Shiloh Q3 Earnings Rise Y/Y, Finnveden Acquisition Closed - Analyst Blog

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Shiloh Industries Inc. ( SHLO ) reported solid year-over-year results for third-quarter fiscal 2014 (ended Jul 31, 2014). Net income soared 58% year over year to $8.3 million. Earnings came in at 49 cents per share, up compared with 31 cents earned in the year-ago quarter.  

Revenues

Shiloh Industries generated net revenues of $216.4 million, increasing 30.3% over the year-ago comparable quarter. Top-line growth was driven by new product offerings, market share gains and acquisitions.

Margins

Cost of sales grew 29.8% year over year while representing 89.8% of net revenues, down 30 basis points (bps) year over year. Gross margin was 10.2% compared with 9.9% in the year-ago quarter. Selling, general and administrative expenses were 5.7% of net revenue versus 5% recorded in the year-ago quarter.

Operating income was $9.7 million, up 18.8% year over year, while operating margin was recorded at 4.5% versus 4.9% in the year-ago quarter. Interest expenses surged nearly 77.5% year-over-year, reflecting increased financial obligations of the company due to higher debt levels.

Balance Sheet and Cash Flow

Exiting third-quarter fiscal 2014, Shiloh Industries had cash and cash equivalents of $11.1 million, down significantly from $579 million in the previous quarter. Long-term debt increased 73.5% sequentially to $205.8 million.

In nine months ended Jul 2014, Shiloh Industries generated cash of $16.2 million from its operating activities, down compared with $29.4 million in the year-ago comparable period. Capital expenditure incurred was $24 million, up 29.3% year over year.

Acquisition

During the quarter, Shiloh Industries completed the acquisition of Finnveden Metal Structures (FMS) from FinnvedenBulten AB for approximately $56.6 million. The transaction added FinnvedenBulten's stamping business and magnesium die casting technology, along with 800 employees and a revenue generation capacity of $180 million, to the company's portfolio.

Shiloh Industries currently has a $314.7 million market capitalization. Some stocks worth considering in the steel industry include Grupo Simec S.A.B. de C.V. ( SIM ), TimkenSteel Corporation ( TMST ) and United States Steel Corp. ( X ). All these stocks sport a Zacks Rank #1 (Strong Buy).


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: FMS , X , SIM , TMST , SHLO

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