MILTON, Ga. – Exide Technologies has reported its fiscal 2013 first quarter financial results for the period ended June 30.
Fiscal 2013 first quarter consolidated net sales were $693.4 million, compared to net sales of $745.1 million in the fiscal 2012 first quarter. The company said net sales in the fiscal 2013 period were negatively impacted by lead-related price decreases of approximately $26.8 million and foreign currency translation loss of $45.8 million.
Exide achieved higher unit volume in aftermarket sales for Transportation Europe and Rest of World (ROW), and realized higher original equipment (OE) unit sales in both Transportation segments when compared to the fiscal 2012 first quarter. Additionally, in the current-year period, the company recorded higher sales throughout its global Network Power channels.
In spite of lower selling and administrative costs and higher unit volumes in certain markets, operating income declined $12.6 million to $1.1 million. Core costs as a percent of LME continued to rise, principally in the Americas, the company stated. Input costs driven higher by the price of spent batteries ("cores") combined with lower LME based pricing led to compressed margins. The company estimates the impact of this to be about $15 million for the first quarter of fiscal 2013. Of this amount, approximately $5 million is related to lower profits on third-party lead sales.
President and CEO Jim Bolch stated, "The benefit of price increases announced earlier this year was insignificant in the fiscal first quarter, but will be realized in July and beyond. In addition, we will continue to reduce third party lead sales as we move to close our recycling operation in Frisco, Texas."
With the decline in profitability of the Americas business, the evaluation of the company’s deferred tax asset in the United States has resulted in the establishment of a valuation allowance in the amount of $87.6 million or ($1.14) per share, in the fiscal 2013 first quarter. This non-cash charge, when coupled with the difficult operating environment, resulted in a net loss for the quarter of $106.5 million or ($1.38) per share compared with the prior year net loss of $5.2 million or (7 cents) per share.
With respect to the tax valuation charge, Phil Damaska, executive vice president and CFO, stated, "The company continues to execute its strategy to right-size Transportation Americas through the announced closure of our Bristol, Tenn., battery plant and the closure and land sale of our Frisco, Texas, lead recycling facility. We believe these actions, among other ongoing initiatives, will return the overall Americas region to profitability and allow us to ultimately utilize this long-lived deferred tax benefit."
