##### 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 September 30, 2005
 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
(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
 þ o
 þ o
 o þ




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##### Table of Contents



EXIDE TECHNOLOGIES AND SUBSIDIARIES
TABLE OF CONTENTS
 PagePART I. FINANCIAL INFORMATIONItem 1 FINANCIAL STATEMENTS
    
    
    3CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
THREE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 (SUCCESSOR
COMPANY), FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2005 (SUCCESSOR
COMPANY), FOR THE PERIOD MAY 6, 2004 TO SEPTEMBER 30, 2004
(SUCCESSOR COMPANY) AND FOR THE PERIOD APRIL 1, 2004 TO MAY 5,
2004 (PREDECESSOR COMPANY)
    
    
    3CONDENSED CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30,
2005 AND MARCH 31, 2005 (SUCCESSOR COMPANY)
    
    
    5CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX
MONTHS ENDED SEPTEMBER 30, 2005 (SUCCESSOR COMPANY), FOR THE
PERIOD MAY 6, 2004 TO SEPTEMBER 30, 2004 (SUCCESSOR COMPANY),
AND FOR THE PERIOD APRIL 1, 2004 TO MAY 5, 2004 (PREDECESSOR
COMPANY)
    
    
    6NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    
    
    7Item 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
    
    
    20Item 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    30Item 4 CONTROLS AND PROCEDURES
    
    
    30PART II. OTHER INFORMATIONItem 1 LEGAL PROCEEDINGS
    
    
    32Item 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    32Item 6 EXHIBITS
    
    
    33SIGNATURES
    
    
    33EX-31.1 SECTION 302 CERTIFICATION OF THE CEOEX-31.2 SECTION 302 CERTIFICATION OF THE CFOEX-32 SECTION 906 CERTIFICATION OF THE CEO AND CFO
 2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 EXIDE TECHNOLOGIES AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited, in thousands, except per-share data)
 Successor
    
    
    SuccessorCompany
    
    
    Companyfor the
    
    
    for theThree Months
    
    
    Three MonthsEnded
    
    
    EndedSeptember 30, 2005
    
    
    September 30, 2004NET SALES
    
    $
    686,485
    
    
    $
    637,599COST OF SALES
    
    
    582,587
    
    
    
    542,587Gross profit
    
    
    103,898
    
    
    
    95,012EXPENSES:Selling, marketing and advertising
    
    
    67,615
    
    
    
    68,326General and administrative
    
    
    43,138
    
    
    
    37,847Restructuring and impairment
    
    
    6,640
    
    
    
    4,826Other expense (income) net
    
    
    1,412
    
    
    
    (9,161
    )Interest expense net
    
    
    16,658
    
    
    
    11,411135,463
    
    
    
    113,249Loss before reorganization items, income taxes and minority interest
    
    
    (31,565
    )
    
    
    (18,237
    )REORGANIZATION ITEMS, NET
    
    
    1,715
    
    
    
    1,725INCOME TAX BENEFIT
    
    
    (202
    )
    
    
    (2,874
    )MINORITY INTEREST
    
    
    (55
    )
    
    
    13Net loss
    
    $
    (33,023
    )
    
    $
    (17,101
    )NET LOSS PER SHAREBasic and Diluted
    
    $
    (1.32
    )
    
    $
    (0.68
    )WEIGHTED AVERAGE SHARESBasic and Diluted
    
    
    25,000
    
    
    
    25,000
  3




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EXIDE TECHNOLOGIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per-share data)
 SuccessorCompany
    
    
    Successor
    
    
    Predecessorfor the
    
    
    Company
    
    
    CompanySix Months
    
    
    for the Period
    
    
    for the PeriodEnded
    
    
    May 6, 2004 to
    
    
    April 1, 2004 toSeptember 30, 2005
    
    
    September 30, 2004
    
    
    May 5, 2004NET SALES
    
    $
    1,355,817
    
    
    $
    1,035,527
    
    
    $
    214,607COST OF SALES
    
    
    1,149,705
    
    
    
    875,716
    
    
    
    179,137Gross profit
    
    
    206,112
    
    
    
    159,811
    
    
    
    35,470EXPENSES:Selling, marketing and advertising
    
    
    138,687
    
    
    
    109,614
    
    
    
    24,504General and administrative
    
    
    86,877
    
    
    
    61,236
    
    
    
    17,940Restructuring and impairment
    
    
    9,540
    
    
    
    7,273
    
    
    
    602Other expense (income) net
    
    
    4,811
    
    
    
    (52,037
    )
    
    
    6,222Interest expense net
    
    
    32,758
    
    
    
    17,437
    
    
    
    8,870272,673
    
    
    
    143,523
    
    
    
    58,138Income (loss) before reorganization
items, income taxes and minority
interest
    
    
    (66,561
    )
    
    
    16,288
    
    
    
    (22,668
    )REORGANIZATION ITEMS, NET
    
    
    3,087
    
    
    
    3,418
    
    
    
    18,434FRESH START ACCOUNTING ADJUSTMENTS, NET
    
    
    
    
    
    
    
    
    
    
    (228,371
    )GAIN ON DISCHARGE OF LIABILITIES
SUBJECT TO COMPROMISE
    
    
    
    
    
    
    
    
    
    
    (1,558,839
    )INCOME TAX BENEFIT
    
    
    (956
    )
    
    
    (3,702
    )
    
    
    (2,482
    )MINORITY INTEREST
    
    
    40
    
    
    
    46
    
    
    
    26Net income (loss)
    
    $
    (68,732
    )
    
    $
    16,526
    
    
    $
    1,748,564NET INCOME (LOSS) PER SHAREBasic and Diluted
    
    $
    (2.75
    )
    
    $
    0.66
    
    
    $
    63.86WEIGHTED AVERAGE SHARESBasic and Diluted
    
    
    25,000
    
    
    
    25,000
    
    
    
    27,383
  4




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EXIDE TECHNOLOGIES AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (Unaudited, in thousands, except per-share data)
 Successor CompanySeptember 30, 2005
    
    
    March 31, 2005ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    30,085
    
    
    $
    76,696Restricted cash
    
    
    704
    
    
    
    1,323Receivables, net of allowance for doubtful accounts of $23,226 and $22,471
    
    
    640,485
    
    
    
    687,715Inventories
    
    
    406,158
    
    
    
    397,689Prepaid expenses and other
    
    
    32,946
    
    
    
    21,275Deferred financing costs, net
    
    
    1,761
    
    
    
    1,725Deferred income taxes
    
    
    3,755
    
    
    
    4,305Total current assets
    
    
    1,115,894
    
    
    
    1,190,728PROPERTY, PLANT AND EQUIPMENT, NET
    
    
    733,324
    
    
    
    799,763OTHER ASSETS:Intangible assets, net
    
    
    189,932
    
    
    
    192,854Investments in affiliates
    
    
    7,075
    
    
    
    9,010Deferred financing costs, net
    
    
    11,593
    
    
    
    12,784Deferred income taxes
    
    
    50,445
    
    
    
    55,896Other
    
    
    27,341
    
    
    
    29,745286,386
    
    
    
    300,289Total assets
    
    $
    2,135,604
    
    
    $
    2,290,780LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Short-term borrowings
    
    $
    13,317
    
    
    $
    1,595Current maturities of long-term debt
    
    
    59,667
    
    
    
    632,116Accounts payable
    
    
    297,116
    
    
    
    340,480Accrued expenses
    
    
    335,053
    
    
    
    385,521Warrants liability
    
    
    3,438
    
    
    
    11,188Total current liabilities
    
    
    708,591
    
    
    
    1,370,900LONG-TERM DEBT
    
    
    636,815
    
    
    
    20,047NONCURRENT RETIREMENT OBLIGATIONS
    
    
    313,702
    
    
    
    329,628NONCURRENT DEFERRED TAX LIABILITY
    
    
    26,709
    
    
    
    24,178OTHER NONCURRENT LIABILITIES
    
    
    102,359
    
    
    
    106,004Total liabilities
    
    
    1,788,176
    
    
    
    1,850,757COMMITMENTS AND CONTINGENCIES
    
    
    
    
    
    
    MINORITY INTEREST
    
    
    12,098
    
    
    
    12,764STOCKHOLDERS EQUITYPreferred stock, $0.01 par value, 1,000 shares authorized, 0 shares issued and outstanding
    
    
    
    
    
    
    Common stock, $0.01 par value, 61,500 shares authorized, 24,523 and 24,407 shares issued
and outstanding
    
    
    245
    
    
    
    234Additional paid-in capital
    
    
    888,312
    
    
    
    888,157Accumulated deficit
    
    
    (535,655
    )
    
    
    (466,923
    )Accumulated other comprehensive (loss) income
    
    
    (17,572
    )
    
    
    5,791Total stockholders equity
    
    
    335,330
    
    
    
    427,259Total liabilities and stockholders equity
    
    $
    2,135,604
    
    
    $
    2,290,780
  5




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EXIDE TECHNOLOGIES AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited, in thousands)
 SuccessorCompany
    
    
    Successor
    
    
    Predecessorfor the
    
    
    Company
    
    
    CompanySix months
    
    
    for the Period
    
    
    for the PeriodEnded
    
    
    May 6, 2004 to
    
    
    April 1, 2004 toSeptember 30, 2005
    
    
    September 30, 2004
    
    
    May 5, 2004CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss)
    
    $
    (68,732
    )
    
    $
    16,526
    
    
    $
    1,748,564Adjustments to reconcile net income (loss) to net
cash used in operating activitiesDepreciation and amortization
    
    
    60,343
    
    
    
    52,519
    
    
    
    7,848Gain on discharge of liabilities subject to compromise
    
    
    
    
    
    
    
    
    
    
    (1,558,839
    )Fresh Start accounting adjustments, net
    
    
    
    
    
    
    
    
    
    
    (228,371
    )Unrealized gain on Warrants
    
    
    (7,748
    )
    
    
    (55,675
    )
    
    
    Net loss on asset sales
    
    
    2,669
    
    
    
    11
    
    
    
    Provision for doubtful accounts
    
    
    3,357
    
    
    
    2,521
    
    
    
    473Deferred income taxes
    
    
    
    
    
    
    680
    
    
    
    Non-cash provision for restructuring
    
    
    448
    
    
    
    98
    
    
    
    18Reorganization items, net
    
    
    3,087
    
    
    
    3,418
    
    
    
    18,434Minority interest
    
    
    40
    
    
    
    46
    
    
    
    26Amortization of deferred financing costs
    
    
    897
    
    
    
    
    
    
    
    1,251Changes in assets and liabilities, excluding effects
of Fresh Start accounting, acquisitions and
divestituresReceivables
    
    
    12,176
    
    
    
    (12,849
    )
    
    
    45,924Inventories
    
    
    (23,497
    )
    
    
    (17,956
    )
    
    
    (10,873
    )Prepaid expenses and other
    
    
    (11,722
    )
    
    
    2,524
    
    
    
    286Payables
    
    
    (28,945
    )
    
    
    2,387
    
    
    
    (20,967
    )Accrued expenses
    
    
    (37,421
    )
    
    
    (19,315
    )
    
    
    (20,564
    )Noncurrent liabilities
    
    
    (4,587
    )
    
    
    915
    
    
    
    (294
    )Other, net
    
    
    14,896
    
    
    
    (4,938
    )
    
    
    9,898Net cash used in operating activities
    
    
    (84,739
    )
    
    
    (29,088
    )
    
    
    (7,186
    )CASH FLOWS FROM INVESTING ACTIVITIES:Capital expenditures
    
    
    (24,092
    )
    
    
    (26,018
    )
    
    
    (7,152
    )Proceeds from sales of assets
    
    
    11,333
    
    
    
    10,034
    
    
    
    2,800Net cash used in investing activities
    
    
    (12,759
    )
    
    
    (15,984
    )
    
    
    (4,352
    )CASH FLOWS FROM FINANCING ACTIVITIES:Increase in short-term borrowings
    
    
    12,420
    
    
    
    2,407
    
    
    
    2,425Repayments under Senior Notes
    
    
    
    
    
    
    
    
    
    
    (110,082
    )Borrowings under Credit Facility
    
    
    
    
    
    
    8,962
    
    
    
    621,258Repayments under Credit Facility
    
    
    
    
    
    
    
    
    
    
    (452,875
    )Currency swap
    
    
    (12,084
    )
    
    
    
    
    
    
    Increase (decrease) in other debt
    
    
    52,277
    
    
    
    659
    
    
    
    (2,412
    )Financing costs and other
    
    
    
    
    
    
    (681
    )
    
    
    (23,146
    )Net cash provided by financing activities
    
    
    52,613
    
    
    
    11,347
    
    
    
    35,168EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH
EQUIVALENTS
    
    
    (1,726
    )
    
    
    1,422
    
    
    
    (1,447
    )NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    (46,611
    )
    
    
    (32,303
    )
    
    
    22,183CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    76,696
    
    
    
    59,596
    
    
    
    37,413CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    30,085
    
    
    $
    27,293
    
    
    $
    59,596
  6




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EXIDE TECHNOLOGIES AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 September 30, 2005
(In thousands, except share and per-share data)
(Unaudited)
 (1) BASIS OF PRESENTATION
       7




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(2) FRESH START REPORTING
   (3) WARRANTS
  8




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(4) COMPREHENSIVE INCOME (LOSS)
  Three Months
    
    
    Three Months
    
    
    Six Months
    
    
    Period
    
    
    PeriodEnded
    
    
    Ended
    
    
    Ended
    
    
    May 6, 2004 to
    
    
    April 1, 2004 toSeptember 30, 2005
    
    
    September 30, 2004
    
    
    September 30, 2005
    
    
    September 30, 2004
    
    
    May 5, 2004Net income (loss)
    
    $
    (33,023
    )
    
    $
    (17,101
    )
    
    $
    (68,732
    )
    
    $
    16,526
    
    
    $
    1,748,564Additions and changes in fair
value of cash flow hedges
    
    
    
    
    
    
    930
    
    
    
    
    
    
    
    930
    
    
    
    Reclassification of cash flow
hedges to earnings
    
    
    
    
    
    
    (283
    )
    
    
    
    
    
    
    (283
    )
    
    
    Additions and changes in
minimum pension liability
    
    
    22
    
    
    
    
    
    
    
    279
    
    
    
    
    
    
    
    Change in cumulative
translation adjustment
    
    
    (2,851
    )
    
    
    9,842
    
    
    
    (23,642
    )
    
    
    3,788
    
    
    
    (7,591
    )Total comprehensive income
(loss)
    
    $
    (35,852
    )
    
    $
    (6,612
    )
    
    $
    (92,095
    )
    
    $
    20,961
    
    
    $
    1,740,973
 (5) REORGANIZATION ITEMS, NET
  Three Months
    
    
    Three Months
    
    
    Six Months
    
    
    Period
    
    
    PeriodEnded
    
    
    Ended
    
    
    Ended
    
    
    May 6, 2004 to
    
    
    April 1, 2004 toSeptember 30, 2005
    
    
    September 30, 2004
    
    
    September 30, 2005
    
    
    September 30, 2004
    
    
    May 5, 2004Professional fees
    
    $
    1,168
    
    
    $
    2,325
    
    
    $
    1,996
    
    
    $
    4,018
    
    
    $
    18,515Interest income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (81
    )Other
    
    
    547
    
    
    
    (600
    )
    
    
    1,091
    
    
    
    (600
    )
    
    
    Total reorganization items, net
    
    $
    1,715
    
    
    $
    1,725
    
    
    $
    3,087
    
    
    $
    3,418
    
    
    $
    18,434Gain on settlement of
liabilities subject to
compromise and
recapitalization (Note 2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,558,839
    )Fresh Start accounting
adjustments (Note 2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (228,371
    )Loss (gain) on reorganization
items
    
    $
    1,715
    
    
    $
    1,725
    
    
    $
    3,087
    
    
    $
    3,418
    
    
    $
    (1,768,776
    )
   Professional fees
  Interest income
  Other
  9




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(6) INTANGIBLE ASSETS, NET
  Trademarks and
    
    
    Trademarks andTradenames
    
    
    Tradenames
    
    
    Customer(not subject to amortization)
    
    
    (subject to amortization)
    
    
    relationships
    
    
    Technology
    
    
    TotalAs of March 31, 2005Gross Amount
    
    $
    56,331
    
    
    $
    12,813
    
    
    $
    105,968
    
    
    $
    23,781
    
    
    $
    198,893Accumulated Amortization
    
    
    
    
    
    
    (928
    )
    
    
    (4,029
    )
    
    
    (1,082
    )
    
    
    (6,039
    )Net
    
    $
    56,331
    
    
    $
    11,885
    
    
    $
    101,939
    
    
    $
    22,699
    
    
    $
    192,854As of September, 2005Gross Amount
    
    $
    56,331
    
    
    $
    12,813
    
    
    $
    106,339
    
    
    $
    23,781
    
    
    $
    199,264Accumulated Amortization
    
    
    
    
    
    
    (1,434
    )
    
    
    (6,227
    )
    
    
    (1,671
    )
    
    
    (9,332
    )Net
    
    $
    56,331
    
    
    $
    11,379
    
    
    $
    100,112
    
    
    $
    22,110
    
    
    $
    189,932
  (7) INVENTORIES
  September 30, 2005
    
    
    March 31, 2005Raw materials
    
    $
    68,948
    
    
    $
    62,552Work-in-process
    
    
    77,314
    
    
    
    76,097Finished goods
    
    
    259,896
    
    
    
    259,040$
    406,158
    
    
    $
    397,689
 (8) OTHER ASSETS
  September 30, 2005
    
    
    March 31, 2005Deposits
    
    $
    10,317
    
    
    $
    10,211Capitalized software, net
    
    
    8,075
    
    
    
    10,390Loan to affiliate
    
    
    4,930
    
    
    
    4,930Other
    
    
    4,019
    
    
    
    4,214$
    27,341
    
    
    $
    29,745
  (9) DEBT
   September 30, 2005
    
    
    March 31, 2005Senior Secured Credit Facility
    
    $
    283,976
    
    
    $
    266,47010.5% 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 11.0% due in
installments through 2015 (1)
    
    
    62,506
    
    
    
    35,693Total
    
    
    696,482
    
    
    
    652,163Lesscurrent maturities (2)
    
    
    59,667
    
    
    
    632,116$
    636,815
    
    
    $
    20,047
  
 (1)
    
    Includes various operating lines of credit and working
capital facilities maintained by certain of the
Companys non-U.S. subsidiaries. 10




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##### Table of Contents



(2)
    
    At March 31, 2005, the Company reclassified its
borrowings under the Credit Agreement, the 10.5% Senior
Secured Notes and the Floating Rate Convertible Senior
Subordinated Notes as current as a result of a default
under the Credit Agreement. During the first fiscal
quarter of 2006, the Company secured an amendment and
received a waiver of the default described above. With
the waiver, the long-term portion of the Credit
Agreement and the Notes no longer require classification
as current. (10) INTEREST EXPENSE, NET
   (11) OTHER (INCOME) EXPENSE, NET
  Three Months
    
    
    Three Months
    
    
    Six Months
    
    
    Period
    
    
    PeriodEnded
    
    
    Ended
    
    
    Ended
    
    
    May 6, 2004 to
    
    
    April 1, 2004 toSeptember 30, 2005
    
    
    September 30, 2004
    
    
    September 30, 2005
    
    
    September 30, 2004
    
    
    May 5, 2004Net loss on asset sales
    
    $
    1,024
    
    
    $
    11
    
    
    $
    2,669
    
    
    $
    11
    
    
    $
    Equity income
    
    
    (455
    )
    
    
    (413
    )
    
    
    (989
    )
    
    
    (633
    )
    
    
    (164
    )Currency loss
    
    
    1,360
    
    
    
    3,846
    
    
    
    11,953
    
    
    
    4,952
    
    
    
    6,283Loss (gain) on revaluation
of Warrants
    
    
    378
    
    
    
    (12,063
    )
    
    
    (7,748
    )
    
    
    (55,675
    )
    
    
    Other
    
    
    (895
    )
    
    
    (542
    )
    
    
    (1,074
    )
    
    
    (692
    )
    
    
    103$
    1,412
    
    
    $
    (9,161
    )
    
    $
    4,811
    
    
    $
    (52,037
    )
    
    $
    6,222
 (12) EMPLOYEE BENEFITS
  Three Months
    
    
    Three Months
    
    
    Six Months
    
    
    Period
    
    
    PeriodEnded
    
    
    Ended
    
    
    Ended
    
    
    May 6, 2004 to
    
    
    April 1, 2004 toSeptember 30, 2005
    
    
    September 30, 2004
    
    
    September 30, 2005
    
    
    September 30, 2004
    
    
    May 5, 2004Service cost
    
    $
    2,708
    
    
    $
    2,565
    
    
    $
    5,452
    
    
    $
    4,319
    
    
    $
    856Interest cost
    
    
    8,178
    
    
    
    8,428
    
    
    
    16,484
    
    
    
    14,064
    
    
    
    2,798Expected return on plan assets
    
    
    (5,299
    )
    
    
    (5,205
    )
    
    
    (10,669
    )
    
    
    (8,668
    )
    
    
    (1,638
    )Amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    839Net periodic benefit cost
    
    $
    5,587
    
    
    $
    5,788
    
    
    $
    11,267
    
    
    $
    9,715
    
    
    $
    2,855
  Three Months
    
    
    Three Months
    
    
    Six Months
    
    
    Period
    
    
    PeriodEnded
    
    
    Ended
    
    
    Ended
    
    
    May 6, 2004 to
    
    
    April 1, 2004 toSeptember 30, 2005
    
    
    September 30, 2004
    
    
    September 30, 2005
    
    
    September 30, 2004
    
    
    May 5, 2004Service cost
    
    $
    25
    
    
    $
    20
    
    
    $
    50
    
    
    $
    20
    
    
    $
    Interest cost
    
    
    335
    
    
    
    390
    
    
    
    669
    
    
    
    617
    
    
    
    131Expected return on plan assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (31
    )Net periodic benefit cost
    
    $
    360
    
    
    $
    410
    
    
    $
    719
    
    
    $
    637
    
    
    $
    100
  11




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##### Table of Contents



(13) ENVIRONMENTAL MATTERS
  (14) COMMITMENTS AND CONTINGENCIES
  Claims Reconciliation
    12




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##### Table of Contents



Historical Federal Plea Agreement
  Pre-Petition Litigation Settlements
  Private Party Lawsuits and other Legal Proceedings
    13




---



##### Table of Contents



14




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##### Table of Contents



Environmental Matters
   .
     15




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##### Table of Contents



Tampa, Florida
  Columbus, Georgia
  Sonalur, Portugal
   Guarantees
   Warranty
   Balance at March 31, 2005
    
    $
    49,030Accrual for warranties provided during the period
    
    
    23,424Settlements made (in cash or credit) during the period
    
    
    (24,129
    )Currency translation
    
    
    (1,502
    )Balance at September 30, 2005
    
    $
    46,823
 (15) RESTRUCTURING AND IMPAIRMENT
   16




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##### Table of Contents



Severance
    
    
    ClosureCosts
    
    
    Costs
    
    
    TotalBalance at March 31, 2005
    
    $
    27,018
    
    
    $
    9,137
    
    
    $
    36,155Charges, Six Months ended September 30, 2005
    
    
    7,202
    
    
    
    2,338
    
    
    
    9,540Payments and currency translation
    
    
    (19,882
    )
    
    
    (3,805
    )
    
    
    (23,687
    )Balance at September 30, 2005
    
    $
    14,338
    
    
    $
    7,670
    
    
    $
    22,008
  (16) NET INCOME (LOSS) PER SHARE
    (17) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
    17




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##### Table of Contents



conditional asset retirement obligation
 (18) SEGMENT INFORMATION
      For the Three Months Ended September 30, 2005Transportation (b)
    
    
    Industrial EnergyEurope and
    
    
    
    
    
    
    Europe andNorth America
    
    
    ROW
    
    
    North America
    
    
    ROW
    
    
    Other (a)
    
    
    ConsolidatedNet sales
    
    $
    225,981
    
    
    $
    187,906
    
    
    $
    73,045
    
    
    $
    199,553
    
    
    
    
    
    
    $
    686,485Gross profit
    
    
    28,923
    
    
    
    23,895
    
    
    
    14,051
    
    
    
    37,029
    
    
    
    
    
    
    
    103,898Income
(loss) before reorganization items,
income taxes and
minority
interest
    
    
    3,518
    
    
    
    4,582
    
    
    
    4,917
    
    
    
    7,559
    
    
    
    (52,141
    )
    
    
    (31,565
    )
 18




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##### Table of Contents



For the Three Months Ended September 30, 2004Transportation
    
    
    Industrial EnergyEurope and
    
    
    
    
    
    
    Europe andNorth America
    
    
    ROW
    
    
    North America
    
    
    ROW
    
    
    Other (a)
    
    
    ConsolidatedNet sales
    
    $
    215,127
    
    
    $
    189,242
    
    
    $
    52,351
    
    
    $
    180,879
    
    
    
    
    
    
    $
    637,599Gross profit
    
    
    31,201
    
    
    
    26,303
    
    
    
    11,374
    
    
    
    26,134
    
    
    
    
    
    
    
    95,012Income (loss) before
reorganization items,
income taxes and
minority
interest
    
    
    4,929
    
    
    
    5,668
    
    
    
    2,928
    
    
    
    (1,094
    )
    
    
    (30,668
    )
    
    
    (18,237
    )
 For the Six Months Ended September 30, 2005Transportation (b)
    
    
    Industrial EnergyEurope and
    
    
    
    
    
    
    Europe andNorth America
    
    
    ROW
    
    
    North America
    
    
    ROW
    
    
    Other (a)
    
    
    ConsolidatedNet sales
    
    $
    444,149
    
    
    $
    367,345
    
    
    $
    140,478
    
    
    $
    403,845
    
    
    
    
    
    
    $
    1,355,817Gross profit
    
    
    59,396
    
    
    
    42,661
    
    
    
    27,051
    
    
    
    77,004
    
    
    
    
    
    
    
    206,112Income (loss) before
reorganization items,
income taxes and
minority
interest
    
    
    7,600
    
    
    
    2,935
    
    
    
    9,286
    
    
    
    17,122
    
    
    
    (103,504
    )
    
    
    (66,561
    )
 For the Period May 6, 2004 to September 30, 2004Transportation
    
    
    Industrial EnergyEurope and
    
    
    
    
    
    
    Europe andNorthNorth America
    
    
    ROW
    
    
    America
    
    
    ROW
    
    
    Other (a)
    
    
    ConsolidatedNet sales
    
    $
    351,629
    
    
    $
    296,385
    
    
    $
    85,548
    
    
    $
    301,965
    
    
    
    
    
    
    $
    1,035,527Gross profit
    
    
    50,117
    
    
    
    41,294
    
    
    
    18,902
    
    
    
    49,498
    
    
    
    
    
    
    
    159,811Income (loss) before
reorganization items,
income taxes and
minority
interest
    
    
    9,891
    
    
    
    8,018
    
    
    
    5,588
    
    
    
    3,112
    
    
    
    (10,321
    )
    
    
    16,288
 For the Period April 1, 2004 to May 5, 2004Transportation
    
    
    Industrial EnergyEurope and
    
    
    
    
    
    
    Europe andNorth
    
    
    
    
    
    
    NorthAmerica
    
    
    ROW
    
    
    America
    
    
    ROW
    
    
    Other (a)
    
    
    ConsolidatedNet sales
    
    $
    75,299
    
    
    $
    58,927
    
    
    $
    19,193
    
    
    $
    61,188
    
    
    
    
    
    
    $
    214,607Gross profit
    
    
    11,121
    
    
    
    7,850
    
    
    
    4,775
    
    
    
    11,724
    
    
    
    
    
    
    
    35,470Income (loss) before
reorganization items,
income taxes and
minority
interest
    
    
    2,413
    
    
    
    691
    
    
    
    1,607
    
    
    
    1,914
    
    
    
    (29,293
    )
    
    
    (22,668
    )
 
 (a)
    
    Other includes shared services and corporate
expenses, interest expense, net, currency
remeasurement losses (gains), and gains on
revaluation of Warrants.(b)
    
    For the three months and six months ended September
30, 2005, gross profit and income (loss) before
reorganization items, income taxes and minority
interest for Transportation North America and
Industrial Energy North America reflect a change in
the allocation of lead costs between the two
segments as compared to the prior period. The
amounts for Industrial Energy North America would
have been higher and Transportation North America
lower by $1,470 and $3,072, respectively, if the
allocation change had not been made. 19




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##### Table of Contents



(19) STOCK-BASED COMPENSATION PLANS
  Three Months
    
    
    Three Months
    
    
    Six Months
    
    
    Period
    
    
    PeriodEnded
    
    
    Ended
    
    
    Ended
    
    
    May 6, 2004 to
    
    
    April 1, 2004 toSeptember 30, 2005
    
    
    September 30, 2004
    
    
    September 30, 2005
    
    
    September 30, 2004
    
    
    May 5, 2004Net income (loss), as reported
    
    $
    (33,023
    )
    
    $
    (17,101
    )
    
    $
    (68,732
    )
    
    $
    16,526
    
    
    $
    1,748,564Less: stock based compensation expense
determined under the fair value based
method
    
    
    (473
    )
    
    
    
    
    
    
    (473
    )
    
    
    
    
    
    
    (86
    )Pro forma, net income (loss)
    
    $
    (33,496
    )
    
    $
    (17,101
    )
    
    $
    (69,205
    )
    
    $
    16,526
    
    
    $
    1,748,478Basic and diluted (loss) per
share:As reported
    
    $
    (1.32
    )
    
    $
    (0.68
    )
    
    $
    (2.75
    )
    
    $
    0.66
    
    
    $
    63.86Pro forma
    
    $
    (1.34
    )
    
    $
    (0.68
    )
    
    $
    (2.77
    )
    
    $
    0.66
    
    
    $
    63.85
 
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 (In thousands, except per share data)
   Executive Overview  Business
    20




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Factors Which Affect the Companys Financial Performance
 Lead.
 Competition
 Exchange Rates
 Markets
 Seasonality and weather.
  Interest rates.
 Second Quarter of Fiscal 2006 Highlights and Outlook
    21




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##### Table of Contents



Critical Accounting Policies and Estimates
     22




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##### Table of Contents



Results of Operations
 Three months ended September 30, 2005 compared with three months ended September 30, 2004
 Overview
  Net Sales
      Gross Profit
      23




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##### Table of Contents



Expenses
            24




---



##### Table of Contents



Reorganization items
  Income Taxes
  Six months ended September 30, 2005 compared with six months ended September 30, 2004
 Overview
  Net Sales
      Gross Profit
   25




---



##### Table of Contents



Expenses
         26




---



##### Table of Contents



Reorganization items
  Gain on discharge of liabilities subject to compromise
  Fresh Start accounting adjustments, net
  Income Taxes
  Liquidity and Capital Resources
    27




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##### Table of Contents



28




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##### Table of Contents



Sources of Cash
     Uses of Cash
   29




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##### Table of Contents



Financial Instruments and Market Risk
    
 Item 3. Quantitative and Qualitative Disclosures About Market Risks
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  30




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##### Table of Contents



Changes in Internal Control Over Financial Reporting
     
    
    We are enhancing established policies and procedures for accounting
review of month-end close, account reconciliation processes, journal
entries, write-offs, restructuring related entries, impairment reviews
and tax related entries. These policies and procedures among many
others have been codified in a Global Financial Manual that will be
rolled out in early November, 2005, and;
    
    We have taken steps to reduce the complexity of our consolidation
processes, including push-down of responsibility for current
consolidation activities to the appropriate levels in the
organization.
  
    
    Improving our documentation and training related to policies and procedures for the controls related to
our significant accounts and processes;
    
    We have hired additional accounting personnel to focus on our ongoing remediation initiatives and
compliance efforts;
    
    Engaging expert resources to assist with worldwide tax planning and compliance;
 31




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##### Table of Contents




    
    Re-allocating and/or relocating duties of finance personnel to enhance review and monitoring procedures.
  CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR
PROVISION OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
     
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
  32




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##### Table of Contents



Name
    
    Votes For
    
    Votes WithheldMichael R. DAppolonia
Mark C. Demetree
David S. Ferguson
Phillip M. Martineau
John P. Reilly
Michael P. Ressner
Gordon A. Ulsh
Carroll R. Wetzel
Jerome B. York
    
    21,829,513
21,879,245
21,856,741
21,860,279
21,849,272
21,830,920
21,872,577
21,873,893
21,877,757
    
    184,207
134,475
156,979
153,441
164,448
182,800
141,143
139,827
135,963
  Vote For
    
    Vote Against
    
    Abstentions21,851,666
    
    113,204
    
    48,849
  Vote For
    
    Vote Against
    
    Abstentions20,420,221
    
    1,752,961
    
    12,737
  Vote For
    
    Vote Against
    
    Abstentions15,839,215
    
    114,012
    
    17,604
  Vote For
    
    Vote Against
    
    Abstentions15,064,737
    
    681,657
    
    224,437
  Vote For
    
    Vote Against
    
    Abstentions21,663,993
    
    97,415
    
    244,511
 
 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 J. Timothy Gargaro, 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.
 33




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SIGNATURES
  EXIDE TECHNOLOGIESBy:
    
    /S/ J. Timothy GargaroJ. Timothy GargaroExecutive Vice President and Chief Financial OfficerDate: November 9, 2005EXIDE TECHNOLOGIESBy:
    
    /S/ Phillip A. DamaskaPhillip A. DamaskaVice President and Corporate ControllerDate: November 9, 2005
 34