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Jul 02, 2023
EnerSys Q1 2024 Earnings Report
EnerSys reported record gross margin and EPS, driven by strong operating performance and benefits from the Inflation Reduction Act.
Key Takeaways
EnerSys reported a 1% increase in net sales to $909 million for Q1 2024. The company achieved a record gross margin of 26.4%, including benefits from Inflation Reduction Act tax credits, and a record EPS of $1.60. They reduced net leverage to 1.5X EBITDA with operating cash flow of $75 million.
Net sales increased by 1% to $909 million due to normalized customer inventory levels.
Record gross margin of 26.4%, including a $19 million benefit from Inflation Reduction Act tax credits.
Operating earnings increased by 78% to $89 million, and adjusted operating earnings increased by 65% to $107.2 million.
Record diluted EPS of $1.60, a 113% increase, and record adjusted diluted EPS of $1.89, a 64% increase.
EnerSys
EnerSys
EnerSys Revenue by Segment
Revenue by Segment
Energy Systems Revenue
CapyFin.comMotive Power Revenue
CapyFin.comSpecialty Revenue
CapyFin.com Forward Guidance
EnerSys expects adjusted diluted earnings per share in the range of $1.77 to $1.87 for Q2 2024, including $0.42 to $0.52 from IRC 45X tax benefits. Gross margin is expected to be in the range of 25.0% to 27.0%, including 150bps to 250bps from IRA credits. Capital expenditures for fiscal year 2024 are expected to be approximately $120 million.
Positive Outlook
- Adjusted diluted earnings per share in the range of $1.77 to $1.87, inclusive of $0.42 to $0.52 from IRC 45X tax benefits.
- Excluding the IRA credits, this represents an increase of approximately 22% over the prior year, at the midpoint, reflecting stable demand trends and a healthy backlog.
- Gross margin in the range of 25.0% to 27.0%, including 150bps to 250bps from IRA credits.
- Stable demand trends
- Healthy backlog
Challenges Ahead
- The IRS has not yet issued additional clarification guidance related to section 45X which could materially increase or decrease the quantity of our U.S. produced batteries that qualify for this credit.
- Continue to operate in a dynamic macro environment.
- Geopolitical tensions
- Higher interest rates
- Persisting inflation
Revenue & Expenses
Visualization of income flow from segment revenue to net income