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 2019 third-quarter ended July 31, 2019.

Third Quarter 2019 Highlights:

  • Revenues were $263.4 million.
  • Gross profit was $23.6 million with a gross margin of 9.0%.
  • Net loss was $2.7 million or 11 cents per basic share.
  • Adjusted income was 4 cents per basic share.
  • Adjusted EBITDA was $17.3 million.
  • Adjusted EBITDA margin was 6.6%.

"Overall I am pleased with Shiloh's performance throughout the year and our ability to execute our plan," said Ramzi Hermiz, president and chief executive officer. "We made solid progress on several important initiatives that position Shiloh to profitably grow and improve the capabilities of our organization over the longer term. We continued the roll-out of major product launches, won $475 million in new business so far this year, and strengthened the organization through investments in technology and systems. We continued restructuring efforts to optimize our assets and enhance our flexing capability. Going into the fourth quarter, we are confident in our ability to deliver full year guidance."

2019 Outlook

Shiloh is maintaining its previously announced 2019 guidance for revenue to range from $1,000 million to $1,150 million and tightening the range for adjusted EBITDA to range from $67 million to $70 million from the prior range of $65 million to $70 million. This is the second consecutive quarter that we have raised the mid-point of guidance.

Shiloh to Host Conference Call Today at 9:00 A.M. ET

Shiloh will host a conference call on Thursday, September 5, 2019 at 9:00 A.M. Eastern Time to discuss Shiloh's third quarter fiscal 2019 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 third quarter fiscal 2019 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 13694094. The replay will be available until September 26, 2019. 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 approximately 4,000 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 agreements related to our outstanding indebtedness or a decrease in customer demand which could cause a covenant default under agreements related to 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, 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 may include non-GAAP financial measures, including “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 to 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 July 31,

 

Nine Months Ended July 31,

 

 

2019

 

2018

 

2019

 

2018

Net income (loss) per common share (GAAP)

 

 

 

 

 

 

 

Basic

$(0.11)

 

$0.47

 

$(0.27)

 

$0.86

 

Tax items (1)

 

(0.34)

 

 

(0.10)

 

Tax Cuts and Jobs Act, impact

 

 

 

(0.14)

 

Restructuring

0.12

 

0.06

 

0.37

 

0.16

 

Amortization of intangibles

0.02

 

0.02

 

0.05

 

0.06

 

Marketable securities

 

0.01

 

 

0.01

 

Legal and professional fees

0.01

 

 

0.08

 

0.01

Adjusted basic earnings (loss) per share (non-GAAP)

$0.04

 

$0.22

 

$0.23

 

$0.86

(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 Ended July 31,

 

Nine Months Ended July 31,

 

 

2019

 

2018

 

2019

 

2018

Net income (loss)

$(2,709)

 

$11,052

 

$(6,295)

 

$19,935

 

Depreciation and amortization

11,652

 

12,361

 

35,010

 

33,775

 

Interest expense

4,629

 

3,208

 

11,826

 

8,185

 

Benefit for income taxes

(973)

 

(7,014)

 

(2,612)

 

(9,854)

EBITDA (non-GAAP)

12,599

 

19,607

 

37,929

 

52,041

 

Restructuring

3,905

 

1,965

 

11,371

 

4,962

 

Legal and professional fees

195

 

 

2,291

 

367

 

Stock compensation

586

 

515

 

1,576

 

1,557

 

Marketable securities

 

154

 

 

154

Adjusted EBITDA (non-GAAP)

$17,285

 

$22,241

 

$53,167

 

$59,081

Adjusted EBITDA margin (non-GAAP)

6.6%

 

7.5%

 

6.7%

 

7.0%

SHILOH INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS

(Dollar amounts in thousands)

 

July 31, 2019

 

October 31, 2018

 

 

(Unaudited)

 

 

ASSETS:

 

 

 

Cash and cash equivalents

$

11,936

 

 

$

16,843

 

Accounts receivable, net

180,502

 

 

209,733

 

Related party accounts receivable

466

 

 

996

 

Prepaid income taxes

6,341

 

 

1,391

 

Inventories, net

67,615

 

 

71,412

 

Prepaid expenses

11,854

 

 

10,478

 

Other current assets

10,318

 

 

22,124

 

Total current assets

289,032

 

 

332,977

 

Property, plant and equipment, net

333,840

 

 

316,176

 

Goodwill

27,384

 

 

27,376

 

Intangible assets, net

13,489

 

 

14,939

 

Deferred income taxes

2,811

 

 

5,665

 

Other assets

7,732

 

 

12,542

 

Total assets

$

674,288

 

 

$

709,675

 

LIABILITIES AND STOCKHOLDERS’ EQUITY:

 

 

 

Current debt

$

350

 

 

$

1,327

 

Accounts payable

170,175

 

 

177,400

 

Other accrued expenses

45,411

 

 

63,031

 

Accrued income taxes

27

 

 

1,874

 

Total current liabilities

215,963

 

 

243,632

 

Long-term debt

248,393

 

 

245,351

 

Long-term benefit liabilities

14,579

 

 

15,553

 

Deferred income taxes

792

 

 

2,894

 

Other liabilities

3,440

 

 

2,723

 

Total liabilities

483,167

 

 

510,153

 

Commitments and contingencies

 

 

 

Stockholders’ equity:

 

 

 

Preferred stock, $0.01 per share; 5,000,000 shares authorized; no shares issued and outstanding at July 31, 2019 and October 31, 2018, respectively

 

 

 

Common stock, par value $0.01 per share; 75,000,000 and 50,000,000 shares authorized at July 31, 2019 and October 31, 2018, respectively; 23,799,035 and 23,417,107 shares issued and outstanding at July 31, 2019 and October 31, 2018, respectively

238

 

 

234

 

Paid-in capital

115,977

 

 

114,405

 

Retained earnings

129,518

 

 

135,813

 

Accumulated other comprehensive loss, net

(54,612

)

 

(50,930

)

Total stockholders’ equity

191,121

 

 

199,522

 

Total liabilities and stockholders’ equity

$

674,288

 

 

$

709,675

 

SHILOH INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share data)

 

 

Three Months Ended July 31,

 

Nine Months Ended July 31,

 

2019

 

2018

 

2019

 

2018

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

Net revenues

$

263,445

 

 

$

294,883

 

 

$

795,748

 

 

$

839,889

 

Cost of sales

239,857

 

 

262,003

 

 

729,790

 

 

747,616

 

Gross profit

23,588

 

 

32,880

 

 

65,958

 

 

92,273

 

Selling, general & administrative expenses

18,105

 

 

22,773

 

 

51,069

 

 

66,159

 

Amortization of intangible assets

518

 

 

607

 

 

1,558

 

 

1,767

 

Restructuring

3,905

 

 

1,965

 

 

11,371

 

 

4,962

 

Operating income

1,060

 

 

7,535

 

 

1,960

 

 

19,385

 

Interest expense

4,633

 

 

3,209

 

 

11,836

 

 

8,194

 

Interest income

(4

)

 

(1

)

 

(10

)

 

(9

)

Other (income) expense, net

113

 

 

289

 

 

(959

)

 

1,119

 

Income (loss) before income taxes

(3,682

)

 

4,038

 

 

(8,907

)

 

10,081

 

Benefit for income taxes

(973

)

 

(7,014

)

 

(2,612

)

 

(9,854

)

Net income (loss)

$

(2,709

)

 

$

11,052

 

 

$

(6,295

)

 

$

19,935

 

Income (loss) per share:

 

 

 

 

 

 

 

Basic earnings (loss) per share

$

(0.11

)

 

$

0.47

 

 

$

(0.27

)

 

$

0.86

 

Basic weighted average number of common shares

23,557

 

 

23,278

 

 

23,486

 

 

23,202

 

Diluted earnings (loss) per share

$

(0.11

)

 

$

0.47

 

 

$

(0.27

)

 

$

0.85

 

Diluted weighted average number of common shares

23,557

 

 

23,453

 

 

23,486

 

 

23,341

 

SHILOH INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollar amounts in thousands)

 

 

 

Nine Months Ended July 31,

 

 

2019

 

2018

 

 

(Unaudited)

 

(Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

Net income (loss)

 

$

(6,295

)

 

$

19,935

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization

 

35,010

 

 

33,775

 

Amortization of deferred financing costs

 

1,033

 

 

935

 

Restructuring

 

1,610

 

 

672

 

Deferred income taxes

 

232

 

 

(2,251

)

Stock-based compensation expense

 

1,576

 

 

1,557

 

(Gain) loss on sale of assets

 

(3,562

)

 

2,300

 

Loss on marketable securities

 

29

 

 

154

 

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable, net

 

30,213

 

 

18,599

 

Inventories, net

 

3,900

 

 

(2,656

)

Prepaids and other assets

 

(1,564

)

 

(4,884

)

Payables and other liabilities

 

(30,965

)

 

(6,989

)

Prepaid and accrued income taxes

 

(6,863

)

 

(10,266

)

Net cash provided by operating activities

 

24,354

 

 

50,881

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

Capital expenditures

 

(48,643

)

 

(38,668

)

Proceeds from sale of marketable securities

 

14

 

 

 

Acquisitions, net of cash required

 

 

 

(62,481

)

Derivative settlements

 

5,855

 

 

 

Proceeds from sale of assets

 

12,339

 

 

2,696

 

Net cash used in investing activities

 

(30,435

)

 

(98,453

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

Payment of capital leases

 

(495

)

 

(667

)

Proceeds from long-term borrowings

 

223,400

 

 

218,300

 

Repayments of long-term borrowings

 

(220,000

)

 

(161,793

)

Payment of deferred financing costs

 

(1,948

)

 

(105

)

Proceeds from exercise of stock options

 

 

 

41

 

Net cash provided by financing activities

 

957

 

 

55,776

 

Effect of foreign currency exchange rate fluctuations on cash

 

217

 

 

336

 

Net increase (decrease) in cash and cash equivalents

 

(4,907

)

 

8,540

 

Cash and cash equivalents at beginning of period

 

16,843

 

 

8,736

 

Cash and cash equivalents at end of period

 

$

11,936

 

 

$

17,276

 

 

Kevin Doherty investors@shiloh.com 1-330-558-2601

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