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Methode Electronics Inc. (NYSE:MEI)

F1Q09 Earnings Call

September 11, 2008 11:00 am ET

Executives

Donald Duda - President, Chief Executive Officer, Director

Douglas Koman - Chief Financial Officer, Vice President of Corporate Finance

Ronald Tsoumas - Treasurer, Controller

Joey Iske - Director of Investor Relations

Analyst

Analyst for David Leiker - Robert W. Baird

Jeremy Hellman - Singular Research

Bryan Crawford - Parameter Capital Management

Operator

Welcome to the Methode Electronics Inc. first quarter 2009 earnings conference call. (Operator Instructions)

This conference call contains certain forward-looking statements which reflect managements expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements are subject to the safe harbor protection provided under the securities laws. Methode undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in Methode’s expectations on a quarterly basis or otherwise.

The forward-looking statements in this press release involve a number of risks and uncertainties. The factors that could cause actual results to different materially from our expectations or detailed in Methode’s funds with the Securities and Exchange Commission besides our annual and quarterly reports.

Such factors may include without limitation the following: one, dependence on a small member of large consumers within the automotive industry; two, raising oil prices could affect our automotive consumer’s future results; three, the seasonal and clinical nature of some of our business; four, dependence on the automotive industry; five, dependence on the appliance, computer and communication industry; six, intense pricing pressures in the automotive industry; seven, increase in raw-material prices and eight customary risks related to conducting global operations.

It is now my pleasure to introduce your host Don Duda, President and Chief Executive Officer of Methode Electronics, Inc.

Donald Duda

Thank you for joining us today for our fiscal 2009 first quarter financial results conference call. I’m joined today by Doug Koman, Chief Financial Officer; Ron Tsoumas, Metals Controller and Joey Iske, Director of Investor Relations. Both Doug and I have comments today and afterwards we will be pleased to take your questions.

Methode completed the first quarter of our 2009 fiscal year with a $9.5 million increase in net sales to $134.5 million and net income of $6.8 million or $0.18 per share. These figures were impacted by various factors during the first quarter, North American Automotive net sales were positively impacted by $3.9 million in net year-over-year price increases, attributed to the legacy programs we are writing down.

In addition, stronger sales came from Honda in the transmission lead-frame program that is in the process of ramping up. However, these sales increases were outset by lower production volume from Ford in North America and GM in Asia. In addition, Methode recorded a $3.3 million after tax charge or $0.9 per share for the previously announced restructuring of our U.S. based automotive operations and interconnect legacy products.

Exclude the restructuring Methode achieved net income of $10.2 million or $0.27 per share compared to $8.3 or $0.22 per share from last year’s first quarter. To provide some perspective on the automotive volume decreases, Ford’s North American sales volume to Methode decreased from approximately $15 million in the first quarter of fiscal year 2008 to $10 million in the quarter just completed, a 33% drop. We anticipate further reductions.

In Europe however, Methode launched new automotive programs during the quarter prior to including controls for the BMW Fantu and several products for the Ford Fiesta. It is important to note that this model vehicle was initially be sold in Europe, but it’s anticipated to expand into Asia, the U.S. and South America in the next few years. New programs launched for Fiat Elfa in the first quarter warrant a bit of history.

Methode’s multi operation began its highly successful relationship with Fiat Elfa in 2001 with several products on the Elfa 159 program. The success of this program has made Methode a preferred supplier with Fiat. This is once again been proven with the most recent of work from Fiat, the vehicle dynamic selector better known as VDS.

This is an interface panel just below the tanner counsel and allows the drive to change the handling characteristics of the vehicle to adapt to the different road conditions such as Ford handling, daily driving and poor weather conditions. We believe Methode is well poised to expand its business with Fiat Elfa.

In addition to these programs new automotive programs were awarded during the first quarter expanding our three global markets. In North America Methode has added a secondary version of the infotainment counsel featuring our TouchSensor technology for Ford launching in 2011. This human machine interface or HMI is an addition to the initial HMI business awarded last year, bringing the combined annual sales volume for these products to just over $17 million beginning in 2011.

Our automotive operation in China has revamped the highly successful Mitsubishi paddle-shifter and added business with Shanghai GM, while in Europe in addition to the Fiat program awards Europe has been awarded an array of products from several OEMs including GM Europe, Ford of Europe and BW. Many of these programs will begin launching in 2010; however the majority of the production will be in 2011. This combined business will add approximately $20 million in annual sales, again beginning in 2011.

Turning to Methodes interconnect segments; consolidated sales increased 13% in the first quarter of fiscal 2009 compared to fiscal 2008. Our TouchSensor business has had a remarkable first year of Methode launching an entire suite of products for the new elected product line. While we are pleased with their progress, we remain cautious as to their market growth as appliance sales tend to follow the housing market.

Due to the slow economy and severely impacted housing markets this business felt the impact from reduced sales volumes in the first quarter. We monitor this closely and make operating adjustment as needed; however, on the new business front TouchSensor was awarded significant new business including new fluent level sensors for sump pump in marine applications and several new cooking, refrigeration and dishwashing user interface panels. These programs will be launching later this year and will add approximately $6 million in annualized sales when fully launched.

Our power product segment increased sales during the quarter compared to last year’s first quarter. The increase is primarily due to the addition of value engineer products that was not included in last year’s results globally, but our margins were impacted by higher material cost and increased logistical costs. I want you to know that we are very concerned with the decreased profits from our prior segments particularly since the sales have increased. Management takes this very seriously and is implementing actions for prove the profitability level.

With that said new business awards create an opportunity to enter new markets. We received an order from a large military supplier for the new navy DDX program which is a significant award because one of our competitors has been very dominant than this customer for several years. We congratulate our power segment on this win.

The new navy DDX program on placement service will replace the Perry Class Frigates and Screwing Class Destroyers. Interestingly, these ships will be all electric drive eliminating drive shaft reduction gears thus reducing the acoustic signature by which other ships can identify a vessel. There will be ten times more power availed for all the ship systems compared to conventional ships. This initial power will be necessary for future electronic based weapons. We look forward to being included in the power names for what the navy is calling “The Navy of the Future.”

One area power product has been focused on is wind power. We have engaged several key OEMs in this market. The main application in this arena for power products is the inverter control system. One order recently received is for a customer power rail and bus power design that has the potential of creating solid annual sales if the OEMs product line is well received in the market place.

In addition to wind power we were awarded a product order from a large elevator manufacture. This is our first entry with this multinational OEM and we will seek to gain additional power business from the transportation and automotive businesses going forward.

Before I turn the call over to Doug I would like to take a moment to mention our new strategic relationship with Flumadine announced in early August. One of Methode’s key strategies has been to develop new technologies for applications in the market Methode serves. Flumadine’s biometric sensors can reliantly capture accurate and high quality data for use in systems requiring secure scoop-proof automated identification.

Already used in worldwide applications for identification in security, Methode intends to extend Flumadine’s biometrics to automotive applications such as convenience and security in the vehicle. We believe Flumadine’s biometric sensors can be used to support potently vehicle features such as keyless entry, ignition authorization and the sonification of in vehicle transactions via telemetric.

As we continue to expand our human machine interface or again HMI applications, the ability to move this multispectral imaging technology into applications from the current markets such as transportation will be key in supporting our future growth. I am personally excited about the technology and our relationship with Flumadine. They are a strong company, well funded and supported by strong technologist.

At this point I will turn the call over to Doug for his financial review.

Douglas Koman

Let me start by reviewing the sales and margin activities for our recording segments. The automotive segment had first quarter net sales of $84.7 million compared to $82.9 million last year. In the quarter North American sales were positively impacted by year-over-year net price increases of $3.9 million on the Chrysler business that we had decided to exit. We expect that the benefit of these price increases will decrease significantly during the remainder of fiscal 2009 as Chrysler continues to transfer their business to other suppliers.

Also we had the increased sales up from automotive operations in Europe but these were offset by lower sales from both China and North America. The decline in Asia and North America is primarily due to lower demand for parts and components that are included in the less fuel efficient trucks and SUVs. In the quarter the weaker U.S. dollar actually contributed about $3.5 million to the sales improvement year-over-year.

Gross margins for the automotive segment were $17.1 million compared to $16.4 million last year; this is primarily the result of the Chrysler price increases and higher sales in Europe. Restructuring charges in the first quarter for the automotive segment totaled $3.2 million and drove income before income taxes down to $10.5 million compared to $11.7 million last year.

The interconnect segment had net sales of $35.6 million in the first quarter which is up from $31.4 million last year. This increase is primarily attributable to interconnect sales in Asia and from our TouchSensor business. Currency translation increased net sales by about $0.5 million in the quarter. Gross margins for the interconnect segment were $9 million compared to $7.6 million last year. This is primarily the result of the higher sales.

As a percentage of sales, gross margins increased to 25.3% compared to 24.2% last year; this is because products manufactured in Asia have lower percentage cost of products sold compared to similar product at our North American operations. Restructuring charges in the first quarter for the interconnect segment totaled $1.7 million and is the primary reason for income before income taxes dropping to about $0.5 million from $2.4 million last year.

The power segment sales increased in the quarter with $12 million this year compared to $9.1 million last year; as I mentioned the increase is due to the VEP acquisition and strong sales from our Asian operation. Gross margins however decreased to $2.3 million in the quarter from $2.6 million, primarily due to a product that went end-of-life at the end of fiscal 2008 which had a higher gross margin and the business that remained during the first quarter of fiscal 2009.

The decreased in income before income taxes to $800,000 compared to $1.8 million last year was impacted by higher shipping costs and higher commissions and also expenses related to Turbo Tech which was acquired on March 30, 2008. The other segment had first quarter sales of $2.2 million which is up from $1.7 million last year. This was primarily driven by sales from our TouchSensing sensing business; gross margins however were flat year-over-year at $200,000 and the loss before income taxes was about $600,000 compared to a loss of $300,000 last year. This is primarily due to additional support staff being added at our testing facilities.

Some of the highlights on the consolidated income statement; selling and administrative expense in the quarter was $16.5 million up from $16 million last year, which is primarily due to higher stock award amortization and higher intangible asset amortization. As a percentage of net sales however selling and administrative expense was down to 12.3% compared to 12.8% last year.

Interest income net was $0.5 million for the quarter compared to $400,000 in last year’s quarter. The average cash balance this quarter was about $116 million compared to $68 million during last year’s quarter and also the average interest rate earned in the current quarter was just about 2% compared to 3% last year and this is because the investments that we are currently invested in are weighted more heavily to tax exempt.

The effective tax rate in the quarter was 21.8% compared to 25.3% last year. Both the years reflect the utilization of the investment tax credits, the effect of lower tax rates at the company’s foreign operation and a higher percentage of earnings at those operations.

Moving to the balance, sheet cash is up to $111.5 million compared to $104.7 million at the end of fiscal 2008. The accounts receivable balance is $74.2 million which is down from $85.8 million at the end of last year. This is primarily the result of the payment on a large tooling project and tightened payment terms on certain US customers.

Inventory balance is $55.4 million, down from $55.9 million at the end of last year, the activity across segments and business units were fairly dynamic that netted only a small reduction of the $0.5 million. Other current assets were $16.4 million, up from $14.8 million of last year; this is primarily due to prepaid insurance and advanced payments made to suppliers for capital expenditures and Malta.

Property plant and equipment is $88.5 million, which is down from $90.3 million last year. The increase in PPNE for capital expenditures in the quarter was offset by increased accelerated depreciation due to restructuring charges. Goodwill is unchanged at $54.5 million and tangible assets are at $40 million down from $41.3 million at the end of last year; this is due to normal amortization.

Other assets at $27.3 million are up from $23.4 million primarily due to our investment in Flumadine and the increases in the cash surrender value of company owned life insurance policies. Accounts payable are down at $33.8 million versus $42.8 million at the end of last year. This is due to ending the quarter on a large cash disbursement cycle in both the US and Malta.

The other current liabilities at $33.6 million are down from $34.3 at the end of last year, primarily due to payment of estimated income taxes and other non-current liabilities are at $20.1 million down slightly from $20.7 at the end of last year primarily due to deferred compensation payments related to the TouchSensor acquisition. On a cash flow statement, year-over-year cash provided by operating activities decreased $11.3 million. This is primarily due to the decrease in net income and that last year’s first quarter had a large prepayment from a customer.

The decrease in cash’s and investing activities is primarily due to lower capital spending in this year’s quarter versus last year’s and also in last year’s first quarter there was a dividend payment on our joint venture and we also made a contingent payment related to the acquisition of Cableco. The decrease in cash used in financing activities is primarily due to fewer stock options being exercised and that concludes my remarks.

Donald Duda

We are ready to take questions.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Analyst for David Leiker - Robert W. Baird.

Analyst for David Leiker - Robert W. Baird

Don and Doug, with the power distribution segment, we have a couple of moving parts, provided margin is down there. You mentioned that the business had ended and also some of these higher costs. A, is the business that ended just not coming back and what sort of pressures does that put on margins and what should we expect going forward and what was the impact of these higher costs on margins in that business?

Donald Duda

Okay the business you are referring to that went into end-of-life was the IBM business we’ve talked about. That was a higher margin business but it will be offset moving forward by larger business gains that offset it. I don’t know if that will replace the margin one for one, but we are certainly going to replace it on the way of different customers, so we are less dependant on one. Material impact; I don’t know if we are able to quantify the material impact, but the material lag is a significant reason for the growth.

To put it in perspective Keith, I’m not as concerned about the IBM end-of-life, that something that we haven’t taken into account. Our projections are more concerned about the material costs that went up and plus more logistical cost. On the other hand the business has grown and we are pretty good at taking costs that will address those issues, so it is something that we can have an effect on the control.

I’m so positive about the business. If you think about it, we took a business that was located in Walden Meadow and have now expanded business in two other continents, so there is going to be some issues and increased material costs. I’d prefer it didn’t happen, but again it’s something we can’t control.

Analyst for David Leiker - Robert W. Baird

Just two more follow-ups to that; do you have any success passing those material costs on to your customers or is this a negotiated contract in advance?

Donald Duda

A little bit of a mixed bag, but in contrast to it, automotive was very difficult; we are probably going to be able to do some of that. We have done it with some customers and it’s a viable option in this case what it wouldn’t have been very difficult in auto.

Analyst for David Leiker - Robert W. Baird

Okay and then I mean if we look at the impact that this IBM business had on the power distribution business, would you say that that pushed the margin in that business above what you guys would kind of expect going forward?

Donald Duda

No not at all. No, that segment is a good margin segment to be in and I guess the best answer is no, absolutely not; that margin should be going up.

Analyst for David Leiker - Robert W. Baird

Okay, up from the fiscal ’08 figured?

Donald Duda

Yes, but I’m satisfied. We weren’t satisfied with where the margins were and then you can imagine dropping that caused us more issues, but that should be a higher margin business and than Methode generally operates that. We certainly intend to get it better.

Analyst for David Leiker - Robert W. Baird

Sure, that’s perfect and then when we quantify the acquisition revenue that was in the power distribution segment, from the CD.

Donald Duda

Yes, that was about $2 million of revenue in the quarter.

Analyst for David Leiker - Robert W. Baird

Okay, perfect and then just lastly here I wanted to kind of dive into the automotive segment because I think you guys did a pretty good job managing the increased revenue you even if you exclude the price that was only down slightly in a very difficult environment and I know you mentioned some of the new businesses in Europe, but can you kind of help me quantify some of the moving parts here, so I can get my arms around the success?

Donald Duda

I think I kind of answered that. We have quantified the European wins.

Analyst for David Leiker - Robert W. Baird

Ford was down about $5 million and how was Chrysler in North America?

Donald Duda

I mean we were just about out of Chrysler.

Analyst for David Leiker - Robert W. Baird

Okay, so that’s a demand and it’s now a shrinking amount.

Donald Duda

Probably, I think as Doug mentioned or I mentioned we certainly had an increase or an impact on non-income because of the increase of the product. Probably another factor we should issue or discuss is the automotive leafleting transmission that is launching; that has had a positive impact. Also if you look at Malta it up year-over-year about 7%, so I suggest it will get Europe.

Analyst for David Leiker - Robert W. Baird

Okay and that’s primarily new business wins as opposed to volumes.

Donald Duda

That’s the business wins and again that’s a strategy we implemented. I talked about Fiat; Fiat was really the first major win we had in Europe when we essentially instructed Malta, quit focusing on the US and start focusing on Europe and that’s why you were required and that Fiat was the first win and that’s continued to pay off, plus VW.

The Ford volume for hidden switches shift to the US was down. I mean that didn’t pay us the same issue that automotive in the US had and with Ford volume reduced and what I’m pleased about is even with $5 million down from your within our major customer Methode still had, I won’t say that’s a great quarter, but it had a good quarter.

When we think about four, five years ago Chrysler represented $120 million of business, had we stuck with Chrysler we would have had a very serious issue, so I don’t know if I keep putting more parameters, but I believe the transmission program we are pleased about that launching in the US and that will be transferred onto Shanghai, that’s had a good impact, that’s the T76 GM transmission. I don’t know how much more I can give you, unless you guys have other comments.

Operator

Your next question comes from Jeremy Hellman - Singular Research.

Jeremy Hellman - Singular Research

I just wanted to make sure that I was following things correctly to some of the prior discussion surrounding Chrysler. Ex the $3.9 million price increase in the quarter, did you state how much business you had kind of on a normal basis with Chrysler in the quarter?

Donald Duda

No, we don’t breakdown the business by OEM on a quarterly level; we will do that at year end when we identify material customers, but not on the quarter.

Jeremy Hellman - Singular Research

Right, so that just leads us back to your qualitative commentary that in a dominant portion obviously the Chrysler business is already gone and there is not much left to run often them, am I right about that?

Donald Duda

It will fade out completely by with the 10 years end here, but Chrysler has had trouble transferring products because of their own issues, so it should wind down here by the end of the year.

Jeremy Hellman - Singular Research

Okay, kind of switching over to the appliance market and particularly in terms of your new customer there, I’m not naming names I guess; have you got any feedback on where their inventory is versus expectations pretty with sales being affected by what’s going on in the housing markets? Are they are running a lean inventory program there or are they getting backed up at all?

Donald Duda

Are you talking about our customers?

Jeremy Hellman - Singular Research

Yes.

Donald Duda

The one customer that I mentioned, we do know they have inventory that they will call it back up, but they’re going to wind work off here really this past quarter; I want to wait and see what happens next quarter. We’re tracking the housing market now and that does impact it, so it affected that launch. The other major customer from what I’ve read, I’ve not spoken to them and what I’ve read they are doing a better job managing, but some of the analysts feel about that as the major appliance manufacturer. I mean what’s the lured of your question; is it are we going to see more reductions in orders?

Jeremy Hellman - Singular Research

Yes, I mean what I’m getting at here; here we are mid Q2 essentially and I wanted to get a handle on where their order activity is with you guys and the basis being if they had over ordered from the GetGo and are sitting on inventory then they’ll be taking orders down or if they adequately foresaw what was going on in their end markets, if they were running things lean and therefore still in the mortising.

Donald Duda

It’s a pretty good question. I think our view was that as we move forward, I think even better I mentioned that we’ve taken that into account and how we look at TouchSensor. I would anticipate another quarter of I would call it slight reductions. It’s still depends on the housing and the economy.

They’ve done a great job of booking new business in other areas and if you look at their history, they were owning by ShortGlass who literally insisted that they stay in the appliance market, because they wanted to put these controls on their glass and it made perfect sense for them to do that, but when we acquired them, we said “hey, this is going to be used as level sensors, you can enter the European market.” So, they’ve done a very good job and this doesn’t necessarily have to be on glass when it’s used on the appliance either.

So, that $6 million of first quarter wins and I talked to GM this morning and GM is going to repeat that for the second quarter, because that just lessens our dependent on some other customers. So, while the appliance business is down and they’re feeling the impact on it, I’ve been very pleased with what they’ve done in terms of expanding the business.

Jeremy Hellman - Singular Research

Looking sort of and reading into the Q this morning and you say that you’re expecting another $10 million to $15 million of restructuring charges over the rest of the year; is that expected to bunch into any one quarter or should it be fairly even?

Donald Duda

Yes, I mean that somebody said that it depends on the accounting rules, but I think some of it also depends on just when Chrysler actually transitions their product out, so just is difficult to say when the price increase impact is going to diminish the same thing with the restructuring. So, as that business rolls out, we are able to take some moves and we’ll be able to under the accounting rules take those charges. We are behind schedule on where we thought we would be, but we’re not dramatically behind.

Jeremy Hellman - Singular Research

Okay and there’s some obviously reduced headcount and other that is associated with that; is they’re going to be any meaningful impact to the downside in SG&A?

Douglas Koman

Because of the restructuring?

Jeremy Hellman - Singular Research

Yes, you’re left with lower headcount at the end of the day, so if you’re sighting stock comp expense and other things that flow into SG&A is it then reasonable to assume that we got some what of the downward buyers to the overall SG&A.

Douglas Koman

No, not necessarily Jeremy; this is a production facility and the impact would be minimal I think on SG&A.

Jeremy Hellman - Singular Research

One last one from me and then I’ll jump out. The cash balance keeps climbing, you guys aren’t levered; what kind of cash balance do you need to raise the business appropriately and are you getting to a point where you might have to take into some considerations that you have excess cash or so?

Donald Duda

We’ve said a number of times our focus is on acquisitions. I feel we made the right decision in exciting Chrysler, but if you think of the Chrysler revenues that’s hard to replace with home grown business. Power is growing, but it can’t grow fast enough to displace and for that I think if you look Ford revenues are down as well. So, we are very much focused on acquisitions and for Methode a fairly large one we did is TouchSensor business and what I was very pleased about, we replaced that cash fairly quickly.

So, that’s our strategy of going after acquisitions, expanding a global presence, explaining the customer base we use or work with a key strategy and I’m not saying we’re exiting automotive, we are exiting certain legacy products, but we’re focused on our the auto parts and we want less dependence on the automotive industry and how you get that, you use your cash to acquired companies. So, that’s really going to be the biggest use of our cash going forward and I need to do something different, but I don’t thing we are at that point yet.

Jeremy Hellman - Singular Research

Okay, but one last one I guess on the use of that then; given, what’s going on just in the global economy are you seeing acquisition opportunities become relatively more attractive, be it smaller companies that are just a little bit more pinched by what’s going on or and need to involve themselves with someone with larger scale or otherwise?

Donald Duda

I’ll make some comments. I think clearly, the pendulum has shifted the strategic buyers away from the financial buyers; it might be stating the obvious there, but that has helped. Evaluations, they’ve comedown and we’re light moving down, but they are down and I can’t really say we’re seeing more opportunities because we focused people full time on it or it’s just a bit more opportunity, I don’t know how to gauge that, but this is a goodtime for Methode to be in the market for acquisitions. We’ve always watched our generated cash and so this is probably the best time in the last five years.

Operator

Your final question comes from Bryan Crawford - Parameter Capital Management.

Bryan Crawford - Parameter Capital Management

I had a quick question for you on the interconnect business; maybe if you could give a little bit more color there on profitability; even if we exclude the restructuring charge it’s still below where it was a year ago and I wanted to try and understand a little better about what’s going on there for profitability and kind of what your outlook is going forward?

Donald Duda

Okay, again the main driver is the TouchSensor business being down a bit. We’ve exited some legacy products where we had the benefit of price increases we gave you a couple of years ago, so those I don’t think there’s anything you would add to that, but I’d say more than what we did is answered in the earlier question.

Douglas Koman

I guess just in that segment as we go through the restructuring, you’re also going to -- not everything you do falls for restructuring, so we do have a little bit of strain on the business. You talked about the increase; we didn’t mention the amortization cost of the TouchSensor acquisition. That was not in last year’s quarter and the squall, it’s not a fair leaner and the customer relationship intangible is pretty much front end loaded and given the projection that we used for the acquisition, last year’s quarters didn’t have as much as we see this quarter, so that would be a big part of it.

Bryan Crawford - Parameter Capital Management

It seems like each quarter you guys have a number of new program wins to announce, but if I’m reading this right, it looks like the next 12-months is going to be pretty difficult, but if and when get to that period assuming the auto industry stabilizes a bit, you got a number of new launches in 2010 and 2011; am I reading that right, I mean are you guys optimistic if we’ll get through the next 12-months?

Donald Duda

I’ll answer that without giving guidance. Cautiously optimistic and two years ago did I predicted a $5 million drop in Ford business in a quarter, no and I don’t think anybody predicted $4 a gallon of gas, so it is depended. When we goes out in the auto industry, on the downside we are seeing some slowing in Europe although we’ve taken our new program, so we’ve probably taken market share away there so you get growth from that, but it’s a difficult 12 month period I think for any company that’s involved in these markets.

I’m pleased that Methode has been able to exit a couple of very large customers here without hurting ourselves. I kind of go back to $120 million, $125 million with Chrysler years ago and even more -- not very more, but significant amount with Ford. What we’ve done with our acquisitions, what we’ve done with power, what we’ve done with our European business and we more resemble technology. We are well positioned, I’m just very reluctant to say, “Hey I think we are turning the quarter,” because again with what’s going on in the US automotive business.

Operator

There are no other questions in the queue at this time.

Donald Duda

With that we’ll wish everyone a very pleasant day.

Operator

Ladies and gentleman this does conclude today’s teleconference. Thank you for your participation.

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Source: Methode Electronics Inc. F1Q09 (Qtr End 08/02/08) Earnings Call Transcript
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