C&D Technologies Announces Second Quarter Results

C&D Technologies, Inc. announced financial results for the fiscal 2008 second quarter ended July 31, 2007. For the quarter, the company reported a consolidated net loss of $3.1 million or $0.12 per diluted share on consolidated revenues of $135.7 million. This compared to a net loss of $3.6 million or $0.14 per diluted share on consolidated revenues of $132.4 million in the prior year’s second quarter. Revenues from continuing operations were $94.6 million in the second quarter as compared to $83.4 million in the prior year’s second quarter.

Net loss from continuing operations was $1.8 million or $0.07 per diluted share during the quarter, compared to $3.9 million or $0.15 per diluted share in the second quarter of fiscal 2007. The Power Electronics Division was classified as a discontinued operation during the quarter and was divested through a sale to Murata Manufacturing that closed after quarter end. Net loss from discontinued operations was $1.3 million or $0.05 per diluted share, compared to net income of $264,000 or $0.01 per share in the second quarter of fiscal 2007.

Dr. Jeffrey A. Graves, President and CEO said, "With the sale of Power Electronics Division, which was completed at the end of August, C&D Technologies is now focused in the growing power storage industry with world-class technology, leading market share in North America, and an improving low-cost manufacturing platform. In addition, the sale proceeds from PED enabled us to recast our balance sheet by repaying all outstanding balances under our revolving line of credit, which provides us with greatly improved flexibility to support our cost reduction and growth initiatives for the foreseeable future. We presently have a cash balance in excess of $40 million as well as a PED adjusted line of credit availability of nearly $45 million"

In the second quarter, Standby Power Division net sales were $81 million, and operating profit was $2.7 million, compared to $69.3 million and $2.7 million, respectively, in the second quarter of fiscal 2007. Revenues were up 17% compared to last year’s second quarter, with a little less than half of the increase resulting from price increases and the balance from robust sales volume growth in the UPS and Cable TV industries. On a sequential basis, revenues were up 7% with most of the increase coming from price increases. Results for the second quarter included one-time costs associated with the closure of the Conyers, Georgia facility of $924,000.

Graves commented, "The Standby Power division delivered a solid quarter in a difficult market. We are holding and in some segments gaining market share, cutting costs, and improving the operational effectiveness at our manufacturing facilities. Our lead management programs and pricing actions are helping to defray the rapid escalation in lead costs, although with time lags as we have previously covered. Importantly over the last three months many of the contracts that historically had fixed prices have been renegotiated to reflect higher lead costs."

The Motive Power Division posted total net sales of $13.6 million, and an operating loss of $2.8 million. Revenues decreased 3.5% compared to last year’s second quarter, but increased 6% sequentially. Results for the quarter were impacted by an increase in warranty reserves for the division by approximately $918,000 in light of higher raw material costs for future warranty replacements.