EnerSys Announces Restructuring of European Operations
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READING, Pa., May 23 / -- EnerSys (NYSE:ENS), the world's largest manufacturer, marketer, and distributor of industrial batteries, who recently announced the acquisition of Energia AD in Bulgaria, today announced a plan, subject to consultation with the appropriate labor representatives, to restructure certain of its European production and commercial operations (the "Restructuring"). In part, the Restructuring will facilitate the integration of Energia AD into EnerSys' (the "Company") operations. Energia not only provides the Company additional access to the rapidly growing Eastern European and Russian markets, but it also provides an additional low-cost manufacturing platform for the Company.
The Restructuring, approved today by the board of directors of the Company, is designed to improve operational efficiencies and eliminate redundant costs primarily attributable to the Energia transaction. The Restructuring will commence upon the completion of the requisite consultations, and the Company expects to substantially complete these actions by the end of the Company's current fiscal year, which ends on March 31, 2008.
As a result of the Restructuring, the Company expects to incur cash expenses of approximately $12 million, primarily for employee severance-related payments, and non-cash expenses of approximately $5 million, primarily for fixed asset write-offs. Approximately $15 million will be charged to the Company's results of operations during fiscal year 2008, of which about $10 million will impact first quarter results with an additional impact of between $1 and $2 million per quarter for the remainder of fiscal 2008. The remaining expenses of approximately $2 million will be charged to the Company's results of operations during fiscal year 2009. Cost savings realized from the Restructuring are anticipated to be approximately $5 million in fiscal 2008 and in excess of $10 million in fiscal 2009.
The Energia acquisition is expected to be accretive by approximately $0.03 per share in fiscal 2008 and in excess of $0.07 per share in fiscal 2009. These per share results include roughly 60 percent of the total cost savings from the Restructuring, while they exclude the anticipated $17 million in earnings charges associated with these actions, equivalent to $0.21 per share in fiscal 2008 and $0.03 per share in fiscal 2009. The Restructuring's remaining cost savings benefits will be included in the operating results of the Company's existing European business.
For more information, contact Richard Zuidema, executive vice president, EnerSys, P.O. Box 14145, Reading, PA 19612-4145, USA. Tel: 800-538-3627; Website: www.enersys.com/ .
About EnerSys:
EnerSys, the world leader in stored energy solutions for industrial applications, manufactures and distributes reserve power and motive power batteries, chargers, power equipment, and battery accessories to customers worldwide. Motive power batteries are utilized in electric forklift trucks and other commercial electric powered vehicles. Reserve power batteries are used in the telecommunication and utility industries, uninterruptible power suppliers, and numerous applications requiring standby power. The company also provides aftermarket and customer support services to its customers from over 100 countries through its sales and manufacturing locations around the world.
FCMN Contact: rlufkin@simongroup.com
Source: EnerSys
Web site: www.enersys.com/
