Methode Electronics, Inc. Q2 2023 Earnings Call Transcript

Don Duda: And I think comment, there’s nothing in AR, but any concerns there and then inventory, inventory in large part is up, because the products that we’re keeping an inventory have gone up dramatically. I think more that said was like 30 —

Ron Tsoumas: Yes, almost 50% or 60% of the inventory increase was due to the standard cost and things of that nature. So which filled out — material prices go down. So what we’re really focused on what we can control is the logistics and how we order. So that’s where the team is focusing on right now.

Luke Junk: Okay, and then lastly, just a bigger picture question. Don wondering, if you could comment on the evolution of busbar’s in terms of EV architecture and applications and the awards this quarter you said the busbars not only for battery applications, but also for e-motor and in inverter. I think there maybe had been one inverter weren’t in the past, if I look back at your historical bookings. Just wondering, is there an expanding use case for busbars to outside of just the battery that you’re seeing right now? Thanks.

Ron Tsoumas: Most of those, in general, those are the three areas of the vehicle that you would see busbars, and we’ve talked, you know, historically about the battery busbars that we’ve started to ship those quite some time ago. Well, we have moved into the inverters and into the motors. And if you go to our investor deck, I think there’s one slide in there that shows our pictures of all three. So that’s the majority of our bookings have been in battery busbars, but we are moving into those — other two areas. And that would be natural, because I have several busbars suppliers if your major one is the battery supplier should be able to do the others, so that it’s a change. It doesn’t represent huge bookings at the moment, but we anticipate that is one of the reasons we favor busbars pipeline.

Luke Junk: Okay. Great, I’ll go ahead and leave it there. Thanks for all the color.

Ron Tsoumas: Thanks, Luke.

Operator: Thank you. Our next question is coming from John Franzreb with Sidoti and Company. Please go ahead.

John Franzreb: Good morning, guys, and thanks for taking the questions and congratulations on a good quarter.

Don Duda: Thank you.

John Franzreb: I wanted to circle back to the Asia question, I guess, to how phrase it, sequentially revenues went from $30 million last quarter to roughly $45 million this quarter is how much of that you characterize as a catch-up price and would you expect that business to dip again or stay at this kind of level? What are your thoughts there?

Ron Tsoumas: That was certainly a catch up. The other thing we had there John was our power business into data centers, which is a nice business for us, kind of, lumpy business and in the first two quarters, we experienced really great sales from that and we — in our guidance we contemplated a bit of lowering or tempering of not maintaining that level in the second half of the fiscal year.

Don Duda: Yes, I think really, in both those areas. We achieved our full-year numbers, so we are anticipating a slower third and fourth quarter there and you take that into account and then you taken the catch up, so I would say its going to be down.

John Franzreb: Okay, all right, fair enough. And if I look at the Industrial segment and you called out that data centers you just mentioned EV and commercial vehicles, as far as the year-over-year growth. Can you kind of quantify which of those three had the greatest impact year-over-year?