UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal quarter ended December 31, 2003
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number 1-11263
EXIDE TECHNOLOGIES
(Exact Name of Registrant as Specified in Its Charter)
| Delaware | 23-0552730 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) | |
| 210 Carnegie Center, Suite 500 Princeton, New Jersey |
08540 | |
| (Address of principal executive offices) | (Zip Code) | |
(609) 627-7200
(Registrant’s telephone number, including area code)
Indicate by a check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes ¨ No x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
As of February 12, 2004, 27,383,084 shares of common stock were outstanding.
EXIDE TECHNOLOGIES AND SUBSIDIARIES
TABLE OF CONTENTS
| Page | ||||
| PART I. FINANCIAL INFORMATION | ||||
| Item 1 |
3 | |||
| 3 | ||||
| CONDENSED CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2003 AND MARCH 31, 2003 |
4 | |||
| 5 | ||||
| 6 | ||||
| Item 2 |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
31 | ||
| Item 3 |
45 | |||
| Item 4 |
45 | |||
| PART II. OTHER INFORMATION | ||||
| Item 1 |
47 | |||
| Item 2 |
52 | |||
| Item 3 |
52 | |||
| Item 4 |
52 | |||
| Item 5 |
52 | |||
| Item 6 |
52 | |||
| 54 | ||||
2
Item 1. Financial Statements (Unaudited)
EXIDE TECHNOLOGIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per-share data)
| For the Three Months Ended |
For the Nine Months Ended |
|||||||||||||||
| December 31, 2003 |
December 31, 2002 |
December 31, 2003 |
December 31, 2002 |
|||||||||||||
| NET SALES |
$ | 653,016 | $ | 622,140 | $ | 1,825,015 | $ | 1,756,492 | ||||||||
| COST OF SALES |
510,925 | 469,315 | 1,439,981 | 1,365,380 | ||||||||||||
| Gross profit |
142,091 | 152,825 | 385,034 | 391,112 | ||||||||||||
| EXPENSES: |
||||||||||||||||
| Selling, marketing and advertising |
65,143 | 67,258 | 195,036 | 193,138 | ||||||||||||
| General and administrative |
43,181 | 44,810 | 127,460 | 137,155 | ||||||||||||
| Restructuring and impairment (Note 16) |
12,662 | 3,837 | 19,974 | 14,122 | ||||||||||||
| Goodwill impairment charge (Note 8) |
— | — | — | 37,000 | ||||||||||||
| Other (income) expense, net (Note 13) |
(20,619 | ) | (5,347 | ) | (34,715 | ) | (12,240 | ) | ||||||||
| Interest expense, net (Note 12) |
24,758 | 28,212 | 74,451 | 80,170 | ||||||||||||
| 125,125 | 138,770 | 382,206 | 449,345 | |||||||||||||
| Income (loss) before reorganization items, income taxes, minority interest and cumulative effect of change in accounting principle |
16,966 | 14,055 | 2,828 | (58,233 | ) | |||||||||||
| REORGANIZATION ITEMS, NET (Note 6) |
21,605 | 8,455 | 45,917 | 28,573 | ||||||||||||
| INCOME TAX PROVISION |
4,080 | 12,254 | 4,639 | 18,236 | ||||||||||||
| MINORITY INTEREST |
604 | 337 | 322 | 228 | ||||||||||||
| Net loss before cumulative effect of change in accounting principle |
(9,323 | ) | (6,991 | ) | (48,050 | ) | (105,270 | ) | ||||||||
| CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE (Note 3) |
— | — | 15,593 | — | ||||||||||||
| Net loss |
$ | (9,323 | ) | $ | (6,991 | ) | $ | (63,643 | ) | $ | (105,270 | ) | ||||
| NET LOSS PER SHARE, BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE |
||||||||||||||||
| Basic and Diluted |
$ | (0.34 | ) | $ | (0.26 | ) | $ | (1.75 | ) | $ | (3.84 | ) | ||||
| CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE PER SHARE |
||||||||||||||||
| Basic and Diluted |
$ | — | $ | — | $ | (0.57 | ) | $ | — | |||||||
| NET LOSS PER SHARE (Note 17) |
||||||||||||||||
| Basic and Diluted |
$ | (0.34 | ) | $ | (0.26 | ) | $ | (2.32 | ) | $ | (3.84 | ) | ||||
| WEIGHTED AVERAGE SHARES |
||||||||||||||||
| Basic and Diluted |
27,383 | 27,383 | 27,383 | 27,383 | ||||||||||||
The accompanying notes are an integral part of these statements.
3
EXIDE TECHNOLOGIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except per-share data)
| December 31, 2003 |
March 31, 2003 |
|||||||
| ASSETS |
||||||||
| CURRENT ASSETS: |
||||||||
| Cash and cash equivalents |
$ | 43,554 | $ | 39,766 | ||||
| Restricted cash |
17,729 | 6,297 | ||||||
| Receivables, net of allowance for doubtful accounts of $28,816 and $35,666, respectively |
684,257 | 665,010 | ||||||
| Inventories (Note 9) |
420,296 | 399,973 | ||||||
| Prepaid expenses and other |
21,228 | 16,451 | ||||||
| Deferred financing costs, net |
3,310 | 17,028 | ||||||
| Deferred income taxes |
37,268 | 33,233 | ||||||
| Total current assets |
1,227,642 | 1,177,758 | ||||||
| PROPERTY, PLANT AND EQUIPMENT, NET |
545,562 | 533,375 | ||||||
| OTHER ASSETS: |
||||||||
| Goodwill, net (Note 8) |
536,320 | 463,920 | ||||||
| Other intangibles, net (Note 8) |
46,720 | 47,560 | ||||||
| Investments in affiliates |
6,477 | 6,186 | ||||||
| Deferred financing costs, net |
— | 647 | ||||||
| Deferred income taxes |
82,952 | 67,017 | ||||||
| Other (Note 10) |
67,932 | 70,728 | ||||||
| 740,401 | 656,058 | |||||||
| Total assets |
$ | 2,513,605 | $ | 2,367,191 | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT |
||||||||
| CURRENT LIABILITIES: |
||||||||
| Short-term borrowings (Note 11) |
$ | 12,485 | $ | 7,778 | ||||
| Current maturities of long-term debt (Note 11) |
738,581 | 598,427 | ||||||
| Accounts payable |
267,947 | 247,189 | ||||||
| Accrued expenses |
365,681 | 324,740 | ||||||
| Total current liabilities |
1,384,694 | 1,178,134 | ||||||
| LONG-TERM DEBT (Note 11) |
23,187 | 117,405 | ||||||
| NONCURRENT RETIREMENT OBLIGATIONS |
195,746 | 170,181 | ||||||
| OTHER NONCURRENT LIABILITIES |
63,005 | 41,924 | ||||||
| LIABILITIES SUBJECT TO COMPROMISE (Note 7) |
1,504,702 | 1,533,089 | ||||||
| Total liabilities |
3,171,334 | 3,040,733 | ||||||
| COMMITMENTS AND CONTINGENCIES (Notes 14 and 15) |
||||||||
| MINORITY INTEREST |
25,250 | 21,827 | ||||||
| STOCKHOLDERS’ DEFICIT |
||||||||
| Common stock, $0.01 par value 100,000 shares authorized; 27,383 shares issued and outstanding |
274 | 274 | ||||||
| Additional paid-in capital |
570,589 | 570,589 | ||||||
| Accumulated deficit |
(995,647 | ) | (932,004 | ) | ||||
| Notes receivable—stock award plan |
(665 | ) | (665 | ) | ||||
| Accumulated other comprehensive loss |
(257,530 | ) | (333,563 | ) | ||||
| Total stockholders’ deficit |
(682,979 | ) | (695,369 | ) | ||||
| Total liabilities and stockholders’ deficit |
$ | 2,513,605 | $ | 2,367,191 | ||||
The accompanying notes are an integral part of these statements.
4
EXIDE TECHNOLOGIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
| For the Nine Months Ended |
||||||||
| December 31, 2003 |
December 31, 2002 |
|||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
| Net loss |
$ | (63,643 | ) | $ | (105,270 | ) | ||
| Adjustments to reconcile net loss to net cash (used in) provided by operating activities— |
||||||||
| Depreciation and amortization |
72,023 | 67,919 | ||||||
| Cumulative effect of change in accounting principle |
15,593 | — | ||||||
| Net (gain) loss on asset sales |
(4,806 | ) | 176 | |||||
| Deferred income taxes |
— | 3,208 | ||||||
| Amortization of original issue discount on notes |
— | 428 | ||||||
| Provision for doubtful accounts |
4,825 | 5,417 | ||||||
| Non-cash provision for restructuring |
56 | 3,139 | ||||||
| Reorganization items, net |
45,917 | 28,573 | ||||||
| Goodwill impairment charge |
— | 37,000 | ||||||
| Minority interest |
322 | 228 | ||||||
| Amortization of deferred financing costs |
||||||||