EnerSys Inc. (EnerSys), a US-based manufacturer, marketer and distributor of industrial batteries, expects net sales of $393.2 million for the fourth quarter of fiscal 2009, down 32.4%, compared with the net sales of $581.9 million in the year-ago quarter. It also expects net earnings of $84.6 million, or $1.71 per diluted share, for the fourth quarter of fiscal 2009, compared with the net earnings of $59.7 million, or $1.22 per diluted share, in the year-ago quarter.
Adjusted net earnings for the quarter, on a non-GAAP basis, are expected to be $0.36 per diluted share. This compares to the guidance the company gave on February 4, 2009 of $0.30 to $0.34 and to the prior year fourth quarter of $0.42, all per diluted share and on an adjusted, non-GAAP basis. These earnings were achieved in spite of a significant decline in revenue and were primarily due to the positive effects of the company’s cost reduction activities and further reductions in commodity costs, net of pricing. The non-GAAP adjusted guidance given in February excluded an estimated $17.5 million pre-tax charge for restructuring actions.
Excluding the highlighted charges and income items in both fiscal years, non-GAAP adjusted net earnings for fiscal 2009 are expected to be $97.8 million or $1.98 per diluted share, a 41% increase when compared to non-GAAP adjusted net earnings for fiscal 2008 of $69.2 million or $1.42 per diluted share.
Net earnings for the 4th fiscal quarter of 2009 are expected to be $3.3 million or $0.07 per diluted share, including an unfavorable $0.29 per share impact from the $13.8 million ($19.2 million pre-tax) charge for the company’s restructuring plans. This compares to diluted net earnings per share of $0.39 for the 4th fiscal quarter of 2008, which included unfavorable highlighted charges of $0.03 per share or $1.3 million ($1.9 million pre-tax).
The 32% decline was attributed to a 19% decline in organic volume, 8% 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.
Highlighted charges include a favorable $0.17 per share from the $8.5 million ($11.3 million pre-tax) gain on sale of facilities, and total charges of $0.44 per share comprised of: $15.9 million ($22.4 million pre-tax) for the restructuring plans; $3.4 million ($5.2 million pre-tax) for fees related to the company’s debt refinancing; $2.2 million ($3.4 million pre-tax) for a legal proceedings charge; and $0.2 million ($0.3 million pre-tax) for fees related to secondary stock offerings.
The company anticipates releasing final 4th quarter and full year results for fiscal year 2009 on June 1, 2009.
In our fiscal fourth quarter we continued to successfully meet the challenges we face as a result of the weak global economic environment, said John D. Craig, chairman, president and chief executive officer of EnerSys. For our full fiscal year 2009 we expect to report record earnings, in spite of a significantly weaker second half of the year caused by the global recession. We do believe, however, that with our market leadership, strong capital structure and liquidity, we are well positioned to meet these challenges and that we will exit this recession a stronger company than we entered this recession. To that end, we have expanded our restructuring program announced on February 4, 2009 which we expect will yield an additional annual savings of $7 million with a cost of $9 million. When fully implemented, these two restructuring initiatives are expected to save $20 million per year or $0.29 per share. Our strong cash flow is continuing and we had over $160 million in cash and cash equivalents at the end of March to fund the capital and restructuring spending that will improve our operations.
Craig added, We anticipate that non-GAAP adjusted net earnings per diluted share for our first quarter of fiscal 2010 will be between $0.13 and $0.17 as we continue to experience lower sequential sales volume as a result of the ongoing economic slow-down. This excludes a charge of approximately $4.3 million ($6.2 million pre-tax) or $0.09 per diluted share from our ongoing European restructuring actions; but includes a non-cash increase in our convertible debt interest expense of $0.9 million ($1.3 million pre-tax) or $0.02 per diluted share, which will result from our required adoption of a new accounting standard.