NORTHVILLE, Mich., Sept. 8 /PRNewswire-FirstCall/ -- Hayes Lemmerz
International, Inc. (HAYZ) today reported that sales for the fiscal
second quarter ended July 31, 2005 rose 9.8 percent to $584.3
million from $532.1 million for the same period last year, helped
by higher international volumes, partial recovery from customers of
increased steel prices and favorable foreign exchange rates. The
Company reported a loss from operations for the fiscal second
quarter of $47.1 million, primarily due to asset impairment
charges, compared to earnings from operations of $9.6 million for
the second quarter last year. For the second quarter, the Company
reported a net loss of $70.3 million, or $1.85 per share, compared
with a year earlier loss of $9.8 million, or 26 cents per share.
For the six months ended July 31, 2005, Hayes Lemmerz reported
sales of $1.2 billion, an increase of 6.8 percent from $1.1 billion
a year earlier. For the six months, the Company reported a loss
from operations of $32.3 million, compared with a year earlier
profit from operations of $37.8 million. The net loss for the six
month period was $78.0 million, compared with a year earlier net
loss of $8.7 million. The loss from operations and net loss for the
second quarter reflect asset impairment and other restructuring
charges of $33.0 million, of which $30.0 million arose from an
asset impairment charge related to the Company's Cadillac, Michigan
iron foundry, which makes engine manifolds, steering knuckles, and
other cast components. The Company is currently evaluating its
options for the facility, including the possible sale or closure of
the facility. "This was an extremely challenging quarter for us in
North America. North American volumes for key platforms were lower
than last year, reducing sales and profits," said Curtis Clawson,
President, CEO and Chairman of the Board of Hayes Lemmerz.
"Additionally, the Company incurred a number of one-time costs
associated with impairment charges and additional costs for
previously announced facilities closures," he said. "However, we
remain focused on implementing our strategic plan, which emphasizes
restructuring unprofitable operations, investing in cost-efficient
manufacturing technologies, and expanding capacity in low-cost
countries close to our broad international customer base," he said.
Hayes Lemmerz expects the second half of the year will show
improved results compared with the first half because of recently
completed expansions in aluminum wheel making capacity in plants
located in the United States (Gainesville, Georgia), the Czech
Republic, Brazil, Thailand, Mexico and South Africa. The Company's
total liquidity as of July 31, 2005, was $129 million, consisting
of cash, availability under its revolving credit facility, and
availability under its North American accounts receivable
securitization facility. To enhance liquidity, the Company entered
into a capital lease agreement for certain production equipment
from which it received approximately $15 million in the second
quarter and expects to receive an additional $8 million in the
second half. The Company is also in the process of negotiating a
European receivables financing program, which is expected to
increase liquidity by roughly $25 million if successfully
completed, and is continuing to pursue the divestiture of its
Commercial Highway Hubs and Drums business, which may improve
liquidity by $10-15 million, as well as reduce debt. The Company
also revised its guidance and outlook for 2005. The Company expects
total revenue to be approximately $2.3 billion to $2.4 billion
(unchanged from prior guidance) and Adjusted EBITDA(1) to be
approximately $190 million to $205 million (revised from prior
guidance of $220 million to $235 million). Free cash flow(2),
excluding the impact of securitization, is expected to be between
negative $45 million and negative $60 million for the full year,
but is expected to be positive in the second half of 2005,
reflecting reduced working capital investment, lower capital
expenditures, and asset sale proceeds. Hayes Lemmerz International,
Inc. (NASDAQ:HAYZ) announced that it will host a telephone
conference call to discuss the Company's fiscal year 2005 second
quarter financial results today, Thursday, September 8, 2005, at
10:00 a.m. (ET). To participate by phone, please dial 10 minutes
prior to the call: (800) 399-3882 from the United States and
Canada; and (706) 643-7483 from outside the United States. Callers
should ask to be connected to Hayes Lemmerz earnings conference
call, Conference ID#8307804. The conference call will be
accompanied by a slide presentation, which can be accessed that
morning through the Company's web site, in the Investor Kit
presentations section at
http://www.hayes-lemmerz.com/investor_kit/html/presentations.html A
replay of the call will be available from 1:00 p.m. (ET), September
8, 2005 until 11:59 p.m. (ET), September 15, 2005, by calling (800)
642-1687 (within the United States and Canada) or (706) 645-9291
(for international calls). Please refer to Conference ID#8307804.
An audio replay of the call is expected to be available on the
Company's website beginning Tuesday, September 13, 2005. Hayes
Lemmerz International, Inc. is a leading global supplier of
automotive and commercial highway wheels, brakes, powertrain,
suspension, structural and other lightweight components. The
Company has 40 facilities and has approximately 11,000 employees
worldwide. (1) Adjusted EBITDA, a measure used by management to
measure operating performance, is defined as earnings from
operations plus depreciation and amortization. Adjusted EBITDA is
defined as EBITDA further adjusted to exclude: (i) asset impairment
losses and other restructuring charges; (ii) reorganization items;
and (iii) other items. Management references these non-GAAP
financial measures frequently in its decision making because they
provide supplemental information that facilitates internal
comparisons to historical operating performance of prior periods
and external comparisons to competitors' historical operating
performance. Adjusted EBITDA is not a recognized term under GAAP
and does not purport to be an alternative to earnings from
operations as an indicator of operating performance or to cash
flows from operating activities as a measure of liquidity. Because
not all companies use identical calculations, these presentations
of Adjusted EBITDA may not be comparable to other similarly titled
measures of other companies. Additionally, Adjusted EBITDA is not
intended to be a measure of free cash flow for management's
discretionary use, as it does not consider certain cash
requirements such as interest payments, tax payments and debt
service requirements. Institutional investors generally look to
Adjusted EBITDA in measuring performance, among other things. The
Company uses Adjusted EBITDA to facilitate quantification of
planned business activities and enhance subsequent follow-up with
comparisons of actual to planned Adjusted EBITDA. The Company is
disclosing these non-GAAP financial measures in order to provide
transparency to investors. (2) Free Cash Flow is used by management
as a non-GAAP financial measure because it identifies the amount of
cash available to meet principal debt amortization requirements,
pay dividends to stockholders, or make corporate investments. This
press release includes forward looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934, as amended, which
represent the Company's expectations and beliefs concerning future
events that involve risks and uncertainties which could cause
actual results to differ materially from those currently
anticipated. All statements other than statements of historical
facts included in this release are forward looking statements.
Factors that could cause actual results to differ materially from
those expressed or implied in such forward looking statements
include the factors set forth in our periodic reports filed with
the SEC. Consequently, all of the forward looking statements made
in this press release are qualified by these and other factors,
risks, and uncertainties. HAYES LEMMERZ INTERNATIONAL, INC. AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in
millions, except per share amounts) Unaudited Three Months Ended
Three Months Ended July 31, 2005 July 31, 2004 Net sales $584.3
$532.1 Cost of goods sold 544.8 482.5 Gross profit 39.5 49.6
Marketing, general, and administrative 46.9 40.1 Asset impairments
and other restructuring charges 33.0 0.9 Other (income) expense,
net 6.7 (1.0) Earnings (loss) from operations (47.1) 9.6 Interest
expense, net 16.5 12.7 Other non-operating expense 0.2 0.2 Loss
before taxes on income and minority interest (63.8) (3.3) Income
tax expense 4.0 4.9 Loss before minority interest (67.8) (8.2)
Minority interest 2.5 1.6 Net loss $(70.3) $(9.8) Loss per common
share data Basic and diluted: Net loss $(1.85) $(0.26) Weighted
average shares outstanding (in millions) 37.9 37.8 HAYES LEMMERZ
INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
OPERATIONS (Dollars in millions, except per share amounts)
Unaudited Six Months Ended Six Months Ended July 31, 2005 July 31,
2004 Net sales $1,202.3 $1,126.1 Cost of goods sold 1,100.6 1,002.2
Gross profit 101.7 123.9 Marketing, general, and administrative
90.7 83.2 Asset impairments and other restructuring charges 33.8
3.3 Other (income) expense, net 9.5 (0.4) Earnings (loss) from
operations (32.3) 37.8 Interest expense, net 31.2 22.2 Other
non-operating expense 0.4 0.2 Loss on early extinguishment of debt
- 12.2 Earnings (loss) before taxes on income, minority interest,
and cumulative effect of change in accounting principle (63.9) 3.2
Income tax expense 9.0 10.7 Loss before minority interest and
cumulative effect of change in accounting principle (72.9) (7.5)
Minority interest 5.1 3.8 Loss before cumulative effect of change
in accounting principle (78.0) (11.3) Cumulative effect of change
in accounting principle, net of tax of $0.8 - (2.6) Net loss
$(78.0) $(8.7) Loss per common share data Basic and diluted: Loss
before cumulative effect of change in accounting principle $(2.06)
$(0.30) Cumulative effect of change in accounting principle, net of
tax of $0.8 - (0.07) Net loss $(2.06) $(0.23) Weighted average
shares outstanding (in millions) 37.9 37.3 HAYES LEMMERZ
INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE
SHEETS (Dollars in millions) Unaudited July 31, 2005 January 31,
2005 ASSETS Current assets: Cash and cash equivalents $38.5 $35.2
Receivables 271.3 241.4 Other Receivables 79.8 77.0 Inventories
221.2 212.6 Prepaid expenses and other current assets 29.2 29.3
Total current assets 640.0 595.5 Property, plant, and equipment,
net 926.9 1,000.3 Goodwill 385.4 417.9 Intangible assets, net 215.1
233.3 Other assets 60.1 55.0 Total assets $2,227.5 $2,302.0
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Bank
borrowings and other notes $0.5 $0.6 Current portion of long-term
debt 7.7 10.5 Accounts payable and accrued liabilities 405.4 405.3
Total current liabilities 413.6 416.4 Long-term debt, net of
current portion 721.1 631.1 Pension and other long-term liabilities
484.3 507.7 Series A warrants and Series B warrants 0.3 0.5
Redeemable preferred stock of subsidiary 11.7 11.3 Minority
interest 33.5 33.7 Stockholders' equity 563.0 701.3 Total
liabilities and stockholders' equity $2,227.5 $2,302.0 HAYES
LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED
CASH FLOW STATEMENT (Dollars in millions) Unaudited Six Months
Ended Six Months Ended July 31, 2005 July 31, 2004 Cash flows from
operating activities: Net loss $(78.0) $(8.7) Adjustments to
reconcile net loss to net cash provided by operations: Depreciation
and amortization 91.0 86.0 Amortization of deferred financing fees
and accretion of discount 3.8 1.9 Interest income resulting from
fair value adjustment of Series A Warrants and Series B Warrants
(0.2) (5.2) Change in deferred income taxes (11.9) (1.9) Asset
impairments 30.8 - Minority interest 5.1 3.8 Subsidiary preferred
stock dividends accrued 0.4 0.4 Equity compensation expense 2.9 3.2
Loss on early extinguishment of debt - 12.2 (Gain) loss on disposal
of assets and businesses 3.4 (0.3) Changes in operating assets and
liabilities that increase (decrease) cash flows: Receivables (41.4)
(5.2) Other receivables (2.8) - Inventories (15.1) (12.5) Prepaid
expenses and other (8.6) (1.9) Accounts payable and accrued
liabilities 3.0 (5.9) Payments related to Chapter 11 filings -
(1.1) Cash provided by (used for) operating activities $(17.6)
$64.8 Cash flows from investing activities: Purchase of property,
plant, equipment, and tooling (68.1) (72.0) Proceeds from sale of
assets (0.1) 1.9 Cash used for investing activities (68.2) (70.1)
Cash flows from financing activities: Changes in bank borrowings
and credit facilities (0.1) 0.6 Net proceeds from issuance of
common stock - 117.0 Redemption of Senior Notes, net of discount
and related fees - (96.7) Repayment of Term Loan B, net of related
fees (72.7) (16.0) Borrowings from Term Loan C 150.0 - Repayment of
long-term debt 12.3 (5.4) Repayment of notes payable issued in
connection with purchases of businesses - (13.1) Cash provided by
(used for) financing activities 89.5 (13.6) Effect of exchange rate
changes on cash and cash equivalents (0.4) (0.8) Increase
(decrease) in cash and cash equivalents 3.3 (19.7) Adjustment for
the elimination of the one month lag - 1.4 Cash and cash
equivalents at beginning of period 35.2 48.5 Cash and cash
equivalents at end of period $38.5 $30.2 DATASOURCE: Hayes Lemmerz
International, Inc. CONTACT: Marika P. Diamond of Hayes Lemmerz
International, Inc., +1-734-737-5162 Web site:
http://www.hayes-lemmerz.com/
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