EnerSys (ENS) 8 Feb 242024 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Third Quarter 2024 EnerSys Earnings Conference Call. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the call over to Lisa Hartman, Vice President of Investor Relations.

everyone. morning, Good joining fiscal for to EnerSys' discuss Thank results. us quarter XXXX third you today

On me Funk, on are call evening, filed Chief President the our with Chief our we Executive President Schaffer, and the quarter Officer; website. and published EnerSys' XX-Q our and results Officer. with available Andrea Financial EnerSys third Vice today Executive Last are and David which SEC,

page available within we'll be Investor referencing the on We the our posted are Presentations of slides that section also the call. Relations during Slides website.

call certain As are a be changes will uncertainties reminder, in to we forward-looking presenting statements circumstances. on this subject and that

Our these These forward-looking actual of from only reasons. materially statements number may results statements are for as differ a made today. of

statements future affect forward-looking recent which For SEC. our to a results, refer filed and our with XX-Q the of could factors please list

presenting adjusted will consolidated adjusted financial In and share operating be excludes performance, particularly adjusted diluted free earnings addition, certain cash flow, certain items. EBITDA, concerning per our non-GAAP we which earnings measures,

For between please an press and dated X-K, Form February GAAP difference includes release which the the our company's metrics, X, see financial XXXX. non-GAAP of explanation our

turn to Dave CEO, over President and Shaffer. the I'll call EnerSys' Now

Revenue rates supply, rates X. of our by with order book-to-bill well Sales quarter net were rebalancing $XXX pricing. to will ability us encouraging and future sheet, was to Lisa, turn our in guidance pricing I telecom million the position international in and morning. delivered third mix free you, provide was dry pauses cash due and in continue exceptional overall with balance earnings, prior specialty expectations, generation, lower rates few telecom stronger with in to We Slide our as flat our and and highlights. on partially retention by in points A&D. 'XX order see sustain we and and our demand in as quarter leverage, impressive benefited our including Andy saw we Adjusted fiscal in signals details maintain improved solid some broadband EMEA was were the to continue with IRA approximately offset We We transportation versus to to our year Thank first as our X. gross our give growth uphold demand capital investments providing line year and Systems which and gross performance Energy robust including markets increased trends We in our for Please consistent down achieved for motive midpoint allocation the robust margin solid good ample will in EPS, XXX range. We third allows over adjusted from Order some basis quarter strong as to strength which but powder our benefits. slower demand IRA price to and normalization specialty above reduce Asia. as power outlook, markets. of Americas of our delivered saw in maintain discipline. on broadband a end flow broadly prior improvements. margins benefits from well as favorable XX.X% in

as represent XX.X%, quarter. Excluding the customers, expected Systems, from In adjusted end in those and materialize, deeper than up This pause operating for revised points and year. solutions of had prior Energy spending started did the line marking million broadband telecom increases of Americas the months is the upgrades, would spending fueling adjusted power continued a in where the an uninterrupted margin infrastructure EPS saw industrials guidance. with in we see expected data strength we center, gross benefits, was not spending significant particularly earnings Adjusted $XXX need critical we IRA both the was of XX increase year-over-year. in over and year normally basis our when at we $X.XX

working and green shoots. to some projects on beginning We are with multiple see carriers closely network

compared We back half very and healthy our margin sales will quarter. highlight, the the of demand but decline strong in reaching again and of optimistic a were a experienced saw cell we prior expansion total In remain year. strengthen demand very modest the that in record year a once in line opportunities. top the power, to are motive sales revenue Maintenance-free small XX% on calendar a bullish continued the

conversions, our customers progress are are maintenance-free tracking customer driven remain in and are we capacity sales. business expanding well and meet solutions product initiatives. long-term We making to this our our for production We increasing their including demand, their bullish are the to lithium as automation electrification by by on customer encouraged plan

had limits. own near-record our are our by In orders and paced opportunities cell is We seeing growth capacity fuel product to innovative for EnerSys. batteries conversions road we driving specialty, map

acceptance loads fleets market higher strong continuing vehicle seeing are to batteries. electronic in higher-performing for demand drive We with

We are Investor share we progressing during laid our out aftermarket well toward targets Day. the

our balance across lines are to production segments. work our continuing our We output for optimal

towards our in exploration charge and with with Ventures delivering systems our enhanced and dual aerospace advancing several New leadership our storage projects line of we space capabilities. In business, pipeline. are storage initial charging are in We the energy progressing fast

new growing, Please executing strategic is and our see to of deliver to is Slide line The we to to are turn Our this team priorities. very on beginning excited business X. pipeline materialize. sales

from Starting the Let me INNOVATE. highlights some with third share quarter.

make to continue map. our on We innovation road strides significant

increasing TPPL compatible the with innovation their and being our of for is I by enthusiastically am safety AGVs, few. automate their our is charger just of physical This AIR this about We customers Last traditional excited lithium have connections launch wireless many capabilities chargers particularly NexSys to truly exciting week, enabling operations by announced technologies technology, we but will our for batteries. in eliminating a our pipeline, flooded, and customers. our received I which commercial the workforce. name diverse

key to a our our grant awarded technologies XT space were In addition, defense customers. in from of traction our innovation We economies lithium are lithium the high a prototype DIU industry-leading and proven to gaining of Department high-quality lithium product unit battery, we with from offerings lithium of energy least, leveraging with Defense scheduled mold this instability. not source to And help grid begin cells. our scale are but XX quarter last a customers risk batteries trials lithium the to domestic of mitigate telecom provide

We continue optimizing to the focus business. on

costs. renewables production Energy both actions We actions our and substantially of residential the are exit has our complete, Spokane decisive increased. of reduce facility taking restructuring In the of business closure our scope and to Systems, are

communication ahead systems these execute the optimize that on. short have when long-term opportunities more to lines patterns. reduction efforts additional very rebalance energy flexibility team to our optimized These proud has of small first managed launched POs the enabling and both and which for am broadband deeper XG power factory, with telecom along networks are company, are longer pause DPX, from demand for our initiatives and In to the say and maturing to for time working spending growth normal well positioned customers accelerating. are We operations respectively. the macro our organization lines time fluctuates are we diligently pressure, Fault production between now Missouri swiftly received a I frame. volume our to to our We expected in us was loose hyper on in benefits footprint lost for than an will tooling we and and and that have spending created complete sites, processes. and originally and extremely have when recently opportunities lead growth additional capitalize resume The able these pleased cell systems business cost factories we equipment

in new fast able these and integrate a our charge with We orders and quickly on the In requests. team to encouraged our converted modularity how to this months, energy products. demos demonstrating X are single to systems X.X as little revolutionary deliver customer ability have was X hour of customer megawatt as system storage quickly storage, into for system innovative

and battery more planning we location, about investment new advance We We local also for finalized to selection, announce to efforts plan in state the our this details support to continue our next U.S. the lithium funding site and gigafactory the week.

additional the dependent of approval return. an to with be forward on rate expected pursuing late decisions investment will federal summer. level move at internal Board are accretive in funding DOE We

Along consumption. legislation. with disclosure and our turn sustainability source companies analysis, for XX% future is silver Please report for X. expected We remain retaining additional Slide approved rating. we all the our the top modeling prepares of into EcoVadis to moving continue climate believe long-term importance of us of This to score, We support produce January, to which recently our on our second batteries rigorous that top supply relied by strategic related us turn than XX% climate-related respected the it over task owning our highly lithium outlook we to will own and greater you sustainability force for strategic domestic customers results supply meet strongly our our through detail. our lithium our with lithium to we to on process their now Andy published ensure cost chains a focused goals. on and at requirements. in market we I products Andy? their dynamics expect a lower framework, EnerSys own In externally financial can and cells, solely take climate

Slide Dave. Thanks, Please turn X. to

primarily driven to by by from a of pauses temporary in and customers sales by offset net telecom network mix. down due a increase X% quarter decrease our Third $XXX X% and year, volume partially and million broadband price investments in were prior

adjusted IRA of production retroactive reduction calendar first million qualification profit the $XX $XX XXXX we million. up including an During our of X cost booked $XXX achieved of a batteries. quarters to as million, benefit sold, domestic credits goods on We of expanded $XX million in quarter, the attributable of of of gross our

adjusted XX the points $XXX volume, of Excluding on gross percentage sales profit revenue to but lower compared down year. million up a the was as the prior IRA $X million, benefit, basis

in of Our the prior operating million year, were improvement XX.X%. margin quarter, operating adjusted adjusted over in $XXX a $XX resulting earnings million

Slide updated adjusted share XX% XXX% per per EPS, Adjusted adjusted XXX our including basis benefits due was $XX increase year, lower benefit, a over an of prior the IRA operating telecom Adjusted $X.XX, EPS $X.XX points, was IRA IRA an of year's in adjusted was basis and versus benefit spending up pauses quarter. the year. before XX% to In the of an quarter, broadband $X.XX of guidance, million share, our was prior X.X% decrease EPS. adjusted as-reported turn Please $XX rate line was over an IRA. adjusted earnings on the EBITDA and $X.XX with million, of down with temporary Excluding year-on-year. points to and benefits, X.X%, $XXX increase EBITDA the XX.X%, million operating achieved the prior X. XX respectively, versus margin adjusted we on million $XX the basis tax as effective of year prior In basis entirely third excluding margin an

Energy year and Let of adjusted from within growth provide XX. the Systems were price Systems with quarter, million the Energy me third mentioned, continued third basis mix. declined operating lower to by prior $XX in XXX lower Slide grow quarter. year $XX to driven details Services operating revenue In of by margin offset Americas the $XXX year. decreased the in prior prior in nicely million over X.X% turn now million, by earnings partly previously points Please double-digit Adjusted than segment. primarily volumes revenue the improvements XX% to

return prepared As for and projects the coming with customers our this strong closely Dave working are end to are and many quarters, we for very demand important market. of we in mentioned,

energy of and our million already $XXX initiatives, which and on realize X% offset with Slide savings continuing XX. we approximately our cost on ongoing infrastructure year are of combined $XX we volumes, anticipate positive decreased basis of in Motive generating annual bulk will cost onetime reduction an Please year the million, acquisitions. fully Power from turn which partially lower a next per systems been recorded. million optimization by energy costs the systems revenues $XX to has of impact efforts We disciplined approximately to

by are XX% segment as up XX.X%, labor Power maintenance-free strong We We return Adjusted to a bullish quarter-to-quarter our prior year on operating million, FX. of down enthusiasm prior for volume market approximately supply variation $X prior challenges margins growth a XXX million, and offering. this our X% X.X% charging overcome sequentially, million, million operating X% automation to benefit again customers' year patterns the revenue our Please and were positive this adjusted remain million adjusted Adjusted XXX improving this points strong and $XX to year. in $XXX prior driven of to to earnings while and proprietary from to Motive and and opportunities last X% ordering a Slide electrification, year. year, impact from from points. we maintenance solutions over which our continue reported basis continue over operating earnings $X normal were with appetite growing see and due from increased contributing wireless down XX. increase satisfy. Specialty quarter, turn operating $X.X up was basis proprietary REI margin over in

recognize they from transitioning closing cost absorption. telecom to are our beginning issues from pressured to we transportation, plant, the experience energy we're benefits cost visible loading continue to capacity While storage our not of broadband and which plant yet fixed Simar from as

full the flexibility levels. laser-focused returning are of operations and to optimizing productivity performance We on and our

about enhanced the coming to Slide specialty. optimistic strength capacity and Given end growth aerospace we opportunities quarters, turn transportation combined in we XX. the flexibility expansion with defense very the and in our in are Please anticipate and markets,

Our current and positions us balance growth navigate environment. to in economic and remains invest strong sheet the

on X, year. the December Subsequent net of million and cash to to of the in approximately the quarter, neutral million the the net notes of term $XXX at senior reduction overall of $XXX end resulting $XXX expense. market a prior had from using issue to favorable $XXX million interest equivalents we As and XXXX, X.XXX% down of due we debt represents debt, capitalized proceeds conditions cash XXXX, majority pay in of million our of

balance EBITDA, leverage target adjusted sheet leverage of an the achieved systems by to the from raw our in reduced and to In quarter range of product million second specific be inventory targeted cash was quarters, reduction Please prepared X.Xx back year-to-date inventory while and material a conversion when energy $XX an credit off-balance to our We reserves Xx driven basis. a by CapEx million telecom approximately versus the and in maintaining inventory X.Xx program, third Our Xx lower fiscal the million free Adding securitization $XX XX. $XX X.Xx agreement improvement categories of a lowest ratio of Slide flow XXX%. broadband occurs. was recovery end QX, EBITDA. rate achieving speedy quarter, our of we in X in was asset XXXX. the turn quarter on

a in to complemented end of strategy the rate capital dividends and remains strategic ratio and M&A, allocation net the range Our target in share leverage growth, focused by disciplined current EBITDA at investing adjusted around lower returning environment maintaining interest Xx buybacks. capital Xx organic through our and to shareholders

strategy, acquisitions, a strong we to As will which value add part growth will well portfolio a lithium as bolt-on investment of are as domestic evaluating be plant. and which our in the fit our potential strategic

concluded proposed turn Treasury more shares. battery that sales tax we $X previously have third on the our repurchased paid quarter, we than Based million currently by remaining regulations issued million qualified for $XXX our December, We million Department the IRA dividends in authorization. in on buyback Please credits. During of and in anticipated U.S. Slide $XX the XX. to of

of States. XX% our the batteries approximately in United Now produced

a $XXX As program million be to annual IRA to is phase of conclude last benefit years expect to XXXX our in when million of the result, the program. $XXX the out the through X the in December we range scheduled

the during of of we goods IRA benefit a credits. of previously, booked reduction retroactive cost quarter, mentioned sold of As million $XX $XX million an as including

to our slides. posted For further breakdown, please refer

battery the of intend critical the Our legislation, the the trajectory eligibility proceeds in to In United to with and supporting IRA pleased U.S. business the We for with XX. invest particularly development the our of remain transition in to dense these the keeping role States. intent use pricing. energy ability benefits are of about maintain turn in the underscores EnerSys' in Please our our optimistic to Slide and solutions continued production energy we

benefit. to expect charge $X.XX our for customers. spending we our we XX% versus to from anticipate telecom sales as including pauses trends down demand process of $X.XX majority 'XX. a XX%, abnormal margins from share markets, investments are prepare share, healthy fiscal we to temporary revenues storage managing broadband navigate basis guidance fiscal We Based including by fourth improve we prudently significant in our XXXX diluted the broadband per XXXX incremental telco pressured are business QX $X.XX XXX launch is IRA per adjusted in XXX sequentially the quarter While $X.XX to QX this, end points our and by but benefits, earnings IRA XXXX.Our on and seeing continued of spending be benefit and and year-on-year range the fiscal year fiscal record realizing gross to but the of fast to

expectation CapEx the full from is to range of reduced fiscal on supplier prior year equipment the $XXX delays. for XXXX range million million, in Our our $XX

execute to strong electrification continue leader as by end storage Operator? markets. methodically we our confident our positioned positioned in We global customer with remain industry-leading relationships, in our in plans. We megatrends. driven system highly With strategic this, questions. on growth applications and growth With well let's are EnerSys' it and diverse for critical demand solutions up a open energy for global

[Operator Instructions].

is from question first BTIG. Lewis with coming Our Gregory

question specialty. morning. is A to horse my on here the this it was guess little I hear first good

more of curious messages the new and maybe of maybe about of I trends some seeing what's Asia driving some Asia. obviously, in called that? that? of you're and a you kind what favorable parts of is talk Europe. seen everybody out little out mean, You Could mix bit watching Kind

Well, It's and the X transportation let's just it's aerospace the side. defense and side there's and pieces. specialty

area. there. market, the aerospace a increase of opportunities level the some like pressures segment, the I specifically it been and improving are say a rest of opportunities. quoting In in in side, -- in the economic tremendous in the the activity, in in setting the seen both especially we've things world, quarters in seems been are in Specialty and most of transportation the facing just -- And U.S. would prior, So there's -- market defense European we've the the and activity and of

so to is East a related Ukraine the imagine, the around can lot you geopolitics world and As the the the of and on in Middle in and going issues forth.

a and momentum big had So late. of of some positive there's wins, lot area building. in space the We've yes,

broadband the we're in yes, this I So -- great challenge, sure got specialty the has my X-year alluded have is that Greg, at. always This the our make between looking planning there SKUs different. transportation very can been slowed different be let's products know, targets achieve and in trends. I remarks, revenue it's the mix of models tooling mix even as has different and some our factories necessary And they're The ability to a dramatically our you prepared our build say, our in business to Missouri clear segments. want telco and to though to assumed TPPL, business down. as And changed has has our long-term certain all that equipment

trying seeing were times equipment b -- -- in assembly point category. align we tooling we're little expected down, whether of going the -- we're of were to, equipment the it's out that hair lot on we out those The into Point that were making, lines budgeting our with our been coming is to been endpoint the a is some lead came lead they really we we've get and has side. bit and a to say, really our of been haven't. get use, And XX-month and especially it's we point suppliers, XX-month, pulling times a to cycle expression we're b challenging. this little to as the the And tooling of the ambivalent And COVID as So products I'd journey transportation. are what sort

So at 'XX. that right year we're winding going until frame March-April I Maybe to don't are as point fully now. time where be B things know calendar probably is up

P&L. of direction. -- pressure in -- that's that that a on So moving but puts in the And specialty meantime, lot we the are certainly just

that's hopefully, color side? on Greg, So specialty the enough

the much about for money it great. we kind for want tell How-- maybe that mean going we're And How might IRA too in has talk it I projects benefit. you're your some U.S. realizing a the change I that from the what really be be it's not how last little likely mean, benefiting in Yes, mean next more capital then not -- I thinking pocket, guess we done investing the of And year. the look potential, of just path to in -- about even allocation? pretty anything or as mentioned potential finding was that. started really I almost and the to that to has most I out still did to -- early is. through you decade,

If around about that just allocation how capital you about investments those color maybe bit more a could kind look thinking and might how talk little like. of what maybe changes you're

explicit The whole additional proceeds. in That's this purpose Sure. stimulate the the of with intend States. United indeed, EnerSys, batteries purpose. volume -- And manufacturing benefit with do of that's to we to the what is high-volume density

So in whether a of our that's combination factories. TPPL investment

our noted, are the or factors and manufacture ion business terms the leverage working you to These very by all domestically. we hard sheet accelerated own on of balance are our funding ratios. As the plan in cells depressure additional are enabled which lithium still

positive So there's lot impact. of a

noted, it's the we're As clock shot state, in has in sense. it got a a I you term the so terminal a value. on mean

to of planning do. So can we much activities business that we're as these trying do parallel in

with various terms final the can parallel plans partner as lithium our towards a at factory. in out, up laying new we make we've investment So working as lining of capital as much which including selection, a we in investment with the of Burcor, been terms site to our in we're whether to in decision Board doing technology point proceed can

So Andy?

hope feeling going was Yes, okay. say, Greg, to you're just I

staying current range end in Xx targeted we We Investor the interest leverage of to X Just comments to remain environment approach and that Dave's on up. allocation within allocation of EBITDA low capital on general out you rate brought that. this to laid that including our committed to Day, on capital add at the

that Ideally, strategic we've fit acquisitions and GDP, an Our here that importantly, return acquisition, an of our primary large transformational balance we've turnaround, why charging as something a We're would ideal us would flexible transformation, like to and I $XXX for but take that as answers is plant, businesses rate a million electronics, of We're investment. with solid with lithium areas margins. focus, data at of course, power internal us, got acquisition, be lithium $XXX at to most this such a million out in more, range before, but the not sheet a as be an and on EnerSys. as the EBITDA helps. for and than looking accretive said looking target hope growth not question have looking centers, not growth internal range. clearly higher

[Indiscernible] with Company. & Oppenheimer

prior point your trough telecom revenue get compares expectations that the of on You broadband can September the of the December a Dave, given second abnormally level in hoping, into now characterized finer and and the you half we the seeing for calendar and you're broadband us 'XX. expecting as in customer comments return around and low. to quarters, how growth help to is revenue I you're spending put telecom was And

Right.

how Roughly, level sense gives us. set, don't I voice. telco a exact just on to is it's we good your But remember, that's Noah, as -- about the it for exposure you X -- of important an have around this So think The board. our a just revenue. just broadband And number. XX% segment to is we're hear to globally

a Sean think so have of don't us telecom veterans. I I We the across and rapidly where up obviously, piece Drew, the declined segment. spending telecom have grew the X any and in seeing that. remember abruptly business. of so situation

recovery it's a So revenue of initial been unique been a least has recent time, in of and lot And different in we've focus adjusting. very been our areas. years, period at on

earlier, were in biggest noted So our Greg to we talking transportation push segment. And to in try more of we I in when rotate aerospace defense. production piece, We're TPPL is or outperforming and to as centers. capacity data the the

So remarks we done that's been what and restructuring resi exited closed prepared Spoken. side. business. Andy's on And that -- the the in to revenue taking We on in We've then business. trying we've side. we're We've cost my do a noted

And so say savings Andy, for so the you taken those annualized are far? what we've would actions

about actions, $XX a for million sure. on savings those Yes, have we'll X $XX million,

actions. definitely And in So there when are recover. things terms Noah to expect about we then material

a it kind our budgets very of say, unique, I from different. year. to, very start slow So it again just spending said January bunch customers. prepared battery of first lose for a as I off was us, a We it the in December, is would the and terms this in of It and lot world we didn't this then see get And in power remarks, always in time almost got or of DC when the are use released.

news our the the biggest telco the expect budget and in weeks. of at we Now the budget coming big releases we've customers, third telco customer on seen is here X good X release

though but foot our we haven't earlier, And CapEx, off we've for taken restructurings, we the things tightened Noah slow sure are at gas product it's all So in of on even noted haven't did recovery, done some one we we of up the the seeing terms the we development. new opportunities.

lifeblood cell And for macro noted orders orders some HyperBus we've good So Safety Touch the These for first small new our big We are and first and this both in that's programs. our enablers. the had the news. recent of business. PX

anything financial that? they And you do to talk budget sense to of when it's positive have customers, momentum. a a us just Andy, and the releases management it's lot there's and we keep coming, coming, so telling So it's of It's add forth. to coming.

telco Just these hear some of Noah, points, about year data your good spending cost few you dimensioning 'XX things talked well. the full other million you give about voice a us as broadband things for A couple probably poses and to to revenue. $XXX of

our So mentioned that give development development product addition continuing in the materiality. of is ES are set product And our the to in the gives good probably of there's We've maybe Dave really that to that to kind also in in busy, which level our teams investment and group, come you investment and inventory. indication back that good hard. is it's come continued a -- us our we think going service as we're back,

we So but for cutting when back, again, long we a back not we believe reduction are come it's back there, we are that going in on and inventory. broadband inventory fast. times telco reserve mentioned a it lead There comes to had

$XX million, million of So this we $XX resumes. in probably anticipation have inventory just of when held that is

helpful. Very

with this cost the more point for transformational savings I something is are mentioning point point guess savings benefit question at this hey, kind substantial? theme Are do at with systems? energy stick and 'XX. cycle decide, mid-single-digit really, you Let's unacceptable in any margins you at efforts you in the substantially done business what in of this and the for thank do

Yes. I think it's we're say fair to done. would not that

And any I be involved goal XX% a is think we're fair on to comment. sales return that's in. and our on minimum sector a will business always have

in is committed that changes And the that little remains level volatility a then of the a telco But as And the we've a And battery to that Sean volatility on with greater particular possibly threshold. side. this we know, our that. very Alpha supply significant gone target. to agree you XX% segment between than historically seen tariffs there's and you us has exposed the that's said, heartedly and So through level issues. equipment investment of has chain

chargers? impact there sounded could I Do your a I in. to versus point wireless better wireless growth? these the pretty opportunity on a us about more charging Dave, traditional price on thought bullish. comments here one If demented. help sneak think share Can Is gain you charging be have products motive products Okay.

think through Just growth impact. help the us

Noah is for think -- enabler I wireless I it wireless think is the is way of an AGVs.

I whole to a think in more bit systems bespoke. more little the tend you the AGV content to so -- be areas, little higher a engineering tend have

that little the are versus of So and the are some high-volume the richer margins products opportunities margin a runners. long the

think particularly that mix is wireless and margins, enabler better AGV a we higher So there. the for great is charging

that space. about So we're excited

things on a Yes. power. few Noah, just motive

long because little time, and a to by some for profitability discipline. of labor with issues. maintenance-free are and conversions, supply business and when reliable strong, year-on-year chain a a OpEx really we been just Q-on-Q wireless try comparisons recent pleased has power gains It's the charging, of you tough this do motive ongoing years Our

at fact, same have normalize see a really, WITS in big our business. huge been see a orders that's the markets the back down. spike you're in going trends phenomenon consistent, and to we if shipment as But you look In data, then really and dip

as evidenced customers that Our by to the still are face holding. significant continue some headwinds is backlogs

enablers. of because for to volume our one of profitability would XXX-week orders and times 'XX. But confident fact, are year. planned our an growth fiscal in megatrends, remain us critical the which opportunities the of into represented out They our electrification, to value customers products In push automation, forklifts. no second large have the and very heart mentioned, service we headwinds, lead doubt demand this had XX% And us. over capacity, conversions, example, quarter. really has for wireless supply add several this additional to they data CAGR Interact of on line had excellent opportunities fuel provides this shift chain as as and AGVs a you manning that due additional revenue But with cell the some That saying additions have charging continued years, for next and to including

on a content and But in the at and been into and just improve mean with again, higher our And we've OpEx. average it's that margins, areas. -- level, and don't the prices from reliable. technology are try a Energy margins to We leaned These bring committed Systems. some to prices, just more this leverage. what to Andy's dead and we think content, Andy's we this he's OpEx and need And lot to the couple volume done his And these to this average Sean is has this going standpoint, in new that business, between our OpEx selling highest higher really I business. side working. Noah, better point, know very of was on selling assignment

And Andy said. just so with I agree everything

from is Keating Blair. Blake [Operator William Instructions]. And with

on is ask maintenance to for just Brian. I This wanted Blake about free.

your as of some your there really have you be well to this parter see the back this on second XX% up the the almost kind type then normalize? with in in this continuing pricing have And mentioned kind remarks, tailwinds in row, is double-digit you is as where a for of or to -- that, adoption almost of this the prepared adoption Is held you second strong growth, you growth And that's giveback motive. Do going of to then guys XX%. margins continuing? year. last see margins delivered growth quarter as PPPL So rate rate

approval new is budget with I would incentive got guess that both conversions. I was process pretty we've maintenance-free targets our and the us power major laid reminder, products. Board our these last see tied free plans trajectory in TPPL maintenance Andy. just don't -- that And are of combination our the that our areas, a any week, for to and went say, as aggressive that's lithium cycle. management I that obviously, in out budget motive We through the in And change Blake, a of some

So there's in focus these continued areas. of a lot

major so especially point, don't to TPPL any some for And opportunities see side, margins. And accretive the your some I trends. there's on

going to well. team of occur the we're is should pressures not as the are that may every additional OpEx at Offsetting into neutralizing that FX budget, continuing in trends in There But these So layer -- be be regional know day. stay the this weather in we piece 'XX. year forward. will pressures fiscal And a Europe go the all are journey leverage Motive Asia. to much OpEx I the knows. macro never in those Those one commodity may or on. then or pressures, terms storms impacts, continue did really

answer the that Did question?

Yes.

mentioned in additional on just specialty, tailwind 'XX. was quantify you lines be? And the potentially I you production color Sorry, lastly, fiscal kind would could that Or what mute. give. rebalancing guys until take any can of Can you that and

didn't that tremendous that more type that is year lines we've original in that just from we bespoke budget. this have variances think amounts of with our one of absorbed manufacturing this sort battery. of I transitioning And for a of associated making were lot

gating We're in get variances. It's just much add our to the certainly, purely not legitimately been just a also over. perspective, growth from ready more can the business, to on this flexibility and a manufacturing just equipment the opportunities as we been the the impact we move -- upside has period between a and efficiently this for just significant as as -- It's but extremely this investors. flexibility But tooling being move get more able factor on certainly that of direction, revenue really in the we're factories. So as from only material Blake, there's in ready lead transition. volume times various

with that, I comments. back we Q&A Shaffer conclude session. it you. Dave turn for And will Thank final to the

want a Well, I week. everybody in we'll joining thank XX and have speak again just and to for days. Thank us, of rest Bye-bye. great your you,

disconnect. and And you with thank and that, gentlemen, you participating, for ladies may now