NORTHVILLE, MI -- Hayes Lemmerz International, Inc. reported that sales for the fiscal first quarter ending April 30 were $572.8 million, down 2.8 percent from $589.2 million a year earlier, with approximately 56 percent of sales from international markets. The reduction in sales was primarily the result of unfavorable currency exchange rates and the loss of sales from divested operations, with higher international volumes being offset by lower demand. In the U.S., Earnings from operations for the fiscal first quarter were $7.4 million, down from $13.2 million a year earlier.

Adjusted EBITDA for the first quarter was $48.7 million, down from $60.9 million in the first quarter of fiscal 2005. Capital expenditures during the quarter were $12.3 million, a reduction of $24.1 million from the prior year period. For the quarter, the company reported a net loss of $17.6 million, compared with a year earlier loss of $7.7 million.

Free cash flow for the first quarter, excluding the effects of the company's accounts receivables securitization program, was slightly negative (an outflow of $0.4 million), an improvement of $30.3 million compared to an outflow of $30.7 million in the first quarter of fiscal 2005. Total liquidity improved by $20 million during the quarter to $144 million at quarter end, compared to $124 million at the end of fiscal 2005.

To further improve liquidity, the company has established a new $65 million asset-backed receivables securitization program, which replaced the existing securitization program and is expected to provide about $30 million of additional liquidity.

"Our key goals for 2006 are to execute on our operating plan, focus our capital expenditures in growth areas, maintain adequate liquidity and drive toward positive free cash flow," said Curtis Clawson, president, CEO, and chairman of the Board. "I am pleased with our progress in all four areas.

In addition to the previously announced business unit restructuring and employee compensation actions, our newly expanded Chihuahua plant is now running at full capacity and we have a number of key product launches coming in the remainder of the year. In addition to reducing capital expenditures, we have focused what we do spend on growth areas, with 62 percent of capital expenditures during the first quarter being invested outside the U.S. We also improved liquidity and made substantial progress toward achieving positive free cash flow during the quarter."

"For the full 2006 fiscal year, the company expects to achieve higher adjusted EBITDA and improved free cash flow than in fiscal 2005, with capital expenditures of less than $100 million," Clawson added.

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