Core Viewpoint - SIFCO Industries, Inc. has experienced a decline in stock price following its earnings report, with a notable loss of 8.2% compared to the S&P 500's gain of 1.4% during the same period [1] Financial Performance - For Q4 fiscal 2025, SIFCO's net sales increased by 5.3% year-over-year to $22.8 million, while the loss from continuing operations narrowed to $0.5 million, or $(0.08) per diluted share, compared to a loss of $1.4 million, or $(0.24) per diluted share, in the previous year [2] - The total net loss for the quarter was $429,000, slightly improved from $443,000 a year ago, with EBITDA at $1.1 million, down 15.7% from $1.3 million [2] - For the full fiscal year, net sales rose by 6.5% to $84.8 million, and the loss from continuing operations improved significantly to $0.9 million, or $(0.15) per diluted share, from a loss of $8.6 million, or $(1.44) per diluted share, in fiscal 2024 [3] Profitability Metrics - Gross profit for Q4 declined by 5.6% to $2.2 million despite higher sales, indicating margin pressure [4] - For fiscal 2025, gross profit increased by 76.9% to $10.6 million, raising gross margin to 12.5% from 7.5% due to higher volumes and improved pricing [5] - Selling, general and administrative (SG&A) expenses decreased by 6.6% to $10.4 million, contributing to an operating income of $0.2 million compared to an operating loss of $5.2 million a year earlier [5] Revenue Mix and Market Performance - Fixed-wing aircraft revenue increased by $9.6 million to $51.4 million, while Rotorcraft sales remained flat at $17.1 million [6] - Commercial space revenue declined sharply by $8.2 million to $5 million, attributed to reduced procurement activity [6] - Military net sales accounted for 56.5% of total net sales in fiscal 2025, up from 47.6% in fiscal 2024, while commercial net sales represented 43.5% [7] Management Insights - Management highlighted progress in margin improvement and strong demand in military and commercial aerospace markets, with a backlog of $119.2 million at the end of fiscal 2025 [8] - The company emphasized a focus on cost reduction, selective price increases, and scaling production to meet customer needs [8] Factors Influencing Financial Results - The year-over-year improvement was supported by higher sales volumes, improved gross margins, and a net Employee Retention Credit (ERC) benefit totaling $3.3 million [10][11] - Interest expense declined by 45.3% due to reduced average debt balances, contributing to the improved loss from continuing operations [11] Future Outlook - SIFCO did not provide formal quantitative guidance for fiscal 2026 but expressed confidence in demand trends and plans for capital expenditures between $1 million and $2 million to enhance production capabilities [12] Structural Changes - The sale of SIFCO's European operations, specifically the Italian forging and manufacturing business, has been presented as discontinued operations, affecting comparability [13]