SIFCO Industries(US:SIF)2024-05-09 20:57Financial Performance - Net sales for the first six months of fiscal 2024 increased by $7.1 million to $47.6 million, compared to $40.5 million in the same period of fiscal 2023[89] - Commercial net sales accounted for 64.3% of total net sales in the first six months of fiscal 2024, up from 53.1% in the same period of fiscal 2023[90] - Net sales for the second quarter of fiscal 2024 increased by $7.4 million to $26.6 million, compared to $19.2 million in the same period of fiscal 2023[99] - Commercial net sales were 65.5% of total net sales in the second quarter of fiscal 2024, up from 59.0% in the comparable period of fiscal 2023[100] Cost and Profitability - Cost of goods sold increased by $6.6 million, or 17.5%, to $44.1 million, representing 92.7% of net sales in the first six months of fiscal 2024[91] - Gross profit increased by $0.5 million to $3.5 million in the first six months of fiscal 2024, with a gross profit margin of 7.3%[92] - Gross profit for the second quarter of fiscal 2024 increased by $1.0 million to $2.7 million, with a gross profit margin of 10.3%[102] Expenses and Losses - Selling, general and administrative expenses decreased to $6.8 million, or 14.3% of net sales, from $7.1 million, or 17.6% of net sales in the same period of fiscal 2023[93] - Net loss for the first six months of fiscal 2024 was $5.0 million, consistent with the net loss in the same period of fiscal 2023[98] - Net loss for Q2 fiscal 2024 was $1.6 million, a reduction from a net loss of $2.4 million in Q2 fiscal 2023, attributed to higher sales volume and gross margin improvements[107] EBITDA and Operational Performance - EBITDA for Q2 fiscal 2024 was $926,000, compared to a loss of $374,000 in Q2 fiscal 2023, indicating improved operational performance[111] - Adjusted EBITDA for Q2 fiscal 2024 was $1.3 million, significantly up from $34,000 in Q2 fiscal 2023, reflecting better cost management and revenue generation[111] Cash Flow and Liquidity - Cash and cash equivalents increased to $0.7 million at March 31, 2024, up from $0.4 million at September 30, 2023, indicating improved liquidity[116] - Operating activities used $5.3 million of cash in the first six months of fiscal 2024, primarily due to a net operating loss of $5.0 million[117] - Cash used for investing activities was $3.1 million in the first six months of fiscal 2024, mainly for short-term investments and capital expenditures[119] - Cash provided by financing activities was $8.8 million in the first six months of fiscal 2024, compared to $0.8 million in the same period of fiscal 2023, showing increased financing activity[120] Financing and Capital Expenditures - The Company obtained a bond for approximately $2.2 million with a seven-year term and a second loan for approximately $1.1 million for working capital purposes during the first six months of fiscal 2024[121] - The Company anticipates total capital expenditures for fiscal 2024 to be within the range of $3.0 million to $3.5 million, focusing on enhancing production capabilities[119] Market Conditions and Risks - The credit and capital markets experienced significant volatility during the pandemic, impacting the ability to obtain additional debt financing[126] - Tightening of the credit market and standards could negatively affect financing terms compared to the existing Credit Agreement[126] - Capital market uncertainty may hinder the company's ability to secure equity financing due to its market capitalization and status as a smaller reporting company[126] Accounting Standards - Recent accounting standards adopted and not yet adopted are detailed in the company's Annual Report on Form 10-K for the year ended September 30, 2023[127] Backlog - Total backlog as of March 31, 2024, was $137.8 million, up from $96.7 million a year earlier, with $105.3 million expected to be completed within the next 12 months[88]