Exide Technologies New has a market cap of $318.7 million; its shares were traded at around $3.9902 with a P/E ratio of 10.7 and P/S ratio of 0.1.
Highlight of Business Operations:Lead and Other Raw Materials. Lead represented approximately 47.8% 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. Either 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 9.6% from $2,123 per metric ton for the nine months ended December 31, 2010 to $2,327 per metric ton for the nine months ended December 31, 2011. During the first nine months of fiscal 2012, the LME lead price has decreased from $2,719 per metric ton at March 31, 2011 to $1,980 per metric ton at December 31, 2011. At January 27, 2012, the quoted price on the LME was $2,287 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.
Exchange Rates. The Company is exposed to foreign currency risk in most European countries, principally from fluctuations in the Euro. For the first nine months of fiscal 2012, the exchange rate of the Euro to the U.S. Dollar increased 6.9% on average to $1.40 compared to $1.31 for first nine months of fiscal 2011. At December 31, 2011, the Euro was $1.30 or 8.5% lower as compared to $1.42 at March 31, 2011. Fluctuations in foreign currencies impacted the Companys results for the periods presented herein. For the first nine months ended December 31, 2011, approximately 59.5% of the Companys net sales were generated in Europe and ROW. Further, approximately 65.1% of the Companys aggregate accounts receivable and inventory as of December 31, 2011 were held by its European and ROW subsidiaries.
Transportation Americas net sales, excluding the foreign currency translation impact, decreased 3.0% due to a 17.8% decrease in aftermarket unit sales partially offset by a 83.0% increase in OEM unit sales and $45.0 million impact of lead related price increases. Third-party lead sales in the first nine months of fiscal 2012 were approximately $1.1 million higher than such third-party sales in the first nine months of fiscal 2011.
Gross profit was $361.8 million in the first nine months of fiscal 2012 versus $406.0 million in the first nine months of fiscal 2011. Gross margin decreased to 15.7% from 19.2% in the first nine months of fiscal 2011. Gross profit was unfavorably impacted by 92 basis points resulting from unrecovered lead costs. Foreign currency translation favorably impacted gross profit in the first nine months of fiscal 2012 by $11.8 million.
Operating income was $63.0 million in the first nine months of fiscal 2012 versus $86.4 million in the first nine months of fiscal 2011. Operating income was unfavorably impacted by lower gross profit, partially offset by manufacturing efficiencies, lower selling and administrative expenses and $13.8 million of lower restructuring and impairment expenses. Foreign currency translation favorably impacted operating income in the first nine months of fiscal 2012 by $0.6 million.
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