Shiloh Reports First Quarter Earnings
16 February 1999
Shiloh Reports First Quarter Earnings
MANSFIELD, Ohio, Feb. 16 -- Shiloh Industries, Inc.
, a vertically integrated steel processor for the automotive,
heavy truck, and heating and air conditioning industries, today announced
financial results for the first quarter of fiscal 1999.
Net income for the first quarter of 1999 decreased to $2.0 million, or
$.16 per share, from $4.9 million, or $.38 per share for the same period in
fiscal 1998, while operating income declined to $4.7 million from $8.9 million
in the prior year. Revenues totaled $81.6 million for the first quarter of
fiscal 1999 compared to $73.9 million for last year's first quarter.
"At Shiloh, we have begun 1999 with renewed confidence. Our first quarter
performance still reflects the impact of last year's challenging third and
fourth quarters. During the second half of 1998, Shiloh experienced lower
than expected tool and die margins; a decline in the price and market for
engineered scrap steel and a decrease in outsourcing by major steel-producing
customers," said Shiloh Industries' Chairman, President and Chief Executive
Officer Robert L. Grissinger.
"We are pleased to begin the new year with improvement in a number of key
areas. For example, revenue growth is up 10.4 percent compared to the first
quarter of 1998. This increase is, in part, attributed to our tailor-welded
blanking operations, which are exceeding our expectations. GDM, now fully
integrated, is implementing its new management team's initiatives and is
seeing sequential improvement compared to fourth quarter results. In addition
the steel industry and scrap prices are gradually recovering," Grissinger
said.
"We are beginning to see results from our five-year strategic initiative,
Shiloh 2000, which involved a lot of contingency planning as well as internal
and external investments. Our current focus is on cross-selling services and
building business. Two of our operations which have been successful at
pursuing this strategy in the first quarter are Sectional Stamping, Inc. and
Medina Blanking, Inc. Through our relationships with existing customers we
have been successful in securing new programs that will continue the growth of
these operations throughout fiscal 1999," said Grissinger.
"Yet we are not underestimating the challenges that face us. We are
still experiencing lower than expected margins in our tool and die business,"
he said. "Although the price and market for engineered scrap steel has
improved from its November 1998 low of $71 a gross ton to $93 a gross ton in
January 1998, it is still far below the $161 a gross ton set in December 1997.
The negotiation of two labor contracts and capital expansion and integration
at several facilities also continues. Overall, however, we remain confident in
our strategies and we will continue to strive toward the goals set forth in
Shiloh 2000," Grissinger concluded.
Headquartered in Mansfield, Ohio, Shiloh Industries supplies blanks,
stampings and processed steel to automotive, heavy truck, heating and air
conditioning and other industrial manufacturers. The company operates ten
facilities in Ohio, Michigan and Georgia and employs more than 1,845 people.
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: a downturn in the automotive industry
and the general economy; risks associated with integrating the operations of
acquired companies; competitive factors such as increases in the price of, or
limitations on the availability of, steel; potential disruptions in operations
due to, or during, facility expansions; delays in, or cancellations of,
customer programs; a labor dispute involving Shiloh, 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.
CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per share data)
(Unaudited)
Three months ended
January 31,
1999 1998
Revenues $ 81,601 $ 73,930
Costs of sales 69,204 58,902
Gross profit 12,397 15,028
Selling, general and
administrative expenses 7,714 6,137
Operating income 4,683 8,891
Interest expense 1,697 995
Interest income 56 4
Minority Interest 222 83
Other income, net 38 12
Income before income taxes 3,302 7,995
Provision for income taxes 1,271 3,070
Net Income 2,031 4,925
Earnings per share:
Basic earnings per share $ .16 $ .38
Basic weighted average number
of common shares: 13,081 13,038
Diluted earnings per share $ .16 $ .38
Diluted weighted average number
of common shares: 13,093 13,088
SHILOH INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
January 31, October 31,
1999 1998
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 3,239 $ 643
Accounts receivable 58,780 46,802
Inventory 44,075 44,784
Deferred income taxes 1,290 1,290
Prepaid expenses 4,607 3,544
Total current assets 111,991 97,063
Property, plant and
equipment, net 254,073 240,441
Goodwill and other intangible
assets, net 11,954 12,056
Other assets 5,495 5,269
Total assets $383,513 $354,829
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable 31,428 23,863
Accrued income taxes 2,442 1,020
Advanced billings 2,083 2,836
Other accrued expenses 12,669 12,984
Total current liabilities 48,622 40,703
Long-term debt 154,600 135,865
Deferred income taxes 14,563 14,563
Long-term pension liability 880 880
Total liabilities 218,665 192,011
Stockholders' equity:
Common stock 131 131
Paid-in capital 39,400 39,400
Retained earnings 125,317 123,287
Total stockholders' equity 164,848 162,818
Total liabilities and
stockholders' equity $383,513 $354,829