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Dec 29, 2019
EnerSys Q3 2020 Earnings Report
EnerSys reported an increase in net sales, driven by acquisitions, but earnings were negatively impacted by a fire at a motive power facility.
Key Takeaways
EnerSys reported a 12% increase in net sales to $763.7 million for Q3 2020, driven by acquisitions, but net earnings decreased to $27.3 million, or $0.64 per diluted share, impacted by a fire at the Richmond, KY facility. Adjusted non-GAAP EPS was $1.04, below the company's guidance of $1.12 to $1.16. The company anticipates a recovery on business interruption coverage in Q4.
Net sales increased by 12% year-over-year to $763.7 million.
Net earnings decreased to $27.3 million, or $0.64 per diluted share.
Adjusted non-GAAP EPS was $1.04, below guidance.
Q3 results were impacted by a fire at the Richmond, KY motive power facility, resulting in approximately $30 million in lost revenue.
EnerSys
EnerSys
Forward Guidance
The company expects Q4 non-GAAP adjusted net earnings per diluted share to be between $1.43 and $1.47, excluding certain charges but including a business interruption recovery.
Positive Outlook
- Expected recovery on business interruption coverage of approximately $15 million, or $0.30 per diluted share, for lost sales.
- NorthStar integration is well underway.
- High speed line implementation is well underway.
- Confident about the positive impact that additional TPPL capacity will have.
- Opportunities in the Transportation, Systems, and premium Motive markets.
Challenges Ahead
- Q4 guidance excludes an expected charge of $0.25 primarily from highlighted items related to restructuring programs.
- Q4 guidance excludes amortization of Alpha's and NorthStar's identified intangible assets.
- Fire at the Richmond, KY facility impacted Q3 results.
- Anticipated negative impact on the third quarter from this fire by approximately $20 million in revenue.
- Impact was approximately $30 million in revenue due to complications in providing continuous electrical power to the facility during clean up and demolition.