SOURCE: Shiloh Industries

Shiloh Industries

September 04, 2014 08:30 ET

Shiloh Industries Reports Third Quarter 2014 Results

VALLEY CITY, OH--(Marketwired - Sep 4, 2014) - Shiloh Industries, Inc. (NASDAQ: SHLO) today reported financial results for its third quarter ended July 31, 2014, and year to date results.

Third Quarter Fiscal Year 2014 vs. 2013 Highlights:

  • Sales revenue for the quarter was $216.4 million, an improvement of 30 percent.
  • Gross profit for the quarter improved 35 percent and was $22.1 million.
  • Operating income for the quarter improved nearly 19 percent to $9.7 million.
  • Net income per share diluted improved 58 percent to $0.49 for the quarter.
  • Completed European acquisition of Finnveden Metal Structures on June 30, 2014

Third Quarter Fiscal Year 2014 Results:

Sales revenue was $216.4 million for the third quarter of fiscal year 2014, an increase of 30.3 percent from $166.1 million compared to the third quarter of fiscal year 2013. Revenue outperformed the light vehicle market growth rate in North America and Europe of 9.5 percent and 5.0 percent, respectively, over the third quarter of 2013. This growth was accomplished through product launches, market gains, product mix and sales added from acquisitions.

Gross profit for the third quarter improved 35 percent to $22.1 million, or 10.2 percent of sales revenue, compared to $16.4 million, or 9.9 percent of sales revenue, for the third quarter of 2013. The business continues to contribute to the positive change in gross profit through investments in manufacturing technologies on current programs and new program launches.

Operating income improved nearly 19 percent to $9.7 million, compared to $8.2 million for the same period last year.

Net income increased 58 percent for the third quarter of fiscal year 2014 to $8.3 million, or $0.49 per share diluted compared to the prior year third quarter net income of $5.3 million, or $0.31 per share diluted. During the current quarter, the Company claimed additional research and development tax credits related to its business activities from 2010 to 2013, improving earnings per share by $0.14 per share diluted. Current operations increased earnings per share diluted by nearly 13% excluding these tax credits.

First Nine Months 2014 Results:

Sales revenue improved $115.3 million to $608.9 million, a 23.4 percent improvement, as compared to the first nine months of fiscal 2013 of $493.6 million. Gross profit improved 31.2 percent and was driven by productivity actions, higher sales revenue compared to market growth, new product launches and sales added from acquisitions. Operating income for the first nine months of fiscal 2014 improved 27.8 percent to $30.4 million, compared to $23.8 million for the first nine months of the previous year. Net income for the first nine months of fiscal 2014 was $21.4 million, or $1.25 per share diluted, an improvement of 41.7 percent over the prior year's net income of $15.1 million, or $0.89 per share diluted.

The net cash flow provided by operating activities for the first nine months of 2014 generated $16.2 million. Capital expenditures were $24.0 million, reflecting the Company's continued investment in both maintenance and technology capital.

"In August, we announced our newest addition to our BlankLight™ family of products; an aluminum laser welded blank. This breakthrough technology allows automakers to further reduce mass compared to existing steel and aluminum monolithic methods without compromising part integrity or formability," said Ramzi Hermiz, president and chief executive officer. "Growth through technology and innovation have been an important part of our strategy the past 2 years and we are seeing signs that our customers value this approach. We have strengthened our technology and product offerings, improved margins, expanded our footprint as well as diversified our customer portfolio, and we will continue to do so as we strive towards Lightweighting Without Compromise."

A conference call to discuss third quarter 2014 results will be held on Thursday, September 4, 2014, at 11:00 a.m. EDT. To listen to the conference call, dial +1 (888) 510-1765 (U.S. and Canada) or +1-719-325-2361 (International/caller-paid) approximately five minutes prior to the start time and request the Shiloh Industries third quarter conference call.

About Shiloh Industries, Inc. 

Shiloh Industries Inc. (NASDAQ: SHLO), is a leading global supplier of lightweighting and NVH solutions to the automotive, commercial vehicle and other industrial markets. The company offers the broadest portfolio of lightweighting solutions in the industry, capable of delivering solutions in steel, steel alloys, aluminum and magnesium. Shiloh delivers these solutions through design, engineering and manufacturing of first operation blanks, engineered welded blanks, complex stampings, modular assemblies and highly engineered aluminum and magnesium die casting and machined components serving the body-in-white, emission, powertrain, structural and seating needs of OEM and Tier 1 customers. Shiloh has locations across North America, Europe and Asia and approximately 3,000 employees. For more information visit www.shiloh.com.

Forward-Looking Statements

Certain statements made by Shiloh Industries, Inc. (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; 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, including businesses located outside of the United States; risks associated with doing business internationally, including economic, political and social instability, foreign currency exposure and the lack of acceptance of our products; 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, aluminum or magnesium, the Company's primary raw materials, 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 Company's outstanding indebtedness or a decrease in customer demand which could cause a covenant default under the Company's outstanding indebtedness; 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.

   
   
SHILOH INDUSTRIES, INC.  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(Dollar amounts in thousands)  
   
    July 31, 2014     October 31,  
    (Unaudited)     2013
ASSETS                
Cash and cash equivalents   $ 11,120     $ 398  
Investment in marketable securities     1,381       -  
Accounts receivable, net of allowance for doubtful accounts of $281 and $341 at July 31, 2014 and October 31, 2013, respectively     133,538       116,837  
Related-party accounts receivable     198       673  
Income tax receivable     326       -  
Inventories, net     88,170       42,924  
Deferred income taxes     2,508       2,829  
Prepaid expenses     10,849       3,095  
Other assets     -       23  
    Total current assets     248,090       166,779  
Property, plant and equipment, net     234,174       197,874  
Goodwill     17,541       6,768  
Intangible assets, net     39,740       17,605  
Deferred income taxes     2,521       -  
Other assets     5,531       2,927  
    Total assets   $ 547,597     $ 391,953  
LIABILITIES AND STOCKHOLDERS' EQUITY                
Current debt   $ 2,091     $ 882  
Accounts payable     129,874       87,977  
Accrued income taxes     -       1,666  
Other accrued expenses     34,954       26,416  
    Total current liabilities     166,919       116,941  
Long-term debt     205,841       119,384  
Long-term benefit liabilities     19,116       21,287  
Deferred income taxes     1,556       969  
Interest rate swap agreement     1,360       -  
Other liabilities     1,069       2,223  
    Total liabilities     395,861       260,804  
Commitments and contingencies                
Stockholders' equity:                
  Preferred stock, $.01 per share; 5,000,000 shares authorized; no shares issued and outstanding at July 31, 2014 and October 31, 2013, respectively     -       -  
  Common stock, par value $.01 per share; 25,000,000 shares authorized; 17,192,179 and 17,031,316 shares issued and outstanding at July 31, 2014 and October 31, 2013, respectively     172       170  
  Paid-in capital     67,755       66,312  
  Retained earnings     112,165       90,749  
  Accumulated other comprehensive loss, net     (28,356 )     (26,082 )
    Total stockholders' equity     151,736       131,149  
    Total liabilities and stockholders' equity   $ 547,597     $ 391,953  
                 
                 
                 
SHILOH INDUSTRIES, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF INCOME  
(Amounts in thousands, except per share data)  
   
    Three Months Ended July 31,     Nine Months Ended July 31,  
    2014     2013     2014     2013  
Net revenues   $ 216,389     $ 166,059     $ 608,900     $ 493,588  
Cost of sales     194,289       149,685       547,952       447,142  
  Gross profit     22,100       16,374       60,948       46,446  
Selling, general and administrative expenses     12,374       8,297       34,528       22,737  
Asset recovery     -       (110 )     (4,026 )     (117 )
  Operating income     9,726       8,187       30,446       23,826  
Interest expense     1,191       671       3,004       1,665  
Interest income     (2 )     (8 )     (7 )     (27 )
Other (income) expense     (147 )     29       (104 )     74  
  Income before income taxes     8,684       7,495       27,553       22,114  
Provision for income taxes     335       2,213       6,136       6,999  
  Net income   $ 8,349     $ 5,282     $ 21,417     $ 15,115  
Earnings per share:                                
Basic earnings per share   $ 0.49     $ 0.31     $ 1.25     $ 0.89  
Basic weighted average number of common shares     17,118       17,007       17,081       16,998  
Diluted earnings per share   $ 0.49     $ 0.31     $ 1.25     $ 0.89  
Diluted weighted average number of common shares     17,175       17,051       17,157       17,045  
                                 
                                 
                                 
SHILOH INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollar amounts in thousands)
 
    Three Months Ended July 31,   Nine Months Ended July 31,
    2014     2013   2014     2013
Net income   $ 8,349     $ 5,282   $ 21,417     $ 15,115
Other comprehensive income, net of tax:                            
  Defined benefit pension plans & other postretirement benefits                            
      Actuarial net gain     268       -     806       -
      Asset net loss     (816 )     -     (1,962 )     -
      Recognized gain     318       -     649       -
      Income tax - benefit     86       -     191       -
    Total defined benefit pension plans & other post retirement benefits, net of tax     (144 )     -     (316 )     -
  Marketable securities:                            
      Unrealized gain on marketable securities     750       -     854       -
      Income taxes on unrealized gain on marketable securities     (134 )     -     (171 )     -
      Reclassification adjustments for gain on marketable securities included in net income     (365 )     -     (365 )     -
    Total marketable securities, net of tax     251       -     318       -
  Derivatives and hedging:                            
      Unrealized loss on interest rate swap agreements     (457 )     -     (1,360 )     -
      Income taxes on interest rate swap agreements     175       -     517       -
    Change in fair value of derivative instruments, net of tax     (282 )     -     (843 )     -
  Foreign currency translation adjustments:                            
      Foreign currency translation loss     (1,433 )     -     (1,433 )     -
      Income taxes on foreign currency translation     -       -     -       -
    Unrealized loss on foreign currency translation, net of tax     (1,433 )     -     (1,433 )     -
Comprehensive income, net   $ 6,741     $ 5,282   $ 19,143     $ 15,115
                             
                             
                             
SHILOH INDUSTRIES, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
(Dollar amounts in thousands)  
   
    Nine Months Ended July 31,  
    2014     2013  
CASH FLOWS FROM OPERATING ACTIVITIES:                
  Net income   $ 21,417     $ 15,115  
  Adjustments to reconcile net income to net cash provided by operating activities:                
    Depreciation and amortization     20,094       14,363  
    Asset recovery     (4,026 )     (117 )
    Amortization of deferred financing costs     644       225  
    Deferred income taxes     (1,078 )     472  
    Stock-based compensation expense     430       561  
    Gain on sale of assets     (429 )     (3 )
    Gain on sale of marketable securities     (332 )     -  
  Changes in operating assets and liabilities:                
      Accounts receivable     13,175       (212 )
      Inventories     (18,368 )     6,833  
      Prepaids and other assets     (1,689 )     239  
      Payables and other liabilities     (11,607 )     (9,114 )
      Accrued income taxes     (1,992 )     1,028  
        Net cash provided by operating activities     16,239       29,390  
CASH FLOWS FROM INVESTING ACTIVITIES:                
  Capital expenditures     (24,027 )     (18,584 )
  Investment in marketable securities     (1,527 )     -  
  Acquisitions, net of cash acquired     (66,469 )     (67,723 )
  Proceeds from sale of assets     4,746       119  
  Proceeds from sale of marketable securities     967       -  
        Net cash used for investing activities     (86,310 )     (86,188 )
CASH FLOWS FROM FINANCING ACTIVITIES:                
  Payment of dividends     -       (4,226 )
  Payment of capital leases     (170 )     -  
  Proceeds from long-term borrowings     104,100       81,750  
  Repayments of long-term borrowings     (23,756 )     (19,900 )
  Payment of deferred financing costs     (150 )     (526 )
  Proceeds from exercise of stock options     928       164  
        Net cash provided by financing activities     80,952       57,262  
Effect of foreign currency exchange rate fluctuations on cash     (159 )     -  
Net increase in cash and cash equivalents     10,722       464  
Cash and cash equivalents at beginning of period     398       174  
Cash and cash equivalents at end of period   $ 11,120     $ 638  
                 
Supplemental Cash Flow Information:   $ 2,294     $ 1,455  
Cash paid for interest   $ 6,815     $ 5,449  
                 
Non-cash Investing and Financing Activities:                
  Equipment acquired under capital lease   $ 1,679     $ -  
                 

Contact Information

  • CONTACT:
    Thomas M. Dugan
    Vice President of Finance and Treasurer
    Shiloh Industries, Inc.
    +1 (330) 558-2600