Exide Technologies New has a market cap of $452.4 million; its shares were traded at around $6.13 with a P/E ratio of 7.5 and P/S ratio of 0.2. XIDE is in the portfolios of Steven Cohen of SAC Capital Advisors, Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates.
Highlight of Business Operations:Lead and other Raw Materials. Lead represents approximately 49.7% of the Companys cost of goods sold. 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. Both of these situations may cause customer demand for the Companys products to be reduced and the Companys net sales and gross margins to decline. The average price of lead as quoted on the London Metals Exchange (LME) has increased 15.5% from $1,721 per metric ton for the six months ended September 30, 2009 to $1,988 per metric ton for the six months ended September 30, 2010. During the first six months of fiscal 2011, the LME lead price has increased from $2,119 per metric ton at March 31, 2010 to $2,261 per metric ton at September 30, 2010. At October 29, 2010, the quoted price on the LME was $2,436 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 $668.0 million for the second quarter of fiscal 2011 versus $631.8 million in the second quarter of fiscal 2010. Foreign currency translation (primarily the Euro against the U.S. dollar) unfavorably impacted net sales in the second quarter of fiscal 2011 by approximately $30.2 million. Excluding the foreign currency translation impact, net sales increased by approximately $66.4 million, or 10.5% primarily the result of $45.6 million in lead related price increases combined with higher unit sales.
Transportation Americas net sales were $227.0 million for the second quarter of fiscal 2011 versus $224.8 million for the second quarter of fiscal 2010. Net sales increased by $2.3 million or 1.0% due to a $9.8 million favorable impact of pricing actions related to the higher average price of lead and higher unit sales in the OEM channel, partially offset by a decline in aftermarket unit sales. Third-party lead sales for the fiscal 2011 second quarter were approximately $8.5 million lower than the fiscal 2010 second quarter.
Transportation Europe and ROW net sales were $205.4 million for the second quarter of fiscal 2011 versus $182.5 million for the second quarter of fiscal 2010. Net sales, excluding an unfavorable impact of $17.8 million in foreign currency translation, increased by $40.7 million or 22.3% mainly due to a $20.8 million favorable lead-related pricing increase as well as an increase in aftermarket unit sales, partially offset by lower OEM unit sales as new car builds were impacted by the cessation of government sponsored scrap programs.
Industrial Energy Europe and ROW net sales were $165.7 million for the second quarter of fiscal 2011 versus $168.0 million for the second quarter of fiscal 2010. Net sales, excluding an unfavorable foreign currency translation impact of $12.4 million, increased $10.0 million or 6.0% due to a favorable $11.5 million lead-related pricing increase as well as higher unit sales in the Motive Power market, partially offset by lower unit sales in the Network Power market. Pricing, other than for lead, remained an issue as excess market capacity continued to result in extremely competitive market dynamics.
Industrial Energy Europe and ROW expenses were $33.0 million in the second quarter of fiscal 2011 versus $43.8 million in the second quarter of fiscal 2010. Excluding a favorable foreign currency translation impact of approximately $2.8 million, expenses decreased by $8.0 million, primarily due to $5.3 million in lower restructuring expenses related to the closure of the U.K. battery plant in the prior year quarter, as well as lower selling, marketing and advertising expenses, as well as general and administrative expenses.
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