Hayes Lemmerz Posts Second Quarter Earnings with Improved Adjusted EBITDA, Completion of Balance Sheet Restructuring, and Reaffi
06 September 2007 - 10:40PM
PR Newswire (US)
NORTHVILLE, Mich., Sept. 6 /PRNewswire-FirstCall/ -- Hayes Lemmerz
International, Inc. (NASDAQ:HAYZ) today reported that sales for the
fiscal second quarter ended July 31, 2007 were $570.3 million, up
19% from $480.8 million in the year earlier quarter. The sales
increase came from strong international steel and aluminum wheel
sales, metals cost recovery and favorable currency fluctuations,
the Company said. For the fiscal second quarter, the Company
reported Adjusted EBITDA of $48.5 million, up $6.6 million from
$41.9 million a year earlier, and a loss from operations of $4.8
million, compared with year earlier earnings from operations of
$7.4 million. "We continue our strategy of restructuring our
business, executing our operating plan, and extending the lead in
our global wheel business," said Curtis J. Clawson, President, CEO
and Chairman of the Board. As part of the Company's ongoing
restructuring efforts, Hayes Lemmerz reached important milestones
in the second quarter that significantly improve its long-term
outlook, while imposing one-time transaction costs. "We greatly
strengthened our balance sheet by raising $193.1 million through an
equity rights offering and a direct equity investment, and paying
down $130.8 million of long term debt," said Mr. Clawson. The
balance sheet restructuring, which included the rights offering,
new senior credit facilities totaling approximately $495 million,
and euro 130 million (approximately $175 million) of 8-1/4% senior
unsecured notes issued by a European subsidiary, "improved our
liquidity by $80 million, will generate interest cost savings of
approximately $24 million annually, and extends all significant
debt maturities until 2013 or later," Mr. Clawson said. The Company
also continues to focus on its core capabilities. On June 29 it
sold its MGG subsidiary in Europe, whose three facilities in
Belgium and the Netherlands produce aluminum components, and
accounted for about $140 million of sales annually. On July 5, the
Company completed the sale of its aluminum components facility in
Wabash, IN, which contributed about $60 million of annual sales.
Hayes Lemmerz realized $15 million net cash from the sale of the
two operations, while booking a $40 million non-cash charge related
to the sales. Mr. Clawson noted that Hayes Lemmerz "continues to
execute its operating plan by winning new business from
international automakers whose business is growing, and continues
to rely less on the Big Three U.S. automakers." Hayes Lemmerz
expects 44% of its sales in 2007 will come from leading-cost
regions, and 50% to 55% in 2008, compared with only 35% in 2004, he
said. "We are continuing to extend the lead in wheels with
international expansion in leading-cost regions," Mr. Clawson said.
"Continuing to invest in leading-cost international markets is
reflected in our improving profitability," he said; earnings from
global wheel operations were almost double for the first half of
2007 compared with the first half of 2005. Including impairment
charges, the Company reported a loss from continuing operations of
$61.2 million, including a $21.2 million charge related to early
extinguishment of debt, compared with a loss from operations of
$28.9 million in the year earlier quarter. The Company also
reported a $25.9 million loss from discontinued operations compared
to a profit from discontinued operations of $2.0 million a year
earlier, resulting in a net loss of $87.1 million in the recent
second quarter, compared with a year earlier loss of $26.9 million.
Free cash flow for the second quarter, excluding the effects of the
Company's accounts receivables securitization program, was negative
$13.8 million, essentially the same as in the second quarter of
second 2006. The Company also reaffirmed its earnings guidance for
the full fiscal year 2007, which was updated May 15, 2007. The
Company expects revenue of approximately $2.2 billion for the
fiscal year ending January 31, 2008. Adjusted EBITDA is expected to
be in the range of $200 million to $210 million. The Company
expects positive free cash flow (excluding securitization impact).
Capital expenditures for the fiscal year are expected to be between
$90 million to $95 million. 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. Management uses
free cash flow to identify the amount of cash available to meet
debt amortization requirements, pay dividends to stockholders or
make corporate investments. Conference Call Hayes Lemmerz
International, Inc. will host a telephone conference call, today,
Thursday, September 6, 2007, at 10:00 a.m. (ET), to discuss the
Company's fiscal year 2007 second quarter financial results. To
participate by phone, please dial 10 minutes prior to the call:
(888) 295-5935 from the United States and Canada or (706) 758-0212
from outside the United States. Callers should ask to be connected
to Hayes Lemmerz earnings conference call, Conference ID# 12261254.
The conference call will be accompanied by a slide presentation,
which can be accessed this morning through the Company's web site,
in the Investor Kit presentations section at http://www.hayes-/
lemmerz.com/Investor_Kit/Overview/Presentations/www-presentations.html.
A replay of the call will be available today, September 6, 2007,
from 1:00 p.m. (ET) until 11:59 p.m. (ET), September 16, 2007, by
calling (800) 642-1687 (within the United States and Canada) or
(706) 645-9291 (for international calls). Please refer to
Conference ID#12261254. An audio replay of the call is expected to
be available on the Company's website beginning 48 hours after
completion of the call. Hayes Lemmerz International, Inc. is a
world leading global supplier of automotive and commercial highway
wheels, brakes and powertrain components. The Company has 26
facilities and approximately 7,500 employees worldwide. Forward
Looking Statements This press release contains forward-looking
statements with respect to our financial condition and business.
All statements other than statements of historical fact made in
this press release are forward-looking. Such forward- looking
statements include, among others, those statements including the
words "expect," "anticipate," "intend," believe," and similar
language. These forward-looking statements involve certain risks
and uncertainties. Our actual results may differ significantly from
those projected in the forward- looking statements. Factors that
may cause actual results to differ materially from those
contemplated by such forward-looking statements include, among
others: (1) competitive pressure in our industry; (2) fluctuations
in the price of steel, aluminum, and other raw materials; (3)
changes in general economic conditions; (4) our dependence on the
automotive industry (which has historically been cyclical) and on a
small number of major customers for the majority of our sales; (5)
pricing pressure from automotive industry customers and the
potential for re-sourcing of business to lower-cost providers; (6)
changes in the financial markets or our debt ratings affecting our
financial structure and our cost of capital and borrowed money; (7)
the uncertainties inherent in international operations and foreign
currency fluctuations; (8) our ability to divest non-core assets
and businesses; and (9) the risks described in our most recent
Annual Report on Form 10-K and our periodic statements filed with
the Securities and Exchange Commission. You are cautioned not to
place undue reliance on the forward-looking statements, which speak
only as of the date of this press release. HAYES LEMMERZ
INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
CASH FLOWS (Millions of dollars) (Unaudited) Actual Actual Six
Months Six Months Ended Ended July 31, 2007 July 31, 2006 Cash
provided by operating activities $1.3 $65.1 Cash flows from
investing activities: Purchase of property, plant, equipment and
tooling (41.5) (25.6) Proceeds from sale of assets 1.3 0.9 Capital
contribution by minority shareholders 0.0 0.4 Cash used for
investing activities (40.2) (24.3) Cash flows from financing
activities: Changes in bank borrowings and credit facility (0.4)
(0.5) Bank finance fees paid (14.8) (2.9) Borrowings/(repayment) on
long term debt (130.8) (2.9) Dividends paid to minority
shareholders (10.1) (1.0) Proceeds from issuance of common stock
193.1 - Call premium on redemption of Senior Notes (9.0) - Fees
paid for Rights Offering (7.7) - Cash provided by (used for)
financing activities 20.3 (7.3) Net cash provided by (used for)
discontinued operations 30.5 (10.8) Effect of exchange rate changes
on cash and cash equivalents 2.4 1.7 Increase in cash and cash
equivalents 14.3 24.4 Cash and cash equivalents at beginning of
period 37.8 41.4 Cash and cash equivalents at end of period $52.1
$65.8 HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Millions of dollars)
(Unaudited) Actual Actual Actual Actual Three Three Six Six Months
Months Months Months Ended Ended Ended Ended July 31, July 31, July
31, July 31, 2007 2006 2007 2006 Net sales $570.3 $480.8 $1,099.6
$950.6 Cost of goods sold 513.6 432.8 980.9 859.6 Gross profit 56.7
48.0 118.7 91.0 Marketing, general and administration 47.5 38.0
84.6 71.5 Amortization of intangibles 2.7 2.7 5.4 5.4 Asset
impairments and other restructuring charges 1.6 2.8 4.0 6.3 Other
(income) expense, net 9.7 (2.9) 7.5 (4.0) Earnings (loss) from
operations (4.8) 7.4 17.2 11.8 Interest expense, net 15.9 19.6 34.0
36.3 Loss on early extinguishment of debt 21.2 - 21.5 - Other
non-operating expense - (0.2) - (0.2) Loss before income taxes and
minority interest (41.9) (12.0) (38.3) (24.3) Income tax provision
13.5 14.6 22.7 19.3 Loss before minority interest (55.4) (26.6)
(61.0) (43.6) Minority interest 5.8 2.3 9.5 4.2 Income (loss) from
discontinued operations (25.9) 2.0 (31.9) 3.3 Net loss (87.1)
(26.9) (102.4) (44.5) Loss per common share data Basic and diluted:
Loss from continuing operations $(0.61) $(0.76) $(1.18) $(1.25)
(Loss) income from discontinued operations (0.26) 0.05 (0.53) 0.09
Net loss $(0.87) $(0.71) $(1.71) $(1.16) Weighted average shares
outstanding (in millions) 99.9 38.2 59.9 38.1 HAYES LEMMERZ
INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(Millions of dollars) (Unaudited) Actual Actual July 31, January
31, 2007 2007 ASSETS Current assets: Cash and cash equivalents
$52.1 $37.8 Receivables 316.5 242.6 Other Receivables 54.0 43.2
Inventories 196.7 159.9 Assets held for sale 3.1 110.3 Prepaid
expenses and other 15.8 15.2 Total current assets 638.2 609.0
Property, and plant equipment, net 671.1 657.2 Goodwill,
intangibles and other long term assets 442.4 425.0 Total assets
$1,751.7 $1,691.2 LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Bank borrowings and other notes $29.1 $27.9 Current
portion of long-term debt 4.9 6.7 Liabilities held for sale 1.2
47.5 Accounts payable and other accrued liabilities 451.8 359.9
Total current liabilities 487.0 442.0 Long-term debt, net of
current portion 530.6 659.4 Pension and other long-term liabilities
438.1 431.9 Minority interest 57.6 56.1 Stockholders' equity:
Common stock, par value $0.01 per share 1.0 0.4 Additional paid in
capital 875.8 678.6 Retained earnings (836.4) (733.6) Accumulated
other comprehensive income 198.0 156.4 Total stockholders' equity
238.4 101.8 Total liabilities and stockholders' equity $1,751.7
$1,691.2 DATASOURCE: Hayes Lemmerz International, Inc. CONTACT:
Marika P. Diamond, Hayes Lemmerz International, Inc.,
+1-734-737-5162 Web site: http://www.hayes-lemmerz.com/
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