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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED OCTOBER 31, 1996 COMMISSION FILE NO. 0-21964
SHILOH INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 51-0347683
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Suite 350, 1013 Centre Road, Wilmington, Delaware 19805
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (302) 998-0592
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, Par Value $0.01 Per Share
Indicate by checkmark whether the registrant: (1) has filed
all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirement for the past 90 days. Yes X No --- ---
Indicate by checkmark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Annual
Report on Form 10-K or any amendment to this Form 10-K. [ ]
Aggregate market value of Common Stock held by non-affiliates
of the registrant as of January 17, 1997 at a closing price of $18.25 per share
as reported by the Nasdaq National Market was approximately $66,466,846. Shares
of Common Stock held by each officer and director, their respective spouses,
and by each person who owns or may be deemed to own 10% or more of the
outstanding Common Stock have been excluded since such persons may be deemed to
be affiliates. This determination of affiliate status is not necessarily a
conclusive determination for other purposes.
Number of shares of Common Stock outstanding as of January 17, 1997 was
13,011,663.
DOCUMENTS INCORPORATED BY REFERENCE
Parts of the following documents are incorporated by reference
to Parts I, II, III and IV of this Annual Report on Form 10-K: (i) the Proxy
Statement for the Registrant's 1997 Annual Meeting of Stockholders (the "Proxy
Statement"); and (ii) the Registrant's 1996 Annual Report for the fiscal year
ended October 31, 1996 (the "Annual Report").
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SHILOH INDUSTRIES, INC.
INDEX TO ANNUAL REPORT
ON FORM 10-K
PAGE
PART I
Item 1. Business............................................................................... 1
Item 2. Properties............................................................................. 5
Item 3. Legal Proceedings...................................................................... 7
Item 4. Submission of Matters to a Vote of Securityholders..................................... 7
Item 4A. Executive Officers of the Company...................................................... 7
PART II
Item 5. Market for Company's Common Equity and Related
Stockholder Matters ................................................................... 8
Item 6. Selected Financial Data................................................................ 8
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................................................... 8
Item 8. Financial Statements and Supplementary Data............................................ 8
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.................................................... 8
PART III
Item 10. Directors and Executive Officers of the Company........................................ 8
Item 11. Executive Compensation................................................................. 9
Item 12. Security Ownership of Certain Beneficial Owners
and Management...................................................................... 9
Item 13. Certain Relationships and Related Transactions......................................... 9
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K......................................................................... 9
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PART I
ITEM 1. BUSINESS.
GENERAL
Shiloh Industries, Inc. (the "Company") is a vertically
integrated steel processor that supplies high quality blanks, stampings and
processed steel to the automotive and other industries. The Company's products
include steel blanks used principally by domestic and foreign automotive
manufacturers for automobile fenders and hoods and heavy truck wheels and brake
parts, as well as steel stampings used principally by automobile component
manufacturers. The Company also designs, engineers and produces precision tools
and dies for use in its own blanking and stamping operations as well as for sale
to other industrial customers. In addition, the Company performs a variety of
value-added intermediate steel processing services, such as pickling hot rolled
steel and slitting, edge trimming, roller leveling and cutting to length hot and
cold rolled steel.
The Company's origins date back to 1950 when its predecessor,
Shiloh Tool & Die Mfg. Company, began to design and manufacture precision tools
and dies. As an outgrowth of its precision tool and die expertise, the Company
expanded into blanking and stamping operations in the early 1960's. In 1977, the
Company formed a joint venture with MTD Products Inc, a privately-held
manufacturer of outdoor power equipment and tools, dies and stampings for the
automotive industry ("MTD Products"), to develop additional steel processing
capabilities.
On July 9, 1996, the Company sold all of the outstanding stock
of its wholly owned subsidiary, Shafer Valve Company ("Shafer Valve"), for $13.2
million in cash. Shafer Valve, which the Company had acquired in May 1992,
manufactured valve actuators primarily for the oil and gas industries. The sale
of Shafer Valve was consistent with the Company's strategic objective to focus
on its core steel processing business. In 1995, Shafer Valve accounted for
approximately $16.5 million of the Company's total revenues of $228.8 million.
On November 1, 1996, the Company acquired substantially all of
the assets of Greenfield Die & Manufacturing Corp. ("Greenfield") for
approximately $22.6 million, which consisted of approximately $15.0 million in
cash and approximately $7.6 million in assumed debt that was repaid immediately
subsequent to closing. On January 3, 1997, the Company made an additional
payment of approximately $2.3 million required under the terms of the Greenfield
purchase agreement. Greenfield, headquartered in Canton, Michigan, a suburb of
Detroit, serves the automotive industry by providing a variety of value added
processes including tool and die design and build, stamping, assembly, welding,
prototyping operations and mold design and build. In 1995, Greenfield had sales
of approximately $30 million. Today, after giving effect to the sale of Shafer
Valve and the acquisition of Greenfield, the Company operates through eight
facilities with a total of over 1.4 million square feet of manufacturing space.
The Company was organized as a Delaware corporation in April
1993 to serve as a holding company for seven operating subsidiaries. In June
1993, the Company effected a reorganization whereby these seven operating
subsidiaries became direct or indirect subsidiaries of the Company. The
Company's other subsidiary is Greenfield Die & Manufacturing Corporation, which
the Company used to acquire the assets of Greenfield. In July 1993, the Company
completed an initial public offering of 3,782,500 shares of its Common Stock.
The Company's principal executive offices are located at Suite 350, 1013 Centre
Road, Wilmington, Delaware 19805 and its telephone number is (302) 998-0592.
Unless otherwise indicated, all references to the "Company" refer to Shiloh
Industries, Inc. and its direct and indirect subsidiaries.
MARKET OVERVIEW
The Company occupies the market niche between primary steel
producers and end-product manufacturers. Primary steel producers typically find
it more cost effective to focus on the sale of standard size and tolerance steel
to large volume purchasers and view the intermediate steel processor as part of
their
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customer base. End-product manufacturers seek to purchase steel free from
oxidation and scale, with closer tolerances, on shorter lead times and with more
reliable and more frequent delivery than the primary steel producers can provide
efficiently. Additionally, many end-product manufacturers are unwilling to
invest in the technology, equipment and labor required to further blank, stamp
or otherwise process steel for use in their manufacturing operations. By
outsourcing certain components, many end-product manufacturers are able to
significantly enhance the flexibility of their manufacturing operations in order
to accommodate the shorter production runs and changeover times required by
competitive pressures. These factors, together with the lower cost structure
typically found in the outside supplier, have caused many end-product
manufacturers to find it more beneficial, from a cost, quality and manufacturing
flexibility standpoint, to outsource to steel processors many of the component
parts which are utilized in the production of their end-products.
Sales to the automotive industry have historically represented
a significant portion of the Company's sales. This is expected to continue for
the foreseeable future. Sales to automotive and heavy truck manufacturers, and
suppliers to those manufacturers, constituted 64%, 66% and 57% of the Company's
revenues for the fiscal years ended October 31, 1996, 1995 and 1994,
respectively.
STEEL PROCESSING PRODUCTS AND SERVICES
Blanking and Stamping. The Company produces precision stamped
steel components through its blanking and stamping operations. Blanking is a
process in which flat rolled steel is cut into precise two dimensional shapes by
passing steel through a press employing a blanking die. The Company's blanking
presses range in size from 200 tons to 3,000 tons, giving the Company the
flexibility to produce blanks from flat rolled steel ranging in thickness from
.020 inches to .500 inches. The Company's blanks are used principally by
manufacturers in the automobile, heavy truck, heating, ventilating and air
conditioning and lawn and garden industries to produce items such as automobile
exterior parts including fenders, hoods and side panels, and heavy truck wheel
rims and brake components.
Stamping is a process in which steel is passed through dies in
a stamping press in order to form the steel into three dimensional parts. The
Company's stamping presses range in size from 150 tons to 1,500 tons, giving the
Company the flexibility to stamp flat rolled steel and steel blanks ranging in
thickness from .015 inches to .250 inches. The Company produces stamped parts
using precision single stage, progressive and transfer dies, which in most cases
are designed and manufactured by the Company. The Company produces stamped
components principally for use in the manufacture of seat components, window
assemblies and exhaust systems for automobiles and light trucks. In addition,
the Company's stamping and blanking operations provide value-added processes
such as welding, assembly, prototyping and mold design and build. These
processes are principally utilized in the automotive industry.
The Company also designs, engineers and produces precision
tools and dies. The Company produces tools and dies for use in its own blanking
and stamping operations as well as for sale to other industrial customers. The
Company maintains state-of-the-art technology to improve its tool and die
production capabilities, and has computerized most of the design and engineering
portions of its tool and die production process to reduce production time and
cost. All of the Company's tool and die manufacturing facilities are
electronically connected to certain major customers to expedite the delivery of
tool and die specifications.
Other Steel Processing. The Company processes flat rolled
steel principally for primary steel producers and manufacturers, including its
own operations, that require processed steel for end-product manufacturing
purposes. The Company either purchases or receives on a toll processing basis
(i.e., the Company does not acquire ownership of the steel) hot rolled and cold
rolled steel from primary steel producers located throughout the Midwest. This
steel typically requires additional processing to meet the requirements of the
end-product manufacturers. The Company's intermediate processing operations
include pickling, slitting, edge trimming, roller leveling, cutting to length
and quality inspecting of flat rolled steel.
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The first processing operation for hot rolled steel typically
involves pickling, a chemical process in which an acidic solution is applied to
the steel to remove the surface oxidation and scale which develops on the steel
shortly after it is hot rolled. During the pickling process, the steel is either
coated with oil to prevent oxidation or with a borax based solution to prevent
oxidation and facilitate the stamping process. The Company recently added a new
pickling line, which allows the Company to nearly double its capacity for
cleaning, finishing and coating steel. This new pickling line became fully
operational in 1996. After pickling, the steel is ready for either delivery to
the customer or additional processing. Cold rolled steel does not require
pickling.
Pickled steel and cold rolled steel often go through
additional processing operations by the Company to meet the requirements of
end-product manufacturers. Slitting is the cutting of coiled steel to precise
widths. Edge trimming removes a specified portion of the outside edges of the
coiled steel to produce a uniform width. Roller leveling flattens the steel by
applying pressure across the width of the steel to make the steel suitable for
blanking and stamping. Cutting to length produces steel cut to specified lengths
ranging from 12 inches to 168 inches. In addition to cleaning, leveling and
cutting steel, the Company visually inspects steel to detect production flaws
and utilizes computers to provide both visual displays and documented records of
the thickness maintained throughout the entire coil of steel. To achieve high
quality and increased volume levels, and to be responsive to manufacturers'
just-in-time supply requirements, the Company has computerized most of its steel
processing operations and has combined several complementary processing lines
such as pickling, slitting and cutting to length at single facilities. The
Company also performs inspection and inventory control services for certain
customers.
FORMATION OF JOINT VENTURE; EXPANSION INTO MICHIGAN
In January 1996, the Company and Rouge Steel Company formed a
limited liability company, Shiloh of Michigan, L.L.C. ("Shiloh of Michigan"), to
create a joint venture to produce engineered steel blanks, with the Company as
an eighty percent (80%) equity owner. The Company's investment in this joint
venture has totaled approximately $18.8 million. Shiloh of Michigan commenced
construction of a new manufacturing facility in Romulus, Michigan in 1995.
Construction of this facility was completed in 1996 and it is anticipated that
the facility will operate at full capacity by the end of fiscal 1997.
In November 1996, the Company completed its acquisition of
Greenfield, which is based in a suburb of Detroit, Michigan. See "Business --
General." Through Greenfield and its interest in Shiloh of Michigan, the Company
has expanded its geographic presence in Michigan. This expansion is consistent
with the Company's long-term strategy of broadening its geographic scope.
SALES AND MARKETING
The Company's steel processing products and services are
marketed directly by a sales force consisting of 14 salesmen who cover 9 states
located principally in the Midwest. Two of the Company's salesmen focus on the
Company's relationships with primary steel producers. Each of the Company's
salesmen is trained to market the Company's entire line of steel processing
products and services. The Company supplements its sales efforts with the
technical support of its engineering staff, which, in many cases, offers the
customer technical assistance during the product development stage. Certain of
the Company's executive officers also actively participate in the Company's
marketing efforts.
CUSTOMERS
The Company produces blanked and stamped parts and processes
flat rolled steel for a variety of industrial customers. The Company supplies
steel blanks primarily to the Big Three automobile manufacturers and
manufacturers of heavy truck wheels and brake parts, and supplies stamped
components to other automobile parts producers such as AP Parts, Johnson
Controls and Excel Industries, who in turn sell to the Big Three and other
automobile manufacturers. In addition, the Company also supplies blanks and
stampings to manufacturers
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in the heating, ventilating and air conditioning, steel tubing, lawn and garden,
home appliance and construction industries. The Company estimates that in fiscal
1996, sales of blanks and stampings to the automotive industry accounted for
approximately 53% of the Company's revenues. The Company processes flat rolled
steel for a number of primary steel producers and for end-product manufacturers
in a variety of industries, including the automotive and lawn and garden
industries.
One of the Company's largest customers is the Parma, Ohio
stamping facility of the Metal Fabricating division of General Motors
Corporation ("MFD Parma"). During fiscal 1996, MFD Parma accounted for
approximately 8.5% of the Company's revenues and, because these revenues relate
to blanks that are produced on a toll processing basis, approximately 15.2% of
the total steel tonnage processed by the Company. The Company is the exclusive
supplier of blanks to MFD Parma and has principally dedicated one of its
blanking facilities to such production. MFD Parma produces stamped exterior body
parts for use in many General Motors automobiles. The Company is linked through
an electronic data interchange with MFD Parma and supplies blanks on a
just-in-time basis.
LTV Steel Company, Inc. ("LTV Steel"), a primary steel
producer with significant production facilities located in close proximity to
the Company, is another large customer of the Company. During fiscal 1996, LTV
Steel accounted for approximately 1.9% of the Company's revenues and
approximately 8.5% of the total steel tonnage processed by the Company. The
Company processes steel for LTV Steel on a toll processing basis and typically
ships the processed steel to end-product manufacturers after completion of the
necessary processing operations.
OPERATIONS AND ENGINEERING
The Company operates its steel processing facilities on an
integrated basis. A significant portion of the processed flat rolled steel
required by the Company in its blanking and stamping operations is supplied
through its other steel processing operations. With three tool and die
facilities, the Company typically designs, engineers and manufactures
substantially all of the tools and dies used in its blanking and stamping
operations.
Five of the Company's facilities were constructed by the
Company and were located and designed to facilitate the integrated flow of the
Company's processing operations. In addition, the Company has developed a
just-in-time delivery system that enables the Company to meet its customers'
requirements for deliveries on shorter lead times thereby minimizing their need
to carry significant inventory levels.
The Company has a highly qualified and trained work force
supplemented, where appropriate, with automation. In 1990, the Company
established its own Total Quality Management program, known as the Integrated
Continuous Improvement Program, which allows employees to take active roles in
the improvement of their manufacturing processes and environment. The employees
meet regularly to generate new ideas or projects relating to quality
improvements, production safety and cost reduction.
RAW MATERIALS
The basic materials required for the Company' steel processing
operations are hot and cold rolled steel. The Company obtains steel for
processing from a number of primary steel producers, including Rouge Steel,
Wheeling-Pittsburgh Steel, LTV Steel, Warren Consolidated Steel, U.S. Steel and
Weirton Steel. A significant portion of the Company's steel processing products
and services are provided on a toll processing basis. Under these arrangements,
the Company charges a specified fee for processing steel without acquiring
ownership of the steel and being burdened with the attendant costs of ownership
and risk of loss. Through centralized purchasing, the Company attempts to
purchase its raw materials at the lowest competitive prices for the quantity
purchased. The amount of steel available for processing is a function of the
production levels of primary steel producers. Although the Company has been able
to satisfy all of its current requirements for flat
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rolled steel, most of its suppliers have instituted allocation programs due to
the current strong demand for flat rolled steel.
COMPETITION
Competition for sales of steel blanks and stampings is
intense, coming from numerous companies, including internal divisions of the Big
Three automobile manufacturers, which have blanking facilities and greater
financial and other resources than the Company. The market for the Company's
other steel processing operations is also highly competitive. The Company
competes with a number of steel processors in its region, such as Worthington
Industries and Samuel Steel Pickling Company, and primary steel producers, many
of which also have comparable facilities and greater financial and other
resources than the Company. The primary characteristics of competition
encountered by the Company in each of these markets are product quality,
just-in-time delivery and price.
EMPLOYEES
As of December 31, 1996, the Company had approximately 1,270
employees. The employees at two of the Company's operating facilities (an
aggregate of 326 employees) are covered by collective bargaining agreements that
are due to expire on January 14, 2000 and June 4, 2001, respectively.
BACKLOG
Because the Company conducts its steel processing operations
generally on the basis of short-term orders, backlog is not a meaningful
indicator of future performance.
SEASONALITY
The Company typically experiences decreased revenue and
operating income during its first fiscal quarter of each year, usually resulting
from generally slower overall automobile production during the winter months.
The Company's revenues and operating income in its third fiscal quarter can also
be affected by the typically lower automobile production activities in July due
to manufacturers' changeover in production lines.
ENVIRONMENTAL MATTERS
The Company is subject to environmental laws and regulations
concerning emissions to the air, discharges to waterways, and generation,
handling, storage, transportation, treatment and disposal of waste materials,
and is also subject to other Federal and state laws and regulations regarding
health and safety matters. Each of the Company's production facilities has
permits and licenses allowing and regulating air emissions and water
discharges. While the Company believes that at the present time it is in
substantial compliance with environmental laws and regulations, these laws and
regulations are constantly evolving and it is impossible to predict whether
compliance with these laws and regulations may have a material adverse effect
on the Company in the future.
ITEM 2. PROPERTIES.
The Company is a Delaware holding corporation that conducts
its operations through eight manufacturing plants, six located in north central
Ohio and two located in Michigan. The Company believes substantially all of its
property and equipment is in good condition and that it has sufficient capacity
to meet its
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current operational needs. The Company considers full capacity of its steel
processing facilities to be three eight hour shifts for 5.5 days per week. At
October 31, 1996, the Company's steel processing operations were operating at
near full capacity. The Company's eight operating facilities, all of which are
owned (except for portions of its Canton, Michigan facility), are as follows:
SQUARE DATE OF
LOCATION FOOTAGE OPERATION DESCRIPTION OF USE
-------- ------- --------- ------------------
Mansfield Ohio................................. 274,245(1) 1955 Blanking/Tool and Die
Production
Valley City, Ohio.............................. 256,095(2) 1986 Blanking
Wellington, Ohio............................... 32,700 1946 Tool and Die Production
Wellington, Ohio............................... 210,915(3) 1987 Stamping
Valley City, Ohio.............................. 257,815 1977 Other Steel Processing
Valley City, Ohio.............................. 222,870 1990 Other Steel Processing
Romulus, Michigan(4)........................... 170,600 1996(5) Blanking
Canton, Michigan............................... 96,706 1996(6) Stamping/Tool and Die
Production
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(1) Includes a 58,963 square foot addition to this facility, which was
completed in October 1994 and houses the Company's automated blanking
press line.
(2) Includes a 56,630 square foot addition to this facility, which is
expected to be completed in February 1997.
(3) Includes a 98,095 square foot addition to this facility, which was
completed in September 1996.
(4) This facility is owned by Shiloh of Michigan, the Company's joint
venture with Rouge Steel. The Company is a 80% equity owner of Shiloh
of Michigan.
(5) The Shiloh of Michigan facility was completed in August 1996.
(6) The Company acquired these operating facilities in November 1996 in
connection with its acquisition of Greenfield.
The facilities in Valley City, Ohio are in close proximity to
each other, facilitating greater integration of operations and management. In
addition, the Company's operating facilities at Canton, Michigan consist of six
separate facilities (five of which are leased) located within a five mile radius
of each other.
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ITEM 3. LEGAL PROCEEDINGS.
The Company is involved in various lawsuits arising in the
ordinary course of business. In management's opinion, the outcome of these
matters will not have a material adverse effect on the Company's financial
condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS.
No matter was submitted during the fourth quarter of the
fiscal year covered by this report to a vote of securityholders of the Company.
ITEM 4A. EXECUTIVE OFFICERS OF THE COMPANY.
The information under this Item 4A is furnished pursuant to
Instruction 3 to Item 401(b) of Regulation S-K.
ROBERT L. GRISSINGER, CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF
EXECUTIVE OFFICER. Mr. Grissinger was appointed Chairman of the Board in October
1996. In addition, he was appointed Chief Executive Officer of the Company in
January 1995 and has been President and a Director of the Company since its
formation in April 1993. Mr. Grissinger has also served as the Executive Vice
President of Shiloh Corporation since 1989, and has been employed by Shiloh
Corporation since 1963 in various financial and operational capacities. Mr.
Grissinger is 58 years old.
DOMINICK C. FANELLO, VICE CHAIRMAN OF THE BOARD. Mr. Fanello has been
Vice Chairman of the Board since October 1996 and a Director of the Company
since its formation in April 1993. Mr. Fanello served as Chairman of the Board
of the Company from April 1993 to October 1996. In January 1995, Mr. Fanello
resigned his position as the Chief Executive Officer of the Company, a position
that he had previously held since April 1993. Mr. Fanello has also served as the
Chairman and Chief Executive Officer of Shiloh Corporation since 1954, and was
one of the founders of Shiloh Corporation and its predecessor. Mr. Fanello also
serves as a director of Park National Bank (Newark, Ohio), Richland Trust
Company and Rouge Steel Company. Mr. D. Fanello is 75 years old.
JAMES C. FANELLO, EXECUTIVE VICE PRESIDENT AND PRESIDENT OF STAMPING
AND BLANKING. Mr. Fanello has been the Executive Vice President and President of
Stamping and Blanking and a Director of the Company since its formation in April
1993. Mr. Fanello has been employed by Shiloh Corporation and its predecessor
since 1951 during which time he has held various positions, including President
and Executive Vice President. Mr. J. Fanello is 68 years old.
WILLIAM R. BURTON, SENIOR VICE PRESIDENT, CORPORATE PLANNING. Mr.
Burton joined the Company in October 1994 and served as President of Shafer
Valve until its sale in July 1996. Since January 1995, Mr. Burton has
served as Senior Vice President, Corporate Planning. From December 1990 through
September 1994, Mr. Burton was the President and General Manager of Hartman
Electrical Manufacturing, a division of Figgie International, Inc. that
manufacturers electrical components principally for use in commercial and
military aircraft. Mr. Burton is 58 years old.
G. RODGER LOESCH, EXECUTIVE VICE PRESIDENT OF MANUFACTURING AND SALES.
Mr. Loesch was appointed Executive Vice President of Manufacturing and Sales of
the Company in October 1996. Prior to October 1996, Mr. Loesch had been the
Chief Financial Officer of the Company since January 1995 and the Treasurer of
the Company since its formation in April 1993. Mr. Loesch has also served as the
Corporate Controller of Shiloh Corporation since 1986. Mr. Loesch is a Certified
Public Accountant. Prior to joining Shiloh Corporation, Mr. Loesch was employed
by Burroughs Corporation and Arthur Andersen & Co. Mr. Loesch is 42 years old.
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CRAIG A. STACY, CHIEF FINANCIAL OFFICER AND TREASURER. Mr. Stacy was
appointed Chief Financial Officer and Treasurer in October 1996. Mr. Stacy had
been the Corporate Controller of the Company since 1994. Prior to joining the
Company, Mr. Stacy was employed by Price Waterhouse LLP and Ernst & Young LLP.
Mr. Stacy is a Certified Public Accountant. Mr. Stacy is 30 years old.
DAVID K. FRINK, VICE PRESIDENT OF STEEL PROCESSING AND DIRECTOR OF
CORPORATE PURCHASING. Mr. Frink was named Vice President of Steel Processing and
Director of Corporate Purchasing in August 1996. Prior to August 1996, Mr. Frink
had been the plant general manager at Liverpool Coil Processing since June 1991.
Mr. Frink is 49 years old.
PART II
ITEM 5. MARKET FOR COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The information required by Item 5 is set forth at page 23 of
the Annual Report, which information is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA.
The information required by Item 6 is set forth at page 18
and pages 29 through 39 of the Annual Report, which information is incorporated
herein by reference. In addition to such information incorporated herein by
reference, at October 31, 1994, 1993 and 1992, the total assets of the Company
were $155,733, $143,064 and $130,566, respectively, and the long-term debt of
the Company was $22,868, $26,914 and $62,791, respectively.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The information required by Item 7 is set forth at pages 19
through 22 of the Annual Report, which information is incorporated herein by
reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information required by Item 8 is set forth at pages 23
through 39 of the Annual Report, which information is incorporated herein by
reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY.
Information with respect to Directors of the Company is set
forth in the Proxy Statement on pages 1 through 4 under the heading "Election
of Directors," which information is incorporated herein by reference.
Information regarding the executive officers of the Company is included as Item
4A of Part I of this Annual Report on Form 10-K as permitted by Instruction 3 to
Item 401(b) of Regulation S-K. Information required by Item 405 of Regulation
S-K is set forth in the Proxy Statement on page 7 under the heading "Section
16(a) Beneficial Ownership Reporting Compliance," which information is
incorporated herein by reference.
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ITEM 11. EXECUTIVE COMPENSATION.
Information with respect to executive compensation is set
forth in the Proxy Statement on pages 8 through 11 under the heading
"Compensation of Executive Officers" and on page 4 under the heading "Election
of Directors -- Compensation Committee Interlocks and Insider Participation and
Certain Relationships and Related Transactions," which information is
incorporated herein by reference (except for the Compensation Committee Report
on Executive Compensation and the Comparative Stock Performance Graph).
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information with respect to security ownership of certain
beneficial owners and management is set forth in the Proxy Statement on pages 5
and 6 under the heading "Beneficial Ownership of Common Stock," which
information is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information with respect to certain relationships and related
transactions is set forth in the Proxy Statement on page 4 under the heading
"Election of Directors -- Compensation Committee Interlocks and Insider
Participation and Certain Relationships and Related Transactions," which
information is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following documents are filed as a part of this Annual Report
on Form 10-K.
1. Financial Statements. The following consolidated financial
statements of the Company and its subsidiaries and the report
of independent accountants thereon, included in the Annual
Report on pages 23 through 39, are incorporated by reference
in Item 8:
Report of Independent Accountants
Consolidated Balance Sheet at October 31, 1996 and 1995.
Consolidated Statement of Income for the three years ended
October 31, 1996.
Consolidated Statement of Cash Flows for the three years ended
October 31, 1996.
Consolidated Statement of Stockholders' Equity for the three
years ended October 31, 1996.
Notes to Consolidated Financial Statements.
2. Financial Statement Schedules. The following consolidated
financial statement schedules of the Company and its
subsidiaries and the report of independent accountants thereon
are filed as part of this Annual Report on Form 10-K and
should be read in conjunction with the consolidated financial
statements of the Company and its subsidiaries included in the
Annual Report:
SCHEDULES
---------
Report of Independent Accountants on Financial Statement
Schedule
II. Valuation and Qualifying Accounts
-9-
12
Schedules not listed above have been omitted because they are not
applicable or are not required or the information required to be set forth
therein is included in the consolidated financial statements or notes thereto.
3. Exhibits:
2.1 Stock Purchase Agreement, dated May 22, 1996, by and
between the Company and Bettis Corporation is
incorporated herein by reference to Exhibit 2.1 of
the Company's Current Report on Form 8-K filed July
24, 1996 (Commission File No. 0-21964).
2.2 Asset Purchase Agreement, dated September 6, 1996,
among GDM Acquisition, Inc., Greenfield Die &
Manufacturing Corp. and 3-D Engineering, Inc. is
incorporated herein by reference to Exhibit 2.2 of
the Company's Current Report on Form 8-K filed July
24, 1996 (Commission File No. 0-21964).
3.1(i) Restated Certificate of Incorporation of the Company
is incorporated herein by reference to Exhibit 3.1(i)
of the Company's Annual Report on Form 10-K for the
fiscal year ended October 31, 1995 (Commission File
No. 0-21964).
(ii) By-Laws of the Company are incorporated herein by
reference to Exhibit 3.1(ii) of the Company's Annual
Report on Form 10-K for the fiscal year ended October
31, 1995 (Commission File No. 0-21964).
4.1 Specimen certificate for the Common Stock, par value
$.01 per share, of the Company is incorporated herein
by reference to Exhibit 4.1 of the Company's Annual
Report on Form 10-K for the fiscal year ended October
31, 1995 (Commission File No. 0-21964).
4.2 Stockholders Agreement, dated June 22, 1993, by and
among the Company, MTD Products Inc. and the
stockholders named therein is incorporated herein by
reference to Exhibit 4.2 of the Company's Annual
Report on Form 10-K for the fiscal year ended October
31, 1995 (Commission File No. 0-21964).
4.3 Registration Rights Agreement, dated June 22, 1993,
by and among the Company, MTD Products Inc and the
stockholders named therein is incorporated herein by
reference to Exhibit 4.3 of the Company's Annual
Report on Form 10-K for the fiscal year ended October
31, 1995 (Commission File No. 0-21964).
4.4 First Amendment to Stockholders Agreement, dated
March 11, 1994, by and among the Company, MTD
Products Inc and the stockholders named therein is
incorporated herein by reference to Exhibit 4.4 of
the Company's Annual Report on Form 10-K for the
fiscal year ended October 31, 1995 (Commission File
No. 0-21964).
10.1 Credit Agreement, effective as of April 16, 1996,
between the Company, the Banks listed on Annex A
thereto and Society National Bank, as Agent is
incorporated herein by reference to Exhibit 10.1 of
the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended April 30, 1996 (Commission File
No. 0-21964).
10.2 Credit Agreement, effective as of April 16, 1996,
between Shiloh of Michigan, L.L.C., the Banks listed
on Annex A thereto and Society National Bank, as
Agent is incorporated herein by reference to Exhibit
10.2 of the Company's Quarterly Report on Form 10-Q
for the fiscal quarter ended April 30, 1996
(Commission File No. 0-21964).
-10-
13
10.3 Guaranty of Payment, dated April 16, 1996, by the
Company in favor of the Banks named therein (with an
attached schedule identifying the other subsidiaries
of the Company that have entered into an identical
agreement) is incorporated herein by reference to
Exhibit 10.3 of the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended April 30, 1996
(Commission File No. 0-21964).
10.4 Loan Agreement, dated February 1, 1995, by and
between Medina County, Ohio and Valley City Steel
Company is incorporated herein by reference to
Exhibit 10.4 of the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended April 30, 1996
(Commission File No. 0-21964).
10.5 Operating Agreement for Shiloh of Michigan, L.L.C.,
dated January 2, 1996, by and among Shiloh of
Michigan, L.L.C., Rouge Steel Company and the Company
is incorporated herein by reference to Exhibit 10.5
of the Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended April 30, 1996 (Commission
File No. 0-21964).
10.6 Master Unsecured Demand Promissory Note of Shiloh
Corporation to The Richland Trust Company of
Mansfield, dated April 2, 1991, is incorporated
herein by reference to Exhibit 10.7 of the Company's
Annual Report on Form 10-K for the fiscal year ended
October 31, 1995 (Commission File No. 0-21964).
*10.7 1993 Key Employee Stock Incentive Plan is
incorporated herein by reference to Exhibit 10.8 of
the Company's Annual Report on Form 10-K for the
fiscal year ended October 31, 1995 (Commission File
No. 0-21964).
*10.8 Executive Incentive Bonus Plan is incorporated herein
by reference to Exhibit 10.9 of the Company's Annual
Report on Form 10-K for the fiscal year ended October
31, 1995 (Commission File No. 0-21964).
*10.9 Indemnification Agreement, dated July 2, 1993, by and
between the Company and Robert L. Grissinger (with an
attached schedule identifying the directors and
officers of the Company that have entered into an
identical agreement) is incorporated herein by
reference to Exhibit 10.10 of the Company's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1995 (Commission File No. 0-21964).
*10.10 Option Agreement, dated May 28, 1993, by and between
the Company and Robert L. Grissinger (with an
attached schedule identifying the other optionees
that have entered into option agreements with the
Company) is incorporated herein by reference to
Exhibit 10.15 of the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1995
(Commission File No. 0-21964).
13.1 1996 Annual Report.
21.1 Subsidiaries of the Company.
24.1 Powers of Attorney.
27.1 Financial Data Schedule.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed by the Company during the quarter
ended October 31, 1996.
- -----------------
* Reflects management contract or other compensatory arrangement required
to be filed as an exhibit pursuant to Item 14(c) of this Report.
-11-
14
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
SHILOH INDUSTRIES, INC.
BY: /s/ ROBERT L. GRISSINGER
--------------------------------------
Robert L. Grissinger
Chairman, President and Chief Executive
Officer
DATE: JANUARY 25, 1997
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF
1934, THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF
THE REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
--------- ----- ----
* Vice Chairman and Director January 25, 1997
- ---------------------------------------
DOMINICK C. FANELLO
/s/ Robert L. Grissinger Chairman, President and Chief Executive Officer January 25, 1997
- --------------------------------------- and Director (Principal Executive Officer)
ROBERT L. GRISSINGER
* Treasurer and Chief Financial Officer January 25, 1997
- --------------------------------------- (Principal Accounting and Principal
CRAIG A. STACY Financial Officer)
* Director January 25, 1997
- ---------------------------------------
JAMES C. FANELLO
* Director January 25, 1997
- ---------------------------------------
CURTIS E. MOLL
* Director January 25, 1997
- ---------------------------------------
DIETER KAESGEN
* Director January 25, 1997
- ---------------------------------------
DAVID J. HESSLER
* Director January 25, 1997
- ---------------------------------------
RICHARD S. GRAY
* Director January 25, 1997
- ---------------------------------------
JAMES A. KARMAN
* Director January 25, 1997
- ---------------------------------------
THEODORE K. ZAMPETIS
* The undersigned, by signing his name hereto, does sign and execute this
Annual Report on Form 10-K pursuant to the Powers of Attorney executed by the
above-named officers and Directors of the Company and filed with the
Securities and Exchange Commission on behalf of such officers and Directors.
By: /s/ Robert L. Grissinger
---------------------------------------
ROBERT L. GRISSINGER, ATTORNEY-IN-FACT
-12-
15
EXHIBIT INDEX
Exhibit No. Exhibit Description
- ----------- -------------------
2.1 Stock Purchase Agreement, dated May 22, 1996, by and
between the Company and Bettis Corporation is incorporated
herein by reference to Exhibit 2.1 of the Company's Current
Report on Form 8-K filed July 24, 1996 (Commission File No.
0-21964).
2.2 Asset Purchase Agreement, dated September 6, 1996, among
GDM Acquisition, Inc., Greenfield Die & Manufacturing Corp.
and 3-D Engineering, Inc. is incorporated herein by
reference to Exhibit 2.2 of the Company's Current Report on
Form 8-K filed July 24, 1996 (Commission File No. 0-21964).
3.1(i) Restated Certificate of Incorporation of the Company is
incorporated herein by reference to Exhibit 3.1(i) of the
Company's Annual Report on Form 10-K for the fiscal year
ended October 31, 1995 (Commission File No. 0-21964).
3.1(ii) By-Laws of the Company are incorporated herein by reference
to Exhibit 3.1(ii) of the Company's Annual Report on Form
10-K for the fiscal year ended October 31, 1995 (Commission
File No. 0-21964).
4.1 Specimen certificate for the Common Stock, par value $.01
per share, of the Company is incorporated herein by
reference to Exhibit 4.1 of the Company's Annual Report on
Form 10-K for the fiscal year ended October 31, 1995
(Commission File No. 0-21964).
4.2 Stockholders Agreement, dated June 22, 1993, by and among
the Company, MTD Products Inc. and the stockholders named
therein is incorporated herein by reference to Exhibit 4.2
of the Company's Annual Report on Form 10-K for the fiscal
year ended October 31, 1995 (Commission File No. 0-21964).
4.3 Registration Rights Agreement, dated June 22, 1993, by and
among the Company, MTD Products Inc and the stockholders
named therein is incorporated herein by reference to
Exhibit 4.3 of the Company's Annual Report on Form 10-K for
the fiscal year ended October 31, 1994 (Commission File No.
0-21964).
4.4 First Amendment to Stockholders Agreement, dated March 11,
1994, by and among the Company, MTD Products Inc and the
stockholders named therein is incorporated herein by
reference to Exhibit 4.4 of the Company's Annual Report on
Form 10-K for the fiscal year ended October 31, 1995
(Commission File No. 0-21964).
10.1 Credit Agreement, effective as of April 16, 1996, between
the Company, the Banks listed on Annex A thereto and
Society National Bank, as Agent is incorporated herein by
reference to Exhibit 10.1 of the Company's Quarterly Report
on Form 10-Q for the fiscal quarter ended April 30, 1996
(Commission File No. 0-21964).
X-1
16
Exhibit No. Exhibit Description
- ----------- -------------------
10.2 Credit Agreement, effective as of April 16, 1996, between
Shiloh of Michigan, L.L.C., the Banks listed on Annex A
thereto and Society National Bank, as Agent is incorporated
herein by reference to Exhibit 10.2 of the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended
April 30, 1996 (Commission File No. 0-21964).
10.3 Guaranty of Payment, dated April 16, 1996, by the Company
in favor of the Banks named therein (with an attached
schedule identifying the other subsidiaries of the Company
that have entered into an identical agreement) is
incorporated herein by reference to Exhibit 10.3 of the
Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended April 30, 1996 (Commission File No. 0-21964).
10.4 Loan Agreement, dated February 1, 1995, by and between
Medina County, Ohio and Valley City Steel Company is
incorporated herein by reference to Exhibit 10.4 of the
Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended April 30, 1996 (Commission File No.
0-21964).
10.5 Operating Agreement for Shiloh of Michigan, L.L.C., dated
January 2, 1996, by and among Shiloh of Michigan, L.L.C.,
Rouge Steel Company and the Company is incorporated herein
by reference to Exhibit 10.5 of the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended April 30,
1996 (Commission File No. 0-21964).
10.6 Master Unsecured Demand Promissory Note of Shiloh
Corporation to The Richland Trust Company of Mansfield,
dated April 2, 1991, is incorporated herein by reference to
Exhibit 10.7 of the Company's Annual Report on Form 10-K
for the fiscal year ended October 31, 1995 (Commission File
No. 0-21964).
10.7 1993 Key Employee Stock Incentive Plan is incorporated
herein by reference to Exhibit 10.8 of the Company's Annual
Report on Form 10-K for the fiscal year ended October 31,
1995 (Commission File No. 0-21964).
10.8 Executive Incentive Bonus Plan is incorporated herein by
reference to Exhibit 10.9 of the Company's Annual Report on
Form 10-K for the fiscal year ended October 31, 1995
(Commission File No. 0-21964).
10.9 Indemnification Agreement, dated July 2, 1993, by and
between the Company and Robert L. Grissinger (with an
attached schedule identifying the directors and officers of
the Company that have entered into an identical agreement)
is incorporated herein by reference to Exhibit 10.10 of the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995 (Commission File No. 0-21964).
10.10 Option Agreement, dated May 28, 1993, by and between the
Company and Robert L. Grissinger (with an attached schedule
identifying the other optionees that have entered into
option agreements with the Company) is incorporated herein
by reference to Exhibit 10.15 of the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1995 (Commission File No. 0-21964).
X-2
17
Exhibit No. Exhibit Description
- ----------- -------------------
13.1 1996 Annual Report.
21.1 Subsidiaries of the Company.
24.1 Powers of Attorney.
27.1 Financial Schedule.
X-3
18
Schedule II
SHILOH INDUSTRIES
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
Additions
Balance at charged to Balance at
beginning costs and end of
of period expenses Deductions period
--------- -------- ---------- ------
Description
- -----------
Valuation account for accounts
receivable
Year ended October 31, 1996 $1,105,068 $ 34,600 $226,598 $ 913,070
Year ended October 31, 1995 829,344 322,064 46,340 1,105,068
Year ended October 31, 1994 549,200 587,853 307,709 829,344
Reserve for excess, slow moving
and potentially obsolete
material
Year ended October 31, 1996 $482,368 $ 82,181 $482,368 $ 82,181
Year ended October 31, 1995 505,000 426,340 448,972 482,368
Year ended October 31, 1994 26,000 505,000 26,000 505,000
Valuation allowance for deferred
tax assets (a)
Year ended October 31, 1996 $ 92,941 $5,046,335 $ 92,941 $5,046,335
Year ended October 31, 1995 94,972 _____ 2,031 92,941
Year ended October 31, 1994 _____ 94,972 _____ 94,972