YUASA INC, S-1/A, 1998-10-26

YUASA INC
S-1/A, 1998-10-26
MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 26, 1998

REGISTRATION NO. 333-48881
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

----------------

AMENDMENT NO. 4
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

----------------

YUASA, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

PENNSYLVANIA 3690 23-2955195
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NUMBER)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)

P. O. BOX 14145
READING, PENNSYLVANIA 19612-4145
(610) 208-1991
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

P. MICHAEL EHLERMAN
YUASA, INC.
P. O. BOX 14145
READING, PENNSYLVANIA 19612-4145
(610) 208-1991
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

----------------

COPIES TO:

JOSEPH M. HARENZA, MICHAEL T. PHILION MARK KESSEL, ESQUIRE
ESQUIRE STEVENS & LEE CHIEF FINANCIAL OFFICER SHEARMAN & STERLING
111 NORTH SIXTH STREET VICE PRESIDENT OF 599 LEXINGTON AVENUE
READING, PENNSYLVANIA FINANCE NEW YORK, NEW YORK
19601 YUASA, INC. (212) 848-4000
(610) 478-2160 P.O. BOX 14145
READING, PENNSYLVANIA
19612-4145
(610) 208-1991

----------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
check the following box: [_]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering: [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [_]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box: [_]

----------------

CALCULATION OF REGISTRATION FEE
===============================================================================================
PROPOSED PROPOSED PROPOSED
MAXIMUM MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO OFFERING AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED BE REGISTERED PRICE PER SHARE(1) OFFERING PRICE(1) FEE
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock,
$0.01 par value per
share................. 5,050,800 shares $16.00 $80,812,800 $23,840(2)
===============================================================================================
</TABLE>

(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933.
(2) A filing fee of $21,388 was paid upon the first filing of this
Registration Statement on March 30, 1998. The remaining balance of $2,452
was paid with the filing of Amendment No. 2.

----------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

SUBJECT TO COMPLETION, PRELIMINARY PROSPECTUS DATED OCTOBER 26, 1998

PROSPECTUS
- --------

4,392,000 SHARES

[LOGO OF YUASA APPEARS HERE]

CLASS A COMMON STOCK

-----------
Of the 4,392,000 shares of Class A common stock, par value $.01 per share
(the "Class A Common Stock"), of Yuasa, Inc., a Pennsylvania corporation (the
"Company"), offered hereby (the "Offering"), 3,300,000 shares are being offered
by the Company, a majority-owned subsidiary of Yuasa Corporation, a Japanese
business corporation ("Yuasa Japan"), and 1,092,000 shares are being offered by
an affiliate of Exide Corporation, a Delaware corporation ("Exide" or the
"Selling Stockholder"). See "Principal and Selling Stockholders." The Company
will not receive any proceeds from the sale of shares of Class A Common Stock
by the Selling Stockholder.

The 1,092,000 shares being sold by the Selling Stockholder are shares of
Class B common stock, par value $.01 per share (the "Class B Common Stock" and,
together with the Class A Common Stock, the "Common Stock"), which will convert
to an equal number of shares of Class A Common Stock upon transfer to any
person not an affiliate of the Selling Stockholder. Each share of Class A
Common Stock entitles its holder to one vote, and each share of Class B Common
Stock entitles its holder to two votes. See "Description of Capital Stock--
Conversion."

Prior to the Offering, there has been no public market for the Class A
Common Stock. It is currently estimated that the initial public offering price
will be between $14.00 and $16.00 per share. For information relating to the
factors to be considered in determining the initial public offering price, see
"Underwriting."

Of the 8,092,000 issued and outstanding shares of Class B Common Stock,
7,000,000 (86.5%) are owned by Yuasa Japan and 1,092,000 (13.5%) are owned by
the Selling Stockholder. Immediately after the completion of the Offering,
Yuasa Japan will beneficially own all of the 7,000,000 issued and outstanding
shares of Class B Common Stock, representing approximately 61% of the
outstanding shares of Common Stock and approximately 76% of the combined voting
power of the outstanding shares of Common Stock. See "Principal and Selling
Stockholders."

The Company has applied for listing of the Class A Common Stock on the New
York Stock Exchange under the symbol "YUA".

SEE "RISK FACTORS" BEGINNING ON PAGE 9 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE CLASS A COMMON STOCK
OFFERED HEREBY.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
================================================================================
PROCEEDS
PRICE TO UNDERWRITING PROCEEDS TO TO SELLING
PUBLIC DISCOUNTS(1) COMPANY(2) STOCKHOLDER
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share........................ $ $ $ $
- --------------------------------------------------------------------------------
Total(3)......................... $ $ $ $
================================================================================
</TABLE>

(1) The Company and the Selling Stockholder have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."
(2) Before deducting estimated expenses payable by the Company of approximately
$1,000,000.
(3) The Company has granted the Underwriters a 30-day option to purchase up to
658,800 additional shares of Class A Common Stock, on the same terms as set
forth above, solely to cover over-allotments, if any. If such option is
exercised in full, the total Price to Public, Underwriting Discounts and
Proceeds to Company will be $ , $ and $ , respectively. See
"Underwriting."

-----------
The shares of Class A Common Stock are offered by the several Underwriters,
subject to prior sale, when, as and if issued to and accepted by them, subject
to approval of certain legal matters by counsel for the Underwriters and
certain other conditions, including the right of the Underwriters to withdraw,
cancel, modify or reject any order in whole or in part. It is expected that
delivery of the shares of Class A Common Stock will be made in New York, New
York, on or about , 1998.

-----------

Joint Lead Managers and Book-Runners
NOMURA SECURITIES INTERNATIONAL, INC. SALOMON SMITH BARNEY

-----------
The date of this Prospectus is , 1998.
<PAGE>

[ARTWORK]

2
<PAGE>

FORWARD LOOKING STATEMENTS

Certain statements contained in this Prospectus under "Prospectus Summary,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business," in addition to certain statements contained
elsewhere in this Prospectus, are forward looking statements. Such forward
looking statements can be identified by the use of forward looking terminology
such as "believes," "expects," "may," "intends," "will," "should" or
"anticipates" or the negative thereof or other variations thereon or
comparable terminology, or by discussions of strategy. No assurance can be
given that the future results covered by the forward looking statements will
be achieved. Such statements are subject to risks, uncertainties and other
factors which could cause actual results to differ materially from future
results expressed or implied by such forward looking statements. The most
significant of such risks, uncertainties and other factors are discussed under
the heading "Risk Factors," in this Prospectus, and prospective investors are
urged to carefully consider such factors. The Company does not intend to
update these forward looking statements.

ADDITIONAL INFORMATION

The Company has not previously been subject to the reporting requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Upon
completion of the Offering, the Company will be subject to the informational
requirements of the Exchange Act, and in accordance therewith, will be
required to file periodic reports and other information with the Securities
and Exchange Commission (the "Commission"). Such information can be inspected
without charge after the Offering at the public reference facilities of the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the regional offices of the Commission located at Suite
1400, Northwest Atrium Center, 500 West Madison Street, Chicago, Illinois
60661 and Seven World Trade Center, 13th Floor, New York, New York 10048.
Copies of such material may also be obtained at prescribed rates from the
Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Commission also maintains a web site
(http://www.sec.gov) that will contain all information filed electronically by
the Company with the Commission.

This Prospectus, which constitutes a part of a Registration Statement on
Form S-1 (the "Registration Statement") filed by the Company with the
Commission under the Securities Act of 1933, as amended (the "Securities
Act"), does not contain all of the information set forth in the Registration
Statement, including the exhibits thereto. For further information with
respect to the Company and the Class A Common Stock offered hereby, reference
is made to the Registration Statement and the exhibits thereto. Statements
contained in this Prospectus as to the contents of any contract or other
document are not necessarily complete, and, with respect to each such contract
or document filed as an exhibit to the Registration Statement, reference is
made to the copy of such contract or document, and each such statement is
qualified in all respects by such reference. A copy of the Registration
Statement, including the exhibits thereto, may be inspected and copies thereof
may be obtained as described in the preceding paragraph with respect to
periodic reports and other information to be filed by the Company under the
Exchange Act.

The Company intends to furnish its stockholders with annual reports
containing consolidated financial statements audited by an independent public
accounting firm and to make available to its stockholders quarterly reports
containing unaudited consolidated financial statements for the first three
quarters of each fiscal year.

----------------

CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE CLASS A COMMON
STOCK, INCLUDING PURCHASES OF SHARES OF CLASS A COMMON STOCK TO STABILIZE
THEIR MARKET PRICE, PURCHASES OF SHARES OF CLASS A COMMON STOCK TO COVER SOME
OR ALL OF A SHORT POSITION IN THE SHARES OF CLASS A COMMON STOCK MAINTAINED BY
THE UNDERWRITERS AND THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF
THESE ACTIVITIES, SEE "UNDERWRITING."

3
<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety and should be read in
conjunction with the more detailed information and Consolidated Financial
Statements, including the Notes thereto, appearing elsewhere in this
Prospectus. Unless otherwise indicated or the context otherwise requires, all
references herein to "Common Stock" include the Class A Common Stock and the
Class B Common Stock of the Company. All information in this Prospectus (i)
gives effect to the formation of the Company to own all of the shares of the
outstanding common stock of Yuasa-Exide, Inc. ("YEI"), (ii) gives effect to the
exchange of shares of common stock in YEI held by Yuasa Japan and Exide for
shares of Class B Common Stock of the Company on a 1400-for-1 basis on March
26, 1998, (iii) assumes an initial public offering price of $15.00 per share of
Class A Common Stock--the midpoint of the range of estimated offering prices,
and (iv) assumes that the Underwriters' over-allotment option will not be
exercised.

All references in this Prospectus to the "Company" refer to Yuasa, Inc., a
Pennsylvania corporation and, unless the context indicates otherwise, its
consolidated subsidiaries, including YEI which, effective March 9, 1998, began
to do business as "Yuasa, Inc." All references herein to the "Offering" mean
the offering of shares of Class A Common Stock of the Company by the Company
and the Selling Stockholder pursuant to this Prospectus. All references in this
Prospectus to fiscal years are to the Company's fiscal years ended on March 31.

THE COMPANY

The Company believes that it is the leading manufacturer and supplier of
industrial batteries and small engine starting batteries in the Americas. The
Company markets a full line of stationary and other batteries, as well as
motive power batteries and related products and services. Stationary batteries
are used primarily to supply standby operating power for (i) telecommunications
applications, such as wireless and wireline systems, (ii) uninterruptible power
system ("UPS") applications for electronic, security and computer systems, and
(iii) switchgear and electrical control systems used in electric utilities and
energy pipelines. Stationary and other batteries include small engine starting
batteries used to start motorcycles, all-terrain vehicles, snowmobiles and
personal watercraft. Motive power batteries are used primarily to power
industrial forklift trucks and other materials handling equipment. Related
products include chargers, electronic power equipment and a wide variety of
battery accessories. The Company sells its products and services through a
network of distributors, independent representatives and an internal sales
force, and also maintains service centers throughout the United States.

The Company believes that it is well-positioned to benefit from expected
continued growth in the markets for its products, especially the market for its
stationary and motive power industrial batteries. According to industry
sources, U.S. sales of large (greater than 25 amperes/hour) industrial
stationary and motive power batteries were approximately $670 million in fiscal
1997 and were projected to be approximately $760 million for fiscal 1998.
Stationary batteries represent approximately 49% of the total U.S. industrial
battery market in fiscal 1998. The stationary battery market has grown at a
compounded annual growth rate of approximately 13.7% per year over the past
five years, fueled principally by growth in the U.S. telecommunications
industry. The stationary battery market is expected to grow at a similar rate
over the next several years. Motive power batteries represent approximately 51%
of the total U.S. industrial battery market in fiscal 1998. The motive power
battery market has grown at a compounded annual growth rate of approximately
9.6% per year over the past five years, fueled principally by increased demand
for batteries in the industrial forklift truck market. The motive power battery
market is expected to grow at a lower rate for the next several years.

4
<PAGE>

fiscal 1995 net earnings was due primarily to a sudden increase in the cost of
raw materials and to manufacturing inefficiencies of the Company. Beginning in
fiscal 1996, the Company initiated a strategic program primarily designed to
improve manufacturing efficiencies and reduce product costs. This program
included, among other items, redesigning certain of the Company's products to
reduce material costs and automating and reengineering manufacturing
operations. The Company's gross profit margin increased from 17.6% to 22.2%
between fiscal 1995 and fiscal 1998 and net earnings increased from $0.6
million in fiscal 1995 to $8.3 million in fiscal 1998 due, in significant part,
to the success of this program. The Company has historically relied on
indebtedness to meet certain of its liquidity requirements and can be expected
to do so in the future in light of the growth contemplated by its business
strategy.

OPERATING STRENGTHS

The Company has been able to achieve profitable growth by capitalizing on
the following operating strengths:

Strong Market Positions. The Company believes it holds the leading market
position in both the motive power and small engine starting battery markets and
is among the three largest suppliers of stationary batteries in the Americas.
The Company believes that its strong market positions result, in large part,
from its extensive direct sales force and national network of independent
distributors, representatives and service centers.

Established Brand Names. The Company believes that its brand names are among
the most highly recognized in the markets it serves. The Company sells its
stationary and related products principally under the "Yuasa" and "Exide" brand
names, motive power products principally under the "Exide" and "General" brand
names, and small engine starting batteries under the "Yuasa" brand name, as
well as under certain private labels. The Company benefits from having the
right to use the "Yuasa" and "Exide" brand names, which the Company believes
hold a reputation in the industry for high quality.

Reputation for Quality, Service and Innovation. The Company believes that
its reputation for product quality, reliability and service enhances its
competitiveness. The Company also competes on the basis of its ability to
partner with its customers to engineer innovative power solutions.

Manufacturing Efficiency. Since it began its strategic initiative to improve
manufacturing efficiency in fiscal 1996, the Company has spent over $45.0
million, among other things, to reengineer and automate its manufacturing
operations and to increase plant capacities. As a result, the Company believes
its manufacturing operations are among the most modern and efficient in the
industry and will provide sufficient capacity to meet expected demand for the
Company's products over the next three years without substantial additional
investment.

Broad Range of Products. The Company believes that it offers the broadest
product capability in the industry, including batteries addressing a wide range
of power requirements (from 1 ampere/hour to 4,000 amperes/hour) and
applications. This broad range of products allows the Company to customize its
products to meet varying customer requirements.

Relationship with Yuasa Japan. The Company benefits from its relationship
with Yuasa Japan through its ability to use the "Yuasa" brand name, and from
technical assistance and access to battery technology developed by Yuasa Japan.
Additionally, the Company sells batteries to Yuasa Japan and its affiliates for
resale in the Pacific Rim, and purchases batteries from Yuasa Japan and its
affiliates for resale in the Americas. Yuasa Japan is one of the leading
manufacturers of lead acid batteries in the world.

5
<PAGE>

BUSINESS STRATEGY

The Company's primary objectives are to increase its net earnings and return
on shareholders' equity and to capitalize on its operating strengths to grow
faster than the markets it serves by implementing the following strategies:

Stationary Products: Focus on Telecommunications and Other High Growth
Markets. The Company believes that the telecommunications markets in the United
States and the rest of the Americas offer high growth potential for sales of
its stationary products. The Company intends to take advantage of its leading
position in the stationary battery market, as well as its other operating
strengths, to increase its share of these growing and profitable markets.

The Company recently strengthened its stationary business by adding new
members to its management team with broad experience in both the industrial
battery and telecommunications markets and extensive business relationships
with existing and potential purchasers of the Company's stationary products.
The Company intends to focus this team's efforts on increasing the Company's
sales of stationary products to the telecommunications markets and other
markets which may be identified as offering rapid growth potential.

The Company also intends to focus its engineering and manufacturing
resources on products which have applications in the telecommunications markets
and other markets which may be identified as offering rapid growth potential.
The Company intends to continue its strategy of developing customized
engineering and other product solutions for original equipment manufacturers
("OEMs") and end users of its products through strategic partnerships with them
and by taking advantage of technical assistance available from Yuasa Japan.
Further, the Company intends to use its increased manufacturing capacity and
new systems and programs to significantly improve delivery to its customers
with shorter lead times.

Motive Power and Small Engine Starting Products: Maintain Leadership
Positions. The Company intends to maintain its leadership position in the
motive power market by (i) continuing to provide a dual brand approach,
including a premium, higher performance product, marketed under the "Exide"
brand, and a lower priced product marketed under the "General" brand, (ii)
leveraging its nationwide sales and service network, and (iii) improving
delivery to its customers through shorter lead times. The Company intends to
maintain its leadership position in the small engine starting battery market by
developing new products for emerging applications, such as cordless electric
mowers and trimmers, and by developing programs to maintain and enhance brand
image and customer loyalty.

Continued Cost Reduction Initiatives. The Company intends to continue its
cost reduction programs initiated in fiscal 1996 by continuing to reengineer
and automate its manufacturing processes and facilities and by redesigning its
products and business processes to further increase efficiency.

Continued Expansion Into New Geographic Markets. The Company believes that
Latin America presents significant growth potential for industrial battery
sales, particularly in the telecommunications markets. The Company established
a sales and distribution business in Mexico in fiscal 1994 and entered into a
joint venture in Argentina in fiscal 1997 to market and sell industrial
batteries. The Company intends to expand into other Latin American countries
through acquisitions, joint ventures and start-up ventures. On August 5, 1998
the Company entered into an agreement to acquire 80% of the stock of a battery
manufacturer in Brazil, SA. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

----------------

The Company maintains its executive offices at 2366 Bernville Road, Reading,
Pennsylvania 19605-9457. Its mailing address is P.O. Box 14145, Reading,
Pennsylvania 19612-4145, and its telephone number is (610) 208-1991.

6
<PAGE>

THE OFFERING

<TABLE>
<S> <C>
Class A Common Stock
offered by: The
Company
3,300,000 shares/(1)/
The Selling Stockholder 1,092,000 shares/(2)/

Common Stock to be
outstanding after the
Offering:
Class A Common Stock 4,392,000 shares/(1)//(3)//(4)/
Class B Common Stock 7,000,000 shares/(4)/
Total Common Stock 11,392,000 shares/(1)//(3)/

Voting Rights: The Class A Common Stock and Class B Common Stock
vote as a single class on all matters, except as
otherwise required by law. Each share of Class A
Common Stock entitles its holder to one vote and
each share of Class B Common Stock entitles its
holder to two votes. All of the outstanding shares
of Class B Common Stock are presently owned by
Yuasa Japan (86.5%) and Exide (13.5%). Immediately
after completion of the Offering, Yuasa Japan will
own all of the 7,000,000 issued and outstanding
shares of Class B Common Stock, representing
approximately 61% of all of the outstanding Common
Stock and 76% of the combined voting power of the
outstanding shares of Common Stock (approximately
73% of the combined voting power if the
Underwriters' over-allotment option is exercised in
full). See "Description of Capital Stock."

Use of Proceeds: The net proceeds received by the Company will be
used to repay a portion of the Company's
indebtedness. See "Use of Proceeds."

New York Stock Exchange The Company has applied for listing of the Class A
Listing: Common Stock on the New York Stock Exchange under
the symbol "YUA".

Risk Factors: An investment in the Class A Common Stock offered
hereby is subject to a number of risks. Prospective
investors should consider carefully all information
set forth herein before making an investment in the
Class A Common Stock. In particular, prospective
investors should consider the factors set forth
herein under "Risk Factors."
</TABLE>
- --------
(1) Up to an aggregate of 658,800 additional shares of Class A Common Stock may
be sold by the Company pursuant to the Underwriters' over-allotment option.
See "Underwriting."
(2) Consists of 1,092,000 shares of Class B Common Stock which will
automatically convert to Class A Common Stock in connection with the
Offering.
(3) Excludes an aggregate of 602,540 shares of Class A Common Stock reserved
for issuance upon exercise of outstanding options and for future issuances
under the Company's Omnibus Stock Plan (the "Omnibus Stock Plan"). See
"Management--Management Incentive Plans--Omnibus Stock Plan" and "--Grant
of Options."
(4) Each share of Class B Common Stock is convertible at any time into one
share of Class A Common Stock at the election of the holder and converts
automatically into one share of Class A Common Stock upon a transfer by the
holder to any person other than an affiliate of such holder, except under
certain limited circumstances. See "Description of Capital Stock--Class A
Common Stock and Class B Common Stock."

7
<PAGE>

SUMMARY CONSOLIDATED FINANCIAL INFORMATION

The following tables present summary historical consolidated financial
information and certain pro forma data of the Company, for the periods or as of
the dates indicated. The historical consolidated financial information for each
of the five years in the period ended March 31, 1998 has been derived from the
Company's historical financial statements, which have been audited. The
historical consolidated income statement information for the three-month period
ended June 28, 1998 and the three-month period ended June 29, 1997 and the
consolidated balance sheet information as of June 28, 1998 have been derived
from unaudited consolidated financial statements prepared on the same basis as
the audited consolidated financial statements, and, in the opinion of
management, include all adjustments (consisting of normal recurring accruals)
necessary for a fair presentation of financial position and results of
operations as of the dates and for the periods indicated. Results of operations
for the interim periods are not necessarily indicative of the results of
operations that could be expected for the full fiscal year or any future
period. The pro forma information is provided for information purposes only and
does not purport to be indicative of the results which would actually have been
attained had the events reflected therein occurred on the dates indicated, or
which may be expected to occur in the future.

The Summary Consolidated Financial Information should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition and Results
of Operations" and the Company's Consolidated Financial Statements and the
Notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED MARCH 31, -----------------------
---------------------------------------------------- JUNE 29, JUNE 28,
1994 1995 1996 1997 1998 1997 1998
--------- --------- --------- --------- -------- ----------- -----------
(Unaudited) (Unaudited)
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED INCOME
STATEMENT DATA:
Net sales............... $ 296,416 $ 328,678 $ 357,517 $ 357,526 $396,317 $94,677 $98,864
Gross profit............ $ 61,670 $ 57,698 $ 61,722 $ 72,147 $ 87,879 $20,157 $22,767
Operating expenses...... $ 39,406 $ 42,744 $ 43,952 $ 48,991 $ 56,398 $13,664 $14,514
Operating earnings...... $ 18,724 $ 11,600 $ 14,255 $ 19,527 $ 27,851 $ 5,583 $ 7,345
Earnings before taxes... $ 11,179 $ 1,277 $ 2,793 $ 9,347 $ 14,138 $ 2,874 $ 4,631
Net earnings............ $ 6,306 $ 616 $ 1,279 $ 5,111 $ 8,308 $ 1,662 $ 2,743
Net earnings per share
of Common Stock (basic
and diluted)........... $ 0.78 $ 0.08 $ 0.16 $ 0.63 $ 1.03 $ 0.21 $ 0.34
Dividends per share of
Common Stock........... $ 0.20 $ 0.28 $ 0.05 $ 0.15 $ 0.49 $ 0.21 $ 0.00
Weighted average shares
of Common Stock
outstanding/(2)/....... 8,092 8,092 8,092 8,092 8,092 8,092 8,092
PRO FORMA DATA:
Pro forma net earnings
per share/(1)//(3)/.... $ 0.88 $ .28
Pro forma weighted
average shares of
Common Stock
outstanding/(2)//(3)/.. 11,392 11,392
OTHER DATA:
Capital expenditures.... $ 16,199 $ 19,983 $ 17,078 $ 11,203 $ 18,951 $ 1,676 $ 5,945
Depreciation and amorti-
zation................. $ 11,493 $ 12,386 $ 15,000 $ 14,022 $ 14,882 $ 3,714 $ 3,806
Gross profit margin..... 20.8% 17.6% 17.3% 20.2% 22.2% 21.3% 23.0%
Operating earnings mar-
gin.................... 6.3% 3.5% 4.0% 5.5% 7.0% 5.9% 7.4%
</TABLE>

<TABLE>
<CAPTION>
JUNE 28, 1998
-------------------------
ACTUAL AS ADJUSTED/(4)/
-------- ----------------
(in thousands)(unaudited)
<S> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Total assets......................................... $228,712 $228,712
Total debt........................................... $121,296 $ 76,296
Total shareholders' equity........................... $ 42,711 $ 87,711
</TABLE>
- --------
(1) Adjusted to reflect an annual reduction of $2.9 million in interest
expense, and the related income tax effect of $1.2 million, on a pro forma
basis as if the net proceeds from the Offering (assuming the Underwriters'
over-allotment option is not exercised) had been utilized to repay a
portion of the Company's outstanding indebtedness at the beginning of each
period presented. Interest expense assumes a weighted average interest rate
of 6.55% for fiscal 1998 and for the first quarter of fiscal 1999, which
approximates the actual interest rate on $45.0 million of indebtedness to
be repaid with the estimated net proceeds from the Offering. Assumes an
initial public offering price of $15.00 per share of Class A Common Stock--
the midpoint on the estimated range of the public offering price.
(2) Amounts exclude an aggregate of 602,540 shares of Class A Common Stock
(equal to 5% of the estimated total shares outstanding after the Offering)
reserved for issuance upon exercise of outstanding options and for future
issuances under the Company's Omnibus Stock Plan. See "Management--
Management Incentive Plans--Omnibus Stock Plan" and "--Grant of Options."
(3) Adjusted to give effect to the sale of 3,300,000 shares of Class A Common
Stock offered hereby by the Company.
(4) Adjusted to reflect the use of estimated net proceeds of $45.0 million to
the Company from the Offering to repay outstanding indebtedness of $45.0
million at the time of the Offering.

8
<PAGE>

RISK FACTORS

An investment in the shares of Class A Common Stock offered hereby involves
a number of risks. Prospective investors should carefully consider the
following information, as well as the other information in this Prospectus,
before investing in shares of Class A Common Stock.

RELATIONSHIP WITH PRINCIPAL STOCKHOLDER

The Company is, at present, a majority owned subsidiary of Yuasa Japan and
after the Offering will remain as such.

Immediately upon completion of the Offering, Yuasa Japan will have
beneficial ownership of 100% of the issued and outstanding shares of Class B
Common Stock of the Company, representing approximately 61% of the total
outstanding shares of Common Stock (approximately 58% if the Underwriters'
over-allotment option is exercised in full). As a result of the voting
disparity between the classes of Common Stock, Yuasa Japan's Class B Common
Stock will represent approximately 76% of the combined voting power of the
Company's Common Stock (approximately 73% if the Underwriters' over-allotment
option is exercised in full). Yuasa Japan therefore has, and will continue to
have, sufficient voting power to elect the entire Board of Directors of the
Company. Yuasa Japan will also be able, in general, to control the vote on any
corporate transaction or other matter submitted to the Company's stockholders
for approval, including extraordinary transactions such as mergers and sales
of all or substantially all of the Company's assets, and to otherwise
substantially influence the operations and strategic direction of the Company.
Such control by Yuasa Japan may discourage certain types of transactions in
which the holders of Class A Common Stock might otherwise receive a premium
over prevailing market prices for their shares. See "Related Party
Transactions," "Principal and Selling Stockholders" and "Description of
Capital Stock."

Certain directors and officers of the Company are also directors and
officers of Yuasa Japan and may have conflicts of interest with respect to
certain transactions which may affect the Company, such as business dealings
between the Company and Yuasa Japan, acquisition opportunities, the issuance
of additional shares of Common Stock and other matters involving conflicts
which cannot now be foreseen. In addition, upon completion of the Offering,
each member of the Company's Board of Directors will be either (i) an officer
or director of, and nominated and elected as a director by, Yuasa Japan, or
(ii) an executive officer of the Company. Although the Company intends to
appoint at least three directors who are independent of Yuasa Japan and of the
Company, following the completion of the Offering, such directors will not
constitute a majority of the Company's Board, and the Company's Board may not
have a majority of independent directors in the future. See "Related Party
Transactions."

The economy of Asia is, at present, highly volatile. Although the Company
does not expect that such volatility, in light of the Company's relationship
with Yuasa Japan, will have any material impact on the Company, no assurances
can be given that it will not.

Yuasa Japan is a Japanese corporation and certain of the Company's
directors and officers are citizens and residents of Japan. Moreover,
substantially all of the assets of Yuasa Japan and such directors and officers
are located outside of the United States. These factors could adversely affect
the ability of investors to effect service of process upon Yuasa Japan or such
directors and officers within the United States or to enforce against such
parties in U.S. courts judgments obtained in U.S. courts, including judgments
predicated upon the federal securities laws of the United States.

TELECOMMUNICATIONS INDUSTRY AND GROWTH OF THE COMPANY

The Company expects that sales of stationary products to telecommunications
customers will account for an increasing percentage of the Company's net sales
and earnings in the future. The continued success of the

9
<PAGE>

Company's stationary batteries and other power supply products and services
will depend, to a substantial extent, on the future continued growth and the
increased accessibility and affordability of telecommunications products and
services in the Americas. There can be no assurance that the demand for such
products and services will continue to grow.

In recent years, the telecommunications industry has undergone substantial
consolidation and change, reducing the number of potential customers for the
Company's products. Although the Company does not expect continuing
consolidation and change to have a material adverse effect on the Company,
there can be no assurance that this will not be the case. See "Business--
Products" and "--Customers and End Users."

COMPETITION; INDUSTRY CONSOLIDATION; PRICING PRESSURES

The industrial lead-acid battery market has for many years been highly
competitive, with competition based primarily on relative product quality and
reliability, price, delivery time and after-sale service. This market has
recently become even more competitive as a result of consolidation among
industrial battery purchasers, which has reduced the number of customers for
the Company's products and increased pricing pressures throughout the
industry. The Company's competitors range from development stage companies to
major domestic and international companies. Although the U.S. market is
currently dominated by domestic manufacturers, foreign competition could
increase, depending on changes in relative prices, duties, tariffs, freight
costs, currency exchange rates or as a result of changes in technology.

Certain of the Company's competitors have technical, marketing, sales,
manufacturing, distribution and other resources significantly greater than
those of the Company, as well as significant name recognition, established
positions in the market and long-standing relationships with OEMs and other
customers. In addition, certain of the Company's competitors own lead smelting
facilities which, during sustained periods of substantial lead cost increases,
may provide a competitive advantage over the Company.

The Company's ability to compete in markets both inside and outside the
United States in the future could be limited by the activities of Yuasa Japan
and Exide, both of which manufacture and sell many of the same products for
the same applications as the products offered by the Company and both of which
are substantially larger and have greater financial resources than the
Company. Exide presently derives a substantial portion of its revenues from
sales of industrial batteries in Europe and its existing agreement not to
compete with the Company expires in June 2001. Accordingly, Exide could become
a competitor of the Company in the Americas and elsewhere in the future.
Although Yuasa Japan has historically viewed the Company as the operation
through which Yuasa Japan markets its products in the Americas and although
the Company is party to an agreement (the "Yuasa Noncompete") which prevents
Yuasa Japan from competing with the Company in the Americas until three years
after such time as Yuasa Japan and its affiliates cease to own directly or
indirectly shares of the Company's capital stock possessing at least 20% of
the voting power of all classes of capital stock, nothing precludes Yuasa
Japan from competing with the Company thereafter. See "--Relationship with
Principal Stockholder," "Business--Competition," and "Related Party
Transactions."

MATERIALS AND MANUFACTURING COSTS

The costs of the components of the Company's products, particularly the
cost of lead, may fluctuate and the Company may be unable to fully pass on any
future cost increases to its customers. When lead costs rise, certain of the
Company's competitors with smelting operations may have lower lead costs than
the Company, providing them with a competitive advantage. Although the Company
has adopted strategies to help minimize these risks, there can be no assurance
that these strategies will be successful over an extended period. See "--
Cyclical Industry; Variations in Quarterly Results," "Management's Discussion
and Analysis of Financial Condition and Results of Operations--Raw Material
Pricing," "Business--Raw Materials" and "--Competition."

The Company's other manufacturing costs, which include a variety of non-
lead materials (such as plastics and steel), labor and most other operating
costs, are also affected by inflationary pressures. The Company's

10
<PAGE>

ability to pass along these inflationary cost increases through higher selling
prices may be limited during periods of stable or declining lead costs because
of established industry practices that tend to link price increases to
increased lead costs. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Inflation."

CYCLICAL INDUSTRY; VARIATIONS IN QUARTERLY RESULTS

The Company is subject to certain factors affecting pricing and net sales
over which the Company has no control, such as general economic and industry
specific competitive conditions. In particular, the industrial battery market
in which the Company competes is cyclical in nature and the markets for the
Company's products are sensitive to the rate of economic growth in the U.S.
and world economies. In addition, products which use the Company's small
engine starting batteries are primarily sold for leisure use, and such sales
may be subject to deferral during economic downturns. The U.S. economy has
experienced a relatively long period without major economic downturns and
might be subject to a recession in the future. Future economic downturns could
adversely affect the Company's results of operations and financial condition.

Historically, the Company has experienced higher net sales during the
fourth quarter of the year, reflecting the customary seasonal buying patterns
of its customers. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Fluctuations in Quarterly Results."

RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS; CURRENCY RISK

The Company derived approximately 7% of its net sales for fiscal 1998 from
sales of its products in countries outside of the United States and the
Company plans to expand its operations significantly in Latin America in the
future. The Company's international operations are subject to the risks
usually associated with foreign operations, including the disruption of
markets, changes in export or import laws, restrictions on currency exchanges,
and the modification or introduction of other governmental policies with
potential adverse effects. Also, foreign sales typically are made in local
currencies. To the extent the Company does not take steps to mitigate the
effect of changes in the relative value of the U.S. dollar and these foreign
currencies, the Company's results of operations and financial condition (which
are reported in U.S. dollars) could be adversely affected. In addition, the
Company may expand in Latin America through joint ventures involving local
partners who may have economic, business or legal interests or goals which are
inconsistent with those of the joint venture or the Company or who may be
unable to meet their financial or other obligations to the joint venture or
the Company. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations--Overview--Net Sales."

TERMINATION OF CERTAIN LICENSES

The Company has exclusive, perpetual royalty-free licenses from Exide for
the use of certain trademarks and patents. Such licenses are subject to
termination in the event the Company breaches its obligations under the
license agreements related to these trademarks and patents. The Company also
has a license and technical assistance agreement with Yuasa Japan (the "Yuasa
License and Technology Agreement"), which gives the Company the right, among
other things, to use certain trademarks, patents and technical know-how of
Yuasa Japan until three years (in the case of certain trademarks) and five
years (in the case of certain patents and technical know-how) after such time
as Yuasa Japan and its affiliates cease to own directly or indirectly shares
of the Company's capital stock possessing at least 20% of the voting power of
all classes of capital stock, subject to earlier termination should the
Company fail to pay royalties due, otherwise breach the agreement and fail to
cure such breach, or become bankrupt. Such termination could have a material
adverse effect on the Company's business, financial condition and results of
operations. See "Business--Intellectual Property."

POTENTIAL COSTS OF ENVIRONMENTAL COMPLIANCE

The Company is subject to numerous federal, state and local laws and
regulations that are designed to protect the environment and employee health
and safety, including those pertaining to the storage, handling,

11
<PAGE>

treatment, transportation and disposal of hazardous and toxic materials,
practices and procedures applicable to the construction and operation of the
Company's plants, and standards relating to the discharge of air, soil and
water pollutants. While the Company believes that its operations currently
comply substantially with applicable environmental, health and safety laws and
regulations, such compliance has resulted in ongoing costs for the Company,
and the Company from time to time has had instances of alleged or actual
noncompliance that have resulted in the imposition of fines or penalties. The
Company's continued compliance with environmental, health and safety laws and
regulations could (i) require the Company to incur significant expenses,
including fines and penalties, (ii) restrict the Company's ability to modify
or expand its facilities or continue production, and (iii) require the Company
to install pollution control equipment and make other capital improvements.

In addition, some of the Company's manufacturing sites have a history of
industrial use. As is typical for such businesses, soil and groundwater
contamination has occurred in the past at some sites and might occur or be
discovered at other sites in the future. The Company from time to time
investigates, remediates and monitors soil and groundwater contamination at
certain of those sites. In addition, the Company has been and in the future
may be liable to contribute to the cleanup of locations owned or operated by
other persons to which the Company or its predecessors have sent wastes for
disposal, pursuant to the federal Comprehensive Environmental Response,
Compensation and Liability Act (commonly known as "Superfund") and other
similar laws. Under these laws, the owner or operator of contaminated
properties and the generator of wastes sent to a contaminated disposal
facility can be jointly and severally liable for the cleanup of such
properties, regardless of fault.

NO PRIOR MARKET FOR CLASS A COMMON STOCK

Prior to the Offering, there has been no public market for the Common Stock
and there can be no assurance that an active market for the Class A Common
Stock will develop or be sustained after the completion of the Offering, nor
can there by any assurance that investors in the Class A Common Stock will be
able to resell their shares at or above the initial public offering price. The
initial public offering price of the Class A Common Stock will be determined
by negotiations among the Company and the Underwriters and may not be
indicative of the market price after the Offering. See "Underwriting" for a
description of the factors to be considered in determining the initial public
offering price.

POSSIBLE VOLATILITY OF STOCK PRICE; SHARES ELIGIBLE FOR FUTURE SALE

The market price of the Class A Common Stock may be significantly affected
by, and could be subject to significant fluctuations in response to, such
factors as the Company's operating results, changes in any earnings estimates,
announcements of significant business developments by the Company, its
competitors or other third parties, other developments affecting the Company,
its customers or its competitors, and various factors affecting the Company's
business, the financial markets or the economy in general, including
perceptions about market conditions in the battery industry, the impact of
various regulatory proposals and general market conditions, some of which may
be unrelated to the Company's performance. In addition, the stock market has
experienced high

12
<PAGE>

levels of price and volume volatility in the past and market prices for the
stock of many companies, especially companies which have recently completed
initial public offerings, have experienced wide price fluctuations not
necessarily related to the operating performance of such companies. Moreover,
because the number of shares of Class A Common Stock being offered hereby is
small relative to the average number of shares traded of many other publicly
held companies, the market price of Class A Common Stock may be more
susceptible to fluctuation. A decision on the part of Yuasa Japan to sell a
substantial number of shares of the Company's Common Stock in the public
market from time to time after expiration of the 180-day lock-up period (see
"Underwriting"), or the perception that such sales may occur, could adversely
affect the market price of the Class A Common Stock. Yuasa Japan has indicated
to the Company that it has no present intent to sell all or any of its shares
of Common Stock. See "--Relationship with Principal Stockholder" and
"Principal and Selling Stockholders."

IMMEDIATE AND SUBSTANTIAL DILUTION

The initial public offering price is substantially higher than the net
tangible book value per share of the Class A Common Stock. Investors in the
Offering will therefore experience an immediate and substantial dilution in
net tangible book value per share of Class A Common Stock of $9.04 per share.
In addition, any future issuance of shares of Common Stock for consideration,
or the exercise of options to purchase Common Stock, at or below the issue
price of the shares offered hereby will cause additional dilution in terms of
net tangible book value per share. To the extent that restricted share awards
are made, there will be further dilution. See "Dilution."

ABSENCE OF DIVIDENDS; RELIANCE ON DIVIDENDS AND DISTRIBUTIONS FROM
SUBSIDIARIES

The Company does not presently intend to declare or pay cash dividends on
its Common Stock after completion of the Offering in the foreseeable future.
As a holding company with no significant assets (other than its investments in
its subsidiaries) or business operations of its own, the principal source of
dividends from the Company will be dividends and other distributions from its
subsidiaries. See "Dividend Policy."

13
<PAGE>

USE OF PROCEEDS

The net proceeds to the Company from the sale of the Common Stock offered
by the Company hereby are estimated to be $45.0 million ($ million if the
Underwriters' over-allotment option is exercised in full) based on an assumed
initial offering price to the public of $15.00 per share of Class A Common
Stock after deducting the underwriting discount and estimated expenses of $1.0
million. The Company intends to use all of the estimated net proceeds to repay
$45.0 million of indebtedness. The aggregate weighted average maturity of this
indebtedness as of June 28, 1998 is approximately 1.1 years and the weighted
average annual interest rate of this indebtedness was 6.55% during fiscal 1998
and first quarter of fiscal 1999. Substantially all of this indebtedness was
incurred by the Company in connection with its 1991 acquisition of Exide's
industrial battery division. See "Related Party Transactions--General".

The Company will not receive any of the proceeds of the sale of Class A
Common Stock offered by the Selling Stockholder hereunder. See Note 7 to Notes
to Consolidated Financial Statements. See also "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources."

DIVIDEND POLICY

The Company does not presently intend to declare or pay cash dividends on
its Common Stock after completion of the Offering in the foreseeable future.
Any determination to pay dividends in the future will be at the discretion of
the Company's Board of Directors and will depend upon the Company's results of
operations, financial condition, contractual restrictions, restrictions
imposed by applicable law and other factors deemed relevant by the Board of
Directors, which may change the Company's dividend policy at any time. Holders
of Class A Common Stock and holders of Class B Common Stock share equally in
dividends declared by the Board. As a holding company with no present business
operations of its own, the principal source of dividends from the Company will
be dividends and other distributions from its subsidiaries. See "Risk
Factors--Absence of Dividends; Reliance on Dividends and Distributions From
Subsidiaries."

14
<PAGE>

CAPITALIZATION

The following table sets forth the short-term debt, including the current
portion of long-term debt, and the capitalization of the Company as of June
28, 1998 on an actual and as adjusted basis as of that date to (i) reflect the
sale by the Company of the shares of Class A Common Stock offered hereby (at
an assumed initial public offering price of $15.00 per share) and (ii) the use
of the net proceeds of the Offering (after deducting the underwriting
discounts and commissions and estimated offering expenses payable by the
Company) as described in "Use of Proceeds." This table should be read in
conjunction with the Consolidated Financial Statements of the Company and the
notes thereto appearing elsewhere in this Prospectus. See also "Use of
Proceeds," "Selected Consolidated Financial Information," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Description of Capital Stock."

<TABLE>
<CAPTION>
AS OF JUNE 28, 1998
---------------------
ACTUAL AS ADJUSTED
-------- -----------
(in thousands)
<S> <C> <C>
Short-term debt, including portion of long-term debt..... $ 46,706 $ 46,706
======== ========
Long-term debt:
Loan facilities........................................ $ 65,092 $ 20,092
Capital leases ........................................ 9,498 9,498
-------- --------
Total long-term debt................................. 74,590 29,590
-------- --------
Shareholders' equity:
Preferred stock, par value $0.01 per share, 50,000,000
shares authorized; no shares issued and outstanding... -- --
Class A Common Stock, par value $0.01 per share,
100,000,000 shares authorized; no shares issued and
outstanding actual and 4,392,000 shares issued and
outstanding as adjusted/(1)//(2)/..................... -- 44
Class B Common Stock, par value $0.01 per share,
100,000,000 shares authorized; 8,092,000 shares issued
and outstanding actual and 7,000,000 shares issued and
outstanding as adjusted/(2)/.......................... 81 70
Paid-in capital........................................ 16,324 61,291
Retained earnings...................................... 27,427 27,427
Accumulated other comprehensive income................. (1,121) (1,121)
-------- --------
Total shareholders' equity........................... 42,711 87,711
-------- --------
Total capitalization..................................... $117,301 $117,301
======== ========
</TABLE>
- --------
(1) Actual and as adjusted amounts exclude an aggregate of 602,540 shares of
Class A Common Stock (equal to 5% of the estimated total shares
outstanding after the Offering) reserved for issuance upon exercise of
outstanding options and for future issuances under the Company's Omnibus
Stock Plan. See "Management--Management Incentive Plans--Omnibus Stock
Plan" and "--Grant of Options."
(2) As adjusted amounts give effect to the sale by the Company of 3,300,000
shares of Class A Common Stock in the Offering and the conversion of
1,092,000 shares of Class B Common Stock into Class A Common stock upon
the sale of all of such shares by the Selling Stockholder in the Offering.

15
<PAGE>

DILUTION

As of June 28,1998, net tangible book value of the Company's Common Stock
before giving effect to the Offering was $22.9 million, or approximately $2.84
per share. Net tangible book value per share is determined by dividing the net
tangible book value by the number of outstanding shares of Common Stock. Net
tangible book value is determined by deducting from total assets all
intangibles (net of amortization) and total liabilities. Without taking into
account any other changes in net tangible book value after June 28, 1998,
other than to give effect to the net proceeds from the issuance of 3,300,000
shares of Class A Common Stock to be offered by the Company in the Offering
(assuming an initial public offering price of $15.00 per share and after
deducting the underwriting discounts and estimated expenses of the Offering
payable by the Company), the pro forma net tangible book value of the Company
as of June 28, 1998 would have been $67.9 million, or approximately $5.96 per
share. This represents an immediate increase in net tangible book value of
$3.12 per share of Common Stock to existing stockholders and an immediate
dilution of approximately $9.04 per share to new investors purchasing shares
in the Offering. The following table illustrates the per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share............... $15.00
Net tangible book value per share before the Offering....... $2.84
Increase in net tangible book value per share attributable
to new investors........................................... 3.12
-----
Pro forma net tangible book value per share after the
Offering..................................................... 5.96
------
Dilution per share to new investors........................... $ 9.04
======
</TABLE>

The following table sets forth, as of June 28, 1998, the number of shares
of Common Stock purchased from the Company, the total consideration paid to
the Company and the average price per share paid by (i) Yuasa Japan and Exide,
the Company's two existing stockholders, and (ii) new investors purchasing
shares of Common Stock from the Company in the Offering (before deducting
underwriting discounts and estimated expenses payable by the Company).

<TABLE>
<CAPTION>
Shares Purchased Total Consideration Average
------------------ ------------------- Price
Number Percent Amount Percent per Share
---------- ------- ----------- ------- ---------
<S> <C> <C> <C> <C> <C>
Existing stockholders/(1)/.... 8,092,000 71.0% $16,405,000 24.9% $ 2.03
New investors/(1)/............ 3,300,000 29.0% 49,500,000 75.1% $15.00
---------- ----- ----------- -----
Total....................... 11,392,000 100.0% $65,905,000 100.0% $ 5.79
========== ===== =========== =====
</TABLE>
- --------
(1) Sales by the Selling Stockholder in the Offering will reduce the number of
shares held by existing stockholders to 7,000,000 or approximately 61% of
the total number of shares of Common Stock outstanding after the Offering
(or 58% if the Underwriters' over-allotment option is exercised in full),
and will increase the number of shares held by new investors to 4,392,000
or approximately 39% of the total number of shares outstanding after the
Offering (or 42% if the Underwriters' over-allotment option is exercised
in full). See "Principal and Selling Stockholders."

The foregoing table assumes no exercise of the Underwriters' over-allotment
option, and excludes options to acquire 589,000 shares of Class A Common Stock
granted to officers and other employees under the Omnibus Stock Plan at the
initial public offering price and 13,540 shares of Class A Common Stock
available for future grants under that Plan. See "Management--Management
Incentive Plan--Omnibus Stock Plan" and "--Grant of Stock Options." Any future
issuance of shares of Common Stock for consideration or the exercise of
options to purchase Common Stock at or below the issue price of the shares of
Class A Common Stock offered hereby will cause dilution in terms of net
tangible book value per share. See "Risk Factors--Immediate and Substantial
Dilution" and "Management--Executive Compensation."

16
<PAGE>

SELECTED CONSOLIDATED FINANCIAL INFORMATION

The following tables present selected historical consolidated financial
information and certain pro forma data of the Company, as of the dates and for
the periods indicated. The historical consolidated income statement
information for each of the five years in the period ended March 31, 1998 and
the consolidated balance sheet data as of March 31, 1994, 1995, 1996, 1997 and
1998 have been derived from the Company's audited consolidated financial
statements. The historical consolidated income statement information for the
three-month period ended June 28, 1998 and the three-month period ended June
29, 1997 and the consolidated balance sheet information as of June 28, 1998
have been derived from unaudited consolidated financial statements prepared on
the same basis as the audited consolidated financial statements, and, in the
opinion of management, include all adjustments (consisting of normal recurring
accruals) necessary for a fair presentation of financial position and results
of operations as of the dates and for the periods indicated. Results of
operations for the interim periods are not necessarily indicative of the
results of operations that could be expected for the full fiscal year or any
future period. The pro forma information is provided for information purposes
only and does not purport to be indicative of the results which would actually
have been attained had the events reflected therein occurred on the dates
indicated or which may be expected to occur in the future.

The Selected Consolidated Financial Information should be read in
conjunction with "Summary Consolidated Financial Information," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Company's Consolidated Financial Statements and the Notes thereto included
elsewhere in this Prospectus.

<TABLE>
<CAPTION>
YEAR ENDED MARCH 31, THREE MONTHS ENDED
------------------------------------------------ -----------------------
JUNE 29, JUNE 28,
1994 1995 1996 1997 1998 1997 1998
-------- -------- -------- -------- -------- ----------- -----------
(unaudited) (unaudited)
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED INCOME
STATEMENT DATA:
Net sales................ $296,416 $328,678 $357,517 $357,526 $396,317 $94,677 $98,864
Cost of goods sold....... 234,746 270,980 295,795 285,379 308,438 74,520 76,097
-------- -------- -------- -------- -------- ------- -------
Gross profit............. 61,670 57,698 61,722 72,147 87,879 20,157 22,767
Operating expenses....... 39,406 42,744 43,952 48,991 56,398 13,664 14,514
Amortization expense..... 3,540 3,354 3,515 3,629 3,630 910 908
-------- -------- -------- -------- -------- ------- -------
Operating earnings....... 18,724 11,600 14,255 19,527 27,851 5,583 7,345
Interest expense......... 7,736 9,614 11,581 9,625 9,709 2,517 2,464
Loss on Investment....... -- -- -- -- 4,005 -- --
Other (earnings) expense,
net..................... (191) 709 (119) 555 (1) 192 250
-------- -------- -------- -------- -------- ------- -------
Earnings before taxes.... 11,179 1,277 2,793 9,347 14,138 2,874 4,631
Income taxes............. 4,873 661 1,514 4,236 5,830 1,212 1,888
-------- -------- -------- -------- -------- ------- -------
Net earnings............. $ 6,306 $ 616 $ 1,279 $ 5,111 $ 8,308 $ 1,662 $ 2,743
======== ======== ======== ======== ======== ======= =======
Net earnings per share of
Common Stock (basic and
diluted)................ $ 0.78 $ 0.08 $ 0.16 $ 0.63 $ 1.03 $ 0.21 $ 0.34
Dividends per share of
Common Stock............ $ 0.20 $ 0.28 $ 0.05 $ 0.15 $ 0.49 $ 0.21 $ --
Weighted average shares
of Common Stock
outstanding/(2)/........ 8,092 8,092 8,092 8,092 8,092 8,092 8,092
PRO FORMA DATA:
Pro forma net earnings
per share/(1)//(3)/... $ 0.88 $ 0.28
Pro forma weighted
average shares of
Common Stock
outstanding/(2)//(3)/. 11,392 11,392
OTHER DATA:
Capital expenditures... $ 16,199 $ 19,983 $ 17,078 $ 11,203 $ 18,951 $ 1,676 $ 5,945
Depreciation and
amortization.......... 11,493 12,386 15,000 14,022 14,882 3,714 3,806
Gross profit margin.... 20.8% 17.6% 17.3% 20.2% 22.2% 21.3% 23.0%
Operating earnings
margin................ 6.3% 3.5% 4.0% 5.5% 7.0% 5.9% 7.4%
</TABLE>

17
<PAGE>

<TABLE>
<CAPTION>
AS OF MARCH 31, JUNE 28, 1998
-------------------------------------------- ----------------------
AS
1994 1995 1996 1997 1998 ACTUAL ADJUSTED/(4)/
-------- -------- -------- -------- -------- -------- -------------
(unaudited)
(in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE
SHEET DATA:
Total assets............ $186,039 $209,136 $219,226 $219,519 $217,032 $228,712 $ 228,712
Total debt.............. $107,283 $124,207 $129,121 $118,436 $105,677 $121,296 $ 76,296
Total shareholders'
equity................. $ 33,671 $ 31,841 $ 32,262 $ 35,842 $ 39,997 $ 42,711 $ 87,711
</TABLE>
- --------
(1) Adjusted to reflect an annual reduction of $2.9 million in interest
expense, and the related income tax effect of $1.2 million, on a pro forma
basis as if the net proceeds from the Offering (assuming the Underwriters'
over-allotment option is not exercised) had been utilized to repay a
portion of the Company's outstanding indebtedness at the beginning of each
period presented. Interest expense assumes a weighted average interest
rate of 6.55% for fiscal 1998 and for the first quarter of fiscal 1999,
which approximates the actual interest rate on $45.0 million of
indebtedness to be repaid with the estimated net proceeds from the
Offering. Assumes an initial public offering price of $15.00 per share of
Class A Common Stock--the midpoint on the estimated range of the public
offering price.
(2) Amounts exclude an aggregate of 602,540 shares of Class A Common Stock
(equal to 5% of the estimated total shares outstanding after the Offering)
reserved for issuance upon exercise of outstanding options and for future
issuances under the Company's Omnibus Stock Plan. See "Management--
Management Incentive Plans--Omnibus Stock Plan" and "--Grant of Options."
(3) As adjusted to give effect to the sale of 3,300,000 shares of Class A
Common Stock offered hereby by the Company. Assumes that the Class A
Common Stock offered by the Company is sold at $15.00 per share--the
midpoint on the estimated range of public offering prices.
(4) Adjusted to reflect the use of estimated net proceeds of $45.0 million to
the Company from the Offering to repay outstanding indebtedness of $45.0
million at the time of the Offering.

18
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of the Company's financial condition and results
of operations should be read in conjunction with the Selected Consolidated
Financial Information of the Company and the Consolidated Financial Statements
of the Company and the Notes thereto included elsewhere in this Prospectus.

OVERVIEW

General

The Company believes that it is the leading manufacturer and supplier of
industrial batteries and small engine starting batteries in the Americas. The
Company markets a full line of stationary and other batteries, as well as
motive power batteries and related products and services. Stationary batteries
are used primarily to supply standby operating power for (i)
telecommunications applications, such as wireless and wireline systems, (ii)
UPS applications for electronic, security and computer systems, and (iii)
switchgear and electrical control systems used in electric utilities and
energy pipelines. Stationary and other batteries include small engine starting
batteries used to start motorcycles, all-terrain vehicles, snowmobiles and
personal watercraft. Motive power batteries are used primarily to power
industrial forklift trucks and other materials handling equipment. Related
products include chargers, electronic power equipment and a wide variety of
battery accessories. The Company sells its products and services through a
network of distributors, independent representatives and an internal sales
force, and also maintains service centers throughout the United States.

From time to time, the Company has entered into acquisitions or joint
ventures with strategic partners to expand into new geographic markets or
strengthen its existing market positions, including, establishing an
industrial battery sales and distribution business in Mexico in fiscal 1994,
entering into a joint venture in Argentina to market and sell industrial
batteries in fiscal 1997, and acquiring certain assets of a U.S.-based
telecommunications installation and service business in fiscal 1996. In
addition, the Company has also selectively divested certain businesses (such
as Tucker Telecommunications in fiscal 1998) or significantly reduced certain
lines of business (such as the Company's electric vehicle battery ("EV")
product line in fiscal 1996). The Company expects to continue to undertake
selective acquisitions as opportunities arise and could divest or scale back
certain lines of business if they do not meet management's financial
performance requirements. Such transactions could have a material effect on
the Company's financial condition or results of operations. On August 5, 1998,
the Company entered into an agreement to purchase for $3.6 million, 80% of the
stock of Accumuladores Narvit Ltda. ("Narvit") located in Brazil, South
America. The annual sales are approximately $12 million, principally
representing battery sales to the telecommunications industry of Brazil.

Net Sales

The Company's net sales are derived mainly from the sale of stationary and
other batteries as well as motive power batteries to dealers, wholesale
distributors, and OEMs. The Company also derives significant net sales from
the sale of chargers, power supply equipment and accessories related to its
batteries, as well as from net sales from installation and maintenance
services. No customer accounted for more than 5% of the Company's net sales in
fiscal 1998. The market for batteries historically has been cyclical, with
periods of economic expansion generally leading to increased demand for the
Company's products.

As a result of rapid growth in the telecommunications industry, net sales
from the Company's stationary business have been increasing and are expected
to continue to increase at a faster rate than the Company's net sales as a
whole. To service the telecommunications industry successfully, the Company's
products and services will need to continue to meet rapidly changing industry
standards and specifications. The Company expects that growth in the
telecommunication industry will also contribute to the Company deriving
increased net sales from installation and maintenance services. In addition,
the Company expects to derive an increasing portion of its net sales from
Latin American and other international markets, where demand for the Company's
products is growing at a faster rate than in the United States.

19
<PAGE>

The battery industry and the Company have in the past been able to increase
product prices in response to significant increases in the cost of lead.
However, in periods of rapid lead cost increases, selling price increases are
not generally able to keep pace with lead costs, resulting in a period of
reduced gross profit margins. During periods of rapidly declining lead prices,
product selling prices have not fallen as rapidly, resulting in a period of
increased gross profit margins.

The Company expects to continue to develop its service business in
connection with, among other things, growth in demand for batteries and
installation services in the telecommunications industry. These activities
require that the Company estimate certain direct and indirect costs of
delivering services in advance of the date on which such service is performed.

The Company's foreign net sales and certain expenses are transacted in
foreign currencies. The Company reviews from time to time its foreign currency
exposure and evaluates whether it should enter into hedging transactions. The
Company does not presently hedge its foreign currency risks, as it does not
believe it has a material exposure.

Cost of Goods Sold

All direct and indirect manufacturing and distribution costs are included
in cost of goods sold. The principal costs include lead, plastics, steel,
separators, direct and indirect labor and benefits, freight costs, energy
costs and depreciation. Beginning in fiscal 1996, the Company initiated a
comprehensive cost reduction program. Among other things, this program has
focused on improving manufacturing efficiency by automating and reengineering
its operations and processes and redesigning products to reduce material costs
and has resulted in improvement in the Company's gross margin. Continuation of
this program should further reduce costs.

Lead represents a significant component of the Company's total cost of
goods sold. Lead is a commodity whose prices fluctuate from time to time. To
the extent these prices fluctuate, the Company's operating results will be
affected. The Company is not currently party to a long-term lead supply
contract, but it does routinely engage in forward contract purchases from its
major suppliers to secure in advance a portion, generally not exceeding 50%,
of its expected lead requirements for periods of up to one year. This policy
is authorized by the Company's Board of Directors and implemented by
authorized officers. Under these contracts, the Company was committed at March
31, 1998 to purchase 23.7 million pounds of lead for a total of $5.7 million.
The Company purchases other commodities, including plastics, steel,
separators, and energy used in its manufacturing activities, in the open
market from various sources and their availability and price are subject to
normal market conditions. Some of the Company's manufacturing plants are
located near customers; nevertheless, because of the lead content and
consequent weight of its battery products and the large geographic territory
in which it operates, the Company incurs significant freight costs in shipping
its products.

Operating Expenses

The Company's operating expenses include sales, general and administrative,
and engineering costs. These costs include salary and benefits, advertising,
promotional materials and certain promotion expenses, bad debt expenses and
professional fees, many of which are not directly affected by sales volumes.
Operating expenses also include certain non-capitalized start-up costs
associated with the Company's expansion into international markets and its
research and development programs, both of which the Company expects to
increase in future periods as the Company continues to expand its products and
geographic markets. The Company also expects to incur additional general and
administrative expenses as a result of becoming a publicly-held company.

Income Taxes

The Company has experienced a significant decrease in its effective tax
rate from approximately 54% in fiscal 1996, to 45% in fiscal 1997, and 41% in
fiscal 1998 and in the first quarter fiscal 1999. This reduction since 1996
was primarily attributable to a reduction in the effective tax rate for non-
deductible amortization expenses on increasing levels of pre-tax income and a
reduction in the effective tax rate for state income taxes.

20
<PAGE>

Amortization Expense

The Company's amortization expense is primarily attributable to
identifiable intangible assets associated with acquisitions made by the
Company, and is amortized using the straight-line method over the estimated
useful lives of the related which range from 7 to 25 years.

RESULTS OF OPERATIONS

The following table sets forth items of income and expense reflected in the
Company's consolidated statements of income as percentages of its net sales
for the periods indicated (minor differences are due to roundings):

<TABLE>
<CAPTION>
YEAR ENDED MARCH 31, THREE MONTHS ENDED
---------------------- ---------------------
JUNE 29 JUNE 28
1996 1997 1998 1997 1998
------ ------ ------ --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net sales.................. 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of goods sold......... 82.7 79.8 77.8 78.7 77.0
------ ------ ------ --------- ---------
Gross profit............... 17.3 20.2 22.2 21.3 23.0
Operating expenses......... 12.3 13.7 14.2 14.4 14.7
Amortization expense....... 1.0 1.0 .9 1.0 .9
------ ------ ------ --------- ---------
Operating earnings......... 4.0 5.5 7.0 5.9 7.4
Interest expense........... 3.2 2.7 2.4 2.7 2.5
Loss on investment......... 0.0 0.0 1.0 -- --
Other (earnings) expense,
net....................... 0.0 0.1 0.0 .2 .3
------ ------ ------ --------- ---------
Earnings before taxes...... 0.8 2.6 3.6 3.0 4.7
Income taxes............... 0.4 1.2 1.5 1.3 1.9
------ ------ ------ --------- ---------
Net earnings............... 0.4% 1.4% 2.1% 1.8% 2.8%
====== ====== ====== ========= =========
</TABLE>

The following table sets forth the percentage increase over the prior
comparable period of selected items of income and expense reflected in the
Company's consolidated statements of income.

<TABLE>
<CAPTION>
THREE
YEAR ENDED MARCH 31, MONTHS
---------------------- ENDED JUNE 28,
1996 1997 1998 1998
------- ------- ------ ----------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Net sales......................... 8.8% 0.0% 10.8% 4.4%
Gross profit...................... 7.0% 16.9% 21.8% 12.9%
Operating earnings................ 22.9% 37.0% 42.6% 31.6%
Earnings before taxes............. 118.7% 234.6% 51.3% 61.1%
Net earnings...................... 107.6% 299.6% 62.6% 65.0%
</TABLE>

FISCAL 1999 THREE MONTHS ENDED JUNE 28, 1998 VERSUS FISCAL 1998 THREE MONTHS
ENDED JUNE 29, 1997

Net Sales. Net sales for the first quarter of fiscal 1999 were $98.9
million compared to the first quarter of fiscal 1998 net sales of $94.7
million, an increase of 4.4%. This growth resulted from increases in unit
volume sales in both the motive power and other product lines. Net sales for
stationary and other products and services, and motive power sales and
services represented approximately 57% and 43% of consolidated net sales,
respectively.

21
<PAGE>

Gross Profit. Gross profit for the first quarter of fiscal 1999 was $22.8
million compared to $20.2 million for the first quarter of fiscal 1998, an
increase of 12.9%. For the same period, the gross profit margin increased 1.7%
percentage points to 23% in fiscal 1999 compared to 21.3% in fiscal 1998. The
increase in the gross profit percentage is primarily due to continued
reductions in material costs associated with the cost reduction program, and
an improvement in the sales mix.

Operating Expenses. Operating expenses for first quarter of fiscal 1999
were $14.5 million, compared to $13.7 million for first quarter of fiscal
1998, an increase of 6.2% As a percentage of net sales, operating expenses
increased slightly to 14.7% from 14.4%.

Amortization Expense. Amortization expense for the first quarter of fiscal
1999 and 1998 was $0.9 million. Amortization expense was mainly attributable
to identifiable intangible assets related to acquisitions made by the Company.

Operating Earnings. Operating earnings for the first quarter of fiscal
1999 were $7.3 million, compared to $5.6 million for fiscal 1998 first
quarter, an increase of 31.6%. For the same period, the operating earnings
margin increased 1.5% percentage points to 7.4% in fiscal 1999 compared to
5.9% in first quarter fiscal 1998. This increase was primarily attributable to
the increase in unit volume sales, improved sales mix and lower material
costs.

Interest Expense. Interest expense of $2.5 million for the first quarter
of fiscal 1999 was flat compared to fiscal 1998. A slight increase in interest
rates was offset by lower average borrowings for the quarter.

Income Taxes. The Company has experienced a decrease in the effective tax
rate for the first quarter of fiscal 1999 to 41% from 42% in first quarter
1998. This reduction is primarily attributable to a reduction in the effective
tax rate for non-deductible amortization expenses on an increasing level of
pre-tax income.

Net Earnings. Net earnings were $2.7 million for the first quarter of
fiscal 1999 compared to $1.7 million for the same period in fiscal 1998, an
increase of $1.0 million or 65.0%. This increase was primarily attributable to
increased unit volume sales, improved sales mix, and lower material costs.

FISCAL 1998 VERSUS FISCAL 1997

Net Sales. Net sales for fiscal 1998 were $396.3 million compared to $357.5
million for fiscal 1997, an increase of 10.8%. Virtually all of this growth
resulted from increased unit volumes in the Company's stationary and motive
power lines. Net sales for stationary and other products and services, and
motive power products and services, represented approximately 57% and 43% of
consolidated net sales, respectively.

Gross Profit. Gross profit for fiscal 1998 was $87.9 million compared to
$72.1 million for fiscal 1997, an increase of 21.8%. The Company's gross
profit margin increased 2.0 percentage points to 22.2% in fiscal 1998 compared
to 20.2% in fiscal 1997. This substantial increase in gross profit margin was
attributable, in significant part, to continued reductions in material and
manufacturing costs associated with the Company's ongoing cost reduction
initiatives.

Operating Expenses. Operating expenses for fiscal 1998 were $56.4 million
compared to $49.0 million for fiscal 1997, an increase of 15.1%. As a
percentage of net sales, operating expenses increased slightly to 14.2% in
fiscal 1998 compared to 13.7% in fiscal 1997. This increase resulted
principally from increased selling costs from expanding sales, markets,
territories and locations, and continued start-up costs related to the
Company's new joint venture in Argentina.

Amortization Expense. The Company's amortization expense was $3.6 million
in fiscal 1998 and in fiscal 1997. Amortization expense was mainly
attributable to identifiable intangible assets associated with acquisitions
made by the Company.

22
<PAGE>

Operating Earnings. Operating earnings for fiscal 1998 were $27.9 million
compared to $19.5 million for fiscal 1997, an increase of 42.6%. This increase
was primarily attributable to overall unit volume growth, coupled with the
improved gross profit margin attributable to reduced material and
manufacturing costs.

Interest Expense. Interest expense for fiscal 1998 was $9.7 million, which
increased slightly from the same period in fiscal 1997. During this period, a
modest increase in interest rates was offset by slightly lower borrowings.

Loss on Investment. During fiscal 1998, the Company recognized $4.0 million
in losses associated with its investment in Tucker Telecommunications Company
("Tucker"). Such losses consisted of the full write-off of the Company's
investment in Tucker plus the cost of settling certain guarantee obligations
of Tucker related to the closing of its business.

Net Earnings. Net earnings were $8.3 million for fiscal 1998 compared to
$5.1 million for fiscal 1997, an increase of $3.2 million, or 62.6%. This
increase was primarily attributable to increased unit volume and reductions in
both material and manufacturing costs associated with the Company's cost
reduction initiatives, offset by the $4.0 million loss in investment.

FISCAL 1997 VERSUS FISCAL 1996

Net Sales. Net sales for both fiscal 1997 and fiscal 1996 were $357.5
million. When adjusting fiscal 1996 net sales by $14.0 million for the
discontinued EV product line, fiscal 1997 net sales increased 4.1%. Net sales
for stationary and other products and services, and motive power products and
services, represented approximately 57% and 43% of consolidated net sales
respectively. In addition, in late fiscal 1996, the Company expanded its
business in the stationary integrated sales and service area for its
telecommunications customers, through the acquisition of certain assets of
Advanced Power Systems, which accounted for increased net sales of
approximately $3.6 million in fiscal 1997.

Gross Profit. Gross profit for fiscal 1997 was $72.1 million compared to
$61.7 million in fiscal 1996, an increase of 16.9%. The gross profit margin
increased 2.9 percentage points in fiscal 1997 to 20.2%, compared to 17.3% in
fiscal 1996. This substantial increase in gross profit margin was primarily
attributable to a reduction in material and manufacturing costs associated
with the Company's cost reduction initiatives. Additionally, the
discontinuance of the EV product line at the end of fiscal 1996 improved the
fiscal 1997 gross profit margin by approximately 0.8%.

Operating Expenses. Operating expenses for fiscal 1997 were $49.0 million
compared to $44.0 million for fiscal 1996, an increase of 11.4%. As a
percentage of net sales, operating expenses increased to 13.7% in fiscal 1997
from 12.3% in fiscal 1996. This increase resulted principally from increased
engineering costs for new products, start-up costs related to a new joint
venture in Argentina and the discontinuance of the EV product line in 1996
which had negligible operating expenses.

Amortization Expense. Amortization expense was $3.6 million in fiscal 1997
and $3.5 million in fiscal 1996. Amortization expense was mainly attributable
to identifiable intangible assets related to acquisitions made by the Company.

Operating Earnings. Operating earnings for fiscal 1997 were $19.5 million
compared to $14.3 million for fiscal 1996, an increase of 37.0%. This increase
was primarily attributable to the improved gross profit margin, offset by
increased operating expenses.

Interest Expense. Interest expense for fiscal 1997 was $9.6 million
compared to $11.6 million in fiscal 1996. This decrease resulted from a
decrease in the Company's outstanding indebtedness in fiscal 1997, primarily
as a result of improved cash flow and earnings and a modest reduction in
interest rates.

23
<PAGE>

Net Earnings. Net earnings for fiscal 1997 were $5.1 million compared to
$1.3 million for fiscal 1996, an increase of approximately 300%. This
significant increase was primarily attributable to reductions in both material
and manufacturing costs associated with the Company's cost reduction
initiatives, improved earnings connected with the discontinuance of the EV
product line and reductions in interest expense.

LIQUIDITY AND CAPITAL RESOURCES

The Company uses cash from operations and from financing activities to fund
working capital needs, capital expenditures and to make payments on
outstanding indebtedness.

The Company has various credit facilities available to assist it in meeting
its liquidity requirements. These consist of term loans, revolving lines of
credit, capital equipment lease obligations and a structured, asset-backed
accounts receivable financing facility. The outstanding balance under the term
loans and capital equipment lease obligations was $89.1 million (which
includes the current portion of long-term debt and capital equipment lease
obligations of $14.5 million) at June 28, 1998. At June 28, 1998, availability
under the Company's various revolving lines of credit totalled $83.0 million,
of which $32.2 million was outstanding. Indebtedness under the revolving lines
of credit, and certain of the term debt facilities and capital lease
obligations, in an aggregate outstanding principal amount of $68.7 million
bear interest at floating rates. Indebtedness under certain of the long-term
debt facilities in an aggregate outstanding principal amount of $52.6 million
bear interest at fixed annual rates ranging from 3.0% to 7.9%. The weighted
average maturity of the Company's long-term debt was approximately two years
at June 28, 1998. The average annual interest rate for all of the Company's
credit facilities was approximately 6.4% for fiscal 1998 and first quarter
fiscal 1999. As of June 28, 1998, $39.0 million of outstanding indebtedness of
the Company was guaranteed by Yuasa Japan. The Company anticipates that,
subsequent to the Offering, none of the Company's indebtedness will be
guaranteed by Yuasa Japan.

The Company's financing agreements with certain of its lenders contain
various covenants which, absent prepayment in full of the indebtedness or the
receipt of waivers, would limit the Company's ability to conduct certain
specified business transactions, including incurring debt, extending credit,
mergers, consolidations or similar transactions, buying or selling assets out
of the ordinary course of business, engaging in sale and leaseback
transactions and certain other actions. The Company believes it is presently
in full compliance with all such covenants. The Company intends to repay
certain of the indebtedness to which some of the foregoing covenants apply
using the net proceeds of the Offering. The Company sells accounts receivable,
on a continuous basis, to an asset-backed structured finance conduit. The
maximum amount available under this facility was $40.0 million at June 28,
1998.

Net cash used by operating activities for the first quarter of fiscal 1999
was $1.8 million compared to $2.2 million of net cash flow provided for the
same period in fiscal 1998. This $4.0 million decrease is primarily
attributable to an increase in net working capital of approximately $4.6
million, offset in part from higher net earnings of $1.0 million.

Net cash used in investing activities was $10.9 million in the first
quarter of fiscal 1999 compared to $1.7 million in the same period in fiscal
1998. This $9.2 million increase is due in part to an increase of $4.2 million
in capital expenditures for the first quarter of fiscal 1999 versus the same
period of fiscal 1998. This increase in capital expenditures is caused by
timing differences in the quarterly spending pattern of capital projects. This
increased quarterly capital spending is not expected to continue in future
quarterly periods and total expenditures are estimated to be approximately
$17.0 million for the entire fiscal 1999 year, compared to $19.0 million in
fiscal 1998. In addition, the Company loaned $5.0 million to Yuasa Corporation
pursuant to the credit facility dated March 26, 1998. Interest is charged on a
monthly basis in accordance with the agreement. See "Related Party
Transactions--Yuasa Japan."

24
<PAGE>

Net cash provided by financing activities was $13.3 million for the first
quarter of fiscal 1999 versus $3.8 million for the same period of fiscal 1998.
This $9.5 million increase was primarily attributable to increased borrowings
on the Company's various credit facilities. These borrowings were used to
finance the activities discussed above. In May 1998 the company paid the $2.3
million dividend declared in March, 1998.

Net cash provided by operating activities for fiscal 1998 was $35.7 million
compared to $27.5 million for fiscal 1997. This $8.2 million increase was
primarily attributable to increased net earnings of $3.2 million and changes
in working capital of $6.7 million.

Net cash used in investing activities was $19.0 million in fiscal 1998 and
was used principally to add property, plant and equipment, primarily for
expansion of manufacturing capacity and cost reduction initiatives, as well as
normal replacements. Net cash used in investing activity for fiscal 1997 was
$14.3 million, which included $11.1 million for property, plant and equipment
additions related primarily to capacity expansion, cost reduction and
replacement activities and $3.2 million related to the acquisition of certain
assets in the United States and a joint venture in Argentina.

Net cash used in financing activities was $14.4 million for fiscal 1998,
which was primarily attributable to reductions in short-term borrowings by
$13.8 million. Net cash used in financing activities for fiscal 1997 was $11.9
million as total debt was reduced by $10.7 million and a $1.2 million dividend
was paid.

Capital expenditures, including capital lease obligations, were $19.0
million for fiscal 1998. Future capital expenditures are expected to be
focused on increasing manufacturing capacity when required to support
increased demand for the Company's products, cost reduction projects, routine
replacements, and quality and environmental projects. Capital expenditures for
fiscal 1999 are estimated to be approximately $17 million.

The Company uses its short term credit facilities, including its revolving
lines of credit to fund its working capital requirements and to finance
capital additions on an interim basis until replaced with longer term
financing.

The Company declared a cash dividend of $2.3 million in March 1998 and paid
it in May, 1998 to its current stockholders, Yuasa Japan and Exide. The
dividend was paid from fiscal 1998 earnings and is reflected in the Company's
1998 financial statements. The Company has advanced $5.0 million to Yuasa
Japan under a revolving note agreement which expires on March 30, 1999.

The Company intends to use all of the estimated net proceeds from the
Offering to repay the Company's indebtedness. See "Use of Proceeds."

The Company continues to have significant liquidity requirements. In
addition to financing its working capital needs, the Company requires cash to
fund debt service and capital expenditures. The Company believes that existing
cash balances, cash flow from operating activities, and borrowings available
under its credit facilities will be sufficient to fund working capital needs,
capital expenditures and debt service requirements of the Company through
fiscal 1999.

The Company has historically relied on indebtedness to meet certain of its
liquidity requirements and can be expected to do so in the future in light of
the growth contemplated by its business strategy.

RAW MATERIALS

Lead, plastics, steel, copper, separators and sulfuric acid are among the
major raw materials used in the manufacturing of the Company's products and,
accordingly, represent a significant portion of the Company's materials costs.
Total lead purchases accounted for approximately 30% of all the Company's raw
material purchases in all fiscal periods presented. As of March 31, 1998, the
Company was committed under forward supply contracts to purchase 23.7 million
pounds of lead for a total purchase price of $5.7 million.

25
<PAGE>

INFLATION

There was no significant impact on the Company's operations as a result of
inflation during the three years ended March 31, 1998.

INFORMATION SYSTEMS

The Company has analyzed its information systems and software and has
undertaken and expects to continue to undertake capital projects with respect
to these systems, including upgrades or installations of personal computer and
networking systems and the Company's accounting, management information and
communications systems. The Company is communicating with customers,
suppliers, financial institutions and others with which it does business
regarding their Year 2000 compliance. Management does not anticipate that the
Company will incur significant operating expenses or be required to invest
heavily in additional computer systems improvements to be Year 2000 compliant,
and does not anticipate that business operations will be disrupted or that its
customers will experience any interruption of service as a result of the
millennium change. The Company does not believe that the "Year 2000" issue
will have a material adverse impact on its operations.

FLUCTUATIONS IN QUARTERLY RESULTS

The Company's quarterly results are subject to fluctuation. See "Risk
Factors--Cyclical Industry; Variations in Quarterly Results." Historically,
the Company has experienced increased net sales during the fourth quarter of
the year reflecting the customary seasonal buying patterns of its customers.
As a result of this, the Company's fourth quarter net sales, gross profit,
operating earnings and net earnings typically have been the highest of any
quarter.

The following table sets forth the Company's summary unaudited historical
results of operations on a quarterly basis:

<TABLE>
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter
----------- ---------- ----------- -----------
(dollars in thousands except per share data)
<S> <C> <C> <C> <C>
FISCAL 1999
Net sales...................... $98,864
Gross profit................... $22,767
Net earnings................... $ 2,743
Net earnings per share (basic
and diluted).................. $ 0.34
FISCAL 1998
Net sales...................... $94,677 $91,795 $104,428 $105,417
Gross profit................... $20,157 $22,205 $ 22,841 $ 22,676
Net earnings................... $ 1,662 $ 2,992 $ 642 $ 3,012
Net earnings per share (basic
and diluted).................. $ 0.21 $ 0.37 $ 0.08 $ 0.37
FISCAL 1997
Net sales...................... $85,370 $85,821 $ 85,239 $101,096
Gross profit................... $15,574 $16,986 $ 17,121 $ 22,466
Net earnings................... $ 66 $ 899 $ 810 $ 3,336
Net earnings per share (basic
and diluted).................. $ 0.01 $ 0.11 $ 0.10 $ 0.41
</TABLE>

RECENT ACCOUNTING PRONOUNCEMENTS

In March 1995, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 121 ("SFAS 121"), Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of. This standard specifies when assets should be reviewed for
impairment, how to determine if an asset is impaired, how to measure an
impairment loss, and what disclosures are necessary in the financial
statements. The Company adopted SFAS 121 on April 1, 1996 and recorded a
pretax charge of $0.4 million during fiscal 1997.

26
<PAGE>

In June 1996, the FASB issued Statement of Financial Accounting Standards
No. 125, Accounting for Transfers and Servicing of Financial Assets and
Extinguishment of Liabilities, which provides accounting and reporting
standards for sales, securitizations, and servicing of receivables and other
financial assets, secured borrowing and collateral transactions, and the
extinguishment of liabilities. The Company has modified its asset-backed
accounts receivable financing agreements to meet the new requirements to
enable it to continue recognizing transfers of certain receivables to special-
purpose entities as sales. The adoption of this standard had no impact on the
Company.

In 1997, the FASB issued Statement of Financial Accounting Standards No.
128, Earnings per Share. This standard replaced the calculation of primary and
fully diluted earnings per share with basic and diluted earnings per share.
All earnings per share amounts have been presented to conform to this
standard.

In June 1997, the FASB issued Statement of Financial Accounting Standards
130 ("SFAS 130"), Reporting Comprehensive Income, which establishes rules for
reporting and displaying all changes in shareholders' equity exclusive of
transactions with owners, such as capital investments. Examples of
comprehensive income include unrealized gains or losses on available-for-sale
securities, translation adjustments on investments in foreign subsidiaries,
and certain changes in minimum pension liabilities. The statement is effective
for fiscal years beginning after December 15, 1997. The adoption of SFAS 130,
effective April 1, 1998, did not impact the Company's financial condition or
results of operations.

In June 1997, the FASB issued Statement of Financial Accounting Standards
131 ("SFAS 131"), Disclosures about Segments of an Enterprise and Related
Information, which is effective for years beginning after December 15, 1997.
SFAS 131 establishes standards for the way that public businesses report
information about operating segments in annual financial statements and
requires that those businesses report selected information about operating
segments in interim financial reports. It also establishes standards for
related disclosures about products and services, geographic areas, and major
customers. The Company will adopt the new requirements for the fiscal year
ending March 31, 1999, which will require retroactive application. The Company
has not completed its review of this standard and has not determined the
impact its adoption will have on the Company's financial statements.

In February 1998, the FASB issued Statement of Financial Accounting
Standards No. 132 Employers' Disclosures about Pensions and Other Post
Retirement Benefits. This standard revises employers' disclosures about
pensions and other post-retirement plans, but does not change the measurement
or recognition of those plans. This standard will be effective for the
Company's financial statements for the year ended March 31, 1999.

In March 1998, the AICPA issued SOP 98-1, Accounting For the Costs of
Computer Software Developed For or Obtained For Internal-Use. SOP 98-1 will
become effective for the Company on April 1, 1999. This SOP will require the
capitalization of certain costs incurred after the date of adoption in
connection with developing or obtaining software for internal-use. The Company
currently capitalizes certain external costs and expenses all other costs as
incurred. The Company believes the SOP will not materially effect the
Company's earnings or financial position.

In April 1998, the AICPA issued SOP 98-5, Reporting on the Costs of Start-
Up Activities. The SOP is effective for the Company on April 1, 1999. The SOP
will require that all Start-up costs, including organizational costs be
expensed as incurred. In addition, the SOP requires most entities upon
adoption to write-off as a cumulative effect of a change in accounting
principle any previously capitalized start-up or organizational costs. The
company currently expenses all start-up costs as incurred. The Company
believes the SOP will not materially effect the Company's earnings or
financial position.

In June 1998, the FASB issued Statement of Financial Accounting Standards
No. 133, Accounting for Derivative Instruments and Hedging Activities. This
Statement establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts (collectively

27
<PAGE>

referred to as derivatives) and for hedging activities. It requires that an
entity recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair value.
This standard is effective for the Company's financial statements for all
quarters in the year beginning April 1, 2000. Management has not completed its
review of Statement No. 133 and has not determined the impact adoption will
have on the Company's financial statements.

28
<PAGE>

BUSINESS

GENERAL

The Company believes that it is the leading manufacturer and supplier of
industrial batteries and small engine starting batteries in the Americas. The
Company markets a full line of stationary and other batteries, as well as
motive power batteries and related products and services. Stationary batteries
are used primarily to supply standby operating power for (i)
telecommunications applications, such as wireless and wireline systems, (ii)
UPS applications for electronic, security and computer systems, and (iii)
switchgear and electrical control systems used in electric utilities and
energy pipelines. Stationary and other batteries include small engine starting
batteries used to start motorcycles, all-terrain vehicles, snowmobiles and
personal watercraft. Motive power batteries are used primarily to power
industrial forklift trucks and other materials handling equipment. Related
products include chargers, electronic power equipment and a wide variety of
battery accessories. The Company sells its products and services through a
network of distributors, independent representatives and an internal sales
force, and also maintains service centers throughout the United States.

For fiscal 1994 through fiscal 1998 the Company's net sales grew from
$296.4 million to $396.3 million, while net earnings decreased from $6.3
million in fiscal 1994 to $0.6 million in fiscal 1995. The reduction in fiscal
1995 net earnings was due to a sudden increase in the cost of raw materials
and manufacturing inefficiencies at the Company. Beginning in fiscal 1996, the
Company initiated a strategic program primarily designed to improve
manufacturing efficiencies and reduce product costs. This program included,
among other items, redesigning certain of the Company's products to reduce
material costs and automating and reengineering its manufacturing operations.
The Company's gross profit margin increased from 17.6% to 22.2% between fiscal
1995 and fiscal 1998 and net earnings increased from $0.6 million in fiscal
1995 to $8.3 million in fiscal 1998 due, in significant part, to the success
of this program.

The Company was formed in 1998 to hold the stock of YEI. YEI was formed in
1965 to purchase and resell industrial batteries manufactured by Yuasa Japan.
In June 1991, YEI acquired the stationary and motive power business and
related assets of Exide's U.S. industrial battery operations. In 1992, Yuasa
Japan caused an existing U.S. battery manufacturing joint venture between YEI
and Exide to merge with YEI. Immediately after completion of the Offering,
Yuasa Japan will own all of the 7,000,000 issued and outstanding shares of
Class B Common Stock, representing approximately 61% of all of the Company's
outstanding Common Stock and approximately 76% of the combined voting power of
the outstanding shares of Common Stock (approximately 73% of the combined
voting power if the Underwriters' over-allotment option is exercised in full).
See "Risk Factors--Relationship with Principal Stockholder" and "Description
of Capital Stock." The Company benefits from its relationship with Yuasa Japan
through its right to use the "Yuasa" brand name, and from its right to receive
technical assistance from, and its right of access to battery technology
developed by, Yuasa Japan. Additionally, the Company sells batteries to Yuasa
Japan and its affiliates for sale in the Pacific Rim and purchases batteries
from Yuasa Japan and its affiliates for sale in the Americas. See "Related
Party Transactions."

INDUSTRY

The Company believes that it is well-positioned to benefit from expected
continued growth in the markets for its products, especially the market for
its stationary and motive power industrial products. According to industry
sources, U.S. sales of large (greater than 25 amperes/hour) industrial
stationary and motive power batteries were approximately $670 million for
fiscal 1997 and are projected to be approximately $760 million for fiscal
1998. Stationary batteries represent approximately 49% of the total U.S.
industrial battery market in fiscal 1998. The stationary battery market has
grown at a compounded annual growth rate of approximately 13.7% per year over
the past five years, fueled principally by growth in the U.S.
telecommunications industry. The U.S. market for telecommunications services
has grown significantly during this period, and is expected to continue to
grow as cellular, PCS, paging, specialized mobile radio and other new and
emerging technologies

29
<PAGE>

become increasingly accessible and affordable to a growing number of
customers. In addition, use of the World Wide Web and other Internet services,
electronic funds transfers, e-mail and other electronic data interchange, fax
transmissions, television cable and other forms of electronic data
transmission has grown and appears likely to continue to grow significantly.
This growth has required, and the Company believes will continue to require,
substantial investment by service providers in infrastructure equipment and
installation, including batteries and related products and services of the
type offered by the Company. Motive power batteries represent approximately
51% of the total U.S. industrial battery market in fiscal 1998. The motive
power battery market has grown at a compounded annual growth rate of
approximately 9.6% per year over the past five years, fueled principally by
increased demand for batteries in the industrial forklift truck market. The
motive power battery market is expected to grow at a lower rate for the next
several years.

OPERATING STRENGTHS

The Company has been able to achieve profitable growth by capitalizing on
the following operating strengths:

Strong Market Positions. The Company believes it holds the leading market
position in both the motive power and small engine starting battery markets
and is among the three largest suppliers of stationary batteries in the
Americas. The Company believes that its strong market positions result, in
large part, from its extensive direct sales force and national network of
independent distributors, representatives and service centers.

Established Brand Names. The Company believes that its brand names are
among the most highly recognized in the markets it serves. The Company sells
its stationary and related products principally under the "Yuasa" and "Exide"
brand names, motive power products principally under the "Exide" and "General"
brand names, and small engine starting batteries under the "Yuasa" brand name,
as well as under certain private labels. The Company benefits from having the
right to use the "Yuasa" and "Exide" brand names which hold a reputation for
high quality.

Reputation for Quality, Service and Innovation. The Company believes that
its reputation for product quality, reliability and service enhances its
competitiveness. The Company also competes on its ability to partner with its
customers to engineer innovative power solutions.

Manufacturing Efficiency. Since it began its strategic initiative to
improve manufacturing efficiency in fiscal 1996, the Company has spent over
$45.0 million, among other things, to reengineer and automate its
manufacturing operations and to increase plant capacities. As a result, the
Company believes its manufacturing operations are among the most modern and
efficient in the industry and will provide sufficient capacity to meet
expected demand for the Company's products over the next three years without
substantial additional investment.

Broad Range of Products. The Company believes that it offers the broadest
product capability in the industry, including batteries addressing a wide
range of power requirements (from 1 ampere/hour to 4,000 amperes/hour) and
applications. This broad range of products allows the Company to customize its
products to meet varying customer requirements.

Relationship with Yuasa Japan. The Company benefits from its relationship
with Yuasa Japan through its ability to use the "Yuasa" brand name, and from
technical assistance and access to battery technology developed by Yuasa
Japan. Additionally, the Company sells batteries to Yuasa Japan and its
affiliates for resale in the Pacific Rim, and purchases batteries from Yuasa
Japan and its affiliates for resale in the Americas. Yuasa Japan is one of the
leading manufacturers of lead acid batteries in the world.

30
<PAGE>

BUSINESS STRATEGY

The Company's primary objectives are to increase its net earnings and
return on shareholders' equity and to capitalize on its operating strengths to
grow faster than the markets it serves by implementing the following
strategies:

Stationary Products: Focus on Telecommunications and Other High Growth
Markets. The Company believes that the telecommunications markets in the
United States and the rest of the Americas offer high growth potential for
sales of its stationary products. The Company intends to take advantage of its
leading position in the stationary battery market, as well as its other
operating strengths to increase its share of these growing and profitable
markets.

The Company recently strengthened its stationary business by adding new
members to its management team with broad experience in both the industrial
battery and telecommunications markets and extensive business relationships
with existing and potential purchasers of the Company's stationary products.
The Company intends to focus this team's efforts on increasing the Company's
sales of its stationary products to the telecommunications markets and other
markets which may be identified as offering rapid growth potential.

The Company also intends to focus its engineering and manufacturing
resources on products which have applications in the telecommunications
markets and other markets which may be identified as offering rapid growth
potential. The Company intends to continue its strategy of developing
customized engineering and other product solutions for OEMs and end users of
its products through strategic partnerships with them and by taking advantage
of technical assistance available from Yuasa Japan. Further, the Company
intends to use its increased manufacturing capacity and new systems and
programs to significantly improve delivery to its customers with shorter lead
times.

Motive Power and Small Engine Starting Products: Maintain Leadership
Position. The Company intends to maintain its leadership position in the
motive power market by (i) continuing to provide a dual brand approach,
including a premium, higher performance product, marketed under the "Exide"
brand, and a lower priced product marketed under the "General" brand, (ii)
leveraging its nationwide sales and service network, and (iii) improving
delivery to its customers through shorter lead times. The Company intends to
maintain its leadership position in the small engine starting battery market
by developing new products for emerging applications, such as cordless
electric mowers and trimmers, and by developing programs to maintain and
enhance brand image and customer loyalty.

31
<PAGE>

PRODUCTS

General

The Company's lead acid battery products span a broad range of sizes,
configurations and electrical capacities (from 1 ampere/hour to 4,000
amperes/hour) and are generally of either the flooded or the valve regulated
("VRLA") type. Of these two types, VRLA batteries represent newer technology.
This broad range of products allows the Company to more readily meet customer
specifications.

Stationary and Other Products

The Company's stationary products include a variety of lead-acid batteries
(both flooded and VRLA) and power supply cabinets, enclosures and other
equipment and services. The Company's stationary products are used to provide
"last resort" backup or standby power for facilities or electrical equipment
in the event of a loss of power from the primary power source, generally
external alternating current ("AC"). Primary applications include (i)
telecommunications, such as central telephone exchanges, microwave relay
stations, and many other wireless and wireline systems; (ii) UPS, principally
for computers and computer-controlled equipment, hospital life support
equipment, corporate and residential alarm systems, point of sale equipment,
emergency lighting, closed circuit television systems, computers (mainframe,
desktop and portable), medical equipment, test equipment and various types of
instrumentation and (iii) standby power for switchgear and other
instrumentation control systems and equipment for electric utilities, pipeline
systems and desalinization plants, and to help cover peak loads experienced by
electric utilities.

Because of the significantly different needs of the telecommunications,
UPS, switchgear and other stationary battery markets, the Company offers a
distinct line of batteries for each of those markets, each comprising a
variety of products. These batteries range from 1 to 4,000 amperes/hour in
electrical capacity. UPS normally provide up to fifteen minutes of AC power in
the event of loss of power from the primary external power source, typically
to provide orderly shut-down of computer equipment to protect against loss of
data, or to ensure continued operation of life support or other equipment
during power outages on a short-term basis until emergency generators are able
to start operating at sufficient capacity to power the equipment.

For typical telecommunications applications, the Company's batteries are
designed to provide high reliability and extended operation (up to eight hours
before recharging). For typical switchgear and electrical control systems in
electric utilities, the Company's batteries are designed to provide high
reliability over an eight-hour period to back up the electrical
instrumentation and control systems, while also providing a very high
discharge rate for short periods at several intervals to operate the
switchgear. The Company's small capacity VRLA standby and UPS batteries and
related products are sold under the "Yuasa" brand name and the Company's large
capacity standby batteries and related products are sold principally under the
"Exide" brand name.

The Company's power system products, principally chargers, power control
and distribution equipment, perform a wide variety of functions. The Company's
chargers and power rectifiers convert or rectify external AC power into direct
current ("DC") power at the appropriate level and quality of voltage and apply
that DC power to charge the battery and, in some cases (such as
telecommunications and UPS), to operate the customer's equipment. For
applications that require different power levels, the Company's power control
and distribution equipment can distribute DC power at appropriate levels to
each application.

The Company also manufactures and purchases for resale a wide variety of
battery trays, component racks, cabinets and other accessories that are used
in conjunction with its motive power and stationary battery and power systems
products and a complete line of cabinets for office installation of lead-acid
batteries. Some of the Company's racks and cabinets are designed to meet very
demanding customer specifications, including racks designed to withstand
seismic shocks and weatherproof cabinets to meet Regional Bell Operating
Company specifications.

32
<PAGE>

The Company's Integrated Systems and Service ("IS&S") unit provides turnkey
engineering, design, furnishing, installation, service, maintenance and
management of stationary products and DC power systems, chiefly to the
telecommunications industry. Its services include (i) design of integrated
wireless and wireline telecommunications base stations, (ii) manufacture of
some or all of associated DC power supplies and electronic equipment; (iii)
manufacture and supply of backup batteries and enclosures or other
accessories; and (iv) on site installation and ongoing maintenance and
management of the complete system. Through the Company's service network, the
Company's IS&S unit offers its Certified Power Program, which is an extended
service contract, allowing the customer to outsource DC power management
functions.

The Company's small engine starting batteries are of both flooded and VRLA
types and are used to start small engines, such as those found in motorcycles,
all-terrain vehicles, snowmobiles, and personal watercraft. The products are
sold under the "Yuasa" brand name and under certain private labels.

Motive Power Products

The Company's motive power products include complete systems and individual
components, mainly to power, monitor, charge and test the batteries used in
industrial forklift trucks and other materials handling equipment. They are
used in a variety of other applications, such as starting diesel locomotive
engines, and railroad and grade crossing warning lights. Batteries for the
motive power market are primarily flooded, although VRLA batteries are gaining
increasing acceptance in this market. Motive power batteries typically are
designed to provide relatively high discharge rates for a six- to eight-hour
operating period. They also require durable casings and content to withstand
the rigors of operation within moving vehicles that subject them to high
levels of vibration and shock. The life expectancy of motive power batteries
is normally five years.

The Company's motive power chargers rectify AC to DC to recharge motive
power batteries during the intervals between the operating periods of the
vehicles which the batteries power. The Company's other principal motive power
accessories include electronic controls to operate power rectifiers from
remote locations, a system for periodically adding water to batteries, which
can also be fitted with an automatic activator energized by the power
rectifier, and a variety of trays, connectors and other accessories. Motive
power products are sold primarily under the "Exide" and "General" brand names.

CUSTOMERS AND END USERS

Stationary and Other Products

Telecommunications Industry. End users are typically local, and long
distance wireline and wireless telecommunications service providers, as well
as OEMs of telecommunications equipment. See "Risk Factors--Telecommunications
Industry and Growth of the Company."

Computer Industry. End users of UPS are primarily businesses, and some
consumers, who have significant computer installations, or who otherwise
desire additional protection against data losses, as well as health care
providers having life-support or other critical equipment. The Company's
customers include OEMs of UPS and distributors of aftermarket replacement
equipment.

Security/Electronics Users. End users are typically businesses and
consumers who purchase or own alarm systems. Significant customers include
OEMs and their suppliers, distributors and contractors.

Electric Utilities, etc. End users of the Company's large-capacity standby
batteries include industrial installations such as electric utilities,
petroleum pipelines, and desalinization plants. Customers include utilities,
the petroleum industry, and government and military entities.

Other Users. The Company sells its small engine batteries to substantially
all OEMs in North America, motorcycle and automotive warehouse distributors,
and after-market replacement retailers. Other battery manufacturers and
distributors also purchase significant quantities of the Company's products to
resell under their own brand names to large retail customers.

33
<PAGE>

Motive Power Products

The customer base of this business unit is extremely diverse. It includes
dealers of industrial forklift trucks and other materials handling equipment
and, to a lesser extent, OEMs and end users of such equipment. End users
include manufacturers, distributors, warehouses, and retailers.

DISTRIBUTION AND SALES

Distribution, sales and service of products vary with the product or
service type, and the brand under which they are sold. Motive power products
marketed under the "General" brand are sold and serviced primarily through a
network of independent representatives. Motive power products bearing the
"Exide" brand are sold and serviced primarily through the Company's in-house
sales force. Large capacity stationary products bearing the "Exide" brand are
sold and serviced primarily through a combination of in-house sales force and
manufacturing representatives. The Company's small capacity stationary
products, which generally bear the "Yuasa" brand, are sold and serviced
primarily through independent representatives. IS&S sells integrated services
through independent representatives and in-house sales force, whereas the
installation and service work associated with IS&S is conducted primarily
through in-house technicians. Small engine starting batteries are sold
primarily through an in-house sales force.

The Company's in-house sales and marketing forces total approximately 380
employees, and the Company has approximately 107 independent representatives
for its products and services. Regardless of the business unit or product
line, the Company's independent representatives generally operate under a
written contract covering, among other things, an exclusive territory and
providing for compensation on a commission basis, with incentives provided for
higher margin sales. The Company's representatives generally do not market the
products of any of the Company's competitors, although many representatives
regularly service competitors' products, while offering the Company's products
as replacements.

WARRANTIES

The Company generally offers a limited warranty on its industrial battery
products and selected power supply equipment. The Company's small engine
starting batteries generally carry no warranty. These warranties are generally
limited to replacement of defective material; however, such limitations could
be contested in the event of a warranty claim. The Company believes that its
warranty reserve is adequate to cover future warranty costs.

INTERNATIONAL AND EXPORT

The Company's international business operations focus primarily on Canada,
Mexico, South America and, through Yuasa Japan affiliates, the Pacific Rim.
These operations consist of a network of subsidiaries and affiliated
companies, an internal sales force, and independent representatives, and are
responsible for the sale of substantially all of the Company's products
outside the U.S. Total international net sales were approximately 12% of
consolidated net sales in fiscal 1998, approximately 39% of which was
attributable to the Company's U.S. operations and approximately 61% of which
was attributable to the Company's foreign operations. Net sales of stationary
products represented approximately 65% of consolidated net sales attributable
to international operations in fiscal 1998 and approximately 56% in fiscal
1997. See "Risk Factors--Risks Associated with International Operations;
Currency Risk."

34
<PAGE>

MANUFACTURING OPERATIONS

The following chart lists the Company's manufacturing and principal
distribution facilities, their principal functions, the approximate size of
the facility, and whether the Company owns or leases the identified facility:

<TABLE>
<CAPTION>
Square
Location Function Footage Owned/Leased
- -------- ------------------------------------------- ------- ------------
<S> <C> <C> <C>
Hays, KS Small Capacity Stationary Batteries; 360,000 Owned
distribution
Richmond, KY Motive Power and Large Capacity Stationary 357,000 Owned
Batteries; distribution
Sumter, SC Motive Power and Large Capacity Stationary 303,000 Owned
Batteries; distribution
Laureldale, PA Small Engine Starting Batteries; 110,000 Owned
distribution
Cleveland, OH Chargers; distribution 63,000 Owned
Sumter, SC Battery Trays and Racks 46,374 Owned
Fogelsville, PA Distribution 92,000 Leased
Dallas, TX DC Power Equipment (primarily for wireless 45,380 Leased
telecommunications industry)
</TABLE>

All battery plants are certified to ISO 9002 standards; the Cleveland, Ohio
charger plant and its engineering and service groups are certified to ISO
9001. The Company believes that its ISO certification in 1995 made it the
first ISO 9000 registered battery corporation in North America. ISO
certifications are given by the International Organization for Standardization
to businesses that establish (and document their compliance with) quality
assurance programs and procedures. The Company believes that certain of its
customers attach significance to ISO certification, and that some customers
require ISO certification of their vendors as a condition of purchasing from
them. The Company believes that its manufacturing operations and product line
focus at each of its plant facilities allow for flexible manufacturing and the
ability to move large unit volumes efficiently. The Company also benefits from
an experienced workforce.

The Company believes that its manufacturing operations are among the most
modern and efficient in the industry and will provide sufficient capacity to
meet expected demand for the Company's products over the next three years
without substantial additional investment. However, disruption of production
at a plant where a key product line is produced could have a material adverse
effect on the Company.

APPLICATION ENGINEERING AND PRODUCT DEVELOPMENT

General

For fiscal 1998, fiscal 1997 and fiscal 1996, the Company's engineering
expenditures, including research and development activities, were $7.6
million, $6.8 million and $5.5 million, which include the Company's
expenditures for application engineering and product development. At March 31,
1998, the Company employed a manufacturing engineering group comprising 44
engineers, scientists and technicians.

35
<PAGE>

New Products

Since the early 1980s, technological developments in the battery industry
have been limited principally to the development of VRLA batteries. VRLA
batteries are sealed, generally do not contain caps for adding water, are
designed to require minimal maintenance and, under normal operating
conditions, they need not be installed in separate facilities. Market
acceptance of these batteries has been greatest in the UPS and
telecommunications portion of the standby power market, although they are also
gaining wider acceptance in the motive power battery market.

During the last several years, the Company has focused its research and
development efforts on improving existing products and manufacturing
processes, expanding its product lines and on developing new product lines,
particularly for its telecommunications customers. Examples include:

--a new line of VRLA stationary batteries, primarily for UPS
applications; a new line of batteries designed specifically to meet the
short duration, high energy power requirements of standby systems for
computer installations; and an expanded line of power rectifiers, power
supplies and other components for telecommunications applications.

--a modular battery using tubular positive plates in combination with
gelled electrolyte designed for use in long-duration, high-cycle
telecommunications applications, as well as for renewable energy
storage, switchgear, UPS and peak shaving/load leveling. The gel
additive provides a larger volume of electrolyte than the absorbed
glass mat technology typically used in the telecommunications industry.

In addition, Yuasa Japan has entered into a License and Technology
Agreement, under which Yuasa Japan has agreed to provide the Company with
exclusive access in the Americas to technical assistance, and access to new
and emerging technologies, products and product developments relating to the
Company's core business. See "Business--Intellectual Property--Licenses."

COMPETITION

General

The industrial lead-acid battery market is highly competitive and has
experienced substantial consolidation both among competitors who manufacture
and sell industrial batteries and among customers who purchase industrial
batteries. This factor has resulted in a decrease in the number of customers
for the Company's products and increased competitive pressure on the Company.
The Company's competitors range from development stage companies to major
domestic and international companies. Some of these companies have technical,
marketing, sales, manufacturing, distribution, and other resources
significantly greater than those of the Company. In addition, some of these
companies have significant name recognition, established positions in the
market, and long-standing relationships with OEMs and other customers.

In addition, certain of the Company's competitors own lead smelting
facilities and may therefore, during sustained periods of substantial lead
cost increases, have a competitive advantage over the Company.

The Company's competitors are primarily domestic manufacturers, although
foreign competition could become a factor depending on changes in the relative
levels of domestic prices, duties, tariffs, freight costs, currency exchange
rates and the impact of changing technology. The Company competes primarily on
the basis of product quality, reliability of service and delivery and price.
The Company believes that its products and services are competitively priced
and its reputation for quality products and service help maintain its
competitive position in the industry, although there can be no assurance that
continued consolidation and continuing competition will not have an adverse
effect on the Company in the future.

36
<PAGE>

larger and have greater financial resources than the Company. Exide presently
derives a substantial portion of its revenues from sales of industrial
batteries in Europe and its existing agreement not to compete with the Company
expires in June 2001. Accordingly, Exide could become a competitor of the
Company in the Americas and elsewhere in the future. Although Yuasa Japan has
historically viewed the Company as the operation through which Yuasa Japan
markets its products in the United States and elsewhere in the Americas and
although there are agreements currently in force which would prevent Yuasa
Japan from competing with the Company in the Americas until such time as Yuasa
Japan ceases to own shares of the Company's capital stock possessing at least
20% of the voting power of all classes of capital stock of the Company, if
Yuasa Japan were to divest itself of its interest in the Company below these
levels in the future, it could become a competitor of the Company. See "Risk
Factors--Relationship with Principal Stockholder," "--Competition; Industry
Consolidated Pricing Pressures," and "Related Party Transactions."

Stationary and Other Products

The stationary battery market in the Americas is highly competitive and is
dominated by the Company, C&D Technologies, Inc. ("C&D"), and GNB Technologies
("GNB"). Competition in the stationary products market is based to a great
extent on reputation, product quality and reliability, and price, as well as
the availability of after-sale service.

Motive Power Products

Price is an important competitive factor in the motive power market.
Product offerings, product quality and reliability and service capability also
are important factors. The motive power market in the Americas is dominated by
four manufacturers: the Company, C&D, East Penn Manufacturing Co., and GNB.
The Company believes that it is the leader in the motive power market.

RAW MATERIALS

The principal raw materials used in the manufacture of the Company's
products are lead, plastics, steel, copper, separators and sulfuric acid. The
principal raw material used by the Company is lead. In fiscal 1998, the
Company consumed approximately 151.5 million pounds of lead, which cost
approximately $47.0 million and represented approximately 30% of the Company's
raw material purchases.

The Company buys its lead from a number of leading suppliers. Lead is a
commodity product. It is traded on the world's commodity markets and its
prices fluctuate on a daily basis. Its cost is therefore subject to rapid
fluctuations. To mitigate the adverse effects of these fluctuations, from time
to time the Company makes forward purchases of lead, generally not exceeding
50% of its projected lead requirements for periods generally of up to one year
from its lead suppliers.

Other significant materials required in the Company's production processes
include steel, plastic products, and separators, substantially all of which
are manufactured by third parties. See "Risk Factors--Materials and
Manufacturing Costs."

INTELLECTUAL PROPERTY

General

There are no patents which the Company considers to be material to the
Company's business. Although the Company applies for patents on new inventions
and designs, from time to time, the Company believes that the growth of its
business will depend primarily upon the quality of its products and its
relationships with its customers, rather than the extent of its patent
protection.

The Company owns or possesses licenses and other rights to use a number of
trademarks in conjunction with its business. The Company has registered many
of these trademarks in various styles in the United States

37
<PAGE>

Patent and Trademark Office, Canada and other countries. The Company believes
many such rights and licenses are important to its business. Some of the
significant trademarks owned by the Company include: "HUP," "Loadhog,"
"Superhog," "Cobra," and "Dynacell."

Licenses

In connection with the Company's acquisition of Exide's industrial battery
division in 1991, Exide provided perpetual, exclusive, world-wide, royalty-
free, licenses to the Company to use certain trademarks and patents in
connection with the industrial battery business and related products,
excluding golf cart batteries manufactured at the Company's Sumter S.C. plant
and automotive, motorcycle, garden, tractor and marine engine starting
batteries and related products. The licensed trademarks include "GBC," "ESB,"
"Exide," "Willard," "Hybernator," "Ironclad-Exide," "Liberator," "Oasis," and
"Titan," among others. The Company views many of these as of substantial value
in the marketing of its products. The licensed patents include technology
relating to a variety of designs and manufacturing processes. The Company also
licensed certain of such patents back to Exide simultaneously. Although these
licenses are perpetual, they could be revoked by Exide if the Company's
products using the licensed trademarks fail to meet certain quality standards,
or if the Company assigns the trademarks outside the scope of the industrial
battery business, and the Company fails to begin to cure those circumstances
within 90 days of notice from Exide, or if the Company becomes bankrupt.

The Company is a party to the Yuasa License and Technology Agreement,
pursuant to which the Company has the exclusive (subject to limited
exceptions) right to manufacture and sell certain types of products in a
territory comprising all of the Americas, using patents, processes, technical
know-how and other intellectual property of Yuasa Japan, and to manufacture
and sell any derivative products, improvements and developments. In addition,
the Company is granted the right to purchase the technical know-how for
certain new products developed by Yuasa Japan, on such terms as the Company
and Yuasa Japan may agree from time to time. The Yuasa License and Technology
Agreement also gives the Company the exclusive (subject to limited exceptions)
right to use the name and trademark "Yuasa" and certain related trademarks,
logos and trade dress in connection with the sale of such products in the
Americas. In consideration of these rights, the Company pays royalties to
Yuasa Japan. The Yuasa License and Technology Agreement also provides Yuasa
Japan with a cross-license to manufacture and sell batteries and related
products which use technology developed or acquired by the Company after the
date of the agreement (to the extent such grant would not violate third
parties' rights), on financial terms to be negotiated before Yuasa Japan
begins to manufacture or sell them. This right applies in Japan (on an
exclusive basis) and elsewhere outside the Americas (on a non-exclusive
basis), and embodies the practices that the Company and Yuasa Japan have
historically followed. The Yuasa License and Technology Agreement does not
restrict Yuasa Japan's ability to sell any products outside the Americas which
do not use technology belonging to the Company.

The Yuasa License and Technology Agreement could be terminated by Yuasa
Japan on certain defaults by the Company, such as failure to pay royalties or
insolvency of the Company, and will terminate automatically on the third
anniversary of the first date on which Yuasa Japan and its affiliates cease to
own shares of Common Stock of the Company possessing the right to cast at
least 20% of the total votes entitled to be cast by holders of all Common
Stock of all classes. Following any such termination or revocation, however,
the Company's rights thereunder with respect to trademarks would survive for
three years, and with respect to patents and technical know-how would survive
for five years.

The Company's agreements with Yuasa Japan also include the Yuasa
Noncompete, in which Yuasa Japan agrees not to sell (directly or through
certain controlled affiliates) substantially all types of products made and
sold by the Company throughout a territory comprising all of the Americas, for
a period ending on the third anniversary of the first date on which Yuasa
Japan and its affiliates cease to own shares of Common Stock of the Company
possessing the right to cast at least 20% of the total votes entitled to be
cast by holders of all Common Stock of all classes. Unlike the Yuasa License
and Technology Agreement, however, the Yuasa Noncompete Agreement is not, by
its terms, subject to earlier revocation or termination.

38
<PAGE>

Royalty payments by the Company to Yuasa Japan under the Yuasa License and
Technology Agreement and other arrangements in effect during prior periods
amounted to $1.6 million for fiscal 1998, $1.4 million for fiscal 1997, and
$1.2 million for fiscal 1996. The royalties under the Yuasa License and
Technology Agreement are payable at substantially similar rates. See "Related
Party Transactions--Yuasa Japan."

EMPLOYEES

At March 31, 1998, the Company had approximately 2,707 employees. Of these
employees, approximately 1,970 were employed in manufacturing (with 499 being
covered by collective bargaining agreements), 380 were employed in sales and
marketing (including branch operations), 251 were employed in service and
installation and 106 were employed in engineering, finance and administrative
activities.

The Company's management considers its employee relations to be good.
Historically, there has been no material labor unrest, disruption of
production or strike by the Company's employees. Employees at the Company's
Laureldale, Pennsylvania, Hays, Kansas, Richmond, Kentucky and Dallas, Texas
plants are not represented by unions. Employees at the Company's Cleveland,
Ohio and Sumter, South Carolina plants are represented by labor unions under
collective bargaining agreements which expire in January, 2001 and April,
2001, respectively.

ENVIRONMENTAL REGULATION

The Company is subject to numerous federal, state and local laws and
regulations designed to protect the environment and employee health and
safety, including those pertaining to the storage, handling, treatment,
transportation and disposal of hazardous and toxic materials, practices and
procedures applicable to the construction and operation of the Company's
plants, and standards relating to the discharge of air, soil and water
pollutants. The Company believes that its operations currently are in
substantial compliance with applicable environmental, health and safety laws
and regulations. Such compliance has resulted in ongoing costs for the
Company, and the Company from time to time has had instances of alleged or
actual noncompliance that have resulted in the imposition of fines or
penalties. The Company is currently finalizing a settlement with the State of
South Carolina concerning certain alleged violations under the federal Clean
Air Act at its Sumter plant, pursuant to which the Company expects to pay a
civil penalty of $105,000. The Company does not anticipate having other future
obligations under such settlement agreement. The Company's continued
compliance with environmental, health and safety laws and regulations could
require the Company to incur significant expenses, including fines and
penalties, could restrict the Company's ability to modify or expand its
facilities or continue production, and could require the Company to install
pollution control equipment and make other capital improvements, such as
currently ongoing improvements to wastewater treatment systems at two plants.

Certain of the Company's manufacturing sites have a history of industrial
use. As is typical for such businesses, soil and groundwater contamination has
occurred in the past at some sites and might occur or be discovered at other
sites in the future. The Company from time to time investigates, remediates
and monitors soil and groundwater contamination at certain of these sites. In
addition, the Company has been named as a de minimis "Potentially Responsible
Party" at one National Priority List site pursuant to Superfund. The Company
has received an offer to settle the case from the EPA for $8,000, which the
Company intends to accept. Settlement with the EPA will provide relief from
joint and several liability and late claims for contribution from other
"PRPs." In the future, the Company may be liable pursuant to this law and
other similar laws to contribute to the cleanup of other locations, owned or
operated by other persons, to which the Company or its predecessors have sent
wastes for disposal. Under these laws the owner or operator of contaminated
properties and the generator of wastes sent to a contaminated disposal
facility can be jointly and severally liable for the cleanup of such
properties, regardless of fault.

39
<PAGE>

The Company attempts to reduce its potential liability associated with
environmental, health and safety laws and regulations by, among other
practices, recycling materials such as lead and acid in batteries and
purchasing lead from third parties rather than owning or operating lead
smelting facilities. In addition, substantially all of the Company's
industrial battery operations were acquired from Exide in a transaction
pursuant to which the Company acquired assets and did not contractually assume
environmental and related liabilities. These assets were acquired in 1991 and
there have not been any significant environmental claims made since that date.
In addition, the Company has established a program for environmental, health
and safety compliance, supervised by certain employees, under which Company
personnel design procedures for auditing practices subject to environmental,
health and safety laws and regulations, and monitor and communicate to other
Company employees regulatory activities and developments, including certain
standards for reducing lead exposure to employees promulgated under the
federal Occupational Safety and Health Act of 1970. Based on current
information, the Company does not expect compliance with environmental, health
and safety laws and regulations to have a material adverse effect on the
business or financial condition of the Company. However, there can be no
assurance that developments, such as increased requirements of such laws and
regulations, increasingly strict enforcement thereof by governmental
authorities, and claims for damages to property or injury to persons resulting
from the environmental, health or safety impacts of the Company's operations,
will not cause the Company to incur significant costs and liabilities that
could have such a material adverse effect. See "Risk Factors--Potential Costs
of Environmental Compliance."

LITIGATION

The Company is, from time to time, involved in routine litigation
incidental to the conduct of its business. In the opinion of management, none
of such litigation, individually or in the aggregate, could be expected to
have a material adverse effect on the financial condition, results of
operations or cash flows of the Company.

40
<PAGE>

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth certain information regarding the Company's
existing directors and executive officers. A summary of the background and
experience of each director and executive officer is set forth in the
paragraphs following the table.

<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Teruhisa Yuasa................... 62 Chairman of the Board
P. Michael Ehlerman.............. 59 Vice Chairman, Chief Executive Officer and
Director
John D. Craig.................... 47 President, Chief Operating Officer and
Director
Shuji Kawata..................... 60 Vice President--International and Director
Michael T. Philion............... 46 Vice President--Finance, Chief Financial
Officer and Assistant Secretary
Hiroshi Horiuchi................. 55 Vice President--Export, Secretary and
Director
Yasukazu Sakai................... 66 Director
Arthur M. Hawkins................ 55 Director
James Kanda...................... 58 Director
Raymond J. Kenny................. 71 Director
</TABLE>

TERUHISA YUASA has served as Chairman of the Board of the Company since
1991. Mr. Yuasa has served as Chairman of Yuasa Japan, a publicly-traded
Japanese manufacturer of a full line of lead acid automotive and industrial
batteries, since 1997 and as a director since 1970. Prior to his election as
Chairman, he served as President of Yuasa Japan. Mr. Yuasa is also President
and a director of Yuasa Trading Co., a publicly traded Japanese trading
company.

P. MICHAEL EHLERMAN has served as Vice Chairman and Chief Executive Officer
of the Company since April 1, 1998. Prior thereto, he served as President of
the Company and has been a director since 1991, when the Company acquired
Exide's industrial battery division. Prior to becoming President of the
Company, Mr. Ehlerman was employed by Exide and a predecessor, General Battery
Corporation, in various executive management positions. Mr. Ehlerman became a
director of Yuasa Japan in June, 1998.

JOHN D. CRAIG has served as President and Chief Operating Officer of the
Company since April 1, 1998. Prior thereto, he served as Executive Vice
President of the Company since 1995. He has been a director since 1996. Prior
thereto, Mr. Craig was Vice President--Operations of the Company since 1994
and Vice President--Operations of Nordyne, Inc., a manufacturer of heating and
air conditioning equipment.

SHUJI KAWATA has served as a director since 1991 and as Vice Chairman
between 1995 and March 31, 1998. Mr. Kawata has served as a director of Yuasa
Japan since 1991 and has been an employee of Yuasa Japan since 1960. Effective
April 1, 1998, he will retire as an employee of Yuasa Japan and become Vice
President--International and a full time employee of the Company.

MICHAEL T. PHILION has served as Vice President--Finance; Chief Financial
Officer and Assistant Secretary of the Company since 1994. Prior thereto, he
was employed as Chief Financial Officer of the Wood Company, a food service
management company. He was elected as Assistant Secretary in 1997 and has been
elected as Acting Secretary, effective April 1, 1998.

HIROSHI HORIUCHI has served as a director and as Vice President--Export of
the Company since 1995. Prior thereto, he served as Deputy General Manager--
International Division of Yuasa Japan since 1991. He has advised the Company
that he intends to resign as a director of the Company as soon as practicable
on completion of the Offering.

41
<PAGE>

YASUKAZU SAKAI has served as a director of the Company and as Vice Chairman
of the Company between 1991 and March 31, 1998. Mr. Sakai is Senior Managing
Director of Yuasa Japan and has been employed in various senior executive
positions since 1954 and has been a director of Yuasa Japan since 1986.

ARTHUR M. HAWKINS has served as a director of the Company since 1992. Mr.
Hawkins has served as Chairman, President, Chief Executive Officer and a
director of Exide Corporation, a publicly-traded U.S. manufacturer of a full
line of lead acid automotive and industrial batteries since 1985. He has
advised the Company that he intends to resign as a director of the Company as
soon as practicable on completion of the Offering.

JAMES KANDA has served as a director of the Company since 1991. Over the
past five years, he has served as a consultant to Yuasa Japan and a special
advisor to its Chairman and President.

RAYMOND J. KENNY has served on the Board of Directors of the Company since
1991. Prior to his retirement in 1993, he served as Vice President Operations
of the Company.

THE BOARD OF DIRECTORS

The Company's Board of Directors presently consists of nine members and is
divided into three classes: Class I directors, whose terms expire in 1999;
Class II directors whose terms expire in 2000; and Class III directors whose
terms expire in 2001. Each of the Company's directors is presently either (i)
an officer or director of, and was nominated and elected as a director by,
Yuasa Japan or Exide (see "Principal and Selling Stockholders"), or (ii) an
executive officer of the Company. Messrs. Yuasa, Ehlerman and Kanda have been
elected to serve as Class I directors until the 1999 annual meeting of
stockholders; Messrs. Kawata, Horiuchi and Kenny have been elected to serve as
Class II directors until the 2000 annual meeting of stockholders; and Messrs.
Sakai, Hawkins, and Craig have been elected to serve as Class III directors
until the 2001 annual meeting of stockholders. Each of Messrs. Horiuchi (Class
II), and Hawkins (Class III) has advised the Company that he intends to resign
as a director of the Company upon completion of the Offering. Upon such
resignation, the Board of the Company intends, as soon as practicable, to
elect three as yet unidentified independent directors who are not affiliated
with Yuasa Japan or the Company, one to sit as a Class I director, one to sit
as a Class II director and one to sit as a Class III director. See "Related
Party Transactions."

The Company's Bylaws provide that, among other things, (i) each class of
directors must consist, as nearly as possible, of one-third of the total
number of directors; (ii) one class must be elected each year to serve for a
term of three years, after a transitional period, or until earlier removal or
resignation; and (iii) sitting directors have the ability to fill vacancies
arising from resignations or from newly-created directorships for the balance
of the term of the class to which they are elected. The next annual meeting of
the stockholders of the Company to be held after the closing of the Offering
is scheduled for July, 1999. Executive officers are elected annually and hold
office until their successors are duly elected and qualified or until earlier
removal or resignation.

A Stockholders' Agreement dated as of April 1, 1992 (the "Stockholders'
Agreement") between the Company and Exide entitles Exide to designate one
person for election to the Board of Directors of the Company acceptable to
Yuasa Japan. Yuasa Japan has contractually obligated itself to determine that
Mr. Hawkins is acceptable to it and Exide historically has exercised its right
to name Mr. Hawkins as a director. On completion of the Offering and sale by
Exide of its Class B Common Stock, this obligation will terminate. The other
directors were selected, nominated and elected by Yuasa Japan. Following the
Offering, Yuasa Japan will own all of the issued and outstanding Class B
Common Stock representing approximately 76% of the combined voting power of
all shares of outstanding Common Stock and will be able to nominate and elect
all of the members of the Board. See "Related Party Transactions."

COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors of the Company has formed a new standing Audit
Committee and a new standing Compensation Committee, effective as of the
completion of the Offering and will appoint members to such committees on the
election of at least three independent directors.

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<PAGE>

Compensation Committee

The Compensation Committee will consist solely of non-employee directors,
and the Company's Chief Executive Officer as an ex officio member. The
Compensation Committee makes recommendations to the Board of Directors with
respect to compensation, including stock based compensation, of members of the
Company's executive staff.

Audit Committee

The Audit Committee will have general responsibility for supervision of
financial controls, as well as for accounting and audit activities of the
Company. The Audit Committee, a majority of which will consist of non-
management directors independent of Yuasa Japan, will annually review the
qualification of the Company's independent certified public accountants, make
recommendations to the board of directors as to their selection and review the
planning, fees and results of their audit.

DIRECTOR COMPENSATION

The members of the Board of Directors of the Company do not currently
receive compensation for services rendered as members of the Board of
Directors. After completion of the Offering, the Company will pay each
director, who is not an employee of the Company or an employee, officer or
representative of Yuasa Japan, a quarterly retainer of $5,000, plus $1,000 for
each Board meeting attended and $500 for each committee meeting attended.

Directors' and Officers' Insurance

The Company is in the process of obtaining a policy of directors' and
officers' liability insurance to cover all directors, officers and employees
of the Company and its subsidiaries for liability, loss, damage and expense
which they may incur in their capacities as such. The Company expects that
this policy will be in place prior to the completion of the Offering.

EXECUTIVE COMPENSATION

The following table sets forth all salary, bonus and other compensation
earned with respect to fiscal 1998 by the Company's Vice Chairman and Chief
Executive Officer and each of the four other most highly compensated executive
officers of the Company whose total annual salary and bonus exceeded $100,000
for services rendered in all capacities to the Company.

<TABLE>
<CAPTION>
Name and Annual Compensation
Principal Year Ended ------------------- All Other
Position March 31 Salary Bonus/(1)/ Compensation/(2)//(3)/
- --------- ---------- -------- ---------- ----------------------
<S> <C> <C> <C> <C>
P. Michael Ehlerman..... 1998 $283,133 $139,900 $7,500
Vice Chairman and CEO
John D. Craig........... 1998 $194,950 $ 93,300 $7,500
President and COO
Michael T. Philion...... 1998 $155,575 $ 43,300 $7,500
Vice President--Finance
and CFO
Nicholas I. Magnani..... 1998 $158,257 $ 38,500 $7,500
Vice President--
Engineering and R&D
John Shea............... 1998 $145,646 $ 51,000 $7,282
Vice President--Motive
Power
</TABLE>

43
<PAGE>

- --------
(1) Represents amounts paid under the Company's short-term Management
Incentive Plan in respect of fiscal 1998. The Company did not have any
long-term incentive payments during 1998.
(2) Amounts in this column represent the Company's annual retirement
contribution (generally, 4% of earnings on such employee's Form W-2) and
matching contributions under the Company's 401(k) Plan for the years
indicated. See "Salaried Retirement and 401(k) Plan."
(3) Compensation in the form of perquisites and other personal benefits has
been omitted because such perquisites and other personal benefits
constituted less than the lesser of $50,000 or 10% of each named executive
officer's total annual salary and bonus.
(4) Effective as of April 1, 1998, the Company commenced paying Teruhisa Yuasa
$275,000 a year in his capacity as an officer of the Company.

MANAGEMENT INCENTIVE PLANS

The purpose of the Company's Management Incentive Plan (the "Short Term
Plan") is to provide short-term incentive to key officers and employees of the
Company for meeting and exceeding certain established financial performance
goals. Participation in the Short Term Plan is limited to a maximum incentive
reward as a percent of base salary earnings determined for each eligible
participant. Each participant is measured on a combination of Company and
personal objectives with the exception of participants who are employed in
certain of the Company's manufacturing facilities, whose incentive award is
based upon one hundred percent of facility objectives. Incentive awards are
payable in a lump sum early in the next fiscal year immediately following the
determination of the eligibility to receive an incentive award. The
eligibility of a participant who is discharged or resigns during a plan year
will be automatically canceled. In the case of termination due to death or
retirement, or if a participant becomes eligible to participate during the
plan year (which requires a minimum of six months of service in the applicable
incentive year), the participant or his or her estate will be eligible for a
reduced incentive reward. For purposes of determining an incentive award, base
salary is defined as W-2 salary earnings exclusive of any payments under the
Short Term Plan and any non-reoccurring adjustments to salary.

During fiscal 1997, the Company adopted the Long Term Incentive Plan (the
"Long Term Plan"). The purpose of this plan is to attract, motivate and retain
key executives of the Company. The Long Term Plan is structured in three-year
cycles with a new cycle beginning each year. The first cycle begins in fiscal
1998 and runs through the end of fiscal 2000. For fiscal 1998, twelve
executives were named by the Board to participate. Participation is
established annually for each new performance cycle. An executive who
voluntarily terminates employment with the Company (other than for retirement)
is not entitled to receive a payment for an uncompleted cycle. The Board
establishes financial targets for the Long Term Plan at the beginning of each
cycle. For the fiscal 1998-2000 cycle, the Board set the target at the three-
year average of return on average capital employed by the Company. In addition
to the target, the Board sets performance points below and above which no
payment will be made. Awards are capped at a percentage of base pay which
varies with financial performance. Earned awards are paid after each completed
cycle. The Board has reserved the right to adjust financial targets for
divestures or acquisitions which have a material impact on performance
factors. If a change in control of the Company occurs, and the Long Term Plan
is terminated or substantially changed, all uncompleted cycles vest. Absent a
change in control, no amounts will be paid under the Long Term Plan until
after completion of the first cycle at the end of fiscal 2000. The Offering
does not result in a change in control within the meaning of this plan.

Salaried Retirement and 401(k) Plan

The Company maintains the Salaried Retirement and 401(k) Plan (the "Savings
Plan") for the benefit of its salaried employees. The Savings Plan is a
defined contribution plan and is qualified under Sections 401(a) and 401(k) of
the Internal Revenue Code of 1986, as amended (the "Code"). Salaried employees
are eligible to participate in the Savings Plan after the completion of six-
months of service. The Company is required, under the terms of the Savings
Plan, to make a retirement contribution on behalf of each eligible employee in
an amount equal to four percent of such employees compensation as defined in
the Savings Plan. The Savings Plan permits participants to elect to
contribute, pursuant to salary reduction, up to 15% of such participant's
Compensation (as defined in the Savings Plan) on a pre-tax basis. The Company
is required to match at least twenty-five percent of the first four percent of
compensation contributed by the participant.

44
<PAGE>

Omnibus Stock Plan

The Company's Board and shareholders have approved the Omnibus Stock Plan
effective March 9, 1998. The purpose of the Omnibus Stock Plan is to provide
additional incentives to employees of the Company by facilitating their
purchase of stock in the Company. The Omnibus Stock Plan will have a term of
ten years from the date of its adoption (unless the plan is earlier terminated
by the Board of Directors of the Company) after which no awards may be made.
Pursuant to the Omnibus Stock Plan, 602,540 shares of Class A Common Stock
(equal to 5% of the estimated number of shares of the Company's Common Stock
outstanding upon completion of the Offering), will be reserved for future
issuance by the Company, in the form of newly-issued or treasury shares, upon
exercise of stock options ("Options") or stock appreciation rights ("SARs").
Options and SARs are collectively referred to herein as "Awards." If Awards
should expire, become unexercisable or be forfeited for any reason without
having been exercised or without becoming vested in full, the shares of Class
A Common Stock subject to such Awards will, unless the Omnibus Stock Plan
shall have been terminated, be available for the grant of additional Awards
under the Omnibus Stock Plan. Approximately twenty individuals are eligible to
participate in the Omnibus Stock Plan.

The Omnibus Stock Plan will, after April 1, 1998, be administered by the
Compensation Committee. The Compensation Committee selects the employees to
whom Awards are to be granted, the number of shares to be subject to such
Awards, and the terms and conditions of such Awards (provided that any
discretion exercised by the Compensation Committee must be consistent with the
terms of the Omnibus Stock Plan).

The Company intends Options granted under the Omnibus Stock Plan to
constitute both (i) incentive stock options (options that afford favorable tax
treatment to recipients upon compliance with certain restrictions pursuant to
Section 422 of the Code, and that do not result in tax deductions to the
Company unless participants fail to comply with Section 422 of the Code)
("ISOs") and (ii) Options that do not so qualify ("NQSOs"). The exercise price
for Options will be, in the case of an ISO, the fair market value of the
Common Stock on the day of grant and in the case of an NQSO, the option price
will be determined by the Compensation Committee on the day of grant. The
Omnibus Stock Plan permits the Compensation Committee to impose exercise and
transfer restrictions on the Common Stock that optionees may purchase. It is
possible that the Compensation Committee will impose such restrictions on
shares subject to options granted on or after the Omnibus Stock Plan's
effective date. No Option shall be exercisable after the expiration of ten
years from the date it is granted; provided, however, that in the case of any
employee who owns more than 10% of the outstanding Common Stock at the time an
ISO is granted, the option price for the ISO shall not be less than 110% of
the price at which the Common Stock is sold in the Offering, and the ISO shall
not be exercisable after the expiration of five years from the date it is
granted. An otherwise unexpired Option, unless otherwise determined by the
Compensation Committee, shall cease to be exercisable upon (i) an employee's
termination of employment for "cause" (as defined in the Omnibus Stock Plan),
(ii) the date six months after termination of service due to retirement, (iii)
the date three months after an employee terminates service for a reason other
than just cause, death, or disability, (iv) the date an employee terminates
service due to disability (except as to "vested" options), or (v) the date two
years after termination of such service due to the employee's death.

A SAR may be granted in tandem with all or any part of any Option or
without any relationship to any Option. Whether or not a SAR is granted in
tandem with an Option, exercise of the SAR will entitle the optionee to
receive, as the Compensation Committee prescribes in the grant, all or a
percentage of the excess of the then fair market value of the shares of Common
Stock subject to the SAR at the time of its exercise, over the aggregate
exercise price of the shares subject to the SAR. Payment to the optionee may
be made in cash or shares of Class A Common Stock, as determined by the
Compensation Committee.

The Company will receive no monetary consideration for the granting of
Awards under the Omnibus Stock Plan, and will receive no monetary
consideration other than the Option exercise price for each share issued to
optionees upon the exercise of Options. The Option exercise price may be paid
in cash or Common Stock. The exercise of Options and SARs will be subject to
such terms and conditions established by the Compensation Committee as are set
forth in a written agreement between the Compensation Committee and the
optionee (to be

45
<PAGE>

entered into at the time an Award is granted). In the event that the fair
market value per share of the Common Stock falls below the option price of
previously granted Options or SARs, the Compensation Committee will have the
authority, with the consent of the optionee, to cancel outstanding Options or
SARs and to reissue new Options or SARs at the then current fair market price
per share of the Common Stock.

Although directors and officers of the Company generally would be
prohibited under the federal securities laws from profiting from certain
purchases and sales (or sales and purchases) of shares of Common Stock within
any six-month period, they generally will not be prohibited by such laws from
exercising options and immediately selling the shares they receive. As a
result, the Company's directors and officers generally will be permitted to
benefit in the event the market price for the shares exceeds the exercise
price of their Options, without being subject to loss in the event the market
price falls below the exercise price.

Notwithstanding the provisions of any Award that provides for its exercise
or vesting in installments, all Awards shall become fully vested upon a
"change in control" (as defined in the Omnibus Stock Plan) and, for a period
of 60 days beginning on the date of such change in control, all Options and
SARs shall be fully vested and immediately exercisable. In the event of a
change in control, the Compensation Committee may permit the holders of
exercisable Options to surrender their Options in exchange for cash in an
amount equal to the excess of the fair market value of the Common Stock
subject to the Options over their exercise price. Unless otherwise permitted
by an Award agreement and in accordance with applicable law, no Award is
assignable or transferable except by will or the laws of descent and
distribution, or pursuant to the terms of a "qualified domestic relations
order" (within the meaning of Section 414(p) of the Code and the regulations
and rulings thereunder).

Grant of Stock Options

The Compensation Committee, when formed, intends to grant, conditioned upon
the successful completion of the Offering, nonqualified stock options under
the Omnibus Stock Plan to certain executive officers of the Company identified
below to purchase shares of the Company's Class A Common Stock at the public
offering price set forth on the cover page of this Prospectus. The options
granted will become exercisable to the extent of 40% of the options granted on
the second anniversary of the date of grant, with an additional 20% of the
options granted becoming exercisable on the third, fourth, and fifth
anniversaries of the date of grant. The options will expire ten years after
the date of grant, subject to earlier termination in accordance with the
provisions of the Omnibus Stock Plan. The options are not assignable or
otherwise transferable, except by will or the laws of descent and
distribution. During fiscal 1998 and the first quarter of fiscal 1999, the
Company issued options under the Omnibus Stock Plan to acquire 589,000 shares
of Class A Common Stock at an exercise price equal to the public offering
price set forth on the cover page of this Prospectus to 17 officers and
employees of the Company, including the following executive officers:

<TABLE>
<CAPTION>
Number of Shares
Name Expiration Date Subject to Option Type of Option
---- --------------- ----------------- -------------------------
<S> <C> <C> <C>
P. Michael Ehlerman..... March 31, 2008 186,000 Nonqualified Stock Option
John D. Craig........... March 31, 2008 124,000 Nonqualified Stock Option
Michael T. Philion...... March 31, 2008 62,000 Nonqualified Stock Option
Nicholas I. Magnani..... March 31, 2008 24,800 Nonqualified Stock Option
John A. Shea............ March 31, 2008 24,800 Nonqualified Stock Option
</TABLE>

The number of shares reserved for issuance under the plan and the number of
shares subject to options will be adjusted to the extent that the number of
shares reserved for issuance are less than or exceed 5% of the shares of the
Company's Common Stock outstanding upon completion of the Offering.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Company did not have a Compensation Committee during fiscal 1997 and
compensation decisions during fiscal 1997 were made, with respect to the
President, by the Company's Board of Directors and with respect to other
Company officers, by the President. The Board of Directors voted to establish
a Compensation Committee, effective April 1, 1998.

46
<PAGE>

RELATED PARTY TRANSACTIONS

ONGOING TRANSACTIONS WITH EXIDE

General

On June 10, 1991, the Company acquired the assets of the industrial battery
division, including certain trademarks of Exide, together with a related
covenant not to compete, for approximately $120 million. As part of this
purchase, Exide and the Company entered into a number of agreements which are
still in effect. The following description constitutes a summary of certain of
these agreements and other agreements entered into with Exide after June 10,
1991. The following description is subject to and is qualified in its entirety
by reference to the agreements, copies of which have been filed as exhibits to
the Registration Statement of which this Prospectus is a part. Except for the
Stockholders' Agreement, which will terminate on completion of the Offering,
these agreements will not be affected by the Offering or the sale by Exide of
its shares of the Company's stock. See "Principal and Selling Stockholders."

Agreement Not to Compete

Exide and the Company are parties to an Agreement Not to Compete dated June
10, 1991 (the "Exide Agreement Not to Compete"). Pursuant to this agreement,
Exide agreed not to compete in the industrial battery business in North and
South America and in over 160 other countries, including certain European
countries. The businesses in which Exide may not compete include the
manufacturing and sale of batteries for all industrial uses, including
electrical vehicle batteries and battery products (other than golf cart
batteries formerly manufactured at the Company's Sumter, South Carolina plant,
and also excluding automotive, motorcycle, garden tractor and marine engine
starting batteries). Since June 1991, Exide has acquired certain European
battery manufacturers who own and operate industrial battery operations. The
Company waived compliance of the Exide Agreement Not to Compete as they
related to Europe in order to permit Exide to acquire these European
operations, in exchange for a right of first refusal to acquire those
operations if Exide elects to sell them. Exide's obligations under the Exide
Agreement Not to Compete expire in June, 2001, at which time Exide will be
free of its obligation not to compete with the Company.

Trademark and Patent Licensing Agreements

Exide has granted the Company licenses to use Exide's name and certain
trademarks and patents in connection with various products manufactured by the
Company. See "Business--Intellectual Property--Licenses."

Other Transactions with Exide

The Company engages in other transactions with Exide in the ordinary course
of its business. The Company believes that those transactions are on terms and
conditions which are no less favorable than those available from unrelated
parties.

Lead. During fiscal 1996, 1997 and 1998, respectively, the Company
purchased approximately 16.2 million, 5.4 million, and 6.0 million pounds of
lead from Exide, at prevailing market prices. These purchases amounted to
approximately $9.5 million, $1.8 million, and $1.9 million, respectively, and
accounted for 19.1%, 3.8%, and 4.1%, respectively, of the Company's lead
purchases during fiscal 1996, 1997 and 1998.

Utilities. The Company has agreements with Exide for the supply of
electricity, gas and waste water treatment services to the Company's
Laureldale, Pennsylvania small starting engine battery facility. These
services had a total cost of $1.3 million, $1.4 million and $1.2 million in
fiscal 1996, 1997 and 1998, respectively. The Company is free to obtain these
utility services from other sources if it so chooses, and any of these
services provided by Exide could be terminated by the Company on 90 days
notice. Absent breach by the Company, however, the services cannot be
terminated by Exide without substantially greater advance notice,

47
<PAGE>

during which time the Company could make other arrangements for the same
services without disruption of its operations or material cost.

Other Sales and Purchases. The Company supplies Exide with motorcycle
batteries. In fiscal 1996 and 1997, the Company also supplied Exide with EV
batteries (used in golf cart applications) built to Exide's specifications.
Total sales to Exide during fiscal 1996, 1997 and 1998 amounted to
approximately $20.0 million, $4.6 million and $3.8 million, respectively.

Total purchases of lead, certain other battery components and other goods
and services from Exide amounted to approximately $10.8 million, $6.9 million
and $4.4 million for fiscal 1996, 1997 and 1998, respectively.

Stockholders' Agreement. The Stockholders' Agreement between the Company
and Exide, as presently in effect, contains various rights and obligations
with respect to the Class B Common Stock owned by Yuasa Japan and Exide, but
will terminate when Exide sells its Common Stock in the Offering.

Dividend. On March 9, 1998 the Company's Board of Directors declared a
special dividend, which was paid in May 1998. The dividend was in the
aggregate amount of $2.3 million, of which 13.5% was paid to Exide.

YUASA JAPAN

Yuasa License and Technology Agreement. Yuasa Japan has entered into the
Yuasa License and Technology Agreement with the Company, which gives the
Company, among other things, exclusive (subject to limited exceptions)
licenses to use certain patents and technology of Yuasa Japan, manufacturing
rights with regard to certain types of batteries, technical assistance and
support, future improvements and innovations related to the products and their
manufacture, the right to purchase certain other technical know-how and a
license to use the name "Yuasa" and related trademarks. In consideration of
these rights, the Company pays royalties to Yuasa Japan, which, together with
payments under similar arrangements in effect for prior periods, amounted to
$1.6 million for fiscal 1998, $1.5 million for fiscal 1997, and $1.1 million
for fiscal 1996. See "Business--Intellectual Property--Licenses."

The Yuasa License and Technology Agreement can be terminated by Yuasa Japan
on certain defaults by the Company, such as failure to pay royalties or
insolvency of the Company, and will expire automatically on the third
anniversary of the first date on which Yuasa Japan and its affiliates cease to
own shares of Common Stock of the Company possessing the right to cast at
least 20% of the total votes entitled to be cast by holders of all Common
Stock of all classes. Following any such termination or revocation, however,
the Company's rights thereunder with respect to trademarks would survive for
three years, and with respect to patents and technical know-how would survive
for five years.

The Company's agreements with Yuasa Japan also include the Yuasa
Noncompete, in which Yuasa Japan agrees not to sell (directly or through
certain controlled affiliates) substantially all types of products made and
sold by the Company, throughout a territory comprising all of the Americas,
for a period ending on the third anniversary of the first date on which Yuasa
Japan and its affiliates cease to own shares of Common Stock of the Company
possessing the right to cast at least 20% of the total votes entitled to be
cast by holders of all Common Stock of all classes. Unlike the Yuasa License
and Technology Agreement, however, the Yuasa Noncompete is not by its terms
subject to earlier revocation or termination.

The termination, revocation or expiration of the Yuasa License and
Technology Agreement or the Yuasa Noncompete, as applicable, could have a
material adverse effect on the Company's business, financial condition and
results of operations. See "Risk Factors--Relationship with Principal
Stockholder" and "--Competition; Industry Consolidation; Pricing Pressures."

Through March 31, 1998, the Company made payments to Yuasa Japan of
approximately $250,000 per year, for travel and other expenses incurred by
Yuasa Japan in connection with providing technical and

48
<PAGE>

management assistance to the Company and attendance by its executives and
other personnel at meetings of directors and management, and visits to the
Company's facilities. These payments terminated as of April 1, 1998. See
"Principal and Selling Stockholders."

During fiscal 1996, 1997, and 1998 the Company purchased approximately
$20.6 million, $15.0 million, and $11.6 million, respectively, of finished
batteries, parts and accessories from Yuasa Japan and its affiliates. During
fiscal 1996, 1997, and 1998, the Company sold approximately $10.0 million,
$6.0 million, and $7.8 million, respectively, of finished batteries to Yuasa
Japan and its affiliates.

Dividend. On March 9, 1998 the Company's Board of Directors declared a
special dividend which was paid in May, 1998. The dividend was in the
aggregate amount of $2.3 million, of which 86.5% was paid to Yuasa Japan.

In March, 1998, the Company entered into a revolving credit facility for up
to $5 million with Yuasa Japan. Under this facility, Yuasa Japan may borrow,
repay and reborrow from the Company at any time until March 30, 1999. At June
28, 1998, the entire $5 million was outstanding under this facility. This
facility is unsecured, matures in its entirety on March 31, 1999, and bears
interest at short-term rates as described in Note 7 of the Notes to the
Consolidated Financial Statements for the period ending June 28, 1998.

FUTURE RELATED PARTY TRANSACTIONS

The Company has adopted a policy, effective as of the date of the closing
of the Offering, requiring that all material transactions (including
amendments, modifications or extensions of existing transactions) between the
Company and its executive officers, directors and affiliates (including Yuasa
Japan) be approved in advance by both (i) a majority of the members of the
Company's Board of Directors, and (ii) a majority of the independent members
of the Company's Board of Directors. See "Risk Factors--Relationship with
Principal Stockholder."

49
<PAGE>

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of the date of this Prospectus, and as
adjusted to reflect the issuance and sale by the Company of 3,300,000 shares
of Class A Common Stock in the Offering, for each person who is known to the
Company to own beneficially more than 5% of the Common Stock.

<TABLE>
<CAPTION>
Common Common
Shares Beneficially Number of Shares Beneficially Number of
Owned Prior Votes Entitled Owned After Votes Entitled
to Offering/(1)/ to be Cast Offering/(1)//(2)/ to be Cast
---------------------- ------------------ ---------------------- ------------------
Name Number Percent/(3)/ Number Percent Number Percent/(3)/ Number Percent
- ---- --------- ------------ ---------- ------- --------- ------------ ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Yuasa 7,000,000 86.5% 14,000,000 86.5% 7,000,000 61% 14,000,000 76%
Corporation/(4)//(5)/..
NT Building, 47-1, OH-I
1-Chome, Shinagawa-ku
Tokyo 140 Japan
Exide Corporation/(4)/.. 1,092,000 13.5% 2,184,000 13.5% -- -- -- --
1400 North Woodward
Avenue Suite 130
Bloomfield Hills, MI
48304
</TABLE>
- --------
(1) As of the date of the Prospectus, no director or executive officer of the
Company beneficially owns any shares of Common Stock or options to
purchase shares of Common Stock exercisable within 60 days of the date of
this Prospectus. The shareholders named in the table have sole voting and
investment power with respect to all shares indicated.
(2) Yuasa Japan and Exide have agreed not to purchase additional shares of
Common Stock in the Offering.
(3) Applicable percentage of ownership is based on 8,092,000 shares of Class B
Common Stock outstanding on the date of this Prospectus and a total of
11,392,000 shares of Class A Common Stock and Class B Common Stock
outstanding after the completion of the Offering and assumes no exercise
of the Underwriters' over-allotment option. Excludes options to acquire
589,000 shares of Class A Common Stock granted under the Company's Omnibus
Stock Plan which by their terms, are not exercisable until March 2000. The
7,000,000 Class B shares owned by Yuasa Japan after the Offerings
represent approximately 76% of the combined voting power of all shares of
Common Stock outstanding.
(4) See "Related Party Transactions" for additional information relating to
the Company's relationships with Yuasa Japan and with Exide.
(5) Yuasa Japan is a Japanese public company. As of March 31, 1998, there were
no holders of 5% or more of its common stock, except Yuasa Trading Co.,
Ltd. (7.1%), Mitsui Mutual Life Insurance, Co. (6.3%), and The Mitsui
Trust and Banking Co., Ltd. (5.4%), each of which is a Japanese publicly
held company.

50
<PAGE>

DESCRIPTION OF CAPITAL STOCK

The following description is a summary and is subject to and qualified in
its entirety by reference to the provisions of the Company's Articles of
Incorporation and Bylaws, copies of which have been filed as an exhibit to the
Registration Statement of which this Prospectus is a part and to the
applicable provisions of the Pennsylvania Business Corporation Law of 1988, as
amended (the "PBCL").

CLASS A COMMON STOCK AND CLASS B COMMON STOCK

The Company possesses the authority, under its Articles of Incorporation,
to issue up to 100 million shares of Class A Common Stock, par value $.01 per
share, and up to 100 million shares of Class B Common Stock, par value $.01
per share. Shares of Class A Common Stock and shares of Class B Common Stock
carry the same rights, powers, preferences, privileges and limitations, except
that Class A Common Stock has one vote per share on all matters while Class B
Common Stock has two votes per share on all matters. Prior to the Offering,
there were 8,092,000 shares of Class B Common Stock outstanding, of which
1,092,000 were held of record by Exide, and 7,000,000 were held of record by
Yuasa Japan.

After giving effect to the Offering (including the sale of its interest by
Exide) the Class B Common Shares held by Yuasa Japan will represent
approximately 61% of the shares of Common Stock of the Company outstanding and
approximately 76% of the combined voting power of all Common Stock outstanding
upon completion of the offering. See "Principal and Selling Stockholders."

Holders of Common Stock on completion of the Offering do not possess
preemptive rights or rights to subscribe for additional securities of the
Company.

Shares of Class B Common Stock will automatically become shares of Class A
Common Stock upon any sale or transfer of such Class B Common Stock by Yuasa
Japan or by Exide Corporation to any person or entity other than an affiliate
of Yuasa Japan. In addition, shares of Class A Common Stock acquired by Yuasa
Japan or any other person in the open market in negotiated transactions or
from the Company will retain their status as such and will not convert to
Class B shares. See "--Conversion."

VOTING RIGHTS--COMMON STOCK

Holders of Class A Common Stock are entitled to one vote per share on all
matters. Holders of Class B Common Stock are entitled to two votes per share
on all matters. Except as otherwise required by law, the holders of both Class
A Common Stock and Class B Common Stock will vote together as a single class
on all matters presented to the stockholders for their vote or approval.
Shareholders are not entitled to cumulate their votes for the election of
directors.

Because of the disproportionate voting rights of the Class B Common Stock,
Yuasa Japan will be able to control the outcome of matters submitted to a vote
of the Company's stockholders, including the election of directors, even when
the number of outstanding shares of Class B Common Stock which it owns is less
than a majority of the number of shares of all classes of Common Stock then
outstanding. Only if and when the number of outstanding shares of Class B
Common Stock represents less than 33.4% of the number of shares of all classes
of Common Stock then outstanding would the holders of Class A Common Stock be
able to cast more votes than Yuasa Japan. See "Risk Factors--Relationship with
Principal Stockholder."

DIVIDENDS

Holders of Class A Common Stock and Class B Common Stock are entitled to
receive dividends at the same rate on a per share basis if, as and when such
dividends are declared by the Board of Directors of the Company out of assets
or funds available therefor, subject to standard limitations on dividends
under state law. In the case of a dividend or other distribution payable in
shares of a class of Common Stock, including distributions pursuant to stock
splits or divisions of Common Stock, only shares of Class A Common Stock may

51
<PAGE>

be distributed with respect to Class A Common Stock and only shares of Class B
Common Stock may be distributed with respect to Class B Common Stock. The
number of shares of each class of Common Stock so distributed shall be equal
in number on a per share basis.

CONVERSION

Class A Common Stock has no conversion rights. Shares of Class B Common
Stock are convertible into Class A Common Stock, in whole or in part, at any
time and from time to time at the option of the holder, on the basis of one
share of Class A Common Stock for each share of Class B Common Stock
converted. Each share of Class B Common Stock will automatically convert into
one share of Class A Common Stock when the holder sells, exchanges or
otherwise transfers such Class B shares to any person other than an affiliate
of such holder. A bona fide pledge of shares of Class B Common Stock would not
constitute a transfer of such stock for purposes of this provision.

The Company has agreed to (i) at all times reserve and keep available, out
of its authorized but unissued shares of Class A Common Stock, such number of
shares of Class A Common Stock issuable upon the conversion of all outstanding
shares of Class B Common Stock, (ii) cause any share of Class A Common Stock
issuable upon conversion of a share of Class B Common Stock that requires
registration with or approval of any governmental authority under federal or
state law before such shares may be issued upon conversion to be so registered
or approved and (iii) use its best efforts to list the shares of Class A
Common Stock required to be delivered upon conversion prior to such delivery
upon such national securities exchange upon which the outstanding Class A
Common Stock is listed at the time of such delivery.

RESTRICTIONS ON TRANSFER OF CLASS B COMMON STOCK

Upon sale, exchange or other transfer of Class B Common Stock by Yuasa
Japan to an entity not affiliated with the transferor, those shares of Class B
Common Stock automatically become shares of Class A Common Stock.
Notwithstanding the foregoing (i) Yuasa Japan may pledge shares of Class B
Common Stock to a financial institution pursuant to a bona fide pledge of such
shares as collateral security for indebtedness, provided that (i) such shares
remain subject to the transfer restrictions set forth above and (ii) Yuasa
Japan retains the sole and exclusive right to vote such pledged shares.

RECLASSIFICATION, MERGER AND DISSOLUTION

In the event the Company enters into any consolidation, merger, combination
or other transaction in which shares of Common Stock are exchanged for or
changed into other stock or securities, cash or any other property, the shares
of Class A Common Stock and Class B Common Stock, treated as a single class,
will be exchanged for or changed into the same amount of stock, securities,
cash or any other property, as the case may be, into which or for which each
share of any other class of Common Stock is exchanged or changed. In the event
of any dissolution, liquidation or winding up of the affairs of the Company,
after payment of the debts and other liabilities of the Company, the remaining
assets of the Company will be distributable ratably among the holders of the
Class A Common Stock and Class B Common Stock treated as a single class. None
of the Class A Common Stock or Class B Common Stock may be reclassified,
subdivided or combined in any manner unless the other class is simultaneously
reclassified, subdivided or combined in the same proportion. The holders of
the Class A Common Stock and Class B Common Stock are not entitled to
preemptive rights, other than Exide under the Stockholders' Agreement which,
by its terms, will expire upon completion of the Offering. See "Related Party
Transactions."

PREFERRED STOCK

The Company's Board of Directors is authorized to issue preferred stock,
without the approval of the Company's shareholders. The rights,
qualifications, limitations and restrictions on each series of Preferred Stock
issued will be determined by the Board of Directors at the time of issuance
and may include, among other things,

52
<PAGE>

rights to participating dividends, voting rights and convertibility into
shares of the Company's Class A Common Stock. Shares of preferred stock may be
issued with dividend, redemption, voting, and liquidation rights taking
priority over Common Stock, and may be convertible into Common Stock, as
determined by the Company's Board of Directors at the time of issuance.

LIMITATION ON DIRECTORS' LIABILITY

As authorized by the PBCL, the Company's Bylaws provide that no director of
the Company shall be liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability (i)
for any breach of the director's duty of loyalty to the Company or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) in respect of
certain unlawful dividend payments or stock redemptions or repurchases or (iv)
for any transaction from which the director derived an improper personal
benefit. The effect of these provisions will be to eliminate the rights of the
Company and its stockholders (through stockholders' derivative suits on behalf
of the Company) to recover monetary damages against a director for breach of
fiduciary duty as a director (including breaches resulting from negligent or
grossly negligent behavior) except in the situations described in clauses (i)-
(iv) of the preceding sentence. These provisions do not affect the
availability of equitable remedies such as injunctive relief and will not
alter the liability of directors under federal securities laws. The Company is
in the process of obtaining a policy of insurance to cover its directors and
officers for loss, damage and expense which they incur in their capacity as
such. See "Management--Directors and Officers Insurance."

In 1990, Pennsylvania adopted legislation further amending the PBCL. This
legislation generally: (1) expands the factors and groups (including
shareholders) which the Company's Board of Directors can consider in
determining whether a certain action is in the best interests of the
corporation; (2) provides that the Company's Board of Directors need not
consider the interests of any particular group as dominant or controlling; (3)
provides that the Company's directors, in order to satisfy the presumption
that they have acted in the best interests of the corporation, need not
satisfy any greater obligation or higher burden of proof with respect to
actions relating to an acquisition or potential acquisition of control; (4)
provides that actions relating to acquisitions of control that are approved by
a majority of "disinterested directors" are presumed to satisfy the directors'
standard, unless it is proven by clear and convincing evidence that the
directors did not assent to such action in good faith after reasonable
investigation; and (5) provides that the fiduciary duty of the Company's
directors is solely to the corporation and may be enforced by the corporation
or by a shareholder in a derivative action, but not by a shareholder directly.
The 1990 amendments to the PBCL also provide that the fiduciary duty of
directors shall not be deemed to require directors to (1) redeem any rights
under, or to modify or render inapplicable, any shareholder rights plan; (2)
render inapplicable, or make determinations under, provisions of the PBCL
relating to control transactions, business combinations, control-share
acquisitions or disgorgement by certain controlling shareholders following
attempts to acquire control; or (3) act as the board of directors, a committee
of the board or an individual director solely because of the effect such
action might have on an acquisition or potential or proposed acquisition of
control of the corporation or the consideration that might be offered or paid
to shareholders in such an acquisition.

Pennsylvania Anti-takeover Laws

The PBCL contains certain provisions which, among other things: (1) require
that, following any acquisition by any person or group of 20% of a public
corporation's voting power, the remaining shareholders have the right to
receive payment for their shares, in cash, from such person or group in an
amount equal to the "fair value" of the shares, including an increment
representing a proportion of any value payable for control of the corporation;
and (2) prohibit for five years, subject to certain exceptions, a "business
combination" (which includes a merger or consolidation of the corporation or a
sale, lease or exchange of assets) with a shareholder or group of shareholders
beneficially owning 20% or more of a public corporation's voting power. These
provisions, together with (i) the multiple voting rights accorded the Class B
Common Stock, (ii) the ability of the Board to issue preferred stock and
determine the rights, qualifications, limitations and restrictions with
respect

53
<PAGE>

to such preferred stock without the approval of the Company's shareholders,
(iii) the classified nature of the Company's Board, (iv) the matters discussed
under "Limitation on Directors' Liability," and (v) provisions in the
Company's Articles of Incorporation requiring a supermajority vote to amend
certain provisions of the Company's Articles may, in the event Yuasa Japan
ceases to own shares of Class B Common Stock sufficient to control the
Company, have the effect of discouraging a potentially interested purchaser
from attempting a non-negotiated bid for the Company or of otherwise deferring
or preventing a change in control of the Company.

Chapter 25 of the PBCL contains certain other "anti-takeover" provisions
which apply to a "registered corporation," unless the registered corporation
elects not to be governed by such provisions. The Company will be a
"registered corporation" within the meaning of Chapter 25 of the PBCL because
the common stock of the Company is entitled to vote generally in the election
of directors and will be registered under the Securities Exchange Act of 1934.
The relevant provisions are contained in Subchapters 25E through 25H of the
PBCL. As permitted under the PBCL, the Company has opted out of the provisions
of Subchapters 25E (relating to control transactions), 25F (relating to
business combinations), 25G (relating to control-share acquisitions) and 25H
(relating to disgorgement). As a result of the Company opting out of
Subchapter 25G (relating to control-share acquisitions) the Company is not
subject to Subchapter 25I (relating to severance payments) or Subchapter 25J
(relating to labor contracts).

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Class A Common Stock and the Class
B Common Stock is American Stock Transfer & Trust Company.

54
<PAGE>

UNDERWRITING

Nomura Securities International, Inc. ("Nomura") and Smith Barney Inc. are
acting as representatives (the "Representatives") of each of the Underwriters
named below (the "Underwriters"). Subject to the terms and conditions set
forth in an underwriting agreement (the "Underwriting Agreement"), among the
Company, the Selling Stockholder and the Underwriters, the Company and the
Selling Stockholder have agreed to sell to the Underwriters, and each of the
Underwriters, severally and not jointly, has agreed to purchase from the
Company and the Selling Stockholder the number of shares of Class A Common
Stock set forth opposite its name below:
<TABLE>
<CAPTION>
Number of
Underwriters Shares
------------ ---------
<S> <C>
Nomura Securities International, Inc..............................
Smith Barney Inc..................................................
---------
Total......................................................... 4,392,000
=========
</TABLE>

In the Underwriting Agreement, the several Underwriters have agreed,
subject to the terms and conditions set forth therein, to purchase all the
shares of Class A Common Stock being sold pursuant to such agreement if any of
the shares of Class A Common Stock being sold pursuant to such agreement are
purchased. In certain circumstances, under the Underwriting Agreement the
commitments of non-defaulting Underwriters may be increased.

The Representatives have advised the Company and the Selling Stockholder
that the Underwriters propose initially to offer the shares of Class A Common
Stock to the public at the initial public offering price set forth on the
cover page of this Prospectus and to certain dealers at such price less a
concession not in excess of $ per share of Class A Common Stock. The
Underwriters may allow, and such dealers may reallow, a discount not in excess
of $ per share of Class A Common Stock on sales to certain other dealers.
After the initial public offering, the public offering price, concession and
discount may be changed.

The Company, its directors and executive officers and Yuasa Japan have
agreed, subject to certain exceptions, not to, directly or indirectly, (i)
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant for the sale of, or otherwise transfer or dispose of any Common Stock
or securities convertible into or exchangeable or exercisable for Common
Stock, whether now owned or hereafter acquired by the person executing the
agreement or with respect to which the person executing the agreement
thereafter acquires the power of disposition, or exercise any right to require
the Company to file a registration statement under the Securities Act with
respect to the foregoing or (ii) enter into any swap or other agreement or
transaction that transfers, in whole or part, directly or indirectly, the
economic consequence of ownership of the Common Stock, whether any such swap
or transaction is to be settled by delivery of Common Stock or other
securities, in cash or otherwise, without the prior written consent of Nomura,
for a period of 180 days after the date of this Prospectus.

The Company has granted to the Underwriters an over-allotment option,
exercisable not later than 30 days after the date of this Prospectus, to
purchase up to an aggregate of 658,800 additional shares of Class A Common
Stock at the initial public offering price less the underwriting discounts and
commissions set forth on the cover page of this Prospectus. To the extent that
the Underwriters exercise this option, each Underwriter will be committed,
subject to certain conditions, to purchase a number of additional shares of
Class A Common Stock proportionate to such Underwriter's initial commitment as
indicated in the preceding table, and the Company will be obligated, pursuant
to the option, to sell such shares of Class A Common Stock to the
Underwriters. The over-allotment option may be exercised for fewer than all of
the shares subject to such option. The Underwriters may exercise the option
only to cover over-allotments, if any, made in connection with the sale of the
Class A Common Stock offered hereby. If purchased, the Underwriters will offer
such additional shares on the same terms as those on which the shares of Class
A Common Stock are being offered.

At Company's request, the Underwriters have reserved up to 219,600 shares
for sale at the initial public offering price to certain of the Company's
officers, directors and employees, members of their immediate families and
other individuals who are business associates of the Company, in each case as
such parties have expressed an interest in purchasing such shares. The number
of shares of Class A Common Stock available for sale to the general public
will be reduced to the extent such persons purchase such reserved shares. Any
reserved shares which are not orally confirmed for purchase within one
business day of the date of this Prospectus will be offered by the
Underwriters to the general public on the same terms as the other shares
offered hereby.

55
<PAGE>

Prior to the Offering, there has been no public market for the Class A
Common Stock. The initial public offering price for the Class A Common Stock
was determined by negotiation between the Company and the Representatives. The
factors considered in determining the initial public offering price, in
addition to prevailing market conditions, are price-to-earnings ratios of
publicly traded companies that the Representatives believe to be comparable to
the Company, certain financial information of the Company, the history of, and
the prospects for, the Company and the industry in which it competes, and an
assessment of the Company's management, its past and present operations, the
prospects for, and timing of, future revenues of the Company, the present
state of the Company's development, and the above factors in relation to
market values and various valuation measures of other companies engaged in
activities similar to the Company. There can be no assurance that an active
trading market will develop for the Class A Common Stock or that the Class A
Common Stock will trade in the public market subsequent to the Offering made
hereby at or above the initial public offering price. The initial public
offering price set forth on the cover page of this Prospectus should not be
considered an indication of the actual value of the Class A Common Stock. Such
price is subject to change as a result of market conditions and other factors.
The Company has applied for listing of the Class A Common Stock on the New
York Stock Exchange under the symbol "YUA."

The Company and the Selling Stockholder have agreed to indemnify the
several Underwriters against certain liabilities, including liabilities under
the Securities Act, or to contribute to payments the Underwriters may be
required to make in respect thereof.

The Representatives have advised the Company and the Selling Stockholder
that the Underwriters do not intend to confirm sales of Class A Common Stock
offered hereby to any accounts over which they exercise discretionary
authority.

Until the distribution of the Class A Common Stock is completed, rules of
the Commission may limit the ability of the Underwriters and certain selling
group members to bid for and purchase the Class A Common Stock. As an
exception to these rules, the Representatives are permitted to engage in
certain transactions that stabilize the price of the Class A Common Stock.
Such transactions may consist of bids or purchases for the purpose of pegging,
fixing or maintaining the price of the Class A Common Stock.

If the Underwriters create a short position in the Class A Common Stock in
connection with the Offering, (i.e., if they sell more shares of Class A
Common Stock than are set forth on the cover page of this Prospectus), they
may reduce that short position by purchasing Class A Common Stock in the open
market. The may also elect to reduce any short position by exercising all or
part of the over-allotment option described above.

The Representatives may also impose a penalty bid on certain Underwriters
and selling group members. This means that if the Representatives purchase
shares of Class A Common Stock in the open market to reduce the Underwriters'
short position or to stabilize the price of the Class A Common Stock, they may
reclaim the amount of the selling concession from the Underwriters and selling
group members who sold those shares as part of the Offering.

In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher
than it might be in the absence of such purchases. The imposition of a penalty
bid might also have an effect on the price of a security to the extent that it
were to discourage resales of the Class A Common Stock by purchasers in the
Offering.

Neither the Company nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the
transactions described above may have on the price of the Class A Common
Stock. In addition, neither the Company nor any of the Underwriters makes any
representation that the Representatives will engage in such transaction or
that such transactions, once commenced, will not be discontinued without
notice.

Certain of the Underwriters and their respective affiliates have provided
from time to time, and expect to provide in the future, financial advisory and
investment banking services for, or normal banking relationships with, the
Company and its affiliates, for which they receive customary compensation.

56
<PAGE>

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Stevens & Lee, Philadelphia and Reading, Pennsylvania.
Certain legal matters will be passed upon for the Underwriters by Shearman &
Sterling, New York, New York. Shearman & Sterling will rely on the opinion of
Stevens & Lee with respect to matters of Pennsylvania law.

EXPERTS

The consolidated financial statements and financial statement schedule of
Yuasa, Inc. at March 31, 1998, and for the year then ended, appearing in this
Prospectus and Registration Statement have been audited by Ernst & Young, LLP,
independent auditors, and at March 31, 1997, and for the two years ended March
31, 1997 and March 31, 1996, by PricewaterhouseCoopers LLP, independent
accountants, as set forth in their respective reports thereon appearing
elsewhere herein, and are included in reliance upon such reports given upon
the authority of such firms as experts in accounting and auditing. In
connection with engaging PricewaterhouseCoopers LLP to provide its consent to
be named as an expert and to include its report in this Prospectus, in
accordance with its firm's general practice, PricewaterhouseCoopers LLP
requested and the Company agreed, to indemnify PricewaterhouseCoopers LLP for
the payment of solely the legal costs and expenses that PricewaterhouseCoopers
LLP might incur in its successful defense of a legal action or proceeding that
arises as a result of the consent of PricewaterhouseCoopers LLP to the
incorporation of its audit report on the Company's 1997 and 1996 financial
statements in the Registration Statement. With respect to such
indemnification, legal costs and expenses must be actually and reasonably
incurred by PricewaterhouseCoopers LLP in connection with the defense or
settlement of such action or proceeding and so long as PricewaterhouseCoopers
LLP acted in good faith and in a manner in or not opposed to the best
interests of the Company, except that no indemnification shall be made in
respect to any claim, issue or matter as to which PricewaterhouseCoopers LLP
shall have been determined to be liable to the Company or for which
PricewaterhouseCoopers LLP was unsuccessful in its defense. A successful
defense in this context would be one in which PricewaterhouseCoopers LLP (or
any of its members) is determined to have been neither culpable nor obligated
to pay any part of the plaintiff's damages with respect to any such action or
proceeding.

CHANGE IN INDEPENDENT ACCOUNTANTS

Effective as of December 1, 1997, Price Waterhouse LLP declined to re-
propose to serve as the Company's independent accountants. The report of Price
Waterhouse LLP as of March 31, 1997 and for each of the two years in the
period then ended did not contain an adverse opinion or disclaimer of opinion
and was not qualified or modified as to uncertainty, audit scope or accounting
principles. In connection with the audits for the years ended March 31, 1996
and 1997, Price Waterhouse LLP has indicated to the Company that it concurs
with the Company's assertion that there were no disagreements between the
Company and Price Waterhouse LLP which, if not resolved to the satisfaction of
Price Waterhouse LLP on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure, would have
caused Price Waterhouse LLP to make reference thereto in their report on the
financial statements for such years. The Company subsequently appointed Ernst
& Young LLP as its independent accountants. This appointment was approved by
the Company's Board of Directors. Prior to retaining Ernst & Young LLP, the
Company had not consulted with Ernst & Young LLP regarding the application of
accounting principles or the type of audit opinion that might be rendered on
the Company's financial statements.

None of the reports of Price Waterhouse LLP on the Company's previously
issued consolidated financial statements as of March 31, 1996 and March 31,
1997 contained an adverse opinion or a disclaimer of opinion, nor was any such
report qualified or modified as to uncertainty, audit scope or accounting
principles. Furthermore, during that period there were no "reportable events"
within the meaning of Item 304(a)(1)(v) of Regulation S-K promulgated under
the Securities Act.

57
<PAGE>

YUASA, INC.

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S> <C>
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets at March 31, 1998 and June 28, 1998......... F-2
Consolidated Statements of Income for the three months Ended June 29,
1997 and June 28, 1998................................................. F-3
Consolidated Statements of Cash Flows for the three months Ended June
29, 1997 and June 28, 1998............................................. F-4
Notes to the Consolidated Financial Statements.......................... F-5
AUDITED CONSOLIDATED FINANCIAL STATEMENTS
Reports of Independent Accountants...................................... F-9
Consolidated Balance Sheets at March 31, 1997 and 1998.................. F-11
Consolidated Statements of Income for the Years Ended March 31, 1996,
1997 and 1998.......................................................... F-12
Consolidated Statements of Changes in Shareholders' Equity for the Years
Ended March 31, 1996, 1997 and 1998.................................... F-13
Consolidated Statements of Cash Flows for the Years Ended March 31,
1996, 1997 and 1998.................................................... F-14
Notes to the Consolidated Financial Statements.......................... F-15
</TABLE>

F-1
<PAGE>

YUASA, INC.

CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
March 31, June 28,
1998 1998
--------- --------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash..................................................... $ 7,311 $ 7,898
Accounts receivable, net................................. 31,803 33,754
Related party loan receivable............................ -- 5,000
Inventories.............................................. 63,261 65,670
Deferred taxes........................................... 1,978 2,159
Prepaid expenses and other current assets................ 4,388 3,542
-------- --------
Total current assets................................... 108,741 118,023
-------- --------
Property, plant and equipment, net....................... 83,250 86,334
-------- --------
Intangible assets, net................................... 20,695 19,767
Deferred taxes........................................... 3,551 3,833
Other.................................................... 795 755
-------- --------
Total assets........................................... $217,032 $228,712
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term debt and current portion of long-term liabili-
ties.................................................... $ 27,997 $ 46,706
Accounts payable......................................... 34,474 31,940
Dividends payable........................................ 2,315 --
Accrued expenses......................................... 32,510 30,788
-------- --------
Total current liabilities.............................. 97,296 109,434
-------- --------
LONG-TERM LIABILITIES
Long-term debt........................................... 68,152 65,092
Capital lease obligations................................ 9,528 9,498
Other.................................................... 2,059 1,977
-------- --------
Total liabilities...................................... 177,035 186,001
-------- --------
SHAREHOLDERS' EQUITY
Preferred stock, $0.01 par value, 50,000 shares autho-
rized, no shares issued and outstanding................. -- --
Class A common stock, $0.01 par value, 100,000 authorized
shares; no shares issued and outstanding................ -- --
Class B common stock, $0.01 par value, 100,000 shares au-
thorized, 8,092 shares issued and outstanding........... 81 81
-------- --------
Paid-in capital.......................................... 16,324 16,324
-------- --------
Retained earnings........................................ 24,685 27,427
-------- --------
Minimum pension liability................................ (968) (968)
Cumulative translation adjustment........................ (125) (153)
-------- --------
Accumulated other comprehensive income................. (1,093) (1,121)
-------- --------
Total shareholders' equity............................. 39,997 42,711
-------- --------
Total liabilities and shareholders' equity............. $217,032 $228,712
======== ========
</TABLE>

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

F-2
<PAGE>

YUASA, INC.

CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three months ended
---------------------------
June 29, 1997 June 28, 1998
------------- -------------
<S> <C> <C>
Net sales......................................... $94,677 $98,864
Cost of goods sold................................ 74,520 76,097
------- -------
Gross profit.................................. 20,157 22,767
Operating expenses................................ 13,664 14,514
Amortization expense.............................. 910 908
------- -------
Operating earnings............................ 5,583 7,345
Interest expense.................................. 2,517 2,464
Other expense (earnings).......................... 192 250
------- -------
Earnings before taxes............................. 2,874 4,631
Income taxes...................................... 1,212 1,888
------- -------
Net earnings...................................... $ 1,662 $ 2,743
======= =======
Basic and diluted earnings per share.............. $ 0.21 $ 0.34
======= =======
Weighted average shares of Common Stock
outstanding...................................... 8,092 8,092
======= =======
Dividends per share............................... $ 0.21 $ 0.00
======= =======
</TABLE>

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

F-3
<PAGE>

YUASA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
------------------
JUNE 29, JUNE 28,
1997 1998
-------- --------
(IN THOUSANDS)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings................................................ $ 1,662 $ 2,743
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation and amortization .............................. 3,714 3,806
Provision for doubtful accounts............................. 123 100
Provision for deferred taxes................................ 846 (463)
Profit on sale-leaseback of machinery and equipment......... (81) (81)
CHANGES IN ASSETS AND LIABILITIES, NET OF ACQUISITIONS AND
DIVESTITURES:
Decrease (increase) in accounts receivable.................. 5,249 (2,051)
Increase in inventories..................................... (4,874) (2,409)
Decrease in prepaid expenses and other current assets....... 2,780 846
Decrease (increase) in other assets......................... (158) 23
Decrease in accounts payable................................ (3,914) (2,534)
Decrease in accrued expenses................................ (2,510) (1,722)
Decrease in other liabilities............................... (612) (30)
------- -------
Net cash provided by (used in) operating activities....... 2,225 (1,772)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures........................................ (1,676) (5,945)
Increase in related party loan receivable................... -- (5,000)
------- -------
Net cash used in investing activities..................... (1,676) (10,945)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in short-term debt............................. 3,850 18,705
Repayments of long-term debt................................ (57) (3,060)
Repayments of capital lease obligations..................... (26) (26)
Dividend paid............................................... -- (2,315)
------- -------
Net cash provided by financing activities................. 3,767 13,304
------- -------
Net increase in cash...................................... 4,316 587
Cash, beginning of period.................................... 4,965 7,311
------- -------
Cash, end of period.......................................... $ 9,281 $ 7,898
======= =======
</TABLE>

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

F-4
<PAGE>

YUASA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED--IN THOUSANDS)

1. BASIS OF PRESENTATION

The accompanying interim financial data are unaudited, and therefore do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. However, in the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation are reflected in the
consolidated financial statements. The consolidated balance sheet as of March
31, 1998 is derived from audited financial statements. The interim financial
data should be read in conjunction with the consolidated financial statements
and notes thereto contained in the Company's registration statement on Form S-
1. The results of operations for the three months ended June 28, 1998 are not
necessarily indicative of the results to be expected for the full year ending
March 31, 1999.

2. EARNINGS PER SHARE

In 1997, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards No. 128, "Earnings Per Share." All earnings
per share amounts for all periods have been presented to conform to SFAS 128
requirements.

3. INVENTORIES

Inventories consist of:

<TABLE>
<CAPTION>
March 31, June 28,
1998 1998
--------- --------
<S> <C> <C>
Raw materials............................................. $ 9,657 $ 9,537
Work in process........................................... 13,402 13,693
Finished goods............................................ 40,202 42,440
------- -------
Inventories............................................... $63,261 $65,670
======= =======
</TABLE>

4. ACCRUED EXPENSES

Accrued expenses consist of:

<TABLE>
<CAPTION>
March 31, June 28,
1998 1998
--------- --------
<S> <C> <C>
Product warranty reserve.................................. $ 5,397 $ 5,922
Payroll and related benefits.............................. 12,173 12,282
Interest.................................................. 1,256 910
Other..................................................... 13,684 11,674
------- -------
$32,510 $30,788
======= =======
</TABLE>

5. INCOME TAXES

A reconciliation of income taxes at the statutory rate to the income tax
provision is as follows:

<TABLE>
<CAPTION>
Three Months
Ended
-----------------
June 29, June 28,
1997 1998
-------- --------
<S> <C> <C>
U.S. statutory income tax at 35%........................... $1,006 $1,621
State income tax, net of federal income tax benefit........ 59 97
Other...................................................... 147 170
------ ------
$1,212 $1,888
====== ======
</TABLE>

F-5
<PAGE>

YUASA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED--IN THOUSANDS)

6. CONTINGENCIES:

The Company is involved in routine litigation incidental to the conduct of
its business the results of which, in the opinion of management, are not
likely to be material to the Company's financial condition or results of
operations or cash flows.

As a result of its manufacturing activities, the Company is subject to
various environmental laws and is exposed to the costs and risks of handling,
processing, storing and disposing of hazardous and toxic substances (primarily
lead and acid). The Company's operations are also subject to Federal and state
occupational and health regulations, particularly relating to the control of
blood lead levels in the workplace. The Company is involved in certain
environmental matters pending before the Federal and state courts and
regulatory agencies. In the opinion of management, such matters known to the
Company are not expected to have a material adverse effect on the Company's
financial condition or results of operations, but the full extent of the
Company's liability in this area cannot be quantified at this time.

7. RELATED PARTY TRANSACTIONS:

The Company transacts business with several entities with which it is
related through common ownership. Summarized below are the Company's
transactions with related parties.

<TABLE>
<CAPTION>
Purchases Sales
Three Months Three Months
Ended Ended
----------------- -----------------
June 29, June 28, June 29, June 28,
Company 1997 1998 1997 1998
------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Exide(1)................................. $1,343 $ 768 $ 974 $1,852
Yuasa Corporation(2)..................... 764 1,700 1,685 1,901
------ ------ ------ ------
$2,107 $2,468 $2,659 $3,753
====== ====== ====== ======
</TABLE>

The following balances with related parties are outstanding as of:

<TABLE>
<CAPTION>
Accounts Payable Accounts Receivable
------------------ --------------------
March 31, June 28, March 31, June 28,
Company 1998 1998 1998 1998
------- --------- -------- ---------- ---------
<S> <C> <C> <C> <C>
Exide (1)........................... $ 280 $ 246 $ 1,588 $ 956
Yuasa Corporation (2)............... 511 13 1,450 1,438
----- ----- --------- ---------
$ 791 $ 259 $ 3,038 $ 2,394
===== ===== ========= =========
</TABLE>

Payment terms are generally the same as those extended to unrelated third
parties, and the balances are settled within the stated terms.

(1) The Company purchases lead, certain battery components, and
administrative services from Exide. The Company sells certain finished
batteries to Exide. Transactions between the Company and Exide approximate
market prices.
(2) The Company purchases from and sells to Yuasa Corporation and its
affiliates certain finished batteries depending upon market demands. The
Company also purchases certain finished batteries, parts, and accessories
from Yuasa Corporation and affiliates. Transactions between the Company and
Yuasa

F-6
<PAGE>

YUASA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED--IN THOUSANDS)

Corporation approximate market prices. In addition, the Company may loan
Yuasa Corporation up to $5,000 pursuant to the credit facility dated
March 26, 1998. The interest is charged on a monthly basis equal to
twenty-five (25) basis points in excess of the greater rate charged to
the Company on the revolving credit line from Sakura Bank or the
applicable federal rate for short term loans determined monthly by the
IRS. During the first quarter of fiscal 1999, the Company loaned $5,000
to Yuasa Corporation. Interest income for the first quarter of fiscal
1999 was $65.

Additionally, the Company incurred royalty expenses to Yuasa Corporation
related to sales of motorcycle and small stationary batteries. Royalty
expenses for three months ended June 29, 1997 and June 28, 1998 were $405 and
$356, respectively.

8. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

As of April 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130"). SFAS 130
establishes rules for the reporting and presentation of comprehensive income
and its components. SFAS 130 requires foreign currency translation adjustments
and certain minimum pension adjustments, which prior to adoption were reported
separately in shareholders' equity, to be included in accumulated other
comprehensive income. The accumulated foreign currency translation and minimum
pension liability adjustment as of June 29, 1997 has been reclassified to
conform to the requirements of SFAS 130. The adoption of SFAS 130 did not
impact the Company's net income or total shareholders' equity. For the three
months ended June 29, 1997 and June 28, 1998, total comprehensive income
amounted to $1.7 million and $2.7 million, respectively.

In February 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 132 Employers' Disclosures about
Pensions and Other Post Retirement Benefits. This standard revises employers'
disclosures about pensions and other post-retirement plans, but does not
change the measurement or recognition of those plans. This standard will be
effective for the Company's financial statements for the year ended March 31,
1999.

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities. This Statement establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts (collectively referred to as derivatives) and for
hedging activities. It requires that an entity recognize all derivatives as
either assets or liabilities in the statement of financial position and
measures those instruments at fair value. This Standard is effective for the
Company's financial statements for all quarters in the year beginning April 1,
2000. Management has not completed its review of Statement No. 133 and has not
determined the impact this adoption will have on the Company's financial
statements.

9. INITIAL PUBLIC OFFERING

In May and August 1998, the Company filed amendments to its registration
statement dated March 30, 1998, on Form S-1 with the Securities and Exchange
Commission in anticipation of a public offering of common stock.

F-7
<PAGE>

10. SUBSEQUENT EVENT

On August 5, 1998, the Company entered into an agreement to purchase for
$3.6 million, 80% of the stock of Accumuladores Narvit Ltda. ("Narvit")
located in Brazil, South America. The annual sales are approximately $12
million, principally representing battery sales to the telecommunications
industry of Brazil.

Pro forma results for this acquisition would not be materially different
than the historical results reported for any period.

F-8
<PAGE>

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholders
Yuasa, Inc.

We have audited the accompanying consolidated balance sheet of Yuasa, Inc.
as of March 31, 1998, and the related consolidated statements of income,
changes in shareholders' equity and cash flows for the fiscal year ended March
31, 1998. Our audit also included the financial statement schedule (as it
pertains to fiscal 1998) listed in the Index at Item 16(b). These financial
statements and schedule are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements and
schedule based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Yuasa, Inc. at March 31, 1998, and the consolidated results of its
operations and its cash flows for the fiscal year ended March 31, 1998, in
conformity with generally accepted accounting principles. Also, in our
opinion, the related financial statement schedule, when considered in relation
to the basic fiscal 1998 financial statements taken as a whole, presents
fairly in all material respects the information set forth therein.

Ernst & Young LLP

May 6, 1998
Harrisburg, Pennsylvania

F-9
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and
Shareholders of Yuasa, Inc.

In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of income, changes in shareholders' equity and cash
flows present fairly, in all material respects, the financial position of
Yuasa, Inc. and its subsidiaries (the Company) at March 31, 1997, and the
results of their operations and cash flows for the years ended March 31, 1997
and March 31, 1996, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.

Price Waterhouse LLP

Philadelphia, PA
May 27, 1997, except for Note 16,
which is as of March 26, 1998

F-10
<PAGE>

YUASA, INC.

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
March 31, March 31,
1997 1998
--------- ---------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash..................................................... $ 4,965 $ 7,311
Accounts receivable, net................................. 40,243 31,803
Inventories.............................................. 60,055 63,261
Deferred taxes........................................... 2,181 1,978
Prepaid expenses and other current assets................ 6,171 4,388
-------- --------
Total current assets................................... 113,615 108,741
-------- --------
Property, plant and equipment, net....................... 77,481 83,250
-------- --------
Intangible assets, net................................... 24,338 20,695
Deferred taxes........................................... 2,903 3,551
Other.................................................... 1,182 795
-------- --------
Total assets........................................... $219,519 $217,032
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term debt and current portion of long-term liabili-
ties.................................................... $ 36,225 $ 27,997
Accounts payable......................................... 32,622 34,474
Dividends payable........................................ -- 2,315
Accrued expenses......................................... 30,037 32,510
-------- --------
Total current liabilities.............................. 98,884 97,296
-------- --------
LONG-TERM LIABILITIES
Long-term debt........................................... 72,294 68,152
Capital lease obligations................................ 9,917 9,528
Other.................................................... 2,582 2,059
-------- --------
Total liabilities...................................... 183,677 177,035
-------- --------
COMMITMENTS AND CONTINGENCIES..............................
SHAREHOLDERS' EQUITY
Preferred stock, $0.01 par value, 50,000 shares autho-
rized, no shares issued and outstanding................. -- --
Class A common stock, $0.01 par value, 100,000 authorized
shares; no shares issued and outstanding................ -- ---
Class B common stock, $0.01 par value, 100,000 shares au-
thorized, 8,092 shares issued and outstanding........... 81 81
-------- --------
Paid-in capital.......................................... 16,324 16,324
-------- --------
Retained earnings........................................ 20,372 24,685
-------- --------
Minimum pension liability................................ (827) (968)
Cumulative translation adjustment........................ (108) (125)
-------- --------
Accumulated other comprehensive income................... (935) (1,093)
-------- --------
Total shareholders' equity............................. 35,842 39,997
-------- --------
Total liabilities and shareholders' equity............. $219,519 $217,032
======== ========
</TABLE>

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

F-11
<PAGE>

YUASA, INC.

CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
Years Ended March 31,
---------------------------
1996 1997 1998
-------- -------- --------
<S> <C> <C> <C>
Net sales........................................ $357,517 $357,526 $396,317
Cost of goods sold............................... 295,795 285,379 308,438
-------- -------- --------
Gross profit................................. 61,722 72,147 87,879
Operating expenses............................... 43,952 48,991 56,398
Amortization expense............................. 3,515 3,629 3,630
-------- -------- --------
Operating earnings........................... 14,255 19,527 27,851
Interest expense................................. 11,581 9,625 9,709
Loss on investment............................... -- -- 4,005
Other expense (earnings)......................... (119) 555 (1)
-------- -------- --------
Earnings before taxes............................ 2,793 9,347 14,138
Income taxes..................................... 1,514 4,236 5,830
-------- -------- --------
Net earnings..................................... $ 1,279 $ 5,111 $ 8,308
======== ======== ========
Basic and diluted earnings per share............. $ .16 $ .63 $ 1.03
======== ======== ========
Weighted average shares of Common Stock
outstanding..................................... 8,092 8,092 8,092
======== ======== ========
Dividends per share.............................. $ .05 $ .15 $ .49
======== ======== ========
</TABLE>

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

F-12
<PAGE>

YUASA, INC.

CONSOLIDATED STATEMENTS OF CHANGE IN SHAREHOLDERS' EQUITY
(IN THOUSANDS)

<TABLE>
<CAPTION>
ACCUMULATED TOTAL
COMMON COMMON OTHER SHARE-
PREFERRED STOCK STOCK PAID-IN RETAINED COMPREHENSIVE HOLDERS'
STOCK CLASS A CLASS B CAPITAL EARNINGS INCOME EQUITY
--------- ------- ------- ------- -------- ------------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT APRIL 1,
1995................... $ -- $ -- $81 $16,324 $15,582 $ (146) $31,841
---- ---- --- ------- ------- ------- -------
Net earnings............ 1,279 1,279
Minimum pension......... (122) (122)
Cumulative translation
adjustment............. (336) (336)
-------
Comprehensive Income.... 821
-------
Dividends............... (400) (400)
---- ---- --- ------- ------- ------- -------
BALANCE AT MARCH 31,
1996................... -- -- 81 16,324 16,461 (604) 32,262
---- ---- --- ------- ------- ------- -------
Net earnings............ 5,111 5,111
Minimum pension......... (356) (356)
Cumulative translation
adjustment............. 25 25
-------
Comprehensive Income.... 4,780
-------
Dividends............... (1,200) (1,200)
---- ---- --- ------- ------- ------- -------
BALANCE AT MARCH 31,
1997................... -- -- 81 16,324 20,372 (935) 35,842
---- ---- --- ------- ------- ------- -------
Net earnings............ 8,308 8,308
Minimum pension......... (141) (141)
Cumulative translation
adjustment............. (17) (17)
-------
Comprehensive Income.... 8,150
-------
Dividends............... (3,995) (3,995)
---- ---- --- ------- ------- ------- -------
BALANCE AT MARCH 31,
1998................... $ -- $ -- $81 $16,324 $24,685 $(1,093) $39,997
==== ==== === ======= ======= ======= =======
</TABLE>

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

F-13
<PAGE>

YUASA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
Years Ended March 31,
----------------------------
1996 1997 1998
-------- -------- --------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings.................................... $ 1,279 $ 5,111 $ 8,308
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization................... 15,000 14,022 14,882
Provision for doubtful accounts................. 38 398 366
Provision for deferred taxes.................... (1,978) (257) (445)
Loss on sale of subsidiary...................... 127 --
Profit on sale-leaseback of machinery and equip-
ment........................................... (267) (327) (327)
Loss on retirement and write-downs of property,
plant and equipment............................ 56 468 30
Loss on investment.............................. -- -- 1,450
CHANGES IN ASSETS AND LIABILITIES, NET OF ACQUI-
SITIONS AND DIVESTITURES:
(Increase) decrease in accounts receivable...... (3,526) (1,903) 8,074
(Increase) decrease in inventories.............. (4,161) 5,768 (3,206)
(Increase) decrease in prepaid expenses and
other current assets........................... (764) (2,599) 1,783
(Increase) decrease in other assets............. (157) 2,475 (997)
Increase in accounts payable.................... 116 4,454 801
Increase in accrued expenses.................... 5,126 217 5,217
Decrease in other liabilities................... (1,255) (278) (199)
-------- -------- --------
Net cash provided by operating activities...... 9,634 27,549 35,737
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures............................ (17,078) (11,203) (18,951)
Investments in subsidiaries and affiliates...... (1,500) (3,229)
Proceeds from sale of subsidiary................ 109 -- --
Proceeds from sale-leaseback of machinery and
equipment...................................... 6,012 -- --
Proceeds from sales of property, plant and
equipment...................................... 15 145 --
-------- -------- --------
Net cash used in investing activities.......... (12,442) (14,287) (18,951)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in short-term debt................. (18,005) (3,395) (13,835)
Proceeds from issuance of long-term debt........ 30,000 1,760 10,000
Repayments of long-term debt.................... (6,000) (8,033) (8,133)
Repayments of capital lease obligations......... (1,078) (1,016) (792)
Dividends paid.................................. (400) (1,200) (1,680)
-------- -------- --------
Net cash (used in) provided by financing activ-
ities......................................... 4,517 (11,884) (14,440)
-------- -------- --------
Net increase in cash........................... 1,709 1,378 2,346
Cash beginning of year........................... 1,878 3,587 4,965
-------- -------- --------
Cash, end of year................................ $ 3,587 $ 4,965 $ 7,311
======== ======== ========
</TABLE>

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

F-14
<PAGE>

YUASA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Description of Business

YUASA, INC. (the Company) is a manufacturer and supplier of industrial
batteries and small engine starting batteries. The Company's shareholders are
Yuasa Corporation (86.5%) and Exide Corporation (13.5%).

Principles of Consolidation

The consolidated financial statements include the accounts of the Company
and its majority owned and wholly-owned subsidiaries. All significant
intercompany accounts and transactions have been eliminated.

Revenue and Warranty Expense Recognition

Sales are recorded upon shipment of products and as services are rendered.
Expenses for estimated warranty claims are accrued in the period of sales
recognition.

Accounts Receivable

In June 1996, the FASB issued Statement No. 125 (SFAS 125). "Accounting for
Transfers and Servicing of Financial Assets and Extinguishment of
Liabilities," which provides accounting and reporting standards for sales,
securitizations, and servicing of receivables and other financial assets,
secured borrowing and collateral transactions, and the extinguishment of
liabilities. The Company has modified an agreement to meet the new
requirements to enable it to continue recognizing transfers of certain
receivables to a qualifying special-purpose entity as sales. This agreement is
structured to allow the Company to sell to an affiliate of a bank, without
recourse, all right, title and interest in designated accounts receivable. As
of March 31, 1997 and 1998, a total of $30,000 and $76,559, respectively, of
accounts receivable were transferred to a qualifying special-purpose entity.
As of March 31, 1997 and 1998, the qualifying special purpose entity sold
accounts receivable to an affiliate of a bank for $30,000 and $40,000,
respectively, which was repaid to the Company. At March 31, 1998, accounts
receivable includes a residual interest in the qualifying special-purpose
entity, a note receivable from the qualifying special-purpose entity and an
interest only strip related to the accounts receivable transferred to the
qualifying special-purpose entity. The net carrying value of these assets at
March 31, 1998, which approximates fair value, is $7,196, $20,422 and $501,
respectively. Receivables are sold daily at a discount rate based upon U.S.
federal funds plus 1/4%. Discounts included in interest expense were $1,949 in
fiscal 1996, $1,907 in fiscal 1997 and $1,858 in fiscal 1998. Accounts
receivable are recorded net of an allowance for doubtful accounts of $811 and
$182 at March 31, 1997 and 1998, respectively.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined
using the first-in, first-out (FIFO) method. The cost of inventory consists
principally of material, labor and associated overhead.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost and includes
expenditures which substantially increase the useful lives of the assets.
Depreciation is provided using the straight-line method over the estimated
useful lives of the assets as follows: 10 to 33 years for buildings and
improvements and 3 to 10 years for machinery and equipment. Depreciation
expense totaled $11,074, $10,044 and $11,164 for fiscal years 1996, 1997 and
1998, respectively. Maintenance and repairs are expensed as incurred. Interest
on capital projects is capitalized during the construction period and amounted
to $523, $688 and $431 in fiscal 1996, 1997 and 1998, respectively. Gains and
losses from dispositions or retirements of property, plant and equipment are
recognized currently.

F-15
<PAGE>

YUASA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS)

Intangible Assets

Identifiable intangible assets, such as purchased patents and trademarks,
are amortized using the straight-line method over their estimated useful
lives, which range from 7 to 25 years. Non-compete agreements are amortized
over the lives of the contracts (5 to 10 years) using the straight-line
method. Goodwill represents the excess of cost over the fair value of net
assets acquired resulting from business acquisitions. Management reviews the
carrying value of goodwill and other intangibles on an ongoing basis. When
factors indicate that an intangible asset may be impaired, management uses an
estimate of the undiscounted future cash flows over the remaining life of the
asset in measuring whether the intangible asset is recoverable. If such an
analysis indicates that impairment has in fact occurred, the book value of the
intangible asset is written down to its estimated fair value using discounted
cash flows.

Environmental Expenditures

Environmental expenditures that will benefit future operations are
capitalized; all other environmental expenditures are expensed as incurred.
Accruals are recorded when environmental expenditures for remedial efforts are
probable and the amounts can be reasonably estimated.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to temporary differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. These temporary differences are measured using enacted
tax rates expected to apply to taxable income in the years in which the
temporary differences are expected to be realized.

Valuation allowances are recorded to reduce deferred tax assets when it is
probable that a tax benefit will not be realized. The provision for income
taxes represents income taxes paid or payable for the current year and the
change in deferred taxes during the year.

Foreign Currency Translation

Results of foreign operations are translated into U.S. dollars using
average exchange rates during the period while assets and liabilities are
translated into U.S. dollars using current rates as of the balance sheet date.
The resulting translation adjustments are accumulated as a separate component
of shareholders' equity.

Transaction gains and losses resulting from exchange rate changes on
transactions denominated in currencies other than those of the foreign
subsidiaries are included in income in the year in which the change occurs.

Comprehensive Income

As of April 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 130 ("Statement 130"), Reporting Comprehensive Income. Statement
130 establishes new rules for the reporting and display of comprehensive
income and its components; however, the adoption of this Statement had no
impact on the Company's net income or Shareholders' equity. Statement 130
requires foreign currency translation adjustments and certain minimal pension
liability adjustments, which prior to adoption were reported separately in
Shareholders' equity, to be included in accumulated other comprehensive income
and added with net income to determine total comprehensive income which is
displayed in the Consolidated Statements of Changes in Shareholders' Equity.
Prior year financial statements have been reclassified to conform to the
requirements of Statement 130.

F-16
<PAGE>

YUASA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS)

Earnings per Share

In 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards 128 (SFAS 128), "Earnings Per Share." All
earnings per share amounts have been presented to conform to the SFAS 128
requirements.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

Accounting Standards Change

In March 1995, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 121 (SFAS 121), Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of. This standard specifies when assets should be reviewed for impairment, how
to determine if an asset is impaired, how to measure an impairment loss, and
what disclosures are necessary in the financial statements. The Company
adopted SFAS 121 on April 1, 1996 and recorded a pretax charge of $400 during
the year ended March 31, 1997.

New Accounting Pronouncements Not Yet Adopted

In June 1997, FASB issued Statement of Financial Accounting Standards No.
131 (SFAS 131), Disclosures about Segments of an Enterprise and Related
Information, which is effective for years beginning after December 15, 1997.
SFAS 131 establishes standards for the way that public businesses report
information about operating segments in annual financial statements and
requires that those businesses report selected information about operating
segments in interim financial reports. It also establishes standards for
related disclosures about products and services, geographic areas, and major
customers. The Company will adopt the new requirements for the fiscal year
ended March 31, 1999, which will require retroactive application. Management
has not completed its review of SFAS 131 and has not determined the impact
that the adoption will have on the Company's financial statements.

In March 1998, the AICPA issued SOP 98-1, Accounting For the Costs of
Computer Software Developed For or Obtained For Internal--Use. The SOP is
effective for the Company on April 1, 1999. The SOP will require the
capitalization of certain costs incurred after the date of adoption in
connection with developing or obtaining software for internal--use. The
Company currently capitalizes certain external costs and expenses all other
costs as incurred. The Company believes the SOP will not materially effect the
Company's earnings or financial position.

Financial Instruments

The Company's financial instruments recorded on the balance sheet include
cash, accounts and notes receivable, accounts payable and debt. Because of the
short maturity, the carrying amount of cash, accounts and notes receivable,
accounts payable and short-term debt approximates fair value. Fair value of
long-term debt is based on rates available to the Company for debt with
similar terms and maturities and is deemed to approximate book value.

2. BUSINESS COMBINATIONS:

On October 1, 1995, the Company sold its 51% interest in Arctic Yuasa-Exide
Company for $147 which resulted in a loss on sale of $127.

F-17
<PAGE>

YUASA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS)

Effective November 30, 1995, the Company paid $600 for the inventory and
fixed assets of Advanced Power Systems, Inc. (APS), a Pennsylvania corporation
in the business of installing and servicing certain telecommunications
equipment. The Company also paid two former owners of APS $900 for agreements
not to compete.

On July 1, 1996, the Company paid $350 for a 55% interest in Yuasa-Exide
Argentina, a joint venture in the business of manufacturing and marketing lead
acid batteries and related equipment.

On September 9, 1996, the Company paid $2,879 for the fixed assets and
inventory of H&R Metal Products Inc., a South Carolina corporation which
manufactures metal trays for certain battery types. The Company also entered
into non-compete and consulting agreements with the former owner of H&R Metal
Products Inc., whereby the Company is to make total payments of $300 and $400,
respectively over five years.

3. INVENTORIES:

Inventories consist of:

<TABLE>
<CAPTION>
March 31,
---------------
1997 1998
------- -------
<S> <C> <C>
Raw materials................................................ $10,650 $ 9,657
Work-in-process.............................................. 12,083 13,402
Finished goods............................................... 37,322 40,202
------- -------
$60,055 $63,261
======= =======
</TABLE>

Inventory reserves for obsolescence and other estimated losses were $625
and $725 at March 31, 1997 and March 31, 1998, respectively.

4. PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment consists of:

<TABLE>
<CAPTION>
March 31,
------------------
1997 1998
-------- --------
<S> <C> <C>
Land..................................................... $ 6,371 $ 6,378
Buildings and improvements............................... 42,760 43,588
Machinery and equipment.................................. 74,632 83,408
Construction in progress................................. 6,260 13,543
-------- --------
130,023 146,917
Less: Accumulated depreciation and amortization (52,542) (63,667)
-------- --------
Net property, plant and equipment........................ $ 77,481 $ 83,250
======== ========
</TABLE>

F-18
<PAGE>

YUASA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS)

5. INTANGIBLE ASSETS:

Intangible assets consist of:

<TABLE>
<CAPTION>
March 31,
------------------
1997 1998
-------- --------
<S> <C> <C>
Non-compete agreements................................... $ 21,254 $ 21,254
Proprietary technology................................... 8,679 8,679
Patents.................................................. 6,035 6,035
Tradenames and trademarks................................ 5,907 5,907
Goodwill and marketing rights............................ 2,388 2,388
-------- --------
44,263 44,263
Less: accumulated amortization........................... (19,925) (23,568)
-------- --------
Intangible assets........................................ $ 24,338 $ 20,695
======== ========
</TABLE>

6. ACCRUED EXPENSES

Accrued expenses consist of:

<TABLE>
<CAPTION>
March 31,
---------------
1997 1998
------- -------
<S> <C> <C>
Product warranty reserve.................................... $ 4,951 $ 5,397
Payroll and related benefits................................ 11,873 12,173
Interest.................................................... 1,233 1,256
Other....................................................... 11,980 13,684
------- -------
Accrued Expenses............................................ $30,037 $32,510
======= =======
</TABLE>

7. DEBT:

Short-Term Debt

Short-term debt consists primarily of borrowings associated with revolving
bank lines of credit. The Company had $27,300 and $13,465 in borrowings under
lines of credit and $70,700 and $61,535 in available but unused lines of
credit with banks at March 31, 1997 and 1998, respectively. These lines of
credit are renewed annually and are unsecured. Borrowings generally bear
interest at the federal funds rate plus a percentage which ranged between 0.3%
and 0.5% (weighted average of 5.9% and 6.2% at March 31, 1997 and 1998,
respectively).

F-19
<PAGE>

YUASA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS)

Long-Term Debt

<TABLE>
<CAPTION>
March 31,
---------------
1997 1998
------- -------
<S> <C> <C>
Unsecured loan payable in a lump-sum due December 10, 1998,
bearing interest at 7.90% fixed per annum................. $30,000 $30,000
Unsecured loan payable in semi-annual installments from
January 10, 1995 through July 10, 1999, bearing interest
at 7.37% fixed per annum.................................. 15,000 9,000
Mortgage loan payable in three annual installments through
December 20, 1998, bearing interest at 5.94% per annum.
Loan is secured by a first mortgage lien interest in the
Company's corporate headquarters.......................... 3,800 1,900
Loan payable in monthly installments through August 1,
2003, bearing interest at 3.00% fixed per annum. Loan is
secured by a second mortgage lien interest in the
Company's corporate headquarters.......................... 1,627 1,392
Unsecured loan payable in ten semi-annual installments from
May 10, 1998 through November 10, 2002, bearing interest
at a rate of LIBOR +.375% per annum (approximately 6.25%
at March 31, 1998)........................................ 10,000 10,000
Unsecured loan payable in ten semi-annual installments from
April 30, 1998 through October 30, 2002, bearing interest
at a rate of LIBOR +.375% per annum (approximately 6.25%
at March 31, 1998)........................................ 20,000 20,000
Unsecured loan payable in 20 quarterly installments of $500
from July 1, 2001 through April 1, 2006 bearing interest
at a fixed rate of 6.43%.................................. -- 10,000
------- -------
80,427 82,292
Less: Current Portion 8,133 14,140
------- -------
$72,294 $68,152
======= =======
</TABLE>

The Company paid $11,842, $9,985 and $10,075 for interest during fiscal
1996, 1997 and 1998 respectively. Aggregate maturities of long-term debt in
each of the five years after March 31, 1998 are as follows:

<TABLE>
<S> <C>
1999................................. $14,140
2000................................. 9,248
2001................................. 6,255
2002................................. 7,763
2003................................. 8,271
Thereafter........................... 6,615
-------
$52,292
=======
</TABLE>

Excluded from above is the $30,000 loan payable due December 10, 1998. The
Company has the ability and intent to enter into a financing agreement with a
bank to refinance the loan on a long-term basis. Repayment terms shall be
determined in November 1998; however, under no circumstances will repayment be
required prior to July 1, 1999.

Yuasa Corporation has guaranteed $39,000 of the Company's outstanding long-
term debt.

F-20
<PAGE>

YUASA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS)

The Company's financing agreements with certain of its lenders contain
various covenants which, absent prepayment in full of the indebtedness or the
receipt of waivers, would limit the Company's ability to conduct certain
specified business transactions including incurring debt, extending credit,
mergers, consolidations or similar transactions, buying or selling assets out
of the ordinary course of business, engaging in sale and leaseback
transactions and certain other actions. The Company believes it is presently
in full compliance with all such covenants. The Company intends to repay
certain of the indebtedness to which some of the foregoing covenants apply
using the net proceeds of the Offering (see Note 17). The Company sells
accounts receivable, on a continuous basis, to an asset-backed structured
finance conduit. The maximum amount available on this receivable financing was
$40.0 million at March 31, 1998.

As of March 31, 1998, under arrangements with certain banks, the Company
had $2,663 of standby letters of credit outstanding.

8. LOSS ON INVESTMENT:

During the year ended March 31, 1998, the Company recognized $4,005 in
losses associated with its investment in Tucker Telecommunications Company
(Tucker). Such losses consisted primarily of the cost of settling certain
guarantee obligations of Tucker related to the closing of its business during
the year and the write-off of all the Company's investment.

9. INCOME TAXES:

Earnings before income taxes consists of the following:

<TABLE>
<CAPTION>
Year Ended March 31,
---------------------
1996 1997 1998
------ ------ -------
<S> <C> <C> <C>
U.S. operations........................................ $1,837 $8,715 $13,652
Foreign operations..................................... 956 632 486
------ ------ -------
$2,793 $9,347 $14,138
====== ====== =======
</TABLE>

Income tax expense (benefit) comprises the following:

<TABLE>
<CAPTION>
Years Ended March 31,
-----------------------
1996 1997 1998
------- ------ ------
<S> <C> <C> <C>
Current:
Federal........................................... $ 2,435 $4,075 $5,748
State............................................. 1,057 364 538
Foreign........................................... -- 54 (11)
------- ------ ------
Total current................................... 3,492 4,493 6,275
------- ------ ------
Deferred:
Federal........................................... $(1,831) $ (235) $ (424)
State............................................. (157) (22) (21)
Foreign........................................... 10 -- --
------- ------ ------
Total deferred.................................. (1,978) (257) (445)
------- ------ ------
Income tax expense.................................. $ 1,514 $4,236 $5,830
======= ====== ======
</TABLE>

F-21
<PAGE>

YUASA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS)

Income taxes paid by the Company for the years ended March 31, 1996, 1997
and 1998 were $2,930, $3,454 and $3,618, respectively.

The following table sets forth the tax effects of temporary differences
that give rise to significant portions of the deferred tax assets and
liabilities:

<TABLE>
<CAPTION>
Years Ended March 31,
----------------------
1997 1998
---------- ----------
<S> <C> <C>
Deferred tax assets:
Accounts receivable.............................. $ 233 $ --
Inventories...................................... 766 900
Intangibles, principally due to differences in
amortization.................................... 1,158 1,309
Deferred gain.................................... 581 468
Net operating loss carryforwards................. 446 379
Accrued liabilities and other items.............. 4,876 5,211
---------- ----------
Gross deferred tax assets...................... 8,060 8,267
Valuation allowance............................ (252) (185)
---------- ----------
Net deferred tax assets.......................... 7,808 8,082
Deferred tax liabilities:
Accounts receivable.............................. 525
Intangibles, principally due to differences in
amortization.................................... 189 118
Plant and equipment, principally due to
differences in depreciation..................... 1,532 1,906
Prepaid expenses and other items................. 1,003 4
---------- ----------
Gross deferred tax liabilities................... 2,724 2,553
---------- ----------
Net deferred tax asset........................... $ 5,084 $ 5,529
========== ==========
</TABLE>

The Company has recorded a valuation allowance for net deferred tax assets
in foreign tax jurisdictions, primarily related to net operating loss
carryforwards, due to the significant losses incurred in these tax
jurisdictions in previous years.

A reconciliation of income taxes at the statutory rate to the income tax
provision is as follows:

<TABLE>
<CAPTION>
Years Ended March 31,
-----------------------
1996 1997 1998
------- ------- -------
<S> <C> <C> <C>
U.S. statutory income taxes (at 35%)............... $ 978 $ 3,271 $ 4,948
Increase (decrease) resulting from:
State income taxes, net of federal effect........ 142 229 336
Non-deductible intangible amortization and
other........................................... 330 263 357
Other............................................ 64 473 189
------- ------- -------
$ 1,514 $ 4,236 $ 5,830
======= ======= =======
</TABLE>

At March 31, 1998, the Company has not made provision for U.S. federal and
state income taxes on approximately $127 of foreign earnings which are
expected to be reinvested indefinitely. Upon distribution of those earnings in
the form of dividends or otherwise, the Company would be subject to U.S.
income taxes (subject to an adjustment for foreign tax credits) and
withholding taxes payable to the various foreign countries.

F-22
<PAGE>

YUASA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS)

10. PENSION PLANS:

The Company has noncontributory defined benefit pension plans covering
substantially all hourly employees. The benefits for these plans are based
primarily on stated amounts for each year of credited service. Company
contributions to these plans are made in accordance with applicable laws and
tax regulations. Plan assets consist of diversified investments in equity and
fixed income securities.

Net pension cost for the defined benefit plans of the Company includes the
following components:

<TABLE>
<CAPTION>
Years Ended March 31,
-------------------------
1996 1997 1998
------- ------- -------
<S> <C> <C> <C>
Service cost...................................... $ 323 $ 401 $ 520
Interest cost..................................... 171 257 314
Actual loss (return) plan assets.................. (263) (227) (717)
Net amortization and deferrals.................... 140 104 522
------- ------- -------
Net pension cost................................ $ 371 $ 535 $ 639
======= ======= =======
</TABLE>

The funded status of the defined benefit plans of the Company is as
follows:

<TABLE>
<CAPTION>
March 31,
----------------
1997 1998
------- -------
<S> <C> <C>
Actuarial present value of vested benefit obligation...... $(3,579) $(4,910)
======= =======
Accumulated benefit obligation............................ $(3,889) $(5,313)
======= =======
Actuarial present value of projected benefit obligation... $(3,889) $(5,313)
Plan assets at fair value................................. 2,894 4,196
------- -------
Plan assets less projected benefit obligation............. (995) (1,117)
Unrecognized prior service cost........................... 58 125
Unrecognized net loss..................................... 1,345 1,621
Additional minimum liability.............................. (1,403) (1,746)
------- -------
Accrued pension cost...................................... $ (995) $(1,117)
======= =======
</TABLE>

The projected benefit obligation (PBO) was determined using a discount rate
of 7.75% during fiscal 1997 and 7.0% during fiscal 1998. The PBO increased
mainly due to a change in the actuarial assumptions, principally the reduction
in the discount rate. The assumed long-term rate of return on plan assets was
9% in fiscal 1996, 1997 and 1998.

Substantially all salaried employees are eligible to participate in the
Salaried Retirement and 401(k) Plan.
Under this Plan, the Company contributes annually 4% of eligible employees'
salaries to a trust fund. In addition to the employer contribution, a salaried
employee may make voluntary contributions to the Plan of up to 12% of their
salary. During fiscal 1998, the voluntary contribution percentage was
increased from 12% to 15%. The Company is obligated to make additional
contributions, to the extent of the employee's participation in the Plan, of
25% of the amount contributed by the employee up to a maximum of 4% of the
employee's salary. The 401(k)

F-23
<PAGE>

YUASA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS)

program also allows for Company discretionary matching contributions. For
fiscal 1998, total Company contributions were 25% of the amount contributed by
the employee up to a maximum of 4% of the employee's salary. Employer
contributions made to the salaried retirement and 401(k) plan for fiscal 1996,
1997 and 1998 were $1,269, $1,167 and $1,270, respectively.

The Company provides all hourly-paid employees with at least one year of
eligible service at the Richmond, KY, Sumter, SC and Laureldale, PA
manufacturing facilities with an Hourly Savings Plan. Under this Plan an
employee may make voluntary contributions to the Plan of up to 12% of their
salary. The Company has the option, based on performance factors, to
contribute an amount equal to 25% of the amount contributed by the employee,
up to a maximum of 4% of the employee's salary. Employer contributions made to
the hourly savings plan for fiscal 1996, 1997 and 1998 were $69, $122 and
$116, respectively.

11. LEASES

The Company has entered into various capital lease arrangements in
connection with its Laureldale, PA and Hays, KS manufacturing facilities.
Payments under these arrangements are supported by letters of credit partially
guaranteed by Yuasa Corporation. The Company has also entered into capital
lease arrangements for certain computer equipment.

The following is an analysis of the leased property under capital leases by
major classes:

<TABLE>
<CAPTION>
March 31,
------------------
1997 1998
-------- --------
<S> <C> <C>
Classes of property
Land................................................... $ 232 $ 232
Building............................................... 4,474 4,474
Machinery and equipment................................ 11,463 11,463
-------- --------
16,169 16,169
Less: Accumulated depreciation......................... (13,373) (13,891)
-------- --------
$ 2,796 $ 2,278
======== ========
</TABLE>

Amortization relating to fixed assets under capital leases is included in
depreciation expense.

F-24
<PAGE>

YUASA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS)

The Company's future minimum lease payments under capital and operating
leases which have non-cancelable terms in excess of one year at March 31, 1998
are as follows:

<TABLE>
<CAPTION>
Lease Type
-----------------
Capital Operating
------- ---------
<S> <C> <C>
1999....................................................... $ 807 $ 4,049
2000....................................................... 430 3,830
2001....................................................... 9,688 2,268
2002....................................................... -- 1,611
Thereafter................................................. -- 3,009
------- -------
Total minimum payments................................... $10,925 $14,767
=======
Less: Interest at rates ranging from 4.0% to 9.7%.......... 1,008
-------
Present value of net minimum lease payments................ 9,917
Less: Current portion...................................... 389
-------
Long-term portion........................................ $ 9,528
=======
</TABLE>

Operating lease rental expense was $6,489, $6,786, and $7,431 for fiscal
1996, 1997, and 1998 respectively. Certain operating lease agreements contain
renewal or purchase options and/or escalation clauses.

12. RELATED PARTY TRANSACTIONS

The Company transacts business with several entities with which it is
related through common ownership. Summarized below are the Company's
transactions with related parties.

<TABLE>
<CAPTION>
Purchases Sales
Years Ended Years Ended
March 31, March 31,
----------------------- -----------------------
1996 1997 1998 1996 1997 1998
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Company
Exide(1)...................... $10,752 $ 6,888 $ 4,431 $19,965 $ 4,633 $ 3,793
Yuasa Corporation(2).......... 20,597 15,005 11,622 10,010 6,000 7,767
------- ------- ------- ------- ------- -------
$31,349 $21,893 $16,053 $29,975 $10,633 $11,560
======= ======= ======= ======= ======= =======
</TABLE>

The following balances with related parties are outstanding as of:

<TABLE>
<CAPTION>
Accounts Payable Accounts Receivable
March 31, March 31,
-------------------------------------
1997 1998 1997 1998
--------- ----------------- ---------
<S> <C> <C> <C> <C>
Company
Exide(1)................................ $ 702 $ 280 $ 1,053 $ 1,588
Yuasa Corporation(2).................... 480 511 969 1,450
--------- ------- --------- ---------
$ 1,182 $ 791 $ 2,022 $ 3,038
========= ======= ========= =========
</TABLE>

F-25
<PAGE>

YUASA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS)

Payment terms are generally the same as those extended to unrelated third
parties, and the balances are settled within the stated terms.

(1) The Company purchases lead, certain battery components and
administrative services from Exide. The Company sells certain finished
batteries to Exide. Transactions between the Company and Exide
approximate market prices.

(2) The Company purchases from and sells to Yuasa Corporation and its
affiliates certain finished batteries depending upon market demands.
Additionally, the Company purchases certain finished batteries, parts and
accessories from Yuasa Corporation and affiliates. Transactions between
the Company and Yuasa Corporation and affiliates approximate market
prices.

The Company incurred royalty expenses from Yuasa Corporation related to
sales of motorcycle and small stationary batteries. Royalty expenses for
fiscal 1996, 1997 and 1998 were $1,069, $1,497 and $1,601, respectively.
Royalties payable at March 31, 1997 and 1998 were $485 and $447, respectively,
which are included in accrued expenses.

Additionally, the Company incurred expenses from Yuasa Corporation of
approximately $250 per year for fiscal 1996, 1997, and 1998, related to the
reimbursement of Yuasa Corporation out-of-pocket expenses associated with
services provided to the Company.

In March 1998, the Company entered into a revolving credit facility for up
to $5 million with Yuasa Japan. Under this facility, Yuasa Japan may borrow,
repay and reborrow from the Company at any time until March 30, 1999. At March
31, 1998, no amounts were outstanding under this facility. This facility is
unsecured, matures in its entirety on March 31, 1999, and bears interest at a
rate approximately equal to the U.S. Federal funds rate plus 1%, payable
monthly.

13. COMMITMENTS AND CONTINGENCIES

The Company is involved in routine litigation incidental to the conduct of
its business, the results of which, in the opinion of management, are not
likely to be material to the Company's financial condition, results of
operations, or cash flows.

In order to ensure a steady supply of lead and to keep the cost of products
stable, the Company has entered into contracts with suppliers for the purchase
of lead. Each such contract is for a period not extending beyond one year.
Under these contracts, the Company was committed at March 31, 1998 to purchase
23.7 million pounds of lead for a total purchase price of $5,722.

14. CONCENTRATION OF CREDIT RISK

Financial instruments which subject the Company to potential concentration
of credit risk consist principally of trade accounts and notes receivable and
temporary cash investments. The Company places its

F-26
<PAGE>

YUASA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(IN THOUSANDS)

temporary cash investments with various financial institutions and, generally,
limits the amount of credit exposure to any one financial institution.
Concentrations of credit risk with respect to trade receivables is limited by
a large customer base and its geographic dispersion. The Company performs
ongoing credit evaluations of its customers' financial condition and requires
collateral, such as letters of credit, in certain circumstances.

15. QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- -------- --------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
1998
Net Sales.................................. $94,677 $91,795 $104,428 $105,417
Gross Profit............................... $20,157 $22,205 $ 22,841 $ 22,676
Net Earnings............................... $ 1,662 $ 2,992 $ 642 $ 3,012
Net Earnings per share (basic and
diluted).................................. $ .21 $ .37 $ .08 $ .37
1997
Net Sales.................................. $85,370 $85,821 $ 85,239 $101,096
Gross Profit............................... $15,574 $16,986 $ 17,121 $ 22,466
Net Earnings............................... $ 66 $ 899 $ 810 $ 3,336
Net Earnings per share (basic and
diluted).................................. $ .01 $ .11 $ .10 $ .41
</TABLE>

The results of operations for the third quarter of 1998 reflect a $4.0
million loss on its investment in Tucker. See Note 8.

16. CAPITAL STRUCTURE

Effective March 9, 1998, the Company was incorporated in the Commonwealth
of Pennsylvania as the holding company for its wholly-owned operating
subsidiary Yuasa-Exide, Inc. (Subsidiary). On March 26, 1998, the Company's
shareholders exchanged their shares of the Subsidiary for shares of Class B
Common Stock of the Company. The basis of the exchange was 1 share of the
Subsidiary common stock for 1,400 shares of the Company's Class B Common
Stock. All shares of Common Stock and per share amounts have been presented to
give retroactive effect to the formation of the Company.

17. INITIAL PUBLIC OFFERING

On March 30, 1998, the Company filed a registration statement on Form S-1
with the Securities and Exchange Commission in anticipation of a public
offering of common stock.

18. STOCK OPTIONS

In connection with the planned initial public offering, the Company's Board
of Directors and Shareholders approved the Omnibus Stock Plan (the Plan).
Under the Plan, awards denominated or payable in shares, options to purchase
shares of the Company's Class A Common Stock or stock appreciation rights may
be granted. A maximum of 5% of the total outstanding shares of Common Stock of
the Company following the initial public offering may be issued under the
Plan.

The Board of Directors and Shareholders approved, subject to successful
completion of the Company's Initial Public Offering, the granting of options
to purchase 589,000 shares of Class A Common Stock with an exercise price
equal to the Offering Price to the public.

F-27
<PAGE>

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AU-
THORIZED BY THE COMPANY, THE SELLING STOCKHOLDER OR THE UNDERWRITERS. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER
TO BUY, THE CLASS A COMMON STOCK IN ANY JURISDICTION WHERE, OR TO ANY PERSON
TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIV-
ERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUM-
STANCES, CREATE AN IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS
SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF.

---------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary....................................................... 4
Risk Factors............................................................. 9
Use of Proceeds.......................................................... 14
Dividend Policy.......................................................... 14
Capitalization........................................................... 15
Dilution................................................................. 16
Selected Consolidated Financial Information.............................. 17
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 19
Business................................................................. 29
Management............................................................... 41
Related Party Transactions............................................... 47
Principal and Selling Stockholders....................................... 50
Description of Capital Stock............................................. 51
Underwriting............................................................. 55
Legal Matters............................................................ 57
Experts.................................................................. 57
Change in Independent Accountants........................................ 57
Index to Financial Statements............................................ F-1
</TABLE>

UNTIL , 1998 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE CLASS A COMMON STOCK, WHETHER OR NOT PARTICIPAT-
ING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS DELIV-
ERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PRO-
SPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOT-
MENTS OR SUBSCRIPTIONS.

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

4,392,000 SHARES

[LOGO OF YUASA, INC. APPEARS HERE]

CLASS A COMMON STOCK

---------------

PROSPECTUS

---------------

Joint Lead Managers and Book-Runners

NOMURA SECURITIES INTERNATIONAL, INC.

SALOMON SMITH BARNEY

, 1998

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following expenses, other than the SEC registration fee, are estimated.
All expenses of this offering will be paid by the Company.

<TABLE>
<S> <C>
SEC registration fee........................................... $ 23,840
NASD filing fee................................................ $ 8,582
NYSE listing fee............................................... $ 84,600
Blue Sky fees and expenses..................................... $ 50,000
Transfer agent's and registrar's fees and expenses............. $ 50,000
Printing and engraving expenses................................ $ 50,000
Accounting fees and expenses................................... $ 300,000
Legal fees and expenses (other than Blue Sky fees and
expenses)..................................................... $ 200,000
Miscellaneous.................................................. $ 232,978
----------
Total........................................................ $1,000,000
==========
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 6.01 of Article VI of Registrant's By-Laws (Exhibit 3.2 hereto),
provide for the indemnification of its directors and officers under certain
circumstances and are incorporated herein by reference. The Pennsylvania
Business Corporation Law also provides for indemnification as set forth in
Section 145 thereof, which is incorporated herein by reference. The effect of
those provisions is to indemnify the directors and officers of the Registrant
against all costs, expenses and amounts of liability incurred by them in
connection with any action, suit or proceeding in which they are involved by
reason of their affiliation with the Registrant, to the fullest extent
permitted by law.

The Underwriting Agreement (Exhibit 1.1 hereto) contains certain provisions
pursuant to which the Underwriters have agreed to indemnify the Registrant,
its directors, each of the officers who signed the Registration Statement,
each person who controls the Registrant within the meaning of the Securities
Act of 1933, the Registrant's principal subsidiary, and each person who
controls the Registrant's principal subsidiary within the meaning of the
Securities Act of 1933.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

None.

II-1
<PAGE>

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits

<TABLE>
<C> <S>
1.1 Underwriting Agreement.**
3.1 Articles of Incorporation.**
3.2 Bylaws.**
5.1 Opinion of Stevens & Lee, P.C. re legality of shares.**
10.1 1998 Yuasa, Inc. Omnibus Stock Plan.**
10.2 Covenant Not to Compete between Yuasa Battery (America), Inc. and Exide
Corporation dated June 10, 1991.**
10.3 License and Technical Assistance Agreement dated May 19, 1998 between
Yuasa, Inc. and Yuasa Corporation (Japan).**
10.4 Agreement Not to Compete dated May 1998 between Yuasa, Inc. and Yuasa
Corporation (Japan).**
10.5 Securitization Agreement dated as of March 16, 1998 among YESCO, Inc.,
Prominent Funding Corporation, Yuasa Exide, Inc., and The Sakura Bank,
Limited.**
10.6 Receivables Transfer Agreement dated as of March 16, 1998 between Yuasa
Exide, Inc. and YESCO, Inc.**
10.7 Financing Agreements and Related Notes between Yuasa Exide, Inc. and
various lenders.**
10.8 Trademark and Tradename License Agreement dated June 10, 1991 between
Yuasa Battery (America), Inc. and Exide Corporation.**
16.1 Letter of Price Waterhouse LLP re change in accountants.**
21. Subsidiaries of Yuasa, Inc.**
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Stevens & Lee (included in Exhibit 5.1).**
23.3 Consent of Ernst & Young LLP.
24. Power of Attorney (contained as part of signature page).**
27.1 Financial Data Schedule.**
</TABLE>
- --------
** Previously filed.

(b) Financial Statement Schedules and Related Reports

Schedule II
Valuation and Qualifying Accounts

ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred

II-2
<PAGE>

or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

II-3
<PAGE>

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS AMENDMENT NO. 4 TO REGISTRATION STATEMENT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF
READING, COMMONWEALTH OF PENNSYLVANIA, ON OCTOBER 26, 1998.

Yuasa, Inc.

/s/ P. Michael Ehlerman*
By: _________________________________
P. MICHAEL EHLERMAN,
PRESIDENT

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 4 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATE INDICATED.

SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>

/s/ Teruhisa Yuasa* Chairman of the October 26, 1998
- ------------------------------------- Board; Director
TERUHISA YUASA

/s/ P. Michael Ehlerman* Vice Chairman and October 26, 1998
- ------------------------------------- CEO; Director
P. MICHAEL EHLERMAN, INDIVIDUALLY (Principal
AND AS ATTORNEY IN FACT Executive Officer)

/s/ Michael T. Philion Vice President-- October 26, 1998
- ------------------------------------- Finance, CFO
MICHAEL T. PHILION (Principal
Financial Officer)

/s/ Raymond J. Grzybowski* Controller October 26, 1998
- ------------------------------------- (Principal
RAYMOND J. GRZYBOWSKI Accounting Officer)

/s/ John D. Craig* President and Chief October 26, 1998
- ------------------------------------- Operating Officer;
JOHN D. CRAIG Director

/s/ Hiroshi Horiuchi* Vice President-- October 26, 1998
- ------------------------------------- Export and
HIROSHI HORIUCHI Secretary; Director
</TABLE>
<PAGE>

SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Arthur M. Hawkins* Director October 26, 1998
- -------------------------------------
ARTHUR M. HAWKINS

/s/ Yasukazu Sakai* Director October 26, 1998
- -------------------------------------
YASUKAZU SAKAI

/s/ Shuji Kawata* Vice President-- October 26, 1998
- ------------------------------------- International;
SHUJI KAWATA Director

/s/ James Kanda* Director October 26, 1998
- -------------------------------------
JAMES KANDA

/s/ Raymond J. Kenny* Director October 26, 1998
- -------------------------------------
RAYMOND J. KENNY

/s/ Michael T. Philion Attorney-in-Fact
*By _________________________________
MICHAEL T. PHILION
</TABLE>
<PAGE>

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
(A)
Column A Column B Column C Column D Column E
-------- ---------- ---------- ---------- ---------
Additions
Balance at Charged to Balance
Beginning Costs and at End of
Description of Period Expenses Deductions Period
----------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Valuation Accounts Deducted in the
Consolidated Balance Sheet from
the Assets to which They Apply:
Year ended March 31, 1998:
Allowance for doubtful accounts.. 811 366 995 182
Allowance for inventory losses... 625 1,750 1,650 725
Year Ended March 31, 1997:
Allowance for doubtful accounts.. 704 398 291 811
Allowance for inventory losses... 627 1,499 1,501 625
Year Ended March 31, 1996:
Allowance for doubtful accounts.. 778 38 112 704
Allowance for inventory losses... 200 1,470 1,043 627
</TABLE>
- --------

(A) The deduction in the allowance for doubtful accounts for the year ended
March 31, 1998 includes $739 related to accounts receivable sold to a
qualifying special-purpose entity. This deduction is not reflected in
income for the year, rather it is accounted for as a component of the
carrying value of the residual interest, note receivable and interest only
strip related to the qualifying special-purpose entity discussed above. See
Note 1 of the Notes to the Consolidated Financial Statements for a further
discussion of this matter.

<PAGE>

EXHIBIT 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Prospectus constituting part of Amendment
No. 4 to the Registration Statement on Form S-1 of our report dated May 27,
1997, except for Note 16, which is as of March 26, 1998, relating to the
consolidated financial statements of Yuasa, Inc., which appears in such
Prospectus. We also consent to the application of such report to the Financial
Statement Schedule for the two years ended March 31, 1997, listed under Item
16(b) of this Registration Statement when the schedule is read in conjunction
with the financial statements referred to in our report. The audits referred to
in such report also included this schedule. We also consent to the reference to
us under the heading "Experts" in such Prospectus.

PRICEWATERHOUSECOOPERS LLP

Philadelphia, PA

October 21, 1998

<PAGE>

EXHIBIT 23.3

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the reference to our firm under the caption "Experts" and to
the use of our report dated May 6, 1998, in Amendment No. 4 to the Registration
Statement (Form S-1 No. 333-48881) and related Prospectus of Yuasa, Inc. for
the registration of 4,392,000 shares of its common stock.

Ernst & Young llp

Harrisburg, Pennsylvania

October 21, 1998

<PAGE>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF YUASA INC. FOR THE THREE MONTHS ENDED JUNE
29, 1997 AND THE THREE MONTHS ENDED JUNE 28, 1998 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> MAR-31-1998 MAR-31-1999
<PERIOD-START> APR-01-1997 APR-01-1998
<PERIOD-END> JUN-29-1997 JUN-28-1998
<CASH> 9,281 7,898
<SECURITIES> 0 0
<RECEIVABLES> 35,761 39,632
<ALLOWANCES> 890 878
<INVENTORY> 64,929 65,670
<CURRENT-ASSETS> 113,701 118,023
<PP&E> 131,699 152,861
<DEPRECIATION> 55,293 66,527
<TOTAL-ASSETS> 217,831 228,712
<CURRENT-LIABILITIES> 97,994 109,434
<BONDS> 0 0
0 0
0 0
<COMMON> 81 81
<OTHER-SE> 35,736 42,630
<TOTAL-LIABILITY-AND-EQUITY> 217,831 228,712
<SALES> 94,677 98,864
<TOTAL-REVENUES> 94,677 98,864
<CGS> 74,520 76,097
<TOTAL-COSTS> 74,520 76,097
<OTHER-EXPENSES> 14,574 15,422
<LOSS-PROVISION> 77 100
<INTEREST-EXPENSE> 2,517 2,464
<INCOME-PRETAX> 2,874 4,631
<INCOME-TAX> 1,212 1,888
<INCOME-CONTINUING> 1,662 2,743
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 1,662 2,743
<EPS-PRIMARY> 0.21 0.34
<EPS-DILUTED> 0.21 0.34

</TABLE>