Shiloh Industries Inc. SHLO, on Jan 5, reported results for fiscal fourth quarter and fiscal 2017 (ended October 2017). Weak performance compared with the year-ago periods was primarily responsible for the 17.8% fall in the share price on the day.
In fiscal fourth quarter, adjusted earnings were 13 cents per share, down 74% from the year-ago tally of 50 cents. The bottom line suffered from a fall in revenues in the quarter.
For fiscal 2017, adjusted earnings per share came in at 53 cents, down 10.2% from 59 cents in the previous year.
Weak Top-Line Results
Shiloh Industries’ top-line results were weak. Net revenues in the fiscal fourth quarter were $264.2 million, down 6.2% year over year.
For fiscal 2017, the company’s net revenues were approximately $1,042 million, decreasing 2.2% from the previous year. Of the total revenues, roughly 80.5% were generated in the United States, 16.3% in Europe and 3.2% from Rest of the World.
Mixed Margin Results
Shiloh Industries’ cost of sales in the fiscal fourth quarter decreased 6.2% year over year while as a percentage of revenues, it remained unchanged at 89.3%. Gross margin was flat at 10.7%. Likewise, selling, general and administrative expenses remained stable year over year at 7.6%.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) were $18.3 million, slightly below $19 million in the prior-year quarter. EBITDA margin was 6.9% versus 6.7% in the year-ago quarter.
Balance Sheet and Cash Flow
Exiting the fiscal fourth quarter, Shiloh Industries’ cash and cash equivalents were $8.7 million, down 39.2% from $14.3 million at the previous quarter end. The company’s long-term debt grew 2.1% sequentially to $181.1 million.
In fiscal 2017, the company’s net cash flow from operating activities totaled $76.3 million, increasing 10% from the previous year. Capital expenditure surged 70.9% year over year to $48.4 million.
Increase in Shiloh Industries’ new business wins as well as rise in demand for light weighing solutions in its prime operating areas will prove advantageous. Also, initiatives to strengthen its geographical presence and better utilize its resources are added benefits.
For fiscal 2018 (ending October 2018), the company anticipates adjusted EBITDA to be within the $73-$76 million range, with margin of 7.4-7.8%. Capital expenditures are predicted to be roughly 4-5% of revenues.
Shiloh Industries, Inc. Price
Shiloh Industries, Inc. Price | Shiloh Industries, Inc. Quote
Zacks Rank & Stocks to Consider
Shiloh Industries currently carries a Zacks Rank #3 (Hold).
Some stocks worth considering in the industry are AK Steel Holding Corporation AKS, Schnitzer Steel Industries, Inc. SCHN and Ternium S.A. TX. All these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
AK Steel Holding’s earnings estimates for 2018 improved over the past 60 days. It pulled off a positive earnings surprise of 74.16% in the last four quarters.
Schnitzer Steel Industries’ earnings estimates for fiscal 2018 and fiscal 2019 have been revised upward over the last 60 days. Also, it delivered a positive earnings surprise of 1.61% in the last quarter.
Ternium S.A. has witnessed positive revisions in earnings estimates for 2018, over the past 60 days. Also, the company pulled off a positive earnings surprise of 27.78% in the last four quarters.
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