NORTHVILLE, MI -- Hayes Lemmerz International has reported that sales for the fiscal second quarter ended July 31 were $583.4 million, up 4.9 percent from $556 million a year earlier. Earnings from operations for the fiscal second quarter were $10.8 million, significantly improved from a loss from operations of $48.6 million in the year earlier quarter. For the second fiscal quarter, the company's net loss was $26.9 million, improved from a loss of $70.3 million in the prior year quarter.

Hayes Lemmerz reported free cash flow, excluding the impact of the company's securitization program, of negative $10.3 million in the second quarter, improved from a negative $41.8 million in the year earlier quarter. Liquidity as of July 31 was $152 million, compared with $129 million a year earlier. In the recent quarter, the company obtained approximately $30 million of additional liquidity by restructuring its North American securitization program.

"We continue to execute our strategy of growth in the right places, improved cash flow and stronger liquidity," said Curtis Clawson, president, chief executive officer and chairman of the board.

The company reported adjusted EBITDA for the second quarter of 2006 of $49.1 million, an improvement of $10.9 million over the year earlier quarter and YTD adjusted EBITDA was $97.9 million, a $1.9 million improvement from a year earlier.

During the second quarter 2006, the company put in place North American employee compensation restructuring programs that are expected to save $25 million in 2006 and $10 million per year ongoing. In addition, business unit restructuring initiatives are expected to save $25 million per year ongoing. "These restructuring initiatives enhance our position as a low-cost producer in the industry and improve our competitive position for the future," Clawson said.

The company also entered the Russian marketplace during the quarter with a licensing arrangement that will combine advanced Hayes Lemmerz steel wheel technology with a local business partner's market knowledge and experience. "This agreement allows us to participate in this rapidly growing market without the need for any significant upfront investment," Clawson said.

"I am pleased with our performance for the second quarter. We saw significant improvement in key financial and operational parameters," said Clawson. "Our sales are up, our productivity continues to improve and we continue to win new business in growing markets," he said. "Some 75 percent of our $385 million of new business wins in the first half are in international markets, including major wins with Japanese and Korean automakers including Toyota, Hyundai, Nissan and Honda, as well as European manufacturers including Volkswagen, Audi, BMW, Renault and Fiat; in the North American market we are increasingly diversifying our product mix with more cross-over SUVs and more passenger cars," he said. "Given the changing buying patterns of American consumers, this is very important for us."

A core component of Hayes Lemmerz' strategy is to grow by maximizing customer satisfaction. "We are extremely proud that Volkswagen has named our steel wheel plant in Brazil as a 'Supplier of the Year,'" Clawson said.

For the full year, Hayes Lemmerz expects to achieve sales of $2.2 billion to $2.3 billion, improved EBITDA compared with 2005, and capital expenditures of $80 million to $90 million, and to continue to concentrate on improving free cash flow and cash generation. Capital expenditures in the first half totaled approximately $30 million. For the remainder of the year, the company will focus its capital expenditures on expanding capacity in low-cost strategic markets, including capacity expansions at Czech, Thai and Turkish aluminum wheel plants and its India truck steel wheel plant.

For more information about Hayes Lemmerz, go to: http://www.hayes-lemmerz.com