Shiloh Industries Reports Second-Quarter Fiscal 2017 Results
June 01 2017 - 7:15AM
Shiloh Industries, Inc. (NASDAQ:SHLO), a leading
global supplier of lightweighting, noise, and vibration solutions
to the automotive, commercial vehicle and other industrial markets,
today reported financial results for its second-quarter of fiscal
2017 ended April 30, 2017.
Second-Quarter 2017 Highlights (compared to
Second-Quarter 2016):
- Gross margin increased 300 basis points to 12.2 percent,
compared to 9.2 percent, benefitting from favorable product mix and
operational efficiencies.
- Gross profit increased by more than 26 percent to $33.2
million.
- Net income per diluted share for the quarter and the year ago
quarter were $0.24.
- Adjusted earnings per diluted share for the quarter was $0.36,
compared to $0.26.
- Adjusted EBITDA margin increased 230 basis points to 9.0
percent, compared to 6.7 percent.
- Adjusted EBITDA increased by more than 29 percent to $24.5
million.
- New product wins represented an expected $195 million in sales
over the life-of-programs.
"We generated strong year-over-year improvement
in our gross margin and EBITDA margin during the second quarter and
achieved record EBITDA dollars,” according to Ramzi Hermiz,
president and chief executive officer. “We continue to deliver on
our strategy to provide lightweighting solutions to the mobility
market and as we look forward to the balance of the year, we expect
the positive momentum in our business to continue,” said
Hermiz.
2017 Outlook:Shiloh is
introducing guidance for the full year fiscal 2017. The Company
anticipates adjusted EBITDA to be in a range of $74 million to $78
million with an adjusted EBITDA margin range of 7.0 to 7.5
percent. This represents an improvement of 17 to 23 percent
compared to adjusted EBITDA of $63.3 million in 2016. Additionally,
the Company expects annual capital expenditures to be approximately
4 to 5 percent of revenue.
Shiloh to Host Conference Call Today at
8:00 A.M. ETShiloh Industries will host a conference call
on Thursday, June 1 at 8:00 A.M. Eastern Time to discuss the
Company's 2017 second-quarter fiscal financial results. The
conference call can be accessed by dialing 1-877-407-0784, or for
international callers, 1-201-689-8560. Please dial-in approximately
five minutes in advance and request the Shiloh Industries
second-quarter conference call. A replay will be available
after the call and can be accessed by dialing 1-844-512-2921, or
for international callers, 1-412-317-6671. The passcode for the
replay is 13663313. The replay will be available until June 22,
2017. Interested investors and other parties may also listen to a
simultaneous webcast of the conference call by logging onto the
Investor Relations section of the Company's website at
www.shiloh.com.
Investor Contact:
For inquiries, please contact Thomas Dugan, Vice
President Finance and Treasurer at: 1-330-558-2600 or at
investor@shiloh.com.
About Shiloh Industries, Inc.
Shiloh Industries, Inc. (NASDAQ:SHLO) is a
global innovative solutions provider focusing on lightweighting
technologies that provide environmental and safety benefits to the
mobility market. The Company designs and manufactures
products within body structure, chassis and powertrain systems,
leveraging one of the broadest portfolios in the industry. Shiloh’s
multi-component, multi-material solutions are comprised of a
variety of alloys in aluminum, magnesium and steel grades, along
with its proprietary line of noise and vibration reducing
ShilohCore acoustic laminate products. The
strategic BlankLight®, CastLight®
and StampLight® brands combine to maximize
lightweighting solutions without compromising safety or
performance. The Company has over 3,600 dedicated employees with
operations, sales and technical centers throughout Asia, Europe and
North America.
Forward-Looking Statements
Certain statements made by Shiloh in this Press
Release 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.
Listed below are some of the factors that could
potentially cause actual results to differ materially from expected
future results. Other factors besides those listed here could also
materially affect the Company’s business.
- The Company's ability to accomplish its strategic
objectives.
- The Company's 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, including businesses located outside of the United
States. Risks associated with doing business internationally,
including economic, political and social instability, foreign
currency exposure and the lack of acceptance of its products.
- Inefficiencies related to production and product launches that
are greater than anticipated; changes in technology and
technological risks.
- 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 affecting car and light truck production.
- 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
aluminum, magnesium or steel, the Company's primary raw materials,
or decreases in the price of scrap steel.
- The successful launch and consumer acceptance of new vehicles
for which the Company supplies parts.
- The impact on historical financial statements of any known or
unknown accounting errors or irregularities; and the magnitude of
any adjustments in restated financial statements of the Company’s
operating results.
- The occurrence of any event or condition that may be deemed a
material adverse effect under the Company’s outstanding
indebtedness or a decrease in customer demand which could cause a
covenant default under the Company’s outstanding indebtedness.
- Pension plan funding requirements.
See "Part I, Item 1A. Risk Factors" in the
Company's Annual Report on Form 10-K for the fiscal year ended
October 31, 2016 for a more complete discussion of these risks
and uncertainties. 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 Press Release.
The Company undertakes no obligation to publicly
revise these forward-looking statements to reflect events or
circumstances that arise after the date of filing this Press
Release. 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 SEC.
Non-GAAP Financial Measures
This press release includes the following
non-GAAP financial measures: “EBITDA,” “adjusted EBITDA," "adjusted
EBITDA margin" and "adjusted earnings per share." Shiloh
define EBITDA as net income / (loss) before interest, taxes, stock
compensation, depreciation and amortization. Shiloh defines
adjusted EBITDA as net income / (loss) before interest, taxes,
stock compensation, depreciation, amortization, and other
adjustments as described in the reconciliations accompanying this
press release. Shiloh defines adjusted EBITDA margin as adjusted
EBITDA divided by net revenues as shown in the reconciliations
accompanying this press release. Adjusted earnings per share
excludes certain income and expense items as shown in the
reconciliation accompanying this press release. Shiloh uses EBITDA,
adjusted EBITDA, adjusted EBITDA margin and adjusted earnings per
share as supplements to information provided in accordance with
generally accepted accounting principles ("GAAP") in evaluating the
Company's business and they are included in this press release
because they are principal factors upon which Shiloh's management
assesses performance. Reconciliations of these non-GAAP financial
measures to the most directly comparable financial measures
calculated in accordance with GAAP are set forth below. The
non-GAAP measures presented in this release are not measures of
performance under GAAP. These measures should not be considered as
alternatives for the most directly comparable financial measures
calculated in accordance with GAAP. Other companies in
Shiloh's industry may define these non-GAAP measures differently
than we do and, as a result, these non-GAAP measures may not be
comparable to similarly titled measures used by other companies;
and certain of Shiloh's non-GAAP financial measures exclude
financial information that some may consider important in
evaluating Shiloh's performance. Given the inherent
uncertainty regarding special items and other expenses in any
future period, a reconciliation of forward-looking financial
measures to the most directly comparable financial measures
calculated and presented in accordance with GAAP is not feasible.
The magnitude of these items, however, may be significant.
Adjusted Earnings Per Share
Reconciliation |
Three Months Ended April 30, |
|
Six Months Ended April 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net income (loss) per common share (GAAP) |
|
|
|
|
|
|
|
Diluted |
$ |
0.24 |
|
|
$ |
0.24 |
|
|
$ |
0.12 |
|
|
$ |
(0.05 |
) |
|
Asset disposal /
impairment |
0.03 |
|
|
— |
|
|
0.03 |
|
|
0.01 |
|
|
Non-recurring
professional fees (1) |
0.07 |
|
|
— |
|
|
0.14 |
|
|
0.07 |
|
|
Amortization of
intangibles |
0.02 |
|
|
0.02 |
|
|
0.04 |
|
|
0.04 |
|
Diluted adjusted earnings per share (non-GAAP) |
$ |
0.36 |
|
|
$ |
0.26 |
|
|
$ |
0.33 |
|
|
$ |
0.07 |
|
(1) Includes fees related to non-operational matters.
Adjusted EBITDA Reconciliation |
Three Months Ended April 30, |
|
Six Months Ended April 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net income (loss) (GAAP) |
$ |
4,229 |
|
|
$ |
4,209 |
|
|
$ |
2,211 |
|
|
$ |
(918 |
) |
|
Depreciation and
amortization |
10,382 |
|
|
9,611 |
|
|
20,100 |
|
|
18,923 |
|
|
Stock compensation
expense |
420 |
|
|
262 |
|
|
817 |
|
|
451 |
|
|
Interest expense,
net |
4,200 |
|
|
4,516 |
|
|
9,010 |
|
|
8,866 |
|
|
Provision (benefit) for
income taxes |
2,323 |
|
|
364 |
|
|
2,247 |
|
|
(1,547 |
) |
EBITDA (non-GAAP) |
21,554 |
|
|
18,962 |
|
|
34,385 |
|
|
25,775 |
|
EBITDA margin (non-GAAP) |
7.9 |
% |
|
6.7 |
% |
|
6.6 |
% |
|
4.8 |
% |
|
Asset disposal /
impairment |
944 |
|
|
— |
|
|
985 |
|
|
273 |
|
|
Non-recurring
professional fees (1) |
1,992 |
|
|
— |
|
|
3,535 |
|
|
1,800 |
|
Adjusted EBITDA (non-GAAP) |
$ |
24,490 |
|
|
$ |
18,962 |
|
|
$ |
38,905 |
|
|
$ |
27,848 |
|
Adjusted EBITDA margin (non-GAAP) |
9.0 |
% |
|
6.7 |
% |
|
7.5 |
% |
|
5.2 |
% |
(1) Includes fees related to non-operational matters.
SHILOH INDUSTRIES, INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED) |
(Dollar amounts in thousands) |
|
|
April 30, 2017 |
|
October 31,
2016 |
|
ASSETS: |
|
|
|
Cash and cash
equivalents |
$ |
11,126 |
|
|
$ |
8,696 |
|
Investment in
marketable securities |
222 |
|
|
174 |
|
Accounts receivable,
net of allowance for doubtful accounts of $836 and $790 at April
30, 2017 and October 31, 2016, respectively |
182,233 |
|
|
183,862 |
|
Related-party accounts
receivable |
1,575 |
|
|
1,235 |
|
Prepaid income
taxes |
347 |
|
|
1,653 |
|
Inventories, net |
59,953 |
|
|
60,547 |
|
Prepaid expenses and
other assets |
32,857 |
|
|
36,986 |
|
Total
current assets |
288,313 |
|
|
293,153 |
|
Property, plant and
equipment, net |
264,273 |
|
|
265,837 |
|
Goodwill |
27,557 |
|
|
27,490 |
|
Intangible assets,
net |
16,151 |
|
|
17,279 |
|
Deferred income
taxes |
9,268 |
|
|
9,974 |
|
Other assets |
9,607 |
|
|
12,696 |
|
Total
assets |
$ |
615,169 |
|
|
$ |
626,429 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY: |
|
|
|
Current debt |
$ |
1,479 |
|
|
$ |
2,023 |
|
Accounts payable |
150,653 |
|
|
158,514 |
|
Other accrued
expenses |
47,454 |
|
|
40,824 |
|
Accrued income
taxes |
764 |
|
|
1,686 |
|
Total
current liabilities |
200,350 |
|
|
203,047 |
|
Long-term debt |
242,808 |
|
|
256,922 |
|
Long-term benefit
liabilities |
23,439 |
|
|
23,312 |
|
Deferred income
taxes |
5,462 |
|
|
4,734 |
|
Interest rate swap
agreement |
2,815 |
|
|
5,036 |
|
Other liabilities |
679 |
|
|
588 |
|
Total
liabilities |
475,553 |
|
|
493,639 |
|
Commitments and
contingencies |
|
|
|
Stockholders’
equity: |
|
|
|
Preferred
stock, $.01 per share; 5,000,000 shares authorized; no shares
issued and outstanding at April 30, 2017 and October 31, 2016,
respectively |
— |
|
|
— |
|
Common
stock, par value $.01 per share; 50,000,000 shares authorized;
17,875,242 and 17,614,057 shares issued and outstanding at April
30, 2017 and October 31, 2016, respectively |
179 |
|
|
176 |
|
Paid-in
capital |
71,295 |
|
|
70,403 |
|
Retained
earnings |
120,884 |
|
|
118,673 |
|
Accumulated other comprehensive loss, net |
(52,742 |
) |
|
(56,462 |
) |
Total
stockholders’ equity |
139,616 |
|
|
132,790 |
|
Total
liabilities and stockholders’ equity |
$ |
615,169 |
|
|
$ |
626,429 |
|
SHILOH INDUSTRIES, INC. |
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED) |
(Amounts in thousands, except per share
data) |
|
|
Three Months Ended April 30, |
|
Six Months Ended April 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net revenues |
$ |
273,031 |
|
|
$ |
284,264 |
|
|
$ |
520,969 |
|
|
$ |
535,319 |
|
Cost of sales |
239,815 |
|
|
257,983 |
|
|
463,953 |
|
|
493,149 |
|
Gross
profit |
33,216 |
|
|
26,281 |
|
|
57,016 |
|
|
42,170 |
|
Selling, general and
administrative expenses |
21,695 |
|
|
16,992 |
|
|
41,883 |
|
|
34,336 |
|
Amortization of
intangible assets |
564 |
|
|
565 |
|
|
1,129 |
|
|
1,129 |
|
Asset impairment |
— |
|
|
— |
|
|
41 |
|
|
273 |
|
Operating
income |
10,957 |
|
|
8,724 |
|
|
13,963 |
|
|
6,432 |
|
Interest expense |
4,200 |
|
|
4,520 |
|
|
9,012 |
|
|
8,872 |
|
Interest income |
— |
|
|
(4 |
) |
|
(2 |
) |
|
(6 |
) |
Other (income)
expense |
205 |
|
|
(365 |
) |
|
495 |
|
|
31 |
|
Income
(loss) before income taxes |
6,552 |
|
|
4,573 |
|
|
4,458 |
|
|
(2,465 |
) |
Provision (benefit) for
income taxes |
2,323 |
|
|
364 |
|
|
2,247 |
|
|
(1,547 |
) |
Net
income (loss) |
$ |
4,229 |
|
|
$ |
4,209 |
|
|
$ |
2,211 |
|
|
$ |
(918 |
) |
Income (loss) per
share: |
|
|
|
|
|
|
|
Basic
income (loss) per share |
$ |
0.24 |
|
|
$ |
0.24 |
|
|
$ |
0.12 |
|
|
$ |
(0.05 |
) |
Basic
weighted average number of common shares |
17,858 |
|
|
17,615 |
|
|
17,788 |
|
|
17,615 |
|
Diluted
income (loss) per share |
$ |
0.24 |
|
|
$ |
0.24 |
|
|
$ |
0.12 |
|
|
$ |
(0.05 |
) |
Diluted
weighted average number of common shares |
17,888 |
|
|
17,620 |
|
|
17,809 |
|
|
17,615 |
|
SHILOH INDUSTRIES, INC. |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED) |
(Dollar amounts in thousands) |
|
|
|
Six Months Ended April 30, |
|
|
2017 |
|
2016 |
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
|
Net
income (loss) |
|
$ |
2,211 |
|
|
$ |
(918 |
) |
Adjustments to reconcile net loss to net cash provided by operating
activities: |
|
|
|
|
Depreciation and amortization |
|
20,100 |
|
|
18,923 |
|
Asset
impairment, net |
|
41 |
|
|
273 |
|
Amortization of deferred financing costs |
|
1,663 |
|
|
1,244 |
|
Deferred
income taxes |
|
(834 |
) |
|
(2 |
) |
Stock-based compensation expense |
|
817 |
|
|
451 |
|
(Gain)
loss on sale of assets |
|
765 |
|
|
(26 |
) |
Changes
in operating assets and liabilities: |
|
|
|
|
Accounts
receivable |
|
1,769 |
|
|
11,978 |
|
Inventories |
|
860 |
|
|
(2,106 |
) |
Prepaids
and other assets |
|
6,248 |
|
|
6,209 |
|
Payables
and other liabilities |
|
(125 |
) |
|
(5,344 |
) |
Prepaid
and accrued income taxes |
|
392 |
|
|
2,229 |
|
Net cash
provided by operating activities |
|
33,907 |
|
|
32,911 |
|
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
|
Capital
expenditures |
|
(17,983 |
) |
|
(8,692 |
) |
Investment in joint venture |
|
— |
|
|
(1,500 |
) |
Proceeds
from sale of assets |
|
642 |
|
|
1,166 |
|
Net cash
used for investing activities |
|
(17,341 |
) |
|
(9,026 |
) |
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
Payment
of capital leases |
|
(360 |
) |
|
(403 |
) |
Proceeds
from long-term borrowings |
|
87,100 |
|
|
63,300 |
|
Repayments of long-term borrowings |
|
(100,855 |
) |
|
(95,649 |
) |
Payment
of deferred financing costs |
|
(221 |
) |
|
(308 |
) |
Proceeds
from exercise of stock options |
|
78 |
|
|
— |
|
Net cash
used for financing activities |
|
(14,258 |
) |
|
(33,060 |
) |
Effect of foreign
currency exchange rate fluctuations on cash |
|
122 |
|
|
935 |
|
Net increase (decrease)
in cash and cash equivalents |
|
2,430 |
|
|
(8,240 |
) |
Cash and cash
equivalents at beginning of period |
|
8,696 |
|
|
13,100 |
|
Cash and cash
equivalents at end of period |
|
$ |
11,126 |
|
|
$ |
4,860 |
|
|
|
|
|
|
Supplemental Cash Flow
Information: |
|
|
|
|
Cash paid
for interest |
|
$ |
7,321 |
|
|
$ |
7,641 |
|
Cash paid
for (refund of) income taxes |
|
1,199 |
|
|
(3,203 |
) |
|
|
|
|
|
Non-cash
Activities: |
|
|
|
|
Capital
equipment included in accounts payable |
|
$ |
2,697 |
|
|
$ |
3,823 |
|
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