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Sellersville, PA, United States, 2009/08/07 - EnerSys (NYSE: ENS) the world’s largest manufacturer, marketer and distributor of industrial batteries, today announced results for its first fiscal quarter of 2010, which ended on June 28, 2009.
Net earnings for the first fiscal quarter of 2010 were $8.4 million or $0.17 per diluted share, including the unfavorable highlighted charges of $0.06 per share impact from the $2.5 million, $3.5 million pre-tax, charge for our restructuring plans and the $0.3 million, $0.4 million pre-tax, expense related to potential acquisition activities.
This compares to diluted net earnings per share of $0.50 for the first fiscal quarter of 2009, which included favorable highlighted credits of $0.03 per share or $1.3 million, ($0.1) million pre-tax.
Adjusted net earnings for the first fiscal quarter of 2010, on a non-GAAP basis, were $0.23 per diluted share. This compares to our previous guidance of $0.13 to $0.17 per diluted share and to the prior year first quarter of $0.47 per diluted share on an adjusted and restated non-GAAP basis. These earnings were achieved despite the anticipated decline in revenue, which was partially offset by the positive effects of our cost reduction activities and further reductions in commodity costs, net of pricing. Please refer to the section included herein under the heading “Reconciliation of Non-GAAP Financial Measures” for a discussion of the Company’s use of non-GAAP adjusted financial information.
Net sales for the first fiscal quarter of 2010 were $340.3 million, a decrease of 42.5% from the prior year first fiscal quarter net sales of $592.1 million and a 13.5% sequential quarterly decrease from the fourth fiscal quarter of 2009’s net sales of $393.2 million. The 42.5% decline was attributed to a 32% decline in organic volume, 6% from weaker foreign currencies, primarily the euro, and 5% from reduced pricing related to lower commodity costs. The decline in organic volume was a direct result of reduced end-user demand caused by the global economic recession.
“As anticipated, we experienced a sequential quarterly decline in sales, which is a reflection of current economic conditions. However, as a result of our continued strong execution of our business plan, including our cost reduction efforts, we reported adjusted earnings per diluted share of $0.23 for our first fiscal quarter, which exceeded our previous earnings guidance of $0.13 to $0.17 per share,” said John D. Craig, chairman, president and chief executive officer of EnerSys. “There are several positive developments in our business. Recently, we have experienced stable incoming order rates, which lead us to believe that we may have reached the bottom of the declining order patterns we had been experiencing. Also, we ended our first quarter with cash and short term investments of $218 million, an increase of $55 million over the previous quarter end. Finally, our restructuring programs remain on schedule to achieve the targeted savings of $33 million per year when fully implemented.”
Craig added, “Our second quarter guidance for non-GAAP adjusted net earnings per diluted share will be between $0.25 and $0.29, which excludes an expected charge of $0.06 per diluted share from our ongoing restructuring and acquisition activities.”
Reconciliation of Non-GAAP Financial Measures
This press release contains financial information determined by methods other than in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). EnerSys' management uses the non-GAAP measure “adjusted net earnings” in their analysis of the Company's performance. This measure, as used by EnerSys in past quarters and years, adjusts net earnings determined in accordance with GAAP to reflect changes in financial results associated with the Company's restructuring initiatives and highlighted charges and credits. Management believes the presentation of this financial measure reflecting these non-GAAP adjustments provides important supplemental information in evaluating the operating results of the Company as distinct from results that include items that are not directly related to operating unit performance and are unusual in nature and, accordingly, are not indicative of ongoing operating results. Management believes these charges or credits are not valid measures of the performance of the Company’s underlying business. This non-GAAP disclosure has limitations as an analytical tool, should not be viewed as a substitute for net earnings determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies. Management believes that this non-GAAP supplemental information will be helpful in understanding the Company's ongoing operating results. This supplemental presentation should not be construed as an inference that the Company's future results will be unaffected by similar adjustments to net earnings determined in accordance with GAAP.