Shiloh Industries Reports First Quarter Results
CLEVELAND, March 5 -- Shiloh Industries, Inc. today reported results for the first quarter ended January 31, 2003.
First Quarter Results
For the first quarter ended January 31, 2003, the Company had revenues of $136.6 million, a decrease of $9.4 million or 6.4% from the same period in fiscal 2002. Operating income for the quarter was $2.3 million compared to an operating loss of $4.9 million during the same period in fiscal 2002. Net loss for the first quarter ended January 31, 2003 was $2.4 million or $0.16 per share, which includes a $0.13 per share goodwill impairment charge associated with an accounting change. The first quarter of fiscal 2002 reported net loss was $5.7 million or $0.39 per share.
Changes in Revenues
The decrease in revenues for the first quarter of fiscal 2003 is primarily due to the closures of the Company's Wellington Die, Canton Die and Shiloh of Michigan locations in January 2002. In addition, lower volumes due to extended December shutdowns at a number of customer locations contributed to the decrease in revenues compared to the first quarter fiscal 2002.
Operating Results
Operating income of $2.3 million for the first quarter of fiscal 2003 is an improvement of $7.2 million when compared to the similar period in fiscal 2002. The improvement is primarily the result of continued operating efficiencies in quality and productivity, cost reductions and the closure of certain facilities during the first quarter of fiscal 2002. "The impact on our operations of our focus on process characterization and process optimization during fiscal 2002 is quite evident in the results of the first quarter of fiscal 2003," said Theodore K. Zampetis, President and CEO. Mr. Zampetis added, "our gross profit percentage increased to 8.7% for the first quarter of fiscal 2003 compared to 5.1% in the first quarter of fiscal 2002 while selling, general and administrative expenses as a percentage of revenues decreased from 8.4% during the first quarter of fiscal 2002 to 7.0% for the first quarter of fiscal 2003. Our focus on improving productivity and controlling costs throughout our operations strongly contributed to the ability of the organization to improve financial performance on lower volumes."
Cumulative Effect of Change in Accounting
As a result of the adoption of Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets", the Company recorded a $3.0 million ($2.0 million after tax) goodwill impairment charge during the first quarter of fiscal 2003. The adoption of this standard increased the net loss per share by $0.13.
Liquidity
The Company had $203.7 million of borrowings under the revolving line of credit as of January 31, 2003, a reduction of $5.4 million from the $209.1 million outstanding at October 31, 2002. Availability at January 31, 2003 was $53.2 million. "Our operations continue to generate cash, which we are using to invest prudently in optimizing our systems and processes and to lower our debt. As of January 31, 2003, we have reduced our bank debt by more than $60.0 million since January 31, 2002. This reduction in debt has lowered our interest expense by approximately $0.9 million when comparing the first quarter of fiscal 2003 to fiscal 2002," said Mr. Zampetis. He added, "we will continue to manage cash efficiently by reducing our investment in working capital, which we anticipate will enable us to meet our pension funding requirements and further reduce our borrowings."
Headquartered in Cleveland, Ohio, Shiloh Industries is a leading manufacturer of blanks, engineered welded blanks, engineered stampings and modular assemblies for the automotive and heavy truck industries. The Company has 16 wholly owned subsidiaries at locations in Ohio, Georgia, Michigan, Tennessee and Mexico, and employs approximately 2,500.
A conference call to discuss fiscal 2003 first quarter results will be held on Wednesday, March 5, 2003 at 10:30 a.m. (EST). To listen to the conference call, dial (800) 374-0915 approximately 5 minutes prior to the start time and request the Shiloh Industries first quarter conference call. A replay of the conference call will be available from 12:30 p.m. (EST), Wednesday, March 5, 2003, through 5 p.m. (EST) Wednesday, March 12, 2003. To access the replay, call (800) 642-1687 and enter conference code 8764240.
The forward-looking statements in this press release involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially are the following: the Company's dependence on the automotive and light truck and heavy truck industries, which are highly cyclical; the dependence of the automotive and light truck industry on consumer spending, which is subject to the impact of domestic and international economic conditions and regulations and policies regarding international trade; the ability of the Company to accomplish its strategic objectives with respect to external expansion through selective acquisitions and internal expansion; increases in the price of, or limitations on the availability of steel, the Company's primary raw material, or decreases in the price of scrap steel; risks associated with integrating operations of acquired companies; the ability of the Company to implement its cost savings initiatives; potential disruptions or inefficiencies in operations due to or during facility expansions or start-up facilities; risks related to conducting operations in a foreign country; risks related to labor relations, labor expenses or work stoppages involving the Company, its customers or suppliers; and other risks and uncertainties that may be identified from time to time in the Company's reports to the Securities and Exchange Commission.
SHILOH INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
(Unaudited)
Three months ended
January 31,
2003 2002
Revenues $136,572 $145,967
Cost of sales 124,712 138,547
Gross profit 11,860 7,420
Selling, general and administrative expenses 9,578 12,277
Operating income (loss) 2,282 (4,857)
Interest expense 3,480 4,339
Interest income 8 53
Other income, net 209 320
Loss before equity in net losses of minority
owned company, income taxes and cumulative
effect of accounting change (981) (8,823)
Equity in net losses of minority owned company - (156)
Loss before income taxes and cumulative effect
of accounting change (981) (8,979)
Benefit for income taxes (520) (3,233)
Loss before cumulative effect of accounting
change (461) (5,746)
Cumulative effect of accounting change, net of
income tax benefit of $1,058 (1,963) -
Net loss $ (2,424) $ (5,746)
Loss per share:
Basic loss per share before cumulative effect
of accounting change $ (.03) $ (.39)
Cumulative effect of accounting change per
share (.13) -
Basic loss per share $ (.16) $ (.39)
Basic weighted average number of common shares 14,802 14,798
Diluted loss per share before cumulative
effect of accounting change $ (.03) $ (.39)
Cumulative effect of accounting change per
share (.13) -
Diluted loss per share $ (.16) $ (.39)
Diluted weighted average number of common
shares 14,802 14,798