ALPHARETTA, Ga., Feb. 7, 2007 (PRIME NEWSWIRE) -- 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
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.
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 follow
EXIDE TECHNOLOGIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND NINE MONTHS ENDED
(In thousands, except per-share data)
For the For the
Three Months Ended Nine Months Ended
----------------------- -----------------------
December 31, December 31,
2006 2005 2006 2005
---------- ---------- ---------- ----------
NET SALES $ 769,743 $ 733,442 $2,133,232 $2,089,259
COST OF SALES 640,038 614,609 1,788,447 1,764,317
---------- ---------- ---------- ----------
Gross profit 129,705 118,833 344,785 324,942
---------- ---------- ---------- ----------
EXPENSES:
Selling, marketing
and advertising 67,336 66,261 201,786 204,948
General and
administrative 42,263 42,471 124,650 129,347
Restructuring 6,299 6,511 22,222 16,051
Other (income)
expense, net 3,737 7,973 6,448 12,781
Interest expense, net 22,814 18,404 67,742 51,163
---------- ---------- ---------- ----------
142,449 141,620 422,848 414,290
---------- ---------- ---------- ----------
Loss before
reorganization items,
income taxes, and
minority interest (12,744) (22,787) (78,063) (89,348)
REORGANIZATION ITEMS,
NET 1,213 1,311 3,784 4,398
INCOME TAX PROVISION
(BENEFIT) (2,947) 3,528 1,924 2,572
MINORITY INTEREST 234 32 478 72
---------- ---------- ---------- ----------
Net loss $ (11,244) $ (27,658) $ (84,249) $ (96,390)
========== ========== ========== ==========
NET LOSS PER SHARE
---------- ---------- ---------- ----------
Basic and Diluted $ (0.18) $ (1.08) $ (2.16) $ (3.77)
========== ========== ========== ==========
WEIGHTED AVERAGE
SHARES ---------- ---------- ---------- ----------
Basic and Diluted 60,829 25,576 38,940 25,576
========== ========== ========== ==========
EXIDE TECHNOLOGIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2006 AND MARCH 31, 2006
(In thousands, except per share data)
December 31, March 31,
2006 2006
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 64,610 $ 32,161
Restricted cash 610 561
Receivables, net of allowance for doubtful
accounts of $28,909 and $21,637 621,810 617,677
Inventories 451,788 414,943
Prepaid expenses and other 42,540 30,243
Deferred financing costs, net 3,326 3,169
Deferred income taxes 15,225 11,066
---------- ----------
Total current assets 1,199,909 1,109,820
---------- ----------
Property, plant and equipment, net 651,320 685,842
---------- ----------
Other assets:
Other intangibles, net 192,114 186,820
Investments in affiliates 5,057 4,783
Deferred financing costs, net 13,441 15,196
Deferred income taxes 59,447 56,358
Other 19,944 24,090
---------- ----------
Total other assets 290,003 287,247
---------- ----------
Total assets $2,141,232 $2,082,909
========== ==========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ 15,892 $ 11,375
Current maturities of long-term debt 3,579 5,643
Accounts payable 358,999 360,538
Accrued expenses 313,094 298,631
Warrants liability 2,648 2,063
---------- ----------
Total current liabilities 694,212 678,250
Long-term debt 665,909 683,986
Noncurrent retirement obligations 320,119 333,248
Deferred income tax liability 36,501 33,590
Other noncurrent liabilities 110,977 116,430
---------- ----------
Total liabilities 1,827,718 1,845,504
---------- ----------
Commitments and contingencies (Note 13) -- --
Minority interest 14,019 12,666
---------- ----------
STOCKHOLDERS' EQUITY
Preferred stock, $0.01 par value,
1,000 shares authorized, 0 shares
issued and outstanding -- --
Common stock, $0.01 par value,
100,000 and 61,500 shares authorized,
60,706 and 24,546 shares issued
and outstanding 607 245
Additional paid-in capital 1,007,970 888,647
Accumulated deficit (723,904) (639,655)
Accumulated other comprehensive
income (loss) 14,822 (24,498)
---------- ----------
Total stockholders' equity 299,495 224,739
---------- ----------
Total liabilities and
stockholders' equity $2,141,232 $2,082,909
========== ==========
EXIDE TECHNOLOGIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 2006 AND 2005
(In thousands) For the
Nine Months Ended
----------------------
December 31,
2006 2005
-------- --------
Cash Flows From Operating Activities:
Net loss $(84,249) $(96,390)
Adjustments to reconcile net loss to net cash
used in operating activities--
Depreciation and amortization 90,152 90,519
Unrealized loss (gain) on warrants 585 (9,500)
Net loss on asset sales / disposals 16,699 12,270
Provision for doubtful accounts 6,749 2,401
Non-cash stock compensation 1,814 333
Reorganization items, net 3,784 4,398
Minority interest 478 72
Amortization of deferred financing costs 2,535 1,347
Changes in assets and liabilities --
Receivables 28,573 10,342
Inventories (12,670) (51,451)
Prepaid expenses and other (8,898) (13,199)
Payables (23,863) 19,007
Accrued expenses 3,143 (16,206)
Noncurrent liabilities (47,679) (7,210)
Other, net (12,205) 8,866
-------- --------
Net cash used in operating activities (35,052) (44,401)
-------- --------
Cash Flows From Investing Activities:
Capital expenditures (28,978) (37,861)
Proceeds from sales of assets, net 3,385 19,657
-------- --------
Net cash used in investing activities (25,593) (18,204)
-------- --------
Cash Flows From Financing Activities:
Increase in short-term borrowings 3,106 13,963
Repayments under Senior Secured
Credit Facility (27,654) (12,804)
Settlement of foreign currency swap -- (12,084)
Increase (decrease) in other debt (2,441) 36,081
Net Proceeds from rights offering
and private equity sale 117,871 --
-------- --------
Net cash provided by financing activities 90,882 25,156
-------- --------
Effect of Exchange Rate Changes on Cash
and Cash Equivalents 2,212 (2,375)
-------- --------
Net Increase (Decrease) In Cash and
Cash Equivalents 32,449 (39,824)
Cash and Cash Equivalents,
Beginning of Period 32,161 76,696
-------- --------
Cash and Cash Equivalents,
End of Period $ 64,610 $ 36,872
======== ========
EXIDE TECHNOLOGIES AND SUBSIDIARIES
ADJUSTED EBITDA RECONCILIATION BY SEGMENT
FOR THE THREE MONTHS ENDED DECEMBER 31, 2006
(in millions)
Industrial
Transportation Energy
--------------- ---------------
Europe Europe
North and North and
America ROW America ROW Other TOTAL
------- ------ ------- ------ ----- -----
Net income (loss) $17.1 ($8.2) $ 5.8 $ 3.7 ($29.6) ($11.2)
Interest expense,
net - - - - 22.8 22.8
Income tax provision
(benefit) - - - - (3.0) (3.0)
------------------------------------------------
EBIT $17.1 ($8.2) $ 5.8 $ 3.7 ($9.8) $ 8.6
Depreciation and
amortization 7.2 8.1 2.3 8.9 3.2 29.7
Take Charge 0.0 0.0 0.0 2.6 0.0 2.6
Reorganization items,
net - - - - 1.2 1.2
Restructuring and
impairment, net 1.3 1.8 0.1 3.2 (0.1) 6.3
Other restructuring
costs included in
cost of sales and
general and
administrative
expenses 0.1 0.0 0.0 0.0 - 0.1
Currency remeasure-
ment loss (gain) 0.4 - (0.3) (0.1) (6.4) (6.4)
Gain on revaluation
of foreign currency
forward contract - - - - - 0.0
Minority interest - - - - 0.3 0.3
Unrealized gain on
revaluation of
warrants - - - - 1.3 1.3
Loss (gain) on sale
of capital assets 0.2 9.2 0.1 0.2 0.1 9.8
Other, principally
non cash stock
compensation
expense (0.2) (0.1) (0.1) 0.2 0.8 0.6
Adjusted EBITDA $26.1 $10.8 $ 7.9 $18.7 ($9.4) $ 54.1
================================================
EXIDE TECHNOLOGIES AND SUBSIDIARIES
ADJUSTED EBITDA RECONCILIATION BY SEGMENT
FOR THE NINE MONTHS ENDED DECEMBER 31, 2006
(in millions)
Industrial
Transportation Energy
--------------- ---------------
Europe Europe
North and North and
America ROW America ROW Other TOTAL
------- ------ ------- ------ ------ -----
Net income (loss) $ 18.1 ($21.5) $18.6 $ 6.2 ($105.6) ($84.2)
Interest expense,
net - - - - 67.7 67.7
Income tax provision
(benefit) - - - - 1.9 1.9
-------------------------------------------------
EBIT $ 18.1 ($21.5) $18.6 $ 6.2 ($36.0) ($14.6)
Depreciation and
amortization 21.4 24.6 7.0 27.0 10.2 90.2
Take Charge 1.0 0.3 0.0 2.6 0.1 4.0
Reorganization
items, net - - - - 3.8 3.8
Restructuring and
impairment, net 8.0 7.9 0.5 5.5 0.3 22.2
Other restructuring
costs included in
cost of sales and
general and
administrative
expenses 0.4 - - - (0.3) 0.1
Currency remeasur-
ement loss (gain) 0.5 - 0.1 (0.1) (11.1) (10.6)
Gain on revaluation
of foreign currency
forward contract - - - - - 0.0
Minority interest - - - - 0.5 0.5
Unrealized gain on
revaluation of
warrants - - - - 0.6 0.6
Loss (gain) on sale
of capital assets 7.1 9.5 - - 0.1 16.7
Other, principally
non cash stock
compensation
expense (0.1) (0.1) - 0.2 1.8 1.8
Adjusted EBITDA $ 56.4 $ 20.7 $26.2 $41.4 ($30.0) $114.7
=================================================
EXIDE TECHNOLOGIES AND SUBSIDIARIES
COMPARATIVE FY07 Q3 NET SALES AND ADJUSTED EBITDA BY SEGMENT
(in millions)
--------------- ---------------
Industrial
Transportation Energy
--------------- ---------------
Europe Europe
North and North and Unallocated
America ROW America ROW Corporate Consolidated
------- ------ ------- ------ ----------- ------------
Q3 FY07
-------
Net sales $234.3 $236.6 $61.7 $237.1 - $769.7
Adjusted
EBITDA $26.1 $10.9 $7.9 $18.7 ($9.5) $54.1
Q3 FY06
-------
Net sales $237.6 $219.7 $67.3 $208.8 - $733.4
Adjusted
EBITDA (1) $8.2 $16.9 $7.1 $18.1 ($9.2) $41.1
(1) Includes pro forma effect of the allocation of certain
Corporate costs.
EXIDE TECHNOLOGIES AND SUBSIDIARIES
COMPARATIVE FY07 Q3 YTD NET SALES AND ADJUSTED EBITDA BY SEGMENT
(in millions)
--------------- ---------------
Industrial
Transportation Energy
--------------- ---------------
Europe Europe
North and North and Unallocated
America ROW America ROW Corporate Consolidated
------- ------ ------- ------ ----------- ------------
Q3 YTD FY07
-----------
Net sales $676.5 $606.3 $199.7 $650.7 - $2,133.2
Adjusted
EBITDA $56.4 $20.7 $26.2 $41.4 ($30.0) $114.7
Q3 YTD FY06
-----------
Net sales $681.8 $587.1 $207.8 $612.6 - $2,089.3
Adjusted
EBITDA (1) $24.7 $25.6 $20.1 $44.2 ($29.5) $85.1
(1) Includes pro forma effect of the allocation of certain
Corporate costs.
The EXIDE Technologies Adjusted EBITDA Variances graphs are available at http://media.primezone.com/cache/8076/file/3706.html
