SIFCO Industries(SIF) - 2025 Q1 - Quarterly Results

Company Announcement & Overview SIFCO Industries announced its Q1 FY2025 financial results, detailed its business, and provided forward-looking statements Announcement Details SIFCO Industries, Inc. announced its first quarter fiscal year 2025 financial results for the period ended December 31, 2024 - SIFCO Industries, Inc. (NYSE American: SIF) reported its financial results for the first quarter of fiscal year 2025, ended December 31, 2024[1][2] Business Description & Forward-Looking Statements SIFCO Industries manufactures forgings and machined components for aerospace and energy markets, providing forward-looking statements with inherent risks and uncertainties - SIFCO Industries, Inc. primarily manufactures forgings and machined components for the aerospace and energy markets, offering processes including forging, heat treating, coating, and machining[6] - The company issued forward-looking statements, indicating future results may differ materially due to economic conditions, pandemics, and competition, advising review of 10-K risk factors[5] First Quarter Fiscal 2025 Financial Highlights This section summarizes key financial performance indicators and CEO commentary on operational focus and backlog growth Key Financial Performance Indicators In Q1 FY2025, SIFCO's net sales grew significantly by 35.0%, while net loss from continuing operations narrowed, and both EBITDA and Adjusted EBITDA improved Key Financial Metrics Comparison for Q1 Fiscal Year 2025 | Metric | Q1 FY2025 (million USD) | Q1 FY2024 (million USD) | Year-over-Year Change (%) | | :--------------------------------- | :-------------------------- | :-------------------------- | :------------- | | Net Sales | 20.9 | 15.5 | +35.0% | | Net Loss from Continuing Operations | (2.4) | (4.1) | Improved | | Diluted Loss Per Share from Continuing Operations | (0.40) | (0.67) | Improved | | Net Income from Discontinued Operations | 0.1 | 0.6 | Decreased | | Diluted Earnings Per Share from Discontinued Operations | 0.02 | 0.10 | Decreased | | EBITDA | (0.8) | (2.5) | Improved | | Adjusted EBITDA | (0.2) | (1.9) | Improved | CEO Commentary & Operational Focus CEO George Scherff highlighted the quarter's focus on improving plant margins and efficiency, noting continued backlog growth indicating strong market demand - CEO George Scherff stated the first quarter focused on improving margins and production efficiency at both facilities[4] - The company's backlog continuously increased, reaching $121.9 million, indicating strong product demand[4] Consolidated Financial Statements This section presents the condensed consolidated statements of operations and balance sheets for the reporting period Condensed Statements of Operations In Q1 FY2025, net sales increased 35.0% to $20.883 million, gross profit turned positive at $0.928 million from a loss, and loss from continuing operations significantly narrowed Condensed Consolidated Statements of Operations (Unaudited, in thousands of USD) | Metric | For the Three Months Ended December 31, 2024 | For the Three Months Ended December 31, 2023 | | :-------------------------------------- | :-------------------------------------- | :-------------------------------------- | | Net Sales | $20,883 | $15,474 | | Cost of Sales | 19,955 | 16,019 | | Gross Profit (Loss) | 928 | (545) | | Selling, General and Administrative Expenses | 2,840 | 3,103 | | Operating Loss | (1,912) | (3,648) | | Interest Expense, Net | 469 | 342 | | Foreign Currency Exchange (Gain) Loss, Net | (2) | 4 | | Other Expense, Net | 38 | 69 | | Loss from Continuing Operations Before Income Taxes | (2,417) | (4,063) | | Income Tax Expense | 5 | 6 | | Loss from Continuing Operations | (2,422) | (4,069) | | Income from Discontinued Operations, Net of Tax | 106 | 647 | | Net Loss | $(2,316) | $(3,422) | | Basic and Diluted Loss Per Share from Continuing Operations | $(0.40) | $(0.67) | | Basic and Diluted Earnings Per Share from Discontinued Operations | 0.02 | 0.10 | | Basic and Diluted Loss Per Share | $(0.38) | $(0.57) | | Weighted Average Common Shares Outstanding (Basic and Diluted) | 6,016 | 5,956 | Condensed Balance Sheets As of December 31, 2024, total assets were $80.982 million, a decrease from September 30, 2024, primarily due to discontinued operations divestiture, with cash increasing and liabilities and equity adjusting Condensed Consolidated Balance Sheets (Unaudited, in thousands of USD) | Metric | December 31, 2024 | September 30, 2024 | | :-------------------------------------------------------------------------------- | :------------------- | :------------------- | | ASSETS | | | | Cash and Cash Equivalents | $3,143 | $1,714 | | Accounts Receivable, Net | 16,848 | 17,272 | | Contract Assets | 10,119 | 10,745 | | Inventories, Net | 5,683 | 6,230 | | Current Assets of Discontinued Operations | — | 15,967 | | Total Current Assets | 38,935 | 54,323 | | Property, Plant and Equipment, Net | 25,347 | 26,261 | | Operating Lease Right-of-Use Assets, Net | 13,132 | 13,326 | | Goodwill | 3,493 | 3,493 | | Non-Current Assets of Discontinued Operations | — | 6,864 | | Total Assets | $80,982 | $104,624 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Current Portion of Long-Term Debt, Net | $3,227 | $353 | | Revolving Credit Facility | 12,633 | 20,142 | | Accounts Payable | 8,820 | 11,574 | | Current Liabilities of Discontinued Operations | — | 10,058 | | Total Current Liabilities | 31,014 | 54,010 | | Long-Term Debt, Net | 85 | — | | Long-Term Operating Lease Liabilities, Net | 12,844 | 13,035 | | Pension Liability | 2,398 | 2,465 | | Total Stockholders' Equity | 33,676 | 30,425 | | Total Liabilities and Stockholders' Equity | $80,982 | $104,624 | Non-GAAP Financial Measures This section defines non-GAAP metrics, outlines their purpose and limitations, and reconciles them to GAAP net loss Definition, Purpose, and Limitations The company uses EBITDA and Adjusted EBITDA as non-GAAP metrics to supplement GAAP results, assessing operational performance and debt serviceability, while acknowledging limitations such as not reflecting cash needs for interest, taxes, depreciation, and amortization - EBITDA refers to earnings (loss) from continuing operations before interest, taxes, depreciation, and amortization, with Adjusted EBITDA including specific further adjustments[10] - Management considers EBITDA and Adjusted EBITDA useful metrics for evaluating operational performance, debt serviceability, and potential acquisitions[11] - Limitations of non-GAAP metrics include not reflecting cash requirements for interest expense, tax payments, asset replacement, or amortization of intangible assets[11][12][14] Reconciliation of Net Loss to EBITDA and Adjusted EBITDA The company provided a reconciliation of net loss to EBITDA and Adjusted EBITDA for Q1 FY2025, showing EBITDA improved from ($2.489 million) to ($0.767 million) and Adjusted EBITDA from ($1.851 million) to ($0.248 million) Reconciliation of Net Loss to EBITDA and Adjusted EBITDA (in thousands of USD) | Metric | December 31, 2024 | December 31, 2023 | | :-------------------------------------- | :------------------- | :------------------- | | Net Loss | $(2,316) | $(3,422) | | Less: Income from Discontinued Operations, Net of Tax | 106 | 647 | | Loss from Continuing Operations | (2,422) | (4,069) | | Adjustments: | | | | Depreciation and Amortization Expense | 1,181 | 1,232 | | Interest Expense, Net | 469 | 342 | | Income Tax Expense | 5 | 6 | | EBITDA | (767) | (2,489) | | Adjustments: | | | | (1) Foreign Currency Exchange (Gain) Loss, Net | (2) | 4 | | (2) Other Expense, Net | 38 | 69 | | (3) Non-recurring Severance Adjustment | (22) | — | | (3) Equity Compensation | 21 | 86 | | (4) Transaction Related Expense Adjustment | (17) | — | | (5) LIFO Impact | 501 | 293 | | (6) IT Event Costs, Net | — | (1) | | (7) Strategic Alternatives Costs | — | 187 | | Adjusted EBITDA | $(248) | $(1,851) | Footnotes for Non-GAAP Adjustments The company provided detailed footnotes for non-GAAP adjustments, explaining the nature of foreign currency exchange, other expenses, equity compensation, transaction-related fees, LIFO impact, IT event costs, and strategic alternatives costs - Footnotes explain adjustments such as foreign currency exchange gains or losses arising from functional currency and transaction currency rate changes[13][16] - Other expenses refer to miscellaneous non-operating income or expenses, such as pension costs or grant income[16] - Non-recurring severance adjustments and equity compensation relate to equity incentive expenses under the 2016 plan and executive severance[16] - Transaction-related expense adjustments are associated with legal fee credits from an unsuccessful acquisition of another company[16] - LIFO impact represents changes in inventory reserves determined using the Last-In, First-Out (LIFO) method[16] - IT event costs refer to incremental information technology costs (and credits) related to cybersecurity incidents and insurance claim losses[16] - Strategic alternatives costs refer to expenses associated with evaluating strategic alternatives[16] General Information This section provides essential contact information for the company Contacts The company provides contact information for investors and the public - Contact: Jennifer Wilson, Phone: 216-881-8600, Company Website: www.sifco.com[16](index=16&type=chunk)