In a release issued under the same headline earlier today
by EnerSys (NYSE: ENS) please note that the bulleted
subheads have changed. The corrected release follows:
- $907 million record quarterly net sales +11.5% YOY
- Backlog grows to $1.3B on robust market demand across all
business segments
- Q4'22 price outpaced cost, driving sequential earnings
improvement despite new macro headwinds
- Returned $186 million to stockholders through share buybacks
and dividends in FY’22
- Launched first comprehensive sustainability report in April
2022
EnerSys (NYSE: ENS), the global leader in stored energy
solutions for industrial applications, announced today results for
its fourth quarter and full year of fiscal 2022, which ended on
March 31, 2022.
Key Financial Results
and Metrics |
Fourth Quarter ended |
|
Full Year ended |
In
millions, except per share amounts |
March 31,2022 |
|
March 31,2021 |
|
Change |
|
March 31,2022 |
|
March 31,2021 |
|
Change |
Net Sales |
$ |
907.0 |
|
|
$ |
813.5 |
|
|
|
11.5 |
% |
|
$ |
3,357.3 |
|
|
$ |
2,977.9 |
|
|
|
12.7 |
% |
Diluted EPS
(GAAP) |
$ |
0.67 |
|
|
$ |
0.78 |
|
|
$ |
(0.11 |
) |
|
$ |
3.36 |
|
|
$ |
3.32 |
|
|
$ |
0.04 |
|
Adjusted Diluted EPS
(non-GAAP) |
$ |
1.20 |
|
|
$ |
1.30 |
|
|
$ |
(0.10 |
) |
|
$ |
4.47 |
|
|
$ |
4.49 |
|
|
$ |
(0.02 |
) |
Operating Earnings
(GAAP) |
$ |
44.5 |
|
|
$ |
51.7 |
|
|
$ |
(7.2 |
) |
|
$ |
206.2 |
|
|
$ |
216.4 |
|
|
$ |
(10.2 |
) |
Adjusted Operating
Earnings (Non-GAAP)(1) |
$ |
66.8 |
|
|
$ |
78.4 |
|
|
$ |
(11.6 |
) |
|
$ |
263.6 |
|
|
$ |
284.2 |
|
|
$ |
(20.6 |
) |
EBITDA
(Non-GAAP)(2) |
$ |
71.8 |
|
|
$ |
76.2 |
|
|
$ |
(4.4 |
) |
|
$ |
307.5 |
|
|
$ |
302.9 |
|
|
$ |
4.6 |
|
Adjusted EBITDA
(Non-GAAP)(2) |
$ |
87.8 |
|
|
$ |
96.9 |
|
|
$ |
(9.1 |
) |
|
$ |
339.5 |
|
|
$ |
345.4 |
|
|
$ |
(5.9 |
) |
Share
Repurchases |
$ |
41.8 |
|
|
$ |
— |
|
|
$ |
41.8 |
|
|
$ |
156.4 |
|
|
$ |
— |
|
|
$ |
156.4 |
|
Dividend per
share |
$ |
0.175 |
|
|
$ |
0.175 |
|
|
$ |
— |
|
|
$ |
0.70 |
|
|
$ |
0.70 |
|
|
$ |
— |
|
Total Capital Returned
to Stockholders |
$ |
49.0 |
|
|
$ |
7.5 |
|
|
$ |
41.50 |
|
|
$ |
186.0 |
|
|
$ |
30.0 |
|
|
$ |
156.0 |
|
(1) Operating Earnings adjusted for 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. A reconciliation of
operating earnings to Non-GAAP adjusted earnings are provided in
tables under the section titled Business Segment Operating
Results.
(2) 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 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.
The March quarter marked a strong finish to a challenging year.
Demand across all segments continued to surge, with fourth quarter
net sales of $907 million eclipsing $900 million for the first time
in our company’s history and our backlog growing to $1.3 billion,
breaking new records for the third consecutive quarter. Our pricing
actions are continuing to catch up with our significant cost
increases, driving a 19% sequential increase in adjusted diluted
EPS despite ongoing and mounting supply chain headwinds, labor
shortages, and historic inflation levels. While pricing has not yet
caught up with the persisting inflation endured this fiscal year,
we are pleased with the trajectory our teams are making to
recapture our underlying financial potential. For reference, the
inflation and supply chain disruptions created nearly $3 per share
of sequential pressure in fiscal 2022. Approximately two-thirds of
this pressure was offset in the fiscal year as we continue to chase
these pressures with price and mix.
We achieved several key milestones in fiscal 2022, including the
launch and UL safety listing of our high-performance NexSys®
lithium iON batteries which feature an integrated Battery
Management System (BMS) that performs auto-diagnosis, voltage
limitation, and communication of performance data. We also exceeded
our capacity goal for our Thin Plate Pure Lead (TPPL) batteries.
Customer demand for this proprietary technology across all of our
business segments continues to outpace our ability to supply. We
expect to benefit further from the strength of this demand as we
make progress toward increasing capacity by an additional $200
million in fiscal 2023. I am also pleased to note we made
significant progress on our ESG goals, including several
sustainability and environment updates that culminated in the
publication of our first comprehensive sustainability report in
April 2022. The report highlights the critical role our power and
energy solutions play in building a resilient, low-carbon future
and are a key component to decarbonization globally.
As we enter fiscal 2023, we expect to face ongoing challenges
with continued supply chain constraints and inflation exacerbated
by the senseless conflict between Russia and Ukraine and the
resurgence of Covid in China. We remain focused on what is in our
control, catching inflation with ongoing price increases,
navigating supply disruptions, and improving manufacturing cost
performance. I am proud of our employees’ resilience and proven
ability to address these challenges head on. Despite these
near-term headwinds, we are optimistic about our ability to
persevere and capitalize on the opportunities ahead of us. We
believe we are well positioned for accelerated growth once the
current macro headwinds subside. We are committed to being good
corporate citizens and delivering long-term value to our
shareholders through profitable growth and a disciplined capital
allocation strategy.
David M. Shaffer, President and Chief Executive Officer,
EnerSys
Summary of Results
Fourth Quarter 2022
Net sales for the fourth quarter of fiscal 2022 were $907.0
million, an increase of 11.5% from the prior year fourth quarter
net sales of $813.5 million and increased 7.5% sequentially from
the third quarter of fiscal 2022 net sales of $844.0 million. The
increase compared to prior year quarter was the result of an 8%
increase in organic volume resulting primarily from strong demand
arising from robust markets and the easing of the pandemic and a 6%
increase in pricing, partially offset by a 2% decrease in foreign
currency translation impact. The sequential increase was due to a
6% increase in organic volume and a 2% increase in pricing.
Net earnings attributable to EnerSys stockholders (“Net
earnings”) for the fourth quarter of fiscal 2022 was $28.1 million,
or $0.67 per diluted share, which included an unfavorable
highlighted net of tax impact of $22.0 million, or $0.53 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 fourth quarter of fiscal 2021 was $33.8
million, or $0.78 per diluted share, which included an unfavorable
highlighted net of tax impact of $22.7 million, or $0.52 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 fourth quarter of fiscal 2022, on a non-GAAP
basis, were $1.20, compared to the guidance of $1.11 to $1.21 per
diluted share for the fourth quarter given by the Company on
February 9, 2022. These earnings compare to the prior year fourth
quarter adjusted Net earnings of $1.30 per diluted share. Please
refer to the section included herein under the heading
“Reconciliation of 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 March 31, 2022 and March 31,
2021.
Summary of Results
Fiscal Year 2022
Net sales for the twelve months of fiscal 2022 were $3,357.3
million, an increase of 12.7% from the prior year twelve months net
sales of $2,977.9 million. This increase was due to a 10% increase
in organic volume resulting primarily from strong demand and a 3%
increase in pricing.
Net earnings for the twelve months of fiscal 2022 was $143.9
million, or $3.36 per diluted share, which included an unfavorable
highlighted net of tax impact of $47.1 million, or $1.11 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 twelve months of fiscal 2021 was $143.3
million, or $3.32 per diluted share, which included an unfavorable
highlighted net of tax impact of $50.8 million, or $1.17 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 twelve months of
fiscal 2022, on a non-GAAP basis, were $4.47. This compares to the
prior year twelve months adjusted Net earnings of $4.49 per diluted
share. Please refer to the section included herein under the
heading “Reconciliation of Non-GAAP Financial Measures” for a
discussion of the Company’s use of non-GAAP adjusted financial
information.
First Quarter 2023 Outlook
Macro headwinds from supply chain constraints, increasing
interest rates and increased inflationary challenges have only been
fueled by geopolitical events of the past quarter, and we
anticipate these will not dramatically subside this calendar year.
We will continue to take necessary pricing actions and expect to
see ongoing mix benefits of our product redesign and re-sourcing
efforts continuing throughout the year. We remain well-positioned
to capitalize heavily on robust market demand in exciting
end-markets, our strong order book, and price stickiness once the
current macro environment normalizes, and we are tracking to our
strategic plan. For the first quarter of fiscal 2023, we expect
adjusted diluted earnings per share in the range of $1.10 to $1.20,
with our pricing keeping pace with mounting inflation and FX gains
in the fourth quarter of fiscal 2022 not repeating. We expect our
gross margin for the first quarter of fiscal 2023 to be in the
range of 21% - 23%. For the full year of fiscal 2023 we expect
capital expenditure to be approximately $100 million.
Conference Call and Webcast Details
The Company will host a conference call to discuss its fourth
quarter and full year 2022 financial results at 9:00 AM (EST)
Thursday, May 26, 2022. 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.
The conference call can be accessed by dialing 877-359-9508
(domestic) or +1-224-357-2393 (international); Passcode: 8598259.
The replay will be available from 12:00 a.m. on May 26, 2022
through 12:00 a.m. on June 25, 2022. The replay numbers are
855-859-2056 (domestic) or +1-404-537-3406 (international);
Passcode: 8598259.
About EnerSys
EnerSys is the global leader in stored energy solutions for
industrial applications, 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. Energy
Systems, which combine enclosures, power conversion, power
distribution and energy storage, 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. EnerSys also provides aftermarket and
customer support services to its customers in over 100 countries
through its sales and manufacturing locations around the world.
With the NorthStar acquisition, EnerSys has solidified its position
as the market leader for premium Thin Plate Pure Lead batteries
which are sold across all three lines of business. 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,
future responses to and effects of the COVID-19 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, 2022. No undue
reliance should be placed on any forward-looking statements.
CONTACT
Lisa Hartman Investor Relations and Financial
Media EnerSys 610-236-4040 E-mail:
investorrelations@enersys.com
Melissa Maycott Public Relations Manager
Harris, Baio & McCullough 215-440-9800 E-mail:
melissa@hbmadv.com
EnerSys Consolidated
Condensed Statements of Income (Unaudited)(In
millions, except share and per share data)
|
Quarter ended |
|
Twelve months ended |
|
March 31, 2022 |
|
March 31, 2021 |
|
March 31, 2022 |
|
March 31, 2021 |
Net sales |
$ |
907.0 |
|
|
$ |
813.5 |
|
|
$ |
3,357.3 |
|
|
$ |
2,977.9 |
|
Gross profit |
|
194.6 |
|
|
|
197.3 |
|
|
|
750.0 |
|
|
|
739.1 |
|
Operating expenses |
|
140.3 |
|
|
|
124.9 |
|
|
|
520.8 |
|
|
|
482.3 |
|
Restructuring and other exit
charges |
|
5.6 |
|
|
|
20.7 |
|
|
|
18.8 |
|
|
|
40.4 |
|
Impairment of indefinite-lived
intangibles |
|
1.2 |
|
|
|
— |
|
|
|
1.2 |
|
|
|
— |
|
Loss on assets held for
sale |
|
3.0 |
|
|
|
— |
|
|
|
3.0 |
|
|
|
— |
|
Operating earnings |
|
44.5 |
|
|
|
51.7 |
|
|
|
206.2 |
|
|
|
216.4 |
|
Earnings before income
taxes |
|
38.9 |
|
|
|
43.2 |
|
|
|
173.9 |
|
|
|
170.1 |
|
Income tax expense |
|
10.8 |
|
|
|
9.4 |
|
|
|
30.0 |
|
|
|
26.8 |
|
Net earnings attributable to
EnerSys stockholders |
$ |
28.1 |
|
|
$ |
33.8 |
|
|
$ |
143.9 |
|
|
$ |
143.3 |
|
|
|
|
|
|
|
|
|
Net reported earnings per
common share attributable to EnerSys stockholders: |
|
|
|
|
|
|
|
Basic |
$ |
0.68 |
|
|
$ |
0.79 |
|
|
$ |
3.42 |
|
|
$ |
3.37 |
|
Diluted |
$ |
0.67 |
|
|
$ |
0.78 |
|
|
$ |
3.36 |
|
|
$ |
3.32 |
|
Dividends per common share |
$ |
0.175 |
|
|
$ |
0.175 |
|
|
$ |
0.70 |
|
|
$ |
0.70 |
|
Weighted-average number of
common shares used in reported earnings per share
calculations: |
|
|
|
|
|
|
|
Basic |
|
41,243,629 |
|
|
|
42,686,413 |
|
|
|
42,106,337 |
|
|
|
42,548,449 |
|
Diluted |
|
41,843,270 |
|
|
|
43,587,698 |
|
|
|
42,783,373 |
|
|
|
43,224,403 |
|
EnerSysConsolidated
Balance Sheets(In Thousands, Except Share and Per
Share Data)
|
|
March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
402,488 |
|
|
$ |
451,808 |
|
Accounts receivable, net of
allowance for doubtful accounts (2022–$12,219; 2021–$12,992) |
|
|
719,434 |
|
|
|
603,581 |
|
Inventories, net |
|
|
715,712 |
|
|
|
518,247 |
|
Prepaid and other current
assets |
|
|
155,559 |
|
|
|
117,681 |
|
Total current assets |
|
|
1,993,193 |
|
|
|
1,691,317 |
|
Property, plant, and
equipment, net |
|
|
503,264 |
|
|
|
497,056 |
|
Goodwill |
|
|
700,640 |
|
|
|
705,593 |
|
Other intangible assets,
net |
|
|
396,202 |
|
|
|
430,898 |
|
Deferred taxes |
|
|
60,479 |
|
|
|
65,212 |
|
Other assets |
|
|
82,868 |
|
|
|
72,721 |
|
Total assets |
|
$ |
3,736,646 |
|
|
$ |
3,462,797 |
|
Liabilities and Equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Short-term debt |
|
$ |
55,084 |
|
|
$ |
34,153 |
|
Current portion of finance
leases |
|
|
185 |
|
|
|
236 |
|
Accounts payable |
|
|
393,096 |
|
|
|
323,876 |
|
Accrued expenses |
|
|
289,765 |
|
|
|
318,723 |
|
Total current liabilities |
|
|
738,130 |
|
|
|
676,988 |
|
Long-term debt, net of
unamortized debt issuance costs |
|
|
1,243,002 |
|
|
|
969,618 |
|
Finance leases |
|
|
231 |
|
|
|
435 |
|
Deferred taxes |
|
|
78,228 |
|
|
|
76,412 |
|
Other liabilities |
|
|
183,780 |
|
|
|
195,768 |
|
Total liabilities |
|
|
2,243,371 |
|
|
|
1,919,221 |
|
Commitments and
contingencies |
|
|
|
|
Equity: |
|
|
|
|
Preferred Stock, $0.01 par
value, 1,000,000 shares authorized, no shares issued or outstanding
at March 31, 2022 and at March 31, 2021 |
|
|
— |
|
|
|
— |
|
Common Stock, $0.01 par value
per share, 135,000,000 shares authorized, 55,748,924 shares issued
and 40,986,658 shares outstanding at March 31, 2022; 55,552,810
shares issued and 42,753,020 shares outstanding at March 31,
2021 |
|
|
557 |
|
|
|
555 |
|
Additional paid-in
capital |
|
|
571,464 |
|
|
|
554,168 |
|
Treasury stock at cost,
14,762,266 shares held as of March 31, 2022 and 12,799,790 shares
held as of March 31, 2021 |
|
|
(719,119 |
) |
|
|
(563,481 |
) |
Retained earnings |
|
|
1,783,586 |
|
|
|
1,669,751 |
|
Contra equity -
indemnification receivable |
|
|
(3,620 |
) |
|
|
(5,355 |
) |
Accumulated other
comprehensive loss |
|
|
(143,495 |
) |
|
|
(115,883 |
) |
Total EnerSys stockholders’
equity |
|
|
1,489,373 |
|
|
|
1,539,755 |
|
Nonredeemable noncontrolling
interests |
|
|
3,902 |
|
|
|
3,821 |
|
Total equity |
|
|
1,493,275 |
|
|
|
1,543,576 |
|
Total liabilities and
equity |
|
$ |
3,736,646 |
|
|
$ |
3,462,797 |
|
EnerSysConsolidated
Statements of Cash Flows(In
Thousands)
|
|
Fiscal year ended March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2020 |
|
Cash flows from
operating activities |
|
|
|
|
|
|
Net earnings |
|
$ |
143,911 |
|
|
$ |
143,374 |
|
|
$ |
137,116 |
|
Adjustments to reconcile net
earnings to net cash provided by operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
95,878 |
|
|
|
94,082 |
|
|
|
87,344 |
|
Write-off of assets relating to restructuring and other exit
charges |
|
|
6,503 |
|
|
|
10,231 |
|
|
|
10,986 |
|
Loss on assets held for sale |
|
|
2,973 |
|
|
|
— |
|
|
|
— |
|
Impairment of goodwill |
|
|
— |
|
|
|
— |
|
|
|
39,713 |
|
Impairment of indefinite-lived intangibles |
|
|
1,178 |
|
|
|
— |
|
|
|
4,549 |
|
Derivatives not designated in hedging relationships: |
|
|
|
|
|
|
Net losses (gains) |
|
|
157 |
|
|
|
(430 |
) |
|
|
178 |
|
Cash proceeds (settlements) |
|
|
255 |
|
|
|
905 |
|
|
|
(793 |
) |
Provision for doubtful accounts |
|
|
2,621 |
|
|
|
178 |
|
|
|
4,821 |
|
Deferred income taxes |
|
|
1,115 |
|
|
|
(8,994 |
) |
|
|
(16,486 |
) |
Non-cash interest expense |
|
|
2,107 |
|
|
|
2,072 |
|
|
|
1,673 |
|
Stock-based compensation |
|
|
24,289 |
|
|
|
19,817 |
|
|
|
20,780 |
|
Gain on disposal of property, plant, and equipment |
|
|
(490 |
) |
|
|
(3,883 |
) |
|
|
(86 |
) |
Changes in assets and
liabilities, net of effects of acquisitions: |
|
|
|
|
|
|
Accounts receivable |
|
|
(128,956 |
) |
|
|
8,713 |
|
|
|
26,486 |
|
Inventories |
|
|
(212,839 |
) |
|
|
24,176 |
|
|
|
(9,379 |
) |
Prepaid and other current assets |
|
|
(32,044 |
) |
|
|
27,292 |
|
|
|
(17,508 |
) |
Other assets |
|
|
270 |
|
|
|
424 |
|
|
|
3,089 |
|
Accounts payable |
|
|
65,316 |
|
|
|
20,797 |
|
|
|
(33,490 |
) |
Accrued expenses |
|
|
(38,578 |
) |
|
|
32,357 |
|
|
|
7,055 |
|
Other liabilities |
|
|
749 |
|
|
|
(12,736 |
) |
|
|
(12,650 |
) |
Net cash (used in) provided by
operating activities |
|
|
(65,585 |
) |
|
|
358,375 |
|
|
|
253,398 |
|
|
|
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
|
|
Capital expenditures |
|
|
(74,041 |
) |
|
|
(70,020 |
) |
|
|
(101,425 |
) |
Purchase of businesses |
|
|
— |
|
|
|
— |
|
|
|
(176,548 |
) |
Proceeds from disposal of
facility |
|
|
3,268 |
|
|
|
— |
|
|
|
720 |
|
Insurance proceeds relating to
property, plant and equipment |
|
|
— |
|
|
|
4,800 |
|
|
|
403 |
|
Proceeds from disposal of
property, plant, and equipment |
|
|
1,540 |
|
|
|
176 |
|
|
|
2,031 |
|
Net cash used in investing
activities |
|
|
(69,233 |
) |
|
|
(65,044 |
) |
|
|
(274,819 |
) |
|
|
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
|
|
Net borrowings (repayments) on
short-term debt |
|
|
20,556 |
|
|
|
(15,934 |
) |
|
|
(5,325 |
) |
Proceeds from Second Amended
2017 Revolver borrowings |
|
|
523,400 |
|
|
|
102,000 |
|
|
|
386,700 |
|
Proceeds from 2027 Notes |
|
|
— |
|
|
|
— |
|
|
|
300,000 |
|
Repayments of Second Amended
2017 Revolver borrowings |
|
|
(88,400 |
) |
|
|
(210,000 |
) |
|
|
(517,700 |
) |
Repayments of Second Amended
2017 Term Loan |
|
|
(161,447 |
) |
|
|
(39,589 |
) |
|
|
(28,138 |
) |
Debt issuance costs |
|
|
(2,952 |
) |
|
|
— |
|
|
|
(4,607 |
) |
Finance lease obligations and
other |
|
|
810 |
|
|
|
650 |
|
|
|
995 |
|
Option proceeds, net |
|
|
1,336 |
|
|
|
9,114 |
|
|
|
1,417 |
|
Payment of taxes related to
net share settlement of equity awards |
|
|
(9,150 |
) |
|
|
(5,153 |
) |
|
|
(6,393 |
) |
Purchase of treasury
stock |
|
|
(156,366 |
) |
|
|
— |
|
|
|
(34,561 |
) |
Dividends paid to
stockholders |
|
|
(29,353 |
) |
|
|
(29,812 |
) |
|
|
(29,705 |
) |
Net cash provided by (used in)
financing activities |
|
|
98,434 |
|
|
|
(188,724 |
) |
|
|
62,683 |
|
Effect of exchange rate
changes on cash and cash equivalents |
|
|
(12,936 |
) |
|
|
20,222 |
|
|
|
(13,495 |
) |
Net (decrease) increase in
cash and cash equivalents |
|
|
(49,320 |
) |
|
|
124,829 |
|
|
|
27,767 |
|
Cash and cash equivalents at
beginning of year |
|
|
451,808 |
|
|
|
326,979 |
|
|
|
299,212 |
|
Cash and cash equivalents at
end of year |
|
$ |
402,488 |
|
|
$ |
451,808 |
|
|
$ |
326,979 |
|
Reconciliation 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” and “adjusted EBITDA” as applicable,
in their analysis of the Company's performance. Adjusted Net
earnings and adjusted operating earnings measure, as used by
EnerSys in past quarters and years, adjusts Net earnings 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.
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 Alpha and NorthStar related intangible
assets and tax valuation allowance changes, including those related
to the AHV (Old-Age and Survivors Insurance) Financing (TRAF) in
Switzerland. 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%.
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.
Business Segment Operating
Results
|
Quarter ended |
|
($ millions) |
|
March 31, 2022 |
|
Energy Systems |
|
Motive Power |
|
Specialty |
|
Total |
Net Sales |
$ |
410.4 |
|
|
$ |
364.9 |
|
|
$ |
131.7 |
|
|
$ |
907.0 |
|
|
|
|
|
|
|
|
|
Operating
Earnings |
$ |
4.7 |
|
|
$ |
29.8 |
|
|
$ |
10.0 |
|
|
$ |
44.5 |
|
Inventory adjustment relating
to exit activities |
|
0.2 |
|
|
|
1.4 |
|
|
|
— |
|
|
|
1.6 |
|
Restructuring and other exit
charges |
|
1.4 |
|
|
|
4.2 |
|
|
|
— |
|
|
|
5.6 |
|
Impairment of indefinite-lived
intangibles |
|
0.5 |
|
|
|
0.7 |
|
|
|
— |
|
|
|
1.2 |
|
Loss on assets held for
sale |
|
— |
|
|
|
3.0 |
|
|
|
— |
|
|
|
3.0 |
|
Amortization of identified
intangible assets from recent acquisitions |
|
5.8 |
|
|
|
— |
|
|
|
0.5 |
|
|
|
6.3 |
|
Other |
|
3.3 |
|
|
|
1.0 |
|
|
|
0.3 |
|
|
|
4.6 |
|
Adjusted Operating
Earnings |
$ |
15.9 |
|
|
$ |
40.1 |
|
|
$ |
10.8 |
|
|
$ |
66.8 |
|
|
Quarter ended |
|
($ millions) |
|
March 31, 2021 |
|
Energy Systems |
|
Motive Power |
|
Specialty |
|
Total |
Net Sales |
$ |
348.8 |
|
|
$ |
332.8 |
|
|
$ |
131.9 |
|
|
$ |
813.5 |
|
|
|
|
|
|
|
|
|
Operating
Earnings |
$ |
3.1 |
|
|
$ |
31.9 |
|
|
$ |
16.7 |
|
|
$ |
51.7 |
|
Restructuring and other exit
charges |
|
0.5 |
|
|
|
20.0 |
|
|
|
0.2 |
|
|
|
20.7 |
|
Amortization of identified
intangible assets from recent acquisitions |
|
5.5 |
|
|
|
— |
|
|
|
0.5 |
|
|
|
6.0 |
|
Adjusted Operating
Earnings |
$ |
9.1 |
|
|
$ |
51.9 |
|
|
$ |
17.4 |
|
|
$ |
78.4 |
|
Increase (Decrease) %
from prior year quarter |
Energy Systems |
|
Motive Power |
|
Specialty |
|
Total |
Net Sales |
17.6 |
% |
|
9.7 |
% |
|
(0.2 |
)% |
|
11.5 |
% |
Operating Earnings |
51.4 |
|
|
(6.4 |
) |
|
(40.2 |
) |
|
(13.9 |
) |
Adjusted Operating
Earnings |
74.0 |
|
|
(22.7 |
) |
|
(38.0 |
) |
|
(14.8 |
) |
|
Twelve months ended |
|
($ millions) |
|
March 31, 2022 |
|
Energy Systems |
|
Motive Power |
|
Specialty |
|
Total |
Net Sales |
$ |
1,536.6 |
|
|
$ |
1,361.2 |
|
|
$ |
459.5 |
|
|
$ |
3,357.3 |
|
|
|
|
|
|
|
|
|
Operating
Earnings |
$ |
15.1 |
|
|
$ |
146.5 |
|
|
$ |
44.6 |
|
|
$ |
206.2 |
|
Inventory adjustment relating
to exit activities |
|
0.2 |
|
|
|
2.4 |
|
|
|
— |
|
|
|
2.6 |
|
Restructuring and other exit
charges |
|
2.8 |
|
|
|
17.1 |
|
|
|
(1.1 |
) |
|
|
18.8 |
|
Impairment of indefinite-lived
intangibles |
|
0.5 |
|
|
|
0.7 |
|
|
|
— |
|
|
|
1.2 |
|
Loss on assets held for
sale |
|
— |
|
|
|
3.0 |
|
|
|
— |
|
|
|
3.0 |
|
Amortization of identified
intangible assets from recent acquisitions |
|
23.6 |
|
|
|
— |
|
|
|
1.8 |
|
|
|
25.4 |
|
Other |
|
5.1 |
|
|
|
1.0 |
|
|
|
0.3 |
|
|
|
6.4 |
|
Adjusted Operating
Earnings |
$ |
47.3 |
|
|
$ |
170.7 |
|
|
$ |
45.6 |
|
|
$ |
263.6 |
|
|
Twelve months ended |
|
($ millions) |
|
March 31, 2021 |
|
Energy Systems |
|
Motive Power |
|
Specialty |
|
Total |
Net Sales |
$ |
1,380.2 |
|
|
$ |
1,163.8 |
|
|
$ |
433.9 |
|
|
$ |
2,977.9 |
|
|
|
|
|
|
|
|
|
Operating
Earnings |
$ |
63.8 |
|
|
$ |
106.7 |
|
|
$ |
45.9 |
|
|
$ |
216.4 |
|
Restructuring and other exit
charges |
|
3.1 |
|
|
|
36.9 |
|
|
|
0.4 |
|
|
|
40.4 |
|
Amortization of identified
intangible assets from recent acquisitions |
|
23.5 |
|
|
|
— |
|
|
|
1.8 |
|
|
|
25.3 |
|
Acquisition activity
expense |
|
0.2 |
|
|
|
— |
|
|
|
0.1 |
|
|
|
0.3 |
|
Other |
|
1.5 |
|
|
|
0.3 |
|
|
|
— |
|
|
|
1.8 |
|
Adjusted Operating
Earnings |
$ |
92.1 |
|
|
$ |
143.9 |
|
|
$ |
48.2 |
|
|
$ |
284.2 |
|
Increase (Decrease)
over prior year |
Energy Systems |
|
Motive Power |
|
Specialty |
|
Total |
Net Sales |
11.3 |
% |
|
17.0 |
% |
|
5.9 |
% |
|
12.7 |
% |
Operating Earnings |
(76.3 |
) |
|
37.4 |
|
|
(2.7 |
) |
|
(4.7 |
) |
Adjusted Operating
Earnings |
(48.8 |
) |
|
18.8 |
|
|
(5.2 |
) |
|
(7.2 |
) |
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 |
|
Twelve months ended |
|
March 31, 2022 |
|
March 31, 2021 |
|
March 31, 2022 |
|
March 31, 2021 |
Net Earnings |
$ |
28.1 |
|
|
$ |
33.8 |
|
|
$ |
143.9 |
|
|
$ |
143.3 |
|
Depreciation |
|
15.3 |
|
|
|
15.8 |
|
|
|
62.6 |
|
|
|
60.9 |
|
Amortization |
|
8.2 |
|
|
|
8.1 |
|
|
|
33.2 |
|
|
|
33.4 |
|
Interest |
|
9.4 |
|
|
|
9.1 |
|
|
|
37.8 |
|
|
|
38.5 |
|
Income Taxes |
|
10.8 |
|
|
|
9.4 |
|
|
|
30.0 |
|
|
|
26.8 |
|
EBITDA |
|
71.8 |
|
|
|
76.2 |
|
|
|
307.5 |
|
|
|
302.9 |
|
Non-GAAP adjustments |
|
16.0 |
|
|
|
20.7 |
|
|
|
32.0 |
|
|
|
42.5 |
|
Adjusted EBITDA |
$ |
87.8 |
|
|
$ |
96.9 |
|
|
$ |
339.5 |
|
|
$ |
345.4 |
|
The following table provides the non-GAAP adjustments shown in
the reconciliation above:
|
Quarter ended |
|
Twelve months ended |
|
March 31, 2022 |
|
March 31, 2021 |
|
March 31, 2022 |
|
March 31, 2021 |
Inventory adjustment relating to exit activities |
$ |
1.6 |
|
|
$ |
0.0 |
|
|
$ |
2.6 |
|
|
$ |
— |
|
Restructuring and other exit
charges |
|
5.6 |
|
|
|
20.7 |
|
|
|
18.8 |
|
|
|
40.4 |
|
Impairment of indefinite-lived
intangibles |
|
1.2 |
|
|
|
— |
|
|
|
1.2 |
|
|
|
— |
|
Loss on assets held for
sale |
|
3.0 |
|
|
|
— |
|
|
|
3.0 |
|
|
|
— |
|
Acquisition activity
expense |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.3 |
|
Other |
|
4.6 |
|
|
|
— |
|
|
|
6.4 |
|
|
|
1.8 |
|
Non-GAAP adjustments |
$ |
16.0 |
|
|
$ |
20.7 |
|
|
$ |
32.0 |
|
|
$ |
42.5 |
|
Included below is a reconciliation of non-GAAP
adjusted Net earnings to reported amounts. Non-GAAP adjusted
operating earnings and 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) |
|
|
March 31, 2022 |
|
March 31, 2021 |
|
Net Earnings
reconciliation |
|
|
|
|
As reported Net Earnings |
$ |
28.1 |
|
|
$ |
33.8 |
|
|
Non-GAAP adjustments: |
|
|
|
|
Inventory adjustment relating to exit activities |
|
1.6 |
|
(1) |
|
— |
|
|
Restructuring and other exit charges |
|
5.6 |
|
(1) |
|
20.7 |
|
(1) |
Impairment of indefinite-lived intangibles |
|
1.2 |
|
(2) |
|
— |
|
|
Loss on assets held for sale |
|
3.0 |
|
(3) |
|
— |
|
|
Amortization of identified intangible assets from recent
acquisitions |
|
6.3 |
|
(4) |
|
6.0 |
|
(4) |
Other |
|
4.6 |
|
(6) |
|
— |
|
|
Purchase accounting related tax |
|
— |
|
|
|
2.2 |
|
|
Income tax effect of above non-GAAP adjustments |
|
(0.3 |
) |
|
|
(6.2 |
) |
|
Non-GAAP adjusted Net
Earnings |
$ |
50.1 |
|
|
$ |
56.5 |
|
|
|
|
|
|
|
Outstanding shares
used in per share calculations |
|
|
|
|
Basic |
|
41,243,629 |
|
|
|
42,686,413 |
|
|
Diluted |
|
41,843,270 |
|
|
|
43,587,698 |
|
|
Non-GAAP adjusted Net
Earnings per share: |
|
|
|
|
Basic |
$ |
1.21 |
|
|
$ |
1.33 |
|
|
Diluted |
$ |
1.20 |
|
|
$ |
1.30 |
|
|
|
|
|
|
|
Reported Net Earnings
(Loss) per share: |
|
|
|
|
Basic |
$ |
0.68 |
|
|
$ |
0.79 |
|
|
Diluted |
$ |
0.67 |
|
|
$ |
0.78 |
|
|
Dividends per common
share |
$ |
0.175 |
|
|
$ |
0.175 |
|
|
The following table provides the line of business allocation of
the non-GAAP adjustments shown in the reconciliation above:
|
|
Quarter ended |
|
|
($ millions) |
|
|
March 31, 2022 |
|
March 31, 2021 |
|
|
Pre-tax |
|
Pre-tax |
(1) Inventory adjustment relating to exit activities - Energy
Systems |
|
|
0.2 |
|
|
|
— |
|
(1) Inventory adjustment
relating to exit activities - Motive |
|
|
1.4 |
|
|
|
— |
|
(1) Restructuring and other
exit charges - Energy Systems |
|
|
1.4 |
|
|
|
0.5 |
|
(1) Restructuring and other
exit charges - Motive Power |
|
|
4.2 |
|
|
|
20.0 |
|
(1) Restructuring and other
exit charges - Specialty |
|
|
— |
|
|
|
0.2 |
|
(2) Impairment of
indefinite-lived intangibles - Energy Systems |
|
|
0.5 |
|
|
|
— |
|
(2) Impairment of
indefinite-lived intangibles - Motive |
|
|
0.7 |
|
|
|
— |
|
(3) Loss on assets held for
sale - Motive |
|
|
3.0 |
|
|
|
— |
|
(4) Amortization of identified
intangible assets from recent acquisitions - Energy Systems |
|
|
5.8 |
|
|
|
5.5 |
|
(4) Amortization of identified
intangible assets from recent acquisitions - Specialty |
|
|
0.5 |
|
|
|
0.5 |
|
(6) Other - Energy
Systems |
|
|
3.3 |
|
|
|
— |
|
(6) Other - Motive |
|
|
1.0 |
|
|
|
— |
|
(6) Other - Specialty |
|
|
0.3 |
|
|
|
— |
|
Total Non-GAAP
adjustments |
|
$ |
22.3 |
|
|
$ |
26.7 |
|
|
Twelve months ended |
|
|
(in millions, except share and per share
amounts) |
|
|
March 31, 2022 |
|
March 31, 2021 |
|
Net Earnings
reconciliation |
|
|
|
|
As reported Net Earnings |
$ |
143.9 |
|
|
$ |
143.3 |
|
|
Non-GAAP adjustments: |
|
|
|
|
Inventory adjustment relating to exit activities |
|
2.6 |
|
(1) |
|
— |
|
|
Restructuring and other exit charges |
|
18.8 |
|
(1) |
|
40.4 |
|
(1) |
Impairment of indefinite-lived intangibles |
|
1.2 |
|
(2) |
|
— |
|
|
Loss on assets held for sale |
|
3.0 |
|
(3) |
|
— |
|
|
Amortization of identified intangible assets from recent
acquisitions |
|
25.4 |
|
(4) |
|
25.3 |
|
(4) |
Acquisition activity expense |
|
— |
|
|
|
0.3 |
|
(5) |
Other |
|
6.4 |
|
(6) |
|
1.8 |
|
(6) |
Purchase accounting related tax |
|
— |
|
|
|
2.2 |
|
|
Income tax effect of above non-GAAP adjustments |
|
(10.3 |
) |
|
|
(17.3 |
) |
|
Swiss Tax Reform |
$ |
— |
|
|
$ |
(1.9 |
) |
|
Non-GAAP adjusted Net
Earnings |
$ |
191.0 |
|
|
$ |
194.1 |
|
|
|
|
|
|
|
Outstanding shares
used in per share calculations |
|
|
|
|
Basic |
|
42,106,337 |
|
|
|
42,548,449 |
|
|
Diluted |
|
42,783,373 |
|
|
|
43,224,403 |
|
|
Non-GAAP adjusted Net
Earnings per share: |
|
|
|
|
Basic |
$ |
4.54 |
|
|
$ |
4.56 |
|
|
Diluted |
$ |
4.47 |
|
|
$ |
4.49 |
|
|
|
|
|
|
|
Reported Net Earnings
(Loss) per share: |
|
|
|
|
Basic |
$ |
3.42 |
|
|
$ |
3.37 |
|
|
Diluted |
$ |
3.36 |
|
|
$ |
3.32 |
|
|
Dividends per common
share |
$ |
0.70 |
|
|
$ |
0.70 |
|
|
The following table provides the line of business allocation of
the non-GAAP adjustments shown in the reconciliation above:
|
|
Twelve months ended |
|
|
($ millions) |
|
|
March 31, 2022 |
|
March 31, 2021 |
|
|
Pre-tax |
|
Pre-tax |
(1) Inventory adjustment relating to exit activities - Energy
Systems |
|
|
0.2 |
|
|
|
— |
|
(1) Inventory adjustment
relating to exit activities - Motive Power |
|
|
2.4 |
|
|
|
— |
|
(1) Restructuring and other
exit charges - Energy Systems |
|
|
2.8 |
|
|
|
3.1 |
|
(1) Restructuring and other
exit charges - Motive Power |
|
|
17.1 |
|
|
|
36.9 |
|
(1) Restructuring and other
exit charges - Specialty |
|
|
(1.1 |
) |
|
|
0.4 |
|
(2) Impairment of
indefinite-lived intangibles - Energy Systems |
|
|
0.5 |
|
|
|
— |
|
(2) Impairment of
indefinite-lived intangibles - Motive |
|
|
0.7 |
|
|
|
— |
|
(3) Loss on assets held for
sale - Motive |
|
|
3.0 |
|
|
|
— |
|
(4) Amortization of identified
intangible assets from recent acquisitions - Energy Systems |
|
|
23.6 |
|
|
|
23.5 |
|
(4) Amortization of identified
intangible assets from recent acquisitions - Specialty |
|
|
1.8 |
|
|
|
1.8 |
|
(5) Acquisition activity
expense - Energy Systems |
|
|
— |
|
|
|
0.2 |
|
(5) Acquisition activity
expense - Specialty |
|
|
— |
|
|
|
0.1 |
|
(6) Other - Energy
Systems |
|
|
5.1 |
|
|
|
1.5 |
|
(6) Other - Motive |
|
|
1.0 |
|
|
|
0.3 |
|
(6) Other - Specialty |
|
|
0.3 |
|
|
|
— |
|
Total Non-GAAP
adjustments |
|
$ |
57.4 |
|
|
$ |
67.8 |
|
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