Shiloh Industries, Inc. Amends Agreement with Bank Lenders to Provide Additional Financial Flexibility as It Resumes Production Across Its Global Operations
Board of Directors Names Anna Phillips to the Board
VALLEY CITY, OHIO, June 15, 2020 – Shiloh Industries, Inc. (NASDAQ: SHLO) (the “Company”) an environmentally focused global supplier of lightweighting, noise and vibration solutions, announced today that the Company and certain of its subsidiaries have reached an agreement with their bank lenders on certain amendments to the Company’s credit agreement. Among other things, the amendments provide certain covenant relief as the Company continues to resume production across its global operations.
The entire automotive sector has been impacted by OEM production shutdowns in recent months. Shiloh and its management team have taken proactive steps expected to protect the Company’s liquidity and enable it to successfully navigate the current environment. Recent actions include realigning capital expenditure plans for the changing business environment, significantly reducing discretionary spending across the entire Company, and temporarily reducing salaries and benefits during the lowest period of customer demand. Shiloh now has safely restarted nearly all of its global production facilities as the Company ramps up production to continue to serve customers. As Shiloh’s North American and European employees increasingly return to work, the Company has established new safety protocols, including acquiring and distributing PPE for returning employees, completing preventive maintenance to ensure optimal performance at start-up, reviewing inventory to ensure sufficient levels and prioritizing schedules based upon customers’ return to production.
“We are pleased to reach this agreement with our lenders, which ensures liquidity and additional financial flexibility as we continue to navigate the current environment,” said Cloyd J. Abruzzo, Interim Chief Executive Officer. “In recent months, we have responded to the changing environment and the impact of COVID-19 with decisive action to pull back production and preserve liquidity across our global organization. As we now take steps to safely resume production to support our customers, we are also continuing discussions with our lenders seeking an appropriate capital structure to support the Company’s operations over the long term.”
The Company also announced today that Anna Phillips has been elected as a new independent director on the Company’s Board of Directors. Ms. Philips will join the Audit Committee and a newly formed Special Committee that is assisting in the refinancing efforts.
“Anna Phillips is a welcome addition to Shiloh’s Board of Directors,” said Curtis E. Moll, Chairman of the Board. “She brings significant financial expertise and experience advising companies on strengthening their balance sheets, and I am confident she will be a valuable contributor to the Board as the Company continues to takes steps to weather the current environment.”
Further details of the amended credit agreement have been disclosed in Current Report on Form 8-K filed today with the U.S. Securities and Exchange Commission.
About Anna Phillips
Ms. Phillips, 55, has worked in corporate finance in the Far East, London and North America for over 30 years. She currently serves as an independent non-executive director at several private companies. Before transitioning full time to her board roles, she was employed as a Senior Managing Director at FTI Consulting, Inc from 2009 to 2013. Prior to that she was a Senior Managing Director at Macquarie Group and predecessor organizations including Ernst & Young Corporate Finance. Ms. Phillips has a Bachelor of Commerce from the University of Tasmania in Australia and was previously a member of the Australian Institute of Chartered Accountants.
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About Shiloh Industries, Inc.
Shiloh Industries, Inc. (NASDAQ: SHLO) is a global innovative solutions provider focusing on lightweighting technologies that provide environmental and safety benefits to the mobility market. Shiloh designs and manufactures products within body structure, chassis and propulsion systems. Shiloh’s multicomponent, multi-material solutions are comprised of a variety of alloys in aluminum, magnesium and steel grades, along with its proprietary line of noise and vibration reducing ShilohCore® acoustic laminate products. The strategic BlankLight®, CastLight® and StampLight® brands combine to maximize lightweighting solutions without compromising safety or performance. Shiloh has approximately 3,600 dedicated employees with operations, sales and technical centers throughout Asia, Europe and North America.
Certain statements made by Shiloh in this press release regarding our operating performance, events or developments that we believe or expect to occur in the future, including those that discuss strategies, goals, outlook or other non-historical matters, or which relate to future expectations, growth or general belief in our expectations of future operating results are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements are made on the basis of management’s assumptions and expectations. As a result, there can be no guarantee or assurance that these assumptions and expectations will in fact occur. The forward-looking statements are subject to risks and uncertainties that may cause actual results to materially differ from those contained in the statements due to a variety of factors, including (1) the duration and severity of the COVID-19 pandemic, any preventive or protective actions taken by governmental authorities, the effectiveness of actions taken globally to contain or mitigate its effects, and any unfavorable effects of the COVID-19 pandemic on either our manufacturing operations, or those of our customer’s or suppliers; (2) reduction in demand for our solutions, including any reduction in demand as a result of a COVID-19 triggered economic recession, including any determination that the value of our assets is impaired or that we do not have the ability to continue as a going concern; (3) our ability to accomplish our strategic objectives; (4) our ability to obtain future sales; (5) changes in worldwide economic and political conditions, including adverse effects from terrorism or related hostilities; (6) costs related to legal and administrative matters; (7) our ability to realize cost savings expected to offset price concessions; (8) our ability to successfully integrate acquired businesses, including businesses located outside of the United States; (9) risks associated with doing business internationally, including economic, political and social instability, foreign currency exposure and the lack of acceptance of our products; (10) inefficiencies related to production and product launches that are greater than anticipated; (11) changes in technology and technological risks; (12) work stoppages and strikes at our facilities and that of our customers or suppliers; (13) our dependence on the automotive and heavy truck industries, which are highly cyclical; (14) 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; (15) regulations and policies regarding international trade; (16) financial and business downturns of our customers or vendors, including any production cutbacks or bankruptcies; (17) 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; (18) the successful launch and consumer acceptance of new vehicles for which we supply parts; (19) 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; (20) the occurrence of any event or condition that may be deemed a material adverse effect under agreements related to our outstanding indebtedness or a decrease in customer demand which could cause a covenant default under agreements related to our outstanding indebtedness; (21) increases in pension plan funding requirements; (22) our ability to derive a substantial portion of our sales from large customers; (23) a successful transition of the CEO position and our ability to successfully identify a qualified and effective full-time CEO; and (24) other factors besides those listed here could also materially affect our business. See “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended October 31, 2019, as updated by our Current Report on Form 8-K filed with the SEC on June 8, 2020, for a more complete discussion of these risks and uncertainties. Any or all of these risks and uncertainties could cause actual results to differ materially from those reflected in the forward-looking statements. These forward-looking statements reflect management’s analysis only as of the date of this Press Release. We undertake no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date of filing this Press Release. In addition to the disclosures contained herein, readers should carefully review risks and uncertainties contained in other documents we file from time to time with the SEC.
Mon, June 15, 2020