ALPHARETTA, Ga., Aug. 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 2008 first quarter, which ended June 30, 2007.
Consolidated Results
Consolidated net sales for the fiscal 2008 first quarter aggregated $762.4 million, an increase of $79.2 million or 11.6% over the comparable prior year period. A weaker dollar against the Euro, Pound Sterling and the Australian Dollar favorably impacted net sales by approximately $31.7 million. Excluding the impact of exchange rates, strengthening unit volume in Transportation Americas and favorable year-over-year pricing in all businesses were the drivers of net sales growth.
The Company had a net loss of $35.7 million or ($0.59) per share for the fiscal 2008 period as compared with a net loss of $37.9 million or ($1.48) per share for the 2007 first quarter. Significantly, included in the current year's result is a non-recurring after tax loss on early extinguishment of debt of $21.3 million or ($0.35) per share relating to the Company's May 2007 refinancing of its Senior Secured Bank Credit Facility. This charge was more than offset by higher gross profit, continued reductions in selling, general and administrative expenses, a lower tax provision, reduced interest expense and a $6.8 million reduction in restructuring expenses, which were significantly higher in the prior year due to the shutdown of the Shreveport, Louisiana transportation battery plant.
Consolidated Adjusted EBITDA improved by approximately 43% to $39.0 million in fiscal 2008 as compared with $27.2 million in fiscal 2007. Exide's President and Chief Executive Officer, Gordon A. Ulsh, stated, "We are clearly pleased with this, our fifth consecutive quarter of strong year-over-year earnings improvement as measured by Adjusted EBITDA. However, we are also very cognizant of the continuing challenges posed by the unprecedented rise in lead costs, which have increased by 75% since the end of March 2007, based on the LME price of $3,389 per metric ton on August 3, 2007."
Transportation Segments
Net sales of the Company's combined Transportation segments grew by 17% (13% excluding the impact of favorable foreign exchange) in the current year first quarter to $463.7 million from $397.3 million in the fiscal 2007 period. While the increase is essentially price driven, the Transportation Americas business also enjoyed an approximate 5% increase in unit sales, which offset more modest unit sales reductions in Europe and Rest of World.
Adjusted EBITDA for the combined Transportation businesses aggregated $31.3 million in the current year period versus $16.5 million in fiscal 2007. The Americas business accounted for $13.2 million of the year-over-year increase. Mr. Ulsh commented, "E.J. O'Leary and his team continue to drive performance in all areas of their business from pricing actions to plant productivity to greater customer satisfaction. These results are now being further rewarded with increased unit volume from our largest aftermarket accounts and through our branch network."
Industrial Energy Segments
Combined net sales in the Company's Industrial Energy segments were $298.7 million as compared with $285.9 million in the fiscal 2007 period. Excluding the favorable impact of favorable foreign exchange, net sales declined in these segments by approximately $3.8 million in the aggregate. In both Industrial Energy segments the Company continues to see soft network power demand and more recently a pull back in motive power demand. However, the Company has continued to respond with global pricing initiatives which have served to offset most volume declines.
From an Adjusted EBITDA perspective, the combined Industrial Energy businesses experienced a reduction from $24.4 million in the fiscal 2007 period to $16.9 million in the current year period. Most of the reduction was experienced in the European and Rest of World segment. In addition to the volume reduction, this business continued to face headwinds in the first quarter in its attempt to obtain sufficient pricing to cover increased lead costs.
Unallocated Corporate Costs
Unallocated corporate expenses included in Adjusted EBITDA amounted to $9.2 million in the fiscal 2008 period, a reduction of $4.5 million from $13.7 million in the first quarter of fiscal 2007. The prior year's costs included approximately $3.5 million associated with the subsequently withdrawn potential sale of the Industrial Energy Europe business.
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
The Company previously announced that it will hold a conference call to discuss its results on August 8, 2007 at 2:00 p.m. Eastern Time.
Dial-in number for U.S./Canada: (877) 563-6439 Dial-In number for international callers: (706) 758-9457 Conference ID: 10271572
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
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 and (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.
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 litigation proceedings to which the Company is subject, the results of which could have a material adverse effect on the Company and its business, (v) the realization of the tax benefits of the Company's net operating loss carry forwards, which is dependent upon future taxable income, (vi) 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, (vii) competitiveness of the battery markets in North America and Europe, (viii) the substantial management time and financial and other resources needed for the Company's consolidation and rationalization of acquired entities, (ix) 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, (x) the Company's exposure to fluctuations in interest rates on its variable debt, (xi) the Company's ability to maintain and generate liquidity to meet its operating needs, (xii) general economic conditions, (xiii) the ability to acquire goods and services and/or fulfill labor needs at budgeted costs, (xiv) the Company's reliance on a single supplier for its polyethylene battery separators, (xv) the Company's ability to successfully pass along increased material costs to its customers, (xvi) 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-K filed on June 11, 2007 and its Form 10-Q filed on August 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.
EXIDE TECHNOLOGIES AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per-share data) For the Three Months Ended -------------------------- June 30, 2007 June 30, 2006 -------------------------- NET SALES $ 762,387 $ 683,190 COST OF SALES 643,718 573,511 ----------- ----------- Gross profit 118,669 109,679 ----------- ----------- EXPENSES: Selling, marketing and advertising 68,335 68,506 General and administrative 43,649 45,994 Restructuring 2,132 8,884 Other (income) expense, net (3,541) (3,492) Interest expense, net 21,352 22,287 Loss on early extinguishment of debt 21,342 -- ----------- ----------- 153,269 142,179 ----------- ----------- Loss before reorganization items, income taxes, and minority interest (34,600) (32,500) REORGANIZATION ITEMS, NET 442 1,607 INCOME TAX PROVISION 217 3,578 MINORITY INTEREST 423 211 ----------- ----------- Net loss $ (35,682) $ (37,896) =========== =========== NET LOSS PER SHARE ----------- ----------- Basic and Diluted $ (0.59) $ (1.48) =========== =========== WEIGHTED AVERAGE SHARES ----------- ----------- Basic and Diluted 60,926 25,635 =========== =========== EXIDE TECHNOLOGIES AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except per share data) June 30, March 31, 2007 2007 ----------- ----------- ASSETS Current assets: Cash and cash equivalents $ 49,340 $ 76,211 Receivables, net of allowance for doubtful accounts of $29,161 and $28,624 629,967 639,115 Inventories 487,660 411,554 Prepaid expenses and other 22,624 20,224 Deferred financing costs, net 4,612 3,411 Deferred income taxes 26,413 19,030 ----------- ----------- Total current assets 1,220,616 1,169,545 ----------- ----------- Property, plant and equipment, net 639,341 649,015 ----------- ----------- Other assets: Other intangibles, net 193,223 191,762 Investments in affiliates 6,040 5,282 Deferred financing costs, net 19,724 12,908 Deferred income taxes 66,518 67,006 Other 20,042 24,706 ----------- ----------- 305,547 301,664 ----------- ----------- Total assets $ 2,165,504 $ 2,120,224 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term borrowings $ 14,946 $ 13,951 Current maturities of long-term debt 3,973 3,996 Accounts payable 358,684 360,278 Accrued expenses 297,550 299,157 Warrants liability 5,562 5,297 ----------- ----------- Total current liabilities 680,715 682,679 Long-term debt 736,858 666,507 Noncurrent retirement obligations 255,274 263,290 Deferred income tax liability 43,775 41,232 Other noncurrent liabilities 131,832 121,433 ----------- ----------- Total liabilities 1,848,454 1,775,141 ----------- ----------- Commitments and contingencies -- -- Minority interest 15,137 14,560 ----------- ----------- 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 shares authorized, 61,210 and 60,676 shares issued and outstanding 612 607 Additional paid-in capital 1,009,802 1,008,481 Accumulated deficit (785,403) (745,534) Accumulated other comprehensive income 76,902 66,969 ----------- ----------- Total stockholders' equity 301,913 330,523 ----------- ----------- Total liabilities and stockholders' equity $ 2,165,504 $ 2,120,224 =========== =========== EXIDE TECHNOLOGIES AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) For the Three Months Ended -------------------------- June 30, June 30, 2007 2006 ----------- ----------- Cash Flows From Operating Activities: Net loss $ (35,682) $ (37,896) Adjustments to reconcile net loss to net cash (used in) provided by operating activities -- Depreciation and amortization 26,393 30,464 Unrealized loss (gain) on warrants 265 (813) Net (gain) loss on asset sales / impairments (599) 2,804 Provision for doubtful accounts 1,175 1,956 Non-cash stock compensation 1,356 400 Reorganization items, net 442 1,607 Minority interest 423 211 Amortization of deferred financing costs 999 814 Loss on early extinguishment of debt 21,342 -- Changes in assets and liabilities -- Receivables 17,719 47,526 Inventories (70,054) (9,388) Prepaid expenses and other (2,132) 4,643 Payables (5,980) (19,520) Accrued expenses 9,175 (15,245) Noncurrent liabilities (19,376) (3,318) Other, net (4,876) (3,611) ----------- ----------- Net cash (used in) provided by operating activities (59,410) 634 ----------- ----------- Cash Flows From Investing Activities: Capital expenditures (10,833) (7,967) Proceeds from sales of assets 3,427 97 ----------- ----------- Net cash used in investing activities (7,406) (7,870) ----------- ----------- Cash Flows From Financing Activities: Increase in short-term borrowings 548 9 Borrowings under Senior Secured Credit Facility 66,695 13,125 Increase (decrease) in other debt 1,956 (1,968) Financing costs and other (30,306) 4 ----------- ----------- Net cash provided by financing activities 38,893 11,170 ----------- ----------- Effect of Exchange Rate Changes on Cash and Cash Equivalents 1,052 934 ----------- ----------- Net (Decrease) Increase In Cash and Cash Equivalents (26,871) 4,868 Cash and Cash Equivalents, Beginning of Period 76,211 32,161 ----------- ----------- Cash and Cash Equivalents, End of Period $ 49,340 $ 37,029 =========== =========== Supplemental Disclosures of Cash Flow Information: Cash paid during the period -- Interest $ 10,311 $ 10,209 Income taxes (net of refunds) 971 1,840 EXIDE TECHNOLOGIES AND SUBSIDIARIES ADJUSTED EBITDA RECONCILIATION BY SEGMENT FOR THE THREE MONTHS ENDED JUNE 30, 2007 (in millions) Transportation Industrial Energy ---------------- ----------------- Europe Europe Americas and ROW Americas and ROW Other TOTAL -------- ------- -------- ------- ----- ----- Net income (loss) $16.7 ($3.7) $ 6.0 ($1.4) ($53.3) ($35.7) Interest expense, net -- -- -- -- 21.4 21.4 Income tax provision -- -- -- -- 0.2 0.2 --------------------------------------------- EBIT 16.7 (3.7) 6.0 (1.4) (31.7) (14.1) Depreciation and amortization 7.6 7.2 2.3 7.6 1.7 26.4 Loss on early extinguishment of debt -- -- -- -- 21.3 21.3 Take Charge 1.4 0.9 -- 1.5 0.1 3.9 Reorganization items, net -- -- -- -- 0.4 0.4 Restructuring 0.5 0.7 (0.1) 1.0 -- 2.1 Other restructuring costs included in cost of sales and general and administrative expenses 0.1 -- -- -- -- 0.1 Currency remeasurement loss (gain) (0.3) 0.1 0.6 (0.1) (2.8) (2.5) Minority interest -- -- -- -- 0.4 0.4 Unrealized loss on revaluation of warrants -- -- -- -- 0.3 0.3 Loss (gain) on sale/impairment of assets -- (0.1) 1.1 (1.6) -- (0.6) Other, principally non cash stock compensation expense 0.2 -- -- -- 1.1 1.3 --------------------------------------------- Adjusted EBITDA $26.2 $ 5.1 $ 9.9 $ 7.0 $(9.2) $39.0 ============================================= EXIDE TECHNOLOGIES AND SUBSIDIARIES ADJUSTED EBITDA RECONCILIATION BY SEGMENT FOR THE THREE MONTHS ENDED JUNE 30, 2006 (in millions) Transportation Industrial Energy ---------------- ----------------- Europe Europe Americas and ROW Americas and ROW Other TOTAL -------- ------- -------- ------- ----- ----- Net income (loss) ($4.8) ($6.1) $ 7.5 $ 3.6 ($38.1) ($37.9) Interest expense, net -- -- -- -- 22.3 22.3 Income tax provision -- -- -- -- 3.6 3.6 --------------------------------------------- EBIT ($4.8) ($6.1) $ 7.5 $ 3.6 ($12.2) ($12.0) Depreciation and amortization 7.4 8.2 2.5 8.9 3.5 30.5 Take Charge 0.6 0.3 -- -- -- 0.9 Reorganization items, net -- -- -- -- 1.6 1.6 Restructuring 6.0 1.3 0.7 0.8 0.1 8.9 Other restructuring costs included in cost of sales and general and administrative expenses 0.2 -- -- -- 0.1 0.3 Currency remeasurement loss (gain) 0.8 (0.3) 0.3 0.1 (6.5) (5.6) Minority interest -- -- -- -- 0.2 0.2 Unrealized gain on revaluation of warrants -- -- -- -- (0.8) (0.8) Loss (gain) on sale of capital assets 2.9 -- -- 0.1 (0.2) 2.8 Other, principally non-cash stock compensation expense (0.1) 0.1 0.1 (0.2) 0.5 0.4 --------------------------------------------- Adjusted EBITDA $13.0 $ 3.5 $11.1 $13.3 ($13.7) $27.2 ============================================= EXIDE TECHNOLOGIES AND SUBSIDIARIES COMPARATIVE FY08 Q1 NET SALES AND ADJUSTED EBITDA BY SEGMENT (In millions) ---------------- ------------------ Transportation Industrial Energy ---------------- ------------------ Europe Europe and and Unallocated Consol- Q1 FY08 Americas ROW Americas ROW Corporate idated ------- ------ ------ ------ ------ ------ ------ Net sales $251.0 $212.7 $ 65.3 $233.4 $ -- $762.4 Adjusted EBITDA $ 26.2 $ 5.1 $ 9.9 $ 7.0 $ (9.2) $ 39.0 Q1 FY07 ------- Net sales $214.5 $182.8 $ 72.9 $213.0 $ -- $683.2 Adjusted EBITDA $ 13.0 $ 3.5 $ 11.1 $ 13.3 $(13.7) $ 27.2
The Exide Technologies Adjusted EBITDA Variances graphs are available at http://media.primezone.com/cache/8076/file/4543.html