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This excerpt taken from the XIDE 10-K filed Jun 4, 2009. Fiscal
2009 Highlights and Outlook
The Company’s reported results continue to be impacted in
fiscal 2009 by fluctuations in the price of lead and other
commodity costs that are primary components in the manufacture
of batteries, as well as fluctuations in energy costs used in
the manufacturing and distribution of the Company’s
products.
In the Americas, the Company obtains the vast majority of its
lead requirements from six Company-owned and operated secondary
lead recycling plants. These facilities reclaim lead by
recycling spent lead acid batteries, which are obtained for
recycling from the Company’s customers and outside
spent-battery collectors. Recycling helps the Company in the
Americas control the cost of its principal raw material used in
North America as compared to purchasing lead at prevailing
market prices. Similar to the fluctuation in lead prices,
however, the cost of spent batteries has also fluctuated. After
a long period of increase, the average cost of spent batteries
decreased approximately 15.8% in fiscal 2009 versus fiscal 2008.
The Company continues to take pricing actions and is attempting
to secure higher captive spent battery return rates to help
mitigate the risks associated with this price volatility.
In Europe, the Company’s lead requirements are mainly
fulfilled by third-party suppliers. Because of the
Company’s exposure to the historically volatile lead market
prices in Europe, the Company has implemented several measures
to offset changes in lead prices, including selective pricing
actions and lead price escalators. The Company has automatic
lead price escalators with virtually all OEM customers. The
Company currently obtains a small portion of its lead
requirements from recycling in its European facilities.
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The Company expects that volatility in lead and other commodity
costs, which affect all business segments, will continue to put
pressure on the Company’s financial performance. However,
selective pricing actions, lead price escalators in certain
contracts and fuel surcharges are intended to help mitigate
these risks. The implementation of selective pricing actions and
price escalators generally lag the rise in market prices of lead
and other commodities. Both lead price escalators and fuel
surcharges may not be accepted by our customers, and if the
price of lead decreases, our customers may seek disproportionate
price reductions.
In addition to managing the impact of fluctuation in lead and
other commodity costs on the Company’s results, the key
elements of the Company’s underlying business plans and
continued strategies are:
(i) Successful execution and completion of the
Company’s more aggressive restructuring plans, and
organizational realignment of divisional and corporate functions
intended to result in further headcount reductions, principally
in selling, general and administrative functions globally.
(ii) Actions designed to improve the Company’s
liquidity and operating cash flow through working capital
reduction plans, the sale of non-strategic assets and
businesses, streamlining cash management processes, implementing
plans to minimize the cash costs of the Company’s
restructuring initiatives, and closely managing capital
expenditures.
(iii) Continued factory and distribution productivity
improvements through its established EXCELL program and Take
Charge! initiative.
(iv) Continued review and rationalization of the various
brand offerings of products in its markets to gain efficiencies
in manufacturing and distribution, and better leverage the
Company’s marketing spending.
(v) Increased R&D and engineering investments designed
to develop enhanced lead-acid products as well as products
utilizing alternative chemistries.
(vi) Gain further product and process efficiencies with
implementation of the Global Procurement structure. This
initiative focuses on leveraging existing relationships and
creating an infrastructure for global search for products and
components.
This excerpt taken from the XIDE 10-K filed Jun 9, 2008. Fiscal
2008 Highlights and Outlook
The Company’s reported results continued to improve
throughout fiscal 2008, but were again impacted by increases in
the price of lead and other commodities that are primary
components in the manufacture of batteries, as well as increases
in energy costs used in the manufacturing and distribution of
the Company’s products.
In the Americas market, the Company obtains the vast majority of
its lead requirements from six Company-owned and operated
secondary lead recycling plants. These facilities reclaim lead
by recycling spent lead-acid batteries that are obtained for
recycling from the Company’s customers and outside
spent-battery collectors. This process helps the Company in the
Americas control the cost of its principal raw material as
compared to purchasing lead at prevailing market prices. Similar
to the rise in lead prices, however, the cost of spent-batteries
has also increased. For fiscal 2008, the average cost of
spent-batteries has increased approximately 87% versus fiscal
2007. Therefore, the higher market price of lead with respect to
manufacturing in the Americas continues to impact results. The
Company continues to take selective pricing actions and attempts
to secure higher captive spent-battery return rates at lower
cost rather than purchasing spent batteries in the secondary
market to help mitigate these risks.
In Europe, the Company’s lead requirements are mainly
fulfilled by third-party suppliers. Because of the
Company’s exposure to lead market prices in Europe, and
based on historical price increases and volatility in lead
prices, the Company has implemented several measures to offset
higher lead prices including selective pricing actions, price
escalators, and long-term lead supply contracts. In addition,
the Company has automatic price escalators with many OEM
customers. The Company currently recycles a small portion of its
lead requirements in its European facilities.
The Company expects that these higher lead and other commodity
costs, which affect all business segments, will continue to put
pressure on the Company’s financial performance. However,
the selective pricing actions, lead price escalators in some
contracts, and fuel surcharges are intended to help mitigate
these risks. The implementation of selective pricing actions and
price escalators generally lags the rise in market
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prices of lead and other commodities. Both price escalators and
fuel surcharges are subject to the risk of customer acceptance.
In addition to managing the impact of higher lead and other
commodity costs on the Company’s results, the key elements
of the Company’s underlying business plans and continued
strategies are:
(i) Successful execution and completion of the
Company’s ongoing restructuring plans and organizational
realignment of divisional and corporate functions intended to
result in further headcount reductions, principally in selling,
general and administrative functions globally.
(ii) Actions designed to improve the Company’s
liquidity and operating cash flow through working capital
reduction plans, the sales of non-strategic assets and
businesses, streamlining cash management processes, implementing
plans to minimize the cash costs of the Company’s
restructuring initiatives, and closely managing capital
expenditures.
(iii) Continued factory and distribution productivity
improvements through the established Take Charge! initiative,
which is now installed in 23 of the Company’s 28
manufacturing locations.
(iv) Continued review and rationalization of the various
brand offerings of products in its markets to gain efficiencies
in manufacturing and distribution, and better leverage its
marketing spending.
(v) Gain further product and process efficiencies with
implementation of the Global Procurement structure. This
initiative focuses on leveraging existing relationships and
creating an infrastructure for global search for products and
components.
This excerpt taken from the XIDE 10-K filed Jun 11, 2007. Fiscal
2007 Highlights and Outlook
The Company’s reported results continued to be impacted in
fiscal 2007 by increases in the price of lead and other
commodity costs that are primary components in the manufacture
of batteries and increases in energy costs used in the
manufacturing and distribution of the Company’s products.
In the Americas market, the Company obtains the vast majority of
its lead requirements from six Company-owned and operated
secondary lead recycling plants. These facilities reclaim lead
by recycling spent lead-acid batteries that are obtained for
recycling from the Company’s customers and outside
spent-battery collectors. This helps the Company in the Americas
control the cost of its principal raw material as compared to
purchasing lead at prevailing market prices. Similar to the rise
in lead prices, however, the cost of spent batteries has also
increased. For fiscal 2007, the average cost of spent batteries
has increased approximately 18% versus fiscal 2006. Therefore,
the higher market price of lead with respect to North American
manufacturing continues to impact results. The Company continues
to take selective pricing actions and attempts to secure higher
captive spent battery return rates at lower cost than purchasing
cores in the secondary market to help mitigate these risks.
In Europe, the Company’s lead requirements are mainly
obtained from third-party suppliers. Because of the
Company’s exposure to lead market prices in Europe, and
based on historical price increases and volatility in lead
prices, the Company has implemented several measures to offset
higher lead prices including selective pricing actions, lead
price escalators, and long-term lead supply contracts. In
addition, the Company has automatic price escalators with many
OEM customers. The Company currently recycles a small portion of
its lead requirements in its European facilities.
The Company expects that these higher lead and other commodity
costs, which affect all business segments, will continue to put
pressure on the Company’s financial performance. However,
the selective pricing actions, lead price escalators in some
contracts, long-term lead supply contracts, and fuel surcharges
are intended to help mitigate these risks. The implementation of
selective pricing actions and price escalators generally lags
the rise in market prices of lead and other commodities. Both
price escalators and fuel surcharges are subject to the risk of
customer acceptance.
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In addition to managing the impact of higher lead and other
commodity costs on the Company’s results, the key elements
of the Company’s underlying business plans and continued
strategies are:
(i) Successful execution and completion of the
Company’s ongoing restructuring plans, and organizational
realignment of divisional and corporate functions resulting in
further headcount reductions, principally in selling, general
and administrative functions globally.
(ii) Actions designed to improve the Company’s
liquidity and operating cash flow through working capital
reduction plans, the sales of non-strategic assets and
businesses, streamlining cash management processes, implementing
plans to minimize the cash costs of the Company’s
restructuring initiatives and closely managing capital
expenditures.
(iii) Continued factory and distribution productivity
improvements through its established Take Charge! initiative,
which is now installed in 10 of its 28 manufacturing locations,
including continuing a focused relationship with the principal
consultant. This year will see further integration with its
Excell initiative.
(iv) The Company will continue to review and rationalize
the various brand offerings of product in its markets to gain
efficiencies in manufacturing and distribution, and better
leverage of its marketing spending.
(v) The Company will gain further product and process
efficiencies with implementation of the announced Global
Procurement structure. This focuses on leveraging existing
relationships and creating an infrastructure for global search
for products and components.
This excerpt taken from the XIDE 10-K filed Jun 29, 2005. Fiscal 2005 Highlights and Outlook
The Company’s reported results for fiscal 2005 were impacted by three principal considerations: (i) the impact of Fresh Start accounting and reporting on the reported basis of the Company’s assets and liabilities, which were based upon enterprise values and reorganization values of approximately $1.5 billion and $2.7 billion, respectively, (ii) the goodwill impairment charge of $388,524 and (iii) the impact of material increases in the price of lead, which is a primary component in the manufacture of batteries and makes up approximately one-third of the Company’s cost of goods sold. Since March 31, 2003, lead prices quoted on the LME have increased from $457 per metric tonne to over $1,022 per metric tonne at March 31, 2005, a change of over 100%.
In the North American market, the Company obtains approximately 90% of its lead requirements from six Company-owned and operated secondary lead recycling plants. These facilities reclaim lead by recycling spent lead acid batteries, which are obtained for recycling from the Company’s customers and outside spent-battery collectors. This helps the Company in North America control the cost of its principal raw material as compared to purchasing lead at prevailing market prices. Similar to the rise in lead prices, however, the cost of spent batteries has also increased. Therefore the Company expects that the higher market price of lead with respect to North American manufacturing will nevertheless continue to have some impact on results. The Company has and continues to take selective pricing actions and attempts to secure higher spent battery return rates to help mitigate these risks.
In Europe, the Company’s lead requirements are mainly obtained from third-party suppliers. Because of higher world lead prices, the Company expects that lead in Europe will cost the Company significantly more than previously anticipated in fiscal 2005. Because of the Company’s exposure to lead market prices in Europe, the Company has implemented several measures to offset higher lead prices including selective pricing actions, lead price escalators, lead hedging and entering into long-term lead supply contracts. In addition, the Company already has automatic price escalators with many original equipment manufacturers (“OEM”) customers. The Company currently recycles a small portion of its lead requirements in its European facilities.
The Company expects that these higher lead prices will continue to put pressure on the Company’s financial performance. However, the selective pricing actions, lead price escalators, lead hedging and long-term lead supply contracts are intended to help mitigate this risk. The implementation of selective pricing actions and price escalators generally lags the rise in market prices of lead and are subject to the risk of customer acceptance.
In addition to management of the impact of higher lead prices on the Company’s results, the key elements of the Company’s underlying business plans and strategies for fiscal 2006 are
(i) Successful execution and completion of the Company’s ongoing restructuring plans, including a plant closure in France and organizational realignment of divisional and corporate functions resulting in further headcount reductions, principally in selling, general and administrative functions globally.
(ii) Actions to improve the Company’s liquidity and operating cash flow through aggressive working capital reduction plans, the sales of non-strategic assets and businesses, streamlining cash management processes and implementing plans to minimize the cash costs of the Company’s restructuring initiatives.
(iii) Continuing to reduce costs, improve customer service and satisfaction through enhanced quality and reduced lead times. The Company is continuing to drive these strategies through its EXCELL lean supply chain initiative, improved and focused supplier procurement initiatives across the Company and reductions in salaried headcount and discretionary spending.
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Table of Contents(iv) Moving to secure new business with new customers and developing new markets, including expansion into Russia, China and Mexico.
This excerpt taken from the XIDE 10-Q filed Feb 14, 2005. First Nine Months of Fiscal 2005 Highlights and Outlook
The Company’s reported results for the first nine months of fiscal 2005 were impacted by two principal considerations: (i) the impact of Fresh Start accounting and reporting on the reported basis of the Company’s assets and liabilities, which were based upon enterprise values and reorganization values of approximately $1.5 billion and $2.7 billion, respectively and (ii) the impact of material increases in the price of lead, which is a primary component in the manufacture of batteries and makes up approximately one-third of the Company’s cost of goods sold. Since March 31, 2003, lead prices quoted on the LME have increased from $457 per metric tonne to over $990 per metric tonne at December 31, 2004, a change of over 100%. At March 31, 2004, lead prices were $829 per metric tonne.
35
Table of ContentsIn the North American market, the Company obtains 90% of its lead requirements from six Company-owned and operated secondary lead recycling plants. These facilities reclaim lead by recycling spent lead acid batteries, which are obtained for recycling from the Company’s customers and outside spent-battery collectors. This helps the Company in North America control the cost of its principal raw material as compared to purchasing lead at prevailing market prices. Similar to the rise in lead prices, however, the cost of spent batteries has also increased, but not at the same rate as raw lead. Therefore the Company expects that the higher market price of lead with respect to North American manufacturing will nevertheless continue to have some impact on results. The Company has and continues to take selective pricing actions and secure higher spent battery return rates to help mitigate these risks.
In Europe, the Company’s lead requirements are mainly obtained from third-party suppliers. Because of higher world lead prices, the Company expects that lead in Europe will cost the Company significantly more than previously anticipated in fiscal 2005. Because of the Company’s exposure to lead market prices in Europe, the Company has implemented several measures to offset higher lead prices including selective pricing actions, lead price escalators, lead hedging and entering into long-term lead supply contracts. In addition, the Company already has automatic price escalators with many original equipment manufacturers (“OEM”) customers. The Company currently recycles a small portion of its lead requirements in its European facilities.
The Company expects that these higher lead prices will continue to put pressure on the Company’s financial performance. However, the selective pricing actions, lead price escalators, lead hedging and long-term lead supply contracts are intended to help mitigate this risk. The implementation of selective pricing actions and price escalators generally lags the rise in market prices of lead and are subject to the risk of customer acceptance.
In addition to management of the impact of higher lead prices on the Company’s results, the key elements of the Company’s underlying business plans and strategies for fiscal 2005 are
(i) Successful execution and completion of the Company’s restructuring plans, including plant closures in Spain, Italy and Germany and ongoing headcount reductions, principally in Selling, General and Administrative functions globally.
(ii) Actions to improve the Company’s operating cash flow through aggressive working capital reduction plans, the sales of non-strategic assets and businesses, streamlining cash management processes and implementing plans to minimize the cash costs of the Company’s restructuring initiatives. These programs are even more significant to the Company currently, as rising lead prices have an adverse impact upon the Company’s working capital needs as a result of lengthy order-to-cash conversion cycles.
(iii) Continuing to reduce costs, improve quality and reduce lead times to our customers. The Company is continuing to drive these strategies through its EXCELL lean supply chain initiative, aggressive supplier procurement initiatives across the Company and reductions in salaried headcount and discretionary spending.
(iv) Moving to secure new business with new customers and developing new markets, including expansion into Russia, China and Mexico.
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