Exide Technologies Announces Results for Third
Fiscal Quarter
PRINCETON, N.J., Jan. 29 Exide Technologies,
the global leader in stored electrical energy solutions, today announced
results for its third fiscal quarter, ended December 31, 2000.
In the company's first full quarter since acquiring GNB Technologies on
September 29, 2000, consolidated revenues were $764.4 million and consolidated
net income was $6.4 million, or $0.25 per diluted share, excluding non-
recurring items. This compares to revenues of $618.5 million and net income
of $12.6 million, or $0.59 per diluted share, excluding non-recurring items,
for the same period the year before.
Robert A. Lutz, Chairman and Chief Executive Officer of Exide
Technologies, said, "Our results, which are consistent with the estimates we
discussed in our conference call on December 18, 2000, were the result of
strong growth and profitability in the industrial segment of our business,
including both motive and network power applications, the impact of the
weakness in the automotive business, the effects of the Euro to dollar
translation and the additional financing cost related to the acquisition of
GNB Technologies."
Consolidated earnings before interest, taxes, depreciation and
amortization and losses on sales of receivables (EBITDA), excluding non-
recurring items, were $83.0 million for the quarter, as compared to
$76.7 million in the same period last year.
Operating earnings in the company's industrial business, excluding non-
recurring items, were $32.8 million in the third quarter versus $18.3 million
a year ago reflecting strong growth in Europe and the addition of the North
American business as a result of the acquisition of GNB Technologies.
Revenues in the industrial business on a proforma basis including the GNB
acquisition grew 12%, excluding the effect of currency, over the same period
last year.
Operating earnings in the transportation group, excluding non-recurring
items, were $22.7 million in the third quarter versus last year's
$41.8 million. The decline was due to lower sales volume and lower average
sales prices.
The company recorded $9.1 million of pre-tax restructuring charges
($5.5 million after tax, or $0.21 per diluted share) in the third fiscal
quarter for severance and closure costs related to its continuing
restructuring program. The company also recorded a $7.8 million non-recurring
pre-tax charge ($4.8 million after tax, or $0.18 per diluted share) in cost of
sales related to the earnings effect of recording inventory at market value at
the time of the acquisition of GNB. In addition, the company recorded a non-
recurring, pre-tax gain of $13.0 million ($7.8 million after tax, or $0.30 per
diluted share) related to the sale of its stake in Yuasa, Inc.
Including these non-recurring items, the company reported net income in
the third quarter of $4.0 million, or $0.15 per diluted share, as compared to
a net loss, including non-recurring items, of $3.6 million, or $0.17 per
diluted share, in the same period a year ago. Last year the company recorded a
non-recurring charge of $14.3 million ($0.67 per diluted share) for the write-
off of in-process research and development costs related to the acquisition of
a controlling interest in Lion Compact Energy and a non-recurring charge of
$3.2 million ($1.9 million after-tax, or $0.09 per diluted share) for the
divestiture of certain non-core businesses.
Excluding non-recurring items, the company reported net income for the
first nine months of the current fiscal year of $0.8 million, or $0.03 per
diluted share, as compared with net income of $7.5 million, or $0.35 per
diluted share, for the first nine months of last year.
The third fiscal quarter restructuring charges include severance and
related costs for:
-- Closing or sale of 27 of the company's distribution facilities by
March 31, 2001. Annualized savings from the distribution
rationalization are expected to be approximately $3 million.
-- Consolidation of the company's European accounting activities into a
shared services operation. Annualized savings from this change are
expected to be approximately $5 million.
As previously announced, the company also anticipates closing up to three
additional automotive battery manufacturing facilities and taking additional
cost reduction actions in administrative overhead. Specific plans are
expected to be announced before the end of March 2001 and are expected to
result in certain non-recurring charges in the fourth quarter of the current
fiscal year.
The company expects to generate $55 million of benefits from these
acquisition related restructuring initiatives in the first 12 months following
the GNB acquisition. On an annualized basis, total benefits are estimated to
be $90 million.
The company noted it has made significant progress on its previously
announced restructuring actions. These actions include:
-- 38 North American distribution facilities have been closed.
-- The Maple, Ontario, automotive battery facility was closed in November
2000 and is currently being redeveloped for industrial battery
manufacturing.
-- The automotive battery plant in Dallas, Texas, was closed in
November 2000.
-- The distribution center in Leavenworth, Kansas, was closed in
October 2000.
-- Approximately 300 administrative, sales, and marketing positions have
been eliminated and the closure of the Reading, Pennsylvania, office
is on schedule.
-- The integration of industrial operations in Europe is on schedule.
-- Annual purchasing savings of approximately $9.4 million have been
arranged.
Lutz said, "Our restructuring has been proceeding as planned and we expect
pre-tax savings of approximately $7 million to positively influence fourth
quarter results. Those expected fourth quarter savings, as well as the
benefits of our newly acquired North American industrial business, should help
to mitigate the current weakness in the transportation markets and greatly
improve a quarter which has traditionally been one of our weakest."
As previously announced, the company expects diluted earnings per share in
the fourth quarter to be in the range of $0.15 to $0.20 based on current
conditions and excluding non-recurring charges.
As reported recently, the company is under investigation by the United
States Attorney for the Southern District of Illinois relating to the
company's past business relationship, under its former management, with Sears,
Roebuck & Co. While, to the company's knowledge, there have been no changes
in the status of this investigation since the last report, the company
continues to cooperate fully with the government in its investigation.
Further, the Company has corrected all past practices which are the subject of
the investigation, instituted a comprehensive ethics program and is currently
in litigation with former management to recover damages concerning many of the
same issues that have been the focus of the U.S. Attorney's investigation.
Exide Technologies will conduct an analyst and investor call to discuss
its third-quarter results on January 30, 2001, at 10:00 AM Eastern Time. The
call will be available to investors in real-time, listen-only format on the
Internet at http://www.exideworld.com and/or http://www.streetfusion.com. The call will be
repeated on webcast from January 30, 2001 at 12:00 PM Eastern Time to February
6, 2001 at 8:00 PM Eastern Time.
Exide Technologies is the global leader in providing stored electrical
energy solutions. The company has annualized revenues of approximately $3
billion and has operations in 89 countries, serving the industrial and
transportation markets.
Industrial applications include network power batteries for
telecommunications systems, fuel cell load-leveling, electric utilities,
railroads, photovoltaic and other uninterruptible-power-supply (UPS) markets,
and motive power batteries for a broad range of equipment uses, including lift
trucks, mining and other commercial vehicles.
Transportation uses include automotive, heavy-duty truck, agricultural,
marine and other batteries, as well as new technologies being developed for
hybrid vehicles and new 42-volt automotive applications. The company supplies
both aftermarket and original equipment transportation customers.
Further information on Exide Technologies, its financial results and other
recent events can be found on the Internet at http://www.exideworld.com.
Exide Technologies
Certain statements in this press release may constitute forward-looking
statements as defined by the Securities Litigation Reform Act of 1995. As
such, they involve known and unknown risks, uncertainties and other factors,
which may cause the actual results of the company to differ materially from
any results expressed or implied by such forward-looking statements. These
are enumerated in further detail in the company's Form 10-K.
EXIDE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(In thousands, except per-share data)
For the Three Months For the Nine Months
Ended Ended
Dec. 31, Jan. 2, Dec. 31, Jan. 2,
2000 2000 2000 2000
NET SALES $764,385 $618,528 $1,724,359 $1,693,677
COST OF SALES BEFORE ASSET
SALES 582,089 443,088 1,283,222 1,239,304
NET LOSS ON ASSET SALES - 3,175 - 3,175
Cost of Sales 582,089 446,263 1,283,222 1,242,479
Gross profit 182,296 172,265 441,137 451,198
OPERATING EXPENSES:
Selling, marketing and
advertising 93,285 83,246 240,415 237,975
General and
administrative 40,414 33,916 93,850 98,800
Restructuring and other 9,181 - 39,181 -
Purchased research and
development - 14,262 - 14,262
Goodwill amortization 3,780 4,138 10,870 12,663
146,660 135,562 384,316 363,700
Operating
income 35,636 36,703 56,821 87,498
INTEREST EXPENSE, net 34,597 27,081 85,154 79,059
OTHER (INCOME) EXPENSE, net (8,718) 4,164 (4,887) 6,913
Income (loss)
before income
taxes and minority
interest 9,757 5,458 (23,446) 1,526
INCOME TAX EXPENSE (BENEFIT) 5,279 8,354 (4,730) 8,897
Income (loss)
before minority
interest 4,478 (2,896) (18,716) (7,371)
MINORITY INTEREST 510 747 1,205 1,348
Net income
(loss) $3,968 $(3,643) $(19,921) $(8,719)
EARNINGS (LOSS) PER SHARE:
Basic $0.16 $(0.17) $(0.88) $(0.41)
Diluted $0.15 $(0.17) $(0.88) $(0.41)
WEIGHTED AVERAGE SHARES:
Basic 25,470 21,410 22,762 21,428
Diluted 26,091 21,410 22,762 21,428
EXIDE CORPORATION AND SUBSIDIARIES
SEGMENT INFORMATION (unaudited)
(In thousands)
For the Three Months Ended December 31, 2000
Industrial Transportation Other Consolidated
Net sales $287,925 $476,460 $- $764,385
Gross profit 83,728 98,568 - 182,296
Operating earnings 23,491 22,701 (10,556) 35,636
For the Three Months Ended January 2, 2000
Industrial Transportation Other Consolidated
Net Sales $198,823 $419,705 $- $618,528
Gross profit 60,475 111,790 - 172,265
Operating earnings 18,252 38,620 (20,169) 36,703
For the Nine Months Ended December 31, 2000
Industrial Transportation Other Consolidated
Net sales $619,537 $1,104,822 $- $1,724,359
Gross profit 185,828 255,309 - 441,137
Operating earnings 50,968 26,163 (20,310) 56,821
For the Nine Months Ended January 2, 2000
Industrial Transportation Other Consolidated
Net Sales $536,215 $1,157,462 $- $1,693,677
Gross profit 159,317 291,881 - 451,198
Operating earnings 33,940 85,501 (31,943) 87,498
EXIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(In thousands, except per-share data)
December 31, March 31,
2000 2000
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $64,558 $28,110
Receivables, net of allowance for
doubtful accounts of $52,568 and
$64,177 respectively 485,321 379,490
Inventories 517,716 405,720
Prepaid expenses and other 22,022 16,026
Deferred income taxes 31,357 20,138
Total current assets 1,120,974 849,484
PROPERTY, PLANT AND EQUIPMENT 1,074,683 790,791
Less - Accumulated depreciation (374,271) (347,447)
Property, plant and
equipment, net 700,412 443,344
OTHER ASSETS:
Goodwill, net 544,800 501,117
Investments in affiliates 12,926 20,665
Deferred financing costs, net 25,151 12,796
Deferred income taxes 45,541 37,583
Other 38,980 36,472
667,398 608,633
Total assets $2,488,784 $1,901,461
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings $20,810 $24,666
Current maturities of long-term
debt 31,241 32,047
Accounts payable 331,776 260,352
Accrued expenses 471,846 318,951
Total current liabilities 855,673 636,016
LONG-TERM DEBT 1,340,577 1,061,672
NONCURRENT RETIREMENT OBLIGATIONS 135,608 128,827
OTHER NONCURRENT LIABILITIES 189,327 123,329
MINORITY INTEREST 19,068 17,993
Total liabilities 2,540,253 1,967,837
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $.01 par value
60,000 shares authorized;
25,433 and 21,401 shares
issued and outstanding 263 214
Additional paid-in capital 530,432 490,399
Accumulated deficit (340,806) (319,530)
Notes receivable - stock award
plan (691) (734)
Accumulated other comprehensive
loss (240,667) (236,725)
Total stockholders' equity
(deficit) (51,469) (66,376)
Total liabilities and
stockholders' equity
(deficit) $2,488,784 $1,901,461
EXIDE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
For the Nine Months Ended
December 31, January 2,
2000 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(19,921) $(8,719)
Adjustments to reconcile net
loss to net cash provided by (used in)
operating activities -
Depreciation and goodwill
amortization 69,714 74,385
Amortization of deferred
financing costs 3,530 2,704
(Gain) loss on asset sales (13,000) 3,175
Purchased research & development - 14,262
Deferred income taxes (12,467) (2,272)
Amortization of original issue
discount on notes 8,225 7,491
Provision for losses on accounts
receivable 5,777 4,988
Provision for restructuring and
other 39,181 -
Provision for severance and
patent infringement litigation - 400
Minority interest 1,205 1,348
Net proceeds from sales of
receivables 161,821 4,208
Changes in assets and liabilities
excluding effects of acquisitions and
divestitures -
Receivables (65,452) (97,272)
Inventories 2,365 39,812
Prepaid expenses and other 1,059 1,316
Payables (33,957) (14,711)
Accrued expenses (9,313) (42,450)
Noncurrent liabilities (21,857) (13,333)
Other, net (26,949) (1,438)
Net cash provided by (used in)
operating activities 89,961 (26,106)
CASH FLOWS FROM INVESTING ACTIVITIES:
GNB acquisition, net of cash
acquired of $17,098 (320,902) -
Other acquisitions of certain
businesses, net of cash acquired - (2,700)
Capital expenditures (38,248) (44,766)
Proceeds from sale of assets 36,919 46,534
Insurance proceeds from fire damage - 807
Net cash used in investing
activities (322,231) (125)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in short-term borrowings 967 14,774
Borrowings under Global Credit
Facilities Agreement 523,617 504,751
Repayments under Global Credit
Facilities Agreement (491,514) (462,934)
GNB acquisition debt 250,000 -
Decrease in other debt - (10,496)
Debt issuance costs (12,000) (678)
Dividends paid (1,364) (1,281)
Net cash provided by financing
activities 269,706 44,136
EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS (988) (1,423)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 36,448 16,482
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD 28,110 20,596
CASH AND CASH EQUIVALENTS, END OF
PERIOD $64,558 $37,078
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the year for -
Interest (net of amount
capitalized) $75,634 $80,618
Income taxes (net of refunds) $7,682 $11,096
EXIDE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
SUPPLEMENTAL INFORMATION: EXCLUDING NON-RECURRING ITEMS
(In thousands, except per-share data)
For the Three Months For the Nine Months
Ended Ended
Dec. 31, Jan. 2, Dec. 31, Jan. 2,
2000 2000 2000 2000
NET SALES $764,385 $618,528 $1,724,359 $1,693,677
COST OF SALES 574,289 443,088 1,275,422 1,239,304
Gross profit 190,096 175,440 448,937 454,373
OPERATING EXPENSES:
Selling, marketing and
advertising 93,285 83,246 240,415 237,975
General and
administrative 40,414 33,916 93,850 98,800
Goodwill amortization 3,780 4,138 10,870 12,663
137,479 121,300 345,135 349,438
Operating
income 52,617 54,140 103,802 104,935
INTEREST EXPENSE, net 34,597 27,081 85,154 79,059
OTHER EXPENSE , net 4,282 4,164 8,113 6,913
Income (loss)
before income
taxes and minority
interest 13,738 22,895 10,535 18,963
INCOME TAX EXPENSE 6,832 9,592 8,523 10,135
Income (loss)
before minority
interest 6,906 13,303 2,012 8,828
MINORITY INTEREST 510 747 1,205 1,348
Net income
(loss) $6,396 $12,556 $807 $7,480
EARNINGS PER SHARE:
Basic $0.25 $0.59 $0.04 $0.35
Diluted $0.25 $0.59 $0.03 $0.35
WEIGHTED AVERAGE SHARES:
Basic 25,470 21,410 22,762 21,428
Diluted 26,091 21,410 25,903 21,428
EXIDE CORPORATION AND SUBSIDIARIES
SEGMENT INFORMATION (unaudited)
SUPPLEMENTAL INFORMATION EXCLUDING NON-RECURRING ITEMS
(In thousands)
For the Three Months Ended December 31, 2000
Industrial Transportation Other Consolidated
Net sales $287,925 $476,460 $- $764,385
Gross profit 91,528 98,568 $- 190,096
Operating earnings 32,782 22,701 (2,866) 52,617
For the Three Months Ended January 2, 2000
Industrial Transportation Other Consolidated
Net Sales $198,823 $419,705 $- $618,528
Gross profit 60,475 114,965 $- 175,440
Operating earnings 18,252 41,795 (5,907) 54,140
For the Nine Months Ended December 31, 2000
Industrial Transportation Other Consolidated
Net sales $619,537 $1,104,822 $- $1,724,359
Gross profit 193,628 255,309 - 448,937
Operating earnings 60,259 56,163 (12,620) 103,802
For the Nine Months Ended January 2,2000
Industrial Transportation Other Consolidated
Net Sales $536,215 $1,157,462 $- $1,693,677
Gross profit 159,317 295,056 - 454,373
Operating earnings 33,940 88,676 (17,681) 104,935
