NORTHVILLE, MI-- Hayes Lemmerz International has reported financial results for its fiscal year, which ended Jan. 31. The company said results were in line with guidance provided to investors in December 2005, when it released fiscal third quarter results.

For the fiscal year, the automotive wheels and components maker reported sales of $2.28 billion, up 6.6 percent from sales of $2.14 billion in the prior fiscal year. Loss from operations, excluding one-time impairment charges, for fiscal 2005 was $14.9 million, compared to earnings from operations, excluding one-time impairment charges, of $22 million a year earlier.

Adjusted EBITDA for fiscal 2005 was $185.4 million, down from $223.9 million a year earlier. Capital expenditures for the fiscal year were $123.5 million, down from $156.2 million a year earlier.

The company reported a net loss of $461.9 million for fiscal 2005, compared to a net loss of $62.3 million for fiscal 2004. The company also reported non-cash charges of approximately $185.5 million for the impairment of goodwill and $195 million for the impairment of other long-lived assets. Excluding the one-time impairment charges, the net loss was $81.4 million compared to a $60.1 million net loss a year earlier.

"During this very challenging business environment we remain focused on implementing our strategic plan, which emphasizes streamlining and improving our business in higher-cost regions, investing in process and product innovations like our new Flex wheel, and expanding capacity in low-cost countries close to our broad international customer base," said Curtis Clawson, president, chief executive officer and chairman of the board of Hayes Lemmerz.

In accordance with these initiatives, the company has combined its North American Wheel and International Wheel business units, creating a Global Wheel Group, and has consolidated its suspension components business unit and its automotive brake and powertrain components business unit, creating an automotive components group. The company will also close its Huntington, IN, aluminum wheel plant in 2006 and reduce employee wage and benefit costs, primarily for its U.S. locations. The company estimates annual savings from these actions will total approximately $35 million.

"Our dependence on the North American automotive market continues to decrease, with approximately 54 percent of our sales now being generated outside of North America. This past year, we completed important strategic expansions in plants located in the Czech Republic, Brazil, Mexico, Turkey and Thailand. We believe that these expansion efforts position us well for future growth," said Clawson.

"We have a strong market position and enjoy customer relationships with every major auto manufacturer. We secured over $325 million in new and carry over business during fiscal 2005. We are winning internationally with Japanese and Korean OEM's, and we continue to secure business with Japanese customers in North America," Clawson said.

"Our steel wheel business is number one globally, and our international aluminum wheel business is growing rapidly -- up 11 percent in unit volume in 2005," he said. "The U.S. market for aluminum wheels is showing strong demand for large specialty wheels, but flat demand and overcapacity for small wheels," Clawson said. In response to these conditions, the company has reduced capacity in the U.S. for small wheel production and expanded production of large specialty wheels at its Gainesville, GA, plant.

The company maintained liquidity at year end of $124 million through the sale of non-core assets, reducing capital expenditures, reducing inventory and the completion of an accounts receivable financing program in Germany. The company also recently announced that that it has amended its $625 million senior secured credit facility. Among other changes, the amendment favorably modifies certain financial covenants and provides the Company with additional financial flexibility to execute its strategy of product leadership and growth in select geographic regions.

In 2006, the company will continue its focus on improving free cash flow and reducing capital expenditures, which are targeted at less than $100 million. The company expects sales for 2006 to be approximately $2 billion, primarily due to reductions in North American volumes. The Company expects adjusted EBITDA and free cash flow to improve in 2006 versus 2005.

To learn more about Hayes Lemmerz, go to: www.hayes-lemmerz.com .

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