June 7, 2007 -- Hayes Lemmerz International, Inc. today reported that sales for the fiscal first quarter ended April 30, 2007 were $561.0 million, up 11.4% from $503.5 million in the year earlier quarter. The sales increase came from strong international steel and aluminum wheel sales, metals cost recovery and favorable currency fluctuations, the Company said. Sales increased despite a reduction in U.S. sales volumes of $27 million, due primarily to closure of a wheel plant and lower components volume, the Company said.
For the fiscal first quarter, the Company reported Adjusted EBITDA of $54.6 million, up $9.2 million from $45.4 million a year earlier and earnings from operations of $20.1 million, up from the $7.4 million a year earlier. The Company reported a loss from continuing operations of $10.8 million, improved from a loss of $17.1 million in the year earlier quarter. The Company also reported a $4.5 million loss from discontinued operations compared to a loss of $0.5 million a year earlier, resulting in a net loss of $15.3 million, compared with a year earlier loss of $17.6 million. Free cash flow for the first quarter, excluding the effects of the Company's accounts receivables securitization program, was negative $5.0 million, compared to positive $12.1 million in the first quarter of fiscal 2006, which included a one-time customer terms adjustment.
"We continue to reap benefits from our international expansion and our relentless focus on improving operational efficiency," said Curtis Clawson, President, Chief Executive Officer and Chairman of the Board. "Our wheel volumes were up approximately 16% in low cost regions. Earnings from operations increased significantly compared with 2006 and operating margins continue to improve. I am happy about these results especially in the face of an 8% decrease in North American production by the Domestic Big Three automakers," he said.
On May 30, the Company announced that it had successfully completed recapitalization transactions that included a $180 million equity rights offering and a direct investment by Deutsche Bank Securities, Inc. of $13.1 million, approximately $495 million of senior secured debt issued by a European subsidiary and 8 1/4% senior notes due 2015 of €130 million, also issued by a European subsidiary. The recapitalization is expected to reduce interest cost by approximately $15 million in 2007 and by $24 million annually; for fiscal 2006, the Company's total interest cost was $76.2 million.
"Our excellent operational progress contributed significantly to the success of our recent refinancing, which raised new equity, retired high cost debt, reduced our leverage, strengthened our balance sheet and improved liquidity by $80 million," Mr. Clawson said. "We were happy to see high demand for the bond and bank debt, and oversubscription of the equity rights offering."
The Company also announced today that it is reaffirming its earnings guidance for the full fiscal year 2007 that was updated on May 15, 2007. The Company expects revenue of approximately $2.2 billion for the full fiscal year ending January 31, 2008. Adjusted EBITDA is expected to be in the range of $200 million to $210 million. The Company expects positive free cash flow (excluding securitization impact). Capital expenditures for the year are expected to be approximately $90 to $95 million.
Source: Hayes Lemmerz International, Inc.
