C&D Technologies, Inc. announced financial results for the fiscal 2008 third quarter ended October 31, 2007. Results for the quarter and all comparative financial data included herein reflects the presentation of both the Power Electronics Division ("PED") and Motive Power Division ("Motive") as discontinued operations. With these changes C&D’s continuing operations are now solely comprised of results from Standby Power.
For the quarter, the company reported a consolidated net loss of $9.3 million or $0.36 per diluted share, compared to a net loss of $17.8 million or $0.70 per diluted share in the prior year’s third quarter. Net loss from continuing operations was $7.0 million or $0.27 per diluted share during the quarter, compared to $0.3 million or $0.01 per diluted share in the third quarter of fiscal 2007. Net loss from discontinued operations was $2.3 million or $0.09 per diluted share, compared to a net loss of $17.6 million or $0.69 per share in the third quarter of fiscal 2007. Revenues were $91.3 million, an increase of 29.3% compared to $70.6 million in the prior year’s third quarter and up approximately 10% from $82.8 million in our second quarter.
Dr. Jeffrey A. Graves, President and CEO stated, "The fiscal third quarter saw the culmination of a number of important strategic actions and milestones. We sold our Power Electronics Division to Murata Manufacturing of Japan, we reached agreement to sell certain assets of the Motive Power Division to Crown Battery which will result in our exit from that business early in our fourth quarter, we made additional progress in our cost-cutting efforts, and most importantly, we completed the restructuring of all material customer contracts to include lead escalation clauses. With continued execution of our cost reduction initiatives, the flow through of our pricing actions, and the recent moderation of lead prices we look forward to returning C&D Technologies to profitability early in the next fiscal year. We are now laser-focused on the growing standby power market, where we have distinct competitive advantages including a strong brand, leading market share, loyal customers, and a reputation for innovation and product quality. We exit the third quarter with an improved balance sheet, strong revenue momentum in all of our key end markets, and significant cost reduction opportunities available to us in the Standby Power business. With these factors now aligned, we are very excited about the year ahead."
With record revenues of $91.3 million in the third quarter, the Standby Power division posted its fourth consecutive sequential revenue increase. In addition, book-to-bill ratios have been greater than 1.0 in 6 of the past 7 quarters, including the quarter just ended, supporting continuing revenue momentum. Revenue growth is being driven by enterprise data center construction, expansion of the cable TV fiber-to-the-home infrastructure, and strength in the utility end markets accompanying renewed investment in the electrical transmission network in North America. While sales to the telecommunications industry have been sluggish for most of this fiscal year, recent FCC regulations mandating eight hours of battery backup time for data carriers are expected to drive incremental demand from telecommunications customers in future quarters.
Standby Power’s operating loss of $4.4 million was driven by increasing raw material prices, primarily lead, which reached record highs during the quarter, but has since softened significantly, as well as increased general and administrative cost allocations principally resulting from the divestiture of the Power Electronics and Motive Power divisions. In addition, one-time costs including severance and plant closure costs totaled $1.8 million during the quarter. Excluding these one-time costs, the operating loss would have been $2.6 million.
