Shiloh Industries Reports Second Quarter 2014 Results

VALLEY CITY, OH--(Marketwired - May 22, 2014) - Shiloh Industries, Inc. ( NASDAQ : SHLO ) today reported financial results for its second quarter ended April 30, 2014, and year to date results.

Second Quarter Fiscal Year 2014 vs. 2013 Highlights:

  • Sales revenue for the quarter was $209.0 million, an improvement of 14.7 percent.
  • Gross profit for the quarter improved nearly 9 percent and was $21.0 million.
  • Operating income for the quarter improved 10.3 percent to $12.7 million.
  • Net income per share diluted improved 9 percent to $0.47 for the quarter.

Second Quarter Fiscal Year 2014 Results:

The Company reported sales revenue of $209.0 million for the second quarter of fiscal year 2014, an increase of 14.7 percent from $182.1 million compared to the second quarter of fiscal year 2013. The Company's increased revenues outperformed the market growth of 4.8 percent for the North American car and light truck industry production volumes over the second quarter of 2013. This was accomplished by new product launches, market share gains and sales added from acquisitions.

Gross profit for the second quarter improved 8.6 percent to $21.0 million, compared to $19.3 million, for the second quarter of 2013. While additional investments in new technologies and personnel related to new program launches were incurred, the business continued to contribute to the positive change in gross profit.

For the second quarter of fiscal 2014, operating income improved over 10 percent to $12.7 million, compared to $11.5 million for the same period last year.

The Company reported a net income increase of 12.1 percent for the second quarter of fiscal year 2014 of $8.1 million, or $0.47 per share diluted compared to the second quarter of 2013 net income of $7.2 million, or $0.43 per share diluted, an improvement of 9 percent.

First Six Months 2014 Results:

Operating income for the first six months of fiscal 2014 improved 32.5 percent to $20.7 million, compared to $15.6 million for the first six months of the previous year. Net income for the first six months of fiscal 2014 was $13.1 million or $0.76 per share diluted, an improvement of 32.9 percent over the prior year's net income of $9.8 million, or $0.58 per share diluted. The improvement reflects an increase in sales revenue of $65.0 million, or 19.8 percent, as compared to the revenue for the first six months of fiscal 2014 of $392.5 million. Furthermore, the improvement in gross margin of 29.2 percent was driven by productivity actions, resulting from an increase of 3.8 percent in North American car and light truck production volumes, new product launches and sales added from acquisitions.

The net cash flow provided by operating activities for the first six months of 2014 generated $10.9 million. Capital expenditures were $11.5 million, reflecting the Company's continued investment in both maintenance and technology capital.

"Overall, we're pleased with the results of our lightweighting strategy and its impact on our profitable growth. Our quote activity and recent business awards signifies a recognition of our leading technology and competitive position," said Ramzi Hermiz, president and chief executive officer. "We continue to focus our investments in technology and productivity improvements to achieve global, sustainable, profitable growth."

About Shiloh
Headquartered in Valley City, Ohio, Shiloh Industries, Inc. is a leading supplier, providing lightweighting and NVH solutions to automotive, commercial vehicle and other industrial markets. Shiloh produces lightweight products for body-in-white, exhaust, powertrain, structural and seating needs of OEM and Tier 1 customers. The Company has (14) locations across North America, and has approximately 2,000 employees. For more information visit www.shiloh.com.

A conference call to discuss second quarter 2014 results will be held on Thursday, May 22, 2014, at 11:00 a.m. EDT. To listen to the conference call, dial (888) 510-1786 approximately five minutes prior to the start time and request the Shiloh Industries second quarter conference.

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 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)
             
    April 30,
 2014
    October 31,
 2013
 
    (Unaudited)    
ASSETS            
Cash and cash equivalents   $ 579     $ 398  
Investment in marketable securities     1,631       --  
Accounts receivable, net of allowance for doubtful accounts of $379 and $341 at April 30, 2014 and October 31, 2013, respectively     120,638       116,837  
Related-party accounts receivable     3,032       673  
Inventories, net     53,907       42,924  
Deferred income taxes     2,828       2,829  
Prepaid expenses     5,862       3,095  
Other assets     --       23  
    Total current assets     188,477       166,779  
Property, plant and equipment, net     198,556       197,874  
Goodwill     10,098       6,768  
Intangible assets, net     16,516       17,605  
Other assets     2,879       2,927  
  Total assets   $ 416,526     $ 391,953  
LIABILITIES AND STOCKHOLDERS' EQUITY                
Current debt   $ 798     $ 882  
Accounts payable     99,557       87,977  
Accrued income taxes     1,876       1,666  
Other accrued expenses     27,526       26,416  
    Total current liabilities     129,757       116,941  
Long-term debt     118,550       119,384  
Long-term benefit liabilities     19,904       21,287  
Deferred income taxes     644       969  
Interest rate swap agreement     903       --  
Other liabilities     1,921       2,223  
    Total liabilities     271,679       260,804  
Commitments and contingencies                
Stockholders' equity:                
  Preferred stock, $.01 per share; 5,000,000 shares authorized; no shares issued and outstanding at April 30, 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 April 30, 2014 and October 31, 2013, respectively     172       170  
  Paid-in capital     67,605       66,312  
  Retained earnings     103,817       90,749  
  Accumulated other comprehensive loss: Pension related liability, net     (26,747 )     (26,082 )
    Total stockholders' equity     144,847       131,149  
    Total liabilities and stockholders' equity   $ 416,526     $ 391,953  
                     
                     
 
SHILOH INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
 
    Three Months Ended April 30,   Six Months Ended April 30,  
    2014     2013   2014     2013  
Net revenues   $ 208,972     $ 182,146   $ 392,511     $ 327,529  
Cost of sales     187,971       162,810     353,663       297,456  
  Gross profit     21,001       19,336     38,848       30,073  
Selling, general and administrative expenses     11,208       7,828     22,153       14,440  
Asset recovery     (2,906 )     --     (4,026 )     (7 )
  Operating income     12,699       11,508     20,721       15,640  
Interest expense     927       564     1,813       994  
Interest income     2       13     5       19  
Other expense     25       22     44       46  
  Income before income taxes     11,749       10,935     18,869       14,619  
Provision for income taxes     3,620       3,686     5,801       4,787  
  Net income   $ 8,129     $ 7,249   $ 13,068     $ 9,832  
Earnings per share:                              
Basic earnings per share   $ 0.48     $ 0.43   $ 0.77     $ 0.58  
Basic weighted average number of common shares     17,081       16,998     17,063       16,993  
Diluted earnings per share   $ 0.47     $ 0.43   $ 0.76     $ 0.58  
Diluted weighted average number of common shares     17,158       17,043     17,148       17,041  
                               
                               
 
SHILOH INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollar amounts in thousands)
 
    Three Months Ended April 30,   Six Months Ended April 30,
    2014     2013   2014     2013
Net income   $ 8,129     $ 7,249   $ 13,068     $ 9,832
Other comprehensive income, net of tax:                            
  Defined benefit pension plans & other postretirement benefits                            
      Actuarial net gain     269       --     538       --
      Asset net loss     (606 )     --     (1,145 )     --
      Recognized gain     717       --     331       --
      Income tax - (expense) benefit     (144 )     --     105       --
    Total defined benefit pension plans & other post retirement benefits, net of tax     236       --     (171 )     --
  Marketable securities, net of tax:                            
      Unrealized gain on marketable securities     104       --     104       --
      Income taxes on marketable securities     (37 )     --     (37 )     --
  Unrealized gain on marketable securities, net of tax     67       --     67       --
  Derivatives and hedging:                            
      Unrealized loss on interest rate swap agreements     (903 )     --     (903 )     --
      Income taxes on interest rate swap agreements     342       --     342       --
  Change in fair value of derivative instruments, net of tax     (561 )     --     (561 )     --
Comprehensive income, net   $ 7,871     $ 7,249   $ 12,403     $ 9,832
                             
 
SHILOH INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)
 
    Six Months Ended April 30,  
    2014     2013  
CASH FLOWS FROM OPERATING ACTIVITIES:                
  Net income   $ 13,068     $ 9,832  
  Adjustments to reconcile net income to net cash provided by operating activities:                
    Depreciation and amortization     12,885       9,392  
    Asset recovery     (4,026 )     (7 )
    Amortization of deferred financing costs     465       150  
    Deferred income taxes     86       36  
    Stock-based compensation expense     289       374  
    Gain on sale of assets     (131 )     --  
  Changes in operating assets and liabilities:                
      Accounts receivable     (5,986 )     (18,029 )
      Inventories     (10,983 )     5,945  
      Prepaids and other assets     (3,143 )     479  
      Payables and other liabilities     8,173       920  
      Accrued income taxes     210       3,300  
        Net cash provided by operating activities     10,907       12,392  
CASH FLOWS FROM INVESTING ACTIVITIES:                
    Capital expenditures     (11,549 )     (12,449 )
    Investment in marketable securities     (1,527 )     --  
    Acquisitions, net of cash acquired     (349 )     (63,066 )
    Proceeds from sale of assets     4,163       7  
        Net cash used in investing activities     (9,262 )     (75,508 )
CASH FLOWS FROM FINANCING ACTIVITIES:                
    Payment of dividends     --       (4,226 )
    Payment of capital leases     (56 )     --  
    Proceeds from long-term borrowings     8,600       81,750  
    Repayments of long-term borrowings     (10,737 )     (14,200 )
    Payment of deferred financing costs     (16 )     (349 )
    Proceeds from exercise of stock options     745       110  
        Net cash provided by (used for) financing activities     (1,464 )     63,085  
Net increase (decrease) in cash and cash equivalents     181       (31 )
Cash and cash equivalents at beginning of period     398       174  
Cash and cash equivalents at end of period   $ 579     $ 143  
                 
Supplemental Cash Flow Information:   $ 1,522     $ 789  
Cash paid for interest   $ 5,713     $ 1,341  
                 
Non-cash Investing and Financing Activities:                
  Equipment acquired under capital lease   $ 1,679     $ --