Hayes Lemmerz Amends Credit Facility

Hayes Lemmerz International, Inc. has announced that it has concluded an agreement with its lending group to amend its $625 million senior secured credit facility. Among other changes, the amendment favourably modifies certain financial covenants. “This amendment provides Hayes Lemmerz with additional financial flexibility as we continue to rationalise 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 (earnings from operations plus depreciation and amortization), 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 organisational 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.