Shiloh Industries Reports Second Quarter 2013 Results

Marketwired

VALLEY CITY, OH--(Marketwired - May 23, 2013) -  Shiloh Industries, Inc. (NASDAQ: SHLO) today reported financial results for the second quarter of its fiscal year ending Oct. 31, 2013.

Second Quarter Highlights:

  • Sales revenue for the quarter ended April 30, 2013 increased to $182.1 million, a 12 percent improvement from the second quarter a year earlier.
  • Gross profit for the quarter improved 24 percent from the second quarter a year earlier and was $20.4 million, or 11.2 percent of sales revenue.
  • Operating income for the quarter improved 17.4 percent to $11.5 million, from the second quarter a year earlier.
  • Net income per share diluted improved 23 percent to $0.43 for the quarter, compared to net income of $0.35 per share diluted from the second quarter a year earlier. 

Second Quarter 2013 Results:

The company reported sales revenue of $182.1 million for the second quarter of fiscal year 2013, an increase of 11.9 percent over the $162.8 million in the same quarter of the previous year. Increased revenues are reflective of a 3.2 percent improvement in North American car and light truck industry production volume compared to the second quarter of 2012, new product launches and revenues from acquisitions.

Gross profit for the second quarter improved 23.9 percent to $20.4 million, or 11.2 percent of sales revenue, compared to $16.5 million or 10.1 percent of sales revenue for the second quarter of 2012. Improved productivity, increased sales volume and reductions in fixed manufacturing expenses contributed to the increase.

For the second quarter of fiscal 2013, operating income improved 17.4 percent to $11.5 million, compared to $9.8 million in the second quarter of the previous year.

The company reported net income for the second quarter of fiscal year 2013 of $7.2 million or $0.43 per share diluted, an improvement of 22.8% compared to the second quarter of 2012 net income of $5.9 million or $0.35 per share diluted.

First Six Months 2013 Results:

Operating income for the first six months of fiscal 2013 improved 21.4 percent to $15.6 million, compared to $12.9 million for the first six months of the previous year. Net income for the first six months of fiscal 2013 was $9.8 million or $0.58 per share diluted, an improvement of 31.4 percent over the prior year's net income of $7.5 million, or $0.44 per share diluted. The improvement reflects the increase in sales volume of $32.3 million, or 11.0 percent, to sales for the first six months of fiscal 2013 of $327.5 million and the improvement in gross margin of 23.1 percent driven primarily by productivity improvements, the successful integration of acquisitions and smooth product launches.

"Shiloh's profitability continues to improve not only as revenues increase from higher North American vehicle production levels and new sales growth, but also as a result of our focus on continued productivity improvements," said Ramzi Hermiz, president and chief executive officer. "As we progress through the remainder of fiscal 2013, we are strategically aligned to take advantage of the improved industry trends and vehicle demand in North America. Our focus will remain true to our key tenets of leading with technology and innovation, achieving sustainable global profitable growth and acting with a sense of purpose and speed as we continue to evaluate opportunities for growth."

Headquartered in Valley City, Ohio, Shiloh Industries provides lightweighting and noise and vibration solutions to automotive, commercial vehicle and other industrial markets through its imaginative thinking and advanced capabilities. Shiloh delivers these solutions through design engineering and manufacturing of high-pressure die castings, first operation precision blanks, engineered welded blanks, complex stampings, modular assemblies and its patented AcroStik™ acoustic laminate metal solution. The company has 16 wholly owned subsidiaries at locations in Alabama, Ohio, Georgia, Michigan, Tennessee, Kentucky, Wisconsin and Mexico, and has approximately 1,750 employees.

A conference call to discuss second quarter of fiscal 2013 results will be held on Thursday, May 23, 2013, at 11:00 a.m. EDT. To listen to the conference call, dial (888) 438-5519 approximately five minutes prior to the start time and request the Shiloh Industries second 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 business; 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)  
   
 
 
 
 
April 30,
2013

(Unaudited)
    October 31,
2012
 
ASSETS                
Cash and cash equivalents   $ 143     $ 174  
Accounts receivable, net of allowance for doubtful accounts of $364 and $482 at April 30, 2013 and October 31, 2012, respectively     101,719       77,556  
Related-party accounts receivable     3,581       536  
Income tax receivable     --       1,201  
Inventories, net     42,612       44,687  
Deferred income taxes     2,205       2,153  
Prepaid expenses     3,011       1,532  
    Total current assets     153,271       127,839  
Property, plant and equipment, net     155,634       117,101  
Goodwill     9,137       --  
Intangible assets, net     11,104       --  
Deferred income taxes     3,273       3,294  
Other assets     1,067       868  
    Total assets   $ 333,486     $ 249,102  
LIABILITIES AND STOCKHOLDERS' EQUITY                
Current debt   $ --     $ 447  
Accounts payable     72,036       63,633  
Other accrued expenses     25,717       21,395  
    Total current liabilities     97,753       85,475  
Long-term debt     88,700       21,150  
Long-term benefit liabilities     31,190       32,819  
Other liabilities     2,217       2,255  
    Total liabilities     219,860       141,699  
Commitments and contingencies                
Stockholders' equity:                
  Preferred stock, $.01 per share; 5,000,000 shares authorized; no shares issued and outstanding at April 30, 2013 and October 31, 2012, respectively     --       --  
  Common stock, par value $.01 per share; 25,000,000 shares authorized; 17,001,679 and 16,983,012 shares issued and outstanding at April 30, 2013 and October 31, 2012, respectively     170       169  
  Paid-in capital     65,756       65,120  
  Retained earnings     79,011       73,425  
  Accumulated other comprehensive loss: Pension related liability, net     (31,311 )     (31,311 )
    Total stockholders' equity     113,626       107,403  
    Total liabilities and stockholders' equity   $ 333,486     $ 249,102  
   
   
   
SHILOH INDUSTRIES, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF INCOME  
(Amounts in thousands, except per share data)  
(Unaudited)  
   
    Three Months Ended
April 30,
    Six Months Ended
April 30,
 
    2013     2012     2013     2012  
Revenues   $ 182,146     $ 162,831     $ 327,529     $ 295,202  
Cost of sales     161,759       146,374       295,380       269,083  
  Gross profit     20,387       16,457       32,149       26,119  
Selling, general and administrative expenses     8,879       7,209       16,516       13,857  
Asset recovery     --       (558 )     (7 )     (623 )
  Operating income     11,508       9,806       15,640       12,885  
Interest expense     564       525       994       811  
Interest income     13       --       19       --  
Other income (expense), net     (22 )     (25 )     (46 )     22  
  Income before income taxes     10,935       9,256       14,619       12,096  
Provision for income taxes     3,686       3,351       4,787       4,612  
  Net income   $ 7,249     $ 5,905     $ 9,832     $ 7,484  
Earnings per share:                                
Basic earnings per share   $ 0.43     $ 0.35     $ 0.58     $ 0.45  
Basic weighted average number of common shares     16,998       16,844       16,993       16,804  
Diluted earnings per share   $ 0.43     $ 0.35     $ 0.58     $ 0.44  
Diluted weighted average number of common shares     17,043       16,903       17,041       16,883  
 
 
 
SHILOH INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME
(Dollar amounts in thousands)
(Unaudited)
 
    Three Months Ended
April 30,
  Six Months Ended
April 30,
    2013   2012   2013   2012
Net income   $ 7,249   $ 5,905   $ 9,832   $ 7,484
Other comprehensive income, net of tax:                        
  Defined benefit pension plans & other postretirement benefits     --     --     --     --
Comprehensive income, net   $ 7,249   $ 5,905   $ 9,832   $ 7,484
                         
   
   
SHILOH INDUSTRIES, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
(Dollar amounts in thousands)  
(Unaudited)  
   
    Six Months Ended
April 30,
 
    2013     2012  
CASH FLOWS FROM OPERATING ACTIVITIES:                
  Net income   $ 9,832     $ 7,484  
  Adjustments to reconcile net income to net cash provided by operating activities:                
    Depreciation and amortization     9,392       9,802  
    Asset recovery     (7 )     (623 )
    Amortization of deferred financing costs     150       163  
    Deferred income taxes     36       (11 )
    Stock-based compensation expense     374       413  
    Gain on sale of assets     --       (98 )
  Changes in operating assets and liabilities:                
      Accounts receivable     (18,029 )     (18,412 )
      Inventories     5,945       (7,969 )
      Prepaids and other assets     479       648  
      Payables and other liabilities     920       9,642  
      Accrued income taxes     3,300       2,907  
        Net cash provided by operating activities     12,392       3,946  
CASH FLOWS FROM INVESTING ACTIVITIES:                
    Capital expenditures     (12,449 )     (5,749 )
    Acquisitions, net of cash acquired     (63,066 )     --  
    Proceeds from sale of assets     7       847  
        Net cash used in investing activities     (75,508 )     (4,902 )
CASH FLOWS FROM FINANCING ACTIVITIES:                
    Payment of dividends     (4,226 )     (8,422 )
    Proceeds from long-term borrowings     81,750       17,900  
    Repayments of long-term borrowings     (14,200 )     (8,700 )
    Payment of deferred financing costs     (349 )     (40 )
    Proceeds from exercise of stock options     110       268  
        Net cash provided by in financing activities     63,085       1,006  
Net increase (decrease) in cash and cash equivalents     (31 )     50  
Cash and cash equivalents at beginning of period     174       20  
Cash and cash equivalents at end of period   $ 143     $ 70  
Supplemental Cash Flow Information:                
Cash paid for interest   $ 789     $ 605  
Cash paid for income taxes   $ 1,341     $ 1,616  
Contact:
CONTACT:
Thomas M. Dugan
Vice President of Finance and Treasurer
Shiloh Industries, Inc.
(330) 558-2600

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