NEW YORK, NY - 
(NewMediaWire) - September 07, 2024 -- Kaplan Fox & Kilsheimer LLP reminds investors that a complaint has been filed on behalf of investors that purchased Methode Electronics, Inc. (“Methode” or the “Company”) (NYSE: MEI) securities between June 23, 2022 and March 6, 2024 (the “Class Period”).
DEADLINE REMINDER: If you are a member of the proposed Class, you may move the court no later than October 25, 2024 to serve as a lead plaintiff for the purported class. If you have losses we encourage you to contact us to learn more about the lead plaintiff process.
According to the complaint, leading up to and during the Class Period, the Company and the other defendants represented that Methode’s transition into new business opportunities, in particular in the EV space, and away from its legacy center console business, was progressing well, including the retooling of its Monterrey facility to support the transition to building new, more specialized components and to service new Electric Vehicle (“EV”) program awards.
However, as alleged in the complaint, unknown to investors defendants’ Class Period representations were false and misleading because defendants knew, or recklessly disregarded that the Company’s transition away from its lucrative and dependable center console business and into a more diversified mix of product lines with more specialized components was plagued with operational logistical and personnel challenges that were negatively impacting the Company’s business and revenue growth.
More specifically, the complaint alleges: (i) that the Company had lost highly skilled and experienced employees during the COVID-19 pandemic necessary to successfully complete the Company’s transition from its historic low mix, high volume production model to a high mix, low production model at its Monterrey facility; (ii) that the Company’s attempts to replace its GM center console production with more diversified, specialized products for a wider array of vehicle manufacturers and OEMS, in particular in the EV space, had been plagued by production planning deficiencies, inventory shortages, vendor and supplier problems, and, ultimately, botched execution of the Company’s strategic plans; (iii) that the Company’s manufacturing systems at its critical Monterrey facility suffered from a variety of logistical defects, such as improper system coding, shipping errors, erroneous delivery times, deficient quality control systems, and failures to timely and efficiently procure necessary raw materials; (iv) that the Company had fallen substantially behind on the launch of new EV programs out of its Monterrey facility, preventing the Company from timely receiving revenue from new EV program awards; and (v) as a result, the Company was not on track to achieve the 2023 diluted EPS guidance or the 3-year 6% organic sales CAGR represented to investors and such estimates lacked a reasonable factual basis.
The complaint further alleges that on March 7, 2024, the end of the Class Period, the Company announced financial results for the third fiscal quarter, including an $11 million loss from operations, and also withdrew Methode’s prior guidance, due in substantial part to the “operational challenges” at the Monterrey facility. Following this news, Methode common stock fell $6.55 per share, more than 31%, to close at $14.49 per share.
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