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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549



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FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934



|                                           |  |                            
|------------------------------------------ |  | ---------------------------
|For the fiscal year ended October 31, 2007 |  | Commission file no. 0-21964



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Shiloh Industries, Inc.

(Exact name of Registrant as specified in its charter)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 51-0347683                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

Suite 202, 103 Foulk Road, Wilmington, Delaware 19803

(Address of principal executive officeszip code)

(302) 656-1950

(Registrants telephone number, including area code)



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Securities registered pursuant to
Section 12(b) of the Act:

Common Stock, Par Value $0.01 Per Share

Securities registered pursuant to Section 12(g) of the Act:

None



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Indicate by check
mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes ̈No  x

Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or 15(d) of the Exchange Act.  Yes ̈No  x

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  x  No ̈

Indicate by check mark 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 Form 10-K or any amendment to this Form 10-K. ̈

Indicate by check mark whether the registrant is an accelerated filer
(as defined in Exchange Act Rule 12b-2).  Yes  x  No ̈

Indicate by check mark whether the registrant is a shell company (as defined in the Exchange Act Rule 12b-2).  Yes ̈No  x

Aggregate market value of Common Stock held by non-affiliates of the registrant as of April 30, 2007, the last business day of the registrants most recently completed second fiscal quarter, at a closing
price of $10.38 per share as reported by the Nasdaq Global Market, was approximately $52,622,573. Shares of Common Stock beneficially held by each executive officer and director and their respective spouses 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 December 14, 2007 was 16,354,699.

DOCUMENTS INCORPORATED BY REFERENCE

Parts of the following document are incorporated by reference into Part III of this Annual Report on Form 10-K: the Proxy Statement
for the registrants 2007 Annual Meeting of Stockholders (the Proxy Statement).



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##### Table of Contents

INDEX TO ANNUAL REPORT

ON FORM 10-K

Table Of Contents



|         |  |                                                                                                              |  |     
|-------- |  | ------------------------------------------------------------------------------------------------------------ |  | ----
|         |  |                                                                                                              |  | Page
|         |  | PART I:                                                                                                      |  |     
|         |  |                                                                                                             
|Item 1.  |  | Business                                                                                                     |  | 3   
|Item 1A. |  | Risk Factors                                                                                                 |  | 8   
|Item 1B. |  | Unresolved Staff Comments                                                                                    |  | 9   
|Item 2.  |  | Properties                                                                                                   |  | 10  
|Item 3.  |  | Legal Proceedings                                                                                            |  | 11  
|Item 4.  |  | Submission of Matters to a Vote of Security Holders                                                          |  | 11  
|         |  | Executive Officers of the Registrant                                                                         |  | 11  
|         |  |                                                                                                             
|         |  | PART II:                                                                                                     |  |     
|         |  |                                                                                                             
|Item 5.  |  | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |  | 12  
|Item 6.  |  | Selected Financial Data                                                                                      |  | 13  
|Item 7.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                        |  | 14  
|Item 7A. |  | Quantitative and Qualitative Disclosures about Market Risk                                                   |  | 26  
|Item 8.  |  | Financial Statements and Supplementary Data                                                                  |  | 28  
|Item 9.  |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                         |  | 63  
|Item 9A. |  | Controls and Procedures                                                                                      |  | 63  
|Item 9B. |  | Other Information                                                                                            |  | 63  
|         |  |                                                                                                             
|         |  | PART III:                                                                                                    |  |     
|         |  |                                                                                                             
|Item 10. |  | Directors and Executive Officers of the Registrant                                                           |  | 63  
|Item 11. |  | Executive Compensation                                                                                       |  | 63  
|Item 12. |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters               |  | 63  
|Item 13. |  | Certain Relationships and Related Transactions                                                               |  | 64  
|Item 14. |  | Principal Accountant Fees and Services                                                                       |  | 64  
|         |  |                                                                                                             
|         |  | PART IV:                                                                                                     |  |     
|         |  |                                                                                                             
|Item 15. |  | Exhibits and Financial Statement Schedules                                                                   |  | 65  



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##### Table of Contents

SHILOH INDUSTRIES, INC.

PART I



|Item 1. | Business
|------- | --------

General

Shiloh Industries, Inc. is a Delaware corporation organized in 1993. Unless otherwise indicated, all references to the Company or
Shiloh refer to Shiloh Industries, Inc. and its consolidated subsidiaries. The Companys principal executive offices are located at Suite 202, 103 Foulk Road, Wilmington, Delaware 19803 and its telephone number is
(302) 656-1950. The Companys website is located at http://www.shiloh.com. On its website, you can obtain a copy of the annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to
those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act of 1934, as amended, as soon as reasonably practicable after the Company files such material electronically with, or furnish it to, the Securities and
Exchange Commission. A copy of these filings is available to all interested parties upon written request to Stephen E. Graham, at the Companys corporate offices.

The Company files annual, quarterly and special reports, proxy statements and other information with the Securities and Exchange Commission. You may read and copy any document the Company files with the Securities and
Exchange Commission at its Public Reference Room at 100 F Street, N.W., Washington D.C. 20549. You may obtain information about the operation of the SECs Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a
website that contains reports, proxy and information statements, and other information regarding registrants that file electronically with the SEC (http://www.sec.gov).

Shiloh is a full service manufacturer of first operation blanks, engineered welded blanks, complex stampings and modular assemblies for the automotive,
heavy truck and other industrial markets. In addition, Shiloh is a designer and engineer of precision tools and dies and welding and assembly equipment for use in its blanking, welded blank and stamping operations and for sale to original equipment
manufacturers (OEMs), Tier I automotive suppliers and other industrial customers. The Companys blanks, which are engineered two dimensional shapes cut from flat-rolled steel, are principally sold to automotive and truck OEMs and
are used for exterior steel components, such as fenders, hoods and doors. These blanks include first operation exposed and unexposed blanks and more advanced engineered welded blanks. Engineered welded blanks generally consist of two or more sheets
of steel of the same or different material grade, thickness or coating that are welded together utilizing both mash seam resistance and laser welding.

The Companys complex stampins and modular assemblies include components used in the structural and powertrain systems of a vehicle. Structural systems include body-in-white applications and structural underbody
modules. Powertrain systems consist of deep draw components, such as oil pans and transmission pans. Additionally, the Company provides a variety of intermediate steel processing services, such as oiling, leveling, cutting-to-length, slitting, edge
trimming of hot and cold-rolled steel coils and inventory control services for automotive and steel industry customers. The Company has fifteen wholly owned subsidiaries at locations in Ohio, Michigan, Georgia, Tennessee and Mexico.

The Company conducts its business and reports its information as one operating segment.

History

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, Shiloh Tool & Die Mfg. Company expanded into blanking and stamping operations in the early 1960s. In April
1993, Shiloh Industries, Inc. was organized as a Delaware corporation to serve as a holding company for its operating subsidiaries and, in July 1993, completed an initial public offering of its common stock, par value $0.01 per share (Common
Stock).



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In November 1999, the Company acquired the automotive division of MTD Products Inc (MTD
Automotive). MTD Holdings Inc (the parent of MTD Products Inc) is a significant stockholder of the Company.

Products and Manufacturing Processes

Revenues derived from the Companys products were as follows:



|                                                |  |                         |         |      |   |         |  |   |        
|----------------------------------------------- |  | ----------------------- | ------- | ---- | - | ------- |  | - | -------
|                                                |  | Years Ended October 31,
|                                                |  | 2007                    |         | 2006 |   | 2005   
|                                                |  | (dollars in thousands) 
|Complex stampings and modular assemblies        |  | $                       | 209,202 |      | $ | 222,947 |  | $ | 219,011
|Engineered welded blanks                        |  |                         | 238,938 |      |   | 229,450 |  |   | 247,642
|Blanking                                        |  |                         | 90,202  |      |   | 111,134 |  |   | 119,574
|Tools, dies, steel processing, scrap, and other |  |                         | 52,072  |      |   | 56,844  |  |   | 48,352 
|                                                |  |                         |         |      |   |         |  |   |        
|Total                                           |  | $                       | 590,414 |      | $ | 620,375 |  | $ | 634,579
|                                                |  |                         |         |      |   |         |  |   |        

The Companys complex stamping operations produce engineered stampings and modular
assemblies. 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 produces complex stamped parts using precision single stage, progressive, deep draw and
transfer dies, which the Company either designs and manufactures or sources from third parties. Some stamping operations also provide value-added processes such as welding, assembly and painting capabilities. The Companys complex stampings and
assemblies are principally used as components for body-in-white, powertrain, seat frames and other structural body components for automobiles.

The Company produces engineered welded blanks utilizing both the mash seam resistance and laser weld processes. The engineered welded blanks that are produced generally consist of two or more sheets of steel of the same or different
material grade, thickness or coating welded together into a single flat panel. The primary distinctions between mash seam resistance and laser welding are weld bead appearance and cost.

The Company produces steel blanks in its blanking 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. These blanks, which are used principally by manufacturers in the automobile, heavy truck, and lawn and garden industries, are used by the Companys automotive and heavy truck customers
for automobile exterior and structural components, including fenders, hoods, doors and side panels, and heavy truck wheel rims and brake components and by the Companys lawn and garden customers for lawn mower decks.

The Company also designs, engineers and produces precision tools and dies, and weld and secondary assembly equipment. To support the manufacturing
process, the Company supplies or sources from third parties the tools and dies used in the blanking and stamping operations and the welding and secondary assembly equipment used to manufacture modular systems. Advanced technology is maintained to
create products and processes that fulfill customers advanced product requirements. The Company has computerized most of the design and engineering portions of the tool and die production process to reduce production time and cost.

To a lesser extent, the Company provides the service of steel processing and processes flat-rolled steel principally for primary steel producers and
manufacturers that require processed steel for end-product manufacturing purposes. The Company also processes flat-rolled steel for internal blanking and stamping operations. The Company either purchases hot-rolled, cold-rolled or coated steel from
primary steel producers located throughout the Midwest or receives the steel on a toll-processing basis and does not acquire ownership of it. Cold-rolled and hot-rolled steel often go through additional processing operations to meet the requirements
of end-product manufacturers. The Companys additional processing operations include slitting, cutting-to-length, edge trimming, roller leveling and quality inspecting of flat-rolled steel.



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Slitting is the cutting of coiled steel to precise widths. Cutting-to-length produces steel cut to
specified lengths ranging from 12 inches to 168 inches. 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. To achieve high quality and productivity and to be responsive to customers just-in-time supply requirements, most of the Companys steel processing operations are computerized
and have combined several complementary processing lines, such as slitting and cutting-to-length at single facilities. In addition to cleaning, leveling and cutting steel, the Company inspects steel to detect mill production flaws and utilizes
computers to provide both visual displays and documented records of the thickness maintained throughout the entire coil of steel. The Company also performs inventory control services for some customers.

International Operation

The Companys
international operation, which is located in Mexico, is subject to various risks that are more likely to affect this operation than the Companys domestic operations. These include, among other things, exchange controls and currency
restrictions, currency fluctuations, changes in local economic conditions, unsettled political conditions and foreign government-sponsored boycotts of the Companys products or services for noncommercial reasons. The identifiable assets
associated with the Companys international operation are located where the Company believes the risks to be minimal.

Customers

The Company produces blanked and stamped parts and processed flat-rolled steel for a variety of industrial customers. The Company supplies steel blanks,
stampings and modular assemblies primarily to North American automotive manufacturers and stampings to Tier I automotive suppliers. The Company also supplies blanks and stampings to manufacturers in the lawn and garden and heavy duty truck and
trailer industries. Finally, the Company processes flat-rolled steel for a number of primary steel producers.

The Companys largest
customer is General Motors Corporation (General Motors). The Company has been working with General Motors for more than 20 years and operates a vendor-managed program to supply blanks, which program includes on-site support staff,
electronic data interchange, logistics support, a just-in-time delivery system and, over the past five years, supplying engineered welded blanks. As a result of the acquisition of MTD Automotive in November 1999, Ford Motor Company
(Ford) became another significant customer. The Company supplies Ford with blanks, deep draw stampings and modular assemblies. The Company also does business with Chrysler LLC (Chrysler), and sales to Chrysler grew to exceed
10% of consolidated revenues in fiscal 2004. The Company supplies Chrysler with engineered welded blanks, blanks, and deep draw stampings.

In fiscal 2007, General Motors accounted for approximately 40.4% of the Companys revenues. No other individual customer accounted for more than 10% of the Companys revenues in fiscal 2007.

Sales and Marketing

The Company operates a sales and
technical center in Canton, Michigan, which center is in close proximity to certain of its automotive customers. The sales and marketing organization is structured to efficiently service all of the Companys key customers and directly market
the Companys automotive and steel processing products and services. The sales force is organized to enable the Company to target sales and marketing efforts at three distinct types of customers, which include OEM customers, Tier I suppliers
and steel consumers and producers.

The Companys engineering staff at the Canton location provides total program management,
technical assistance and advanced product development support to customers during the product development stage of new vehicle design.



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Operations and Engineering

The Company operates ten manufacturing facilities in the United States and one manufacturing facility in Mexico, along with two technical centers in Canton, Michigan and Valley City, Ohio that coordinate advanced
product and process development and applications with its customers and its manufacturing facilities. The Companys manufacturing facilities and technical centers are strategically located close to its customers engineering organizations
and fabricating-assembly plants. Each facility of the Company is focused on meeting the business strategy of the Company by optimizing its performance in quality, cost and delivery.

Raw Materials

The basic materials required for the Companys operations are hot-rolled,
cold-rolled and coated steel. The Company obtains steel from a number of primary steel producers and steel service centers. The majority of the steel is purchased through customers steel buying programs. Under these programs, the Company
purchases steel at the steel price that its customers negotiated with the steel suppliers. Although the Company takes ownership of the steel, the customers are responsible for all steel price fluctuations. Most of the steel owned by the Company is
purchased domestically. A portion of the steel processing products and services is provided to customers on a toll processing basis. Under these arrangements, the Company charges a specified fee for operations performed 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 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.

Competition

Competition for sales of steel blanks and stampings is intense, coming from numerous companies, including independent domestic and international
suppliers, and from internal divisions of General Motors, Ford and Chrysler, as well as independent domestic and international Tier I and Tier II suppliers, some of which have blanking facilities. Competition for sales of automotive stamping and
assemblies is also intense. Primary competitors in North America for the engineered stamping and assemblies business are Narmco Group, Midwest Stamping and Manufacturing Company, Ogihara America Corporation, Gestamp North America Inc. and Midway
Products Group. The significant areas of competition with these companies are price, product quality, delivery and engineering capabilities. Competitors for engineered welded blanks include Noble International, Ltd., TWB Co., LLC, Powerlaser Ltd.,
Procoil Corp. and L&W Engineering. The significant areas of competition with these companies are product quality, price, delivery, location and engineering capabilities.

Employees

As of November 30, 2007, the Company had approximately 1,770 employees. An aggregate
of approximately 270 employees at three of the Companys subsidiaries are covered by three collective bargaining agreements that are due to expire in August 2008, June 2011 and November 2012.

Backlog

A significant portion of the Companys
business pertains to automobile platforms for various model years. Orders against these platforms are subject to releases by the customer and are not considered technically firm. Backlog, therefore, 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 lower overall automobile production during November and December. 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 plant shutdowns and new model changeovers of production lines.



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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 and hazardous
materials.

The Company is also subject to laws and regulations that can require the remediation of contamination that exists at current or
former facilities. In addition, the Company is 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 its production facilities are 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.

MTD Automotive, at its facilities in Parma and Valley City, Ohio, has engaged in industrial manufacturing operations since 1946 and 1968, respectively, during which time various hazardous substances have been handled at each facility. As a
consequence of these historic operations, the potential for liability relating to contamination of soil and groundwater may exist at the Parma facility, which the Company leases from MTD Products Inc, and the Valley City facility, which the Company
owns. Although the Company could be liable for cleanup costs at these facilities, MTD Products Inc, a subsidiary of MTD Holdings Inc, is contractually obligated to indemnify the Company against any such costs arising as a result of operations prior
to the Companys acquisition of the MTD Automotive business.

ISO 14001 is a voluntary international standard issued in September 1996
by the International Organization for Standardization. ISO 14001 identifies the elements of an Environmental Management System (EMS) necessary for an organization to effectively manage its impact on the environment. The ultimate
objective of the standard is to integrate the EMS with overall business management processes and systems so that environmental considerations are a routine part of business decisions. As of October 31, 2003, all of the Companys facilities
were ISO 14001 certified. The Company has completed the certification process at each of its ten manufacturing facilities for the latest and highest international quality standard for the automotive industry, ISO/TS 16949:2002. The Company believes
this certification will be a market requirement for doing business in the future in the automotive industry.

Segment and Geographic Information

The Company conducts its business and reports its information as one operating segmentAutomotive Products. The Chief Executive
Officer of the Company has been identified as the chief operating decision maker because he has final authority over performance assessment and resource allocation decisions. In determining that one operating segment is appropriate, the Company
considered the nature of the business activities, the existence of managers responsible for the operating activities and information presented to the Board of Directors for its consideration and advice. Furthermore, the Company is a full service
manufacturer of first operation blanks, engineered welded blanks, complex stampings and modular assemblies predominately for the automotive and heavy truck markets. Customers and suppliers are substantially the same among operations, and all
processes entail the acquisition of steel and the processing of the steel for use in the automotive industry.

Revenues from the
Companys foreign subsidiary in Mexico were $10.8 million, $19.3 million and $37.9 million and for fiscal years 2007, 2006 and 2005, respectively. These revenues represent 2% of total revenues for fiscal 2007, 3% of total revenue for fiscal
year 2006 and 6% of total revenue for fiscal year 2005. Long-lived assets consist primarily of net property, plant and equipment. Long-lived assets of the Companys foreign subsidiary totaled $17.4 million, $18.7 million and $19.1 million at
October 31, 2007, 2006 and 2005, respectively. The consolidated long-lived assets of the Company totaled $200.9 million, $223.8 million and $244.6 million at October 31, 2007, 2006 and 2005, respectively.



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|Item 1A. | Risk Factors
|-------- | ------------

Investors should carefully consider
the risks described below. In addition, the risks described below are not the only ones facing the Company. Only the risks that the Company considers to be the most material have been described. However, there may be additional risks that are viewed
by the Company as not material at the present time or that are not presently known. Conditions could change in the future, or new information may come to the Companys attention that could impact the assessment of these risks.

If any of the events described below were to occur, the Companys business, prospects, financial condition and/or results of operations could be
materially adversely affected. Items below are described as items that could potentially have a material adverse effect on the Company meaning that it could or will have one or more of these effects. In any such case, the price of the Companys
common stock could decline, and an investor could lose all or part of their investment in the Company.

Because a significant portion of the
Companys sales is to the automotive industry, a decrease in the demand in this industry or the loss of any major customers in this industry could adversely affect the Companys financial health.

Demand for the Companys products is affected by, among other things, the relative strength or weakness of the automotive industry. The automotive
industry is highly cyclical and may be adversely affected by international competition. In addition, the automotive industry is significantly unionized and subject to work slowdowns and stoppages resulting from labor disputes. In fiscal 2007,
General Motors accounted for approximately 40.4% of the Companys revenues and overall automotive industry sales were 80.9%. The loss of a portion of business to any major customers could have a material adverse effect on the Companys
financial condition, cash flow and results of operations. The Company cannot offer assurance that it will maintain or improve relationships in the industry or that it will continue to supply customers at current levels.

The automotive market that the Company serves is highly competitive, which could limit the volume of products that the Company sells and reduce operating margins.

The Companys products are sold in the highly competitive automotive market. The Company believes that the principal points of
competition in this market are product quality and price, design and engineering capabilities, product development, conformity to customer specifications, reliability and timeliness of delivery, customer service and effectiveness of distribution.
Maintaining and improving competitive position will require continued investment by the Company in manufacturing, engineering, quality standards, marketing, customer service and support of our distribution networks. The Company may have insufficient
resources in the future to continue to make such investments and, even if such investments are made, the Company may not be able to maintain or improve its competitive position. The Company also faces the risk of lower-cost foreign manufacturers
competing in the markets for its products and the Company may be driven as a consequence of this competition to increase foreign investment. Making foreign investments can be highly complicated and the Company may not always realize the advantages
that are anticipated from any such investments. Competitive pressure may limit the volume of products that the Company sells and reduce operating margins.

The Company may encounter difficulty in expanding the business through targeted acquisitions.

The Company may pursue
targeted acquisition opportunities that it believes would complement its business. Assurances cannot be offered that the Company will be successful in consummating any acquisitions. Any targeted acquisitions will be accompanied by the risks commonly
encountered in acquisitions of businesses. The Company may not successfully overcome these risks or any other problems encountered in connection with any acquisitions, including the possible inability to integrate an acquired business
operations, information technologies, services and products into the Companys business, diversion of managements attention, the assumption of unknown liabilities, increases in indebtedness, the failure to achieve the strategic objectives
of those acquisitions and other unanticipated problems, some or all of which could materially and adversely affect the Company. The process of integrating operations could cause an interruption of, or loss of momentum in,



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##### Table of Contents

business activities. Any delays or difficulties encountered in connection with any acquisition and the integration of operations could have a material
adverse effect on results of operations, financial condition or prospects of the Companys business.

Operating problems in the Companys
business may materially adversely affect the Companys financial condition and results of operations.

The occurrence of material
operating problems at the Companys facilities may have a material adverse effect on operations as a whole, both during and after the period of operational difficulties. The Company is subject to the usual hazards associated with manufacturing
and the related storage and transportation of raw materials, products and waste, including explosions, fires, leaks, discharges, inclement weather, natural disasters, mechanical failure, unscheduled downtime and transportation interruption or
calamities.

The Company depends on the services of key individuals and relationships, the loss of which would cause material harm.

The Companys success will depend, in part, on the efforts of senior management, including the Chief Executive Officer. The Companys future
success will also depend on, among other factors, the ability to attract and retain other qualified personnel. The loss of the services of any key employees or the failure to attract or retain employees could have a material adverse effect.

Restrictions in the Companys credit facility limit the ability to take certain actions and breaches thereof could impair liquidity.

The Companys credit facility requires compliance with financial covenants relating to, among other things, interest coverage,
fixed charges (which includes capital expenditures and capital distributions) and leverage. The Company may not be able to satisfy these covenants in the future or be able to pursue strategies within the constraints of these covenants. Substantially
all of the Companys assets and the assets of domestic subsidiaries are pledged as collateral pursuant to the terms of the credit facility. A breach of a covenant contained in the debt instruments could result in an event of default under one
or more debt instruments, accounts receivable facility and lease financing arrangements. Such breaches would permit the lenders under the credit facility to declare all amounts borrowed thereunder to be due and payable, and the commitments of such
lenders to make further extensions of credit could be terminated. Each of these circumstances could materially and adversely impair the Companys liquidity.



|Item 1B. | Unresolved Staff Comments
|-------- | -------------------------

None.



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##### Table of Contents

|Item 2. | Properties
|------- | ----------

The Company is a Delaware holding
company that has fifteen wholly owned subsidiaries located in Ohio, Michigan, Georgia, Tennessee and Mexico. The Company believes substantially all of its property and equipment is in good condition and that it has sufficient capacity to meet its
current operational needs. The Companys facilities, all of which are owned (except for its Parma, Ohio manufacturing facility and its Troy, Michigan technical center), are as follows:



|                                                        |  |                         |  |                      |  |                |     |  |               |  |                                                                                                                 
|------------------------------------------------------- |  | ----------------------- |  | -------------------- |  | -------------- | --- |  | ------------- |  | ----------------------------------------------------------------------------------------------------------------
|Subsidiary                                              |  | Facility Name           |  | Location             |  | Square Footage |     |  | Year Occupied |  | Description of Use                                                                                              
|Shiloh Corporation                                      |  | Mansfield Blanking      |  | Mansfield, Ohio      |  | 295,000        |     |  | 1955          |  | Blanking/Tool and Die Production                                                                                
|                                                        |  |                         |  |                      | 
|Medina Blanking, Inc.                                   |  | Medina Blanking         |  | Valley City, Ohio    |  | 255,000        |     |  | 1986          |  | Blanking/Engineered Welded Blanks/Engineering and Development                                                   
|                                                        |  |                         |  |                      | 
|Medina Blanking, Inc.                                   |  | Ohio Welded Blank       |  | Valley City, Ohio    |  | 254,000        |     |  | 2000          |  | Engineered Welded Blanks                                                                                        
|                                                        |  |                         |  |                      | 
|VCS Properties, LLC                                     |  |                         |  | Valley City, Ohio    |  | 260,000        |     |  | 1977          |  | Real Estate Leasing                                                                                             
|                                                        |  |                         |  |                      | 
|Liverpool Coil Processing, Incorporated                 |  | LCPI                    |  | Valley City, Ohio    |  | 244,000        |     |  | 1990          |  | Other Steel Processing/ Administration                                                                          
|                                                        |  |                         |  |                      | 
|Shiloh Automotive, Inc.                                 |  | Liverpool Manufacturing |  | Valley City, Ohio    |  | 250,000        |     |  | 1999          |  | Complex Stamping and Modular Assembly                                                                           
|                                                        |  |                         |  |                      | 
|Shiloh Automotive, Inc.                                 |  | Cleveland Manufacturing |  | Parma, Ohio          |  | 342,000        | (1) |  | 1999          |  | Complex Stamping and Modular Assembly/ Administration                                                           
|                                                        |  |                         |  |                      | 
|Sectional Stamping, Inc.                                |  | Wellington Stamping     |  | Wellington, Ohio     |  | 235,000        |     |  | 1987          |  | Complex Stamping and Modular Assembly                                                                           
|                                                        |  |                         |  |                      | 
|Greenfield Die & Manufacturing Corp.                    |  | Canton Manufacturing    |  | Canton, Michigan     |  | 170,000        |     |  | 1996          |  | Engineered Welded Blanks/Complex Stamping and Modular Assembly/ Sales and Marketing/ Engineering and Development
|                                                        |  |                         |  |                      | 
|Greenfield Die & Manufacturing Corp.                    |  | Troy Technical Center   |  | Troy, Michigan       |  | 1,900          | (2) |  | 2005          |  | Sales and Marketing/ Engineering and Development                                                                
|                                                        |  |                         |  |                      | 
|Jefferson Blanking Inc.                                 |  | Jefferson Blanking      |  | Pendergrass, Georgia |  | 185,500        |     |  | 1998          |  | Blanking/Engineered Welded Blanks                                                                               
|                                                        |  |                         |  |                      | 
|Shiloh Industries, Inc., Dickson Manufacturing Division |  | Dickson Manufacturing   |  | Dickson, Tennessee   |  | 242,000        |     |  | 2000          |  | Complex Stamping and Modular Assembly                                                                           
|                                                        |  |                         |  |                      | 
|Shiloh de Mexico S. A. de C.V.                          |  | Saltillo Welded Blank   |  | Saltillo, Mexico     |  | 153,000        |     |  | 2000          |  | Engineered Welded Blanks/Complex Stamping and Modular Assembly                                                  

---

|(1) | The Parma facility, which is leased to the Company by MTD Products Inc, has been closed.
|--- | ----------------------------------------------------------------------------------------

|(2) | The Troy Technical Center is leased to the Company.
|--- | ---------------------------------------------------



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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, results of operations or cash flows.



|Item 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

No matter was submitted to a vote of security holders during the fourth quarter of fiscal 2007.

Executive Officers of the Registrant

The following information is furnished pursuant to Instruction 3 to
Item 401(b) of Regulation S-K.

Curtis E. Moll, Chairman of the Board.    Mr. Moll became Chairman of the
Board of the Company in April 1999, and he has served as a Director of the Company since its formation in April 1993. Since 1980, Mr. Moll has served as the Chairman of the Board and Chief Executive Officer of MTD Holdings Inc (formerly MTD
Products Inc), a privately held manufacturer of outdoor equipment. Mr. Moll also serves as a director of Sherwin Williams Company and AGCO Corporation. Mr. Moll is 68 years old.

Theodore K. Zampetis, President and Chief Executive Officer.    In January 2002, Mr. Zampetis became the President and
Chief Executive Officer of the Company. He has served as a director of the Company since 1993. Mr. Zampetis is 62 years old.

Stephen E. Graham, Chief Financial Officer.    Mr. Graham was named Chief Financial Officer in October 2001. Mr. Graham is 50 years old.

James F. Keys, Senior Vice President of Advanced Technology/Sales and Marketing.    Mr. Keys was named Senior Vice President
of Advanced Technology/Sales and Marketing in May 2002. Mr. Keys is 54 years old.

Anthony M. Parente, Vice President,
Manufacturing Operations.     Mr. Parente was named Vice President of Manufacturing Operations in October 2006. He started his career at MTD Automotive as an electrical apprentice in 1979 and joined the Company
through its acquisition of MTD Automotive in 1999. He progressed effectively through different technical assignments. He was appointed Plant Manager of the Ohio Welded Blank Plant in 2001, and was promoted to the position of Group General Manager
three years later. Mr. Parente is 46 years old.



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PART II



|Item 5. | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|------- | ------------------------------------------------------------------------------------------------------------

The Companys Common Stock is traded on the Nasdaq Global Market under the symbol SHLO. On December 14, 2007, the closing price for
the Companys Common Stock was $9.40 per share.

The Companys Common Stock commenced trading on the Nasdaq National Market on
June 29, 1993. The table below sets forth the high and low bid prices for the Companys Common Stock for its four quarters in each of 2007 and 2006.



|        |  |      |       |      |   |       |  |     |       |  |   |      
|------- |  | ---- | ----- | ---- | - | ----- |  | --- | ----- |  | - | -----
|        |  | 2007 |       | 2006
|Quarter |  | High |       | Low  |   | High  |  | Low
|1st     |  | $    | 19.26 |      | $ | 13.08 |  | $   | 15.25 |  | $ | 12.34
|2nd     |  | $    | 14.77 |      | $ | 8.62  |  | $   | 20.27 |  | $ | 14.12
|3rd     |  | $    | 14.93 |      | $ | 8.64  |  | $   | 20.95 |  | $ | 14.59
|4th     |  | $    | 12.68 |      | $ | 9.51  |  | $   | 17.13 |  | $ | 13.06

As of the close of business on December 14, 2007, there were 103 stockholders of record for
the Companys Common Stock. The Company believes that the actual number of stockholders of the Companys Common Stock exceeds 400. The Company did not repurchase any of the Companys equity securities during fiscal 2007.

On December 20, 2006 the Board of Directors of the Company declared a special dividend in the amount of $2.50 per share payable on
January 19, 2007 to the shareholders of record as of January 5, 2007. Prior to this special dividend, the Company had not declared or paid any cash dividends on its Common Stock since its incorporation in April 1993. After payment of the
special dividend the Company intends to retain earnings and does not anticipate paying Common Stock dividends in the foreseeable future.

Please see Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters for securities authorized for issuance under equity compensation plans.



12



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##### Table of Contents

|Item 6. | Selected Financial Data
|------- | -----------------------

The following table sets
forth selected consolidated financial data of the Company. The data for each of the five years in the period ended October 31, 2007 are derived from the audited consolidated financial statements of the Company. The data presented below should
be read in conjunction with Managements Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and the notes thereto included elsewhere in this Annual Report.



|                                                         |  |                         |         |      |   |         |  |      |         |      |   |         |  |   |         |  
|-------------------------------------------------------- |  | ----------------------- | ------- | ---- | - | ------- |  | ---- | ------- | ---- | - | ------- |  | - | ------- | -
|                                                         |  | Years Ended October 31, |        
|(Amounts in thousands, except per share)                 |  | 2007                    |         | 2006 |   | 2005    |  | 2004 |         | 2003 |  
|STATEMENT OF OPERATIONS DATA:                            |  |                         |         |      |   |         |  |      |         |      |   |         |  |   |         |  
|Revenues                                                 |  | $                       | 590,414 |      | $ | 620,375 |  | $    | 634,579 |      | $ | 638,501 |  | $ | 584,298 |  
|                                                         |  |                         |         |      |   |         |  |      |         |      |   |         |  |   |         |  
|Operating income                                         |  | $                       | 24,129  |      | $ | 15,891  |  | $    | 42,673  |      | $ | 39,664  |  | $ | 21,345  |  
|                                                         |  |                         |         |      |   |         |  |      |         |      |   |         |  |   |         |  
|Income before cumulative effect of accounting change     |  | $                       | 9,550   |      | $ | 7,118   |  | $    | 26,752  |      | $ | 18,759  |  | $ | 5,576   |  
|Cumulative effect of accounting change                   |  |                         |        |      |   |        |  |      |        |      |   |        |  |   | (1,963  | )
|                                                         |  |                         |         |      |   |         |  |      |         |      |   |         |  |   |         |  
|Net income                                               |  | $                       | 9,550   |      | $ | 7,118   |  | $    | 26,752  |      | $ | 18,759  |  | $ | 3,613   |  
|                                                         |  |                         |         |      |   |         |  |      |         |      |   |         |  |   |         |  
|EARNINGS PER SHARE:                                      |  |                         |         |      |   |         |  |      |         |      |   |         |  |   |         |  
|Basic earnings per share:                                |  |                         |         |      |   |         |  |      |         |      |   |         |  |   |         |  
|Net income before cumulative effect of accounting change |  | $                       | 0.58    |      | $ | 0.44    |  | $    | 1.69    |      | $ | 1.18    |  | $ | 0.35    |  
|Cumulative effect of accounting change                   |  |                         |        |      |   |        |  |      |        |      |   |        |  |   | (0.13   | )
|                                                         |  |                         |         |      |   |         |  |      |         |      |   |         |  |   |         |  
|Net income                                               |  | $                       | 0.58    |      | $ | 0.44    |  | $    | 1.69    |      | $ | 1.18    |  | $ | 0.22    |  
|                                                         |  |                         |         |      |   |         |  |      |         |      |   |         |  |   |         |  
|Basic weighted average number of common shares           |  |                         | 16,348  |      |   | 16,078  |  |      | 15,915  |      |   | 15,646  |  |   | 15,246  |  
|Diluted earnings per share:                              |  |                         |         |      |   |         |  |      |         |      |   |         |  |   |         |  
|Net income before cumulative effect of accounting change |  | $                       | 0.58    |      | $ | 0.43    |  | $    | 1.64    |      | $ | 1.15    |  | $ | 0.35    |  
|Cumulative effect of accounting change                   |  |                         |        |      |   |        |  |      |        |      |   |        |  |   | (0.13   | )
|                                                         |  |                         |         |      |   |         |  |      |         |      |   |         |  |   |         |  
|Net income                                               |  | $                       | 0.58    |      | $ | 0.43    |  | $    | 1.64    |      | $ | 1.15    |  | $ | 0.22    |  
|                                                         |  |                         |         |      |   |         |  |      |         |      |   |         |  |   |         |  
|Diluted weighted average number of common shares         |  |                         | 16,481  |      |   | 16,429  |  |      | 16,421  |      |   | 16,156  |  |   | 15,482  |  
|OTHER DATA:                                              |  |                         |         |      |   |         |  |      |         |      |   |         |  |   |         |  
|Capital expenditures                                     |  | $                       | 9,262   |      | $ | 19,361  |  | $    | 22,394  |      | $ | 13,945  |  | $ | 22,123  |  
|Depreciation, amortization and asset impairment charges  |  |                         | 32,010  |      |   | 37,503  |  |      | 35,119  |      |   | 33,137  |  |   | 29,590  |  
|BALANCE SHEET DATA (as of period end):                   |  |                         |         |      |   |         |  |      |         |      |   |         |  |   |         |  
|Working capital (deficit)                                |  | $                       | 21,015  |      | $ | 35,019  |  | $    | 26,392  |      | $ | 1,448   |  | $ | (13,657 | )
|Total assets                                             |  |                         | 341,110 |      |   | 383,035 |  |      | 394,793 |      |   | 399,181 |  |   | 389,205 |  
|Total long-term debt                                     |  |                         | 64,563  |      |   | 72,179  |  |      | 92,384  |      |   | 100,329 |  |   | 137,838 |  
|Other long-term obligations                              |  |                         | 22,044  |      |   | 24,651  |  |      | 28,282  |      |   | 30,803  |  |   | 14,999  |  
|Stockholders equity                                     |  |                         | 135,263 |      |   | 162,016 |  |      | 150,334 |      |   | 129,561 |  |   | 111,155 |  



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|Item 7. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

(Dollar amounts in thousands)

Sustainable Business Model

The following narrative, which includes, among other things, a description of the results of operations of the Company for fiscal 2007 compared to fiscal
2006 and fiscal 2006 compared to fiscal 2005, reports significant variations and improvements in the Companys results since 2002 and prior, except for several unusual events in fiscal 2006 related to asset impairment, restructuring, and
resolution of several contingencies. These results are the outcome of instituting a new sustainable business model for the Company built upon the concepts of process characterization and process optimization throughout the organization. Process
characterization is based on self-analysis of the business processes of the Company by the process owners, who are the people in the organization responsible for the success or failure of that process. Process optimization represents the response to
seeking a way to perform a business process in a more productive or efficient manner. Logically applying these steps requires establishing priorities in order that the most serious and rewarding issues are addressed sooner rather than later.
Examples of the application of the concepts of process characterization and process optimization include identifying and overcoming causes of equipment downtime, reducing die changeover time, coil yield analysis, and obstacles to the accurate
transmission of electronic data interchange.

The objective of instituting these concepts was to stabilize the Company and to achieve
quality and productivity improvements in all processes of the Companys business, including plant operations and administrative functions. Since inception of the new business model in mid-year of fiscal 2002, the Company has been exiting
unprofitable and non-strategic businesses and products and has achieved manufacturing cost reductions, launched new products, improved gross margins and reduced administrative costs. These efforts have led to improved working capital management and
reduced cash requirements as well as contributed to positive cash generation and debt reduction.

During fiscal 2003, once stabilized, the
Company began the process of renewal, capitalizing on its key capabilities. This phase continued throughout 2004. Fiscal 2005 began with the renewal phase continuing and leading to an emphasis on profitable growth during 2005 and beyond. The
application of the Companys sustainable business model continued to be the focus of the Companys management for fiscal 2007. As noted below under Forward-Looking Statements, the future success of the Company depends upon,
among other factors, continuing to successfully institute this strategic initiative.

General

The Company is a supplier of numerous parts to both automobile OEMs and, as a Tier II supplier, to Tier I automotive part manufacturers who in turn supply
OEMs. The parts that the Company produces supply many models of vehicles manufactured by nearly all vehicle manufacturers that produce vehicles in North America. As a result, the Companys revenues are very dependent upon the North American
production of automobiles and light trucks, particularly traditional domestic manufacturers, such as General Motors, Chrysler and Ford. According to industry statistics, traditional domestic manufacturer production for fiscal 2007 declined by 5.9%
and total North American car and light truck production for fiscal 2007 declined 2.1% from the production of fiscal 2006.

Another
significant factor affecting the Companys revenues is the Companys ability to successfully bid on the production and supply of parts for models that will be newly introduced to the market by the Companys customers. These new model
introductions typically go through a start of production phase with build levels that are higher than normal because the consumer supply network is filled to ensure adequate supply to the market, resulting in an increase in the Companys
revenues at the beginning of the cycle.

Plant utilization levels are very important to profitability because of the capital-intensive
nature of these operations. At October 31, 2007, the Companys facilities were operating at approximately 52.5% capacity. The



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Company defines capacity as 20 working hours per day and five days per week. Utilization of capacity is dependent upon the releases against customer purchase
orders that are used to establish production schedules and manpower and equipment requirements for each month and quarterly period of the fiscal year.

The majority of the Companys stamping and engineered welded blank operations purchase steel through the customers steel programs. Under these programs, the Company pays the steel suppliers and passes on to
the customers the steel price the customers negotiated with the steel suppliers. Although the Company takes ownership of the steel, the customers are responsible for all steel price fluctuations. The Company also purchases steel directly from
domestic primary steel producers and steel service centers. Domestic steel pricing has generally been increasing recently for several reasons, including consolidation of supply, capacity restraints, higher raw material costs and the fluctuations of
the U.S. dollar in relation to foreign currencies. Finally, the Company blanks and processes steel for some of its customers on a toll processing basis. Under these arrangements, the Company charges a tolling fee for the operations that it performs
without acquiring ownership of the steel and being burdened with the attendant costs of ownership and risk of loss. Toll processing operations result in lower revenues but higher gross margins than operations where the Company takes ownership of the
steel. Revenues from operations involving directly owned steel include a component of raw material cost whereas toll processing revenues do not.

Changes in the price of scrap steel can have a significant effect on the Companys results of operations because substantially all of its operations generate engineered scrap steel. Engineered scrap steel is a planned by-product of the
Companys processing operations, and proceeds from the disposition of scrap steel contribute to gross margin by offsetting the increases in the cost of steel and the attendant costs of quality and availability. Changes in the price of steel
impact the Companys results of operations because raw material costs are by far the largest component of cost of sales in processing directly owned steel. The Company actively manages its exposure to changes in the price of steel, and, in most
instances, passes along the rising price of steel to its customers.

Critical Accounting Policies

Preparation of the Companys financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company believes its estimates and assumptions are reasonable; however, actual results and
the timing of the recognition of such amounts could differ from those estimates. The Company has identified the items that follow as critical accounting policies and estimates utilized by management in the preparation of the Companys financial
statements. These estimates were selected because of inherent imprecision that may result from applying judgment to the estimation process. The expenses and accrued liabilities or allowances related to these policies are initially based on the
Companys best estimates at the time they are recorded. Adjustments are charged or credited to income and the related balance sheet account when actual experience differs from the expected experience underlying the estimates. The Company makes
frequent comparisons of actual experience and expected experience in order to mitigate the likelihood that material adjustments will be required.

Revenue Recognition.    In accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 104, the Company recognizes revenue when there is evidence of a sales agreement, the delivery of
goods has occurred, the sales price is fixed or determinable and collectibility of revenue is reasonably assured. The Company records revenues upon shipment of product to customers and transfer of title under standard commercial terms. Price
adjustments are recognized in the period when management believes that such amounts become probable, based on managements estimates.

Allowance for Doubtful Accounts.    The Company evaluates the collectibility of accounts receivable based on several factors. In circumstances where the Company is aware of a specific customers inability to
meet its financial obligations, a specific allowance for doubtful accounts is recorded against amounts due to reduce the



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net recognized receivable to the amount the Company reasonably believes will be collected. Additionally, the allowance for doubtful accounts is estimated
based on historical experience of write-offs and the current financial condition of customers. The financial condition of the Companys customers is dependent on, among other things, the general economic environment, which may substantially
change, thereby affecting the recoverability of amounts due to the Company from its customers.

Inventory
Reserves.    Inventories are valued at the lower of cost or market. Cost is determined on the first-in, first-out basis. Where appropriate, standard cost systems are used to determine cost and the standards are adjusted as
necessary to ensure they approximate actual costs. Estimates of lower of cost or market value of inventory are based upon current economic conditions, historical sales quantities and patterns, and in some cases, the specific risk of loss on
specifically identified inventories.

The Company values inventories on a regular basis to identify inventories on hand that may be
obsolete or in excess of current future projected market demand. For inventory deemed to be obsolete, the Company provides a reserve for the full value of the inventory, net of estimated realizable value. Inventory that is in excess of current and
projected use is reduced by an allowance to a level that approximates future demand. Additional inventory reserves may be required if actual market conditions differ from managements expectations.

Deferred Tax Assets.    Deferred taxes are recognized at currently enacted tax rates for temporary differences between the
financial reporting and income tax bases of assets and liabilities and operating loss and tax credit carryforwards. In assessing the realizability of deferred tax assets, the Company established a valuation allowance to record its deferred tax
assets at an amount that is more likely than not to be realized. While future projections for taxable income and ongoing prudent and feasible tax planning strategies have been considered in assessing the need for the valuation allowance, in the
event the Company were to determine that it would be able to realize its deferred tax assets in the future in excess of their recorded amount, an adjustment to the deferred tax assets would increase income in the period such determination was made.
Likewise, should the Company determine that it would not be able to realize all or part of its net deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to income in the period such determination was made.

Impairment of Long-lived Assets.    The Companys long-lived assets primarily include property, plant and
equipment. If an indicator of impairment exists for certain groups of property, plant and equipment, the Company will compare the forecasted undiscounted cash flows attributable to the assets to their carrying value. If the carrying values exceed
the undiscounted cash flows, the Company then determines the fair values of the assets. If the carrying value exceeds the fair value of the assets, then an impairment charge is recognized for the difference.

The Company cannot predict the occurrence of future impairment-triggering events. Such events may include, but are not limited to, significant industry
or economic trends and strategic decisions made in response to changes in the economic and competitive conditions impacting the Companys business. The Company has committed to cease operation of the Cleveland Stamping facility. As a result,
the Company recorded an impairment charge related to the long-lived assets of the Companys Cleveland Stamping facility. See Note 2 to the consolidated financial statements for a discussion of impairment charges recorded in fiscal 2007 and
2006.

Group Insurance and Workers Compensation Accruals.    The Company is self-insured for group
insurance and workers compensation and reviews these accruals on a monthly basis to adjust the balances as determined necessary. The Company reviews claims data and lag analysis as the primary indicators of the accruals. Additionally, the
Company reviews specific large insurance claims to determine whether there is a need for additional accrual on a case-by-case basis. Changes in the claim lag periods and the specific occurrences could materially impact the required accrual balance
period-to-period.

Pension and Other Post-retirement Costs and Liabilities.    The Company has recorded
significant pension and other post-retirement benefit liabilities that are developed from actuarial valuations. The determination of the Companys pension liabilities requires key assumptions regarding discount rates used to determine the
present



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value of future benefit payments and the expected return on plan assets. The discount rate is also significant to the development of other post-retirement
liabilities. The Company determines these assumptions in consultation with, and after input from, its actuaries.

The discount rate
reflects the estimated rate at which the pension and other post-retirement liabilities could be settled at the end of the year. When determining the discount rate, the Company considers the most recent available interest rates on Moodys Aa
Corporate bonds with maturities of at least twenty years as of year-end. Based upon this analysis, the Company increased the discount rate used to measure its pension and post-retirement liabilities to 6.00% at October 31, 2007 from 5.77% at
October 31, 2006. A change of 25 basis points in the discount rate would increase or decrease expense on an annual basis by approximately $107.

The assumed long-term rate of return on pension assets is applied to the market value of plan assets to derive a reduction to pension expense that approximates the expected average rate of asset investment return over
ten or more years. A decrease in the expected long-term rate of return will increase pension expense whereas an increase in the expected long-term rate will reduce pension expense. Decreases in the level of plan assets will serve to increase the
amount of pension expense whereas increases in the level of actual plan assets will serve to decrease the amount of pension expense. Any shortfall in the actual return on plan assets from the expected return will increase pension expense in future
years due to the amortization of the shortfall, whereas any excess in the actual return on plan assets from the expected return will reduce pension expense in future periods due to the amortization of the excess. A change of 25 basis points in the
assumed rate of return on pension assets would increase or decrease pension assets by approximately $155.

The Companys investment
policy for assets of the plans is to maintain an allocation generally of 40% to 60% in equity securities, 40% to 60% in debt securities, and 0% to 10% in real estate. Equity security investments are structured to achieve an equal balance between
growth and value stocks. The Company determines the annual rate of return on pension assets by first analyzing the composition of its asset portfolio. Historical rates of return are applied to the portfolio. The Companys investment advisors
and actuaries review this computed rate of return. Industry comparables and other outside guidance are also considered in the annual selection of the expected rates of return on pension assets.

For the twelve months ended October 31, 2007, the actual return on pension plans assets for all of the Companys plans approximated 13.6%
to 15.2%, which was a higher rate of return than the 7.25% to 7.50% expected rates of return on plan assets used to derive pension expense.

If the amount of the accumulated benefit obligation in excess of the fair value of plan assets is large enough, the Company may be required, by law to make additional contributions to the pension plans. Actual results that differ from these
estimates may result in more or less future Company funding into the pension plans than is planned by management.

Results of Operations

Year Ended October 31, 2007 Compared to Year Ended October 31, 2006

Revenues.    Sales for fiscal 2007 were $590,414, a decrease of $29,961, or 4.8% from fiscal 2006 sales of $620,375. The sales decrease since fiscal 2006 reflects the overall reduction in
North American car and light truck production that has occurred primarily during the second and third quarters of fiscal 2007 and a reduction in heavy truck and lawn and garden equipment demand experienced in fiscal 2007. The sales decrease also
reflects the closure of the Companys Cleveland Stamping facility, where production of parts for two major customers concluded during the first and second quarters of fiscal 2007. According to industry statistics, North American car and light
truck production for fiscal 2007 was 2.1% below the production levels of fiscal 2006. For the traditional domestic manufacturers, the Companys largest customers through direct sales or sales to Tier I suppliers, the production of cars and
light trucks in fiscal 2007 was 5.9% below the production levels of fiscal 2006.



17



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Gross Profit.Gross profit for fiscal 2007 was $57,167, a decrease of
$1,090 from the gross profit of fiscal 2006 of $58,257. As a percentage of sales, gross profit in fiscal 2007 was 9.7% compared to 9.4% in fiscal 2006. Gross profit for fiscal 2007 declined on the lower volume of sales in fiscal 2007 compared to
fiscal 2006. The effect on gross profit of the reduced fiscal 2007 sales volume was approximately $8,400. Gross profit was also adversely affected by the increased material content in the products produced and sold during fiscal 2007 compared to the
prior fiscal year. The effect of greater material content on gross profit was a decrease of approximately $5,000. Gross profit was further reduced by less recovery of engineered scrap in fiscal 2007 compared to fiscal 2006, the effect of which was a
reduction in gross profit of approximately $4,400. These negative factors were offset by reduced manufacturing expenses of approximately $16,700 in fiscal 2007 compared to fiscal 2006. Personnel and personnel related expenses decreased approximately
$9,100, manufacturing supplies, expenses and repair materials decreased by approximately $2,300, utilities decreased by $450, depreciation expense decreased by approximately $1,400 and personal property and real estate taxes decreased by $3,450 in
fiscal 2007 compared to fiscal 2006. The provision for personal property taxes in 2006 included a reserve of $2,324 for a matter contested with the Ohio Board of Tax Appeals concerning the Companys acquisition of the automotive division of MTD
Products Inc. Fiscal 2007 reflects the absence of the fiscal 2006 charge and a negotiated resolution of another personal property tax valuation issue concerning jigs, dies and fixtures at an amount less than the Company accrued. The reduction in
manufacturing expenses in fiscal 2007 compared to fiscal 2006, exclusive of the personal property tax matters, were the result of cost reduction efforts implemented in response to reduced production volumes, including the closure of the
Companys Cleveland Stamping facility and the effect of freezing the Companys cash balance pension plan for non-bargaining employees.

Selling, General and Administrative Expenses.    Selling, general and administrative expenses were $32,801 or 5.6% of fiscal 2007 sales. For fiscal 2006, selling general and administrative expenses were $37,669 or
6.1% of fiscal 2006 sales. In fiscal 2007, selling general and administrative expenses decreased by $4,868 from fiscal 2006, which included expenses related to two contingencies for which reserves were provided in the fourth quarter of fiscal 2006.

In connection with the bankruptcy of a steel supplier the Company had asserted that its obligations to the supplier were properly offset
by amounts that the supplier owed to the Company. The Companys position was not sustained in court proceedings and as a result the Company and the supplier negotiated a settlement of $907 in September 2006 that was recorded in the fourth
quarter in selling, general and administrative expenses.

Previous management of the Company had entered an alleged purchase commitment
with a supplier for the purchase of certain equipment. The supplier sued the Company for failure to fulfill the obligations under the alleged commitment. During the fourth quarter, a jury found in favor of the supplier and awarded the supplier
damages and pre-judgment interest amounting to $2,726. The Company is appealing this decision. However, considering the adverse decision the Company evaluated the probable outcome upon appeal and provided an accrual of $2,726 representing damages
plus pre-judgment interest. This amount was charged to selling, general and administrative expenses.

In fiscal 2007, selling, general and
administrative fees were further reduced by lower depreciation expense and lower professional fees, offset by increasing personnel and personnel related expenses.

Asset Impairment and Restructuring Charge.    In October 2006, management presented to the Board of Directors an assessment of the business at its Cleveland Stamping facility. This facility,
which is leased from MTD Products Inc (MTD) as part of the acquisition by the Company of MTD Automotive in 1999, was faced with declining business volumes. The two major customers of the Cleveland Stamping facility have balanced out
programs for which the Company provides components during the first and second quarters of fiscal 2007. The Company committed to a plan to cease operation of the Cleveland facility. As a result, the Company recorded an impairment charge of $3,072 to
reduce long-lived assets, acquired since the acquisition, to their estimated fair value. During fiscal 2007, the Company incurred further asset impairment charges of $137 related to resolution of issues related to the remaining long-lived assets at
the Companys Cleveland Stamping facility.



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In fiscal 2006, the Company also recorded a restructuring charge related to approximately 200 employees
for severance, health insurance and curtailment of the retirement plan for employees of the Cleveland plant. The restructuring charge was $1,625. In February 2007, the Company finalized negotiations with the employees of the Cleveland Stamping
facility and recorded an additional charge of $100 for severance and benefits.

Other.    Interest expense for
fiscal 2007 was $7,486, an increase of $1,403 from interest expense of $6,083 incurred in fiscal 2006. The increase in interest expense compared to the prior fiscal year resulted from a higher level of average borrowed funds and an increase in the
interest rate. Borrowed funds averaged $96,453 during fiscal 2007 and the weighted average interest rate was 7.00%. In fiscal 2006, the average of borrowed funds was $93,807, with a weighted average interest rate of 6.36%.

Other income was $442 for fiscal 2007 and is comparable to fiscal 2006.

The provision for income taxes for fiscal 2007 was $7,535 on income before taxes of $17,085, for an effective tax rate of 44.1%. The effective tax rate for fiscal 2007 reflects the inability of the Company to provide
tax benefit on the losses of the Companys Mexican subsidiary, offset by the recognition of research and development tax credits related to the current year and to prior years that are being realized by amending the tax returns of those years.

The provision for income taxes for fiscal 2006 was $3,124 on income before taxes of $10,242 for an effective tax rate of 30.5%. The
provision for income taxes for fiscal 2006 reflected the recognition of a benefit in the tax provision of $1,488 related to state tax credits during the second quarter of fiscal 2006. In previous fiscal years, the Company had provided a reserve
related to the Ohio Manufacturers Grant (formerly known as the Ohio Machinery and Equipment Credit) due to the uncertainty regarding the realization of such tax credits. In September 2005, the United States Court of Appeals for the Sixth
Circuit ruled that this credit was unconstitutional. This ruling was appealed to the U.S. Supreme Court. On May 15, 2006, the U.S. Supreme Court dismissed the Sixth Circuit Courts ruling. As a result of the U.S. Supreme Courts
action, the Ohio Machinery and Equipment credit remains constitutional and the Company, therefore, eliminated the reserves related to this issue.

Net Income.    Net income for fiscal 2007 was $9,550 or $0.58 per share, basic and diluted. In fiscal 2006, net income was $7,118, or $0.44 per share, basic and $0.43 per share, diluted.

Year Ended October 31, 2006 Compared to Year Ended October 31, 2005

Revenues.    Sales for fiscal 2006 were $620,375 compared to sales of $634,579 for fiscal 2005, a decrease of $14,204, or 2.2%. In the fourth quarter of fiscal 2006, the Companys sales
decreased by $18,962 from the fourth quarter of 2005, or 10.7%. The year over year sales decrease that occurred during the fourth quarter of fiscal 2006 reflected the decline in North American car and light truck production that occurred in the
fourth quarter of fiscal 2006 and in fiscal 2006 as a whole. According to industry statistics, North American car and light truck production for fiscal 2006 was 1.9% below production levels of fiscal 2005. In the fourth quarter of fiscal 2006, the
decrease of North American car and light truck production from the levels of fiscal 2005 was 10.5%. For the traditional domestic manufacturers, the production decreases were 15.4% and 5.1% for the fourth quarter and annual periods of fiscal 2006.
The traditional domestic car and light truck manufacturers, through direct sales or through sales by the Company to Tier I suppliers, are the most significant of the Companys customers.

Gross Profit.    Gross profit for fiscal 2006 was $58,257, a decrease of $21,590 from the gross profit of fiscal 2005 of
$79,847. As a percentage of sales, gross profit in fiscal 2006 was 9.4% compared to 12.6% in fiscal 2005. Gross profit in fiscal 2006 was negatively affected by an increase in the material content of products sold during fiscal 2006 compared to
fiscal 2005 by approximately $14,100. Gross profit was further reduced by the lower volume of product sold in fiscal 2006 compared to fiscal 2005 in the amount of $4,500. Gross profit



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was also adversely affected by increased manufacturing expenses in fiscal 2006 compared to fiscal 2005, which was the net result of several factors. In the
fourth quarter of fiscal 2006, the Company recorded an accrual for personal property tax of $2,324. This amount represents an estimate of personal property tax due on the contested valuation of assets that the Company acquired in connection with the
acquisition of the automotive division of MTD Products Inc. In July 2006, the Ohio Board of Tax Appeals ruled in favor of the Ohio Tax Commissioner and against the Company. While the Company is appealing this matter to the Ohio Supreme Court, the
Company has carefully considered the probability of an adverse ruling and accrued this amount in manufacturing expenses. Manufacturing expenses were also negatively affected by increased utility expenses in fiscal 2006 compared to 2005 in the
approximate amount of $900 and increased maintenance and repair expenses of approximately $550. In the fourth quarter of fiscal 2006, the Company negotiated a settlement of demurrage claims with rail service carriers that the carriers had asserted.
The carriers claims were resolved for $335. Manufacturing expenses were favorably affected by reduced manning and related personnel costs of approximately $1,125.

Selling, General and Administrative Expenses.    Selling, general and administrative expenses were $37,669 or 6.1% of fiscal 2006 sales. For fiscal 2005, these expenses were $35,588, or 5.6%
of fiscal 2005 sales. Selling, general and administrative expenses include expenses related to two contingencies that negatively affected the Company, each event occurring in the fourth quarter of fiscal 2006.

In connection with the bankruptcy of a steel supplier the Company had asserted that its obligations to the supplier were properly offset by agreement by
amounts that the supplier owed to the Company. The Companys position was not sustained in court proceedings and as a result the Company and the supplier negotiated a settlement of $907 in September 2006 that was recorded in the fourth quarter
in selling, general and administrative expenses.

Previous management of the Company had entered an alleged purchase commitment with a
supplier for the purchase of equipment for the Companys operations. The supplier sued the Company for failure to fulfill the obligations under the commitment. During the fourth quarter, a jury found in favor of the supplier and awarded the
supplier damages and pre-judgment interest amounting to $2,726. The Company is appealing this decision. However, considering the adverse decision the Company evaluated the probable outcome upon appeal and provided an accrual of $2,726 representing
damages plus pre-judgment interest. This amount was charged to selling, general and administrative expenses.

These adverse charges to
selling, general and administrative expenses were offset by lower personnel and personnel related expenses of approximately $800 and by a lower provision for doubtful accounts of approximately $600 reflecting collections of accounts for which an
allowance was provided.

Asset Impairment and Restructuring Charge.    In October 2006, management presented to
the Board of Directors an assessment of the current business at its Cleveland Stamping facility. This facility, which is leased from MTD Products Inc (MTD) as part of the acquisition by the Company of MTD Automotive in 1999, is faced
with declining business volumes. The two major customers of the Cleveland Stamping facility are balancing out programs for which the Company provides components during the first and second quarters of fiscal 2007. The Company has therefore committed
to a plan to cease operation of the Cleveland facility. As a result, the Company has recorded an impairment charge of $3,072 to reduce long-lived assets, acquired since the acquisition, to their estimated fair value. The Company has also recorded a
restructuring charge related to approximately 200 employees for severance, health insurance and curtailment of the retirement plan for employees of the Cleveland plant. The restructuring charge was $1,625.

In fiscal 2005, the Company incurred asset impairment charges of $1,586 related to assets for which sales of customer product unexpectedly concluded
during the year.

Other.    Interest expense for fiscal 2006 of $6,083 was $1,927 less than interest expense of
$8,010 incurred in fiscal 2005. In January 2005, the Company entered into an Amended and Restated Credit Agreement, resulting in accelerated amortization of deferred financing costs of $1,332 included in interest expense in fiscal 2005. The



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remaining reduction in interest expense in fiscal 2006 compared to fiscal 2005 of $595 resulted from the lower level of borrowed funds in fiscal 2006, off
set by an increase in the interest rate. In fiscal 2006, the average of borrowed funds was $93,807, with a weighted average interest rate of 6.36%. In fiscal 2005, borrowed funds averaged $120,388 and the weighted average interest rate was 5.00%.

Other income, net, was $434 in fiscal 2006 compared to $62 in fiscal 2005. In fiscal 2006, other income included the sale of securities
obtained through the process of recovery of bad debts, accounting for the increase in other income between years.

The provision for income
taxes for fiscal 2006 was $3,124 on income before taxes of $10,242 for an effective tax rate of 30.5%. The provision for income taxes for fiscal 2006 reflected the recognition of a benefit in the tax provision of $1,488 related to state tax credits
during the second quarter of fiscal 2006. In previous fiscal years, the Company had provided a reserve related to the Ohio Manufacturers Grant (formerly known as the Ohio Machinery and Equipment Credit) due to the uncertainty regarding the
realization of such tax credits. In September 2005, the United States Court of Appeals for the Sixth Circuit ruled that this credit was unconstitutional. This ruling was appealed to the U.S. Supreme Court. On May 15, 2006, the U.S. Supreme
Court dismissed the Sixth Circuit Courts ruling. As a result of the U.S. Supreme Courts action, the Ohio Machinery and Equipment credit remains constitutional and the Company, therefore, eliminated the reserves related to this issue.

The provision for income taxes in fiscal 2005 was $7,973. The provision includes the income tax benefits for a reduction in the deferred
tax valuation allowance, the resolution of certain tax contingencies, the recognition of the benefit of additional ordinary losses allocated to the Company and the impact of a change in the State of Ohio tax on income on the Companys deferred
tax assets and liabilities. In previous fiscal years, the Company had provided a valuation allowance for tax credits and capital loss carryforwards and reserves for certain other tax contingencies recorded against net operating loss carryforwards
since the Company was experiencing losses and realization of the credits and other items was uncertain. In the second and third quarters of fiscal 2005, these matters were resolved, eliminating the requirement for a portion of the valuation
allowance and these reserves. The Company, therefore, recorded a benefit in the tax provision of $4,506 in fiscal 2005, representing the reduction of the valuation allowance and other related reserves associated with these tax credits and tax
contingencies and the elimination of the benefit of the capital loss carryforwards and the related valuation allowance together with the recognition of the tax benefit of additional ordinary losses allocated to the Company that are currently
realizable. The provision for income taxes also includes the benefit of $1,102 for the effect of the change in the State of Ohio corporate income tax on the Companys deferred tax assets and liabilities.

In fiscal 2006, the Company had income before taxes of $10,242, and tax benefits of $1,488 resulting in a provision for income taxes of $3,124 and an
effective rate of 30.5%. Without the income tax benefit of $1,488 recorded in fiscal 2006, the Company would have had a provision for taxes on income of $4,612 on income before taxes of $10,242, which would have resulted in an effective tax rate of
45.0%. During fiscal 2005, the Company had income before taxes of $34,725, and tax benefits of $5,608 resulting in a provision for income taxes in the amount of $7,973 for an effective tax rate of 23.0%. Without the income tax benefits of $5,608
recorded in fiscal 2005, the Company would have had a provision for income taxes of $13,581 on income before taxes of $34,725, for an effective tax rate of 39.1%. The Company is presenting taxes and tax rates without tax benefits to facilitate
comparisons between the periods. In fiscal 2006, the effective tax rate before tax benefits has increased as a result of recording a valuation allowance of $243 against the deferred tax assets of the Companys Mexican subsidiary. The valuation
allowance was established because of the loss incurred by this subsidiary in fiscal 2006.

In the fourth quarter of fiscal 2006, the
Company adopted FASB Interpretation No. (FIN) 47, an interpretation of SFAS No. 143. The Company recorded a charge of $111 to record the conditional asset retirement obligation and related depreciation expense associated with
several properties which the Company owns or leases. Because of the immaterial impact of the accounting change, the expense associated with the adoption of FIN 47 was included in cost of sales in the accompanying consolidated statement of
operations.



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Net Income.    Net income for fiscal 2006 was $7,118, or $0.44 per share,
basic and $0.43 per share, diluted. In fiscal 2005, net income was $26,752, or $1.69 per share, basic and $1.64 per share, diluted.

Liquidity and
Capital Resources

The Companys Amended and Restated Credit Agreement (the Amended Credit Agreement) provides the
Company with borrowing capacity of $175,000 in the form of a five-year $125,000 revolving credit facility and a five-year term loan of $50,000, each maturing January 2010. The balances of the term loan and revolving credit facility at
October 31, 2007 were $22,500 and $51,100, respectively.

Under the Amended Credit Agreement, the Company has the option to select the
applicable interest rate based upon two indicesa Base Rate, as defined in the Amended Credit Agreement, or the Eurodollar rate, as adjusted by the Eurocurrency Reserve Percentage, if any (LIBOR). The selected index is combined with
a designated margin from an agreed upon pricing matrix. The Base Rate is the greater of the LaSalle Bank publicly announced prime rate or the Federal Funds effective rate plus 0.5% per annum. LIBOR is the published Bloomberg Financial Markets
Information Service rate. At October 31, 2007, the interest rate for the revolving credit facility and the term loan was LIBOR plus 1.75%. The margins for the revolving credit facility and the term loan have increased from the margins in place
at October 31, 2006 because the Companys ratio of funded debt to earnings before interest, taxes, depreciation and amortization, (EBITDA) (as defined in the Amended Credit Agreement) increased in January 2007 related to additional
borrowed funds (see below).

Borrowings under the Amended Credit Agreement are collateralized by a first priority security interest in
substantially all of the tangible and intangible property of the Company and its domestic subsidiaries and 65% of the stock of foreign subsidiaries.

The Amended Credit Agreement requires the Company to observe several financial covenants. At October 31, 2007, the covenants required a minimum fixed coverage ratio of 1.25 to 1.00, a maximum leverage ratio of
2.75 to 1.00 and a minimum net worth equal to the sum of $100,000 plus 50% of consolidated net income since October 31, 2004. The Amended Credit Agreement also establishes limits for additional borrowings, dividends, investments, acquisitions
or mergers and sales of assets. On December 20, 2006, the Amended Credit Agreement was further amended to permit a distribution of a special dividend to shareholders of the Company. The covenants of the Amended Credit Agreement remain in place
with exceptions permitted for this special dividend. The Board of Directors of the Company declared a special dividend of $2.50 per share, paid on January 19, 2007 to shareholders of record as of January 5, 2007. At October 31, 2007,
the Company was in compliance with the covenants under the Amended Credit Agreement.

Borrowings under the revolving credit facility must
be repaid in full in January 2010. Repayments of borrowings under the term loan are in equal quarterly installments of $2,500 with the final payment due on December 31, 2009. The Company may prepay the borrowings under the revolving credit
facility and the term loan without penalty.

The Amended Credit Agreement specifies that upon the occurrence of an event or condition
deemed to have a material adverse effect on the business or operations of the Company, as determined by the administrative agent of the lending syndicate or the required lenders, as defined, of 51% of the aggregate commitment under the Amended
Credit Agreement, the outstanding borrowings become due and payable. However, the Company does not anticipate at this time any change in business conditions or operations that could be deemed as a material adverse change by the lenders.

In July 2007, the Company entered into a finance agreement with an insurance broker for various insurance policies that bears interest at a fixed rate
of 5.79% and requires monthly payments of $84 through April 2008. In July 2006, the Company entered into a finance agreement with an insurance broker for various insurance policies that bore interest at a fixed rate of 6.67% and required monthly
payments of $103 through April 2007. As of October 31, 2007 and 2006, $496 and $508, respectively, remained outstanding under these agreements and were classified as current debt in the Companys consolidated balance sheet.



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In June 2004, the Company issued a $2,000 promissory note to the State of Ohio related to specific
machinery and equipment at one of the Companys Ohio facilities. The promissory note bore interest at 1% for the first year of the term and 3% per annum for the balance of the term, with interest only payments for the first year of the
term. Principal payments began in August 2005 in the amount of $25, and monthly principal payments continue thereafter increasing annually until July 2011, when the loan matures. The Company may prepay this promissory note without penalty.

During fiscal 2006, the Company entered into two two-year note agreements with a bank to finance the purchase of equipment that the
Company formerly leased. The notes bear interest at 6.56% and 6.91%, respectively, and require monthly payments of $55 and $81, respectively, through December 2007 and March 2008. In addition, the Company entered into a two-year capital lease
agreement in the amount of $463 for computer software.

Scheduled repayments under the terms of the Credit Agreement plus repayments of
other debt for the next five years are listed below:



|                    |  |                  |        |            |   |       |  |   |       
|------------------- |  | ---------------- | ------ | ---------- | - | ----- |  | - | ------
|Year                |  | Credit Agreement |        | Other Debt |   | Total
|2008                |  | $                | 10,000 |            | $ | 1,411 |  | $ | 11,411
|2009                |  |                  | 10,000 |            |   | 342   |  |   | 10,342
|2010                |  |                  | 53,600 |            |   | 351   |  |   | 53,951
|2011                |  |                  |       |            |   | 270   |  |   | 270   
|2012                |  |                  |       |            |   |      |  |   |      
|2013 and thereafter |  |                  |       |            |   |      |  |   |      
|                    |  |                  |        |            |   |       |  |   |       
|Total               |  | $                | 73,600 |            | $ | 2,374 |  | $ | 75,974
|                    |  |                  |        |            |   |       |  |   |       

At October 31, 2007, total debt was $75,974 and total equity was $135,263, resulting in a
capitalization rate of 36.0% debt, 64.0% equity. Current assets were $140,255 and current liabilities were $119,240 resulting in working capital of $21,015.

In accordance with the five-year employment agreement between the Company and the President and Chief Executive Officer, in January 2007 the Company liquidated the assets of its rabbi trust, realizing a gain of $243
included in other income in the accompanying consolidated statement of operations. The proceeds of the liquidation were used to fund the supplemental executive retirement plan for the President and Chief Executive Officer in the amount of $1,868.

Cash was generated by net income and by expenses charged to earnings to arrive at net income that do not require a current outlay of cash
amounting to $39,912 in fiscal 2007 compared to $43,525 in fiscal 2006. The decrease of $3,613 reflects increased net income, lower depreciation and amortization, lower asset impairment charges and a reduction in the net deferred tax liability
position.

Working capital changes since October 31, 2006 have provided funds of $22,039. Since October 31, 2006, accounts
receivable have decreased by $2,980. The decrease in accounts receivable reflect the lower level of sales during fiscal 2007. Inventory at October 31, 2007 decreased by $12,299 since the end of fiscal 2006 and reflects the billing of funds
incurred for customer tooling programs and the adjustment of inventory levels to current sales demand. Prepaids and other assets and payables and other liabilities reflect the liquidation of the assets of the Companys rabbi trust and the use
of those proceeds to fund the Companys obligation to its CEO for the supplemental executive retirement plan, established as part of the CEOs employment agreement. Additionally, payables and other liabilities reflect a reduced current
pension obligation due to improved funding of the Companys defined benefit pension plans. Considering the decrease in overdraft balances of $5,637, accounts payable, net have increased $378.

Capital expenditures in fiscal 2007 were $9,262.



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Financing activity in fiscal 2007 reflects the borrowing of funds of $40,872 that were used to pay the
aforementioned special dividend of $2.50 per share paid on January 19, 2007. In addition, the Company has used funds generated from operations to repay debt of $54,931 in fiscal 2007.

After considering letters of credit of $5,654 that the Company has issued, available funds under the Amended Credit Agreement were $68,246 at
October 31, 2007. The Company believes that funds available under the Amended Credit Agreement and cash flow from operations will provide sufficient liquidity to meet its cash requirements through October 31, 2007 and until the expiration
of the revolving credit facility in January 2010, including capital expenditures, pension obligations and scheduled repayments of $10,000 in the aggregate under the Amended Credit Agreement in accordance with the repayment terms, plus repayments of
$1,411 on other debt. Furthermore, the Company does not anticipate at this time any change in business conditions or operations of the Company that could be deemed as a material adverse change by the agent bank or required lenders, as defined, and
thereby result in declaring borrowed amounts as immediately due and payable.

As of October 31, 2007, the Company has $2,855 of
commitments for capital expenditures, commitments under non-cancelable operating leases aggregating $13,021 and $83 committed under capital lease obligations. These capital expenditures in 2008 are for the support of current and new business,
expected increases in existing business, and enhancements of production.

The following table reflects the Companys contractual
obligations and commercial commitments as of October 31, 2007. Commercial commitments include standby letters of credit, guarantees and other potential cash outflows resulting from a contingent event that requires performance by the Company.

Contractual Obligations and Commitments

(amounts in thousands)



|                                                            |  |       |         |                       |   |        |  |      |        |      |   |        |  |                    |       |  |   |       |  |   |      
|----------------------------------------------------------- |  | ----- | ------- | --------------------- | - | ------ |  | ---- | ------ | ---- | - | ------ |  | ------------------ | ----- |  | - | ----- |  | - | -----
|                                                            |  |       |         | Payment due by period
|                                                            |  | Total |         | 2008                  |   | 2009   |  | 2010 |        | 2011 |   | 2012   |  | 2013 andthereafter
|Insurance broker financing agreement, including interest    |  | $     | 496     |                       | $ | 496    |  | $    |       |      | $ |       |  | $                  |      |  | $ |      |  | $ |     
|Credit facility                                             |  |       | 73,600  |                       |   | 10,000 |  |      | 10,000 |      |   | 53,600 |  |                    |      |  |   |      |  |   |     
|Interest expense on credit facility(1)                      |  |       | 8,073   |                       |   | 4,487  |  |      | 2,641  |      |   | 945    |  |                    |      |  |   |      |  |   |     
|Purchase obligations(2)                                     |  |       | 56,814  |                       |   | 56,814 |  |      |       |      |   |       |  |                    |      |  |   |      |  |   |     
|Capital leases, including interest                          |  |       | 83      |                       |   | 81     |  |      | 2      |      |   |       |  |                    |      |  |   |      |  |   |     
|Operating leases                                            |  |       | 13,021  |                       |   | 2,542  |  |      | 2,496  |      |   | 2,194  |  |                    | 1,999 |  |   | 1,977 |  |   | 1,813
|Current funding for pension and post-retirement benefits(3) |  |       | 526     |                       |   | 526    |  |      |       |      |   |       |  |                    |      |  |   |      |  |   |     
|Other long-term obligations, including interest             |  |       | 1,880   |                       |   | 877    |  |      | 365    |      |   | 365    |  |                    | 273   |  |   |      |  |   |     
|                                                            |  |       |         |                       |   |        |  |      |        |      |   |        |  |                    |       |  |   |       |  |   |      
|Total contractual obligations                               |  | $     | 154,493 |                       | $ | 75,823 |  | $    | 15,504 |      | $ | 57,104 |  | $                  | 2,272 |  | $ | 1,977 |  | $ | 1,813
|                                                            |  |       |         |                       |   |        |  |      |        |      |   |        |  |                    |       |  |   |       |  |   |      
|Capital expenditure commitments                             |  | $     | 2,855   |                       | $ |       |  | $    |       |      | $ |       |  | $                  |      |  | $ |      |  | $ |     
|Letters of credit                                           |  |       | 5,654   |                       |   |       |  |      |       |      |   |       |  |                    |      |  |   |      |  |   |     
|                                                            |  |       |         |                       |   |        |  |      |        |      |   |        |  |                    |       |  |   |       |  |   |      
|Total commitments                                           |  | $     | 8,509   |                       | $ |       |  | $    |       |      | $ |       |  | $                  |      |  | $ |      |  | $ |     
|                                                            |  |       |         |                       |   |        |  |      |        |      |   |        |  |                    |       |  |   |       |  |   |      

---

|(1) | Future interest expense was computed based upon forecasted and scheduled future principal repayments. Interest rates as of October 31, 2007 were assumed to decrease in future
periods due to improvement in the Companys leverage ratio.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | In the ordinary course of business, the Company authorizes its suppliers to supply the Company with the materials necessary to fulfill its obligation to supply
released production schedules to its automotive
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | customers. The Companys authorizations to its suppliers amounted to approximately $57 million as of October 31, 2007, and are included in the
Contractual Obligations and Commitments table above under Purchase Obligations. The Companys releases from its customers for products containing such material amounted to approximately $81 million at October 31, 2007.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Amount represents expected contributions to the Companys defined benefit pension and post-retirement plans for the year ending October 31, 2008. Future expected amounts
have not been disclosed as such amounts are dependent upon the annual actuarial valuation of pension plan assets and liabilities.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements with unconsolidated entities or
other persons.

New Accounting Standards

In July 2006, the FASB issued FIN No. 48, Accounting for Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109. FIN No. 48 prescribes a recognition threshold and measurement attribute for
financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN No. 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods,
disclosure, and transition. FIN No. 48 is effective for fiscal years beginning after December 15, 2006. The Company is continuing to evaluate the impact that FIN 48 could have on its financial position and results of operations when
adopted and the Company estimates, at this time, that the adoption could result in a charge to beginning retained earnings at November 1, 2007, in the range of approximately $1,500 to $2,500.

In September 2006, the FASB issued SFAS No. 158 Employers Accounting for Defined Benefit Pension and Other Postretirement Plans 
an amendment of FASB Statements No. 87, 88, 106, and 132(R). SFAS 158 requires an employer to recognize a plans funded status in its statement of financial position, measure a plans assets and obligations as of the end of the
employers fiscal year and recognize the changes in a defined benefit postretirement plans funded status in comprehensive income in the year in which the changes occur. SFAS 158s requirement to recognize the funded status of a
benefit plan and new disclosure requirements are effective as of the end of the fiscal year ending after December 15, 2006. The requirement to measure plan assets and benefit obligations as of the date of the employers fiscal year-end
statement of financial position is effective for fiscal years ending after December 15, 2008. See footnote 9 for discussion of the effect of SFAS 158 on the Companys financial position, results of operations and cash flows.

Effect of Inflation

Inflation generally affects the
Company by increasing the interest expense of floating rate indebtedness and by increasing the cost of labor, equipment and raw materials. The general level of inflation has not had a material effect on the Companys financial results for the
past three years.

Forward-looking Statements

Certain statements made by the Company in this Annual Report on Form 10-K regarding earnings or general belief in the Companys expectations of future operating results are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. In particular, forward-looking statements are statements that relate to the Companys operating performance, events or developments that the Company believes or expects to occur in the future, including
those that discuss strategies, goals, outlook, or other non-historical matters, or that relate to future sales, earnings expectations, cost savings, awarded sales, volume growth, earnings or general belief in the Companys expectations of
future operating results. The forward-looking statements are made on the basis of managements assumptions and expectations. As a result, there can



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be no guarantee or assurance that these assumptions and expectations will in fact occur. The forward-looking statements are subject to risks and
uncertainties that may cause actual results to materially differ from those contained in the statements. Some, but not all of the risks, include the ability of the Company to accomplish its strategic objectives with respect to implementing its
sustainable business model; the ability to obtain future sales; changes in worldwide economic and political conditions, including adverse effects from terrorism or related hostilities; costs related to legal and administrative matters; the
Companys ability to realize cost savings expected to offset price concessions; inefficiencies related to production and product launches that are greater than anticipated; changes in technology and technological risks; increased fuel and
utility costs; work stoppages and strikes at the Companys facilities and that of the Companys customers; the Companys dependence on the automotive and heavy truck industries, which are highly cyclical; the dependence of the
automotive industry on consumer spending, which is subject to the impact of domestic and international economic conditions, including increased energy costs affecting car and light truck production, and regulations and policies regarding
international trade; financial and business downturns of the Companys customers or vendors, including any production cutbacks or bankruptcies; increases in the price of, or limitations on the availability of, steel, the Companys primary
raw material, or decreases in the price of scrap steel; the successful launch and consumer acceptance of new vehicles for which the Company supplies parts; the occurrence of any event or condition that may be deemed a material adverse effect under
Amended Credit Agreement; pension plan funding requirements; and other factors, uncertainties, challenges and risks detailed in the Companys other public filings with the Securities and Exchange Commission. Any or all of these risks and
uncertainties could cause actual results to differ materially from those reflected in the forward-looking statements. These forward-looking statements reflect managements analysis only as of the date of the filing of this Annual Report on Form
10-K. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. In addition to the disclosures contained herein, readers should carefully review
risks and uncertainties contained in other documents the Company files from time to time with the Securities and Exchange Commission.



|Item 7A. | Quantitative And Qualitative Disclosures About Market Risk
|-------- | ----------------------------------------------------------

(Dollar amounts in thousands)

The Companys major market risk exposure is primarily due to possible fluctuations in
interest rates as they relate to its variable rate debt. The Company does not enter into derivative financial investments for trading or speculation purposes. As a result, the Company believes that its market risk exposure is not material to the
Companys financial position, liquidity or results of operations.

Interest Rate Risk

The Company is exposed to market risk through variable rate debt instruments. As of October 31, 2007, the Company had $73,600 outstanding under the
Amended Credit Agreement. Based on October 31, 2007 debt levels, a 50 basis point change in interest rates would impact interest expense by approximately $479 annually.

In the normal course of business, the Company employs established policies and procedures to manage exposure to changes in interest rates. The
Companys objective in managing the exposure to interest rate changes is to limit the volatility and impact of interest rate changes on earnings and cash flows. In January 2005, the Company entered into a $25,000 interest rate collar agreement
that resulted in fixing the interest rate on a portion of the term loan under the Amended Credit Agreement between a floor of 3.08% and a cap of 5.25%. The collar agreement terminated on January 12, 2007.

In accordance with SFAS No. 133, the Company had designated the interest rate collar as a cash flow hedge and recognized the fair value of the
interest rate swap agreement on the consolidated balance sheet. Gains and losses related to a hedge and that result from changes in the fair value of the hedge are either recognized in income immediately to offset the gain or loss on the hedged
item, or deferred and reported as a component of other comprehensive income (loss) in stockholders equity and subsequently recognized in income when the



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hedged item affects net income. The ineffective portion of the change in fair value of a hedge is recognized in income immediately. There was no hedge
ineffectiveness for the years ended October 31, 2007, 2006 and 2005. The deferred gains on the hedge were recognized in net income upon termination of the hedge in the first quarter of fiscal 2007.

Foreign Currency Exchange Rate Risk

In order to reduce the impact of changes in foreign exchange rates on the consolidated results of operations, the Company enters into foreign currency forward exchange contracts periodically. There were no foreign currency forward exchange
contracts outstanding at October 31, 2007. The intent of any contracts entered by the Company is to reduce exposure to currency movements affecting foreign currency purchase commitments. Changes in the fair value of forward exchange contracts
are recorded in the consolidated statements of operations. The Companys risks related to foreign currency exchange risks have historically not been material. The Company does not expect the effects of these risks to be material in the future
based on current operating and economic conditions in the countries and markets in which it operates.



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|Item 8. | Financial Statements and Supplementary Data
|------- | -------------------------------------------

INDEX TO FINANCIAL STATEMENTS



|                                                                                           |  |     
|------------------------------------------------------------------------------------------ |  | ----
|                                                                                           |  | Page
|Managements Report on Internal Control Over Financial Reporting                           |  | 29  
|Reports of Independent Registered Public Accounting Firms                                  |  | 30  
|Consolidated Balance Sheets at October 31, 2007 and 2006                                   |  | 33  
|Consolidated Statements of Operations for the three years ended October 31, 2007           |  | 34  
|Consolidated Statements of Cash Flows for the three years ended October 31, 2007           |  | 35  
|Consolidated Statements of Stockholders Equity for the three years ended October 31, 2007 |  | 36  
|Notes to Consolidated Financial Statements                                                 |  | 37  

The following Financial Statement Schedule for the three years ended October 31, 2007 is
included in Item 15 of this Annual Report on Form 10-K:



|                                                           |  |   
|---------------------------------------------------------- |  | --
|Schedule IIValuation and Qualifying Accounts and Reserves |  | 66

All other schedules are omitted because they are not applicable or the required information is
shown in the financial statements or notes thereto.



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MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

To the Board of Directors and Stockholders of Shiloh
Industries, Inc.

The management of Shiloh Industries, Inc. and its subsidiaries (the Company) is responsible for establishing and
maintaining adequate internal control over financial reporting. The internal control system of Shiloh Industries, Inc. was designed to provide reasonable assurance to the Companys management and board of directors regarding the preparation and
fair presentation of published financial statements.

All internal control systems, no matter how well designed have inherent limitations.
Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

The management of Shiloh Industries, Inc. assessed the effectiveness of the Companys internal control over financial reporting as of October 31, 2007. In making this assessment, management used the criteria
set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control  Integrated Framework. Based on this assessment, management believes that, as of October 31, 2007, the Companys
internal control over financial reporting is effective based on those criteria.

Managements assessments of the effectiveness of
internal control over financial reporting as of October 31, 2007 have been audited by Grant Thornton LLP, an independent registered public accounting firm, who expressed unqualified opinion as stated in their report, a copy of which is included
in this annual report.

/s/    Theodore K. Zampetis

President and Chief Executive Officer

/s/    Stephen E. Graham

Chief Financial Officer

December 20, 2007



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

Shiloh Industries, Inc.

We have audited Shiloh Industries,
Inc. (a Delaware Corporation) and subsidiaries (the Company) internal control over financial reporting as of October 31, 2007, based on criteria established in Internal Control  Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Companys management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control
over financial reporting, included in the accompanying Managements Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Companys internal control over financial reporting based on our
audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal
control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A companys internal control
over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A companys internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts
and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the companys assets that could have a material effect on the financial statements.

Because of its inherent
limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in
all material respects, effective internal control over financial reporting as of October 31, 2007, based on criteria established in Internal Control  Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet
of the Company and its subsidiaries as of October 31, 2007 and the related consolidated statements of operations, stockholders equity and cash flows for the year then ended and our report dated December 19, 2007 expressed an
unqualified opinion on those financial statements.

/s/    Grant Thornton LLP

Cleveland, Ohio

December 19, 2007



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

Shiloh Industries, Inc.

We have audited the accompanying consolidated balance sheet of Shiloh Industries, Inc. (a Delaware corporation) and subsidiaries (the Company) as of
October 31, 2007, and the related consolidated statements of operations, stockholders equity, and cash flows for the year then ended. These financial statements are the responsibility of the Companys management. Our responsibility
is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated
financial statements referred to above present fairly, in all material respects, the financial position of Shiloh Industries, Inc. and subsidiaries as of October 31, 2007, and the results of their operations and their cash flows for the year
then ended in conformity with accounting principles generally accepted in the United States of America.

Our audit was conducted for the
purpose of forming an opinion on the basic financial statements taken as a whole. The financial statement schedule listed in Item 15(a)(2) of this Form 10-K is presented for purposes of additional analysis and is not a required part of the
basic financial statements. This schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial
statements taken as a whole.

As discussed in Notes 1 and 9 to the consolidated financial statements, effective October 31, 2007, the
Company adopted Statement of Financial Accounting Standards No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans  an amendment of FASB Statements No. 87, 88, 106, and 132(R).

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness
of Shiloh Industries, Inc.s internal control over financial reporting as of October 31, 2007, based on criteria established in Internal Control  Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO) and our report dated December 19, 2007 expressed an unqualified opinion thereon.

/s/    Grant
Thornton LLP

Cleveland, Ohio

December 19, 2007



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Shiloh Industries, Inc.

We have audited the accompanying consolidated balance sheet of Shiloh Industries, Inc. and subsidiaries (the Company) as of October 31, 2006, and the related consolidated statements of operations,
stockholders equity, and cash flows for each of the two years in the period ended October 31, 2006. Our audits also included the financial statement schedule listed in the Index at Item 15(a)2. These financial statements and the
financial statement schedule are the responsibility of the Companys management. Our responsibility is to express an opinion on the financial statements and the financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for
our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of
Shiloh Industries, Inc. and subsidiaries as of October 31, 2006, and the results of their operations and their cash flows for each of the two years in the period ended October 31, 2006, in conformity with accounting principles generally
accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information
set forth therein.

As discussed in Notes 1 and 11 to the consolidated financial statements, the Company changed its method of accounting
for stock-based compensation with the adoption of Statement of Financial Accounting Standards No. 123 (Revised 2004), Share Based Payment effective November 1, 2005.

/s/    Deloitte & Touche LLP

Cleveland, Ohio

December 21, 2006



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SHILOH INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS

(Dollar amounts in thousands, except per share data)



|                                                                                                                                                                         |  |             |         |   |      |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----------- | ------- | - | ---- | - | ------- | -
|                                                                                                                                                                         |  | October 31, |        
|                                                                                                                                                                         |  | 2007        |         |   | 2006 |  
|ASSETS:                                                                                                                                                                  |  |             |         |   |      |   |         |  
|Cash and cash equivalents                                                                                                                                                |  | $           | 131     |   |      | $ | 367     |  
|Accounts receivable, net                                                                                                                                                 |  |             | 97,985  |   |      |   | 99,433  |  
|Related party accounts receivable                                                                                                                                        |  |             | 2,138   |   |      |   | 3,670   |  
|Income tax receivable                                                                                                                                                    |  |             |        |   |      |   | 2,015   |  
|Inventories, net                                                                                                                                                         |  |             | 32,345  |   |      |   | 44,644  |  
|Deferred income taxes                                                                                                                                                    |  |             | 6,691   |   |      |   | 6,431   |  
|Prepaid expenses                                                                                                                                                         |  |             | 965     |   |      |   | 971     |  
|Investments in rabbi trust                                                                                                                                               |  |             |        |   |      |   | 1,677   |  
|                                                                                                                                                                         |  |             |         |   |      |   |         |  
|Total current assets                                                                                                                                                     |  |             | 140,255 |   |      |   | 159,208 |  
|                                                                                                                                                                         |  |             |         |   |      |   |         |  
|Property, plant and equipment, net                                                                                                                                       |  |             | 199,845 |   |      |   | 221,823 |  
|Other assets                                                                                                                                                             |  |             | 1,010   |   |      |   | 2,004   |  
|                                                                                                                                                                         |  |             |         |   |      |   |         |  
|Total assets                                                                                                                                                             |  | $           | 341,110 |   |      | $ | 383,035 |  
|                                                                                                                                                                         |  |             |         |   |      |   |         |  
|LIABILITIES AND STOCKHOLDERS EQUITY:                                                                                                                                    |  |             |         |   |      |   |         |  
|Current debt                                                                                                                                                             |  | $           | 11,411  |   |      | $ | 12,705  |  
|Accounts payable                                                                                                                                                         |  |             | 77,852  |   |      |   | 77,474  |  
|Accrued income taxes                                                                                                                                                     |  |             | 1,970   |   |      |   |        |  
|Other accrued expenses                                                                                                                                                   |  |             | 27,756  |   |      |   | 33,260  |  
|Accrued restructuring charges                                                                                                                                            |  |             | 251     |   |      |   | 750     |  
|                                                                                                                                                                         |  |             |         |   |      |   |         |  
|Total current liabilities                                                                                                                                                |  |             | 119,240 |   |      |   | 124,189 |  
|                                                                                                                                                                         |  |             |         |   |      |   |         |  
|Long-term debt                                                                                                                                                           |  |             | 64,563  |   |      |   | 72,179  |  
|Deferred income taxes                                                                                                                                                    |  |             | 15,871  |   |      |   | 16,237  |  
|Long-term benefit liabilities                                                                                                                                            |  |             | 5,909   |   |      |   | 7,987   |  
|Other liabilities                                                                                                                                                        |  |             | 264     |   |      |   | 427     |  
|                                                                                                                                                                         |  |             |         |   |      |   |         |  
|Total liabilities                                                                                                                                                        |  |             | 205,847 |   |      |   | 221,019 |  
|                                                                                                                                                                         |  |             |         |   |      |   |         |  
|Commitments and contingencies                                                                                                                                            |  |             |         |   |      |   |         |  
|Stockholders equity:                                                                                                                                                    |  |             |         |   |      |   |         |  
|Preferred stock, $.01 per share; 5,000,000 shares authorized; no shares issued and outstanding at October 31, 2007 and
2006                                              |  |             |        |   |      |   |        |  
|Common stock, par value $.01 per share; 25,000,000 shares authorized; 16,354,699 and 16,313,883 shares issued and outstanding at
October 31, 2007 and 2006, respectively |  |             | 164     |   |      |   | 163     |  
|Paid-in capital                                                                                                                                                          |  |             | 59,791  |   |      |   | 58,700  |  
|Retained earnings                                                                                                                                                        |  |             | 87,469  |   |      |   | 118,791 |  
|Accumulated other comprehensive loss:                                                                                                                                    |  |             |         |   |      |   |         |  
|Pension related liability, net                                                                                                                                           |  |             | (12,161 | ) |      |   | (15,779 | )
|Fair value of interest rate collar, net                                                                                                                                  |  |             |        |   |      |   | 3       |  
|Unrealized holding gain on investments, net                                                                                                                              |  |             |        |   |      |   | 138     |  
|                                                                                                                                                                         |  |             |         |   |      |   |         |  
|Total stockholders equity                                                                                                                                               |  |             | 135,263 |   |      |   | 162,016 |  
|                                                                                                                                                                         |  |             |         |   |      |   |         |  
|Total liabilities and stockholders equity                                                                                                                               |  | $           | 341,110 |   |      | $ | 383,035 |  
|                                                                                                                                                                         |  |             |         |   |      |   |         |  

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



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SHILOH INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollar and share amounts in thousands, except per share data)



|                                             |  |                         |         |      |   |         |  |   |         |  
|-------------------------------------------- |  | ----------------------- | ------- | ---- | - | ------- |  | - | ------- | -
|                                             |  | Years Ended October 31, |        
|                                             |  | 2007                    |         | 2006 |   | 2005    | 
|Revenues                                     |  | $                       | 590,414 |      | $ | 620,375 |  | $ | 634,579 |  
|Cost of sales                                |  |                         | 533,247 |      |   | 562,118 |  |   | 554,732 |  
|                                             |  |                         |         |      |   |         |  |   |         |  
|Gross profit                                 |  |                         | 57,167  |      |   | 58,257  |  |   | 79,847  |  
|Selling, general and administrative expenses |  |                         | 32,801  |      |   | 37,669  |  |   | 35,588  |  
|Asset impairment charges                     |  |                         | 137     |      |   | 3,072   |  |   | 1,586   |  
|Restructuring charges                        |  |                         | 100     |      |   | 1,625   |  |   |        |  
|                                             |  |                         |         |      |   |         |  |   |         |  
|Operating income                             |  |                         | 24,129  |      |   | 15,891  |  |   | 42,673  |  
|Interest expense                             |  |                         | 7,486   |      |   | 6,083   |  |   | 8,010   |  
|Interest income                              |  |                         | 68      |      |   | 45      |  |   | 145     |  
|Other (expense) income, net                  |  |                         | 374     |      |   | 389     |  |   | (83     | )
|                                             |  |                         |         |      |   |         |  |   |         |  
|Income before income taxes                   |  |                         | 17,085  |      |   | 10,242  |  |   | 34,725  |  
|Provision for income taxes                   |  |                         | 7,535   |      |   | 3,124   |  |   | 7,973   |  
|                                             |  |                         |         |      |   |         |  |   |         |  
|Net income                                   |  | $                       | 9,550   |      | $ | 7,118   |  | $ | 26,752  |  
|                                             |  |                         |         |      |   |         |  |   |         |  
|Earnings per share:                          |  |                         |         |      |   |         |  |   |         |  
|Basic earnings per share                     |  | $                       | 0.58    |      | $ | 0.44    |  | $ | 1.69    |  
|                                             |  |                         |         |      |   |         |  |   |         |  
|Weighted average number of common shares     |  |                         | 16,348  |      |   | 16,078  |  |   | 15,915  |  
|                                             |  |                         |         |      |   |         |  |   |         |  
|Diluted earnings per share                   |  | $                       | 0.58    |      | $ | 0.43    |  | $ | 1.64    |  
|                                             |  |                         |         |      |   |         |  |   |         |  
|Weighted average number of common shares     |  |                         | 16,481  |      |   | 16,429  |  |   | 16,421  |  
|                                             |  |                         |         |      |   |         |  |   |         |  



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



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SHILOH INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollar amounts in thousands)



|                                                                                  |  |                         |         |   |      |   |         |      |  |   |          |  
|--------------------------------------------------------------------------------- |  | ----------------------- | ------- | - | ---- | - | ------- | ---- |  | - | -------- | -
|                                                                                  |  | Years Ended October 31, |        
|                                                                                  |  | 2007                    |         |   | 2006 |   |         | 2005 | 
|CASH FLOWS FROM OPERATING ACTIVITIES:                                             |  |                         |         |   |      |   |         |      |  |   |          |  
|Net income                                                                        |  | $                       | 9,550   |   |      | $ | 7,118   |      |  | $ | 26,752   |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                         |         |   |      |   |         |      |  |   |          |  
|Depreciation and amortization                                                     |  |                         | 31,873  |   |      |   | 34,431  |      |  |   | 33,533   |  
|Amortization of deferred financing costs                                          |  |                         | 277     |   |      |   | 305     |      |  |   | 1,783    |  
|Asset impairment charges                                                          |  |                         | 137     |   |      |   | 3,072   |      |  |   | 1,586    |  
|Non-cash restructuring charges and pension curtailment                            |  |                         |        |   |      |   | 1,426   |      |  |   |         |  
|Deferred income taxes                                                             |  |                         | (2,391  | ) |      |   | (3,553  | )    |  |   | 1,001    |  
|Stock-based compensation expense                                                  |  |                         | 418     |   |      |   | 321     |      |  |   |         |  
|Amortization of unearned compensation                                             |  |                         |        |   |      |   |        |      |  |   | 106      |  
|Tax benefit on employee stock options and stock compensation                      |  |                         |        |   |      |   |        |      |  |   | 261      |  
|Loss on sale of assets                                                            |  |                         | 48      |   |      |   | 405     |      |  |   | 26       |  
|Changes in operating assets and liabilities:                                      |  |                         |         |   |      |   |         |      |  |   |          |  
|Accounts receivable                                                               |  |                         | 2,980   |   |      |   | 10,872  |      |  |   | (26,148  | )
|Inventories                                                                       |  |                         | 12,299  |   |      |   | (14,986 | )    |  |   | 7,522    |  
|Prepaids and other assets                                                         |  |                         | (263    | ) |      |   | 368     |      |  |   | 745      |  
|Payables and other liabilities                                                    |  |                         | 3,038   |   |      |   | (1,759  | )    |  |   | (31,019  | )
|Accrued income taxes                                                              |  |                         | 3,985   |   |      |   | (3,512  | )    |  |   | 1,848    |  
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |          |  
|Net cash provided by operating activities                                         |  |                         | 61,951  |   |      |   | 34,508  |      |  |   | 17,996   |  
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |          |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                             |  |                         |         |   |      |   |         |      |  |   |          |  
|Capital expenditures                                                              |  |                         | (9,262  | ) |      |   | (19,361 | )    |  |   | (22,394  | )
|Proceeds from sale of assets                                                      |  |                         | 220     |   |      |   | 560     |      |  |   | 218      |  
|Sale (purchase) of investment securities                                          |  |                         | 1,800   |   |      |   | (252    | )    |  |   | (252     | )
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |          |  
|Net cash used in investing activities                                             |  |                         | (7,242  | ) |      |   | (19,053 | )    |  |   | (22,428  | )
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |          |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                             |  |                         |         |   |      |   |         |      |  |   |          |  
|Proceeds from short-term borrowings                                               |  |                         | 922     |   |      |   | 1,008   |      |  |   | 923      |  
|Repayments of short-term borrowings                                               |  |                         | (935    | ) |      |   | (965    | )    |  |   | (917     | )
|Payment of capital lease                                                          |  |                         | (344    | ) |      |   | (326    | )    |  |   | (98      | )
|Increase (decrease) in overdraft balances                                         |  |                         | (5,637  | ) |      |   | 2,602   |      |  |   | 20,106   |  
|Proceeds from long-term borrowings                                                |  |                         | 45,100  |   |      |   | 23,627  |      |  |   | 169,300  |  
|Repayments of long-term borrowings                                                |  |                         | (53,652 | ) |      |   | (42,202 | )    |  |   | (182,651 | )
|Payment of dividends                                                              |  |                         | (40,872 | ) |      |   |        |      |  |   |         |  
|Proceeds from exercise of stock options                                           |  |                         | 234     |   |      |   | 314     |      |  |   | 197      |  
|Tax benefit on employee stock options and stock compensation                      |  |                         | 239     |   |      |   | 193     |      |  |   |         |  
|Redemption of preferred shares                                                    |  |                         |        |   |      |   |        |      |  |   | (4,524   | )
|Payment of deferred financing costs                                               |  |                         |        |   |      |   |        |      |  |   | (713     | )
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |          |  
|Net cash provided by (used in) financing activities                               |  |                         | (54,945 | ) |      |   | (15,749 | )    |  |   | 1,623    |  
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |          |  
|Net decrease in cash and cash equivalents                                         |  |                         | (236    | ) |      |   | (294    | )    |  |   | (2,809   | )
|Cash and cash equivalents at beginning of year                                    |  |                         | 367     |   |      |   | 661     |      |  |   | 3,470    |  
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |          |  
|Cash and cash equivalents at end of year                                          |  | $                       | 131     |   |      | $ | 367     |      |  | $ | 661      |  
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |          |  

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



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##### Table of Contents

SHILOH INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

(Dollar amounts in thousands, except per share data)



|                                                                                  |  |                               |    |   |                              |   |        |                            |  |                |     |  |                  |        |   |                      |   |         |                                   |  |   |                          |   |  |   |         |   |  |   |         |  
|--------------------------------------------------------------------------------- |  | ----------------------------- | -- | - | ---------------------------- | - | ------ | -------------------------- |  | -------------- | --- |  | ---------------- | ------ | - | -------------------- | - | ------- | --------------------------------- |  | - | ------------------------ | - |  | - | ------- | - |  | - | ------- | -
|                                                                                  |  | PreferredStock($.01 ParValue) |    |   | PreferredStockPaid-InCapital |   |        | CommonStock($.01 ParValue) |  | Paid-InCapital |     |  | RetainedEarnings |        |   | UnearnedCompensation |   |         | AccumulatedOtherComprehensiveLoss |  |   | TotalStockholdersEquity |  
|November 1, 2004                                                                  |  | $                             | 1  |   |                              | $ | 4,044  |                            |  | $              | 157 |  | $                | 57,428 |   |                      | $ | 85,153  |                                   |  | $ | (106                     | ) |  | $ | (17,116 | ) |  | $ | 129,561 |  
|Net income                                                                        |  |                               |   |   |                              |   |       |                            |  |                |    |  |                  |       |   |                      |   | 26,752  |                                   |  |   |                         |   |  |   |        |   |  |   | 26,752  |  
|Minimum pension liability, net of tax benefit of $131                             |  |                               |   |   |                              |   |       |                            |  |                |    |  |                  |       |   |                      |   |        |                                   |  |   |                         |   |  |   | (2,299  | ) |  |   | (2,299  | )
|Fair value of hedge                                                               |  |                               |   |   |                              |   |       |                            |  |                |    |  |                  |       |   |                      |   |        |                                   |  |   |                         |   |  |   | 6       |   |  |   | 6       |  
|Unrealized holding gain                                                           |  |                               |   |   |                              |   |       |                            |  |                |    |  |                  |       |   |                      |   |        |                                   |  |   |                         |   |  |   | 35      |   |  |   | 35      |  
|                                                                                  |  |                               |    |   |                              |   |        |                            |  |                |     |  |                  |        |   |                      |   |         |                                   |  |   |                          |   |  |   |         |   |  |   |         |  
|Comprehensive income                                                              |  |                               |   |   |                              |   |       |                            |  |                |    |  |                  |       |   |                      |   |        |                                   |  |   |                         |   |  |   |        |   |  |   | 24,494  |  
|Redemption of preferred shares                                                    |  |                               | (1 | ) |                              |   | (4,044 | )                          |  |                |    |  |                  |       |   |                      |   | (232    | )                                 |  |   |                         |   |  |   |        |   |  |   | (4,277  | )
|Exercise of stock options                                                         |  |                               |   |   |                              |   |       |                            |  |                |    |  |                  | 278    |   |                      |   |        |                                   |  |   |                         |   |  |   |        |   |  |   | 278     |  
|Related party transactions with MTD Consumer Group Inc, net of tax of $4          |  |                               |   |   |                              |   |       |                            |  |                |    |  |                  | (7     | ) |                      |   |        |                                   |  |   |                         |   |  |   |        |   |  |   | (7      | )
|Issuance of common stock in connection with unearned compensation                 |  |                               |   |   |                              |   |       |                            |  |                | 2   |  |                  | 177    |   |                      |   |        |                                   |  |   |                         |   |  |   |        |   |  |   | 179     |  
|Unearned compensation                                                             |  |                               |   |   |                              |   |       |                            |  |                |    |  |                  |       |   |                      |   |        |                                   |  |   | 106                      |   |  |   |        |   |  |   | 106     |  
|                                                                                  |  |                               |    |   |                              |   |        |                            |  |                |     |  |                  |        |   |                      |   |         |                                   |  |   |                          |   |  |   |         |   |  |   |         |  
|October 31, 2005                                                                  |  |                               |   |   |                              |   |       |                            |  |                | 159 |  |                  | 57,876 |   |                      |   | 111,673 |                                   |  |   |                         |   |  |   | (19,374 | ) |  |   | 150,334 |  
|Net income                                                                        |  |                               |   |   |                              |   |       |                            |  |                |    |  |                  |       |   |                      |   | 7,118   |                                   |  |   |                         |   |  |   |        |   |  |   | 7,118   |  
|Minimum pension liability, net of tax of $2,146                                   |  |                               |   |   |                              |   |       |                            |  |                |    |  |                  |       |   |                      |   |        |                                   |  |   |                         |   |  |   | 3,734   |   |  |   | 3,734   |  
|Fair value of hedge, net of tax benefit of $1                                     |  |                               |   |   |                              |   |       |                            |  |                |    |  |                  |       |   |                      |   |        |                                   |  |   |                         |   |  |   | (3      | ) |  |   | (3      | )
|Unrealized holding gain, net of tax of $83                                        |  |                               |   |   |                              |   |       |                            |  |                |    |  |                  |       |   |                      |   |        |                                   |  |   |                         |   |  |   | 5       |   |  |   | 5       |  
|                                                                                  |  |                               |    |   |                              |   |        |                            |  |                |     |  |                  |        |   |                      |   |         |                                   |  |   |                          |   |  |   |         |   |  |   |         |  
|Comprehensive income                                                              |  |                               |   |   |                              |   |       |                            |  |                |    |  |                  |       |   |                      |   |        |                                   |  |   |                         |   |  |   |        |   |  |   | 10,854  |  
|Exercise of stock options                                                         |  |                               |   |   |                              |   |       |                            |  |                | 4   |  |                  | 503    |   |                      |   |        |                                   |  |   |                         |   |  |   |        |   |  |   | 507     |  
|Stock options compensation cost                                                   |  |                               |   |   |                              |   |       |                            |  |                |    |  |                  | 321    |   |                      |   |        |                                   |  |   |                         |   |  |   |        |   |  |   | 321     |  
|                                                                                  |  |                               |    |   |                              |   |        |                            |  |                |     |  |                  |        |   |                      |   |         |                                   |  |   |                          |   |  |   |         |   |  |   |         |  
|October 31, 2006                                                                  |  |                               |   |   |                              |   |       |                            |  |                | 163 |  |                  | 58,700 |   |                      |   | 118,791 |                                   |  |   |                         |   |  |   | (15,638 | ) |  |   | 162,016 |  
|Net income                                                                        |  |                               |   |   |                              |   |       |                            |  |                |    |  |                  |       |   |                      |   | 9,550   |                                   |  |   |                         |   |  |   |        |   |  |   | 9,550   |  
|Minimum pension liability, net of tax of $5,208                                   |  |                               |   |   |                              |   |       |                            |  |                |    |  |                  |       |   |                      |   |        |                                   |  |   |                         |   |  |   | 9,900   |   |  |   | 9,900   |  
|Fair value of hedge, net of tax benefit of $2                                     |  |                               |   |   |                              |   |       |                            |  |                |    |  |                  |       |   |                      |   |        |                                   |  |   |                         |   |  |   | (3      | ) |  |   | (3      | )
|Unrealized holding gain, net of tax of $83                                        |  |                               |   |   |                              |   |       |                            |  |                |    |  |                  |       |   |                      |   |        |                                   |  |   |                         |   |  |   | (138    | ) |  |   | (138    | )
|                                                                                  |  |                               |    |   |                              |   |        |                            |  |                |     |  |                  |        |   |                      |   |         |                                   |  |   |                          |   |  |   |         |   |  |   |         |  
|Comprehensive income                                                              |  |                               |   |   |                              |   |       |                            |  |                |    |  |                  |       |   |                      |   |        |                                   |  |   |                         |   |  |   |        |   |  |   | 19,309  |  
|Adjustment recognized upon adoption of SFAS No. 158, net of tax benefit of $3,443 |  |                               |   |   |                              |   |       |                            |  |                |    |  |                  |       |   |                      |   |        |                                   |  |   |                         |   |  |   | (6,282  | ) |  |   | (6,282  | )
|Exercise of stock options                                                         |  |                               |   |   |                              |   |       |                            |  |                | 1   |  |                  | 234    |   |                      |   |        |                                   |  |   |                         |   |  |   |        |   |  |   | 235     |  
|Stock options compensation cost                                                   |  |                               |   |   |                              |   |       |                            |  |                |    |  |                  | 418    |   |                      |   |        |                                   |  |   |                         |   |  |   |        |   |  |   | 418     |  
|Tax benefit on stock options and stock option compensation cost                   |  |                               |   |   |                              |   |       |                            |  |                |    |  |                  | 239    |   |                      |   |        |                                   |  |   |                         |   |  |   |        |   |  |   | 239     |  
|Related party transactions with MTD Consumer Group Inc.                           |  |                               |   |   |                              |   |       |                            |  |                |    |  |                  | 200    |   |                      |   |        |                                   |  |   |                         |   |  |   |        |   |  |   | 200     |  
|Cash dividend, $2.50 per share                                                    |  |                               |   |   |                              |   |       |                            |  |                |    |  |                  |       |   |                      |   | (40,872 | )                                 |  |   |                         |   |  |   |        |   |  |   | (40,872 | )
|                                                                                  |  |                               |    |   |                              |   |        |                            |  |                |     |  |                  |        |   |                      |   |         |                                   |  |   |                          |   |  |   |         |   |  |   |         |  
|October 31, 2007                                                                  |  | $                             |   |   |                              | $ |       |                            |  | $              | 164 |  | $                | 59,791 |   |                      | $ | 87,469  |                                   |  | $ |                         |   |  | $ | (12,161 | ) |  | $ | 135,263 |  
|                                                                                  |  |                               |    |   |                              |   |        |                            |  |                |     |  |                  |        |   |                      |   |         |                                   |  |   |                          |   |  |   |         |   |  |   |         |  

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



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##### Table of Contents

SHILOH INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands, except per share data)

Note 1Summary of Significant Accounting Policies

General

Shiloh Industries, Inc. and its subsidiaries (the Company) is a full service manufacturer of first operation blanks, engineered welded blanks,
complex stampings and modular assemblies for the automotive, heavy truck and other industrial markets. In addition, the Company is a designer and engineer of precision tools and dies and welding and assembly equipment for use in its blanking and
stamping operations and for sale to original equipment manufacturers (OEMs), Tier I automotive suppliers and other industrial customers. The Companys blanks, which are engineered two dimensional shapes cut from flat-rolled steel,
are principally sold to automotive and truck OEMs and are used for exterior steel components, such as fenders, hoods and doors. These blanks include first operation exposed and unexposed blanks and more advanced engineered welded blanks. Engineered
welded blanks generally consist of two or more sheets of steel of the same or different material grade, thickness, or coating that are welded together utilizing both mash seam resistance and laser welding. The Companys stampings are
principally used as components in mufflers, seat frames, structural rails, window lifts, heat shields, vehicle brakes and other structural body components.

The Company also builds modular assemblies, which include components used in the structural and powertrain systems of a vehicle. Structural systems include bumper beams, door impact beams, steering column supports,
chassis components and structural underbody modules. Powertrain systems consist of deep draw components, such as oil pans, transmission pans and valve covers. Additionally, the Company provides a variety of intermediate steel processing services,
such as oiling, leveling, cutting-to-length, slitting, edge trimming of hot and cold-rolled steel coils and inventory control services for automotive and steel industry customers. The Company has fifteen wholly owned subsidiaries at locations in
Ohio, Michigan, Georgia, Tennessee and Mexico.

More than 50% of the Companys publicly traded shares of Common Stock are owned by MTD
Holdings Inc and the MTD Products Inc Master Employee Benefit Trust, a trust fund established and sponsored by MTD Products, making MTD a related party of the Company.

Principles of Consolidation

The consolidated financial statements include the accounts of
Shiloh Industries, Inc. and all wholly-owned subsidiaries. All significant intercompany transactions have been eliminated.

Revenue
Recognition

In accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 104, the Company recognizes
revenue when there is evidence of a sales agreement, the delivery of goods has occurred, the sales price is fixed or determinable and collectibility of revenue is reasonably assured. The Company records revenues upon shipment of product to customers
and transfer of title under standard commercial terms. Price adjustments are recognized in the period when management believes that such amounts become probable.

Shipping and Handling Costs

The Company classifies all amounts billed to a customer in a
sales transaction related to shipping and handling as revenue and the costs incurred by the Company for shipping and handling are classified as costs of sales.



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SHILOH INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Inventories

Inventories are valued at the lower of cost or market, using the first-in first-out (FIFO) method.

Property, Plant and Equipment

Property, plant and equipment are stated at cost. Expenditures for maintenance, repairs and renewals are charged to expense as incurred, while major improvements are capitalized. The cost of these improvements is depreciated over their
estimated useful lives. Useful lives range from five to twelve years for furniture and fixtures and machinery and equipment, or if the assets are dedicated to a customer program, over the estimated life of that program, ten to twenty years for land
improvements and twenty to forty years for buildings and their related improvements. Depreciation is computed using the straight-line method for financial reporting purposes and accelerated methods for income tax purposes. When assets are retired or
otherwise disposed, the related cost and accumulated depreciation are removed from the accounts, and any gain or loss on the disposition is included in the earnings for the current period.

Employee Benefit Plans

The
Company accrues the cost of defined benefit pension plans, which cover a majority of the Companys employees in accordance with Statement of Financial Accounting Standards (SFAS) No. 87, Employers Accounting for
Pensions. The plans are funded based on the requirements and limitations of the Employee Retirement Income Security Act of 1974. The majority of employees of the Company also participate in discretionary profit sharing plans administered by
the Company. The Company also provides postretirement benefits to approximately 180 employees.

In September 2006, the FASB issued SFAS
No. 158 Employers Accounting for Defined Benefit Pension and Other Postretirement Plans  an amendment of FASB Statements No. 87, 88, 106, and 132(R). SFAS 158 requires an employer to recognize a plans funded
status in its statement of financial position, measure a plans assets and obligations as of the end of the employers fiscal year and recognize the changes in a defined benefit postretirement plans funded status in comprehensive
income in the year in which the changes occur. For the Company, SFAS 158s requirement to recognize the funded status of a benefit plan and new disclosure requirements became effective as of the end of the fiscal year ending October 31,
2007. The requirement to measure plan assets and benefit obligations as of the date of the employers fiscal year-end statement of financial position is effective for fiscal years ending after December 15, 2008. See footnote 9 for
discussion of the effect of SFAS 158 on the Companys financial position, results of operations and cash flows.

Stock-Based
Compensation

Effective November 1, 2005, the Company adopted SFAS No. 123 (Revised 2004), Share-Based
Payment. For the Company, SFAS No. 123R affects the stock options that have been granted and requires the Company to expense share-based payment (SBP) awards with compensation cost for SBP transactions measured at fair value.
The Company adopted the modified-prospective transition method and accordingly did not restate amounts in prior fiscal years. The Company has elected to use the simplified method of calculating the expected term of the stock options and historical
volatility to compute fair value under the Black-Scholes option-pricing model. The risk-free rate for periods within the contractual life of the option is based on the U.S. zero coupon Treasury yield in effect at the time of grant. Forfeitures have
been estimated to be zero.

In accordance with the provisions of SFAS No. 148, Accounting for Stock-Based
CompensationTransition and Disclosurean amendment of SFAS No. 123 (SFAS No. 148), the Company elected to continue applying



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SHILOH INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



the intrinsic value approach under the APB Opinion No. 25 in accounting for its stock-based compensation plans prior to November 1, 2005.
Accordingly, the Company did not recognize compensation expense for stock options when the exercise price at the grant date was equal to or greater than the fair market value of the stock at that date.

The following table illustrates the effect on net income and net income per share as if the fair value based method had been applied to all outstanding
and vested awards in each period:



|                                                                    |  |      |        |  
|------------------------------------------------------------------- |  | ---- | ------ | -
|                                                                    |  | 2005 |       
|Net income, as reported                                             |  | $    | 26,752 |  
|Less: Cumulative preferred stock dividend, as if declared           |  |      |       |  
|Add back: Stock-based compensation expense, net of tax, as reported |  |      | 65     |  
|Less: Stock-based compensation expense, net of tax, pro forma       |  |      | (453   | )
|                                                                    |  |      |        |  
|Pro forma net income                                                |  | $    | 26,364 |  
|                                                                    |  |      |        |  
|Basic net income per shareas reported                              |  | $    | 1.69   |  
|Basic net income per sharepro forma                                |  | $    | 1.67   |  
|Diluted net income per shareas reported                            |  | $    | 1.64   |  
|Diluted net income per sharepro forma                              |  | $    | 1.62   |  

Income Taxes

In accordance with SFAS No. 109, Accounting for Income Taxes, the Company utilizes the asset and liability method in accounting for
income taxes. This method requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Companys consolidated financial statements or tax returns. Deferred
tax assets and liabilities are determined based on the difference between the financial statement and tax bases of various assets and liabilities and operating loss and tax credit carryforwards using enacted rates in effect for the year in which
differences are expected to reverse. The Company establishes a valuation allowance against deferred tax assets whenever it is more likely than not that such deferred tax assets will not be realized.

Impairment

The Company
evaluates the recoverability of long-lived assets and the related estimated remaining lives whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Events or changes in circumstances which could cause an
impairment include significant underperformance relative to the expected historical or projected future operating results, significant changes in the manner of the use of the acquired assets or the strategy for the overall business or significant
negative industry or economic trends. The Company records an impairment or change in useful life whenever events or changes in circumstances indicate that the carrying amount of long-lived assets may not be recoverable or the useful life has changed
in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets.

Comprehensive
Income

SFAS No. 130, Comprehensive Income, establishes standards for reporting and display of comprehensive income
and its components in financial statements. Comprehensive income consists of net income, pension related liability adjustments, net unrealized holding gains on available for sale securities and the fair value of hedge adjustments and is presented in
the consolidated statements of stockholders equity.



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##### Table of Contents

SHILOH INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Statement of Cash Flows Information

Cash and cash equivalents include checking accounts and all highly liquid investments with an original maturity of three months or less.

Supplemental disclosures of cash flow information are as follows:



|                                             |  |                         |       |      |   |       |  |   |      
|-------------------------------------------- |  | ----------------------- | ----- | ---- | - | ----- |  | - | -----
|                                             |  | Years Ended October 31,
|                                             |  | 2007                    |       | 2006 |   | 2005 
|Cash paid for:                               |  |                         |       |      |   |       |  |   |      
|Interest                                     |  | $                       | 7,054 |      | $ | 6,194 |  | $ | 6,298
|Income taxes, net of refunds                 |  | $                       | 5,318 |      | $ | 9,857 |  | $ | 5,485
|Non-cash investing and financing activities: |  |                         |       |      |   |       |  |   |      
|Purchase of assets under capital lease       |  | $                       |      |      | $ | 463   |  | $ |     

Concentration of Credit Risk

The Company sells products to customers primarily in the automotive and heavy truck industries. Financial instruments, which potentially subject the
Company to concentration of credit risk, are primarily accounts receivable. The Company performs on-going credit evaluations of its customers financial condition. The allowance for non-collection of accounts receivable is based on the expected
collectibility of all accounts receivable. Losses have historically been within managements expectations. The Company does not have financial instruments with off-balance sheet risk. Refer to Note 14Business Segment Information for
discussion of concentration of revenues.

As of October 31, 2007, the Company had approximately 1,780 employees. A total of
approximately 270 employees at three of the Companys subsidiaries are covered by three collective bargaining agreements that are due to expire in August 2008, June 2011 and November 2012.

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, trade receivables and payables approximate fair value because of the short maturity of those instruments. The carrying value of the Companys debt is considered to approximate the fair
value of these instruments based on the borrowing rates currently available to the Company for loans with similar terms and maturities.

In
accordance with SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities, the Company determined that all of its investments associated with the supplemental executive retirement plan were classified as
available-for-sale. These investments were carried at fair value, and the unrealized gain was reported in other comprehensive income, until fiscal 2007 when the investments were sold and the gain was realized. The realized gain of $243 is reflected
in other income in the accompanying consolidated statement of operations for fiscal 2007.

Derivative Financial Instruments

The Company does not engage in derivatives trading, market-making or other speculative activities. The intent of any contracts entered by
the Company is to reduce exposure to currency movements affecting foreign currency purchase commitments. The Companys risks related to foreign currency exchange risks have historically not been material. The Company does not expect the effects
of these risks to be material in the future based on current operating and economic conditions in the countries and markets in which it operates. These contracts are marked-to-market and the resulting gain or loss is recorded in the consolidated
statements of



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SHILOH INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



operations in accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities (SFAS No. 133), as
amended. As of October 31, 2007 and 2006, there were no foreign currency forward exchange contracts outstanding.

In the normal course
of business, the Company employs established policies and procedures to manage exposure to changes in interest rates. The Companys objective in managing the exposure to interest rate changes is to limit the volatility and impact of interest
rate changes on earnings and cash flows. In January 2005, the Company entered into a $25,000 interest rate collar agreement that resulted in fixing the interest rate on a portion of the term loan under the Amended Credit Agreement between a floor of
3.08% and a cap of 5.25%. The collar agreement terminated on January 12, 2007.

In accordance with SFAS No. 133, the Company
designated the interest rate collar as a cash flow hedge and recognized the fair value of the interest rate swap agreement on the consolidated balance sheet. Gains and losses related to a hedge and that resulted from changes in the fair value of the
hedge were either recognized in income immediately to offset the gain or loss on the hedged item, or deferred and reported as a component of other comprehensive income (loss) in stockholders equity and subsequently recognized in income when
the hedged item affects net income. The ineffective portion of the change in fair value of a hedge was recognized in income immediately. There was no hedge ineffectiveness for the years ended October 31, 2007, 2006 and 2005. The deferred gains
on the hedge were recognized in the accompanying consolidated statement of operations upon termination of the hedge in the first quarter of fiscal 2007.

Guarantees

The Company adopted FASB Interpretation No. 45, Guarantors
Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, an Interpretation of FASB Statements No. 5, 57 and 107 and Rescission of FASB Interpretation No. 34 (FIN
No. 45), during fiscal 2003. The Company has certain indemnification clauses within its credit facility and certain lease agreements that are considered to be guarantees within the scope of FIN No. 45. The Company does not consider
these guarantees to be probable and the Company cannot estimate the maximum exposure. Additionally, the Companys exposure to warranty-related obligations is not material.

Accounting Estimates

The
preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management reviews its estimates based upon
current available information. Actual results could differ from those estimates.

Other New Accounting Standards

In July 2006, the FASB issued FIN No. 48, Accounting for Uncertainty in Income Taxes  an interpretation of FASB Statement
No. 109. FIN No. 48 prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN No. 48 also provides
guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. FIN No. 48 is effective for fiscal years beginning after December 15, 2006. The Company is continuing to evaluate
the impact that FIN 48 could have on its financial position and results of operations when adopted and the Company estimates, at this time, that the adoption could result in a charge to beginning retained earnings at November 1, 2007, in the
range of approximately $1,500 to $2,500.



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SHILOH INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Note 2Asset Impairment and Restructuring Charges

In October 2006, management presented to the Board of Directors an assessment of its current business at its Cleveland Stamping facility. This facility,
which is leased from MTD Products Inc. (MTD) as part of the acquisition by the Company of MTD Automotive in 1999, is faced with declining business volumes. The two major customers at the Cleveland Stamping facility have concluded
programs for which the Company provided components. The Company therefore committed to a plan to cease operation of the Cleveland facility as of October 31, 2007. As a result, the Company has recorded an impairment charge to reduce long-lived
assets, acquired since the acquisition, to their estimated fair value. The Company recorded an estimated restructuring charge related to approximately 200 employees for severance, health insurance and curtailment of the retirement plan for employees
of the Cleveland plant at October 31, 2006, and made adjustments to these estimates in fiscal 2007 as the plan to cease operation was put into effect. A summary of these charges, which are included in the accompanying consolidated statements of
operations for fiscal 2007 and 2006, is below.



|                       |  |      |     |      |   |      
|---------------------- |  | ---- | --- | ---- | - | -----
|                       |  | 2007 |     | 2006
|Asset impairment       |  | $    | 137 |      | $ | 3,072
|                       |  |      |     |      |   |      
|Restructuring          |  |      |     |      |   |      
|Severance and benefits |  |      | 100 |      | $ | 750  
|Pension curtailment    |  |      |    |      |   | 875  
|                       |  |      |     |      |   |      
|Total restructuring    |  | $    | 100 |      | $ | 1,625
|                       |  |      |     |      |   |      

An analysis of restructuring charges and related reserves of the Company for fiscal 2007 is as
follows:



|                       |  |                                           |     |                       |   |               |  |   |                                           |   |  |   |    
|---------------------- |  | ----------------------------------------- | --- | --------------------- | - | ------------- |  | - | ----------------------------------------- | - |  | - | ---
|                       |  | Restructuring Reserves atOctober 31, 2006 |     | Restructuring Charges |   | Cash Payments |  |   | Restructuring Reserves atOctober 31, 2007
|Restructuring          |  |                                           |     |                       |   |               |  |   |                                           |   |  |   |    
|Severance and benefits |  | $                                         | 750 |                       | $ | 100           |  | $ | (599                                      | ) |  | $ | 251
|                       |  |                                           |     |                       |   |               |  |   |                                           |   |  |   |    

Note 3Accounts Receivable

Accounts receivable are expected to be collected within one year and are net of an allowance for doubtful accounts in the amount of $685 and $680 at
October 31, 2007 and 2006, respectively. The Company recognized net bad debt expense of $653, $247 and $659 during fiscal 2007, 2006 and 2005, respectively, in the consolidated statement of operations.

The Company continually monitors its exposure with its customers and additional consideration is given to individual accounts in light of the market
conditions in the automotive industry.

Note 4Inventories



|                                      |  |             |        |      |   |       
|------------------------------------- |  | ----------- | ------ | ---- | - | ------
|                                      |  | October 31,
|                                      |  | 2007        |        | 2006
|Inventories consist of the following: |  |             |        |      |   |       
|Raw materials                         |  | $           | 13,493 |      | $ | 17,937
|Work-in-process                       |  |             | 5,441  |      |   | 6,232 
|Finished goods                        |  |             | 11,893 |      |   | 12,961
|                                      |  |             |        |      |   |       
|Total material                        |  |             | 30,827 |      |   | 37,130
|Tooling                               |  |             | 1,518  |      |   | 7,514 
|                                      |  |             |        |      |   |       
|Total inventory                       |  | $           | 32,345 |      | $ | 44,644
|                                      |  |             |        |      |   |       



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SHILOH INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Total cost of inventory is net of reserves to reduce certain inventory from cost to net realizable
value. Such reserves aggregated $2,832 and $2,238 at October 31, 2007 and 2006, respectively.

Note 5Other Assets



|                                       |  |             |       |      |   |      
|-------------------------------------- |  | ----------- | ----- | ---- | - | -----
|                                       |  | October 31,
|                                       |  | 2007        |       | 2006
|Other assets consist of the following: |  |             |       |      |   |      
|Long-term pension assets               |  | $           | 354   |      | $ | 1,078
|Deferred financing costs               |  |             | 523   |      |   | 800  
|Other                                  |  |             | 133   |      |   | 126  
|                                       |  |             |       |      |   |      
|Total                                  |  | $           | 1,010 |      | $ | 2,004
|                                       |  |             |       |      |   |      

Deferred financing costs are amortized over the term of the debt. During fiscal 2007, 2006 and
2005, amortization of these costs amounted to $277, $305 and $1,783, respectively. Accumulated amortization was $3,056 and $2,779 as of October 31, 2007 and 2006, respectively. The Company recorded additional amortization of deferred financing
costs as a result of entry into the amended and restated credit agreement on January 18, 2005 in the amount of $1,322 in fiscal 2005.

Investments in the rabbi trust were classified as other current assets at October 31, 2006 in the accompanying consolidated balance sheet. These assets were liquidated in January 2007 in order to pay the liability generated by the
Supplemental Executive Retirement Plan. See Note 11 for further discussion of the President and Chief Executive Officer Employment Agreement.

Note
6Property, Plant and Equipment

Property, plant and equipment consist of the following:



|                                   |  |             |         |      |   |        
|---------------------------------- |  | ----------- | ------- | ---- | - | -------
|                                   |  | October 31,
|                                   |  | 2007        |         | 2006
|Land                               |  | $           | 8,588   |      | $ | 8,530  
|Buildings and improvements         |  |             | 104,109 |      |   | 103,814
|Machinery and equipment            |  |             | 333,919 |      |   | 326,170
|Furniture and fixtures             |  |             | 10,402  |      |   | 21,471 
|Construction in progress           |  |             | 8,977   |      |   | 8,775  
|                                   |  |             |         |      |   |        
|Total, at cost                     |  |             | 465,995 |      |   | 468,760
|Less: Accumulated depreciation     |  |             | 266,150 |      |   | 246,937
|                                   |  |             |         |      |   |        
|Property, plant and equipment, net |  | $           | 199,845 |      | $ | 221,823
|                                   |  |             |         |      |   |        

Depreciation expense was $31,873, $34,431 and $33,533 in fiscal 2007, 2006 and 2005, respectively.

During the years ended October 31, 2007, 2006 and 2005, interest capitalized as part of property, plant and equipment was $341, $538
and $352, respectively. The Company had commitments for capital expenditures of approximately $2,855 at October 31, 2007. At October 31, 2007 and 2006, property, plant and equipment included equipment with a cost of $1,015 and $1,050 and
accumulated depreciation of $768 and $546, respectively, as a result of capital leases outstanding.



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SHILOH INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



The Company adopted FIN 47 as of October 31, 2006. As a result, the Company recorded an asset
retirement cost of $170, related accumulated depreciation of $111 and a liability for the asset retirement obligation of $170, measured using current cost estimates on an undiscounted basis. The remaining asset retirement cost of $59 was impaired
during fiscal 2007. The costs represent the Companys estimates of costs that could be incurred in order to properly dispose of the related property, if such disposal were to occur. The cost and accumulated depreciation are included in the
table above and the obligation for asset retirement is included in other liabilities in the accompanying consolidated balance sheet. The effect of adopting FIN 47 represents the effect of depreciating the asset retirement cost over the life of the
related property from its acquisition through October 31, 2006. The effect was $69 after tax, or less than $.01 per share. Because of the immaterial impact of the accounting change, the expense associated with the adoption of FIN 47 was
included in cost of sales in the accompanying consolidated statement of operations.

The Companys lease of the Cleveland Stamping
facility from MTD Products Inc contains a provision that could require the Company, at the lessors option, to remove the plant and restore the property, exclusive of environmental matters that pre-date the beginning of the lease. The estimate
of this conditional asset retirement obligation requires management to make significant estimates and assumptions relating to the measurement of such liabilities, which could be impacted by the Companys restructuring plan (see Note 2). Any
change in the estimate will be accounted for in accordance with FIN 47. Management does not currently believe that any such change would be material to the Companys financial position, results of operations or cash flows.

Note 7Financing Arrangements

Debt consists of
the following:



|                                                                                                             |  |             |        |      |   |       
|------------------------------------------------------------------------------------------------------------ |  | ----------- | ------ | ---- | - | ------
|                                                                                                             |  | October 31,
|                                                                                                             |  | 2007        |        | 2006
|Amended and Restated Credit Agreementinterest at 6.86% and 6.81% at October 31, 2007 and 2006, respectively |  | $           | 73,600 |      | $ | 80,300
|Insurance broker financing agreement                                                                         |  |             | 496    |      |   | 508   
|State of Ohio promissory note                                                                                |  |             | 1,291  |      |   | 1,612 
|Two-year notes                                                                                               |  |             | 504    |      |   | 2,035 
|Capital lease debt                                                                                           |  |             | 83     |      |   | 429   
|                                                                                                             |  |             |        |      |   |       
|Total debt                                                                                                   |  |             | 75,974 |      |   | 84,884
|Less: Current debt                                                                                           |  |             | 11,411 |      |   | 12,705
|                                                                                                             |  |             |        |      |   |       
|Total long-term debt                                                                                         |  | $           | 64,563 |      | $ | 72,179
|                                                                                                             |  |             |        |      |   |       

The weighted average interest rate of all debt excluding the capital lease debt was 7.00% and
6.36% and 5.00% for fiscal years 2007, 2006 and 2005, respectively.

The Companys Amended and Restated Credit Agreement (the
Amended Credit Agreement) provides the Company with borrowing capacity in the form of a five-year $125,000 revolving credit facility and a five-year term loan of $50,000, each maturing January 2010. The balance of the term loan at
October 31, 2007 and 2006 was $22,500 and $32,500, respectively.

Under the Amended Credit Agreement, the Company has the option to
select the applicable interest rate based upon two indicesa Base Rate, as defined in the Amended Credit Agreement, or the Eurodollar rate, as adjusted by the Eurocurrency Reserve Percentage, if any (LIBOR). The selected index is
combined with a



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SHILOH INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



designated margin from an agreed upon pricing matrix. The Base Rate is the greater of the LaSalle Bank publicly announced prime rate or the Federal Funds
effective rate plus 0.5% per annum. LIBOR is the published Bloomberg Financial Markets Information Service rate. At October 31, 2007, the interest rate for the revolving credit facility and the term loan was LIBOR plus 1.75%. The margins
for the revolving credit facility and the term loan have increased from the margins in place at October 31, 2006 as a result of funds borrowed under the Amended Credit Agreement to pay a special dividend that was declared by the Board of
Directors of the Company on December 20, 2006 and paid on January 19, 2007 to shareholders of record as of January 5, 2007. The declaration of such a dividend was permissible due to a further amendment of the Amended Credit Agreement
to specifically exclude up to $41,000 paid as a special dividend from the fixed coverage ratio.

Borrowings under the Amended Credit
Agreement are collateralized by a first priority security interest in substantially all of the tangible and intangible property of the Company and its domestic subsidiaries and 65% of the stock of foreign subsidiaries.

The Amended Credit Agreement requires the Company to observe several financial covenants. At October 31, 2007, the covenants required a minimum
fixed coverage ratio of 1.25 to 1.00, a maximum leverage ratio of 2.75 to 1.00 and a minimum net worth equal to the sum of $100,000 plus 50% of consolidated net income since October 31, 2004. The Amended Credit Agreement also establishes limits
for additional borrowings, dividends, investments, acquisitions or mergers and sales of assets. At October 31, 2007, the Company was in compliance with the covenants under the Amended Credit Agreement.

Borrowings under the revolving credit facility must be repaid in full in January 2010. Repayments of borrowings under the term loan began in March 2005
in equal quarterly installments of $2,500 with the final payment due on December 31, 2009. The Company may prepay the borrowings under the revolving credit facility and the term loan without penalty.

The Amended Credit Agreement specifies that upon the occurrence of an event or condition deemed to have a material adverse effect on the business or
operations of the Company, as determined by the administrative agent of the lending syndicate or the required lenders, as defined, of 51% of the aggregate commitment under the Amended Credit Agreement, the outstanding borrowings become due and
payable. However, the Company does not anticipate at this time any change in business conditions or operations that could be deemed as a material adverse change by the lenders.

In July 2007, the Company entered into a finance agreement with an insurance broker for various insurance policies that bears interest at a fixed rate of
5.79% and requires monthly payments of $84 through April 2008. In July 2006, the Company entered into a finance agreement with an insurance broker for various insurance policies that bore interest at a fixed rate of 6.67% and required monthly
payments of $103 through April 2007. As of October 31, 2007 and 2006, $496 and $508, respectively, remained outstanding under these agreements and were classified as current debt in the Companys consolidated balance sheet.

In June 2004, the Company issued a $2,000 promissory note to the State of Ohio related to specific machinery and equipment at one of the Companys
Ohio facilities. The promissory note bore interest at 1% for the first year of the term and 3% per annum for the balance of the term, with interest only payments for the first year of the term. Principal payments began in August 2005 in the
amount of $25, and monthly principal payments continue thereafter increasing annually until July 2011, when the loan matures. The Company may prepay this promissory note without penalty.



45



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##### Table of Contents

SHILOH INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



During fiscal 2006, the Company entered into two two-year note agreements with a bank to finance the
purchase of equipment that the Company formerly leased. The notes bear interest at 6.56% and 6.91%, respectively, and require monthly payments of $55 and $81, respectively, through December 2007 and March 2008. In addition, the Company entered into
a two-year capital lease agreement in the amount of $463 for computer software.

Scheduled repayments under the terms of the Amended Credit
Agreement plus repayments of other debt for the next five years and beyond are listed below:



|                    |  |                  |        |            |   |       |  |   |       
|------------------- |  | ---------------- | ------ | ---------- | - | ----- |  | - | ------
|Year                |  | Credit Agreement |        | Other Debt |   | Total
|2008                |  | $                | 10,000 |            | $ | 1,411 |  | $ | 11,411
|2009                |  |                  | 10,000 |            |   | 342   |  |   | 10,342
|2010                |  |                  | 53,600 |            |   | 351   |  |   | 53,951
|2011                |  |                  |       |            |   | 270   |  |   | 270   
|2012                |  |                  |       |            |   |      |  |   |      
|2013 and thereafter |  |                  |       |            |   |      |  |   |      
|                    |  |                  |        |            |   |       |  |   |       
|Total               |  | $                | 73,600 |            | $ | 2,374 |  | $ | 75,974
|                    |  |                  |        |            |   |       |  |   |       

After considering letters of credit of $5,654 that the Company has issued, available funds under
the Amended Credit Agreement were $68,246 at October 31, 2007. Overdraft balances were $17,071 and $22,708 at October 31, 2007 and 2006, respectively, and are included in accounts payable in the Companys accompanying consolidated
balance sheets.

Assets under capital leases, which consist primarily of telephone hardware and equipment and software, are accounted for
in accordance with SFAS No. 13, Accounting for Leases, as amended, using interest rates appropriate at the inception of the lease. Future minimum lease payments for these assets under capital leases as of October 31, 2007 are
as follows:



|                                         |  |   |   
|---------------------------------------- |  | - | --
|2008                                     |  | $ | 81
|2009                                     |  |   | 2 
|                                         |  |   |   
|Total minimum obligations                |  |   | 83
|Less interest                            |  |   |  
|                                         |  |   |   
|Present value of net minimum obligations |  |   | 83
|Current portion                          |  |   | 81
|                                         |  |   |   
|Long-term portion                        |  | $ | 2 
|                                         |  |   |   

Note 8Operating Leases

The Company leases material handling, manufacturing and office equipment under operating leases with terms that ranged from three to ten years at inception. The leases do not include step rent provisions, escalation
clauses, capital improvement funding or other lease concessions that qualify the leases as a contingent rental under the definition of paragraph 5(n) of SFAS 13, as amended by SFAS 29. Also, the leases do not include a variable related to a
published index. The Companys operating leases are charged to expense over the lease term, on a straight-line basis, in accordance with SFAS 13.



46



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SHILOH INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



The longest lease term of the Companys current leases extends to December 2013. Rent expense
under operating leases for fiscal years 2007, 2006 and 2005 was $3,888, $5,342 and $6,696, respectively. Future minimum lease payments under operating leases are as follows at October 31, 2007:



|     |  |   |      
|---- |  | - | -----
|2008 |  | $ | 2,542
|2009 |  |   | 2,496
|2010 |  |   | 2,194
|2011 |  |   | 1,999
|2012 |  |   | 1,977
|2013 |  |   | 1,813

Note 9Employee Benefit Plans

The Company maintains pension plans covering most employees. The Company also provides an unfunded postretirement health care benefit plan for
approximately 180 employees and their dependents. The measurement date for the Companys employee benefit plans coincides with its fiscal year end, October 31.

On October 31, 2007, the Company adopted the recognition and disclosure provisions of SFAS No. 158. SFAS No. 158 required the Company to recognize the funded status of its defined benefit
pension and postretirement benefit plans in the October 31, 2007 consolidated balance sheet, with a corresponding adjustment to accumulated other comprehensive income, net of tax. The adjustment to accumulated other comprehensive income at
adoption represents the net unrecognized actuarial losses, unrecognized prior service costs and unrecognized transition obligation remaining from the initial adoption of SFAS No. 87 and SFAS No. 106, all of which were previously
netted against the plans funded status in the Companys consolidated balance sheet in accordance with the provisions of SFAS No. 87 and SFAS No. 106. These amounts will be subsequently recognized as net periodic
benefit cost in accordance with the Companys historical accounting policy for amortizing these amounts. In addition, actuarial gains and losses that arise in subsequent periods and are not recognized as net periodic benefit cost in the same
periods will be recognized as a component of other comprehensive income. Those amounts will be subsequently recognized as a component of net periodic benefit cost on the same basis as the amounts recognized in accumulated other comprehensive income
upon the adoption of SFAS No. 158.

The incremental effects of adopting the provisions of SFAS No. 158 on the
Companys consolidated balance sheet at October 31, 2007 are presented in the following table. The adoption of SFAS No. 158 had no effect on the Companys consolidated statement of income, and it will not effect the
Companys operating results in subsequent periods.



|                                                   |  |                              |         |   |                               |   |        |                               |  |   |         |  
|-------------------------------------------------- |  | ---------------------------- | ------- | - | ----------------------------- | - | ------ | ----------------------------- |  | - | ------- | -
|                                                   |  | At October 31, 2007          |         |   |                               |  
|                                                   |  | Prior toAdopting SFASNo. 158 |         |   | Effect ofAdopting SFASNo. 158 |   |        | As Reportedat October 31,2007 | 
|Assets                                             |  |                              |         |   |                               |   |        |                               |  |   |         |  
|Other assets                                       |  | $                            | 1,533   |   |                               | $ | (523   | )                             |  | $ | 1,010   |  
|Total assets                                       |  |                              | 341,633 |   |                               |   | (523   | )                             |  |   | 341,110 |  
|                                                   |  |                              |         |   |                               |   |        |                               |  |   |         |  
|Liabilities and Shareholders Equity:              |  |                              |         |   |                               |   |        |                               |  |   |         |  
|Deferred income taxes                              |  |                              | 19,314  |   |                               |   | (3,443 | )                             |  |   | 15,871  |  
|Pension and postretirement benefit liabilities     |  |                              | (3,293  | ) |                               |   | 9,202  |                               |  |   | 5,909   |  
|Accumulated other comprehensive income, net of tax |  |                              | (5,879  | ) |                               |   | (6,282 | )                             |  |   | (12,161 | )
|                                                   |  |                              |         |   |                               |   |        |                               |  |   |         |  
|Total liabilities and shareholders equity         |  | $                            | 341,633 |   |                               | $ | (523   | )                             |  | $ | 341,110 |  
|                                                   |  |                              |         |   |                               |   |        |                               |  |   |         |  



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SHILOH INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



During the first quarter of fiscal 2007, the Company announced the freezing of benefits under its
cash balance retirement plan that includes all non-bargaining employees. As a result of this decision, the cash balance retirement plan no longer accrues current service costs effective January 31, 2007. Benefit obligations earned through
January 31, 2007 by plan members will remain and will continue to accrue interest and vest in accordance with the plans vesting requirements, with 100% vesting achieved after five years of service. The Company recorded a curtailment loss
of $552 in the fourth quarter of fiscal 2006, included in cost of sales and selling, general and administrative expenses in the accompanying consolidated statement of operations and a reduction of $657 in projected benefit obligation.

In addition to the cash balance plan curtailment, in fiscal 2006 the Company recorded a curtailment loss related to the reduction of the work force of
the Companys Cleveland Stamping facility. See Note 2 of the notes to consolidated financial statements.

Obligations and Funded Status

At October 31



|                                                                                                                 |  |                  |         |   |                               |   |         |      |  |   |        |   |  |   |        |  
|---------------------------------------------------------------------------------------------------------------- |  | ---------------- | ------- | - | ----------------------------- | - | ------- | ---- |  | - | ------ | - |  | - | ------ | -
|                                                                                                                 |  | Pension Benefits |         |   | Other Post RetirementBenefits |  
|                                                                                                                 |  | 2007             |         |   | 2006                          |   |         | 2007 |  |   | 2006   |  
|Change in benefit obligation:                                                                                    |  |                  |         |   |                               |   |         |      |  |   |        |   |  |   |        |  
|Benefit obligation at beginning of year                                                                          |  | $                | (69,406 | ) |                               | $ | (67,122 | )    |  | $ | (1,122 | ) |  | $ | (1,161 | )
|Service cost                                                                                                     |  |                  | (1,465  | ) |                               |   | (3,573  | )    |  |   | (8     | ) |  |   | (12    | )
|Interest cost                                                                                                    |  |                  | (3,858  | ) |                               |   | (3,627  | )    |  |   | (63    | ) |  |   | (62    | )
|Amendments and settlements                                                                                       |  |                  | 2,054   |   |                               |   | 657     |      |  |   |        |   |  |   | 86     |  
|Actuarial gain (loss)                                                                                            |  |                  | 2,078   |   |                               |   | 817     |      |  |   | 243    |   |  |   | (445   | )
|Benefits paid                                                                                                    |  |                  | 3,719   |   |                               |   | 3,442   |      |  |   | 70     |   |  |   | 472    |  
|                                                                                                                 |  |                  |         |   |                               |   |         |      |  |   |        |   |  |   |        |  
|Benefit obligation at end of year                                                                                |  |                  | (66,878 | ) |                               |   | (69,406 | )    |  |   | (880   | ) |  |   | (1,122 | )
|Change in plan assets:                                                                                           |  |                  |         |   |                               |   |         |      |  |   |        |   |  |   |        |  
|Fair value of plan assets at beginning of year                                                                   |  |                  | 55,129  |   |                               |   | 46,388  |      |  |   |       |   |  |   |       |  
|Actual return on plan assets                                                                                     |  |                  | 7,673   |   |                               |   | 6,435   |      |  |   |       |   |  |   |       |  
|Employer contributions                                                                                           |  |                  | 2,650   |   |                               |   | 5,748   |      |  |   | 70     |   |  |   | 472    |  
|Benefits paid                                                                                                    |  |                  | (1,850  | ) |                               |   | (3,442  | )    |  |   | (70    | ) |  |   | (472   | )
|Effect of settlement                                                                                             |  |                  | (1,984  | ) |                               |   |        |      |  |   |       |   |  |   |       |  
|                                                                                                                 |  |                  |         |   |                               |   |         |      |  |   |        |   |  |   |        |  
|Fair value of plan assets at end of year                                                                         |  |                  | 61,618  |   |                               |   | 55,129  |      |  |   |       |   |  |   |       |  
|                                                                                                                 |  |                  |         |   |                               |   |         |      |  |   |        |   |  |   |        |  
|Funded status, benefit obligations in excess of plan assets                                                      |  | $                | (5,260  | ) |                               |   | (14,277 | )    |  |   | (880   | ) |  | $ | (1,122 | )
|                                                                                                                 |  |                  |         |   |                               |   |         |      |  |   |        |   |  |   |        |  
|The following represents the funded status of the pension and post retirement benefit plans at October 31, 2006: |  |                  |         |   |                               |   |         |      |  |   |        |   |  |   |        |  
|Unrecognized:                                                                                                    |  |                  |         |   |                               |   |         |      |  |   |        |   |  |   |        |  
|Transition obligation                                                                                            |  |                  |         |   |                               |   | 42      |      |  |   |        |   |  |   |       |  
|Prior service cost                                                                                               |  |                  |         |   |                               |   | 1,036   |      |  |   |        |   |  |   | (2,235 | )
|Unrecognized actuarial loss                                                                                      |  |                  |         |   |                               |   | 24,232  |      |  |   |        |   |  |   | 3,214  |  
|                                                                                                                 |  |                  |         |   |                               |   |         |      |  |   |        |   |  |   |        |  
|Prepaid (accrued) benefit cost before adjustment for minimum liability                                           |  |                  |         |   |                               |   | 11,033  |      |  |   |        |   |  |   | (143   | )
|Adjustment to recognize minimum liability                                                                        |  |                  |         |   |                               |   | (25,310 | )    |  |   |        |   |  |   |       |  
|                                                                                                                 |  |                  |         |   |                               |   |         |      |  |   |        |   |  |   |        |  
|Accrued benefit cost                                                                                             |  |                  |         |   |                               | $ | (14,277 | )    |  |   |        |   |  | $ | (143   | )
|                                                                                                                 |  |                  |         |   |                               |   |         |      |  |   |        |   |  |   |        |  



48



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##### Table of Contents

SHILOH INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Amounts recognized in the consolidated balance sheets consist of:



|                                       |  |                 |         |   |                               |   |      |  
|-------------------------------------- |  | --------------- | ------- | - | ----------------------------- | - | ---- | -
|                                       |  | PensionBenefits |         |   | Other Post RetirementBenefits |  
|                                       |  | 2006            |         |   | 2006                          |  
|Prepaid benefit costs                  |  | $               | 11,033  |   |                               | $ |     |  
|Accrued benefit costs                  |  |                 |        |   |                               |   | (143 | )
|Intangible assets                      |  |                 | (1,078  | ) |                               |   |     |  
|Accumulated other comprehensive income |  |                 | (24,232 | ) |                               |   |     |  
|                                       |  |                 |         |   |                               |   |      |  
|Net amount recognized                  |  | $               | (14,277 | ) |                               | $ | (143 | )
|                                       |  |                 |         |   |                               |   |      |  



|                                       |  |                 |         |   |                               |   |        |  
|-------------------------------------- |  | --------------- | ------- | - | ----------------------------- | - | ------ | -
|                                       |  | PensionBenefits |         |   | Other Post RetirementBenefits |  
|                                       |  | 2007            |         |   | 2007                          |  
|Noncurrent assets                      |  | $               | 354     |   |                               | $ |       |  
|Current liabilities                    |  |                 | (526    | ) |                               |   | (59    | )
|Noncurrent liabilities                 |  |                 | (5,088  | ) |                               |   | (821   | )
|Accumulated other comprehensive income |  |                 | (18,109 | ) |                               |   | (740   | )
|                                       |  |                 |         |   |                               |   |        |  
|Net amount recognized                  |  | $               | (23,369 | ) |                               | $ | (1,620 | )
|                                       |  |                 |         |   |                               |   |        |  

The following table summarizes the activity in the pension and post-retirement accounts during
fiscal 2007, segregated between ordinary activity and the effects of the implementation of SFAS No. 158:



|                                             |  |                   |        |   |              |   |         |                     |  |   |          |   |  |                   |        |   |  |   |        |  
|-------------------------------------------- |  | ----------------- | ------ | - | ------------ | - | ------- | ------------------- |  | - | -------- | - |  | ----------------- | ------ | - |  | - | ------ | -
|Pension and Post Retirement Account Activity |  | Balance10/31/2006 |        |   | 2007Activity |   |         | Pre-SFAS 158Balance |  |   | SFAS 158 |   |  | Balance10/31/2007 |       
|Intangible asset                             |  | $                 | 1,078  |   |              | $ | (201    | )                   |  | $ | 877      |   |  | $                 | (877   | ) |  | $ |       |  
|Pension asset (overfunded status)            |  |                   |       |   |              |   |        |                     |  |   |         |   |  |                   | 354    |   |  |   | 354    |  
|                                             |  |                   |        |   |             
|Current liability                            |  |                   | (6,433 | ) |              |   | 5,848   |                     |  |   | (585     | ) |  |                   |       |   |  |   | (585   | )
|Long-term liability                          |  |                   | (7,987 | ) |              |   | 11,280  |                     |  |   | 3,293    |   |  |                   | (9,202 | ) |  |   | (5,909 | )
|                                             |  |                   |        |   |             
|Other comprehensive income (pre-tax)         |  |                   | 24,232 |   |              |   | (15,108 | )                   |  |   | 9,124    |   |  |                   | 9,725  |   |  |   | 18,849 |  
|Tax effectlong term deferred tax            |  |                   | 8,453  |   |              |   | (5,208  | )                   |  |   | 3,245    |   |  |                   | 3,443  |   |  |   | 6,688  |  
|Other comprehensive income (net of tax)      |  |                   | 15,779 |   |              |   | (9,900  | )                   |  |   | 5,879    |   |  |                   | 6,282  |   |  |   | 12,161 |  

The above amounts are recorded in the liabilities section of the consolidated balance sheets as
follows:



|                              |  |                  |        |   |                               |   |         |      |  |   |      |   |  |   |      |  
|----------------------------- |  | ---------------- | ------ | - | ----------------------------- | - | ------- | ---- |  | - | ---- | - |  | - | ---- | -
|                              |  | Pension Benefits |        |   | Other Post RetirementBenefits |  
|                              |  | 2007             |        |   | 2006                          |   |         | 2007 |  |   | 2006 |  
|Other accrued expenses        |  | $                | (526   | ) |                               | $ | (6,433  | )    |  | $ | (59  | ) |  | $ |     |  
|Long-term benefit liabilities |  |                  | (5,088 | ) |                               |   | (7,844  | )    |  |   | (821 | ) |  |   | (143 | )
|                              |  |                  |        |   |                               |   |         |      |  |   |      |   |  |   |      |  
|Total                         |  | $                | (5,614 | ) |                               | $ | (14,277 | )    |  | $ | (880 | ) |  | $ | (143 | )
|                              |  |                  |        |   |                               |   |         |      |  |   |      |   |  |   |      |  

Information for pension plans with an accumulated benefit obligation in excess of plan assets at
October 31, 2006:



|                               |  |   |       
|------------------------------ |  | - | ------
|Projected benefit obligation   |  | $ | 69,406
|Accumulated benefit obligation |  |   | 69,406
|Fair value of plan assets      |  |   | 55,129



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SHILOH INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Components of Net Periodic Benefit Cost



|                                   |  |                  |        |   |                                |   |        |      |  |   |        |   |  |      |      |   |      |   |      |   |  |   |     |  
|---------------------------------- |  | ---------------- | ------ | - | ------------------------------ | - | ------ | ---- |  | - | ------ | - |  | ---- | ---- | - | ---- | - | ---- | - |  | - | --- | -
|                                   |  | Pension Benefits |        |   | Other Post Retirement Benefits |  
|                                   |  | 2007             |        |   | 2006                           |   |        | 2005 |  |   | 2007   |   |  | 2006 |      |   | 2005 |  
|Service cost                       |  | $                | 1,465  |   |                                | $ | 3,573  |      |  | $ | 3,462  |   |  | $    | 8    |   |      | $ | 12   |   |  | $ | 41  |  
|Interest cost                      |  |                  | 3,858  |   |                                |   | 3,627  |      |  |   | 3,491  |   |  |      | 63   |   |      |   | 62   |   |  |   | 158 |  
|Expected return on plan assets     |  |                  | (4,160 | ) |                                |   | (3,669 | )    |  |   | (3,156 | ) |  |      |     |   |      |   |     |   |  |   |    |  
|Amortization of prior service cost |  |                  | 99     |   |                                |   | 323    |      |  |   | 331    |   |  |      | (173 | ) |      |   | (169 | ) |  |   | (68 | )
|Amortization of transition loss    |  |                  | 18     |   |                                |   | 86     |      |  |   | 86     |   |  |      |     |   |      |   |     |   |  |   |    |  
|Plan curtailments                  |  |                  | 411    |   |                                |   | 1,426  |      |  |   |       |   |  |      |     |   |      |   |     |   |  |   |    |  
|Plan amendments                    |  |                  |       |   |                                |   |       |      |  |   | 42     |   |  |      |     |   |      |   |     |   |  |   |    |  
|Amortization of net actuarial loss |  |                  | 1,006  |   |                                |   | 2,203  |      |  |   | 1,730  |   |  |      | 168  |   |      |   | 149  |   |  |   | 125 |  
|                                   |  |                  |        |   |                                |   |        |      |  |   |        |   |  |      |      |   |      |   |      |   |  |   |     |  
|Net periodic benefit cost          |  | $                | 2,697  |   |                                | $ | 7,569  |      |  | $ | 5,986  |   |  | $    | 66   |   |      | $ | 54   |   |  | $ | 256 |  
|                                   |  |                  |        |   |                                |   |        |      |  |   |        |   |  |      |      |   |      |   |      |   |  |   |     |  

The Company expects to recognize in the consolidated statement of income the following amounts that will be
amortized from accumulated other comprehensive income in fiscal 2008:



|                                   |  |                 |     |                               |   |      |  
|---------------------------------- |  | --------------- | --- | ----------------------------- | - | ---- | -
|                                   |  | PensionBenefits |     | Other Post RetirementBenefits |  
|Amortization of net actuarial loss |  | $               | 644 |                               | $ | 194  |  
|Amortization of transition loss    |  |                 | 18  |                               |   |     |  
|Amortization of prior service cost |  |                 | 90  |                               |   | (173 | )

The Company has recognized the following pre-tax actuarial losses, prior service costs and transition
obligations in accumulated other comprehensive income at October 31, 2007:



|                                       |  |                 |        |                               |   |        |  
|-------------------------------------- |  | --------------- | ------ | ----------------------------- | - | ------ | -
|                                       |  | PensionBenefits |        | Other Post RetirementBenefits |  
|Net actuarial loss                     |  | $               | 17,232 |                               | $ | 2,802  |  
|Transition loss                        |  |                 | 25     |                               |   |       |  
|Prior service cost                     |  |                 | 852    |                               |   | (2,062 | )
|                                       |  |                 |        |                               |   |        |  
|Accumulated other comprehensive income |  | $               | 18,109 |                               | $ | 740    |  
|                                       |  |                 |        |                               |   |        |  

Additional Information



|                                                                                |  |                  |        |   |                               |   |        |      |  |   |      |   |  |    
|------------------------------------------------------------------------------- |  | ---------------- | ------ | - | ----------------------------- | - | ------ | ---- |  | - | ---- | - |  | ---
|                                                                                |  | Pension Benefits |        |   | Other Post RetirementBenefits
|                                                                                |  | 2007             |        |   | 2006                          |   |        | 2007 |  |   | 2006
|Increase (decrease) in minimum liability included in other comprehensive income |  | $                | 15,108 |   |                               | $ | (5,880 | )    |  |   | N/A  |   |  | N/A
|Increase (decrease) due to adoption of SFAS 158                                 |  |                  | (8,985 | ) |                               |   |       |      |  |   | (740 | ) |  | N/A
|                                                                                |  |                  |        |   |                               |   |        |      |  |   |      |   |  |    
|Amount recognized in other comprehensive income, before taxes                   |  | $                | 6,123  |   |                               | $ | (5,880 | )    |  | $ | (740 | ) |  | N/A



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SHILOH INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Assumptions



|                                                                                 |      |                  |   |      |                              |   |      |     |   |      |      |  
|-------------------------------------------------------------------------------- | ---- | ---------------- | - | ---- | ---------------------------- | - | ---- | --- | - | ---- | ---- | -
|Weighted-average assumptions used to determine benefit obligations at October 31 |      | Pension Benefits |   |      | OtherPost RetirementBenefits |  
|                                                                                 | 2007 |                  |   | 2006 |                              |   | 2007 |     |   | 2006 |     
|Discount rate                                                                    |      | 6.00             | % |      | 5.77                         | % |      | 6.0 | % |      | 5.77 | %
|Rate of compensation increase                                                    |      | 4.50             | % |      | 4.50                         | % |      |    |   |      |     |  



|                                                                                                    |      |                  |   |      |                               |   |      |           |   |      |      |   |      |      |   |      |      |  
|--------------------------------------------------------------------------------------------------- | ---- | ---------------- | - | ---- | ----------------------------- | - | ---- | --------- | - | ---- | ---- | - | ---- | ---- | - | ---- | ---- | -
|Weighted-average assumptions used to determine netperiodic benefit costs for
years ended October 31 |      | Pension Benefits |   |      | Other Post RetirementBenefits |  
|                                                                                                    | 2007 |                  |   | 2006 |                               |   | 2005 |           |   | 2007 |      |   | 2006 |      |   | 2005 |     
|Discount rate                                                                                       |      | 5.77             | % |      | 5.50                          | % |      | 6.00      | % |      | 5.77 | % |      | 5.50 | % |      | 6.00 | %
|Expected long-term return on plan assets                                                            |      | 7.25-7.50        | % |      | 7.25-7.50                     | % |      | 7.25-8.00 | % |      |     |   |      |     |   |      |     |  
|Rate of compensation increase                                                                       |      | 4.50             | % |      | 4.50                          | % |      | 4.50      | % |      |     |   |      |     |   |      |     |  

These assumptions are used to develop the projected obligation at fiscal year end and to develop
net periodic benefit cost for the subsequent fiscal year. Therefore, for fiscal 2007, the assumptions used to determine net periodic benefit costs were established at October 31, 2006, while the assumptions used to determine the benefit
obligations were established at October 31, 2007.

The Company determines the annual rate of return on pension assets by first
analyzing the composition of its asset portfolio. Historical rates of return are applied to the portfolio. The Companys outside investment advisors and actuaries review the computed rate of return. Industry comparables and other outside
guidance are also considered in the annual selection of the expected rates of return on pension assets.



|                                                                                  |  |      |   |  |      |  
|--------------------------------------------------------------------------------- |  | ---- | - |  | ---- | -
|Assumed health care trend rates at October 31                                     |  | 2007 |   |  | 2006 |  
|Health care cost trend rate assumed for next year                                 |  | 8.0  | % |  | 9.0  | %
|Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) |  | 5.0  | % |  | 5.0  | %
|Year that the rate reaches the ultimate trend rate                                |  | 2010 |   |  | 2010 |  

Assumed healthcare cost trend rates have a significant effect on the amounts reported for the
healthcare plan. A one-percentage point change in assumed healthcare cost trend rates would have the following effects at October 31, 2007:



|                                                        |  |                              |    |                              |   |     |  
|------------------------------------------------------- |  | ---------------------------- | -- | ---------------------------- | - | --- | -
|                                                        |  | One-PercentagePoint Increase |    | One-PercentagePoint Decrease |  
|Effect on total of service and interest cost components |  | $                            | 5  |                              | $ | (5  | )
|Effect on post retirement obligation                    |  | $                            | 72 |                              | $ | (67 | )

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Medicare
Act) added a new Part D benefit providing for prescription drug benefits under Medicare, and providing a subsidy to plan sponsors who determine that the prescription drug benefits under their plan are at least actuarially
equivalent to the new Medicare Part D benefit. The Medicare Act was effective January 1, 2006. The Company has directed existing retirees who are eligible for benefits under the Companys post retirement health care plan to elect for
Part D coverage with Medicare as the primary provider and the Company as the secondary provider. As a result, the Company did not elect to receive the subsidy available under the Medicare Act. As a result of directing



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SHILOH INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



existing retirees to elect Part D coverage with Medicare and the annual adjustment to contributory amounts that retirees pay toward the cost of post
retirement health coverage, the Company recorded a reduction of the Companys benefit obligation for other post retirement benefits during fiscal 2005.

Plan Assets

The Company has established a targeted asset allocation percentage by asset category and rebalances the assets
of each plan when pension contributions are funded. The Companys pension plan weighted-average asset allocations at October 31, 2007 and 2006, by asset category and comparison to the target allocation percentage are as follows:



|                  |  |                            |      |  |                            |      |  |     |  
|----------------- |  | -------------------------- | ---- |  | -------------------------- | ---- |  | --- | -
|                  |  | TargetAllocationPercentage |      |  | Plan Assets at October 31, |     
|                  |  |                            | 2007 |  |                            | 2006 | 
|Asset Category    |  |                            |      |  |                            |      |  |     |  
|Equity securities |  | 40-60                      | %    |  | 68                         | %    |  | 65  | %
|Debt securities   |  | 40-60                      | %    |  | 23                         | %    |  | 26  | %
|Real estate       |  | 0-10                       | %    |  | 9                          | %    |  | 9   | %
|                  |  |                            |      |  |                            |      |  |     |  
|Total             |  | 100                        | %    |  | 100                        | %    |  | 100 | %
|                  |  |                            |      |  |                            |      |  |     |  

The Companys investment policy for assets of the plans is to obtain a reasonable long-term
return consistent with the level of risk assumed. The Company also seeks to control the cost of funding the plans within prudent levels of risk through the investment of plan assets and the Company seeks to provide diversification of assets in an
effort to avoid the risk of large losses and to maximize the return to the plans consistent with market and economic risk.

Cash Flows

Contributions

The Company expects to contribute
$526 to its pension plans in fiscal 2008, compared to $2,650 funded in fiscal 2007. The plan freezes that occurred in fiscal 2007, combined with investment performance resulted in improved funding ratios of pension plan assets to liabilities, which
lowered the expected contribution levels for fiscal 2008.

Estimated Future Benefit Payments

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:



|          |  |                  |        |                |   |    
|--------- |  | ---------------- | ------ | -------------- | - | ---
|          |  | Pension Benefits |        | Other Benefits
|2008      |  | $                | 2,950  |                | $ | 59 
|2009      |  |                  | 3,080  |                |   | 55 
|2010      |  |                  | 3,140  |                |   | 59 
|2011      |  |                  | 3,270  |                |   | 62 
|2012      |  |                  | 3,700  |                |   | 55 
|2013-2017 |  |                  | 22,000 |                |   | 332

In addition to the defined benefit plans described above, the Company maintains a number of
defined contribution plans. Under the terms of the plans, eligible employees may contribute a selected percentage of their



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SHILOH INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



base pay. The Company matches a percentage of the employees contributions up to a stated percentage, subject to statutory limitations. During fiscal
2007, the Company began automatically enrolling new employees in the defined contribution plan as well as automatically increasing employee contributions by 1% annually, unless the employee opts out of the enrollment or contribution increases.
Additionally, the Company increased the match of employee contributions to 100% of the first 3% of employee deferrals, and to contribute an additional 50% of deferrals of 4-5% of employee contributions. In addition, the Company may make a
discretionary profit sharing contribution on an annual basis. The Company recorded expense of $1,418, $661 and $621 during fiscal years 2007, 2006 and 2005, respectively, for its defined contribution plans.

During 1997, the Company initiated a Supplemental Executive Retirement Plan (SERP) for key employees of the Company. Currently, the former
SERP is in effect for one retired key employee. Compensation expense relating to this plan was $152, $138 and $126 in fiscal 2007, 2006 and 2005, respectively. The benefits accrued under this plan were $257 and $409 at October 31, 2007 and
2006, respectively.

Note 10Earnings Per Share

Basic earnings per share is computed by dividing net income available to common stockholders by the weighted average number of shares of Common Stock outstanding during the period. In addition, the shares of Common
Stock issuable pursuant to stock options outstanding under the Companys Amended and Restated 1993 Key Employee Stock Incentive Plan are included in the diluted earnings per share calculation to the extent they are dilutive. For the years ended
October 31, 2007 and 2006, 128 and 12, stock options, respectively, were excluded from the computation of diluted earnings per share because they were anti-dilutive. There were no anti-dilutive stock options at October 31, 2005. The
following is a reconciliation of the numerator and denominator of the basic and diluted earnings per share computation for net income (loss) per share:



|                                                                                  |  |                                              |        |      |   |        |  |   |       
|--------------------------------------------------------------------------------- |  | -------------------------------------------- | ------ | ---- | - | ------ |  | - | ------
|                                                                                  |  | Years Ended October 31,                     
|                                                                                  |  | 2007                                         |        | 2006 |   | 2005  
|                                                                                  |  | (Amounts in thousands, exceptper share data)
|Net income                                                                        |  | $                                            | 9,550  |      | $ | 7,118  |  | $ | 26,752
|Add: Effect of the redemption of formerly issued and outstanding preferred shares |  |                                              |       |      |   |       |  |   | 197   
|                                                                                  |  |                                              |        |      |   |        |  |   |       
|Net income available to common stockholders                                       |  | $                                            | 9,550  |      | $ | 7,118  |  | $ | 26,949
|                                                                                  |  |                                              |        |      |   |        |  |   |       
|Basic weighted average shares                                                     |  |                                              | 16,348 |      |   | 16,078 |  |   | 15,915
|Effect of dilutive securities:                                                    |  |                                              |        |      |   |        |  |   |       
|Stock options                                                                     |  |                                              | 133    |      |   | 351    |  |   | 506   
|                                                                                  |  |                                              |        |      |   |        |  |   |       
|Diluted weighted average shares                                                   |  |                                              | 16,481 |      |   | 16,429 |  |   | 16,421
|                                                                                  |  |                                              |        |      |   |        |  |   |       
|Basic earnings per share                                                          |  | $                                            | 0.58   |      | $ | 0.44   |  | $ | 1.69  
|                                                                                  |  |                                              |        |      |   |        |  |   |       
|Diluted earnings per share                                                        |  | $                                            | 0.58   |      | $ | 0.43   |  | $ | 1.64  
|                                                                                  |  |                                              |        |      |   |        |  |   |       

Note 11Stock Options and Incentive Compensation

1993 Key Employee Stock Incentive Plan

The Company maintains the Amended and Restated Key Employee Stock Incentive Program (the Incentive Plan), which authorizes grants to officers and other key employees of the Company and its subsidiaries of (i) stock options
that are intended to qualify as incentive stock options, (ii) nonqualified stock options and



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SHILOH INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



(iii) restricted stock awards. An aggregate of 1,700,000 shares of Common Stock at an exercise price equal to 100% of the market value on the date of
grant, subject to adjustment upon occurrence of certain events to prevent dilution or expansion of the rights of participants that might otherwise result from the occurrence of such events, has been reserved for issuance upon the exercise of stock
options. An individual award is limited to 500,000 shares in a five-year period.

Non-qualified stock options and incentive stock options
have been granted to date and all options have been granted at market price at the date of grant. Options expire over a period not to exceed ten years from the date of grant and vest ratably over a three year period. A summary of option activity
under the plan follows:



|                                |  |                            |   |  |                            |      
|------------------------------- |  | -------------------------- | - |  | -------------------------- | -----
|                                |  | Numberof SharesUnderOption |   |  | WeightedAverageOptionPrice
|Outstanding at November 1, 2004 |  | 688,255                    |   |  | $                          | 2.96 
|Granted                         |  | 41,000                     |   |  | $                          | 13.06
|Exercised                       |  | (43,463                    | ) |  | $                          | 4.54 
|Canceled                        |  | (20,501                    | ) |  | $                          | 7.30 
|                                |  |                            |   |  |                            |      
|Outstanding at October 31, 2005 |  | 665,291                    |   |  | $                          | 3.34 
|Granted                         |  |                           |   |  |                            |     
|Exercised                       |  | (406,562                   | ) |  | $                          | 2.37 
|Canceled                        |  | (4,002                     | ) |  | $                          | 7.53 
|                                |  |                            |   |  |                            |      
|Outstanding at October 31, 2006 |  | 254,727                    |   |  | $                          | 4.83 
|Granted                         |  | 156,000                    |   |  | $                          | 14.74
|Exercised                       |  | (41,150                    | ) |  | $                          | 5.85 
|Canceled                        |  | (9,335                     | ) |  | $                          | 10.72
|                                |  |                            |   |  |                            |      
|Outstanding at October 31, 2007 |  | 360,242                    |   |  | $                          | 8.85 

There were 191,909 options exercisable as of October 31, 2007 with a weighted average
exercise price of $3.79. At October 31, 2007 options outstanding and options exercisable both had an intrinsic value of $1,349. Options that have an exercise price greater than the market price on October 31, 2007 were excluded from the
intrinsic value computation. The intrinsic value of options exercised during fiscal 2007 was $409.

The following table provides additional
information regarding options outstanding as of October 31, 2007:



|                |  |                    |  |                                                             |       |                    |         |                                           |     
|--------------- |  | ------------------ |  | ----------------------------------------------------------- | ----- | ------------------ | ------- | ----------------------------------------- | ----
|Exercise Prices |  | OptionsOutstanding |  | Exercise Price ofOptions Outstandingand Options Exercisable |       | OptionsExercisable |         | Weighted AverageRemainingContractual Life
|$1.70           |  | 147,062            |  | $                                                           | 1.70  |                    | 147,062 |                                           | 4.83
|$3.75           |  | 3,000              |  | $                                                           | 3.75  |                    | 3,000   |                                           | 3.10
|$4.67           |  | 1,169              |  | $                                                           | 4.67  |                    | 1,169   |                                           | 5.99
|$8.96           |  | 17,011             |  | $                                                           | 8.96  |                    | 17,011  |                                           | 6.99
|$13.06          |  | 36,000             |  | $                                                           | 13.06 |                    | 23,667  |                                           | 7.99
|$14.74          |  | 156,000            |  | $                                                           | 14.74 |                    |        |                                           | 9.29
|                |  |                    |  |                                                             |       |                    |         |                                           |     
|Totals          |  | 360,242            |  |                                                             |       |                    | 191,909 |                                           |     
|                |  |                    |  |                                                             |       |                    |         |                                           |     

For the fiscal years ended October 31, 2007 and 2006, the Company recorded compensation
expense related to the stock options currently vesting, effectively reducing income before taxes and net income by $418 and



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SHILOH INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



$321, respectively. The impact on earnings per share was a reduction of $.01 per share, basic and diluted, for the fiscal years ended October 31, 2007
and 2006. The total compensation cost related to nonvested awards not yet recognized as of October 31, 2007 and 2006 is a total of $1,046 and $324, respectively, which will be recognized over the next three fiscal years.

The fair value of these options was estimated at the date of grant using the Black-Scholes option-pricing model with the following weighted average
assumptions used for grants awarded during fiscal years 2007 and 2005:



|                               |  |       |   |  |       |  
|------------------------------ |  | ----- | - |  | ----- | -
|                               |  | 2007  |   |  | 2005  |  
|Risk-free interest             |  | 4.70  | % |  | 4.45  | %
|Dividend yield                 |  | 0.00  | % |  | 0.00  | %
|Volatility factormarket       |  | 68.88 | % |  | 72.23 | %
|Expected life of optionsyears |  | 6.0   |   |  | 6.0   |  

Based upon the preceding assumptions, the weighted average fair values of stock options granted
during fiscal years 2007 and 2005 were $9.68 and $8.79 per share, respectively. There were no options granted in fiscal year 2006.

President and Chief Executive Officer Employment Agreement

In accordance with the five-year employment agreement
between the Company and the President and Chief Executive Officer, in January 2007 the Company liquidated the assets of its rabbi trust, realizing a gain of $243 included in other income in the accompanying consolidated statement of operations. The
proceeds of the liquidation were used to fund the supplemental executive retirement plan for the President and Chief Executive Officer in the amount of $1,868.

Executive Incentive Bonus Plans

The Company maintains a Senior Management Bonus Plan (the
Management Plan) to provide the Chief Executive Officer, the Chief Financial Officer, the Senior Vice President and Chief Technology Officer, the Vice President of Manufacturing Operations and the Vice President of Sales and Business
Development incentives for superior performance. The Management Plan, which was approved by the stockholders of the Company and is administered by the Compensation Committee of the Board of Directors, entitles the executives to be paid a cash bonus
based upon the attainment of objective performance criteria established annually by the Compensation Committee. For fiscal 2007 and 2006, the Compensation Committee established performance goals based on the Companys earnings before interest,
taxes, depreciation and amortization (EBITDA), entitling these executives to be paid a bonus based upon varying percentages of their respective base salaries and the level of achievement of EBITDA in relation to the target established by
the Compensation Committee. For fiscal 2007 and 2006, these executives are entitled to receive an aggregate of $574 and $528 under the Management Plan, respectively.

The Company maintains a Short-Term Incentive Plan (the Bonus Plan), which provides annual incentive bonuses to its eligible employees (other than those employees that participate in the Management Plan).
The Bonus Plan provides for an aggregate bonus pool as determined annually by the Compensation Committee and approved by the Board of Directors. Payments are made to participants of the Bonus Plan based upon the achievement of defined objectives. In
the case of corporate executives eligible for the Bonus Plan, 65% of the incentive depends upon meeting the goals for Company performance and 35% of the incentive depends upon specific goals established by the Chief Executive Officer. Finally, in
the case of the remaining employees eligible



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SHILOH INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



for the Bonus Plan, 35% of the incentive depends upon meeting the operating targets of the employees operating unit established by the Chief Executive
Officer, 35% is based upon attaining the corporate goals for Company performance and 30% of the incentive depends upon specific goals as established by the Chief Executive Officer. During fiscal 2007, 2006 and 2005 $988, $1,067 and $1,270 was
approved and provided under the Bonus Plan.

Note 12Income Taxes

Income (loss) before income taxes consists of the following:



|         |  |                         |        |   |      |   |        |      |  |   |       
|-------- |  | ----------------------- | ------ | - | ---- | - | ------ | ---- |  | - | ------
|         |  | Years Ended October 31,
|         |  | 2007                    |        |   | 2006 |   |        | 2005
|Domestic |  | $                       | 20,292 |   |      | $ | 12,342 |      |  | $ | 33,638
|Foreign  |  |                         | (3,207 | ) |      |   | (2,100 | )    |  |   | 1,087 
|         |  |                         |        |   |      |   |        |      |  |   |       
|Total    |  | $                       | 17,085 |   |      | $ | 10,242 |      |  | $ | 34,725
|         |  |                         |        |   |      |   |        |      |  |   |       

The components of the provision for income taxes from continuing operations were as follows:



|                |  |                         |        |   |      |   |        |      |  |   |       |  
|--------------- |  | ----------------------- | ------ | - | ---- | - | ------ | ---- |  | - | ----- | -
|                |  | Years Ended October 31, |       
|                |  | 2007                    |        |   | 2006 |   |        | 2005 | 
|Current:        |  |                         |        |   |      |   |        |      |  |   |       |  
|Federal         |  | $                       | 9,022  |   |      | $ | 7,361  |      |  | $ | 4,885 |  
|State and local |  |                         | 674    |   |      |   | (975   | )    |  |   | 1,367 |  
|Foreign         |  |                         | 137    |   |      |   | 291    |      |  |   | 723   |  
|                |  |                         |        |   |      |   |        |      |  |   |       |  
|Total current   |  |                         | 9,833  |   |      |   | 6,677  |      |  |   | 6,975 |  
|Deferred:       |  |                         |        |   |      |   |        |      |  |   |       |  
|Federal         |  |                         | (2,724 | ) |      |   | (2,923 | )    |  |   | 2,490 |  
|State and local |  |                         | 431    |   |      |   | (285   | )    |  |   | (942  | )
|Foreign         |  |                         | (5     | ) |      |   | (345   | )    |  |   | (550  | )
|                |  |                         |        |   |      |   |        |      |  |   |       |  
|Total deferred  |  |                         | (2,298 | ) |      |   | (3,553 | )    |  |   | 998   |  
|                |  |                         |        |   |      |   |        |      |  |   |       |  
|                |  | $                       | 7,535  |   |      | $ | 3,124  |      |  | $ | 7,973 |  
|                |  |                         |        |   |      |   |        |      |  |   |       |  



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SHILOH INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Temporary differences and carryforwards which give rise to deferred tax assets and liabilities were
comprised of the following:



|                                                        |  |                         |         |   |      |   |         |  
|------------------------------------------------------- |  | ----------------------- | ------- | - | ---- | - | ------- | -
|                                                        |  | Years Ended October 31, |        
|                                                        |  | 2007                    |         |   | 2006 |  
|Deferred tax assets:                                    |  |                         |         |   |      |   |         |  
|Accrued workers compensation                           |  | $                       | 1,272   |   |      | $ | 1,355   |  
|Bad debt reserves                                       |  |                         | 205     |   |      |   | 1,290   |  
|Inventory reserves                                      |  |                         | 1,257   |   |      |   | 802     |  
|State income tax grants, credits and loss carryforwards |  |                         | 1,367   |   |      |   | 1,535   |  
|Accrued vacation reserves                               |  |                         | 386     |   |      |   | 493     |  
|Post retirement benefits                                |  |                         | 310     |   |      |   | 50      |  
|Pension obligations                                     |  |                         | 1,795   |   |      |   | 3,338   |  
|Foreign net operating loss                              |  |                         | 1,273   |   |      |   | 578     |  
|Restructuring charges                                   |  |                         | 91      |   |      |   | 274     |  
|Personal property taxes                                 |  |                         | 1,385   |   |      |   | 1,537   |  
|Litigation reserve                                      |  |                         | 1,774   |   |      |   | 995     |  
|Tax credits in foreign countries                        |  |                         | 1,261   |   |      |   |        |  
|Other reserves                                          |  |                         | 1,207   |   |      |   | 1,025   |  
|Goodwill amortization                                   |  |                         | 677     |   |      |   | 836     |  
|                                                        |  |                         |         |   |      |   |         |  
|                                                        |  |                         | 14,260  |   |      |   | 14,108  |  
|Less: Valuation allowance                               |  |                         | (3,335  | ) |      |   | (1,418  | )
|                                                        |  |                         |         |   |      |   |         |  
|Total deferred tax assets                               |  |                         | 10,925  |   |      |   | 12,690  |  
|Deferred tax liabilities:                               |  |                         |         |   |      |   |         |  
|Fixed assets                                            |  |                         | (19,770 | ) |      |   | (22,068 | )
|Prepaid expenses                                        |  |                         | (335    | ) |      |   | (343    | )
|Other                                                   |  |                         |        |   |      |   | (85     | )
|                                                        |  |                         |         |   |      |   |         |  
|Net deferred tax liability                              |  | $                       | (9,180  | ) |      | $ | (9,806  | )
|                                                        |  |                         |         |   |      |   |         |  
|Change in net deferred tax liability:                   |  |                         |         |   |      |   |         |  
|Provision for deferred taxes                            |  | $                       | 2,298   |   |      | $ | 3,553   |  
|Other                                                   |  |                         | 8       |   |      |   | (4      | )
|Components of other comprehensive income:               |  |                         |         |   |      |   |         |  
|Rabbi trust and hedge                                   |  |                         | 85      |   |      |   | (82     | )
|Pension and post retirement benefits                    |  |                         | (1,765  | ) |      |   | (2,146  | )
|                                                        |  |                         |         |   |      |   |         |  
|Total change in net deferred tax liability              |  | $                       | 626     |   |      | $ | 1,321   |  
|                                                        |  |                         |         |   |      |   |         |  

During October 2007, the Mexican Congress passed the Initiative to Amend the Tax Coordination Law
and Income Tax Law. Effective January 1, 2008, a flat tax will supplement the regular income tax. In conjunction with this law change, a deferred tax asset for Mexican tax credits in the amount of $1,261 was recorded. While future projections
for taxable income and ongoing prudent and feasible tax planning strategies have been considered in assessing the need for the valuation allowance, the Company believes that it is more likely than not that the tax credits will not be fully realized.
Therefore, a valuation allowance in the amount of $1,261 has been recorded.

In July 2006, the FASB issued FIN No. 48,
Accounting for Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109. FIN No. 48, which clarifies FASB Statement No. 109 Accounting for Income Taxes. FIN No. 48 establishes the
criterion that an individual tax position has to meet for some or all of the



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SHILOH INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



benefits of that position to be recognized in the Companys financial statements. On initial application, FIN No. 48 will be applied to all
tax positions for which the statute of limitations remains open. Only the tax positions that meet the more likely than not recognition threshold at the adoption date will be recognized or continue to be recognized. The cumulative effect of applying
FIN No. 48 will be reported as an adjustment to retained earnings at the beginning of the period in which it is adopted.

FIN
No. 48 is effective for fiscal years beginning after December 15, 2006, and will be adopted by the Company on November 1, 2007. The Company is continuing to evaluate the impact that FIN No. 48 could have on its financial position
and results of operations when adopted and the Company estimates, at this time, that the adoption could result in a charge to beginning retained earnings at November 1, 2007, in the range of approximately $1,500 to $2,500.

During the second quarter of fiscal 2006, the Company recognized a benefit in the tax provision of $1,488 related to state tax credits. In previous
fiscal years, the Company had provided a reserve related to the Ohio Manufacturers Grant (formerly known as the Ohio Machinery and Equipment Credit) due to the uncertainty regarding the realization of such tax credits. In September 2005, the
United States Court of Appeals for the Sixth Circuit ruled that this credit was unconstitutional. This ruling was appealed to the U.S. Supreme Court. On May 15, 2006, the U.S. Supreme Court dismissed the Sixth Circuit Courts ruling. As a
result of the U.S. Supreme Courts action, the Ohio Machinery and Equipment credit remains constitutional and the Company, therefore, eliminated the reserves related to this issue.

A valuation allowance of approximately $3,335 remains at October 31, 2007 for deferred tax assets whose realization remains uncertain at this time.
The comparable amount of the valuation allowance at October 31, 2006 was $1,418. The net increase in the valuation allowance of $1,917 relates to an increase of $1,261 for tax credits associated with foreign jurisdictions, a $771 increase
related to foreign net operating losses, and a decrease of $115 related to state and city operating loss carryforwards.

While future
projections for taxable income and ongoing prudent and feasible tax planning strategies have been considered in assessing the need for the valuation allowance, the Company believes that it is more likely than not that its deferred assets will not be
fully realized and that the tax valuation allowance is appropriate. In the event the Company were to determine that it would be able to realize some or all of its deferred tax assets in the future in excess of their recorded amount, an adjustment to
the deferred tax asset valuation allowance would increase income in the period such determination was made. Likewise, should the Company determine that it would not be able to realize its deferred tax assets in the future, an adjustment to the
valuation allowance would be charged to income in the period such determination was made.

A reconciliation of the statutory federal income
tax rate to the effective tax rate is as follows:



|                                                         |  |                         |   |  |       |   |  |      |  
|-------------------------------------------------------- |  | ----------------------- | - |  | ----- | - |  | ---- | -
|                                                         |  | Years Ended October 31, |  
|                                                         |  | 2007                    |   |  | 2006  |   |  | 2005 |  
|Federal income tax at statutory rate                     |  | 35.0                    | % |  | 35.0  | % |  | 35.0 | %
|State and local income taxes, net of federal benefit     |  | 5.1                     |   |  | 4.2   |   |  | 3.3  |  
|Valuation allowance change                               |  | 11.5                    |   |  | (13.4 | ) |  | (8.8 | )
|Effect of state law change on net deferred tax position  |  |                        |   |  | 4.6   |   |  | (3.2 | )
|Net operating loss benefit and reversal of contingencies |  |                        |   |  | (2.0  | ) |  | (3.3 | )
|Domestic production activities deduction                 |  | (1.7                    | ) |  | (3.2  | ) |  |     |  
|Research credit                                          |  | (4.7                    | ) |  |      |   |  |     |  
|Executive compensation                                   |  | 3.2                     |   |  |      |   |  |     |  
|Tax credits in foreign countries                         |  | (7.4                    | ) |  |      |   |  |     |  
|Other, with no individual item exceeding 1.5%            |  | 3.1                     |   |  | 5.3   |   |  |     |  
|                                                         |  |                         |   |  |       |   |  |      |  
|Effective income tax rate                                |  | 44.1                    | % |  | 30.5  | % |  | 23.0 | %
|                                                         |  |                         |   |  |       |   |  |      |  



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SHILOH INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



During fiscal 2007, the Company generated an additional foreign net operating loss benefit of $900,
which will expire in 2017. The pre-existing net operating loss benefit of approximately $400 will expire in 2016. The Company has various state and local net operating loss and tax credit carryforward benefits. As of October 31, 2007 and 2006,
the Company has state and local net operating loss carryforward benefits of $1,077 and $1,303 expiring during the period of 2008 through 2027. Additionally, the Company has state tax credit carryforward benefits of $65 at October 31, 2007 that
will expire during the period of 2020 through 2022. As of October 31, 2006, the state tax credit carryforward benefit was $217.

Shiloh paid income taxes, net of refunds, of $5,318, $9,857 and $5,485 in 2007, 2006 and 2005, respectively. U.S. income taxes and foreign withholding taxes are not provided on undistributed earnings of foreign subsidiaries because it is
expected such earnings will be permanently reinvested in the operations of such subsidiaries. It is not practical to determine the amount of income tax liability that would result had such earnings been repatriated. As of October 31, 2007,
there were no undistributed foreign subsidiary earnings.

Note 13Related Party Transactions

The Company had sales to MTD Products Inc and its affiliates of $27,446, $35,034 and $31,620 for fiscal years 2007, 2006 and 2005, respectively. At
October 31, 2007 and 2006, the Company had receivable balances of $2,138 and $3,670, respectively, due from MTD Products Inc and its affiliates, and payable balances of $53 and $117, respectively, due to MTD Products Inc and its affiliates.

In August 2007, the Company sold machinery that was fully depreciated to MTD Consumer Group Inc. As a result of the sale, a $200 gain was
recorded to equity to capture the difference between the sale price and the net book value of the machinery.

Note 14Business Segment Information

The Company conducts its business and reports its information as one operating segmentAutomotive Products. The Chief Executive
Officer of the Company has been identified as the chief operating decision maker as he has final authority over performance assessment and resource allocation decisions. In determining that one operating segment is appropriate, the Company
considered the nature of the business activities, the existence of managers responsible for the operating activities and information presented to the Board of Directors for its consideration and advice. Furthermore, the Company is a full service
manufacturer of first operation blanks, engineered welded blanks, complex stampings and modular assemblies predominately for the automotive and heavy truck markets. Customers and suppliers are substantially the same among operations, and all
processes entail the acquisition of steel and the processing of the steel for use in the automotive industry.

Revenues from the
Companys Mexican subsidiary were $10,837, $19,264 and $37,924 for fiscal 2007, 2006 and 2005, respectively. These revenues represent 2%, 3% and 6% of total revenues for fiscal years 2007, 2006 and 2005, respectively. Long-lived assets consist
primarily of net property, plant and equipment. Long-lived assets of the Companys foreign subsidiary totaled $17,436 and $18,686 at October 31, 2007 and 2006, respectively. The consolidated long-lived assets of the Company totaled
$200,855 and $223,827 at October 31, 2007 and 2006, respectively.

The Company derived greater than 10% of its revenues from General
Motors in fiscal 2007, 2006 and 2005 with $238,275, $246,535, and $260,164 in revenues, respectively.



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SHILOH INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Revenues derived from the Companys products were as follows:



|                                                |  |                         |         |      |   |         |  |   |        
|----------------------------------------------- |  | ----------------------- | ------- | ---- | - | ------- |  | - | -------
|                                                |  | Years Ended October 31,
|                                                |  | 2007                    |         | 2006 |   | 2005   
|Complex stampings and modular assemblies        |  | $                       | 209,202 |      | $ | 222,947 |  | $ | 219,011
|Engineered welded blanks                        |  |                         | 238,938 |      |   | 229,450 |  |   | 247,642
|Blanking                                        |  |                         | 90,202  |      |   | 111,134 |  |   | 119,574
|Tools, dies, steel processing, scrap, and other |  |                         | 52,072  |      |   | 56,844  |  |   | 48,352 
|                                                |  |                         |         |      |   |         |  |   |        
|Total                                           |  | $                       | 590,414 |      | $ | 620,375 |  | $ | 634,579
|                                                |  |                         |         |      |   |         |  |   |        

Revenues of geographic regions are attributed to external customers based upon the location of the
entity recording the sale.

Note 15Quarterly Results of Operations (Unaudited)



|                                    |  |              |         |               |   |              |  |               |         |  |   |         |  
|----------------------------------- |  | ------------ | ------- | ------------- | - | ------------ |  | ------------- | ------- |  | - | ------- | -
|October 31, 2007                    |  | FirstQuarter |         | SecondQuarter |   | ThirdQuarter |  | FourthQuarter |        
|Revenues                            |  | $            | 147,625 |               | $ | 155,917      |  | $             | 132,988 |  | $ | 153,884 |  
|Gross profit                        |  |              | 11,588  |               |   | 15,576       |  |               | 12,467  |  |   | 17,536  |  
|Operating income (loss)             |  |              | 3,973   |               |   | 6,168        |  |               | 4,582   |  |   | 9,406   |  
|Net income (loss)                   |  |              | 1,482   |               |   | 2,051        |  |               | 1,677   |  |   | 4,340   |  
|Net income (loss) per share basic   |  |              | .09     |               |   | .13          |  |               | .10     |  |   | .27     |  
|Net income (loss) per share diluted |  |              | .09     |               |   | .12          |  |               | .10     |  |   | .26     |  
|Weighted average number of shares:  |  |              |         |               |   |              |  |               |         |  |   |         |  
|Basic                               |  |              | 16,331  |               |   | 16,351       |  |               | 16,354  |  |   | 16,355  |  
|Diluted                             |  |              | 16,484  |               |   | 16,477       |  |               | 16,481  |  |   | 16,481  |  
|                                    |  |              |         |              
|October 31, 2006                    |  | FirstQuarter |         | SecondQuarter |   | ThirdQuarter |  | FourthQuarter |        
|Revenues                            |  | $            | 145,745 |               | $ | 172,154      |  | $             | 144,584 |  | $ | 157,892 |  
|Gross profit                        |  |              | 16,434  |               |   | 19,408       |  |               | 12,227  |  |   | 10,188  |  
|Operating income                    |  |              | 8,815   |               |   | 10,949       |  |               | 3,294   |  |   | (7,167  | )
|Net income                          |  |              | 4,575   |               |   | 7,353        |  |               | 1,209   |  |   | (6,019  | )
|Net income per share basic          |  |              | .29     |               |   | .46          |  |               | .07     |  |   | (0.38   | )
|Net income per share diluted        |  |              | .28     |               |   | .45          |  |               | .07     |  |   | (0.38   | )
|Weighted average number of shares:  |  |              |         |               |   |              |  |               |         |  |   |         |  
|Basic                               |  |              | 15,949  |               |   | 15,967       |  |               | 16,129  |  |   | 16,269  |  
|Diluted                             |  |              | 16,422  |               |   | 16,467       |  |               | 16,475  |  |   | 16,269  |  

In preparing the Companys financial statements in accordance with accounting principles
generally accepted in the United States of America, management has made assumptions and estimates that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting periods. During the fourth quarter of fiscal 2006, the Company recorded several transactions described elsewhere in the notes to consolidated financials statements. These included asset impairment and restructuring charges (Note
2), adoption of FIN 47 (Note 6), pension plan curtailment charges (Notes 2 and 9), provision for contingencies (Note 16) and the resolution of a contingency (Note 16). These adjustments amounted to an unfavorable amount of $7,108, net of tax
benefit. During the fourth quarter of fiscal 2007 and 2006, the Company refined its estimates and assumptions for several asset and liability accounts. As a result, the Company recorded net favorable adjustments of $666, net of tax, in the fourth
quarter



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SHILOH INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



of fiscal 2007 and net unfavorable adjustments of $255, net of tax, in the fourth quarter of 2006. For fiscal 2007 and 2006, these adjustments were normal
recurring adjustments of accrued estimates and adjustments related to sales discounts, workers compensation, medical insurance, pension, professional fees, contingencies and incentive compensation. None of these adjustments individually were
material in relation to the net income of each fiscal year.

Note 16Commitments and Contingencies

In the fourth quarter of fiscal 2006, the Company addressed several legal matters that advanced toward resolution during the fourth quarter in a manner
adverse to the Companys position.

In connection with the bankruptcy of a steel supplier the Company had asserted that its
obligations to the supplier were properly offset by amounts that the supplier owed to the Company. The Companys position was not sustained in court proceedings and as a result the Company and the supplier negotiated a settlement of $907 in
September 2006 that was recorded in the fourth quarter of fiscal 2006 in selling, general and administrative expenses in the accompanying consolidated statement of operations.

In November 1999, the Company acquired the assets associated with the automotive division of MTD Products Inc. The Ohio Tax Commissioner (the
Commissioner) disputed the fair market value assigned by the Company to the purchased assets. Accordingly, the Commissioner claimed that the Company owed an additional amount of personal property tax for such assets. The Company appealed
the Commissioners decision to the Ohio Board of Tax Appeals, but in July 2006, the Board of Tax Appeals upheld the Commissioners decision. Management of the Company strongly disagrees with the position of the Commissioner and the Board
of Tax Appeals and the Company has presented its appeal of the decision of the Board of Tax Appeals to the Ohio Supreme Court. A decision of the Ohio Supreme Court is not expected until late in fiscal 2008. The Company, however, has carefully
considered the probability of an adverse ruling and as a result has provided an accrual of $2,324 included in cost of sales in the accompanying consolidated statement of operations during the fourth quarter of fiscal 2006.

Previous management of the Company had entered an alleged purchase commitment with a supplier for the purchase of certain equipment. The supplier sued
the Company for failure to fulfill the obligations under the alleged commitment. During the fourth quarter of fiscal 2006, a jury found in favor of the supplier and awarded the supplier damages and pre-judgment interest amounting to $2,726. The
Company is appealing this decision, and the Ohio Supreme Court has agreed to hear the Companys appeal. A date for the Companys appeal has not been established. However, considering the adverse decision the Company evaluated the probable
outcome upon appeal and provided an accrual of $2,726 representing damages plus pre-judgment interest. This amount was charged to selling, general and administrative expenses in the accompanying consolidated statement of operations for fiscal 2006.

In the fourth quarter of fiscal 2006, the Company negotiated a settlement of demurrage claims with rail service carriers that the carriers
had asserted. The carriers claims were resolved for $335 in the accompanying consolidated statement of operations for fiscal 2006.

During the second quarter of fiscal 2007, a jury verdict was entered against Shiloh Industries, Inc., VCS Properties, LLC, Shiloh Corporation, and Sectional Stamping, Inc. in the United States District Court in Akron, Ohio following a jury
trial in a claim by the bankruptcy estate of Valley City Steel, LLC relating to the Companys sale of certain assets in 2001 (the Valley City Steel Litigation). Valley City Steel, LLC claimed that the sale of certain assets to
Valley City Steel, LLC, in connection with the creation of the joint venture in which the Company was a minority shareholder, amounted to a constructive fraudulent conveyance under Ohio



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SHILOH INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



law. The plaintiff also alleged that certain amounts were due and owing on account to Valley City Steel, LLC. The jury rendered a verdict on the constructive
fraudulent conveyance claims of approximately $1,693 against Shiloh Industries, Inc., approximately $1,693 against VCS Properties, LLC and approximately $1,292 against Shiloh Corporation. The jury also held that Sectional Stamping, Inc. owed the
bankruptcy estate of Valley City Steel, LLC approximately $261 on account. Shiloh Industries, Inc., VCS Properties, LLC and Shiloh Corporation believe that the verdicts relating to the constructive fraudulent conveyance claims are contrary to the
facts and the law and have filed post-trial motions including a motion for a new trial and other relief. They will vigorously appeal any final constructive fraudulent conveyance judgments if the court denies the post-trial motions. The Company
believes that there are valid grounds to reverse, or reduce the damages applicable to, the portion of any final judgments relating to the constructive fraudulent conveyance claims on appeal. However, there can be no assurance that the appeals will
be successful. As a result, during the second quarter of fiscal 2007, the Company provided a reserve of $2,070 for this matter based upon managements estimate of the probable outcome of the legal decisions possible in this case. Offsetting
this legal reserve, the Company recorded a credit of $799, representing the difference between liabilities that the Company had accrued as payable to Valley City Steel, LLC and the payment of $261 to the bankruptcy estate of Valley City Steel, LLC
as a result of the jurys verdict against Sectional Stamping, Inc.

In addition to the matters discussed above, the Company is a party
to several lawsuits and claims arising in the normal course of its business. In the opinion of management, the Companys liability or recovery, if any, under pending litigation and claims, other than those matters discussed above, would not
materially affect its financial condition, results of operations or cash flows.



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|Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|------- | ------------------------------------------------------------------------------------

None.



|Item 9A. | Controls and Procedures
|-------- | -----------------------

The Company maintains a
set of disclosure controls and procedures designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in Securities and Exchange Commission rules and forms. As of the end of the period covered by this Annual Report, an evaluation of the effectiveness of the Companys disclosure controls and procedures based on
the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission was carried out under the supervision and with the participation of the Companys management, including the
Chief Executive Officer and Chief Financial Officer. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have not identified any material weakness in its internal controls over financial reporting and have concluded
that the Companys disclosure controls and procedures are effective. See Managements Report on Internal Control Over Financial Reporting herein.

There have been no changes in the Companys internal control over financial reporting during the fourth quarter of fiscal 2007 that have materially affected, or are reasonably likely to materially affect, the
Companys internal control over financial reporting.



|Item 9B. | Other Information
|-------- | -----------------

None.

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 under the heading Election of Directors, which information is incorporated herein by reference. Information required by Item 401 of
Regulation S-K regarding the executive officers of the Company is included in Part I of this Annual Report on Form 10-K under the caption Executive Officers of the Registrant 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 under the heading Section 16(a) Beneficial Ownership Reporting Compliance, which information is incorporated herein by reference.

The Company has adopted a code of ethics that applies to its President and Chief Executive Officer, Chief Financial Officer and Corporate
Controller as well as the other officers, directors and managers of the Company in accordance with the Marketplace Rules of the Nasdaq Stock Market.



|Item 11. | Executive Compensation
|-------- | ----------------------

Information with respect to
executive compensation is set forth in the Proxy Statement under the heading Election of Directors and under the heading Compensation of Executive Officers, 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 and Related Stockholder Matters
|-------- | ----------------------------------------------------------------------------------------------

Information with respect to security ownership of certain beneficial owners and management is set forth in the Proxy Statement under the heading
Beneficial Ownership of Common Stock, which information is incorporated herein by reference.



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Summary of Equity Compensation Plans

Shown below is information concerning all equity compensation plans and individual compensation arrangements in effect as of October 31, 2007.



|                                                           |  |                                                                     |  |                                                   |      |                                                                                         |        
|---------------------------------------------------------- |  | ------------------------------------------------------------------- |  | ------------------------------------------------- | ---- | --------------------------------------------------------------------------------------- | -------
|                                                           |  | Equity Compensation Plan Information                               
|Plan Category                                              |  | Number of SecuritiesTo Be Issued UponExercise
ofOutstanding Options |  | WeightedAverageExercisePrice ofOutstandingOptions |      | Number of SecuritiesRemainingAvailable ForFuture IssuanceUnder EquityCompensation
Plans
|Equity compensation plans approved by security holders     |  | 360,242                                                             |  | $                                                 | 8.85 |                                                                                         | 575,039
|Equity compensation plans not approved by security holders |  |                                                                    |  |                                                   |     |                                                                                         |       
|                                                           |  |                                                                     |  |                                                   |      |                                                                                         |        
|Total                                                      |  | 360,242                                                             |  | $                                                 | 8.85 |                                                                                         | 575,039
|                                                           |  |                                                                     |  |                                                   |      |                                                                                         |        

For additional information regarding the Companys equity compensation plans, refer to the
discussion in Note 11 to consolidated financial statements.



|Item 13. | Certain Relationships and Related Transactions
|-------- | ----------------------------------------------

Information with respect to certain relationships and related transactions is set forth in the Proxy Statement 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.



|Item 14. | Principal Accountant Fees and Services
|-------- | --------------------------------------

Information
with respect to principal accountant fees and services is set forth in the Proxy Statement under the heading Principal Accountant Fees and Services, which information is incorporated herein by reference.



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PART IV



|Item 15. | Exhibits and Financial Statement Schedules
|-------- | ------------------------------------------



| | (a) | The following documents are filed as a part of this Annual Report on Form 10-K under Item 8.
| | --- | --------------------------------------------------------------------------------------------



| | 1. | Financial Statements.
| | -- | ---------------------



|                                                                                            |  | 
|------------------------------------------------------------------------------------------- |  | 
|Managements Report on Internal Control Over Financial Reporting                            |  | 
|Reports of Independent Registered Public Accounting Firm                                    |  | 
|                                                                                            | 
|Consolidated Balance Sheets at October 31, 2007 and 2006.                                   |  | 
|Consolidated Statements of Operations for the three years ended October 31, 2007.           |  | 
|Consolidated Statements of Cash Flows for the three years ended October 31, 2007.           |  | 
|Consolidated Statements of Stockholders Equity for the three years ended October 31, 2007. |  | 
|Notes of Consolidated Financial Statements.                                                 |  | 



| | 2. | Financial Statement Schedule. The following consolidated financial statement schedule of the Company and its subsidiaries and the report of the independent accountant 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 on Form 10-K.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

SCHEDULE II

SHILOH INDUSTRIES, INC.

VALUATION AND QUALIFYING ACCOUNTS AND RESERVES



|                                            |  |                            |       |                                      |   |       |            |  |   |                       |     |  |   |      
|------------------------------------------- |  | -------------------------- | ----- | ------------------------------------ | - | ----- | ---------- |  | - | --------------------- | --- |  | - | -----
|Description                                 |  | Balance atBeginning ofYear |       | AdditionsCharged toCosts andExpenses |   |       | Deductions |  |   | Balance atEnd of Year
|Valuation allowance for accounts receivable |  |                            |       |                                      |   |       |            |  |   |                       |     |  |   |      
|Year ended October 31, 2007                 |  | $                          | 680   |                                      | $ | 653   |            |  | $ | 648                   |     |  | $ | 685  
|Year ended October 31, 2006                 |  | $                          | 1,302 |                                      | $ | 247   |            |  | $ | 869                   |     |  | $ | 680  
|Year ended October 31, 2005                 |  | $                          | 1,546 |                                      | $ | 659   |            |  | $ | 903                   |     |  | $ | 1,302
|Valuation allowance for deferred tax assets |  |                            |       |                                      |   |       |            |  |   |                       |     |  |   |      
|Year ended October 31, 2007                 |  | $                          | 1,418 |                                      | $ | 2,032 | (2)        |  | $ | 115                   |     |  | $ | 3,335
|Year ended October 31, 2006                 |  | $                          | 2,792 |                                      | $ | 243   |            |  | $ | 1,617                 | (1) |  | $ | 1,418
|Year ended October 31, 2005                 |  | $                          | 6,398 |                                      | $ | 107   |            |  | $ | 3,713                 | (1) |  | $ | 2,792

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.

---

|(1) | The deductions of $1,617 and $3,713 in 2006 and 2005, respectively, represent a reversal of the valuation reserve and a benefit in the fiscal 2006 and 2005 tax provision as
discussed in Note 12 of the notes to consolidated financial statements.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | The additions of $2,032 in fiscal year 2007 represents increases in the valuation reserve for the foreign net operation losses and tax credits as discussed in Note 12 of the notes
to consolidated financial statements.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3. Exhibits. The exhibits listed in the accompanying Exhibit Index and required by
Item 601 of Regulation S-K (numbered in accordance with Item 601 of Regulation S-K) are filed as part of this Annual Report.



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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

Date: December 20, 2007



SHILOH INDUSTRIES, INC .By:

/s/    THEODORE K.
ZAMPETISTheodore K. ZampetisPresident and Chief Executive OfficerBy:

/s/    STEPHEN E. GRAHAMStephen E. GrahamChief Financial Officer


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 the capabilities and on the dates indicated.



|                                                 |  |                                                                                  |  |                  
|------------------------------------------------ |  | -------------------------------------------------------------------------------- |  | -----------------
|Signature                                        |  | Title                                                                            |  | Date             
|                                                 |  |                                                                                 
|/s/    THEODORE K.
ZAMPETIS Theodore K. Zampetis |  | President and Chief Executive Officer and Director (Principal Executive Officer) |  | December 20, 2007
|                                                 |  |                                                                                 
|/s/    STEPHEN E.
GRAHAM Stephen E. Graham       |  | Chief Financial Officer (Principal Accounting and Principal Financial Officer)   |  | December 20, 2007
|                                                 |  |                                                                                 
|* Curtis E. Moll                                 |  | Chairman and Director                                                            |  | December 20, 2007
|                                                 |  |                                                                                 
|* Cloyd Abruzzo                                  |  | Director                                                                         |  | December 20, 2007
|                                                 |  |                                                                                 
|* George G. Goodrich                             |  | Director                                                                         |  | December 20, 2007
|                                                 |  |                                                                                 
|* David J. Hessler                               |  | Director                                                                         |  | December 20, 2007
|                                                 |  |                                                                                 
|* Gary
A. Oatey                                  |  | Director                                                                         |  | December 20, 2007
|                                                 |  |                                                                                 
|* John
J. Tanis                                  |  | Director                                                                         |  | December 20, 2007
|                                                 |  |                                                                                 
|* Dieter Kaesgen                                 |  | Director                                                                         |  | December 20, 2007
|                                                 |  |                                                                                 
|* Robert J. King, Jr.                            |  | Director                                                                         |  | December 20, 2007



|* | 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/    STEPHEN E. GRAHAMStephen E. Graham, Attorney-In-Fact




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##### Table of Contents

EXHIBIT INDEX



|            |  |                                                                                                                                                                                                                                                                                                                                                                                         
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                                                                                             
|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)     |  | Certificate of Designation, dated December 31, 2001, authorizing the issuance of 100,000 shares of Series A Preferred Stock, par value
$.01, is 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, 2001 (Commission File No. 0-21964).                                                               
|            | 
|3.1(iii)    |  | Amended and Restated By-Laws of the Company, dated December 13, 2007.                                                                                                                                                                                                                                                                                                                   
|            | 
|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).                                                                                                                            
|            | 
|4.3         |  | 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).                                                                              
|            | 
|10.1*       |  | Amended and Restated 1993 Key Employee Stock Incentive Plan (as Amended and Restated as of December 12, 2002) is incorporated herein by
reference to Exhibit A of the Companys Proxy Statement on Schedule 14A for the fiscal year ended October 31, 2002 (Commission File No. 0-21964).                                                                                               
|            | 
|10.2*       |  | Form of Incentive Stock Option Agreement is incorporated herein by reference to Exhibit 10.2 of the Companys Annual Report on Form 10-K
for the fiscal year ended October 31, 2004 (Commission File No. 0-21964).                                                                                                                                                                      
|            | 
|10.3*       |  | Form of Nonqualified Stock Option Agreement is incorporated herein by reference to Exhibit 10.3 of the Companys Annual Report on Form
10-K for the fiscal year ended October 31, 2004 (Commission File No. 0-21964).                                                                                                                                                                   
|            | 
|10.4        |  | Transitional Services Agreement, dated October 31, 1999, by and among the Company, Shiloh Automotive, Inc. and MTD Products Inc is
incorporated herein by reference to Exhibit 10.11 of the Companys Annual Report on Form 10-K for the fiscal year ended October 31, 1999 (Commission File No. 0-21964).                                                                              
|            | 
|10.5        |  | Operating Agreement for Valley City Steel LLC, dated July 31, 2001, by and among Viking Steel, Valley City Steel Company and Valley City
Steel-779, LLC, is incorporated herein by reference to Exhibit 10.14 of the Companys Annual Report on Form 10-K for the fiscal year ended October 31, 2001 (Commission File No. 0-21964).                                                     
|            | 
|10.6        |  | Joint Development Agreement, dated June 4, 2001, by and between the Company and Pullman Industries, Inc., is incorporated herein by
reference to Exhibit 10.15 of the Companys Annual Report on Form 10-K for the fiscal year ended October 31, 2001 (Commission File No. 0-21964).                                                                                                    
|            | 
|10.7*       |  | Employment Agreement, including Forms of Option Agreement, Supplemental Executive Retirement Plan and Noncompetitive Agreement, between Shiloh
Industries, Inc. and Theodore K. Zampetis, dated February 1, 2002, is incorporated herein by reference to Exhibit 10.1 of the Companys Quarterly Report on Form 10-Q for the quarter ended April 30, 2002 (Commission File No. 0-21964).



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|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|10.8        |  | Cognovit Promissory Note, dated May 9, 2002, on behalf of Shiloh Industries, Inc. payable to Dieter Kaesgen, is incorporated herein by
reference to Exhibit 10.4 of the Companys Quarterly Report on Form 10-Q for the quarter ended July 31, 2002 (Commission File No. 0-21964).                                                                                                                                                                                                                                                                      
|            | 
|10.9        |  | Cognovit Promissory Note, dated May 9, 2002, on behalf of Shiloh Industries, Inc. payable to Curtis E. Moll, is incorporated herein by
reference to Exhibit 10.5 of the Companys Quarterly Report on Form 10-Q for the quarter ended July 31, 2002 (Commission File No. 0-21964).                                                                                                                                                                                                                                                                      
|            | 
|10.10       |  | Manufacturing Supply Arrangement, dated May 10, 2002, between MTD Products Inc and Shiloh Corporation, is incorporated herein by
reference to Exhibit 10.6 of the Companys Quarterly Report on Form 10-Q for the quarter ended July 31, 2002 (Commission File No. 0-21964).                                                                                                                                                                                                                                                                            
|            | 
|10.11       |  | Manufacturing Supply Arrangement, dated May 10, 2002, between MTD Products Inc and Shiloh Automotive, Inc., is incorporated herein by
reference to Exhibit 10.7 of the Companys Quarterly Report on Form 10-Q for the quarter ended July 31, 2002 (Commission File No. 0-21964).                                                                                                                                                                                                                                                                       
|            | 
|10.12       |  | Credit and Security Agreement, dated January 15, 2004, among the Company and the lenders party thereto, LaSalle Bank National Association
as lead arranger and administrative agent, National City Bank as co-lead arranger and syndication agent and KeyBank National Association as documentation agent, is incorporated herein by reference to Exhibit 10.23 of the Companys Annual Report
on Form 10-K for the fiscal year ended October 31, 2003 (Commission File No. 0-21964).                                                                   
|            | 
|10.13*      |  | 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 October 31, 1995
(Commission File No. 0-21964).                                                                                                                                           
|            | 
|10.14       |  | Amended and Restated Credit Agreement, dated January 18, 2005, among the Company, the other loan parties thereto, LaSalle Bank National
Association as lead arranger and administrative agent, National City Bank and KeyBank National Association as co-syndication agents and Citizens Bank of Pennsylvania and U.S. Bank National Association as co-documentation agents is incorporated
herein by reference to Exhibit 10.1 of the Companys Current Report on Form 8-K filed with the Commission on January 24, 2005 (Commission File No. 0-21964).
|            | 
|10.15       |  | Shiloh Industries, Inc. Senior Management Bonus Plan is incorporated herein by reference to Exhibit B of the Companys Proxy Statement on
Schedule 14A for the fiscal year ended October 31, 2004 (Commission File No. 0-21964).                                                                                                                                                                                                                                                                                                                        
|            | 
|10.16       |  | Change in Control Severance Agreement between Theodore K. Zampetis and Shiloh Industries, Inc., dated February 5, 2007, is incorporated
herein by reference to Exhibit 10.16 of the Companys Quarterly Report on Form 10-Q for the quarter ended April 30, 2007.                                                                                                                                                                                                                                                                                       
|            | 
|10.17       |  | Change in Control Severance Agreement between Stephen E. K. Graham and Shiloh Industries, Inc., dated February 5, 2007, is incorporated herein
by reference to Exhibit 10.17 of the Companys Quarterly Report on Form 10-Q for the quarter ended April 30, 2007.                                                                                                                                                                                                                                                                                       
|            | 
|10.18       |  | Change in Control Severance Agreement between James F. Keys and Shiloh Industries, Inc., dated February 5, 2007, is incorporated herein by
reference to Exhibit 10.18 of the Companys Quarterly Report on Form 10-Q for the quarter ended April 30, 2007.                                                                                                                                                                                                                                                                                              
|            | 
|10.19       |  | Change in Control Severance Agreement between Anthony M. Parente and Shiloh Industries, Inc., dated February 5, 2007, is incorporated herein
by reference to Exhibit 10.19 of the Companys Quarterly Report on Form 10-Q for the quarter ended April 30, 2007.                                                                                                                                                                                                                                                                                         



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##### Table of Contents

|            |  |                                                                                                                                                                                                                                                                                 
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                     
|10.20       |  | Change in Control Severance Agreement between James R. Walker and Shiloh Industries, Inc., dated February 5, 2007, is incorporated herein by
reference to Exhibit 10.20 of the Companys Quarterly Report on Form 10-Q for the quarter ended April 30, 2007.                    
|            | 
|10.21       |  | Indemnification Agreement between Directors and Officers and Shiloh Industries, Inc., dated February 5, 2007, is incorporated herein by
reference to Exhibit 10.21 of the Companys Quarterly Report on Form 10-Q for the quarter ended April 30, 2007.                         
|            | 
|14.1        |  | Shiloh Industries, Inc. Code of Conduct, approved by the Companys Board of Directors on February 17, 2004 is incorporated herein by
reference to Exhibit 14.1 of the Companys Annual Report on Form 10-K for fiscal year ended October 31, 2004 (Commission File No. 0-21964).
|            | 
|21.1        |  | Subsidiaries of the Company.                                                                                                                                                                                                                                                    
|            | 
|23.1        |  | Consent of Grant Thornton LLP.                                                                                                                                                                                                                                                  
|            | 
|23.2        |  | Consent of Deloitte & Touche LLP.                                                                                                                                                                                                                                               
|            | 
|24.1        |  | Powers of Attorney.                                                                                                                                                                                                                                                             
|            | 
|31.1        |  | Principal Executive Officers Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                          
|            | 
|31.2        |  | Principal Financial Officers Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                          
|            | 
|32.1        |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                         

---

|* | Reflects management contract or other compensatory arrangement required to be filed as an exhibit pursuant to Item 15 (b) of this Report.
|- | -----------------------------------------------------------------------------------------------------------------------------------------



70