Hayes Lemmerz Reports 2005 Fiscal Year End Results in Line with Prior Guidance; Adequate Liquidity Maintained
11 April 2006 - 11:00PM
PR Newswire (US)
NORTHVILLE, Mich., April 11 /PRNewswire-FirstCall/ -- Hayes Lemmerz
International, Inc. (NASDAQ:HAYZ) today reported financial results
for its fiscal year ended January 31, 2006. The results were in
line with guidance the Company provided to investors in December
2005, when it released fiscal third quarter results. For the fiscal
year, the automotive wheels and components maker reported sales of
$2.28 billion, up 6.6% from sales of $2.14 billion in the prior
fiscal year. Loss from operations, excluding one-time impairment
charges, for fiscal 2005 was $14.9 million, compared to earnings
from operations, excluding one-time impairment charges, of $22.0
million a year earlier. Adjusted EBITDA for fiscal 2005 was $185.4
million, down from $223.9 million a year earlier. Capital
expenditures for the fiscal year were $123.5 million, down from
$156.2 million a year earlier. The Company reported a net loss of
$461.9 million for fiscal 2005, compared to a net loss of $62.3
million for fiscal 2004. The Company also reported non-cash charges
of approximately $185.5 million for the impairment of goodwill and
$195.0 million for the impairment of other long-lived assets.
Excluding the one-time impairment charges, the net loss was $81.4
million compared to a $60.1 million net loss a year earlier.
"During this very challenging business environment we remain
focused on implementing our strategic plan, which emphasizes
streamlining and improving our business in higher-cost regions,
investing in process and product innovations like our new Flex(TM)
wheel, and expanding capacity in low-cost countries close to our
broad international customer base," said Curtis Clawson, President,
CEO and Chairman of the Board of Hayes Lemmerz. In accordance with
these initiatives, the Company has combined its North American
Wheel and International Wheel business units, creating a Global
Wheel Group, and has consolidated its Suspension Components
business unit and its Automotive Brake and Powertrain Components
business unit, creating an Automotive Components Group. The Company
will also close its Huntington, Indiana, aluminum wheel plant in
2006 and reduce employee wage and benefit costs, primarily for its
U.S. locations. The Company estimates annual savings from these
actions will total approximately $35 million. "Our dependence on
the North American automotive market continues to decrease, with
approximately 54% of our sales now being generated outside of North
America. This past year, we completed important strategic
expansions in plants located in the Czech Republic, Brazil, Mexico,
Turkey and Thailand. We believe that these expansion efforts
position us well for future growth," said Mr. Clawson. "We have a
strong market position and enjoy customer relationships with every
major auto manufacturer. We secured over $325 million in new and
carry over business during fiscal 2005. We are winning
internationally with Japanese and Korean OEM's, and we continue to
secure business with Japanese customers in North America," Mr.
Clawson said. "Our steel wheel business is number one globally, and
our international aluminum wheel business is growing rapidly -- up
11% in unit volume in 2005," he said. "The U.S. market for aluminum
wheels is showing strong demand for large specialty wheels, but
flat demand and overcapacity for small wheels," Mr. Clawson said.
In response to these conditions, the Company has reduced capacity
in the U.S. for small wheel production and expanded production of
large specialty wheels at its Gainesville, Georgia plant. The
Company maintained liquidity at year end of $124 million through
the sale of non-core assets, reducing capital expenditures,
reducing inventory and the completion of an accounts receivable
financing program in Germany. The Company also recently announced
that that it has amended its $625 million senior secured credit
facility. Among other changes, the amendment favorably modifies
certain financial covenants and provides the Company with
additional financial flexibility to execute its strategy of product
leadership and growth in select geographic regions. In 2006, the
Company will continue its focus on improving free cash flow and
reducing capital expenditures, which are targeted at less than $100
million. The Company expects sales for 2006 to be approximately $2
billion, primarily due to reductions in North American volumes. The
Company expects adjusted EBITDA and free cash flow to improve in
2006 versus 2005. Use of Non-GAAP Financial Information 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 asset impairment losses and other restructuring charges,
reorganization items and 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. 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. In addition,
incentive compensation for management is based on Adjusted EBITDA.
Free cash flow is defined as cash from operating activities minus
capital expenditures plus cash from discontinued operations and the
sale of assets. Conference Call Hayes Lemmerz will host a telephone
conference call to discuss the Company's fiscal year 2005 financial
results today, Tuesday, April 11, 2006, at 10:00 a.m. (ET). To
participate by phone, please dial (888) 295-5935 from the United
States and Canada or (706) 643-7483 from outside the United States,
10 minutes prior to the call. Callers should ask to be connected to
Hayes Lemmerz earnings conference call, Conference ID#6701974. The
conference call will be accompanied by a slide presentation, which
can be accessed 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 11:30 a.m. (ET), April
11, 2006 until 11:59 p.m. (ET), April 18, 2006, by calling (800)
642-1687 (within the United States and Canada) or (706) 645-9291
(for international calls). Please refer to Conference ID#6701974.
An audio replay of the call is expected to be available on the
Company's website beginning Thursday, April 13, 2006.
Forward-Looking Statements 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 Annual
Report on Form 10-K and other 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. About Hayes Lemmerz International, Inc. Hayes
Lemmerz International, Inc. is a world leading global supplier of
automotive and commercial highway wheels, brakes, powertrain,
suspension, structural and other lightweight components. The
Company has 35 facilities and approximately 10,000 employees
worldwide. HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in millions, except
per share amounts) Unaudited Twelve Months Twelve Months Ended
Ended January 31, 2006 January 31, 2005 Net sales $2,277.2 $2,137.0
Cost of goods sold 2,103.0 1,946.5 Gross profit 174.2 190.5
Marketing, general and administrative 164.2 156.4 Amortization of
intangible assets 17.3 13.8 Asset impairments and other
restructuring charges 203.3 9.2 Goodwill impairment 185.5 - Other
(income) expense, net (0.7) (8.7) Earnings from operations (395.4)
19.8 Interest expense, net 65.9 43.6 Other non-operating (income)
expense 0.8 1.7 Loss on early extinguishment of debt - 12.2 Loss
before taxes on income, minority interest, cumulative effect of
change in accounting principle and extraordinary gain (462.1)
(37.7) Income tax expense 3.2 18.7 Loss before minority interest,
cumulative effect of change in accounting principle and
extraordinary gain (465.3) (56.4) Minority interest 7.2 9.1 Loss
before cumulative effect of change in accounting principle and
extraordinary gain (472.5) (65.5) Discontinued operations: Income
(loss) from discontinued operations, net of tax of $1.5 2.0 0.6
Gain of sale of discontinued operations, net of tax of $3.8 8.6 -
Gain from discontinued operations, net of tax 10.6 0.6 Cumulative
effect of change in accounting principle, net of tax $0.0 and 0.8,
respectively - 2.6 Net loss $(461.9) $(62.3) Basic and diluted:
Loss from continuing operations before cumulative effect of change
in accounting principle and extraordinary gain $(12.47) $(1.75)
Income (loss) from discontinued operations, net of tax of $1.5 0.05
0.02 Gain on sale of discontinued operations, net of tax of $3.8
0.23 - Cumulative effect of change in accounting principle, net of
tax - 0.07 Net (loss) income $(12.19) $(1.66) Weighted average
shares outstanding (in millions) 37.9 37.6 HAYES LEMMERZ
INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE
SHEETS (Dollars in millions) Unaudited Actual Actual January 31,
2006 January 31, 2005 ASSETS Total current assets 602.5 613.0
Property, and plant equipment, net 758.1 971.1 Other long term
assets 438.6 706.1 Total assets $1,799.2 $2,290.2 LIABILITIES AND
STOCKHOLDERS' EQUITY Total current liabilities 412.5 405.8
Long-term debt, net of current portion 684.3 631.1 Other long term
liabilities 476.3 506.5 Series A Warrants and Series B Warrants -
0.5 Redeemable preferred stock of subsidiary 12.1 11.3 Minority
interest 35.1 33.7 Stockholders' equity 178.9 701.3 Total
liabilities and stockholders' equity $1,799.2 $2,290.2 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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