10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 31, 2008.

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 1-9389

C&D TECHNOLOGIES, INC.

(Exact name of Registrant as specified in its Charter)

Delaware	13-3314599
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1400 Union Meeting Road, Blue Bell, Pennsylvania	19422
(Address of principal executive office)	(Zip Code)

(215) 619-2700

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:    YES  x    NO  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accepted filer and large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer  ¨            Accelerated filer  x            Non-accelerated filer  ¨            Smaller reporting company  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    YES  ¨    NO  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Number of shares of the Registrant’s Common Stock outstanding on July 31, 2008: 25,729,254

C&D TECHNOLOGIES, INC.

AND SUBSIDIARIES

FORM 10-Q

INDEX

Part I	FINANCIAL INFORMATION
Item 1	Financial Statements (Unaudited)
	Consolidated Balance Sheets – July 31, 2008 and January 31, 2008	3
	Consolidated Statements of Operations – Three and Six Months Ended July 31, 2008 and 2007	5
	Consolidated Statements of Cash Flows – Six Months Ended July 31, 2008 and 2007	6
	Consolidated Statements of Comprehensive Income (Loss) – Three and Six Months Ended July 31, 2008 and 2007	8
	Notes to Consolidated Financial Statements	9
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3	Quantitative and Qualitative Disclosures about Market Risk	28
Item 4	Controls and Procedures	28
Part II	OTHER INFORMATION
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 4	Submission of Matters to a Vote of Security Holders	29
Item 6	Exhibits	31
SIGNATURES		32
EXHIBIT INDEX		33

2

PART I.    FINANCIAL INFORMATION

Item 1. Financial Statements

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except par value)

(UNAUDITED)

	July 31, 2008		January 31, 2008
ASSETS
Current assets:
Cash and cash equivalents	$	4,567	$	6,536
Restricted cash		1,745		4,383
Accounts receivable, less allowance for doubtful accounts of $1,227 and $1,148		59,935		62,946
Inventories		71,202		85,832
Prepaid taxes		932		800
Other current assets		1,302		835
Assets held for sale		—		450
Total current assets		139,683		161,782
Property, plant and equipment, net		83,372		79,782
Deferred income taxes		32		32
Intangible and other assets, net		15,621		16,091
Goodwill		59,963		59,870
TOTAL ASSETS	$	298,671	$	317,557
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	5,856	$	5,568
Accounts payable		31,883		51,382
Accrued liabilities		14,256		15,593
Other current liabilities		5,972		9,767
Total current liabilities		57,967		82,310
Deferred income taxes		10,347		10,020
Long-term debt		124,980		124,133
Other liabilities		18,924		20,568
Total liabilities		212,218		237,031

The accompanying notes are an integral part of these statements.

3

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (continued)

(Dollars in thousands, except par value)

(UNAUDITED)

	July 31, 2008			January 31, 2008
Commitments and contingencies (see Note 8)
Minority interest		11,619			11,418
Stockholders’ equity:
Common stock, $.01 par value, 75,000,000 shares authorized; 29,160,901 and 29,081,110 shares issued, respectively		291			291
Additional paid-in capital		75,801			74,995
Treasury stock, at cost, 3,431,647 and 3,414,633 shares, respectively		(47,358	)		(47,243	)
Accumulated other comprehensive income		(21,015	)		(24,270	)
Retained earnings		67,115			65,335
Total stockholders’ equity		74,834			69,108
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	298,671		$	317,557

The accompanying notes are an integral part of these statements.

4

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per share data)

(UNAUDITED)

	Three months ended July 31,						Six months ended July 31,
	2008			2007			2008			2007
NET SALES	$	92,485		$	82,854		$	186,261		$	160,333
COST OF SALES		76,841			70,480			156,925			137,536
GROSS PROFIT		15,644			12,374			29,336			22,797
OPERATING EXPENSES:
Selling, general and administrative expenses		10,365			8,725			20,020			17,257
Research and development expenses		1,703			1,693			3,394			3,224
Gain on sale of Shanghai, China plant		—			—			—			(15,162	)
OPERATING INCOME FROM CONTINUING OPERATIONS		3,576			1,956			5,922			17,478
Interest expense, net		2,285			2,133			4,551			4,310
Other (income) expense, net		75			(308	)		(298	)		(939	)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND MINORITY INTEREST		1,216			131			1,669			14,107
Income tax provision (benefit) from continuing operations		161			(999	)		295			(905	)
INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST		1,055			1,130			1,374			15,012
Minority interest		(147	)		(526	)		(405	)		4,002
NET INCOME FROM CONTINUING OPERATIONS		1,202			1,656			1,779			11,010
LOSS FROM DISCONTINUED OPERATIONS BEFORE INCOME TAXES		—			(3,289	)		—			(6,397	)
Income tax provision from discontinued operations		—			1,449			—			3,565
LOSS FROM DISCONTINUED OPERATIONS		—			(4,738	)		—			(9,962	)
NET INCOME (LOSS)	$	1,202		$	(3,082	)	$	1,779		$	1,048
Income (Loss) per share:
Basic:
Net income from continuing operations	$	0.05		$	0.06		$	0.07		$	0.43
Net loss from discontinued operations	$	—		$	(0.18	)	$	—		$	(0.39	)
Net income (loss)	$	0.05		$	(0.12	)	$	0.07		$	0.04
Diluted:
Net income from continuing operations	$	0.05		$	0.06		$	0.07		$	0.32
Net loss from discontinued operations	$	—		$	(0.18	)	$	—		$	(0.22	)
Net income (loss)	$	0.05		$	(0.12	)	$	0.07		$	0.10

The accompanying notes are an integral part of these statements.

5

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(UNAUDITED)

	Six months ended July 31,
	2008			2007
Cash flows from operating activities:
Net income	$	1,779		$	1,048
Net loss from discontinued operations		—			(9,962	)
Net income from continuing operations		1,779			11,010
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Minority interest		(405	)		4,002
Share-based compensation		378			315
Depreciation and amortization		6,009			5,533
Amortization of debt acquisition costs		848			791
Annual retainer to Board of Directors paid by the issuance of common stock		190			273
Deferred income taxes		327			(267	)
Gain on disposal of assets		—			(15,174	)
Changes in assets and liabilities:
Accounts receivable		3,333			(4,148	)
Inventories		14,894			(10,065	)
Other current assets		(452	)		(2,138	)
Accounts payable		(18,313	)		435
Accrued liabilities		(1,486	)		(294	)
Income taxes payable		(961	)		355
Other current liabilities		(1,301	)		(365	)
Funds provided to discontinued operations		—			(8,263	)
Other long-term assets		(60	)		270
Other liabilities		(1,482	)		3,451
Other, net		(92	)		1,306
Net cash provided by (used in) continuing operations		3,206			(12,973	)
Net cash provided by discontinued operating activities		—			941
Net cash provided by (used in) operating activities		3,206			(12,032	)
Cash flows from investing activities:
Acquisition of property, plant and equipment		(8,548	)		(4,088	)
Proceeds from disposal of property, plant and equipment		483			1,893
Decrease in restricted cash		2,638			—
Net cash used in continuing investing activities		(5,427	)		(2,195	)
Net cash used in discontinued investing activities		—			(464	)
Net cash used in investing activities		(5,427	)		(2,659	)

The accompanying notes are an integral part of these statements.

6

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(UNAUDITED)

	Six months ended July 31,
	2008			2007
Cash flows from financing activities:
Proceeds from new borrowings		—			14,107
Increase in overdrafts		18			1,185
Financing cost of long term debt		—			(459	)
Proceeds from exercise of stock options		238			—
Purchase of treasury stock		(115	)		(130	)
Net cash provided by continuing financing activities		141			14,703
Net cash used in discontinued financing activities		—			(405	)
Net cash provided by financing activities		141			14,298
Effect of exchange rate changes on cash and cash equivalents		111			127
Decrease in cash and cash equivalents from continuing operations		(1,969	)		(338	)
Cash and cash equivalents, beginning of period		6,536			5,384
Cash and cash equivalents, end of period	$	4,567		$	5,046

The accompanying notes are an integral part of these statements.

7

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Dollars in thousands)

(UNAUDITED)

	Three months ended July 31,						Six months ended July 31,
	2008			2007			2008		2007
NET INCOME (LOSS)	$	1,202		$	(3,082	)	$	1,779	$	1,048
Other comprehensive income (loss), net of tax:
Net unrealized (loss) gain on derivative instruments		(470	)		(1,563	)		1,797		(2,297	)
Adjustment to recognize pension liability and net periodic pension cost		88			411			166		850
Foreign currency translation adjustments		590			673			1,292		976
Total comprehensive income (loss)	$	1,410		$	(3,561	)	$	5,034	$	577

The accompanying notes are an integral part of these statements.

8

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share data)

(UNAUDITED)

1. INTERIM STATEMENTS AND BASIS OF PRESENTATION

The accompanying interim unaudited consolidated financial statements of C&D Technologies, Inc (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, we do not include all the information and notes required for complete financial statements. In the opinion of management, the interim unaudited consolidated financial statements include all adjustments considered necessary for the fair statements of the financial position, results of operations and cash flows for the interim periods presented. The financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2008 Annual Report on Form 10-K dated April 10, 2008.

On September 7, 2007 the Company announced the change of method of accounting for its inventory from the last-in, first-out (“LIFO”) to the first-in, first-out (“FIFO”) method. In accordance with Statement of Financial Accounting Standard (“SFAS”) No. 154, “Accounting Changes and Error Corrections”, the Company has retrospectively applied this change in method of inventory costing to all prior periods.

2. DISCONTINUED OPERATIONS

In fiscal year 2008 the Company sold its Power Electronics Division and certain assets of its Motive Power Division. As a result, activity in fiscal year 2008 related to these divisions has been reclassified as discontinued operations in the interim unaudited consolidated financial statements.

3. STOCK-BASED COMPENSATION

The Company granted 368,529 and 373,529 stock option awards during the three and six months ended July 31, 2008, and 36,000 and 315,334 during the three and six months ended July 31, 2007, respectively. Under the provisions of SFAS No. 123R, the Company recorded $163 and $239, of stock compensation expense related to stock option awards in its unaudited consolidated statement of operations for the three and six months ended July 31, 2008, and $169 and $233 during the three and six months ended July 31, 2007, respectively. The impact on earnings per share for the three months ended July 31, 2008 and three and six months ended July 31, 2007 was less than $0.01. The impact on earnings per share for the six months ended July 31, 2008 was $0.01.

On May 1, 2008, the Company granted 90,750 restricted stock awards and 90,750 performance shares to selected executives and other key employees under the Company’s 2007 Stock Incentive Plan. On July 1, 2008 the Company granted 12,258 restricted stock awards to the directors with a vesting period of one year. On March 12, 2007, the Company granted 84,600 restricted stock awards and 84,600 performance shares to selected executives and other key employees under the Company’s 2007 Stock Incentive Plan. The restricted stock awards vest ratably over four years and the expense is recognized over the vesting period. The Company recorded $101 and $139, of compensation related to restricted stock awards in its unaudited consolidated statement of operations for the three and six months ended July 31, 2008, and $54 and $82 during the three and six months ended July 31, 2007, respectively. The performance shares vest at the end of the performance period upon the achievement of pre-established financial objectives. No compensation expense was recorded for the three and six months ended July 31, 2008 and 2007 for the performance related awards issued in that period.

9

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollars in thousands, except share and per share data)

(UNAUDITED)

The following table summarizes information about the stock options outstanding at July 31, 2008:

	OPTIONS OUTSTANDING				OPTIONS EXERCISABLE
Range of Exercise Prices	Number Outstanding	Weighted- Average Remaining Contractual Life	Weighted- Average Exercise Price		Number Exercisable	Weighted- Average Contractual Life	Weighted- Average Exercise Price
$   4.25  -  $   6.30	693,334	7.4 Years	$	5.54	55,668	8.5 Years	$	5.96
$   6.81  -  $   9.12	517,034	7.4 Years	$	7.63	439,671	7.3 Years	$	7.56
$   9.80  -  $ 14.50	161,656	4.5 Years	$	11.48	161,656	4.5 Years	$	11.48
$ 14.94  -  $ 22.31	523,824	3.6 Years	$	18.93	523,824	3.6 Years	$	18.93
$ 26.76  -  $ 35.00	124,520	2.7 Years	$	32.12	124,520	2.7 Years	$	32.12
$ 49.44  -  $ 55.94	34,850	1.9 Years	$	54.96	34,850	1.9 Years	$	54.96
Total	2,055,218	5.8 Years	$	12.40	1,340,189	5.0 Years	$	15.93

The estimated fair value of the options granted was calculated using the Black Scholes Merton option pricing model (“Black Scholes”). The Black Scholes model incorporates assumptions to value stock-based awards. The risk-free rate of interest for periods within the estimated life of the option is based on U.S. Government Securities Treasury Constant Maturities over the contractual term of the equity instrument. Expected volatility is based on the historical volatility of the Company’s stock. The Company uses the shortcut method described in Staff Accounting Bulletin No. 110 to determine the expected life assumption.

The fair value of stock options granted during the three and six months ended July 31, 2008 and 2007 was estimated on the grant date with the following average assumptions.

	Three months ended July 31,		Six months ended July 31,
	2008	2007	2008	2007
Risk-free interest rate	3.11%-3.32%	4.88%	2.58%-3.32%	4.45%-4.88%
Dividend yield	0.00%	0.00%	0.00%	0.00%
Volatility factor	51.21%-52.92%	49.45%	50.91%-52.92%	49.25%-49.45%
Expected lives	4.5 - 5.5 Years	5 Years	4.5 - 5.5 Years	5 Years

4. NEW ACCOUNTING PRONOUNCEMENTS

In September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 157, “Fair Value Measurements”, which establishes a framework for measuring fair value in accordance with generally accepted accounting principles (“GAAP”), and expands disclosures about fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements and, accordingly, SFAS No. 157 does not require any new fair value measurements. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. On February 12, 2008 FASB issued Staff Position (FSP) FAS 157-2. This FSP permits a delay in the effective date of SFAS No. 157 to fiscal years beginning after November 15, 2008, for non-financial assets and non-financial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The adoption of SFAS 157 for financial assets and liabilities did not have a material impact on the Company’s condensed consolidated financial statements. See Note 13 for information and related disclosures regarding the Company’s fair value measurements.

10

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollars in thousands, except share and per share data)

(UNAUDITED)

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities,” which expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. We have adopted SFAS No. 159 and determined it has no impact on our consolidated financial statements as no fair value elections were made.

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”, which improves reporting by creating greater consistency in the accounting and financial reporting of business combinations, resulting in more complete, comparable, and relevant information for investors and other users of financial statements. To achieve this goal, the new standard requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires the acquirer to disclose to investors and other users all of the information they need to evaluate and understand the nature and financial effect of the business combination. SFAS No. 141(R) is effective for fiscal years beginning after December 15, 2008. The Company is currently evaluating the impact of SFAS No. 141(R) on its financial position and results of operations. The impact of adopting SFAS No. 141(R) will depend on the nature, terms and size of any business combination completed after the effective date.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements”, which improves the relevance, comparability, and transparency of financial information provided to investors by requiring all entities to report noncontrolling (minority) interests in subsidiaries in the same way as equity in the consolidated financial statements. In addition, SFAS No. 160 eliminates the diversity that currently exists in accounting for transactions between an entity and noncontrolling interests by requiring they be treated as equity transactions. SFAS No. 160 is effective for fiscal years beginning after December 15, 2008. The Company is currently evaluating the impact of SFAS No. 160 on its financial position and results of operations.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities”, which improves financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance and cash flows. SFAS No. 161 is effective for fiscal years and interim periods beginning after November 15, 2008. The Company is currently evaluating the impact of SFAS No. 161 on its financial position, results of operations and cash flows.

In April 2008, the FASB issued Staff Position FSP FAS 142-3, “Determination of the Useful Life of Intangible Assets” (“FSP FAS 142-3”). The FSP amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, “Goodwill and Other Intangible Assets”. The intent of the FSP is to improve the consistency between the useful life of a recognized intangible asset under SFAS No. 142 and the period of expected cash flows used to measure the fair value of the asset under other accounting principles generally accepted in the United States of America. The FSP is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early adoption is prohibited. We are currently evaluating the potential impact of the adoption of FSP FAS 142-3 on our financial statements.

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles. This Statement identifies the sources for generally accepted accounting principles (GAAP) in the U.S. and lists the categories in descending order. An entity should follow the highest category of GAAP applicable for each of its accounting transactions. The adoption will not have a material effect on the Company’s consolidated financial statements.

In May 2008, the FASB issued FASB Staff Position (“FSP”) No. APB 14-1 “Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlements)” (previously FSP

11

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollars in thousands, except share and per share data)

(UNAUDITED)

APB 14-a), which will change the accounting treatment for convertible securities which the issuer may settle fully or partially in cash. Under the final FSP, cash settled convertible securities will be separated into their debt and equity components. The value assigned to the debt component will be the estimated fair value, as of the issuance date, of a similar debt instrument without the conversion feature, and the difference between the proceeds for the convertible debt and the amount reflected as a debt liability will be recorded as additional paid-in capital. As a result, the debt will be recorded at a discount reflecting its below market coupon interest rate. The debt will subsequently be accreted to its par value over its expected life, with the rate of interest that reflects the market rate at issuance being reflected on the income statement. This change in methodology will affect the calculations of net income and earnings per share for many issuers of cash settled convertible securities. The FSP is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of FSP No. APB 14-1 on the Company’s consolidated financial statements.

In June 2008, the FASB issued FSP EITF 03-6-1 “Determining whether Instruments granted in Share-based Payment Transactions are Participating Securities". This FSP addresses whether instruments granted in share-based transactions are participating securities prior to vesting and, therefore, need to be included in the earnings allocations in calculating earnings per share under the two-class method described in FASB Statement No. 128 “Earnings per Share”. The FSP requires companies to treat unvested share-based payment awards that have non-forfeitable rights to dividend or dividend equivalents as a separate class of securities in calculating earnings per share. The FSP is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of this FSP on the Company’s consolidated financial statements.

5. INVENTORIES

Inventories consisted of the following:

	July 31, 2008		January 31, 2008
Raw materials	$	17,910	$	22,041
Work-in-process		19,012		22,215
Finished goods		34,280		41,576
Total	$	71,202	$	85,832

6. INCOME TAXES

	Six months ended July 31,
	2008			2007
Provision (benefit) for income taxes continuing operations	$	295		$	(905	)
Effective income tax rate		17.6	%		(6.4	)%
Provision for income taxes discontinued operations	$	—		$	3,565
Effective income tax rate		—			(55.7	)%

Effective tax rates from continuing operations were 17.6% and (6.4)% for the six months ended July 31, 2008 and 2007, respectively. Tax expense for the six months ended July 31, 2008 is due to tax expense in certain

12

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollars in thousands, except share and per share data)

(UNAUDITED)

profitable foreign subsidiaries and no tax benefit recognized in certain jurisdictions where the Company incurred a loss, net of the release of the valuation allowance against certain domestic deferred tax assets as a result of pre-tax domestic book income in the current period.

7. NET INCOME PER COMMON SHARE

Basic earnings per common share was computed using net income and the weighted average number of common shares outstanding during the period. Diluted earnings per common share was computed using net income and the weighted average number of common shares outstanding plus potentially dilutive common shares outstanding during the period. Potentially dilutive common shares include the assumed exercise of stock options and assumed vesting of restricted stock awards using the treasury stock method, as well as the assumed conversion of debt using the if-converted method.

The following table sets forth the computation of basic and diluted earnings per common share from continuing operations.

	Three months ended July 31,					Six months ended July 31,
	2008		2007			2008		2007
Numerator:
Numerator for basic earnings per common share	$	1,202	$	1,656		$	1,779	$	11,010
Effect of dilutive securities:
Income related to deferred compensation plan		—		(39	)		—		(48	)
Interest expense on Convertible Notes		—		—			—		3,515
Numerator for diluted earnings per common share	$	1,202	$	1,617		$	1,779	$	14,477
Denominator:
Denominator for basic earnings per common share-weighted average common share		25,694,097		25,661,127			25,680,439		25,655,962
Effect of dilutive securities:
Convertible Notes		—		—			—		20,120,932
Employee stock awards		60,901		15,911			51,813		19,584
Shares issuable under deferred compensation arrangements		—		75,195			—		68,794
Employees stock options		93,507		—			46,756		—
Dilutive potential common shares		154,408		91,106			98,569		20,209,370
Denominator for diluted earnings per common share-adjusted weighted average common shares and assumed conversions		25,848,505		25,752,233			25,779,008		45,865,272
Basic earnings per common share	$	0.05	$	0.06		$	0.07	$	0.43
Diluted earnings from common share	$	0.05	$	0.06		$	0.07	$	0.32

The Company has excluded dilutive securities of 20,120,932 issuable in connection with convertible bonds from the diluted income per share calculation for the three and six months ended July 31, 2008, and the three months ended July 31, 2007 because their effect would be anti-dilutive. The Company has excluded 92,733 and 88,892 shares under deferred compensation arrangements, respectively for the three and six months ended July 31, 2008 because their effect would be anti-dilutive. During the three and six months ended July 31, 2008 and 2007, there were 1,170,314 and 2,347,997, respectively, of outstanding employee stock options that were out-of-the-money and therefore excluded from the calculation of the dilutive effect of employee stock options.

In accordance with SFAS No. 128 “Earnings per Share” for the computation of diluted earnings per share for the three and six months ended July 31, 2007, the (losses) per share for discontinued operations was included regardless of its effect, because the income from continuing operation was dilutive.

13

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollars in thousands, except share and per share data)

(UNAUDITED)

8. CONTINGENT LIABILITIES

Legal

In January 1999, the Company received notification from the U.S. Environmental Protection Agency (“EPA”) of alleged violations of permit effluent and pretreatment discharge limits at its plant in Attica, Indiana. The Company submitted a compliance plan to the EPA in April 2002. The Company engaged in negotiations with both the EPA and U.S. Department of Justice (“DOJ”) through March 2003 regarding a potential resolution of this matter. The government filed suit against the Company in March 2003 in the United States District Court for the Southern District of Indiana for alleged violations of the Clean Water Act. The parties have reached a settlement, and agreed to the terms of a Consent Decree, with an agreed civil penalty of $1,600. The Court entered the Consent Decree on November 20, 2006. In addition to payment of the civil penalty, the Consent Decree requires the Company to implement a Compliance Work Plan for completing implementation of certain compliance measures set forth in the Consent Decree. These compliance measures are required to be implemented by the Company in accordance with a schedule approved by the EPA. The Compliance Work Plan and schedule are fully enforceable parts of the Consent Decree. The Consent Decree also requires certain pretreatment compliance measures, including the continued operation of a wastewater pretreatment system, which was previously installed at the Attica facility. The Consent Decree further requires certain National Pollution Discharge Elimination System (NPDES) compliance measures, including testing, sampling and reporting requirements relating to a NPDES storm water monitoring system at the facility. Additionally, the Consent Decree provides for stipulated penalties for noncompliance with the requirements of the Consent Decree. The Company does not expect that the Consent Decree will have a material adverse effect on its business, financial condition or results of operations.

Environmental

The Company is subject to extensive and evolving environmental laws and regulations regarding the clean-up and protection of the environment, worker health and safety and the protection of third parties. These laws and regulations include, but are not limited to (i) requirements relating to the handling, storage, use and disposal of lead and other hazardous materials in manufacturing processes and solid wastes; (ii) record keeping and periodic reporting to governmental entities regarding the use and disposal of hazardous materials; (iii) monitoring and permitting of air emissions and water discharge; and (iv) monitoring worker exposure to hazardous substances in the workplace and protecting workers from impermissible exposure to hazardous substances, including lead, used in our manufacturing process.

Notwithstanding the Company’s efforts to maintain compliance with applicable environmental requirements, if injury or damage to persons or the environment arises from hazardous substances used, generated or disposed of in the conduct of the Company’s business (or that of a predecessor to the extent the Company is not indemnified therefor), the Company may be held liable for certain damages, the costs of investigation and remediation, and fines and penalties, which could have a material adverse effect on the Company’s business, financial condition, or results of operations. However, under the terms of the purchase agreement with Allied Corporation (“Allied”) for the acquisition (the “Acquisition”) of the Company (the “Acquisition Agreement”), Allied was obligated to indemnify the Company for any liabilities of this type resulting from conditions existing at January 28, 1986, that were not disclosed by Allied to the Company in the schedules to the Acquisition Agreement. These obligations have since been assumed by Allied’s successor in interest, Honeywell (“Honeywell”).

C&D is participating in the investigation of contamination at several lead smelting facilities (“Third Party Facilities”) to which C&D allegedly made scrap lead shipments for reclamation prior to the date of the acquisition.

Pursuant to a 1996 Site Participation Agreement, as later amended in 2000, the Company and several other potentially responsible parties (“PRP”s) agreed upon a cost sharing allocation for performance of remedial activities required by the United States EPA Administrative Order Consent Decree entered for the design and remediation phases at the former NL Industries, Inc. (“NL”) site in Pedricktown, New Jersey, Third Party Facility. In April 2002, one of the original PRPs, Exide Technologies (Exide), filed for relief under Chapter 11 of Title 11 of the United States Code. In August 2002, Exide notified the PRPs that it would no longer be taking an active role in any further action at the site and discontinued its financial participation, resulting in a pro rata increase in the cost participation of the other PRPs, including the Company, for which the Company’s allocated share rose from 5.25% to 7.79%.

In August 2002, the Company was notified of its involvement as a PRP at the NL Atlanta, Northside Drive Superfund site. NL and Norfolk Southern Railway Company have been conducting a removal action on the site, preliminary to remediation. The Company, along with other PRPs, continues to negotiate with NL at this site regarding the Company’s share of the allocated liability.

14

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollars in thousands, except share and per share data)

(UNAUDITED)

The Company has terminated operations at its Huguenot, New York, facility, and has completed facility decontamination and disposal of chemicals and hazardous wastes remaining at the facility following termination of operations in accordance with applicable regulatory requirements. The Company is also aware of the existence of soil and groundwater contamination at the Huguenot, New York, facility, which is expected to require expenditures for further investigation and remediation. The site is listed by the New York State Department of Environmental Conservation (“NYSDEC”) on its registry of inactive hazardous waste disposal sites due to the presence of fluoride and other contaminants in and underlying a lagoon used by the former owner of this site, Avnet, Inc., for disposal of wastewater. Contamination is present at concentrations that exceed state groundwater standards. In 2002, the NYSDEC issued a Record of Decision (“ROD”) for the soil remediation portion of the site. A ROD for the ground water portion has not yet been issued by the NYSDEC. In 2005, the NYSDEC also requested that the parties engage in a Feasibility Study, which the parties are conducting in accordance with a NYSDEC approved work plan. In February 2000, the Company filed suit against Avnet, Inc., and in December 2006, the parties executed a settlement agreement which provides for a cost sharing arrangement with Avnet bearing a majority of the future costs associated with the investigation and remediation of the lagoon-related contamination.

C&D, together with Johnson Controls, Inc. (“JCI”), is conducting an assessment and remediation of contamination at and near its facility in Milwaukee, Wisconsin. The majority of the on-site soil remediation portion of this project was completed as of October 2001. Under the purchase agreement with JCI, C&D is responsible for (i) one-half of the cost of the on-site assessment and remediation, with a maximum liability of $1,750 (ii) any environmental liabilities at the facility that are not remediated as part of the ongoing cleanup project and (iii) environmental liabilities for any new claims made after the fifth anniversary of the closing, i.e. March 2004, that arise from migration from a pre-closing condition at the Milwaukee facility to locations other than the Milwaukee facility, but specifically excluding liabilities relating to pre-closing offsite disposal. JCI retained the environmental liability for the off-site assessment and remediation of lead. In March 2004, the Company entered into an agreement with JCI to continue to share responsibility as set forth in the original purchase agreement. The Company continues to negotiate with JCI regarding the allocation of costs for assessment and remediation of certain off-site chlorinated volatile organic compounds (“CVOC”s) in groundwater.

In February 2005, the Company received a request from the EPA to conduct exploratory testing to determine if the historical municipal landfill located on the Company’s Attica, Indiana, property is the source of elevated levels of trichloroethylene detected in two city wells downgradient of the Company’s property. The EPA advised that it believes the former landfill is subject to remediation under the RCRA corrective action program. The Company conducted testing in accordance with an investigation work plan and submitted the test results to the EPA. The EPA thereafter notified the Company that they also wanted the Company to embark upon a more comprehensive RCRA investigation to determine whether there have been any releases of other hazardous waste constituents from its Attica facility and, if so, to determine what corrective measure may be appropriate. In January 2007, the Company agreed to an Administrative Order on Consent with EPA to investigate, and remediate if necessary, site conditions at the facility. Site investigation work has been conducted and the results of this investigation indicate limited soils and groundwater contamination at the site.

The Company has conducted site investigations at its Conyers, Georgia facility, and has detected chlorinated solvents in groundwater and lead in soil both onsite and offsite. The Company has initiated remediation of the chlorinated solvents in accordance with a Corrective Action Plan, which was approved by the Georgia Department of Natural Resources in January 2007. The Georgia Department of Natural Resources has recently requested additional assessment of groundwater conditions be completed before implementation of any final remedy. Additionally, the Company is conducting remediation of lead impacted soils identified in the site investigations. In September 2005, an adjoining landowner filed suit against the Company alleging, among other things, that it was allowing lead contaminated stormwater runoff to leave its property and contaminate the adjoining property. The parties entered into an agreement to settle the litigation in March 2007 with the Company agreeing to purchase a parcel of land between its property and plaintiff’s property and to use the transferred parcel to construct a bioremediation area to prevent potential future lead contamination to plaintiff’s property. In July 2007, the plaintiff provided notice that it was withdrawing from the settlement agreement alleging additional unknown contamination

15

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollars in thousands, except share and per share data)

(UNAUDITED)

had been discovered. The parties thereafter entered into a second settlement agreement with the Company agreeing to fully assess and remediate, if necessary, any contamination of the plaintiff’s property caused by the Company.

The Company accrues reserves for liabilities in its consolidated financial statements and periodically reevaluates the reserved amounts for these liabilities in view of the most current information available in accordance with SFAS No. 5, “Accounting for Contingencies.” As of July 31, 2008 and January 31, 2008, accrued environmental reserves totaled $1,658 and $1,496, respectively, consisting of $958 and $796 in other current liabilities and $700 and $700 in other liabilities. Based on currently available information, the Company believes that appropriate reserves have been established with respect to the foregoing contingent liabilities and that they are not expected to have a material adverse effect on its business, financial condition or results of operations.

9. DERIVATIVE INSTRUMENTS

The Company is exposed to various market risks. The primary financial risks include fluctuations in certain commodity prices and changes in currency exchange rates. The Company manages these risks through normal operating and financing activities and when appropriate through the use of derivative instruments.

The Company does not invest in derivative instruments for speculative purposes, but does enter into hedging arrangements in order to reduce its exposure to fluctuations in the price of lead as well as to fluctuations in exchange rates. The Company applies hedge accounting in accordance with SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” whereby the Company designates each derivative as a hedge of (i) the fair value of a recognized asset or liability or of an unrecognized firm commitment (fair value hedge); or (ii) the variability of anticipated cash flows of a forecasted transaction or the cash flows to be received or paid related to a recognized asset or liability (cash flow hedge). From time to time, however, the Company may enter into derivatives that economically hedge certain of its risks, even though hedge accounting is not allowed by SFAS No. 133 or is not applied by the Company. In these cases, there generally exists a natural hedging relationship in which changes in fair value of the derivative, that are recognized currently in earnings, act as an economic offset to changes in the fair value of the underlying hedged item(s).

The following table provides the fair value of the Company's derivative contracts which include commodity hedges.

	July 31, 2008						January 31, 2008
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
Commodity hedges	$	(834	)	$	(834	)	$	(1,503	)	$	(1,503	)

The commodity hedges are designated as cash flow hedges. Therefore, changes in their fair value, net of tax, are recorded in accumulated other comprehensive income and released to earnings in the period the hedged item is recognized.

16

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollars in thousands, except share and per share data)

(UNAUDITED)

10. WARRANTY

The Company provides for estimated product warranty expenses when the related products are sold. Because warranty estimates are forecasts that are based on the best available information, primarily historical claims experience, claims costs may differ from amounts provided. An analysis of changes in the liability for product warranties follows:

	Six months ended July 31,
	2008			2007
Balance at beginning of period	$	11,276		$	7,760
Expense provision		2,074			5,090
Expenditures		(4,911	)		(3,163	)
Effect of foreign currency translation		7			1
Balance at end of period	$	8,446		$	9,688

As of July 31, 2008, accrued warranty obligations of $8,446 include $3,030 in current liabilities and $5,416 in other liabilities. As of January 31, 2008, accrued warranty obligations of $11,276 include $4,072 in current liabilities and $7,204 in other liabilities.

Certain warranty costs associated with the discontinued operations were not assumed by the buyer and are included in the table above. The expense provision includes $0 and $3,784 related to discontinued operations in the six months ended July 31, 2008 and 2007, respectively. Expenditures include $3,063 and $2,347 related to discontinued operations in the six months ended July 31, 2008 and 2007, respectively.

11. PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS

Effective in fiscal year 2009, the Company changed the measurement date for its employee benefit plans from December 31 to January 31 in accordance with the measurement date provisions of SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans – an amendment to FASB Statements No. 87, 88, 106 and 132(R).” The Company has elected to use the “13-month” approach to proportionally allocate the transition adjustment required under SFAS No. 158. The Company anticipates there will be a charge recorded to retained earning of approximately $100 in the fourth quarter.

The components of net periodic benefit cost consisted of the following for the interim periods.

	Pension Benefits						Postretirement Benefits
	Three months ended July 31,						Three months ended July 31,
	2008			2007			2008			2007
Components of net periodic benefit cost:
Service cost	$	284		$	325		$	13		$	23
Interest cost		1,154			1,045			30			57
Expected return on plan assets		(1,241	)		(1,217	)		—			—
Amortization of prior service costs		—			1			(201	)		(6	)
Recognized actuarial loss/(gain)		300			411			(1	)		(1	)
Curtailment		—			22			—			—
Special termination benefit		—			173			—			—
Net periodic benefit cost	$	497		$	760		$	(159	)	$	73

17

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollars in thousands, except share and per share data)

(UNAUDITED)

	Pension Benefits						Postretirement Benefits
	Six months ended July 31,						Six months ended July 31,
	2008			2007			2008			2007
Components of net periodic benefit cost:
Service cost	$	545		$	765		$	31		$	61
Interest cost		2,237			2,140			59			122
Expected return on plan assets		(2,501	)		(2,436	)		—			—
Amortization of prior service costs		—			4			(402	)		(11	)
Recognized actuarial loss/(gain)		589			850			(2	)		(2	)
Curtailment		—			22			—			—
Special termination benefit		—			173			—			—
Net periodic benefit cost	$	870		$	1,518		$	(314	)	$	170

The Company made $300 of contributions to the plans in the six months ended July 31, 2008. The Company expects to make contributions of approximately $1,200 to its plans during fiscal year 2009. The Company also expects to make contributions totaling approximately $125 to the Company sponsored postretirement benefit plan during fiscal year 2009.

12. RESTRUCTURING

During fiscal year 2007, the Company implemented organizational and operational changes to streamline and rationalize its structure in an effort to simplify the organization and eliminate redundant costs.

On April 16, 2007 the Company announced its decision to close its Standby Power Division manufacturing facility in Conyers, Georgia and the transfer of its production to Leola, Pennsylvania. As a result of this action, the Company recorded severance charges of $557 in its financial statements for fiscal year 2008. These charges were included in the cost of sales on the consolidated statement of operations. In addition, the Company incurred approximately $200 of special pension termination benefits and approximately $2,200 of other costs relating to the closure of Conyers.

On October 24, 2007, the Company announced the sale of certain assets of its Motive Power Division. As a result of this decision, the Company recorded severance accruals for the year of $723 in its consolidated statement of operations. These charges relate to workforce reductions of approximately 168 employees.

As a result of the divestitures of the Power Electronics Division and Motive Power Division, the Company took additional actions to reduce selling, general and administrative expenses. The Company recorded severance accruals in the third quarter of fiscal year 2008 of $524 in its consolidated statement of operations. These charges relate to workforce reductions of approximately 30 employees.

A reconciliation of the beginning and ending severance liability and related activity is shown below.

	Balance at January 31, 2008		Provision Additions		Expenditures		Balance at July 31, 2008
Severance	$	694	$	—	$	590	$	104

18

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollars in thousands, except share and per share data)

(UNAUDITED)

13. FAIR VALUE MEASUREMENT

Adoption of SFAS No. 157 on February 1, 2008 was limited to financial assets and liabilities, which primarily relates to our derivative contracts and investments related to the deferred compensation plan. We utilize the market approach to measure fair value for our financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. SFAS 157 includes a fair value hierarchy that is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon their own market assumptions. The fair value hierarchy consists of the following three levels:

Level 1	Inputs are quoted prices in active markets for identical assets or liabilities.
Level 2	Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data.
Level 3	Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable.

The following table represents our assets and liabilities measured at fair value on a recurring basis as of July 31, 2008 and the basis for that measurement:

	Total Fair Value Measurement July 31, 2008			Quoted Priced in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Commodity hedges	$	(834	)	$	—	$	(834	)	$	—
Investments held for deferred compensation plan		431			431

The fair value of commodity hedges were calculated using observable prices for lead as quoted on the London Metal Exchange (“LME”) and, therefore, were classified as Level 2.

14. SUBSEQUENT EVENT

On August 29, 2008 the Company executed an amendment to the Company’s credit facility which, amongst other changes, enhanced the Company’s borrowing capacity and resultant credit availability as of that date by approximately $7,000 through changes and modifications of borrowing base provisions. In addition the amendment provides the Company the ability to incur indebtedness under leasing arrangements of up to $15,000, an increase in permitted borrowings in China from 40,000 RMB (approximately $5,750 US Dollars) to 160,000 RMB (approximately $23,000 US Dollars) and an increase in permitted asset sales baskets. The Company incurred fees of $225 in connection with this amendment, which will be expensed in the third quarter of fiscal year 2009.

19

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

(Dollars in thousands, except per share data)

Item 2.

Three Months Ended July 31, 2008, compared to Three Months Ended July 31, 2007

Continuing operations

Within the following discussion, unless otherwise stated, “quarter” and “three-month” period” refer to the second quarter of fiscal year 2009. All comparisons are with the corresponding period in the prior fiscal year, unless otherwise stated.

Net sales in the second quarter of fiscal year 2009 increased $9,631 or 11.6% to $92,485 from $82,854 in the second quarter of fiscal year 2008. This increase resulted primarily due to increased pricing. Unit volumes were down in the cable television market following an infrastructure build out in fiscal year 2008 but higher in the Company’s other market segments.

Gross profit in the second quarter of fiscal year 2009 increased $3,270 or 26.4% to $15,644 from $12,374 in the second quarter of fiscal year 2008. Margins increased from 14.9% to 16.9% in the second quarter of fiscal year 2009. Margins increased from 15% in the first quarter of fiscal year 2009. This increase is due to price increases and benefits from the Company’s cost reduction programs. Average London Metal Exchange (“LME”) prices decreased from an average of $1.15 per pound in the second quarter of fiscal year 2008 to $0.91 per pound in the second quarter of fiscal year 2009. Lead traded as high as $1.20 per pound on May 20, 2008. Second quarter fiscal year 2008 results also included severance and other costs associated with the closure of the Division’s Conyers, Georgia facility of $924.

Selling, general and administrative expenses in the second quarter of fiscal year 2009 increased $1,640 or 18.8% to $10,365 from $8,725 in the prior fiscal year’s quarter. The increase is primarily due to increased warranty costs of approximately $600, higher commissions of approximately $300 driven by the increase in sales, incentive compensation costs of approximately $300 and higher selling costs associated with new product introductions. As a percentage of sales, selling, general and administrative expenses were 11.2% and 10.5% in the second quarter of fiscal 2009 and 2008, respectively.

Research and development expenses in the second quarter of fiscal year 2009 increased $10 or 0.6% to $1,703 from $1,693. As a percentage of sales, research and development expenses decreased from 2.0% in the second quarter of fiscal year 2008 to 1.8% in the second quarter of fiscal year 2009.

Operating income from continuing operations in the second quarter of fiscal year 2009 increased $1,620 or 82.8% to $3,576 from $1,956 in the second quarter of fiscal year 2008.

20

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS (continued)

(Dollars in thousands, except per share data)

Analysis of Change in Operating Income from continuing operations

Second Quarter of Fiscal Year 2009 vs. Second Quarter of Fiscal Year 2008

Fiscal Year 2009 vs. 2008
Operating income Three months ended July 31, 2007	$	1,956
Increases in lead costs		(7,284	)
Increases in price / volume / mix		9,045
Decreased costs related to Conyers closure		924
Increased warranty costs		(562	)
Increase in selling, general and administrative costs		(1,078	)
Other net, including cost reduction programs		575
Operating income Three months ended July 31, 2008	$	3,576

Interest expense, net in the second quarter of fiscal year 2009 increased $152 or 7.1% to $2,285 from $2,133 in the second quarter of fiscal year 2008, primarily due to higher debt as the result of financing costs associated with the new plant in Shanghai, China.

Other expense was $75 in the second quarter of fiscal year 2009 compared to other income of $308 in the second quarter of fiscal year 2008. The difference was primarily due to lower foreign exchange gains principally related to movements in the Canadian dollar in the second quarter of fiscal year 2009 compared to the second quarter of fiscal year 2008. This decrease was offset by increased royalty income in fiscal 2009.

Income tax expense from continuing operations of $161 was recorded in the second quarter of fiscal year 2009, compared to an income tax benefit of $999 in the second quarter of fiscal year 2008. Tax expense in the second quarter of fiscal year 2009, is primarily due to foreign taxes on profits which were not offset by losses for which no tax benefit is recognized under SFAS No. 109. The income tax benefit in the second quarter of fiscal year 2008 was primarily impacted by tax allocations related to the Company’s PED and Motive operations and their reclassification as discontinued operations.

Minority interest reflects the 33% ownership interest in the joint venture battery business located in Shanghai, China, that is not owned by the Company. In the second quarter of fiscal year 2009, the joint venture partners share of losses from operations was $147 compared to $526 in the second quarter of fiscal year 2008, reflecting improved performance of the Company’s China operations.

As a result of the above, net income from continuing operations of $1,202 was recorded in the second quarter of fiscal year 2009 as compared to $1,656 in the second quarter of fiscal year 2008.

Other Comprehensive Income (Loss)

Other comprehensive income increased by $4,971 in the second quarter of fiscal year 2009 to $1,410 from a loss of $3,561 in the second quarter of fiscal year 2008. This increase in income was primarily due to the prior period impact of the net loss from discontinued operations of $4,738 in the second quarter of fiscal year 2008, a decrease in the unrealized loss on derivative instruments to $470 in the second quarter of fiscal year 2009 compared to $1,563 in the second quarter of fiscal year 2008, partially offset by a decrease in the pension liability adjustment from $411 in the second quarter of fiscal year 2008 compared to $88 in the second quarter of fiscal year 2009.

21

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS (continued)

(Dollars in thousands, except per share data)

Six Months Ended July 31, 2008, compared to Six months Ended July 31, 2007

Continuing operations

Net sales for the six months ended July 31, 2008 increased $25,928 or 16.2% to $186,261 from $160,333 in the six months ended July 31, 2007. This increase resulted primarily due to increased pricing. Unit volumes were down in the cable television market following an infrastructure build out in fiscal year 2008 but higher in the Company’s other market segments.

Gross profit for the six months ended July 31, 2008 increased $6,539 or 28.7% to $29,336 from $22,797 in the six months ended July 31, 2007. Margins increased to 15.7% from 14.2% in prior year. This is primarily due to price increases and benefits from the Company’s cost reduction programs, the elimination of one time costs including severance and other costs related to the closure of the Company’s Conyers, Georgia facility of $1,142, partially offset by higher raw material costs, principally lead. Average London Metal Exchange (“LME”) prices increased from an average of $1.01 per pound in the six months ended July 31, 2007 to $1.13 per pound in the six months ended July 31, 2008.

Selling, general and administrative expenses for the six months ended July 31, 2008, increased $2,763 or 16.0% to $20,020 from $17,257. The increase is primarily due to warranty costs of approximately $800, higher commissions of approximately $350 driven by the increase in sales, incentive compensation costs of approximately $1,000 and higher selling costs associated with new product introductions. As a percentage of sales, selling, general and administrative expenses were 10.7% and 10.8% in the six months ended July 31, 2008 and 2007, respectively.

Research and development expenses for the six months ended July 31, 2008 increased $170 or 5.3% to $3,394 from $3,224 in the six months ended July 31, 2007. As a percentage of sales, research and development expenses decreased from 2.0% in the six months ended July 31, 2007 to 1.8% in the six months ended July 31, 2008.

During the six months ended July 31, 2007, the Company recognized a gain of $15,162 from the sale of its old joint venture manufacturing facility in Shanghai, China.

Operating income from continuing operations for the six months ended July 31, 2008 was $5,922 compared to $17,478 in the six months ended July 31, 2007. The reduction is due to the exclusion of a one time gain on the sale of the Shanghai, China plant of $15,162 that occurred in fiscal year 2008 partially offset by the increased gross profit.

22

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS (continued)

(Dollars in thousands, except per share data)

Analysis of Change in Operating Income from continuing operations

Six months ended July 31, 2008 vs. Six months ended July 31, 2007

Fiscal Year 2009 vs. 2008
Operating income Six months ended July 31, 2007	$	17,478
Increases in lead costs		(21,305	)
Increases in price / volume / mix		23,251
Gain on sale of Shanghai, China plant		(15,162	)
Decreased costs related to Conyers closure		1,142
Increased warranty costs		(768	)
Increase in selling, general and administrative costs		(1,995	)
Other net, including cost reduction programs		3,281
Operating income Six months ended July 31, 2008	$	5,922

Interest expense, net for the six months ended July 31, 2008, increased $241 or 5.6% to $4,551 from $4,310 in the six months ended July 31, 2007, primarily due to higher debt as the result of financing costs associated with the new plant in Shanghai, China.

Other income was $298 for the six months ended July 31, 2008, compared to $939 in the six months ended July 31, 2007. The difference was primarily due to lower foreign exchange gains, principally related to movements in the Canadian dollar, of $353 in the six months ended July 31, 2008 compared to $1,269 of foreign exchange gains in the six months ended July 31, 2007 partially offset by royalty income in fiscal year 2009.

Income tax expense from continuing operations of $295 was recorded in the six months ended July 31, 2008, compared to an income tax benefit of $905 in the six months ended July 31, 2007. Tax expense in the six months ended July 31, 2008 is primarily due to foreign taxes on profits which were not offset by losses for which no tax benefit is recognized under SFAS No. 109. The income tax benefit in the second quarter of fiscal year 2008 was primarily impacted by tax allocations related to the Company’s PED and Motive operations and their reclassification as discontinued operations.

Minority interest reflects the 33% ownership interest in the joint venture battery business located in Shanghai, China, that is not owned by the Company. In the six months ended July 31, 2008, the joint venture had a decrease in minority interest of $405 compared to an increase of $4,002 in the six months ended July 31, 2007. Included in minority interest in the six months ended July 31, 2007 is a gain of $5,003, which was the result of the $15,162 gain recognized on the sale of our old manufacturing plant in Shanghai, China. The remaining variance is reflected by improved performance of the Company’s China operations.

As a result of the above, net income from continuing operations of $1,779 was recorded compared to $11,010 in the prior year.

Other Comprehensive Income

The Company recorded other comprehensive income of $5,034 for the six months ended July 31, 2008 as compared to $577 in the six months ended July 31, 2007. This increase was primarily due to net income of $1,779 in the six months ended July 31, 2008 as compared to $1,048 in the comparable period at the previous fiscal year. This increase in income was primarily due to the prior year impact of the net loss from discontinued operations of $9,962 in the six months ended July 31, 2007 partially offset by the gain on the sale of the plant in Shanghai, China of $15,162 and an unrealized gain on derivative instruments of $1,797 compared to a loss $2,297 in the six months ended July 31, 2007.

23

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS (continued)

(Dollars in thousands, except per share data)

Liquidity and Capital Resources

Net cash provided by operating activities from continuing operations was $3,206 for the six months ended July 31, 2008, compared to a use of cash of $12,973 in the comparable period of the prior fiscal year. The improvement is a result of i) a reduction in inventory due to decreased lead prices and inventory management, ii) an increase in cash provided by accounts receivable due primarily to improved days sales outstanding partially offset by increased sales, iii) a decrease in cash used to fund discontinued operations and iv) improved income from continuing operations compared to the prior year. These improvements were offset by a decrease in accounts payable associated with the decrease in inventory and changes in payment terms and timing.

Net cash used by continuing investing activities increased $3,232 or 147.2% to $5,427 in the six months ended July 31, 2008 from $2,195 in the six months ended July 31, 2007. Acquisitions of property, plant and equipment was $8,548 during the first six months of fiscal 2009 as compared to $4,088 during the first six months of fiscal year 2008. The increase in capital spending in the first six months of fiscal 2009 is principally in support of our cost reduction initiatives. During the first six months of fiscal year 2008, we had proceeds from the disposal of property, plant and equipment in the amount of $1,893 related to the last installment on the sale of our old battery plant in Shanghai, China. Additionally, restricted cash associated with our lead hedges decreased by $2,638 during the first six months of fiscal 2009.

Net cash provided by continuing operations financing activities decreased $14,562 to $141 for the six months ended July 31, 2008, compared to $14,703 in the comparable period of the prior fiscal year. The Company had no outstanding borrowings on its revolving credit facility at July 31, 2008. During the six months ended July 31, 2007 we borrowed $14,107 on our credit facility primarily to fund operations.

Cash from operations and availability under the amended Credit Facility is expected to be sufficient to meet our ongoing cash needs for working capital requirements, restructuring, capital expenditures and debt service for at least the next twelve months. Capital expenditures during the first six months of fiscal year 2009 were primarily in support of new product introductions and our cost reduction initiatives. We estimate capital spending for fiscal year 2009 to be in the range of $17,000 to $20,000. As of July 31, 2008, the maximum availability calculated under the borrowing base was approximately $48,700, of which $0 was funded, and $12,317 was utilized for letters of credit. As provided under the Credit Facility, excess borrowing capacity will be available for future working capital needs and general corporate purposes.

On August 29, 2008 the Company executed an amendment to the Company’s credit facility which, amongst other changes, enhanced the Company’s borrowing capacity and resultant credit availability as of that date by approximately $7,000 through changes and modifications of borrowing base provisions. In addition the amendment provides the Company the ability to incur indebtedness under leasing arrangements of up to $15,000, an increase in permitted borrowings in China from 40,000 RMB (approximately $5,750 US Dollars) to 160,000 RMB (approximately $23,000 US Dollars) and an increase in permitted asset sales baskets. The Company incurred fees of $225 in connection with this amendment, which will be expensed in the third quarter of fiscal year 2009.

24

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS (continued)

(Dollars in thousands, except per share data)

Contractual Obligations and Commercial Commitments

The following tables summarize our contractual obligations and commercial commitments as of July 31, 2008:

	Payments Due by Period
Contractual Obligations	Total		Less than 1 year		1 - 3 years		4 - 5 years		After 5 years
Debt	$	135,356	$	5,856	$	—	$	—	$	129,500
Interest payable on notes		124,360		6,935		13,870		13,870		89,685
Operating leases		8,462		1,944		3,231		952		2,335
Projected – lead purchases*		241,000		88,000		97,000		56,000		—
Equipment		3,170		3,170		0		—		—
Total contractual cash obligations	$	512,348	$	105,905	$	114,101	$	70,822	$	221,520
*  Amounts are based on the cash price of lead at July 31, 2008 which was $1.01. Prices are significantly lower as of the end of August.
	Amount of Commitment Expiration per Period
Other Commercial Commitments	Total Amount Committed		Less than 1 year		1 - 3 years		4 - 5 years		After 5 years
Standby letters of credit	$	12,317	$	11,357	$	960	$	—	$	—
Total commercial commitments	$	12,317	$	11,357	$	960	$	—	$	—

25

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS (continued)

(Dollars in thousands, except per share data)

FORWARD-LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements we make. We may, from time to time, make written or verbal forward-looking statements. Generally, the inclusion of the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “will,” “guidance,” “forecast,” “plan,” “outlook” and similar expressions in filings with the Securities and Exchange Commission (“SEC”), in our press releases and in oral statements made by our representatives, identify statements that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”) and are intended to come within the safe harbor protection provided by those sections. The forward-looking statements are based upon management’s current views and assumptions regarding future events and operating performance, and are applicable only as of the dates of such statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

By their nature, forward-looking statements involve risk and uncertainties that could cause our actual results to differ materially from anticipated results. Examples of forward-looking statements include, but are not limited to:

• 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;

• statements of plans, strategies and objectives made by our management or board of directors, including the introduction of new products, cost savings initiatives or estimates or predictions of actions by customers, suppliers, competitors or regulating authorities;

• statements of future economic performance; and

• statements regarding the ability to obtain amendments under our debt agreements.

We caution you not to place undue reliance on these forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, those factors discussed under Item 1A – Risk Factors, Item 7 – Management’s Discussion and Analysis of Financial Conditions and Results of Operations and Item 8 – Financial Statements and Supplementing Data of our Form 10-K for the fiscal year ended January 31, 2008, and the following general factors:

• our ability to implement and fund based on current liquidity, business strategies and restructuring plans;

• our substantial debt and debt service requirements, which may restrict our operational and financial flexibility, as well as impose significant interest and financing costs;

• restrictive loan covenants may impact our ability to operate our business and pursue business strategies;

• the litigation and regulatory proceedings to which we are subject, the results of which could have a material adverse effect on us and our business;

• our exposure to fluctuations in interest rates on our variable debt;

• the realization of the tax benefits of our net operating loss carry forwards, which is dependent upon future taxable income;

• the fact that lead, a major constituent in most of our products, experiences significant fluctuations in market price and is a hazardous material that may give rise to costly environmental and safety claims;

• our ability to successfully pass along increased material costs to our customers;

• unanticipated warranty and quality problems associated with our products;

• failure of our customers to renew supply agreements;

• competitiveness of the battery markets in North America and Europe;

• the substantial management time and financial and other resources needed for our consolidation and rationalization of acquired entities;

• political, economic and social changes, or acts of terrorism or war;

• successful collective bargaining with our unionized workforce;

26

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS (continued)

(Dollars in thousands, except per share data)

• risks involved in our foreign operations such as disruption of markets, changes in import and export laws, currency restrictions, currency exchange rate fluctuations and possible terrorist attacks against the United States interests;

• our ability to maintain and generate liquidity to meet our operating needs;

• we may have additional impairment charges;

• our ability to acquire goods and services and/or fulfill labor needs at budgeted costs;

• economic conditions or market changes in certain market sectors in which we conduct business;

• our success or timing of new product development;

• changes in our product mix;

• success of productivity initiatives, including rationalizations, relocations or consolidations;

• impact of changes in our management;

• costs of our compliance with environmental laws and regulations and resulting liabilities; and

• our ability to protect our proprietary intellectual property and technology;

The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in “Risk Factors” included in the Company’s Form 10-K annual report for the year ended January 31, 2008.

27

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS (continued)

(Dollars in thousands, except per share data)

Item 3. Quantitative and Qualitative Disclosure about Market Risk

The Company is exposed to various market risks. The primary financial risks include fluctuations in interest rates, certain raw material commodity prices, and changes in currency exchange rates. The Company manages these risks through normal operating and financing activities and when appropriate through the use of derivative instruments. It does not invest in derivative instruments for speculative purposes, but enters into hedging arrangements in order to reduce its exposure to fluctuations in interest rates, the price of lead, as well as to fluctuations in exchange rates.

On occasion, the Company has entered into non-deliverable forward contracts with certain financial counterparties to hedge our exposure to the fluctuations in the price of lead, the primary raw material component used by the Company. The Company employs hedge accounting in the treatment of these contracts. Changes in the value of the contracts are marked to market each month and the gains and losses are recorded in other comprehensive income (loss) until they are released to the income statement through cost of goods sold in the same period as is the hedged item (lead).

Additional disclosure regarding various market risks were set forth in the Company’s fiscal year 2008 Annual Report on Form 10-K filed with the SEC.

Item 4. Controls and Procedures:

Management, with the participation of its Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by it in the reports that it files or submits under the Exchange Act and include controls and procedures designed to ensure that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company's management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding timely disclosures.

Internal Control over Financial Reporting:

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

28

PART II.    OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities:

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
May 1 – May 31, 2008	—	$	—	—	1,000,000
June 1 – June 30, 2008	17,014	$	6.76	—	1,000,000
July 1 – July 31, 2008	—	$	—	—	1,000,000
Total	17,014			—

On September 30, 2004, the Board of Directors authorized a new stock repurchase program. Under the program, the Company is permitted to repurchase up to 1 million shares of C&D Technologies common stock having a total purchase price of no greater than $25 million. This program entirely replaces and supersedes all previously authorized stock repurchase programs. All of the shares purchased during the second quarter of fiscal year 2009 were purchased pursuant to the Company’s deferred compensation plan.

Restrictions on Dividends and Treasury Stock Purchases:

Our Credit Facility limits restricted payments including dividends and Treasury Stock purchases to no more than $250,000 for Treasury Stock in any one calendar year and $1,750,000 for dividends for any one calendar year subject to adjustments of up to $400,000 per year in the case of the conversion of debt to stock per the terms of our convertible offerings. These restricted payments can only occur with prior notice to the lenders and provided that there is a minimum of $30,000,000 in excess availability for a period of thirty days prior to the dividend. The Company may declare and pay a dividend provided these conditions are met and there does not exist an event of default.

Item 4. Submission of Matters to a Vote of Security Holders

At the annual meeting of stockholders of C&D on June 5, 2008, the stockholders voted on two proposals: The election of ten directors for one-year terms and a proposal to ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for C&D for the fiscal year ended January 31, 2009.

Proposal 1—Election of Directors

Nominee	Votes for	Votes withheld
William Harral, III	22,959,251	265,922
Pamela Lewis Davies	23,092,020	133,153
Kevin P. Dowd	22,960,463	264,710
Jeffrey A. Graves	22,927,972	297,201
Robert I. Harries	23,094,591	130,582
Michael H. Kalb	23,093,228	131,945
George MacKenzie	23,091,138	134,035
John A. H. Shober	22,960,303	264,870
Stanley W. Silverman	23,093,253	131,920
Ellen C. Wolf	23,087,763	137,410

29

Proposal 2 – Ratification of the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the fiscal year ending January 31, 2009.

For	Against	Abstain
23,207,372	10,088	7,713

30

Item 6. Exhibits.

		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	Date	Exhibit Number	Filed Herewith
10.1	Amendment No. 7 dated August 29, 2008 to Loan and Security Agreement dated as of December 7, 2005, as amended, by and among C&D Technologies, Inc., C&D Charter Holdings, Inc., and C&D International Investment Holdings Inc., the Guarantors identified on the signature pages thereto, and Wachovia Bank, National Association, a national banking association, in its capacity as Agent and Lender.	8-K	9/04/08	10.1
31.1	Certification of the President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				X
31.2	Certification of the Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				X
32.1	Certification of the President and Chief Executive Officer and Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				X

31

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	C&D TECHNOLOGIES, INC.
September 8, 2008	By:	/s/ Jeffrey A. Graves
		Jeffrey A. Graves      President, Chief Executive      Officer and Director
September 8, 2008	By:	/s/ Ian J. Harvie
		Ian J. Harvie      Vice President Finance      and Chief Financial Officer
September 8, 2008	By:	/s/ Neil E. Daniels
		Neil E. Daniels      Vice President and Corporate      Controller

32

EXHIBIT INDEX

31.1	Rule 13a-14(a)/15d-14(a) Certification of the President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Rule 13a-14(a)/15d-14(a) Certification of the Vice President and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of the President and Chief Executive Officer and Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

33

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Jeffrey A. Graves, certify that:

1. I have reviewed this quarterly report on Form 10-Q of C&D Technologies, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 8, 2008	/s/ Jeffrey A. Graves
	Jeffrey A. Graves President and Chief Executive Officer

A signed original of this written statement required by Section 302 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Ian J. Harvie, certify that:

1. I have reviewed this quarterly report on Form 10-Q of C&D Technologies, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 8, 2008	/s/ Ian J. Harvie
	Ian J. Harvie Vice President and Chief Financial Officer

A signed original of this written statement required by Section 302 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of C&D Technologies, Inc. (the “Company”) for the fiscal quarter ended July 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeffrey A. Graves, President and Chief Executive Officer of the Company, and I, Ian J. Harvie, Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Jeffrey A. Graves

Jeffrey A. Graves

President and Chief Executive Officer

/s/ Ian J. Harvie

Ian J. Harvie

Vice President and Chief Financial Officer

Dated: September 8, 2008

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed to be filed by the Company for purpose of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.