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 quarterly period ended October 31, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________________ to ____________________ Commission File No. 1-9389 C&D TECHNOLOGIES, INC. (Exact name of Registrant as specified in its charter) Delaware 13-3314599 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1400 Union Meeting Road Blue Bell, Pennsylvania 19422 (Address of principal executive office) (Zip Code) (215) 619-2700 (Registrant's telephone number, including area code) _____________________________________ (Former name, former address and former fiscal year, if changed since last report) Indicate by 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_____ Number of shares of the Registrant's Common Stock outstanding on December 7, 2000: 26,286,612 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES INDEX PART I. FINANCIAL INFORMATION Page No. Item 1 - Financial Statements Consolidated Balance Sheets - October 31, 2000 and January 31, 2000.................. 3 Consolidated Statements of Income - Three and Nine Months Ended October 31, 2000 and 1999............ 5 Consolidated Statements of Cash Flows - Nine Months Ended October 31, 2000 and 1999............ 6 Consolidated Statements of Comprehensive Income - Three and Nine Months Ended October 31, 2000 and 1999.. 8 Notes to Consolidated Financial Statements.............. 9 Report of Independent Accountants....................... 18 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations....... 19 PART II. OTHER INFORMATION..................................... 26 SIGNATURES..................................................... 27 2 PART I. FINANCIAL INFORMATION Item 1 - Financial Statements C&D TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share data) (Unaudited) October 31, January 31, 2000 2000 ---- ---- ASSETS Current assets: Cash and cash equivalents................. $ 5,696 $ 7,121 Accounts receivable, less allowance for doubtful accounts of $3,791 and $3,080, respectively................. 89,037 76,161 Inventories............................... 68,394 60,965 Deferred income taxes..................... 10,158 10,158 Other current assets...................... 1,539 1,256 ------- ------- Total current assets........... 174,824 155,661 Property, plant and equipment, net.............. 114,629 100,813 Deferred income taxes........................... 1,079 803 Intangible and other assets, net................ 21,251 22,692 Goodwill, net................................... 71,169 74,146 ------- ------- Total assets................... $382,952 $354,115 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term debt........................... $ 16,782 $ 20,393 Accounts payable.......................... 36,149 36,680 Accrued liabilities....................... 36,010 26,996 Income taxes.............................. - 2,018 Other current liabilities................. 5,136 4,495 ------- ------- Total current liabilities...... 94,077 90,582 Long-term debt.................................. 59,168 76,459 Other liabilities............................... 20,227 20,663 ------- ------- Total liabilities.............. 173,472 187,704 ------- ------- The accompanying notes are an integral part of these statements. 3 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (continued) (Dollars in thousands, except per share data) (Unaudited) October 31, January 31, 2000 2000 ---- ---- Commitments and contingencies Minority interest................................. 6,043 4,345 Stockholders' equity: Common stock, $.01 par value, 75,000,000 shares authorized; 28,235,683 and 27,867,480 shares issued, respectively*........................... 282 279 Additional paid-in capital*................. 62,086 53,829 Treasury stock, at cost, 1,911,990 and 1,810,204 shares, respectively*......... (14,609) (10,819) Accumulated other comprehensive loss........ (1,822) (617) Retained earnings........................... 157,500 119,394 ------- ------- Total stockholders' equity....... 203,437 162,066 ------- ------- Total liabilities and stockholders' equity........... $382,952 $354,115 ======= ======= * Adjusted to reflect the Company's June 16, 2000 two-for-one stock split, effected in the form of a 100% stock dividend. The accompanying notes are an integral part of these statements. 4 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share data) (Unaudited) (Unaudited) Three months ended Nine months ended October 31, October 31, 2000 1999 2000 1999 ---- ---- ---- ---- Net sales............................ $155,409 $126,843 $435,453 $338,273 Cost of sales........................ 109,998 93,571 307,792 248,769 ------- ------- ------- ------- Gross profit..................... 45,411 33,272 127,661 89,504 Selling, general and administrative expenses.......... 16,353 15,156 49,605 43,975 Research and development expenses......................... 2,514 2,232 7,522 6,718 ------- ------- ------- ------- Operating income................. 26,544 15,884 70,534 38,811 Interest expense, net................ 1,215 2,411 4,679 5,786 Other (income) expense, net.......... (29) (208) 121 - ------- ------- ------- ------- Income before income taxes and minority interest............. 25,358 13,681 65,734 33,025 Provision for income taxes........... 9,746 5,189 24,847 12,153 ------- ------- ------- ------- Net income before minority interest...................... 15,612 8,492 40,887 20,872 Minority interest.................... 867 286 1,698 286 ------- ------- ------- ------- Net income....................... $ 14,745 $ 8,206 $ 39,189 $ 20,586 ======= ======= ======= ======= Net income per common share*......... $ 0.56 $ 0.32 $ 1.50 $ 0.81 ======= ======= ======= ======= Net income per common share - assuming dilution*............... $ 0.54 $ 0.31 $ 1.44 $ 0.79 ======= ======= ======= ======= Dividends per share*................. $ .01375 $ .01375 $ .04125 $ .04125 ======= ======= ======= ======= * Per share amounts have been adjusted to reflect the Company's June 16, 2000 two-for-one stock split, effected in the form of a 100% stock dividend. The accompanying notes are an integral part of these statements. 5 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited) Nine months ended October 31, 2000 1999 ---- ---- Cash flows provided (used) by operating activities: Net income...................................... $ 39,189 $ 20,586 Adjustments to reconcile net income to net cash provided by operating activities: Minority interest......................... 1,698 286 Depreciation and amortization............. 19,488 16,207 Deferred income taxes..................... (276) 690 Loss on disposal of assets................ 593 646 Changes in: Accounts receivable................. (14,103) (16,994) Inventories......................... (8,142) 1,388 Other current assets................ 263 429 Accounts payable.................... (352) 5,226 Accrued liabilities................. 9,576 6,312 Income taxes payable................ 1,557 1,848 Other current liabilities........... 641 886 Other liabilities................... (434) 3,052 Other, net................................ 1,054 305 -------- -------- Net cash provided by operating activities........... 50,752 40,867 -------- -------- Cash flows provided (used) by investing activities: Acquisition of businesses, net.................. - (134,829) Acquisition of property, plant and equipment.... (29,406) (10,762) Proceeds from disposal of property, plant and equipment................................ 154 25 -------- -------- Net cash used by investing activities............... (29,252) (145,566) -------- -------- Cash flows provided (used) by financing activities: Repayment of debt............................... (22,364) (7,913) Proceeds from new borrowings.................... 1,200 113,499 Financing costs of long-term debt............... (244) (2,749) Proceeds from issuance of common stock, net..... 3,935 4,586 Purchase of treasury stock...................... (3,790) - Payment of common stock dividends............... (1,443) (1,396) -------- -------- The accompanying notes are an integral part of these statements. 6 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (Dollars in thousands) (Unaudited) Nine months ended October 31, 2000 1999 ---- ---- Net cash (used) provided by financing activities........................... (22,706) 106,027 -------- -------- Effect of exchange rate changes on cash........... (219) 59 -------- -------- (Decrease) increase in cash and cash equivalents.. (1,425) 1,387 Cash and cash equivalents at beginning of period...................................... 7,121 5,003 -------- -------- Cash and cash equivalents at end of period........ $ 5,696 $ 6,390 ======== ======== SCHEDULE OF NONCASH INVESTING AND FINANCIAL ACTIVITIES Acquired businesses Estimated fair value of assets acquired ...... $ - $ 79,404 Goodwill...................................... - 66,142 Identifiable intangible assets................ - 17,840 Cash paid, net of cash acquired............... - (134,829) -------- -------- Liabilities assumed........................... $ - $ 28,557 ======== ======== The accompanying notes are an integral part of these statements. 7 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Dollars in thousands) (Unaudited) (Unaudited) Three months ended Nine months ended October 31, October 31, 2000 1999 2000 1999 ---- ---- ---- ---- Net income....................... $14,745 $8,206 $39,189 $20,586 Other comprehensive (loss) income, net of tax: Foreign currency translation adjustments... (562) 208 (1,205) (19) ------ ----- ------ ------ Total comprehensive income....... $14,183 $8,414 $37,984 $20,567 ====== ===== ====== ====== The accompanying notes are an integral part of these statements. 8 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share data) (UNAUDITED) 1. INTERIM STATEMENTS The accompanying interim consolidated financial statements of C&D Technologies, Inc. (together with its operating subsidiaries, the "Company") should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company's Annual Report to Stockholders for the fiscal year ended January 31, 2000. The January 31, 2000 amounts were derived from the Company's audited financial statements. The consolidated financial statements presented herein are unaudited but, in the opinion of management, include all necessary adjustments (which comprise only normal recurring items) required for a fair presentation of the consolidated financial position as of October 31, 2000 and the related consolidated statements of income and comprehensive income for each of the three and nine month periods ended October 31, 2000 and 1999 and the related consolidated statement of cash flows for the nine month periods ended October 31, 2000 and 1999. However, interim results of operations may not be indicative of results for the full fiscal year. 2. STOCK SPLIT On June 16, 2000 the Company completed a two-for-one stock split, effected in the form of a 100% stock dividend to stockholders of record on June 2, 2000. This transaction resulted in a transfer on the Company's balance sheet of $140 to common stock from additional paid-in capital. The accompanying financial statements and related footnotes, including all share and per share amounts, have been adjusted to reflect this transaction. 3. ACQUISITION Effective March 1, 1999, the Company acquired substantially all of the assets of the Specialty Battery Division of Johnson Controls, Inc. ("JCI"), including, without limitation, certain assets of Johnson Controls Technology Company, a wholly owned subsidiary of JCI, and 100 percent of the ordinary shares of Johnson Controls Battery (U.K.) Limited, an indirect wholly owned subsidiary of JCI. In consideration of the assets acquired, the Company paid approximately $120,000, plus additional acquisition related costs, subject to certain adjustments as set forth in the purchase agreement. In addition, the Company assumed certain liabilities of the seller. The Specialty Battery Division was engaged in the business of designing, manufacturing, marketing and distributing industrial batteries. The Company continues to use the assets acquired in such business. The source of the funds for the acquisition was advances under a credit agreement consisting of a term loan in the amount of $100,000 and a revolving loan not to exceed $120,000 which includes a letter of credit facility not to exceed $30,000 and swingline loans not to exceed $10,000. On August 2, 1999 the Company completed the acquisition of JCI's 67 percent ownership interest in a joint venture battery business in Shanghai, China for $15,000 in cash. The joint venture manufactures, markets and distributes industrial batteries. The Company has continued the joint venture operations in such business. The cash portion of the acquisition was financed by the Company's revolving credit facility. For reporting purposes, the acquisition of the Specialty Battery Division and JCI's 67 percent ownership interest in the joint venture battery business in Shanghai, China have collectively been re-named the Dynasty Division. The Dynasty acquisition was accounted for using the purchase method of accounting. The results of the joint venture have been consolidated in the financial statements and related notes. 9 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share data) (UNAUDITED) 3. ACQUISITION (continued) The following unaudited pro forma financial information combines the consolidated results of operations as if the acquisition of the Specialty Battery Division (including the interest in the joint venture in Shanghai, China which was completed on August 2, 1999) had occurred as of the beginning of the period presented. Pro forma adjustments include only the effects of events directly attributed to transactions that are factually supportable and expected to have a continuing impact. The pro forma adjustments contained in the table below include amortization of intangibles and goodwill, depreciation adjustments due to the write-up of property, plant and equipment to estimated fair market value, amortization of deferred debt costs and interest expense on the acquisition debt and working capital management fees, which will not continue, and the related income tax effects. Nine months ended October 31, 1999: Net sales.......................... $353,369 Net income......................... $ 20,453 Net income per common share*....... $ 0.81 Net income per common share - assuming dilution*............ $ 0.79 * Per share amounts have been adjusted to reflect the Company's June 16, 2000 two-for-one stock split, effected in the form of a 100% stock dividend. The pro forma financial information does not necessarily reflect the operating results that would have occurred had the acquisitions been consummated as of the above dates, nor is such information indicative of future operating results. In addition, the pro forma financial results contain estimates since the acquired businesses did not maintain information on a period comparable with the Company's fiscal year-end. 4. INVENTORIES Inventories consisted of the following: October 31, January 31, 2000 2000 ---- ---- Raw materials............................ $29,940 $28,522 Work-in-progress......................... 19,156 14,602 Finished goods........................... 19,298 17,841 ------ ------ $68,394 $60,965 ====== ====== 10 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share data) (UNAUDITED) 5. INCOME TAXES A reconciliation of the provision for income taxes from the statutory rate to the effective rate is as follows: Nine months ended October 31, 2000 1999 ---- ---- U.S. statutory income tax....................... 35.0% 35.0% State tax, net of federal income tax benefit.... 3.3 2.9 Foreign sales corporation....................... (0.3) (0.4) Tax effect of foreign operations................ - (0.4) Research and development credit................. (0.4) (0.6) Other........................................... 0.2 0.3 ---- ---- 37.8% 36.8% ==== ==== 6. NET INCOME PER COMMON SHARE Net income per common share for the three and nine months ended October 31, 2000 and 1999 is based on the weighted average number of shares of Common Stock outstanding. Net income per common share - assuming dilution reflects the potential dilution that could occur if stock options were exercised. Weighted average common shares and common shares - assuming dilution were as follows: Three months ended Nine months ended October 31, October 31, 2000 1999 2000 1999 ---- ---- ---- ---- Weighted average shares of common stock outstanding*.............. 26,227,774 25,717,576 26,199,028 25,386,806 Assumed exercise of stock options, net of shares assumed reacquired*....... 1,196,027 511,314 1,040,937 579,750 ---------- ---------- ---------- ---------- Weighted average common shares - assuming dilution*................. 27,423,801 26,228,890 27,239,965 25,966,556 ========== ========== ========== ========== * Share amounts have been adjusted to reflect the Company's June 16, 2000 two-for-one stock split, effected in the form of a 100% stock dividend, where appropriate. 11 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share data) (UNAUDITED) 7. CONTINGENT LIABILITIES With regard to the following contingent liabilities, there have been no material changes since January 31, 2000. Legal: In January 2000, the Company was sued in an action captioned PUERTO RICO ELECTRIC POWER AUTHORITY V. C&D TECHNOLOGIES, INC., Case No. 00-1104 in the United States District Court for the District of Puerto Rico for an alleged breach of contract in connection with the sale of certain batteries dating back to the mid-1990's. In August 2000 the Company entered into a settlement agreement with respect to this claim, which was consumated in November 2000. Environmental: The Company is subject to extensive and evolving environmental laws and regulations regarding the clean-up and protection of the environment, worker health and safety and the protection of third parties. These laws and regulations include, but are not limited to: (i) requirements relating to the handling, storage, use and disposal of lead, other hazardous materials used in manufacturing processes and solid wastes; (ii) record keeping and periodic reporting to governmental entities regarding the use of hazardous substances and disposal of hazardous wastes; (iii) monitoring and permitting of air and water emissions; and (iv) monitoring and protecting workers from unpermitted exposure to hazardous substances, including lead used in our manufacturing processes. Notwithstanding such compliance, if injury or damage to persons or the environment has been or is caused by hazardous substances used, generated or disposed of in the conduct of the Company's business (or that of a predecessor to the extent the Company is not indemnified therefor), the Company may be held liable for the damage and be required to pay the cost of investigating and remedying the same, and the amount of any such liability could be material to the results of operations or financial condition. However, under the terms of the purchase agreement with Allied Corporation ("Allied") for the acquisition of the Company (the "Acquisition Agreement"), Allied is obligated to indemnify the Company for any liabilities of this type resulting from conditions existing at January 28, 1986 that were not disclosed by Allied to the Company in the schedules to the Acquisition Agreement. The Company, along with numerous other parties, has been requested to provide information to the United States Environmental Protection Agency (the "EPA") in connection with investigations of the source and extent of contamination at several lead smelting facilities (the "Third Party Facilities") to which the Company had made scrap lead shipments for reclamation prior to the date of the acquisition. In fiscal 1993 in accordance with an EPA order, a group comprised of the Company and 30 other parties commenced work on the clean-up of a portion of one of the Third Party Facilities, the former NL Industries facility in Pedricktown, New Jersey (the "NL Site"), based on a specified remedial approach which was completed during fiscal 1999. The Company did not incur costs in excess of the amount previously reserved. 12 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share data) (UNAUDITED) 7. CONTINGENT LIABILITIES (continued) With regard to the remainder of the NL Site, the Company and four other potentially responsible parties ("PRPs") have agreed upon a cost sharing arrangement for the design phase of the project. A reliable range of the potential cost to the Company for the ultimate remediation of the site cannot currently be determined, nor have all PRPs been identified. Accordingly, the Company has not established a reserve for this potential exposure. The remedial investigation and feasibility study at a second Third Party Facility, the former Tonolli Incorporated facility, at Nesquehoning, Pennsylvania (the "Tonolli Site"), was completed in fiscal 1993. The Company and the other PRPs initiated and completed remedial action at the site in fiscal 1999. The Company believes its only remaining liability relates to long-term monitoring at the site, the cost of which is estimated to be an immaterial amount for which the Company has established an adequate reserve. The Company responded to requests for information from the EPA and the state environmental agency with regard to another Third Party Facility, the "Chicago Site", in October 1991. Based on currently available information, the Company believes that the potential cost of the remediation at the Chicago Site is likely to range between $8,000 and $10,500 (based on the preliminary estimated cost of the remediation approach negotiated with the EPA). Sufficient information is not available to determine the Company's allocable share of this cost. Based on currently available information, however, the Company believes that its most likely exposure with respect to the Chicago Site will be the approximately $283 previously reserved, the majority of which is expected to be paid over the next two to five years. Allied has accepted responsibility under the Acquisition Agreement for potential liabilities relating to all Third Party Facilities other than the aforementioned Sites. The Company is also aware of the existence of potential contamination at two of its properties which may require expenditures for further investigation and remediation. At the Company's Huguenot, New York facility, fluoride contamination in an inactive lagoon, exceeding the state's groundwater standards, which existed prior to the Company's acquisition of the site, has resulted in the site being listed on the registry of inactive hazardous waste disposal sites maintained by the New York State Department of Environmental Conservation. The prior owner of the site ultimately may bear some, as yet undetermined, share of the costs associated therewith. The Company has established what it believes to be an adequate reserve for all but the remediation costs, the extent of which are not known, as a remediation plan has not yet been approved by the State of New York. The Company's Conyers, Georgia facility is listed on the Georgia State Hazardous Sites Inventory. Soil at the site, which was likely contaminated from a leaking underground acid neutralization tank and possibly storm water runoff, has been excavated and disposed. A hydrogeologic study was undertaken to assess the impact to groundwater. That study did not reveal any groundwater impact, and 13 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share data) (UNAUDITED) 7. CONTINGENT LIABILITIES (continued) assessment and remediation of off-site contamination has been completed. The full remediation report was submitted to the state on February 22, 1999, and the Company has responded to subsequent inquiries from the state environmental agency. The state environmental agency may request further information and additional investigation or remediation may be necessary before the site is removed from its Hazardous Sites Inventory. The Company, together with JCI, is conducting an assessment and remediation of contamination at our Dynasty Division facility site in Milwaukee, Wisconsin. The majority of this project is expected to be completed in fiscal 2002. Under the purchase agreement with JCI, the Company is responsible for (i) one-half of the cost of the assessment and remediation, with a cap of $1,750, (ii) any environmental liabilities at the facility which are not remediated as part of the current project and (iii) environmental liabilities for claims made after the fifth anniversary of the closing that arise from migration from a pre-closing condition at the facility to locations other than the facility, but specifically excluding liabilities relating to pre-closing offsite disposal. JCI has retained all other environmental liabilities. In January 1999, the Company received notification from the EPA of alleged violations of permit effluent and pretreatment discharge limits at its plant in Attica, Indiana. The Company submitted a compliance plan to the EPA. A penalty assessment could be made, however, the amount of such assessment, if any, has not been communicated to the Company by the EPA. The Company accrues reserves for liabilities in the Company's consolidated financial statements and periodically reevaluates the reserved amounts for these liabilities in view of the most current information available. Based on currently available information, management of the Company believes that the foregoing contingent liabilities will not have a material adverse effect on the Company's business, financial condition or results of operations. 8. NEW ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities." In June 2000, SFAS No. 138 was issued which includes several amendments to SFAS No. 133. The new standard is effective for all fiscal quarters of all fiscal years beginning after June 15, 2000. The Company will adopt SFAS No. 133, including the amendments in SFAS No. 138, on February 1, 2001. The new standard requires that all derivative instruments be reported on the balance sheet at their fair values. For derivative instruments designated as fair value hedges, changes in the fair value of the derivative instrument will generally be offset on the income statement by changes in the fair value of the hedged item. For derivative instruments designated as cash flow hedges, the effective portion of any hedge is reported in other comprehensive income until it is cleared to earnings during 14 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share data) (UNAUDITED) 8. NEW ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED (continued) the same period in which the hedged item affects earnings. The ineffective portion of all hedges will be recognized in current earnings each period. Changes in the fair value of derivative instruments that are not designated as a hedge will be recorded each period in current earnings. Using market valuations for derivatives held as of October 31, 2000, as a guide, the Company estimates that on February 1, 2001, the net of tax cumulative-effect adjustment to net income and accumulated other comprehensive loss will not be material. Any changes in the composition of the Company's derivative instrument portfolio or changes in the market values of these instruments between now and the end of fiscal 2001 could have an impact on the cumulative-effect adjustment to net income and accumulated other comprehensive loss. At this time, the Company plans no significant change in its risk management strategies due to the adoption of SFAS No. 133. In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial Statements." This SAB summarizes certain of the staff's views in applying generally accepted accounting principles to selected revenue recognition issues. Accordingly, guidance is provided with respect to the recognition, presentation, and disclosure of revenue in the financial statements. Adoption of SAB No. 101, as amended by SAB No. 101A, "Amendment: Revenue Recognition in Financial Statements" and SAB No. 101B, "Second Amendment: Revenue Recognition in Financial Statements" is no later than the fourth quarter of fiscal years beginning after December 15, 1999. The Company has evaluated the impact of the implementation of these SABs and believes that the impact will not be material. Recently, the FASB's Emerging Issue Task Force ("EITF") released Issue 00-10, "Accounting for Shipping and Handling Revenues and Costs," which requires amounts charged to customers for shipping and handling be classified as revenue. This EITF is applicable no later than the fourth quarter of fiscal years beginning after December 15, 1999. Since this EITF only relates to financial statement classification, the adoption of this EITF will not affect the Company's financial position or results of operations. 9. RESTRUCTURING CHARGE During the first quarter of fiscal 2000, the Company recorded a pre-tax charge of $1,627, or $.04 per share after tax (as adjusted for the Company's June 16, 2000 two-for-one stock split, effected in the form of a 100% stock dividend), primarily relating to the restructuring of the Power Electronics Division. Of this pre-tax charge, $1,251 is included in selling, general and administrative expenses with the remaining $376 included in cost of sales in the 15 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share data) (UNAUDITED) 9. RESTRUCTURING CHARGE (continued) accompanying consolidated statement of income for the nine months ended October 31, 1999. The restructuring charge consisted of estimated costs to close the Company's Costa Mesa, California power supply production facility as well as contractual severance liabilities associated with the non-renewal of the employment contracts of two of the Company's former officers. With respect to the closing of the Costa Mesa, California production facility, the Company implemented a restructuring plan that consisted of transferring production primarily to its existing facility in Nogales, Mexico. Major actions of the restructuring plan consisted of: (i) disposition of inventory; (ii) write-off of impaired property, plant and equipment that was not transferred to other facilities; and (iii) termination of Power Electronics' Costa Mesa, California work force. Restructuring activity for the nine months ended October 31, 2000 and 1999 was as follows: Balance at Balance at January 31, Cash Provision October 31, 2000 Reductions Reduction 2000 ---- ---------- --------- ---- Employee severance....... $256 $(195) $(61) - --- ---- --- --- Total.................... $256 $(195) $(61) - === ==== === === April Balance at 1999 Cash Non-Cash October 31, Provision Reductions Activity 1999 --------- ---------- -------- ---- Write-off of inventory... $ 376 - $(376) - Write-down of property, plant and equipment.... 355 - (355) - Employee severance....... 741 $(384) - $357 Other.................... 155 (136) - 19 ----- --- --- ---- Total.................... $1,627 $(520) $(731) $376 ===== ==== ==== ==== The $376 inventory write-off was determined based upon identification of inventory associated with discontinued products. This inventory was disposed of during the second quarter of fiscal 2000. The $355 write-down of impaired property, plant and equipment was determined based upon the estimated cost to completely write-down the net book value of assets not transferred to other facilities. The Company completed the disposition of the impaired property, plant and equipment during the third quarter of fiscal 2000. Employee severance of $741 was charged to selling, general and administrative expenses and provided for a reduction of approximately 50 employees, consisting of production and administrative employees of the Power Electronics' Costa Mesa, California facility, and two former officers of the Company. All Power Electronics employee terminations were completed by the end of the third quarter of fiscal 2000, with payments being made in accordance with contractual agreements through the second quarter of fiscal 2001. 16 C&D TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share data) (UNAUDITED) 10. OPERATIONS BY INDUSTRY SEGMENT The Company has identified the following four reportable business segments: The Powercom Division manufactures and markets integrated reserve power systems and components for the standby power market which includes telecommunications, uninterruptible power supplies and utilities. Integrated reserve power systems monitor and regulate electric power flow and provide backup power in the event of a primary power loss or interruption. The Powercom Division also produces the individual components of these systems, including reserve batteries, power rectifiers, system monitors, power boards and chargers. The Dynasty Division manufactures and markets industrial batteries primarily for the uninterruptible power supply, broadband cable and telecommunications markets. Major applications of these products include corporate data center powering and computer network back up for use during power utility outages, CATV signal powering and wireless and wireline telephone infrastructure. The Power Electronics Division manufactures and markets DC to DC converters for large original equipment manufacturers ("OEMs") of telecommunications equipment used in telecommunications and internet infrastructure applications. The division also manufactures and markets standard and custom power supplies used in office equipment. The Motive Power Division manufactures complete systems and individual components (including power electronics and batteries) to power, monitor, charge and test the batteries used in electric industrial vehicles, including fork-lift trucks, automated guided vehicles and airline ground support equipment. These products are marketed to end users in a broad array of industries, dealers of fork-lift trucks and other material handling vehicles, and, to a lesser extent, OEM's. Summarized financial information related to the Company's business segments for the three and nine months ended October 31, 2000 and 1999 is shown below: Power Motive Powercom Dynasty Electronics Power Division Division Division Division Consolidated -------- -------- ----------- -------- ------------ Three months ended October 31, 2000: Net sales................................. $65,590 $40,620 $30,832 $18,367 $155,409 Operating income (loss)................... $12,921 $10,538 $4,507 $(1,422) $26,544 Three months ended October 31, 1999: Net sales.................................. $58,118 $32,739 $16,251 $19,735 $126,843 Operating income (loss).................... $10,461 $5,500 $(589) $512 $15,884 Nine months ended October 31, 2000: Net sales................................. $190,865 $113,551 $75,029 $56,008 $435,453 Operating income (loss)................... $37,591 $26,759 $6,748 $(564) $70,534 Nine months ended October 31, 1999: Net sales.................................. $161,846 $75,933 $44,270 $56,224 $338,273 Operating income (loss).................... $28,248 $12,336 $(3,317) $1,544 $38,811 17 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Stockholders of C&D Technologies, Inc. We have reviewed the accompanying consolidated balance sheet of C&D Technologies, Inc. and Subsidiaries ("the Company") as of October 31, 2000 and the related consolidated statements of income and comprehensive income for each of the three and nine month periods ended October 31, 2000 and 1999, and the related consolidated statement of cash flows for the nine month periods ended October 31, 2000 and 1999. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated interim financial statements for them to be in conformity with accounting principles genrally accepted in the United States of America. We previously audited in accordance with generally accepted auditing standards, the consolidated balance sheet as of January 31, 2000 and the related consolidated statements of income, stockholders' equity, cash flows, and comprehensive income for the year then ended (not presented herein), and in our report dated March 10, 2000 we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of January 31, 2000, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived. /s/ PricewaterhouseCoopers LLP - ------------------------------ PRICEWATERHOUSECOOPERS LLP Philadelphia, Pennsylvania November 21, 2000 18 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Dollars in thousands, except per share data) Within the following discussion, unless otherwise stated, "quarter" and "nine-month period" refer to the third quarter of fiscal 2001 and the nine months ended October 31, 2000. All comparisons are with the corresponding periods in the previous year, unless otherwise stated. Effective March 1, 1999, C&D Technologies, Inc. (together with its operating subsidiaries, "we", "our" or "C&D") purchased substantially all of the assets of the Specialty Battery Division of Johnson Controls, Inc. ("JCI"), a designer, manufacturer, marketer and distributor of industrial batteries based in Milwaukee, Wisconsin. These assets included certain assets of Johnson Controls Technology Company, a wholly owned subsidiary of JCI and all of the ordinary shares of Johnson Controls Battery (U.K.) Limited, an indirect wholly owned subsidiary of JCI. In addition, on August 2, 1999 we completed the acquisition of JCI's 67 percent ownership interest of a joint venture battery business in Shanghai, China. The joint venture manufactures, markets and distributes industrial batteries. For reporting purposes, the acquisition of the Specialty Battery Division and JCI's 67 percent ownership interest in the joint venture battery business in Shanghai, China have collectively been re-named the Dynasty Division by C&D. As a result of the timing of the above acquisitions, the nine-month period ending October 31, 1999 does not include revenue or expenses for one month of the nine-month period with respect to our acquisition of the Special Battery Division of JCI and does not include revenue or expenses for six months of the nine-month period with respect to our acquisition of JCI's 67 percent ownership interest in a joint venture battery business in Shanghai, China. Net sales increased $28,566 or 23 percent for the quarter and $97,180 or 29 percent for the nine-month period. The increase in sales during the quarter was the result of higher sales by all divisions except for the Motive Power Division, which had a seven percent decrease in sales. The Power Electronics Division sales increased $14,581 or 90 percent during the quarter primarily as a result of higher DC to DC converter sales partially offset by lower sales of custom power supplies. Sales of the Dynasty Division increased $7,881 or 24 percent during the quarter primarily as a result of higher sales to the telecommunications and UPS markets. Powercom divisional sales increased $7,472 or 13 percent during the quarter, primarily due to higher sales to the telecommunications and UPS markets. The increase in sales during the nine-month period was also the result of higher sales by all divisions except for the Motive Power Division, which had a less than one percent decrease in sales. Sales of the Dynasty Division increased $37,618 or 50 percent during the nine-month period primarily as a result of higher sales to the UPS, telecommunications and CATV markets. A portion of this increase was due to the recording of a full nine months of sales by the Specialty Battery component of the Dynasty Division during the nine-month period ended October 31, 2000, compared to only eight months of sales in the first nine months of the 19 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) (Dollars in thousands, except per share data) comparable period of the prior year. Also contributing to the increase in Dynasty Division sales during the nine-month period was the recording of nine months of sales related to our 67 percent ownership interest in the joint venture battery business, compared to only three months in the same period of the prior year. Sales of the Power Electronics Division increased $30,759 or 69 percent during the nine-month period due to higher sales of DC to DC converters and standard power supplies, partially offset by lower sales of custom power supplies. Powercom Divisional sales increased $29,019 or 18 percent during the nine-month period, primarily due to higher sales to the telecommunications and UPS markets. Gross profit for the quarter increased $12,139 or 36 percent to $45,411 from $33,272 in the third quarter of the prior year, resulting in an increase in gross margin from 26.2 percent in the third quarter of the prior year to 29.2 percent in the third quarter of the current year. Gross profit for the nine-month period increased $38,157 or 43 percent to $127,661 from $89,504 in the comparable period of the prior year, resulting in an increase in gross margin from 26.5 percent in the first nine months of fiscal 2000 to 29.3 percent in the first nine months of the current year. Gross profit during the quarter and nine-month period was higher in the Power Electronics, Dynasty and Powercom divisions primarily due to the increased sales volumes. Gross profit of the Motive Power Division during the quarter and nine-month period decreased primarily as a result of manufacturing inefficiencies. Selling, general and administrative expenses for the quarter increased $1,197 or eight percent over the comparable quarter of the prior year. This increase was primarily due to higher variable selling costs associated with the increased sales volumes and higher bonus accruals. For the nine-month period, selling, general and administrative expenses increased $5,630 or 13 percent. The increase during the nine-month period was primarily due to: (i) higher variable selling costs associated with increased sales volumes; (ii) higher litigation settlement costs and bonus accruals; (iii) the recording of a full nine months of selling, general and administrative expenses during the nine-month period ended October 31, 2000 by the Specialty Battery component of the Dynasty Division, compared to only eight months in the prior year's nine-month period ended October 31, 1999; (iv) selling, general and administrative expenses recorded during the nine-month period of the current year related to our 67 percent ownership interest in the joint venture battery business which was acquired in the third quarter of the prior year; and (v) the absence in the current nine-month period of a restructuring charge, primarily related to the Power Electronics Division, which was recorded in the first nine months of the prior year. Research and development expenses for the quarter and nine-month period remained proportional to sales as a relative percentage compared to the same periods of the prior year at approximately two percent of sales. 20 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) (Dollars in thousands, except per share data) Operating income for the quarter increased $10,660 or 67 percent to $26,544 as a result of higher operating income generated by all divisions except the Motive Power Division, which generated an operating loss during the quarter, compared to operating income in the third quarter of the prior year. For the nine-month period, operating income increased $31,723 or 82 percent to $70,534. This increase was due to higher operating income generated by the Dynasty, Power Electronics and Powercom divisions, partially offset by an operating loss generated by the Motive Power Division. The Power Electronics Division generated operating income during the current nine-month period, compared to an operating loss in the first nine months of the prior year. Interest expense, net, decreased $1,196 in the quarter and $1,107 for the nine-month period primarily due to lower debt balances outstanding, coupled with higher capitalized interest resulting from our increased level of capital spending. Income tax expense increased $4,557 for the quarter and $12,694 for the nine-month period primarily as a result of higher income before income taxes and a higher effective tax rate. The effective tax rate consists of statutory rates adjusted for the tax impacts of our foreign sales corporation, research and development credits and foreign operations. The effective tax rate for the first nine months of fiscal 2001 increased to 37.8 percent from 36.8 percent in the comparable period of the prior year, primarily as a result of a higher effective state tax rate coupled with less tax benefit associated with foreign operations. Minority interest of $867 for the quarter and $1,698 for the first nine months of fiscal 2001 reflects the 33 percent ownership of the joint venture battery business located in Shanghai, China that is not owned by C&D. As a result of the above, net income increased $6,539 for the quarter to $14,745 or 56 cents per common share - basic and 54 cents per common share - assuming dilution. For the nine-month period, net income increased $18,603 to $39,189 or $1.50 per common share - basic and $1.44 per common share - assuming dilution. The above per share amounts reflect our June 16, 2000 two-for-one stock split, effected in the form of a 100 percent stock dividend. 21 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) (Dollars in thousands, except per share data) RESTRUCTURING CHARGE During the first quarter of fiscal 2000, we recorded a pre-tax charge of $1,627, or $.04 per share after tax (as adjusted for our June 16, 2000 two-for-one stock split, effected in the form of a 100% stock dividend), primarily relating to the restructuring of the Power Electronics Division. Of this pre-tax charge, $1,251 is included in selling, general and administrative expenses with the remaining $376 included in cost of sales in the accompanying consolidated statement of income for the nine months ended October 31, 1999. The restructuring charge consisted of estimated costs to close our Costa Mesa, California power supply production facility as well as contractual severance liabilities associated with the non-renewal of the employment contracts of two of our former officers. With respect to the closing of the Costa Mesa, California production facility, we implemented a restructuring plan that consisted of transferring production primarily to our existing facility in Nogales, Mexico. Major actions of the restructuring plan consisted of: (i) disposition of inventory; (ii) write-off of impaired property, plant and equipment that was not transferred to other facilities; and (iii) termination of Power Electronics' Costa Mesa, California work force. Restructuring activity for the nine months ended October 31, 2000 and 1999 was as follows: Balance at Balance at January 31, Cash Provision October 31, 2000 Reductions Reduction 2000 ---- ---------- --------- ---- Employee severance....... $256 $(195) $(61) - --- ---- --- --- Total.................... $256 $(195) $(61) - === ==== === === April Balance at 1999 Cash Non-Cash October 31, Provision Reductions Activity 1999 --------- ---------- -------- ---- Write-off of inventory... $ 376 - $(376) - Write-down of property, plant and equipment.... 355 - (355) - Employee severance....... 741 $(384) - $357 Other.................... 155 (136) - 19 ----- ---- ---- --- Total.................... $1,627 $(520) $(731) $376 ===== ==== ==== === The $376 inventory write-off was determined based upon identification of inventory associated with discontinued products. This inventory was disposed of during the second quarter of fiscal 2000. The $355 write-down of impaired property, plant and equipment was determined based upon the estimated cost to completely write-down the net book value of assets not transferred to other facilities. We completed the disposition of the impaired property, plant and equipment during the third quarter of fiscal 2000. Employee severance of $741 was charged to selling, general and administrative expenses and provided for a 22 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) (Dollars in thousands, except per share data) reduction of approximately 50 employees, consisting of production and administrative employees of the Power Electronics' Costa Mesa, California facility, and two former officers of the Company. All Power Electronics employee terminations were completed by the end of the third quarter of fiscal 2000, with payments being made in accordance with contractual agreements through the second quarter of fiscal 2001. LIQUIDITY AND CAPITAL RESOURCES Net cash provided by operating activities increased $9,885 or 24 percent to $50,752 for the nine-month period ended October 31, 2000 compared to $40,867 for the comparable period of the prior year. This increase in net cash provided by operating activities was primarily due to: (i) an increase in net income and depreciation during the nine-month period; (ii) a smaller increase in accounts receivable in the first nine months of the current year compared to the same period of the prior year; and (iii) a larger increase in accrued liabilities in the current nine-month period than the prior year. These changes resulting in higher net cash provided by operating activities were partially offset by an increase in inventories during the nine-month period ended October 31, 2000 versus a decrease in the comparable period of the prior year coupled with a decrease in accounts payable and other liabilities during the first nine months of the current year versus an increase in the comparable period of the prior year. Net cash used by investing activities totaled $29,252 in the first nine months of fiscal 2001, resulting in a decrease of $116,314 versus the same period of the prior year which included the acquisition of the Specialty Battery Division of JCI. Acquisition of property, plant and equipment during the nine-month period ended October 31, 2000 increased $18,644 or 173 percent over the comparable period of the prior year. Net cash used by financing activities was $22,706 for the first nine months of fiscal 2001 compared to net cash provided by financing activities of $106,027 in the comparable period of the prior year. The proceeds from new borrowings in the prior year's first nine months were used primarily for the funding the acquisition of the Specialty Battery Division of JCI. Net cash used for financing activities during the first nine months of fiscal 2001 includes the purchase of $3,790 of treasury stock. The availability under our current loan agreement is expected to be sufficient to meet our ongoing cash needs for working capital requirements, debt service, capital expenditures and possible strategic acquisitions. Capital expenditures during the first nine months of fiscal 2001 were incurred primarily to fund capacity expansion, new product development, a continuing series of cost reduction programs, normal maintenance capital, and regulatory compliance. Fiscal 2001 capital expenditures are expected to be approximately $45,000 for similar purposes. 23 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) (Dollars in thousands, except per share data) NEW ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities." In June 2000, SFAS No. 138 was issued which includes several amendments to SFAS No. 133. The new standard is effective for all fiscal quarters of all fiscal years beginning after June 15, 2000. C&D will adopt SFAS No. 133, including the amendments in SFAS No. 138, on February 1, 2001. The new standard requires that all derivative instruments be reported on the balance sheet at their fair values. For derivative instruments designated as fair value hedges, changes in the fair value of the derivative instrument will generally be offset on the income statement by changes in the fair value of the hedged item. For derivative instruments designated as cash flow hedges, the effective portion of any hedge is reported in other comprehensive income until it is cleared to earnings during the same period in which the hedged item affects earnings. The ineffective portion of all hedges will be recognized in current earnings each period. Changes in the fair value of derivative instruments that are not designated as a hedge will be recorded each period in current earnings. Using market valuations for derivatives held as of October 31, 2000, as a guide, we estimate that on February 1, 2001, the cumulative-effect adjustment to net income and accumulated other comprehensive loss will not be material. Any changes in the composition of our derivative instrument portfolio or changes in the market values of these instruments between now and the end of fiscal 2001 could have an impact on the cumulative-effect adjustment to net income and accumulated other comprehensive loss. At this time, we plan no significant change in our risk management strategies due to the adoption of SFAS No. 133. In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial Statements." This SAB summarizes certain of the staff's views in applying generally accepted accounting principles to selected revenue recognition issues. Accordingly, guidance is provided with respect to the recognition, presentation, and disclosure of revenue in the financial statements. Adoption of SAB No. 101, as amended by SAB No. 101A, "Amendment: Revenue Recognition in Financial Statements" and SAB No. 101B, "Second Amendment: Revenue Recognition in Financial Statements" is no later than the fourth fiscal quarter of fiscal years beginning after December 15, 1999. We have evaluated the impact of the implementation of these SABs and believe that the impact will not be material. Recently, the FASB's Emerging Issue Task Force ("EITF") released Issue 00-10, "Accounting for Shipping and Handling Revenues and Costs," which requires amounts charged to customers for shipping and handling be classified as revenue. This EITF is applicable no later than the fourth quarter of fiscal years beginning after December 15, 1999. Since this EITF only relates to financial statement classification, the adoption of this EITF will not affect our financial position or results of operations. 24 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) (Dollars in thousands, except per share data) FORWARD-LOOKING STATEMENTS Certain information contained in this Quarterly Report on Form 10-Q, including, without limitation, information appearing under Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," are 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, also known as the Private Securities Litigation Reform Act of 1995). 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. These statements are made on the basis of management's views and assumptions, as of the time the statements are made, regarding future events and business performance. There can be no assurance, however, that management's expectations will necessarily come to pass. A number of factors could materially affect future developments and performance. Factors that appear with the forward-looking statements, or in the Company's other Securities and Exchange Commission filings, could cause our actual results to differ materially from those expressed in any forward-looking statements made by C&D in this Quarterly Report on Form 10-Q. 25 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits 10.1 Fourth Amendment dated October 13, 2000 to our Credit Agreement dated as of March 1, 1999 among C&D as borrower, certain subsidiaries and affiliates of C&D as guarantor, the lenders therein and Bank of America as administrative agent (filed herewith). 10.2 Fifth Amendment dated October 13, 2000 to our Credit Agreement dated as of March 1, 1999 among C&D as borrower, certain subsidiaries and affiliates of C&D as guarantor, the lenders therein and Bank of America as administrative agent (filed herewith). 10.3 Employment Agreement dated November 28, 2000 between Wade H. Roberts, Jr. and C&D (filed herewith). 10.4 Third Amendment dated November 28, 2000 to our Savings Plan (filed herwith). 10.5 Seventh Amendment dated November 29, 2000 to our Pension Plan for Salaried Employees (filed herewith). 15. Letter from PricewaterhouseCoopers LLP, independent accountants for C&D, regarding unaudited interim financial information (filed herewith). 27. Financial Data Schedule (filed herewith). 26 SIGNATURES - ------------------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. C&D TECHNOLOGIES, INC. December 14, 2000 BY: /s/ Wade H. Roberts, Jr. --------------------------------- Wade H. Roberts, Jr. President, Chief Executive Officer and Director (Principal Executive Officer) December 14, 2000 BY: /s/ Stephen E. Markert, Jr. ---------------------------------- Stephen E. Markert, Jr. Vice President Finance (Principal Financial and Accounting Officer) 27 EXHIBIT INDEX 10.1 Fourth Amendment dated October 13, 2000 to our Credit Agreement dated as of March 1, 1999 among C&D as borrower, certain subsidiaries and affiliates of C&D as guarantor, the lenders therein and Bank of America as administrative agent. 10.2 Fifth Amendment dated October 13, 2000 to our Credit Agreement dated as of March 1, 1999 among C&D as borrower, certain subsidiaries and affiliates of C&D as guarantor, the lenders therein and Bank of America as administrative agent. 10.3 Employment Agreement dated November 28, 2000 between Wade H. Roberts, Jr. and C&D. 10.4 Third Amendment dated November 28, 2000 to our Savings Plan. 10.5 Seventh Amendment dated November 29, 2000 to our Pension Plan for Salaried Employees. 15. Letter from PricewaterhouseCoopers LLP, independent accountants for C&D, regarding unaudited interim financial information. 27. Financial Data Schedule. 28