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 July 31, 2001

[ ] 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 September 6,
2001: 26,175,816

C&D TECHNOLOGIES, INC.
AND SUBSIDIARIES

INDEX

PART I. FINANCIAL INFORMATION Page No.

Item 1 - Financial Statements

Consolidated Balance Sheets -
July 31, 2001 and January 31, 2001.................... 3

Consolidated Statements of Income - Three and
Six Months Ended July 31, 2001 and 2000............... 5

Consolidated Statements of Cash Flows -
Six Months Ended July 31, 2001 and 2000............... 6

Consolidated Statements of Comprehensive Income -
Three and Six Months Ended July 31, 200l and 2000..... 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.................................... 24

SIGNATURES.................................................... 25

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)
July 31, January 31,
2001 2001
---- ----
ASSETS

Current assets:
Cash and cash equivalents................... $ 20,433 $ 7,709
Accounts receivable, less allowance for
doubtful accounts of $3,556 and
$4,121, respectively................... 70,974 88,596
Inventories................................. 74,934 77,493
Deferred income taxes....................... 11,622 10,990
Other current assets........................ 2,594 1,459
------- -------
Total current assets............. 180,557 186,247

Property, plant and equipment, net................ 131,517 130,387
Intangible and other assets, net.................. 22,339 23,309
Goodwill, net..................................... 111,237 115,576
------- -------
Total assets..................... $445,650 $455,519
======= =======

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Short-term debt............................. $ 21,256 $ 18,172
Accounts payable............................ 25,846 45,935
Accrued liabilities......................... 29,926 34,918
Income taxes................................ - 2,533
Other current liabilities................... 6,223 8,794
------- -------
Total current liabilities........ 83,251 110,352

Deferred income taxes ............................ 1,837 1,135
Long-term debt.................................... 91,800 98,849
Other liabilities................................. 20,241 20,133
------- -------
Total liabilities................ 197,129 230,469
------- -------

The accompanying notes are an integral part of these statements.

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (continued)
(Dollars in thousands, except per share data)

(Unaudited)
July 31, January 31,
2001 2001
---- ----
Commitments and contingencies

Minority interest................................. 7,792 6,996

Stockholders' equity:
Common stock, $.01 par value, 75,000,000
shares authorized; 28,384,295 and
28,276,917 shares issued,
respectively............................ 284 283
Additional paid-in capital.................. 65,103 62,908
Treasury stock, at cost, 2,204,228 and
1,986,038 shares, respectively.......... (25,148) (17,750)
Accumulated other comprehensive loss........ (2,582) (1,231)
Retained earnings........................... 203,072 173,844
------- -------
Total stockholders' equity....... 240,729 218,054
------- -------
Total liabilities and
stockholders' equity........... $445,650 $455,519
======= =======

The accompanying notes are an integral part of these statements.

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)

(Unaudited) (Unaudited)
Three months ended Six months ended
July 31, July 31,
2001 2000 2001 2000
---- ---- ---- ----

Net sales*........................... $125,493 $152,156 $280,876 $290,167
Cost of sales*....................... 87,984 109,021 197,334 207,917
------- ------- ------- -------
Gross profit..................... 37,509 43,135 83,542 82,250

Selling, general and
administrative expenses.......... 11,716 16,875 25,425 33,252
Research and development
expenses......................... 2,727 2,525 5,434 5,008
------- ------- ------- -------
Operating income................. 23,066 23,735 52,683 43,990

Interest expense, net................ 1,708 1,613 3,758 3,464
Other expense (income), net.......... 68 (165) 126 150
------- ------- ------- -------
Income before income taxes and
minority interest............. 21,290 22,287 48,799 40,376

Provision for income taxes........... 7,740 8,336 18,056 15,101
------- ------- ------- -------
Net income before minority
interest...................... 13,550 13,951 30,743 25,275

Minority interest.................... 450 560 796 831
------- ------- ------- -------
Net income....................... $ 13,100 $ 13,391 $ 29,947 $ 24,444
======= ======= ======= =======

Net income per share - basic......... $ .50 $ .51 $ 1.14 $ .93
======= ======= ======= =======

Net income per share - diluted....... $ .49 $ .49 $ 1.11 $ .90
======= ======= ======= =======

Dividends per share.................. $ .01375 $ .01375 $ .02750 $ .02750
======= ======= ======= =======

* Reclassified for comparative purposes.

The accompanying notes are an integral part of these statements.

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Six months ended
July 31,
2001 2000
---- ----
Cash flows provided (used) by operating activities:
Net income...................................... $ 29,947 $ 24,444
Adjustments to reconcile net income to net
cash provided by operating activities:
Minority interest......................... 796 831
Depreciation and amortization............. 15,414 13,211
Deferred income taxes..................... 70 (184)
Loss on disposal of assets................ 102 573
Changes in:
Accounts receivable................. 17,160 (6,848)
Inventories......................... 2,201 (4,796)
Other current assets................ (913) 390
Accounts payable.................... (15,469) (1,550)
Accrued liabilities................. (4,407) 5,609
Income taxes payable................ (2,137) (2,117)
Other current liabilities........... (2,572) 557
Other liabilities................... 108 343
Other, net................................ 583 523
------- -------
Net cash provided by operating activities........... 40,883 30,986
------- -------
Cash flows provided (used) by investing activities:
Acquisition of property, plant and equipment.... (16,774) (18,436)
Proceeds from disposal of property, plant
and equipment................................ 28 149
------- -------
Net cash used by investing activities............... (16,746) (18,287)
------- -------
Cash flows provided (used) by financing activities:
Repayment of debt............................... (32,117) (16,317)
Proceeds from new borrowings.................... 27,852 3,700
Proceeds from issuance of common stock, net..... 1,268 2,227
Purchase of treasury stock...................... (7,280) (2,306)
Payment of common stock dividends............... (1,081) (1,081)
------- -------

The accompanying notes are an integral part of these statements.

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(Dollars in thousands)

(Unaudited)
Six months ended
July 31,
2001 2000
---- ----

Net cash used by financing activities............. (11,358) (13,777)
------- -------
Effect of exchange rate changes on cash........... (55) (139)
------- -------
Increase (decrease) in cash and cash
equivalents.................................... 12,724 (1,217)
Cash and cash equivalents at beginning
of period...................................... 7,709 7,121
------- -------
Cash and cash equivalents at end of period........ $ 20,433 $ 5,904
======= =======

SCHEDULE OF NON CASH INVESTING
AND FINANCIAL ACTIVITIES

Decrease in property, plant, and
equipment acquisitions in
accounts payable............................... $ (4,543) $ -
======= =======

The accompanying notes are an integral part of these statements.

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands)

(Unaudited) (Unaudited)
Three months ended Six months ended
July 31, July 31,
2001 2000 2001 2000
---- ---- ---- ----

Net income........................................ $13,100 $13,391 $29,947 $24,444

Other comprehensive expense, net of tax:

Cumulative effect of accounting change.......... - - (103) -

Net unrealized loss on derivative instruments... (264) - (475) -

Foreign currency translation adjustments........ (144) (332) (773) (643)
------ ------ ------ ------
Total comprehensive income........................ $12,692 $13,059 $28,596 $23,801
====== ====== ====== ======

The accompanying notes are an integral part of these statements.

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, 2001. The January 31, 2001 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
July 31, 2001 and the related consolidated statements of income and
comprehensive income for the three and six months ended July 31, 2001 and 2000
and the consolidated statements of cash flow for the six months ended July 31,
2001 and 2000. However, interim results of operations may not be indicative of
results for the full fiscal year.

2. RECLASSIFICATIONS

The Company adopted Emerging Issues Task Force Issue 00-10, "Accounting for
Shipping and Handling Revenue and Costs," which requires amounts charged to
customers for shipping and handling be classified as revenue. The associated
shipping costs, previously classified as an offset against revenue, are now
classified as cost of goods sold. The consolidated financial statements for the
three and six months ended July 31, 2001 have been adjusted to conform to the
fiscal 2002 presentation.

3. INVENTORIES

Inventories consisted of the following:
July 31, January 31,
2001 2001
---- ----

Raw materials............................ $28,848 $38,349
Work-in-progress......................... 19,240 18,703
Finished goods........................... 26,846 20,441
------ ------
$74,934 $77,493
====== ======

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except per share data)
(UNAUDITED)

4. INCOME TAXES

A reconciliation of the provision for income taxes from the statutory rate
to the effective rate is as follows:
Six months ended
July 31,
2001 2000
---- ----

U.S. statutory income tax....................... 35.0% 35.0%
State tax, net of federal income tax benefit.... 2.5 3.4
Foreign sales corporation....................... (0.5) (0.3)
Tax effect of foreign operations................ (0.6) (0.1)
Research and development credit................. (0.1) (0.9)
Other........................................... 0.7 0.3
---- ----
37.0% 37.4%
==== ====

5. NET INCOME PER COMMON SHARE

Net income per share - basic for the three and six months ended July 31,
2001 and 2000 is based on the weighted average number of shares of Common Stock
outstanding. Net income per share - diluted 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 Six months ended
July 31, July 31,
2001 2000 2001 2000
---- ---- ---- ----
Weighted average shares
of common stock
outstanding............. 26,149,099 26,236,986 26,161,223 26,184,497
Assumed exercise of stock
options, net of shares
assumed reacquired...... 702,586 1,177,824 745,484 963,395
---------- ---------- ---------- ----------
Weighted average common
shares - assuming
dilution................ 26,851,685 27,414,810 26,906,707 27,147,892
========== ========== ========== ==========

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except per share data)
(UNAUDITED)

6. CONTINGENT LIABILITIES

With regard to the following contingent liabilities, there have been no
material changes since January 31, 2001.

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-1990s. In August 2000 the Company entered into a settlement agreement
with respect to this claim, the cost of which was recovered from our insurance
carriers in the first quarter of fiscal 2002.

We are in discussion with respect to financial responsibility for certain
inventory we purchased on behalf of the largest customer of our Power
Electronics Division. Negotiations are in progress and, therefore, the outcome
is not certain at this time.

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 and 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 the Company's efforts to maintain compliance with
applicable environmental requirements, if injury or damage to persons or the
environment arises from 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
certain damages and for the costs of investigation and remediation, which could
have a material adverse effect on the Company's business, financial condition,
or results of operations. 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.

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except per share data)
(UNAUDITED)

6. CONTINGENT LIABILITIES (continued)

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.

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 and remediation phases 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 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 with this matter. 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 finalized with or
approved by the State of New York.

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except per share data)
(UNAUDITED)

6. CONTINGENT LIABILITIES (continued)

The Company's Conyers, Georgia facility was 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.
Assessment and remediation of off-site contamination was completed and the full
remediation report was submitted to the state in February 1999. The Company
received written confirmation from the state environmental agency that no
further action will be required and that the site has been removed from its
Hazardous Sites Inventory effective April 2001.

The Company, together with Johnson Controls, Inc. ("JCI"), is conducting an
assessment and remediation of contamination at its Dynasty Division facility in
Milwaukee, Wisconsin. The majority of this project is expected to be completed
by the end of fiscal 2002. Under the purchase agreement with JCI, the Company is
responsible for (i) one-half of the cost of the on-site assessment and
remediation, with a maximum liability of $1,750, (ii) any environmental
liabilities at the facility that 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 Milwaukee facility to locations other than the Milwaukee
facility, but specifically excluding liabilities relating to pre-closing offsite
disposal. JCI has retained all other environmental liabilities, including
off-site assessment and remediation.

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 there is insufficient information currently
available to permit the Company to estimate the potential penalty, if any.

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.

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except per share data)
(UNAUDITED)

7. 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 ("UPS"), telecommunications and
broadband cable markets. Major applications of these products include wireless
and wireline telephone infrastructure, CATV signal powering, corporate data
center powering and computer network back-up for use during electric utility
outages.

The Power Electronics Division manufactures and markets custom, standard
and modified standard electronic power supply systems, including DC to DC
converters, for large original equipment manufacturers ("OEMs") of
telecommunications equipment, office equipment, workstations and other
applications.

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 six months ended July 31, 2001 and 2000 is shown below:

Power Motive
Powercom Dynasty Electronics Power
Division Division Division Division Consolidated
-------- -------- ----------- -------- ------------

Three months ended July 31, 2001:

Net sales................................ $ 65,673 $28,706 $15,187 $15,927 $125,493
Operating income (loss).................. $ 18,655 $ 4,885 $ (783) $ 309 $ 23,066

Three months ended July 31, 2000:

Net sales*............................... $ 67,261 $40,013 $24,564 $20,318 $152,156
Operating income......................... $ 12,527 $ 8,928 $ 1,475 $ 805 $ 23,735

Six months ended July 31, 2001:

Net sales................................ $143,598 $62,143 $40,283 $34,852 $280,876
Operating income......................... $ 40,045 $10,935 $ 372 $ 1,331 $ 52,683

Six months ended July 31, 2000:

Net sales*............................... $129,415 $76,639 $44,481 $39,632 $290,167
Operating income......................... $ 24,670 $16,221 $ 2,241 $ 858 $ 43,990

* Reclassified for comparative purposes.

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except per share data)
(UNAUDITED)

8. DERIVATIVE INSTRUMENTS

On February 1, 2001, the Company adopted Statement of Financial Accounting
Standard ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended by SFAS No. 138, "Accounting for Certain Derivative
Instruments and Certain Hedging Activities." SFAS No. 133, as amended,
establishes accounting and reporting standards for derivative instruments.
Specifically, SFAS No. 133 requires an entity to recognize all derivatives as
either assets or liabilities in the statement of financial position and to
measure those instruments at fair value. Additionally, the fair value
adjustments will affect either stockholders' equity or net income depending on
whether the derivative instrument qualifies as a hedge for accounting purposes
and, if so, the nature of the hedging activity. As of February 1, 2001, the
adoption of the new standard resulted in a cumulative effect net-of-tax increase
of $103 to accumulated other comprehensive loss.

In the normal course of business, the Company uses a variety of derivative
financial instruments primarily to manage currency exchange rate and interest
rate risk. All derivatives are recognized on the balance sheet at fair value and
are generally reported in accrued liabilities. To qualify for hedge accounting,
the Company requires that the instruments are effective in reducing the risk
exposure that they are designated to hedge. For instruments that are associated
with the hedge of an anticipated transaction, hedge effectiveness criteria also
requires that it be probable that the underlying transaction will occur.
Instruments that meet established accounting criteria are formally designated as
hedges at the inception of the contract. These criteria demonstrate that the
derivative is expected to be highly effective at offsetting changes in fair
value of the underlying exposure both at inception of the hedging relationship
and on an ongoing basis. The assessment for effectiveness is formally documented
at hedge inception and reviewed at least quarterly throughout the designated
hedge period.

The Company applies hedge accounting in accordance with SFAS No. 133,
whereby the Company designates each derivative as a hedge of (i) the fair value
of a recognized asset or liability or of an unrecognized firm commitment ("fair
value" hedge); or (ii) the variability of anticipated cash flows of a forecasted
transaction or the cash flows to be received or paid related to a recognized
asset or liability ("cash flow" hedge). From time to time, however, the Company
may enter into derivatives that economically hedge certain of its risks, even
though hedge accounting is not allowed by SFAS No. 133 or is not applied by the
Company. In these cases, there generally exists a natural hedging relationship
in which changes in fair value of the derivative, which are recognized currently
in earnings, act as an economic offset to changes in the fair value of the
underlying hedged item(s). The Company did not apply hedge accounting to five
currency forward contracts as of July 31, 2001. These contracts, which were for
the delivery of Canadian Dollars and Euro Currencies, had a combined fair value
of $24 as of July 31, 2001. Changes in the fair value of these currency forward
contracts are recorded in earnings.

Changes in the value of a derivative that is designated as a fair value
hedge, along with offsetting changes in fair value of the underlying hedged
exposure, are recorded in earnings each period. Changes in the value of a
derivative that is designated as a cash flow hedge is recorded in accumulated
other comprehensive income (loss). When earnings are affected by the variability
of the underlying cash flow, the applicable amount of the gain or loss from the
derivative that is deferred in stockholders' equity is released to earnings.
When the terms of an underlying transaction are modified, or when the underlying
hedged item ceases to exist, all changes in the fair value of the instrument are

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except per share data)
(UNAUDITED)

8. DERIVATIVE INSTRUMENTS (continued)

included in earnings each period until the instrument matures. When the
underlying transaction ceases to exist, a hedged asset or liability is no longer
adjusted for changes in its fair value. Derivatives that are not designated as
hedges, as well as the portion of a derivative excluded from the effectiveness
assessment and changes in the value of derivatives which do not offset the
underlying hedged item throughout the designated hedge period, are recorded in
earnings each period.

In the normal course of business, the Company is exposed to the impact of
interest rate changes and foreign currency fluctuations. The Company limits
these risks by following established risk management policies and procedures
including use of derivatives and, where cost-effective, financing with debt in
the currencies in which assets are denominated. For interest rate exposures,
derivatives are used to manage the Company's exposure to fluctuations in
interest rates on the Company's underlying variable rate debt instruments. The
Company employs separate swap transactions rather than fixed rate obligations to
take advantage of the lower borrowing costs associated with floating rate debt
while also eliminating possible risk related to refinancing in the fixed rate
market. For currency exposures, derivatives are used to limit the effects of
foreign exchange rate fluctuations on financial results.

The Company does not use derivatives for trading or speculative purposes,
nor is it a party to leveraged derivatives. Further, the Company has a policy of
only entering into contracts with major financial institutions. When viewed in
conjunction with the underlying and offsetting exposure that the derivatives are
designed to hedge, the Company has not sustained a material loss from these
instruments nor does it anticipate any material adverse effect on its net income
or financial position in the future from the use of derivatives.

The following table includes all interest rate swaps as of July 31, 2001.
These interest rate swaps are designated as cash flow hedges and, therefore,
changes in the fair value are recorded in accumulated other comprehensive loss.

Fixed Variable
Interest Interest
Notional Origination Maturity Rate Rate Fair
Amount Date Date Paid Received Value
-------- ----------- -------- -------- -------- -----

$ 6,500 12/20/95 12/20/02 6.01% LIBOR $(157)
20,000 03/11/99 03/11/02 5.58% LIBOR (165)
20,000 02/05/01 03/01/03 5.24% LIBOR (300)
20,000 04/11/01 04/11/06 5.56% LIBOR (295)
---
$(917)
====

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except per share data)
(UNAUDITED)

9. NEW ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED

In June 2001, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 141, "Business Combinations." This statement addresses financial accounting
and reporting for business combinations. All business combinations in the scope
of this statement are to be accounted for using only the purchase method. The
provisions of this statement apply to all business combinations initiated after
June 30, 2001 and those accounted for using the purchase method for which the
date of acquisition is July 1, 2001 or later.

Also in June 2001, the FASB issued SFAS No. 142, "Goodwill and Other
Intangible Assets." This statement addresses financial accounting and reporting
for acquired goodwill and other intangible assets. Under SFAS No. 142, goodwill
and indefinite lived intangible assets are no longer amortized but are reviewed
annually (or more frequently if impairment indicators arise) for impairment.
Separable intangible assets that are not deemed to have an indefinite life will
continue to be amortized over their useful lives. Goodwill and other intangible
assets acquired prior to July 1, 2001 will continue to be amortized through
January 31, 2002. After January 31, 2002, such goodwill and indefinite lived
intangible assets will cease being amortized.

Management is currently evaluating the impact SFAS Nos. 141 and 142 will
have on the Company's financial position and results of operations.

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 July 31, 2001, and the
related consolidated statements of income and comprehensive income for each of
the three-month and six-month periods ended July 31, 2001 and 2000, and the
consolidated statement of cash flows for the six-month periods ended July 31,
2001 and 2000. 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 generally accepted in the United
States of America.

We previously audited in accordance with auditing standards generally accepted
in the United States of America, the consolidated balance sheet as of January
31, 2001 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 6, 2001 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, 2001, 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
August 21, 2001

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
"six-month period", refer to the second quarter of fiscal 2002 and the six
months ended July 31, 2001. All comparisons are with the corresponding periods
in the prior year, unless otherwise stated.

In December 2000 (effective as of November 26, 2000), we acquired the
Newport Components Division of Newport Technology Group Limited, a producer of
electronic power conversion products (primarily DC to DC converters) based in
the United Kingdom. For reporting purposes, this acquisition is included as part
of the Power Electronics Division and is referred to as C&D Technologies (NCL)
Limited ("NCL").

Net sales decreased $26,663 or 18% for the quarter and $9,291 or 3% for the
six-month period. The decrease in sales during the quarter was the result of
lower sales in all divisions. Sales of the Dynasty Division decreased $11,307 or
28% during the quarter, primarily as a result of lower sales to the UPS and CATV
markets. Sales of the Power Electronics Division decreased $9,377 or 38% during
the quarter, primarily due to lower DC to DC converter sales partially offset by
sales of NCL. Motive Power divisional sales decreased $4,391 or 22% during the
quarter. Sales of the Powercom Division decreased $1,588 or 2% during the
quarter, primarily as a result of lower sales to the telecommunications market,
partially offset by higher sales to the UPS market. The decrease in sales during
the six-month period was the result of lower sales of the Dynasty, Motive Power
and Power Electronics divisions, partially offset by higher Powercom divisional
sales. Sales of the Dynasty Division decreased $14,496 or 19% during the
six-month period, primarily as a result of lower sales to the UPS and CATV
markets. Sales of the Motive Power Division decreased $4,780 or 12% during the
six-month period. Power Electronics divisional sales decreased $4,198 or 9%
during the six-month period, primarily due to lower DC to DC converter and
custom power supply sales, partially offset by sales of NCL. Sales of the
Powercom Division increased $14,183 or 11% during the six-month period,
primarily due to an increase in sales to the telecommunications and UPS markets.
We do not expect fiscal 2002 third quarter revenue to exceed fiscal 2002 second
quarter revenue.

Gross profit for the quarter decreased $5,626 or 13% to $37,509 from
$43,135 in the second quarter of the prior year, resulting in a gross margin of
29.9% versus 28.3% in the second quarter of fiscal 2001. Gross profit during the
quarter was lower for the Dynasty, Motive Power and Power Electronics divisions,
primarily due to lower sales volumes generated by all divisions. Gross profit of
the Powercom Division increased during the quarter on slightly lower sales due
to favorable pricing and efficiencies. Gross profit for the six-month period
increased $1,292 or 2% to $83,542 from $82,250 in the comparable period of the
prior year, resulting in an increase in gross margin from 28.3% in the first six
months of fiscal 2001 to 29.7% in the first six months of the current year.
Gross profit for the six-month period was higher in the Powercom Division,
primarily due to increased sales volume, and the Power Electronics Division,
primarily as a result of the NCL acquisition. These increases were partially
offset by lower gross profit generated by the Dynasty and Motive Power
divisions, primarily as a result of lower sales volumes.

Selling, general and administrative expenses for the quarter decreased
$5,159 or 31% compared to the comparable quarter of the prior year. This
decrease was primarily due to: (i) lower fixed selling costs (primarily labor,
warranty and advertising); (ii) lower bonus and legal accruals; and (iii) lower
variable selling costs associated with the decreased sales volume. Partially

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
(Dollars in thousands, except per share data)

offsetting this decrease was additional selling, general and administrative
expenses of the Power Electronics Division, including the amortization of
goodwill and other intangible assets related to the recent acquisition of NCL.
For the six-month period, selling, general and administrative expenses decreased
$7,827 or 24%. This decrease was primarily due to: (i) the reduction of general
and administrative expenses associated with the full recovery of certain
litigation and settlement costs from our insurance carriers in the first quarter
of fiscal 2002 which was reserved for in the six-month period ended July 31,
2000 and paid to the claimant in the fourth quarter of fiscal 2001; (ii) lower
fixed selling costs (primarily labor, warranty, and advertising); (iii) lower
bonus accruals; and (iv) lower variable selling costs associated with the
decreased sales volume. Partially offsetting this decrease was additional
selling, general and administrative expenses of the Power Electronics Division,
including the amortization of goodwill and other intangible assets related to
the recent acquisition of NCL.

Research and development expenses remained proportional to sales as a
relative percentage of sales for the quarter and six-month period at
approximately 2% of sales.

Operating income for the quarter decreased $669 or 3% to $23,066 as a
result of lower operating income generated by the Dynasty and Motive Power
divisions, coupled with the recording of an operating loss by the Power
Electronics Division in the current quarter (due to low sales volume), compared
to operating income in the prior year's second quarter. Operating losses for the
Power Electronics Division are expected to continue into the third quarter.
These decreases in operating income were partially offset by an increase in
operating income of the Powercom Division. For the six-month period, operating
income increased $8,693 or 20% to $52,683 as a result of increased operating
income generated by the Powercom and Motive Power divisions, partially offset by
lower operating income generated by the Dynasty and Power Electronics divisions.

Interest expense, net, increased $95 in the quarter and $294 in the
six-month period, primarily due to higher debt balances outstanding related to
the acquisition of NCL in the fourth quarter of fiscal 2001, partially offset by
lower effective interest rates.

Income tax expense decreased $596 for the quarter and increased $2,955 for
the six-month period, primarily as a result of lower income before income taxes
for the quarter and higher income before income taxes for the six-month period.
The effective tax rate consists of statutory rates adjusted for the tax impacts
of our foreign sales corporation, foreign operations and research and
development credits. The effective tax rate for the first six months of fiscal
2002 decreased to 37.0% from 37.4% in the comparable period of the prior year.

Minority interest decreased $110 for the quarter and $35 for the six-month
period as a result of lower profitability of our joint venture battery business
located in Shanghai, China.

As a result of the above, net income decreased $291 or 2% percent in the
quarter to $13,100 or 50 cents per share - basic and 49 cents per share -
diluted. Due to a 2% decrease in diluted shares outstanding, net income per
share - diluted was equal to the second quarter of fiscal 2001. For the
six-month period, net income increased $5,503 to $29,947 or $1.14 per share -
basic and $1.11 per share - diluted.

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities increased $9,897 or 32% to
$40,883 for the six-month period ended July 31, 2001 compared to $30,986 for the
comparable period of the prior year. This increase in net cash provided by
operating activities was primarily due to: (i) a decrease in accounts receivable

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
(Dollars in thousands, except per share data)

LIQUIDITY AND CAPITAL RESOURCES (continued)

and inventories in the first half of the current year compared to an increase in
the same period of the prior year; and (ii) an increase in net income,
depreciation and amortization during the six-month period. These changes
resulting in higher net cash provided by operating activities were partially
offset by: (i) a larger reduction in accounts payable; and (ii) decreases in
accrued liabilities and other current liabilities in the first half of fiscal
2002 compared to increases in the comparable period of the prior year. We are in
discussion with respect to financial responsibility for certain inventory we
purchased on behalf of the largest customer of our Power Electronics Division.
Negotiations are in progress and, therefore, the outcome is not certain at this
time.

Net cash used by investing activities in the first half of fiscal 2002
decreased $1,541 over the comparable period of the prior year, primarily due to
lower capital spending.

Net cash used by financing activities in the six-month period decreased
$2,419 over the comparable period of the prior year, primarily due to the
proceeds from new borrowings, partially offset by higher debt repayments and
higher treasury stock purchases. During the period, we obtained a 22 million
British Pound Sterling line of credit, the proceeds of which were used to pay
down debt denominated in U.S. Dollars.

The availability under our current loan agreements 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 six months of fiscal 2002 were incurred primarily
to fund capacity expansion, new product development, a continuing series of cost
reduction programs, normal maintenance capital, and regulatory compliance.
Fiscal 2002 capital expenditures are expected to total approximately $25,000.

NEW ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED

In June 2001, the FASB issued SFAS No. 141, "Business Combinations." This
statement addresses financial accounting and reporting for business
combinations. All business combinations in the scope of this statement are to be
accounted for using only the purchase method. The provisions of this statement
apply to all business combinations initiated after June 30, 2001 and those
accounted for using the purchase method for which the date of acquisition is
July 1, 2001 or later.

Also in June 2001, the FASB issued SFAS No. 142, "Goodwill and Other
Intangible Assets." This statement addresses financial accounting and reporting
for acquired goodwill and other intangible assets. Under SFAS No. 142, goodwill
and indefinite lived intangible assets are no longer amortized but are reviewed
annually (or more frequently if impairment indicators arise) for impairment.
Separable intangible assets that are not deemed to have an other indefinite life
will continue to be amortized over their useful lives. Goodwill and other
intangible assets acquired prior to July 1, 2001 will continue to be amortized
through January 31, 2002. After January 31, 2002, such goodwill and indefinite
lived intangible assets will cease being amortized.

We are currently evaluating the impact SFAS Nos. 141 and 142 will have on
our financial position and results of operations.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
(Dollars in thousands, except per share data)

FORWARD-LOOKING STATEMENTS

Certain of the statements and 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) and, accordingly, are subject to risks and uncertainties. For such
statements, C&D claims the protection of the safe-harbor for forward-looking
statements contained in the Private Securities Litigation Act of 1995. The
factors that could cause actual results to differ materially from anticipated
results expressed or implied in any forward-looking statement include those
referenced in the forward-looking statement, following the forward-looking
statement, described in the notes to the Consolidated Financial Statements and
other factors discussed in this Quarterly Report on Form 10-Q and our other
filings with the Securities and Exchange Commission. Readers are cautioned not
to place undue reliance on these forward-looking statements, which speak only as
of the date of this Quarterly Report on Form 10-Q. We undertake no obligation to
update or revise these statements to reflect events or circumstances occurring
after the date of this Quarterly Report on Form 10-Q.

Forward-looking statements may be identified by their use of words like
"plans," "expects," "will," "anticipates," "intends," "projects," "estimates" or
other words of similar meaning. All statements that address expectations or
projections about the future, including statements about our strategy for
growth, product development, market position, expenditures and financial
results, are forward-looking statements. Forward-looking statements are based on
certain assumptions and expectations of future events. We cannot guarantee that
these assumptions and expectations are accurate or will be realized. Following
are some of the important factors that could cause our actual results to differ
materially from those projected in any such forward-looking statements:

o We operate worldwide and derive a portion of our revenue from sales outside
the United States. Changes in the laws or policies of governmental and
quasi-governmental agencies, as well as social and economic conditions, in
the countries in which we operate could affect our business in these
countries and our results of operations. In addition, economic factors
(including inflation and fluctuations in interest rates and foreign
currency exchange rates) and competitive factors (such as price
competition, business combinations of competitors or a decline in industry
sales from slowing economic growth) in the countries in which we conduct
business could affect our results of operations.

o Our results of operations could be significantly impacted by adverse
conditions in the domestic and global economies or the markets in which we
conduct business, such as telecommunications, UPS, CATV, switchgear and
control and material handling.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
(Dollars in thousands, except per share data)

FORWARD-LOOKING STATEMENTS (continued)

o Our ability to grow earnings could be affected by increases in the cost of
raw materials, particularly lead. We may not be able to fully offset the
effects of higher raw material costs through price increases or
productivity improvements.

o Our ability to meet customer demand depends, in part, on our ability to
obtain timely and adequate delivery of parts and components from our
suppliers and internal manufacturing capacity. Although we work closely
with our suppliers to avoid shortages, there can be no assurance that we
will not encounter shortages in the future. A reduction or interruption in
component supply or a significant increase in the price of one or more
components could have a material adverse effect on our operations.

o Our growth objectives are largely dependent on our ability to renew our
pipeline of new products and to bring these products to market. This
ability may be adversely affected by difficulties or delays in product
development, such as the inability to: identify viable new products;
successfully complete research and development projects; obtain adequate
intellectual property protection; or gain market acceptance of the new
products. Our growth objectives are also largely dependent upon our ability
to successfully expand our production capacity.

o As part of our strategy for growth, we have made and may continue to make
acquisitions, and in the future, may make divestitures and form strategic
alliances. There can be no assurance that these will be completed or
beneficial to us.

o Our facilities are subject to a broad array of environmental laws and
regulations. The costs of complying with complex environmental laws and
regulations, as well as internal voluntary programs, are significant and
will continue to be so for the foreseeable future. Our accruals for such
costs and liabilities may not be adequate since the estimates on which the
accruals are based depend on a number of factors including the nature of
the problem, the complexity of the site, the nature of the remedy, the
outcome of discussions with regulatory agencies and other PRPs at
multiparty sites, and the number and financial viability of other PRPs.

o Our results of operations could be affected by significant pending and
future litigation adverse to C&D, such as, without limitation, product
liability, contract and employment-related claims.

o Our performance depends on our ability to attract and retain qualified
personnel. We cannot assure that we will be able to continue to attract and
retain qualified personnel.

The foregoing list of important factors is not all-inclusive, or
necessarily in order of importance.

PART II. OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders

At the annual meeting of stockholders of C&D on June 26, 2001, the
stockholders voted on three proposals: the election of nine directors for
one-year terms, a proposal to approve an amendment to C&D's Amended and Restated
1998 Stock Option Plan and a proposal to ratify the appointment of
PricewaterhouseCoopers LLP as independent accountants for C&D for the fiscal
year ended January 31, 2002.

Proposal 1 - Election of Directors

Nominee Votes For Votes Withheld
------- --------- --------------
William Harral III 21,898,791 340,846
Wade H. Roberts, Jr. 21,900,479 339,158
Stephen J. Andriole 21,901,091 338,546
Andrian A. Basora 21,900,904 338,733
Peter R. Dachowski 21,901,091 338,546
Kevin P. Dowd 21,901,091 338,546
Pamela S. Lewis 21,900,395 339,242
George MacKenzie 21,901,091 338,546
John A. H. Shober 21,901,091 338,546

Proposal 2 - Amendment to the C&D Technology, Inc. Amended and
Restated 1998 Stock Option Plan

For Against Abstain
--- ------- -------
20,771,170 1,445,304 23,163

Proposal 3 - Appointment of PricewaterhouseCoopers LLP as independent
accountants for C&D for the fiscal year ended January 31,
2002

For Against Abstain
--- ------- -------
22,143,377 87,509 8,751

Item 6. Exhibits and Reports on Form 8-K.

(a) Exhibits

10.1 Uncommitted loan facility dated June 5, 2001 between C&D Holdings
Limited and ABN AMRO Bank N.V. (incorporated by reference to
Exhibit 10.2 to C&D's Quarterly Report on Form 10-Q for the
quarter ended April 30, 2001.)

15. Letter from PricewaterhouseCoopers LLP, independent accountants
for C&D, regarding unaudited interim financial information (filed
herewith).

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.

September 13, 2001 BY: /s/ Wade H. Roberts, Jr.
---------------------------------
Wade H. Roberts, Jr.
President, Chief Executive
Officer and Director
(Principal Executive Officer)

September 13, 2001 BY: /s/ Stephen E. Markert, Jr.
----------------------------------
Stephen E. Markert, Jr.
Vice President Finance
(Principal Financial and
Accounting Officer)

EXHIBIT INDEX

15. Letter from PricewaterhouseCoopers LLP, independent accountants
for C&D, regarding unaudited interim financial information.