• Net Sales: $853 million, down 6% from prior year.

• Gross Margin: 28%, improved by 120 basis points versus prior year.

• Adjusted Operating Earnings: $106 million, slightly lower than prior year.

• Adjusted EBITDA: $121 million, with a margin of 14.2%, up 70 basis points versus prior year.

• Adjusted EPS: $1.98 per share, an increase of 5% over prior year.

• Energy Systems Revenue: $361 million, declined 15% from prior year.

• Motive Power Revenue: $366 million, increased 4% from prior year.

• Specialty Revenue: $126 million, decreased 6% from prior year.

• Operating Cash Flow: Positive $10 million.

• Net Debt: $565 million, reduced by approximately $125 million from prior year.

• Dividend Increase: Quarterly dividend increased to $0.24 per share.

• Fiscal Year 2025 Revenue Guidance: $3,735 million to $3,885 million.

• Fiscal Year 2025 Adjusted EPS Guidance: $8.80 to $9.20 per share.

• Warning! GuruFocus has detected 5 Warning Sign with SPH.

Release Date: August 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• EnerSys (NYSE:ENS) delivered EPS at the midpoint of guidance and maintained strong pricing strategies.

• The company reported a healthy backlog with the first sequential increase in energy systems backlog in eight quarters.

• Motive Power segment showed strong performance with increased volumes and margins, driven by demand for maintenance-free offerings.

• EnerSys (NYSE:ENS) is making progress on strategic priorities, including the development of a domestic lithium plant and the acquisition of Bren-Tronics.

• The company increased its full-year fiscal 2025 revenue and EPS guidance, reflecting confidence in future performance.

Negative Points

• Revenue was slightly below the low-end of guidance due to uneven demand across key end markets.

• Gross margin was impacted by lower sales and a weaker product mix, particularly in high-margin power electronics.

• The specialty segment faced challenges with a dramatic softening in the Class 8 truck OEM market.

• Operating cash flow was affected by typical year-end payouts and delayed IRA monetization.

• EnerSys (NYSE:ENS) faces macroeconomic uncertainties, which could impact future demand and financial performance.

Q & A Highlights

Q: Can you explain the expected revenue growth in the second half of the fiscal year, particularly the $300 million increase from the first half? A: David Shaffer, CEO, explained that the growth is expected from the recovery in Energy Systems (ES), stability in Motive Power, and contributions from the Bren-Tronics acquisition. Andrea Funk, CFO, added that ES will see increased demand, particularly in wireless and data centers, while Motive Power will benefit from new product introductions and specialty will see growth from aftermarket and premium auto sectors.