Exide Reports Sales Up, Losses Down

February 12, 2006 by Jeff Shepard

Exide Technologies had consolidated net sales for the third quarter of fiscal 2006 of $733.4 million a slight increase from $727.9 million during the same period a year ago. Higher sales volumes in Exide's Industrial Energy business and the favorable impact of lead surcharges and other pricing actions were largely offset by changes in currency rates, which negatively impacted net sales for the quarter by approximately $35.9 million.

Consolidated net loss for the third quarter of fiscal 2006 was $27.7 million, including $6.5 million in restructuring costs and $1.3 million in bankruptcy-related costs. During the same period in fiscal 2005, the Company recorded a net loss of $439 million, including a $399 million non-cash goodwill impairment charge and a tax valuation charge of $35.4 million.

"Although we are far from satisfied with our performance during the third quarter, there were clearly some bright spots for Exide," said Gordon A. Ulsh, President and Chief Executive Officer. "First, the motive and network power segments in both Industrial Energy divisions continue to provide profitable growth. Second, the reorganization that we launched last spring and the Take Charge! program initiated in late summer are providing tangible benefits in terms of reduced costs and improved efficiency. Third, we continued on a disciplined review of our customer contracts to determine which business meets our profitability requirements and which business we should discontinue if it no longer contributes to our profitable growth. Fourth, the payback from price increases and lead escalators that we began implementing months ago in response to rising commodity costs are now showing up on our bottom line."

The Industrial Energy business reported consolidated global net sales of $276.1 million during the third quarter of fiscal 2006, an increase of 2.6 percent over the same period the previous year. The increase was driven largely by strong performance in North

America, where sales rose 21 percent due to a 28.6 percent increase in product demand in network power and a 13.7 percent increase in motive power. Net income for the period increased to $10.1 million from a net loss of $137.0 million, which included a goodwill impairment charge of $159.8 million. Current-year results were adversely affected by a restructuring and asset impairment charge in the aggregate amount of $10.1 million relating to the closure of the Kankakee, Illinois, plant.

Consolidated global net sales in Transportation decreased slightly during the period to $457.4 million from $458.8 million reported in the prior-year period. These results were primarily due to foreign exchange as the U.S. Dollar strengthened primarily against the Euro, and because of lower unit volume in Europe-ROW, which was offset by higher volumes in North America. Net income for the period increased to $16.1 million from a net loss of $212.2 million, including a goodwill impairment charge of $239.6 million.