Market Overview

Shiloh Industries Reports First-Quarter Fiscal 2019 Results

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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 first-quarter ended January 31,
2019.

First Quarter 2019 Highlights:

  • Revenues increased 4.5% year over year to $258.9 million.
  • Gross profit was $13.7 million with a gross margin of 5.3%.
  • Net loss was $4.7 million or 20 cents per diluted share.
  • Adjusted EBITDA was $12.6 million.

"Our products continue to gain traction in the market, demonstrated by
the accelerating pace of new business wins on global platforms," said
Ramzi Hermiz, president and chief executive officer. "During the
quarter, we made meaningful progress executing new product launches that
will drive future performance for Shiloh. As we move past the elevated
launch activity, we anticipate improvement in our profitability."

2019 Outlook

Shiloh is maintaining its previously announced 2019 guidance of revenue
in the range of $1,000 million to $1,150 million and adjusted EBITDA in
the range of $62 million to $70 million. Additionally, the Company
continues to expect annual capital expenditure to be approximately 4% to
5% of revenue.

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

Shiloh will host a conference call on Tuesday, March 12, 2019 at 8:00
A.M. Eastern Time to discuss Shiloh's first 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 first 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 13688285. The replay will be available until
April 2, 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 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, 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
January 31,

  2019   2018
Net income (loss) per common share (GAAP)
Basic $ (0.20 ) $ 0.21
Tax Cuts and Jobs Act, impact (0.14 )
Restructuring 0.10 0.05
Amortization of intangibles 0.02 0.02
Legal and professional fees 0.05 0.01
Adjusted basic earnings (loss) per share (non-GAAP)   $ (0.03 )   $ 0.15  
     
Adjusted EBITDA Reconciliation  

Three Months Ended
January 31,

  2019   2018
Net income (loss) $ (4,698 ) $ 4,858
Depreciation and amortization 11,860 10,117
Interest expense 3,350 2,335
Provision (benefit) for income taxes (3,087 ) (3,058 )
EBITDA (non-GAAP) 7,425 14,252
Restructuring 3,006 1,514
Legal and professional fees 1,635 284
Stock compensation 545 516
Adjusted EBITDA (non-GAAP) $ 12,611 $ 16,566
Adjusted EBITDA margin (non-GAAP)   4.9 %   6.7 %
   
SHILOH INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands)
 

January 31,
2019

October 31,
2018

(Unaudited)  
ASSETS:
Cash and cash equivalents $ 11,667 $ 16,843
Accounts receivable, net 175,852 209,733
Related party accounts receivable 1,727 996
Prepaid income taxes 1,451 1,391
Inventories, net 73,467 71,412
Prepaid expenses 10,298 10,478
Other current assets 12,713   22,124  
Total current assets 287,175 332,977
Property, plant and equipment, net 328,315 316,176
Goodwill 27,609 27,376
Intangible assets, net 14,490 14,939
Deferred income taxes 7,314 5,665
Other assets 11,099   12,542  
Total assets $ 676,002   $ 709,675  
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current debt $ 813 $ 1,327
Accounts payable 168,749 177,400
Other accrued expenses 50,247 63,031
Accrued income taxes 130   1,874  
Total current liabilities 219,939 243,632
Long-term debt 238,581 245,351
Long-term benefit liabilities 15,647 15,553
Deferred income taxes 819 2,894
Other liabilities 3,076   2,723  
Total liabilities 478,062   510,153  
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 per share; 5,000,000 shares authorized; no
shares issued and outstanding at January 31, 2019 and October 31,
2018, respectively
Common stock, par value $0.01 per share; 50,000,000 shares
authorized; 23,686,182 and 23,417,107 shares issued and outstanding
at January 31, 2019 and October 31, 2018, respectively
237 234
Paid-in capital 114,947 114,405
Retained earnings 131,115 135,813
Accumulated other comprehensive loss, net (48,359 ) (50,930 )
Total stockholders' equity 197,940   199,522  
Total liabilities and stockholders' equity $ 676,002   $ 709,675  
 
SHILOH INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
 
Three Months Ended January 31,
2019   2018
(Unaudited) (Unaudited)
Net revenues $ 258,933 $ 247,666
Cost of sales 245,242   219,776  
Gross profit 13,691 27,890
Selling, general & administrative expenses 16,085 21,240
Amortization of intangible assets 521 565
Restructuring 3,006   1,514  
Operating (loss) income (5,921 ) 4,571
Interest expense 3,355 2,340
Interest income (5 ) (5 )
Other (income) expense, net (1,486 ) 436  
Income (loss) before income taxes (7,785 ) 1,800
Provision (benefit) for income taxes (3,087 ) (3,058 )
Net income (loss) $ (4,698 ) $ 4,858  
Income (loss) per share:
Basic earnings (loss) per share $ (0.20 ) $ 0.21  
Basic weighted average number of common shares 23,385   23,107  
Diluted earnings (loss) per share $ (0.20 ) $ 0.21  
Diluted weighted average number of common shares 23,385   23,287  
 
SHILOH INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)
 
Three Months Ended January 31,
2019   2018
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (4,698 ) $ 4,858
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 11,860 10,117
Amortization of deferred financing costs 297 309
Restructuring 1,043 277
Deferred income taxes (3,918 ) (3,551 )
Stock-based compensation expense 545 516
(Gain) loss on sale of assets (2,915 ) (12 )
Loss on marketable securities 20
Changes in operating assets and liabilities:
Accounts receivable, net 40,283 32,313
Inventories, net 704 (671 )
Prepaids and other assets 1,059 (6,044 )
Payables and other liabilities (34,138 ) (23,522 )
Prepaid and accrued income taxes (3,781 ) (2,950 )
Net cash provided by operating activities 6,361   11,640  
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (15,661 ) (9,885 )
Proceeds from sale of assets 10,858    
Net cash used in investing activities (4,803 ) (9,885 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of capital leases (201 ) (223 )
Proceeds from long-term borrowings 61,600 46,900
Repayments of long-term borrowings (68,300 ) (45,370 )
Payment of deferred financing costs   (57 )
Net cash provided by (used in) financing activities (6,901 ) 1,250
Effect of foreign currency exchange rate fluctuations on cash 167   (675 )
Net increase (decrease) in cash and cash equivalents (5,176 ) 2,330
Cash and cash equivalents at beginning of period 16,843   8,736  
Cash and cash equivalents at end of period $ 11,667   $ 11,066  

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