EnerSys
For the period ended Sep 28, 2025. Filed Nov 5, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 28, 2025 · Filed Nov 5, 2025
ENS$147.02+3.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-29; filed 2025-08-06.
0001289308-25-000034
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-28; filed 2025-11-05.
0001628280-25-049582
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 170 previous paragraphs and 179 current paragraphs.
114 unchanged; 47 reworded; 13 added; 8 removed; 1 previous and 5 current paragraphs rearranged.
Tables are not compared: 10 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
In the first quarter of fiscal year 2025, the Company entered into a fifth amendment to the 2017 Credit Facility (as amended, the “Fifth Amended Credit Facility”). The Fifth Amended Credit Facility replaces the Canadian Dollar Offered Rate ("CODR”) with term CORRA in the calculation of interest for borrowings denominated in Canadian Dollars.
Current report
During the second quarter of fiscal 2026, the Company entered into the sixth amendment to the 2017 Credit Facility (as amended, the “Sixth Amended Credit Facility”). The Sixth Amended Credit Facility provides (i) an upsized revolving credit facility in an aggregate committed amount of $1.0 billion (the “ Third Amended Revolver”), which represents an increase of $150 million from the existing revolving credit facility and which matures on September 30, 2030 and (ii) certain other modifications to the existing credit agreement as further set forth in the Sixth Amended Credit Facility. In connection with the Sixth Amended Credit Facility, (i) all of the outstanding term loans (including accrued and unpaid interest thereon) and (ii) all accrued and unpaid interest and fees on the outstanding revolving loans, in each case, under the existing credit agreement were repaid in full.
Current report
During the six months of fiscal 2026, we purchased 2,375,741 shares for $217.8 million.
Current report
Net sales increased $107.7 million or 6.2% in the six months of fiscal 2026 as compared to the six months of fiscal 2025. This increase was due to a 2% increase in acquisitions, a 2% increase in pricing, 1% increase in organic volume, and a 1% increase from foreign currency translation.
Current report
Net sales of our Energy Systems segment in the second quarter of fiscal 2026 increased $52.6 million or 13.8% compared to the second quarter of fiscal 2025. This increase was due to an 10% increase in organic volume, a 3% increase in pricing, and a 1% increase from foreign currency translation. Net sales of our Energy Systems segment in the six months of fiscal 2026 increased $83.0 million or 11.2% compared to the six months of fiscal 2025. This increase was due to a 8% increase in organic volume, a 2% increase in pricing, and a 1% increase from foreign currency translation. This increase in sales for the quarter and six months is primarily a result of continuing robust demand from data center and industrial customers and recovering demand in communications.
Current report
Net sales of our Specialty segment in the second quarter of fiscal 2026 increased by $22.0 million or 16.3% compared to the second quarter of fiscal 2025. The increase was primarily due to a 7% increase from acquisitions, a 7% increase in organic volume, a 1% increase in pricing, and a 1% increase from foreign currency translation. Net sales of our Specialty segment in the six months of fiscal 2026 increased by $44.8 million or 17.2% compared to the six months of fiscal 2025. The increase was primarily due to a 15% increase from acquisitions, a 1% increase in organic volume, and a 1% increase from foreign currency translation. This increase in sales for the quarter and six months was primarily driven by increased volumes in Aerospace and Defense including impacts from the Bren-Tronics acquisition.
Current report
Selling expenses, a main component of operating expenses, increased $2.6 million or 4.6% in the second quarter of fiscal 2026 compared to the second quarter of fiscal 2025, and decreased 18 basis points as a percentage of net sales. In the six months of fiscal 2026, selling expenses increased by $6.1 million or 5.6% compared to the six months of fiscal 2025 and decreased 3 basis points as a percentage of net sales.
Current report
During the six months of fiscal 2026, the Company recorded cash charges of $0.8 million relating primarily to site cleanup.
Current report
The Specialty operating earnings, as a percentage of sales, increased 380 basis points and increased 320 basis points in the second quarter and six months of fiscal 2026, respectively, compared to the second quarter and six months of fiscal 2025. The increase for the quarter is a result of accretive mix benefit of strong demand in Aerospace and Defense including contributions from the Bren-Tronics acquisition, as well as improved price/mix in both Transportation and Aerospace and Defense and lower manufacturing costs and operating expenses
Current report
Interest expense of $23.5 million in the six months of fiscal 2026 (net of interest income of $6.4 million) was flat compared to interest expense of $23.5 million in the six months of fiscal 2025 (net of interest income of $1.8 million).
Current report
On August 26, 2024, the U.S. Tax Court issued a ruling in Varian Medical Systems, Inc. v. Commissioner ("Varian"). The ruling related to the U.S. taxation of deemed foreign dividends in the transition tax of the Tax Cuts and Jobs Act (“Tax Act”) which was originally recorded in fiscal 2018. The impact of the ruling was included in our fiscal 2025 results.
Current report
In the first quarter of fiscal year 2025, the Company entered into a fifth amendment to the 2017 Credit Facility (as amended, the “Fifth Amended Credit Facility”). The Fifth Amended Credit Facility replaces the Canadian Dollar Offered Rate ("CODR”) with term CORRA in the calculation of interest for borrowings denominated in Canadian Dollars.
Current report
During the second quarter of fiscal 2026, the Company entered into the sixth amendment to the 2017 Credit Facility (as amended, the “Sixth Amended Credit Facility”). The Sixth Amended Credit Facility provides (i) an upsized revolving credit facility in an aggregate committed amount of $1.0 billion (the “ Third Amended Revolver”), which represents an increase of $150 million from the existing revolving credit facility and which matures on September 30, 2030 and (ii) certain other modifications to the existing credit agreement as further set forth in the Sixth Amended Credit Facility. In connection with the Sixth Amended Credit Facility, (i) all of the outstanding term loans (including accrued and unpaid interest thereon) and (ii) all accrued and unpaid interest and fees on the outstanding revolving loans, in each case, under the existing credit agreement were repaid in full.
Removed paragraphs (8)
Previous report
During the current quarter of fiscal 2026, we purchased 1,740,161 shares for $150.0 million.
Previous report
Net sales of our Energy Systems segment in the first quarter of fiscal 2026 increased $30.4 million or 8.4% compared to the first quarter of fiscal 2025. This increase was due to a 5% increase in organic volume, a 2% increase in price/mix and a 1% increase in foreign currency translation. This increase is primarily a result of higher volumes from network communication and data center customers.
Previous report
Net sales of our Specialty segment in the first quarter of fiscal 2026 increased by $22.8 million or 18.1% compared to the first quarter of fiscal 2025. The increase was primarily due to a 24% increase in acquisitions and a 1% increase in foreign currency translation, offset by a 7% decrease in organic volume. This increase in sales is primarily a result of the impact of the Bren-Tronics acquisition offset by decreased volumes from transportation customers.
Previous report
Operating expenses, as a percentage of sales, increased 150 basis points in the current quarter of fiscal 2026, compared to the first quarter of fiscal 2025.
Previous report
During the current quarter of fiscal 2026, the Company recorded cash charges of $0.5 relating primarily to site cleanup.
Previous report
NM = not meaningful
Previous report
The Specialty operating earnings, as a percentage of sales, increased 260 basis points in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025. This increase is primarily a result of the accretive benefit of the Bren-Tronics acquisition.
Previous report
NM = not meaningful
Reworded paragraphs (47)
Previous wording
Global economic conditions are mixed with the impacts from the uncertainty surrounding U.S. tariffs, elevated interest rates and heightened geopolitical tensions having various levels of impacts in North America, China and EMEA. On February 1, 2025, the U.S. signed an executive order, effective February 3, 2025, whereby the U.S. will apply additional tariffs on imported goods from Canada, Mexico, and China. Since that announcement, the tariffs to be applied to these three countries, and others, were suspended and/or renegotiated several times with varying results and some new negotiations delayed to take effect until August. The impact of the U.S. tariffs and retaliatory actions by other countries could be substantial. We are currently assessing the impacts these tariffs could have on the organization, and we believe that the international nature of our organizational structure will allow us to mitigate some of the financial impact of these potential tariffs.
Current wording
Global economic conditions are mixed with the impacts from the uncertainty surrounding U.S. tariffs, elevated interest rates and heightened geopolitical tensions having various levels of impacts in North America, China and EMEA. On February 1, 2025, the U.S. signed an executive order, effective February 3, 2025, whereby the U.S. will apply additional tariffs on imported goods from Canada, Mexico, and China. Since that announcement, the tariffs to be applied to these three countries, and others, were suspended and/or renegotiated several times with varying results and some new negotiations delayed to take effect until later dates. The impact of the U.S. tariffs and retaliatory actions by other countries could be substantial. We are currently assessing the impacts these tariffs could have on the organization, and we believe that the international nature of our organizational structure will allow us to mitigate some of the financial impact of these potential tariffs.
Previous wording
The market demand in the forklift truck and Class 8 truck markets have been impacted by tariff policy uncertainty, causing some customers to pause larger projects and general spending activity until there is more clarity on global tariff impacts to their supply chains. The data center and communications markets tend to be less sensitive to tariff policy, with budget and spending plans based on their unique capital spending needs. The data center market is in the midst of a growth cycle driven by AI and increasing digitization. The communications market is currently in a modest, but slow spending recovery as investments in maintenance and network build outs are necessary to support the increased data required to be moved through their infrastructure. Global defense budgets are increasing in response to rising geopolitical tensions. Spending in EMEA has increased at a higher rate than in the US, as large program spending has outpaced sustainment spending with the U.S. Department of Defense.
Current wording
The market demand in the forklift truck and Class 8 truck markets have been impacted by tariff policy uncertainty, causing some customers to pause larger projects and general spending activity until there is more clarity on global tariff impacts to their supply chains. The data center and communications markets tend to be less sensitive to tariff policy, with budget and spending plans based on their unique capital spending needs. The data center market is in the midst of a growth cycle driven by AI and increasing digitization. The communications market is currently in a modest, but slow spending recovery as investments in maintenance and network build outs are necessary to support the increased data required to be moved through their infrastructure. Global defense budgets are increasing in response to rising geopolitical tensions. Spending in EMEA has increased at a higher rate than in the US, as large program spending has outpaced sustainment spending with the U.S. Department of War.
Previous wording
As part of managing the performance of our business, we monitor the level of primary operating capital, and its ratio to net sales. We define primary operating capital as accounts receivable, plus inventories, minus accounts payable. The resulting net amount is divided by the trailing three-month net sales (annualized) to derive a primary operating capital percentage. We believe these three elements included in primary operating capital are most operationally driven, and this performance measure provides us with information about the asset intensity and operating efficiency of the business on a company-wide basis that management can monitor and analyze trends over time. Primary operating capital was $993.0 million (yielding a primary operating capital percentage of 27.8%) at June 29, 2025, $932.2 million (yielding a primary operating capital percentage of 23.9%) at March 31, 2025 and $866.9 million at June 30, 2024 (yielding a primary operating capital percentage of 25.4%). The primary operating capital percentage of 27.8% at June 29, 2025 increased by 390 basis points compared to March 31, 2025 and increased 240 basis points compared to June 30, 2024. The increase in primary operating capital percentage at June 29, 2025 compared to March 31, 2025 was primarily due to increases to inventory for strategic build up and decreases to accounts payable levels due to timing of payments. The increase in primary operating capital percentage at June 29, 2025 compared to June 30, 2024 was addition of Bren-Tronics balances as well as increases to inventory for strategic build up. Accounts receivable amounts increased comparatively mainly due to longer termed collections from customers compared to the first fiscal quarters of the prior fiscal year.
Current wording
As part of managing the performance of our business, we monitor the level of primary operating capital, and its ratio to net sales. We define primary operating capital as accounts receivable, plus inventories, minus accounts payable. The resulting net amount is divided by the trailing three-month net sales (annualized) to derive a primary operating capital percentage. We believe these three elements included in primary operating capital are most operationally driven, and this performance measure provides us with information about the asset intensity and operating efficiency of the business on a company-wide basis that management can monitor and analyze trends over time. Primary operating capital was $1,007.3 million (yielding a primary operating capital percentage of 26.5%) at September 28, 2025, $932.2 million (yielding a primary operating capital percentage of 23.9%) at March 31, 2025 and $978.8 million at September 29, 2024 (yielding a primary operating capital percentage of 27.7%). The primary operating capital percentage of 26.5% at September 28, 2025 increased by 260 basis points compared to March 31, 2025 and decreased 120 basis points compared to September 29, 2024. The increase in primary operating capital percentage at September 28, 2025 compared to March 31, 2025 was primarily due to increases to inventory for strategic build up and decreases to accounts payable levels due to timing of payments. The decrease in primary operating capital percentage at September 28, 2025 compared to September 29, 2024 was due to improved collections and increases to accounts payable due to timing of payments.
Previous wording
We believe that our financial position is strong, and we have substantial liquidity to cover short-term liquidity requirements and anticipated growth in the foreseeable future, with $346.7 million of available cash and cash equivalents and available and undrawn committed credit lines of approximately $468 million at June 29, 2025, availability subject to credit agreement financial covenants.
Current wording
We believe that our financial position is strong, and we have substantial liquidity to cover short-term liquidity requirements and anticipated growth in the foreseeable future, with $388.6 million of available cash and cash equivalents and available and undrawn committed credit lines of approximately $489.3 million at September 28, 2025, availability subject to credit agreement financial covenants.
Previous wording
During the fourth quarter of fiscal 2023, the Company entered into a fourth amendment to the 2017 Credit Facility (as amended, the “Fourth Amended Credit Facility”). The Fourth Amended Credit Facility replaces the London Interbank Offered Rate (“LIBOR”) with the Secured Overnight Financing Rate (“SOFR”) in the calculation of interest for both the Second Amended Revolver and the Second Amended Term Loan.
Current wording
During the fourth quarter of fiscal 2023, the Company entered into a fourth amendment to the 2017 Credit Facility (as amended, the “Fourth Amended Credit Facility”). The Fourth Amended Credit Facility replaces the London Interbank Offered Rate
Previous wording
Net sales increased $40.1 million or 4.7% in the first quarter of fiscal 2026 as compared to the first quarter of fiscal 2025. This increase was the result of a 4% increase in acquisitions, a 1% increase in price/mix, and a 1% increase in foreign currency translation offset by a 1% decrease in organic volume.
Current wording
Net sales increased $67.6 million or 7.7% in the second quarter of fiscal 2026 as compared to the second quarter of fiscal 2025. This increase was the result of a 3% increase in organic volume, a 3% increase in pricing, a 1% increase in acquisitions, and a 1% increase from foreign currency translation.
Previous wording
Net sales of our Motive Power segment in the first quarter of fiscal 2026 decreased by $17.1 million or 4.7% compared to the first quarter of fiscal 2025. This decrease was primarily due to a 7% decrease in organic volume, offset by a 2% increase from foreign currency translation. This decrease is primarily a result of lower volumes due to macro uncertainty.
Current wording
Net sales of our Motive Power segment in the second quarter of fiscal 2026 decreased by $7.0 million or 1.9% compared to the second quarter of fiscal 2025. This decrease was primarily due to a 6% decrease in organic volume, partially offset by a 2% increase in pricing and a 2% increase from foreign currency translation. Net sales of our Motive Power segment in the six months of fiscal 2026 decreased by $24.1 million or 3.3% compared to the six months of fiscal 2025. This decrease was primarily due to a 6% decrease in organic volume, partially offset by a 2% increase in pricing and a 1% increase from foreign currency translation. This decrease in sales for the quarter and six months is primarily a result of lower volumes due to macro uncertainty.
Previous wording
Gross profit increased $14.8 million or 6.2% in the first quarter compared to the comparable periods of fiscal 2025. Gross profit, as a percentage of net sales, was flat in the first quarter compared to the first quarter of fiscal 2025. The gross profit margin as a percentage of revenue reflects greater impact of 45X benefits and favorable price/mix offset by higher freight and materials costs compared to the first quarter of fiscal 2025.
Current wording
Gross profit increased $25.1 million or 9.9% in the second quarter and increased $39.9 million or 8.1% in the six months of fiscal 2026 compared to the comparable periods of fiscal 2025. Gross profit, as a percentage of net sales, increased 60 basis points in the second quarter and six months of fiscal 2026, compared to the second quarter and six months of fiscal 2025. The increase in the gross profit margin in the current quarter and six months reflects greater impact of 45x benefits and favorable price/mix offset by higher freight and materials costs compared to the same periods in fiscal year 2025.
Previous wording
Selling expenses, our main component of operating expenses, increased $3.5 million or 6.7% in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025, and increased 12 basis points as a percentage of net sales. Also, we experienced higher operating expenses due to additional accelerated stock compensation expense of $10.2 million in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025.
Current wording
Operating expenses, as a percentage of sales, increased 20 basis points in the second quarter and 90 basis points six months of fiscal 2026, compared to the comparable periods of fiscal 2025. While our operating expenses for the second quarter remained flat, we experienced higher operating expenses as a percentage of sales year to date is primarily due to additional accelerated stock compensation expense of $10.2 million in the six months of fiscal 2026.
Previous wording
Included in our first quarter of fiscal 2026 operating results of Energy Systems were restructuring charges of $0.8 million. Included in our first quarter of fiscal 2026 operating results of Motive Power were restructuring charges of $0.5 million.
Current wording
Included in our second quarter and six months of fiscal 2026 operating results of Energy Systems were restructuring charges of $9.1 million and $9.9 million respectively. Included in our second quarter and six months of fiscal 2026 operating results of Motive Power were restructuring charges of $9.1 million and $9.6 million, respectively. Included in our second quarter and six months of fiscal 2026 operating results of Specialty were restructuring charges of $1.6 million and $1.6 million, respectively.
Previous wording
Included in our first quarter of fiscal 2025 operating results of Energy Systems were restructuring charges of $3.0 million. Included in our first quarter of fiscal 2025 operating results of Motive Power were restructuring charges of $0.8 million. Included in our first quarter of fiscal 2025 operating results of Specialty were restructuring charges of $0.3 million.
Current wording
Included in our second quarter and six months of fiscal 2025 operating results of Energy Systems were restructuring charges of $0.9 million and $3.8 million, respectively. Included in our second quarter and six months of fiscal 2025 operating results of Motive Power were restructuring charges of $0.0 million and $0.8 million, respectively. Included in our second quarter and six months of fiscal 2025 operating results of Specialty were restructuring charges of $0.1 million and $0.4 million, respectively.
Previous wording
On July 22, 2025, we announced a reduction in force plan (the "Plan") as part of our strategic restructuring plan under our new leadership to better align resources with current business priorities and long-term objectives. The Plan is expected to reduce non-production global workforce by approximately 11%, or approximately 575 employees, and is focused primarily on corporate and management positions. We estimate one-time cash charges related to the Plan to be in the range of $15.0 million to $20.0 million consisting of severance payments, notice period payments in applicable jurisdictions, employee benefits and related costs. The Company expects to incur these expenses primarily in the second and third quarter of fiscal 2026.
Current wording
On July 22, 2025, the Company announced a reduction in force plan (the "Plan") as part of the Company's strategic restructuring plan under its new leadership to better align resources with current business priorities and long-term objectives. The Plan is expected to reduce non-production global workforce by approximately 11%, or approximately 575 employees, and is focused primarily on corporate and management positions. The Company estimates one-time cash charges related to the Plan to be $20.0 million consisting of severance payments, notice period payments in applicable jurisdictions, employee benefits and related costs. The Company expects to incur these expenses primarily in the second and third quarter of fiscal 2026. During the six months of fiscal 2026, the Company recorded a $19.6 million in severance costs relating to the plan.
Previous wording
On April 1, 2025, the Company's Board of Directors approved a plan to close its facility in Monterrey, Mexico, which focused on manufacturing flooded motive power batteries. Management determined that future demand for traditional motive power flooded cells will decrease as customers transition to maintenance free product solutions in lithium and Thin Plate Pure Lead (TPPL). Production of products being manufactured in Monterrey, Mexico will be moved to EnerSys’ existing facility in Richmond, Kentucky. The Company expects to incur a pre-tax charge of approximately $13.7 million under this restructuring plan when completed, the majority of which is expected to be recorded by the end of the 2025 calendar year, of which $1.5 million is expected to be a non-cash charge from fixed asset and inventory related charges. Cash charges of approximately $12.2 million, include severance and employee retention costs, environmental related expenses and equipment decommissioning, along with contractual releases and legal expenses.
Current wording
On April 1, 2025, the Company's Board of Directors approved a plan to close its facility in Monterrey, Mexico, which focused on manufacturing flooded motive power batteries. Management determined that future demand for traditional motive power flooded cells will decrease as customers transition to maintenance free product solutions in lithium and Thin Plate Pure Lead (TPPL). Production of products being manufactured in Monterrey, Mexico will be moved to EnerSys’ existing facility in Richmond, Kentucky. The Company expects to incur a pre-tax charge of approximately $13.7 million under this restructuring plan when completed, the majority of which is expected to be recorded by the end of the 2025 calendar year, of which $1.5 million is expected to be a non-cash charge from fixed asset and inventory charges. Cash charges of approximately $12.2 million, include severance and employee retention costs, environmental related expenses and equipment decommissioning, along with contractual releases and legal expenses.
Previous wording
During the current quarter of fiscal 2026, the Company recorded a $4.0 million in severance costs.
Current wording
During the six months of fiscal 2026, the Company recorded a $3.9 million in severance costs.
Previous wording
On November 8, 2023, the Company's Board of Directors approved a plan to stop production and operations of residential renewable energy products, which include our OutBack and Mojave brands. Management determined that residential renewable energy products no longer fit with the Company’s core strategy and resources will be better allocated toward commercial energy solutions for enterprise customers. The Company currently estimates that the total charges for these actions will amount to $24.5 million relating primarily to $23.6 million in non-cash charges primarily including inventory and an indefinite-lived intangible asset write-offs and $0.9 million in cash charges including employee severance and retention payments. The plan was completed as of the end of fiscal 2025.
Current wording
On November 8, 2023, the Company's Board of Directors approved a plan to stop production and operations of residential renewable energy products, which include our OutBack and Mojave brands. Management determined that residential renewable energy products no longer fit with the company’s core strategy and resources will be better allocated toward commercial energy solutions for enterprise customers. The Company currently estimates that the total charges for these actions will amount to $24.5 million relating primarily to $23.6 million in non-cash charges primarily including inventory and an indefinite-lived intangible asset write-offs and $0.9 million in cash charges including employee severance and retention payments. The plan was substantially complete as the end of fiscal 2025.
Previous wording
During fiscal 2024, the Company recorded non-cash charges totaling $0.5 million primarily related to fixed assets and cash charges of $0.7 million related to severance costs. The Company also recorded non-cash write-offs relating to inventories of $17.1 million, which was reported in cost of goods sold, and impairment of indefinite lived intangible asset of $6.0 million
Current wording
During fiscal 2024, the Company recorded non-cash charges totaling $0.5 million primarily related to fixed assets and cash charges of $0.7 million related to severance costs. The Company also recorded a non-cash write-offs relating to inventories of $17.1 million, which was reported in cost of goods sold, and impairment of indefinite lived intangible asset of $6.0 million.
Previous wording
On November 8, 2023, the Company committed to a plan to close its facility in Spokane, Washington, which primarily manufactures enclosure systems for telecommunications and related end markets. Management determined that existing manufacturing locations have the capacity to satisfy demand for these products and will execute more efficient distribution to customers. The Company currently estimates that the total charges for these actions will amount to approximately $3.6 million relating to $1.4 million in cash charges for employee severance, and non-cash charges of $2.2 million fixed assets, facility lease, and inventory. The plan was completed as of the end of fiscal 2025.
Current wording
On November 8, 2023, the Company committed to a plan to close its facility in Spokane, Washington, which primarily manufactures enclosure systems for telecommunications and related end markets. Management determined that existing manufacturing locations have the capacity to satisfy demand for these products and will execute more efficient distribution to customers. The Company currently estimates that the total charges for these actions will amount to approximately $3.6 million relating to $1.4 million in cash charges for employee severance, and non-cash charges of $2.2 million fixed assets, facility lease, and inventory. The majority of the charges were incurred in fiscal 2025.
Previous wording
In November 2022, the Company committed to a plan to close its facility in Sylmar, California, which manufactures specialty lithium batteries for aerospace and medical applications. Management determined to close the site upon the expiration of its lease on the property and to redirect production through consolidation into existing locations. The Company currently estimates total charges in the exit to amount to $13.7 million. Cash charges are estimated to total $9.7 million primarily relating to severance and other costs to leave the site. Non-cash charges are estimated to be $3.9 million relating to fixed assets, inventory, and contract assets. The plan was completed as of the end of fiscal 2025.
Current wording
In November 2022, the Company committed to a plan to close its facility in Sylmar, California, which manufactures specialty lithium batteries for aerospace and medical applications. Management determined to close the site upon the expiration of its lease on the property and to redirect production through consolidation into existing locations. The Company currently estimates total charges in the exit to amount to $13.7 million. Cash charges are estimated to total $9.7 million primarily relating to severance and other costs to leave the site. Non-cash charges are estimated to be $3.9 million relating to fixed assets, inventory, and contract assets. The plan was substantially complete as the end of fiscal 2025.
Previous wording
During fiscal 2023, the Company recorded cash charges of $1.7 million related primarily to severance costs and non-cash charges totaling $0.4 million primarily relating to contract assets.
Current wording
During fiscal 2023, the Company recorded $1.7 million primarily related to severance costs and non-cash charges totaling $0.4 million primarily relating to contract assets.
Previous wording
During fiscal 2023, the Company recorded cash charges relating to severance and manufacturing variances of $2.8 million and non-cash charges of $7.3 million relating to fixed asset write-offs. The Company also recorded a non-cash write-off relating to inventories of $1.6 million, which was reported in cost of goods sold.
Current wording
During fiscal 2023, the Company recorded cash charges relating primarily to severance and manufacturing variances of $2.8 million and non-cash charges of $7.3 million relating to fixed asset write-offs. The Company also recorded a non-cash write-off relating to inventories of $1.6 million, which was reported in cost of goods sold.
Previous wording
During the current quarter of fiscal 2026, the Company recorded a $1.1 million gain of the sale of the building.
Current wording
During the six months of fiscal 2026, the Company recorded a $1.1 gain of the sale of the building.
Previous wording
In fiscal 2021, we committed to a plan to close substantially all of our facility in Hagen, Germany, which produced flooded motive power batteries for electric forklifts. Management determined that future demand for the motive power batteries produced at this facility was not sufficient, given the conversion from flooded to maintenance free batteries by customers, the existing number of competitors in the market, as well as the near-term decline in demand and increased uncertainty from the pandemic. We plan to retain the facility with limited sales, service and administrative functions along with related personnel for the foreseeable future.
Current wording
In fiscal 2021, we committed to a plan to close substantially all of our facility in Hagen, Germany, which produced flooded motive power batteries for electric forklifts. Management determined that future demand for the motive power batteries produced at this facility was not sufficient, given the conversion from flooded to maintenance free batteries by customers, the existing number of competitors in the market, as well as the near term decline in demand and increased uncertainty from the pandemic. The Company plans to retain the facility with limited sales, service and administrative functions along with related personnel for the foreseeable future.
Previous wording
We currently estimate that the total charges for these actions will amount to approximately $60.0 million of which cash charges for employee severance related payments, cleanup related to the facility, contractual releases and legal expenses were estimated to be $40.0 million and non-cash charges from inventory and equipment write-offs were estimated to be $20.0 million. The majority of these charges have been recorded as of March 31, 2022. These actions resulted in the reduction of approximately 200 employees.
Current wording
The Company currently estimates that the total charges for these actions will amount to approximately $60.0 million of which cash charges for employee severance related payments, cleanup related to the facility, contractual releases and legal expenses were estimated to be $40.0 million and non-cash charges from inventory and equipment write-offs were estimated to be $20.0 million. The majority of these charges have been recorded as of January 1, 2023. These actions resulted in the reduction of approximately 200 employees.
Previous wording
Operating earnings decreased $4.8 million or (5.3)% in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025. Operating earnings, as a percentage of net sales, decreased 100 basis points in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025.
Current wording
Operating earnings decreased $7.4 million or 7.4% and decreased 12.2 million or 6.4% in the second quarter and six months of fiscal 2026, respectively, compared to the second quarter and six months of fiscal 2025. Operating earnings, as a percentage of net sales, decreased 150 basis points and 130 basis points in the second quarter and six months of fiscal 2026, respectively, compared to the second quarter and six months of fiscal 2025.
Previous wording
The Energy Systems operating earnings, as a percentage of sales, increased 170 basis points in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025. This increase for the quarter was driven by improved price/mix coupled with higher volumes from network communication and data center customers. We also continue to benefit from lower operating costs from our tight costs control.
Current wording
The Energy Systems operating earnings, as a percentage of sales, increased 130 basis points and 160 basis points in the second quarter and six months of fiscal 2026, respectfully, compared to the second quarter and six months of fiscal 2025. This increase was driven by improved price/mix combined with higher volumes of data center and industrial customers. We also continue to benefit from lower operating costs from tight cost controls and restructuring initiatives.
Previous wording
The Motive Power operating earnings, as a percentage of sales, decreased 190 basis points in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025. This decrease was caused by lower sales volumes and higher commodity costs which were only partially offset by favorable price/mix.
Current wording
The Motive Power operating earnings, as a percentage of sales, decreased 240 basis points and 220 basis points in the second quarter and six months of fiscal 2026, respectively, compared to the second quarter and six months of fiscal 2025. This decrease was driven primarily by higher costs passed through to customers and lost leverage on lower volumes
Previous wording
Interest expense of $11.3 million in the first quarter of fiscal 2026 (net of interest income of $3.2 million) was $0.3 million higher than the interest expense of 11.0 million in the first quarter of fiscal 2025 (net of interest income of $1.1 million).
Current wording
Interest expense of $12.2 million in the second quarter of fiscal 2026 (net of interest income of 3.3 million) was $0.3 million lower than the interest expense of $12.5 million in the second quarter of fiscal 2025 (net of interest income of $0.7 million).
Previous wording
The increase in interest expense in the first quarter of fiscal 2026 is primarily due to higher borrowing levels. Our average debt outstanding was $1,174.9 million in the first quarter of fiscal 2026, compared to $910.1 million in the first quarter of fiscal 2025.
Current wording
The decrease in interest expense in the second quarter of fiscal 2026 and the consistent interest expense in the six months of fiscal 2026 is primarily due to higher interest income from interest rate swaps offsetting higher interest expense costs in fiscal 2026. Our average debt outstanding was $1,314.0 million and $1,234.7 million in the second quarter and six months of fiscal 2026, compared to $1,126.9 million and $1,009.2 million in the second quarter and six months of fiscal 2025.
Previous wording
Included in interest expense are non-cash charges for deferred financing fees of $0.5 million for the first quarter of fiscal 2026 and $0.5 million in the first quarter of fiscal 2025.
Current wording
Included in interest expense are non-cash charges for deferred financing fees of $0.5 million and $1.0 million for the second quarter and six months of fiscal 2026 and $0.5 million and $1.0 million in the second quarter and six months of fiscal 2025.
Previous wording
Other (income) expense, net in the first quarter of fiscal 2026 was expense of $9.5 million compared to expense of $1.0 million in the first quarter of fiscal 2025. Foreign currency impact resulted in a loss of $6.2 million in the first quarter of fiscal 2026 compared to a foreign currency gain of $1.3 million in the first quarter of fiscal 2025.
Current wording
Other (income) expense, net in the second quarter of fiscal 2026 was expense of $3.4 million compared to expense of $2.7 million in the second quarter of fiscal 2025. Other (income) expense, net in the six months of fiscal 2026 was expense of $12.9 million compared to expense of $3.7 million in the six months of fiscal 2025. Foreign currency impact resulted in a loss of $1.0 million and a loss of $7.2 million in the second quarter and six months of fiscal 2026, respectively, compared to a foreign currency of $0.8 million and a gain of $2.1 million in the second quarter and six months of fiscal 2025, respectively.
Previous wording
As a result of the above, earnings before income taxes in the first quarter of fiscal 2026 decreased $13.6 million, or 17.2%, compared to the first quarter of fiscal 2025.
Current wording
As a result of the above, earnings before income taxes in the second quarter of fiscal 2026 decreased $7.8 million, or 9.2%, compared to the second quarter of fiscal 2025 and decreased $21.4 million, or 13.1% in the six months of fiscal 2026 compared to the six months of fiscal 2025.
Previous wording
The Company’s income tax provision consists of federal, state and foreign income taxes. The tax provision for the first quarter of fiscal 2026 and 2025 was based on the estimated effective tax rates applicable for the full years ending March 31, 2026 and March 31, 2025, respectively, after giving effect to items specifically related to the interim periods. The Company’s effective income tax rate with respect to any period may be volatile based on the mix of income in the tax jurisdictions, in which the Company operates, changes in tax laws and the amount of the Company's consolidated earnings before taxes.
Current wording
The Company’s income tax provision consists of federal, state and foreign income taxes. The tax provision for the second quarter of fiscal 2026 and 2025 was based on the estimated effective tax rates applicable for the full years ending March 31, 2026 and March 31, 2025, respectively, after giving effect to items specifically related to the interim periods. The Company’s effective income tax rate with respect to any period may be volatile based on the mix of income in the tax jurisdictions, in which the Company operates, changes in tax laws and the amount of the Company's consolidated earnings before taxes.
Previous wording
The Organization for Economic Co-operation and Development (OECD) has a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as Pillar 2), with certain aspects of Pillar 2 effective for taxable years beginning after December 31, 2023. While it is uncertain whether the U.S. will enact legislation to adopt Pillar 2, certain countries in which we operate have adopted legislation, and other countries are in the process of introducing legislation to implement Pillar 2. The impact of the enacted legislation is included in our estimated effective tax rate. The Company will continue to monitor and evaluate as new legislation and guidance is issued.
Current wording
The Organization for Economic Co-operation and Development (OECD) has a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as Pillar 2), with certain aspects of Pillar 2 effective for taxable years beginning after December 31, 2023. While it is uncertain whether the U.S. will enact legislation to adopt Pillar 2, certain countries in which we operate have adopted legislation, and other countries are in the process of introducing legislation to implement Pillar 2.
Previous wording
On July 4, 2025, the “One Big Beautiful Bill Act” (“OBBBA”) was enacted into law. The OBBBA includes changes to U.S. tax law that will be applicable to the Company effective in future quarters. These changes include permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, and changes to the tax treatment for certain business provisions and energy credits. We are evaluating the potential impact of the OBBBA to the Consolidated Financial Statements and actively monitoring guidance as it is issued.
Current wording
On July 4, 2025, the “One Big Beautiful Bill Act” (“OBBBA”) was enacted into law. The law included permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework , and changes to the tax treatment for certain business provisions and energy credits.
Previous wording
The consolidated effective income tax rates for the first quarter of fiscal 2026 and 2025 were 12.5% and 11.6%. The rate increase in the first quarter compared to the prior year period is primarily due to the greater impact of Pillar 2 and mix of earnings among tax jurisdictions.
Current wording
The consolidated effective income tax rates for the second quarter of fiscal 2026 and 2025 were 10.5% and 2.3% and for the six months of fiscal 2026 and 2025 were 11.4% and 6.8%. The rate increase in the second quarter and six months of fiscal 2026 compared to the prior year periods are primarily due to a discrete tax benefit for Varian in fiscal 2025, impact of Pillar 2 and mix of earnings among tax jurisdictions.
Previous wording
Foreign income as a percentage of worldwide income is estimated to be 52% for fiscal 2026 compared to 49% for fiscal 2025. The foreign effective tax rates for the first quarter of fiscal 2026 and 2025 were 16% and 14%, respectively. The foreign effective tax rate increase in the first quarter compared to the first quarter of the prior year is primarily due to the impact of Pillar 2. Income from the Company's Swiss subsidiary comprised a substantial portion of the Company's overall foreign mix of income for both fiscal 2026 and fiscal 2025 and were taxed at an effective income tax rate of approximately 14% and 11%, respectively, due to the greater impact of Pillar 2.
Current wording
Foreign income as a percentage of worldwide income is estimated to be 53% for fiscal 2026 and for fiscal 2025. The foreign effective tax rates for the six months of fiscal 2026 and 2025 were 17% and 15%, respectively. The foreign effective tax rate increase is primarily due to the impact of Pillar 2. Income from the Company's Swiss subsidiary comprised a substantial portion of the Company's overall foreign mix of income for both fiscal 2026 and fiscal 2025 and were taxed at an effective income tax rate of approximately 14% and 11%, respectively.
Previous wording
Operating activities provided cash of $1.0 million in the three months of fiscal 2026 compared to $10.4 million of cash provided in the three months of fiscal 2025, with the decrease in operating cash resulting mainly due to activity in accounts receivable, inventory, prepaid and other current assets, accrued expenses and accounts payable. Inventory increased or used cash of $33.5 million, and accounts receivable decreased or provided cash of $50.2 million. Additionally, accounts payable decreased or used cash of $43.0 million. In the three months of fiscal 2026, net earnings were $57.5 million, depreciation and amortization $26.9 million, stock-based compensation $17.6 million, and $2.5 million in cash proceeds from derivatives not designated in hedging relationships. Prepaid and other current assets were a use of funds of $38.9 million, primarily from an increases of $30.3 million in prepaid taxes, $12.1 million in contract assets, partially offset by a decrease of $3.5 million in other prepaid expenses. Accrued expenses were a use of funds of $38.4 million primarily from decrease in tax accruals of $3.4 million, payroll related payments of $22.8 million net of accruals, and sales related accruals of $14.3 million, partially offset by $0.5 million in accrued interest net of interest payments.
Current wording
Operating activities provided cash of $219.0 million in the six months of fiscal 2026 compared to $44.0 million of cash provided in the six months of fiscal 2025, Inventory increased or used cash of $48.7 million, and accounts receivable decreased or provided cash of $43.7 million. Additionally, accounts payable decreased or used cash of $34.7 million. In the six months of fiscal 2026, net earnings were $125.9 million, depreciation and amortization $54.9 million, stock-based compensation $22.0 million, and $2.1 million in cash proceeds from derivatives not designated in hedging relationships. Prepaid and other current assets provided funds of $69.5 million, primarily from a decreases of $81.4 million in prepaid taxes included $137.0 million payment from the IRS relating to prior year tax return refund, and $16.4 million in contract assets, partially offset by a decrease of $3.1 million in other prepaid expenses and $3.0 million in non trade receivables. Accrued expenses were a use of funds of $21.4 million primarily from an decrease in tax accruals of $34.7 million and sales related accruals of $5.3 million, partially offset by increases of $12.6 million to restructuring accruals, $5.6 million to miscellaneous other accruals, and $3.9 million in freight.
Previous wording
In the three months of fiscal 2025, operating activities provided cash of $10.4 million, Accounts receivable provided cash of $12.2 million, and inventory used cash of $16.5 million. Additionally, accounts payable used cash of $10.3 million. In the first quarter of fiscal 2025, net earnings were $70.1 million, depreciation and amortization $23.6 million, stock-based compensation $7.1 million, non-cash charges relating to exit charges $0.1 million, allowance for doubtful debts of $0.6 million, and non-cash interest of $0.5 million. Prepaid and other current assets were a use of funds of $9.9 million, primarily from an increase of $2.6 million in prepaid taxes and $11.6 million in contract assets, partially offset by a decrease of $2.7 million in other prepaid expenses, such as non-trade receivables and other advances and prepaid insurance of $1.6 million. Accrued expenses were a use of funds of $64.8 million primarily from decrease in tax accruals of $37.0 million, other miscellaneous accruals of $5.3 million, payroll related payments of $16.8 million net of accruals, decrease to sales related accruals of $11.0 million, and interest payments net of accruals of $14.2 million, partially offset by $16.0 million in accrued interest, warranty accruals of $1.1 million, and $2.5 million in contract liabilities.
Current wording
In the six of fiscal 2025, operating activities provided cash of $44.0 million. Inventory increased or used cash of $12.4 million, and accounts receivable increased or used cash of $9.3 million. Additionally, accounts payable decreased or used cash of $40.1 million. In the six months of fiscal 2025, net earnings were $152.4 million, depreciation and amortization $48.8 million, stock-based compensation $12.2 million, allowance for doubtful debts of $1.1 million, non-cash interest of $1.0 million and, non-cash charges relating to exit charges $0.2 million. Prepaid and other current assets were a use of funds of $26.2 million, primarily from an increase of $19.4 million in contract assets, $7.6 million in other prepaid expenses, and $1.6 million in prepaid insurance, partially offset by a decrease of $2.4 million in prepaid taxes. Accrued expenses were a use of funds of $83.9 million primarily from decrease in tax accruals of $81.8 million, interest payments net of accruals of $31.6 million, other miscellaneous accruals of $3.9 million, sales related accruals of $5.0 million, and payroll related payments of $0.5 million net of accruals, partially offset by $36.4 million in accrued interest, warranty accruals of $1.6 million, and $0.9 million in contract liabilities.
Previous wording
Investing activities used cash of $41.4 million in the first three months of fiscal 2026, which primarily consisted of acquisitions of $12.6 million and capital expenditures of $33.0 million relating to plant improvements, partially offset by $4.2 million in proceeds from disposal of property, plants, and equipment.
Current wording
Investing activities used cash of $62.4 million in the six months of fiscal 2026, which primarily consisted of acquisitions of $12.7 million and capital expenditures of $53.9 million relating to plant improvements, partially offset by $4.2 million in proceeds from disposal of property, plants, and equipment.
Previous wording
Investing activities used cash of $47.0 million in the first quarter of fiscal 2025, which primarily consisted of capital expenditures of $36.1 million relating to plant improvements and $10.9 million relating to investment in equity securities.
Current wording
Investing activities used cash of $282.5 million in the six months of fiscal 2025, which primarily consisted of the Bren-Tronics acquisition of $205.3 million, capital expenditures of $66.5 million relating to plant improvements and $10.9 million relating to investment in equity securities.
Showing the first 40 of 47 pairs. Open the source sections for the rest.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
(“LIBOR”) with the Secured Overnight Financing Rate (“SOFR”) in the calculation of interest for both the Second Amended Revolver and the Second Amended Term Loan.
Current report — wording carried from elsewhere
(1) The percentages shown for the segments are computed as a percentage of the applicable segment’s net sales; Corporate and other is computed based on total consolidated net sales
Current report — wording carried from elsewhere
(2) Corporate and other includes amounts managed on a company-wide basis and not directly allocated to any reportable segments, primarily relating to IRA production tax credits. Also, included are start-up costs for exploration and construction of a new lithium plant as well as sales and expenses from the New Ventures operating segment.
Current report — wording carried from elsewhere
The impact of the enacted legislation is included in our estimated effective tax rate. The Company will continue to monitor and evaluate as new legislation and guidance is issued.
Current report — wording carried from elsewhere
30, 2026, consists of a $130.0 million senior secured term loan (the “Second Amended Term Loan”), a CAD 106.4 million ($84.2 million) term loan and an $850.0 million senior secured revolving credit facility (the “Second Amended Revolver”). This amendment resulted in a decrease of the Amended Term Loan by $150.0 million and an increase of the Amended Revolver by $150.0 million.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
This amendment resulted in a decrease of the Amended Term Loan by $150.0 million and an increase of the Amended Revolver by $150.0 million.