sif-20210331

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 March 31, 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 March 31, 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 March 31,				Six Months Ended March 31,
	2021		2020		2021		2020
Net sales	$	24,866	$	30,537	$	49,944	$	56,744
Cost of goods sold	22,123		24,260		43,278		47,143
Gross profit	2,743		6,277		6,666		9,601
Selling, general and administrative expenses	3,596		3,321		7,423		7,529

Amortization of intangible assets	248		408		517		817
Loss on disposal of operating assets	—		41		—		41
Gain on insurance recoveries	—		(1,000)		(2,495)		(1,000)
Operating income (loss)	(1,101)		3,507		1,221		2,214

Interest expense	169		262		335		513
Foreign currency exchange loss (income), net	14		(1)		21		—
Other loss (income), net	42		25		103		(84)
Income (loss) before income tax expense (benefit)	(1,326)		3,221		762		1,785
Income tax expense (benefit)	165		(39)		(740)		(134)


Net income (loss)	$	(1,491)	$	3,260	$	1,502	$	1,919










Net income (loss) per share
Basic	$	(0.26)	$	0.57	$	0.26	$	0.34
Diluted	$	(0.26)	$	0.57	$	0.25	$	0.33

Weighted-average number of common shares (basic)	5,777		5,679		5,735		5,645
Weighted-average number of common shares (diluted)	5,777		5,770		5,932		5,748

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 March 31,				Six Months Ended March 31,
	2021		2020		2021		2020
Net income (loss)	$	(1,491)	$	3,260	$	1,502	$	1,919
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 six months ended, respectively	(303)		(130)		(17)		63
Retirement plan liability adjustment, net of tax $0 and $0 for the three months end and net of tax $0 and $0 for the six month ended, respectively	211		249		423		437

Comprehensive income (loss)	$	(1,583)	$	3,379	$	1,908	$	2,419

See notes to unaudited consolidated condensed financial statements.

SIFCO Industries, Inc. and Subsidiaries

Consolidated Condensed Balance Sheets

(Amounts in thousands, except per share data)


	March 31, 2021		September 30, 2020
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	311	$	427
Receivables, net of allowance for doubtful accounts of $251 and $249, respectively	19,068		23,225
Other receivables	—		1,547
Contract assets	13,565		11,997

Inventories, net	15,568		15,569
Refundable income taxes	103		103

Prepaid expenses and other current assets	1,959		2,338


Total current assets	50,574		55,206
Property, plant and equipment, net	44,448		44,201
Operating lease right-of-use assets, net	16,405		17,021
Intangible assets, net	1,377		1,890
Goodwill	3,493		3,493
Other assets	89		137

Total assets	$	116,386	$	121,948
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	9,783	$	7,144
Revolver	7,742		12,870
Short-term operating lease liabilities	796		991
Accounts payable	14,495		14,002
Accrued liabilities	6,368		8,290

Total current liabilities	39,184		43,297
Long-term debt, net of current maturities	2,542		4,606
Long-term operating lease liabilities, net of short-term	15,825		16,188
Deferred income taxes	616		1,400
Pension liability	9,764		10,165
Other long-term liabilities	747		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 March 31, 2021 and 5,916 at September 30, 2020	5,989		5,916
Additional paid-in capital	10,940		10,736
Retained earnings	43,841		42,339
Accumulated other comprehensive loss	(13,062)		(13,468)
Total shareholders’ equity	47,708		45,523
Total liabilities and shareholders’ equity	$	116,386	$	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)


	Six Months Ended March 31,
	2021		2020
Cash flows from operating activities:
Net income	$	1,502	$	1,919

Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Depreciation and amortization	3,730		3,731
Amortization of debt issuance costs	52		52
Loss on disposal of operating assets	—		41
Gain on insurance proceeds received	(2,495)		(1,000)

LIFO effect	335		(11)
Share transactions under company stock plan	277		217




Other long-term liabilities	(2)		(90)
Deferred income taxes

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