##### 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, 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
(State or other jurisdiction of 
incorporation or organization)
    
    23-0552730
(I.R.S. Employer
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 AND
SIX MONTH PERIODS ENDED SEPTEMBER 30, 2007 AND 2006
    
    
    3CONDENSED CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2007 AND
MARCH 31, 2007
    
    
    4CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS
ENDED SEPTEMBER 30, 2007 AND 2006
    
    
    5NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    
    
    6Item 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
    
    
    17Item 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    30Item 4 CONTROLS AND PROCEDURES
    
    
    30PART II. OTHER INFORMATION
    
    
    32Item 1. LEGAL PROCEEDINGS
    
    
    32Item 1A. RISK FACTORS
    
    
    32Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    32Item 3. DEFAULTS UPON SENIOR SECURITIES
    
    
    32Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    32Item 5. OTHER INFORMATION
    
    
    33Item 6. EXHIBITS
    
    
    33SIGNATURES
    
    
    34EX-3.1 AMENDED AND RESTATED CERTIFICATE OF INCORPORATIONEX-10.2 AMENDED AND RESTATED 2004 STOCK INCENTIVE PLANEX-31.1 SECTION 302 CERTIFICATION OF THE CEOEX-31.2 SECTION 302 CERTIFICATION OF THE CFOEX-32 SECTION 906 CERTIFICATIONS 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)
 For the Three Months Ended
    
    
    For the Six Months EndedSeptember 30, 2007
    
    
    September 30, 2006
    
    
    September 30, 2007
    
    
    September 30, 2006NET SALES
    
    $
    861,942
    
    
    $
    680,299
    
    
    $
    1,624,329
    
    
    $
    1,363,489COST OF SALES
    
    
    731,594
    
    
    
    574,897
    
    
    
    1,375,313
    
    
    
    1,148,409Gross profit
    
    
    130,348
    
    
    
    105,402
    
    
    
    249,016
    
    
    
    215,080EXPENSES:Selling, marketing and advertising
    
    
    68,299
    
    
    
    65,944
    
    
    
    136,633
    
    
    
    134,450General and administrative
    
    
    39,617
    
    
    
    36,393
    
    
    
    83,266
    
    
    
    82,387Restructuring
    
    
    2,550
    
    
    
    7,039
    
    
    
    4,682
    
    
    
    15,923Other (income) expense, net
    
    
    (10,520
    )
    
    
    6,204
    
    
    
    (14,061
    )
    
    
    2,712Interest expense, net
    
    
    21,271
    
    
    
    22,641
    
    
    
    42,623
    
    
    
    44,928Loss on early extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    21,342
    
    
    
    121,217
    
    
    
    138,221
    
    
    
    274,485
    
    
    
    280,400Income (loss) before reorganization items, income taxes,
and minority interest
    
    
    9,131
    
    
    
    (32,819
    )
    
    
    (25,469
    )
    
    
    (65,320
    )REORGANIZATION ITEMS, NET
    
    
    769
    
    
    
    964
    
    
    
    1,211
    
    
    
    2,570INCOME TAX PROVISION
    
    
    22,696
    
    
    
    1,294
    
    
    
    22,913
    
    
    
    4,872MINORITY INTEREST
    
    
    495
    
    
    
    32
    
    
    
    918
    
    
    
    243Net loss
    
    $
    (14,829
    )
    
    $
    (35,109
    )
    
    $
    (50,511
    )
    
    $
    (73,005
    )NET LOSS PER SHAREBasic and Diluted
    
    $
    (0.24
    )
    
    $
    (1.16
    )
    
    $
    (0.82
    )
    
    $
    (2.60
    )WEIGHTED AVERAGE SHARESBasic and Diluted
    
    
    61,717
    
    
    
    30,337
    
    
    
    61,492
    
    
    
    28,092
  3




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EXIDE TECHNOLOGIES AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (Unaudited, in thousands, except per-share data)
 September 30, 2007
    
    
    March 31, 2007ASSETSCurrent assets:Cash and cash equivalents
    
    $
    91,606
    
    
    $
    76,211Receivable from rights offering
    
    
    41,400
    
    
    
    Receivables, net of allowance for doubtful accounts of $30,434 and $28,624
    
    
    692,689
    
    
    
    639,115Inventories
    
    
    565,237
    
    
    
    411,554Prepaid expenses and other
    
    
    18,255
    
    
    
    20,224Deferred financing costs, net
    
    
    4,963
    
    
    
    3,411Deferred income taxes
    
    
    25,743
    
    
    
    19,030Total current assets
    
    
    1,439,893
    
    
    
    1,169,545Property, plant and equipment, net
    
    
    648,702
    
    
    
    649,015Other assets:Other intangibles, net
    
    
    198,393
    
    
    
    191,762Investments in affiliates
    
    
    6,287
    
    
    
    5,282Deferred financing costs, net
    
    
    19,870
    
    
    
    12,908Deferred income taxes
    
    
    53,100
    
    
    
    67,006Other
    
    
    21,288
    
    
    
    24,706Total other assets
    
    
    298,938
    
    
    
    301,664Total assets
    
    $
    2,387,533
    
    
    $
    2,120,224LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Short-term borrowings
    
    $
    19,782
    
    
    $
    13,951Current maturities of long-term debt
    
    
    8,217
    
    
    
    3,996Accounts payable
    
    
    427,918
    
    
    
    360,278Accrued expenses
    
    
    307,434
    
    
    
    299,157Warrants liability
    
    
    4,105
    
    
    
    5,297Total current liabilities
    
    
    767,456
    
    
    
    682,679Long-term debt
    
    
    773,195
    
    
    
    666,507Noncurrent retirement obligations
    
    
    250,332
    
    
    
    263,290Deferred income tax liability
    
    
    45,283
    
    
    
    41,232Other noncurrent liabilities
    
    
    140,145
    
    
    
    121,433Total liabilities
    
    
    1,976,411
    
    
    
    1,775,141Commitments and contingencies
    
    
    
    
    
    
    Minority interest
    
    
    16,426
    
    
    
    14,560STOCKHOLDERS EQUITYPreferred stock, $0.01 par value, 1,000 shares authorized, 0 shares issued and outstanding
    
    
    
    
    
    
    Common stock, $0.01 par value, 200,000 and 100,000 shares authorized, 75,259 and 60,676
shares issued and outstanding
    
    
    753
    
    
    
    607Additional paid-in capital
    
    
    1,101,924
    
    
    
    1,008,481Accumulated deficit
    
    
    (800,232
    )
    
    
    (745,534
    )Accumulated other comprehensive income
    
    
    92,251
    
    
    
    66,969Total stockholders equity
    
    
    394,696
    
    
    
    330,523Total liabilities and stockholders equity
    
    $
    2,387,533
    
    
    $
    2,120,224
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EXIDE TECHNOLOGIES AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited, in thousands)
 For the Six Months EndedSeptember 30, 2007
    
    
    September 30, 2006Cash Flows From Operating Activities:Net loss
    
    $
    (50,511
    )
    
    $
    (73,005
    )Adjustments to reconcile net loss to net cash used in operating
activitiesDepreciation and amortization
    
    
    50,713
    
    
    
    60,464Unrealized gain on warrants
    
    
    (1,192
    )
    
    
    (739
    )Net loss on asset sales / impairments
    
    
    103
    
    
    
    6,972Deferred income taxes
    
    
    11,798
    
    
    
    239Provision for doubtful accounts
    
    
    2,715
    
    
    
    4,701Non-cash stock compensation
    
    
    2,719
    
    
    
    1,164Reorganization items, net
    
    
    1,211
    
    
    
    2,570Minority interest
    
    
    918
    
    
    
    243Amortization of deferred financing costs
    
    
    2,270
    
    
    
    1,659Loss on early extinguishment of debt
    
    
    21,342
    
    
    
    Changes in assets and liabilities Receivables
    
    
    (20,529
    )
    
    
    62,225Inventories
    
    
    (129,202
    )
    
    
    8,875Prepaid expenses and other
    
    
    2,629
    
    
    
    2,459Payables
    
    
    48,847
    
    
    
    (30,089
    )Accrued expenses
    
    
    5,401
    
    
    
    (24,008
    )Noncurrent liabilities
    
    
    (26,266
    )
    
    
    (33,301
    )Other, net
    
    
    (10,242
    )
    
    
    (3,943
    )Net cash used in operating activities
    
    
    (87,276
    )
    
    
    (13,514
    )Cash Flows From Investing Activities:Capital expenditures
    
    
    (23,986
    )
    
    
    (15,602
    )Proceeds from sales of assets
    
    
    3,658
    
    
    
    2,498Net cash used in investing activities
    
    
    (20,328
    )
    
    
    (13,104
    )Cash Flows From Financing Activities:Increase (decrease) in short-term borrowings
    
    
    4,432
    
    
    
    (154
    )Increase (decrease) in borrowings under Senior Secured Credit Facility
    
    
    94,387
    
    
    
    (26,545
    )Increase (decrease) in other debt
    
    
    3,784
    
    
    
    (3,764
    )Financing costs and other
    
    
    (31,649
    )
    
    
    (3
    )Net proceeds from rights offering and private equity sale
    
    
    49,528
    
    
    
    117,871Net cash provided by financing activities
    
    
    120,482
    
    
    
    87,405Effect of Exchange Rate Changes on Cash and Cash Equivalents
    
    
    2,517
    
    
    
    940Net Increase In Cash and Cash Equivalents
    
    
    15,395
    
    
    
    61,727Cash and Cash Equivalents, Beginning of Period
    
    
    76,211
    
    
    
    32,161Cash and Cash Equivalents, End of Period
    
    $
    91,606
    
    
    $
    93,888Supplemental Disclosures of Cash Flow Information:Cash paid during the period -Interest
    
    $
    32,158
    
    
    $
    37,503Income taxes (net of refunds)
    
    
    8,173
    
    
    
    2,926Supplemental Disclosures of Non-Cash Financing Activities:Receivable from rights offering
    
    $
    41,400
    
    
    $
    
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EXIDE TECHNOLOGIES AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 September 30, 2007
 (Unaudited)
 (1) BASIS OF PRESENTATION
   (2) COMPREHENSIVE INCOME (LOSS)
  For the Three Months Ended
    
    
    For the Six Months EndedSeptember 30, 2007
    
    
    September 30, 2006
    
    
    September 30, 2007
    
    
    September 30, 2006(In thousands)Net loss
    
    $
    (14,829
    )
    
    $
    (35,109
    )
    
    $
    (50,511
    )
    
    $
    (73,005
    )Additions and changes to pension liability
    
    
    (1,237
    )
    
    
    61
    
    
    
    (1,665
    )
    
    
    (291
    )Change in cumulative translation adjustment
    
    
    16,551
    
    
    
    (99
    )
    
    
    26,947
    
    
    
    22,021Total comprehensive income (loss)
    
    $
    485
    
    
    $
    (35,147
    )
    
    $
    (25,229
    )
    
    $
    (51,275
    )
 (3) INTANGIBLE ASSETS
  Trademarks and
    
    
    Trademarks andTradenames
    
    
    Tradenames(not subject to
    
    
    (subject to
    
    
    Customeramortization)
    
    
    amortization)
    
    
    relationships
    
    
    Technology
    
    
    Total(In thousands)As of September 30, 2007:Gross Amount
    
    $
    63,306
    
    
    $
    14,399
    
    
    $
    119,421
    
    
    $
    26,725
    
    
    $
    223,851Accumulated Amortization
    
    
    
    
    
    
    (3,885
    )
    
    
    (17,044
    )
    
    
    (4,529
    )
    
    
    (25,458
    )Net
    
    $
    63,306
    
    
    $
    10,514
    
    
    $
    102,377
    
    
    $
    22,196
    
    
    $
    198,393As 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
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(4) INVENTORIES
  September 30, 2007
    
    
    March 31, 2007(In thousands)Raw materials
    
    $
    72,790
    
    
    $
    53,337Work-in-process
    
    
    129,567
    
    
    
    89,339Finished goods
    
    
    362,880
    
    
    
    268,878$
    565,237
    
    
    $
    411,554
 (5) OTHER ASSETS
  September 30, 2007
    
    
    March 31, 2007(In thousands)Deposits (a)
    
    $
    11,856
    
    
    $
    15,596Capitalized software, net
    
    
    3,388
    
    
    
    2,495Loan to affiliate
    
    
    2,741
    
    
    
    3,702Other
    
    
    3,303
    
    
    
    2,913$
    21,288
    
    
    $
    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. (6) DEBT
   September 30, 2007
    
    
    March 31, 2007(In thousands)Senior Secured Credit Facility
    
    $
    400,058
    
    
    $
    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
    
    
    31,354
    
    
    
    23,240Total
    
    
    781,412
    
    
    
    670,503Less  current maturities
    
    
    8,217
    
    
    
    3,996Total Long Term Debt
    
    $
    773,195
    
    
    $
    666,507
   7




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The Revolving Loan
    The Term Loan
     (7) INTEREST EXPENSE, NET
  8




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(8) OTHER (INCOME) EXPENSE, NET
  For the Three Months Ended
    
    
    For the Six Months EndedSeptember 30, 2007
    
    
    September 30, 2006
    
    
    September 30, 2007
    
    
    September 30, 2006(In thousands)Net loss on asset sales / impairments
    
    $
    702
    
    
    $
    4,169
    
    
    $
    103
    
    
    $
    6,972Equity income
    
    
    (126
    )
    
    
    (331
    )
    
    
    (309
    )
    
    
    (350
    )Currency remeasurement (gain) loss
    
    
    (9,599
    )
    
    
    1,387
    
    
    
    (12,117
    )
    
    
    (4,202
    )(Gain) loss on revaluation of
warrants (a)
    
    
    (1,457
    )
    
    
    74
    
    
    
    (1,192
    )
    
    
    (739
    )Other
    
    
    (40
    )
    
    
    905
    
    
    
    (546
    )
    
    
    1,031$
    (10,520
    )
    
    $
    6,204
    
    
    $
    (14,061
    )
    
    $
    2,712
 
 (a)
    
    The warrants entitle the holders to purchase 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 (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. (9) EMPLOYEE BENEFITS
  Pension BenefitsFor the Three Months Ended
    
    
    For the Six Months EndedSeptember 30, 2007
    
    
    September 30, 2006
    
    
    September 30, 2007
    
    
    September 30, 2006(In thousands)Components of net periodic benefit cost:Service cost
    
    $
    1,091
    
    
    $
    2,249
    
    
    $
    2,622
    
    
    $
    4,472Interest cost
    
    
    8,903
    
    
    
    8,346
    
    
    
    17,718
    
    
    
    16,621Expected return on plan assets
    
    
    (7,329
    )
    
    
    (6,206
    )
    
    
    (14,596
    )
    
    
    (12,355
    )Amortization of:Prior service cost
    
    
    5
    
    
    
    5
    
    
    
    10
    
    
    
    10Actuarial loss
    
    
    (388
    )
    
    
    (300
    )
    
    
    (757
    )
    
    
    (592
    )Net periodic benefit cost
    
    $
    2,282
    
    
    $
    4,094
    
    
    $
    4,997
    
    
    $
    8,156
 Other Post-Retirement BenefitsFor the Three Months Ended
    
    
    For the Six Months EndedSeptember 30, 2007
    
    
    September 30, 2006
    
    
    September 30, 2007
    
    
    September 30, 2006(In thousands)Components of net periodic benefit cost:Service cost
    
    $
    49
    
    
    $
    42
    
    
    $
    97
    
    
    $
    84Interest cost
    
    
    374
    
    
    
    390
    
    
    
    745
    
    
    
    780Amortization of:Actuarial loss
    
    
    18
    
    
    
    53
    
    
    
    37
    
    
    
    106Net periodic benefit cost
    
    $
    441
    
    
    $
    485
    
    
    $
    879
    
    
    $
    970
   9




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(10) COMMITMENTS AND CONTINGENCIES
 Claims Reconciliation
     Private Party Lawsuits and other Legal Proceedings
  10




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11




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Environmental Matters
   .
  12




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Tampa, Florida
  Columbus, Georgia
  Azambuja (SONALUR) Portugal
  13




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Guarantees
   Sales Returns and Allowances
   Balance at March 31, 2007
    
    $
    48,526Accrual for sales returns and allowances provided during the period
    
    
    29,359Settlements made (in cash or credit), and currency translation during the period
    
    
    (25,410
    )Balance at September 30, 2007
    
    $
    52,475
 (11) INCOME TAXES
        14




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(12) RESTRUCTURING
    Severance Costs
    
    
    Closure Costs
    
    
    Total(In thousands)Balance at March 31, 2007
    
    $
    1,860
    
    
    $
    3,803
    
    
    $
    5,663Restructuring Charges
    
    
    2,537
    
    
    
    2,145
    
    
    
    4,682Payments and Currency Translation
    
    
    (2,838
    )
    
    
    (2,402
    )
    
    
    (5,240
    )Balance at September 30, 2007
    
    $
    1,559
    
    
    $
    3,546
    
    
    $
    5,105
  (13) NET LOSS PER SHARE
    (14) RIGHTS OFFERING
  15




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(15) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 Fair Value Measurements
 The Fair Value Option for Financial Assets and
Financial Liabilities, Including an Amendment of FASB Statement No. 115
 (16) SEGMENT INFORMATION
     16




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For the Three Months Ended September 30, 2007Transportation
    
    IndustrialEurope
    
    
    
    
    
    Europe
    
    OtherAmericas
    
    and ROW
    
    Americas
    
    and ROW
    
    (a)
    
    Consolidated(In thousands)Net sales
    
    $
    275,768
    
    
    $
    256,571
    
    
    $
    72,995
    
    
    $
    256,608
    
    
    $
    
    
    
    $
    861,942Gross profit
    
    
    49,519
    
    
    
    32,594
    
    
    
    18,707
    
    
    
    31,922
    
    
    
    (2,394
    )
    
    
    130,348Expenses
    
    
    32,543
    
    
    
    24,938
    
    
    
    9,151
    
    
    
    34,702
    
    
    
    19,883
    
    
    
    121,217Income (loss)
before
reorganization
items, income
taxes, and
minority
interest
    
    
    16,976
    
    
    
    7,656
    
    
    
    9,556
    
    
    
    (2,780
    )
    
    
    (22,277
    )
    
    
    9,131
 For the Three Months Ended September 30, 2006Transportation
    
    IndustrialEurope
    
    
    
    
    
    Europe
    
    OtherAmericas
    
    and ROW
    
    Americas
    
    and ROW
    
    (a)
    
    Consolidated(In thousands)Net sales
    
    $
    227,711
    
    
    $
    186,937
    
    
    $
    64,972
    
    
    $
    200,679
    
    
    $
    
    
    
    $
    680,299Gross profit
    
    
    36,683
    
    
    
    21,395
    
    
    
    14,045
    
    
    
    33,279
    
    
    
    
    
    
    
    105,402Expenses
    
    
    30,859
    
    
    
    28,587
    
    
    
    8,732
    
    
    
    34,397
    
    
    
    35,646
    
    
    
    138,221Income (loss)
before
reorganization
items, income
taxes, and
minority
interest
    
    
    5,824
    
    
    
    (7,192
    )
    
    
    5,313
    
    
    
    (1,118
    )
    
    
    (35,646
    )
    
    
    (32,819
    )
 For the Six Months Ended September 30, 2007Transportation
    
    IndustrialEurope
    
    
    
    
    
    Europe
    
    OtherAmericas
    
    and ROW
    
    Americas
    
    and ROW
    
    (a)
    
    Consolidated(In thousands)Net sales
    
    $
    526,797
    
    
    $
    469,280
    
    
    $
    138,269
    
    
    $
    489,983
    
    
    $
    
    
    
    $
    1,624,329Gross profit
    
    
    97,244
    
    
    
    54,743
    
    
    
    34,818
    
    
    
    64,605
    
    
    
    (2,394
    )
    
    
    249,016Expenses
    
    
    63,570
    
    
    
    50,792
    
    
    
    19,257
    
    
    
    68,808
    
    
    
    72,058
    
    
    
    274,485Income (loss)
before
reorganization
items, income
taxes, and
minority
interest
    
    
    33,674
    
    
    
    3,951
    
    
    
    15,561
    
    
    
    (4,203
    )
    
    
    (74,452
    )
    
    
    (25,469
    )
 For the Six Months Ended September 30, 2006Transportation
    
    IndustrialEurope
    
    
    
    
    
    Europe
    
    OtherAmericas
    
    and ROW
    
    Americas
    
    and ROW
    
    (a)
    
    Consolidated(In thousands)Net sales
    
    $
    442,221
    
    
    $
    369,688
    
    
    $
    137,921
    
    
    $
    413,659
    
    
    $
    
    
    
    $
    1,363,489Gross profit
    
    
    69,617
    
    
    
    41,002
    
    
    
    31,656
    
    
    
    72,805
    
    
    
    
    
    
    
    215,080Expenses
    
    
    68,605
    
    
    
    54,337
    
    
    
    18,852
    
    
    
    70,289
    
    
    
    68,317
    
    
    
    280,400Income (loss)
before
reorganization
items, income
taxes, and
minority
interest
    
    
    1,012
    
    
    
    (13,335
    )
    
    
    12,804
    
    
    
    2,516
    
    
    
    (68,317
    )
    
    
    (65,320
    )
 
 (a)
    
    Other includes unallocated corporate expenses, interest expense,
currency remeasurement loss (gain), and loss (gain) on revaluation of
warrants. Other also includes a $21.3 million loss on early
extinguishment of debt and $2.4 million for additional estimated
environmental remediation for a previously closed facility recorded
in the six months ended September 30, 2007. 
 Item 2 Managements Discussion and Analysis of Financial Condition and Results of Operations
  17




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##### Table of Contents



Executive Overview
    Factors Which Affect the Companys Financial Performance
 Lead and other Raw Materials.
 Energy Costs.
 Competition
 Exchange Rates
  Markets
 18




---



##### Table of Contents



Seasonality and Weather.
  Interest Rates.
 Second Quarter of Fiscal 2008 Highlights and Outlook
           19




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Critical Accounting Policies and Estimates
   Results of Operations
 Three months ended September 30, 2007 compared with three months ended September 30, 2006
 Net Sales
  FAVORABLE (UNFAVORABLE)For the Three Months Ended
    
    
    
    
    
    
    Currency
    
    
    Non-CurrencySeptember 30, 2007
    
    
    September 30, 2006
    
    
    TOTAL
    
    
    Related
    
    
    Related(In thousands)TransportationAmericas
    
    $
    275,768
    
    
    $
    227,711
    
    
    $
    48,057
    
    
    $
    
    
    
    $
    48,057Europe & ROW
    
    
    256,571
    
    
    
    186,937
    
    
    
    69,634
    
    
    
    20,382
    
    
    
    49,252Industrial EnergyAmericas
    
    
    72,995
    
    
    
    64,972
    
    
    
    8,023
    
    
    
    
    
    
    
    8,023Europe & ROW
    
    
    256,608
    
    
    
    200,679
    
    
    
    55,929
    
    
    
    20,014
    
    
    
    35,915TOTAL
    
    $
    861,942
    
    
    $
    680,299
    
    
    $
    181,643
    
    
    $
    40,396
    
    
    $
    141,247
     20




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##### Table of Contents



Gross Profit
  For the Three Months Ended
    
    
    For the Three Months EndedSeptember 30, 2007
    
    
    September 30, 2006
    
    
    FAVORABLE / (UNFAVORABLE)Percent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    Currency
    
    
    Non-CurrencyTOTAL
    
    
    Net Sales
    
    
    TOTAL
    
    
    Net Sales
    
    
    TOTAL
    
    
    Related
    
    
    Related(In thousands)TransportationAmericas
    
    $
    49,519
    
    
    
    18.0
    %
    
    $
    36,683
    
    
    
    16.1
    %
    
    $
    12,836
    
    
    $
    
    
    
    $
    12,836Europe & ROW
    
    
    32,594
    
    
    
    12.7
    %
    
    
    21,395
    
    
    
    11.4
    %
    
    
    11,199
    
    
    
    2,631
    
    
    
    8,568Industrial EnergyAmericas
    
    
    18,707
    
    
    
    25.6
    %
    
    
    14,045
    
    
    
    21.6
    %
    
    
    4,662
    
    
    
    
    
    
    
    4,662Europe & ROW
    
    
    31,922
    
    
    
    12.4
    %
    
    
    33,279
    
    
    
    16.6
    %
    
    
    (1,357
    )
    
    
    2,508
    
    
    
    (3,865
    )Unallocated Other
    
    
    (2,394
    )
    
    
    n/a
    
    
    
    
    
    
    
    n/a
    
    
    
    (2,394
    )
    
    
    
    
    
    
    (2,394
    )TOTAL
    
    $
    130,348
    
    
    
    15.1
    %
    
    $
    105,402
    
    
    
    15.5
    %
    
    $
    24,946
    
    
    $
    5,139
    
    
    $
    19,807
      Expenses
  
    
    Selling, marketing, and advertising increased by $2.4 million, to $68.3 million in the
second quarter of fiscal 2008 from $65.9 million in the second quarter of fiscal 2007 due
primarily to incremental marketing spending designed to attract future growth, combined
with increased commissions resulting from the higher net sales and the unfavorable impact
of stronger foreign currencies.
 21




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##### Table of Contents




    
    General and administrative increased by $3.2 million, to $39.6 million in the second
quarter of fiscal 2008 from $36.4 million in the second quarter of fiscal 2007. The
increase primarily consists of stock compensation expense of $1.4 million and unfavorable
foreign currency translation.
    
    Restructuring decreased by $4.5 million, to $2.6 million in the second quarter of fiscal
2008 from $7.0 million in the second quarter of fiscal 2007. This change is due to an
overall decrease in the level of restructuring activities throughout the Company in fiscal
2008.
    
    Other (income) expenses were ($10.5) million in the second quarter of fiscal 2008 versus
$6.2 million in the second quarter of fiscal 2007. The increase in other income is
primarily due to currency remeasurement gains recognized in the second quarter of fiscal
2008.
    
    Interest Expense decreased $1.4 million, to $21.3 million in the second quarter of
fiscal 2008 from $22.6 million in the second quarter of fiscal 2007 due primarily to the
favorable impact of lower rates on the Companys new Credit Agreement, offset by higher
borrowing required to fund incremental working capital caused by dramatically higher lead
costs. See Note 6.
    
    Foreign currency translation unfavorably impacted expenses by $5.7 million in the second
quarter of fiscal 2008.
 FAVORABLE / (UNFAVORABLE)For the Three Months Ended
    
    
    
    
    
    
    Currency
    
    
    Non-CurrencySeptember 30, 2007
    
    
    September 30, 2006
    
    
    TOTAL
    
    
    Related
    
    
    Related(In thousands)TransportationAmericas
    
    $
    32,543
    
    
    $
    30,859
    
    
    $
    (1,684
    )
    
    $
    
    
    
    $
    (1,684
    )Europe & ROW
    
    
    24,938
    
    
    
    28,587
    
    
    
    3,649
    
    
    
    (2,001
    )
    
    
    5,650Industrial EnergyAmericas
    
    
    9,151
    
    
    
    8,732
    
    
    
    (419
    )
    
    
    
    
    
    
    (419
    )Europe & ROW
    
    
    34,702
    
    
    
    34,397
    
    
    
    (305
    )
    
    
    (2,658
    )
    
    
    2,353Unallocated expenses
    
    
    19,883
    
    
    
    35,646
    
    
    
    15,763
    
    
    
    (992
    )
    
    
    16,755TOTAL
    
    $
    121,217
    
    
    $
    138,221
    
    
    $
    17,004
    
    
    $
    (5,651
    )
    
    $
    22,655
      22




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##### Table of Contents



For the Three Months Ended
    
    
    FAVORABLESeptember 30, 2007
    
    
    September 30, 2006
    
    
    (UNFAVORABLE)(In thousands)Corporate general and administrative
    
    $
    9,560
    
    
    $
    10,096
    
    
    $
    536Restructuring
    
    
    96
    
    
    
    275
    
    
    
    179Other (income) expense:Currency remeasurement (gain) loss
    
    
    (9,686
    )
    
    
    1,778
    
    
    
    11,464Gain (loss) on revaluation of warrants
    
    
    (1,457
    )
    
    
    74
    
    
    
    1,531Other
    
    
    99
    
    
    
    782
    
    
    
    683Interest, net
    
    
    21,271
    
    
    
    22,641
    
    
    
    1,370TOTAL
    
    $
    19,883
    
    
    $
    35,646
    
    
    $
    15,763
  Reorganization Items
  Income Taxes
 For the Three Months EndedSeptember 30, 2007
    
    September 30, 2006(In thousands)Pre-tax income (loss)
    
    $
    8,362
    
    
    $
    (33,815
    )Income tax provision
    
    $
    22,696
    
    
    $
    1,294Effective tax rate
    
    
    271.4
    %
    
    
    (3.8
    %)
  Six months ended September 30, 2007 compared with six months ended September 30, 2006
 Net Sales
  23




---



##### Table of Contents



FAVORABLE (UNFAVORABLE)For the Six Months Ended
    
    
    
    
    
    
    Currency
    
    
    Non-CurrencySeptember 30, 2007
    
    
    September 30, 2006
    
    
    TOTAL
    
    
    Related
    
    
    Related(In thousands)TransportationAmericas
    
    $
    526,797
    
    
    $
    442,221
    
    
    $
    84,576
    
    
    $
    
    
    
    $
    84,576Europe & ROW
    
    
    469,280
    
    
    
    369,688
    
    
    
    99,592
    
    
    
    35,479
    
    
    
    64,113Industrial EnergyAmericas
    
    
    138,269
    
    
    
    137,921
    
    
    
    348
    
    
    
    
    
    
    
    348Europe & ROW
    
    
    489,983
    
    
    
    413,659
    
    
    
    76,324
    
    
    
    36,578
    
    
    
    39,746TOTAL
    
    $
    1,624,329
    
    
    $
    1,363,489
    
    
    $
    260,840
    
    
    $
    72,057
    
    
    $
    188,783
     Gross Profit
  For the Six Months Ended
    
    
    For the Six Months EndedSeptember 30, 2007
    
    
    September 30, 2006
    
    
    FAVORABLE / (UNFAVORABLE)Percent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    Currency
    
    
    Non-CurrencyTOTAL
    
    
    Net Sales
    
    
    TOTAL
    
    
    Net Sales
    
    
    TOTAL
    
    
    Related
    
    
    Related(In thousands)TransportationAmericas
    
    $
    97,244
    
    
    
    18.5
    %
    
    $
    69,617
    
    
    
    15.7
    %
    
    $
    27,627
    
    
    $
    
    
    
    $
    27,627Europe & ROW
    
    
    54,743
    
    
    
    11.7
    %
    
    
    41,002
    
    
    
    11.1
    %
    
    
    13,741
    
    
    
    4,162
    
    
    
    9,579Industrial EnergyAmericas
    
    
    34,818
    
    
    
    25.2
    %
    
    
    31,656
    
    
    
    23.0
    %
    
    
    3,162
    
    
    
    
    
    
    
    3,162Europe & ROW
    
    
    64,605
    
    
    
    13.2
    %
    
    
    72,805
    
    
    
    17.6
    %
    
    
    (8,200
    )
    
    
    4,735
    
    
    
    (12,935
    )Unallocated Other
    
    
    (2,394
    )
    
    
    n/a
    
    
    
    
    
    
    
    n/a
    
    
    
    (2,394
    )
    
    
    
    
    
    
    (2,394
    )TOTAL
    
    $
    249,016
    
    
    
    15.3
    %
    
    $
    215,080
    
    
    
    15.8
    %
    
    $
    33,936
    
    
    $
    8,897
    
    
    $
    25,039
  24




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##### Table of Contents



Expenses
  
    
    Selling, marketing, and advertising increased $2.2 million, to $136.6 million in the
first half of fiscal 2008 from $134.5 million in the first half of fiscal 2007 due
primarily to incremental marketing spending designed to attract future profitable growth,
combined with increased commissions resulting from the higher net sales.
    
    General and administrative increased $0.9 million, to $83.3 million in the first half of
fiscal 2008 from $82.4 million in the first half of fiscal 2007.
    
    Restructuring decreased $11.2 million, to $4.7 million in the first half of fiscal 2008
from $15.9 million in the first half of fiscal 2007. This change is due to an overall
decrease in the level of restructuring activities throughout the Company in fiscal 2008.
In the fiscal 2007 period, the Company closed its Shreveport, Louisiana transportation
battery facility and incurred a restructuring charge of $7.0 million related thereto.
    
    Other (income) expenses were ($14.1) million in the first half of fiscal 2008 versus
$2.7 million in the first half of fiscal 2007. The increase in other income is primarily
due to currency remeasurement gains recognized in first half of fiscal 2008.
    
    Interest expense decreased $2.3 million, to $42.6 million in the first half of fiscal
2008 from $44.9 million in the first half of fiscal 2007 due primarily to the favorable
impact of lower rates on the Companys new Credit Agreement. See Note 6.
    
    Foreign currency translation unfavorably impacted expenses by $11.6 million in the first
half of fiscal 2008.
 FAVORABLE / (UNFAVORABLE)For the Six Months Ended
    
    
    
    
    
    
    Currency
    
    
    Non-CurrencySeptember 30, 2007
    
    
    September 30, 2006
    
    
    TOTAL
    
    
    Related
    
    
    Related(In thousands)TransportationAmericas
    
    $
    63,570
    
    
    $
    68,605
    
    
    $
    5,035
    
    
    $
    
    
    
    $
    5,035Europe & ROW
    
    
    50,792
    
    
    
    54,337
    
    
    
    3,545
    
    
    
    (3,884
    )
    
    
    7,429Industrial EnergyAmericas
    
    
    19,257
    
    
    
    18,852
    
    
    
    (405
    )
    
    
    
    
    
    
    (405
    )Europe & ROW
    
    
    68,808
    
    
    
    70,289
    
    
    
    1,481
    
    
    
    (5,052
    )
    
    
    6,533Unallocated expenses
    
    
    72,058
    
    
    
    68,317
    
    
    
    (3,741
    )
    
    
    (2,659
    )
    
    
    (1,082
    )TOTAL
    
    $
    274,485
    
    
    $
    280,400
    
    
    $
    5,915
    
    
    $
    (11,595
    )
    
    $
    17,510
 25




---



##### Table of Contents



For the Six Months Ended
    
    
    FAVORABLESeptember 30, 2007
    
    
    September 30, 2006
    
    
    (UNFAVORABLE)(In thousands)Corporate general and administrative
    
    $
    21,668
    
    
    $
    27,023
    
    
    $
    5,355Restructuring
    
    
    96
    
    
    
    376
    
    
    
    280Other (income) expense:Currency remeasurement (gain) loss
    
    
    (12,591
    )
    
    
    (4,745
    )
    
    
    7,846Gain (loss) on revaluation of warrants
    
    
    (1,192
    )
    
    
    (739
    )
    
    
    453Other
    
    
    112
    
    
    
    1,474
    
    
    
    1,362Interest, net
    
    
    42,623
    
    
    
    44,928
    
    
    
    2,305Loss on early extinguishment of debt
    
    
    21,342
    
    
    
    
    
    
    
    (21,342
    )TOTAL
    
    $
    72,058
    
    
    $
    68,317
    
    
    $
    (3,741
    )
  Reorganization items
  Income Taxes
 For the Six Months EndedSeptember 30, 2007
    
    September 30, 2006(In thousands)Pre-tax loss
    
    $
    26,680
    
    
    $
    68,133Income tax provision
    
    $
    22,913
    
    
    $
    4,872Effective tax rate
    
    
    (85.9
    %)
    
    
    (7.1
    %)
  26




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##### Table of Contents



Liquidity and Capital Resources
    The Revolving Loan
    The Term Loan
    27




---



##### Table of Contents



Sources Of Cash
   28




---



##### Table of Contents



Uses Of Cash
         Financial Instruments and Market Risk
   29




---



##### 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
  30




---



##### Table of Contents



CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR
PROVISION OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
  31




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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) MaximumNumber (orApproximate Dollar(c) Total Number of
    
    Value) of Shares (orShares (or Units)
    
    Units) that May Yet(a) Total Number of
    
    (b) Average Price
    
    Purchased as Part of
    
    Be Purchased UnderShares (or Units)
    
    Paid per Share (or
    
    Publicly Announced
    
    the Plans orPeriod
    
    Purchased (1)
    
    Unit)
    
    Plans or Programs
    
    ProgramsJuly1 through July 31August 1 through
August 31September 1 through
September 30
    
    
    8,314
    
    
    $
    6.78
 
 (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
   Name
    
    Votes For
    
    Votes WithheldHerbert F. Aspbury
    
    47,673,029
    
    196,845Michael R. DAppolonia
    
    46,366,538
    
    1,505,336David S. Ferguson
    
    46,366,490
    
    1,505,384Paul W. Jennings
    
    47,671,962
    
    199,912Joseph V. Lash
    
    47,073,162
    
    198,712John P. Reilly
    
    46,366,978
    
    1,504,896Michael P. Ressner
    
    47,584,152
    
    287,722Gordon A. Ulsh
    
    47,673,626
    
    198,248Carroll R. Wetzel
    
    47,673,162
    
    196,712
  32




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##### Table of Contents



Vote For
    
    Votes Against
    
    Abstentions38,966,854
    
    1,893,325
    
    5,186
  Vote For
    
    Votes Against
    
    Abstentions46,587,905
    
    76,679
    
    1,207,289
 
 Item 5. Other Information
  
 Item 6. Exhibits
 3.1
    
    Amended and Restated Certificate of Incorporation.10.1
    
    Standby Purchase Agreement between Exide Technologies and Tontine
Capital Partners, L.P. and Legg Mason Investment Trust, Inc., dated
August 28, 2007, incorporated by reference to Exhibit 10.1 to the
Companys Report on Form 8-K dated August 28, 2007.10.2
    
    Amended and Restated 2004 Stock Incentive Plan31.1
    
    Certification of Gordon A. Ulsh, President and Chief Executive
Officer, pursuant to Section 302 of Sarbanes-Oxley Act of 2002.31.2
    
    Certification of 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.
 33




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##### Table of Contents



SIGNATURES
  EXIDE TECHNOLOGIESBy:
    
    /S/ Francis M. Corby, Jr.Francis M. Corby, Jr.Executive Vice President andChief Financial OfficerDate: November 8, 2007
 34