News

C&D Technologies Reports Fourth Quarter & Full Year Results

April 16, 2009 by Jeff Shepard

C&D Technologies, Inc. announced financial results for the fiscal 2009 fourth quarter and full year ended January 31, 2009. For the quarter, the company reported a consolidated net loss of $14.4 million, or $0.55 per diluted share compared to a loss of $10.3 million or $0.40 per diluted share in the year ago period.

According to the company, current quarter results reflect lower revenues, the unfavorable timing effect of the relationship between tolling (recycling of lead) and the London Metal Exchange (LME) market price of lead which dictates pricing in some of our larger customer contracts, significant costs associated with new product introductions and manufacturing start up costs, negative absorption as inventories were significantly reduced in the quarter, and higher warranty costs. These discrete unusual costs during the fourth quarter were estimated at approximately $6.0 million. Fourth quarter 2009 results also include $3.3 million of restructuring and impairment charges, $1.3 million for severance costs associated with previously announced headcount actions, as well as $2.0 million for impairment and additional closure costs for its closed facility in Conyers, Georgia. The year ago fourth quarter period included a net loss from discontinued operations of $4.1 million or $0.16 per diluted share.

Volumes in the fourth quarter of 2009 were up compared to the year ago quarter, as the company generally held or increased its leading market share position in its primary end markets in North America. Reported revenues in the quarter were driven down by the effect of lower lead costs on comparable product pricing. For the fourth quarter, revenues were $85.4 million compared to $94.5 million in the prior year’s fourth quarter. On a sequential basis, revenues declined from $93.8 million in the third quarter with approximately half of this reduction being pricing related and the balance being driven by volume reductions against a broad softening in the company’s end markets.

For the year, the company reported a net loss of $13.9 million, or $0.55 per diluted share, down from $18.5 million or $0.72 per diluted share in fiscal 2008. Results for the previous fiscal year include a net loss from discontinued operations of $16.4 million or $0.63 per diluted share. Revenues for fiscal 2009 were $365.5 million compared to $346.1 million in the prior year. The increase in fiscal 2009 revenues was due to both volume growth, as well as pricing. Results for the full year are inclusive of the impact of the restatement of second and third quarter cost of goods sold. The restatement did not impact prior year financial statements nor did it impact previously reported cash flows.

The company states that it continues to enjoy stability in its financial position and liquidity. For the year, cash flow from operations totaled $9.3 million, due to operational improvements as well as lower commodity prices. At year end, the company had approximately $35 million of remaining availability under its existing bank facility, which is committed through December 2010.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the year were a little under $13 million, which excludes the costs of severance, Conyers impairment and closure costs, fees for amendment of the company’s bank facility and the effect of currency re-measurement losses. Unadjusted, EBITDA for fiscal 2009 was approximately $8 million.