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Alpharetta, Georgia - (February 7, 2007)
- Exide Technologies (Nasdaq:XIDE) (www.exide.com),
a global leader in stored electrical-energy solutions, today reported
its financial results for its fiscal 2007 third quarter and year-to-date,
which ended December 31, 2006. Manufacturing cost reductions and
lower SG&A expenses, which totaled approximately $34 million over
the first nine months coupled with selected price increases, offset
somewhat lower volume and drove quarter and nine-month Adjusted
EBITDA improvement.
Quarter
Consolidated net sales for the fiscal 2007 third quarter were
$769.7 million versus $733.4 million for the fiscal 2006 third quarter.
Excluding the favorable impact of currency, sales were essentially
flat year-over-year. All of our Divisions continue to benefit from
higher pricing, which has offset the impact of lower unit volumes
in our transportation businesses and weak network power demand in
our Industrial Energy North America business. "The somewhat lower
unit volumes in both our Transportation North America and Transportation
Europe and Rest of World businesses continue to be the result of
our intended program to increase profitability," said Gordon Ulsh,
President and CEO. "An unseasonably warm December on both continents
put further downward pressure on volume."
The Company had a net loss of $11.2 million or ($0.18) per share
for the third quarter of fiscal 2007, inclusive of an approximate
$9.2 million after-tax impairment charge relating to a former manufacturing
facility held for sale. This compared with a net loss of $27.7 million
or ($1.08) per share for the fiscal 2006 third quarter. The decreased
net loss is partially the result of improved gross margins driven
by higher pricing and continued productivity gains, which more than
offset the impact of lower volumes. Our results for the current
quarter included a tax benefit of $2.9 million versus a tax provision
in the prior year period of $3.5 million. Interest expense, net
was $4.4 million higher in the current quarter due to higher average
debt levels and higher interest rates. Net loss per share was also
impacted by an increase in weighted average shares outstanding as
a result of the September 2006 rights offering and private sale
of common stock.
The Company also reported positive earnings before interest and
taxes ("EBIT") in the quarter of $8.6 million which was net of the
above mentioned $9.2 million impairment charge. In the third quarter
of 2006 the company reported negative EBIT of $5.7 million, which
also included an after-tax asset impairment charge of $8.5 million
relating to the closure of our Kankakee, IL facility in November,
2005.
Adjusted EBITDA in the third quarter of fiscal 2007 was $54.1
million, a 32% increase over third quarter fiscal 2006 Adjusted
EBITDA of $41.1 million. The increase in Adjusted EBITDA is attributable
to improved margins as a result of pricing actions and productivity
improvements, partially offset 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 EBIT and Adjusted
EBITDA in the attachments to this release.
Fiscal Year-To-Date
Consolidated net sales for the first nine months of fiscal 2007
were $2.13 billion versus $2.09 billion for the first nine months
of fiscal 2006. Excluding the favorable impact of exchange rates,
sales were flat. Mr. Ulsh stated, "Sales for the comparable year-to-date
period mirrored those of the third quarter with pricing essentially
offsetting the impact of lower volumes."
The Company had a net loss of $84.2 million or ($2.16) per share
for the first nine months of fiscal 2007, compared with a net loss
of $96.4 million or ($3.77) per share for the first nine months
of fiscal 2006. The decrease in net loss is primarily attributable
to improved gross margins and decreases in selling, marketing, and
advertising expense and general and administrative expense of $3.2
million and $4.7 million, respectively These results were partially
offset however, by an increase in restructuring charges of approximately
$6.2 million driven principally by the April 2006 closing of the
Company's automotive battery plant in Shreveport, Louisiana, and
to a $16.6 million increase in interest expense due to higher debt
and higher rates resulting from the fourth quarter fiscal 2006 amendments
to our credit agreement. Net loss per share was also impacted by
an increase in weighted average shares outstanding as a result of
the September 2006 rights offering and private sale of common stock.
For the first nine months of 2007, the Company reported a $14.6
million EBIT loss compared to a $42.7 million EBIT loss in the year
ago period.
Adjusted EBITDA for the first nine months of fiscal 2007 was
$114.7 million, an increase of 35% over fiscal 2006 Adjusted EBITDA
of $85.1 million. The increase in Adjusted EBITDA is attributable
to improved margins as a result of pricing actions, reductions in
selling, marketing, and advertising costs, and savings of approximately
$4.7 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 Thursday, February 8, 2007 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: 6641259
Further information about Exide, including its financial results,
are available at
www.exide.com.
The Exide Technologies logo is available at
http://www.primenewswire.com/newsroom/prs/?pkgid=3300
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, and (xviii) 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 February 7, 2007 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.
Financial tables (PDF reader required)
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