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Exide Technologies Reports Second Quarter
2007 Results
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Alpharetta, Ga. – (November 9, 2006) –
Exide Technologies
(NASDAQ: XIDE)(www.exide.com), a global leader in stored
electrical-energy solutions, today reported its financial
results for
its fiscal 2007 second quarter, which ended September 30, 2006.
Quarter
Consolidated net sales for the fiscal 2007 second quarter
were
$680.3 million versus $686.5 million for fiscal 2006 second
quarter.
Many of our markets experienced drops in unit volume, which were
partially offset by the favorable impact of recent pricing
actions in
both Transportation and Industrial Energy. Much of the lower
unit
volumes in both of our Transportation segments can be directly
attributed to our pricing strategy to drive customer
profitability to
more appropriate levels or sever relationships where reasonable
profitability could not be achieved. In our Industrial Energy
North
America business, we continue to enjoy strong growth in our
motive
power product lines. These increases have been more than offset
by a
soft network power market, including lower sales to the U.S.
Navy as
they transition to our Valve Regulated Lead Acid (VRLA)
technology.
The Company had a net loss of $35.1 million or ($1.16) per share
for the second quarter of 2007, compared with a net loss of
$33.0
million or ($1.29) per share for the 2006 second quarter. The
slight
increase in net loss is primarily attributable to increased
interest
expense as a result of higher debt levels and higher interest
rates
related to amendments to our credit agreement made in the fourth
quarter of fiscal 2006. Net loss per share for the second
quarter of
fiscal 2007 was impacted by higher weighted average shares
outstanding
as a result of the Company's $75 million rights offering and $50
million private sale of common stock.
Adjusted EBITDA in the second quarter of fiscal 2007 was $33.4
million, a 34% increase over fiscal 2006 Adjusted EBITDA of
$24.9
million. The increase in Adjusted EBITDA is attributable to
improved
margins as a result of pricing actions, and a decrease in
general and
administrative expenses of approximately $6.7 million related to
headcount reductions and other organizational and operational
streamlining initiatives. These factors were partially offset,
however, by higher lead costs.
The Company uses Adjusted EBITDA as a key measure of its
operational financial performance, as it is an important element
of
its bank agreement covenants. This measure underlies the
Company's
operational performance and excludes the nonrecurring impact of
the
Company's current restructuring actions. Adjusted EBITDA is
defined as
earnings before interest, taxes, depreciation, amortization and
restructuring charges. Our Adjusted EBITDA definition also
adjusts
reported earnings for the effect of non-cash currency
remeasurement
gains or losses, the non-cash gain or loss from revaluation of
the
Company's warrants liability, impairment charges and non-cash
gains or
losses on asset sales. See the reconciliations of net losses to
Adjusted EBITDA in the attachments to this release.
Fiscal Year-To-Date
Consolidated net sales for the first six months of fiscal
2007
were $1,363.5 million versus $1,355.8 million for the first six
months
of fiscal 2006. Excluding the favorable impact of exchange
rates,
sales were slighty down year-over-year principally due to lower
unit
volume in our Transportation North America business driven by
our
pricing actions and soft network power demand in North America.
The Company had a net loss of $73.0 million or ($2.61) per share
for the first six months of 2007, compared with a net loss of
$68.7
million or ($2.69) per share for the first six months of 2006.
The
increase in net loss is primarily attributable to an increase in
restructuring charges of approximately $6.4 million driven
principally
by the April 2006 closing of the Company's automotive battery
plant in
Shreveport, Louisiana, and to a $12.2 million increase in
interest
expense due to higher debt and higher rates resulting from the
recent
amendments to our credit agreement. These were offset, to a
degree, by
improved operating results as more fully described below in our
discussion of Adjusted EBITDA. Net loss per share was also
impacted by
an increase in weighted average shares outstanding as a result
of the
rights offering and private sale of common stock, as discussed
above.
Combined Adjusted EBITDA for the first six months of fiscal 2007
was $60.6 million, an increase of 38% over fiscal 2006 Adjusted
EBITDA
of $44.0 million.. The increase in Adjusted EBITDA is
attributable to
improved margins as a result of pricing actions, slight
reductions in
selling, marketing, and advertising costs, and savings of
approximately $4.5 million in general and administrative
expenses as a
result of ongoing initiatives to streamline the organization.
These
savings were partially offset, however, by higher lead and fuel
costs.
Conference Call
The Company previously announced that it will hold a conference
call to discuss its results on Friday, November 10, 2006 at
10:00 a.m.
(EDT).
- Dial-in number for US/Canada: (877) 563-6439
- Dial-in number for international callers: (706) 758-9457
- Conference ID: 9682120
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[Note: All tables and charts are in Adobe Acrobat
- PDF - format and will open in a new window].
Tables
Consolidated Statement of Operations
Consolidated Balance Sheets
Consolidated Cash Flow
Adjusted EBITDA Reconciliation by Segment for the Three Months ended
September 30, 2006
Adjusted EBITDA Reconciliation by Segment for
FY07 Year to Date
Comparative
2Q Net Sales and EBITDA by Segment
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About Exide Technologies:
Exide Technologies, with operations in 89
countries, is one of the
world's largest producers and recyclers of lead-acid batteries.
The
Company's four global business groups - Transportation North
America,
Transportation Europe and Rest of World, Industrial Energy North
America and Industrial Energy Europe and Rest of World - provide
a
comprehensive range of stored electrical energy products and
services
for industrial and transportation applications.
Transportation markets include original-equipment and
aftermarket
automotive, heavy-duty truck, agricultural and marine
applications,
and new technologies for hybrid vehicles and 42-volt automotive
applications. Industrial markets include network power
applications
such as telecommunications systems, electric utilities,
railroads,
photovoltaic (solar-power related) and uninterruptible power
supply
(UPS), and motive-power applications including lift trucks,
mining and
other commercial vehicles.
Further information about Exide, including its financial
results,
are available at www.exide.com.
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Investor Contact |
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Forward-Looking Statements
Except for historical information, this press release may
be
deemed to contain "forward-looking" statements. The Company
desires to
avail itself of the safe harbor provisions of the Private
Securities
Litigation Reform Act of 1995 (the "Act") and is including this
cautionary statement for the express purpose of availing itself
of the
protection afforded by the Act. The Company undertakes no
obligation
to publicly update or revise any forward-looking statement in
this or
any prior forward-looking statements whether as a result of new
information, future developments or otherwise.
Examples of forward-looking statements include, but are not
limited to (a) projections of revenues, cost of raw materials,
income
or loss, earnings or loss per share, capital expenditures,
growth
prospects, dividends, the effect of currency translations,
capital
structure and other financial items, (b) statements of plans and
objectives of the Company or its management or Board of
Directors,
including the introduction of new products, or estimates or
predictions of actions by customers, suppliers, competitors or
regulating authorities, (c) statements of future economic
performance,
(d) statements of assumptions, such as the prevailing weather
conditions in the Company's market areas, underlying other
statements
and statements about the Company or its business and (e)
statements
regarding the ability to comply with or alternatively obtain
amendments under the Company's debt agreements.
Factors that could cause actual results to differ materially
from
these forward looking statements include, but are not limited
to, the
following general factors such as: (i) the Company's ability to
implement and fund based on current liquidity business
strategies and
restructuring plans, (ii) unseasonable weather (warm winters and
cool
summers) which adversely affects demand for automotive and some
industrial batteries, (iii) the Company's substantial debt and
debt
service requirements which may restrict the Company's
operational and
financial flexibility, as well as imposing significant interest
and
financing costs, (iv) the Company's ability to comply with the
covenants in its debt agreements or obtain waivers of
noncompliance,
(v) the litigation proceedings to which the Company is subject,
the
results of which could have a material adverse effect on the
Company
and its business, (vi) the realization of the tax benefits of
the
Company's net operating loss carry forwards, which is dependent
upon
future taxable income, (vii) the fact that lead, a major
constituent
in most of the Company's products, experiences significant
fluctuations in market price and is a hazardous material that
may give
rise to costly environmental and safety claims, (viii)
competitiveness
of the battery markets in North America and Europe, (ix) the
substantial management time and financial and other resources
needed
for the Company's consolidation and rationalization of acquired
entities, (x) risks involved in foreign operations such as
disruption
of markets, changes in import and export laws, currency
restrictions,
currency exchange rate fluctuations and possible terrorist
attacks
against U.S. interests, (xi) the Company's exposure to
fluctuations in
interest rates on its variable debt, (xii) the Company's ability
to
maintain and generate liquidity to meet its operating needs,
(xiii)
general economic conditions, (xiv) the ability to acquire goods
and
services and/or fulfill labor needs at budgeted costs, (xv) the
Company's reliance on a single supplier for its polyethylene
battery
separators, (xvi) the Company's ability to successfully pass
along
increased material costs to its customers, (xvii) the Company's
ability to comply with the provisions of Section 404 of the
Sarbanes-Oxley Act of 2002, (xviii) adverse reactions by
creditors,
vendors, customers, and others to the going-concern modification
to
the Company's Consolidated Financial Statements included in the
Report
of Independent Registered Public Accounting Firm in the
Company's most
recent Report on Form 10-K for the period ended March 31, 2006,
and
(xx) the Company's significant pension obligations over the next
several years.
Therefore, the Company cautions each reader of this press
release
carefully to consider those factors set forth above and those
factors
described in the Company's Form 10-Q filed on November 9, 2006
because
such factors have, in some instances, affected and in the future
could
affect, the ability of the Company to achieve its projected
results
and may cause actual results to differ materially from those
expressed
herein. |
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