READING, Pa., May 13 /PRNewswire-FirstCall/ -- EnerSys (NYSE: ENS) the
world's largest manufacturer, marketer and distributor of industrial
batteries, announced today preliminary results for its 4th fiscal quarter of
2009, which ended on March 31. Adjusted net earnings for the quarter, on a
non-GAAP basis, are expected to be $0.36 per diluted share. This compares to
the guidance we gave on February 4, 2009 of $0.30 to $0.34 and to the prior
year fourth quarter of $0.42, all per diluted share and on an adjusted,
non-GAAP basis. These earnings were achieved in spite of a significant
decline in revenue and were primarily due to the positive effects of our cost
reduction activities and further reductions in commodity costs, net of
pricing. The non-GAAP adjusted guidance given in February excluded an
estimated $17.5 million pre-tax charge for restructuring actions.
Excluding the highlighted charges and income items in both fiscal years,
non-GAAP adjusted net earnings for fiscal 2009 are expected to be $97.8
million or $1.98 per diluted share, a 41% increase when compared to non-GAAP
adjusted net earnings for fiscal 2008 of $69.2 million or $1.42 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.
Net earnings for the 4th fiscal quarter of 2009 are expected to be $3.3
million or $0.07 per diluted share, including an unfavorable $0.29 per share
impact from the $13.8 million ($19.2 million pre-tax) charge for our
restructuring plans. This compares to diluted net earnings per share of $0.39
for the 4th fiscal quarter of 2008, which included unfavorable highlighted
charges of $0.03 per share or $1.3 million ($1.9 million pre-tax). Net sales
for the fourth quarter of 2009 were $393.2 million, a decrease of 32.4% from
the prior year fourth quarter net sales of $581.9 million and a 14.7%
sequential quarterly decrease from the third quarter of 2009's net sales of
$460.9 million. The 32% decline was attributed to a 19% decline in organic
volume, 8% 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.
Net earnings for fiscal 2009 are expected to be $84.6 million or $1.71 per
diluted share, and will include the net unfavorable impact from highlighted
charges of $0.27 per share. Highlighted charges include a favorable $0.17 per
share from the $8.5 million ($11.3 million pre-tax) gain on sale of
facilities, and total charges of $0.44 per share comprised of: $15.9 million
($22.4 million pre-tax) for the restructuring plans; $3.4 million ($5.2
million pre-tax) for fees related to our debt refinancing; $2.2 million ($3.4
million pre-tax) for a legal proceedings charge; and $0.2 million ($0.3
million pre-tax) for fees related to secondary stock offerings.
Net earnings for fiscal 2008 were $59.7 million or $1.22 per diluted
share, and included $0.20 per share of highlighted charges: $9.1 million
($13.2 million pre-tax) of restructuring charges and $0.4 million ($0.6
million pre-tax) for fees related to secondary stock offerings.
The Company anticipates releasing final 4th quarter and full year results
for fiscal year 2009 on June 1, 2009.
"In our fiscal fourth quarter we continued to successfully meet the
challenges we face as a result of the weak global economic environment," said
John D. Craig, chairman, president and chief executive officer of EnerSys.
"For our full fiscal year 2009 we expect to report record earnings, in spite
of a significantly weaker second half of the year caused by the global
recession. We do believe, however, that with our market leadership, strong
capital structure and liquidity, we are well positioned to meet these
challenges and that we will exit this recession a stronger company than we
entered this recession. To that end, we have expanded our restructuring
program announced on February 4, 2009 which we expect will yield an additional
annual savings of $7 million with a cost of $9 million. When fully
implemented, these two restructuring initiatives are expected to save $20
million per year or $0.29 per share. Our strong cash flow is continuing and we
had over $160 million in cash and cash equivalents at the end of March to fund
the capital and restructuring spending that will improve our operations."
Craig added, "We anticipate that non-GAAP adjusted net earnings per
diluted share for our first quarter of fiscal 2010 will be between $0.13 and
$0.17 as we continue to experience lower sequential sales volume as a result
of the ongoing economic slow-down. This excludes a charge of approximately
$4.3 million ($6.2 million pre-tax) or $0.09 per diluted share from our
ongoing European restructuring actions; but includes a non-cash increase in
our convertible debt interest expense of $0.9 million ($1.3 million pre-tax)
or $0.02 per diluted share, which will result from our required adoption of a
new accounting standard."
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 income
items. 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 indicative of ongoing operating
results; in particular, those charges that the Company incurs as a result of
restructuring activities associated with its acquisitions and those charges
and credits that are not directly related to operating unit performance and
are unusual in nature. Because these charges are incurred as a result of an
acquisition and in connection with secondary offerings on behalf of certain of
our stockholders, they are not a valid measure of the performance of our
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.
New Accounting Pronouncements
In May 2008, the FASB issued Staff Position paper, Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement) ("FSP APB 14-1"). This FASB Staff
Position ("FSP") will change the accounting treatment for convertible
securities which the issuer may settle fully or partially in cash. Under the
final FSP, cash settled convertible securities will be separated into their
debt and equity components. The value assigned to the debt component will be
the estimated fair value, as of the issuance date, of a similar debt
instrument without the conversion feature, and the difference between the
proceeds for the convertible debt and the amount reflected as a debt liability
will be recorded as additional paid-in capital. As a result, the debt will be
recorded at a discount reflecting its below market coupon interest rate. The
debt will subsequently be accreted to its par value over its expected life,
with the rate of interest that reflects the market rate at issuance being
reflected on the income statement. This change in methodology will affect the
calculations of net income and earnings per share for many issuers of cash
settled convertible securities. This FSP is effective for financial statements
issued by us for the first quarter of fiscal year 2010. Accordingly, we
adopted FSP 14-1 on April 1, 2009, applied on a retrospective basis. The
impact of adoption will be an adjustment to: a) separate our convertible debt
into its debt and equity components, initially reducing our long term debt and
increasing our equity by approximately $45 million and, b) the accretion of
the debt discount will increase interest expense by a non-cash charge of
approximately $4 million in fiscal 2009, increasing to $8 million by fiscal
2015.
Included below is a reconciliation of non-GAAP adjusted financial measures
to reported or expected amounts. Non-GAAP adjusted net earnings are
calculated excluding restructuring and other highlighted charges and credits.
The following tables provide additional information regarding certain non-GAAP
measures:
Fiscal quarter ended
March 31, March 31,
2009 (expected) 2008
(in millions, except share and per share amounts)
Net earnings reconciliation
As reported net earnings (6) $3.3 $19.5
Non-GAAP adjustments (net of tax):
Restructuring charge 13.8 (1) 1.2 (1)
Secondary offering - 0.1 (2)
Non-GAAP adjusted net earnings $17.1 $20.8
Outstanding shares used in per share calculations
Basic 47,906,3644 48,748,2233
Diluted 47,951,003 49,895,646
Non-GAAP adjusted net earnings per share:
Basic $0.37 $0.43
Diluted $0.36 $0.42
Reported net earnings per share: (6)
Basic $0.07 $0.40
Diluted $0.07 $0.39
Fiscal year ended
March 31, March 31,
2009 (expected) 2008
(in millions, except share and per share amounts)
Net earnings reconciliation
As reported net earnings (6) $84.6 $59.7
Non-GAAP adjustments (net of tax):
Gain on sale of facilities (8.5)(3) -
Legal proceedings charge 2.2 (4) -
Restructuring charge 15.9 (1) 9.1 (1)
Refinancing related charges 3.4 (5) -
Secondary offering fees 0.2 (2) 0.4 (2)
Non-GAAP adjusted net earnings $97.8 $69.2
Outstanding shares used in per share calculations
Basic 48,824,434 47,645,225
Diluted 49,420,303 48,644,450
Non-GAAP adjusted net earnings per share:
Basic $2.00 $1.45
Diluted $1.98 $1.42
Reported net earnings per share: (6)
Basic $1.73 $1.25
Diluted $1.71 $1.22
(1) Resulting from pretax charges of approximately $19.2 million and
$22.4 million in the fourth fiscal quarter and fiscal year 2009; and
$1.8 million and $13.2 million in the fourth fiscal quarter and
fiscal year 2008, primarily for severance costs related to staff
reductions, and fixed asset write-offs for the 2009 Italian
restructuring plan and 2008 European restructuring plan, related to
the and Energia acquisition.
(2) Resulting from pretax charges of approximately $0.3 million and
$0.6 million, for professional fees related to secondary stock
offerings which occurred in fiscal 2009 and 2008, respectively.
(3) Resulting from pretax gains 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
and approximately $0.4 million from the sale of other facilities in
the third fiscal quarter of 2009.
(4) Resulting from pretax charges of approximately $3.4 million in the
first fiscal quarter of 2009 for a litigation award against the
Company.
(5) 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.
(6) The Company expects to report fourth fiscal quarter and full fiscal
year 2009 earnings and per share amounts in a Form 10-K and a
related earnings press release to be filed on or about June 1, 2009.
EnerSys also announced that it will host a conference call to discuss the
Company's fourth quarter and full year results for fiscal 2009 and to provide
an overview of the business. The call will conclude with a question and
answer session.
The call, scheduled for Tuesday, June 2, at 9:00 a.m. Eastern Time, will
be hosted by John D. Craig, Chairman, President & Chief Executive Officer and
Michael T. Philion, Executive Vice President - Finance & 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 web site at
http://www.enersys.com.
The conference call information is:
Date: Tuesday, June 2, 2009
Time: 9:00 a.m. Eastern Time
Via Internet: http://www.enersys.com
Domestic Dial-In Number: 866-713-8310
International Dial-In Number: 617-597-5308
Passcode: 49099078
A replay of the conference call will be available from 11:00 a.m. on June
2, 2009 through noon on June 30, 2009.
The replay information is:
Via Internet: http://www.enersys.com
Domestic Replay Number: 888-286-8010
International Replay Number: 617-801-6888
Passcode: 79366586
For more information, contact Richard Zuidema, Executive Vice President,
EnerSys, P.O. Box 14145, Reading, PA 19612-4145, USA. Tel: 800/538-3627; Web
site: 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 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 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 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations," including "Forward-Looking
Statements," set forth in the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended December 28, 2008. No undue reliance should be placed on
any forward-looking statements.
SOURCE EnerSys
CONTACT:
Richard Zuidema
Executive Vice President
EnerSys
+1-800-538-3627