Exhibit 99.1
1400 Union Meeting Road
Blue Bell, PA 19422
Phone: 215-619-2700
Stockholder 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 Fourth Quarter Fiscal 2005
BLUE BELL, PA, May 3, 2005 -- 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 fourth quarter and fiscal year ended January 31, 2005.
The company's net loss for the quarter was $57.4 million, or $2.26 per share,
compared to a profit of $4.3 million, or 17 cents per diluted share in the prior
year's fourth quarter. The net loss for the quarter, excluding the non-cash
charge of $74.7 million for goodwill and identifiable intangible assets, was
$2.1 million or 8 cents per share. Sales for the fourth quarter were $122.6
million, compared to $81.2 million in the fourth quarter of fiscal 2004.
For the fiscal year ended January 31, 2005, the company lost $59.5 million, or
$2.35 per share, compared to net income of $14.9 million, or 58 cents per share
in fiscal year 2004.
Sales for the year were $414.7 million versus $324.8 million for the fiscal year
ended January 31, 2004.
The acquisitions of Celab, Datel and CPS, completed during 2004, added $35.1
million in sales to the fourth quarter and $66.8 million to the twelve-month
sales results.
Fiscal year 2005 financial results were negatively impacted by several items,
including:
o A pre-tax, non-cash charge of $74.7 million for the impairment of
goodwill and identifiable intangible assets in connection with the
Power Electronics Division. This charge reduced earnings per share by
$2.18 on an after-tax basis.
o A pre-tax, non-cash impairment charge of $9.6 million, and associated
anticipated environmental decontamination charges of $3.9 million at
the company's Leola, Pennsylvania and Huguenot, New York manufacturing
facilities, recorded during the third quarter. These charges arose as
a result of the transition of manufacturing for certain product lines
from these facilities to the company's Reynosa, Mexico facility.
o Pre-tax costs of $1.4 million for rigging, transportation and
severance costs related to the above-mentioned transition of
manufacturing to Reynosa, Mexico.
In addition, the company's operating results were negatively affected by higher
raw material prices. The company estimates the cost of lead, which is the
primary raw material for the battery businesses, increased over $25 million from
the prior year. The Motive and Standby Power business segments, affected by
these lead cost increases, represented approximately 73% of consolidated sales
in fiscal 2005.
As of January 31, 2005, the company breached the leverage ratio covenant under
its $200 million Credit Agreement. The company then obtained a waiver and
renegotiated the agreement to more accurately reflect its leverage. C&D was
required to pledge certain assets as security for the modified arrangement.
George MacKenzie, interim president and chief executive officer of the company,
said, "Fiscal 2005 was a disappointment for C&D Technologies and its
stockholders. However, even in a down year, the company produced operating cash
flows of over $30 million. Going forward, we are taking aggressive actions to
improve performance. We believe C&D is strategically well positioned, with great
products, an expanded international footprint, top-notch customers and
dedicated, hard-working employees. We must improve execution and delivery and
expedite projects begun in fiscal 2005, including the consolidation of
manufacturing into lower-cost facilities and the integration of acquisitions.
The entire team is focused on these objectives, and we are committed to
delivering better results."
C&D Technologies' fourth quarter operating results by reporting segment were as
follows:
Standby Power - Sales increased 5.9% in the quarter, to $61.2 million from $57.8
million in the prior year's fourth quarter, driven primarily by sales to the UPS
market, but were additionally positively affected by start-up sales of the
division's new telecommunications product, msEndur(TM). The division's operating
profit was $3.4 million, compared to a profit of $6.7 million in the comparable
year-ago quarter. The Standby Power Division continued to encounter high raw
material costs (principally lead) as well as Reynosa plant transition expenses.
These two factors negatively affected operating income by approximately $4.0
million during the fourth quarter.
Power Electronics - Sales increased 333.6% during the quarter to $45.8 million,
from $10.6 million in the prior year's fourth quarter. The revenue increase
reflected $35.1 million from acquisitions closed during the year, as well as
improved demand for DC to DC products. Operating loss in the fourth quarter was
$76.1 million, compared to an operating profit of $1.7 million in the fourth
quarter of fiscal 2004, primarily resulting from the recording of goodwill
impairment as previously mentioned.
Motive Power - Sales increased 21.4% in the fourth quarter to $15.6 million,
from $12.9 million in the prior year's fourth quarter. The division's operating
loss was $2.5 million, compared to an operating loss of $523,000 in the prior
year's fourth quarter. Motive Power's operating loss was also negatively
impacted by increased raw material costs, as referred to above, and plant
transition expenses, which factors combined to increase the division's current
quarter operating loss by approximately $1.3 million.
The Board of Directors is currently engaged in an executive search for a
permanent president and chief executive officer, with its search committee
considering both internal and external candidates. Additionally, with the
departure of the Vice President, General Manager of the Motive Power Division,
that business unit now reports to Charles R. Giesige, Vice President, General
Manager of the Standby Power Division.
C&D Technologies will hold a conference call on Monday, May 9, 2005 at 9 A.M.
Eastern Standard Time to discuss these results. 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 May 23, 2005. Please call 800-642-1687
(706-645-9291 for international callers) and enter PIN number 6089121 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 May 23, 2005.
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) that 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, 2005, or any quarterly report 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.
C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
SELECTED FINANCIAL INFORMATION
(In thousands, except for per share data)
(Unaudited)
Three months ended Year ended
January 31, January 31,
Summary of operations 2005 2004 2005 2004
---- ---- ---- ----
Net sales $122,574 $81,222 $414,738 $324,824
Gross profit 21,688 20,953 66,658 76,679
Selling, general and
administrative expenses 14,935 10,668 47,480 40,459
Research and development
expenses 7,786 2,438 19,105 9,542
Goodwill impairment 74,233 - 74,233 -
Operating (loss) income (75,266) 7,847 (74,160) 26,678
(Loss) Income before income taxes
and minority interest (77,644) 6,887 (80,787) 23,769
(Loss) income before minority
interest (57,242) 4,338 (59,498) 14,974
Net (loss) income (57,350) 4,286 (59,493) 14,891
Basic (loss) earnings per share (2.26) 0.17 (2.35) 0.58
Diluted (loss) earnings per share (2.26) 0.17 (2.35) 0.58
Weighted average shares
outstanding
Basic 25,346 25,450 25,349 25,537
Diluted 25,346 25,758 25,349 25,732
Other financial data
Operating cash flow $ 351 $ 8,138 $ 30,191 $ 40,958
Depreciation and amortization
and impairment of intangibles 7,609 5,501 25,339 22,534
C&D TECHNOLOGIES, INC. AND SUBSIDIARIES
SELECTED FINANCIAL INFORMATION (CONT.)
(Dollars in thousands)
(Unaudited)
Selected Balance January 31, January 31,
----------------
Sheet data 2005 2004
---------- ---- ----
Total cash $ 26,855 $ 12,306
Total assets 481,408 385,950
Total debt 136,878 19,620
Total equity 209,328 269,533