Hayes Lemmerz Reports Second Quarter 2004 Results
NORTHVILLE, Mich., Sept. 8 -- Hayes Lemmerz International, Inc. reported that sales for the fiscal second quarter, ended July 31, 2004, rose 4% to $523.7 million compared with $502.8 million a year earlier. Sales for the six months ended July 31, 2004 were $1,117.8 million compared to $1,018.1 million a year earlier, an increase of 10%.
The Company reported a net loss of $10.0 million, or 26 cents a share, for the second fiscal quarter ended July 31, 2004. For the fiscal first half of 2004, the Company reported a net loss of $12.7 million, or 34 cents a share. For the second fiscal quarter of 2004, earnings from operations excluding fresh start accounting adjustments and reorganization items was $9.5 million, compared with $20.4 million a year earlier. Increased volumes and favorable exchange rates abroad were offset by lower OEM production requirements in North America, lower unit pricing globally, and increased steel and iron prices. For the six months ended July 31, 2004, earnings from operations with those exclusions amounted to $35.7 million, compared with $34.8 million a year earlier.
The Company reported a cash balance of $49.1 million as of July 31, 2004 and there were no borrowings under its $100 million revolving credit facility.
"I am encouraged by our continuing progress in making Hayes Lemmerz more cost-efficient and customer-focused in our operations," said Curtis Clawson, Chairman, President, and CEO. "Given the challenges faced by our industry, including sharply higher steel costs and soft new vehicle sales, we did well in the second quarter. For the first half of 2004, we slightly increased earnings from operations excluding fresh start accounting adjustments and reorganization items."
Mr. Clawson cautioned that Hayes Lemmerz will continue to face high materials costs, and also the impacts of new global competitors, especially in China. "Our industry remains under intense pricing pressure from competitors, and from our major customers. Fortunately, our intense focus on reduction in production costs, facility improvements, and increased productivity is allowing us to respond effectively to those pressures," Mr. Clawson said.
The 2004 fiscal second quarter results included $0.9 million of restructuring charges, primarily arising from severance and related closure costs of the Howell, Michigan, manufacturing plant as part of management's ongoing rationalization efforts.
Results for the first half of 2004 also include a $12.2 million loss on early extinguishment of debt. During the first quarter, Hayes Lemmerz sold 7.7 million shares of its common stock in a primary offering, and used a portion of the $117.0 million net proceeds to extinguish $87.5 million of its New Senior Notes and to prepay $16.0 million of its New Term Loan.
Hayes Lemmerz will host a telephone conference call to discuss the Company's fiscal year 2004 second quarter financial results today at 9:30 a.m. (ET). To participate by phone, please dial 10 minutes prior to the call: (800) 399-3882 from the United States and Canada (706) 634-4552 from outside the United States. Callers should ask to be connected to the Hayes Lemmerz earnings conference call, Conference ID#9644838. 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 12:00 Noon (ET), September 8, 2004 until 11:59 p.m. (ET), September 15 , 2004, by calling (800) 642-1687 (within the United States and Canada) or (706) 645-9291 (for international calls). Please refer to Conference ID#9644838. 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 leading global supplier of automotive and commercial highway wheels, brakes, powertrain, suspension, structural and other lightweight components. The Company has 43 facilities and one joint venture in 14 countries and approximately 11,000 employees worldwide.
More information about Hayes Lemmerz International, Inc. is available at our website which is http://www.hayes-lemmerz.com/ .
HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in millions, except per share amounts)
(Unaudited)
Successor Predecessor
Three Months Two Months One Month
Ended Ended Ended
July 31, July 31, May 31,
2004 2003 2003
Net sales $523.7 $328.3 $174.5
Cost of goods sold 474.4 298.9 147.8
Gross profit 49.3 29.4 26.7
Marketing, general and
administration 39.9 24.9 7.7
Asset impairments and other
restructuring charges 0.9 - 2.3
Other (income) expense, net (1.0) 2.1 (1.3)
Reorganization items - - 31.9
Fresh start accounting adjustments - - (63.1)
Earnings from operations 9.5 2.4 49.2
Interest expense, net 12.4 8.1 5.8
Other non-operating expense - 0.1 -
Earnings (loss) before taxes on
income, minority interest and
extraordinary gain on debt
discharge (2.9) (5.8) 43.4
Income tax provision 5.6 2.6 54.4
Minority interest 1.5 0.8 0.2
Extraordinary gain on debt
discharge, net of tax $0 - - 1,076.7
Net income (loss) $(10.0) $(9.2) $1,065.5
Basic and diluted net loss
per share $(0.26) $(0.31)
HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in millions, except per share amounts)
(Unaudited)
Successor Predecessor
Six Months Two Months Four Months
Ended Ended Ended
July 31, July 31, May 31,
2004 2003 2003
Net sales $1,117.8 $328.3 $689.8
Cost of goods sold 994.4 298.9 611.3
Gross profit 123.4 29.4 78.5
Marketing, general and
administration 83.8 24.9 41.6
Asset impairments and other
restructuring charges 3.3 - 6.4
Other (income) expense, net 0.6 2.1 (1.9)
Reorganization items - - 45.0
Fresh start accounting adjustments - - (63.1)
Earnings from operations 35.7 2.4 50.5
Interest expense, net 21.6 8.1 22.7
Other non-operating (income)
expense (0.1) 0.1 -
Loss on early extinguishments
of debt 12.2 - -
Earnings (loss) before taxes on
income, minority interest,
extraordinary gain on debt
discharge 2.0 (5.8) 27.8
Income tax provision 10.6 2.6 60.3
Minority interest 4.1 0.8 1.2
Extraordinary gain on debt
discharge, net of tax $0 - - 1,076.7
Net income (loss) $(12.7) $(9.2) $1,043.0
Basic and diluted net loss per
share $(0.34) $(0.31)
HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
July 31, January 31,
2004 2004
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $49.1 $48.5
Receivables 325.0 325.5
Inventories 204.1 189.3
Prepaid expenses and other 21.3 29.0
Total current assets 599.5 592.3
Property, plant and equipment, net 966.4 966.5
Goodwill 407.2 416.2
Intangible assets, net 225.2 237.2
Other assets 51.6 85.5
Total assets $2,249.9 $2,297.7
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank borrowings and other notes $4.0 $14.2
Current portion of long-term debt 10.1 11.3
Accounts payable and accrued liabilities 362.1 355.5
Total current liabilities 376.2 381.0
Long-term debt, net of current portion 641.2 752.4
Pension and other long-term liabilities 517.7 526.5
Series A Warrants and Series B Warrants 3.0 8.2
Redeemable preferred stock of subsidiary 10.9 10.5
Minority interest 25.9 23.2
Commitments and contingencies
Total stockholders' equity 675.0 595.9
Total liabilities and stockholders' equity $2,249.9 $2,297.7
HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in millions)
(Unaudited)
Successor Predecessor
Six Months Two Months Four Months
Ended Ended Ended
July 31, July 31, May 31,
2004 2003 2003
Cash provided by operating
activities $79.6 $44.4 $31.1
Cash flows from investing
activities:
Purchase of property, plant,
equipment and tooling (68.0) (19.5) (26.3)
Purchase of equipment previously
leased - - (23.6)
Proceeds from sale of assets 1.7 - 0.8
Cash used for investing
activities (66.3) (19.5) (49.1)
Cash flows from financing
activities:
Change in borrowings under DIP
Facility - - (49.9)
Changes in bank borrowings and
credit facility 2.9 (65.0) (9.8)
Repayment of notes payable
issued in connection with
purchases of businesses (13.1) - (2.0)
Repayment of long term debt (5.5) - -
Net proceeds from issuance of
common stock 117.0 - -
Proceeds from (redemption of)
New Senior Notes, net of
discount and related fees (96.7) - 242.8
Proceeds from (redemption of)
New Term Loan, net of related
fees (16.0) - 436.1
Prepetition Lenders' Payment
amount - - (477.3)
Payment to holders of Old
Senior Notes - - (13.0)
Cash provided by (used for)
financing activities (11.4) (65.0) 126.9
Effect of exchange rate changes
on cash and cash equivalents (1.3) 1.6 4.1
Increase(decrease) in cash
and cash equivalents 0.6 (38.5) 113.0
Cash and cash equivalents at
beginning of period 48.5 179.1 66.1
Cash and cash equivalents at
end of period $49.1 $140.6 $179.1