~~Table~~UNITED ofSTATES ~~Contents~~SECURITIES AND EXCHANGE COMMISSION

~~UNITED~~WASHINGTON, ~~STATES~~ D.C. 20549

~~SECURITIES AND EXCHANGE COMMISSION~~ FORM 10-Q

~~WASHINGTON,~~þ ~~D.C.~~QUARTERLY ~~20549~~REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~FORM~~For the Quarterly Period Ended October ~~10-Q~~31, 2011

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

~~For~~¨ ~~the~~TRANSITION ~~Quarterly~~REPORT ~~Period~~PURSUANT ~~Ended~~TO ~~July 31,~~SECTION ~~2011~~13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

orCommission file no: 1-9389

¨C&D ~~TRANSITION~~TECHNOLOGIES, ~~REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~INC.

Commission file no: 1-9389

Delaware		13-3314599
(State of incorporation)		(IRS employer identification no.)

~~C&D TECHNOLOGIES,~~1400 ~~INC.~~Union Meeting Road

Delaware		13-3314599
(State of incorporation)		(IRS employer identification no.)

Blue Bell, PA 19422

~~1400~~(Address ~~Union~~of ~~Meeting~~principal ~~Road~~executive offices)

~~Blue~~Telephone ~~Bell,~~Number: (215) ~~PA 19422~~ 619-2700

Indicate by check mark whether the registrant (~~Address~~1) has filed all reports required to be filed by Section 13 or 15(d) of ~~principal~~the ~~executive~~Securities ~~offices~~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 ¨

~~Telephone~~Indicate ~~Number:~~by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (~~215~~§232.405 of this chapter) ~~619-2700~~ during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨

Indicate by check mark whether the registrant ~~(1) has~~is ~~filed~~a ~~all~~large ~~reports~~accelerated ~~required~~filer, toan beaccelerated ~~filed~~filer, bya ~~Section 13~~non-accelerated orfiler, ~~15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (~~or ~~for~~a ~~such~~smaller ~~shorter~~reporting ~~period~~company. See ~~that~~ the ~~registrant~~definitions ~~was~~of ~~required~~“large toaccelerated ~~file~~filer,” ~~such~~“accelerated ~~reports),~~filer” and ~~(2) has~~“smaller ~~been~~reporting ~~subject~~company” toin ~~such~~Rule 12b-2 ~~filing~~of ~~requirements for~~ the ~~past~~Exchange ~~90 days~~Act. ~~Yes x No ¨~~ (Check one):

~~Indicate~~Large byAccelerated ~~check~~Filer ~~mark~~¨ ~~whether~~Accelerated ~~the~~Filer ~~registrant~~¨ ~~has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S~~Non-TAccelerated ~~(§232.405~~Filer of¨ ~~this~~Smaller ~~chapter)~~Reporting ~~during~~Company ~~the~~x ~~preceding 12 months~~ (orDo ~~for~~not ~~such~~check ~~shorter~~if ~~period~~a ~~that~~smaller ~~the~~reporting ~~registrant was required to submit and post such files~~company)~~. Yes x No ¨~~

Indicate by check mark whether the registrant is a ~~large~~shell ~~accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting~~ company~~. See~~ ~~the~~(as ~~definitions~~defined ~~of “large accelerated filer,” “accelerated filer” and “smaller reporting company”~~ in Rule 12b-2 of the Exchange Act). ~~(Check~~ ~~one):~~Yes ¨ No x

~~Large~~At ~~Accelerated~~October 31, ~~Filer~~2011, ¨15,196,563 ~~Accelerated~~shares ~~Filer~~of ¨common ~~Non-Accelerated~~stock, ~~Filer~~$0.01 ¨par ~~(Do~~value, ~~not~~of ~~check~~the ifregistrant awere ~~smaller reporting company) Smaller Reporting Company x~~outstanding.

~~Indicate~~C&D byTECHNOLOGIES, ~~check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)~~INC. ~~Yes ¨ No x~~

AtAND ~~July 31, 2011, 15,196,563 shares of common stock, $0.01 par value, of the registrant were outstanding.~~ SUBSIDIARIES

~~Table~~FORM ~~of Contents~~10-Q

~~C&D TECHNOLOGIES, INC.~~ INDEX

AND SUBSIDIARIES

Part I	FINANCIAL INFORMATION

Item 1	Financial Statements (Unaudited)

	Consolidated Balance Sheets – October 31, 2011 and January 31, 2011	3

	Consolidated Statements of Operations – Three and Nine Months Ended October 31, 2011 and 2010	5

	Consolidated Statements of Cash Flows – Nine Months Ended October 31, 2011 and 2010	6

	Consolidated Statements of Comprehensive Loss – Three and Nine Months Ended October 31, 2011 and 2010	7

	Notes to Consolidated Financial Statements	8

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3	Quantitative and Qualitative Disclosures about Market Risk	33

Item 4	Controls and Procedures	33

Part II	OTHER INFORMATION

Item 1	Legal Proceedings	34

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	34

Item 6	Exhibits	35

SIGNATURES		36

EXHIBIT INDEX		37

~~FORM 10-Q~~ 2

~~INDEX~~PART I. FINANCIAL INFORMATION

Part I	FINANCIAL INFORMATION
Item 1	Financial Statements (Unaudited)
	Consolidated Balance Sheets – July 31, 2011 and January 31, 2011	3
	Consolidated Statements of Operations – Three and Six Months Ended July 31, 2011 and 2010	5
	Consolidated Statements of Cash Flows – Six Months Ended July 31, 2011 and 2010	6
	Consolidated Statements of Comprehensive Income (Loss) – Three and Six Months Ended July 31, 2011 and 2010	7
	Notes to Consolidated Financial Statements	8
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3	Quantitative and Qualitative Disclosures about Market Risk	32
Item 4	Controls and Procedures	32
Part II	OTHER INFORMATION
Item 1A	Risk Factors
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 6	Exhibits	33
SIGNATURES		34
EXHIBIT INDEX		35

Item 1. Financial Statements

2C&D TECHNOLOGIES, INC. AND SUBSIDIARIES

~~Table~~CONSOLIDATED ofBALANCE ~~Contents~~SHEETS

~~PART~~(Dollars I.in ~~FINANCIAL~~thousands, ~~INFORMATION~~except par value)

~~Item 1. Financial Statements~~ (UNAUDITED)

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES

	October 31,		January 31,
	2011		2011
ASSETS
Current assets:
Cash and cash equivalents	$	6,364	$	3,708
Restricted cash		2,673		0
Accounts receivable, less allowance for doubtful accounts of $696 and $981		66,932		61,188
Inventories		75,966		80,772
Deferred taxes		248		251
Other current assets		4,298		4,508
Total current assets		156,481		150,427

Property, plant and equipment, net		86,389		86,891
Deferred income taxes		249		249
Intangible and other assets, net		12,582		13,726
TOTAL ASSETS	$	255,701	$	251,293

LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	7,770	$	2,596
Accounts payable		41,268		39,477
Accrued liabilities		13,130		13,847
Deferred income taxes		101		97
Deferred revenue		2,498		3,588
Other current liabilities		7,055		5,955
Total current liabilities		71,822		65,560

Deferred income taxes		99		98
Long-term debt		37,167		32,934
Long-term debt - related party		20,000		20,000
Other liabilities		35,598		39,169
Total liabilities		164,686		157,761

~~CONSOLIDATED BALANCE~~The ~~SHEETS~~accompanying notes are an integral part of these statements.

~~(Dollars in thousands, except par value)~~ 3

~~(UNAUDITED)~~C&D TECHNOLOGIES, INC. AND SUBSIDIARIES

	July 31,2011		January 31,2011
ASSETS
Current assets:
Cash and cash equivalents	$	7,480	$	3,708
Restricted cash		276		—
Accounts receivable, less allowance for doubtful accounts of $794 and $981		68,905		61,188
Inventories		71,254		80,772
Deferred taxes		256		251
Other current assets		4,177		4,508
Total current assets		152,348		150,427
Property, plant and equipment, net		85,670		86,891
Deferred income taxes		250		249
Intangible and other assets, net		13,024		13,726
TOTAL ASSETS	$	251,292	$	251,293
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	7,687	$	2,596
Accounts payable		34,350		39,477
Accrued liabilities		12,440		13,847
Deferred income taxes		103		97
Deferred revenue		1,362		3,588
Other current liabilities		5,951		5,955
Total current liabilities		61,893		65,560
Deferred income taxes		98		98
Long-term debt		33,798		32,934
Long-term debt - related party		20,000		20,000
Other liabilities		40,449		39,169
Total liabilities		156,238		157,761

CONSOLIDATED BALANCE SHEETS (continued)

~~The~~(Dollars ~~accompanying~~in ~~notes~~thousands, ~~are~~except anpar ~~integral part of these statements.~~ value)

3 (UNAUDITED)

	October 31,			January 31,
	2011			2011

Commitments and contingencies (see Note 9)

Equity:
Common stock, $.01 par value, 25,000,000 shares authorized; 15,306,936 and 15,306,915 shares issued and 15,196,563 and 15,196,542 outstanding at October 31, 2011 and January 31, 2011, respectively		153			153
Additional paid-in capital		203,324			202,350
Treasury stock, at cost, 110,373 shares at October 31, 2011 and January 31, 2011		(39,200	)		(39,200	)
Accumulated other comprehensive loss		(42,029	)		(43,489	)
Accumulated deficit		(44,128	)		(38,480	)
Total stockholders' equity attributable to C&D Technologies, Inc.		78,120			81,334
Noncontrolling interest		12,895			12,198
Total equity		91,015			93,532
TOTAL LIABILITIES AND EQUITY	$	255,701		$	251,293

~~C&D~~The ~~TECHNOLOGIES,~~accompanying ~~INC.~~notes ~~AND~~are ~~SUBSIDIARIES~~an integral part of these statements.

~~CONSOLIDATED BALANCE SHEETS (continued)~~ 4

~~(Dollars~~C&D ~~in thousands~~TECHNOLOGIES, ~~except~~INC. ~~par~~AND ~~value)~~ SUBSIDIARIES

~~(UNAUDITED)~~CONSOLIDATED STATEMENTS OF OPERATIONS

	July 31,2011			January 31,2011
Commitments and contingencies (see Note 9)
Equity:
Common stock, $.01 par value, 25,000,000 shares authorized; 15,306,936 and 15,306,915 shares issued and 15,196,563 and 15,196,542 outstanding at July 31, 2011 and January 31, 2011, respectively		153			153
Additional paid-in capital		202,946			202,350
Treasury stock, at cost, 110,373 shares at July 31, 2011 and January 31, 2011		(39,200	)		(39,200	)
Accumulated other comprehensive loss		(41,408	)		(43,489	)
Accumulated deficit		(40,234	)		(38,480	)
Total stockholders’ equity attributable to C&D Technologies, Inc.		82,257			81,334
Noncontrolling interest		12,797			12,198
Total equity		95,054			93,532
TOTAL LIABILITIES AND EQUITY	$	251,292		$	251,293

(Dollars in thousands, except per share data)

~~The accompanying notes are an integral part of these statements.~~ (UNAUDITED)

	Three months ended						Nine months ended
	October 31,						October 31,
	2011			2010			2011			2010
NET SALES	$	93,421		$	87,623		$	276,330		$	256,161
COST OF SALES		82,397			76,828			240,922			224,355
GROSS PROFIT		11,024			10,795			35,408			31,806

OPERATING EXPENSES:
Selling, general and administrative expenses		8,498			8,025			27,621			26,456
Research and development expenses		1,631			1,468			4,796			4,845
Goodwill impairment		0			0			0			59,978
Restructuring charges		811			1,828			936			1,828
OPERATING INCOME (LOSS)		84			(526	)		2,055			(61,301	)
Interest expense, net		1,338			4,266			3,844			11,813
Other expense (income), net		2,434			1,318			3,126			2,728
LOSS BEFORE INCOME TAXES		(3,688	)		(6,110	)		(4,915	)		(75,842	)
Income tax provision (benefit)		277			161			512			(13,239	)
NET LOSS		(3,965	)		(6,271	)		(5,427	)		(62,603	)
Net (loss) income attributable to noncontrolling interests		(71	)		174			221			126
NET LOSS ATTRIBUTABLE TO C&D TECHNOLOGIES, INC.	$	(3,894	)	$	(6,445	)	$	(5,648	)	$	(62,729	)

Loss per share:
Basic:	$	(0.26	)	$	(6.20	)	$	(0.37	)	$	(60.53	)

Diluted:	$	(0.26	)	$	(6.28	)	$	(0.37	)	$	(60.53	)

~~Table~~The accompanying notes are an integral part of ~~Contents~~these statements.

~~C&D TECHNOLOGIES, INC. AND SUBSIDIARIES~~ 5

~~CONSOLIDATED~~C&D ~~STATEMENTS~~TECHNOLOGIES, OFINC. ~~OPERATIONS~~AND SUBSIDIARIES

~~(Dollars~~CONSOLIDATED inSTATEMENTS ~~thousands,~~OF ~~except~~CASH ~~per share data)~~ FLOWS

(~~UNAUDITED)~~Dollars in thousands)

	Three months endedJuly 31,						Six months endedJuly 31,
	2011			2010			2011			2010
NET SALES	$	94,598		$	83,835		$	182,909		$	168,538
COST OF SALES		83,018			72,802			158,525			147,527
GROSS PROFIT		11,580			11,033			24,384			21,011
OPERATING EXPENSES:
Selling, general and administrative expenses		8,813			9,209			19,248			18,431
Research and development expenses		1,570			1,589			3,165			3,377
Goodwill impairment		—			59,978			—			59,978
OPERATING INCOME (LOSS)		1,197			(59,743	)		1,971			(60,775	)
Interest expense, net		1,275			4,199			2,506			7,547
Other expense, net		812			674			692			1,410
LOSS BEFORE INCOME TAXES		(890	)		(64,616	)		(1,227	)		(69,732	)
Income tax provision (benefit)		169			(13,794	)		235			(13,400	)
NET LOSS		(1,059	)		(50,822	)		(1,462	)		(56,332	)
Net income (loss) attributable to noncontrolling interests		70			(142	)		292			(48	)
NET LOSS ATTRIBUTABLE TO C&D TECHNOLOGIES, INC.	$	(1,129	)	$	(50,680	)	$	(1,754	)	$	(56,284	)
Loss per share:
Basic and Diluted:	($	0.07	)	$	(48.91	)	($	0.12	)	$	(54.38	)

(UNAUDITED)

The accompanying notes are an integral part of these statements.

	Nine months ended
	October 31,
	2011			2010
Cash flows from operating activities:
Net loss	$	(5,427	)	$	(62,603	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Share-based compensation		974			625
Depreciation and amortization		7,661			7,694
Amortization of debt acquisition and discount costs		417			4,082
Impairment of goodwill		0			59,978
Impairment of fixed assets		0			1,523
Deferred income taxes		0			(13,479	)
Changes in assets and liabilities:
Accounts receivable		(5,448	)		(7,595	)
Inventories		5,383			3,013
Other current assets		518			(4,164	)
Accounts payable		2,905			(7,444	)
Accrued liabilities		(783	)		2,517
Book overdraft		(1,648	)		(2,370	)
Income taxes payable		46			405
Other current liabilities		(1,599	)		5,462
Other liabilities		(1,155	)		90
Other long-term assets		(8	)		(16	)
Other, net		(618	)		(88	)
Net cash provided by (used in) continuing operating activities		1,218			(12,370	)
Net cash used in discontinued operating activities		0			(8	)
Net cash provided by (used in) operating activities		1,218			(12,378	)
Cash flows from investing activities:
Acquisition of property, plant and equipment		(4,761	)		(5,501	)
(Increase) decrease in restricted cash		(2,673	)		7
Net cash used in investing activities		(7,434	)		(5,494	)
Cash flows from financing activities:
Borrowings on line of credit facility		49,382			67,531
Repayments on line of credit facility		(43,809	)		(67,011	)
Repayment of debt		(637	)		(119	)
Proceeds from new borrowings		4,041			20,022
Proceeds from the issuance of treasury stock		0			14
Financing cost of long term debt		(124	)		(2,275	)
Purchase of treasury stock		0			(71	)
Net cash provided by financing activities		8,853			18,091
Effect of exchange rate changes on cash and cash equivalents		19			117
Increase in cash and cash equivalents		2,656			336
Cash and cash equivalents, beginning of period		3,708			2,700
Cash and cash equivalents, end of period	$	6,364		$	3,036

5The accompanying notes are an integral part of these statements.

~~Table of Contents~~6

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF ~~CASH~~COMPREHENSIVE ~~FLOWS~~ LOSS

(Dollars in thousands), except per share data)

(UNAUDITED)

	Six months ended
	Three months ended						Nine months ended
	July 31,
	October 31,						October 31,
	2011			2010			2011			2010
Cash flows from operating activities:
Net loss	$	(3,965	)	$	(6,271	)	$	(5,427	)	$	(62,603	)
Net loss	$	(1,462	)	$	(56,332	)
Other comprehensive income, net of tax:
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Net unrealized (loss)/gain on derivative instruments		(1,655	)		1,238			(1,950	)		1,542
Share-based compensation		596			533
Adjustment to recognize pension liability and net periodic pension cost		805			590			2,416			1,770
Depreciation and amortization		5,275			5,176
Foreign currency translation adjustments		398			592			1,470			827
Amortization of debt acquisition and discount costs		273			2,685
Total comprehensive loss		(4,417	)		(3,851	)		(3,491	)		(58,464	)
Impairment of goodwill		—			59,978
Comprehensive income attributable to noncontrolling interests		(98	)		(349	)		(697	)		(391	)
Deferred income taxes		3			(13,479	)
Total comprehensive loss attributable to C&D Technologies, Inc.	$	(4,515	)	$	(4,200	)	$	(4,188	)	$	(58,855	)
Changes in assets and liabilities:
Accounts receivable		(7,019	)		231
Inventories		10,054			4,925
Other current assets		393			(21	)
Accounts payable		(5,300	)		(13,405	)
Deferred revenue		(2,258	)		1,775
Accrued liabilities		819			(1,144	)
Book overdraft		(230	)		(401	)
Income taxes payable		(101	)		30
Other current liabilities		(2,310	)		2,518
Other liabilities		2,886			604
Other long-term assets		(20	)		19
Other, net		(725	)		(717	)
Net cash provided by (used in) continuing operating activities		874			(7,025	)
Net cash used in discontinued operating activities		—			(7	)
Net cash provided by (used in) operating activities		874			(7,032	)
Cash flows from investing activities:
Acquisition of property, plant and equipment		(2,521	)		(5,083	)
(Increase) decrease in restricted cash		(276	)		8
Net cash used in investing activities		(2,797	)		(5,075	)
Cash flows from financing activities:
Borrowings on line of credit facility		34,295			51,232
Repayments on line of credit facility		(32,009	)		(55,831	)
Repayment of debt		(623	)		(97	)
Proceeds from new borrowings		4,041			20,022
Proceeds from the issuance of treasury stock		—			14
Financing cost of long term debt		(124	)		(2,245	)
Purchase of treasury stock		—			(71	)
Net cash provided by financing activities		5,580			13,024
Effect of exchange rate changes on cash and cash equivalents		115			33
Increase in cash and cash equivalents		3,772			950
Cash and cash equivalents, beginning of period		3,708			2,700
Cash and cash equivalents, end of period	$	7,480		$	3,650

The accompanying notes are an integral part of these statements.

6 7

~~Table~~C&D ofTECHNOLOGIES, ~~Contents~~INC. AND SUBSIDIARIES

~~C&D~~NOTES ~~TECHNOLOGIES,~~TO ~~INC.~~CONSOLIDATED ~~AND~~FINANCIAL ~~SUBSIDIARIES~~ STATEMENTS

~~CONSOLIDATED~~ (Dollars ~~STATEMENTS~~in OFthousands, ~~COMPREHENSIVE~~except ~~INCOME~~per ~~(LOSS)~~share data)

(~~Dollars in thousands, except per share data~~UNAUDITED)

~~(UNAUDITED)~~1. BASIS OF PRESENTATION

	Three months ended						Six months ended
	July 31,						July 31,
	2011			2010			2011			2010
Net loss	$	(1,059	)	$	(50,822	)	$	(1,462	)	$	(56,332	)
Other comprehensive income, net of tax:
Net unrealized gain/(loss) on derivative instruments		238			39			(295	)		304
Adjustment to recognize pension liability and net periodic pension cost		808			632			1,611			1,180
Foreign currency translation adjustments		297			279			1,072			235
Total comprehensive income (loss)		284			(49,872	)		926			(54,613	)
Comprehensive (income) loss attributable to noncontrolling interests		(160	)		53			(599	)		(42	)
Total comprehensive income (loss) attributable to C&D Technologies, Inc.	$	124		$	(49,819	)	$	327		$	(54,655	)

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 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 Fiscal Year Ended January 31, 2011 Annual Report on Form 10-K, filed on May 2, 2011.

~~The~~On ~~accompanying~~December 21, ~~notes~~2010, ~~are~~the anCompany ~~integral~~filed ~~part~~a previously approved Certificate of ~~these~~Amendment ~~statements~~to the Company’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares of the Company’s common stock, par value $.01 per share (“Common Stock”) from 75,000,000 to 600,000,000 and to effect a forward stock split, by which each outstanding share of Common Stock were combined and reclassified into 1.37335 shares of Common Stock, such ratio having been determined by the Board of Directors of the Company. As a result of the forward stock split, the issued and outstanding shares of Common Stock were increased on a basis of 1.37335 shares for every one share outstanding.

7On January 31, 2011, the holder of a majority of our outstanding Common Stock approved an amendment to the Company’s Amended and Restated Certificate of Incorporation to (i) effect a reverse stock split of the issued and outstanding and treasury Common Stock of the Company, at a reverse stock split ratio of 1-for-35 and (ii) decrease the number of authorized shares of the Company’s Common Stock from 600,000,000 to 25,000,000. The reverse stock split was effective on March 14, 2011. As a result of the reverse stock split, the issued and outstanding shares of Common Stock were decreased on a basis of one share for every thirty-five shares outstanding. All of the stock related information including issued and outstanding Common Stock, stock options, restricted stock, performance stock and loss per share for all periods presented was initially adjusted retrospectively to reflect the forward stock split and has since been adjusted retrospectively to reflect the reverse stock split.

~~Table of Contents~~8

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

(UNAUDITED)

12. ~~BASIS~~STOCK-BASED ~~OF PRESENTATION~~COMPENSATION

The ~~accompanying~~Company ~~interim~~granted ~~unaudited~~0 ~~consolidated~~and ~~financial~~1,196,060 ~~statements~~stock ofoption ~~C&D~~awards ~~Technologies,~~during ~~Inc. (~~the ~~“Company”)~~three ~~have~~and ~~been prepared~~nine inmonths ~~accordance~~ended ~~with~~October ~~accounting~~31, ~~principles~~2011, ~~generally~~and ~~accepted~~0 ~~in the United States for interim financial information~~ and ~~with~~492,055 ~~instructions~~during tothe ~~Form~~three ~~10-Q~~ and ~~Article~~nine 10months ofended ~~Regulation~~October ~~S-X.~~31, ~~Accordingly~~2010, werespectively. doThe ~~not~~Company ~~include~~recorded ~~all~~$378 ~~the information~~ and ~~notes~~ ~~required~~$974 ~~for~~of ~~complete~~stock ~~financial~~compensation ~~statements.~~expense Inrelated ~~the~~to ~~opinion~~stock ofoption ~~management,~~awards ~~the~~in ~~interim~~its unaudited consolidated ~~financial~~statement ~~statements~~of ~~include~~operations ~~all adjustments considered necessary~~ for the ~~fair~~three ~~statements~~and ofnine ~~the~~months ~~financial~~ended ~~position~~October 31, ~~results~~2011, ~~of operations~~respectively, and ~~cash~~$34 ~~flows~~and ~~for~~$275 during the ~~interim~~three ~~periods~~and ~~presented.~~nine ~~The~~months ~~financial~~ended ~~statements~~October ~~should~~31, be2010, ~~read~~respectively. inThe ~~conjunction~~impact ~~with~~on ~~the~~loss ~~consolidated~~per ~~financial~~share ~~statements~~for ~~and notes thereto included in~~ the ~~Company’s~~nine ~~Fiscal~~months ~~Year~~ended ~~Ended~~October ~~January~~ 31, 2011 ~~Annual~~ ~~Report~~and on2010 ~~Form~~was ~~10-K,~~$0.06 ~~filed~~and ~~on May 2~~$0.27, ~~2011~~respectively.

OnThe ~~December~~Company did not grant any restricted stock awards or performance shares during the three and nine months ended October 2131, ~~2010,~~2011. ~~the~~The Company ~~filed~~granted a0 ~~previously~~and ~~approved Certificate~~333,558 ofrestricted ~~Amendment~~stock awards and 0 and 333,558 performance shares to selected executives and other key employees under the Company’s ~~Amended~~2007 Stock Incentive Plan during the three and ~~Restated~~nine ~~Certificate~~months ofended ~~Incorporation~~October to31, ~~increase~~2010. ~~the~~The ~~number~~restricted ofstock ~~authorized~~awards ~~shares~~vest ratably over a period of one to four years and the ~~Company’s~~expense ~~common~~is ~~stock,~~recognized ~~par~~over ~~value~~the $related vesting period.01 ~~per~~The ~~share~~Company ~~(“Common~~recorded ~~Stock”)~~$58 ~~from~~and ~~75,000,000~~$350 ~~to 600,000,000~~of ~~and~~compensation toexpense ~~effect~~related ato ~~forward~~restricted stock ~~split,~~awards byin ~~which~~its ~~each~~unaudited ~~outstanding~~consolidated ~~share~~statement of ~~Common~~operations ~~Stock~~for ~~were~~the ~~combined~~three and ~~reclassified~~nine ~~into~~months ~~1.37335~~ended ~~shares~~October of31, ~~Common Stock~~2010, ~~such~~respectively. ~~ratio~~The ~~having~~performance ~~been~~shares ~~determined~~were byto vest at the ~~Board~~end of ~~Directors~~the ofperformance period upon the ~~Company~~achievement of pre-established financial objectives. AsNo ~~a result~~compensation ofexpense was recorded for the ~~forward~~performance ~~stock~~related ~~split,~~awards for the ~~issued~~three and ~~outstanding~~nine ~~shares~~months ofended ~~Common~~October ~~Stock~~31, ~~were~~2010 ~~increased~~since onthe aCompany, ~~basis~~at ofthat ~~1.37335~~time, ~~shares~~did ~~for~~not ~~every~~believe ~~one~~that ~~share~~it ~~outstanding.~~is probable the performance criteria established would be met.

OnThe ~~January 31,~~following ~~2011,~~table ~~the~~summarizes ~~holder~~information ofabout ~~a majority of our outstanding Common Stock approved an amendment to~~ the ~~Company’s Amended and Restated Certificate of Incorporation to (i) effect a reverse~~ stock ~~split~~options ~~of the issued and~~ outstanding ~~and treasury Common Stock of the Company,~~ at aOctober ~~reverse stock split ratio of 1-for-35 and (ii) decrease the number of authorized shares of the Company’s Common Stock from 600~~31,~~000,000~~ ~~to 25,000,000. The reverse stock split was effective on March 14,~~ 2011. As a result of the reverse stock split, the issued and outstanding shares of Common Stock were decreased on a basis of one share for every thirty-five shares outstanding. All of the stock related information including issued and outstanding Common Stock, stock options, restricted stock, performance stock and loss per share for all periods presented was initially adjusted retrospectively to reflect the forward stock split and has since been adjusted retrospectively to reflect the reverse stock split. :

In the fourth quarter of fiscal year 2010, the Company revised the useful lives of certain machinery and equipment assets to more accurately reflect expected useful lives. These assets which were being depreciated over a term of 3 – 10 years are now being depreciated over a term of 3 – 15 years. As a result, for the three and six months ended July 31, 2011 depreciation expense included as cost of sales was reduced by approximately $300 and $600, respectively. The net impact of this change in estimate for the three and six months ended July 31, 2011 were a reduction of basic and fully diluted loss per shares of approximately $0.02 and $0.04, respectively. As a result, for the three and six months ended July 31, 2010 depreciation expense included as cost of sales was reduced by approximately $450 and $900, respectively. The net impact of this change in estimate for the three and six months ended July 31, 2010 were a reduction of basic and fully diluted loss per shares of approximately $0.43 and $0.87, respectively.

					OPTIONS OUTSTANDING					OPTIONS EXERCISABLE
							Weighted-					Weighted-
							Average	Weighted-				Average	Weighted-
							Remaining	Average				Remaining	Average
Range of					Number		Contractual	Exercise		Number		Contractual	Exercise
Exercise Prices					Outstanding		Life	Price		Exercisable		Life	Price
$	8.00	-	$	9.45		1,196,060	6.4 Years	$	8.26		0	6.4 Years	$	8.26
$	33.13	-	$	38.99		23,476	4.2 Years	$	35.91		23,476	4.2 Years	$	35.91
$	108.31	-	$	160.56		15,344	4.0 Years	$	140.10		15,344	4.0 Years	$	140.10
$	173.55	-	$	232.42		10,023	4.2 Years	$	197.22		10,023	4.2 Years	$	197.22
$	249.75	-	$	363.93		2,708	3.6 years	$	256.37		2,708	3.6 years	$	256.37
$	408.27		$	565.26		5,274	1.4 Years	$	471.02		5,274	1.4 Years	$	471.02
						1,252,885	6.3 Years	$	14.39		56,825	3.9 Years	$	143.38

2The estimated fair value of the options granted was calculated using the Black Scholes Merton option pricing model (“Black Scholes”). ~~STOCK~~The Black Scholes model incorporates assumptions to value stock-~~BASED~~based ~~COMPENSATION~~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. Expected volatility is based on the historical volatility of the Company’s stock. The Company uses the shortcut method to determine the expected life assumption.

The ~~Company~~fair ~~granted~~value ~~60,560~~of ~~and 1,196,060~~ stock ~~option~~options ~~awards~~granted during the three and ~~six~~nine months ended ~~July~~ October 31, 2011, ~~respectively,~~ and ~~492,055~~ ~~stock option awards during both the three and six months ended July 31,~~ 2010. ~~The~~was ~~Company~~estimated ~~recorded~~on ~~$364 and $596 of stock compensation expense related to stock option awards in its unaudited consolidated statement of operations for~~ the ~~three~~ ~~and~~grant ~~six~~date ~~months~~using ~~ended July 31, 2011, respectively, and $133 and $241 during~~ the ~~three~~Black ~~and~~Scholes ~~six~~option ~~months~~pricing ~~ended~~model ~~July 31,~~with ~~2010, respectively. The impact on loss per share for~~ the ~~six~~following ~~months~~average ~~ended July 31, 2011 and 2010 was $0~~assumptions.~~04 and $0.23, respectively.~~

The Company did not grant any restricted stock awards or performance shares during the three and six months ended July 31, 2011. The Company granted 333,558 restricted stock awards and 333,558 performance shares to selected executives and other key employees under the Company’s 2007 Stock Incentive Plan during the three and six months ended July 31, 2010. The restricted stock awards were to vest ratably over a period of one to four years and the expense recognized over the related vesting period. The Company recorded $170 and $292 of compensation expense related to restricted stock awards in its unaudited consolidated statement of operations for the three 9

8C&D TECHNOLOGIES, INC. AND SUBSIDIARIES

~~Table~~NOTES ofTO ~~Contents~~CONSOLIDATED FINANCIAL STATEMENTS

~~C&D~~ (Dollars ~~TECHNOLOGIES~~in thousands, ~~INC.~~except ~~AND~~per ~~SUBSIDIARIES~~share data)

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~ (UNAUDITED)

(Dollars in thousands, except per share data)

	Three months ended October 31,		Nine months ended October 31,
	2011	2010	2011	2010
Risk-free interest rate	N/A	N/A	1.58%-2.32%	2.01%-2.63%
Dividend yield	N/A	N/A	0.00%	0.00%
Volatility factor	N/A	N/A	67.7%-75.2%	77.48%-86.62%
Expected lives	N/A	N/A	4.5 - 5.25 Years	4.0 - 5.5 Years

~~(UNAUDITED)~~3. NEW ACCOUNTING PRONOUNCEMENTS

~~and~~Recently ~~six~~Issued ~~months~~Accounting ended July 31, 2010, respectively. The performance shares were to vest at the end of the performance period upon the achievement of pre-established financial objectives. No compensation expense was recorded for the performance related awards for the three and six months ended July 31, 2010 since the Company, at that time, did not believe that it was probable the performance criteria established would be met. Guidance

~~The~~In ~~following~~June ~~table~~2011, ~~summarizes~~the ~~information~~Financial ~~about~~Accounting Standards Board (FASB) amended its guidance on the ~~stock~~presentation ~~options~~of ~~outstanding~~comprehensive atincome ~~July~~in financial statements to improve the comparability, consistency and transparency of financial reporting and to increase the prominence of items that are recorded in other comprehensive income. The new accounting guidance requires entities to report components of comprehensive income in either (i) 31a continuous statement of comprehensive income or (ii) two separate but consecutive statements. The provisions of this new guidance are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011:. The Company is currently evaluating the impact of adoption of this guidance on the Company’s financial statements.

	OPTIONS OUTSTANDING						OPTIONS EXERCISABLE
			Weighted-						Weighted-
			Average		Weighted-				Average		Weighted-
			Remaining		Average				Remaining		Average
Range of Exercise Prices	NumberOutstanding		ContractualLife		ExercisePrice		NumberExercisable		ContractualLife		ExercisePrice
$ 8.00 - $ 9.45		1,196,060		6.7 Years	$	8.26		0		6.7 Years	$	8.26
$ 33.13 - $ 39.00		24,076		4.5 Years	$	35.94		24,076		4.5 Years	$	35.94
$ 108.31 - $ 160.56		15,697		4.3 Years	$	140.11		15,697		4.3 Years	$	140.11
$ 173.55 - $ 232.42		10,900		4.4 Years	$	197.07		10,900		4.4 Years	$	197.07
$ 249.75 - $ 363.93		2,707		3.8 Years	$	256.37		2,707		3.8 Years	$	256.37
$ 408.27 - $ 565.26		6,003		1.6 years	$	471.20		6,003		1.6 Years	$	471.20
		1,255,443		6.6 Years	$	14.83		59,383		4.1 Years	$	147.10

4.	INVENTORIES

~~The~~Inventories ~~estimated~~consisted ~~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. Expected volatility is based on the historical volatility of the Company’s stock. The Company uses the shortcut method to determine the expected life assumption. following:

The fair value of stock options granted during the three and six months ended July 31, 2011 and 2010 was estimated on the grant date using the Black Scholes option pricing model with the following average assumptions.

	October 31,		January 31,
	2011		2011
Raw materials	$	21,598	$	20,630
Work-in-process		26,458		22,488
Finished goods		27,910		37,654
Total	$	75,966	$	80,772

	Three months ended July 31,		Six months ended July 31,
	2011	2010	2011	2010
Risk-free interest rate	1.58%	2.01%-2.63%	1.58%-2.32%	2.01%-2.63%
Dividend yield	0.00%	0.00%	0.00%	0.00%
Volatility factor	68.4%	77.5%-86.6%	67.7%-75.2%	77.5%-86.6%
Expected lives	5.25 Years	4.0 - 5.5 Years	4.5 - 5.25 Years	4.0 - 5.5 Years

3.C&D ~~NEW~~TECHNOLOGIES, ~~ACCOUNTING~~INC. ~~PRONOUNCEMENTS~~AND SUBSIDIARIES

~~Recently~~NOTES ~~Issued~~TO ~~Accounting~~CONSOLIDATED ~~Guidance~~FINANCIAL STATEMENTS

~~In June 2011, the Financial Accounting Standards Board~~ (~~FASB)~~Dollars ~~amended its guidance on the presentation of comprehensive income~~ in ~~financial statements to improve the comparability~~thousands, ~~consistency~~except ~~and~~per ~~transparency~~share of financial reporting and to increase the prominence of items that are recorded in other comprehensive income. The new accounting guidance requires entities to report components of comprehensive income in either (idata) a continuous statement of comprehensive income or (ii) two separate but consecutive statements. The provisions of this new guidance are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011.

9 (UNAUDITED)

~~Table~~5. ~~of Contents~~DEBT

~~C&D~~Debt ~~TECHNOLOGIES,~~consisted ~~INC.~~of ~~AND~~the ~~SUBSIDIARIES~~ following:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

	October 31,		January 31,
	2011		2011
Credit Facility:
Line of Credit Facility, maximum commitment of $75,000 at October 31, 2011 and January 31, 2011: availability is determined by a borrowing base calculation (includes $20,000 related party loan)	$	50,068	$	44,495
Convertible Senior Notes 2005; due 2025, bears interest at 5.25% net of unamortized discounts of $69 and $95, respectively*		745		719
Convertible Senior Notes 2006; due 2026, bears interest at 5.50%*		1,240		1,240
China Line of Credit; Maximum commitment of 56,000 RMB and 82,000 RMB (approximately $8,809 and $12,415 with an effective interest rate of 6.35% and 5.18% as of October 31, 2011 and January 31, 2011, respectively)		8,694		8,933
China Short-term Loan of 26,000 RMB (approximately $4,090 with an effective interest rate of 5.85% as of October 31, 2011)		4,090		0
Capital leases		100		143
Total debt		64,937		55,530
Less current portion		7,770		2,596
Total long-term portion	$	57,167	$	52,934

~~(Dollars~~* inThese ~~thousands,~~notes ~~except~~have ~~per~~been ~~share~~classified ~~data)~~as current liabilities since the Company’s debt for equity exchange and delisting of the Company’s stock by the New York Stock Exchange constituted a fundamental change under the indentures governing the convertible notes.

~~(UNAUDITED)~~Credit Facility

~~The~~At October 31, 2011, the Company ishas ~~currently~~a ~~evaluating~~$75,000 principal amount Credit Facility. The Credit Facility consists of (1) an approximately three-year senior revolving line of credit which does not expire until December 22, 2013 (as adjusted by the ~~impact~~third amendment to the Credit Agreement described below) with a maximum borrowing capacity of ~~adoption~~$55,000, determined by a borrowing base calculation and (2) a $20,000 term loan as discussed further below. The availability under the revolving line of ~~this~~credit ~~guidance~~portion of the Credit Facility is determined by a borrowing base, is collateralized by a first lien on certain assets and bears interest at LIBOR plus 2.50% to 3.00% (as adjusted by the ~~Company’s~~third ~~financial~~amendment ~~statements~~to the Credit Agreement described below) or Prime plus 1.00% to 1.50% (as adjusted by the third amendment to the Credit Agreement described below) with the rate premium based on the amount outstanding and quarterly average excess availability. As of October 31, 2011, $50,068 was funded under the revolving line of credit portion of the Credit Facility and term loan and $4,507 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.

4In April 2010, the Company completed an Amended and Restated Credit Facility Agreement (the “Credit Agreement”). ~~INVENTORIES~~Also, in April 2010, the Company completed a first amendment (“Amendment 1”) to the Credit Agreement. Amendment 1 provided for the addition of a $20,000 term loan tranche that effectively increased the Credit Facility from $55,000 to $75,000. All obligations under the term loan tranche are secured by a first priority lien on all of the Company’s personal property, as well as that of certain of its subsidiaries, as the guarantor, along with certain of its real estate. Repayment of the indebtedness under the term loan tranche is subordinate to the repayment of indebtedness owed under the revolving credit line portion of the Credit Facility. The term loan tranche is payable on December 22, 2013. The term loan tranche bears interest at the rate of 11.0 percent (as adjusted by the third amendment to the Credit Agreement) plus the greater of (i) LIBOR and (ii) 3 percent. The term loan tranche of the credit facility is subject to the same customary affirmative and negative covenants, as well as financial covenants, as stated in the Credit Agreement. In addition, the Company has a requirement to maintain minimum excess availability under the Credit Agreement of $7,500 for periods prior to August 1, 2011 and $10,000 for periods after August 1, 2011. Proceeds from the term loan tranche were utilized to pay down the revolving credit line facility tranche and for general corporate purposes.

~~Inventories consisted of the following:~~ 11

	July 31,2011		January 31,2011
Raw materials	$	19,545	$	20,630
Work-in-process		23,070		22,488
Finished goods		28,639		37,654
Total	$	71,254	$	80,772

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES

5.NOTES ~~DEBT~~TO CONSOLIDATED FINANCIAL STATEMENTS

~~Debt~~ (Dollars ~~consisted~~in ~~of the~~thousands, ~~following:~~except per share data)

	July 31,2011		January 31,2011
Credit Facility:
Line of Credit Facility, maximum commitment of $75,000 at July 31, 2011 and January 31, 2011: availability is determined by a borrowing base calculation (includes $20,000 related party loan)	$	46,781	$	44,495
Convertible Senior Notes 2005; due 2025, bears interest at 5.25% net of unamortized discounts of $78 and $95, respectively*		736		719
Convertible Senior Notes 2006; due 2026, bears interest at 5.50%*		1,240		1,240
China Line of Credit; Maximum commitment of 56,000 RMB and 82,000 RMB (approximately $8,691 and $12,415 with an effective interest rate of 6.35% and 5.18% as of July 31, 2011 and January 31, 2011, respectively)		8,578		8,933
China Short-term Loan of 26,000 RMB (approximately $4,035 with an effective interest rate of 5.85% as of July 31, 2011)		4,035		0
Capital leases		115		143
Total debt		61,485		55,530
Less current portion		7,687		2,596
Total long-term portion	$	53,798	$	52,934

(UNAUDITED)

*On ~~These~~December 14, ~~notes~~2010, ~~have~~the ~~been~~original ~~classified~~term asloan ~~current~~lender, ~~liabilities~~Ableco, ~~since~~L.L.C. ~~the~~assigned ~~delisting~~all of ~~the~~its ~~Company’s~~rights ~~stock~~and byobligations under the ~~New~~Loan ~~York~~agreement ~~Stock~~in ~~Exchange~~respect ~~constituted~~to this $20,000 term loan tranche to Silver Oak Capital, L.L.C. an affiliate of Angelo Gordon & Co., L.P. (“AG”) a ~~fundamental~~related ~~change~~party ~~under~~of ~~the~~C&D ~~convertible~~Technologies, ~~note~~Inc. ~~agreements~~(See Note 17 for additional information).

The Credit ~~Facility~~Agreement, as amended, continues to require the Company to maintain a minimum fixed charge coverage ratio of 1.1:1.0 on a consolidated basis which becomes applicable only if the availability under the revolving credit line tranche falls below $7,500 prior to August 1, 2011 adjusting to $10,000 thereafter. As of October 31, 2011, the Company’s availability exceeded the $10,00 threshold and was in compliance with the minimum fixed charge coverage ratio.

AtIn ~~July 31,~~December ~~2011~~2010, the Company ~~has~~completed a ~~$75,000~~second ~~principal~~amendment ~~amount Credit Facility. The Credit Facility consists of~~ (1“Amendment 2”) ~~an approximately~~ ~~three-year senior revolving line of credit which does not expire until December 22, 2013 (as adjusted by the third amendment~~ to the Credit Agreement. ~~described~~This ~~below)~~amendment ~~with~~reduced athe ~~maximum~~availability ~~borrowing~~block ~~capacity~~from of $5510,000, ~~determined~~to ~~by a borrowing base calculation and (2) a~~ $~~20,000 term loan as discussed further below~~0. ~~The~~In ~~availability~~December ~~under~~2010, the ~~revolving~~Company ~~line~~completed ofa ~~credit~~third ~~portion~~amendment ofto the Credit Facility. isThis ~~determined~~amendment byadjusted athe ~~borrowing~~interest ~~base,~~rates ison ~~collateralized~~the byfacility aadjusting ~~first~~the ~~lien~~rate on ~~certain~~ ~~assets~~the ~~and~~Credit ~~bears~~Facility ~~interest~~and atterm ~~LIBOR~~loan ~~plus~~tranches ~~2.50%~~ to ~~3.00% (as adjusted by~~ the ~~third~~rates ~~amendment~~described toabove, removing the ~~Credit~~EBITDA ~~Agreement~~requirements ~~described~~from ~~below)~~Amendment ~~or Prime plus~~ 1~~.00%~~, torevising ~~1.50% (as adjusted by~~ the ~~third~~availability ~~amendment~~block to ~~the~~$7,500 ~~Credit~~for ~~Agreement~~periods ~~described~~prior ~~below) with~~to ~~the~~August 1, ~~rate~~2011 ~~premium based on the amount outstanding~~ and ~~quarterly~~$10,000 ~~average~~for ~~excess~~periods ~~availability.~~after ~~As of July~~August 311, 2011,. ~~$46~~In addition,~~781~~ ~~was funded under~~ the ~~revolving~~maturity ~~line~~date of ~~credit portion of~~ the Credit Facility and related term loan ~~and~~tranche ~~$4,682~~were ~~was~~extended ~~utilized~~to ~~for letters~~December 22, ~~of credit~~2013. ~~As provided under the~~

10The Credit Agreement restricts payments including dividends and Treasury Stock purchases to no more than $250 for Treasury Stock purchases in any one calendar year and $1,750 for dividends for any one calendar year subject to adjustments of up to $400 per year in the case of the conversion of debt to stock per the terms of the indenture governing the 2005 Notes. These restricted payments can only occur with prior notice to the lenders and provided that there is a minimum of $30,000 in excess availability for a period of thirty days prior to the dividend.

~~Table~~The Credit Agreement includes a material adverse change clause which defines an event of ~~Contents~~default as a material adverse change in the business, assets or prospects. Company lenders could claim a breach under the material adverse change covenant or the cross-default provisions under the Credit Agreement under certain circumstances. An interpretation of events as a material adverse change or any breach of the covenants in the Credit Agreement or the indentures governing the 2005 Notes and 2006 Notes could cause a default under the Credit Agreement and other debt (including the 2005 Notes and 2006 Notes), which would restrict the Company’s ability to borrow under the Credit Agreement, thereby significantly impacting liquidity. The Credit Agreement was amended to waive any default due to the change in control and as a result of any defaults that have or continue to occur under the Indentures governing the 2005 Notes and 2006 Notes.

~~C&D~~Convertible ~~TECHNOLOGIES,~~Senior ~~INC.~~Notes ~~AND SUBSIDIARIES~~ 2005

~~NOTES~~In TOfiscal ~~CONSOLIDATED~~year ~~FINANCIAL~~2011, ~~STATEMENTS~~the Company issued approximately 8,398,237 shares of Common Stock in exchange for $74,186 aggregate principal amount of the 2005 Notes plus accrued interest. As a result, $745 of the principal amount remains outstanding as of October 31, 2011, net of $69 of unamortized discounts.

~~(Dollars~~On inNovember 21, ~~thousands~~2005, ~~except~~the ~~per~~Company ~~share~~completed ~~data~~the private placement of $75,000 aggregate principal amount of 5.25% Convertible Senior Notes Due 2025 (“2005 Notes”) which raised proceeds of approximately $72,300, net of $2,700 in issuance costs. These costs are being amortized to interest expense over seven years based on the date that holders can exercise their first put option.

~~(UNAUDITED)~~The 2005 Notes mature on November 1, 2025 and require semi-annual interest payments at 5.25% per annum on the principal amount outstanding. Prior to maturity the holders may convert their 2005 Notes into shares of the Company’s Common Stock under certain circumstances. The conversion rate is 4.6326 shares per $1 principal amount of 2005 Notes, which is equivalent to a conversion price of approximately $215.86 per share. At any time between November 1, 2010 and November 1, 2012, the Company may at its option redeem the 2005 Notes, in whole or in part, for cash, at a redemption price equal to 100% of the principal amount of 2005 Notes to be redeemed, plus any accrued and unpaid interest, including additional interest, if any, if in the previous 30 consecutive trading days ending on the trading day before the date of mailing of the redemption notice the closing sale price of the Common Stock exceeds 130% of the then effective conversion price of the 2005 Notes for at least 20 trading days. In addition, at any time after November 1, 2012, the Company may redeem the 2005 Notes, in whole or in part, for cash, at a redemption price equal to 100% of the principal amount of the 2005 Notes to be redeemed plus any accrued and unpaid interest, including additional interest, if any.

~~Credit Facility, excess borrowing capacity will be available for future working capital needs and general corporate purposes.~~ 12

InC&D ~~April 2010~~TECHNOLOGIES, ~~the Company completed an Amended and Restated Credit Facility Agreement (the “Credit Agreement”)~~INC. ~~Also,~~AND in April 2010, the Company completed a first amendment (“Amendment 1”) to the Credit Agreement. Amendment 1 provided for the addition of a $20,000 term loan tranche that effectively increased the Credit Facility from $55,000 to $75,000. All obligations under the term loan tranche are secured by a first priority lien on all of the Company’s personal property, as well as that of certain of its subsidiaries, as the guarantor, along with certain of its real estate. Repayment of the indebtedness under the term loan tranche is subordinate to the repayment of indebtedness owed under the revolving credit line portion of the Credit Facility. The term loan tranche is payable on December 22, 2013. The term loan tranche bears interest at the rate of 11.0 percent (as adjusted by the third amendment to the Credit Agreement) plus the greater of (i) LIBOR and (ii) 3 percent. The term loan tranche of the credit facility is subject to the same customary affirmative and negative covenants, as well as financial covenants, as stated in the Credit Agreement. In addition, the Company has a requirement to maintain minimum excess availability under the Credit Agreement of $7,500 for periods prior to August 1, 2011 and $10,000 for periods after August 1, 2011. Proceeds from the term loan tranche were utilized to pay down the revolving credit line facility tranche and for general corporate purposes. SUBSIDIARIES

OnNOTES ~~December 14,~~TO ~~2010,~~CONSOLIDATED ~~the~~FINANCIAL original term loan lender, Ableco, L.L.C. assigned all of its rights and obligations under the Loan agreement in respect to this $20,000 term loan tranche to Silver Oak Capital, L.L.C. an affiliate of Angelo Gordon & Co., L.P. (“AG”) a related party of C&D Technologies, Inc. (See Note 17 for additional information). STATEMENTS

The Credit Agreement, as amended, continues to require the Company to maintain a minimum fixed charge coverage ratio of 1.1:1.0 on a consolidated basis which becomes applicable only if the availability under the revolving credit line tranche falls below $7,500 prior to August 1,(Dollars ~~2011~~in ~~adjusting to $10~~thousands,~~000~~ ~~thereafter.~~except Asper ofshare ~~July 31, 2011, the Company was in compliance with the minimum fixed charge coverage ratio.~~ data)

~~In December 2010, the Company completed a second amendment~~ (~~“Amendment 2”~~UNAUDITED) to the Credit Agreement. This amendment reduced the availability block from $10,000 to $0. In December 2010, the Company completed a third amendment to the Credit Facility. This amendment adjusted the interest rates on the facility adjusting the rate on the Credit Facility and term loan tranches to the rates described above, removing the EBITDA requirements from Amendment 1, revising the availability block to $7,500 for periods prior to August 1, 2011 and $10,000 for periods after August 1, 2011. In addition, the maturity date of the Credit Facility and related term loan tranche were extended to December 22, 2013.

~~The~~A ~~agreement~~holder ~~restricts~~of ~~payments~~2005 ~~including~~Notes ~~dividends~~may ~~and~~require ~~Treasury~~the ~~Stock~~Company ~~purchases~~ to norepurchase ~~more~~some ~~than~~or ~~$250~~all of the holder’s 2005 Notes for ~~Treasury~~cash ~~Stock~~(1) upon ~~purchases~~the inoccurrence ~~any~~of ~~one~~a ~~calendar~~fundamental ~~year~~change as defined in the indenture and $(2) also on each of November 1,~~750~~ ~~for~~2012, ~~dividends~~2015 ~~for~~and ~~any~~2020 ~~one~~at ~~calendar year~~a ~~subject~~price equal to ~~adjustments~~100% of upthe toprincipal ~~$400~~amount ~~per~~of ~~year~~the 2005 Notes being repurchased, plus accrued interest, if any, in ~~the~~each case. ofIf applicable, the ~~conversion~~Company ofwill ~~debt~~pay a make-whole premium on 2005 Notes converted in connection with any fundamental change that occurs prior to November 1, 2012. The amount of the make-whole premium, if any, will be based on the Company’s stock ~~per~~price and the ~~terms~~effective date of the fundamental change. The indenture ~~governing~~contains a detailed description of how the ~~2005~~make-whole ~~Notes~~premium will be determined and a table showing the make-whole premium that would apply at various stock prices and fundamental change effective dates based on assumed interest and conversion rates. ~~These~~No ~~restricted~~make-whole ~~payments~~premium ~~can~~will ~~only~~be ~~occur~~paid ~~with~~if ~~prior~~the ~~notice~~price toof the ~~lenders~~Common ~~and~~Stock ~~provided~~on ~~that there~~the effective date of the fundamental change is aless ~~minimum~~than $178.40. Any make-whole premium will be payable in shares of ~~$30,000~~Common Stock (or the consideration into which the Company’s Common Stock has been exchanged in ~~excess~~the ~~availability~~fundamental change) on the conversion date for athe ~~period~~2005 ofNotes ~~thirty~~converted ~~days~~in ~~prior~~connection towith the ~~dividend.~~fundamental change.

~~The~~Convertible ~~Credit~~Senior Agreement includes a material adverse change clause which defines an event of default as a material adverse change in the business, assets or prospects. Company lenders could claim a breach under the material adverse change covenant or the cross-default provisions under the Credit Agreement under certain circumstances. An interpretation of events as a material adverse change or any breach of the covenants in the Credit Agreement or the indentures governing the 2005 Notes ~~and~~ 2006 Notes could cause a default under the Credit Agreement and other debt (including the 2005 Notes and 2006 Notes), which would restrict the Company’s ability to borrow under the Credit Agreement, thereby significantly impacting liquidity. The Credit Agreement was amended to waive any default due to the change in control and as a result of any defaults that have or continue to occur under the Indentures governing the 2005 Notes and 2006 Notes.

11In fiscal year 2011, the Company issued approximately 5,743,001 shares of Common Stock in exchange for $50,760 aggregate principal amount of the 2006 Notes plus accrued interest. As a result, $1,240 of the principal amount remains outstanding as of October 31, 2011.

~~Table~~On November 22, 2006, the Company completed the private placement of ~~Contents~~$54,500 aggregate principal amount of 5.50% Convertible Senior Notes Due 2026 (“2006 Notes”) which raised proceeds of approximately $51,700, net of $2,800 in issuance costs. These costs are being amortized to interest expense over five years.

~~C&D~~The ~~TECHNOLOGIES~~2006 Notes mature on November 1, ~~INC~~2026 and require semi-annual payments at 5.50% per ~~AND~~annum ~~SUBSIDIARIES~~on the principal outstanding. Prior to maturity the holders may convert their 2006 Notes into shares of the Company’s Common Stock under certain circumstances. The initial conversion rate is 8.1113 shares per $1 principal amount of 2006 Notes, which is equivalent to an initial conversion price of approximately $123.35 per share. At any time on and after November 15, 2011, the Company may at its option redeem the 2006 Notes, in whole or in part, for cash, at a redemption price equal to 100% of the principal amount of 2006 Notes to be redeemed, plus any accrued and unpaid interest, including additional interest.

~~NOTES~~A TOholder ~~CONSOLIDATED~~of ~~FINANCIAL~~2006 ~~STATEMENTS~~Notes may require the Company to repurchase some or all of the holder’s 2006 Notes for cash (1) upon the occurrence of a fundamental change as defined in the indenture and (2) also on each of November 1, 2011, 2016 and 2021 at a price equal to 100% of the principal amount of the 2006 Notes being repurchased, plus accrued interest, if any, in each case. If applicable, the Company will pay a make-whole premium on 2006 Notes converted in connection with any fundamental change that occurs prior to November 15, 2011. The amount of the make-whole premium, if any, will be based on the Company’s stock price and the effective date of the fundamental change. The indenture contains a detailed description of how the make-whole premium will be determined and a table showing the make-whole premium that would apply at various stock prices and fundamental change effective dates based on assumed interest and conversion rates. No make-whole premium will be paid if the price of the Common Stock on the effective date of the fundamental change is less than $109.59. Any make-whole premium will be payable in shares of Common Stock (or the consideration into which the Company’s Common Stock has been exchanged in the fundamental change) on the conversion date for the 2006 Notes converted in connection with the fundamental change.

~~(Dollars~~China inLine ~~thousands,~~of ~~except per share data)~~ Credit

In May 2010, the Company obtained a new line of credit loan with a borrowing capacity of up to 82,000 RMB (~~UNAUDITED~~approximately $12,899 US Dollars at October 31, 2011) from a local Chinese bank (the “Chinese LOC”), of which 55,270 RMB (approximately $8,694 US Dollars at October 31, 2011) was funded as of October 31, 2011. The Chinese LOC replaces the previous China line of credit which matured in May 2010. The outstanding borrowings under the Chinese LOC of 55,270 RMB as of October 31, 2011 have scheduled maturities of various amounts over the term of the loan with the final payment due in May 2015. This loan is secured by our Chinese manufacturing facility located in Shanghai, China. In connection with a new receivable financing obtained in June 2011, the borrowing capacity under this credit line was reduced to 56,000 RMB (approximately $8,809 US Dollars at October 31, 2011).

~~Convertible Senior Notes 2005~~ 13

InC&D ~~fiscal year 2011~~TECHNOLOGIES, ~~the Company issued approximately 8,398,237 shares of Common Stock in exchange for $74,186 aggregate principal amount of the 2005 Notes plus accrued interest~~INC. AsAND ~~a result, $736 of the principal amount remains outstanding as of July 30, 2011, net of $78 of unamortized discounts.~~ SUBSIDIARIES

OnNOTES ~~November 21,~~TO ~~2005,~~CONSOLIDATED ~~the~~FINANCIAL Company completed the private placement of $75,000 aggregate principal amount of 5.25% Convertible Senior Notes Due 2025 (“2005 Notes”) which raised proceeds of approximately $72,300, net of $2,700 in issuance costs. These costs are being amortized to interest expense over seven years based on the date that holders can exercise their first put option. STATEMENTS

~~The 2005 Notes mature on November~~ 1,(Dollars ~~2025~~in and require semi-annual interest payments at 5.25% per annum on the principal amount outstanding. Prior to maturity the holders may convert their 2005 Notes into shares of the Company’s Common Stock under certain circumstances. The conversion rate is 4.6326 shares per $1 principal amount of 2005 Notesthousands, ~~which~~except ~~is equivalent to a conversion price of approximately $215.86~~ per share. At any time between November 1, 2010 and November 1, 2012, the Company may at its option redeem the 2005 Notes, in whole or in part, for cash, at a redemption price equal to 100% of the principal amount of 2005 Notes to be redeemed, plus any accrued and unpaid interest, including additional interest, if any, if in the previous 30 consecutive trading days ending on the trading day before the date of mailing of the redemption notice the closing sale price of the Common Stock exceeds 130% of the then effective conversion price of the 2005 Notes for at least 20 trading days. In addition, at any time after November 1, 2012, the Company may redeem the 2005 Notes, in whole or in part, for cash, at a redemption price equal to 100% of the principal amount of the 2005 Notes to be redeemed plus any accrued and unpaid interest, including additional interest, if any. data)

~~A holder of 2005 Notes may require the Company to repurchase some or all of the holder’s 2005 Notes for cash~~ (1UNAUDITED) upon the occurrence of a fundamental change as defined in the indenture and (2) also on each of November 1, 2012, 2015 and 2020 at a price equal to 100% of the principal amount of the 2005 Notes being repurchased, plus accrued interest, if any, in each case. If applicable, the Company will pay a make-whole premium on 2005 Notes converted in connection with any fundamental change that occurs prior to November 1, 2012. The amount of the make-whole premium, if any, will be based on the Company’s stock price and the effective date of the fundamental change. The indenture contains a detailed description of how the make-whole premium will be determined and a table showing the make-whole premium that would apply at various stock prices and fundamental change effective dates based on assumed interest and conversion rates. No make-whole premium will be paid if the price of the Common Stock on the effective date of the fundamental change is less than $178.40. Any make-whole premium will be payable in shares of Common Stock (or the consideration into which the Company’s Common Stock has been exchanged in the fundamental change) on the conversion date for the 2005 Notes converted in connection with the fundamental change.

~~Convertible~~As ~~Senior~~of ~~Notes~~October 31, ~~2006~~2011 approximately $8,694 (in US Dollars at October 31, 2011) and on January 31, 2011 approximately $8,933 (in US Dollars at January 31, 2011) was funded under this facility.

InChina ~~fiscal~~Short-term year 2011, the Company issued approximately 5,743,001 shares of Common Stock in exchange for $50,760 aggregate principal amount of the 2006 Notes plus accrued interest. As a result, $1,240 of the principal amount remains outstanding as of July 31, 2011. Loan

OnIn ~~November 22,~~June ~~2006~~2011, the Company ~~completed~~obtained ~~the private~~a ~~placement~~short term loan of ~~$54~~26,~~500~~000 ~~aggregate~~RMB ~~principal~~(approximately ~~amount~~$4,090 ofin ~~5.50%~~US ~~Convertible~~Dollars ~~Senior~~at ~~Notes~~October 31, ~~Due~~2011) ~~2026~~with 9,310 RMB (~~“2006~~approximately ~~Notes”~~$1,464 US Dollars at October 31, 2011) ~~which~~due ~~raised~~in ~~proceeds~~November of2011 ~~approximately~~with ~~$51~~the remaining 16,~~700,~~690 ~~net~~RMB of(approximately $2,~~800~~625 US Dollars at October 31, 2011) payable in ~~issuance~~December ~~costs~~2011. ~~These~~This ~~costs~~loan ~~are~~is ~~being~~secured ~~amortized~~by tocertain ~~interest expense~~accounts ~~over~~receivable ~~five~~balances ~~years.~~recorded by our Shanghai, China facility.

~~The~~Subsequent 2006 Notes mature on November 1, 2026 and require semi-annual payments at 5.50% per annum on the principal outstanding. Prior to maturity the holders may convert their 2006 Notes into shares of the Company’s Common Stock under certain circumstances. The initial conversion rate is 8.1113 shares per $1 principal amount of 2006 Notes, which is equivalent to an initial conversion price of approximately $123.35 per share. At any time on and after November 15, 2011, the Company may at its option redeem the 2006 Notes, in whole or in part, for cash, at a redemption price equal to 100% of the principal amount of 2006 Notes to be redeemed, plus any accrued and unpaid interest, including additional interest. Events

12On November 15, 2011, the 2006 Notes, described above, were repurchased by the Company at the face value of the Notes of $1,240 plus accrued interest. As a result, these notes were deemed to carry a fair value in Note 10, Financial Instruments, equal to the face value.

~~Table~~On November 4, 2011, the 9,310 RMB portion of ~~Contents~~the China Short-term Loan, described above, was paid and refinanced with a 10,000 RMB (approximately $1,573 US Dollars at October 31, 2011) payable on April 20, 2012 at an interest rate of 7.02%. This loan is also secured by accounts receivable balances recorded by our Shanghai, China facility.

~~C&D~~6. ~~TECHNOLOGIES,~~STATEMENT ~~INC.~~OF ~~AND~~CHANGES ~~SUBSIDIARIES~~IN EQUITY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

					Additional								Other								Total
	Common Stock				Paid-In		Treasury Stock						Comprehensive			Accumulated			Noncontrolling		Stockholders'
	Shares		Amount		Capital		Shares			Amount			Income /(Loss)			Deficit			Interest		Equity
BALANCE AT
JANUARY 31, 2011		15,306,915	$	153	$	202,350		(110,373	)	$	(39,200	)	$	(43,489	) )	$	(38,480	)	$	12,198	$	93,532
Total comprehensive loss:
Fractional shares issued		21
Net loss																	(5,648	)		221		(5,427	)
Foreign currency translation adjustment														994						476		1,470
Unrealized loss on derivative instruments														(1,950	)							(1,950	)
Pension liability
adjustment														2,416								2,416
Total comprehensive income (loss):														1,460			(5,648	)		697		(3,491	)
Other changes in equity:
Share based compensation expense						974																974
BALANCE AT
OCTOBER 31, 2011		15,306,936	$	153	$	203,324		(110,373	)	$	(39,200	)	$	(42,029	)	$	(44,128	)	$	12,895	$	91,015

~~(Dollars~~7. inINCOME ~~thousands, except per share data)~~ TAXES

(UNAUDITED)

	Nine months ended
	October 31,
	2011			2010
Provision (benefit) for income taxes	$	512		$	(13,239	)
Effective income tax rate		(10.4	)%		17.5	%

A holder of 2006 Notes may require the Company to repurchase some or all of the holder’s 2006 Notes for cash (1) upon the occurrence of a fundamental change as defined in the indenture and (2) also on each of November 1, 2011, 2016 and 2021 at a price equal to 100% of the principal amount of the 2006 Notes being repurchased, plus accrued interest, if any, in each case. If applicable, the Company will pay a make-whole premium on 2006 Notes converted in connection with any fundamental change that occurs prior to November 15, 2011. The amount of the make-whole premium, if any, will be based on the Company’s stock price and the effective date of the fundamental change. The indenture contains a detailed description of how the make-whole premium will be determined and a table showing the make-whole premium that would apply at various stock prices and fundamental change effective dates based on assumed interest and conversion rates. No make-whole premium will be paid if the price of the Common Stock on the effective date of the fundamental change is less than $109.59. Any make-whole premium will be payable in shares of Common Stock (or the consideration into which the Company’s Common Stock has been exchanged in the fundamental change) on the conversion date for the 2006 Notes converted in connection with the fundamental change. 14

~~China~~C&D ~~Line~~TECHNOLOGIES, ofINC. ~~Credit~~AND SUBSIDIARIES

InNOTES ~~May~~TO ~~2010,~~CONSOLIDATED ~~the~~FINANCIAL Company obtained a new line of credit loan with a borrowing capacity of up to 82,000 RMB (approximately $12,726 US Dollars at July 31, 2011) from a local Chinese bank (the “Chinese LOC”), of which 55,270 RMB (approximately $8,578 US Dollars at July 31, 2011) was funded as of July 31, 2011. The Chinese LOC replaces the previous China line of credit which matured in May 2010. The outstanding borrowings under the Chinese LOC of 55,270 RMB as of July 31, 2011 have scheduled maturities of various amounts over the term of the loan with the final payment due in May 2015. This loan is secured by our Chinese manufacturing facility located in Shanghai, China. In connection with a new receivable financing obtained in June 2011, the borrowing capacity under this credit line was reduced to 56,000 RMB (approximately $8,691 US Dollars at July 31, 2011). STATEMENTS

~~As of July~~ ~~31, 2011 approximately $8,578~~ (~~in US~~ Dollars ~~at July 31, 2011) and on January 31, 2011 approximately $8,933 (~~in ~~US Dollars at January 31~~thousands, ~~2011)~~except ~~was~~per ~~funded~~share ~~under this facility.~~ data)

~~China Short-term Loan~~ (UNAUDITED)

InEffective ~~June~~tax ~~2011,~~rates ~~the~~were ~~Company~~(10.4%) ~~obtained~~and a17.5% ~~short~~for ~~term~~the ~~loan~~nine ofmonths 26ended October 31,~~000~~ ~~RMB~~2011 ~~(approximately~~and $42010,~~035~~ inrespectively. USTax ~~Dollars~~expense/benefit atfor ~~July~~ the nine months ended October 31, 2011) ~~with~~and ~~9,310~~2010 ~~RMB~~is ~~(approximately~~due ~~$1,445~~to UStax ~~Dollars~~expense atin ~~July 31,~~certain ~~2011)~~profitable ~~due~~foreign subsidiaries and no tax benefit recognized in ~~November~~ ~~2011~~certain ~~with~~jurisdictions where the ~~remaining~~Company ~~16,690~~incurred ~~RMB~~a ~~(approximately~~loss. $2In addition,~~590~~ USthe ~~Dollars~~tax atbenefit ~~July~~ for the nine months ended October 31, ~~2011)~~2010 ~~payable~~resulted when the Company recorded a Goodwill Impairment charge in ~~December~~the second quarter of fiscal year 2011 which reversed the deferred tax liability. ~~This~~There ~~loan~~was isno ~~secured~~significant byimpact ~~certain~~to ~~accounts~~the ~~receivable~~tax ~~balances~~expense ~~recorded~~related byto ~~our~~uncertain ~~Shanghai,~~tax ~~China~~positions ~~facility.~~or the interest on uncertain tax positions.

6Generally, accounting standards require companies to provide for income taxes each quarter based on their estimate of the effective tax rate for the full year. ~~STATEMENT~~The OFauthoritative ~~CHANGES~~guidance INfor ~~EQUITY~~accounting for income taxes allows use of the discrete method when, in certain situations, the actual interim period effective tax rate may be used if it provides a better estimate of income tax expense. Due to the Company’s losses in the US, the full valuation allowance in the US, and the relatively small amount of projected US income, it is the Company’s position that the discrete method provides a more accurate estimate of income tax expense for domestic taxes and therefore domestic income tax expense for the current quarter has been presented using that method. Taxes on international earnings continue to be calculated using an estimate of the effective tax rate for the full year.

					Additional								Other								Total
	Common Stock				Paid-In		Treasury Stock						Comprehensive			Accumulated			Noncontrolling		Stockholders’
	Shares		Amount		Capital		Shares			Amount			Income /(Loss)			Deficit			Interest		Equity
BALANCE AT JANUARY 31, 2011		15,306,915	$	153	$	202,350		(110,373	)	$	(39,200	)	$	(43,489	)	$	(38,480	)	$	12,198	$	93,532
Total comprehensive loss:
Fractional shares issued		21
Net loss																	(1,754	)		292		(1,462	)
Foreign currency translation adjustment														765						307		1,072
Unrealized gain on derivative instruments														(295	)							(295	)
Pension liability adjustment														1,611								1,611
Total comprehensive income (loss):														2,081			(1,754	)		599		926
Other changes in equity:
Share based compensation expense						596																596
BALANCE AT JULY 31, 2011		15,306,936	$	153	$	202,946		(110,373	)	$	(39,200	)	$	(41,408	)	$	(40,234	)	$	12,797	$	95,054

The Company has recently updated its analysis regarding the potential future use of federal and state net operating loss carryforwards, which it has previously disclosed are expected to be substantially restricted as a result of changes in ownership as defined by the rules and limitations set out in Section 382 of the Internal Revenue Code. Based on the analysis of both the December 2010 debt for equity exchange as well as earlier ownership changes, the Company has concluded that there are no material loss carryforwards available to the Company. This assessment has no impact on the net deferred tax assets recorded by the Company as a full valuation allowance has previously been established against these net operating losses.

138. EARNINGS PER SHARE

~~Table~~Basic earnings per common share was computed using net loss and the weighted average number of ~~Contents~~common shares outstanding during the period. Diluted earnings per common share was computed using net loss 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.

~~C&D~~The ~~TECHNOLOGIES,~~following ~~INC.~~table ~~AND~~sets ~~SUBSIDIARIES~~forth the computation of basic and diluted losses per common share:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

	Three months ended						Nine months ended
	October 31,						October 31,
	2011			2010			2011			2010
Numerator:
Numerator for basic losses per common share	$	(3,894	)	$	(6,445	)	$	(5,648	)	$	(62,729	)
Effect of dilutive securities:
Income related to deferred compensation plan		0			(123	)		0			0
Numerator for diluted losses per common share	$	(3,894	)	$	(6,568	)	$	(5,648	)	$	(62,729	)

Denominator:
Denominator for basic earnings per common share- weighted average common shares		15,196,563			1,039,009			15,196,563			1,036,330

Effect of dilutive securities:
Shares issuable under deferred compensation arrangements		0			6,611			0			0
Dilutive potential common shares		0			6,611			0			0
Denominator for diluted earnings per common share- adjusted weighted average common shares and assumed conversions		15,196,563			1,045,620			15,196,563			1,036,330
Basic losses per common share	$	(0.26	)	$	(6.20	)	$	(0.37	)	$	(60.53	)
Diluted losses from common share	$	(0.26	)	$	(6.28	)	$	(0.37	)	$	(60.53	)

~~(Dollars in thousands, except per share data)~~ 15

~~(UNAUDITED)~~C&D TECHNOLOGIES, INC. AND SUBSIDIARIES

7.NOTES ~~INCOME~~TO ~~TAXES~~CONSOLIDATED FINANCIAL STATEMENTS

	Six months endedJuly 31,
	2011			2010
Provision for income taxes	$	235		$	(13,400	)
Effective income tax rate		(19.2	%)		19.2	%

(Dollars in thousands, except per share data)

~~Effective tax rates were~~ (~~19.2%~~UNAUDITED) and 19.2% for the six months ended July 31, 2011 and 2010, respectively. Tax expense for the six months ended July 31, 2011 and 2010 is due to tax expense in certain profitable foreign subsidiaries and no tax benefit recognized in certain jurisdictions where the Company incurred a loss. In addition, the tax benefit for the six months ended July 31, 2010 resulted when the Company recorded a Goodwill Impairment charge in the second quarter of fiscal year 2011 which reversed the deferred tax liability. There was no significant impact to the tax expense related to uncertain tax positions or the interest on uncertain tax positions.

~~Generally,~~The ~~accounting~~Company ~~standards require~~excluded ~~companies~~dilutive tosecurities ~~provide~~of ~~for~~13,829 ~~income~~and ~~taxes~~769,238 ~~each~~issuable ~~quarter~~in ~~based~~connection onwith ~~their~~convertible ~~estimate~~bonds offrom the ~~effective~~diluted ~~tax~~income ~~rate~~per ~~for~~share ~~the~~calculation ~~full year. The authoritative guidance~~ for ~~accounting~~the ~~for~~three ~~income~~and ~~taxes~~nine ~~allows~~months ~~use~~ended ofOctober ~~the~~31, ~~discrete~~2011 ~~method~~and ~~when~~2010, ~~in certain situations~~respectively, ~~the~~ ~~actual~~because ~~interim~~their ~~period~~effect ~~effective~~would ~~tax rate may~~ be ~~used if it provides a better estimate of income tax expense~~anti-dilutive. ~~Due~~The toabove ~~the~~computation ~~Company’s~~also ~~losses~~excludes inall ~~the~~anti-dilutive USoptions, ~~the~~restricted ~~full~~stock ~~valuation~~awards ~~allowance in the US,~~ and ~~the~~shares ~~relatively~~issuable ~~small~~under ~~amount~~deferred ofcompensation ~~projected US income~~arrangements, itwhich isamounted ~~the~~to ~~Company’s~~1,252,885 ~~position~~shares ~~that~~for the ~~discrete~~three ~~method~~and ~~provides~~nine amonths ~~more~~ended ~~accurate~~October ~~estimate~~31, of2011 ~~income~~and ~~tax~~101,894 ~~expense for domestic taxes~~ and ~~therefore~~101,357 ~~domestic~~shares ~~income tax expense~~ for the ~~current~~three ~~quarter~~and ~~has~~nine ~~been~~months ~~presented~~ended ~~using~~October ~~that method. Taxes~~31, on2010, ~~international earnings continue to be calculated using an estimate of the effective tax rate for the full year~~respectively.

89. ~~EARNINGS~~CONTINGENT ~~PER SHARE~~LIABILITIES

Basic earnings per common share was computed using net loss and the weighted average number of common shares outstanding during the period. Diluted earnings per common share was computed using net loss 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. Legal

The ~~following~~Company ~~table~~is ~~sets~~involved ~~forth~~in ordinary, routine litigation incidental to the ~~computation~~conduct of ~~basic and~~the ~~diluted~~Company’s ~~losses~~business. ~~per~~Except ~~common~~for ~~share:~~the two matters referenced below, none of this litigation, individually or in the aggregate, is material or is expected to be material to our business, financial condition or results of operations in any year. See Business - Environmental Regulations in the Form 10-K filed on May 2, 2011 for the fiscal year ended January 31, 2011 for a description of certain legal proceedings in which we are involved.

	Three months ended						Six months ended
	July 31,						July 31,
	2011			2010			2011			2010
Numerator:
Numerator for basic loss per common share	($	1,129	)	$	(50,680	)	($	1,754	)	$	(56,284	)
Numerator for diluted loss per common share	($	1,129	)	$	(50,680	)	($	1,754	)	$	(56,284	)
Denominator:
Denominator for basic earnings per common share- weighted average common shares		15,196,563			1,036,132			15,196,563			1,034,968
Effect of dilutive securities:
Denominator for diluted earnings per common share- adjusted weighted average common shares and assumed conversions		15,196,563			1,036,132			15,196,563			1,034,968
Basic loss per common share	($	0.07	)	$	(48.91	)	($	0.12	)	$	(54.38	)
Diluted loss from common share	($	0.07	)	$	(48.91	)	($	0.12	)	$	(54.38	)

In April and August 2008, pursuant to a Purchase Agreement (the “Murata Purchase Agreement”) dated June 19, 2007 between Murata Manufacturing Co. Ltd. (“Murata Manufacturing”) and C&D, Murata Electronics, North America, Inc. (“Murata Electronics”) as assignee of Murata Manufacturing Co. Ltd. provided to C&D written notices of a claim for indemnification under the Murata Purchase Agreement seeking indemnity and defense costs relating to patent infringement claims asserted by SynQor Inc. against Murata Electronics, Murata Manufacturing and the former C&D companies now known as Murata Power Solutions, Inc. (“MPS”), and numerous other defendant parties. In January 2011, Murata Electronics provided another notice, stating that a judgment had been entered against MPS in the amount of approximately $18,000 in the patent infringement litigation brought by SynQor, Inc. and that MPS had incurred legal fees of approximately $2,000, all for which MPS and Murata Electronics were seeking indemnification and payment under the Murata Purchase Agreement. On August 3, 2011, Murata Electronics and MPS filed a lawsuit against C&D in Delaware Chancery Court (the “Indemnification Lawsuit”), seeking two remedies: (i) specific performance of their alleged indemnity rights under the Murata Purchase Agreement for the approximately $2,000 in legal fees incurred to date by MPS in the litigation with SynQor, Inc. and (ii) a declaratory judgment that Murata Electronics and MPS are entitled to indemnity from C&D for any final, non-appealable judgment in which MPS is found to have infringed SynQor, Inc.’s patents. In their complaint, Murata Electronics and MPS do not specify the amount of indemnification they are seeking. The damages awarded against MPS in the litigation with SynQor, Inc. are currently approximately $20,500. The Murata Purchase Agreement contains a cap of $8,500 on C&D’s indemnity obligation for losses resulting from a breach of its representations and warranties. C&D has filed a motion to dismiss the Indemnification Lawsuit in its initial brief in support of that motion. At this time, C&D does not have sufficient information concerning the lawsuit between Murata Electronics, MPS and SynQor, Inc. to assess the likelihood of C&D’s liability or to make a reasonable estimate of the amount of any such liability. On December 6, 2011, Murata voluntarily dismissed its Indemnification Lawsuit complaint against C&D without prejudice.

14Beginning on June 29, 2011, following the announcement on June 16, 2011 by Angelo Gordon & Co., L.P. of its proposal to acquire the outstanding shares of common stock of the Company not owned by it or its affiliates for cash (the “Merger”), three putative stockholder class action lawsuits were filed in the Delaware Court of Chancery, referred to herein as the “Delaware Actions,” and another putative stockholder class action lawsuit was filed in the Court of Common Pleas of Montgomery County, Pennsylvania, referred to herein as the “Pennsylvania Action,” challenging the proposed Merger. On August 19, 2011, counsel to the plaintiffs in the Delaware Actions submitted a proposed order to the court seeking consolidation of the Delaware Actions into a single action, referred to herein as the “Consolidated Delaware Action.” On September 8, 2011, the Delaware Court of Chancery granted that request for consolidation. On October 11, 2011, an amended class action complaint was filed in the Consolidated Delaware Action, naming as defendants C&D, each current member of the C&D Board and Angel Holdings LLC (“Acquiror”), an affiliate of Angelo Gordon & Co., L.P. On October 25, a fourth class action complaint was filed in the Delaware Court of Chancery. That action is subject to the Delaware Court of Chancery’s August 19 consolidation order governing the consolidation of any related newly filed case with the Consolidated Delaware Action.

~~Table~~On October 26, 2011, a consolidated second amended class action complaint was filed in the Consolidated Delaware Action. The consolidated second amended class action complaint asserts breach of ~~Contents~~fiduciary duty claims against the current members of the C&D Board and Angelo Gordon & Co., L.P., and aiding and abetting breach of fiduciary duty claims against C&D, Angelo Gordon & Co., L.P., Acquiror and merger subsidiary premised principally on allegations that: (i) the individual defendants and the Acquiror breached their fiduciary duties under Delaware law because the Merger Agreement was executed without meaningful input from C&D’s public stockholders, (ii) the consideration the Acquiror is proposing to provide to C&D’s public stockholders for their Common Stock is inadequate, and (iii) the Form PRE 14C (filed by C&D on October 19, 2011) failed to disclose material information. Plaintiffs claim that the Form PRE 14C failed to disclose material information about the selection and appointment of the members of the Special Committee of the Board of Directors formed to consider the proposed merger (the “Special Committee”), the criteria used to select the Special Committee’s financial advisor (Perella Weinberg), certain aspects of the financial analysis performed by Perella Weinberg, and the sale and negotiation process. In their consolidated second amended class action complaint, Plaintiffs sought to preliminarily and permanently enjoin the Merger (or if the Merger is consummated prior to any final judgment to rescind the Merger or receive rescissory damages), a declaration that defendants have violated their fiduciary duties, and an order directing defendants to exercise their fiduciary duties to obtain a transaction that is in the best interests of the Company’s stockholders. Plaintiffs further requested the costs of the action, including reasonable attorneys’ fees, and such other equitable relief as may be just and proper.

~~C&D~~At ~~TECHNOLOGIES~~the same time that the consolidated second amended class action complaint was filed, ~~INC~~Plaintiffs moved for a preliminary injunction to enjoin the Merger and for expedition of the proceedings. ~~AND~~On ~~SUBSIDIARIES~~November 1, 2011, Defendants filed an opposition to Plaintiffs’ request for expedited proceedings, arguing that Plaintiffs’ disclosure claims were not colorable and did not provide a basis for expedition. On November 3, 2011, the Delaware Court of Chancery denied Plaintiffs’ motion for expedition of the proceedings. In light of the Court’s November 3, 2011 ruling, Plaintiffs have submitted a proposed amended order of consolidation and appointment of co-lead counsel. Pursuant to that proposed amended order, which defendants do not oppose, defendants shall answer or otherwise move with respect to the consolidated second amended class action complaint within 45 days of the closing of the Merger.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~ Environmental

The Company and certain of its key suppliers are 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 (~~Dollars~~i) requirements inrelating ~~thousands~~to the handling, ~~except~~storage, ~~per~~use ~~share~~and ~~data~~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 processes.

Notwithstanding the Company’s efforts to maintain compliance with applicable environmental requirements, if we fail to comply with such requirements or 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 (~~UNAUDITED~~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, and the Company’s ability to operate or expand its manufacturing facilities could be restricted, which could have a material adverse effect on the Company’s business, financial condition, or results of operations.

The Company has excluded dilutive securities of 13,829 and 769,238 issuable in connection with convertible bonds from the diluted income per share calculation for the three and six months ended July 31, 2011 and 2010, respectively, because their effect would be anti-dilutive. The above computation also excludes all anti-dilutive options, restricted stock awards and shares issuable under deferred compensation arrangements, which amounted to 1,254,444 shares for the three and six months ended July 31, 2011, and 104,541 and 104,533 shares for the three and six months ended July 31, 2010, respectively. 16

9.C&D ~~COMMITMENTS~~TECHNOLOGIES, INC. AND ~~CONTINGENCIES~~SUBSIDIARIES

~~Legal~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~The~~ (Dollars ~~Company is involved~~ in ~~ordinary~~thousands, ~~routine~~except ~~litigation incidental~~per toshare the conduct of the Company’s business. Except for the matter referenced in the next paragraph below, none of this litigation, individually or in the aggregate, is material or is expected to be material to our business, financial condition or results of operations in any year. See Business - Environmental Regulations in the Form 10-K filed on May 2, 2011 for the fiscal year ended January 31, 2011 for a description of certain legal proceedings in which we are involved. data)

~~In April and August 2008, pursuant to a Purchase Agreement~~ (~~the “Murata Purchase Agreement”~~UNAUDITED) dated June 19, 2007 between Murata Manufacturing Co. Ltd. (“Murata Manufacturing”) and C&D, Murata Electronics, North America, Inc. (“Murata Electronics”) as assignee of Murata Manufacturing Co. Ltd. provided to C&D written notices of a claim for indemnification under the Murata Purchase Agreement seeking indemnity and defense costs relating to patent infringement claims asserted by SynQor Inc. against Murata Electronics, Murata Manufacturing and the former C&D companies now known as Murata Power Solutions, Inc. (“MPS”), and numerous other defendant parties. In January 2011, Murata Electronics provided another notice, stating that a judgment had been entered against MPS in the amount of approximately $18,000 in the patent infringement litigation brought by SynQor, Inc. and that MPS had incurred legal fees of approximately $2,000, all for which MPS and Murata Electronics were seeking indemnification and payment under the Murata Purchase Agreement. On August 3, 2011, Murata Electronics and MPS filed a lawsuit against C&D in Delaware Chancery Court, seeking two remedies: (i) specific performance of their alleged indemnity rights under the Murata Purchase Agreement for the approximately $2,000 in legal fees incurred to date by MPS in the litigation with SynQor, Inc. and (ii) a declaratory judgment that Murata Electronics and MPS are entitled to indemnity from C&D for any final, non-appealable judgment in which MPS is found to have infringed SynQor, Inc.’s patents. In their complaint, Murata Electronics and MPS do not specify the amount of indemnification they are seeking. The damages awarded against MPS in the litigation with SynQor, Inc. are currently approximately $20,500. The Murata Purchase Agreement contains a cap of $8,500 on C&D’s indemnity obligation for losses resulting from a breach of its representations and warranties. At this time, C&D does not have sufficient information concerning the lawsuit between Murata Electronics, MPS and SynQor, Inc. to assess the likelihood of C&D’s liability or to make a reasonable estimate of the amount of any such liability.

~~Environmental~~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.

~~The~~Pursuant ~~Company~~to ~~and~~a ~~certain~~1996 ofSite ~~its~~Participation ~~key~~Agreement, ~~suppliers~~as ~~are~~later ~~subject~~amended toin ~~extensive~~2000, the Company and ~~evolving~~several ~~environmental~~other ~~laws~~potentially ~~and~~responsible ~~regulations~~parties ~~regarding~~(“PRP”s) ~~the~~agreed ~~clean-up~~upon ~~and~~a ~~protection~~cost sharing allocation for performance of remedial activities required by the ~~environment,~~United ~~worker~~States ~~health~~EPA ~~and~~Administrative ~~safety~~Order Consent Decree entered for the design and remediation phases at the ~~protection~~former ofNL ~~third~~Industries, ~~parties~~Inc. ~~These~~(“NL”) ~~laws~~site ~~and~~in ~~regulations~~Pedricktown, ~~include~~New Jersey, ~~but~~Third ~~are~~Party ~~not~~Facility. ~~limited~~In toApril ~~(i) requirements~~2002, ~~relating~~one toof the ~~handling~~original PRPs, ~~storage~~Exide Technologies (“Exide”), ~~use~~filed ~~and~~for ~~disposal~~relief ofunder ~~lead~~Chapter ~~and~~11 ~~other~~of ~~hazardous~~Title ~~materials~~11 inof ~~manufacturing~~the ~~processes~~United ~~and~~States ~~solid~~Code. ~~wastes; (ii) record~~In ~~keeping~~August ~~and~~2002, ~~periodic~~Exide ~~reporting~~notified tothe ~~governmental~~other ~~entities~~PRPs ~~regarding~~that ~~the~~it ~~use~~would ~~and~~no ~~disposal~~longer ofbe ~~hazardous~~taking ~~materials;~~an ~~(iii) monitoring~~active ~~and~~role ~~permitting~~in ofany ~~air~~further ~~emissions~~action ~~and~~at ~~water~~the ~~discharge;~~site and ~~(iv) monitoring~~discontinued ~~worker~~its ~~exposure~~financial ~~to hazardous~~participation, ~~substances~~resulting in ~~the~~a ~~workplace~~pro ~~and~~rata ~~protecting~~increase ~~workers~~in ~~from~~the ~~impermissible~~cost ~~exposure~~participation toof ~~hazardous~~the ~~substances~~other PRPs, including ~~lead~~the Company, ~~used~~for inwhich ~~our~~the ~~manufacturing~~Company’s ~~processes~~allocated share rose from 5.25% to 7.79%.

~~Notwithstanding~~In ~~the~~August ~~Company’s efforts to maintain compliance with applicable environmental requirements~~2002, ifthe weCompany ~~fail~~was tonotified ~~comply~~of ~~with~~its ~~such~~involvement ~~requirements~~as ora ifPRP ~~injury~~at orNL’s ~~damage to persons or the environment arises from hazardous substances used~~Atlanta, ~~generated~~Northside orDrive ~~disposed~~Superfund ofsite. inNL ~~the~~and ~~conduct~~Norfolk ofSouthern ~~the~~Railway Company’s ~~business~~have ~~(or~~been ~~that~~conducting of a ~~predecessor~~removal toaction ~~the~~on ~~extent~~ the ~~Company is not indemnified therefor)~~site, ~~the~~preliminary ~~Company~~to ~~may~~remediation. beThe ~~held liable for certain damages~~Company, ~~the~~along ~~costs~~with ofother ~~investigation and remediation~~PRPs, ~~and~~continues ~~fines and penalties, and the Company’s ability~~ to ~~operate~~negotiate orwith ~~expand~~NL ~~its~~at ~~manufacturing~~this ~~facilities~~site ~~could~~regarding ~~be restricted, which could have a material adverse effect on~~ the Company’s ~~business,~~ ~~financial~~share ~~condition,~~of orthe ~~results~~allocated ~~of operations~~liability.

~~C&D~~The isCompany ~~participating~~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 ~~investigation~~existence of soil and groundwater contamination at ~~several~~ ~~lead~~the ~~smelting~~Huguenot, ~~facilities~~New York, facility, which is expected to require expenditures for further investigation and remediation. Additionally, the site is listed by the New York State Department of Environmental Conservation (“~~Third~~NYSDEC”) ~~Party~~on ~~Facilities~~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”) tofor 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 ~~C&D~~the ~~allegedly~~parties ~~made~~have ~~scrap~~conducted ~~lead~~in ~~shipments~~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 ~~reclamation~~a ~~prior~~cost tosharing arrangement with Avnet, Inc. bearing a majority of the ~~date~~future costs associated with the investigation and remediation of the ~~acquisition.~~lagoon-related contamination.

~~Pursuant~~C&D, totogether awith ~~1996~~Johnson ~~Site~~Controls, ~~Participation~~Inc. ~~Agreement~~(“JCI”), asis ~~later~~conducting ~~amended~~an assessment and formulating a work plan for remediation of contamination at and near its facility in ~~2000~~Milwaukee, Wisconsin. The majority of the ~~Company~~on-site ~~and~~soil ~~several~~remediation ~~other~~portion ~~potentially~~of this project was completed as of October 2001. Under the purchase agreement with JCI, C&D is responsible ~~parties~~ for (~~“PRP”s~~i) one-half ~~agreed~~of ~~upon~~the cost of the on-site assessment and remediation, with a ~~cost~~maximum ~~sharing~~liability ~~allocation~~of $1,750 (ii) any environmental liabilities at the facility that are not remediated as part of the ongoing clean-up project and (iii) environmental liabilities for ~~performance~~any new claims made after the fifth anniversary of ~~remedial~~the ~~activities~~closing, ~~required~~i.e. byMarch 2004, that arise from migration from a pre-closing condition at the ~~United~~Milwaukee ~~States~~facility ~~EPA~~to ~~Administrative~~locations ~~Order~~other ~~Consent~~than ~~Decree~~the ~~entered~~Milwaukee facility, but specifically excluding liabilities relating to pre-closing off-site disposal. JCI retained the environmental liability for the ~~design~~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 share with JCI the allocation of costs for assessment and remediation of certain off-site chlorinated volatile organic compounds in groundwater.

15 17

~~Table~~C&D ofTECHNOLOGIES, ~~Contents~~INC. AND SUBSIDIARIES

~~C&D~~NOTES ~~TECHNOLOGIES,~~TO ~~INC.~~CONSOLIDATED ~~AND~~FINANCIAL ~~SUBSIDIARIES~~ STATEMENTS

~~NOTES~~ (Dollars TOin ~~CONSOLIDATED~~thousands, ~~FINANCIAL~~except ~~STATEMENTS~~per share data)

(~~Dollars in thousands, except per share data~~UNAUDITED)

~~(UNAUDITED)~~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. In 2009, EPA determined that the impact to the two city wells was from sources unrelated to the Company’s property. The EPA also 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. The Company’s investigation revealed lead contamination in one area and chlorinated solvent contamination in another area, both in soil and groundwater. The Company has submitted work plans to the EPA for remediation of the lead and chlorinated solvent contamination. The Company has timely complied with all investigative and remedial actions required by EPA.

~~phases~~The Company has conducted site investigations at ~~the~~its ~~former~~Conyers, NLGeorgia ~~Industries~~facility, ~~Inc.~~and ~~(“NL”)~~has ~~site~~detected chlorinated solvents in ~~Pedricktown,~~groundwater ~~New~~and ~~Jersey,~~lead ~~Third~~in ~~Party~~soil ~~Facility~~both on-site and off-site. InThe ~~April~~Company ~~2002~~has recently initiated further assessment of groundwater conditions, ~~one~~temporarily suspending remediation of the ~~original~~chlorinated ~~PRPs,~~solvents ~~Exide~~which ~~Technologies~~had ~~(“Exide”), filed~~been ~~for~~initiated ~~relief~~in ~~under~~accordance ~~Chapter~~with 11a Corrective Action Plan approved by the Georgia Department of ~~Title~~Natural 11Resources in January 2007. A modified Corrective Action Plan has been submitted to the Georgia Department of Natural Resources. Additionally, the ~~United~~Company ~~States~~has ~~Code~~completed remediation of lead impacted soils identified in the site investigations. In ~~August~~September ~~2002~~2005, ~~Exide~~an ~~notified~~adjoining landowner filed suit against the Company alleging, among other ~~PRPs~~things, that it ~~would~~was noallowing ~~longer~~lead becontaminated ~~taking~~stormwater anrunoff ~~active~~to ~~role~~leave inits ~~any~~property ~~further~~and ~~action~~contaminate at the ~~site~~adjoining ~~and~~property. ~~discontinued~~In ~~its~~November ~~financial participation~~2008, ~~resulting~~ inthe parties entered into a ~~pro~~final ~~rata~~settlement ~~increase~~agreement, inpursuant to which the ~~cost~~Company ~~participation~~agreed ofto ~~the~~assess ~~other~~and ~~PRPs,~~remediate ~~including~~any contamination on the ~~Company,~~adjoining ~~for~~property ~~which~~due to the Company’s ~~allocated~~operations ~~share~~as ~~rose~~required ~~from~~by ~~5.25%~~Georgia toDepartment 7of Natural Resources and with the concurrence of the adjoining landowner.~~79%.~~ The Company has timely complied with all orders by the Georgia Department of Natural Resources.

InThe ~~August~~Company ~~2002,~~accrues for liabilities in its consolidated financial statements and periodically reevaluates the ~~Company~~amounts ~~was~~for ~~notified~~these liabilities in view of ~~its~~the ~~involvement~~most ascurrent ainformation ~~PRP~~available atin ~~NL’s~~accordance ~~Atlanta,~~with ~~Northside~~accounting ~~Drive~~guidance ~~Superfund~~for ~~site~~contingencies. NLAs of October 31, 2011, accrued environmental liabilities totaled $2,413 consisting of $1,789 in other current liabilities and ~~Norfolk~~$624 ~~Southern~~in ~~Railway~~other liabilities. Based on currently available information, the Company believes that appropriate accruals have been ~~conducting~~established awith ~~removal~~respect ~~action~~to on the ~~site,~~foregoing ~~preliminary~~contingent toliabilities ~~remediation.~~and ~~The~~that ~~Company,~~they ~~along~~are ~~with~~not ~~other~~expected ~~PRPs,~~to ~~continues~~have toa ~~negotiate~~material ~~with~~adverse NLeffect aton ~~this~~its ~~site~~business, ~~regarding~~financial ~~the~~condition ~~Company’s~~or ~~share~~results of ~~the allocated liability~~operations.

~~The~~Purchase 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. Additionally, 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 have conducted 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, Inc. bearing a majority of the future costs associated with the investigation and remediation of the lagoon-related contamination. Commitments

~~C&D,~~Periodically ~~together~~the ~~with~~Company ~~Johnson~~enters ~~Controls,~~into ~~Inc.~~purchase ~~(“JCI”),~~commitments ispertaining ~~conducting~~to anthe ~~assessment~~purchase ~~and formulating a work plan for remediation~~ of ~~contamination~~certain atraw ~~and~~materials ~~near~~with ~~its~~various ~~facility in Milwaukee, Wisconsin~~suppliers. The ~~majority~~Company ofhas ~~the~~entered ~~on-site~~into ~~soil~~various ~~remediation~~lead ~~portion~~commitments ofcontracts ~~this~~some ~~project~~expiring ~~was~~within ~~completed~~a asfew ofmonths ~~October~~while ~~2001.~~others ~~Under~~continue ~~the~~into ~~purchase~~April ~~agreement~~2012. ~~with~~The ~~JCI,~~estimated ~~C&D~~commitments isare ~~responsible~~approximately ~~for (i) one-half of the cost of the on-site assessment and remediation, with a maximum liability of~~ $114,~~750~~000 ~~(ii) any~~in ~~environmental liabilities at~~ the ~~facility~~twelve ~~that~~months ~~are~~ended ~~not remediated as part of the ongoing clean-up project and (iii)~~October ~~environmental liabilities for any new claims made after the fifth anniversary of the closing~~31, i2012.e. ~~March~~The ~~2004,~~Company ~~that~~has ~~arise~~also ~~from~~committed ~~migration~~to ~~from~~purchase anew ~~pre-closing~~machinery ~~condition~~ at ~~the~~an ~~Milwaukee~~estimated ~~facility~~cost to locations other than the Milwaukee facility, but specifically excluding liabilities relating to pre-closing off-site disposal. JCI retained the environmental liability for the off-site assessment and remediation of ~~lead.~~$352 ~~In March 2004, the Company entered into an agreement with JCI~~ to ~~continue~~be toinstalled ~~share~~within ~~responsibility as set forth in~~ the ~~original~~next ~~purchase agreement~~year. ~~The Company continues to share with JCI the allocation of costs for assessment and remediation of certain off-site chlorinated volatile organic compounds 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 property10. InFINANCIAL 2009, EPA determined that the impact to the two city wells was from sources unrelated to the Company’s property. The EPA also 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. The Company’s investigation revealed lead contamination in one area and chlorinated solvent contamination in another area, both in soil and groundwater. The Company has submitted work plans to the EPA for remediation of the lead and chlorinated solvent contamination. The Company has timely complied with all investigative and remedial actions required by EPA. INSTRUMENTS

16The estimated fair values of the Company’s financial instruments at October 31, 2011 and January 31, 2011 were as follows:

	October 31, 2011				January 31, 2011
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Cash and cash equivalents	$	6,364	$	6,364	$	3,708	$	3,708
Debt		64,837		64,579		55,387		54,808
Commodity hedges		1,192		1,192		0		0

~~C&D TECHNOLOGIES, INC. AND SUBSIDIARIES~~ 18

~~NOTES~~C&D TOTECHNOLOGIES, ~~CONSOLIDATED~~INC. ~~FINANCIAL~~AND ~~STATEMENTS~~ SUBSIDIARIES

~~(Dollars~~NOTES inTO ~~thousands,~~CONSOLIDATED ~~except~~FINANCIAL ~~per share data)~~ STATEMENTS

(~~UNAUDITED)~~Dollars in thousands, except per share data)

The Company has conducted site investigations at its Conyers, Georgia facility, and has detected chlorinated solvents in groundwater and lead in soil both on-site and off-site. The Company has recently initiated further assessment of groundwater conditions, temporarily suspending remediation of the chlorinated solvents which had been initiated in accordance with a Corrective Action Plan approved by the Georgia Department of Natural Resources in January 2007. A modified Corrective Action Plan will be submitted upon completion of the assessment. Additionally, the Company has completed 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. In November 2008, the parties entered into a final settlement agreement, pursuant to which the Company agreed to assess and remediate any contamination on the adjoining property due to the Company’s operations as required by Georgia Department of Natural Resources and with the concurrence of the adjoining landowner. The Company has timely complied with all orders by the Georgia Department of Natural Resources. (UNAUDITED)

The ~~Company~~following ~~accrues~~methods ~~for liabilities in its consolidated financial statements~~ and ~~periodically~~assumptions ~~reevaluates~~were ~~the~~used ~~amounts~~to ~~for~~estimate ~~these liabilities in view of~~ the ~~most~~fair ~~current~~value ~~information available in accordance with accounting guidance for contingencies. As~~ of ~~July 31,~~each ~~2011,~~class ~~accrued environmental liabilities totaled $2,436 consisting~~ of $1,812 in other current liabilities and $624 in other liabilities. Based on currently available information, the Company believes that appropriate accruals 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.~~ instruments:

~~Purchase~~Cash ~~Commitments~~and cash equivalents – the carrying amount approximates fair value because of the short term maturity of these instruments.

~~Periodically~~The ~~the~~fair ~~Company~~value ~~enters into purchase commitments pertaining to the purchase~~ of ~~certain~~accounts ~~raw~~receivable, ~~materials~~accounts ~~with~~payable ~~various~~and ~~suppliers.~~accrued ~~The Company~~liabilities ~~has~~consistently ~~entered~~approximate ~~into various lead commitments contracts some expiring within a few months while others continue into April 2012. The estimated commitments are approximately $38,000 in~~ the ~~twelve~~carrying ~~months~~value ~~ended~~due ~~July 31, 2012. The Company has also committed~~ to ~~purchase~~the ~~new~~short ~~machinery~~term atmaturity ~~an estimated cost~~ of ~~$507~~these toinstruments beand ~~installed~~are ~~within~~excluded from the ~~next~~table ~~year~~above.

10Debt – the fair value of the Notes was determined using available market prices at the balance sheet date. ~~FINANCIAL~~The ~~INSTRUMENTS~~carrying value of the Company’s remaining long-term debt, including the current portion, approximates fair value based on the incremental borrowing rates currently available to the Company for loans with similar terms and maturity.

~~The~~Commodity ~~estimated~~hedges – the fair ~~values~~value ofwas ~~the~~determined ~~Company’s~~using ~~financial~~available ~~instruments~~market prices at ~~July 31,~~the ~~2011~~balance ~~and~~sheet ~~January 31,~~date ~~2011~~of ~~were~~commodity ashedge ~~follows:~~ contracts with similar characteristics and maturity dates.

	July 31, 2011				January 31, 2011
	CarryingAmount		Fair Value		CarryingAmount		Fair Value
Cash and cash equivalents	$	7,480	$	7,480	$	3,708	$	3,708
Debt		61,370		60,774		55,387		54,808
Commodity hedges		5		5		0		0

11.	DERIVATIVE INSTRUMENTS

~~The~~Accounting ~~following~~standards ~~methods~~related ~~and~~to ~~assumptions~~derivative ~~were~~instruments ~~used~~require that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and to ~~estimate~~measure those instruments at fair value. Additionally, the fair value ofadjustments ~~each~~will ~~class~~affect either stockholders’ equity as accumulated other comprehensive (loss) income or net (loss) income depending on whether the derivative instrument qualifies as a hedge for accounting purposes and, if so, the nature of ~~financial instruments:~~the hedging activity.

~~Cash~~To ~~and~~qualify ~~cash~~for ~~equivalents~~hedge –accounting, the ~~carrying~~instruments ~~amount~~must ~~approximates~~be effective in reducing the risk exposure that they are designed to hedge. For instruments that are associated with the hedge of an anticipated transaction, hedge effectiveness criteria also require that it be probable that the underlying transaction will occur. Instruments that meet established accounting criteria are formally designated as hedges at the inception of the contract. These criteria demonstrate that the derivative is expected to be highly effective at offsetting changes in fair value ~~because~~ of the ~~short~~underlying ~~term~~exposure ~~maturity~~ both at inception of ~~these~~the ~~instruments~~hedging relationship and on an ongoing basis. The assessment for effectiveness is documented at hedge inception and reviewed throughout the designated hedge period.

~~The~~In ~~fair~~the ~~value~~ordinary course of ~~accounts~~business, ~~receivable~~the Company may enter into a variety of contractual agreements, ~~accounts~~such ~~payable~~as derivative financial instruments, primarily to manage and ~~accrued~~to ~~liabilities~~hedge ~~consistently approximate~~its exposure to currency exchange rate and interest rate risk. All derivatives are recognized on the ~~carrying~~balance sheet at fair value ~~due~~and toare ~~the~~reported ~~short~~in ~~term~~either ~~maturity~~other ofcurrent ~~these~~assets or accrued liabilities. For derivative instruments ~~and~~that are ~~excluded~~designated and qualify as cash flow hedges, the gain on the derivative is reported as a component of other comprehensive income (“OCI”) and reclassified from accumulated other comprehensive income (“AOCI”) into earnings when the ~~table~~hedged ~~above~~transaction affects earnings. If any derivatives are not designated as hedges, the gain or loss on the derivative would be recognized in current earnings.

~~Long-term~~The ~~debt~~Company –has ~~the~~entered ~~fair~~into ~~value~~lead hedge contracts to manage risk of the ~~Notes~~cost ~~was~~of ~~determined~~lead. ~~using~~The ~~available~~agreements ~~market~~are ~~prices~~with asmajor offinancial ~~January 14,~~institutions ~~2011~~with ~~since~~maturities ~~there has~~generally ~~been~~less ~~minimal~~than one year. These market ~~activity~~instruments ~~since~~are ~~then~~designated as cash flow hedges. The ~~carrying~~mark-to-market ~~value~~gain or loss on qualifying commodity hedges is included in other comprehensive income to the extent effective, and reclassified into cost of goods sold in the ~~Company’s~~period ~~remaining~~during ~~long-~~which the hedge transaction affects earnings.

17Hedge accounting is discontinued when it is determined that a derivative instrument is not highly effective as a hedge. Hedge accounting is also discontinued when: (1) the derivative instrument expires, is sold, terminated or exercised; or is no longer designated as a hedge instrument because it is unlikely that a forecasted transaction will occur; (2) a hedged firm commitment no longer meets the definition of a firm commitment; or (3) management determines that designation of the derivative as a hedging instrument is no longer appropriate.

~~Table of Contents~~19

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

(UNAUDITED)

~~term~~When ~~debt,~~hedge ~~including~~accounting is discontinued, the ~~current~~derivative ~~portion~~instrument will be either terminated, ~~approximates~~continue to be carried on the balance sheet at fair value, ~~based~~or onredesignated as the ~~incremental~~hedging ~~borrowing~~instrument, ~~rates~~if ~~currently~~the ~~available~~relationship tomeets all applicable hedging criteria. Any asset or liability that was previously recorded as a result of recognizing the ~~Company~~value ~~for~~of ~~loans~~a ~~with~~firm ~~similar~~commitment ~~terms~~will be removed from the balance sheet and ~~maturity~~recognized as a gain or loss in current period earnings. Any gains or losses that were accumulated in other comprehensive loss from hedging a forecasted transaction will be recognized immediately in current period earnings, if it is probable that the forecasted transaction will not occur.

~~Commodity~~The ~~hedges~~Company –had ~~the~~raw ~~fair~~material ~~value~~commodity ~~was~~arrangements ~~determined~~for ~~using~~4,375 ~~available~~metric ~~market~~tons ~~prices~~of atbase ~~the~~metals ~~balance~~at ~~sheet~~October ~~date~~31, of2011 ~~commodity hedge~~and ~~contracts~~0 ~~with~~metric ~~similar~~tons ~~characteristics~~at ~~and~~January ~~maturity~~31, ~~dates~~2011.

~~11.~~The ~~DERIVATIVE~~following ~~INSTRUMENTS~~table provides the fair value of the Company’s derivative contracts which include raw material commodity contracts.

Accounting standards related to derivative instruments require that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and to measure those instruments at fair value. Additionally, the fair value adjustments will affect either stockholders’ equity as accumulated other comprehensive (loss) income or net (loss) income depending on whether the derivative instrument qualifies as a hedge for accounting purposes and, if so, the nature of the hedging activity.

	October 31,		January 31,
	2011		2011		Balance Sheet Location
Derivatives designated as hedging instruments:

Commodity Hedges	$	1,192	$	0	Other current liabilities
Total fair value	$	1,192	$	0

ToThe ~~qualify~~Company ~~for~~estimates ~~hedge~~that ~~accounting~~$1,417 ~~the~~of ~~instruments~~net ~~must~~derivative belosses ~~effective~~ in ~~reducing~~AOCI ~~the~~as ~~risk exposure that they are designed to hedge. For instruments that are associated with the hedge~~ of anOctober ~~anticipated transaction~~31, ~~hedge~~2011 ~~effectiveness criteria also require that it be probable that the underlying transaction~~ will ~~occur. Instruments that meet established accounting criteria are formally designated as hedges at the inception of the contract. These criteria demonstrate that the derivative is expected to~~ be ~~highly~~reclassified ~~effective~~into atearnings ~~offsetting changes~~ in ~~fair value of~~ the ~~underlying~~next ~~exposure~~twelve ~~both at inception of the hedging relationship and on an ongoing basis~~months. ~~The assessment for effectiveness is documented at hedge inception and reviewed throughout the designated hedge period.~~

In the ordinary course of business, the Company may enter into a variety of contractual agreements, such as derivative financial instruments, primarily to manage and to hedge its exposure to currency exchange rate and interest rate risk. All derivatives are recognized on the balance sheet at fair value and are reported in either other current assets or accrued liabilities. For derivative instruments that are designated and qualify as cash flow hedges, the gain on the derivative is reported as a component of other comprehensive income (“OCI”) and reclassified from accumulated other comprehensive income (“AOCI”) into earnings when the hedged transaction affects earnings. If any derivatives are not designated as hedges, the gain or loss on the derivative would be recognized in current earnings.

						Amount of Gain (Loss)
Derivatives in Cash Flow	Amount of Gain (Loss)					Reclassified from AOCI						Location of Gain (Loss)
Hedging Relationships:	Recognized in OCI					into Income						Reclassified from
	2011			2010		2011			2010			AOCI into Income

Three months ended October 31,
Commodity Hedges	$	(1,821	)	$	714	$	(167	)	$	(523	)	Cost of Sales


Nine months ended October 31,
Commodity Hedges	$	(1,811	)	$	819	$	156		$	(722	)	Cost of Sales

~~The Company has entered into lead hedge contracts to manage risk of the cost of lead~~12. The agreements are with major financial institutions with maturities generally less than one year. These market instruments are designated as cash flow hedges. The mark-to-market gain or loss on qualifying commodity hedges is included in other comprehensive income to the extent effective, and reclassified into cost of goods sold in the period during which the hedge transaction affects earnings. WARRANTY

~~Hedge~~The ~~accounting~~Company isprovides ~~discontinued~~for ~~when~~estimated itproduct iswarranty ~~determined~~expenses ~~that a derivative instrument is not highly effective as a hedge. Hedge accounting is also discontinued~~ when: ~~(1)~~ the ~~derivative~~related ~~instrument expires,~~products isare sold,. ~~terminated~~Because orwarranty ~~exercised;~~estimates orare isforecasts nothat ~~longer~~are ~~designated~~based ason athe ~~hedge~~best ~~instrument~~available ~~because~~information, itprimarily ishistorical ~~unlikely~~claims ~~that~~experience, aclaims ~~forecasted~~costs ~~transaction~~may ~~will~~differ ~~occur;~~from ~~(2) a~~amounts ~~hedged~~provided. ~~firm~~An ~~commitment~~analysis ~~no longer meets the definition~~ of achanges ~~firm~~in ~~commitment; or (3) management determines that designation of~~ the ~~derivative~~liability asfor aproduct ~~hedging~~warranties ~~instrument is no longer appropriate.~~ follows:

When hedge accounting is discontinued, the derivative instrument will be either terminated, continue to be carried on the balance sheet at fair value, or redesignated as the hedging instrument, if the relationship meets all applicable hedging criteria. Any asset or liability that was previously recorded as a result of recognizing the value of a firm commitment will be removed from the balance sheet and recognized as a gain or loss in current period earnings. Any gains or losses that were accumulated in other comprehensive loss from hedging a forecasted transaction will be recognized immediately in current period earnings, if it is probable that the forecasted transaction will not occur.

	Nine months ended
	October 31,
	2011			2010
Balance at beginning of period	$	7,576		$	6,481
Current year provisions		2,762			3,259
Expenditures		(2,892	)		(3,183	)
Effect of foreign currency translation		16			0
Balance at end of period	$	7,462		$	6,557

~~The Company had raw material commodity arrangements for 2,367 metric tons of base metals at July 31, 2011 and 0 metric tons at January 31, 2011.~~ 20

18C&D TECHNOLOGIES, INC. AND SUBSIDIARIES

~~Table~~NOTES ofTO ~~Contents~~CONSOLIDATED FINANCIAL STATEMENTS

~~C&D~~ (Dollars ~~TECHNOLOGIES~~in thousands, ~~INC.~~except ~~AND~~per ~~SUBSIDIARIES~~share data)

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~ (UNAUDITED)

~~(Dollars~~As of October 31, 2011, accrued warranty obligations of $7,462 include $2,879 in ~~thousands~~other current liabilities and $4,583 ~~except~~in ~~per~~other ~~share~~liabilities. ~~data)~~As of January 31, 2011 accrued warranty obligations of $7,576 included $3,168 in current liabilities and $4,408 in other liabilities.

~~(UNAUDITED)~~13. PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS

The ~~following~~components ~~table~~of ~~provides~~net ~~the~~periodic ~~fair~~benefit ~~value~~cost consisted of the ~~Company’s~~following ~~derivative~~for ~~contracts which~~the ~~include~~interim ~~raw material commodity contracts.~~ periods:

	July 31,2011			January 31,2011			Balance Sheet Location
	Pension Benefits						Postretirement Benefits
Derivatives designated as hedging instruments:
	Three months ended						Three months ended
Commodity Hedges	$	5		$	—		Other current assets
	October 31,						October 31,
Total fair value	$	5		$	—
	2011			2010			2011			2010
Components of net periodic benefit cost:
Service cost	$	245		$	346		$	18		$	18
Interest cost		1,042			1,167			25			29
Expected return on plan assets		(1,041	)		(1,029	)		0			0
Amortization of prior service costs		0			0			(3	)		(198	)
Recognized actuarial loss		812			792			(4	)		1
Net periodic benefit cost	$	1,058		$	1,276		$	36		$	(150	)
	Pension Benefits						Postretirement Benefits
	Nine months ended						Nine months ended
	October 31,						October 31,
		2011			2010			2011			2010
Components of net periodic benefit cost:
Service cost	$	936		$	1,039		$	54		$	53
Interest cost		3,331			3,501			75			86
Expected return on plan assets		(3,373	)		(3,086	)		0			0
Amortization of prior service costs		0			0			(9	)		(593	)
Recognized actuarial loss		2,437			2,376			(12	)		3
Net periodic benefit cost	$	3,331		$	3,830		$	108		$	(451	)

The Company ~~estimates~~made ~~that~~ $54,853 of ~~net~~contributions ~~derivative~~to ~~gains~~the plan in ~~AOCI~~the asnine ofmonths ~~July~~ ended October 31, 2011. ~~will~~The ~~be reclassified~~Company ~~into~~does ~~earnings~~not inexpect ~~the~~to ~~next~~make ~~twelve~~any ~~months~~additional contributions to its plan during fiscal year 2012. The Company expects to make contributions totaling approximately $177 to the Company sponsored postretirement benefit plan during fiscal year 2012.

						Amount of Gain (Loss)
Derivatives in Cash Flow	Amount of Gain (Loss)					Reclassified from AOCI					Location of Gain (Loss)
Hedging Relationships:	Recognized in OCI					into Income					Reclassified from
	2011		2010			2011		2010			AOCI into Income
Three months ended July 31,
Commodity Hedges	$	243	$	(590	)	$	5	$	(630	)	Cost of Sales
Six months ended July 31,
Commodity Hedges	$	10	$	105		$	323	$	(200	)	Cost of Sales

14.	RESTRUCTURING

12On September 14, 2010, the Company announced plans to close its Leola, Pennsylvania manufacturing facility and transfer production to other existing facilities. ~~WARRANTY~~When complete, the closure plan will result in the elimination of approximately 85 positions. Closure costs incurred through October 31, 2011 include $506 in severance costs, $1,523 in fixed asset impairment charges and $362 in other costs.

~~The~~In ~~Company provides~~the ~~for~~third ~~estimated~~quarter ~~product~~of ~~warranty~~fiscal ~~expenses~~year ~~when~~2012, the ~~related~~Shanghai, ~~products~~China ~~are~~manufacturing ~~sold.~~facility ~~Because~~terminated ~~warranty~~31 ~~estimates~~employees ~~are~~in ~~forecasts~~connection ~~that~~with ~~are~~ongoing ~~based~~cost onreductions. ~~the~~These ~~best~~terminations ~~available~~resulted ~~information,~~in ~~primarily~~severence ~~historical claims experience, claims~~ costs ~~may~~of ~~differ~~$809 ~~from amounts~~which ~~provided.~~was Anrecorded ~~analysis~~and ofpaid ~~changes~~ in the ~~liability~~third ~~for~~quarter ~~product~~of ~~warranties~~fiscal ~~follows:~~year 2012.

	Six months ended
	July 31,
	2011			2010
Balance at beginning of period	$	7,576		$	6,481
Current year provisions		2,203			2,386
Expenditures		(1,880	)		(2,285	)
Effect of foreign currency translation		15			0
Balance at end of period	$	7,914		$	6,582

AsC&D ~~of July 31~~TECHNOLOGIES, ~~2011, accrued warranty obligations of $7,914 include $2,940 in current liabilities and $4,974 in other liabilities~~INC. AsAND ~~of January 31, 2011, accrued warranty obligations of $7,576 include $3,168 in current liabilities and $4,408 in other liabilities.~~ SUBSIDIARIES

19NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~Table~~ (Dollars ofin ~~Contents~~thousands, except per share data)

~~C&D TECHNOLOGIES, INC. AND SUBSIDIARIES~~ (UNAUDITED)

~~NOTES~~A TOreconciliation ~~CONSOLIDATED~~of ~~FINANCIAL~~the ~~STATEMENTS~~liability and related activity during the nine months ended October 31, 2011, is shown below.

(Dollars in thousands, except per share data)

	Balance at						Balance at
	January 31,		Provision				October 31,
	2011		Additions		Expenditures		2011

Severance	$	406	$	901	$	1,037	$	270
Other		232		35		267		0
Total	$	638	$	936	$	1,304	$	270

~~(UNAUDITED)~~15. FAIR VALUE MEASUREMENT

13Assets and liabilities subject to fair value measurements primarily consist of the Company’s derivative contracts. ~~PENSION~~The ~~PLANS~~Company ~~AND~~utilizes ~~OTHER~~the ~~POSTRETIREMENT~~market ~~BENEFITS~~approach to measure fair value for the Company’s financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The accounting guidance 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:

~~The~~Level ~~components~~1 ofInputs ~~net~~are ~~periodic~~quoted ~~benefit~~prices ~~cost~~in ~~consisted~~active ofmarkets ~~the following~~ for ~~the~~identical ~~interim~~assets ~~periods:~~or liabilities.

	Pension Benefits						Postretirement Benefits
	Three months ended						Three months ended
	July 31,						July 31,
	2011			2010			2011			2010
Components of net periodic benefit cost:
Service cost	$	348		$	376		$	18		$	18
Interest cost		1,145			1,193			25			30
Expected return on plan assets		(1,161	)		(1,040	)		—			—
Amortization of prior service costs		—			—			(3	)		(198	)
Recognized actuarial loss/(gain)		815			833			(4	)		2
Net periodic benefit cost	$	1,147		$	1,362		$	36		$	(148	)
	Pension Benefits						Postretirement Benefits
	Six months endedJuly 31,						Six months endedJuly 31,
	2011			2010			2011			2010
Components of net periodic benefit cost:
Service cost	$	691		$	693		$	36		$	35
Interest cost		2,289			2,334			50			60
Expected return on plan assets		(2,332	)		(2,057	)		—			—
Amortization of prior service costs		—			—			(6	)		(396	)
Recognized actuarial loss/(gain)		1,625			1,584			(8	)		4
Net periodic benefit cost	$	2,273		$	2,554		$	72		$	(297	)

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.

~~The~~Level ~~Company~~3 ~~made~~Inputs $0are ofderived ~~contributions~~from tovaluation ~~the~~techniques ~~plan~~ in ~~the~~which ~~six~~one ~~months~~or ~~ended~~more ~~July,~~significant ~~31,~~inputs ~~2011.~~or ~~The~~value ~~Company expects~~drivers toare ~~make additional contributions of approximately $5,000 to its plan during fiscal year 2012~~unobservable. ~~The Company also expects to make contributions totaling approximately $177 to the Company sponsored postretirement benefit plan during fiscal year 2012.~~

14There were no assets or liabilities held as of January 31, 2011 measured at fair value on a recurring basis. ~~RESTRUCTURING~~The following table represents the Company’s assets and liabilities measured at fair value on a recurring basis as of October 31, 2011 and the basis for those measurements:

	Total		Level 1		Level 2		Level 3
2011
Commodity hedge liability		1,192		0		1,192		0

A16. ~~reconciliation~~GOODWILL ofAND ~~the~~ASSET ~~liability and related activity during the six months ended July 31, 2011, is shown below.~~ IMPAIRMENTS

	Balance atJanuary 31,2011		ProvisionAdditions		Expenditures		Balance atJuly 31,2011
Severance	$	406	$	90	$	149	$	347
Other		232		35		267		—
Total	$	638	$	125	$	416	$	347

The Company performs the annual goodwill test in the fourth quarter of the fiscal year for its one reporting unit. Given the recent decrease in market capitalization and continuing operating losses, the Company tested for impairment on July 31, 2010. As a result, the Company first completed an assessment of its long-lived assets within the various asset groupings and determined there were no impairments.

20The Company assessed the carrying value of its goodwill by using the two-step, fair-value based test, at July 31, 2010, in accordance with accounting guidance for goodwill and other intangible assets. The first step compared the fair value of the reporting unit to its carrying amount, including goodwill. As the carrying amount of the reporting unit exceeded its fair value, the second step was performed. The second step was performed and determined that the implied fair value of goodwill was in excess of the book value of goodwill, and in connection with this second step, the Company recorded a non-cash pre-tax impairment charge of $59,978 representing the full value of goodwill as of October 31, 2010. As discussed in Note 7, Income Taxes, as a result of the impairment charge the Company no longer has a deferred tax liability related to an indefinite lived intangible. As such, for the nine months ended October 31, 2010, the Company recorded an income tax benefit in the amount of $14,245 for the reversal of this deferred tax liability. As a result the goodwill impairment recorded, net of tax benefits for the nine months ended October 31, 2010 was $45,733.

~~Table of Contents~~22

C&D TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

(UNAUDITED)

1517. ~~FAIR~~RELATED ~~VALUE~~PARTY ~~MEASUREMENT~~TRANSACTIONS

~~Assets~~The ~~and~~Company ~~liabilities~~has ~~subject~~a to$20,000 ~~fair~~term ~~value~~loan ~~measurements~~with ~~primarily~~Silver ~~consist~~Oak ofCapital, ~~the~~L.L.C. ~~Company’s~~an ~~derivative~~affiliate ~~contracts~~of ~~and~~Angelo ~~investments related~~Gordon to& ~~the~~Co., ~~deferred compensation plan~~L.P., ~~The~~a ~~Company~~related ~~utilizes~~party ~~the~~of ~~market approach to measure fair value for~~ the Company’s, ~~financial~~outstanding ~~assets~~as ~~and~~of ~~liabilities.~~October ~~The~~31, ~~market~~2011 ~~approach uses prices~~ and ~~other~~January ~~relevant~~31, ~~information~~2011. ~~generated~~During bythe ~~market transactions~~three ~~involving~~and ~~identical~~nine ormonths ~~comparable~~ended ~~assets~~October or31, ~~liabilities.~~2011, ~~The~~the ~~accounting~~Company ~~guidance~~incurred ~~includes~~fees aof ~~fair~~$51 ~~value~~and ~~hierarchy~~$153 ~~that~~and isinterest ~~intended~~of to$716 ~~increase consistency~~ and ~~comparability~~$2,123, inrespectively, ~~fair value measurements and~~ related ~~disclosures. The fair value hierarchy is based on inputs~~ to ~~valuation~~this ~~techniques~~term ~~that are used to measure fair value that are either observable or unobservable~~loan. 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.

On October 3, 2011, the Company entered into a definitive merger agreement, pursuant to which the Company will be acquired by an affiliate of Angelo, Gordon & Co. in an all-cash transaction for $9.75 per share. The transaction is not subject to a financing condition. Under the terms of the merger agreement, each outstanding share of C&D common stock not owned by Angelo, Gordon & Co., or its affiliates will be converted into the right to receive $9.75 in cash, subject to the terms and conditions of the merger agreement. Stockholders affiliated with Angelo, Gordon & Co. who hold approximately 65% of the outstanding shares of the Company’s common stock have executed a written consent approving the transaction, thereby providing the required stockholder approval for this transaction. As a result, no further action by other stockholders of the Company is required to approve the transaction, but consummation of the transaction remains subject to certain closing conditions as set forth in the merger agreement. The transaction is expected to close in the fourth quarter of this fiscal year.

~~There were no assets or liabilities held as of January 31, 2011 measured at fair value on a recurring basis~~18. ~~The~~OTHER ~~following table represents the Company’s assets and liabilities measured at fair value on a recurring basis as of July 31~~EXPENSE, ~~2011 and the basis for those measurements:~~ NET

	Total		Level 1		Level 2		Level 3
2011
Commodity hedge asset	$	5	$	0	$	5	$	0

Other expense, net as of October 31, 2011 and 2010 consist of:

16. GOODWILL AND ASSET IMPAIRMENTS

	Three months ended					Nine months ended
	October 31,					October 31,
	2011		2010			2011		2010

Environmental costs, closed facilities	$	0	$	0		$	110	$	882
Going private transaction costs		1,880		0			2,221		0
Loss (gain) on foreign exchange		346		(172	)		348		(58	)
Restructuring support agreement costs		145		1,264			145		1,264
Other		63		226			302		640
Total Other Expenses	$	2,434	$	1,318		$	3,126	$	2,728

Goodwill represents the excess of the cost over the fair value of net assets acquired in business combinations. Goodwill is not amortized and is subject to impairment tests. Goodwill is tested for impairment on an annual basis or upon the occurrence of certain circumstances or events. Indicators of potential impairment might include a decline of quoted market prices of the Company’s stock in active markets and/or continuing operating losses. The Company determines the fair value of its reporting units using a combination of financial projections and discounted cash flow techniques adjusted for risk characteristics, also giving consideration to the Company’s overall market capitalization. The fair value of the reporting units is compared to the carrying value of the reporting units to determine if an impairment loss should be calculated. If the book value of a reporting unit exceeds the fair value of the reporting unit, an impairment loss is indicated. The impairment loss is calculated by comparing the implied fair value of the goodwill to the book value of the goodwill. If the book value of the goodwill exceeds the implied fair value of the goodwill, an impairment loss is recorded. 23

~~The Company~~MANAGEMENT’sS ~~implied~~DISCUSSION ~~fair~~AND ~~value~~ANALYSIS ofOF goodwill is dependent upon significant judgments and estimates of future discounted cash flows and other factors. The Company’s estimates of future cash flows include assumptions concerning future operating performance and economic conditions and may differ from actual future cash flows. Estimated future cash flows are adjusted by an appropriate discount rate at the date of evaluation. The financial and credit market volatility directly impacts the fair value measurement through the weighted average cost of capital that the Company uses to determine the discount rate and through the stock price that is used to determine market capitalization. Therefore, changes in the stock price may also affect the amount of impairment recorded. Market capitalization is determined by multiplying the shares outstanding on the assessment date by the average market price of the Company’s common stock over a 30-day period before assessment date. The Company uses this 30-day FINANCIAL

21CONDITION AND RESULTS OF OPERATIONS (continued)

~~Table~~(Dollars ofin ~~Contents~~thousands, except per share data)

~~C&D~~Item ~~TECHNOLOGIES, INC~~2. ~~AND SUBSIDIARIES~~

~~NOTES~~Results TOof ~~CONSOLIDATED FINANCIAL STATEMENTS~~ Operations

~~(Dollars~~Three inMonths ~~thousands~~Ended October 31, ~~except~~2011 ~~per~~compared ~~share~~to ~~data)~~Three Months Ended October 31, 2010

~~(UNAUDITED)~~Within the following discussion, unless otherwise stated, “quarter” and “three-month” period” refer to the third quarter of our fiscal year 2012, ended October 31, 2011. All comparisons are with the corresponding period in the prior fiscal year, unless otherwise stated.

~~duration~~Net sales in the third quarter of fiscal year 2012 increased $5,798 or 6.6% to ~~consider~~$93,421 ~~inherent~~from ~~market~~$87,623 ~~fluctuations~~in ~~that~~the ~~may~~third ~~affect~~quarter ~~any~~of ~~individual~~fiscal ~~closing~~year ~~price~~2011. ~~Market~~This ~~capitalization~~increase ~~subsequent~~was primarily due to growth in Asia driven by strong demand offset by continued pressures on volumes as a result of the ~~assessment~~general ~~date~~economic isenvironment, ~~also~~principally ~~considered~~in the Company’s North American UPS markets. Average London Metal Exchange (“LME”) lead prices increased from an average of $1.00 per pound in the third quarter of fiscal year 2011 to $1.01 per pound in the third quarter of fiscal year 2012.

~~The~~Gross ~~Company~~profit ~~performs~~in the ~~annual~~third ~~goodwill~~quarter ~~test~~of fiscal year 2012 increased $229 or 2.1% to $11,024 from $10,795 in the ~~fourth~~third quarter of ~~the~~ fiscal year ~~for~~2011. ~~its~~Margins ~~one~~as ~~reporting~~a ~~unit~~percentage of sales decreased from 12.3% ~~Given~~in the ~~recent decrease~~third inquarter ~~market~~of ~~capitalization~~fiscal ~~and~~year ~~continuing~~2011 ~~operating~~to ~~losses,~~11.8% in the ~~Company~~third ~~tested~~quarter ~~for~~of ~~impairment~~fiscal onyear ~~July 31, 2010~~2012. AsGross amargin ~~result,~~has ~~the~~decreased ~~Company~~from ~~first~~the ~~completed~~prior anyear’s ~~assessment~~comparable ofquarter ~~its~~primarily ~~long-lived~~due ~~assets~~to ~~within~~unfavorable ~~the~~product ~~various~~mix ~~asset~~shifts ~~groupings~~resulting ~~and determined~~in ~~there~~lower ~~were~~margin noproduct ~~impairments~~sales.

~~The Company assessed the carrying value of its goodwill by using the two-step~~Selling, ~~fair-value~~ ~~based~~general ~~test,~~and atadministrative ~~July 31,~~expenses ~~2010,~~ in ~~accordance with accounting guidance for goodwill and other intangible assets. The first step compared~~ the ~~fair~~third ~~value~~quarter of ~~the~~fiscal ~~reporting~~year ~~unit~~2012 toincreased ~~its~~$473 ~~carrying~~or ~~amount, including goodwill~~5.9% Asto ~~the carrying amount of the reporting unit exceeded its fair value~~$8,498 ~~the~~from ~~second step was performed~~$8,025. The ~~second~~increase ~~step~~is ~~was~~primarily ~~performed~~due ~~and~~to ~~determined~~increased ~~that~~stock ~~the~~option ~~implied~~costs ~~fair value~~ of ~~goodwill~~approximately ~~was~~$300 ~~in excess of the book value of goodwill,~~ and inincreased ~~connection~~administrative ~~with this second step~~costs, ~~the~~primarily ~~Company~~legal ~~recorded~~costs ~~a non-cash pre-tax impairment charge~~ of ~~$59,978~~approximately ~~representing the full value of goodwill as of July 31, 2010~~$200. As ~~discussed~~a inpercentage ~~Note~~of 8sales, ~~Income Taxes~~selling, asgeneral aand ~~result~~administrative ofexpenses ~~the~~decreased ~~impairment charge the Company no longer has a deferred tax liability related~~ to ~~an indefinite lived intangible~~9.1% ~~As such,~~ in ~~the~~fiscal ~~quarter~~2012 ~~ended~~compared ~~July 31,~~to ~~2010,~~9.2% ~~the Company recorded an income tax benefit~~ in the ~~amount~~third ofquarter ~~$14,245 for the reversal~~ of ~~this~~fiscal ~~deferred tax liability~~2011. ~~As a result the goodwill impairment recorded, net of tax benefits in the quarter ended July 31, 2010 was $45,733.~~

17Research and development expenses in the third quarter of fiscal year 2012 increased $163 or 11.1% ~~RELATED~~to ~~PARTY~~$1,631 ~~TRANSACTIONS~~from $1,468. As a percentage of sales, research and development expenses remained at 1.7% in both the third quarter of fiscal year 2012 and 2011.

~~The~~In ~~Company~~the ~~has~~third aquarter ~~$20,000 term loan with Silver Oak Capital, L.L.C. an affiliate~~ of ~~Angelo~~fiscal ~~Gordon & Co.~~2012, ~~L.P., a related party of~~ the Company, ~~outstanding~~reduced asheadcount ofin ~~July 31,~~its ~~2011 and January 31~~Shanghai, ~~2011.~~China ~~During~~manufacturing ~~the~~facility ~~three~~incurring ~~and~~severance ~~six~~costs ~~months ended July 31, 2011, the Company incurred fees~~ of $51809 ~~and~~during ~~$102~~the ~~and~~quarter ~~interest~~ended ofOctober ~~$716 and $1~~31,~~408,~~ ~~respectively, related to this term loan~~2011.

OnOperating ~~June~~income ~~16,~~in ~~2011,~~ the ~~Company~~third ~~announced~~quarter ~~that~~of itfiscal ~~had~~year ~~received~~2012 awas ~~non-binding~~$84 ~~proposal~~compared ~~for~~to aan ~~going~~operating ~~private~~loss ~~transaction from affiliates~~ of ~~Angelo,~~$526 ~~Gordon &~~in ~~Co. LP,~~ the ~~holder~~third ofquarter ~~approximately 65%~~ of ~~the~~fiscal ~~Company’s~~year ~~common stock, at $9~~2011.50 ~~per~~This ~~share~~change inis ~~cash.~~mainly ~~The~~due ~~board~~to ofthe ~~directors~~restructuring ~~has~~charges ~~formed~~for athe ~~special~~announced ~~committee~~closure of ~~independent directors to consider~~ the ~~proposal.~~ ~~The~~Leola ~~committee~~plant ~~has~~partially ~~retained~~offset ~~independent~~by ~~financial~~increases ~~advisors and legal counsel to assist~~ in ~~its~~selling, ~~work.~~general ~~The Company cautions its shareholders~~ and ~~others~~administrative ~~considering~~expenses, ~~trading~~discussed inabove, ~~its securities that it has only received a non-binding proposal and it is~~ in the ~~process~~third quarter of ~~being~~fiscal ~~evaluated.~~year ~~There can be no assurance that any definitive offer will be made, that any agreement will be executed or that this or any other transaction will be approved or consummated~~2012.

18Analysis of Change in Operating Income for the third quarter of fiscal year 2012 vs. ~~OTHER~~fiscal ~~EXPENSE,~~year ~~NET~~2011.

Other expense, net as of July 31, 2011 and 2010 consist of:

Fiscal Year 2012 vs. 2011
Operating Loss Three months ended October 31, 2010	$	(526	)
Lead, net		(6,250	)
Price / Volume / Mix		5,053
Warranty		313
Pension		218
FY 2011 Leola severence and restructuring		1,828
China severance		(809	)
Increase in research and development costs		(162	)
Other		419
Operating Income Three months ended October 31, 2011	$	84

	Three months ended				Six months ended
	July 31,				July 31,
	2011		2010		2011		2010
Environmental costs, closed facilities	$	0	$	218	$	110	$	882
Going private transaction costs		341		0		341		0
Loss on foreign exchange		342		165		2		114
Other		129		291		239		414
Total Other Expenses	$	812	$	674	$	692	$	1,410

22MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

~~Table~~CONDITION ofAND ~~Contents~~RESULTS OF OPERATIONS (continued)

~~MANAGEMENT’S~~(Dollars ~~DISCUSSION~~in ~~AND~~thousands, ~~ANALYSIS~~except OFper ~~FINANCIAL~~share data)

~~CONDITION~~Interest ~~AND~~expense, ~~RESULTS~~net, OFin ~~OPERATIONS~~the third quarter of fiscal year 2012 decreased $2,928 or 68.6% to $1,338 from $4,266 in the third quarter of fiscal year 2011, primarily due to the debt for equity exchange completed in the fourth quarter of fiscal year 2011. This exchange reduced the outstanding balances on the convertible notes by approximately $125,000 which was partially offset by higher average debt balances on the credit facility and China borrowings in the third quarter of fiscal 2012 compared to the third quarter of fiscal year 2011.

~~(Dollars~~Other expense was $2,434 in ~~thousands~~the third quarter of fiscal year 2012 compared to $1,318 ~~except~~in ~~per~~the ~~share~~third ~~data)~~quarter of fiscal year 2011. The increase was primarily due to costs incurred related to our going private transaction of $1,880 and currency remeasurement losses of $346 in the third quarter of fiscal year 2012 compared to currency measurment gains of $172 in the third quarter of fiscal year 2011 and costs incurred related to the debt for equity exchange in the third quarter of fiscal year of 2011 of $1,264.

~~Item 2~~Income tax expense of $277 was recorded in the third quarter of fiscal year 2012, compared to $161 in the third quarter of fiscal year 2011. Tax expense in the third quarter of fiscal year 2012 was primarily due to foreign taxes on profits.

~~Three~~Generally, ~~Months~~accounting ~~Ended~~standards ~~July 31~~require companies to provide for income taxes each quarter based on their estimate of the effective tax rate for the full year. The authoritative guidance for accounting for income taxes allows the use of the discrete method when, ~~2011~~in ~~compared~~certain tosituations, ~~Three~~the ~~Months~~actual ~~Ended~~interim ~~July~~period effective tax rate may be used if it provides a better estimate of 31income tax expense. Due to our losses in the US, ~~2010~~the full valuation allowance in the US, and the relatively small amount of projected US income, it is our position that the discrete method provides a more accurate estimate of income tax expense for domestic taxes and therefore domestic income tax expense for the current quarter has been presented using that method. Taxes on international earnings continue to be calculated using an estimate of the effective tax rate for the full year.

~~Within~~Noncontrolling interest reflects the ~~following~~33% ~~discussion,~~ownership ~~unless~~interest ~~otherwise~~in ~~stated~~the joint venture battery business located in Shanghai, ~~“quarter”~~China, ~~and~~that ~~“three-month”~~is ~~period”~~not ~~refer~~owned by the Company. Net loss attributable to Noncontrolling interest was $71 in the ~~second~~ third quarter of fiscal year 2012. ~~All~~compared ~~comparisons~~to ~~are~~net ~~with~~income of $174 in the ~~corresponding~~third ~~period~~quarter of fiscal year 2011, due to the impact of the Shanghai severance expense recorded in the ~~prior~~third quarter of fiscal year, ~~unless~~2012 ~~otherwise~~on ~~stated.~~the noncontrolling interest.

~~Net~~As ~~sales~~a inresult of the ~~second~~above, ~~quarter~~net ofloss ~~fiscal~~attributable ~~year~~to ~~2012~~C&D ~~increased $10~~Technologies,~~763~~ ~~or 12~~Inc.8% toof $943,~~598~~894 ~~from~~was ~~$83,835~~recorded in the ~~second~~third quarter of fiscal year ~~2011.~~2012 ~~This~~as ~~increase~~compared ~~was primarily due~~ to ~~growth~~$6,445 in ~~Asia and contractual price increases resulting from~~ the ~~significant~~comparable ~~increases~~period in the ~~price~~prior ~~of lead~~year. ~~Average~~Basic ~~London~~losses ~~Metal~~per ~~Exchange~~share ~~(“LME”)~~were ~~lead prices increased from an average of~~ $0.8226 ~~per~~and ~~pound~~$6.20 inand ~~the~~diluted ~~second~~losses ~~quarter~~per ofshare ~~fiscal~~were ~~year~~$0.26 ~~2011~~and to $16.~~15 per~~28 ~~pound~~ in the ~~second~~third quarter of fiscal year 2012. ~~This~~and ~~increase was partially offset by continued pressures on volumes as a result of the general economic environment~~2011, ~~principally in our North American Uninterruptable Power Supply (“UPS”) markets~~respectively.

~~Gross~~Comprehensive ~~profit~~loss attributable to C&D Technologies, Inc. increased by $315 in the ~~second~~third quarter of fiscal year 2012 ~~increased $547 or 5.0%~~ to $114,~~580~~515 from $114,~~033~~200 in the ~~second~~third quarter of fiscal year 2011. ~~Total~~This ~~gross~~increase ~~margin~~ was ~~positively~~due ~~impacted~~primarily byto ~~higher~~an ~~volumes,~~unrealized ~~primarily~~loss inon ~~Asia.~~derivative ~~Margins~~instruments asof a$1,655 ~~percent~~in the third quarter of ~~sales~~fiscal ~~decreased~~year ~~from~~2012 ~~13.2%~~compared into ~~the~~a ~~second~~gain of $1,238 in third quarter of fiscal year 2011 toand ~~12.2%~~a decrease in ~~the~~foreign ~~second quarter~~currency oftranslation adjustments to $398 in fiscal year 2012. ~~Gross~~from ~~margin~~$592 asin afiscal ~~percent~~year of2011 ~~sales~~partially ~~has~~offset ~~decreased~~by ~~over~~an ~~the~~increase ~~prior~~in ~~year’s~~pension adjustments ~~comparable~~to ~~quarter~~$805 ~~primarily~~in ~~due~~fiscal year 2012 compared to ~~increased~~$590 ~~lead~~in ~~prices~~fiscal ~~during~~year ~~the~~2011 ~~period~~and ~~which~~a ~~were~~decrease ~~only~~in ~~partially~~net ~~recovered~~loss ~~through~~attributable ~~increased~~to ~~pricing~~C&D ~~as well~~from as$6,445 ~~unfavorable~~in ~~product~~the ~~mix~~third ~~shifts~~quarter ~~and~~of ~~negative~~fiscal ~~absorption~~2011 asto ~~inventory~~$3,894 ~~levels~~in ~~were~~the ~~significantly~~third ~~reduced.~~quarter of fiscal year 2012.

~~Selling, general~~Nine ~~and~~Months ~~administrative~~Ended ~~expenses~~October ~~in the second quarter of fiscal year 2012 decreased $396 or 4.3% to $8~~31,~~813~~ ~~from $9~~2011,~~209.~~ ~~The~~compared ~~decrease is primarily due~~ to ~~lower~~Nine ~~warranty~~Months ~~costs~~Ended ofOctober ~~approximately $551 in fiscal year 2012 partially offset by higher severance and restructuring costs of $211. As a percentage of sales~~31, ~~selling, general and administrative expenses decreased to 9.3% in fiscal 2012 compared to 11.0% in the second quarter of fiscal 2011.~~ 2010

~~Research~~Net ~~and~~sales ~~development~~for ~~expenses in~~ the ~~second~~nine ~~quarter~~months ofended ~~fiscal~~October ~~year~~31, ~~2012~~2011 ~~decreased~~increased $1920,169 or 17.29% to $1276,~~570~~330 from $1256,~~589.~~161 Asin athe ~~percentage of~~nine ~~sales,~~months ~~research~~ended ~~and~~October ~~development~~31, ~~expenses~~2010. ~~decreased~~This ~~from~~increase ~~1.9%~~was inprimarily ~~the~~due ~~second~~to ~~quarter~~contractual ofprice ~~fiscal~~increases ~~year~~resulting ~~2011~~from toincreases ~~1.7%~~ in the ~~second~~trailing ~~quarter~~price of ~~fiscal~~lead ~~year~~compared ~~2012.~~to Wethe ~~receive~~same ~~cost~~period ~~reimbursements~~in ~~under~~the aprior ~~federal~~fiscal ~~government~~year. ~~contract~~Average ~~related~~London toMetal ~~lithium battery~~Exchange ~~research~~(“LME”) ~~and~~prices ~~development.~~increased Wefrom ~~recognized~~an ~~$578~~average of ~~federal~~$0.94 ~~government~~per ~~contract~~pound ~~cost reimbursements as a reduction~~ in ~~research~~the ~~and~~nine ~~development~~months ~~expenses~~ended inOctober ~~our~~31, ~~consolidated~~2010 ~~statement~~to of$1.12 per ~~operations~~pound ~~for~~in the ~~second~~nine ~~quarter~~months ofended ~~fiscal~~October ~~year 2012~~31, ~~as compared~~2011. toThe ~~$206~~increase in ~~the~~lead ~~second~~prices ~~quarter~~and growth of ~~fiscal~~the ~~2011.~~Company’s ~~Government~~Asia ~~contract~~business ~~cost~~was ~~reimbursements~~partially ~~increased~~offset inby ~~fiscal~~continued ~~year~~pressures ~~2012~~on ~~compared~~volumes ~~to fiscal year 2011~~ as wea ~~have~~result ~~dedicated~~of ~~more~~the ~~resources~~general toeconomic ~~work~~environment, onprincipally ~~the~~in ~~project~~its ~~resulting~~North inAmerican ~~higher~~UPS ~~reimbursable expenses~~markets.

The Company fully impaired the carrying value of goodwill in the second quarter of fiscal year 2011 resulting in an impairment charge of $59,978. The Company performs the annual goodwill impairment test in the fourth quarter of the fiscal year for its one reporting unit. Given decrease in market capitalization and continuing operating losses in the prior fiscal year, the Company tested for impairment on July 31, 2010. As a result, the Company first completed an assessment of its long-lived assets within the various asset groupings. The Company assessed the carrying value of its goodwill by using the two-step, fair-value based test, at July 31, 2010, in accordance with accounting guidance for goodwill and other intangible assets. The first step compared the fair value of its reporting unit to its carrying amount, including goodwill. As the carrying amount of the reporting unit exceeded its fair value, the second step was performed. The second step was performed and determined that the implied fair value of goodwill was in excess of the book value of goodwill, and in connection with this second step, the Company recorded a non-cash pre-tax goodwill impairment charge of $59,978 representing the full value of goodwill as of July 31, 2010. Also, as discussed below, as a result of the impairment charge the Company no longer has a deferred tax liability related to an indefinite lived intangible. As such, in the quarter ended July 31, 2010, the Company recorded an income tax benefit in the amount of $14,245 for the reversal of this deferred tax liability. 25

23MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

~~Table~~CONDITION ofAND ~~Contents~~RESULTS OF OPERATIONS (continued)

~~MANAGEMENT’S~~(Dollars ~~DISCUSSION~~in ~~AND~~thousands, ~~ANALYSIS~~except OFper ~~FINANCIAL~~share data)

~~CONDITION~~Gross ~~AND~~profit ~~RESULTS~~for OFthe ~~OPERATIONS~~nine months ended October 31, 2011 increased $3,602, or 11.3%, to $35,408 from $31,806 in the nine months ended October 31, 2010. Gross margins increased to 12.8% from 12.4% in the prior fiscal year. Gross margin has improved over the prior year's comparable quarter primarily due to higher volumes in Asia, lead price recovery and cost reduction actions offset by unfavorable product mix shifts.

~~(Dollars~~Selling, ingeneral ~~thousands~~and administrative expenses for the nine months ended October 31, ~~except~~2011, ~~per~~increased ~~share~~$1,165 ~~data)~~or 4.4% to $27,621 from $26,456. The increase is primarily due to higher legal fees of approximately $300, higher stock option expense of approximately $300 and severance costs of approximately $800. As a percentage of sales, selling, general and administrative expenses were 10.0% and 10.3% in the nine months ended October 31, 2011 and 2010, respectively.

~~Operating~~Research ~~income~~and indevelopment expenses for the ~~second~~nine ~~quarter~~months ofended ~~fiscal~~October ~~year~~31, ~~2012~~2011 ~~was~~decreased $~~1,197~~49 ~~compared~~or 1.0% to a$4,796 ~~loss of~~from $594,~~743~~845 in the ~~second~~nine ~~quarter~~months ofended ~~fiscal~~October ~~year~~31, ~~2011~~2010. ~~The~~As ~~change~~a ispercentage ~~mainly~~of ~~due~~sales, toresearch ~~the~~and ~~non-recurring~~development ~~goodwill~~expenses ~~impairment~~decreased ~~charge~~from ~~that~~1.9% ~~was~~in ~~recorded~~the innine ~~fiscal~~months ~~year~~ended ~~2011~~October 31, ~~increase~~2010 into ~~gross~~1.7% ~~margin~~in ~~and~~ the ~~reduction~~nine inmonths ~~selling,~~ended ~~general~~October ~~and administrative expenses~~31, ~~as discussed above~~2011.

~~Analysis~~The Company fully impaired the carrying value of ~~Change~~goodwill in ~~Operating~~the ~~Income~~nine ~~for~~months ended October 31, 2010 resulting in an impairment charge of $59,978. The Company historically performs the ~~second~~annual goodwill impairment test in the fourth quarter of the fiscal year ~~2012~~for vsits one reporting unit. Given decrease in market capitalization and continuing operating losses in the prior fiscal year, ~~2011:~~the Company tested for impairment on July 31, 2010. As a result, the Company first completed an assessment of its long-lived assets within the various asset groupings. The Company assessed the carrying value of its goodwill by using the two-step, fair-value based test, at July 31, 2010, in accordance with accounting guidance for goodwill and other intangible assets. The first step compared the fair value of its reporting unit to its carrying amount, including goodwill. As the carrying amount of the reporting unit exceeded its fair value, the second step was performed. The second step was performed and determined that the implied fair value of goodwill was in excess of the book value of goodwill, and in connection with this second step, the Company recorded a non-cash pre-tax goodwill impairment charge of $59,978 representing the full value of goodwill as of July 31, 2010. Also, as discussed below, as a result of the impairment charge the Company no longer has a deferred tax liability related to an indefinite lived intangible. As such, in the nine months ended October 31, 2010, the Company recorded an income tax benefit in the amount of $14,245 for the reversal of this deferred tax liability.

Fiscal Year 2012 vs. 2011
Operating Loss Three months ended July 31, 2010	$	(59,743	)
Lead, net		(4,361	)
Price / Volume / Mix		5,144
Goodwill impairment		59,978
Warranty		551
Pension		216
Severance and restructuring		(211	)
Other		(377	)
Operating Income Three months ended July 31, 2011	$	1,197

On September 14, 2010, the Company announced plans to close its Leola, Pennsylvania manufacturing facility and transfer production to other existing facilities. When complete, the closure plan will result in the elimination of approximately 85 positions. Restructuring charges incurred during the quarter ended October 31, 2010 include $305 in severance costs and $1,523 in fixed asset impairment charges. In September 2011, the Company announced plans to restructure its Shanghai, China manufacturing facility incurring severance costs of $809 during the quarter ended October 31, 2011. In addition in the nine months ended October 31, 2011, we recorded an additional $125 in costs for the closure of the Leola, Pennsylvania plant.

~~Interest~~Operating ~~expense,~~income ~~net,~~for in the ~~second~~nine ~~quarter~~months ofended ~~fiscal~~October ~~year~~31, ~~2012~~2011 ~~decreased~~was $2,~~924~~055 orcompared ~~69.6%~~ to ~~$1,275~~an ~~from~~ operating loss of $461,~~199~~301 in the ~~second~~nine ~~quarter~~months ofended ~~fiscal~~October ~~year 2011~~31, 2010. The decreased loss is primarily due to the ~~debt~~goodwill ~~for~~impairment, ~~equity~~higher ~~exchange~~restructuring ~~completed~~charges infor the ~~fourth~~announced ~~quarter~~closure of the Leola plant in fiscal year 2011. ~~This~~as ~~exchange~~well ~~reduced~~as ~~the~~increased ~~outstanding~~gross ~~balances~~profits onthat ~~the~~resulted ~~convertible~~from ~~notes~~pricing byactions ~~approximately~~and ~~$125,000 which~~cost ~~was~~reduction initiatives partially offset by higher ~~average debt balances on the credit facility in the second quarter of fiscal 2012~~selling, ~~compared~~general toand ~~the~~administrative ~~second quarter for fiscal 2011~~costs.

~~Other~~Analysis ~~expense was $812 in the second quarter~~ of ~~fiscal~~Change ~~year 2012 compared to $674~~ in ~~the~~Operating ~~second~~Loss ~~quarter~~for ~~of fiscal year 2011. The increase was primarily due to costs incurred related to our going private transaction of $341 in fiscal year 2012 and currency remeasurement losses of $342 in~~ the ~~second~~nine ~~quarter~~months ofended ~~fiscal~~October ~~year~~31, ~~2012 compared to $165 in the second quarter of fiscal year~~ 2011 ~~partially~~vs. ~~offset by higher environmental costs in~~ the ~~second quarter~~nine ofmonths ~~fiscal~~ended ~~year~~October ~~2011~~31, ~~of $218.~~ 2010

Income tax expense of $169 was recorded in the second quarter of fiscal year 2012, compared to income tax benefit of $13,794 in the second quarter of fiscal year 2011. Tax expense in the second quarter of fiscal year 2012 was primarily due to foreign taxes on profits which were not offset by losses for which no tax benefit is recognized. Tax benefit in the second quarter of fiscal year 2011 is primarily a result of the goodwill impairment charge discussed above, whereby the Company no longer has a deferred tax liability related to an indefinite lived intangible. As such, in the quarter ended July 31, 2010, the Company recorded an income tax benefit in the amount of $14,245 for the reversal of this deferred tax liability, offset by foreign tax expense on profits which were not offset by losses. 26

~~Generally,~~MANAGEMENT’S ~~accounting~~DISCUSSION ~~standards~~AND ~~require~~ANALYSIS ~~companies~~OF to provide for income taxes each quarter based on their estimate of the effective tax rate for the full year. The authoritative guidance for accounting for income taxes allows the use of the discrete method when, in certain situations, the actual interim period effective tax rate may be used if it provides a better estimate of income tax expense. Due to our losses in the US, the full valuation allowance in the US, and the relatively small amount of projected US income, it is our position that the discrete method provides a more accurate estimate of income tax expense for domestic taxes and therefore domestic income tax expense for the current quarter has been presented using that method. Taxes on international earnings continue to be calculated using an estimate of the effective tax rate for the full year. FINANCIAL

~~Noncontrolling~~CONDITION ~~interest~~AND ~~reflects~~RESULTS ~~the~~OF ~~33%~~OPERATIONS ~~ownership interest in the joint venture battery business located in Shanghai, China, that is not owned by the Company. Net income attributable to Noncontrolling interest was $70 in~~ (continued)

24(Dollars in thousands, except per share data)

Fiscal Year 2012 vs. 2011
Operating Loss Nine months ended October 31, 2010	$	(61,301	)
Lead, net		(12,732	)
Price / Volume / Mix		15,023
Goodwill impairment		59,978
Warranty		497
Pension		500
FY 2011 Leola severence and restructuring		1,828
China severance		(809	)
Other severance and restructuring		(891	)
Decrease in research and development costs		50
Other		(88	)
Operating Income Nine months ended October 31, 2011	$	2,055

~~MANAGEMENT’S~~Interest ~~DISCUSSION~~expense, ~~AND~~net, ~~ANALYSIS~~for OFthe ~~FINANCIAL~~nine months ended October 31, 2011, decreased $7,969 or 67.5% to $3,844 from $11,813 in the nine months ended October 31, 2010, primarily due to the debt for equity exchange completed in the fourth quarter of fiscal year 2011. This exchange reduced the outstanding balances on the convertible notes by approximately $125,000 which was partially offset by higher average debt balances on the credit facility and China borrowings in the first nine months of fiscal 2012 compared to fiscal year 2011.

~~CONDITION~~Other ~~AND~~expense ~~RESULTS~~was OF$3,126 ~~OPERATIONS~~for the nine months ended October 31, 2011 compared to $2,728 for the nine months ended October 31, 2010. The change was primarily due to costs incurred related to our going private transaction of $2,221 in the current fiscal year, recording approximately $900 to increase our environmental reserves related to previously closed and/or disposed facilities in fiscal year 2011 compared to $110 in fiscal year 2012, expenses of $1,264 related to the debt for equity exchange in fiscal 2011 compared to $145 in fiscal year 2012 and a currency measurement loss of $348 in the current fiscal year compared to a currency measurement gain of $58 in the prior fiscal year.

~~(Dollars~~Income tax expense of $512 was recorded the nine months ended October 31, 2011, compared to income tax benefit of $13,239 the nine months ended October 31, 2010. Tax expense for the nine months ended October 31, 2011 was primarily due to non-cash deferred tax expenses. Tax benefit for the nine months ended October 31, 2010 is primarily a result of the goodwill impairment charge discussed above, whereby the Company no longer has a deferred tax liability related to an indefinite lived intangible. As such, for the nine months ended October 31, 2010, the Company recorded an income tax benefit in ~~thousands~~the amount of $14,245 ~~except~~for ~~per~~the ~~share~~reversal ~~data)~~of this deferred tax liability, offset by foreign tax expense on profits which were not offset by losses.

~~fiscal~~Generally, ~~year~~accounting ~~2012~~standards ~~compared~~require companies to aprovide ~~net~~for ~~loss~~income ~~attributable~~taxes toeach ~~Noncontrolling~~quarter ~~interest~~based on their estimate of ~~$142~~the ineffective ~~fiscal~~tax ~~year~~rate ~~2011~~for the full year. The ~~increase~~authoritative ~~was~~guidance ~~driven~~for byaccounting ~~higher~~for ~~profitability~~income taxes allows the use of the discrete method when, in certain situations, the ~~joint~~actual ~~venture~~interim ~~driven~~period ~~by increased~~effective ~~sales~~tax ~~volume~~rate may be used if it provides a better estimate of income tax expense. Due to our losses in the US and the full valuation allowance in the US, it is our position that the discrete method provides a more accurate estimate of income tax expense for domestic taxes and therefore domestic income tax expense for the current quarter has been presented using that method. Taxes on international earnings continue to be calculated using an estimate of the effective tax rate for the full year.

AsNoncontrolling ainterest ~~result~~reflects ofthe 33% ownership interest in the ~~above,~~joint ~~net~~venture ~~loss~~battery ~~attributable~~business tolocated ~~C&D~~in ~~Technologies~~Shanghai, ~~Inc~~China, that is not owned by the Company. ofIn ~~$1,129~~the ~~was~~nine ~~recorded in~~months ended October 31, 2011, the ~~second~~joint ~~quarter~~venture ofhad ~~fiscal~~a ~~year~~net ~~2012~~income asattributable to noncontrolling interest of $221 compared to $~~50,680~~126 in the ~~comparable~~nine ~~period~~months inended ~~the~~October ~~prior~~31, ~~year~~2010. ~~Basic~~The improvement is reflected by increasing revenue and ~~diluted~~related ~~losses~~improved ~~per~~performance ~~share~~of ~~were~~the ~~$0.07~~Company’s ~~and~~China ~~$48.91~~operations, inpartially offset by the ~~second~~severence ~~quarter~~charges ofrecorded ~~fiscal~~in ~~year~~the ~~2012~~third ~~and~~fiscal ~~2011,~~year ~~respectively~~2012.

Comprehensive income attributable to C&D Technologies, Inc. increased by $49,943 in the second quarter of fiscal year 2012 to income of $124 compared to a loss of $49,819 in the second quarter of fiscal year 2011. This decrease was due primarily to the decrease in net loss attributable to C&D from $50,680 in the second quarter of fiscal 2011 to $1,129 in the second quarter of fiscal year 2012, an unrealized gain on derivative instruments of $238 in the second quarter of fiscal year 2012 compared to $39 in second quarter of fiscal year 2011, an increase in pension liability adjustments to $808 in fiscal year 2012 compared to $632 in fiscal year 2011 partially offset by an increase in comprehensive income attributable to noncontrolling interests of $160 in fiscal year 2012 compared to a loss of $53 in fiscal year 2011. 27

~~Six~~MANAGEMENT’S ~~Months~~DISCUSSION ~~Ended~~AND ~~July 31,~~ANALYSIS ~~2011~~OF ~~compared to Six Months Ended July 31, 2010~~ FINANCIAL

~~Net~~CONDITION ~~sales~~AND ~~for~~RESULTS ~~the~~OF ~~six~~OPERATIONS months ended July 31, 2011 increased $14,371 or 8.5% to $182,909 from $168,538 in the six months ended July 31, 2010. This increase was primarily due to strong growth in Asia and contractual price increases resulting from the significant increases in the price of lead compared to the same period in the prior fiscal year. Average London Metal Exchange (“LME”) prices increased from an average of $0.91 per pound in the six months ended July 31, 2010 to $1.18 per pound in the six months ended July 31, 2011. The increase in lead prices and growth of the Company’s Asia business was partially offset by continued ~~pressures on volumes as a result of the general economic environment, principally in our North American UPS sales channel.~~ )

~~Gross~~(Dollars ~~profit for the six months ended July 31, 2011 increased $3,373, or 16.0%, to $24,384 from $21,011~~ in ~~the six months ended July 31~~thousands, ~~2010.~~except ~~Gross~~per ~~margins~~share increased to 13.3% from 12.5% in the prior year. Gross margin has improved over the prior year’s comparable quarter primarily due to higher volumes in Asia, favorable product mix shifts and cost reduction actions. data)

~~Selling,~~As ~~general~~a ~~and~~result ~~administrative~~of ~~expenses for~~ the ~~six~~above, ~~months~~net ~~ended~~loss ~~July 31,~~attributable ~~2011,~~to ~~increased~~C&D of $~~817~~5,648 orwas ~~4.4%~~recorded compared to $1962,~~248~~729 ~~from $18,431~~ in the prior year. ~~The~~Basic ~~increase is primarily due to severance~~ and ~~restructuring~~diluted ~~charges~~losses inper ~~the~~share ~~six~~were ~~months ended July 31, 2011 of~~ $~~890~~0.37 ~~As a percentage of sales, selling, general~~ and ~~administrative expenses were 10~~$60.5%53 ~~and 10.9%~~ in the ~~six~~first nine months ~~ended~~ ~~July 31,~~of ~~2011~~fiscal year 2012 and ~~2010~~2011, respectively.

~~Research~~Comprehensive ~~and~~loss ~~development~~attributable ~~expenses~~to ~~for~~C&D ~~the~~Technologies, ~~six~~Inc. ~~months~~decreased ~~ended~~by ~~July 31~~$54, ~~2011~~667 ~~decreased~~in ~~$212~~the orfirst ~~6.3%~~nine months of fiscal year 2012 to $34,~~165~~188 for the nine months ended October 31, 2011 from $358,~~377~~855 in the ~~six~~nine months ended ~~July~~ October 31, 2010. AsThis adecrease ~~percentage~~was ofprimarily ~~sales,~~due ~~research~~to ~~and~~the ~~development~~net ~~expenses~~loss ~~decreased~~attributable ~~from~~to ~~2.0%~~C&D Technologies of $5,648 in the ~~six~~nine months ended ~~July~~ October 31, ~~2010~~2011 as compared to ~~1.7%~~$62,729 in the ~~six~~comparable ~~months~~period ~~ended July 31,~~at ~~2011.~~the Weprevious ~~receive~~fiscal ~~cost~~year, ~~reimbursements~~an ~~under~~increase ain ~~federal~~the ~~government~~pension ~~contract~~liability ~~related~~adjustment to ~~lithium~~$2,416 ~~battery~~in ~~research~~fiscal ~~and~~year ~~development.~~2012 Wefrom ~~recognized~~ $1,~~241~~770 ofin ~~federal~~fiscal ~~government~~year ~~contract~~2011 ~~cost~~and ~~reimbursements~~an asincrease ~~a reduction~~ in ~~research~~foreign ~~and development~~currency ~~expenses~~translation inadjustments ~~our~~to ~~consolidated~~$1,470 ~~statement~~in offiscal ~~operations~~year ~~for~~2012 ~~the~~from ~~six~~$827 ~~months~~in ~~ended~~fiscal ~~July 31,~~year 2011, aspartially ~~compared~~offset toby ~~$386~~an inunrealized ~~the~~loss ~~six~~on ~~months~~derivative ~~ended~~instruments ~~July 31~~of $1,950 ~~2010.~~in ~~Government~~the ~~contract~~first ~~cost~~nine ~~reimbursements~~months ~~increased~~of in fiscal year 2012 compared to ~~fiscal~~an ~~year~~unrealized ~~2011~~gain asof we$1,542 ~~have~~in ~~dedicated~~first ~~more~~nine ~~resources~~months toof ~~work~~fiscal onyear ~~the project resulting in higher reimbursable expenses~~2011.

~~The~~Liquidity Company fully impaired the carrying value of goodwill in the six months ended July 31, 2010 resulting in an impairment charge of $59,978. The Company performs the annual goodwill impairment test in the fourth quarter of the fiscal year for its one reporting unit. Given decrease in market capitalization and ~~continuing~~Capital operating losses in the prior fiscal year, the Company tested for impairment on July 31, 2010. As a result, the Company first completed an assessment of its long-lived assets within the various asset groupings. The Company assessed the carrying value of its goodwill by using the two-step, fair-value based test, at July 31, 2010, in accordance with accounting guidance for goodwill and other intangible assets. The first step compared the fair value of its reporting unit to its carrying amount, including goodwill. As the carrying amount of the reporting unit exceeded its fair value, the second step was performed. The second step was performed and determined that the implied fair value of Resources

25Net cash provided by operating activities was $1,218 for the nine months ended October 31, 2011, as compared to cash used of $12,378 in the comparable period of the prior fiscal year. This is primarily the result of (i) a significant decrease in the net loss after adjusting for non-cash items as a result of improved operating performance and lower interest expense as a result of our financial restructuring in the fourth quarter of fiscal year 2011,(ii) an increase in cash provided by inventory of $5,383 in the current fiscal year compared to $3,013 in the prior fiscal year driven by operational improvements and improved management of inventory, (iii) a cash inflow from accounts payable of $2,905 compared to a cash outflow of $7,444 in the prior year attributable principally to receiving more favorable credit terms in the current fiscal year compared to credit tightening the Company experienced in the prior fiscal year as well as timing of payments and (iv) a decrease in cash outflows from accounts receivable of $5,448 compared to $7,595 in the prior year due to timing of sales and improved collections. These changes were partially offset by a decrease in other current liabilities of $1,599 compared to an increase of $5,462 in the prior fiscal year due primarily to receipt of an advance payment (deferred revenue) of approximately $4,500 for a large order in China in fiscal year 2011 and an increase in pension payment s of approximately $1,800.

~~Table~~Net cash used in investing activities was $7,434 in the first nine months of ~~Contents~~fiscal year 2012 as compared to $5,494 in the first nine months of fiscal year 2011. In fiscal year 2012, the Company had purchases of property, plant and equipment of $4,761 compared with $5,501 in the prior year. Capital expenditures have been principally in support of cost reduction activities and new product development. Fiscal 2012 capital expenditures have been impacted by the Company’s management of liquidity. In addition, there was an increase in restricted cash of $2,673 related to commodity hedging activities in the first nine months of fiscal 2012 compared to $7 in the prior fiscal year.

~~MANAGEMENT~~Net cash provided by financing activities decreased $9,238 to $8,853 for the nine months ended October 31, 2011, as compared to $18,091 in the comparable period of the prior fiscal year. Proceeds from net borrowings under the Company’Ss ~~DISCUSSION~~Credit ~~AND~~Facility, ~~ANALYSIS~~offset OFby ~~FINANCIAL~~debt acquisition costs, and additional borrowings under a short term credit facility in China were the primary sources of cash provided by financing activities in fiscal year 2012. The primary purpose of the increased borrowings in the current fiscal year was to fund the cash used in operations and to fund capital expenditures.

~~CONDITION~~The ~~AND~~Company ~~RESULTS~~has OFput ~~OPERATIONS~~provisions due on its convertible senior notes that required us to pay the following principal payments: $1.24 million on November 15, 2011, with respect to the 2006 Notes, and $0.7 million on November 15, 2012, with respect to the 2005 Notes.

~~(Dollars~~Our liquidity is primarily determined by our availability under the Credit Facility, our unrestricted cash balances and cash flows from operations. If our cash requirements exceed the cash provided by our operating activities, then we would look to our unrestricted cash balances and the availability under our Credit Facility to satisfy those needs. Important factors and assumptions made by us when considering future liquidity include, but are not limited to, the stabilization of lead prices, future demand from customers, continued sufficient availability of credit from our trade vendors and the ability to re-finance or obtain debt in ~~thousands~~the future. To the extent unforeseen events occur or operating results are below forecast, ~~except~~we ~~per~~believe ~~share~~we ~~data)~~can take certain actions to conserve cash, such as delay major capital investments, other discretionary spending reductions or pursue financing from other sources to preserve liquidity, if necessary. Despite these potential actions, if we are not able to satisfy our cash requirements in the near term from cash provided by operating activities, or through access to our Credit Facility, we may not have the minimum levels of cash necessary to operate the business on an ongoing basis.

goodwill was in excess of the book value of goodwill, and in connection with this second step, the Company recorded a non-cash pre-tax goodwill impairment charge of $59,978 representing the full value of goodwill as of July 31, 2010. Also, as discussed below, as a result of the impairment charge the Company no longer has a deferred tax liability related to an indefinite lived intangible. As such, in the six months ended July 31, 2010, the Company recorded an income tax benefit in the amount of $14,245 for the reversal of this deferred tax liability. 28

~~Operating~~MANAGEMENT’S ~~income~~DISCUSSION ~~for~~AND ~~the~~ANALYSIS ~~six~~OF months ended July 31, 2011 was $1,971 compared to a loss of $60,775 in the six months ended July 31, 2010. The change is primarily the non-recurring goodwill impairment taken in the prior year, improved margins and lower research and development expenses partially offset by increased selling, general and administrative costs and, as discussed above. FINANCIAL

~~Analysis~~CONDITION ofAND ~~Change~~RESULTS inOF ~~Operating~~OPERATIONS ~~Loss for the six months ended July 31, 2011 vs. the six months ended July 31, 2010:~~ (continued)

Fiscal Year 2012 vs. 2011
Operating Loss Six months ended July 31, 2010	$	(60,775	)
Lead, net		(6,482	)
Price / Volume / Mix		9,970
Goodwill impairment		59,978
Warranty		184
Pension		282
Decrease in research and development costs		212
Severance and restructuring		(891	)
Other		(507	)
Operating Income Six months ended July 31, 2011	$	1,971

(Dollars in thousands, except per share data)

~~Interest~~Our ~~expense,~~liquidity ~~net,~~derived ~~for~~from the ~~six~~Credit ~~months~~Facility, ~~ended~~as ~~July 31~~amended, ~~2011,~~is ~~decreased~~based ~~$5,041~~on oravailability 66determined by a borrowing base.8% toIn $2addition,~~506 from~~ ~~$7,547~~the ~~for~~Credit Facility requires the ~~six~~Company ~~months~~to ~~ended~~meet ~~July~~ a minimum fixed charge coverage ratio if the excess availability falls below $7,500 through August 31, ~~2010~~2011, ~~primarily~~adjusted ~~due~~ to ~~the~~$10,000 ~~debt~~thereafter. ~~for~~The ~~equity~~fixed ~~exchange~~charge ~~completed~~coverage inratio for the ~~fourth~~last ~~quarter~~twelve ofconsecutive fiscal ~~year~~month ~~2011~~period shall be not less than 1.10:1.00. ~~This~~As ~~exchange~~of ~~reduced~~October 31, 2011, the ~~outstanding~~Company ~~balances~~was onin compliance with the ~~convertible~~fixed ~~notes~~charge bycoverage ~~approximately $125,000~~ratio. ~~which~~The ~~was~~Credit ~~partially~~Facility ~~offset~~also bypreviously ~~higher~~included ~~average~~minimum ~~debt~~EBITDA ~~balances~~requirements onbeginning with our quarter ending April 30, 2011. Pursuant to an amendment to the ~~credit~~Credit ~~facility~~Facility in ~~the~~December ~~first~~2010 ~~six~~these ~~months~~minimum ofEBITDA ~~fiscal~~requirements ~~2012~~were ~~compared~~eliminated tofor ~~fiscal~~the ~~year~~duration ~~2011.~~of the term of the Credit Facility.

~~Other~~Although ~~expense~~our ~~was~~credit ~~$692~~facility ~~for~~syndicate ~~the~~bank ~~six~~is ~~months~~currently ~~ended~~meeting ~~July 31~~all of their lending obligations, ~~2011~~there ~~compared~~can be no assurance that these banks will be able to ~~$1,410~~meet ~~for~~their obligations in the ~~six~~future. ~~months~~Our ~~ended~~current ~~July~~credit facility does not expire until December, 2013. As of October 31, ~~2010.~~2011, ~~The~~the ~~decrease~~maximum availability calculated under the borrowing base was ~~primarily~~approximately ~~due~~$68,874, toof ~~recording~~which $~~900~~50,068 towas ~~increase~~funded ~~our environmental~~(including ~~reserves~~$20,000 ~~related~~from tothe ~~previously~~term ~~closed~~loan tranche), and~~/or~~ ~~disposed~~$4,507 ~~facilities~~was inutilized ~~fiscal~~for ~~year~~letters ~~2011,~~of ~~partially~~credit. ~~offset~~As byprovided ~~costs~~under ~~related~~the toCredit ~~our~~Facility, ~~going~~excess ~~private~~borrowing ~~transaction~~capacity ofwill ~~$341~~be inavailable ~~fiscal~~for ~~year~~future ~~2012.~~working capital needs and general corporate purposes.

~~Income~~We ~~tax~~expect ~~expense~~to ofhave ~~$235~~access ~~was~~to ~~recorded~~liquidity in the ~~six~~capital ~~months~~markets ~~ended~~on ~~July 31,~~favorable ~~2011~~terms ~~compared~~before tothe anmaturity ~~income~~dates ~~tax benefit~~ of ~~$13,400~~our ~~for~~current ~~the six~~credit ~~months~~facilities ~~ended~~and ~~July 31,~~we ~~2010.~~do ~~Tax~~not ~~expense~~expect ~~for~~a ~~the~~significant ~~six~~number ~~months~~of ~~ended~~our ~~July 31,~~lenders ~~2011~~to ~~was~~default ~~primarily~~on ~~related~~their tocommitments ~~foreign~~thereunder. ~~taxes~~In onaddition, ~~profits~~we ~~and~~can ~~domestic~~delay ~~losses~~major ~~for~~capital ~~which~~investments noor ~~tax~~pursue ~~benefit~~financing ~~was~~from ~~recorded.~~other ~~Tax~~sources ~~benefit~~to ~~for~~preserve ~~the~~liquidity, ~~six~~if ~~months~~necessary. ~~ended July 31,~~Cash ~~2010~~from isoperations ~~primarily~~and aavailability ~~result~~under of the ~~goodwill~~amended ~~impairment~~Credit ~~charge~~Facility ~~discussed~~is ~~above,~~expected ~~whereby~~to ~~the~~be ~~Company~~sufficient noto ~~longer~~meet ~~has~~our aongoing ~~deferred~~cash ~~tax~~needs ~~liability~~for ~~related~~working tocapital anrequirements, ~~indefinite~~restructuring, ~~lived~~capital ~~intangible.~~expenditures Asand ~~such,~~debt service for ~~the~~at ~~six~~least ~~months~~the ~~ended~~next ~~July 31,~~twelve ~~2010, the~~months. ~~Company~~We ~~recorded~~estimate ancapital ~~income~~spending ~~tax~~for ~~benefit~~fiscal inyear ~~the~~2012 ~~amount~~to ofbe approximately $147,~~245~~000 ~~for~~related ~~the~~primarily ~~reversal~~to ofgrowth ~~this~~in ~~deferred~~Asia ~~tax~~and ~~liability,~~routine ~~offset~~maintenance byactivities. ~~foreign~~In ~~tax~~the ~~expense~~third onquarter ~~profits~~of ~~which~~fiscal ~~were~~year ~~not~~2012, ~~offset~~we bymade ~~losses.~~$4,853 in pension contributions.

~~Generally~~On October 3, ~~accounting~~2011, ~~standards~~we ~~require~~entered ~~companies~~into toa ~~provide~~definitive ~~for~~merger ~~income~~agreement, ~~taxes~~pursuant ~~each~~to ~~quarter~~which ~~based~~we onwill ~~their~~be ~~estimate~~acquired by an affiliate of ~~the~~Angelo, ~~effective~~Gordon ~~tax rate~~& Co. in an all-cash transaction for ~~the~~$9.75 ~~full~~per ~~year~~share. The ~~authoritative~~transaction ~~guidance~~is ~~for~~not ~~accounting~~subject ~~for~~to ~~income~~a ~~taxes~~financing ~~allows~~condition. Under the ~~use~~terms of the ~~discrete~~merger ~~method when~~agreement, ineach ~~certain~~outstanding ~~situations,~~share ~~the~~of ~~actual~~our ~~interim~~common ~~period~~stock ~~effective~~not ~~tax~~owned ~~rate~~by ~~may~~Angelo, beGordon ~~used~~& ifCo., itor ~~provides~~its aaffiliates ~~better~~will ~~estimate of income~~be ~~tax~~converted ~~expense.~~into ~~Due~~the right to ~~our~~receive ~~losses~~$9.75 in cash, subject to the USterms and conditions of the ~~full~~merger ~~valuation~~agreement. ~~allowance~~Stockholders inaffiliated ~~the~~with USAngelo, itGordon is& ~~our~~Co. ~~position~~who ~~that~~hold approximately 65% of the ~~discrete~~outstanding ~~method~~shares ~~provides~~of aour ~~more~~common ~~accurate~~stock ~~estimate~~have ofexecuted ~~income~~a ~~tax~~written ~~expense~~consent ~~for~~approving ~~domestic~~the ~~taxes~~transaction, ~~and~~thereby ~~therefore~~providing ~~domestic~~the ~~income tax~~required ~~expense~~stockholder approval for ~~the~~this ~~current~~transaction. ~~quarter~~As ~~has~~a ~~been~~result, ~~presented~~no ~~using~~further ~~that~~action ~~method. Taxes~~by onother ~~international~~stockholders ~~earnings~~of ~~continue~~us are required to beapprove ~~calculated~~the ~~using~~transaction, anbut ~~estimate~~consummation of the ~~effective~~transaction ~~tax~~remains ~~rate~~subject ~~for~~to certain closing conditions as set forth in the ~~full~~merger ~~year~~agreement. The transaction is expected to close in the fourth quarter of this fiscal year.

26 29

~~Table~~MANAGEMENT’S ofDISCUSSION ~~Contents~~AND ANALYSIS OF FINANCIAL

~~MANAGEMENT’S~~CONDITION ~~DISCUSSION~~ AND ~~ANALYSIS~~RESULTS OF ~~FINANCIAL~~OPERATIONS (continued)

~~CONDITION~~(Dollars ~~AND~~in ~~RESULTS~~thousands, OFexcept ~~OPERATIONS~~per share data)

~~(Dollars~~Contractual inObligations ~~thousands,~~and ~~except~~Commercial ~~per share data)~~ Commitments

~~Noncontrolling~~The ~~interest~~following ~~reflects~~tables ~~the~~summarize ~~33% ownership interest in~~ the ~~joint venture battery business located in Shanghai, China, that is not owned by the~~ Company.’s Incontractual ~~the~~obligations ~~six~~and ~~months~~commercial ~~ended~~commitments ~~July 31,~~as ~~2011, the joint venture had net income attributable to noncontrolling interest~~ of ~~$292~~October ~~compared to a net loss attributable to noncontrolling interest of $48 in the six months ended July~~ 31, ~~2010. The increase was driven by higher profitability in the joint venture driven by increased sales volume.~~ 2011:

As a result of the above, net loss attributable to C&D of $1,754 was recorded compared to $56,284 in the prior year. Basic and diluted losses per share were $0.12 and $54.38 in the first six months of fiscal year 2012 and 2011, respectively.

	Payments Due by Period
			Less than		1 - 3		4 - 5		After
Contractual Obligations:	Total		1 year		years		years		5 years
Debt*	$	64,906	$	7,781	$	54,172	$	2,953	$	0
Interest payable on notes*		10,469		4,730		5,463		276		0
Operating leases		6,675		1,446		2,511		1,643		1,075
Projected – lead purchases**		14,000		14,000		0		0		0
Equipment		352		352		0		0		0
Capital Leases		100		58		35		7		0

Total contractual cash obligations	$	96,502	$	28,367	$	62,181	$	4,879	$	1,075

~~Comprehensive~~* These ~~income~~amounts ~~attributable~~assume tothat ~~C&D Technologies, Inc. decreased by $54,982 in~~ the ~~first~~convertible ~~six~~notes ~~months~~are ofcurrent ~~fiscal year 2012 to $327 for the six months ended July 31~~liabilities, ~~2011~~show ~~compared to a loss of $54,655 in~~ the ~~six~~Credit ~~months~~Facility ~~ended July 31, 2010. This decrease was primarily due to the net loss attributable to C&D Technologies of 1,754 in the six months ended July 31, 2011~~ as ~~compared~~paid ~~to $56,284~~ in ~~the comparable period at the previous~~ fiscal year, a2014 ~~increase~~and ininclude ~~the~~interest ~~pension~~on ~~liability~~the ~~adjustment~~Credit toFacility ~~$1,611~~through in fiscal year ~~2012~~2014 ~~from~~calculated ~~$1,180~~at inthe ~~fiscal~~same ~~year 2011~~rate and anoutstanding ~~increase~~balance inat ~~foreign~~October ~~currency translation adjustments to $1,072 for the six months ended July~~ 31, 2011 from $235 in fiscal year 2011 partially offset by an unrealized loss on derivative instruments of $295 in the first six months of fiscal year 2012 compared to income of $304 in first six months of fiscal year 2011 and anassume ~~increase in comprehensive income attributable to noncontrolling interests of $599 in~~ the ~~six~~China ~~months~~debt ~~ended~~up ~~July 31,~~through ~~2011 compared to $42 in~~ fiscal year ~~2011.~~ 2015

~~Liquidity~~** Amounts ~~and~~are ~~Capital~~based ~~Resources~~on the cash price of lead at October 31, 2011 which was $0.90.

Net cash provided by operating activities was $874 for six months ended July 31, 2011, as compared to cash used in operating activities of $7,032 in the comparable period of the prior fiscal year. This is primarily the result of (i) a reduction in the net loss to $1,462 in the current fiscal year compared to $10,599 (after adjusting for the non-cash charges related to the goodwill impairment, net of taxes of $45,733) as a result of improved operating performance and lower interest expense as a result of our financial restructuring in the fourth quarter of fiscal year 2011, (ii) a significant increase in cash provided by inventory of $10,054 in the current fiscal year compared to $4,925 in the prior fiscal year driven by operational improvements and improved management of inventory and (iii) a reduction in accounts payable of $5,300 in the current fiscal year compared to $13,405 in the prior fiscal year due to lower lead costs and trade credit tightening in fiscal year 2011. These changes were partially offset by an increase in accounts receivable of $7,019 in the current fiscal year compared with a decrease of $231 in the prior fiscal year driven by increased sales partially offset by improved inventory management.

	Amount of Commitment Expiration per Period
	Total
	Amount		Less than		1 - 3		4 - 5		After
Other Commercial Commitments	Committed		1 year		years		years		5 years
Standby letters of credit	$	4,507	$	988	$	62	$	3,457	$	0
Total commercial commitments	$	4,507	$	988	$	62	$	3,457	$	0

Net cash used in investing activities was $2,797 in the first six months of fiscal year 2012 as compared to $5,075 in the first six months of fiscal year 2011. In fiscal year 2012, the Company had purchases of property, plant and equipment of $2,521 compared with $5,083 in the prior year. Capital expenditures have been principally in support of growth in our Asian operations and scheduled maintenance activities. In addition, there was an increase in restricted cash of $276 related to commodity hedging activities in the first six months of fiscal 2012 compared to a decrease of $8 in the prior fiscal year. 30

Net cash provided by financing activities decreased $7,444 to $5,580 for the six months ended July 31, 2011, as compared to $13,024 in the comparable period of the prior fiscal year. Proceeds from the short-term loan in China obtained during the second quarter of fiscal year 2012 and net borrowings under the CompanyMANAGEMENT’sS ~~Credit~~DISCUSSION ~~Facility,~~AND ~~offset~~ANALYSIS byOF debt acquisition costs, were the primary sources of cash provided by financing activities in fiscal year 2011 and fiscal year 2012. The decrease in borrowings in the current fiscal year is the result of improved cash flow from operations as well as lower capital expenditures in the current fiscal year. FINANCIAL

~~Our~~CONDITION ~~liquidity is~~AND ~~primarily~~RESULTS ~~determined~~OF byOPERATIONS our availability under the Credit Facility, our unrestricted cash balances and cash flows from operations. If our cash requirements exceed the cash provided by our operating activities, then we would look to our unrestricted cash balances and the availability under our Credit Facility to satisfy those needs. Important factors and assumptions made by us when considering future liquidity include, but are not limited to, the stabilization of lead prices, future demand from customers, (continued ~~sufficient availability of~~ )

27(Dollars in thousands, except per share data)

~~Table~~FORWARD-LOOKING ~~of Contents~~STATEMENTS

~~MANAGEMENT~~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 (the “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 of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (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’Ss ~~DISCUSSION~~current ~~AND~~views ~~ANALYSIS~~and OFassumptions ~~FINANCIAL~~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.

~~CONDITION~~By ~~AND~~their ~~RESULTS~~nature, OFforward-looking ~~OPERATIONS~~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:

~~(Dollars~~· inprojections ~~thousands~~of revenues, ~~except~~cost of raw materials, income or loss, earnings or loss per share, ~~data)~~capital expenditures, growth prospects, dividends, the effect of currency translations, capital structure and other financial items;

~~credit~~· ~~from~~statements ~~our~~of ~~trade~~plans, ~~vendors~~strategies and ~~the~~objectives ~~ability~~made toby ~~re-finance~~our ormanagement ~~obtain debt in the future. To the extent unforeseen events occur~~ or ~~operating~~board ~~results~~of ~~are below forecast~~directors, weincluding ~~believe~~the weintroduction ~~can~~of ~~take certain~~new ~~actions to conserve cash~~products, ~~such~~cost assavings ~~delay~~initiatives ~~major~~or ~~capital~~estimates ~~investments, other discretionary spending reductions~~ or ~~pursue~~predictions ~~financing~~of ~~from other sources to preserve liquidity, if necessary. Despite these potential~~ actions, ~~if we are not able to satisfy our cash requirements in the near term from cash provided~~ by ~~operating activities~~customers, ~~or through access to our Credit Facility~~suppliers, wecompetitors ~~may~~or ~~not~~regulating ~~have the minimum levels of cash necessary to operate the business on an ongoing basis.~~ authorities;

~~Our~~· ~~liquidity~~statements derived from the Credit Facility, as amended, is based on availability determined by a borrowing base. In addition, the Credit Facility requires the Company to meet a minimum fixed charge coverage ratio if the excess availability falls below $7,500 through August 31, 2011, adjusted to $10,000 thereafter. The fixed charge coverage ratio for the last twelve consecutive fiscal month period shall be not less than 1.10:1.00. As of ~~July 31,~~future ~~2011,~~economic ~~the~~performance; Company was in compliance with the fixed charge coverage ratio. The Credit Facility also previously included minimum EBITDA requirements beginning with our quarter ending April 30, 2011. Pursuant to an amendment to the Credit Facility in December 2010 these minimum EBITDA requirements were eliminated for the duration of the term of the Credit Facility. and

As· astatements ~~result~~regarding ofthe ~~favorable~~ability ~~Credit~~to ~~Facility~~obtain amendments ~~and improving operating performance, we believe that, for the next twelve months, cash generated from operations together with availability~~ under our ~~Existing~~debt ~~Credit~~agreements ~~Facility~~or ~~will be sufficient~~ to ~~allow~~obtain usadditional tofunding ~~fund~~in ~~its~~the ~~operations and to increase working capital as necessary to support our strategy~~future.

~~Although~~We ~~our~~caution ~~credit~~you ~~facility~~not ~~syndicate~~to ~~bank~~place isundue ~~currently~~reliance ~~meeting~~on ~~all~~these offorward-looking ~~their~~statements. ~~lending~~Factors ~~obligations, there can be no assurance~~ that ~~these banks~~could ~~will~~cause beactual ~~able~~results to ~~meet~~differ ~~their~~materially ~~obligations~~from inthese ~~the~~forward-looking ~~future.~~statements ~~Our~~include, ~~current~~but ~~credit~~are ~~facility does~~ not ~~expire~~limited ~~until December~~to, ~~2013.~~those Asfactors ofdiscussed ~~July 31,~~under ~~2011,~~Item ~~the~~1A ~~maximum~~- ~~availability~~Risk ~~calculated~~Factors, ~~under~~Item ~~the~~7 ~~borrowing~~– ~~base~~Management’s ~~was~~Discussion ~~approximately~~and ~~$72,493,~~Analysis of ~~which $46,781~~Financial ~~was~~Conditions ~~funded~~and ~~(including~~Results ~~$20,000~~of ~~from~~Operations ~~the term loan tranche),~~ and ~~$4,682~~Item ~~was~~8 ~~utilized~~– ~~for~~Financial ~~letters~~Statements ofand ~~credit.~~Supplementary AsData, ~~provided~~included ~~under~~in the ~~Credit~~Company’s ~~Facility,~~Form ~~excess~~10-K ~~borrowing~~annual ~~capacity~~report ~~will~~for bethe ~~available~~year ~~for~~ended ~~future~~January ~~working~~31, ~~capital~~2011 ~~needs~~ and ~~general corporate~~the ~~purposes.~~following general factors:

We· ~~expect~~our toability ~~have access~~ to ~~liquidity~~maintain ~~in the capital markets on favorable terms before the maturity dates of our current credit facilities~~ and wegenerate ~~do not expect a significant number of our lenders to default on their commitments thereunder. In addition, we can delay major capital investments or pursue financing from other sources to preserve~~ liquidity~~, if~~ ~~necessary. Cash from operations and availability under the amended Credit Facility is expected~~ to ~~be sufficient to~~ meet our ~~ongoing~~operating ~~cash~~ needs ~~for working capital requirements~~, ~~restructuring,~~as ~~capital~~well ~~expenditures~~as ~~and~~our ~~debt~~ability ~~service for at least the next twelve months. We estimate capital spending for fiscal year 2012~~ to befund ~~approximately $9,000 related primarily to growth in Asia~~ and ~~routine~~implement ~~maintenance~~business ~~activities. In the third quarter of fiscal year 2012~~strategies, weacquisitions ~~expect~~and torestructuring ~~make Approximately $5,000 in pension contributions.~~ plans;

28· 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;

~~Table~~· ofour ~~Contents~~debt service requirements, which may restrict our operational and financial flexibility, as well as impose significant interest and financing costs;

~~MANAGEMENT’S~~· ~~DISCUSSION~~restrictive ~~AND~~loan ~~ANALYSIS~~covenants OFmay ~~FINANCIAL~~impact our ability to operate our business and pursue business strategies;

~~CONDITION~~· ~~AND~~the ~~RESULTS~~litigation OFproceedings ~~OPERATIONS~~to which we are subject or may in the future become subject to, the results of which could have a material adverse effect on us and our business;

~~(Dollars~~· our exposure to fluctuations in ~~thousands,~~interest ~~except~~rates ~~per~~on ~~share~~our ~~data)~~variable debt;

~~Contractual~~· ~~Obligations~~the realization of the tax benefits of our net operating loss carry forwards, which is dependent upon future taxable income and ~~Commercial~~which ~~Commitments~~are subject to limitation as a result of changes in ownership of the Company;

~~The~~· ~~following~~our ~~tables~~ability ~~summarize~~to ~~the~~successfully ~~Company’s~~pass ~~contractual~~along ~~obligations~~increased ~~and~~material ~~commercial~~costs ~~commitments~~to asour ~~of July 31, 2011:~~ customers;

	Payments Due by Period
Contractual Obligations:	Total		Less than1 year		1 - 3years		4 - 5years		After5 years
Debt*	$	61,448	$	7,705	$	50,830	$	2,913	$	0
Interest payable on notes*		11,505		4,543		6,508		454		0
Operating leases		6,990		1,414		2,557		1,863		1,156
Projected – lead purchases**		38,000		38,000		0		0		0
Equipment		507		507		0		0		0
Capital Leases		115		60		43		12		0
Total contractual cash obligations	$	118,565	$	52,229	$	59,938	$	5,242	$	1,156

failure of our customers to renew agreements with us;

*· ~~These~~competitiveness ~~amounts~~of ~~assume that~~ the ~~convertible~~battery ~~notes~~markets ~~are current liabilities, show the Credit Facility as paid~~ in ~~fiscal~~North ~~year 2014 and include interest on the Credit Facility through fiscal year 2014 calculated at the same rate and outstanding balance at July 31~~America, ~~2011~~Europe and ~~assume the China debt up through fiscal year 2015.~~Asia;

**· ~~Amounts~~loss ~~are based on the cash price~~ of ~~lead~~a atsingle ~~July~~source ~~31,~~or ~~2011~~other ~~which~~key ~~was $1.19.~~supplier;

	Amount of Commitment Expiration per Period
Other Commercial Commitments	TotalAmountCommitted		Less than1 year		1 - 3years		4 - 5years		After5 years
Standby letters of credit	$	4,682	$	1,163	$	62	$	3,457	$	0
Total commercial commitments	$	4,682	$	1,163	$	62	$	3,457	$	0

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

29· successful collective bargaining with our unionized workforce;

~~Table of Contents~~31

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS (continued)

(Dollars in thousands, except per share data)

~~FORWARD-LOOKING~~· ~~STATEMENTS~~risks involved in our foreign operations such as disruption of markets, changes in import and export laws, changes in VAT regulations or other tax regulations, currency restrictions, currency exchange rate fluctuations and possible terrorist attacks against the United States interests;

~~The~~· ~~Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements~~ we ~~make. We~~ may, ~~from~~have ~~time~~additional ~~to time,~~impairment 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 (the “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 of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (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. charges;

By· ~~their nature, forward-looking statements involve risk and uncertainties that could cause~~ our ~~actual~~ability ~~results~~ to ~~differ~~acquire ~~materially~~goods ~~from anticipated~~and ~~results.~~services ~~Examples~~and/or offulfill ~~forward-looking~~labor ~~statements~~needs ~~include,~~at ~~but~~budgeted ~~are not limited to:~~ costs;

•· ~~projections~~economic ofconditions ~~revenues, cost of raw materials, income~~ or ~~loss,~~market ~~earnings~~changes orin ~~loss~~certain ~~per~~market ~~share,~~sectors ~~capital~~in ~~expenditures,~~which ~~growth~~we ~~prospects,~~conduct ~~dividends, the effect of currency translations, capital structure and other financial items~~business;

•· ~~statements~~uncertainty ofin ~~plans,~~financial 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 authoritiesmarkets;

•· ~~statements~~our success or timing of ~~future~~new ~~economic~~product ~~performance~~development; ~~and~~

•· ~~statements~~impact ~~regarding~~of ~~the~~any ~~ability~~changes toin ~~obtain amendments under~~ our ~~debt agreements or to obtain additional funding in the future.~~management;

We· ~~caution~~changes 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 Supplementary Data, included in ~~the~~our ~~Company’s~~product ~~Form 10-K annual report for the year ended January 31, 2011 and the following general factors:~~ mix;

•· ~~our~~success ~~ability~~of toproductivity ~~maintain and generate liquidity to meet our operating needs~~initiatives, asincluding ~~well as our ability to fund and implement business strategies~~rationalizations, ~~acquisitions~~relocations ~~and~~or ~~restructuring plans~~consolidations;

•· ~~the~~costs ~~fact that lead, a major constituent in most~~ of our ~~products,~~compliance ~~experiences~~with ~~significant~~environmental ~~fluctuations~~laws inand ~~market~~regulations ~~price~~ and isresulting aliabilities ~~hazardous~~and ~~material~~impact ~~that~~on ~~may~~our ~~give~~operations; ~~rise to costly environmental~~ and ~~safety claims;~~

•· our ~~debt~~ability ~~service~~to ~~requirements,~~protect ~~which~~our ~~may~~proprietary ~~restrict~~intellectual ~~our~~property ~~operational~~and technology and ~~financial~~ensure ~~flexibility,~~that aswe ~~well~~are asnot ~~impose~~infringing ~~significant~~the ~~interest~~intellectual ~~and~~property ~~financing~~of ~~costs;~~others.

•The ~~restrictive~~Company’s ~~loan~~actual ~~covenants~~results ~~may~~could ~~impact~~differ ~~our~~materially ~~ability~~from tothose ~~operate~~anticipated ~~our~~in ~~business~~these ~~and~~forward-looking ~~pursue~~statements ~~business~~as ~~strategies;~~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, 2011.

~~• the litigation proceedings to which we are subject or may in the future become subject to, the results of which could have a material adverse effect on us and our business;~~32

•MANAGEMENT’S ~~our~~DISCUSSION ~~exposure~~AND toANALYSIS ~~fluctuations~~OF ~~in interest rates on our variable debt;~~FINANCIAL

•CONDITION ~~the~~AND ~~realization~~RESULTS ofOF ~~the~~OPERATIONS ~~tax benefits of our net operating loss carry forwards, which is dependent upon future taxable income and which are subject to limitation as a result of changes in ownership of the Company;~~(continued)

•(Dollars ~~our~~in ~~ability~~thousands, toexcept ~~successfully~~per ~~pass~~share ~~along increased material costs to our customers;~~data)

•Item ~~failure~~3. ofQuantitative ~~our~~and ~~customers~~Qualitative toDisclosure ~~renew~~about ~~agreements~~Market ~~with us;~~Risk

•The ~~competitiveness~~Company ofis ~~the~~exposed ~~battery~~to ~~markets~~various market risks. The primary financial risks include fluctuations in ~~North~~interest ~~America~~rates, ~~Europe~~certain raw material commodity prices, and ~~Asia;~~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 ~~loss~~occasion, the Company has entered into non-deliverable forward contracts with certain financial counterparties to hedge its exposure to the fluctuations in the price of alead, ~~single~~the ~~source~~primary orraw 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 ~~key~~comprehensive ~~supplier;~~loss until they are released to the income statement through cost of goods sold in the same period as is the hedged item (lead).

30Additional disclosure regarding various market risks are set forth in Part I, Item 1A – “Risk Factors” of the Company’s Fiscal Year 2011 Annual Report on Form 10-K, filed with the SEC on May 2, 2011, which should be read in conjunction with the Company’s Quarterly Reports on Form 10-Q.

~~Table~~Item of4. ~~Contents~~Controls and Procedures:

~~MANAGEMENT~~Management, with the participation of its Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’Ss ~~DISCUSSION~~controls ~~AND~~and ~~ANALYSIS~~procedures OF(as ~~FINANCIAL~~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.

~~CONDITION~~Internal ~~AND~~Control ~~RESULTS~~over OFFinancial ~~OPERATIONS~~ Reporting:

There have not been any changes in the Company’s internal control over financial reporting (~~Dollars~~as such term is defined in ~~thousands,~~Rules 13a-15(f) ~~except~~and ~~per~~15d-15(f) ~~share~~under ~~data~~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.

~~• political, economic and social changes, or acts of terrorism or war;~~33

•MANAGEMENT’S ~~successful~~DISCUSSION ~~collective~~AND ~~bargaining~~ANALYSIS ~~with~~OF ~~our unionized workforce;~~FINANCIAL

•CONDITION ~~risks~~AND ~~involved~~RESULTS inOF ~~our~~OPERATIONS foreign operations such as disruption of markets, changes in import and export laws, changes in VAT regulations or other tax regulations, currency restrictions, currency exchange rate fluctuations and possible terrorist attacks against the United States interests;(continued)

•(Dollars wein ~~may~~thousands, ~~have~~except ~~additional~~per ~~impairment~~share ~~charges;~~data)

•PART ~~our~~II. ~~ability~~OTHER ~~to acquire goods and services and/or fulfill labor needs at budgeted costs;~~INFORMATION

•Item ~~economic~~1. Legal ~~conditions or market changes in certain market sectors in which we conduct business;~~Proceedings

•Beginning ~~uncertainty~~on June 29, 2011, following the announcement on June 16, 2011 by Angelo Gordon & Co., L.P. of its proposal to acquire the outstanding shares of common stock of the Company not owned by it or its affiliates for cash (the “Merger”), three putative stockholder class action lawsuits were filed in ~~financial~~the ~~markets;~~Delaware Court of Chancery, referred to herein as the “Delaware Actions,” and another putative stockholder class action lawsuit was filed in the Court of Common Pleas of Montgomery County, Pennsylvania, referred to herein as the “Pennsylvania Action,” challenging the proposed Merger. On August 19, 2011, counsel to the plaintiffs in the Delaware Actions submitted a proposed order to the court seeking consolidation of the Delaware Actions into a single action, referred to herein as the “Consolidated Delaware Action.” On September 8, 2011, the Delaware Court of Chancery granted that request for consolidation. On October 11, 2011, an amended class action complaint was filed in the Consolidated Delaware Action, naming as defendants C&D, each current member of the C&D Board and Angel Holdings LLC (“Acquiror”), an affiliate of Angelo Gordon & Co., L.P. On October 25, a fourth class action complaint was filed in the Delaware Court of Chancery. That action is subject to the Delaware Court of Chancery’s August 19 consolidation order governing the consolidation of any related newly filed case with the Consolidated Delaware Action.

•On ~~our~~October ~~success~~26, 2011, a consolidated second amended class action complaint was filed in the Consolidated Delaware Action. The consolidated second amended class action complaint asserts breach of fiduciary duty claims against the current members of the C&D Board and Angelo Gordon & Co., L.P., and aiding and abetting breach of fiduciary duty claims against C&D, Angelo Gordon & Co., L.P., Acquiror and Merger Sub premised principally on allegations that: (i) the individual defendants and the Acquiror breached their fiduciary duties under Delaware law because the Merger Agreement was executed without meaningful input from C&D’s public stockholders, (ii) the consideration the Acquiror is proposing to provide to C&D’s public stockholders for their Common Stock is inadequate, and (iii) the Form PRE 14C (filed by C&D on October 19, 2011) failed to disclose material information. Plaintiffs claim that the Form PRE 14C failed to disclose material information about the selection and appointment of the members of the Special Committee of the Board of Directors formed to consider the proposed merger (the “Special Committee”), the criteria used to select the Special Committee’s financial advisor (Perella Weinberg), certain aspects of the financial analysis performed by Perella Weinberg, and the sale and negotiation process. In their consolidated second amended class action complaint, Plaintiffs sought to preliminarily and permanently enjoin the Merger (or ~~timing~~if the Merger is consummated prior to any final judgment to rescind the Merger or receive rescissory damages), a declaration that defendants have violated their fiduciary duties, and an order directing defendants to exercise their fiduciary duties to obtain a transaction that is in the best interests of ~~new~~the ~~product~~Company’s ~~development;~~stockholders. Plaintiffs further requested the costs of the action, including reasonable attorneys’ fees, and such other equitable relief as may be just and proper.

•At ~~impact~~the same time that the consolidated second amended class action complaint was filed, Plaintiffs moved for a preliminary injunction to enjoin the Merger and for expedition of ~~any~~the ~~changes~~proceedings. inOn ~~our~~November ~~management;~~1, 2011, Defendants filed an opposition to Plaintiffs’ request for expedited proceedings, arguing that Plaintiffs’ disclosure claims were not colorable and did not provide a basis for expedition. On November 3, 2011, the Delaware Court of Chancery denied Plaintiffs’ motion for expedition of the proceedings. In light of the Court’s November 3, 2011 ruling, Plaintiffs have submitted a proposed amended order of consolidation and appointment of co-lead counsel. Pursuant to that proposed amended order, which defendants do not oppose, defendants shall answer or otherwise move with respect to the consolidated second amended class action complaint within 45 days of the closing of the Merger.

•Item ~~changes~~2. inUnregistered ~~our~~Sales ~~product~~of ~~mix;~~Equity Securities and Use of Proceeds

•Issuer ~~success~~Purchases of ~~productivity~~Equity ~~initiatives, including rationalizations, relocations or consolidations;~~Securities:

~~• costs of our compliance with environmental laws and regulations and resulting liabilities and impact on our operations; and~~NONE

•Restrictions ~~our~~on ~~ability~~Dividends ~~to protect our proprietary intellectual property~~ and ~~technology~~Treasury ~~and~~Stock ~~ensure that we are not infringing the intellectual property of others.~~Purchases:

~~The~~Our ~~Company’s~~Credit ~~actual~~Facility ~~results~~limits ~~could~~restricted ~~differ~~payments ~~materially~~including ~~from~~dividends ~~those~~and ~~anticipated~~Treasury Stock purchases to no more than $250,000 for Treasury Stock in ~~these~~any ~~forward-looking statements~~one ascalendar ayear ~~result~~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 ~~variety~~minimum of ~~factors~~$30,000,000 ~~including~~in ~~those~~excess ~~discussed~~availability infor ~~“Risk~~a ~~Factors”~~period ~~included~~of inthirty days prior to the dividend. The Company’s ~~Form~~may ~~10-K~~declare ~~annual~~and ~~report~~pay ~~for~~a ~~the~~dividend ~~year~~provided ~~ended~~these ~~January 31,~~conditions ~~2011~~are met and there does not exist an event of default. No dividends have been declared during the first nine months of fiscal year 2012.

31 34

~~Table~~Item of6. ~~Contents~~Exhibits.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

		Incorporated by Reference

Exhibit				Exhibit	Filed
Number	Exhibit Description	Form	Date	Number	Herewith


10.1	Agreement and Plan of Merger, dated October 3, 2011, by and among C&D Technologies, Inc., Angel Acquisition Corp., and Angel Holdings LLC.	8-K	October 4, 2011	10.1

12.1	Computation of Ratio of Earnings to Fixed Charges				X

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 Senior 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 Senior 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

~~CONDITION~~101.INS* ~~AND~~XBRL ~~RESULTS OF OPERATIONS~~ Instance

~~(Dollars~~101.SCH* inXBRL ~~thousands,~~Taxonomy ~~except~~Extension ~~per share data)~~ Schema

~~Item 3~~101.CAL* ~~Quantitative~~XBRL ~~and~~Taxonomy ~~Qualitative~~Extension ~~Disclosure about Market Risk~~ Calculation

~~The Company is exposed to various market risks~~101.LAB* ~~The~~XBRL ~~primary~~Taxonomy ~~financial~~Extension 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. Labels

On occasion, the Company has entered into non-deliverable forward contracts with certain financial counterparties to hedge its exposure to the fluctuations in the price of lead, the primary raw material component used by the Company101.PRE* ~~The~~XBRL ~~Company~~Taxonomy ~~employs~~Extension 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 loss until they are released to the income statement through cost of goods sold in the same period as is the hedged item (lead). Presentation

~~Additional~~101.DEF* ~~disclosure~~XBRL ~~regarding~~Taxonomy ~~various~~Extension market risks are set forth in Part I, Item 1A – “Risk Factors” of the Company’s Fiscal Year 2011 Annual Report on Form 10-K, filed with the SEC on May 2, 2011, which should be read in conjunction with the Company’s Quarterly Report on Form 10-Q for the Company’s first fiscal quarter and this Quarterly Report on Form 10-Q. Definition

~~Item 4.~~* ~~Controls~~XBRL (Extensible Business Reporting Language) information is furnished and ~~Procedures:~~not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

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. 35

~~Internal Control over Financial Reporting:~~ SIGNATURES

~~There~~Pursuant ~~have~~to ~~not been any changes in~~ the ~~Company’s~~requirements ~~internal~~of ~~control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under~~ the Securities Exchange Act) ~~during~~of 1934, the ~~fiscal~~Registrant ~~quarter~~has toduly ~~which~~caused this report ~~relates~~to ~~that~~be ~~have~~signed ~~materially~~on ~~affected,~~its orbehalf ~~are reasonably~~by ~~likely~~the toundersigned ~~materially~~thereunto ~~affect,~~duly ~~its internal control over financial reporting~~authorized.

	C&D TECHNOLOGIES, INC.

December 15, 2011		By: /s/ Jeffrey A. Graves
		Jeffrey A. Graves
		President, Chief Executive
		Officer and Director
		(Principal Executive Officer)

December 15, 2011		By: /s/ Ian J. Harvie
		Ian J. Harvie
		Senior Vice President Finance
		and Chief Financial Officer
		(Principal Financial and
		Accounting Officer)

~~Table of Contents~~36

~~PART~~EXHIBIT ~~II. OTHER INFORMATION~~ INDEX

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

10.1	Agreement and Plan of Merger, dated October 3, 2011, by and among C&D Technologies, Inc., Angel Acquisition Corp., and Angel Holdings LLC.

12.1	Computation of Ratio of Earnings to Fixed Charges

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.

31.2	Certification of the Senior 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

32.1	Certification of the President and Chief Executive Officer and Senior 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

~~Issuer~~101.INS* ~~Purchases~~XBRL ~~of Equity Securities:~~ Instance

~~NONE~~101.SCH* XBRL Taxonomy Extension Schema

~~Restrictions~~101.CAL* onXBRL ~~Dividends~~Taxonomy ~~and~~Extension ~~Treasury Stock Purchases:~~ Calculation

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 offerings101.LAB* ~~These restricted~~XBRL ~~payments~~Taxonomy ~~can~~Extension 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. No dividends have been declared during the first six months of fiscal year 2011. Labels

~~Item 6~~101.PRE* ~~Exhibits.~~XBRL Taxonomy Extension Presentation

		Incorporated by Reference
ExhibitNumber	Exhibit Description	Form	Date	ExhibitNumber	FiledHerewith
12.1	Computation of Ratio of Earnings to Fixed Charges				X
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 Senior 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 Senior 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
101.INS*	XBRL Instance
101.SCH*	XBRL Taxonomy Extension Schema
101.CAL*	XBRL Taxonomy Extension Calculation
101.LAB*	XBRL Taxonomy Extension Labels
101.PRE*	XBRL Taxonomy Extension Presentation
101.DEF*	XBRL Taxonomy Extension Definition

101.DEF*

XBRL Taxonomy Extension Definition

XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

33 37

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 7, 2011	By:	/s/ Jeffrey A. Graves
		Jeffrey A. Graves
		President, Chief Executive Officer and Director (Principal Executive Officer)
September 7, 2011	By:	/s/ Ian J. Harvie
		Ian J. Harvie
		Senior Vice President Finance and Chief Financial Officer (Principal Financial Officer)

EXHIBIT INDEX

12.1		Computation of Ratio of Earnings to Fixed Charges
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.
31.2		Certification of the Senior 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
32.1		Certification of the President and Chief Executive Officer and Senior 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
101.INS*		XBRL Instance
101.SCH*		XBRL Taxonomy Extension Schema
101.CAL*		XBRL Taxonomy Extension Calculation
101.LAB*		XBRL Taxonomy Extension Labels
101.PRE*		XBRL Taxonomy Extension Presentation
101.DEF*		XBRL Taxonomy Extension Definition

* XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

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