Commitments and Contingencies

In the normal course of business, the Company may be involved in ordinary, routine legal actions. The Company cannot reasonably estimate future costs, if any, related to these matters; however, it does not believe any such matters are material to its financial condition or results of operations. The Company maintains various liability insurance coverages to protect its assets from losses arising out of or involving activities associated with ongoing and normal business operations; however, it is possible that the Company’s future operating results could be affected by future costs of litigation.

A subsidiary of the Company, Quality Aluminum Forge, LLC ("Orange"), is currently a defendant in a lawsuit filed by Avco Corporation (“Avco”) in the United States District Court for the District of Rhode Island, alleging that certain forged pistons delivered by the Orange plant failed to meet material specifications required by Avco. No specific amount of damages was claimed by Avco and no discovery has occurred at this time and Orange disagrees with the allegations made by Avco. Although the Company records reserves for legal disputes and other matters in accordance with GAAP, the ultimate outcomes of these types of matters are inherently uncertain. Actual results may differ significantly from current estimates. Given the current status of this matter, the Company has not recorded a reserve as it isn't estimable.

The Company was a defendant in a class action lawsuit filed in the Superior Court of California, County of Orange, arising from employee wage-and-hour claims under California law for alleged meal period, rest break, hourly and overtime wage calculation, timely wage payment and necessary expenditure indemnification violations; and unfair competition. As mentioned previously, the Company records reserves for legal disputes and other matters in accordance with GAAP, the ultimate outcomes of these types of matters are inherently uncertain. Actual results may differ significantly from current estimates. In fiscal 2017, the Company recorded an estimated loss of $385 of which $5 was paid as of September 30, 2017. An additional amount of $11 was incurred in fiscal 2018 and $391 was paid during the second quarter of fiscal 2018.

On September 1, 2016 the Company's Cleveland, Ohio location had an Occupational Safety and Health Administration ("OSHA") inspection at the facility. This inspection resulted in OSHA issuing citations to the location. Since the inspection, SIFCO has abated all issues identified. These findings resulted in penalties having been assessed in the amount of $127 during fiscal 2017, of which $95 was paid during fiscal 2018 and the remaining $32 is expected to be paid in fiscal 2019.

The Company leases certain facilities, machinery and equipment, and office buildings under long-term leases. The leases generally provide renewal options and require the Company to pay for utilities, insurance, taxes and maintenance. The Company recorded rent expense of $2,522 and $1,925 in fiscal 2018 and 2017, respectively. Included are lease payments on the Company's Orange newly built facility for which the lease payments commenced in December 2016 and expire in 2036.

At September 30, 2018, minimum rental commitments under non-cancelable leases are as follows:



Year ending September 30,	Capital Leases			Operating Leases
2019	$	134		$	2,241
2020	87			2,053
2021	86			1,758
2022	35			1,468
2023	12			1,333
Thereafter	—			16,675
Total minimum lease payments	$	354		$	25,528
Plus: Amount representing interest	(27		)
Present value of minimum lease payments	$	327

Amortization of the cost of equipment under capital leases is included in depreciation expense. At September 30, assets recorded under capital leases consist of the following:



	2018			2017
Machinery and equipment	$	638		$	550
Accumulated depreciation	(278		)	(162		)