sif-20210630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-5978

SIFCO Industries, Inc.

(Exact name of registrant as specified in its charter)


Ohio						34-0553950
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

970 East 64th Street, Cleveland Ohio						44103
(Address of principal executive offices)						(Zip Code)

(216) 881-8600

(Registrant’s telephone number, including area code)

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 ý No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer”, “non-accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☒

		Emerging growth company	☐

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

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

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

The number of the Registrant’s Common Shares, par value $1.00, outstanding at June 30, 2021 was 5,989,129.

Part I. Financial Information

Item 1. Financial Statements

SIFCO Industries, Inc. and Subsidiaries

Consolidated Condensed Statements of Operations

(Unaudited)

(Amounts in thousands, except per share data)


	Three Months Ended June 30,				Nine Months Ended June 30,
	2021		2020		2021		2020
Net sales	$	25,330	$	27,777	$	75,274	$	84,521
Cost of goods sold	22,040		23,628		65,317		70,771
Gross profit	3,290		4,149		9,957		13,750
Selling, general and administrative expenses	2,912		2,864		10,336		10,393

Amortization of intangible assets	248		408		765		1,224
Loss on disposal of operating assets	—		55		—		98
Gain on insurance recoveries	—		(1,683)		(2,495)		(2,683)
Operating income	130		2,505		1,351		4,718

Interest expense	143		183		478		697
Foreign currency exchange loss, net	1		12		22		12
Other loss (income), net	(232)		27		(129)		(58)
Income before income tax expense (benefit)	218		2,283		980		4,067
Income tax expense (benefit)	(36)		33		(776)		(101)


Net income	$	254	$	2,250	$	1,756	$	4,168










Net income per share
Basic	$	0.04	$	0.40	$	0.31	$	0.74
Diluted	$	0.04	$	0.39	$	0.29	$	0.72

Weighted-average number of common shares (basic)	5,779		5,676		5,753		5,656
Weighted-average number of common shares (diluted)	6,006		5,807		5,960		5,768

See notes to unaudited consolidated condensed financial statements.

SIFCO Industries, Inc. and Subsidiaries

Consolidated Condensed Statements of Comprehensive Income (Loss)

(Unaudited)

(Amounts in thousands)


	Three Months Ended June 30,				Nine Months Ended June 30,
	2021		2020		2021		2020
Net income	$	254	$	2,250	$	1,756	$	4,168
Other comprehensive income:
Foreign currency translation adjustment, net of tax $0 and $0 for the three months ended and net of tax $0 and $0 for the nine months ended, respectively	79		113		62		175
Retirement plan liability adjustment, net of tax $0 and $0 for the three months end and net of tax $0 and $0 for the nine month ended, respectively	211		188		634		626

Comprehensive income	$	544	$	2,551	$	2,452	$	4,969

See notes to unaudited consolidated condensed financial statements.

SIFCO Industries, Inc. and Subsidiaries

Consolidated Condensed Balance Sheets

(Amounts in thousands, except per share data)


	June 30, 2021		September 30, 2020
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	247	$	427
Receivables, net of allowance for doubtful accounts of $120 and $249, respectively	20,206		23,225
Other receivables	—		1,547
Contract assets	14,666		11,997

Inventories, net	15,864		15,569
Refundable income taxes	103		103

Prepaid expenses and other current assets	1,596		2,338


Total current assets	52,682		55,206
Property, plant and equipment, net	43,788		44,201
Operating lease right-of-use assets, net	16,174		17,021
Intangible assets, net	1,137		1,890
Goodwill	3,493		3,493
Other assets	86		137

Total assets	$	117,360	$	121,948
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	9,828	$	7,144
Revolver	9,825		12,870
Short-term operating lease liabilities	800		991
Accounts payable	12,244		14,002
Accrued liabilities	6,889		8,290

Total current liabilities	39,586		43,297
Long-term debt, net of current maturities	2,903		4,606
Long-term operating lease liabilities, net of short-term	15,624		16,188
Deferred income taxes	556		1,400
Pension liability	9,611		10,165
Other long-term liabilities	743		769

Shareholders’ equity:
Serial preferred shares, no par value, authorized 1,000 shares	—		—
Common shares, par value $1 per share, authorized 10,000 shares; issued and outstanding shares 5,989 at June 30, 2021 and 5,916 at September 30, 2020	5,989		5,916
Additional paid-in capital	11,025		10,736
Retained earnings	44,095		42,339
Accumulated other comprehensive loss	(12,772)		(13,468)
Total shareholders’ equity	48,337		45,523
Total liabilities and shareholders’ equity	$	117,360	$	121,948

See notes to unaudited consolidated condensed financial statements.

SIFCO Industries, Inc. and Subsidiaries

Consolidated Condensed Statements of Cash Flows

(Unaudited, Amounts in thousands)


	Nine Months Ended June 30,
	2021		2020
Cash flows from operating activities:
Net income	$	1,756	$	4,168

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	5,710		5,576
Amortization of debt issuance costs

SEC Form 10-Q filed by SIFCO Industries, Inc.