Shiloh Industries Reports Third Quarter 2013 Results

Marketwired

VALLEY CITY, OH--(Marketwired - Aug 29, 2013) -  Shiloh Industries, Inc. (NASDAQ: SHLO) today reported financial results for the third quarter of its fiscal year ending Oct. 31, 2013.

Third Quarter Highlights:

  • Sales revenue for the quarter ended July 31, 2013 improved 16.9 percent to $166.1 million, from the third quarter a year earlier.

  • Gross profit for the quarter improved over 44 percent from the third quarter a year earlier and was $17.5 million, or 10.5 percent of sales revenue.

  • Operating income for the quarter improved 108 percent to $8.2 million, from the third quarter a year earlier.

  • Net income per share diluted improved 121 percent to $0.31 for the quarter, compared to net income of $0.14 per share diluted from the prior year third quarter. 

Third Quarter 2013 Results:

The company reported sales revenue of $166.1 million for the third quarter of fiscal year 2013, an increase of 16.9 percent from $142.0 million in the same quarter of the previous year. Increased revenues are reflective of a 3.8 percent improvement in North American car and light truck industry production volume compared to the third quarter of 2012, new product launches and revenues from acquired companies.

Gross profit for the third quarter improved 44 percent to $17.5 million, or 10.5 percent of sales revenue, compared to $12.2 million or 8.6 percent of sales revenue for the third quarter of 2012. Improved productivity, increased sales volume and reductions in fixed manufacturing expenses contributed to the increase.

For the third quarter of fiscal 2013, operating income improved over 108 percent to $8.2 million, compared to $3.9 million in the third quarter of the previous year.

The company reported net income for the third quarter of fiscal year 2013 of $5.3 million or $0.31 per share diluted, an improvement of 121 percent compared to the third quarter of 2012 net income of $2.4 million or $0.14 per share diluted.

First Nine Months 2013 Results:

Operating income for the first nine months of fiscal 2013 improved approximately 42 percent to $23.8 million, compared to $16.8 million for the first nine months of the previous year. Net income for the first nine months of fiscal 2013 was $15.1 million or $0.89 per share diluted, an improvement of over 50 percent from the prior year's net income of $9.9 million, or $0.59 per share diluted. The improvement reflects an increase in sales volume of $56.4 million, or 12.9 percent, to sales for the first nine months of fiscal 2013 of $493.6 million and a 29.6 percent improvement in gross margin 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 strategy of leading with technology and innovation to become the premier light weighting and NVH solution provider will be a driving force for our team to move forward with purpose and speed to achieve sustainable, global, profitable growth and world class results."

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 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 operations in Alabama, Ohio, Georgia, Michigan, Tennessee, Kentucky, Wisconsin, Indiana and Mexico, and has approximately 1,820 employees. For more information visit www.shiloh.com.

A conference call to discuss third quarter of fiscal 2013 results will be held on Thursday, August 29, 2013, at 11:00 a.m. EDT. To listen to the conference call, dial (888) 576-4398 approximately five minutes prior to the start time and request the Shiloh Industries third 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)  
   
    July 31,
2013
    October 31,  
    (Unaudited)     2012  
ASSETS                
Cash and cash equivalents   $ 638     $ 174  
Accounts receivable, net of allowance for doubtful accounts of $328 and $482 at July 31, 2013 and October 31, 2012, respectively     86,942       77,556  
Related-party accounts receivable     542       536  
Income tax receivable     171       1,201  
Inventories, net     41,724       44,687  
Deferred income taxes     1,803       2,153  
Prepaid expenses     3,095       1,532  
    Total current assets     134,915       127,839  
Property, plant and equipment, net     157,719       117,101  
Goodwill     8,354       -  
Intangible assets, net     10,836       -  
Deferred income taxes     3,239       3,294  
Other assets     6,764       868  
    Total assets   $ 321,827     $ 249,102  
LIABILITIES AND STOCKHOLDERS' EQUITY                
Current debt   $ 860     $ 447  
Accounts payable     64,344       63,633  
Other accrued expenses     22,541       21,395  
    Total current liabilities     87,745       85,475  
Long-term debt     83,000       21,150  
Long-term benefit liabilities     29,719       32,819  
Other liabilities     2,214       2,255  
    Total liabilities     202,678       141,699  
Commitments and contingencies                
Stockholders' equity:                
  Preferred stock, $.01 per share; 5,000,000 shares authorized; no shares issued and outstanding at July 31, 2013 and October 31, 2012, respectively     -       -  
  Common stock, par value $.01 per share; 25,000,000 shares authorized; 17,011,846 and 16,983,012 shares issued and outstanding at July 31, 2013 and October 31, 2012, respectively     170       169  
  Paid-in capital     65,997       65,120  
  Retained earnings     84,293       73,425  
  Accumulated other comprehensive loss: Pension related liability, net     (31,311 )     (31,311 )
    Total stockholders' equity     119,149       107,403  
    Total liabilities and stockholders' equity   $ 321,827     $ 249,102  
                 
                 
                 
SHILOH INDUSTRIES, INC.  
   
CONDENSED CONSOLIDATED STATEMENTS OF INCOME  
(Amounts in thousands, except per share data)  
(Unaudited)  
   
    Three Months Ended July 31,     Nine Months Ended July 31,  
    2013     2012     2013     2012  
Revenues   $ 166,059     $ 142,021     $ 493,588     $ 437,223  
Cost of sales     148,598       129,861       443,978       398,945  
  Gross profit     17,461       12,160       49,610       38,278  
Selling, general and administrative expenses     9,384       6,892       25,901       20,749  
Asset impairment (recovery)     (110 )     1,365       (117 )     742  
Restructuring charges (recovery)     -       (30 )     -       (30 )
  Operating income     8,187       3,933       23,826       16,817  
Interest expense     671       371       1,665       1,182  
Interest income     8       -       27       -  
Other income (expense), net     (29 )     4       (74 )     26  
  Income before income taxes     7,495       3,566       22,114       15,661  
Provision for income taxes     2,213       1,150       6,999       5,762  
  Net income   $ 5,282     $ 2,416     $ 15,115     $ 9,899  
Earnings per share:                                
Basic earnings per share   $ 0.31     $ 0.14     $ 0.89     $ 0.59  
Basic weighted average number of common shares     17,007       16,856       16,998       16,821  
Diluted earnings per share   $ 0.31     $ 0.14     $ 0.89     $ 0.59  
Diluted weighted average number of common shares     17,051       16,927       17,045       16,903  
                                 
                                 
                                 
SHILOH INDUSTRIES, INC.
 
CONDENSED CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME
(Dollar amounts in thousands)
(Unaudited)
 
    Three Months Ended July 31,   Nine Months Ended July 31,
    2013   2012   2013   2012
Net income   $ 5,282   $ 2,416   $ 15,115   $ 9,899
Other comprehensive income, net of tax:                        
  Defined benefit pension plans & other postretirement benefits     -     -     -     -
Comprehensive income, net   $ 5,282   $ 2,416   $ 15,115   $ 9,899
                         
                         
                         
SHILOH INDUSTRIES, INC.  
   
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
(Dollar amounts in thousands)  
(Unaudited)  
   
    Nine Months Ended July 31,  
    2013     2012  
CASH FLOWS FROM OPERATING ACTIVITIES:                
  Net income   $ 15,115     $ 9,899  
  Adjustments to reconcile net income to net cash provided by operating activities:                
    Depreciation and amortization     14,363       14,545  
    Asset impairment (recovery)     (117 )     742  
    Recovery of restructuring charge             (30 )
    Amortization of deferred financing costs     225       244  
    Deferred income taxes     472       295  
    Stock-based compensation expense     561       616  
    Gain on sale of assets     (3 )     (98 )
  Changes in operating assets and liabilities:                
      Accounts receivable     (212 )     5,250  
      Inventories     6,833       (10,681 )
      Prepaids and other assets     239       (190 )
      Payables and other liabilities     (9,114 )     (4,828 )
      Accrued income taxes     1,028       934  
        Net cash provided by operating activities     29,390       16,698  
CASH FLOWS FROM INVESTING ACTIVITIES:                
    Capital expenditures     (18,584 )     (10,849 )
    Acquisitions, net of cash acquired     (67,723 )     -  
    Proceeds from sale of assets     119       1,426  
        Net cash used in investing activities     (86,188 )     (9,423 )
CASH FLOWS FROM FINANCING ACTIVITIES:                
    Payment of dividends     (4,226 )     (8,422 )
    Proceeds from long-term borrowings     81,750       18,900  
    Repayments of long-term borrowings     (19,900 )     (17,900 )
    Payment of deferred financing costs     (526 )     (90 )
    Proceeds from exercise of stock options     164       340  
        Net cash provided by (used for) financing activities     57,262       (7,172 )
Net increase (decrease) in cash and cash equivalents     464       103  
Cash and cash equivalents at beginning of period     174       20  
Cash and cash equivalents at end of period   $ 638     $ 123  
Supplemental Cash Flow Information:                
Cash paid for interest   $ 1,455     $ 916  
Cash paid for income taxes   $ 5,449     $ 4,399  
Contact:
CONTACT:
Thomas M. Dugan
Vice President of Finance and Treasurer
Shiloh Industries, Inc.
(330) 558-2600
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