EnerSys (ENS) Prelim. Q4, FY15 EPS Top Expectations

EnerSys (NYSE: ENS) announced preliminary results for its fourth quarter and full year of fiscal 2015, which ended on March 31, 2015.

Net earnings attributable to EnerSys stockholders ("Net Earnings") for the fourth quarter are expected to be $26.5 million, or $0.57 per diluted share, including an unfavorable highlighted net of tax impact of $0.58 per share from a non-cash charge of $20.7 million relating to impairment of goodwill and other indefinite lived assets, charges of $5.1 million for restructuring plans, $0.4 million for ERP system implementation, a tax valuation reserve of $0.8 million associated with restructuring and $0.2 million for fees related to acquisition activities.

The expected Net Earnings of $0.57 per diluted share compares to Net Earnings of $0.26 per diluted share for the fourth quarter of fiscal 2014, which included an unfavorable highlighted net of tax impact of $0.92 per share from a charge of $10.6 million for restructuring plans, legal proceedings charge of $35.7 million and $0.4 million for fees related to acquisition activities. Please note that these results are preliminary and while management expects them to be our final results, they could change.

Excluding these highlighted items, adjusted Net Earnings per diluted share for the fourth quarter of fiscal 2015, on a non-GAAP basis, are expected to be $1.15, which would exceed the guidance of $1.10 to $1.14 per diluted share given by the Company on February 4, 2015. These earnings compare to the prior year fourth quarter adjusted Net Earnings of $1.18 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 fourth quarter of fiscal 2015 were $629.9 million, a decrease of 5% from the prior year fourth quarter net sales of $665.2 million and a 3% sequential quarterly increase from the third quarter of fiscal 2015 net sales of $611.6 million. The 5% decrease was largely the result of a 9% decrease due to foreign currency translation impact partially offset by an increase of 3% in organic volume and a combined 1% increase from acquisitions and improved pricing.

*** The Street sees Q4 EPS of $1.12 and revenue of $634.7 million.

Net earnings for the twelve months of fiscal 2015 are expected to be $181.2 million, or $3.77 per diluted share, including an unfavorable impact from highlighted charges of $0.55 per share from a non-cash charge of $20.7 million relating to impairment of goodwill and other indefinite lived assets, charges of $9.7 million for restructuring plans, $1.3 million for ERP system implementation, $5.3 million for stock-based compensation of senior executives, a tax valuation reserve of $0.8 million associated with restructuring and $0.6 million for fees related to acquisition activities partially offset by a legal accrual reversal, net of professional fees of $9.9 million and gain of $2.0 million in connection with the disposition of our equity interest in Altergy Systems ("Altergy").

Net Earnings for the twelve months of fiscal 2014 were $150.3 million, or $3.02 per diluted share, and included an unfavorable net of tax impact from highlighted charges of $0.94 per share, due to a charge of $23.0 million for restructuring plans, legal proceedings charge of $35.7 million, write-off of goodwill and other non-operating assets of $8.9 million and $1.6 million for fees related to acquisition activities partially offset by a net tax credit for $22.1 million.

Adjusted Net Earnings per diluted share for the twelve months of fiscal 2015, on a non-GAAP basis, are expected to be $4.32 and compares to $3.96 per diluted share for the twelve months of fiscal 2014. 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 twelve months of fiscal 2015 were $2,505.5 million, an increase of 1% compared to the net sales of $2,474.4 million in fiscal 2014. The 1% increase was the result of a 2% increase in organic volume and a 3% increase from acquisitions partially offset by a 4% decrease due to foreign currency translation impact.

*** Consensus estimates call for FY15 EPS of $4.29 and revenue of $2.51 billion.

"Our full year adjusted Net Earnings per diluted share of $4.32 are the best annual earnings in our Company's history," stated John D. Craig, chairman and chief executive officer of EnerSys. "This was our fifth consecutive year of achieving record earnings in spite of experiencing over $100 million in sales decline due to the negative impact of foreign currency exchange rates. "

Mr. Craig added, "Our first quarter of fiscal 2016 guidance for adjusted Net Earnings per diluted share is between $1.00 and $1.04, which excludes an expected charge of $0.07 from our ongoing restructuring programs, ERP system implementation and acquisition expenses. Historically, we experience a sequential decline in revenue and earnings in our first fiscal quarter, which we expect will be the case this year."

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