Delivers Gross Margin of 28.5%, up 190 Basis Points From
Prior Year
Second Quarter Fiscal 2025 Highlights (All
comparisons against the second quarter of fiscal year 2024 unless
otherwise noted)
- Delivered net sales of $884M, down 2%, with strength in Motive
Power offset by continued pressure in Communications and Class 8
Transportation
- Energy Systems improving with net sales +6% sequentially and
backlog increasing for the second consecutive quarter
- Achieved GM of 28.5%, +190 bps, including increased benefits
from Inflation Reduction Act / IRC 45X tax credits, +60 bps ex
IRA
- Realized diluted EPS of $2.01, +29%, and adjusted diluted
EPS(1) of $2.12, +15%
- Net leverage ratio(a) 1.6 X EBITDA on operating cash flow of
$34M
- Selected for $199M Department of Energy award negotiation to
partially fund EnerSys’ planned lithium-ion cell production
facility in Greenville, SC
- Published Climate Action Plan Roadmap, outlining Company's
strategic plans to achieve carbon neutrality goals
- Announced planned executive succession; David Shaffer to retire
as CEO, Shawn O’Connell named successor
EnerSys (NYSE: ENS), the global leader in stored energy
solutions for industrial applications, announced today results for
its second quarter of fiscal 2025, which ended on September 29,
2024.
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Message from the CEO
In the second quarter, EnerSys delivered revenue and EPS which
were in line with our guidance ranges and demonstrated our ability
to generate strong and accelerating financial results in an
uncertain market environment through our balanced business
portfolio.
Energy Systems achieved sequential performance improvement,
albeit with continued softness in Communications end markets, with
the results of our optimization initiatives flowing through to the
bottom line. We saw higher order trends in Communications and Data
Centers in the Americas, providing optimism in the market recovery
momentum. Motive Power delivered record Q2 adjusted operating
earnings, with volumes and margins increasing versus the prior year
on consistent customer demand in Logistics and Warehousing, and
ongoing customer enthusiasm for our maintenance-free offerings.
Specialty enjoyed excellent A&D results supplemented by the
accretive impact of the Bren-Tronics acquisition which expands our
lithium portfolio and presence in the defense market. Integration
and results are exceeding our expectations. Although we grew our
U.S. Transportation aftermarket volume, we were not able to offset
the sluggish Class 8 truck OEM demand. The installation of our new
production lines in Missouri are on track and will deliver improved
productivity, capacity, and flexibility when Transportation and
Communications market demand returns to normalized levels. In New
Ventures, we installed our first Fast Charge & Storage
(FC&S) system in September.
We were very pleased to announce during the quarter that we were
selected for a $199 million award negotiation from the Department
of Energy to partially fund our planned lithium gigafactory, and
that we have received formal approval from our Board to proceed
with this important project. We are currently finalizing award
negotiations and our construction plans, conducting an
environmental study, completing our supply chain selections, and
hiring for strategic positions.
While we expect that market uncertainty will persist through the
coming months, we are confident our second half of the fiscal year
is on track to outperform the first half. We are bullish about our
strong position as a leading provider of energy storage solutions
as we continue to deliver innovative products and services in
growing end markets where the need for access to reliable power is
increasing exponentially. We remain focused on delivering
profitable long-term growth for our shareholders.
David M. Shaffer, Chief Executive Officer, EnerSys
Key Financial Results and
Metrics
Second quarter ended
Six months ended
In millions, except per share amounts
September 29, 2024
October 1, 2023
Change
September 29, 2024
October 1, 2023
Change
Net Sales
$
883.7
$
901.0
(1.9
)%
$
1,736.6
$
1,809.6
(4.0
)%
Diluted EPS (GAAP)
$
2.01
$
1.56
$
0.45
$
3.72
$
3.17
$
0.55
Adjusted Diluted EPS
(Non-GAAP)(1)
$
2.12
$
1.84
$
0.28
$
4.09
$
3.72
$
0.37
Gross Profit (GAAP)
$
252.1
$
239.6
$
12.5
$
490.5
$
479.9
$
10.6
Operating Earnings (GAAP)
$
99.4
$
88.6
$
10.8
$
190.7
$
178.0
$
12.7
Adjusted Operating Earnings
(Non-GAAP)(2)
$
114.6
$
103.5
$
11.1
$
220.3
$
210.7
$
9.6
Net Earnings (GAAP)
$
82.3
$
65.2
$
17.1
$
152.4
$
132.0
$
20.4
EBITDA (Non-GAAP)(3)
$
122.0
$
108.2
$
13.8
$
235.8
$
219.5
$
16.3
Adjusted EBITDA (Non-GAAP)(3)
$
129.0
$
116.4
$
12.6
$
250.3
$
238.5
$
11.8
Share Repurchases
$
63.5
$
47.3
$
16.2
$
75.1
$
47.3
$
27.8
Dividend per share
$
0.24
$
0.225
$
0.02
$
0.465
$
0.40
$
0.07
Total Capital Returned to
Stockholders
$
73.1
$
56.5
$
16.6
$
93.8
$
63.7
$
30.1
(a) Net leverage ratio is a non-GAAP financial measure as
defined pursuant to our credit agreement and discussed under
Reconciliations of GAAP to Non-GAAP Financial Measures.
(1) Adjusted Diluted EPS is a non-GAAP financial measure and
discussed under Reconciliations of GAAP to Non-GAAP Financial
Measures.
(2) Operating Earnings are adjusted for charges that the Company
incurs as a result of restructuring and exit activities, impairment
of goodwill and indefinite-lived intangibles and other assets,
acquisition activities and those charges and credits that are not
directly related to operating unit performance. A reconciliation of
operating earnings to Non-GAAP Adjusted Earnings are provided in
tables under the section titled Business Segment Operating
Results.
(3) Non-GAAP EBITDA is calculated as net earnings adjusted for
depreciation, amortization, interest and income taxes. Non-GAAP
Adjusted EBITDA is further adjusted for certain charges such as
restructuring and exit activities, impairment of goodwill and
indefinite-lived intangibles and other assets, acquisition
activities and other charges and credits as discussed under
Reconciliations of GAAP to Non-GAAP Financial Measures.
Summary of Results
Second Quarter 2025
Net sales for the second quarter of fiscal 2025 were $883.7
million, a decrease of 1.9% from the prior year second quarter net
sales of $901.0 million, and in the range of the second quarter of
fiscal 2025 guidance of $880 million to $920 million. The decrease
compared to prior year quarter was the result of a 3% decrease in
organic volume, a 1% decrease in pricing, partially offset by a 2%
increase in acquisitions.
Net earnings attributable to EnerSys stockholders (“Net
earnings”) for the second quarter of fiscal 2025 was $82.3 million,
or $2.01 per diluted share, which included an unfavorable
highlighted net of tax impact of $4.2 million, or $0.11 per diluted
share, from highlighted items described in further detail in the
tables shown below, reconciling non-GAAP adjusted financial
measures to reported amounts.
Net earnings for the second quarter of fiscal 2024 was $65.2
million, or $1.56 per diluted share, which included an unfavorable
highlighted net of tax impact of $11.3 million, or $0.28 per
diluted share, from highlighted items described in further detail
in the tables shown below, reconciling non-GAAP adjusted financial
measures to reported amounts.
Excluding these highlighted items, adjusted Net earnings per
diluted share for the second quarter of fiscal 2025, on a non-GAAP
basis, were $2.12, compared to the guidance of $2.05 to $2.15 per
diluted share for the second quarter given by the Company on August
7, 2024. These earnings compare to the prior year second quarter
adjusted Net earnings of $1.84 per diluted share. Please refer to
the section included herein under the heading “Reconciliations of
GAAP to Non-GAAP Financial Measures” for a discussion of the
Company’s use of non-GAAP adjusted financial information, which
includes tables reconciling GAAP and non-GAAP adjusted financial
measures for the quarters ended September 29, 2024 and October 1,
2023.
Fiscal Year to Date 2025
Net sales for the six months of fiscal 2025 were $1,736.6
million, a decrease of 4.0% from the prior year six months net
sales of $1,809.6 million. This decrease was due to a 3% decrease
in organic volume, a 1% decrease in pricing, and a 1% decrease in
foreign currency translation, partially offset by a 1% increase in
acquisitions.
Net earnings for the six months of fiscal 2025 was $152.4
million, or $3.72 per diluted share, which included an unfavorable
highlighted net of tax impact of $15.0 million, or $0.37 per
diluted share, from highlighted items described in further detail
in the tables shown below, reconciling non-GAAP adjusted financial
measures to reported amounts.
Net earnings for the six months of fiscal 2024 was $132.0
million, or $3.17 per diluted share, which included an unfavorable
highlighted net of tax impact of $23.1 million, or $0.55 per
diluted share, from highlighted items described in further detail
in the tables shown below, reconciling non-GAAP adjusted financial
measures to reported amounts.
Adjusted Net earnings per diluted share for the six months of
fiscal 2025, on a non-GAAP basis, were $4.09. This compares to the
prior year six months adjusted Net earnings of $3.72 per diluted
share. Please refer to the section included herein under the
heading “Reconciliations of GAAP to Non-GAAP Financial Measures”
for a discussion of the Company’s use of non-GAAP adjusted
financial information.
Quarterly Dividend The company announced today that its
Board of Directors has declared a quarterly cash dividend of $0.24
per share of common stock payable on December 27, 2024, to holders
of record as of December 13, 2024.
Balance Sheet and Cash Flow As of September 29, 2024,
cash and cash equivalents were $407.9 million and net debt was
$839.6 million. The net leverage ratio at the end of the second
quarter was 1.6 X, up from 1.4 X in the prior year period. Capital
expenditures during the second quarter were $30.4 million, up from
$19.8 million in the prior year period, driven by investments in
plant improvements. During the second quarter, cash from operating
activities was $33.6 million and free cash flow was $3.2
million.
The Company also returned approximately $73.1 million to
shareholders through $63.5 million in share repurchases and $9.6
million through its quarterly dividend payment in the second
quarter.
Third Quarter and Full Year 2025 Outlook
In the third quarter of fiscal 2025, EnerSys expects:
- Net sales in the range of $920M to $960M
- Adjusted diluted earnings per share in the range of $2.20 to
$2.30*
For the full year fiscal 2025, EnerSys expects:
- Net sales in the range of $3,675 to $3,765M, down from prior
guidance of $3,735M to $3,885M
- Adjusted diluted earnings per share in the range of $8.75 to
$9.05*, down from prior guidance of $8.80 to $9.20*
- Capital expenditures in the range of $100M to $120M
"While we are seeing encouraging demand trends in the majority
of our end markets, including improving order rates in the
Communications and Data Center markets and stable trends in our
Motive Power and A&D businesses, we are managing our business
prudently to navigate the continued spending pause in the Class 8
truck OEM market and near-term macro uncertainty. We are excited
about our progress in New Ventures, delivering our first Fast
Charge and Storage (FC&S) system at the end of the second
quarter, but deployment schedules have been pushed out due to
installation and site readiness challenges. As a result, we are
modestly lowering our revenue range for our full year fiscal 2025.
As we enter the second half of the year, we expect the
profitability of our baseline business to deliver accelerating
returns, driven by improving volumes, favorable product mix, the
accretive contribution of Bren-Tronics, continued cost
improvements, and benefits from operational efficiencies flowing
through to our bottom line. We are excited to advance the next
phase of our lithium-ion gigafactory in Greenville and expect to
incur modest related non-capitalizable expenses in the second half
of the year as we move forward with this strategic project. As a
result, we are slightly lowering the mid-point of our full year
fiscal 2025 adjusted diluted earnings per share guidance by $0.10
to account for these increased expenditures. We believe the global
concern over energy scarcity will persist as major trends drive a
swift rise in the demand for reliable power. As a key provider of
energy systems and storage solutions, EnerSys is well-positioned to
take advantage of this growth opportunity. We remain focused on
delivering long-term value to our stockholders," said Andrea Funk,
EnerSys Chief Financial Officer.
*Inclusive of IRC 45X tax benefits created with the IRA.
Please refer to the section included herein under the heading
“Reconciliations of GAAP to Non-GAAP Financial Measures” for a
discussion of the Company’s use of non-GAAP adjusted financial
information.
Conference Call and Webcast Details
The Company will host a conference call to discuss its second
quarter results at 9:00 AM (ET) Thursday, November 7, 2024. A live
broadcast as well as a replay of the call can be accessed via
https://edge.media-server.com/mmc/p/2h25g7rf/ or the Investor
Relations section of the company’s website at
https://investor.enersys.com.
To join the live call, please register at
https://register.vevent.com/register/BI1012cc0b2b4144b9b4ee866d5476e344.
A dial-in and unique PIN will be provided upon registration.
About EnerSys
EnerSys is the global leader in stored energy solutions for
industrial applications and designs, manufactures, and distributes
energy systems solutions and motive power batteries, specialty
batteries, battery chargers, power equipment, battery accessories
and outdoor equipment enclosure solutions to customers worldwide.
The company goes to market through four lines of business: Energy
Systems, Motive Power, Specialty and New Ventures. Energy Systems,
which combine power conversion, power distribution, energy storage,
and enclosures, are used in the telecommunication, broadband and
utility industries, uninterruptible power supplies, and numerous
applications requiring stored energy solutions. Motive power
batteries and chargers are utilized in electric forklift trucks and
other industrial electric powered vehicles. Specialty batteries are
used in aerospace and defense applications, portable power
solutions for soldiers in the field, large over-the-road trucks,
premium automotive, medical and security systems applications. New
Ventures provides energy storage and management systems for various
applications including demand charge reduction, utility back-up
power, and dynamic fast charging for electric vehicles. EnerSys
also provides aftermarket and customer support services to its
customers in over 100 countries through its sales and manufacturing
locations around the world. To learn more about EnerSys please
visit https://www.enersys.com/en/
Sustainability
Sustainability at EnerSys is about more than just the benefits
and impacts of our products. Our commitment to sustainability
encompasses many important environmental, social and governance
issues. Sustainability is a fundamental part of how we manage our
own operations. Minimizing our environmental footprint is a
priority. Sustainability is our commitment to our employees, our
customers and the communities we serve. Our products facilitate
positive environmental, social, and economic impacts around the
world. To learn more visit:
https://www.enersys.com/en/about-us/sustainability/.
Caution Concerning Forward-Looking Statements
This press release, and oral statements made regarding the
subjects of this release, contains forward-looking statements,
within the meaning of the Private Securities Litigation Reform Act
of 1995, or the Reform Act, which may include, but are not limited
to, statements regarding EnerSys’ earnings estimates, intention to
pay quarterly cash dividends, return capital to stockholders,
plans, objectives, expectations and intentions and other statements
contained in this press release that are not historical facts,
including statements identified by words such as “believe,” “plan,”
“seek,” “expect,” “intend,” “estimate,” “anticipate,” “will,” and
similar expressions. All statements addressing operating
performance, events, or developments that EnerSys expects or
anticipates will occur in the future, including statements relating
to sales growth, earnings or earnings per share growth, order
intake, backlog, payment of future cash dividends, commodity
prices, execution of its stock buyback program, judicial or
regulatory proceedings, ability to identify and realize benefits in
connection with acquisition and disposition opportunities, and
market share, as well as statements expressing optimism or
pessimism about future operating results or benefits from its cash
dividend, its stock buyback programs, application of Section 45X of
the Internal Revenue Code, future responses to and effects of the
pandemic, adverse developments with respect to the economic
conditions in the U.S. in the markets in which we operate and other
uncertainties, including the impact of supply chain disruptions,
interest rate changes, inflationary pressures, geopolitical and
other developments and labor shortages on the economic recovery and
our business are forward-looking statements within the meaning of
the Reform Act. The forward-looking statements are based on
management's current views and assumptions regarding future events
and operating performance, and are inherently subject to
significant business, economic, and competitive uncertainties and
contingencies and changes in circumstances, many of which are
beyond the Company’s control. The statements in this press release
are made as of the date of this press release, even if subsequently
made available by EnerSys on its website or otherwise. EnerSys does
not undertake any obligation to update or revise these statements
to reflect events or circumstances occurring after the date of this
press release.
Although EnerSys does not make forward-looking statements unless
it believes it has a reasonable basis for doing so, EnerSys cannot
guarantee their accuracy. The foregoing factors, among others,
could cause actual results to differ materially from those
described in these forward-looking statements. For a list of other
factors which could affect EnerSys’ results, including earnings
estimates, see EnerSys’ filings with the Securities and Exchange
Commission, including “Item 7. Management's Discussion and Analysis
of Financial Condition and Results of Operations,” and
“Forward-Looking Statements,” set forth in EnerSys’ Annual Report
on Form 10-K for the fiscal year ended March 31, 2024. No undue
reliance should be placed on any forward-looking
statements.
EnerSys
Consolidated Condensed
Statements of Income (Unaudited)
(In millions, except share and
per share data)
Quarter ended
Six months ended
September 29, 2024
October 1, 2023
September 29, 2024
October 1, 2023
Net sales
$
883.7
$
901.0
$
1,736.6
$
1,809.6
Gross profit
252.1
$
239.6
$
490.5
$
479.9
Operating expenses
150.5
$
143.8
$
291.7
$
288.4
Restructuring and other exit charges
2.2
$
7.2
$
8.1
$
13.5
Operating earnings
99.4
$
88.6
$
190.7
$
178.0
Earnings before income taxes
84.2
$
73.4
$
163.5
$
146.9
Income tax expense
1.9
$
8.2
$
11.1
$
14.9
Net earnings attributable to EnerSys
stockholders
$
82.3
$
65.2
$
152.4
$
132.0
Net reported earnings per common share
attributable to EnerSys stockholders:
Basic
$
2.05
$
1.59
$
3.79
$
3.23
Diluted
$
2.01
$
1.56
$
3.72
$
3.17
Dividends per common share
$
0.24
$
0.225
$
0.465
$
0.40
Weighted-average number of common shares
used in reported earnings per share calculations:
Basic
40,165,080
40,922,959
40,184,546
40,930,146
Diluted
40,863,205
41,684,634
40,924,660
41,691,479
EnerSys
Consolidated Condensed Balance
Sheets (Unaudited)
(In Thousands, Except Share
and Per Share Data)
September 29, 2024
March 31, 2024
Assets
Current assets:
Cash and cash equivalents
$
407,919
$
333,324
Accounts receivable, net of allowance for
doubtful accounts: September 29, 2024 - $8,808; March 31, 2024 -
$8,107
549,011
524,725
Inventories, net
763,516
697,698
Prepaid and other current assets
335,923
226,949
Total current assets
2,056,369
1,782,696
Property, plant, and equipment, net
582,298
532,450
Goodwill
738,603
682,934
Other intangible assets, net
395,411
319,407
Deferred taxes
55,090
49,798
Other assets
123,261
98,721
Total assets
$
3,951,032
$
3,466,006
Liabilities and Equity
Current liabilities:
Short-term debt
$
30,080
$
30,444
Accounts payable
333,671
369,456
Accrued expenses
328,687
323,957
Total current liabilities
692,438
723,857
Long-term debt, net of unamortized debt
issuance costs
1,202,583
801,965
Deferred taxes
34,836
30,583
Other liabilities
179,579
152,529
Total liabilities
2,109,436
1,708,934
Commitments and contingencies
Equity:
Preferred Stock, $0.01 par value,
1,000,000 shares authorized, no shares issued or outstanding at
September 29, 2024 and at March 31, 2024
—
—
Common Stock, $0.01 par value per share,
135,000,000 shares authorized, 56,680,568 shares issued and
39,813,904 shares outstanding at September 29, 2024; 56,363,924
shares issued and 40,271,936 shares outstanding at March 31,
2024
567
564
Additional paid-in capital
644,162
629,879
Treasury stock at cost, 16,866,664 shares
held as of September 29, 2024 and 16,091,988 shares held as of
March 31, 2024
(910,650
)
(835,827
)
Retained earnings
2,297,431
2,163,880
Accumulated other comprehensive loss
(193,443
)
(204,851
)
Total EnerSys stockholders’ equity
1,838,067
1,753,645
Nonredeemable noncontrolling interests
3,529
3,427
Total equity
1,841,596
1,757,072
Total liabilities and equity
$
3,951,032
$
3,466,006
EnerSys
Consolidated Condensed
Statements of Cash Flows (Unaudited)
(In Thousands)
Six months ended
September 29, 2024
October 1, 2023
Cash flows from operating
activities
Net earnings
$
152,377
$
132,026
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization
48,757
45,214
Write-off of assets relating to exit
activities
244
4,146
Derivatives not designated in hedging
relationships:
Net losses (gains)
(1,783
)
1,204
Cash (settlements) proceeds
1,320
695
Provision for doubtful accounts
1,124
1,456
Deferred income taxes
114
46
Non-cash interest expense
969
820
Stock-based compensation
12,187
13,077
(Gain) loss on disposal of property,
plant, and equipment
64
158
Changes in assets and liabilities:
Accounts receivable
(9,323
)
93,368
Inventories
(12,401
)
10,529
Prepaid and other current assets
(26,201
)
(13,891
)
Other assets
968
(1,306
)
Accounts payable
(40,104
)
(57,233
)
Accrued expenses
(83,963
)
(44,803
)
Other liabilities
(303
)
217
Net cash provided by (used in) operating
activities
44,046
185,723
Cash flows from investing
activities
Capital expenditures
(66,486
)
(35,854
)
Purchase of business
(205,276
)
(8,270
)
Proceeds from disposal of property, plant,
and equipment
89
2,007
Investment in Equity Securities
(10,852
)
—
Net cash (used in) provided by investing
activities
(282,525
)
(42,117
)
Cash flows from financing
activities
Net (repayments) borrowings on short-term
debt
(434
)
(61
)
Proceeds from Second Amended Revolver
borrowings
476,600
172,500
Repayments of Second Amended Revolver
borrowings
(76,600
)
(252,500
)
Repayments of Second and Third Amended
Term Loans
—
(12,736
)
Finance lease obligations
(8
)
—
Option proceeds, net
7,445
9,668
Payment of taxes related to net share
settlement of equity awards
(7,984
)
(7,348
)
Purchase of treasury stock
(75,187
)
(47,340
)
Issuance of treasury stock- ESPP
537
—
Dividends paid to stockholders
(18,598
)
(16,341
)
PPD Deferred Financing on Bond Issue-Legal
Fees
(351
)
—
Other
(166
)
690
Net cash (used in) financing
activities
305,254
(153,468
)
Effect of exchange rate changes on cash
and cash equivalents
7,820
(9,052
)
Net decrease in cash and cash
equivalents
74,595
(18,914
)
Cash and cash equivalents at beginning of
period
333,324
346,665
Cash and cash equivalents at end of
period
$
407,919
$
327,751
Reconciliations of GAAP to Non-GAAP
Financial Measures
This press release contains financial information determined by
methods other than in accordance with U.S. Generally Accepted
Accounting Principles, ("GAAP"). EnerSys' management uses the
non-GAAP measures “adjusted Net earnings”, “adjusted Diluted EPS”,
“adjusted operating earnings”, "adjusted gross profit", "adjusted
gross margin", "EBITDA", “adjusted EBITDA”, "adjusted EBITDA per
credit agreement", "net debt", "net leverage ratio", "free cash
flow", and "adjusted free cash flow conversion" as applicable, in
their analysis of the Company's performance. Adjusted Net earnings,
adjusted gross profit, adjusted gross margin, and adjusted
operating earnings measures, as used by EnerSys in past quarters
and years, adjusts Net earnings, gross profit, gross margin, and
operating earnings determined in accordance with GAAP to reflect
changes in financial results associated with the Company's
restructuring initiatives and other highlighted charges and income
items. Adjusted EBITDA is a key performance measure that our
management uses to assess our operating performance. Because
adjusted EBITDA facilitates internal comparisons of our historical
operating performance on a more consistent basis, we use this
measure as an overall assessment of our performance, to evaluate
the effectiveness of our business strategies and for business
planning purposes. We calculate adjusted EBITDA as net income
before interest income, interest expense, other (income) expense
net, provision (benefit) for income taxes, depreciation and
amortization, further adjusted to exclude restructuring and exit
activities, impairment of goodwill, indefinite-lived intangibles
and other assets, acquisition activities and those charges and
credits that are not directly related to operating unit
performance. EBITDA is calculated as net income before interest
income, interest expense, other (income) expense net, provision
(benefit) for income taxes, depreciation and amortization. We
define non-GAAP adjusted EBITDA per credit agreement as net
earnings determined in accordance with GAAP for interest, taxes,
depreciation and amortization, and certain charges or credits as
permitted by our credit agreements, that were recorded during the
periods presented. We define non-GAAP net debt as total debt,
finance lease obligations and letters of credit, net of all cash
and cash equivalents, as defined in the Fourth Amended Credit
Facility on the balance sheet as of the end of the most recent
fiscal quarter. We define non-GAAP net leverage ratio as non-GAAP
net debt divided by last twelve months non-GAAP adjusted EBITDA per
credit agreement. We define non-GAAP free cash flow as net cash
provided by or used in operating activities less capital
expenditures. We define non-GAAP adjusted free cash flow conversion
as free cash flow divided by adjusted net earnings. Free cash flow
and adjusted free cash flow conversion are used by investors,
financial analysts, rating agencies and management to help evaluate
the Company’s ability to generate cash to pursue incremental
opportunities aimed toward enhancing shareholder value. Management
believes the presentation of these financial measures reflecting
these non-GAAP adjustments provides important supplemental
information in evaluating the operating results of the Company as
distinct from results that include items that are not indicative of
ongoing operating results and overall business performance; in
particular, those charges that the Company incurs as a result of
restructuring activities, impairment of goodwill and
indefinite-lived intangibles and other assets, acquisition
activities and those charges and credits that are not directly
related to operating unit performance, such as significant legal
proceedings, amortization of intangible assets, tax valuation
allowance changes, withholding tax from repatriation of prior
period earnings, and impacts of changes or reform to income tax
laws. Because these charges are not incurred as a result of ongoing
operations, or are incurred as a result of a potential or previous
acquisition, they are not as helpful a measure of the performance
of our underlying business, particularly in light of their
unpredictable nature and are difficult to forecast. Although we
exclude the amortization of purchased intangibles from these
non-GAAP measures, management believes that it is important for
investors to understand that such intangible assets were recorded
as part of purchase accounting and contribute to revenue
generation.
Income tax effects of non-GAAP adjustments are calculated using
the applicable statutory tax rate for the jurisdictions in which
the charges (benefits) are incurred, while taking into
consideration any valuation allowances. For those items which are
non-taxable, the tax expense (benefit) is calculated at 0%.
EnerSys does not provide a quantitative reconciliation of the
Company’s projected range for adjusted diluted earnings per share
for the third quarter and full year of fiscal 2025 to diluted
earnings per share, which is the most directly comparable GAAP
measure, in reliance on the unreasonable efforts exception provided
under Item 10(e)(1)(i)(B) of Regulation S-K. EnerSys' adjusted
diluted earnings per share guidance for the third quarter and full
year of fiscal 2025 excludes certain items, including but not
limited to certain non-cash, large and/or unpredictable charges and
benefits, charges from restructuring and exit activities,
impairment of goodwill and indefinite-lived intangibles,
acquisition and disposition activities, legal judgments,
settlements, or other matters, and tax positions, that are
inherently uncertain and difficult to predict, can be dependent on
future events that are less capable of being controlled or reliably
predicted by management and are not part of the Company's routine
operating activities can be dependent on future events that are
less capable of being controlled or reliably predicted by
management and are not part of the Company's routine operating
activities. Due to the uncertainty of the occurrence or timing of
these future excluded items, management cannot accurately forecast
many of these items for internal use and therefore cannot create a
quantitative adjusted diluted earnings per share for the third
quarter and full year of fiscal 2025 to diluted earnings per share
reconciliation without unreasonable efforts.
These non-GAAP disclosures have limitations as an analytical
tool, should not be viewed as a substitute for operating earnings,
Net earnings or net income determined in accordance with GAAP, and
should not be considered in isolation or as a substitute for
analysis of the Company's results as reported under GAAP, nor are
they necessarily comparable to non-GAAP performance measures that
may be presented by other companies. Management believes that this
non-GAAP supplemental information will be helpful in understanding
the Company's ongoing operating results. This supplemental
presentation should not be construed as an inference that the
Company's future results will be unaffected by similar adjustments
to Net earnings determined in accordance with GAAP.
A reconciliation of non-GAAP adjusted operating earnings is set
forth in the table below, providing a reconciliation of non-GAAP
adjusted operating earnings to the Company’s reported operating
results for its business segments. Corporate and other includes
amounts managed on a company-wide basis and not directly allocated
to any reportable segments, primarily relating to IRA production
tax credits. Also, included are start up costs for exploration of a
new lithium plant as well as start-up operating expenses from the
New Ventures operating segment.
Business Segment Operating Results
Quarter ended
($ millions)
September 29, 2024
Energy Systems
Motive Power
Specialty
Corporate and other
Total
Net Sales
$
382.1
$
366.7
$
134.9
$
—
$
883.7
Operating Earnings
$
17.5
$
56.3
$
0.3
$
25.3
$
99.4
Inventory step up to fair value relating
to recent acquisitions
—
—
1.9
—
$
1.9
Restructuring and other exit charges
0.7
1.1
0.4
—
2.2
Amortization of intangible assets
6.0
0.2
2.0
—
8.2
Integration costs
—
—
1.8
—
1.8
Acquisition activity expense
—
—
1.1
—
1.1
Adjusted Operating Earnings
$
24.2
$
57.6
$
7.5
$
25.3
$
114.6
Quarter ended
($ millions)
October 1, 2023
Energy Systems
Motive Power
Specialty
Corporate and other
Total
Net Sales
$
422.5
$
355.2
$
123.3
$
—
$
901.0
Operating Earnings
$
16.8
$
49.6
$
3.3
$
18.9
$
88.6
Restructuring and other exit charges
2.2
3.5
1.5
—
7.2
Amortization of intangible assets
6.3
0.2
0.7
—
7.2
Integration costs
0.2
—
—
—
0.2
Acquisition activity expense
—
0.1
—
—
0.1
Other
0.1
—
0.1
—
0.2
Adjusted Operating Earnings
$
25.6
$
53.4
$
5.6
$
18.9
$
103.5
Increase (Decrease) as a % from prior
year quarter
Energy Systems
Motive Power
Specialty
Corporate and other
Total
Net Sales
(9.6
)%
3.2
%
9.3
%
—
%
(1.9
)%
Operating Earnings
4.4
13.5
(92.3
)
33.8
12.2
Adjusted Operating Earnings
(4.7
)
7.7
31.3
33.8
10.7
NM = Not Meaningful
Six months ended
($ millions)
September 29, 2024
Energy Systems
Motive Power
Specialty
Corporate and other
Total
Net Sales
$
743.1
$
732.9
$
260.6
$
0.0
$
1,736.6
Operating Earnings
$
26.5
$
110.7
$
2.4
$
51.1
$
190.7
Inventory step up to fair value relating
to recent acquisitions
—
—
1.9
—
1.9
Restructuring and other exit charges
4.5
2.5
1.1
—
8.1
Amortization of intangible assets
12.0
0.4
2.7
—
15.1
Integration costs
0.2
—
1.8
—
2.0
Acquisition activity expense
—
—
2.5
—
2.5
Adjusted Operating Earnings
$
43.2
$
113.6
$
12.4
$
51.1
$
220.3
Six months ended
($ millions)
October 1, 2023
Energy Systems
Motive Power
Specialty
Corporate and other
Total
Net Sales
$
847.1
$
706.0
$
256.5
$
0.0
$
1,809.6
Operating Earnings
$
39.0
$
97.8
$
4.9
$
36.3
$
178.0
Inventory adjustment relating to exit
activities
—
—
3.1
—
3.1
Restructuring and other exit charges
2.7
5.0
5.8
—
13.5
Amortization of intangible assets
12.5
0.3
1.4
—
14.2
Integration costs
0.3
—
—
—
0.3
Acquisition activity expense
—
0.2
—
—
0.2
Other
0.8
0.4
0.2
—
1.4
Adjusted Operating Earnings
$
55.3
$
103.7
$
15.4
$
36.3
$
210.7
Increase (Decrease) as a % from prior
year
Energy Systems
Motive Power
Specialty
Corporate and other
Total
Net Sales
(12.3
)%
3.8
%
1.5
%
—
%
(4.0
)%
Operating Earnings
(31.8
)
13.1
(52.5
)
40.8
7.1
Adjusted Operating Earnings
(21.5
)
9.4
(20.6
)
40.8
4.5
Reconciliations of GAAP to Non-GAAP
Financial Measures (Unaudited)
The table below presents a reconciliation of Net Earnings to
EBITDA and Adjusted EBITDA:
Quarter ended
Six months ended
($ millions)
($ millions)
September 29, 2024
October 1, 2023
September 29, 2024
October 1, 2023
Net Earnings
82.3
$
65.2
$
152.4
$
132.0
Depreciation
17.1
15.4
33.7
31.0
Amortization
8.2
7.2
15.1
14.2
Interest
12.5
12.2
23.5
27.4
Income Taxes
1.9
8.2
11.1
14.9
EBITDA
122.0
108.2
235.8
219.5
Non-GAAP adjustments
7.0
8.2
14.5
19.0
Adjusted EBITDA
$
129.0
$
116.4
$
250.3
$
238.5
The following table provides the non-GAAP adjustments shown in
the reconciliation above:
Quarter ended
Six months ended
($ millions)
($ millions)
September 29, 2024
October 1, 2023
September 29, 2024
October 1, 2023
Inventory adjustment relating to exit
activities
$
—
$
—
$
—
$
3.1
Inventory step up to fair value relating
to recent acquisitions
1.9
—
1.9
—
Restructuring and other exit charges
2.2
7.2
8.1
13.5
Integration Costs
1.8
0.2
2.0
0.3
Acquisition expense
1.1
0.1
$
2.5
0.2
Other
—
0.7
$
—
1.9
Non-GAAP adjustments
$
7.0
$
8.2
$
14.5
$
19.0
The table below presents a reconciliation of Gross Profit and
Gross Margin to Adjusted Gross Profit and Adjusted Gross
Margin:
Quarter ended
Six months ended
($ millions)
($ millions)
September 29, 2024
October 1, 2023
September 29, 2024
October 1, 2023
Gross Profit as reported
$
252.1
$
239.6
$
490.5
$
479.9
Inventory adjustment relating to exit
activities
—
—
—
3.1
Inventory step up to fair value relating
to recent acquisitions
1.9
—
1.9
—
Adjusted Gross Profit
254.0
239.6
492.4
483.0
Gross Margin
28.5
%
26.6
%
28.2
%
26.5
%
Adjusted Gross Margin
28.7
%
26.6
%
28.4
%
26.7
%
The table below presents a reconciliation of Operating Cash Flow
to Free Cash Flow and Adjusted Free Cash Flow Conversion
percentages:
Quarter ended
Six months ended
($ millions)
($ millions)
September 29, 2024
October 1, 2023
September 29, 2024
October 1, 2023
Net cash provided by (used in) operating
activities
$
33.6
$
110.8
$
44.0
$
185.7
Less Capital Expenditures
(30.4
)
(19.8
)
(66.5
)
(35.9
)
Free Cash Flow
3.2
91.0
(22.5
)
149.8
Quarter ended
Six months ended
($ millions)
($ millions)
September 29, 2024
October 1, 2023
September 29, 2024
October 1, 2023
Net cash provided by (used in) operating
activities
$
33.6
$
110.8
$
44.0
$
185.7
Net earnings
82.3
65.2
152.4
132.0
Operating cash flow conversion %
40.8
%
169.9
%
28.9
%
140.7
%
Free cash flow
3.2
91.0
(22.5
)
149.8
Adjusted net earnings
86.5
76.5
167.5
155.1
Adjusted free cash flow conversion %
3.7
%
119.0
%
(13.4
)%
96.6
%
The following table provides a reconciliation of Net earnings to
EBITDA (non-GAAP) and adjusted EBITDA (non-GAAP) per credit
agreement for September 29, 2024 and October 1, 2023 to calculate
our net leverage ratio, in connection with the Fourth Amended
Credit Facility:
Last twelve months
September 29, 2024
October 1, 2023
(in millions, except ratios)
Net earnings as reported
$
289.5
$
242.4
Add back:
Depreciation and amortization
95.6
$
90.0
Interest expense
46.0
$
59.9
Income tax expense
19.3
38.2
EBITDA (non-GAAP)
450.4
$
430.5
Adjustments per credit agreement
definitions(1)
79.9
48.9
Adjusted EBITDA (non-GAAP) per credit
agreement(1)
$
530.3
479.4
Total net debt(2)
839.6
662.0
Leverage ratios:
Total net debt/credit adjusted EBITDA
ratio
1.6 X
1.4 X
(1)
The $79.9 million adjustment to EBITDA in
the last twelve months ending September 29, 2024 primarily related
to $29.7 million of non-cash stock compensation, $38.9 million of
restructuring and other exit charges, impairment of
indefinite-lived intangibles and write-down of other current assets
of $10.5 million. The $48.9 million adjustment to EBITDA in the
last twelve months ending October 1, 2023 primarily related to
$27.6 million of non-cash stock compensation, $17.6 million of
restructuring and other exit charges, impairment of
indefinite-lived intangibles and write-down of other current assets
of $3.6 million.
(2)
Debt includes finance lease obligations
and letters of credit and is net of all U.S. cash and cash
equivalents and foreign cash and investments, as defined in the
Fourth Amended Credit Facility. In the last twelve months ending
September 29, 2024 and October 1, 2023, the amounts deducted in the
calculation of net debt were U.S. cash and cash equivalents and
foreign cash investments of $407.9 million, and in fiscal 2023,
were $327.8 million.
Included below is a reconciliation of historical non-GAAP
adjusted Net earnings to reported amounts. Non-GAAP adjusted
operating earnings and historical Net earnings are calculated
excluding restructuring and other highlighted charges and credits.
The following tables provide additional information regarding
certain non-GAAP measures:
Quarter ended
(in millions, except share and
per share amounts)
September 29, 2024
October 1, 2023
Net earnings reconciliation
As reported Net Earnings
$
82.3
$
65.2
Non-GAAP adjustments:
Inventory step up to fair value relating
to recent acquisitions
1.9
(1)
—
Restructuring and other exit charges
2.2
(1)
7.2
(1)
Amortization of identified intangible
assets
8.2
(2)
7.2
(2)
Acquisition expense
1.1
(3)
0.1
(3)
Integration costs
1.8
(4)
0.2
(4)
Other
—
0.7
Income tax benefit from tax law changes
and litigation
(6.8
)
—
Income tax effect of above non-GAAP
adjustments
(4.2
)
(4.1
)
Non-GAAP adjusted Net earnings
$
86.5
$
76.5
Outstanding shares used in per share
calculations
Basic
40,165,080
40,922,959
Diluted
40,863,205
41,684,634
Non-GAAP adjusted Net earnings per
share:
Basic
$
2.15
$
1.87
Diluted
$
2.12
$
1.84
Reported Net earnings (Loss) per
share:
Basic
$
2.05
$
1.59
Diluted
$
2.01
$
1.56
Dividends per common share
$
0.24
$
0.225
The following table provides the line of business allocation of
the non-GAAP adjustments of items relating operating earnings (that
are allocated to lines of business) shown in the reconciliation
above:
Quarter ended
($ millions)
September 29, 2024
October 1, 2023
Pre-tax
Pre-tax
(1) Inventory step up to fair value
relating to recent acquisitions - Specialty
1.9
—
(1) Restructuring and other exit charges -
Energy Systems
0.7
2.2
(1) Restructuring and other exit charges -
Motive Power
1.1
3.5
(1) Restructuring and other exit charges -
Specialty
0.4
1.5
(2) Amortization of identified intangible
assets - Energy Systems
6.0
6.3
(2) Amortization of identified intangible
assets - Motive Power
0.2
0.2
(2) Amortization of identified intangible
assets - Specialty
2.0
0.7
(3) Acquisition expense - Motive Power
—
0.1
(3) Acquisition expense - Specialty
1.1
—
(4) Integration costs - Energy Systems
—
0.2
(4) Integration costs - Specialty
1.8
—
Total Non-GAAP adjustments
$
15.2
$
14.7
Six months ended
(in millions, except share and
per share amounts)
September 29, 2024
October 1, 2023
Net Earnings reconciliation
As reported Net Earnings
$
152.4
$
132.0
Non-GAAP adjustments:
Inventory step up to fair value relating
to recent acquisitions
1.9
(1)
Inventory adjustment relating to exit
activities
—
3.1
(1)
Restructuring and other exit charges
8.1
(1)
13.5
(1)
Amortization of identified intangible
assets
15.1
(2)
14.2
(2)
Acquisition activity expense
2.5
(3)
0.2
(3)
Integration costs
2.0
(4)
0.3
(4)
Other
—
1.9
Income tax benefit from tax law changes
and litigation
(6.8
)
—
Income tax effect of above non-GAAP
adjustments
(7.7
)
(10.1
)
Non-GAAP adjusted Net Earnings
$
167.5
$
155.1
Outstanding shares used in per share
calculations
Basic
40,184,546
40,930,146
Diluted
40,924,660
41,691,479
Non-GAAP adjusted Net Earnings per
share:
Basic
$
4.17
$
3.79
Diluted
$
4.09
$
3.72
Reported Net Earnings (Loss) per
share:
Basic
$
3.79
$
3.23
Diluted
$
3.72
$
3.17
Dividends per common share
$
0.465
$
0.40
The following table provides the line of business allocation of
the non-GAAP adjustments of items relating operating earnings (that
are allocated to lines of business) shown in the reconciliation
above:
Six months ended
($ millions)
September 29, 2024
October 1, 2023
Pre-tax
Pre-tax
(1) Inventory step up to fair value
relating to recent acquisitions - Specialty
1.9
—
(1) Inventory Adjustment relating to exit
activities - Specialty
—
3.1
(1) Restructuring and other exit charges -
Energy Systems
4.5
2.7
(1) Restructuring and other exit charges -
Motive Power
2.5
5.0
(1) Restructuring and other exit charges -
Specialty
1.1
5.8
(2) Amortization of identified intangible
assets - Energy Systems
12.0
12.5
(2) Amortization of identified intangible
assets - Motive Power
0.4
0.3
(2) Amortization of identified intangible
assets - Specialty
2.7
1.4
(3) Acquisition expense - Motive Power
—
0.2
(3) Acquisition expense - Specialty
2.5
—
(4) Integration costs - Energy Systems
0.2
0.3
(4) Integration costs - Specialty
1.8
—
Total Non-GAAP adjustments
$
29.6
$
31.3
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241106205282/en/
Lisa Hartman Vice President, Investor Relations and
Corporate Communications EnerSys 610-236-4040 E-mail:
investorrelations@enersys.com
Grafico Azioni Enersys (NYSE:ENS)
Storico
Da Dic 2024 a Gen 2025
Grafico Azioni Enersys (NYSE:ENS)
Storico
Da Gen 2024 a Gen 2025
