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USA: Hayes Lemmerz reports Q2 operating profit after emerging from Chapter 11

By just-auto.com editorial team | 16 September 2003

Hayes Lemmerz International, Inc. has announced that it posted operating income of $51.6 million (including the impact of certain gains and expenses related to emergence from Chapter 11 reorganisation) for the second quarter ended July 31, 2003. This is sharply improved from a year earlier loss of $12.6 million, which also includes certain expenses related to the company's Chapter 11 reorganisation.

Earnings from operations excluding these items was $20.4 million in the current quarter, compared with a year earlier loss of $7.2 million. Gross profit margin increased to 11.2% in the second quarter of 2003 from 7.6% in 2002.

For the three months ended July 31, 2003, Hayes Lemmerz reported sales of $502.8 million, compared with year-earlier sales of $504.0 million. Based on industry reports, North American light vehicle production fell 8% from the same period a year earlier.

"Our significantly improved operating results reflect the thought and effort we have put into reshaping Hayes Lemmerz so that it can compete profitably in today's automotive industry marketplace," said Curt Clawson, Chairman, President and CEO. "Our ability to improve operating income despite flat sales demonstrates the benefits of the many operational and management changes we have made in the last year."

"We have a new management team in place with significant auto industry and 'best practices' management experience, final closure of an unprofitable plant in Bowling Green, Kentucky, and significant improvements at the company's Montague, Michigan facility. The company also has more than 150 'Operational Excellence' initiatives under way," Mr. Clawson said. "These have resulted in reduced mould changeover times, improved uptime, reduced scrap, better flow through plants and work cells, and freed-up floor space, all of which contribute to improved profitability," he said.

"Hayes Lemmerz emerged from Chapter 11 with a strong balance sheet and ample liquidity to support its operations and future growth," Mr. Clawson added.