For more than 50 years, U.S. Navy submarines have relied on flooded battery technology. During the past decade, Exide's GNB Industrial Power group has been the sole supplier of these batteries.
Recently, however, Exide's GNB Industrial Power group applied its commercial-market Absolyte(R) valve-regulated lead-acid (VRLA) technology to become the first industrial battery company to qualify a VRLA submarine battery for U.S. Navy use.
"With the advancement of submarine technology, the Navy approached Exide with its desire to increase power density, eliminate gassing, reduce maintenance and enhance safety on the submarine," said Mitch Bregman, President - Industrial Energy Americas at Exide. "Working in conjunction with the Navy during the past few years, we have determined that valve-regulated technology can replace the flooded battery technology prevalent on submarines for more than 50 years.
"We are pleased to have been a long-term strategic partner of the U.S. Navy for more than 50 years," Mr. Bregman added. "We have enjoyed a solid working relationship and are proud to be at the forefront of developing the next evolution of battery technology for the U.S. Navy submarine fleet."
Exide expects to deliver the first VRLA batteries to the U.S. Navy in 2006. The batteries will be produced at Exide's plant in Ft. Smith, Ark., where the Company currently manufactures its Absolyte and Champion(R) VRLA industrial batteries.
As a result of the U.S. Navy's transition to the advanced VRLA technology, Exide expects to cease production of flooded submarine batteries later this year at its plant in Kankakee, Illinois. At that time, the Company expects that it will permanently close the plant, which currently employs 62 people.
"For more than half a century, the Kankakee plant has played an important role for both our Company and the nation," Mr. Bregman said. "With the elimination of flooded battery technology for use in navy submarines, we are forced to make the difficult decision to close the Kankakee plant.
"The Exide management team would like to thank the many dedicated team members at the Kankakee plant and our suppliers, who have worked for many years to produce a quality flooded submarine battery that has supported the U.S. Navy and its submarine fleet," Mr. Bregman said.
About Exide Technologies
Exide Technologies, with operations in 89 countries, is one of the world's largest producers and recyclers of lead-acid batteries. The Company's four global business groups - Transportation Americas, Transportation Europe and Rest of World, Industrial Energy Americas and Industrial Energy Europe and Rest of World - provide a comprehensive range of stored electrical energy products and services for industrial and transportation applications.
Transportation markets include original-equipment and aftermarket automotive, heavy-duty truck, agricultural and marine applications, and new technologies for hybrid vehicles and 42-volt automotive applications. Industrial markets include network power applications such as telecommunications systems, electric utilities, railroads, photovoltaic (solar-power related) and uninterruptible power supply (UPS), and motive-power applications including lift trucks, mining and other commercial vehicles.
Except for historical information, this press release may be deemed to contain "forward-looking" statements. The Company desires to avail itself of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (the "Act") and is including this cautionary statement for the express purpose of availing itself of the protection afforded by the Act.
Examples of forward-looking statements include, but are not limited to (a) projections of revenues, cost of raw materials, income or loss, earnings or loss per share, capital expenditures, growth prospects, dividends, the effect of currency translations, capital structure and other financial items, (b) statements of plans of and objectives of the Company or its management or Board of Directors, including the introduction of new products, or estimates or predictions of actions by customers, suppliers, competitors or regulating authorities, and (c) statements of future economic performance.
Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following general factors such as: (i) adverse reactions by creditors, vendors, customers, and others to the going-concern modification in the Company's audit report for the fiscal year ended March 31, 2005, (ii) the Company's substantial debt and debt service requirements, which may restrict the Company's operational and financial flexibility, as well as impose significant interest and financing costs and the Company's ability to comply with the covenants in its debt agreements or obtain waivers of noncompliance, (iii) the fact that lead, a major constituent in most of the Company's products, experiences significant fluctuations in market price and is a hazardous material that may give rise to costly environmental and safety claims, (iv) risks involved in foreign operations such as disruption of markets, changes in import and export laws, currency restrictions, currency exchange rate fluctuations and possible terrorist attacks against U.S. interests, (v) the Company's exposure to fluctuations in interest rates on its variable debt, (vi) the Company's ability to maintain and generate liquidity to meet its operating needs, (vii) the Company's ability to meet product order requirements, (viii) general economic conditions, (ix) the ability to acquire goods and services and/or fulfill labor needs at budgeted costs, and (x) the Company's reliance on a single supplier for its polyethylene battery separators.
Some of the factors contained herein, and other factors, are enumerated in further detail in the Company's most recent Form 10-Q filed on August 9, 2005, as well as in the Company's Registration Statement on Form S-3 filed with the Securities and Exchange Commission on July 15, 2005, because such factors have, in some instances, affected and in the future could affect, the ability of the Company to achieve its projected results and may cause actual results to differ materially from those expressed herein.
Further information about Exide, including its financial results, is available at www.exide.com.