##### 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 December 31, 2008
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 Commission File Number 1-11263
 EXIDE TECHNOLOGIES
 (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
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer  o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 þ o
 o þ




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##### 



EXIDE TECHNOLOGIES AND SUBSIDIARIES
TABLE OF CONTENTS
 PagePART I. FINANCIAL INFORMATION
    
    3Item 1 FINANCIAL STATEMENTS
    
    3CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND
NINE MONTHS ENDED DECEMBER 31, 2008 AND 2007
    
    3CONDENSED CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2008 AND
MARCH 31, 2008
    
    4CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS
ENDED DECEMBER 31, 2008 AND 2007
    
    5NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    
    6Item 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
    
    19Item 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    31Item 4 CONTROLS AND PROCEDURES
    
    31PART II. OTHER INFORMATION
    
    33Item 1. LEGAL PROCEEDINGS
    
    33Item 1A. RISK FACTORS
    
    33Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    33Item 3. DEFAULTS UPON SENIOR SECURITIES
    
    33Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    34Item 5. OTHER INFORMATION
    
    34Item 6. EXHIBITS
    
    34SIGNATURES
    
    35EX-31.1EX-31.2EX-32
  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 Nine Months EndedDecember 31, 2008
    
    
    December 31, 2007
    
    
    December 31, 2008
    
    
    December 31, 2007NET SALES
    
    $
    782,602
    
    
    $
    1,042,047
    
    
    $
    2,668,050
    
    
    $
    2,666,377COST OF SALES
    
    
    620,587
    
    
    
    876,214
    
    
    
    2,174,671
    
    
    
    2,251,527Gross profit
    
    
    162,015
    
    
    
    165,833
    
    
    
    493,379
    
    
    
    414,850EXPENSES:Selling, marketing and advertising
    
    
    72,483
    
    
    
    76,435
    
    
    
    231,009
    
    
    
    213,068General and administrative
    
    
    42,341
    
    
    
    43,623
    
    
    
    133,001
    
    
    
    126,893Restructuring
    
    
    7,783
    
    
    
    1,652
    
    
    
    19,661
    
    
    
    6,334Other (income) expense, net
    
    
    (429
    )
    
    
    (6,446
    )
    
    
    24,085
    
    
    
    (20,507
    )Interest expense, net
    
    
    17,532
    
    
    
    21,697
    
    
    
    55,158
    
    
    
    64,320Loss on early extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,342139,710
    
    
    
    136,961
    
    
    
    462,914
    
    
    
    411,450Income before reorganization items,
income taxes, and minority interest
    
    
    22,305
    
    
    
    28,872
    
    
    
    30,465
    
    
    
    3,400REORGANIZATION ITEMS, NET
    
    
    409
    
    
    
    1,202
    
    
    
    1,344
    
    
    
    2,412INCOME TAX PROVISION
    
    
    6,367
    
    
    
    7,947
    
    
    
    33,245
    
    
    
    30,859MINORITY INTEREST
    
    
    102
    
    
    
    414
    
    
    
    996
    
    
    
    1,332Net income (loss)
    
    $
    15,427
    
    
    $
    19,309
    
    
    $
    (5,120
    )
    
    $
    (31,203
    )EARNINGS (LOSS) PER SHAREBasic
    
    $
    0.20
    
    
    $
    0.26
    
    
    $
    (0.07
    )
    
    $
    (0.47
    )Diluted
    
    $
    0.20
    
    
    $
    0.25
    
    
    $
    (0.07
    )
    
    $
    (0.47
    )WEIGHTED AVERAGE SHARESBasic
    
    
    75,589
    
    
    
    75,088
    
    
    
    75,474
    
    
    
    66,043Diluted
    
    
    79,386
    
    
    
    79,655
    
    
    
    75,474
    
    
    
    66,043
  3




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##### Table of Contents



EXIDE TECHNOLOGIES AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (Unaudited, in thousands, except per-share data)
 December 31, 2008
    
    
    March 31, 2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    148,413
    
    
    $
    90,547Receivables, net of allowance for doubtful accounts of $32,716 and $33,630
    
    
    562,786
    
    
    
    782,944Inventories
    
    
    489,166
    
    
    
    583,593Prepaid expenses and other
    
    
    19,666
    
    
    
    17,829Deferred financing costs, net
    
    
    4,969
    
    
    
    5,215Deferred income taxes
    
    
    30,736
    
    
    
    36,853Total current assets
    
    
    1,255,736
    
    
    
    1,516,981Property, plant and equipment, net
    
    
    583,625
    
    
    
    649,526Other assets:Other intangibles, net
    
    
    183,259
    
    
    
    206,283Investments in affiliates
    
    
    2,061
    
    
    
    6,523Deferred financing costs, net
    
    
    13,538
    
    
    
    18,071Deferred income taxes
    
    
    40,353
    
    
    
    51,238Other
    
    
    42,100
    
    
    
    42,774281,311
    
    
    
    324,889Total assets
    
    $
    2,120,672
    
    
    $
    2,491,396LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Short-term borrowings
    
    $
    19,165
    
    
    $
    22,719Current maturities of long-term debt
    
    
    10,273
    
    
    
    9,875Accounts payable
    
    
    309,716
    
    
    
    468,240Accrued expenses
    
    
    292,832
    
    
    
    333,092Warrants liability
    
    
    1,681
    
    
    
    8,272Total current liabilities
    
    
    633,667
    
    
    
    842,198Long-term debt
    
    
    657,578
    
    
    
    683,601Noncurrent retirement obligations
    
    
    172,869
    
    
    
    212,438Deferred income taxes
    
    
    33,236
    
    
    
    44,407Other noncurrent liabilities
    
    
    136,940
    
    
    
    145,642Total liabilities
    
    
    1,634,290
    
    
    
    1,928,286Commitments and contingencies
    
    
    
    
    
    
    Minority interest
    
    
    17,395
    
    
    
    18,772STOCKHOLDERS EQUITYPreferred stock, $0.01 par value, 1,000 shares authorized, 0 shares issued and
outstanding
    
    
    
    
    
    
    Common stock, $0.01 par value, 200,000 shares authorized, 75,479 and 75,278 shares
issued and outstanding
    
    
    755
    
    
    
    753Additional paid-in capital
    
    
    1,109,210
    
    
    
    1,104,939Accumulated deficit
    
    
    (722,782
    )
    
    
    (717,662
    )Accumulated other comprehensive income
    
    
    81,804
    
    
    
    156,308Total stockholders equity
    
    
    468,987
    
    
    
    544,338Total liabilities and stockholders equity
    
    $
    2,120,672
    
    
    $
    2,491,396
  4




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##### Table of Contents



EXIDE TECHNOLOGIES AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited, in thousands)
 For
the Nine Months EndedDecember
31, 2008
    
    

December
31, 2007Cash Flows From Operating Activities:Net loss
    
    $
    (5,120
    )
    
    $
    (31,203
    )Adjustments to reconcile net loss to net cash provided by (used in) operating activitiesDepreciation and amortization
    
    
    73,761
    
    
    
    75,338Unrealized gain on warrants
    
    
    (6,591
    )
    
    
    (1,194
    )Net loss on asset sales / impairments
    
    
    1,820
    
    
    
    151Deferred income taxes
    
    
    7,400
    
    
    
    14,257Provision for doubtful accounts
    
    
    6,509
    
    
    
    6,591Non-cash stock compensation
    
    
    3,844
    
    
    
    4,091Reorganization items, net
    
    
    1,344
    
    
    
    2,412Minority interest
    
    
    996
    
    
    
    1,332Amortization of deferred financing costs
    
    
    3,833
    
    
    
    3,585Loss on early extinguishment of debt
    
    
    
    
    
    
    21,342Currency loss (gain)
    
    
    33,572
    
    
    
    (18,230
    )Changes in assets and liabilities Receivables
    
    
    122,733
    
    
    
    (81,989
    )Inventories
    
    
    35,698
    
    
    
    (147,115
    )Prepaid expenses and other
    
    
    (3,320
    )
    
    
    1,641Payables
    
    
    (118,778
    )
    
    
    53,220Accrued expenses
    
    
    (6,703
    )
    
    
    34,335Noncurrent liabilities
    
    
    (21,579
    )
    
    
    (31,574
    )Other, net
    
    
    (8,941
    )
    
    
    (812
    )Net cash provided by (used in) operating activities
    
    
    120,478
    
    
    
    (93,822
    )Cash Flows From Investing Activities:Capital expenditures
    
    
    (58,666
    )
    
    
    (39,285
    )Proceeds from sales and purchase of assets, net
    
    
    12,892
    
    
    
    3,685Net cash used in investing activities
    
    
    (45,774
    )
    
    
    (35,600
    )Cash Flows From Financing Activities:Increase in short-term borrowings
    
    
    105
    
    
    
    3,419(Decrease) increase in borrowings under Senior Secured Credit Facility
    
    
    (2,255
    )
    
    
    50,856(Decrease) increase in other debt
    
    
    (6,618
    )
    
    
    7,721Financing costs and other
    
    
    
    
    
    
    (31,736
    )Net proceeds from rights offerings and common stock issuance
    
    
    428
    
    
    
    90,998Net cash (used in) provided by financing activities
    
    
    (8,340
    )
    
    
    121,258Effect of Exchange Rate Changes on Cash and Cash Equivalents
    
    
    (8,498
    )
    
    
    3,125Net Increase (Decrease) In Cash and Cash Equivalents
    
    
    57,866
    
    
    
    (5,039
    )Cash and Cash Equivalents, Beginning of Period
    
    
    90,547
    
    
    
    76,211Cash and Cash Equivalents, End of Period
    
    $
    148,413
    
    
    $
    71,172Supplemental Disclosures of Cash Flow Information:Cash paid during the period Interest
    
    $
    41,080
    
    
    $
    46,328Income taxes (net of refunds)
    
    $
    10,492
    
    
    $
    12,763
  5




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EXIDE TECHNOLOGIES AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 December 31, 2008
 (Unaudited)
 (1) BASIS OF PRESENTATION
   (2) COMPREHENSIVE (LOSS) INCOME
  For the Three Months Ended
    
    
    For the Nine Months EndedDecember 31, 2008
    
    
    December 31, 2007
    
    
    December 31, 2008
    
    
    December 31, 2007(In thousands)Net income (loss)
    
    $
    15,427
    
    
    $
    19,309
    
    
    $
    (5,120
    )
    
    $
    (31,203
    )Defined benefit plans
    
    
    (7,513
    )
    
    
    (1,015
    )
    
    
    (13,081
    )
    
    
    (2,680
    )Cumulative translation adjustment
    
    
    (19,949
    )
    
    
    5,612
    
    
    
    (58,523
    )
    
    
    32,559Derivatives quarlifying as hedges
    
    
    (5,909
    )
    
    
    
    
    
    
    (2,900
    )
    
    
    Total comprehensive (loss) income
    
    $
    (17,944
    )
    
    $
    23,906
    
    
    $
    (79,624
    )
    
    $
    (1,324
    )
 (3) ACCOUNTING FOR DERIVATIVES
 Accounting for Derivative Instruments and
Hedging Activities" , Accounting for Certain Derivative Instruments and
Certain Hedging Activities Amendment of Statement 133 on Derivative Instruments and
Hedging Activities
   6




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(4) INTANGIBLE ASSETS
  Trademarks and
    
    
    Trademarks andTradenames
    
    
    Tradenames(not subject to
    
    
    (subject to
    
    
    Customeramortization)
    
    
    amortization)
    
    
    relationships
    
    
    Technology
    
    
    Total(In thousands)As of December 31, 2008:Gross Amount
    
    $
    60,050
    
    
    $
    13,659
    
    
    $
    113,295
    
    
    $
    29,499
    
    
    $
    216,503Accumulated Amortization
    
    
    
    
    
    
    (5,034
    )
    
    
    (22,116
    )
    
    
    (6,094
    )
    
    
    (33,244
    )Net
    
    $
    60,050
    
    
    $
    8,625
    
    
    $
    91,179
    
    
    $
    23,405
    
    
    $
    183,259As of March 31, 2008:Gross Amount
    
    $
    67,089
    
    
    $
    15,260
    
    
    $
    126,529
    
    
    $
    28,323
    
    
    $
    237,201Accumulated Amortization
    
    
    
    
    
    
    (4,720
    )
    
    
    (20,696
    )
    
    
    (5,502
    )
    
    
    (30,918
    )Net
    
    $
    67,089
    
    
    $
    10,540
    
    
    $
    105,833
    
    
    $
    22,821
    
    
    $
    206,283
  (5) INVENTORIES
  December 31, 2008
    
    
    March 31, 2008(In thousands)Raw materials
    
    $
    71,593
    
    
    $
    71,779Work-in-process
    
    
    97,021
    
    
    
    115,840Finished goods
    
    
    320,552
    
    
    
    395,974$
    489,166
    
    
    $
    583,593
 7




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(6) OTHER ASSETS
  December 31, 2008
    
    
    March 31, 2008(In thousands)Deposits (a)
    
    $
    9,504
    
    
    $
    12,631Capitalized software, net
    
    
    3,038
    
    
    
    3,711Loan to affiliate
    
    
    1,005
    
    
    
    1,811Retirement plans
    
    
    19,229
    
    
    
    17,391Financial instruments
    
    
    3,630
    
    
    
    Other
    
    
    5,694
    
    
    
    7,230$
    42,100
    
    
    $
    42,774
 
 (a)
    
    Deposits principally represent amounts held by beneficiaries as cash collateral for the
Companys contingent obligations with respect to certain environmental matters, workers
compensation insurance, and operating lease commitments. (7) DEBT
   December 31, 2008
    
    
    March 31, 2008(In thousands)Senior Secured Credit Facility
    
    $
    290,762
    
    
    $
    306,39510.5% Senior Secured Notes due 2013
    
    
    290,000
    
    
    
    290,000Floating Rate Convertible Senior Subordinated Notes due 2013
    
    
    60,000
    
    
    
    60,000Other, including capital lease obligations and other loans at interest rates generally
ranging up to 11% due in installments through 2015
    
    
    27,089
    
    
    
    37,081Total
    
    
    667,851
    
    
    
    693,476Less  current maturities
    
    
    10,273
    
    
    
    9,875$
    657,578
    
    
    $
    683,601
  (8) INTEREST EXPENSE, NET
  8




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##### Table of Contents



(9) OTHER (INCOME) EXPENSE, NET
  For the Three Months Ended
    
    
    For the Nine Months EndedDecember 31, 2008
    
    
    December 31, 2007
    
    
    December 31, 2008
    
    
    December 31, 2007(In thousands)Net loss on asset sales / impairments
    
    $
    686
    
    
    $
    48
    
    
    $
    1,820
    
    
    $
    151Equity loss (income)
    
    
    256
    
    
    
    (246
    )
    
    
    (1,171
    )
    
    
    (554
    )Currency loss (gain)
    
    
    7,689
    
    
    
    (6,113
    )
    
    
    33,572
    
    
    
    (18,230
    )Gain on revaluation of warrants (a)
    
    
    (7,062
    )
    
    
    (3
    )
    
    
    (6,591
    )
    
    
    (1,194
    )Other
    
    
    (1,998
    )
    
    
    (132
    )
    
    
    (3,545
    )
    
    
    (680
    )$
    (429
    )
    
    $
    (6,446
    )
    
    $
    24,085
    
    
    $
    (20,507
    )
 
 (a)
    
    The warrants entitle the holders to purchase an aggregate of up to approximately 6.7
million shares of new common stock at an exercise price of $29.84 per share. The warrants are
exercisable through May 5, 2011. In accordance with Emerging Issues Task Force abstract (EITF)
00-19, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a
Companys Own Stock,and SFAS 150, Accounting for Certain Financial Instruments with
Characteristics of Both Liabilities and Equity, the warrants have been marked-to-market based
upon quoted market prices. Future results of operations may be subject to volatility from
changes in the market value of such warrants. (10) EMPLOYEE BENEFITS
  Pension BenefitsFor the Three Months Ended
    
    
    For the Nine Months EndedDecember 31, 2008
    
    
    December 31, 2007
    
    
    December 31, 2008
    
    
    December 31, 2007(In thousands)Components of net periodic benefit cost:Service cost
    
    $
    1,030
    
    
    $
    1,402
    
    
    $
    3,345
    
    
    $
    4,024Interest cost
    
    
    9,218
    
    
    
    9,169
    
    
    
    28,779
    
    
    
    26,887Expected return on plan assets
    
    
    (7,549
    )
    
    
    (7,578
    )
    
    
    (23,394
    )
    
    
    (22,174
    )Amortization of:Prior service cost
    
    
    5
    
    
    
    5
    
    
    
    16
    
    
    
    15Actuarial gain
    
    
    (605
    )
    
    
    (418
    )
    
    
    (1,988
    )
    
    
    (1,175
    )Net periodic benefit cost
    
    $
    2,099
    
    
    $
    2,580
    
    
    $
    6,758
    
    
    $
    7,577
 Other Post-Retirement BenefitsFor the Three Months Ended
    
    
    For the Nine Months EndedDecember 31, 2008
    
    
    December 31, 2007
    
    
    December 31, 2008
    
    
    December 31, 2007(In thousands)Components of net periodic benefit cost:Service cost
    
    $
    45
    
    
    $
    51
    
    
    $
    149
    
    
    $
    148Interest cost
    
    
    327
    
    
    
    377
    
    
    
    1,001
    
    
    
    1,123Amortization of:Prior service cost
    
    
    (96
    )
    
    
    
    
    
    
    (288
    )
    
    
    Actuarial loss
    
    
    34
    
    
    
    19
    
    
    
    101
    
    
    
    55Net periodic benefit cost
    
    $
    310
    
    
    $
    447
    
    
    $
    963
    
    
    $
    1,326
  (11) COMMITMENTS AND CONTINGENCIES
 Claims Reconciliation
  9




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Private Party Lawsuits and other Legal Proceedings
   10




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Environmental Matters
    11




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.
       Tampa, Florida
  12




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Columbus, Georgia
  Guarantees
   Sales Returns and Allowances
   Balance at March 31, 2008
    
    $
    57,757Accrual for sales returns and allowances provided
    
    
    39,931Settlements made (in cash or credit), and currency translation
    
    
    (45,457
    )Balance at December 31, 2008
    
    $
    52,231
 (12) INCOME TAXES
   13




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For the Three Months Ended
    
    
    For the Nine Months EndedDecember 31, 2008
    
    
    December 31, 2007
    
    
    December 31, 2008
    
    
    December 31, 2007Federal statutory rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %Local tax provision
    
    
    6.4
    %
    
    
    0.8
    %
    
    
    14.6
    %
    
    
    -2.6
    %Change in valuation allowances
    
    
    12.7
    %
    
    
    1.6
    %
    
    
    106.8
    %
    
    
    2568.9
    %Revaluation of warrants
    
    
    -11.3
    %
    
    
    0.0
    %
    
    
    -7.9
    %
    
    
    -42.3
    %Rate difference on foreign subsidiaries
    
    
    -24.4
    %
    
    
    -16.0
    %
    
    
    -40.5
    %
    
    
    -1480.8
    %Change in tax rate
    
    
    -0.4
    %
    
    
    2.0
    %
    
    
    -0.4
    %
    
    
    1679.8
    %Dividend income
    
    
    3.7
    %
    
    
    -1.7
    %
    
    
    2.3
    %
    
    
    2.0
    %Other, net
    
    
    7.4
    %
    
    
    7.0
    %
    
    
    4.3
    %
    
    
    359.4
    %Effective tax rate
    
    
    29.1
    %
    
    
    28.7
    %
    
    
    114.2
    %
    
    
    3119.4
    %
        (13) RESTRUCTURING
   14




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##### Table of Contents



Severance Costs
    
    
    Closure Costs
    
    
    Total(In thousands)Balance at March 31, 2008
    
    $
    1,788
    
    
    $
    3,282
    
    
    $
    5,070Restructuring Charges
    
    
    17,484
    
    
    
    2,177
    
    
    
    19,661Payments and Currency Translation
    
    
    (15,902
    )
    
    
    (3,497
    )
    
    
    (19,399
    )Balance at December 31, 2008
    
    $
    3,370
    
    
    $
    1,962
    
    
    $
    5,332
  (14) EARNINGS (LOSS) PER SHARE
 Earnings
Per Share
 For the Three Months Ended
    
    
    For the Nine Months EndedDecember 31, 2008
    
    
    December 31, 2007
    
    
    December 31, 2008
    
    
    December 31, 2007(In thousands)Net income (loss)
    
    $
    15,427
    
    
    $
    19,309
    
    
    $
    (5,120
    )
    
    $
    (31,203
    )Interest expense on Floating Rate Convertible SeniorSubordinated Notes
    
    $
    109
    
    
    $
    485
    
    
    
    
    
    
    
    $
    15,536
    
    
    $
    19,794
    
    
    $
    (5,120
    )
    
    $
    (31,203
    )Basic weighted average shares outstanding
    
    
    75,589
    
    
    
    75,088
    
    
    
    75,474
    
    
    
    66,043Effect of dilutive securities:Floating Rate Convertible Senior Subordinated Notes
    
    
    3,697
    
    
    
    3,697
    
    
    
    
    
    
    
    Employee stock options
    
    
    36
    
    
    
    536
    
    
    
    
    
    
    
    Employee restricted stock awards (non-vested)
    
    
    64
    
    
    
    334
    
    
    
    
    
    
    
    3,797
    
    
    
    4,567
    
    
    
    
    
    
    
    Diluted weighted average shares outstanding
    
    
    79,386
    
    
    
    79,655
    
    
    
    75,474
    
    
    
    66,043Basic earnings (loss) per share:
    
    $
    0.20
    
    
    $
    0.26
    
    
    $
    (0.07
    )
    
    $
    (0.47
    )Diluted earnings (loss) per share:
    
    $
    0.20
    
    
    $
    0.25
    
    
    $
    (0.07
    )
    
    $
    (0.47
    )
   15




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##### Table of Contents



(15) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 Employers Accounting for Defined
Benefit Pension and other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106 and
132(R)
 Noncontrolling Interests in Consolidated
Financial Statementsan amendment of ARB No. 51 Business Combinations
 Disclosures about Derivative Instruments and
Hedging Activities  an amendment of FASB Statement No. 133
 (16) FAIR VALUE MEASUREMENTS
 Fair Value Measurements
 
    
    Level 1  Observable inputs such as quoted prices in active markets for identical
assets and liabilities
    
    Level 2  Inputs other than quoted prices in active markets that are observable
either directly or indirectly, and
    
    Level 3  Inputs from valuation techniques in which one or more key value drivers are
not observable, and must be based on 
                   the reporting entitys own assumptions
  Quoted Price in
    
    SignificantTotal
    
    Active Markets
    
    Other
    
    SignificantFair Value
    
    for
    
    Observable
    
    UnobservableMeasurement
    
    Identical Assets
    
    Inputs
    
    InputsDecember 31, 2008
    
    (Level 1)
    
    (Level 2)
    
    (Level 3)(In thousands)Interest rate swap agreement
    
    $
    (8,065
    )
    
    
    
    
    
    $
    (8,065
    )
    
    
    Foreign currency forward contract
    
    
    3,630
    
    
    
    
    
    
    
    3,630
    
    
    
    
  16




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##### Table of Contents



(17) SEGMENT INFORMATION
     17




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##### Table of Contents



For the Three Months Ended December 31, 2008Transportation
    
    IndustrialEurope
    
    
    
    
    
    Europe
    
    OtherAmericas
    
    and ROW
    
    Americas
    
    and ROW
    
    (a)
    
    Consolidated(in thousands)Net sales
    
    $
    273,143
    
    
    $
    210,282
    
    
    $
    64,681
    
    
    $
    234,496
    
    
    $
    
    
    
    $
    782,602Gross profit
    
    
    53,459
    
    
    
    33,205
    
    
    
    18,277
    
    
    
    57,074
    
    
    
    
    
    
    
    162,015Expenses
    
    
    32,730
    
    
    
    30,288
    
    
    
    9,175
    
    
    
    40,848
    
    
    
    26,669
    
    
    
    139,710Income (loss) before
reorganization items, income
taxes, and minority interest
    
    
    20,729
    
    
    
    2,917
    
    
    
    9,102
    
    
    
    16,226
    
    
    
    (26,669
    )
    
    
    22,305
 For the Three Months Ended December 31, 2007Transportation
    
    IndustrialEurope
    
    
    
    
    
    Europe
    
    OtherAmericas
    
    and ROW
    
    Americas
    
    and ROW
    
    (a)
    
    Consolidated(in thousands)Net sales
    
    $
    289,888
    
    
    $
    360,256
    
    
    $
    84,175
    
    
    $
    307,728
    
    
    $
    
    
    
    $
    1,042,047Gross profit
    
    
    54,874
    
    
    
    47,654
    
    
    
    22,801
    
    
    
    40,504
    
    
    
    
    
    
    
    165,833Expenses
    
    
    32,615
    
    
    
    33,660
    
    
    
    9,021
    
    
    
    36,492
    
    
    
    25,173
    
    
    
    136,961Income (loss) before
reorganization items, income
taxes, and minority interest
    
    
    22,259
    
    
    
    13,994
    
    
    
    13,780
    
    
    
    4,012
    
    
    
    (25,173
    )
    
    
    28,872
 For the Nine Months Ended December 31, 2008Transportation
    
    IndustrialEurope
    
    
    
    
    
    Europe
    
    OtherAmericas
    
    and ROW
    
    Americas
    
    and ROW
    
    (a)
    
    Consolidated(in thousands)Net sales
    
    $
    895,128
    
    
    $
    731,510
    
    
    $
    230,707
    
    
    $
    810,705
    
    
    $
    
    
    
    $
    2,668,050Gross profit
    
    
    168,646
    
    
    
    90,646
    
    
    
    65,059
    
    
    
    169,028
    
    
    
    
    
    
    
    493,379Expenses
    
    
    97,470
    
    
    
    94,908
    
    
    
    29,209
    
    
    
    130,385
    
    
    
    110,942
    
    
    
    462,914Income (loss) before
reorganization items, income
taxes, and minority interest
    
    
    71,176
    
    
    
    (4,262
    )
    
    
    35,850
    
    
    
    38,643
    
    
    
    (110,942
    )
    
    
    30,465
 For the Nine Months Ended December 31, 2007Transportation
    
    IndustrialEurope
    
    
    
    
    
    Europe
    
    OtherAmericas
    
    and ROW
    
    Americas
    
    and ROW
    
    (a)
    
    Consolidated(in thousands)Net sales
    
    $
    816,685
    
    
    $
    829,536
    
    
    $
    222,445
    
    
    $
    797,711
    
    
    $
    
    
    
    $
    2,666,377Gross profit
    
    
    152,118
    
    
    
    102,398
    
    
    
    57,619
    
    
    
    105,109
    
    
    
    (2,394
    )
    
    
    414,850Expenses
    
    
    96,188
    
    
    
    84,453
    
    
    
    28,278
    
    
    
    105,300
    
    
    
    97,231
    
    
    
    411,450Income (loss) before
reorganization items, income
taxes, and minority interest
    
    
    55,930
    
    
    
    17,945
    
    
    
    29,341
    
    
    
    (191
    )
    
    
    (99,625
    )
    
    
    3,400
 
 (a)
    
    Other includes unallocated corporate expenses, interest expense,
currency remeasurement gain/loss, and gain/loss on revaluation of
warrants. For the nine months ended December 31, 2007, Other also
includes a $21.3 million loss on early extinguishment of debt. (18) SUBSEQUENT EVENT
  18




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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
 Exchange Rates
  19




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##### Table of Contents



Markets
 Seasonality and Weather.
  Interest Rates.
 Third quarter of Fiscal 2009 Highlights and Outlook
        20




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##### Table of Contents



Critical Accounting Policies and Estimates
   Results of Operations
 Three months ended December 31, 2008 compared with three months ended December 31, 2007
 Net Sales
  FAVORABLE (UNFAVORABLE)For the Three Months Ended
    
    
    
    
    
    
    Currency
    
    
    Non-CurrencyDecember 31, 2008
    
    
    December 31, 2007
    
    
    TOTAL
    
    
    Related
    
    
    Related(in thousands)TransportationAmericas
    
    $
    273,143
    
    
    $
    289,888
    
    
    $
    (16,745
    )
    
    
    
    
    
    $
    (16,745
    )Europe & ROW
    
    
    210,282
    
    
    
    360,256
    
    
    
    (149,974
    )
    
    
    (25,153
    )
    
    
    (124,821
    )Industrial EnergyAmericas
    
    
    64,681
    
    
    
    84,175
    
    
    
    (19,494
    )
    
    
    
    
    
    
    (19,494
    )Europe & ROW
    
    
    234,496
    
    
    
    307,728
    
    
    
    (73,232
    )
    
    
    (32,261
    )
    
    
    (40,971
    )TOTAL
    
    $
    782,602
    
    
    $
    1,042,047
    
    
    $
    (259,445
    )
    
    $
    (57,414
    )
    
    $
    (202,031
    )
    21




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##### Table of Contents



Gross Profit
  For the Three Months EndedDecember 31, 2008
    
    
    December 31, 2007
    
    
    FAVORABLE (UNFAVORABLE)Percent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    Currency
    
    
    Non-CurrencyTOTAL
    
    
    Net Sales
    
    
    TOTAL
    
    
    Net Sales
    
    
    TOTAL
    
    
    Related
    
    
    Related(in thousands)TransportationAmericas
    
    $
    53,459
    
    
    
    19.6
    %
    
    $
    54,874
    
    
    
    18.9
    %
    
    $
    (1,415
    )
    
    
    
    
    
    $
    (1,415
    )Europe & ROW
    
    
    33,205
    
    
    
    15.8
    %
    
    
    47,654
    
    
    
    13.2
    %
    
    
    (14,449
    )
    
    
    (3,628
    )
    
    
    (10,821
    )Industrial EnergyAmericas
    
    
    18,277
    
    
    
    28.3
    %
    
    
    22,801
    
    
    
    27.1
    %
    
    
    (4,524
    )
    
    
    
    
    
    
    (4,524
    )Europe & ROW
    
    
    57,074
    
    
    
    24.3
    %
    
    
    40,504
    
    
    
    13.2
    %
    
    
    16,570
    
    
    
    (7,928
    )
    
    
    24,498TOTAL
    
    $
    162,015
    
    
    
    20.7
    %
    
    $
    165,833
    
    
    
    15.9
    %
    
    $
    (3,818
    )
    
    $
    (11,556
    )
    
    $
    7,738
     Expenses
  
    
    Selling, marketing, and advertising expenses decreased $3.9 million, to $72.5 million in
the third quarter of fiscal 2009 from $76.4 million in the third quarter of fiscal 2008 due
primarily to a favorable foreign currency translation impact of $6.6 million. Excluding
the foreign currency translation impact, the expenses increased by $2.7 million primarily
due to increases in advertising costs.
 22




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##### Table of Contents




    
    General and administrative expenses decreased $1.3 million, to $42.3 million in the
third quarter of fiscal 2009 from $43.6 million in the third quarter of fiscal 2008. The
decrease primarily resulted from a favorable foreign currency translation impact of $3.3
million. Excluding the foreign currency translation impact, the expenses increased by $2.0
million primarily due to increases in professional service fees.
    
    Restructuring expenses increased $6.1 million to $7.8 million in the third quarter of
fiscal 2009 from $1.7 million in the third quarter of fiscal 2008. This increase related
primarily to costs associated with headcount reductions in Europe.
    
    Other income was $0.4 million in the third quarter of fiscal 2009 versus 6.5 million in
the third quarter of fiscal 2008. The decrease is primarily due to $13.8 million higher
foreign currency remeasurement losses, partially offset by $7.1 million higher gains on
revaluation of warrants.
    
    Interest expense decreased $4.2 million, to $17.5 million in the third quarter of fiscal
2009 from $21.7 million in the third quarter of fiscal 2008 primarily due to reduced
borrowings, including a $36.4 million reduction in factored accounts receivable in Europe,
and more favorable interest rates.
    
    Foreign currency translation favorably impacted expenses by $9.8 million in the third
quarter of fiscal 2009.
 FAVORABLE (UNFAVORABLE)For the Three Months Ended
    
    
    
    
    
    
    Currency
    
    
    Non-CurrencyDecember 31, 2008
    
    
    December 31, 2007
    
    
    TOTAL
    
    
    Related
    
    
    Related(in thousands)TransportationAmericas
    
    $
    32,730
    
    
    $
    32,615
    
    
    $
    (115
    )
    
    
    
    
    
    $
    (115
    )Europe & ROW
    
    
    30,288
    
    
    
    33,660
    
    
    
    3,372
    
    
    
    4,049
    
    
    
    (677
    )Industrial EnergyAmericas
    
    
    9,175
    
    
    
    9,021
    
    
    
    (154
    )
    
    
    
    
    
    
    (154
    )Europe & ROW
    
    
    40,848
    
    
    
    36,492
    
    
    
    (4,356
    )
    
    
    4,550
    
    
    
    (8,906
    )Unallocated expenses
    
    
    26,669
    
    
    
    25,173
    
    
    
    (1,496
    )
    
    
    1,212
    
    
    
    (2,708
    )TOTAL
    
    $
    139,710
    
    
    $
    136,961
    
    
    $
    (2,749
    )
    
    $
    9,811
    
    
    $
    (12,560
    )
      23




---



##### Table of Contents



For the Three Months Ended
    
    
    FAVORABLEDecember 31, 2008
    
    
    December 31, 2007
    
    
    (UNFAVORABLE)(In thousands)Corporate expenses
    
    $
    10,726
    
    
    $
    10,015
    
    
    $
    (711
    )Restructuring
    
    
    265
    
    
    
    3
    
    
    
    (262
    )Other IncomeCurrency remeasurement loss (gain)
    
    
    5,229
    
    
    
    (6,474
    )
    
    
    (11,703
    )Gain on revaluation of warrants
    
    
    (7,062
    )
    
    
    (3
    )
    
    
    7,059Other
    
    
    (21
    )
    
    
    (65
    )
    
    
    (44
    )Interest, net
    
    
    17,532
    
    
    
    21,697
    
    
    
    4,165TOTAL
    
    $
    26,669
    
    
    $
    25,173
    
    
    $
    (1,496
    )
  Income Taxes
 For the Three Months EndedDecember 31, 2008
    
    December 31, 2007(In thousands)Pre-tax income
    
    $
    21,896
    
    
    $
    27,670Income tax provision
    
    $
    6,367
    
    
    $
    7,947Effective tax rate
    
    
    29.1
    %
    
    
    28.7
    %
  Nine months ended December 31, 2008 compared with nine months ended December 31, 2007
 Net Sales
  24




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##### Table of Contents



FAVORABLE (UNFAVORABLE)For the Nine Months Ended
    
    
    
    
    
    
    Currency
    
    
    Non-CurrencyDecember 31, 2008
    
    
    December 31, 2007
    
    
    TOTAL
    
    
    Related
    
    
    Related(in thousands)TransportationAmericas
    
    $
    895,128
    
    
    $
    816,685
    
    
    $
    78,443
    
    
    
    
    
    
    $
    78,443Europe & ROW
    
    
    731,510
    
    
    
    829,536
    
    
    
    (98,026
    )
    
    
    30,573
    
    
    
    (128,599
    )Industrial EnergyAmericas
    
    
    230,707
    
    
    
    222,445
    
    
    
    8,262
    
    
    
    
    
    
    
    8,262Europe & ROW
    
    
    810,705
    
    
    
    797,711
    
    
    
    12,994
    
    
    
    29,655
    
    
    
    (16,661
    )TOTAL
    
    $
    2,668,050
    
    
    $
    2,666,377
    
    
    $
    1,673
    
    
    $
    60,228
    
    
    $
    (58,555
    )
     Gross Profit
  For the Nine Months EndedDecember 31, 2008
    
    
    December 31, 2007
    
    
    FAVORABLE (UNFAVORABLE)Percent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    Currency
    
    
    Non-CurrencyTOTAL
    
    
    Net Sales
    
    
    TOTAL
    
    
    Net Sales
    
    
    TOTAL
    
    
    Related
    
    
    Related(in thousands)TransportationAmericas
    
    $
    168,646
    
    
    
    18.8
    %
    
    $
    152,118
    
    
    
    18.6
    %
    
    $
    16,528
    
    
    
    
    
    
    $
    16,528Europe & ROW
    
    
    90,646
    
    
    
    12.4
    %
    
    
    102,398
    
    
    
    12.3
    %
    
    
    (11,752
    )
    
    
    2,277
    
    
    
    (14,029
    )Industrial EnergyAmericas
    
    
    65,059
    
    
    
    28.2
    %
    
    
    57,619
    
    
    
    25.9
    %
    
    
    7,440
    
    
    
    
    
    
    
    7,440Europe & ROW
    
    
    169,028
    
    
    
    20.8
    %
    
    
    105,109
    
    
    
    13.2
    %
    
    
    63,919
    
    
    
    3,732
    
    
    
    60,187Unallocated Other
    
    
    
    
    
    
    n/a
    
    
    
    (2,394
    )
    
    
    n/a
    
    
    
    2,394
    
    
    
    
    
    
    
    2,394TOTAL
    
    $
    493,379
    
    
    
    18.5
    %
    
    $
    414,850
    
    
    
    15.6
    %
    
    $
    78,529
    
    
    $
    6,009
    
    
    $
    72,520
 25




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##### Table of Contents



Expenses
  
    
    Selling, marketing, and advertising increased $17.9 million, to $231.0 million in the
first nine months of fiscal 2009 from $213.1 million in the first nine months of fiscal
2008. Foreign currency translation unfavorably impacted selling, marketing, and advertising
costs in the first nine months of fiscal 2009 by approximately $2.1 million. The remaining
increase was due primarily to increases in commissions on more profitable sales, and
increases in advertising costs.
    
    General and administrative increased $6.1 million, to $133.0 million in the first nine
months of fiscal 2009 from $126.9 million in the first nine months of fiscal 2008. Foreign
currency translation unfavorably impacted general and administrative costs in the first
nine months of fiscal 2009 by approximately $2.6 million. The remaining increase was due
primarily to higher professional service fees.
    
    Restructuring increased $13.4 million, to $19.7 million in the first nine months of
fiscal 2009 from $6.3 million in the first nine months of fiscal 2008. This increase is
due primarily to costs associated with headcount reductions in Europe and Australia.
    
    Other (income) expense was $24.1 million in the first nine months of fiscal 2009 versus
($20.5) million in the first nine months of fiscal 2008. The increase in expense is
primarily due to $51.8 million higher foreign currency remeasurement losses, partially
offset by $5.4 million higher gain in revaluation of warrants liability.
    
    Interest expense decreased $9.1 million, to $55.2 million in the first nine months of
fiscal 2009 from $64.3 million in the first nine months of fiscal 2008 due primarily to
lower borrowings and the favorable impact of lower interest rates on borrowings under the
Companys Credit Agreement.
    
    Foreign currency translation unfavorably impacted expenses by $10.2 million in the first
nine months of fiscal 2009.
 26




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##### Table of Contents



FAVORABLE (UNFAVORABLE)For the Nine Months Ended
    
    
    
    
    
    
    Currency
    
    
    Non-CurrencyDecember 31, 2008
    
    
    December 31, 2007
    
    
    TOTAL
    
    
    Related
    
    
    Related(in thousands)TransportationAmericas
    
    $
    97,470
    
    
    $
    96,188
    
    
    $
    (1,282
    )
    
    
    
    
    
    $
    (1,282
    )Europe & ROW
    
    
    94,908
    
    
    
    84,453
    
    
    
    (10,455
    )
    
    
    (2,332
    )
    
    
    (8,123
    )Industrial EnergyAmericas
    
    
    29,209
    
    
    
    28,278
    
    
    
    (931
    )
    
    
    
    
    
    
    (931
    )Europe & ROW
    
    
    130,385
    
    
    
    105,300
    
    
    
    (25,085
    )
    
    
    (5,372
    )
    
    
    (19,713
    )Unallocated expenses
    
    
    110,942
    
    
    
    97,231
    
    
    
    (13,711
    )
    
    
    (2,536
    )
    
    
    (11,175
    )TOTAL
    
    $
    462,914
    
    
    $
    411,450
    
    
    $
    (51,464
    )
    
    $
    (10,240
    )
    
    $
    (41,224
    )
      For the Nine Months Ended
    
    
    FAVORABLEDecember 31, 2008
    
    
    December 31, 2007
    
    
    (UNFAVORABLE)(In thousands)Corporate expenses
    
    $
    30,991
    
    
    $
    31,684
    
    
    $
    693Restructuring
    
    
    420
    
    
    
    99
    
    
    
    (321
    )Other IncomeCurrency remeasurement loss (gain)
    
    
    30,988
    
    
    
    (19,065
    )
    
    
    (50,053
    )Gain on revaluation of warrants
    
    
    (6,591
    )
    
    
    (1,194
    )
    
    
    5,397Other
    
    
    (24
    )
    
    
    45
    
    
    
    69Interest, net
    
    
    55,158
    
    
    
    64,320
    
    
    
    9,162Loss on early extinguishment of debt
    
    
    
    
    
    
    21,342
    
    
    
    21,342TOTAL
    
    $
    110,942
    
    
    $
    97,231
    
    
    $
    (13,711
    )
  27




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##### Table of Contents



Income Taxes
 For the Nine Months EndedDecember 31, 2008
    
    December 31, 2007(In thousands)Pre-tax income
    
    $
    29,121
    
    
    $
    988Income tax provision
    
    $
    33,245
    
    
    $
    30,859Effective tax rate
    
    
    114.2
    %
    
    
    3119.4
    %
  Liquidity and Capital Resources
   The Revolving Loan
    28




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##### Table of Contents



The Term Loan
          29




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##### Table of Contents



Sources of Cash
     Uses Of Cash
       Financial Instruments and Market Risk
  30




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##### Table of Contents



Accounts Receivable Factoring Arrangements
  
 Item 3. Quantitative and Qualitative Disclosures about Market Risks
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
   Changes in Internal Control Over Financial Reporting
  31




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##### Table of Contents



CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR
PROVISION OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
 
 32




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##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  Adverse global economic conditions could have a material adverse effect on the Companys business,
financial condition and results of operations.
  Recently adopted U.S. lead emissions standards under the NAAQS and the implementation of such
standards by applicable states could have a material adverse effect on the Companys financial
condition, cash flows and results of operations.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 (d) MaximumNumber (or(c) Total Number of
    
    Approximate Dollar(a) Total
    
    
    
    
    
    Shares (or Units)
    
    Value) of Shares (orNumber of
    
    (b) Average Price
    
    Purchased as Part of
    
    Units) that May YetShares (or Units)
    
    Paid per Share (or
    
    Publicly Announced
    
    Be Purchased UnderPeriod
    
    Purchased (1)
    
    Unit)
    
    Plans or Programs
    
    the Plans or ProgramsOctober 1 through October 31
    
    
    1,719
    
    
    $
    5.32November 1 through November
30
    
    
    2,503
    
    
    $
    3.87December 1 through December
31
    
    
    234
    
    
    $
    4.14
 
 (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
connection with vesting of restricted stock awards. 
 Item 3. Defaults Upon Senior Securities
  33




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##### Table of Contents



Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
 4.1
    
    Rights Agreement, dated as of December 6, 2008 by and between Exide
Technologies and American Stock Transfer & Trust Company, LLC,
incorporated by reference to Exhibit 4.1 to the Form 8-A
Registration Statement filed by Exide Technologies on December 8,
2008.31.1
    
    Certification of Gordon A. Ulsh, President and Chief Executive
Officer, pursuant to Section 302 of Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Phillip A. Damaska, Executive Vice
President and Chief Financial Officer, pursuant to Section 302 of
Sarbanes-Oxley Act of 2002.32
    
    Certifications pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
 34




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##### Table of Contents



SIGNATURES
  EXIDE TECHNOLOGIESBy:
    
    /s/ Phillip A. DamaskaPhillip A. DamaskaExecutive Vice President andChief Financial OfficerDate: February 4, 2009
 35