EnerSys gets a boost after restructuring

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A Berks County-based corporation learned well from the recession.

“We have followed the general ups and downs of the economy, but the recession was good to us. It forced us to look at how we were operating, and we did some restructuring and things bounced back,” said John Craig, president and CEO of EnerSys, which has its world headquarters in Reading.

According to Craig, EnerSys, a stored energy company that makes backup power systems, was created in 2000 with the $330 million buyout of a company called Yuasa Battery Inc. of Japan. Craig, who had been working for Yuasa since 1994, led the transaction as Yuasa sold its sealed lead acid business to EnerSys.

EnerSys has annual revenue of $2.4 billion and supplies batteries for military applications, catering to aviation and defense industries. Other commercial clients include offices, hospitals and telecommunications companies.

“This company bought out about 34 companies and goes back to the 1800s,” said Craig, who also chairs the board of directors for EnerSys.

The company’s website, www.enersys.com, noted that the industrial battery manufacturer became EnerSys in 2001 and then became a publicly listed entity on the New York Stock Exchange in 2004.

The company’s history dates to the late 1800s in Philadelphia with the establishment of The Electric Storage Battery Co. The company’s first chloride accumulator battery was introduced at a time when electricity was new and exciting.

In its more than 100 years in business, the battery maker, now known as EnerSys, has dabbled in a multitude of industries, has had its share of name changes and has seen its products evolve, advance and gain demand.

“When Yuasa sold its Americas division to EnerSys, our sales were 90 percent in the U.S., and now our sales are 40 percent in the U.S., and that is because we keep getting more customers throughout the world,” Craig said. “We are focused on customers, and we have great people that know and understand what our customers want and need.”

FOOTPRINT IN 100 NATIONS

EnerSys has two other bases for its operations, with an Asian headquarters in Singapore and European headquarters in Zurich. It has 32 manufacturing plants around the world, including a Horsham location that builds batteries for military bombs.

With 9,000 employees worldwide, EnerSys does business in about 100 countries and has found renewed economic growth with its restructuring initiative and the position it takes on “going green.” The company’s lead plastic batteries are made 90 percent from recycled materials.

“Using recycled and junk batteries has been good from an economic standpoint. It’s also required for the environment,” taking old, used batteries and turning them back into a viable product, Craig said.

At the end of May, EnerSys announced fourth quarter net earnings for fiscal 2013 of $37.7 million or 77 cents per diluted share, a decline from the $45.4 million or 94 cents per diluted share last year. It attributed this decline in earnings to commodity costs (rise in lead prices, for example) and less sales revenue from last year to this year.

In a press release, Craig said, “In spite of the sequential quarterly increase in commodity costs, we were able to maintain our operating earnings above our 10 percent minimum target. Orders in fiscal 2014 have been trending positively, and we expect continued strong operating results in our first quarter of fiscal 2014.”

Tom O’Neill, vice president and treasurer of EnerSys, reported that fiscal 2013 for the company ended on March 31, and on May 28, the company reported a rise in adjusted earnings per share to $3.55, an increase from fiscal 2012 when the company announced adjusted earnings per share of $3.03.

“We had made changes to our sales, admin staff and manufacturing capacity around the world,” O’Neill said of restructuring efforts.

EXPANSION, ACQUISTION PLANS

Craig said he anticipates that annual revenue in the next couple of years will exceed $4 billion as the company continues to acquire more operations, establishes itself in new geographic locations and produces more cost-effective batteries and other battery-related products.

“We constantly have new customers coming in, willing to pay a better price than maybe even what our competitors are offering,” Craig said. “We want to provide the best value to our customers and pride ourselves on being easy to do business with.”

O’Neill said that the company has continued expansion and acquisition plans on top of its already growing market in locations such as Africa, South America and Europe.

“We have a promising future ahead with new products like, for instance, the OptiGrid solution, a large stored energy system that holds a megawatt of stored energy and is designed for utilities to use for renewable energy storage,” O’Neill said, adding the company has a demo site in Vermont for the product.

“You have a period of time considered the peak time for energy usage, and this is good for utilities that can have this system on hand to store energy for when it is most needed,” he said. “We want to be all around the world with our products, but especially in the faster growing industries and regions of the world.”

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