<PAGE> 1
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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 JULY 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 SEPTEMBER 12, 1996 WAS
11,195,259 SHARES.
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This report consists of 18 pages.
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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 .. 13
<CAPTION>
PART II. OTHER INFORMATION
<S> <C> <C>
Item 1. Legal Proceedings ....................................................................... 16
Item 2. Changes in Securities ................................................................... 16
Item 3. Defaults upon Senior Securities ......................................................... 16
Item 4. Submission of Matters to a Vote of Security-Holders ..................................... 16
Item 5. Other Information ....................................................................... 16
Item 6. Exhibits and Reports on Form 8-K ........................................................ 17
SIGNATURES ............................................................................................... 18
</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 JULY 31, SIX MONTHS ENDED JULY 31,
--------------------------- -------------------------
1996 1995 1996 1995
------ ------- ------ ------
<S> <C> <C> <C> <C>
Net sales ......................................... $ 165.3 $ 151.4 $ 321.4 $ 311.2
Cost of goods sold ................................ 154.3 128.4 287.8 261.6
------- ------- ------- -------
Gross profit ................................ 11.0 23.0 33.6 49.6
Marketing, general and administration ............. 8.2 7.7 16.0 15.3
Engineering and product development ............... 1.7 0.6 3.6 1.9
Other income ...................................... (1.1) (0.9) (1.7) (0.7)
Equity in loss of subsidiaries ................... 3.2 -- 3.2 --
Nonrecurring charges .............................. 6.4 -- 6.4 --
------ ------- ------- -------
Earnings (loss) from operations ............. (7.4) 15.6 6.1 33.1
Interest expense, net ............................. 8.5 3.8 12.1 7.6
------ ------- ------- -------
Income (loss) before taxes on income and
extraordinary items .................. (15.9) 11.8 (6.0) 25.5
Income tax provision (benefit) ..................... (6.4) 4.6 (2.6) 10.0
------- ------- ------- -------
Income (loss) before extraordinary items .... (9.5) 7.2 (3.4) 15.5
Extraordinary Items:
Bond defeasance, net of tax of $4.9 ......... (7.4) -- (7.4) --
------- ------- ------- -------
Net income (loss) ........................... $ (16.9) $ 7.2 $ (10.8) $ 15.5
======= ======= ======= =======
Per share income :
Income (loss) before extraordinary items .... $ (0.61) $ 0.41 $ (0.20) $ 0.88
Extraordiary items, net of tax .......... (0.48) ---- (0.45) ----
------- ------- ------- -------
Net Income (loss) ........................... $ (1.09) $ 0.41 $ (0.65) $ 0.88
======= ======= ======= =======
Weighted average shares outstanding (in thousands) . 15,543 17,574 16,542 17,574
======= ======= ======= =======
Dividends declared per share ....................... $ 0.015 $ 0.015 $ 0.030 $ 0.030
======= ======= ======= =======
</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>
JULY 31, JAN 31,
1996 1996
-------- -------
(UNAUDITED)
ASSETS
------
<S> <C> <C>
Current assets:
Cash and cash equivalents .................................... $ 20.5 $ 1.8
Receivables (less allowance of $2.0 million and $0.1 million
at July 31, 1996 and January 31, 1996) ...................... 125.0 109.6
Inventory (Note 3) ........................................... 82.3 58.9
Prepaid expenses and other ................................... 9.2 9.9
------- ------
Total current assets ................................... 237.0 180.2
------- ------
Property, plant and equipment:
Land ......................................................... 19.4 18.3
Buildings .................................................... 86.8 76.8
Machinery and equipment ...................................... 430.8 319.7
------- ------
537.0 414.8
Accumulated depreciation ..................................... (124.7) (110.4)
------- ------
Net property, plant and equipment ...................... 412.3 304.4
Goodwill and other assets .......................................... 446.2 149.3
-------- ------
Total assets ................................................. $1,095.5 $633.9
======== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Bank borrowings .............................................. $ 2.7 $ 4.1
Current portion of long-term debt ............................ 0.2 0.1
Accounts payable and accrued liabilities ..................... 176.7 125.5
-------- ------
Total current liabilities .............................. 179.6 129.7
-------- ------
Noncurrent liabilities:
Long-term debt ............................................... 681.2 128.9
Deferred income taxes ........................................ 34.6 48.1
Pension and other long-term liabilities ...................... 179.5 81.8
Total noncurrent liabilities ........................... 895.3 258.8
Commitments and Contingencies (Note 6)
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 ................................... (14.8) 198.5
Retained earnings ............................................ 38.4 49.6
Foreign currency translation adjustment ...................... (0.5) (0.3)
Pension liability adjustment ................................. (2.6) (2.6)
-------- ------
Total stockholders' equity ............................. 20.6 245.4
-------- ------
Total liabilities and stockholders' equity ................... $1,095.5 $633.9
======== ======
</TABLE>
See accompanying notes to consolidated financial statements.
4
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HAYES WHEELS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(MILLIONS OF DOLLARS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JULY 31,
-------------------------
1996 1995
------- ------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) .................................................... $ (10.8) $ 15.5
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation ....................................................... 15.7 13.0
Amortization of intangibles and debt issue costs ................... 3.6 3.0
Increase (decrease) in deferred taxes .............................. (13.9) 0.6
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 ................................ 17.6 (6.7)
(Increase) decrease in inventories ................................ (5.7) 7.1
(Increase) decrease in prepaid expenses and other ................. 1.2 (0.5)
Decrease in accounts payable and accrued liabilities .............. (11.3) (9.1)
Increase (decrease) in other long-term liabilities ............... (13.4) 0.3
------- ------
Cash provided by operating activities .......................... 16.8 23.2
------- ------
Cash flows from investing activities:
Acquisition of property, plant and equipment ....................... (38.6) (17.6)
Other, net ......................................................... (6.7) (5.6)
------- ------
Cash used for investing activities ............................. (45.3) (23.2)
------- ------
Cash flows from financing activities:
Decrease in foreign bank borrowings and loans ...................... (1.5) (5.0)
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) (0.5)
Fees paid to issue long term debt .................................. (35.0)
Increase (decrease) in bank revolving loan & other domestic loans .. (24.5) 9.2
------- ------
Cash provided by financing activities .......................... 47.2 3.7
------- ------
Effect of exchange rate changes on cash and cash equivalents .......... -- --
------- ------
Increase in cash and cash equivalents .......................... 18.7 3.7
Cash and cash equivalents at beginning of year ........................ 1.8 0.5
------- ------
Cash and cash equivalents at end of period ............................ $ 20.5 $ 4.2
======= ======
Supplemental data:
Cash paid for interest ............................................. $ 8.8 $ 7.0
Cash paid for income taxes ......................................... $ 5.1 10.1
</TABLE>
See accompanying notes to consolidated financial statements.
5
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HAYES WHEELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED JULY 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 July 31, 1996 and January 31, 1996, and
the results of its operations for the three and six months ended July 31, 1996
and 1995 and cash flows for the six months ended July 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>
JULY 31, JAN 31,
1996 1996
-------- -------
<S> <C> <C>
Raw materials ......................... $ 29.1 $ 19.7
Work-in-progress ...................... 18.0 13.5
Finished goods ........................ 35.2 25.7
------- ------
Total ............... $ 82.3 $ 58.9
======= ======
</TABLE>
(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.
6
<PAGE> 7
HAYES WHEELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED JULY 31, 1996 AND 1995
(UNAUDITED)
(MILLIONS OF DOLLARS UNLESS OTHERWISE STATED)
(4) ACQUISITIONS AND RECAPITALIZATION (CONTINUED)
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 Six Months Ended
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales $219.1 $232.5 $456.4 $493.9
Operating income (loss) (6.6) 15.8 8.7 41.6
Net Income (loss) (21.9) (1.3) (23.3) 3.6
Net Income (loss) per share $(1.97) $(0.12) $(2.09) $ 0.32
</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.
(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 July 31, 1996
and January 31, 1996 and for the three month periods ended July 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.
7
<PAGE> 8
HAYES WHEELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED JULY 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 Six Months Ended July 31, 1996
<TABLE>
<CAPTION>
Guarantor Nonguarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Total
------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales $ 126.5 $ 156.4 $ 40.5 $ (2.0) $ 321.4
Cost of goods sold 123.3 132.8 33.7 (2.0) 287.8
------- ------- -------- ------- -------
Gross profit 3.2 23.6 6.8 - 33.6
Marketing, general and administrative 4.8 9.0 2.2 - 16.0
Engineering and product development 2.0 1.1 0.5 - 3.6
Other (income) expense 0.1 (1.8) (1.7)
Equity in loss of subsidiaries 3.2 3.2
Nonrecurring charges 6.4 - - 6.4
------- ------- -------- ------- -------
Earnings (loss) from operations (13.3) 13.5 5.9 - 6.1
Interest expense, net 5.2 6.7 0.2 - 12.1
Earnings in subsidiaries (3.1) - - 3.1 -
------- ------- -------- ------- -------
Income (loss) before taxes on (15.4) 6.8 5.7 (3.1) (6.0)
income and extraordinary items
Income tax provision (benefit) (7.8) 2.6 2.6 - (2.6)
------- ------- -------- ------- -------
Income (loss) before extraordinary
items (7.6) 4.2 3.1 (3.1) (3.4)
Extraordinary items:
Bond defeasance, net of tax ($4.9) (7.4) - - - (7.4)
------- ------- -------- ------- -------
Net Income (loss) $ (15.0) $ 4.2 $ 3.1 $ (3.1) $ (10.8)
======= ======= ======== ======= =======
</TABLE>
For the Six Months Ended July 31, 1995
<TABLE>
<CAPTION>
Guarantor Nonguarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Total
------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales $ 119.1 $ 146.0 $ 47.6 $ (1.5) $ 311.2
Cost of goods sold 99.7 125.4 38.0 (1.5) 261.6
------- ------- -------- ------- -------
Gross profit 19.4 20.6 9.6 - 49.6
Marketing, general and administrative 5.8 7.7 1.8 - 15.3
Engineering and product development 0.5 0.8 0.6 - 1.9
Other (income) expense (0.2) - (0.5) - (0.7)
------- ------- -------- ------- -------
Earnings from operations 13.3 12.1 7.7 - 33.1
Interest expense, net 3.1 3.8 0.7 - 7.6
Earnings in subsidiaries (3.7) - - 3.7 -
------- ------- -------- ------- -------
Earnings before taxes on income 13.9 8.3 7.0 (3.7) 25.5
Income tax provision 4.1 2.7 3.2 - 10.0
------- ------- -------- ------- -------
Net Income $ 9.8 $ 5.6 $ 3.8 $ (3.7) $ 15.5
======= ======= ======== ======= =======
</TABLE>
8
<PAGE> 9
HAYES WHEELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED JULY 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
July 31, 1996
<TABLE>
<CAPTION>
Guarantor Nonguarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Total
------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Current Assets
Cash and Cash Equivalents 19.5 0.5 0.5 - 20.5
Accounts Receivable 37.3 61.6 26.1 - 125.0
Inventories 35.0 43.4 3.9 - 82.3
Prepaids and Other 3.7 2.9 2.9 (0.3) 9.2
------ ----- ----- ------ -------
Total Current Assets 95.5 108.4 33.4 (0.3) 237.0
Gross Fixed Assets 210.1 260.6 66.3 - 537.0
Accumulated Depreciation (43.1) (59.1) (22.5) - (124.7)
------ ----- ----- ------ -------
Net Fixed Assets 167.0 201.5 43.8 - 412.3
Other Assets 304.4 350.6 5.0 (213.8) 446.2
Total Assets 566.9 660.5 82.2 (214.1) 1,095.5
====== ===== ===== ====== =======
Bank Borrowings - - 2.7 - 2.7
Current Portion Debt 0.1 - 0.1 - 0.2
Accounts Payable and Accrued
Liabilities 74.3 81.8 20.9 (0.3) 176.7
------ ----- ----- ------ -------
Total Current Liabilities 74.4 81.8 23.7 (0.3) 179.6
Long Term Debt 680.9 - 0.3 - 681.2
Pensions and Other Long Term
Liabilities 63.4 110.6 9.8 (4.3) 179.5
Deferred Taxes Payable 13.2 12.9 8.5 - 34.6
Parent Loans and Advances (251.7) 253.9 20.3 (22.5) -
------ ----- ----- ------ -------
Total Long Term Liabilities 505.8 377.4 38.9 (26.8) 895.3
Common Stock 0.1 - - - 0.1
Additional Paid In Capital (14.8) 110.5 1.9 (112.4) (14.8)
Retained Earnings 5.3 90.8 15.6 (73.3) 38.4
Pension Adjustment (2.6) - - - (2.6)
Currency Translation Adjustment (1.3) - 2.1 (1.3) (0.5)
------ ----- ----- ------ -------
Total Stockholders' Equity (13.3) 201.3 19.6 (187.0) 20.6
Total Liabilities and
Stockholders' Equity 566.9 660.5 82.2 (214.1) 1,095.5
====== ===== ===== ====== =======
</TABLE>
9
<PAGE> 10
HAYES WHEELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED JULY 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
===== ===== ====== ======= =======
Bank Borrowings - - 4.1 - 4.1
Current Portion 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 Taxes Payable 18.4 18.0 11.7 - 48.1
Parent Loans and Advances (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 443.9 254.7 78.9 (143.6) 633.9
===== ===== ====== ======= =======
</TABLE>
10
<PAGE> 11
HAYES WHEELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED JULY 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 Cash Flows
For the Six Months Ended July 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 12.1 7.1 0.7 (3.1) 16.8
Cash flows from investing activities:
Acquisition of property, plant & equipment (31.8) (4.0) (2.8) - (38.6)
Other, net 3.8 (10.5) - - (6.7)
------ ------ ---- ---- ------
Cash flow used by investing activities (28.0) (14.5) (2.8) - (45.3)
Cash flows from financing activities:
Increase (decrease) in foreign bank
borrowings and loans - - (1.5) - (1.5)
Increase (decrease) in bank revolving
and other domestic borrowing (24.5) - - - (24.5)
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 186.4 (137.7) (1.5) - 47.2
Increase (decrease) in parent advances (152.0) 145.5 3.4 3.1 0.0
Effect of Exchange Rates on Cash and
cash equivalents - - - - -
------ ------ ---- ---- ------
Net Increase (decrease) in cash and
cash equivalents 18.5 0.4 (0.2) - 18.7
Cash and cash equivalents at Beginning
of period 1.0 0.1 0.7 - 1.8
------ ------ ---- ---- ------
Cash and cash equivalents at End of
period 19.5 0.5 0.5 - 20.5
====== ====== ==== ==== ======
</TABLE>
For the Six Months Ended July 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 20.0 0.1 6.8 (3.7) 23.2
Cash flows from investing activities:
Acquisition of property, plant & equipment (6.8) (7.9) (2.9) - (17.6)
Other, net (7.1) 2.7 (1.2) - (5.6)
------ ------ ---- ---- ------
Cash flow used by investing activities (13.9) (5.2) (4.1) - (23.2)
Cash flows from financing activities:
Increase (decrease) in foreign bank
borrowings and loans - - (5.0) - (5.0)
Increase (decrease) in bank revolving
and other domestic borrowing 10.5 (1.3) - - 9.2
Dividends paid to shareholders (0.5) - - - (0.5)
------ ------ ---- ---- ------
Cash provided from (used by)
financing activities 10.0 (1.3) (5.0) - 3.7
Increase (decrease) in parent (12.6) 6.4 2.5 3.7 (0.0)
Effect of Exchange Rates on Cash and
cash equivalents - - - - -
------ ------ ---- ---- ------
Net Increase (decrease) in cash and
cash equivalents 3.5 - 0.2 - 3.7
Cash and cash equivalents at Beginning
of period 0.1 0.1 0.3 - 0.5
------ ------ ---- ---- ------
Cash and cash equivalents at End of
period 3.6 0.1 0.5 - 4.2
====== ====== ==== ==== ======
</TABLE>
11
<PAGE> 12
HAYES WHEELS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED JULY 31, 1996 AND 1995
(UNAUDITED)
(MILLIONS OF DOLLARS UNLESS OTHERWISE STATED)
(6) COMMITMENTS AND CONTINGENCIES
Management believes that at July 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 July 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.
12
<PAGE> 13
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED JULY 31, 1996 COMPARED TO THREE MONTHS ENDED JULY 31, 1995
The Company's net sales for the second quarter of fiscal 1996 increased by
$13.9 million or 9.2% compared to the second quarter of fiscal 1995. This
increase was due to the additional sales in July contributed by Motor Wheel,
which was acquired on July 2, 1996. This increase was partially offset
by lower selling prices due to the pass through of lower raw material costs for
the quarter.
The Company's gross profit for the second quarter of fiscal 1996 decreased
to $11.0 million or 6.7% of net sales, from $23.0 million or 15.2% of net sales
for the same period in 1995. The decrease in margin percentage was
attributable to: (1) writedown of certain assets and (2) inefficiencies in
former Motor Wheel facilities that are either being prepared for closure or are
undergoing major restructuring. As part of the merger, Company management
undertook a study to analyze the level of maintenance, repair and operating
("MRO") inventory. It was determined that due to numerous new programs,
changing vehicle platforms and duplicate inventory items as a result of the
merger, a significant portion of the MRO inventory and back-up tooling was
deemed unnecessary and subsequently taken as a charge to gross margin.
Marketing, general and administration expenses increased by $0.5 million
in the second quarter of fiscal 1996 as compared to the second quarter of
fiscal 1995. However, these costs decreased from 5.1% of net sales for the
second quarter of fiscal 1995 to 4.8% of net sales for the current period. The
Company believes marketing, general and administration expense will continue to
improve as a percentage of net sales due to savings recognized as a result of
merger synergies for the remainder of fiscal 1996.
Engineering and product development expense increased by $1.1 million in
the second quarter of fiscal 1996 as compared to the second quarter 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 from the customer on engineering expenses related to the
timing of new programs.
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 Corporation and $3.5 million of stock compensation recorded in
conjunction with the payout of the management stock option plan.
Interest expense increased to $8.5 million for the second quarter of
fiscal 1996, an increase of $4.7 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 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.
SIX MONTHS ENDED JULY 31, 1996 COMPARED TO SIX MONTHS ENDED JULY 31, 1995
The Company's net sales for the first half of fiscal 1996 increased by
$10.2 million or 3.3% compared to the first half of fiscal 1995. This increase
was due to additional sales in July contributed by Motor Wheel which was
acquired effective July 2, 1996 and increased volume in North America offset by
the General Motors strike during the first quarter which resulted in a sales
reduction of approximately $12 million and lower selling prices due to the pass
through of lower raw material costs.
13
<PAGE> 14
The Company's gross profit for the first half of fiscal 1996 decreased
to $33.6 million or 10.5% of net sales, compared with $49.6 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 referred to
above, (2) inefficiencies in former Motor Wheel plants referred to above and
(3) production losses resulting from the General Motors strike. The Company
believes that margins will improve in the second half of fiscal 1996 in
comparison with the first half because it anticipates that it will benefit from
the current closure and restructuring of former Motor Wheel facilities and
asset writedowns.
Marketing, general and administration expenses increased $0.7 million in
the first half of fiscal 1996 as compared to the first half of fiscal 1995.
These costs remained level at approximately 5.0% of net sales for the first
same period of fiscal 1996 and 1995. 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 $1.7 million in the
first half of fiscal 1996 versus the first half 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.
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 $12.1 million for the first half of fiscal
1996, an increase of $4.5 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.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
The Company's operations provided $16.8 million in cash during the first
half of fiscal 1996, a decrease of $6.4 million over the same period of fiscal
1995. This decrease includes a payment of $14 million to the Pension Benefit
Guaranty Corporation for additional funding to the Company's pension plans as a
result of the merger partially offset by lower working capital requirements for
the first half of fiscal 1996.
Capital expenditures for the first half of fiscal 1996 amounted to $38.6
million, an increase of $21 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.
14
<PAGE> 15
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. 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 July 31, 1996, there was $428.5 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 July 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 July 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.
15
<PAGE> 16
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
On July 2, 1996, by virtue of the Merger, each share of the
Common Stock, par value $.01 per share of the Registrant, was
converted into one-tenth on one share of the Registrant's new Common
Stock, par value $.01 per share, plus $28.80 in cash and the
Registrant's Restated Certificate of Incorporation was amended. The
provisions of such amendment affected the rights of the holders of
Registrant's Common Stock. A description of the effect of such
amendment is contained under the caption "Comparison of Stockholder
Rights" in the Registrant's Registration Statement on Form S-4
(Registration No. 333-04909), which description is incorporated by
reference. The foregoing discussion is qualified in its entirety by
such reference.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security-Holders
On July 2, 1996, a special meeting of the stockholders of the
Registrant was held to consider and act upon the Merger. At that
meeting, the Merger was approved, with votes cast as follows:
FOR 14,704,282
----------
AGAINST 80,197
----------
ABSTAIN 20,720
----------
By virtue of the approval of the Merger, without any separate vote, the
following persons were elected directors of the Registrant
Rauko "Ron" Cucuz
Timothy J. Clark
Cleveland A. Christophe
Peter A. Joseph
Paul S. Levy
John S. Rodewig
Marcos A. Rodriguez
Kenneth L. Way
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit Number Description
-------------- -----------
10.1 Amendment No. 1, dated as of
July 29, 1996, among the
Registrant, the Guarantors
named therein, Motor Wheel
Corporation, AMW Holdings,
Inc. and MWC Acquisition Sub,
Inc. (the "New Subsidiaries")
and Comerica Bank, as Trustee
(the "Indenture Amendment").
10.2 Guarantee executed by each of
the New Subsidiaries pursuant
to the Indenture Amendment.
27 Financial Data Schedule
(b) Reports on Form 8-K
The Registrant filed a Current Report on Form 8-K, dated June 25,
1996, reporting, under Item 5 thereof, certain contributions to
be made to certain pension plans of the Registrant and Motor Wheel in
connection with the Merger pursuant to an agreement with Pension
Benefit Guarantee Corporation.
The Registrant filed a Current Report on Form 8-K, dated July
2, 1996, reporting (a) under Items 1 and 2, the consummation of the
Merger, certain financing and other transactions which occurred in
connection therewith, the names of the persons who became directors
of the Registrant by virtue of the approval of the Merger, the names
of persons who owned more than 5% of Registrant's Common Stock
immediately after the consummation of the Merger and the amount of
Common Stock owned by each and (b) under Item 7, filing the following
financial statements:
(a) Financial Statements of MWC Holdings, Inc. (Incorporated
therein by reference to the Consolidated Financial Statements of MWC
Holdings, Inc. included in Post-Effective Amendment No. 1 to the
Registration Statement on Form S-3 of the Company, dated July 1,
1996 (Registration No. 333-03813))
(b) Pro Forma Financial Information (Incorporated therein by
reference to the Unaudited Pro Forma Combined Condensed Financial
Statements included in Post-Effective Amendment No. 1 to the
Registration Statement on Form S-3 of the Company, dated July 1, 1996
(Registration No. 333-03813))
16
<PAGE> 17
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.
September 16, 1996 by /s/William D. Shovers
----------------------------
William D. Shovers
Vice President -- Chief Financial Officer
and Principal Accounting Officer
<PAGE> 18
EXHIBIT INDEX
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------- ----------- ------------
10.1 Amendment No. 1, dated as of
July 29, 1996, among the
Registrant, the Guarantors
named therein, Motor Wheel
Corporation, AMW Holdings,
Inc. and MWC Acquisition Sub,
Inc. (the "New Subsidiaries")
and Comerica Bank, as Trustee
(the "Indenture Amendment").
10.2 Guarantee executed by each of
the New Subsidiaries pursuant
to the Indenture Amendment.
27 Financial Data Schedule
<PAGE> 1
EXHIBIT 10.1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
HAYES WHEELS INTERNATIONAL, INC.
THE GUARANTORS
and
COMERICA BANK, as Trustee
-------------------------
AMENDMENT NO. 1
Dated as of July 29, 1996
to the
INDENTURE
Date as of July 2, 1996
-----------------------
$250,000,000
11% Senior Subordinated Notes due 2006
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
AMENDMENT NO. 1, dated as of July 29, 1996 ("Amendment No. 1"), to the
INDENTURE, dated as of July 2, 1996 (the "Indenture"), among HAYES WHEELS
INTERNATIONAL, INC., a Delaware corporation, as Issuer (the "Company") HAYES
WHEELS INTERNATIONAL-CALIFORNIA, INC., a Delaware corporation, HAYES WHEELS
INTERNATIONAL-GEORGIA, INC., a Delaware corporation, HAYES WHEELS
INTERNATIONAL-INDIANA, INC., a Delaware corporation, HAYES WHEELS
INTERNATIONAL-MEXICO, INC., a Delaware corporation, and HAYES WHEELS
INTERNATIONAL-MICHIGAN, INC., a Michigan corporation (each, a "Guarantor" and,
collectively, the "Guarantors"), and COMERICA BANK, a Michigan banking
corporation, as Trustee (the "Trustee").
WHEREAS, MOTOR WHEEL CORPORATION, an Ohio corporation, AMW HOLDINGS,
INC., a Delaware corporation, and MWC ACQUISITION SUB, INC., a Delaware
corporation (collectively, the "New Subsidiaries") have become subsidiaries of
the Company;
WHEREAS, Section 4.18 of the Indenture requires that the New
Subsidiaries become guarantors under the Indenture; and
NOW, THEREFORE, in order to implement the foregoing, each party hereto
agrees for the benefit of the other parties and for the equal and ratable
benefit of the Holders of the Company's 11% Senior Subordinated Notes due 2006
(the "Notes") to amend, pursuant to Section 8.01(4) of the Indenture, the
Indenture as follows:
1. The New Subsidiaries are Restricted Subsidiaries as provided
for in Section 4.18 of the Indenture.
2. Each New Subsidiary delivers herewith the guarantee attached as
Exhibit A to this Amendment No. 1 pursuant to the provisions set forth in
Sections 4.18 and 10.04 of the Indenture guaranteeing the obligations of the
Company under the Indenture.
3. For all purposes of the Indenture, each New Subsidiary shall be
deemed a party to the Indenture by virtue of its execution of this Amendment
No.1 and the defined term "Guarantor" contained in Article 1.01 of the
Indenture shall be deemed to include each New Subsidiary.
<PAGE> 3
4. This Amendment No. 1 supplements the Indenture and shall be a part
and subject to all the terms thereof. Except as supplemented hereby, the
Indenture and the securities issued thereunder shall continue in full force and
effect.
5. This Amendment No. 1 may be executed in counterparts, each of which
shall be deemed an original, but all of which shall together constitute one and
the same instrument.
6. THIS AMENDMENT NO. 1 SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AMENDMENT NO. 1, THE NOTES OR THE
GUARANTEES.
7. The Trustee shall not be responsible for any recital herein as
such recitals shall be taken as statements of the Company, or the validity of
the execution by the Guarantors or the New Subsidiaries of this Amendment No.
1. The Trustee makes no representation as to the validity or sufficiency of
this Amendment No. 1.
IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to
the Indenture to be duly executed and attested, all as of the date and year
first above written.
HAYES WHEELS INTERNATIONAL, INC.
By: W. D. Shovers
----------------------
Name: W. D. Shovers
Title: Vice President
ATTEST:
Barry J. Miller
- ---------------------
Name: Barry J. Miller
Title: Assistant Secretary
2
<PAGE> 4
Guarantors:
HAYES WHEELS INTERNATIONAL-CALIFORNIA,
INC.
By: Ronald L. Kolakowski
-------------------------
Name: Ronald L. Kolakowski
Title: President
HAYES WHEELS INTERNATIONAL-GEORGIA,
INC.
By: Ronald L. Kolakowski
-------------------------
Name: Ronald L. Kolakowski
Title: President
HAYES WHEELS INTERNATIONAL-INDIANA,
INC.
By: Ronald L. Kolakowski
-------------------------
Name: Ronald L. Kolakowski
Title: President
HAYES WHEELS INTERNATIONAL-MEXICO, INC.
By: W. D. Shovers
-------------------------
Name: W. D. Shovers
Title: Vice President--Finance
HAYES WHEELS INTERNATIONAL-MICHIGAN,
INC.
By: Ronald L. Kolakowski
-------------------------
Name: Ronald L. Kolakowski
Title: President
3
<PAGE> 5
Additional Guarantors:
MOTOR WHEEL CORPORATION
By: W.D. Shovers
----------------
Name: W. D. Shovers
Title: Vice President, Hayes Wheels
International, Inc.
AMW HOLDINGS, INC.
By: W. D. Shovers
-----------------
Name: W. D. Shovers
Title: Vice President, Hayes Wheels
International, Inc.
MWC ACQUISITION SUB, INC.
By: W. D. Shovers
-----------------
Name: W. D. Shovers
Title: Vice President, Hayes Wheels
International, Inc.
ATTEST:
Barry J. Miller
- ----------------------
Name : Barry J. Miller
Title: Assistant Secretary
Hayes Wheels International, Inc.
<PAGE> 6
COMERICA BANK, as Trustee
By: Susan T. Payne
---------------------
Name: Susan T. Payne
Title: Vice President
ATTEST:
N. Packard
- --------------------------
Name: Nan L. Packard
Title: Assistant Vice President
4
<PAGE> 7
EXHIBIT A
GUARANTEE
Each Guarantor (the "Guarantor", which term includes any successor
Person under the Indenture) has unconditionally guaranteed, on a senior
subordinated basis, jointly and severally, to the extent set forth in the
Indenture and subject to the provisions of the Indenture, (a) the due and
punctual payment of the principal of and interest on the Notes, whether at
maturity, by acceleration or otherwise, the due and punctual payment of
interest on overdue principal, and, to the extent permitted by law, interest,
and the due and punctual performance of all other Obligations of the Company to
the Noteholders or the Trustee all in accordance with the terms set forth in
Article 10 of the Indenture, and (b) in case of any extension of time of
payment or renewal of any Notes or any of such other Obligations, that the same
will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration
or otherwise.
This Guarantee shall, to the extent set forth in the Indenture, and
subject to the provisions of the Indenture, be subordinated to the prior
indefeasible payment and satisfaction in full in cash of all existing and
future Guarantor Senior Indebtedness.
The obligations of each Guarantor to the Noteholders and to the Trustee
pursuant to this Guarantee and the Indenture are expressly set forth in Article
10 of the Indenture and reference is hereby made to the Indenture for the
precise terms of this Guarantee.
This Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Note upon which this Guarantee is
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized signatories.
<PAGE> 8
MOTOR WHEEL CORPORATION
By:
----------------------
Name:
Title:
AMW HOLDINGS, INC.
By:
----------------------
Name:
Title:
MWC ACQUISITION SUB, INC.
By:
----------------------
Name:
Title:
<PAGE> 1
EXHIBIT 10.2
GUARANTEE
Each Guarantor (the "Guarantor", which term includes any successor
Person under the Indenture) has unconditionally guaranteed, on a senior
subordinated basis, jointly and severally, to the extent set forth in the
Indenture and subject to the provisions of the Indenture, (a) the due and
punctual payment of the principal of and interest on the Notes, whether at
maturity, by acceleration or otherwise, the due and punctual payment of
interest on overdue principal, and, to the extent permitted by law, interest,
and the due and punctual performance of all other Obligations of the Company to
the Noteholders or the Trustee all in accordance with the terms set forth in
Article 10 of the Indenture, and (b) in case of any extension of time of
payment or renewal of any Notes or any of such other Obligations, that the same
will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration
or otherwise.
This Guarantee shall, to the extent set forth in the Indenture, and
subject to the provisions of the Indenture, be subordinated to the prior
indefeasible payment and satisfaction in full in cash of all existing and
future Guarantor Senior Indebtedness.
The obligations of each Guarantor to the Noteholders and to the Trustee
pursuant to this Guarantee and the Indenture are expressly set forth in Article
10 of the Indenture and reference is hereby made to the Indenture for the
precise terms of this Guarantee.
This Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Note upon which this Guarantee is
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized signatories.
<PAGE> 2
MOTOR WHEEL CORPORATION
By: W. D. Shovers
----------------------
Name: W. D. Shovers
Title: Vice President
Hayes Wheels International, Inc.
AMW HOLDINGS, INC.
By: W. D. Shovers
----------------------
Name: W. D. Shovers
Title: Vice President
Hayes Wheels International, Inc.
MWC ACQUISITION SUB, INC.
By: W. D. Shovers
----------------------
Name: W. D. Shovers
Title: Vice President
Hayes Wheels International, Inc.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-START> FEB-01-1996
<PERIOD-END> JUL-31-1996
<CASH> 20,500
<SECURITIES> 0
<RECEIVABLES> 125,000
<ALLOWANCES> 0
<INVENTORY> 82,300
<CURRENT-ASSETS> 237,000
<PP&E> 537,000
<DEPRECIATION> (124,700)
<TOTAL-ASSETS> 1,095,000
<CURRENT-LIABILITIES> 179,600
<BONDS> 0
0
0
<COMMON> 100
<OTHER-SE> 20,600
<TOTAL-LIABILITY-AND-EQUITY> 1,095,500
<SALES> 165,300
<TOTAL-REVENUES> 165,300
<CGS> 154,300
<TOTAL-COSTS> 154,300
<OTHER-EXPENSES> 18,400
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,500
<INCOME-PRETAX> (15,900)
<INCOME-TAX> (6,400)
<INCOME-CONTINUING> (9,500)
<DISCONTINUED> 0
<EXTRAORDINARY> (7,400)
<CHANGES> 0
<NET-INCOME> (16,900)
<EPS-PRIMARY> (1.09)
<EPS-DILUTED> (1.09)
</TABLE>
