Persistent Supply Chain Issues Produce Mixed Results for Enersys | Berks Regional News

BERN TWP., Pa. – EnerSys, the Canton of Bern manufacturer of energy storage solutions for industrial applications, set some records during its fiscal third quarter. Net sales, for one, were up 12% from net sales in the third quarter of fiscal 2021. That’s good, but it could have been better.

Although order rates continue to be strong, the company’s backlog reached $1.2 billion, double the usual level. The culprit, as has been the case in recent quarters, is shortages in the supply chain.

EnerSys also faced significant cost increases of over $30 million during the quarter, which it countered with its own aggressive price increases to offset the quarter’s immense inflationary impact.

The company appears to be phaseless. Speaking to analysts on the earnings webcast, David Shaffer, President and CEO, said: “We believe we have outperformed our competitors as we continue to maintain our market share.”

Despite its efforts to counter the headwinds of the current economic climate, EnerSys ended up with a decline in adjusted operating income which impacted all business segments. Earnings per share (EPS) also declined in the quarter compared to the prior year.

While the backlog has produced negative effects this quarter, it also bodes well for better results in the future. In a statement, Shaffer was optimistic.

“We continued to make substantial progress on our strategic technology and business development initiatives, including 5G power, transportation market share and next-generation Motive Power products, which collectively account for the majority of our growth. backlog. Our lithium technology continues to gain traction as we now have several lithium variants available for Motive Power and Energy Systems, we launched our Outback Mojave home energy storage lithium battery system and $46 million of the 117 million in orders Energy Systems received so far for the California Public Utilities Commission’s emergency power mandate was for lithium batteries.

Operating results

“Demand is robust across all of our businesses,” Shaffer continued, “and we expect that strength to continue into our next fiscal year.”

Net revenue for the third quarter of Fiscal 2022 was $844.0 million, an increase of 12.4% over revenue in the third quarter of the prior year of $751.1 million. It increased 6.7% sequentially from the second quarter of fiscal 2022 revenue of $791.4 million. The increase over the prior year quarter was the result of a 10% increase in organic volume resulting primarily from strong demand and the easing of the pandemic, as well as a 3% increase prices. The sequential increase was driven by a 5% increase in organic volume and a 3% increase in price, partially offset by a 1% decrease in the impact of currency translation.

Net sales for the quarter for Energy systems grew 14.2% to $85.2 million from $337.2 million in fiscal 2021 as 5G sales continue to increase. Energy systems, which combine enclosures, power conversion, power distribution and energy storage, are used in the broadband telecommunications and utility sectors, uninterruptible power supplies and many applications requiring power solutions. stored energy.

Shaffer observed, “Energy Systems’ margin improvements through pricing, contract manufacturing offshoring, product redesign and volume will continue to accelerate in the coming quarters with further growth. network power demand.

Motor force order rates have returned to normalized levels,” he continued, “and the business will benefit as forklift electrification efforts continue, shortages ease and we reduce our backlog of orders.

Motive Power net sales were $339.5 million compared to $304.4 million a year earlier, an 11.5% increase as higher-margin NexSys maintenance-free products continue to grow grow. Motive batteries and chargers are used in electric forklifts and other industrial electric vehicles.

Specialty Products net sales increased $9.8 million to $119.3 million from $109.5 million in fiscal 2021. Specialty batteries are used in aerospace and defense applications, large trucks road, automotive, medical and high-end security applications.

Shaffer commented, “Specialty’s significant growth in the third quarter was actually held back by supply shortages, which should help the company post an even stronger fourth quarter. As such, we expect the benefits of our robust demand, price actions, technology developments and supply mitigation strategies to show continued improvement over the coming quarters.

Net income for the third quarter of fiscal 2022 was $36.3 million, or $0.85 per diluted share. Net income for the third quarter of fiscal 2021 was $38.6 million, or $0.89 per diluted share.

Adjusted net earnings per diluted share for the third quarter of fiscal 2022, on a non-GAAP (generally accepted accounting principles) basis, was $1.01.

EnerSys also said it repurchased 1.5 million shares for $116 million since the start of the third quarter, bringing its year-to-date repurchases to 1.9 million shares for $148 million. The company has $42 million in buyout authorizations.

Additionally, the company said it expects adjusted diluted earnings per share to be between $1.11 and $1.21 in the fiscal fourth quarter.

EnerSys (ENS: NYSE) manufactures stored energy solutions for industrial applications. They complement an extensive range of motive power, reserve power and specialty batteries with a comprehensive range of integrated services and systems and worldwide sales and service outlets.

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