RADNOR, Pa.--(BUSINESS WIRE)--The law firm of Kessler Topaz Meltzer & Check, LLP informs investors that the firm has filed a securities fraud class action lawsuit against Methode Electronics, Inc. (NYSE:MEI) (“Methode” or the “Company”) on behalf of investors who purchased or acquired Methode common stock between December 2, 2021, and March 6, 2024, inclusive (the “Class Period”). The action, captioned City of Cape Coral Municipal General Employees’ Retirement Plan v. Methode Electronics, Inc., et al., Case No. 1:24-cv-09654 (the “Cape Coral Action”), was filed in the United States District Court for the Northern District of Illinois.
Important Deadline Reminder: There is one related class action lawsuit pending against Methode in the United States District Court for the Northern District of Illinois. That first-filed action issued notice of its filing pursuant to the federal securities laws which triggered the deadline of October 25, 2024, for any investors who purchased Methode common stock to seek to be appointed as a lead plaintiff representative of the class. The filing of the Cape Coral Action does not change the October 25, 2024 lead plaintiff deadline.
CONTACT KESSLER TOPAZ MELTZER & CHECK, LLP:
If you suffered Methode losses, you may CLICK HERE or GO TO: https://www.ktmc.com/new-cases/methode-electronics-inc?utm_campaign=mei&mktm=r?utm_source=PR&utm_medium=link&utm_campaign=mei&mktm=r
You can also contact attorney Jonathan Naji, Esq. of Kessler Topaz by calling (484) 270-1453 or by email at info@ktmc.com.
DEFENDANTS’ MISCONDUCT
The Class Period begins on December 2, 2021, when Methode filed its second quarter 2022 financial results. In connection with these results, Defendant Donald W. Duda, the Company’s then-President and Chief Executive Officer, touted the “diversity of awards across key applications” and that “business awards over the last couple of years have put us on track in aggregate to replace the sales from the roll off of this truck [center console] program.” In fact, Defendant Duda also explained to investors during the Company’s investor earnings call that Methode “expect[s] that . . . as that [center console program] rolls off and other programs roll on, that our margins would improve.”
Throughout the Class Period, Defendants repeatedly assured investors that Methode’s Automotive segment was growing and acquiring new business, but failed to disclose that Methode could not adequately meet its customers’ needs because the Company was saddled by operational inefficiencies in North America, including planning deficiencies, inventory shortages, and shipping delays.
Investors began to learn the truth about the significant problems in Methode’s Automotive segment on March 9, 2023, when the Company announced its third quarter fiscal year 2023 financial results. Methode reported that its overall quarterly net sales decreased nearly 4% year-over-year, which was largely driven by a nearly 10% decline in quarterly Automotive net sales. Methode also cut its fiscal year 2023 net sales and diluted earnings per share (“EPS”) guidance. On this news, the price of Methode common stock declined $6.25 per share, or more than 13% over multiple trading sessions, from a close of $47.61 per share on March 8, 2023, to close at $41.36 per share on March 13, 2023.
On June 12, 2023, Methode preliminarily announced its fourth quarter and full fiscal year 2023 financial results. Methode revealed that it expected, inter alia, full fiscal year diluted EPS in the range between $2.10 per share and $2.14 per share, which was well-below Methode’s revised profitability guidance announced the prior quarter. On this news, the price of Methode common stock plummeted $8.17 per share, or more than 18%, from a close of $45.07 per share on June 12, 2023, to close at $36.90 per share on June 13, 2023.
Ten days later, on June 22, 2023, Methode reported its fourth quarter and full fiscal year 2023 financial results, including full fiscal year diluted EPS of $2.10 per share, at the bottom of its guidance range. On this news, the price of Methode common stock declined $4.75 per share, or nearly 13% over multiple trading sessions, from a close of $37.52 per share on June 21, 2023, to close at $32.77 per share on June 23, 2023.
Over the next several months, Methode made several additional partial revelations about the Company’s operational inefficiencies, while also assuring investors that it was swiftly addressing such issues and that a corrective action plan was in place.
Then, on December 7, 2023, Methode reported its second quarter fiscal year 2024 financial results, including a goodwill impairment of $56.5 million in its North American and European Automotive segments. Methode further reported a year-over-year decrease in net sales and a quarterly loss from operations due to the goodwill impairment resulting from operational inefficiencies in its Automotive segment. Methode also revealed that it terminated the employment of the Company’s then-Chief Operating Officer, Defendant Joseph Khoury, who had been placed on leave in July 2023. On this news, the price of Methode common stock declined $2.26 per share, or more than 9%, from a close of $24.39 per share on December 6, 2023, to close at $22.13 per share on December 7, 2023.
Finally, investors learned the full extent of Methode’s operational challenges on March 7, 2024, when the Company reported its third quarter fiscal year 2024 financial results. Critically, on Methode’s investor earnings call held that same day, Avinash Avula, the Company’s then-President and Chief Executive Officer, revealed a “$21 million year-over-year” decrease in Methode’s quarterly net sales due to continued operational inefficiencies within the Automotive segment. Methode also suspended its financial guidance for fiscal years 2024 and 2025 and stated that “[a]ny and all previous guidance provided by the company should no longer be relied upon.” On this news, the price of Methode common stock declined $6.55 per share, or more than 31%, from a close of $21.04 per share on March 6, 2024, to close at $14.49 per share on March 7, 2024.
THE LEAD PLAINTIFF PROCESS:
Methode investors may, no later than October 25, 2024, seek to be appointed as a lead plaintiff representative of the class through Kessler Topaz Meltzer & Check, LLP or other counsel, or may choose to do nothing and remain an absent class member. A lead plaintiff is a representative party who acts on behalf of all class members in directing the litigation. The lead plaintiff is usually the investor or small group of investors who have the largest financial interest and who are also adequate and typical of the proposed class of investors. The lead plaintiff selects counsel to represent the lead plaintiff and the class and these attorneys, if approved by the court, are lead or class counsel. Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff.
Kessler Topaz Meltzer & Check, LLP encourages Methode investors who have suffered significant losses to contact the firm directly to acquire more information.
CLICK HERE TO SIGN UP FOR THE CASE OR GO TO: https://www.ktmc.com/new-cases/methode-electronics-inc?utm_campaign=mei&mktm=r?utm_source=PR&utm_medium=link&utm_campaign=mei&mktm=r
ABOUT KESSLER TOPAZ MELTZER & CHECK, LLP:
Kessler Topaz Meltzer & Check, LLP prosecutes class actions in state and federal courts throughout the country and around the world. The firm has developed a global reputation for excellence and has recovered billions of dollars for victims of fraud and other corporate misconduct. All of our work is driven by a common goal: to protect investors, consumers, employees and others from fraud, abuse, misconduct and negligence by businesses and fiduciaries.
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