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Exide Technologies New has a market cap of $464.9 million; its shares were traded at around $6.15 with a P/E ratio of 10.4 and P/S ratio of 0.2. XIDE is in the portfolios of Steven Cohen of SAC Capital Advisors, Paul Tudor Jones of The Tudor Group, Bruce Kovner of Caxton Associates, Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates.
Highlight of Business Operations: Lead and Other Raw Materials. Lead represents approximately 48.9% of the Company’s cost of goods sold for the fiscal quarter ended June 30, 2010. The market price of lead fluctuates. Generally, when lead prices decrease, customers may seek disproportionate price reductions from the Company, and when lead prices increase, customers may resist price increases. Either of these situations may cause customer demand for the Company’s products to be reduced and the Company’s net sales and gross margins to decline. The average price of lead as quoted on the London Metals Exchange (“LME”) has increased 29.1% from $1,498 per metric ton for the three months ended June 30, 2009 to $1,943 per metric ton for the three months ended June 30, 2010. During the first fiscal quarter, the LME lead price has decreased from $2,119 per metric ton at March 31, 2010 to $1,689 per metric ton at June 30, 2010. At July 30, 2010, the quoted price on the LME was $2,060 per metric ton. To the extent that lead prices continue to be volatile and the Company is unable to maintain existing pricing or pass higher material costs resulting from this volatility to its customers, its financial performance will be adversely impacted.
Net sales were $644.7 million for the first quarter of fiscal 2011 versus $592.9 million in the first quarter of fiscal 2010. Foreign currency translation (primarily the weakening of the Euro against the U.S. dollar) unfavorably impacted net sales in the first quarter of fiscal 2011 by approximately $14.5 million. Excluding the foreign currency translation impact, net sales increased by approximately $66.3 million, or 11.2%, primarily as a result of $56.9 million in lead related price increases and higher unit sales.
Transportation Americas net sales were $227.1 million for the first quarter of fiscal 2011 versus $230.8 million for the first quarter of fiscal 2010. Net sales decreased by $3.7 million or 1.6% due to a decline in aftermarket unit sales, partially offset by an increase in OEM unit sales as well as a $3.7 million favorable impact caused by pricing actions related to the higher average price of lead. Third-party lead sales for the fiscal 2011 first quarter were approximately $11.1 million lower than the fiscal 2010 first quarter.
Transportation Europe and ROW net sales were $181.4 million for the first quarter of fiscal 2011 versus $146.4 million for the first quarter of fiscal 2010. Net sales, excluding an unfavorable impact of $7.9 million in foreign currency translation, were higher by $42.8 million or 29.2% mainly due to a $25.7 million favorable impact of the higher average price of lead as well as an increase in aftermarket and OEM unit sales.
Industrial Energy Europe and ROW net sales were $167.7 million for the first quarter of fiscal 2011 versus $155.7 million for the first quarter of fiscal 2010. Net sales, excluding an unfavorable foreign currency translation impact of $6.6 million, increased $18.7 million or 12.0% due to a favorable $22.6 million impact of the higher average price of lead as well as higher motive power unit sales, partially offset by lower unit sales in the network power market and lower base pricing to meet competitive market conditions.
Industrial Energy Europe and ROW expenses were $35.2 million in the first quarter of fiscal 2011 versus $52.3 million in the first quarter of fiscal 2010. Excluding a favorable foreign currency translation impact of approximately $2.0 million, expenses decreased by $15.2 million, due to $8.6 million in lower restructuring and asset impairment expenses primarily related to the closure of the U.K. battery plant, as well as lower selling and marketing expenses.
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