UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 24, 2007
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C&D Technologies, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-9389 13-3314599
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(State or other jurisdiction (Commission file number) (IRS employer
of incorporation) Identification No.)
1400 Union Meeting Road, Blue Bell, Pennsylvania 19422
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (215) 619-2700
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N/A
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On October 24, 2007, we entered into an asset purchase agreement with
Crown Battery Manufacturing Co., or Crown, pursuant to which we sold certain
assets of our Motive Power Division to Crown, including the sale of certain
finished goods, manufacturing equipment, customer lists and technical materials
and the assignment of certain leases at our Santa Fe Springs, California, and
Buffalo, New York locations. In addition, Crown will sub-lease a portion of our
Mississauga, Ontario location, with the remainder continuing to be utilized by
our Standby Power Division.
We also entered into a five-year know-how and trademark license agreement
with Crown whereby Crown will manufacture C-LINE(R), V-LINE(R) and VEOLOCITY(TM)
batteries and pay us royalties with respect to such products. We also entered
into an equipment purchase agreement pursuant to which we sold additional
manufacturing equipment to Crown. Crown has also agreed to become the authorized
after-sales service provider for the installed base of our manufactured motive
batteries and chargers. We have agreed not to compete with respect to specified
Motive Power products for a period of five years in North America.
Item 2.01 Completion of Acquisition or Disposition of Assets
We hereby incorporate by reference the disclosure under Item 1.01 of this
Form 8-K. The price paid at closing for the sale of finished goods and certain
identified equipment pursuant to these transactions was $0.7 million with an
additional $2.5 million to be paid prior to January 31, 2008. During a
manufacturing transition period of 45 days post-closing, we will continue to
manufacture and sell products as Crown prepares its production facilities to
manufacture those products. At the end of this transition period, Crown will
purchase the majority of any remaining finished goods, raw materials and work in
process. Pursuant to the trademark license agreement, we will receive royalties
at a rate of approximately 3% to 5% based on future sales. After five years, the
trademarks will revert to Crown and we will cease receiving royalty revenue
under the trademark license agreement. Such disposition will qualify as a
discontinued operation in accordance with SFAS No. 144 "Accounting for the
Impairment or Disposal of Long-Lived Assets."
Item 2.05 Costs Associated with Exit or Disposal Activities.
As a result of the disposition of our Motive Power Division, the company
expects to record severance charges of approximately $1 million.
Item 2.06 Material Impairment
As a result of the disposition of our Motive Power Division, the company
expects to record a non-cash asset impairment charge of approximately $4 million
related to the disposition of certain inventory and fixed assets.
Item 9.01 Financial Statements and Exhibits.
(b) Pro Forma Financial Information
The following unaudited pro forma financial information of the Company is
submitted and is filed herewith as exhibit 99.2, and incorporated herein
by reference:
(i) C&D Technologies, Inc. Pro Forma Consolidated Balance Sheet as of July 31,
2007. (Unaudited)
(ii) C&D Technologies, Inc. Pro Forma Consolidated Statements of Operations
Years Ended January 31, 2007, 2006 and 2005. (Unaudited)
(iii) C&D Technologies, Inc. Pro Forma Consolidated Statement of Operations Six
Months Ended July 31, 2007. (Unaudited)
These statements are adjusted to reflect the pro forma effect of the sale
of certain equipment and inventory of our Motive Power Division and the
subsequent exit of these operations following a 45 day manufacturing transition
period. The unaudited pro forma consolidated balance sheet as of July 31, 2007,
assumes the sale these assets occurred as of that date, and the unaudited pro
forma consolidated statements of operations for the six months ended July 31,
2007 and for the years ended January 31, 2007, 2006 and 2005, assume the sale
occurred on February 1, 2004.
The unaudited pro forma consolidated balance sheet and statements of
operations should be read together with the consolidated financial statements of
the Company as of and for the period ended July 31, 2007 and January 31, 2007,
included in our quarterly and annual reports on Forms 10-Q and 10-K,
respectively. The unaudited pro forma consolidated financial information has
been prepared based upon available information and management estimates; actual
amounts may differ from these estimated amounts. These pro forma statements do
not necessarily reflect the results of operations or financial position of the
Company that would have resulted had the transaction actually been consummated
as of such dates, and are not necessarily indicative of the future results of
operations or the future financial position of the Company.
(d) Exhibits
10.1 Asset Purchase Agreement dated October 24, 2007, between C&D Technologies,
Inc and Crown Battery Manufacturing Co.
99.1 Press Release of C&D Technologies, Inc. dated October 24, 2007.
99.2 Pro Forma Consolidated financial statements.
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 hereunto duly authorized.
C&D TECHNOLOGIES, INC.
Date: October 30, 2007 By: /s/ Ian J. Harvie
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Ian J. Harvie
Chief Financial Officer
(Principal Financial Officer)
EXHIBIT INDEX
Exhibit
Number Description
10.1 Asset Purchase Agreement dated October 24, 2007, between C&D Technologies,
Inc and Crown Battery Manufacturing Co.
99.1 Press Release of C&D Technologies, Inc. dated October 24, 2007.
99.2 Pro Forma Consolidated financial statements.