Exide Announces Improved Operating Results for Fiscal Year and Fourth Quarter
14 June 1999
Exide Announces Improved Operating Results for Fiscal Year and Fourth Quarter
Fourth Quarter Profit Margin Improves
As a Result of Lower Costs, Better Product Mix
READING, Pa., June 11 -- Exide Corporation , the
global leader in the lead-acid battery business, today reported that its
operating earnings, excluding one-time and unusual items, increased
1.8 percent to $138.4 million for the fiscal year ended March 31, 1999, from
$135.9 million for the same period last year.
For the fourth fiscal quarter the Company reported operating earnings,
excluding one-time and unusual items, increased to $23.2 million from
$5.9 million for the fourth quarter last year.
The operating margin, excluding one-time and unusual items, declined from
6.0 percent in 1998 to 5.8 percent in 1999. During the fourth fiscal quarter
of 1999, the operating margin improved to 4.1 percent from 1.1 percent in the
comparable prior quarter. The improvement in the fourth fiscal quarter margin
is reflective of the Company's emphasis on cost reductions and on sales of
higher profit margin batteries.
Robert A. Lutz, Chairman, President and Chief Executive Officer of Exide
Corporation, said, "We have begun moving the Company in the right direction
and have changed both the business strategy and culture at Exide. While much
remains to be done, we expect further concrete, positive evidence of these
changes to be seen as the current fiscal year progresses."
The Company reported revenues for the fiscal year ended March 31, 1999 of
$2.4 billion, compared to $2.3 billion for the fiscal year ended March 31,
1998. Revenues for the fourth quarter ended March 31, 1999 were
$550.1 million, compared to $538.7 million for the comparable period last
year.
James M. Diasio, Chief Financial Officer at Exide, said, "As reflected by
our operating earnings, we have taken substantial steps to increase the
profitability and efficiency of our operations and will continue that effort.
During the current fiscal year we also intend to divest non-core businesses,
outsource certain operations, lower working capital and reduce our debt, which
remains the largest impediment to our success."
On an as-reported basis, the Company reported a net loss before
extraordinary loss of $129.6 million, or $6.11 per diluted share, for the year
ended March 31, 1999, compared to net income before extraordinary loss of
$18.7 million, or $.87 per diluted share, for the prior fiscal year. For the
fourth quarter ended March 31, 1999, the Company reported a net loss of
$79.9 million, or $3.76 per diluted share, compared to a net loss before
extraordinary loss of $5.1 million, or $.25 per diluted share, for the prior
fiscal year.
One-time and unusual items totaled $106.5 million for the fiscal year, and
$66.2 million in the fourth fiscal quarter, and include:
-- Writedown of assets to estimated net proceeds associated with our
planned divestitures ($48.0 million for the year and $41.9 million for the
fourth quarter).
-- Writeoffs for certain Russian receivables and related inventories;
abandonment of a development project for a security battery; bad debts and
bankruptcies; dissolution of the Company's relationship with Sears and other
operational matters ($31.9 million for the year and $14.6 million for the
fourth quarter).
-- A patent infringement claim; settlement of the Florida Attorney General
complaint; severance and other legal matters ($22.0 million for the year and
$6.2 million for the fourth quarter).
-- Other ($4.6 million for the year and $3.5 million for the fourth
quarter).
During the past fiscal year and the months since March 31, 1999, the
Company has restructured its management team. This included the appointment of
Mr. Lutz; the appointment of Mr. Diasio as Chief Financial Officer; the
appointment of four new members to the Board of Directors, as well as the
hiring of a new Treasurer, a Chief Financial Officer for Europe and a new
Corporate Controller.
In April and May, respectively, the Company resolved two major legal
issues with the fully insured settlement of a class action shareholder suit
and the settlement of the Florida Attorney General complaint.
In May 1999 the Company announced an agreement with Pep Boys to supply its
western retail stores with as many as 1.4 million batteries per year. This
contract will replace, on a profitability basis, most of the batteries Exide
sold through its contract with Sears. The Company is also confident of
obtaining one or more supply contracts in the near future.
Also in May, the Company introduced its new Orbital Select automotive
battery to the U.S. market. The Orbital Select represents a major
technological advance in lead-acid automotive batteries and, while the Company
has modest initial sales projections for the Orbital Select, demand is already
surpassing Company expectations.
"The impressive reception to our new battery strengthens our commitment to
making Exide the leader in both technology and quality throughout the global
lead-acid battery business," Mr. Lutz said.
Exide Corporation, with annual revenues of approximately $2.4 billion and
operations in 19 countries, is the world's largest manufacturer of automotive
and industrial lead-acid batteries. Further information about Exide's
businesses and products is available at http://www.exideworld.com.
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 be materially different
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)
(Amounts in thousands, except share and per-share data)
For the For the
Three Months Ended Fiscal Year Ended
March 31, March 31, March 31, March 31,
1999 1998 1999 1998
NET SALES $550,080 $538,657 $2,374,278 $2,273,126
COST OF SALES 458,889 398,308 1,817,949 1,670,408
Gross profit 91,191 140,349 556,329 602,718
OPERATING EXPENSES:
Selling, marketing
and advertising 87,274 93,445 334,638 311,683
General and
administrative 42,294 37,221 169,744 135,606
Goodwill amortization 4,642 4,544 20,016 16,922
134,210 135,210 524,398 464,211
Operating income (loss) (43,019) 5,139 31,931 138,507
INTEREST EXPENSE, net 28,477 26,285 111,679 112,301
OTHER (INCOME) EXPENSE, net 10,750 (8,319) 28,852 (5,852)
Income (loss) before income
taxes, minority interest and
extraordinary loss (82,246) (12,827) (108,600) 32,058
INCOME TAX EXPENSE (643) (7,765) 23,001 13,475
Income (loss) before
minority interest and
extraordinary loss (81,603) (5,062) (131,601) 18,583
MINORITY INTEREST (1,672) --- (1,981) (114)
Income (loss) before
extraordinary loss (79,931) (5,062) (129,620) 18,697
EXTRAORDINARY LOSS RELATED TO EARLY
RETIREMENT OF DEBT, net
of income tax benefit of
$0, $0, $0, and $3,667 --- (11,419) (301) (28,513)
Net income (loss) $(79,931) $(16,481) $(129,921) $(9,816)
BASIC EARNINGS PER SHARE:
Income (loss) before
extraordinary loss $(3.76) $(0.25) $(6.11) $0.91
Extraordinary loss --- (0.55) (0.01) (1.39)
Net income (loss) $(3.76) $(0.80) $(6.12) $(0.48)
DILUTED EARNINGS PER SHARE:
Income (loss) before
extraordinary loss $(3.76) $(0.25) $(6.11) $0.87
Extraordinary loss --- (0.55) (0.01) (1.32)
Net income (loss) $(3.76) $(0.80) $(6.12) $(0.45)
WEIGHTED AVERAGE SHARES:
Basic 21,276,232 20,595,898 21,245,494 20,587,782
Diluted 21,276,232 20,595,898 21,245,494 21,641,786