Delivers Gross Margin of 28.5%, up 190 Basis Points From Prior Year
S
econd Quarter Fiscal 2025 Highlights
(All comparisons against the second quarter of fiscal year 2024 unless otherwise noted)
-
Delivered net sales of
$884M , down 2%, with strength inMotive Power offset by continued pressure in Communications and Class 8 Transportation - Energy Systems improving with net sales +6% sequentially and backlog increasing for the second consecutive quarter
-
Achieved
GM of 28.5%, +190 bps, including increased benefits from Inflation Reduction Act / IRC 45X tax credits, +60 bps ex IRA -
Realized diluted EPS of
$2.01 , +29%, and adjusted diluted EPS(1) of$2.12 , +15% -
Net leverage ratio(a) 1.6 X EBITDA on operating cash flow of
$34M -
Selected for
$199M Department of Energy award negotiation to partially fundEnerSys ’ planned lithium-ion cell production facility inGreenville, SC - Published Climate Action Plan Roadmap, outlining Company's strategic plans to achieve carbon neutrality goals
-
Announced planned executive succession;
David Shaffer to retire as CEO,Shawn O’Connell named successor
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20241106205282/en/
(Graphic: Business Wire)
Message from the CEO |
In the second quarter,
Energy Systems achieved sequential performance improvement, albeit with continued softness in Communications end markets, with the results of our optimization initiatives flowing through to the bottom line. We saw higher order trends in Communications and Data Centers in the
Specialty enjoyed excellent A&D results supplemented by the accretive impact of the Bren-Tronics acquisition which expands our lithium portfolio and presence in the defense market. Integration and results are exceeding our expectations. Although we grew our
We were very pleased to announce during the quarter that we were selected for a
While we expect that market uncertainty will persist through the coming months, we are confident our second half of the fiscal year is on track to outperform the first half. We are bullish about our strong position as a leading provider of energy storage solutions as we continue to deliver innovative products and services in growing end markets where the need for access to reliable power is increasing exponentially. We remain focused on delivering profitable long-term growth for our shareholders.
Key Financial Results and Metrics |
Second quarter ended |
|
Six months ended |
||||||||||||||||
In millions, except per share amounts |
|
|
|
|
Change |
|
|
|
|
|
Change |
||||||||
|
$ |
883.7 |
|
$ |
901.0 |
|
|
(1.9 |
)% |
|
$ |
1,736.6 |
|
$ |
1,809.6 |
|
|
(4.0 |
)% |
Diluted EPS (GAAP) |
$ |
2.01 |
|
$ |
1.56 |
|
$ |
0.45 |
|
|
$ |
3.72 |
|
$ |
3.17 |
|
$ |
0.55 |
|
Adjusted Diluted EPS (Non-GAAP)(1) |
$ |
2.12 |
|
$ |
1.84 |
|
$ |
0.28 |
|
|
$ |
4.09 |
|
$ |
3.72 |
|
$ |
0.37 |
|
Gross Profit (GAAP) |
$ |
252.1 |
|
$ |
239.6 |
|
$ |
12.5 |
|
|
$ |
490.5 |
|
$ |
479.9 |
|
$ |
10.6 |
|
Operating Earnings (GAAP) |
$ |
99.4 |
|
$ |
88.6 |
|
$ |
10.8 |
|
|
$ |
190.7 |
|
$ |
178.0 |
|
$ |
12.7 |
|
Adjusted Operating Earnings (Non-GAAP)(2) |
$ |
114.6 |
|
$ |
103.5 |
|
$ |
11.1 |
|
|
$ |
220.3 |
|
$ |
210.7 |
|
$ |
9.6 |
|
Net Earnings (GAAP) |
$ |
82.3 |
|
$ |
65.2 |
|
$ |
17.1 |
|
|
$ |
152.4 |
|
$ |
132.0 |
|
$ |
20.4 |
|
EBITDA (Non-GAAP)(3) |
$ |
122.0 |
|
$ |
108.2 |
|
$ |
13.8 |
|
|
$ |
235.8 |
|
$ |
219.5 |
|
$ |
16.3 |
|
Adjusted EBITDA (Non-GAAP)(3) |
$ |
129.0 |
|
$ |
116.4 |
|
$ |
12.6 |
|
|
$ |
250.3 |
|
$ |
238.5 |
|
$ |
11.8 |
|
Share Repurchases |
$ |
63.5 |
|
$ |
47.3 |
|
$ |
16.2 |
|
|
$ |
75.1 |
|
$ |
47.3 |
|
$ |
27.8 |
|
Dividend per share |
$ |
0.24 |
|
$ |
0.225 |
|
$ |
0.02 |
|
|
$ |
0.465 |
|
$ |
0.40 |
|
$ |
0.07 |
|
Total Capital Returned to Stockholders |
$ |
73.1 |
|
$ |
56.5 |
|
$ |
16.6 |
|
|
$ |
93.8 |
|
$ |
63.7 |
|
$ |
30.1 |
|
(a) 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) Non-GAAP EBITDA is calculated as net earnings adjusted for depreciation, amortization, interest and income taxes. 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
Second Quarter 2025
Net sales for the second quarter of fiscal 2025 were
Net earnings attributable to
Net earnings for the second quarter of fiscal 2024 was
Excluding these highlighted items, adjusted Net earnings per diluted share for the second quarter of fiscal 2025, on a non-GAAP basis, were
Fiscal Year to Date 2025
Net sales for the six months of fiscal 2025 were
Net earnings for the six months of fiscal 2025 was
Net earnings for the six months of fiscal 2024 was
Adjusted Net earnings per diluted share for the six months of fiscal 2025, on a non-GAAP basis, were
Quarterly Dividend
The company announced today that its Board of Directors has declared a quarterly cash dividend of
Balance Sheet and Cash Flow
As of
The Company also returned approximately
Third Quarter and Full Year 2025 Outlook
In the third quarter of fiscal 2025,
-
Net sales in the range of
$920M to$960M -
Adjusted diluted earnings per share in the range of
$2.20 to$2.30 *
For the full year fiscal 2025,
-
Net sales in the range of
$3,675 to$3,765M , down from prior guidance of$3,735M to$3,885M -
Adjusted diluted earnings per share in the range of
$8.75 to$9.05 *, down from prior guidance of$8.80 to$9.20 * -
Capital expenditures in the range of
$100M to$120M
"While we are seeing encouraging demand trends in the majority of our end markets, including improving order rates in the
*Inclusive of IRC 45X tax benefits created with the IRA.
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 second quarter results at
To join the live call, please register at https://register.vevent.com/register/BI1012cc0b2b4144b9b4ee866d5476e344. A dial-in and unique PIN will be provided upon registration.
About
Sustainability
Sustainability at
Caution Concerning Forward-Looking Statements
This press release, and oral statements made regarding the subjects of this release, contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, or the Reform Act, which may include, but are not limited to, statements regarding EnerSys’ earnings estimates, intention to pay quarterly cash dividends, return capital to stockholders, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts, including statements identified by words such as “believe,” “plan,” “seek,” “expect,” “intend,” “estimate,” “anticipate,” “will,” and similar expressions. All statements addressing operating performance, events, or developments that
Although
Consolidated Condensed Statements of Income (Unaudited) (In millions, except share and per share data) |
|||||||||||
|
Quarter ended |
|
Six months ended |
||||||||
|
|
|
|
|
|
|
|
||||
Net sales |
$ |
883.7 |
|
$ |
901.0 |
|
$ |
1,736.6 |
|
$ |
1,809.6 |
Gross profit |
|
252.1 |
|
$ |
239.6 |
|
$ |
490.5 |
|
$ |
479.9 |
Operating expenses |
|
150.5 |
|
$ |
143.8 |
|
$ |
291.7 |
|
$ |
288.4 |
Restructuring and other exit charges |
|
2.2 |
|
$ |
7.2 |
|
$ |
8.1 |
|
$ |
13.5 |
Operating earnings |
|
99.4 |
|
$ |
88.6 |
|
$ |
190.7 |
|
$ |
178.0 |
Earnings before income taxes |
|
84.2 |
|
$ |
73.4 |
|
$ |
163.5 |
|
$ |
146.9 |
Income tax expense |
|
1.9 |
|
$ |
8.2 |
|
$ |
11.1 |
|
$ |
14.9 |
Net earnings attributable to |
$ |
82.3 |
|
$ |
65.2 |
|
$ |
152.4 |
|
$ |
132.0 |
|
|
|
|
|
|
|
|
||||
Net reported earnings per common share attributable to |
|
|
|
|
|
|
|
||||
Basic |
$ |
2.05 |
|
$ |
1.59 |
|
$ |
3.79 |
|
$ |
3.23 |
Diluted |
$ |
2.01 |
|
$ |
1.56 |
|
$ |
3.72 |
|
$ |
3.17 |
Dividends per common share |
$ |
0.24 |
|
$ |
0.225 |
|
$ |
0.465 |
|
$ |
0.40 |
Weighted-average number of common shares used in reported earnings per share calculations: |
|
|
|
|
|
|
|
||||
Basic |
|
40,165,080 |
|
|
40,922,959 |
|
|
40,184,546 |
|
|
40,930,146 |
Diluted |
|
40,863,205 |
|
|
41,684,634 |
|
|
40,924,660 |
|
|
41,691,479 |
Consolidated Condensed Balance Sheets (Unaudited) (In Thousands, Except Share and Per Share Data) |
||||||||
|
|
|
|
|
||||
Assets |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
407,919 |
|
|
$ |
333,324 |
|
Accounts receivable, net of allowance for doubtful accounts: |
|
|
549,011 |
|
|
|
524,725 |
|
Inventories, net |
|
|
763,516 |
|
|
|
697,698 |
|
Prepaid and other current assets |
|
|
335,923 |
|
|
|
226,949 |
|
Total current assets |
|
|
2,056,369 |
|
|
|
1,782,696 |
|
Property, plant, and equipment, net |
|
|
582,298 |
|
|
|
532,450 |
|
|
|
|
738,603 |
|
|
|
682,934 |
|
Other intangible assets, net |
|
|
395,411 |
|
|
|
319,407 |
|
Deferred taxes |
|
|
55,090 |
|
|
|
49,798 |
|
Other assets |
|
|
123,261 |
|
|
|
98,721 |
|
Total assets |
|
$ |
3,951,032 |
|
|
$ |
3,466,006 |
|
Liabilities and Equity |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Short-term debt |
|
$ |
30,080 |
|
|
$ |
30,444 |
|
Accounts payable |
|
|
333,671 |
|
|
|
369,456 |
|
Accrued expenses |
|
|
328,687 |
|
|
|
323,957 |
|
Total current liabilities |
|
|
692,438 |
|
|
|
723,857 |
|
Long-term debt, net of unamortized debt issuance costs |
|
|
1,202,583 |
|
|
|
801,965 |
|
Deferred taxes |
|
|
34,836 |
|
|
|
30,583 |
|
Other liabilities |
|
|
179,579 |
|
|
|
152,529 |
|
Total liabilities |
|
|
2,109,436 |
|
|
|
1,708,934 |
|
Commitments and contingencies |
|
|
|
|
||||
Equity: |
|
|
|
|
||||
Preferred Stock, |
|
|
— |
|
|
|
— |
|
Common Stock, |
|
|
567 |
|
|
|
564 |
|
Additional paid-in capital |
|
|
644,162 |
|
|
|
629,879 |
|
|
|
|
(910,650 |
) |
|
|
(835,827 |
) |
Retained earnings |
|
|
2,297,431 |
|
|
|
2,163,880 |
|
Accumulated other comprehensive loss |
|
|
(193,443 |
) |
|
|
(204,851 |
) |
Total |
|
|
1,838,067 |
|
|
|
1,753,645 |
|
Nonredeemable noncontrolling interests |
|
|
3,529 |
|
|
|
3,427 |
|
Total equity |
|
|
1,841,596 |
|
|
|
1,757,072 |
|
Total liabilities and equity |
|
$ |
3,951,032 |
|
|
$ |
3,466,006 |
|
Consolidated Condensed Statements of Cash Flows (Unaudited) (In Thousands) |
||||||||
|
|
Six months ended |
||||||
|
|
|
|
|
||||
Cash flows from operating activities |
|
|
|
|
||||
Net earnings |
|
$ |
152,377 |
|
|
$ |
132,026 |
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation and amortization |
|
|
48,757 |
|
|
|
45,214 |
|
Write-off of assets relating to exit activities |
|
|
244 |
|
|
|
4,146 |
|
Derivatives not designated in hedging relationships: |
|
|
|
|
||||
Net losses (gains) |
|
|
(1,783 |
) |
|
|
1,204 |
|
Cash (settlements) proceeds |
|
|
1,320 |
|
|
|
695 |
|
Provision for doubtful accounts |
|
|
1,124 |
|
|
|
1,456 |
|
Deferred income taxes |
|
|
114 |
|
|
|
46 |
|
Non-cash interest expense |
|
|
969 |
|
|
|
820 |
|
Stock-based compensation |
|
|
12,187 |
|
|
|
13,077 |
|
(Gain) loss on disposal of property, plant, and equipment |
|
|
64 |
|
|
|
158 |
|
Changes in assets and liabilities: |
|
|
|
|
||||
Accounts receivable |
|
|
(9,323 |
) |
|
|
93,368 |
|
Inventories |
|
|
(12,401 |
) |
|
|
10,529 |
|
Prepaid and other current assets |
|
|
(26,201 |
) |
|
|
(13,891 |
) |
Other assets |
|
|
968 |
|
|
|
(1,306 |
) |
Accounts payable |
|
|
(40,104 |
) |
|
|
(57,233 |
) |
Accrued expenses |
|
|
(83,963 |
) |
|
|
(44,803 |
) |
Other liabilities |
|
|
(303 |
) |
|
|
217 |
|
Net cash provided by (used in) operating activities |
|
|
44,046 |
|
|
|
185,723 |
|
|
|
|
|
|
||||
Cash flows from investing activities |
|
|
|
|
||||
Capital expenditures |
|
|
(66,486 |
) |
|
|
(35,854 |
) |
Purchase of business |
|
|
(205,276 |
) |
|
|
(8,270 |
) |
Proceeds from disposal of property, plant, and equipment |
|
|
89 |
|
|
|
2,007 |
|
Investment in |
|
|
(10,852 |
) |
|
|
— |
|
Net cash (used in) provided by investing activities |
|
|
(282,525 |
) |
|
|
(42,117 |
) |
|
|
|
|
|
||||
Cash flows from financing activities |
|
|
|
|
||||
Net (repayments) borrowings on short-term debt |
|
|
(434 |
) |
|
|
(61 |
) |
Proceeds from Second Amended Revolver borrowings |
|
|
476,600 |
|
|
|
172,500 |
|
Repayments of Second Amended Revolver borrowings |
|
|
(76,600 |
) |
|
|
(252,500 |
) |
Repayments of Second and Third Amended Term Loans |
|
|
— |
|
|
|
(12,736 |
) |
Finance lease obligations |
|
|
(8 |
) |
|
|
— |
|
Option proceeds, net |
|
|
7,445 |
|
|
|
9,668 |
|
Payment of taxes related to net share settlement of equity awards |
|
|
(7,984 |
) |
|
|
(7,348 |
) |
Purchase of treasury stock |
|
|
(75,187 |
) |
|
|
(47,340 |
) |
Issuance of treasury stock- ESPP |
|
|
537 |
|
|
|
— |
|
Dividends paid to stockholders |
|
|
(18,598 |
) |
|
|
(16,341 |
) |
PPD Deferred Financing on Bond Issue-Legal Fees |
|
|
(351 |
) |
|
|
— |
|
Other |
|
|
(166 |
) |
|
|
690 |
|
Net cash (used in) financing activities |
|
|
305,254 |
|
|
|
(153,468 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
|
7,820 |
|
|
|
(9,052 |
) |
Net decrease in cash and cash equivalents |
|
|
74,595 |
|
|
|
(18,914 |
) |
Cash and cash equivalents at beginning of period |
|
|
333,324 |
|
|
|
346,665 |
|
Cash and cash equivalents at end of period |
|
$ |
407,919 |
|
|
$ |
327,751 |
|
|
|
|
|
|
Reconciliations of GAAP to Non-GAAP Financial Measures
This press release contains financial information determined by methods other than in accordance with
Income tax effects of non-GAAP adjustments are calculated using the applicable statutory tax rate for the jurisdictions in which the charges (benefits) are incurred, while taking into consideration any valuation allowances. For those items which are non-taxable, the tax expense (benefit) is calculated at 0%.
These non-GAAP disclosures have limitations as an analytical tool, should not be viewed as a substitute for operating earnings, Net earnings or net income determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Management believes that this non-GAAP supplemental information will be helpful in understanding the Company's ongoing operating results. This supplemental presentation should not be construed as an inference that the Company's future results will be unaffected by similar adjustments to Net earnings determined in accordance with GAAP.
A reconciliation of non-GAAP 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. Corporate and other includes amounts managed on a company-wide basis and not directly allocated to any reportable segments, primarily relating to IRA production tax credits. Also, included are start up costs for exploration of a new lithium plant as well as start-up operating expenses from the
Business Segment Operating Results
|
Quarter ended |
|||||||||||||
|
($ millions) |
|||||||||||||
|
|
|||||||||||||
|
Energy Systems |
|
|
|
Specialty |
|
Corporate and other |
|
Total |
|||||
|
$ |
382.1 |
|
$ |
366.7 |
|
$ |
134.9 |
|
$ |
— |
|
$ |
883.7 |
|
|
|
|
|
|
|
|
|
|
|||||
Operating Earnings |
$ |
17.5 |
|
$ |
56.3 |
|
$ |
0.3 |
|
$ |
25.3 |
|
$ |
99.4 |
Inventory step up to fair value relating to recent acquisitions |
|
— |
|
|
— |
|
|
1.9 |
|
|
— |
|
$ |
1.9 |
Restructuring and other exit charges |
|
0.7 |
|
|
1.1 |
|
|
0.4 |
|
|
— |
|
|
2.2 |
Amortization of intangible assets |
|
6.0 |
|
|
0.2 |
|
|
2.0 |
|
|
— |
|
|
8.2 |
Integration costs |
|
— |
|
|
— |
|
|
1.8 |
|
|
— |
|
|
1.8 |
Acquisition activity expense |
|
— |
|
|
— |
|
|
1.1 |
|
|
— |
|
|
1.1 |
Adjusted Operating Earnings |
$ |
24.2 |
|
$ |
57.6 |
|
$ |
7.5 |
|
$ |
25.3 |
|
$ |
114.6 |
|
Quarter ended |
|||||||||||||
|
($ millions) |
|||||||||||||
|
|
|||||||||||||
|
Energy Systems |
|
|
|
Specialty |
|
Corporate and other |
|
Total |
|||||
|
$ |
422.5 |
|
$ |
355.2 |
|
$ |
123.3 |
|
$ |
— |
|
$ |
901.0 |
|
|
|
|
|
|
|
|
|
|
|||||
Operating Earnings |
$ |
16.8 |
|
$ |
49.6 |
|
$ |
3.3 |
|
$ |
18.9 |
|
$ |
88.6 |
Restructuring and other exit charges |
|
2.2 |
|
|
3.5 |
|
|
1.5 |
|
|
— |
|
|
7.2 |
Amortization of intangible assets |
|
6.3 |
|
|
0.2 |
|
|
0.7 |
|
|
— |
|
|
7.2 |
Integration costs |
|
0.2 |
|
|
— |
|
|
— |
|
|
— |
|
|
0.2 |
Acquisition activity expense |
|
— |
|
|
0.1 |
|
|
— |
|
|
— |
|
|
0.1 |
Other |
|
0.1 |
|
|
— |
|
|
0.1 |
|
|
— |
|
|
0.2 |
Adjusted Operating Earnings |
$ |
25.6 |
|
$ |
53.4 |
|
$ |
5.6 |
|
$ |
18.9 |
|
$ |
103.5 |
|
|
|
|
|
|
|
|
|
|
Increase (Decrease) as a % from prior year quarter |
Energy Systems |
|
|
|
Specialty |
|
Corporate and other |
|
Total |
|||||
|
(9.6 |
)% |
|
3.2 |
% |
|
9.3 |
% |
|
— |
% |
|
(1.9 |
)% |
Operating Earnings |
4.4 |
|
|
13.5 |
|
|
(92.3 |
) |
|
33.8 |
|
|
12.2 |
|
Adjusted Operating Earnings |
(4.7 |
) |
|
7.7 |
|
|
31.3 |
|
|
33.8 |
|
|
10.7 |
|
NM = Not Meaningful |
|
Six months ended |
|||||||||||||
|
($ millions) |
|||||||||||||
|
|
|||||||||||||
|
Energy Systems |
|
|
|
Specialty |
|
Corporate and other |
|
Total |
|||||
|
$ |
743.1 |
|
$ |
732.9 |
|
$ |
260.6 |
|
$ |
0.0 |
|
$ |
1,736.6 |
|
|
|
|
|
|
|
|
|
|
|||||
Operating Earnings |
$ |
26.5 |
|
$ |
110.7 |
|
$ |
2.4 |
|
$ |
51.1 |
|
$ |
190.7 |
Inventory step up to fair value relating to recent acquisitions |
|
— |
|
|
— |
|
|
1.9 |
|
|
— |
|
|
1.9 |
Restructuring and other exit charges |
|
4.5 |
|
|
2.5 |
|
|
1.1 |
|
|
— |
|
|
8.1 |
Amortization of intangible assets |
|
12.0 |
|
|
0.4 |
|
|
2.7 |
|
|
— |
|
|
15.1 |
Integration costs |
|
0.2 |
|
|
— |
|
|
1.8 |
|
|
— |
|
|
2.0 |
Acquisition activity expense |
|
— |
|
|
— |
|
|
2.5 |
|
|
— |
|
2.5 |
|
Adjusted Operating Earnings |
$ |
43.2 |
|
$ |
113.6 |
|
$ |
12.4 |
|
$ |
51.1 |
|
$ |
220.3 |
|
Six months ended |
|||||||||||||
|
($ millions) |
|||||||||||||
|
|
|||||||||||||
|
Energy Systems |
|
|
|
Specialty |
|
Corporate and other |
|
Total |
|||||
|
$ |
847.1 |
|
$ |
706.0 |
|
$ |
256.5 |
|
$ |
0.0 |
|
$ |
1,809.6 |
|
|
|
|
|
|
|
|
|
|
|||||
Operating Earnings |
$ |
39.0 |
|
$ |
97.8 |
|
$ |
4.9 |
|
$ |
36.3 |
|
$ |
178.0 |
Inventory adjustment relating to exit activities |
|
— |
|
|
— |
|
|
3.1 |
|
|
— |
|
|
3.1 |
Restructuring and other exit charges |
|
2.7 |
|
|
5.0 |
|
|
5.8 |
|
|
— |
|
|
13.5 |
Amortization of intangible assets |
|
12.5 |
|
|
0.3 |
|
|
1.4 |
|
|
— |
|
|
14.2 |
Integration costs |
|
0.3 |
|
|
— |
|
|
— |
|
|
— |
|
|
0.3 |
Acquisition activity expense |
|
— |
|
|
0.2 |
|
|
— |
|
|
— |
|
|
0.2 |
Other |
|
0.8 |
|
|
0.4 |
|
|
0.2 |
|
|
— |
|
|
1.4 |
Adjusted Operating Earnings |
$ |
55.3 |
|
$ |
103.7 |
|
$ |
15.4 |
|
$ |
36.3 |
|
$ |
210.7 |
Increase (Decrease) as a % from prior year |
Energy Systems |
|
|
|
Specialty |
|
Corporate and other |
|
Total |
|||||
|
(12.3 |
)% |
|
3.8 |
% |
|
1.5 |
% |
|
— |
% |
|
(4.0 |
)% |
Operating Earnings |
(31.8 |
) |
|
13.1 |
|
|
(52.5 |
) |
|
40.8 |
|
|
7.1 |
|
Adjusted Operating Earnings |
(21.5 |
) |
|
9.4 |
|
|
(20.6 |
) |
|
40.8 |
|
|
4.5 |
|
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 |
|
Six months ended |
||||||||
|
($ millions) |
|
($ millions) |
||||||||
|
|
|
|
|
|
|
|
||||
Net Earnings |
|
82.3 |
|
$ |
65.2 |
|
$ |
152.4 |
|
$ |
132.0 |
Depreciation |
|
17.1 |
|
|
15.4 |
|
|
33.7 |
|
|
31.0 |
Amortization |
|
8.2 |
|
|
7.2 |
|
|
15.1 |
|
|
14.2 |
Interest |
|
12.5 |
|
|
12.2 |
|
|
23.5 |
|
|
27.4 |
Income Taxes |
|
1.9 |
|
|
8.2 |
|
|
11.1 |
|
|
14.9 |
EBITDA |
|
122.0 |
|
|
108.2 |
|
|
235.8 |
|
|
219.5 |
Non-GAAP adjustments |
|
7.0 |
|
|
8.2 |
|
|
14.5 |
|
|
19.0 |
Adjusted EBITDA |
$ |
129.0 |
|
$ |
116.4 |
|
$ |
250.3 |
|
$ |
238.5 |
The following table provides the non-GAAP adjustments shown in the reconciliation above:
Quarter ended |
|
Six months ended |
|||||||||
|
($ millions) |
|
($ millions) |
||||||||
|
|
|
|
|
|
|
|
||||
Inventory adjustment relating to exit activities |
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
3.1 |
Inventory step up to fair value relating to recent acquisitions |
|
1.9 |
|
|
— |
|
|
1.9 |
|
|
— |
Restructuring and other exit charges |
|
2.2 |
|
|
7.2 |
|
|
8.1 |
|
|
13.5 |
Integration Costs |
|
1.8 |
|
|
0.2 |
|
|
2.0 |
|
|
0.3 |
Acquisition expense |
|
1.1 |
|
|
0.1 |
|
$ |
2.5 |
|
|
0.2 |
Other |
|
— |
|
|
0.7 |
|
$ |
— |
|
|
1.9 |
Non-GAAP adjustments |
$ |
7.0 |
|
$ |
8.2 |
|
$ |
14.5 |
|
$ |
19.0 |
The table below presents a reconciliation of Gross Profit and Gross Margin to Adjusted Gross Profit and Adjusted Gross Margin:
Quarter ended |
|
Six months ended |
|||||||||||||
|
($ millions) |
|
($ millions) |
||||||||||||
|
|
|
|
|
|
|
|
||||||||
Gross Profit as reported |
$ |
252.1 |
|
|
$ |
239.6 |
|
|
$ |
490.5 |
|
|
$ |
479.9 |
|
Inventory adjustment relating to exit activities |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3.1 |
|
Inventory step up to fair value relating to recent acquisitions |
|
1.9 |
|
|
|
— |
|
|
|
1.9 |
|
|
|
— |
|
Adjusted Gross Profit |
|
254.0 |
|
|
|
239.6 |
|
|
|
492.4 |
|
|
|
483.0 |
|
|
|
|
|
|
|
|
|
||||||||
Gross Margin |
|
28.5 |
% |
|
|
26.6 |
% |
|
|
28.2 |
% |
|
|
26.5 |
% |
Adjusted Gross Margin |
|
28.7 |
% |
|
|
26.6 |
% |
|
|
28.4 |
% |
|
|
26.7 |
% |
The table below presents a reconciliation of Operating Cash Flow to Free Cash Flow and Adjusted Free Cash Flow Conversion percentages:
|
Quarter ended |
|
Six months ended |
||||||||||||
|
($ millions) |
|
($ millions) |
||||||||||||
|
|
|
|
|
|
|
|
||||||||
Net cash provided by (used in) operating activities |
$ |
33.6 |
|
|
$ |
110.8 |
|
|
$ |
44.0 |
|
|
$ |
185.7 |
|
Less Capital Expenditures |
|
(30.4 |
) |
|
|
(19.8 |
) |
|
|
(66.5 |
) |
|
|
(35.9 |
) |
Free Cash Flow |
|
3.2 |
|
|
|
91.0 |
|
|
|
(22.5 |
) |
|
|
149.8 |
|
|
Quarter ended |
|
Six months ended |
||||||||||||
|
($ millions) |
|
($ millions) |
||||||||||||
|
|
|
|
|
|
|
|
||||||||
Net cash provided by (used in) operating activities |
$ |
33.6 |
|
|
$ |
110.8 |
|
|
$ |
44.0 |
|
|
$ |
185.7 |
|
Net earnings |
|
82.3 |
|
|
|
65.2 |
|
|
|
152.4 |
|
|
|
132.0 |
|
Operating cash flow conversion % |
|
40.8 |
% |
|
|
169.9 |
% |
|
|
28.9 |
% |
|
|
140.7 |
% |
|
|
|
|
|
|
|
|
||||||||
Free cash flow |
|
3.2 |
|
|
|
91.0 |
|
|
|
(22.5 |
) |
|
|
149.8 |
|
Adjusted net earnings |
|
86.5 |
|
|
|
76.5 |
|
|
|
167.5 |
|
|
|
155.1 |
|
Adjusted free cash flow conversion % |
|
3.7 |
% |
|
|
119.0 |
% |
|
|
(13.4 |
)% |
|
|
96.6 |
% |
The following table provides a reconciliation of Net earnings to EBITDA (non-GAAP) and adjusted EBITDA (non-GAAP) per credit agreement for
|
|
Last twelve months |
||||
|
|
|
|
|
||
|
|
(in millions, except ratios) |
||||
Net earnings as reported |
|
$ |
289.5 |
|
$ |
242.4 |
Add back: |
|
|
|
|
||
Depreciation and amortization |
|
|
95.6 |
|
$ |
90.0 |
Interest expense |
|
|
46.0 |
|
$ |
59.9 |
Income tax expense |
|
|
19.3 |
|
|
38.2 |
EBITDA (non-GAAP) |
|
|
450.4 |
|
$ |
430.5 |
Adjustments per credit agreement definitions(1) |
|
|
79.9 |
|
|
48.9 |
Adjusted EBITDA (non-GAAP) per credit agreement(1) |
|
$ |
530.3 |
|
|
479.4 |
Total net debt(2) |
|
|
839.6 |
|
|
662.0 |
Leverage ratios: |
|
|
|
|
||
Total net debt/credit adjusted EBITDA ratio |
|
1.6 X |
|
1.4 X |
(1) |
The |
(2) |
Debt includes finance lease obligations and letters of credit and is net of all |
Included below is a reconciliation of historical non-GAAP adjusted Net earnings to reported amounts. Non-GAAP adjusted operating earnings and historical Net earnings are calculated excluding restructuring and other highlighted charges and credits. The following tables provide additional information regarding certain non-GAAP measures:
|
Quarter ended |
|
||||||
|
(in millions, except share and per share amounts) |
|
||||||
|
|
|
|
|
||||
Net earnings reconciliation |
|
|
|
|
||||
As reported Net Earnings |
$ |
82.3 |
|
|
$ |
65.2 |
|
|
Non-GAAP adjustments: |
|
|
|
|
||||
Inventory step up to fair value relating to recent acquisitions |
|
1.9 |
|
(1) |
|
— |
|
|
Restructuring and other exit charges |
|
2.2 |
|
(1) |
|
7.2 |
|
(1) |
Amortization of identified intangible assets |
|
8.2 |
|
(2) |
|
7.2 |
|
(2) |
Acquisition expense |
|
1.1 |
|
(3) |
|
0.1 |
|
(3) |
Integration costs |
|
1.8 |
|
(4) |
|
0.2 |
|
(4) |
Other |
|
— |
|
|
|
0.7 |
|
|
Income tax benefit from tax law changes and litigation |
|
(6.8 |
) |
|
|
— |
|
|
Income tax effect of above non-GAAP adjustments |
|
(4.2 |
) |
|
|
(4.1 |
) |
|
Non-GAAP adjusted Net earnings |
$ |
86.5 |
|
|
$ |
76.5 |
|
|
|
|
|
|
|
||||
Outstanding shares used in per share calculations |
|
|
|
|
||||
Basic |
|
40,165,080 |
|
|
|
40,922,959 |
|
|
Diluted |
|
40,863,205 |
|
|
|
41,684,634 |
|
|
Non-GAAP adjusted Net earnings per share: |
|
|
|
|
||||
Basic |
$ |
2.15 |
|
|
$ |
1.87 |
|
|
Diluted |
$ |
2.12 |
|
|
$ |
1.84 |
|
|
|
|
|
|
|
||||
Reported Net earnings (Loss) per share: |
|
|
|
|
||||
Basic |
$ |
2.05 |
|
|
$ |
1.59 |
|
|
Diluted |
$ |
2.01 |
|
|
$ |
1.56 |
|
|
Dividends per common share |
$ |
0.24 |
|
|
$ |
0.225 |
|
|
The following table provides the line of business allocation of the non-GAAP adjustments of items relating operating earnings (that are allocated to lines of business) shown in the reconciliation above:
|
|
Quarter ended |
||||
|
|
($ millions) |
||||
|
|
|
|
|
||
|
|
Pre-tax |
|
Pre-tax |
||
(1) Inventory step up to fair value relating to recent acquisitions - Specialty |
|
|
1.9 |
|
|
— |
(1) Restructuring and other exit charges - Energy Systems |
|
|
0.7 |
|
|
2.2 |
(1) Restructuring and other exit charges - |
|
|
1.1 |
|
|
3.5 |
(1) Restructuring and other exit charges - Specialty |
|
|
0.4 |
|
|
1.5 |
(2) Amortization of identified intangible assets - Energy Systems |
|
|
6.0 |
|
|
6.3 |
(2) Amortization of identified intangible assets - |
|
|
0.2 |
|
|
0.2 |
(2) Amortization of identified intangible assets - Specialty |
|
|
2.0 |
|
|
0.7 |
(3) Acquisition expense - |
|
|
— |
|
|
0.1 |
(3) Acquisition expense - Specialty |
|
|
1.1 |
|
|
— |
(4) Integration costs - Energy Systems |
|
|
— |
|
|
0.2 |
(4) Integration costs - Specialty |
|
|
1.8 |
|
|
— |
Total Non-GAAP adjustments |
|
$ |
15.2 |
|
$ |
14.7 |
|
Six months ended |
|
||||||
|
(in millions, except share and per share amounts) |
|
||||||
|
|
|
|
|
||||
Net Earnings reconciliation |
|
|
|
|
||||
As reported Net Earnings |
$ |
152.4 |
|
|
$ |
132.0 |
|
|
Non-GAAP adjustments: |
|
|
|
|
||||
Inventory step up to fair value relating to recent acquisitions |
|
1.9 |
|
(1) |
|
|
||
Inventory adjustment relating to exit activities |
|
— |
|
|
|
3.1 |
|
(1) |
Restructuring and other exit charges |
|
8.1 |
|
(1) |
|
13.5 |
|
(1) |
Amortization of identified intangible assets |
|
15.1 |
|
(2) |
|
14.2 |
|
(2) |
Acquisition activity expense |
|
2.5 |
|
(3) |
|
0.2 |
|
(3) |
Integration costs |
|
2.0 |
|
(4) |
|
0.3 |
|
(4) |
Other |
|
— |
|
|
|
1.9 |
|
|
Income tax benefit from tax law changes and litigation |
|
(6.8 |
) |
|
|
— |
|
|
Income tax effect of above non-GAAP adjustments |
|
(7.7 |
) |
|
|
(10.1 |
) |
|
Non-GAAP adjusted Net Earnings |
$ |
167.5 |
|
|
$ |
155.1 |
|
|
|
|
|
|
|
||||
Outstanding shares used in per share calculations |
|
|
|
|
||||
Basic |
|
40,184,546 |
|
|
|
40,930,146 |
|
|
Diluted |
|
40,924,660 |
|
|
|
41,691,479 |
|
|
Non-GAAP adjusted Net Earnings per share: |
|
|
|
|
||||
Basic |
$ |
4.17 |
|
|
$ |
3.79 |
|
|
Diluted |
$ |
4.09 |
|
|
$ |
3.72 |
|
|
|
|
|
|
|
||||
Reported Net Earnings (Loss) per share: |
|
|
|
|
||||
Basic |
$ |
3.79 |
|
|
$ |
3.23 |
|
|
Diluted |
$ |
3.72 |
|
|
$ |
3.17 |
|
|
Dividends per common share |
$ |
0.465 |
|
|
$ |
0.40 |
|
|
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:
|
|
Six months ended |
||||
|
|
($ millions) |
||||
|
|
|
|
|
||
|
|
Pre-tax |
|
Pre-tax |
||
(1) Inventory step up to fair value relating to recent acquisitions - Specialty |
|
|
1.9 |
|
|
— |
(1) Inventory Adjustment relating to exit activities - Specialty |
|
|
— |
|
|
3.1 |
(1) Restructuring and other exit charges - Energy Systems |
|
|
4.5 |
|
|
2.7 |
(1) Restructuring and other exit charges - |
|
|
2.5 |
|
|
5.0 |
(1) Restructuring and other exit charges - Specialty |
|
|
1.1 |
|
|
5.8 |
(2) Amortization of identified intangible assets - Energy Systems |
|
|
12.0 |
|
|
12.5 |
(2) Amortization of identified intangible assets - |
|
|
0.4 |
|
|
0.3 |
(2) Amortization of identified intangible assets - Specialty |
|
|
2.7 |
|
|
1.4 |
(3) Acquisition expense - |
|
|
— |
|
|
0.2 |
(3) Acquisition expense - Specialty |
|
|
2.5 |
|
|
— |
(4) Integration costs - Energy Systems |
|
|
0.2 |
|
|
0.3 |
(4) Integration costs - Specialty |
|
|
1.8 |
|
|
— |
Total Non-GAAP adjustments |
|
$ |
29.6 |
|
$ |
31.3 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241106205282/en/
Vice President, Investor Relations and Corporate Communications
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E-mail: investorrelations@enersys.com
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