Shiloh Industries Inc. reported weak bottom-line results for second-quarter fiscal 2018 (ended Apr 30, 2018). Its share price declined 5.1% yesterday, ending the trading session at $10.01.
The company’s adjusted earnings in the reported quarter were 24 cents per share, reflecting a decline of 33.3% from the year-ago tally of 36 cents.
Top Line Improve Y/Y
In the quarter under review, Shiloh Industries’ net revenues were $297.3 million, reflecting growth of 8.9% (or $24.3 million) from the year-ago quarter. Of the total improvement, acquisitions contributed roughly $23.5 million while the rest was influenced by organic sales growth and negative impacts of divestitures.
On a geographical basis, revenues from the United States totaled $213.6 million. It contributed approximately 71.8% of net revenues. Operations from Europe generated revenues of $74 million, accounting for 24.9% of net revenues. Revenues from Rest of World totaled $9.8 million, representing 3.3% of net revenues.
Margins Weak on Higher Costs and Expenses
In the quarter under review, Shiloh Industries’ cost of sales increased 11% year over year to $265.8 million. It represented 89.4% of net revenues compared with 87.7% in the year-ago quarter. Gross margin declined 170 basis points (bps) year over year to 10.6%. Selling, general and administrative expenses increased 2.2% year over year to $22.1 million, representing 7.4% of net revenues.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) were $20.3 million, down 17.2% year over year. Adjusted EBITDA margin was 6.8% versus 9% in the second quarter of fiscal 2017.
Balance Sheet and Cash Flow
Exiting the fiscal second quarter, Shiloh Industries’ cash and cash equivalents were $17.6 million, up 59.1% from $11.1 million at the previous quarter end. The company’s long-term debt grew 40.1% sequentially to $255.6 million. The company received $128 million from long-term borrowings while repaid roughly $55 million.
In the first half of fiscal 2018, the company’s net cash flow from operating activities totaled $20.1 million, down 40.8% from the previous year’s comparable period. Capital expenditure surged 32.2% year over year to $23.8 million.
Outlook
In the quarters ahead, Shiloh Industries anticipates gaining from new business wins as well as efforts to capitalize from rise in demand for SUVs and trucks. Also, synergistic gains from acquired businesses — including Brabant Alucast Netherlands and Brabant Alucast Italy in March 2018 — as well as benefits from a new engineering lab in Michigan, facility manufacturing aluminum products in China and Tennessee-based magnesium die casting business will be advantageous.
For fiscal 2018 (ending October 2018), the company reaffirmed its adjusted EBITDA guidance of $73-$76 million. Adjusted EBITDA margin is anticipated to be 7-7.2%. Capital expenditure is predicted to be roughly 4-5% of revenues.
Shiloh Industries, Inc. Price
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Shiloh Industries Inc. reported weak bottom-line results for second-quarter fiscal 2018 (ended Apr 30, 2018). Its share price declined 5.1% yesterday, ending the trading session at $10.01.
The company’s adjusted earnings in the reported quarter were 24 cents per share, reflecting a decline of 33.3% from the year-ago tally of 36 cents.
Top Line Improve Y/Y
In the quarter under review, Shiloh Industries’ net revenues were $297.3 million, reflecting growth of 8.9% (or $24.3 million) from the year-ago quarter. Of the total improvement, acquisitions contributed roughly $23.5 million while the rest was influenced by organic sales growth and negative impacts of divestitures.
On a geographical basis, revenues from the United States totaled $213.6 million. It contributed approximately 71.8% of net revenues. Operations from Europe generated revenues of $74 million, accounting for 24.9% of net revenues. Revenues from Rest of World totaled $9.8 million, representing 3.3% of net revenues.
Margins Weak on Higher Costs and Expenses
In the quarter under review, Shiloh Industries’ cost of sales increased 11% year over year to $265.8 million. It represented 89.4% of net revenues compared with 87.7% in the year-ago quarter. Gross margin declined 170 basis points (bps) year over year to 10.6%. Selling, general and administrative expenses increased 2.2% year over year to $22.1 million, representing 7.4% of net revenues.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) were $20.3 million, down 17.2% year over year. Adjusted EBITDA margin was 6.8% versus 9% in the second quarter of fiscal 2017.
Balance Sheet and Cash Flow
Exiting the fiscal second quarter, Shiloh Industries’ cash and cash equivalents were $17.6 million, up 59.1% from $11.1 million at the previous quarter end. The company’s long-term debt grew 40.1% sequentially to $255.6 million. The company received $128 million from long-term borrowings while repaid roughly $55 million.
In the first half of fiscal 2018, the company’s net cash flow from operating activities totaled $20.1 million, down 40.8% from the previous year’s comparable period. Capital expenditure surged 32.2% year over year to $23.8 million.
Outlook
In the quarters ahead, Shiloh Industries anticipates gaining from new business wins as well as efforts to capitalize from rise in demand for SUVs and trucks. Also, synergistic gains from acquired businesses — including Brabant Alucast Netherlands and Brabant Alucast Italy in March 2018 — as well as benefits from a new engineering lab in Michigan, facility manufacturing aluminum products in China and Tennessee-based magnesium die casting business will be advantageous.
For fiscal 2018 (ending October 2018), the company reaffirmed its adjusted EBITDA guidance of $73-$76 million. Adjusted EBITDA margin is anticipated to be 7-7.2%. Capital expenditure is predicted to be roughly 4-5% of revenues.
Shiloh Industries, Inc. Price
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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