ENERSYS READING, Pa., May 31, 2016 /PRNewswire/ -- EnerSys (NYSE: ENS) the global leader in stored energy solutions for industrial applications, announced today results for its fourth quarter and full year of fiscal 2016, which ended on March 31, 2016.
Net earnings attributable to EnerSys stockholders ("Net earnings") for the fourth quarter of fiscal 2016 were $9.3 million, or $0.21 per diluted share, including an unfavorable highlighted net of tax impact of $36.2 million or $0.82 per share from non-cash charges relating to impairment of goodwill and other assets, as well as, cash and non-cash charges or credits from our restructuring plans and other highlighted items described in further detail below.
The Net earnings of $0.21 per diluted share compares to Net earnings of $0.57 per diluted share for the fourth quarter of fiscal 2015, which included an unfavorable highlighted net of tax impact of $27.2 million or $0.58 per share from non-cash charges relating to impairment of goodwill and other assets, as well as, cash and non-cash charges or credits from our restructuring plans and other highlighted items.
Excluding these highlighted items, adjusted Net earnings per diluted share for the fourth quarter of fiscal 2016, on a non-GAAP basis, were $1.03, which would exceed the guidance of $0.98 to $1.02 per diluted share given by the Company on January 28, 2016. These earnings compare to the prior year fourth quarter adjusted Net earnings of $1.15 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 include tables reconciling GAAP and non-GAAP adjusted financial measures for the quarters and fiscal years ended March 31, 2016 and 2015.
Net sales for the fourth quarter of fiscal 2016 were $611.4 million, a decrease of 3% from the prior year fourth quarter net sales of $629.9 million and a 7% sequential quarterly increase from the third quarter of fiscal 2016 net sales of $573.6 million. The 3% decrease compared to prior year quarter was largely the result of a 2% decrease each in organic volume and foreign currency translation impact, partially offset by an increase of 1% from acquisitions.
The Company's operating results for its business segments for the fourth quarters of fiscal 2016 and 2015 are as follows:
Quarter ended
($ millions)
March 31, 2016 March 31, 2015
Net sales by
segment
Americas $330.2 $344.0
EMEA 204.5 231.2
Asia 76.7 54.7
Total net
sales $611.4 $629.9
====== ======
Operating
earnings
Americas $49.8 $42.6
EMEA 21.4 30.0
Asia (0.7) 0.6
Restructuring
and other
exit
charges -
Americas (0.6) -
Restructuring
and other
exit
charges -
EMEA (4.8) (3.4)
Restructuring
charges -
Asia (0.5) (2.0)
Impairment
of goodwill
and
indefinite-
lived
intangibles
- Americas (33.0) (23.1)
Goodwill and
fixed
assets
impairment
charge -
EMEA (3.3) (0.8)
ERP system
implementation
-Americas (1.3) (0.6)
Charges
relating to
sale of
facility -
Asia (0.9) -
Acquisition
activity
expense -
Americas (0.1) -
Acquisition
activity
expense -
Asia (0.1) (0.3)
---- ----
Total
operating
earnings $25.9 $43.0
===== =====
EMEA - Europe, Middle East and Africa
Net earnings for the twelve months of fiscal 2016 were $136.2 million, or $2.99 per diluted share, including an unfavorable net of tax impact of $42.2 million or $0.94 per share from non-cash charges relating to impairment of goodwill and other assets, as well as, cash and non-cash charges or credits from our restructuring plans and other highlighted items.
Net earnings for the twelve months of fiscal 2015 were $181.2 million, or $3.77 per diluted share, including an unfavorable impact from highlighted charges of $26.5 million or $0.55 per share from non-cash charges relating to impairment of goodwill and other assets, as well as, cash and non-cash charges or credits from our restructuring plans and other highlighted items.
Adjusted Net earnings for the twelve months of fiscal 2016, on a non-GAAP basis, were $3.93 per diluted share. This compares to the prior year twelve months adjusted Net earnings of $4.32 per diluted share.
Net sales for the twelve months of fiscal 2016 were $2,316.2 million, a decrease of 8% compared to the net sales of $2,505.5 million in fiscal 2015. The 8% decrease was the result of a 7% decrease due to foreign currency translation impact and a 2% decrease in organic volume, partially offset by a 1% increase from acquisitions.
The impairment charges described above resulted from our annual goodwill impairment testing and these charges reflect that certain reporting units have projected cash flows that are insufficient to support their existing carrying values for goodwill and other indefinite-lived assets.
The Company's operating results for its business segments for the twelve months of fiscal years 2016 and 2015 are as follows:
Fiscal year ended
($ millions)
March 31, 2016 March 31, 2015
-------------- --------------
Net sales
by
segment
Americas $1,276.0 $1,322.4
EMEA 787.4 948.8
Asia 252.8 234.3
Total net
sales $2,316.2 $2,505.5
======== ========
Operating
earnings
Americas $187.1 $168.7
EMEA 75.6 112.5
Asia 1.1 11.1
Restructuring
charges
-
Americas (2.1) -
Restructuring
and
other
exit
charges
-EMEA (9.4) (7.5)
Restructuring
charges
-Asia (1.4) (3.9)
Impairment
of
goodwill
and
indefinite-
lived
intangibles
-
Americas (33.0) (23.1)
Impairment
of
goodwill
and
fixed
assets-
EMEA (3.3) (0.8)
Competition
investigations
and
related
legal
charges
-EMEA (4.0) -
Reversal
of legal
accrual,
net of
fees -
Americas 0.8 16.2
Gain on
sale of
facility
-Asia 3.4 -
ERP
system
implementation
-
Americas (4.1) (2.0)
Stock-
based $0.7)
compensation
of
senior
executives
(Americas
$3.7,
EMEA
$2.7,
Asia - (7.1)
Acquisition
activity
expense
-
Americas (0.3) (0.2)
Acquisition
activity
expense
-Asia (0.4) (0.5)
Total
operating
earnings $210.0 $263.4
====== ======
"I remain optimistic about our global business," stated David M. Shaffer, Chief Executive Officer of EnerSys. "We are expanding our premium products offering that provide the best value to our customers while continuing to focus on cost reductions."
Mr. Shaffer added, "We maintain our previously announced guidance for our first quarter of fiscal 2017 for adjusted net earnings per diluted share of between $1.08 and $1.12, which excluded an expected charge of $0.04 from our ongoing restructuring programs and acquisition expenses."
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 other highlighted charges and income items. 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 indicative of ongoing operating results; in particular, those charges that the Company incurs as a result of restructuring activities, impairment of goodwill and indefinite-lived intangibles and other assets and those charges and credits that are not directly related to operating unit performance, such as fees and expenses related to acquisition activities, stock-based compensation of senior executives, significant legal proceedings, ERP system implementation and tax valuation allowance changes. 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 a helpful measure of the performance of our underlying business particularly in light of their unpredictable nature. 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. Non-GAAP adjusted 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
-------------
March 31, March 31,
2016 2015
---- ----
(in millions, except share and per share
amounts)
Net Earnings reconciliation
As reported Net Earnings $9.3 $26.5
Non-GAAP adjustments, net of tax:
Restructuring charges 5.3 (1) 5.1 (1)
Impairment of goodwill, indefinite-
lived intangibles and fixed assets 32.1 (2) 20.7 (2)
ERP system implementation 0.8 (3) 0.4 (3)
Charges relating to sale of facility 1.1 (6) -
Acquisition activity expense 0.1 (7) 0.2 (7)
Net tax expense - 0.8 (8)
Noncontrolling partner's share of
impairment and exit charges (3.2) (9) -
Non-GAAP adjusted Net Earnings $45.5 $53.7
===== =====
Outstanding shares used in per share
calculations
Basic 43,533,985 44,203,385
========== ==========
Diluted 44,158,541 46,579,230
========== ==========
Non-GAAP adjusted Net Earnings per
share:
Basic $1.05 $1.21
===== =====
Diluted $1.03 $1.15
===== =====
Reported Net Earnings per share:
Basic $0.21 $0.60
===== =====
Diluted $0.21 $0.57
===== =====
Dividends per common share $0.175 $0.175
====== ======
Quarter ended
-------------
March 31, March 31,
2016 2015
---- ----
Pre-tax Net of tax Pre-tax Net of tax
------- ---------- ------- ----------
($ millions) ($ millions)
(1) Restructuring
charges -Americas $0.6 $0.4 $ - $ -
(1) Restructuring
and other exit
charges -EMEA 4.8 4.5 3.4 3.1
(1) Restructuring
charges -Asia 0.5 0.4 2.0 2.0
(2) Impairment of
goodwill and
indefinite-lived
intangibles -
Americas -
(Purcell and
Quallion) 33.0 28.8 23.1 19.9
(2) Goodwill and
fixed assets
impairment charge -
EMEA -(South
Africa joint
venture) 3.3 3.3 0.8 0.8
(3) ERP system
implementation -
Americas 1.3 0.8 0.6 0.4
(6) Charges relating
to sale of facility
-Asia 0.9 1.1 - -
(7) Acquisition
activity expense -
Americas 0.1 - - -
(7) Acquisition
activity expense -
Asia 0.1 0.1 0.3 0.2
(8) Net tax expense
-Asia - - 0.8 0.8
(9) Noncontrolling
partner's share of
impairment and exit
charges -EMEA -
(South Africa joint
venture) - (3.2) - -
Total Non-GAAP
adjustments $44.6 $36.2 $31.0 $27.2
===== ===== ===== =====
EMEA -
Europe,
Middle
East and
Africa
Fiscal year ended
March 31, March 31,
2016 2015
---- ----
(in millions, except share and per share
amounts)
Net Earnings reconciliation
As reported Net Earnings $136.2 $181.2
Non-GAAP adjustments, net of tax:
Restructuring charges 10.6 (1) 9.7 (1)
Impairment of goodwill, indefinite-
lived intangibles and fixed assets 32.1 (2) 20.7 (2)
Legal proceedings charge /(reversal
of legal accrual, net of fees) 2.9 (3) (9.9) (3)
Gain on disposition of equity interest
in Altergy - (2.0) (3)
ERP system implementation 2.5 (4) 1.3 (4)
Stock-based compensation of senior
executives - 5.3 (5)
Gain on sale of facility (2.2) (6) -
Acquisition activity expense 0.5 (7) 0.6 (7)
Net tax expense (benefit) (1.0) (8) 0.8 (8)
Noncontrolling partner's share of
impairment and exit charges (3.2) (9) -
---- ---
Non-GAAP adjusted Net Earnings $178.4 $207.7
====== ======
Outstanding shares used in per share
calculations
Basic 44,276,713 45,606,317
========== ==========
Diluted 45,474,130 48,052,729
========== ==========
Non-GAAP adjusted Net Earnings per
share:
Basic $4.03 $4.55
===== =====
Diluted $3.93 $4.32
===== =====
Reported Net Earnings per share:
Basic $3.08 $3.97
===== =====
Diluted $2.99 $3.77
===== =====
Dividends per common share $0.70 $0.70
===== =====
The following table provides the regional allocation of the non-GAAP adjustments shown in the reconciliation above:
Fiscal year ended
-----------------
March 31, 2016 March 31, 2015
-------------- --------------
Pre-tax Net of tax Pre-tax Net of tax
------- ---------- ------- ----------
($ millions) ($ millions)
(1) Restructuring -
Americas $2.1 $1.3 $ - $ -
(1) Restructuring
and other exit
charges -EMEA 9.4 8.0 7.5 6.3
(1) Restructuring
charges- Asia 1.4 1.3 3.9 3.4
(2) Impairment of
goodwill and
indefinite-lived
intangibles -
Americas -
(Purcell and
Quallion) 33.0 28.8 23.1 19.9
(2) Goodwill and
fixed assets
impairment charge -
EMEA -(South
Africa joint
venture) 3.3 3.3 0.8 0.8
(3) Competition
investigations and
related legal
charges -EMEA 4.0 3.4 - -
(3) Reversal of
legal accrual, net
of fees -Americas (0.8) (0.5) (16.2) (9.9)
(3) Gain on
disposition of
equity interest in
Altergy -Americas - - (2.0) (2.0)
(4) ERP system
implementation -
Americas 4.1 2.5 2.0 1.3
(5) Stock-based
compensation of
senior executives -
Americas - - 3.7 2.8
(5) Stock-based
compensation of
senior executives -
EMEA - - 2.7 2.0
(5) Stock-based
compensation of
senior executives -
Asia - - 0.7 0.5
(6) Gain on sale of
facility -Asia (3.4) (2.2) - -
(7) Acquisition
activity expense -
Americas 0.3 0.2 0.2 0.2
(7) Acquisition
activity expense -
Asia 0.4 0.3 0.5 0.4
(8) Tax benefit
related to stock-
based compensation
of senior
executives - (1.0) - -
(8) Net tax expense
-Asia - - 0.8 0.8
(9) Noncontrolling
partner's share of
impairment and exit
charges -EMEA -
(South Africa joint
venture) - (3.2) - -
Total Non-GAAP
adjustments $53.8 $42.2 $27.7 $26.5
===== ===== ===== =====
Summary of Earnings (Unaudited)
(In millions, except share and per share data)
Quarter ended
-------------
March 31, 2016 March 31, 2015
-------------- --------------
Net
sales $611.4 $629.9
Gross
profit 160.5 158.5
Operating
expenses 91.5 86.2
Restructuring
charges 5.9 5.4
Impairment
of
goodwill,
indefinite-
lived
intangibles
and
fixed
assets 36.3 23.9
Charges
relating
to
sale
of
facility 0.9 -
Operating
earnings 25.9 43.0
Earnings
before
income
taxes 17.2 39.8
Net
earnings
attributable
to
EnerSys
stockholders $9.3 $26.5
==== =====
Net
earnings
per
common
share
attributable
to
EnerSys
stockholders:
Basic $0.21 $0.60
===== =====
Diluted $0.21 $0.57
===== =====
Dividends
per
common
share $0.175 $0.175
====== ======
Weighted-
average
number
of
common
shares
used
in
per
share
calculations:
Basic 43,533,985 44,203,385
========== ==========
Diluted 44,158,541 46,579,230
========== ==========
Fiscal year ended
-----------------
March 31, 2016 March 31, 2015
-------------- --------------
Net
sales $2,316.2 $2,505.5
Gross
profit 611.7 640.9
Operating
expenses 352.7 358.4
Restructuring
charges 12.9 11.4
Impairment
of
goodwill,
indefinite-
lived
intangibles
and
fixed
assets 36.3 23.9
Legal
accrual
/
(reversal
of
legal
accrual,
net
of
fees) 3.2 (16.2)
Gain
on
sale
of
facility (3.4) -
Operating
earnings 210.0 263.4
Earnings
before
income
taxes 182.0 249.3
Net
earnings
attributable
to
EnerSys
stockholders $136.2 $181.2
====== ======
Net
earnings
per
common
share
attributable
to
EnerSys
stockholders:
Basic $3.08 $3.97
===== =====
Diluted $2.99 $3.77
===== =====
Dividends
per
common
share $0.70 $0.70
===== =====
Weighted-
average
number
of
common
shares
used
in
per
share
calculations:
Basic 44,276,713 45,606,317
========== ==========
Diluted 45,474,130 48,052,729
========== ==========
EnerSys also announced that it will host a conference call to discuss the Company's fourth quarter and fiscal year 2016 financial results and provide an overview of the business. The call will conclude with a question and answer session.
The call, scheduled for Wednesday, June 1, 2016 at 9:00 a.m., Eastern Time, will be hosted by David M. Shaffer, 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 web site at http://www.enersys.com.
The conference call information is:
Date: Wednesday, June 1, 2016
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: 60074442
A replay of the conference call will be available from 12:30 p.m. on June 1, 2016 through midnight on July 1, 2016.
The replay information is:
Via Internet: http://www.enersys.com
Domestic Replay Number: 855-859-2056
International Replay Number: 404-537-3406
Passcode: 60074442
EDITOR'S NOTE: EnerSys, the global leader in stored energy solutions for industrial applications, manufactures and distributes reserve power and motive power batteries, battery chargers, power equipment, battery accessories and outdoor equipment enclosure solutions to customers worldwide. Motive power batteries and chargers are utilized in electric forklift trucks and other commercial electric powered vehicles. Reserve power batteries are used in the telecommunication and utility industries, uninterruptible power supplies, and numerous applications requiring stored energy solutions including medical, aerospace and defense systems. Outdoor equipment enclosure products are utilized in the telecommunication, cable, utility, transportation industries and by government and defense customers. 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, 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, 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 either its cash dividend or its stock buy back programs, are forward-looking statements within the meaning of the Reform Act. The forward-looking statements are based on management's current views and assumptions regarding future events and operating performance, and are inherently subject to significant business, economic, and competitive uncertainties and contingencies and changes in circumstances, many of which are beyond 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, 2016. No undue reliance should be placed on any forward-looking statements.
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SOURCE EnerSys
