Morning, everybody. Thank you once again for joining us at our 38th Annual ROTH Conference. My name is Chip Moore. I'm a Senior Analyst covering the sustainability sector. Our two-day institutional investor conference will feature approximately 130 fireside chats and 50 panels. There are approximately 500 companies available for one-on-ones. If you've not booked meetings yet, please visit our one-on-one desk upstairs by the lobby. Panels and track lineups are displayed outside throughout the venue and listed on the conference website and paper schedules. I'd like to give a special acknowledgement to our conference sponsors and this track sponsor, The Blueshirt Group, Sustain SoCal, Gibson Dunn, and NGO Sustainability. Thank you all for making the trip to Orange County. I hope you enjoy your time with us and the nice weather. A few housekeeping items. Fireside chats, the Healthcare track are live-streamed and accessible in the conference portal or the app. One-on-one meetings are subject to change. There are kiosks upstairs. You can check your real-time schedule or use your QR code on the badge, and you can also check with the one-on-one desk, for your latest schedule. Please visit our sponsor booths and enjoy a complimentary lunch this afternoon in the Monarch Courtyard, Araya Restaurant, Pacific Promenade Ballroom Foyer. Lastly, we've got Wi-Fi available. The network ID is Roth, no password, and please be sure to silence your cell phone. Once again, welcome to our ROTH Conference, and thank you for joining us today. Okay, our first presenter here, very excited to have EnerSys. We've got Andrea Funk, CFO, Shawn O'Connell, CEO. We've also got Lisa here in the front row from Vice President of IR and Corporate Communications. With that, Shawn, maybe kick us off with a brief overview of EnerSys, its recent evolution and a little history. Sure. Thank you, Chip. Thank you for joining us this morning. EnerSys, a little bit about the company, is a market leader in stored energy solutions at a time when battery energy storage is all the rage. Our company's been around a long time, and we quietly put out many gigawatt-hours. We have about 16 GWh annual production capacity in some of the world's most critical applications, and we have commanding shares in the markets we serve. That number I know doesn't sound maybe as large as some of the EV numbers you hear for gigawatt hours of production, but I'd just like to let you know we don't do anything with EV, and we're not in the open C&I market, you know, putting large trailers of EV storage together or, I'm sorry, battery energy storage together. We have a technology stack that starts with the battery. Our heritage began in lead-acid batteries. We have the battery, we have the power electronics that charge and manage those batteries and disperse the energy from those batteries to critical applications. We have software systems that manage how we control that power for the user, how we report on that power, how we aggregate that power for things like power offset with their utility. We have a global service organization, not contracted EnerSys employees, that keep everything running smoothly. This technology stack, it can be deployed across our markets. Our markets might sound diverse, but the core of our technology is the same, and we can deploy it as needed into some of these markets, and I'll explain really quick what they are. The first market that we're concerned with is an amalgam. It's network and infrastructure. What this is is your telephone companies, internet service providers, data centers, and we have an industrial component, which is largely switchgear and control in power utility. The next segment for us is material handling, warehousing, logistics, where we're primarily concerned with the electrification of forklift fleets and incidentally, battery and energy storage systems that solve issues of power famine and power cost in those warehouses. Also Class 8 over-the-road truck for things like APUs. We keep the supply chains moving more efficiently. Our final business, I'll tell you about is our specialty business, which is largely aerospace and defense. In aerospace and defense, we are the largest supplier of battery to the U.S. military across a variety of applications, drones, unmanned vehicle, armored vehicle, nuclear submarine, fighter aircraft, satellites. Some of the most advanced satellites in military history is an EnerSys battery. A very diverse set and, by merit of some recent acquisitions, soldier power and forward operating base drone powering for rechargeable drones. You can clearly identify in those first few remarks that we're exposed to some of the largest super cycles of our time, energy and defense with what's going on in defense, not just the $1 trillion in the U.S. that we're gonna spend, but allied ministries of defense around the world where we have a very strong position. Our strategic premise is quite simple. We are going to help our customers solve the energy security issue and the labor scarcity issue. Energy security, I'll break down in the following buckets. You have the biggest issue we're seeing immediately for our customers is the cost of energy, followed by power famine, the ability to get energy and continue to operate. Energy security for the Department of Defense is domestication of supply chain and making sure that the batteries they need aren't being built by the number one peer threat in the world, which is the case today. The labor scarcity issue, you know, I've put my own spin on Larry Fink's words, and I'll tell you, I think we're gonna run out of electricians before electrons. EnerSys, yes, it has its own service company, but our systems enable remote monitoring. We have AI and machine learning embedded in how we manage power, so we can usually remove human labor from the equation. When we can't, EnerSys can deploy its service company to help with that. Those are our big two strategic pillars of the company. Just very quickly, I'm less than a year on the job as CEO. I launched a strategic reset in our company that is called EnerGize, and what it really is is about getting back to our core business, focusing acutely on our core. These are great markets that we're in. Making sure that we're not doing anything non-value add with our cost structure, that we have the operating rigor to execute, and that we can execute on our growth. By the way, EnerSys, if you look at our numbers, we're a solid cash generator, and we wanna put that cash to work on the right things. Our growth means placing the right bets and executing on those bets. I'll just tell you very quickly, my team's energized. We made everybody Reading, Pennsylvania is at Laguna Niguel. Not everybody wanted to go there. We got the whole senior team to move there. They're working together to solve our biggest challenges. They are truly invigorated. They're some of the most talented people you'll find in our industry, probably in any industry, and we're all very excited. There's never been a time for more opportunity at EnerSys. For us, this isn't an opportunity or finding a customer. For us, it's execution on what customers are asking us to do. That's my- Fantastic. Yeah. Thanks, Shawn. Maybe we dive into the, you know, segments and markets a little bit, you know, starting with energy systems, communications market, how you're thinking about prospects for growth there, volumes, and what you've seen really, you know, coming out of supply chain issues, inflation, higher rates. Yeah. We had some doldrums there for a while, right, where I've been doing this since the 1990s. I've only seen two times in my career where the telecoms cut down even maintenance spend, which is just tech debt. They know they have to do it later. One was in 2002 when CLEC and ILEC went away, and the other was in 2004. That's how acute it was because they built up all these inventories. They thought they were building towards 5G, then they realized they had a 5G monetization issue. Interest rates went through the roof. It was just sort of a perfect storm. We're now coming out the other side of that. We're beginning to see green shoots. But here's the thing. Every last one of these carriers and providers, including the cable and broadband guys who process 80% of the backhauled internet traffic in this country, they all have to expand their data capability, all of them. None of us are gonna accept that there are all these great AI use cases in the world, and we can't get it to our handset. Well, those are the guys that are gonna make that possible. It's unlike previous cycles where everybody built macro sites for 4G and 5G. Everybody's kind of picking their spots now. The cable and broadband guys are preparing for DOCSIS 4.0 to expand their data bandwidth. They also have to do so. Those things are more power hungry, so they're looking to us to decrease total power consumption and make the systems more effective. It's a network refresh, but for us, it'd be a very lucrative network refresh. Some of the wireless carriers, one in particular who was first in 5G, they're improving their macro site data bandwidth. The rest of them are doing things like fiber, dark fiber, millimeter wave. When I'm asked, though, Chip, which one of those are gonna prevail, which one of those will be needed or when in this rush to deliver more data, my answer is just yes, all of them, because they all will be needed. Here's the thing to remember about EnerSys. We have a position in any one of those technologies where we provide a power system for all of those options. We have all the sails in the wind. We really don't care which one wins because we're gonna participate. You know, on the other side, data center, right? An exciting market. Just remind us the role you play there. You know, talk about your market share, your right to win, and how you view that opportunity. Yeah. That's a great question. We support the centralized UPS systems in data centers, and we have for many decades. We have a primary seat at the table, not only with the UPS manufacturers, which are our customers, guys like Vertiv and Eaton and Schneider, but we also have a seat at the table with the hyperscalers, where we are in direct communication and have direct relationships there. In the United States, for example, we have a 55% market share in lead-acid batteries. We have a new technology called Thin Plate Pure Lead, which gets you to the bottom end of, like, LFP lithium without the risk. That's growing at a very high rate for us. But these are what you should know about data centers. These are high trust environments. You can't make a bad bet on a vendor in a data center, and the industry is too small and expect to have a long career. They tend to be high trust. You need a lot of experience. We have contracts with these hyperscalers, global contracts, but it's about how you manage their supply chain for implementation schedules. It's about how you manage the service and installation. Incidentally, AC electricians don't like to work on DC power. AC power will knock you away when you touch it. DC power will draw you in and keep you there, and it kind of freaks people out. Our service companies are certified to work in these centers. For us, our biggest opportunity, we have this great position in lead. We have no business not having a lithium battery. I'm actually pleased to announce that as of this month, we have put our first lithium battery offering into customer trials to begin that validation process of that offering. It's a massive opportunity for us. Because of that high trust and how these companies know us, we have a real right to win. Very exciting. Look forward to hearing more on that. You're working with a partner there, is that right? We are working with a partner. When I came in, you know, I said we don't have to go this alone. You know, there's a lot of great technology in the world. We do have a technology partner, and I've been CEO less than a year, so from conception to customer trials, we're already rocking and rolling. Just to follow up, how do we think about order sizes progressing as these facilities, right, get massive? Wow. I could tell you the initial quotations because what'll happen is somebody, a large buyer or a hyperscaler will come to you, and they'll talk about next year's build. In an area where they're gonna build $1 trillion or $2 trillion over the next several years, that's a lot of money. The order sizes could be quite large. We've seen quotes of $40 million, $50 million at a clip. For us, it's just about what. You know, they don't just let you in even though they know you. They're gonna have to test this product, validate it, and then when they're comfortable with it, they'll put it into the deployment cycle. We're thinking just to level set expectations, this is probably a fiscal 2028 story. We're April to March. We're just about to go into our fiscal 2027. It'll probably take us about 12 months in that validation. They'll start popping us in. The good news is, usually when you hear about transformers being 2 years out and all this stuff, usually the. We're the battery guys. We kinda get stuck at the end, but that means that they order us late in the cycle too, so we're not waiting that whole 2 years by the time we get the order. Your UPS batteries [no audio] for data centers were thin plate lead, and now you're going with lithium. We've had standard lead -calcium for decades. A few years ago, we started converting that to Thin Plate Pure Lead because there's more surface area. We can put more of those plates in there. 'Cause what was happening was the data center battery market was 15-minute run times. The hyperscalers want less than 15 minutes. In fact, they want less than 5 minutes. Standard lead -calcium can't do it. It doesn't have the surface area reaction capable. Thin Plate Pure Lead does, so we can actually offer 2-minute ratings like lithium with Thin Plate Pure Lead. Just because of the demand and how that's changed is why that technology makes so much sense. We're still offering the first one. Thin Plate Pure Lead's growing at a very high CAGR, and then we'll soon to enter with lithium. Incidentally, not all greenfield data centers are going lithium. In fact, a substantial percentage are still going lead, be it risk tolerance or the local municipality won't allow lithium yet because the fire marshals aren't on board o r it could just be something simple as the architecture is too expensive because you have to design the data center differently to accommodate this, the lithium, which there's more risk with the technology, fire suppression, this kind of thing. Sean, you mentioned DC, just a lot of confusion around 800-volt DC. Just talk about what that means for EnerSys and We love it. UPS, the traditional architecture, the prevailing architecture today is something called double-conversion online. AC power comes into the UPS, rectifiers convert that to DC, where our battery is. On the other side of the battery, an inverter converts it back to AC, right? It's. The battery's got two jobs. It's filtering power, and it's providing backup. The new DC architecture is, we're thrilled 'cause we've always been offering a DC offering. But here's the thing. Right now, the standard UPS architecture is 480 volts. All 800 volts means for us is that we're just gonna put more cells in. We're gonna sell more batteries. It's already DC today. It's what we do. It's in our wheelhouse. It's just an increase in volume for us. Great. I think we could talk about data center the whole time. Maybe just for the sake of time, we move over to some of the other segments. Motive power, you know, material handling, more GDP-driven. Talk about the trends there you're seeing, electrification, automation, and how you view that segment. Well, yeah. Electrification, you know, the future is electric. The percentage of trucks that are electric today in warehouses is only in the low 60s%. We have a lot of runway to continue to convert liquid propane gas trucks to electric. You know, that labor issue that I talked about, labor scarcity, if you have labor in a warehouse, you wanna dedicate it to moving goods, not managing our power systems. Even then, they're pulling the operator out of the forklifts, and they're making them autonomous. We have great products that address these things. We have maintenance-free offerings in both lead and lithium. We've already deployed lithium into the space. That power famine issue, we have warehouses right now that want to expand, and the utility's telling them, "Listen, you can't get any more power to put more charger banks in for forklifts." Now we're having conversations with those users about our battery energy storage systems to offset that power famine. Really cool, we can use the forklift batteries and combine that with the BESS and go forklift battery, not vehicle-to-grid, but vehicle back to BESS and allow the warehouse operator to use the entirety of those assets to offset their power demand issues, offset peak cost, in some case island if they wanna do that. Very big opportunity for EnerSys. You know, follow up in this segment, you know, if you look out decades from now as lithium, right, continues to take share, just risk and opportunity for EnerSys there. It's so much opportunity. For us, you know, the cell is one thing. You know, EnerSys early in its evolution monetized the cell only. We now monetize the solution, and the customer at the end of the day is looking for what it can do for them. They don't really care. One thing I do wanna point out, Chip, is that when you see in on the open market, the cost of a lithium battery pack, it's based on EV, and it's a bulk pack. All of our value add starts after the battery. How does that system communicate with the forklift truck? What's the form, fit, and function? Does it make all the regulatory requirements of the forklift industry, which are entirely different than that of the EV or other industries? We have all that tribal knowledge. We know how all the OEM's trucks function, and we're gonna apply that into this total mount power management situation. We've also began deploying IoT into our systems, where they're now communicating back to us 'cause we have, for example, a very large retailer, one of the largest in the world, a name you would know, who has said, "EnerSys, we don't even want the data. We just want you looking at it and managing these systems for us, and if there's something that you need to deploy to take care of, just do that and add it to the bill." We have those types of service opportunities coming our way, very exciting. Early on, we were worried about risk. The largest existential threat we face is if an OEM could just package cells themselves and not need us anymore. They have the math to worry about, the drivetrain. They have all sorts of other pressures. Batteries are hard, as we know, as you see all the companies in the world that don't make it, and they're finding that out, and it's very expensive. They're more than happy to have us engage and solve some of these issues for them. Great. For the sake of time, maybe I'll switch to specialty. You know, you talked about defense in your opening comments, and I think it's pretty underappreciated, right? Largest supplier to the government. Just given what's going on in the world, you know, how is that impacting your business? What are you seeing? Maybe talk about that. Andy and I have this argument because I, you know, I tell everybody I wanna buy a company. We have a bunch of dry powder. I wanna buy companies, and she's like, "Yeah, but O'Connell, you're forgetting about all the internal investment that we're gonna do." She's absolutely correct because we are seeing, like in our munitions business, for example, we make a couple of different chemistries for things like hypersonics, Patriot missiles. We make a lithium thermal batteries, which is cobalt disulfide, iron disulfide, and we have a liquid reserve battery. The liquid reserve battery, the government has now realized that it can be used in drone defense. It's the number one battery powering the munition that they're using for drone defense. While you haven't seen the lift in our sales yet, we're seeing our order book quadruple for munitions batteries. I mean, it's just going crazy. That's just one segment of our business. The soldier power segment of our business, through our Bren-Tronics acquisition, stronger than it's ever been, and they turned us on to a company called Rebel, who makes hybridized power systems. We purchased Rebel. Rebel has now been selected as the number one forward base powering system for rechargeable drones. We just have, across that segment, we're seeing really robust growth, really robust order activity, and just a little data point. The U.S. government has about 42 programs for radio batteries, soldier power, all the batteries you'll find on the soldier. They all originate in China, their number one peer threat. They've got to domesticate that, and they wanna get that down to less than 10 options, so consolidate that to 10 programs. They're asking EnerSys for our help to do that. We've been in those discussions through our Department of Energy grant that we received and the Department of Defense, and you should expect to see an announcement for us very soon about how successful we've been in being able to achieve that goal and that roadmap with them. Great. We look forward to hearing that. On the other piece of specialty, so heavy-duty trucking market, right, has been dropping now for years. I'm sorry. Yeah, go ahead. Yeah. [no audio]Shawn, you're going pretty fast. Yeah, I know. You seem to be talking about different chemistries for drones. You said, I think, cobalt disulfide and iron disulfide. Yeah. Why would you use those instead of lithium? I mean, I'm sure most of us in the audience are just thinking, "Hey, you know, battery. It's just, you put a battery in. I implied lithium. We make nine chemistries of lithium batteries in our defense space today and have for a couple of decades. In the case of munitions, it's a thermal battery stack, meaning that there's these heat powders between these compressed disks. It's a bipolar stack. It looks almost like an oil can, a very shiny oil can. It's triggered. When it's triggered, those heat powders ignite. It becomes a molten solution. In a little can that size will deliver enough power to power your home for 480 seconds. In our case, we're powering the guidance systems on a Patriot missile. You might find this hard to believe, but you know, we don't get any warranty claims on those batteries. It's just one way. Anyway, we make nine chemistries of lithium today. We make a nickel cobalt aluminum for a space satellite battery that we sell to Lockheed Martin, 72 amp-hour on the most advanced communications military satellite in human history. We have this deep knowledge of lithium, how it functions throughout these chemistries, and we have a lot of optionality about how we deploy each of those nine into end markets. The one that's being used for drone defense is actually liquid reserve. You have these ampoules, so sorta like the same concept as a thermal battery. We rupture an ampoule, liquid is released, it activates the battery. These are called lithium oxyhalides. That liquid, once it activates the battery, again, very high energy, very short amount of time, and its whole job is to power the munition that they're using to take down drones. Make sense? Great. I think I was gonna bring up the trucking market and specialty, right? It's been weaker. Oil prices are higher now, but a lot of pent-up demand. I think you've talked about a fleet customer. Just walk us through what's going on there. Yeah. Great freight recession, right? We've all heard of that. What happened is, you know, post-COVID, when everybody was staying home and buying, you know, patio furniture from Home Depot, these freight companies couldn't keep up, and so they all bought too many trucks. That had to work its way through the snake. We're a couple of years in. We are seeing some green shoots there. We're capturing market share in the aftermarket. I think the example, Chip, that I've given is one of our customers is the largest private fleet operator in the United States. They run 412,000 tractors. I was sitting with the president a few weeks back, and he told me that they know because they haven't ordered any new trucks. If they push the button on the orders today, 50,000 of those are beyond end of life. Just to give you an idea of the pent-up demand. Their conversations right now are with PACCAR and Navistar and Volvo and Mack to find out everybody that ratcheted down in the supply chain production, how do they now ratchet back up and when can they expect to be at full production? This particular fleet operator is starting to put some initial orders in because you know what will happen. Once everybody thinks it's resolved, everybody will flood those manufacturers, and then lead times will go crazy. These guys are betting that by H2 of this year that it's gonna start to turn. We use them as a leading indicator. We haven't seen evidence of that yet. In spite of it, I think, you know, we're thrilled that we picked up some market share in the aftermarket in the meantime because they have to keep those old trucks on the road, so they need new batteries. Any questions out there? We've got about a minute and maybe, Andy, one for you. Just capital allocation, balance sheet. I think you should be getting a check from the IRS any day, just 45X and buyback and- Yeah, one of the real values of EnerSys is we've got great cash conversion. If you look at it over a multi-year period, either with or without 45X, we're a little over 100% free cash flow conversion. Got a very deep balance sheet. We're 1.2x levered at the end of our last quarter. We do have a IRS refund that should be due this month. If we don't get it this month, it'll accrue with interest to the tune of about $120 million. Nice thing is we have a lot of dry powder. Our capital allocation priorities are first to invest internally. We've got a lot of opportunities internally to grow. Fortunately, we've made a lot of investment in our lead acid plants, so our CapEx requirements in that part of the business are lower than our depreciation. On top of that, we do have a dividend that grows with earnings, excluding 45X. We target 2-3 times levered. Obviously, we're much below that right now. In the interim, as we continue to hunt for new inorganic opportunities to invest in with a disciplined approach, our Bren-Tronics acquisition was right in our sweet spot. Absent that, we're buying back stock. We announced a $1 billion buyback program, so we've been very aggressive on that front as well. Well, great. I think if there's no more questions, we're at the end of time. Thank you both so much. It's been a pleasure. Thank you.