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Alpharetta, Georgia - (November 6, 2008) - Exide Technologies
(NASDAQ: XIDE, www.exide.com), a global leader in stored electrical
energy solutions, announced today its financial results for its
fiscal 2009 second quarter, which ended September 30, 2008.
Highlights of Fiscal 2009 Second Quarter and
Year-to-Date Results:
- Second quarter Adjusted EBITDA improved 36% to $68.2 million;
resulting in Adjusted EBITDA of $139.3 million year-to-date,
a 57% improvement;
- Generated free cash flow of $45.9 million and $90.7 million
in the three and six month periods ended September 30, 2008,
respectively, as compared with free cash flow burn of ($40.8)
million and ($107.6) million in the comparable periods of fiscal
2008; and
- Adjusted earnings (loss) per share for the fiscal 2009 second
quarter is $0.24 versus ($0.05) in the second quarter of fiscal
2008.
Second Quarter Consolidated Results
Fiscal 2009 second quarter consolidated net sales increased 6%
to $914.2 million as compared to net sales of $861.9 million in
the fiscal 2008 second quarter. The fiscal 2009 second quarter net
sales were positively impacted by favorable foreign currency translation
of $39.9 million or 4.4%. Favorable pricing in all divisions served
to offset volume softness.
Consolidated net loss for the fiscal 2009 second quarter was $10.2
million or ($0.14) per share compared to a net loss for the fiscal
2008 second quarter of $14.8 million or ($0.24) per share. The net
losses for these comparable periods are impacted by the following
items:
- The results of the fiscal 2009 second quarter include currency
remeasurement losses, net of tax, in the amount of $17.9 million
or ($0.24) per share, while the results of the fiscal 2008 second
quarter include currency remeasurement income of $8.9 million,
net of tax, or $0.14 per share.
- Both periods include unrealized gains from revaluation of
our warrants liability with the current period impact being
$9.2 million or $0.12 per share as compared with $1.5 million
or $0.02 per share in the prior year period.
- The fiscal 2009 second quarter’s results include restructuring
charges of $9.2 million, net of tax, or ($0.12) per share. These
charges are principally the result of an accelerated reduction
in force program in Europe and Australia. This amount compares
with net of tax restructuring charges in the second quarter
of the prior year in the amount of $2.5 million or ($0.04) per
share.
The Company’s tax provision and resulting effective tax rate
continue to be impacted by losses in tax jurisdictions in which
the Company has recorded valuation allowances and therefore does
not record a tax benefit. The current quarter’s provision was negatively
impacted by $10.5 million or ($0.14) per share due to valuation
allowance increases. This compares with a $2.1 million or ($0.03)
per share valuation allowance increase in the prior year period.
The prior year quarter also included 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.
Excluding the impact of the above-described, non-operational
items, adjusted net income for the fiscal 2009 second quarter was
$18.5 million, or $0.24 per share. This compares with adjusted net
loss for the comparable prior year period of $3.1 million or ($0.05)
per share. A reconciliation of net loss and net loss per share to
non-GAAP adjusted net income or loss and adjusted net income or
loss per share is provided at the end of this release.
Consolidated Adjusted EBITDA for the fiscal 2009 second quarter
was $68.2 million as compared with Adjusted EBITDA of $50.0 million
in the prior year quarter. This improvement was driven by gross
profit, which increased $31.6 million to $161.9 million, or 17.7%
of net sales in the current year fiscal second quarter, compared
to $130.3 million, or 15.1% of net sales in the prior year period.
The improvement in gross profit is the result of continued focus
on cost efficiencies, positive net pricing actions as well as a
$5.9 million favorable impact of foreign currency translation, partially
offset by rising non-lead commodity costs. Gordon A. Ulsh, President
and Chief Executive Officer said, “We remain focused on improving
operational efficiencies and driving down costs and are pleased
with the progress made in improving gross profit this quarter. We
believe the actions and initiatives implemented in the past several
quarters to improve productivity and reduce costs have positioned
us well to face the current macro-economic headwinds.”
Selling, general and administrative expenses for the fiscal 2009
second quarter increased to $123.2 million versus the prior year
period of $107.9 million. Approximately $4.5 million of the increase
resulted from foreign currency translation. The remainder of the
increase was driven by increased spending on targeted marketing
efforts, the hiring of additional commercial resources in our Industrial
Energy Americas division, our increased focus on engineering and
R&D and an increase in the Company’s provision for bad debts resulting
from the bankruptcy filing of a certain transportation aftermarket
customer in Europe.
Net interest expense decreased 13% or $2.9 million to $18.4 million
in the fiscal 2009 second quarter as compared to $21.3 million in
the fiscal 2008 second quarter as a result of the favorable impact
of lower interest rates and lower average net debt. At September
30, 2008, net debt decreased 10% to $522.3 million from $580.6 million
at June 30, 2008.
Fiscal 2009 Six Month Consolidated Results
The Company reported a net loss for the six months ended September
30, 2008 of $20.5 million or ($0.27) per share as compared to a
net loss of $50.5 million or ($0.82) per share in the prior year
period. Adjusted net income for the six months ended September 30,
2008 was $31.5 million or $0.42 per share. This compares to an adjusted
net loss of $7.0 million or ($0.11) per share for the prior year
six month period. A reconciliation of net loss and net loss per
share to non-GAAP adjusted net income or loss and adjusted net income
or loss per share is provided at the end of this release.
Net sales for the first six months of fiscal 2009 aggregated $1.89
billion as compared with $1.62 billion for the prior year period.
Excluding the effect of favorable foreign currency translation,
net sales increased 9% over the prior year period. EBIT for the
first six months of fiscal 2009 was $44.0 million compared to an
EBIT of $15.0 million in the prior year period. This improvement
is the result of increased operational efficiencies. Adjusted EBITDA
for the six months ended September 30, 2008 increased 57% to $139.3
million versus $89.0 million in the comparable prior year period.
Excluding the effect of foreign currency translation, Adjusted EBITDA
improved 51%, again, due to increased operational efficiencies.
As of September 30, 2008, the Company had cash and cash equivalents
of $170.0 million and $146.7 million availability under its bank
revolving loan facility. This compares to cash and cash equivalents
of $90.5 million and $136.4 million availability under the revolving
loan facility at March 31, 2008. Free cash flow was a positive $90.7
million for the six months ended September 30, 2008 as compared
to a free cash flow burn of ($107.6) million for the same period
of fiscal 2008. This increase is due to the increase in Adjusted
EBITDA and improved working capital, offset by an increase in capital
expenditures.
Segment Information for the Three and Six Months
Ended September 30
Transportation Segments
Net sales of the Company’s combined Transportation segments increased
by 5.4% to $561.0 million in the fiscal 2009 second quarter from
$532.3 million in the comparable fiscal 2008 period. Excluding the
favorable impact of $18.4 million in foreign currency translation,
net sales in the fiscal 2009 second quarter grew by $10.3 million
or 2% over the prior year period due to favorable pricing actions
on slightly lower overall unit volumes in both Transportation segments.
Net sales for the first six months of fiscal 2009 increased $147.1
million to $1.14 billion as compared to $996.1 million for the same
period of fiscal 2008.
Adjusted EBITDA for the combined Transportation segments was $36.2
million in the fiscal 2009 second quarter versus $42.2 million in
the comparable fiscal 2008 period. Adjusted EBITDA for Transportation
Americas improved in the current quarter over the prior year period
primarily as the result of favorable pricing actions, partially
offset by lower unit volumes. Transportation Europe and Rest of
World Adjusted EBITDA declined in the 2009 fiscal second quarter
when compared to the prior year primarily due to lower unit volumes
and higher raw material costs. Adjusted EBITDA for the first six
months of fiscal 2009 was $77.4 million versus $73.5 million for
the comparable fiscal 2008 period.
Industrial Energy Segments
Fiscal 2009 second quarter total net sales for the Company’s
Industrial Energy segments were $353.2 million up from $329.6 million
in the comparable fiscal 2008 period, a 7% increase. This increase
is primarily due to favorable currency translation of $21.4 million
over the prior year period. Net sales were also impacted by favorable
pricing actions in both the network and motive power markets worldwide.
Net sales for the first six months of fiscal 2009 were $742.2 million
compared to $628.3 million for the same period of fiscal 2008.
Total Adjusted EBITDA for the Industrial Energy segments in the
fiscal 2009 second quarter increased $22.8 million to $39.6 million
versus $16.8 million in the fiscal 2008 second quarter. This increase
is primarily due to effective pricing in all markets combined with
increased unit volumes in the network power market. Adjusted EBITDA
for the first six months of fiscal 2009 was $76.0 million versus
$33.7 million in the prior year period. Mr. Ulsh stated, “Both the
fiscal 2009 second quarter and year-to-date improvement in Adjusted
EBITDA are the result of continued effective pricing as lead has
declined as well as our ongoing efforts to improve our efficiencies
and cost position through Take Charge! and restructuring initiatives.”
Non-GAAP Financial Measures
The Company uses Adjusted EBITDA as a key measure of its operational
financial performance. This measure is the key indicator of 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 as well as a specific exclusion for
the loss on early extinguishment of debt recorded in the fiscal
2008 first quarter. Please refer to the reconciliations of net loss
to EBIT and Adjusted EBITDA in the attachments to this release.
The Company calculates Adjusted Earnings Per Share by excluding
from net income (loss) per share certain items, such as non-cash
tax valuation allowances, reorganization items related to the Company's
bankruptcy proceedings and the non-cash gain or loss from revaluation
of the Company's warrants liability. The Company also excludes the
impact of restructuring charges incurred to improve its relative
cost position when compared with the competition. Further, non-cash
currency remeasurement gains and losses have been excluded as these
are the result of financing as opposed to operating decisions. The
Company believes that these measures are useful to investors and
management because they allow investors to evaluate the Company's
performance for different periods on a more comparable basis by
excluding these nonrecurring items that the Company believes are
not indicative of, or may obscure trends useful in evaluating, the
Company's continuing operations. This supplemental presentation
should not be construed as an inference that the Company's future
results will be unaffected by similar adjustments to net income
(loss) per share determined in accordance with GAAP.
The Company also defines Free Cash Flow as cash from operating activities
and cash from investing activities, both as measured in accordance
with 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.
All of the foregoing non−GAAP financial measures should be used
in addition to, but not in isolation or as a substitute for, the
analysis provided in the Company's measures of financial performance
prepared in conformity with U.S. GAAP. The non-GAAP financial measures
should be read only in conjunction with the Company's condensed
consolidated financial statements prepared in accordance with GAAP.
Financial
tables attached (40 KB PDF)
Conference Call
The Company previously announced that it will hold a conference
call to discuss its results on November 7, 2008 at 10:00 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: 67739550
A telephonic replay of the conference call is available:
- Dates: from 1:00 p.m. ET November 7, 2008 to 11:59 p.m.
ET November 21, 2008
- Domestic dial-in: 800-642-1687
- International dial-in: 706-645-9291
- Passcode: 67739550
Exide Technologies Investor Day
The Company will host the meeting at its automotive battery manufacturing
facility in Bristol, Tennessee on Tuesday, November 18, 2008. Exide
management will discuss its operational performance followed by
a tour of the facility. Please contact Carol Knies at 678-566-9316
or email carol.knies@exide.com if interested in attending the Analyst
Day event.
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