Hayes Lemmerz Reports 18% Sales Gain, 23% Higher Adjusted EBITDA, Nearly Double Core Operating Earnings, and Improved Free Cash
10 April 2008 - 9:56PM
PR Newswire (US)
Fiscal Fourth Quarter Results Also Improved Significantly Versus
Year Earlier Quarter NORTHVILLE, Mich., April 10
/PRNewswire-FirstCall/ -- Hayes Lemmerz International, Inc.
(NASDAQ:HAYZ) today reported substantially higher sales, Adjusted
EBITDA, core operating earnings, free cash flow, and liquidity for
the 2007 fiscal year ended January 31, 2008. Fourth quarter results
also showed similar improvement compared with the year earlier
quarter. "Hayes Lemmerz made great progress in fiscal 2007 despite
difficult market conditions," said Curtis J. Clawson, President,
CEO and Chairman of the Board. "We extended our global lead in
wheel manufacturing and further diversified our customer and
geographic bases to better insulate us from market downturns.
Additionally, we met our revenue, Adjusted EBITDA and free cash
flow guidance to the investment community." "By restructuring our
balance sheet through a successful equity rights offering and
divesting non-core assets, we were able to make key capital
investments that more sharply focused us on our core wheel
business. We believe those strategic initiatives, combined with
continuing operational improvements, position us for further growth
in 2008," he said. Annual Results For the 2007 fiscal year, the
Company reported sales of $2.13 billion, up $330 million or 18.3%
from $1.80 billion a year earlier. Adjusted EBITDA for the year was
$192 million, up $35.6 million or 23% from the prior year. Core
operating earnings were $72.7 million, almost double the $37.3
million for the prior year. The Company reported a net loss for the
fiscal year of $194.4 million, compared with a net loss of $166.9
million in the prior year. The fiscal 2007 loss included $85.5
million of asset impairment charges, compared with $32.8 million of
such charges in fiscal 2006. Excluding asset impairment and
restructuring charges, the net loss was $108.9 million, an
improvement of $25.2 million from $134.1 million in the prior
fiscal year. Hayes Lemmerz also significantly strengthened its
balance sheet and liquidity during fiscal 2007. Cash from
operations, excluding the impact of the Company's accounts
receivable financing programs, rose to $138.4 million, compared
with $31.3 million a year earlier. Liquidity was $300 million at
year end, an increase of $171 million or 133% over the prior year.
Free cash flow, excluding the impact of accounts receivable
financing programs, was a positive $38.3 million compared with a
negative $28.9 million a year earlier, an improvement of $67.2
million. Capital expenditures rose to $102.4 million in fiscal year
2007 (primarily due to expansion programs to drive growth in sales
and earnings, with some impact from foreign exchange rates)
compared with $70.4 million a year earlier. "The Company's
geographic, customer and platform diversification efforts have been
successful; Hayes Lemmerz now supplies wheels for more than 200
light vehicle platforms worldwide," Mr. Clawson said. He noted that
no single platform accounts for more than 4% of total revenue, and
that the Company's geographic, customer, and platform diversity
helped to offset softness in the North American automotive market
during the fiscal year and is expected to continue to do so. "We
have invested most heavily in markets that are expected to show the
strongest growth in the next two years, including India, the Czech
Republic, Thailand, Turkey and Brazil," he said. "In fiscal 2004,
we had sales of $1.4 billion from our Automotive Wheels segment,
31% of which were in the United States. By fiscal 2007, our
Automotive Wheels segment had grown 50% to $2.1 billion, with sales
in the United States accounting for only 19%," Mr. Clawson said.
Fourth Quarter Results For the 2007 fiscal fourth quarter ended
January 31, 2008, Hayes Lemmerz reported sales of $529 million, up
$87 million or 19.6% from $442 million a year earlier. Adjusted
EBITDA for the fourth quarter improved to $40.3 million, a gain of
$3.5 million or 9.5% over the year earlier quarter. Core operating
earnings for the quarter were $11.0 million, compared with $6.7
million a year earlier. The net loss for the quarter improved to
$29.3 million from $62.8 million a year earlier. Free cash flow for
the quarter, excluding the Company's accounts receivable financing
programs, which were not used during the quarter, was $29.9
million, compared with an outflow of $27.6 million a year earlier,
an improvement of $57.5 million. Fiscal 2008 Outlook The Company
expects fiscal 2008 sales of $2.1 billion to $2.3 billion, Adjusted
EBITDA of $205 million to $220 million, positive free cash flow,
and capital expenditures of $95 million to $105 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. Free cash flow is defined as
cash from operating activities minus capital expenditures plus cash
from 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. Core operating earnings is defined as earnings from
operations less asset impairments and restructuring charges,
post-emergence chapter 11 related costs, gains and losses on sales
of assets, and other special items that are of an infrequent or
unusual nature. Core operating earnings is used by management as a
non-GAAP financial measure because it is more indicative of
operating performance due to exclusion of non-operating,
infrequent, or unusual items. For a reconciliation of these
non-GAAP financial measures to the most comparable GAAP measures,
please refer to pages 33-35 of the slide presentation accompanying
the conference call. Conference Call Hayes Lemmerz will host a
telephone conference call to discuss the Company's fiscal 2007 year
end financial results on Thursday, April 10, 2008, at 10:00 a.m.
(ET). To participate by phone, please dial 10 minutes prior to the
call: (888) 295-5935 from the United States and Canada (706)
758-0212 from outside the United States and Canada Callers should
ask to be connected to the Hayes Lemmerz earnings conference call,
Conference ID# 33146021. 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 Relations section at
http://www.hayes-lemmerz.com/Investor_Relations.html. A replay of
the call will be available from 1:00 p.m. (ET), April 10, 2008,
until 11:59 p.m. (ET), April 20, 2008, by calling (800) 642-1687
(within the United States and Canada) or (706) 645-9291 (for
international calls). Please refer to Conference ID# 33146021. 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 and powertrain
components. The Company has 24 facilities and over 7,000 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; and (8) 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 OPERATIONS
(Millions of dollars) (Unaudited) Twelve Months, Year Ending
January 31, January 31, January 31, 2008 2007 2006 Net sales
$2,126.7 $1,796.8 $1,726.2 Cost of goods sold 1,917.7 1,637.8
1,584.5 Gross profit 209.0 159.0 141.7 Marketing, general and
administration 153.5 125.3 123.1 Amortization of intangibles 10.2
10.2 13.1 Asset impairments and other restructuring charges 85.5
32.8 23.1 Goodwill Impairment - - 185.5 Other (income) expense, net
(1.5) (13.8) (4.8) (Loss) earnings from operations (38.7) 4.5
(198.3) Interest expense, net 62.2 75.2 64.1 Other non-operating
expense 8.5 - 0.8 Loss on early extinguishment of debt 21.5 - -
Loss before income taxes and minority interest (130.9) (70.7)
(263.2) Income tax expense 29.9 40.2 5.4 Loss before minority
interest (160.8) (110.9) (268.6) Minority interest 21.0 10.6 7.8
Loss from continuing operations (181.8) (121.5) (276.4) Loss from
discontinued operations (12.6) (45.4) (181.1) Net loss (194.4)
(166.9) (457.5) Loss per common share data Basic and diluted: Loss
from continuing operations $(2.25) $(3.16) $(7.28) Loss from
discontinued operations (0.16) (1.19) (4.78) Net loss $(2.41)
$(4.35) $(12.06) Weighted average shares outstanding (in millions)
80.6 38.4 37.9 HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Millions of dollars) (Unaudited)
Actual Actual January 31, 2008 January 31, 2007 ASSETS Current
assets: Cash and cash equivalents $160.2 $38.5 Receivables 305.6
230.7 Other Receivables 48.3 43.2 Inventories 179.1 156.4 Assets
held for sale 21.4 165.0 Prepaid expenses and other 12.2 14.6 Total
current assets 726.8 648.4 Property, and plant equipment, net 616.8
627.7 Goodwill, intangibles and other long term assets 462.3 415.1
Total assets $1,805.9 $1,691.2 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: Bank borrowings and other notes $32.9 $27.9
Current portion of long-term debt 4.8 5.6 Accounts payable and
other accrued liabilities 372.0 236.3 Liabilities held for sale 8.2
58.5 Other Short Term Liabilities 138.0 115.6 Total current
liabilities 555.9 443.9 Long-term debt, net of current portion
572.2 659.4 Pension and other long-term liabilities 405.0 430.0
Minority interest 70.5 56.1 Stockholders' equity: Common stock, par
value $0.01 per share 1.0 0.4 Additional paid in capital 882.0
678.6 Retained earnings (928.7) (733.6) Accumulated other
comprehensive income 248.0 156.4 Total stockholders' equity 202.3
101.8 Total liabilities and stockholders' equity $1,805.9 $1,691.2
HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF CASH FLOWS (Millions of dollars) (Unaudited) Twelve
Months, Year Ending January 31, January 31, January 31, 2008 2007
2006 Cash provided by operating activities $107.7 $70.7 $(44.2)
Cash flows from investing activities: Purchase of property, plant,
equipment and tooling (102.4) (70.4) (86.4) Purchase of business,
net of cash acquired 0.0 0.0 (1.4) Proceeds from sale of assets 2.3
10.2 15.8 Capital contribution by minority shareholders 0.0 0.4 0.0
Cash used for investing activities (100.1) (59.8) (72.0) Cash flows
from financing activities: Changes in bank borrowings and credit
facility 1.2 1.6 23.7 Bank finance fees paid (14.8) (4.0) (5.2)
Repayment/Proceeds from long term debt (135.5) (20.9) 44.7
Dividends paid to minority shareholders (11.8) (3.9) (3.6) Net
Proceeds from issuance of common stock 185.4 0.0 0.0 Call premium
on redemption of Senior Notes (9.0) 0.0 0.0 Cash provided by (used
for) financing activities 15.5 (27.2) 59.6 Net cash provided by
discontinued operations 92.4 9.9 66.4 Effect of exchange rate
changes on cash and cash equivalents 6.2 2.4 (2.5) Increase in cash
and cash equivalents 121.7 (4.0) 7.3 Cash and cash equivalents at
beginning of period 38.5 42.5 35.2 Cash and cash equivalents at end
of period $160.2 $38.5 $42.5 DATASOURCE: Hayes Lemmerz
International, Inc. CONTACT: Marika P. Diamond, Hayes Lemmerz
International, Inc., +1-734-737-5162 Web site:
http://www.hayes-lemmerz.com/
http://www.hayes-lemmerz.com/Investor_Relations.html
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