Shiloh Industries Announces 4th Quarter Charges Relating To Strategic Initiatives
21 November 2000
Shiloh Industries Announces 4th Quarter Charges Relating To Strategic Initiatives
CLEVELAND, Nov. 21 Shiloh Industries, Inc. ,
a leading manufacturer of engineered blanks, welded blanks, stamped components
and modular systems for the automotive and heavy truck industries, announced
today that it will take certain one-time charges relating to strategic
initiatives previously announced.
According to Shiloh President and CEO Jack F. Falcon, "We have taken a
number of decisive actions to reposition our Company and further support our
business strategy of providing engineered metal products to our customers.
For example, we launched several new welded blank programs at certain of our
welded blanking facilities in Ohio and Mexico and we launched stamping
programs at our Dickson facility. Although the fourth quarter has shown a
softness in our tool & die business, a weakening steel industry and a decline
of sales in heavy truck and certain automotive platforms, our strategic
initiatives will enable us to better focus on our core businesses while
retaining our higher value-added operations."
As part of these initiatives, the Company has decided to sell certain
assets of Valley City Steel and Canton Tool & Die, operating subsidiaries of
Shiloh, as well as close its Utica Tool & Die facility. Mr. Falcon said these
actions would enable Shiloh to focus its resources on the automotive sector by
allowing the Company to proactively manage and address the demand for our
internal blanking and stamping operations and adapt to current market
conditions.
In the fourth quarter of fiscal 2000, Shiloh closed its Utica Tool & Die
operations. Most of the personnel were phased out and the equipment was
either transferred to other Shiloh tool & die locations or is being held for
sale.
Shiloh anticipates that the net loss for the fourth quarter of fiscal 2000
will be approximately $31 million. The net loss includes certain items
discussed below, shown net of taxes. This loss includes approximately $25
million of certain charges for assets held for sale at the Canton Tool & Die
and Valley City Steel facilities, as well as certain charges associated with
the closing of Utica Tool & Die. Shiloh also expects that the operating loss
from these three operations will be approximately $3 million in the fourth
quarter of fiscal 2000. The net loss also includes approximately $1 million
of costs relating to the launch of certain programs at Saltillo Welded Blank,
Ohio Welded Blank and Dickson Manufacturing facilities.
In addition, on August 11, 2000, Shiloh replaced its existing credit
facility with a new five-year $300 million senior secured agreement. As a
result, the Company will record an extraordinary loss on early extinguishment
of debt of approximately $600,000 in the fourth quarter of fiscal 2000. The
Company will also write-off costs of approximately $900,000 associated with a
high yield bond offering that was terminated during the fourth quarter of
fiscal 2000.
Because of these initiatives and other charges, Shiloh anticipates a
fourth-quarter loss of approximately $2.20 per share.
On August 28, 2000, Shiloh purchased the assets of A.G. Simpson
(Tennessee) Inc., dba Dickson Manufacturing. The assets consist of a modern
plant and equipment that produce automotive stampings and assemblies,
primarily for Nissan Motor Corporation, Johnson Controls, Inc., Ford Motor
Company, Saturn Corporation and Visteon Corporation. The acquisition reflects
an expansion of the Company's capabilities and improves its position as a key
supplier of engineered metal products for automotive seating and interior
structural applications.
Headquartered in Cleveland, Shiloh Industries, Inc. currently owns 13
subsidiaries comprised of 17 operations in Ohio, Michigan, Georgia and Mexico
and employs more than 3,000 people.
A conference call to discuss Shiloh's fourth-quarter earnings outlook will
take place at 9 a.m. on Wednesday, November 22. To participate by listen-only
mode, dial 800-289-0493 fifteen minutes prior to the conference. A replay
will be available from approximately 12 p.m. on Wednesday, November 22 through
5 p.m., Tuesday, November 28. To access the replay, call 888-203-1112 and
follow the prompts for conference 616668.
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; competitive factors such as changes in the price of, or
limitations on the availability of steel; the ability of the company to
continue to successfully integrate the operations of MTD Automotive and A.G.
Simpson (Tennessee) Inc.; the ability of the Company to consummate its
strategic initiatives to sell Valley City Steel and Canton Tool & Die; the
ability to commence operations and minimize start-up costs at new facilities;
including the facility in Saltillo, Mexico; potential disruptions in
operations due to, or during facility expansions; delays in, or cancellations
of, customer programs; the risks and uncertainties related to commencing
foreign operations; 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 filings with the Securities and Exchange Commission.