Exide Announces Results for Its First Fiscal Quarter
30 July 1999
Exide Announces Results for Its First Fiscal Quarter; Return to Profitability Expected During Quarter Ending October 3, 1999
READING, Pa., July 29 -- Exide Corporation , the
global leader in the lead-acid battery business, today reported results for
the fiscal period ended July 4, 1999 and forecasted a return to quarterly
profitability by the close of its current fiscal quarter.
For its first fiscal quarter the company reported operating earnings of
$15.3 million, as compared to $20.5 million for the first fiscal quarter last
year.
Operating margins for the first fiscal quarter dropped on a consolidated
basis from 3.8 percent to 2.9 percent. James M. Diasio, Chief Financial
Officer at Exide, said, "These results were within our expectations, with the
reduction in operating earnings and margin largely attributable to: a decline
in industrial battery sales for use in European submarines; absorption costs
associated with the company's conversion to a demand-pull manufacturing
system; weakened European pricing and the effects of a strong dollar versus
European currencies.
"While we do not report North American or European results separately, it
is important to note that the European results were substantially mitigated by
continued improvement in North American performance."
Revenues for the first fiscal quarter were $518.7 million, down from the
$544.5 million recorded in the first fiscal quarter of last year.
Approximately 60 percent of the reduction in revenues was currency
related. In addition, during the first fiscal quarter last year the company
recorded significant volume from the aforementioned European navy sales,
substantial low-margin sales through its Sears relationship, as well as
European revenues from Russian sales.
The company has since replaced its Sears business with higher-margin
customers and has consciously avoided sales into the troubled Russian market
in subsequent quarters. Those reductions, currency, the reduced quarterly
Navy demand and other European product mix issues largely accounted for the
consolidated revenue decline.
Robert A. Lutz, Chairman, President and Chief Executive Officer at Exide,
said, "Our informal mission statement for the restoration of our North
American business has been `sell a better mix of batteries to a better mix of
customers' and we have begun to do just that.
"A higher percentage of NASCAR Select batteries, plus the introduction of
our flagship Orbital Select battery into our automotive product mix, were two
of the factors that brought us approximately $2.65 more per automotive battery
in North America in the first quarter.
"This escalating North American performance, coupled with a more stable
price picture in Europe, make us confident that we will return to quarterly
profitability this summer and that we will be profitable for the fiscal year
ending March 31, 2000."
For the current fiscal quarter, the company reported a net loss of
$9.3 million, or $(.44) per diluted share, as compared to a loss (before an
extraordinary charge) of $6.1 million, or $(.29) per share a year ago.
According to Diasio, the company has made progress in its previously
stated goals of increasing the efficiency of its operations, divesting non-
core businesses, and reducing working capital and will continue those efforts.
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 Three Months Ended
July 4, June 28,
1999 1998
NET SALES $518,715 $544,532
COST OF SALES 389,546 404,378
Gross profit 129,169 140,154
OPERATING EXPENSES:
Selling, marketing and advertising 78,102 78,531
General and administrative 31,517 36,981
Goodwill amortization 4,257 4,176
113,876 119,688
Operating income 15,293 20,466
INTEREST EXPENSE, net 26,699 26,543
OTHER (INCOME) EXPENSE, net 1,310 2,414
Loss before income taxes, minority
interest and extraordinary loss (12,716) (8,491)
INCOME TAX BENEFIT (3,664) (2,338)
Loss before minority interest and
extraordinary loss (9,052) (6,153)
MINORITY INTEREST 250 (100)
Loss before extraordinary loss (9,302) (6,053)
EXTRAORDINARY LOSS RELATED TO EARLY
RETIREMENT OF DEBT, net of income
tax benefit of $0 -- (301)
Net loss $(9,302) $(6,354)
BASIC EARNINGS PER SHARE:
Loss before extraordinary loss $(0.44) $(0.29)
Extraordinary loss -- (0.01)
Net loss $(0.44) $(0.30)
DILUTED EARNINGS PER SHARE:
Loss before extraordinary loss $(0.44) $(0.29)
Extraordinary loss -- (0.01)
Net loss $(0.44) $(0.30)
WEIGHTED AVERAGE SHARES:
Basic 21,271,303 21,152,596
Diluted 21,271,303 21,152,596