READING, Pa., Aug. 5 /PRNewswire-FirstCall/ -- EnerSys (NYSE:ENS)
the world's largest manufacturer, marketer and distributor of
industrial batteries, today announced results for its first fiscal
quarter of 2010, which ended on June 28, 2009. Net earnings for the
first fiscal quarter of 2010 were $8.4 million or $0.17 per diluted
share, including the unfavorable highlighted charges of $0.06 per
share impact from the $2.5 million, $3.5 million pre-tax, charge
for our restructuring plans and the $0.3 million, $0.4 million
pre-tax, expense related to potential acquisition activities. This
compares to diluted net earnings per share of $0.50 for the first
fiscal quarter of 2009, which included favorable highlighted
credits of $0.03 per share or $1.3 million, ($0.1) million pre-tax.
Adjusted net earnings for the first fiscal quarter of 2010, on a
non-GAAP basis, were $0.23 per diluted share. This compares to our
previous guidance of $0.13 to $0.17 per diluted share and to the
prior year first quarter of $0.47 per diluted share on an adjusted
and restated non-GAAP basis. These earnings were achieved despite
the anticipated decline in revenue, which was partially offset by
the positive effects of our cost reduction activities and further
reductions in commodity costs, net of pricing. 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. Net sales for the first
fiscal quarter of 2010 were $340.3 million, a decrease of 42.5%
from the prior year first fiscal quarter net sales of $592.1
million and a 13.5% sequential quarterly decrease from the fourth
fiscal quarter of 2009's net sales of $393.2 million. The 42.5%
decline was attributed to a 32% decline in organic volume, 6% from
weaker foreign currencies, primarily the euro, and 5% from reduced
pricing related to lower commodity costs. The decline in organic
volume was a direct result of reduced end-user demand caused by the
global economic recession. The Company's operating results for its
reporting segments for the first fiscal quarters of 2010 and 2009
are as follows (in millions): Reserve Power Motive Power
Consolidated ------------- ------------ ------------ Three months
ended June 28, 2009: Net sales $182.8 $157.5 $340.3 ====== ======
====== Operating earnings before highlighted items $20.8 $2.6 $23.4
Restructuring charges (1.0) (2.5) (3.5) Acquisition activity
expense (0.4) - (0.4) ---- ---- ---- Total operating earnings $19.4
$0.1 $19.5 ===== ==== ===== Three months ended June 29, 2008: Net
sales $258.8 $333.3 $592.1 ====== ====== ====== Operating earnings
before highlighted items $21.0 $21.7 $42.7 Gain on sale of
manufacturing facility 10.9 - 10.9 Legal proceedings charge (3.4) -
(3.4) Restructuring charges (1.3) (0.9) (2.2) ---- ---- ---- Total
operating earnings $27.2 $20.8 $48.0 ===== ===== ===== "As
anticipated, we experienced a sequential quarterly decline in
sales, which is a reflection of current economic conditions.
However, as a result of our continued strong execution of our
business plan, including our cost reduction efforts, we reported
adjusted earnings per diluted share of $0.23 for our first fiscal
quarter, which exceeded our previous earnings guidance of $0.13 to
$0.17 per share," said John D. Craig, chairman, president and chief
executive officer of EnerSys. "There are several positive
developments in our business. Recently, we have experienced stable
incoming order rates, which lead us to believe that we may have
reached the bottom of the declining order patterns we had been
experiencing. Also, we ended our first quarter with cash and short
term investments of $218 million, an increase of $55 million over
the previous quarter end. Finally, our restructuring programs
remain on schedule to achieve the targeted savings of $33 million
per year when fully implemented." Craig added, "Our second quarter
guidance for non-GAAP adjusted net earnings per diluted share will
be between $0.25 and $0.29, which excludes an expected charge of
$0.06 per diluted share from our ongoing restructuring and
acquisition activities." Reconciliation of 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 measure "adjusted net earnings" in their analysis of
the Company's performance. This measure, as used by EnerSys in past
quarters and years, adjusts net earnings determined in accordance
with GAAP to reflect changes in financial results associated with
the Company's restructuring initiatives and highlighted charges and
credits. Management believes the presentation of this financial
measure 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
directly related to operating unit performance and are unusual in
nature and, accordingly, are not indicative of ongoing operating
results. Management believes these charges or credits are not valid
measures of the performance of the Company's underlying business.
This non-GAAP disclosure has limitations as an analytical tool,
should not be viewed as a substitute for net earnings 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 is it 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. Included below is a reconciliation of non-GAAP adjusted
financial measures to reported amounts for the first fiscal
quarters ended June 28, 2009 and June 29, 2008. Non-GAAP adjusted
net earnings are calculated excluding highlighted charges and
credits. The following table provides additional information
regarding certain non-GAAP measures: Fiscal quarter ended
-------------------- June 28, 2009 June 29, 2008 -------------
------------- (In millions, except share and per share data) Net
earnings reconciliation (Restated)(1) As reported net earnings $8.4
$25.2 Non-GAAP adjustments (net of tax): Restructuring charges 2.5
(2) 1.4 (2) Acquisition activity expense 0.3 (3) - Gain on sale of
manufacturing facility - (8.5) (4) Legal proceedings charge - 2.2
(5) Refinancing related charges - 3.4 (6) Secondary offering fees -
0.2 (7) --- --- Non-GAAP adjusted net earnings $11.2 $23.9 =====
===== Outstanding shares used in per share calculations: Basic
47,936,401 49,329,724 ========== ========== Diluted 48,454,695
50,507,516 ========== ========== Non-GAAP adjusted net earnings per
share: Basic $0.23 $0.48 ===== ===== Diluted $0.23 $0.47 =====
===== Reported net earnings per share: Basic $0.18 $0.51 =====
===== Diluted $0.17 $0.50 ===== ===== (1) As more fully explained
in our Quarterly Report on Form 10-Q, filed today, we adopted the
new accounting for convertible notes as required by FSP APB14-1.
The new accounting pronouncement resulted in a decrease in net
earnings related to non-cash interest of approximately $0.9 million
($1.3 million pre-tax) in our first fiscal quarter of 2010 results
and caused a restatement of our first fiscal quarter of 2009
results by a comparable reduction in net earnings of $0.3 million
($0.5 million pre-tax). (2) Resulting from pretax charges of
approximately $3.5 million in the first fiscal quarter of 2010 and
$2.2 million in the first fiscal quarter of 2009, primarily for
severance costs related to staff reductions. (3) Resulting from
pretax charge of approximately $0.4 million in the first fiscal
quarter of 2010 for acquisition activity expense. (4) Resulting
from pretax gain of approximately $10.9 million, net of fees and
expenses, from the sale of the Manchester, England manufacturing
facility, recorded in the first fiscal quarter of 2009. (5)
Resulting from pretax charge of approximately $3.4 million in the
first fiscal quarter of 2009 for a litigation accrual related to an
award against the Company. (6) Resulting from pretax charges of
approximately $5.2 million in the first fiscal quarter of 2009,
related to the refinancing of amounts borrowed under the Company's
prior senior secured credit facility. These charges are comprised
of an approximate $4.0 million write-off of deferred financing fees
and $1.2 million of losses incurred in terminating certain interest
rate swap agreements. (7) Resulting from pretax charge of
approximately $0.3 million for professional fees related to
secondary stock offerings which occurred in the first fiscal
quarter of 2009. EnerSys Summary of Earnings (In millions, except
share and per share data) Fiscal quarter ended --------------------
(Unaudited) June 28, June 29, 2009 2008 ---- ---- (Restated) (1)
Net sales $340.3 $592.1 Gross profit 77.5 112.6 Operating expenses
54.4 69.9 Gain on sale of manufacturing facility - (10.9)
Restructuring charges 3.5 2.2 Legal proceedings charge - 3.4
Operating earnings 19.5 48.0 Earnings before income taxes 12.3 33.6
Net earnings $8.4 $25.2 ==== ===== Net earnings per common share:
Basic $0.18 $0.51 ===== ===== Diluted $0.17 $0.50 ===== =====
Weighted average shares outstanding: Basic 47,936,401 49,329,724
========== ========== Diluted 48,454,695 50,507,516 ==========
========== EnerSys will host a conference call to discuss the
Company's first fiscal quarter 2010 financial results and provide
an overview of the business. The call will conclude with a question
and answer session. The call, scheduled for Thursday, August 6,
2009, at 9:00 a.m. Eastern Time, will be hosted by John D. Craig,
Chairman, President and Chief Executive Officer and Michael T.
Philion, Executive Vice President - Finance and Chief Financial
Officer. The call will also be Webcast on EnerSys' website. There
will be a free download of a compatible media player on the
Company's website at http://www.enersys.com/. The conference call
information is: Date: Thursday, August 6, 2009 Time: 9:00 a.m.
Eastern Time Via Internet: http://www.enersys.com/ Domestic Dial-In
Number: 800-591-6930 International Dial-In Number: 617-614-4908
Passcode: 51097073 A replay of the conference call will be
available from 11:00 a.m. on Thursday, August 6, 2009 through
midnight on September 6, 2009. The replay information is: Via
Internet: http://www.enersys.com/ Domestic Replay Number:
888-286-8010 International Replay Number: 617-801-6888 Passcode:
44821048 For more information, please contact Richard Zuidema,
Executive Vice President, EnerSys, P.O. Box 14145, Reading, PA
19612-4145. Tel: 800-538-3627; Website http://www.enersys.com/.
EDITOR'S NOTE: EnerSys, the world leader in stored energy solutions
for industrial applications, manufactures and distributes reserve
power and motive power batteries, chargers, power equipment, and
battery accessories to customers worldwide. Motive power batteries
are utilized in electric fork trucks and other commercial electric
powered vehicles. Reserve power batteries are used in the
telecommunications and utility industries, uninterruptible power
suppliers, and numerous applications requiring standby power. The
Company also provides aftermarket and customer support services to
its customers from over 100 countries through its sales and
manufacturing locations around the world. More information
regarding EnerSys can be found at http://www.enersys.com/. 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, 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, and market share, as well as statements expressing optimism
or pessimism about future operating results, 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 EnerSys' 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 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations," including
"Forward-Looking Statements," set forth in EnerSys' Quarterly
Report on Form 10-Q for the fiscal quarter ended June 28, 2009. No
undue reliance should be placed on any forward-looking statements.
DATASOURCE: EnerSys CONTACT: Richard Zuidema, Executive Vice
President, EnerSys, +1-800-538-3627 Web Site:
http://www.enersys.com/
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