OREANDA-NEWS. Shiloh Industries, Inc. (NASDAQ:SHLO), a leading global supplier of lightweighting, noise and vibration solutions, today reported financial results for its fiscal third-quarter 2016.

Third Quarter 2016 Highlights:

  • Revenue for the third quarter was $248.8 million, down from $266.1 million in the third quarter of 2015, due mainly to changes in customer production schedules and fewer shipping days in the quarter.
  • Gross margin for the third quarter increased 210 basis points to 9.7 percent compared to the third quarter of fiscal 2015 of 7.6 percent and sequentially expanded by 100 basis points.
  • Income before tax was $1.0 million with a net loss of $0.3 million, or $0.02 per share, after higher tax expense compared with net income of $2.0 million, or $0.11 per share, in the third quarter of 2015.
  • Adjusted EBITDA was $17.2 million, resulting in an expanded adjusted EBITDA margin of 130 basis points compared to the third quarter of fiscal 2015.

"Our focus on providing leading lightweighting solutions and responsive service helped drive third quarter new business awards, which are expected to produce around $225 million of lifetime sales,” according to Ramzi Hermiz, president and chief executive officer. "We continue to make improvements in our operations as well. We generated $48 million in cash from operating activities year-to-date, helping to reduce long-term debt by $40 million since year end and we improved our margins. We remain positive given the underlying market need for lightweighting solutions and a cleaner environment, both of which are in full alignment with our strategy,” said Hermiz.

Adjusted earnings per share (EPS) Three Months Ended
July 31,
    2016   2015
Net income (loss) per common share (GAAP)      
Diluted $ (0.02 )   $ 0.11  
  Amortization of intangibles 0.02     0.02  
  Plant optimization activities 0.04     —  
  Accrual adjustments 0.01     (0.07 )
  Foreign receivable mark-to-market 0.01     —  
Diluted adjusted earnings per share (non-GAAP) $ 0.06     $ 0.06  
Adjusted EBITDA Reconciliation   Three Months Ended
July 31,
      2016   2015
Net income (loss)   $ (349 )   $ 1,981  
  Depreciation and amortization   9,432     9,098  
  Stock compensation expense   333     309  
  Interest expense   4,645     2,885  
  Provision for income taxes   1,363     2,480  
           
EBITDA   15,424     16,753  
  Plant optimization activities   1,000     —  
  Accrual adjustments   398     (1,900 )
  Foreign receivable mark-to-market   350     —  
Adjusted EBITDA   $ 17,172     $ 14,853  
Adjusted EBITDA margin   6.9 %   5.6 %

About Shiloh Industries, Inc.       

Shiloh Industries, Inc. is a leading global supplier providing lightweighting and noise, vibration and harshness solutions to the automotive, commercial vehicle and other industrial markets, capable of delivering solutions in aluminum, magnesium, steel and high-strength steel alloys to original equipment manufacturers and suppliers. The company offers the broadest portfolio of lightweighting solutions in the industry through their BlankLight®, CastLight™ and StampLight™ brands.  Shiloh designs and manufactures components in body, chassis and powertrain systems with expertise in precision blanks, ShilohCore™ acoustic laminates, aluminum and steel laser welded blanks, complex stampings, modular assemblies, aluminum and magnesium die casting, as well as precision machined components.  Shiloh has over 3,500 dedicated employees with operations, sales and technical centers throughout Asia, Europe and North America.

SHILOH INDUSTRIES, INC.
 
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands)
(Unaudited)
 
  July 31,
 2016		   October 31,
 2015
 
ASSETS:      
Cash and cash equivalents $ 4,576     $ 13,100  
Investment in marketable securities 124     356  
Accounts receivable, net of allowance for doubtful accounts of $615 and $821 at July 31, 2016 and October 31, 2015, respectively 156,194     194,373  
Related-party accounts receivable 841     1,092  
Prepaid income taxes 6,292     3,799  
Inventories, net 64,616     58,179  
Deferred income taxes 1,663     2,837  
Prepaid expenses and other assets 35,287     48,267  
Total current assets 269,593     322,003  
Property, plant and equipment, net 267,184     280,260  
Goodwill 28,509     28,843  
Intangible assets, net 17,848     19,543  
Deferred income taxes 4,424     4,431  
Other assets 19,302     11,509  
Total assets $ 606,860     $ 666,589  
LIABILITIES AND STOCKHOLDERS’ EQUITY:      
Current debt $ 1,407     $ 2,080  
Accounts payable 137,730     160,405  
Other accrued expenses 34,239     34,459  
Accrued income taxes 810     —  
Total current liabilities 174,186     196,944  
Long-term debt 259,224     298,873  
Long-term benefit liabilities 15,438     17,376  
Deferred income taxes 12,463     6,180  
Interest rate swap agreement 6,087     4,989  
Other liabilities 794     1,312  
Total liabilities 468,192     525,674  
Commitments and contingencies      
Stockholders’ equity:      
Preferred stock, $.01 per share; 5,000,000 shares authorized; no shares issued and outstanding at July 31, 2016 and October 31, 2015, respectively —     —  
Common stock, par value $.01 per share; 50,000,000 and 25,000,000 shares authorized at July 31, 2016 and October 31, 2015, respectively; 17,614,056 and 17,309,623 shares issued and outstanding at July 31, 2016 and October 31, 2015, respectively 176     173  
Paid-in capital 70,100     69,334  
Retained earnings 119,106     121,457  
Accumulated other comprehensive loss, net (50,714 )   (50,049 )
Total stockholders’ equity 138,668     140,915  
Total liabilities and stockholders’ equity $ 606,860     $ 666,589  
SHILOH INDUSTRIES, INC.
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
(Unaudited)
 
  Three Months Ended
July 31,		   Nine Months Ended
July 31,
  2016   2015   2016   2015
Net revenues $ 248,832     $ 266,071     $ 784,151     $ 784,236  
Cost of sales 224,575     245,822     719,135     717,355  
Gross profit 24,257     20,249     65,016     66,881  
Selling, general & administrative expenses 17,546     12,246     52,122     42,730  
Amortization of intangible assets 566     486     1,695     1,795  
Operating income 6,145     7,517     11,199     22,356  
Interest expense 4,645     2,885     13,517     6,714  
Interest income —     (7 )   (6 )   (21 )
Other (income) expense 486     178     518     (886 )
Income (loss) before income taxes 1,014     4,461     (2,830 )   16,549  
Provision (benefit) for income taxes 1,363     2,480     (479 )   5,772  
Net income (loss) $ (349 )   $ 1,981     $ (2,351 )   $ 10,777  
Earnings (loss) per share:              
Basic earnings (loss) per share $ (0.02 )   $ 0.11     $ (0.13 )   $ 0.63  
Basic weighted average number of common shares 17,614     17,227     17,614     17,220  
Diluted earnings (loss) per share $ (0.02 )   $ 0.11     $ (0.13 )   $ 0.62  
Diluted weighted average number of common shares 17,614     17,246     17,614     17,247  
SHILOH INDUSTRIES, INC.
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)
(Unaudited)
 
    Nine Months Ended July 31,
    2016   2015
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net income (loss)   $ (2,351 )   $ 10,777  
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization   28,307     26,083  
Asset impairment, net   273     —  
Amortization of deferred financing costs   1,873     519  
Deferred income taxes   7,672     3,134  
Stock-based compensation expense   784     851  
(Gain) loss on sale of assets   (76 )   97  
Changes in operating assets and liabilities:        
Accounts receivable   39,662     3,391  
Inventories   (5,921 )   (7,360 )
Prepaids and other assets   6,260     (8,456 )
Payables and other liabilities   (26,593 )   (12,057 )
Accrued income taxes   (1,655 )   558  
Net cash provided by operating activities   48,235     17,537  
CASH FLOWS FROM INVESTING ACTIVITIES:        
Capital expenditures   (18,238 )   (24,038 )
Acquisitions, net of cash acquired   —     195  
Proceeds from sale of assets   1,350     11,417  
Net cash used for investing activities   (16,888 )   (12,426 )
CASH FLOWS FROM FINANCING ACTIVITIES:        
Payment of capital leases   (541 )   (581 )
Proceeds from long-term borrowings   102,900     94,900  
Repayments of long-term borrowings   (141,874 )   (102,665 )
Payment of deferred financing costs   (308 )   (1,342 )
Proceeds from exercise of stock options   —     159  
Net cash used for financing activities   (39,823 )   (9,529 )
Effect of foreign currency exchange rate fluctuations on cash   (48 )   (961 )
Net decrease in cash and cash equivalents   (8,524 )   (5,379 )
Cash and cash equivalents at beginning of period   13,100     12,014  
Cash and cash equivalents at end of period   $ 4,576     $ 6,635  
         
Supplemental Cash Flow Information:        
Cash paid for interest   $ 11,543     $ 6,547  
Cash paid for (refund of) income taxes   $ (5,702 )   $ 245  
         
Non-cash Activities:        
Capital equipment included in accounts payable   $ 2,896     $ 3,958