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Summary of Significant Accounting Policies
 6 Months Ended
Mar. 31, 2014
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
A. Principles of Consolidation
The accompanying unaudited consolidated condensed financial statements include the accounts of SIFCO Industries, Inc. and its wholly-owned subsidiaries (the “Company”). All significant intercompany accounts and transactions have been eliminated.
The U.S. dollar is the functional currency for all of the Company’s U.S. operations and its Irish subsidiary. For these operations, all gains and losses from completed currency transactions are included in income currently. Foreign currency translation adjustments are reported as a component of accumulated other comprehensive loss in the unaudited consolidated condensed financial statements.
These unaudited consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s fiscal 2013 Annual Report on Form 10-K. The results of operations for any interim period are not necessarily indicative of the results to be expected for other interim periods or the full year.
B. Net Income per Share
The Company’s net income per basic share has been computed based on the weighted-average number of common shares outstanding. Net income per diluted share reflects the effect of the Company’s outstanding stock options, restricted shares and performance shares under the treasury stock method. The dilutive effect of the Company’s stock options, restricted shares and performance shares were as follows:
 
Three Months Ended 
 March 31,
 
Six Months Ended 
 March 31,
 
2014
 
2013
 
2014
 
2013
Income from continuing operations
$
1,511

 
$
1,769

 
$
2,665

 
$
2,946

Income (loss) from discontinued operations, net of tax
(85
)
 
(334
)
 
(292
)
 
1,904

Net income
$
1,426

 
$
1,435

 
$
2,373

 
$
4,850


 
 
 
 
 
 
 
Weighted-average common shares outstanding (basic)
5,407

 
5,364

 
5,393

 
5,353

Effect of dilutive securities:
 
 
 
 
 
 
 
Stock options
—

 
1

 
—

 
1

Restricted shares
13

 
9

 
15

 
8

Performance shares
3

 
30

 
7

 
36

Weighted-average common shares outstanding (diluted)
5,423

 
5,404

 
5,415

 
5,398

 
 
 
 
 
 
 
 
Net income per share – basic
 
 
 
 
 
 
 
Continuing operations
$
0.28

 
$
0.33

 
$
0.49

 
$
0.55

Discontinued operations
(0.02
)
 
(0.06
)
 
(0.05
)
 
0.36

Net income
$
0.26

 
$
0.27

 
$
0.44

 
$
0.91

 
 
 
 
 
 
 
 
Net income per share – diluted:
 
 
 
 
 
 
 
Continuing operations
$
0.28

 
$
0.33

 
$
0.49

 
$
0.55

Discontinued operations
(0.02
)
 
(0.06
)
 
(0.05
)
 
0.35

Net income
$
0.26

 
$
0.27

 
$
0.44

 
$
0.90

 
 
 
 
 
 
 
 
Anti-dilutive weighted-average common shares excluded from calculation of diluted earnings per share
24

 
51

 
22

 
78



C. Derivative Financial Instruments
The Company uses an interest rate swap agreement to reduce risk related to variable-rate debt, which is subject to changes in market rates of interest. The interest rate swap is designated as a cash flow hedge. At March 31, 2014 and at September 30, 2013, the Company held one interest rate swap agreement with a notional amount of $5,000 and $6,000, respectively. Cash flows related to the interest rate swap agreement are included in interest expense. The Company’s interest rate swap agreement and its variable-rate term debt are based upon LIBOR. During the first six months of fiscal 2014, the Company’s interest rate swap agreement qualified as a fully effective cash flow hedge against the Company’s variable-rate term note interest risk.
D. Reclassifications
Certain prior period amounts were reclassified to conform to the current consolidated financial statement presentation.