Hayes Lemmerz Amends Credit Agreement, Updates Fiscal Year 2005 Guidance and Initiates Further Actions to Enhance Shareholder V
March 31 2006 - 8:08PM
PR Newswire (US)
NORTHVILLE, Mich., March 31 /PRNewswire-FirstCall/ -- Hayes Lemmerz
International, Inc. (NASDAQ:HAYZ) announced today that it has
concluded an agreement with its lending group to amend its $625
million senior secured credit facility. Among other changes, the
amendment favorably modifies certain financial covenants. "This
amendment provides Hayes Lemmerz with additional financial
flexibility as we continue to rationalize our manufacturing
footprint, implement cost reduction initiatives, and capitalize on
growth opportunities within our core businesses and in select
geographic regions. We appreciate our lending group's continuing
support of our strategic direction and financial priorities," said
Curtis Clawson, President, CEO and Chairman of the Board. The
Company also announced today that it has updated its fiscal 2005
earnings guidance issued on December 8, 2005. The Company expects
revenue of approximately $2.3 billion for the full fiscal year
ended January 31, 2006, in line with previous guidance of $2.2
billion to $2.3 billion. Adjusted EBITDA, excluding certain
non-cash charges for impairment of goodwill and long-lived assets,
is expected to be approximately $185 million, in line with its
previous guidance of $180 million to $190 million. Capital
Expenditures for the year are expected to be approximately $125
million, slightly lower than previous guidance of $130 million.
Consistent with its strategy of investing in core businesses in the
right geographic markets, the Company recently announced
consolidation of its North American and International Wheel Groups
to create a new Global Wheel Group and the closure of its
Huntington, Indiana facility. The Company also said that it will be
making further organizational and employee wage and benefit changes
in North America. The Company expects combined cost savings from
all of these actions of at least $35 million annually. "These
initiatives are consistent with our strategic objective of
streamlining and improving the efficiencies of our business in
higher cost regions, in order to remain competitive in these
countries," said Mr. Clawson. The Company also anticipates that it
will record charges of approximately $195 million for the
impairment of goodwill and an additional $160 million for the
impairment of long-lived assets. Both of these charges are non-cash
and will be recorded in the fourth quarter of 2005. EBITDA, a
measure used by management to measure operating performance, is
defined as earnings from operations plus depreciation and
amortization. Adjusted EBITDA is defined as EBITDA further adjusted
to exclude asset impairment losses and other restructuring charges,
reorganization items and other items. Management references these
non-GAAP financial measures frequently in its decision making
because they provide supplemental information that facilitates
internal comparisons to historical operating performance of prior
periods and external comparisons to competitors' historical
operating performance. Institutional investors generally look to
Adjusted EBITDA in measuring performance, among other things. The
Company uses Adjusted EBITDA to facilitate quantification of
planned business activities and enhance subsequent follow-up with
comparisons of actual to planned Adjusted EBITDA. In addition,
incentive compensation for management is based on Adjusted EBITDA.
See the appendix attached to this press release for a
reconciliation of estimated Adjusted EBITDA to estimated earnings
from operations. Hayes Lemmerz will host a telephone conference
call to discuss the Company's fiscal year 2005 year-end financial
results on Tuesday, April 11, 2006, at 10:00 a.m. (ET). To listen
to the call, please dial (888) 295-5935 from the United States and
Canada or (706) 643-7483 from outside the United States, and enter
the access code: 6701974. The conference call will be accompanied
by a slide presentation, which can be accessed that morning through
the Company's web site, in the Investor Kit presentations section
at
http://www.hayes-lemmerz.com/investor_kit/html/presentations.html
Hayes Lemmerz International, Inc. is a world leading global
supplier of automotive and commercial highway wheels, brakes,
powertrain, suspension, structural and other lightweight
components. The Company has 35 facilities and approximately 10,000
employees worldwide. This press release includes forward looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934, as
amended, which represent the Company's expectations and beliefs
concerning future events that involve risks and uncertainties which
could cause actual results to differ materially from those
currently anticipated. All statements other than statements of
historical facts included in this release are forward looking
statements. Factors that could cause actual results to differ
materially from those expressed or implied in such forward looking
statements include the factors set forth in our periodic reports
filed with the SEC. Consequently, all of the forward looking
statements made in this press release are qualified by these and
other factors, risks, and uncertainties. Appendix The following is
a reconciliation of estimated Adjusted EBITDA to estimated earnings
(loss) from operations: Estimated Fiscal Year-Ended 1/31/06
(dollars in millions) Earnings (loss) from operations $(404)
Depreciation & Amortization 165 EBITDA $(239) Asset impairments
and other restructuring charges 202 Goodwill impairments 195
Post-emergence Chapter 11 related professional fees 3 Equity
compensation expense 5 EBITDA from discontinued operations 10
Severance & Other 9 Adjusted EBITDA $185 DATASOURCE: Hayes
Lemmerz International, Inc. CONTACT: Marika P. Diamond of Hayes
Lemmerz International, Inc., +1-734-737-5162
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