SHLO Shiloh Industries Inc

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 fiscal 2018 third-quarter and nine months ended July 31, 2018.

Third-Quarter 2018 Highlights (compared to Third Quarter 2017):

• Revenues increased 14.8% to $294.9 million.
• Gross profit increased 12.7% to $32.9 million.
• Net income increased $13.0 million to $11.1 million or 47 cents per diluted share.
• Adjusted EBITDA increased 20.6% to $22.2 million, for a margin of 7.5%.

First Nine Months 2018 Highlights (compared to First Nine Months 2017):

• Revenues increased 8.0% to $839.9 million.
• Gross profit increased 6.3% to $92.3 million.
• Net income increased $19.7 million to $19.9 million or 85 cents per diluted share.
• Adjusted EBITDA increased 3.0% to $59.1 million, for a margin of 7.0%.

"Shiloh’s third-quarter success continues to demonstrate the increasing demand for our innovative lightweight products," said Ramzi Hermiz, president and chief executive officer. "Our product solutions enable OEMs to reduce on-vehicle weight without compromising strength, safety or performance and also assist our customers minimize the impact of increased costs associated with tariffs and commodity pricing."

2018 Outlook

Shiloh is maintaining its fiscal 2018 guidance:

• Adjusted EBITDA range of $73 million to $76 million.
• Adjusted EBITDA margin range of 7.0% to 7.2%.
• Capital expenditures range of 4% to 5% of revenue.

Shiloh to Host Conference Call Today at 8:00 A.M. ET

Shiloh will host a conference call on Friday, September 7, 2018 at 8:00 A.M. Eastern Time to discuss Shiloh's third-quarter 2018 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 third-quarter 2018 financial 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 13682900. The replay will be available until September 28, 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 our Investor Relations department at: 1-330-558-2601 or at investors@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 propulsion systems. 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 4,200 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) changes to tariffs or trade agreements, or the imposition of new tariffs or trade restrictions imposed on steel or aluminum materials which we use, including changes related to tariffs on automotive imports; (20) pension plan funding requirements; and (21) 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 and "Part II, Item 1A. Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended July 31, 2018 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 Measures

This 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 before interest, taxes, depreciation and amortization. We define adjusted EBITDA as net income 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 EndedJuly 31,

   

Nine Months Ended July 31,

  2018   2017 2018   2017 Net income (loss) per common share (GAAP) Diluted $ 0.47 $ (0.11 ) $ 0.85 $ 0.01 Tax items (1) (0.33 ) — (0.10 ) — Tax Cuts and Jobs Act, impact — — (0.14 ) — Restructuring 0.06 — 0.16 — Tax valuation reserve — 0.13 — 0.13 Amortization of intangibles 0.02 0.02 0.06 0.06 Asset impairment — — — 0.03 Marketable securities 0.01 0.03 0.01 0.03 Legal and professional fees   —     —     0.01     0.13 Adjusted diluted earnings per share (non-GAAP)   $ 0.23     $ 0.07       $ 0.85     $ 0.39

(1) For the three months ended July 31, 2018, there was a $2,300 benefit related to a return to provision due to a change in estimate and a $5,500 benefit based on adjusting the estimated annual tax rate. For the nine months ended July 31, 2018, there was a $2,300 benefit related to a return to provision due to a change in estimate.

          Adjusted EBITDA Reconciliation  

Three Months EndedJuly 31,

 

Nine Months Ended July 31,

  2018   2017 2018   2017 Net income (loss) (GAAP) $ 11,052 $ (1,982 ) $ 19,935 $ 229 Depreciation and amortization 12,361 10,846 33,775 30,946 Interest expense, net 3,208 3,784 8,185 12,794 Provision (benefit) for income taxes (7,014 ) 4,439   (9,854 ) 6,686   EBITDA (non-GAAP) 19,607 17,087 52,041 50,655 Restructuring 1,965 — 4,962 — Legal and professional fees — — 367 3,535 Stock compensation expense 515 555 1,557 1,372 Asset impairment — — — 915 Marketable securities 154   803   154   873   Adjusted EBITDA (non-GAAP) $ 22,241 $ 18,445 $ 59,081 $ 57,350 Adjusted EBITDA margin (non-GAAP)   7.5 %   7.2 %   7.0 %   7.4 %     SHILOH INDUSTRIES, INC.   CONDENSED CONSOLIDATED BALANCE SHEETS (Dollar amounts in thousands)  

July 31, 2018

October 31, 2017

(Unaudited)   ASSETS: Cash and cash equivalents $ 17,276 $ 8,736 Accounts receivable, net 193,135 188,664 Related-party accounts receivable 395 759 Prepaid income taxes 9,905 338 Inventories, net 75,115 61,812 Prepaid expenses and other assets 45,615   34,212   Total current assets 341,441 294,521 Property, plant and equipment, net 313,806 266,891 Goodwill 28,175 27,859 Intangible assets, net 15,480 15,025 Deferred income taxes 5,749 6,338 Other assets 10,572   7,949   Total assets $ 715,223   $ 618,583   LIABILITIES AND STOCKHOLDERS’ EQUITY Current debt $ 818 $ 2,027 Accounts payable 173,162 166,059 Other accrued expenses 64,686 46,171 Accrued income taxes 952   1,628   Total current liabilities 239,618 215,885 Long-term debt 237,331 181,065 Long-term benefit liabilities 20,674 21,106 Deferred income taxes 6,000 9,166 Other liabilities 2,518   3,040   Total liabilities 506,141   430,262   Commitments and contingencies Stockholders’ equity: Preferred stock, $.01 per share; 5,000,000 shares authorized; no shares issued and outstanding at July 31, 2018 and October 31, 2017, respectively — — Common stock, par value $.01 per share; 50,000,000 shares authorized; 23,404,906 and 23,121,957 shares issued and outstanding at July 31, 2018 and October 31, 2017, respectively 234 231 Paid-in capital 113,946 112,351 Retained earnings 144,269 117,976 Accumulated other comprehensive loss, net (49,367 ) (42,237 ) Total stockholders’ equity 209,082   188,321   Total liabilities and stockholders’ equity $ 715,223   $ 618,583       SHILOH INDUSTRIES, INC.   CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Amounts in thousands, except per share data)   Three Months Ended July 31, Nine Months Ended July 31, 2018   2017 2018   2017 Net revenues $ 294,883 $ 256,847 $ 839,889 $ 777,816 Cost of sales 262,003   227,683   747,616   691,044   Gross profit 32,880 29,164 92,273 86,772 Selling, general & administrative expenses 22,773 21,233 66,159 63,080 Amortization of intangible assets 607 565 1,767 1,694 Asset impairment, net — — — 41 Restructuring 1,965   —   4,962   —   Operating income 7,535 7,366 19,385 21,957 Interest expense 3,209 3,785 8,194 12,797 Interest income (1 ) (1 ) (9 ) (3 ) Other expense, net 289   1,125   1,119   2,248   Income before income taxes 4,038 2,457 10,081 6,915 Provision (benefit) for income taxes (7,014 ) 4,439   (9,854 ) 6,686   Net income (loss) $ 11,052   $ (1,982 ) $ 19,935   $ 229   Income (loss) per share: Basic earnings (loss) per share $ 0.47   $ (0.11 ) $ 0.86   $ 0.01   Basic weighted average number of common shares 23,278   18,559   23,202   18,048   Diluted earnings (loss) per share $ 0.47   $ (0.11 ) $ 0.85   $ 0.01   Diluted weighted average number of common shares 23,453   18,559   23,341   18,073     SHILOH INDUSTRIES, INC.   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollar amounts in thousands)   Nine Months Ended July 31, 2018   2017 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 19,935 $ 229 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 33,775 30,946 Asset impairment, net — 41 Restructuring 672 — Amortization of deferred financing costs 935 2,495 Deferred income taxes (2,251 ) 7,202 Stock-based compensation expense 1,557 1,372 Loss on sale of assets 2,300 474 Other than temporary impairment on marketable securities 154 695 Changes in operating assets and liabilities: Accounts receivable 18,599 30,260 Inventories (2,656 ) (698 ) Prepaids and other assets (4,884 ) 6,191 Payables and other liabilities (6,989 ) (6,810 ) Accrued income taxes (10,266 ) (2,879 ) Net cash provided by operating activities 50,881   69,518   CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (38,668 ) (32,564 ) Sale of joint venture — 1,170 Acquisitions, net of cash required (62,481 ) — Proceeds from sale of assets 2,696   7,515   Net cash used in investing activities (98,453 ) (23,879 ) CASH FLOWS FROM FINANCING ACTIVITIES: Payment of capital leases (667 ) (646 ) Proceeds from long-term borrowings 218,300 117,700 Repayments of long-term borrowings (161,793 ) (196,984 ) Payment of deferred financing costs (105 ) (221 ) Proceeds from exercise of stock options 41 78 Proceeds from the issuance of common stock —   40,236   Net cash provided by (used in) financing activities 55,776 (39,837 ) Effect of foreign currency exchange rate fluctuations on cash 336   (227 ) Net increase in cash and cash equivalents 8,540 5,575 Cash and cash equivalents at beginning of period 8,736   8,696   Cash and cash equivalents at end of period $ 17,276   $ 14,271     Supplemental Cash Flow Information: Cash paid for interest $ 7,661 $ 10,305 Cash paid for income taxes 2,779 1,538   Non-cash Activities: Capital equipment included in accounts payable $ 2,201 $ 3,554

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Shiloh Industries, Inc.Kevin Doherty, 1-330-558-2601investors@shiloh.com