SOURCE: Methode, Inc.

Methode, Inc.

September 09, 2011 08:30 ET

Methode Electronics, Inc. Acquires Monterrey, Mexico, Operations From Nypro Inc.

CHICAGO, IL--(Marketwire - Sep 9, 2011) - Methode Electronics, Inc. (NYSE: MEI), a global developer of custom engineered and application specific products and solutions, announced today that it has acquired certain assets and liabilities of Nypro Monterrey, S. de R.L. (Nypro Monterrey) from Nypro Inc., a global plastics leader. Per agreement with Nypro, the specific terms of the transaction were not disclosed. Methode will operate this injection molding and painting business under the name of Advanced Molding and Decoration, S.A. de C.V. (AMD), and it will become a part of Methode's existing Monterrey manufacturing campus.

Nypro Monterrey operates a state-of-the-art facility, which will provide Methode with high-quality injection molding, painting and decorating capabilities. The assets include 52 injection mold machines, three paint lines and several pad print machines. The facility intends to continue production of injection-molded components for its current customers, whose contracts will transfer to Methode along with the assets. Additionally, 228 Nypro employees will transfer to Methode, bringing with them years of knowledge and experience.

The acquisition will reduce Methode's costs over a Greenfield approach by approximately $8.0 million. The Company anticipates investing approximately $7.5 million in additional capital to complete the vertical integration process. Methode estimates the acquisition and integration will be between $1.3 million and $2.0 million dilutive to earnings during the first 12 months following the acquisition. Sales from AMD are expected to be between $20 million and $25 million during that same period.

Methode President and Chief Executive Officer Donald W. Duda said, "We have been experiencing significant quality and delivery issues with suppliers relating to an intricate paint process for the production of automotive center consoles. Although we put in place a number of corrective actions and process improvements during the last several quarters, we believe the vertical integration of a portion of these processes will be the best solution to provide our customers with better and more consistent quality."

Nypro Inc. Chief Executive Officer Ted Lapres said, "Nypro has been pleased to work with Methode during its acquisition of our Monterrey facility. We plan to assist Methode to effect a smooth transition for all phases of the business in Monterrey and are confident that it will be business as usual for all customers serviced from this facility."

Mr. Duda concluded, "We are excited to acquire a company of Nypro Monterrey's expertise and skill, which we believe will not only benefit our customers, but provide new options to current Nypro Monterrey customers. This acquisition will not only enhance quality, mitigate supply risk and improve our gross margins on the production of center consoles, but it will also support Methode's continued growth as a world-class engineering and manufacturing company."

About Methode Electronics, Inc.
Methode Electronics, Inc. (NYSE: MEI) is a global developer of custom engineered and application specific products and solutions with manufacturing, design and testing facilities in China, Germany, India, Lebanon, Malta, Mexico, the Philippines, Singapore, Switzerland, the United Kingdom and the United States. We design, manufacture and market devices employing electrical, electronic, wireless, safety radio remote control, sensing and optical technologies to control and convey signals through sensors, interconnections and controls. Our business is managed on a segment basis, with those segments being Automotive, Interconnect, Power Products and Other. Our components are in the primary end markets of the automobile, computer, information processing and networking equipment, voice and data communication systems, consumer electronics, appliances, aerospace vehicles and industrial equipment industries. Further information can be found on Methode's Web site

About Nypro Inc.
Nypro is the leading global solutions provider in the field of manufactured precision plastic products. Nypro operates 44 locations in 15 countries, employing over 17,000 people. Sales for the most recent fiscal year were approximately $1.1 billion.

Forward-Looking Statements
This press release contains certain forward-looking statements, which reflect management's 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 undertakes 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 differ materially from our expectations are detailed in Methode's filings with the Securities and Exchange Commission, such as our annual and quarterly reports. Such factors may include, without limitation, the following: (1) dependence on a small number of large customers, including two large automotive customers; (2) dependence on the automotive, appliance, computer and communications industries; (3) further downturns in the automotive industry or the bankruptcy of certain automotive customers; (4) automotive program launches may be delayed or have lower than anticipated volumes; (5) ability to compete effectively; (6) customary risks related to conducting global operations; (7) dependence on the availability and price of raw materials; (8) dependence on our supply chain; (9) ability to keep pace with rapid technological changes; (10) ability to avoid design or manufacturing defects; (11) ability to protect our intellectual property; (12) ability to withstand price pressure; (13) the usage of a significant amount of our cash and resources to launch new North American automotive programs; (14) location of a significant amount of cash outside of the U.S.; (15) currency fluctuations; (16) ability to successfully benefit from acquisitions and divestitures; (17) ability to withstand business interruptions; (18) unfavorable tax laws; (19) ability to implement and profit from newly acquired technology; and (20) the future trading price of our stock.

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