EnerSys Reports Fourth Quarter and Full Year Fiscal 2026 Results | ENS Stock News

Delivers Record Full Year Net Sales, up 4%Fourth Quarter Fiscal 2026 Highlights(All comparisons against the fourth quarter of fiscal 2025 unless otherwise noted)Delivered net sales of $988M, +1%Achieved Gross Margin (GM) of 29.4%, (180) bps and GM ex IRC 45X(1) of 24.7%, (200) bpsRealized diluted EPS of $2.05, (15%), record adjusted diluted EPS(1) of $3.19, +7%, and record adjusted diluted EPS ex IRC 45X(1) of $1.96, +5%Net leverage ratio(a) 1.1 X EBITDAGenerated operating cash flow of $144MAdvanced new product pipeline, including BESS for warehouse operators and a lithium data center solution, both in customer commissioningFull Year Fiscal 2026 Highlights(All comparisons against fiscal 2025 unless otherwise noted)Delivered record net sales of $3.75B, +4%Achieved GM of 29.3%, down (90) bps and GM ex IRC 45X(1) of 25.1%, roughly flatRealized diluted EPS of $7.70, down (14%), record adjusted diluted EPS(1) of $10.56, +4%, and record adjusted diluted EPS ex IRC 45X(1) of $6.41, +15%Generated operating cash flow of $548MReturned $409M to shareholders through buybacks and dividendsLaunched EnerGize strategic framework and accelerated operational execution READING, Pa.--(BUSINESS WIRE)--EnerSys (NYSE: ENS), a global leader in stored energy solutions for industrial applications, announced today results for its fourth quarter and full year fiscal 2026, which ended on March 31, 2026.EnerSys FY’26 Earnings | Image (right): NASA/Cory Huston“The fourth quarter capped a strong year for EnerSys, with our second highest revenue quarter in history and important progress advancing both our new lithium data center solution and BESS for warehouse operators into customer commissioning,” said Shawn O’Connell, President and Chief Executive Officer of EnerSys. “For the full year, we delivered record net sales, up 4%, and record adjusted diluted EPS excluding 45X, up 15%, reflecting solid execution and the early impact of our EnerGize strategic framework. Our focus on core end markets, where our leading market share positions afford us the right to win, has created a more durable, diversified portfolio that can perform across varied demand conditions.“Over the past year, we have taken decisive actions to improve our cost structure, optimize our manufacturing footprint, and increase the speed and focus of our organization. These efforts, combined with a continued shift toward higher-value solutions, are strengthening the quality and consistency of our earnings.“As we enter fiscal 2027, we are encouraged by improving demand trends and the momentum we are building across the business. We look forward to providing additional detail on our strategy, technology roadmap, and growth opportunities at our Investor Day on June 11th at the NYSE,” O'Connell concluded.Key Financial Results and MetricsFourth quarter endedTwelve months endedIn millions, except per share amountsMarch 31, 2026March 31, 2025ChangeMarch 31, 2026March 31, 2025ChangeNet Sales$988.0$974.81.3%$3,751.4$3,617.63.7%Diluted EPS (GAAP)$2.05$2.41$(0.36)$7.70$8.99$(1.29)Adjusted Diluted EPS (Non-GAAP)(1)$3.19$2.97$0.22$10.56$10.15$0.41Gross Profit (GAAP)$290.9$303.7$(12.8)$1,097.6$1,092.4$5.2Operating Earnings (GAAP)$123.7$131.3$(7.6)$426.4$464.7$(38.3)Adjusted Operating Earnings (Non-GAAP)(2)$154.1$152.5$1.6$540.2$528.1$12.1Net Earnings (GAAP)$77.3$96.5$(19.2)$293.6$363.7$(70.1)EBITDA (Non-GAAP)(3)$141.0$155.6$(14.6)$511.5$558.6$(47.1)Adjusted EBITDA (Non-GAAP)(3)$172.6$166.9$5.7$601.6$588.6$13.0Share Repurchases$69.3$40.0$29.3$370.7$154.0$216.7Dividend per share$0.26$0.24$0.02$1.03$0.945$0.08Total Capital Returned to Stockholders$78.9$49.5$29.4$408.8$192.4$216.4 (a) Net leverage ratio is a non-GAAP financial measure as defined pursuant to our credit agreement and discussed under Reconciliations of GAAP to Non-GAAP Financial Measures. (1) GM (Gross Margin) excluding IRC 45X , Adjusted Diluted EPS and Adjusted Diluted EPS excluding IRC 45X benefit are non-GAAP financial measures and discussed under Reconciliations of GAAP to Non-GAAP Financial Measures.(2) Operating Earnings are adjusted for charges that the Company incurs as a result of restructuring and exit activities, impairment of goodwill and indefinite-lived intangibles and other assets, acquisition activities and those charges and credits that are not directly related to operating unit performance. A reconciliation of operating earnings to Non-GAAP Adjusted Earnings are provided in tables under the section titled Business Segment Operating Results.(3) Non-GAAP EBITDA is calculated as net earnings adjusted for depreciation, amortization, interest and income taxes. Non-GAAP Adjusted EBITDA is further adjusted for certain charges such as restructuring and exit activities, impairment of goodwill and indefinite-lived intangibles and other assets, acquisition activities and other charges and credits as discussed under Reconciliations of GAAP to Non-GAAP Financial Measures.Summary of ResultsFourth Quarter Fiscal 2026Net sales for the fourth quarter of fiscal 2026 were $988.0 million, an increase of 1.3% from the prior year fourth quarter net sales of $974.8 million and at the low end of the range of the fourth quarter of fiscal 2026 guidance of $960 million to $1,000 million. The increase compared to prior year quarter was the result of a 4% increase in pricing and a 3% increase in foreign currency translation, partially offset by a 6% decrease in organic volume.Net earnings attributable to EnerSys stockholders (“Net earnings”) for the fourth quarter of fiscal 2026 were $77.3 million, or $2.05 per diluted share, which included an unfavorable highlighted net of tax impact of $42.8 million, or $1.14 per diluted share, from highlighted items described in further detail in the tables shown below, reconciling non-GAAP adjusted financial measures to reported amounts.Net earnings for the fourth quarter of fiscal 2025 were $96.5 million, or $2.41 per diluted share, which included an unfavorable highlighted net of tax impact of $22.0 million, or $0.55 per diluted share, from highlighted items described in further detail in the tables shown below, reconciling non-GAAP adjusted financial measures to reported amounts.Excluding these highlighted items, adjusted Net earnings per diluted share for the fourth quarter of fiscal 2026, on a non-GAAP basis, were $3.19, compared to the guidance of $2.95 to $3.05 per diluted share for the fourth quarter given by the Company on February 4, 2026. These earnings compare to the prior year fourth quarter adjusted Net earnings of $2.97 per diluted share. Please refer to the section included herein under the heading “Reconciliations of GAAP to Non-GAAP Financial Measures” for a discussion of the Company’s use of non-GAAP adjusted financial information, which includes tables reconciling GAAP and non-GAAP adjusted financial measures for the quarters ended March 31, 2026 and March 31, 2025.Fiscal Year 2026Net sales for the twelve months of fiscal 2026 were $3,751.4 million, an increase of 3.7% from the prior year twelve months net sales of $3,617.6 million. This increase was due to a 3% increase in pricing, a 2% increase in foreign currency translation, and a 1% increase in acquisitions, partially offset by a 2% decrease in organic volume.Net earnings for the twelve months of fiscal 2026 were $293.6 million, or $7.70 per diluted share, which included an unfavorable highlighted net of tax impact of $109.4 million, or $2.86 per diluted share, from highlighted items described in further detail in the tables shown below, reconciling non-GAAP adjusted financial measures to reported amounts.Net earnings for the twelve months of fiscal 2025 were $363.7 million, or $8.99 per diluted share, which included an unfavorable highlighted net of tax impact of $46.7 million, or $1.16 per diluted share, from highlighted items described in further detail in the tables shown below, reconciling non-GAAP adjusted financial measures to reported amounts.Adjusted Net earnings per diluted share for the twelve months of fiscal 2026, on a non-GAAP basis, were $10.56. This compares to the prior year twelve months adjusted Net earnings of $10.15 per diluted share. Please refer to the section included herein under the heading “Reconciliations of GAAP to Non-GAAP Financial Measures” for a discussion of the Company’s use of non-GAAP adjusted financial information.Quarterly DividendThe Company announced today that its Board of Directors has approved a quarterly cash dividend $0.2625 per share of common stock. The dividend is payable on July 2, 2026, to holders of record as of June 19, 2026.Balance Sheet and Cash FlowAs of March 31, 2026, cash and cash equivalents were $438.7 million and net debt as defined by our credit facility was $684.1 million. The net leverage ratio at the end of the fourth quarter was 1.1 X, down from 1.3 X in the prior year period due to the impact of lower debt and increased earnings. Capital expenditures during the fourth quarter were $12.8 million, down from $30.2 million in the prior year period. During the fourth quarter, cash from operating activities was $144.0 million, up from $135.2 million in the prior year period. Free cash flow, a non-GAAP financial measure, was $131.2 million, as compared to $105.0 million in the prior year period. The increase in cash from operating activities and the increase in free cash flow were both bolstered by improved primary operating capital during the quarter. Please refer to the section included herein under the heading “Reconciliations of GAAP to Non-GAAP Financial Measures” for a discussion of the Company’s use of non-GAAP adjusted financial information, which includes tables reconciling GAAP and non-GAAP adjusted financial measures for the quarters ended March 31, 2026 and March 31, 2025.The Company also returned approximately $78.9 million to shareholders through $69.3 million in share repurchases and $9.6 million through its quarterly dividend payment in the fourth quarter.First Quarter and Fiscal Year 2027 OutlookIn the first quarter of fiscal 2027, EnerSys expects:Net sales: $915M to $955MIRC 45X benefits to cost of sales: $42M to $47MAdjusted diluted EPS: $2.70 to $2.90*Adjusted diluted EPS, ex 45X benefits: $1.61 to $1.71For the full year fiscal 2027, EnerSys expects:Capital expenditures ~$70M“We closed fiscal year 2026 with strong financial performance, supported by disciplined execution and the benefits of our diversified portfolio,” said Andrea Funk, EnerSys Chief Financial Officer. “Strength in our Data Center, Communications and Aerospace and Defense businesses drove favorable price/mix that eclipsed inflationary cost increases and, along with realignment cost savings, supported our ability to deliver record full-year results. The breadth of our end markets helped offset the ongoing softness in our Motive Power and Transportation markets, where order trends improved sequentially during our fourth quarter.”“We entered fiscal year 2027 with encouraging demand signals. Our first quarter fiscal 2027 outlook reflects typical seasonality, with expected net sales of $915 million to $955 million and adjusted diluted EPS excluding 45X of $1.61 to $1.71. We anticipate continued price/mix strength and benefits from our EnerGize strategic initiatives, as well as strong cash flow generation and disciplined capital allocation, including returning capital to shareholders, which position us to drive earnings growth as demand continues to normalize,” concluded Funk.*Inclusive of IRC 45X Advanced Manufacturing Production Credits.Please refer to the section included herein under the heading “Reconciliations of GAAP to Non-GAAP Financial Measures” for a discussion of the Company’s use of non-GAAP adjusted financial information.Conference Call and Webcast DetailsThe Company will host a conference call to discuss its fourth quarter and full year results at 9:00 AM (ET) Thursday, May 21, 2026. A live broadcast as well as a replay of the call can be accessed via this webcast registration link or the Investor Relations section of the company’s website at https://investor.enersys.com.If you cannot join via webcast, please reach out to investorrelations@enersys.com for dial-in details.About EnerSysEnerSys is a global leader in stored energy solutions for industrial applications and designs, manufactures and distributes energy systems solutions and motive power batteries, specialty batteries, battery chargers, power equipment, battery accessories and outdoor equipment enclosure solutions to customers worldwide. The company goes to market through four lines of business: Energy Systems, Motive Power, Specialty and New Ventures. Energy Systems, which combine power conversion, power distribution, energy storage, and enclosures, are used in the telecommunication, broadband, and utility industries, uninterruptible power supplies, and numerous applications requiring stored energy solutions. Motive power batteries and chargers are utilized in electric forklift trucks and other industrial electric powered vehicles. Specialty batteries are used in aerospace and defense applications, portable power solutions for soldiers in the field, large over-the-road trucks, premium automotive, medical and security systems applications. New Ventures provides energy storage and management systems for various applications including demand charge reduction, utility back-up power, and dynamic fast charging for electric vehicles. EnerSys also provides aftermarket and customer support services to its customers in over 100 countries through its sales and manufacturing locations around the world. To learn more about EnerSys please visit https://www.enersys.com/en/.Caution Concerning Forward-Looking StatementsThis press release, and oral statements made regarding the subjects of this release, contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, or the Reform Act, which may include, but are not limited to, statements regarding EnerSys’ earnings estimates, intention to pay quarterly cash dividends, return capital to stockholders, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts, including statements identified by words such as “believe,” “plan,” “seek,” “expect,” “intend,” “estimate,” “anticipate,” “will,” and similar expressions. All statements addressing operating performance, events, or developments that EnerSys expects or anticipates will occur in the future, including statements relating to sales growth, earnings or earnings per share growth, order intake, backlog, payment of future cash dividends, commodity prices, execution of its stock buyback program, judicial or regulatory proceedings, ability to identify and realize benefits in connection with acquisition and disposition opportunities, and market share, as well as statements expressing optimism or pessimism about future operating results or benefits from its cash dividend, its stock buyback programs, application of Section 45X of the Internal Revenue Code, funding, development and construction of the Company's gigafactory in Greenville, South Carolina, adverse developments with respect to the economic conditions in the U.S. in the markets in which we operate and other uncertainties, including the impact of supply chain disruptions, interest rate changes, inflationary pressures, geopolitical and other developments and labor shortages on the economic recovery and our business and changes in law, regulation or policy that may affect our business, including trade policy and tariffs, and other government priorities or budgets are forward-looking statements within the meaning of the Reform Act. The forward-looking statements are based on management's current views and assumptions regarding future events and operating performance, and are inherently subject to significant business, economic, and competitive uncertainties and contingencies and changes in circumstances, many of which are beyond the Company’s control. The statements in this press release are made as of the date of this press release, even if subsequently made available by EnerSys on its website or otherwise. EnerSys does not undertake any obligation to update or revise these statements to reflect events or circumstances occurring after the date of this press release.Although EnerSys does not make forward-looking statements unless it believes it has a reasonable basis for doing so, EnerSys cannot guarantee their accuracy. The foregoing factors, among others, could cause actual results to differ materially from those described in these forward-looking statements. For a list of other factors which could affect EnerSys’ results, including earnings estimates, see EnerSys’ filings with the Securities and Exchange Commission, including “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations,” and “Forward-Looking Statements,” set forth in EnerSys’ Annual Report on Form 10-K for the fiscal year ended March 31, 2026. No undue reliance should be placed on any forward-looking statements. EnerSysConsolidated Condensed Statements of Income (Unaudited)(In millions, except share and per share data) Quarter endedTwelve months endedMarch 31, 2026March 31, 2025March 31, 2026March 31, 2025Net sales$988.0$974.8$3,751.4$3,617.6Gross profit290.9$303.7$1,097.6$1,092.4Operating expenses148.3$162.7$621.0$608.7Restructuring and other exit charges19.7$5.1$51.0$14.4Intangibles Impairment0.4$0.0$0.4$0.0(Gain) Loss on assets held for sale(1.2)$4.6$(1.2)$4.6Operating earnings123.7$131.3$426.4$464.7Earnings before income taxes99.1$116.3$347.4$406.5Income tax expense21.8$19.8$53.8$42.8Net earnings attributable to EnerSys stockholders$77.3$96.5$293.6$363.7Net reported earnings per common share attributable to EnerSys stockholders:Basic$2.11$2.45$7.84$9.15Diluted$2.05$2.41$7.70$8.99Dividends per common share$0.2625$0.240$1.0275$0.945Weighted-average number of common shares used in reported earnings per share calculations:Basic36,691,48439,369,19037,439,72739,760,829Diluted37,673,89039,982,08238,144,21040,438,579 EnerSysConsolidated Condensed Balance Sheets (Unaudited)(In Thousands, Except Share and Per Share Data) March 31,20262025AssetsCurrent assets:Cash and cash equivalents$438,675$343,131Accounts receivable, net of allowance for doubtful accounts(2026–$8,583; 2025–$8,675)506,072597,942Inventories, net724,690739,994Prepaid and other current assets472,373408,747Total current assets2,141,8102,089,814Property, plant, and equipment, net593,002592,433Goodwill752,424721,073Other intangible assets, net342,898375,430Deferred taxes69,00874,793Other assets104,182117,705Total assets$4,003,324$3,971,248Liabilities and EquityCurrent liabilities:Short-term debt$29,201$28,502Current portion of finance leases998265Accounts payable354,190405,694Accrued expenses419,649340,607Total current liabilities804,038775,068Long-term debt, net of unamortized debt issuance costs1,079,7821,083,541Finance leases2,350592Deferred taxes13,90917,641Other liabilities194,373174,918Total liabilities2,094,4522,051,760Commitments and contingenciesEquity:Preferred Stock, $0.01 par value, 1,000,000 shares authorized, no shares issued or outstanding at March 31, 2026 and at March 31, 2025——Common Stock, $0.01 par value per share, 135,000,000 shares authorized, 57,551,440 shares issued and 36,462,211 shares outstanding at March 31, 2026; 56,839,590 shares issued and 39,192,061 shares outstanding at March 31, 2025576568Additional paid-in capital734,922662,725Treasury stock at cost, 21,089,229 shares held as of March 31, 2026 and 17,647,529 shares held as of March 31, 2025(1,361,585)(988,936)Retained earnings2,743,6352,489,200Accumulated other comprehensive loss(212,264)(247,479)Total EnerSys stockholders’ equity1,905,2841,916,078Nonredeemable noncontrolling interests3,5883,410Total equity1,908,8721,919,488Total liabilities and equity$4,003,324$3,971,248 EnerSysConsolidated Condensed Statements of Cash Flows (Unaudited)(In Thousands) Fiscal year ended March 31,202620252024Cash flows from operating activitiesNet earnings$293,557$363,735$269,096Adjustments to reconcile net earnings to net cash provided by operating activities:Depreciation and amortization113,558100,87692,021Write-off of assets relating to restructuring and other exit charges5,5351,97324,229(Gain) loss on assets held for sale(1,187)4,634—Impairment or disposal of intangible assets40288013,619Derivatives not designated in hedging relationships:Net losses (gains)409(3,136)846Cash proceeds (settlements)673826(255)Provision for doubtful accounts1,4413,2391,873Deferred income taxes14,411(31,925)(29,344)Non-cash interest expense2,1801,9272,450Stock-based compensation37,59427,82530,607Gain on disposal of property, plant, and equipment644791908Losses (gain) on pension settlement9,711(1,548)—Changes in assets and liabilities, net of effects of acquisitions:Accounts receivable104,705(81,795)108,631Inventories25,8881,34375,633Prepaid and other current assets(65,244)(220,003)(112,701)Other assets726(334)6,027Accounts payable(52,627)36,569(15,131)Accrued expenses54,96154,388(8,254)Other liabilities25932(3,226)Net cash provided by (used in) operating activities547,596260,298457,029Cash flows from investing activitiesCapital expenditures(80,074)(121,038)(86,437)Purchase of businesses(12,667)(206,374)(8,270)Proceeds from disposal of property, plant, and equipment4,8591,8702,228Investment in Equity Securities—(10,852)—Net cash used in investing activities(87,882)(336,394)(92,479)Cash flows from financing activitiesNet borrowings (repayments) on short-term debt(192)(259)(231)Proceeds from Revolver borrowings619,563650,000182,500Repayments of Revolver borrowings(412,000)(370,000)(427,500)Proceeds from 2032 Bonds——300,000Repayments of Term Loans(210,000)—(293,889)Debt issuance costs(3,502)—(4,061)Finance lease obligations and other(71)4831,169Option proceeds, net41,9779,45810,786Payment of taxes related to net share settlement of equity awards(8,842)(7,985)(9,166)Purchase of treasury stock(370,685)(153,961)(95,688)Dividends paid to stockholders(38,142)(37,466)(34,480)Other1,191——Net cash (used in) provided by financing activities(380,703)90,270(370,560)Effect of exchange rate changes on cash and cash equivalents16,533(4,367)(7,331)Net increase (decrease) in cash and cash equivalents95,5449,807(13,341)Cash and cash equivalents at beginning of year343,131333,324346,665Cash and cash equivalents at end of year$438,675$343,131$333,324Reconciliations of GAAP to Non-GAAP Financial MeasuresThis press release contains financial information determined by methods other than in accordance with U.S. Generally Accepted Accounting Principles, ("GAAP"). EnerSys' management uses the non-GAAP measures “adjusted Net earnings”, “adjusted diluted EPS”, "reported Net earnings excluding (ex) IRC 45X benefit", "adjusted Net earnings excluding (ex) IRC 45X benefit", "reported Net earnings (loss) per share excluding (ex) IRC 45X benefit", " adjusted diluted EPS excluding (ex) IRC 45X benefit", "GM excluding (ex) 45X", "adjusted operating earnings", "adjusted gross profit", "adjusted gross margin", "EBITDA", “adjusted EBITDA”, "adjusted EBITDA per credit agreement", "net debt", "net leverage ratio", "free cash flow", and "adjusted free cash flow conversion" as applicable, in their analysis of the Company's performance. Adjusted Net earnings, adjusted gross profit, adjusted gross margin, and adjusted operating earnings measures, as used by EnerSys in past quarters and years, adjusts Net earnings, gross profit, gross margin, and operating earnings determined in accordance with GAAP to reflect changes in financial results associated with the Company's restructuring initiatives and other highlighted charges and income items. Reported Net earnings excluding (ex) IRC 45X benefit, adjusted Net earnings excluding (ex) IRC 45X benefit, reported Net earnings (loss) per share excluding (ex) IRC 45X benefit, adjusted diluted EPS excluding (ex) IRC 45X benefit, and GM excluding (ex) IRC 45X benefit as used by EnerSys in past quarters and years, adjusted Net earnings, adjusted Net earnings, Net earnings (loss) per share, adjusted diluted EPS, and gross margin to reflect the financial impact of IRC 45X. Adjusted EBITDA is a key performance measure that our management uses to assess our operating performance. Because adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we use this measure as an overall assessment of our performance, to evaluate the effectiveness of our business strategies and for business planning purposes. We calculate adjusted EBITDA as net income before interest income, interest expense, other (income) expense net, provision (benefit) for income taxes, depreciation and amortization, further adjusted to exclude restructuring and exit activities, impairment of goodwill, indefinite-lived intangibles and other assets, acquisition activities and those charges and credits that are not directly related to operating unit performance. EBITDA is calculated as net income before interest income, interest expense, other (income) expense net, provision (benefit) for income taxes, depreciation and amortization. We define adjusted EBITDA per credit agreement as net earnings determined in accordance with GAAP for interest, taxes, depreciation and amortization, and certain charges or credits as permitted by our credit agreements, that were recorded during the periods presented. We define non-GAAP net debt as total debt, finance lease obligations and letters of credit, net of all cash and cash equivalents, as defined in the Fourth Amended Credit Facility on the balance sheet as of the end of the most recent fiscal quarter. We define non-GAAP net leverage ratio as non-GAAP net debt divided by last twelve months adjusted EBITDA per credit agreement. We define free cash flow as net cash provided by or used in operating activities less capital expenditures. We define adjusted free cash flow conversion as free cash flow divided by adjusted net earnings. Free cash flow and adjusted free cash flow conversion are used by investors, financial analysts, rating agencies and management to help evaluate the Company’s ability to generate cash to pursue incremental opportunities aimed toward enhancing shareholder value. Management believes the presentation of these financial measures reflecting these non-GAAP adjustments provides important supplemental information in evaluating the operating results of the Company as distinct from results that include items that are not indicative of ongoing operating results and overall business performance; in particular, those charges that the Company incurs as a result of restructuring activities, impairment of goodwill and indefinite-lived intangibles and other assets, acquisition activities and those charges and credits that are not directly related to operating unit performance, such as significant legal proceedings, amortization of intangible assets, tax valuation allowance changes, withholding tax from repatriation of prior period earnings, and impacts of changes or reform to income tax laws. Because these charges are not incurred as a result of ongoing operations, or are incurred as a result of a potential or previous acquisition, they are not as helpful a measure of the performance of our underlying business, particularly in light of their unpredictable nature and are difficult to forecast. Although we exclude the amortization of purchased intangibles from these non-GAAP measures, management believes that it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation.Income tax effects of non-GAAP adjustments are calculated using the applicable statutory tax rate for the jurisdictions in which the charges (benefits) are incurred, while taking into consideration any valuation allowances. For those items which are non-taxable, the tax expense (benefit) is calculated at 0%.EnerSys does not provide a quantitative reconciliation of the Company’s projected range for adjusted diluted EPS and adjusted diluted EPS excluding (ex) IRC 45X benefit for the fourth quarter of fiscal 2026 to diluted earnings per share, which is the most directly comparable GAAP measure, in reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K. EnerSys' adjusted diluted EPS and adjusted diluted EPS without IRC 45X benefit guidance for the fourth quarter of fiscal 2026 excludes certain items, including but not limited to certain non-cash, large and/or unpredictable charges and benefits, charges from restructuring and exit activities, impairment of goodwill and indefinite-lived intangibles, acquisition and disposition activities, legal judgments, settlements, or other matters, and tax positions, that are inherently uncertain and difficult to predict, can be dependent on future events that are less capable of being controlled or reliably predicted by management and are not part of the Company's routine operating activities can be dependent on future events that are less capable of being controlled or reliably predicted by management and are not part of the Company's routine operating activities. Due to the uncertainty of the occurrence or timing of these future excluded items, management cannot accurately forecast many of these items for internal use and therefore cannot create a quantitative adjusted diluted EPS and adjusted diluted EPS excluding (ex) IRC 45X benefit for the first quarter of fiscal 2027 to diluted earnings per share reconciliation without unreasonable efforts.These non-GAAP disclosures have limitations as an analytical tool, should not be viewed as a substitute for operating earnings, Net earnings or net income determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Management believes that this non-GAAP supplemental information will be helpful in understanding the Company's ongoing operating results. This supplemental presentation should not be construed as an inference that the Company's future results will be unaffected by similar adjustments to Net earnings determined in accordance with GAAP.A reconciliation of non-GAAP adjusted operating earnings is set forth in the table below, providing a reconciliation of non-GAAP adjusted operating earnings to the Company’s reported operating results for its business segments. Corporate and other includes amounts managed on a company-wide basis and not directly allocated to any reportable segments, primarily relating to IRC 45X Advanced Manufacturing Production Credits. Also, included are start up costs for exploration of a new lithium plant as well as start-up operating expenses from the New Ventures operating segment.Business Segment Operating ResultsQuarter ended($ millions)March 31, 2026Energy SystemsMotive PowerSpecialtyCorporate and otherTotalNet Sales$425.7$370.1$192.2$—$988.0Operating Earnings23.745.913.240.9$123.7Inventory adjustment relating to exit activities and step up to fair value relating to recent acquisitions—1.1——1.1Restructuring and other exit charges12.16.70.9—19.7Impairment of indefinite-lived intangibles0.4———0.4(Gain) Loss on assets held for sale—(1.2)——(1.2)Amortization of intangible assets5.90.12.4—8.4Accelerated Stock Compensation Expense0.2—0.4—0.6Other0.1—1.3—1.4Adjusted Operating Earnings$42.4$52.6$18.2$40.9$154.1Operating Margin5.6%12.4%6.8%NM12.5%Adjusted Operating Margin10.0%14.2%9.4%NM15.6%Quarter ended($ millions)March 31, 2025Energy SystemsMotive PowerSpecialtyCorporate and otherTotalNet Sales$398.8$392.3$177.8$5.9$974.8Operating Earnings27.057.910.236.2$131.3Inventory adjustment relating to exit activities0.3—0.3—0.6Restructuring and other exit charges1.42.21.5—5.1(Gain) Loss on assets held for sale—4.6——4.6Amortization of intangible assets5.80.12.4—8.3Other0.21.70.7—2.6Adjusted Operating Earnings$34.7$66.5$15.1$36.2$152.5Operating Margin6.8%14.8%5.7%NM13.5%Adjusted Operating Margin8.7%17.0%8.5%NM15.6%Increase (Decrease) as a % from prior year quarterEnergy SystemsMotive PowerSpecialtyCorporate and otherTotalNet Sales6.7%(5.7)%8.1%(99.4)%1.3%Operating Earnings(12.0)(20.8)28.913.0(5.8)Adjusted Operating Earnings22.5(20.9)19.813.01.1NM = Not Meaningful Twelve months ended($ millions)March 31, 2026Energy SystemsMotive PowerSpecialtyCorporate and otherTotalNet Sales$1,651.3$1,431.0$665.1$4.0$3,751.4Operating Earnings$85.3$167.0$41.4$132.7$426.4Inventory adjustment relating to exit activities and step up to fair value relating to recent acquisitions—2.3——2.3Restructuring and other exit charges23.424.03.50.151.0Amortization of intangible assets23.50.49.6—33.5Impairment of indefinite-lived intangibles0.4———0.4(Gain) Loss on assets held for sale—(1.2)——(1.2)Accelerated stock compensation expense5.63.41.810.8Other7.33.95.8—17.0Adjusted Operating Earnings$145.5$199.8$62.1$132.8$540.2Operating Margin5.2%11.7%6.2%NM11.4%Adjusted Operating Margin8.8%14.0%9.3%NM14.4%Twelve months ended($ millions)March 31, 2025Energy SystemsMotive PowerSpecialtyCorporate and otherTotalNet Sales$1,531.1$1,484.1$593.6$8.8$3,617.6Operating Earnings$72.7$220.1$16.8$155.1$464.7Inventory step up to fair value relating to recent acquisitions0.3—3.3—3.6Restructuring and other exit charges6.05.72.7—14.4Losses on assets held for sale—4.6——4.6Amortization of intangible assets23.60.77.5—31.8Other0.61.76.7—9.0Adjusted Operating Earnings$103.2$232.8$37.0$155.1$528.1Operating Margin4.7%14.8%2.8%NM12.8%Adjusted Operating Margin6.7%15.7%6.2%NM14.6%Increase (Decrease) as a % from prior yearEnergy SystemsMotive PowerSpecialtyCorporate and otherTotalNet Sales7.8%(3.6)%12.1%(52.6)%3.7%Operating Earnings17.4(24.2)NM(14.4)(8.2)Adjusted Operating Earnings40.9(14.2)(67.8)(14.3)2.3The table below presents a reconciliation of Net Earnings to EBITDA and Adjusted EBITDA:Quarter endedTwelve months ended($ millions)($ millions)March 31, 2026March 31, 2025March 31, 2026March 31, 2025Net Earnings$77.3$96.5$293.6$363.7Depreciation20.618.280.169.1Amortization8.48.333.531.8Interest12.912.850.551.2Income Taxes21.819.853.842.8EBITDA141.0155.6511.5558.6Non-GAAP adjustments31.611.390.130.0Adjusted EBITDA$172.6$166.9$601.6$588.6The following table provides the non-GAAP adjustments shown in the reconciliation above:Quarter endedTwelve months ended($ millions)($ millions)March 31, 2026March 31, 2025March 31, 2026March 31, 2025Inventory adjustment relating to exit activities and step up to fair value relating to recent acquisitions1.10.62.33.6Restructuring and other exit charges19.75.151.014.4Impairment of indefinite lived intangible asset0.4—0.4—Loss(Gain) on pension settlement9.6(1.6)9.6(1.6)Loss(Gain) on assets held for sale(1.2)4.6(1.2)4.6Accelerated stock compensation expense0.6—10.8—Other1.42.617.29.0Non-GAAP adjustments$31.6$11.3$90.1$30.0The table below presents a reconciliation of Gross Profit and Gross Margin to Adjusted Gross Profit and Adjusted Gross Margin and Gross Profit and Gross Margin to Gross Profit excluding (ex) IRC 45X and Gross Margin excluding (ex) IRC 45X:Quarter endedTwelve months ended($ millions)($ millions)March 31, 2026March 31, 2025March 31, 2026March 31, 2025Gross Profit as reported$290.9$303.7$1,097.6$1,092.4Inventory adjustment relating to exit activities and step up to fair value relating to recent acquisitions1.10.72.33.7Adjusted Gross Profit292.0304.41,099.81,096.1Gross Margin29.4%31.2%29.3%30.2%Inventory adjustment relating to exit activities and step up to fair value relating to recent acquisitions0.1%—%0.1%0.1%Adjusted Gross Margin29.5%31.2%29.4%30.3%Gross Profit$290.9$303.7$1,097.6$1,092.4IRC 45X Benefit46.244.1158.6184.6Gross Profit ex 45X244.7259.6939.0907.8Gross Margin29.4%31.2%29.3%30.2%IRC 45X Benefit4.7%4.5%4.2%5.1%Gross Margin ex 45X24.7%26.7%25.1%25.1%The table below presents a reconciliation of Operating Cash Flow to Free Cash Flow and Free Cash Flow Conversion percentages:Quarter endedTwelve months ended($ millions)($ millions)March 31, 2026March 31, 2025March 31, 2026March 31, 2025Net cash provided by (used in) operating activities$144.0$135.2$547.6$260.3Less Capital Expenditures(12.8)(30.2)(80.0)(121.0)Free Cash Flow131.2105.0467.6139.3Quarter endedTwelve months ended($ millions)($ millions)March 31, 2026March 31, 2025March 31, 2026March 31, 2025Net cash provided by (used in) operating activities$144.0$135.2$547.6$260.3Net earnings77.396.5293.6363.7Operating cash flow conversion %186.3%140.1%186.5%71.6%Free Cash Flow131.2105.0467.6139.3Net earnings77.396.5293.6363.7Free cash flow conversion %169.7%108.8%159.3%38.3%The following table provides a reconciliation of Net earnings to EBITDA (non-GAAP) and adjusted EBITDA (non-GAAP) per credit agreement for March 31, 2026 and March 31, 2025 to calculate our net leverage ratio, in connection with the Fourth Amended Credit Facility:Last twelve monthsMarch 31, 2026March 31, 2025(in millions, except ratios)Net earnings as reported$293.6$363.7Add back:Depreciation and amortization113.6$100.9Interest expense50.5$51.1Income tax expense53.842.8EBITDA (non-GAAP)$511.5$558.5Adjustments per credit agreement definitions(1)91.956.2Adjusted EBITDA (non-GAAP) per credit agreement(1)$603.4614.7Total net debt(2)$684.1781.1Leverage ratios:Total net debt/credit adjusted EBITDA ratio1.1 X1.3 X(1)The $91.9 million adjustment to EBITDA in the last twelve months ending March 31, 2026 primarily related to $37.6 million of non-cash stock compensation and $53.2 million of restructuring and other exit charges. The $56.2 million adjustment to EBITDA in the last twelve months ending March 31, 2025 primarily related to $27.8 million of non-cash stock compensation, $22.0 million of restructuring and other exit charges, impairment of indefinite-lived intangibles and write-down of other current assets of $5.5 million.(2)Debt includes finance lease obligations and letters of credit and is net of all U.S. cash and cash equivalents and foreign cash and investments, as defined in the Fourth Amended Credit Facility. In the last twelve months ending March 31, 2026 and March 31, 2025, the amounts deducted in the calculation of net debt were U.S. cash and cash equivalents and foreign cash investments of $438.7 million, and in fiscal 2025, were $343.1 million.Included below is a reconciliation of historical non-GAAP adjusted Net earnings to reported amounts. Non-GAAP adjusted operating earnings and historical Net earnings are calculated excluding restructuring and other highlighted charges and credits. The following tables provide additional information regarding certain non-GAAP measures:Quarter ended(in millions, except share and per share amounts)March 31, 2026March 31, 2025Net earnings reconciliationAs reported Net Earnings$77.3$96.5Non-GAAP adjustments:Inventory adjustment relating to exit activities1.1(1)0.6(1)Impairment of indefinite-lived intangibles0.4—Restructuring and other exit charges19.7(2)5.1(2)Loss(gain) on assets held for sale(1.2)(4)4.6(4)Amortization of identified intangible assets8.4(3)8.3(3)Accelerated Stock Compensation Expense0.6(5)—(5)Other1.4(6)2.6(6)Income tax adjustment of benefit from tax law changes and litigation—(1.6)Loss(gain) on pension settlement9.62.2Swiss income tax goodwill expiration—2.2Valuation allowance from exit activities4.2—Income tax expense on intercompany sale of IP5.92.5Other income tax expense items1.8—Income tax effect of above non-GAAP adjustments(9.0)(4.4)Non-GAAP adjusted Net earnings$120.2$118.6Net Earnings excluding (ex) IRC 45X benefitAs Reported Net Earnings$77.3$96.5IRC 45X Benefit46.244.1Reported Net Earnings excluding (ex) IRC 45X benefit$31.1$52.4Non-GAAP adjusted Net Earnings excluding (ex) IRC 45X benefitNon-GAAP Adjusted Net Earnings$120.2$118.6IRC 45X Benefit46.244.1Non-GAAP adjusted Net Earnings excluding (ex) IRC 45X benefit$74.0$74.5Outstanding shares used in per share calculationsBasic36,691,48439,369,190Diluted37,673,89039,982,082Reported Net earnings (Loss) per share:Basic$2.11$2.45Diluted$2.05$2.41Dividends per common share$0.2625$0.24Non-GAAP adjusted Net earnings per share:Basic$3.27$3.01Diluted$3.19$2.97Reported Net Earnings (Loss) per share excluding (ex) IRC 45X benefitBasic$0.85$1.33Diluted$0.83$1.31Non-GAAP adjusted Net Earnings (Loss) per share excluding (ex) IRC 45X benefitBasic$2.02$1.89Diluted$1.96$1.86The following table provides the line of business allocation of the non-GAAP adjustments of items relating operating earnings (that are allocated to lines of business) shown in the reconciliation above:Quarter ended($ millions)March 31, 2026March 31, 2025Pre-taxPre-tax(1) Inventory adjustment relating to exit activities - Energy Systems—0.3(1) Inventory adjustment relating to exit activities - Motive1.1—(1) Inventory adjustment relating to exit activities - Specialty—0.3(2) Restructuring and other exit charges - Energy Systems12.11.4(2) Restructuring and other exit charges - Motive Power6.72.2(2) Restructuring and other exit charges - Specialty0.91.5(2) Restructuring and other exit charges - Corporate Other——(3) Amortization of identified intangible assets - Energy Systems5.95.8(3) Amortization of identified intangible assets - Motive Power0.10.1(3) Amortization of identified intangible assets - Specialty2.42.4(4) Loss(gain) on asset held for sale - Motive(1.2)4.6(5) Accelerated Stock Compensation Expense - Energy Systems0.2—(5) Accelerated Stock Compensation Expense - Specialty0.4—(6) Other - Energy Systems0.10.2(6) Other - Motive—2.4(6) Other - Specialty1.3—Total Non-GAAP adjustments$30.0$21.2Twelve months ended(in millions, except share and per share amounts)March 31, 2026March 31, 2025Net Earnings reconciliationAs reported Net Earnings$293.6$363.7Non-GAAP adjustments:Inventory adjustment relating to exit activities and step up to fair value relating to recent acquisitions2.3(1)3.6(1)Impairment of indefinite-lived intangibles0.4—Restructuring and other exit charges51.0(2)14.4(2)Amortization of identified intangible assets33.5(3)31.8(3)Accelerated Stock Compensation Expense10.8(4)—(4)Loss(gain) on assets held for sale(1.2)(5)4.6(5)Other17.2(6)9.0(6)Loss(gain) on pension settlement9.6(1.6)Income tax adjustment of benefit from tax law changes and litigation—(4.6)Swiss income tax goodwill expiration—2.2Valuation allowance from exit activities4.2—Income tax expense on intercompany sale of IP5.92.5Other income tax expense items1.8—Income tax effect of above non-GAAP adjustments(26.1)(15.2)Non-GAAP adjusted Net Earnings$403.0$410.4Net Earnings without IRC 45XAs Reported Net Earnings$293.6$363.7IRC 45X Benefit158.6184.6Reported Net Earnings without IRC 45X Benefit$135.0$179.1Non-GAAP adjusted Net Earnings without IRC 45XNon-GAAP Adjusted Net Earnings$403.0$410.4IRC 45X Benefit158.6184.6Non-GAAP adjusted Net Earnings without IRC 45X Benefit$244.4$225.8Outstanding shares used in per share calculationsBasic37,439,72739,760,829Diluted38,144,21040,438,579Reported Net Earnings (Loss) per share:Basic$7.84$9.15Diluted$7.70$8.99Dividends per common share$1.0275$0.945Non-GAAP adjusted Net Earnings per share:Basic$10.76$10.32Diluted$10.56$10.15Reported Net Earnings (Loss) per share without IRC 45X benefitBasic$3.60$4.50Diluted$3.54$4.43Non-GAAP adjusted Net Earnings (Loss) per share without IRC 45X benefitBasic$6.53$5.68Diluted$6.41$5.58The following table provides the line of business allocation of the non-GAAP adjustments of items relating operating earnings (that are allocated to lines of business) shown in the reconciliation above:Twelve months ended($ millions)March 31, 2026March 31, 2025Pre-taxPre-tax(1) Inventory adjustment relating to exit activities - Energy Systems2.30.3(1) Inventory adjustment relating to exit activities and step up to fair value relating to recent acquisitions - Specialty—3.3(2) Restructuring and other exit charges - Energy Systems23.46.0(2) Restructuring and other exit charges - Motive Power24.05.7(2) Restructuring and other exit charges - Specialty3.52.7(2) Restructuring and other exit charges - Corporate Other0.1—(3) Amortization of identified intangible assets - Energy Systems23.523.6(3) Amortization of identified intangible assets - Motive Power0.40.7(3) Amortization of identified intangible assets - Specialty9.67.5(4) Accelerated stock compensation expense - Energy Systems5.6—(4) Accelerated stock compensation expense - Motive Power3.4—(4) Accelerated stock compensation expense - Specialty1.8—(5) Losses(gains) on assets held for sale(1.2)4.6(6) Other - Energy Systems7.30.6(6) Other - Motive Power3.91.7(6) Other - Specialty5.86.7(6) Other - N/A0.2$—Total Non-GAAP adjustments$113.6$63.4View source version on businesswire.com: https://www.businesswire.com/news/home/20260520515143/en/Lisa Hartman LangellVice President, Investor Relations and Corporate CommunicationsEnerSys610-236-4040E-mail: investorrelations@enersys.comSource: EnerSys