NORTHVILLE, MI — Hayes Lemmerz International has reported financial results for its fiscal year ended Jan. 31. The results were in line with preliminary results announced on March 16, and with guidance the company provided to investors in December 2006.
For the fiscal year, the automotive and commercial highway wheels and components maker reported sales of $2.06 billion, up 5.1 percent from sales of $1.96 billion in the prior fiscal year. Earnings from operations were $4.8 million for fiscal 2006, compared with a year earlier loss from operations of $215.2 million, which included $185.5 million of goodwill impairment charges. Capital expenditures for the fiscal year were $80.8 million, down from $95.2 million a year earlier. The foregoing results exclude the suspension components business reported as discontinued operations, which
had sales of $230 million, a loss from operations of $46 million and capital expenditures of $9.1 million.
The company reported a net loss of $166.9 million for fiscal 2006, compared to a net loss of $457.5 million for fiscal 2005. The company reported a loss from continuing operations of $120.9 million, compared with a loss from continuing operations of $287.1 million a year earlier.
Adjusted EBITDA for fiscal 2006 (including the suspension components business) was $188.6 million, up 7.3 percent from $175.7 million a year earlier. For the full fiscal year, Hayes Lemmerz reported free cash flow of negative $9.1 million, excluding the impact of the company’s securitization program, an improvement of $71.6 million from a year earlier.
"Hayes Lemmerz is a much stronger company today than it was five years ago," said Curtis Clawson, president, CEO and chairman of the board of Hayes Lemmerz. "We have significantly decreased our dependence on U.S. markets, and continue to grow our international business, especially in Asia. By divesting non-core businesses and focusing on high growth/high return markets, we are continuing to execute our strategic business plan and our drive toward profitability and positive free cash flow. Sales to GM, Ford and Chrysler in the U.S., excluding discontinued operations, now account for only about 18 percent of global sales. Given the extremely difficult conditions in our marketplace, our results for 2006 are encouraging."
As previously announced, as part of its continuing profit-enhancing initiatives, the company completed the sale of two aluminum suspension components plants in February 2007.
"These divestitures further reduce our dependence on the North American automotive market and free us from a very capital-intensive business," said Clawson. "Our new business wins point the way toward our future. We won more than $575 million in annualized sales in 2006, of which 75 percent is international business. We continue to win with Japanese and Korean manufacturers, including Toyota, Hyundai, Nissan and Honda, both in the U.S. and internationally. We continue to win new business with our European partners, and in the U.S. markets our new business wins diversify our product mix with more crossover and passenger vehicles," he said.
As previously announced, the company’s board of directors has approved a rights offering for existing shareholders, for up to $180 million of common stock. Proceeds will be used to repurchase the company’s 10.5 percent Senior Notes. The offering must be approved by shareholders at a special meeting scheduled for May 4.
"By raising new equity capital and retiring high-cost debt, we are de-leveraging, strengthening our balance sheet and significantly improving free cash flow," Clawson commented.
For the full fiscal year 2007, Hayes Lemmerz expects to achieve sales of about $2.1 billion, Adjusted EBITDA of approximately $195 to $205 million, positive free cash flow (excluding securitization impact) and capital expenditures of approximately $85 to $90 million.
For more information about Hayes Lemmerz, go to: http://www.hayes-lemmerz.com
