Methode Electronics, Inc. (NYSE:MEI) Q3 2024 Earnings Call Transcript

John Franzreb: Good morning and thanks for taking the questions everyone. I’m sorry I joined late, so I might have missed some of the guardrails here as far as the Q&A. But I’m curious about a couple of things. One, how is the facility in Monterrey performing? Is that been corrected? Or is that still an ongoing issue? And if it is, when will it be fixed?

Avi Avula: John, our challenges continue to be in the Monterrey site, where we are working aggressively to look at all operational effectiveness actions, including cost and productivity inventory as well. Some of these issues may have been more challenging than we thought earlier. So it’s taking us some time to review and get back. I think that’s our key focus as we go forward.

Ron Tsoumas: Yes. We’ve experienced the inefficiencies and they continue and taking more time than we had previously thought, but on the right — getting the right view.

John Franzreb: Remind me, Ron, what the biggest issue is at this point. Is it — remind me.

Ron Tsoumas: It’s — the issues that are connected are high labor turnover, planning issues, inventory — leading to inventory shortages, leading to expedited incoming freight, sometimes outgoing freight, some short shipment — short shipping premium freight, inbound and spot purchases where our planning isn’t fully vetted and — so all of those things collectively and launching a significant amount of programs at the same time have led to the inefficiencies that we’ve been experiencing.

Operator: We have reached the end of the question-and-answer session, and I will now turn the call over to Avi for closing remarks.

Avi Avula: I just want to say thank you to all for your participation. Thank you.

Operator: Thank you. This concludes today’s conference, and you may disconnect your lines at this time. Thank you for your participation.