EnerSys Reports Third Quarter Fiscal 2023 Results
Delivers Record Revenue and Expanded Gross Margin
- Record net sales of
$920 million , +9% y/y, and +13% y/y in Constant Currency ("CC")(a) GM 23.2%, +150 bps sequentially, +140 bps y/y as price/mix improvements eclipsed sequential cost increases- Operating earnings
$79 million , +53% y/y; Record adjusted operating earnings$85 million , +41% y/y $1.3 billion backlog, +11% y/y, remains healthy supported by robust demand and order trends across all segments- 2.3X net leverage(b), including .4X benefit from
$150M trade receivable securitization facility closed in Q3 - Board appointed
Tamara Morytko as a director effectiveDecember 7, 2022 - Published first
Task Force on Climate-related Financial Disclosures (TCFD) report
Message from the CEO |
We continue to deliver on our innovation roadmap with proprietary technology solutions that are defining the future of the energy transition. We are excited to have received our first orders for wireless chargers and look forward to showcasing our maintenance-free battery and wireless charger solutions at both the
We are increasingly optimistic that our strong Q3’23 results reflect the sustainable “next step” toward achieving our long-term financial and operational goals. While we are not out of the woods yet with inflation and supply chain unpredictability, demand remains strong with secular trends in our end markets that, along with a strong balance sheet and superior products and services, provide us a buffer from the impact of a potential economic pullback. We believe the steps we have taken over the past three years better position our business to benefit from global megatrends such as 5G, broadband expansion through the
Key Financial Results and Metrics | Third quarter ended | Nine months ended | |||||||||||||||||
In millions, except per share amounts | Change | Change | |||||||||||||||||
$ | 920.2 | $ | 844.0 | 9.0 | % | $ | 2,718.6 | $ | 2,450.3 | 11.0 | % | ||||||||
Diluted EPS (GAAP) | $ | 1.08 | $ | 0.85 | $ | 0.23 | $ | 2.66 | $ | 2.69 | $ | (0.03 | ) | ||||||
Adjusted Diluted EPS (Non-GAAP)(1) | $ | 1.27 | $ | 1.01 | $ | 0.26 | $ | 3.52 | $ | 3.27 | $ | 0.25 | |||||||
Gross Margin (GAAP) | $ | 213.7 | $ | 184.3 | $ | 29.4 | $ | 594.1 | $ | 555.4 | $ | 38.7 | |||||||
Operating Earnings (GAAP) | $ | 78.5 | $ | 51.1 | $ | 27.4 | $ | 182.9 | $ | 161.7 | $ | 21.2 | |||||||
Adjusted Operating Earnings (Non-GAAP)(2) | $ | 84.9 | $ | 60.3 | $ | 24.6 | $ | 215.1 | $ | 196.8 | $ | 18.3 | |||||||
Net Earnings (GAAP) | $ | 44.4 | $ | 36.3 | $ | 8.1 | $ | 109.9 | $ | 115.8 | $ | (5.9 | ) | ||||||
EBITDA (Non-GAAP)(3) | $ | 97.9 | $ | 76.5 | $ | 21.4 | $ | 248.4 | $ | 235.7 | $ | 12.7 | |||||||
Adjusted EBITDA (Non-GAAP)(3) | $ | 98.1 | $ | 79.4 | $ | 18.7 | $ | 269.3 | $ | 251.7 | $ | 17.6 | |||||||
Share Repurchases | $ | — | $ | 83.0 | $ | (83.0 | ) | $ | 22.9 | $ | 114.5 | $ | (91.6 | ) | |||||
Dividend per share | $ | 0.175 | $ | 0.175 | $ | — | $ | 0.525 | $ | 0.525 | $ | — | |||||||
Total Capital Returned to Stockholders | $ | 7.1 | $ | 90.3 | $ | (83.2 | ) | $ | 44.2 | $ | 136.7 | $ | (92.5 | ) |
(a) Net sales and net sales growth rate at CC are non-GAAP financial measures and discussed under Reconciliations of GAAP to Non-GAAP Financial Measures.
(b) Net leverage ratio is a non-GAAP financial measure as defined pursuant to our credit agreement and discussed under Reconciliations of GAAP to Non-GAAP Financial Measures.
(1) Adjusted Diluted EPS is a non-GAAP financial measure and discussed under Reconciliations of GAAP to Non-GAAP Financial Measures.
(2) Operating Earnings are adjusted for charges that the Company incurs as a result of restructuring and exit 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.
(3) 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 and exit 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.
Summary of Results
Third Quarter 2023
Net sales for the third quarter of fiscal 2023 were
Net earnings attributable to
Net earnings for the third quarter of fiscal 2022 was
Excluding these highlighted items, adjusted Net earnings per diluted share for the third quarter of fiscal 2023, on a non-GAAP basis, were
Fiscal Year to Date 2023
Net sales for the nine months of fiscal 2023 were
Net earnings for the nine months of fiscal 2023 was
Net earnings for the nine months of fiscal 2022 was
Adjusted Net earnings per diluted share for the nine months of fiscal 2023, on a non-GAAP basis, were
Fourth Quarter 2023 Outlook
We expect to continue to operate in a dynamic macro environment and anticipate FX and interest rate headwinds, an easing but still unpredictable supply chain, and European utility inflation to persist for some time. While demand for our products remains robust, we believe we will weather and potentially benefit from a slowdown due to large portions of our business that are cycle-independent as well as our significant cash flow generation during past recessionary periods. For the fourth quarter of fiscal 2023, we expect adjusted diluted earnings per share in the range of
Please refer to the section included herein under the heading “Reconciliations of GAAP to Non-GAAP Financial Measures” for a discussion of the Company’s use of non-GAAP adjusted financial information.
Conference Call and Webcast Details
The Company will host a conference call to discuss its third quarter 2023 financial results at
To join the live call, please register through the events section of our Investor Relations webpage at https://investor.enersys.com/events/event-details/q3-2023-enersys-earnings-conference-call-0. A dial-in and unique PIN will be provided upon registration.
About
Sustainability
Sustainability at
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
CONTACT
Investor Relations and Financial Media
610-236-4040
E-mail: investorrelations@enersys.com
Public Relations Manager
Harris, Baio & McCullough
215-440-9800
E-mail: melissa@hbmadv.com
Consolidated Condensed Statements of Income (Unaudited)
(In millions, except share and per share data)
Quarter ended | Nine months ended | ||||||||||
Net sales | $ | 920.2 | $ | 844.0 | $ | 2,718.6 | $ | 2,450.3 | |||
Gross profit | 213.7 | 184.3 | 594.1 | 555.4 | |||||||
Operating expenses | 134.4 | 130.7 | 398.8 | 380.5 | |||||||
Restructuring and other exit charges | 0.8 | 2.5 | 12.4 | 13.2 | |||||||
Operating earnings | 78.5 | 51.1 | 182.9 | 161.7 | |||||||
Earnings before income taxes | 57.8 | 42.8 | 134.9 | 135.0 | |||||||
Income tax expense | 13.4 | 6.5 | 25.0 | 19.2 | |||||||
Net earnings attributable to |
$ | 44.4 | $ | 36.3 | $ | 109.9 | $ | 115.8 | |||
Net reported earnings per common share attributable to |
|||||||||||
Basic | $ | 1.09 | $ | 0.87 | $ | 2.69 | $ | 2.73 | |||
Diluted | $ | 1.08 | $ | 0.85 | $ | 2.66 | $ | 2.69 | |||
Dividends per common share | $ | 0.175 | $ | 0.175 | $ | 0.525 | $ | 0.525 | |||
Weighted-average number of common shares used in reported earnings per share calculations: | |||||||||||
Basic | 40,835,636 | 41,905,815 | 40,787,654 | 42,393,907 | |||||||
Diluted | 41,281,693 | 42,497,045 | 41,267,320 | 43,096,740 |
Consolidated Condensed Balance Sheets (Unaudited)
(In Thousands, Except Share and Per Share Data)
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 298,081 | $ | 402,488 | ||||
Accounts receivable, net of allowance for doubtful accounts: |
581,753 | 719,434 | ||||||
Inventories, net | 835,198 | 715,712 | ||||||
Prepaid and other current assets | 155,159 | 155,559 | ||||||
Total current assets | 1,870,191 | 1,993,193 | ||||||
Property, plant, and equipment, net | 495,751 | 503,264 | ||||||
673,701 | 700,640 | |||||||
Other intangible assets, net | 367,712 | 396,202 | ||||||
Deferred taxes | 57,210 | 60,479 | ||||||
Other assets | 103,302 | 82,868 | ||||||
Total assets | $ | 3,567,867 | $ | 3,736,646 | ||||
Liabilities and Equity | ||||||||
Current liabilities: | ||||||||
Short-term debt | $ | 32,019 | $ | 55,084 | ||||
Accounts payable | 345,255 | 393,096 | ||||||
Accrued expenses | 292,687 | 289,950 | ||||||
Total current liabilities | 669,961 | 738,130 | ||||||
Long-term debt, net of unamortized debt issuance costs | 1,105,124 | 1,243,002 | ||||||
Deferred taxes | 74,526 | 78,228 | ||||||
Other liabilities | 186,910 | 184,011 | ||||||
Total liabilities | 2,036,521 | 2,243,371 | ||||||
Commitments and contingencies | ||||||||
Equity: | ||||||||
Preferred Stock, |
— | — | ||||||
Common Stock, |
560 | 557 | ||||||
Additional paid-in capital | 585,407 | 571,464 | ||||||
(741,196 | ) | (719,119 | ) | |||||
Retained earnings | 1,871,519 | 1,783,586 | ||||||
Contra equity - indemnification receivable | (2,463 | ) | (3,620 | ) | ||||
Accumulated other comprehensive loss | (186,068 | ) | (143,495 | ) | ||||
Total |
1,527,759 | 1,489,373 | ||||||
Nonredeemable noncontrolling interests | 3,587 | 3,902 | ||||||
Total equity | 1,531,346 | 1,493,275 | ||||||
Total liabilities and equity | $ | 3,567,867 | $ | 3,736,646 |
Consolidated Condensed Statements of Cash Flows (Unaudited)
(In Thousands)
Nine months ended | ||||||||
Cash flows from operating activities | ||||||||
Net earnings | $ | 109,860 | $ | 115,819 | ||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 68,998 | 72,322 | ||||||
Write-off of assets relating to exit activities | 8,360 | 3,922 | ||||||
Derivatives not designated in hedging relationships: | ||||||||
Net (losses) gains | (1,383 | ) | (421 | ) | ||||
Cash (settlements) proceeds | 40 | 342 | ||||||
Provision for doubtful accounts | (720 | ) | 1,933 | |||||
Deferred income taxes | (716 | ) | (24 | ) | ||||
Non-cash interest expense | 1,461 | 1,620 | ||||||
Stock-based compensation | 18,770 | 15,817 | ||||||
(Gain) loss on disposal of property, plant, and equipment | (193 | ) | (528 | ) | ||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | 123,398 | (40,264 | ) | |||||
Inventories | (135,905 | ) | (163,747 | ) | ||||
Prepaid and other current assets | (8,323 | ) | (18,344 | ) | ||||
Other assets | (899 | ) | 1,322 | |||||
Accounts payable | (31,614 | ) | (9,086 | ) | ||||
Accrued expenses | (17,149 | ) | (58,233 | ) | ||||
Other liabilities | 1,858 | (480 | ) | |||||
Net cash provided by (used in) operating activities | 135,843 | (78,030 | ) | |||||
Cash flows from investing activities | ||||||||
Capital expenditures | (57,512 | ) | (52,351 | ) | ||||
Proceeds from disposal of facility | — | 3,268 | ||||||
Proceeds from termination of net investment hedges | 43,384 | — | ||||||
Proceeds from disposal of property, plant, and equipment | 452 | 1,433 | ||||||
Net cash (used in) investing activities | (13,676 | ) | (47,650 | ) | ||||
Cash flows from financing activities | ||||||||
Net (repayments) borrowings on short-term debt | (20,317 | ) | (297 | ) | ||||
Proceeds from Second Amended Revolver borrowings | 291,100 | 424,800 | ||||||
Repayments of Second Amended Revolver borrowings | (422,082 | ) | (39,800 | ) | ||||
Repayments of Second Amended Term Loan | (1,625 | ) | (161,447 | ) | ||||
Debt Issuance Costs | — | (2,952 | ) | |||||
Financing costs for debt modification | (1,096 | ) | — | |||||
Option proceeds, net | 1,060 | 1,273 | ||||||
Payment of taxes related to net share settlement of equity awards | (6,385 | ) | (9,120 | ) | ||||
Purchase of treasury stock | (22,907 | ) | (114,534 | ) | ||||
Dividends paid to stockholders | (21,386 | ) | (22,187 | ) | ||||
Other | 842 | 607 | ||||||
Net cash (used in) provided by financing activities | (202,796 | ) | 76,343 | |||||
Effect of exchange rate changes on cash and cash equivalents | (23,778 | ) | (5,411 | ) | ||||
Net decrease in cash and cash equivalents | (104,407 | ) | (54,748 | ) | ||||
Cash and cash equivalents at beginning of period | 402,488 | 451,808 | ||||||
Cash and cash equivalents at end of period | $ | 298,081 | $ | 397,060 |
Reconciliations of GAAP to Non-GAAP Financial Measures
This press release contains financial information determined by methods other than in accordance with
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 net sales and growth rates in constant currency are set forth in the table below, providing a reconciliation of non-GAAP constant currency net sales to the Company’s reported net sales for its business segments.
Quarter ended | Nine months ended | ||||||||||||||||
($ millions) | ($ millions) | ||||||||||||||||
Growth rate | Growth rate | ||||||||||||||||
Energy Systems reported net sales | $ | 434.3 | $ | 385.2 | 12.7 | % | $ | 1,279.9 | $ | 1,126.2 | 13.6 | % | |||||
Exchange rate effect | 15.3 | 49.9 | |||||||||||||||
Energy Systems constant currency net sales | 449.6 | 16.7 | 1,329.8 | 18.1 | |||||||||||||
$ | 361.8 | $ | 339.5 | 6.6 | % | $ | 1,067.7 | $ | 996.3 | 7.2 | % | ||||||
Exchange rate effect | 17.4 | 60.1 | |||||||||||||||
379.2 | 11.7 | 1,127.8 | 13.2 | ||||||||||||||
Specialty reported net sales | $ | 124.1 | $ | 119.3 | 4.1 | % | $ | 371.0 | $ | 327.8 | 13.2 | % | |||||
Exchange rate effect | 2.2 | 7.9 | |||||||||||||||
Specialty constant currency net sales | 126.3 | 5.9 | 378.9 | 15.6 | |||||||||||||
Total reported net sales | $ | 920.2 | $ | 844.0 | 9.0 | % | $ | 2,718.6 | $ | 2,450.3 | 11.0 | % | |||||
Exchange rate effect | 34.9 | 117.9 | |||||||||||||||
Total constant currency net sales | 955.1 | 13.2 | 2,836.5 | 15.8 |
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) | ||||||||||||||
Energy Systems | Specialty | Total | ||||||||||||
$ | 434.3 | $ | 361.8 | $ | 124.1 | $ | 920.2 | |||||||
Operating Earnings | $ | 20.5 | $ | 47.1 | $ | 10.9 | $ | 78.5 | ||||||
Inventory adjustment relating to exit activities | (0.2 | ) | (0.7 | ) | — | (0.9 | ) | |||||||
Restructuring and other exit charges | 0.2 | 0.6 | — | 0.8 | ||||||||||
Amortization of identified intangible assets from recent acquisitions | 5.9 | — | 0.4 | 6.3 | ||||||||||
Other | 0.1 | 0.1 | — | 0.2 | ||||||||||
Adjusted Operating Earnings | $ | 26.5 | $ | 47.1 | $ | 11.3 | $ | 84.9 |
Quarter ended | |||||||||||
($ millions) | |||||||||||
Energy Systems | Specialty | Total | |||||||||
$ | 385.2 | $ | 339.5 | $ | 119.3 | $ | 844.0 | ||||
Operating Earnings | $ | 2.8 | $ | 37.3 | $ | 11.0 | $ | 51.1 | |||
Inventory adjustment relating to exit activities | — | — | — | — | |||||||
Restructuring and other exit charges | 0.7 | 1.7 | 0.1 | 2.5 | |||||||
Amortization of identified intangible assets from recent acquisitions | 5.9 | — | 0.4 | 6.3 | |||||||
Other | 0.4 | — | — | 0.4 | |||||||
Adjusted Operating Earnings | $ | 9.8 | $ | 39.0 | $ | 11.5 | $ | 60.3 |
Increase (Decrease) as a % from prior year quarter | Energy Systems | Specialty | Total | ||||||||
12.7 | % | 6.6 | % | 4.1 | % | 9.0 | % | ||||
Operating Earnings | NM | 25.8 | (0.6 | ) | 53.5 | ||||||
Adjusted Operating Earnings | NM | 20.6 | (1.6 | ) | 40.6 |
NM = Not Meaningful
Nine months ended | ||||||||||||
($ millions) | ||||||||||||
Energy Systems | Specialty | Total | ||||||||||
$ | 1,279.9 | $ | 1,067.7 | $ | 371.0 | $ | 2,718.6 | |||||
Operating Earnings | $ | 37.8 | $ | 116.8 | $ | 28.3 | $ | 182.9 | ||||
Inventory adjustment relating to exit activities | (0.2 | ) | 0.8 | — | 0.6 | |||||||
Restructuring and other exit charges | 1.2 | 11.2 | — | 12.4 | ||||||||
Amortization of identified intangible assets from recent acquisitions | 17.7 | — | 1.2 | 18.9 | ||||||||
Other | 0.1 | 0.2 | — | 0.3 | ||||||||
Adjusted Operating Earnings | $ | 56.6 | $ | 129.0 | $ | 29.5 | $ | 215.1 |
Nine months ended | ||||||||||||
($ millions) | ||||||||||||
Energy Systems | Specialty | Total | ||||||||||
$ | 1,126.2 | $ | 996.3 | $ | 327.8 | $ | 2,450.3 | |||||
Operating Earnings | $ | 10.4 | $ | 116.7 | $ | 34.6 | $ | 161.7 | ||||
Inventory adjustment relating to exit activities | — | 1.0 | — | 1.0 | ||||||||
Restructuring and other exit charges | 1.4 | 12.9 | (1.1 | ) | 13.2 | |||||||
Amortization of identified intangible assets from recent acquisitions | 17.8 | — | 1.3 | 19.1 | ||||||||
Other | 1.8 | — | — | 1.8 | ||||||||
Adjusted Operating Earnings | $ | 31.4 | $ | 130.6 | $ | 34.8 | $ | 196.8 |
Increase (Decrease) as a % over prior year | Energy Systems | Specialty | Total | ||||||||
13.6 | % | 7.2 | % | 13.2 | % | 11.0 | % | ||||
Operating Earnings | NM | (0.1 | ) | (18.2 | ) | 13.1 | |||||
Adjusted Operating Earnings | 80.4 | (1.2 | ) | (15.1 | ) | 9.3 |
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 | Nine months ended | ||||||||||
($ millions) | ($ millions) | ||||||||||
Net Earnings | $ | 44.4 | $ | 36.3 | $ | 109.9 | $ | 115.8 | |||
Depreciation | 14.8 | 15.7 | 45.1 | 47.2 | |||||||
Amortization | 7.8 | 8.3 | 23.9 | 25.1 | |||||||
Interest | 17.5 | 9.7 | 44.5 | 28.4 | |||||||
Income Taxes | 13.4 | 6.5 | 25.0 | 19.2 | |||||||
EBITDA | 97.9 | 76.5 | 248.4 | 235.7 | |||||||
Non-GAAP adjustments | 0.2 | 2.9 | 20.9 | 16.0 | |||||||
Adjusted EBITDA | $ | 98.1 | $ | 79.4 | $ | 269.3 | $ | 251.7 |
The following table provides the non-GAAP adjustments shown in the reconciliation above:
Quarter ended | Nine months ended | |||||||||||
($ millions) | ($ millions) | |||||||||||
Inventory adjustment relating to exit activities | $ | (0.9 | ) | $ | 0.0 | $ | 0.6 | $ | 1.0 | |||
Restructuring and other exit charges | 0.8 | 2.5 | 12.4 | 13.2 | ||||||||
Other | 0.4 | 0.4 | 1.5 | 1.8 | ||||||||
Remeasurement of monetary assets included in other (income) expense relating to exit from |
(0.6 | ) | — | 4.5 | — | |||||||
Asset Securitization Transaction Fees | 0.5 | — | 0.5 | — | ||||||||
Cost of funding to terminate net investment hedges | — | — | 1.4 | — | ||||||||
Non-GAAP adjustments | $ | 0.2 | $ | 2.9 | $ | 20.9 | $ | 16.0 |
The following table provides a reconciliation of net earnings to EBITDA (non-GAAP) and adjusted EBITDA (non-GAAP) per credit agreement for
Last twelve months | ||||||
(in millions, except ratios) | ||||||
Net earnings as reported | $ | 137.9 | $ | 149.7 | ||
Add back: | ||||||
Depreciation and amortization | 92.6 | 96.2 | ||||
Interest expense | 53.9 | 37.1 | ||||
Income tax expense | 35.8 | 28.9 | ||||
EBITDA (non GAAP) | $ | 320.2 | $ | 311.9 | ||
Adjustments per credit agreement definitions(1) | 59.8 | 52.7 | ||||
Adjusted EBITDA (non-GAAP) per credit agreement(1) | $ | 380.0 | $ | 364.6 | ||
Total net debt(2) | $ | 858.9 | $ | 891.7 | ||
Leverage ratios: | ||||||
Total net debt/credit adjusted EBITDA ratio | 2.3 X | 2.5 X |
(1) | The |
(2) | Debt includes finance lease obligations and letters of credit and is net of all cash and cash equivalents, as defined in the Third Amended Credit Facility. In Q3 fiscal 2023, the amounts deducted in the calculation of net debt were all cash and cash equivalents of |
Included below is a reconciliation of historical non-GAAP adjusted Net earnings to reported amounts. Non-GAAP adjusted operating earnings and historical 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) | ||||||||
Net Earnings reconciliation | ||||||||
As reported Net Earnings | $ | 44.4 | $ | 36.3 | ||||
Non-GAAP adjustments: | ||||||||
Inventory adjustment relating to exit activities | (0.9 | ) | (1) | — | (1) | |||
Restructuring and other exit charges | 0.8 | (2) | 2.5 | (2) | ||||
Amortization of identified intangible assets from recent acquisitions | 6.3 | (3) | 6.3 | (3) | ||||
Remeasurement of monetary assets included in other (income) expense relating to exit from |
(0.6 | ) | — | |||||
Asset Securitization Transaction Fees | 0.5 | |||||||
Other | 0.4 | 0.4 | ||||||
Income tax effect of above non-GAAP adjustments | 1.4 | (2.5 | ) | |||||
Non-GAAP adjusted Net Earnings | $ | 52.3 | $ | 43.0 | ||||
Outstanding shares used in per share calculations | ||||||||
Basic | 40,835,636 | 41,905,815 | ||||||
Diluted | 41,281,693 | 42,497,045 | ||||||
Non-GAAP adjusted Net Earnings per share: | ||||||||
Basic | $ | 1.28 | $ | 1.03 | ||||
Diluted | $ | 1.27 | $ | 1.01 | ||||
Reported Net Earnings (Loss) per share: | ||||||||
Basic | $ | 1.09 | $ | 0.87 | ||||
Diluted | $ | 1.08 | $ | 0.85 | ||||
Dividends per common share | $ | 0.175 | $ | 0.175 |
The following table provides the line of business allocation of the non-GAAP adjustments of items relating operating earnings (that are allocated to lines of business) shown in the reconciliation above:
Quarter ended | |||||||
($ millions) | |||||||
Pre-tax | Pre-tax | ||||||
(1) Inventory adjustment relating to exit activities - Energy Systems | $ | (0.2 | ) | $ | — | ||
(1) Inventory adjustment relating to exit activities - |
(0.7 | ) | — | ||||
(2) Restructuring and other exit charges - Energy Systems | 0.2 | 0.7 | |||||
(2) Restructuring and other exit charges - |
0.6 | 1.7 | |||||
(2) Restructuring and other exit charges - Specialty | — | 0.1 | |||||
(3) Amortization of identified intangible assets from recent acquisitions - Energy Systems | 5.9 | 5.9 | |||||
(3) Amortization of identified intangible assets from recent acquisitions - Specialty | 0.4 | 0.4 | |||||
Total Non-GAAP adjustments | $ | 6.2 | $ | 8.8 |
Nine months ended | ||||||||
(in millions, except share and per share amounts) | ||||||||
Net Earnings reconciliation | ||||||||
As reported Net Earnings | $ | 109.9 | $ | 115.8 | ||||
Non-GAAP adjustments: | ||||||||
Inventory adjustment relating to exit activities | 0.6 | (1) | 1.0 | (1) | ||||
Restructuring and other exit charges | 12.4 | (2) | 13.2 | (2) | ||||
Amortization of identified intangible assets from recent acquisitions | 18.9 | (3) | 19.1 | (3) | ||||
Remeasurement of monetary assets included in other (income) expense relating to exit from |
4.5 | — | ||||||
Asset Securitization Transaction Fees | 0.5 | |||||||
Cost of funding to terminate net investment hedges | 1.4 | — | ||||||
Financing fees related to debt modification | 1.2 | — | ||||||
Other | 1.5 | 1.8 | ||||||
Income tax effect of above non-GAAP adjustments | (5.5 | ) | (10.0 | ) | ||||
Non-GAAP adjusted Net Earnings | $ | 145.4 | $ | 140.9 | ||||
Outstanding shares used in per share calculations | ||||||||
Basic | 40,787,654 | 42,393,907 | ||||||
Diluted | 41,267,320 | 43,096,740 | ||||||
Non-GAAP adjusted Net Earnings per share: | ||||||||
Basic | $ | 3.56 | $ | 3.33 | ||||
Diluted | $ | 3.52 | $ | 3.27 | ||||
Reported Net Earnings (Loss) per share: | ||||||||
Basic | $ | 2.69 | $ | 2.73 | ||||
Diluted | $ | 2.66 | $ | 2.69 | ||||
Dividends per common share | $ | 0.525 | $ | 0.525 |
The following table provides the line of business allocation of the non-GAAP adjustments shown in the reconciliation above:
Nine months ended | ||||||||
($ millions) | ||||||||
Pre-tax | Pre-tax | |||||||
(1) Inventory adjustment relating to exit activities - Energy Systems | $ | (0.2 | ) | $ | — | |||
(1) Inventory adjustment relating to exit activities - |
0.8 | 1.0 | ||||||
(2) Restructuring and other exit charges - Energy Systems | 1.2 | 1.4 | ||||||
(2) Restructuring and other exit charges - |
11.2 | 12.9 | ||||||
(2) Restructuring and other exit charges - Specialty | — | (1.1 | ) | |||||
(3) Amortization of identified intangible assets from recent acquisitions - Energy Systems | 17.7 | 17.8 | ||||||
(3) Amortization of identified intangible assets from recent acquisitions - Specialty | 1.2 | 1.3 | ||||||
Total Non-GAAP adjustments | $ | 31.9 | $ | 33.3 |
Source: EnerSys