) (13,504,896) FINANCING ACTIVITIES Borrowings (repayments) on lines of credit and long-term borrowings.... (2,648,239) (359,963) 2,671,421 Dividends........................... (5,621,980) (2,761,738) (1,178,490) ------------ ------------ ------------ NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES............... (8,270,219) (3,121,701) 1,492,931 ------------ ------------ ------------ Increase in cash and cash equivalents........................ 9,422,278 13,977,694 4,884,242 Cash and cash equivalents at beginning of year.................. 40,763,656 26,785,962 21,901,720 ------------ ------------ ------------ CASH AND CASH EQUIVALENTS AT END OF YEAR............................... $ 50,185,934 $ 40,763,656 $ 26,785,962 ============ ============ ============ </TABLE> See notes to consolidated financial statements. 14
METHODE ELECTRONICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS APRIL 30, 1996 1. SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements include the accounts and operations of the Company and its subsidiaries, all of which are wholly owned. Cash Equivalents All highly liquid investments with a maturity of three months or less when purchased are carried at their approximate fair value and classified in the balance sheet as cash equivalents. Inventories Inventories are stated at the lower of cost (first-in, first-out method) or market. Property, Plant and Equipment Properties are stated on the basis of cost. The Company amortizes such costs by annual charges to income, computed on the straight-line method for financial reporting purposes and on accelerated methods for income tax purposes. Long-Lived Assets In March 1995, the FASB issued Statement No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of, which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. Statement 121 also addresses the accounting for long-lived assets that are expected to be disposed of. The Company will adopt Statement 121 in the first quarter of 1997 and, based on current circumstances, does not believe the effect of adoption will be material. Research and Development Costs Costs associated with the development of new products are charged to expense when incurred. Research and development costs for the years ended April 30, 1996, 1995 and 1994 amounted to $17,425,000, $14,120,000 and $11,120,000, respectively. Earnings Per Share Net income per Common Share is based on the weighted average number of Common Shares outstanding. The dilutive effect on net income per Common Share assuming the vesting of unearned Stock Awards is not significant. Fair Value of Financial Instruments The carrying amounts of the Company's borrowings under its short-term revolving credit agreements approximate their fair value. The weighted average interest rates on such borrowings for the years ended April 30, 1996, 1995 and 1994 were 5.18%, 5.28% and 4.51%, respectively. 15
METHODE ELECTRONICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 2. ACQUISITIONS On July 31, 1995, the Company issued 165,708 shares of Common Stock, Class A to acquire a San Jose, California manufacturer of sonic welded packages for the personal computer card industry. On September 9, 1994, the Company purchased for cash, a molded cable assembly business with operations located in North Haven, Connecticut, and Limerick, Ireland. On April 30, 1993, the Company issued 179,535 shares of Common Stock, Class A, as an advance on the purchase of Mikon, Ltd., a manufacturer of fiber-optic cable assemblies located in England. On June 28, 1993, 153,744 additional shares of Common Stock, Class A, were issued upon completion of this acquisition. All three acquisitions were accounted for as purchases and, accordingly, the financial statements reflect their results of operations since their respective dates of acquisition. Had these acquisitions been made as of the beginning of fiscal 1994, sales and operating results would not be materially different than reported. 3. SHAREHOLDERS' EQUITY Preferred Stock The Company has 50,000 authorized shares of Series A, 4% cumulative convertible Preferred Stock, par value $100 per share, of which none were outstanding at April 30, 1996. Common Stock Common Stock, Class A, is entitled to dividends at least equivalent to those paid on the shares of Common Stock, Class B. The Common Stock, Class A, has more limited voting rights than the Common Stock, Class B. Generally the holders of Common Stock, Class A, are entitled to elect 25% of the Company's Board of Directors and are entitled to one-tenth of one vote per share respecting other matters. Holders of Common Stock, Class B, are entitled to one vote per share. Each share of Common Stock, Class B, is convertible into one share of Common Stock, Class A, at the option of the holder. At April 30, 1996, 2,098,096 shares of Common Stock, Class A, are reserved for future issuance in connection with the conversion of shares of Common Stock, Class B, and the Company's Incentive Stock Award Plans. In October, 1995, the Company's Board of Directors declared a three for two stock split, paid on October 31, 1995, whereby one additional share of Class A Common Stock was issued for each two shares of Class A and Class B Common Stock outstanding. All share and per share data have been restated to reflect this stock split. Common Stock, par value $.50 per share, authorized, issued and in treasury, was as follows: <TABLE> <CAPTION> APRIL 30, 1996 APRIL 30, 1995 COMMON STOCK COMMON STOCK -------------------- -------------------- CLASS A CLASS B CLASS A CLASS B ---------- --------- ---------- --------- <S> <C> <C> <C> <C> Authorized...................... 50,000,000 5,000,000 50,000,000 5,000,000 Issued.......................... 34,073,331 1,248,900 33,715,501 1,280,966 In treasury..................... 134,200 12,200 134,200 12,200 </TABLE> 16
METHODE ELECTRONICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) Stock Awards The Company has an Incentive Stock Award Plan (Incentive Plan) which permits the issuance of up to 3,000,000 shares of Common Stock, Class A, to certain officers and key employees of the Company, of which 2,243,013 shares have been awarded through April 30, 1996. Pursuant to the terms of the Incentive Plan, the granted stock does not vest until two years after the award date. If, for any reason other than retirement, disability or death an employee terminates his service before the two-year period, the stock will not vest and will be made available for future grants. The Company also has an Incentive Stock Award Plan for Non-employee Directors which permits the issuance of up to 120,000 shares of Common Stock, Class A, to non-employee directors, of which 66,000 shares have been awarded at April 30, 1996. Shares awarded pursuant to this plan have no vesting restrictions. 4. EMPLOYEE STOCK OWNERSHIP PLAN The Company has an Employee Stock Ownership Plan for the benefit of full-time employees who have completed one year of service. The purpose of the Plan is to assist employees to accumulate capital ownership in the Company and through that ownership to promote in them a strong interest in the successful operation of the Company. The Company made contributions of $1,200,000 to the Plan during both fiscal 1996 and 1995 and $1,100,000 during fiscal 1994. 5. SUPPLEMENTAL EXECUTIVE BENEFIT PLAN In fiscal 1992, the Company adopted an unfunded defined benefit plan covering certain key executives. Benefits under the plan are in recognition of significant contributions to the success of the Company made by the executives during their many years of service with the Company. Annual payments of $900,000 pursuant to the plan are being made through fiscal year 2001. The net periodic cost recognized as expense for this plan was as follows: <TABLE> <CAPTION> PRIOR SERVICE COSTS INTEREST TOTAL ------------------- -------- ---------- <S> <C> <C> <C> 1996.............................. $667,732 $270,093 $ 937,825 1995.............................. 667,732 310,566 978,298 1994.............................. 667,732 348,426 1,016,158 </TABLE> The weighted-average assumed discount rate used to measure the projected benefit obligation in all years was 6 2/3%. 6. INCOME TAXES Effective May 1, 1993, the Company changed its method of accounting for income taxes as required by Statement of Financial Accounting Standards "SFAS" No. 109, "Accounting for Income Taxes." As permitted by SFAS No. 109, the Company has elected not to restate the consolidated financial statements of any prior periods to apply the provisions of SFAS No. 109. The cumulative effect on prior years of this change in accounting for income taxes as of May 1, 1993 and the effect of this change on the provision for income taxes for the year ended April 30, 1994 were not material. Under SFAS No. 109, the liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. 17
METHODE ELECTRONICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) Significant components of the Company's deferred tax assets and liabilities as of April 30 were as follows: <TABLE> <CAPTION> 1996 1995 ---------- ---------- <S> <C> <C> Deferred tax liabilities: Accelerated tax depreciation..................... $4,362,000 $4,208,000 Other liabilities................................ 134,000 61,000 ---------- ---------- Total deferred tax liabilities................. 4,496,000 4,269,000 Deferred tax assets: Deferred compensation and Stock Awards........... 3,878,000 3,503,000 Inventory valuation differences.................. 1,012,000 1,608,000 Environmental reserves........................... 1,020,000 1,403,000 Other accruals................................... 1,596,000 1,641,000 Net operating loss carryforwards................. 165,000 165,000 ---------- ---------- 7,671,000 8,320,000 Less valuation allowance........................... 165,000 165,000 ---------- ---------- Total deferred tax assets...................... 7,506,000 8,155,000 ---------- ---------- Net deferred tax assets........................ $3,010,000 $3,886,000 ========== ========== Net current deferred tax assets.................... $3,029,000 $3,601,000 Net noncurrent deferred tax assets (liabilities)... (19,000) 285,000 ---------- ---------- $3,010,000 $3,886,000 ========== ========== </TABLE> Federal and state income taxes on income consisted of the following: <TABLE> <CAPTION> 1996 1995 1994 ----------- ----------- ----------- <S> <C> <C> <C> Current: Federal............................. $14,115,000 $11,726,000 $ 9,994,000 Foreign............................. 696,000 324,000 161,000 State............................... 2,997,000 2,525,000 2,095,000 ----------- ----------- ----------- 17,808,000 14,575,000 12,250,000 Deferred.............................. 792,000 150,000 250,000 ----------- ----------- ----------- $18,600,000 $14,725,000 $12,500,000 =========== =========== =========== </TABLE> A reconciliation of the consolidated provisions for income taxes to amounts determined by applying the prevailing statutory federal income tax rate of 35% to pretax earnings is as follows: <TABLE> <CAPTION> 1996 1995 1994 ----------- ----------- ----------- <S> <C> <C> <C> Income tax at statutory rate...... $17,841,000 $14,296,000 $11,717,000 Effect of: State income taxes.............. 2,026,000 1,641,000 1,362,000 Foreign operations with lower statutory rates................ (736,000) (865,000) (444,000) Other--net...................... (531,000) (347,000) (135,000) ----------- ----------- ----------- Income tax provision.............. $18,600,000 $14,725,000 $12,500,000 =========== =========== =========== </TABLE> 18
METHODE ELECTRONICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) The Company paid income taxes of approximately $16,840,000 in 1996, $13,980,000 in 1995 and $9,885,000 in 1994. No provision has been made for income taxes of approximately $5,645,000 at April 30, 1996 which would be payable should undistributed net income of $14,478,000 of foreign operations be distributed as dividends, as the Company plans to continue these foreign operations and does not contemplate such distributions in the foreseeable future. 7. ENVIRONMENTAL MATTERS The Company is involved in environmental investigation and/or remediation at certain of its present plant sites. The Company is not yet able to determine when such remediation activity will be complete. At April 30, 1996 and 1995, the Company had accruals, primarily based upon independent engineering studies, for environmental matters of approximately $3,050,000 and $4,000,000, respectively. The Company believes the provisions it has made for environmental matters are adequate to satisfy its liabilities relating to such matters. In 1996, the Company spent $931,000 on remediation cleanups and related studies compared with $1,615,000 in 1995 and $502,000 in 1994. In 1996, the costs associated with environmental matters as they relate to day-to-day activities were not material. 8. PENDING LITIGATION Certain litigation arising in the normal course of business is pending against the Company. The Company is of the opinion that the resolution of such litigation will not have a significant effect on the consolidated financial statements of the Company. 9. DESCRIPTION OF BUSINESS The Company operates in one industry segment, which consists of the manufacture of electronic components that connect, convey and control electrical energy, pulse and signal, including connectors, interconnect devices, controls, printed circuits and current-carrying distribution systems. The Company manufactures products with applications in the automotive, computer, voice and data communications, industrial, military and aerospace, and consumer electronics industries. Sales to two automotive customers approximated 40%, 42% and 45% of net sales from continuing operations in the years ended April 30, 1996, 1995 and 1994, respectively. At April 30, 1996 and 1995, accounts receivable from customers in the automotive industry were approximately $27,831,000 and $22,147,000, respectively. Receivables are generally due within 30 days. Credit losses relating to all customers consistently have been within management's expectation. 19
METHODE ELECTRONICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) Information about the Company's operations in different geographic regions is as follows: <TABLE> <CAPTION> 1996 1995 1994 ------------ ------------ ------------ <S> <C> <C> <C> Net sales: Domestic........................ $252,624,190 $226,024,411 $185,898,114 Far East........................ 24,630,167 18,931,172 17,981,519 Europe.......................... 30,284,109 25,792,265 9,418,213 ------------ ------------ ------------ $307,538,466 $270,747,848 $213,297,846 ============ ============ ============ Operating profit: Domestic........................ $ 45,551,070 $ 37,237,411 $ 31,254,421 Far East........................ 1,898,117 55,404 1,756,373 Europe.......................... 1,504,735 2,421,373 56,857 Income and expenses not allocated to areas............. 2,018,692 1,132,201 408,776 ------------ ------------ ------------ $ 50,972,614 $ 40,846,389 $ 33,476,427 ============ ============ ============ Assets: Domestic........................ $179,178,383 $155,850,737 $134,838,931 Far East........................ 29,415,698 23,434,566 21,262,994 Europe.......................... 14,685,292 12,210,592 4,528,439 ------------ ------------ ------------ $223,279,373 $191,495,895 $160,630,364 ============ ============ ============ </TABLE> 10. SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) The following is a summary of unaudited quarterly results of operations for the two years ended April 30, 1996. <TABLE> <CAPTION> FISCAL YEAR 1996 QUARTER ENDED ----------------------------------------------- JULY 31 OCTOBER 31 JANUARY 31 APRIL 30 ----------- ----------- ----------- ----------- <S> <C> <C> <C> <C> Net sales................ $68,215,814 $78,638,261 $75,731,809 $84,952,582 Gross profit............. 18,625,040 21,352,888 20,687,894 25,267,359 Net income............... 6,703,446 7,585,187 7,554,626 10,529,355 Net income per Common Share................... .19 .22 .22 .30 <CAPTION> FISCAL YEAR 1995 QUARTER ENDED ----------------------------------------------- JULY 31 OCTOBER 31 JANUARY 31 APRIL 30 ----------- ----------- ----------- ----------- <S> <C> <C> <C> <C> Net sales................ $57,763,484 $66,783,591 $67,386,826 $78,813,947 Gross profit............. 16,782,481 17,788,071 17,877,752 21,083,896 Net income............... 5,828,945 5,990,362 5,964,812 8,337,270 Net income per Common Share................... .17 .17 .17 .24 </TABLE> 20
INDEX TO EXHIBITS <TABLE> <CAPTION> SEQUENTIAL EXHIBIT PAGE NUMBER DESCRIPTION NUMBER ------- ----------- ---------- <C> <S> <C> 3.1 Certificate of Incorporation of Registrant, as amended and currently in effect(1) 3.2 By-Laws of Registrant, as amended and currently in effect(1) 4.1 Article Fourth of Certificate of Incorporation of Registrant, as amended and currently in effect (Included in Exhibit 3.1) 10.1 Methode Electronics, Inc. Employee Stock Ownership Plan dated February 24, 1977(2)* 10.2 Methode Electronics, Inc. Employee Stock Ownership Plan and Trust Amendment No. 1(2)* 10.3 Methode Electronics, Inc. Employee Stock Ownership Trust(2)* 10.4 Methode Electronics, Inc. Employee Stock Ownership Trust--Amendment No. 1(2)* 10.5 Methode Electronics, Inc. Incentive Stock Award Plan(3)* 10.6 Methode Electronics, Inc. Supplemental Executive Benefit Plan(4)* 10.7 Methode Electronics, Inc. Managerial Bonus and Matching Bonus Plan (also referred to as the Longevity Contingent Bonus Program)(4)* 10.8 Methode Electronics, Inc. Capital Accumulation Plan(4)* 10.9 Incentive Stock Award Plan for Non-Employee Directors(5)* 10.10 Methode Electronics, Inc. 401(k) Savings Plan(5)* 10.11 Methode Electronics, Inc. 401(k) Savings Trust(5)* 10.12 Methode Electronics, Inc. Electronic Controls Division Cash and Class A Common Stock Bonus Plan(6)* 11 Computation of Earnings per Common Share 22 21 Subsidiaries of the Registrant 23 23.1 Consent of Ernst & Young LLP 24 27 Financial Data Schedules 25 </TABLE> - -------- (1) Previously filed with Registrant's Form S-3 Registration Statement No. 33- 61940 filed April 30, 1993 and incorporated herein by reference. (2) Previously filed with Registrant's S-8 Registration Statement No. 2-60613 and incorporated herein by reference. (3) Previously filed with Registrant's Registration Statement No. 2-92902 filed August 23, 1984 and incorporated herein by reference. (4) Previously filed with Registrant's Form 10-Q for three months ended January 31, 1994 and incorporated herein by reference. (5) Previously filed with Registrant's Form 10-K for the year ended April 30, 1994 and incorporated herein by reference. (6) Previously filed with Registrant's S-8 Registration Statement No. 33-88036 and incorporated herein by reference. *Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Annual Report on Form 10-K pursuant to Item 14(c) of Form 10-K. 21