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C&D News
C&D Technologies Announces Fourth Quarter and Fiscal 2008 Full Year Results
BLUE BELL, Pa., April 10, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- C&D Technologies, Inc. (NYSE: CHP), a leading North American producer and marketer of complete, integrated standby power systems, today announced financial results for the fiscal 2008 fourth quarter and full year ended January 31, 2008.
Results for the quarter and all comparative financial data included herein reflects the presentation of the Power Electronics Division ("PED") and Motive Power Division ("Motive") as discontinued operations. With these changes C&D's continuing operations are solely comprised of results from the Standby Power Division.
Overview:
For the quarter, the Company reported a consolidated net loss of $10.3 million or $0.40 per diluted share compared to a net loss of $14.3 million or $0.55 per diluted share in the prior year's fourth quarter. Net loss from continuing operations was $6.2 million or $0.24 per diluted share during the quarter, compared to $11.7 million or $0.45 per diluted share in the fourth quarter of fiscal 2007. Net loss from discontinued operations was $4.1 million or $0.16 per diluted share, compared to $2.6 million or $0.10 per share in the fourth quarter of fiscal 2007.
Fourth quarter revenues for continuing operations were $94.5 million, up 23.1% compared to $76.8 million in the prior year's fourth quarter and up approximately 3.5% sequentially from the third quarter of fiscal 2008.
Dr. Jeffrey A. Graves, President and CEO said, "In the fourth quarter we continued gaining momentum with both solid top line growth and significant progress in our cost reduction efforts consistent with our most important strategic initiatives. Standby Power, now our sole operation, posted strong revenues and its fifth consecutive quarterly revenue increase. For the quarter, while price increases implemented to compensate for the escalation in the cost of lead accounted for the majority of the revenue increase, we continued to be pleased with the volume strength given the general economic environment. These revenue trends continue to be driven by strong underlying fundamental strength in enterprise data center construction, expansion of the cable TV fiber-to-the-home infrastructure, telecom industry growth along with end of year buying, and continued moderate strengthening in the utility industry. With the divestiture of our other businesses now behind us, we are able to concentrate our full energies and focus on our strong Standby Power business and to leverage the growth of that business through additional cost reductions and efficiency improvements."
Discontinued Operations:
In the fourth quarter, loss from discontinued operations was $4.1 million or $0.16 per diluted share. These results reflect the operations of the Motive Power Division during the manufacturing transition period that lasted through the end of December, as well as additional impairment charges of approximately $1.5 million recognized in the quarter. The sale of both the Motive Power and Power Electronics Divisions are now complete.
Full Year Results:
For the year, the Company reported a consolidated net loss of $18.5 million or $0.72 per diluted share compared to a net loss of $42.7 million or $1.67 per diluted share in the fiscal 2007. Net loss from continuing operations was $2.2 million or $0.09 per diluted share during for the current year, compared to $13.9 million or $0.54 per diluted share in fiscal 2007. Net loss from discontinued operations was $16.4 million or $0.63 per diluted share, compared to $28.8 million or $1.13 per share in fiscal 2007. Fiscal 2007 annual financial results included a $15.2 million gain on sale related to disposition of the company's former manufacturing facility in Shanghai, China. Revenues for fiscal 2008 were $346.1 million, up 20.5% compared to $287.2 million in the prior year. Approximately 70% of the increase was due to pricing actions, with the balance attributable to volume growth.
"Our pricing and lead management programs have now gone a long way towards effectively offsetting the impact of lead escalation on our operations" Dr. Graves continued. "However, as we indicated last quarter, because we now account for inventories and Costs-of-Goods-Sold on a FIFO basis ("First in First Out") our results for the fiscal 2008 fourth quarter were burdened by the highest average LME ("London Metal exchange") lead prices for the year over $1.50 per pound. Looking ahead, we expect to see significant margin improvement in our business in the upcoming months as pricing lags are recovered through our contract adjustments and the benefits of our cost reduction programs flow through the income statement. Our cost reduction initiatives continue on track with our previously communicated targets, having achieved slightly over $15 million of savings this past year with an incremental $15 million expected to be realized in fiscal 2009, which we are now entering."
Dr. Graves concluded, "C&D Technologies is now focused on leveraging our competitive strengths in the vital and growing power storage industry. We have a strong brand, leading North American market share, long-term loyal customers, an improving low-cost manufacturing platform and a reputation for innovation and product quality that spans over a century. As a continuing reaffirmation of our heritage for innovation, we most recently announced the release of our msEndur(R) II "Green Battery" system that benefits the environment and a company's operational costs by consuming much less power than equivalent batteries, and does so in a smaller footprint. With over 97% of the materials used to manufacture msEndur II being fully recyclable and reusable, we provide customers with record-breaking life performance and energy density advantages, while also addressing their growing concerns for our environment. In addition, earlier last month, C&D Technologies' growing international reputation for quality and technology was instrumental in the decision to use our batteries to provide back up power to the new National Stadium in Beijing, China, which will be the centerpiece of the upcoming summer Olympic Games. With our pricing and cost reduction initiatives driving improved profitability levels, and the launch of ground-breaking new products like msEndur II and others soon to follow supporting solid top line performance, we are confident of executing on our plan to return C&D Technologies to profitability early in fiscal 2009 and of a strong year to follow."
Conference call:
C&D management will host a conference call to discuss these financial results on April 11, 2008 at 10 a.m. Eastern Daylight Time. Those parties interested in participating in the conference call via telephone should dial 706-679-4521 and enter conference ID number 42745249. A telephone replay of the conference call will begin immediately following the call and will be available through April 25, 2008 at midnight Eastern Daylight Time. To access the rebroadcast, please dial 800-642-1687 (706-645-9291 for international callers) and enter code 42745249. A webcast of the conference call will also be available at http://www.cdtechno.com.
About C&D Technologies:
C&D Technologies, Inc. provides solutions and services for the switchgear and control (Utility), telecommunications, and uninterruptible power supply (UPS Applications). C&D Technologies engineers, manufactures, sells and services fully integrated reserve power systems for regulating and monitoring power flow and providing backup power in the event of primary power loss until the primary source can be restored. C&D Technologies' unique ability to offer complete systems, designed and produced to high technical standards, sets it apart from its competition. C&D Technologies is headquartered in Blue Bell, PA. For more information about C&D Technologies, visit www.cdtechno.com.
Forward-looking Statements:
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, 2008, or the quarterly and current reports filed on Form 10-Q and Form 8-K thereafter), could cause the company's actual results to differ materially from those expressed in any forward- looking statements made herein.
C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
January 31,
(Dollars in thousands, except par value)
2008 2007
ASSETS
Current assets:
Cash and cash equivalents $6,536 $5,384
Restricted cash $4,383 -
Accounts receivable, less allowance for
doubtful accounts of $1,148 in 2008 and
$1,203 in 2007 62,946 55,397
Inventories 85,832 53,172
Deferred income taxes - 134
Prepaid taxes 800 2,634
Other current assets 835 6,121
Assets held for sale 450 132,878
Total current assets 161,782 255,720
Property, plant and equipment, net 79,782 80,460
Deferred income taxes 32 531
Intangible and other assets, net 16,091 15,543
Goodwill 59,870 59,733
TOTAL ASSETS $317,557 $411,987
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $5,568 $1,286
Accounts payable 51,382 40,282
Book overdrafts - 2,310
Accrued liabilities 15,593 13,708
Other current liabilities 9,767 28,983
Other current liabilities - 36,532
Total current liabilities 82,310 123,101
Deferred income taxes 10,020 9,155
Long-term debt 124,133 147,925
Other liabilities 20,568 28,591
Total liabilities 237,031 308,772
Commitments and contingencies
Minority interest 11,418 7,548
Stockholders' equity:
Common stock, $.01 par value, 75,000,000
shares authorized; 29,081,110 and 29,040,960
shares issued in 2008 and 2007, respectively 291 290
Additional paid-in capital 74,995 74,188
Treasury stock, at cost, 3,414,633 and
3,391,536 shares in 2008 and 2007, respectively (47,243) (47,110)
Accumulated other comprehensive (loss) income (24,270) (13,952)
Retained earnings 65,335 82,251
Total stockholders' equity 69,108 95,667
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $317,557 $411,987
C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, per share amounts)
Three months ended
January 31, Year ended
(unaudited) January 31,
2008 2007 2008 2007
NET SALES $94,487 $76,784 $346,073 $287,241
COST OF SALES 87,150 73,715 310,089 249,385
GROSS PROFIT 7,337 3,069 35,984 37,856
OPERATING EXPENSES:
Selling, general and
administrative expenses 9,756 9,247 35,576 33,228
Research and development expenses 1,484 1,349 6,433 6,232
Gain on sale of China plant - - (15,162) -
OPERATING INCOME (LOSS) FROM
CONTINUING OPERATIONS (3,903) (7,527) 9,137 (1,604)
Interest expense, net 2,056 3,210 8,246 11,260
Other (income) expense, net 1,199 418 (921) 1,393
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES AND
MINORITY INTEREST (7,158) (11,155) 1,812 (14,257)
(Benefit) provision for income taxes
from continuing operations (218) 1,421 1,063 919
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE MINORITY INTEREST (6,940) (12,576) 749 (15,176)
Minority interest (741) (902) 2,931 (1,273)
LOSS FROM CONTINUING OPERATIONS (6,199) (11,674) (2,182) (13,903)
LOSS FROM DISCONTINUED OPERATIONS
BEFORE INCOME TAXES (4,527) (2,945) (15,091) (25,652)
Provision for income taxes from
discontinued operations (441) (327) 1,262 3,175
LOSS FROM DISCONTINUED OPERATIONS (4,086) (2,618) (16,353) (28,827)
NET (LOSS) INCOME (10,285) (14,292) (18,535) (42,730)
Basic and Diluted:
Net loss per common share -
continuing operations ($0.24) ($0.45) ($0.09) ($0.54)
Net loss per common share -
discontinued operations ($0.16) ($0.10) ($0.63) ($1.13)
Net loss ($0.40) ($0.55) ($0.72) ($1.67)
Dividends per share - - - $0.01375
C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended January 31,
(Dollars in thousands)
2008 2007
Cash flows from operating activities:
Net loss $(18,535) $(42,730)
Net loss from discontinued operations (16,353) (28,827)
Net loss from continuing operations (2,182) (13,903)
Adjustments to reconcile net loss to net
cash (used in) provided by operating
activities:
Minority interest 2,931 (1,273)
Stock options issued and restricted
stock expense 572 225
Depreciation and amortization 10,913 11,405
Amortization of debt acquisition costs 1,629 2,207
Impairment of fixed assets - 985
Deferred income taxes 670 1,212
(Gain) loss on disposal of assets (15,254) 29
Annual retainer to Board of Directors
paid by the issuance of common stock 237 224
Changes in assets and liabilities, net of
effects from businesses acquired:
Accounts receivable (9,452) (11,521)
Inventories (30,951) 3,503
Other current assets (254) (430)
Accounts payable 6,895 11,598
Accrued liabilities 962 (2,068)
Income taxes payable 1,899 4,348
Other current liabilities 2,795 (1,855)
Other liabilities 4,106 3,557
Funds provided to discontinued operations (24,288) (24,913)
Other long-term assets 227 153
Other, net (5,599) (681)
Net cash (used in) provided by
continuing operating activities (54,144) (17,198)
Net cash (used in) provided by
discontinued operating activities (1,043) 7,001
Net cash (used in) provided by
operating activities (55,187) (10,197)
Cash flows from investing activities:
Proceeds from sale of businesses 88,100 -
Acquisition of property, plant and
equipment (7,611) (21,261)
Proceeds from disposal of property,
plant and equipment 2,250 1,658
Increase in restricted cash (4,383) -
Net cash (used in) provided by
continuing investing activities 78,356 (19,603)
Net cash (used in) provided by
discontinued investing activities (504) (4,057)
Net cash (used in) provided by investing
activities 77,852 (23,660)
Cash flows from financing activities:
Repayment of debt (24,175) (49,596)
Proceeds from new borrowings 3,993 72,480
Increase (decrease) in book overdrafts (2,310) 2,239
Financing cost of long term debt (585) (3,326)
Proceeds from issuance of common stock, net - 1,210
Purchase of treasury stock (134) (122)
Common stock dividends paid - (352)
Net cash provided by (used in) continuing
financing activities (23,211) 22,533
Net cash provided by (used in)
discontinued financing activities (5,212) (1,446)
Net cash provided by (used in)
financing activities (28,423) 21,087
Effect of exchange rate changes on cash
and cash equivalents 151 365
(Decrease) increase in cash and cash
equivalents 1,152 (13,903)
Cash and cash equivalents, beginning of
fiscal year 5,384 19,287
Cash and cash equivalents, end of
fiscal year $6,536 $5,384
SOURCE C&D Technologies, Inc.
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