##### 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, 2007
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 Commission File Number 1-11263
 EXIDE TECHNOLOGIES
 (Exact Name of Registrant as Specified in Its Charter)
 Delaware
    
    23-0552730(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification Number)13000 Deerfield Parkway,
    
    30004Building 200
    
    (Zip Code)Alpharetta, Georgia(Address of principal executive offices)
 (678) 566-9000
(Registrants telephone number, including area code)
 þ o
  o þ 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 MONTHS ENDED JUNE 30, 2007 AND 2006
    
    
    3CONDENSED CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2007 AND MARCH 31, 2007
    
    
    4CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED JUNE 30, 2007 AND 2006
    
    
    5NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    
    
    6Item 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    18Item 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    26Item 4 CONTROLS AND PROCEDURES
    
    
    26PART II. OTHER INFORMATION
    
    
    29Item 1. LEGAL PROCEEDINGS
    
    
    29Item 1A. RISK FACTORS
    
    
    29Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    29Item 3. DEFAULTS UPON SENIOR SECURITIES
    
    
    30Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    30Item 5. OTHER INFORMATION
    
    
    30Item 6. EXHIBITS
    
    
    30SIGNATURES
    
    
    30EX-31.1 SECTION 302 CERTIFICATION OF THE CEOEX-31.2 SECTION 302 CERTIFICATION OF THE CFOEX-32 SECTION 906 CERTIFICATIONS OF THE CEO/CFO
  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, 2007
    
    
    June 30, 2006NET SALES
    
    $
    762,387
    
    
    $
    683,190COST OF SALES
    
    
    643,718
    
    
    
    573,511Gross profit
    
    
    118,669
    
    
    
    109,679EXPENSES:Selling, marketing and advertising
    
    
    68,335
    
    
    
    68,506General and administrative
    
    
    43,649
    
    
    
    45,994Restructuring
    
    
    2,132
    
    
    
    8,884Other (income) expense, net
    
    
    (3,541
    )
    
    
    (3,492
    )Interest expense, net
    
    
    21,352
    
    
    
    22,287Loss on early extinguishment of debt
    
    
    21,342
    
    
    
    153,269
    
    
    
    142,179Loss before reorganization items, income taxes, and minority interest
    
    
    (34,600
    )
    
    
    (32,500
    )REORGANIZATION ITEMS, NET
    
    
    442
    
    
    
    1,607INCOME TAX PROVISION
    
    
    217
    
    
    
    3,578MINORITY INTEREST
    
    
    423
    
    
    
    211Net loss
    
    $
    (35,682
    )
    
    $
    (37,896
    )NET LOSS PER SHAREBasic and Diluted
    
    $
    (0.59
    )
    
    $
    (1.48
    )WEIGHTED AVERAGE SHARESBasic and Diluted
    
    
    60,926
    
    
    
    25,635
  3




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EXIDE TECHNOLOGIES AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except per-share data)
 June 30, 2007
    
    
    March 31, 2007ASSETSCurrent assets:Cash and cash equivalents
    
    $
    49,340
    
    
    $
    76,211Receivables, net of allowance for doubtful accounts of $29,161 and $28,624
    
    
    629,967
    
    
    
    639,115Inventories
    
    
    487,660
    
    
    
    411,554Prepaid expenses and other
    
    
    22,624
    
    
    
    20,224Deferred financing costs, net
    
    
    4,612
    
    
    
    3,411Deferred income taxes
    
    
    26,413
    
    
    
    19,030Total current assets
    
    
    1,220,616
    
    
    
    1,169,545Property, plant and equipment, net
    
    
    639,341
    
    
    
    649,015Other assets:Other intangibles, net
    
    
    193,223
    
    
    
    191,762Investments in affiliates
    
    
    6,040
    
    
    
    5,282Deferred financing costs, net
    
    
    19,724
    
    
    
    12,908Deferred income taxes
    
    
    66,518
    
    
    
    67,006Other
    
    
    20,042
    
    
    
    24,706305,547
    
    
    
    301,664Total assets
    
    $
    2,165,504
    
    
    $
    2,120,224LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Short-term borrowings
    
    $
    14,946
    
    
    $
    13,951Current maturities of long-term debt
    
    
    3,973
    
    
    
    3,996Accounts payable
    
    
    358,684
    
    
    
    360,278Accrued expenses
    
    
    297,550
    
    
    
    299,157Warrants liability
    
    
    5,562
    
    
    
    5,297Total current liabilities
    
    
    680,715
    
    
    
    682,679Long-term debt
    
    
    736,858
    
    
    
    666,507Noncurrent retirement obligations
    
    
    255,274
    
    
    
    263,290Deferred income tax liability
    
    
    43,775
    
    
    
    41,232Other noncurrent liabilities
    
    
    131,832
    
    
    
    121,433Total liabilities
    
    
    1,848,454
    
    
    
    1,775,141Commitments and contingencies
    
    
    
    
    
    
    Minority interest
    
    
    15,137
    
    
    
    14,560STOCKHOLDERS EQUITYPreferred stock, $0.01 par value, 1,000 shares authorized, 0 shares issued and outstanding
    
    
    
    
    
    
    Common stock, $0.01 par value, 100,000 shares authorized, 61,210 and 60,676 shares issued and outstanding
    
    
    612
    
    
    
    607Additional paid-in capital
    
    
    1,009,802
    
    
    
    1,008,481Accumulated deficit
    
    
    (785,403
    )
    
    
    (745,534
    )Accumulated other comprehensive income
    
    
    76,902
    
    
    
    66,969Total stockholders equity
    
    
    301,913
    
    
    
    330,523Total liabilities and stockholders equity
    
    $
    2,165,504
    
    
    $
    2,120,224
  4




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EXIDE TECHNOLOGIES AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
 For the Three Months EndedJune 30, 2007
    
    
    June 30, 2006Cash Flows From Operating Activities:Net loss
    
    $
    (35,682
    )
    
    $
    (37,896
    )Adjustments to reconcile net loss to net cash (used in) provided by operating activitiesDepreciation and amortization
    
    
    26,393
    
    
    
    30,464Unrealized loss (gain) on warrants
    
    
    265
    
    
    
    (813
    )Net (gain) loss on asset sales / impairments
    
    
    (599
    )
    
    
    2,804Provision for doubtful accounts
    
    
    1,175
    
    
    
    1,956Non-cash stock compensation
    
    
    1,356
    
    
    
    400Reorganization items, net
    
    
    442
    
    
    
    1,607Minority interest
    
    
    423
    
    
    
    211Amortization of deferred financing costs
    
    
    999
    
    
    
    814Loss on early extinguishment of debt
    
    
    21,342
    
    
    
    Changes in assets and liabilities Receivables
    
    
    17,719
    
    
    
    47,526Inventories
    
    
    (70,054
    )
    
    
    (9,388
    )Prepaid expenses and other
    
    
    (2,132
    )
    
    
    4,643Payables
    
    
    (5,980
    )
    
    
    (19,520
    )Accrued expenses
    
    
    9,175
    
    
    
    (15,245
    )Noncurrent liabilities
    
    
    (19,376
    )
    
    
    (3,318
    )Other, net
    
    
    (4,876
    )
    
    
    (3,611
    )Net cash (used in) provided by operating activities
    
    
    (59,410
    )
    
    
    634Cash Flows From Investing Activities:Capital expenditures
    
    
    (10,833
    )
    
    
    (7,967
    )Proceeds from sales of assets
    
    
    3,427
    
    
    
    97Net cash used in investing activities
    
    
    (7,406
    )
    
    
    (7,870
    )Cash Flows From Financing Activities:Increase in short-term borrowings
    
    
    548
    
    
    
    9Borrowings under Senior Secured Credit Facility
    
    
    66,695
    
    
    
    13,125Increase (decrease) in other debt
    
    
    1,956
    
    
    
    (1,968
    )Financing costs and other
    
    
    (30,306
    )
    
    
    4Net cash provided by financing activities
    
    
    38,893
    
    
    
    11,170Effect of Exchange Rate Changes on Cash and Cash Equivalents
    
    
    1,052
    
    
    
    934Net (Decrease) Increase In Cash and Cash Equivalents
    
    
    (26,871
    )
    
    
    4,868Cash and Cash Equivalents, Beginning of Period
    
    
    76,211
    
    
    
    32,161Cash and Cash Equivalents, End of Period
    
    $
    49,340
    
    
    $
    37,029
  5




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EXIDE TECHNOLOGIES AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2007
(Unaudited)
 (1) BASIS OF PRESENTATION
   (2) COMPREHENSIVE LOSS
  For the Three Months EndedJune 30, 2007
    
    
    June 30, 2006(In thousands)Net loss
    
    $
    (35,682
    )
    
    $
    (37,896
    )Additions and changes to pension liability
    
    
    (428
    )
    
    
    (352
    )Change in cumulative translation adjustment
    
    
    10,361
    
    
    
    22,120Total comprehensive loss
    
    $
    (25,749
    )
    
    $
    (16,128
    )
 (3) REORGANIZATION ITEMS, NET
  For the Three Months EndedJune 30, 2007
    
    
    June 30, 2006(In thousands)Professional fees
    
    $
    398
    
    
    $
    830Other (a)
    
    
    44
    
    
    
    777Total reorganization items, net
    
    $
    442
    
    
    $
    1,607
  
 (a)
    
    Other primarily represents costs for the predecessor Companys D&O (director & officer)
insurance coverage.
 6




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(4) INTANGIBLE ASSETS
  Trademarks and
    
    
    Trademarks andTradenames (not
    
    
    Tradenames (subject to
    
    
    Customersubject to amortization)
    
    
    amortization)
    
    
    relationships
    
    
    Technology
    
    
    Total(In thousands)As of June 30, 2007:Gross Amount
    
    $
    61,077
    
    
    $
    13,892
    
    
    $
    115,292
    
    
    $
    25,784
    
    
    $
    216,045Accumulated Amortization
    
    
    
    
    
    
    (3,474
    )
    
    
    (15,299
    )
    
    
    (4,049
    )
    
    
    (22,822
    )Net
    
    $
    61,077
    
    
    $
    10,418
    
    
    $
    99,993
    
    
    $
    21,735
    
    
    $
    193,223As of March 31, 2007:Gross Amount
    
    $
    60,056
    
    
    $
    13,660
    
    
    $
    113,361
    
    
    $
    25,354
    
    
    $
    212,431Accumulated Amortization
    
    
    
    
    
    
    (3,147
    )
    
    
    (13,855
    )
    
    
    (3,667
    )
    
    
    (20,669
    )Net
    
    $
    60,056
    
    
    $
    10,513
    
    
    $
    99,506
    
    
    $
    21,687
    
    
    $
    191,762
  (5) INVENTORIES
  June 30, 2007
    
    
    March 31, 2007(In thousands)Raw materials
    
    $
    62,845
    
    
    $
    53,337Work-in-process
    
    
    115,399
    
    
    
    89,339Finished goods
    
    
    309,416
    
    
    
    268,878$
    487,660
    
    
    $
    411,554
 (6) OTHER ASSETS
  June 30, 2007
    
    
    March 31, 2007(In thousands)Deposits (a)
    
    $
    11,272
    
    
    $
    15,596Capitalized software, net
    
    
    2,847
    
    
    
    2,495Loan to affiliate
    
    
    2,736
    
    
    
    3,702Other
    
    
    3,187
    
    
    
    2,913$
    20,042
    
    
    $
    24,706
 
 (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) DEBT
   7




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June 30, 2007
    
    
    March 31, 2007(In thousands)Senior Secured Credit Facility
    
    $
    365,305
    
    
    $
    297,26310.5% 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
    
    
    25,526
    
    
    
    23,240Total
    
    
    740,831
    
    
    
    670,503Less  current maturities
    
    
    3,973
    
    
    
    3,996$
    736,858
    
    
    $
    666,507
   The Revolving Loan
    The Term Loan
    8




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(8) INTEREST EXPENSE, NET
  (9) OTHER (INCOME) EXPENSE, NET
  For the Three Months EndedJune 30, 2007
    
    
    June 30, 2006(In thousands)Net (gain) loss on asset sales / impairments
    
    $
    (599
    )
    
    $
    2,804Equity income
    
    
    (183
    )
    
    
    (19
    )Currency remeasurement (gain) loss
    
    
    (2,518
    )
    
    
    (5,588
    )Loss (gain) on revaluation of warrants (a)
    
    
    265
    
    
    
    (813
    )Other
    
    
    (506
    )
    
    
    124$
    (3,541
    )
    
    $
    (3,492
    )
 
 (a)
    
    The warrants entitle the holders to purchase up to 6.6 million shares of new common stock
at an exercise price of $30.31 per share. The warrants are exercisable through May 5, 2011. In
accordance with EITF 00-19 and SFAS 150, 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. (10) EMPLOYEE BENEFITS
  Pension BenefitsFor the Three Months EndedJune 30, 2007
    
    
    June 30, 2006(In thousands)Components of net periodic benefit cost:Service cost
    
    $
    1,531
    
    
    $
    2,223Interest cost
    
    
    8,815
    
    
    
    8,275Expected return on plan assets
    
    
    (7,267
    )
    
    
    (6,149
    )Amortization of:Prior service cost
    
    
    5
    
    
    
    4Actuarial gain
    
    
    (369
    )
    
    
    (292
    )Net periodic benefit cost
    
    $
    2,715
    
    
    $
    4,061
 9




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Other Post-Retirement BenefitsFor the Three Months EndedJune 30, 2007
    
    
    June 30, 2006(In thousands)Components of net periodic benefit cost:Service cost
    
    $
    47
    
    
    $
    42Interest cost
    
    
    371
    
    
    
    389Amortization of:Actuarial loss
    
    
    18
    
    
    
    53Net periodic benefit cost
    
    $
    436
    
    
    $
    484
     (11) COMMITMENTS AND CONTINGENCIES
 Claims Reconciliation
   10




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Historical Federal Plea Agreement
   Pre-Petition Litigation Settlements
  Private Party Lawsuits and other Legal Proceedings
  11




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12




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Environmental Matters
    13




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.
       Tampa, Florida
  14




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Columbus, Georgia
  Azambuja (SONALUR) Portugal
  Guarantees
   Sales Returns and Allowances
   Balance at March 31, 2007
    
    $
    48,526Accrual for sales returns and allowances provided during the period
    
    
    12,529Settlements made (in cash or credit), and currency translation during the period
    
    
    (10,967
    )Balance at June 30, 2007
    
    $
    50,088
 (12) INCOME TAXES
    15




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(13) RESTRUCTURING
    Severance Costs
    
    
    Closure Costs
    
    
    Total(In thousands)Balance at March 31, 2007
    
    $
    1,860
    
    
    $
    3,803
    
    
    $
    5,663Restructuring Charges
    
    
    1,139
    
    
    
    993
    
    
    
    2,132Payments and Currency Translation
    
    
    (1,214
    )
    
    
    (1,136
    )
    
    
    (2,350
    )Balance at June 30, 2007
    
    $
    1,785
    
    
    $
    3,660
    
    
    $
    5,445
  (14) NET LOSS PER SHARE
   (15) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 Fair Value Measurements
 16




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The Fair Value Option for Financial Assets and
Financial Liabilities, Including an Amendment of FASB Statement No. 115
 (16) SEGMENT INFORMATION
      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
    )
 For the Three Months Ended June 30, 2006Transportation
    
    IndustrialEurope
    
    
    
    
    
    Europe
    
    OtherAmericas
    
    and ROW
    
    Americas
    
    and ROW
    
    (a)
    
    Consolidated(In thousands)Net sales
    
    $
    214,509
    
    
    $
    182,753
    
    
    $
    72,949
    
    
    $
    212,979
    
    
    
    
    
    
    $
    683,190Gross profit
    
    
    32,934
    
    
    
    19,607
    
    
    
    17,611
    
    
    
    39,527
    
    
    
    
    
    
    
    109,679Expenses
    
    
    37,746
    
    
    
    25,750
    
    
    
    10,120
    
    
    
    35,892
    
    
    
    32,671
    
    
    
    142,179Income (loss)
before
reorganization
items, income
taxes, and minority
interest
    
    
    (4,812
    )
    
    
    (6,143
    )
    
    
    7,491
    
    
    
    3,635
    
    
    
    (32,671
    )
    
    
    (32,500
    )
 
 (a)
    
    Other includes unallocated corporate expenses, interest
expense, currency remeasurement loss (gain), and loss (gain)
on revaluation of warrants. Other also includes loss on
early extinguishment of debt for the three months ended June
30, 2007. 17




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(17) SUBSEQUENT EVENT
 th
 
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
   Executive Overview
    Factors Which Affect the Companys Financial Performance
 Lead and other Raw Materials.
 Energy Costs.
 Competition
 18




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Exchange Rates
  Markets
 Seasonality and Weather.
  Interest Rates.
 First Quarter of Fiscal 2008 Highlights and Outlook
      19




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Critical Accounting Policies and Estimates
   Results of Operations
 Three months ended June 30, 2007 compared with three months ended June 30, 2006
 Net Sales
  FAVORABLE (UNFAVORABLE)For the Three Months Ended
    
    
    
    
    
    
    Currency
    
    
    Non-CurrencyJune 30, 2007
    
    
    June 30, 2006
    
    
    TOTAL
    
    
    Related
    
    
    Related(In thousands)TransportationAmericas
    
    $
    251,029
    
    
    $
    214,509
    
    
    $
    36,520
    
    
    $
    
    
    
    $
    36,520Europe & ROW
    
    
    212,709
    
    
    
    182,753
    
    
    
    29,956
    
    
    
    15,097
    
    
    
    14,859Industrial EnergyAmericas
    
    
    65,274
    
    
    
    72,949
    
    
    
    (7,675
    )
    
    
    
    
    
    
    (7,675
    )Europe & ROW
    
    
    233,375
    
    
    
    212,979
    
    
    
    20,396
    
    
    
    16,564
    
    
    
    3,832TOTAL
    
    $
    762,387
    
    
    $
    683,190
    
    
    $
    79,197
    
    
    $
    31,661
    
    
    $
    47,536
   20




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Gross Profit
  For the Three Months Ended
    
    
    For the Three Months EndedJune 30, 2007
    
    
    June 30, 2006
    
    
    FAVORABLE / (UNFAVORABLE)Percent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    Currency
    
    
    Non-CurrencyTOTAL
    
    
    Net Sales
    
    
    TOTAL
    
    
    Net Sales
    
    
    TOTAL
    
    
    Related
    
    
    Related(In thousands)TransportationAmericas
    
    $
    47,725
    
    
    
    19.0
    %
    
    $
    32,934
    
    
    
    15.4
    %
    
    $
    14,791
    
    
    $
    
    
    
    $
    14,791Europe & ROW
    
    
    22,149
    
    
    
    10.4
    %
    
    
    19,607
    
    
    
    10.7
    %
    
    
    2,542
    
    
    
    1,531
    
    
    
    1,011Industrial EnergyAmericas
    
    
    16,111
    
    
    
    24.7
    %
    
    
    17,611
    
    
    
    24.1
    %
    
    
    (1,500
    )
    
    
    
    
    
    
    (1,500
    )Europe & ROW
    
    
    32,684
    
    
    
    14.0
    %
    
    
    39,527
    
    
    
    18.6
    %
    
    
    (6,843
    )
    
    
    2,227
    
    
    
    (9,070
    )TOTAL
    
    $
    118,669
    
    
    
    15.6
    %
    
    $
    109,679
    
    
    
    16.1
    %
    
    $
    8,990
    
    
    $
    3,758
    
    
    $
    5,232
     Expenses
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FAVORABLE / (UNFAVORABLE)For the Three Months Ended
    
    
    
    
    
    
    Currency
    
    
    Non-CurrencyJune 30, 2007
    
    
    June 30, 2006
    
    
    TOTAL
    
    
    Related
    
    
    Related(In thousands)TransportationAmericas
    
    $
    31,027
    
    
    $
    37,746
    
    
    $
    6,719
    
    
    
    
    
    
    $
    6,719Europe & ROW
    
    
    25,856
    
    
    
    25,750
    
    
    
    (106
    )
    
    
    (1,883
    )
    
    
    1,777Industrial EnergyAmericas
    
    
    10,106
    
    
    
    10,120
    
    
    
    14
    
    
    
    
    
    
    
    14Europe & ROW
    
    
    34,106
    
    
    
    35,892
    
    
    
    1,786
    
    
    
    (2,394
    )
    
    
    4,180Unallocated expenses
    
    
    52,174
    
    
    
    32,671
    
    
    
    (19,503
    )
    
    
    (1,667
    )
    
    
    (17,836
    )TOTAL
    
    $
    153,269
    
    
    $
    142,179
    
    
    $
    (11,090
    )
    
    $
    (5,944
    )
    
    $
    (5,146
    )
      (i)
    
    interest expense, net decreased $0.9 million principally due to lower interest rates
under the Companys new credit facility;(ii)
    
    currency translation unfavorably impacted unallocated expenses in the first quarter of
fiscal 2008 by approximately $1.7 million;(iii)
    
    corporate expenses in the first quarter of fiscal 2008 and 2007 were $12.1 million and
$16.8 million respectively. The decrease was primarily due to the inclusion in prior year expense
of $3.5 million of expenses for professional fees related to the potential sale of the Industrial
Europe and ROW business segment which the Company did not pursue further, and lower general and
administrative cost resulting from the Companys continued restructuring efforts.
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##### Table of Contents



(iv)
    
    included in Other (income) expense, net in the first quarter of fiscal 2008 and 2007,
respectively:
 
    
    foreign currency remeasurement gain of $2.5 million and $5.6 million;
    
    loss (gain) on revaluation of warrants of $0.3 million and ($0.8) million.
 Reorganization Items
  Income Taxes
  Liquidity and Capital Resources
   The Revolving Loan
   23




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The Term Loan
         24




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Sources Of Cash
     Uses Of Cash
       25




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Financial Instruments and Market Risk
   Accounts Receivable Factoring Arrangements
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risks
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
    26




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Changes in Internal Control Over Financial Reporting
  27




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CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR
PROVISION OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
     28




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PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
   
 Item 1A. Risk Factors
  
    
    The Company remains subject to a preliminary SEC inquiry.
    
    The Company is subject to fluctuations in exchange rates and other risks associated with
its non-U.S. operations which could adversely affect the Companys results of operations.
    
    The Companys liquidity is affected by the seasonality of its business. Warm winters and
cool summers adversely affect the Company.
    
    Decreased demand in the industries in which the Company operates may adversely affect
its business.
    
    The loss of the Companys sole supplier of polyethylene battery separators would have a
material adverse effect on the Companys business.
    
    Many of the industries in which the Company operates are cyclical.
    
    The Company is subject to pricing pressure from its larger customers.
    
    The Company faces increasing competition and pricing pressure from other companies in
its industries, and if the Company is unable to compete effectively with these competitors,
the Companys sales and profitability could be adversely affected.
    
    If the Company is not able to develop new products or improve upon its existing products
on a timely basis, the Companys business and financial condition could be adversely
affected.
    
    The Company may be adversely affected by the instability and uncertainty in the world
financial markets and the global economy, including the effects of turmoil in the Middle
East.
    
    The Company may be unable to successfully implement its business strategy, which could
adversely affect its results of operations and financial condition.
    
    The Company is subject to costly regulation in relation to environmental, health and
safety matters, which could adversely affect its business and results of operations.
    
    The Environmental Protection Agency (EPA) or state environmental agencies could take
the position that the Company has liability under environmental laws that were not
discharged in bankruptcy. To the extent these authorities are successful in disputing the
pre-petition nature of these claims, the Company could be required to perform remedial work
that has not yet been performed for alleged pre-petition contamination, which would have a
material adverse effect on the Companys financial condition, cash flows or results of
operations.
    
    The Company may be adversely affected by legal proceedings to which the Company is, or
may become, a party.
    
    Holders of the Companys common stock are subject to the risk of dilution of their
investment as the result of the issuance of additional shares of common stock and warrants
to purchase common stock to holders of pre-petition claims to the extent the reserve of
common stock and warrants established to satisfy such claims is insufficient.
    
    The Company has experienced significant increases in raw material prices, particularly
lead and further charges in the price of raw materials or in energy costs could have a
material adverse impact on the Company.
    
    The cost of resolving the Companys pre-petition disputed claims, including legal and
other professional fees involved in settling or litigating these matters, could have a
material adverse effect on its financial condition, cash flows and results of operations.
    
    Work stoppages or other labor issues at the Companys facilities or its customers or
suppliers facilities could adversely affect the Companys operations. The Companys
substantial indebtedness could adversely affect its financial condition.
    
    Restrictive covenants limit the Companys ability to operate its business and to pursue
its business strategies, and its failure to comply with these covenants could result in an
acceleration of its indebtedness. Holders of the Companys common stock are subject to the
risk of dilution of their investment as the result of the issuance of additional shares of
common stock and warrants to purchase common stock to holders of pre-petition claims to the
extent the reserve of common stock and warrants established to satisfy such claims is
insufficient.
    
    Holders of the Companys common stock are subject to the risk of dilution of their
investment as the result of the issuance of additional shares of common stock and warrants
to purchase common stock to holders of pre-petition claims to the extent the reserve of
common stock and warrants established to satisfy such claims is insufficient.
    
    The Companys Ability to Recognize the Benefits of Deferred Tax Assets is Dependent on
Future Cash Flows and Taxable Income
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
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Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
  31.1
    
    Certification of Gordon Ulsh, President and Chief Executive Officer,
pursuant to Section 302 of Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Francis M. Corby, Jr., 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.
 
 SIGNATURES
  EXIDE TECHNOLOGIESBy:
    
    /S/ Francis M. Corby, Jr.Francis M. Corby, Jr.Executive Vice President andChief Financial OfficerDate: August 7, 2007
 30