SOURCE: Shiloh Industries

February 26, 2014 07:30 ET

Shiloh Industries Reports First Quarter Results

VALLEY CITY, OH--(Marketwired - Feb 26, 2014) - Shiloh Industries, Inc. (NASDAQ: SHLO) today reported financial results for its first quarter ended January 31, 2014.

First Quarter Fiscal Year 2014 vs. 2013 Highlights:

  • Sales revenue for the quarter was $183.5 million, an improvement of 26.2 percent.
  • Gross profit for the quarter improved over 66 percent and was $17.8 million, or 9.7 percent of sales revenue.
  • Operating income for the quarter improved 94 percent to $8.0 million.
  • Net income per share diluted improved 93 percent to $0.29 for the quarter, compared to net income of $0.15 per share diluted.

First Quarter Fiscal Year 2014 Results:

The Company reported sales revenue of $183.5 million for the first quarter of fiscal year 2014, an increase of 26 percent from $145.4 million for the first quarter of fiscal year 2013. The increased revenues reflect a 3.6 percent improvement in the North American car and light truck industry production volumes over the first quarter of 2013, with new product launches and sales added from acquisitions.

Gross profit for the first quarter improved 66 percent to $17.8 million, or 9.7 percent of sales revenue, compared to $10.7 million, or 7.4 percent of sales revenue, for the first quarter of 2013. Increased productivity resulting from a sustained focus on continuous improvements in operating and quality metrics along with the increased sales volumes contributed to the increase in gross profit.

For the first quarter of fiscal 2014, operating income improved over 94 percent to $8.0 million, compared to $4.1 million in the first quarter of fiscal year 2013.

The Company reported a net income increase of 91 percent for the first quarter of fiscal year 2014 of $4.9 million, or $0.29 per share diluted compared to the first quarter of 2013 net income of $2.6 million, or $0.15 per share diluted, an improvement of 93 percent.

Cash Flow

Net cash flow provided by operating activities for the first quarter of 2014 totaled $5.9 million compared to a use of cash of $1.7 million in the first quarter of 2013. This was accomplished while continuing our investments in both maintenance and technology capital.

"Shiloh is expanding capacity and upgrading equipment at key facilities to the latest technologies as we continue to leverage the growing demand for automotive lightweight solutions," said Ramzi Hermiz, president and chief executive officer. "We are focused on developing new innovations and tools that will expand our capabilities, product mix, and customer diversification."

A conference call to discuss first quarter 2014 results will be held on Wednesday, February 26, 2014, at 11:00 a.m. EST. To listen to the conference call, dial (888) 461-2024 approximately five minutes prior to the start time and request the Shiloh Industries first quarter conference call.

Headquartered in Valley City, Ohio, Shiloh Industries, Inc. is a leading supplier, providing lightweighting and noise, vibration and harshness (NVH) solutions to automotive, commercial vehicle and other industrial markets. Shiloh delivers these solutions through the design, engineering and manufacturing of first operation blanks, engineered welded blanks, complex stampings, modular assemblies, highly engineered aluminum die casting and machined components and its patented ShilohCore™ acoustic laminate metal solution serving the body-in-white, emission, powertrain, structural and seating needs of OEM and Tier 1 customers. The company has multiple locations across North America, including Georgia, Indiana, Kentucky, Michigan, Ohio, Tennessee, Wisconsin and Mexico, and has approximately 2,000 employees. For more information visit

Certain statements made by the Company in this release and other periodic oral and written statements, including filings with the Securities and Exchange Commission, regarding the Company's operating performance, events or developments that the Company believes or expects to occur in the future, including those that discuss strategies, goals, outlook or other non-historical matters, or which relate to future sales, earnings expectations, cost savings, awarded sales, volume growth, earnings or general belief in the Company's expectations of future operating results are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements are made on the basis of management's assumptions and expectations. As a result, there can be no guarantee or assurance that these assumptions and expectations will in fact occur. The forward-looking statements are subject to risks and uncertainties that may cause actual results to materially differ from those contained in the statements. Some, but not all, of the risks include the ability of the Company to accomplish its strategic objectives with respect to implementing its sustainable business model; the ability to obtain future sales; changes in worldwide economic and political conditions, including adverse effects from terrorism or related hostilities; costs related to legal and administrative matters; the Company's ability to realize cost savings expected to offset price concessions; the Company's ability to successfully integrate acquired businesses; inefficiencies related to production and product launches that are greater than anticipated; changes in technology and technological risks; increased fuel and utility costs; work stoppages and strikes at the Company's facilities and that of the Company's customers or suppliers; the Company's dependence on the automotive and heavy truck industries, which are highly cyclical; the dependence of the automotive industry on consumer spending, which is subject to the impact of domestic and international economic conditions, including increased energy costs affecting car and light truck production, and regulations and policies regarding international trade; financial and business downturns of the Company's customers or vendors, including any production cutbacks or bankruptcies; increases in the price of, or limitations on the availability of, steel, the Company's primary raw material, or decreases in the price of scrap steel; the successful launch and consumer acceptance of new vehicles for which the Company supplies parts; the occurrence of any event or condition that may be deemed a material adverse effect under the Credit Agreement or a decrease in customer demand which could cause a covenant default under the Credit Agreement; pension plan funding requirements; and other factors, uncertainties, challenges and risks detailed in the Company's other public filings with the Securities and Exchange Commission. Any or all of these risks and uncertainties could cause actual results to differ materially from those reflected in the forward-looking statements. These forward-looking statements reflect management's analysis only as of the date of this release.

The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. In addition to the disclosures contained herein, readers should carefully review risks and uncertainties contained in other documents the Company files from time to time with the Securities and Exchange Commission.

(Dollar amounts in thousands)  
    January 31,
    October 31,
Cash and cash equivalents   $ 1,023     $ 398  
Accounts receivable, net of allowance for doubtful accounts of $294 and $341 at January 31, 2014 and October 31, 2013, respectively     98,977       116,837  
Related-party accounts receivable     2,060       673  
Inventories, net     48,645       42,924  
Deferred income taxes     2,828       2,829  
Prepaid expenses     3,804       3,095  
Other assets     23       23  
    Total current assets     157,360       166,779  
Property, plant and equipment, net     197,835       197,874  
Goodwill     6,768       6,768  
Intangible assets, net     17,060       17,605  
Deferred income taxes     328       --  
Other assets     2,708       2,927  
    Total assets   $ 382,059     $ 391,953  
Current debt   $ 771     $ 882  
Accounts payable     77,736       87,977  
Accrued income taxes     1,530       1,666  
Other accrued expenses     24,407       26,416  
    Total current liabilities     104,444       116,941  
Long-term debt     116,726       119,384  
Long-term benefit liabilities     21,331       21,287  
Deferred income taxes     1,048       969  
Other liabilities     2,286       2,223  
    Total liabilities     245,835       260,804  
Commitments and contingencies                
Stockholders' equity:                
  Preferred stock, $.01 per share; 5,000,000 shares authorized; no shares issued and outstanding at January 31, 2014 and October 31, 2013, respectively     --       --  
  Common stock, par value $.01 per share; 25,000,000 shares authorized; 17,131,784 and 17,031,316 shares issued and outstanding at January 31, 2014 and October 31, 2013, respectively     171       170  
  Paid-in capital     66,855       66,312  
  Retained earnings     95,688       90,749  
  Accumulated other comprehensive loss: Pension related liability, net     (26,490 )     (26,082 )
    Total stockholders' equity     136,224       131,149  
    Total liabilities and stockholders' equity   $ 382,059     $ 391,953  
(Amounts in thousands, except per share data)  
    Three Months Ended
January 31,
    2014     2013  
Revenues   $ 183,539     $ 145,383  
Cost of sales     165,693       134,645  
  Gross profit     17,846       10,738  
Selling, general and administrative expenses     10,945       6,614  
Asset recovery, net of impairments     (1,120 )     (7 )
  Operating income     8,021       4,131  
Interest expense     886       430  
Interest income     3       6  
Other expense     18       23  
  Income before income taxes     7,120       3,684  
Provision for income taxes     2,181       1,101  
  Net income   $ 4,939     $ 2,583  
Earnings per share:                
Basic earnings per share   $ 0.29     $ 0.15  
Basic weighted average number of common shares     17,113       16,988  
Diluted earnings per share   $ 0.29     $ 0.15  
Diluted weighted average number of common shares     17,208       17,040  
(Dollar amounts in thousands)
    Three Months Ended
January 31,
    2014     2013
Net income   $ 4,939     $ 2,583
Other comprehensive income, net of tax:              
  Defined benefit pension plans & other postretirement benefits              
    Actuarial net loss     (540 )     --
    Asset net loss     (386 )     --
    Recognized gain     269       --
    Income tax - benefit     249       --
  Total defined benefit pension plans & other post retirement benefits, net of tax     (408 )     --
Comprehensive income, net   $ 4,531     $ 2,583
(Dollar amounts in thousands)  
    Three Months Ended
January 31,
    2014     2013  
  Net income   $ 4,939     $ 2,583  
  Adjustments to reconcile net income to net cash provided by operating activities:                
    Depreciation and amortization     6,419       4,252  
    Asset recovery, net of impairments     (1,120 )     (7 )
    Amortization of deferred financing costs     261       75  
    Deferred income taxes     --       5  
    Stock-based compensation expense     150       187  
    Gain on sale of assets     (127 )     --  
  Changes in operating assets and liabilities:                
      Accounts receivable     16,473       6,908  
      Inventories     (5,721 )     1,265  
      Prepaids and other assets     (734 )     (283 )
      Payables and other liabilities     (14,508 )     (17,477 )
      Accrued income taxes     (136 )     808  
        Net cash provided by (used for) operating activities     5,896       (1,684 )
    Capital expenditures     (3,781 )     (5,769 )
    Acquisitions, net of cash acquired     --       (62,684 )
    Proceeds from sale of assets     1,253       7  
        Net cash used in investing activities     (2,528 )     (68,446 )
    Payment of dividends     --       (4,226 )
    Payment of capital lease     (16 )     --  
    Proceeds from long-term borrowings     2,600       78,850  
    Repayments of long-term borrowings     (5,618 )     (4,300 )
    Payment of deferred financing costs     (16 )     (307 )
    Proceeds from exercise of stock options     307       79  
        Net cash provided by (used for) financing activities     (2,743 )     70,096  
Net increase (decrease) in cash and cash equivalents     625       (34 )
Cash and cash equivalents at beginning of period     398       174  
Cash and cash equivalents at end of period   $ 1,023     $ 140  
Supplemental Cash Flow Information:                
Cash paid for interest   $ 772     $ 331  
Cash paid for income taxes   $ 2,168     $ 61  
Non-cash Investing and Financing Activities:                
  Equipment acquired under capital lease   $ 467     $ --  

Contact Information

    Thomas M. Dugan
    Vice President of Finance and Treasurer
    Shiloh Industries, Inc.
    (330) 558-2600