Shiloh Industries Reports Lower Year End Results From Business Realignment Charges
27 December 2000
Shiloh Industries Reports Lower Year End Results From Business Realignment Charges
CLEVELAND, Dec. 27 Shiloh Industries, Inc. ,
a leading manufacturer of engineered blanks, welded blanks, stamped components
and modular systems for the automotive and heavy truck industries, today
announced financial results for its fourth quarter and fiscal year ended
October 31, 2000.
Fourth Quarter Results
For the fourth quarter of fiscal 2000, the Company had revenues of $170.7
million, an operating loss of $37.2 million, and a net loss of $25.8 million,
or $1.76 net loss per basic and diluted share, including one-time charges of
$27.2 million. The net loss per basic and diluted share does not reflect the
final impact to basic and diluted weighted average number of common shares as
a result of the earn-out calculation under the MTD Automotive purchase
agreement now being finalized. As a result, the net loss per basic and
diluted share may change and will be disclosed in the annual report on form
10K to be filled with the Securities and Exchange Commission on or about
January 29, 2001. For the fourth quarter of fiscal 1999, the Company had
revenues of $99.2 million, operating income of $10.2 million, and net income
of $5.1 million, or $0.39 per basic and diluted share.
Year End Results
For the year ended October 31, 2000, revenues were $631.3 million, the
operating loss was $7.4 million, and the net loss was $12.6 million, or $0.89
net loss per basic and diluted share. Because the earn-out calculation under
the MTD Automotive purchase agreement has not been finalized, the net loss per
basic and diluted share may change, as noted above. For fiscal 1999, revenues
were $354.2 million, operating income was $31.5 million, and net income was
$15.3 million, or $1.17 per basic and diluted share.
The lower results for the fourth quarter relate principally to one-time
charges associated with a strategic business realignment of the Company, a
softness in tool & die business, a weakening steel industry and a decline of
sales in heavy truck and certain automotive platforms.
The strategic realignment is aimed at repositioning Shiloh's resources to
focus on producing engineered metal products. The realignment includes the
closing of the Utica Tool & Die facility and the decision to sell certain
assets of Valley City Steel and Canton Tool & Die, both operating subsidiaries
of Shiloh. This realignment will enable Shiloh to focus its resources on the
automotive sector by allowing the Company to proactively manage and address
the demand for internal blanking and stamping operations and adapt to current
market conditions.
The net loss of $25.8 million for the fourth quarter of fiscal 2000
includes certain items discussed below, each of which is net of tax. This
loss includes approximately $21.5 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. The
operating loss from these three operations was approximately $3.9 million in
the fourth quarter of fiscal 2000. The net loss also includes approximately
$1.0 million of costs related to the launch of certain programs at Saltillo
Welded Blank, Ohio Welded Blank and Dickson Manufacturing facilities.
In addition, the Company wrote-off costs of approximately $0.8 million
(after taxes) associated with a high yield bond offering that was terminated
during the fourth quarter of fiscal 2000.
The difference in the net loss of $5.2 million from $31.0 million (as
reported in the November 21, 2000 press release -- "Shiloh Industries
announces fourth quarter charges relating to strategic initiatives") to $25.8
million is the result of a decrease in the estimated loss on the sale of
assets for Valley City Steel and Canton Die, an increase in the tax benefit
and elimination of the extraordinary loss on early extinguishment of debt,
partially off-set by an increase in the operating losses at Canton Die, Valley
City Steel and Utica Tool & Die.
Jack F. Falcon, President and CEO, said, "Fiscal 2000 was a positive year
for the Company despite the financial results. Unfortunately the
restructuring and certain other charges have overshadowed some pivotal
accomplishments. These include:
"Adoption of a new business plan focusing on engineered products for the
automotive sector and centralization of many management functions.
"Successful start-up of our new Saltillo, Mexico facility. This plant
adds 125,000 square-feet of state-of-the-art blanking capacity and supplies
tailor-welded blanks to nearby General Motors facilities.
"Completion of the MTD Automotive acquisition, improving our ability to
provide automotive manufacturers (OEMs) and Tier 1 suppliers with high-
quality, value-added engineered components.
"Completion of the purchase of the assets of A.G. Simpson (Tennessee)
Inc., dba Dickson Manufacturing. Dickson produces automotive stampings and
assemblies, primarily for Nissan Motor Corporation, Johnson Controls, Inc.,
Ford Motor Company, Saturn Corporation and Visteon Corporation. The
acquisition expands our capabilities and improves our position as a key
supplier of engineered metal products for automotive seating and interior
structural applications.
"The successful launch of several new welded-blank programs at our welded
blanking facilities in Ohio and launch of several stamping programs at our
Dickson facility."
Mr. Falcon noted, "The Company is cautiously optimistic about Fiscal 2001.
According to Automotive News magazine, the U.S. vehicle build for 2001 is
estimated to be off about 7%, but to reach 16.2 million units. Despite the
lower estimate for overall production, we expect the automotive sector to
continue to outsource more work and to consolidate the number of approved
suppliers. In addition, we are supplying components and have been awarded new
business for new platforms and vehicles. As a result, we currently expect our
results for the first quarter of fiscal 2001, ending January 31, to be in the
range of $0.05 per share to $0.10 per share."
Headquartered in Cleveland, Shiloh Industries, Inc. currently owns 13
subsidiaries comprised of 16 operations in Ohio, Michigan, Georgia, Mexico and
Tennessee and employs more than 3,000 people.
A conference call to discuss Shiloh's year-end results will take place at
3 p.m. (EST) on Thursday, December 28, 2000. To participate in listen-only
mode, dial 800-946-0720 approximately 10 minutes prior to the conference and
request conference code 701-439. A replay will be available from 6 p.m.,
Thursday, December 28, through 5 p.m., Wednesday, January 3, 2001. To access
the replay, call 888-203-1112 and follow the prompts to conference 701-439.
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, new platforms or vehicles; 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.
SHILOH INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands)
(Unaudited)
Three months ended Twelve months ended
October 31, October 31,
2000 1999 2000 1999
Revenues $170,668 $99,185 $631,262 $354,220
Cost of sales 154,863 80,056 548,059 291,265
Gross profit 15,805 19,129 83,203 62,955
Selling, general and
administrative
expenses 18,743 8,919 56,299 31,441
Asset impairment charges 33,043 --- 33,043 ---
Restructuring charge 1,230 --- 1,230 ---
Operating income (loss) (37,211) 10,210 (7,369) 31,514
Interest expense 4,659 1,938 15,407 7,489
Interest income 30 18 94 109
Minority interest --- 53 --- 474
Other income (expense),
net (155) (84) 1,536 66
Income (loss) before
income taxes (41,995) 8,259 (21,146) 24,674
Provision (benefit)
for income taxes (16,239) 3,126 (8,525) 9,363
Net income (loss) $(25,756) $5,133 $(12,621) $15,311
Earnings (loss)
per share:
Basic earnings (loss)
per share $(1.76)(1) $.39 $(.89)(1) $1.17
Basic weighted average
number of common shares 14,643(1) 13,081 14,251(1) 13,081
Diluted earnings
(loss) per share $(1.76)(1) $.39 $(.89)(1) $1.17
Diluted weighted average
number of common shares 14,643(1) 13,085 14,251(1) 13,085
(1) The net loss per basic and diluted share does not reflect the final
impact to basic and diluted weighted average number of common shares as a
result of the earn-out calculation under the MTD Automotive purchase agreement
now being finalized. As a result, the net loss per basic and diluted share
may change and will be disclosed in the annual report on form 10K to be filled
with the Securities and Exchange Commission on or about January 29, 2001.