As the latest installment of earnings season winds down, we've still got a few straggler reports to get through. Automotive wheelwright Hayes Lemmerz (NASDAQ:HAYZ), for instance, which sells to automakers such as DaimlerChrysler (NYSE:DCX), Ford (NYSE:F), GM (NYSE:GM), and Toyota (NYSE:TM). Hayes reports its Q4 and full-year 2006 results Wednesday morning.

What analysts say:

  • Buy, sell, or waffle? Analysts have all but given up on this sector of the automotive world (and after Superior Industries' (NYSE:SUP) report last month, you can't really blame them). As far as we can tell, absolutely no one follows Hayes Lemmerz.
  • Revenues and earnings. No analysts means no revenue or earnings estimates to miss. I guess that's good news.

What management says:
The big news at Hayes this quarter came in the form of an announced "rights offering" -- or in plain English, an offer to existing shareholders to purchase additional shares in proportion to the interest in the company they already own. The extra shares can be had for just $3.25 per stub (a significant discount to the stock's price on the date of the announcement), raising as much as $180 million that will be used to pay down some high-interest debt owed by its "HLI" subsidiary.

Needless to say, the chance to buy discounted shares sparked a run on the stock, which is up 51% since the rights offering was announced. Individual investors, pleased at this run-up, might want to rethink that reaction, however. If it proceeds as planned, the rights offering will essentially amount to a recapitalization, with 55.4 million newly-issued shares dwarfing Hayes current 35.5 million share count, and diluting existing shareholders out of much of their ownership interest. Meanwhile, Germany's Deutsche Bank (NYSE:DB), which already owns a 4.1% stake in Hayes', and a unit of hedge fund Silver Point Capital have jointly agreed to buy up any offered shares that other shareholders do not purchase. This deal will almost certainly wind up giving them a significant stake in the company.

What management does:
The farther down Hayes' income statement you go, the worse things look, as massive restructuring charges taken in Q4 2006 weigh heavily on the net. That said, towards the top of the statement, things actually look a bit brighter. Gross margins appear to be on the rise, and on a rolling basis, the firm has achieved operating profitability for two quarters running.





























All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
Granted, Hayes hasn't reported a quarterly net profit since early 2004. And yet, when you look at the numbers, it actually appears to be in better shape than rival Superior Industries today. Whereas mid-last-year, the two firms had roughly equal gross margins, today Superior is grossing just a penny-and-a-half out of every dollar of revenue, while Hayes has turned things around somewhat and is grossing closer to eight-and-a-half-pennies.

It's still not a fortune, granted, but does suggest that as messy as the bottom line looks, Hayes is doing something right. Later this week, once the earnings come out, we'll take a look at just what that something might be.

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Fool contributor Rich Smith does not own shares of any company named above.