Shiloh Industries Reports 2nd Quarter Fiscal 2018 Results

Shiloh Industries Inc., a global supplier of lightweighting, noise and vibration solutions to the automotive, commercial vehicle and other industrial markets, has reported financial results for its fiscal 2018 second-quarter and six months ended April 30, 2018.

Second-Quarter 2018 Highlights:

Revenues increased 8.9 percent to $297.3 million as compared to second-quarter 2017
Gross profit was $31.5 million and margin of 10.6 percent
Net income was $4 million or 17 cents per diluted share
Adjusted EBITDA was $20.3 million and margin of 6.8 percent

First-Half 2018 Highlights (compared to First-Half 2017):

Revenues increased 4.6 percent to $545 million
Gross profit increased 3.1 percent to $59.4 million
Net income increased 302 percent to $8.9 million
Net income per diluted share increased 217 percent to 38 cents per diluted share
Adjusted EBITDA was $36.8 million

“Shiloh remained on track with our plan in the second quarter given the significant plant and product launch activity as we converted more of our wins from recent years into commercial production,” said Ramzi Hermiz, president and CEO of Shiloh Industries Inc.

Strategic Highlights

On March 1, Shiloh completed the strategic acquisition of Brabant Alucast Italy and Brabant Alucast Netherlands. This acquisition expands Shiloh’s technology portfolio with the addition of aluminum casting capabilities in Europe. The deal also brought additional magnesium capacity supporting growing customer demand for this level of lightweight performance. Shiloh is one of the leading automotive structural magnesium component manufacturers globally.

“As we look forward, we see meaningful opportunity to improve profitability of the newly acquired business. That improvement, coupled with our efforts to drive performance in the base business, has us well-positioned to achieve our margin targets,” according to Hermiz.

In addition, Shiloh celebrated the opening of its new aluminum products facility in China, which is well-positioned to support the growing local electric vehicle market in Asia, its new structural magnesium die casting operation in Clarksville, Tennessee, and its new engineering lab in Plymouth, Michigan.

Restructuring Actions

During the second quarter, Shiloh incurred restructuring expense of $1.5 million related to a strategic action initiated in the fourth-quarter of fiscal 2017. This action is designed to improve future profitability and competitiveness as the company continues to proactively address the shift in consumer preferences to trucks and SUVs away from passenger cars and the desire to increase flexibility to manage cyclical changes.

2018 Outlook

Shiloh is reaffirming its Adjusted EBITDA guidance range for 2018 of $73 million to $76 million which includes minimal contribution from the Brabant acquisition, considering acquisition and integration costs and headwinds from increasing raw material and launch costs. This guidance reflects an Adjusted EBITDA margin range of 7 percent to 7.2 percent as a result of the acquisition’s current lower margin contribution. In addition, the company continues to expect annual capital expenditures to remain approximately 4 to 5 percent of revenue.