Ladies and gentlemen, thank you for standing by and welcome to the Third Quarter 2020 EnerSys Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, David Shaffer, President and CEO. Please go ahead, sir.

Thanks, Sydney. Good morning and thank you for joining us. On the call with me this morning is Mike Schmidtlein, Happy Kansas City Chiefs Fan and also our CFO. Last evening we posted on our website slides that we will be referencing during the call this morning. If you didn't get a chance to see this information, you can go to the webcast tab in the Investors section of our website at www.enersys.com. I'm going to ask Mike to cover information regarding forward-looking statements.

Thank you, Dave, and good morning to everyone. As a reminder, we will be presenting certain forward-looking statements on this call that are based on management's current expectations and views regarding future events and operating performance and are subject to uncertainties and changes in circumstances. Our actual results may differ materially from the forward-looking statements for a number of reasons. Our forward-looking statements are applicable only as of the date of this presentation. For a list of factors that could affect our future results, including our earnings estimates, see forward-looking statements included in Item 2, Management's Discussion and Analysis of financial condition and results of operations, set forth in our Quarterly Report on Form 10-Q for the fiscal quarter ended December 29, 2019, which was filed with the U.S. Securities and Exchange Commission. In addition, we will also be presenting certain non-GAAP financial measures. For an explanation of the differences between the comparable GAAP financial information and the non-GAAP information, please see our company's Form 8-K, which includes our press release dated February 5, 2020, which is located on our website at www.enersys.com. Now let me turn it back to you, Dave.

Thanks, Mike. Before walking through our third quarter fiscal 2020 results, I'd like to remind you of a couple of important events that took place in the back half of September, each of which had an impact on our third quarter results. Please turn to slide 3. The fire that started in the formation area of our Richmond, Kentucky plant on September 19 had a significant impact on our third quarter. As we discussed during our quarterly call in November immediately following the incident, our team developed a plan to mitigate the fire's impact at Richmond by completing site cleanup, emergency building structural repairs, installing temporary power, and rerouting formation equipment in order to expand capacity at our EMEA facilities. Through our employees' hard work and dedication, we are pleased to have achieved pre-fire output by December, albeit with a couple of our North American plants providing formation capacity, and we did so keeping our customers as our priority. Unfortunately, the disruption resulting from the fire caused us to lose approximately $30 million in sales during the quarter, which was almost double what we initially anticipated in our guidance. Looking toward the immediate timeframe, we are already well into the rebuilding phase and expect to complete construction by the end of the first fiscal quarter of 2021, which will eliminate the need to use the other EnerSys factories' formation capacity. In addition, we continue to remain confident in our ability to recover nearly all lost equipment, inventory, facilities, and profits through insurance coverage. Secondly, at the beginning of Q3, we closed on the acquisition of NorthStar Battery, which aligned nicely with our strategy to increase sales of premium products, putting EnerSys in a position to accelerate our sales of higher-margin TPPL. NorthStar has two production facilities in Springfield, Missouri, where it manufactures and distributes energy storage products that are nearest in design and performance to EnerSys' existing TPPL. The newer of the two NorthStar facilities also has additional floorspace immediately available for our new TPPL high-speed production line. As you may recall, we were going to have to take out two manufacturing lines to install the high-speed line at our Warrensburg facility. We will now be able to preserve $100 million of capacity at Warrensburg in addition to NorthStar's additional capacity, no longer requiring a costly inventory buildup in advance of the installation and reducing the risk of disruption. Please turn to slide 4. The installation of the new high-speed production line began weeks after closing the acquisition and should be in production early in our upcoming fiscal year. This new line and the manufacturing capacity acquired with NorthStar will double our TPPL capacity to approximately $1.2 billion in sales of our ODYSSEY, NexSys, and SBS products by the end of next fiscal year. To give some scale to the impact of the highly automated and digitized high-speed production line, I can tell you it produces batteries three times faster than our existing TPPL production line and requires only one-third of the operators. That's a nine-fold increase in productivity per operator. In a few minutes, I will discuss the integration progress we have made during the most recent quarter, and then Mike will provide more color on the financial impact of the acquisition during his portion of the call. Please turn to slide 5 for a breakdown of our third quarter EPS results of $1.04. Please turn to slide 6. I'd now like to update you on some of our key markets, which are progressing largely in line with recent quarters. Our motive power Americas' market demand was solid in the third quarter despite headwinds from Richmond. While our traditional flooded battery sales were reduced due to the fire at Richmond, our TPPL product demand continued to grow. Our continued efforts to increase production, including the acquisition of NorthStar will drive further growth in TPPL. In the Americas, organic sales for NexSys TPPL doubled in the first three quarters of F '20 compared to the prior year corresponding three quarters. These numbers are even more impressive considering that EnerSys was TPPL capacity constrained. As a result of this growth, we have gained meaningful TPPL market share despite the overall lead-acid market staying largely flat. As previously discussed, orders in EMEA have been softening from our traditional motive power OEM customers, and we also saw the return to the market of a low-priced competitor in EMEA, following an extended shutdown. Despite these challenges, EMEA demand for higher-margin motive TPPL products continues to accelerate. Motive power in Asia continues to be slow, particularly in China due to the current trade climate with the rest of Asia remaining largely stable. We expect conditions in Asia to improve as the trade war subsides and the coronavirus recedes. As with most global companies, we continue to monitor developments with the coronavirus outbreak in China and are developing plans to mitigate any disruption to our China plants and supply chain. Moving on, we remain focused on increasing EnerSys' relatively small market share in the transportation sector by leveraging our technology platform with TPPL. In the Americas, while Class eight truck sales have recently been soft due to OEMs overbuilding in 2019 and a mild winter creating slower aftermarket sales, we are excited to see order rates picking up and long-haul new business prospects coming to fruition in the premium automotive, long-haul trucking, and agricultural sectors. In addition to having a great product, our success has been fueled by the fact that we are reaching back out to ODYSSEY accounts that we weren't able to go after on a large scale in the past because of supply constraints, and now we are in the latter stages of formalizing supply agreements with three large U.S. nationwide aftermarket retailers. In EMEA transportation, the ODYSSEY brand continues to be a highly sought-after product due to its superior product characteristics. Similar to prior quarters, our global telecom business continues to be soft. As can be seen throughout the telecom sector, normal spending patterns have been disrupted, as the overall market avoids spending on legacy equipment while awaiting the significant investment cycle in modern high-speed networks, including 5G, which most industry experts increasingly agree is rapidly approaching. In addition, one of Alpha's largest historic broadband customers continues to restrict CapEx. The team remains confident that this delayed spending is creating pent-up demand, which will be unleashed as the broadband networks continue to be stressed from a rapid increase in data consumption, ultimately requiring a more robust system buildout. Moving on to another exciting part of our business. We are pleased to have continued momentum in the aerospace and defense sector. Specifically, we are very excited about several recent contract wins providing growth for EnerSys. The growth prospects for our aerospace and defense munitions business look promising with the current annual revenue run rate expected to double by the end of 2022 with new contracts in hand. Please turn to slide 7. The industrial lead-acid battery market in North America continues with a slow steady market growth of around 1% for the last eight years, while EnerSys has grown at nearly three times the market rate, despite enjoying a leading market share position in nearly all markets. While the growth rates are modest, the business is profitable and provides a solid cash generation platform for reinvestment in acquisitions and new product development to diversify our position. One external factor that influences the overall growth rates of the industrial lead-acid battery market is new technology platforms in telecommunications, as seen historically with 4G LTE. With the advent of 5G deployments, we are expecting to see an increase in demand for energy storage and with the acquisition of Alpha, Purcell, and ICS, we are positioned to enjoy a greater share of the overall 5G spend. Please turn to slide 8. It is widely accepted that 5G small cell deployments will be different than 4G LTE, with a reduced coverage range of an ultra-wideband 5G small cell requiring a tenfold increase in the number of cells deployed. No single solution will work. A number of different location, powering, and data backhaul solutions are expected. The acquisition of Alpha brings us exciting line powering solutions where dozens of small 5G small cell sites can be powered back up and backhauled from a single cabin, allowing for faster deployment and ease of maintenance. Alpha's Cordex rectifiers and up-down converters could provide the power conversion and conditioning required for line powering. Alpha's gateway products allow a 5G small cell to be connected to over 300,000 miles of existing hybrid fiber-coaxial cable networks installed by cable TV and broadband providers, providing immediate existing power backup and access to the MSO's fiber network for data backhaul. The acquisition of ICS and Purcell can provide the ruggedized outdoor cabins required to accommodate both the Alpha electronics and the backup energy storage from EnerSys and/or lithium. These solutions can be provided either à la carte or as a complete solution. Please turn to slide 9. EnerSys is uniquely positioned to provide a single-source solution for fiber connectivity, enclosures, small cell power conversion, power distribution, and energy storage backup with a nationwide engineered furnish-and-install organization to turnkey and maintain the project. Our system solution is not unique to North America and can be deployed globally. We are in the validation stage with many large mobile telecom operators and global telecommunications OEMs, where we see a rapid acceleration of activity with the anticipation that 5G will roll out in earnest before the end of this calendar year. Please turn to slide 10. I will now provide an update on the continued progress we are making on our strategic initiatives. We have made tremendous progress with the integration of our recent acquisition of NorthStar. During the third quarter, we represented the first quarter of EnerSys ownership. We captured more than $8 million in annualized synergy savings. We have found that culturally, NorthStar is a great fit as well. NorthStar also fits into our second major strategic priority which is to significantly increase TPPL manufacturing capacity to reduce lead times and to meet the exciting and rapidly growing customer demand that continues to far outstrip our current manufacturing footprint. Finally, superior technology and innovation will remain the lifeblood of EnerSys, as we continue to distinguish ourselves as a premier manufacturer of differentiated energy storage products and power solutions. On the new products front, we have launched our 12-volt motive power TPPL block with a carbon additive which will significantly enhance product life and performance. It also allows us to achieve profit margin improvement by offering a lower total cost of ownership for our maintenance-free customers. The new TPPL motive systems will have an integrated battery management system allowing for a similar customer experience as lithium, while helping to extend the life of the energy storage product. We are set to launch our lithium solution for the material handling market in June of this year, with a variant of that system available for residential energy storage, one month later. Lithium-ion for telecommunications UPS and large energy storage systems are lined up to launch sequentially. Our focus on industry breakthroughs in safety and efficiency will make the extra time we have taken to bring these new products to market worthwhile for our customers and investors. In summary, following the strategic acquisitions and successful integration of Alpha and NorthStar, along with the development of game-changing products like our NexSys maintenance-free for Motive Power and our ODYSSEY branded products for transportation, EnerSys is well positioned to capitalize on the exciting growth opportunities ahead, including a massive global 5G infrastructure build-out, continued growth in broadband, and the design-in wins with aerospace and defense. In addition, we will remain laser-focused on executing our strategic initiatives of driving value for our customers, our partners, and all of the stakeholders in the quarters ahead. With that, I'll now ask Mike to provide further information on our third quarter results and fourth quarter guidance.

Thanks, Dave. For those of you following along on our webcast, I am starting with slide 11. Our third quarter net sales increased 12% over the prior year to $764 million, due to a 20% increase from acquisitions and decreases of 5%, 2%, and 1% from volume, price, and currency, respectively. On a regional basis, our third quarter net sales in the Americas were up 25% to $503 million, while EMEA's net sales were down 7%, at $202 million, and Asia decreased 3% in the third quarter to $58 million. The Americas enjoyed 32% growth from acquisitions less a 4% decrease from volume, a 2% decrease in price, and a 1% decrease in currency. EMEA had a 4% increase from acquisitions but incurred a 9% volume decrease and a 2% negative currency. Asia experienced a 2% price decrease and a 1% currency decline. On a product line basis, net sales for Motive Power were down 10% year-over-year, at $316 million, while reserve power was up 36% to $448 million. Reserve power had 2% volume, 2% price, and 1% currency declines, offset by 41% in acquisitions. Motive Power had a 1% decrease in price and a 1% foreign currency decline, while the volumes were down 8%, due to the fire at our Richmond Kentucky plant and weakness in our EMEA and Asia Motive Power markets. Please now refer to slide 12. On a sequential basis, third quarter net sales were flat compared to the second quarter of fiscal 2020, driven by a 3% volume decline offset by comparable growth from acquisitions. On a geographical basis, the Americas was down 4%, while EMEA was up 11%, and Asia was up 7%. On a product line basis, reserve power was up 5%, while Motive Power was down 6%. Now a few comments about our adjusted consolidated earnings performance. As you know, we utilize certain non-GAAP measures in analyzing our company's operating performance, specifically excluding highlighted items. Accordingly, my following comments concerning operating earnings and my later comments concerning diluted earnings per share exclude all highlighted items. Please refer to our company's Form 8-K, which includes our press release dated February 5, 2020, for details concerning these highlighted items. Please now turn to slide 13. On a year-over-year basis, adjusted consolidated operating earnings in the third quarter decreased $4 million to $64 million with the operating margin down 160 basis points. Lower commodity costs were not enough to offset the volume and price declines, along with the lost revenue incurred in Richmond, Kentucky. On a sequential basis, our third quarter operating earnings declined 150 basis points to 8.3%. Operating expenses, when excluding highlighted items, were at 16.4% of sales for the third quarter, compared to 14.8% in the prior year. Excluded from operating expenses recorded on a GAAP basis in Q3 are pre-tax charges of $21 million, primarily related to $10 million in restructuring and $8 million in Alpha and NorthStar amortization charges. Excluding those charges, our Americas business segment achieved an operating earnings percentage of 9.9%, which was 240 basis points lower than the 12.4% in the third quarter of last year. Lower volume from the Richmond interruptions created the decrease. On a sequential basis, Americas third quarter operating earnings decreased 190 basis points from the 11.8% margin posted in the second quarter, primarily due to the Richmond fire. Americas operating earnings dollars were flat from the prior year but down $12 million from the prior quarter. EMEA's operating earnings percentage of 6.6% was down from last year's 7.9% and down from last quarter's 7.3%. Operating earnings dollars decreased $4 million from the prior year primarily from lower pricing and volume, but were flat from the prior quarter in EMEA. The operating earnings percentage in our Asia business improved 10 basis points in the third quarter of this year to a 1.1% operating income from a 1.0% profit in the third quarter of last year. Please move to Slide 14. As previously reflected on Slide 13, our third quarter adjusted consolidated operating earnings of $64 million was a decrease of 6% in comparison to the prior year. Our adjusted consolidated net earnings of $44.5 million was $6 million lower than the prior year. The decline in adjusted net earnings is primarily the result of the fire at our Richmond, Kentucky facility. Our adjusted effective income tax rate of 16% for the third quarter was comparable to the prior year's rate and lower than the prior quarter's rate of 18%. Discrete tax items caused most of these variations, fiscal 2019's full year rate of 17%, which is at the low end of our 17% to 18% range of expectations for fiscal 2020. EPS decreased 11% to $1.04 on lower net earnings. We expect our fourth fiscal quarter of 2020 to have approximately 42.9 million shares of weighted average shares outstanding, which includes the nearly 1.2 million shares issued in the Alpha transaction net of the 1.0 million shares repurchased in February to August of 2019. As a reminder, we still have nearly $50 million of share buybacks authorized. We have included our year-to-date results on Slides 15 and 16 for your information, but I do not intend to cover these details. Please refer to Appendix 1 at the end of our webcast. Alpha contributed adjusted operating earnings of $12 million or 8.8% on revenues of $135 million. Overall, after considering interests, taxes, and dilution of shares issued to the seller, Alpha was $0.11 accretive after excluding $4 million in after-tax amortization on intangible assets recorded in purchase accounting. NorthStar had an adjusted operating loss of $0.6 million on $28 million in revenue, which resulted in a $0.05 drag on EPS in the quarter after interests and taxes. Excluded from NorthStar's results were $5 million in after-tax amortization and inventory step-up charges. The Alpha transaction continues to progress as planned with synergies realized as expected. The logic of our acquisition remains intact. However, Alpha's revenue remains down year-over-year from the current spend patterns of certain major broadband telecom customers. The NorthStar acquisition remains equally appealing, but it will take another quarter or more to make the needed product changes to create the value we expect. Please now turn back to slide 17. We still have nearly $273 million of cash on-hand, and our credit agreement leverage ratio is 2.5 times. We generated over $175 million cash from operations in the first three quarters of fiscal 2020. Capital expenditures were $61 million. We expect full-year CapEx spending of approximately $90 million to $100 million in fiscal 2020. We utilized nearly $185 million of the cash on-hand to purchase NorthStar on September 30, the first day of our third fiscal quarter. We expect our leverage to remain at or below 2.5 times in the future with the addition of NorthStar. We anticipate our gross profit rate in our fourth fiscal quarter of 2020 to remain near 26%, which is comparable with the first half. The benefits of the Richmond insurance recovery are included in this rate. In regards to the impact from tariffs, our first three quarters have approximately $0.05 per share of costs in each. We currently expect a similar cost pressure in Q4. Tariffs, along with higher freight costs, have impacted our margins by nearly 100 basis points. The NorthStar acquisition will provide relief to freight costs beginning next fiscal year, as transoceanic shipments from European factories to the U.S. will decline dramatically. We expect to generate adjusted diluted net earnings per share of between $1.43 and $1.47 in our fourth fiscal quarter of 2020, which excludes an expected net charge of $0.25 per share, primarily from amortization costs from Alpha and NorthStar and our continuing restructuring programs. The fire at our Richmond, Kentucky facility that occurred late in our second fiscal quarter negatively impacted third quarter revenues by over $30 million. We have included an anticipated recovery of approximately $15 million or $0.30 per share in our fourth quarter guidance to reflect second and third quarter interruption impacts. Our guidance also assumes our two factories in China will reopen in the next two weeks, and our Chinese suppliers are not disrupted to a greater extent than our own facilities.

Thanks, Mike. Sydney, we will now open the line for questions.

And our first question comes from Noah Kaye with Oppenheimer. Please go ahead with your question.

Thanks. Good morning. Dave, you mentioned in your prepared remarks that telecom spend is soft currently, but you seem to point to expectations for meaningful uptick in 5G activity late this calendar year, early next year. And I was wondering if you could just give us some color on the customer dialogue and quoting activity you're seeing. Maybe how have those conversations and that activity changed over the past quarter?

That's a great question, Noah, and good morning. The specifics around the electrical load and mechanical requirements are becoming much clearer and more precise. The enclosure sizes, weight specifications, and electric loads are all getting more defined than before. There continues to be considerable discussion among the various carriers regarding the spectrum they plan to use and the equipment for different metropolitan and rural areas. The clarity on what they are looking for and their deployment vision for small cell sites has improved in the past 90 days. While it may be later than we had hoped, I am confident that with the Alpha acquisition, as mentioned in my prepared remarks, we anticipate an overall increase in energy storage driven by data growth. With Alpha and ICS Purcell, we've positioned ourselves to capture a significantly larger share of these expenditures compared to our historical performance. To summarize, the key is the clarity and detail in the requests for quotes we are receiving.

Okay. That's helpful. Can we turn to another part of the business and explore the EMEA softness? How much of that 9% volume decline was possibly due to diverting some of your product to the Americas compared to general OE order weakness or any potential share loss? Can you break that down for us a bit?

My best insight I can give you, Noah, is that the key issue was the tough comp created by a competitor who was struggling to recover production after they had a serious event. And so historically, that business, similar to the U.S., the market share data we provided in one of the slides has been predictable and stable. I don't think it's a broad difference. I think it would be a similar growth pattern. And so as that competitor has rolled back into the market and started to claw back their share, we're going back to normal levels. So I think that's the key issue that we're seeing the big change there. And what's important – and this kind of goes to the nature of your question, we have constrained our European sales team from pushing NexSys because we've allocated most of the available production capacity to the North American market. And so there's a big push on now that we realize these synergy freight savings that Mike noted with the transoceanic savings, that's going to create available capacity in our TPPL European factories. And the pressure is on Holger and the team to bring back more NexSys and ODYSSEY volume in that region. And that's the way we'll enjoy. Now it takes time to do this, Noah. None of this is going to happen overnight. We have to homologate the products. We have to get all of the approvals, engineers' sign-offs, quality sign-offs as we move products, customer approvals. We need certain certifications. So – we need certain permits for new equipment from states. So there's a lot of things we have to do, and we have to do well. But we are – I think Mike and I both can say with a very high degree of confidence, we know the business is out there. We just need to match our commitments of supply and demand extremely well. We don't want to disappoint anybody by overcommitting and moving too fast. But I think as Mike said, the strategy and the deal logic have held up extremely well. And the other thing I'd like to say about NorthStar, I couldn't be happier with the folks in Springfield that have joined the family, the level of cooperation and communication. A big shout-out to those teams. And the high-speed line installation has gone unbelievably smooth to date, knock on wood. And I'm very impressed too with the groups over there. So things are going on that front exactly according to plan.

And that actually ties into the NorthStar question I was going to ask, which is – I think Michael alluded to this in his comments that there are some permitting and certification steps that need to be taken as you're looking to upgrade those plants to produce TPPL. Can you just give us a little bit more color on your expectations for how that plays out? And obviously you said you think in total there can be a doubling of revenue capacity by the end of – by I guess it's March 2022, calendar 2022 or March calendar 2021, I'm sorry. Maybe you can just kind of help us think through what has to happen from blocking and tackling and how long that's going to take.

Sure. And again I think what's important to me is that we do this in a way that we don't get too far out over our skis with our customers. So I'll just give you an example. So if we make a certain battery type in Warrensburg and we are way slammed on capacity constraints there and we need to get that moved to Springfield, one of the factories it has – it takes literally, probably two months to get that SKU minimum up tooled and running in the new factory, get it signed off too. And two months is extremely aggressive. So it's – and then that frees up additional capacity in Warrensburg, lets them dig out a little bit. And then it's just similar. So it's on a case-by-case basis. We have most of the things tooled. So it's going to be a smooth ramp-up. By the end of the next fiscal year, we should be in a great position because part of the ramp-up, Noah, is as we've noted, the high-speed line is going to eat a lot of plates. I mean, it's going to need a lot of plates. It's going to be hungry, and we're having to increase the plate-making capacity in Springfield to match that. And a lot of that equipment is longer lead time. And so really we just can't snap our fingers. I know some of the mills literally have eight-month lead times. So, it's going to take a while, but we should emerge at the end of calendar year 2021 or fiscal year 2021 with well over $1 billion, I think close to $1.2 billion of capacity in TPPL which is unbelievable. And we're excited about it. And again, so you should see over the coming quarters a smooth ramp as we bring on new customers and we match that with our ability to execute at the factory level.

And Noah, the challenge is not just for the Springfield plants to be able to take product that may have previously been made by other EnerSys TPPL factories, but also for European TPPL factories to take on some of the product that was being made in Springfield, Missouri, in the middle of the United States, and they were shipping that to Europe. So, there's some product qualifications, a little bit of tooling updates they have to go on, on that side of the pond as well.

Correct. Good point, Mike.

All right. Thank you very much for the color.

Thanks.

Thank you. Our next question comes from Brian Drab with William Blair. Please proceed with your question.

Hi. Good morning. Thanks for taking my question. First one, just following on that TPPL capacity line of questioning, when does the first incremental TTPL capacity start to come online? Because my understanding was when you made the NorthStar acquisition that it would be like six months before we start to see that coming online and that would be in kind of the late spring, early summer timeframe. Is that still the case? Or are we talking about a longer term now?

I believe that starting in March is when you'll begin to see it, and it should continue to grow from there. You can expect a steady increase over the next one to five quarters as new equipment, SKUs, and accounts become operational. This is the kind of growth you should anticipate.

Thanks for the update. I unfortunately joined the call about ten minutes late. Did you discuss the savings from transatlantic freight? It seems like it could be a straightforward benefit from the NorthStar synergies. Did we see those savings starting in the December quarter, or will they appear in the March quarter? I remember you mentioned that there are significant potential savings in that area.

Sure. As we mentioned earlier, this relates to some tooling approvals and our ability to adjust processes. You can expect to see the benefits from that within the next two quarters. There's a large car and truck manufacturer we're working with that requires us to complete their approval process, which is similar to an ISO audit at our French factory. This process takes some time. The teams are currently navigating these steps, so I anticipate that within two quarters, you'll begin to notice a more significant impact from these savings.

When I consider the $145 million midpoint of the March quarter guidance, there aren't significant freight savings or NorthStar synergies included at this stage, but we should expect to see those benefits materialize after the March quarter.

In the upcoming fourth quarter, NorthStar is expected to continue being a drag, likely slightly more than what we observed previously. We recorded a $0.05 negative impact in the third quarter related to NorthStar, factoring in the interest expense from the transaction. We anticipate a bit more, possibly up to $0.10 of drag included in our guidance. This quarter is expected to be the last one before we see NorthStar introducing products that were previously produced in our Warrensburg, Missouri facility. We expect the high-speed line to start producing output, which should yield some benefits. We also hope that during this time, some products currently manufactured at NorthStar's Springfield, Missouri facility can be transitioned to our European facilities, and that customer qualifications will be completed. We are optimistic that this will occur sometime in Q1 or Q2 of fiscal 2021.

I want to highlight that the main reason behind the NorthStar transaction was the decision between making or buying, which allowed us to move forward more quickly with reduced risk. The situation is exceeding our expectations. However, we should mention that there has been recent weakness in two areas: the Class 8 over-the-road OEM market and telecom. These have traditionally been key revenue sources for NorthStar, so they are experiencing similar challenges. EnerSys serves a broader range of markets and accounts, which tends to soften the impact. The revenue pressures are more pronounced for NorthStar, but we remain very optimistic about acquiring new customers and deepening our presence in the transportation sector. My main concern, as I discussed with Noah, is ensuring we onboard new clients at a manageable pace since first impressions are crucial.

So, just to wrap up the last question, the NorthStar business was generating around $150 million in revenue and $15 million in EBITDA on an annual basis. Have the pressures you mentioned, Dave, led to them reporting a loss now, or is it mainly due to acquisition-related costs and additional interest expenses?

I think it's both.

Okay. But they were reporting a loss without the incremental interest expense?

I think it's both. I don't have the exact amortization numbers in my head.

I believe you have accurately assessed where we anticipated those numbers to be. They decreased as those markets softened, which we were aware of as we approached the closing of the transaction. However, as Dave mentioned, our intention in acquiring NorthStar was not for their current business portfolio but rather for the capacity they offered us for TPPL, which allows us to enter other markets. While this was unforeseen six months ago, we became increasingly conscious of the softness as we faced the same challenges in our markets. The impact I previously mentioned, estimated at around $0.08 to $0.10 in our fourth fiscal quarter, likely would not have occurred if their markets had remained stable. Additionally, they are burdened with interest expenses, which contributes to the overall impact. This is part of the return they need to achieve to cover their costs.

A significant aspect of the situation involves telecom. The T-Mo-Sprint deal has taken much longer than expected, affecting their typical spending habits. NorthStar has been caught up in this. However, like the broadband situation, it's only a matter of time before they start spending the money. They need to invest, and we believe we are in an excellent position. Our product is well-regarded and aligns nicely with our core business areas with Drew's team. Therefore, we remain very optimistic that the demand for this business is still present.

My last question is do you think that 5G-related spending has a material impact on your fiscal 2021 results or not?

I think that in 2021, I would just say...

I'm looking at your next fiscal year like your next fiscal year starting spring summer. Calendar 2020 fiscal 2021, does 5G have a material impact on your revenue?

Yes, I would say that this year has been a net negative. For the next fiscal year, I haven't seen the final numbers from Drew's team, but I believe the expectation is that things will start to improve, likely in our fourth quarter. Steve, is that consistent?

Yes.

Okay. Okay. So that's probably Q4.

Yes. That's pushed out your expectations significantly. Like you mentioned, last year at this time, the feeling was that it might begin in the spring and summer of 2020.

Right.

So, everything is being pushed out.

Yes, that's the current feeling. We have some trials scheduled for the spring, so it really depends on how those go. There are numerous challenges these teams are facing currently, including frequency spectrum audits, handset problems, and class penetration issues. They have a lot of work ahead of them. However, we are in a strong position and will be ready when they are.

Okay. Thank you.

Thank you. And I'm not showing any further questions at this time. I'll now turn the call back to David Shaffer for any further remarks.

Well thank you, Sydney. And I want to thank everyone for attending the call today. We look forward to providing further updates on our progress on our fourth quarter and the year-end 2020 call in May. Have a good day, everyone.

Ladies and gentlemen, this concludes today's conference. Thank you for participating. You may now disconnect.