Exhibit 99.1 PRESS RELEASE, DATED FEBRUARY 10, 2021, OF ENERSYS REGARDING FINANCIAL
RESULTS FOR THE THIRD QUARTER FISCAL 2021
 | ||
EnerSys Reports Third Quarter Fiscal 2021 Results
Reading, PA, USA, February 10, 2021 – EnerSys (NYSE: ENS), the global leader in stored energy solutions for industrial applications, announced today results for its third quarter of fiscal 2021, which ended on January 3, 2021.
| Third Quarter FY 21 Highlights | |||||
•Net sales of $751M up 6% sequentially •Gross Profit Margins steady at 25% •Operating Expenses remain flexed •YTD Operating Cash Flow $272M | •Operating earnings up YOY •Richmond fire claim settled •Credit facility leverage ratio remains near 2.0x •TPPL High Speed line in production | ||||
| Key Results from Operations by Segments ($ in millions) | |||||||||||||||||||||||
| Q3 FY21 | Q3 FY20 | % Change | |||||||||||||||||||||
| Energy Systems | |||||||||||||||||||||||
| Net Sales | $ | 337.2 | $ | 345.5 | (2.4) | % | |||||||||||||||||
| Operating Earnings | 18.5 | 16.3 | 13.0 | ||||||||||||||||||||
| Adjusted Operating Earnings * | 24.8 | 21.8 | 13.8 | ||||||||||||||||||||
| Motive Power | |||||||||||||||||||||||
| Net Sales | 304.4 | 315.5 | (3.5) | ||||||||||||||||||||
| Operating Earnings | 40.2 | 30.8 | 30.3 | ||||||||||||||||||||
| Adjusted Operating Earnings * | 40.5 | 31.5 | 28.6 | ||||||||||||||||||||
| Specialty | |||||||||||||||||||||||
| Net Sales | 109.5 | 102.7 | 6.6 | ||||||||||||||||||||
| Operating Earnings | 12.6 | 9.2 | 37.5 | ||||||||||||||||||||
| Adjusted Operating Earnings * | 13.1 | 10.4 | 25.6 | ||||||||||||||||||||
* This is a non-GAAP financial measure. See “Reconciliation of Non-GAAP Financial Measures” for more information.
| Message from the CEO | ||||||||||||||
I remain humbled by our employees’ ability to deliver in these challenging times. We have continued to make excellent progress on our strategic initiatives and demand remained strong in our third quarter. Our as-adjusted $1.27 third quarter EPS benefited approximately $0.10 from our claim related to the September 2019 Richmond, KY fire while foreign currency losses created $0.03 in headwinds. Excluding the settlement and FX, we achieved the mid-point of our guidance provided in November. We are pleased that Richmond is increasing production beyond pre-fire levels to meet increased demand and, so far in the new calendar year, motive power and broadband orders are improving further while telecom and transportation orders remain strong. We entered our fourth quarter capacity constrained in several key factories as we manage through COVID related constraints, including staffing and suppliers meeting our higher demand. Although we are likely to remain capacity constrained in the near term, we expect to achieve between $1.25 and $1.31 per share in as-adjusted Q4 earnings as production output improves.
David M. Shaffer, President and Chief Executive Officer, EnerSys
Net earnings attributable to EnerSys stockholders (“Net earnings”) for the third quarter of fiscal 2021 was $38.6 million, or $0.89 per diluted share, which included an unfavorable highlighted net of tax impact of $16.4 million, or $0.38 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 third quarter of fiscal 2020 were $27.3 million, or $0.64 per diluted share, which included an unfavorable highlighted net of tax impact of $17.2 million, or $0.40 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 third quarter of fiscal 2021, on a non-GAAP basis, were $1.27, which exceeded the guidance of $1.17 to $1.23 per diluted share for the third quarter given by the Company on November 11, 2020. These earnings compare to the prior year third quarter adjusted Net earnings of $1.04 per diluted share. 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, which includes tables reconciling GAAP and non-GAAP adjusted financial measures for the quarters ended January 3, 2021 and December 29, 2019.
The Company announced on November 11, 2020, its plan to substantially close its facility in Hagen, Germany, which produces flooded motive power batteries for forklifts. The Company currently estimates that the total charges approximate $70.0 million, the majority of which are expected to be recorded by the end of calendar 2021. Cash charges for employee severance related payments, cleanup related to the facility, contractual releases and legal expenses are estimated to be $50.0 million and non-cash charges from inventory and equipment write-offs are estimated to be $20.0 million. These actions will result in the reduction of approximately 200 employees. During the third quarter of fiscal 2021, the Company recorded charges relating to severance of $6.2 million and $5.5 million primarily relating to fixed asset write-offs.
During the current quarter, the Company settled its claims with its insurance carrier relating to the fire that broke out in the battery formation area of the Company's Richmond, Kentucky motive power production facility in fiscal 2020. The total recovery, for both property and business interruption, was $46.1 million, of which $40.6 million was received through January 3, 2021. The balance of $3.2 million relating to the property claim and $2.3 million relating to business interruption was received on January 4, 2021. The final settlement of insurance recoveries and finalization of costs related to the replacement of property, plant and equipment, resulted in a net gain of $4.4 million, which was recorded in the current quarter to operating expenses in the consolidated condensed income statement included in the Quarterly Report on Form 10-Q for the period ended January 3, 2021.
Net sales for the third quarter of fiscal 2021 were $751.1 million, a decrease of 2% from the prior year third quarter net sales of $763.7 million and increased 6% sequentially from the second quarter of fiscal 2021 net sales of $708.4 million. The decrease from the prior year quarter was the result of a 3% decrease in organic volume resulting from the pandemic, partially offset by a 1% increase in foreign currency translation impact. The 6% sequential increase was due to organic volume improvement.
On July 6, 2020, the Company announced that it was changing its reportable segments, beginning with its first quarter of fiscal 2021, from being based on geographic regions to lines of business. The new reportable segments are Energy Systems (which includes energy solutions related to telecommunications systems, uninterruptible power systems, and other power applications), Motive Power (which includes power for electric industrial forklifts used in manufacturing, warehousing and other material handling applications, as well as mining equipment, diesel locomotive starting and other rail equipment) and Specialty (which includes energy solutions for transportation, satellites, military aircraft, submarines, ships and other tactical vehicles). Prior year quarter and year to date financial information has been restated to reflect the new reportable segments.
The Company’s operating results for its business segments for the third quarters of fiscal 2021 and 2020 are as follows:
| Quarter ended | |||||||||||||||||||||||
| ($ millions) | |||||||||||||||||||||||
| January 3, 2021 | |||||||||||||||||||||||
| Energy Systems | Motive Power | Specialty | Total | ||||||||||||||||||||
| Net Sales | $ | 337.2 | $ | 304.4 | $ | 109.5 | $ | 751.1 | |||||||||||||||
| Operating Earnings | $ | 17.7 | $ | 25.8 | $ | 12.6 | $ | 56.1 | |||||||||||||||
| Restructuring and other exit charges | 0.8 | 14.4 | — | 15.2 | |||||||||||||||||||
| Amortization of identified intangible assets from recent acquisitions | 6.3 | — | 0.5 | 6.8 | |||||||||||||||||||
| Other | — | 0.3 | — | 0.3 | |||||||||||||||||||
| Adjusted Operating Earnings | $ | 24.8 | $ | 40.5 | $ | 13.1 | $ | 78.4 | |||||||||||||||
| Quarter ended | |||||||||||||||||||||||
| ($ millions) | |||||||||||||||||||||||
| December 29, 2019 | |||||||||||||||||||||||
| Energy Systems | Motive Power | Specialty | Total | ||||||||||||||||||||
| Net Sales | $ | 345.5 | $ | 315.5 | $ | 102.7 | $ | 763.7 | |||||||||||||||
| Operating Earnings | $ | 10.1 | $ | 30.3 | $ | 2.7 | $ | 43.1 | |||||||||||||||
| Inventory step up to fair value relating to recent acquisitions | 1.6 | — | 2.2 | 3.8 | |||||||||||||||||||
| Restructuring and other exit charges | 4.6 | 0.5 | 4.3 | 9.4 | |||||||||||||||||||
| Amortization of identified intangible assets from recent acquisitions | 6.8 | — | 1.1 | 7.9 | |||||||||||||||||||
| ERP system implementation and other | (1.6) | 0.7 | — | (0.9) | |||||||||||||||||||
| Acquisition activity expense | 0.3 | — | 0.1 | 0.4 | |||||||||||||||||||
| Adjusted Operating Earnings | $ | 21.8 | $ | 31.5 | $ | 10.4 | $ | 63.7 | |||||||||||||||
Net earnings for the nine months of fiscal 2021 was $109.5 million, or $2.54 per diluted share, which included an unfavorable highlighted net of tax impact of $28.1 million, or $0.65 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 nine months of fiscal 2020 were $138.6 million, or $3.23 per diluted share, which included an unfavorable highlighted net of tax impact of $14.5 million, or $0.34 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 nine months of fiscal 2021, on a non-GAAP basis, were $3.19. This compares to the prior year nine months adjusted Net earnings of $3.57 per diluted share. 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 nine months of fiscal 2021 were $2,164.4 million, a decrease of 6% from the prior year nine months net sales of $2,306.0 million. The decrease from the prior year nine months was the result of an 8% decrease in organic volume resulting from the pandemic and a 1% decrease in pricing, partially offset by a 3% increase from the NorthStar acquisition.
The Company’s operating results for its business segments for the nine months of fiscal 2021 and 2020 are as follows:
| Nine months ended | |||||||||||||||||||||||
| ($ millions) | |||||||||||||||||||||||
| January 3, 2021 | |||||||||||||||||||||||
| Energy Systems | Motive Power | Specialty | Total | ||||||||||||||||||||
| Net Sales | $ | 1,031.4 | $ | 831.0 | $ | 302.0 | $ | 2,164.4 | |||||||||||||||
| Operating Earnings | $ | 60.7 | $ | 74.8 | $ | 29.2 | $ | 164.7 | |||||||||||||||
| Restructuring and other exit charges | 2.6 | 16.9 | 0.2 | 19.7 | |||||||||||||||||||
| Amortization of identified intangible assets from recent acquisitions | 18.0 | — | 1.3 | 19.3 | |||||||||||||||||||
| Other | 1.5 | 0.3 | — | 1.8 | |||||||||||||||||||
| Acquisition activity expense | 0.2 | — | 0.1 | 0.3 | |||||||||||||||||||
| Adjusted Operating Earnings | $ | 83.0 | $ | 92.0 | $ | 30.8 | $ | 205.8 | |||||||||||||||
| Nine months ended | |||||||||||||||||||||||
| ($ millions) | |||||||||||||||||||||||
| December 29, 2019 | |||||||||||||||||||||||
| Energy Systems | Motive Power | Specialty | Total | ||||||||||||||||||||
| Net Sales | $ | 1,042.2 | $ | 995.2 | $ | 268.6 | $ | 2,306.0 | |||||||||||||||
| Operating Earnings | $ | 52.3 | $ | 95.6 | $ | 22.2 | $ | 170.1 | |||||||||||||||
| Inventory step up to fair value relating to recent acquisitions | 1.6 | — | 2.2 | 3.8 | |||||||||||||||||||
| Restructuring and other exit charges | 6.3 | 1.5 | 4.8 | 12.6 | |||||||||||||||||||
| Fixed asset write-off relating to exit activities and other | 0.1 | 5.4 | — | 5.5 | |||||||||||||||||||
| Amortization of identified intangible assets from recent acquisitions | 17.4 | — | 1.1 | 18.5 | |||||||||||||||||||
| ERP system implementation and other | 2.5 | 1.6 | — | 4.1 | |||||||||||||||||||
| Acquisition activity expense | 1.1 | — | 0.6 | 1.7 | |||||||||||||||||||
| Adjusted Operating Earnings | $ | 81.3 | $ | 104.1 | $ | 30.9 | $ | 216.3 | |||||||||||||||
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 measures “adjusted Net earnings” and “adjusted operating earnings” as applicable, in their analysis of the Company's performance. This measure, as used by EnerSys in past quarters and years, adjusts operating earnings and Net 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. 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, ERP system implementation, amortization of Alpha and NorthStar related intangible assets and tax valuation allowance changes, including those related to the adoption of the Tax Cuts and Jobs Act in the United States and the Federal Act on Tax Reform and AHV Financing 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%.
These non-GAAP disclosures have limitations as an analytical tool, should not be viewed as a substitute for operating earnings or 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 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 adjusted operating earnings is set forth in the table above, providing a reconciliation of non-GAAP adjusted operating earnings to the Company’s reported operating results for its business segments. Included below is a reconciliation of non-GAAP adjusted Net earnings to reported amounts. Non-GAAP adjusted operating earnings and 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) | ||||||||||||||
| January 3, 2021 | December 29, 2019 | |||||||||||||
| Net Earnings reconciliation | ||||||||||||||
| As reported Net Earnings | $ | 38.6 | $ | 27.3 | ||||||||||
Non-GAAP adjustments: | ||||||||||||||
| Inventory step up to fair value relating to recent acquisitions | — | (1) | 3.8 | (1) | ||||||||||
| Restructuring and other exit charges | 15.2 | (2) | 9.4 | (2) | ||||||||||
| Amortization of identified intangible assets from recent acquisitions | 6.8 | (3) | 7.9 | (3) | ||||||||||
| ERP system implementation and other | 0.3 | (4) | (0.9) | (4) | ||||||||||
| Acquisition activity expense | — | (5) | 0.4 | (5) | ||||||||||
| Income tax effect of above non-GAAP adjustments | (5.9) | (3.4) | ||||||||||||
| Non-GAAP adjusted Net Earnings | $ | 55.0 | $ | 44.5 | ||||||||||
| Outstanding shares used in per share calculations | ||||||||||||||
Basic | 42,599,834 | 42,286,641 | ||||||||||||
Diluted | 43,290,403 | 42,838,969 | ||||||||||||
| Non-GAAP adjusted Net Earnings per share: | ||||||||||||||
Basic | $ | 1.29 | $ | 1.05 | ||||||||||
Diluted | $ | 1.27 | $ | 1.04 | ||||||||||
| Reported Net Earnings per share: | ||||||||||||||
Basic | $ | 0.91 | $ | 0.65 | ||||||||||
Diluted | $ | 0.89 | $ | 0.64 | ||||||||||
| Dividends per common share | $ | 0.175 | $ | 0.175 | ||||||||||
The following table provides the line of business allocation of the non-GAAP adjustments shown in the reconciliation above:
| Quarter ended | ||||||||||||||
| ($ millions) | ||||||||||||||
| January 3, 2021 | December 29, 2019 | |||||||||||||
| Pre-tax | Pre-tax | |||||||||||||
| (1) Inventory step up to fair value relating to recent acquisitions - Energy Systems | $ | — | $ | 1.6 | ||||||||||
| (1) Inventory step up to fair value relating to recent acquisitions - Specialty | — | 2.2 | ||||||||||||
| (2) Restructuring charges - Energy Systems | 0.8 | 4.6 | ||||||||||||
| (2) Restructuring and other exit charges - Motive Power | 14.4 | 0.5 | ||||||||||||
| (2) Restructuring and other exit charges - Specialty | — | 4.3 | ||||||||||||
| (3) Amortization of identified intangible assets from recent acquisitions - Energy Systems | 6.3 | 6.8 | ||||||||||||
| (3) Amortization of identified intangible assets from recent acquisitions - Specialty | 0.5 | 1.1 | ||||||||||||
| (4) ERP system implementation and other - Energy Systems | — | (1.6) | ||||||||||||
| (4) ERP system implementation and other - Motive Power | 0.3 | 0.7 | ||||||||||||
| (5) Acquisition activity expense - Energy Systems | — | 0.3 | ||||||||||||
| (5) Acquisition activity expense - Specialty | — | 0.1 | ||||||||||||
| Total Non-GAAP adjustments | $ | 22.3 | $ | 20.6 | ||||||||||
| Nine months ended | ||||||||||||||
| (in millions, except share and per share amounts) | ||||||||||||||
| January 3, 2021 | December 29, 2019 | |||||||||||||
| Net Earnings reconciliation | ||||||||||||||
| As reported Net Earnings | $ | 109.5 | $ | 138.6 | ||||||||||
Non-GAAP adjustments: | ||||||||||||||
| Inventory step up to fair value relating to recent acquisitions | — | (1) | 3.8 | (1) | ||||||||||
| Restructuring and other exit charges | 19.7 | (2) | 18.1 | (2) | ||||||||||
| Amortization of identified intangible assets from recent acquisitions | 19.3 | (3) | 18.5 | (3) | ||||||||||
| ERP system implementation and other | 1.8 | (4) | 4.1 | (4) | ||||||||||
| Acquisition activity expense | 0.3 | (5) | 1.7 | (5) | ||||||||||
| Income tax effect of above non-GAAP adjustments | (11.1) | (10.7) | ||||||||||||
| Swiss Tax Reform | (1.9) | (21.0) | ||||||||||||
| Non-GAAP adjusted Net Earnings | $ | 137.6 | $ | 153.1 | ||||||||||
| Outstanding shares used in per share calculations | ||||||||||||||
Basic | 42,502,460 | 42,445,006 | ||||||||||||
Diluted | 43,103,304 | 42,888,495 | ||||||||||||
| Non-GAAP adjusted Net Earnings per share: | ||||||||||||||
Basic | $ | 3.24 | $ | 3.61 | ||||||||||
Diluted | $ | 3.19 | $ | 3.57 | ||||||||||
| Reported Net Earnings per share: | ||||||||||||||
Basic | $ | 2.58 | $ | 3.27 | ||||||||||
Diluted | $ | 2.54 | $ | 3.23 | ||||||||||
| 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) | ||||||||||||||
| January 3, 2021 | December 29, 2019 | |||||||||||||
| Pre-tax | Pre-tax | |||||||||||||
| (1) Inventory step up to fair value relating to recent acquisitions - Energy Systems | $ | — | $ | 1.6 | ||||||||||
| (1) Inventory step up to fair value relating to recent acquisitions - Specialty | — | 2.2 | ||||||||||||
| (2) Restructuring charges - Energy Systems | 2.6 | 6.3 | ||||||||||||
| (2) Restructuring and other exit charges - Motive Power | 16.9 | 1.5 | ||||||||||||
| (2) Restructuring and other exit charges - Specialty | 0.2 | 4.8 | ||||||||||||
| (2) Fixed asset write-off relating to exit activities and other - Energy Systems | — | 0.1 | ||||||||||||
| (2) Fixed asset write-off relating to exit activities and other - Motive Power | — | 5.4 | ||||||||||||
| (3) Amortization of identified intangible assets from recent acquisitions - Energy Systems | 18.0 | 17.4 | ||||||||||||
| (3) Amortization of identified intangible assets from recent acquisitions - Specialty | 1.3 | 1.1 | ||||||||||||
| (4) ERP system implementation and other - Energy Systems | 1.5 | 2.5 | ||||||||||||
| (4) ERP system implementation and other - Motive Power | 0.3 | 1.6 | ||||||||||||
| (5) Acquisition activity expense - Energy Systems | 0.2 | 1.1 | ||||||||||||
| (5) Acquisition activity expense - Specialty | 0.1 | 0.6 | ||||||||||||
| Total Non-GAAP adjustments | $ | 41.1 | $ | 46.2 | ||||||||||
Summary of Earnings (Unaudited)
(In millions, except share and per share data)
| Quarter ended | |||||||||||
| January 3, 2021 | December 29, 2019 | ||||||||||
| Net sales | $ | 751.1 | $ | 763.7 | |||||||
| Gross profit | 189.3 | 185.3 | |||||||||
| Operating expenses | 118.0 | 132.8 | |||||||||
| Restructuring and other exit charges | 15.2 | 9.4 | |||||||||
| Operating earnings | 56.1 | 43.1 | |||||||||
| Earnings before income taxes | 43.8 | 32.6 | |||||||||
| Income tax expense | 5.2 | 5.3 | |||||||||
| Net earnings attributable to EnerSys stockholders | $ | 38.6 | $ | 27.3 | |||||||
| Net reported earnings per common share attributable to EnerSys stockholders: | |||||||||||
Basic | $ | 0.91 | $ | 0.65 | |||||||
Diluted | $ | 0.89 | $ | 0.64 | |||||||
Dividends per common share | $ | 0.175 | $ | 0.175 | |||||||
| Weighted-average number of common shares used in reported earnings per share calculations: | |||||||||||
Basic | 42,599,834 | 42,286,641 | |||||||||
Diluted | 43,290,403 | 42,838,969 | |||||||||
| Nine months ended | |||||||||||
| January 3, 2021 | December 29, 2019 | ||||||||||
| Net sales | $ | 2,164.4 | $ | 2,306.0 | |||||||
| Gross profit | 541.8 | 584.1 | |||||||||
| Operating expenses | 357.4 | 395.9 | |||||||||
| Restructuring and other exit charges | 19.7 | 18.1 | |||||||||
| Operating earnings | 164.7 | 170.1 | |||||||||
| Earnings before income taxes | 126.9 | 139.6 | |||||||||
| Income tax expense | 17.4 | 1.0 | |||||||||
| Net earnings attributable to EnerSys stockholders | $ | 109.5 | $ | 138.6 | |||||||
| Net reported earnings per common share attributable to EnerSys stockholders: | |||||||||||
Basic | $ | 2.58 | $ | 3.27 | |||||||
Diluted | $ | 2.54 | $ | 3.23 | |||||||
Dividends per common share | $ | 0.525 | $ | 0.525 | |||||||
| Weighted-average number of common shares used in reported earnings per share calculations: | |||||||||||
Basic | 42,502,460 | 42,445,006 | |||||||||
Diluted | 43,103,304 | 42,888,495 | |||||||||
ENERSYS
Consolidated Condensed Balance Sheets (Unaudited)
(In Thousands, Except Share and Per Share Data)
| January 3, 2021 | March 31, 2020 | |||||||||||||
| Assets | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | 488,651 | $ | 326,979 | ||||||||||
| Accounts receivable, net of allowance for doubtful accounts: January 3, 2021 - $11,991; March 31, 2020 - $15,246 | 547,462 | 595,873 | ||||||||||||
| Inventories, net | 515,469 | 519,460 | ||||||||||||
| Prepaid and other current assets | 132,565 | 120,593 | ||||||||||||
| Total current assets | 1,684,147 | 1,562,905 | ||||||||||||
| Property, plant, and equipment, net | 507,858 | 480,014 | ||||||||||||
| Goodwill | 707,171 | 663,936 | ||||||||||||
| Other intangible assets, net | 438,998 | 455,685 | ||||||||||||
| Deferred taxes | 60,844 | 55,803 | ||||||||||||
| Other assets | 76,210 | 83,355 | ||||||||||||
| Total assets | $ | 3,475,228 | $ | 3,301,698 | ||||||||||
| Liabilities and Equity | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Short-term debt | $ | 40,268 | $ | 46,544 | ||||||||||
| Accounts payable | 269,019 | 281,873 | ||||||||||||
| Accrued expenses | 296,345 | 271,902 | ||||||||||||
| Total current liabilities | 605,632 | 600,319 | ||||||||||||
| Long-term debt, net of unamortized debt issuance costs | 1,054,191 | 1,104,731 | ||||||||||||
| Deferred taxes | 80,420 | 78,363 | ||||||||||||
| Other liabilities | 203,571 | 214,223 | ||||||||||||
| Total liabilities | 1,943,814 | 1,997,636 | ||||||||||||
| Commitments and contingencies | ||||||||||||||
| Equity: | ||||||||||||||
| Preferred Stock, $0.01 par value, 1,000,000 shares authorized, no shares issued or outstanding at January 3, 2021 and at March 31, 2020 | — | — | ||||||||||||
| Common Stock, 0.01 par value per share, 135,000,000 shares authorized, 55,407,527 shares issued and 42,624,471 shares outstanding at January 3, 2021; 55,114,808 shares issued and 42,323,305 shares outstanding at March 31, 2020 | 554 | 551 | ||||||||||||
| Additional paid-in capital | 546,385 | 529,100 | ||||||||||||
| Treasury stock at cost, 12,783,056 shares held as of January 3, 2021 and 12,791,503 shares held as of March 31, 2020 | (563,662) | (564,376) | ||||||||||||
| Retained earnings | 1,643,583 | 1,556,980 | ||||||||||||
| Contra equity - indemnification receivable | (5,273) | (6,724) | ||||||||||||
| Accumulated other comprehensive loss | (94,030) | (215,006) | ||||||||||||
| Total EnerSys stockholders’ equity | 1,527,557 | 1,300,525 | ||||||||||||
| Nonredeemable noncontrolling interests | 3,857 | 3,537 | ||||||||||||
| Total equity | 1,531,414 | 1,304,062 | ||||||||||||
| Total liabilities and equity | $ | 3,475,228 | $ | 3,301,698 | ||||||||||
ENERSYS
Consolidated Condensed Statements of Cash Flows (Unaudited)
(In Thousands)
| Nine months ended | ||||||||||||||
| January 3, 2021 | December 29, 2019 | |||||||||||||
| Cash flows from operating activities | ||||||||||||||
| Net earnings | $ | 109,538 | $ | 138,639 | ||||||||||
| Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||||||
| Depreciation and amortization | 70,192 | 65,788 | ||||||||||||
| Write-off of assets relating to exit activities | 7,292 | 10,024 | ||||||||||||
| Derivatives not designated in hedging relationships: | ||||||||||||||
| Net (gains) losses | (592) | 517 | ||||||||||||
| Cash proceeds (settlements) | 790 | (599) | ||||||||||||
| Provision for doubtful accounts | 270 | 2,922 | ||||||||||||
| Deferred income taxes | (1,785) | (20,948) | ||||||||||||
| Non-cash interest expense | 1,554 | 1,160 | ||||||||||||
| Stock-based compensation | 16,982 | 14,759 | ||||||||||||
| Gain on disposal of property, plant, and equipment | (4,007) | (112) | ||||||||||||
| Changes in assets and liabilities, net of effects of acquisitions: | ||||||||||||||
| Accounts receivable | 71,077 | 58,779 | ||||||||||||
| Inventories | 28,069 | (24,888) | ||||||||||||
| Prepaid and other current assets | 15,047 | (6,977) | ||||||||||||
| Other assets | 3,012 | 3,686 | ||||||||||||
| Accounts payable | (40,933) | (44,885) | ||||||||||||
| Accrued expenses | 9,839 | (7,295) | ||||||||||||
| Other liabilities | (14,246) | (14,738) | ||||||||||||
| Net cash provided by operating activities | 272,099 | 175,832 | ||||||||||||
| Cash flows from investing activities | ||||||||||||||
| Capital expenditures | (53,742) | (60,936) | ||||||||||||
| Purchase of business | — | (176,548) | ||||||||||||
| Insurance proceeds relating to property, plant and equipment | 4,800 | 403 | ||||||||||||
| Proceeds from disposal of property, plant, and equipment | 145 | 2,718 | ||||||||||||
| Net cash used in investing activities | (48,797) | (234,363) | ||||||||||||
| Cash flows from financing activities | ||||||||||||||
| Net repayments on short-term debt | (9,367) | (17,632) | ||||||||||||
| Proceeds from 2017 Revolver borrowings | 90,000 | 326,700 | ||||||||||||
| Proceeds from 2027 Notes | — | 300,000 | ||||||||||||
| Repayments of 2017 Revolver borrowings | (123,000) | (497,700) | ||||||||||||
| Repayments of 2017 Term Loan | (28,194) | (11,276) | ||||||||||||
| Debt issuance costs | — | (4,607) | ||||||||||||
| Option proceeds | 4,818 | 505 | ||||||||||||
| Payment of taxes related to net share settlement of equity awards | (4,959) | (6,281) | ||||||||||||
| Purchase of treasury stock | — | (34,561) | ||||||||||||
| Dividends paid to stockholders | (22,338) | (22,299) | ||||||||||||
| Other | 466 | 586 | ||||||||||||
| Net cash (used in) provided by financing activities | (92,574) | 33,435 | ||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 30,944 | (1,606) | ||||||||||||
| Net increase (decrease) in cash and cash equivalents | 161,672 | (26,702) | ||||||||||||
| Cash and cash equivalents at beginning of period | 326,979 | 299,212 | ||||||||||||
| Cash and cash equivalents at end of period | $ | 488,651 | $ | 272,510 | ||||||||||
EnerSys also announced that it will host a conference call to discuss the Company's third quarter fiscal year 2021 financial results and provide an overview of the business. The call will conclude with a question and answer session.
The call, scheduled for Thursday, February 11, 2021 at 9:00 a.m., Eastern Time, will be hosted by David M. Shaffer, President and Chief Executive Officer, and Michael J. Schmidtlein, Chief Financial Officer.
The call will also be webcast on EnerSys' website. There will be a free download of a compatible media player on the Company’s website at http://www.enersys.com.
The conference call information is:
| Date: | Thursday, February 11, 2021 | ||||
| Time: | 9:00 a.m. Eastern Time | ||||
| Via Internet: | http://www.enersys.com | ||||
| Domestic Dial-In Number: | 877-359-9508 | ||||
| International Dial-In Number: | 224-357-2393 | ||||
| Passcode: | 9359557 | ||||
A replay of the conference call will be available from 12:30 p.m. on February 11, 2021 through 12:30 p.m. on March 13, 2021.
The replay information is:
| Via Internet: | http://www.enersys.com | ||||
| Domestic Replay Number: | 855-859-2056 | ||||
| International Replay Number: | 404-537-3406 | ||||
| Passcode: | 9359557 | ||||
For more information, contact Michael J. Schmidtlein, Chief Financial Officer, EnerSys, P.O. Box 14145, Reading, PA 19612-4145, USA. Tel: 610-236-4040 or by emailing investorrelations@enersys.com; Web site: 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 recent 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 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, satisfactory resolution of insurance coverage and claims for both property damage and business interruption, strategy for business interruption, or revenue loss due to the fire at the Richmond, KY facility, 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, “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations,” including “Forward-Looking Statements,” set forth in EnerSys’ Annual Report on Form 10-K for the fiscal year ended March 31, 2020. No undue reliance should be placed on any forward-looking statements.