Hayes Lemmerz International Inc
Hayes Lemmerz International — Q1 2008 Earnings Presentation
35 slides from Hayes Lemmerz International's earnings presentation, Jun 5, 2008
Slide 1: First Quarter 2008 Earnings Presentation
First Quarter 2008 Earnings Presentation June 5, 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 Financial Highlights & Strategy Curt Clawson, President, CEO & Chairman of the Board Extend the Lead in Global Wheels & Summary Fred Bentley, Chief Operating Officer Financial Review Mark Brebberman, Corporate Controller
Slide 4: Our Vision: Be a Premier Automotive Supplier
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: First Quarter Financial Highlights
First Quarter Financial Highlights 2008 2007 YTD 54.6 50.1 2008 2007 YTD 25.1 21.1 2008 2007 YTD -55.3 -2.4 2007 2008 Sales 2008 2007 YTD 573.8 498.6 Adjusted EBITDA1 ($ in millions) Core Operating Earnings1 Free Cash Flow1 (Excl. A/R Programs) Liquidity 2007 2007 2007 2007 2008 2008 2008 2008 2008
Slide 6: Our Strategy
Our Strategy Aggressive Cost Reductions Focus on Six Sigma and Lean Manufacturing and drive productivity improvements Invest in the Right Geography Focus on cost effective locations in growth markets Invest in the Right Products Focus on product leadership and growth prospects Invest in the Right Cu
Slide 7: Right Products: Product Innovation - Light Vehicle Steel Wheel
Right Products Product Innovation - Light Vehicle Steel Wheel Patented technology Styling flexibility Large vent area for spoke look Mid-point price range "VersaStyle" wheel - looks like aluminum wheel Aluminum Wheel Conventional Steel Wheel
Slide 8: Plan to Sell Non-Core Powertrain Business
Plan to sell non-core powertrain business in which: We are a niche player We are in a single geographic area There is a concentrated customer base Exit negative EBITDA/cash flow operation Sales of approximately $50M Right Products Nuevo Laredo Powertrain Facility Focusing on core wheels business
Slide 9: Our Strategy
Our Strategy Aggressive Cost Reductions Focus on Six Sigma and Lean Manufacturing and drive productivity improvements Invest in the Right Geography Focus on cost effective locations in growth markets Invest in the Right Products Focus on product leadership and growth prospects Invest in the Right Cu
Slide 10: Gainesville, GA Aluminum Wheel Facility Closure
Will close by end of December 2008 Exit negative EBITDA/cash flow operation Sales of approximately $50M to Chrysler, Ford and Toyota Will transfer some of volume to Chihuahua, Mexico facility Further reduces dependence on U.S. market Right Geography Gainesville, GA Aluminum Wheel Facility Closure wi
Slide 11: Reduced Dependence on U.S. Market: Sales by Manufacturing Region
Reduced dependence on U.S. market Right Geography Sales by Manufacturing Region 2004 2008E (Without Gainesville)
Slide 12: Global Market Restructuring Steel Situation
Global Market Restructuring Steel Situation Keys to 2008
Slide 13: Our Strategy
Our Strategy Aggressive Cost Reductions Focus on Six Sigma and Lean Manufacturing and drive productivity improvements Invest in the Right Geography Focus on cost effective locations in growth markets Invest in the Right Products Focus on product leadership and growth prospects Invest in the Right Cu
Slide 14: Commercial Highlights: Maximizing Customer Satisfaction
Czech steel wheel operations received Ford's World Excellence Award Earned for exemplary performance in quality, delivery and cost performance Awarded for second consecutive year Brazil steel wheel operations honored with Fiat's Qualitas (Quality) Award Excellent performance in product development,
Slide 15: Business Wins
Secured over $80M in new and carry-over business during the first quarter Expect to meet or exceed last years wins of $430M Continue to diversify customer and geographic mix: Winning with Asian OEM's Continue to win with European partners and Detroit Three Extend the Lead in Global Wheels Business W
Slide 16: Expansion Projects
Extend the Lead in Global Wheels Expansion Projects Investments continue in leading-cost/high-growth regions Completed last six months In progress Starts next six months Czech Lt vehicle aluminum Lt vehicle steel Turkey Lt vehicle aluminum Lt vehicle steel Commercial Truck Brazil Commercial Truck In
Slide 17: 2008 Market Environment by Segment
Leading-cost countries showing strong growth Extend the Lead in Global Wheels 2008 Market Environment by Segment Customer and product diversity help mitigate regional and customer specific variability Most HLI markets and products doing well
Slide 18: Global Vehicle Build - 2007 to 2009 Growth
Extend the Lead in Global Wheels Global Vehicle Build - 2007 to 2009 Growth 3rd Qtr 4th Qtr N.A. -0.056 0.527 90 20.4 53% (6%) 3rd Qtr 4th Qtr N.A. 0.161 0.05 90 20.4 5% 16% 3rd Qtr 4th Qtr N.A. 0.173 0.238 90 20.4 24% 17% 3rd Qtr 4th Qtr N.A. 0.253 0.225 90 20.4 23% 25% 3rd Qtr 4th Qtr N.A. -0.027
Slide 19: Summary
Execute Operating Plan Core business financials improved from previous year New business wins will support future growth Continue to diversify customer base Extend the Lead in Global Wheels Continuing strategic investment strategy Strong geographic and product diversity Target Positive Free Cash Flo
Slide 20: Financial Review
Financial Review HAYES LEMMERZ INTERNATIONAL, INC.
Slide 21: Q1 2008 vs. Q1 2007 Financial Summary
Q1 2008 vs. Q1 2007 Financial Summary 1 Please refer to the appendix for a reconciliation of this non-GAAP financial measure. 2 Includes discontinued operations ($ in millions)
Slide 22: Q1 2008 vs. Q1 2007 Change in Net Sales
Q1 2008 vs. Q1 2007 Change in Net Sales ($ in millions) Sale of Wabash, IN powertrain plant Primarily mix
Slide 23: Q1 2008 vs. Q1 2007 Change in Core Operating Earnings
Q1 2008 vs. Q1 2007 Change in Core Operating Earnings1 ($ in millions) FX ($4M) Volume/price/mix $0M Productivity/Economics/Other ($2M) FX $7M Depreciation $3M 1 Please refer to the appendix for an explanation of why the Company's management believes this financial measure provides useful informatio
Slide 24: Q1 2008 vs. Q1 2007 Change in Free Cash Flow
1 Please refer to the appendix for an explanation of why the Company's management believes this financial measure provides useful information to investors. Q1 2008 vs. Q1 2007 Change in Free Cash Flow1 (Excl. A/R Programs) ($ in millions) Adjusted EBITDA $5M Working Capital ($53M) Other ($2M)
Slide 25: Liquidity
Liquidity Liquidity improvement of $114M 4/30/2007 4/30/2008 A/R Securitization 4 20 Credit Revolver 69 124 Cash Balance 62 105 ($ in millions) $135 $249 Cash Balance Up $43M Credit Revolver Up $55M
Slide 26: Capital Structure
Capital Structure Capital Structure ($ in millions) ($ in millions) No significant debt maturities until 2014 2008 2009 2010-2013 2014-2015 *2008 excludes debt maturity of $31M German A/R program, which we expect to renew annually. *Excludes pre-payments Improved capital structure and extended matur
Slide 27: 2008 Outlook
2008 Outlook Financial Outlook We confirm our guidance for: Sales between $2.1 - $2.3 billion Adjusted EBITDA between $205 - $220 million Capital expenditures between $95 - $105 million Free Cash Flow (Excl. A/R Programs) Targeting positive free cash flow - excluding restructuring
Slide 28: Adjusted EBITDA Continuing Operations 2005-2008
Adjusted EBITDA1 Continuing Operations 2005-2008 Core business Adjusted EBITDA improving ($ in millions) 12% 23% 7%-15% $185M $205M - $220M $203M $189M Continuing Ops $139M Continuing Ops $192M Continuing Ops $156M Continuing Ops $205M - $220M Guidance range 1 Please refer to the appendix for an exp
Slide 29: Appendix
Appendix HAYES LEMMERZ’ INTERNATIONAL, INC.
Slide 30: 2008 Top Platforms
Execute Operating Plan 2008 Top Platforms OEM NAMEPLATE REGION Toyota Hilux/Fortuner SA/Asia Honda Civic EU/SA/NA GM Silverado NA Ford Fusion EU/SA/NA Fiat Cinquecento EU Ford Focus EU/NA Nissan Megane/Serena EU/Asia VW Polo/Fabia EU/SA Nissan Frontier/Xterra NA Ford Transit EU Ford Freelander EU/Af
Slide 31: Q1 2008 vs. Q1 2007 Free Cash Flow
Q1 2008 vs. Q1 2007 Free Cash Flow ($ in millions)
Slide 32: Non-GAAP Financial Information: Adjusted EBITDA
Non-GAAP Financial Information Adjusted EBITDA ($ in millions)
Slide 33: Non-GAAP Financial Information: Core Operating Earnings
Non-GAAP Financial Information Core Operating Earnings ($ in millions)
Slide 34: 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 35: Non-GAAP Financial Measures: Core Operating Earnings and Free Cash Flow
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
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