Consolidated Results

Consolidated net sales for the second quarter of fiscal 2008 aggregated $862.0 million versus $680.3 million in the prior year’s second quarter. A significantly stronger Euro and stronger Australian and Canadian dollars favorably impacted net sales by $40.4 million. As was the case in the fiscal 2008 first quarter, strong year-over-year unit sales in Transportation Americas and improved pricing in all businesses drove net sales growth.

The Company reported a net loss of $14.8 million or $0.24 per share for the fiscal 2008 period as compared with a net loss of $35.1 million or $1.16 per share in the second quarter of fiscal 2007. Included in the current period’s net loss was a non-cash tax charge of $16.7 million or $0.27 per share resulting from an adjustment to the Company’s net deferred tax asset in Germany to recognize the impact of a lower corporate tax rate. Foreign currency remeasurement gains in the current quarter aggregated $9.6 million compared with a $1.3 million remeasurement loss in the prior year period favorably impacting year-over-year pre-tax results by $10.9 million.

Operationally, gross profit aggregated $130.3 million in the second quarter of fiscal 2008, an increase of $24.9 million over the prior year comparable period. Increased gross profit resulted principally from higher pricing and continued improved manufacturing performance, partially offset by the rapid escalation of lead costs and recognition of an incremental $4.5 million environmental remediation provision. Total selling, general, and administrative expenses for the second quarter of fiscal 2008 amounted to $107.9 million compared with $102.3 million in the fiscal 2007 second quarter. The fiscal 2008 second quarter costs were unfavorably impacted by the weaker U.S. dollar, but were also impacted by targeted incremental marketing spending.

Adjusted EBITDA for the fiscal 2008 second quarter was $50.0 million or 50% higher than the $33.4 million reported in the second quarter of fiscal 2007. Gordon Ulsh, President and CEO stated, “We are extremely pleased with the continued improvement in our results. This is the strongest second quarter since the Company exited Chapter 11 in 2004 and indicates that we continue to address the challenges of record lead prices through improved pricing, manufacturing performance and overall cost control.”

For the six months ended September 30, 2007, net sales were $1.62 billion compared with $1.36 billion in the first six months of fiscal 2007. A weaker dollar against most currencies accounted for approximately $72.0 million of the increase in net sales. The net loss for the first half of fiscal 2008 was $50.5 million or $0.82 per share and compared with a net loss of $73.0 million or $2.60 per share in the comparable prior year period. In addition to the aforementioned tax charge in the second quarter of fiscal 2008, current year six month results were unfavorably impacted by the $21.3 million loss on early debt extinguishment disclosed in the Company’s 10-Q for the first quarter of this fiscal year, associated with our lower cost refinancing effort.

Adjusted EBITDA for the first half of fiscal 2008 was $89.0 million versus $60.6 million for the comparable period of fiscal 2007, a 47% improvement. In addition, the Company had positive EBIT of $15.0 million in the first half of THE fiscal 2008 period, inclusive of the $21.3 million debt extinguishment loss, as compared with negative EBIT of $23.2 million in the fiscal 2007 first half.

Net loss per share for the three and six months ended September 30, 2007 was favorably impacted by higher weighted average shares outstanding as a result of the Company’s previous rights offering that closed in September of 2006.

Transportation Segments

Net sales in the current fiscal year’s second quarter for the Company’s combined Transportation segments increased by $97.0 million ($117.7 million inclusive of favorable foreign exchange) or 23% compared with the fiscal 2007 second quarter. An approximate 6% increase in unit volume in the Americas, and increased pricing in all markets and channels drove this result. For the year to date period, net sales increased by $148.7 million (excluding currency) to $996.1 million over the comparable fiscal 2007 period.

Adjusted EBITDA in the second quarter of fiscal 2008, for the combined Transportation business aggregated $42.2 million as compared with $23.7 million in the comparable fiscal 2007 period. For the six months year-to-date, Adjusted EBITDA was $73.5 million versus $40.2 million in the prior year’s six month period. Pricing reflective of dramatically higher lead costs, operational improvements, and higher unit volumes, principally in the Americas, were the key drivers of this substantial improvement in our results. Mr. Ulsh stated, “We are heartened by the continued efforts of our management teams and our overall employee base in our Global Transportation businesses which have resulted in these improved year-over-year financial results.”

Industrial Energy Segments

For the fiscal 2008 second quarter net sales of our combined Industrial Energy segments aggregated $329.6 million as compared with $266.6 million in the prior year’s second quarter. Excluding $20.0 million of favorable foreign exchange, net sales were driven by somewhat higher volumes in our Europe and ROW segment and pricing in all regions. For the year-to-date fiscal 2008 period, sales in our combined Industrial Energy business increased by $40.1 million (excluding favorable foreign exchange) to $628.3 million over the comparable prior year period, lead related price increases and on slightly lower volumes, principally in Network Power products.

Adjusted EBITDA for the current year’s second fiscal quarter amounted to $16.8 million for our combined Industrial Energy business, slightly favorable to the $16.6 million reported in the prior year comparable period. Favorable plant performance and cost control in all of the businesses were sufficient to compensate for the continued lag in pricing to cover substantially higher lead costs, principally in Europe. On a year-to-date basis, Adjusted EBITDA of $33.7 million is $7.3 million lower than the comparable prior year six-month period driven principally by the higher costs of lead in the period not fully recovered through pricing. Mr. Ulsh indicated, “The historic quarterly lead escalation provisions of many of our contracts resulted in pricing not keeping pace with the rapid increase in this commodity. We are implementing a move to monthly escalators in this segment and should begin to see the positive impact of this change as we move through the third and fourth fiscal quarters.”

The Company, as it has indicated in the past, uses Adjusted EBITDA as a key measure of its operational financial performance. This measure underlies the Company’s operational performance and excludes the nonrecurring impact on the Company’s current restructuring actions. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization and restructuring charges. The Company’s 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, and the loss on early extinguishment of debt. See the reconciliations of net losses to Adjusted EBITDA in the attachments to this release.

Conference Call and Webcast

The Company previously announced that it will hold a conference call to discuss its results on November 9, 2007 at 10:00 a.m. Eastern Time.

• Domestic dial-in: (877) 563-6439
• International dial-in: (706) 758-9457
• Conference ID: 21791553

Presentation materials for the Company’s earnings conference can be accessed on the Company’s website at www.exide.com by clicking on the “Investor Relations” tab and choosing “Presentations & Webcasts” on the right side of the screen.

Individuals unable to participate in the conference call may hear a telephonic replay from 12:00 p.m. EST on November 9, 2007 to 11:59 p.m. EST on November 23, 2007

• Domestic dial-in: (800) 642-1687
• International dial-in: (706) 645-9291
• Passcode: 21791553

Financial tables attached (60KB PDF file)
 

About Exide Technologies

Exide Technologies, with operations in more than 80 countries, is one of the world's largest producers and recyclers of lead-acid batteries. The Company's four global business groups – Transportation Americas, Transportation Europe and Rest of World, Industrial Energy Americas 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. 

The Exide Technologies logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3300