Hayes Lemmerz International Inc
Hayes Lemmerz International — FY2007 Earnings Presentation
35 slides from Hayes Lemmerz International's earnings presentation, Apr 10, 2008
Slide 1: 2007 Earnings Presentation
2007 Earnings Presentation April 10, 2008
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements with respect to our financial condition and business. All statements other than statements of historical fact made in this press release are forward-looking. Such forward-looking statements include, among others, those
Slide 3: Agenda
Agenda Company Overview & Highlights Curt Clawson, President, CEO & Chairman of the Board Fred Bentley, Chief Operating Officer Financial Review Jim Yost, Executive Vice President & CFO
Slide 4: Our Vision
BE A PREMIER AUTOMOTIVE SUPPLIER Be the lowest cost producer Have the best people in the industry Grow through maximizing our customer satisfaction Our Vision
Slide 5: Short-Term Execution Goals for 2007
Short-Term Execution Goals for 2007 Execute operating plan Restructuring Extend the lead in Global Wheels Positive free cash flow Status1 1 Status: green = achieved; yellow = in progress, on track; red = not on track
Slide 6: Execute Operating Plan: 2007 Financial Highlights
Execute Operating Plan 2007 Financial Highlights 2007 2006 YTD 192 156.49 2007 2006 YTD 72.7 37.3 2007 2006 YTD 38.3 -28.9 2006 2007 Sales 2007 2006 YTD 2126.7 1796.8 Adjusted EBITDA ($ in millions) Core Operating Earnings1 Free Cash Flow (Excl. A/R Programs) Liquidity 2006 2006 2006 2006 2007 2007
Slide 7: Strategic Growth Investments Paying Off
2005 2006 2007 East 1726 1797 2126.7 Execute Operating Plan Strategic Growth Investments Paying Off ($ in millions) Adjusted EBITDA growth of 38% since 2005 Sales 2005 2006 2007 East 139.2 156.49 192 Adj. EBITDA 38% ($ in millions) 23% Wheel volume growth from 53M to 59M units 2005 to 2007 unit volu
Slide 8: Restructuring: 2007 Actions
Restructuring 2007 Actions Sold aluminum suspension components business to DMI on February 14 Completed equity rights offering and refinancing on May 30 Sold MGG subsidiary to ECF Group on June 29 Sold Wabash, Indiana powertrain facility to Harvey Industries on July 5 Sold automotive brake business
Slide 9: Restructuring: Liquidity
Restructuring Liquidity Liquidity improvement of $171M 1/31/2007 1/31/2008 A/R Securitization 11 16 Credit Revolver 79 124 Cash Balance 39 160 ($ in millions) $129 $300 Cash Balance Up $121M Credit Revolver Up $45M
Slide 10: Extend the Lead in Global Wheels: Growing in the Right Regions
Extend the Lead in Global Wheels Growing in the Right Regions Strong market increases projected from 2007 to 2009 in our growth regions* India - 62% Czech - 8% Thailand - 15% Turkey - 20% Brazil - 16% Steel Aluminum License Agreement Geographic and product diversity continues * Note: Market projecti
Slide 11: Sales by Region
Extend the Lead in Global Wheels Sales by Region 2007 Sales $2.1 Billion USD 2004 Sales $1.4 Billion USD Sales growth in developing markets
Slide 12: Production Build Outlook
Extend the Lead in Global Wheels Production Build Outlook Hayes is positioned well in both established and growth regions Source: Lt Vehicle CSM 2/08, Commercial JDPower 3/08 Overall growth in light vehicle production is 5.5M vehicles or 22M wheels in 2 years Emerging markets growing at 27% from 200
Slide 13: Expansions in Leading-Cost Regions
Extend the Lead in Global Wheels Expansions in Leading-Cost Regions Expansion Project Timing 2007 total capital investment of $102M Growth projects represented about 50% of capital expenditures These expansions will continue to add earnings growth in future years Key markets continuing to grow and o
Slide 14: 2007 Top Platforms
Extend the Lead in Global Wheels 2007 Top Platforms OEM NAMEPLATE REGION Toyota Hilux/Fortuner SA/Asia Honda Civic EU/SA/NA GM Silverado NA Ford Fusion EU/SA/NA Fiat/GM Corsa/Punto EU Ford Focus EU Nissan Megane/Espace Asia VW Polo/Fabia EU Ford Crown Vic NA GM Astra/Zafira EU/SA/NA Ford Freelander
Slide 15: 2007 Key Business Wins
Extend the Lead in Global Wheels 2007 Key Business Wins Total 2007 wins of over $430M *SA = South America; EU = Europe; NA = North America
Slide 16: 2007 Sales by Customer
Extend the Lead in Global Wheels 2007 Sales by Customer Global Sales by Customer (12 Manufacturing Countries) Sales to U.S. Domestics* 53% U.S. 30% U.S. 17% U.S. *Ford, GM, Chrysler LLC Diversified customer mix with decreasing reliance on U.S. Domestics
Slide 17: Sales by Product Segment
Sales Light Vehicle Steel 768 Light Vehicle Aluminum 746 Commercial Truck/Other 538 Extend the Lead in Global Wheels Sales by Product Segment Balanced product portfolio Segment Customer Geography Reduced variability ($ in millions) 2007 Sales $2.1 Billion
Slide 18: Summary
Execute Operating Plan Significant improvement in financials Diversified platform, customer and geographical mix Restructuring Balance sheet restructured at the right time Suspension, MGG, Wabash, and Brakes divestitures Extend Lead in Global Wheels Profitability continues to improve Growing in the
Slide 19: Financial Review
Financial Review HAYES LEMMERZ”
Slide 20: Fiscal 2007 vs. Fiscal 2006 Financial Summary
Fiscal 2007 vs. Fiscal 2006 Financial Summary1 1 Financials have been adjusted to reflect suspension components, MGG, and automotive brakes as discontinued operations. Please see the appendix for the quarterly 2006 and 2007 financials, adjusted to reflect these businesses as discontinued operations.
Slide 21: Change in Net Sales
Fiscal 2007 vs. Fiscal 2006 Change in Net Sales ($ in millions) Sale of Wabash, IN plant Primarily mix
Slide 22: Change in Core Operating Earnings
Fiscal 2007 vs. Fiscal 2006 Change in Core Operating Earnings1 ($ in millions) FX ($8M) Incentive Plans ($8M) Volume/price/mix $9M Productivity/Economics/Other $19M FX $15M Depreciation $7M 1 Please refer to the appendix for an explanation of why the Company's management believes this financial meas
Slide 23: Change in Free Cash Flow
1 Please refer to the appendix for an explanation of why the Company's management believes this financial measure provides useful information to investors. Fiscal 2007 vs. Fiscal 2006 Change in Free Cash Flow1 (Excl. A/R Programs) ($ in millions) Continuing expansion in leading-cost/high-growth regi
Slide 24: Free Cash Flow (Excl. A/R Programs)
Free Cash Flow (Excl. A/R Programs) 2005 2006 2007 FCF -69 -29 38 FCF before Growth Capital -26 6 89 2005 Significant free cash flow improvement since 2005 ($ in millions) 2006 2007
Slide 25: Capital Structure
Capital Structure Capital Structure ($ in millions) ($ in millions) No significant debt maturities until 2014 2008 2009 2010 2011-2015 *2008 excludes debt maturity of $29M German A/R program, which we expect to renew annually. *Excludes pre-payments Restructuring improves capital structure and exten
Slide 26: U.S. Pension Unfunded Liability Contributions
U.S. Pension ($ in millions) Unfunded Liability Contributions ($ in millions) Expect to have no unfunded liability by fiscal year 2008 Contributions to the U.S. pension plan are expected to be significantly reduced from prior years
Slide 27: 2008 Outlook
2008 Outlook Key Goals Execute 2008 operating plan Continue strategic investment strategy Positive free cash flow Financial Outlook Poised for strong performance in 2008
Slide 28: Appendix
28 Appendix _<, HAYES LEMMER2 [oN tae RON At OF NATE 4) NCC)
Slide 29: Fiscal 2007 vs. Fiscal 2006 Free Cash Flow
Fiscal 2007 vs. Fiscal 2006 Free Cash Flow ($ in millions)
Slide 30: Non-GAAP Financial Information: Adjusted EBITDA
Non-GAAP Financial Information Adjusted EBITDA ($ in millions)
Slide 31: Non-GAAP Financial Information: Core Operating Earnings
Non-GAAP Financial Information Core Operating Earnings ($ in millions)
Slide 32: 2006 - 2007 Financials by Quarter
2006 - 2007 Financials by Quarter The following financials have been updated to reflect suspension components, MGG, and automotive brakes as discontinued operations: ($ in millions)
Slide 33: Non-GAAP Financial Measures: Adjusted EBITDA
Non-GAAP Financial Measures Adjusted EBITDA: 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 restructur
Slide 34: Non-GAAP Financial Measures: Core Operating Earnings
Non-GAAP Financial Measures Core Operating Earnings: Core operating earnings is defined as earnings from operations less asset impairments and restructuring charges, post-emergence chapter 11 related costs, gains and losses on sales of assets, and other special items that are of an infrequent or unu
Slide 35: Non-GAAP Financial Measures: Free Cash Flow
Non-GAAP Financial Measures Free Cash Flow: Free cash flow is defined as cash from operating activities minus capital expenditures plus cash from the sale of assets. Free cash flow is used by management as a non- GAAP financial measure because it identifies the amount of cash available to meet princ
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