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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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23-3058564
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Page
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 4.
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Item 6.
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PART I –
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FINANCIAL INFORMATION
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ITEM 1.
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FINANCIAL STATEMENTS
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September 27, 2015
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March 31, 2015
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||||
Assets
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Current assets:
|
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||||
Cash and cash equivalents
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$
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320,565
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$
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268,921
|
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Accounts receivable, net of allowance for doubtful accounts: September 27, 2015 - $9,610; March 31, 2015 - $7,562
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482,933
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518,165
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Inventories, net
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345,954
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337,011
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Deferred taxes
|
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32,898
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|
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31,749
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Prepaid and other current assets
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132,146
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77,572
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Total current assets
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1,314,496
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1,233,418
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Property, plant, and equipment, net
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359,862
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356,854
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Goodwill
|
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385,336
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369,730
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Other intangible assets, net
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164,662
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158,160
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Other assets
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53,154
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44,885
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Total assets
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$
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2,277,510
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$
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2,163,047
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Liabilities and Equity
|
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Current liabilities:
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Short-term debt
|
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$
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24,550
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$
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19,715
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Accounts payable
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219,365
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218,574
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|
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Accrued expenses
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216,869
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195,082
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Total current liabilities
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460,784
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433,371
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Long-term debt
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643,125
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495,936
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|
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Deferred taxes
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70,261
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99,398
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Other liabilities
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83,107
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81,616
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Total liabilities
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1,257,277
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1,110,321
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Commitments and contingencies
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Redeemable noncontrolling interests
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5,488
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6,956
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|
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Redeemable equity component of Convertible Notes
|
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—
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1,330
|
|
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Equity:
|
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||||
Preferred Stock, $0.01 par value, 1,000,000 shares authorized, no shares issued or outstanding at September 27, 2015 and at March 31, 2015
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—
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—
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Common Stock, $0.01 par value per share, 135,000,000 shares authorized; 54,106,340 shares issued and 44,389,824 shares outstanding at September 27, 2015; 53,664,639 shares issued and 44,068,588 shares outstanding at March 31, 2015
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545
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537
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Additional paid-in capital
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429,754
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525,967
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Treasury stock, at cost, 9,716,516 shares held as of September 27, 2015; 9,596,051 shares held as of March 31, 2015
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(370,293
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)
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(376,005
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)
|
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Retained earnings
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1,069,870
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997,376
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Accumulated other comprehensive loss
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(120,563
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)
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(108,975
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)
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Total EnerSys stockholders’ equity
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1,009,313
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1,038,900
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Nonredeemable noncontrolling interests
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5,432
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5,540
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Total equity
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1,014,745
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1,044,440
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Total liabilities and equity
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$
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2,277,510
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$
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2,163,047
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Quarter ended
|
||||||
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September 27, 2015
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September 28, 2014
|
||||
Net sales
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$
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569,134
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$
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629,927
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Cost of goods sold
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414,195
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467,387
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Gross profit
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154,939
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162,540
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|
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Operating expenses
|
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89,561
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96,910
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|
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Restructuring and other exit charges
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2,629
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1,810
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|
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Legal proceedings charge / (reversal of legal accrual, net of fees) - See Note 7
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3,201
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(16,233
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)
|
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Operating earnings
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59,548
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80,053
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|
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Interest expense
|
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5,020
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4,362
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|
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Other (income) expense, net
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736
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(3,407
|
)
|
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Earnings before income taxes
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53,792
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79,098
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|
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Income tax expense
|
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14,024
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22,548
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|
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Net earnings
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39,768
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56,550
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|
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Net earnings (losses) attributable to noncontrolling interests
|
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(257
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)
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234
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|
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Net earnings attributable to EnerSys stockholders
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$
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40,025
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$
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56,316
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Net earnings per common share attributable to EnerSys stockholders:
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|
||||
Basic
|
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$
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0.89
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$
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1.22
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Diluted
|
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$
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0.87
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$
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1.16
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Dividends per common share
|
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$
|
0.175
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$
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0.175
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Weighted-average number of common shares outstanding:
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|
|
||||
Basic
|
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44,944,027
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46,133,637
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|
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Diluted
|
|
46,005,399
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48,537,276
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|
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Six months ended
|
||||||
|
|
September 27, 2015
|
|
September 28, 2014
|
||||
Net sales
|
|
$
|
1,131,202
|
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$
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1,264,037
|
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Cost of goods sold
|
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825,848
|
|
|
938,920
|
|
||
Gross profit
|
|
305,354
|
|
|
325,117
|
|
||
Operating expenses
|
|
174,069
|
|
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185,969
|
|
||
Restructuring and other exit charges
|
|
3,847
|
|
|
3,639
|
|
||
Legal proceedings charge / (reversal of legal accrual, net of fees) - See Note 7
|
|
3,201
|
|
|
(16,233
|
)
|
||
Gain on sale of facility
|
|
(4,348
|
)
|
|
—
|
|
||
Operating earnings
|
|
128,585
|
|
|
151,742
|
|
||
Interest expense
|
|
11,367
|
|
|
9,246
|
|
||
Other (income) expense, net
|
|
1,431
|
|
|
(2,379
|
)
|
||
Earnings before income taxes
|
|
115,787
|
|
|
144,875
|
|
||
Income tax expense
|
|
28,085
|
|
|
39,210
|
|
||
Net earnings
|
|
87,702
|
|
|
105,665
|
|
||
Net earnings (losses) attributable to noncontrolling interests
|
|
(710
|
)
|
|
180
|
|
||
Net earnings attributable to EnerSys stockholders
|
|
$
|
88,412
|
|
|
$
|
105,485
|
|
Net earnings per common share attributable to EnerSys stockholders:
|
|
|
|
|
||||
Basic
|
|
$
|
1.98
|
|
|
$
|
2.27
|
|
Diluted
|
|
$
|
1.91
|
|
|
$
|
2.15
|
|
Dividends per common share
|
|
$
|
0.35
|
|
|
$
|
0.35
|
|
Weighted-average number of common shares outstanding:
|
|
|
|
|
||||
Basic
|
|
44,588,971
|
|
|
46,516,470
|
|
||
Diluted
|
|
46,380,887
|
|
|
49,131,757
|
|
|
|
Quarter ended
|
|
Six months ended
|
||||||||||||
|
|
September 27, 2015
|
|
September 28, 2014
|
|
September 27, 2015
|
|
September 28, 2014
|
||||||||
Net earnings
|
|
$
|
39,768
|
|
|
$
|
56,550
|
|
|
$
|
87,702
|
|
|
$
|
105,665
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
||||||||
Net unrealized (loss) gain on derivative instruments, net of tax
|
|
(4,444
|
)
|
|
76
|
|
|
(5,437
|
)
|
|
2,567
|
|
||||
Pension funded status adjustment, net of tax
|
|
315
|
|
|
181
|
|
|
638
|
|
|
366
|
|
||||
Foreign currency translation adjustment
|
|
(28,202
|
)
|
|
(50,458
|
)
|
|
(7,655
|
)
|
|
(53,015
|
)
|
||||
Total other comprehensive loss, net of tax
|
|
(32,331
|
)
|
|
(50,201
|
)
|
|
(12,454
|
)
|
|
(50,082
|
)
|
||||
Total comprehensive income
|
|
7,437
|
|
|
6,349
|
|
|
75,248
|
|
|
55,583
|
|
||||
Comprehensive loss attributable to noncontrolling interests
|
|
(1,048
|
)
|
|
(228
|
)
|
|
(1,576
|
)
|
|
(449
|
)
|
||||
Comprehensive income attributable to EnerSys stockholders
|
|
$
|
8,485
|
|
|
$
|
6,577
|
|
|
$
|
76,824
|
|
|
$
|
56,032
|
|
|
|
Six months ended
|
||||||
|
|
September 27, 2015
|
|
September 28, 2014
|
||||
Cash flows from operating activities
|
|
|
|
|
||||
Net earnings
|
|
$
|
87,702
|
|
|
$
|
105,665
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
27,851
|
|
|
28,366
|
|
||
Write-off of assets relating to restructuring
|
|
328
|
|
|
547
|
|
||
Derivatives not designated in hedging relationships:
|
|
|
|
|
||||
Net losses (gains)
|
|
294
|
|
|
(364
|
)
|
||
Cash proceeds
|
|
801
|
|
|
198
|
|
||
Provision for doubtful accounts
|
|
2,369
|
|
|
567
|
|
||
Deferred income taxes
|
|
(3,318
|
)
|
|
22,270
|
|
||
Non-cash interest expense
|
|
2,104
|
|
|
4,655
|
|
||
Stock-based compensation
|
|
10,338
|
|
|
17,059
|
|
||
Gain on sale of facility
|
|
(4,348
|
)
|
|
—
|
|
||
Gain on disposal of property, plant, and equipment
|
|
(13
|
)
|
|
(58
|
)
|
||
Reversal of legal accrual, net of fees - See Note 7
|
|
(799
|
)
|
|
(16,233
|
)
|
||
Gain on disposition of equity interest in Altergy - See Note 7
|
|
—
|
|
|
(2,000
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
Accounts receivable
|
|
40,899
|
|
|
(17,429
|
)
|
||
Inventories
|
|
(4,799
|
)
|
|
(40,304
|
)
|
||
Prepaid and other current assets
|
|
3,338
|
|
|
(3,910
|
)
|
||
Other assets
|
|
(1,195
|
)
|
|
1,163
|
|
||
Accounts payable
|
|
2,577
|
|
|
9,152
|
|
||
Accrued expenses
|
|
8,642
|
|
|
(67,909
|
)
|
||
Other liabilities
|
|
1,849
|
|
|
9,130
|
|
||
Net cash provided by operating activities
|
|
174,620
|
|
|
50,565
|
|
||
|
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
|
||||
Capital expenditures
|
|
(33,519
|
)
|
|
(27,513
|
)
|
||
Purchase of businesses
|
|
(39,079
|
)
|
|
—
|
|
||
Proceeds from sale of facility
|
|
9,179
|
|
|
—
|
|
||
Proceeds from disposal of property, plant, and equipment
|
|
780
|
|
|
103
|
|
||
Proceeds from disposition of equity interest in Altergy
|
|
—
|
|
|
2,000
|
|
||
Net cash used in investing activities
|
|
(62,639
|
)
|
|
(25,410
|
)
|
||
|
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
|
||||
Net increase (decrease) in short-term debt
|
|
5,787
|
|
|
(7,534
|
)
|
||
Proceeds from revolving credit borrowings
|
|
270,000
|
|
|
246,000
|
|
||
Repayments of revolving credit borrowings
|
|
(250,000
|
)
|
|
(251,000
|
)
|
||
Proceeds from long-term debt
|
|
300,000
|
|
|
150,000
|
|
||
Repayments of Convertible Notes
|
|
(172,266
|
)
|
|
(203
|
)
|
||
Repayments of long-term debt
|
|
(1,875
|
)
|
|
—
|
|
||
Deferred financing costs
|
|
(4,971
|
)
|
|
(1,076
|
)
|
||
Taxes paid related to net share settlement of equity awards, net of option proceeds
|
|
(15,285
|
)
|
|
(12,664
|
)
|
||
Excess tax benefits from exercise of stock options and vesting of equity awards
|
|
3,450
|
|
|
3,035
|
|
||
Purchase of treasury stock
|
|
(120,637
|
)
|
|
(120,938
|
)
|
||
Prepayment of accelerated stock repurchase
|
|
(60,000
|
)
|
|
—
|
|
||
Dividends paid to stockholders
|
|
(15,553
|
)
|
|
(16,156
|
)
|
||
Other
|
|
(45
|
)
|
|
(134
|
)
|
||
Net cash used in financing activities
|
|
(61,395
|
)
|
|
(10,670
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
1,058
|
|
|
(14,688
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
|
51,644
|
|
|
(203
|
)
|
||
Cash and cash equivalents at beginning of period
|
|
268,921
|
|
|
240,103
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
320,565
|
|
|
$
|
239,900
|
|
|
|
September 27, 2015
|
|
March 31, 2015
|
||||
Raw materials
|
|
$
|
82,935
|
|
|
$
|
82,954
|
|
Work-in-process
|
|
110,845
|
|
|
106,196
|
|
||
Finished goods
|
|
152,174
|
|
|
147,861
|
|
||
Total
|
|
$
|
345,954
|
|
|
$
|
337,011
|
|
|
|
Total Fair Value
Measurement
September 27,
2015
|
|
Quoted Price in
Active Markets
for Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Lead forward contracts
|
|
$
|
(5,739
|
)
|
|
$
|
—
|
|
|
$
|
(5,739
|
)
|
|
$
|
—
|
|
Foreign currency forward contracts
|
|
(1,070
|
)
|
|
—
|
|
|
(1,070
|
)
|
|
—
|
|
||||
Total derivatives
|
|
$
|
(6,809
|
)
|
|
$
|
—
|
|
|
$
|
(6,809
|
)
|
|
$
|
—
|
|
|
|
Total Fair Value
Measurement
March 31,
2015
|
|
Quoted Price in
Active Markets
for Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Lead forward contracts
|
|
$
|
(341
|
)
|
|
$
|
—
|
|
|
$
|
(341
|
)
|
|
$
|
—
|
|
Foreign currency forward contracts
|
|
4,155
|
|
|
—
|
|
|
4,155
|
|
|
—
|
|
||||
Total derivatives
|
|
$
|
3,814
|
|
|
$
|
—
|
|
|
$
|
3,814
|
|
|
$
|
—
|
|
|
|
September 27, 2015
|
|
|
|
March 31, 2015
|
|
|
||||||||||||||||
|
|
Carrying
Amount
|
|
|
|
Fair Value
|
|
|
|
Carrying
Amount
|
|
|
|
Fair Value
|
|
|
||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives
(1)
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
4,155
|
|
|
|
|
$
|
4,155
|
|
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Notes
(2)
|
|
$
|
300,000
|
|
|
|
|
$
|
290,250
|
|
|
(2)
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
Convertible Notes
(2) (3)
|
|
—
|
|
|
|
|
—
|
|
|
|
|
170,936
|
|
|
(3)
|
|
277,348
|
|
|
(2)
|
||||
Derivatives
(1)
|
|
6,809
|
|
|
|
|
6,809
|
|
|
|
|
341
|
|
|
|
|
341
|
|
|
|
(1)
|
Represents lead and foreign currency forward contracts.
|
(2)
|
The fair value amount of the Notes at
September 27, 2015
and the Convertible Notes (as defined in Note 9) at
March 31, 2015
represent the trading value of the instruments.
|
(3)
|
The carrying amount of the Convertible Notes at
March 31, 2015
represent the
$172,266
principal balance, less the unamortized debt discount (see Note 9 for further details).
|
|
|
Derivatives and Hedging Activities Designated as Cash Flow Hedges
|
|
Derivatives and Hedging Activities Not Designated as Hedging Instruments
|
||||||||||||
|
|
September 27, 2015
|
|
March 31, 2015
|
|
September 27, 2015
|
|
March 31, 2015
|
||||||||
Prepaid and other current assets
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
|
$
|
—
|
|
|
$
|
3,735
|
|
|
$
|
—
|
|
|
$
|
420
|
|
Total assets
|
|
$
|
—
|
|
|
$
|
3,735
|
|
|
$
|
—
|
|
|
$
|
420
|
|
Accrued expenses
|
|
|
|
|
|
|
|
|
||||||||
Lead forward contracts
|
|
$
|
5,739
|
|
|
$
|
341
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward contracts
|
|
394
|
|
|
—
|
|
|
676
|
|
|
—
|
|
||||
Total liabilities
|
|
$
|
6,133
|
|
|
$
|
341
|
|
|
$
|
676
|
|
|
$
|
—
|
|
Derivatives Designated as Cash Flow Hedges
|
|
Pretax Gain (Loss) Recognized in AOCI on Derivative (Effective Portion)
|
|
Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)
|
|
Pretax Gain (Loss) Reclassified from AOCI into Income (Effective Portion)
|
||||
Lead forward contracts
|
|
$
|
(4,026
|
)
|
|
Cost of goods sold
|
|
$
|
2,389
|
|
Foreign currency forward contracts
|
|
(513
|
)
|
|
Cost of goods sold
|
|
124
|
|
||
Total
|
|
$
|
(4,539
|
)
|
|
|
|
$
|
2,513
|
|
Derivatives Not Designated as Hedging Instruments
|
Location of Gain (Loss) Recognized in Income on Derivative
|
|
Pretax Gain (Loss)
|
||
Foreign currency forward contracts
|
Other (income) expense, net
|
|
$
|
(285
|
)
|
Total
|
|
|
$
|
(285
|
)
|
Derivatives Designated as Cash Flow Hedges
|
|
Pretax Gain (Loss) Recognized in AOCI on Derivative (Effective Portion)
|
|
Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)
|
|
Pretax Gain (Loss) Reclassified from AOCI into Income (Effective Portion)
|
||||
Lead forward contracts
|
|
$
|
(3,296
|
)
|
|
Cost of goods sold
|
|
$
|
(1,147
|
)
|
Foreign currency forward contracts
|
|
2,222
|
|
|
Cost of goods sold
|
|
(48
|
)
|
||
Total
|
|
$
|
(1,074
|
)
|
|
|
|
$
|
(1,195
|
)
|
Derivatives Not Designated as Hedging Instruments
|
Location of Gain (Loss) Recognized in Income on Derivative
|
|
Pretax Gain (Loss)
|
||
Foreign currency forward contracts
|
Other (income) expense, net
|
|
$
|
374
|
|
Total
|
|
|
$
|
374
|
|
Derivatives Designated as Cash Flow Hedges
|
|
Pretax Gain (Loss) Recognized in AOCI on Derivative (Effective Portion)
|
|
Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)
|
|
Pretax Gain (Loss) Reclassified from AOCI into Income (Effective Portion)
|
||||
Lead forward contracts
|
|
$
|
(5,115
|
)
|
|
Cost of goods sold
|
|
$
|
(3,013
|
)
|
Foreign currency forward contracts
|
|
(2,573
|
)
|
|
Cost of goods sold
|
|
3,951
|
|
||
Total
|
|
$
|
(7,688
|
)
|
|
|
|
$
|
938
|
|
Derivatives Not Designated as Hedging Instruments
|
Location of Gain (Loss) Recognized in Income on Derivative
|
|
Pretax Gain (Loss)
|
||
Foreign currency forward contracts
|
Other (income) expense, net
|
|
$
|
(294
|
)
|
Total
|
|
|
$
|
(294
|
)
|
Derivatives Designated as Cash Flow Hedges
|
|
Pretax Gain (Loss) Recognized in AOCI on Derivative (Effective Portion)
|
|
Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)
|
|
Pretax Gain (Loss) Reclassified from AOCI into Income (Effective Portion)
|
||||
Lead forward contracts
|
|
$
|
(260
|
)
|
|
Cost of goods sold
|
|
$
|
(1,675
|
)
|
Foreign currency forward contracts
|
|
2,724
|
|
|
Cost of goods sold
|
|
72
|
|
||
Total
|
|
$
|
2,464
|
|
|
|
|
$
|
(1,603
|
)
|
Derivatives Not Designated as Hedging Instruments
|
Location of Gain (Loss) Recognized in Income on Derivative
|
|
Pretax Gain (Loss)
|
||
Foreign currency forward contracts
|
Other (income) expense, net
|
|
$
|
364
|
|
Total
|
|
|
$
|
364
|
|
|
|
Quarter ended
|
|
Six months ended
|
||||||||||||
|
|
September 27, 2015
|
|
September 28, 2014
|
|
September 27, 2015
|
|
September 28, 2014
|
||||||||
Balance at beginning of period
|
|
$
|
39,785
|
|
|
$
|
41,316
|
|
|
$
|
39,810
|
|
|
$
|
40,426
|
|
Current period provisions
|
|
4,698
|
|
|
5,102
|
|
|
8,583
|
|
|
9,617
|
|
||||
Costs incurred
|
|
(4,147
|
)
|
|
(4,901
|
)
|
|
(8,508
|
)
|
|
(8,465
|
)
|
||||
Foreign currency translation adjustment
|
|
(196
|
)
|
|
(999
|
)
|
|
255
|
|
|
(1,060
|
)
|
||||
Balance at end of period
|
|
$
|
40,140
|
|
|
$
|
40,518
|
|
|
$
|
40,140
|
|
|
$
|
40,518
|
|
|
|
Employee
Severance
|
|
Other
|
|
Total
|
||||||
Balance as of March 31, 2015
|
|
$
|
2,966
|
|
|
$
|
854
|
|
|
$
|
3,820
|
|
Accrued
|
|
3,674
|
|
|
89
|
|
|
3,763
|
|
|||
Accrual Adjustment
|
|
—
|
|
|
(314
|
)
|
|
(314
|
)
|
|||
Costs incurred
|
|
(3,638
|
)
|
|
(368
|
)
|
|
(4,006
|
)
|
|||
Foreign currency impact and other
|
|
16
|
|
|
44
|
|
|
60
|
|
|||
Balance as of September 27, 2015
|
|
$
|
3,018
|
|
|
$
|
305
|
|
|
$
|
3,323
|
|
|
|
September 27, 2015
|
|
March 31, 2015
|
||||
5.00% Senior Notes due 2023
|
|
$
|
300,000
|
|
|
$
|
—
|
|
2011 Credit Facility, due 2018
|
|
343,125
|
|
|
325,000
|
|
||
3.375% Convertible Notes, net of discount, due 2038
|
|
—
|
|
|
170,936
|
|
||
Total long-term debt
|
|
$
|
643,125
|
|
|
$
|
495,936
|
|
|
|
September 27, 2015
|
|
March 31, 2015
|
||||
Principal
|
|
$
|
—
|
|
|
$
|
172,266
|
|
Unamortized discount
|
|
—
|
|
|
(1,330
|
)
|
||
Net carrying amount
|
|
$
|
—
|
|
|
$
|
170,936
|
|
|
|
United States Plans
|
|
International Plans
|
||||||||||||
Quarter ended
|
|
Quarter ended
|
||||||||||||||
September 27, 2015
|
|
September 28, 2014
|
|
September 27, 2015
|
|
September 28, 2014
|
||||||||||
Service cost
|
|
$
|
108
|
|
|
$
|
102
|
|
|
$
|
208
|
|
|
$
|
202
|
|
Interest cost
|
|
170
|
|
|
168
|
|
|
486
|
|
|
662
|
|
||||
Expected return on plan assets
|
|
(215
|
)
|
|
(222
|
)
|
|
(576
|
)
|
|
(581
|
)
|
||||
Amortization and deferral
|
|
125
|
|
|
87
|
|
|
319
|
|
|
174
|
|
||||
Net periodic benefit cost
|
|
$
|
188
|
|
|
$
|
135
|
|
|
$
|
437
|
|
|
$
|
457
|
|
|
|
United States Plans
|
|
International Plans
|
||||||||||||
Six months ended
|
|
Six months ended
|
||||||||||||||
September 27, 2015
|
|
September 28, 2014
|
|
September 27, 2015
|
|
September 28, 2014
|
||||||||||
Service cost
|
|
$
|
246
|
|
|
$
|
204
|
|
|
$
|
416
|
|
|
$
|
413
|
|
Interest cost
|
|
338
|
|
|
337
|
|
|
971
|
|
|
1,342
|
|
||||
Expected return on plan assets
|
|
(430
|
)
|
|
(443
|
)
|
|
(1,152
|
)
|
|
(1,173
|
)
|
||||
Amortization and deferral
|
|
259
|
|
|
174
|
|
|
636
|
|
|
352
|
|
||||
Net periodic benefit cost
|
|
$
|
413
|
|
|
$
|
272
|
|
|
$
|
871
|
|
|
$
|
934
|
|
Shares outstanding as of March 31, 2015
|
|
44,068,588
|
|
Purchase of treasury stock
|
|
(2,009,896
|
)
|
Shares issued to Convertible Note holders
|
|
1,889,431
|
|
Shares issued towards equity-based compensation plans, net of equity awards surrendered for option price and taxes
|
|
441,701
|
|
|
|
|
|
Shares outstanding as of September 27, 2015
|
|
44,389,824
|
|
|
|
March 31, 2015
|
|
Before Reclassifications
|
|
Amounts Reclassified from AOCI
|
|
September 27, 2015
|
||||||||
Pension funded status adjustment
|
|
$
|
(23,719
|
)
|
|
$
|
—
|
|
|
$
|
638
|
|
|
$
|
(23,081
|
)
|
Net unrealized (loss) gain on derivative instruments
|
|
(95
|
)
|
|
(4,848
|
)
|
|
(589
|
)
|
|
(5,532
|
)
|
||||
Foreign currency translation adjustment
|
|
(85,161
|
)
|
|
(6,789
|
)
|
|
—
|
|
|
(91,950
|
)
|
||||
Accumulated other comprehensive income (loss)
|
|
$
|
(108,975
|
)
|
|
$
|
(11,637
|
)
|
|
$
|
49
|
|
|
$
|
(120,563
|
)
|
Components of AOCI
|
|
Amounts Reclassified from AOCI
|
|
Location of (Gain) Loss Recognized on Income Statement
|
||
Derivatives in Cash Flow Hedging Relationships:
|
|
|
|
|
||
Net unrealized gain on derivative instruments
|
|
$
|
(2,513
|
)
|
|
Cost of goods sold
|
Tax expense
|
|
929
|
|
|
|
|
Net unrealized gain on derivative instruments, net of tax
|
|
$
|
(1,584
|
)
|
|
|
|
|
|
|
|
||
Defined benefit pension costs:
|
|
|
|
|
||
Prior service costs and deferrals
|
|
$
|
444
|
|
|
Net periodic benefit cost, included in cost of goods sold and operating expenses - See Note 10
|
Tax benefit
|
|
(129
|
)
|
|
|
|
Net periodic benefit cost, net of tax
|
|
$
|
315
|
|
|
|
Components of AOCI
|
|
Amounts Reclassified from AOCI
|
|
Location of (Gain) Loss
Recognized on Income Statement
|
||
Derivatives in Cash Flow Hedging Relationships:
|
|
|
|
|
||
Net unrealized loss on derivative instruments
|
|
$
|
1,195
|
|
|
Cost of goods sold
|
Tax benefit
|
|
(441
|
)
|
|
|
|
Net unrealized loss on derivative instruments, net of tax
|
|
$
|
754
|
|
|
|
|
|
|
|
|
||
Defined benefit pension costs:
|
|
|
|
|
||
Prior service costs and deferrals
|
|
$
|
261
|
|
|
Net periodic benefit cost, included in cost of goods sold and operating expenses - See Note 10
|
Tax benefit
|
|
(80
|
)
|
|
|
|
Net periodic benefit cost, net of tax
|
|
$
|
181
|
|
|
|
Components of AOCI
|
|
Amounts Reclassified from AOCI
|
|
Location of (Gain) Loss Recognized on Income Statement
|
||
Derivatives in Cash Flow Hedging Relationships:
|
|
|
|
|
||
Net unrealized gain on derivative instruments
|
|
$
|
(938
|
)
|
|
Cost of goods sold
|
Tax expense
|
|
349
|
|
|
|
|
Net unrealized gain on derivative instruments, net of tax
|
|
$
|
(589
|
)
|
|
|
|
|
|
|
|
||
Defined benefit pension costs:
|
|
|
|
|
||
Prior service costs and deferrals
|
|
$
|
895
|
|
|
Net periodic benefit cost, included in cost of goods sold and operating expenses - See Note 10
|
Tax benefit
|
|
(257
|
)
|
|
|
|
Net periodic benefit cost, net of tax
|
|
$
|
638
|
|
|
|
Components of AOCI
|
|
Amounts Reclassified from AOCI
|
|
Location of (Gain) Loss
Recognized on Income Statement
|
||
Derivatives in Cash Flow Hedging Relationships:
|
|
|
|
|
||
Net unrealized loss on derivative instruments
|
|
$
|
1,603
|
|
|
Cost of goods sold
|
Tax benefit
|
|
(592
|
)
|
|
|
|
Net unrealized loss on derivative instruments, net of tax
|
|
$
|
1,011
|
|
|
|
|
|
|
|
|
||
Defined benefit pension costs:
|
|
|
|
|
||
Prior service costs and deferrals
|
|
$
|
526
|
|
|
Net periodic benefit cost, included in cost of goods sold and operating expenses - See Note 10
|
Tax benefit
|
|
(160
|
)
|
|
|
|
Net periodic benefit cost, net of tax
|
|
$
|
366
|
|
|
|
|
|
Equity Attributable to EnerSys Stockholders
|
|
Nonredeemable Noncontrolling Interests
|
|
Total Equity
|
||||||
Balance as of March 31, 2015
|
|
$
|
1,038,900
|
|
|
$
|
5,540
|
|
|
$
|
1,044,440
|
|
Total comprehensive income:
|
|
|
|
|
|
|
||||||
Net earnings (losses)
|
|
88,412
|
|
|
(6
|
)
|
|
88,406
|
|
|||
Net unrealized loss on derivative instruments, net of tax
|
|
(5,437
|
)
|
|
—
|
|
|
(5,437
|
)
|
|||
Pension funded status adjustment, net of tax
|
|
638
|
|
|
—
|
|
|
638
|
|
|||
Foreign currency translation adjustment
|
|
(6,789
|
)
|
|
(102
|
)
|
|
(6,891
|
)
|
|||
Total other comprehensive loss, net of tax
|
|
(11,588
|
)
|
|
(102
|
)
|
|
(11,690
|
)
|
|||
Total comprehensive income (loss)
|
|
76,824
|
|
|
(108
|
)
|
|
76,716
|
|
|||
Other changes in equity:
|
|
|
|
|
|
|
||||||
Purchase of treasury stock including ASR
|
|
(120,637
|
)
|
|
—
|
|
|
(120,637
|
)
|
|||
Reissuance of treasury stock to Convertible Note holders
|
|
114,449
|
|
|
|
|
114,449
|
|
||||
Adjustment to equity on debt extinguishment
|
|
(84,140
|
)
|
|
|
|
(84,140
|
)
|
||||
Cash dividends - common stock ($0.35 per share)
|
|
(15,553
|
)
|
|
—
|
|
|
(15,553
|
)
|
|||
Reclassification of redeemable equity component of Convertible Notes
|
|
1,330
|
|
|
—
|
|
|
1,330
|
|
|||
Other, including activity related to equity awards
|
|
(1,860
|
)
|
|
—
|
|
|
(1,860
|
)
|
|||
Balance as of September 27, 2015
|
|
$
|
1,009,313
|
|
|
$
|
5,432
|
|
|
$
|
1,014,745
|
|
|
|
Redeemable Noncontrolling Interests
|
||
Balance as of March 31, 2015
|
|
$
|
6,956
|
|
Net loss
|
|
(704
|
)
|
|
Foreign currency translation adjustment
|
|
(764
|
)
|
|
Balance as of September 27, 2015
|
|
$
|
5,488
|
|
|
|
Quarter ended
|
|
Six months ended
|
||||||||||||
|
|
September 27, 2015
|
|
September 28, 2014
|
|
September 27, 2015
|
|
September 28, 2014
|
||||||||
Net earnings attributable to EnerSys stockholders
|
|
$
|
40,025
|
|
|
$
|
56,316
|
|
|
$
|
88,412
|
|
|
$
|
105,485
|
|
Weighted-average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
44,944,027
|
|
|
46,133,637
|
|
|
44,588,971
|
|
|
46,516,470
|
|
||||
Dilutive effect of:
|
|
|
|
|
|
|
|
|
||||||||
Common shares from exercise and lapse of equity awards, net of shares assumed reacquired
|
|
666,875
|
|
|
813,912
|
|
|
685,154
|
|
|
951,785
|
|
||||
Convertible Notes
|
|
394,497
|
|
|
1,589,727
|
|
|
1,106,762
|
|
|
1,663,502
|
|
||||
Diluted weighted-average number of common shares outstanding
|
|
46,005,399
|
|
|
48,537,276
|
|
|
46,380,887
|
|
|
49,131,757
|
|
||||
Basic earnings per common share attributable to EnerSys stockholders
|
|
$
|
0.89
|
|
|
$
|
1.22
|
|
|
$
|
1.98
|
|
|
$
|
2.27
|
|
Diluted earnings per common share attributable to EnerSys stockholders
|
|
$
|
0.87
|
|
|
$
|
1.16
|
|
|
$
|
1.91
|
|
|
$
|
2.15
|
|
Anti-dilutive equity awards not included in diluted weighted-average common shares
|
|
742
|
|
|
—
|
|
|
742
|
|
|
207
|
|
•
|
Americas
, which includes North and South America, with segment headquarters in Reading, Pennsylvania, USA;
|
•
|
EMEA
, which includes Europe, the Middle East and Africa, with segment headquarters in Zurich, Switzerland; and
|
•
|
Asia
, which includes Asia, Australia and Oceania, with segment headquarters in Singapore.
|
|
|
Quarter ended
|
|
Six months ended
|
||||||||||||
|
|
September 27, 2015
|
|
September 28, 2014
|
|
September 27, 2015
|
|
September 28, 2014
|
||||||||
Net sales by segment to unaffiliated customers
|
|
|
|
|
|
|
|
|
||||||||
Americas
|
|
$
|
322,482
|
|
|
$
|
333,185
|
|
|
$
|
639,508
|
|
|
$
|
664,113
|
|
EMEA
|
|
189,426
|
|
|
233,340
|
|
|
386,067
|
|
|
475,275
|
|
||||
Asia
|
|
57,226
|
|
|
63,402
|
|
|
105,627
|
|
|
124,649
|
|
||||
Total net sales
|
|
$
|
569,134
|
|
|
$
|
629,927
|
|
|
$
|
1,131,202
|
|
|
$
|
1,264,037
|
|
Net sales by product line
|
|
|
|
|
|
|
|
|
||||||||
Reserve power
|
|
$
|
274,236
|
|
|
$
|
315,525
|
|
|
$
|
538,500
|
|
|
$
|
626,899
|
|
Motive power
|
|
294,898
|
|
|
314,402
|
|
|
592,702
|
|
|
637,138
|
|
||||
Total net sales
|
|
$
|
569,134
|
|
|
$
|
629,927
|
|
|
$
|
1,131,202
|
|
|
$
|
1,264,037
|
|
Intersegment sales
|
|
|
|
|
|
|
|
|
||||||||
Americas
|
|
$
|
6,667
|
|
|
$
|
10,977
|
|
|
$
|
16,707
|
|
|
$
|
19,895
|
|
EMEA
|
|
23,824
|
|
|
17,192
|
|
|
42,462
|
|
|
34,891
|
|
||||
Asia
|
|
6,346
|
|
|
9,125
|
|
|
12,732
|
|
|
20,584
|
|
||||
Total intersegment sales
(1)
|
|
$
|
36,837
|
|
|
$
|
37,294
|
|
|
$
|
71,901
|
|
|
$
|
75,370
|
|
Operating earnings by segment
|
|
|
|
|
|
|
|
|
||||||||
Americas
|
|
$
|
48,427
|
|
|
$
|
38,378
|
|
|
$
|
93,772
|
|
|
$
|
79,867
|
|
EMEA
|
|
17,141
|
|
|
23,439
|
|
|
37,693
|
|
|
52,040
|
|
||||
Asia
|
|
(190
|
)
|
|
3,813
|
|
|
(180
|
)
|
|
7,241
|
|
||||
Restructuring charges - Americas
|
|
—
|
|
|
—
|
|
|
(570
|
)
|
|
—
|
|
||||
Restructuring and other exit charges - EMEA
|
|
(1,905
|
)
|
|
(1,810
|
)
|
|
(2,553
|
)
|
|
(3,639
|
)
|
||||
Restructuring charges - Asia
|
|
(724
|
)
|
|
—
|
|
|
(724
|
)
|
|
—
|
|
||||
Reversal of legal accrual, net of fees - Americas
|
|
799
|
|
|
16,233
|
|
|
799
|
|
|
16,233
|
|
||||
Legal proceedings charge - EMEA
|
|
(4,000
|
)
|
|
—
|
|
|
(4,000
|
)
|
|
—
|
|
||||
Gain on sale of facility - Asia
|
|
—
|
|
|
—
|
|
|
4,348
|
|
|
—
|
|
||||
Total operating earnings
(2)
|
|
$
|
59,548
|
|
|
$
|
80,053
|
|
|
$
|
128,585
|
|
|
$
|
151,742
|
|
(1)
|
Intersegment sales are presented on a cost-plus basis, which takes into consideration the effect of transfer prices between legal entities.
|
(2)
|
The Company does not allocate interest expense or other (income) expense to the reportable segments.
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
general cyclical patterns of the industries in which our customers operate;
|
•
|
the extent to which we cannot control our fixed and variable costs;
|
•
|
the raw materials in our products may experience significant fluctuations in market price and availability;
|
•
|
certain raw materials constitute hazardous materials that may give rise to costly environmental and safety claims;
|
•
|
legislation regarding the restriction of the use of certain hazardous substances in our products;
|
•
|
risks involved in our operations such as disruption of markets, changes in import and export laws, environmental regulations, currency restrictions and local currency exchange rate fluctuations;
|
•
|
our ability to raise our selling prices to our customers when our product costs increase;
|
•
|
the extent to which we are able to efficiently utilize our global manufacturing facilities and optimize our capacity;
|
•
|
general economic conditions in the markets in which we operate;
|
•
|
competitiveness of the battery markets throughout the world;
|
•
|
our timely development of competitive new products and product enhancements in a changing environment and the acceptance of such products and product enhancements by customers;
|
•
|
our ability to adequately protect our proprietary intellectual property, technology and brand names;
|
•
|
litigation and regulatory proceedings to which we might be subject;
|
•
|
changes in our market share in the geographic business segments where we operate;
|
•
|
our ability to implement our cost reduction initiatives successfully and improve our profitability;
|
•
|
quality problems associated with our products;
|
•
|
our ability to implement business strategies, including our acquisition strategy, manufacturing expansion and restructuring plans;
|
•
|
our acquisition strategy may not be successful in locating advantageous targets;
|
•
|
our ability to successfully integrate any assets, liabilities, customers, systems and management personnel we acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames;
|
•
|
potential goodwill impairment charges, future impairment charges and fluctuations in the fair values of reporting units or of assets in the event projected financial results are not achieved within expected time frames;
|
•
|
our debt and debt service requirements which may restrict our operational and financial flexibility, as well as imposing unfavorable interest and financing costs;
|
•
|
our ability to maintain our existing credit facilities or obtain satisfactory new credit facilities;
|
•
|
adverse changes in our short and long-term debt levels under our credit facilities;
|
•
|
our exposure to fluctuations in interest rates on our variable-rate debt;
|
•
|
our ability to attract and retain qualified management and personnel;
|
•
|
our ability to maintain good relations with labor unions;
|
•
|
credit risk associated with our customers, including risk of insolvency and bankruptcy;
|
•
|
our ability to successfully recover in the event of a disaster affecting our infrastructure;
|
•
|
terrorist acts or acts of war, could cause damage or disruption to our operations, our suppliers, channels to market or customers, or could cause costs to increase, or create political or economic instability; and
|
•
|
the operation, capacity and security of our information systems and infrastructure.
|
•
|
Americas
, which includes North and South America, with our segment headquarters in Reading, Pennsylvania, USA;
|
•
|
EMEA
, which includes Europe, the Middle East and Africa, with our segment headquarters in Zurich, Switzerland; and
|
•
|
Asia,
which includes Asia, Australia and Oceania, with our segment headquarters in Singapore.
|
•
|
Reserve power products
are used for backup power for the continuous operation of critical applications in telecommunications systems, uninterruptible power systems, or “UPS” applications for computer and computer-controlled systems, and other specialty power applications, including medical and security systems, premium starting, lighting and ignition applications, in switchgear, electrical control systems used in electric utilities, large-scale energy storage, energy pipelines, in commercial aircraft, satellites, military aircraft, submarines, ships and tactical vehicles. Reserve power products also include thermally managed cabinets and enclosures for electronic equipment and batteries.
|
•
|
Motive power products
are used to provide power for electric industrial forklifts used in manufacturing, warehousing and other material handling applications as well as mining equipment, diesel locomotive starting and other rail equipment.
|
|
|
Quarter ended
September 27, 2015 |
|
Quarter ended
September 28, 2014 |
|
Increase (Decrease)
|
|||||||||||||||
|
|
In
Millions |
|
Percentage
of Total Net Sales |
|
In
Millions |
|
Percentage
of Total Net Sales |
|
In
Millions |
|
%
|
|||||||||
Americas
|
|
$
|
322.5
|
|
|
56.7
|
%
|
|
$
|
333.2
|
|
|
52.9
|
%
|
|
$
|
(10.7
|
)
|
|
(3.2
|
)%
|
EMEA
|
|
189.4
|
|
|
33.3
|
|
|
233.3
|
|
|
37.0
|
|
|
(43.9
|
)
|
|
(18.8
|
)
|
|||
Asia
|
|
57.2
|
|
|
10.0
|
|
|
63.4
|
|
|
10.1
|
|
|
(6.2
|
)
|
|
(9.7
|
)
|
|||
Total net sales
|
|
$
|
569.1
|
|
|
100.0
|
%
|
|
$
|
629.9
|
|
|
100.0
|
%
|
|
$
|
(60.8
|
)
|
|
(9.7
|
)%
|
|
|
Six months ended
September 27, 2015 |
|
Six months ended
September 28, 2014 |
|
Increase (Decrease)
|
|||||||||||||||
|
|
In
Millions
|
|
Percentage
of Total
Net Sales
|
|
In
Millions
|
|
Percentage
of Total
Net Sales
|
|
In
Millions
|
|
%
|
|||||||||
Americas
|
|
$
|
639.5
|
|
|
56.5
|
%
|
|
$
|
664.1
|
|
|
52.5
|
%
|
|
$
|
(24.6
|
)
|
|
(3.7
|
)%
|
EMEA
|
|
386.1
|
|
|
34.1
|
|
|
475.3
|
|
|
37.6
|
|
|
(89.2
|
)
|
|
(18.8
|
)
|
|||
Asia
|
|
105.6
|
|
|
9.4
|
|
|
124.6
|
|
|
9.9
|
|
|
(19.0
|
)
|
|
(15.3
|
)
|
|||
Total net sales
|
|
$
|
1,131.2
|
|
|
100.0
|
%
|
|
$
|
1,264.0
|
|
|
100.0
|
%
|
|
$
|
(132.8
|
)
|
|
(10.5
|
)%
|
|
|
Quarter ended
September 27, 2015 |
|
Quarter ended
September 28, 2014 |
|
Increase (Decrease)
|
|||||||||||||||
|
|
In
Millions |
|
Percentage
of Total Net Sales |
|
In
Millions |
|
Percentage
of Total Net Sales |
|
In
Millions |
|
%
|
|||||||||
Reserve power
|
|
$
|
274.2
|
|
|
48.2
|
%
|
|
$
|
315.5
|
|
|
50.1
|
%
|
|
$
|
(41.3
|
)
|
|
(13.1
|
)%
|
Motive power
|
|
294.9
|
|
|
51.8
|
|
|
314.4
|
|
|
49.9
|
|
|
(19.5
|
)
|
|
(6.2
|
)
|
|||
Total net sales
|
|
$
|
569.1
|
|
|
100.0
|
%
|
|
$
|
629.9
|
|
|
100.0
|
%
|
|
$
|
(60.8
|
)
|
|
(9.7
|
)%
|
|
|
Six months ended
September 27, 2015 |
|
Six months ended
September 28, 2014 |
|
Increase (Decrease)
|
|||||||||||||||
|
|
In
Millions
|
|
Percentage
of Total
Net Sales
|
|
In
Millions
|
|
Percentage
of Total
Net Sales
|
|
In
Millions
|
|
%
|
|||||||||
Reserve power
|
|
$
|
538.5
|
|
|
47.6
|
%
|
|
$
|
626.9
|
|
|
49.6
|
%
|
|
$
|
(88.4
|
)
|
|
(14.1
|
)%
|
Motive power
|
|
592.7
|
|
|
52.4
|
|
|
637.1
|
|
|
50.4
|
|
|
(44.4
|
)
|
|
(7.0
|
)
|
|||
Total net sales
|
|
$
|
1,131.2
|
|
|
100.0
|
%
|
|
$
|
1,264.0
|
|
|
100.0
|
%
|
|
$
|
(132.8
|
)
|
|
(10.5
|
)%
|
|
|
Quarter ended
September 27, 2015 |
|
Quarter ended
September 28, 2014 |
|
Increase (Decrease)
|
|||||||||||||||
|
|
In
Millions |
|
Percentage
of Total Net Sales |
|
In
Millions |
|
Percentage
of Total Net Sales |
|
In
Millions |
|
%
|
|||||||||
Gross Profit
|
|
$
|
155.0
|
|
|
27.2
|
%
|
|
$
|
162.5
|
|
|
25.8
|
%
|
|
$
|
(7.5
|
)
|
|
(4.7
|
)%
|
|
|
Six months ended
September 27, 2015 |
|
Six months ended
September 28, 2014 |
|
Increase (Decrease)
|
|||||||||||||||
|
|
In
Millions
|
|
Percentage
of Total
Net Sales
|
|
In
Millions
|
|
Percentage
of Total
Net Sales
|
|
In
Millions
|
|
%
|
|||||||||
Gross Profit
|
|
$
|
305.4
|
|
|
27.0
|
%
|
|
$
|
325.1
|
|
|
25.7
|
%
|
|
$
|
(19.7
|
)
|
|
(6.1
|
)%
|
|
|
Quarter ended
September 27, 2015 |
|
Quarter ended
September 28, 2014 |
|
Increase (Decrease)
|
|||||||||||||||
|
|
In
Millions |
|
Percentage
of Total Net Sales |
|
In
Millions |
|
Percentage
of Total Net Sales |
|
In
Millions |
|
%
|
|||||||||
Operating expenses
|
|
$
|
89.6
|
|
|
15.7
|
%
|
|
$
|
96.9
|
|
|
15.4
|
%
|
|
$
|
(7.3
|
)
|
|
(7.6
|
)%
|
Restructuring and other exit charges
|
|
$
|
2.6
|
|
|
0.4
|
%
|
|
$
|
1.8
|
|
|
0.3
|
%
|
|
$
|
0.8
|
|
|
45.3
|
%
|
Legal proceedings charge / (reversal of legal accrual, net of fees)
|
|
$
|
3.2
|
|
|
0.6
|
%
|
|
$
|
(16.2
|
)
|
|
(2.6
|
)%
|
|
$
|
19.4
|
|
|
NM
|
|
|
|
Six months ended
September 27, 2015 |
|
Six months ended
September 28, 2014 |
|
Increase (Decrease)
|
|||||||||||||||
|
|
In
Millions
|
|
Percentage
of Total
Net Sales
|
|
In
Millions
|
|
Percentage
of Total
Net Sales
|
|
In
Millions
|
|
%
|
|||||||||
Operating expenses
|
|
$
|
174.1
|
|
|
15.4
|
%
|
|
$
|
186.0
|
|
|
14.7
|
%
|
|
$
|
(11.9
|
)
|
|
(6.4
|
)%
|
Restructuring and other exit charges
|
|
$
|
3.8
|
|
|
0.3
|
%
|
|
$
|
3.6
|
|
|
0.3
|
%
|
|
$
|
0.2
|
|
|
5.7
|
%
|
Legal proceedings charge / (reversal of legal accrual, net of fees)
|
|
$
|
3.2
|
|
|
0.3
|
%
|
|
$
|
(16.2
|
)
|
|
(1.3
|
)%
|
|
$
|
19.4
|
|
|
NM
|
|
Gain on sale of facility
|
|
$
|
(4.3
|
)
|
|
(0.4
|
)%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
(4.3
|
)
|
|
NM
|
|
|
|
Quarter ended
September 27, 2015 |
|
Quarter ended
September 28, 2014 |
|
Increase (Decrease)
|
|||||||||||||||
|
|
In
Millions |
|
Percentage
of Total Net Sales (1) |
|
In
Millions |
|
Percentage
of Total Net Sales (1) |
|
In
Millions |
|
%
|
|||||||||
Americas
|
|
$
|
48.4
|
|
|
15.0
|
%
|
|
$
|
38.4
|
|
|
11.5
|
%
|
|
$
|
10.0
|
|
|
26.2
|
%
|
EMEA
|
|
17.1
|
|
|
9.0
|
|
|
23.4
|
|
|
10.0
|
|
|
(6.3
|
)
|
|
(26.9
|
)
|
|||
Asia
|
|
(0.1
|
)
|
|
(0.3
|
)
|
|
3.8
|
|
|
6.0
|
|
|
(3.9
|
)
|
|
(105.0
|
)
|
|||
Subtotal
|
|
65.4
|
|
|
11.5
|
|
|
65.6
|
|
|
10.4
|
|
|
(0.2
|
)
|
|
(0.4
|
)
|
|||
Restructuring and other exit charges - EMEA
|
|
(1.9
|
)
|
|
(1.0
|
)
|
|
(1.8
|
)
|
|
(0.8
|
)
|
|
(0.1
|
)
|
|
5.2
|
|
|||
Restructuring charges - Asia
|
|
(0.7
|
)
|
|
(1.3
|
)
|
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|
NM
|
|
|||
Reversal of legal fees, net of fees - Americas
|
|
0.8
|
|
|
0.2
|
|
|
16.2
|
|
|
4.9
|
|
|
(15.4
|
)
|
|
NM
|
|
|||
Legal proceedings charge - EMEA
|
|
(4.0
|
)
|
|
(2.1
|
)
|
|
—
|
|
|
—
|
|
|
(4.0
|
)
|
|
NM
|
|
|||
Total operating earnings
|
|
$
|
59.6
|
|
|
10.5
|
%
|
|
$
|
80.0
|
|
|
12.7
|
%
|
|
$
|
(20.4
|
)
|
|
(25.6
|
)%
|
|
|
Six months ended
September 27, 2015 |
|
Six months ended
September 28, 2014 |
|
Increase (Decrease)
|
|||||||||||||||
|
|
In
Millions
|
|
Percentage
of Total
Net Sales
(1)
|
|
In
Millions
|
|
Percentage
of Total
Net Sales
(1)
|
|
In
Millions
|
|
%
|
|||||||||
Americas
|
|
$
|
93.7
|
|
|
14.7
|
%
|
|
$
|
79.9
|
|
|
12.0
|
%
|
|
$
|
13.8
|
|
|
17.4
|
%
|
EMEA
|
|
37.7
|
|
|
9.8
|
|
|
52.0
|
|
|
11.0
|
|
|
(14.3
|
)
|
|
(27.6
|
)
|
|||
Asia
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|
7.2
|
|
|
5.8
|
|
|
(7.3
|
)
|
|
(102.5
|
)
|
|||
Subtotal
|
|
131.3
|
|
|
11.6
|
|
|
139.1
|
|
|
11.0
|
|
|
(7.8
|
)
|
|
(5.7
|
)
|
|||
Restructuring charges - Americas
|
|
(0.6
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|
NM
|
|
|||
Restructuring and other exit charges - EMEA
|
|
(2.5
|
)
|
|
(0.7
|
)
|
|
(3.6
|
)
|
|
(0.8
|
)
|
|
1.1
|
|
|
(29.8
|
)
|
|||
Restructuring charges - Asia
|
|
(0.7
|
)
|
|
(0.7
|
)
|
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|
NM
|
|
|||
Reversal of legal fees, net of fees - Americas
|
|
0.8
|
|
|
0.1
|
|
|
16.2
|
|
|
2.4
|
|
|
(15.4
|
)
|
|
NM
|
|
|||
Legal proceedings charge - EMEA
|
|
(4.0
|
)
|
|
(1.0
|
)
|
|
—
|
|
|
—
|
|
|
(4.0
|
)
|
|
NM
|
|
|||
Gain on sale of facility - Asia
|
|
4.3
|
|
|
4.1
|
|
|
—
|
|
|
—
|
|
|
4.3
|
|
|
NM
|
|
|||
Total operating earnings
|
|
$
|
128.6
|
|
|
11.4
|
%
|
|
$
|
151.7
|
|
|
12.0
|
%
|
|
$
|
(23.1
|
)
|
|
(15.3
|
)%
|
(1)
|
The percentages shown for the segments are computed as a percentage of the applicable segment’s net sales.
|
|
|
Quarter ended
September 27, 2015 |
|
Quarter ended
September 28, 2014 |
|
Increase (Decrease)
|
|||||||||||||||
|
|
In
Millions |
|
Percentage
of Total Net Sales |
|
In
Millions |
|
Percentage
of Total Net Sales |
|
In
Millions |
|
%
|
|||||||||
Interest expense
|
|
$
|
5.1
|
|
|
0.9
|
%
|
|
$
|
4.3
|
|
|
0.7
|
%
|
|
$
|
0.8
|
|
|
15.1
|
%
|
|
|
Six months ended
September 27, 2015 |
|
Six months ended
September 28, 2014 |
|
Increase (Decrease)
|
|||||||||||||||
|
|
In
Millions
|
|
Percentage
of Total
Net Sales
|
|
In
Millions
|
|
Percentage
of Total
Net Sales
|
|
In
Millions
|
|
%
|
|||||||||
Interest expense
|
|
$
|
11.4
|
|
|
1.0
|
%
|
|
$
|
9.2
|
|
|
0.7
|
%
|
|
$
|
2.2
|
|
|
22.9
|
%
|
|
|
Quarter ended
September 27, 2015 |
|
Quarter ended
September 28, 2014 |
|
Increase (Decrease)
|
||||||||||||||
|
|
In
Millions |
|
Percentage
of Total Net Sales |
|
In
Millions |
|
Percentage
of Total Net Sales |
|
In
Millions |
|
%
|
||||||||
Other (income) expense, net
|
|
$
|
0.7
|
|
|
0.1
|
%
|
|
$
|
(3.4
|
)
|
|
(0.5
|
)%
|
|
$
|
4.1
|
|
|
NM
|
|
|
Six months ended
September 27, 2015 |
|
Six months ended
September 28, 2014 |
|
Increase (Decrease)
|
||||||||||||||
|
|
In
Millions
|
|
Percentage
of Total
Net Sales
|
|
In
Millions
|
|
Percentage
of Total
Net Sales
|
|
In
Millions
|
|
%
|
||||||||
Other (income) expense, net
|
|
$
|
1.4
|
|
|
0.1
|
%
|
|
$
|
(2.4
|
)
|
|
(0.2
|
)%
|
|
$
|
3.8
|
|
|
NM
|
|
|
Quarter ended
September 27, 2015 |
|
Quarter ended
September 28, 2014 |
|
Increase (Decrease)
|
|||||||||||||||
|
|
In
Millions |
|
Percentage
of Total Net Sales |
|
In
Millions |
|
Percentage
of Total Net Sales |
|
In
Millions |
|
%
|
|||||||||
Earnings before income taxes
|
|
$
|
53.8
|
|
|
9.5
|
%
|
|
$
|
79.1
|
|
|
12.5
|
%
|
|
$
|
(25.3
|
)
|
|
(32.0
|
)%
|
|
|
Six months ended
September 27, 2015 |
|
Six months ended
September 28, 2014 |
|
Increase (Decrease)
|
|||||||||||||||
|
|
In
Millions
|
|
Percentage
of Total
Net Sales
|
|
In
Millions
|
|
Percentage
of Total
Net Sales
|
|
In
Millions
|
|
%
|
|||||||||
Earnings before income taxes
|
|
$
|
115.8
|
|
|
10.3
|
%
|
|
$
|
144.9
|
|
|
11.5
|
%
|
|
$
|
(29.1
|
)
|
|
(20.1
|
)%
|
|
|
Quarter ended
September 27, 2015 |
|
Quarter ended
September 28, 2014 |
|
Increase (Decrease)
|
|||||||||||||||
|
|
In
Millions |
|
Percentage
of Total Net Sales |
|
In
Millions |
|
Percentage
of Total Net Sales |
|
In
Millions |
|
%
|
|||||||||
Income tax expense
|
|
$
|
14.0
|
|
|
2.5
|
%
|
|
$
|
22.5
|
|
|
3.5
|
%
|
|
$
|
(8.5
|
)
|
|
(37.8
|
)%
|
Effective tax rate
|
|
26.1%
|
|
28.5%
|
|
(2.4)%
|
|
|
Six months ended
September 27, 2015 |
|
Six months ended
September 28, 2014 |
|
Increase (Decrease)
|
|||||||||||||||
|
|
In
Millions
|
|
Percentage
of Total
Net Sales
|
|
In
Millions
|
|
Percentage
of Total
Net Sales
|
|
In
Millions
|
|
%
|
|||||||||
Income tax expense
|
|
$
|
28.1
|
|
|
2.5
|
%
|
|
$
|
39.2
|
|
|
3.1
|
%
|
|
$
|
(11.1
|
)
|
|
(28.4
|
)%
|
Effective tax rate
|
|
24.3%
|
|
27.1%
|
|
(2.8)%
|
(In Millions)
|
|||||||||||||||||||||||
Balance At
|
|
Trade
Receivables
|
|
Inventory
|
|
Accounts
Payable
|
|
Total
|
|
Quarter
Revenue
Annualized
|
|
Primary
Working
Capital %
|
|||||||||||
September 27, 2015
|
|
$
|
482.9
|
|
|
$
|
346.0
|
|
|
$
|
(219.4
|
)
|
|
$
|
609.5
|
|
|
$
|
2,276.5
|
|
|
26.8
|
%
|
March 31, 2015
|
|
518.2
|
|
|
337.0
|
|
|
(218.6
|
)
|
|
636.6
|
|
|
2,519.6
|
|
|
25.3
|
|
|||||
September 28, 2014
|
|
563.9
|
|
|
389.2
|
|
|
(260.4
|
)
|
|
692.7
|
|
|
2,519.7
|
|
|
27.5
|
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Date
|
|
$’s Under
Contract
(in millions)
|
|
# Pounds
Purchased
(in millions)
|
|
Average
Cost/Pound
|
|
Approximate %
of Lead
Requirements
(1)
|
||||||
September 27, 2015
|
|
$
|
69.9
|
|
|
84.7
|
|
|
$
|
0.82
|
|
|
21
|
%
|
March 31, 2015
|
|
76.1
|
|
|
91.6
|
|
|
0.83
|
|
|
19
|
|
||
September 28, 2014
|
|
93.5
|
|
|
95.4
|
|
|
0.98
|
|
|
21
|
|
(1)
|
Based on approximate annual lead requirements for the periods then ended.
|
Transactions Hedged
|
|
$US
Equivalent
(in millions)
|
|
Average
Rate
Hedged
|
|
Approximate
% of Annual
Requirements
(1)
|
||||||
Sell Euros for U.S. dollars
|
|
$
|
48.4
|
|
|
$/€
|
|
1.12
|
|
|
19
|
%
|
Sell Euros for Polish zloty
|
|
30.9
|
|
|
PLN/€
|
|
4.18
|
|
|
22
|
|
|
Sell Euros for British pounds
|
|
15.3
|
|
|
£/€
|
|
0.72
|
|
|
33
|
|
|
Sell U.S. dollars for Mexican pesos
|
|
5.6
|
|
|
MXN/$
|
|
15.48
|
|
|
53
|
|
|
Sell Japanese Yen for U.S. dollars
|
|
2.4
|
|
|
¥/$
|
|
123.07
|
|
|
83
|
|
|
Sell Malaysian Ringgit for Euros
|
|
1.6
|
|
|
MYR/€
|
|
5.00
|
|
|
50
|
|
|
Sell Australian dollars for Euros
|
|
0.6
|
|
|
AUD/€
|
|
1.49
|
|
|
5
|
|
|
Other
|
|
1.3
|
|
|
|
|
|
|
|
|||
Total
|
|
$
|
106.1
|
|
|
|
|
|
|
|
(1)
|
Based on the fiscal year currency requirements.
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
PART II
|
OTHER INFORMATION
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
|
(a)
Total number of shares (or units) purchased
|
|
(b)
Average price paid per share (or unit)
|
|
(c)
Total number of shares (or units) purchased as part of publicly announced plans or programs
|
|
(d)
Maximum number (or approximate dollar value) of shares (or units) that may be purchased under the plans or
programs
(1) (2)
|
|||||||
June 29 – July 26, 2015
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
25,000,000
|
|
|
July 27 – August 23, 2015
|
|
2,000,000
|
|
|
TBD
|
|
(2
|
)
|
2,000,000
|
|
|
25,000,000
|
|
||
August 24 – September 27, 2015
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,000,000
|
|
|||
Total
|
|
2,000,000
|
|
|
TBD
|
|
|
2,000,000
|
|
|
|
(1)
|
The Company's Board of Directors has authorized the Company to repurchase up to such number of shares as shall equal the dilutive effects of any equity-based award granted during such fiscal year under the 2010 Equity Incentive Plan and the number of shares exercised through stock option awards during such fiscal year.
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Matters
|
ITEM 6.
|
EXHIBITS
|
Exhibit
Number |
|
Description of Exhibit
|
|
|
|
3.1
|
|
Fifth Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to Amendment No. 3 to EnerSys’ Registration Statement on Form S-1 (File No. 333-115553) filed on July 13, 2004).
|
|
|
|
3.2
|
|
Second Amended and Restated Bylaws (incorporated by reference to Exhibit 3.3 to EnerSys' Quarterly Report on Form 10-Q for the period ended September 28, 2014 (File No. 001-32253) filed on November 5, 2014).
|
|
|
|
10.1
|
|
Form of Market Share Unit Agreement - Senior Executives - 2010 Equity Incentive Plan (filed herewith).
|
|
|
|
10.2
|
|
Form of Stock Option Agreement - Senior Executives - 2010 Equity Incentive Plan (filed herewith).
|
|
|
|
10.3
|
|
Consulting Agreement with Richard W. Zuidema (filed herewith).
|
|
|
|
31.1
|
|
Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) Under the Securities Exchange Act of 1934 (filed herewith).
|
|
|
|
31.2
|
|
Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) Under the Securities Exchange Act of 1934 (filed herewith).
|
|
|
|
32.1
|
|
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
ENERSYS (Registrant)
|
|
|
|
|
|
By
|
/s/ Michael J. Schmidtlein
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Michael J. Schmidtlein
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Chief Financial Officer
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Exhibit
Number |
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Description of Exhibit
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3.1
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Fifth Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to Amendment No. 3 to EnerSys’ Registration Statement on Form S-1 (File No. 333-115553) filed on July 13, 2004).
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3.2
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Second Amended and Restated Bylaws (incorporated by reference to Exhibit 3.3 to EnerSys' Quarterly Report on Form 10-Q for the period ended September 28, 2014 (File No. 001-32253) filed on November 5, 2014).
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10.1
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Form of Market Share Unit Agreement - Senior Executives - 2010 Equity Incentive Plan (filed herewith).
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10.2
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Form of Stock Option Agreement - Senior Executives - 2010 Equity Incentive Plan (filed herewith).
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10.3
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Consulting Agreement with Richard W. Zuidema (filed herewith).
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31.1
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Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) Under the Securities Exchange Act of 1934 (filed herewith).
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31.2
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Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) Under the Securities Exchange Act of 1934 (filed herewith).
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32.1
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Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Extension Schema Document
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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(A)
TSR Performance
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(B)
Payout Factor
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(C)
Number of Market Share Units Vested
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If TSR Performance is less than -.25
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Payout Factor equals 0
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Number of Market Share Units specified on the signature page of this Agreement plus any additional Market Share Units credited under Sections 2(b) and (c)
multiplied by
the Payout Factor in Column B.
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If TSR Performance is equal to or greater than -.25 but not more than +.25
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Payout Factor equals TSR Performance plus .75
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If TSR Performance is greater than +.25
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Payout Factor is equal to 1.0 plus (1.333 times (TSR Performance minus .25)
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ENERSYS
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By:
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Name:
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Title:
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PARTICIPANT
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Name:
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Address:
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(i)
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the Participant’s employment
(or consulting, director or advisory services)
terminates due to death or Permanent Disability, or
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(ii)
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the Participant’s employment terminates without Cause or for Good Reason
(including for purposes of this Section 4(a), a termination without Cause by the Company of consulting, director or advisory services)
.
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Number of Options:
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______ Option Price: $ __________
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1.
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I have reviewed this quarterly report on Form 10-Q of EnerSys;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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By
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/s/ John D. Craig
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John D. Craig
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Chairman and Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of EnerSys;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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By
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/s/ Michael J. Schmidtlein
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Michael J. Schmidtlein
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Chief Financial Officer
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By
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/s/ John D. Craig
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John D. Craig
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Chairman and Chief Executive Officer
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By
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/s/ Michael J. Schmidtlein
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Michael J. Schmidtlein
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Chief Financial Officer
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