EnerSys Reports Third Quarter Fiscal Year 2026 Results

READING, Pa.--( BUSINESS WIRE)-- EnerSys (NYSE: ENS), a global leader in stored energy solutions for industrial applications, announced today results for its third quarter of fiscal 2026, which ended on December 28, 2025.

“We delivered strong earnings in the third quarter with adjusted diluted EPS ex 45X of $1.84, up 50%,” said Shawn O’Connell, President and Chief Executive Officer of EnerSys. “Margins expanded meaningfully across most areas of our business, driven by favorable product mix along with expense and pricing discipline. Net sales were up 1%, in line with the low end of our guidance range, as strong price/mix and favorable FX offset lower volumes, particularly in Motive Power, where market softness persists.

“Our EnerGize strategic framework is translating into tangible results. We are capturing realignment savings as planned and further refining our Centers of Excellence to improve execution speed, consistency, and returns.

“Looking ahead, we expect additional benefits from our EnerGize initiatives as we remain disciplined in a mixed end market environment. We are highly confident in our focused growth strategy, supported by durable secular demand trends, including the growing need for energy security and high-performance energy storage solutions,” O’Connell concluded.

Key Financial Results and Metrics

Third quarter ended

Nine months ended

In millions, except per share amounts

December 28, 2025

December 29, 2024

Change

December 28, 2025

December 29, 2024

Change

Net Sales

919.1

906.2

1.4

2,763.4

2,642.8

4.6

Diluted EPS (GAAP)

2.40

2.88

(0.48

)

5.65

6.58

(0.93

)

Adjusted Diluted EPS (Non-GAAP) (1)

2.77

3.12

(0.35

)

7.38

7.19

0.19

Gross Profit (GAAP)

276.3

298.2

(21.9

)

806.7

788.7

18.0

Operating Earnings (GAAP)

124.2

142.7

(18.5

)

302.7

333.4

(30.7

)

Adjusted Operating Earnings (Non-GAAP) (2)

142.3

155.3

(13.0

)

386.1

375.6

10.5

Net Earnings (GAAP)

90.4

114.8

(24.4

)

216.3

267.2

(50.9

)

EBITDA (Non-GAAP) (3)

150.0

167.2

(17.2

)

370.5

403.0

(32.5

)

Adjusted EBITDA (Non-GAAP) (3)

159.7

171.4

(11.7

)

428.8

421.7

7.1

Share Repurchases

84.1

38.7

45.4

300.0

113.9

186.1

Dividend per share

0.26

0.24

0.02

0.77

0.71

0.04

Total Capital Returned to Stockholders

93.7

48.2

45.5

328.5

142.1

186.4

(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 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.

Third Quarter 2026

Net sales for the third quarter of fiscal 2026 were $919.1 million, an increase of 1.4% from the prior year third quarter net sales of $906.2 million and at the low end of the range of the third quarter of fiscal 2026 guidance of $920 million to $960 million. The increase compared to prior year quarter was the result of a 3% increase in pricing and a 2% increase in foreign currency translation, partially offset by a 4% decrease in organic volume.

Net earnings attributable to EnerSys stockholders (“Net earnings”) for the third quarter of fiscal 2026 were $90.4 million, or $2.40 per diluted share, which included an unfavorable highlighted net of tax impact of $13.8 million, or $0.37 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 third quarter of fiscal 2025 were $114.8 million, or $2.88 per diluted share, which included an unfavorable highlighted net of tax impact of $9.5 million, or $0.24 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 third quarter of fiscal 2026, on a non-GAAP basis, were $2.77, compared to the guidance of $2.71 to $2.81 per diluted share for the third quarter given by the Company on November 5, 2025. These earnings compare to the prior year third quarter adjusted Net earnings of $3.12 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 December 28, 2025 and December 29, 2024.

Fiscal Year to Date 2026

Net sales for the nine months of fiscal 2026 were $2,763.4 million, an increase of 4.6% from the prior year nine months net sales of $2,642.8 million. This increase was due to a 2% increase in pricing, a 2% increase in acquisitions, and a 2% increase in foreign currency translation, partially offset by a 1% decrease in organic volume.

Net earnings for the nine months of fiscal 2026 were $216.3 million, or $5.65 per diluted share, which included an unfavorable highlighted net of tax impact of $66.5 million, or $1.73 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 nine months of fiscal 2025 were $267.2 million, or $6.58 per diluted share, which included an unfavorable highlighted net of tax impact of $24.6 million, or $0.61 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 nine months of fiscal 2026, on a non-GAAP basis, were $7.38. This compares to the prior year nine months adjusted Net earnings of $7.19 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 Dividend

The 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 March 27, 2026, to holders of record as of March 13, 2026.

Balance Sheet and Cash Flow

As of December 28, 2025, cash and cash equivalents were $450.1 million and net debt as defined by our credit facility was $743.3 million. The net leverage ratio at the end of the third quarter was 1.2 X, down from 1.5 X in the prior year period due to the impact of lower debt and increased earnings. Capital expenditures during the third quarter were $13.3 million, down from $24.3 million in the prior year period. During the third quarter, cash from operating activities was $184.6 million, up from $81.1 million in the prior year period. Free cash flow, a non-GAAP financial measure, was $171.3 million, as compared to $56.8 million in the prior year period. The increase in cash from operating activities and the increase in free cash flow were both bolstered by the expansion of the Company’s Receivables Purchasing Agreement 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 December 28, 2025 and December 29, 2024.

The Company also returned approximately $93.7 million to shareholders through $84.1 million in share repurchases and $9.6 million through its quarterly dividend payment in the third quarter.

Fourth Quarter and Full Year 2026 Outlook

In the fourth quarter of fiscal 2026, EnerSys expects:

For the full year fiscal 2026, EnerSys expects:

“Our third quarter results further validate the strength and resilience of our diversified business model, as well as the earnings power of EnerSys,” said Andrea Funk, EnerSys Chief Financial Officer. “We delivered record Q3 earnings excluding 45X benefits despite some market pressure in our Motive Power volumes.

“While we are encouraged by the Company’s overall trajectory and momentum in several key growth areas, we continue to see the impact of a dynamic macro environment on customer buying patterns. Consistent with our fourth quarter outlook and expectations we set at the beginning of the fiscal year, we expect full-year adjusted operating earnings growth, excluding 45X benefits, to outpace revenue growth, supported by ongoing opex savings, sustained price/mix strength, and improving, though still soft, Motive Power volumes.

“Operational efficiencies aligned with our EnerGize strategic framework are taking hold, with continued progress in process optimization, capital allocation discipline, and manufacturing performance. These actions are positioning the business for long-term top-line growth and margin expansion,” 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 Details

The Company will host a conference call to discuss its third quarter results at 9:00 AM (ET) Thursday, February 5, 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 EnerSys

EnerSys 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 Statements

This 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, 2025. No undue reliance should be placed on any forward-looking statements.

EnerSys

Consolidated Condensed Statements of Income (Unaudited)

(In millions, except share and per share data)

Quarter ended

Nine months ended

December 28, 2025

December 29, 2024

December 28, 2025

December 29, 2024

Net sales

919.1

906.2

2,763.4

2,642.8

Gross profit

276.3

298.2

806.7

788.7

Operating expenses

147.8

154.3

472.7

446.0

Restructuring and other exit charges

4.3

1.2

31.3

9.3

Operating earnings

124.2

142.7

302.7

333.4

Earnings before income taxes

106.2

126.7

248.3

290.2

Income tax expense

15.8

11.9

32.0

23.0

Net earnings attributable to EnerSys stockholders

90.4

114.8

216.3

267.2

Net reported earnings per common share attributable to EnerSys stockholders:

Basic

2.45

2.92

5.74

6.70

Diluted

2.40

2.88

5.65

6.58

Dividends per common share

0.2625

0.240

0.7650

0.705

Weighted-average number of common shares used in reported earnings per share calculations:

Basic

36,864,078

39,305,035

37,695,560

39,891,376

Diluted

37,660,696

39,922,913

38,307,402

40,590,745

EnerSys

Consolidated Condensed Balance Sheets (Unaudited)

(In Thousands, Except Share and Per Share Data)

December 28, 2025

March 31, 2025

Assets

Current assets:

Cash and cash equivalents

450,082

343,131

Accounts receivable, net of allowance for doubtful accounts: December 28, 2025 - $9,156; March 31, 2025 - $8,675

474,704

597,942

Inventories, net

795,376

739,994

Prepaid and other current assets

411,313

408,747

Total current assets

2,131,475

2,089,814

Property, plant, and equipment, net

598,581

592,433

Goodwill

759,904

721,073

Other intangible assets, net

352,104

375,430

Deferred taxes

90,493

74,793

Other assets

115,308

117,705

Total assets

4,047,865

3,971,248

Liabilities and Equity

Current liabilities:

Short-term debt

29,759

28,502

Accounts payable

336,506

405,694

Accrued expenses

409,824

340,872

Total current liabilities

776,089

775,068

Long-term debt, net of unamortized debt issuance costs

1,149,406

1,083,541

Deferred taxes

16,088

17,641

Other liabilities

211,195

175,510

Total liabilities

2,152,778

2,051,760

Commitments and contingencies

Equity:

Preferred Stock, $0.01 par value, 1,000,000 shares authorized, no shares issued or outstanding at December 28, 2025 and at March 31, 2025

—

Common Stock, $0.01 par value per share, 135,000,000 shares authorized, 57,413,918 shares issued and 36,731,551 shares outstanding at December 28, 2025; 56,839,590 shares issued and 39,192,061 shares outstanding at March 31, 2025

574

568

Additional paid-in capital

717,001

662,725

Treasury stock at cost, 20,682,367 shares held as of December 28, 2025 and 17,647,529 shares held as of March 31, 2025

(1,291,943

)

(988,936

)

Retained earnings

2,676,160

2,489,200

Accumulated other comprehensive loss

(210,237

)

(247,479

)

Total EnerSys stockholders’ equity

1,891,555

1,916,078

Nonredeemable noncontrolling interests

3,532

3,410

Total equity

1,895,087

1,919,488

Total liabilities and equity

4,047,865

3,971,248

EnerSys

Consolidated Condensed Statements of Cash Flows (Unaudited)

(In Thousands)

Nine months ended

December 28, 2025

December 29, 2024

Cash flows from operating activities

Net earnings

216,257

267,189

Adjustments to reconcile net earnings to net cash provided by operating activities:

Depreciation and amortization

84,566

74,377

Write-off of assets relating to exit activities

1,982

342

Derivatives not designated in hedging relationships:

Net losses (gains)

(112

)

(1,765

)

Cash (settlements) proceeds

(1,747

)

763

Provision for doubtful accounts

1,263

1,914

Deferred income taxes

(115

)

Non-cash interest expense

1,692

1,448

Stock-based compensation

29,486

20,263

Loss (gain) on disposal of property, plant, and equipment

707

Changes in assets and liabilities:

Accounts receivable

140,746

(24,206

)

Inventories

(38,112

)

(19,567

)

Prepaid and other current assets

29,491

(145,466

)

Other assets

(1,884

)

1,054

Accounts payable

(71,659

)

(17,739

)

Accrued expenses

9,189

(34,786

)

Other liabilities

1,859

1,152

Net cash provided by (used in) operating activities

403,609

125,110

Cash flows from investing activities

Capital expenditures

(67,246

)

(90,765

)

Purchase of business

(12,668

)

(206,024

)

Proceeds from disposal of property, plant, and equipment

4,170

Investment in Equity Securities

—

(10,852

)

Net cash (used in) provided by investing activities

(75,744

)

(307,547

)

Cash flows from financing activities

Net (repayments) borrowings on short-term debt

(192

)

951

Proceeds from Second Amended Revolver borrowings

542,563

650,000

Repayments of Second Amended Revolver borrowings

(265,000

)

(180,000

)

Repayments of Term Loans

(210,000

)

—

Option proceeds, net

32,032

7,641

Payment of taxes related to net share settlement of equity awards

(8,267

)

(7,984

)

Purchase of treasury stock

(301,372

)

(113,928

)

Dividends paid to stockholders

(28,564

)

(28,060

)

Debt Issuance Costs Sixth Amended Credit Facility

(3,390

)

—

Other

788

233

Net cash provided by (used in) financing activities

(241,402

)

328,853

Effect of exchange rate changes on cash and cash equivalents

20,488

(16,576

)

Net increase (decrease) in cash and cash equivalents

106,951

129,840

Cash and cash equivalents at beginning of period

343,131

333,324

Cash and cash equivalents at end of period

450,082

463,164

Reconciliations of GAAP to Non-GAAP Financial Measures

This 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 third 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 third 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 third quarter of fiscal 2026 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 Results

Quarter ended

($ millions)

December 28, 2025

Energy Systems

Motive Power

Specialty

Corporate and other

Total

Net Sales

399.5

352.1

167.5

—

919.1

Operating Earnings

33.3

47.0

16.0

27.9

124.2

Inventory adjustment relating to exit activities and step up to fair value relating to recent acquisitions

—

1.2

—

1.2

Restructuring and other exit charges

0.9

3.2

0.2

—

4.3

Amortization of intangible assets

5.9

0.1

2.4

—

8.4

Other

2.0

1.1

—

4.2

Adjusted Operating Earnings

42.1

52.6

19.7

27.9

142.3

Operating Margin

8.3

13.3

9.6

3.0

13.5

Adjusted Operating Margin

10.5

14.9

11.8

15.5

Quarter ended

($ millions)

December 29, 2024

Energy Systems

Motive Power

Specialty

Corporate and other

Total

Net Sales

389.2

358.9

155.2

2.9

906.2

Operating Earnings

19.2

51.5

4.2

67.8

142.7

Inventory step up to fair value relating to recent acquisitions

—

1.1

—

1.1

Restructuring and other exit charges

0.1

1.0

0.1

—

1.2

Amortization of intangible assets

5.8

0.2

2.4

—

8.4

Other

0.2

—

1.7

—

1.9

Adjusted Operating Earnings

25.3

52.7

9.5

67.8

155.3

Operating Margin

4.9

14.3

2.7

15.7

Adjusted Operating Margin

6.5

14.7

6.1

17.1

Increase (Decrease) as a % from prior year quarter

Energy Systems

Motive Power

Specialty

Corporate and other

Total

Net Sales

2.6

(1.9

8.0

(98.6

1.4

Operating Earnings

73.8

(8.8

)

(58.8

)

(12.9

)

Adjusted Operating Earnings

66.9

(0.3

)

(58.8

)

(8.4

)

NM = Not Meaningful

Nine months ended

($ millions)

December 28, 2025

Energy Systems

Motive Power

Specialty

Corporate and other

Total

Net Sales

1,225.6

1,060.9

472.9

4.0

2,763.4

Operating Earnings

61.6

121.1

28.2

91.8

302.7

Inventory adjustment relating to exit activities and step up to fair value relating to recent acquisitions

—

1.2

—

1.2

Restructuring and other exit charges

11.3

17.3

2.6

0.1

31.3

Amortization of intangible assets

17.6

0.3

7.2

—

25.1

Accelerated stock compensation expense

5.4

3.4

1.4

10.2

Other

7.2

3.9

4.5

—

15.6

Adjusted Operating Earnings

103.1

147.2

43.9

91.9

386.1

Operating Margin

5.0

11.4

6.0

11.0

Adjusted Operating Margin

8.4

13.9

9.3

14.0

Nine months ended

($ millions)

December 29, 2024

Energy Systems

Motive Power

Specialty

Corporate and other

Total

Net Sales

1,132.3

1,091.8

415.8

2.9

2,642.8

Operating Earnings

45.7

162.2

6.6

118.9

333.4

Inventory step up to fair value relating to recent acquisitions

—

3.0

—

3.0

Restructuring and other exit charges

4.6

3.5

1.2

—

9.3

Amortization of intangible assets

17.8

0.6

5.1

—

23.5

Other

0.4

—

6.0

—

6.4

Adjusted Operating Earnings

68.5

166.3

21.9

118.9

375.6

Operating Margin

4.0

14.9

1.6

12.6

Adjusted Operating Margin

6.0

15.2

5.3

14.2

Increase (Decrease) as a % from prior year

Energy Systems

Motive Power

Specialty

Corporate and other

Total

Net Sales

8.2

(2.8

13.8

41.4

4.6

Operating Earnings

34.7

(25.4

)

(22.8

)

(9.2

)

Adjusted Operating Earnings

50.2

(11.5

)

(22.7

)

2.8

The table below presents a reconciliation of Net Earnings to EBITDA and Adjusted EBITDA:

Quarter ended

Nine months ended

($ millions)

December 28, 2025

December 29, 2024

December 28, 2025

December 29, 2024

Net Earnings

90.4

114.8

216.3

267.2

Depreciation

21.3

17.2

59.5

50.9

Amortization

8.4

25.1

23.5

Interest

14.1

14.9

37.6

38.4

Income Taxes

15.8

11.9

32.0

23.0

EBITDA

150.0

167.2

370.5

403.0

Non-GAAP adjustments

9.7

4.2

58.3

18.7

Adjusted EBITDA

159.7

171.4

428.8

421.7

The following table provides the non-GAAP adjustments shown in the reconciliation above:

Quarter ended

Nine months ended

($ millions)

December 28, 2025

December 29, 2024

December 28, 2025

December 29, 2024

Inventory adjustment relating to exit activities and step up to fair value relating to recent acquisitions

1.2

1.1

1.2

3.0

Restructuring and other exit charges

4.3

1.2

31.3

9.3

Accelerated stock compensation expense

—

10.2

—

Other

4.2

1.9

15.6

6.4

Non-GAAP adjustments

9.7

4.2

58.3

18.7

The 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 ended

Nine months ended

($ millions)

December 28, 2025

December 29, 2024

December 28, 2025

December 29, 2024

Gross Profit as reported

276.3

298.2

806.7

788.7

Inventory adjustment relating to exit activities and step up to fair value relating to recent acquisitions

1.2

1.1

1.2

3.0

Adjusted Gross Profit

277.5

299.3

807.9

791.7

Gross Margin

30.1

32.9

29.2

29.8

Inventory adjustment relating to exit activities and step up to fair value relating to recent acquisitions

0.1

—

0.2

Adjusted Gross Margin

30.2

33.0

29.2

30.0

Gross Profit

276.3

298.2

806.7

788.7

IRC 45X Benefit

34.7

75.2

112.4

140.5

Gross Profit ex 45X

241.6

223.0

694.3

648.2

Gross Margin

30.1

32.9

29.2

29.8

IRC 45X Benefit

3.8

8.3

4.1

5.3

Gross Margin ex 45X

26.3

24.6

25.1

24.5

The table below presents a reconciliation of Operating Cash Flow to Free Cash Flow and Free Cash Flow Conversion percentages:

Quarter ended

Nine months ended

($ millions)

December 28, 2025

December 29, 2024

December 28, 2025

December 29, 2024

Net cash provided by (used in) operating activities

184.6

81.1

403.6

125.1

Less Capital Expenditures

(13.3

)

(24.3

)

(67.2

)

(90.8

)

Free Cash Flow

171.3

56.8

336.4

34.3

Quarter ended

Nine months ended

($ millions)

December 28, 2025

December 29, 2024

December 28, 2025

December 29, 2024

Net cash provided by (used in) operating activities

184.6

81.1

403.6

125.1

Net earnings

90.4

114.8

216.3

267.2

Operating cash flow conversion %

204.2

70.6

186.6

46.8

Free Cash Flow

171.3

56.8

336.4

34.3

Net earnings

90.4

124.3

216.3

267.2

Free cash flow conversion %

189.5

45.7

155.5

12.8

The following table provides a reconciliation of Net earnings to EBITDA (non-GAAP) and adjusted EBITDA (non-GAAP) per credit agreement for December 28, 2025 and December 29, 2024 to calculate our net leverage ratio, in connection with the Fourth Amended Credit Facility:

Last twelve months

December 28, 2025

December 29, 2024

(in millions, except ratios)

Net earnings as reported

312.8

328.1

Add back:

Depreciation and amortization

111.4

98.1

Interest expense

46.4

Income tax expense

55.9

31.4

EBITDA (non-GAAP)

526.5

504.0

Adjustments per credit agreement definitions (1)

84.7

52.6

Adjusted EBITDA (non-GAAP) per credit agreement (1)

611.2

556.6

Total net debt (2)

743.3

852.1

Leverage ratios:

Total net debt/credit adjusted EBITDA ratio

1.2 X

1.5 X

(1)

(2)

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)

December 28, 2025

December 29, 2024

Net earnings reconciliation

As reported Net Earnings

90.4

114.8

Non-GAAP adjustments:

Inventory adjustment relating to exit activities and step up to fair value relating to recent acquisitions

1.2

(1)

1.1

(1)

Restructuring and other exit charges

4.3

(2)

1.2

(2)

Amortization of identified intangible assets

8.4

(3)

8.4

(3)

Other

4.2

1.9

Income tax adjustment of benefit from tax law changes and litigation

—

Income tax effect of above non-GAAP adjustments

(4.3

)

(3.1

)

Non-GAAP adjusted Net earnings

104.2

124.3

Net Earnings excluding (ex) IRC 45X benefit

As Reported Net Earnings

90.4

114.8

IRC 45X Benefit

34.7

75.2

Reported Net Earnings excluding (ex) IRC 45X benefit

55.7

39.6

Non-GAAP adjusted Net Earnings excluding (ex) IRC 45X benefit

Non-GAAP Adjusted Net Earnings

104.2

124.3

IRC 45X Benefit

34.7

75.2

Non-GAAP adjusted Net Earnings excluding (ex) IRC 45X benefit

69.5

49.1

Outstanding shares used in per share calculations

Basic

36,864,078

39,305,035

Diluted

37,660,696

39,922,913

Reported Net earnings (Loss) per share:

Basic

2.45

2.92

Diluted

2.40

2.88

Dividends per common share

0.2625

0.24

Non-GAAP adjusted Net earnings per share:

Basic

2.83

3.16

Diluted

2.77

3.12

Reported Net Earnings (Loss) per share excluding (ex) IRC 45X benefit

Basic

1.51

1.01

Diluted

1.48

0.99

Non-GAAP adjusted Net Earnings (Loss) per share excluding (ex) IRC 45X benefit

Basic

1.88

1.25

Diluted

1.84

1.23

The 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)

December 28, 2025

December 29, 2024

Pre-tax

(1) Inventory adjustment relating to exit activities - Motive

1.2

—

(1) Inventory adjustment relating to exit activities and step up to fair value relating to recent acquisitions - Specialty

—

1.1

(2) Restructuring and other exit charges - Energy Systems

0.9

0.1

(2) Restructuring and other exit charges - Motive Power

3.2

1.0

(2) Restructuring and other exit charges - Specialty

0.2

0.1

(2) Restructuring and other exit charges - Corporate Other

—

(3) Amortization of identified intangible assets - Energy Systems

5.9

5.8

(3) Amortization of identified intangible assets - Motive Power

0.1

0.2

(3) Amortization of identified intangible assets - Specialty

2.4

Total Non-GAAP adjustments

13.9

10.7

Nine months ended

(in millions, except share and per share amounts)

December 28, 2025

December 29, 2024

Net Earnings reconciliation

As reported Net Earnings

216.3

267.2

Non-GAAP adjustments:

Inventory adjustment relating to exit activities and step up to fair value relating to recent acquisitions

1.2

(1)

3.0

(1)

Restructuring and other exit charges

31.3

(2)

9.3

(2)

Amortization of identified intangible assets

25.1

(3)

23.5

(3)

Accelerated Stock Compensation Expense

10.2

(4)

—

Other

15.6

6.4

Income tax adjustment of benefit from tax law changes and litigation

(6.8

)

Income tax effect of above non-GAAP adjustments

(17.1

)

(10.8

)

Non-GAAP adjusted Net Earnings

282.6

291.8

Net Earnings without IRC 45X

As Reported Net Earnings

216.3

267.2

IRC 45X Benefit

112.4

140.5

Reported Net Earnings without IRC 45X Benefit

103.9

126.7

Non-GAAP adjusted Net Earnings without IRC 45X

Non-GAAP Adjusted Net Earnings

282.6

291.8

IRC 45X Benefit

112.4

140.5

Non-GAAP adjusted Net Earnings without IRC 45X Benefit

170.2

151.3

Outstanding shares used in per share calculations

Basic

37,695,560

39,891,376

Diluted

38,307,402

40,590,745

Reported Net Earnings (Loss) per share:

Basic

5.74

6.70

Diluted

5.65

6.58

Dividends per common share

0.7650

0.705

Non-GAAP adjusted Net Earnings per share:

Basic

7.50

7.31

Diluted

7.38

7.19

Reported Net Earnings (Loss) per share without IRC 45X benefit

Basic

2.76

3.18

Diluted

2.71

3.12

Non-GAAP adjusted Net Earnings (Loss) per share without IRC 45X benefit

Basic

4.52

3.79

Diluted

4.45

3.73

Nine months ended

($ millions)

December 28, 2025

December 29, 2024

Pre-tax

(1) Inventory adjustment relating to exit activities - Motive

1.2

—

(1) Inventory adjustment relating to exit activities and step up to fair value relating to recent acquisitions - Specialty

—

3.0

(2) Restructuring and other exit charges - Energy Systems

11.3

4.6

(2) Restructuring and other exit charges - Motive Power

17.3

3.5

(2) Restructuring and other exit charges - Specialty

2.6

1.2

(2) Restructuring and other exit charges - Corporate Other

0.1

—

(3) Amortization of identified intangible assets - Energy Systems

17.6

17.8

(3) Amortization of identified intangible assets - Motive Power

0.3

0.6

(3) Amortization of identified intangible assets - Specialty

7.2

5.1

(4) Accelerated stock compensation expense - Energy Systems

5.4

—

(4) Accelerated stock compensation expense - Motive Power

3.4

—

(4) Accelerated stock compensation expense - Specialty

1.4

—

Total Non-GAAP adjustments

67.8

35.8