C&D News

C&D Technologies Reports Financial Results for Third Quarter Fiscal 2005

BLUE BELL, Pa., Dec. 10 /PRNewswire-FirstCall/ -- C&D Technologies, Inc. (NYSE: CHP), a leading North American producer and marketer of electrical power storage and conversion products used in telecommunications and industrial applications, today announced financial results for its third quarter ended October 31, 2004. The company's net loss for the quarter was $7.4 million, or 29 cents per share, compared to a profit of $4.2 million, or 16 cents per diluted share in the prior year's third quarter. On an operating basis, C&D earned 5 cents per diluted share during the third quarter.

Operating results for the third quarter of 2004 exclude one-time asset impairment charges of approximately $13.5 million or 32 cents per share, associated with property, plant and equipment at the company's Leola, Pennsylvania and Huguenot, New York manufacturing facilities, as well as a one-time, non-cash charge of approximately $440,000 or 2 cents per share to write off purchased in-process R&D associated with the June 30, 2004 acquisition of Datel, Inc.

Net sales for the quarter were $112.7 million, a 33.0% increase from the prior year's third quarter sales of $84.9 million. The acquisitions of Celab Limited, Datel and the Power Systems division of Celestica, Inc. (which the Company operates as "CPS"), completed earlier this year, added $24.3 million of sales to the third quarter and $31.7 million to the year-to-date sales results.

For the nine months ended October 31, 2004, the net loss was $2.1 million, or 8 cents per diluted share, compared to net income of $10.6 million, or 41 cents per diluted share, in the prior year's comparable period. On an operating basis, C&D earned 26 cents per share for the nine-month period. Net sales for the nine-month period were $292.2 million, a 19.9% increase from the prior year's comparable period sales of $243.6 million.

Wade H. Roberts, Jr., president and chief executive officer of the company, said, "Third quarter results were disappointing, as anticipated by our November 16, 2004 press release. Several factors adversely affected our performance, including the price of lead, costs associated with moving certain production lines to Reynosa, Mexico, weaker-than-expected results at CPS, expenses associated with implementation of Sarbanes-Oxley Act Section 404 internal controls. However, we remain convinced our initiatives to grow and re-position the company will pay off by significantly improving our standing in the power storage and conversion industries while yielding improved bottom line results."

C&D Technologies' third quarter operating results by reporting segment were as follows:

Standby Power - Sales increased 3.6% in the quarter, to $62.2 million from $60.1 million in the prior year's third quarter, driven by increased sales from the UPS market, as well as a modest increase in sales to telecommunications customers. The division's operating loss was $5.3 million, compared to a profit of $7.8 million in the year-ago quarter. The Standby Power Division continued to experience high raw material costs (principally lead) and plant transition expenses. These two factors negatively affected operating income by approximately $6.2 million during the third quarter. In addition, one-time impairment charges associated with the Leola, Pennsylvania facility totaled $8.9 during the third quarter.

Power Electronics - Sales increased 276% during the quarter to $35.6 million, from $9.5 million in the prior year's third quarter. The revenue increase reflected $24.3 million from acquisitions closed during the year, as well as improved demand for DC-DC products. Operating income in the third quarter was $1.2 million, compared to $401,000 in the third quarter of fiscal 2004.

Motive Power - Sales decreased 2.7% in the third quarter to $14.9 million, from $15.3 million in the prior year's third quarter. The division's operating loss was $5.3 million, compared to an operating loss of $1.0 million in the prior year's quarter. Motive Power's operating loss was also negatively affected by the previously mentioned increased raw material costs and plant transition expenses, which increased the division's current quarter operating loss by approximately $1.3 million. In addition, one-time charges associated with the Huguenot, New York facility negatively affected operating results by $4.6 million during the quarter.

In commenting on the outlook for the fourth quarter, Mr. Roberts stated, "We continue to target earnings per share in the range of 8 to 12 cents for the fourth quarter, assuming the price of lead does not worsen."

C&D Technologies will hold a conference call on Monday, December 13, 2004 at 9:00 AM Eastern Standard Time to discuss these results in detail. To participate, please call 706-679-4521 approximately five minutes before the conference call start time. A replay of the conference call will be available at approximately 12:00 PM and will remain available until midnight on December 20, 2004. Please call 800-642-1687 (706-645-9291 for international callers) and enter PIN number 2808711 to access the replay.

A simultaneous webcast of the conference call may be accessed at the investor relations section of our website at http://www.cdtechno.com. To listen to the live call, please go to the web site at least 15 minutes early to register, download and install any necessary audio software. An archive of the conference call will be available approximately two hours after the conference call ends and will remain available on the company's website until December 27, 2004.

This press release may contain forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934) which are based on management's current expectations and are subject to uncertainties and changes in circumstances. Words and expressions reflecting something other than historical fact are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. Factors that appear with the forward- looking statements, or in the company's Securities and Exchange Commission filings (including without limitation the company's annual report on Form 10-K for the fiscal year ended January 31, 2004, or the quarterly reports filed on Form 10-Q thereafter), could cause the company's actual results to differ materially from those expressed in any forward-looking statements made herein.

Section 404 of the Sarbanes-Oxley Act of 2002 requires management to perform an evaluation of its internal control over financial reporting and have our independent auditors attest to such evaluation. Along with other companies whose fiscal year ends January 31, we must implement these requirements for the first time in connection with the preparation of the annual report for the year ending January 31, 2005. We have been actively preparing for the implementation of this requirement by, among other things, establishing an ongoing program to document, evaluate and test the systems and processes necessary for compliance. While we anticipate that we will be able to comply on a timely basis with these requirements, unforeseen delays may occur which could prevent us from achieving timely compliance. If we fail to complete our evaluation on a timely basis and in a satisfactory manner, or if our external auditors are unable to attest on a timely basis to the adequacy of the Company's internal control, we may be subject to additional scrutiny surrounding our internal control over financial reporting.

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
SELECTED FINANCIAL INFORMATION
(In thousands, except for per share data)
(Unaudited)

* Reclassified for comparative purposes

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
SELECTED FINANCIAL INFORMATION (CONT.)
(Dollars in thousands)
(Unaudited)

SOURCE C&D Technologies, Inc.

Contact: Stephen E. Markert, Jr. of C&D Technologies, +1-215-619-7835; or Joseph Crivelli of Gregory FCA, for C&D Technologies, +1-610-642-8253

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