SIFCO Industries, Inc. (NYSE American: SIF) today announced
financial results for its fourth quarter and fiscal 2022, which
ended September 30, 2022.
Fourth Quarter and Fiscal 2022 Highlights
Results for the Fourth
Quarter
- Net sales in the fourth quarter of fiscal 2022 decreased 23.4%
to $18.6 million, compared with $24.3 million for the same period
in fiscal 2021.
- Net loss for the fourth quarter of fiscal 2022 was $6.9
million, or $(1.18) per diluted share, compared with net loss of
$2.5 million, or $(0.43) per diluted share, in the fourth quarter
of fiscal 2021.
- EBITDA was $(5.2) million in the fourth quarter of fiscal 2022,
compared with $(0.8) million in the fourth quarter of fiscal
2021.
- Adjusted EBITDA in the fourth quarter of fiscal 2022 was $(4.8)
million, compared with Adjusted EBITDA of $0.2 million in the
fourth quarter of fiscal 2021.
Results for the Fiscal Year
2022
- Net sales in fiscal 2022 decreased 15.8% to $83.9 million,
compared with $99.6 million for the same period in fiscal
2021.
- Net loss in fiscal 2022 was $9.6 million, or $(1.65) per
diluted share, compared with a net loss of $0.7 million, or $(0.13)
per diluted share in fiscal 2021.
- EBITDA was $(2.7) million in fiscal 2022, compared with EBITDA
of $6.3 million in the fiscal 2021.
- Adjusted EBITDA in fiscal 2022 was $(6.6) million, compared
with Adjusted EBITDA of $5.8 million in fiscal 2021.
Other Highlights
The Company informed shareholders that it has sought to
capitalize on the current market volatility by increasing market
penetration and diversifying while maintaining a conservative
financial approach. To highlight this point, CEO Peter W. Knapper
stated, "Both Military and Commercial Aerospace worked through
inventory control as macro supply chain issues impact their
respective markets; negatively impacting requirements to us in the
quarter. Space and Semiconductor saw increased activity in the
quarter. We continue to manage cash conservatively as we provide
class leading quality and delivery to our customers."
Use of Non-GAAP Financial Measures
The Company uses certain non-GAAP measures in this release.
EBITDA and Adjusted EBITDA are non-GAAP financial measures and are
intended to serve as supplements to results provided in accordance
with accounting principles generally accepted in the United States.
SIFCO Industries, Inc. believes that such information provides an
additional measurement and consistent historical comparison of the
Company's performance. A reconciliation of the non-GAAP financial
measures to the most directly comparable GAAP measures is available
in this news release.
Forward-Looking Language
Certain statements contained in this press release are
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, such as statements
relating to financial results and plans for future business
development activities, and are thus prospective. Such
forward-looking statements are subject to risks, uncertainties and
other factors, which could cause actual results to differ
materially from future results expressed or implied by such
forward-looking statements. Potential risks and uncertainties
include, but are not limited to, economic conditions, concerns with
or threats of, or the consequences of, pandemics, contagious
diseases or health epidemics, including COVID-19, competition and
other uncertainties the Company, its customers, and the industry in
which they operate have experienced and continue to experience,
detailed from time to time in the Company's Securities and Exchange
Commission filings. For a discussion of such risk factors and
uncertainties, see Item 1A, "Risk Factors" in the Company's Annual
Report on Form 10-K for the quarter ended September 30, 2022 and
other reports filed by the Company with the Securities &
Exchange Commission.
The Company's Form 10-K for the year ended September 30, 2022
and other reports filed with the Securities & Exchange
Commission can be accessed through the Company's website:
www.sifco.com, or on the Securities
and Exchange Commission's website: www.sec.gov.
SIFCO Industries, Inc. is engaged in the production of forgings
and machined components primarily for the aerospace and energy
markets. The processes and services include forging, heat-treating,
coating, and machining.
Fiscal Year Ended September 30,
(Amounts in thousands, except per share
data)
Years Ended September
30,
2022
2021
Net sales
$
83,902
$
99,591
Cost of goods sold
85,757
88,386
Gross (loss) profit
(1,855
)
11,205
Selling, general and administrative
expenses
11,909
13,484
Amortization of intangible assets
313
1,011
(Gain) loss on disposal or impairment of
operating assets
(7
)
209
Gain on insurance recoveries
—
(2,397
)
Operating (loss)
(14,070
)
(1,102
)
Interest expense, net
645
638
Gain on debt extinguishment
(5,106
)
(287
)
Foreign currency exchange loss, net
15
23
Other expense, net
59
489
(Loss) before income tax benefit
(9,683
)
(1,965
)
Income tax benefit
(43
)
(1,222
)
Net (loss)
$
(9,640
)
$
(743
)
Net (loss) per share:
Basic
$
(1.65
)
$
(0.13
)
Diluted
$
(1.65
)
$
(0.13
)
Weighted-average number of common shares
(basic)
5,830
5,759
Weighted-average number of common shares
(diluted)
5,830
5,759
Quarter Ended September 30,
(Amounts in thousands, except per share
data)
Quarter Ended September
30,
2022
2021
Net sales
$
18,632
$
24,317
Gross (loss) profit
(3,697
)
1,248
Net (loss)
$
(6,920
)
$
(2,498
)
Net (loss) per share:
Basic
$
(1.18
)
$
(0.43
)
Diluted
$
(1.18
)
$
(0.43
)
Non-GAAP Financial Measures
Presented below is certain financial information based on our
EBITDA and Adjusted EBITDA. References to "EBITDA" mean earnings
(losses) from operations before interest, taxes, depreciation and
amortization, and references to "Adjusted EBITDA" mean EBITDA plus,
as applicable for each relevant period, certain adjustments as set
forth in the reconciliations of net income to EBITDA and Adjusted
EBITDA.
Neither EBITDA nor Adjusted EBITDA is a measurement of financial
performance under generally accepted accounting principles in the
United States of America ("GAAP"). The Company presents EBITDA and
Adjusted EBITDA because it believes that they are useful indicators
for evaluating operating performance and liquidity, including the
Company's ability to incur and service debt and it uses EBITDA to
evaluate prospective acquisitions. Although the Company uses EBITDA
and Adjusted EBITDA for the reasons noted above, the use of these
non-GAAP financial measures as analytical tools has limitations.
Therefore, reviewers of the Company's financial information should
not consider them in isolation, or as a substitute for analysis of
the Company's results of operations as reported in accordance with
GAAP. Some of these limitations include:
- Neither EBITDA nor Adjusted EBITDA reflects the interest
expense, or the cash requirements necessary to service interest
payments, on indebtedness;
- Although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized will often have to be
replaced in the future, and neither EBITDA nor Adjusted EBITDA
reflects any cash requirements for such replacements;
- The omission of the substantial amortization expense associated
with the Company's intangible assets further limits the usefulness
of EBITDA and Adjusted EBITDA; and
- Neither EBITDA nor Adjusted EBITDA includes the payment of
taxes, which is a necessary element of operations.
Because of these limitations, EBITDA and Adjusted EBITDA should
not be considered as measures of discretionary cash available to
the Company to invest in the growth of its businesses. Management
compensates for these limitations by not viewing EBITDA or Adjusted
EBITDA in isolation and specifically by using other GAAP measures,
such as net income (loss), net sales, and operating profit (loss),
to measure operating performance. The Company's calculation of
EBITDA and Adjusted EBITDA may not be comparable to the calculation
of similarly titled measures reported by other companies.
The following table sets forth a reconciliation of net loss to
EBITDA and Adjusted EBITDA:
(Dollars in thousands)
Fourth Quarter Ended
September 30,
Years Ended
September 30,
2022
2021
2022
2021
Net loss
$
(6,920
)
$
(2,498
)
$
(9,640
)
$
(743
)
Adjustments:
Depreciation and amortization expense
1,548
1,952
6,348
7,662
Interest expense, net
192
160
646
638
Income tax benefit
(13
)
(447
)
(43
)
(1,222
)
EBITDA
(5,193
)
(833
)
(2,689
)
6,335
Adjustments:
Foreign currency exchange loss, net
(1)
13
1
15
23
Other (income) loss, net (2)
(36
)
57
(149
)
215
(Gain) loss on disposal of assets (3)
(6
)
208
(7
)
209
(Gain) loss on insurance recoveries
(4)
—
98
—
(2,397
)
Gain on debt extinguishment (5)
—
—
(5,106
)
(287
)
Equity compensation expense (6)
119
91
428
469
Pension settlement/curtailment benefit
(7)
140
274
208
274
LIFO impact (8)
144
342
729
924
Adjusted EBITDA
$
(4,819
)
$
238
$
(6,571
)
$
5,765
(1)
Represents the gain or loss from
changes in the exchange rates between the functional currency and
the foreign currency in which the transaction is denominated.
(2)
Represents miscellaneous
non-operating income or expense, such as pension costs or grant
income.
(3)
Represents the difference between
the proceeds from the sale of operating equipment and the carrying
value shown on the Company's books or asset impairment of
long-lived assets.
(4)
Represents the difference between
the insurance proceeds received for the damaged property and the
carrying values shown on the Company's books for the assets that
were damaged in the fire at the Orange location that occurred in
December 2018.
(5)
Represents the gain on
extinguishment of debt and interest for the amount forgiven by the
SBA as it relates to the PPP loan in fiscal 2022 and term debt
forgiveness as is relates to foreign borrowings in fiscal 2021.
(6)
Represents the equity-based
compensation expense recognized by the Company under the 2016 Plan
due to granting of awards, awards not vesting and/or
forfeitures.
(7)
Represents expense incurred by
its defined benefit pension plans related to settlement of pension
obligations.
(8)
Represents the change in the
reserve for inventories for which cost is determined using the
last-in, first-out ("LIFO") method.
Reference to the above activities can be found in the
consolidated financial statements included in Item 8 of the Annual
Report on Form 10-K.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221222005444/en/
SIFCO Industries, Inc. Thomas R. Kubera, 216-881-8600
www.sifco.com
Sifco Industries (AMEX:SIF)
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