Exide Technologies: Liquidity ample to continue investing in business

By Jennifer Lanning Drey

Portland, Ore., June 5 - Exide Technologies, Inc. ended fiscal 2009 with about $300 million of total liquidity at March 31, an amount that positions the company to continue investing in research and development and necessary restructuring in fiscal 2010, Gordon Ulsh, chief executive officer of Exide, said Friday during its earnings conference call for the fourth quarter of fiscal 2009.

Exide's liquidity included $69.5 million of cash and cash equivalents and $130.6 million available under its revolving credit facility. The figure also included availability on its accounts receivable facilities.

The company's year-end cash balance was down from $90.5 million on the same date in 2008, reflecting the $25 million pre-funding of its 2010 pension contribution.

Exide believes its lack of significant debt maturities in the near term and absence of financial maintenance covenants, combined with its liquidity, will provide the company significant financial flexibility in fiscal 2010, Phillip Damaska, chief financial officer of Exide, said during the call.

The company is committed to reinvesting capital into the business and expects capital spending to be at least $100 million in fiscal 2010.

"Although we're facing a difficult economy, we continue to look to invest for the future," Ulsh said.

Capital investments were just shy of $109 million in fiscal 2009, nearly double the level of investment made in recent prior years, he said.

Ulsh said working capital management provided the liquidity for reinvestment in the business.

Net debt was $589 million at March 31, $37 million lower than on the same date in 2008, as the company paid down credit facilities in Europe and bought out some of its more expensive leases, Damaska said.

Sales, earnings down

Exide's net sales were $654.3 million in the fourth quarter, down from $1.03 billion in the prior-year period on 20% lower volumes. The net loss for the fourth quarter of fiscal 2009 was $64.4 million, compared to net income of $63.3 million in the comparable period of fiscal 2008.

The current-year results included $41.8 million of restructuring charges primarily related to workforce reductions in Europe.

"We remain focused on the opportunity to improve our financial results, recognizing that the early part of fiscal 2010 will continue to be challenged and impacted by severe economic conditions that all businesses face today," Ulsh said.

Fourth-quarter adjusted EBITDA was $40.4 million, compared with adjusted EBITDA of $80.1 million in the prior-year period.

Exide is an Alpharetta, Ga., manufacturer and supplier of lead-acid batteries used in transportation, motive power, network power and military applications.

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