SIFCO Industries(SIF) - 2025 Q3 - Quarterly Results

Company Overview SIFCO Industries, Inc. announced Q3 and 9M FY2025 financial results, specializing in aerospace and energy forgings, with forward-looking statements subject to risks Announcement of Financial Results SIFCO Industries, Inc. announced its financial results for the third quarter and first nine months of fiscal year 2025, which concluded on June 30, 2025 - SIFCO Industries, Inc. (NYSE American: SIF) announced financial results for its third quarter and first nine months of fiscal 2025, ended June 30, 2025[1] Business Overview SIFCO Industries, Inc. specializes in the production of forgings and machined components primarily for the aerospace and energy markets, utilizing processes such as forging, heat-treating, coating, and machining - SIFCO Industries, Inc. produces forgings and machined components primarily for the aerospace and energy markets[8] - The company's processes and services include forging, heat-treating, coating, and machining[8] Forward-Looking Statements and Risk Factors The press release contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially. Potential risks include economic conditions, pandemics, competition, and other factors detailed in the Company's SEC filings, particularly the Form 10-K - Statements in this press release are forward-looking statements subject to risks, uncertainties, and other factors that could cause actual results to differ materially[5] - Potential risks and uncertainties include, but are not limited to, economic conditions, concerns with or threats of pandemics, contagious diseases or health epidemics, and competition[5][7] - Detailed risk factors and uncertainties are available in Item 1A, 'Risk Factors' of the Company's Annual Report on Form 10-K for the year ended September 30, 2024, and other SEC filings[7] Third Quarter Fiscal 2025 Results SIFCO reported improved financial performance in Q3 FY2025, with slight sales growth, a turnaround to net income, and significant increases in EBITDA and Adjusted EBITDA Key Financial Highlights (Q3) SIFCO reported a significant improvement in its third-quarter fiscal 2025 financial performance, with net sales slightly increasing and a substantial turnaround from a net loss to net income from continuing operations. Both EBITDA and Adjusted EBITDA saw considerable growth Third Quarter Fiscal 2025 Key Financial Highlights | Metric | Q3 FY2025 | Q3 FY2024 | Change (YoY) | | :--------------------------------- | :---------- | :---------- | :----------- | | Net Sales | $22.1 million | $22.0 million | +0.5% | | Net Income (Loss) from Continuing Operations | $3.3 million | $(0.9) million | Turnaround | | Diluted EPS from Continuing Operations | $0.54 | $(0.16) | Turnaround | | EBITDA | $5.3 million | $1.2 million | +341.7% | | Adjusted EBITDA | $4.4 million | $1.8 million | +144.4% | Management Commentary (Q3) Management noted strong demand for SIFCO's products in Q3, driven by increased end-user production. While raw material availability improved, some shipping constraints persisted. Favorable pricing discussions with customers contributed to positive trends in both sales and margins - Demand for SIFCO's products remained strong through the third quarter as end users increase production[4] - Raw material availability has improved, but some constraints continued to affect shipments during the period[4] - Favorable pricing discussions with customers are expected to continue into the fourth quarter, contributing to positive sales and margin trends in Q3[4] First Nine Months Fiscal 2025 Results SIFCO's first nine months of FY2025 saw a 7.0% net sales increase, a significantly reduced net loss, and substantial improvements in EBITDA and Adjusted EBITDA Key Financial Highlights (9M) For the first nine months of fiscal 2025, SIFCO experienced a 7.0% increase in net sales and significantly reduced its net loss from continuing operations compared to the prior year. Both EBITDA and Adjusted EBITDA showed substantial improvements, moving from negative or near-zero to positive figures First Nine Months Fiscal 2025 Key Financial Highlights | Metric | 9M FY2025 | 9M FY2024 | Change (YoY) | | :--------------------------------- | :---------- | :---------- | :----------- | | Net Sales | $62.0 million | $58.0 million | +7.0% | | Net Loss from Continuing Operations | $(0.4) million | $(7.2) million | Reduced Loss | | Diluted EPS from Continuing Operations | $(0.07) | $(1.20) | Reduced Loss | | EBITDA | $4.9 million | $(1.5) million | Turnaround | | Adjusted EBITDA | $4.0 million | $0.1 million | Significant Increase | Consolidated Financial Statements This section presents SIFCO's consolidated statements of operations and balance sheets, highlighting improved profitability and changes in assets and liabilities due to discontinued operations Consolidated Condensed Statements of Operations The consolidated statements of operations show a strong improvement in profitability for both the third quarter and the first nine months of fiscal 2025. Gross profit and operating profit significantly increased, leading to a net income in Q3 FY2025 compared to a net loss in Q3 FY2024, and a substantial reduction in net loss for the nine-month period Consolidated Condensed Statements of Operations (Q3 and 9M FY2025 vs FY2024) | Metric (in thousands) | Q3 FY2025 | Q3 FY2024 | 9M FY2025 | 9M FY2024 | | :------------------------------------ | :-------- | :-------- | :-------- | :-------- | | Net sales | $22.1 million | $22.0 million | $62.0 million | $58.0 million | | Cost of goods sold | $16.2 million | $19.3 million | $53.6 million | $54.3 million | | Gross profit | $5.9 million | $2.7 million | $8.4 million | $3.7 million | | Operating profit (loss) | $3.3 million | $0.1 million | $0.6 million | $(4.8) million | | Income (loss) from continuing operations | $3.3 million | $(0.9) million | $(0.4) million | $(7.2) million | | Net income (loss) | $3.4 million | $0.1 million | $(0.3) million | $(4.9) million | | Basic and diluted EPS from continuing operations | $0.54 | $(0.16) | $(0.07) | $(1.20) | Consolidated Condensed Balance Sheets As of June 30, 2025, SIFCO's total assets decreased significantly compared to September 30, 2024, primarily due to the reclassification of discontinued operations. Total liabilities also saw a substantial reduction, while total shareholders' equity increased, reflecting improved financial health Consolidated Condensed Balance Sheets (June 30, 2025 vs. September 30, 2024) | Metric (in thousands) | June 30, 2025 | September 30, 2024 | Change | | :------------------------------------ | :------------ | :----------------- | :----- | | Total current assets | $38.1 million | $54.3 million | $(16.2) million | | Current assets of discontinued operations | $0 | $16.0 million | $(16.0) million | | Total assets | $77.3 million | $104.6 million | $(27.3) million | | Total current liabilities | $25.6 million | $54.0 million | $(28.4) million | | Current liabilities of discontinued operations | $0 | $10.1 million | $(10.1) million | | Total liabilities and shareholders' equity | $77.3 million | $104.6 million | $(27.3) million | | Total shareholders' equity | $35.8 million | $30.4 million | +$5.4 million | - The decrease in total assets and liabilities is largely due to the reclassification of discontinued operations to zero as of June 30, 2025[10] Non-GAAP Financial Measures This section defines and explains the purpose and limitations of non-GAAP measures like EBITDA and Adjusted EBITDA, along with their reconciliation to GAAP net income Definition and Purpose SIFCO uses non-GAAP measures like EBITDA and Adjusted EBITDA as supplements to GAAP results. Management believes these measures are useful indicators for evaluating operating performance, including debt servicing ability, and for evaluating prospective acquisitions - EBITDA represents earnings (losses) from continuing operations before interest, taxes, depreciation, and amortization[11] - Adjusted EBITDA is EBITDA plus specific adjustments detailed in the reconciliations[11] - Management considers these non-GAAP measures useful for evaluating operating performance, debt servicing ability, and prospective acquisitions[12] Limitations of Non-GAAP Measures Non-GAAP measures like EBITDA and Adjusted EBITDA have limitations, as they do not reflect interest expense, cash requirements for asset replacement (despite non-cash depreciation), amortization of intangible assets, or tax payments. They should not be considered in isolation or as substitutes for GAAP results - Neither EBITDA nor Adjusted EBITDA reflects interest expense, cash requirements for asset replacements, intangible asset amortization, or tax payments[15] - These non-GAAP financial measures should not be considered in isolation or as a substitute for GAAP results of operations[12] - The Company's calculation of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies[13] Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA The reconciliation table details the adjustments made to net income (loss) from continuing operations to arrive at EBITDA and Adjusted EBITDA for both the third quarter and first nine months of fiscal 2025 and 2024. Key adjustments include depreciation, interest, income tax, and various non-recurring or non-operating items Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA (Q3 and 9M FY2025 vs FY2024) | Metric (in thousands) | Q3 FY2025 | Q3 FY2024 | 9M FY2025 | 9M FY2024 | | :------------------------------------ | :-------- | :-------- | :-------- | :-------- | | Net income (loss) | $3.4 million | $0.1 million | $(0.3) million | $(4.9) million | | Income (loss) from continuing operations | $3.3 million | $(0.9) million | $(0.4) million | $(7.2) million | | Depreciation and amortization expense | $1.5 million | $1.2 million | $3.9 million | $3.6 million | | Interest (income) expense, net | $0.4 million | $0.9 million | $1.3 million | $2.1 million | | Income tax expense | $41 thousand | $0 thousand | $120 thousand | $11 thousand | | EBITDA | $5.3 million | $1.2 million | $4.9 million | $(1.5) million | | Foreign currency exchange loss (gain), net | $5 thousand | $(1) thousand | $4 thousand | $0 thousand | | Other (income) expense, net | $(479) thousand | $99 thousand | $(404) thousand | $253 thousand | | LIFO impact | $(470) thousand | $475 thousand | $(606) thousand | $826 thousand | | Adjusted EBITDA | $4.4 million | $1.8 million | $4.0 million | $0.1 million | Corporate Information This section provides contact details for SIFCO Industries, Inc. and footnotes explaining various adjustments in the non-GAAP reconciliation Contacts and Footnotes This section provides contact information for SIFCO Industries, Inc. and detailed explanations for the adjustments made in the non-GAAP reconciliation, including foreign currency exchange, other income/expense, asset disposal, severance, equity compensation, pension, transaction-related expenses, LIFO impact, IT incident costs, and strategic alternative expenses - Contact information for SIFCO Industries, Inc. includes Jennifer Wilson (216-881-8600) and www.sifco.com[17](index=17&type=chunk) - Footnotes detail non-GAAP reconciliation adjustments, including foreign currency exchange, other income/expense, asset disposal, severance, equity compensation, pension, transaction-related, LIFO impact, IT incident, and strategic alternative expenses[17]