Shiloh Industries Reports Fourth-Quarter and Full-Year Fiscal 2017 Results
January 05 2018 - 7:00AM
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 fourth-quarter and full-year financial results for
our fiscal year ended October 31, 2017.
Fourth-Quarter 2017 Highlights (compared to
Fourth-Quarter 2016):
- Revenues decreased to $264.2 million.
- Gross profit of $28.3 million with a gross margin of
10.7%.
- Net loss was $0.9 million or 4 cents per share.
- Adjusted earnings per basic share was 13 cents.
- Adjusted EBITDA was $18.3 million.
- Adjusted EBITDA margin was 6.9%.
- New product wins represented an expected $213 million in sales
over the life-of-programs.
Full-Year 2017 Highlights (compared to Full-Year
2016):
- Revenues were $1,042.0 million compared to $1,065.8 million,
with improved margins.
- Gross margin increased 200 basis points to 11.0% compared to
9.0%, benefiting from favorable product mix and operational
efficiencies.
- Gross profit increased 18.7% to $114.1 million, compared to
$96.2 million, reflecting an increase of $18 million on lower
revenues.
- Basic net loss per share was 4 cents, compared to basic net
income per share of 21 cents.
- Basic adjusted earnings per share of 53 cents compared to 59
cents.
- Adjusted EBITDA was $75.6 million compared to $63.3 million, a
19.5% improvement.
- Adjusted EBITDA margin improved 140 basis points to 7.3%
compared to 5.9%.
- Cash flows from operating activities generated $76.3 million
for the year.
- Debt was reduced by $75.9 million.
- New product wins represented an expected $661 million in sales
over the life-of-program.
“Fiscal 2017 was a year of meaningful
improvement for Shiloh as we continued to make gains transforming
from a process company to a value-added product company,” said
Ramzi Hermiz, President and Chief Executive Officer, of Shiloh
Industries. “We delivered improved mix, higher margins and record
Adjusted EBITDA, while providing our customers with leading product
solutions supported by excellence in service. During the fourth
quarter, we took important steps to optimize our footprint and
realign resources as we focus on continued profit improvement,
while also better preparing for potential changes in the cycle. We
remain encouraged about the long-term drivers of demand for our
lightweighting solutions.”
Restructuring ActionsDuring the
fourth quarter, the Company incurred restructuring expense of $4.8
million, primarily due to the initiation of actions to idle its
Pendergrass facility. This action is designed to improve future
profitability and competitiveness. The largest portion of the
restructuring expenses is related to non-cash asset impairment
costs associated with footprint rationalization and mix shift away
from commodity products. In addition, we will implement
restructuring measures to improve the overall enterprise structure
to proactively address the shift in consumer preferences to trucks
and SUVs away from passenger cars and the need for incremental
lightweighting technologies.
2018 OutlookShiloh is
introducing guidance for the full year fiscal 2018 with adjusted
EBITDA in a range of $73 million to $76 million and an adjusted
EBITDA margin range of 7.4% to 7.8%. Additionally, the
Company expects annual capital expenditures to be approximately 4%
to 5% of revenue.
Shiloh to Host Conference Call Today at
8:00 A.M. ETShiloh will host a conference call on Friday,
January 5, 2018 at 8:00 A.M. Eastern Time to discuss Shiloh's
fourth-quarter and full-year 2017 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
fourth-quarter fiscal 2017 results 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 13674798. The replay will be available
until January 26, 2018. Interested investors and other
parties may also listen to a simultaneous webcast of the conference
call by logging onto the Investor Relations section of Shiloh'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. Shiloh 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. Shiloh 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 our operating
performance, events or developments that we believe or expect 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 our 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 due to a
variety of factors, including (1) our ability to accomplish our
strategic objectives; (2) our ability to obtain future sales; (3)
changes in worldwide economic and political conditions, including
adverse effects from terrorism or related hostilities; (4) costs
related to legal and administrative matters; (5) our ability to
realize cost savings expected to offset price concessions; (6) our
ability to successfully integrate acquired businesses, including
businesses located outside of the United States; (7) risks
associated with doing business internationally, including economic,
political and social instability, foreign currency exposure and the
lack of acceptance of our products; (8) inefficiencies related to
production and product launches that are greater than anticipated;
(9) changes in technology and technological risks; (10) work
stoppages and strikes at our facilities and that of our customers
or suppliers; (11) our dependence on the automotive and heavy truck
industries, which are highly cyclical; (12) 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; (13) regulations and policies
regarding international trade; (14) financial and business
downturns of our customers or vendors, including any production
cutbacks or bankruptcies; (15) increases in the price of, or
limitations on the availability of aluminum, magnesium or steel,
our primary raw materials, or decreases in the price of scrap
steel; (16) the successful launch and consumer acceptance of new
vehicles for which we supply parts; (17) the impact on financial
statements of any known or unknown accounting errors or
irregularities; and the magnitude of any adjustments in restated
financial statements of our operating results; (18) the occurrence
of any event or condition that may be deemed a material adverse
effect under our outstanding indebtedness or a decrease in customer
demand which could cause a covenant default under our outstanding
indebtedness; (19) pension plan funding requirements; and (20)
other factors besides those listed here could also materially
affect our business. See "Part II, Item 1A. Risk Factors" in our
Annual Report on Form 10-K for the fiscal year ended
October 31, 2017 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. We undertake 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 we file from time to time with the SEC.
Non-GAAP Financial MeasuresThis
press release includes the following non-GAAP financial measures:
“EBITDA,” “adjusted EBITDA ," "adjusted EBITDA margin" and
"adjusted earnings per share." We define EBITDA as net income
(loss) before interest, taxes, depreciation and amortization. We
define adjusted EBITDA as net income (loss) before interest, taxes,
depreciation, amortization, and other adjustments as described in
the reconciliations accompanying this press release. We
define 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. We use 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 our business and they
are included in this press release because they are principal
factors upon which our 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 our 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 our non-GAAP
financial measures exclude financial information that some may
consider important in evaluating our 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 October 31, |
|
Year Ended October 31, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net income (loss) per common share (GAAP) |
|
|
|
|
|
|
|
Basic |
$ |
(0.04 |
) |
|
$ |
0.31 |
|
|
$ |
(0.04 |
) |
|
$ |
0.21 |
|
|
Restructuring |
0.13 |
|
|
— |
|
|
0.16 |
|
|
— |
|
|
Tax valuation
reserve |
— |
|
|
— |
|
|
0.12 |
|
|
— |
|
|
Plant optimization
activities |
— |
|
|
0.05 |
|
|
0.07 |
|
|
0.09 |
|
|
Amortization of
intangibles |
0.02 |
|
|
0.02 |
|
|
0.08 |
|
|
0.08 |
|
|
Asset impairment |
0.01 |
|
|
0.06 |
|
|
0.04 |
|
|
0.07 |
|
|
Marketable
securities |
— |
|
|
— |
|
|
0.03 |
|
|
— |
|
|
Legal and professional
fees |
0.01 |
|
|
— |
|
|
0.07 |
|
|
0.07 |
|
|
Foreign
adjustments |
— |
|
|
0.06 |
|
|
— |
|
|
0.07 |
|
Adjusted basic earnings per share (non-GAAP) |
$ |
0.13 |
|
|
$ |
0.50 |
|
|
$ |
0.53 |
|
|
$ |
0.59 |
|
Adjusted EBITDA Reconciliation |
Three Months Ended October 31, |
|
Year Ended October 31, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net income (loss) (GAAP) |
$ |
(926 |
) |
|
$ |
5,265 |
|
|
$ |
(697 |
) |
|
$ |
3,669 |
|
|
Depreciation and
amortization |
10,702 |
|
|
9,260 |
|
|
41,648 |
|
|
37,645 |
|
|
Interest expense,
net |
2,290 |
|
|
4,552 |
|
|
15,084 |
|
|
18,063 |
|
|
Income taxes |
434 |
|
|
(4,949 |
) |
|
7,120 |
|
|
(5,152 |
) |
EBITDA (non-GAAP) |
12,500 |
|
|
14,128 |
|
|
63,155 |
|
|
54,225 |
|
|
Restructuring |
4,777 |
|
|
— |
|
|
4,777 |
|
|
— |
|
|
Plant optimization
activities |
— |
|
|
1,263 |
|
|
1,978 |
|
|
2,263 |
|
|
Stock compensation
expense |
326 |
|
|
288 |
|
|
1,698 |
|
|
1,072 |
|
|
Asset impairment |
200 |
|
|
1,758 |
|
|
1,115 |
|
|
2,031 |
|
|
Marketable
securities |
— |
|
|
— |
|
|
873 |
|
|
— |
|
|
Legal and professional
fees |
496 |
|
|
— |
|
|
2,053 |
|
|
1,800 |
|
|
Foreign
adjustments |
— |
|
|
1,566 |
|
|
— |
|
|
1,916 |
|
Adjusted EBITDA (non-GAAP) |
$ |
18,299 |
|
|
$ |
19,003 |
|
|
$ |
75,649 |
|
|
$ |
63,307 |
|
Adjusted EBITDA margin (non-GAAP) |
6.9 |
% |
|
6.7 |
% |
|
7.3 |
% |
|
5.9 |
% |
|
SHILOH INDUSTRIES,
INC.CONSOLIDATED BALANCE
SHEETS(Dollar amounts in thousands) |
|
|
|
|
|
October 31,
2017 |
|
October 31,
2016 |
|
ASSETS: |
|
|
|
Cash and cash
equivalents |
$ |
8,736 |
|
|
$ |
8,696 |
|
Investment in
marketable securities |
194 |
|
|
174 |
|
Accounts receivable,
net |
188,664 |
|
|
183,862 |
|
Related-party accounts
receivable |
759 |
|
|
1,235 |
|
Prepaid income
taxes |
338 |
|
|
1,653 |
|
Inventories, net |
61,812 |
|
|
60,547 |
|
Prepaid expenses and
other assets |
34,018 |
|
|
36,986 |
|
Total
current assets |
294,521 |
|
|
293,153 |
|
Property, plant and
equipment, net |
266,891 |
|
|
265,837 |
|
Goodwill |
27,859 |
|
|
27,490 |
|
Intangible assets,
net |
15,025 |
|
|
17,279 |
|
Deferred income
taxes |
6,338 |
|
|
9,974 |
|
Other assets |
7,949 |
|
|
12,696 |
|
Total
assets |
$ |
618,583 |
|
|
$ |
626,429 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY: |
|
|
|
Current debt |
$ |
2,027 |
|
|
$ |
2,023 |
|
Accounts payable |
166,059 |
|
|
158,514 |
|
Other accrued
expenses |
46,171 |
|
|
40,824 |
|
Accrued income
taxes |
1,628 |
|
|
1,686 |
|
Total
current liabilities |
215,885 |
|
|
203,047 |
|
Long-term debt |
181,065 |
|
|
256,922 |
|
Long-term benefit
liabilities |
21,106 |
|
|
23,312 |
|
Deferred income
taxes |
9,166 |
|
|
4,734 |
|
Interest rate swap
agreement |
2,088 |
|
|
5,036 |
|
Other liabilities |
952 |
|
|
588 |
|
Total
liabilities |
430,262 |
|
|
493,639 |
|
Commitments and
contingencies |
|
|
|
Stockholders’
equity: |
|
|
|
Preferred
stock, $.01 per share; 5,000,000 shares authorized; no shares
issued and outstanding at October 31, 2017 and October 31,
2016, respectively |
— |
|
|
— |
|
Common
stock, par value $.01 per share; 50,000,000 shares authorized;
23,121,957 and 17,614,057 shares issued and outstanding at October
31, 2017 and October 31, 2016, respectively |
231 |
|
|
176 |
|
Paid-in
capital |
112,351 |
|
|
70,403 |
|
Retained
earnings |
117,976 |
|
|
118,673 |
|
Accumulated other comprehensive loss, net |
(42,237 |
) |
|
(56,462 |
) |
Total
stockholders’ equity |
188,321 |
|
|
132,790 |
|
Total
liabilities and stockholders’ equity |
$ |
618,583 |
|
|
$ |
626,429 |
|
|
SHILOH INDUSTRIES,
INC.CONSOLIDATED STATEMENTS OF
OPERATIONS(Amounts in thousands, except per share
data) |
|
|
|
|
|
Three Months Ended October
31, |
|
Year Ended October 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net revenues |
$ |
264,170 |
|
|
$ |
281,683 |
|
|
$ |
1,041,986 |
|
|
$ |
1,065,834 |
|
Cost of sales |
235,908 |
|
|
251,587 |
|
|
927,853 |
|
|
969,658 |
|
Gross
profit |
28,262 |
|
|
30,096 |
|
|
114,133 |
|
|
96,176 |
|
Selling, general &
administrative expenses |
20,008 |
|
|
21,535 |
|
|
83,142 |
|
|
73,417 |
|
Amortization of
intangible assets |
565 |
|
|
563 |
|
|
2,259 |
|
|
2,258 |
|
Asset impairment,
net |
200 |
|
|
1,758 |
|
|
241 |
|
|
2,031 |
|
Restructuring |
4,777 |
|
|
— |
|
|
4,777 |
|
|
— |
|
Operating
income |
2,712 |
|
|
6,240 |
|
|
23,714 |
|
|
18,470 |
|
Interest expense |
2,291 |
|
|
4,569 |
|
|
15,088 |
|
|
18,086 |
|
Interest income |
(1 |
) |
|
(17 |
) |
|
(4 |
) |
|
(23 |
) |
Other expense |
914 |
|
|
1,372 |
|
|
2,207 |
|
|
1,890 |
|
Income
(loss) before income taxes |
(492 |
) |
|
316 |
|
|
6,423 |
|
|
(1,483 |
) |
Provision (benefit) for
income taxes |
434 |
|
|
(4,949 |
) |
|
7,120 |
|
|
(5,152 |
) |
Net
income (loss) |
$ |
(926 |
) |
|
$ |
5,265 |
|
|
$ |
(697 |
) |
|
$ |
3,669 |
|
Income (loss) per
share: |
|
|
|
|
|
|
|
Basic
income (loss) per share |
$ |
(0.04 |
) |
|
$ |
0.31 |
|
|
$ |
(0.04 |
) |
|
$ |
0.21 |
|
Basic
weighted average number of common shares |
23,055 |
|
|
17,614 |
|
|
19,233 |
|
|
17,513 |
|
Diluted
income (loss) per share |
$ |
(0.04 |
) |
|
$ |
0.31 |
|
|
$ |
(0.04 |
) |
|
$ |
0.21 |
|
Diluted
weighted average number of common shares |
23,253 |
|
|
17,629 |
|
|
19,233 |
|
|
17,526 |
|
|
|
|
SHILOH INDUSTRIES,
INC.CONSOLIDATED STATEMENTS OF CASH
FLOWS(Dollar amounts in thousands) |
|
|
|
|
|
Year Ended October 31, |
|
|
2017 |
|
2016 |
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
|
Net
income (loss) |
|
$ |
(697 |
) |
|
$ |
3,669 |
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
|
|
|
|
Depreciation and amortization |
|
41,648 |
|
|
37,645 |
|
Asset
impairment, net |
|
241 |
|
|
2,031 |
|
Restructuring |
|
4,420 |
|
|
— |
|
Amortization of deferred financing costs |
|
3,115 |
|
|
2,505 |
|
Deferred
income taxes |
|
4,174 |
|
|
(2,704 |
) |
Stock-based compensation expense |
|
1,698 |
|
|
1,072 |
|
(Gain)
loss on sale of assets |
|
1,590 |
|
|
(55 |
) |
Other
than temporary impairment on marketable securities |
|
695 |
|
|
— |
|
Changes
in operating assets and liabilities: |
|
|
|
|
Accounts
receivable, net |
|
(2,919 |
) |
|
10,975 |
|
Inventories, net |
|
(888 |
) |
|
(2,408 |
) |
Prepaids
and other assets |
|
5,375 |
|
|
14,476 |
|
Payables
and other liabilities |
|
16,715 |
|
|
(1,843 |
) |
Prepaid
and accrued income taxes |
|
1,148 |
|
|
3,998 |
|
Net cash
provided by operating activities |
|
76,315 |
|
|
69,361 |
|
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
|
Capital
expenditures |
|
(48,395 |
) |
|
(28,324 |
) |
Sale of
(investment in) joint venture |
|
1,170 |
|
|
(1,500 |
) |
Proceeds
from sale of assets |
|
7,605 |
|
|
1,508 |
|
Net cash
used for investing activities |
|
(39,620 |
) |
|
(28,316 |
) |
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
Payment
of capital leases |
|
(879 |
) |
|
(860 |
) |
Proceeds
from long-term borrowings |
|
221,600 |
|
|
145,400 |
|
Repayments of long-term borrowings |
|
(296,770 |
) |
|
(186,301 |
) |
Payment
of deferred financing costs |
|
(1,779 |
) |
|
(1,785 |
) |
Proceeds
from exercise of stock options |
|
78 |
|
|
— |
|
Proceeds
from the issuance of common stock |
|
40,227 |
|
|
— |
|
Net cash
used for financing activities |
|
(37,523 |
) |
|
(43,546 |
) |
Effect of foreign
currency exchange rate fluctuations on cash |
|
868 |
|
|
(1,903 |
) |
Net increase (decrease)
in cash and cash equivalents |
|
40 |
|
|
(4,404 |
) |
Cash and cash
equivalents at beginning of period |
|
8,696 |
|
|
13,100 |
|
Cash and cash
equivalents at end of period |
|
$ |
8,736 |
|
|
$ |
8,696 |
|
|
|
|
|
|
Supplemental
Cash Flow Information: |
|
|
|
|
Cash paid
for interest |
|
$ |
12,432 |
|
|
$ |
15,801 |
|
Cash paid
for (refund of) income taxes |
|
1,780 |
|
|
(5,855 |
) |
|
|
|
|
|
Non-cash
Activities: |
|
|
|
|
Capital
equipment included in accounts payable |
|
$ |
4,239 |
|
|
$ |
5,604 |
|
Shiloh Industries (NASDAQ:SHLO)
Historical Stock Chart
From Aug 2024 to Sep 2024
Shiloh Industries (NASDAQ:SHLO)
Historical Stock Chart
From Sep 2023 to Sep 2024