Company Quick10K Filing
Shiloh Industries
Price3.98 EPS-1
Shares24 P/E-5
MCap95 P/FCF3
Net Debt234 EBIT-4
TEV329 TEV/EBIT-77
TTM 2019-10-31, in MM, except price, ratios
10-Q 2020-04-30 Filed 2020-07-24
10-Q 2020-01-31 Filed 2020-03-04
10-K 2019-10-31 Filed 2019-12-20
10-Q 2019-07-31 Filed 2019-09-05
10-Q 2019-04-30 Filed 2019-06-10
10-Q 2019-01-31 Filed 2019-03-12
10-K 2018-10-31 Filed 2018-12-20
10-Q 2018-07-31 Filed 2018-09-07
10-Q 2018-04-30 Filed 2018-06-06
10-Q 2018-01-31 Filed 2018-03-08
10-K 2017-10-31 Filed 2018-01-05
10-Q 2017-07-31 Filed 2017-08-29
10-Q 2017-04-30 Filed 2017-06-01
10-Q 2017-01-31 Filed 2017-03-09
10-K 2016-10-31 Filed 2017-01-17
10-Q 2016-07-31 Filed 2016-09-07
10-Q 2016-04-30 Filed 2016-06-08
10-Q 2016-01-31 Filed 2016-03-03
10-K 2015-10-31 Filed 2016-01-14
10-Q 2015-07-31 Filed 2015-09-15
10-Q 2015-04-30 Filed 2015-06-05
10-Q 2015-01-31 Filed 2015-03-11
10-K 2014-10-31 Filed 2015-01-13
10-Q 2014-07-31 Filed 2014-09-05
10-Q 2014-04-30 Filed 2014-05-23
10-Q 2014-01-31 Filed 2014-02-26
10-K 2013-10-31 Filed 2013-12-23
10-Q 2013-04-30 Filed 2013-05-23
10-Q 2013-01-31 Filed 2013-03-01
10-K 2012-10-31 Filed 2012-12-21
10-Q 2012-07-31 Filed 2012-08-23
10-Q 2012-04-30 Filed 2012-05-23
10-Q 2012-01-31 Filed 2012-02-22
10-K 2011-10-31 Filed 2011-12-21
10-Q 2011-07-31 Filed 2011-08-26
10-Q 2011-04-30 Filed 2011-05-27
10-Q 2011-01-31 Filed 2011-02-22
10-K 2010-10-31 Filed 2010-12-17
10-Q 2010-07-31 Filed 2010-08-25
10-Q 2010-04-30 Filed 2010-05-25
10-Q 2010-01-31 Filed 2010-02-24
8-K 2020-07-23 Earnings, Exhibits
8-K 2020-07-01
8-K 2020-06-16
8-K 2020-06-11
8-K 2020-06-08
8-K 2020-05-04
8-K 2020-04-13
8-K 2020-03-03
8-K 2020-02-26
8-K 2019-12-19
8-K 2019-09-05
8-K 2019-08-12
8-K 2019-06-21
8-K 2019-06-10
8-K 2019-03-12
8-K 2019-02-26
8-K 2019-01-04
8-K 2018-12-20
8-K 2018-12-17
8-K 2018-09-07
8-K 2018-09-04
8-K 2018-06-25
8-K 2018-06-06
8-K 2018-03-28
8-K 2018-03-14
8-K 2018-03-08
8-K 2018-03-01
8-K 2018-03-01
8-K 2018-02-07
8-K 2018-01-05

SHLO 10Q Quarterly Report

Part I - Financial Information
Item 1. Condensed Consolidated Financial Statements
Note 1 - Basis of Presentation
Note 2 - Recent Accounting Standards
Note 3 - Revenue
Note 4 - Accounts Receivable, Net
Note 5 - Related Party Receivables
Note 6 - Inventories, Net
Note 7 - Goodwill and Intangible Assets
Note 8 - Financing Arrangements
Note 9 - Leases
Note 10 - Pension and Other Post - Retirement Benefit Matters
Note 11 - Accumulated Other Comprehensive Loss
Note 12 - Derivatives and Financial Instruments
Note 13 - Stock Incentive Compensation
Note 14 - Fair Value of Financial Instruments
Note 15 - Restructuring Charges
Note 16 - Income Taxes
Note 17 - Earnings per Share
Note 18 - Business Segment Information
Note 19 - Commitments and Contingencies
Note 20 - Subsequent Events
Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Qualitative and Quantitative Market Risk Discussion
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 6. Exhibits
EX-10.4 a2020rsagreement20rsa.htm
EX-10.5 a2020rsuagreement20rsu.htm
EX-31.1 exhibit311q2fy20peocer.htm
EX-31.2 exhibit312q2fy20pfocer.htm
EX-32.1 exhibit321q2fy20soxcer.htm

Shiloh Industries Earnings 2020-04-30

Balance SheetIncome StatementCash Flow
72057643228814402012201420172020
Assets, Equity
30524117711349-152012201420172020
Rev, G Profit, Net Income
855219-14-47-802012201420172020
Ops, Inv, Fin

Document
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The acquisitions were accounted for as business combinations under the acquisition method in accordance with the FASB ASC Topic 805, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Business Combinations</font><font style="font-family:inherit;font-size:10pt;">. The acquisitions complement Shiloh&#8217;s global footprint with the expansion of aluminum and magnesium casting capabilities, while providing capacity for growth. </font></div><div style="line-height:120%;padding-bottom:6px;padding-top:6px;text-align:justify;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The aggregate fair value of consideration transferred was </font><font style="font-family:inherit;font-size:10pt;">$65,273</font><font style="font-family:inherit;font-size:10pt;"> (</font><font style="font-family:inherit;font-size:10pt;">$62,514</font><font style="font-family:inherit;font-size:10pt;"> net of cash acquired), on the date of the acquisitions. 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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
______________________________________________________ 
FORM 10-Q
______________________________________________________  
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission file number 0-21964
______________________________________________________ 
SHILOH INDUSTRIES, INC.
(Exact name of registrant as specified in its charter) 
______________________________________________________ 
DE
51-0347683
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
880 Steel Drive, Valley City, OH 44280
(Address of principal executive offices—zip code)
(330) 558-2600
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
______________________________________________________ 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol(s)
Name of each exchange on which registered
Common Stock, $0.01 par value
SHLO
The NASDAQ Global Select Market
Indicate by check mark whether the registrant: (1) has filed all reports required 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 requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large  Accelerated Filer
 
Accelerated Filer
Non-accelerated Filer
Smaller Reporting Company
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
Number of shares of Common Stock outstanding as of July 22, 2020 was 24,223,148.





EXPLANATORY NOTE

As previously disclosed in the Current Report on Form 8-K filed by Shiloh Industries, Inc. (the “Company”) on June 8, 2020, the Company delayed the filing of this Quarterly Report on Form 10-Q due to circumstances related to the COVID-19 pandemic and in reliance on the U.S. Securities and Exchange Commission’s order under Section 36 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and certain rules thereunder (Release No. 34-88465). The Company has implemented a range of actions aimed at minimizing the impact of COVID-19. These actions included plant closures, office closures, furloughs, four-day work week, and headcount reductions which have impeded the ability of key Company personnel to prepare and review the Quarterly Report. The voluntary and mandatory measures implemented by the Company to reduce the spread of the virus have limited access to many of the areas where the Company operates, including its corporate offices and facilities, resulting in limited support from staff. These restrictions impacted the Company’s ability to complete its internal quarterly review, including an evaluation of the various impacts of COVID-19 on the Company’s financial statements and to prepare and complete the Form 10-Q in a timely manner.




INDEX
 
 
 
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 1A. Risk Factors
 
Item 6. Exhibits


2


PART I— FINANCIAL INFORMATION

Item 1.
Condensed Consolidated Financial Statements

SHILOH INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands)
 
April 30,
2020

October 31,
2019
 

 
(Unaudited)
 
 
ASSETS
 
 
 
Cash and cash equivalents
$
91,575

 
$
14,320

Accounts receivable, net
88,616

 
172,468

Related party accounts receivable
1,186

 
1,477

Prepaid income taxes
2,346

 
1,853

Inventories, net
68,422

 
63,547

Prepaid expenses
6,689

 
8,980

Other current assets
19,366

 
13,354

Total current assets
278,200

 
275,999

Property, plant and equipment, net
312,693

 
328,026

Goodwill

 
22,395

Intangible assets, net
12,059

 
13,025

Deferred income taxes
4,471

 
5,169

Operating lease assets
50,984

 

Other assets
5,771

 
7,077

Total assets
$
664,178

 
$
651,691

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current debt
$
347,469

 
$
1,975

Accounts payable
93,782

 
155,754

Current portion of operating lease liabilities
7,546

 

Other accrued expenses
45,008

 
50,093

Accrued income taxes

 
316

Total current liabilities
493,805

 
208,138

Long-term debt

 
248,695

Long-term benefit liabilities
23,362

 
24,147

Deferred income taxes
1,167

 
798

Noncurrent operating lease liabilities
43,440

 

Other liabilities
1,586

 
2,399

Total liabilities
563,360

 
484,177

Commitments and contingencies

 

Stockholders’ equity:
 
 
 
Preferred stock, $0.01 per share; 5,000,000 shares authorized; no shares issued and outstanding at April 30, 2020 and October 31, 2019, respectively

 

Common stock, par value $0.01 per share; 75,000,000 shares authorized at April 30, 2020 and October 31, 2019; 24,308,119 and 23,790,258 shares issued and outstanding at April 30, 2020 and October 31, 2019, respectively
243

 
238

Paid-in capital
117,550

 
116,436

Retained earnings
53,479

 
115,866

Accumulated other comprehensive loss, net
(70,454
)
 
(65,026
)
Total stockholders’ equity
100,818

 
167,514

Total liabilities and stockholders’ equity
$
664,178

 
$
651,691


The accompanying notes are an integral part of these condensed consolidated financial statements.

3


SHILOH INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
(Unaudited)
 
 
Three Months Ended April 30,
 
Six Months Ended April 30,
 
2020
 
2019
 
2020
 
2019
Net revenues
$
157,928

 
$
273,370

 
$
401,414

 
$
532,303

Cost of sales
158,453

 
244,691

 
382,650

 
489,933

Gross profit
(525
)
 
28,679

 
18,764

 
42,370

Selling, general & administrative expenses
16,191

 
16,879

 
32,895

 
32,964

Amortization of intangible assets
512

 
519

 
1,024

 
1,040

Asset impairment, net
24,471

 

 
24,471

 

Restructuring
7,399


4,460

 
11,202

 
7,466

Operating income (loss)
(49,098
)
 
6,821

 
(50,828
)
 
900

Interest expense
4,627

 
3,848

 
8,983

 
7,203

Interest income
(4
)
 
(1
)
 
(10
)
 
(6
)
Other (income) expense, net
479

 
414

 
346

 
(1,072
)
Income (loss) before income taxes
(54,200
)
 
2,560

 
(60,147
)
 
(5,225
)
Provision (benefit) for income taxes
4,507

 
1,448

 
2,240

 
(1,639
)
Net income (loss)
$
(58,707
)
 
$
1,112

 
$
(62,387
)
 
$
(3,586
)
Income (loss) per share:
 
 
 
 
 
 
 
Basic income (loss) per share
$
(2.47
)
 
$
0.05

 
$
(2.63
)
 
$
(0.15
)
Basic weighted average number of common shares
23,785

 
23,516

 
23,719

 
23,450

Diluted income (loss) per share
$
(2.47
)
 
$
0.05

 
$
(2.63
)
 
$
(0.15
)
Diluted weighted average number of common shares
23,785

 
23,559

 
23,719

 
23,450



The accompanying notes are an integral part of these condensed consolidated financial statements.

4


SHILOH INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Dollar amounts in thousands)
(Unaudited)

 
 
 
 
Three Months Ended April 30,
 
Six Months Ended April 30,
 
 
 
 
2020
 
2019
 
2020
 
2019
Net loss
$
(58,707
)
 
$
1,112

 
$
(62,387
)
 
$
(3,586
)
Other comprehensive income (loss)
 
 
 
 
 
 
 
 
Defined benefit pension plans & other post-retirement benefits
 
 
 
 
 
 
 
 
 
 
Amortization of net actuarial loss
376

 
288

 
752

 
576

 
 
 
Income tax (benefit)
(86
)
 
(66
)
 
(172
)
 
(132
)
 
 
Total defined benefit pension plans & other post-retirement benefits, net of tax
290

 
222

 
580

 
444

 
Marketable securities
 
 
 
 
 
 
 
 
 
 
Realized gain

 

 

 
18

 
 
Total marketable securities, net of tax

 

 

 
18

 
Derivatives and hedging
 
 
 
 
 
 
 
 
Unrealized loss on interest rate swap agreements
(376
)
 
(158
)
 
(358
)
 
(729
)
 
 
 
Income tax benefit (provision)
46

 
26

 
2

 
137

 
 
 
Reclassification adjustments for settlement of derivatives included in net income (loss)
176

 
44

 
351

 
130

 
 
Change in fair value of derivative instruments, net of tax
(154
)
 
(88
)
 
(5
)
 
(462
)
 
Foreign currency translation adjustments
 
 
 
 
 
 
 
 
 
 
Foreign currency translation loss
(5,894
)
 
(4,478
)
 
(6,003
)
 
(1,773
)
 
 
Unrealized gain (loss) on foreign currency translation
(5,894
)
 
(4,478
)
 
(6,003
)
 
(1,773
)
Comprehensive loss, net
$
(64,465
)
 
$
(3,232
)
 
$
(67,815
)
 
$
(5,359
)

The accompanying notes are an integral part of these condensed consolidated financial statements.

5


SHILOH INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)
(Unaudited)
 
 
Six months ended April 30,
 
2020
 
2019
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
Net loss
$
(62,387
)
 
$
(3,586
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
 
Depreciation and amortization
23,911

 
23,358

Asset impairment
24,471

 

Restructuring
271

 
1,272

Amortization of deferred financing costs
1,054

 
596

Deferred income taxes
896

 
(2,739
)
Stock-based compensation expense
1,120

 
990

Loss (gain) on sale of assets
665

 
(4,156
)
Loss on marketable securities

 
25

Changes in operating assets and liabilities:
 
 
 
Accounts receivable, net
87,373

 
25,456

Inventories, net
(6,318
)
 
7,196

Prepaids and other assets
(194
)
 
2,432

Payables and other liabilities
(70,875
)
 
(33,669
)
Prepaid and accrued income taxes
(520
)
 
(4,419
)
Net cash (used in) provided by operating activities
(533
)
 
12,756

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
Capital expenditures
(18,847
)
 
(33,248
)
Derivative settlements

 
5,855

Proceeds from sale of assets
77

 
12,339

Net cash used in investing activities
(18,770
)
 
(15,054
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
Payment of capital leases
(201
)
 
(370
)
Proceeds from long-term borrowings
144,700

 
140,700

Repayments of long-term borrowings
(47,700
)
 
(138,200
)
Net cash provided by financing activities
96,799

 
2,130

Effect of foreign currency exchange rate fluctuations on cash
(241
)
 
985

Net increase in cash and cash equivalents
77,255

 
817

Cash and cash equivalents at beginning of period
14,320

 
16,843

Cash and cash equivalents at end of period
$
91,575

 
$
17,660


The accompanying notes are an integral part of these condensed consolidated financial statements.

6


SHILOH INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Dollar amounts in thousands)
(Unaudited)
 
Common Stock (.01 Par Value)
 
Paid-in-Capital
 
Retained Earnings
 
Accumulated Other Comprehensive Loss
 
Total Stockholders' Equity
January 31, 2019
$
237

 
$
114,947

 
$
131,115

 
$
(48,359
)
 
$
197,940

Net loss

 

 
1,112

 

 
1,112

Other comprehensive income (loss), net of tax

 

 

 
(4,344
)
 
(4,344
)
Restricted stock and exercise of stock options
1

 
(1
)
 

 

 

Stock-based compensation cost

 
445

 

 

 
445

April 30, 2019
$
238

 
$
115,391

 
$
132,227

 
$
(52,703
)
 
$
195,153

 
 
 
 
 
 
 
 
 
 
January 31, 2020
$
242

 
$
117,008

 
$
112,186

 
$
(64,696
)
 
$
164,740

Net loss

 

 
(58,707
)
 

 
(58,707
)
Other comprehensive income (loss), net of tax

 

 

 
(5,758
)
 
(5,758
)
Restricted stock and exercise of stock options
1

 
(1
)
 

 

 

Stock-based compensation cost

 
543

 

 

 
543

April 30, 2020
$
243

 
$
117,550

 
$
53,479

 
$
(70,454
)
 
$
100,818


 
Common Stock (.01 Par Value)
 
Paid-in-Capital
 
Retained Earnings
 
Accumulated Other Comprehensive Loss
 
Total Stockholders' Equity
October 31, 2018
$
234

 
$
114,405

 
$
135,813

 
$
(50,930
)
 
$
199,522

Net loss

 

 
(3,586
)
 

 
(3,586
)
Other comprehensive income (loss), net of tax

 

 

 
(1,773
)
 
(1,773
)
Restricted stock and exercise of stock options
4

 
(4
)
 

 

 

Stock-based compensation cost

 
990

 

 

 
990

April 30, 2019
$
238

 
$
115,391

 
$
132,227

 
$
(52,703
)
 
$
195,153

 
 
 
 
 
 
 
 
 
 
October 31, 2019
$
238

 
$
116,436

 
$
115,866

 
$
(65,026
)
 
$
167,514

Net loss

 

 
(62,387
)
 

 
(62,387
)
Other comprehensive income (loss), net of tax

 

 

 
(5,428
)
 
(5,428
)
Restricted stock and exercise of stock options
5

 
(6
)
 

 

 
(1
)
Stock-based compensation cost

 
1,120

 

 

 
1,120

April 30, 2020
$
243

 
$
117,550

 
$
53,479

 
$
(70,454
)
 
$
100,818



The accompanying notes are an integral part of these condensed consolidated financial statements.


7


SHILOH INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts and number of shares in thousands except per share data)





Note 1—Basis of Presentation

The condensed consolidated financial statements have been prepared for Shiloh Industries, Inc. and its subsidiaries (collectively referred to as the "Company," "Shiloh Industries," "us," "our" or "we"), without audit, and pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). The information furnished in the condensed consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which are, in the opinion of management, necessary for a fair presentation of such financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States ("GAAP") have been condensed or omitted pursuant to the rules and regulations of the SEC. Although we believe that the disclosures are adequate to make the information presented not misleading, these condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended October 31, 2019. Revenues and operating results for the three and six months ended April 30, 2020 are not necessarily indicative of the results to be expected for the full year.

Impact of Covid-19

In December 2019, a novel strain of coronavirus (“COVID-19”) was reported to have surfaced in Wuhan, China, which has spread throughout the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of COVID-19 a “Public Health Emergency of International Concern,” and on March 11, 2020, it characterized the outbreak as a “pandemic.”  The Company’s manufacturing operations were initially impacted at the beginning of our second quarter by COVID-19 in Asia and the last half of the quarter in Europe and North America. The impact of COVID-19 developments and uncertainty with respect to the economic effects of the pandemic has introduced significant volatility in the financial markets and is having a widespread adverse effect on the automotive industry, including reductions in consumer demand and OEM automotive production.

To date, COVID-19 has surfaced in nearly all regions around the world and resulted in travel restrictions, closing of borders and business slowdowns or shutdowns in affected areas. As a result, COVID-19 has impacted the Company's business globally. Many OEMs have suspended manufacturing operations, particularly in North America, Europe and Asia, on a temporary basis due to market conditions and matters associated with COVID-19. Additionally, as a global manufacturer, the Company has been required to adhere to stay-at-home and similar government orders in various locations around the world, including throughout the United States, Europe and Asia, resulting in the temporary closures of the Company's manufacturing and assembly facilities.

In response to the outbreak and business disruption, we have instituted employee safety protocols to contain the spread, including domestic and international travel restrictions, work-from-home practices, extensive cleaning protocols, social distancing and various temporary closures of our administrative offices and manufacturing facilities.  The Company has implemented a range of actions aimed at temporarily reducing costs and preserving liquidity. These actions include temporary salary reductions ranging between 20% to 25%, temporary reduction in board fees, reduction of discretionary spending, mandatory vacations, headcount reduction and furloughs. Due to these significant disruptions, our profitability has been significantly impacted during the second quarter of 2020.

The impact of COVID-19 developments and uncertainty with respect to the economic effects of the pandemic has introduced significant volatility in the financial markets and is having a widespread adverse effect on the automotive industry, including reductions in consumer demand and OEM automotive production. While the full extent of the impact is unknown and the current situation is still evolving, our key customers temporarily closed nearly all their production facilities in North America, Europe and Asia during the quarter ended April 30, 2020.

The Company assessed certain accounting matters that require consideration of forecasted financial information, including, but not limited to, the carrying value of the Company's goodwill, intangible assets, and other long-lived assets, and valuation allowances in context with the information reasonably available to the Company and the unknown future impacts of COVID-19 as of April 30, 2020 and through the date of this report. The Company recognized an impairment of all remaining goodwill as discussed further in “Note 7 - Goodwill and Intangible Assets”. The Company's future assessment of the magnitude and duration

8


of COVID-19, as well as other factors, could result in material impacts to the Condensed Consolidated Financial Statements in future reporting periods.

The Company continues to evaluate the impact of certain tax-related benefits available under COVID-19 including in the United States, The Coronavirus Aid, Relief, and Economic Security Act (the “Cares Act”) signed into U.S. federal law on March 27, 2020. The Cares Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer social security payments, net operating loss (“NOL”) utilization and carryback periods, modifications to the net interest deduction limitations and a technical correction to the 2017 Tax Cuts and Jobs Act, which makes certain qualified improvement property eligible for bonus depreciation.  We are also evaluating similar programs in the other countries where we operate. We did receive some relief in April from a government in Europe for approximately $0.6 million. The Company continues to review, and intends to seek, any other available potential benefits under the Cares Act or other programs in the countries we operate.


9


SHILOH INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)


Note 2—Recent Accounting Standards

Recently Issued Accounting Standards:

ASU 2020-04 Reference Rate Reform (Topic 848) - On March 12, 2020, the Financial Accounting Standards Board (FASB) issued this guidance that provides optional expedients and exceptions that are intended to ease the burden of updating contracts to contain a new reference rate due to the discontinuation of the London Inter-Bank Offered Rate (LIBOR). This guidance is available immediately and may be implemented in any period prior to the guidance expiration on December 31, 2022. We are currently assessing which of our various contracts will require an update for a new reference rate, and will determine the timing for our implementation of this guidance at the completion of that analysis.

ASU 2019-12 Income Taxes: Simplifying the Accounting for Income Taxes - This Accounting Standards Update removes specific exceptions to the general principles in Topic 740 in Generally Accepted Accounting Principles (GAAP). It eliminates the need for an organization to analyze whether the following apply in a given period: (1) Exception to the incremental approach for intraperiod tax allocation, (2) Exception accounting for basis differences when there are ownership changes in foreign investments, (3) Exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment and (4) Exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses. Also, this amendment updates the following: (1) Making minor Codification improvements for income taxes related to employee stock ownership plans and investments in qualified affordable housing projects accounted for using the equity method, (2) Requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date and (3) Requiring that an entity evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction. We expect to adopt this guidance on November 1, 2021 and we are currently assessing the impact that this standard will have on our consolidated financial statements.

ASU 2018-14 Compensation-Retirements Benefits-Defined Benefit Plans - This ASU amendment adds the following to disclosure requirements: (1) The weighted-average interest crediting rates used in the entity’s cash balance pension plans and other similar plans; (2) A narrative description of the reasons for significant gains and losses affecting the benefit obligation for the period; (3) An explanation of any other significant changes in the benefit obligation or plan assets that are not otherwise apparent in the other disclosures required by Accounting Standards Codification ("ASC") Topic 715, Compensation-Retirement Benefits. Also, this amendment clarifies the guidance in ASC 715-20-50-3 on defined benefit plans to require disclosure of (1) the projected benefit obligation (PBO) and fair value of plan assets for pension plans with PBOs in excess of plan assets (the same disclosure with reference to the accumulated postretirement benefit obligation rather than the PBO is required for other postretirement benefit plans) and (2) the accumulated benefit obligation (ABO) and fair value of plan assets for pension plans with ABOs in excess of plan assets. We expect to adopt this guidance on November 1, 2021 and we are currently assessing the impact that this standard will have on our consolidated financial statements.

ASU 2016-13 Measurement of Credit Losses on Financial Instruments - The amendments change the impairment model for financial assets measured at amortized cost and available for sale equity securities. This new model will apply to instruments such as loans, held-to-maturity debt securities, loan commitments (including lines of credit), financial guarantees accounted for under ASC 460, net investments in leases, reinsurance and trade receivables. This model will result in an earlier recognition of allowances for losses through the establishment of an allowance account. The estimate of expected credit losses should consider historical and current information, and the reasonable and supportable forecasts of future events and circumstances, as well as estimates of prepayments. We expect to adopt this guidance on November 1, 2020 and we are currently assessing the impact that this standard will have on our consolidated financial statements and disclosures.

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. We expect to adopt this guidance on November

10


SHILOH INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

1, 2020 and we are currently assessing the impact that this standard will have on our consolidated financial statements and disclosures.

Recently Adopted Accounting Standards:

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 ASC Topic 606, Revenue from Contracts with Customers. The standard requires a modified retrospective or current period transition approach 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. The Company adopted this guidance on November 1, 2019.      

The Company has applied ASU 2016-02 and all related amendments ("ASC 842") using the current period adjustment method. The Company did not record any adjustments to the opening balance of retained earnings as of November 1, 2019. Therefore, the comparative information has not been adjusted and continues to be presented under prior lease guidance. In addition, the Company elected the following package of practical expedients on a consistent basis permitting entities not to reassess: (1) whether any expired or existing contract are/or contain a lease; (2) lease classification for any expired or existing leases; (3) whether initial direct costs for any expired or existing leases qualify for capitalization under the new amended guidance. As a result, as of November 1, 2019, we recorded right-of-use ("ROU") assets of $50,540 for operating leases and $2,000 for financing leases. This standard did not have a material impact on the Company's condensed consolidated statement of operations or statement of cash flows.

The Company determines if an arrangement is a lease at inception. Operating leases are included in ROU assets and the Company's short-term and long-term operating lease liability on our Condensed Consolidated Balance Sheets. Finance leases are included in other assets, other current liabilities, and other non-current liabilities on our Condensed Consolidated Balance Sheets.
    
ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the term of the lease. The Company includes options to extend or terminate the lease when it is reasonably certain that we will exercise that option. As most of the Company's leases do not provide an implicitly stated rate within the contact, we use our incremental borrowing rate based on third party information available at the commencement date in determining the present value of lease payments. Lease expenses for lease payments on operating leases is recognized on a straight-line basis over the lease term. Additionally, the Company does not record a ROU asset or lease liability for leases with an expected lease term of 12 months or less.

The Company has lease arrangements with lease and non-lease components, which are accounted for separately across the Company's portfolio of leases. The non-lease components consist of maintenance, insurance, taxes and other expenses, and are immaterial.

The Company has exercised the land easement expedient and will continue to treat land leases under legacy GAAP provisions of ASC 840, Leases. If a modification or extension happens to a land lease, the Company will then treat the lease under the ASC 842 requirements. Current land leases are being recorded in other assets on the Company's Condensed Consolidated Balance Sheets.

Note 3Revenue

The Company manufactures and sells products, primarily to original equipment manufacturers ("OEMs") and to OEMs through Tier 1 suppliers. We enter into contracts with customers that create enforceable rights and obligations for the sale of those products. While certain production is provided under awarded multi-year programs, these programs do not contain any commitment to volume by the customer. Individual customer volume releases, blanket purchase orders, supply agreements, terms and conditions

11


SHILOH INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

represent the contract with the customer. Volume releases are limited to near-term customer requirements generally with delivery periods within a few weeks. We do not have contract assets or liabilities as defined under ASC 606, "Revenue from Contracts with Customers".

The Company participates in certain customers’ materials repurchase programs, under which we purchase materials directly from a customer’s designated supplier, for use in manufacturing products for that customer. We take delivery and title to such materials and bear the risk of loss and obsolescence. We invoice customers based upon negotiated selling prices, which inherently include a component for materials under such repurchase programs. We have risks and rewards of a principal, and as such, for transactions in which we participate in customers' materials resale programs, revenue is recognized on a gross basis for the entire amount, including the component for purchases under that customers' material resale programs.
    
We provide customers with standard warranties customary in the industry that products will operate as intended or designed, which are not separate performance obligations under ASC 606. We do not provide customers with the right to a refund but provide for product replacement. Returns or refunds for nonconforming products are not separate performance obligations applicable to the Company's contract arrangements with customers.

We continue to include shipping and handling fees billed to customers in revenue, while including costs of shipping and handling in costs of sales as a fulfillment cost. Taxes collected from customers are excluded from revenues and credited directly to obligations to the appropriate government agencies. Payment terms with customers are established based on industry and regional practices and do not exceed 180 days.

Disaggregation of Net Revenues

The following table summarizes revenue for the three and six months ended April 30, 2020 and 2019:
 
 
Net Revenues
 
 
Three Months Ended April 30,
 
Six Months Ended April 30,
Region:
 
2020
 
2019
 
2020
 
2019
North America
 
$
116,178

 
$
207,807

 
$
298,203

 
$
402,952

Europe
 
39,961

 
68,434

 
96,976

 
133,198

Asia
 
6,316

 
3,433

 
17,407

 
7,348

Eliminations
 
(4,527
)
 
(6,304
)
 
(11,172
)
 
(11,195
)
Total Company
 
$
157,928

 
$
273,370

 
$
401,414

 
$
532,303



Note 4—Accounts Receivable, Net
Accounts receivable, net is expected to be collected within one year and is net of an allowance for doubtful accounts in the amount of $1,270 and $884 at April 30, 2020 and October 31, 2019, respectively. We recognized bad debt expense of $530 and $542 for the three and six months ended April 30, 2020, and recognized bad debt (benefit) expense of $(3) and $326 during the three and six months ended April 30, 2019, in the condensed consolidated statement of operations.
We continually monitor our exposure with our customers and additional consideration is given to individual accounts considering the COVID-19 market conditions in the automotive and commercial vehicle markets.

As a part of our working capital management, the Company has entered into factoring agreements with third party financial institutions ("institutions") for the sale of certain accounts receivable, with and without recourse. The sale of the receivables is accounted for in accordance with ASC 860, Transfers and Servicing. Under that guidance, receivables are considered sold when they are transferred beyond the reach of the Company and its creditors, the purchaser has the right to pledge or exchange the receivables, and the Company has surrendered control over the transferred receivables. In addition, certain agreements address events and conditions which may obligate the Company to immediately repay to the institutions the outstanding purchase price of the receivables sold.

The total amount of trade accounts receivable factored was $4,397 and $8,779 as of April 30, 2020 and October 31, 2019, respectively. As these sales of trade accounts receivable are with recourse, $4,082 and $9,188 were recorded in accounts payable

12


SHILOH INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

as of April 30, 2020 and October 31, 2019, respectively. The cost of selling these receivables is dependent upon the number of days between the sale date of the receivables, the date the customer’s invoice is due and the interest rate. The expense associated with the sale of these receivables is recorded as a component of selling, general and administrative expense in the accompanying condensed consolidated statements of operations.

As of April 30, 2020 and October 31, 2019, $1,159 and $2,538 of trade accounts receivable were subject to factoring without recourse, respectively. The amounts subject to factoring without recourse for the year 2020 have been included in the proceeds for net cash provided by operating activities in the consolidated statements of cash flows. The expense associated with the sale of the receivables is recorded as a component of selling, general and administrative expense in the accompanying condensed consolidated statements of operations.


Note 5—Related Party Receivables

MTD Products Inc. and MTD Holdings LLC are affiliates of Oak Tree Holdings LLC, which is a greater than 5% beneficial owner of the Company's shares of Common Stock.
 
Sales to MTD Products Inc. and its affiliates were $1,273 and $2,916 for the three and six months ended April 30, 2020, respectively, and $2,343 and $4,202 for the three and six months ended April 30, 2019, respectively. At April 30, 2020 and October 31, 2019, we had related party receivable balances of $1,186 and $1,477, respectively, due from MTD Products Inc. and its affiliates.

Note 6—Inventories, Net
Inventories, net consists of the following:
 
April 30, 2020
 
October 31, 2019
Raw materials
$
27,623

 
$
26,653

Work in process
23,788

 
21,369

Finished goods
23,497

 
19,470

Reserves
(6,486
)
 
(3,945
)
Total inventories, net
$
68,422

 
$
63,547



Note 7 —Goodwill and Intangible Assets

Goodwill:

In accordance with FASB ASC Topic 350, "Intangibles – Goodwill and Other", goodwill must be reviewed for impairment annually, or more frequently if events and circumstances arise that suggest the asset may be impaired. We conduct our review for goodwill impairment on September 30 of each year. Goodwill impairment testing is performed at the reporting unit level. The fair value is compared to the carrying value including goodwill. If the carrying value exceeds the fair value, then goodwill impairment exists. The impact of COVID-19 developments and uncertainty with respect to the economic effects of the pandemic has introduced significant volatility in the financial markets and is having a widespread adverse effect on the automotive industry, including reductions in consumer demand and OEM automotive production. In response to the COVID-19 pandemic, our key customers temporarily closed nearly all their production facilities in North America, Europe and Asia (our primary markets) over the course of the quarter ended April 30, 2020. As a result, we concluded that an interim test of our goodwill was required. More specifically, the Company concluded that the following events and circumstances, in the aggregate, indicated that it was more likely than not that the carrying value of our North American reporting unit exceeded its fair value: (1) lower forecasted 2020 industry production volumes for North America, including those for our primary North American customers, due to OEM shutdowns to mitigate the spread of COVID-19 and subsequent reduced production levels over the remainder of the year, as compared to our prior production forecasts (including estimates used in our 2019 assessment) and (2) the volatility in financial markets that has lowered median North American automotive market multiples. Based on the results of our quantitative analysis, we recognized a non-cash goodwill impairment charge equal to the remaining goodwill balance of $21,971 since the carrying value exceeded the fair value of the North American reporting unit by more than the amount of the goodwill balance at April 30, 2020.

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SHILOH INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

    
We utilized both an income and a market approach, to determine the fair value of the North American reporting unit as part of our goodwill impairment assessment. The income approach is based on projected debt-free cash flow, which is discounted to the present value using discount factors that consider the timing and risk of cash flows. The discount rate used is the weighted average of an estimated cost of equity and of debt (“weighted average cost of capital”). The weighted average cost of capital is adjusted as necessary to reflect risk associated with the business of the North American reporting unit. Financial projections are based on estimated production volumes, product prices and expenses, including raw material cost, wages, energy and other expenses. Other significant assumptions include terminal value cash flow and growth rates, future capital expenditures and changes in future working capital requirements. The market approach is based on the observed share prices of comparable, publicly traded companies. The market approach fair value is determined by multiplying outstanding share capital by the associated market value of the Company’s stock at April 30, 2020. A considerable amount of management judgment and assumptions are required in performing the quantitative impairment test, principally related to determining the fair value of the reporting unit.

The changes in the carrying amount of goodwill for the six months ended April 30, 2020 are as follows:
Balance October 31, 2019
 
$
22,395

 
Impairment
 
(21,971
)
 
Foreign currency translation
 
(424
)
Balance April 30, 2020
 
$



Intangible Assets:
    
In accordance with FASB ASC Topic 360, "Property, Plant, and Equipment" (“ASC 360”), we are required to complete impairment testing whenever an event or changes in circumstances indicate the long-lived assets carrying value may not be recoverable. Due to the circumstances surrounding the COVID-19 pandemic it was necessary to test our long-lived assets for impairment as of the interim date of April 30, 2020. In accordance with ASC 360, we tested long-lived assets for impairment at the asset group level for which the lowest level of independent cash flows can be identified.  The long-lived asset groups were evaluated for impairment utilizing the sum of undiscounted cash flow forecasts. Based on the results of our quantitative analysis, no impairment charge was recorded as the fair value exceeded the carrying value of each asset grouping at April 30, 2020. The long-lived assets consist principally of property, plant, equipment, and intangibles.

The changes in the carrying amount of finite-lived intangible assets for the six months ended April 30, 2020 are as follows:
 
 
Customer Relationships
 
Developed Technology
 
Trade Name
 
Trademark
 
Total
Balance October 31, 2019
$
8,977

 
$
2,979

 
$
1,008

 
$
61

 
$
13,025

 
Amortization expense
(664
)
 
(196
)
 
(62
)
 
(7
)
 
(929
)
 
Foreign currency translation

 
(37
)
 

 

 
(37
)
Balance April 30, 2020
$
8,313

 
$
2,746

 
$
946

 
$
54

 
$
12,059

Intangible assets are amortized on the straight-line method over their legal or estimated useful lives. The following summarizes the gross carrying value and accumulated amortization for each major class of intangible assets:
 
 
April 30, 2020
 
 
Weighted Average Useful Life (years)
 
Gross Carrying Value Net of Foreign Currency
 
Accumulated Amortization
 
Net
 
Customer relationships
6.5
 
$
17,562

 
$
(9,249
)
 
$
8,313

 
Developed technology
8.5
 
7,097

 
(4,351
)
 
2,746

 
Trade Name
7.7
 
1,874

 
(928
)
 
946

 
Trademark
3.3
 
167

 
(113
)
 
54

 
 
 
 
$
26,700

 
$
(14,641
)
 
$
12,059



14


SHILOH INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Total amortization expense was $512 and $1,024 for the three and six months ended April 30, 2020, respectively, and $519 and $1,040 for the three and six months ended April 30, 2019, respectively. A favorable lease asset of $1,458 was acquired as part of the Brabant acquisitions in fiscal year 2018 with a 7-year useful life. Amortization expense for the three and six months ended April 30, 2020 was $48 and $96, respectively, and is included within the amortization of intangible assets. A net balance of $888 is included within other assets for the favorable lease asset. Amortization expense related to intangible assets and the favorable lease asset is estimated to be as follows:
    
Twelve Months Ended April 30,
 
 
2021
 
$
2,051

2022
 
2,051

2023
 
2,051

2024
 
2,038

2025
 
1,828

Thereafter
 
2,928

 
 
$
12,947



Note 8—Financing Arrangements
Debt consists of the following:    
 
April 30,
2020
 
October 31, 2019
Credit Agreement—interest rate of 4.70% at April 30, 2020 and 5.18% at October 31, 2019
$
345,700

 
$
248,695

Capital lease obligations
1,769

 
1,975

Total debt
347,469

 
250,670

Less: Current debt
347,469

 
1,975

Total long-term debt
$

 
$
248,695



At April 30, 2020, the Company had floating rate debt on a revolving line of credit of $345,700, net of its capital lease obligations. The weighted average interest rate of all debt was 4.99% and 5.42% for the six months ended April 30, 2020 and 2019, respectively.

Revolving Credit Facility:

The Company and its subsidiaries are party to a Credit Agreement, dated October 25, 2013, as amended (the "Credit Agreement") with Bank of America, N.A., as Administrative Agent, Swing Line Lender, Dutch Swing Line Lender and L/C Issuer, JPMorgan Chase Bank, N.A. as Syndication Agent, Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities, LLC as Joint Lead Arrangers and Joint Book Managers, The PrivateBank and Trust Company, Compass Bank and The Huntington National Bank, N.A., as Co-Documentation Agents and the other lender parties thereto.

The Credit Agreement contains customary restrictive and financial covenants, including covenants regarding our outstanding indebtedness and maximum leverage and interest coverage ratios. The Credit Agreement also contains standard provisions relating to conditions of borrowing. In addition, the Credit Agreement contains customary events of default, including the non-payment of obligations by the Company and the bankruptcy of the Company. If an event of default occurs, all amounts outstanding under the Credit Agreement may be accelerated and become immediately due and payable. The pre-existing financial covenants include the interest coverage ratio at 3.5 times and the leverage ratio which ranges between 4.75 times in the second quarter of 2020 and 3.25 times in the fourth quarter of 2020.

The impact of COVID-19 developments and uncertainty with respect to the economic effects of the pandemic has introduced significant volatility in the financial markets and is having a widespread adverse effect on the automotive industry,

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SHILOH INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

including reductions in consumer demand and OEM automotive production. The Company experienced significant operating losses, negative cash flows from operations and working capital deficiencies during the period and as a result was below the established financial thresholds of the interest coverage ratio and leverage ratio covenants as of April 30, 2020.

On June 11, 2020, the Company entered into the Tenth Amendment to the Credit Agreement (the “Tenth Amendment”), pursuant to which, among other things, the Company received a waiver of the interest coverage ratio and leverage ratio covenants for the quarters ended April 30, 2020 and July 31, 2020. The Company intends to work during the waiver period to complete a debt refinancing, evaluate additional capital sources and review other strategic alternatives. It is uncertain when, or if, the Company will return to profitability and positive cash flows from operations, whether due to the impact of COVID-19 or otherwise. The uncertainties associated with COVID-19 related to our industry, customers and supply chain present risk and doubt on the Company’s ability to continue as a going concern.

The Tenth Amendment adds financial covenants that require the Company to (i) maintain week-end liquidity of at least (1) $40 million for the period from June 13, 2020 through June 26, 2020, (2) $35 million for the period from June 27, 2020 through July 11, 2020, and (3) $30 million from July 12, 2020 through October 31, 2020, and (ii) limit capital expenditures to $15 million for the period from May 1, 2020 through August 31, 2020. The Tenth Amendment adds, limits or otherwise modifies certain debt, disposition and investment baskets. The Tenth Amendment provides that (i) revolving loans and swingline loans shall bear interest at a rate equal to the base rate or LIBOR plus an applicable margin of 4.00% in the case of base rate loans or 5.00% in the case of LIBOR loans, (ii) the Company shall pay a commitment fee on the unused portion of the revolving commitments at a rate of 0.65% per annum and (iii) revolving loans bearing interest at the LIBOR rate shall be subject to a LIBOR floor of 1.00%; provided, that, in case of clauses (i) and (ii), if the Company demonstrates, based on the compliance certificate for the fiscal quarter ending July 31, 2020, that (A) the consolidated leverage ratio as of the end of the fiscal quarter ending July 31, 2020 does not exceed 4.25 to 1.0 and (B) the consolidated interest coverage ratio as of the end of the fiscal quarter ending July 31, 2020 is greater than or equal to 3.50 to 1.0, then applicable margin shall revert to the pricing grid that was in effect prior to the Tenth Amendment. The Tenth Amendment also includes certain transactional milestones for the Company.

Long-term debt is classified as current in the condensed consolidated balance sheet as of April 30, 2020, because the waivers for the pre-existing financial covenants expire in less than twelve months and the company will not comply with future covenants based on current forecasts. At that time the Company must be in compliance with those pre-existing financial covenants. We are working with our lenders on a subsequent refinancing that we anticipate being completed in August 2020. If we are able to complete the refinancing or obtain additional capital resources, we anticipate that the debt will be classified as long-term debt.

After considering letters of credit of $4,254 that we have issued, the Company has borrowed all the funds available under the Credit Agreement as of April 30, 2020. Actual borrowing capacity is subject to the Credit Agreement covenants and could be less than the stated unused commitments.

Borrowings under the Credit Agreement are collateralized by a first priority security interest in substantially all of the tangible and intangible property of the Company and our domestic subsidiaries and 66% of the stock of our foreign subsidiaries.

Other Debt:

We maintain finance leases for equipment used in our manufacturing facilities with lease terms expiring between 2019 and 2020. As of April 30, 2020, the present value of minimum lease payments under our capital leases amounted to $1,769.

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SHILOH INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Scheduled repayments of debt for the next five years are listed below:     
Twelve Months Ending April 30,
 
Credit Agreement
 
Capital Lease Obligations
 
Total
2021
 
$

 
$
1,769

 
$
1,769

2022
 

 

 

2023
 
345,700

1 

 
345,700

2024
 

 

 

2025
 

 

 

Total
 
$
345,700

 
$
1,769

 
$
347,469


1 - Based on the current credit agreement the $345,700 in debt is due in 2023 but is classified as current debt because we only have 90-days to amend the current debt agreements. The contractual terms above do not reflect any violation of covenants.

Note 9 — Leases

The Company leases office space, manufacturing space, computer equipment and other equipment under non-cancellable lease arrangements. Additionally, some of the Company's real estate lease payments vary based on changes in the Consumer Price Index ("CPI"). These specific lease liabilities are not remeasured as a result of changes to the CPI and are recognized in the period in which the obligation for those payments was incurred.