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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended May 2, 2009

Commission File Number 0-2816

METHODE ELECTRONICS, INC.

(Exact name of Registrant as specified in its charter)

Registrant’s telephone number (including area code):  (708) 867-6777

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

None

(Title of Class)

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o     No x

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o     No x

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x    No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes o    No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).   Yes   o    No    x

The aggregate market value of common stock, $0.50 par value, held by non-affiliates of the Registrant on November 1, 2008, based upon the average of the closing bid and asked prices on that date as reported by the New York Stock Exchange was $278.5 million.

Registrant had 38,174,261 shares of common stock, $0.50 par value, outstanding as of July 1, 2009.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the proxy statement for the annual shareholders meeting to be held September 17, 2009 are incorporated by reference into Part III.

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METHODE ELECTRONICS, INC.

FORM 10-K

May 2, 2009

TABLE OF CONTENTS

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PART I

Item 1.  Business

Methode Electronics, Inc. was incorporated in 1946 as an Illinois corporation and reincorporated in Delaware in 1966.  As used herein, “we,” “us,” “our,” the “Company” or “Methode” mean Methode Electronics, Inc. and its subsidiaries.

We are a global designer and manufacturer of electro-mechanical devices.  We design, manufacture and market devices employing electrical, radio remote control, electronic, wireless, sensing and optical technologies.  Our components are found in the primary end markets of the aerospace, appliance, automotive, consumer and industrial equipment markets, communications (including information processing and storage, networking equipment, wireless and terrestrial voice/data systems), rail and other transportation industries.

On September 30, 2008, we acquired certain assets of Hetronic LLC (Hetronic) for $53.6 million in cash.  We also incurred $2.4 million in transaction costs related to the purchase.  Hetronic is a global leader in industrial safety radio remote controls with locations in the U.S., Malta, the Philippines and Germany.  Hetronic is represented in 45 countries by direct sales associates, licensed partners, distributors and representatives.  Hetronic provides application specific and standard controls to many different industries, such as material handling, transportation, mining, military, agriculture and construction.  The accounts and transactions of Hetronic have been included in the Interconnect segment in the Consolidated Financial Statements from the effective date of the acquisition.

Our business has been and will likely continue to be materially adversely affected by the current economic environment, particularly as it impacts the automotive industry.  The disruptions in global financial and credit markets have significantly impacted global economic activity and led to an economic recession.  As a result of these disruptions, our customers and markets have been adversely affected.  We have experienced a significant drop in sales in all our reporting segments.  If demand for our products continues to decline, our business, results of operations and financial condition could be materially adversely affected.  If we are unable to successfully anticipate changing economic and financial conditions, we may be unable to effectively plan for and respond to these changes and our business could be adversely affected.

We have recorded and may record additional impairment charges which would adversely impact our results of operations.  We review our goodwill and other intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable, and we also review our goodwill annually in accordance with Statement of Financial Accounting Standards, (SFAS) No. 142, “Goodwill and Other Intangibles”.  The values assigned to goodwill and intangible assets are normally based on estimates and judgments regarding expectations for the success and life cycle of products and technologies acquired.  A decline in expectations, future cash flows, a change in strategic direction or our market capitalization remaining below our net book value for a significant additional period of time could result in further significant impairment charges, which could have a material adverse effect on our financial condition and results of operations.  See Note 4 to our Consolidated Financial Statements for additional information regarding our goodwill and other intangible asset impairment charges.

On March 12, 2009, we announced several additional restructuring actions to further reduce our exposure to the North American automotive industry and to consolidate manufacturing facilities in lower cost regions to reduce costs.  After these actions, our principal manufacturing operations will be in Mexico, Malta and China.  In addition, we have decided to transfer certain new General Motors (GM) business to other suppliers.  This business was scheduled to be produced in our Shanghai, China automotive facility.

All Ford Motor Company production at our Reynosa, Mexico facility is being moved to another supplier.  TouchSensor manufacturing currently in west suburban Chicago, Illinois will be moved to Monterrey, Mexico.  Additionally, our operations in Shanghai, China will be consolidated to two facilities from three.

In total, this additional restructuring will affect approximately 850 employees worldwide. We estimate that we will record a pre-tax charge between $16.0 million and $25.0 million, during fiscal 2009 and 2010. The cash portion of this charge is estimated between $7.0 million and $8.0 million.  During the fiscal year ended May 2, 2009, we recorded a restructuring charge of $7.3 million, which consisted of $0.1 million for employee severance, $1.4 million for impairment and accelerated depreciation for buildings and improvements and machinery and equipment,

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Item 1.  Business - Continued

$5.4 million for customer funded tooling and $0.1 in forfeited security deposits related to the cancellation of the new GM business and $0.3 million relating to professional fees.  We estimate that we will record pre-tax restructuring charges in fiscal 2010 between $8.7 million and $17.7 million.  See Note 2 to our Consolidated Financial Statements for additional information regarding the March 2009 restructuring.

On January 24, 2008, we announced a restructuring of our U.S.-based automotive operations and a decision to discontinue producing certain legacy products in the Interconnect segment.  The Automotive and Interconnect segment restructuring is expected to be completed during fiscal 2010.  On January 24, 2008, the total pre-tax charges were estimated to be between $19.0 million and $25.0 million.  Through May 2, 2009, we have recorded $23.2 million of charges, of which $18.0 million was recorded during fiscal 2009.  We estimate that we will record pre-tax restructuring charges in fiscal 2010 between $0.5 million and $1.5 million, of which $0.5 million will relate to the termination of approximately 225 employees and the cost of one-time employee benefits, retention, COBRA and outplacement services.  See Note 2 to our Consolidated Financial Statements for additional information regarding the January 2008 restructuring.

We maintain our financial records on the basis of a fifty-two or fifty-three week fiscal year ending on the Saturday closest to April 30.  Due to the timing of our fiscal calendar, the fiscal year ended May 2, 2009 represents 52 weeks of results, the fiscal year ended May 3, 2008 represents 53 weeks of results and the fiscal year ended April 28, 2007 represents 52 weeks of results.

Segments.  Our business is managed and our financial results are reported on a segment basis, with those segments being Automotive, Interconnect, Power Products and Other.

The Automotive segment supplies electronic and electromechanical devices and related products to automobile OEMs, either directly or through their tiered suppliers, including control switches for electrical power and signals, connectors for electrical devices, integrated control components, switches and sensors that monitor the operation or status of a component or system, and packaging of electrical components.

The Interconnect segment provides a variety of copper and fiber-optic interconnect and interface solutions for the aerospace, appliance, commercial, computer, construction, consumer, material handling, medical, military, mining, networking, storage, and telecommunications markets.  Solutions include connectors, conductive polymer, thick film inks, custom cable assemblies, industrial safety radio remote controls, solid-state field effect interface panels, optical and copper transceivers, PC and express card packaging and terminators.  Services include the design and installation of fiber optic and copper infrastructure systems, and manufacturing active and passive optical components.

The Power Products segment manufactures braided flexible cables, current-carrying laminated bus devices, custom power-product assemblies, high-current low voltage flexible power cabling systems and powder coated bus bars that are used in various markets and applications, including aerospace, computers, industrial and power conversion, insulated gate bipolar transistor solutions, military, telecommunications, and transportation.

The Other segment includes a designer and manufacturer of magnetic torque sensing products, and independent laboratories that provide services for qualification testing and certification, and analysis of electronic and optical components.

Financial results by segment are summarized in Note 13 to the Consolidated Financial Statements.

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Item 1.  Business - Continued

Sales.  The following table reflects the percentage of net sales of the segments of the Company for the last three fiscal years.

Our sales activities are directed by sales managers who are supported by field application engineers and other engineering personnel who work with customers to design our products into their systems.  Our field application engineers also help us identify emerging markets and new products.  Our products are sold through in-house sales staff and through independent manufacturers’ representatives with offices throughout the world.  Information about our sales and operations in different geographic regions is summarized in Note 13 to the Consolidated Financial Statements.  Sales are made primarily to OEMs, either directly or through their tiered suppliers as well as selling partners and distributors.

Sources and Availability of Raw Materials.  Principal raw materials that we purchase include coil and bar stock, die castings, ferrous and copper alloy sheet, glass, plastic molding materials, precious metals, semiconductor components, silicon and urethane.  All of these items are available from several suppliers and we generally rely on more than one supplier for each item.  We have not experienced any significant shortages of raw materials and normally do not carry inventories of raw materials or finished products in excess of those reasonably required to meet production and shipping schedules.  We did experience significant price increases in fiscal 2008 and 2007 for copper, precious metals and petroleum-based raw materials.

Patents; Licensing Agreements.  We have numerous United States and foreign patents and license agreements covering certain of our products and manufacturing processes, several of which are considered significant to our business.   Our ability to compete effectively with other companies depends, in part, on our ability to maintain the proprietary nature of our technology. Although we have been awarded, have filed applications for, or have been licensed under numerous patents in the United States and other countries, there can be no assurance concerning the degree of protection afforded by these patents or the likelihood that pending patents will be issued.

Seasonality.  A significant portion of our business is dependent on automotive sales and the vehicle production schedules of our customers.  The automotive market is cyclical and depends on general economic conditions, interest rates, fuel prices and consumer spending patterns.  During fiscal 2009, we experienced significantly lower automotive sales due to the global recession.  Also in fiscal 2009, we significantly reduced shipments to Chrysler, LLC (“Chrysler”) due to our decision to exit unprofitable or marginally profitable legacy business and we are transferring some Ford business from our Reynosa, Mexico facility to other suppliers.  In addition, new GM business from our Shanghai, China facility will be transferred to other suppliers during the first quarter of fiscal 2010.  This loss of business will affect our U.S. automotive results in future periods.  Traditionally, in prior fiscal years, our business was moderately seasonal as our North American automotive customers historically halt operations for approximately two weeks in July for model changeovers and one to two weeks during the December holiday period.   During the second half of fiscal 2009, we experienced additional customer plant shutdowns due to lower demand for their products.  Accordingly, if we experience additional shutdowns, future quarterly results may be affected.

Material Customers.  During the fiscal year ended May 2, 2009, shipments to Ford and Delphi Corporation (“Delphi”), each represented approximately 10% or greater of consolidated net sales and, in the aggregate, amounted to approximately 28.5% of consolidated net sales.  Such shipments included a wide variety of our automotive component products.

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Backlog. Our backlog of orders was approximately $66.7 million at May 2, 2009, and $120.6 million at May 3, 2008.  It is expected that most of the total backlog at May 2, 2009 will be shipped within fiscal 2010.

Competitive Conditions.  The markets in which we operate are highly competitive and characterized by rapid changes due to technological improvements and developments.  We compete with a large number of other manufacturers in each of our product areas; many of these competitors have greater resources and sales.  Price, service and product performance are significant elements of competition in the sale of our products.

Research and Development.  We maintain a research and development program involving a number of professional employees who devote a majority of their time to the development of new products and processes and the advancement of existing products.  Senior management of our Company participates directly in the program.  Expenditures for such activities amounted to $22.0 million, $25.6 million and $21.3 million for fiscal 2009, 2008 and 2007, respectively.

Environmental Quality.  Compliance with foreign, federal, state and local provisions regulating the discharge of materials into the environment has not materially affected our capital expenditures, earnings or our competitive position.  Currently, we do not have any environmental related lawsuits or material administrative proceedings pending against us.  Further information as to environmental matters affecting us is presented in Note 9 to the Consolidated Financial Statements.

Employees.  At May 2, 2009 and May 3, 2008, we had 2,876 and 3,580 employees, respectively.  We also from time to time employ part-time employees and hire independent contractors.  As of May 2, 2009 our employees from our Malta and Mexico facilities, which account for about 45% of the total number of employees, are represented by a collective bargaining agreement.  We have never experienced a work stoppage and we believe that our employee relations are good.

Segment Information and Foreign Sales.  Information about our operations by segment and in different geographic regions is summarized in Note 13 to the Consolidated Financial Statements.

Available Information.  We are subject to the informational requirements of the Securities Exchange Act of 1934 (Exchange Act) and file periodic reports, proxy statements and other information with the Securities and Exchange Commission (SEC). Such reports may be obtained by visiting the Public Reference Room of the SEC at 100 F Street, NE, Washington, D.C. 20549, or by calling the SEC at (800) SEC-0330. In addition, the SEC maintains an internet site (www.sec.gov) that contains reports, proxy and information statements and other information.

Financial and other information can also be accessed on the investor section of our website at www.methode.com. We make available, free of charge, copies of our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after filing such material electronically or otherwise furnishing it to the SEC.   Also posted on our website are the Company’s Corporate Governance Guidelines, Code of Conduct and the charters of the Audit Committee, Compensation Committee, Nominating and Governance Committee and Technology Committee. Copies of these documents are also available free of charge by sending a request to Methode Electronics, Inc., 7401 West Wilson Avenue, Chicago, Illinois 60706, Attention: Investor Relations Department.  Information on our website is not incorporated into this Form 10-K or our other securities filings and is not a part of them.

Certifications.  As required by the rules and regulations of the New York Stock Exchange (“NYSE”), we delivered to the NYSE a certification signed by our Chief Executive Officer, Donald W. Duda, certifying that Mr. Duda was not aware of any violation by the Company of the NYSE’s corporate governance listing standards as of October 20, 2008.

As required by the rules and regulations of the SEC, the Sarbanes-Oxley Act Section 302 certifications regarding the quality of our public disclosures are filed as exhibits to this Annual Report on Form 10-K.

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Item 1A.  Risk Factors

Certain statements in this report are forward-looking statements that are subject to certain risks and uncertainties.  We undertake no duty to update any such forward-looking statements to conform to actual results or changes in our expectations.  Our business is highly dependent upon two large automotive customers and specific makes and models of automobiles.  Our results will be subject to many of the same risks that apply to the automotive, appliance, computer and telecommunications industries, such as general economic conditions, interest rates, consumer spending patterns and technological changes.   Other factors, which may result in materially different results for future periods, include the following risk factors.  These risk factors should be considered in connection with evaluating the forward-looking statements contained in this report because these factors could cause our actual results and condition to differ materially from those projected in forward-looking statements.  The forward-looking statements in this report are subject to the safe harbor protection provided under the securities laws and are made as of the date of this report.  We undertake no duty to update any such forward-looking statements.

We depend on a small number of large customers.  If we were to lose any of these customers or any of these customers decreased the number of orders it placed, or if any of the customers declare bankruptcy, our future results could be adversely affected.

During the year ended May 2, 2009, shipments to Ford and Delphi, each represented 10% or greater of consolidated net sales and, in the aggregate, amounted to approximately 28.5% of consolidated net sales.  It is expected that in fiscal 2010, we will significantly reduce sales to Ford in North America due to our decision to transfer business from our Reynosa, Mexico facility to other suppliers.  The exit of this business will affect our U.S. automotive segment results in future periods.  The loss of all or a substantial portion of the sales to Delphi, which has been in bankruptcy since October 2005, could have a material adverse effect on our sales, margins, profitability and, as a result, our share price.  The Company is involved in certain disputes with Delphi, which could have an adverse impact on the Company’s future sales to Delphi. The contracts we have entered into with many of our customers provide for supplying the customers’ requirements for a particular model, rather than for manufacturing a specific quantity of products. Such contracts range from one year to the life of the model, which is generally three to seven years. Therefore, the loss of a contract for a major model or a significant decrease in demand for certain key models or group of related models sold by Ford or Delphi could have a material adverse impact on our results of operations and financial condition. We also compete to supply products for successor models and are subject to the risk that Ford or Delphi will not select us to produce products on any such model, which could have a material adverse impact on our results of operations and financial condition.

In addition, we have significant receivable balances related to these customers and other major customers that would be at risk in the event of their bankruptcy.  Due to the financial stresses within the worldwide automotive industry, certain automakers and tiered customers have already declared bankruptcy or may be considering bankruptcy.

Because we derive a substantial portion of our revenues from customers in the automotive, appliance, computer and communications industries, we are susceptible to trends and factors affecting those industries.

Our components are found in the primary end markets of the automotive, communications (including information processing and storage, networking equipment, wireless and terrestrial voice/data systems), aerospace, rail and other transportation industries, appliances and the consumer and industrial equipment markets.  Factors negatively affecting these industries and the demand for products also negatively affect our business, financial condition and operating results. Recently, we have experienced slow-downs in all segments due to the recession.  Any adverse occurrence, including additional industry slowdown, recession, rising interest rates, political instability, costly or constraining regulations, armed hostilities, terrorism, excessive inflation, prolonged disruptions in one or more of our customers’ production schedules or labor disturbances, that results in significant decline in the volume of sales in these industries, or in an overall downturn in the business and operations of our customers in these industries, could materially adversely affect our business, financial condition and operating results.

Our business is cyclical and seasonal in nature and further downturns in the automotive industry could reduce the sales and profitability of our business.

A large portion of our business is dependent on automotive sales and the vehicle production schedules of our customers.  The automotive market is cyclical and depends on general economic conditions, interest rates and consumer spending patterns.  Any significant reduction in vehicle production by our customers would have a

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Item 1A.  Risk Factors - Continued

material adverse effect on our business.  During fiscal 2009, we experienced significantly lower automotive sales due to the global recession.  Also in fiscal 2009, we significantly reduced shipments to Chrysler due to our decision to exit unprofitable or marginally profitable legacy business and we are transferring some Ford business from our Reynosa, Mexico facility to other suppliers during the first quarter of fiscal 2010.  In addition, we are in the process of transferring new GM business from our Shanghai, China facility to other suppliers, which is expected to be completed during the first quarter of fiscal 2010.  The loss of business will affect our U.S. automotive results in future periods.  Traditionally, in prior fiscal years, our business was moderately seasonal as our North American automotive customers historically halt operations for approximately two weeks in July for model changeovers and one to two weeks during the December holiday period.   During the second half of fiscal 2009, we experienced additional customer plant shutdowns due to lower demand for their products.  Accordingly, if we experience additional shutdowns, quarterly results may be affected.

If we are unable to protect our intellectual property or we infringe, or are alleged to infringe, on another person’s intellectual property, our business, financial condition and operating results could be materially adversely affected.

We have numerous United States and foreign patents and license agreements covering certain of our products and manufacturing processes, several of which are considered material to our business.  Our ability to compete effectively with other companies depends, in part, on our ability to maintain the proprietary nature of our technology. Although we have been awarded, have filed applications for, or have been licensed under numerous patents in the United States and other countries, there can be no assurance concerning the degree of protection afforded by these patents or the likelihood that pending patents will be issued.  The loss of any significant patents and trade secrets could adversely affect our sales, margins, profitability and, as a result, share price.

We may become involved in litigation in the future to protect our intellectual property or because others may allege that we infringe on their intellectual property. These claims and any resulting lawsuit could subject us to liability for damages and invalidate our intellectual property rights. If an infringement claim is successfully asserted by a holder of intellectual property rights, we may be required to cease marketing or selling certain products, pay a penalty for past infringement and spend significant time and money to develop a non-infringing product or process or to obtain licenses for the technology, process or information from the holder. We may not be successful in the development of a non-infringing alternative, or licenses may not be available on commercially acceptable terms, if at all, in which case we may lose sales and profits. In addition, any litigation could be lengthy and costly and could materially adversely affect us even if we are successful in the litigation.

We face risks relating to our international operations.

Because we have significant international operations, our operating results and financial condition could be adversely affected by economic, political, health, regulatory and other factors existing in foreign countries in which we operate. Our international operations are subject to inherent risks, which may adversely affect us, including: fluctuations in exchange rates; political and economic instability in countries in which our products are manufactured; expropriation, or the imposition of government controls; changes in government regulations; export license requirements; trade restrictions; earnings expatriation restrictions; exposure to different legal standards; less favorable intellectual property laws; health conditions and standards; currency controls; increases in the duties and taxes we pay; high levels of inflation or deflation; greater difficulty in collecting our accounts receivable and longer payment cycles; changes in labor conditions and difficulties in staffing and managing our international operations; limitations on insurance coverage against geopolitical risks, natural disasters and business operations; and communication among and management of international operations. In addition, these same factors may also place us at a competitive disadvantage to some of our foreign competitors.

We cannot assure you that the newly acquired Hetronic business will be successful or that we can implement and profit from any new applications of the acquired technology.

We acquired Hetronic on September 30, 2008.  As a result of this acquisition, we now design and manufacture industrial safety radio remote controls that are used primarily in the material handling, transportation, mining, military, agriculture and construction industries.  The current economic recession has had an adverse effect on the Hetronic business and our operating results.  Also, the market for safety radio remote controls is competitive

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and rapidly changing.  If we do not keep pace with technological innovations in the industry, our products may not be competitive and our revenue and operating results may suffer.  Furthermore, while we intend to expand the Hetronic business by integrating the technology into additional automotive and other applications, we can make no guarantee that such ventures will be successful or profitable.

Our technology-based business and the markets in which we operate are highly competitive.  If we are unable to compete effectively, our sales will decline.

The markets in which we operate are highly competitive and characterized by rapid changes due to technological improvements and developments.  We compete with a large number of other manufacturers in each of our product areas; many of these competitors have greater resources and sales.  Price, service and product performance are significant elements of competition in the sale of our products.  Competition may intensify further if more companies enter the markets in which we operate. Our failure to compete effectively could materially adversely affect our business, financial condition and operating results.

We may acquire businesses or divest business operations. These transactions may pose significant risks and may materially adversely affect our business, financial condition and operating results.

We intend to explore opportunities to acquire other businesses or technologies that could complement, enhance or expand our current business or product lines or that might otherwise offer growth opportunities. Any transactions that we are able to identify and complete may involve a number of risks, including: the diversion of our management’s attention from our existing business to integrate the operations and personnel of the acquired or combined business or joint venture; possible adverse effects on our operating results during the integration process; and our possible inability to achieve the intended objectives of the transaction. In addition, we may not be able to successfully or profitably integrate, operate, maintain and manage our newly acquired operations or employees. We may not be able to maintain uniform standards, controls, procedures and policies, and this may lead to operational inefficiencies. In addition, future acquisitions may result in dilutive issuances of equity securities, a reduction of cash or the incurrence of debt.

We have in the past, and may in the future, consider divesting certain business operations. Divestitures may involve a number of risks, including the diversion of management’s attention, significant costs and expenses, the loss of customer relationships and cash flow, and the disruption of operations in the affected business. Failure to timely complete a divestiture or to consummate a divestiture may negatively affect valuation of the affected business or result in restructuring charges.

We may be unable to keep pace with rapid technological changes, which would adversely affect our business.

The technologies relating to some of our products have undergone, and are continuing to undergo, rapid and significant changes. Specifically, end markets for electronic components and assemblies are characterized by technological change, frequent new product introductions and enhancements, changes in customer requirements and emerging industry standards.  These changes could render our existing products unmarketable before we can recover any or all of our research, development and other expenses. Furthermore, the life cycles of our products vary, may change and are difficult to estimate. If we are unable, for technological or other reasons, to develop and market new products or product enhancements in a timely and cost-effective manner, our business, financial condition and operating results could be materially adversely affected.

Products we manufacture may contain design or manufacturing defects that could result in reduced demand for our products or services and liability claims against us.

Despite our quality control and quality assurance efforts, defects may occur in the products we manufacture due to design or manufacturing errors or component failure. Product defects may result in delayed shipments and reduced demand for our products. We may be subject to increased costs due to warranty claims on defective products. Product defects may result in product liability claims against us where defects cause, or are alleged to cause, property damage, bodily injury or death. We may be required to participate in a recall involving products that are, or are alleged to be, defective. We carry insurance for certain legal matters involving product liability, however, we do not have coverage for all costs related to product defects and the costs of such claims, including costs of

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defense and settlement, may exceed our available coverage.

We are dependent on the availability and price of raw materials.

We require substantial amounts of raw materials, including petroleum-based products, glass, copper and precious metals, and all raw materials we require are purchased from outside sources. The availability and prices of raw materials may be subject to curtailment or change due to, among other things, new laws or regulations, suppliers’ allocations to other purchasers, interruptions in production by suppliers, changes in exchange rates and worldwide price levels. Any change in the supply of, or price for, these raw materials could materially affect our results of operations and financial condition.   We did experience price increases in fiscal 2008 and 2007 for copper, precious metals and petroleum-based raw materials.

Because we derive approximately 57% of our revenues from customers in the automotive segment, rising oil prices could adversely affect future results.

A large portion of our revenue is derived from parts and components that are provided in our customers’ less fuel-efficient vehicles.  Increasing oil and gasoline prices have, and, are expected to continue to negatively affect the sales of those vehicles in the future, which could negatively impact our future automotive revenue.

We have and may continue to incur additional significant restructuring charges that will adversely affect our results of operations.

Due to the economic downturn, we have incurred $25.3 million in restructuring charges in fiscal 2009, and we expect to incur $9.2 million to $19.2 million of restructuring charges in fiscal 2010.  This will have an adverse effect on our financial condition and results of operations.  If economic conditions worsen, we could have additional restructuring efforts in addition to those mentioned above.

We may incur additional goodwill and other asset impairments.

Our business has been and may continue to be materially adversely affected by the current economic environment.  The recent disruptions in global financial and credit markets have significantly impacted global economic activity and led to an economic recession.  As a result of these disruptions, our customers and markets have been adversely affected.  We have recently experienced a significant drop in sales in all our reporting segments.  If we experience reduced demand because of these disruptions in the macroeconomic environment or other factors, our business, results of operation and financial condition could be materially adversely affected.  If we are unable to successfully anticipate changing economic and financial conditions, we may be unable to effectively plan for and respond to these changes and our business could be adversely affected.

We have recorded and may record additional impairment charges that would adversely impact our results of operations.  We review our goodwill and other assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable, and we also review our goodwill annually in accordance with SFAS No. 142, “Goodwill and Other Intangibles” as well as SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”.  The values assigned to goodwill and intangible assets are normally based on estimates and judgments regarding expectations for the success and life cycle of products and technologies acquired.  A decline in expectations, future cash flows, a change in strategic direction or our market capitalization remaining below our net book value for a significant period of time could result in significant impairment charges, which could have a material adverse effect on our financial condition and results of operations.  See Note 4 to our Consolidated Financial Statements for additional information regarding our goodwill and other asset impairment charges.

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Item 2.  Properties

We operate the following manufacturing and other facilities, all of which we believe to be in good condition and adequate to meet our current and reasonably anticipated needs:

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Item 3.  Legal Proceedings

As of July 2, 2009, we were not involved in any material legal proceedings or any legal proceedings or material administrative proceedings with governmental authorities pertaining to the discharge of materials into the environment or otherwise.

Executive Officers of the Registrant

All executive officers are elected by the Board of Directors and serve a term of one year or until their successors are duly elected and qualified.

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PART II

Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The following is a tabulation of high and low sales prices for the periods indicated as reported by the New York Stock Exchange.

On June 23, 2009, the Board declared a dividend of $0.07 per share of common stock, payable on July 31, 2009, to holders of record on July 17, 2009.

As of July 1, 2009, the number of record holders of our common stock was 636.

Equity Compensation Plan Information

The following table provides information about shares of our common stock that may be issued upon exercise of stock options or granting of stock awards under all of the existing equity compensation plans as of May 2, 2009.

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Purchase of Equity Securities by the Company and Affiliated Purchasers

(1)  The amount includes the repurchase and cancellation of shares of common stock redeemed by the Company for the payment of minimum withholding taxes on the value of restricted stock awards vesting during the period.

(2)  On September 18, 2008, the Board of Directors adopted a plan to repurchase up to 3 million shares of its common stock.  The plan will expire on May 1, 2010.

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Item 6.  Selected Financial Data

The following selected financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Company’s Consolidated Financial Statements and related notes included elsewhere in this report.  The consolidated statement of operations data for fiscal 2009, 2008 and 2007, and the consolidated balance sheet data as of May 2, 2009 and May 3, 2008, are derived from, and are qualified by reference to, the Company’s audited Consolidated Financial Statements included elsewhere in this report.  The consolidated statement of operations data for fiscal 2006 and 2005, and the consolidated balance sheet data as of April 28, 2007, April 29, 2006 and April 30, 2005, are derived from audited consolidated financial statements not included in this report.  Due to the timing of our fiscal calendar, fiscal 2008 represents 53 weeks of results.  Fiscal 2009, 2007, 2006 and 2005 represent 52 weeks of results.

(1) Fiscal 2009 results include a pre-tax charge of $94.4 million relating to goodwill and other asset impairments.  In addition, fiscal 2009 results include a pre-tax charge of $25.3 million relating to restructuring activities.  The income tax expense includes a $28.0 million valuation charge related to the uncertainty of the future realization of our deferred tax assets.

(2) Fiscal 2008 results include a pre-tax charge of $5.2 million relating to a restructuring of our U.S.-based automotive operations and the decision to discontinue producing certain legacy products in the Interconnect segment.

(3) Fiscal 2007 results include a pre-tax and an after-tax restructuring charge of $2.0 million related to the closing of our Scotland automotive parts manufacturing plant and transfer of production lines from that facility to our automotive parts manufacturing facility in Malta.

(4) Fiscal 2006 results include $4.5 million of income tax expense related to the repatriation of $38.1 million of foreign earnings for which income taxes were not previously provided, and an after-tax charge of $1.5 million ($2.3 million pre-tax) related to receivables deemed to be impaired due to the Chapter 11 bankruptcy filing by Delphi.

(5) Fiscal 2005 results include $1.0 million of tax-free income from life insurance proceeds.

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Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

We are a global manufacturer of component and subsystem devices with manufacturing, design and testing facilities in China, Czech Republic, Germany, Malta, Mexico, the Philippines, Singapore, the United Kingdom and the United States.  We are a global designer and manufacturer of electro-mechanical devices.  We design, manufacture and market devices employing electrical, radio remote control, electronic, wireless, sensing and optical technologies.  Our business is managed on a segment basis, with those segments being Automotive, Interconnect, Power Products and Other.   For more information regarding the business and products of these segments, see “Item 1. Business.”

Our components are found in the primary end markets of the aerospace, appliance, automotive, consumer and industrial equipment markets, communications (including information processing and storage, networking equipment, wireless and terrestrial voice/data systems), rail and other transportation industries.  Recent trends in the industries that we serve include:

·                  Automotive industry sales volume in the United States and European markets declined suddenly and substantially in fiscal 2009 and continue at historically low levels into fiscal 2010;

·                  The deteriorating condition of certain of our customers and the uncertainty as they undergo restructuring initiatives, including in some cases, reorganization under bankruptcy laws;

·                  Decline in demand for new houses and the over-supply of new and existing houses;

·                  Demand for construction and material handling equipment is cyclical and has been impacted by the weakness of the economy, availability of credit and higher interest rates;

Our business has been and will likely continue to be materially adversely affected by the current economic environment, particularly as it impacts the automotive industry.  The recent disruptions in global financial and credit markets have significantly impacted global economic activity and led to an economic recession.  As a result of these disruptions, our customers and markets have been adversely affected.  We have recently experienced a significant drop in sales in all of our reporting segments.  If we experience reduced demand because of these disruptions in the macroeconomic environment or other factors, our business, results of operation and financial condition could be materially adversely affected.  If we are unable to successfully anticipate changing economic and financial conditions, we may be unable to effectively plan for and respond to these changes and our business could be adversely affected.

We review our goodwill and other intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable, and we also review our goodwill annually in accordance with SFAS No. 142, “Goodwill and Other Intangibles”.  The values assigned to goodwill and intangible assets are normally based on estimates and judgments regarding expectations for the success and life cycle of products and technologies acquired.  A severe decline in expectations, future cash flows, a change in strategic direction or our market capitalization remaining below our net book value for a significant period of time could result in significant impairment charges, which could have a material adverse effect on our financial condition and results of operations.  Based on events and general business declines, we performed “step one” of the goodwill impairment test in accordance with paragraph 19 of SFAS No. 142, on the reporting units that have goodwill during fiscal 2009.  Based on this test, we determined that the fair value was less than the carrying value of the net assets for certain reporting units.  We completed  “step two” of the goodwill test and concluded that goodwill was impaired.  Therefore, during fiscal 2009, we recorded a goodwill impairment charge of $25.8 million in our Automotive segment, $30.8 million in our Interconnect segment, $5.4 million in our Power Products segment and $1.2 million in our Other segment for a total of $63.2 million related to these assets.

Also, in accordance with FASB Statement No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, we record impairment losses on long-lived assets used in operations when events and circumstances indicate that long-lived assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets. During fiscal 2009, based on our future estimates of the

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Overview - Continued

undiscounted cash flows, it was determined that certain identifiable assets of our TouchSensor and Hetronic businesses in the Interconnect segment, the Automotive Safety Technologies business in our Automotive segment and Magna-Lastic Devices, Inc. from our Other segment were impaired.  Therefore, we recorded an impairment charge of $26.2 million in the Interconnect segment, $4.6 million in the Automotive segment and $0.4 million in the Other segment for a total of $31.2 million for these assets.

On September 30, 2008, we acquired certain assets of Hetronic LLC (Hetronic) for $53.6 million in cash.  We also incurred $2.4 million in transaction costs related to the purchase.  Hetronic is a global leader in industrial safety radio remote controls with locations in the U.S., Malta, the Philippines and Germany.  Hetronic is represented in 45 countries by direct sales associates, licensed partners, distributors and representatives.  Hetronic provides application specific and standard controls to many different industries, such as material handling, transportation, mining, military, agriculture and construction.

On January 24, 2008, we announced a restructuring of our U.S.-based automotive operations and a decision to discontinue producing certain legacy products in the Interconnect segment.  The Automotive and Interconnect restructuring is expected to be completed during fiscal 2010.  We record the expense in the restructuring section of our Consolidated Statement of Operations. On January 24, 2008, the total pre-tax charges were estimated between $19.0 million and $25.0 million.  As of May 2, 2009, we have recorded $23.2 million of the charges.  We estimate that we will record pre-tax restructuring charges in fiscal 2010 between $0.5 million and $1.5 million, of which $0.5 million will relate to the termination of approximately 225 employees and the cost of one-time employee benefits, retention, COBRA and outplacement services.  We continue to perform periodic impairment testing, if indicators exist, and will record any charges incurred as per SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, (“SFAS No. 144”) in the period when impairment is incurred.

On March 12, 2009, we announced several additional restructuring actions to further reduce our exposure to the North American automotive industry and to consolidate manufacturing facilities in lower cost regions to reduce costs.  After these actions our principal manufacturing operations will be in Mexico, Malta and China.  In addition, we decided to transfer certain new GM business to other suppliers.  This business was scheduled to be produced in our Shanghai, China automotive facility.

All Ford Motor Company production at Methode’s Reynosa, Mexico, facility will be moved to another supplier.  TouchSensor manufacturing currently in west suburban Chicago, Illinois, will be moved to Monterrey, Mexico.  Additionally, our operations in Shanghai, China, will be consolidated to two facilities from three. The addition of a plant in Morocco has been put on indefinite hold.

In total, this additional restructuring will affect approximately 850 employees worldwide. We estimate that we will record a pre-tax charge between $16.0 million and $25.0 million, during fiscal years 2009 and 2010. The cash portion of this charge is estimated between $7.0 million and $8.0 million.  We estimate that we will record pre-tax restructuring charges in fiscal 2010 between $8.7 million and $17.7 million.

Business Outlook

We are very cautious about fiscal 2010, expecting that it will be another challenging year. The financial sector crisis and stagnant global economic conditions have increased uncertainty in the markets in every geographic region we serve. We expect the unprecedented current global economic environment to continue to affect near-term results and to create difficult conditions. Looking forward, visibility is low and forecasting is very challenging.  Sales of Automotive segment products are expected to decline, as our forecasted sales from North American and European automotive OEMs are lower. Additionally, we took actions in fiscal 2008 and 2009 to exit certain unprofitable or marginally profitable North American automotive business. Sales of sensor pads for passive occupant-detection systems are expected to decline due to lower North American automotive volumes, and as the current systems are replaced, with new technology.  We expect sales declines in the Interconnect and Power Products segments as well as demand for information processing and networking equipment, construction, voice and data communications systems, consumer electronics, appliance, aerospace vehicles and industrial equipment to be stagnant.  In our Interconnect segment, sales from our Hetronic acquisition will be offset by sales lost due to our decision to exit certain unprofitable component products in fiscal 2009.  While we have taken steps to restructure our businesses, operating margin improvement will not be realized until economic conditions begin to improve.

Results may differ materially from what is expressed or forecasted.  See “ Item 1A Risk Factors” herein.

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Results of Operations

Results of Operations for the Fiscal Year Ended May 2, 2009 (52 weeks) as Compared to the Fiscal Year Ended May 3, 2008 (53 weeks)

Consolidated Results

Below is a table summarizing results for the years ended:

(in millions)

Net Sales.  Consolidated net sales decreased $125.5 million, or 22.8%, to $425.6 million for the fiscal year ended May 2, 2009 from $551.1 million for the fiscal year ended May 3, 2008.  The Automotive segment net sales declined $118.5 million or 32.7% to $243.6 million for fiscal 2009 from $362.1 million for fiscal 2008.  The decline is attributable to the softening of the global economic environment, especially the effect on the automotive industry.  The Automotive segment net sales were also negatively impacted by planned lower Chrysler sales volumes of $14.8 million in fiscal 2009, compared to $59.2 million in fiscal 2008.  In July 2007, we decided to exit production for certain Chrysler products at the expiration of our manufacturing commitment.  The transfer of the Chrysler product was completed during the second quarter of fiscal 2009.  Excluding Chrysler, the North American Automotive segment net sales declined 18.5% in fiscal 2009, as compared to fiscal 2008.  The Interconnect segment net sales

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decreased $5.3 million, or 3.9% to $131.0 million in fiscal 2009 as compared to $136.3 million in fiscal 2008.  The Interconnect segment net sales were favorably impacted by the Hetronic acquisition, which was purchased on September 30, 2008, offset by lower sales in the other Interconnect businesses.  The Power Products segment net sales decreased $3.1 million to $42.7 million in fiscal 2009, compared to $45.8 million in fiscal 2008.  Translation of net sales from our foreign operations increased reported net sales by $1.6 million or 0.4% due to currency rate fluctuations.

Other Income.  Other income increased $1.3 million to $3.2 million for the fiscal year ended May 2, 2009 from $1.9 million for the fiscal year ended May 3, 2008.  Other income consisted primarily of earnings from engineering design fees and royalties.

Cost of Products Sold.  Consolidated cost of products sold decreased $72.0 million, or 16.8%, to $356.4 million for the fiscal year ended May 2, 2009 from $428.4 million for the fiscal year ended May 3, 2008.  The decrease is due to the lower sales volumes.  Consolidated cost of products sold as a percentage of sales was 83.7% for fiscal 2009 and 77.7% for fiscal 2008.  This increase relates to manufacturing inefficiencies experienced in the third and fourth quarters of fiscal 2009 due to a significant, unexpected drop in sales, in addition to the drop in the planned sales to Chrysler.  A large portion of the drop in sales is due to the North American automotive manufacturers extending plant shutdowns that occurred during the second half of fiscal 2009.

Gross Margins (including other income).  Consolidated gross margins (including other income) decreased $52.2 million, or 41.9%, to $72.4 million for the fiscal year ended May 2, 2009 as compared to $124.6 million for the fiscal year ended May 3, 2008.  Gross margins as a percentage of net sales were 17.0% for fiscal 2009 and 22.6% for fiscal 2008.  Gross margins were impacted negatively due to manufacturing inefficiencies during the third and fourth quarters of fiscal 2009 related to significantly lower sales volumes.  In addition, gross margins were impacted due to unfavorable product mix and production costs for the Power Products segment.

Restructuring.  On January 24, 2008, we announced a restructuring of our U.S.-based automotive operations and the decision to discontinue producing certain legacy products in the Interconnect segment.  During the fiscal year ended May 2, 2009, we recorded a restructuring charge of $18.0 million, which consisted of  $6.1 million for employee severance, $10.8 million for impairment and accelerated depreciation for buildings and improvements and machinery and equipment, $0.2 million for inventory write-downs and $0.9 million relating to professional fees.  During fiscal 2008, we recorded restructuring charges of $5.2 million, which consisted of $3.4 million for employee severance, $1.3 million for asset write-downs and $0.5 million for professional fees.

On March 12, 2009, we announced several additional restructuring actions to further reduce our exposure to the North American automotive industry and to consolidate manufacturing facilities in lower cost regions to reduce costs.  During the fiscal year ended May 2, 2009, we recorded a restructuring charge of $7.3 million, which consisted of $0.1 million for employee severance, $1.4 million for impairment and accelerated depreciation for buildings and improvements and machinery and equipment, $5.4 million for impairment of customer funded tooling and $0.1 million in forfeited security deposits related to the cancellation of the new GM business and $0.3 million relating to professional fees.

Impairment of Goodwill and Other Assets.  We review our goodwill and other intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable, and we also review our goodwill annually in accordance with SFAS No. 142, “Goodwill and Other Intangibles”.  The values assigned to goodwill and intangible assets are normally based on estimates and judgments regarding expectations for the success and life cycle of products and technologies acquired.  A severe decline in expectations, future cash flows, a change in strategic direction or our market capitalization remaining below our net book value for a significant period of time could result in significant impairment charges, which could have a material adverse effect on our financial condition and results of operations.  Based on events and general business declines, we performed “step one” of the goodwill impairment test in accordance with paragraph 19 of SFAS No. 142, on the reporting units that had goodwill during fiscal 2009.  Based on this test, we determined that the fair value was less than the carrying value of the net assets for certain reporting units.  We completed  “step two” of the goodwill test and concluded that goodwill was impaired.  During fiscal 2009, we recorded a goodwill impairment charge of $25.8 million in our Automotive segment, $30.8 million in our Interconnect segment, $5.4 million in our Power Products segment and $1.2 million in our Other segment for a total of $63.2 million related to these assets.

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Consolidated Results - Continued

Also, in accordance with Financial Accounting Standards Board, (“FASB”) Statement No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, we record impairment losses on long-lived assets used in operations when events and circumstances indicate that long-lived assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets. During fiscal 2009, based on our future estimates of the undiscounted cash flows, it was determined that certain identifiable assets of our TouchSensor and Hetronic businesses in the Interconnect segment, the Automotive Safety Technologies business from our Automotive segment and Magna-Lastic Devices, Inc. from our Other segment were impaired.  Therefore, we recorded an impairment charge of $26.2 million in the Interconnect segment, $4.6 million in the Automotive segment and $0.4 million in the Other segment for a total of $31.2 million for these assets.

In fiscal 2008, we recorded a $1.5 million impairment of assets relating to a $0.7 million write-down of machinery and equipment as a result of lower anticipated revenues over the life of the related project and $0.8 million for the impairment of a particular patent (classified as an intangible asset) where the underlying technology was deemed to be commercially impractical.

Selling and Administrative Expenses.  Selling and administrative expenses decreased $4.0 million, or 6.5%, to $57.5 million for the fiscal year ended May 2, 2009 compared to $61.5 million for the fiscal year ended May 3, 2008.  Selling and administrative expenses were favorably impacted by an adjustment of pre-tax compensation expense associated with the performance-based restricted stock awards granted in fiscal 2007, 2008 and 2009.  The adjustment was made because we determined that these awards were unlikely to vest based on the Company’s performance under the revenue growth and return on invested capital targets.  The pre-tax compensation expense for fiscal 2009 was a reversal of expense of $0.6 million, which relates to compensation expense reversed from previous years.  The pre-tax compensation expense for fiscal 2008 was $3.3 million.  Partially offsetting the reversal of pre-tax compensation expense, selling and administrative expenses were impacted by higher amortization expense relating to the Hetronic, Value Engineered Products, Inc. and TouchSensor acquisitions.  In addition, management positions were filled for our testing facilities in fiscal 2009, which were vacant in fiscal 2008.  Selling and administrative expenses as a percentage of net sales increased to 13.5% in fiscal 2009 from 11.2% in fiscal 2008.

Amortization of Intangibles.  Amortization of intangibles increased $0.9 million, or 15.0%, to $6.9 million for the fiscal year ended May 2, 2009 compared to $6.0 million for the fiscal year ended May 3, 2008.  The increase is due to the amortization expenses for the Hetronic acquisition.

Interest Income, Net.  Net interest income was $1.4 million for the fiscal year ended May 2, 2009 and $2.3 million for the fiscal year ended May 3, 2008.  The average cash balance was $81.4 million during fiscal 2009 as compared to $83.0 million during fiscal 2008.  The average interest rate earned in fiscal 2009 was 2.22% compared to 3.07% in fiscal 2008.  The average interest rate earned includes both taxable interest and tax-exempt municipal interest.  Interest expense was $0.4 million for fiscal 2009 compared to $0.2 million for fiscal 2008.

Other, Net.  Other, net was an expense of $0.5 million for the fiscal year ended May 2, 2009, compared to an expense of $3.2 million for the fiscal year ended May 3, 2008.  The decrease is primarily due to the strengthening of the U.S. dollar versus the Euro and Czech koruna during fiscal 2009 as compared to fiscal 2008.  The functional currencies of our international operations are the British pound, Chinese yuan, Czech koruna, Euro, Mexican peso and Singapore dollar.  Some foreign operations have transactions denominated in currencies other than their functional currencies, primarily sales in U.S. dollars and Euros, creating exchange rate sensitivities.

At May 2, 2009, approximately $3.5 million was invested in an enhanced cash fund sold as an alternative to traditional money-market funds. We have historically invested a portion of our on hand cash balances in this fund. These investments are subject to credit, liquidity, market and interest rate risk. Based on the information available to us, we have estimated the fair value of this fund at $0.72 per unit as of May 2, 2009. For fiscal 2009, we recorded a loss of $1.2 million, of which $0.6 million was realized on partial redemptions of  $8.8 million, and $0.6 million was unrealized.  See the Financial Condition, Liquidity and Capital Resources section for more information.

Income Taxes.  The effective income tax rate was a net provision of 1.5% in fiscal 2009 compared with a provision of 19.7% in fiscal 2008.  The income tax rate in fiscal 2009 was a benefit due to the impairment of goodwill and intangible assets, restructuring charges and slowing of business in our U.S.-based businesses, causing a loss before income taxes.  Offsetting the benefit recorded in fiscal 2009, a valuation allowance against our deferred

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tax assets of $28.0 was recorded in accordance with FASB No. 109 “Accounting for Income Taxes”.  This was recorded due to the uncertainty of the future utilization of our deferred tax assets.  See Note 7 for additional information.  The effective tax rates for both fiscal 2009 and 2008 reflect utilization of foreign investment tax credits and the effect of lower tax rates on income of the Company’s foreign earnings and a higher percentage of earnings at those foreign operations.

Net Income/(Loss).  Net income decreased $152.3 million to a loss of $112.5 million for the fiscal year ended May 2, 2009 as compared to net income of $39.8 million for the fiscal year ended May 3, 2008 due to the impairment of goodwill and intangible assets, lower sales volumes, the income tax valuation allowance recorded against our deferred tax assets, increased restructuring expenses, offset by favorable other income and lower selling and administrative expenses.

Operating Segments

Automotive Segment Results

Below is a table summarizing results for the years ended:

(in millions)

Net Sales.  Automotive segment net sales decreased $118.5 million, or 32.7%, to $243.6 million for the fiscal year ended May 2, 2009 from $362.1 million for the fiscal year ended May 3, 2008.  The decline is attributable to the softening of the global economic environment, especially the effect on the North American automotive industry.  Net sales have declined in fiscal 2009 as compared to fiscal 2008 by 34.2% in North America, 30.6% in Europe and 30.7% in Asia.  A large portion of the drop in sales is due to the North American automotive

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Automotive Segment Results - Continued

manufacturers extending plant shutdowns that occurred during the third and fourth quarters of fiscal 2009.  The Automotive segment net sales were also negatively impacted by anticipated lower Chrysler sales volumes of $14.8 million in fiscal 2009, compared to $59.2 million in fiscal 2008.  Excluding Chrysler, the North American Automotive segment net sales declined 18.5% in fiscal 2009, as compared to fiscal 2008.  Translation of net sales from our foreign operations in the fiscal year ended May 2, 2009 increased reported net sales by $1.3 million, or 0.5%, due to currency rate fluctuations.

Other Income.  Other income increased $1.6 million, or 177.8%, to $2.5 million for the fiscal year ended May 2, 2009 from $0.9 million for the fiscal year ended May 3, 2008.  Other income consisted primarily of earnings from engineering design fees and royalties.

Cost of Products Sold.  Automotive segment cost of products sold decreased $76.1 million to $206.0 million for the fiscal year ended May 2, 2009 from $282.1 million for the fiscal year ended May 3, 2008.  The decrease relates to lower sales volumes.  Automotive segment costs of products sold as a percentage of sales increased to 84.6% for fiscal 2009 from 77.9% for fiscal 2008.  This increase relates to manufacturing inefficiencies experienced in the third and fourth quarters of fiscal 2009 due to a significant, unexpected drop in sales, in addition to lower planned sales to Chrysler.  A large portion of the drop in sales is due to the North American automotive manufacturers extending plant shutdowns that occurred during the second half of fiscal 2009.

Gross Margins (including other income).  Automotive segment gross margins (including other income) decreased $40.8 million, or 50.4%, to $40.1 million for the fiscal year ended May 2, 2009 as compared to $80.9 million for the fiscal year ended May 3, 2008.  Gross margins as a percentage of net sales decreased to 16.5% for fiscal 2009 from 22.3% for fiscal 2008.  Gross margins were impacted negatively due to manufacturing inefficiencies during the second half of fiscal 2009 due to significantly lower sales volumes.  In addition, gross margins were impacted by the planned lower Chrysler sales volumes in fiscal 2009.

Restructuring.   On January 24, 2008, we announced a restructuring of our U.S.-based automotive operations.  During fiscal 2009, we recorded a restructuring charge of $12.8 million, which consisted of $4.7 million for employee severance, $7.4 million for impairment and accelerated depreciation for buildings, building improvements and machinery and equipment and  $0.7 million for professional fees.  We expect the restructuring to be complete during fiscal 2010.

In fiscal 2008, we recorded a restructuring charge of $4.4 million, $2.7 million relating to employee severance, $1.3 million relating to impairment and accelerated depreciation for assets and $0.4 million for professional fees relating to the January 2008 restructuring.

On March 12, 2009, we announced several additional restructuring actions to further reduce our exposure to the North American automotive industry and to consolidate manufacturing facilities in lower cost regions to reduce costs.  During the fiscal year ended May 2, 2009, we recorded a restructuring charge of $6.5 million, which consisted of  $1.0 million for impairment and accelerated depreciation for buildings and improvements and machinery and equipment and $5.4 million for customer funded tooling and $0.1 million in forfeited security deposits related to the cancellation of the new GM business.

Impairment of Goodwill and Other Assets.  Based on events and general business declines, we performed “step one” and “step two” of the goodwill impairment test in accordance with paragraph 19 of SFAS No. 142, on the reporting units that had goodwill during fiscal 2009.  Based on these tests, we concluded that goodwill was impaired.  We recorded a goodwill impairment charge of $25.8 million in our Automotive segment related to these assets.  See Note 4 for more information.

Also, in accordance with FASB Statement No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, during the fourth quarter of fiscal 2009, based on our future estimates of the undiscounted cash flows, it was determined that certain identifiable assets were impaired.  We recorded an impairment charge of $4.7million for these assets.  See Note 4 for more information.

In fiscal 2008, we recorded a $1.5 million impairment of assets relating to a $0.7 million write-down of machinery and equipment as a result of lower anticipated revenues over the life of the related project and $0.8

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Automotive Segment Results - Continued

million for the impairment of a particular patent (classified as an intangible asset) where the underlying technology was deemed to be commercially impractical.

Selling and Administrative Expenses.  Selling and administrative expenses decreased $3.4 million, or 18.9%, to $14.6 million for the fiscal year ended May 2, 2009 compared to $18.0 million for the fiscal year ended May 3, 2008.  The decrease is due to lower commission expense as a result of lower sales during fiscal 2009.  Selling and administrative expenses as a percentage of net sales increased to 6.0% in fiscal 2009 from 5.0% in fiscal 2008.

Other, Net.  Other, net was income of $0.3 million for the fiscal year ended May 2, 2009, compared to an expense of $1.7 million for the fiscal year ended May 3, 2008.  The decrease is primarily due to the strengthening of the U.S. dollar versus the Euro during fiscal 2009 as compared to fiscal 2008.  The functional currencies of our international operations are the British pound, Chinese yuan, Euro and Mexican peso.  Some foreign operations have transactions denominated in currencies other than their functional currencies, primarily sales in U.S. dollars and Euros, creating exchange rate sensitivities.

Income/(Loss) Before Income Taxes.  Automotive segment income/(loss) before income taxes decreased $79.3 million, or 143.4%, to a loss of $24.0 million for the fiscal year ended May 2, 2009 compared to income of $55.3 million for the fiscal year ended May 3, 2008.  The decrease occurred due to goodwill and intangible asset write-offs, manufacturing inefficiencies due to significantly lower sales volumes during the third and fourth quarters of fiscal 2009, increased restructuring expenses, partially offset by lower selling and administrative expenses.

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Interconnect Segment Results

Below is a table summarizing results for the years ended:

(in millions)