x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
51-0347683
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
Large accelerated filer
|
¨
|
Accelerated filer
|
x
|
Non-accelerated filer
|
¨
|
Smaller Reporting Company
|
¨
|
|
|
|
Page
|
|
|||
|
Item 1. Condensed Consolidated Financial Statements (Unaudited)
|
|
|
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
Forward-Looking Statements
|
|
|
|
|||
|
|||
|
Item 4.
Controls and Procedures
|
||
|
|||
|
Item 1. Legal Proceedings
|
||
|
Item 1A. Risk Factors
|
||
|
Item 6.
Exhibits
|
Item 1.
|
Condensed Consolidated Financial Statements
|
|
April 30,
2016 |
|
October 31,
2015 |
||||
|
|
||||||
ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
4,860
|
|
|
$
|
13,100
|
|
Investment in marketable securities
|
182
|
|
|
356
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $709 and $821 at April 30, 2016 and October 31, 2015, respectively
|
183,500
|
|
|
194,373
|
|
||
Related-party accounts receivable
|
1,978
|
|
|
1,092
|
|
||
Prepaid income taxes
|
1,981
|
|
|
3,799
|
|
||
Inventories, net
|
60,908
|
|
|
58,179
|
|
||
Deferred income taxes
|
2,483
|
|
|
2,837
|
|
||
Prepaid expenses and other assets
|
37,285
|
|
|
48,267
|
|
||
Total current assets
|
293,177
|
|
|
322,003
|
|
||
Property, plant and equipment, net
|
269,242
|
|
|
280,260
|
|
||
Goodwill
|
28,923
|
|
|
28,843
|
|
||
Intangible assets, net
|
18,418
|
|
|
19,543
|
|
||
Deferred income taxes
|
4,858
|
|
|
4,431
|
|
||
Other assets
|
17,400
|
|
|
11,509
|
|
||
Total assets
|
$
|
632,018
|
|
|
$
|
666,589
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current debt
|
$
|
1,497
|
|
|
$
|
2,080
|
|
Accounts payable
|
158,516
|
|
|
160,405
|
|
||
Accrued income taxes
|
103
|
|
|
—
|
|
||
Other accrued expenses
|
35,881
|
|
|
34,459
|
|
||
Total current liabilities
|
195,997
|
|
|
196,944
|
|
||
Long-term debt
|
266,276
|
|
|
298,873
|
|
||
Long-term benefit liabilities
|
15,777
|
|
|
17,376
|
|
||
Deferred income taxes
|
6,153
|
|
|
6,180
|
|
||
Interest rate swap agreement
|
5,726
|
|
|
4,989
|
|
||
Other liabilities
|
896
|
|
|
1,312
|
|
||
Total liabilities
|
490,825
|
|
|
525,674
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $.01 per share; 5,000,000 shares authorized; no shares issued and outstanding at April 30, 2016 and October 31, 2015, respectively
|
—
|
|
|
—
|
|
||
Common stock, par value $.01 per share; 50,000,000 and 25,000,000 shares authorized at April 30, 2016 and October 31, 2015, respectively; 17,615,374 and 17,309,623 shares issued and outstanding at April 30, 2016 and October 31, 2015, respectively
|
176
|
|
|
173
|
|
||
Paid-in capital
|
69,769
|
|
|
69,334
|
|
||
Retained earnings
|
119,455
|
|
|
121,457
|
|
||
Accumulated other comprehensive loss, net
|
(48,207
|
)
|
|
(50,049
|
)
|
||
Total stockholders’ equity
|
141,193
|
|
|
140,915
|
|
||
Total liabilities and stockholders’ equity
|
$
|
632,018
|
|
|
$
|
666,589
|
|
|
Three Months Ended April 30,
|
|
Six Months Ended April 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net revenues
|
$
|
284,264
|
|
|
$
|
272,300
|
|
|
$
|
535,319
|
|
|
$
|
518,165
|
|
Cost of sales
|
259,039
|
|
|
244,345
|
|
|
494,113
|
|
|
471,533
|
|
||||
Gross profit
|
25,225
|
|
|
27,955
|
|
|
41,206
|
|
|
46,632
|
|
||||
Selling, general and administrative expenses
|
16,992
|
|
|
16,869
|
|
|
34,576
|
|
|
30,484
|
|
||||
Amortization of intangible assets
|
565
|
|
|
677
|
|
|
1,129
|
|
|
1,309
|
|
||||
Operating income
|
7,668
|
|
|
10,409
|
|
|
5,501
|
|
|
14,839
|
|
||||
Interest expense
|
4,520
|
|
|
2,067
|
|
|
8,872
|
|
|
3,829
|
|
||||
Interest income
|
(4
|
)
|
|
(7
|
)
|
|
(6
|
)
|
|
(14
|
)
|
||||
Other (income) expense
|
83
|
|
|
(669
|
)
|
|
479
|
|
|
(1,064
|
)
|
||||
Income (loss) before income taxes
|
3,069
|
|
|
9,018
|
|
|
(3,844
|
)
|
|
12,088
|
|
||||
Provision (benefit) for income taxes
|
12
|
|
|
2,665
|
|
|
(1,842
|
)
|
|
3,292
|
|
||||
Net income (loss)
|
$
|
3,057
|
|
|
$
|
6,353
|
|
|
$
|
(2,002
|
)
|
|
$
|
8,796
|
|
Earnings (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic earnings (loss) per share
|
$
|
0.17
|
|
|
$
|
0.37
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.51
|
|
Basic weighted average number of common shares
|
17,615
|
|
|
17,211
|
|
|
17,615
|
|
|
17,217
|
|
||||
Diluted earnings (loss) per share
|
$
|
0.17
|
|
|
$
|
0.37
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.51
|
|
Diluted weighted average number of common shares
|
17,620
|
|
|
17,236
|
|
|
17,615
|
|
|
17,248
|
|
|
|
|
|
Three Months Ended April 30,
|
|
Six Months Ended April 30,
|
||||||||||||
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income (loss)
|
$
|
3,057
|
|
|
$
|
6,353
|
|
|
$
|
(2,002
|
)
|
|
$
|
8,796
|
|
|||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|||||||||||
|
Defined benefit pension plans & other postretirement benefits
|
|
|
|
|
|
|
|
||||||||||
|
|
|
Amortization of net actuarial loss
|
310
|
|
|
297
|
|
|
620
|
|
|
593
|
|
||||
|
|
|
Actuarial net gain (loss)
|
—
|
|
|
5,473
|
|
|
—
|
|
|
(683
|
)
|
||||
|
|
|
Asset net gain
|
—
|
|
|
1,237
|
|
|
—
|
|
|
391
|
|
||||
|
|
|
Income tax provision
|
(112
|
)
|
|
(2,651
|
)
|
|
(224
|
)
|
|
(114
|
)
|
||||
|
|
Total defined benefit pension plans & other post retirement benefits, net of tax
|
198
|
|
|
4,356
|
|
|
396
|
|
|
187
|
|
|||||
|
Marketable securities
|
|
|
|
|
|
|
|
||||||||||
|
|
|
Unrealized gain (loss) on marketable securities
|
31
|
|
|
(43
|
)
|
|
(175
|
)
|
|
(294
|
)
|
||||
|
|
|
Income tax benefit (provision)
|
(10
|
)
|
|
15
|
|
|
55
|
|
|
103
|
|
||||
|
|
Total marketable securities, net of tax
|
21
|
|
|
(28
|
)
|
|
(120
|
)
|
|
(191
|
)
|
|||||
|
Derivatives and hedging
|
|
|
|
|
|
|
|
||||||||||
|
|
|
Unrealized gain (loss) on interest rate swap agreements
|
(299
|
)
|
|
622
|
|
|
(1,404
|
)
|
|
(1,798
|
)
|
||||
|
|
|
Income tax benefit (provision)
|
(23
|
)
|
|
(235
|
)
|
|
268
|
|
|
680
|
|
||||
|
|
|
Reclassification adjustments for settlement of derivatives included in net income
|
332
|
|
|
—
|
|
|
666
|
|
|
—
|
|
||||
|
|
Change in fair value of derivative instruments, net of tax
|
10
|
|
|
387
|
|
|
(470
|
)
|
|
(1,118
|
)
|
|||||
|
Foreign currency translation adjustments:
|
|
|
|
|
|
|
|
||||||||||
|
|
|
Foreign currency translation gain (loss)
|
3,178
|
|
|
(158
|
)
|
|
1,887
|
|
|
(7,585
|
)
|
||||
|
|
|
Reclassification adjustments for settlement of foreign currency included in net income
|
149
|
|
|
—
|
|
|
149
|
|
|
—
|
|
||||
|
|
Unrealized gain (loss) on foreign currency translation, net of tax
|
3,327
|
|
|
(158
|
)
|
|
2,036
|
|
|
(7,585
|
)
|
|||||
Comprehensive income (loss), net
|
$
|
6,613
|
|
|
$
|
10,910
|
|
|
$
|
(160
|
)
|
|
$
|
89
|
|
|
Six Months Ended April 30,
|
||||||
|
2016
|
|
2015
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income (loss)
|
$
|
(2,002
|
)
|
|
$
|
8,796
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
18,873
|
|
|
16,984
|
|
||
Asset impairment, net
|
273
|
|
|
—
|
|
||
Amortization of deferred financing costs
|
1,244
|
|
|
298
|
|
||
Deferred income taxes
|
(2
|
)
|
|
684
|
|
||
Stock-based compensation expense
|
451
|
|
|
542
|
|
||
Gain on sale of assets
|
(26
|
)
|
|
(17
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
11,909
|
|
|
(12,929
|
)
|
||
Inventories
|
(2,172
|
)
|
|
158
|
|
||
Prepaids and other assets
|
6,663
|
|
|
(2,658
|
)
|
||
Payables and other liabilities
|
(5,608
|
)
|
|
(9,074
|
)
|
||
Accrued income taxes
|
1,934
|
|
|
774
|
|
||
Net cash provided by operating activities
|
31,537
|
|
|
3,558
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Capital expenditures
|
(8,818
|
)
|
|
(21,785
|
)
|
||
Proceeds from sale of assets
|
1,166
|
|
|
123
|
|
||
Net cash used for investing activities
|
(7,652
|
)
|
|
(21,662
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Payment of capital leases
|
(403
|
)
|
|
(435
|
)
|
||
Proceeds from long-term borrowings
|
63,300
|
|
|
62,500
|
|
||
Repayments of long-term borrowings
|
(95,649
|
)
|
|
(44,143
|
)
|
||
Payment of deferred financing costs
|
(308
|
)
|
|
(1,256
|
)
|
||
Proceeds from exercise of stock options
|
—
|
|
|
155
|
|
||
Net cash provided by (used for) financing activities
|
(33,060
|
)
|
|
16,821
|
|
||
Effect of foreign currency exchange rate fluctuations on cash
|
935
|
|
|
(796
|
)
|
||
Net decrease in cash and cash equivalents
|
(8,240
|
)
|
|
(2,079
|
)
|
||
Cash and cash equivalents at beginning of period
|
13,100
|
|
|
12,014
|
|
||
Cash and cash equivalents at end of period
|
$
|
4,860
|
|
|
$
|
9,935
|
|
|
|
|
|
||||
Supplemental Cash Flow Information:
|
|
|
|
||||
Cash paid for interest
|
$
|
7,641
|
|
|
$
|
3,734
|
|
Cash paid for (refund of) income taxes
|
$
|
(3,203
|
)
|
|
$
|
2,176
|
|
|
|
|
|
||||
Non-cash Activities:
|
|
|
|
||||
Capital equipment included in accounts payable
|
$
|
3,823
|
|
|
$
|
3,703
|
|
|
April 30, 2016
|
|
October 31, 2015
|
||||
Raw materials
|
$
|
25,756
|
|
|
$
|
31,864
|
|
Work-in-process
|
15,819
|
|
|
10,994
|
|
||
Finished goods
|
19,333
|
|
|
15,321
|
|
||
Total inventory
|
$
|
60,908
|
|
|
$
|
58,179
|
|
|
|
|
April 30, 2016
|
|
October 31, 2015
|
||||
Tooling (1)
|
|
$
|
28,274
|
|
|
$
|
40,658
|
|
|
Prepaid other
|
|
8,900
|
|
|
7,609
|
|
|||
Other current assets
|
|
111
|
|
|
—
|
|
|||
|
Total
|
|
$
|
37,285
|
|
|
$
|
48,267
|
|
|
April 30,
2016 |
|
October 31,
2015 |
||||
Land and improvements
|
$
|
11,344
|
|
|
$
|
11,330
|
|
Buildings and improvements
|
117,254
|
|
|
118,166
|
|
||
Machinery and equipment
|
488,997
|
|
|
488,047
|
|
||
Furniture and fixtures
|
18,430
|
|
|
13,901
|
|
||
Construction in progress
|
41,759
|
|
|
51,253
|
|
||
Total, at cost
|
677,784
|
|
|
682,697
|
|
||
Less: Accumulated depreciation
|
408,542
|
|
|
402,437
|
|
||
Property, plant and equipment, net
|
$
|
269,242
|
|
|
$
|
280,260
|
|
|
April 30,
2016 |
|
October 31,
2015 |
||||
Leased Property:
|
|
|
|
||||
Machinery and equipment
|
$
|
7,295
|
|
|
$
|
7,019
|
|
Less: Accumulated depreciation
|
1,466
|
|
|
1,142
|
|
||
Leased property, net
|
$
|
5,829
|
|
|
$
|
5,877
|
|
Twelve Months Ending April 30,
|
|
||
2017
|
$
|
887
|
|
2018
|
903
|
|
|
2019
|
854
|
|
|
2020
|
453
|
|
|
2021
|
2,126
|
|
|
|
5,223
|
|
|
Plus amount representing interest ranging from 3.05% to 3.77%
|
626
|
|
|
Future minimum rental payments
|
$
|
5,849
|
|
Balance October 31, 2015
|
|
$
|
28,843
|
|
|
|
Foreign currency translation and other
|
|
80
|
|
|
Balance April 30, 2016
|
|
$
|
28,923
|
|
|
|
Customer Relationships
|
|
Developed Technology
|
|
Non-Compete
|
|
Trade Name
|
|
Trademark
|
|
Total
|
||||||||||||
Balance October 31, 2015
|
$
|
14,311
|
|
|
$
|
3,540
|
|
|
$
|
63
|
|
|
$
|
1,500
|
|
|
$
|
129
|
|
|
$
|
19,543
|
|
|
|
Amortization expense
|
(665
|
)
|
|
(386
|
)
|
|
(8
|
)
|
|
(62
|
)
|
|
(8
|
)
|
|
(1,129
|
)
|
||||||
|
Foreign currency translation and other
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||||
Balance April 30, 2016
|
$
|
13,650
|
|
|
$
|
3,154
|
|
|
$
|
55
|
|
|
$
|
1,438
|
|
|
$
|
121
|
|
|
$
|
18,418
|
|
|
|
Weighted Average Useful Life (years)
|
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Foreign Currency Adjustment
|
|
Net
|
||||||||
|
Customer relationships
|
13.2
|
|
$
|
17,598
|
|
|
$
|
(3,924
|
)
|
|
$
|
(24
|
)
|
|
$
|
13,650
|
|
|
Developed technology
|
7.3
|
|
5,007
|
|
|
(1,853
|
)
|
|
—
|
|
|
3,154
|
|
||||
|
Non-compete
|
2.3
|
|
824
|
|
|
(769
|
)
|
|
—
|
|
|
55
|
|
||||
|
Trade Name
|
14.8
|
|
1,875
|
|
|
(437
|
)
|
|
—
|
|
|
1,438
|
|
||||
|
Trademark
|
10.0
|
|
166
|
|
|
(45
|
)
|
|
—
|
|
|
121
|
|
||||
|
|
|
|
$
|
25,470
|
|
|
$
|
(7,028
|
)
|
|
$
|
(24
|
)
|
|
$
|
18,418
|
|
|
April 30,
2016 |
|
October 31, 2015
|
||||
Credit Agreement—interest rate of 5.11% at April 30, 2016 and 4.44% at October 31, 2015
|
$
|
261,200
|
|
|
$
|
293,300
|
|
Equipment security note
|
1,246
|
|
|
1,496
|
|
||
Capital lease obligations
|
5,223
|
|
|
5,434
|
|
||
Insurance broker financing agreement
|
104
|
|
|
723
|
|
||
Total debt
|
267,773
|
|
|
300,953
|
|
||
Less: Current debt
|
1,497
|
|
|
2,080
|
|
||
Total long-term debt
|
$
|
266,276
|
|
|
$
|
298,873
|
|
Twelve Months Ending April 30,
|
|
Credit Agreement
|
|
Equipment Security Note
|
|
Capital Lease Obligations
|
|
Other Debt
|
|
Total
|
||||||||||
2017
|
|
$
|
—
|
|
|
$
|
506
|
|
|
$
|
887
|
|
|
$
|
104
|
|
|
$
|
1,497
|
|
2018
|
|
—
|
|
|
521
|
|
|
903
|
|
|
—
|
|
|
1,424
|
|
|||||
2019
|
|
—
|
|
|
219
|
|
|
854
|
|
|
—
|
|
|
1,073
|
|
|||||
2020
|
|
261,200
|
|
|
—
|
|
|
453
|
|
|
—
|
|
|
261,653
|
|
|||||
2021
|
|
—
|
|
|
—
|
|
|
2,126
|
|
|
—
|
|
|
2,126
|
|
|||||
Total
|
|
$
|
261,200
|
|
|
$
|
1,246
|
|
|
$
|
5,223
|
|
|
$
|
104
|
|
|
$
|
267,773
|
|
|
Pension Benefits
|
|
Other Post-Retirement
Benefits
|
||||||||||||
|
Three Months Ended April 30,
|
|
Three Months Ended April 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Interest cost
|
$
|
892
|
|
|
$
|
866
|
|
|
$
|
4
|
|
|
$
|
6
|
|
Expected return on plan assets
|
(1,142
|
)
|
|
(1,174
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of net actuarial loss
|
310
|
|
|
297
|
|
|
3
|
|
|
7
|
|
||||
Net periodic (benefit) cost
|
$
|
60
|
|
|
$
|
(11
|
)
|
|
$
|
7
|
|
|
$
|
13
|
|
|
Pension Benefits
|
|
Other Post-Retirement
Benefits
|
||||||||||||
|
Six Months Ended April 30,
|
|
Six Months Ended April 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Interest cost
|
$
|
1,783
|
|
|
$
|
1,733
|
|
|
$
|
8
|
|
|
$
|
12
|
|
Expected return on plan assets
|
(2,284
|
)
|
|
(2,349
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of net actuarial loss
|
620
|
|
|
593
|
|
|
6
|
|
|
14
|
|
||||
Net periodic (benefit) cost
|
$
|
119
|
|
|
$
|
(23
|
)
|
|
$
|
14
|
|
|
$
|
26
|
|
|
Granted
|
|
20 Day EMA
|
|
Restricted Stock
|
276,856
|
|
|
$4.17
|
Restricted Stock Units
|
21,539
|
|
|
$4.17
|
|
|
Stock Options
|
|
Restricted Stock
|
|
Restricted Stock Units
|
||||||||||||||||
Outstanding at:
|
|
Options
|
|
Weighted Average Exercise Price
|
|
Weighted Average Remaining Contractual Life
|
|
Restricted Shares
|
|
20 Day EMA (1)
|
|
Weighted Average Remaining Contractual Life
|
|
Restricted Share Units
|
|
20 Day EMA (1)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
November 1, 2014
|
|
123,333
|
|
|
$9.69
|
|
5.15
|
|
116,882
|
|
|
$16.81
|
|
2.58
|
|
—
|
|
|
—
|
|
||
Granted
|
|
—
|
|
|
—
|
|
|
|
|
22,504
|
|
|
$14.22
|
|
|
|
—
|
|
|
—
|
|
|
Options exercised or restricted stock vested
|
|
(18,650
|
)
|
|
$8.30
|
|
|
|
(25,000
|
)
|
|
$18.87
|
|
|
|
—
|
|
|
—
|
|
||
Forfeited or expired
|
|
(11,350
|
)
|
|
$11.58
|
|
|
|
(6,750
|
)
|
|
$20.64
|
|
|
|
—
|
|
|
—
|
|
||
April 30, 2015
|
|
93,333
|
|
|
$9.74
|
|
4.51
|
|
107,636
|
|
|
$15.55
|
|
1.68
|
|
—
|
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
November 1, 2015
|
|
90,666
|
|
|
$9.70
|
|
4.10
|
|
124,255
|
|
|
$13.77
|
|
2.28
|
|
—
|
|
|
—
|
|
||
Granted
|
|
—
|
|
|
—
|
|
|
|
|
309,251
|
|
|
$4.28
|
|
|
|
21,539
|
|
|
$4.17
|
||
Options exercised or restricted stock vested
|
|
—
|
|
|
—
|
|
|
|
|
(21,458
|
)
|
|
$16.64
|
|
|
|
—
|
|
|
—
|
|
|
Forfeited or expired
|
|
(1,000
|
)
|
|
$12.04
|
|
|
|
(1,500
|
)
|
|
$10.13
|
|
|
|
—
|
|
|
—
|
|
||
April 30, 2016
|
|
89,666
|
|
|
$9.67
|
|
3.59
|
|
410,548
|
|
|
$6.48
|
|
2.25
|
|
21,539
|
|
|
$4.17
|
|
|
Three Months Ended April 30,
|
|
Six Months Ended April 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Stock options
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15
|
|
Restricted stock
|
|
253
|
|
|
344
|
|
|
442
|
|
|
527
|
|
||||
Restricted stock units
|
|
9
|
|
|
—
|
|
|
9
|
|
|
—
|
|
||||
Total
|
|
$
|
262
|
|
|
$
|
344
|
|
|
$
|
451
|
|
|
$
|
542
|
|
(Shares in thousands)
|
Three Months Ended April 30,
|
|
Six Months Ended April 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income (loss) available to common stockholders
|
$
|
3,057
|
|
|
$
|
6,353
|
|
|
$
|
(2,002
|
)
|
|
$
|
8,796
|
|
Basic weighted average shares
|
17,615
|
|
|
17,211
|
|
|
17,615
|
|
|
17,217
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Stock options
|
5
|
|
|
25
|
|
|
—
|
|
|
31
|
|
||||
Diluted weighted average shares
|
17,620
|
|
|
17,236
|
|
|
17,615
|
|
|
17,248
|
|
||||
Basic income (loss) per share
|
$
|
0.17
|
|
|
$
|
0.37
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.51
|
|
Diluted income (loss) per share
|
$
|
0.17
|
|
|
$
|
0.37
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.51
|
|
|
|
Asset (Liability)
|
|
Level 2
|
|
Valuation Technique
|
||||
October 31, 2015:
|
|
|
|
|
|
|
||||
Interest Rate Swap Contracts
|
|
$
|
(4,989
|
)
|
|
$
|
(4,989
|
)
|
|
Income Approach
|
Marketable Securities
|
|
356
|
|
|
356
|
|
|
Income Approach
|
||
April 30, 2016:
|
|
|
|
|
|
|
||||
Interest Rate Swap Contracts
|
|
(5,726
|
)
|
|
(5,726
|
)
|
|
Income Approach
|
||
Marketable Securities
|
|
$
|
182
|
|
|
$
|
182
|
|
|
Income Approach
|
|
|
|
Pension and Post Retirement Plan Liability
|
|
Marketable Securities Adjustment
|
|
Interest Rate Swap Adjustment (1)
|
|
Foreign Currency Translation Adjustment (2)
|
|
Accumulated Other Comprehensive Loss
|
||||||||||
Balance at January 31, 2016
|
|
$
|
(28,611
|
)
|
|
$
|
(481
|
)
|
|
$
|
(3,656
|
)
|
|
$
|
(19,015
|
)
|
|
$
|
(51,763
|
)
|
|
|
Other comprehensive income (loss)
|
|
198
|
|
|
20
|
|
|
(322
|
)
|
|
3,179
|
|
|
3,075
|
|
|||||
|
Amounts reclassified from accumulated other comprehensive loss
|
|
—
|
|
|
—
|
|
|
332
|
|
|
149
|
|
|
481
|
|
|||||
|
Net current-period other comprehensive income
|
|
198
|
|
|
20
|
|
|
10
|
|
|
3,328
|
|
|
3,556
|
|
|||||
Balance at April 30, 2016
|
|
$
|
(28,413
|
)
|
|
$
|
(461
|
)
|
|
$
|
(3,646
|
)
|
|
$
|
(15,687
|
)
|
|
$
|
(48,207
|
)
|
|
|
|
Pension and Post Retirement Plan Liability
|
|
Marketable Securities Adjustment
|
|
Interest Rate Swap Adjustment (1)
|
|
Foreign Currency Translation Adjustment (2)
|
|
Accumulated Other Comprehensive Loss
|
||||||||||
Balance at October 31, 2015
|
|
$
|
(28,809
|
)
|
|
$
|
(341
|
)
|
|
$
|
(3,176
|
)
|
|
$
|
(17,723
|
)
|
|
$
|
(50,049
|
)
|
|
|
Other comprehensive income (loss)
|
|
396
|
|
|
(120
|
)
|
|
(1,136
|
)
|
|
1,887
|
|
|
1,027
|
|
|||||
|
Amounts reclassified from accumulated other comprehensive loss
|
|
—
|
|
|
—
|
|
|
666
|
|
|
149
|
|
|
815
|
|
|||||
|
Net current-period other comprehensive income (loss)
|
|
396
|
|
|
(120
|
)
|
|
(470
|
)
|
|
2,036
|
|
|
1,842
|
|
|||||
Balance at April 30, 2016
|
|
$
|
(28,413
|
)
|
|
$
|
(461
|
)
|
|
$
|
(3,646
|
)
|
|
$
|
(15,687
|
)
|
|
$
|
(48,207
|
)
|
|
|
Three Months Ended April 30,
|
|
Six Months Ended April 30,
|
||||||||||||
|
|
Revenues
|
|
Revenues
|
||||||||||||
Geographic Region:
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Europe
|
|
$
|
41,545
|
|
|
$
|
35,062
|
|
|
$
|
74,537
|
|
|
$
|
65,804
|
|
Mexico
|
|
$
|
6,950
|
|
|
$
|
10,618
|
|
|
$
|
16,744
|
|
|
$
|
20,072
|
|
United States
|
|
$
|
235,769
|
|
|
$
|
226,620
|
|
|
$
|
444,038
|
|
|
$
|
432,289
|
|
Total Company
|
|
$
|
284,264
|
|
|
$
|
272,300
|
|
|
$
|
535,319
|
|
|
$
|
518,165
|
|
|
|
Three Months Ended April 30,
|
|
Six Months Ended April 30,
|
||||||||||||
|
|
Foreign Currency (Gain) Loss
|
|
Foreign Currency (Gain) Loss
|
||||||||||||
Geographic Region:
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Europe
|
|
$
|
(780
|
)
|
|
$
|
(560
|
)
|
|
$
|
(82
|
)
|
|
$
|
(828
|
)
|
Mexico
|
|
$
|
31
|
|
|
$
|
9
|
|
|
$
|
55
|
|
|
$
|
(47
|
)
|
|
Long-Lived Assets
|
||||||
Geographic Region:
|
April 30, 2016
|
|
October 31, 2015
|
||||
Europe
|
$
|
46,783
|
|
|
$
|
43,247
|
|
Mexico
|
$
|
20,482
|
|
|
$
|
20,501
|
|
United States
|
$
|
265,573
|
|
|
$
|
276,407
|
|
Total Company
|
$
|
332,838
|
|
|
$
|
340,155
|
|
•
|
The impact on historical financial statements of any known or unknown accounting errors or irregularities; and the magnitude of any adjustments in restated financial statements of the Company’s operating results.
|
•
|
The Company's ability to accomplish its strategic objectives.
|
•
|
The Company's ability to obtain future sales.
|
•
|
Changes in worldwide economic and political conditions, including adverse effects from terrorism or related hostilities.
|
•
|
Costs related to legal and administrative matters.
|
•
|
The Company's ability to realize cost savings expected to offset price concessions.
|
•
|
The Company's ability to successfully integrate acquired businesses
,
including businesses located outside of the United States. Risks associated with doing business internationally, including economic, political and social instability, foreign currency exposure and the lack of acceptance of its products.
|
•
|
Inefficiencies related to production and product launches that are greater than anticipated; changes in technology and technological risks.
|
•
|
Work stoppages and strikes at the Company's facilities and that of the Company's customers or suppliers.
|
•
|
The Company's dependence on the automotive and heavy truck industries, which are highly cyclical.
|
•
|
The dependence of the automotive industry on consumer spending, which is subject to the impact of domestic and international economic conditions affecting car and light truck production.
|
•
|
Regulations and policies regarding international trade.
|
•
|
Financial and business downturns of the Company's customers or vendors, including any production cutbacks or bankruptcies. Increases in the price of, or limitations on the availability of, steel, aluminum or magnesium, the Company's primary raw materials, or decreases in the price of scrap steel.
|
•
|
The successful launch and consumer acceptance of new vehicles for which the Company supplies parts.
|
•
|
The occurrence of any event or condition that may be deemed a material adverse effect under the Company’s outstanding indebtedness or a decrease in customer demand which could cause a covenant default under the Company’s outstanding indebtedness.
|
•
|
Pension plan funding requirements.
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Production Volumes
|
Three Months Ended April 30,
|
|
Six Months Ended April 30,
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
|
(Number of Vehicles in Thousands)
|
|
(Number of Vehicles in Thousands)
|
||||||||
Europe
|
5,863
|
|
|
5,677
|
|
|
10,764
|
|
|
10,463
|
|
North America
|
4,684
|
|
|
4,447
|
|
|
8,744
|
|
|
8,380
|
|
Total
|
10,547
|
|
|
10,124
|
|
|
19,508
|
|
|
18,843
|
|
|
|
|
|
|
|
|
|
||||
Europe:
|
|
|
|
|
|
|
|
||||
Increase from prior year
|
186
|
|
|
|
|
301
|
|
|
|
||
% Increase from prior year
|
3.3
|
%
|
|
|
|
2.9
|
%
|
|
|
||
North America
|
|
|
|
|
|
|
|
||||
Increase from prior year
|
237
|
|
|
|
|
364
|
|
|
|
||
% Increase from prior year
|
5.3
|
%
|
|
|
|
4.3
|
%
|
|
|
||
Total
|
|
|
|
|
|
|
|
||||
Increase from prior year
|
423
|
|
|
|
|
665
|
|
|
|
||
% Increase from prior year
|
4.2
|
%
|
|
|
|
3.5
|
%
|
|
|
|
Six Months Ended April 30,
|
|
2016 vs. 2015
|
||||||||
|
2016
|
|
2015
|
|
change
|
||||||
Net cash provided by operating activities
|
$
|
31,537
|
|
|
$
|
3,558
|
|
|
$
|
27,979
|
|
Net cash used in investing activities
|
$
|
(7,652
|
)
|
|
$
|
(21,662
|
)
|
|
$
|
14,010
|
|
Net cash provided by (used in) financing activities
|
$
|
(33,060
|
)
|
|
$
|
16,821
|
|
|
$
|
(49,881
|
)
|
|
Six Months Ended April 30,
|
||||||
|
2016
|
|
2015
|
||||
Operational cash flow before changes in operating assets and liabilities
|
$
|
18,811
|
|
|
$
|
27,287
|
|
|
|
|
|
||||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
11,909
|
|
|
(12,929
|
)
|
||
Inventories
|
(2,172
|
)
|
|
158
|
|
||
Prepaids and other assets
|
6,663
|
|
|
(2,658
|
)
|
||
Payables and other liabilities
|
(5,608
|
)
|
|
(9,074
|
)
|
||
Accrued income taxes
|
1,934
|
|
|
774
|
|
||
Total change in operating assets and liabilities
|
$
|
12,726
|
|
|
$
|
(23,729
|
)
|
|
|
|
|
||||
Net cash provided by operating activities
|
$
|
31,537
|
|
|
$
|
3,558
|
|
•
|
Cash inflow from changes in operating assets and liabilities was
$12,726
for the
six months ended April 30,
2016
compared to a cash outflow of
$23,729
for the
six months ended April 30,
2015
.
|
•
|
Cash inflow from changes in accounts receivable for the
six months ended April 30,
2016
was
$11,909
compared to a cash outflow of
$12,929
for the
six months ended April 30,
2015
. The increase was primarily increased efforts in collecting receivables and customer reimbursed tooling as the Company’s product launches have significantly increased since 2015.
|
•
|
Cash outflow from changes in inventory for the
six months ended April 30,
2016
was
$2,172
compared to a cash inflow of
$158
for the
six months ended April 30,
2015
. The decrease was primarily driven by a change in customer mix and delivery.
|
•
|
Cash inflow from changes in prepaids and other assets for the
six months ended April 30,
2016
was
$6,663
compared to a cash outflow of
$2,658
for the
six months ended April 30,
2015
. The increase reflects the increase in customer reimbursable tooling due to the increase in product launches since 2015 and funding of preproduction supplies related to the Company's China operations.
|
•
|
Cash outflows from changes in payables and other liabilities for the
six months ended April 30,
2016
and
2015
was
$5,608
and
$9,074
, respectively. The changes were a result of managing working capital needs as well as reductions in tooling investments.
|
•
|
Cash inflows from changes in accrued income taxes of
$1,934
and
$774
for the
six months ended April 30,
2016
and
April 30, 2015
, respectively, due to a decrease in the federal tax receivable as a result of a decrease in pre-tax income.
|
April 30, 2016
|
|
Credit Agreement
|
|
Equipment Security Note
|
|
Capital Lease Obligations
|
|
Other Debt
|
|
Total
|
||||||||||
2017
|
|
$
|
—
|
|
|
$
|
506
|
|
|
$
|
887
|
|
|
$
|
104
|
|
|
$
|
1,497
|
|
2018
|
|
—
|
|
|
521
|
|
|
903
|
|
|
—
|
|
|
1,424
|
|
|||||
2019
|
|
—
|
|
|
219
|
|
|
854
|
|
|
—
|
|
|
1,073
|
|
|||||
2020
|
|
261,200
|
|
|
—
|
|
|
453
|
|
|
—
|
|
|
261,653
|
|
|||||
2021
|
|
—
|
|
|
—
|
|
|
2,126
|
|
|
—
|
|
|
2,126
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total
|
|
$
|
261,200
|
|
|
$
|
1,246
|
|
|
$
|
5,223
|
|
|
$
|
104
|
|
|
$
|
267,773
|
|
|
|
Liability Derivatives
|
||
|
|
Balance Sheet
|
April 30,
|
October 31,
|
|
|
Location
|
2016
|
2015
|
|
|
(Thousands of dollars)
|
||
Derivatives Designated as Cash Flow Hedging Instruments:
|
|
|
|
|
|
Interest rate swap contracts
|
Other liabilities
|
$(5,726)
|
$(4,989)
|
|
Amount of Loss Recognized in OCI on Derivatives (Effective Portion)
|
Location of Loss Reclassified from AOCI into Income (Effective Portion)
|
Amount of Loss Reclassified from AOCI into Income (Effective Portion)
|
||
|
|
(Thousands of dollars)
|
|||
Derivatives Designated as Hedging Instruments:
|
|
|
|
||
|
Interest rate swap contracts
|
$(470)
|
Interest expense
|
$666
|
|
Amount of Loss Recognized in OCI on Derivatives (Effective Portion)
|
Location of Loss Reclassified from AOCI into Income (Effective Portion)
|
Amount of Loss Reclassified from AOCI into Income (Effective Portion)
|
||
|
|
(Thousands of dollars)
|
|||
Derivatives Designated as Hedging Instruments:
|
|
|
|
||
|
Interest rate swap contracts
|
$(1,118)
|
Interest expense
|
$—
|
|
|
Three Months Ended April 30,
|
|
Six Months Ended April 30,
|
||||||||||||||||||||
|
|
Sales
|
Percentage of Sales
|
|
Sales
|
Percentage of Sales
|
|
Sales
|
Percentage of Sales
|
|
Sales
|
Percentage of Sales
|
||||||||||||
Currency:
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||||||
Swedish krona
|
|
$
|
25,664
|
|
9.0
|
%
|
|
$
|
21,686
|
|
8.0
|
%
|
|
$
|
46,079
|
|
8.6
|
%
|
|
$
|
41,593
|
|
8.0
|
%
|
Polish zloty
|
|
15,881
|
|
5.6
|
%
|
|
13,376
|
|
4.9
|
%
|
|
28,458
|
|
5.3
|
%
|
|
24,211
|
|
4.7
|
%
|
||||
Mexican peso
|
|
6,950
|
|
2.4
|
%
|
|
10,618
|
|
3.9
|
%
|
|
16,744
|
|
3.1
|
%
|
|
20,072
|
|
3.9
|
%
|
||||
Total International
|
|
$
|
48,495
|
|
17.1
|
%
|
|
$
|
45,680
|
|
16.8
|
%
|
|
$
|
91,281
|
|
17.1
|
%
|
|
$
|
85,876
|
|
16.6
|
%
|
US dollar
|
|
235,769
|
|
82.9
|
%
|
|
226,620
|
|
83.2
|
%
|
|
444,038
|
|
82.9
|
%
|
|
432,289
|
|
83.4
|
%
|
||||
Total Company
|
|
$
|
284,264
|
|
100.0
|
%
|
|
$
|
272,300
|
|
100.0
|
%
|
|
$
|
535,319
|
|
100.0
|
%
|
|
$
|
518,165
|
|
100.0
|
%
|
Item 4.
|
Controls and Procedures
|
•
|
Evaluation of personnel and positions to promote appropriate leadership and knowledge base.
|
•
|
Temporary assignment of subject matter experts to assist with remediation progress.
|
•
|
Preparation of process flows and narratives for business cycles identifying and supporting key controls.
|
•
|
Testing and evaluations, with management oversight, of various processes considered remediated. Further strengthening of controls may be required based on results.
|
•
|
Retraining and reinforcement of key internal controls through our management activities, as well as cross-facility utilization of personnel.
|
•
|
Development of enhanced monitoring procedures and assessments that subject all facilities to a consistent and comprehensive assessment of internal controls over financial reporting. Management expects that this process will be designed so that all reporting units will be subject to similar levels of controls testing, promoting compliance with the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in the 2013 Internal Control - Integrated Framework for an effective system of internal controls over financial reporting.
|
Item 6.
|
Exhibits
|
|
S
HILOH
I
NDUSTRIES
, I
NC
.
|
|
|
|
|
|
By:
|
/s/ W. Jay Potter
|
|
|
W. Jay Potter
|
|
|
Senior Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)
|
1.
|
I have reviewed this
quarterly
report on Form
10-Q
of Shiloh Industries, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statement for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ Ramzi Hermiz
|
Ramzi Hermiz
President and Chief Executive Officer
|
1.
|
I have reviewed this
quarterly
report on Form
10-Q
of Shiloh Industries, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statement for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ W. Jay Potter
|
|
W. Jay Potter
Senior Vice President and Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.
|
/s/ Ramzi Hermiz
|
|
Ramzi Hermiz
President and Chief Executive Officer
|
|
/s/ W. Jay Potter
|
W. Jay Potter
Senior Vice President and Chief Financial Officer
|