EnerSys Reports Third Quarter Fiscal 2018 Results
Net loss attributable to
Net earnings attributable to
Excluding these highlighted items, adjusted Net earnings per diluted share for the third quarter of fiscal 2018, on a non-GAAP basis, were
Net sales for the third quarter of fiscal 2018 were
The Company’s operating results for its business segments for the third quarters of fiscal 2018 and 2017 are as follows:
Quarter ended | |||||||
($ millions) | |||||||
December 31, 2017 | January 1, 2017 | ||||||
Net sales by segment | |||||||
Americas | $ | 353.2 | $ | 314.0 | |||
EMEA | 224.9 | 186.1 | |||||
Asia | 80.8 | 63.6 | |||||
Total net sales | $ | 658.9 | $ | 563.7 | |||
Operating earnings | |||||||
Americas | $ | 43.7 | $ | 44.8 | |||
EMEA | 24.0 | 20.5 | |||||
Asia | 3.3 | 4.0 | |||||
Inventory adjustment relating to exit activities - EMEA | — | 0.5 | |||||
Restructuring charges - Americas | (1.0 | ) | — | ||||
Restructuring and other exit charges (credits) - EMEA | (0.8 | ) | 1.2 | ||||
Competition investigations and related legal charges - EMEA | — | (17.0 | ) | ||||
ERP system implementation - Americas | (0.5 | ) | (0.6 | ) | |||
Deferred purchase consideration - Americas | — | 1.9 | |||||
Acquisition activity expense - Americas | (0.1 | ) | (0.1 | ) | |||
Acquisition activity expense - EMEA | (0.2 | ) | (0.1 | ) | |||
Total operating earnings | $ | 68.4 | $ | 55.1 | |||
EMEA - Europe, Middle East and Africa | |||||||
Net earnings for the nine months of fiscal 2018 were
Net earnings for the nine months of fiscal 2017 were
Adjusted Net earnings for the nine months of fiscal 2018, on a non-GAAP basis, were
Net sales for the nine months of fiscal 2018 were
The Company's operating results for its business segments for the nine months of fiscal years 2018 and 2017 are as follows:
Nine months ended | |||||||
($ millions) | |||||||
December 31, 2017 | January 1, 2017 | ||||||
Net sales by segment | |||||||
Americas | $ | 1,049.3 | $ | 968.5 | |||
EMEA | 621.9 | 563.8 | |||||
Asia | 227.6 | 208.0 | |||||
Total net sales | $ | 1,898.8 | $ | 1,740.3 | |||
Operating earnings | |||||||
Americas | $ | 143.1 | $ | 145.8 | |||
EMEA | 55.4 | 57.3 | |||||
Asia | 10.7 | 11.8 | |||||
Restructuring charges - Americas | (1.3 | ) | (0.9 | ) | |||
Inventory adjustment relating to exit activities - EMEA | — | (2.1 | ) | ||||
Restructuring and other exit charges (credits) - EMEA | (3.1 | ) | (3.7 | ) | |||
Restructuring charges - Asia | — | (0.4 | ) | ||||
Competition investigations and related legal charges - EMEA | — | (17.0 | ) | ||||
ERP system implementation - Americas | (2.1 | ) | (8.3 | ) | |||
Deferred purchase consideration - Americas | — | 1.9 | |||||
Acquisition activity expense - Americas | (0.2 | ) | (0.2 | ) | |||
Acquisition activity expense - EMEA | (0.5 | ) | (0.2 | ) | |||
Total operating earnings | $ | 202.0 | $ | 184.0 | |||
EMEA - Europe, Middle East and Africa | |||||||
“I am pleased with our third quarter performance and specifically with our EMEA region for exceeding 10% operating earnings this quarter,” stated
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").
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%.
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. 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:
Quarter ended | ||||||||
(in millions, except share and per share amounts) | ||||||||
December 31, 2017 | January 1, 2017 | |||||||
Net Earnings reconciliation | ||||||||
As reported Net (Loss) Earnings | $ | (25.8 | ) | $ | 36.2 | |||
Non-GAAP adjustments: | ||||||||
Restructuring charges (credits) | 1.8 | (1) | (1.7 | ) | (1) | |||
Legal proceedings charge | — | 17.0 | (2) | |||||
ERP system implementation | 0.5 | (3) | 0.6 | (3) | ||||
Deferred purchase consideration | — | (1.9 | ) | (4) | ||||
Acquisition activity expense | 0.3 | (5) | 0.2 | (5) | ||||
Income tax effect of above non-GAAP adjustments | (0.8 | ) | 0.3 | |||||
Tax Act * | 77.3 | — | ||||||
Non-controlling partner's share of restructuring and exit charges - EMEA - South Africa joint venture | — | 1.3 | ||||||
Non-GAAP adjusted Net Earnings | $ | 53.3 | $ | 52.0 | ||||
Outstanding shares used in Non-GAAP adjusted Net Earnings per share calculations | ||||||||
Basic | ||||||||
Diluted | 42,125,745 | 43,429,525 | ||||||
42,547,343 | 44,049,674 | |||||||
Outstanding shares used in Reported Net Earnings per share calculations | ||||||||
Basic | 42,125,745 | 43,429,525 | ||||||
Diluted | 42,125,745 | 44,049,674 | ||||||
Non-GAAP adjusted Net Earnings per share: | ||||||||
Basic | $ | 1.27 | $ | 1.20 | ||||
Diluted | $ | 1.25 | $ | 1.18 | ||||
Reported Net (Loss) Earnings per share: | ||||||||
Basic | $ | (0.61 | ) | $ | 0.83 | |||
Diluted | $ | (0.61 | ) | $ | 0.82 | |||
Dividends per common share | $ | 0.175 | $ | 0.175 | ||||
EMEA - Europe, Middle East and Africa | ||||||||
The following table provides the regional allocation of the non-GAAP adjustments shown in the reconciliation above:
Quarter ended | |||||||||
($ millions) | ($ millions) | ||||||||
December 31, 2017 | January 1, 2017 | ||||||||
Pre-tax | Pre-tax | ||||||||
(1) Restructuring charges - Americas | $ | 1.0 | $ | — | |||||
(1) Inventory adjustment relating to exit activities - EMEA - (South Africa joint venture) | — | (0.5 | ) | ||||||
(1) Restructuring and other exit charges (credits) - EMEA | 0.8 | (1.2 | ) | ||||||
(2) Competition investigations and related legal charges - EMEA | — | 17.0 | |||||||
(3) ERP system implementation - Americas | 0.5 | 0.6 | |||||||
(4) Deferred purchase consideration - Americas | — | (1.9 | ) | ||||||
(5) Acquisition activity expense - Americas | 0.1 | 0.1 | |||||||
(5) Acquisition activity expense - EMEA | 0.2 | 0.1 | |||||||
Total Non-GAAP adjustments | $ | 2.6 | $ | 14.2 | |||||
* See Income Taxes in Note 5 to the Condensed Consolidated Financial Statements on Form 10-Q for the quarterly period ended December 31, 2017.
Nine months ended | ||||||||
(in millions, except share and per share amounts) | ||||||||
December 31, 2017 | January 1, 2017 | |||||||
Net Earnings reconciliation | ||||||||
As reported Net Earnings | $ | 65.6 | $ | 126.4 | ||||
Non-GAAP adjustments: | ||||||||
Restructuring charges | 4.4 | (1) | 7.1 | (1) | ||||
Legal proceedings charge | — | 17.0 | (2) | |||||
ERP system implementation | 2.1 | (2) | 8.3 | (3) | ||||
Deferred purchase consideration | — | (1.9 | ) | (4) | ||||
Acquisition activity expense | 0.7 | (5) | 0.4 | (5) | ||||
Income tax effect of above non-GAAP adjustments | (2.1 | ) | (3.5 | ) | ||||
Tax Act * | 77.3 | — | ||||||
Non-controlling partner's share of restructuring and exit charges - EMEA - South Africa joint venture | — | (1.3 | ) | |||||
Non-GAAP adjusted Net Earnings | $ | 148.0 | $ | 152.5 | ||||
Outstanding shares used in Non-GAAP adjusted Net Earnings per share calculations | ||||||||
Basic | 42,837,986 | 43,375,474 | ||||||
Diluted | 43,345,926 | 43,943,010 | ||||||
Outstanding shares used in Reported Net Earnings per share calculations | ||||||||
Basic | 42,837,986 | 43,375,474 | ||||||
Diluted | 43,345,926 | 43,943,010 | ||||||
Non-GAAP adjusted Net Earnings per share: | ||||||||
Basic | $ | 3.45 | $ | 3.52 | ||||
Diluted | $ | 3.41 | $ | 3.47 | ||||
Reported Net Earnings per share: | ||||||||
Basic | $ | 1.53 | $ | 2.92 | ||||
Diluted | $ | 1.51 | $ | 2.88 | ||||
Dividends per common share | $ | 0.525 | $ | 0.525 | ||||
EMEA - Europe, Middle East and Africa | ||||||||
The following table provides the regional allocation of the non-GAAP adjustments shown in the reconciliation above:
Nine months ended | |||||||||
($ millions) | ($ millions) | ||||||||
December 31, 2017 | January 1, 2017 | ||||||||
Pre-tax | Pre-tax | ||||||||
(1) Restructuring charges - Americas | $ | 1.3 | $ | 0.9 | |||||
(1) Inventory adjustment relating to exit activities - EMEA - (South Africa joint venture) | — | 2.1 | |||||||
(1) Restructuring and other exit charges - EMEA | 3.1 | 3.7 | |||||||
(1) Restructuring charges - Asia | — | 0.4 | |||||||
(2) Competition investigations and related legal charges - EMEA | — | 17.0 | |||||||
(3) ERP system implementation - Americas | 2.1 | 8.3 | |||||||
(4) Deferred purchase consideration - Americas | — | (1.9 | ) | ||||||
(5) Acquisition activity expense - Americas | 0.2 | 0.2 | |||||||
(5) Acquisition activity expense - EMEA | 0.5 | 0.2 | |||||||
Total Non-GAAP adjustments | $ | 7.2 | $ | 30.9 | |||||
* See Income Taxes in Note 5 to the Condensed Consolidated Financial Statements on Form 10-Q for the quarterly period ended December 31, 2017.
Summary of Earnings (Unaudited) | |||||||
(In millions, except share and per share data) | |||||||
Quarter ended | |||||||
December 31, 2017 | January 1, 2017 | ||||||
Net sales | $ | 658.9 | $ | 563.7 | |||
Gross profit | 166.9 | 155.9 | |||||
Operating expenses | 96.7 | 85.0 | |||||
Restructuring charges and other exit charges (credits) | 1.8 | (1.2 | ) | ||||
Legal proceedings charge | — | 17.0 | |||||
Operating earnings | 68.4 | 55.1 | |||||
Earnings before income taxes | 62.5 | 50.6 | |||||
Income tax expense | 88.3 | 13.5 | |||||
Net (loss) earnings attributable to EnerSys stockholders | $ | (25.8 | ) | $ | 36.2 | ||
Net reported (loss) earnings per common share attributable to EnerSys stockholders: | |||||||
Basic | $ | (0.61 | ) | $ | 0.83 | ||
Diluted | $ | (0.61 | ) | $ | 0.82 | ||
Dividends per common share | $ | 0.175 | $ | 0.175 | |||
Weighted-average number of common shares used in reported (loss) earnings per share calculations: | |||||||
Basic | 42,125,745 | 43,429,525 | |||||
Diluted | 42,125,745 | 44,049,674 | |||||
Nine months ended | |||||||
December 31, 2017 | January 1, 2017 | ||||||
Net sales | $ | 1,898.8 | $ | 1,740.3 | |||
Gross profit | 489.9 | 483.5 | |||||
Operating expenses | 283.5 | 277.5 | |||||
Restructuring charges and other exit charges (credits) | 4.4 | 5.0 | |||||
Legal proceedings charge | — | 17.0 | |||||
Operating earnings | 202.0 | 184.0 | |||||
Earnings before income taxes | 178.6 | 167.6 | |||||
Income tax expense | 112.9 | 43.1 | |||||
Net earnings attributable to EnerSys stockholders | $ | 65.6 | $ | 126.4 | |||
Net reported earnings per common share attributable to EnerSys stockholders: | |||||||
Basic | $ | 1.53 | $ | 2.92 | |||
Diluted | $ | 1.51 | $ | 2.88 | |||
Dividends per common share | $ | 0.525 | $ | 0.525 | |||
Weighted-average number of common shares used in reported earnings per share calculations: | |||||||
Basic | 42,837,986 | 43,375,474 | |||||
Diluted | 43,345,926 | 43,943,010 | |||||
The call, scheduled for
The call will also be Webcast on
The conference call information is:
Date: | Thursday, February 8, 2018 |
Time: | 9:00 a.m. Eastern Time |
Via Internet: | http://www.enersys.com |
Domestic Dial-In Number: | 877-359-9508 |
International Dial-In Number: | 224-357-2393 |
Passcode: | 4499229 |
A replay of the conference call will be available from
The replay information is:
Via Internet: | http://www.enersys.com |
Domestic Replay Number: | 855-859-2056 |
International Replay Number: | 404-537-3406 |
Passcode: | 4499229 |
For more information, contact
EDITOR'S NOTE:
More information regarding
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
Although