Hayes Wheels Reports 35 Percent Earnings Increase in 2nd Quarter
4 September 1997
Hayes Wheels Reports 35 Percent Earnings Increase in 2nd Quarter
ROMULUS, Mich., September 4 -- Hayes Wheels International,
Inc. today reported net income of $4.7 million or $.20 per
share on sales of $278 million for the second quarter ended July 31, 1997.
Sales were 68 percent higher than second quarter 1996 sales of $165 million
due primarily to the additional sales contributed by the acquisitions of Motor
Wheel Corporation and Lemmerz Holding GmbH. The second quarter 1997 included
one month of Lemmerz' operations.
Net income for the second quarter 1997 of $4.7 million was slightly higher
than the $3.4 million in the second quarter 1996, before the effects of
certain charges and an extraordinary loss.
For the six months ended July 31, 1997, sales were $528 million, compared
to $321 million for the second quarter 1996. Net income was $8.5 million or
$.37 per share verses second quarter 1996 results of $9.5 million or $.29 per
share, before the effects of certain charges and an extraordinary loss. The
decrease in net income was due to additional interest expense of $28 million
resulting from the recapitalization of the company related to its merger with
Motor Wheel, offsetting higher profits on increased sales.
Comparisons of pro-forma results for 1997 and 1996, which assume Motor
Wheel and Lemmerz were acquired as of the beginning of the 1996 fiscal year,
show second quarter 1997 pro-forma sales of $356 million, an increase of
7 percent over 1996 pro-forma sales of $331 million. Earnings from operations
increased from $26.1 million to $35.3 million, or $9.2 million. This 35
percent increase was due primarily to increased sales, improved operating
results and productivity gains in all businesses, and cost savings and
synergies related to the Motor Wheel acquisition. Pro-forma EBITDA for the
second quarter 1997 was $53.6 million, or 23 percent higher than pro-forma
EBITDA of $43.7 million for the second quarter 1996. Second quarter pro-forma
net income of $.20 per share was an increase of $.17 per share over last
year's second quarter pro-forma net income of $.03 per share.
"It was an exciting quarter for Hayes as we continued to show strong
results and as we completed several transactions that will drive our growth in
the future," said Ron Cucuz, chairman and chief executive officer. "Our
improved performance can be attributed to several factors. We have taken
advantage of increased sales, as well as increased productivity in our
aluminum wheel business, and we have begun to realize significant cost savings
and synergies related to the acquisition of Motor Wheel.
"The Lemmerz acquisition closed on June 30, which strengthens our
leadership in Europe as well as our global position. In addition, we have
targeted significant cost savings. We are extremely excited with our growth
prospects in Europe as the combined company goes forward. On August 26, we
completed the acquisition of Bosch's heavy-duty wheel and brake businesses,
which will allow us to grow our commercial highway business and provide us
with incremental capacity and an expanded product line that includes full-cast
brake drums and hubs. At the same time, this acquisition will yield
significant cost reductions.
"We look forward to the remainder of 1997 and the launch of innovative new
products in the marketplace, such as the wheels we recently began shipping for
the 1998 Ford Ranger," continued Cucuz. "The Ranger contract is one of the
largest we've ever received and utilizes several new technology applications,
including our lightweight fabricated aluminum and FFC(R) wheels. This
reaffirms our technological leadership in the automotive industry and
underscores our position as the only wheel supplier able to offer a full
product line."
Hayes Wheels International is a world leader in the design, engineering
and manufacture of steel and aluminum wheels and brake drums and rotors for
the automotive and commercial highway markets in North America, Europe and
Asia.
HAYES WHEELS INTERNATIONAL, INC.
Second Quarter Results
Quarter Ended July 31
$ Millions 1997 1996
Sales $ 277.9 $165.3
Earnings (loss) from operations $ 30.0 $ (7.4)
Income (loss) before extraordinary items $ 4.7 $ (9.5)
Extraordinary (loss), net of tax $ - $ (7.4)
Net Income (loss) $ 4.7 $(16.9)
Earnings (loss) per share data:
Earnings (loss) before extraordinary items $ 0.20 $ (0.30)
Extraordinary (loss), net of tax $ - $ (0.24)
Net Income (loss) $ 0.20 $ (0.54)
Weighted average common shares 24,075,000 31,086,000
Six Months Ended July 31
$ Millions 1997 1996
Sales $528.1 $321.4
Earnings from operations $ 55.2 $ 6.1
Income (loss) before extraordinary items $ 8.5 $ (3.4)
Extraordinary (loss), net of tax $ - $ (7.4)
Net Income (loss) $ 8.5 $(10.8)
Earnings (loss) per share data:
Earnings (loss) before extraordinary items $ 0.37 $ (0.10)
Extraordinary (loss), net of tax $ - $ (0.23)
Net Income (loss) $ 0.37 $ (0.33)
Weighted average common shares 23,246,000 33,084,000
SOURCE Hayes Wheels International, Inc.