EnerSys (NYSE:ENS) Q3 2015 Earnings Conference Call - Final Transcript

Feb 05, 2015 • 09:00 am ET

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EnerSys (NYSE:ENS) Q3 2015 Earnings Conference Call - Final Transcript

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Presentation
Operator
operator

Good morning, ladies and gentlemen, and welcome to the EnerSys Third Quarter 2015 Earnings Call. (Operator Instructions) As a reminder, this conference call is being recorded.

I would now like to turn the call over to your host, Mr. John Craig, Chairman and Chief Executive Officer. Mr. Craig, you may begin.

Executive
John Craig

Thank you, Bridgette. Good morning, everyone, and thank you for joining us today. Joining me on the phone this morning is Dave Shaffer, our President and Chief Operating Officer; along with Mike Schmidtlein, our Chief Financial Officer. Last night, we posted on our website, slides that we're going to represent during the call this morning. So if you didn't get a chance to see this information, you may want to go to our Investor Relations tab on our website at www.enersys.com.

Before we get into the details of our third quarter results, I'm going to ask Mike Schmidtlein to cover information regarding forward statements. Mike?

Executive
Michael Schmidtlein

Thank you, John, and good morning to everyone. (Forward-Looking Cautionary Statements) Now let me turn it back to you, John.

Executive
John Craig

Thanks, Mike. Please refer to Slide 3, and you'll see the reported details of our third quarter results. Our sales for the quarter were down 5% to $612 million compared to the prior year, mainly due to the impact of foreign exchange rates. In spite of the lower revenue, as well as higher lead cost, we were able to achieve a record third quarter adjusted earnings per share of $1.09, which exceeded our guidance of $1.04 to $1.08 per share. On a year-over-year basis, our earnings per share were up $0.02 or 2%.

I continue to be impressed with the record results from our Europe, Middle Eastern and Africa business. Year-over-year, our third quarter organic volume in EMEA was up 6%, driven by strong reserve power sales and positive pricing of 1%. EMEA's operating earnings are up 30% for the quarter as compared to the prior year third quarter to $28 million, and up 57% for the first 9 months of this year -- fiscal year, at $83 million.

And I want to focus on our current business activities and fourth quarter guidance. Our in current -- coming order rate for motive power are up in the Americas and Asia and are flat in the EMEA region. The 3 months electric fork truck orders for October through December are up 13% globally compared to the prior year.

In reserve power, we continue to see sizable telecommunications orders for replacement in 4G in our EMEA region. In the Americas, reserve power orders are down year-over-year, mainly due to reduced orders from a major telecom company.

As noted on prior investor calls, our Asian operation continue to have reduced volume versus prior year, given our exit from a large low-margin contract we have. Also in Asia, during fiscal 2015, we have experienced additional cost as we transitioned from a Chengdu facility to our new, much larger plant in Guiyu. These added costs will subside as we complete