EnerSys (ENS) filed Quarterly Report for the period ended 2009-09-27.
EnerSys is a global leader in stored energy solutions for industrial applications. They complement their extensive line of motive power reserve power and specialty batteries with a full range of integrated services and systems. Enersys has a market cap of $1.07 billion; its shares were traded at around $22.35 with a P/E ratio of 12.9 and P/S ratio of 0.6.
Highlight of Business Operations:
Our operating results for the six fiscal months of 2010 reflect some of the benefits of those actions with the remainder to be experienced in future periods. We believe that these restructuring actions will have a favorable pre-tax earnings impact of approximately $33 million, or $0.48 per share, on an annualized basis when fully implemented by the end of fiscal 2011.
Also, immediately following the closing of the $172.5 million Convertible Notes issue, we commenced refinancing the outstanding combined balance of the senior secured Term Loan B and our existing revolving credit facility of $300 million, with a new $350 million senior secured facility comprising a $225 million Term A Loan and a new $125 million revolving credit facility. Our solid performance in earnings and cash flow during fiscal 2009 provided us with the opportunity to repurchase 1.8 million of our outstanding common shares at a cost of $19.8 million, which we expect will improve our future earnings per share performance.
In addition, as of September 27, 2009, we believe we have a sound capital structure and substantial liquidity for our current operations, with $219 million of cash and short term investments, approximately $130 million of undrawn, committed credit lines, and over $130 million of uncommitted credit lines. We believe that we have the financial resources to weather the current economic downturn and the capital available to remain active in pursuing further acquisition opportunities.
Net sales decreased $159.5 million or 30.3% in the second fiscal quarter of 2010 and decreased $411.2 million or 36.8% in the six fiscal months of 2010 over the comparable periods in fiscal 2009. Declining foreign currencies, primarily the euro compared to the U.S. dollar, resulted in a 3% decrease in net sales in the second fiscal quarter of 2010 and a 4% decrease in the six fiscal months of 2010, over the comparable periods in fiscal 2009. The euro exchange rate to the U.S. dollar averaged 1.44 ($/ €) in the second fiscal quarter of 2010 and 1.41 ($/ €) in the six fiscal months of 2010, compared to 1.50 ($/ €) in the second fiscal quarter of 2009 and 1.54 ($/ €) in the six fiscal months of 2009.
Sales in our motive power segment in the second fiscal quarter and six fiscal months of 2010, decreased $111.4 million or 39.7% and $287.2 million or 46.8%, respectively, compared to the comparable periods of the prior year. Our motive power segment experienced the effects of the global economic decline with a decrease of approximately 31% in organic volume in the second fiscal quarter of 2010. The motive power segment also experienced a 6% reduction in selling prices and a 3% decrease from the effects of declining foreign currencies, compared to the comparable quarter of the fiscal 2009. In the six fiscal months of 2010, organic volume reduction was approximately 37% with selling prices decreasing by 6% and declining foreign currencies contributing 4%.
Our Europe region’s revenue decreased $98.1 million or 36.8% in the second fiscal quarter of 2010, as compared to the second fiscal quarter of 2009, primarily due to lower organic volume which contributed approximately a 25% reduction. Declining European currencies resulted in approximately a 5% reduction, and price reductions contributed approximately 7% to the decline. Our Europe region’s revenue decreased $262.1 million or 44.7% in the six fiscal months of 2010, as compared to the six fiscal months of 2009, primarily due to lower organic volume which contributed approximately a 31% reduction. Declining European currencies resulted in approximately a 7% reduction, and price reductions contributed approximately 7% to the decline.
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