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EnerSys Reports Preliminary 4th Quarter, Full Year Fiscal 2018 Results

Net earnings attributable to EnerSys stockholders for the fourth quarter of fiscal 2017 were $33.8 million, or 76 cents per diluted share, which included an unfavorable highlighted net of tax impact of $22.8 million or 52 cents per share.

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EnerSys has announced preliminary results for its fourth quarter and full year of fiscal 2018, which ended on March 31, 2018.

Net earnings attributable to EnerSys stockholders for the fourth quarter of fiscal 2018 are expected to be $54 million, or $1.27 per diluted share, including a favorable highlighted net of tax impact of $1.5 million or 3 cents per share, reconciling non-GAAP adjusted financial measures to reported amounts. The $1.5 million net of tax impact includes a tax benefit of $9.6 million for the release of a foreign valuation allowance, partially offset by a $4.1 million tax expense related to the recently enacted Tax Cuts and Jobs Act.

Net earnings attributable to EnerSys stockholders for the fourth quarter of fiscal 2017 were $33.8 million, or 76 cents per diluted share, which included an unfavorable highlighted net of tax impact of $22.8 million or 52 cents per share.

Excluding these items, Adjusted Net earnings per diluted share for the fourth quarter of fiscal 2018, on a non-GAAP basis, are expected to be $1.24, which meets the guidance of $1.20 to $1.24 per diluted share given by the company on Feb. 7. These earnings compare to the prior year fourth quarter Adjusted Net earnings of $1.28 per diluted share.

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Net sales for the fourth quarter of fiscal 2018 were $683 million, an increase of 9 percent from the prior year fourth quarter net sales of $626.8 million and a 4 percent sequential quarterly increase from the third quarter of fiscal 2018 net sales of $658.9 million. The increase in the current quarter compared to the prior year quarter was the result of a 5 percent increase in foreign currency translation impact, 3 percent increase in pricing and a 1 percent increase in organic volume. The 4 percent sequential quarterly increase was due to a 2 percent increase in foreign currency translation impact and a 1 percent increase in each organic volume and pricing.

Net earnings for the 12 months of fiscal 2018 are expected to be $119.6 million, or $2.77 per diluted share, including an unfavorable net of tax impact of $80.9 million or $1.88 per diluted share, reconciling non-GAAP adjusted financial measures to reported amounts. The $80.9 million net of tax impact includes an estimated net tax expense of $81.4 million comprised of a one-time transition tax expense of $97.5 million, a tax benefit related to the remeasurement of U.S deferred taxes of $14.1 million, and a tax benefit of $2 million related to the reduction of the fiscal 2018 effective federal tax rate of 31.5 percent, on account of the Tax Act.

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Net earnings for the 12 months of fiscal 2017 were $160.2 million, or $3.64 per diluted share, which included an unfavorable net of tax impact of $48.9 million or $1.11 per share from highlighted items described in further detail in the tables shown below.

Adjusted Net earnings for the 12 months of fiscal 2018, on a non-GAAP basis, are expected to be $4.65 per diluted share. This compares to the prior-year 12 months Adjusted Net earnings of $4.75 per diluted share.

Net sales for the 12 months of fiscal 2018 were $2,581.8 million, an increase of 9 percent from the net sales of $2,367.1 million in the comparable period in fiscal 2017. This increase was the result of a 4 percent increase in pricing, a 3 percent increase in organic volume and a 2 percent increase in foreign currency translation impact.

“I am pleased with our fourth quarter performance and specifically in the Americas where we are experiencing strong demand for our thin plate pure lead batteries as customers recognize the value of these products,” said David Shaffer, president and CEO of EnerSys. “Premium product sales in the fourth fiscal quarter exceeded 40 percent for the first time. Also, while commodities, especially lead, continued to rise during a majority of our fourth quarter, the spot rate has since declined over 10 percent. This reduction in commodity costs will benefit our second fiscal quarter results. Selling prices should hold steady or even rise, allowing for margin improvement for our second fiscal quarter. As I have stated previously, as lead costs start to decline, we are able to recover previous increases. During fiscal 2018 we were able to fund investment in new product development and Digital Core with record cost savings of nearly $25 million. Our first quarter of fiscal 2019 guidance for non-GAAP adjusted net earnings per diluted share is $1.15 to $1.19, which excludes an expected charge of $0.06 from our restructuring programs, ERP system implementation and acquisition expenses.”

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