Hayes Lemmerz Increases Adjusted EBITDA Guidance for Fiscal 2008 Following Strong Second Quarter Results
04 Septembre 2008 - 2:13PM
PR Newswire (US)
Adjusted EBITDA Up 40% and Core Operating Earnings Up 87% from
Prior Year NORTHVILLE, Mich., Sept. 4 /PRNewswire-FirstCall/ --
Hayes Lemmerz International, Inc. (NASDAQ:HAYZ) today announced
that it is increasing its fiscal 2008 Adjusted EBITDA guidance as
it reported substantially improved Adjusted EBITDA, core operating
earnings and liquidity for the second fiscal quarter ended July 31,
2008. Updated Guidance Curtis J. Clawson, President, CEO and
Chairman of the Board, said, "We are increasing the Company's
Adjusted EBITDA guidance for fiscal 2008 to $225 million to $240
million, up $20 million from prior guidance of $205 million to $220
million. Capital expenditures have been reduced for the year and
are now expected to be between $90 million to $100 million, down $5
million from prior guidance of $95 million to $105 million. We are
also affirming the Company's sales guidance of $2.1 billion to $2.3
billion for fiscal 2008." Second Quarter Results Compared to the
year earlier quarter, Adjusted EBITDA for the second quarter
improved 40%, to $63.9 million from $45.8 million and the Adjusted
EBITDA margin rose to 11.3% from 8.4%. Adjusted EBITDA for the
first half of the fiscal year was $118.5 million, up $22.6 million
or 24% from the prior fiscal year. Compared to the year earlier
quarter, core operating earnings for the second quarter improved
87% to $33.8 million from $18.1 million. Core operating earnings
for the first half of the fiscal year were $59.0 million, an
improvement of $19.8 million or 51% from the prior fiscal year.
"This was a very good quarter for Hayes Lemmerz and, although there
is the potential for higher steel prices and further reductions in
customer production volumes, the outlook for the full fiscal year
has improved. Despite challenging industry conditions, our Adjusted
EBITDA and core operating earnings improved significantly. Our good
results reflect a strong overall performance including the benefits
of our recent investments in leading-cost, high-growth areas, such
as Brazil, the Czech Republic, Turkey, India and Thailand," Mr.
Clawson said. Sales in the second fiscal quarter were $563.5
million, up 4% from $544.1 in the year earlier quarter, due
primarily to favorable currency exchange rates. For the first half
of the fiscal year, Hayes Lemmerz reported sales of $1.14 billion,
up 9.1% from $1.04 billion in the first half of the prior fiscal
year. The Company's net loss in the quarter decreased to $47.0
million, an improvement of $40.1 million compared with a net loss
of $87.1 million in the year earlier quarter. The Company reported
a net loss for the first half of $59.8 million, down $42.6 million
from a net loss of $102.4 million in the first half of the prior
fiscal year. At the end of the second quarter the Company had $222
million in total liquidity, an improvement of $27 million compared
with the year earlier quarter. "I am satisfied with this level of
liquidity during these difficult times in our industry," Mr.
Clawson said. Free Cash Flow During the quarter the Company had
negative free cash flow of $33.8 million excluding its accounts
receivable programs, compared to negative $15.1 million in the year
earlier quarter. Cash expenditures for restructuring and
divestitures during the quarter negatively impacted free cash flow
by approximately $36 million. The Company is targeting positive
free cash flow for the full fiscal year, excluding the impact of
its accounts receivable programs and planned and completed
restructuring and divestiture activities. Implementation of
Strategic Plan The Company also announced the sale of its aluminum
wheel facility in Hoboken, Belgium during the quarter, in addition
to other previously announced restructuring plans. "The divestiture
of our aluminum wheel facility in Hoboken, Belgium in June, the
expected closure of our Gainesville, Georgia, aluminum wheel
facility and the planned divestiture of our powertrain facility in
Nuevo Laredo, Mexico, will have a positive impact on our long-term
financial performance. We have now essentially completed the
process of divesting facilities and product lines that have
negatively impacted our earnings," said Fred Bentley, Chief
Operating Officer. "Five years ago, we were saddled with a number
of unprofitable facilities, heavily dependent upon the health of
the U.S. auto market, and equally dependent upon the success of a
small number of customers. Today, we are the only company with a
cost-effective manufacturing presence in both steel and aluminum
wheels in almost every global market," he said. "Our strategic
focus on improving product, customer and geographic diversification
is providing ever-increasing benefits." Mr. Bentley noted that the
Company's geographic distribution of sales has changed
significantly: from 45% of total sales in the domestic U.S. market
in 2004 to an estimated 13% in fiscal 2008 (excluding the three
facilities being closed or divested), from 4% to 16% in South
America, from 15% to 24% in Eastern Europe, and from 29% to 34% in
Western Europe. Overall, sales in leading-cost countries have
almost doubled since 2004, reducing the Company's reliance on the
domestic U.S. market. "Our largest single customer today is based
in the U.S., but 79% of our business with that customer is in other
regions," Mr. Bentley added. "We have also greatly diversified our
customer base since 2004. We are continuing to win new business
with European and U.S. customers, and we are increasingly winning
with Asian OEMs," said Mr. Bentley. "The Company expects to meet or
exceed last year's record of $430 million of new business, with
wins spread across its customer base," he added. "Although sales
are essentially even with 5 years ago, the Company's employee count
is down 33% during that period, and employment in high-cost regions
is down more than 60%," he said. Mr. Bentley also noted that the
Company's product mix is well balanced, with aluminum light vehicle
wheels, steel light vehicle wheels, and commercial truck wheels
each accounting for approximately one-third of the Company's sales.
Use of Non-GAAP Financial Information EBITDA, a measure used by
management to measure operating performance, is defined as earnings
from operations plus depreciation and amortization. Adjusted EBITDA
is defined as EBITDA adjusted to exclude asset impairment losses
and other restructuring charges, reorganization items and other
items. Management references these non-GAAP financial measures
frequently in its decision making because they provide supplemental
information that facilitates internal comparisons to historical
operating performance of prior periods and external comparisons to
competitors' historical operating performance. Institutional
investors generally look to Adjusted EBITDA in measuring
performance, among other things. The Company uses Adjusted EBITDA
to facilitate quantification of planned business activities and
enhance subsequent follow-up with comparisons of actual to planned
Adjusted EBITDA. Free cash flow is defined as cash from operating
activities minus capital expenditures plus cash from or less cash
used in the sale of assets. Management uses free cash flow to
identify the amount of cash available to meet debt amortization
requirements, pay dividends to stockholders or make corporate
investments. Core operating earnings is defined as earnings from
operations less asset impairments and restructuring charges,
post-emergence chapter 11 related costs, gains and losses on sales
of assets, and other special items that are of an infrequent or
unusual nature. Core operating earnings is used by management as a
non-GAAP financial measure because it is more indicative of
operating performance due to exclusion of non-operating,
infrequent, or unusual items. For a reconciliation of these
non-GAAP financial measures to the most comparable GAAP measures,
please refer to pages 30-32 of the slide presentation accompanying
the conference call. Conference Call Hayes Lemmerz will host a
telephone conference call to discuss the Company's fiscal year 2008
first quarter financial results on Thursday, September 4, 2008, at
10:00 a.m. (ET). To participate by phone, please dial 10 minutes
prior to the call: (888) 295-5935 from the United States and Canada
(706) 758-0212 from outside the United States Callers should ask to
be connected to Hayes Lemmerz financial results conference call,
Conference ID# 57408464. 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_Relations.html. A replay
of the call will be available from 1:00 p.m. (ET), September 4,
2008, until 11:59 p.m. (ET), September 14, 2008, by calling (800)
642-1687 (within the United States and Canada) or (706) 645-9291
(for international calls). Please refer to Conference ID# 57408464.
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 world leading global
supplier of automotive and commercial highway wheels. The Company
has 23 facilities and over 7,000 employees worldwide. Forward
Looking Statements This press release contains forward-looking
statements with respect to our financial condition and business.
All statements other than statements of historical fact made in
this press release are forward-looking. Such forward-looking
statements include, among others, those statements including the
words "expect," "anticipate," "intend," "believe," and similar
language. These forward-looking statements involve certain risks
and uncertainties. Our actual results may differ significantly from
those projected in the forward-looking statements. Factors that may
cause actual results to differ materially from those contemplated
by such forward-looking statements include, among others: (1)
competitive pressure in our industry; (2) fluctuations in the price
of steel, aluminum, and other raw materials; (3) changes in general
economic conditions; (4) our dependence on the automotive industry
(which has historically been cyclical) and on a small number of
major customers for the majority of our sales; (5) pricing pressure
from automotive industry customers and the potential for
re-sourcing of business to lower-cost providers; (6) changes in the
financial markets or our debt ratings affecting our financial
structure and our cost of capital and borrowed money; (7) the
uncertainties inherent in international operations and foreign
currency fluctuations; and (8) the risks described in our most
recent Annual Report on Form 10-K and our periodic statements filed
with the Securities and Exchange Commission. You are cautioned not
to place undue reliance on the forward-looking statements, which
speak only as of the date of this press release. HAYES LEMMERZ
INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
OPERATIONS (Millions of dollars) (Unaudited) Three Months Six
Months Ending Ending July 31 July 31 2008 2007 2008 2007 Net sales
$563.5 $544.1 $1,137.3 $1,042.7 Cost of goods sold 491.6 491.0
1,001.7 933.4 Gross profit 71.9 53.1 135.6 109.3 Marketing, general
and administration 39.4 45.5 78.7 80.8 Amortization of intangibles
2.9 2.6 5.7 5.0 Asset impairments and other restructuring charges
5.8 1.5 9.1 3.9 Other (income) expense, net 34.1 9.5 30.7 7.5
Earnings from operations (10.3) (6.0) 11.4 12.1 Interest expense,
net 14.3 15.8 27.6 33.9 Other non-operating expense 1.0 0.1 2.7 0.1
Loss on early extinguishment of debt - 21.2 - 21.5 Earnings (loss)
before income taxes and minority interest (25.6) (43.1) (18.9)
(43.4) Income tax expense 14.6 13.3 27.6 21.8 Loss before minority
interest (40.2) (56.4) (46.5) (65.2) Minority interest 6.8 5.7 13.3
9.5 Loss from continuing operations (47.0) (62.1) (59.8) (74.7)
Loss from discontinued operations - (25.0) - (27.7) Net loss (47.0)
(87.1) (59.8) (102.4) Loss per common share data Basic and diluted:
Loss from continuing operations $(0.46) $(0.78) $(0.59) $(1.25)
Loss from discontinued operations - (0.32) - (0.46) Net loss
$(0.46) $(1.10) $(0.59) $(1.71) Weighted average shares outstanding
(in millions) 101.1 79.3 101.1 59.9 HAYES LEMMERZ INTERNATIONAL,
INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Millions of
dollars) (Unaudited) Balance as of July 31, 2008 January 31, 2008
ASSETS Current assets: Cash and cash equivalents $87.5 $160.2
Receivables 295.0 305.6 Other Receivables 43.2 48.3 Inventories
218.4 179.1 Assets held for sale 26.5 21.4 Prepaid expenses and
other 14.6 12.2 Total current assets 685.2 726.8 Property, and
plant equipment, net 630.8 616.8 Goodwill, intangibles and other
long term assets 478.2 462.3 Total assets $1,794.2 $1,805.9
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Bank
borrowings and other notes $54.9 $32.9 Current portion of long-term
debt 5.0 4.8 Accounts payable and other accrued liabilities 413.8
448.4 Liabilities held for sale 8.6 8.2 Other Short Term
Liabilities 66.4 61.6 Total current liabilities 548.7 555.9
Long-term debt, net of current portion 601.6 572.2 Pension and
other long-term liabilities 400.4 405.0 Minority interest 74.7 70.5
Stockholders' equity: Common stock, par value $0.01 per share 1.0
1.0 Additional paid in capital 884.2 882.0 Retained earnings
(990.0) (928.7) Accumulated other comprehensive income 273.6 248.0
Total stockholders' equity 168.8 202.3 Total liabilities and
stockholders' equity $1,794.2 $1,805.9 HAYES LEMMERZ INTERNATIONAL,
INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions of dollars) (Unaudited) Six Months Ending July 31 2008
2007 Cash provided by operating activities $(12.8) $(6.7) Cash
flows from investing activities: Purchase of property, plant,
equipment and tooling (43.0) (40.8) Proceeds from sale of assets
(26.4) 1.1 Cash used for investing activities (69.4) (39.7) Cash
flows from financing activities: Changes in bank borrowings and
credit facility 20.8 (0.3) Proceeds from revolving credit facility
0.0 0.0 Repayment of long term debt (1.5) (133.3) Proceeds from
issuance of common stock 0.0 193.1 Fees paid for Rights Offering
0.0 (31.5) Dividends paid to minority shareholders (10.8) (10.1)
Cash provided by (used for) financing activities 8.5 17.9 Net cash
provided by discontinued operations - 39.4 Effect of exchange rate
changes on cash and cash equivalents 1.0 2.9 Increase in cash and
cash equivalents (72.7) 13.8 Cash and cash equivalents at beginning
of period 160.2 38.5 Cash and cash equivalents at end of period
$87.5 $52.3 DATASOURCE: Hayes Lemmerz International, Inc. CONTACT:
Marika P. Diamond of Hayes Lemmerz International, Inc.,
+1-734-737-5162 Web site: http://www.hayes-lemmerz.com/
http://www.hayes-lemmerz.com/Investor_Relations.html
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