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
|
x
|
Emerging Growth Company
|
¨
|
|
|
|
Page
|
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|||
|
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||
|
|
||
|
|
||
|
|
||
|
|
||
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|
||
|
|||
|
|||
|
|||
|
Item 4.
Controls and Procedures
|
||
|
|||
|
Item 1.
Legal Proceedings
|
||
|
Item 1A.
Risk Factors
|
||
|
Item 6.
Exhibits
|
Item 1.
|
Condensed Consolidated Financial Statements
|
|
January 31,
2019 |
|
October 31,
2018 |
||||
|
|
||||||
|
(Unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
11,667
|
|
|
$
|
16,843
|
|
Accounts receivable, net
|
175,852
|
|
|
209,733
|
|
||
Related party accounts receivable
|
1,727
|
|
|
996
|
|
||
Prepaid income taxes
|
1,451
|
|
|
1,391
|
|
||
Inventories, net
|
73,467
|
|
|
71,412
|
|
||
Prepaid expenses
|
10,298
|
|
|
10,478
|
|
||
Other current assets
|
12,713
|
|
|
22,124
|
|
||
Total current assets
|
287,175
|
|
|
332,977
|
|
||
Property, plant and equipment, net
|
328,315
|
|
|
316,176
|
|
||
Goodwill
|
27,609
|
|
|
27,376
|
|
||
Intangible assets, net
|
14,490
|
|
|
14,939
|
|
||
Deferred income taxes
|
7,314
|
|
|
5,665
|
|
||
Other assets
|
11,099
|
|
|
12,542
|
|
||
Total assets
|
$
|
676,002
|
|
|
$
|
709,675
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current debt
|
$
|
813
|
|
|
$
|
1,327
|
|
Accounts payable
|
168,749
|
|
|
177,400
|
|
||
Other accrued expenses
|
50,247
|
|
|
63,031
|
|
||
Accrued income taxes
|
130
|
|
|
1,874
|
|
||
Total current liabilities
|
219,939
|
|
|
243,632
|
|
||
Long-term debt
|
238,581
|
|
|
245,351
|
|
||
Long-term benefit liabilities
|
15,647
|
|
|
15,553
|
|
||
Deferred income taxes
|
819
|
|
|
2,894
|
|
||
Other liabilities
|
3,076
|
|
|
2,723
|
|
||
Total liabilities
|
478,062
|
|
|
510,153
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.01 per share; 5,000,000 shares authorized; no shares issued and outstanding at January 31, 2019 and October 31, 2018, respectively
|
—
|
|
|
—
|
|
||
Common stock, par value $0.01 per share; 50,000,000 shares authorized; 23,686,182 and 23,417,107 shares issued and outstanding at January 31, 2019 and October 31, 2018, respectively
|
237
|
|
|
234
|
|
||
Paid-in capital
|
114,947
|
|
|
114,405
|
|
||
Retained earnings
|
131,115
|
|
|
135,813
|
|
||
Accumulated other comprehensive loss, net
|
(48,359
|
)
|
|
(50,930
|
)
|
||
Total stockholders’ equity
|
197,940
|
|
|
199,522
|
|
||
Total liabilities and stockholders’ equity
|
$
|
676,002
|
|
|
$
|
709,675
|
|
|
Three Months Ended January 31,
|
||||||
|
2019
|
|
2018
|
||||
Net revenues
|
$
|
258,933
|
|
|
$
|
247,666
|
|
Cost of sales
|
245,242
|
|
|
219,776
|
|
||
Gross profit
|
13,691
|
|
|
27,890
|
|
||
Selling, general & administrative expenses
|
16,085
|
|
|
21,240
|
|
||
Amortization of intangible assets
|
521
|
|
|
565
|
|
||
Restructuring
|
3,006
|
|
|
1,514
|
|
||
Operating (loss) income
|
(5,921
|
)
|
|
4,571
|
|
||
Interest expense
|
3,355
|
|
|
2,340
|
|
||
Interest income
|
(5
|
)
|
|
(5
|
)
|
||
Other (income) expense, net
|
(1,486
|
)
|
|
436
|
|
||
Income (loss) before income taxes
|
(7,785
|
)
|
|
1,800
|
|
||
Provision (benefit) for income taxes
|
(3,087
|
)
|
|
(3,058
|
)
|
||
Net income (loss)
|
$
|
(4,698
|
)
|
|
$
|
4,858
|
|
Income (loss) per share:
|
|
|
|
||||
Basic earnings (loss) per share
|
$
|
(0.20
|
)
|
|
$
|
0.21
|
|
Basic weighted average number of common shares
|
23,385
|
|
|
23,107
|
|
||
Diluted earnings (loss) per share
|
$
|
(0.20
|
)
|
|
$
|
0.21
|
|
Diluted weighted average number of common shares
|
23,385
|
|
|
23,287
|
|
|
|
|
|
Three Months Ended January 31,
|
||||||
|
|
|
|
2019
|
|
2018
|
||||
Net income (loss)
|
$
|
(4,698
|
)
|
|
$
|
4,858
|
|
|||
Other comprehensive income (loss)
|
|
|
|
|||||||
|
Defined benefit pension plans & other post-retirement benefits
|
|
|
|
||||||
|
|
|
Amortization of net actuarial loss
|
288
|
|
|
328
|
|
||
|
|
|
Income tax benefit (provision)
|
(66
|
)
|
|
(107
|
)
|
||
|
|
Total defined benefit pension plans & other post retirement benefits, net of tax
|
222
|
|
|
221
|
|
|||
|
Marketable securities
|
|
|
|
||||||
|
|
|
Unrealized loss on marketable securities
|
—
|
|
|
(144
|
)
|
||
|
|
|
Income tax benefit (provision)
|
—
|
|
|
37
|
|
||
|
|
|
Realized income
|
18
|
|
|
—
|
|
||
|
|
Total marketable securities, net of tax
|
18
|
|
|
(107
|
)
|
|||
|
Derivatives and hedging
|
|
|
|||||||
|
|
|
Unrealized (loss) gain on interest rate swap agreements
|
(571
|
)
|
|
866
|
|
||
|
|
|
Income tax benefit (provision)
|
111
|
|
|
(341
|
)
|
||
|
|
|
Reclassification adjustments for settlement of derivatives included in net income (loss)
|
86
|
|
|
280
|
|
||
|
|
Change in fair value of derivative instruments, net of tax
|
(374
|
)
|
|
805
|
|
|||
|
Foreign currency translation adjustments
|
|
|
|
||||||
|
|
|
Foreign currency translation gain (loss)
|
2,705
|
|
|
7,783
|
|
||
|
|
Unrealized gain (loss) on foreign currency translation
|
2,705
|
|
|
7,783
|
|
|||
Comprehensive income (loss), net
|
$
|
(2,127
|
)
|
|
$
|
13,560
|
|
|
Three Months Ended January 31,
|
||||||
|
2019
|
|
2018
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income (loss)
|
$
|
(4,698
|
)
|
|
$
|
4,858
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
11,860
|
|
|
10,117
|
|
||
Restructuring
|
1,043
|
|
|
277
|
|
||
Amortization of deferred financing costs
|
297
|
|
|
309
|
|
||
Deferred income taxes
|
(3,918
|
)
|
|
(3,551
|
)
|
||
Stock-based compensation expense
|
545
|
|
|
516
|
|
||
(Gain) loss on sale of assets
|
(2,915
|
)
|
|
(12
|
)
|
||
Loss on marketable securities
|
20
|
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
40,283
|
|
|
32,313
|
|
||
Inventories, net
|
704
|
|
|
(671
|
)
|
||
Prepaids and other assets
|
1,059
|
|
|
(6,044
|
)
|
||
Payables and other liabilities
|
(34,138
|
)
|
|
(23,522
|
)
|
||
Prepaid and accrued income taxes
|
(3,781
|
)
|
|
(2,950
|
)
|
||
Net cash provided by operating activities
|
6,361
|
|
|
11,640
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Capital expenditures
|
(15,661
|
)
|
|
(9,885
|
)
|
||
Proceeds from sale of assets
|
10,858
|
|
|
—
|
|
||
Net cash used in investing activities
|
(4,803
|
)
|
|
(9,885
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Payment of capital leases
|
(201
|
)
|
|
(223
|
)
|
||
Proceeds from long-term borrowings
|
61,600
|
|
|
46,900
|
|
||
Repayments of long-term borrowings
|
(68,300
|
)
|
|
(45,370
|
)
|
||
Payment of deferred financing costs
|
—
|
|
|
(57
|
)
|
||
Net cash provided by (used in) financing activities
|
(6,901
|
)
|
|
1,250
|
|
||
Effect of foreign currency exchange rate fluctuations on cash
|
167
|
|
|
(675
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
(5,176
|
)
|
|
2,330
|
|
||
Cash and cash equivalents at beginning of period
|
16,843
|
|
|
8,736
|
|
||
Cash and cash equivalents at end of period
|
$
|
11,667
|
|
|
$
|
11,066
|
|
Standard
|
Description
|
Effective Date
|
Effect on our financial statements and other significant matters
|
ASU 2018-15
Goodwill and Other-Internal-Use Software
|
The amendments apply to the accounting for implementation, setup and other upfront costs (collectively referred to as implementation costs) for entities that are a customer in a hosting arrangement and align the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The amendments also require customers to expense capitalized implementation costs over the term of the hosting arrangement and in the same line on the income statement as the fees associated with the hosting service and payments for the capitalized implementation costs in the statement of cash flows in the same manner as payments made for fees associated with the hosting service.
|
November 1, 2020 with early adoption permitted.
|
We are in the process of evaluating the impact of adoption of this standard on our financial statements and disclosures.
|
Standard
|
Description
|
Effective Date
|
Effect on our financial statements and other significant matters
|
ASU 2016-02
Leases
|
This amendment requires lessees to recognize a lease liability and a right-of-use asset on the balance sheet and aligns many of the underlying principles of the new lessor model with those in Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers. The standard requires a modified retrospective transition for capital and operating leases existing at or entered into after the beginning of the earliest comparative period presented in the financial statements, but it does not require transition accounting for leases that expire prior to the date of initial adoption. In January 2018, the FASB issued an amendment to ASC Topic 842 which permits companies to elect an optional transition practical expedient to not evaluate existing land easements under the new standard if the land easements were not previously accounted for under existing lease guidance. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842 which clarifies certain areas within ASU 2016-02. ASU 2018-11 Targeted Improvements to Topic 842, Leases. This amendment provides entities with an additional (and optional) transition method to adopt the new leases standard. Under this new transition method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption.
|
November 1, 2019 with early adoption permitted.
|
We are in the process of evaluating the impact of adoption of this standard on our financial statements and disclosures. We are in the beginning stages of developing a project plan with key stakeholders throughout the organization and gathering and analyzing detailed information on existing lease arrangements. This includes evaluating the available practical expedients, calculating the lease asset and liability balances associated with individual contractual arrangements and assessing the disclosure requirements. In addition, we continue to monitor FASB amendments to ASC Topic 842.
|
Standard
|
Description
|
Adoption Date
|
Effect on our financial statements and other significant matters
|
ASU 2017-09
Compensation - Stock Compensation (Topic 718)
|
This amendment clarifies when a change to the terms or conditions of a share-based payment award must be accounted for as a modification. The new guidance requires modification accounting if the fair value, vesting condition or the classification of the award is not the same immediately before and after a change to the terms and conditions of the award. The amendment should be adopted on a prospective basis.
|
November 1, 2018
|
The adoption of this framework did not have a material impact on Shiloh's financial position, results of operations or financial statement disclosures. Shiloh's awards are rarely modified after grant.
|
Standard
|
Description
|
Adoption Date
|
Effect on our financial statements and other significant matters
|
ASU 2014-09
Revenue from Contracts with Customers
|
The amendments require companies to recognize revenue when there is a transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. The amendments should be applied on either a full or modified retrospective basis, which clarifies existing accounting literature relating to how and when a company recognizes revenue. The Financial Accounting Standards Board ("FASB"), through the issuance of Accounting Standards Updated ("ASU") No. 2015-14, "Revenue from Contracts with Customers," approved a one year delay of the effective date and permits two implementation approaches, one requiring retrospective application of the new standard with restatement of prior years and one requiring prospective application of the new standard with disclosure of results under old standards. During fiscal 2016, the FASB issued ASUs 2016-10, 2016-11 and 2016-12. Finally, ASU 2016-20 makes minor corrections or minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities.
|
November 1, 2018
|
Refer to Note 3.
|
ASU 2016-01 Recognition and Measurement of Financial Assets and Financial Liabilities
|
This amendment addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. Most prominent among the amendments is the requirement for changes in the fair value of the Company's equity investments, with certain exceptions, to be recognized through net income rather than other comprehensive income ("OCI"). The amendments should be applied by means of a cumulative-effect adjustment to the balance sheet in year of adoption.
|
November 1, 2018
|
The adoption of this framework did not have a significant impact on Shiloh's financial position, results of operations or financial statement disclosures.
|
Standard
|
Description
|
Adoption Date
|
Effect on our financial statements and other significant matters
|
ASU 2018-09 Codification Improvements
|
These amendments provide clarifications and corrections to certain ASC subtopics including the following: Income Statement - Reporting Comprehensive Income – Overall (Topic 220-10), Debt - Modifications and Extinguishments (Topic 470-50), Distinguishing Liabilities from Equity – Overall (Topic 480-10), Compensation - Stock Compensation - Income Taxes (Topic 718-740), Business Combinations - Income Taxes (Topic 805-740), Derivatives and Hedging – Overall (Topic 815-10) and Fair Value Measurement – Overall (Topic 820-10).
|
The majority of the amendments will be effective November 1, 2019 while others were effective upon the issuance of the ASU.
|
Adoption of the clarifications and corrections in this ASU did not have a material impact on Shiloh's financial position, results of operations or financial statement disclosures.
|
|
|
Net Revenues
|
||||||
|
|
Three Months Ended January 31,
|
||||||
Region:
|
|
2019
|
|
2018
|
||||
North America
|
|
$
|
195,145
|
|
|
$
|
200,698
|
|
Europe & Asia
|
|
$
|
68,678
|
|
|
$
|
51,725
|
|
Eliminations
|
|
$
|
(4,890
|
)
|
|
$
|
(4,757
|
)
|
Total Company
|
|
$
|
258,933
|
|
|
$
|
247,666
|
|
|
January 31, 2019
|
|
October 31, 2018
|
||||
Raw materials
|
$
|
30,007
|
|
|
$
|
28,457
|
|
Work-in-process
|
26,350
|
|
|
24,435
|
|
||
Finished goods
|
21,402
|
|
|
21,637
|
|
||
Reserves
|
$
|
(4,292
|
)
|
|
$
|
(3,117
|
)
|
Total inventory
|
$
|
73,467
|
|
|
$
|
71,412
|
|
Balance October 31, 2018
|
|
$
|
27,376
|
|
|
|
Foreign currency translation
|
|
233
|
|
|
Balance January 31, 2019
|
|
$
|
27,609
|
|
|
|
Customer Relationships
|
|
Developed Technology
|
|
Non-Compete
|
|
Trade Name
|
|
Trademark
|
|
Total
|
||||||||||||
Balance October 31, 2018
|
$
|
10,311
|
|
|
$
|
3,404
|
|
|
$
|
15
|
|
|
$
|
1,131
|
|
|
$
|
78
|
|
|
$
|
14,939
|
|
|
|
Amortization expense
|
(333
|
)
|
|
(99
|
)
|
|
(4
|
)
|
|
(31
|
)
|
|
(4
|
)
|
|
(471
|
)
|
||||||
|
Foreign currency translation
|
1
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
||||||
Balance January 31, 2019
|
$
|
9,979
|
|
|
$
|
3,326
|
|
|
$
|
11
|
|
|
$
|
1,100
|
|
|
$
|
74
|
|
|
$
|
14,490
|
|
|
|
January 31, 2019
|
||||||||||||
|
|
Weighted Average Useful Life (years)
|
|
Gross Carrying Value Net of Foreign Currency
|
|
Accumulated Amortization
|
|
Net
|
||||||
|
Customer relationships
|
7.7
|
|
17,565
|
|
|
$
|
(7,586
|
)
|
|
$
|
9,979
|
|
|
|
Developed technology
|
9.6
|
|
7,186
|
|
|
(3,860
|
)
|
|
3,326
|
|
|||
|
Non-compete
|
0.7
|
|
824
|
|
|
(813
|
)
|
|
11
|
|
|||
|
Trade Name
|
8.9
|
|
1,875
|
|
|
(775
|
)
|
|
1,100
|
|
|||
|
Trademark
|
4.5
|
|
166
|
|
|
(92
|
)
|
|
74
|
|
|||
|
|
|
|
$
|
27,616
|
|
|
$
|
(13,126
|
)
|
|
$
|
14,490
|
|
|
January 31,
2019 |
|
October 31, 2018
|
||||
Credit Agreement—interest rate of 5.04% at January 31, 2019 and 4.59% at October 31, 2018
|
$
|
236,600
|
|
|
$
|
243,300
|
|
Capital lease obligations
|
2,468
|
|
|
2,640
|
|
||
Insurance broker financing agreement
|
326
|
|
|
738
|
|
||
Total debt
|
239,394
|
|
|
246,678
|
|
||
Less: Current debt
|
813
|
|
|
1,327
|
|
||
Total long-term debt
|
$
|
238,581
|
|
|
$
|
245,351
|
|
Twelve Months Ending January 31,
|
|
Credit Agreement
|
|
Capital Lease Obligations
|
|
Other Debt
|
|
Total
|
||||||||
2020
|
|
$
|
—
|
|
|
$
|
487
|
|
|
$
|
326
|
|
|
$
|
813
|
|
2021
|
|
—
|
|
|
1,981
|
|
|
—
|
|
|
1,981
|
|
||||
2022
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
2023
|
|
236,600
|
|
|
—
|
|
|
—
|
|
|
236,600
|
|
||||
2024
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
236,600
|
|
|
$
|
2,468
|
|
|
$
|
326
|
|
|
$
|
239,394
|
|
|
Pension Benefits
|
|
Other Post-Retirement
Benefits
|
||||||||||||
|
Three Months Ended January 31,
|
|
Three Months Ended January 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Interest cost
|
$
|
841
|
|
|
$
|
792
|
|
|
$
|
3
|
|
|
$
|
3
|
|
Expected return on plan assets
|
(835
|
)
|
|
(840
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of net actuarial loss
|
287
|
|
|
328
|
|
|
1
|
|
|
2
|
|
||||
Net periodic cost
|
$
|
293
|
|
|
$
|
280
|
|
|
$
|
4
|
|
|
$
|
5
|
|
|
|
|
Pension and Post Retirement Plan Liability (1)
|
|
Marketable Securities Adjustment
|
|
Interest Rate Swap Adjustment (2)
|
|
Foreign Currency Translation Adjustment (3)
|
|
Accumulated Other Comprehensive Loss
|
||||||||||
Balance at October 31, 2018
|
|
$
|
(29,137
|
)
|
|
$
|
(18
|
)
|
|
$
|
104
|
|
|
$
|
(21,879
|
)
|
|
$
|
(50,930
|
)
|
|
|
Other comprehensive income (loss), net of tax
|
|
—
|
|
|
—
|
|
|
(460
|
)
|
|
2,705
|
|
|
2,245
|
|
|||||
|
Amounts reclassified from accumulated other comprehensive loss
|
|
222
|
|
|
18
|
|
|
86
|
|
|
—
|
|
|
326
|
|
|||||
|
Net current-period other comprehensive income (loss)
|
|
222
|
|
|
18
|
|
|
(374
|
)
|
|
2,705
|
|
|
2,571
|
|
|||||
Balance at January 1, 2019
|
|
$
|
(28,915
|
)
|
|
$
|
—
|
|
|
$
|
(270
|
)
|
|
$
|
(19,174
|
)
|
|
$
|
(48,359
|
)
|
|
|
Asset (Liability) Derivatives
|
||||||
|
|
Balance Sheet Location
|
January 31, 2019
|
October 31, 2018
|
||||
Net Investment Hedging Instruments:
|
|
|
|
|||||
|
Cross-currency interest rate swap contract
|
Other assets
|
$
|
3,857
|
|
$
|
4,432
|
|
Cash Flow Hedging Instruments:
|
|
|
|
|||||
|
Interest rate swap contracts
|
(Other liabilities) Other assets
|
$
|
(350
|
)
|
$
|
135
|
|
|
Location
|
January 31, 2019
|
January 31, 2018
|
||||
|
Interest expense
|
$
|
3,355
|
|
$
|
2,340
|
|
|
Effect of hedging on interest expense
|
$
|
(368
|
)
|
$
|
280
|
|
|
|
Stock Options
|
|
Restricted Stock
|
|
Restricted Stock Units
|
|||||||||||||||||||
Outstanding at:
|
|
Options
|
|
Weighted Average Exercise Price
|
|
Weighted Average Remaining Contractual Life
|
|
Restricted Shares
|
|
Grant Fair Value
|
|
Weighted Average Remaining Contractual Life
|
|
Restricted Share Units
|
|
Grant Fair Value
|
|
Weighted Average Remaining Contractual Life
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
November 1, 2017
|
|
58
|
|
|
$8.16
|
|
2.53
|
|
441
|
|
|
$7.07
|
|
1.60
|
|
36
|
|
|
$7.69
|
|
1.82
|
||||
Granted
|
|
—
|
|
|
—
|
|
|
|
|
220
|
|
|
8.20
|
|
|
|
|
12
|
|
|
8.20
|
|
|
|
|
Options exercised or restricted stock vested
|
|
—
|
|
|
—
|
|
|
|
|
(88
|
)
|
|
8.48
|
|
|
|
|
(7
|
)
|
|
7.06
|
|
|
|
|
Forfeited or expired
|
|
—
|
|
|
—
|
|
|
|
|
(1
|
)
|
|
7.06
|
|
|
|
|
—
|
|
|
—
|
|
|
|
|
January 31, 2018
|
|
58
|
|
|
$8.16
|
|
2.27
|
|
572
|
|
|
$7.29
|
|
2.22
|
|
41
|
|
|
$7.94
|
|
1.89
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
November 1, 2018
|
|
33
|
|
|
$9.42
|
|
1.84
|
|
478
|
|
|
$7.45
|
|
1.87
|
|
26
|
|
|
$8.17
|
|
1.37
|
||||
Granted
|
|
—
|
|
|
—
|
|
|
|
|
294
|
|
|
7.06
|
|
|
|
|
22
|
|
|
6.96
|
|
|
|
|
Options exercised or restricted stock vested
|
|
—
|
|
|
—
|
|
|
|
|
(123
|
)
|
|
7.66
|
|
|
|
|
(6
|
)
|
|
7.68
|
|
|
|
|
Forfeited or expired
|
|
—
|
|
|
—
|
|
|
|
|
(32
|
)
|
|
7.24
|
|
|
|
|
—
|
|
|
|
|
|
|
|
January 31, 2019
|
|
33
|
|
|
$9.42
|
|
1.59
|
|
617
|
|
|
$7.23
|
|
2.36
|
|
42
|
|
|
$7.60
|
|
2.31
|
|
|
Three Months Ended January 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Restricted stock
|
|
$
|
509
|
|
|
$
|
480
|
|
Restricted stock units
|
|
36
|
|
|
36
|
|
||
Total
|
|
$
|
545
|
|
|
$
|
516
|
|
|
Asset (Liability)
|
Level 1
|
Level 2
|
Valuation Technique
|
|||||
October 31, 2018
|
|
|
|
|
|||||
Cross-Currency Interest Rate Swap
|
$
|
4,432
|
|
—
|
|
$
|
4,432
|
|
Income Approach
|
Interest Rate Swap Contracts
|
135
|
|
—
|
|
135
|
|
Income Approach
|
||
Marketable Securities
|
21
|
|
21
|
|
—
|
|
Market Approach
|
||
|
|
|
|
|
|||||
January 31, 2019
|
|
|
|
|
|||||
Cross-Currency Interest Rate Swap
|
$
|
3,857
|
|
—
|
|
$
|
3,857
|
|
Income Approach
|
Interest Rate Swap Contracts
|
(350
|
)
|
—
|
|
(350
|
)
|
Income Approach
|
||
Marketable Securities
|
23
|
23
|
|
—
|
|
Market Approach
|
|
|
January 31, 2019
|
|
January 31, 2018
|
||||
Employee costs
|
|
$
|
553
|
|
|
$
|
611
|
|
Professional and legal costs
|
|
1,242
|
|
|
831
|
|
||
Other
|
|
1,211
|
|
|
72
|
|
||
|
|
$
|
3,006
|
|
|
$
|
1,514
|
|
|
Balance as of October 31, 2018
|
|
Restructuring Expense
|
|
Payments
|
|
Balance as of January 31, 2019
|
||||||||
Employee costs
|
$
|
367
|
|
|
553
|
|
|
181
|
|
|
$
|
739
|
|
||
Professional and legal costs
|
248
|
|
|
1,242
|
|
|
$
|
571
|
|
|
919
|
|
|||
Other
|
—
|
|
|
1,211
|
|
|
$
|
1,211
|
|
|
—
|
|
|||
|
$
|
615
|
|
|
$
|
3,006
|
|
|
$
|
1,963
|
|
|
$
|
1,658
|
|
|
Three Months Ended January 31,
|
||||||
|
2019
|
|
2018
|
||||
Net income (loss) available to common stockholders
|
$
|
(4,698
|
)
|
|
$
|
4,858
|
|
Basic weighted average shares
|
23,385
|
|
|
23,107
|
|
||
Effect of dilutive securities:
|
|
|
|
||||
Restricted stock, units and stock options
(1)
|
—
|
|
|
180
|
|
||
Diluted weighted average shares
|
23,385
|
|
|
23,287
|
|
||
Basic income (loss) per share
|
$
|
(0.20
|
)
|
|
$
|
0.21
|
|
Diluted income (loss) per share
|
$
|
(0.20
|
)
|
|
$
|
0.21
|
|
|
|
Net Revenues
|
||||||
|
|
Three Months Ended January 31
|
||||||
Geographic Region:
|
|
2019
|
|
2018
|
||||
North America
|
|
$
|
195,145
|
|
|
$
|
200,698
|
|
Europe & Asia
|
|
$
|
68,678
|
|
|
$
|
51,725
|
|
Eliminations
|
|
$
|
(4,890
|
)
|
|
$
|
(4,757
|
)
|
Total Company
|
|
$
|
258,933
|
|
|
$
|
247,666
|
|
|
|
Foreign Currency Gain (Loss)
|
||||||
|
|
Three Months Ended January 31,
|
||||||
Geographic Region:
|
|
2019
|
|
2018
|
||||
North America
|
|
$
|
238
|
|
|
$
|
12
|
|
Europe & Asia
|
|
$
|
1
|
|
|
$
|
(128
|
)
|
|
Long-Lived Assets
|
||||||
Geographic Region:
|
January 31, 2019
|
|
October 31, 2018
|
||||
North America
|
$
|
262,990
|
|
|
$
|
253,711
|
|
Europe & Asia
|
107,424
|
|
|
104,780
|
|
||
Total Company
|
$
|
370,414
|
|
|
$
|
358,491
|
|
•
|
our ability to accomplish our strategic objectives;
|
•
|
our ability to derive a substantial portion of our sales from large customers;
|
•
|
our 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;
|
•
|
our ability to realize cost savings expected to offset price concessions;
|
•
|
our 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 our products;
|
•
|
inefficiencies related to production and product launches that are greater than anticipated;
|
•
|
changes in technology and technological risks;
|
•
|
work stoppages and strikes at our facilities and that of our customers or suppliers;
|
•
|
our 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 our customers or vendors, including any production cutbacks or bankruptcies;
|
•
|
increases in the price of, or limitations on the availability of aluminum, magnesium or steel, our primary raw materials, or decreases in the price of scrap steel;
|
•
|
the successful launch and consumer acceptance of new vehicles for which we supply parts;
|
•
|
the impact on financial statements of any known or unknown accounting errors or irregularities; and the magnitude of any adjustments in restated financial statements of our operating results;
|
•
|
the occurrence of any event or condition that may be deemed a material adverse effect under our outstanding indebtedness or a decrease in customer demand which could cause a covenant default under our outstanding indebtedness;
|
•
|
pension plan funding requirements; and
|
•
|
other factors besides those listed here could also materially affect our business.
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Production Volumes
|
Three Months Ended January 31,
|
||||
|
2019
|
|
2018
|
||
|
(Number of Vehicles in Thousands)
|
||||
Europe
|
5,202
|
|
|
5,660
|
|
North America
|
3,995
|
|
|
3,954
|
|
Total
|
9,197
|
|
|
9,614
|
|
|
|
|
|
||
Europe:
|
|
|
|
||
Decrease from prior year
|
(458
|
)
|
|
|
|
% Decrease from prior year
|
(8.1
|
)%
|
|
|
|
North America
|
|
|
|
||
Increase from prior year
|
41
|
|
|
|
|
% Increase from prior year
|
1.0
|
%
|
|
|
|
Total
|
|
|
|
||
Decrease from prior year
|
(417
|
)
|
|
|
|
% Decrease from prior year
|
(4.3
|
)%
|
|
|
|
Three Months Ended January 31,
|
|
2019 vs. 2018
|
||||||||
|
2019
|
|
2018
|
|
change
|
||||||
Net cash provided by operating activities
|
$
|
6,361
|
|
|
$
|
11,640
|
|
|
$
|
(5,279
|
)
|
Net cash used in investing activities
|
$
|
(4,803
|
)
|
|
$
|
(9,885
|
)
|
|
$
|
5,082
|
|
Net cash provided by (used in) financing activities
|
$
|
(6,901
|
)
|
|
$
|
1,250
|
|
|
$
|
(8,151
|
)
|
|
Three Months Ended January 31,
|
||||||
|
2019
|
|
2018
|
||||
Operational cash flow before changes in operating assets and liabilities
|
$
|
2,234
|
|
|
$
|
12,514
|
|
|
|
|
|
||||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
40,283
|
|
|
32,313
|
|
||
Inventories, net
|
704
|
|
|
(671
|
)
|
||
Prepaids and other assets
|
1,059
|
|
|
(6,044
|
)
|
||
Payables and other liabilities
|
(34,138
|
)
|
|
(23,522
|
)
|
||
Accrued income taxes
|
(3,781
|
)
|
|
(2,950
|
)
|
||
Total change in operating assets and liabilities
|
$
|
4,127
|
|
|
$
|
(874
|
)
|
|
|
|
|
||||
Net cash provided by operating activities
|
$
|
6,361
|
|
|
$
|
11,640
|
|
•
|
Cash inflows from changes in operating assets and liabilities was
$4,127
for the
three months ended January 31,
2019
and cash outflows was
$874
for the
three months ended January 31,
2018
and was negatively impacted by product launches with increased costs until production production stabilizes.
|
•
|
Cash inflows from changes in accounts receivable for the
three months ended January 31,
2019
and
2018
, were
$40,283
and
$32,313
, respectively. The cash inflows were due to continuing efforts to collect receivables and sales volume changes.
|
•
|
Cash inflows from changes in inventory for the
three months ended January 31,
2019
were
$704
and cash outflows from changes in inventory were
$671
for the
three months ended January 31,
2018
. The difference was primarily driven by a change in customer mix and delivery.
|
•
|
Cash inflows from changes in prepaids and other assets for the
three months ended January 31,
2019
were
$1,059
and cash outflows from changes in prepaids and other assets for the
three months ended January 31,
2018
were
$6,044
. The difference was primarily driven by the timing of invoicing customer-funded tooling.
|
•
|
Cash outflows from changes in payables and other liabilities for the
three months ended January 31,
2019
were
$34,138
and cash outflows from changes in payables and other liabilities for the
three months ended January 31,
2018
were
$23,522
. The difference was primarily driven by the matching of terms with our customers and vendors, offset partially by the timing of payments related to capital expenditures and customer-funded tooling.
|
•
|
Cash outflows from changes in accrued income taxes for the
three months ended January 31,
2019
and
2018
were
$3,781
and
$2,950
, respectively. The changes were primarily driven by payment of income taxes in foreign jurisdictions.
|
Item 4.
|
Controls and Procedures
|
Item 6.
|
Exhibits
|
|
|
Incorporated By Reference
|
|
|
||
Exhibit #
|
Exhibit Description
|
Form
|
File Number
|
Date of First Filing
|
Exhibit Number
|
Filed Herewith
|
Certificate of Amendment of Restated Certificate of Incorporation of the Registrant, dated March 1, 2019.
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
Certificate of Amendment to Restated Certificate of Incorporation of the Registrant, dated March 9, 2016 (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q filed on June 8, 2016).
|
10-Q
|
000-21964
|
June 8, 2016
|
3.1
|
|
|
|
|
|
|
|
|
|
Certificate of Designation, dated December 31, 2001 (incorporated herein by reference to Exhibit 3.1(ii) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended October 31, 2001).
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10-K
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000-21964
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February 13, 2002
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3.1(ii)
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Restated Certificate of Incorporation of the Registrant, dated June 23, 1993 (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q filed on June 8, 2016).
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10-Q
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000-21964
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June 8, 2016
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3.1
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Amended and Restated By-Laws of the Registrant, as amended through December 18, 2018 (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on December 21, 2018).
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8-K
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000-21964
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December 21, 2018
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3.1
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Shiloh Industries, Inc.'s Change in Control Severance Plan (incorporated herein by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K, filed on December 21, 2018).
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8-K
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000-21964
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December 21, 2018
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10.1
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Participation Agreement, dated December 17, 2018, by and between Lillian Etzkorn and Shiloh Industries, Inc. (incorporated herein by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K, filed on December 21, 2018).
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8-K
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000-21964
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December 21, 2018
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10.2
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Principal Executive Officer’s Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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X
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Principal Financial Officer’s Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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X
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Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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X
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101.INS
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XBRL Instance Document
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X
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101.SCH
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XBRL Taxonomy Extension Schema Document
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X
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document
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X
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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X
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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X
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document
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X
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S
HILOH
I
NDUSTRIES
, I
NC
.
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By:
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/s/ LILLIAN ETZKORN
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Lillian Etzkorn
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Senior Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)
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1.
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I have reviewed this
quarterly
report on Form
10-Q
of Shiloh Industries, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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a)
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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;
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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
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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)
|
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
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Ramzi Hermiz
President and Chief Executive Officer
|
|
/s/ Lillian Etzkorn
|
Lillian Etzkorn
Senior Vice President and Chief 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/ Lillian Etzkorn
|
|
Lillian Etzkorn
Senior Vice President and Chief Financial Officer
|