READING, Pa., Aug. 5 /PRNewswire-FirstCall/ -- EnerSys (NYSE: ENS) the
world's largest manufacturer, marketer and distributor of industrial
batteries, today announced results for its first fiscal quarter of 2010, which
ended on June 28, 2009.
Net earnings for the first fiscal quarter of 2010 were $8.4 million or
$0.17 per diluted share, including the unfavorable highlighted charges of
$0.06 per share impact from the $2.5 million, $3.5 million pre-tax, charge for
our restructuring plans and the $0.3 million, $0.4 million pre-tax, expense
related to potential acquisition activities.
This compares to diluted net earnings per share of $0.50 for the first
fiscal quarter of 2009, which included favorable highlighted credits of $0.03
per share or $1.3 million, ($0.1) million pre-tax.
Adjusted net earnings for the first fiscal quarter of 2010, on a non-GAAP
basis, were $0.23 per diluted share. This compares to our previous guidance
of $0.13 to $0.17 per diluted share and to the prior year first quarter of
$0.47 per diluted share on an adjusted and restated non-GAAP basis. These
earnings were achieved despite the anticipated decline in revenue, which was
partially offset by the positive effects of our cost reduction activities and
further reductions in commodity costs, net of pricing. Please refer to the
section included herein under the heading "Reconciliation of Non-GAAP
Financial Measures" for a discussion of the Company's use of non-GAAP adjusted
financial information.
Net sales for the first fiscal quarter of 2010 were $340.3 million, a
decrease of 42.5% from the prior year first fiscal quarter net sales of $592.1
million and a 13.5% sequential quarterly decrease from the fourth fiscal
quarter of 2009's net sales of $393.2 million. The 42.5% decline was
attributed to a 32% decline in organic volume, 6% from weaker foreign
currencies, primarily the euro, and 5% from reduced pricing related to lower
commodity costs. The decline in organic volume was a direct result of reduced
end-user demand caused by the global economic recession.
The Company's operating results for its reporting segments for the first
fiscal quarters of 2010 and 2009 are as follows (in millions):
Reserve Power Motive Power Consolidated
------------- ------------ ------------
Three months ended June 28, 2009:
Net sales $182.8 $157.5 $340.3
====== ====== ======
Operating earnings before
highlighted items $20.8 $2.6 $23.4
Restructuring charges (1.0) (2.5) (3.5)
Acquisition activity expense (0.4) - (0.4)
---- ---- ----
Total operating earnings $19.4 $0.1 $19.5
===== ==== =====
Three months ended June 29, 2008:
Net sales $258.8 $333.3 $592.1
====== ====== ======
Operating earnings before
highlighted items $21.0 $21.7 $42.7
Gain on sale of manufacturing
facility 10.9 - 10.9
Legal proceedings charge (3.4) - (3.4)
Restructuring charges (1.3) (0.9) (2.2)
---- ---- ----
Total operating earnings $27.2 $20.8 $48.0
===== ===== =====
"As anticipated, we experienced a sequential quarterly decline in sales,
which is a reflection of current economic conditions. However, as a result of
our continued strong execution of our business plan, including our cost
reduction efforts, we reported adjusted earnings per diluted share of $0.23
for our first fiscal quarter, which exceeded our previous earnings guidance of
$0.13 to $0.17 per share," said John D. Craig, chairman, president and chief
executive officer of EnerSys. "There are several positive developments in our
business. Recently, we have experienced stable incoming order rates, which
lead us to believe that we may have reached the bottom of the declining order
patterns we had been experiencing. Also, we ended our first quarter with cash
and short term investments of $218 million, an increase of $55 million over
the previous quarter end. Finally, our restructuring programs remain on
schedule to achieve the targeted savings of $33 million per year when fully
implemented."
Craig added, "Our second quarter guidance for non-GAAP adjusted net
earnings per diluted share will be between $0.25 and $0.29, which excludes an
expected charge of $0.06 per diluted share from our ongoing restructuring and
acquisition activities."
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 credits.
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 first fiscal quarters ended June 28, 2009 and June
29, 2008. 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
--------------------
June 28, 2009 June 29, 2008
------------- -------------
(In millions, except share
and per share data)
Net earnings reconciliation (Restated)(1)
As reported net earnings $8.4 $25.2
Non-GAAP adjustments (net of tax):
Restructuring charges 2.5 (2) 1.4 (2)
Acquisition activity expense 0.3 (3) -
Gain on sale of
manufacturing facility - (8.5) (4)
Legal proceedings charge - 2.2 (5)
Refinancing related charges - 3.4 (6)
Secondary offering fees - 0.2 (7)
--- ---
Non-GAAP adjusted net earnings $11.2 $23.9
===== =====
Outstanding shares used in per share
calculations:
Basic 47,936,401 49,329,724
========== ==========
Diluted 48,454,695 50,507,516
========== ==========
Non-GAAP adjusted net earnings per share:
Basic $0.23 $0.48
===== =====
Diluted $0.23 $0.47
===== =====
Reported net earnings per share:
Basic $0.18 $0.51
===== =====
Diluted $0.17 $0.50
===== =====
(1) As more fully explained in our Quarterly Report on Form 10-Q, filed
today, we adopted the new accounting for convertible notes as required
by FSP APB14-1. The new accounting pronouncement resulted in a
decrease in net earnings related to non-cash interest of approximately
$0.9 million ($1.3 million pre-tax) in our first fiscal quarter of
2010 results and caused a restatement of our first fiscal quarter of
2009 results by a comparable reduction in net earnings of $0.3 million
($0.5 million pre-tax).
(2) Resulting from pretax charges of approximately $3.5 million in the
first fiscal quarter of 2010 and $2.2 million in the first fiscal
quarter of 2009, primarily for severance costs related to staff
reductions.
(3) Resulting from pretax charge of approximately $0.4 million in the
first fiscal quarter of 2010 for acquisition activity expense.
(4) Resulting from pretax gain of approximately $10.9 million, net of fees
and expenses, from the sale of the Manchester, England manufacturing
facility, recorded in the first fiscal quarter of 2009.
(5) 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.
(6) Resulting from pretax charges of approximately $5.2 million in the
first fiscal quarter of 2009, related to the refinancing of amounts
borrowed under the Company's prior senior secured credit facility.
These charges are comprised of an approximate $4.0 million write-off
of deferred financing fees and $1.2 million of losses incurred in
terminating certain interest rate swap agreements.
(7) Resulting from pretax charge of approximately $0.3 million for
professional fees related to secondary stock offerings which occurred
in the first fiscal quarter of 2009.
EnerSys
Summary of Earnings
(In millions, except share and per share data)
Fiscal quarter ended
--------------------
(Unaudited) June 28, June 29,
2009 2008
---- ----
(Restated) (1)
Net sales $340.3 $592.1
Gross profit 77.5 112.6
Operating expenses 54.4 69.9
Gain on sale of manufacturing facility - (10.9)
Restructuring charges 3.5 2.2
Legal proceedings charge - 3.4
Operating earnings 19.5 48.0
Earnings before income taxes 12.3 33.6
Net earnings $8.4 $25.2
==== =====
Net earnings per common share:
Basic $0.18 $0.51
===== =====
Diluted $0.17 $0.50
===== =====
Weighted average shares outstanding:
Basic 47,936,401 49,329,724
========== ==========
Diluted 48,454,695 50,507,516
========== ==========
EnerSys will host a conference call to discuss the Company's first fiscal
quarter 2010 financial results and provide an overview of the business. The
call will conclude with a question and answer session.
The call, scheduled for Thursday, August 6, 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, August 6, 2009
Time: 9:00 a.m. Eastern Time
Via Internet: http://www.enersys.com
Domestic Dial-In Number: 800-591-6930
International Dial-In Number: 617-614-4908
Passcode: 51097073
A replay of the conference call will be available from 11:00 a.m. on
Thursday, August 6, 2009 through midnight on September 6, 2009. The
replay information is:
Via Internet: http://www.enersys.com
Domestic Replay Number: 888-286-8010
International Replay Number: 617-801-6888
Passcode: 44821048
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 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. 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 EnerSys' Quarterly Report on Form 10-Q for the
fiscal quarter ended June 28, 2009. No undue reliance should be placed on any
forward-looking statements.
SOURCE EnerSys
CONTACT:
Richard Zuidema
Executive Vice President, EnerSys
+1-800-538-3627