Exide Technologies Reports Fiscal 2013 Second Quarter Results

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| Source: Exide Technologies

MILTON, Ga., Nov. 9, 2012 (GLOBE NEWSWIRE) -- Exide Technologies (Nasdaq:XIDE) (www.exide.com), a global leader in stored electrical energy solutions, announced today its fiscal 2013 second quarter and year to date financial results for the periods ended September 30, 2012.

Consolidated Results

Fiscal 2013 second quarter consolidated net sales were $712 million as compared to net sales of $773 million in the fiscal 2012 second quarter. Net sales in the fiscal 2013 period were negatively impacted by both foreign currency translation ($41.7) million and lead related pricing ($30.5) million. The decrease was partially offset by increased sales in Industrial Energy Americas, higher unit sales in the original equipment ("OE") channel in both Transportation segments, and modest pricing in the Americas' aftermarket channel.

Gross profit for the quarter of $103.7 million, declined by $15 million when compared with the prior year period. A combination of continued high cost of spent batteries in the Americas, coupled with a lower LME price of lead weighed on results. The impact of this combination on the Americas business aggregated $18.6 million when compared to the prior year period; and was only partially offset by favorable pricing of $5.5 million, principally in the transportation aftermarket channel.

Selling and administrative expenses for the fiscal 2013 second quarter were $95.7 million or 13.4% of net sales versus $96.1 million or 12.4% of net sales in the comparable prior year period.

Fiscal 2013 second quarter operating income was $6.8 million compared to $21.2 million in the prior year second quarter. The decrease is primarily the result of higher spent battery input cost coupled with lower LME lead prices, and compressed margins on third party lead sales.

Net loss for the current quarter was $13.9 million or ($0.18) per share compared to the prior year period net loss of $3.6 million or ($0.05) per share.

Fiscal 2013 Six Month Consolidated Results

Net sales for the first half of fiscal 2013 amounted to $1.4 billion as compared with $1.5 billion for the prior fiscal year period. Net sales in the fiscal 2013 period were negatively impacted by lead related price decreases of approximately ($57.3) million. In addition, unfavorable foreign currency translation aggregated approximately ($87.5) million further reducing fiscal 2013 net sales.

Gross profit declined in the fiscal 2013 first half by $37.3 million to $197.9 million. The primary driver of this decrease is a 10% increase in average cost of spent batteries in the Americas coupled with lower LME based escalator pricing. Lead prices were down 21% on average during the 2013 period when compared to the prior year period. These items combined to decrease gross profit by approximately $38 million. The decline in gross profit was partially mitigated by reduced selling and administrative expenses as compensation costs were contained during the first half of fiscal 2013.

The Company reported a net loss for the six months ended September 30, 2012 of $120.4 million or ($1.56) per share as compared to a net loss of $8.8 million or ($0.11) per share in the six months ended September 30, 2011. The fiscal 2013 net loss includes a non-cash deferred tax valuation allowance charge of $86.7 million or ($1.12) per share.

As of September 30, 2012, the Company had cash and cash equivalents of $74.3 million and $134.7 million of availability under its revolving bank credit facility. This compares to cash and cash equivalents of $84.8 million and $141.1 million of availability under its revolving bank credit facility as of September 30, 2011 and cash of $155.4 million and $152.8 million of availability under the revolving bank credit facility at March 31, 2012. The Company reported a use of free cash flow of $99 million for the six months ended September 30, 2012 as compared to a use of $87 million for the comparable prior year period. Jim Bolch, President and Chief Executive Officer stated, "Due to the seasonality of the business and similar to fiscal 2012, we expect third quarter free cash flow to be relatively flat and to generate free cash flow in the fourth quarter sufficient to offset a substantial portion of the year-to-date use."

Segment Information for the Three and Six Months Ended September 30, 2012

Transportation Segments

Net sales of the Company's combined Transportation segments in the fiscal 2013 second quarter was $424.2 million as compared to $471.9 million in the same period of fiscal 2012. Net sales were unfavorably impacted by foreign currency translation in the amount of ($23.3) million. Price decreases resulting from lead escalator agreements negatively impacted total Transportation net sales by approximately ($21.0) million in the fiscal 2013 second quarter. Fiscal 2013 second quarter aftermarket unit volume increased 1% as compared to the prior year second quarter, while units sold to OE customers increased approximately 11% quarter-over-quarter.

For the first half of fiscal 2013, Transportation Americas produced approximately 164 thousand tons of lead in our North American recycling operation, down about 3% from the prior year period. We sold 10% of this to third parties and 12% under tolling arrangements. This compares to 12% and 16% to third parties and under tolling arrangements, respectively, in the prior year comparable period. Profit on third party lead sales was down substantially as a result of the combination of historically high spent battery costs and low relative LME based lead prices. Third party lead sales will be eliminated in the second half of fiscal 2013 as the Frisco, Texas and Reading, Pennsylvania lead production capacity is taken off line.

The fiscal 2013 second quarter operating loss, excluding restructuring and impairment charges, was $0.6 million as compared to operating income of $7.4 million in the prior year second quarter. The decline is primarily the result of higher OE mix, lower fixed cost absorption and higher commodity costs.

Net sales for the first half of fiscal 2013 were $833.4 million as compared to $916.7 million for the same period of fiscal 2012 primarily due to price decreases as a result of lower average lead prices and unfavorable currency translation, partially offset by higher unit volumes to both aftermarket and OE customers. Operating loss, excluding restructuring and impairment charges, was ($6.0) million for the six months ended September 30, 2012 compared to $15.1 million in the same period of the prior year. The decline is the result of higher OE mix, lower fixed cost absorption and higher commodity costs.

Industrial Energy Segments

Fiscal 2013 second quarter total net sales for the Company's combined Industrial Energy segments was $287.5 million as compared to $301.0 million in the comparable fiscal 2012 period. Net sales were unfavorably impacted by foreign currency translation of ($18.5) million. Price decreases resulting from lead escalator agreements negatively impacted net sales by ($9.6) million in the fiscal 2013 second quarter as compared to the net sales reported in the same period of fiscal 2012. Fiscal 2013 second quarter operating income, excluding restructuring and impairment charges, was $15.7 million compared to $21.2 million in the prior year period.

Net sales for the first half of fiscal 2013 were $571.7 million as compared to $601.3 million for the same period of fiscal 2012. The decrease was due to price decreases resulting from lower average lead prices, unfavorable foreign currency translation, partially offset by improved volumes. Operating income, excluding restructuring and impairment charges, was $28.3 million for the six months ended September 30, 2012 compared to $34.6 million in the same period of the prior year. The decrease is primarily due to a higher mix of motive power OE sales in Europe as well as unfavorable lead recovery in the Americas.

Outlook

Bolch said, "We expect the normal seasonal nature of our business will result in higher revenue and substantially improved operating income in the second half of the fiscal year. This should be further supplemented by the combination of transportation aftermarket pricing and a better lead equation, assuming the cost of cores and LME lead pricing remain stable at the improved levels we saw in the month of October."

Non-GAAP Financial Measure

The Company defines Free Cash Flow as cash from operating activities less cash from investing activities, both as measured in accordance with U.S. Generally Accepted Accounting Principles. We believe that Free Cash Flow provides useful information about the cash generated by our core operations after capital expenditures and the sale of non-core assets.

The foregoing non-GAAP financial measure should be used in addition to, but not in isolation or asa substitute for, the analysis provided in the Company's measures of financial performance prepared in conformity with U.S. GAAP. The non-GAAP financial measure should be read only in conjunction with the Company's condensed consolidated financial statements prepared in accordance with GAAP.

Conference Call

The Company previously announced that it will hold a conference call to discuss its results on Monday, November 12, 2012 at 9:00 a.m. Eastern Time.

Conference call details:
Dial-in number for US/Canada: 877-296-1542
Dial-in number for international callers: 706-679-5918
Conference ID: 37834838
 
A telephonic replay of the conference call is available:
Dates: from 12:00 p.m. ET November 12, 2012 to 11:59 p.m. ET November 26, 2012
Domestic dial-in: 855-859-2056
International dial-in: 404-537-3406
Passcode: 3783438

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 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.globenewswire.com/newsroom/prs/?pkgid=3300

Forward-Looking Statements

Except for historical information, this news 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.

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 regarding liquidity and (e) 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.

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 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, (ii) the Company's ability to implement and fund business strategies based on current liquidity, (iii) the Company's ability to realize anticipated efficiencies and avoid additional unanticipated costs related to its restructuring activities, (iv) the cyclical nature of the industries in which the Company operates and the impact of current adverse economic conditions on those industries, (v) unseasonable weather (warm winters and cool summers) which adversely affects demand for automotive and some industrial batteries, (vi) 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, (vii) 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, (viii) the realization of the tax benefits of the Company's net operating loss carry forwards, which is dependent upon future taxable income, (ix) competitiveness of the battery markets in the Americas and Europe, (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 ability to acquire goods and services and/or fulfill later needs at budgeted costs, (xii) general economic conditions, (xiii) the Company's ability to successfully pass along increased material costs to its customers, (xiv) recently adopted U.S. lead emissions standards and the implementation of such standards by applicable states, and (xv) those risk factors described in the Company's fiscal 2012 Form 10-K filed on June 7, 2012.

The Company cautions each reader of this news release to carefully consider those factors set forth above. 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 follow

         
EXIDE TECHNOLOGIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per-share data)
         
  For the Three Months Ended For the Six Months Ended
  September 30, 2012 September 30, 2011 September 30, 2012 September 30, 2011
         
         
Net sales  $ 711,692  $ 772,953  $ 1,405,130  $ 1,518,048
Cost of sales  608,033  654,339  1,207,216  1,282,784
Gross profit  103,659  118,614  197,914  235,264
         
Selling and administrative expenses  95,715  96,140  189,400  198,877
Restructuring and impairments, net  1,108  1,281  624  1,577
Operating income  6,836  21,193  7,890  34,810
         
Other (income) expense, net  (513)  5,751  1,098  5,870
Interest expense, net  17,229  18,074  31,326  35,735
Loss before income taxes  (9,880)  (2,632)  (24,534)  (6,795)
Income tax provision  3,887  995  95,700  2,628
Net loss  (13,767)  (3,627)  (120,234)  (9,423)
Net income (loss) attributable to noncontrolling interests  111  (39)  140  (643)
Net loss attributable to Exide Technologies  $ (13,878)  $ (3,588)  $ (120,374)  $ (8,780)
         
Loss per share        
Basic and diluted  $ (0.18)  $ (0.05)  $ (1.56)  $ (0.11)
         
Weighted average shares        
Basic and diluted  77,210  77,627  77,178  77,573
     
     
EXIDE TECHNOLOGIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except per-share data)
     
  September 30, 2012 March 31, 2012
ASSETS    
Current assets:    
Cash and cash equivalents  $ 74,281  $ 155,368
Accounts receivable, net  542,693  500,375
Inventories  541,315  479,467
Prepaid expenses and other current assets  27,464  21,840
Deferred income taxes  10,500  30,804
Total current assets  1,196,253  1,187,854
Property, plant and equipment, net  626,630  622,975
Other assets:    
Goodwill and intangibles, net  157,645  164,039
Deferred income taxes  91,691  174,601
Other noncurrent assets  45,561  45,517
   294,897  384,157
Total assets  $ 2,117,780  $ 2,194,986
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:    
Short-term borrowings  $ 39,587  $ 20,014
Current maturities of long-term debt  63,489  3,787
Accounts payable  429,882  390,549
Accrued expenses  291,388  276,809
Total current liabilities  824,346  691,159
Long-term debt  690,635  752,930
Noncurrent retirement obligations  221,653  236,312
Deferred income taxes  12,511  17,158
Other noncurrent liabilities  96,075  95,075
Total liabilities  1,845,220  1,792,634
     
STOCKHOLDERS' EQUITY    
Preferred stock, $0.01 par value, 1,000 shares authorized, 0 shares issued and outstanding  --   -- 
Common stock, $0.01 par value, 200,000 shares authorized, 79,290 and 78,351 shares issued and outstanding  793  783
Additional paid-in capital  1,135,785  1,133,417
Accumulated deficit  (836,287)  (715,913)
Accumulated other comprehensive loss  (28,429)  (16,493)
Total stockholders' equity attributable to Exide Technologies  271,862  401,794
Noncontrolling interests  698  558
Total stockholders' equity  272,560  402,352
Total liabilities and stockholders' equity  $ 2,117,780  $ 2,194,986
     
     
EXIDE TECHNOLOGIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
     
  For the Six Months Ended
  September 30, 2012 September 30, 2011
Cash Flows From Operating Activities:    
Net loss  $ (120,234)  $ (9,423)
Adjustments to reconcile net loss to net cash used in operating activities    
Depreciation and amortization  39,442  43,284
Net (gain) loss on asset sales / impairments  (1,081)  423
Deferred income taxes  94,379  (5,631)
Provision for doubtful accounts  570  585
Non-cash stock compensation  2,378  2,585
Amortization of deferred financing costs  2,125  2,143
Currency remeasurement loss  252  9,383
Changes in assets and liabilities    
Receivables  (25,552)  (4,857)
Inventories  (70,615)  (63,121)
Other current assets  (6,404)  (8,315)
Payables  48,439  12,912
Accrued expenses  (3,800)  (13,549)
Other noncurrent liabilities  (8,126)  (6,121)
Other, net  (2,103)  (4,172)
Net cash used in operating activities  (50,330)  (43,874)
     
Cash Flows From Investing Activities:    
Capital expenditures  (49,621)  (43,192)
Proceeds from asset sales  1,084  36
Net cash used in investing activities  (48,537)  (43,156)
     
Cash Flows From Financing Activities:    
Increase in short-term borrowings  20,321  14,035
Decrease in other debt  (1,928)  (1,316)
Acquisition of noncontrolling interests/other  --  340
Net cash provided by financing activities  18,393  13,059
     
Effect of exchange rate changes on cash and cash equivalents  (613)  (2,560)
     
Net decrease in cash and cash equivalents  (81,087)  (76,531)
Cash and cash equivalents, beginning of period  155,368  161,363
Cash and cash equivalents, end of period  $ 74,281  $ 84,832
     
     
Supplemental Disclosures of Cash Flow Information:    
Cash paid during the period    
Interest  $ 32,942  $ 34,357
Income taxes (net of refunds)  $ 3,191  $ 6,118
         
         
EXIDE TECHNOLOGIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED SELECTED SEGMENT FINANCIAL INFORMATION
 
  For the Three Months Ended For the Six Months Ended
  September 30, 2012 September 30, 2011 September 30, 2012 September 30, 2011
  (In thousands)
Net sales        
Transportation Americas  $ 213,038  $ 224,437  $ 428,179  $ 442,034
Transportation Europe & ROW  211,120  247,478  405,263  474,698
Industrial Energy Americas  98,862  90,994  185,550  179,539
Industrial Energy Europe & ROW  188,672  210,044  386,138  421,777
   $ 711,692  $ 772,953  $ 1,405,130  $ 1,518,048
         
Operating income (loss)        
Transportation Americas  $ (5,593)  $ 813  $ (15,011)  $ (3,737)
Transportation Europe & ROW  4,976  6,595  8,998  18,849
Industrial Energy Americas  7,105  11,519  13,517  20,908
Industrial Energy Europe & ROW  8,599  9,730  14,788  13,665
Unallocated corporate expenses  (7,143)  (6,183)  (13,778)  (13,298)
   7,944  22,474  8,514  36,387
Less: restructuring and impairments, net  1,108  1,281  624  1,577
         
Total operating income  $ 6,836  $ 21,193  $ 7,890  $ 34,810
         
Depreciation and Amortization        
Transportation Americas  $ 6,860  $ 6,779  $ 13,923  $ 13,738
Transportation Europe & ROW  4,492  5,032  9,299  10,099
Industrial Energy Americas  2,590  3,049  5,271  6,072
Industrial Energy Europe & ROW  4,329  5,392  8,788  10,727
Unallocated corporate expenses  1,260  1,277  2,161  2,648
   $ 19,531  $ 21,529  $ 39,442  $ 43,284
         
Capital expenditures        
Transportation Americas  $ 11,059  $ 10,319  $ 20,021  $ 18,467
Transportation Europe & ROW  7,869  7,888  15,984  15,058
Industrial Energy Americas  3,014  2,709  5,988  4,109
Industrial Energy Europe & ROW  3,011  3,342  4,640  5,267
Unallocated corporate expenses  582  211  2,988  291
   $ 25,535  $ 24,469  $ 49,621  $ 43,192
     
     
EXIDE TECHNOLOGIES AND SUBSIDIARIES
COMPUTATION OF FREE CASH FLOW
(in millions)
     
  FOR THE SIX MONTHS ENDED
  September 30, 2012 September 30, 2011
     
Net cash used in operating activities  $ (50.3)  $ (43.9)
     
Net cash used in investing activities  (48.5)  (43.2)
     
Free Cash Flow  $ (98.8)  $ (87.1)
     
MEDIA CONTACT:
Susan Jaramillo
Vice President, Corporate Communications
203/699-9133 phone


INVESTOR CONTACT:
Carol Knies
Senior Director, Investor Relations
Exide Technologies
678/566-9316 phone