Consolidated Results

Consolidated net sales for the fiscal 2008 third quarter were $1.04 billion; an increase of $272 million over the comparable prior year period. Excluding the approximate $75 million impact of favorable foreign exchange rates, net sales increased by $197 million. Continued pricing actions were implemented in all business segments to offset lead costs which reached historic highs during the fiscal third quarter. While volume in the aggregate was down slightly, the two Americas’ segments enjoyed strong volume growth.

The Company reported net income for the 2008 quarter of $19.3 million or $0.25 per share as compared with a net loss of $11.2 million or ($0.18) per share in the comparable 2007 quarter. The prior year quarter included an after-tax impairment charge of $9.2 million included in Other income (expense), relating to a former manufacturing facility held for sale.

Gross profit in the fiscal 2008 third quarter amounted to $165.8 million versus $129.7 million in the fiscal 2007 period reflecting higher prices somewhat offset by higher lead costs and the impact of lower volume in our European and ROW segments. Selling, general and administrative costs increased $10.5 million quarter-over-quarter, of which, approximately $8 million results from the strengthening of foreign currencies, principally the Euro, the British Pound and the Canadian and Australian dollars. The Company also continues to increase marketing spending to achieve greater brand recognition for targeted growth.

Adjusted EBITDA for the third quarter of fiscal 2008 aggregated $75 million a 39% increase over the $54.1 million reported for the fiscal 2007 third quarter. Gordon Ulsh, President and CEO stated, “we are proud of this, our seventh consecutive quarter of solid year-over-year earnings growth, which comes in light of continued strong headwinds in the form of record lead costs and escalating costs of other energy related expenses, including fuel, polypropylene and utility costs. Rest assured, the management team and our worldwide employee base will continue to implement further operational improvements as we close out our fiscal 2008.”

For the nine months ended December 31, 2007, net sales were $2.67 billion compared with $2.13 billion in the first nine months of fiscal 2007. A weaker dollar against most foreign currencies accounted for approximately $147 million of the increase. The net loss for the nine month period ended December 31, 2007 was $31.2 million or ($0.47) per share and compared with a net loss of $84.2 million or ($2.15) per share in the comparable prior year period. Included in the current year net loss is a non-cash tax charge of $16.7 million resulting from an adjustment of the Company’s net deferred tax asset in Germany to recognize the impact of lower corporate tax rates and a $21.3 million loss on early extinguishment of debt. Restructuring costs were $6.3 million and $22.2 million for the nine months ended December 31, 2007 and 2006, respectively. The higher restructuring costs in fiscal 2007 were driven by the closure of our Transportation battery plants in Shreveport, LA and Wellington, New Zealand as well as salaried headcount reduction initiatives in Europe. Current year restructuring expenses are the result of continued salaried reduction initiatives, principally in Europe as well as ongoing costs associated with closed facilities. Prior year results were also adversely affected by the loss on sale/impairment of fixed assets in the amount of $16.7 million and included in Other income (expense). This was the result of the above-described plant closures and the fiscal 2007 third quarter impairment charge of $9.2 million.

Adjusted EBITDA for the first nine months of fiscal 2008 amounts to $164.0 million versus $114.7 million in the comparable fiscal 2007 period, a 43% improvement. In addition, the Company had positive EBIT of $64.0 million for the nine months ended December 31, 2007 versus an EBIT loss of $14.6 million in the comparable period of fiscal 2007.

Earnings (loss) per share for the three and nine months ended December 31, 2007 and 2006 were impacted by the higher weighted average shares outstanding as a result of the Company’s two rights offerings in September 2007 and September 2006 and the $50 million private placement in September 2006. These offerings resulted in the issuance of 14 million shares and 35.7 million shares in September 2007 and September 2006, respectively.

Transportation Segments

Net sales in the third quarter of fiscal 2008 for the Company’s combined Transportation segments increased by $138.5 million ($179.3 million inclusive of favorable foreign exchange) or 29% compared with the fiscal 2007 third quarter. Increased pricing in all markets and major channels was the primary driver of increased sales as an approximate 6% increase in unit volume in the Americas offset an approximate 10.5% unit volume decline in Europe and ROW. For the year to date period, net sales increased by $287.2 million (excluding favorable currency) to $1.65 billion.

Adjusted EBITDA in the third quarter of fiscal 2008 for the combined Transportation segments aggregated $52.9 million as compared with $36.9 million in the comparable fiscal 2007 period. For the nine months year-to-date, Adjusted EBITDA was $126.3 million, 64% higher than the $77.1 million reported in the fiscal 2007 nine month period. Mr. Ulsh stated, “we continue to realize pricing in excess of lead and other commodity cost increases, solid plant and distribution performance and contained S,G&A spending relative to sales. We are also pleased with the continued strong unit volume increases in the Americas along with what appears to be an acceleration of quoting activity in the North American aftermarket channels.”

Industrial Energy Segments

For the fiscal 2008 third quarter, net sales of our combined Industrial Energy segments were $391.9 million as compared with $298.8 million in the prior year’s third quarter. Excluding $34.6 million resulting from the effects of favorable foreign exchange, net sales increased by $58.5 million or 20%. Strong volume in our Americas business, principally in network power, and pricing in all markets were the key drivers of this increase. For the year-to-date fiscal 2008 period, net sales for our combined Industrial Energy segments increased by $98.6 (excluding the effects of favorable foreign exchange) to $1.02 billion on lead related price increases partially offset by slightly lower volume.

Adjusted EBITDA for the current year’s third fiscal quarter amounted to $29.7 million for the combined Industrial Energy business; $3.1 million more than the $26.6 million reported for the comparable period of fiscal 2007. On a year-to-date basis, Adjusted EBITDA for the combined segments was $63.4 million, $4.2 million lower than the comparable prior year period. “We continued to work through many of the European historic quarterly escalator provisions during our fiscal third quarter, and although we have made some progress, our pricing initiatives in our European Industrial Energy business are still not fully compensating us for the dramatically higher lead costs. We continue to focus on this issue,” said Mr. Ulsh.

Unallocated Corporate Costs

Unallocated corporate costs included in Adjusted EBITDA aggregated $7.6 million and $25.7 million for the three and nine months ended December 31, 2007, respectively. This compares with $9.4 million and $30.0 million for the comparable periods in fiscal 2007. Reductions in expenses for these periods are principally the result of lower professional fees.

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 income (loss) 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 February 7, 2008 at 10:00 a.m. Eastern Standard Time.

• Domestic dial-in: (877) 563-6439
• International dial-in: (706) 758-9457
• Conference ID: 10271572 

Financial tables attached (47KB 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