Hayes Lemmerz Reports Strong 2007 Third Quarter Results
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NORTHVILLE, Mich., Dec. 10, 2007 -- Hayes Lemmerz International, Inc. today reported that sales for the fiscal third quarter ended October 31, 2007 were $554.9 million, up 20% from $463.3 million in the year earlier quarter. The sales increase resulted from strong international steel and aluminum wheel sales, material cost recovery and favorable foreign currency fluctuations.
For the third quarter, the Company reported Adjusted EBITDA of $55.8 million, an improvement of $12.0 million or 27% over the year earlier quarter, and earnings from operations before impairments of $22.2 million, an improvement of $11.3 million or more than double the year earlier quarter.
Free cash flow for the third quarter, excluding the effects of the Company's accounts receivables securitization program, was $26.5 million, an increase of $26.2 million over the year earlier quarter. Free cash flow for the first nine months of fiscal 2007 was $8.0 million, an increase of $14.2 million for the same period last year.
"This was a good quarter for the Company, even though our net income was negatively impacted by asset impairment and other restructuring charges," said Curtis Clawson, President, CEO and Chairman of the Board. The Company reported a net loss for the third quarter of $62.7 million, of which $50.0 million resulted from asset impairments and restructuring charges, compared with a net loss of $59.6 million a year earlier.
"Our third quarter results reflect our success in implementing our strategy of restructuring our business, executing our operating plan and continuing to extend the lead in our global wheel business with international expansions in leading-cost regions," Mr. Clawson said.
Hayes Lemmerz sold its automotive brake business in November, continuing to execute its strategy of reducing reliance on Detroit Three business in the United States, focusing its presence in the right geographic regions, and concentrating capital and efforts on its profitable global wheel business. Earlier in the fiscal year, as previously reported, the Company sold its suspension and MGG businesses and its aluminum components facility in Wabash, Indiana. These businesses have been classified as discontinued operations.
Adjusted for the sale of its automotive brake business (which is now classified as discontinued operations), Hayes Lemmerz remains on track to meet its guidance for the fiscal year ending January 31, 2008. The Company expects revenue of approximately $2.1 billion ($2.2 billion including the brake business), and Adjusted EBITDA is expected to be in the range of $190 million to $200 million ($200 million to $210 million including the brake business). The Company expects positive free cash flow (excluding securitization impact). Capital expenditures for the fiscal year are expected to be between $95 million and $100 million.
Hayes Lemmerz International, Inc. is a world leading global supplier of automotive and commercial highway wheels and other automotive components. The Company has 22 facilities and over 7,000 employees worldwide.
HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Millions of dollars)
(Unaudited)
Actual Actual
October 31, 2007 January 31, 2007
ASSETS
Current assets:
Cash and cash equivalents $78.6 $38.5
Receivables 325.3 230.7
Other Receivables 73.8 43.2
Inventories 193.3 156.4
Assets held for sale 56.2 165.0
Prepaid expenses and other 12.4 14.6
Total current assets 739.6 648.4
Property, and plant equipment, net 622.0 627.7
Goodwill, intangibles and other
long term assets 451.8 415.2
Total assets $1,813.4 $1,691.3
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank borrowings and other notes $31.9 $27.9
Current portion of long-term
debt 4.6 5.6
Accounts payable and other
accrued liabilities 496.3 352.0
Liabilities held for sale 14.1 58.5
Total current liabilities 546.9 444.0
Long-term debt, net of current
portion 558.9 659.4
Pension and other long-term
liabilities 451.9 430.0
Minority interest 65.8 56.1
Stockholders' equity:
Common stock, par value $0.01
per share 1.0 0.4
Additional paid in capital 879.7 678.6
Retained earnings (899.2) (733.6)
Accumulated other comprehensive
income 208.4 156.4
Total stockholders' equity 189.9 101.8
Total liabilities and
stockholders' equity $1,813.4 $1,691.3
HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Millions of dollars)
(Unaudited)
Actual Actual Actual Actual
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
October 31, October 31, October 31, October 31,
2007 2006 2007 2006
Net sales $554.9 $463.3 $1,597.6 $1,354.5
Cost of goods sold 496.8 420.7 1,430.2 1,229.3
Gross profit 58.1 42.6 167.4 125.2
Marketing, general 35.8 28.7 116.6 96.3
and administration
Amortization of intangibles 2.5 2.8 7.5 7.8
Asset impairments and other
restructuring charges 50.0 2.5 54.0 8.7
Other (income) expense, net (2.6) (2.3) 4.9 (6.7)
(Loss) earnings from
operations (27.6) 10.9 (15.6) 19.1
Interest expense, net 13.9 18.7 47.8 54.8
Loss on early extinguishment
of debt - - 21.5 -
Other non-operating expense (1.4) - (1.4) -
Loss before income taxes
and minority interest (40.1) (7.8) (83.5) (35.7)
Income tax provision 16.7 8.4 38.5 27.5
Loss before minority
interest (56.8) (16.2) (122.0) (63.2)
Minority interest 5.9 3.1 15.4 7.3
Loss from discontinued
operations - (40.3) (27.7) (33.6)
Net loss (62.7) (59.6) (165.1) (104.1)
Loss per common share data
Basic and diluted:
Loss from continuing $(0.62) $(0.50) $(1.87) $(1.84)
operations
Loss from discontinued - (1.05) (0.38) (0.88)
operations
Net loss $(0.62) $(1.55) $(2.25) $(2.72)
Weighted average 100.4 38.5 73.4 38.3
shares outstanding
(in millions)
HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions of dollars)
(Unaudited)
Actual Actual
Nine Months Ended Nine Months Ended
October 31, 2007 October 31, 2006
Cash provided by operating activities $37.4 $66.5
Cash flows from investing activities:
Purchase of property, plant,
equipment and tooling (64.1) (39.6)
Proceeds from sale of assets 1.5 0.9
Capital contribution by minority
shareholders 0.0 0.4
Cash used for investing activities (62.6) (38.3)
Cash flows from financing activities:
Changes in bank borrowings and credit
facility 0.9 (1.5)
Bank finance fees paid (14.8) (2.9)
Repayment of long term debt (136.3) (15.1)
Dividends paid to minority
shareholders (10.1) (1.8)
Proceeds from issuance of common
stock 193.1 0.0
Call premium on redemption of Senior
Notes (9.0) 0.0
Fees paid for Rights Offering (7.7) 0.0
Cash provided by (used for) financing
activities 16.1 (21.3)
Net cash provided by discontinued
operations 45.1 8.9
Effect of exchange rate changes on
cash and cash equivalents 4.1 1.4
Increase in cash and cash equivalents 40.1 17.2
Cash and cash equivalents at
beginning of period 38.5 42.5
Cash and cash equivalents at end of
period $78.6 $59.7