SIFCO Industries, Inc. (NYSE American: SIF) today announced
financial results for its first quarter of fiscal 2021, which ended
December 31, 2020.
First Quarter Results
- Net sales in the first quarter of fiscal 2021 decreased 4.3% to
$25.1 million, compared with $26.2 million for the same period in
fiscal 2020.
- Net income for the first quarter of fiscal 2021 was $3.0
million, or $0.51 per diluted share, compared with net loss of $1.3
million, or $(0.24) per diluted share, in the first quarter of
fiscal 2020.
- EBITDA was $4.1 million in the first quarter of fiscal 2021,
compared with $0.7 million in the first quarter of fiscal
2020.
- Adjusted EBITDA in the first quarter of fiscal 2021 was $1.9
million, compared with Adjusted EBITDA of $0.7 million in the first
quarter of fiscal 2020.
Other Highlights
CEO Peter W. Knapper stated, "Our focus on supporting our
customers as we all navigate this difficult environment together
continued to yield positive results for us. We will maintain this
approach as we aggressively manage costs, liquidity, and execution
in light of the uncertainty created by the continuing COVID-19
outbreak and its impact on the markets we serve.
"Our Orange facility is nearing full operation and we reached
final settlement with our insurance carrier. Additionally, because
of the anticipation of reduced sales of commercial aerospace
product and our approach in managing costs, we furloughed certain
employees in the first quarter of fiscal 2021. Those employees
returned to work in January. We are all very pleased to close this
difficult chapter for that site and we are excited about the
prospects of utilizing the restored site as we move forward."
Use of Non-GAAP Financial Measures
The Company uses certain non-GAAP measures in this release.
EBITDA and Adjusted EBITDA are non-GAAP financial measures and are
intended to serve as supplements to results provided in accordance
with accounting principles generally accepted in the United States.
SIFCO Industries, Inc. believes that such information provides an
additional measurement and consistent historical comparison of the
Company’s performance. A reconciliation of the non-GAAP financial
measures to the most directly comparable GAAP measures is available
in this news release.
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, concerns with
or threats of, or the consequences of, pandemics, contagious
diseases or health epidemics, including COVID-19, competition and
other uncertainties the Company, its customers, and the industry in
which they operate have experienced and continue to experience,
detailed from time to time in the Company’s Securities and Exchange
Commission filings.
The Company's Annual Report on Form 10-K for the year ended
September 30, 2020 and other reports filed with the Securities
& Exchange Commission can be accessed through the Company's
website: www.sifco.com, or on the
Securities and Exchange Commission's website: www.sec.gov.
SIFCO Industries, Inc. is engaged in the production of forgings
and machined components primarily for the aerospace and energy
markets. The processes and services include forging, heat-treating,
coating, and machining.
First Quarter ended December
31,
(Amounts in thousands, except per share
data)
(Unaudited
Three Months Ended
December 31,
2020
2019
Net sales
$
25,078
$
26,207
Cost of goods sold
21,155
22,883
Gross profit
3,923
3,324
Selling, general and administrative
expenses
3,827
4,208
Amortization of intangible assets
269
409
Gain on insurance recoveries
(2,495
)
—
Operating income (loss)
2,322
(1,293
)
Interest expense
165
251
Foreign currency exchange loss, net
7
1
Other loss (income), net
62
(108
)
Income (loss) before income tax
benefit
2,088
(1,437
)
Income tax benefit
(905
)
(95
)
Net income (loss)
$
2,993
$
(1,342
)
Net income (loss) per share
Basic
$
0.53
$
(0.24
)
Diluted
$
0.51
$
(0.24
)
Weighted-average number of common shares
(basic)
5,691
5,612
Weighted-average number of common shares
(diluted)
5,890
5,612
Non-GAAP Financial Measures
Presented below is certain financial information based on the
Company's EBITDA and Adjusted EBITDA. References to “EBITDA” mean
earnings (losses) from continuing operations 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.
Neither EBITDA nor Adjusted EBITDA is a measurement of financial
performance under generally accepted accounting principles in the
United States of America (“GAAP”). The Company presents EBITDA and
Adjusted EBITDA because management believes that they are useful
indicators for evaluating operating performance and liquidity,
including the Company’s ability to incur and service debt and it
uses EBITDA to evaluate prospective acquisitions. Although the
Company uses EBITDA and Adjusted EBITDA for the reasons noted
above, the use of these non-GAAP financial measures as analytical
tools has limitations. Therefore, reviewers of the Company’s
financial information should not consider them in isolation, or as
a substitute for analysis of the Company's results of operations as
reported in accordance with GAAP. Some of these limitations
include:
- 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; and
- Neither EBITDA nor Adjusted EBITDA includes the payment of
taxes, which is a necessary element of operations.
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 (loss), net sales, and operating income (loss),
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 loss 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.
The following table sets forth a reconciliation of net loss to
EBITDA and Adjusted EBITDA:
Dollars in thousands
Three Months Ended
December 31,
2020
2019
Net income (loss)
$
2,993
$
(1,342
)
Adjustments:
Depreciation and amortization expense
1,825
1,856
Interest expense, net
165
251
Income tax benefit
(905
)
(95
)
EBITDA
4,078
670
Adjustments:
Foreign currency exchange loss, net
(1)
7
1
Other income, net (2)
62
(108
)
Gain on insurance recoveries (3)
(2,495
)
—
Equity compensation (4)
143
155
LIFO impact (5)
128
22
Adjusted EBITDA
$
1,923
$
740
(1)
Represents the gain or loss from
changes in the exchange rates between the functional currency and
the foreign currency in which the transaction is denominated.
(2)
Represents miscellaneous
non-operating income or expense, such as pension costs or grant
income.
(3)
Represents the difference between
the insurance proceeds received for the damaged property and the
carrying values shown on the Company's books for the assets that
were damaged in the fire at the Orange location.
(4)
Represents the equity-based
compensation expense recognized by the Company under the 2016 Plan
due to granting of awards, awards not vesting and/or
forfeitures.
(5)
Represents the change in the
reserve for inventories for which cost is determined using the
last-in, first-out (“LIFO”) method.
Reference to the above activities can found in the consolidated
financial statements included in Item 8 of the Company's Annual
Report on Form 10-K.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210205005469/en/
SIFCO Industries, Inc. Thomas R. Kubera, 216-881-8600
www.sifco.com
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