Hayes Lemmerz Third Quarter Sales Down 2.4 Percent

Hayes Lemmerz International has reported that sales for the fiscal third quarter ended Oct. 31, were $589.5 million, down 2.4 percent from $604 million a year earlier. Loss from operations for the fiscal third quarter was $27.6 million, compared with earnings from operations of $16.8 million in the third quarter of 2005. The company's net loss in the third quarter was $59.6 million, compared to a net loss of $13.3 million in the same period a year earlier. The loss includes a $39 million asset impairment charge related to the company's suspension facilities in Bristol, IN, and Montague, MI. Excluding the impairment charge, the company had earnings from operations of $11.4 million and a net loss of $20.6 million during the quarter.

NORTHVILLE, MI — Hayes Lemmerz International has reported that sales for the fiscal third quarter ended Oct. 31, were $589.5 million, down 2.4 percent from $604 million a year earlier. Loss from operations for the fiscal third quarter was $27.6 million, compared with earnings from operations of $16.8 million in the third quarter of 2005. The company’s net loss in the third quarter was $59.6 million, compared to a net loss of $13.3 million in the same period a year earlier. The loss includes a $39 million asset impairment charge related to the company’s suspension facilities in Bristol, IN, and Montague, MI. Excluding the impairment charge, the company had earnings from operations of $11.4 million and a net loss of $20.6 million during the quarter.

"Although our sales were down 2.4 percent, they reflect the company’s move to a more diverse customer base when compared to the 15 percent declines in Big 3 production volumes in North America," said Curtis Clawson, president, CEO and chairman of the board.

In the third quarter, Hayes Lemmerz reported free cash flow of $27.6 million, excluding the impact of the company’s securitization program, up $5 million from a year earlier. The company reduced its overall debt by approximately $24 million in the third quarter. Liquidity as of Oct. 31 was $158 million, an increase of $6 million from July 31.

The company reported adjusted EBITDA for the quarter of $52.7 million, a decline of $5.3 million from a year earlier.

During the third quarter, Hayes Lemmerz sold its Southfield, MI, suspension machining facility, which further reduced the company’s dependence on the North American automotive market.

"We are continuing to execute our operating plan, focus our capital expenditures in high growth/low cost areas, maintain adequate liquidity and drive positive free cash flow," said Clawson. "Our customer and geographic mix continue to improve, and our restructuring efforts are on track, generating substantial savings as we go forward," he added.

So far this year, Hayes Lemmerz has won more than $475 million of new business, 80 percent of which is with international customers, including Asian OEMs Toyota, Hyundai, Nissan and Honda, and European OEMs Volkswagen, Audi, BMW, Renault and Fiat. The company is continuing to diversify its product mix in North America, as the market shifts toward passenger cars and cross-over SUVs.

A core component of Hayes Lemmerz’ strategy is to grow by maximizing customer satisfaction. "Hayes Lemmerz is proud to supply wheels to all of the ten top selling platforms in Europe, and to seven of the ten top selling platforms in North America," said Clawson. "Additionally, for the fifth consecutive year, Hayes Lemmerz’ South Africa Operation was recognized with Ford Motor of Southern Africa’s Supplier of the Year award."

For the full year, Hayes Lemmerz expects to achieve sales of $2.2 billion to $2.3 billion, improved adjusted EBITDA compared with 2005, and capital expenditures of $75-85 million. In the fourth quarter, the company expects to expand capacity at its aluminum wheel plants in the Czech Republic, Thailand and Turkey.

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