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Exide Technologies Management Discusses Q1 2013 Results - Earnings Call Transcript

Stocks in this article: XIDE

At this time, I'll turn the call over to Jim Bolch, President and Chief Executive Officer.

James R. Bolch

Thank you, Carol.

Please turn to Slide 3 for a view of our fiscal first quarter results. As we indicated in June, our first quarter was expected to be challenging in light of rising cost and availability of spent batteries. During the quarter, we've had success with many of our operational improvement initiatives, but these were unfortunately overshadowed by the negative factors of escalating input costs, the weaker euro and softer demand in certain markets. The new pricing we announced that went into effect for a large percentage of our North American customers had minimal impact to results in the first quarter due to timing. Excluding the negative impact of foreign currency translation and lead-related pricing, consolidated net sales were up about 3% compared to prior year period.

Operating income was $1.1 million compared to $13.6 million last year. The decrease was primarily due to higher commodity costs, principally the cost of spent batteries in the U.S. Excluding the tax valuation charge recorded in the U.S., fiscal 2013's first quarter net loss was $18.9 million or $0.25 per share compared to a net loss of $5.2 million or $0.07 per share in the prior year period. Phil will provide more details on the tax charge later during his commentary.

Please turn to Slide 4 for an update on our Transportation Americas business. We're on schedule with the closure of our Bristol, Tennessee, plant. As previously stated, this action is expected to improve operating earnings $20 million to $25 million beginning in the latter part of fiscal 2013. As we work to transition volume for Bristol, we have been successful in obtaining new pricing on a significant portion of our business with our OE customers. The new pricing includes a premium to reflect the rising core costs relative to LME. As part of this negotiation, we do expect to lose some unprofitable OE unit volume.

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