Monday, September 12, 2005

Hayes Lemmerz Reports Results for Difficult Second Quarter; Company Expects Better Second Half and Continues Strategic Focus on International Growth a

Hayes LemmerzInternational, Inc. (HAYZ) today reported that sales for the fiscal secondquarter ended July 31, 2005 rose 9.8 percent to $584.3 million from $532.1million for the same period last year, helped by higher international volumes,partial recovery from customers of increased steel prices and favorableforeign exchange rates. The Company reported a loss from operations for thefiscal second quarter of $47.1 million, primarily due to asset impairmentcharges, compared to earnings from operations of $9.6 million for the secondquarter 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 $9.8million, 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 $32.3million, 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 yearearlier net loss of $8.7 million. The loss from operations and net loss for the second quarter reflect assetimpairment and other restructuring charges of $33.0 million, of which $30.0million arose from an asset impairment charge related to the Company'sCadillac, Michigan iron foundry, which makes engine manifolds, steeringknuckles, and other cast components. The Company is currently evaluating itsoptions for the facility, including the possible sale or closure of thefacility. "This was an extremely challenging quarter for us in North America. NorthAmerican volumes for key platforms were lower than last year, reducing salesand profits," said Curtis Clawson, President, CEO and Chairman of the Board ofHayes Lemmerz. "Additionally, the Company incurred a number of one-time costsassociated with impairment charges and additional costs for previouslyannounced facilities closures," he said. "However, we remain focused on implementing our strategic plan, whichemphasizes restructuring unprofitable operations, investing in cost-efficientmanufacturing technologies, and expanding capacity in low-cost countries closeto our broad international customer base," he said. Hayes Lemmerz expects the second half of the year will show improvedresults compared with the first half because of recently completed expansionsin aluminum wheel making capacity in plants located in the United States(Gainesville, Georgia), the Czech Republic, Brazil, Thailand, Mexico and SouthAfrica. The Company's total liquidity as of July 31, 2005, was $129 million,consisting of cash, availability under its revolving credit facility, andavailability under its North American accounts receivable securitizationfacility. To enhance liquidity, the Company entered into a capital leaseagreement for certain production equipment from which it receivedapproximately $15 million in the second quarter and expects to receive anadditional $8 million in the second half. The Company is also in the processof negotiating a European receivables financing program, which is expected toincrease liquidity by roughly $25 million if successfully completed, and iscontinuing to pursue the divestiture of its Commercial Highway Hubs and Drumsbusiness, which may improve liquidity by $10-15 million, as well as reducedebt. The Company also revised its guidance and outlook for 2005. The Companyexpects 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, isexpected to be between negative $45 million and negative $60 million for thefull year, but is expected to be positive in the second half of 2005,reflecting reduced working capital investment, lower capital expenditures, andasset sale proceeds. Hayes Lemmerz International, Inc. (Nasdaq:announced that it willhost a telephone conference call to discuss the Company's fiscal year 2005second quarter financial results today, Thursday, September 8, 2005, at 10:00a.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 fromoutside the United States. Callers should ask to be connected to HayesLemmerz earnings conference call, Conference ID#8307804. The conference callwill be accompanied by a slide presentation, which can be accessed thatmorning through the Company's web site, in the Investor Kit presentationssection at 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 internationalcalls). Please refer to Conference ID#8307804. An audio replay of the callis expected to be available on the Company's website beginning Tuesday,September 13, 2005. Hayes Lemmerz International, Inc. is a leading global supplier ofautomotive and commercial highway wheels, brakes, powertrain, suspension,structural and other lightweight components. The Company has 40 facilitiesand has approximately 11,000 employees worldwide. (1) Adjusted EBITDA, a measure used by management to measure operatingperformance, is defined as earnings from operations plus depreciation andamortization. Adjusted EBITDA is defined as EBITDA further adjusted toexclude: (i) asset impairment losses and other restructuring charges; (ii)reorganization items; and (iii) other items. Management references thesenon-GAAP financial measures frequently in its decision making because theyprovide supplemental information that facilitates internal comparisons tohistorical operating performance of prior periods and external comparisons tocompetitors' historical operating performance. Adjusted EBITDA is not arecognized term under GAAP and does not purport to be an alternative toearnings from operations as an indicator of operating performance or to cashflows from operating activities as a measure of liquidity. Because not allcompanies use identical calculations, these presentations of Adjusted EBITDAmay not be comparable to other similarly titled measures of other companies.Additionally, Adjusted EBITDA is not intended to be a measure of free cashflow for management's discretionary use, as it does not consider certain cashrequirements such as interest payments, tax payments and debt servicerequirements. Institutional investors generally look to Adjusted EBITDA inmeasuring performance, among other things. The Company uses Adjusted EBITDAto facilitate quantification of planned business activities and enhancesubsequent follow-up with comparisons of actual to planned Adjusted EBITDA.The Company is disclosing these non-GAAP financial measures in order toprovide transparency to investors. (2) Free Cash Flow is used by management as a non-GAAP financial measurebecause it identifies the amount of cash available to meet principal debtamortization requirements, pay dividends to stockholders, or make corporateinvestments. This press release includes forward looking statements within the meaningof Section 27A of the Securities Act of 1933 and Section 21E of the SecuritiesExchange Act of 1934, as amended, which represent the Company's expectationsand beliefs concerning future events that involve risks and uncertaintieswhich could cause actual results to differ materially from those currentlyanticipated. All statements other than statements of historical factsincluded in this release are forward looking statements. Factors that couldcause actual results to differ materially from those expressed or implied insuch forward looking statements include the factors set forth in our periodicreports filed with the SEC. Consequently, all of the forward lookingstatements made in this press release are qualified by these and otherfactors, risks, and uncertainties.

0 Comments:

Post a Comment

<< Home