1400 Union Meeting Road
Blue Bell, PA 19422
Phone: 215-619-2700
Shareholder Contacts:
Stephen E. Markert, Jr. of C&D: 215-619-7835
Joseph Crivelli of Gregory FCA, for C&D: 610-642-8253
FOR IMMEDIATE RELEASE
C&D TECHNOLOGIES REPORTS FINANCIAL RESULTS
FOR THIRD QUARTER FISCAL 2005
BLUE BELL, Pa., December 10, 2004 - C&D Technologies, Inc. (NYSE: CHP), a
leading North American producer and marketer of electrical power storage and
conversion products used in telecommunications and industrial applications,
today announced financial results for its third quarter ended October 31, 2004.
The company's net loss for the quarter was $7.4 million, or 29 cents per share,
compared to a profit of $4.2 million, or 16 cents per diluted share in the prior
year's third quarter. On an operating basis, C&D earned 5 cents per diluted
share during the third quarter.
Operating results for the third quarter of 2004 exclude one-time asset
impairment charges of approximately $13.5 million or 32 cents per share,
associated with property, plant and equipment at the company's Leola,
Pennsylvania and Huguenot, New York manufacturing facilities, as well as a
one-time, non-cash charge of approximately $440,000 or 2 cents per share to
write off purchased in-process R&D associated with the June 30, 2004 acquisition
of Datel, Inc.
Net sales for the quarter were $112.7 million, a 33.0% increase from the prior
year's third quarter sales of $84.9 million. The acquisitions of Celab Limited,
Datel and the Power Systems division of Celestica, Inc. (which the Company
operates as "CPS"), completed earlier this year, added $24.3 million of sales to
the third quarter and $31.7 million to the year-to-date sales results.
For the nine months ended October 31, 2004, the net loss was $2.1 million, or 8
cents per diluted share, compared to net income of $10.6 million, or 41 cents
per diluted share, in the prior year's comparable period. On an operating basis,
C&D earned 26 cents per share for the nine-month period. Net sales for the
nine-month period were $292.2 million, a 19.9% increase from the prior year's
comparable period sales of $243.6 million.
Wade H. Roberts, Jr., president and chief executive officer of the company,
said, "Third quarter results were disappointing, as anticipated by our November
16, 2004 press release. Several factors adversely affected our performance,
including the price of lead, costs associated with moving certain production
lines to Reynosa, Mexico, weaker-than-expected results at CPS, expenses
associated with implementation of Sarbanes-Oxley Act Section 404 internal
controls. However, we remain convinced our initiatives to grow and re-position
the company will pay off by significantly improving our standing in the power
storage and conversion industries while yielding improved bottom line results."
C&D Technologies' third quarter operating results by reporting segment were as
follows:
Standby Power - Sales increased 3.6% in the quarter, to $62.2 million from $60.1
million in the prior year's third quarter, driven by increased sales from the
UPS market, as well as a modest increase in sales to telecommunications
customers. The division's operating loss was $5.3 million, compared to a profit
of $7.8 million in the year-ago quarter. The Standby Power Division continued to
experience high raw material costs (principally lead) and plant transition
expenses. These two factors negatively affected operating income by
approximately $6.2 million during the third quarter. In addition, one-time
impairment charges associated with the Leola, Pennsylvania facility totaled $8.9
during the third quarter.
Power Electronics - Sales increased 276% during the quarter to $35.6 million,
from $9.5 million in the prior year's third quarter. The revenue increase
reflected $24.3 million from acquisitions closed during the year, as well as
improved demand for DC-DC products. Operating income in the third quarter was
$1.2 million, compared to $401,000 in the third quarter of fiscal 2004.
Motive Power - Sales decreased 2.7% in the third quarter to $14.9 million, from
$15.3 million in the prior year's third quarter. The division's operating loss
was $5.3 million, compared to an operating loss of $1.0 million in the prior
year's quarter. Motive Power's operating loss was also negatively affected by
the previously mentioned increased raw material costs and plant transition
expenses, which increased the division's current quarter operating loss by
approximately $1.3 million. In addition, one-time charges associated with the
Huguenot, New York facility negatively affected operating results by $4.6
million during the quarter.
In commenting on the outlook for the fourth quarter, Mr. Roberts stated, "We
continue to target earnings per share in the range of 8 to 12 cents for the
fourth quarter, assuming the price of lead does not worsen."
C&D Technologies will hold a conference call on Monday, December 13, 2004 at
9:00 AM Eastern Standard Time to discuss these results in detail. To
participate, please call 706-679-4521 approximately five minutes before the
conference call start time. A replay of the conference call will be available at
approximately 12:00 PM and will remain available until midnight on December 20,
2004. Please call 800-642-1687 (706-645-9291 for international callers) and
enter PIN number 2808711 to access the replay.
A simultaneous webcast of the conference call may be accessed at the investor
relations section of our website at http://www.cdtechno.com. To listen to the
live call, please go to the web site at least 15 minutes early to register,
download and install any necessary audio software. An archive of the conference
call will be available approximately two hours after the conference call ends
and will remain available on the company's website until December 27, 2004.
This press release may contain forward-looking statements (within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934) which are based on management's current expectations and
are subject to uncertainties and changes in circumstances. Words and expressions
reflecting something other than historical fact are intended to identify
forward-looking statements, but are not the exclusive means of identifying such
statements. Factors that appear with the forward- looking statements, or in the
company's Securities and Exchange Commission filings (including without
limitation the company's annual report on Form 10-K for the fiscal year ended
January 31, 2004, or the quarterly reports filed on Form 10-Q thereafter), could
cause the company's actual results to differ materially from those expressed in
any forward-looking statements made herein.
Section 404 of the Sarbanes-Oxley Act of 2002 requires management to perform an
evaluation of its internal control over financial reporting and have our
independent auditors attest to such evaluation. Along with other companies whose
fiscal year ends January 31, we must implement these requirements for the first
time in connection with the preparation of the annual report for the year ending
January 31, 2005. We have been actively preparing for the implementation of this
requirement by, among other things, establishing an ongoing program to document,
evaluate and test the systems and processes necessary for compliance. While we
anticipate that we will be able to comply on a timely basis with these
requirements, unforeseen delays may occur which could prevent us from achieving
timely compliance. If we fail to complete our evaluation on a timely basis and
in a satisfactory manner, or if our external auditors are unable to attest on a
timely basis to the adequacy of the Company's internal control, we may be
subject to additional scrutiny surrounding our internal control over financial
reporting.
# # # # #
SOURCE: C&D Technologies, Inc.
C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
SELECTED FINANCIAL INFORMATION
(In thousands, except for per share data)
(Unaudited)
Three months ended Nine months ended
October 31, October 31,
Summary of earnings 2004 2003 2004 2003
------------------- ---- ---- ---- ----
Net sales $112,732 $84,870 $292,164 $243,602
Gross profit 8,908 19,656 44,970 55,726
Selling, general and
administrative expenses 12,844 10,097 32,545 29,791
Research and development
expenses 5,463 2,358 11,319 7,104
Operating (loss) income (9,399) 7,201 1,106 18,831
(Loss) income before income
taxes and minority interest (11,495) 6,582 (3,143) 16,882
Net (loss) income before
minority interest (7,369) 4,147 (2,256) 10,636
Net (loss) income (7,353) 4,203 (2,143) 10,605
Basic (loss) earnings per share (0.29) 0.16 (0.08) 0.41
Diluted (loss) earnings per share (0.29) 0.16 (0.08) 0.41
Weighted average shares
outstanding:
Basic 25,348 25,496 25,351 25,566
Diluted 25,348* 25,757 25,351* 25,724
* Due to a loss during the period, zero incremental shares are included
because the effect would be anti-dilutive.
Other financial data
Operating cash flow $16,131 $15,566 $29,840 $32,820
Depreciation and amortization 6,521 5,593 17,730 17,033
* Reclassified for comparative purposes
C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
SELECTED FINANCIAL INFORMATION (CONT.)
(Dollars in thousands)
(Unaudited)
Selected Balance October 31, January 31,
----------------
Sheet data 2004 2004
---------- ---- ----
Total cash $ 24,567 $ 12,306
Total assets 557,939 385,950
Total debt 133,183 19,620
Total equity 265,926 269,533