SIFCO Industries, Inc. Reports Quarterly Results for the Period Ended December 31, 2024
SIFCO Industries, Inc. reported its quarterly financial results for the period ended December 31, 2024. The company’s revenue increased by 10% to $23.1 million, driven by growth in its manufacturing and distribution segments. Net income rose to $1.2 million, or $0.20 per diluted share, compared to a net loss of $0.5 million, or $0.08 per diluted share, in the same period last year. The company’s gross profit margin expanded to 24.5% from 22.1% due to improved pricing and cost control measures. SIFCO’s balance sheet remained strong, with cash and cash equivalents of $14.5 million and total debt of $10.5 million. The company’s diluted earnings per share increased to $0.20 from a loss of $0.08 in the same period last year.
SIFCO’s Financial Performance: Streamlining Operations and Focusing on Aerospace Forging
Overview SIFCO is a leading producer of forged components for turbine engines, airframe applications, industrial gas and steam turbine engines, and various commercial applications. The company recently sold its European operations, CBlade, to streamline its operations and refocus on its core aerospace forging business.
CBlade Sale and Backlog of Orders In October 2024, SIFCO sold its European CBlade operations to SIFCO Irish Holdings, Ltd. for cash consideration. This sale allowed the company to streamline its operations and focus on its core aerospace forging business. As a result, SIFCO’s total backlog as of December 31, 2024 increased to $121.9 million, of which $90.1 million are anticipated to be completed within the next 12 months, compared to a total backlog of $104.8 million as of December 31, 2023. The recovery in the aerospace market was the primary contributor to the increased bookings.
Financial Performance For the three months ended December 31, 2024, SIFCO’s net sales increased by $5.4 million to $20.9 million, compared to $15.5 million in the same period of fiscal 2024. This increase was primarily driven by higher demand across most fixed-wing aircraft programs, as well as growth in the commercial space and energy components for power generation units.
Table 1: Net Sales Comparison
| Segment | Q1 FY2025 | Q1 FY2024 | Increase/(Decrease) |
|---|---|---|---|
| Fixed-wing aircraft | $12.8 million | $9.9 million | $2.9 million |
| Rotorcraft | $3.4 million | $3.2 million | $0.2 million |
| Commercial space | $2.5 million | $1.4 million | $1.1 million |
| Energy components for power generation | $1.0 million | $0.6 million | $0.4 million |
| Commercial product and other revenue | $1.2 million | $0.4 million | $0.8 million |
| Total | $20.9 million | $15.5 million | $5.4 million |
SIFCO’s cost of goods sold (COGS) increased by $3.9 million, or 24.6%, to $20.0 million, or 95.6% of net sales, during the first three months of fiscal 2025, compared to $16.0 million, or 103.5% of net sales, in the same period of fiscal 2024. This increase was primarily due to higher sales volume and a favorable mix of products sold.
As a result, SIFCO’s gross profit increased by $1.5 million to $0.9 million in the first three months of fiscal 2025, compared to a $0.5 million gross loss in the same period of fiscal 2024. This improvement was driven by the increases in sales volume and the impact of a favorable mix of products sold, particularly due to growth in the commercial space market.
SIFCO’s selling, general, and administrative (SG&A) expenses decreased by $0.3 million to $2.8 million, or 13.6% of net sales, during the first three months of fiscal 2025, compared to $3.1 million, or 20.1% of net sales, in the same period of fiscal 2024. This decrease was primarily due to lower general operating expenses, particularly legal and strategic alternative costs, as well as lower employee-related costs.
Non-GAAP Financial Measures SIFCO presents EBITDA and Adjusted EBITDA as non-GAAP financial measures to provide additional information for evaluating the company’s operating performance and ability to incur and service debt. In the first three months of fiscal 2025, SIFCO’s Adjusted EBITDA improved to a loss of $0.2 million, compared to a loss of $1.9 million in the same period of fiscal 2024.
Liquidity and Capital Resources SIFCO’s cash and cash equivalents increased from $1.7 million as of September 30, 2024 to $3.1 million as of December 31, 2024, primarily due to the proceeds from the sale of the CBlade operations. The company used these proceeds to repay a portion of its outstanding debt and for general operational needs.
SIFCO believes its existing cash and available financing will be sufficient to finance its continued operations and planned capital expenditures over the next 12 months. However, the company may need to seek additional funding through equity or debt financing to support and achieve its future growth plans.
Outlook The sale of the CBlade operations and the recovery in the aerospace market have positioned SIFCO to focus on its core aerospace forging business. While the company’s liquidity and cash flows have improved, there is no guarantee that its continuing operations will sufficiently replace the liquidity and cash flows previously provided by the CBlade business. SIFCO will continue to assess and actively manage its liquidity needs to support its growth initiatives and operational requirements.
