Exide

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(4.08) - 28 rating

INTRODUCE

Exide Technologies hopes you’ll get a charge out of its products. The company makes and recycles automotive and industrial batteries for retailers and transportation manufacturers, including Wal-Mart and Toyota. The company also makes batteries for boats, farm equipment, golf carts, hybrid vehicles, and wheelchairs. Industrial applications include computer, locomotive, power plant, and telecommunications systems. Centra, DETA, Exide NASCAR Select, Absolyte, and Sonnenschein make up some of the company’s brand names. Operations outside the US account for about 60% of sales. Exide operates through four segments: transportation Europe and the rest of the world (ROW), 33% of revenue; transportation Americas, 29% of revenue; industrial energy Europe and ROW, 26% of revenue; and industrial energy Americas, 12% of revenue. Transportation Europe and ROW distributes batteries to such OEMs as BMW, Fiat, Nissan, Renault, and Volkswagen. The segment also serves the aftermarket by distributing batteries to wholesalers, auto centers, and service installers. The transportation Americas segment operates about 80 branches that distribute batteries and collects them for recycling at five facilities. Industrial energy Europe and ROW uses a network of sales staff, service organizations, distributors, and agents to supply motive power products in Europe. The segment also distributes network power products in Europe and batteries and chargers in Australia and New Zealand through a sales staff and service organizations. Industrial energy Americas uses its own sales and service staff and independent manufacturers’ representatives to distribute motive power products to such customers as lift truck OEMs, industrial companies, retailers, and warehousing companies. Exide Technologies operates in more than 15 countries. The company’s 2011 sales grew about 7% compared with 2010 as the result in part of favorable foreign currency translation and strong demand in many of the company’s markets. By segment, transportation Europe’s sales rose about 8% in 2011 compared with 2010 thanks mainly to strong demand from OEMs. Transportation Americas struggled with a decrease of about 4% in 2011 compared with 2010 as a result in part of less aftermarket demand. Industrial energy Europe enjoyed an uptick of 8% to meet more demand in the motive power market. Industrial energy Americas’ sales soared about 15% in 2011 compared with 2010 thanks to strong sales in both the motive power and network power groups. The company weathered a net loss of more than $11 million in fiscal 2010 but, along with healthier sales, climbed up to a net income of more than $26 million in fiscal 2011 and then up to a net of around $56 million in fiscal 2012. Despite these positive numbers, the company must still contend with total indebtedness of more than $776 million. The company has invested about $70 million, including a grant of more than $34 million from the US Department of Energy, to expand its Columbus, Georgia, and Bristol, Tennessee, facilities’ battery production capacity by about 1.5 million batteries a year. The expansions are creating about 320 new jobs. In 2011 the company opened an annex at its Alpharetta, Georgia, facility for testing batteries and other functions. In addition to its internal efforts to improve revenues, the company is pursuing collaborative partnerships and alliances to expand its advanced battery technology and product offerings. Along with any efforts to expand, though, the company’s supply costs have been rising. The cost of spent batteries, the source of just about all of the company’s North American lead supply for making its product, rose by 14% on average in fiscal 2012 compared to fiscal 2011. To cushion itself against such instability, Exide takes pricing actions and tries to obtain higher captive spent battery return rates. As the primary material in Exide’s batteries, leads accounts for about 49% of the cost of goods produced.