EnerSys Reports Second Fiscal Quarter of 2008 Results



    READING, Pa., Nov. 7 /CNW/ -- EnerSys (NYSE:   ENS), the world's largest
manufacturer, marketer and distributor of industrial batteries, announced
today its financial results for the second fiscal quarter of 2008.  Net
earnings for the second fiscal quarter of 2008 were up 46%, and on a non-GAAP
adjusted basis, were up 51% when compared to the comparable prior year
amounts.  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 earnings for the second fiscal quarter of 2008 were $16.8 million, or
$0.36 per basic share and $0.35 per diluted share, which includes $0.3 million
($0.4 million pre-tax) unfavorable impact of the continuation of the
previously disclosed European restructuring plan. Excluding the highlighted
European restructuring charges in the second fiscal quarter of 2008, non-GAAP
adjusted net earnings were $17.1 million, or $0.35 per diluted share, and
exceed the previous guidance of $0.22 - $0.26 per diluted share provided on
August 8, 2007. The previous guidance also excluded the unfavorable impact of
the European restructuring charges.
    Net earnings in the second fiscal quarter of the prior year were $ 11.5
million, or $0.25 per basic share and $0.24 per diluted share, which included
$0.7 million ($1.0 million pre-tax) or a $0.01 per share favorable impact from
a legal settlement, offset by the unfavorable impact from professional fees
related to a shelf registration and an abandoned acquisition of $0.5 million
($0.7 million pre-tax) or a $0.01 per share.  Excluding the highlighted
charges and credits, non-GAAP adjusted net earnings for the second fiscal
quarter of the prior year were $11.3 million or $0.24 per basic and diluted
share.
    Net sales for the second fiscal quarter of 2008 were $461.5 million
compared to $353.9 million in the comparable period of the prior year, or an
increase of 30%.

    EnerSys' operating results for its reporting segments for the second
fiscal quarter of 2008 and comparable prior year period are as follows (in
millions):

    
                                          Fiscal quarters ended
                                October 1, 2006           September 30, 2007
                                        Operating                  Operating
                           Net Sales    Earnings     Net Sales     Earnings
    Reserve Power           $158.8        $10.3       $198.6         $9.3
    Motive Power             195.1         13.4        262.9         22.6
    Restructuring charges        -            -            -         (0.4)
    Litigation settlement
     income                      -          1.0            -            -
    

    
                            $353.9        $24.7       $461.5        $31.5
    
    Net earnings for the six fiscal months of 2008 were up 2%, and on a non-
GAAP adjusted basis, were up 45% when compared to the comparable prior year
amounts. Please refer to the section included herein under the heading
"Reconciliation of Non-GAAP Adjusted Financial Measures" for a discussion of
the Company's use of non-GAAP adjusted financial information.
    Net earnings for the six fiscal months of 2008 were $24.2 million or
$0.51 per basic share and $0.50 per diluted share, included an unfavorable
$0.15 per share impact from the $7.1 million ($10.3 million pre-tax) of the
European restructuring and $0.1 million ($0.2 million pre-tax) unfavorable
impact of professional fees related to a secondary offering.  Excluding the
highlighted charges, non-GAAP adjusted net earnings for the six fiscal months
of 2008 were $31.4 million or $0.67 per basic share and $0.65 per diluted
share.
    Net earnings in the six fiscal months of the prior year were $23.6
million, or $0.51 per basic share and $0.50 per diluted share, which included
$2.6 million ($3.8 million pre-tax) or a $0.6 per share favorable impact from
legal settlements, offset by the unfavorable impact of $0.5 million ($0.8
million pre-tax) or a $0.01 per share from professional fees related to a
shelf registration and an abandoned acquisition. Excluding the highlighted
charges and credits, non-GAAP adjusted net earnings for the six fiscal months
of the prior year were $21.5 million or $0.46 per basic share and $0.45 per
diluted share.
    Net sales for the six fiscal months of 2008 were $891.3 million compared
to $713.0 million in the prior year, or an increase of 25%.
    EnerSys' operating results for its reporting segments for the six fiscal
months of 2008 and comparable prior year period are as follows (in millions):


    
                                          Six fiscal months ended
                                October 1, 2006         September 30, 2007
                                       Operating                  Operating
                          Net Sales    Earnings     Net Sales     Earnings
    Reserve Power           $317.2        $19.7       $383.3        $17.8
    Motive Power             395.8         26.8        508.0         43.3
    Restructuring and
     other charges               -            -            -        (10.3)
    Litigation settlement
     income                      -          3.8            -            -
    

    
                            $713.0        $50.3       $891.3        $50.8
    
    "We continue to experience record sales with broad based growth in all
regions of the world and in both of our market segments.  I believe that our
customers realize the value and the quality of the products and services that
we deliver to them every day," stated John D. Craig, chairman, president and
chief executive officer. "I am pleased with our earnings in the second
quarter, resulting from our increased sales volume and the impact of our
investments in support of cost reductions and lower cost manufacturing
facilities.  Offsetting these improvements, however, are increased commodity
costs, especially lead which reached an unprecedented level in our second
quarter.  We have not yet fully recovered the impact of these cost increases
through selling price adjustments."
    Craig added, "We anticipate that adjusted diluted net earnings per share
for our third fiscal quarter of 2008 will be between $0.25 and $0.29, which
excludes the expected additional European restructuring charges of
approximately $2 million ($0.03 per share) as described in our press release
of May 23, 2007."
    This press release contains forward-looking statements (within the
meaning of the Private Securities Litigation Reform Act of 1995) that are
based on management's current expectations and subject to uncertainties and
changes in circumstances.  The Company's actual results may differ materially
from the forward-looking statements for a number of reasons. For a list of the
factors, which could affect the Company's results, including earnings
estimates, see "Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations," including "Forward-Looking Statements,"
set forth in the Company's Quarterly Report on Form 10-Q for the second fiscal
quarter ended September 30, 2007, which was filed with the U.S. Securities and
Exchange Commission.
    
    Reconciliation of Non-GAAP Adjusted 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 non-GAAP measures in their analysis of the
Company's performance. These measures, as used by EnerSys in past quarters and
years, adjust net earnings determined in accordance with GAAP to reflect
changes in financial results associated with the Company's restructuring
initiatives and highlighted charges and income items. Management believes
presentations of financial measures reflecting these non-GAAP adjustments
provide 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; in particular, the charges that the
Company incurs as a result of restructuring activities associated with our
acquisitions; and those charges and credits that are not directly related to
operating unit performance and are unusual in nature. Because these charges
are incurred as a result of an acquisition, they are not a valid measure of
the performance of our underlying business. These disclosures have limitations
as an analytical tool, should not be viewed as a substitute for net earnings
determined in accordance with GAAP, 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.
    Included below is a reconciliation of non-GAAP adjusted financial
measures to reported amounts.  Non-GAAP adjusted net earnings are calculated
excluding restructuring and highlighted charges. The following tables provide
additional information regarding certain non-GAAP measures:


    
                                                     Fiscal Quarters Ended
                                                   October 1,   September 30,
                                                      2006           2007
                                                          (in millions,
                                                        except share and
                                                        per share amounts)
    Net earnings reconciliation
    As reported net earnings                  $        11.5    $     16.8
      Non-GAAP adjustments (net of tax):
        Restructuring charges                             -           0.3(1)
        Litigation settlement income                (0.7)(2)            -
        Shelf registration statement
         and an abandoned acquisition                 0.5(3)            -
    Non-GAAP adjusted net earnings                    $11.3         $17.1
    

    
    Outstanding shares used in
     per share calculations
        Basic                                    46,471,958    47,098,758
        Diluted                                  47,769,804    48,068,262
    

    
    Non-GAAP adjusted net
     earnings per share:
        Basic                                         $0.24         $0.36
        Diluted                                       $0.24         $0.35
    

    
     Reported net earnings per share:
        Basic                                         $0.25         $0.36
        Diluted                                       $0.24         $0.35
    


    
                                                   Six  fiscal months ended
                                                   October 1,   September 30,
                                                      2006           2007
                                                          (in millions,
                                                        except share and
                                                        per share amounts)
    Net earnings reconciliation
    As reported net earnings                    $     23.6     $     24.2
      Non-GAAP adjustments (net of tax):
        Restructuring charge                             -            7.1(1)
        Litigation settlement income                  (2.6)(2)          -
        Shelf registration statement
         and secondary offering
         and an abandoned acquisition                  0.5(3)         0.1(3)
    Non-GAAP adjusted net earnings
                                                $     21.5     $     31.4
    

    
    Outstanding shares used in
     per share calculations
        Basic                                   46,404,985     46,992,038
        Diluted                                 47,457,668     47,959,897
    

    
    Non-GAAP adjusted net
     earnings per share:
        Basic                                   $     0.46     $     0.67
        Diluted                                 $     0.45     $     0.65
    

    
    Reported net earnings per share:
        Basic                                   $     0.51     $     0.51
        Diluted                                 $     0.50     $     0.50
    

    
    (1)  Resulting from pre-tax charges of $0.4 million in the second fiscal
         quarter of 2008 and $10.3 million in the fiscal six months of 2008,
         primarily for severance costs related to staff reductions and other
         restructuring activities in Europe.
    (2)  Resulting from two favorable legal settlements, net of fees and
         expenses, recorded in the first and second fiscal quarters of 2007.
    (3)  Resulting from legal and professional fees related to a shelf
         registration statement and secondary offering, and an abandoned
         acquisition, recorded in the first fiscal quarter of 2008 and the
         second fiscal quarter of 2007.
    


    
                                   EnerSys
                             Summary of Earnings
                (In millions, except share and per share data)
                                 (Unaudited)
    

    
                                                    Fiscal quarter ended
                                                 October 1      September 30,
                                                   2006             2007
    

    
      Net sales                                 $    353.9      $     461.5
      Gross profit                                    77.7             92.0
      Operating expenses                              54.0             60.0
      Restructuring and other charges                    -              0.4
      Litigation settlement                           (1.0)               -
      Operating earnings                              24.7             31.5
      Earnings before income taxes                    16.8             23.7
      Net earnings                              $     11.5      $      16.8
    

    
    Net earnings per common share
      Basic                                     $     0.25      $      0.36
      Diluted                                   $     0.24      $      0.35
    Weighted average shares outstanding
      Basic                                     46,471,958       47,098,758
      Diluted                                   47,769,804       48,068,262
    

    
                                   EnerSys
                             Summary of Earnings
                (In millions, except share and per share data)
                                 (Unaudited)
    

    
                                                    Six fiscal months ended
                                                 October 1,     September 30,
                                                   2006             2007
    

    
      Net sales                                 $    713.0      $     891.3
      Gross profit                                   154.8            178.6
      Operating expenses                             108.3            117.5
      Restructuring and other charges                    -             10.3
      Litigation settlement income                    (3.8)               -
      Operating earnings                              50.3             50.8
      Earnings before income taxes                    34.6             34.4
      Net earnings                              $     23.6      $      24.2
    

    
    Net earnings per common share
      Basic                                     $     0.51      $      0.51
      Diluted                                   $     0.50      $      0.50
    

    
    Weighted average shares outstanding
      Basic                                     46,404,985        46,992,038
      Diluted                                   47,457,668        47,959,897
    
    EnerSys will host a conference call to discuss the Company's second
fiscal quarter 2008 financial results and provide an overview of the business.
 The call will conclude with a question and answer session.
    The call, scheduled for Thursday, November 8, 2007, 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, November 8, 2007
     Time:                         9:00 a.m. Eastern Time
     Via Internet:                 http://www.enersys.com
     Domestic Call-In Number:      866-831-6247
     International Dial-In Number: 617-213-8856
     Passcode:                     35669119
    
    A replay of the conference call will be available from 11:00 a.m. on
November 8, 2007, through midnight on December 7, 2007.
    
     Via Internet:                 http://www.enersys.com
     Domestic Call-In Number:      888-286-8010
     International Dial-In Number: 617-801-6888
     Passcode:                     28935562
    
    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.
    
    About EnerSys
    
    EnerSys, the world leader in stored energy solutions for industrial
applications, manufactures, distributes and services reserve power and motive
power batteries, chargers, power equipment, and battery accessories to
customers worldwide.  Reserve power batteries are used in the
telecommunications and utility industries, uninterruptible power suppliers,
and numerous applications requiring standby power.  Motive power batteries are
utilized in electric forklift trucks and other commercial electric powered
vehicles.  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
http://www.enersys.com.




For further information:

For further information: Richard Zuidema, Executive Vice President of 
EnerSys, +1-800-538-3627

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