Methode Electronics (MEI) risk factors, FY2026 10-K

Methode Electronics's FY2026 10-K, filed Jun 24, 2026, lists 43 risk factors in 4 groups. Against the prior year's 38: 8 new, 3 dropped, 10 substantially reworded.

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Risk factors listed
434 groups
New this year
8vs 38 last year
Dropped
3since the prior 10-K
Substantially reworded
10of those kept
Section length
10k wordsItem 1A

What the changes say

  • Methode Electronics faces escalating risks related to EV program cancellations, new U.S. tariffs, and customer concentration.

What changed since the prior 10-K

New

  • NewOperational and Industry Risks

    The potential expiration, renegotiation, or modification of the United States–Mexico–Canada Agreement (USMCA) could adversely affect our business, financial condition and results of operations

    The potential expiration or modification of the USMCA in 2026 could increase cross-border tariffs and supply chain costs.

  • NewOperational and Industry Risks

    Our business, financial condition and results of operations may be adversely affected by inflationary pressures

    Ongoing inflationary pressures have increased the cost of components, materials, labor, and freight.

  • NewOperational and Industry Risks

    Escalation of geopolitical tensions or military conflict involving the United States, Israel, and Iran, or in the broader Middle East, could adversely affect our business, results of operations, and financial condition

    Geopolitical conflict in the Middle East could disrupt energy supplies and increase logistics and petrochemical costs.

  • NewOperational and Industry Risks

    increased volatility in foreign exchange rates, interest rates, and overall macroeconomic conditions

  • NewOperational and Industry Risks

    Our business may be adversely affected by our exposure to the data center market, which is subject to rapid technological change, customer concentration, and cyclical demand

    Exposure to the data center market subjects the company to customer concentration, pricing pressure, and rapid technological changes.

  • NewFinancial Risks

    We have recorded a significant amount of long-lived assets, goodwill, and other intangible assets, which may become impaired in the future. Future impairment of these assets could have a material adverse effect on our financial condition and results of operations

    Declining profitability could result in non-cash impairment charges on long-lived assets, goodwill, and intangible assets.

  • NewFinancial Risks

    The value of our deferred tax assets may not be realized, which could materially and adversely affect our financial position and operating results

    A reduction in deferred tax assets could require a valuation allowance adjustment and a material non-cash charge.

  • NewLegal, Regulatory and Compliance Risks

    We have been, and in the future may be, subject to government investigations and inquiries which may harm our business and results of operations

    SEC subpoenas regarding foreign operations and accounting led to an investigation that concluded without enforcement recommendations in May 2026.

Dropped

  • DroppedOperational and Industry Risks

    Our business, financial condition and results of operations may be adversely impacted by the effects of inflation

  • DroppedFinancial Risks

    We have recognized significant impairment charges for our goodwill and may be required to recognize additional impairment charges in the future for goodwill and other intangible assets. Future impairment of these assets could have a material adverse impact on our financial condition and results of operations

  • DroppedFinancial Risks

    If we fail to maintain proper and effective internal controls over financial reporting, our financial results may not be accurately reported

Reworded

  • 84% rewrittenOperational and Industry Risks

    Changes in EV demand have affected and could continue to affect our business

    Updated to note that OEMs significantly deferred or cancelled EV programs, leading the company to pursue price adjustments and commercial recoveries.

    Was: Changes in EV demand could affect our business

  • 61% rewrittenOperational and Industry Risks

    We operate our business on a global basis and changes to trade policy, including tariffs and customs regulations, could have a material and adverse effect on our business

    Added that the U.S. administration imposed extensive new tariffs in 2025, raising global tariff levels substantially.

  • 52% rewrittenFinancial Risks

    Changes in our effective tax rate may adversely affect our results of operations

    Retained substantially the same language regarding tax law changes and effective tax rates.

    Was: Changes in our effective tax rate may adversely impact our results of operations

  • 47% rewrittenTechnology and Intellectual Property Risks

    We may be unable to keep pace with rapid technological changes, which could adversely affect our business, financial condition and results of operations

    Retained the same description of risks from rapid technological changes in electronic components.

  • 43% rewrittenLegal, Regulatory and Compliance Risks

    We are, and in the future may be, subject to securities class action and other litigation, which may harm our business and results of operations

    Changed references from 'shareholder' to 'stockholder' regarding the August 26, 2024 class action lawsuit.

    Was: We are, and in the future may be, subject to securities class action and other litigation, as well as government investigations and inquiries, which may harm our business and results of operations

  • 39% rewrittenOperational and Industry Risks

    The loss or insolvency of our major customers, or a significant decline in the volume of products purchased by these customers, would adversely affect our future results

    Disclosed that the five largest customers accounted for 41% of net sales in fiscal 2026, up from 36% in fiscal 2025.

  • 30% rewrittenFinancial Risks

    We have incurred indebtedness, and our level of indebtedness and restrictions under our indebtedness could adversely affect our operations and liquidity and impair our ability to respond to changing business and economic conditions

    Specified that the $400 million revolving credit facility matures on October 31, 2027.

  • 28% rewrittenOperational and Industry Risks

    Our inability, or our customers’ inability, to effectively manage the timing, quality and cost of new program launches could adversely affect our financial performance

    Retained the same risks regarding the management of timing, quality, and costs for new program launches.

  • 24% rewrittenOperational and Industry Risks

    We are susceptible to trends and factors affecting the automotive, commercial vehicle, data center and construction industries

    Was: We are susceptible to trends and factors affecting the automotive, commercial vehicle and construction industries

  • 21% rewrittenOperational and Industry Risks

    We manage our business based on projected future sales volume, which is highly dependent on information received from customers and third-party market data, and any inaccuracies or changes in such information could adversely affect our business, results of operations and financial condition

    Was: We manage our business based on projected future sales volume, which is highly dependent on information received from customers and general market data, and any inaccuracies or changes in such information could adversely affect our business, results of operations and financial condition

All 43 risk factors

Headings as the filing states them, in filing order.

Operational and Industry Risks

  1. 01We are susceptible to trends and factors affecting the automotive, commercial vehicle, data center and construction industries24% rewritten
  2. 02Our inability, or our customers’ inability, to effectively manage the timing, quality and cost of new program launches could adversely affect our financial performance28% rewritten
  3. 03Changes in EV demand have affected and could continue to affect our business84% rewritten
  4. 04We manage our business based on projected future sales volume, which is highly dependent on information received from customers and third-party market data, and any inaccuracies or changes in such information could adversely affect our business, results of operations and financial condition21% rewritten
  5. 05Our customers may cancel their orders, change production quantities (take rates) or locations or delay production
  6. 06We operate our business on a global basis and changes to trade policy, including tariffs and customs regulations, could have a material and adverse effect on our business61% rewritten
  7. 07The potential expiration, renegotiation, or modification of the United States–Mexico–Canada Agreement (USMCA) could adversely affect our business, financial condition and results of operationsNew
  8. 08Our inability to attract or retain key employees and a highly skilled workforce may have an adverse effect on our business, financial condition and results of operations
  9. 09Our business, financial condition and results of operations may be adversely affected by inflationary pressuresNew
  10. 10We are dependent on the availability and price of raw materials
  11. 11The loss or insolvency of our major customers, or a significant decline in the volume of products purchased by these customers, would adversely affect our future results39% rewritten
  12. 12The inability of our supply chain, or the supply chain of our customers, to deliver key components could materially adversely affect our business, financial condition and results of operations and cause us to incur significant cost increases
  13. 13The global nature of our operations subjects us to political, economic and social risks that could adversely affect our business, financial condition and results of operations
  14. 14risk of governmental expropriation of our property
  15. 15Escalation of geopolitical tensions or military conflict involving the United States, Israel, and Iran, or in the broader Middle East, could adversely affect our business, results of operations, and financial conditionNew
  16. 16increased volatility in foreign exchange rates, interest rates, and overall macroeconomic conditionsNew
  17. 17A catastrophic event or other significant business interruption at any of our facilities could adversely affect our business, financial condition and results of operations
  18. 18Future price reductions and increased quality standards may reduce our profitability and have a material adverse effect on our business, financial condition and results of operations
  19. 19Our businesses and the markets in which we operate are highly competitive and constantly evolving. If we are unable to compete effectively, our sales and profitability could decline
  20. 20Our ability to market our automotive and commercial vehicle products is subject to a lengthy sales cycle, which requires significant investment prior to reporting significant sales revenues, and there is no assurance that our products will be implemented in any particular vehicle
  21. 21Our supply agreements with our OEM customers do not contain guaranteed volumes, and a decline in the production requirements of any of our customers, and in particular our largest customers, could adversely affect our revenues and profitability
  22. 22Our business may be adversely affected by our exposure to the data center market, which is subject to rapid technological change, customer concentration, and cyclical demandNew
  23. 23Part of our workforce is unionized which could subject us to work stoppages
  24. 24Our inability to capitalize on prior or future acquisitions or any decision to strategically divest one or more current businesses may adversely affect our business, financial condition and results of operations
  25. 25further penetrate new and existing markets with the product capabilities we may acquire
  26. 26unduly burden other resources in our company

Financial Risks

  1. 27We have incurred indebtedness, and our level of indebtedness and restrictions under our indebtedness could adversely affect our operations and liquidity and impair our ability to respond to changing business and economic conditions30% rewritten
  2. 28Variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase
  3. 29Restructuring activities may lead to additional costs and material adverse effects
  4. 30We have recorded a significant amount of long-lived assets, goodwill, and other intangible assets, which may become impaired in the future. Future impairment of these assets could have a material adverse effect on our financial condition and results of operationsNew
  5. 31We have risks associated with inventory
  6. 32A significant fluctuation between the U.S. dollar and other currencies could adversely affect our business, results of operations and financial condition
  7. 33Changes in our effective tax rate may adversely affect our results of operations52% rewritten
  8. 34Our judgments regarding the accounting for tax positions and the resolution of tax disputes may affect our results of operations and financial condition
  9. 35The value of our deferred tax assets may not be realized, which could materially and adversely affect our financial position and operating resultsNew

Legal, Regulatory and Compliance Risks

  1. 36We are, and in the future may be, subject to securities class action and other litigation, which may harm our business and results of operations43% rewritten
  2. 37We have been, and in the future may be, subject to government investigations and inquiries which may harm our business and results of operationsNew
  3. 38Products we manufacture may contain design or manufacturing defects that could result in reduced demand for our products or services and warranty liability claims against us
  4. 39We are subject to government regulations, including EHS laws and regulations, that expose us to potential financial liability
  5. 40An emphasis on environmental matters by various stakeholders could adversely affect our business and results of operations

Technology and Intellectual Property Risks

  1. 41Our operations could be negatively affected by IT service interruptions, data corruption or misuse, cyber-based attacks, or network security breaches
  2. 42We may be unable to keep pace with rapid technological changes, which could adversely affect our business, financial condition and results of operations47% rewritten
  3. 43If we are unable to protect our intellectual property or we infringe, or are alleged to infringe, on another person’s intellectual property, our competitive position and results of operations may be adversely affected

Other Methode Electronics 10-Ks

  • FY2025 10-K risk factors
    38 risks

    The company relies heavily on the automotive and EV markets, facing risks from changing adoption rates, customer concentration, and substantial debt.

    Filed Jul 09, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.