EnerSys Reports First Quarter Fiscal 2024 Results
- EnerSys achieved record gross margin of 26.4%, up 580 basis points from the prior year.
- The company reported record EPS of $1.60, more than double the prior year.
- Net sales reached $909M, a 1% increase compared to the first quarter of fiscal year 2023.
- Operating earnings increased by 78% to $89M, and adjusted operating earnings increased by 65% to $107.2M.
- Diluted EPS reached $1.60, a 113% increase, and adjusted diluted EPS reached $1.89, a 64% increase.
- EnerSys reduced net leverage to 1.5X EBITDA and generated operating cash flow of $75M.
- The company declared a 29% increase in the quarterly dividend to $0.225 per share.
- EnerSys published 2022 greenhouse gas emissions data for its value chain (Scope 3).
- None.
Delivers Record Gross Margin of
First Quarter Fiscal 2024 Highlights
(All comparisons against the first quarter of fiscal year 2023 unless otherwise noted)
-
Delivered net sales of
$909M 1% on customers normalizing inventory levels -
Achieved record GM of
26.4% , +580 bps, including$19M -
Generated operating earnings of
$89M 78% , and record adjusted operating earnings(2) of$107.2M 65% -
Realized record diluted EPS of
$1.60 113% , and record adjusted diluted EPS(1) of$1.89 64% -
Reduced net leverage(a) to 1.5X EBITDA on operating cash flow of
$75M + $147M -
On August 9, 2023, the Board of Directors declared a
29% increase in the company's quarterly dividend to$0.22 5$0.17 5 - On August 8, 2023, published 2022 value chain (Scope 3) greenhouse gas emissions data
Message from the CEO |
EnerSys delivered record first quarter results with operating earnings of
In view of our earnings growth, our Board of Directors approved an increase in our quarterly dividend to
At our recent investor day, we provided an in-depth update on our strategic plans, growth drivers, and long-term outlook. We also introduced our strategic framework of “Innovate, Optimize, and Accelerate”. We are focused on executing this strategy through innovative new product launches, furthering our operational excellence efforts, and deploying our IRA benefits to accelerate our strategy with energy transition to high density batteries, both Thin Plate Pure Lead and lithium-ion. Our agnostic approach to battery chemistry enables us to provide our customers with the best energy and power solutions to meet their needs.
We began the site selection process for the lithium battery gigafactory in
The opportunities in front of us are immense. We have a resilient business model and clear strategy to accelerate profitable growth. Our team is determined to execute and deliver on our fiscal and sustainability commitments to drive value creation for all of our stakeholders. We are proud to see the benefits of the investments we have made over the last several years have begun to materialize in our financial results.
David M. Shaffer, President and Chief Executive Officer, EnerSys
Key Financial Results and Metrics |
First quarter ended |
||||||||
In millions, except per share amounts |
July 2, 2023 |
|
July 3, 2022 |
|
Change |
||||
Net Sales |
$ |
908.6 |
|
$ |
899.0 |
|
|
1.1 |
% |
Diluted EPS (GAAP) |
$ |
1.60 |
|
$ |
0.75 |
|
$ |
0.85 |
|
Adjusted Diluted EPS (Non-GAAP)(1) |
$ |
1.89 |
|
$ |
1.15 |
|
$ |
0.74 |
|
Gross Margin (GAAP) |
$ |
240.3 |
|
$ |
185.5 |
|
$ |
54.8 |
|
Operating Earnings (GAAP) |
$ |
89.4 |
|
$ |
50.1 |
|
$ |
39.3 |
|
Adjusted Operating Earnings (Non-GAAP)(2) |
$ |
107.2 |
|
$ |
64.8 |
|
$ |
42.4 |
|
Net Earnings (GAAP) |
$ |
66.8 |
|
$ |
31.0 |
|
$ |
35.8 |
|
EBITDA (Non-GAAP)(3) |
$ |
111.4 |
|
$ |
72.0 |
|
$ |
39.4 |
|
Adjusted EBITDA (Non-GAAP)(3) |
$ |
122.2 |
|
$ |
85.5 |
|
$ |
36.7 |
|
Share Repurchases |
$ |
— |
|
$ |
22.9 |
|
$ |
(22.9 |
) |
Dividend per share |
$ |
0.175 |
|
$ |
0.175 |
|
$ |
— |
|
Total Capital Returned to Stockholders |
$ |
7.1 |
|
$ |
30.0 |
|
$ |
(22.9 |
) |
(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) Net Earnings are adjusted for depreciation, amortization, interest and income taxes to arrive at Non-GAAP EBITDA. 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
First Quarter 2024
Net sales for the first quarter of fiscal 2024 were
Net earnings attributable to EnerSys stockholders (“Net earnings”) for the first quarter of fiscal 2024 was
Net earnings for the first quarter of fiscal 2023 was
Excluding these highlighted items, adjusted Net earnings per diluted share for the first quarter of fiscal 2024, on a non-GAAP basis, were
In the first quarter of fiscal 2024 we introduced a new line of business, New Ventures, that includes energy storage and management systems for demand charge reduction, utility back-up power, and dynamic fast charging for electric vehicles. The financial results of the New Ventures segment includes start up operating expenses and is included in the Corporate and other line in our operating earnings.
Second Quarter 2024 Outlook
In the second quarter of fiscal 2024, we expect:
-
Adjusted diluted earnings per share in the range of
$1.77 $1.87 $0.42 $0.52 22% over the prior year, at the midpoint, reflecting stable demand trends and a healthy backlog. Note that the IRS has not yet issued additional clarification guidance related to section 45X which could materially increase or decrease the quantity of ourU.S. produced batteries that qualify for this credit. -
Gross margin in the range of
25.0% to27.0% , including 150bps to 250bps from IRA credits. -
For the full year of fiscal 2024, we expect capital expenditures to be approximately
$120 million
"While we are optimistic about the trajectory or our business and the supply chain environment is generally improving, we expect to continue to operate in a dynamic macro environment. We are managing our business to optimize opportunities while mitigating risk as we closely monitor headwinds including geopolitical tensions, higher interest rates and some persisting inflation," said Andrea Funk, EnerSys Chief Financial Officer.
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 first quarter 2024 financial results at 9:00 AM (EDT) Thursday, August 10, 2023. A live broadcast as well as a replay of the call can be accessed through the Investor Relations section of the company’s website at https://investor.enersys.com.
To join the live call, please register through the events section of our Investor Relations webpage at https://register.vevent.com/register/BI63a965adbeef4d0682e50d2698b481bd. 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, 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, 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. More information regarding EnerSys can be found at www.enersys.com.
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 buy back program, judicial or regulatory proceedings, and market share, as well as statements expressing optimism or pessimism about future operating results or benefits from its cash dividend, its stock buy back programs, application of Section 45X of the Internal Revenue Code, future responses to and effects of the COVID-19 pandemic, adverse developments with respect to the economic conditions in the
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, 2023. 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 |
||||
|
July 2, 2023 |
|
July 3, 2022 |
||
Net sales |
$ |
908.6 |
|
$ |
899.0 |
Gross profit |
|
240.3 |
|
|
185.5 |
Operating expenses |
|
144.6 |
|
|
127.1 |
Restructuring and other exit charges |
|
6.3 |
|
|
8.3 |
Operating earnings |
|
89.4 |
|
|
50.1 |
Earnings before income taxes |
|
73.5 |
|
|
36.8 |
Income tax expense |
|
6.7 |
|
|
5.8 |
Net earnings attributable to EnerSys stockholders |
$ |
66.8 |
|
$ |
31.0 |
|
|
|
|
||
Net reported earnings per common share attributable to EnerSys stockholders: |
|
|
|
||
Basic |
$ |
1.63 |
|
$ |
0.76 |
Diluted |
$ |
1.60 |
|
$ |
0.75 |
Dividends per common share |
$ |
0.175 |
|
$ |
0.175 |
Weighted-average number of common shares used in reported earnings per share calculations: |
|
|
|
||
Basic |
|
40,937,334 |
|
|
40,786,336 |
Diluted |
|
41,698,324 |
|
|
41,352,646 |
EnerSys Consolidated Condensed Balance Sheets (Unaudited) (In Thousands, Except Share and Per Share Data) |
||||||||
|
|
July 2, 2023 |
|
March 31, 2023 |
||||
Assets |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
258,342 |
|
|
$ |
346,665 |
|
Accounts receivable, net of allowance for doubtful accounts: July 2, 2023 - |
|
|
566,498 |
|
|
|
637,817 |
|
Inventories, net |
|
|
809,402 |
|
|
|
797,798 |
|
Prepaid and other current assets |
|
|
118,804 |
|
|
|
113,601 |
|
Total current assets |
|
|
1,753,046 |
|
|
|
1,895,881 |
|
Property, plant, and equipment, net |
|
|
512,970 |
|
|
|
513,283 |
|
Goodwill |
|
|
688,442 |
|
|
|
676,715 |
|
Other intangible assets, net |
|
|
354,662 |
|
|
|
360,412 |
|
Deferred taxes |
|
|
49,153 |
|
|
|
49,152 |
|
Other assets |
|
|
122,704 |
|
|
|
121,231 |
|
Total assets |
|
$ |
3,480,977 |
|
|
$ |
3,616,674 |
|
Liabilities and Equity |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Short-term debt |
|
$ |
30,962 |
|
|
$ |
30,642 |
|
Accounts payable |
|
|
343,336 |
|
|
|
378,641 |
|
Accrued expenses |
|
|
261,353 |
|
|
|
309,037 |
|
Total current liabilities |
|
|
635,651 |
|
|
|
718,320 |
|
Long-term debt, net of unamortized debt issuance costs |
|
|
907,768 |
|
|
|
1,041,989 |
|
Deferred taxes |
|
|
60,767 |
|
|
|
61,118 |
|
Other liabilities |
|
|
193,612 |
|
|
|
191,366 |
|
Total liabilities |
|
|
1,797,798 |
|
|
|
2,012,793 |
|
Commitments and contingencies |
|
|
|
|
||||
Equity: |
|
|
|
|
||||
Preferred Stock, |
|
|
— |
|
|
|
— |
|
Common Stock, |
|
|
565 |
|
|
|
560 |
|
Additional paid-in capital |
|
|
612,295 |
|
|
|
596,464 |
|
Treasury stock at cost, 15,099,676 shares held as of July 2, 2023 and 14,762,266 shares held as of March 31, 2023 |
|
|
(740,742 |
) |
|
|
(740,956 |
) |
Retained earnings |
|
|
1,989,588 |
|
|
|
1,930,148 |
|
Contra equity - indemnification receivable |
|
|
(2,463 |
) |
|
|
(2,463 |
) |
Accumulated other comprehensive loss |
|
|
(179,476 |
) |
|
|
(183,474 |
) |
Total EnerSys stockholders’ equity |
|
|
1,679,767 |
|
|
|
1,600,279 |
|
Nonredeemable noncontrolling interests |
|
|
3,412 |
|
|
|
3,602 |
|
Total equity |
|
|
1,683,179 |
|
|
|
1,603,881 |
|
Total liabilities and equity |
|
$ |
3,480,977 |
|
|
$ |
3,616,674 |
|
Nonredeemable noncontrolling interests |
|
|
3,412 |
|
|
|
3,602 |
|
Total equity |
|
|
1,683,179 |
|
|
|
1,603,881 |
|
Total liabilities and equity |
|
$ |
3,480,977 |
|
|
$ |
3,616,674 |
|
EnerSys Consolidated Condensed Statements of Cash Flows (Unaudited) (In Thousands) |
||||||||
|
|
Quarter ended |
||||||
|
|
July 2, 2023 |
|
July 3, 2022 |
||||
Cash flows from operating activities |
|
|
|
|
||||
Net earnings |
|
$ |
66,797 |
|
|
$ |
30,978 |
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation and amortization |
|
|
22,693 |
|
|
|
23,624 |
|
Write-off of assets relating to exit activities |
|
|
3,343 |
|
|
|
7,445 |
|
Derivatives not designated in hedging relationships: |
|
|
|
|
||||
Net (losses) gains |
|
|
503 |
|
|
|
(216 |
) |
Cash (settlements) proceeds |
|
|
657 |
|
|
|
(600 |
) |
Provision for doubtful accounts |
|
|
504 |
|
|
|
(173 |
) |
Deferred income taxes |
|
|
42 |
|
|
|
20 |
|
Non-cash interest expense |
|
|
410 |
|
|
|
487 |
|
Stock-based compensation |
|
|
7,933 |
|
|
|
5,330 |
|
(Gain) loss on disposal of property, plant, and equipment |
|
|
43 |
|
|
|
(40 |
) |
Changes in assets and liabilities: |
|
|
|
|
||||
Accounts receivable |
|
|
73,198 |
|
|
|
5,538 |
|
Inventories |
|
|
(10.965 |
) |
|
|
(81,454 |
) |
Prepaid and other current assets |
|
|
(4,089 |
) |
|
|
(5,465 |
) |
Other assets |
|
|
(484 |
) |
|
|
(886 |
) |
Accounts payable |
|
|
(39.307 |
) |
|
|
(33,073 |
) |
Accrued expenses |
|
|
(46.647 |
) |
|
|
(24,973 |
) |
Other liabilities |
|
|
315 |
|
|
|
1,567 |
|
Net cash provided by (used in) operating activities |
|
|
74,946 |
|
|
|
(71,891 |
) |
|
|
|
|
|
||||
Cash flows from investing activities |
|
|
|
|
||||
Capital expenditures |
|
|
(16,093 |
) |
|
|
(23,014 |
) |
Purchase of business |
|
|
(8,270 |
) |
|
|
— |
|
Proceeds from disposal of property, plant, and equipment |
|
|
44 |
|
|
|
139 |
|
Net cash (used in) investing activities |
|
|
(24,319 |
) |
|
|
(22,875 |
) |
|
|
|
|
|
||||
Cash flows from financing activities |
|
|
|
|
||||
Net (repayments) borrowings on short-term debt |
|
|
(404 |
) |
|
|
(8,022 |
) |
Proceeds from Second Amended Revolver borrowings |
|
|
80,000 |
|
|
|
163,200 |
|
Repayments of Second Amended Revolver borrowings |
|
|
(216,380 |
) |
|
|
(27,200 |
) |
Option proceeds, net |
|
|
7,654 |
|
|
|
— |
|
Payment of taxes related to net share settlement of equity awards |
|
|
— |
|
|
|
(633 |
) |
Purchase of treasury stock |
|
|
— |
|
|
|
(22,907 |
) |
Dividends paid to stockholders |
|
|
(7,173 |
) |
|
|
(7,108 |
) |
Other |
|
|
354 |
|
|
|
207 |
|
Net cash (used in) provided by financing activities |
|
|
(135,949 |
) |
|
|
97,537 |
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
(3,001 |
) |
|
|
(22,016 |
) |
Net decrease in cash and cash equivalents |
|
|
(88,323 |
) |
|
|
(19,245 |
) |
Cash and cash equivalents at beginning of period |
|
|
346,665 |
|
|
|
402,488 |
|
Cash and cash equivalents at end of period |
|
$ |
258,342 |
|
|
$ |
383,243 |
|
Reconciliations of GAAP to Non-GAAP Financial Measures
This press release contains financial information determined by methods other than in accordance with
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
EnerSys does not provide a quantitative reconciliation of the company’s projected range for adjusted diluted earnings per share for the first quarter of fiscal 2024 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 first quarter of fiscal 2024 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 second quarter of fiscal 2024 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 net sales and growth rates in constant currency are set forth in the table below, providing a reconciliation of non-GAAP constant currency net sales to the Company’s reported net sales for its business segments.
|
Quarter ended |
|
|
||||||
|
($ millions) |
|
|
||||||
|
July 2, 2023 |
|
July 3, 2022 |
|
Growth rate |
||||
Energy Systems reported net sales |
$ |
424.6 |
|
|
$ |
408.6 |
|
3.9 |
% |
Exchange rate effect |
|
3.1 |
|
|
|
|
|
||
Energy Systems constant currency net sales |
|
427.7 |
|
|
|
|
4.7 |
|
|
|
|
|
|
|
|
||||
Motive Power reported net sales |
$ |
350.8 |
|
|
$ |
367.9 |
|
(4.6 |
)% |
Exchange rate effect |
|
(0.4 |
) |
|
|
|
|
||
Motive Power constant currency net sales |
|
350.4 |
|
|
|
|
(4.7 |
) |
|
|
|
|
|
|
|
||||
Specialty reported net sales |
$ |
133.2 |
|
|
$ |
122.5 |
|
8.7 |
% |
Exchange rate effect |
|
(0.5 |
) |
|
|
|
|
||
Specialty constant currency net sales |
|
132.7 |
|
|
|
|
8.3 |
|
|
|
|
|
|
|
|
||||
Total reported net sales |
$ |
908.6 |
|
|
$ |
899.0 |
|
1.1 |
% |
Exchange rate effect |
|
2.2 |
|
|
|
|
|
||
Total constant currency net sales |
|
910.8 |
|
|
|
|
1.3 |
|
|
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) |
|||||||||||||
|
July 2, 2023 |
|||||||||||||
|
Energy Systems |
|
Motive Power |
|
Specialty |
|
Corporate and other |
|
Total |
|||||
Net Sales |
$ |
424.6 |
|
$ |
350.8 |
|
$ |
133.2 |
|
$ |
— |
|
$ |
908.6 |
|
|
|
|
|
|
|
|
|
|
|||||
Operating Earnings |
$ |
22.2 |
|
$ |
48.2 |
|
$ |
1.6 |
|
$ |
17.4 |
|
$ |
89.4 |
Inventory adjustment relating to exit activities |
|
— |
|
|
— |
|
|
3.1 |
|
|
— |
|
$ |
3.1 |
Restructuring and other exit charges |
|
0.5 |
|
|
1.5 |
|
|
4.3 |
|
|
— |
|
|
6.3 |
Amortization of intangible assets |
|
6.2 |
|
|
0.1 |
|
|
0.7 |
|
|
— |
|
|
7.0 |
Other |
|
0.8 |
|
|
0.5 |
|
|
0.1 |
|
|
— |
|
|
1.4 |
Adjusted Operating Earnings |
$ |
29.7 |
|
$ |
50.3 |
|
$ |
9.8 |
|
$ |
17.4 |
|
$ |
107.2 |
|
Quarter ended |
|||||||||||||
|
($ millions) |
|||||||||||||
|
July 3, 2022 |
|||||||||||||
|
Energy Systems |
|
Motive Power |
|
Specialty |
|
Corporate and other |
|
Total |
|||||
Net Sales |
$ |
408.6 |
|
$ |
367.9 |
|
$ |
122.5 |
|
$ |
— |
|
$ |
899.0 |
|
|
|
|
|
|
|
|
|
|
|||||
Operating Earnings |
$ |
7.5 |
|
$ |
34.1 |
|
$ |
8.5 |
|
$ |
— |
|
$ |
50.1 |
Restructuring and other exit charges |
|
0.2 |
|
|
8.1 |
|
|
— |
|
|
— |
|
|
8.3 |
Amortization of intangible assets |
|
6.0 |
|
|
— |
|
|
0.4 |
|
|
— |
|
|
6.4 |
Adjusted Operating Earnings |
$ |
13.7 |
|
$ |
42.2 |
|
$ |
8.9 |
|
$ |
— |
|
$ |
64.8 |
|
|
|
|
|
|
|
|
|
|
|||||
Increase (Decrease) as a % from prior year quarter |
Energy Systems |
|
Motive Power |
|
Specialty |
|
Corporate and other |
|
Total |
||||
Net Sales |
3.9 |
% |
|
(4.6 |
)% |
|
8.7 |
% |
|
NM |
|
1.1 |
% |
Operating Earnings |
NM |
|
|
41.3 |
|
|
(81.0 |
) |
|
NM |
|
78.4 |
|
Adjusted Operating Earnings |
NM |
|
|
19.1 |
|
|
9.9 |
|
|
NM |
|
65.4 |
|
NM = Not Meaningful |
|||||||||||||
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 |
||||
|
($ millions) |
||||
|
July 2, 2023 |
|
July 3, 2022 |
||
Net Earnings |
$ |
66.8 |
|
$ |
31.0 |
Depreciation |
|
15.6 |
|
|
15.5 |
Amortization |
|
7.1 |
|
|
8.1 |
Interest |
|
15.2 |
|
|
11.6 |
Income Taxes |
|
6.7 |
|
|
5.8 |
EBITDA |
|
111.4 |
|
|
72.0 |
Non-GAAP adjustments |
|
10.8 |
|
|
13.5 |
Adjusted EBITDA |
$ |
122.2 |
|
$ |
85.5 |
The following table provides the non-GAAP adjustments shown in the reconciliation above:
|
Quarter ended |
||||
|
($ millions) |
||||
|
July 2, 2023 |
|
July 3, 2022 |
||
Inventory adjustment relating to exit activities |
$ |
3.1 |
|
$ |
0.0 |
Restructuring and other exit charges |
|
6.3 |
|
|
8.3 |
Other |
|
1.4 |
|
|
— |
Remeasurement of monetary assets included in other (income) expense relating to exit from |
|
— |
|
|
5.2 |
Non-GAAP adjustments |
$ |
10.8 |
|
$ |
13.5 |
The table below presents a reconciliation of Operating Cash Flow to Free Cash Flow:
|
|
Quarter Ended |
||||||
|
|
July 2, 2023 |
|
July 3, 2022 |
||||
Net cash provided by (used in) operating activities |
|
|
74,946 |
|
|
|
(71,891 |
) |
Less Capital Expenditures |
|
|
(16,093 |
) |
|
|
(23,014 |
) |
Free Cash Flow |
|
$ |
58,853 |
|
|
$ |
(94,905 |
) |
The following table provides a reconciliation of Net earnings to EBITDA (non-GAAP) and adjusted EBITDA (non-GAAP) per credit agreement for July 2, 2023 and July 3, 2022, in connection with the Third Amended Credit Facility:
|
|
Last twelve months |
||||
|
|
July 2, 2023 |
|
July 3, 2022 |
||
|
|
(in millions, except ratios) |
||||
Net earnings as reported |
|
$ |
211.6 |
|
$ |
131.0 |
Add back: |
|
|
|
|
||
Depreciation and amortization |
|
|
90.2 |
|
|
95.1 |
Interest expense |
|
|
63.3 |
|
|
40.2 |
Income tax expense |
|
|
35.7 |
|
|
27.4 |
EBITDA (non-GAAP) |
|
$ |
400.8 |
|
$ |
293.7 |
Adjustments per credit agreement definitions(1) |
|
|
50.1 |
|
|
53.8 |
Adjusted EBITDA (non-GAAP) per credit agreement(1) |
|
$ |
450.9 |
|
$ |
347.5 |
Total net debt(2) |
|
$ |
690.1 |
|
$ |
1,048.8 |
Leverage ratios: |
|
|
|
|
||
Total net debt/credit adjusted EBITDA ratio |
|
1.5 X |
|
3.0 X |
||
(1) |
The |
|
(2) |
Debt includes finance lease obligations and letters of credit and is net of all |
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) |
|
||||||
|
July 2, 2023 |
|
July 3, 2022 |
|
||||
Net earnings reconciliation |
|
|
|
|
||||
As reported Net Earnings |
$ |
66.8 |
|
|
$ |
31.0 |
|
|
Non-GAAP adjustments: |
|
|
|
|
||||
Inventory adjustment relating to exit activities |
|
3.1 |
|
(1) |
|
— |
|
(1) |
Restructuring and other exit charges |
|
6.3 |
|
(2) |
|
8.3 |
|
(2) |
Amortization of identified intangible assets |
|
7.0 |
|
(3) |
|
6.4 |
|
(3) |
Remeasurement of monetary assets included in other (income) expense relating to exit from |
|
— |
|
|
|
5.2 |
|
|
Other |
|
1.4 |
|
(4) |
|
— |
|
(4) |
Income tax effect of above non-GAAP adjustments |
|
(6.0 |
) |
|
|
(3.4 |
) |
|
Non-GAAP adjusted Net earnings |
$ |
78.6 |
|
|
$ |
47.5 |
|
|
|
|
|
|
|
||||
Outstanding shares used in per share calculations |
|
|
|
|
||||
Basic |
|
40,937,334 |
|
|
|
40,786,336 |
|
|
Diluted |
|
41,698,324 |
|
|
|
41,352,646 |
|
|
Non-GAAP adjusted Net earnings per share: |
|
|
|
|
||||
Basic |
$ |
1.92 |
|
|
$ |
1.16 |
|
|
Diluted |
$ |
1.89 |
|
|
$ |
1.15 |
|
|
|
|
|
|
|
||||
Reported Net earnings (Loss) per share: |
|
|
|
|
||||
Basic |
$ |
1.63 |
|
|
$ |
0.76 |
|
|
Diluted |
$ |
1.60 |
|
|
$ |
0.75 |
|
|
Dividends per common share |
$ |
0.175 |
|
|
$ |
0.175 |
|
|
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) |
||||
|
|
July 2, 2023 |
|
July 3, 2022 |
||
|
|
Pre-tax |
|
Pre-tax |
||
(1) Inventory adjustment relating to exit activities - Specialty |
|
|
3.1 |
|
|
— |
(2) Restructuring and other exit charges - Energy Systems |
|
|
0.5 |
|
|
0.2 |
(2) Restructuring and other exit charges - Motive Power |
|
|
1.5 |
|
|
8.1 |
(2) Restructuring and other exit charges - Specialty |
|
|
4.3 |
|
|
— |
(3) Amortization of identified intangible assets - Energy Systems |
|
|
6.2 |
|
|
6.0 |
(3) Amortization of identified intangible assets - Motive |
|
|
0.1 |
|
|
— |
(3) Amortization of identified intangible assets acquisitions - Specialty |
|
|
0.7 |
|
|
0.4 |
(4) Other - Energy Systems |
|
|
0.8 |
|
|
— |
(4) Other - Motive |
|
|
0.5 |
|
|
— |
(4) Other - Specialty |
|
|
0.1 |
|
|
— |
Total Non-GAAP adjustments |
|
$ |
17.8 |
|
$ |
14.7 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230809831122/en/
Lisa Hartman
Investor Relations and Financial Media
EnerSys
610-236-4040
E-mail: investorrelations@enersys.com
Shawn Salvatore
Public Relations
Harris, Baio & McCullough
(215) 440-9800
E-mail: shawn@hbmadv.com
Source: EnerSys
FAQ
What are EnerSys' first quarter fiscal 2024 results?
What were EnerSys' operating earnings and adjusted operating earnings for the first quarter?
What were EnerSys' diluted EPS and adjusted diluted EPS for the first quarter?
Did EnerSys reduce its net leverage in the first quarter?
What was the increase in EnerSys' quarterly dividend?
