##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended October 31, 2007
 or
 o
    
    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: 000-50303
 Hayes Lemmerz International, Inc.
 (Exact name of registrant as specified in its charter)
 Delaware(State or other jurisdiction of 
incorporation or organization)
    
    32-0072578(IRS Employer
Identification No.)15300 Centennial Drive 
Northville, Michigan(Address of principal executive offices)
    
    48168(Zip Code)
 Registrants telephone number, including area code:
(734) 737-5000
 þ o
  o þ o
 o þ
 
 þ o




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##### 



HAYES LEMMERZ INTERNATIONAL, INC.
 QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
 PagePART I. FINANCIAL INFORMATIONItem 1.
    
    Financial Statements
    
    
    3Consolidated Statements of Operations
    
    
    3Condensed Consolidated Balance Sheets
    
    
    4Consolidated Statements of Cash Flows
    
    
    5Consolidated Statements of Changes in Stockholders Equity
    
    
    6Notes to Consolidated Financial Statements
    
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    26Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    36Item 4.
    
    Controls and Procedures
    
    
    37PART II. OTHER INFORMATION
    
    
    38Item 1.
    
    Legal Proceedings
    
    
    38Item 1A.
    
    Risk Factors
    
    
    39Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    39Item 3.
    
    Defaults upon Senior Securities
    
    
    39Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    39Item 5.
    
    Other Information
    
    
    39Item 6.
    
    Exhibits
    
    
    39Signature
    
    
    40Stock Purchase AgreementCertification of Curtis J. Clawson Pursuant to Section 302Certification of James A. Yost Pursuant to Section 302Certification of Curtis J. Clawson Pursuant to Section 906Certification of James A. Yost Pursuant to Section 906
 Unless otherwise indicated, references to we, us, or our mean Hayes Lemmerz
International, Inc., a Delaware corporation, and our subsidiaries. References to fiscal year means
the 12-month period commencing on February 1 st of that year and ending January
31 st of the following year (e.g., fiscal 2007 means the period beginning February 1,
2007, and ending January 31, 2008). This report contains forward looking statements with respect to
our financial condition, results of operations, and business. All statements other than statements
of historical fact made in this Quarterly Report on Form 10-Q are forward-looking. Such
forward-looking statements include, among others, those statements including the words expect,
anticipate, intend, believe, and similar language. These forward looking statements involve
certain risks and uncertainties. Our actual results may differ significantly from those projected
in the forward-looking statements. Factors that may cause actual results to differ materially from
those contemplated by such forward looking statements include, among others: (1) competitive
pressure in our industry; (2) fluctuations in the price of steel, aluminum, and other raw
materials; (3) changes in general economic conditions; (4) our dependence on the automotive
industry (which has historically been cyclical) and on a small number of major customers for the
majority of our sales; (5) pricing pressure from automotive industry customers and the potential
for re-sourcing of business to lower-cost providers; (6) changes in the financial markets or our
debt ratings affecting our financial structure and our cost of capital and borrowed money; (7) the
uncertainties inherent in international operations and foreign currency fluctuations; and (8) our
ability to divest non-core assets and businesses. You are cautioned not to place undue reliance on
the forward-looking statements, which speak only as of the date of this Quarterly Report on Form
10-Q. We have no duty to update the forward looking statements in this Quarterly Report on Form
10-Q and we do not intend to provide such updates.
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Financial Statements
 HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 Three Months Ended October 31,
    
    
    Nine Months Ended October 31,2007
    
    
    2006
    
    
    2007
    
    
    2006(Dollars in millions, except per share amounts)Net sales
    
    $
    554.9
    
    
    $
    463.3
    
    
    $
    1,597.6
    
    
    $
    1,354.5Cost of goods sold
    
    
    496.8
    
    
    
    420.7
    
    
    
    1,430.2
    
    
    
    1,229.3Gross profit
    
    
    58.1
    
    
    
    42.6
    
    
    
    167.4
    
    
    
    125.2Marketing, general, and administrative
    
    
    35.8
    
    
    
    28.7
    
    
    
    116.6
    
    
    
    96.3Amortization of intangibles
    
    
    2.5
    
    
    
    2.8
    
    
    
    7.5
    
    
    
    7.8Asset impairments and other restructuring charges
    
    
    50.0
    
    
    
    2.5
    
    
    
    54.0
    
    
    
    8.7Other (income) expense , net
    
    
    (2.6
    )
    
    
    (2.3
    )
    
    
    4.9
    
    
    
    (6.7
    )(Loss) earnings from operations
    
    
    (27.6
    )
    
    
    10.9
    
    
    
    (15.6
    )
    
    
    19.1Interest expense, net
    
    
    13.9
    
    
    
    18.7
    
    
    
    47.8
    
    
    
    54.8Loss on early extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    21.5
    
    
    
    Other non-operating income
    
    
    (1.4
    )
    
    
    
    
    
    
    (1.4
    )
    
    
    Loss from continuing operations before taxes
and minority interest
    
    
    (40.1
    )
    
    
    (7.8
    )
    
    
    (83.5
    )
    
    
    (35.7
    )Income tax expense
    
    
    16.7
    
    
    
    8.4
    
    
    
    38.5
    
    
    
    27.5Loss from continuing operations before minority interest
    
    
    (56.8
    )
    
    
    (16.2
    )
    
    
    (122.0
    )
    
    
    (63.2
    )Minority interest
    
    
    5.9
    
    
    
    3.1
    
    
    
    15.4
    
    
    
    7.3Loss from continuing operations
    
    
    (62.7
    )
    
    
    (19.3
    )
    
    
    (137.4
    )
    
    
    (70.5
    )Discontinued operations:(Loss) income from operations, net of tax of $0.2, $1.0,
$0.5 and $2.9, respectively
    
    
    (1.1
    )
    
    
    (37.6
    )
    
    
    2.3
    
    
    
    (30.9
    )Gain (loss) on sale of business, net of tax of $0.0 for all periods
    
    
    1.1
    
    
    
    (2.7
    )
    
    
    (30.0
    )
    
    
    (2.7
    )Loss from discontinued operations
    
    
    
    
    
    
    (40.3
    )
    
    
    (27.7
    )
    
    
    (33.6
    )Net loss
    
    $
    (62.7
    )
    
    $
    (59.6
    )
    
    $
    (165.1
    )
    
    $
    (104.1
    )Loss per common share dataBasic and diluted:Loss from continuing operations
    
    $
    (0.62
    )
    
    $
    (0.50
    )
    
    $
    (1.87
    )
    
    $
    (1.84
    )Loss from discontinued operations
    
    
    
    
    
    
    (1.05
    )
    
    
    (0.38
    )
    
    
    (0.88
    )Net loss
    
    $
    (0.62
    )
    
    $
    (1.55
    )
    
    $
    (2.25
    )
    
    $
    (2.72
    )Weighted average shares outstanding (in millions)
    
    
    100.382
    
    
    
    38.464
    
    
    
    73.414
    
    
    
    38.250
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HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 October 31,
    
    
    January 31,2007
    
    
    2007(Dollars in millions)(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    78.6
    
    
    $
    38.5Receivables
    
    
    325.3
    
    
    
    230.7Other receivables
    
    
    73.8
    
    
    
    43.2Inventories
    
    
    193.3
    
    
    
    156.4Assets held for sale
    
    
    56.2
    
    
    
    165.0Prepaid expenses and other current assets
    
    
    12.4
    
    
    
    14.6Total current assets
    
    
    739.6
    
    
    
    648.4Property, plant, and equipment, net
    
    
    622.0
    
    
    
    627.7Goodwill
    
    
    236.2
    
    
    
    210.0Other intangible assets, net
    
    
    65.9
    
    
    
    63.7Customer relationships, net
    
    
    107.9
    
    
    
    101.5Deferred tax assets
    
    
    3.1
    
    
    
    1.9Other assets
    
    
    38.7
    
    
    
    38.1Total assets
    
    $
    1,813.4
    
    
    $
    1,691.3LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Bank borrowings and other notes
    
    $
    31.9
    
    
    $
    27.9Current portion of long term debt
    
    
    4.6
    
    
    
    5.6Accounts payable and accrued liabilities
    
    
    496.3
    
    
    
    352.0Liabilities held for sale
    
    
    14.1
    
    
    
    58.5Total current liabilities
    
    
    546.9
    
    
    
    444.0Long term debt, net of current portion
    
    
    558.9
    
    
    
    659.4Deferred tax liabilities
    
    
    90.2
    
    
    
    65.3Pension and other long term liabilities
    
    
    361.7
    
    
    
    364.7Minority interest
    
    
    65.8
    
    
    
    56.1Commitments and contingencies
    
    
    
    
    
    
    Stockholders equity:Preferred stock, 1,000,000 shares authorized, none issued or outstanding at
October 31, 2007 or January 31, 2007
    
    
    
    
    
    
    Common stock, par value $0.01 per share:200,000,000 and 100,000,000 shares authorized; 100,815,274 and 38,470,434
issued and outstanding at October 31 and January 31, 2007, respectively
    
    
    1.0
    
    
    
    0.4Additional paid in capital
    
    
    879.7
    
    
    
    678.6Accumulated deficit
    
    
    (899.2
    )
    
    
    (733.6
    )Accumulated other comprehensive income
    
    
    208.4
    
    
    
    156.4Total stockholders equity
    
    
    189.9
    
    
    
    101.8Total liabilities and stockholders equity
    
    $
    1,813.4
    
    
    $
    1,691.3
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HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Nine Months Ended October 31,2007
    
    
    2006(Dollars in millions)Cash flows from operating activities:Net loss
    
    $
    (165.1
    )
    
    $
    (104.1
    )Adjustments to reconcile net loss from operations to net cash provided by
(used for) operating activities:Net loss from discontinued operations
    
    
    27.7
    
    
    
    33.6Depreciation and amortization
    
    
    82.8
    
    
    
    83.3Asset impairments
    
    
    50.3
    
    
    
    0.6Deferred income taxes
    
    
    22.5
    
    
    
    10.9Minority interest
    
    
    15.4
    
    
    
    7.3Equity compensation expense
    
    
    8.8
    
    
    
    1.4Loss on sale of assets and businesses
    
    
    12.8
    
    
    
    1.0Amortization of deferred financing fees
    
    
    2.8
    
    
    
    4.3Loss on early extinguishment of debt
    
    
    21.5
    
    
    
    Changes in operating assets and liabilities that increase (decrease) cash flows:Receivables
    
    
    (69.0
    )
    
    
    (37.4
    )Other receivables
    
    
    (30.6
    )
    
    
    60.1Inventories
    
    
    (28.4
    )
    
    
    (16.4
    )Prepaid expenses and other
    
    
    5.8
    
    
    
    4.5Accounts payable and accrued liabilities
    
    
    80.1
    
    
    
    17.4Cash provided by operating activities
    
    
    37.4
    
    
    
    66.5Cash flows from investing activities:Purchase of property, plant, equipment, and tooling
    
    
    (64.1
    )
    
    
    (39.6
    )Proceeds from sale of assets
    
    
    1.5
    
    
    
    0.9Capital contributed by minority shareholders
    
    
    
    
    
    
    0.4Cash used for investing activities
    
    
    (62.6
    )
    
    
    (38.3
    )Cash flows from financing activities:Changes in bank borrowings and credit facilities
    
    
    0.9
    
    
    
    (1.5
    )Bank finance fees paid
    
    
    (14.8
    )
    
    
    (2.9
    )Repayment of long-term debt
    
    
    (136.3
    )
    
    
    (15.1
    )Dividends paid to minority shareholders
    
    
    (10.1
    )
    
    
    (1.8
    )Proceeds from issuance of common stock
    
    
    193.1
    
    
    
    Call premium on redemption of Senior Notes
    
    
    (9.0
    )
    
    
    Fees paid for Rights Offering
    
    
    (7.7
    )
    
    
    Cash provided by (used for) financing activities
    
    
    16.1
    
    
    
    (21.3
    )Cash flows of discontinued operations:Net cash provided by operating activities
    
    
    12.7
    
    
    
    17.4Net cash provided by investing activities
    
    
    42.5
    
    
    
    5.7Net cash used for financing activities
    
    
    (10.1
    )
    
    
    (14.2
    )Net cash provided by discontinued operations
    
    
    45.1
    
    
    
    8.9Effect of exchange rate changes on cash and cash equivalents
    
    
    4.1
    
    
    
    1.4Increase in cash and cash equivalents
    
    
    40.1
    
    
    
    17.2Cash and cash equivalents at beginning of period
    
    
    38.5
    
    
    
    42.5Cash and cash equivalents at end of period
    
    $
    78.6
    
    
    $
    59.7Supplemental data:Cash paid for interest
    
    $
    42.6
    
    
    $
    49.4Cash paid for income taxes
    
    $
    17.2
    
    
    $
    14.6
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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
(Unaudited)
  AccumulatedAdditional
    
    
    
    
    
    
    OtherPaid in
    
    
    Accumulated
    
    
    ComprehensiveShares
    
    
    Par Value
    
    
    Capital
    
    
    Deficit
    
    
    Income
    
    
    Total(Dollars in millions, except share amounts)Balance at January 31, 2007
    
    
    38,470,434
    
    
    $
    0.4
    
    
    $
    678.6
    
    
    $
    (733.6
    )
    
    $
    156.4
    
    
    $
    101.8Preferred stock dividends accrued
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.5
    )
    
    
    
    
    
    
    (0.5
    )Comprehensive income:Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (165.1
    )
    
    
    
    
    
    
    (165.1
    )Currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54.2
    
    
    
    54.2Unrealized loss on derivatives
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2.2
    )
    
    
    (2.2
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (113.1
    )Shares issued for options exercised
and RSUs vested
    
    
    1,782,811
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Common stock issued to note holders
    
    
    1,049,020
    
    
    
    
    
    
    
    5.3
    
    
    
    
    
    
    
    
    
    
    
    5.3Common stock issued, net of fees
    
    
    59,423,077
    
    
    
    0.6
    
    
    
    184.8
    
    
    
    
    
    
    
    
    
    
    
    185.4Shares of redeemable preferred stock of
subsidiary converted into common stock
    
    
    89,932
    
    
    
    
    
    
    
    2.1
    
    
    
    
    
    
    
    
    
    
    
    2.1Equity compensation expense
    
    
    
    
    
    
    
    
    
    
    8.9
    
    
    
    
    
    
    
    
    
    
    
    8.9Balance at October 31, 2007
    
    
    100,815,274
    
    
    $
    1.0
    
    
    $
    879.7
    
    
    $
    (899.2
    )
    
    $
    208.4
    
    
    $
    189.9Balance at January 31, 2006
    
    
    37,991,269
    
    
    $
    0.4
    
    
    $
    675.9
    
    
    $
    (566.3
    )
    
    $
    73.3
    
    
    $
    183.3Preferred stock dividends accrued
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.2
    )
    
    
    
    
    
    
    (0.2
    )Comprehensive income:Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (104.1
    )
    
    
    
    
    
    
    (104.1
    )Currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28.8
    
    
    
    28.8Unrealized loss on derivatives
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3.7
    )
    
    
    (3.7
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (79.0
    )Shares of redeemable preferred stock of
subsidiary converted into common stock
    
    
    5,073
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Shares issued for vested RSUs
    
    
    471,871
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Equity compensation expense
    
    
    
    
    
    
    
    
    
    
    2.0
    
    
    
    
    
    
    
    
    
    
    
    2.0Balance at October 31, 2006
    
    
    38,468,213
    
    
    $
    0.4
    
    
    $
    677.9
    
    
    $
    (670.6
    )
    
    $
    98.4
    
    
    $
    106.1
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HAYES LEMMERZ INTERNATIONAL, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Three and nine months ended October 31, 2007 and 2006
(Unaudited)
(Dollars in millions, unless otherwise stated)
 Note 1. Description of Business
  Description of Business
   Note 2. Basis of Presentation
    Note 3. Stock-Based Compensation
   7




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Note 4. Inventories
  October 31,
    
    
    January 31,2007
    
    
    2007Raw materials
    
    $
    46.7
    
    
    $
    34.4Work-in-process
    
    
    49.0
    
    
    
    32.7Finished goods
    
    
    65.1
    
    
    
    59.7Spare parts and supplies
    
    
    32.5
    
    
    
    29.6Total
    
    $
    193.3
    
    
    $
    156.4
 Note 5. Assets Held for Sale
  October 31,
    
    
    January 31,2007
    
    
    2007Brakes business
    
    $
    50.8
    
    
    $
    55.4MGG Group
    
    
    
    
    
    
    57.9Suspension business
    
    
    
    
    
    
    48.9Huntington, Michigan building
    
    
    2.7
    
    
    
    Howell, Michigan building
    
    
    2.7
    
    
    
    2.8Total
    
    $
    56.2
    
    
    $
    165.0
   Note 6. Discontinued Operations
  8




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##### Table of Contents



October 31,
    
    
    January 31,2007
    
    
    2007Receivables
    
    $
    11.7
    
    
    $
    11.9Inventories
    
    
    3.1
    
    
    
    3.5Prepaid expenses and other assets
    
    
    8.9
    
    
    
    9.7Property, plant, and equipment, net
    
    
    27.1
    
    
    
    29.5Deferred tax assets long term
    
    
    
    
    
    
    0.8Total assets held for sale
    
    $
    50.8
    
    
    $
    55.4Accounts payable and accrued liabilities
    
    $
    11.4
    
    
    $
    9.1Other long term liabilities
    
    
    2.2
    
    
    
    1.9Total liabilities held for sale
    
    $
    13.6
    
    
    $
    11.0
  Three Months Ended October 31,
    
    
    Nine Months Ended October 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Net sales
    
    $
    24.9
    
    
    $
    32.8
    
    
    $
    81.8
    
    
    $
    92.3(Loss) earnings before income tax expense
    
    $
    (0.6
    )
    
    $
    3.4
    
    
    $
    4.5
    
    
    $
    6.9Income tax expense
    
    
    0.2
    
    
    
    0.4
    
    
    
    1.2
    
    
    
    0.6Net (loss) income
    
    $
    (0.8
    )
    
    $
    3.0
    
    
    $
    3.3
    
    
    $
    6.3
   October 31,
    
    
    January 31,2007
    
    
    2007Receivables
    
    $
    
    
    
    $
    16.1Inventories
    
    
    
    
    
    
    12.9Prepaid expenses and other assets
    
    
    
    
    
    
    0.7Property, plant, and equipment, net
    
    
    
    
    
    
    23.4Deferred tax assets long term
    
    
    
    
    
    
    4.8Total assets held for sale
    
    $
    
    
    
    $
    57.9Accounts payable and accrued liabilities
    
    $
    
    
    
    $
    24.5Other long term liabilities
    
    
    
    
    
    
    3.1Total liabilities held for sale
    
    $
    
    
    
    $
    27.6
 9




---



##### Table of Contents



Three Months Ended October 31,
    
    
    Nine Months Ended October 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Net sales
    
    $
    
    
    
    $
    37.5
    
    
    $
    55.5
    
    
    $
    108.5Earnings (loss) before income tax expense
    
    $
    
    
    
    $
    1.8
    
    
    $
    (27.4
    )
    
    $
    6.5Income tax expense (benefit)
    
    
    
    
    
    
    0.5
    
    
    
    (0.7
    )
    
    
    1.9Minority interest
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    0.2Net income (loss)
    
    $
    
    
    
    $
    1.2
    
    
    $
    (26.7
    )
    
    $
    4.4
   October 31,
    
    
    January 31,2007
    
    
    2007Receivables
    
    $
    
    
    
    $
    30.0Inventories
    
    
    
    
    
    
    17.5Prepaid expenses and other assets
    
    
    
    
    
    
    1.4Total assets held for sale
    
    $
    
    
    
    $
    48.9Accounts payable and accrued liabilities
    
    $
    0.5
    
    
    $
    15.7Other long term liabilities
    
    
    
    
    
    
    4.2Total liabilities held for sale
    
    $
    0.5
    
    
    $
    19.9
  Three Months Ended October 31,
    
    
    Nine Months Ended October 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Net sales
    
    $
    
    
    
    $
    55.8
    
    
    $
    6.8
    
    
    $
    190.6Earnings (loss) before income tax expense
    
    $
    0.8
    
    
    $
    (44.4
    )
    
    $
    (4.3
    )
    
    $
    (43.9
    )Income tax expense
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    0.4Net income (loss)
    
    $
    0.8
    
    
    $
    (44.5
    )
    
    $
    (4.3
    )
    
    $
    (44.3
    )
  Note 7. Bank Borrowings, Other Notes, and Long Term Debt
  10




---



##### Table of Contents



October 31,
    
    
    January 31,2007
    
    
    2007Various foreign bank and government loans weighted average interest rates of
4.2% and 5.4% at October 31, 2007 and January 31, 2007, respectively
    
    $
    3.4
    
    
    $
    3.4Term Loan maturing 2014, weighted average interest rate of 7.1% at October 31, 2007
    
    
    372.8
    
    
    
    8.25% New Senior Notes due 2015, net of discount of $0 million at October 31, 2007
    
    
    187.3
    
    
    
    Term Loan B maturing 2009, weighted average interest rate of 8.9%
at January 31, 2007
    
    
    
    
    
    
    327.7Term Loan C, weighted average interest rate of 11.4% at January 31, 2007
    
    
    
    
    
    
    150.0101/2% Senior Notes due 2010, net of discount of $0.4 million at January 31, 2007
    
    
    
    
    
    
    162.1Mortgage note payable
    
    
    
    
    
    
    21.8563.5
    
    
    
    665.0Less current portion of long-term debt
    
    
    4.6
    
    
    
    5.6Long-term debt
    
    $
    558.9
    
    
    $
    659.4
 Rights Offering
  1 2
 Old Notes
 1 2
   11




---



##### Table of Contents



Tender Offer for Senior Notes
  New Senior Notes
  1 4
  Credit Facility
    12




---



##### Table of Contents



 
    Loss on early extinguishment of debt
  Note 8. Pension Plans and Postretirement Benefits Other Than Pensions
  13




---



##### Table of Contents



US Plans
    
    
    International PlansPension Benefits
    
    
    Other Benefits
    
    
    Pension BenefitsThree Months Ended October 31,2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006Service cost
    
    $
    0.3
    
    
    $
    0.2
    
    
    $
    
    
    
    $
    
    
    
    $
    0.3
    
    
    $
    0.3Interest cost
    
    
    2.6
    
    
    
    2.7
    
    
    
    2.5
    
    
    
    2.7
    
    
    
    1.6
    
    
    
    1.4Expected return on plan assets
    
    
    (3.0
    )
    
    
    (2.6
    )
    
    
    
    
    
    
    
    
    
    
    (0.2
    )
    
    
    (0.1
    )Amortization of net loss
    
    
    
    
    
    
    
    
    
    
    (0.1
    )
    
    
    (0.1
    )
    
    
    
    
    
    
    Special termination benefit recognized
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net periodic benefit cost
    
    $
    (0.1
    )
    
    $
    0.4
    
    
    $
    2.4
    
    
    $
    2.6
    
    
    $
    1.7
    
    
    $
    1.6
 US Plans
    
    
    International PlansPension Benefits
    
    
    Other Benefits
    
    
    Pension BenefitsNine Months Ended October 31,2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006Service cost
    
    $
    0.8
    
    
    $
    0.7
    
    
    $
    
    
    
    $
    
    
    
    $
    0.6
    
    
    $
    0.8Interest cost
    
    
    7.8
    
    
    
    8.3
    
    
    
    7.2
    
    
    
    8.0
    
    
    
    4.9
    
    
    
    4.4Expected return on plan assets
    
    
    (9.0
    )
    
    
    (8.0
    )
    
    
    
    
    
    
    
    
    
    
    (0.6
    )
    
    
    (0.4
    )Amortization of net loss
    
    
    
    
    
    
    
    
    
    
    (0.3
    )
    
    
    (0.1
    )
    
    
    
    
    
    
    0.1Special termination benefit recognized
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net periodic benefit cost
    
    $
    (0.4
    )
    
    $
    1.1
    
    
    $
    6.9
    
    
    $
    7.9
    
    
    $
    4.9
    
    
    $
    4.9
   Note 9. Asset Impairments and Other Restructuring Charges
  Three Months Ended October 31, 2007AutomotiveWheels
    
    
    Other
    
    
    TotalFacility closure costs
    
    $
    0.1
    
    
    $
    
    
    
    $
    0.1Impairment of facility, machinery, and equipment
    
    
    48.9
    
    
    
    0.9
    
    
    
    49.8Severance and other restructuring costs
    
    
    
    
    
    
    0.1
    
    
    
    0.1Total
    
    $
    49.0
    
    
    $
    1.0
    
    
    $
    50.0
 Three Months Ended October 31, 2006AutomotiveWheels
    
    
    Other
    
    
    TotalFacility closure costs
    
    $
    0.4
    
    
    $
    
    
    
    $
    0.4Severance and other restructuring costs
    
    
    1.5
    
    
    
    0.6
    
    
    
    2.1Total
    
    $
    1.9
    
    
    $
    0.6
    
    
    $
    2.5
 14




---



##### Table of Contents



Nine Months Ended October 31, 2007AutomotiveWheels
    
    
    Other
    
    
    TotalFacility closure costs
    
    $
    2.9
    
    
    $
    0.1
    
    
    $
    3.0Impairment of facility, machinery, and equipment
    
    
    49.4
    
    
    
    0.9
    
    
    
    50.3Severance and other restructuring costs
    
    
    
    
    
    
    0.7
    
    
    
    0.7Total
    
    $
    52.3
    
    
    $
    1.7
    
    
    $
    54.0
 Nine Months Ended October 31, 2006AutomotiveWheels
    
    
    Other
    
    
    TotalFacility closure costs
    
    $
    2.0
    
    
    $
    
    
    
    $
    2.0Impairment of facility, machinery, and equipment
    
    
    0.1
    
    
    
    0.5
    
    
    
    0.6Severance and other restructuring costs
    
    
    3.1
    
    
    
    3.0
    
    
    
    6.1Total
    
    $
    5.2
    
    
    $
    3.5
    
    
    $
    8.7
 Asset Impairment Losses and Other Restructuring Charges for the Three Months Ended October 31,
2007
   Asset Impairment Losses and Other Restructuring Charges for the Three Months Ended October 31,
2006
   Asset Impairment Losses and Other Restructuring Charges for the Nine Months Ended October 31, 2007
   Asset Impairment Losses and Other Restructuring Charges for the Nine Months Ended October 31, 2006
  15




---



##### Table of Contents



Facility Exit Costs and Severance Accruals
  CashPaymentsJanuary 31,
    
    
    
    
    
    
    and Effects
    
    
    October 31,2007
    
    
    
    
    
    
    of Foreign
    
    
    2007Accrual
    
    
    Expense
    
    
    Currency
    
    
    AccrualFacility closure costs
    
    $
    0.4
    
    
    $
    3.0
    
    
    $
    (3.2
    )
    
    $
    0.2Severance
    
    
    0.5
    
    
    
    0.7
    
    
    
    (1.0
    )
    
    
    0.2Total
    
    $
    0.9
    
    
    $
    3.7
    
    
    $
    (4.2
    )
    
    $
    0.4
 Note 10. Weighted Average Shares Outstanding
   Three Months Ended October 31,2007
    
    
    2006Basic weighted average shares outstanding
    
    
    100,382
    
    
    
    38,464Dilutive effect of options and warrants
    
    
    
    
    
    
    Diluted weighted average shares outstanding
    
    
    100,382
    
    
    
    38,464
 Nine Months Ended October 31,2007
    
    
    2006Basic weighted average shares outstanding
    
    
    73,414
    
    
    
    38,250Dilutive effect of options and warrants
    
    
    
    
    
    
    Diluted weighted average shares outstanding
    
    
    73,414
    
    
    
    38,250
   16




---



##### Table of Contents



Note 11. Taxes on Income
  Three Months Ended October 31,2007
    
    
    2006US
    
    
    Foreign
    
    
    US
    
    
    ForeignPre-tax income (loss)
    
    $
    (43.8
    )
    
    $
    3.7
    
    
    $
    (30.6
    )
    
    $
    22.8Income tax expense
    
    
    (0.4
    )
    
    
    17.1
    
    
    
    0.2
    
    
    
    8.2
 Nine Months Ended October 31,2007
    
    
    2006US
    
    
    Foreign
    
    
    US
    
    
    ForeignPre-tax income (loss)
    
    $
    (131.9
    )
    
    $
    48.4
    
    
    $
    (84.5
    )
    
    $
    48.8Income tax expense
    
    
    0.2
    
    
    
    38.3
    
    
    
    0.8
    
    
    
    26.7
       Note 12. Segment Reporting
   17




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##### Table of Contents



Three Months Ended October 31, 2007AutomotiveWheels
    
    Other
    
    TotalNet sales
    
    $
    543.3
    
    
    $
    11.6
    
    
    $
    554.9Asset impairments and other restructuring charges
    
    
    49.0
    
    
    
    1.0
    
    
    
    50.0Loss from operations
    
    
    (21.8
    )
    
    
    (5.8
    )
    
    
    (27.6
    )
 Three Months Ended October 31, 2006AutomotiveWheels
    
    Other
    
    TotalNet sales
    
    $
    432.5
    
    
    $
    30.8
    
    
    $
    463.3Asset impairments and other restructuring charges
    
    
    1.9
    
    
    
    0.6
    
    
    
    2.5Earnings (loss) from operations
    
    
    23.4
    
    
    
    (12.5
    )
    
    
    10.9
 Nine Months Ended October 31, 2007AutomotiveWheels
    
    Other
    
    TotalNet sales
    
    $
    1,531.3
    
    
    $
    66.3
    
    
    $
    1,597.6Asset impairments and other restructuring charges
    
    
    52.3
    
    
    
    1.7
    
    
    
    54.0Earnings (loss) from operations
    
    
    24.4
    
    
    
    (40.0
    )
    
    
    (15.6
    )
 Nine Months Ended October 31, 2006AutomotiveWheels
    
    Other
    
    TotalNet sales
    
    $
    1,256.1
    
    
    $
    98.4
    
    
    $
    1,354.5Asset impairments and other restructuring charges
    
    
    5.2
    
    
    
    3.5
    
    
    
    8.7Earnings (loss) from operations
    
    
    52.6
    
    
    
    (33.5
    )
    
    
    19.1
 As of October 31, 2007AutomotiveWheels
    
    Other
    
    TotalTotal assets
    
    $
    1,928.2
    
    
    $
    (114.8
    )
    
    $
    1,813.4
 As of January 31, 2007AutomotiveWheels
    
    Other
    
    TotalTotal assets
    
    $
    1,660.5
    
    
    $
    30.8
    
    
    $
    1,691.3
 Note 13. Minority Interest in Equity of Consolidated Subsidiaries
   18




---



##### Table of Contents



October 31,
    
    
    January 31,2007
    
    
    2007Minority interest in consolidated affiliates
    
    $
    54.8
    
    
    $
    43.5Minority interest in preferred stock
    
    
    11.0
    
    
    
    12.6Total minority interest
    
    $
    65.8
    
    
    $
    56.1
  Note 14. Condensed Consolidating Financial Statements
   Guarantor and Nonguarantor Financial Statements
  19




---



##### Table of Contents



CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Nine Months Ended October 31, 2007
(Unaudited)
 Guarantor
    
    
    NonguarantorParent
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Total(Dollars in millions)Net sales
    
    $
    
    
    
    $
    
    
    
    $
    1,150.8
    
    
    $
    500.8
    
    
    $
    (54.0
    )
    
    $
    1,597.6Cost of goods sold
    
    
    0.1
    
    
    
    
    
    
    
    1,054.3
    
    
    
    429.8
    
    
    
    (54.0
    )
    
    
    1,430.2Gross profit (loss)
    
    
    (0.1
    )
    
    
    
    
    
    
    96.5
    
    
    
    71.0
    
    
    
    
    
    
    
    167.4Marketing, general, and administrative
    
    
    
    
    
    
    
    
    
    
    95.2
    
    
    
    21.4
    
    
    
    
    
    
    
    116.6Equity in (earnings) losses of
subsidiaries and joint ventures
    
    
    165.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (165.0
    )
    
    
    Asset impairments and other restructuring
charges
    
    
    
    
    
    
    
    
    
    
    42.7
    
    
    
    11.3
    
    
    
    
    
    
    
    54.0Other (income) expense, net
    
    
    
    
    
    
    (18.1
    )
    
    
    4.8
    
    
    
    (113.6
    )
    
    
    139.3
    
    
    
    12.4Earnings (loss) from operations
    
    
    (165.1
    )
    
    
    18.1
    
    
    
    (46.2
    )
    
    
    151.9
    
    
    
    25.7
    
    
    
    (15.6
    )Interest expense, net
    
    
    
    
    
    
    19.5
    
    
    
    15.5
    
    
    
    12.8
    
    
    
    
    
    
    
    47.8Loss on early extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    21.5
    
    
    
    
    
    
    
    
    
    
    
    21.5Other non-operating (income) expense
    
    
    
    
    
    
    
    
    
    
    (4.1
    )
    
    
    (15.1
    )
    
    
    17.8
    
    
    
    (1.4
    )(Loss) earnings from continuing operations
before taxes and minority interest
    
    
    (165.1
    )
    
    
    (1.4
    )
    
    
    (79.1
    )
    
    
    154.2
    
    
    
    7.9
    
    
    
    (83.5
    )Income tax expense
    
    
    
    
    
    
    
    
    
    
    27.4
    
    
    
    11.1
    
    
    
    
    
    
    
    38.5(Loss) earnings from continuing operations
before
minority interest
    
    
    (165.1
    )
    
    
    (1.4
    )
    
    
    (106.5
    )
    
    
    143.1
    
    
    
    7.9
    
    
    
    (122.0
    )Minority interest
    
    
    
    
    
    
    
    
    
    
    0.6
    
    
    
    14.8
    
    
    
    
    
    
    
    15.4(Loss) earnings from continuing operations
    
    
    (165.1
    )
    
    
    (1.4
    )
    
    
    (107.1
    )
    
    
    128.3
    
    
    
    7.9
    
    
    
    (137.4
    )(Loss) earnings from discontinued operations
    
    
    
    
    
    
    
    
    
    
    (35.0
    )
    
    
    7.3
    
    
    
    
    
    
    
    (27.7
    )Net (loss) income
    
    $
    (165.1
    )
    
    $
    (1.4
    )
    
    $
    (142.1
    )
    
    $
    135.6
    
    
    $
    7.9
    
    
    $
    (165.1
    )
 20




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##### Table of Contents



CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the Nine Months Ended October 31, 2006
(Unaudited)
 Guarantor
    
    
    NonguarantorParent
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Total(Dollars in millions)Net sales.
    
    $
    
    
    
    $
    
    
    
    $
    1,019.3
    
    
    $
    373.2
    
    
    $
    (38.0
    )
    
    $
    1,354.5Cost of goods sold
    
    
    
    
    
    
    
    
    
    
    938.3
    
    
    
    329.0
    
    
    
    (38.0
    )
    
    
    1,229.3Gross profit (loss)
    
    
    
    
    
    
    
    
    
    
    81.0
    
    
    
    44.2
    
    
    
    
    
    
    
    125.2Marketing, general, and administrative
    
    
    
    
    
    
    
    
    
    
    79.2
    
    
    
    17.1
    
    
    
    
    
    
    
    96.3Equity in (earnings) losses of
subsidiaries and joint ventures
    
    
    104.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (104.1
    )
    
    
    Asset impairments and other restructuring
charges
    
    
    
    
    
    
    
    
    
    
    7.4
    
    
    
    1.3
    
    
    
    
    
    
    
    8.7Other (income) expense, net
    
    
    
    
    
    
    
    
    
    
    (3.8
    )
    
    
    4.9
    
    
    
    
    
    
    
    1.1Earnings (loss) from operations
    
    
    (104.1
    )
    
    
    
    
    
    
    (1.8
    )
    
    
    20.9
    
    
    
    104.1
    
    
    
    19.1Interest expense, net
    
    
    
    
    
    
    
    
    
    
    55.3
    
    
    
    (0.5
    )
    
    
    
    
    
    
    54.8Other non-operating income
    
    
    
    
    
    
    
    
    
    
    (1.6
    )
    
    
    0.1
    
    
    
    1.5
    
    
    
    Earnings (loss) from continuing operations
before taxes and minority interest
    
    
    (104.1
    )
    
    
    
    
    
    
    (55.5
    )
    
    
    21.3
    
    
    
    102.6
    
    
    
    (35.7
    )Income tax expense
    
    
    
    
    
    
    
    
    
    
    14.5
    
    
    
    13.0
    
    
    
    
    
    
    
    27.5Earnings (loss) from continuing operations
before
minority interest
    
    
    (104.1
    )
    
    
    
    
    
    
    (70.0
    )
    
    
    8.3
    
    
    
    102.6
    
    
    
    (63.2
    )Minority interest
    
    
    
    
    
    
    
    
    
    
    0.2
    
    
    
    7.1
    
    
    
    
    
    
    
    7.3Earnings (loss) from continuing operations
    
    
    (104.1
    )
    
    
    
    
    
    
    (70.2
    )
    
    
    1.2
    
    
    
    102.6
    
    
    
    (70.5
    )Loss from discontinued operations
    
    
    
    
    
    
    
    
    
    
    (15.3
    )
    
    
    (18.3
    )
    
    
    
    
    
    
    (33.6
    )Net income (loss)
    
    $
    (104.1
    )
    
    $
    
    
    
    $
    (85.5
    )
    
    $
    (17.1
    )
    
    $
    102.6
    
    
    $
    (104.1
    )
 21




---



##### Table of Contents



CONDENSED CONSOLIDATING BALANCE SHEETS
As of October 31, 2007
(Unaudited)
 Guarantor
    
    
    NonguarantorParent
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Total(Dollars in millions)Cash and cash equivalents
    
    $
    
    
    
    $
    24.3
    
    
    $
    21.4
    
    
    $
    32.9
    
    
    $
    
    
    
    $
    78.6Receivables
    
    
    
    
    
    
    
    
    
    
    204.1
    
    
    
    121.2
    
    
    
    
    
    
    
    325.3Other receivables
    
    
    
    
    
    
    
    
    
    
    73.8
    
    
    
    73.8
    
    
    
    (73.8
    )
    
    
    73.8Inventories
    
    
    
    
    
    
    
    
    
    
    129.9
    
    
    
    63.4
    
    
    
    
    
    
    
    193.3Assets held for sale
    
    
    
    
    
    
    
    
    
    
    13.5
    
    
    
    42.7
    
    
    
    
    
    
    
    56.2Prepaid expenses and other
    
    
    
    
    
    
    
    
    
    
    10.4
    
    
    
    2.0
    
    
    
    
    
    
    
    12.4Total current assets
    
    
    
    
    
    
    24.3
    
    
    
    453.1
    
    
    
    336.0
    
    
    
    (73.8
    )
    
    
    739.6Property, plant, and equipment, net
    
    
    
    
    
    
    
    
    
    
    424.4
    
    
    
    197.6
    
    
    
    
    
    
    
    622.0Goodwill and other assets
    
    
    189.9
    
    
    
    455.4
    
    
    
    131.7
    
    
    
    879.5
    
    
    
    (1,204.7
    )
    
    
    451.8Total assets
    
    $
    189.9
    
    
    $
    479.7
    
    
    $
    1,009.2
    
    
    $
    1,413.1
    
    
    $
    (1,278.5
    )
    
    $
    1,813.4Bank borrowings and other notes
    
    $
    
    
    
    $
    
    
    
    $
    28.8
    
    
    $
    3.1
    
    
    $
    
    
    
    $
    31.9Current portion of long term debt
    
    
    
    
    
    
    3.7
    
    
    
    
    
    
    
    0.9
    
    
    
    
    
    
    
    4.6Liabilities held for sale
    
    
    
    
    
    
    
    
    
    
    1.3
    
    
    
    12.8
    
    
    
    
    
    
    
    14.1Accounts payable and accrued liabilities
    
    
    
    
    
    
    8.7
    
    
    
    329.6
    
    
    
    231.8
    
    
    
    (73.8
    )
    
    
    496.3Total current liabilities
    
    
    
    
    
    
    12.4
    
    
    
    359.7
    
    
    
    248.6
    
    
    
    (73.8
    )
    
    
    546.9Long term debt, net of current portion
    
    
    
    
    
    
    556.4
    
    
    
    0.5
    
    
    
    2.0
    
    
    
    
    
    
    
    558.9Pension and other long term liabilities
    
    
    
    
    
    
    
    
    
    
    344.8
    
    
    
    107.1
    
    
    
    
    
    
    
    451.9Minority interest
    
    
    
    
    
    
    
    
    
    
    12.1
    
    
    
    54.9
    
    
    
    (1.2
    )
    
    
    65.8Parent loans
    
    
    
    
    
    
    (57.7
    )
    
    
    (483.6
    )
    
    
    541.1
    
    
    
    0.2
    
    
    
    Common stock
    
    
    1.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.0Additional paid-in capital
    
    
    879.7
    
    
    
    
    
    
    
    1,258.8
    
    
    
    455.8
    
    
    
    (1,714.6
    )
    
    
    879.7Retained earnings (accumulated deficit)
    
    
    (899.2
    )
    
    
    (1.4
    )
    
    
    (602.2
    )
    
    
    (180.9
    )
    
    
    784.5
    
    
    
    (899.2
    )Accumulated other comprehensive
income (loss)
    
    
    208.4
    
    
    
    (30.0
    )
    
    
    119.1
    
    
    
    184.5
    
    
    
    (273.6
    )
    
    
    208.4Total stockholders equity
    
    
    189.9
    
    
    
    (31.4
    )
    
    
    775.7
    
    
    
    459.4
    
    
    
    (1,203.7
    )
    
    
    189.9Total liabilities and stockholders
equity
    
    $
    189.9
    
    
    $
    479.7
    
    
    $
    1,009.2
    
    
    $
    1,413.1
    
    
    $
    (1,278.5
    )
    
    $
    1,813.4
 22




---



##### Table of Contents



CONDENSED CONSOLIDATING BALANCE SHEETS
As of January 31, 2007
(Unaudited)
 Guarantor
    
    
    NonguarantorParent
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Total(Dollars in millions)Cash and cash equivalents
    
    $
    
    
    
    $
    
    
    
    $
    8.7
    
    
    $
    29.8
    
    
    $
    
    
    
    $
    38.5Receivables
    
    
    
    
    
    
    
    
    
    
    138.5
    
    
    
    92.2
    
    
    
    
    
    
    
    230.7Other receivables
    
    
    
    
    
    
    
    
    
    
    43.2
    
    
    
    43.2
    
    
    
    (43.2
    )
    
    
    43.2Inventories
    
    
    
    
    
    
    
    
    
    
    111.4
    
    
    
    45.0
    
    
    
    
    
    
    
    156.4Assets held for sale
    
    
    
    
    
    
    
    
    
    
    15.7
    
    
    
    149.3
    
    
    
    
    
    
    
    165.0Prepaid expenses and other
    
    
    
    
    
    
    
    
    
    
    9.3
    
    
    
    5.3
    
    
    
    
    
    
    
    14.6Total current assets
    
    
    
    
    
    
    
    
    
    
    326.8
    
    
    
    364.8
    
    
    
    (43.2
    )
    
    
    648.4Property, plant, and equipment, net
    
    
    
    
    
    
    
    
    
    
    452.4
    
    
    
    175.3
    
    
    
    
    
    
    
    627.7Goodwill and other assets
    
    
    101.9
    
    
    
    
    
    
    
    681.4
    
    
    
    646.2
    
    
    
    (1,014.3
    )
    
    
    415.2Total assets
    
    $
    101.9
    
    
    $
    
    
    
    $
    1,460.6
    
    
    $
    1,186.3
    
    
    $
    (1,057.5
    )
    
    $
    1,691.3Bank borrowings and other notes
    
    $
    
    
    
    $
    
    
    
    $
    26.4
    
    
    $
    1.5
    
    
    $
    
    
    
    $
    27.9Current portion of long term debt
    
    
    
    
    
    
    
    
    
    
    4.6
    
    
    
    1.0
    
    
    
    
    
    
    
    5.6Liabilities held for sale
    
    
    
    
    
    
    
    
    
    
    5.6
    
    
    
    52.9
    
    
    
    
    
    
    
    58.5Accounts payable and accrued
liabilities
    
    
    
    
    
    
    
    
    
    
    244.9
    
    
    
    150.3
    
    
    
    (43.2
    )
    
    
    352.0Total current liabilities
    
    
    
    
    
    
    
    
    
    
    281.5
    
    
    
    205.7
    
    
    
    (43.2
    )
    
    
    444.0Long term debt, net of current portion
    
    
    
    
    
    
    
    
    
    
    657.1
    
    
    
    2.3
    
    
    
    
    
    
    
    659.4Pension and other long term liabilities
    
    
    
    
    
    
    
    
    
    
    331.5
    
    
    
    98.5
    
    
    
    
    
    
    
    430.0Minority interest
    
    
    
    
    
    
    
    
    
    
    13.0
    
    
    
    44.2
    
    
    
    (1.1
    )
    
    
    56.1Parent loans
    
    
    0.1
    
    
    
    
    
    
    
    (61.3
    )
    
    
    54.5
    
    
    
    6.7
    
    
    
    Common stock
    
    
    0.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.4Additional paid-in capital
    
    
    678.6
    
    
    
    
    
    
    
    602.8
    
    
    
    996.1
    
    
    
    (1,598.9
    )
    
    
    678.6Retained earnings (accumulated deficit)
    
    
    (733.6
    )
    
    
    
    
    
    
    (371.4
    )
    
    
    (387.8
    )
    
    
    759.2
    
    
    
    (733.6
    )Accumulated other comprehensive
income (loss)
    
    
    156.4
    
    
    
    
    
    
    
    7.4
    
    
    
    172.8
    
    
    
    (180.2
    )
    
    
    156.4Total stockholders equity
    
    
    101.8
    
    
    
    
    
    
    
    238.8
    
    
    
    781.1
    
    
    
    (1,019.9
    )
    
    
    101.8Total liabilities and stockholders
equity
    
    $
    101.9
    
    
    $
    
    
    
    $
    1,460.6
    
    
    $
    1,186.3
    
    
    $
    (1,057.5
    )
    
    $
    1,691.3
 23




---



##### Table of Contents



CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the Nine Months Ended October 31, 2007
(Unaudited)
 Guarantor
    
    
    NonguarantorParent
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Total(Dollars in millions)Cash flows (used for) provided by
operating activities
    
    $
    (0.1
    )
    
    $
    (10.3
    )
    
    $
    (1.9
    )
    
    $
    67.8
    
    
    $
    (18.1
    )
    
    $
    37.4Cash flows from investing activities:Purchase of property, plant,
equipment and tooling
    
    
    
    
    
    
    
    
    
    
    (29.6
    )
    
    
    (34.5
    )
    
    
    
    
    
    
    (64.1
    )Investments in subsidiaries
    
    
    
    
    
    
    (429.0
    )
    
    
    745.6
    
    
    
    (188.6
    )
    
    
    (128.0
    )
    
    
    Proceeds from sale of assets
    
    
    
    
    
    
    
    
    
    
    1.3
    
    
    
    0.2
    
    
    
    
    
    
    
    1.5Cash (used for) provided by investing activities
    
    
    
    
    
    
    (429.0
    )
    
    
    717.3
    
    
    
    (222.9
    )
    
    
    (128.0
    )
    
    
    (62.6
    )Cash flows from financing activities:Changes in bank borrowings and credit facilities
    
    
    
    
    
    
    
    
    
    
    (0.6
    )
    
    
    1.5
    
    
    
    
    
    
    
    0.9Bank finance fees paid
    
    
    
    
    
    
    (9.2
    )
    
    
    (5.6
    )
    
    
    
    
    
    
    
    
    
    
    (14.8
    )Borrowing (repayment) of long-term debt
    
    
    
    
    
    
    525.7
    
    
    
    (661.2
    )
    
    
    (0.8
    )
    
    
    
    
    
    
    (136.3
    )Dividends paid to minority shareholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10.1
    )
    
    
    
    
    
    
    (10.1
    )Proceeds from issuance of common stock
    
    
    193.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    193.1Proceeds from parent investments
    
    
    
    
    
    
    
    
    
    
    442.8
    
    
    
    (392.2
    )
    
    
    (50.6
    )
    
    
    Call premium on Senior Notes
    
    
    
    
    
    
    
    
    
    
    (9.0
    )
    
    
    
    
    
    
    
    
    
    
    (9.0
    )Fees paid for Rights Offering
    
    
    
    
    
    
    
    
    
    
    (7.7
    )
    
    
    
    
    
    
    
    
    
    
    (7.7
    )Cash provided by (used for) financing
activities
    
    
    193.1
    
    
    
    516.5
    
    
    
    (241.3
    )
    
    
    (401.6
    )
    
    
    (50.6
    )
    
    
    16.1Increase (decrease) in parent loans
and advances
    
    
    (193.0
    )
    
    
    (52.9
    )
    
    
    (441.0
    )
    
    
    490.2
    
    
    
    196.7
    
    
    
    Cash flows from discontinued operations
    
    
    
    
    
    
    
    
    
    
    (21.3
    )
    
    
    66.4
    
    
    
    
    
    
    
    45.1Effect of exchange rates on cash and cash
equivalents
    
    
    
    
    
    
    
    
    
    
    0.9
    
    
    
    3.2
    
    
    
    
    
    
    
    4.1Increase in cash and cash equivalents
    
    
    
    
    
    
    24.3
    
    
    
    12.7
    
    
    
    3.1
    
    
    
    
    
    
    
    40.1Cash and cash equivalents at beginning
of period
    
    
    
    
    
    
    
    
    
    
    8.7
    
    
    
    29.8
    
    
    
    
    
    
    
    38.5Cash and cash equivalents at end of period
    
    $
    
    
    
    $
    24.3
    
    
    $
    21.4
    
    
    $
    32.9
    
    
    $
    
    
    
    $
    78.6
 24




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##### Table of Contents



CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the Nine Months Ended October 31, 2006
(Unaudited)
 Guarantor
    
    
    NonguarantorParent
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Total(Dollars in millions)Cash flows provided by (used for)
operating activities
    
    $
    
    
    
    $
    
    
    
    $
    24.5
    
    
    $
    43.5
    
    
    $
    (1.5
    )
    
    $
    66.5Cash flows from investing activities:Purchase of property, plant,
equipment and tooling
    
    
    
    
    
    
    
    
    
    
    (21.6
    )
    
    
    (18.0
    )
    
    
    
    
    
    
    (39.6
    )Investments in subsidiaries
    
    
    
    
    
    
    
    
    
    
    (476.6
    )
    
    
    432.6
    
    
    
    44.0
    
    
    
    Capital contributed by minority shareholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.4
    
    
    
    
    
    
    
    0.4Proceeds from sale of assets
    
    
    
    
    
    
    
    
    
    
    0.6
    
    
    
    0.3
    
    
    
    
    
    
    
    0.9Cash (used for) provided by investing activities
    
    
    
    
    
    
    
    
    
    
    (497.6
    )
    
    
    415.3
    
    
    
    44.0
    
    
    
    (38.3
    )Cash flows from financing activities:Changes in bank borrowings and credit facilities
    
    
    
    
    
    
    
    
    
    
    (1.8
    )
    
    
    0.3
    
    
    
    
    
    
    
    (1.5
    )Bank finance fees paid
    
    
    
    
    
    
    
    
    
    
    (2.9
    )
    
    
    
    
    
    
    
    
    
    
    (2.9
    )Repayment of long-term debt
    
    
    
    
    
    
    
    
    
    
    (14.6
    )
    
    
    (0.5
    )
    
    
    
    
    
    
    (15.1
    )Dividends paid to minority shareholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1.8
    )
    
    
    
    
    
    
    (1.8
    )Proceeds from parent investments
    
    
    
    
    
    
    
    
    
    
    582.4
    
    
    
    (542.2
    )
    
    
    (40.2
    )
    
    
    Cash provided by (used for) financing
activities
    
    
    
    
    
    
    
    
    
    
    563.1
    
    
    
    (544.2
    )
    
    
    (40.2
    )
    
    
    (21.3
    )Increase (decrease) in parent loans
and advances
    
    
    
    
    
    
    
    
    
    
    (84.7
    )
    
    
    87.0
    
    
    
    (2.3
    )
    
    
    Cash flows from discontinued operations
    
    
    
    
    
    
    
    
    
    
    (0.3
    )
    
    
    9.2
    
    
    
    
    
    
    
    8.9Effect of exchange rates on cash and cash
equivalents
    
    
    
    
    
    
    
    
    
    
    0.3
    
    
    
    1.1
    
    
    
    
    
    
    
    1.4Increase in cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    5.3
    
    
    
    11.9
    
    
    
    
    
    
    
    17.2Cash and cash equivalents at beginning
of period
    
    
    
    
    
    
    
    
    
    
    3.9
    
    
    
    38.6
    
    
    
    
    
    
    
    42.5Cash and cash equivalents at end of period
    
    $
    
    
    
    $
    
    
    
    $
    9.2
    
    
    $
    50.5
    
    
    $
    
    
    
    $
    59.7
 25




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##### Table of Contents



Note 16. Subsequent Events
   
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Executive Summary
  Company Overview
       26




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##### Table of Contents



Results of Operations
 Consolidated Results  Comparison of the Three Months Ended October 31, 2007 to the Three Months Ended October 31, 2006
  Three Months Ended October 31,2007
    
    
    2006
    
    
    $ Change
    
    % ChangeNet sales:Automotive Wheels sales
    
    $
    543.3
    
    
    $
    432.5
    
    
    $
    110.8
    
    
    
    25.6
    %Other
    
    
    11.6
    
    
    
    30.8
    
    
    
    (19.2
    )
    
    
    -62.3
    %Total
    
    $
    554.9
    
    
    $
    463.3
    
    
    $
    91.6
    
    
    
    19.8
    %Gross profit
    
    $
    58.1
    
    
    $
    42.6
    
    
    $
    15.5
    
    
    
    36.4
    %Marketing, general, and administrative
    
    
    35.8
    
    
    
    28.7
    
    
    
    7.1
    
    
    
    24.7
    %Amortization of intangibles
    
    
    2.5
    
    
    
    2.8
    
    
    
    (0.3
    )
    
    
    -10.7
    %Asset impairments and other restructuring charges
    
    
    50.0
    
    
    
    2.5
    
    
    
    47.5
    
    
    
    1900.0
    %Other expense, net
    
    
    (2.6
    )
    
    
    (2.3
    )
    
    
    (0.3
    )
    
    
    -13.0
    %(Loss) earnings from operations
    
    
    (27.6
    )
    
    
    10.9
    
    
    
    (38.5
    )
    
    
    -353.2
    %Interest expense, net
    
    
    13.9
    
    
    
    18.7
    
    
    
    (4.8
    )
    
    
    -25.7
    %Other non-operating income
    
    
    (1.4
    )
    
    
    
    
    
    
    (1.4
    )
    
    
    N/AIncome tax expense
    
    
    16.7
    
    
    
    8.4
    
    
    
    8.3
    
    
    
    98.8
    %Minority interest
    
    
    5.9
    
    
    
    3.1
    
    
    
    2.8
    
    
    
    90.3
    %Loss from continuing operations
    
    
    (62.7
    )
    
    
    (19.3
    )
    
    
    (43.4
    )
    
    
    -224.9
    %Loss from discontinued operations, net of tax
    
    
    
    
    
    
    (40.3
    )
    
    
    40.3
    
    
    
    100.0
    %Net loss
    
    $
    (62.7
    )
    
    $
    (59.6
    )
    
    $
    (3.1
    )
    
    
    -5.2
    %
 Sales
  Gross profit
  Marketing, general, and administrative
  27




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##### Table of Contents



Asset impairments and other restructuring charges
   Interest expense, net
  Income taxes
  Discontinued Operations
   Net loss
  28




---



##### Table of Contents



Segment Results  Comparison of the Three Months Ended October 31, 2007 to the Three Months Ended
October 31, 2006
 Automotive Wheels
  Three Months Ended October 31,2007
    
    
    2006
    
    
    $ ChangeNet sales
    
    $
    543.3
    
    
    $
    432.5
    
    
    $
    110.8Asset impairments and other restructuring charges:Facility closure costs
    
    $
    0.1
    
    
    $
    0.4
    
    
    $
    (0.3
    )Impairment of facility, machinery, and equipment
    
    
    48.9
    
    
    
    
    
    
    
    48.9Severance and other restructuring costs
    
    
    
    
    
    
    1.5
    
    
    
    (1.5
    )Total asset impairments and other restructuring charges
    
    $
    49.0
    
    
    $
    1.9
    
    
    $
    47.1(Loss) earnings from operations
    
    $
    (21.8
    )
    
    $
    23.4
    
    
    $
    (45.2
    )
 Net sales
  Asset impairments and other restructuring charges
   (Loss) earnings from operations
  Other
  Three Months EndedOctober 31,2007
    
    2006
    
    $ ChangeNet sales
    
    $
    11.6
    
    
    $
    30.8
    
    
    $
    (19.2
    )Total asset impairments and other restructuring charges
    
    $
    1.0
    
    
    $
    0.6
    
    
    $
    0.4Loss from operations
    
    $
    (5.8
    )
    
    $
    (12.5
    )
    
    $
    6.7
 Net Sales
  29




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##### Table of Contents



Asset impairments and other restructuring charges
  Loss from operations
  Results of Operations
 Consolidated Results  Comparison of the Nine Months Ended October 31, 2007 to the Nine Months Ended October 31, 2006
  Nine Months Ended October 31,2007
    
    
    2006
    
    
    $ Change
    
    
    % ChangeNet sales:Automotive Wheels sales
    
    $
    1,531.3
    
    
    $
    1,256.1
    
    
    $
    275.2
    
    
    
    21.9
    %Other
    
    
    66.3
    
    
    
    98.4
    
    
    
    (32.1
    )
    
    
    -32.6
    %Total
    
    $
    1,597.6
    
    
    $
    1,354.5
    
    
    $
    243.1
    
    
    
    17.9
    %Gross profit
    
    $
    167.4
    
    
    $
    125.2
    
    
    $
    42.2
    
    
    
    33.7
    %Marketing, general, and administrative
    
    
    116.6
    
    
    
    96.3
    
    
    
    20.3
    
    
    
    21.1
    %Amortization of intangibles
    
    
    7.5
    
    
    
    7.8
    
    
    
    (0.3
    )
    
    
    -3.8
    %Asset impairments and other restructuring charges
    
    
    54.0
    
    
    
    8.7
    
    
    
    45.3
    
    
    
    520.7
    %Other expense (income), net
    
    
    4.9
    
    
    
    (6.7
    )
    
    
    11.6
    
    
    
    173.1
    %(Loss) earnings from operations
    
    
    (15.6
    )
    
    
    19.1
    
    
    
    (34.7
    )
    
    
    -181.7
    %Interest expense, net
    
    
    47.8
    
    
    
    54.8
    
    
    
    (7.0
    )
    
    
    -12.8
    %Loss on early extinguishment of debt
    
    
    21.5
    
    
    
    
    
    
    
    21.5
    
    
    
    N/AOther non-operating income
    
    
    (1.4
    )
    
    
    
    
    
    
    (1.4
    )
    
    
    N/AIncome tax expense
    
    
    38.5
    
    
    
    27.5
    
    
    
    11.0
    
    
    
    40.0
    %Minority interest
    
    
    15.4
    
    
    
    7.3
    
    
    
    8.1
    
    
    
    111.0
    %Loss from continuing operations
    
    
    (137.4
    )
    
    
    (70.5
    )
    
    
    (66.9
    )
    
    
    -94.9
    %Loss from discontinued operations, net of tax
    
    
    (27.7
    )
    
    
    (33.6
    )
    
    
    5.9
    
    
    
    17.6
    %Net loss
    
    $
    (165.1
    )
    
    $
    (104.1
    )
    
    $
    (61.0
    )
    
    
    -58.6
    %
 Sales
  Gross profit
  30




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##### Table of Contents



Marketing, general, and administrative
  Asset impairments and other restructuring charges
   Other Expense, net
  Interest expense, net
  Loss on early extinguishment of debt
  Income taxes
  31




---



##### Table of Contents



Discontinued operations
     Net loss
  Segment Results  Comparison of the Nine Months Ended October 31, 2007 to the Nine Months Ended
October 31, 2006
 Automotive Wheels
  Nine Months Ended October 31,2007
    
    
    2006
    
    
    $ ChangeNet sales
    
    $
    1,531.3
    
    
    $
    1,256.1
    
    
    $
    275.2Asset impairments and other restructuring charges:Facility closure costs
    
    $
    2.9
    
    
    $
    2.0
    
    
    $
    0.9Impairment of facility, machinery, and equipment
    
    
    49.4
    
    
    
    0.1
    
    
    
    49.3Severance and other restructuring costs
    

    
    
    
    3.1
    
    
    (3.1
    )Total asset impairments and other restructuring charges
    
    $
    52.3
    
    
    $
    5.2
    
    
    $
    47.1Earnings from operations
    
    $
    24.4
    
    
    $
    52.6
    
    
    $
    (28.2
    )
 Net sales
  32




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##### Table of Contents



Asset impairments and other restructuring charges
   Earnings from operations
  Other
  Nine Months Ended October 31,2007
    
    2006
    
    $ ChangeNet sales
    
    $
    66.3
    
    
    $
    98.4
    
    
    $
    (32.1
    )Total asset impairments and other restructuring charges
    
    $
    1.7
    
    
    $
    3.5
    
    
    $
    (1.8
    )Loss from operations
    
    $
    (40.0
    )
    
    $
    (33.5
    )
    
    $
    (6.5
    )
 Net Sales
  Asset impairments and other restructuring charges
   33




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##### Table of Contents



Loss from operations
  Liquidity and Capital Resources
 Cash Flows
 Operating Activities:
 Investing Activities:
 Financing Activities:
 Sources of Liquidity
  1 2
  
 
  34




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##### Table of Contents



Other Liquidity Matters
    Off Balance Sheet Arrangements
      35




---



##### Table of Contents



Credit Ratings
  S
& P
    

Moodys
    

FitchCorporate rating
    
    B
    
    B3
    
    BBank debt rating
    
    BB-
    
    B2
    
    BB/RR1New Senior Note rating
    
    CCC+
    
    Caa2
    
    B-/RR5
 Contractual Obligations
  Payment Due by PeriodLess than 1Year
    
    2-3 Years
    
    4-5 Years
    
    After 5 Years
    
    TotalShort-term borrowings
    
    $
    31.9
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    31.9Long-term debt
    
    
    4.6
    
    
    
    9.1
    
    
    
    7.8
    
    
    
    542.0
    
    
    
    563.5Operating leases
    
    
    5.1
    
    
    
    4.9
    
    
    
    0.6
    
    
    
    0.1
    
    
    
    10.7Capital expenditures
    
    
    38.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    38.6United States pension contribution
    
    
    8.4
    
    
    
    16.5
    
    
    
    14.3
    
    
    
    
    
    
    
    39.2Tax reserve
    
    
    18.9
    
    
    
    
    
    
    
    
    
    
    
    4.2
    
    
    
    23.1Total obligations
    
    $
    107.5
    
    
    $
    30.5
    
    
    $
    22.7
    
    
    $
    546.3
    
    
    $
    707.0
 Other ash Requirements
  Interest
    
    $
    16.9Taxes
    
    
    14.9International pension and other post-retirement benefits funding
    
    
    6.4
 New Accounting Pronouncements
   
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Foreign Exchange
  36




---



##### Table of Contents



Interest Rates
  
  Commodities
  
 Item 4. Controls and Procedures
   37




---



##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
    38




---



##### Table of Contents



Item 1A. Risk Factors
  
 Item 2. Changes in Securities and Use of Proceeds
  
 Item 3. Defaults upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
 10.24
    
    Stock Purchase Agreement, dated as of November 9, 2007, between HLI
Brakes Holding Company, Inc., and Brembo North America, Inc. *31.1
    
    Certification of Curtis J. Clawson, Chairman of the Board,
President, and Chief Executive Officer, pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.*31.2
    
    Certification of James A. Yost, Executive Vice President and Chief
Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.*32.1
    
    Certification of Curtis J. Clawson, Chairman of the Board,
President, and Chief Executive Officer, Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.*32.2
    
    Certification of James A. Yost, Executive Vice President and Chief
Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
 
 *
    
    Filed electronically herewith. 39




---



##### Table of Contents



SIGNATURES
  HAYES LEMMERZ INTERNATIONAL, INC./s/ JAMES A. YOSTJames A. YostExecutive Vice President and Chief Financial Officer  40




---



##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC.
 10-Q EXHIBIT INDEX
 10.24
    
    Stock Purchase Agreement, dated as of November 9, 2007, between HLI
Brakes Holding Company, Inc., and Brembo North America, Inc. *31.1
    
    Certification of Curtis J. Clawson, Chairman of the Board,
President, and Chief Executive Officer, pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.*31.2
    
    Certification of James A. Yost, Executive Vice President and Chief
Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.*32.1
    
    Certification of Curtis J. Clawson, Chairman of the Board,
President, and Chief Executive Officer, Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.*32.2
    
    Certification of James A. Yost, Executive Vice President and Chief
Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
 
 *
    
    Filed electronically herewith. 41