<PAGE> 1
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
/x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended OCTOBER 31, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from______________ to_____________
Commission file number: 1-11592
HAYES WHEELS INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 13-3384636
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
38481 HURON RIVER DRIVE
ROMULUS, MICHIGAN 48174
(Address of Principal Executive Offices)(Zip Code)
Registrant's telephone number, including area code: (313) 941-2000
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes./x/ No./ /
THE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING AS OF DECEMBER 13, 1996 WAS
11,195,259 SHARES.
- --------------------------------------------------------------------------------
This report consists of 20 pages.
<PAGE> 2
HAYES WHEELS INTERNATIONAL, INC.
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
<S> <C> <C>
Item 1. Financial Statements
Consolidated Statements of Operations . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . 5
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
PART II. OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Item 3. Defaults upon Senior Securities . . . . . . . . . . . . . . . . . . . . . . . 19
Item 4. Submission of Matters to a Vote of
Security-Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . 19
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
Unless otherwise indicated, references to "Company" mean Hayes Wheels
International, Inc. and its subsidiaries and reference to a fiscal year means
the Company's year ended January 31 of the following year (e.g., "fiscal 1996"
refers to the period beginning February 1, 1996 and ending January 31, 1997 and
"fiscal 1995" refers to the period beginning February 1, 1995 and ending
January 31, 1996).
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
HAYES WHEELS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(MILLIONS OF DOLLARS, EXCEPT SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
OCTOBER 31, OCTOBER 31,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales . . . . . . . . . . . . . . . . . . . . . $ 234.4 $ 157.9 $ 555.8 $ 469.0
Cost of goods sold . . . . . . . . . . . . . . . . 198.5 132.7 486.3 394.2
------- ------- ------- -------
Gross profit . . . . . . . . . . . . . . . . . . . 35.9 25.2 69.5 74.8
Marketing, general and administration . . . . . . . 9.6 7.6 25.5 22.9
Engineering and product development . . . . . . . . 2.0 1.4 5.6 3.3
Other income . . . . . . . . . . . . . . . . . . . (1.8) (0.5) (3.4) (1.2)
Equity in loss of unconsolidated subsidiaries . . . -- -- 3.2 --
Nonrecurring charges . . . . . . . . . . . . . . . -- -- 6.4 --
------- ------- ------- -------
Earnings from operations . . . . . . . . . . . . . 26.1 16.7 32.2 49.8
Interest expense, net . . . . . . . . . . . . . . . 18.3 3.7 30.4 11.3
------- ------- ------- -------
Income before taxes on income and extraordinary
items . . . . . . . . . . . . . . . . . . . . . 7.8 13.0 1.8 38.5
Income tax provision . . . . . . . . . . . . . . . 3.1 5.0 0.5 15.0
------- ------- ------- -------
Income before extraordinary items . . . . . . 4.7 8.0 1.3 23.5
Extraordinary Items:
Bond defeasance, net of tax of $4.9 . . . . . -- -- (7.4) --
------- ------- ------- -------
Net income (loss) . . . . . . . . . . . . . . . $ 4.7 $ 8.0 $ (6.1) $ 23.5
======= ======= ======= =======
Per share income - Pre Split (Note 7)
Income before extraordinary items . . . . . . . . $ 0.42 $ 0.46 $ 0.09 $ 1.34
Extraordinary items, net of tax . . . . . . . . . . -- -- (0.50) --
------- ------- ------- -------
Net Income (loss) . . . . . . . . . . . . . . . . . $ 0.42 $ 0.46 $ (0.41) $ 1.34
======= ======= ======= =======
Weighted average shares outstanding
(in thousands) . . . . . . . . . . . . . . . . . . 11,195 17,574 14,747 17,574
======= ======= ======= =======
Dividends declared per share . . . . . . . . . . . $ -- $ 0.015 $ 0.030 $ 0.045
======= ======= ======= =======
Per share income - Post Split (Note 7)
Income before extraordinary items . . . . . . . . $ 0.21 $ 0.23 $ 0.05 $ 0.67
Extraordinary items, net of tax . . . . . . . . . . -- -- (0.25) --
------- ------- ------- -------
Net Income (loss) . . . . . . . . . . . . . . . . . $ 0.21 $ 0.23 $ (0.20) $ 0.67
======= ======= ======= =======
Weighted average shares outstanding
(in thousands) . . . . . . . . . . . . . . . . . . 22,390 35,148 29,493 35,148
======= ======= ======= =======
Dividends declared per share . . . . . . . . . . . $ -- $ 0.008 $ 0.015 $ 0.023
======= ======= ======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 4
HAYES WHEELS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(MILLIONS OF DOLLARS)
<TABLE>
<CAPTION>
OCT. 31, JAN. 31,
1996 1996
--------- --------
(UNAUDITED)
ASSETS
------
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . $ 15.6 $ 1.8
Receivables (less allowance of $2.0 million and $0.1 million
at October 31, 1996 and January 31, 1996) . . . . . . . . . . 142.4 109.6
Inventory (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . 74.6 58.9
Prepaid expenses and other . . . . . . . . . . . . . . . . . . . . 12.3 9.9
-------- -------
Total current assets . . . . . . . . . . . . . . . . . . . . 244.9 180.2
Property, plant and equipment:
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.1 18.3
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96.1 76.8
Machinery and equipment . . . . . . . . . . . . . . . . . . . . . 432.3 319.7
-------- -------
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 548.5 414.8
Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . (132.9) (110.4)
-------- -------
Net property, plant and equipment . . . . . . . . . . . . . . 415.6 304.4
Goodwill and other assets, net . . . . . . . . . . . . . . . . . . . 449.9 149.3
-------- -------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . $1,110.4 $ 633.9
======== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Bank borrowings . . . . . . . . . . . . . . . . . . . . . . . . . $ 3.1 $ 4.1
Current portion of long-term debt . . . . . . . . . . . . . . . . 0.2 0.1
Accounts payable and accrued liabilities . . . . . . . . . . . . . 196.7 125.5
-------- -------
Total current liabilities . . . . . . . . . . . . . . . . . . 200.0 129.7
Noncurrent liabilities:
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . 676.0 128.9
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . 37.1 48.1
Pension and other long-term liabilities . . . . . . . . . . . . . 172.0 81.8
-------- -------
Total noncurrent liabilities . . . . . . . . . . . . . . . . . 885.1 258.8
Commitments and Contingencies (Note 6 and 7)
Stockholders' equity:
Preferred stock, 25,000,000 shares authorized, none issued
Common stock, par value $0.01 per share:
Authorized 50,000,000 shares
Issued and outstanding, 11,195,259 and 17,574,000 shares
respectively . . . . . . . . . . . . . . . . . . . . . . . . . 0.1 0.2
Additional paid in capital . . . . . . . . . . . . . . . . . . . . 46.3 198.5
Retained earnings (deficit) . . . . . . . . . . . . . . . . . . . . (18.0) 49.6
Foreign currency translation adjustment . . . . . . . . . . . . . (0.5) (0.3)
Pension liability adjustment . . . . . . . . . . . . . . . . . . . (2.6) (2.6)
-------- -------
Total stockholders' equity . . . . . . . . . . . . . . . . . . 25.3 245.4
-------- -------
Total liabilities and stockholders' equity . . . . . . . . . . . . . $1,110.4 $ 633.9
======== =======
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
HAYES WHEELS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(MILLIONS OF DOLLARS)
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended October 31,
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . $ (6.1) $ 23.5
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.2 19.6
Amortization of intangibles and debt issue costs . . . . . . . . . 7.6 4.6
Increase (decrease) in deferred taxes . . . . . . . . . . . . . . (11.5) 1.7
Asset writedown . . . . . . . . . . . . . . . . . . . . . . . . . 11.9 --
Nonrecurring charges . . . . . . . . . . . . . . . . . . . . . . . 6.4 --
Equity in losses of subsidiaries . . . . . . . . . . . . . . . . 3.2 --
Extraordinary loss . . . . . . . . . . . . . . . . . . . . . . . . 12.3 --
Changes in operating assets and liabilities:
(Increase) decrease in receivables . . . . . . . . . . . . . . . (3.1) (24.9)
(Increase) decrease in inventories . . . . . . . . . . . . . . . 0.4 5.9
(Increase) decrease in prepaid expenses and other . . . . . . . (2.0) (0.9)
Increase (decrease) in accounts payable and accrued liabilities . 7.5 4.2
Increase (decrease) in other long-term liabilities . . . . . . (23.5) (3.6)
------- -------
Cash provided by operating activities . . . . . . . . . . . . 29.3 30.1
Cash flows from investing activities:
Acquisition of property, plant and equipment . . . . . . . . . . . (51.4) (32.2)
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6.6) (6.2)
------- -------
Cash used for investing activities . . . . . . . . . . . . . . (58.0) (38.4)
Cash flows from financing activities:
Decrease in foreign bank borrowings and loans . . . . . . . . . . (1.2) (5.7)
Retirement of long term debt . . . . . . . . . . . . . . . . . . . (106.4) --
Retirement of acquired long term debt . . . . . . . . . . . . . . (137.7) --
Proceeds from issuance of long term debt . . . . . . . . . . . . . 673.5 --
Common stock repurchase . . . . . . . . . . . . . . . . . . . . . (506.1) --
Proceeds from equity infusion, net of costs . . . . . . . . . . . 185.4 --
Dividend paid to stockholders . . . . . . . . . . . . . . . . . . (0.5) (0.8)
Fees paid to issue long term debt . . . . . . . . . . . . . . . . (35.0) --
Increase (decrease) in bank revolving loan & other domestic loans . (29.5) 15.7
------- -------
Cash provided by financing activities . . . . . . . . . . . 42.5 9.2
------- -------
Effect of exchange rate changes on cash and cash equivalents . . . . -- --
------- -------
Increase in cash and cash equivalents . . . . . . . . . . . 13.8 0.9
Cash and cash equivalents at beginning of year . . . . . . . . . . . 1.8 0.5
------- -------
Cash and cash equivalents at end of period . . . . . . . . . . . . . $ 15.6 $ 1.4
======= =======
Supplemental data:
Cash paid for interest . . . . . . . . . . . . . . . . . . . . . . $ 18.0 $ 8.0
Cash paid for income taxes . . . . . . . . . . . . . . . . . . . . $ 7.3 $ 15.6
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 6
HAYES WHEELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED OCTOBER 31, 1996 AND 1995
(UNAUDITED)
(MILLIONS OF DOLLARS UNLESS OTHERWISE STATED)
(1) BASIS OF PRESENTATION
The accompanying consolidated financial statements have been prepared by
management and in the opinion of management, contain all adjustments, consisting
of normal recurring adjustments, necessary to present fairly the financial
position of the Company as of October 31, 1996 and January 31, 1996, and the
results of its operations for the three and nine months ended October 31, 1996
and 1995 and cash flows for the nine months ended October 31, 1996 and 1995.
The consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the fiscal year ended January 31, 1996. Results
for interim periods are not necessarily indicative of those to be expected for
the year.
(2) SUMMARY OF ACCOUNTING PRINCIPLES
Effective February 1, 1996, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of". The adoption of
SFAS No. 121 did not have a material effect on the Company's financial
statements.
During 1995, the Financial Accounting Standards Board issued Statement No.
123, "Accounting for Stock-based Compensation". Effective for fiscal years
beginning after December 15, 1995, SFAS No. 123 encourages companies to include
the fair value of any stock awards issued as compensation expense within their
income statements. Companies that choose to remain with Accounting Principles
Board Opinion No. 25 (which uses the intrinsic value method to account for stock
awards) must disclose pro forma net income and earnings per share as if the fair
value of the award had been included as compensation expense. The Company
anticipates remaining with the intrinsic value method.
(3) INVENTORIES
The major classes of inventory are as follows:
<TABLE>
<CAPTION>
Oct. 31, Jan. 31,
1996 1996
---- ----
<S> <C> <C>
Raw materials . . . . . . . . . . . . . . . . . . . . . . . . $ 23.0 $ 19.7
Work-in-progress . . . . . . . . . . . . . . . . . . . . . . . 20.8 13.5
Finished goods . . . . . . . . . . . . . . . . . . . . . . . . 30.8 25.7
------- -------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . $ 74.6 $ 58.9
======= =======
</TABLE>
(4) DIVESTITURES
During the third quarter of fiscal 1996, the Company sold its 7% equity
investment in Central Manufacturing Company located in Kentucky for $3.95
million, recognizing a gain on the sale of the investment of $0.75 million.
6
<PAGE> 7
HAYES WHEELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED OCTOBER 31, 1996 AND 1995
(UNAUDITED)
(MILLIONS OF DOLLARS UNLESS OTHERWISE STATED)
(4) ACQUISITION AND RECAPITALIZATION
On July 2, 1996, the Company consummated the transactions contemplated by
the Agreement and Plan of Merger, dated as of March 28, 1996, between MWC
Holdings, Inc. ("Holdings") and the Company, (the "Merger Agreement") pursuant
to which, among other things, Holdings was merged with and into the Company,
with the Company as the surviving corporation (the "Merger"). As a result of
the Merger, Motor Wheel Corporation, a wholly owned subsidiary of Holdings
("Motor Wheel"), became a wholly owned subsidiary of the Company.
The total purchase price of approximately $105.4 million includes (i) the
issuance of 3,125,000 shares of new common stock, (ii) 1,150,000 warrants and
(iii) direct costs related to the acquisition. The acquisition was accounted
for as a purchase with the results of Motor Wheel included from the acquisition
date. The fair value of the assets acquired, including goodwill, was $420.1
million and liabilities assumed totaling $314.7 million. Goodwill and other
intangibles of $223.1 million are being amortized over a 40-year life on a
straight-line basis.
Immediately prior to the Merger and as part of the financing thereof, the
Company issued and sold to certain new investors (i) an aggregate of 200,000
shares of Company Preferred Stock, which upon consummation of the Merger were
converted into an aggregate of 6,250,000 shares of new common stock, and (ii)
150,000 warrants, in exchange for aggregate cash consideration, net of related
costs, of $185.4 million. The Company also issued new long-term debt totaling
$673.5 which was utilized along with the equity infusion to (i) retire $106.4
million principal amount plus redemption premium of the Company's 9 1/4% Senior
Notes due 2002, (ii) retire all existing senior debt of Motor Wheel at the time
of the acquisition, and (iii) repurchase 15,816,600 shares of the Company's
common stock.
The following summary, prepared on a pro forma basis, combines the
consolidated results of operations as if Motor Wheel had been acquired as of
the beginning of the periods presented, after including the impact of certain
adjustments, such as amortization of intangibles, depreciation of property,
plant and equipment, increased interest expense on the recapitalization debt,
and the related income tax effects.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales $234.4 $247.8 $690.8 $741.7
Operating income 26.1 20.1 34.8 61.7
Net Income (loss) 4.7 1.6 (18.6) 5.2
Net Income (loss) per share $ 0.42 $ 0.14 $(1.66) $ 0.46
</TABLE>
The pro forma results are not necessarily indicative of the actual
results if the transactions had been in effect for the entire periods
presented. In addition, they are not intended to be a projection of future
results and do not reflect, among other things, any synergies that might have
been achieved from combined operations.
7
<PAGE> 8
HAYES WHEELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED OCTOBER 31, 1996 AND 1995
(UNAUDITED)
(MILLIONS OF DOLLARS UNLESS OTHERWISE STATED)
(5) GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS
In connection with the Merger and as part of the financing thereof, the
Company issued and sold $250 million aggregate principal amount of its 11%
Senior Subordinated Notes due 2006 (the "Senior Subordinated Notes") in a
public offering. The Senior Subordinated Notes are general unsecured
obligations of the Company, subordinated in right of payment to all existing
and future senior indebtedness of the Company, and are guaranteed by certain of
the Company's domestic subsidiaries.
The following condensed consolidating financial information presents:
(1) Condensed consolidating financial statements as of October 31,
1996 and January 31, 1996 and for the nine month periods ended October 31,
1996 and 1995, of (a) Hayes Wheels International, Inc., the parent, (b) the
guarantor subsidiaries, (c) the nonguarantor subsidiaries and (d) the
Company on a consolidated basis, and
(2) Elimination entries necessary to consolidate Hayes Wheels
International, Inc., the parent, with the guarantor and nonguarantor
subsidiaries.
Investments in foreign subsidiaries are accounted for by the parent on
the equity method (domestic subsidiaries are accounted for by the parent on the
cost method) for purposes of the consolidating presentation. The principle
elimination entries eliminate investments in subsidiaries and intercompany
balances and transactions.
8
<PAGE> 9
HAYES WHEELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED OCTOBER 31, 1996 AND 1995
(UNAUDITED)
(MILLIONS OF DOLLARS UNLESS OTHERWISE STATED)
(5) GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS -- CONT'D.
Hayes Wheels International, Inc. and Subsidiaries
Condensed Consolidating Statements of Operations
For the Nine Months Ended October 31, 1996
<TABLE>
<CAPTION>
Guarantor Nonguarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Total
------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales $ 197.8 $ 302.8 $ 57.7 $ (2.5) $555.8
Cost of goods sold 182.9 258.7 47.2 (2.5) 486.3
------- ------- ------ ------ ------
Gross profit 14.9 44.1 10.5 -- 69.5
Marketing, general and administrative 5.9 16.5 3.1 -- 25.5
Engineering and product development 2.6 2.2 0.8 -- 5.6
Other (income) expense (0.7) (0.2) (2.5) (3.4)
Equity in loss of unconsolidated
subsidiaries 3.2 3.2
Nonrecurring charges 6.4 -- -- 6.4
------- ------- ------ ------ ------
Earnings (loss) from operations (2.5) 25.6 9.1 -- 32.2
Interest expense, net 13.9 16.1 0.4 -- 30.4
Earnings in subsidiaries (5.0) -- -- 5.0 --
------- ------- ------ ------- ------
Income (loss) before taxes on (11.4) 9.5 8.7 (5.0) 1.8
income and extraordinary items
Income tax provision (benefit) (7.7) 4.2 4.0 -- 0.5
------- ------- ------ ------ ------
Income (loss) before extraordinary
items (3.7) 5.3 4.7 (5.0) 1.3
Extraordinary items:
Bond defeasance, net of tax of $4.9 (7.4) -- -- -- (7.4)
------- ------- ------ ------ ------
Net Income (loss) $ (11.1) $ 5.3 $ 4.7 $ (5.0) $ (6.1)
======= ======= ====== ====== ======
</TABLE>
9
<PAGE> 10
HAYES WHEELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED OCTOBER 31, 1996 AND 1995
(UNAUDITED)
(MILLIONS OF DOLLARS UNLESS OTHERWISE STATED)
(5) GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS -- CONT'D.
For the Nine Months Ended October 31, 1995
<TABLE>
<CAPTION>
Guarantor Nonguarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Total
------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales $ 190.0 $ 216.5 $64.7 $ (2.2) $ 469.0
Cost of goods sold 157.2 186.9 52.3 (2.2) 394.2
-------- ------- ------ ------- -------
Gross profit 32.8 29.6 12.4 -- 74.8
Marketing, general and administrative 8.7 11.5 2.7 -- 22.9
Engineering and product development 1.3 1.2 0.8 -- 3.3
Other (income) expense (0.3) -- (0.9) -- (1.2)
-------- ------- ------ ------ --------
Earnings from operations 23.1 16.9 9.8 -- 49.8
Interest expense, net 4.6 5.8 0.9 -- 11.3
Earnings in subsidiaries (4.6) -- -- 4.6 --
-------- ------- ------ ------ -------
Earnings before taxes on income 23.1 11.1 8.9 (4.6) 38.5
Income tax provision 7.1 3.5 4.4 -- 15.0
-------- ------- ------ ------ -------
Net Income $ 16.0 $ 7.6 $ 4.5 $ (4.6) $ 23.5
======== ======= ====== ====== =======
</TABLE>
10
<PAGE> 11
HAYES WHEELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED OCTOBER 31, 1996 AND 1995
(UNAUDITED)
(MILLIONS OF DOLLARS UNLESS OTHERWISE STATED)
(5) GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS -- CONT'D.
Hayes Wheels International, Inc. and Subsidiaries
Condensed Consolidations Balance Sheets
October 31, 1996
<TABLE>
<CAPTION>
Guarantor Nonguarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Total
------ ------------ ------------ ------------ -----
<S> <C> <C> <C> <C> <C>
Current Assets
Cash and Cash Equivalents $ 14.4 $ 0.5 $ 0.7 $ -- $ 15.6
Accounts Receivable 49.1 70.8 22.5 -- 142.4
Inventories 33.0 36.6 5.0 -- 74.6
Prepaids and Other 4.2 2.3 6.1 (0.3) 12.3
------ ------ ------ ----- -------
Total Current Assets 100.7 110.2 34.3 (0.3) 244.9
Gross Fixed Assets 214.1 266.4 68.0 -- 548.5
Accumulated Depreciation (46.1) (63.5) (23.3) -- (132.9)
------ ------ ------ ----- -------
Net Fixed Assets 168.0 202.9 44.7 -- 415.6
Other Assets 301.0 356.0 4.7 (211.8) 449.9
------ ------ ------ ------ -------
Total Assets $ 569.7 $ 669.1 $ 83.7 $(212.1) $1,110.4
====== ====== ====== ====== =======
Current Liabilities
Bank Borrowings $ -- $ -- $ 3.1 $ -- $ 3.1
Current Portion Long Term Debt 0.1 -- 0.1 -- 0.2
Account Payable & Accrued Liabilities 83.1 93.0 20.9 (0.3) 196.7
------ ------ ------ ------ -----
Total Current Liabilities 83.2 93.0 24.1 (0.3) 200.0
Long Term Debt 675.7 --- 0.3 -- 676.0
Pensions and Other Long Term Liabilities 62.4 106.1 6.0 (2.5) 172.0
Deferred Income Taxes 13.0 12.9 11.2 -- 37.1
Parent Loans and Advances (257.3) 255.0 21.2 (18.9) --
------ ------ ------ ------ -------
Total Long Term Liabilities 493.8 374.0 38.7 (21.4) 885.1
Common Stock 0.1 -- -- -- 0.1
Additional Paid In Capital 46.3 110.5 1.9 (112.4) 290.8
Retained Earnings (deficit) (49.8) 91.6 16.9 (76.7) (262.5)
Pension Adjustment (2.6) -- -- -- (2.6)
Currency Translation Adjustment (1.3) -- 2.1 (1.3) (0.5)
------ ------ ------ ----- -------
Total Stockholders' Equity (7.3) 202.1 20.9 (192.4) 25.3
------ ------ ------ ------ -------
Total Liabilities and Stockholders' Equity $ 569.7 $ 669.1 $ 83.7 $(212.1) $1,110.4
====== ====== ====== ====== =======
</TABLE>
11
<PAGE> 12
HAYES WHEELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED OCTOBER 31, 1996 AND 1995
(UNAUDITED)
(MILLIONS OF DOLLARS UNLESS OTHERWISE STATED)
(5) GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS -- CONT'D.
Hayes Wheels International, Inc. and Subsidiaries
Condensed Consolidating Balance Sheet
January 31, 1996
<TABLE>
<CAPTION>
Guarantor Nonguarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Total
------ ------------ ------------ ------------ -----
<S> <C> <C> <C> <C> <C>
Current Assets
Cash and Cash Equivalents $ 1.0 $ 0.1 $ 0.7 $ -- $ 1.8
Accounts Receivable 50.4 35.6 23.6 -- 109.6
Inventories 36.4 18.7 3.8 -- 58.9
Prepaids and Other 3.4 3.9 2.8 (0.2) 9.9
------- -------- -------- -------- --------
Total Current Assets 91.2 58.3 30.9 (0.2) 180.2
Gross Fixed Assets 178.5 173.2 63.1 -- 414.8
Accumulated Depreciation (37.2) (53.1) (20.1) -- (110.4)
------- -------- -------- -------- --------
Net Fixed Assets 141.3 120.1 43.0 -- 304.4
Other Assets 169.6 76.3 5.0 (101.6) 149.3
------- -------- -------- -------- --------
Total Assets $ 402.1 $ 254.7 $ 78.9 $ (101.8) $ 633.9
======= ======== ======== ======== ========
Current Liabilities
Bank Borrowings $ -- $ -- $ 4.1 $ -- $ 4.1
Current Portion Long Term Debt -- -- 0.1 -- 0.1
Accounts Payable and Accrued Liabilities 78.8 26.2 20.8 (0.3) 125.5
------- -------- -------- --------- --------
Total Current Liabilities 78.8 26.2 25.0 (0.3) 129.7
Long Term Debt 128.6 -- 0.3 -- 128.9
Pensions and Other Long Term Liabilities 76.7 0.1 9.2 (4.2) 81.8
Deferred Income Taxes 18.4 18.0 11.7 -- 48.1
Parent Loans and Advance (115.4) 117.3 15.9 (17.8) --
------- -------- -------- -------- -------
Total Long Term Liabilities 108.3 135.4 37.1 (22.0) 258.8
Common Stock 0.2 -- -- -- 0.2
Additional Paid In Capital 198.5 6.5 1.9 (8.4) 198.5
Retained Earnings 20.7 86.6 12.5 (70.2) 49.6
Pension Adjustment (2.6) -- -- -- (2.6)
Currency Translation Adjustment (1.8) -- 2.4 (0.9) (0.3)
------- ------- -------- -------- --------
Total Stockholders' Equity 215.0 93.1 16.8 (79.5) 245.4
------- ------- -------- -------- --------
Total Liabilities and Stockholders' Equity $ 402.1 $ 254.7 $ 78.9 $ (101.8) $ 633.9
======= ======= ======== ======== ========
</TABLE>
12
<PAGE> 13
HAYES WHEELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED OCTOBER 31, 1996 AND 1995
(UNAUDITED)
(MILLIONS OF DOLLARS UNLESS OTHERWISE STATED)
(5) GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS -- CONT'D.
Hayes Wheels International, Inc. and Subsidiaries
Condensed Consolidated Statement of Cash Flows
For the Nine Months Ended October 31, 1996
<TABLE>
<CAPTION>
Guarantor Nonguarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Total
------ ------------ ------------ ------------ -----
<S> <C> <C> <C> <C> <C>
Cash flow provided from (used by)
Operating activities 11.7 21.8 0.8 (5.0) 29.3
Cash flows from investing activities:
Acquisition of property, plant & equipment (35.6) (10.9) (4.9) -- (51.4)
Other, net 3.9 (10.5) -- -- (6.6)
------ ------ ------- ------ ------
Cash flow used by investing activities (31.7) (21.4) (4.9) -- (58.0)
Cash flows from financing activities:
Increase (decrease) in foreign bank
borrowings and loans -- -- (1.2) -- (1.2)
Increase (decrease) in bank revolving
and other domestic borrowing (29.5) -- -- -- (29.5)
Dividends paid to shareholders (0.5) (0.5)
Retirement of long term debt (106.4) (106.4)
Retirement of acquired long term debt (137.7) (137.7)
Proceeds from issuance of long term debt 673.5 673.5
Common stock repurchase (506.1) (506.1)
Proceeds from equity infusion 185.4 185.4
Fees paid to issue long term debt (35.0) -- -- -- (35.0)
------ ------ ------- ------ ------
Cash provided from (used by)
financing activities 181.4 (137.7) (1.2) -- 42.5
Increase (decrease) in parent advances (148.0) 137.7 5.3 5.0 --
Effect of Exchange Rates on Cash and
cash equivalents -- -- -- -- --
------ ------ ------- ------ ------
Net Increase (decrease) in cash and
cash equivalents 13.4 0.4 -- -- 13.8
Cash and cash equivalents at Beginning
of period 1.0 0.1 0.7 -- 1.8
------ ------ ------- ------ ------
Cash and cash equivalents at End of
period 14.4 0.5 0.7 -- 15.6
====== ====== ======= ====== ======
</TABLE>
13
<PAGE> 14
HAYES WHEELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED OCTOBER 31, 1996 AND 1995
(UNAUDITED)
(MILLIONS OF DOLLARS UNLESS OTHERWISE STATED)
(5) GUARANTOR AND NONGUARANTOR FINANCIAL STATEMENTS -- CONT'D.
For the Nine Months Ended October 31, 1995
<TABLE>
<CAPTION>
Guarantor Nonguarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Total
------- ------------ ------------ ------------ -----
<S> <C> <C> <C> <C> <C>
Cash flow provided from (used by)
operating activities 33.9 (5.2) 6.0 (4.6) 30.1
Cash flows from investing activities:
Acquisition of property, plant & equipment (16.5) (12.2) (3.5) -- (32.2)
Other, net (7.7) 2.7 (1.2) -- (6.2)
------- ------ ------- ------- ------
Cash flow used by investing activities (24.2) (9.5) (4.7) -- (38.4)
Cash flows from financing activities:
Increase (decrease) in foreign bank
borrowings and loans -- -- (5.7) -- (5.7)
Increase (decrease) in bank revolving
and other domestic borrowing 17.0 (1.3) -- -- 15.7
Dividends paid to shareholders (0.8) -- -- -- (0.5)
------- ------ ------- ------- ------
Cash provided from (used by)
financing activities 16.2 (1.3) (5.7) -- 9.2
Increase (decrease) in parent (24.7) 15.9 4.2 4.6 --
Effect of Exchange Rates on Cash and
cash equivalents -- -- -- -- --
------- ------ ------- ------- ------
Net Increase (decrease) in cash and
cash equivalents 1.2 (0.1) (0.2) -- 0.9
Cash and cash equivalents at Beginning
of period 0.1 0.1 0.3 -- 0.5
------- ------ ------- ------- ------
Cash and cash equivalents at End of period 1.3 -- 0.1 -- 1.4
======= ====== ======= ======= ======
</TABLE>
14
<PAGE> 15
HAYES WHEELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED OCTOBER 31, 1996 AND 1995
(UNAUDITED)
(MILLIONS OF DOLLARS UNLESS OTHERWISE STATED)
(6) COMMITMENTS AND CONTINGENCIES
Management believes that at October 31, 1996, the Company was in
compliance with its various financial covenants. Management expects that the
Company will remain in compliance with its financial covenants in all material
respects through the period ending October 31, 1997.
The Company is party to various litigation. Management believes that the
outcome of these lawsuits will not have a material adverse effect on the
consolidated operations or financial condition of the Company.
(7) SUBSEQUENT EVENTS
On December 6, 1996, the Company's Board of Directors declared a stock
split to be effected in the form of a stock dividend. This dividend will be
accomplished through the issuance of one share of the Company's voting common
stock and one share of the Company's nonvoting common stock for every
outstanding share of voting and nonvoting common stock, respectively. The
stock dividend will be payable on January 6, 1997 to stockholders of record at
the close of business on December 20, 1996. Net income-Post Split and weighted
average shares outstanding-Post Split reflect the retroactive restatement of
the stock split for all periods presented.
On December 6, 1996, the Company signed a Letter of Intent (the
"Letter") with Lemmerz Holding GmbH ("Lemmerz") and each of the shareholders of
Lemmerz, wherein the Company acknowledged its intent to acquire 76.63% of the
total equity capital interest in Lemmerz (the "Acquisition").
As contemplated by the Letter, the Acquisition would be accomplished by
the Company's payment to the Lemmerz shareholders of $109.9 million in cash and
3,750,000 newly issued shares of Series A convertible preferred stock of the
Company. Each share of such preferred stock is convertible, upon approval of
the Company's stockholders, into one share of the Company's common voting
shares, or in the aggregate, 3,750,000 common voting shares (7,500,000 common
voting shares after taking into account the completion of the stock split
described above). The Company will also seek approval from its stockholders to
change the name of the Company to "Hayes Lemmerz International, Inc."
Lemmerz is the leading full-line wheel supplier in Europe and
manufactures steel and aluminum wheels for automobiles and light trucks, and
steel wheels for heavy-duty trucks and had revenues of approximately $450
million. If the Acquisition is completed, Lemmerz, or an entity formed for the
purpose of receiving the Lemmerz shares in the Acquisition, would become a
subsidiary of the Company.
Consummation of the Acquisition is subject to various conditions, including
(i) the negotiation and execution of a definitive, legally binding, written
agreement and agreements with key management employees, (ii) receipt by Lemmerz,
the Lemmerz shareholders and the Company of all required governmental and
third-party approvals to the Acquisition, including, but not limited to, the
expiration or termination of any applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and any
applicable German or other antitrust legislation, and (iii) the satisfactory
completion of due diligence reviews of Lemmerz and the Company, by the Company
and the Lemmerz shareholders, respectively.
15
<PAGE> 16
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
On December 9, 1996, the Company announced that it had signed a Letter of
Intent (the "Letter") with Lemmerz Holding GmbH ("Lemmerz") and each of the
shareholders of Lemmerz, wherein the Company acknowledged its intent to
acquire 76.63% of Lemmerz (the "Acquisition"). See "Item 1, Note 7 -
Subsequent Events."
Lemmerz is the leading full-line steel wheel supplier in Europe. Lemmerz
manufactures steel and aluminum wheels for automobiles and light trucks, and
steel wheels for heavy-duty trucks. If the Acquisition is completed, Lemmerz,
or an entity formed for the purpose of receiving the Lemmerz shares in the
Acquisition, would become a wholly-owned subsidiary of the Company.
If the Acquisition is consummated, the respective businesses of the
Company and Lemmerz will be combined. As a result, the results of operations
of the combined entity may not be comparable to the results of operations of the
Company prior to the Acquisition.
The discussion below does not take into account the execution of the
Letter or the Acquisition.
RESULTS OF OPERATIONS
THREE MONTHS ENDED OCTOBER 31, 1996 COMPARED TO THREE MONTHS ENDED OCTOBER 31,
1995
The Company's net sales for the third quarter of fiscal 1996 increased by
$76.5 million or 48.4% compared to the third quarter of fiscal 1995. This
increase was due to the additional sales contributed by Motor Wheel, which was
acquired on July 2, 1996, and higher revenues in the Company's North American
Aluminum Wheel and aftermarket groups. This increase was partially offset by
lower selling prices due to the pass through of lower aluminum costs for the
quarter and the negative effects of the UAW and CAW strikes against General
Motors.
The Company's gross profit for the third quarter of fiscal 1996 was $35.9
million or 15.3% of net sales, versus $25.2 million or 16.0% of net sales for
the same period in 1995. The decrease in margin percentage was due primarily
to the UAW and CAW strikes against General Motors.
Marketing, general and administration expenses increased by $2.0 million
in the third quarter of fiscal 1996 as compared to the third quarter of fiscal
1995. However, these costs decreased from 4.8% of net sales for the third
quarter of fiscal 1995 to 4.1% of net sales for the current period due to
synergies being recognized as a result of the consolidation of the Hayes Wheels
and Motor Wheel headquarters. The Company believes marketing, general and
administration expense will continue to improve as a percentage of net sales
due to the continuation of these savings.
Engineering and product development expense increased by $0.6 million in
the third quarter of fiscal 1996 as compared to the third quarter of fiscal
1995. However, these costs remained level at 0.9% of net sales for the same
period of fiscal 1996 and 1995.
Other income increased by $1.3 million in the third quarter of fiscal
1996 as compared to the third quarter of fiscal 1995. This increase is due to
the recognition of a gain on the sale of the Company's 7.0% equity investment
in Central Manufacturing Company located in Kentucky and the timing of the sale
of molds in the Company's European operations.
Interest expense increased to $18.3 million for the third quarter of
fiscal 1996, an increase of $14.6 million from the same period in 1995. This
change was primarily caused by increased debt as a result of the acquisition of
Motor Wheel and recapitalization of the Company.
16
<PAGE> 17
NINE MONTHS ENDED OCTOBER 31, 1996 COMPARED TO NINE MONTHS ENDED OCTOBER 31,
1995
The Company's net sales for the first nine months of fiscal 1996
increased by $86.8 million or 18.5% compared to the first nine months of fiscal
1995. This increase was due to additional sales contributed by Motor Wheel
which was acquired effective July 2, 1996, and increased volume in North
America. These results were partially offset by the General Motors strikes
during the first and third quarters and lower selling prices due to the pass
through of lower aluminum costs.
The Company's gross profit for the first nine months of fiscal 1996
decreased to $69.5 million or 12.5% of net sales, compared with $74.8 million or
15.9% of net sales for the same period in 1995. The decrease in margin
percentage was attributable to: (1) the writedown of certain assets during the
second quarter, (2) inefficiencies in former Motor Wheel plants that are either
being prepared for or are undergoing closure or major restructuring, and (3)
production losses resulting from the General Motors strikes. The Company
believes that margins will continue to improve through the end of fiscal 1996 in
comparison with the first nine months because it anticipates that it will
benefit from the closure and restructuring of former Motor Wheel facilities and
asset writedowns.
Marketing, general and administration expenses were $2.6 million higher
in the first nine months of fiscal 1996 as compared to the first nine months of
fiscal 1995. These costs decreased from 4.9% of net sales for the first same
period of fiscal 1995 to 4.6% of net sales for the current period due to the
synergies being recognized as a result of the consolidation of the Hayes Wheels
and Motor Wheel headquarters. The Company believes marketing, general and
administration expense will continue to improve as a percent of net sales due
to savings recognized as a result of merger synergies for the remainder of
fiscal 1996.
Engineering and product development expenses increased $2.3 million in
the first nine months of fiscal 1996 versus the first nine months of fiscal
1995. The increase is due to additional engineering and product development
costs related to new product lines acquired as a result of the merger and a
decrease in recovery on engineering expenses related to the timing of new
programs.
Other income increased by $2.2 million during the first nine months of
fiscal 1996 as compared to the same period in fiscal 1995. This increase is
due to the recognition of a gain on the sale of the Company's 7.0% equity
investment in Central Manufacturing Company located in Kentucky and the timing
of the sales of molds in the Company's European operations for the first and
third quarters of fiscal 1996.
Equity in loss of subsidiaries in 1996 includes recognition of losses of
the Company's Czech joint venture during its early production stage and a
writedown of the Company's investment in Hayes Wheels de Mexico, S.A. Due to
the ongoing condition of the Mexican economy, management determined that the
Company's investment in Mexico had become impaired resulting in a writedown of
the investment amount.
Nonrecurring charges of $6.4 million consist of the elimination of $2.9
million of deferred costs resulting from a previous patent infringement suit
with Motor Wheel and $3.5 million of stock compensation recorded in conjunction
with the payout of the management stock option plan.
Interest expense increased to $30.4 million for the first nine months of
fiscal 1996, an increase of $19.1 million from the same period in 1995. This
change was primarily caused by (1) increased debt as a result of the acquisition
of Motor Wheel and the recapitalization of the Company and (2) higher bank fees
and interest rates associated with the increased debt incurred during this
period.
The extraordinary loss for bond defeasance represents the redemption
premium and unamortized debt issue costs related to the 9 1/4% Senior Notes due
2002, of which $98.5 million principal amount was retired as part of the
Company's recapitalization.
17
<PAGE> 18
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
The Company's operations provided $29.3 million in cash during the first
nine months of fiscal 1996, a decrease of $0.8 million over the same period of
fiscal 1995. This decrease includes a payment of $14.0 million to the Company's
pension plans including additional funding per agreement with the Pension
Benefit Guaranty Corporation, offset by decreased working capital requirements
for the first nine months of fiscal 1996.
Capital expenditures for the first nine months of fiscal 1996 amounted to
$51.4 million, an increase of $19.2 million from the same period in 1995. These
capital expenditures include the acquisition of machinery and equipment
primarily for additional production capacity at our North American facilities
to meet future customer requirements for fabricated aluminum and Full Face
Modular (R) ("FFM") wheels. The Company anticipates that total capital
expenditures for fiscal 1996 will be approximately $80 million.
The Company is party to a Credit Agreement, dated June 27, 1996 (the
"Credit Agreement") with Canadian Imperial Bank of Commerce ("CIBC") and Merrill
Lynch Capital Corporation, as Managing Agents. Pursuant to the Credit
Agreement, among other things, the Managing Agents have committed to lend to the
Company up to $425 million in the form of a senior secured term loan facility,
such aggregate amount being allocated among (i) a Tranche A Term Loan facility
in an aggregate principal amount of up to $200 million , (ii) a Tranche B Term
Loan Facility in an aggregate principal amount of up to $125 million and (iii)
a Tranche C Term Loan Facility in an aggregate principal amount of up to $100
million (collectively, the "Facilities"), and up to $220 million in the form of
a senior secured revolving credit facility (the "Revolving Facility", and
together with the Facilities, the "Loans"). In addition, CIBC agreed to serve
as administrative and syndication agent (the "Agent") in connection with the
Loans. The Facilities are guaranteed by the Company and all of its existing and
future domestic subsidiaries. The Facilities are secured by a first priority
lien in substantially all of the properties and assets of the Company and its
domestic subsidiaries, now owned or acquired later, including a pledge of all of
the shares of certain of the Company's existing and future domestic subsidiaries
and 65% of the shares of certain of the Company's existing and future foreign
subsidiaries. As of October 31, 1996, there was $423.5 million outstanding
under this agreement.
In connection with the Merger and as part of the financing thereof, the
Company issued and sold $250 million in aggregate principal amount of its 11%
Senior Subordinated Notes due 2006 (the "Senior Subordinated Notes") in a
public offering. The Senior Subordinated Notes are general unsecured
obligations of the Company, subordinated in right of payment to all existing
and future senior indebtedness of the Company, and are guaranteed by certain of
the Company's domestic subsidiaries. The Company also retired $98.5 million
principal amount of the Company's 9 1/4% Senior Notes due 2002 and Motor Wheel
redeemed all of its 11 1/2% Senior Notes due 2000 ($125 million principal
amount) and repaid and terminated its revolving credit facility.
Management believes that, at October 31, 1996, the Company was in
compliance with its various financial covenants. Management expects that the
Company will remain in compliance with its financial covenants in all material
respects through the period ending October 31, 1997.
During the next five years, the Company believes that its cash
requirements for working capital, capital expenditures, interest and debt
repayments will be met through internally generated funds and utilization of
available borrowing sources.
18
<PAGE> 19
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security-Holders
None
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit Number Description
-------------- -----------
27 Financial Data Schedule
(b) Reports on Form 8-K
None
19
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HAYES WHEELS INTERNATIONAL, INC.
December 13, 1996 By: /s/ William D. Shovers
--------------------------
William D. Shovers
Vice President --
Chief Financial Officer
and Principal Accounting Officer
20
<PAGE> 21
EXHIBIT INDEX
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------ ----------- ----
27 Financial Data Schedule
21
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-START> FEB-01-1996
<PERIOD-END> OCT-31-1996
<CASH> 15,600
<SECURITIES> 0
<RECEIVABLES> 142400
<ALLOWANCES> 0
<INVENTORY> 74600
<CURRENT-ASSETS> 244900
<PP&E> 548500
<DEPRECIATION> (132900)
<TOTAL-ASSETS> 1110400
<CURRENT-LIABILITIES> 200000
<BONDS> 0
0
0
<COMMON> 100
<OTHER-SE> 25300
<TOTAL-LIABILITY-AND-EQUITY> 1110400
<SALES> 234400
<TOTAL-REVENUES> 234400
<CGS> 198500
<TOTAL-COSTS> 198500
<OTHER-EXPENSES> 9800
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18300
<INCOME-PRETAX> 7800
<INCOME-TAX> 3100
<INCOME-CONTINUING> 4700
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4700
<EPS-PRIMARY> 0.42
<EPS-DILUTED> 0.42
</TABLE>
