Methode Electronics (MEI) Posts Q1 EPS of 4c; to Acquire Assets of Injection Molding and Painting Operation

September 1, 2011 6:34 AM
Methode Electronics (NYSE: MEI) reported Q1 GAAP EPS of $0.04, which may not compare with the analyst estimate of $0.10. Revenue for the quarter came in at $110.8 million versus the consensus estimate of $110.3 million.

The Company intends to acquire the assets and operations of an injection molding and painting operation to vertically integrate various paint and laser etch processes that are vital in the production of automotive center consoles. Although the vertical integration will require capital for additional equipment, the overall capital investment will be considerably less than for a similar Greenfield operation. This vertical integration is expected to reduce prime costs, improve quality and mitigate certain supply risks experienced over the past several quarters. Methode intends to close the acquisition in September and complete the integration of the facility by the end of Fiscal 2012.


Earnings Mergers and Acquisitions