Hayes Lemmerz Reports Third Quarter 2004 Results
NORTHVILLE, Mich., Dec. 10, 2004 -- Hayes Lemmerz International, Inc. reported that sales for the fiscal third quarter ended October 31, 2004, rose 4.8% to $556.2 million, compared with $530.9 million in the fiscal third quarter of 2003. Sales for the nine months ended October 31, 2004 were $1,674.0 million compared with $1,549.0 million for the nine months ended October 31, 2003, an increase of 8.1%.
The Company reported a net loss of $9.5 million, or 25 cents per share, for the fiscal third quarter ended October 31, 2004, compared with a loss of $10.0 million or 33 cents per share in the fiscal third quarter of 2003. For the nine months ended October 31, 2004, the Company reported a net loss of $22.2 million, or 59 cents per share. Results for the prior year's period are not comparable because the Company emerged from financial reorganization on June 3, 2003.
The Company reported a cash balance of $27.8 million as of October 31, 2004 and $81.3 million of available liquidity under its $100.0 million revolving credit facility (net of outstanding letters of credit of $18.7 million). To further enhance liquidity, the Company announced on December 10, 2004 it completed the establishment of a $75.0 million receivables securitization program, which was instituted to replace liquidity lost by termination of domestic automakers' early payment programs. The Company expects to begin selling receivables pursuant to the securitization program during the fiscal fourth quarter.
"We are continuing to pursue our strategy of aggressive cost reductions, investment in the right geographic markets, and investment in the right products," said Curtis Clawson, Chairman, President, and CEO. "We are taking action for long-term value creation."
Mr. Clawson cited acquisition of an aluminum wheel production facility in Mexico and establishment of a new joint venture aluminum wheel production facility in Turkey, as well as acquisition of a majority position in a truck wheel plant in Turkey, as important strategic expansions during 2004. "We expect to continue to expand aluminum wheel production in low-cost countries, including Mexico, Brazil, Thailand, and the Czech Republic, with a goal of having nearly two thirds of our aluminum wheel production in low-cost countries within five years," he said.
"During 2004, Hayes Lemmerz launched over $325 million of follow-on and conquest business globally and continues to build a strong book of business," Mr. Clawson said.
HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in millions, except per share amounts)
Three Months Ended Three Months Ended
October 31, October 31,
2004 2003
(Unaudited)
Net sales $ 556.2 $ 530.9
Cost of goods sold 506.1 461.6
Gross profit 50.1 69.3
Marketing, general and administrative 39.4 33.1
Asset impairments and other
restructuring charges 2.9 19.6
Other (income) expense, net 0.6 2.7
Earnings from operations 7.2 13.9
Interest expense, net 10.0 16.6
Other non-operating (income) expense,
net 1.1 0.2
Loss before taxes on income and
minority interest (3.9) (2.9)
Income tax provision 3.7 6.1
Loss before minority interest (7.6) (9.0)
Minority interest 1.9 1.0
Net loss $ (9.5) $ (10.0)
Basic and diluted net loss
per share $ (0.25) $ (0.33)
HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in millions, except per share amounts)
Successor Predecessor
Nine Months Five Months Four Months
Ended Ended Ended
October 31, October 31, May 31,
2004 2003 2003
(Unaudited)
Net sales $1,674.0 $859.2 $689.8
Cost of goods sold 1,500.5 760.5 611.3
Gross profit 173.5 98.7 78.5
Marketing, general and
administrative 123.2 58.0 41.6
Asset impairments and other
restructuring charges 6.2 19.6 6.4
Other (income) expense, net 1.2 4.8 (1.9)
Reorganization items - - 45.0
Fresh start accounting adjustments - - (63.1)
Earnings from operations 42.9 16.3 50.5
Interest expense, net 31.6 24.7 22.7
Other non-operating (income) expense 1.0 0.3 -
Loss on early extinguishment of
debt 12.2 - -
Earnings (loss) before taxes on income,
minority interest, extraordinary
gain on debt discharge (1.9) (8.7) 27.8
Income tax provision 14.3 8.7 60.3
Loss before minority interest and
extraordinary gain on debt
discharge (16.2) (17.4) (32.5)
Minority interest 6.0 1.8 1.2
Loss before extraordinary gain
on debt discharge (22.2) (19.2) (33.7)
Extraordinary gain on debt discharge,
net of tax of $0 - - 1,076.7
Net income (loss) $(22.2) $(19.2) $1,043.0
Basic and diluted net loss
per share $(0.59) $(0.64)
HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
October 31, January 31,
2004 2004
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 27.8 $ 48.5
Receivables 377.5 325.5
Inventories 194.6 189.3
Prepaid expenses and other 18.6 29.0
Total current assets 618.5 592.3
Property, plant and equipment, net 978.1 966.5
Goodwill 409.3 416.2
Intangible assets, net 230.2 237.2
Other assets 55.1 85.5
Total assets $ 2,291.2 $ 2,297.7
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank borrowings and other notes $ 3.9 $ 14.2
Current portion of long-term debt 11.1 11.3
Accounts payable and accrued liabilities 397.4 355.5
Total current liabilities 412.4 381.0
Long-term debt, net of current portion 638.3 752.4
Pension and other long-term liabilities 517.2 526.5
Series A Warrants and Series B Warrants 0.7 8.2
Redeemable preferred stock of subsidiary 11.1 10.5
Minority interest 28.3 23.2
Commitments and contingencies
Stockholders' equity:
Preferred stock, 1,000,000 shares authorized,
none issued or outstanding at October 31,
2004 or January 31, 2004 - -
Common stock, par value $0.01 per share:
100,000,000 shares authorized; 37,818,114
and 30,000,000 issued and outstanding at
October 31, 2004 and January 31, 2004,
respectively 0.4 0.3
Additional paid in capital 670.0 548.2
Accumulated deficit (68.7) (46.5)
Accumulated other comprehensive income 81.5 93.9
Total stockholders' equity 683.2 595.9
Total liabilities and stockholders'
equity $ 2,291.2 $ 2,297.7
HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in millions)
Successor Predecessor
Nine Months Five Months Four Months
Ended Ended Ended
October 31, October 31, May 31,
2004 2003 2003
(Unaudited)
Cash flows from operating activities:
Net income (loss) $(22.2) $(19.2) $1,043.0
Adjustments to reconcile net income
(loss) to net cash provided by
(used for) operating activities:
Depreciation and amortization 128.3 67.1 46.4
Amortization of deferred financing
fees 2.8 1.4 1.6
Interest income resulting from fair value
adjustment of Series A Warrants and
Series B Warrants (7.5) (2.6) -
Change in deferred income taxes (11.2) (6.9) 52.6
Asset impairments and other
restructuring charges 6.2 19.6 6.4
Minority interest 6.0 1.8 1.2
Subsidiary preferred stock dividends 0.6 0.3 -
Compensation expense related to
restricted stock units 4.9 2.1 -
Loss on extinguishment of debt 12.2 - -
(Gain) loss on sale of assets and
businesses - 0.3 (0.4)
Changes in operating assets and liabilities:
Receivables (51.0) (22.9) (13.7)
Inventories (4.7) 14.5 (4.0)
Prepaid expenses and other 3.1 4.0 5.2
Accounts payable and accrued
liabilities 35.8 29.2 (6.9)
Chapter 11 items:
Reorganization items - - 45.0
Fresh start accounting adjustments - - (63.1)
Extraordinary gain on debt discharge - - (1,076.7)
Interest accrued on Credit Agreement - - 16.9
Payments related to Chapter 11 Filings (1.1) (34.2) (22.4)
Cash provided by operating
activities 102.2 54.5 31.1
Cash flows from investing activities:
Purchase of property, plant, equipment
and tooling (109.2) (41.1) (26.3)
Purchase of equipment previously leased - - (23.6)
Proceeds from sale of assets 0.6 0.8 0.8
Cash used for investing activities (108.6) (40.3) (49.1)
Cash flows from financing activities:
Change in borrowings under DIP Facility - - (49.9)
Changes in bank borrowings and credit
facility 2.8 (11.9) (9.8)
Repayment of notes payable issued in connection with
purchases of businesses (13.1) - (2.0)
Repayment of long-term debt (8.2) (74.0) -
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) (1.1) 436.1
Prepetition Lenders' Payment amount - - (477.3)
Payment to holders of Old Senior Notes - - (13.0)
Cash provided by (used for) financing
activities (14.2) (87.0) 126.9
Effect of exchange rate changes on cash and
cash equivalents (0.1) 2.7 4.1
Increase (decrease) in cash and
cash equivalents (20.7) (70.1) 113.0
Cash and cash equivalents at beginning
of period 48.5 179.1 66.1
Cash and cash equivalents at end
of period $ 27.8 $ 109.0 $ 179.1
Supplemental data:
Cash paid for interest 34.0 10.3 5.8
Cash paid for income taxes 15.7 15.5 2.9