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This excerpt taken from the XIDE 10-K filed Jun 4, 2009. External
Factors Which Affect the Company’s Financial
Performance
Lead and other Raw Materials. Lead represents
approximately 42.0% of the Company’s 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 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 LME has decreased
42.0% from $2,856 per metric ton for the fiscal year ended
March 31, 2008 to $1,654 per metric ton for the fiscal year
ended March 31, 2009. At May 29, 2009, the quoted
price on the LME was $1,530 per metric ton. To the extent that
lead prices continue to be volatile and the Company is unable to
pass higher material costs resulting from this volatility to its
customers, its financial performance will be adversely impacted.
Energy Costs. The Company relies on various
sources of energy to support its manufacturing and distribution
process, principally natural gas at its recycling facilities and
diesel fuel for distribution of its products. The Company seeks
to recoup these increased energy costs through price increases
or surcharges. To the extent the Company is unable to pass on
these higher energy costs to its customers, its financial
performance will be adversely impacted.
Competition. The global transportation and
industrial energy battery markets are highly competitive. In
recent years, competition has continued to intensify and has
impacted the Company’s ability to pass along increased
prices to keep pace with rising production costs. The effects of
this competition have been exacerbated by excess capacity in
certain of the Company’s markets and fluctuating lead
prices as well as low-priced Asian imports in certain of the
Company’s markets.
Exchange Rates. The Company is exposed to
foreign currency risk in most European countries, principally
from fluctuations in the Euro. For fiscal 2009 and 2008, the
average exchange rate of the Euro to
23
Table of Contents
the U.S. Dollar was essentially flat at $1.42. At
March 31, 2009, the Euro was $1.33 or 15.8% lower as
compared to $1.58 at March 31, 2008. Movements in foreign
currencies impacted the Company’s results for the periods
presented herein. For the fiscal year ended March 31, 2009,
approximately 57.1% of the Company’s net sales were
generated in Europe and ROW. Further, approximately 64.0% of the
Company’s aggregate accounts receivable and inventory as of
March 31, 2009 were held by its European subsidiaries.
The Company is also exposed, although to a lesser extent, to
foreign currency risk in the U.K., Poland, Australia, and
various countries in the Pacific Rim. Movements of exchange
rates against the U.S. Dollar can result in variations in
the U.S. Dollar value of
non-U.S. sales,
expenses, assets, and liabilities. In some instances, gains in
one currency may be offset by losses in another.
Markets. The Company is subject to
concentrations of customers and sales in a few geographic
locations and is dependent on customers in certain industries,
including the automotive, communications and data and material
handling markets. Economic difficulties experienced in these
markets and geographic locations impact the Company’s
financial results. Original equipment volumes in the
transportation and motive power channels have been and continue
to be depressed, reflecting the global economic conditions. In
addition, capital spending by major customers in our network
power channels also continue to be below historic levels.
Seasonality and Weather. The Company sells a
disproportionate share of its transportation aftermarket
batteries during the fall and early winter (the Company’s
third and a portion of its fourth fiscal quarters). Retailers
and distributors buy automotive batteries during these periods
so they will have sufficient inventory for cold weather periods.
The impact of seasonality on sales has the effect of increasing
the Company’s working capital requirements and also makes
the Company more sensitive to fluctuations in the availability
of liquidity.
Unusually cold winters or hot summers may accelerate battery
failure and increase demand for transportation replacement
batteries. Mild winters and cool summers may have the opposite
effect. As a result, if the Company’s sales are reduced by
an unusually warm winter or cool summer, it is not possible for
the Company to recover these sales in later periods. Further, if
the Company’s sales are adversely affected by the weather,
the Company cannot make offsetting cost reductions to protect
its liquidity and gross margins in the short-term because a
large portion of the Company’s manufacturing and
distribution costs are fixed.
Interest Rates. The Company is exposed to
fluctuations in interest rates on its variable rate debt,
portions of which were hedged during fiscal 2008 and fiscal
2009. See Notes 2 and 7 to the Consolidated Financial
Statements.
This excerpt taken from the XIDE 10-K filed Jun 9, 2008. External
Factors Which Affect the Company’s Financial
Performance
Lead and other Raw Materials. Lead represents
approximately 49% of the Company’s 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 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 LME has increased
100.3% from $1,426 per metric ton for the fiscal year ended
March 31, 2007 to $2,856 per metric ton for the fiscal year
ended March 31, 2008. At June 3, 2008, the quoted
price on the LME was $2,030 per metric ton. To the extent that
lead prices continue to be volatile and the Company is unable to
pass higher material costs resulting from this volatility to its
customers, its financial performance will be adversely impacted.
Energy Costs. The Company relies on various
sources of energy to support its manufacturing and distribution
process, principally natural gas at its recycling facilities and
diesel fuel for distribution of its products. The Company seeks
to recoup these increased energy costs through price increases
or surcharges. To the extent the Company is unable to pass on
these higher energy costs to its customers, its financial
performance will be adversely impacted.
Competition. The global transportation and
industrial energy battery markets are highly competitive. In
recent years, competition has continued to intensify and has
impacted the Company’s ability to pass along increased
prices to keep pace with rising production costs. The effects of
this competition have been exacerbated by excess capacity in
certain of the Company’s markets and fluctuating lead
prices as well as low-priced Asian imports in certain of the
Company’s markets.
Exchange Rates. The Company is exposed to
foreign currency risk in most European countries, principally
from fluctuations in the Euro and British Pound. For fiscal
2008, the exchange rate of the Euro to the U.S. Dollar has
increased 10.5% on average to $1.42 compared to $1.28 for fiscal
2007, and the exchange rate of the British Pound to the
U.S. Dollar has increased 6% on average to $2.01 compared
to $1.89 for fiscal 2007. At March 31, 2008, the Euro was
$1.58 or 18.2% higher as compared to $1.34 at March 31,
2007, and the British Pound was $1.99 or 0.8% higher as compared
to $1.97 at March 31, 2007.
The Company is also exposed, although to a lesser extent, to
foreign currency risk in Australia and the Pacific Rim.
Movements of exchange rates against the U.S. Dollar can
result in variations in the U.S. Dollar value of
non-U.S. sales,
expenses, assets, and liabilities. In some instances, gains in
one currency may be offset by losses in another. Movements in
European currencies impacted the Company’s results for the
periods presented herein. For the fiscal year ended
March 31, 2008, approximately 61.4% of the Company’s
net sales
Table of Contents
were generated in Europe and ROW. Further, approximately 64.3%
of the Company’s aggregate accounts receivable and
inventory as of March 31, 2008 were held by its European
subsidiaries.
Markets. The Company is subject to
concentrations of customers and sales in a few geographic
locations and is dependent on customers in certain industries,
including the automotive, communications and data and material
handling markets. Economic difficulties experienced in these
markets and geographic locations impact the Company’s
financial results.
Seasonality and Weather. The Company sells a
disproportionate share of its transportation aftermarket
batteries during the fall and early winter (the Company’s
third and a portion of its fourth fiscal quarters). Retailers
and distributors buy automotive batteries during these periods
so they will have sufficient inventory for cold weather periods.
In addition, many of the Company’s industrial battery
customers in Europe do not place their battery orders until the
end of the calendar year. The impact of seasonality on sales has
the effect of increasing the Company’s working capital
requirements and also makes the Company more sensitive to
fluctuations in the availability of liquidity.
Unusually cold winters or hot summers may accelerate battery
failure and increase demand for transportation replacement
batteries. Mild winters and cool summers may have the opposite
effect. As a result, if the Company’s sales are reduced by
an unusually warm winter or cool summer, it is not possible for
the Company to recover these sales in later periods. Further, if
the Company’s sales are adversely affected by the weather,
the Company cannot make offsetting cost reductions to protect
its liquidity and gross margins in the short-term because a
large portion of the Company’s manufacturing and
distribution costs are fixed.
Interest Rates. The Company is exposed to
fluctuations in interest rates on its variable rate debt,
portions of which were hedged during late fiscal 2008. See
Notes 2 and 7 to the Consolidated Financial Statements.
This excerpt taken from the XIDE 10-K filed Jun 11, 2007. External
Factors Which Affect the Company’s Financial
Performance
Lead and other Raw Materials. Lead represents
approximately 40% of the Company’s 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 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 Metal Exchange
(“LME”) has increased 37% from $1,041 per metric ton
for the fiscal year ended March 31, 2006 to $1,426 per
metric ton for the fiscal year ended March 31, 2007. At
June 8, 2007, the quoted price on the LME was $2,255 per
metric ton. To the extent that lead prices continue to be
volatile and the Company is unable to pass higher material costs
resulting from this volatility to its customers, its financial
performance will be adversely impacted.
Energy Costs. The Company relies on various
sources of energy to support its manufacturing and distribution
process, principally natural gas at its recycling facilities and
diesel fuel for distribution of its products. The Company seeks
to recoup these increased energy costs through surcharges. To
the extent the Company is unable to pass on these higher energy
costs to its customers, its financial performance is adversely
impacted.
Competition. The global transportation and
industrial energy battery markets are highly competitive. In
recent years, competition has continued to intensify and has
impacted the Company’s ability to pass along increased
prices to keep pace with rising production costs. The effects of
this competition have been exacerbated by excess capacity in
certain of the Company’s markets and fluctuating lead
prices as well as low-priced Asian imports in the Company’s
markets.
Exchange Rates. The Company is exposed to
foreign currency risk in most European countries, principally
from fluctuations in the Euro and British Pound. For fiscal
2007, the exchange rate of the Euro to the U.S. Dollar has
increased 5% on a weighted-average basis to $1.28 compared to
$1.22 for fiscal 2006, and the exchange rate of the British
Pound to the U.S. Dollar has increased 6% on a weighted
average basis to $1.89 compared to $1.79 for fiscal 2006. At
March 31, 2007, the Euro was $1.34 or 11% higher as
compared to $1.21 at March 31, 2006, and the British Pound
was $1.97 or 13% higher as compared to $1.74 at March 31,
2006.
The Company is also exposed, although to a lesser extent, to
foreign currency risk in Australia and the Pacific Rim.
Movements of exchange rates against the U.S. dollar can
result in variations in the U.S. dollar value of
non-U.S. sales,
expenses, assets, and liabilities. In some instances, gains in
one currency may be offset by losses in another. Movements in
European currencies impacted the Company’s results for the
periods presented herein. For the fiscal year ended
March 31, 2007, approximately 59% of the Company’s net
sales were generated in Europe and ROW. Further, approximately
64% of the Company’s aggregate accounts receivable and
inventory as of March 31, 2007 were held by its European
subsidiaries.
Table of Contents
Markets. The Company is subject to
concentrations of customers and sales in a few geographic
locations and is dependent on customers in certain industries,
including the automotive, communications and data and material
handling markets. Economic difficulties experienced in these
markets and geographic locations impact the Company’s
financial results.
Seasonality and Weather. The Company sells a
disproportionate share of its transportation aftermarket
batteries during the fall and early winter (the Company’s
third and portions of its fourth fiscal quarters). Retailers and
distributors buy automotive batteries during these periods so
they will have sufficient inventory for cold weather periods. In
addition, many of the Company’s industrial battery
customers in Europe do not place their battery orders until the
end of the calendar year. The impact of seasonality on sales has
the effect of increasing the Company’s working capital
requirements and also makes the Company more sensitive to
fluctuations in the availability of liquidity.
Unusually cold winters or hot summers may accelerate battery
failure and increase demand for transportation replacement
batteries. Mild winters and cool summers may have the opposite
effect. As a result, if the Company’s sales are reduced by
an unusually warm winter or cool summer, it is not possible for
the Company to recover these sales in later periods. Further, if
the Company’s sales are adversely affected by the weather,
the Company cannot make offsetting cost reductions to protect
its liquidity and gross margins in the short-term because a
large portion of the Company’s manufacturing and
distribution costs are fixed.
Interest Rates. The Company is exposed to
fluctuations in interest rates on its variable rate debt. See
Note 9 to the Consolidated Financial Statements.
This excerpt taken from the XIDE 10-K filed Jun 29, 2005. External Factors That Affect Our Financial Performance
Lead. Lead is the primary material by weight used in the manufacture of batteries, representing approximately one-third of the Company’s 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 Company’s products to be reduced and the Company’s net sales and gross margins to decline. Since March 31, 2003, lead prices quoted on the London Metal Exchange (“LME”) have increased from $457 per metric tonne to $1,022 per metric tonne at March 31, 2005, a change of over 100%. To the extent the Company is unable to pass on these higher material costs to its customers, the Company’s financial performance would be adversely impacted.
Competition. The global transportation and industrial energy battery markets, particularly in North America and Europe, are highly competitive. In recent years, competition has continued to intensify and the Company continues to come under increasing pressure for price reductions. This competition has been exacerbated by excess capacity and fluctuating lead prices as well as low-priced Asian imports impacting our markets.
Exchange Rates. The Company is exposed to foreign currency risk in most European countries, principally from fluctuations in the Euro and British Pound. The Company is also exposed, although to a lesser extent, to foreign currency risk in Australia and the Pacific Rim. Movements of exchange rates against the U.S. dollar can result in variations in the U.S. dollar value of non-U.S. sales. In some instances, gains in one currency may be offset by losses in another. Movements in European currencies impacted the Company’s results for the periods presented herein. In fiscal 2005, approximately 54% of the Company’s net sales were generated in Europe. Further, approximately 66% of the Company’s aggregate accounts receivable and inventory as of March 31, 2005 are held by its European subsidiaries.
Markets. The Company is subject to concentrations of customers and sales in a few geographic locations and is dependent on customers in certain industries, including the automotive, telecommunications and material handling markets. Economic difficulties experienced in these markets and geographic locations have and continue to impact the Company’s financial results.
Seasonality and weather. The Company sells most of its automotive aftermarket batteries during the fall and early winter (the Company’s second and third fiscal quarters). Retailers buy automotive batteries during these periods so they will have enough inventory when cold weather strikes. In addition, many of the Company’s industrial battery customers in Europe do not place their battery orders until the end of the calendar year. The seasonality of the Company’s business increases its working capital requirements.
Demand for automotive aftermarket batteries is significantly affected by the weather. Unusually cold winters or hot summers accelerate battery failure and increase demand for automotive replacement batteries. Mild winters and cool summers have the opposite effect. As a result, if the Company’s sales are reduced by an
24
Table of Contentsunusually warm winter or cool summer, it is not possible for the Company to recover these sales in later periods. Further, if the Company’s sales are adversely affected by the weather, the Company cannot make offsetting cost reductions to protect its gross margins in the short-term because a large portion of the Company’s manufacturing and distribution costs are fixed.
Interest rates. The Company is exposed to fluctuations in interest rates on its variable rate debt.
This excerpt taken from the XIDE 10-K filed Mar 1, 2005. External Factors That Affect Our Financial Performance
Competition. The global transportation, motive power and network power battery markets, particularly in North America and Europe, are highly competitive. In recent years, competition has continued to intensify and the Company continues to come under increasing pressure for price reductions. This competition has been exacerbated by excess capacity and fluctuating lead prices as well as low-priced Asian imports impacting our markets.
Exchange Rates. The Company is exposed to foreign currency risk in most European countries, principally from fluctuations in the Euro and British Pound. The Company is also exposed, although to a lesser extent, to foreign currency risk in Australia and the Pacific Rim. Movements of exchange rates against the U.S. dollar can result in variations in the U.S. dollar value of non-U.S. sales. In some instances, gains in one currency may be offset by losses in another. Movements in European currencies impacted the Company’s results for the periods presented herein.
Markets. The Company is subject to concentrations of customers and sales in a few geographic locations and is dependent on customers in certain industries, including the automotive, telecommunications and material handling markets. Economic difficulties experienced in these markets and geographic locations have and continue to impact the Company’s financial results.
Seasonality and weather. The Company sells most of its automotive aftermarket batteries during the fall and early winter (the Company’s second and third fiscal quarters). Retailers buy automotive batteries during these periods so they will have enough inventory when cold weather strikes. In addition, many of the Company’s industrial battery customers in Europe do not place their battery orders until the end of the calendar year. The seasonality of the Company’s business increases its working capital requirements.
Demand for automotive aftermarket batteries is significantly affected by the weather. Unusually cold winters or hot summers accelerate battery failure and increase demand for automotive replacement batteries. Mild winters and cool summers have the opposite effect. As a result, if the Company’s sales are reduced by an unusually warm winter or cool summer, it is not possible for the Company to recover these sales in later periods. Further, if the Company’s sales are adversely affected by the weather, the Company cannot make offsetting cost reductions to protect its gross margins in the short-term because a large portion of the Company’s manufacturing and distribution costs are fixed.
1
Table of ContentsInterest rates. The Company is exposed to fluctuations in interest rates on its variable rate debt.
Lead. Lead is the primary material by weight used in the manufacture of batteries, representing approximately one-third of the Company’s 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.
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