READING, Pa., Feb. 4 /PRNewswire-FirstCall/ -- EnerSys (NYSE: ENS), the
world's largest manufacturer, marketer and distributor of industrial
batteries, announced today its financial results for the third fiscal quarter
of 2009. Net earnings for the Company's third quarter increased 91% over the
third quarter of the prior year to $30.6 million, or $0.63 per diluted share.
The third fiscal quarter of 2009 diluted EPS results significantly
exceeded the guidance as previously provided on November 5, 2008 of $0.40 -
$0.44 per share. The higher performance was due in part to a combination of
cost control and selling price management. In addition, the net favorable
impact from foreign currency movements in the quarter was approximately $0.10
per share higher than anticipated, when the earnings guidance was provided.
This higher than expected currency benefit was due in large part to the
unprecedented volatility in global currency markets during the third fiscal
quarter.
Net earnings for the third fiscal quarter of 2008 were $16.0 million, or
$0.33 per diluted share, which included $0.8 million, $1.1 million pre-tax,
unfavorable impact of the continuation of the European restructuring plan.
Net sales for the third fiscal quarter of 2009 were $460.9 million,
compared to $553.4 million in the comparable period of the prior year, or a
decrease of 17%. The Company's third quarter sales decline includes
approximately 8% due to weaker foreign currencies, primarily the euro compared
to the U.S. dollar. Organic sales volume declined approximately 10% as the
Company experienced the effects of the ongoing decline in global economic
activity. Partially offsetting the decline were ongoing selling price recovery
actions which contributed approximately 1%.
The Company's operating results for its reporting segments for the third
fiscal quarter of 2009 compared to the third fiscal quarter of 2008 are as
follows (in millions):
Reserve Motive Consolidated
Power Power
Three months ended December 28, 2008:
Net sales $227.4 $233.5 $460.9
Total operating earnings $20.2 $18.7 $38.9
Three months ended December 30, 2007:
Net sales $247.9 $305.5 $553.4
Operating earnings before restructuring
charges $13.7 $18.8 $32.5
Restructuring charges (0.8) (0.3) (1.1)
Total operating earnings $12.9 $18.5 $31.4
Reserve Power total operating earnings increased 57% in the third fiscal
quarter of 2009 in comparison with the prior year quarter. A decline in
organic volume was more than offset by lower lead costs and improved pricing.
Motive Power total operating earnings remained relatively flat in the third
fiscal quarter of 2009 in comparison with the prior year quarter as lower
volume and moderately lower pricing was offset by the decline in lead costs.
Net earnings for the nine fiscal months of 2009 were up 102% and, on a
non-GAAP adjusted basis, were up 66% when compared to the comparable prior
year amounts. Please refer to the section included herein under the heading
"Reconciliation of Non-GAAP Adjusted Financial Measures" for a discussion of
the Company's use of non-GAAP adjusted financial information.
Net earnings for the nine fiscal months of 2009 were $81.3 million or
$1.63 per diluted share. The nine fiscal months of 2009's net earnings
included the following highlighted items which increased net earnings by $0.6
million, or $0.01 per diluted share: a gain of approximately $8.5 million,
$11.3 million pre-tax, or $0.17 per diluted share, from the sale of the
Company's Manchester, England manufacturing facility and other property; a
charge of approximately $2.2 million, $3.4 million pre-tax, or $0.04 per
diluted share, from an accrual of a court assessment against the Company;
costs of approximately $2.1 million, $3.2 million pre-tax, or $0.04 per
diluted share, from the Company's ongoing European restructuring actions;
charges of approximately $3.4 million, $5.2 million pre-tax, or $0.07 per
diluted share, from the Company's first fiscal quarter's refinancing
activities; and costs associated with a secondary offering of the Company's
common stock held by certain of its shareholders of $0.2 million, $0.3 million
pretax, or $0.01 per diluted share. Excluding these highlighted items,
non-GAAP adjusted earnings for the nine fiscal months of 2009 were $80.7
million or $1.62 per diluted share.
Net earnings for the nine fiscal months of 2008 were $40.2 million or
$0.83 per diluted share, included an unfavorable $0.17 per share impact from
the $8.0 million, $11.4 million pre-tax, of the European restructuring and
$0.3 million, $0.4 million pre-tax, unfavorable impact of professional fees
related to a secondary offering. Excluding the highlighted charges, non-GAAP
adjusted net earnings for the nine fiscal months of 2008 were $48.5 million or
$1.00 per diluted share.
Net sales for the nine fiscal months of 2009 were $1.58 billion compared
to $1.44 billion in the prior year, or an increase of 9%. The Company's nine
month growth rate includes approximately 9% attributable to price recovery
actions, 2% due to stronger average foreign currencies, primarily the euro
compared to the U.S. dollar, partially offset by a 2% decline in organic sales
volume.
The Company's operating results for its reporting segments for the nine
fiscal months of 2009 and the comparable prior year period are as follows (in
millions):
Reserve Motive Consolidated
Power Power
Nine months ended December 28, 2008:
Net sales $732.2 $847.5 $1,579.7
Operating earnings before highlighted
items $67.9 $58.2 $126.1
Gain on sale of facilities 10.9 0.4 11.3
Legal proceedings charge (3.4) - (3.4)
Restructuring charges (1.7) (1.5) (3.2)
Total operating earnings $73.7 $57.1 $130.8
Nine months ended December 30, 2007:
Net sales $631.2 $813.6 $1,444.8
Operating earnings before restructuring
charges $31.4 $62.1 $93.5
Restructuring charges (8.4) (3.0) (11.4)
Total operating earnings $23.0 $59.1 $82.1
"Our earnings for the third quarter were a record with diluted earnings
per share of $0.63," stated John D. Craig, chairman, president and chief
executive officer. "As we noted during our call last August we anticipated
reduced demand for certain of our products and services, as a result of global
economic conditions, and we have since taken numerous steps to address this
downturn head on. Our third quarter results reflect some of the benefits of
those actions with the remainder to be experienced in future periods. We view
this as a time for us to continue to further consolidate operations and
undertake additional restructuring of our business. For example, we plan to
restructure our Italian operations with the closure of our manufacturing
facility there and shifting this production to lower cost facilities. We will
be opening a new distribution center to continue to provide responsive service
to our customers in that market. We believe that these additional actions, in
addition to other actions that are being taken, will have a favorable pre-tax
earnings impact of $13 million or $0.19 per share on an annualized basis when
fully implemented. In addition, with our strong balance sheet, that includes
short term investments of approximately $91 million and has over $200 million
in available credit, we believe that we have the financial resources to
weather this economic downturn and that we have the capital available to
remain active in pursuing further acquisition opportunities. In short, we
believe EnerSys will emerge from this economic downturn a leaner and stronger
company"
Mr. Craig continued, "In spite of the challenging economic conditions, for
the fourth fiscal quarter of 2009 we expect adjusted diluted net earnings per
share of between $0.30 and $0.34. This excludes the expected pre-tax $17.5
million or $0.25 per share charge in the quarter from all of our restructuring
actions, the benefits of which we will experience in future periods."
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 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 third fiscal quarters and nine fiscal months ended
December 28, 2008 and December 30, 2007. 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
December 28, December 30,
2008 2007
(In millions, except share
and per share data)
Net earnings reconciliation
As reported net earnings $30.6 $16.0
Non-GAAP adjustments (net of tax):
Restructuring charges 0.1 (3) 0.8 (3)
Gain on sale of facility (0.1) (1) -
Shelf registration and secondary
stock offering - 0.2 (5)
Non-GAAP adjusted net earnings $30.6 $17.0
Outstanding shares used in per
share calculations:
Basic 48,483,224 47,848,603
Diluted 48,601,254 48,762,362
Non-GAAP adjusted net earnings
per share:
Basic $0.63 $0.36
Diluted $0.63 $0.35
Reported net earnings per share:
Basic $0.63 $0.34
Diluted $0.63 $0.33
Nine fiscal months ended
December 28 December 30
2008 2007
(In millions, except share
and per share data)
Net earnings reconciliation
As reported net earnings $81.3 $40.2
Non-GAAP adjustments (net of
tax):
Gain on sale of facilities (8.5) (1) -
Legal proceedings charge 2.2 (2) -
Restructuring charges 2.1 (3) 8.0
Refinancing related charges 3.4 (4) -
Secondary offering fees 0.2 (5) 0.3
Non-GAAP adjusted net earnings $80.7 $48.5
Outstanding shares used in per
share calculations:
Basic 49,130,457 47,277,560
Diluted 49,910,070 48,227,385
Non-GAAP adjusted net earnings
per share:
Basic $1.64 $1.02
Diluted $1.62 $1.00
Reported net earnings per share:
Basic $1.65 $0.85
Diluted $1.63 $0.83
(1) Resulting from pretax gains of approximately $11.3 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.
(2) 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.
(3) Resulting from pretax charges of approximately $0.1 million or $3.2
million in the third fiscal quarter and nine fiscal months of 2009;
and $1.1 million and $11.4 million in the third fiscal quarter and
nine fiscal months of 2008, primarily for severance costs related
to staff reductions, and in fiscal 2008, fixed asset write-offs for
restructuring activities in Europe, related to the Energia
acquisition.
(4) Resulting from pretax charges of approximately $5.2 million in the
First fiscal quarter of 2009, of charges 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.
(5) Resulting from pretax charges of approximately $0.3 million and $0.4
million, respectively, for professional fees related to secondary
stock offerings which occurred in the nine fiscal months of 2009 and
2008.
EnerSys
Summary of Earnings (Unaudited)
(In millions, except share and per share data)
Fiscal quarter ended
December 28, December 30,
2008 2007
Net sales $460.9 $553.4
Gross profit 101.5 97.5
Operating expenses 63.0 65.0
Gain on sale of facility (0.4) -
Restructuring charges 0.1 1.1
Operating earnings 38.9 31.4
Earnings before income taxes 46.4 22.2
Net earnings $30.6 $16.0
Net earnings per common share:
Basic $0.63 $0.34
Diluted $0.63 $0.33
Weighted average shares
outstanding:
Basic 48,483,224 47,848,603
Diluted 48,601,254 48,762,362
EnerSys
Summary of Earnings (Unaudited)
(In millions, except share and per share data)
Nine fiscal months ended
December 28, December 30,
2008 2007
Net sales $1,579.7 $1,444.8
Gross profit 323.1 276.1
Operating expenses 197.0 182.5
Gain on sale of facilities (11.3) -
Restructuring charges 3.2 11.4
Legal proceedings charge 3.4 -
Operating earnings 130.8 82.1
Earnings before income taxes 117.6 56.6
Net earnings $81.3 $40.2
Net earnings per common share:
Basic $1.65 $0.85
Diluted $1.63 $0.83
Weighted average shares
outstanding:
Basic 49,130,457 47,277,560
Diluted 49,910,070 48,227,385
EnerSys will host a conference call to discuss the Company's third fiscal
quarter 2009 financial results and provide an overview of the business. The
call will conclude with a question and answer session.
The call, scheduled for February 5, 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, February 5, 2009
Time: 9:00 a.m. Eastern Time
Via Internet: http://www.enersys.com
Domestic Call-In Number: 800-869-0456
International Dial-In Number: 617-213-4563
Passcode: 94146943
A replay of the conference call will be available from 12:00 p.m. on
February 5, 2009, through midnight on
March 5, 2009.
The replay information is:
Via Internet: http://www.enersys.com
Domestic Replay Number: 888- 286-8010
International Replay Number: 617-801-6888
Passcode: 37772186
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 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 the 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 of EnerSys
+1-800-538-3627