SOURCE: Shiloh Industries

December 20, 2012 07:45 ET

Shiloh Industries Reports Fourth Quarter and Fiscal 2012 Results

VALLEY CITY, OH--(Marketwire - Dec 20, 2012) - Shiloh Industries, Inc. (NASDAQ: SHLO) today reported financial results for its fourth quarter and fiscal year ended October 31, 2012.

Fourth Quarter and Fiscal 2012 Highlights:

  • Sales revenue for the quarter increased to $148.9 million, an increase of 3.6% from the prior year quarter. Fiscal 2012 sales revenues were $586.1 million, a 13.2% improvement over the prior year.
  • Gross profit for the quarter improved 6.1% to $12.5 million or 8.4% of sales revenue. Fiscal 2012 gross profit improved 30.3% to $50.7 million or 8.7% of sales revenue.
  • Operating income improved over 57% to $7.3 million for the quarter and for the fiscal year improved over 62% to $24.1 million.
  • Net income improved 61.5% to $0.21 per share diluted for the quarter from net income of $0.13 per share diluted in the prior year quarter. Fiscal 2012 net income improved 70.2% to $0.80 per share diluted over net income of $0.47 per share diluted in the prior year.
  • Total debt at October 31, 2012 was reduced to $21.6 million.
  • The Board of Directors of the Company declared a special dividend of $0.25 per share on December 7, 2012 to be paid on December 28, 2012.

Fourth Quarter 2012 Results:
Sales for the fourth quarter of fiscal 2012 were $148.9 million, an increase of 3.6% from $143.8 million in the fourth quarter of fiscal year 2011.

The Company reported a 57.5% improvement in operating income of $7.3 million or 4.9% of sales in the fourth quarter of 2012 compared to operating income of $4.6 million or 3.2% of sales in the prior year quarter. The improvement in operating performance is driven by continuous improvements in operating, quality and productivity metrics and a continued focus on leveraging Manufacturing and Selling, General and Administrative costs.

Interest expense for the fourth quarter of the fiscal year was $0.3 million compared to $0.4 million in the prior year fourth quarter.

The Company reported that net income per share diluted improved 61.5% compared to the fourth quarter of fiscal 2011. Net income for the fourth quarter of fiscal year 2012 was $3.6 million or $0.21 per share diluted compared to the fourth quarter of 2011 net income of $2.2 million or $0.13 per share diluted.

Fiscal 2012 Results:
For fiscal year 2012, sales of $586.1 million were $68.3 million or 13.2% higher than sales for fiscal 2011. The North American car and light truck industry production volumes increased by 19.3% compared to 2011 led by a 32.3% recovery by the traditional Asian OEM's, as they rebounded from the March 2011 Japan earthquake and tsunami and floods in Thailand. For the traditional American OEM's, where the Company has a higher concentration of parts, the overall production volumes increased by 11.0%.

Operating income for fiscal 2012 improved 62% to $24.1 million or 4.1% of sales revenue compared to an operating income of $14.8 million or 2.9% of sales revenue in fiscal 2011. The improvement reflects the increase in sales volume along with the lower cost structure, a result of the continued focus on operational efficiency.

Net income per diluted share improved over 70% compared to fiscal 2011. The Company's net income for fiscal 2012 was $13.5 million or $0.80 per share diluted compared to net income of $7.8 million or $0.47 per share diluted in fiscal 2011.

In commenting on the results of fiscal year 2012, Ramzi Hermiz, President and CEO, said, "Shiloh continued to increase sales and improve operational performance in fiscal year 2012 as the overall economy and automotive industry in particular improved over the prior year. Along with the increased vehicle build levels, our improved operating leverage driven by our focus on effective cost management and improvement in operating efficiencies is reflected in our gross profit improvement of 30.3%, achieving 8.7% for fiscal 2012 compared to 7.5% for fiscal 2011.

"During 2012, the Company generated sufficient cash flow from operations to finance all of the operating needs of the Company while reducing the total debt to $21.6 million. The Company is well positioned to support the opportunities that are anticipated in 2013 and beyond."

Mr. Hermiz concluded, "As we look forward into fiscal 2013, our focus will be on our key tenants of leading with technology and innovation, achieving sustainable global profitable growth and acting with a sense of purpose and urgency."

Headquartered in Valley City, Ohio, Shiloh Industries is a leading supplier providing light weighting and noise, vibration and harshness (NVH) solutions to automotive, commercial vehicle and other industrial markets. Shiloh delivers these solutions through design, engineering and manufacturing of first operation blanks, engineered welded blanks, complex stampings and modular assemblies serving the body-in white, emission, powertrain and seating needs of OEM and Tier 1 customers. The Company has 14 wholly owned subsidiaries with locations in Georgia, Kentucky, Michigan, Ohio, Tennessee and Mexico, and employs approximately 1,400 skilled associates.

A conference call to discuss fourth quarter of fiscal year 2012 results will be held on Thursday, December 20, 2012, at 11:00 a.m. (ET). To listen to the conference call, dial (888) 455-2296 approximately five minutes prior to the start time and request the Shiloh Industries fourth quarter conference call.

Certain statements made by Shiloh Industries, Inc. 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; 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)  
    October 31,  
    2012     2011  
Cash and cash equivalents   $ 174     $ 20  
Accounts receivable, net     77,556       76,632  
Related-party accounts receivable     536       434  
Income tax receivable     1,201       1,688  
Inventories, net     44,687       33,976  
Deferred income taxes     2,153       2,228  
Prepaid expenses     1,532       1,725  
    Total current assets     127,839       116,703  
Property, plant and equipment, net     117,101       121,467  
Deferred income taxes     3,294       918  
Other assets     868       1,586  
    Total assets   $ 249,102     $ 240,674  
Current debt   $ 447     $ 428  
Accounts payable     63,633       57,214  
Other accrued expenses     21,395       23,733  
    Total current liabilities     85,475       81,375  
Long-term debt     21,150       25,700  
Long-term benefit liabilities     32,819       24,019  
Other liabilities     2,255       1,928  
Total liabilities     141,699       133,022  
Commitments and contingencies                
Stockholders' equity:                
  Preferred stock, $.01 per share; 5,000,000 shares authorized; no shares issued and outstanding at October 31, 2012 and October 31, 2011, respectively     --       --  
  Common stock, par value $.01 per share; 25,000,000 shares authorized; 16,902,755 and 16,762,428 shares issued and outstanding at October 31, 2012 and October 31, 2011, respectively     169       168  
  Paid-in capital     65,120       63,950  
  Retained earnings     73,425       68,321  
  Accumulated other comprehensive loss: Pension related liability, net     (31,311 )     (24,787 )
    Total stockholders' equity     107,403       107,652  
    Total liabilities and stockholders' equity   $ 249,102     $ 240,674  
(Amounts in thousands, except per share data)  
    Years Ended  
    October 31,  
    2012     2011  
Revenues   $ 586,074     $ 517,743  
Cost of sales     535,339       478,807  
  Gross profit     50,735       38,936  
Selling, general and administrative expenses     27,519       23,658  
Asset impairment (recovery), net     (834 )     94  
Restructuring charges (recovery)     (30 )     352  
  Operating income     24,080       14,832  
Interest expense     1,525       1,714  
Interest income     --       3  
Other (expense), net     (48 )     (40 )
  Income before income taxes     22,507       13,081  
Provision for income taxes     8,981       5,236  
  Net income   $ 13,526     $ 7,845  
Earnings per share:                
Basic earnings per share   $ 0.80     $ 0.47  
Basic weighted average number of common shares     16,813       16,716  
Diluted earnings per share   $ 0.80     $ 0.47  
Diluted weighted average number of common shares     16,904       16,859  
(Dollar amounts in thousands)  
    Years Ended
October 31,
    2012     2011  
  Net income   $ 13,526     $ 7,845  
  Adjustments to reconcile net income to net cash provided by operating activities:                
    Depreciation and amortization     18,793       22,367  
    Amortization of deferred financing costs     325       513  
    Asset impairment (recovery)     (834 )     94  
    Recovery of restructuring charge     (30 )     --  
    Deferred income taxes     1,898       1,920  
    Stock-based compensation expense     754       799  
    Gain on sale of assets     (65 )     (19 )
  Changes in operating assets and liabilities:                
      Accounts receivable     (1,026 )     (4,006 )
      Inventories     (10,711 )     (13,057 )
      Prepaids and other assets     676       399  
      Payables and other liabilities     (3,116 )     3,698  
      Accrued income taxes     491       (262 )
        Net cash provided by operating activities     20,681       20,291  
    Capital expenditures     (17,095 )     (18,452 )
    Proceeds from sale of assets     4,370       248  
        Net cash used in investing activities     (12,725 )     (18,204 )
    Payment of dividends     (8,422 )     (2,004 )
    Decrease in overdraft balances     4,843       1,436  
    Proceeds from long-term borrowings     24,700       28,750  
    Repayments of long-term borrowings     (29,250 )     (29,950 )
    Payment of deferred financing costs     (90 )     (906 )
    Proceeds from exercise of stock options     417       573  
        Net cash used in financing activities     (7,802 )     (2,101 )
Net increase (decrease) in cash and cash equivalents     154       (14 )
Cash and cash equivalents at beginning of period     20       34  
Cash and cash equivalents at end of period   $ 174     $ 20  
Supplemental Cash Flow Information:                
Cash paid for interest   $ 1,237     $ 1,316  
Cash paid for income taxes   $ 6,306     $ 3,202  

Contact Information

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