READING, PA — Despite a slight decline in net sales for both the fourth quarter and the full fiscal year, EnerSys (NYSE: ENS) recently reported a robust finish for fiscal 2024. The multinational company’s strategy of diversifying its portfolio seems to have paid off, helping it navigate a complex business landscape and achieve significant gains in crucial performance metrics.
The company’s doling out of $130M back to shareholders via share repurchases and dividends reflects its healthy financial status, a significant accomplishment in a challenging market environment.
President and CEO David M. Shaffer commented on the year’s achievements, saying, “We delivered a strong finish to the fiscal year with our balanced business portfolio delivering solid results.” He also highlighted that the adjusted earnings per share were on the higher end of the company’s guidance range, indicating a positive trend.
One of the more significant factors in EnerSys’ performance was its adoption of the Inflation Reduction Act / IRC 45X tax credits. These credits led to a $36M benefit in the fourth quarter and a $136M benefit for the entire fiscal year, pumping up the gross margin improvement and the adjusted operating earnings growth.
Despite a decrease in net sales, attributed to spending pauses in telecom and broadband, Shaffer noted the company’s progress towards the full commercialization of its Fast Charge and Storage (FC&S) solution. He revealed plans for its first system installations in late summer 2024, indicating a further diversification of the company’s portfolio.
A significant future undertaking for the company is the development of a lithium-ion cell gigafactory. The company has chosen Greenville, South Carolina as the location, backed by $200 million in state and local funding. EnerSys has applied for additional Department of Energy funding, which is expected to be announced in August. Shaffer stated that these credits would be used “to increase our investments in domestic manufacturing of energy dense batteries, as the law intended.”
Moreover, EnerSys recently announced an agreement to acquire Bren-Tronics, a leading U.S. manufacturer of portable power solutions. This move will not only expand the company’s presence in crucial defense applications but also broaden its range of product offerings and boost its product development capabilities.
Looking to the future, Shaffer expressed confidence in the foundation EnerSys has laid, stating, “Energy scarcity will continue to be a global concern as megatrends are driving rapid growth in demand for reliable power. As a critical supplier of energy systems and energy storage solutions, EnerSys is strategically positioned to capitalize on this growth.”
With significant achievements under its belt and strategic plans for future growth, EnerSys seems well set to continue navigating the complex market landscape and delivering value to its stakeholders.
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