DISCUSSION AND ANALYSIS BY ENERSYS MANAGEMENT OF THE FINANCIAL POSITION AND OPERATING RESULTS (Type 10-Q)

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

The Non-public Securities Litigation Reform Act of 1995 (the "Reform Act") supplies
a secure harbor for forward-looking statements made by or on behalf of EnerSys.
EnerSys and its representatives might, on occasion, make written or verbal
forward-looking statements, together with statements contained in EnerSys' filings
with the Securities and Change Fee ("SEC") and its studies to
stockholders. Typically, the inclusion of the phrases "anticipate," "imagine,"
"count on," "future," "intend," "estimate," "will," "plans," or the adverse of
such phrases and comparable expressions determine statements that represent
"forward-looking statements" throughout the which means of Part 27A of the Securities
Act of 1933 and Part 21E of the Securities Change Act of 1934 and which are
supposed to come back throughout the secure harbor safety supplied by these sections.
All statements addressing working efficiency, occasions, or developments that
EnerSys expects or anticipates will happen sooner or later, together with statements
regarding gross sales progress, earnings or earnings per share progress, and market
share, in addition to statements expressing optimism or pessimism about future
working outcomes, are forward-looking statements throughout the which means of the
Reform Act. The forward-looking statements are and will probably be primarily based on administration's
then-current beliefs and assumptions concerning future occasions and working
efficiency and on info presently out there to administration, and are
relevant solely as of the dates of such statements.

Ahead-looking statements contain dangers, uncertainties and assumptions.
Though we don't make forward-looking statements until we imagine we now have a
affordable foundation for doing so, we can't assure their accuracy. Precise
outcomes might differ materially from these expressed in these forward-looking
statements because of quite a lot of uncertainties and dangers, together with the dangers
described within the Firm's Annual Report on Type 10-Ok for the fiscal yr ended
March 31, 2021 (our "2021 Annual Report") and different unexpected dangers. You need to
not put undue reliance on any forward-looking statements. These statements communicate
solely as of the date of this Quarterly Report on Type 10-Q, even when subsequently
made out there by us on our web site or in any other case, and we undertake no obligation
to replace or revise these statements to replicate occasions or circumstances
occurring after the date of this Quarterly Report on Type 10-Q.

Our precise outcomes might differ materially from these contemplated by forward-looking statements for quite a lot of causes, together with the next elements:

•financial, monetary and different impacts of the COVID-19 pandemic, together with
international provide chain disruptions;
•basic cyclical patterns of the industries during which our clients function;
•the extent to which we can't management our fastened and variable prices;
•the uncooked supplies in our merchandise might expertise vital fluctuations in
market value and availability;
•sure uncooked supplies represent hazardous supplies that will give rise to
expensive environmental and security claims;
•laws concerning the restriction of using power or sure hazardous
substances in our merchandise;
•dangers concerned in our operations corresponding to disruption of markets, adjustments in
import and export legal guidelines, environmental rules, forex restrictions and
native forex trade fee fluctuations;
•our capability to boost our promoting costs to our clients when our product prices
improve;
•the extent to which we're in a position to effectively make the most of our international manufacturing
services and optimize our capability;
•adjustments in macroeconomic and market circumstances and market volatility (together with
developments and volatility arising from the COVID-19 pandemic), together with
inflation, rates of interest, the worth of securities and different monetary property,
transportation prices, prices and availability of digital parts, and lead,
plastic resins, metal, copper and different commodity costs, and the influence of such
adjustments and volatility on our monetary place and enterprise;
•competitiveness of the battery markets and different power options for
industrial purposes all through the world;
•our well timed improvement of aggressive new merchandise and product enhancements in
a altering setting and the acceptance of such merchandise and product
enhancements by clients;
•our capability to adequately shield our proprietary mental property,
expertise and model names;
•litigation and regulatory proceedings to which we is likely to be topic;
•our expectations regarding indemnification obligations;
•adjustments in our market share within the enterprise segments the place we function;
•our capability to implement our value discount initiatives efficiently and
enhance our profitability;
•high quality issues related to our merchandise;
•our capability to implement enterprise methods, together with our acquisition
technique, manufacturing enlargement and restructuring plans;
•our acquisition technique will not be profitable in finding advantageous
targets;
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•our capability to efficiently combine any property, liabilities, clients,
programs and administration personnel we purchase into our operations and our capability
to appreciate associated income synergies, strategic beneficial properties, and value financial savings could also be
considerably tougher to attain, if in any respect, or might take longer to attain;
•potential goodwill impairment fees, future impairment fees and
fluctuations within the truthful values of reporting items or of property within the occasion
projected monetary outcomes will not be achieved inside anticipated time frames;
•our debt and debt service necessities which can limit our operational and
monetary flexibility, in addition to imposing unfavorable curiosity and financing
prices;
•our capability to take care of our present credit score services or get hold of passable
new credit score services;
•adversarial adjustments in our quick and long-term debt ranges underneath our credit score
services;
•our publicity to fluctuations in rates of interest on our variable-rate debt;
•our capability to draw and retain certified administration and personnel;
•our capability to take care of good relations with labor unions;
•credit score threat related to our clients, together with threat of insolvency and
chapter;
•our capability to efficiently recuperate within the occasion of a catastrophe affecting our
infrastructure, provide chain, or our services;
•delays or cancellations in shipments;
•prevalence of pure or man-made disasters or calamities, together with well being
emergencies, the unfold of infectious illnesses, pandemics, vaccine mandates,
outbreaks of hostilities or terrorist acts, or the consequences of local weather change,
and our capability to deal successfully with damages or disruptions attributable to the
foregoing; and
•the operation, capability and safety of our info programs and
infrastructure.

This listing of things that will have an effect on future efficiency is illustrative, however not at all exhaustive. Due to this fact, all forward-looking statements needs to be evaluated making an allowance for their inherent uncertainty.

Within the following dialogue and evaluation of outcomes of operations and monetary
situation, sure monetary measures could also be thought of "non-GAAP monetary
measures" underneath SEC guidelines. These guidelines require supplemental rationalization and
reconciliation, which is supplied on this Quarterly Report on Type 10-Q.
EnerSys' administration makes use of the non-GAAP measures "main working capital" and
"main working capital proportion" in its analysis of money circulation and
monetary place efficiency. These disclosures have limitations as an
analytical device, shouldn't be seen as an alternative to money circulation decided
in accordance with GAAP, and shouldn't be thought of in isolation or as a
substitute for evaluation of the Firm's outcomes as reported underneath GAAP, nor are
they essentially corresponding to non-GAAP efficiency measures that could be
introduced by different firms. Administration believes that this non-GAAP
supplemental info is useful in understanding the Firm's ongoing
working outcomes.

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Overview

EnerSys (the "Firm," "we," or "us") is a world chief in saved power
options for industrial purposes. We additionally manufacture and distribute power
programs options and motive energy batteries, specialty batteries, battery
chargers, energy gear, battery equipment and outside gear enclosure
options to clients worldwide. Vitality Programs which mix enclosures, energy
conversion, energy distribution and power storage are used within the
telecommunication and broadband, utility industries, uninterruptible energy
provides, and quite a few purposes requiring saved power options. Motive
Energy batteries and chargers are utilized in electrical forklift vehicles and different
industrial electrical powered automobiles. Specialty batteries are utilized in aerospace
and protection purposes, giant over the highway vehicles, premium automotive and
medical. We additionally present aftermarket and buyer help providers to over
10,000 clients in additional than 100 international locations by means of a community of distributors,
unbiased representatives and our inner gross sales power world wide.

The three sectors to current of the Firm, in keeping with the exercise sectors, are as follows:

•Vitality Programs - uninterruptible energy programs, or "UPS" purposes for
pc and computer-controlled programs, in addition to telecommunications programs,
switchgear and electrical management programs utilized in industrial services and
electrical utilities, large-scale power storage and power pipelines. Vitality
Programs additionally consists of extremely built-in energy options and providers to
broadband, telecom, renewable and industrial clients, in addition to thermally
managed cupboards and enclosures for digital gear and batteries.
•Motive Energy - energy for electrical industrial forklifts utilized in manufacturing,
warehousing and different materials dealing with purposes in addition to mining
gear, diesel locomotive beginning and different rail gear; and
•Specialty - premium beginning, lighting and ignition purposes in
transportation, power options for satellites, army plane, submarines,
ships and different tactical automobiles in addition to medical and safety programs.

Financial local weather

Throughout calendar 2021 international economies have recovered from easing of the COVID-19
pandemic. Within the first half of calendar 2021, america and China
achieved greater than common Gross Home Product "GDP" progress whereas EMEA's
financial system grew barely beneath common. Within the second half of calendar 2021, the
United States and China's GDP progress is forecasted to be decrease than the primary
half and Europe's is forecasted to be barely greater.

EnerSys is experiencing provide chain disruptions and value spikes in sure
supplies corresponding to plastic resins and digital parts together with
transportation and associated logistics challenges and broad-based value will increase.
As well as, some areas are experiencing issue assembly hiring objectives.
Typically, our mitigation efforts and the latest financial restoration, have
tempered the influence of the pandemic-related challenges. The general market
demand stays strong.

Volatility of commodities and foreign currency echange

Our most important commodity and international forex exposures are associated to
lead and the Euro, respectively. Traditionally, volatility of commodity prices and
international forex trade charges have brought about giant swings in our manufacturing
prices. Because of the COVID-19 pandemic, lead value dropped into the low 70
cents per pound throughout our first fiscal quarter of 2021 and has presently
rallied over $1.10 per pound, which is above the pre-COVID-19 ranges. We're
experiencing rising prices in a few of our uncooked supplies corresponding to plastic
resins, metal, copper and electronics and elevated freight prices.

Buyer pricing

Our promoting costs fluctuated over the last a number of years to offset the
risky value of commodities. Roughly 30% of our income is now topic to
agreements that alter pricing to a market-based index for lead. Buyer
pricing adjustments usually lag actions in lead costs and different prices by
roughly six to 9 months. In fiscal 2022, buyer pricing has elevated
because of lead costs and different prices having elevated all year long.

Based mostly on present commodity markets, we’re prone to see headwinds yr over yr from rising commodity costs, with some associated improve in our promoting costs over the course of the yr. yr to come back. As we focus extra on power programs and lead-free chemical compounds, the deal with lead will proceed to say no.

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Liquidity and Capital Sources

In the course of the second quarter of fiscal 2022, we entered right into a second modification to
the Amended Credit score Facility (as amended, the "Second Amended Credit score Facility").
Consequently, the Second Amended Credit score Facility, now scheduled to mature on
September 30, 2026, consists of a $130.0 million senior secured time period mortgage (the
"Second Amended Time period Mortgage"), a CAD 106.4 million ($84.2 million) time period mortgage and
an $850.0 million senior secured revolving credit score facility (the "Second Amended
Revolver"). This modification resulted in a lower of the Amended Time period Mortgage by
$150.0 million and a rise of the Amended Revolver by $150.0 million.

We imagine that our monetary place is powerful and we now have substantial
liquidity to cowl short-term liquidity necessities and anticipated progress in
the foreseeable future, with $408 million of accessible money and money equivalents
and out there and undrawn dedicated credit score traces of roughly $689 million
at October 3, 2021, availability topic to credit score settlement monetary
covenants.

A considerable majority of the Firm's money and investments are held by international
subsidiaries and are thought of to be indefinitely reinvested and anticipated to be
utilized to fund native working actions, capital expenditure necessities
and acquisitions. The Firm believes that it has adequate sources of
home and international liquidity.

Between October 4, 2021 by means of November 5, 2021, the Firm purchased again 742,811 shares for about $ 57.0 million. As well as, the Firm introduced, the November 10, 2021, the creation of a brand new $ 100 million share buyback program, with no expiry date.

We imagine that our sturdy capital construction and liquidity affords us entry to
capital for future acquisition and inventory repurchase alternatives and continued
dividend funds.

Outcomes of Operations

Web Gross sales

Web gross sales elevated $83.0 million or 11.7% within the second quarter of fiscal 2022
as in comparison with the second quarter of fiscal 2021. This improve was the outcome
of an 11% improve in natural quantity ensuing primarily from sturdy demand
arising from strong markets and the easing of the pandemic and a 1% improve in
pricing.

Web gross sales elevated $193.0 million or 13.7% within the six months of fiscal 2022 as
in comparison with the six months of fiscal 2021. This improve was because of an 11%
improve in natural quantity ensuing primarily from sturdy demand, a 2% improve
in international forex translation influence and a 1% improve in pricing.

Section gross sales
                                                  Quarter ended                              Quarter ended
                                                 October 3, 2021                            October 4, 2020                                 Improve (Lower)
                                                             Proportion                                 Proportion
                                           In                 of Complete                In                 of Complete                          In
                                        Hundreds of thousands             Web Gross sales             Hundreds of thousands             Web Gross sales                       Hundreds of thousands                        %
Vitality Programs                         $  369.8                     46.7  %       $  340.8                     48.1  %       $            29.0                           8.5  %
Motive Energy                              320.7                     40.5             263.8                     37.2                       56.9                          21.6
Specialty                                 100.9                     12.8             103.8                     14.7                       (2.9)                         (2.9)
Complete internet gross sales                        $  791.4                    100.0  %       $  708.4                    100.0  %       $            83.0                          11.7  %


                                                    Six months ended                                  Six months ended
                                                     October 3, 2021                                   October 4, 2020                               Improve (Lower)
                                                                    Proportion                                        Proportion
                                               In                    of Complete                    In                    of Complete                     In
                                            Hundreds of thousands                Web Gross sales                 Hundreds of thousands                Web Gross sales                  Hundreds of thousands                   %
Vitality Programs                         $         741.0                     46.1  %       $         694.2                     49.1  %       $             46.8                6.7  %
Motive Energy                                     656.8                     40.9                    526.6                     37.3                       130.2               24.7
Specialty                                        208.5                     13.0                    192.5                     13.6                        16.0                8.3
Complete internet gross sales                        $       1,606.3                    100.0  %       $       1,413.3                    100.0  %       $            193.0               13.7  %


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Web gross sales of our Vitality Programs phase within the second quarter of fiscal 2022
elevated $29.0 million or 8.5% in comparison with the second quarter of fiscal 2021.
This improve was because of a 9% improve in natural quantity and a 1% improve in
international forex translation influence, partially offset by a 1% lower in
pricing / combine. Web gross sales of our Vitality Programs phase within the six months of
fiscal 2022 elevated $46.8 million or 6.7% in comparison with the six months of fiscal
2021. This improve was because of a 6% improve in natural quantity and a 2% improve
in international forex translation influence, partially offset by a 1% lower in
pricing / combine. Continued sturdy demand in telecommunications and broadband was
offset by provide chain pushed constraints for our energy programs merchandise.

Web gross sales of our Motive Energy phase within the second quarter of fiscal 2022
elevated by $56.9 million or 21.6% in comparison with the second quarter of fiscal
2021. This improve was primarily because of a 20% improve in natural quantity and a
2% improve in pricing. Web gross sales of our Motive Energy phase within the six months
of fiscal 2022 elevated by $130.2 million or 24.7% in comparison with the six months
of fiscal 2021. This improve was primarily because of a 21% improve in natural
quantity, a 3% improve in international forex translation influence and a 1% improve
in pricing. The prior yr's COVID-19 restrictions and associated financial slowdown
impacted this phase greater than our different traces of enterprise within the prior yr.

Web gross sales of our Specialty phase within the second quarter of fiscal 2022
decreased by $2.9 million or 2.9% in comparison with the second quarter of fiscal 2021.
The lower was primarily because of an 8% lower in natural quantity because of
packaging shortages, partially offset by a 5% improve in pricing. Web gross sales of
our Specialty phase within the six months of fiscal 2022 elevated by $16.0
million or 8.3% in comparison with the six months of fiscal 2021. The rise was
primarily because of a 4% improve in natural quantity, a 3% improve in pricing and a
1% improve in international forex translation influence. Continued sturdy demand from
transportation was joined with a resurgence in aerospace and protection gross sales.

Gross Revenue
                                               Quarter ended                              Quarter ended
                                              October 3, 2021                            October 4, 2020                                 Improve (Lower)
                                                          Proportion                                 Proportion
                                        In                 of Complete                In                 of Complete                           In
                                     Hundreds of thousands             Web Gross sales             Hundreds of thousands             Web Gross sales                        Hundreds of thousands                        %
Gross Revenue                        $  177.9                     22.5  %       $  177.5                     25.1  %       $             0.4                           0.2  %


                                               Six months ended                           Six months ended
                                               October 3, 2021                            October 4, 2020                                 Improve (Lower)
                                                           Proportion                                 Proportion
                                         In                 of Complete                In                 of Complete                          In
                                      Hundreds of thousands             Web Gross sales             Hundreds of thousands             Web Gross sales                       Hundreds of thousands                        %
Gross Revenue                         $  371.1                     23.1  %       $  352.5                     24.9  %       $            18.6                          5.3  %




Gross revenue elevated $0.4 million or 0.2% within the second quarter and elevated
$18.6 million or 5.3% within the six months of fiscal 2022 in comparison with the
comparable intervals of fiscal 2021. Gross revenue, as a proportion of internet gross sales,
decreased 260 foundation factors and 180 foundation factors within the second quarter and 6
months of fiscal 2022, respectively, in comparison with the second quarter and 6
months of fiscal 2021. The lower within the gross revenue margin within the present
quarter and 6 month interval displays the adverse influence of upper freight
prices and part shortages from our provide chain together with different
inflationary pressures in uncooked supplies, provides and utilities. Vitality Programs
is most acutely impacted by these pressures. Motive Energy and Specialty loved
delicate enhancements in gross revenue margin from value will increase and productiveness
enhancements, offsetting their value will increase.
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Working Gadgets
                                                        Quarter ended                              Quarter ended
                                                       October 3, 2021                            October 4, 2020                                 Improve (Lower)
                                                                   Proportion                                 Proportion
                                                 In                 of Complete                In                 of Complete                          In
                                              Hundreds of thousands             Web Gross sales             Hundreds of thousands             Web Gross sales                       Hundreds of thousands                        %
Working bills                           $  125.3                     15.8  %       $  119.0                     16.8  %       $             6.3                           5.3  %
Restructuring and different exit fees         $    2.9                      0.4  %       $    3.1                      0.5  %       $            (0.2)                         (8.4) %


                                                       Six months ended                           Six months ended
                                                       October 3, 2021                            October 4, 2020                                 Improve (Lower)
                                                                   Proportion                                 Proportion
                                                 In                 of Complete                In                 of Complete                          In
                                              Hundreds of thousands             Web Gross sales             Hundreds of thousands             Web Gross sales                       Hundreds of thousands                        %
Working bills                           $  249.8                     15.5  %       $  239.4                     16.9  %       $            10.4                          4.3  %
Restructuring fees                        $   10.7                      0.7  %       $    4.5                      0.3  %       $             6.2                              NM


NM = not significant

Working bills, as a proportion of gross sales, decreased 100 foundation factors and 140
foundation factors within the second quarter and 6 months of fiscal 2022, in comparison with
the comparable intervals of fiscal 2021. We now have benefited from restricted journey and
lowered promoting bills. Whereas a few of these advantages are COVID-19 associated, we
imagine our working bills have been lowered, the good thing about which continues
as our income improves.

Promoting bills, our principal part of working bills, elevated $3.2
million or 6.3% within the second quarter of fiscal 2022 in comparison with the second
quarter of fiscal 2021 however decreased 30 foundation factors. Within the six months of
fiscal 2022, promoting bills elevated by $6.2 million or 6.1% in comparison with the
six months of fiscal 2021 however decreased 50 foundation factors. The lower in promoting
bills as a proportion of gross sales in each the present quarter and 6 months,
demonstrates our capability to flex our promoting bills.

Restructuring and different exit prices

Restructuring applications

Included in our second quarter and 6 months of fiscal 2022 working outcomes
of Vitality Programs have been restructuring fees of $0.2 million and $1.1 million,
respectively. Included in our second quarter and 6 months of fiscal 2022
working outcomes of Motive Energy have been restructuring fees of $0.8 million and
$1.2 million, respectively.

Included in our second quarter and 6 months of fiscal 2021 working outcomes
of Vitality Programs have been restructuring fees of $1.3 million and $1.8 million,
respectively, primarily regarding Alpha. Included in our second quarter and
six months of fiscal 2021 working outcomes of Motive Energy have been restructuring
fees of $0.2 million and $1.0 million, respectively.

Exit charges

Hagen, Germany

In the course of the third quarter of fiscal 2021, we dedicated to a plan to shut
considerably all of our facility in Hagen, Germany, which produces flooded
motive energy batteries for forklifts. Administration decided that future demand
for the motive energy batteries produced at this facility was not adequate,
given the conversion from flooded to upkeep free batteries by clients,
the prevailing variety of opponents available in the market, in addition to the close to time period
decline in demand and elevated uncertainty from the pandemic. We plan to retain
the ability with restricted gross sales, service and administrative capabilities together with
associated personnel for the foreseeable future.

We presently estimate that the overall fees for these actions will quantity to
roughly $60.0 million, nearly all of that are anticipated to be recorded
by the top of calendar 2021. Money fees for worker severance associated
funds, cleanup associated to the ability, contractual releases and authorized
bills are estimated to be $40.0 million and non-cash fees from stock
and gear write-offs are estimated to be $20.0 million. These actions
resulted within the discount of roughly
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200 staff. Throughout fiscal 2021, the Firm recorded money fees regarding
severance of $23.3 million and non-cash fees of $7.9 million primarily
regarding fastened asset write-offs.

In the course of the six months of fiscal 2022, the Firm recorded money fees,
primarily regarding severance of $6.7 million and non-cash fees of $3.6
million primarily regarding fastened asset write-offs. The Firm additionally recorded
a non-cash write off regarding inventories of $1.0 million, which was reported
in value of products bought.

Targovishte, Bulgaria

Throughout fiscal 2019, the Firm dedicated to a plan to shut its facility in
Targovishte, Bulgaria, which produced diesel-electric submarine batteries.
Administration decided that the long run demand for batteries of diesel-electric
submarines was not adequate given the variety of opponents available in the market.
In the course of the six months of fiscal 2022, the Firm bought this facility for $1.5
million. A internet achieve of $1.2 million was recorded as a credit score to exit fees in
the Consolidated Condensed Assertion of Revenue.

Vijayawada, India

Throughout fiscal yr 2021, we additionally dedicated to setting up a plan to shut our plant in Vijayawada, India align with the strategic imaginative and prescient of our new construction and our business footprint. We now have recorded an exit payment of $ 1.5 million
primarily associated to impairment of property.

2022 tax program

Zamudio, Spain

In the course of the six months of fiscal 2022, the Firm closed a minor assembling
plant in Zamudio, Spain and bought the identical for $1.8 million. A internet achieve of $0.7
million was recorded as a credit score to exit fees within the Consolidated Condensed
Assertion of Revenue.

Richmond, Kentucky Plant Hearth

Throughout fiscal yr 2021, the Firm settled its claims with its insurer regarding the fireplace that broke out within the battery coaching space of ​​the Richmond, Kentucky motive energy plant throughout fiscal yr 2020.

In the course of the six months of fiscal 2021, the Firm recorded an extra cost of
$15.3 million for cleanup and obtained $18.1 million in advances from the
insurance coverage carriers. Along with the property harm declare, the Firm additionally
obtained $5.2 million regarding a partial settlement of its declare for enterprise
interruption, which was recorded as a discount to value of products bought.

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Working Earnings
                                                            Quarter ended                                       Quarter ended
                                                           October 3, 2021                                     October 4, 2020                                Improve (Lower)
                                                                         Proportion                                          Proportion
                                                   In                     of Complete                     In                     of Complete                       In
                                                Hundreds of thousands                Web Gross sales (1)               Hundreds of thousands                Web Gross sales (1)                 Hundreds of thousands                   %
Vitality Programs                              $          1.2                         0.3  %       $         22.8                         6.7  %       $            (21.6)             (95.1) %
Motive Energy                                          41.0                        12.8                    24.2                         9.2                        16.8               69.8
Specialty                                             11.4                        11.3                    11.5                        11.0                        (0.1)                 -
Subtotal                                              53.6                         6.8                    58.5                         8.3                        (4.9)              (8.6)
Stock adjustment regarding exit
actions - Motive Energy                             (1.0)                       (0.3)                      -                           -                        (1.0)                   NM
Restructuring and different exit fees
- Vitality Programs                                      (0.2)                          -                    (1.3)                       (0.4)                        1.1              (87.9)
Restructuring and different exit fees
- Motive Energy                                        (2.7)                       (0.8)                   (1.7)                       (0.6)                       (1.0)              59.2
Restructuring and different exit fees
- Specialty                                              -                           -                    (0.1)                       (0.1)                        0.1              (81.3)

Complete working earnings                    $         49.7                         6.3  %       $         55.4                         7.8  %       $             (5.7)             (10.3) %


NM = not significant
(1) The chances proven for the segments are computed as a proportion of the
relevant phase's internet gross sales.

                                                      Six months ended                              Six months ended
                                                       October 3, 2021                               October 4, 2020                             Improve (Lower)
                                                                  Proportion                                    Proportion
                                               In                  of Complete                  In                  of Complete                       In
                                            Hundreds of thousands             Web Gross sales (1)            Hundreds of thousands             Web Gross sales (1)                 Hundreds of thousands                   %
Vitality Programs                             $    8.3                         1.1  %       $   44.8                         6.5  %       $            (36.5)             (81.7) %
Motive Energy                                   91.6                        14.0              51.5                         9.8                        40.1               78.2
Specialty                                      22.4                        10.7              16.8                         8.6                         5.6               34.5
Subtotal                                      122.3                         7.6             113.1                         8.0                         9.2                8.0
Stock adjustment regarding
exit actions - Motive Energy                 (1.0)                       (0.1)                -                           -                        (1.0)                   NM
Restructuring and different exit fees
- Vitality Programs                               (0.7)                       (0.1)             (1.8)                       (0.3)                        1.1              (64.8)
Restructuring and different exit fees
- Motive Energy                                (11.2)                       (1.7)             (2.5)                       (0.5)                       (8.7)                   NM
Restructuring and different exit fees
- Specialty                                     1.2                         0.6              (0.2)                       (0.1)                        1.4                    NM

Complete working earnings                   $  110.6                         6.9  %       $  108.6                         7.7  %       $              2.0                1.8  %


NM = not significant
(1) The chances proven for the segments are computed as a proportion of the
relevant phase's internet gross sales.

Working earnings decreased $5.7 million or 10.3% however elevated $2.0 million or
1.8% within the second quarter and 6 months of fiscal 2022, respectively, in contrast
to the second quarter and 6 months of fiscal 2021. Working earnings, as a
proportion of internet gross sales, decreased 150 foundation factors and 80 foundation factors within the
second quarter and 6 months of fiscal 2022, respectively, in comparison with the
second quarter and 6 months of fiscal 2021.

The Vitality Programs working earnings, as a proportion of gross sales, decreased 640
foundation factors and 540 foundation factors within the second quarter and 6 months of fiscal
2022, respectively, in comparison with the second quarter and 6 months of fiscal
2021. Larger freight prices together with greater uncooked materials prices and lack of
part availability negatively impacted the efficiency and gross sales mixture of this
line of enterprise.

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The Motive Energy working earnings, as a proportion of gross sales, elevated 360
foundation factors and 420 foundation factors within the second quarter and 6 months of fiscal
2022, respectively, in comparison with the second quarter and 6 months of fiscal
2021. The sturdy restoration in natural progress together with value will increase, improved
the efficiency of this line of enterprise.

The Specialty working earnings, as a proportion of gross sales, elevated 30 foundation
factors and 210 foundation factors within the second quarter and 6 months of fiscal 2022,
respectively, in comparison with the second quarter and 6 months of fiscal 2021.
Income progress and value controls mitigated provide chain disruptions, permitting
the enlargement in Specialty's working margins.


Curiosity Expense
                                                     Quarter ended                                   Quarter ended
                                                    October 3, 2021                                 October 4, 2020                                   Improve (Lower)
                                                                  Proportion                                      Proportion
                                              In                   of Complete                   In                   of Complete                          In
                                           Hundreds of thousands               Web Gross sales                Hundreds of thousands               Web Gross sales                       Hundreds of thousands                        %
Curiosity expense                       $         9.6                      1.2  %       $         9.8                      1.4  %       $            (0.2)                         (2.6) %


                                                        Six months ended                                  Six months ended
                                                         October 3, 2021                                   October 4, 2020                                    Improve (Lower)
                                                                        Proportion                                        Proportion
                                                   In                    of Complete                    In                    of Complete                          In
                                                Hundreds of thousands                Web Gross sales                 Hundreds of thousands                Web Gross sales                       Hundreds of thousands                        %
Curiosity expense                           $          18.7                      1.2  %       $          20.0                      1.4  %       $            (1.3)                         (6.6) %



Curiosity expense of $9.6 million within the second quarter of fiscal 2022 (internet of
curiosity revenue of $0.5 million) was $0.2 million decrease than the curiosity
expense of $9.8 million within the second quarter of fiscal 2021 (internet of curiosity
revenue of $0.5 million).

Curiosity fees of $ 18.7 million throughout the half-year of fiscal yr 2022 (internet of curiosity revenue of $ 1.1 million) was $ 1.3 million lower than curiosity expense of 20.0 million throughout the half-year of fiscal yr 2021 (internet of curiosity revenue of $ 1.0 million).

The lower in curiosity expense within the second quarter and 6 months of fiscal
2022 is primarily because of decrease rates of interest and borrowing. Our common debt
excellent was $1,093.3 million and $1,063.2 million within the second quarter and
six months of fiscal 2022, respectively, in comparison with $1,101.2 million and
$1,130.3 million within the second quarter and 6 months of fiscal 2021.

In reference to the Second Amended Credit score Facility, we capitalized $3.0
million in debt issuance prices and wrote off $0.1 million of unamortized debt
issuance prices. Included in curiosity expense are non-cash fees for deferred
financing charges of $0.6 million and $1.1 million within the second quarter and 6
months of fiscal 2022, respectively, in comparison with $0.5 million and $1.0 million
within the second quarter and 6 months of fiscal 2021.

Different (revenue) Expenditure, internet

                                                     Quarter ended                                   Quarter ended
                                                    October 3, 2021                                 October 4, 2020                                   Improve (Lower)
                                                                  Proportion                                      Proportion
                                              In                   of Complete                   In                   of Complete                          In
                                           Hundreds of thousands               Web Gross sales                Hundreds of thousands               Web Gross sales                       Hundreds of thousands                        %
Different (revenue) expense, internet            $         0.2                      0.1  %       $         4.1                      0.6  %       $            (3.9)                        (95.2) %




                                                Six months ended                                  Six months ended
                                                 October 3, 2021                                  October 4, 2020                                Improve (Lower)
                                                                Proportion                                       Proportion
                                           In                    of Complete                   In                    of Complete                      In
                                        Hundreds of thousands                Web Gross sales                Hundreds of thousands                Web Gross sales                   Hundreds of thousands                    %
Different (revenue) expense, internet        $          (0.3)                       -  %       $          5.5                      0.4  %       $               (5.8)                  NM


NM = not significant

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Different (revenue) expense, internet within the second quarter of fiscal 2022 was expense of
$0.2 million in comparison with expense of $4.1 million within the second quarter of fiscal
2021. Different (revenue) expense, internet within the six months of fiscal 2022 was revenue of
$0.3 million in comparison with expense of $5.5 million within the six months of fiscal
2021. Overseas forex influence resulted in a lack of $0.2 million and a achieve of
$0.9 million within the second quarter and 6 months of fiscal 2022, respectively,
in comparison with a international forex lack of $3.5 million and $4.8 million within the
second quarter and 6 months of fiscal 2021, respectively.


Revenue earlier than revenue tax

                                                     Quarter ended                                    Quarter ended
                                                    October 3, 2021                                  October 4, 2020                                    Improve (Lower)
                                                                   Proportion                                       Proportion
                                              In                    of Complete                   In                    of Complete                          In
                                           Hundreds of thousands                Web Gross sales                Hundreds of thousands                Web Gross sales                       Hundreds of thousands                        %
Earnings earlier than revenue taxes           $         39.9                      5.0  %       $         41.5                      5.8  %       $            (1.6)                         (3.7) %


                                                  Six months ended                                  Six months ended
                                                   October 3, 2021                                   October 4, 2020                                   
 Improve (Lower)
                                                                  Proportion                                        Proportion
                                             In                    of Complete                    In                    of Complete                           In
                                          Hundreds of thousands                Web Gross sales                 Hundreds of thousands                Web Gross sales                        Hundreds of thousands                        %
Earnings earlier than revenue taxes         $          92.2                      5.7  %       $          83.1                      5.9  %       $             9.1                           11.0  %




Because of the above, earnings earlier than revenue taxes within the second quarter of
fiscal 2022 decreased $1.6 million, or 3.7%, in comparison with the second quarter of
fiscal 2021 and elevated $9.1 million, or 11.0% within the six months of fiscal
2022 in comparison with the six months of fiscal 2021.
Revenue Tax Expense
                                                       Quarter ended                                   Quarter ended
                                                      October 3, 2021                                 October 4, 2020                                   Improve (Lower)
                                                                    Proportion                                      Proportion
                                                In                   of Complete                   In                   of Complete                          In
                                             Hundreds of thousands               Web Gross sales                Hundreds of thousands               Web Gross sales                       Hundreds of thousands                        %
Revenue tax expense                       $         4.3                      0.5  %       $         5.8                      0.8  %       $            (1.5)                        (25.2) %
Efficient tax fee                                         10.8%                                           13.9%                                               (3.1)%


                                                       Six months ended                                  Six Months Ended
                                                        October 3, 2021                                   October 4, 2020                                    Improve (Lower)
                                                                       Proportion                                        Proportion
                                                  In                    of Complete                    In                    of Complete                           In
                                               Hundreds of thousands                Web Gross sales                 Hundreds of thousands                Web Gross sales                        Hundreds of thousands                        %
Revenue tax expense                        $          12.7                      0.7  %       $          12.2                      0.9  %       $             0.5                           4.1  %
Efficient tax fee                                           13.7%                                             14.6%                                                (0.9)%



The Firm's revenue tax provision consists of federal, state and international revenue
taxes. The tax provision for the second quarter of fiscal 2022 and 2021 was
primarily based on the estimated efficient tax charges relevant for the complete years ending
March 31, 2022 and March 31, 2021, respectively, after giving impact to gadgets
particularly associated to the interim intervals. Our efficient revenue tax fee with
respect to any interval could also be risky primarily based on the combo of revenue within the tax
jurisdictions, during which we function, change in tax legal guidelines and the quantity of our
consolidated earnings earlier than taxes.

On Could 19, 2019, a public referendum held in Switzerland authorized the Federal
Act on Tax Reform and AHV (Outdated-Age and Survivors Insurance coverage) Financing (TRAF) as
adopted by the Swiss Federal Parliament on September 28, 2018. The Swiss tax
reform measures have been efficient January 1, 2020. The Firm recorded an revenue
tax good thing about $1.9 million throughout the six months of fiscal 2021.

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The consolidated efficient revenue tax charges for the second quarter of fiscal
2022 and 2021 have been 10.8% and 13.9%, respectively and have been 13.7% and 14.6% for
the six months of fiscal 2022 and 2021, respectively. The speed lower within the
second quarter in comparison with the prior quarter is primarily because of Hagen, Germany
exit fees and adjustments within the mixture of earnings amongst tax jurisdictions. The
fee lower within the six months of fiscal 2022 in comparison with the prior yr interval
is primarily because of Hagen, Germany exit fees and adjustments in mixture of earnings
amongst tax jurisdictions, partially offset by the Swiss tax reform.

Overseas revenue as a proportion of worldwide revenue is estimated to be 76% for
fiscal 2022 in comparison with 67% for fiscal 2021. The international efficient revenue tax
fee for the six months of fiscal 2022 and 2021 have been 9.9% and 10.6%,
respectively. Revenue from the Firm's Swiss subsidiary comprised a considerable
portion of our general international mixture of revenue for each fiscal 2022 and monetary
2021 and have been taxed at an efficient revenue tax fee of roughly 8% in each
intervals.

Important accounting conventions and estimates

There have been no materials adjustments to our vital accounting insurance policies from
these mentioned underneath the caption "Important Accounting Insurance policies and Estimates"
in Merchandise 7. Administration's Dialogue and Evaluation of Monetary Situation and
Outcomes of Operations in our 2021 Annual Report.

Liquidity and capital assets

Money circulation and financing actions

Working actions used money of $65.6 million within the six months of fiscal 2022
in comparison with $217.3 million of money generated within the six months of fiscal 2021,
with the lower in working money ensuing primarily because of adjustments in our
main working capital, particulars of which will be discovered beneath. Within the six months
of fiscal 2022, main working capital, internet of forex translation adjustments,
resulted in an outflow of funds of $142.3 million. Within the six months of fiscal
2022, internet earnings have been $79.5 million, depreciation and amortization $48.3
million, stock-based compensation $9.4 million, non-cash fees regarding
exit fees $3.8 million, primarily regarding the Hagen, Germany plant
closure, allowance for uncertain money owed of $1.2 million and non-cash curiosity of
$1.1 million. Pay as you go and different present property have been a use of funds of $19.0
million, primarily from a rise of contract property of $7.0 million and different
pay as you go bills of $12.0 million, corresponding to taxes, insurance coverage and different advances.
Accrued bills have been a use of funds of $48.0 million primarily from Hagen
severance funds of $19.6 million, payroll associated funds of $15.3 million,
revenue tax funds of $10.7 million and promoting and different bills of $3.2
million.
Within the six months of fiscal 2021, working actions supplied money of $217.3
million and was from a discount of $78.1 million in our main working
capital, internet of forex translation adjustments. Within the six months of fiscal 2021,
internet earnings have been $70.9 million, depreciation and amortization $47.1 million,
stock-based compensation $10.6 million, non-cash fees regarding exit
fees $1.8 million, deferred tax good thing about $1.8 million and non-cash curiosity
of $1.0 million. Pay as you go and different present property supplied a supply of funds of
$7.4 million, primarily from the receipt of $23.1 million in direction of the insurance coverage
receivable regarding the Richmond plant declare in fiscal 2020 and the receipt
of a working capital adjustment declare of $2.0 million, regarding an
acquisition made a number of years in the past, partially offset by a rise in contract
property of $10.4 million and different pay as you go bills corresponding to taxes and insurance coverage
of $7.3 million. Different property decreased by $3.1 million. Accrued bills
supplied a supply of funds of $1.3 million primarily from payroll associated
accruals of $12.5 million, offset by funds of guarantee of $4.2 million,
freight, tariffs and different bills of $7.0 million. Different liabilities decreased
by $3.0 million primarily regarding revenue taxes.

As defined within the dialogue of our use of "non-GAAP monetary measures," we
monitor the extent and proportion of main working capital to gross sales. Major
working capital for this objective is commerce accounts receivable, plus inventories,
minus commerce accounts payable. The ensuing internet quantity is split by the
trailing three month internet gross sales (annualized) to derive a main working capital
proportion. Major working capital was $930.6 million (yielding a main
working capital proportion of
29.4%) at October 3, 2021, $797.9 million (yielding a main working capital
proportion of 24.5%) at March 31, 2021 and $763.7 million at October 4, 2020
(yielding a main working capital proportion of 27.0%). The first working
capital proportion of 29.4% at October 3, 2021 is 490 foundation factors greater than
that for March 31, 2021 and 240 foundation factors greater than that for October 4,
2020. The big improve in main working capital {dollars}, in comparison with the six
months of fiscal 2021 displays the rise in all parts of stock
ranges because of provide chain delays, new merchandise and better stock prices from
greater uncooked materials prices, manufacturing and freight prices. As well as, commerce
receivables elevated because of greater income throughout the present six months of
fiscal 2022, as in comparison with a COVID-19 restricted income within the prior yr. The
improve in main working capital {dollars} in comparison with March 31, 2021 is
primarily because of elevated stock ranges for comparable causes as said above.

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Major working capital and first working capital percentages at October 3,
2021, March 31, 2021 and October 4, 2020 are computed as follows:
                                               ($ in Hundreds of thousands)
                                                                                    Quarter         Major
                         Commerce                          Accounts                    Income         Working
Stability At            Receivables       Stock       Payable       
Complete       Annualized      Capital %
October 3, 2021      $      584.6      $    641.0      $ (295.0)     $ 930.6      $  3,165.6          29.4  %
March 31, 2021              603.6           518.2        (323.9)       797.9         3,254.2          24.5
October 4, 2020             499.8           516.6        (252.7)       763.7         2,833.6          27.0




Investing actions used money of $31.2 million within the six months of fiscal 2022
which primarily consisted of capital expenditures of $34.6 million regarding
plant enhancements. We additionally obtained $3.3 million from the sale of two of our
services in Europe.

Investing actions used money of $ 39.8 million throughout the six months of fiscal 2021, which consisted primarily of capital expenditures associated to the advance of the plant.

In the course of the second quarter of fiscal 2022, we entered into the Second Amended
Credit score Facility. Consequently, financing actions supplied money of $53.9
million within the six months of fiscal 2022. In the course of the six months of fiscal 2022,
we borrowed $275.7 million underneath the Second Amended Revolver and repaid $5.7
million of the Second Amended Revolver. Reimbursement on the Second Amended Time period
Mortgage was $161.4 million and internet borrowings on short-term debt have been $2.2 million.
Treasury inventory open market purchases have been $31.5 million, fee of money
dividends to our stockholders have been $14.9 million and fee of taxes associated to
internet share settlement of fairness awards have been $9.0 million. Debt issuance prices
regarding the refinancing of the Credit score Facility was $3.0 million. Proceeds
from inventory choices have been $1.1 million.

Financing actions used money of $105.8 million within the six months of fiscal
2021. In the course of the six months of fiscal 2021, we borrowed $45.0 million underneath the
Amended Revolver and repaid $100.0 million of the Amended Revolver. Reimbursement on
the Amended Time period Mortgage was $16.8 million and internet funds on short-term debt have been
$16.5 million. Cost of money dividends to our stockholders have been $14.9 million
and fee of taxes associated to internet share settlement of fairness awards have been $4.6
million.
Foreign money translation had a adverse influence of $1.4 million on our money stability
within the six months of fiscal 2022 in comparison with the constructive influence of $15.6
million within the six months of fiscal 2021. Within the six months of fiscal 2022,
principal currencies during which we do enterprise such because the Euro, Swiss franc,
Polish zloty and British pound usually weakened versus the U.S. greenback.

Because of the above, complete money and money equivalents decreased by $ 44.3 million To $ 407.5 million, throughout the first half of fiscal yr 2022 in comparison with a rise of $ 87.3 million To $ 414.2 million, throughout the six months of fiscal 2021.

Compliance with restrictive covenants

On July 15, 2021, we entered right into a second modification to our Amended Credit score
Facility that resulted within the extension of the maturity date for the Second
Amended Credit score Facility to September 30, 2026, resetting of the principal
amortization with respect to the Amended Time period Mortgage, refinancing the prevailing
Amended Time period Mortgage, rising the revolving line of credit score restrict, and sure
different modifications.

All obligations underneath our Second Amended Credit score Facility are secured by, amongst
different issues, considerably all of our U.S. property. The Second Amended Credit score
Facility comprises numerous covenants which, absent prepayment in stuffed with the
indebtedness and different obligations, or the receipt of waivers, restrict our capability
to conduct sure specified enterprise transactions, purchase or promote property out of
the bizarre course of enterprise, have interaction in sale and leaseback transactions, pay
dividends and take sure different actions. There aren't any prepayment penalties on
loans underneath this credit score facility.

We're in compliance with all covenants and circumstances underneath our Second Amended
Credit score Facility and Senior Notes. We imagine that we'll proceed to conform
with these covenants and circumstances, and that we now have the monetary assets
and the capital out there to fund the foreseeable natural progress in our enterprise
and to stay lively in pursuing additional acquisition alternatives. See Notice 10
to the Consolidated Monetary Statements included in our 2021 Annual Report and
Notice 12 to the Consolidated Condensed Monetary Statements included on this
Quarterly Report on Type 10-Q for an in depth description of our debt.
                                       39

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Contents

Contractual obligations and business commitments

A desk of our obligations is contained in Half II, Merchandise 7. Administration's
Dialogue and Evaluation of Monetary Situation and Outcomes of Operations -
Contractual Obligations of our 2021 Annual Report. On July 15, 2021, the Firm
entered right into a second modification to its present Amended Credit score Facility. The
Second Amended Credit score Facility, scheduled to mature on September 30, 2026,
consists of a $130.0 million senior secured time period mortgage, a CAD 106.4 million
($84.2 million) time period mortgage and an $850.0 million senior secured revolving credit score
facility. The second modification resulted in a lower of the Amended Time period Mortgage
by $150.0 million and a rise of the Amended Revolver by $150.0 million. As
of October 3, 2021, the principal and curiosity funds due underneath the Second
Amended Credit score Facility are as follows: $3.3 million in fiscal 2022, $11.9
million in fiscal 2023, $17.1 million in fiscal 2024, $19.6 million in fiscal
2025, $24.7 million in fiscal 2026 and $438.9 in fiscal 2027.

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