Hayes Lemmerz Business report FY2007

Business Highlights

Financial overview

(in million dollars)

FY2007 FY2006 Rate of change(%)
Net Sales 2,126.7 1,796.8 18.4 -
Operating Income (38.7) 4.5 -
Automotive Wheels
Net Sales 2,051.9 1,671.9 22.7 (1)
Operating Income 36.7 53.3 (31.1)
Other Products
Net Sales 74.8 124.9 (40.1) (2)
Operating Income (75.4) (48.8) -

(1) Net sales in the Automotive Wheels segment improved by 380.0 million USD. Volumes at its international locations accounted for approximately 113 million USD. In addition, foreign exchange rates relative to the US dollar increased sales approximately 139 million USD. Higher metal pass-through pricing increased sales 60 million. The remainder of the increase was due to favorable model mix, partially offset by lower pricing.

(2) Net sales in the Other Products segment decreased 50.1 million USD. The sale of the Wabash, Indiana facility resulted in a decrease of sales of 36 million as compared to the prior year. The remainder of the decrease in primarily due to lower volumes at its powertrain facility in Nuevo Laredo, Mexico.


-In the beginning of FY2007, the Company divested its suspension business operation in Bristol, Indiana and Montague, Michigan. The Company received consideration for the sale of approximately 26.2 million USD.

-In June 2007, its wholly owned subsidiary Hays Lemmers Holding GmbH completed the sale of all of the issued and outstanding shares of capital stock of MGG Group B.V. to an affiliate of ECF Group, a privately held company based in the Netherlands and Switzerland.

-In November 2007, the Company completed the sale of its Automotive Brake Components division to Brembo North America, Inc. Under the agreement, Brembo North America, Inc., acquired all of the stock of two subsidiary companies that ran the brake manufacturing operations in Homer, Michigan and Monterrey, Mexico, and certain assets used in connection with the division's sales, marketing and engineering group located at the Company's headquarters in Northville, Michigan. Proceeds from the sales were approximately 57 million USD.



R&D Expenditure

(in million dollars)

FY2007 FY2006 FY2005


9.6 4.4 5.8

Product Development
Novachrome(TM) wheel
-The Company released the Novachrome(TM) wheel--the next step in chrome technology. Novachrome(TM) yields a mirror finish in the spokes, while retaining crisp, sharp corners, giving a whole new look to the chrome plated wheel.

Zinc Dust Brake Coating
-The Company developed its leading-edge and environmentally friendly Zinc Dust Brake Coating, which gives added durability to the brake system.

Flex(TM) Wheel system
-The Company's global engineering teams worked together to develop the Flex(TM) Wheel system (known as the Structure wheel outside the U.S.). This steel wheel utilizes one design with multiple styling appearances to closely resemble an aluminum wheel at a lower cost.

Investment Activities

Capital expenditures

(in million dollars)

FY2007 FY2006 FY2005
Automotive Wheels 91.6 65.4 78.6
Other 10.8 5.0 7.8
Total 102.4 70.4 86.4

-In Feb. 2007, the Company announced that its subsidiary in India, Kalyani Lemmerz Limited, has completed the expansion of its state-of-the-art commercial vehicle steel wheel facility, bringing annual capacity to 800,000. Kalyani Lemmerz expects to add an additional 200,000 units of capacity in future months, bringing the total annual capacity of the facility to 1,000,000 units. The Company also announced that Kalyani Lemmerz will build a new plant to produce passenger car steel wheels.The plant will be located next to its existing commercial vehicle steel wheel facility and is expected to begin production October 2008.