Market Overview

Shiloh Industries Reports Second-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 second-quarter ended April 30,
2019.

Second Quarter 2019 Highlights:

  • Revenues were $273.4 million.
  • Gross profit was $28.7 million with a gross margin of 10.5%.
  • Net income was $1.1 million or 5 cents per diluted share.
  • Adjusted earnings per diluted share was 24 cents, consistent with the
    second quarter of 2018.
  • Adjusted EBITDA was $23.3 million, an increase of 14.8% year-over-year.
  • Adjusted EBITDA margin was 8.5%, an expansion of 170 basis points
    year-over-year.

"We made significant progress increasing our profitability as we
continue to execute exciting new launches of products containing our
innovative and leading technology," said Ramzi Hermiz, president and
chief executive officer. "These launches provide Shiloh with recurring
revenue streams and strengthen our product mix. We are also excited
about our new business awards of approximately $300 million won in the
first half of our fiscal year and remain optimistic despite market
uncertainties. We expect our preemptive actions and restructuring
initiatives will continue to mitigate market softness and contribute to
our profitability. As we look toward the second half, we expect to
deliver full year guidance and are raising the mid-point of our adjusted
EBITDA range."

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
of adjusted EBITDA to $65 million to $70 million from $62 million to $70
million.

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

Shiloh will host a conference call on Monday, June 10, 2019 at 8:00 A.M.
Eastern Time to discuss Shiloh's second 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
second 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 July 1, 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 April 30,

 

Six Months
Ended April 30,

2019   2018 2019   2018
Net income (loss) per common share (GAAP)
Basic $ 0.05 $ 0.17 $ (0.15 ) $ 0.38
Tax Cuts and Jobs Act, impact (0.14 )
Restructuring 0.15 0.05 0.25 0.10
Amortization of intangibles 0.02 0.02 0.03 0.04
Legal and professional fees   0.02     0.07     0.01  
Adjusted basic earnings (loss) per share (non-GAAP)     $ 0.24   $ 0.24   $ 0.20     $ 0.39  
 
 
Adjusted EBITDA Reconciliation    

Three Months
Ended April 30,

 

Six Months
Ended April 30,

2019   2018 2019   2018
Net income (loss) $ 1,112 $ 4,025 $ (3,586 ) $ 8,883
Depreciation and amortization 11,498 11,298 23,358 21,414
Interest expense 3,847 2,642 7,197 4,977
Provision (benefit) for income taxes   1,448     218     (1,639 )   (2,840 )
EBITDA (non-GAAP) 17,905 18,183 25,330 32,434
Restructuring 4,460 1,483 7,466 2,997
Legal and professional fees 461 83 2,096 367
Stock compensation   445     526     990     1,042  
Adjusted EBITDA (non-GAAP) $ 23,271 $ 20,275 $ 35,882 $ 36,840
Adjusted EBITDA margin (non-GAAP)       8.5 %     6.8 %     6.7 %     6.8 %
 
 

SHILOH INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS

(Dollar amounts in thousands)

 
   

April 30,
2019

 

October 31,
2018

(Unaudited)  
ASSETS:
Cash and cash equivalents $ 17,660 $ 16,843
Accounts receivable, net 192,125 209,733
Related party accounts receivable 2,306 996
Prepaid income taxes 1,898 1,391
Inventories, net 67,323 71,412
Prepaid expenses 10,083 10,478
Other current assets 8,838   22,124  
Total current assets 300,233 332,977
Property, plant and equipment, net 329,359 316,176
Goodwill 27,421 27,376
Intangible assets, net 13,973 14,939
Deferred income taxes 5,734 5,665
Other assets 6,470   12,542  
Total assets $ 683,190   $ 709,675  
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current debt $ 484 $ 1,327
Accounts payable 180,793 177,400
Other accrued expenses 39,405 63,031
Accrued income taxes 90   1,874  
Total current liabilities 220,772 243,632
Long-term debt 247,597 245,351
Long-term benefit liabilities 15,677 15,553
Deferred income taxes 801 2,894
Other liabilities 3,190   2,723  
Total liabilities 488,037   510,153  
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 per share; 5,000,000 shares authorized; no
shares issued and outstanding at April 30, 2019 and October 31,
2018, respectively
Common stock, par value $0.01 per share; 75,000,000 and 50,000,000
shares authorized at April 30, 2019 and October 31, 2018,
respectively; 23,762,075 and 23,417,107 shares issued and
outstanding at April 30, 2019 and October 31, 2018, respectively
238 234
Paid-in capital 115,391 114,405
Retained earnings 132,227 135,813
Accumulated other comprehensive loss, net (52,703 ) (50,930 )
Total stockholders' equity 195,153   199,522  
Total liabilities and stockholders' equity $ 683,190   $ 709,675  
 
 

SHILOH INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share data)

 
    Three Months Ended April 30,   Six Months Ended April 30,
2019   2018 2019   2018
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net revenues $ 273,370 $ 297,340 $ 532,303 $ 545,006
Cost of sales 244,691   265,837   489,933   485,613  
Gross profit 28,679 31,503 42,370 59,393
Selling, general & administrative expenses 16,879 22,146 32,964 43,386
Amortization of intangible assets 519 595 1,040 1,160
Restructuring 4,460   1,483   7,466   2,997  
Operating income 6,821 7,279 900 11,850
Interest expense 3,848 2,645 7,203 4,985
Interest income (1 ) (3 ) (6 ) (8 )
Other (income) expense, net 414   394   (1,072 ) 830  
Income (loss) before income taxes 2,560 4,243 (5,225 ) 6,043
Provision (benefit) for income taxes 1,448   218   (1,639 ) (2,840 )
Net income (loss) $ 1,112   $ 4,025   $ (3,586 ) $ 8,883  
Income (loss) per share:
Basic earnings (loss) per share $ 0.05   $ 0.17   $ (0.15 ) $ 0.38  
Basic weighted average number of common shares 23,516   23,222   23,450   23,164  
Diluted earnings (loss) per share $ 0.05   $ 0.17   $ (0.15 ) $ 0.38  
Diluted weighted average number of common shares 23,559   23,357   23,450   23,311  
 
 

SHILOH INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollar amounts in thousands)

   
Six Months Ended April 30,
2019   2018
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (3,586 ) $ 8,883
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 23,358 21,414
Amortization of deferred financing costs 596 621
Restructuring 1,272 581
Deferred income taxes (2,739 ) (2,949 )
Stock-based compensation expense 990 1,042
(Gain) loss on sale of assets (4,156 ) 60
Loss on marketable securities 25
Changes in operating assets and liabilities:
Accounts receivable, net 25,456 2,294
Inventories, net 7,196 1,287
Prepaids and other assets 2,432 (4,445 )
Payables and other liabilities (33,669 ) (7,286 )
Prepaid and accrued income taxes (4,419 ) (1,442 )
Net cash provided by operating activities 12,756   20,060  
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (33,248 ) (23,772 )
Acquisitions, net of cash required (62,481 )
Derivative settlements 5,855
Proceeds from sale of assets 12,339   70  
Net cash used in investing activities (15,054 ) (86,183 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of capital leases (370 ) (448 )
Proceeds from long-term borrowings 140,700 174,900
Repayments of long-term borrowings (138,200 ) (100,161 )
Payment of deferred financing costs (103 )
Proceeds from exercise of stock options   33  
Net cash provided by financing activities 2,130 74,221
Effect of foreign currency exchange rate fluctuations on cash 985   779  
Net increase in cash and cash equivalents 817 8,877
Cash and cash equivalents at beginning of period 16,843   8,736  
Cash and cash equivalents at end of period $ 17,660   $ 17,613  
 

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