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Shiloh Industries Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 26, 2011 05:27PM

Shiloh Industries Inc. (SHLO) filed Quarterly Report for the period ended 2011-07-31. Shiloh Industries Inc. has a market cap of $177.4 million; its shares were traded at around $9.83 with a P/E ratio of 21.2 and P/S ratio of 0.4.



Highlight of Business Operations:

GROSS PROFIT. Gross profit for the third quarter of fiscal 2011 was $9,249 compared to gross profit of $8,829 in the third quarter of fiscal 2010, an increase of $420. Gross profit as a percentage of sales was 7.2% in the third quarter of fiscal 2011 and 7.7% in the third quarter of fiscal 2010. Gross profit in the third quarter of fiscal 2011 was favorably impacted by approximately $2,790 from the increased sales volume. Gross profit margin was unfavorably affected by a change in sales mix to increased sales with steel ownership and increasing material costs net of revenue realized from the sales of engineered scrap during the third quarter of fiscal 2011 compared to the third quarter of 2010 resulting in a net material increase of approximately $1,070. In addition, manufacturing expenses increased by approximately $1,300 in the third quarter of fiscal 2011 compared to the third quarter of fiscal 2010. Personnel and personnel related expenses, including the restoration of certain benefits, like the 401k Company match, were responsible for the growth in these expenses by approximately $1,640 as the Company s workforce was increased in anticipation of improved production volumes, planning for future launches, and planning for further increases in North American vehicle production volumes. Expenses for repairs and maintenance and manufacturing supplies increased by approximately $670. These increases were offset by a reduction in depreciation and utilities of approximately $1,010.

GROSS PROFIT. Gross profit for the first nine months of fiscal 2011 was $27,191 compared to $24,915 in the first nine months of fiscal 2010, an increase of $2,276. Gross profit as a percentage of sales was 7.3% in the first nine months of fiscal 2011 compared to 7.5% for the same period a year ago. For the first nine months of fiscal 2011, gross profit increased by approximately $9,960 from the increased sales volume compared to the prior year first nine month period. Gross profit margin was unfavorably affected by a change in sales mix to increased sales with steel ownership and increasing material costs partially offset by an improvement in revenue realized from the sales of engineered scrap during the first nine months of 2011 compared to the first nine months of 2010 by approximately $2,520. In addition, manufacturing expenses increased by approximately $5,160 in the first nine months of 2011 compared to the first nine months of 2010. Personnel and personnel related expenses increased by approximately $5,890 as a result of an increase in the Company s workforce related to the improved production volumes, planning for future launches, planning for further increases in North American vehicle production volumes, and the restoration of certain benefits. Repairs and maintenance and manufacturing supplies increased approximately $2,760. These increases were partially offset by a reduction in depreciation and utility costs of approximately $3,490.

OTHER. For the first nine months of fiscal 2011, interest expense was $1,271, a decrease of $1,853 from interest expense of $3,124 in the first nine months of fiscal 2010. The reduction in interest expense compared to the prior year nine-month period is the result of a reduced level of average borrowed funds and the impact of the Fifth Amendment to the Credit Agreement and the amended and restated Credit and Security Agreement, which both lowered the weighted average interest rate during the first nine months of fiscal 2011 compared to the prior year nine-month period. Borrowed funds averaged $29,158 during the first nine months of fiscal 2011 and the weighted average interest rate was 3.01%. For the first nine months of fiscal 2010, borrowed funds averaged $43,550 while the weighted average interest rate was 6.95%.

Other income, net was $108 for the first nine months of fiscal 2011 compared to other expense, net of $43 for the first nine months of fiscal 2010. Other income in fiscal 2011 consisted of $131 generated from the sale of stock received in the second quarter in connection with the settlement of a customer bankruptcy and netted against an expense of $23 for currency transaction losses realized by the Company s Mexican subsidiary. The $43 expense in fiscal 2010 is the result of currency transaction losses realized by the Company's Mexican subsidiary.

At July 31, 2011, total debt was $31,280 and total equity was $107,071, resulting in a capitalization rate of 22.6% debt, 77.4% equity. Current assets were $115,863 and current liabilities were $80,392 resulting in positive working capital of $35,471.

Working capital changes since October 31, 2010 were a use of funds of $17,308. During the first nine months of fiscal 2011, accounts receivable have decreased by $4,889 and inventory increased by $20,209 since the end of fiscal 2010. Considering the increase in overdraft balances of $6,217, accounts payable, net have increased $5,448.

Read the The complete Report



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