METHODE ELECTRONICS INC Leases Disclosure
Note 16. Leases
The Company leases real estate, automobiles and certain equipment under both operating and finance leases. The Company does not have any significant arrangements where it is the lessor. The majority of the Company’s global lease portfolio represents leases of real estate, such as manufacturing facilities, warehouses and buildings. As of May 2, 2026, the Company’s leases have remaining lease terms of up to 27.34 years, some of which include optional renewals or terminations, which are considered in the Company’s assessments when such options are reasonably certain to be exercised. Any variable payments related to the lease will be recorded as
lease expense when and as incurred. The Company’s lease payments are largely fixed. As of May 2, 2026, the operating leases that the Company has signed but have not yet commenced are immaterial.
In addition to the operating lease assets presented on the consolidated balance sheets, assets under finance leases of $0.4 million and $0.5 million are included in on the consolidated balance sheets as of May 2, 2026 and May 3, 2025, respectively. Finance lease obligations were $0.4 million and $0.5 million as of May 2, 2026 and May 3, 2025, respectively, and are split between for the short-term portion and for the long-term portion on the consolidated balance sheets. The Company had an immaterial amount of finance lease expense in the years ended May 2, 2026 and May 3, 2025.
In fiscal 2026, the Company entered into a sublease agreement to exit its corporate headquarters in Chicago, Illinois, resulting in a ROU asset impairment charge of $0.6 million.
The components of lease expense were as follows:
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Fiscal Year Ended |
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May 2, 2026 |
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May 3, 2025 |
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April 27, 2024 |
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(in millions) |
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(52 Weeks) |
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(53 Weeks) |
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(52 Weeks) |
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Lease cost: |
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Operating lease cost |
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$ |
8.5 |
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|
$ |
9.9 |
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$ |
10.6 |
|
Variable lease cost |
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0.7 |
|
|
|
2.0 |
|
|
|
1.7 |
|
Total lease cost |
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$ |
9.2 |
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|
$ |
11.9 |
|
|
$ |
12.3 |
|
Supplemental cash flow and other information related to operating leases was as follows:
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Fiscal Year Ended |
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May 2, 2026 |
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May 3, 2025 |
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April 27, 2024 |
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(52 Weeks) |
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(53 Weeks) |
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(52 Weeks) |
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Operating cash flows: |
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Cash paid related to operating lease obligations, including lease termination payment (in millions) |
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$ |
9.2 |
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$ |
9.3 |
|
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$ |
9.6 |
|
Non-cash activity: |
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Right-of-use assets obtained in exchange for lease obligations (in millions) |
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$ |
4.6 |
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$ |
6.4 |
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$ |
6.7 |
|
Weighted-average remaining lease term (years) |
|
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3.4 |
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|
3.9 |
|
|
|
4.6 |
|
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Weighted-average discount rate |
|
|
5.4 |
% |
|
|
5.5 |
% |
|
|
5.4 |
% |
Maturities of operating lease liabilities as of May 2, 2026, are shown below:
(in millions) |
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Fiscal Year: |
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|
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2027 |
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$ |
9.3 |
|
2028 |
|
|
6.9 |
|
2029 |
|
|
3.5 |
|
2030 |
|
|
1.7 |
|
2031 |
|
|
1.8 |
|
Thereafter |
|
|
1.8 |
|
Total Lease Payments |
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|
25.0 |
|
Less: Imputed Interest |
|
|
(2.2 |
) |
Present Value of Lease Liabilities |
|
$ |
22.8 |
|
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Jun 24, 2026 | Showing above |
| 2024 | Jul 11, 2024 | |
| 2023 | Jun 27, 2023 | |
| 2022 | Jun 23, 2022 | |
| 2021 | Jun 24, 2021 | |
| 2020 | Jun 30, 2020 | |
| 2018 | Jun 21, 2018 | |
| 2017 | Jun 22, 2017 | |
| 2016 | Jun 23, 2016 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.