Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) – February 14, 2024

SIFCO Industries, Inc.

(Exact name of registrant as specified in its charter)

Ohio

1-5978

34-0553950

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

970 East 64th Street, Cleveland Ohio

44103

(Address of principal executive offices)

(ZIP Code)

Registrant’s telephone number, including area code: (216) 881-8600

N.A.

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).


Emerging growth company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Shares

SIF

NYSE American


Item 2.02			Results of Operations and Financial Condition.

On February 14, 2024, SIFCO Industries, Inc. (the "Company" or "SIFCO") issued a press release announcing its financial results for its first quarter ended December 31, 2023. A copy of this press release is furnished with this Report as Exhibit 99.1 and is incorporated herein by reference.

The information contained in this item and in the accompanying exhibit shall not be deemed filed by SIFCO for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such information will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that SIFCO specifically incorporates it by reference.


Item 9.01			Financial Statements and Exhibits.

(d) Exhibits

99.1 Earnings Press Release dated February 14, 2024

104 Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



						SIFCO Industries, Inc.
						(Registrant)

Date: February 14, 2024
						/s/ Thomas R. Kubera
						Thomas R. Kubera
						Chief Financial Officer
						(Principal Financial Officer)

SIFCO Industries, Inc. (“SIFCO”) Announces

First Quarter Fiscal 2024 Financial Results

Cleveland - SIFCO Industries, Inc. (NYSE American: SIF) today announced financial results for its first quarter of fiscal 2024, which ended December 31, 2023.

First Quarter Results

•Net sales in the first quarter of fiscal 2024 decreased 1.2% to $21.1 million, compared with $21.3 million for the same period in fiscal 2023.

•Net loss for the first quarter of fiscal 2024 was $3.4 million, or $(0.57) per diluted share, compared with net loss of $2.6 million, or $(0.44) per diluted share, in the first quarter of fiscal 2023.

•EBITDA was $(1.4) million in the first quarter of fiscal 2024, compared with $(0.7) million in the first quarter of fiscal 2023.

•Adjusted EBITDA in the first quarter of fiscal 2024 was $(0.8) million, compared with Adjusted EBITDA of $(0.1) million in the first quarter of fiscal 2023.

Other Highlights

CEO Peter W. Knapper stated, “Our first quarter was dominated by new product development activities. Our backlog continues to increase, now at $130.1 million. Inventory increased $3.6 million compared to prior year quarter as we increase production to meet our customer demands.”

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.

The Company's Annual Report on Form 10-K for the year ended September 30, 2023 and other reports filed with the Securities and 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.

First Quarter ended December 31,

(Amounts in thousands, except per share data)

(Unaudited)


	Three Months Ended December 31,
		2023		2022
Net sales		$	21,052	$	21,299
Cost of goods sold		20,316		20,038
Gross profit		736		1,261
Selling, general and administrative expenses		3,581		3,280

Amortization of intangible assets		40		61
Gain on disposal of operating assets		—		(11)

Operating loss		(2,885)		(2,069)

Interest expense, net		430		275

Foreign currency exchange loss (gain), net		4		(3)
Other expense, net		53		182
Loss before income tax expense		(3,372)		(2,523)
Income tax expense		50		66


Net loss		$	(3,422)	$	(2,589)










Net loss per share
Basic		$	(0.57)	$	(0.44)
Diluted		$	(0.57)	$	(0.44)

Weighted-average number of common shares (basic)		5,956		5,896
Weighted-average number of common shares (diluted)		5,956		5,896

Consolidated Condensed Balance Sheets

(Amounts in thousands, except per share data)

(Unaudited)


	December 31, 2023		September 30, 2023
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	3,236	$	368
Receivables, net of allowance for doubtful accounts of $121 and $242, respectively	18,184		20,196

Contract assets	10,949		10,091

Inventories, net	12,430		8,853
Refundable income taxes	84		84

Prepaid expenses and other current assets	2,692		1,882


Total current assets	47,575		41,474
Property, plant and equipment, net	35,884		36,287
Operating lease right-of-use assets, net	14,152		14,380
Intangible assets, net	248		278
Goodwill	3,493		3,493
Other assets	131		81

Total assets	$	101,483	$	95,993
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	4,085	$	3,820
Promissory note - related party	3,150		—
Revolver	16,061		16,289
Short-term operating lease liabilities	884		869
Accounts payable	14,832		13,497


Accrued liabilities	8,852		6,477

Total current liabilities	47,864		40,952
Long-term debt, net of current maturities, net of unamortized debt issuance costs	4,393		2,457
Long-term operating lease liabilities, net of short-term	13,799		14,020
Deferred income taxes, net	105		142
Pension liability	3,411		3,417
Other long-term liabilities	664		670

Shareholders’ equity:
Serial preferred shares, no par value, authorized 1,000 shares; 0 shares issued and outstanding at December 31, 2023 and September 30, 2023	—		—
Common shares, par value $1 per share, authorized 10,000 shares; issued and outstanding shares 6,160 at December 31, 2023 and 6,105 at September 30, 2023	6,160		6,105
Additional paid-in capital	11,609		11,626
Retained earnings	19,842		23,264
Accumulated other comprehensive loss	(6,364)		(6,660)
Total shareholders’ equity	31,247		34,335
Total liabilities and shareholders’ equity	$	101,483	$	95,993

Non-GAAP Financial Measures

Presented below is certain financial information based on the Company's EBITDA and Adjusted EBITDA. References to “EBITDA” mean earnings (losses) from continuing 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 management 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 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 income (loss), to measure operating performance. Neither EBITDA nor Adjusted EBITDA is a measurement of financial performance under GAAP, and neither should be considered as an alternative to net loss or cash flow from operations determined in accordance with GAAP. 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	Three Months Ended
	December 31,
		2023		2022
Net loss		$	(3,422)	$	(2,589)
Adjustments:
Depreciation and amortization expense		1,562		1,571
Interest expense, net		430		275
Income tax expense		50		66
EBITDA		(1,380)		(677)
Adjustments:
Foreign currency exchange loss (gain), net (1)		4		(3)
Other expense, net (2)		54		72
Gain on disposal of assets (3)		—		(11)



Equity compensation (4)		86		122


LIFO impact (5)		293		262
IT incident costs, net (6)		(1)		110

Strategic alternative expense (7)		187		—
Adjusted EBITDA		$	(757)	$	(125)

(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 (prior year included $0.1 million in loss on insurance recovery, separately reclassed to IT incident costs, net line).

(3)Represents the difference between the proceeds from the sale of operating equipment and the carrying value shown on the Company's books.

(4)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.

(5)Represents the change in the reserve for inventories for which cost is determined using the last-in, first-out ("LIFO") method.

(6)Represents incremental information technology costs as it relates to the cybersecurity incident and loss on insurance recovery (prior year balance includes reclassed amount of $0.1 million from footnote two above).

(7)Represents expense related to evaluation of strategic alternatives.

Reference to the above activities can be found in the consolidated financial statements included in Item 8 of the Company's Annual Report on Form 10-K.

Contacts

SIFCO Industries, Inc.

Thomas R. Kubera, 216-881-8600

www.sifco.com

Cover	Feb. 14, 2024
Cover [Abstract]
Document Type	8-K
Document Period End Date	Feb. 14, 2024
Entity Registrant Name	SIFCO Industries, Inc.
Entity Incorporation, State or Country Code	OH
Entity File Number	1-5978
Entity Tax Identification Number	34-0553950
Entity Address, Postal Zip Code	44103
Entity Address, State or Province	OH
Entity Address, City or Town	Cleveland
Entity Address, Address Line One	970 East 64th Street,
City Area Code	216
Local Phone Number	881-8600
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Title of 12(b) Security	Common Shares
Trading Symbol	SIF
Security Exchange Name	NYSEAMER
Amendment Flag	false
Entity Central Index Key	0000090168