Exide Technologies (Exide) has reported net sales of $782.6 million for the third quarter of fiscal 2009, compared with the net sales of $1.04 billion in the year-ago quarter. It has also reported a net income of $15.4 million, or $0.20 per diluted share, for the third quarter of fiscal 2009, compared with the net income of $19.3 million, or $0.25 per diluted share, in the year-ago quarter.

Highlights of Fiscal 2009 Third Quarter and Year-to-Date Results:

Third quarter Adjusted EBITDA of $73.0 million; resulting in Adjusted EBITDA of $212.3 million year-to-date, a 29% improvement over the prior year nine month period;

Generated free cash flow of $74.7 million in the nine month period ended December 31, 2008 as compared with free cash flow burn of ($129.4) million in the comparable period of fiscal 2008;

Adjusted net income for the fiscal 2009 third quarter of $18.2 million or $0.23 per diluted share as compared to $17.3 million or $0.23 per diluted share in the fiscal 2008 third quarter; and

Reduced debt by $41.6 million and $102.0 million, in the three and nine month periods ended December 31, 2008 respectively, principally through reduction of accounts receivable factoring.

Third Quarter Consolidated Results:

Net sales in the fiscal 2009 period were negatively impacted by foreign currency translation, price reductions due to significantly lower average lead prices and overall lower unit volumes. A stronger dollar against most foreign currencies resulted in unfavorable currency translation of about $57 million. Pricing reductions resulting from existing lead escalator arrangements reduced third quarter sales by about $109 million, the result of a 61% drop in the average cost of lead in the current fiscal quarter when compared to the fiscal 2008 quarter. Favorable non-lead pricing in all divisions served to partially offset volume softness.

The results of the fiscal 2009 third quarter include currency remeasurement losses, net of tax, in the amount of $4.7 million or ($0.06) per share, while the results of the fiscal 2008 third quarter include currency remeasurement income of $5.7 million, net of tax, or $0.07 per share.

The fiscal 2009 third quarter includes unrealized gain from revaluation of our warrants liability in the amount of $7.1 million or $0.09 per share.

The fiscal 2009 third quarter results include restructuring charges of $7.3 million, net of tax, or ($0.09) per share. These charges are principally the result of an accelerated reduction-in-force program in Europe and Australia. This amount compares with net of tax restructuring charges in the third quarter of the prior year in the amount of $1.6 million or ($0.02) per share.

The current quarter tax provision includes a net $2.4 million or $0.03 per share one-time credit.

Excluding the impact of the above-described, non-operational items, adjusted net income for the fiscal 2009 third quarter was $18.2 million or $0.23 per share. This compares with adjusted net income for the comparable prior year period of $17.3 million or $0.23 per share. A reconciliation of net income and net income per share to adjusted net income and adjusted net income per share is provided below.

Consolidated Adjusted EBITDA for the fiscal 2009 third quarter was $73.0 million as compared with Adjusted EBITDA of $75.0 million in the prior year quarter. Gross profit as a% of net sales increased to 20.7% or $162.0 million in the fiscal 2009 third quarter, compared to 15.9% of net sales or $165.8 million in the prior year period, a 480 basis point margin improvement. The improvement in gross profit as a percentage of net sales is the result of continued focus on cost efficiencies, retention of non-lead related pricing partially offset by an $11.6 million unfavorable impact of foreign currency translation, and by rising non-lead commodity costs. Gordon A. Ulsh, president and chief executive officer, said, “All four business segments contributed to this quarter’s improvement in gross profit as a percentage of net sales notwithstanding the global economic headwinds. We are unrelenting as we strive to become more operationally efficient, improving productivity throughout our organization and driving profitability.”

Selling, general and administrative expenses for the fiscal 2009 third quarter decreased to $114.8 million versus the prior year comparable period of $120.0 million. About $9.9 million of the decrease resulted from foreign currency translation. This decrease was offset by increased spending on targeted marketing efforts and our increasing investment in engineering resources, including our new Industrial Energy engineering center in Germany.

Net interest expense decreased 19.2% or $4.2 million to $17.5 million in the fiscal 2009 third quarter as compared to $21.7 million in the fiscal 2008 third quarter as a result of lower average net debt and the favorable impact of lower interest rates. At December 31, 2008, net debt decreased 14% to $538.6 million from $625.6 million at March 31, 2008. Factoring of European accounts receivable was reduced to $21.5 million at December 31, 2008 from $94.3 million at March 31, 2008.

Fiscal 2009 Nine Month Consolidated Results:

The company reported a net loss for the nine months ended December 31, 2008 of $5.1 million or ($0.07) per share as compared to a net loss of $31.2 million or ($0.47) per share in the prior year period. Adjusted net income for the nine months ended December 31, 2008 was $49.7 million or $0.65 per share. This compares to an adjusted net income of $9.5 million or $0.14 per share for the prior year nine month period.

Net sales for the first nine months of fiscal 2009 aggregated $2.67 billion as compared with $2.67 billion for the prior year period. Excluding the effect of favorable foreign currency translation, net sales decreased 2% over the prior year period. Adjusted EBITDA for the nine months ended December 31, 2008 increased 29% to $212.3 million versus $164.0 million in the comparable prior year period. The increase in Adjusted EBITDA is the result of continued improvements in operational efficiencies and the retention of non-lead related pricing which have more than offset the impact of lower unit sales in most channels served by our businesses.

As of December 31, 2008, the company had cash and cash equivalents of $148.4 million and $141.2 million availability under its bank revolving loan facility. This compares to cash and cash equivalents of $90.5 million and $136.4 million availability under the revolving loan facility at March 31, 2008. Free cash flow was a positive $74.7 million for the nine months ended December 31, 2008 as compared to a free cash flow burn of ($129.4) million for the same period of fiscal 2008. This increase is due to the increase in Adjusted EBITDA and significantly improved working capital resulting from lower lead prices, partially offset by planned increases in restructuring and capital expenditures.