UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 24, 2023
(Exact name of registrant as specified in its charter)
Commission File Number: 1-32253
| (State or other jurisdiction of incorporation) | (IRS Employer Identification No.) | |||||||
(Address of principal executive offices, including zip code)
(610 ) 208-1991
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
| Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). | |||||
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | |||||
Item 2.02. Results of Operations and Financial Condition
On May 24, 2023, EnerSys issued an earnings press release discussing its financial results for the fourth quarter of fiscal 2023. The press release, attached as Exhibit 99.1 hereto and incorporated herein by reference, is being furnished to the SEC and shall not be deemed to be "filed" for any purpose.
Item 8.01. Other Events
On May 24, 2023, EnerSys issued a press release announcing that its Board of Directors has declared a quarterly cash dividend of $0.175 per share, payable on June 30, 2023, to stockholders of record as of June 16, 2023. The press release, attached hereto as Exhibit 99.2, is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
| 99.1 | |||||
| 99.2 | |||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||
Signature(s)
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| EnerSys | ||||||||
Date: May 24, 2023 | By: | /s/ Andrea J. Funk | ||||||
| Andrea J. Funk | ||||||||
| Chief Financial Officer | ||||||||
Exhibit 99.1 PRESS RELEASE, DATED MAY 24, 2023, OF ENERSYS REGARDING FINANCIAL
RESULTS FOR THE FOURTH QUARTER FISCAL 2023
 | ||
ENERSYS REPORTS FOURTH QUARTER AND FULL YEAR FISCAL 2023 RESULTS
DELIVERS RECORD NET SALES AND EARNINGS FOR THE FOURTH QUARTER AND FULL YEAR
Fourth Quarter Fiscal 2023 Highlights
(All comparisons against the fourth quarter of fiscal year 2022 unless otherwise noted)
•Delivered record net sales of $990M, +9%
•Achieved 24.9% GM, +340 bps, including $17M reduction to COGS from Inflation Reduction Act (IRA) tax credits under IRC 45X
•Generated record operating earnings of $95M, +114%, and adjusted operating earnings of $107 million, +60%
•$1.3B backlog eased slightly, -7%, 2X pre-COVID levels with stable demand trends
•Realized record diluted EPS of $1.59, +137%, and adjusted diluted EPS of $1.82, +52%
•Reduced net leverage(b) to 1.8X EBITDA
•Earned the Better Practice Award from the U.S. Department of Energy Better Plants Program
•Announced the appointment of Shannon Thomas as Chief Human Resources Officer
•Published 2022 Sustainability Update and achieved 4% reduction in our global greenhouse gas emissions vs 2021
Full Year Fiscal 2023 Highlights
(All comparisons against 2022 unless otherwise noted)
• Delivered record net sales of $3.7B, +10%
• Generated record operating earnings of $278M, +35% and adjusted operating earnings of $322M, +22%
• Hit record operating earnings, adjusted operating earnings, diluted EPS, and adjusted diluted EPS, before recording the $17M of IRC 45X tax credits, even after including FX and interest headwinds in excess of $1 per diluted share
• Realized record diluted EPS of $4.25, +26% and adjusted diluted EPS of $5.34, +19%
• Reported operating cash flow of $280M, +$346M and free cash flow(a) of $191M, +$331M
• Returned $51M to shareholders through share repurchases and dividends
READING, Pa., May 24, 2023 (GLOBE NEWSWIRE) -- EnerSys (NYSE: ENS), the global leader in stored energy solutions for industrial applications, announced today results for its fourth quarter of fiscal 2023, which ended on March 31, 2023.
| Message from the CEO | ||||||||||||||
EnerSys delivered an outstanding fourth quarter, with record revenue of $990 million, up 9% year-over-year, driven primarily by strong price realization and organic growth, partially offset by foreign currency. We achieved significant gross margin improvement, despite continued margin pressure from inflation and even before a $17 million benefit to cost of goods sold from tax credits related to Internal Revenue Code section 45X created by the Inflation Reduction Act. We realized record GAAP diluted EPS of $1.59 and adjusted diluted EPS of $1.82, up $0.62 versus prior year, including $0.42 benefit from IRA. While further guidance may be forthcoming from the IRS, we believe EnerSys's eligibility for Section 45X credits reinforces the critical nature of the products and services we provide.
In fiscal 2023, we delivered sales and earnings growth in excess of our expectations. The EnerSys team performed remarkably well in a challenging environment, mitigating continued inflation, rising interest rates, foreign exchange headwinds, and operational challenges, while executing collaboratively to deliver record results. Our impressive net earnings combined with effective management of operating capital resulted in $280 million of operating cash flow, $191 million of free cash flow and $51 million of capital returned to shareholders through repurchases and dividends.
We continue to deliver on our innovation roadmap with strategic investments in proprietary technology solutions that are defining the future of the energy transition. We continue to progress toward full commercialization of our proprietary and revolutionary EV Fast Charge and Storage system (FC&S) which combines energy storage, backup power and EV fast charging capabilities in a single solution.
As global megatrends including electrification, decarbonization and automation drive increased demand for energy storage, EnerSys is well-positioned to deliver the solutions that our customers need. In addition, we expect that government policy support such as the Inflation Reduction Act (IRA) and the Rural Digital Opportunity Fund (RDOF) will further accelerate demand for our solutions. We remain focused on delivering long-term value to our stockholders through profitable growth and a disciplined capital allocation strategy, while also achieving our sustainability objectives. As we enter Fiscal 2024, although significant uncertainty in the global markets remains, we could not be more excited about the growth potential of our Company and the markets in which we compete.
We look forward to discussing our strategic plans, growth drivers and long-term outlook in detail during our investor day at the New York Stock Exchange on June 15.
David M. Shaffer, President and Chief Executive Officer, EnerSys
Key Financial Results and Metrics | Fourth quarter ended | Twelve months ended | |||||||||||||||||||||||||||||||||
In millions, except per share amounts | March 31, 2023 | March 31, 2022 | Change | March 31, 2023 | March 31, 2022 | Change | |||||||||||||||||||||||||||||
| Net Sales | $ | 989.9 | $ | 907.0 | 9.1 | % | $ | 3,708.5 | $ | 3,357.3 | 10.5 | % | |||||||||||||||||||||||
| Diluted EPS (GAAP) | $ | 1.59 | $ | 0.67 | $ | 0.92 | $ | 4.25 | $ | 3.36 | $ | 0.89 | |||||||||||||||||||||||
Adjusted Diluted EPS (Non-GAAP)(1) | $ | 1.82 | $ | 1.20 | $ | 0.62 | $ | 5.34 | $ | 4.47 | $ | 0.87 | |||||||||||||||||||||||
| Gross Margin (GAAP) | $ | 246.0 | $ | 194.6 | $ | 51.4 | $ | 840.1 | $ | 750.0 | $ | 90.1 | |||||||||||||||||||||||
| Operating Earnings (GAAP) | $ | 95.4 | $ | 44.5 | $ | 50.9 | $ | 278.3 | $ | 206.2 | $ | 72.1 | |||||||||||||||||||||||
Adjusted Operating Earnings (Non-GAAP)(2) | $ | 107.1 | $ | 66.8 | $ | 40.3 | $ | 322.2 | $ | 263.6 | $ | 58.6 | |||||||||||||||||||||||
| Net Earnings (GAAP) | $ | 65.9 | $ | 28.1 | $ | 37.8 | $ | 175.8 | $ | 143.9 | $ | 31.9 | |||||||||||||||||||||||
EBITDA (Non-GAAP)(3) | $ | 112.9 | $ | 71.8 | $ | 41.1 | $ | 361.3 | $ | 307.5 | $ | 53.8 | |||||||||||||||||||||||
Adjusted EBITDA (Non-GAAP)(3) | $ | 118.2 | $ | 87.8 | $ | 30.4 | $ | 387.5 | $ | 339.5 | $ | 48.0 | |||||||||||||||||||||||
| Share Repurchases | $ | — | $ | 83.0 | $ | (83.0) | $ | 22.9 | $ | 114.5 | $ | (91.6) | |||||||||||||||||||||||
| Dividend per share | $ | 0.175 | $ | 0.175 | $ | — | $ | 0.700 | $ | 0.700 | $ | — | |||||||||||||||||||||||
| Total Capital Returned to Stockholders | $ | 7.1 | $ | 49.0 | $ | (41.9) | $ | 51.3 | $ | 186.0 | $ | (134.7) | |||||||||||||||||||||||
(a) Free cash flow is a 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
Fourth Quarter 2023
Net sales for the fourth quarter of fiscal 2023 were $989.9 million, an increase of 9.1% from the prior year fourth quarter net sales of $907.0 million and increased sequentially 7.6% from the third quarter of fiscal 2023 net sales of $920.2 million. The increase compared to prior year quarter was the result of a 7% increase in pricing and a 4% increase in organic growth, partially offset by a 2% decrease in foreign currency translation impact. The sequential increase was due to a 2% increase in pricing.
Net earnings attributable to EnerSys stockholders (“Net earnings”) for the fourth quarter of fiscal 2023 was $65.9 million, or $1.59 per diluted share, which included an unfavorable highlighted net of tax impact of $9.5 million, or $0.23 per diluted share, from highlighted items described in further detail in the tables shown below, reconciling non-GAAP adjusted financial measures to reported amounts.
Net earnings for the fourth quarter of fiscal 2022 was $28.1 million, or $0.67 per diluted share, which included an unfavorable highlighted net of tax impact of $22.0 million, or $0.53 per diluted share from highlighted items described in further detail in the tables shown below, reconciling non-GAAP adjusted financial measures to reported amounts.
Excluding these highlighted items, adjusted Net earnings per diluted share for the fourth quarter of fiscal 2023, on a non-GAAP basis, were $1.82, compared to the guidance of $1.33 to $1.43 per diluted share for the fourth quarter given by the Company on February 8, 2023. These earnings compare to the prior year fourth quarter adjusted Net earnings of $1.20 per diluted share. 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, which includes tables reconciling GAAP and non-GAAP adjusted financial measures for the quarters ended March 31, 2023 and March 31, 2022.
Fiscal Year to Date 2023
Net sales for the twelve months of fiscal 2023 were $3,708.5 million, an increase of 10.5% from the prior year twelve months net sales of $3,357.3 million. This increase was due to an 8% increase in pricing and 7% increase in organic volume, partially offset by a 4% decrease in foreign currency translation impact.
Net earnings for the twelve months of fiscal 2023 was $175.8 million, or $4.25 per diluted share, which included an unfavorable highlighted net of tax impact of $45.0 million, or $1.09 per diluted share, from highlighted items described in further detail in the tables shown below, reconciling non-GAAP adjusted financial measures to reported amounts.
Net earnings for the twelve months of fiscal 2022 was $143.9 million, or $3.36 per diluted share, which included an unfavorable highlighted net of tax impact of $47.1 million, or $1.11 per diluted share, from highlighted items described in further detail in the tables shown below, reconciling non-GAAP adjusted financial measures to reported amounts.
Adjusted Net earnings per diluted share for the twelve months of fiscal 2023, on a non-GAAP basis, were $5.34. This compares to the prior year twelve months adjusted Net earnings of $4.47 per diluted share. 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.
First Quarter 2024 Outlook
We expect to continue to operate in a dynamic macro environment and anticipate headwinds including FX, geopolitical tensions, supply chain challenges and inflation to persist for some time. Absent clarification from the IRS on 45X credits, we expect our first quarter of fiscal 2024 adjusted diluted earnings per share to be in the range of $1.77 to $1.87, inclusive of $0.40 - $0.50 from IRA benefits. Excluding the IRA credits, this represents an increase of approximately 20% over the prior year, at the midpoint, reflecting stable demand trends and a healthy backlog. We expect our gross margin for the first quarter of fiscal 2024 to be in the range of 24.5% to 26.5% including 150 bps to 250bps from 45X tax credits. For the full year of fiscal 2024, we expect capital expenditures to be approximately $120 million. While we await further clarification on section 45X from the IRS, based on currently available information we believe a material portion of our U.S. produced batteries qualify for this tax credit. We intend to use these proceeds to accelerate our strategic initiatives which align with the intentions of this law, including securing a domestic source of lithium cells, and may increase our capital spending projections.
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 fourth quarter 2023 financial results at 9:00 AM (EST) Thursday, May 25, 2023. A live broadcast as well as a replay of the call can be accessed through the Investor Relations section of the company’s website at https://investor.enersys.com.
To join the live call, please register through the events section of our Investor Relations webpage at https://register.vevent.com/register/BI156606f019e946db803bdf87b2ca31f4. A dial-in and unique PIN will be provided upon registration.
About EnerSys
EnerSys is the global leader in stored energy solutions for industrial applications, manufactures and distributes energy systems solutions and motive power batteries, specialty batteries, battery chargers, power equipment, battery accessories and outdoor equipment enclosure solutions to customers worldwide. Energy Systems, which combine enclosures, power conversion, power distribution and energy storage, are used in the telecommunication, broadband and utility industries, uninterruptible power supplies, and numerous applications requiring stored energy solutions. Motive power batteries and chargers are utilized in electric forklift trucks and other industrial electric powered vehicles. Specialty batteries are used in aerospace and defense applications, large over-the-road trucks, premium automotive, medical and security systems applications. EnerSys also provides aftermarket and customer support services to its customers in over 100 countries through its sales and manufacturing locations around the world. With the NorthStar acquisition, EnerSys has solidified its position as the market leader for premium Thin Plate Pure Lead batteries which are sold across all three lines of business. More information regarding EnerSys can be found at www.enersys.com.
Sustainability
Sustainability at EnerSys is about more than just the benefits and impacts of our products. Our commitment to sustainability encompasses many important environmental, social and governance issues. Sustainability is a fundamental part of how we manage our own operations. Minimizing our environmental footprint is a priority. Sustainability is our commitment to our employees, our customers and the communities we serve. Our products facilitate positive environmental, social and economic impacts around the world. To learn more visit: https://www.enersys.com/en/about-us/sustainability/.
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 EnerSys expects or anticipates will occur in the future, including statements relating to sales growth, earnings or earnings per share growth, order intake, backlog, payment of future cash dividends, commodity prices, execution of its stock buy back program, judicial or regulatory proceedings, and market share, as well as statements expressing optimism or pessimism about future operating results or benefits from its cash dividend, its stock buy back programs, future responses to and effects of the COVID-19 pandemic, adverse developments with respect to the economic conditions in the U.S. in the markets in which we operate and other uncertainties, including the impact of supply chain disruptions, interest rate changes, inflationary pressures, geopolitical
and other developments and labor shortages on the economic recovery and our business 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 7. Management's Discussion and Analysis of Financial Condition and Results of Operations,” and “Forward-Looking Statements,” set forth in EnerSys’ Annual Report on Form 10-K for the fiscal year ended March 31, 2023. No undue reliance should be placed on any forward-looking statements.
CONTACT
Lisa Hartman
Investor Relations and Financial Media
EnerSys
610-236-4040
E-mail: investorrelations@enersys.com
Melissa Maycott
Public Relations Manager
Harris, Baio & McCullough
215-440-9800
E-mail: melissa@hbmadv.com
EnerSys
Consolidated Condensed Statements of Income (Unaudited)
(In millions, except share and per share data)
| Quarter ended | Twelve months ended | ||||||||||||||||||||||
| March 31, 2023 | March 31, 2022 | March 31, 2023 | March 31, 2022 | ||||||||||||||||||||
| Net sales | $ | 989.9 | $ | 907.0 | $ | 3,708.5 | $ | 3,357.3 | |||||||||||||||
| Gross profit | 246.0 | 194.6 | 840.1 | 750.0 | |||||||||||||||||||
| Operating expenses | 146.1 | 140.3 | 544.9 | 520.8 | |||||||||||||||||||
| Restructuring and other exit charges | 4.0 | 5.6 | 16.4 | 18.8 | |||||||||||||||||||
| Impairment of indefinite-lived intangibles | 0.5 | 1.2 | 0.5 | 1.2 | |||||||||||||||||||
| Loss on assets held for sale | — | 3.0 | — | 3.0 | |||||||||||||||||||
| Operating earnings | 95.4 | 44.5 | 278.3 | 206.2 | |||||||||||||||||||
| Earnings before income taxes | 75.7 | 38.9 | 210.6 | 173.9 | |||||||||||||||||||
| Income tax expense | 9.8 | 10.8 | 34.8 | 30.0 | |||||||||||||||||||
| Net earnings attributable to EnerSys stockholders | $ | 65.9 | $ | 28.1 | $ | 175.8 | $ | 143.9 | |||||||||||||||
| Net reported earnings per common share attributable to EnerSys stockholders: | |||||||||||||||||||||||
Basic | $ | 1.61 | $ | 0.68 | $ | 4.31 | $ | 3.42 | |||||||||||||||
Diluted | $ | 1.59 | $ | 0.67 | $ | 4.25 | $ | 3.36 | |||||||||||||||
Dividends per common share | $ | 0.175 | $ | 0.175 | $ | 0.70 | $ | 0.70 | |||||||||||||||
| Weighted-average number of common shares used in reported earnings per share calculations: | |||||||||||||||||||||||
Basic | 40,873,977 | 41,243,629 | 40,809,235 | 42,106,337 | |||||||||||||||||||
Diluted | 41,505,060 | 41,843,270 | 41,326,755 | 42,783,373 | |||||||||||||||||||
EnerSys
Consolidated Condensed Balance Sheets (Unaudited)
(In Thousands, Except Share and Per Share Data)
| March 31, | ||||||||||||||
| 2023 | 2022 | |||||||||||||
| Assets | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | 346,665 | $ | 402,488 | ||||||||||
| Accounts receivable, net of allowance for doubtful accounts (2023–$8,775; 2022–$12,219) | 637,817 | 719,434 | ||||||||||||
| Inventories, net | 797,798 | 715,712 | ||||||||||||
| Prepaid and other current assets | 113,601 | 155,559 | ||||||||||||
| Total current assets | 1,895,881 | 1,993,193 | ||||||||||||
| Property, plant, and equipment, net | 513,283 | 503,264 | ||||||||||||
| Goodwill | 676,715 | 700,640 | ||||||||||||
| Other intangible assets, net | 360,412 | 396,202 | ||||||||||||
| Deferred taxes | 49,152 | 60,479 | ||||||||||||
| Other assets | 121,231 | 82,868 | ||||||||||||
| Total assets | $ | 3,616,674 | $ | 3,736,646 | ||||||||||
| Liabilities and Equity | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Short-term debt | $ | 30,642 | $ | 55,084 | ||||||||||
| Current portion of finance leases | 90 | 185 | ||||||||||||
| Accounts payable | 378,641 | 393,096 | ||||||||||||
| Accrued expenses | 308,947 | 289,765 | ||||||||||||
| Total current liabilities | 718,320 | 738,130 | ||||||||||||
| Long-term debt, net of unamortized debt issuance costs | 1,041,989 | 1,243,002 | ||||||||||||
| Finance leases | 254 | 231 | ||||||||||||
| Deferred taxes | 61,118 | 78,228 | ||||||||||||
| Other liabilities | 191,112 | 183,780 | ||||||||||||
| Total liabilities | 2,012,793 | 2,243,371 | ||||||||||||
| Commitments and contingencies | ||||||||||||||
| Equity: | ||||||||||||||
| Preferred Stock, $0.01 par value, 1,000,000 shares authorized, no shares issued or outstanding at March 31, 2023 and at March 31, 2022 | — | — | ||||||||||||
| Common Stock, $0.01 par value per share, 135,000,000 shares authorized, 56,004,613 shares issued and 40,901,059 shares outstanding at March 31, 2023; 55,748,924 shares issued and 40,986,658 shares outstanding at March 31, 2022 | 560 | 557 | ||||||||||||
| Additional paid-in capital | 596,464 | 571,464 | ||||||||||||
| Treasury stock at cost, 15,103,554 shares held as of March 31, 2023 and 14,762,266 shares held as of March 31, 2022 | (740,956) | (719,119) | ||||||||||||
| Retained earnings | 1,930,148 | 1,783,586 | ||||||||||||
| Contra equity - indemnification receivable | (2,463) | (3,620) | ||||||||||||
| Accumulated other comprehensive loss | (183,474) | (143,495) | ||||||||||||
| Total EnerSys stockholders’ equity | 1,600,279 | 1,489,373 | ||||||||||||
| Nonredeemable noncontrolling interests | 3,602 | 3,902 | ||||||||||||
| Total equity | 1,603,881 | 1,493,275 | ||||||||||||
| Total liabilities and equity | $ | 3,616,674 | $ | 3,736,646 | ||||||||||
EnerSys
Consolidated Condensed Statements of Cash Flows (Unaudited)
(In Thousands)
| Fiscal year ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | ||||||||||||||||||
| Cash flows from operating activities | ||||||||||||||||||||
| Net earnings | $ | 175,810 | $ | 143,911 | $ | 143,374 | ||||||||||||||
| Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||||||||||||
| Depreciation and amortization | 91,153 | 95,878 | 94,082 | |||||||||||||||||
| Write-off of assets relating to restructuring and other exit charges | 8,920 | 6,503 | 10,231 | |||||||||||||||||
| Loss on assets held for sale | — | 2,973 | — | |||||||||||||||||
| Impairment of indefinite-lived intangibles | 480 | 1,178 | — | |||||||||||||||||
| Net losses (gains) | (1,182) | 157 | (430) | |||||||||||||||||
| Cash proceeds (settlements) | 470 | 255 | 905 | |||||||||||||||||
| Provision for doubtful accounts | (431) | 2,621 | 178 | |||||||||||||||||
| Deferred income taxes | (15,236) | 1,115 | (8,994) | |||||||||||||||||
| Non-cash interest expense | 1,964 | 2,107 | 2,072 | |||||||||||||||||
| Stock-based compensation | 26,371 | 24,289 | 19,817 | |||||||||||||||||
| Gain on disposal of property, plant, and equipment | (113) | (490) | (3,883) | |||||||||||||||||
| Changes in assets and liabilities, net of effects of acquisitions: | ||||||||||||||||||||
| Accounts receivable | 67,553 | (128,956) | 8,713 | |||||||||||||||||
| Inventories | (96,413) | (212,839) | 24,176 | |||||||||||||||||
| Prepaid and other current assets | 23,689 | (32,044) | 27,292 | |||||||||||||||||
| Other assets | (6,298) | 270 | 424 | |||||||||||||||||
| Accounts payable | (4,236) | 65,316 | 20,797 | |||||||||||||||||
| Accrued expenses | 5,747 | (38,578) | 32,357 | |||||||||||||||||
| Other liabilities | 1,690 | 749 | (12,736) | |||||||||||||||||
| Net cash provided by (used in) operating activities | 279,938 | (65,585) | 358,375 | |||||||||||||||||
| Cash flows from investing activities | ||||||||||||||||||||
| Capital expenditures | (88,772) | (74,041) | (70,020) | |||||||||||||||||
| Proceeds from disposal of facility | — | 3,268 | — | |||||||||||||||||
| Insurance proceeds relating to property, plant and equipment | — | — | 4,800 | |||||||||||||||||
| Proceeds from disposal of property, plant, and equipment | 586 | 1,540 | 176 | |||||||||||||||||
| Proceeds from termination of net investment hedges | 43,384 | — | — | |||||||||||||||||
| Net cash used in investing activities | (44,802) | (69,233) | (65,044) | |||||||||||||||||
| Cash flows from financing activities | ||||||||||||||||||||
| Net borrowings (repayments) on short-term debt | (21,719) | 20,556 | (15,934) | |||||||||||||||||
| Proceeds from Second Amended 2017 Revolver borrowings | 310,500 | 523,400 | 102,000 | |||||||||||||||||
| Repayments of Second Amended 2017 Revolver borrowings | (500,500) | (88,400) | (210,000) | |||||||||||||||||
| Proceeds from Amended 2017 Term Loan | 300,000 | — | — | |||||||||||||||||
| Repayments of 2023 Senior Notes | (300,000) | — | — | |||||||||||||||||
| Repayments of Second Amended 2017 Term Loan | (5,215) | (161,447) | (39,589) | |||||||||||||||||
| Debt issuance costs | (1,121) | (2,952) | — | |||||||||||||||||
| Finance lease obligations and other | 1,110 | 810 | 650 | |||||||||||||||||
| Option proceeds, net | 4,392 | 1,336 | 9,114 | |||||||||||||||||
| Payment of taxes related to net share settlement of equity awards | (6,453) | (9,150) | (5,153) | |||||||||||||||||
| Purchase of treasury stock | (22,907) | (156,366) | — | |||||||||||||||||
| Dividends paid to stockholders | (28,537) | (29,353) | (29,812) | |||||||||||||||||
| Net cash (used in) provided by financing activities | (270,450) | 98,434 | (188,724) | |||||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | (20,509) | (12,936) | 20,222 | |||||||||||||||||
| Net (decrease) increase in cash and cash equivalents | (55,823) | (49,320) | 124,829 | |||||||||||||||||
| Cash and cash equivalents at beginning of year | 402,488 | 451,808 | 326,979 | |||||||||||||||||
| Cash and cash equivalents at end of year | $ | 346,665 | $ | 402,488 | $ | 451,808 | ||||||||||||||
Reconciliations of GAAP to 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 measures “adjusted Net earnings”, “adjusted Diluted EPS”, “adjusted operating earnings”, “adjusted EBITDA”, "adjusted EBITDA per credit agreement", "net debt", "net leverage ratio", “net sales at constant currency”, and "net sales growth rate at constant currency” as applicable, in their analysis of the Company's performance. Adjusted Net earnings and adjusted operating earnings measure, as used by EnerSys in past quarters and years, adjusts Net earnings and operating earnings determined in accordance with GAAP to reflect changes in financial results associated with the Company's restructuring initiatives and other highlighted charges and income items. Adjusted EBITDA is a key performance measure that our management uses to assess our operating performance. Because Adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we use this measure as an overall assessment of our performance, to evaluate the effectiveness of our business strategies and for business planning purposes. We calculate Adjusted EBITDA as net income before interest income, interest expense, other (income) expense net, provision (benefit) for income taxes, depreciation and amortization, further adjusted to exclude restructuring and exit activities, impairment of goodwill, indefinite-lived intangibles and other assets, acquisition activities and those charges and credits that are not directly related to operating unit performance. EBITDA is calculated as net income before interest income, interest expense, other (income) expense net, provision (benefit) for income taxes, depreciation and amortization. We define non-GAAP adjusted EBITDA per credit agreement as net earnings determined in accordance with GAAP for interest, taxes, depreciation and amortization, and certain charges or credits as permitted by our credit agreements, that were recorded during the periods presented. We define non-GAAP net debt as total debt, finance lease obligations and letters of credit, net of all cash and cash equivalents, as defined in the Third Amended Credit Facility on the balance sheet as of the end of the most recent fiscal quarter. We define non-GAAP net leverage ratio as non-GAAP net debt divided by last twelve months non-GAAP adjusted EBITDA per credit agreement. We define non-GAAP free cash flow as net cash provided by or used in operating activities less capital expenditures. Free cash flow is used by investors, financial analysts, rating agencies and management to help evaluate the Company’s ability to generate cash to pursue incremental opportunities aimed toward enhancing shareholder value. We define non-GAAP constant currency net sales as total net sales excluding the effect of foreign exchange rate movements, and we use it to determine the constant currency growth rate on a year-on-year basis. Non-GAAP constant currency revenues are calculated by translating current period revenues using the prior comparative periods’ actual exchange rates, rather than the actual exchange rates in effect during the current period. Constant currency net sales growth rate is calculated by determining the difference between current period non-GAAP constant currency net sales and current period reported net sales divided by prior period as reported net sales. Management believes the presentation of these financial measures 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 and overall business performance; in particular, those charges that the Company incurs as a result of restructuring 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, such as significant legal proceedings, amortization of Alpha and NorthStar related intangible assets and tax valuation allowance changes, including those related to the AHV (Old-Age and Survivors Insurance) Financing (TRAF) in Switzerland. Because these charges are not incurred as a result of ongoing operations, or are incurred as a result of a potential or previous acquisition, they are not as helpful a measure of the performance of our underlying business, particularly in light of their unpredictable nature and are difficult to forecast. Although we exclude the amortization of purchased intangibles from these non-GAAP measures, management believes that it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation.
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%.
EnerSys does not provide a quantitative reconciliation of the company’s projected range for adjusted diluted earnings per share for the fourth quarter of fiscal 2023 to diluted earnings per share, which is the most directly comparable GAAP measure, in reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K. EnerSys' adjusted diluted earnings per share guidance for the fourth quarter of fiscal 2023 excludes certain items, including but not limited to certain non-cash, large and/or unpredictable charges and benefits, charges from restructuring and exit activities, impairment of goodwill and indefinite-lived intangibles, acquisition and disposition activities, legal judgments, settlements, or other matters, and tax positions, that are inherently uncertain and difficult to predict, can be dependent on future events that are less capable of being controlled or reliably predicted by management and are not part of the Company's routine operating activities can be dependent on future events that are less capable of being controlled or reliably predicted by management and are not part of the Company's routine operating activities. Due to the uncertainty of the occurrence or timing of these future excluded items, management cannot accurately forecast many of these items for internal use and therefore cannot create a quantitative adjusted diluted earnings per share for the fourth quarter of fiscal 2023 to diluted earnings per share reconciliation without unreasonable efforts.
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 | Twelve months ended | ||||||||||||||||||||||||||||||||||
| ($ millions) | ($ millions) | ||||||||||||||||||||||||||||||||||
| March 31, 2023 | March 31, 2022 | Growth rate | March 31, 2023 | March 31, 2022 | Growth rate | ||||||||||||||||||||||||||||||
| Energy Systems reported net sales | $ | 458.2 | $ | 410.4 | 11.7 | % | $ | 1,738.1 | $ | 1,536.6 | 13.1 | % | |||||||||||||||||||||||
| Exchange rate effect | 10.2 | 60.1 | |||||||||||||||||||||||||||||||||
| Energy Systems constant currency net sales | 468.4 | 14.1 | 1,798.2 | 17.0 | |||||||||||||||||||||||||||||||
| Motive Power reported net sales | $ | 383.6 | $ | 364.9 | 5.1 | % | $ | 1,451.3 | $ | 1,361.2 | 6.6 | % | |||||||||||||||||||||||
| Exchange rate effect | 9.3 | 69.4 | |||||||||||||||||||||||||||||||||
| Motive Power constant currency net sales | 392.9 | 7.7 | 1,520.7 | 11.7 | |||||||||||||||||||||||||||||||
| Specialty reported net sales | $ | 148.1 | $ | 131.7 | 12.4 | % | $ | 519.1 | $ | 459.5 | 13.0 | % | |||||||||||||||||||||||
| Exchange rate effect | 1.3 | 9.2 | |||||||||||||||||||||||||||||||||
| Specialty constant currency net sales | 149.4 | 13.4 | 528.3 | 15.0 | |||||||||||||||||||||||||||||||
| Total reported net sales | $ | 989.9 | $ | 907.0 | 9.1 | % | $ | 3,708.5 | $ | 3,357.3 | 10.5 | % | |||||||||||||||||||||||
| Exchange rate effect | 20.8 | 138.7 | |||||||||||||||||||||||||||||||||
| Total constant currency net sales | 1,010.7 | 11.4 | 3,847.2 | 14.6 | |||||||||||||||||||||||||||||||
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) | |||||||||||||||||||||||||||||
| March 31, 2023 | |||||||||||||||||||||||||||||
| Energy Systems | Motive Power | Specialty | IRA Tax Credits | Total | |||||||||||||||||||||||||
| Net Sales | $ | 458.2 | $ | 383.6 | $ | 148.1 | $ | — | $ | 989.9 | |||||||||||||||||||
| Operating Earnings | $ | 23.0 | $ | 48.4 | $ | 6.7 | $ | 17.3 | $ | 95.4 | |||||||||||||||||||
| Restructuring and other exit charges | 0.3 | 1.6 | 2.1 | — | 4.0 | ||||||||||||||||||||||||
| Impairment of indefinite-lived intangibles | 0.1 | — | 0.4 | — | 0.5 | ||||||||||||||||||||||||
| Amortization of identified intangible assets from recent acquisitions | 5.7 | — | 0.5 | — | 6.2 | ||||||||||||||||||||||||
| Other | 0.5 | 0.4 | 0.1 | — | 1.0 | ||||||||||||||||||||||||
| Adjusted Operating Earnings | $ | 29.6 | $ | 50.4 | $ | 9.8 | $ | 17.3 | $ | 107.1 | |||||||||||||||||||
| Quarter ended | |||||||||||||||||||||||
| ($ millions) | |||||||||||||||||||||||
| March 31, 2022 | |||||||||||||||||||||||
| Energy Systems | Motive Power | Specialty | Total | ||||||||||||||||||||
| Net Sales | $ | 410.4 | $ | 364.9 | $ | 131.7 | $ | 907.0 | |||||||||||||||
| Operating Earnings | $ | 4.7 | $ | 29.8 | $ | 10.0 | $ | 44.5 | |||||||||||||||
| Inventory adjustment relating to exit activities | 0.2 | 1.4 | — | 1.6 | |||||||||||||||||||
| Restructuring and other exit charges | 1.4 | 4.2 | — | 5.6 | |||||||||||||||||||
| Impairment of indefinite-lived intangibles | 0.5 | 0.7 | — | 1.2 | |||||||||||||||||||
| Loss on assets held for sale | — | 3.0 | — | 3.0 | |||||||||||||||||||
| Amortization of identified intangible assets from recent acquisitions | 5.8 | — | 0.5 | 6.3 | |||||||||||||||||||
| Other | 3.3 | 1.0 | 0.3 | 4.6 | |||||||||||||||||||
| Adjusted Operating Earnings | $ | 15.9 | $ | 40.1 | $ | 10.8 | $ | 66.8 | |||||||||||||||
| Increase (Decrease) as a % from prior year quarter | Energy Systems | Motive Power | Specialty | Total | |||||||||||||||||||
| Net Sales | 11.7 | % | 5.1 | % | 12.4 | % | 9.1 | % | |||||||||||||||
| Operating Earnings | NM | 62.4 | (32.9) | NM | |||||||||||||||||||
| Adjusted Operating Earnings | 86.9 | 25.6 | (9.2) | 60.5 | |||||||||||||||||||
NM = Not Meaningful
| Twelve months ended | |||||||||||||||||||||||||||||
| ($ millions) | |||||||||||||||||||||||||||||
| March 31, 2023 | |||||||||||||||||||||||||||||
| Energy Systems | Motive Power | Specialty | IRA Tax Credits | Total | |||||||||||||||||||||||||
| Net Sales | $ | 1,738.1 | $ | 1,451.3 | $ | 519.1 | $ | — | $ | 3,708.5 | |||||||||||||||||||
| Operating Earnings | $ | 60.8 | $ | 165.2 | $ | 35.0 | $ | 17.3 | $ | 278.3 | |||||||||||||||||||
| Inventory adjustment relating to exit activities | (0.2) | 0.8 | — | — | 0.6 | ||||||||||||||||||||||||
| Restructuring and other exit charges | 1.5 | 12.8 | 2.1 | — | 16.4 | ||||||||||||||||||||||||
| Impairment of indefinite-lived intangibles | 0.1 | — | 0.4 | — | 0.5 | ||||||||||||||||||||||||
| Loss on assets held for sale | — | — | — | — | — | ||||||||||||||||||||||||
| Amortization of identified intangible assets from recent acquisitions | 23.4 | — | 1.7 | — | 25.1 | ||||||||||||||||||||||||
| Other | 0.6 | 0.6 | 0.1 | — | 1.3 | ||||||||||||||||||||||||
| Acquisition activity expense | — | — | — | — | — | ||||||||||||||||||||||||
| Adjusted Operating Earnings | $ | 86.2 | $ | 179.4 | $ | 39.3 | $ | 17.3 | $ | 322.2 | |||||||||||||||||||
| Twelve months ended | |||||||||||||||||||||||
| ($ millions) | |||||||||||||||||||||||
| March 31, 2022 | |||||||||||||||||||||||
| Energy Systems | Motive Power | Specialty | Total | ||||||||||||||||||||
| Net Sales | $ | 1,536.6 | $ | 1,361.2 | $ | 459.5 | $ | 3,357.3 | |||||||||||||||
| Operating Earnings | $ | 15.1 | $ | 146.5 | $ | 44.6 | $ | 206.2 | |||||||||||||||
| Inventory adjustment relating to exit activities | 0.2 | 2.4 | — | 2.6 | |||||||||||||||||||
| Restructuring and other exit charges | 2.8 | 17.1 | (1.1) | 18.8 | |||||||||||||||||||
| Impairment of indefinite-lived intangibles | 0.5 | 0.7 | — | 1.2 | |||||||||||||||||||
| Loss on assets held for sale | — | 3.0 | — | 3.0 | |||||||||||||||||||
| Amortization of identified intangible assets from recent acquisitions | 23.6 | — | 1.8 | 25.4 | |||||||||||||||||||
| Other | 5.1 | 1.0 | 0.3 | 6.4 | |||||||||||||||||||
| Adjusted Operating Earnings | $ | 47.3 | $ | 170.7 | $ | 45.6 | $ | 263.6 | |||||||||||||||
| Increase (Decrease) as a % over prior year | Energy Systems | Motive Power | Specialty | Total | |||||||||||||||||||
| Net Sales | 13.1 | % | 6.6 | % | 13.0 | % | 10.5 | % | |||||||||||||||
| Operating Earnings | NM | 12.6 | (21.5) | 35.0 | |||||||||||||||||||
| Adjusted Operating Earnings | 82.6 | 5.1 | (13.7) | 15.7 | |||||||||||||||||||
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 | Twelve months ended | ||||||||||||||||||||||
| ($ millions) | ($ millions) | ||||||||||||||||||||||
| March 31, 2023 | March 31, 2022 | March 31, 2023 | March 31, 2022 | ||||||||||||||||||||
| Net Earnings | $ | 65.9 | $ | 28.1 | $ | 175.8 | $ | 143.9 | |||||||||||||||
| Depreciation | 15.3 | 15.3 | 60.4 | 62.6 | |||||||||||||||||||
| Amortization | 6.9 | 8.2 | 30.8 | 33.2 | |||||||||||||||||||
| Interest | 15.0 | 9.4 | 59.5 | 37.8 | |||||||||||||||||||
| Income Taxes | 9.8 | 10.8 | 34.8 | 30.0 | |||||||||||||||||||
| EBITDA | 112.9 | 71.8 | 361.3 | 307.5 | |||||||||||||||||||
Non-GAAP adjustments | 5.3 | 16.0 | 26.2 | 32.0 | |||||||||||||||||||
| Adjusted EBITDA | $ | 118.2 | $ | 87.8 | $ | 387.5 | $ | 339.5 | |||||||||||||||
The following table provides the non-GAAP adjustments shown in the reconciliation above:
| Quarter ended | Twelve months ended | ||||||||||||||||||||||
| ($ millions) | ($ millions) | ||||||||||||||||||||||
| March 31, 2023 | March 31, 2022 | March 31, 2023 | March 31, 2022 | ||||||||||||||||||||
| Inventory adjustment relating to exit activities | $ | 0.0 | $ | 1.6 | $ | 0.6 | $ | 2.6 | |||||||||||||||
| Restructuring and other exit charges | 4.0 | 5.6 | 16.4 | 18.8 | |||||||||||||||||||
| Impairment of indefinite-lived intangibles | 0.5 | 1.2 | 0.5 | 1.2 | |||||||||||||||||||
| Loss on assets held for sale | — | 3.0 | — | 3.0 | |||||||||||||||||||
| Other | 0.7 | 4.6 | 2.2 | 6.4 | |||||||||||||||||||
| Remeasurement of monetary assets included in other (income) expense relating to exit from Russia operations | — | — | 4.5 | — | |||||||||||||||||||
| Asset Securitization Transaction Fees | 0.1 | — | 0.6 | — | |||||||||||||||||||
| Cost of funding to terminate net investment hedges | — | — | 1.4 | — | |||||||||||||||||||
Non-GAAP adjustments | $ | 5.3 | $ | 16.0 | $ | 26.2 | $ | 32.0 | |||||||||||||||
The table below presents a reconciliation of Operating Cash Flow to Free Cash Flow:
| Fiscal year ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | ||||||||||||||||||
| Net cash provided by (used in) operating activities | $ | 279.9 | $ | (65.6) | $ | 358.4 | ||||||||||||||
| Less Capital Expenditures | (88.8) | (74.0) | (70.0) | |||||||||||||||||
| Free Cash Flow | $ | 191.1 | $ | (139.6) | $ | 288.4 | ||||||||||||||
The following table provides a reconciliation of net earnings to EBITDA (non-GAAP) and adjusted EBITDA (non-GAAP) per credit agreement for March 31, 2023 and March 31, 2022, in connection with the Third Amended Credit Facility:
| Last twelve months | ||||||||||||||
| March 31, 2023 | March 31, 2022 | |||||||||||||
| (in millions, except ratios) | ||||||||||||||
| Net earnings as reported | $ | 175.8 | $ | 143.9 | ||||||||||
| Add back: | ||||||||||||||
| Depreciation and amortization | 91.2 | 95.9 | ||||||||||||
| Interest expense | 59.5 | 37.8 | ||||||||||||
| Income tax expense | 34.8 | 30.0 | ||||||||||||
| EBITDA (non GAAP) | $ | 361.3 | $ | 307.6 | ||||||||||
Adjustments per credit agreement definitions(1) | 51.7 | 51.5 | ||||||||||||
Adjusted EBITDA (non-GAAP) per credit agreement(1) | $ | 413.0 | $ | 359.1 | ||||||||||
Total net debt(2) | $ | 736.0 | $ | 905.9 | ||||||||||
| Leverage ratios: | ||||||||||||||
| Total net debt/credit adjusted EBITDA ratio | 1.8 X | 2.5 X | ||||||||||||
(1)The $51.7 million adjustment to EBITDA in fiscal 2023 primarily related to $26.4 million of non-cash stock compensation, $22.4 million of restructuring and other exit charges, impairment of indefinite-lived intangibles of $0.5 million, and $1.4 million for swap termination fees. The $51.5 million adjustment to EBITDA in fiscal 2022 primarily related to $24.3 million of non-cash stock compensation, $26.0 million of restructuring and other exit charges, indefinite-lived intangibles of $1.2 million.
(2)Debt includes finance lease obligations and letters of credit and is net of all U.S. cash and cash equivalents and foreign cash and investments, as defined in the Fourth Amended Credit Facility. In fiscal 2023, the amounts deducted in the calculation of net debt were U.S. cash and cash equivalents and foreign cash investments of $347.0 million, and in fiscal 2022, were $402.5 million.
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) | ||||||||||||||
| March 31, 2023 | March 31, 2022 | |||||||||||||
| Net Earnings reconciliation | ||||||||||||||
| As reported Net Earnings | $ | 65.9 | $ | 28.1 | ||||||||||
Non-GAAP adjustments: | ||||||||||||||
| Inventory adjustment relating to exit activities | — | (1) | 1.6 | (1) | ||||||||||
| Restructuring and other exit charges | 4.0 | (2) | 5.6 | (2) | ||||||||||
| Impairment of indefinite-lived intangibles | 0.5 | (3) | 1.2 | (3) | ||||||||||
| Loss on assets held for sale | — | (4) | 3.0 | (4) | ||||||||||
| Amortization of identified intangible assets from recent acquisitions | 6.2 | (5) | 6.3 | (5) | ||||||||||
| Asset Securitization Transaction Fees | 0.1 | — | ||||||||||||
| Other | 0.7 | 4.6 | ||||||||||||
| Income tax effect of above non-GAAP adjustments | (2.0) | (0.3) | ||||||||||||
| Non-GAAP adjusted Net Earnings | $ | 75.4 | $ | 50.1 | ||||||||||
| Outstanding shares used in per share calculations | ||||||||||||||
Basic | 40,873,977 | 41,243,629 | ||||||||||||
Diluted | 41,505,060 | 41,843,270 | ||||||||||||
| Non-GAAP adjusted Net Earnings per share: | ||||||||||||||
Basic | $ | 1.85 | $ | 1.21 | ||||||||||
Diluted | $ | 1.82 | $ | 1.20 | ||||||||||
| Reported Net Earnings (Loss) per share: | ||||||||||||||
Basic | $ | 1.61 | $ | 0.68 | ||||||||||
Diluted | $ | 1.59 | $ | 0.67 | ||||||||||
| 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) | ||||||||||||||
| March 31, 2023 | March 31, 2022 | |||||||||||||
| Pre-tax | Pre-tax | |||||||||||||
| (1) Inventory adjustment relating to exit activities - Energy Systems | $ | — | $ | 0.2 | ||||||||||
| (1) Inventory adjustment relating to exit activities - Motive Power | — | 1.4 | ||||||||||||
| (2) Restructuring and other exit charges - Energy Systems | 0.3 | 1.4 | ||||||||||||
| (2) Restructuring and other exit charges - Motive Power | 1.6 | 4.2 | ||||||||||||
| (2) Restructuring and other exit charges - Specialty | 2.1 | — | ||||||||||||
| (3) Impairment of indefinite-lived intangibles - Energy Systems | 0.1 | 0.5 | ||||||||||||
| (3) Impairment of indefinite-lived intangibles - Motive | — | 0.7 | ||||||||||||
| (3) Impairment of indefinite-lived intangibles - Specialty | 0.4 | — | ||||||||||||
| (4) Loss on assets held for sale - Motive | — | 3.0 | ||||||||||||
| (5) Amortization of identified intangible assets from recent acquisitions - Energy Systems | 5.7 | 5.8 | ||||||||||||
| (5) Amortization of identified intangible assets from recent acquisitions - Specialty | 0.5 | 0.5 | ||||||||||||
| Total Non-GAAP adjustments | $ | 10.7 | $ | 17.7 | ||||||||||
| Twelve months ended | ||||||||||||||
| (in millions, except share and per share amounts) | ||||||||||||||
| March 31, 2023 | March 31, 2022 | |||||||||||||
| Net Earnings reconciliation | ||||||||||||||
| As reported Net Earnings | $ | 175.8 | $ | 143.9 | ||||||||||
Non-GAAP adjustments: | ||||||||||||||
| Inventory adjustment relating to exit activities | 0.6 | (1) | 2.6 | (1) | ||||||||||
| Restructuring and other exit charges | 16.4 | (2) | 18.8 | (2) | ||||||||||
| Impairment of indefinite-lived intangibles | 0.5 | (3) | 1.2 | (3) | ||||||||||
| Loss on assets held for sale | — | (4) | 3.0 | (4) | ||||||||||
| Amortization of identified intangible assets from recent acquisitions | 25.1 | (5) | 25.4 | (5) | ||||||||||
| Remeasurement of monetary assets included in other (income) expense relating to exit from Russia operations | 4.5 | — | ||||||||||||
| Asset Securitization Transaction Fees | 0.6 | |||||||||||||
| Cost of funding to terminate net investment hedges | 1.4 | — | ||||||||||||
| Financing fees related to debt modification | 1.2 | — | ||||||||||||
| Other | 2.2 | 6.4 | ||||||||||||
| Income tax effect of above non-GAAP adjustments | (7.5) | (10.3) | ||||||||||||
| Non-GAAP adjusted Net Earnings | $ | 220.8 | $ | 191.0 | ||||||||||
| Outstanding shares used in per share calculations | ||||||||||||||
Basic | 40,809,235 | 42,106,337 | ||||||||||||
Diluted | 41,326,755 | 42,783,373 | ||||||||||||
| Non-GAAP adjusted Net Earnings per share: | ||||||||||||||
Basic | $ | 5.41 | $ | 4.54 | ||||||||||
Diluted | $ | 5.34 | $ | 4.47 | ||||||||||
| Reported Net Earnings (Loss) per share: | ||||||||||||||
Basic | $ | 4.31 | $ | 3.42 | ||||||||||
Diluted | $ | 4.25 | $ | 3.36 | ||||||||||
| Dividends per common share | $ | 0.70 | $ | 0.70 | ||||||||||
The following table provides the line of business allocation of the non-GAAP adjustments shown in the reconciliation above:
| Twelve months ended | ||||||||||||||
| ($ millions) | ||||||||||||||
| March 31, 2023 | March 31, 2022 | |||||||||||||
| Pre-tax | Pre-tax | |||||||||||||
| (1) Inventory adjustment relating to exit activities - Energy Systems | $ | (0.2) | $ | 0.2 | ||||||||||
| (1) Inventory adjustment relating to exit activities - Motive Power | 0.8 | 2.4 | ||||||||||||
| (2) Restructuring and other exit charges - Energy Systems | 1.5 | 2.8 | ||||||||||||
| (2) Restructuring and other exit charges - Motive Power | 12.8 | 17.1 | ||||||||||||
| (2) Restructuring and other exit charges - Specialty | 2.1 | (1.1) | ||||||||||||
| (3) Impairment of indefinite-lived intangibles - Energy Systems | 0.1 | 0.5 | ||||||||||||
| (3) Impairment of indefinite-lived intangibles - Specialty | 0.4 | 0.7 | ||||||||||||
| (4) Loss on assets held for sale - Motive | — | 3.0 | ||||||||||||
| (5) Amortization of identified intangible assets from recent acquisitions - Energy Systems | 23.4 | 23.6 | ||||||||||||
| (5) Amortization of identified intangible assets from recent acquisitions - Specialty | 1.7 | 1.8 | ||||||||||||
| Total Non-GAAP adjustments | $ | 42.6 | $ | 51.0 | ||||||||||
Exhibit 99.2
EnerSys Announces Quarterly Dividend
Reading, PA, USA, May 24, 2023 – EnerSys (NYSE: ENS), the global leader in stored energy solutions for industrial applications, announced today that its Board of Directors has declared a quarterly cash dividend of $0.175 per share of common stock payable on June 30, 2023, to holders of record as of June 16, 2023.
For more information, contact Lisa M. Hartman, Vice President, Investor Relations Tel: 610-236-4040 or by emailing investorrelations@enersys.com; Website: www.enersys.com.
EDITOR'S NOTE: EnerSys, the global leader in stored energy solutions for industrial applications, manufactures and distributes energy systems solutions and motive power batteries, specialty batteries, battery chargers, power equipment, battery accessories and outdoor equipment enclosure solutions to customers worldwide. Energy Systems, which combine enclosures, power conversion, power distribution and energy storage, are used in the telecommunication, broadband and utility industries, uninterruptible power supplies, and numerous applications requiring stored energy solutions. Motive power batteries and chargers are utilized in electric forklift trucks and other industrial electric powered vehicles. Specialty batteries are used in aerospace and defense applications, large over-the-road trucks, premium automotive, medical and security systems applications. EnerSys also provides aftermarket and customer support services to its customers in over 100 countries through its sales and manufacturing locations around the world. With the NorthStar acquisition, EnerSys has solidified its position as the market leader for premium Thin Plate Pure Lead batteries which are sold across all three lines of business.
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, intention to 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 EnerSys expects or anticipates will occur in the future, including statements relating to sales growth, earnings or earnings per share growth, its intention to pay quarterly cash dividends and return capital to stockholders, execution of its stock repurchase program, and market share, as well as statements expressing optimism or pessimism about future operating results or benefits from either its cash dividend or its stock repurchase programs, 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. 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 7. Management's Discussion and Analysis of Financial Condition and Results of Operations,” and “Forward-Looking Statements,” set forth in EnerSys’ Annual Report on Form 10-K for the fiscal year ended March 31, 2023. The foregoing factors, among others, could cause actual results to differ materially from those described in these forward-looking statements. No undue reliance should be placed on any forward-looking statements.