##### Table of Contents









UNITED STATES

SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


FORM 10-Q/A

(Mark One)

x QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended April 30, 2001

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: 1-11592

HAYES LEMMERZ 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.)

15300 CENTENNIAL DRIVE

NORTHVILLE, MICHIGAN 48167


(Address of Principal Executive Offices)(Zip
Code)


Registrants telephone number, including
area code: (734) 737-5000

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 o     No x

The number of
shares of common stock outstanding as of February 19, 2002
was 28,455,495 shares.



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TABLE OF CONTENTS



|                                                             |                                                                                               |  |  |  |  |  |  | 
|------------------------------------------------------------ | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|QUARTERLY REPORT ON FORM 10-Q/A                             
|Consolidated Statements Of Operations                       
|Consolidated Balance Sheets                                 
|Consolidated Statements of Cash Flows                       
|CONDENSED CONSOLIDATING BALANCE SHEET As of January 31, 2001
|                                                             | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                                             | Item 3. Quantitative and Qualitative Disclosures about Market Risk                           
|PART II. OTHER INFORMATION                                  
|                                                             | Item 3. Legal Proceedings                                                                    
|                                                             | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                                                  



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC.






QUARTERLY REPORT ON FORM 10-Q/A


TABLE OF CONTENTS

|                              |         |                                            |                                                                                        |      |   |    | 
|----------------------------- | ------- | ------------------------------------------ | -------------------------------------------------------------------------------------- | ---- | - | -- | 
|                              |         |                                            |                                                                                        | Page |  
|                              |         |                                            |                                                                                        |      |  
|PART I. FINANCIAL INFORMATION
|                              | 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 |      |   | 29 | 
|                              | Item 3. |                                            | Quantitative and Qualitative Disclosures about
	Market Risk                            |      |   | 41 | 
|PART II. OTHER INFORMATION   
|                              | Item 1. |                                            | Legal Proceedings                                                                      |      |   | 42 | 
|                              | Item 2. |                                            | Changes in Securities                                                                  |      |   |    | 
|                              | Item 3. |                                            | Defaults upon Senior Securities                                                        |      |   |    | 
|                              | Item 4. |                                            | Submission of Matters to a Vote of
	Security-Holders                                   |      |   |    | 
|                              | Item 5. |                                            | Other Information                                                                      |      |   |    | 
|                              | Item 6. |                                            | Exhibits and Reports on Form 8-K                                                       |      |   | 42 | 
|SIGNATURES                    |         |                                            | 43                                                                                     |     

UNLESS OTHERWISE INDICATED, REFERENCES TO THE
COMPANY MEAN HAYES LEMMERZ 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 2001 MEANS THE PERIOD BEGINNING FEBRUARY 1,
2001, AND ENDING JANUARY 31, 2002). THIS REPORT CONTAINS
FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995 WITH RESPECT TO THE
FINANCIAL CONDITION, RESULTS OF OPERATIONS, AND BUSINESS OF THE
COMPANY. THESE FORWARD LOOKING STATEMENTS INVOLVE CERTAIN RISKS
AND UNCERTAINTIES. NO ASSURANCE CAN BE GIVEN THAT ANY OF SUCH
MATTERS WILL BE REALIZED. FACTORS THAT MAY CAUSE ACTUAL RESULTS
TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY SUCH FORWARD
LOOKING STATEMENTS INCLUDE, AMONG OTHERS, THE FOLLOWING
POSSIBILITIES: (1) THE OUTCOME AND CONSEQUENCES OF THE
COMPANYS CHAPTER 11 PROCEEDINGS; (2) COMPETITIVE
PRESSURE IN THE COMPANYS INDUSTRY INCREASES SIGNIFICANTLY;
(3) GENERAL ECONOMIC CONDITIONS ARE LESS FAVORABLE THAN
EXPECTED; (4) THE COMPANYS DEPENDENCE ON THE
AUTOMOTIVE INDUSTRY (WHICH HAS HISTORICALLY BEEN CYCLICAL);
(5) CHANGES IN THE FINANCIAL MARKETS AFFECTING THE
COMPANYS FINANCIAL STRUCTURE AND THE COMPANYS COST
OF CAPITAL AND BORROWED MONEY; AND (6) THE UNCERTAINTIES
INHERENT IN INTERNATIONAL OPERATIONS AND FOREIGN CURRENCY
FLUCTUATIONS. THE COMPANY HAS NO DUTY UNDER THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995 TO UPDATE THE FORWARD
LOOKING STATEMENTS IN THIS QUARTERLY REPORT ON FORM 10-Q/A
AND THE COMPANY DOES NOT INTEND TO PROVIDE SUCH UPDATES.

THE COMPANY IS FILING THIS AMENDED
FORM 10-Q/A QUARTERLY REPORT AS A RESULT OF THE MATTERS
DISCUSSED IN NOTE 2, RESTATEMENT OF CONSOLIDATED
FINANCIAL STATEMENTS BELOW. EXCEPT AS SPECIFICALLY STATED
OTHERWISE IN THIS AMENDED FORM 10-Q/A, THE INFORMATION
CONTAINED IN THE AMENDED FORM 10-Q/A HAS NOT BEEN UPDATED
TO REFLECT THE MATTERS SET FORTH IN NOTE 11,
SUBSEQUENT EVENTS BELOW.

2



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND
SUBSIDIARIES






Consolidated Statements Of
Operations


(Millions of dollars, except share
amounts)


(Unaudited)


|                                                  |                                                               |                    |        |       |      |   |        |      | 
|------------------------------------------------- | ------------------------------------------------------------- | ------------------ | ------ | ----- | ---- | - | ------ | ---- | 
|                                                  |                                                               |                   
|                                                  |                                                               | As Restated        |       
|                                                  |                                                               |                    |       
|                                                  |                                                               |                   
|                                                  |                                                               | Three Months Ended |       
|                                                  |                                                               | April 30,          |       
|                                                  |                                                               |                    |       
|                                                  |                                                               | 2001               |        |       | 2000 |  
|                                                  |                                                               |                    |        |       |      |  
|Net sales                                         |                                                               | $                  | 540.9  |       |      | $ | 593.6  |     
|Cost of goods sold                                |                                                               |                    | 483.3  |       |      |   | 499.3  |     
|                                                  |                                                               |                    |        |       |      |  
|                                                  | Gross profit                                                  |                    |        | 57.6  |      |   |        | 94.3 | 
|Marketing, general and administration             |                                                               |                    | 26.2   |       |      |   | 24.8   |     
|Engineering and product development               |                                                               |                    | 5.9    |       |      |   | 6.2    |     
|Amortization of intangibles                       |                                                               |                    | 6.7    |       |      |   | 7.0    |     
|Equity in losses (earnings) of joint ventures     |                                                               |                    | 0.4    |       |      |   | (1.1   | )   
|Asset impairments and other restructuring charges |                                                               |                    | 31.0   |       |      |   | 0.5    |     
|Other income, net                                 |                                                               |                    | (0.2   | )     |      |   | (2.4   | )   
|                                                  |                                                               |                    |        |       |      |  
|                                                  | Earnings (loss) from operations                               |                    |        | (12.4 | )    |   |        | 59.3 | 
|Interest expense, net                             |                                                               |                    | 44.2   |       |      |   | 38.8   |     
|                                                  |                                                               |                    |        |       |      |  
|                                                  | Earnings (loss) before taxes on income and
	minority interest |                    |        | (56.6 | )    |   |        | 20.5 | 
|Income tax provision                              |                                                               |                    | 6.3    |       |      |   | 7.3    |     
|                                                  |                                                               |                    |        |       |      |  
|                                                  | Earnings (loss) before minority interest                      |                    |        | (62.9 | )    |   |        | 13.2 | 
|Minority interest                                 |                                                               |                    | 0.8    |       |      |   | 0.9    |     
|                                                  |                                                               |                    |        |       |      |  
|                                                  | Net income (loss)                                             |                    | $      | (63.7 | )    |   | $      | 12.3 | 
|                                                  |                                                               |                    |        |       |      |  
|Per share information:                            |                                                               |                    |        |       |      |   |        |     
|Basic net income (loss) per share                 |                                                               | $                  | (2.24  | )     |      | $ | 0.41   |     
|                                                  |                                                               |                    |        |       |      |  
|Basic average shares outstanding (in thousands)   |                                                               |                    | 28,455 |       |      |   | 30,356 |     
|                                                  |                                                               |                    |        |       |      |  
|Diluted net income (loss) per share               |                                                               | $                  | (2.24  | )     |      | $ | 0.40   |     
|                                                  |                                                               |                    |        |       |      |  
|Diluted average shares outstanding (in thousands) |                                                               |                    | 28,455 |       |      |   | 30,876 |     
|                                                  |                                                               |                    |        |       |      |  

See accompanying notes to consolidated financial
statements.

3



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND
SUBSIDIARIES






Consolidated Balance Sheets


(Millions of dollars, except share
amounts)


|                                                |                                                                            |                                                                                                                                                          |         |         |             |   |         |             |         |  |         |         |         |  
|----------------------------------------------- | -------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------- | ------- | ------- | ----------- | - | ------- | ----------- | ------- |  | ------- | ------- | ------- | -
|                                                |                                                                            |                                                                                                                                                          |         |        
|                                                |                                                                            | As Restated                                                                                                                                              |         |         |            
|                                                |                                                                            |                                                                                                                                                          |         |         |            
|                                                |                                                                            | April 30,                                                                                                                                                |         |         | April 30,   |   |         | January 31, |        
|                                                |                                                                            | 2001                                                                                                                                                     |         |         | 2000        |   |         | 2001        |        
|                                                |                                                                            |                                                                                                                                                          |         |         |             |   |         |             |        
|                                                |                                                                            | (Unaudited)                                                                                                                                              |         |         | (Unaudited) |   |         |            
|Assets                                          |                                                                            |                                                                                                                                                          |         |         |             |   |         |             |         |  |         |        
|Current assets:                                 |                                                                            |                                                                                                                                                          |         |         |             |   |         |             |         |  |         |        
|                                                | Cash and cash equivalents                                                  |                                                                                                                                                          | $       | 28.9    |             |   |         | 40.4        |         |  | $       |        |        
|                                                | Receivables                                                                |                                                                                                                                                          |         | 252.1   |             |   |         | 204.6       |         |  |         | 256.7   |        
|                                                | Inventories                                                                |                                                                                                                                                          |         | 208.2   |             |   |         | 208.2       |         |  |         | 217.3   |        
|                                                | Deferred tax assets                                                        |                                                                                                                                                          |         | 21.9    |             |   |         | 32.2        |         |  |         | 21.9    |        
|                                                | Prepaid expenses and other                                                 |                                                                                                                                                          |         | 15.6    |             |   |         | 10.6        |         |  |         | 16.8    |        
|                                                |                                                                            |                                                                                                                                                          |         |         |             |   |         |             |        
|                                                |                                                                            | Total current assets                                                                                                                                     |         |         | 526.7       |   |         |             | 496.0   |  |         |         | 512.7   |  
|Net property, plant and equipment               |                                                                            |                                                                                                                                                          | 1,055.0 |         |             |   | 1,166.2 |             |         |  | 1,104.8 |        
|Deferred tax assets                             |                                                                            |                                                                                                                                                          | 21.5    |         |             |   | 27.4    |             |         |  | 21.5    |        
|Goodwill and other assets                       |                                                                            |                                                                                                                                                          | 944.0   |         |             |   | 1,038.4 |             |         |  | 964.9   |        
|                                                |                                                                            |                                                                                                                                                          |         |         |             |   |         |             |        
|                                                |                                                                            | Total assets                                                                                                                                             |         | $       | 2,547.2     |   |         | $           | 2,728.0 |  |         | $       | 2,603.9 |  
|                                                |                                                                            |                                                                                                                                                          |         |         |             |   |         |             |        
|Liabilities and Stockholders Equity
	(Deficit) |                                                                            |                                                                                                                                                          |         |         |             |   |         |             |         |  |         |        
|Current liabilities:                            |                                                                            |                                                                                                                                                          |         |         |             |   |         |             |         |  |         |        
|                                                | Bank borrowings                                                            |                                                                                                                                                          | $       | 81.9    |             |   |         | 87.3        |         |  | $       | 79.6    |        
|                                                | Current portion of long-term debt                                          |                                                                                                                                                          |         | 1,675.2 |             |   |         | 61.5        |         |  |         | 1,613.7 |        
|                                                | Accounts payable and accrued liabilities                                   |                                                                                                                                                          |         | 457.4   |             |   |         | 499.3       |         |  |         | 491.6   |        
|                                                |                                                                            |                                                                                                                                                          |         |         |             |   |         |             |        
|                                                |                                                                            | Total current liabilities                                                                                                                                |         |         | 2,214.5     |   |         |             | 648.1   |  |         |         | 2,184.9 |  
|Long-term debt, net of current portion          |                                                                            |                                                                                                                                                          | 87.5    |         |             |   | 1,532.0 |             |         |  | 94.6    |        
|Deferred tax liabilities                        |                                                                            |                                                                                                                                                          | 72.3    |         |             |   | 61.5    |             |         |  | 68.7    |        
|Pension and other long-term liabilities         |                                                                            |                                                                                                                                                          | 253.5   |         |             |   | 275.9   |             |         |  | 266.9   |        
|Minority interest                               |                                                                            |                                                                                                                                                          | 10.6    |         |             |   | 13.7    |             |         |  | 10.6    |        
|                                                |                                                                            |                                                                                                                                                          |         |         |             |   |         |             |        
|                                                |                                                                            | Total liabilities                                                                                                                                        |         |         | 2,638.4     |   |         |             | 2,531.2 |  |         |         | 2,625.7 |  
|Commitments and Contingencies:                  |                                                                            |                                                                                                                                                          |         |         |             |   |         |             |         |  |         |        
|Common stock subject to put agreement           |                                                                            |                                                                                                                                                          |        |         |             |   | 8.5     |             |         |  |        |        
|Stockholders equity (deficit):                 |                                                                            |                                                                                                                                                          |         |         |             |   |         |             |         |  |         |        
|                                                | Preferred stock, 25,000,000 shares authorized,
	none issued or outstanding |                                                                                                                                                          |         |        |             |   |         |            |         |  |         |        |        
|                                                | Common stock, par value $0.01 per share:                                   |                                                                                                                                                          |         |         |             |   |         |             |         |  |         |         |        
|                                                |                                                                            | Voting  authorized 99,000,000 shares;
	27,709,919, 27,707,919, and 27,705,019 shares issued;
	25,806,469, 27,709,919, and 25,806,469 shares outstanding |         |         | 0.3         |   |         |             | 0.3     |  |         |         | 0.3     |  
|                                                |                                                                            | Nonvoting  authorized 5,000,000
	shares; issued and outstanding, 2,649,026 shares                                                                       |         |         |            |   |         |             |        |  |         |         |        |  
|                                                | Additional paid in capital                                                 |                                                                                                                                                          |         | 235.1   |             |   |         | 231.4       |         |  |         | 235.1   |        
|                                                | Common stock in treasury at cost, 1,901,450 shares                         |                                                                                                                                                          |         | (25.7   | )           |   |         |            |         |  |         | (25.7   | )      
|                                                | Retained earnings (accumulated deficit)                                    |                                                                                                                                                          |         | (209.4  | )           |   |         | 52.8        |         |  |         | (145.7  | )      
|                                                | Accumulated other comprehensive loss                                       |                                                                                                                                                          |         | (91.5   | )           |   |         | (96.2       | )       |  |         | (85.8   | )      
|                                                |                                                                            |                                                                                                                                                          |         |         |             |   |         |             |        
|                                                |                                                                            | Total stockholders equity (deficit)                                                                                                                     |         |         | (91.2       | ) |         |             | 188.3   |  |         |         | (21.8   | )
|                                                |                                                                            |                                                                                                                                                          |         |         |             |   |         |             |        
|                                                |                                                                            | Total liabilities and stockholders equity
	(deficit)                                                                                                    |         | $       | 2,547.2     |   |         | $           | 2,728.0 |  |         | $       | 2,603.9 |  
|                                                |                                                                            |                                                                                                                                                          |         |         |             |   |         |             |        

See accompanying notes to consolidated financial
statements.

4



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND
SUBSIDIARIES






Consolidated Statements of Cash
Flows


(Millions of dollars)


(Unaudited)


|                                                                                       |                                                                                   |                                          |                                       |       |       |       |      |       |        |        |  
|-------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------- | ---------------------------------------- | ------------------------------------- | ----- | ----- | ----- | ---- | ----- | ------ | ------ | -
|                                                                                       |                                                                                   |                                         
|                                                                                       |                                                                                   | As Restated                              |                                      
|                                                                                       |                                                                                   |                                          |                                      
|                                                                                       |                                                                                   |                                         
|                                                                                       |                                                                                   | Three Months Ended                       |                                      
|                                                                                       |                                                                                   | April,                                   |                                      
|                                                                                       |                                                                                   |                                          |                                      
|                                                                                       |                                                                                   | 2001                                     |                                       |       | 2000  |      
|                                                                                       |                                                                                   |                                          |                                       |       |       |      
|Cash flows from operating activities:                                                  |                                                                                   |                                          |                                       |       |       |       |      |      
|Net income (loss)                                                                      |                                                                                   | $                                        | (63.7                                 | )     |       | $     | 12.3 |      
|Adjustments to reconcile net income (loss) to net
	cash used for operating activities: |                                                                                   |                                          |                                       |       |       |       |      |      
|                                                                                       | Depreciation and tooling amortization                                             |                                          |                                       | 30.8  |       |       |      | 29.2  |       
|                                                                                       | Amortization of intangibles                                                       |                                          |                                       | 6.7   |       |       |      | 7.0   |       
|                                                                                       | Amortization of deferred financing fees                                           |                                          |                                       | 1.8   |       |       |      | 1.6   |       
|                                                                                       | Deferred taxes                                                                    |                                          |                                       | 3.6   |       |       |      |      |       
|                                                                                       | Asset impairments and other restructuring charges                                 |                                          |                                       | 31.0  |       |       |      | 0.5   |       
|                                                                                       | Minority interest                                                                 |                                          |                                       | 0.8   |       |       |      | 0.9   |       
|                                                                                       | Equity in losses (earnings) of joint ventures                                     |                                          |                                       | 0.4   |       |       |      | (1.1  | )     
|                                                                                       | Changes in operating assets and liabilities that
	increase (decrease) cash flows: |                                          |                                       |       |       |       |      |       |       
|                                                                                       |                                                                                   | Receivables                              |                                       |       | (53.1 | )     |      |       | (36.3  | )     
|                                                                                       |                                                                                   | Inventories                              |                                       |       | 3.8   |       |      |       | (17.5  | )     
|                                                                                       |                                                                                   | Prepaid expenses and other               |                                       |       | 0.8   |       |      |       | (2.1   | )     
|                                                                                       |                                                                                   | Accounts payable and accrued liabilities |                                       |       | (14.5 | )     |      |       | (110.7 | )     
|                                                                                       |                                                                                   | Other long-term liabilities              |                                       |       | (3.8  | )     |      |       | (2.5   | )     
|                                                                                       |                                                                                   |                                          |                                       |       |       |      
|                                                                                       |                                                                                   |                                          | Cash used for operating activities    |       |       | (55.4 | )    |       |        | (118.7 | )
|                                                                                       |                                                                                   |                                          |                                       |       |       |      
|Cash flows from investing activities:                                                  |                                                                                   |                                          |                                       |       |       |       |      |      
|                                                                                       | Acquisition of property, plant and equipment                                      |                                          |                                       | (29.9 | )     |       |      | (41.9 | )     
|                                                                                       | Tooling expenditures                                                              |                                          |                                       | (1.2  | )     |       |      |      |       
|                                                                                       | Other, net                                                                        |                                          |                                       | (1.3  | )     |       |      | 4.6   |       
|                                                                                       |                                                                                   |                                          |                                       |       |       |      
|                                                                                       |                                                                                   |                                          | Cash used for investing activities    |       |       | (32.4 | )    |       |        | (37.3  | )
|                                                                                       |                                                                                   |                                          |                                       |       |       |      
|Cash flows from financing activities:                                                  |                                                                                   |                                          |                                       |       |       |       |      |      
|                                                                                       | Increase in bank borrowings and revolver                                          |                                          |                                       | 73.1  |       |       |      | 159.9 |       
|                                                                                       | Proceeds from accounts receivable securitization                                  |                                          |                                       | 47.6  |       |       |      | 12.0  |       
|                                                                                       | Financing fees                                                                    |                                          |                                       | (2.3  | )     |       |      |      |       
|                                                                                       |                                                                                   |                                          |                                       |       |       |      
|                                                                                       |                                                                                   |                                          | Cash provided by financing activities |       |       | 118.4 |      |       |        | 171.9  |  
|                                                                                       |                                                                                   |                                          |                                       |       |       |      
|Effect of exchange rate changes on cash and cash
	equivalents                          |                                                                                   |                                          | (1.7                                  | )     |       |       | (1.4 | )    
|                                                                                       |                                                                                   |                                          |                                       |       |       |      
|                                                                                       | Increase in cash and cash equivalents                                             |                                          |                                       | 28.9  |       |       |      | 14.5  |       
|Cash and cash equivalents at beginning of year                                         |                                                                                   |                                          |                                      |       |       |       | 25.9 |      
|                                                                                       |                                                                                   |                                          |                                       |       |       |      
|Cash and cash equivalents at end of period                                             |                                                                                   | $                                        | 28.9                                  |       |       | $     | 40.4 |      
|                                                                                       |                                                                                   |                                          |                                       |       |       |      
|Supplemental data:                                                                     |                                                                                   |                                          |                                       |       |       |       |      |      
|                                                                                       | Cash paid for interest                                                            |                                          |                                       | 22.0  |       |       |      | 22.8  |       
|                                                                                       | Cash paid for income taxes                                                        |                                          |                                       | 0.4   |       |       |      | 1.0   |       

See accompanying notes to consolidated financial
statements.

5



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND
SUBSIDIARIES

Notes to Consolidated Financial
Statements

Three Months Ended April 30, 2001 and
2000


(Unaudited)


(Millions of Dollars Unless Otherwise
Stated)


(1) Description of Business and Basis of
Presentation

Description
of Business

Unless otherwise indicated, references to
Company mean Hayes Lemmerz International, Inc. and
its subsidiaries and references to fiscal year mean the
Companys year ended January 31 of the following year
(e.g., fiscal 2001 refers to the period beginning
February 1, 2001 and ending January 31, 2002,
fiscal 2000 refers to the period beginning
February 1, 2000 and ending January 31, 2001 and
fiscal 1999 refers to the period beginning
February 1, 1999 and ending January 31, 2000).

The Company designs, engineers and manufactures
suspension module components, principally for original equipment
manufacturers (OEMs) of passenger cars, light trucks
and commercial highway vehicles worldwide. The Companys
products include one-piece cast aluminum wheels, fabricated
aluminum wheels, fabricated steel wheels, full face cast
aluminum wheels, clad covered wheels, wheel-end attachments,
aluminum structural components, intake and exhaust manifolds,
and brake drums, hubs and rotors.

The Company is filing this amended
Form 10-Q/ A Quarterly Report as a result of the matters
discussed below in Note 2.

Basis of
Presentation

The accompanying consolidated financial
statements have been prepared on a going concern basis which
contemplates continuity of operations, realization of assets,
and payment of liabilities in the ordinary course of business
and do not reflect adjustments that might result if the Company
is unable to continue as a going concern. The Companys
recent history of significant losses, deficit in
stockholders equity and issues related to non-compliance
with debt covenants raise substantial doubt about the
Companys ability to continue as a going concern. As is
more fully discussed in Note 11, the Company filed a
voluntary petition for reorganization under Chapter 11 of
the Bankruptcy Code in December 2001. Continuing as a going
concern is dependent upon, among other things, the
Companys formulation of a plan of reorganization that is
confirmed by the Bankruptcy Court, the success of future
business operations, and the generation of sufficient cash from
operations and financing sources to meet the Companys
obligations.

The Companys unaudited interim consolidated
financial statements do not include all of the disclosures
required by accounting principles generally accepted in the
United States of America for annual financial statements. In the
opinion of management, all adjustments considered necessary for
a fair presentation of the interim period results have been
included. Operating results for the three months ended
April 30, 2001 are not necessarily indicative of the
results that may be expected for the full fiscal year ending
January 31, 2002.

Certain prior period amounts have been
reclassified to conform to the current year presentation.

(2) Restatement of Consolidated Financial
Statements

On September 5 and December 13, 2001, the
Company announced that it would restate its consolidated
financial statements as of and for the fiscal years ended
January 31, 2001 and 2000, and related quarterly periods,
and for the fiscal quarter ended April 30, 2001 because the
Company failed in certain instances to properly apply accounting
principles generally accepted in the United States of America,
and because certain accounting errors and irregularities in the
Companys financial statements were identified. The Company
also advised that the accompanying independent auditors
reports regarding the fiscal 2000 and 1999 consolidated
financial statements should not be relied upon.

6



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND
SUBSIDIARIES


Notes to Consolidated Financial Statements
 (Continued)

Three Months Ended April 30, 2001 and
2000


(Unaudited)


(Millions of Dollars Unless Otherwise
Stated)




(2) Restatement of Consolidated Financial
Statements  (Continued)


The Audit Committee of the Companys Board
of Directors was given the responsibility to investigate the
facts and circumstances relating to the accounting and internal
control issues which gave rise to the restatement and the
Companys accounting practices, policies and procedures
(the Audit Committee Investigation). To assist with
the Audit Committee Investigation, the Audit Committee engaged
the law firm of Skadden Arps Slate Meagher & Flom LLP
(Skadden Arps) and Skadden Arps engaged the
accounting firm of Ernst & Young LLP.

In addition to the Audit Committee Investigation,
the Company conducted a review of its accounting records for the
first quarter of fiscal 2001, fiscal 2000, and fiscal 1999 and
engaged KPMG LLP to audit the Companys restated
consolidated financial statements for fiscal 2000 and 1999. On
February 19, 2002, the Company filed an amended
Form 10-K (the 10-K/A) which included the
restated financial statements for fiscal 2000 and fiscal 1999.
The restatement adjustments reflected for the consolidated
balance sheets at April 30, 2001 and 2000 include the
combined effect of the restatement adjustments for fiscal 2000
and fiscal 1999, respectively, which are restated in the 10-K/A.

The Company has been in contact with the staff of
the Securities and Exchange Commission (SEC)
concerning the status of the Audit Committee Investigation. The
Company has been advised that the SEC is conducting an
investigation into the facts and circumstances giving rise to
the restatement, and the Company has been and intends to
continue cooperating with the SEC. The Company cannot predict
the outcome of such an investigation.

Following are the primary categories of
restatement adjustments to the Companys previously
reported financial results (millions of dollars):

|                                                        |                                      |                                                   |   |      |                |  |   |      |     | 
|------------------------------------------------------- | ------------------------------------ | ------------------------------------------------- | - | ---- | -------------- |  | - | ---- | --- | 
|                                                        |                                      | Quarter Ended                                     |   |      | Quarter Ended  | 
|                                                        |                                      | April 30, 2001                                    |   |      | April 30, 2000 | 
|                                                        |                                      |                                                   |   |      |                | 
|Adjustments (increasing) decreasing net income:         |                                      |                                                   |   |      |                |  |   |     
|                                                        | Deferred operating expenditures      |                                                   | $ | 8.7  |                |  | $ | 2.5  |    
|                                                        | Unrecorded trade payables and claims |                                                   |   | 3.5  |                |  |   | 0.8  |    
|                                                        | Acquisition accounting               |                                                   |   | 2.2  |                |  |   | 3.7  |    
|                                                        | Customer credits                     |                                                   |   | 0.3  |                |  |   | 1.2  |    
|                                                        | Asset impairment losses              |                                                   |   | 30.0 |                |  |   |     |    
|                                                        |                                      |                                                   |   |      |                | 
|                                                        |                                      | Total adjustments to pre-tax income (loss)        |   |      | 44.7           |  |   |      | 8.2 | 
|                                                        | Income taxes                         |                                                   |   | 11.4 |                |  |   | (4.8 | )  
|                                                        |                                      |                                                   |   |      |                | 
|                                                        |                                      | Total adjustment to net income (loss)             |   |      | 56.1           |  |   |      | 3.4 | 
|Adjustments decreasing stockholders equity
	(deficit): |                                      |                                                   |   |      |                |  |   |     
|                                                        | Tax effect of net investment hedges  |                                                   |   |     |                |  |   | 1.7  |    
|                                                        |                                      |                                                   |   |      |                | 
|                                                        |                                      | Total decrease in stockholders equity
	(deficit) |   | $    | 56.1           |  |   | $    | 5.1 | 
|                                                        |                                      |                                                   |   |      |                | 

7



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND
SUBSIDIARIES


Notes to Consolidated Financial Statements
 (Continued)

Three Months Ended April 30, 2001 and
2000


(Unaudited)


(Millions of Dollars Unless Otherwise
Stated)




(2) Restatement of Consolidated Financial
Statements  (Continued)


Descriptions of the major components of the
restatement adjustments for the first quarter of fiscal 2001 and
2000 are as follows:

Adjustments
Affecting Net Income (Loss)

Deferred
Operating Expenditures

The Company determined that certain costs and
expenses, primarily related to freight, payroll,
non-reimbursable tooling, and other operating costs and
expenses, were improperly capitalized or deferred.

Unrecorded
Trade Payables and Claims

The Company determined that it did not record
liabilities primarily for maintenance parts purchases, temporary
labor, costs for exceeding certain permitted environmental
emissions and other operating supplies.

Acquisition
Accounting

The accounting for certain acquisitions did not
appropriately reflect the fair values of assets acquired and
liabilities assumed in accordance with generally accepted
accounting principles as follows:



| |   |                                                                                                                                                                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In connection with certain acquisitions,
	including the acquisition of CMI International, Inc., the
	Company recorded an accrued liability for unfavorable customer
	contracts which could not be substantiated. Additionally, the
	Company did not record the fair value of acquired supplies
	inventory.
|
| |  | In connection with the acquisition of Lemmerz
	Holding GmbH, the Company recorded an accrued liability for
	restructuring costs. The restructuring plan did not meet the
	conditions regarding the period within which the plan was
	required to be finalized.                                            

Amounts previously charged against these accrued
liabilities are reflected as operating expenses in the restated
consolidated statements of operations.

Customer
Credits

The Company determined that it did not record
certain customer pricing adjustments.

Asset
Impairment Losses

As a consequence of the notifications received in
April 2001 by the Company from certain customers of its
Petersburg, Michigan manufacturing facility regarding
significantly lower future product orders and the failure to
obtain adequate customer support required to relocate
production, management should have revised its estimate of
future undiscounted cash flows expected to be generated by the
facility. The Company concluded that this estimated amount was
less than the carrying value of the long-lived assets related to
the Petersburg facility and, accordingly, recognized an
impairment charge of $28.5 million in the three months ended
April 30, 2001.

An additional impairment loss was recognized
related to the abandonment of plans to continue to invest in the
start-up of certain single-purpose equipment at another facility.

8



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND
SUBSIDIARIES


Notes to Consolidated Financial Statements
 (Continued)

Three Months Ended April 30, 2001 and
2000


(Unaudited)


(Millions of Dollars Unless Otherwise
Stated)


(2) Restatement of Consolidated Financial
Statements  (Continued)

Income
Tax Adjustments

The restatement adjustments discussed above
affecting earnings (loss) from operations and acquisition
accounting also result in adjustments to income taxes in the
appropriate period. Additionally, in view of the substantial
doubt regarding the Companys ability to continue as a
going concern, the Company cannot conclude that it is more
likely than not that the benefits of certain deferred tax assets
will be realized. Accordingly, the valuation allowance that was
established in fiscal 2000 was increased in the quarter ended
April 30, 2001. The tax-effect of the change in the fair
value of the net investment hedges was offset by a reversal of
the deferred tax asset valuation allowance, such that there was
no net tax effect in the quarter ended April 30, 2001.

Adjustments
Directly Affecting Stockholders Equity
(Deficit)

The restatement adjustment affecting
stockholders equity recognizes the deferred income tax
liability in the first quarter of fiscal 2000 related to
cross-currency interest rate swap agreements to hedge a portion
of the Companys net investment in foreign subsidiaries.
The deferred income tax charge was recorded in the accumulated
other comprehensive income section in consolidated
stockholders equity (deficit) as part of the restatement.
There was no net tax effect related to net investment hedges in
the quarter ended April 30, 2001.

Reclassifications

For purposes of these consolidated financial
statements, certain reclassifications have been made to conform
presentation as follows:



| |   |                                                                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | All amounts outstanding with respect to the
	Credit Agreement and senior subordinated notes outstanding at
	April 30, 2001, as more fully discussed in Note (3)
	are classified as a current liability.               
|
| |  | The common stock subject to put agreement was
	reclassified from additional paid in capital at April 30,
	2000 as previously reported.                                                                                
|
| |  | Certain non-current deferred income tax assets
	and liabilities as previously reported at April 30, 2001
	and 2000 were reclassified either as part of the previously
	reported amounts or as restatement adjustments.

These reclassifications, which did not affect
previously reported net income (loss), have been made to the
consolidated financial statements and are included in the
accompanying tables.

9



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND
SUBSIDIARIES


Notes to Consolidated Financial Statements
 (Continued)

Three Months Ended April 30, 2001 and
2000


(Unaudited)


(Millions of Dollars Unless Otherwise
Stated)




(2) Restatement of Consolidated Financial
Statements  (Continued)


Consolidated Statement of Operations

(Millions of dollars, except per share
amounts)


|                                                  |                                                   |                              |       |       |              |   |       |          |   |   |       |       |  
|------------------------------------------------- | ------------------------------------------------- | ---------------------------- | ----- | ----- | ------------ | - | ----- | -------- | - | - | ----- | ----- | -
|                                                  |                                                   |                             
|                                                  |                                                   | Quarter Ended April 30, 2001 |      
|                                                  |                                                   |                              |      
|                                                  |                                                   | As                           |       |       |             
|                                                  |                                                   | Previously                   |       |       |              |   | As    |         
|                                                  |                                                   | Reported                     |       |       | Restatements |   |       | Restated |  
|                                                  |                                                   |                              |       |       |              |   |       |          |  
|Net sales                                         |                                                   | $                            | 541.4 |       |              | $ | (0.5  | )        |   | $ | 540.9 |      
|Cost of goods sold                                |                                                   |                              | 469.5 |       |              |   | 13.8  |          |   |   | 483.3 |      
|                                                  |                                                   |                              |       |       |              |   |       |          |  
|                                                  | Gross profit                                      |                              |       | 71.9  |              |   |       | (14.3    | ) |   |       | 57.6  |  
|Marketing, general and administration             |                                                   |                              | 25.1  |       |              |   | 1.1   |          |   |   | 26.2  |      
|Engineering and product development               |                                                   |                              | 5.9   |       |              |   |      |          |   |   | 5.9   |      
|Amortization of intangible assets                 |                                                   |                              | 7.0   |       |              |   | (0.3  | )        |   |   | 6.7   |      
|Equity in losses of joint ventures                |                                                   |                              | 0.4   |       |              |   |      |          |   |   | 0.4   |      
|Asset impairments and other restructuring charges |                                                   |                              |      |       |              |   | 31.0  |          |   |   | 31.0  |      
|Other income, net                                 |                                                   |                              | (0.2  | )     |              |   |      |          |   |   | (0.2  | )    
|                                                  |                                                   |                              |       |       |              |   |       |          |  
|                                                  | Earnings (loss) from operations                   |                              |       | 33.7  |              |   |       | (46.1    | ) |   |       | (12.4 | )
|Interest expense, net                             |                                                   |                              | 45.6  |       |              |   | 1.4   |          |   |   | 44.2  |      
|                                                  |                                                   |                              |       |       |              |   |       |          |  
|                                                  | Loss before taxes on income and minority interest |                              |       | (11.9 | )            |   |       | (44.7    | ) |   |       | (56.6 | )
|Income tax (benefit) provision                    |                                                   |                              | (5.1  | )     |              |   | 11.4  |          |   |   | 6.3   |      
|                                                  |                                                   |                              |       |       |              |   |       |          |  
|                                                  | Loss before minority interest                     |                              |       | (6.8  | )            |   |       | (56.1    | ) |   |       | (62.9 | )
|Minority interest                                 |                                                   |                              | 0.8   |       |              |   |      |          |   |   | 0.8   |      
|                                                  |                                                   |                              |       |       |              |   |       |          |  
|                                                  | Net loss                                          |                              | $     | (7.6  | )            |   | $     | (56.1    | ) |   | $     | (63.7 | )
|                                                  |                                                   |                              |       |       |              |   |       |          |  
|Basic net loss per share                          |                                                   | $                            | (0.27 | )     |              | $ | (1.97 | )        |   | $ | (2.24 | )    
|                                                  |                                                   |                              |       |       |              |   |       |          |  
|Diluted net loss per share                        |                                                   | $                            | (0.27 | )     |              | $ | (1.97 | )        |   | $ | (2.24 | )    
|                                                  |                                                   |                              |       |       |              |   |       |          |  

10



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND
SUBSIDIARIES


Notes to Consolidated Financial Statements
 (Continued)

Three Months Ended April 30, 2001 and
2000


(Unaudited)


(Millions of Dollars Unless Otherwise
Stated)




(2) Restatement of Consolidated Financial
Statements  (Continued)


Consolidated Balance Sheet

(Millions of dollars, except share
amounts)


|                                                |                                          |                                                       |         |       |              |  |          |          |         |   |         |         |         |  
|----------------------------------------------- | ---------------------------------------- | ----------------------------------------------------- | ------- | ----- | ------------ |  | -------- | -------- | ------- | - | ------- | ------- | ------- | -
|                                                |                                          |                                                      
|                                                |                                          | As of April 30, 2001                                  |        
|                                                |                                          |                                                       |        
|                                                |                                          | As                                                    |         |       |             
|                                                |                                          | Previously                                            |         |       |              |  | As       |         
|                                                |                                          | Reported                                              |         |       | Restatements |  |          | Restated |        
|                                                |                                          |                                                       |         |       |              |  |          |          |        
|ASSETS                                          |                                          |                                                       |         |       |              |  |          |          |         |   |         |        
|Current assets:                                 |                                          |                                                       |         |       |              |  |          |          |         |   |         |        
|                                                | Cash and cash equivalents                |                                                       | $       | 28.9  |              |  | $        |         |         |   | $       | 28.9    |        
|                                                | Receivables                              |                                                       |         | 266.3 |              |  |          | (14.2    | )       |   |         | 252.1   |        
|                                                | Inventories                              |                                                       |         | 191.9 |              |  |          | 16.3     |         |   |         | 208.2   |        
|                                                | Deferred tax assets                      |                                                       |         | 42.4  |              |  |          | (20.5    | )       |   |         | 21.9    |        
|                                                | Prepaid expenses and other               |                                                       |         | 21.2  |              |  |          | (5.6     | )       |   |         | 15.6    |        
|                                                |                                          |                                                       |         |       |              |  |          |          |        
|                                                |                                          | Total current assets                                  |         |       | 550.7        |  |          |          | (24.0   | ) |         |         | 526.7   |  
|Property, plant and equipment, net              |                                          |                                                       | 1,115.1 |       |              |  | (60.1    | )        |         |   | 1,055.0 |        
|Deferred tax assets                             |                                          |                                                       | 102.2   |       |              |  | (80.7    | )        |         |   | 21.5    |        
|Goodwill and other assets                       |                                          |                                                       | 1,033.5 |       |              |  | (89.5    | )        |         |   | 944.0   |        
|                                                |                                          |                                                       |         |       |              |  |          |          |        
|                                                |                                          | Total assets                                          |         | $     | 2,801.5      |  |          | $        | (254.3  | ) |         | $       | 2,547.2 |  
|                                                |                                          |                                                       |         |       |              |  |          |          |        
|LIABILITIES AND STOCKHOLDERS EQUITY
	(DEFICIT) |                                          |                                                       |         |       |              |  |          |         
|Current liabilities:                            |                                          |                                                       |         |       |              |  |          |          |         |   |         |        
|                                                | Bank borrowings                          |                                                       | $       | 81.9  |              |  | $        |         |         |   | $       | 81.9    |        
|                                                | Current portion of long-term debt        |                                                       |         | 91.4  |              |  |          | 1,583.8  |         |   |         | 1,675.2 |        
|                                                | Accounts payable and accrued liabilities |                                                       |         | 437.6 |              |  |          | 19.8     |         |   |         | 457.4   |        
|                                                |                                          |                                                       |         |       |              |  |          |          |        
|                                                |                                          | Total current liabilities                             |         |       | 610.9        |  |          |          | 1,603.6 |   |         |         | 2,214.5 |  
|Long-term debt, net of current portion          |                                          |                                                       | 1,671.2 |       |              |  | (1,583.7 | )        |         |   | 87.5    |        
|Deferred tax liabilities                        |                                          |                                                       | 100.2   |       |              |  | (27.9    | )        |         |   | 72.3    |        
|Pension and other long-term liabilities         |                                          |                                                       | 266.9   |       |              |  | (13.4    | )        |         |   | 253.5   |        
|Minority interest                               |                                          |                                                       | 10.6    |       |              |  |         |          |         |   | 10.6    |        
|                                                |                                          |                                                       |         |       |              |  |          |          |        
|                                                |                                          | Total liabilities                                     |         |       | 2,659.8      |  |          |          | (21.4   | ) |         |         | 2,638.4 |  
|Commitments and contingencies                   |                                          |                                                       |         |       |              |  |          |          |         |   |         |        
|Stockholders (deficit) equity:                 |                                          |                                                       |         |       |              |  |          |          |         |   |         |        
|                                                | Preferred stock                          |                                                       |         |      |              |  |          |         |         |   |         |        |        
|                                                | Common stock:                            |                                                       |         |       |              |  |          |          |         |   |         |         |        
|                                                |                                          | Voting                                                |         |       | 0.3          |  |          |          |        |   |         |         | 0.3     |  
|                                                |                                          | Nonvoting                                             |         |       |             |  |          |          |        |   |         |         |        |  
|                                                | Additional paid in capital               |                                                       |         | 237.1 |              |  |          | (2.0     | )       |   |         | 235.1   |        
|                                                | Common stock in treasury at cost         |                                                       |         | (26.3 | )            |  |          | 0.6      |         |   |         | (25.7   | )      
|                                                | Retained earnings (accumulated deficit)  |                                                       |         | 8.6   |              |  |          | (218.0   | )       |   |         | (209.4  | )      
|                                                | Accumulated other comprehensive loss     |                                                       |         | (78.0 | )            |  |          | (13.5    | )       |   |         | (91.5   | )      
|                                                |                                          |                                                       |         |       |              |  |          |          |        
|                                                |                                          | Total stockholders equity (deficit)                  |         |       | 141.7        |  |          |          | (232.9  | ) |         |         | (91.2   | )
|                                                |                                          |                                                       |         |       |              |  |          |          |        
|                                                |                                          | Total liabilities and stockholders equity
	(deficit) |         | $     | 2,801.5      |  |          | $        | (254.3  | ) |         | $       | 2,547.2 |  
|                                                |                                          |                                                       |         |       |              |  |          |          |        

11



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND
SUBSIDIARIES


Notes to Consolidated Financial Statements
 (Continued)

Three Months Ended April 30, 2001 and
2000


(Unaudited)


(Millions of Dollars Unless Otherwise
Stated)




(2) Restatement of Consolidated Financial
Statements  (Continued)


Consolidated Statement of Operations

(Millions of dollars, except per share
amounts)


|                                                  |                                                        |                              |       |       |              |   |       |          |   |   |       |      | 
|------------------------------------------------- | ------------------------------------------------------ | ---------------------------- | ----- | ----- | ------------ | - | ----- | -------- | - | - | ----- | ---- | 
|                                                  |                                                        |                             
|                                                  |                                                        | Quarter Ended April 30, 2000 |      
|                                                  |                                                        |                              |      
|                                                  |                                                        | As                           |       |       |             
|                                                  |                                                        | Previously                   |       |       |              |   | As    |         
|                                                  |                                                        | Reported                     |       |       | Restatements |   |       | Restated |  
|                                                  |                                                        |                              |       |       |              |   |       |          |  
|Net sales                                         |                                                        | $                            | 594.8 |       |              | $ | (1.2  | )        |   | $ | 593.6 |     
|Cost of goods sold                                |                                                        |                              | 492.9 |       |              |   | 6.4   |          |   |   | 499.3 |     
|                                                  |                                                        |                              |       |       |              |   |       |          |  
|                                                  | Gross profit                                           |                              |       | 101.9 |              |   |       | (7.6     | ) |   |       | 94.3 | 
|Marketing, general and administration             |                                                        |                              | 24.5  |       |              |   | 0.3   |          |   |   | 24.8  |     
|Engineering and product development               |                                                        |                              | 6.2   |       |              |   |      |          |   |   | 6.2   |     
|Amortization of intangible assets                 |                                                        |                              | 7.2   |       |              |   | (0.2  | )        |   |   | 7.0   |     
|Equity in losses of joint ventures                |                                                        |                              | (1.1  | )     |              |   |      |          |   |   | (1.1  | )   
|Asset impairments and other restructuring charges |                                                        |                              |      |       |              |   | 0.5   |          |   |   | 0.5   |     
|Other (income) expense, net                       |                                                        |                              | (2.4  | )     |              |   |      |          |   |   | (2.4  | )   
|                                                  |                                                        |                              |       |       |              |   |       |          |  
|                                                  | Earnings from operations                               |                              |       | 67.5  |              |   |       | (8.2     | ) |   |       | 59.3 | 
|Interest expense, net                             |                                                        |                              | 38.8  |       |              |   |      |          |   |   | 38.8  |     
|                                                  |                                                        |                              |       |       |              |   |       |          |  
|                                                  | Earnings before taxes on income and minority
	interest |                              |       | 28.7  |              |   |       | (8.2     | ) |   |       | 20.5 | 
|Income tax provision                              |                                                        |                              | 12.1  |       |              |   | (4.8  | )        |   |   | 7.3   |     
|                                                  |                                                        |                              |       |       |              |   |       |          |  
|                                                  | Earnings before minority interest                      |                              |       | 16.6  |              |   |       | (3.4     | ) |   |       | 13.2 | 
|Minority interest                                 |                                                        |                              | 0.9   |       |              |   |      |          |   |   | 0.9   |     
|                                                  |                                                        |                              |       |       |              |   |       |          |  
|                                                  | Net income                                             |                              | $     | 15.7  |              |   | $     | (3.4     | ) |   | $     | 12.3 | 
|                                                  |                                                        |                              |       |       |              |   |       |          |  
|Basic net income per share                        |                                                        | $                            | 0.52  |       |              | $ | (0.11 | )        |   | $ | 0.41  |     
|                                                  |                                                        |                              |       |       |              |   |       |          |  
|Diluted net income per share                      |                                                        | $                            | 0.51  |       |              | $ | (0.11 | )        |   | $ | 0.40  |     
|                                                  |                                                        |                              |       |       |              |   |       |          |  

12



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND
SUBSIDIARIES


Notes to Consolidated Financial Statements
 (Continued)

Three Months Ended April 30, 2001 and
2000


(Unaudited)


(Millions of Dollars Unless Otherwise
Stated)




(2) Restatement of Consolidated Financial
Statements  (Continued)


Consolidated Balance Sheet

(Millions of dollars, except share
amounts)


|                                        |                                          |                                            |         |       |              |  |        |          |       |   |         |       |         | 
|--------------------------------------- | ---------------------------------------- | ------------------------------------------ | ------- | ----- | ------------ |  | ------ | -------- | ----- | - | ------- | ----- | ------- | 
|                                        |                                          |                                           
|                                        |                                          | As of April 30, 2000                       |        
|                                        |                                          |                                            |        
|                                        |                                          | As                                         |         |       |             
|                                        |                                          | Previously                                 |         |       |              |  | As     |         
|                                        |                                          | Reported                                   |         |       | Restatements |  |        | Restated |      
|                                        |                                          |                                            |         |       |              |  |        |          |      
|ASSETS                                  |                                          |                                            |         |       |              |  |        |          |       |   |         |      
|Current assets:                         |                                          |                                            |         |       |              |  |        |          |       |   |         |      
|                                        | Cash and cash equivalents                |                                            | $       | 40.4  |              |  | $      |         |       |   | $       | 40.4  |        
|                                        | Receivables                              |                                            |         | 212.9 |              |  |        | (8.3     | )     |   |         | 204.6 |        
|                                        | Inventories                              |                                            |         | 190.6 |              |  |        | 17.6     |       |   |         | 208.2 |        
|                                        | Deferred tax assets                      |                                            |         |      |              |  |        | 32.2     |       |   |         | 32.2  |        
|                                        | Prepaid expenses and other               |                                            |         | 11.8  |              |  |        | (1.2     | )     |   |         | 10.6  |        
|                                        |                                          |                                            |         |       |              |  |        |          |      
|                                        |                                          | Total current assets                       |         |       | 455.7        |  |        |          | 40.3  |   |         |       | 496.0   | 
|Property, plant and equipment, net      |                                          |                                            | 1,172.2 |       |              |  | (6.0   | )        |       |   | 1,166.2 |      
|Deferred tax assets                     |                                          |                                            | 128.7   |       |              |  | (101.3 | )        |       |   | 27.4    |      
|Goodwill and other assets               |                                          |                                            | 1,048.1 |       |              |  | (9.7   | )        |       |   | 1,038.4 |      
|                                        |                                          |                                            |         |       |              |  |        |          |      
|                                        |                                          | Total assets                               |         | $     | 2,804.7      |  |        | $        | (76.7 | ) |         | $     | 2,728.0 | 
|                                        |                                          |                                            |         |       |              |  |        |          |      
|LIABILITIES AND STOCKHOLDERS
	EQUITY  
|Current liabilities:                    |                                          |                                            |         |       |              |  |        |          |       |   |         |      
|                                        | Bank borrowings                          |                                            | $       | 87.3  |              |  | $      |         |       |   | $       | 87.3  |        
|                                        | Current portion of long-term debt        |                                            |         | 61.5  |              |  |        |         |       |   |         | 61.5  |        
|                                        | Accounts payable and accrued liabilities |                                            |         | 464.2 |              |  |        | 35.1     |       |   |         | 499.3 |        
|                                        |                                          |                                            |         |       |              |  |        |          |      
|                                        |                                          | Total current liabilities                  |         |       | 613.0        |  |        |          | 35.1  |   |         |       | 648.1   | 
|Long-term debt, net of current portion  |                                          |                                            | 1,532.0 |       |              |  |       |          |       |   | 1,532.0 |      
|Deferred tax liabilities                |                                          |                                            | 114.4   |       |              |  | (52.9  | )        |       |   | 61.5    |      
|Pension and other long-term liabilities |                                          |                                            | 306.5   |       |              |  | (30.6  | )        |       |   | 275.9   |      
|Minority interest                       |                                          |                                            | 13.7    |       |              |  |       |          |       |   | 13.7    |      
|                                        |                                          |                                            |         |       |              |  |        |          |      
|                                        |                                          | Total liabilities                          |         |       | 2,579.6      |  |        |          | (48.4 | ) |         |       | 2,531.2 | 
|Commitments and contingencies           |                                          |                                            |         |       |              |  |        |          |       |   |         |      
|Common stock subject to put agreement   |                                          |                                            | 8.5     |       |              |  |       |          |       |   | 8.5     |      
|Stockholders equity:                   |                                          |                                            |         |       |              |  |        |          |       |   |         |      
|                                        | Preferred stock                          |                                            |         |      |              |  |        |         |       |   |         |      |        
|                                        | Common stock:                            |                                            |         |       |              |  |        |          |       |   |         |       |        
|                                        |                                          | Voting                                     |         |       | 0.3          |  |        |          |      |   |         |       | 0.3     | 
|                                        |                                          | Nonvoting                                  |         |       |             |  |        |          |      |   |         |       |        | 
|                                        | Additional paid in capital               |                                            |         | 231.4 |              |  |        |         |       |   |         | 231.4 |        
|                                        | Retained earnings                        |                                            |         | 73.8  |              |  |        | (21.0    | )     |   |         | 52.8  |        
|                                        | Accumulated other comprehensive loss     |                                            |         | (88.9 | )            |  |        | (7.3     | )     |   |         | (96.2 | )      
|                                        |                                          |                                            |         |       |              |  |        |          |      
|                                        |                                          | Total stockholders equity                 |         |       | 216.6        |  |        |          | (28.3 | ) |         |       | 188.3   | 
|                                        |                                          |                                            |         |       |              |  |        |          |      
|                                        |                                          | Total liabilities and stockholders equity |         | $     | 2,804.7      |  |        | $        | (76.7 | ) |         | $     | 2,728.0 | 
|                                        |                                          |                                            |         |       |              |  |        |          |      

13



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND
SUBSIDIARIES


Notes to Consolidated Financial Statements
 (Continued)

Three Months Ended April 30, 2001 and
2000


(Unaudited)


(Millions of Dollars Unless Otherwise
Stated)


(3) Bank Borrowings and Long-Term
Debt

Refinancing

On June 21, 2001, the Company received
formal approval for Consent and Amendment No. 5 to the
Credit Agreement. Such amendment provided for and/or permits,
among other things, the issuance and sale of certain senior
unsecured notes (the Senior Notes) by the Company, a
receivables securitization transaction, and changes to the
various financial covenants contained in the Credit Agreement in
the event that the issuance and sale of the Senior Notes does
occur. The amendment also provided the Company with the option
of establishing a new B tranche of term loans (the
B Term Loan) under the Credit Agreement. The
amendment also provides for the net cash proceeds of the
issuance and sale of the Senior Notes to be applied as follows:
(i) the first $140,000,000, to prepay outstanding term
loans (in direct order of stated maturity) under the Credit
Agreement; (ii) the next $60,000,000, at the Companys
option, to prepay indebtedness of the Companys foreign
subsidiaries; (iii) the next $50,000,000, to prepay
outstanding term loans (in direct order of stated maturity)
under the Credit Agreement; (iv) the next $50,000,000, at
the Companys option, to repurchase or redeem a portion of
the Companys existing senior subordinated notes; and
(v) the remainder, if any, to prepay outstanding term loans
(in direct order of stated maturity) and then to reduce the
revolving credit commitments under the Credit Agreement.

On June 22, 2001, the Company received
$291.1 million in net proceeds from the issuance of
11 7/8% senior unsecured notes due 2006 in the original
principal amount of $300 million (the
11 7/8% Notes). In addition, on
July 2, 2001, the Company received $144.3 million in net
proceeds from the issuance of the B Term Loan. These
aggregate net proceeds totaled $435.4 million and were used as
follows ($ in millions):

|                                                                                                                         |       |   |       |       | 
|------------------------------------------------------------------------------------------------------------------------ | ----- | - | ----- | ----- | 
|Permanent reduction of Credit Agreement
	indebtedness with a principal balance of $334.3, plus $2.2 in
	accrued interest |       | $ | 336.5 |      
|Payment on foreign indebtedness with a principal
	balance of $47.0                                                       |       |   | 47.0  |      
|Repurchase of certain Senior Subordinated Notes
	with a face value of $47.2, plus $1.0 in accrued interest               |       |   | 37.6  |      
|Payment of fees and expenses on the above                                                                                |       |   | 0.8   |      
|Remaining cash proceeds held by Company                                                                                  |       |   | 13.5  |      
|                                                                                                                         |       |   |      
|                                                                                                                         | Total |   | $     | 435.4 | 
|                                                                                                                         |       |   |      

The 11 7/8% Notes mature on June 15,
2006 and require interest payments semi-annually on each
June 15 and December 15 commencing December 15,
2001. The 11 7/8% Notes may not be redeemed prior to
June 15, 2005; provided, however, that the Company may, at
any time and from time to time prior to June 15, 2004,
redeem up to 35% of the aggregate principal amount of the
11 7/8% Notes at a price equal to 111.875% of the aggregate
principal amount so redeemed, plus accrued and unpaid interest
to the date of redemption, with the Net Cash Proceeds (as
defined) of one or more Equity Offerings (as defined), provided
that at least $195.0 million aggregate principal amount of
the 11 7/8% Notes remain outstanding. On or after
June 15, 2005, the Company may, at its option, redeem the
11 7/8% Notes upon the terms and conditions set forth in
the indenture.

The 11 7/8% Notes rank equally to all other
existing and future senior debt but are effectively subordinated
to the borrowings under the Credit Agreement to the extent of
collateral securing the Credit Agreement. The 11 7/8% Notes
are effectively subordinated to all liabilities (including trade
and intercompany obligations) of the Companys subsidiaries
which are not guarantors of the Credit Agreement and the
B Term Loan. The indenture governing the 11 7/8% Notes
provide for certain restrictions regarding additional debt,
dividends and

14



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND
SUBSIDIARIES


Notes to Consolidated Financial Statements
 (Continued)

Three Months Ended April 30, 2001 and
2000


(Unaudited)


(Millions of Dollars Unless Otherwise
Stated)




(3) Bank Borrowings and Long-Term
Debt  (Continued)


other distributions, additional stock of
subsidiaries, certain investments, liens, transactions with
affiliates, mergers, consolidations, and the transfer and sales
of assets. The indenture also provides that a holder of the
11 7/8% Notes may, under certain circumstances, have the
right to require that the Company repurchase such holders
11 7/8% Notes upon a change of control of the Company. The
11 7/8% Notes are unconditionally guaranteed as to the
payment of principal, premium, if any, and interest, jointly and
severally by the Companys material domestic subsidiaries.

Pursuant to an Exchange Offer Registration Rights
Agreement (the Registration Rights Agreement), the
Company agreed to use its best efforts to file and have declared
effective an Exchange Offer Registration Statement with respect
to an offer to exchange the 11 7/8% Notes for other notes
of the Company with terms substantially identical to the
11 7/8% Notes. The Company also agreed to consummate such
exchange offer on or prior to December 19, 2001. As a
result of the Chapter 11 Filings by the Debtors on
December 5, 2001, such registration has not occurred.

The B Term Loans amortize at the rate of 1%
of principal per year and mature in full on December 31,
2005 (at which time all remaining unpaid principal will be due
and payable). The B Term Loans rank equally with all other
loans outstanding under the Credit Agreement and share equally
in the guarantees and collateral granted by the Company and its
subsidiaries to secure the amounts outstanding under the Credit
Agreement. The B Term Loans are also subject to the same
covenants and events of default which govern all other loans
outstanding under the Credit Agreement.

The interest rates of the B Term Loans are,
at the option of the Company, based upon either an adjusted
eurocurrency rate (the eurocurrency rate) or the
rate which is equal to the highest of CIBCs prime rate,
the federal funds rate plus  1/2 of 1% and the base
certificate of deposit rate plus 1% (the ABR
rate), in each case plus an applicable margin. For
B Term Loans which bear interest at the eurocurrency rate,
the applicable margin is 5.0%, and for B Term Loans which
bear interest at the ABR rate, the applicable margin is 4.0%.
The Company may elect interest periods of one, two, three or six
months for eurocurrency loans. Interest is computed on the basis
of actual number of days elapsed in a year of 360 days (or
365 or 366 days, as the case may be, for ABR loans based on
the prime rate). Interest is payable at the end of each interest
period and, in any event, at least every three months.

The Credit Agreement, as amended, contains
certain financial covenants regarding interest coverage ratios,
fixed charge coverage ratios, leverage ratios and capital
spending limitations. If compliance with these covenants were
calculated using the Companys restated financial results
for the first quarter of fiscal 2001, certain of these covenants
as of April 30, 2001 would have been violated.

For purposes of these consolidated financial
statements, all amounts outstanding with respect to the Credit
Agreement and the senior subordinated notes outstanding at
April 30, 2001 are classified as a current liability as of
April 30, 2001. As more fully discussed above, certain
portions of the amounts outstanding at April 30, 2001 under
the Credit Agreement and the previous senior subordinated notes
were refinanced in the second quarter of fiscal 2001 with the
proceeds of the 11 7/8% Notes and the B Term Loan. The
amounts outstanding with respect to the 11 7/8% Notes and
the B Term Loan will be classified as a current liability
upon their issuance.

DIP
Facility

On December 17, 2001, the Company entered
into a Revolving Credit and Guaranty Agreement among the
Company, as borrower, certain subsidiaries of the Company, as
guarantors, the lenders parties thereto,

15



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND
SUBSIDIARIES


Notes to Consolidated Financial Statements
 (Continued)

Three Months Ended April 30, 2001 and
2000


(Unaudited)


(Millions of Dollars Unless Otherwise
Stated)




(3) Bank Borrowings and Long-Term
Debt  (Continued)


CIBC World Markets Corp., as lead arranger, Bank
of America, N.A. and Salomon Smith Barney, Inc., as syndication
agents, and Canadian Imperial Bank of Commerce, as
administrative agent for the lenders (the DIP
Agreement). Pursuant to the DIP Agreement, the Company has
access to a revolving credit facility (the DIP
Facility) not to exceed $200 million with a sub-limit
of $15 million for letters of credit. The Company received
Bankruptcy Court approval for the DIP Agreement on
December 21, 2001 (on an interim basis) and on
January 28, 2002 (on a final basis). The DIP Facility is
scheduled to terminate on the earlier of (a) the date of
the substantial consummation of a Plan of Reorganization and
(b) June 5, 2003 (eighteen months after the date of
the Chapter 11 filings). As of February 14, 2002, the
Company had $4.0 million in cash borrowings and had obtained
$2.7 million in letters of credit pursuant to the DIP Facility.

Proceeds of loans made under the DIP Facility
will be used for working capital and other general corporate
purposes of the Company and its subsidiaries, generally as set
forth in the Companys budget and otherwise as permitted
under the DIP Agreement and approved by the Bankruptcy Court.
The DIP Agreement permits the Company to make loans to, and
obtain letters of credit under the DIP Facility to support the
operations or obligations of, its foreign subsidiaries in
Germany and Mexico, in an aggregate principal amount not to
exceed $20 million at any one time outstanding, to fund capital
expenditures, required joint venture obligations, rebate
exposure of such foreign subsidiaries or costs incurred in
connection with plant closures, restructuring or the sale or
termination of businesses of foreign subsidiaries in Germany.
Such loans may be funded either from the Companys
operations or from borrowings under the DIP Facility.

Beginning January 31, 2002, the DIP Facility
requires compliance with monthly minimum consolidated and
domestic EBITDA tests and limits on capital expenditures. In
addition to the foregoing financial covenants, the DIP Agreement
imposes certain other restrictions on the Company and its
subsidiaries, including with respect to their ability to incur
liens, enter into mergers, incur indebtedness, give guarantees,
make investments, pay dividends or make other distributions and
dispose of assets.

The obligations of the Company and its subsidiary
guarantors under the DIP Facility have super-priority
administrative claim status as provided under the Bankruptcy
Code. Under the Bankruptcy Code, a super-priority claim is
senior to secured and unsecured pre-petition claims and all
administrative expenses incurred in the Chapter 11 case. In
addition, with certain exceptions (including a carve-out for
unpaid professional fees and disbursements), the DIP Facility
obligations are secured by (1) a first-priority lien on all
unencumbered pre- and post-petition property of the Company and
its subsidiary guarantors, (2) a first-priority priming
lien on all property of the Company and its subsidiary
guarantors that is encumbered by the existing liens securing the
Companys pre-petition secured lenders and (3) a
junior lien on all other property of the Company and its
subsidiary guarantors that is encumbered by pre-petition liens.

On January 15, 2002, the Company and the
initial lenders under the DIP Agreement entered into a First
Amendment to the DIP Agreement. This First Amendment finalized
the terms of the borrowing base formula of eligible assets which
is used to calculate the amounts which the Company is able to
borrow under the DIP Facility. The amount available under the
facility as of February 14, 2002, after taking into account
the aforementioned borrowings and letters of credit, was
$90.1 million.

Borrowings under the DIP Facility may be either
ABR loans or Eurodollar loans. ABR loans are priced at 2.00% per
annum plus the greatest of (i) the prime rate,
(ii) the base CD rate plus 1.0% per annum, and
(iii) the federal funds effective rate plus 0.5% per annum.
Eurodollar loans under the DIP Facility are priced at LIBOR plus
3.50% per annum. In addition, the Company pays a commitment fee
of 0.75% per annum on

16



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND
SUBSIDIARIES


Notes to Consolidated Financial Statements
 (Continued)

Three Months Ended April 30, 2001 and
2000


(Unaudited)


(Millions of Dollars Unless Otherwise
Stated)




(3) Bank Borrowings and Long-Term
Debt  (Continued)


the unused amount of the DIP Facility commitment,
payable monthly in arrears. Letters of credit are priced at
3.50% per annum on the undrawn stated amount in addition to a
fronting fee of 0.25% per annum.

The DIP Facility provides for the post-petition
cash payment at certain intervals of interest accruing under the
Companys pre-petition credit agreement if certain tests
are satisfied relating to the liquidity position and earnings of
the Company and its subsidiaries, and the repatriation of funds
from foreign subsidiaries.

The principal sources of liquidity for the
Companys future operating, capital expenditure, facility
closure and other restructuring requirements are expected to be
(i) cash flows from operations, (ii) proceeds from the
sale of non-core assets and business, (iii) borrowings
under various foreign bank and government loans and
(iv) and borrowings under the DIP Facility. While the
Company expects that such sources will meet these requirements,
there can be no assurances that such sources will prove to be
sufficient.

(4) Derivative Financial
Instruments

In June 1998, June 1999 and
June 2000, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting
Standards (SFAS) No. 133, Accounting for
Derivative Instruments and Hedging Activities,
SFAS 137, Accounting for Derivative Instruments and
Hedging Activities  Deferral of the Effective Date of
FASB Statement No. 133 and SFAS 138,
Accounting for Certain Derivative Instruments and Certain
Hedging Activities, an amendment of FASB Statement
No. 133. These Statements establish accounting and
reporting standards requiring that every derivative instrument
(including certain derivative instruments embedded in other
contracts) be recorded in the balance sheet as either an asset
or liability measured at its fair value. These Statements
require that changes in the derivatives fair value be
recognized currently in earnings unless specific hedge
accounting criteria are met.

Special accounting for qualifying hedges allows a
derivatives gains and losses to offset related results on
the hedged item in the income statement or as part of
accumulated other comprehensive income, and requires that a
company must formally document, designate, and assess the
effectiveness of transactions that receive hedge accounting.
This accounting is effective for fiscal years beginning after
June 15, 2000. The Company adopted this standard on
February 1, 2001 and adoption did not have a material
impact on the Companys financial position or results of
operations.

The Company has significant investments in
foreign subsidiaries. The majority of these investments are in
Europe wherein the Euro is the functional currency. As a result,
the Company is exposed to fluctuations in exchange rates between
the Euro and the U.S. Dollar. To reduce this exposure, the
Company has entered into cross-currency interest rate swap
agreements and forward currency hedges. At both April 30,
2001 and January 31, 2001, the Company held $281 million
notional amount of cross-currency interest rate swaps and
forward currency hedges, which are recorded in the accompanying
consolidated balance sheets in goodwill and other assets at fair
value of approximately $15.6 million and $0.4 million,
respectively. The fair value of the Companys
cross-currency interest rate swaps and forward currency hedges
is the estimated amount the Company would receive or pay to
terminate the agreement based on third party market quotes. The
Company has designated these swap agreements as hedges of the
foreign currency exposure of its net investment in foreign
operations. In addition, the Company has designated a term loan,
totaling 146.5 million Deutschemarks as a hedge of foreign
currency exposure of its net investment in its German operations.

The Company records the gain or loss on the
derivative financial instruments designated as hedges of the
foreign currency exposure of its net investment in foreign
operations as currency translation adjustments in Accumulated
Other Comprehensive Loss to the extent the hedges are effective.
The gain or loss on the

17



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND
SUBSIDIARIES


Notes to Consolidated Financial Statements
 (Continued)

Three Months Ended April 30, 2001 and
2000


(Unaudited)


(Millions of Dollars Unless Otherwise
Stated)




(4) Derivative Financial
Instruments  (Continued)


hedging instruments offset the change in currency
translation adjustments resulting from translating the foreign
operations financial statements from their respective
functional currency to the Dollar. In the first quarter of
fiscal 2001, the Company recorded a gain of $21.0 million, net
of tax of $8.1 million, on the instruments designated as
hedges in Accumulated Other Comprehensive Loss. As these
derivative financial instruments were accounted for as
qualifying hedges prior to adoption of SFAS No. 133, no
transition adjustment was recorded at the date of adoption.

(5) Inventories

The major classes of inventory are as follows:

|                         |       |             |      |       |             |   |      |       | 
|------------------------ | ----- | ----------- | ---- | ----- | ----------- | - | ---- | ----- | 
|                         |       | As Restated |      |       |            
|                         |       |             |      |       |            
|                         |       | April 30,   |      |       | January 31, |  
|                         |       | 2001        |      |       | 2001        |  
|                         |       |             |      |       |             |  
|Raw materials            |       | $           | 55.6 |       |             | $ | 62.3 |      
|Work-in-process          |       |             | 61.1 |       |             |   | 60.1 |      
|Finished goods           |       |             | 68.5 |       |             |   | 72.4 |      
|Spare parts and supplies |       |             | 23.0 |       |             |   | 22.5 |      
|                         |       |             |      |       |             |  
|                         | Total |             | $    | 208.2 |             |   | $    | 217.3 | 
|                         |       |             |      |       |             |  

(6) Property, plant and
equipment

The major classes of property, plant and
equipment are as follows:

|                         |                                   |             |         |         |             |   |         |         | 
|------------------------ | --------------------------------- | ----------- | ------- | ------- | ----------- | - | ------- | ------- | 
|                         |                                   | As Restated |         |         |            
|                         |                                   |             |         |         |            
|                         |                                   | April 30,   |         |         | January 31, |  
|                         |                                   | 2001        |         |         | 2001        |  
|                         |                                   |             |         |         |             |  
|Land                     |                                   | $           | 29.7    |         |             | $ | 31.2    |        
|Buildings                |                                   |             | 238.0   |         |             |   | 248.7   |        
|Machinery and equipment  |                                   |             | 1,109.0 |         |             |   | 1,134.9 |        
|                         |                                   |             |         |         |             |  
|                         |                                   |             | 1,376.7 |         |             |   | 1,414.8 |        
|Accumulated depreciation |                                   |             | (321.7  | )       |             |   | (310.0  | )      
|                         |                                   |             |         |         |             |  
|                         | Net property, plant and equipment |             | $       | 1,055.0 |             |   | $       | 1,104.8 | 
|                         |                                   |             |         |         |             |  

(7) Earnings per share

Basic earnings (loss) per share are calculated by
dividing net income (loss) by the weighted average number of
common shares outstanding. Diluted earnings (loss) per share are
computed by dividing net income (loss) by the diluted weighted
average shares outstanding. Diluted weighted average shares
assume the exercise of stock options and warrants.

18



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND
SUBSIDIARIES


Notes to Consolidated Financial Statements
 (Continued)

Three Months Ended April 30, 2001 and
2000


(Unaudited)


(Millions of Dollars Unless Otherwise
Stated)




(7) Earnings per share 
(Continued)


Shares outstanding for the three months ended
April 30, 2001 and 2000, were as follows (in thousands):

|                                          |                                             |      |        |        |      |  |        |        | 
|----------------------------------------- | ------------------------------------------- | ---- | ------ | ------ | ---- |  | ------ | ------ | 
|                                          |                                             | 2001 |        |        | 2000 | 
|                                          |                                             |      |        |        |      | 
|Basic weighted average shares outstanding |                                             |      | 28,455 |        |      |  | 30,356 |       
|Dilutive effect of options and warrants   |                                             |      |       |        |      |  | 520    |       
|                                          |                                             |      |        |        |      | 
|                                          | Diluted weighted average shares outstanding |      |        | 28,455 |      |  |        | 30,876 | 
|                                          |                                             |      |        |        |      | 

For the quarter ending April 30, 2001, all
options and warrants were excluded from the calculation of
diluted earnings (loss) per share as the effect was
anti-dilutive due to the net loss reflected for such quarter.
For the quarter ending April 30, 2000, approximately 3.3
million shares attributable to options and warrants were
excluded from the calculation of diluted earnings (loss) per
share as the effect was anti-dilutive.

(8) Comprehensive Income

SFAS No. 130, Reporting Comprehensive
Income, establishes standards for the reporting and
display of comprehensive income. Comprehensive income is defined
as all changes in a Companys net assets except changes
resulting from transactions with shareholders. It differs from
net income in that certain items currently recorded to equity
would be a part of comprehensive income.

The components of comprehensive loss for the
three months ended April 30, 2001 and 2000 are as follows:

|                                   |                          |             |       |       |      |   |       |      |  
|---------------------------------- | ------------------------ | ----------- | ----- | ----- | ---- | - | ----- | ---- | -
|                                   |                          |            
|                                   |                          | As Restated |      
|                                   |                          |             |      
|                                   |                          | 2001        |       |       | 2000 |  
|                                   |                          |             |       |       |      |  
|Net income (loss)                  |                          | $           | (63.7 | )     |      | $ | 12.3  |     
|Cumulative translation adjustments |                          |             | (5.7  | )     |      |   | (14.1 | )   
|                                   |                          |             |       |       |      |  
|                                   | Total comprehensive loss |             | $     | (69.4 | )    |   | $     | (1.8 | )
|                                   |                          |             |       |       |      |  

(9) Contingencies

Various lawsuits, claims and proceedings have
been or may be instituted or asserted against the Company,
including those pertaining to environmental, product liability,
patent infringement, and employee benefit matters. While the
amounts claimed may be substantial, the ultimate liability
cannot now be determined because of the considerable
uncertainties that exist. Therefore, it is possible that results
of operations or liquidity in a particular period could be
materially affected by certain contingencies. However, based on
facts currently available, management believes that the
disposition of matters that are pending or asserted will not
have a material adverse effect on the financial position of the
Company.

(10) Segment Reporting

The Company is organized based primarily on
markets served and products produced. Under this organization
structure, the Companys operating segments have been
aggregated into three reportable segments: Automotive Wheels,
Cast Components and Other. The Other category includes
Commercial Highway products, the corporate office and
elimination of intercompany activities, none of which meet the
requirements of being classified as an operating segment.

19



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND
SUBSIDIARIES


Notes to Consolidated Financial Statements
 (Continued)

Three Months Ended April 30, 2001 and
2000


(Unaudited)


(Millions of Dollars Unless Otherwise
Stated)


(10) Segment Reporting 
(Continued)

The following table represents revenues and other
financial information by business segment for the three months
ended April 30:

|                  |       |             |       |             |        |   |       |              |  |   |       |       |   |      |     |      |      |   |         |         |  |   |         |         | 
|----------------- | ----- | ----------- | ----- | ----------- | ------ | - | ----- | ------------ |  | - | ----- | ----- | - | ---- | --- | ---- | ---- | - | ------- | ------- |  | - | ------- | ------- | 
|                  |       |             |       |             |        |   |       |              |  |  
|                  |       |             |       | As Restated |        |   |      
|                  |       | As Restated |       |             |        |   |       | As Restated  | 
|                  |       |             |       |             |        |   |       |             
|                  |       |             |       | Net Income  |        |   |      
|                  |       | Revenue     |       |             | (loss) |   |       | Total Assets | 
|                  |       |             |       |             |        |   |       |              | 
|                  |       | 2001        |       |             | 2000   |   |       | 2001         |  |   | 2000  |       |   | 2001 |     |      | 2000 |  
|                  |       |             |       |             |        |   |       |              |  |   |       |       |   |      |     |      |      |  
|Automotive wheels |       | $           | 320.4 |             |        | $ | 362.9 |              |  | $ | (9.5  | )     |   | $    | 9.9 |      |      | $ | 1,330.8 |         |  | $ | 1,496.9 |        
|Cast components   |       |             | 176.9 |             |        |   | 179.8 |              |  |   | (4.0  | )     |   |      | 0.1 |      |      |   | 917.3   |         |  |   | 954.2   |        
|Other             |       |             | 43.6  |             |        |   | 50.9  |              |  |   | (50.2 | )     |   |      | 2.3 |      |      |   | 299.1   |         |  |   | 276.9   |        
|                  |       |             |       |             |        |   |       |              |  |   |       |       |   |      |     |      |      |  
|                  | Total |             | $     | 540.9       |        |   | $     | 593.6        |  |   | $     | (63.7 | ) |      | $   | 12.3 |      |   | $       | 2,547.2 |  |   | $       | 2,728.0 | 
|                  |       |             |       |             |        |   |       |              |  |   |       |       |   |      |     |      |      |  

(11) Subsequent Events

Chapter 11
Filings

On December 5, 2001, the Company, 30 of its
wholly-owned domestic subsidiaries and one wholly-owned Mexican
subsidiary (collectively, the Debtors) filed
voluntary petitions for reorganization (the
Chapter 11 Filings or the Filings)
under Chapter 11 of the Bankruptcy Code in the United
States Bankruptcy Court for the District of Delaware (the
Bankruptcy Court). The Chapter 11 Filings are
being jointly administered, for procedural purposes only, before
the Bankruptcy Court under Case No. 01-11490-MFW.

During the pendancy of these Filings, the Debtors
remain in possession of their properties and assets and
management of the Company continues to operate the businesses of
the Debtors as debtors-in-possession. As a debtor-in-possession,
the Company is authorized to operate the business of the
Debtors, but may not engage in transactions outside of the
ordinary course of business without the approval, after notice
and the opportunity for a hearing, of the Bankruptcy Court.

Shortly after the commencement of the
Chapter 11 Filings, on December 21, 2001, the
Bankruptcy Court granted interim approval for the Debtors to
obtain $45 million debtor-in-possession financing.
Subsequently, on January 28, 2002, the Bankruptcy Court
granted final approval to a $200 million
debtor-in-possession financing facility for the Debtors. The
Bankruptcy Court has approved payment of certain of the
Debtors pre-petition liabilities, such as employee wages,
benefits, and certain customer and freight programs. In
addition, the Bankruptcy Court authorized the Debtors to
maintain their employee benefit programs. Pension and savings
plan funds are in trusts and protected under federal
regulations. All required contributions are current in the
respective plans. The Debtors have received Bankruptcy Court
approval for the retention of legal, financial and management
consulting professionals, and are seeking Bankruptcy Court
approval for the retention of additional financial and
management consulting professionals, to advise the Debtors in
the bankruptcy proceedings and the restructuring of its
businesses.

Pursuant to the automatic stay provisions of
Section 362 of the Bankruptcy Code, actions to collect
pre-petition indebtedness and virtually all litigation against
the Debtors that was, or could have been, brought prior to the
commencement of the Chapter 11 Filings are stayed, and
other contractual obligations of the Debtors may not be enforced
against them. In addition, under Section 365 of the
Bankruptcy Code, subject to the approval of the Bankruptcy
Court, the Debtors may assume or reject executory contracts and
unexpired leases. Parties affected by these rejections may file
proofs of claim with the Bankruptcy Court in accordance with the
reorganization process. These claims for damages resulting from
the rejection of executory contracts or

20



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND
SUBSIDIARIES


Notes to Consolidated Financial Statements
 (Continued)

Three Months Ended April 30, 2001 and
2000


(Unaudited)


(Millions of Dollars Unless Otherwise
Stated)




(11) Subsequent Events 
(Continued)


unexpired leases will be subject to separate bar
dates, generally thirty days after entry of the order approving
the rejection. As of the date of this filing, the Debtors had
not yet completed their review of all contracts and leases for
assumption or rejection, but ultimately will assume or reject
all such contracts and leases. Generally, the Debtors have up to
120 days, or a longer period of time subject to approval by
the Bankruptcy Court, after the date of filing to assume or
reject executory contracts and certain leases. The Debtors
cannot presently determine or reasonably predict the ultimate
liability that may result from rejecting such contracts or
leases or from the filing of rejection damage claims, but such
rejections could result in additional liabilities subject to
compromise.

All liabilities subject to compromise are subject
to future adjustment depending on Bankruptcy Court action,
further developments with respect to disputed claims, or other
events. Under a confirmed plan of reorganization, all
pre-petition claims may be paid at amounts substantially less
than their allowed amounts. In light of the number of creditors
of the Debtors, the claims resolution process may take
considerable time to complete. Accordingly, the ultimate number
and amount of allowed claims is not presently known and, because
the settlement terms of such allowed claims is subject to a
confirmed plan of reorganization, the ultimate resolution with
respect to allowed claims is not presently ascertainable.

The consummation of a plan or plans of
reorganization is the principal objective of the Chapter 11
Filings. A plan of reorganization sets forth the means for
satisfying claims against and interests in the Company and its
Debtor subsidiaries, including the liabilities subject to
compromise. Generally, pre-petition liabilities are subject to
settlement under such a plan or plans of reorganization, which
must be voted upon by certain creditors and approved by the
Bankruptcy Court. As provided by the Bankruptcy Code, the
Debtors initially have the exclusive right for 120 days
(April 4, 2002), or a longer period of time subject to
approval by the Bankruptcy Court, to submit a plan or plans of
reorganization. The Debtors have retained Lazard Freres &
Co. LLC, as financial advisors and investment bankers for
the purpose of providing financial advisory and investment
banking services during the Chapter 11 reorganization
process. The Company anticipates that any plan or plans of
reorganization it may propose, if ultimately approved by the
Bankruptcy Court, would result in substantial dilution of the
interest of existing equity holders, so that they would hold
little, if any, meaningful stake in the reorganized enterprise.

Confirmation of a plan of reorganization is
subject to certain findings being made by the Bankruptcy Court,
all of which are required by the Bankruptcy Code. Subject to
certain exceptions set forth in the Bankruptcy Code,
confirmation of a plan of reorganization requires the approval
of the Bankruptcy Court and the affirmative vote of each
impaired class of creditors and equity security holders. The
Bankruptcy Court may confirm a plan notwithstanding the
non-acceptance of the plan by an impaired class of creditors or
equity security holders if certain requirements of the
Bankruptcy Code are met. There can be no assurance that a
reorganization plan or plans will be proposed by the Debtors or
confirmed by the Bankruptcy Court, or that any such plan or
plans will be consummated.

Currently, it is not possible to predict the
length of time the Company will operate under the protection of
Chapter 11 and the supervision of the Bankruptcy Court,
when the Company will file a plan or plans of reorganization
with the Bankruptcy Court, the outcome of the Chapter 11
proceedings in general, or the effect of the proceedings on the
business of the Company or on the interest of the various
creditors and stakeholders.

The Companys financial statements
commencing with the period that includes December 5, 2001,
the date of filing of the Chapter 11 proceedings, will be
presented in conformity with the AICPAs Statement of
Position 90-7, Financial Reporting By Entities In
Reorganization Under the Bankruptcy Code,

21



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND
SUBSIDIARIES


Notes to Consolidated Financial Statements
 (Continued)

Three Months Ended April 30, 2001 and
2000


(Unaudited)


(Millions of Dollars Unless Otherwise
Stated)




(11) Subsequent Events 
(Continued)


(SOP 90-7). The statement
requires a segregation of liabilities subject to compromise by
the Bankruptcy Court as of the bankruptcy filing date and
identification of all transactions and events that are directly
associated with the reorganization of the Company.

The accompanying consolidated financial
statements do not reflect: (a) the requirements of SOP
90-7, (b) the realizable value of assets on a liquidation
basis or their availability to satisfy liabilities;
(c) aggregate pre-petition liability amounts that may be
allowed for unrecorded claims or contingencies, or their status
or priority; (d) the effect of any changes to the
Debtors capital structure or in the Debtors business
operations as the result of an approved plan of reorganization;
or (e) adjustments to the carrying value of assets
(including goodwill and other intangibles) or liability amounts
that may be necessary as the result of actions by the Bankruptcy
Court.

Facility
Closures

In June 2001, the Company committed to a
plan to close its manufacturing facility in Petersburg,
Michigan, and in November 2001, committed to a plan to
close its manufacturing facility in Bowling Green, Kentucky.

The Company recorded asset impairment losses with
respect to the Petersburg facility of $28.5 million during the
first quarter of fiscal 2001 (see Note 2). In connection with
the closure of this facility (which commenced during
December 2001), the Company will record a restructuring
charge of $0.5 million during the fourth quarter of fiscal
2001. These restructuring charges relate to security and other
maintenance costs subsequent to the shutdown date, and are
expected to be paid during fiscal 2001 and 2002.

In connection with the closure of the Bowling
Green facility (which is planned to begin during
July 2002), the Company will record during the fourth
quarter of fiscal 2001 asset impairment losses of
$45.5 million and other restructuring charges of
$10.7 million. These restructuring charges relate to the
termination of leases and other closure costs, including
security and maintenance costs subsequent to the shutdown date,
and are expected to be paid during fiscal 2001 and 2002.

Reduction of
North American Salaried Workforce

On November 2, 2001, the Company announced
the immediate elimination of 145 positions or approximately 11%
of its salaried workforce. In addition, the Company announced
that it would offer an early retirement option to approximately
45 salaried employees. In connection with the elimination of the
145 positions, the Company will record a restructuring charge of
$1.7 million in the fourth quarter of fiscal 2001. Most of
the cash required to fund this charge is for severance benefits
and will be paid by the end of fiscal 2001. Of the 45 employees
offered an early retirement option, 30 have accepted by
December 15, 2001, the acceptance date. In connection with
this early retirement offer, the Company will record a
restructuring charge of $3.9 million in the fourth quarter of
fiscal 2001 primarily related to continued medical benefits and
supplemental retirement benefits which are expected to be paid
over a period of up to 9 years commencing in fiscal 2002.

Sale of
Non-Core Businesses

During the third quarter of fiscal 2001, the
Company sold its 25% interest in a Canadian joint venture for
cash proceeds of approximately $9 million. During the
fourth quarter of fiscal 2001, the Company sold its tire

22



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND
SUBSIDIARIES


Notes to Consolidated Financial Statements
 (Continued)

Three Months Ended April 30, 2001 and
2000


(Unaudited)


(Millions of Dollars Unless Otherwise
Stated)




(11) Subsequent Events 
(Continued)


and wheel assembly business (including a 49%
joint venture in Portugal) for cash proceeds of approximately
$12 million.

Leases

On July 18, 2001, the Company received
notification of termination from a lessor with respect to leased
assets having approximately $25.0 million of original cost
(which termination was not to be effective for one year). The
Company has not agreed with the lessor that a termination has
occurred at the time of the notice and has continued to use the
leased assets.

Legal
Proceedings

Following the announcements of the restatement,
several lawsuits were filed by and purportedly on behalf of
shareholders of the Company naming as defendants a combination
of the Company, Ranko Cucuz, former Chairman of the Board and
Chief Executive Officer of the Company, and William Shovers,
former Vice President  Finance and Chief Financial
Officer of the Company. These lawsuits are seeking class action
status, but no class has yet been certified in these matters.
Due to the Company filing a petition under Chapter 11 of
the United States Bankruptcy Code on December 5, 2001, this
litigation against the Company is now subject to the automatic
stay.

(12) Guarantor and Nonguarantor Financial
Statements

The senior subordinated notes are guaranteed by
certain of the Companys domestic subsidiaries. Certain
other domestic subsidiaries and the foreign subsidiaries (the
Non-Guarantor Subsidiaries) do not guarantee the
senior subordinated notes.

The following condensed consolidating financial
information presents:



| |                                                                                                                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) Condensed consolidating financial
	statements as of April 30, 2001 and January 31, 2001
	and for the three month periods ended April 30, 2001, and
	2000 of (a) Hayes Lemmerz 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 Lemmerz International, Inc., the parent, with
	guarantor and nonguarantor subsidiaries.                                                                                                                                                                                        

The condensed consolidating financial statements
are presented on the equity method. Under this method, the
investments in subsidiaries are recorded at cost and adjusted
for the Companys share of the subsidiaries
cumulative results of operations, capital contributions,
distributions and other equity changes. The principal
elimination entries eliminate investments in subsidiaries and
intercompany balances and transactions.

23



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND
SUBSIDIARIES


Notes to Consolidated Financial Statements
 (Continued)

Three Months Ended April 30, 2001 and
2000


(Unaudited)


(Millions of Dollars Unless Otherwise
Stated)


(12) Guarantor and Nonguarantor Financial
Statements  (Continued)

Condensed Consolidating Statements of
Operations

For the Three Months Ended April 30, 2001, As
Restated


|                                                              |                                                               |        |       |           |              |   |              |              |   |   |              |              |   |       |       |      |  |   |       |       |  
|------------------------------------------------------------- | ------------------------------------------------------------- | ------ | ----- | --------- | ------------ | - | ------------ | ------------ | - | - | ------------ | ------------ | - | ----- | ----- | ---- |  | - | ----- | ----- | -
|                                                              |                                                               |        |       | Guarantor |              |   | Nonguarantor |              |   |   |              | Consolidated |  
|                                                              |                                                               | Parent |       |           | Subsidiaries |   |              | Subsidiaries |   |   | Eliminations |              |   | Total |      
|                                                              |                                                               |        |       |           |              |   |              |              |   |   |              |              |   |       |      
|Net sales                                                     |                                                               | $      | 70.4  |           |              | $ | 123.6        |              |   | $ | 349.2        |              |   | $     | (2.3  | )    |  | $ | 540.9 |      
|Cost of goods sold                                            |                                                               |        | 61.0  |           |              |   | 113.9        |              |   |   | 310.7        |              |   |       | (2.3  | )    |  |   | 483.3 |      
|                                                              |                                                               |        |       |           |              |   |              |              |   |   |              |              |   |       |      
|                                                              | Gross profit                                                  |        |       | 9.4       |              |   |              | 9.7          |   |   |              | 38.5         |   |       |       |     |  |   |       | 57.6  |  
|Marketing, general and administration                         |                                                               |        | 3.9   |           |              |   | 6.4          |              |   |   | 15.9         |              |   |       |      |      |  |   | 26.2  |      
|Engineering and product development                           |                                                               |        | 0.9   |           |              |   | 1.8          |              |   |   | 3.2          |              |   |       |      |      |  |   | 5.9   |      
|Amortization of intangibles                                   |                                                               |        | 0.3   |           |              |   | 1.9          |              |   |   | 4.5          |              |   |       |      |      |  |   | 6.7   |      
|Equity in (earnings) loss of subsidiaries and
	joint ventures |                                                               |        | 53.2  |           |              |   | 12.4         |              |   |   |             |              |   |       | (65.2 | )    |  |   | 0.4   |      
|Asset impairments and other
	restructuring charges            |                                                               |        |      |           |              |   |             |              |   |   | 31.0         |              |   |       |      |      |  |   | 31.0  |      
|Other income, net                                             |                                                               |        | (0.1  | )         |              |   |             |              |   |   | (0.1         | )            |   |       |      |      |  |   | (0.2  | )    
|                                                              |                                                               |        |       |           |              |   |              |              |   |   |              |              |   |       |      
|                                                              | Earnings (loss) from operations                               |        |       | (48.8     | )            |   |              | (12.8        | ) |   |              | (16.0        | ) |       |       | 65.2 |  |   |       | (12.4 | )
|Interest expense, net                                         |                                                               |        | 14.8  |           |              |   | 11.0         |              |   |   | 18.4         |              |   |       |      |      |  |   | 44.2  |      
|                                                              |                                                               |        |       |           |              |   |              |              |   |   |              |              |   |       |      
|                                                              | Earnings (loss) before taxes on income and
	minority interest |        |       | (63.6     | )            |   |              | (23.8        | ) |   |              | (34.4        | ) |       |       | 65.2 |  |   |       | (56.6 | )
|Income tax provision                                          |                                                               |        | 0.1   |           |              |   | 0.2          |              |   |   | 6.0          |              |   |       |      |      |  |   | 6.3   |      
|                                                              |                                                               |        |       |           |              |   |              |              |   |   |              |              |   |       |      
|                                                              | Earnings (loss) before minority interest                      |        |       | (63.7     | )            |   |              | (24.0        | ) |   |              | (40.4        | ) |       |       | 65.2 |  |   |       | (62.9 | )
|Minority interest                                             |                                                               |        |      |           |              |   |             |              |   |   | 0.8          |              |   |       |      |      |  |   | 0.8   |      
|                                                              |                                                               |        |       |           |              |   |              |              |   |   |              |              |   |       |      
|Net income (loss)                                             |                                                               | $      | (63.7 | )         |              | $ | (24.0        | )            |   | $ | (41.2        | )            |   | $     | 65.2  |      |  | $ | (63.7 | )    
|                                                              |                                                               |        |       |           |              |   |              |              |   |   |              |              |   |       |      

Condensed Consolidating Statements of
Operations

For the Three Months Ended April 30,
2000, As Restated


|                                                              |                                                               |        |      |           |              |   |              |              |  |   |              |              |  |       |      |      |   |   |       |      | 
|------------------------------------------------------------- | ------------------------------------------------------------- | ------ | ---- | --------- | ------------ | - | ------------ | ------------ |  | - | ------------ | ------------ |  | ----- | ---- | ---- | - | - | ----- | ---- | 
|                                                              |                                                               |        |      | Guarantor |              |   | Nonguarantor |              |  |   |              | Consolidated | 
|                                                              |                                                               | Parent |      |           | Subsidiaries |   |              | Subsidiaries |  |   | Eliminations |              |  | Total |     
|                                                              |                                                               |        |      |           |              |   |              |              |  |   |              |              |  |       |     
|Net sales                                                     |                                                               | $      | 81.1 |           |              | $ | 175.0        |              |  | $ | 342.6        |              |  | $     | (5.1 | )    |   | $ | 593.6 |     
|Cost of goods sold                                            |                                                               |        | 66.6 |           |              |   | 145.9        |              |  |   | 291.9        |              |  |       | (5.1 | )    |   |   | 499.3 |     
|                                                              |                                                               |        |      |           |              |   |              |              |  |   |              |              |  |       |     
|                                                              | Gross profit                                                  |        |      | 14.5      |              |   |              | 29.1         |  |   |              | 50.7         |  |       |      |     |   |   |       | 94.3 | 
|Marketing, general and administration                         |                                                               |        | 1.6  |           |              |   | 5.8          |              |  |   | 17.4         |              |  |       |     |      |   |   | 24.8  |     
|Engineering and product development                           |                                                               |        | 1.5  |           |              |   | 1.8          |              |  |   | 2.9          |              |  |       |     |      |   |   | 6.2   |     
|Amortization of intangibles                                   |                                                               |        | 0.3  |           |              |   | 1.9          |              |  |   | 4.8          |              |  |       |     |      |   |   | 7.0   |     
|Equity in (earnings) loss of subsidiaries and
	joint ventures |                                                               |        | (9.1 | )         |              |   | 2.9          |              |  |   | (0.2         | )            |  |       | 5.3  |      |   |   | (1.1  | )   
|Other expense (income), net                                   |                                                               |        |     |           |              |   |             |              |  |   | (1.9         | )            |  |       |     |      |   |   | (1.9  | )   
|                                                              |                                                               |        |      |           |              |   |              |              |  |   |              |              |  |       |     
|                                                              | Earnings (loss) from operations                               |        |      | 20.2      |              |   |              | 16.7         |  |   |              | 27.7         |  |       |      | (5.3 | ) |   |       | 59.3 | 
|Interest expense, net                                         |                                                               |        | 5.6  |           |              |   | 14.4         |              |  |   | 18.8         |              |  |       |     |      |   |   | 38.8  |     
|                                                              |                                                               |        |      |           |              |   |              |              |  |   |              |              |  |       |     
|                                                              | Earnings (loss) before taxes on income and
	minority interest |        |      | 14.6      |              |   |              | 2.3          |  |   |              | 8.9          |  |       |      | (5.3 | ) |   |       | 20.5 | 
|Income tax provision                                          |                                                               |        | 2.3  |           |              |   | 1.9          |              |  |   | 3.1          |              |  |       |     |      |   |   | 7.3   |     
|                                                              |                                                               |        |      |           |              |   |              |              |  |   |              |              |  |       |     
|                                                              | Earnings (loss) before minority interest                      |        |      | 12.3      |              |   |              | 0.4          |  |   |              | 5.8          |  |       |      | (5.3 | ) |   |       | 13.2 | 
|Minority interest                                             |                                                               |        |     |           |              |   |             |              |  |   | 0.9          |              |  |       |     |      |   |   | 0.9   |     
|                                                              |                                                               |        |      |           |              |   |              |              |  |   |              |              |  |       |     
|Net income (loss)                                             |                                                               | $      | 12.3 |           |              | $ | 0.4          |              |  | $ | 4.9          |              |  | $     | (5.3 | )    |   | $ | 12.3  |     
|                                                              |                                                               |        |      |           |              |   |              |              |  |   |              |              |  |       |     

24



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND
SUBSIDIARIES


Notes to Consolidated Financial Statements
 (Continued)

Three Months Ended April 30, 2001 and
2000


(Unaudited)


(Millions of Dollars Unless Otherwise
Stated)




(12) Guarantor and Nonguarantor Financial
Statements  (Continued)


Condensed Consolidating Balance
Sheets

As of April 30, 2001, As
Restated


|                                              |                                            |        |         |           |              |   |              |              |  |   |              |              |  |       |          |        |   |   |         |         |  
|--------------------------------------------- | ------------------------------------------ | ------ | ------- | --------- | ------------ | - | ------------ | ------------ |  | - | ------------ | ------------ |  | ----- | -------- | ------ | - | - | ------- | ------- | -
|                                              |                                            |        |         | Guarantor |              |   | Nonguarantor |              |  |   |              | Consolidated | 
|                                              |                                            | Parent |         |           | Subsidiaries |   |              | Subsidiaries |  |   | Eliminations |              |  | Total |         
|                                              |                                            |        |         |           |              |   |              |              |  |   |              |              |  |       |         
|Cash and cash equivalents                     |                                            | $      | 2.8     |           |              | $ | 0.1          |              |  | $ | 26.0         |              |  | $     |         |        |   | $ | 28.9    |        
|Receivables                                   |                                            |        | 50.8    |           |              |   | 7.2          |              |  |   | 194.1        |              |  |       |         |        |   |   | 252.1   |        
|Inventories                                   |                                            |        | 26.6    |           |              |   | 36.6         |              |  |   | 145.0        |              |  |       |         |        |   |   | 208.2   |        
|Prepaid expenses and other                    |                                            |        | 7.9     |           |              |   | 11.3         |              |  |   | 29.3         |              |  |       | (11.0    | )      |   |   | 37.5    |        
|                                              |                                            |        |         |           |              |   |              |              |  |   |              |              |  |       |         
|                                              | Total current assets                       |        |         | 88.1      |              |   |              | 55.2         |  |   |              | 394.4        |  |       |          | (11.0  | ) |   |         | 526.7   |  
|Net property, plant and equipment             |                                            |        | 142.6   |           |              |   | 235.8        |              |  |   | 676.6        |              |  |       |         |        |   |   | 1,055.0 |        
|Goodwill and other assets                     |                                            |        | 1,158.6 |           |              |   | 189.0        |              |  |   | 598.9        |              |  |       | (981.0   | )      |   |   | 965.5   |        
|                                              |                                            |        |         |           |              |   |              |              |  |   |              |              |  |       |         
|                                              | Total assets                               |        | $       | 1,389.3   |              |   | $            | 480.0        |  |   | $            | 1,669.9      |  |       | $        | (992.0 | ) |   | $       | 2,547.2 |  
|                                              |                                            |        |         |           |              |   |              |              |  |   |              |              |  |       |         
|Bank borrowings                               |                                            | $      |        |           |              | $ |             |              |  | $ | 81.9         |              |  | $     |         |        |   | $ | 81.9    |        
|Current portion of long-term debt             |                                            |        | 1,659.9 |           |              |   |             |              |  |   | 14.7         |              |  |       | 0.6      |        |   |   | 1,675.2 |        
|Accounts payable and accrued liabilities      |                                            |        | 34.9    |           |              |   | 79.9         |              |  |   | 348.4        |              |  |       | (5.8     | )      |   |   | 457.4   |        
|                                              |                                            |        |         |           |              |   |              |              |  |   |              |              |  |       |         
|                                              | Total current liabilities                  |        |         | 1,694.8   |              |   |              | 79.9         |  |   |              | 445.0        |  |       |          | (5.2   | ) |   |         | 2,214.5 |  
|Long-term debt, net of current portion        |                                            |        |        |           |              |   |             |              |  |   | 87.5         |              |  |       |         |        |   |   | 87.5    |        
|Pension and other long-term liabilities       |                                            |        | 70.1    |           |              |   | 50.0         |              |  |   | 133.4        |              |  |       |         |        |   |   | 253.5   |        
|Deferred tax liabilities                      |                                            |        | 2.0     |           |              |   | 3.0          |              |  |   | 67.3         |              |  |       |         |        |   |   | 72.3    |        
|Minority interest                             |                                            |        |        |           |              |   |             |              |  |   | 10.6         |              |  |       |         |        |   |   | 10.6    |        
|Parent loans                                  |                                            |        | (286.4  | )         |              |   | 269.3        |              |  |   | 17.1         |              |  |       |         |        |   |   |        |        
|                                              |                                            |        |         |           |              |   |              |              |  |   |              |              |  |       |         
|                                              | Total liabilities                          |        |         | 1,480.5   |              |   |              | 402.2        |  |   |              | 760.9        |  |       |          | (5.2   | ) |   |         | 2,638.4 |  
|Common stock                                  |                                            |        | 0.3     |           |              |   |             |              |  |   |             |              |  |       |         |        |   |   | 0.3     |        
|Additional paid-in capital                    |                                            |        | 235.1   |           |              |   | 135.8        |              |  |   | 1,114.3      |              |  |       | (1,250.1 | )      |   |   | 235.1   |        
|Retained earnings (accumulated deficit)       |                                            |        | (209.4  | )         |              |   | (57.0        | )            |  |   | (80.3        | )            |  |       | 137.3    |        |   |   | (209.4  | )      
|Common stock in treasury at cost              |                                            |        | (25.7   | )         |              |   |             |              |  |   |             |              |  |       |         |        |   |   | (25.7   | )      
|Accumulated other comprehensive income (loss) |                                            |        | (91.5   | )         |              |   | (1.0         | )            |  |   | (125.0       | )            |  |       | 126.0    |        |   |   | (91.5   | )      
|                                              |                                            |        |         |           |              |   |              |              |  |   |              |              |  |       |         
|                                              | Total stockholders equity                 |        |         | (91.2     | )            |   |              | 77.8         |  |   |              | 909.0        |  |       |          | (986.8 | ) |   |         | (91.2   | )
|                                              |                                            |        |         |           |              |   |              |              |  |   |              |              |  |       |         
|                                              | Total liabilities and stockholders equity |        | $       | 1,389.3   |              |   | $            | 480.0        |  |   | $            | 1,669.9      |  |       | $        | (992.0 | ) |   | $       | 2,547.2 |  
|                                              |                                            |        |         |           |              |   |              |              |  |   |              |              |  |       |         

25



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND
SUBSIDIARIES


Notes to Consolidated Financial Statements
 (Continued)

Three Months Ended April 30, 2001 and
2000


(Unaudited)


(Millions of Dollars Unless Otherwise
Stated)




(12) Guarantor and Nonguarantor Financial
Statements  (Continued)







CONDENSED CONSOLIDATING BALANCE
SHEET


As of January 31, 2001

|                                         |                                            |        |         |           |              |   |              |              |  |   |              |              |  |       |          |          |   |   |         |         |  
|---------------------------------------- | ------------------------------------------ | ------ | ------- | --------- | ------------ | - | ------------ | ------------ |  | - | ------------ | ------------ |  | ----- | -------- | -------- | - | - | ------- | ------- | -
|                                         |                                            |        |         | Guarantor |              |   | Nonguarantor |              |  |   |              | Consolidated | 
|                                         |                                            | Parent |         |           | Subsidiaries |   |              | Subsidiaries |  |   | Eliminations |              |  | Total |         
|                                         |                                            |        |         |           |              |   |              |              |  |   |              |              |  |       |         
|Cash and cash equivalents                |                                            | $      | (19.3   | )         |              | $ | 0.2          |              |  | $ | 19.1         |              |  | $     |         |          |   | $ |        |        
|Receivables                              |                                            |        | 68.2    |           |              |   | 2.6          |              |  |   | 185.9        |              |  |       |         |          |   |   | 256.7   |        
|Inventories                              |                                            |        | 34.4    |           |              |   | 41.9         |              |  |   | 141.0        |              |  |       |         |          |   |   | 217.3   |        
|Prepaid expenses and other               |                                            |        | 7.0     |           |              |   | 8.7          |              |  |   | 35.1         |              |  |       | (12.1    | )        |   |   | 38.7    |        
|                                         |                                            |        |         |           |              |   |              |              |  |   |              |              |  |       |         
|                                         | Total current assets                       |        |         | 90.3      |              |   |              | 53.4         |  |   |              | 381.1        |  |       |          | (12.1    | ) |   |         | 512.7   |  
|Net property, plant and equipment        |                                            |        | 143.3   |           |              |   | 240.0        |              |  |   | 721.5        |              |  |       |         |          |   |   | 1,104.8 |        
|Goodwill and other assets                |                                            |        | 1,220.9 |           |              |   | 208.1        |              |  |   | 631.4        |              |  |       | (1,074.0 | )        |   |   | 986.4   |        
|                                         |                                            |        |         |           |              |   |              |              |  |   |              |              |  |       |         
|                                         | Total assets                               |        | $       | 1,454.5   |              |   | $            | 501.5        |  |   | $            | 1,734.0      |  |       | $        | (1,086.1 | ) |   | $       | 2,603.9 |  
|                                         |                                            |        |         |           |              |   |              |              |  |   |              |              |  |       |         
|Bank borrowings                          |                                            | $      |        |           |              | $ |             |              |  | $ | 79.6         |              |  | $     |         |          |   | $ | 79.6    |        
|Current portion of long-term debt        |                                            |        | 1,597.5 |           |              |   |             |              |  |   | 15.6         |              |  |       | 0.6      |          |   |   | 1,613.7 |        
|Accounts payable and accrued liabilities |                                            |        | 29.0    |           |              |   | 98.1         |              |  |   | 373.5        |              |  |       | (9.0     | )        |   |   | 491.6   |        
|                                         |                                            |        |         |           |              |   |              |              |  |   |              |              |  |       |         
|                                         | Total current liabilities                  |        |         | 1,626.5   |              |   |              | 98.1         |  |   |              | 468.7        |  |       |          | (8.4     | ) |   |         | 2,184.9 |  
|Long-term debt, net of current portion   |                                            |        |        |           |              |   |             |              |  |   | 94.6         |              |  |       |         |          |   |   | 94.6    |        
|Deferred tax liabilities                 |                                            |        | 2.0     |           |              |   | 3.0          |              |  |   | 63.7         |              |  |       |         |          |   |   | 68.7    |        
|Pension and other long-term liabilities  |                                            |        | 70.5    |           |              |   | 53.1         |              |  |   | 143.1        |              |  |       | 0.2      |          |   |   | 266.9   |        
|Minority interest                        |                                            |        |        |           |              |   |             |              |  |   | 10.6         |              |  |       |         |          |   |   | 10.6    |        
|Parent loans                             |                                            |        | (222.7  | )         |              |   | 245.4        |              |  |   | (22.7        | )            |  |       |         |          |   |   |        |        
|                                         |                                            |        |         |           |              |   |              |              |  |   |              |              |  |       |         
|                                         | Total liabilities                          |        |         | 1,476.3   |              |   |              | 399.6        |  |   |              | 758.0        |  |       |          | (8.2     | ) |   |         | 2,625.7 |  
|Common stock                             |                                            |        | 0.3     |           |              |   |             |              |  |   |             |              |  |       |         |          |   |   | 0.3     |        
|Additional paid-in capital               |                                            |        | 235.1   |           |              |   | 135.8        |              |  |   | 1,114.3      |              |  |       | (1,250.1 | )        |   |   | 235.1   |        
|Common stock in treasury at cost         |                                            |        | (25.7   | )         |              |   |             |              |  |   |             |              |  |       |         |          |   |   | (25.7   | )      
|Retained earnings (accumulated deficit)  |                                            |        | (145.7  | )         |              |   | (32.9        | )            |  |   | (39.4        | )            |  |       | 72.3     |          |   |   | (145.7  | )      
|Accumulated other comprehensive loss     |                                            |        | (85.8   | )         |              |   | (1.0         | )            |  |   | (98.9        | )            |  |       | 99.9     |          |   |   | (85.8   | )      
|                                         |                                            |        |         |           |              |   |              |              |  |   |              |              |  |       |         
|                                         | Total stockholders equity (deficit)       |        |         | (21.8     | )            |   |              | 101.9        |  |   |              | 976.0        |  |       |          | (1,077.9 | ) |   |         | (21.8   | )
|                                         |                                            |        |         |           |              |   |              |              |  |   |              |              |  |       |         
|                                         | Total liabilities and stockholders equity |        | $       | 1,454.5   |              |   | $            | 501.5        |  |   | $            | 1,734.0      |  |       | $        | (1,086.1 | ) |   | $       | 2,603.9 |  
|                                         |                                            |        |         |           |              |   |              |              |  |   |              |              |  |       |         

26



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND
SUBSIDIARIES


Notes to Consolidated Financial Statements
 (Continued)

Three Months Ended April 30, 2001 and
2000


(Unaudited)


(Millions of Dollars Unless Otherwise
Stated)


(12) Guarantor and Nonguarantor Financial
Statements  (Continued)

Condensed Consolidating Statement of Cash
Flows

For the three months ended April 30,
2001, As Restated


|                                                       |                                                  |                                                       |       |           |              |   |              |              |      |   |              |              |       |   |   |   |   |   |       |       |       |  
|------------------------------------------------------ | ------------------------------------------------ | ----------------------------------------------------- | ----- | --------- | ------------ | - | ------------ | ------------ | ---- | - | ------------ | ------------ | ----- | - | - | - | - | - | ----- | ----- | ----- | -
|                                                       |                                                  |                                                       |       | Guarantor |              |   | Nonguarantor |              |      |   |              | Consolidated |      
|                                                       |                                                  | Parent                                                |       |           | Subsidiaries |   |              | Subsidiaries |      |   | Eliminations |              | Total |  
|                                                       |                                                  |                                                       |       |           |              |   |              |              |      |   |              |              |       |  
|Cash flows used for operating activities               |                                                  | $                                                     | 9.9   |           |              | $ | (43.2        | )            |      | $ | (22.1        | )            |       | $ |  |   |   | $ | (55.4 | )    
|Cash flows from investing activities:                  |                                                  |                                                       |       |           |              |   |              |              |      |   |              |              |       |   |   |   |   |   |       |      
|                                                       | Acquisition of property, plant and equipment     |                                                       |       | (0.5      | )            |   |              | (1.2         | )    |   |              | (28.2        | )     |   |   |  |   |   |       | (29.9 | )    
|                                                       | Tooling expenditures                             |                                                       |       | (0.6      | )            |   |              | (0.6         | )    |   |              |             |       |   |   |  |   |   |       | (1.2  | )    
|                                                       | Other, net                                       |                                                       |       | (5.7      | )            |   |              | 4.2          |      |   |              | 0.2          |       |   |   |  |   |   |       | (1.3  | )    
|                                                       |                                                  |                                                       |       |           |              |   |              |              |      |   |              |              |       |   |  
|                                                       |                                                  | Cash used for investing activities                    |       |           | (6.8         | ) |              |              | 2.4  |   |              |              | (28.0 | ) |   |   |  |   |       |       | (32.4 | )
|Cash flows from financing activities:                  |                                                  |                                                       |       |           |              |   |              |              |      |   |              |              |       |   |   |   |   |   |       |      
|                                                       | Increase in bank borrowings and revolver         |                                                       |       | 67.3      |              |   |              |             |      |   |              | 5.8          |       |   |   |  |   |   |       | 73.1  |      
|                                                       | Proceeds from accounts receivable securitization |                                                       |       | 17.6      |              |   |              | 16.9         |      |   |              | 13.1         |       |   |   |  |   |   |       | 47.6  |      
|                                                       | Financing fees                                   |                                                       |       | (2.3      | )            |   |              |             |      |   |              |             |       |   |   |  |   |   |       | (2.3  | )    
|                                                       |                                                  |                                                       |       |           |              |   |              |              |      |   |              |              |       |   |  
|                                                       |                                                  | Cash provided by financing activities                 |       |           | 82.6         |   |              |              | 16.9 |   |              |              | 18.9  |   |   |   |  |   |       |       | 118.4 |  
|Increase (decrease) in parent loans and advances       |                                                  |                                                       | (63.6 | )         |              |   | 23.8         |              |      |   | 39.8         |              |       |   |  |   |   |   |      |      
|Effect of exchange rates of cash and cash
	equivalents |                                                  |                                                       |      |           |              |   |             |              |      |   | (1.7         | )            |       |   |  |   |   |   | (1.7  | )    
|                                                       |                                                  |                                                       |       |           |              |   |              |              |      |   |              |              |       |   |  
|                                                       |                                                  | Net increase (decrease) in cash and cash
	equivalents |       |           | 22.1         |   |              |              | (0.1 | ) |              |              | 6.9   |   |   |   |  |   |       |       | 28.9  |  
|Cash and cash equivalents at beginning of period       |                                                  |                                                       | (19.3 | )         |              |   | 0.2          |              |      |   | 19.1         |              |       |   |  |   |   |   |      |      
|                                                       |                                                  |                                                       |       |           |              |   |              |              |      |   |              |              |       |   |  
|Cash and cash equivalents at end of period             |                                                  | $                                                     | 2.8   |           |              | $ | 0.1          |              |      | $ | 26.0         |              |       | $ |  |   |   | $ | 28.9  |      
|                                                       |                                                  |                                                       |       |           |              |   |              |              |      |   |              |              |       |   |  

27



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##### Table of Contents



HAYES LEMMERZ INTERNATIONAL, INC. AND
SUBSIDIARIES


Notes to Consolidated Financial Statements
 (Continued)

Three Months Ended April 30, 2001 and
2000


(Unaudited)


(Millions of Dollars Unless Otherwise
Stated)


(12) Guarantor and Nonguarantor Financial
Statements  (Continued)

Condensed Consolidating Statement of Cash
Flows

For the three months ended April 30,
2000, As Restated


|                                                       |                                                  |                                                       |        |           |              |   |              |              |      |   |              |              |       |   |   |   |   |   |        |       |       |  
|------------------------------------------------------ | ------------------------------------------------ | ----------------------------------------------------- | ------ | --------- | ------------ | - | ------------ | ------------ | ---- | - | ------------ | ------------ | ----- | - | - | - | - | - | ------ | ----- | ----- | -
|                                                       |                                                  |                                                       |        | Guarantor |              |   | Nonguarantor |              |      |   |              | Consolidated |      
|                                                       |                                                  | Parent                                                |        |           | Subsidiaries |   |              | Subsidiaries |      |   | Eliminations |              | Total |  
|                                                       |                                                  |                                                       |        |           |              |   |              |              |      |   |              |              |       |  
|Cash flows used for operating activities               |                                                  | $                                                     | (13.4  | )         |              | $ | (66.9        | )            |      | $ | (38.4        | )            |       | $ |  |   |   | $ | (118.7 | )    
|Cash flows from investing activities:                  |                                                  |                                                       |        |           |              |   |              |              |      |   |              |              |       |   |   |   |   |   |        |      
|                                                       | Acquisition of property, plant and equipment     |                                                       |        | (14.7     | )            |   |              | (5.8         | )    |   |              | (21.4        | )     |   |   |  |   |   |        | (41.9 | )    
|                                                       | Other, net                                       |                                                       |        | 8.6       |              |   |              | 0.6          |      |   |              | (4.6         | )     |   |   |  |   |   |        | 4.6   |      
|                                                       |                                                  |                                                       |        |           |              |   |              |              |      |   |              |              |       |   |  
|                                                       |                                                  | Cash used for investing activities                    |        |           | (6.1         | ) |              |              | (5.2 | ) |              |              | (26.0 | ) |   |   |  |   |        |       | (37.3 | )
|Cash flows from financing activities:                  |                                                  |                                                       |        |           |              |   |              |              |      |   |              |              |       |   |   |   |   |   |        |      
|                                                       | Increase in bank borrowings and revolver         |                                                       |        | 139.2     |              |   |              |             |      |   |              | 20.7         |       |   |   |  |   |   |        | 159.9 |      
|                                                       | Proceeds from accounts receivable securitization |                                                       |        | 5.9       |              |   |              | 3.7          |      |   |              | 2.4          |       |   |   |  |   |   |        | 12.0  |      
|                                                       |                                                  |                                                       |        |           |              |   |              |              |      |   |              |              |       |   |  
|                                                       |                                                  | Cash provided by financing activities                 |        |           | 145.1        |   |              |              | 3.7  |   |              |              | 23.1  |   |   |   |  |   |        |       | 171.9 |  
|Increase (decrease) in parent loans and advances       |                                                  |                                                       | (135.2 | )         |              |   | 68.4         |              |      |   | 66.8         |              |       |   |  |   |   |   |       |      
|Effect of exchange rates of cash and cash
	equivalents |                                                  |                                                       |       |           |              |   |             |              |      |   | (1.4         | )            |       |   |  |   |   |   | (1.4   | )    
|                                                       |                                                  |                                                       |        |           |              |   |              |              |      |   |              |              |       |   |  
|                                                       |                                                  | Net increase (decrease) in cash and cash
	equivalents |        |           | (9.6         | ) |              |              |     |   |              |              | 24.1  |   |   |   |  |   |        |       | 14.5  |  
|Cash and cash equivalents at beginning of period       |                                                  |                                                       | 6.8    |           |              |   | 0.1          |              |      |   | 19.0         |              |       |   |  |   |   |   | 25.9   |      
|                                                       |                                                  |                                                       |        |           |              |   |              |              |      |   |              |              |       |   |  
|Cash and cash equivalents at end of period             |                                                  | $                                                     | (2.8   | )         |              | $ | 0.1          |              |      | $ | 43.1         |              |       | $ |  |   |   | $ | 40.4   |      
|                                                       |                                                  |                                                       |        |           |              |   |              |              |      |   |              |              |       |   |  

28



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##### Table of Contents






Item 2. Managements Discussion
and Analysis of Financial Condition and Results of
Operations

The following discussion and analysis should be
read in conjunction with the Companys consolidated
financial statements, related notes thereto and the other
information included elsewhere herein. The financial information
included in the following discussion and analysis reflects the
results of the restatements of the consolidated financial
statements discussed more fully below.

Organization, Chapter 11 Filings and
Other Recent Developments

The Company designs, engineers and manufactures
suspension module components, principally for original equipment
manufacturers (OEMs) of passenger cars, light trucks
and commercial highway vehicles worldwide. The Companys
products include one-piece cast aluminum wheels, fabricated
aluminum wheels, fabricated steel wheels, full face cast
aluminum wheels, clad covered wheels, wheel-end attachments,
aluminum structural components, intake and exhaust manifolds,
and brake drums, hubs and rotors.

Chapter 11
Filings

On December 5, 2001, the Company, 30 of its
wholly-owned domestic subsidiaries and one wholly-owned Mexican
subsidiary (collectively, the Debtors) filed
voluntary petitions for reorganization (the
Chapter 11 Filings or the Filings)
under Chapter 11 of the Bankruptcy Code in the United
States Bankruptcy Court for the District of Delaware (the
Bankruptcy Court). The Chapter 11 Filings are
being jointly administered, for procedural purposes only, before
the Bankruptcy Court under Case No. 01-11490-MFW.

During the pendancy of these Filings, the Debtors
remain in possession of their properties and assets and
management of the Company continues to operate the businesses of
the Debtors as debtors-in-possession. As a debtor-in-possession,
the Company is authorized to operate the business of the
Debtors, but may not engage in transactions outside of the
ordinary course of business without the approval, after notice
and the opportunity for a hearing, of the Bankruptcy Court.

Shortly after the commencement of the
Chapter 11 Filings, on December 21, 2001, the
Bankruptcy Court granted interim approval for the Debtors to
obtain $45 million debtor-in-possession financing.
Subsequently, on January 28, 2002, the Bankruptcy Court
granted final approval to a $200 million
debtor-in-possession financing facility for the Debtors. The
Bankruptcy Court has approved payment of certain of the
Debtors pre-petition liabilities, such as employee wages,
benefits, and certain customer and freight programs. In
addition, the Bankruptcy Court authorized the Debtors to
maintain their employee benefit programs. Pension and savings
plan funds are in trusts and protected under federal
regulations. All required contributions are current in the
respective plans. The Debtors have received Bankruptcy Court
approval for the retention of legal, financial and management
consulting professionals, and are seeking Bankruptcy Court
approval for the retention of additional financial and
management consulting professionals, to advise the Debtors in
the bankruptcy proceedings and the restructuring of its
businesses.

Pursuant to the automatic stay provisions of
Section 362 of the Bankruptcy Code, actions to collect
pre-petition indebtedness and virtually all litigation against
the Debtors that was, or could have been, brought prior to the
commencement of the Chapter 11 Filings are stayed, and
other contractual obligations of the Debtors may not be enforced
against them. In addition, under Section 365 of the
Bankruptcy Code, subject to the approval of the Bankruptcy
Court, the Debtors may assume or reject executory contracts and
unexpired leases. Parties affected by these rejections may file
proofs of claim with the Bankruptcy Court in accordance with the
reorganization process. These claims for damages resulting from
the rejection of executory contracts or unexpired leases will be
subject to separate bar dates, generally thirty days after entry
of the order approving the rejection. As of the date of this
filing, the Debtors had not yet completed their review of all
contracts and leases for assumption or rejection, but ultimately
will assume or reject all such contracts and leases. Generally,
the Debtors have up to 120 days, or a longer period of time
subject to approval by the Bankruptcy Court, after the date of
filing to assume or reject executory contracts and certain
leases. The Debtors cannot presently determine or reasonably
predict the ultimate liability that may result from rejecting
such contracts or leases or from the filing of rejection damage
claims, but such rejections could result in additional
liabilities subject to compromise.

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All liabilities subject to compromise are subject
to future adjustment depending on Bankruptcy Court action,
further developments with respect to disputed claims, or other
events. Under a confirmed plan of reorganization, all
pre-petition claims may be paid at amounts substantially less
than their allowed amounts. In light of the number of creditors
of the Debtors, the claims resolution process may take
considerable time to complete. Accordingly, the ultimate number
and amount of allowed claims is not presently known and, because
the settlement terms of such allowed claims is subject to a
confirmed plan of reorganization, the ultimate resolution with
respect to allowed claims is not presently ascertainable.

The consummation of a plan or plans of
reorganization is the principal objective of the Chapter 11
Filings. A plan of reorganization sets forth the means for
satisfying claims against and interests in the Company and its
Debtor subsidiaries, including the liabilities subject to
compromise. Generally, pre-petition liabilities are subject to
settlement under such a plan or plans of reorganization, which
must be voted upon by certain creditors and approved by the
Bankruptcy Court. As provided by the Bankruptcy Code, the
Debtors initially have the exclusive right for 120 days
(April 4, 2002), or a longer period of time subject to
approval by the Bankruptcy Court, to submit a plan or plans of
reorganization. The Debtors have retained Lazard Freres &
Co. LLC, as financial advisors and investment bankers for the
purpose of providing financial advisory and investment banking
services during the Chapter 11 reorganization process. The
Company anticipates that any plan or plans of reorganization it
may propose, if ultimately approved by the Bankruptcy Court,
would result in substantial dilution of the interest of existing
equity holders, so that they would hold little, if any,
meaningful stake in the reorganized enterprise.

Confirmation of a plan of reorganization is
subject to certain findings being made by the Bankruptcy Court,
all of which are required by the Bankruptcy Code. Subject to
certain exceptions set forth in the Bankruptcy Code,
confirmation of a plan of reorganization requires the approval
of the Bankruptcy Court and the affirmative vote of each
impaired class of creditors and equity security holders. The
Bankruptcy Court may confirm a plan notwithstanding the
non-acceptance of the plan by an impaired class of creditors or
equity security holders if certain requirements of the
Bankruptcy Code are met. There can be no assurance that a
reorganization plan or plans will be proposed by the Debtors or
confirmed by the Bankruptcy Court, or that any such plan or
plans will be consummated.

Currently, it is not possible to predict the
length of time the Company will operate under the protection of
Chapter 11 and the supervision of the Bankruptcy Court,
when the Company will file a plan or plans of reorganization
with the Bankruptcy Court, the outcome of the Chapter 11
proceedings in general, or the effect of the proceedings on the
business of the Company or on the interest of the various
creditors and stakeholders.

The Companys financial statements
commencing with the period that includes December 5, 2001,
the date of filing of the Chapter 11 proceedings, will be
presented in conformity with the AICPAs Statement of
Position 90-7, Financial Reporting By Entities In
Reorganization Under the Bankruptcy Code,
(SOP 90-7). The statement requires a
segregation of liabilities subject to compromise by the
Bankruptcy Court as of the bankruptcy filing date and
identification of all transactions and events that are directly
associated with the reorganization of the Company.

The accompanying consolidated financial
statements do not reflect: (a) the requirements of
SOP 90-7, (b) the realizable value of assets on a
liquidation basis or their availability to satisfy liabilities;
(c) aggregate pre-petition liability amounts that may be
allowed for unrecorded claims or contingencies, or their status
or priority; (d) the effect of any changes to the
Debtors capital structure or in the Debtors business
operations as the result of an approved plan of reorganization;
or (e) adjustments to the carrying value of assets
(including goodwill and other intangibles) or liability amounts
that may be necessary as the result of actions by the Bankruptcy
Court.

Restatement
of Consolidated Financial Statements

On September 5 and December 13, 2001,
the Company announced that it would restate its consolidated
financial statements as of and for the fiscal years ended
January 31, 2001 and 2000, and related quarterly periods,
and for the fiscal quarter ended April 30, 2001 because the
Company failed in certain instances to properly apply accounting
principles generally accepted in the United States of America,
and because certain

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accounting errors and irregularities in the
Companys financial statements were identified. The Company
also advised that the accompanying independent auditors
reports regarding fiscal 2000 and 1999 consolidated financial
statements should not be relied upon.


The Audit Committee of the Companys Board
of Directors was given the responsibility to investigate the
facts and circumstances relating to the accounting and internal
control issues which gave rise to the restatement and the
Companys accounting practices, policies and procedures
(the Audit Committee Investigation). To assist with
the Audit Committee Investigation, the Audit Committee engaged
the law firm of Skadden Arps Slate Meagher & Flom LLP
(Skadden Arps) and Skadden Arps engaged the
accounting firm of Ernst & Young LLP.

In addition to the Audit Committee Investigation,
the Company conducted a review of its accounting records for
fiscal 2000 and fiscal 1999 and engaged KPMG LLP to audit
the Companys restated consolidated financial statements
for fiscal 2000 and 1999. The cumulative restatement of the
Companys fiscal 2000 and 1999 financial statements reduces
the Companys consolidated stockholders equity as of
January 31, 2001 by approximately $177.2 million, from
amounts previously reported. The amended Form 10-K
(the 10-K/A) was filed on February 19,
2002 and included the restated consolidated financial
statements. In addition, the Companys consolidated
financial statements for the quarter ended April 30, 2001
were also restated.

Following the announcements of the restatements,
several lawsuits were filed by and purportedly on behalf of the
shareholders of the Company naming as defendants, a combination
of the Company, Mr. Cucuz and Mr. Shovers. These
lawsuits are seeking class action status, but no class has yet
been certified in these matters. As discussed above, due to the
fact that the Company filed a petition under Chapter 11 of
the Bankruptcy Code on December 5, 2001, this litigation
against the Company is now subject to the automatic stay.

The Company has been in contact with the staff of
the Securities and Exchange Commission (the SEC)
concerning the status of the Audit Committee Investigation. The
Company has been advised that the SEC is conducting an
investigation into the facts and circumstances giving rise to
the restatement, and the Company has been and intends to
continue cooperating with the SEC. The Company cannot predict
the outcome of such an investigation.

New
Management Team

As more fully discussed at Part I,
Item 1. Business  Recent
Developments  New Management Team in the
Companys Annual Report Form 10-K/A for fiscal 2000
filed with the SEC on February 19, 2002, a number of
changes in the Companys Officers, Directors and senior
operating and financial management occurred since April 30,
2001.

Facility
Closures

In June 2001, the Company committed to a
plan to close its manufacturing facility in Petersburg,
Michigan, and in November 2001, committed to a plan to
close its manufacturing facility in Bowling Green, Kentucky.

The Company recorded asset impairment losses with
respect to the Petersburg facility of $28.5 million during
the first quarter of fiscal 2001. In connection with the closure
of this facility (which commenced during December 2001),
the Company will record a restructuring charge of
$0.5 million during the fourth quarter of fiscal 2001.
These restructuring charges relate to security and other
maintenance costs subsequent to the shutdown date, and are
expected to be paid during fiscal 2001 and 2002.

In connection with the closure of the Bowling
Green facility (which is planned to begin during
July 2002), the Company will record during the fourth
quarter of fiscal 2001 asset impairment losses of
$45.5 million and other restructuring charges of
$10.7 million. These restructuring charges relate to the
termination of leases and other closure costs, including
security and maintenance costs subsequent to the shutdown date,
and are expected to be paid during fiscal 2001 and 2002.

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Bank
Borrowings and Long-Term Debt

See Part I, Item 1, Notes to
Consolidated Financial Statements, Note (3) Bank
Borrowings and Long-Term Debt included herein for a
discussion of certain transactions and events occurring after
April 30, 2001 which affect the amount and classification
of a significant portion of the Companys debt.

Reduction of
North American Salaried Workforce

On November 2, 2001, the Company announced
the immediate elimination of 145 positions or approximately 11%
of its salaried workforce. In addition, the Company announced
that it would offer an early retirement option to approximately
45 salaried employees. In connection with the elimination of the
145 positions, the Company will record a restructuring charge of
$1.7 million in the fourth quarter of fiscal 2001. Most of the
cash required to fund this charge is for severance benefits and
will be paid by the end of fiscal 2001. Of the 45 employees
offered an early retirement option, 30 have accepted by
December 15, 2001, the acceptance date. In connection with
this early retirement offer, the Company will record a
restructuring charge of $3.9 million in the fourth quarter
of fiscal 2001 primarily related to continued medical benefits
and supplemental retirement benefits which are expected to be
paid over a period of up to 9 years commencing in fiscal
2002.

Results of Operations

Three Months Ended April 30, 2001
Compared to Three Months Ended April 30, 2000

Sales of the Companys wheels, wheel-end
attachments, aluminum structural components, powertrain and
brake components produced in North America are directly affected
by the overall level of passenger car, light truck and
commercial highway vehicle production of North American OEMs,
while sales of its wheels and automotive castings in Europe are
directly affected by the overall vehicle production in Europe.
The North American and European automotive industries are
sensitive to the overall strength of their respective economies.

The Company is organized based primarily on
markets served and products produced. Under this organization
structure, the Companys operating segments have been
aggregated into three reportable segments: Automotive Wheels,
Components and Other. The Automotive Wheels segment includes
results from the Companys operations that primarily
manufacture and distribute fabricated steel and cast aluminum
wheels for original equipment manufacturers in the global
passenger car and light vehicle markets. The Components segment
includes results from the Companys operations that
primarily manufacture and distribute suspension, brake and
powertrain components for original equipment manufacturers in
the global passenger car and light vehicle markets. The Other
segment includes results from the Companys operations that
primarily manufacture and distribute wheel and brake products
for commercial highway and aftermarket customers in North
America. The Other segment also includes financial results
related to the corporate office and elimination of certain
intercompany activities.

Net
Sales

|                  |       |             |       |       |      |   |       |          |  |  |       |      |  
|----------------- | ----- | ----------- | ----- | ----- | ---- | - | ----- | -------- |  |  | ----- | ---- | -
|                  |       |             |       |      
|                  |       | As Restated |       |       |     
|                  |       |             |       |       |     
|                  |       | 2001        |       |       | 2000 |   |       | % Change | 
|                  |       |             |       |       |      |   |       |          | 
|                  |       |             |       |      
|                  |       | (millions)  |       |       |     
|Automotive Wheels |       | $           | 320.4 |       |      | $ | 362.9 |          |  |  | (11.7 | )%  
|Components        |       |             | 176.9 |       |      |   | 179.8 |          |  |  | (1.6  | )   
|Other             |       |             | 43.6  |       |      |   | 50.9  |          |  |  | (14.3 | )   
|                  |       |             |       |       |      |   |       |          | 
|                  | Total |             | $     | 540.9 |      |   | $     | 593.6    |  |  |       | (8.9 | )
|                  |       |             |       |       |      |   |       |          | 

The Companys net sales for the first
quarter of fiscal 2001 were $540.9 million, a decrease of
8.9% as compared to net sales of $593.6 million for the
first quarter of fiscal 2000. This decrease is primarily due to
the impact of lower light vehicle and heavy-duty vehicle
production levels in North America and the build-out

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and completion of certain original equipment
manufacturer (OEM) platforms at the Companys
North American operations.


Net sales from the Companys Automotive
Wheels segment decreased 11.7% from $362.9 million in the
first three months of fiscal 2000 to $320.4 million in the
first three months of fiscal 2001. This was primarily due to a
$50.1 million reduction in sales from the Companys
North American operations arising from lower OEM production
levels and lower market share in 2001 compared to 2000. This
decrease was partially offset by an increase of
$9.7 million in sales from the Companys foreign
operations primarily due to increasing penetration rates of
aluminum wheels in the European light vehicle market. The
increase in sales from the Companys foreign operations is
net of the impact of the approximately 7% decrease in value of
European currencies relative to the U.S. dollar between the
first quarter of 2000 and 2001.

Components net sales decreased 1.6% from $179.8
million in the three months ending April 30, 2000 to
$176.9 million in the same period in 2001. Lower OEM
production levels and the build-out and completion of certain
customer platforms reduced net sales from the Companys
North American operations by $17.9 million from the three
months ending April 30, 2000 to the same period in 2001.
This decrease was partially offset by a $15.0 million
increase in net sales arising from the acquisition of Schenk in
Maulbronn, Germany on September 2, 2000 and higher net
sales from the Companys MGG operations in Europe.

Other net sales decreased 14.3% from
$50.9 million in the three months ending April 30,
2000 to $43.6 million in the same period in 2001. This
decrease is primarily due to the significant decrease in heavy
duty Class 8 truck and trailer production in North America
between those time periods.

Gross
Profit

The Companys gross profit margin for the
first quarter of fiscal 2001 decreased to $57.6 million or
10.7% of net sales as compared to $94.3 million or 15.9% of
net sales for the first quarter of fiscal 2000.

The Companys gross profit from Automotive
Wheels decreased $25.8 million from first quarter of fiscal
2000 to the same period in fiscal 2001. Gross profit from the
Companys North American operations decreased
$28.8 million from the three months ended April 30,
2000 compared to the same period in 2001. This decrease is
primarily due to recurring manufacturing difficulties at the
Companys Somerset, Kentucky facility and lower operating
performance at various facilities in North America, which
reduced gross profit by approximately $9.4 million and
$11.7 million, respectively. Lower OEM production
requirements in North America reduced gross profit by
approximately $7.6 million. The decrease in gross profit
from the Companys North American operations was partially
offset by a $4.0 million increase in gross profit primarily
due to improved operating performance at various foreign
operations.

Gross profit from Components decreased
$8.0 million from the first quarter of fiscal 2000 to the
same period in fiscal 2001. This decrease is primarily due to
lower operating performance, lower OEM production requirements
and the inefficiencies arising from lower production.

Other gross profit decreased $2.9 million
from the first quarter of fiscal 2000 to the same period in
fiscal 2001. This decrease is primarily due to lower sales in
the commercial highway market.

Marketing,
General and Administrative

Marketing, general and administrative expenses
increased to $26.2 million or 4.8% of net sales for the
first quarter of fiscal 2001 from $24.8 million or 4.2% of
net sales for the first quarter of fiscal 2000. The increase as
a percent of net sales principally reflects lower sales volumes
in the first quarter of fiscal 2001 compared to the same period
in fiscal 2000.

Engineering
and Product Development

Engineering and product development expenses
decreased 4.8% from $6.2 million or 1.0% of net sales in
the first quarter of fiscal 2000 to $5.9 million or 1.1% of
net sales for the first quarter of fiscal 2001.

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Equity in
Losses (Earnings) of Joint Ventures

Equity in losses (earnings) of joint
ventures decreased $1.5 million to $0.4 million of losses
for the first quarter of fiscal 2001 as compared to
$1.1 million of earnings for the same period in fiscal
2000. This decrease reflects market conditions impacting the
Companys Mexico joint venture and reduced sales volume and
profit associated with the Companys interest in
Reynolds-Lemmerz Industries, Canada.

Asset
Impairments and Other Restructuring Charges

See Part I, Item 1, Notes to
Consolidated Financial Statements, Note (2)
Restatement of Consolidated Financial Statements
included herein for a discussion of certain asset impairments
and other restructuring charges.

Interest
Expense, net

Interest expense was $44.2 million for the
first quarter of fiscal 2001 compared to $38.8 million for
the first quarter of fiscal 2000. This increase reflects higher
outstanding borrowings and increased interest rates.

Liquidity and Capital Resources

Chapter 11
Filings

As described under Part I,
Item 1-Note (11) Subsequent Events herein,
the Company and certain subsidiaries filed voluntary petitions
for reorganization under Chapter 11 of the Bankruptcy Code.
The matters described under this caption Liquidity and
Capital Resources, to the extent that they relate to
future events or expectations, may be significantly affected by
the Chapter 11 Filings. Those proceedings will involve, or
result in, various restrictions on the Companys
activities, limitations on financing, the need to obtain
Bankruptcy Court approval for various matters and uncertainty as
to relationships with vendors, suppliers, customers and others
with whom the Company may conduct or seek to conduct business.

DIP
Facility

On December 17, 2001, the Company entered
into a Revolving Credit and Guaranty Agreement among the
Company, as borrower, certain subsidiaries of the Company, as
guarantors, the lenders parties thereto, CIBC World Markets
Corp., as lead arranger, Bank of America, N.A. and Salomon
Smith Barney, Inc., as syndication agents, and Canadian Imperial
Bank of Commerce, as administrative agent for the lenders (the
DIP Agreement). Pursuant to the DIP Agreement, the
Company has access to a revolving credit facility (the DIP
Facility) not to exceed $200 million with a sub-limit
of $15 million for letters of credit. The Company received
Bankruptcy Court approval for the DIP Agreement on
December 21, 2001 (on an interim basis) and on
January 28, 2002 (on a final basis). The DIP Facility is
scheduled to terminate on the earlier of (a) the date of
the substantial consummation of a Plan of Reorganization and
(b) June 5, 2003 (eighteen months after the date of
the Chapter 11 Filings). As of February 14, 2002, the
Company had $4.0 million in cash borrowings and had
obtained $2.7 million in letters of credit pursuant to the
DIP Facility.

Proceeds of loans made under the DIP Facility
will be used for working capital and other general corporate
purposes of the Company and its subsidiaries, generally as set
forth in the Companys budget and otherwise as permitted
under the DIP Agreement and approved by the Bankruptcy Court.
The DIP Agreement permits the Company to make loans to, and
obtain letters of credit under the DIP Facility to support the
operations or obligations of, its foreign subsidiaries in
Germany and Mexico, in an aggregate principal amount not to
exceed $20 million at any one time outstanding, to fund
capital expenditures, required joint venture obligations, rebate
exposure of such foreign subsidiaries or costs incurred in
connection with plant closures, restructuring or the sale or
termination of businesses of foreign subsidiaries in Germany.
Such loans may be funded either from the Companys
operations or from borrowings under the DIP Facility.

Beginning January 31, 2002, the DIP Facility
requires compliance with monthly minimum consolidated and
domestic EBITDA tests and limits on capital expenditures. In
addition to the foregoing financial covenants, the DIP Agreement
imposes certain other restrictions on the Company and its
subsidiaries,

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including with respect to their ability to incur
liens, enter into mergers, incur indebtedness, give guarantees,
make investments, pay dividends or make other distributions and
dispose of assets.


The obligations of the Company and its subsidiary
guarantors under the DIP Facility have super-priority
administrative claim status as provided under the Bankruptcy
Code. Under the Bankruptcy Code, a super-priority claim is
senior to secured and unsecured pre-petition claims and all
administrative expenses incurred in the Chapter 11 case. In
addition, with certain exceptions (including a carve-out for
unpaid professional fees and disbursements), the DIP Facility
obligations are secured by (1) a first-priority lien on all
unencumbered pre- and post-petition property of the Company and
its subsidiary guarantors, (2) a first-priority priming
lien on all property of the Company and its subsidiary
guarantors that is encumbered by the existing liens securing the
Companys pre-petition secured lenders and (3) a
junior lien on all other property of the Company and its
subsidiary guarantors that is encumbered by pre-petition liens.

On January 15, 2002, the Company and the
initial lenders under the DIP Agreement entered into a First
Amendment to the DIP Agreement. This First Amendment finalized
the terms of the borrowing base formula of eligible assets which
is used to calculate the amounts which the Company is able to
borrow under the DIP Facility. The amount available under the
facility as of February 14, 2002, after taking into account
the aforementioned borrowings and letters of credit, was
$90.1 million.

Borrowings under the DIP Facility may be either
ABR loans or Eurodollar loans. ABR loans are priced at 2.00% per
annum plus the greatest of (i) the prime rate,
(ii) the base CD rate plus 1.0% per annum, and
(iii) the federal funds effective rate plus 0.5% per annum.
Eurodollar loans under the DIP Facility are priced at LIBOR plus
3.50% per annum. In addition, the Company pays a commitment fee
of 0.75% per annum on the unused amount of the DIP Facility
commitment, payable monthly in arrears. Letters of credit are
priced at 3.50% per annum on the undrawn stated amount in
addition to a fronting fee of 0.25% per annum.

The DIP Facility provides for the post-petition
cash payment at certain intervals of interest accruing under the
Companys pre-petition credit agreement if certain tests
are satisfied relating to the liquidity position and earnings of
the Company and its subsidiaries, and the repatriation of funds
from foreign subsidiaries.

The principal sources of liquidity for the
Companys future operating, capital expenditure, facility
closure and other restructuring requirements are expected to be
(i) cash flows from operations, (ii) proceeds from the
sale of non-core assets and business, (iii) borrowings
under various foreign bank and government loans and
(iv) and borrowings under the DIP Facility. While the
Company expects that such sources will meet these requirements,
there can be no assurances that such sources will prove to be
sufficient.

Credit
Agreement

On February 3, 1999, the Company entered
into a third amended and restated credit agreement (the
Credit Agreement). Pursuant to the Credit Agreement, a
syndicate of lenders agreed to lend to the Company up to
$450 million in the form of a senior secured term loan
facility and up to $650 million in the form of a senior
secured revolving credit facility. The Company and all of its
existing and future material domestic subsidiaries guarantee
such term loan and revolving credit facilities. Such term loan
and revolving facilities are secured by a first priority lien in
substantially all of the properties and assets of the Company
and its material 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 April 30, 2001 there was
$362.3 million outstanding under the term loan facilities
that represents the total amount available under the facility.

At April 30, 2001, there was
$398.6 million outstanding under the revolving credit
facility and $240.2 million available. As a result of the
Debtors Chapter 11 Filings, all additional
availability under the Credit Agreement has been terminated,
although letters of credit amounting to approximately
$11.0 million remain outstanding.

On July 12, 2000, the Company entered into a
first amendment to the Credit Agreement. Pursuant to such first
amendment, the Company was permitted to repurchase shares of its
common stock and the limitation on capital expenditures was
deleted. The changes in the first amendment have been superseded
by

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subsequent amendments to the Credit Agreement. On
December 8, 2000, the Company entered into a second
amendment to the Credit Agreement. Pursuant to such second
amendment, financial covenants regarding the leverage ratio, the
interest coverage ratio and the fixed charge coverage ratio were
modified and a financial covenant regarding the senior leverage
ratio was added. In addition, an annual limit on capital
expenditures was added, the stock repurchase authority was
deleted, a cumulative limit on acquisitions was deleted and the
interest rate was increased based on changes in the leverage
ratio. On March 9, 2001, the Company entered into a third
amendment to the Credit Agreement. Pursuant to such third
amendment, financial covenants regarding the leverage ratio were
amended and the interest rate was increased based on changes in
the leverage ratio. On April 20, 2001, the Company entered
into a fourth amendment to the Credit Agreement. Pursuant to
such fourth amendment, financial covenants regarding the
leverage ratio, the interest coverage ratio, the fixed charge
coverage ratio and the senior leverage ratio were amended. In
addition, certain limits on indebtedness under the revolving
credit facility were deleted, the covenant on use of proceeds
from asset sales was amended, the capital expenditure limits
were amended and monthly reporting was added.


Trade
Securitization Agreement

In April 1998, the Company entered into a
three-year trade securitization agreement pursuant to which the
Company and certain of its subsidiaries sold, and continued to
sell on an ongoing basis, a portion of their accounts
receivables to a special purpose entity (Funding
Co.), which is wholly owned by the Company. Accordingly,
the Company and such subsidiaries, irrevocably and without
recourse, transferred and continued to transfer substantially
all of their U.S. dollar denominated trade accounts
receivable to Funding Co. Funding Co. then sold and
continued to sell such trade accounts receivable to an
independent issuer of receivable-backed commercial paper. The
Company has collection and administrative responsibilities with
respect to all the receivables that are sold. Receivables sold
at April 30, 2001 total $119.2 million.

This trade securitization agreement expired on
May 1, 2001. From that time up to the filing under
Chapter 11, the Company financed the amount of receivables
previously sold under the securitization agreement with its
revolving credit facility. The impact of the discontinued
securitization program had an adverse impact on liquidity of
approximately $100 million.

Refinancing

On June 21, 2001, the Company received
formal approval for Consent and Amendment No. 5 to the
Credit Agreement. Such amendment provided for and/or permits,
among other things, the issuance and sale of certain senior
unsecured notes (the Senior Notes) by the Company, a
receivables securitization transaction, and changes to the
various financial covenants contained in the Credit Agreement in
the event that the issuance and sale of the Senior Notes does
occur. The amendment also provided the Company with the option
of establishing a new B tranche of term loans (the
B Term Loan) under the Credit Agreement. The
amendment also provided for the net cash proceeds of the
issuance and sale of the Senior Notes to be applied as follows:
(i) the first $140,000,000, to prepay outstanding term
loans (in direct order of stated maturity) under the Credit
Agreement; (ii) the next $60,000,000, at the Companys
option, to prepay indebtedness of the Companys foreign
subsidiaries; (iii) the next $50,000,000, to prepay
outstanding term loans (in direct order of stated maturity)
under the Credit Agreement; (iv) the next $50,000,000, at
the Companys option, to repurchase or redeem a portion of
the Companys existing senior subordinated notes; and
(v) the remainder, if any, to prepay outstanding term loans
(in direct order of stated maturity) and then to reduce the
revolving credit commitments under the Credit Agreement.

On June 22, 2001, the Company received
$291.1 million in net proceeds from the issuance of
11 7/8% senior unsecured notes due 2006 in the original
principal amount of $300 million (the
11 7/8% Notes). In

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addition, on July 2, 2001, the Company
received $144.3 million in net proceeds from the issuance
of the B Term Loan. These aggregate net proceeds totaled
$435.4 million and were used as follows ($ in
millions):


|                                                                                                                         |       |   |       |       | 
|------------------------------------------------------------------------------------------------------------------------ | ----- | - | ----- | ----- | 
|Permanent reduction of Credit Agreement
	indebtedness with a principal balance of $334.3, plus $2.2 in
	accrued interest |       | $ | 336.5 |      
|Payment on foreign indebtedness with a principal
	balance of $47.0.                                                      |       |   | 47.0  |      
|Repurchase of certain Senior Subordinated Notes
	with a face value of $47.2, plus $1.0 in accrued interest               |       |   | 37.6  |      
|Payment of fees and expenses on the above                                                                                |       |   | 0.8   |      
|Remaining cash proceeds held by Company                                                                                  |       |   | 13.5  |      
|                                                                                                                         |       |   |      
|                                                                                                                         | Total |   | $     | 435.4 | 
|                                                                                                                         |       |   |      

The 11 7/8% Notes mature on June 15,
2006 and require interest payments semi-annually on each
June 15 and December 15. The 11 7/8% Notes may
not be redeemed prior to June 15, 2005; provided, however,
that the Company may, at any time and from time to time prior to
June 15, 2004, redeem up to 35% of the aggregate principal
amount of the 11 7/8% Notes at a price equal to 111.875% of
the aggregate principal amount so redeemed, plus accrued and
unpaid interest to the date of redemption, with the Net Cash
Proceeds (as defined) of one or more Equity Offerings (as
defined), provided that at least $195.0 million aggregate
principal amount of the 11 7/8% Notes remain outstanding.
On or after June 15, 2005, the Company may, at its option,
redeem the 11 7/8% Notes upon the terms and conditions set
forth in the indenture.

The 11 7/8% Notes rank equally to all other
existing and future senior debt but are effectively subordinated
to the borrowings under the Credit Agreement to the extent of
collateral securing the Credit Agreement. The 11 7/8% Notes
are effectively subordinated to all liabilities (including trade
and intercompany obligations) of the Companys subsidiaries
which are not guarantors of the Credit Agreement and the 2001
Term Loan. The indenture governing the 11 7/8% Notes
provide for certain restrictions regarding additional debt,
dividends and other distributions, additional stock of
subsidiaries, certain investments, liens, transactions with
affiliates, mergers, consolidations, and the transfer and sales
of assets. The indenture also provides that a holder of the
11 7/8% Notes may, under certain circumstances, have the
right to require that the Company repurchase such holders
11 7/8% Notes upon a change of control of the Company. The
11 7/8% Notes are unconditionally guaranteed as to the
payment of principal, premium, if any, and interest, jointly and
severally by the Companys material domestic subsidiaries.

Pursuant to an Exchange Offer Registration Rights
Agreement (the Registration Rights Agreement), the
Company agreed to use its best efforts to file and have declared
effective an Exchange Offer Registration Statement with respect
to an offer to exchange the 11 7/8% Notes for other notes
of the Company with terms substantially identical to the
11 7/8% Notes. The Company also agreed to consummate such
exchange offer on or prior to December 19, 2001. As a
result of the Chapter 11 Filings by the Debtors on
December 5, 2001, no interest payment was made when due on
December 15, 2001, and the registration of the Notes has
not occurred.

The B Term Loans amortize at the rate of 1%
of principal per year and mature in full on December 31,
2005 (at which time all remaining unpaid principal will be due
and payable). The B Term Loans rank equally with all other
loans outstanding under the Credit Agreement and share equally
in the guarantees and collateral granted by the Company and its
subsidiaries to secure the amounts outstanding under the Credit
Agreement. The B Term Loans are also subject to the same
covenants and events of default which govern all other loans
outstanding under the Credit Agreement.

The interest rates of the B Term Loans are,
at the option of the Company, based upon either an adjusted
eurocurrency rate (the eurocurrency rate) or the
rate which is equal to the highest of CIBCs prime rate,
the federal funds rate plus  1/2 of 1% and the base
certificate of deposit rate plus 1% (the ABR rate),
in each case plus an applicable margin. For B Term Loans
which bear interest at the eurocurrency rate, the applicable
margin is 5.0%, and for B Term Loans which bear interest at
the ABR rate, the applicable margin is 4.0%. The Company may
elect interest periods of one, two, three or six months for
eurocurrency loans. Interest is computed on the basis of actual
number of days elapsed in a year of 360 days (or 365 or
366 days, as the case

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may be, for ABR loans based on the prime rate).
Interest is payable at the end of each interest period and, in
any event, at least every three months.


The Credit Agreement, as amended, contains
certain financial covenants regarding interest coverage ratios,
fixed charge coverage ratios, leverage ratios and capital
spending limitations. If compliance with these covenants were
calculated using the Companys restated financial results
for the first quarter of fiscal 2001, certain of these covenants
as of April 30, 2001 would have been violated.

All amounts outstanding with respect to the
Credit Agreement and the aforementioned notes are classified as
a current liability in the consolidated financial statements as
of April 30, 2001 included herein. As more fully discussed
above, certain portions of the amounts outstanding at
April 30, 2001 under the Credit Agreement and the previous
senior unsecured subordinated debentures were refinanced in the
second quarter of fiscal 2001 with the proceeds of the
11 7/8% Notes and the B Term Loan. The amounts
outstanding with respect to the 11 7/8% Notes and the
B Term Loan will be classified as a current liability upon
their issuance.

Other
Liquidity Matters

During the second quarter of fiscal 2000, the
Board of Directors approved the repurchase of up to an aggregate
of $30.0 million of the Companys outstanding common
stock. The Company repurchased approximately 1.9 million
shares of its common stock for an aggregate purchase price of
approximately $25.7 million during fiscal 2000.

Certain of the operating leases covering leased
assets with an original cost of approximately $68.0 million,
contain provisions which, if certain events occur or conditions
are met, including termination of the lease, might require the
Company to purchase or re-sell the leased assets within a
specified period of time, generally one year, based on amounts
specified in the lease agreements. On July 18, 2001, the
Company received notification of termination from a lessor with
respect to leased assets having approximately $25.0 million
of original cost (which termination was not to be effective for
one year). The Company has not agreed with the lessor that a
termination has occurred at the time of the notice and has
continued to use the leased assets.

The Company received cash in the amount of
$26.4 million and $9.7 million during fiscal years
2000 and 1999, respectively, in connection with the early
termination of various cross-currency interest rate swap
agreements. These proceeds reduced the receivable recorded by
the Company at the time of the early termination resulting from
accounting for mark-to-market adjustments during the term of the
agreement. There were no terminations of cross-currency interest
rate swap agreements during the quarters ended April 30,
2001 and 2000, respectively.

Cash
Flows

Between January 31, 2001 and the date of the
Chapter 11 Filings, the Companys operating cash flows
were adversely affected by (i) a further decrease in
operating margins, (ii) the effect of discontinuing the
receivables securitization program, less the effect on the
Company of its participation in separate accelerated payment
programs with some of its major customers starting in
September 2001 and (iii) further contraction of terms
required by trade creditors.

Since the Chapter 11 Filings, the Company
believes its operating cash flows will be impacted by, among
other things, (i) the need to fund the significant
professional fees and other costs directly related to the
Chapter 11 Filings, (ii) the cash requirements for the
closure and restructuring of certain facilities, and
(iii) the rate and level post-petition trade credit
available to the Company. The amount of interest expense should
be substantially less due to the effect of the stay on payment
of pre-petition obligations.

The Companys operations used
$55.4 million in cash in the first quarter of fiscal 2001
compared to a use of $118.7 million in the first quarter of
fiscal 2000. This improvement principally reflects lower
inventory levels and supplier payments consistent with lower
sales volumes.

Capital expenditures for the first quarter of
fiscal 2001 were $29.9 million. These expenditures were
primarily for additional machinery and equipment to improve
productivity and reduce costs, to meet demand

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for new vehicle platforms and to meet expected
requirements for the Companys products. The Company
anticipates capital expenditures for fiscal 2001 will be
approximately $125.0 million relating primarily to new
vehicle platforms, and maintenance and cost reduction programs.


Market
Risks

In the normal course of business the Company is
exposed to market risks arising from changes in foreign exchange
rates, interest rates and raw material prices. The Company
selectively uses derivative financial instruments to manage
these risks, but does not enter into any derivative financial
instruments for trading purposes.

Foreign
Exchange

The Company has global operations and thus makes
investments and enters into transactions in various foreign
currencies. In order to minimize the risks associated with
global diversification, the Company first seeks to internally
net foreign exchange exposures, and uses derivative financial
instruments to hedge any remaining net exposure. The Company
uses forward foreign currency exchange contracts on a limited
basis to reduce the earnings and cash flow impact of
non-functional currency denominated transactions. The gains and
losses from these hedging instruments generally offset the gains
or losses from the hedged items and are recognized in the same
period the hedged items are settled. In addition, the Company
has entered into seven cross currency interest rate swaps to
hedge a portion of its investments in Europe. The currency
effects of these swaps, net of tax, are reflected in the
cumulative translation adjustments component of other
accumulated comprehensive income, where they offset the gain or
loss associated with the investments in Europe. In addition, the
Company has designated a term loan, totaling 146.5 million
Deutschemarks, as a hedge of foreign currency exposure of its
net investment in its German operations.

Commodities

The Company relies upon the supply of certain raw
materials in its production process and has entered into firm
purchase commitments for aluminum and steel. The Company manages
the exposures associated with these commitments primarily
through the terms of its supply and procurement contracts.
Additionally, the Company may use forward contracts to hedge
against changes in certain specific commodity prices of the
purchase commitments outstanding. The Company had no forward
contracts during the quarters ended April 30, 2001 and 2000.

Other
Matters

The Company does not believe that sales of its
products are materially affected by inflation, although there
can be no assurance that such an effect will not occur in the
future. In accordance with industry practice, the costs or
benefits of fluctuations in aluminum prices are passed through
to customers. In the United States, the Company adjusts the
sales prices of its aluminum wheels every three months, if
necessary, to reflect fully any increase or decrease in the
price of aluminum. As a result, the Companys net sales of
aluminum wheels are adjusted, although gross profit per wheel is
not materially affected. From time to time, the Company enters
into futures contracts or purchase commitments solely to hedge
against possible aluminum price changes that may occur between
the dates of aluminum wheel price adjustments. Pricing and
purchasing practices are similar in Europe, but opportunities to
recover increased material costs from customers are more limited
than in the United States.

The value of the Companys consolidated
assets and liabilities located outside the United States (which
are translated at period end exchange rates) and income and
expenses (which are translated using average rates prevailing
during the period) have been affected by the translation values,
particularly the Euro (as defined under Euro
Conversion) and the Brazilian Real. Such translation
adjustments are reported as a separate component of
stockholders equity. Foreign exchange rate fluctuations
could have an increased impact on the Companys reported
results of operations. However, due to the self-sustaining
nature of the Companys foreign operations (which maintain
their own credit facilities, enter into borrowings and swap

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agreements and incur costs in their respective
local currencies), the Company believes it can effectively
manage the effect of these currency fluctuations. In addition,
in order to further hedge against such currency rate
fluctuations, the Company has entered into certain foreign
cross-currency interest rate swap arrangements.


The Companys net sales are continually
affected by pressure from its major customers to reduce prices.
The Companys emphasis on reduction of production costs,
increased productivity and improvement of production facilities
has enabled the Company to respond to this pressure.

New
Accounting Pronouncements

In August 2001, the Financial Accounting
Standards Board (FASB) issued Statement of Financial
Accounting Standards (SFAS) No. 144,
Accounting for the Impairment or Disposal of Long-Lived
Assets. SFAS No. 144 supersedes FASB No. 121,
Accounting for the Impairment of Long-lived Assets and for
Long-lived Assets to be Disposed Of. The statement retains
the previously existing accounting requirements related to the
recognition and measurement of the impairment of long-lived
assets to be held and used while expanding the measurement
requirements of long-lived assets to be disposed of by sale to
include discontinued operations. It also expands the previously
existing reporting requirements for discontinued operations to
include a component of an entity that either has been disposed
of or is classified as held for sale. The provisions of this
Statement are effective for fiscal years beginning after
December 15, 2001. The Company has not yet completed its
analysis of the impact of SFAS No. 144 on its consolidated
financial position or results of operations upon adoption.

In June 2001, the FASB issued SFAS
No. 143, Accounting for Asset Retirement
Obligations. SFAS No. 143 requires that the fair
value of a liability for an asset retirement obligation be
recognized in the period in which it is incurred if a reasonable
estimate of fair value of the liability can be made. Such
associated asset retirement costs are to be capitalized as part
of the carrying amount of the long-lived asset. SFAS also
contains additional disclosure requirements regarding
descriptions of the asset retirement obligations and
reconciliations of changes therein. The provisions of this
Statement are effective for fiscal years beginning after
June 15, 2002. The Company has not yet completed its
analysis of the impact of SFAS No. 143 on its consolidated
financial position or results of operations upon adoption.

In June 2001, the FASB issued SFAS
No. 142, Goodwill and Other Intangible Assets.
SFAS No. 142 requires that goodwill be reviewed for
impairment annually, rather than amortized into earnings. The
provisions of this Statement are effective for fiscal years
beginning after December 15, 2001. Amortization of goodwill
will cease upon adoption of the Statement by the Company on
February 1, 2002. At that valuation date, the Company will
test goodwill for impairment, and any losses will be recognized
as a cumulative effect of a change in accounting principle.
Other acquired identifiable intangible assets having estimable
useful lives will be separately stated from goodwill, and will
continue to be amortized over their estimated useful lives. As
of February 1, 2002, the Company expects to have
unamortized goodwill and other intangible assets of
approximately $873.6 million, which will be subject to the
transition provisions of SFAS No. 142. Amortization expense
related to goodwill and other intangible assets was
$27.4 million, $27.5 million and $16.6 million
for fiscal 2000, 1999 and 1998, respectively. The Company
believes it will incur a significant write-down in the value of
its goodwill upon adoption of SFAS No. 142.

In June 2001, the FASB issued SFAS
No. 141, Business Combinations. SFAS
No. 141 requires that all business combinations (initiated
after June 30, 2001) be accounted for under the purchase
method of accounting. Use of the pooling-of-interests method is
no longer permitted. Adoption of this standard is not
anticipated to have a material effect on the Companys
financial position or results of operations as a result of
future business combinations, as the Company has historically
accounted for such transactions under the purchase method.

In September 2000, the FASB issued SFAS
No. 140, Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities 
a replacement of FASB Statement No. 125. This
statement revises the standards for accounting for
securitizations and other transfers of financial assets and
collateral and requires certain financial statement disclosures.
SFAS 140 is effective for transactions occurring

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after March 31, 2001. The new disclosure
requirements are effective for fiscal years ending after
December 15, 2000. Adoption of this replacement standard is
not anticipated to have a material effect on the Companys
financial position or results of operations when adopted.


Euro
Conversion

On January 1, 2000, certain member countries
of the European Union irrevocably fixed the conversion rates
between their national currencies and a common currency, the
Euro, which became the legal currency on that date.
The participating countries former national currencies
continue to exist as denominations of the Euro until
January 1, 2002. The Company has established a steering
committee that is monitoring the business implications of
conversion to the Euro, including the need to adapt internal
systems to accommodate Euro-denominated transactions. While the
Company is still in various stages of assessments and
implementation, the Company does not expect the conversion to
the Euro to have a material affect on its financial condition or
results of operations.




Item 3. Quantitative and Qualitative
Disclosures about Market Risk

For the period ended April 30, 2001, the
Company did not experience any material change in market risk
exposures affecting the quantitative and qualitative disclosures
as presented in the Companys Annual Report on
Form 10-K/A for the year ended January 31, 2001.

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PART II. OTHER INFORMATION






Item 3. Legal Proceedings


On December 5, 2001, the Company, 30 of its
wholly-owned domestic subsidiaries and one wholly-owned Mexican
subsidiary filed a voluntary petition for reorganization under
Chapter 11 of the Bankruptcy Code These petitions were
filed in the United States Bankruptcy Court for the District of
Delaware, Case No. 01-11490-MFW. Management of the Company
continues to operate the business of the Debtors as a
debtors-in-possession under Sections 1107 and 1108 of the
Bankruptcy Code. In this proceeding, the Debtors intend to
propose and seek confirmation of a plan or plans or
reorganization. Unless lifted by the order of the Bankruptcy
Court, pursuant to the automatic stay provision of the
Bankruptcy Code, all pending pre-petition litigation against the
Debtors is currently stayed.

Following the announcements of the restatements,
several lawsuits were filed by and purportedly on behalf of the
shareholders of the Company naming as defendants a combination
of the Company, Mr. Cucuz and Mr. Shovers. These
lawsuits are seeking class action status, but no class has yet
been certified in these actions. Due to the Companys
bankruptcy filing, this litigation against the Company is
subject to the automatic stay.




Item 6. Exhibits and Reports on
Form 8-K

(a) Exhibits

|               |      |  |             | 
|-------------- | ---- |  | ----------- | 
|Exhibit Number |      |  | Description
|               |      |  |            
|               | None |  |             | 

(b) Reports on Form 8-K



| |                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| | During the fiscal quarter ended April 30,
	2001, the Company filed a Current Report on Form 8-K with
	the Securities and Exchange Commission on March 9, 2001.

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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 LEMMERZ INTERNATIONAL, INC.
|
| | /s/ KENNETH A. HILTZ             
| |                                  
| | Kenneth A. Hiltz                 
| | Chief Financial Officer          
|
| | /s/ HERBERT S. COHEN             
| |                                  
| | Herbert S. Cohen                 
| | Chief Accounting Officer         

February 19, 2002

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