SIFCO Industries, Inc. (NYSE Amex: SIF) today announced
financial results for its fiscal 2012 second quarter, which ended
March 31, 2012.
Second quarter
- Net sales increased 27.1% in the second
quarter of fiscal 2012 to $34.1 million, compared with $26.8
million in the comparable period in fiscal 2011.
- Net income for the second quarter of
fiscal 2012 was $1.7 million, or $0.32 per diluted share, compared
with a net income of $2.0 million, or $0.38 per diluted share for
the comparable fiscal 2011 period.
- EBITDA in the second quarter of fiscal
2012 was $4.4 million, or 13.0% of net sales, compared with $4.4
million, or 16.5% of net sales, in the comparable period in fiscal
2011.
- Adjusted EBITDA in the second quarter
of fiscal 2012 was $5.3 million, or 15.7% of net sales, compared
with $4.9 million, or 18.1% of net sales, in the comparable period
in fiscal 2011.
First six months
- Net sales increased 29.9% in the first
six months of fiscal 2012 to $62.6 million, compared with $48.2
million in the comparable period in fiscal 2011.
- Net income for the first six months of
fiscal 2012 was $2.9 million, or $0.55 per diluted share, compared
with net income of $3.2 million, or $0.60 per diluted share, for
the comparable fiscal 2011 period.
- EBITDA in the first six months of
fiscal 2012 was $7.9 million, or 12.6% of net sales, compared with
$6.9 million, or 14.3% of net sales, in the comparable period in
fiscal 2011.
- Adjusted EBITDA in the first six months
of fiscal 2012 was $9.6 million, or 15.3% of net sales, compared
with $7.7 million, or 15.9% of net sales, in the comparable period
in fiscal 2011.
The results for fiscal 2012 include the results of Quality
Aluminum Forge, which was acquired on October 28, 2011.
Non-GAAP Supplemental Information
Neither EBITDA nor Adjusted EBITDA is a measurement of financial
performance under accounting principles generally accepted in the
United States of America (“GAAP”). EBITDA and Adjusted EBITDA are
presented in this press release as supplemental disclosures to net
income and reported results. References to “EBITDA” mean earnings
before interest, taxes, depreciation and amortization, and
references to “Adjusted EBITDA” mean EBITDA plus, as applicable for
each relevant period, certain adjustments as set forth in the
reconciliations of net income to EBITDA and Adjusted EBITDA.
The Company presents EBITDA and Adjusted EBITDA because (i) it
believes they are useful indicators for evaluating operating
performance and liquidity, including the Company's ability to incur
and service debt and (ii) it uses EBITDA to evaluate prospective
acquisitions. Although the Company uses EBITDA and Adjusted EBITDA
for the reasons noted, the use of these non-GAAP financial measures
as analytical tools has limitations and, therefore, reviewers of
the Company’s financial information should not consider them in
isolation, or as a substitute for analysis of its results of
operations as reported in accordance with GAAP. Some of these
limitations are:
- Neither EBITDA nor Adjusted EBITDA
reflects the interest expense, or the cash requirements necessary
to service interest payments, on indebtedness;
- Although depreciation and amortization
are non-cash charges, the assets being depreciated and amortized
will often have to be replaced in the future, and neither EBITDA
nor Adjusted EBITDA reflects any cash requirements for such
replacements;
- The omission of the substantial
amortization expense associated with the Company’s intangible
assets further limits the usefulness of EBITDA and Adjusted
EBITDA;
- Neither EBITDA nor Adjusted EBITDA
includes the payment of taxes, which is a necessary element of
operations; and
- Adjusted EBITDA excludes the cash
expense the Company has incurred to acquire businesses.
Because of these limitations, EBITDA and Adjusted EBITDA should
not be considered as measures of discretionary cash available to
the Company to invest in the growth of its businesses. Management
compensates for these limitations by not viewing EBITDA or Adjusted
EBITDA in isolation and specifically by using other GAAP measures,
such as net income, net sales and operating profit, to measure
operating performance. Neither EBITDA nor Adjusted EBITDA is a
measurement of financial performance under GAAP, and neither should
be considered as an alternative to net income or cash flow from
operations determined in accordance with GAAP. The Company’s
calculation of EBITDA and Adjusted EBITDA may not be comparable to
the calculation of similarly titled measures reported by other
companies.
Forward-Looking Language
Certain statements contained in this press release are
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, such as statements
relating to financial results and plans for future business
development activities, and are thus prospective. Such
forward-looking statements are subject to risks, uncertainties and
other factors, which could cause actual results to differ
materially from future results expressed or implied by such
forward-looking statements. Potential risks and uncertainties
include, but are not limited to, economic conditions, competition
and other uncertainties detailed from time to time in the Company’s
Securities and Exchange Commission filings.
The Company’s Form 10-Q for the quarter ended March 31, 2012 can
be accessed through its website: www.sifco.com, or on the
Securities and Exchange Commission’s website: www.sec.gov.
SIFCO Industries, Inc. is engaged in the production and sale of
a variety of metalworking processes, services and products produced
primarily to the specific design requirements of its customers. The
processes and services include both conventional and precision
forging, heat-treating, coating, welding, machining and selective
plating. The products include both conventional and precision
forged components, machined forged parts and other machined metal
components, remanufactured component parts for aerospace turbine
engines, and selective plating solutions and equipment. The
Company’s operations are conducted in three business segments: (1)
Forged Components Group, (2) Turbine Components Services and Repair
Group, and (3) Applied Surface Concepts Group.
Second Quarter Ended March 31,
2012
(Amounts in thousands, except per share data)
Consolidated Condensed Statements of
Operations
Second Quarter
Six Months
Ended March
31,
Ended March
31,
2012
2011
2012
2011
Net sales $ 34,079 $ 26,804 $ 62,589 $ 48,200 Cost of goods
sold 26,601 19,878 48,646 36,299 Selling, general and
administrative expenses 4,104 3,318 8,073 6,494 Amortization of
intangible assets 662 685 1,477
742 Operating income 2,712 2,923 4,393 4,665
Interest expense, net 131 33 218 31 Foreign currency exchange loss
(gain), net 3 5 (19 ) 9 Other income, net (118 ) (117
) (235 ) (234 ) Income before income tax provision
2,696 3,002 4,429 4,859 Income tax provision 972
1,007 1,519 1,658
Net income $ 1,724
$
1,995 $ 2,910 $ 3,201 Net income per
share: Basic $ 0.32 $ 0.38 $ 0.55 $ 0.61 Diluted $ 0.32 $ 0.38 $
0.55 $ 0.60 Weighted average number of common shares (basic)
5,315 5,267 5,303 5,263 Weighted average number of common shares
(diluted) 5,336 5,313 5,326 5,302
Supplemental Information –
Reconciliation of EBITDA and Adjusted EBITDA
Second Quarter
Six Months
Ended March
31,
Ended March
31,
2012
2011
2012
2011
Net income $ 1,724 $ 1,995 $ 2,910 $ 3,201 Adjustments:
Depreciation and amortization expense 1,595 1,385 3,255 2,005
Interest expense, net 131 33 218 31 Income tax provision 972
1,007 1,519 1,658
EBITDA 4,422 4,420 7,902 6,895 Adjustments: Inventory purchase
accounting adjustments (1) 216 110 441 202 Acquisition
transaction-related expenses (2) 105 25 229 173 Equity compensation
expense (3) 329 123 567 177 LIFO provision (4) 269
183 428 225 Adjusted
EBITDA
$
5,341 $ 4,861 $ 9,567 $ 7,672
(1) Represents accounting adjustments to inventory
associated with acquisitions of businesses that were charged to
cost of sales when the inventory was sold. (2) Represents
transaction-related costs comprising legal, financial and tax due
diligence expenses; and valuation services costs that are required
to be expensed as incurred. (3) Represents the equity based
compensation expense recognized by the Company under its 2007
Long-term Incentive Plan. (4) Represents the increase in the
reserve for inventories for which cost is determined using the last
in, first out (“LIFO”) method.
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