15th April 2005 - Hayes Lemmerz Reports 9% Sales Gain for Fiscal Year

Earnings From Operations Excluding One-Time Items Were Lower, Mostly Due to Higher Iron and Steel Prices; Balance Sheet Strengthened

Hayes Lemmerz International today reported that sales for the fiscal year ended January 31, 2005 rose 9.1% to $2.24 billion, compared with $2.06 billion a year earlier, due primarily to strong demand overseas and favorable currency exchange rates. Earnings from operations for the fiscal year were $21.7 million, excluding fresh start accounting adjustments and reorganization items, down from $43.9 million a year earlier.

“Higher iron and steel prices reduced earnings by $18 million for the year and customer production volumes in North America were lower, as well. Given the impact of raw material costs, together with overall difficult industry conditions, I am extremely pleased with the progress we made on the operational initiatives to lower costs and position Hayes Lemmerz for growth and improved earnings in 2005 and beyond," said Curtis Clawson, President, CEO and Chairman of the Board.

"During 2004, we continued our expansions in Thailand, the Czech Republic, Mexico, Turkey and Brazil, closed our Howell, Michigan aluminum wheel facility, and announced the potential divestiture of our Commercial Highway Hub and Drum business. In March 2005, we announced the closure of our La Mirada, California aluminum wheel facility. Our dependence on the North American automotive market continues to decrease, with over 50% of our sales now being generated outside of North America. We have product content on all of the top ten selling platforms in Europe and on seven of the top ten selling platforms in North America. In addition, we have made great strides in diversifying our customer portfolio by decreasing sales to the Big 3 from 54% in fiscal 2001 to 44% in fiscal 2004," said Mr. Clawson.

"We also executed a number of initiatives to strengthen our balance sheet and improve our liquidity position. In February 2004, we completed an equity offering that generated $117.0 million in net proceeds, of which $87.5 million was used to repay existing debt. In December 2004, we completed a $75.0 million domestic accounts receivable securitization program to replace early pay programs that were discontinued by certain domestic OEMs. In April 2005, we amended our credit agreement to provide greater financial flexibility and to allow us to complete a new term loan that generated an additional $75.0 million in corporate liquidity. These actions will facilitate the execution of our corporate strategy and operational initiatives," Mr. Clawson added.

The Company's cash flows from operations increased to $164.6 million in fiscal 2004, from $115.0 million in fiscal 2003. Capital expenditures in fiscal 2004 were $158.7 million, compared with $133.0 million in fiscal 2003. The increased capital expenditures enabled us to continue our low cost country expansion strategy, meet demand for new vehicle platforms and support maintenance and cost reduction programs. Capital expenditures are expected to be approximately $145 million in fiscal 2005.

The Company confirmed that it remains comfortable with its current earnings guidance and outlook for 2005. The Company expects total revenue to be approximately $2.3 billion to $2.4 billion and Adjusted EBITDA(1) to be approximately $220 million to $235 million, while free cash flow is expected to be slightly negative.

Mr. Clawson also noted that for 2005, the Company has negotiated significant steel cost recoveries from customers, and will continue to pass through aluminum price fluctuations to customers.

"As the only truly global aluminum and steel wheel manufacturer, we have expanded our production capacity in low cost countries. This strategy paid off in 2004. Higher volumes in international markets boosted sales $154 million, more than offsetting the $65 million reduction in OEM production requirements in North America," Mr. Clawson said.

"We believe that our global presence, with low cost manufacturing facilities on five continents, represents a significant strategic advantage for us as the automotive industry continues to globalize its production. We have more plants that are closer to vehicle manufacturing facilities than any other wheel and related components manufacturer. Most of our plants use state-of-the-art technology that allows us to meet customers' needs for technologically advanced wheels and components at a lower cost than our competitors," he added.

For the fiscal year ending January 31, 2005, Hayes Lemmerz had a net loss of $62.3 million, compared with a year-earlier profit of $996.5 million. The results are not comparable because the Company emerged from Chapter 11 reorganization in 2003, resulting in significant accounting items that do not reflect ongoing business results. The Company believes that earnings from operations excluding one-time items, as reported above, provide information that is most useful to investors to measure business results.

Hayes Lemmerz International, Inc. is a leading global supplier of automotive and commercial highway wheels, brakes, powertrain, suspension, structural and other lightweight components. The Company operates 42 facilities and has approximately 11,000 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.

Source: Hayes Lemmerz Press Release