Shiloh Industries Reports Fourth Quarter and Fiscal 2013 Results

Marketwired

VALLEY CITY, OH--(Marketwired - Dec 20, 2013) - Shiloh Industries, Inc. (NASDAQ: SHLO) today reported financial results for its fourth quarter and fiscal year ended October 31, 2013.

Fourth Quarter and Fiscal 2013 Highlights:

  • Sales revenue for the quarter was $206.6 million and improved 38.8 percent from the fourth quarter a year earlier. Fiscal 2013 sales revenues reached a record $700.2 million, a 19.5 percent improvement over the prior year.

  • Gross profit for the quarter improved over 76 percent from the fourth quarter a year earlier and was $22.1 million, or 10.7 percent of sales revenue. Fiscal 2013 gross profit was $71.7 million or 10.2 percent of sales revenue and improved over 41 percent over the prior year.

  • Operating income for the quarter improved 48 percent to $10.8 million, from the fourth quarter a year earlier. Fiscal 2013 operating income was $34.6 million and improved 44 percent over the prior year.

  • Net income per share diluted improved 81 percent to $0.38 for the quarter, compared to net income of $0.21 per share diluted from the prior year fourth quarter. Fiscal 2013 net income per share diluted increased to $1.27 for a 59 percent improvement over the prior year. 

Fourth Quarter 2013 Results:

The company reported sales revenue of $206.6 million for the fourth quarter of fiscal year 2013, an increase of 38.8 percent from $148.9 million for the fourth quarter of fiscal year 2012. The increased revenues reflect the additional sales added from newly acquired companies, a 7.5 percent improvement in the North American car and light truck industry production volume over the fourth quarter of 2012, along with more than 100 new product launches.

Gross profit for the fourth quarter improved 76.8 percent to $22.1 million, or 10.7 percent of sales revenue, compared to $12.5 million or 8.4 percent of sales revenue for the fourth quarter of 2012. Improvements in operating performance are driven by increased sales volumes along with continuous improvements in operating, quality and productivity metrics.

For the fourth quarter of fiscal 2013, operating income improved over 48 percent to $10.8 million, compared to $7.3 million in the fourth quarter of fiscal year 2012.

The company reported net income for the fourth quarter of fiscal year 2013 of $6.5 million or $0.38 per share diluted, an improvement of 81 percent compared to the fourth quarter of 2012 net income of $3.6 million or $0.21 per share diluted.

Fiscal 2013 Results:

For fiscal year 2013, operating income improved 44 percent to $34.6 million, compared to $24.1 million for fiscal year 2012. Net income for fiscal 2013 was $21.6 million or $1.27 per share diluted, an improvement of 59 percent from the prior year's net income of $13.5 million, or $0.80 per share diluted. The improvement reflects a 19.5 percent or $114.1 million growth in sales revenue, to $700.2 million for fiscal year 2013. The successful integration of strategic acquisitions, vehicle build volumes improving 5.3 percent over 2012 volumes, smooth product launches and productivity improvements are the drivers of the improved operating performance.

Cash Flow and Capital Structure

Net cash flow provided by operating activities for fiscal year 2013 totaled $38.8 million compared to $25.5 million in fiscal year 2012. Free cash flow (cash flow from operating activities less capital expenditures) was $11.4 million for fiscal year 2013, compared to $8.4 million in fiscal year 2012. Fiscal year 2013 capital expenditures were $27.4 million compared to $17.1 million in fiscal year 2012.

On October 25, 2013, Shiloh entered into a credit agreement that provides for a $300 million secured revolving line of credit, which may be increased up to an additional $100 million, with an improved effective borrowing rate and a five-year term. Total borrowings under the agreement at October 31, 2013 were $117.4 million with availability of $180.2 million after considering the letters of credit Shiloh has issued.

"Shiloh's technology is in direct alignment with the automotive industry's mega-trend of lightweighting. The results we've seen this year are proof of the demand for our innovation, and our ability to efficiently and quickly meet the needs of our customers," said Ramzi Hermiz, president and chief executive officer. "As vehicle production levels continue to rise in North America, we are well positioned through our strategic acquisitions in 2013 to meet this demand and offer a wide portfolio of industry-leading lightweighting and NVH solutions for automakers in 2014 and beyond."

Headquartered in Valley City, Ohio, Shiloh Industries 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 high-pressure die castings, first operation precision blanks, engineered welded blanks, complex stampings, modular assemblies and its patented ShilohCore™ acoustic laminate metal solution. The company has multiple locations across North America, including Georgia, Indiana, Kentucky, Michigan, Ohio, Tennessee, Wisconsin and Mexico, and has approximately 2,050 employees. For more information visit www.shiloh.com.

A conference call to discuss fourth quarter and fiscal 2013 results will be held on Friday, December 20, 2013, at 11:00 a.m. EST. To listen to the conference call, dial (888) 359-3624 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; 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.

 
SHILOH INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands)
 
    October 31,
2013
    October 31,
2012
 
ASSETS            
Cash and cash equivalents   $ 398     $ 174  
Accounts receivable, net     116,837       77,556  
Related-party accounts receivable     673       536  
Income tax receivable     --       1,201  
Inventories, net     42,924       44,687  
Deferred income taxes     2,829       2,153  
Prepaid expenses     3,095       1,532  
Other assets     23       --  
    Total current assets     166,779       127,839  
Property, plant and equipment, net     197,874       117,101  
Goodwill     6,768       --  
Intangible assets, net     17,605       --  
Deferred income taxes     --       3,294  
Other assets     2,927       868  
    Total assets   $ 391,953     $ 249,102  
LIABILITIES AND STOCKHOLDERS' EQUITY                
Current debt   $ 882     $ 447  
Accounts payable     87,977       63,633  
Other accrued expenses     26,416       21,395  
Accrued income taxes     1,666       --  
    Total current liabilities     116,941       85,475  
Long-term debt     119,384       21,150  
Long-term benefit liabilities     21,287       32,819  
Deferred income taxes     969       --  
Other liabilities     2,223       2,255  
    Total liabilities     260,804       141,699  
Commitments and contingencies                
Stockholders' equity:                
  Preferred stock, $.01 per share; 5,000,000 shares authorized; no shares issued and outstanding at October 31, 2013 and October 31, 2012, respectively     --       --  
  Common stock, par value $.01 per share; 25,000,000 shares authorized; 17,031,316 and 16,983,012 shares issued and outstanding at October 31, 2013 and October 31, 2012, respectively     170       169  
  Paid-in capital     66,312       65,120  
  Retained earnings     90,749       73,425  
Accumulated other comprehensive loss: Pension related liability, net     (26,082 )     (31,311 )
  Total stockholders' equity     131,149       107,403  
  Total liabilities and stockholders' equity   $ 391,953     $ 249,102  
                   
                   
 
SHILOH INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
 
    Year Ended October 31,  
    2013     2012  
Revenues   $ 700,186     $ 586,074  
Cost of sales     628,491       535,339  
  Gross profit     71,695       50,735  
Selling, general and administrative expenses     37,073       27,519  
Asset impairment (recovery)     18       (834 )
Restructuring charges (recovery)     --       (30 )
  Operating income     34,604       24,080  
Interest expense     2,600       1,525  
Interest income     32       --  
Gain on bargain purchase     228       --  
Other expense, net     (89 )     (48 )
  Income before income taxes     32,175       22,507  
Provision for income taxes     10,605       8,981  
  Net income   $ 21,570     $ 13,526  
Earnings per share:                
Basic earnings per share   $ 1.27     $ 0.80  
Basic weighted average number of common shares     16,982       16,813  
Diluted earnings per share   $ 1.27     $ 0.80  
Diluted weighted average number of common shares     17,030       16,904  
                 
                 
 
SHILOH INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME
(Dollar amounts in thousands)
 
    Fiscal Year Ended
October 31,
 
    2013     2012  
Net income   $ 21,570     $ 13,526  
Other comprehensive income (loss):                
  Defined benefit pension plans & other postretirement benefits                
    Net gain/ (loss)     5,684       (11,818 )
    Amortization of net actuarial loss     1,441       1,095  
    Settlement     1,102       --  
    Income taxes     (2,998 )     4,199  
  Total defined benefit pension plans & other post retirement benefits, net of tax     5,229       (6,524 )
Comprehensive income, net   $ 26,799     $ 7,002  
                 
                 
 
SHILOH INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)
 
    Year Ended October 31,  
    2013     2012  
CASH FLOWS FROM OPERATING ACTIVITIES:                
  Net income   $ 21,570     $ 13,526  
  Adjustments to reconcile net income to net cash provided by operating activities:                
    Depreciation and amortization     20,878       18,793  
    Amortization of deferred financing costs     338       325  
    Asset impairment (recovery)     18       (834 )
    Recovery of restructuring charge     --       (30 )
    Bargain purchase gain     (228 )     --  
    Deferred income taxes     589       1,898  
    Stock-based compensation expense     738       754  
    Gain on sale of assets     (1 )     (65 )
  Changes in operating assets and liabilities:                
      Accounts receivable     (28,098 )     (1,026 )
      Inventories     7,162       (10,711 )
      Prepaids and other assets     110       676  
      Payables and other liabilities     12,802       1,727  
      Accrued income taxes     2,935       491  
        Net cash provided by operating activities     38,813       25,524  
CASH FLOWS FROM INVESTING ACTIVITIES:                
    Capital expenditures     (27,441 )     (17,095 )
    Acquisitions, net of cash acquired     (104,470 )     --  
    Proceeds from sale of assets     518       4,370  
        Net cash used in investing activities     (131,393 )     (12,725 )
CASH FLOWS FROM FINANCING ACTIVITIES:                
    Payment of dividends     (4,246 )     (8,422 )
    Proceeds from long-term borrowings     123,250       24,700  
    Repayments of long-term borrowings     (24,539 )     (29,250 )
    Payment of deferred financing costs     (1,963 )     (90 )
    Proceeds from exercise of stock options     302       417  
        Net cash provided by (used for) financing activities     92,804       (12,645 )
Net increase in cash and cash equivalents     224       154  
Cash and cash equivalents at beginning of period     174       20  
Cash and cash equivalents at end of period   $ 398     $ 174  
Supplemental Cash Flow Information:                
Cash paid for interest   $ 2,237     $ 1,237  
Cash paid for income taxes   $ 7,111     $ 6,306  
                 
                 
 
SHILOH INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Dollar amounts in thousands)
 
    Common Stock ($.01 Par Value)   Paid-In Capital   Retained Earnings     Accumulated Other Comprehensive Loss     Total Stockholders' Equity  
November 1, 2011   $ 168   $ 63,950   $ 68,321     $ (24,787 )   $ 107,652  
Net income     --     --     13,526       --       13,526  
Pension liability, net of tax effect of $4,199     --     --     --       (6,524 )     (6,524 )
Comprehensive income                                 7,002  
Payment of dividends     --     --     (8,422 )     --       (8,422 )
Exercise of stock options     1     416     --       --       417  
Stock-based compensation cost     --     754     --       --       754  
Tax benefit on stock options     --     --     --       --       --  
October 31, 2012   $ 169   $ 65,120   $ 73,425     $ (31,311 )   $ 107,403  
Net income     --     --     21,570       --       21,570  
Pension liability, net of tax effect of $2,998     --     --     --       5,229       5,229  
Comprehensive income                                 26,799  
Payment of dividends     --     --     (4,246 )     --       (4,246 )
Exercise of stock options     1     301     --       --       302  
Stock-based compensation cost     --     738     --       --       738  
Tax benefit on stock options     --     153     --       --       153  
October 31, 2013   $ 170   $ 66,312   $ 90,749     $ (26,082 )   $ 131,149  
                                     
                                     
                                     
Contact:
CONTACT:
Thomas M. Dugan
Vice President of Finance and Treasurer
Shiloh Industries, Inc.
(330) 558-2600

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