##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2008
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File Number 1-11263
 EXIDE TECHNOLOGIES
  Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    23-0552730
(I.R.S. Employer
Identification Number)13000 Deerfield Parkway, 
Building 200
Alpharetta, Georgia
(Address of principal executive offices)
    
    30004
(Zip Code)
 (678) 566-9000
(Registrants telephone number, including area code)
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
(Do not check if a smaller
reporting company)
    
    Smaller reporting company o
 þ o
 o þ




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##### 



EXIDE TECHNOLOGIES AND SUBSIDIARIES
TABLE OF CONTENTS
  
 PagePART I. FINANCIAL INFORMATION
    
    
    3Item 1 FINANCIAL STATEMENTS
    
    
    3CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTH PERIODS
ENDED JUNE 30, 2008 AND 2007
    
    
    3CONDENSED CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2008 AND MARCH 31, 2008
    
    
    4CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTH PERIODS
ENDED JUNE 30, 2008 AND 2007
    
    
    5NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    
    
    6Item 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
    
    
    16Item 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    25Item 4 CONTROLS AND PROCEDURES
    
    
    25PART II. OTHER INFORMATIONItem 1. LEGAL PROCEEDINGS
    
    
    27Item 1A. RISK FACTORS
    
    
    27Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    27Item 3. DEFAULTS UPON SENIOR SECURITIES
    
    
    27Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    27Item 5. OTHER INFORMATION
    
    
    27Item 6. EXHIBITS
    
    
    27SIGNATURES
    
    
    28EX-10.1 PERFORMANCE UNIT AWARD AGREEMENTEX-31.1 SECTION 302, CERTIFICATION OF GORDON A. ULSH, PRESIDENT AND CEOEX-31.2 SECTION 302, CERTIFICATION OF PHILLIP A. DAMASKA, EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICEREX-32 CERTIFICATIONS PURSUANT TO SECTION 906
  2




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PART I. FINANCIAL INFORMATION
 
 Item 1 . Financial Statements
 
 EXIDE TECHNOLOGIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per-share data)
 For the Three Months EndedJune 30, 2008
    
    
    June 30, 2007NET SALES
    
    $
    971,275
    
    
    $
    762,387COST OF SALES
    
    
    801,795
    
    
    
    643,718Gross profit
    
    
    169,480
    
    
    
    118,669EXPENSES:Selling, marketing and advertising
    
    
    78,856
    
    
    
    68,335General and administrative
    
    
    47,172
    
    
    
    43,649Restructuring
    
    
    2,223
    
    
    
    2,132Other expense (income), net
    
    
    7,823
    
    
    
    (3,541
    )Interest expense, net
    
    
    19,225
    
    
    
    21,352Loss on early extinguishment of debt
    
    
    
    
    
    
    21,342155,299
    
    
    
    153,269Income (loss) before reorganization items, income taxes,
and minority interest
    
    
    14,181
    
    
    
    (34,600
    )REORGANIZATION ITEMS, NET
    
    
    463
    
    
    
    442INCOME TAX PROVISION
    
    
    23,469
    
    
    
    217MINORITY INTEREST
    
    
    560
    
    
    
    423Net loss
    
    $
    (10,311
    )
    
    $
    (35,682
    )LOSS PER SHAREBasic and Diluted
    
    $
    (0.14
    )
    
    $
    (0.58
    )WEIGHTED AVERAGE SHARESBasic and Diluted
    
    
    75,376
    
    
    
    61,264
  3




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EXIDE TECHNOLOGIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except per-share data)
 June 30, 2008
    
    
    March 31, 2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    131,501
    
    
    $
    90,547Receivables, net of allowance for doubtful accounts of $31,871 and $33,630
    
    
    673,971
    
    
    
    782,944Inventories
    
    
    618,044
    
    
    
    583,593Prepaid expenses and other
    
    
    20,168
    
    
    
    17,829Deferred financing costs, net
    
    
    5,222
    
    
    
    5,215Deferred income taxes
    
    
    37,450
    
    
    
    36,853Total current assets
    
    
    1,486,356
    
    
    
    1,516,981Property, plant and equipment, net
    
    
    638,142
    
    
    
    649,526Other assets:Other intangibles, net
    
    
    205,010
    
    
    
    206,283Investments in affiliates
    
    
    6,688
    
    
    
    6,523Deferred financing costs, net
    
    
    16,787
    
    
    
    18,071Deferred income taxes
    
    
    46,015
    
    
    
    51,238Other
    
    
    43,898
    
    
    
    42,774318,398
    
    
    
    324,889Total assets
    
    $
    2,442,896
    
    
    $
    2,491,396LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Short-term borrowings
    
    $
    21,688
    
    
    $
    22,719Current maturities of long-term debt
    
    
    9,745
    
    
    
    9,875Accounts payable
    
    
    421,297
    
    
    
    468,240Accrued expenses
    
    
    326,408
    
    
    
    333,092Warrants liability
    
    
    17,957
    
    
    
    8,272Total current liabilities
    
    
    797,095
    
    
    
    842,198Long-term debt
    
    
    680,598
    
    
    
    683,601Noncurrent retirement obligations
    
    
    203,312
    
    
    
    212,438Deferred income taxes
    
    
    57,511
    
    
    
    44,407Other noncurrent liabilities
    
    
    146,490
    
    
    
    145,642Total liabilities
    
    
    1,885,006
    
    
    
    1,928,286Commitments and contingenciesMinority interest
    
    
    19,245
    
    
    
    18,772STOCKHOLDERS EQUITYPreferred stock, $0.01 par value, 1,000 shares authorized, 0 shares issued and
outstanding
    
    
    
    
    
    
    Common stock, $0.01 par value, 200,000 shares authorized, 75,316 and
75,278 shares issued and outstanding
    
    
    753
    
    
    
    753Additional paid-in capital
    
    
    1,106,684
    
    
    
    1,104,939Accumulated deficit
    
    
    (727,973
    )
    
    
    (717,662
    )Accumulated other comprehensive income
    
    
    159,181
    
    
    
    156,308Total stockholders equity
    
    
    538,645
    
    
    
    544,338Total liabilities and stockholders equity
    
    $
    2,442,896
    
    
    $
    2,491,396
  4




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EXIDE TECHNOLOGIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
 For the Three Months EndedJune 30, 2008
    
    
    June 30, 2007Cash Flows From Operating Activities:Net loss
    
    $
    (10,311
    )
    
    $
    (35,682
    )Adjustments to reconcile net loss to net cash provided by (used in)
operating activitiesDepreciation and amortization
    
    
    25,872
    
    
    
    26,393Unrealized loss on warrants
    
    
    9,685
    
    
    
    265Net loss (gain) on asset sales / impairments
    
    
    95
    
    
    
    (599
    )Deferred income taxes
    
    
    17,152
    
    
    
    (4,076
    )Provision for doubtful accounts
    
    
    (549
    )
    
    
    1,175Non-cash stock compensation
    
    
    1,280
    
    
    
    1,356Reorganization items, net
    
    
    463
    
    
    
    442Minority interest
    
    
    560
    
    
    
    423Amortization of deferred financing costs
    
    
    1,311
    
    
    
    999Loss on early extinguishment of debt
    
    
    
    
    
    
    21,342Currency gain
    
    
    (1,807
    )
    
    
    (2,518
    )Changes in assets and liabilities Receivables
    
    
    94,061
    
    
    
    17,719Inventories
    
    
    (32,671
    )
    
    
    (70,054
    )Prepaid expenses and other
    
    
    (2,301
    )
    
    
    (2,132
    )Payables
    
    
    (47,505
    )
    
    
    (5,980
    )Accrued expenses
    
    
    (7,449
    )
    
    
    9,175Noncurrent liabilities
    
    
    (8,048
    )
    
    
    (19,376
    )Other, net
    
    
    310
    
    
    
    1,718Net cash provided by (used in) operating activities
    
    
    40,148
    
    
    
    (59,410
    )Cash Flows From Investing Activities:Capital expenditures
    
    
    (11,767
    )
    
    
    (10,833
    )Proceeds from sales of assets
    
    
    16,425
    
    
    
    3,427Net cash provided by (used in) investing activities
    
    
    4,658
    
    
    
    (7,406
    )Cash Flows From Financing Activities:(Decrease) increase in short-term borrowings
    
    
    (1,491
    )
    
    
    548(Decrease) increase in borrowings under Senior Secured Credit Facility
    
    
    (779
    )
    
    
    66,695Common stock issuance
    
    
    466
    
    
    
    (Decrease) increase in other debt
    
    
    (2,045
    )
    
    
    1,956Financing costs and other
    
    
    
    
    
    
    (30,306
    )Net cash (used in) provided by financing activities
    
    
    (3,849
    )
    
    
    38,893Effect of Exchange Rate Changes on Cash and Cash Equivalents
    
    
    (3
    )
    
    
    1,052Net Increase (Decrease) In Cash and Cash Equivalents
    
    
    40,954
    
    
    
    (26,871
    )Cash and Cash Equivalents, Beginning of Period
    
    
    90,547
    
    
    
    76,211Cash and Cash Equivalents, End of Period
    
    $
    131,501
    
    
    $
    49,340Supplemental Disclosures of Cash Flow Information:Cash paid during the period Interest
    
    $
    10,076
    
    
    $
    11,538Income taxes (net of refunds)
    
    $
    492
    
    
    $
    971
  5




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EXIDE TECHNOLOGIES AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008
(Unaudited)
 (1) BASIS OF PRESENTATION
   (2) COMPREHENSIVE LOSS
  For the Three Months EndedJune 30, 2008
    
    
    June 30, 2007(In thousands)Net loss
    
    $
    (10,311
    )
    
    $
    (35,682
    )Defined benefit plans
    
    
    181
    
    
    
    (428
    )Cumulative translation adjustment
    
    
    (1,217
    )
    
    
    10,361Derivatives qualifying as hedges
    
    
    3,909
    
    
    
    Total comprehensive loss
    
    $
    (7,438
    )
    
    $
    (25,749
    )
 (3) ACCOUNTING FOR DERIVATIVES
 Accounting for Derivative Instruments and
Hedging Activities" , Accounting for Certain Derivative Instruments and
Certain Hedging Activities Amendment of Statement 133 on Derivative Instruments and
Hedging Activities
   6




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(4) INTANGIBLE ASSETS
  Trademarks and
    
    
    Trademarks andTradenames
    
    
    Tradenames(not subject to
    
    
    (subject to
    
    
    Customeramortization)
    
    
    amortization)
    
    
    relationships
    
    
    Technology
    
    
    Total(In thousands)As of June 30, 2008:Gross Amount
    
    $
    67,320
    
    
    $
    15,313
    
    
    $
    126,966
    
    
    $
    28,420
    
    
    $
    238,019Accumulated
Amortization
    
    
    
    
    
    
    (5,039
    )
    
    
    (22,097
    )
    
    
    (5,873
    )
    
    
    (33,009
    )Net
    
    $
    67,320
    
    
    $
    10,274
    
    
    $
    104,869
    
    
    $
    22,547
    
    
    $
    205,010As of March 31, 2008:Gross Amount
    
    $
    67,089
    
    
    $
    15,260
    
    
    $
    126,529
    
    
    $
    28,323
    
    
    $
    237,201Accumulated
Amortization
    
    
    
    
    
    
    (4,720
    )
    
    
    (20,696
    )
    
    
    (5,502
    )
    
    
    (30,918
    )Net
    
    $
    67,089
    
    
    $
    10,540
    
    
    $
    105,833
    
    
    $
    22,821
    
    
    $
    206,283
  (5) INVENTORIES
  June 30, 2008
    
    
    March 31, 2008(In thousands)Raw materials
    
    $
    83,367
    
    
    $
    71,779Work-in-process
    
    
    143,230
    
    
    
    115,840Finished goods
    
    
    391,447
    
    
    
    395,974$
    618,044
    
    
    $
    583,593
 (6) OTHER ASSETS
  June 30, 2008
    
    
    March 31, 2008(In thousands)Deposits (a)
    
    $
    12,337
    
    
    $
    12,631Capitalized software, net
    
    
    3,341
    
    
    
    3,711Loan to affiliate
    
    
    1,800
    
    
    
    1,811Retirement plans
    
    
    17,470
    
    
    
    17,391Other
    
    
    8,950
    
    
    
    7,230$
    43,898
    
    
    $
    42,774
 
 (a)
    
    Deposits principally represent amounts held by beneficiaries as cash collateral for the
Companys contingent obligations with respect to certain environmental matters, workers
compensation insurance, and operating lease commitments. 7




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(7) DEBT
   June 30, 2008
    
    
    March 31, 2008(In thousands)Senior Secured Credit Facility
    
    $
    305,299
    
    
    $
    306,39510.5% Senior Secured Notes due 2013
    
    
    290,000
    
    
    
    290,000Floating Rate Convertible Senior Subordinated Notes due 2013
    
    
    60,000
    
    
    
    60,000Other, including capital lease obligations and other loans at interest rates generally
ranging up to 11% due in installments through 2015
    
    
    35,044
    
    
    
    37,081Total
    
    
    690,343
    
    
    
    693,476Less  current maturities
    
    
    9,745
    
    
    
    9,875$
    680,598
    
    
    $
    683,601
  (8) INTEREST EXPENSE, NET
  (9) OTHER EXPENSE (INCOME), NET
  For the Three Months EndedJune 30, 2008
    
    
    June 30, 2007(In thousands)Net loss (gain) on asset sales / impairments
    
    $
    95
    
    
    $
    (599
    )Equity income
    
    
    (150
    )
    
    
    (183
    )Currency gain
    
    
    (1,807
    )
    
    
    (2,518
    )Loss on revaluation of warrants (a)
    
    
    9,685
    
    
    
    265Other
    
    
    
    
    
    
    (506
    )$
    7,823
    
    
    $
    (3,541
    )
 
 (a)
    
    The warrants entitle the holders to purchase an aggregate of up to approximately 6.7
million shares of new common stock at an exercise price of $29.84 per share. The warrants are
exercisable through May 5, 2011. In accordance with Emerging Issues Task Force abstract (EITF)
00-19 and Statement of Financial Accounting Standards 150, Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity, the warrants have been
marked-to-market based upon quoted market prices. Future results of operations may be subject to
volatility from changes in the market value of such warrants. 8




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(10) EMPLOYEE BENEFITS
  Pension BenefitsFor the Three Months EndedJune 30, 2008
    
    
    June 30, 2007(In thousands)Components of net periodic benefit cost:Service cost
    
    $
    1,179
    
    
    $
    1,531Interest cost
    
    
    9,882
    
    
    
    8,815Expected return on plan assets
    
    
    (7,985
    )
    
    
    (7,267
    )Amortization of:Prior service cost
    
    
    6
    
    
    
    5Actuarial gain
    
    
    (706
    )
    
    
    (369
    )Net periodic benefit cost
    
    $
    2,376
    
    
    $
    2,715
 Other Post-Retirement BenefitsFor the Three Months EndedJune 30, 2008
    
    
    June 30, 2007(In thousands)Components of net periodic benefit cost:Service cost
    
    $
    52
    
    
    $
    47Interest cost
    
    
    338
    
    
    
    371Amortization of:Prior service cost
    
    
    (96
    )
    
    
    Actuarial loss
    
    
    34
    
    
    
    18Net periodic benefit cost
    
    $
    328
    
    
    $
    436
  (11) COMMITMENTS AND CONTINGENCIES
 Claims Reconciliation
   9




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Private Party Lawsuits and other Legal Proceedings
     10




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Environmental Matters
   .
  11




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Tampa, Florida
  Columbus, Georgia
  Azambuja (SONALUR) Portugal
  12




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Guarantees
   Sales Returns and Allowances
   Balance at March 31, 2008
    
    $
    57,757Accrual for sales returns and allowances provided
    
    
    13,840Settlements made (in cash or credit), and currency translation
    
    
    (15,123
    )Balance at June 30, 2008
    
    $
    56,474
 (12) INCOME TAXES
   For the Three Months EndedJune 30, 2008
    
    
    June 30, 2007Federal statutory rate
    
    
    35.0
    %
    
    
    35.0
    %Change in valuation allowances
    
    
    130.5
    %
    
    
    -48.2
    %Revaluation of warrants
    
    
    24.7
    %
    
    
    0.3
    %Rate difference on foreign subsidiaries
    
    
    -13.4
    %
    
    
    12.2
    %Other, net
    
    
    -5.7
    %
    
    
    0.1
    %Effective tax rate
    
    
    171.1
    %
    
    
    -0.6
    %
   13




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for Uncertainty in Income Taxes  An Interpretation of SFAS
109
    (13) RESTRUCTURING
    Severance Costs
    
    
    Closure Costs
    
    
    Total(In thousands)Balance at March 31, 2008
    
    $
    1,788
    
    
    $
    3,282
    
    
    $
    5,070Restructuring Charges
    
    
    2,322
    
    
    
    (99
    )
    
    
    2,223Payments and Currency
Translation
    
    
    (1,965
    )
    
    
    (889
    )
    
    
    (2,854
    )Balance at June 30, 2008
    
    $
    2,145
    
    
    $
    2,294
    
    
    $
    4,439
  (14) LOSS PER SHARE
 Earnings Per Share
 14




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(15) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 Employers Accounting for Defined
Benefit Pension and other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106 and
132(R)
 Noncontrolling Interests in Consolidated
Financial Statementsan amendment of ARB No. 51 Business Combinations"
 Disclosures about Derivative Instruments and
Hedging Activities  an amendment of FASB Statement No. 133
 (16) FAIR VALUE MEASUREMENTS
 Fair Value Measurements
 
    
    Level 1 
    
    Observable inputs such as quoted prices in active markets for identical
assets and liabilities
    
    Level 2 
    
    Inputs other than quoted prices in active markets that are observable
either directly or indirectly, and
    
    Level 3 
    
    Inputs from valuation techniques in which one or more key value drivers
are not observable, and must be based on the reporting entitys own assumptions
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(17) SEGMENT INFORMATION
     For the Three Months Ended June 30, 2008Transportation
    
    
    IndustrialEurope
    
    
    
    
    
    
    Europe
    
    
    OtherAmericas
    
    
    and ROW
    
    
    Americas
    
    
    and ROW
    
    
    (a)
    
    
    Consolidated(In thousands)Net sales
    
    $
    306,376
    
    
    $
    275,873
    
    
    $
    89,196
    
    
    $
    299,830
    
    
    $
    
    
    
    $
    971,275Gross profit
    
    
    59,446
    
    
    
    30,431
    
    
    
    23,791
    
    
    
    55,812
    
    
    
    
    
    
    
    169,480Expenses
    
    
    32,754
    
    
    
    31,039
    
    
    
    9,966
    
    
    
    44,026
    
    
    
    37,514
    
    
    
    155,299Income (loss)
before reorganization
items, income taxes,
and minority interest
    
    
    26,692
    
    
    
    (608
    )
    
    
    13,825
    
    
    
    11,786
    
    
    
    (37,514
    )
    
    
    14,181
 For the Three Months Ended June 30, 2007Transportation
    
    
    IndustrialEurope
    
    
    
    
    
    
    Europe
    
    
    OtherAmericas
    
    
    and ROW
    
    
    Americas
    
    
    and ROW
    
    
    (a)
    
    
    Consolidated(In thousands)Net sales
    
    $
    251,029
    
    
    $
    212,709
    
    
    $
    65,274
    
    
    $
    233,375
    
    
    $
    
    
    
    $
    762,387Gross profit
    
    
    47,725
    
    
    
    22,149
    
    
    
    16,111
    
    
    
    32,684
    
    
    
    
    
    
    
    118,669Expenses
    
    
    31,027
    
    
    
    25,856
    
    
    
    10,106
    
    
    
    34,106
    
    
    
    52,174
    
    
    
    153,269Income (loss) before
reorganization
items, income taxes,
and minority interest
    
    
    16,698
    
    
    
    (3,707
    )
    
    
    6,005
    
    
    
    (1,422
    )
    
    
    (52,174
    )
    
    
    (34,600
    )
 
 (a)
    
    Other includes unallocated corporate expenses, interest expense, currency
remeasurement gain, and (gain) loss on revaluation of warrants. In the three months ended
June 30, 2007, Other also includes a $21.3 million loss on early extinguishment of debt. 
 Item 2
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
   16




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Executive Overview
    Factors Which Affect the Companys Financial Performance
 Lead and other Raw Materials.
 Energy Costs.
 Competition
 Exchange Rates
  Markets
 Seasonality and Weather.
 17




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##### Table of Contents



Interest Rates.
 First Quarter of Fiscal 2009 Highlights and Outlook
           Critical Accounting Policies and Estimates
  18




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##### Table of Contents



Results of Operations
 Three months ended June 30, 2008 compared with three months ended June 30, 2007
 Net Sales
  FAVORABLE / (UNFAVORABLE)For the Three Months Ended
    
    
    
    
    
    
    Currency
    
    
    Non-CurrencyJune 30, 2008
    
    
    June 30, 2007
    
    
    TOTAL
    
    
    Related
    
    
    Related(In thousands)TransportationAmericas
    
    $
    306,376
    
    
    $
    251,029
    
    
    $
    55,347
    
    
    $
    
    
    
    $
    55,347Europe & ROW
    
    
    275,873
    
    
    
    212,709
    
    
    
    63,164
    
    
    
    37,313
    
    
    
    25,851Industrial EnergyAmericas
    
    
    89,196
    
    
    
    65,274
    
    
    
    23,922
    
    
    
    
    
    
    
    23,922Europe & ROW
    
    
    299,830
    
    
    
    233,375
    
    
    
    66,455
    
    
    
    40,469
    
    
    
    25,986TOTAL
    
    $
    971,275
    
    
    $
    762,387
    
    
    $
    208,888
    
    
    $
    77,782
    
    
    $
    131,106
     Gross Profit
  19




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##### Table of Contents



For the Three Months Ended
    
    
    For the Three Months EndedJune 30, 2008
    
    
    June 30, 2007
    
    
    FAVORABLE / (UNFAVORABLE)Percent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    Currency
    
    
    Non-CurrencyTOTAL
    
    
    Net Sales
    
    
    TOTAL
    
    
    Net Sales
    
    
    TOTAL
    
    
    Related
    
    
    Related(In thousands)TransportationAmericas
    
    $
    59,446
    
    
    
    19.4
    %
    
    $
    47,725
    
    
    
    19.0
    %
    
    $
    11,721
    
    
    $
    
    
    
    $
    11,721Europe & ROW
    
    
    30,431
    
    
    
    11.0
    %
    
    
    22,149
    
    
    
    10.4
    %
    
    
    8,282
    
    
    
    4,171
    
    
    
    4,111Industrial EnergyAmericas
    
    
    23,791
    
    
    
    26.7
    %
    
    
    16,111
    
    
    
    24.7
    %
    
    
    7,680
    
    
    
    
    
    
    
    7,680Europe & ROW
    
    
    55,812
    
    
    
    18.6
    %
    
    
    32,684
    
    
    
    14.0
    %
    
    
    23,128
    
    
    
    7,508
    
    
    
    15,620TOTAL
    
    $
    169,480
    
    
    
    17.4
    %
    
    $
    118,669
    
    
    
    15.6
    %
    
    $
    50,811
    
    
    $
    11,679
    
    
    $
    39,132
     Expenses
  
    
    Selling, marketing, and advertising expenses increased $10.6 million, to $78.9 million
in the first quarter of fiscal 2009 from $68.3 million in the first quarter of fiscal 2008
due primarily to unfavorable currency translation of $6.1 million and higher distribution
costs as a result of the increase in diesel fuel.
 
    
    General and administrative expenses increased $3.6 million, to $47.2 million in the
first quarter of fiscal 2009 from $43.6 million in the first quarter of fiscal 2008. The
increase primarily resulted from the unfavorable currency translation of the Euro versus
the U.S. Dollar.
 
    
    Other expenses (income) were $7.8 million in the first quarter of fiscal 2009 versus
($3.5) million in the first quarter of fiscal 2008. The increase is primarily due to a
loss on revaluation of warrants of $9.7 million in the first quarter of fiscal 2009, an
increase of $9.4 million from $0.2 million recognized in the first quarter of fiscal 2008.
 
    
    Interest Expense decreased $2.2 million, to $19.2 million in the first quarter of fiscal
2009 from $21.4 million in the first quarter of fiscal 2008 primarily due to lower
borrowings and the favorable impact of lower interest rates on borrowings
under the Companys May 2007 Credit Agreement.
 
    
    First quarter fiscal 2008 expenses included a loss on early extinguishment of debt of
$21.3 million related to the Companys extinguishment of a prior credit facility with
proceeds from the Companys May 2007 Credit Agreement.
 20




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
    
    Foreign currency translation unfavorably impacted expenses by $12.2 million in the first
quarter of fiscal 2009.
 FAVORABLE / (UNFAVORABLE)For the Three Months Ended
    
    
    
    
    
    
    Currency
    
    
    Non-CurrencyJune 30, 2008
    
    
    June 30, 2007
    
    
    TOTAL
    
    
    Related
    
    
    Related(In thousands)TransportationAmericas
    
    $
    32,754
    
    
    $
    31,027
    
    
    $
    (1,727
    )
    
    $
    
    
    
    $
    (1,727
    )Europe & ROW
    
    
    31,039
    
    
    
    25,856
    
    
    
    (5,183
    )
    
    
    (4,163
    )
    
    
    (1,020
    )Industrial EnergyAmericas
    
    
    9,966
    
    
    
    10,106
    
    
    
    140
    
    
    
    
    
    
    
    140Europe & ROW
    
    
    44,026
    
    
    
    34,106
    
    
    
    (9,920
    )
    
    
    (5,995
    )
    
    
    (3,925
    )Unallocated expenses
    
    
    37,514
    
    
    
    52,174
    
    
    
    14,660
    
    
    
    (2,056
    )
    
    
    16,716TOTAL
    
    $
    155,299
    
    
    $
    153,269
    
    
    $
    (2,030
    )
    
    $
    (12,214
    )
    
    $
    10,184
      For the Three Months Ended
    
    
    FAVORABLEJune 30, 2008
    
    
    June 30, 2007
    
    
    (UNFAVORABLE)(In thousands)Corporate expenses
    
    $
    9,660
    
    
    $
    12,108
    
    
    $
    2,448Other (income) expense:Currency remeasurement gain
    
    
    (1,046
    )
    
    
    (2,905
    )
    
    
    (1,859
    )Loss on revaluation of warrants
    
    
    9,685
    
    
    
    264
    
    
    
    (9,421
    )Other
    
    
    (10
    )
    
    
    13
    
    
    
    23Interest, net
    
    
    19,225
    
    
    
    21,352
    
    
    
    2,127Loss on early extinguishment of
debt
    
    
    
    
    
    
    21,342
    
    
    
    21,342TOTAL
    
    $
    37,514
    
    
    $
    52,174
    
    
    $
    14,660
  21




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Income Taxes
 For the Three Months EndedJune 30, 2008
    
    
    June 30, 2007(In thousands)Pre-tax income (loss)
    
    $
    13,718
    
    
    $
    (35,042
    )Income tax provision
    
    
    23,469
    
    
    
    217Effective tax rate
    
    
    171.1
    %
    
    
    -0.6
    %
  Liquidity and Capital Resources
   The Revolving Loan
    22




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The Term Loan
         23




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##### Table of Contents



Sources of Cash
       Uses Of Cash
     Financial Instruments and Market Risk
   24




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##### Table of Contents



Accounts Receivable Factoring Arrangements
  
 Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risks
  
 Item 4.
    
    Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
   Changes in Internal Control Over Financial Reporting
  25




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##### Table of Contents



CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR
PROVISION OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
     26




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##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings
  
 Item 1A.
    
    Risk Factors
  
 Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
  (d) Maximum Number(c) Total Number of
    
    (or ApproximateShares (or Units)
    
    Dollar Value) ofPurchased as Part
    
    Shares (or Units)(a) Total Number of
    
    (b) Average Price
    
    of Publicly
    
    that May Yet BeShares (or Units)
    
    Paid per Share (or
    
    Announced Plans or
    
    Purchased Under thePeriod
    
    Purchased (1)
    
    Unit)
    
    Programs
    
    Plans or ProgramsApril 1 through April 30May 1 through May 31June 1 through June 30
    
    
    228
    
    
    $
    17.53
 
 (1)
    
    Acquired by the Company in exchange for payment of U.S. tax
obligations for certain participants in the Companys 2004
Stock Incentive Plan that elected to surrender a portion of
their shares in conjunction with vesting of restricted stock
awards. 
 Item 3.
    
    Defaults Upon Senior Securities
  
 Item 4.   Submission of Matters to a Vote of Security Holders
  
 Item 5.   Other Information
  
 Item 6.
    
    Exhibits
 10.1
    
    Performance Unit Award Agreement, dates as of May 15, 2008 by and
between the Company and Gordon A. Ulsh*31.1
    
    Certification of Gordon A. Ulsh, President and Chief Executive
Officer, pursuant to Section 302 of Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Phillip A. Damaska, Executive Vice
President and Chief Financial Officer, pursuant to Section 302 of
Sarbanes-Oxley Act of 2002.32
    
    Certifications pursuant to Section 906 of Sarbanes-Oxley Act of 2002.*
    
    Confidential treatment has been requested for portions of this exhibit
 27




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SIGNATURES
  EXIDE TECHNOLOGIESBy:
    /s/ Phillip A. DamaskaPhillip A. DamaskaExecutive Vice President and
Chief Financial OfficerDate: August 6, 2008


28