Exide Announces Results for Its Third Fiscal Quarter
3 February 2000
Exide Announces Results for Its Third Fiscal Quarter
READING, Pa., Feb. 3 -- Exide Corporation , the
global leader in the lead-acid battery business, today reported results for
its third fiscal quarter, ended January 2, 2000.
Excluding non-recurring charges related to acquisitions or divestitures in
the quarter, it was the company's second consecutive profitable quarter under
new management and its most profitable quarter in two years.
Net income for the quarter, excluding non-recurring items, was
$12.6 million, or $.59 per diluted share, as compared to net income, excluding
non-recurring items, of $2.5 million, or $.12 per diluted share in the same
quarter last year. The results of last year's third quarter were adversely
affected by the company's inability to benefit from U.S. tax losses in that
quarter.
The company also announced that as a result of a recently completed
extensive internal investigation, it has uncovered a transaction that former
management authorized with a related party, improperly deferring a pre-fiscal
1998 charge until fiscal 1998 and 1999. Therefore, the company will restate
earnings for fiscal year 1999. This will result in an increase in earnings of
$0.7 million, or $.03 per diluted share for the third quarter of fiscal 1999
and $1.8 million, or $.08 per diluted share, for the first nine months of
fiscal 1999 to reverse the erroneous charge. This restatement will be
reflected in the company's third quarter 2000 Form 10-Q due on February 16,
2000. The company is also examining certain other transactions for interim
periods prior to fiscal 1999. The quarterly impact, if any, of these other
transactions will not affect annual results. This examination is expected to
be completed within 60 days.
The third fiscal quarter ended January 2, 2000 was affected by non-
recurring items including a $14.3 million write-off of in-process research and
development costs related to the acquisition of a controlling interest in Lion
Compact Energy in December 1999 and a net charge of $3.2 million related to
the divestiture of non-core businesses.
James M. Diasio, Chief Financial Officer at Exide Corporation, said, "We
are satisfied with these results, particularly in a quarter when North
American automotive revenues were significantly off due to unusually warm
weather over the three-month period and overall results were negatively
influenced by a strong dollar versus European currencies."
The company also announced that as a result of decreased demand for
automotive batteries in North America, it will lay off 58 workers at its
manufacturing operation in Reading, PA on February 4, 2000.
Revenues for the quarter were $618.5 million, as compared to revenues of
$678.5 million for the third fiscal quarter last year.
Including non-recurring items, the company recorded a loss of
($3.6) million, or ($.17) per diluted share for the third fiscal quarter, as
compared to a restated net loss of ($45.2) million, or ($2.13) per diluted
share for the same quarter last year.
Excluding non-recurring items, net income for the nine months ended
January 2, 2000 was $7.5 million, or $.35 per diluted share, as compared to
net income of $4.4 million, or $.21 per diluted share for the first nine
months of the last fiscal year. The results of last year's first nine months
were also adversely affected by the company's inability to benefit from U.S.
tax losses.
Revenues for the nine months ended January 2, 2000 were $1.7 billion, as
compared to $1.8 billion in the first nine months of the prior fiscal year.
Robert A. Lutz, Chairman and Chief Executive Officer at Exide, said, "We
continued to make significant progress during the third quarter. We were
particularly encouraged by improved performance in Europe, especially in our
standby battery business."
In other previously announced news during the quarter the company:
-- Completed the acquisition of a controlling interest in Lion Compact
Energy, a privately held company conducting research in dual-graphite
battery technology.
-- Reached an agreement with Tractor Supply Company to supply
275,000 batteries annually.
-- Reached an agreement to sell its battery separator operations in
Corydon, IN for approximately $26 million in cash.
-- Completed the sale of its Speed Clip accessories business, receiving
approximately $6 million in cash.
The company will conduct an analyst call to discuss third quarter earnings
on February 4 at 11:00 a.m. eastern standard time. The call is available to
investors in a listen-only format on the Internet at http://www.streetfusion.com.
The call will be repeated on webcast from February 4 at 1:00 p.m. until
February 12 at 1:45 a.m. at the same Internet address.
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 For the Nine Months Ended
(Restated) (Restated)
Jan. 2, Dec. 27, Jan. 2, Dec. 27,
2000 1998 2000 1998
NET SALES $618,528 $678,530 $1,693,677 $1,824,198
COST OF SALES BEFORE
ASSET SALES 443,088 513,884 1,239,304 1,357,248
(GAIN)/LOSS ON
ASSET SALES 3,175 -- 3,175 --
Cost of sales 446,263 513,884 1,242,479 1,357,248
Gross profit 172,265 164,646 451,198 466,950
OPERATING EXPENSES:
Selling, marketing
and advertising 83,246 88,819 237,975 247,364
General and
administrative 33,916 54,266 98,800 127,450
Purchased research
and development 14,262 -- 14,262 --
Goodwill amortization 4,138 6,526 12,663 15,374
135,562 149,611 363,700 390,188
Operating income 36,703 15,035 87,498 76,762
INTEREST EXPENSE, net 27,081 29,747 79,059 83,202
OTHER (INCOME)
EXPENSE, net 4,164 12,141 6,913 18,102
Income (loss) before
income taxes, minority
interest and
extraordinary loss 5,458 (26,853) 1,526 (24,542)
INCOME TAX EXPENSE 8,354 18,477 8,897 23,644
Loss before minority
interest and
extraordinary loss (2,896) (45,330) (7,371) (48,186)
MINORITY INTEREST 747 (107) 1,348 (309)
Loss before
extraordinary loss (3,643) (45,223) (8,719) (47,877)
EXTRAORDINARY LOSS
RELATED TO EARLY
RETIREMENT OF DEBT,
net of income tax
benefit of $0 -- -- -- (301)
Net loss $(3,643) $(45,223) $(8,719) $(48,178)
BASIC EARNINGS PER SHARE:
Loss before
extraordinary loss $(0.17) $(2.13) $(0.41) $(2.26)
Extraordinary loss -- -- -- (0.01)
Net loss $(0.17) $(2.13) $(0.41) $(2.27)
DILUTED EARNINGS PER
SHARE:
Loss before
extraordinary loss $(0.17) $(2.13) $(0.41) $(2.26)
Extraordinary loss -- -- -- (0.01)
Net loss $(0.17) $(2.13) $(0.41) $(2.27)
WEIGHTED AVERAGE
SHARES:
Basic 21,409,864 21,250,997 21,428,466 21,235,248
Diluted 21,409,864 21,250,997 21,428,466 21,235,248