10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission file number 1-5978

SIFCO Industries, Inc.

(Exact name of registrant as specified in its charter) 

Ohio	34-0553950
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
970 East 64th Street, Cleveland Ohio	44103
(Address of principal executive offices)	(Zip Code)

(216) 881-8600

(Registrant’s telephone number, including area code) 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer”, “non-accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐    

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares	SIF	NYSE American

The number of the Registrant’s Common Shares, par value $1.00, outstanding at March 31, 2021 was 5,989,129.

Part I. Financial Information

Item 1. Financial Statements

SIFCO Industries, Inc. and Subsidiaries

Consolidated Condensed Statements of Operations

(Unaudited)

(Amounts in thousands, except per share data)

	Three Months Ended March 31,				Six Months Ended March 31,
	2021		2020		2021		2020
Net sales	$	24,866	$	30,537	$	49,944	$	56,744
Cost of goods sold	22,123		24,260		43,278		47,143
Gross profit	2,743		6,277		6,666		9,601
Selling, general and administrative expenses	3,596		3,321		7,423		7,529
Amortization of intangible assets	248		408		517		817
Loss on disposal of operating assets	—		41		—		41
Gain on insurance recoveries	—		(1,000)		(2,495)		(1,000)
Operating income (loss)	(1,101)		3,507		1,221		2,214
Interest expense	169		262		335		513
Foreign currency exchange loss (income), net	14		(1)		21		—
Other loss (income), net	42		25		103		(84)
Income (loss) before income tax expense (benefit)	(1,326)		3,221		762		1,785
Income tax expense (benefit)	165		(39)		(740)		(134)
Net income (loss)	$	(1,491)	$	3,260	$	1,502	$	1,919
Net income (loss) per share
Basic	$	(0.26)	$	0.57	$	0.26	$	0.34
Diluted	$	(0.26)	$	0.57	$	0.25	$	0.33
Weighted-average number of common shares (basic)	5,777		5,679		5,735		5,645
Weighted-average number of common shares (diluted)	5,777		5,770		5,932		5,748

See notes to unaudited consolidated condensed financial statements.

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SIFCO Industries, Inc. and Subsidiaries

Consolidated Condensed Statements of Comprehensive Income (Loss)

(Unaudited)

(Amounts in thousands)

	Three Months Ended March 31,				Six Months Ended March 31,
	2021		2020		2021		2020
Net income (loss)	$	(1,491)	$	3,260	$	1,502	$	1,919
Other comprehensive income:
Foreign currency translation adjustment, net of tax $0 and $0 for the three months ended and net of tax $0 and $0 for the six months ended, respectively	(303)		(130)		(17)		63
Retirement plan liability adjustment, net of tax $0 and $0 for the three months end and net of tax $0 and $0 for the six month ended, respectively	211		249		423		437
Comprehensive income (loss)	$	(1,583)	$	3,379	$	1,908	$	2,419

See notes to unaudited consolidated condensed financial statements.

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SIFCO Industries, Inc. and Subsidiaries

Consolidated Condensed Balance Sheets

(Amounts in thousands, except per share data)

	March 31, 2021		September 30, 2020
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	311	$	427
Receivables, net of allowance for doubtful accounts of $251 and $249, respectively	19,068		23,225
Other receivables	—		1,547
Contract assets	13,565		11,997
Inventories, net	15,568		15,569
Refundable income taxes	103		103
Prepaid expenses and other current assets	1,959		2,338
Total current assets	50,574		55,206
Property, plant and equipment, net	44,448		44,201
Operating lease right-of-use assets, net	16,405		17,021
Intangible assets, net	1,377		1,890
Goodwill	3,493		3,493
Other assets	89		137
Total assets	$	116,386	$	121,948
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	9,783	$	7,144
Revolver	7,742		12,870
Short-term operating lease liabilities	796		991
Accounts payable	14,495		14,002
Accrued liabilities	6,368		8,290
Total current liabilities	39,184		43,297
Long-term debt, net of current maturities	2,542		4,606
Long-term operating lease liabilities, net of short-term	15,825		16,188
Deferred income taxes	616		1,400
Pension liability	9,764		10,165
Other long-term liabilities	747		769
Shareholders’ equity:
Serial preferred shares, no par value, authorized 1,000 shares	—		—
Common shares, par value $1 per share, authorized 10,000 shares; issued and outstanding shares 5,989 at March 31, 2021 and 5,916 at September 30, 2020	5,989		5,916
Additional paid-in capital	10,940		10,736
Retained earnings	43,841		42,339
Accumulated other comprehensive loss	(13,062)		(13,468)
Total shareholders’ equity	47,708		45,523
Total liabilities and shareholders’ equity	$	116,386	$	121,948

See notes to unaudited consolidated condensed financial statements.

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SIFCO Industries, Inc. and Subsidiaries

Consolidated Condensed Statements of Cash Flows

(Unaudited, Amounts in thousands)

	Six Months Ended March 31,
	2021		2020
Cash flows from operating activities:
Net income	$	1,502	$	1,919
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Depreciation and amortization	3,730		3,731
Amortization of debt issuance costs	52		52
Loss on disposal of operating assets	—		41
Gain on insurance proceeds received	(2,495)		(1,000)
LIFO effect	335		(11)
Share transactions under company stock plan	277		217
Other long-term liabilities	(2)		(90)
Deferred income taxes	(830)		(135)
Changes in operating assets and liabilities:
Receivables	4,149		1,533
Contract assets	(1,569)		(2,171)
Inventories	(301)		(2,858)
Refundable income taxes	—		10
Prepaid expenses and other current assets	40		(434)
Other assets	47		42
Accounts payable	2,749		(3,296)
Other accrued liabilities	(2,077)		2,050
Accrued income and other taxes	182		(14)
Net cash provided by (used for) operating activities	5,789		(414)
Cash flows from investing activities:
Insurance proceeds received	4,101		4,500
Capital expenditures	(5,416)		(4,596)
Net cash used for investing activities	(1,315)		(96)
Cash flows from financing activities:
Proceeds from long-term debt	—		137
Payments on long-term debt	(264)		(568)
Proceeds from revolving credit agreement	44,666		59,372
Repayments of revolving credit agreement	(49,794)		(57,723)
Payment of debt issuance costs	(45)		—
Short-term debt borrowings	2,471		1,542
Short-term debt repayments	(1,631)		(2,257)
Net cash provided by (used for) financing activities	(4,597)		503
Decrease in cash and cash equivalents	(123)		(7)
Cash and cash equivalents at the beginning of the period	427		341
Effect of exchange rate changes on cash and cash equivalents	7		11
Cash and cash equivalents at the end of the period	$	311	$	345
Supplemental disclosure of cash flow information of operations:
Cash paid for interest	$	(203)	$	(419)
Cash paid for income taxes, net	$	(22)	$	(34)

See notes to unaudited consolidated condensed financial statements.

5

SIFCO Industries, Inc. and Subsidiaries

Consolidated Condensed Statements of Shareholders’ Equity

(Unaudited, Amounts in thousands)  

	Six Months Ended March 31, 2021
	Common			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders’ Equity
	Shares	Amount
Balance - September 30, 2020	5,916	$	5,916	$	10,736	$	42,339	$	(13,468)	$	45,523
Comprehensive income	—	—		—		1,502		406		1,908
Performance and restricted share expense	—	—		293		—		—		293
Share transactions under equity based plans	73	73		(89)		—		—		(16)
Balance - March 31, 2021	5,989	$	5,989	$	10,940	$	43,841	$	(13,062)	$	47,708

	Three Months Ended  March 31, 2021
	Common			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders’ Equity
	Shares	Amount
Balance - December 31, 2020	5,959	$	5,959	$	10,820	$	45,332	$	(12,970)	$	49,141
Comprehensive loss	—	—		—		(1,491)		(92)		(1,583)
Performance and restricted share expense	—	—		150		—		—		150
Share transactions under equity based plans	30	30		(30)		—		—		—
Balance - March 31, 2021	5,989	$	5,989	$	10,940	$	43,841	$	(13,062)	$	47,708

	Six Months Ended March 31, 2020
	Common			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders’ Equity
	Shares	Amount
Balance - September 30, 2019	5,777	$	5,777	$	10,438	$	33,148	$	(13,309)	$	36,054
Comprehensive income	—	—		—		1,919		500		2,419
Performance and restricted share expense	—	—		225		—		—		225
Share transactions under equity based plans	139	139		(147)		—		—		(8)
Balance - March 31, 2020	5,916	$	5,916	$	10,516	$	35,067	$	(12,809)	$	38,690

	Three Months Ended  March 31, 2020
	Common			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders’ Equity
	Shares	Amount
Balance - December 31, 2019	5,863	$	5,863	$	10,503	$	31,807	$	(12,928)	$	35,245
Comprehensive loss	—	—		—		3,260		119		3,379
Performance and restricted share expense	—	—		70		—		—		70
Share transactions under equity based plans	53	53		(57)		—		—		(4)
Balance - March 31, 2020	5,916	$	5,916	$	10,516	$	35,067	$	(12,809)	$	38,690

See notes to unaudited consolidated condensed financial statements.

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SIFCO Industries, Inc. and Subsidiaries

Notes to Unaudited Consolidated Condensed Financial Statements

(Amounts in thousands, except per share data)

1.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 in consolidation.

The U.S. dollar is the functional currency for all of the Company’s U.S. operations and its non-operating subsidiaries. For these operations, all gains and losses from completed currency transactions are included in income. The functional currency for the Company's other non-U.S. subsidiaries is the Euro. Assets and liabilities are translated into U.S. dollars at the rates of exchange at the end of the period, and revenues and expenses are translated using average rates of exchange for the period. 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 2020 Annual Report on Form 10-K. The year-end consolidated balance sheet data was derived from the audited financial statements and disclosures required by accounting principles generally accepted in the United States ("U.S."). 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. Accounting Policies

A summary of the Company’s significant accounting policies is included in Note 1 to the audited consolidated financial statements of the Company's fiscal 2020 Annual Report on Form 10-K.

C. Net Income/(Loss) per Share

The Company’s net income and loss 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 restricted shares and performance shares under the treasury method. In the three months ended March 31, 2021, due to the net loss, zero restricted shares are included in the calculation of diluted earnings per share because the effect would be anti-dilutive. The dilutive effect is as follows:

	Three Months Ended March 31,				Six Months Ended March 31,
	2021		2020		2021		2020
Net Income (loss)	$	(1,491)	$	3,260	$	1,502	$	1,919
Weighted-average common shares outstanding (basic and diluted)	5,777		5,679		5,735		5,645
Effect of dilutive securities:
Restricted shares	—		89		144		102
Performance shares	—		2		53		1
Weighted-average common shares outstanding (basic and diluted)	5,777		5,770		5,932		5,748
Net income (loss) per share – basic:	$	(0.26)	$	0.57	$	0.26	$	0.34
Net income (loss) per share – diluted:	$	(0.26)	$	0.57	$	0.25	$	0.33
Anti-dilutive weighted-average common shares excluded from calculation of diluted earnings per share	411		215		217		147

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D. Impact of Recently Issued Accounting Standards

In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" and subsequent updates. ASU 2016-13 changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The new guidance will replace the current incurred loss approach with an expected loss model. The new expected credit loss impairment model will apply to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt instruments, net investments in leases, loan commitments and standby letters of credit. Upon initial recognition of the exposure, the expected credit loss model requires entities to estimate the credit losses expected over the life of an exposure (or pool of exposures). The estimate of expected credit losses should consider historical information, current information and reasonable and supportable forecasts, including estimates of prepayments. Financial instruments with similar risk characteristics should be grouped together when estimating expected credit losses. ASU 2016-13 does not prescribe a specific method to make the estimate, so its application will require significant judgment. ASU 2016-13 is effective for public companies in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. However, in November 2019, the FASB issued ASU 2019-10, "Financial Instruments - Credit Loss (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842)," which defers the effective date for public filers that are considered smaller reporting companies ("SRC"), as defined by the Securities and Exchange Commission, to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Because SIFCO is considered a SRC, the Company does not need to implement ASU 2016-13 until October 1, 2023. The Company will continue to evaluate the effect of adopting ASU 2016-13 will have on the Company's results within the consolidated condensed statements of operations and financial condition.

In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes" was issued to (i) reduce the complexity of the standard by removing certain exceptions to the general principles in Topic 740 and (ii) improve consistency and simplify other areas of Topic 740 by clarifying and amending existing guidance. This ASU is effective beginning October 1, 2021. The Company continues to evaluate the effect adopting this ASU will have on the Company's results within the consolidated condensed statements of operations and financial condition.

In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting," which is intended to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. This ASU, along with recently issued ASU 2021-01, which further clarifies the scope of Topic 848, is available immediately and may be implemented in any period prior to the guidance expiration on December 31, 2022. The Company is currently evaluating these standards to determine whether it will apply the optional expedients and exceptions.

2.Inventories

Inventories consist of:

	March 31, 2021		September 30, 2020
Raw materials and supplies	$	6,379	$	6,548
Work-in-process	3,564		3,786
Finished goods	5,625		5,235
Total inventories	$	15,568	$	15,569

For a portion of the Company's inventory, cost is determined using the last-in, first-out ("LIFO") method. Approximately 49% and 47% of the Company’s inventories at March 31, 2021 and September 30, 2020, respectively, use the LIFO method. An actual valuation of inventory under the LIFO method is made at the end of each fiscal year based on the inventory levels and costs existing at that time. Accordingly, interim LIFO calculations must be based on management’s estimates of expected year-end inventory levels and costs. Because the actual results may vary from these estimates, calculations are subject to many factors beyond management’s control, and annual results may differ from interim results as they are subject to adjustments based on the differences between the estimates and the actual results. The first-in, first-out (“FIFO”) method is used for the remainder of the inventories, which are stated at the lower of cost or net realizable value. If the FIFO method had been used for the inventories for which cost is determined using the LIFO method, inventories would have been $8,621 and $8,286 higher than reported at March 31, 2021 and September 30, 2020, respectively.

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3.    Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss are as follows:

	March 31, 2021		September 30, 2020
Foreign currency translation adjustment	$	(5,274)	$	(5,257)
Retirement plan liability adjustment, net of tax	(7,788)		(8,211)
Total accumulated other comprehensive loss	$	(13,062)	$	(13,468)

4.    Leases

The components of lease expense were as follows:

	Three Months Ended March 31,				Six Months Ended March 31,
	2021		2020		2021		2020
Finance lease expense:
Amortization of right-of use assets on finance leases	$	13	$	14	$	27	$	27
Interest on lease liabilities	1		1		2		3
Operating lease expense:	540		543		1,092		1,079
Variable lease cost:	35		39		69		79
Total lease expense	$	589	$	597	$	1,190	$	1,188

The following table presents the impact of leasing on the consolidated condensed balance sheet.

	Classification in the consolidated condensed balance sheets	March 31, 2021		September 30, 2020
Assets:
Finance lease assets	Property, plant and equipment, net	$	62	$	89
Operating lease assets	Operating lease right-of-use assets, net	16,405		17,021
Total lease assets		$	16,467	$	17,110
Current liabilities:
Finance lease liabilities	Current maturities of long-term debt	$	41	$	58
Operating lease liabilities	Short-term operating lease liabilities	796		991
Non-current liabilities:
Finance lease liabilities	Long-term debt, net of current maturities	10		22
Operating lease liabilities	Long-term operating lease liabilities, net of short-term	15,825		16,188
Total lease liabilities		$	16,672	$	17,259

Supplemental cash flow and other information related to leases were as follows:

	March 31, 2021		March 31, 2020
Other Information
Cash paid for amounts included in measurement of liabilities:
Operating cash flows from operating leases	$	1,097	$	1,086
Operating cash flows from finance leases	2		3
Financing cash flows from finance leases	29		28
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	43		278

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	March 31, 2021		September 30, 2020
Weighted-average remaining lease term (years):
Finance leases	1.2		1.6
Operating leases	14.8		15.2
Weighted-average discount rate:
Finance leases	4.4	%	4.8	%
Operating leases	5.9	%	5.9	%

Future minimum lease under non-cancellable leases at March 31, 2021 were as follows:

	Finance Leases		Operating Leases
Year ending September 30,
2021 (excluding the six months ended March 31, 2021)	$	27	$	852
2022	21		1,696
2023	4		1,633
2024	—		1,647
2025	—		1,644
Thereafter	—		17,532
Total lease payments	$	52	$	25,004
Less: Imputed interest	(1)		(8,383)
Present value of lease liabilities	$	51	$	16,621

5.    Debt

Debt consists of: 

	March 31, 2021		September 30, 2020
Revolving credit agreement	$	7,742	$	12,870
Foreign subsidiary borrowings	6,623		5,759
Finance lease obligations	51		80
Other, net of unamortized debt issuance costs $(37) and $(20), respectively	5,651		5,911
Total debt	20,067		24,620
Less – current maturities	(17,525)		(20,014)
Total long-term debt	$	2,542	$	4,606

Credit Agreement and Security Agreement

The Company's asset-based Credit Agreement (as amended, the "Credit Agreement"), Security Agreement (“Security Agreement”) and Export Credit Agreement (as amended, the "Export Credit Agreement") are secured by substantially all the assets of the Company and its U.S. subsidiaries and a pledge of 66.67% of the stock of its first-tier non-U.S. subsidiaries. The Credit Agreement (as amended by Fifth Amendment (the "Fifth Amendment") described below), consists of a senior secured revolving credit facility with a maximum borrowing of $28,000. The revolving commitment through the Export Credit Agreement, as amended, which lends amounts to the Company on foreign receivables is $7,000. The Credit Agreement also has an accordion feature, which allows the Company to increase maximum borrowings by up to $10,000 upon consent of the Lender (as defined below) or upon additional lenders joining the Credit Agreement. The Credit Agreement and the Export Agreement were amended on February 19, 2021, when the Company and certain of its subsidiaries (collectively, the "borrowers") entered into the Fifth Amendment to the Credit Agreement and the First Amendment (the "First Amendment") to the Export Credit Agreement, in each case, with JPMorgan Chase Bank, N.A., a national banking association, (the "Lender"). The combined maximum borrowings remain unchanged at $35,000; however the maximum borrowing under the Credit Agreement was decreased to $28,000 (from $30,000) and the revolving commitment through the Export Agreement was

10

increased to $7,000 (from $5,000). The Fifth Amendment, among other things, extends the maturity date from August 6, 2021 to February 19, 2024.

The Credit Agreement contains affirmative and negative covenants and events of defaults. Prior to the Fifth Amendment, the Credit Agreement required the Company to maintain a fixed charge coverage ratio ("FCCR") of 1.1:1.0 any time the availability is equal to or less than 12.5% of the revolving commitment. However, the Fifth Amendment provides that the Company will not permit the fixed charge coverage ratio to be less than 1.1 to 1.0 as of the last day of any calendar month; provided that the fixed charge coverage ratio will not be tested unless (i) a default has occurred and is continuing, (ii) when the combined availability was less than or equal to the greater of (x) 10% of the lesser of the combined commitments or (y) 10% of the combined borrowing base, and $2,000, for three or more business days in any consecutive 30 day period. In the event of a default, the Company may not be able to access the revolver, which could impact the ability to fund working capital needs, capital expenditures and invest in new business opportunities. The total collateral at March 31, 2021 and September 30, 2020 was $26,619 and $26,964, respectively and the revolving commitment was $35,000 for both periods. Total availability at March 31, 2021 and September 30, 2020 was $18,067 and $13,284, respectively, which exceed both the collateral and total commitment threshold. Since the availability was greater than the 10.0% of the revolving commitment as of March 31, 2021 and 12.5% of the revolving commitment at September 30, 2020, the FCCR calculation was not required.

Borrowings will bear interest at the Lender's established domestic rate or LIBOR, plus the applicable margin as set forth in the Fifth Amendment. The revolver has a rate based on LIBOR plus 1.75% spread, which was 1.87% at March 31, 2021 and a rate based on LIBOR plus 1.5% spread, which was 1.7% September 30, 2020. The Export Credit Agreement has a rate based on LIBOR plus 1.25% spread, which was 1.4% at March 31, 2021 and a rate based on LIBOR plus 1.0% spread, which was 1.2% at September 30, 2020, respectively. The Company also has a commitment fee of 0.25% under the Credit Agreement as amended to be incurred on the unused balance of the revolver.

Foreign subsidiary borrowings

Foreign debt consists of:

	March 31, 2021		September 30, 2020
Term loan	$	2,661	$	2,670
Short-term borrowings	2,147		2,620
Factor	1,815		469
Total debt	$	6,623	$	5,759
Less – current maturities	(4,743)		(3,544)
Total long-term debt	$	1,880	$	2,215
Receivables pledged as collateral	$	2,343	$	1,859

Interest rates on foreign borrowings are based on Euribor rates which range from 1.0% to 4.2%.

The Company factors receivables from one of its customers. The Company accounts for the pledge of receivables under this agreement as short-term debt and continues to carry the receivables on its consolidated condensed balance sheets.

Debt issuance costs

The Company incurred debt issuance costs as it pertains to the Fifth Amendment in the amount of $45 and combined the amount with the remaining unamortized debt issuance costs prior to the amendment for a total of $86, which is included in the consolidated condensed balance sheets as a deferred charge in other current assets, net of amortization of $2 and $205 at March 31, 2021 and September 30, 2020, respectively.

Other

On April 10, 2020, the Company entered into an unsecured promissory note under the Paycheck Protection Program (the “PPP Loan”). The PPP Loan to the Company was made through JPMorgan Chase Bank, N.A., a national banking association and the Company’s existing lender. The note has an aggregate principal amount of approximately $5,025, of which $261 was repaid in fiscal 2020 and has a two year term. The interest rate on the PPP Loan is 0.98%, which was deferred for the first six months of the term of the loan. The promissory note evidencing the PPP Loan contains customary events of default. The occurrence of an event of default may result in the repayment of all amounts outstanding, collection of all amounts owed from the Company,

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and/or filing suit and obtaining judgment against the Company. The loan proceeds were received on April 10, 2020 and were used for payroll payments. As of March 31, 2021 and September 30, 2020, the PPP loan balance was $4,764.

PPP Loan recipients can apply for and potentially be granted forgiveness for all or a portion of loans granted under the Paycheck Protection Program. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for payroll costs. As of March 31, 2021, based on guidance from the U.S. Department of Treasury, the Company is in the process of applying for forgiveness for the PPP Loan. However, no assurance is provided that the Company will obtain forgiveness of the PPP Loan in whole or in part.

6. Income Taxes

On December 27, 2020, the Consolidated Appropriations Act, 2021 (the "Appropriations Act") was enacted in response to the COVID-19 pandemic. The Appropriations Act, among other actions temporarily extends through December 31, 2025 certain expiring tax credit and other provisions. Additionally, the Appropriations Act enacts new provisions and extends certain provisions originated within the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act"), enacted on March 27, 2020. The CARES Act included provisions relating to refundable payroll tax credits, deferral of certain payment requirements for the employer portion of Social Security taxes, net operating loss carryback periods and temporarily increasing the amount of net operating losses that corporations can use to offset income, alternative minimum tax ("AMT") credit refunds, modifications to the net interest deduction limitations, and technical corrections to tax depreciation methods for qualified improvement property. The Appropriations Act and CARES Act did not materially affect the Company’s income tax provision, deferred tax assets and liabilities, or related taxes payable through the second quarter of fiscal 2021. The Company will continue to assess the implications of these and any new relief provisions on its consolidated condensed financial statements but does not expect the impact to be material.

For each interim reporting period, the Company makes an estimate of the effective tax rate it expects to be applicable for the full fiscal year for its operations. This estimated effective rate is used in providing for income taxes on a year-to-date basis. The Company’s effective tax rate through the first six months of fiscal 2021 was (97)%, compared with (8)% for the same period of fiscal 2020. The decrease in the effective rate was primarily attributable to tax benefits from adjusting deferred taxes recorded in Italy recognized on a discrete basis, partially offset by changes in jurisdictional mix of income in fiscal 2021 compared to the same period of fiscal 2020. The effective tax rate differs from the U.S. federal statutory rate due primarily to the valuation allowance against the Company’s U.S. deferred tax assets and income in foreign jurisdictions that are taxed at different rates than the U.S. statutory tax rate. Recent positive evidence related to the potential or partial release of the Company's valuation allowance includes profitable U.S. results, however, there continues to be uncertainty as a result of the ongoing COVID-19 pandemic. As such, the Company has maintained a full valuation allowance on its U.S. net deferred tax assets in the second quarter of fiscal 2021. It is reasonably possible that sufficient positive evidence required to release all, or a portion of the valuation allowance in the U.S. will exist within the next 12 months.

The Company is subject to income taxes in the U.S. federal jurisdiction, Ireland, Italy, and various state and local jurisdictions.

7.Retirement Benefit Plans

The Company and certain of its subsidiaries sponsor defined benefit pension plans covering some of its employees. The components of net periodic benefit cost of the Company’s defined benefit plans are as follows:

	Three Months Ended March 31,				Six Months Ended March 31,
	2021		2020		2021		2020
Service cost	$	26	$	85	$	52	$	170
Interest cost	175		208		350		416
Expected return on plan assets	(355)		(363)		(711)		(727)
Amortization of net loss	211		188		423		376
Net periodic cost	$	57	$	118	$	114	$	235

During the six months ended March 31, 2021 and 2020, the Company made $56 and $244 in contributions, respectively, to its defined benefit pension plans. The Company anticipates making $141 additional cash contributions to fund its defined benefit pension plans for the balance of fiscal 2021 and will use carryover balances from previous periods that have been available for use as a credit to reduce the amount of cash contributions that the Company is required to make to certain defined benefit plans in fiscal 2021. The Company's ability to elect to use such carryover balance will be determined based on the actual funded status of each defined benefit pension plan relative to the plan's minimum regulatory funding requirements. The Company does not anticipate making cash contributions above the minimum funding requirement to fund its defined benefit pension plans during the balance of fiscal 2021.

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8.Stock-Based Compensation

The Company has awarded performance and restricted shares under the Company's 2007 Long-Term Incentive Plan ("2007 Plan") and the Company's 2007 Long-Term Incentive Plan (Amended and Restated as of November 16, 2016) (as further amended, the "2016 Plan"). The aggregate number of shares that may be awarded by the Company under the 2016 Plan is 1,196 shares, less any shares previously awarded and subject to an adjustment for the forfeiture of any unvested shares. In addition, shares that may be awarded are subject to individual recipient award limitations. The shares awarded under the 2016 Plan may be made in multiple forms, including stock options, stock appreciation rights, restricted or unrestricted stock, and performance related shares. Any such award is exercisable no later than ten years from the date of the grant.

The performance shares that have been awarded under both plans generally provide for the vesting of the Company’s common shares upon the Company achieving certain defined financial performance objectives during a period up to three years following the making of such award. The ultimate number of common shares of the Company that may be earned pursuant to an award ranges from a minimum of no shares to a maximum of 200% of the initial target number of performance shares awarded, depending on the level of the Company’s achievement of its financial performance objectives. Beginning in fiscal 2020, the maximum share that may be achieved was reduced to 150% of target.

With respect to such performance shares, compensation expense is being accrued based on the probability of meeting the performance target. The Company is currently recognizing compensation expense for two tranches of awards where it has concluded it is probable that the performance criteria for that award will be met, while the Company is currently not recognizing compensation expense for one tranche of awards where it had concluded that it is not probable that the performance criteria for those awards will be met. During each future reporting period, such expense may be subject to adjustment based upon the Company's financial performance, which impacts the number of common shares that it expects to vest upon the completion of the performance period. The performance shares were valued at the closing market price of the Company’s common shares on the date of the grant. The vesting of such shares is determined at the end of the performance period.

The Company has awarded restricted shares to its directors, officers, and other employees of the Company. The restricted shares were valued at the closing market price of the Company’s common shares on the date of the grant, and such value was recorded as unearned compensation. The unearned compensation is being amortized ratably over the restricted stock vesting period of one year or three years.

In fiscal 2021, the Company granted 120 shares under the 2016 Plan to certain key employees. The awards were split into two tranches, 71 performance shares and 49 shares of time-based restricted shares, with a grant date fair value of $3.74 per share. The awards vest over three years.

In fiscal 2021, the Company granted its non-employee directors 30 restricted shares under the 2016 Plan, with a grant date fair value of $9.08, which vests over one year. One award for 57 restricted shares vested.

If all outstanding share awards are ultimately earned and vest at the target number of shares, there are approximately 442 shares that remain available for award at March 31, 2021. If any of the outstanding share awards are ultimately earned and vest at greater than the target number of shares, up to a maximum of 200% or 150% of such target, then a fewer number of shares would be available for award.

Stock-based compensation under the 2016 Plan was $293 and $225 during the first six months of fiscal 2021 and 2020, respectively and $150 and $70 during the three months of fiscal 2021 and 2020, respectively. As of March 31, 2021, there was $778 of total unrecognized compensation cost related to the performance shares and restricted shares awarded under the 2016 Plan. The Company expects to recognize this cost over the next 1.5 years.

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9.Revenue

The Company produces forged components for (i) turbine engines that power commercial, business and regional aircraft as well as military aircraft and other military applications; (ii) airframe applications for a variety of aircraft; (iii) industrial gas and steam turbine engines for power generation units; and (iv) other commercial applications.

The following table represents a breakout of total revenue by customer type:

	Three Months Ended March 31,				Six Months Ended March 31,
	2021		2020		2021		2020
Commercial revenue	$	9,247	$	12,497	$	20,000	$	22,688
Military revenue	15,619		18,040		29,944		34,056
Total	$	24,866	$	30,537	$	49,944	$	56,744

The following table represents revenue by the various components:

	Three Months Ended March 31,				Six Months Ended March 31,
Net Sales	2021		2020		2021		2020
Aerospace components for:
Fixed wing aircraft	$	10,176	$	14,065	$	19,966	$	25,400
Rotorcraft	7,872		6,813		15,603		13,661
Energy components for power generation units	5,102		3,417		11,565		6,074
Commercial product and other revenue	1,716		6,242		2,810		11,609
Total	$	24,866	$	30,537	$	49,944	$	56,744

The following table represents revenue by geographic region based on the Company's selling operation locations:

	Three Months Ended March 31,				Six Months Ended March 31,
Net Sales	2021		2020		2021		2020
North America	$	20,019	$	27,495	$	39,784	$	51,271
Europe	4,847		3,042		10,160		5,473
Total	$	24,866	$	30,537	$	49,944	$	56,744

In addition to the disaggregated revenue information provided above, approximately 61% and 63% of total net sales as of March 31, 2021 and 2020, respectively, was recognized on an over-time basis because of the continuous transfer of control to the customer, with the remainder recognized at a point in time. 

Contract Balances

The following table contains a roll forward of contract assets and contract liabilities for the period ended March 31, 2021:

Contract assets - Beginning balance, October 1, 2020	$	11,997
Additional revenue recognized over-time	30,428
Less amounts billed to the customers	(28,860)
Contract assets - Ending balance, March 31, 2021	$	13,565

Contract liabilities (included within Accrued liabilities) - Beginning balance, October 1, 2020	$	(636)
Payments received in advance of performance obligations	(186)
Performance obligations satisfied	754
Contract liabilities (included within Accrued liabilities) - Ending balance, March 31, 2021	$	(68)

There were no impairment losses recorded on contract assets as of March 31, 2021 and September 30, 2020.

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Remaining performance obligations

As of March 31, 2021, the Company has $82,305 of remaining performance obligations, the majority of which are anticipated to be completed within the next twelve months.

10.    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 Pennsylvania State Court, which was filed in August 2019, alleging that certain forged pistons delivered by the Orange plant failed to meet material specifications required by Avco.  Avco also sued Arconic, Inc. (“Arconic”), which was the raw material supplier. No specific amount of damages was claimed by Avco and discovery has only recently begun. Orange disputes the allegations made by Avco and has made cross claims against Arconic.  Previously, Orange was a defendant with respect to the same action in the United States District Court for the District of Rhode Island, which action was dismissed in connection with the movement of the matter to Pennsylvania State Court. 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 accrued for any expected losses, as the Company has not deemed it probable and does not have a reasonable basis on which to establish an estimate.

The Company is a defendant in a purported class action lawsuit filed in the Superior Court of California, County of Orange, which was filed in August 2017, 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; failure to maintain required wage records and furnish accurate wage statements; and unfair competition. A settlement has been reached and the Company received preliminary court approval on July 13, 2020. Class action notices were sent at the end of September and there were no objections to the settlement. On February 4, 2021, the court issued a tentative ruling to grant final approval. The final approval was granted and the previously recorded liability of $315 was paid on March 29, 2021.

During fiscal 2020, the Company received notice from the International Association of Machinists and Aerospace Workers Union that they were disclaiming all interest in representing certain hourly employees at the Company’s Cleveland facility. Subsequently, the International Brotherhood of Boilermakers Union filed a petition to represent this same group of hourly employees. A mail ballot election took place in June 2020 and the National Labor Relations Board certified the International Brotherhood of Boilermakers as the elected representative of the Company’s hourly production employees.  The Company’s obligations will be more fully understood following the ratification of a collective bargaining agreement.

In the first quarter of fiscal 2021, the insurance claim related to the fire on December 26, 2018 at the Orange location was finalized with the Company's insurance carrier. The Company continues to work diligently to restore the final two of the six presses damaged in the fire. Certain vendor delays and certification processes have extended the restoration of these presses. They continue to be on track to be completed by the end of the third quarter of fiscal 2021; however, no assurances can be made that the restoration will be completed within such timeframe. Restoration of the building structure is nearly complete.

Having finalized the claim with its insurance carrier, proceeds in the amount of $3,148 were received in December 2020. In addition, the Company received the remaining receivable balance from the landlord in January in the amount $648, resulting in having received cash proceeds of $4,646 in fiscal 2021. As noted in the table below, $3,099 was recognized within the consolidated condensed statements of operations and the balance was separately designated to the landlord for the continued restoration of the damaged building as prescribed under the lease arrangement. The Company has business interruption insurance coverage, of which $546 of the amount received was reflected within the cost of goods sold line within the consolidated condensed statement of operations.

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Balance sheet (Other receivables):
September 30, 2020		$	1,547
	Cash proceeds	(4,646)
	Capital expenditures (equipment)	2,495
	Other expenses	58
	Business interruption	546
March 31, 2021		$	—

The tables below reflect how the proceeds received impacted the consolidated condensed statements of operations for the six months ended March 31, 2021 and 2020, respectively.

	Six Months Ended March 31, 2021
	Balance without insurance proceeds		Insurance recoveries	Balance with insurance proceeds
Cost of goods sold	$	43,882	(604)	$	43,278
Gain on insurance proceeds received	$	—	(2,495)	$	(2,495)
Income (loss) before income tax (benefit) expense	$	(2,337)	(3,099)	$	762

	Six Months Ended March 31, 2020
	Balance without insurance proceeds		Insurance recoveries	Balance with insurance proceeds
Cost of goods sold	$	49,430	(2,287)	$	47,143
Gain on insurance proceeds received	$	—	(1,000)	$	(1,000)
Income (loss) before income tax (benefit) expense	$	(1,502)	(3,287)	$	1,785

The following table demonstrates the total settlement amount since December 26, 2018:

	Total Claim
Property & damage **	$	20,364
Extra expense & mitigation expense	4,404
Business interruption	2,932
	$	27,700

**$3,640 of total was directed to the landlord of the property for the restoration of the building as prescribed by the lease arrangement.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion and Analysis of Financial Condition and Results of Operations may contain various forward-looking statements and includes assumptions concerning the Company’s operations, future results and prospects. These forward-looking statements are based on current expectations and are subject to risk and uncertainties. In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, the Company provides this cautionary statement identifying important economic, political and technological factors, among others, the absence or effect of which could cause the actual results or events to differ materially from those set forth in or implied by the forward-looking statements and related assumptions. Such factors include the following: (1) the impact on business conditions in general, and on the demand for product in the A&E industries in particular, of the global economic outlook, including the continuation of military spending at or near current levels and the availability of capital and liquidity from banks, the financial markets and other providers of credit; (2) the future business environment, including capital and consumer spending; (3) competitive factors, including the ability to replace business that may be lost at comparable margins; (4) metals and commodities price increases and the Company’s ability to recover such price increases; (5) successful development and market introduction of new products and services; (6) continued reliance on consumer acceptance of regional and business aircraft powered by more fuel efficient turboprop engines; (7) continued reliance on military spending, in general, and/or several major customers, in particular, for revenues; (8) the

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impact on future contributions to the Company’s defined benefit pension plans due to changes in actuarial assumptions, government regulations and the market value of plan assets; (9) stable governments, business conditions, laws, regulations and taxes in economies where business is conducted; (10) the ability to successfully integrate businesses that may be acquired into the Company’s operations; (11) cyber and other security threats or disruptions faced by us, our customers or our suppliers and other partners; (12) our exposure to additional risks as a result of our international business, including risks related to geopolitical and economic factors, suppliers, laws and regulations; (13) the ability to maintain a qualified workforce; (14) the adequacy and availability of our insurance coverage; (15) our ability to develop new products and technologies and maintain technologies, facilities, and equipment to win new competitions and meet the needs of our customers; (16) our ability to realize amounts in our backlog; (17) investigations, claims, disputes, enforcement actions, litigation and/or other legal proceedings; (18) extraordinary or force majeure events affecting the business or operations of our business; and (19) the impact of the novel COVID-19 pandemic and related impact on the global economy, which may exacerbate the above factors and/or impact our results of operations and financial condition.

The Company is engaged in the production of forgings and machined components primarily for the A&E markets. The processes and services provided by the Company include forging, heat-treating, machining, subassembly, and test. The Company operates under one business segment.

The Company endeavors to plan and evaluate its business operations while taking into consideration certain factors including the following: (i) the projected build rate for commercial, business and military aircraft, as well as the engines that power such aircraft; (ii) the projected maintenance, repair and overhaul schedules for commercial, business and military aircraft, as well as the engines that power such aircraft; and (iii) the projected build rate and repair for industrial turbines.

The Company operates within a cost structure that includes a significant fixed component. Therefore, higher net sales volumes are expected to result in greater operating income because such higher volumes allow the business operations to better leverage the fixed component of their respective cost structures. Conversely, the opposite effect is expected to occur at lower net sales and related production volumes.

A. Results of Operations

Overview

The Company produces forged components for (i) turbine engines that power commercial, business and regional aircraft as well as military aircraft and other military applications; (ii) airframe applications for a variety of aircraft; (iii) industrial gas and steam turbine engines for power generation units; and (iv) other commercial applications.

Fire Restoration

The insurance claim related to the fire on December 26, 2018 at the Orange location was finalized with the Company's insurance carrier. The Company continues to work diligently to restore the final two of the six presses damaged in the fire. Certain vendor delays and the certification processes have extended the restoration of these presses. They continue to be on track to be completed by the end of the third quarter of fiscal 2021; however, no assurances can be made that the restoration will be completed within such timeframe. Restoration of the building structure is nearly complete.

Having finalized the claim with its insurance carrier, proceeds in the amount of $3.1 million were received in December 2020 and a remaining receivable balance from the landlord was received in January 2021 in the amount of $0.6 million, resulting in the Company having received cash proceeds of $4.6 million in fiscal 2021. A total of $3.1 million was recognized within the consolidated condensed statements of operations and the balance was separately designated as payable to the landlord for the continued restoration of the damaged building as prescribed under the lease arrangement. The Company has business interruption insurance coverage, of which $0.5 million of the amount received was reflected within the cost of goods sold line within the consolidated condensed statement of operations.

For further detail of how the consolidated condensed statements of operations and balance sheets were impacted for the six months ended, refer to Note 10, Commitments and Contingencies.

COVID-19

Since being recognized by the World Health Organization as a pandemic, the novel coronavirus ("COVID-19") outbreak continues to impact the United States and other countries in which we operate. The COVID-19 pandemic and its effects continue to evolve, including scope, severity and duration of the COVID-19 pandemic, as well as any worsening of the pandemic, the potential for additional outbreaks of the pandemic, the impact of new variants of COVID-19, actions to contain the pandemic's spread or treat its impact, the rollout and effectiveness of the vaccine, and governmental, business and other actions taken in response to the pandemic. The exact timing and pace of the recovery is indeterminable as certain markets have

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reopened, some of which have since experienced a resurgence of COVID-19 cases, and in recent months new variants of COVID-19 have been identified, resulting in additional restrictions put in place by certain governments around the world. Capital markets and economies worldwide have been negatively impacted by COVID-19 and, given the fluidity of the situation, it is still unclear how lasting and deep the economic impacts will be, specifically in relation to the commercial aerospace industry. During fiscal 2021, the COVID-19 pandemic continues to have mixed effects on the Company’s results of operations. Given the long lead times for certain of the Company's products, the Company has seen a greater impact related to the effects of COVID-19 on orders and deliveries in fiscal 2021 than in fiscal 2020. In response to the uncertain environment created by the COVID-19 pandemic, the Company has, in prior periods, taken measures to reduce costs by furloughing and laying off certain of its employees from one of its plant locations that has experienced reduced sales of commercial aerospace products. Such employees have since returned to work and the Company continues to actively monitor and find ways to mitigate the impact of the pandemic on its operations and consider its ability to pivot its operations and the industries served.

Backlog of Orders

SIFCO’s total backlog at March 31, 2021 was $82.3 million, compared with $107.0 million as of March 31, 2020. Orders may be subject to modification or cancellation by the customer with limited charges. Sales in the A&E markets continue to be impacted by the COVID-19 pandemic, which has created increased pressure in these markets. If the COVID-19 pandemic continues to have a material impact on the A&E markets, including with regards to our more significant customers, it could materially affect our business and results of operations. Backlog may decline as customers adjust orders in response to the ongoing COVID-19 pandemic and its impact on their operations. Backlog information may not be indicative of future sales.

Six Months Ended March 31, 2021 compared with Six Months Ended March 31, 2020

Net Sales

Net sales comparative information for the first six months of fiscal 2021 and 2020 is as follows:

(Dollars in millions)	Six Months Ended March 31,				Increase/ (Decrease)
Net Sales	2021		2020
Aerospace components for:
Fixed wing aircraft	$	20.0	$	25.4	$	(5.4)
Rotorcraft	15.6		13.6		2.0
Energy components for power generation units	11.5		6.1		5.4
Commercial product and other revenue	2.8		11.6		(8.8)
Total	$	49.9	$	56.7	$	(6.8)

Net sales for the first six months of fiscal 2021 decreased $6.8 million to $49.9 million, compared with $56.7 million in the comparable period of fiscal 2020. Given the long lead times for certain of the Company's products, the Company has seen a greater impact related to the effects of COVID-19 on orders and deliveries in fiscal 2021 than in fiscal 2020. Commercial products and other revenue decreased $8.8 million in the first six months of fiscal 2021 compared to the same period in fiscal 2020, primarily due to timing of orders related to a munitions program. The energy components for power generation units increased by $5.4 million primarily due to customer order increases as the market saw some recovery. Fixed wing aircraft sales decreased $5.4 million due to timing of customer orders and a decrease in build rates in certain commercial programs, partially offset by increased military programs. The Company experienced an increase in rotorcraft sales primarily due to increased shipments relating to certain military programs.

Commercial net sales were 40.0% of total net sales and military net sales were 60.0% of total net sales in the first six months of fiscal 2021 and fiscal 2020, respectively. Military net sales decreased by $4.1 million to $29.9 million in the first six months of fiscal 2021, compared with $34.0 million in the comparable period of fiscal 2020, primarily due to the timing of orders related to a munitions program.  Commercial net sales decreased $2.7 million to $20.0 million in the first six months of fiscal 2021, compared with $22.7 million in the comparable period of fiscal 2020 primarily due to decreased build rates in certain commercial programs, partially offset by an increase in energy components sales for power generation due to increased customer orders.

Cost of Goods Sold

Cost of goods sold decreased by $3.9 million, or 8.2%, to $43.3 million, or 86.7% of net sales, during the first six months of fiscal 2021, compared with $47.1 million or 83.1% of net sales, in the comparable period of fiscal 2020. The decrease was due primarily to decreased volume, cost controlling measures and the non-recurrence of the one-time pension withdrawal liability charge of $0.8 million incurred in the prior year, which partially offset $1.3 million of idle costs incurred from its Orange

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location due to reduced production and mitigated by insurance recoveries related to business interruption losses of $0.5 million as part of fire settlement.

Gross Profit

Gross profit decreased $2.9 million to $6.7 million during the first six months of fiscal 2021, compared with $9.6 million in the comparable period of fiscal 2020. Gross margin percent of sales was 13.3% during the first six months of fiscal 2021, compared with 16.9% in the comparable period in fiscal 2020. The decrease in gross profit was primarily due to decreased volume and the increased idle costs.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $7.4 million, or 14.9% of net sales during the first six months of fiscal 2021, compared with $7.5 million, or 13.3% of net sales in the comparable period of fiscal 2020. The decrease in selling, general and administrative expenses is due to the continued cost reduction efforts by management in response to COVID-19 and other effects of the COVID-19 pandemic and its impact on operations such as lower wages related to a first quarter furlough at one location and less travel expense, partially offset by higher legal and professional costs and commissions.

Amortization of Intangibles

Amortization of intangibles was $0.5 million in the first six months of fiscal 2021, compared with $0.8 million in the comparable period of fiscal 2020. Such decrease was primarily due to certain intangible assets that were fully amortized during fiscal 2020.

Other/General

The Company recorded income before taxes of $0.8 million in the first six months of fiscal 2021, compared with $1.8 million in the first six months of fiscal 2020.

In the first six months of fiscal 2021, results included a $2.5 million gain on insurance recoveries, compared to $1.0 million in the comparable period.

Interest expense was $0.3 million in the first six months of fiscal 2021, compared to $0.5 million in the first six months of fiscal 2020.

The following table sets forth the weighted average interest rates and weighted average outstanding balances under the Company’s debt agreement in the first six months of both fiscal 2021 and 2020:

	Weighted Average Interest Rate Six Months Ended March 31,				Weighted Average Outstanding Balance Six Months Ended March 31,
	2021		2020		2021	2020
Revolving credit agreement	1.4	%	3.8	%	$ 9.2 million	$ 15.9 million
Foreign term debt	3.6	%	4.0	%	$ 7.1 million	$ 5.7 million
Other debt	1.0	%	0.9	%	$ 5.7 million	$ 1.0 million

Income Taxes

The Company’s effective tax rate through the first six months of fiscal 2021 was (97)%, compared with (8%) for the same period of fiscal 2020. The decrease in the effective rate was primarily attributable to tax benefits from adjusting deferred taxes recorded in Italy recognized on a discrete basis, partially offset by changes in jurisdictional mix of income in fiscal 2021 compared to the same period of fiscal 2020. The effective tax rate differs from the U.S. federal statutory rate due primarily to the valuation allowance against the Company’s U.S. deferred tax assets and income in foreign jurisdictions that are taxed at different rates than the U.S. statutory tax rate

Net Income (Loss)

Net income was $1.5 million during the first six months of fiscal 2021, compared with $1.9 million in fiscal 2020. The decrease in income is primarily due to lower sales, increased idle costs, partially offset by continued cost saving activities, insurance recoveries received and the favorable tax benefit in the first six months of fiscal 2021.

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Three Months Ended March 31, 2021 compared with Three Months Ended March 31, 2020

Net Sales

Net sales for the second quarter of fiscal 2021 decreased 18.6% to $24.9 million, compared with $30.5 million in the comparable period of fiscal 2020. Net sales comparative information for the second quarter of fiscal 2021 and 2020 is as follows:

(Dollars in millions)	Three Months Ended March 31,				Increase (Decrease)
Net Sales	2021		2020
Aerospace components for:
Fixed wing aircraft	$	10.2	$	14.1	$	(3.9)
Rotorcraft	7.9		6.8		1.1
Energy components for power generation units	5.1		3.4		1.7
Commercial product and other revenue	1.7		6.2		(4.5)
Total	$	24.9	$	30.5	$	(5.6)

The decrease was attributed to a $4.5 million decrease in commercial product and other revenues due to timing of orders for a munitions program and a decrease of $3.9 million in fixed wing aircraft revenues due to timing of customer orders and a decrease in build rates in certain commercial programs. The decrease in revenues in the second quarter of fiscal 2021 was partially offset by an increase in sales in the energy components for power generation units of $1.7 million primarily due to customer order increases as the market saw some recovery and a $1.1 million increase in rotorcraft sales primarily due to increased shipments relating to certain military programs.

Commercial net sales were 37.2% of total net sales and military net sales were 62.8% of total net sales in the second quarter of fiscal 2021, compared with 40.9% and 59.1%, respectively, in the comparable period of fiscal 2020. Military net sales decreased by $2.4 million to $15.6 million in the second quarter of fiscal 2021, compared with $18.0 million in the comparable period of fiscal 2020, primarily due to the timing of orders for a munitions program.  Commercial net sales decreased $3.2 million to $9.2 million in the second quarter of fiscal 2021, compared with $12.5 million in the comparable period of fiscal 2020 primarily due to decreased build rates in certain commercial programs partially offset by increased sales in the energy market.

Cost of Goods Sold

Cost of goods sold was $22.1 million, or 89.0% of net sales, during the second quarter of fiscal 2021, compared with $24.3 million or 79.4% of net sales, in the comparable period of fiscal 2020, primarily due to lower volume and idle costs of $0.8 million incurred at the Orange location.

Gross Profit

Gross profit decreased $3.5 million to $2.7 million during the second quarter of fiscal 2021, compared with $6.3 million in the comparable period of fiscal 2020. Gross margin was 11.0% during the second quarter of fiscal 2021, compared with 20.6% in the comparable period in fiscal 2020. The decrease in gross margin was primarily due to lower sales volume and idle costs associated with reduced production at the Orange location.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $3.6 million, or 14.5% of net sales, during the second quarter of fiscal 2021, compared with $3.3 million, or 10.9% of net sales, in the comparable period of fiscal 2020. The increase is primarily due to an increase in legal and professional costs and IT related costs partially offset by lower salary and benefits in the second quarter of fiscal 2021.

Amortization of Intangibles

Amortization of intangibles was $0.3 million in the second quarter of fiscal 2021 compared with $0.4 million in the second quarter of fiscal 2020.

Other/General

The Company recorded loss before income taxes of $1.3 million in the second quarter of fiscal 2021, compared to income before income taxes of $3.2 million in the second quarter of fiscal 2020.

Prior period results include a $1.0 million gain in insurance proceeds related to the insurance recovery from the damage that occurred related to the fire at the Orange location.

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Interest expense was $0.2 million in the second quarter of fiscal 2021, compared to $0.3 million in the second quarter of fiscal 2020.

The following table sets forth the weighted average interest rates and weighted average outstanding balances under the Company’s Credit Agreement in the second quarter of both fiscal 2021 and 2020:

	Weighted Average Interest Rate Three Months Ended March 31,				Weighted Average Outstanding Balance Three Months Ended March 31,
	2021		2020		2021	2020
Revolving credit agreement	1.4	%	3.7	%	$ 7.5 million	$ 16.1 million
Foreign term debt	4.1	%	4.3	%	$ 7.1 million	$ 5.5 million
Other debt	1.0	%	0.9	%	$ 5.7 million	$ 0.9 million

Income Taxes

The Company's effective tax rate in the second quarter of fiscal 2021 was (12.4)%, compared with (1)% for the same period of fiscal 2020. The decrease in the effective rate was primarily attributable to changes in jurisdictional mix of income during the three months ended March 31, 2021 compared to the same period of fiscal 2020. The effective tax rate differs from the U.S. Federal statutory rate due primarily to the valuation allowance against the Company's U.S. deferred tax assets and income in foreign jurisdictions that are taxed at different rates than the U.S. statutory tax rate.

Net Income (Loss)

Net loss was $1.5 million during the second quarter of fiscal 2021, compared with net income of $3.3 million in the comparable period of fiscal 2020. The decrease is primarily due to lower sales, increase in idle costs, and higher selling, general and administrative expenses. Prior period includes a non-recurring gain of insurance recoveries in the amount of $1.0 million as the Company continued to work through the restoration of the Orange location.

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.

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The following table sets forth a reconciliation of net income (loss) to EBITDA and Adjusted EBITDA:

Dollars in thousands	Three Months Ended				Six Months Ended
	March 31,				March 31,
	2021		2020		2021		2020
Net income (loss)	$	(1,491)	$	3,260	$	1,502	$	1,919
Adjustments:
Depreciation and amortization expense	1,905		1,875		3,730		3,731
Interest expense, net	169		262		335		513
Income tax expense (benefit)	165		(39)		(740)		(134)
EBITDA	748		5,358		4,827		6,029
Adjustments:
Foreign currency exchange loss (income), net (1)	14		(1)		21		—
Other loss (income), net (2)	42		25		103		(84)
Loss on disposal of assets (3)	—		41		—		41
Gain on insurance recoveries (4)	—		(1,000)		(2,495)		(1,000)
Equity compensation (5)	150		70		293		225
LIFO impact (6)	207		(33)		335		(11)
Adjusted EBITDA	$	1,161	$	4,460	$	3,084	$	5,200

(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 proceeds from the sale of operating equipment and the carrying values shown on the Company's books.

(4)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.

(5)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.

(6)Represents the change in the reserve for inventories for which cost is determined using the last-in, first-out (“LIFO”) method.

B. Liquidity and Capital Resources

Historically, the main sources of liquidity have been cash flows from operations and borrowings under our Credit Agreement. The ongoing impact and magnitude of the COVID-19 pandemic remain uncertain (including the pandemic's effects on the global economy and potential for market disruptions), with the commercial aerospace market continuing to be impacted by the global disruption in travel and, further, the pandemic and responses to the continued spread of the pandemic causing continued interruptions to the business of our customers and suppliers, which in turn is likely to impact our business, operations and results as well as our liquidity and capital resources. The Company's liquidity could be negatively affected by customers extending payment terms to the Company and/or the decrease in demand for our products as a result of the impact of the COVID-19 on the commercial airline industry. As the impact of the COVID-19 pandemic on the economy and the Company's operations continues to evolve, the Company and management will continue to assess and actively manage liquidity needs.

Cash and cash equivalents was $0.3 million at March 31, 2021 and $0.4 million at September 30, 2020. At March 31, 2021, the majority of the Company’s cash and cash equivalents were in the possession of its non-U.S. subsidiaries. Distributions from the Company's non-U.S. subsidiaries to the Company may be subject to adverse tax consequences.

Operating Activities

The Company’s operating activities provided $5.8 million of cash in the first six months of fiscal 2021, compared with usage of cash of $0.4 million in the first six months of fiscal 2020. The cash provided in fiscal 2021 was primarily due to net income of $1.5 million and a $3.2 million decrease in working capital, and by $1.1 million in non-cash items, such as gain on insurance recovery and deferred income taxes, depreciation and amortization, equity based compensation, and LIFO effect. The cash provided from working capital was primarily due to decrease in receivables due to customer collections and decreased sales.

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The Company’s operating activities used $0.4 million of cash in the first six months of fiscal 2020. The cash used by operating activities in the first six months of fiscal 2020 was primarily due to the use in working capital of $5.1 million (increase in inventory of $2.9 million, $2.2 million in contract assets, net accruals of $1.2 million partially offset by a $1.5 million decrease in receivables) partially offset by net income of $1.9 million and by $2.8 million of non-cash items such as depreciation and amortization of $3.8 million, offset by $1.0 million of other noncash items, such as gain on insurance recovery. The use of cash from working capital was primarily due to increase in inventories to support orders in the second half of fiscal 2020 and payments to suppliers and disbursements related to the fire recovery, partially offset by decreased receivables resulting from improved collections.

Investing Activities

Cash used for investing activities was $1.3 million in the first six months of fiscal 2021, which includes $4.1 million of insurance recovery on the damaged property related to the fire at the Orange location, compared with $0.1 million in the first six months of fiscal 2020. Capital expenditures were $5.4 million, of which $3.6 million related to the continued restoration of the Orange location as a result of the fire. In addition to the $5.4 million spent for capital expenditures during the first six months of fiscal 2021, $1.6 million was committed for future capital expenditures as of March 31, 2021. The Company anticipates that the remaining total fiscal 2021 capital expenditures will be within the range of $1.5 million to $2.0 million (exclusive of fire related expenditures) and will relate principally to the further enhancement of production and product offering capabilities and operating cost reductions. Separate from the amounts given above, the Company anticipates incurring additional costs in fiscal 2021 of approximately $1.0 million to $1.5 million in capital expenditures at the Orange location as the result of the fire and resulting damage that took place. These costs are expected to be offset by the insurance proceeds previously received.

Financing Activities

Cash used by financing activities was $4.6 million in the first six months of fiscal 2021, compared with cash provided by financing activities of $0.5 million in the first six months of fiscal 2020.

As discussed in Note 5, Debt, the Company amended the Credit Agreement and the Export Agreement on February 19, 2021. The combined maximum borrowings remain unchanged at $35.0 million. The Fifth Amendment (the "Fifth Amendment") to the Credit Agreement (as amended, the "Credit Agreement") consists of a senior secured revolving credit facility with a maximum borrowing $28.0 million, previously $30.0 million. The revolving commitment through the First Amendment (the "First Amendment") of the Export Credit Agreement, which lends amounts to the Company on foreign receivables increases its revolving commitment from $5.0 million to $7.0 million. The Fifth Amendment, among other things, extends the maturity date from August 6, 2021 to February 19, 2024.

The Company had net repayments to the revolver under the Credit Agreement of $5.1 million in the first six months of fiscal 2021 compared with net borrowings of $1.6 million in the first six months of fiscal 2020.

Under the Company's Credit Agreement, the Company is subject to certain customary loan covenants regarding availability as discussed in Note 5, Debt. The availability at March 31, 2021 was $18.1 million. If availability had fallen short, the Company would be required to meet the fixed charge coverage ratio ("FCCR") covenant, which must not be less than 1.1 to 1.0. In the event of a default, we may not be able to access our revolver, which could impact the ability to fund working capital needs, capital expenditures and invest in new business opportunities. Because the availability was greater than the 10.0% of the Revolving Commitment as of March 31, 2021, the FCCR calculation was not required.

As the Company’s Credit Agreement is asset-based, a sustained significant decrease in revenue in the U.S. or excessive aging of the underlying receivables and inventory as a result of the impact of the COVID-19 pandemic could materially affect the collateral capacity limitation of the availability under the Credit Agreement and could impact our ability to comply with covenants in our Credit Agreement.

Future cash flows from the Company’s operations may be used to pay down amounts outstanding under the Credit Agreement and its foreign related debts. The Company believes it has adequate cash/liquidity available to finance its operations from the combination of (i) the Company’s expected cash flows from operations and (ii) funds available under the Credit Agreement for its domestic locations. The Company was previously able to defer payments for certain debt obligations at its Maniago location to provide Maniago with liquidity. 

Additionally, the credit and capital markets has seen significant volatility during the course of the pandemic. Tightening of the credit market and standards, as well as capital market volatility, could negatively impact our ability to obtain additional debt financing on terms equivalent to our existing Credit Agreement, in the event the Company seeks additional liquidity sources as

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a result of the continued impact of COVID-19. Capital market uncertainty and volatility, together with the Company’s market capitalization and status as a smaller reporting company could also negatively impact our ability to obtain equity financing.

D. Impact of Recently Issued Accounting Standards

In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" and subsequent updates. ASU 2016-13 changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The new guidance will replace the current incurred loss approach with an expected loss model. The new expected credit loss impairment model will apply to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt instruments, net investments in leases, loan commitments and standby letters of credit. Upon initial recognition of the exposure, the expected credit loss model requires entities to estimate the credit losses expected over the life of an exposure (or pool of exposures). The estimate of expected credit losses should consider historical information, current information and reasonable and supportable forecasts, including estimates of prepayments. Financial instruments with similar risk characteristics should be grouped together when estimating expected credit losses. ASU 2016-13 does not prescribe a specific method to make the estimate, so its application will require significant judgment. ASU 2016-13 is effective for public companies in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. However, in November 2019, the FASB issued ASU 2019-10, "Financial Instruments - Credit Loss (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842)," which defers the effective date for public filers that are considered smaller reporting companies ("SRC"), as defined by the Securities and Exchange Commission, to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Because SIFCO is considered a SRC, the Company does not need to implement until October 1, 2023. The Company will continue to evaluate the effect of adopting ASU 2016-13 will have on the Company's results within the consolidated condensed statements of operations and financial condition.

In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes" was issued to (i) reduce the complexity of the standard by removing certain exceptions to the general principles in Topic 740 and (ii) improve consistency and simplify other areas of Topic 740 by clarifying and amending existing guidance. This ASU is effective beginning October 1, 2021. The Company is currently in the process of evaluating the impact of adoption of the rules on the Company's financial condition, results of operations and disclosure.

In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting," which is intended to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. This ASU, along with recently issued ASU 2021-01, which further clarifies the scope of Topic 848, is available immediately and may be implemented in any period prior to the guidance expiration on December 31, 2022. The Company is currently evaluating these standards to determine whether it will apply the optional expedients and exceptions.

Item 4. Controls and Procedures

As defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), disclosure controls and procedures are controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported on a timely basis, and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. The Company’s disclosure controls and procedures include components of the Company’s internal control over financial reporting. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Management of the Company, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(e) as of March 31, 2021 (the “Evaluation Date”). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures were not effective, as a result of the continuing existence of the material weakness in the Company's internal controls over financial reporting described in Item 9A of the Company's 2020 Annual Report on Form 10-K.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected and corrected on a timely basis. 

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The following material weakness related to our control environment existed as of March 31, 2021.

•Insufficient review of specific controls associated with revenue, inventory, income taxes, and other matters at the Maniago location.

The control environment deficiencies described above could have resulted in a failure to prevent or detect a material misstatement in our financial statements due to the omission of information or inappropriate conclusions regarding information required to be recorded, processed, summarized, and reported in the Company’s SEC reports. Notwithstanding the identified material weakness, management believes the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q fairly represent in all material respects our financial condition, results of operations and cash flows at and for the periods presented in accordance with U.S. GAAP.

Remediation Plan for Material Weakness in Internal Control over Financial Reporting

Management and the Company's Board of Directors are committed to improving the Company's overall system of internal controls over financial reporting.

To address the material weakness identified in our control environment, the Company is taking the following actions to remediate the material weakness:

•Using a risk-based approach, management will implement additional monitoring controls through increased oversight and training local management to execute additional controls in detecting material errors.

•External resources with specialized knowledge and expertise, where appropriate, are being engaged and utilized and additional review controls are being instituted to prevent and detect material errors on a timely basis.

With the oversight of senior management and the Company's Board of Directors, the Company continues to take steps and additional measures to remediate the underlying causes of the identified material weakness, including but not limited to (i) engaging subject matter experts on an as need basis to assist management in generating accurate, transparent, and timely financial information, and (ii) continue to strengthen organizational structure including holding individuals accountable for their internal control responsibilities.

Although we continue to make meaningful progress on our remediation plan during fiscal year 2021, we cannot estimate how long it will take to complete the process or the costs of actions required. There is no assurance that the aforementioned plans will be sufficient and that additional steps may not be necessary.

Changes in Internal Control over Financial Reporting and other Remediation

No material changes in our internal control over financial reporting (as defined in Rules 13a‑15(f) and 15d‑15(f) under the Exchange Act) occurred during the period covered by this Quarterly Report on Form 10‑Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Part II. Other Information

Items 1A, 2, 3, 4 and 5 are not applicable or the answer to such items is negative; therefore, the items have been omitted and no reference is required in this Quarterly Report.

Item 1. Legal Proceedings

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 and 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. For a more information regarding our outstanding material legal proceedings, see Note 10, Commitments and Contingencies.

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Item 6. (a) Exhibits

The following exhibits are filed with this report or are incorporated herein by reference to a prior filing in accordance with Rule 12b-32 under the Securities and Exchange Act of 1934 (Asterisk denotes exhibits filed with this report.)

Exhibit No.	Description
2.1	Stock Purchase Agreement between Riello Investimenti Partners SGR S.p.A., Giorgio Visentini, Giorgio Frassini, Giancarlo Sclabi and Matteo Talmassons and SIFCO Italy Holdings S.R.L (a wholly-owned subsidiary of SIFCO Industries Inc.) dated March 16, 2015 filed as Exhibit 2.1 to the Company’s Form 8-K dated July 2, 2015, and incorporated herein by reference
2.2	Amendment to the Stock Purchase Agreement Riello Investimenti Partners SGR S.p.A., Giorgio Visentini, Giorgio Frassini, Giancarlo Sclabi and Matteo Talmassons and SIFCO Italy Holdings S.R.L (a wholly-owned subsidiary of SIFCO Industries Inc.) dated June 30, 2015 filed as Exhibit 2.2 to the Company’s Form 8-K dated July 2, 2015, and incorporated herein by reference
3.1	Third Amended Articles of Incorporation of SIFCO Industries, Inc., filed as Exhibit 3(a) of the Company’s Form 10-Q dated March 31, 2002, and incorporated herein by reference
3.2	SIFCO Industries, Inc. Amended and Restated Code of Regulations dated January 28, 2016, filed as Exhibit 3.2 of the Company’s Form 10-K dated September 30, 2015, and incorporated herein by reference
9.1	Voting Trust Agreement dated January 31, 2013, filed as Exhibit 9.1 to the Company’s Form 10-Q dated February 11, 2013 and incorporated herein by reference
9.2	Voting Trust Extension Agreement dated January 15, 2015, filed as Exhibit 9.2 to the Company's Form 10-Q dated February 3, 2015 and incorporated herein by reference
9.3	Voting Trust Agreement dated January 31, 2017, filed as Exhibit 9.3 to the Company's Form 10-Q dated December 31, 2016 and incorporated herein by reference
9.4	Voting Trust Extension Agreement dated January 18, 2019, filed as Exhibit 9.4 to the Company's Form 10-Q dated February 14, 2019, and incorporated herein by reference
9.5	Voting Trust Extension Agreement dated January 27, 2021, filed as Exhibit 9.5 to the Company's Form 10-Q dated February 5, 2021, and incorporated herein by reference
10.1	SIFCO Industries, Inc. 2007 Long-Term Incentive Plan, filed as Exhibit A of the Company’s Proxy and Notice of 2008 Annual Meeting to Shareholders dated December 14, 2007, and incorporated herein by reference
10.2	Letter Agreement between the Company and Jeffrey P. Gotschall, dated August 12, 2009 filed as Exhibit 10.1 of the Company’s Form 8-K dated August 12, 2009 and incorporated herein by reference
10.3	Amendment No. 1 to the SIFCO Industries, Inc. 2007 Long-Term Incentive Plan, filed as Exhibit A of the Company’s Proxy and Notice of 2011 Annual Meeting to Shareholders dated December 15, 2010, and incorporated herein by reference
10.4	Change in control Agreement and Separation Agreement between the Company and Peter W. Knapper, effective June 29, 2019, filed as Exhibit 10.1 to the Company's Form 8-K dated July 1, 2019 and incorporated herein by reference.
10.5	Form of SIFCO Industries, Inc. Long-term incentive plan performance share award, filed as Exhibit 10.6 to the Company's Form 10-Q dated May 16, 2016, and incorporated herein by reference
10.6	Form of SIFCO Industries, Inc. Long-term incentive plan restricted share award, filed as Exhibit 10.7 to the Company's Form 10-Q dated May 16, 2016, and incorporated herein by reference
10.7	Credit Agreement, dated August 8, 2018, by and among SIFCO Industries, Inc. and Lender named therein and J.P. Morgan Chase Bank, N.A., filed as Exhibit 10.12 to the Company's Form 10-Q dated August 9, 2018, and incorporated herein by reference
10.8	Amendment and Restatement to the SIFCO Industries, Inc. 2007 Long-Term Incentive Plan, filed as Exhibit A of the Company’s Proxy and Notice of 2017 Annual Meeting to Shareholders dated December 6, 2016, and incorporated herein by reference
10.9	Form of SIFCO Industries, Inc. Long-term incentive plan performance share award, filed as Exhibit 10.14 to the Company's Form 10-Q dated January 31, 2017, and incorporated herein by reference
10.10	Form of SIFCO Industries, Inc. Long-term incentive plan restricted share award, filed as Exhibit 10.15 to the Company's Form 10-Q dated January 31, 2017, and incorporated herein by reference
10.11	Form of SIFCO Industries, Inc. Long-term incentive plan restricted share award, filed as Exhibit 10.16 to the Company's Form 10-Q dated January 31, 2017, and incorporated herein by reference

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10.12	Change in Control Agreement and Separation Agreement between the Company and Thomas R. Kubera, effective June 29, 2019, filed as Exhibit 10.2 to the Company's Form 8-K dated July 1, 2019 and incorporated herein by reference
10.13	First Amendment to Credit Agreement, dated November 5, 2018, by and among SIFCO Industries, Inc., T&W Forge, LLC., Quality Aluminum Forge, LLC., and JPMorgan Chase Bank, N.A., a national banking association, filed as exhibit 10.1 to the Company's Form 8-K dated November 8, 2018, and incorporated herein by reference
10.14	Economic Development Administration Title IX Loan Agreement, dated November 8, 2018, by and between the City of Cleveland and SIFCO Industries, Inc., filed as exhibit 10.2 to the Company's Form 8-K dated November 8, 2018, and incorporated herein by reference
10.15	Second Amendment to Credit Agreement, dated December 17, 2018, by and among SIFCO Industries, Inc., T&W Forge, LLC., Quality Aluminum Forge, LLC., and JPMorgan Chase Bank, N.A., a national banking association, filed as exhibit 10.2 to the Company's Form 8-K dated December 19, 2018, and incorporated herein by reference
10.16	Export Credit Agreement, dated December 17, 2018, by and among SIFCO Industries, Inc., T & W Forge, LLC, Quality Aluminum Forge, LLC, and JPMorgan Chase Bank, N.A., a national banking association filed as Exhibit 10.1 to the Company's Form 8-K dated December 19, 2018 and incorporated herein by reference
10.17	Third Amendment to Credit Agreement, dated March 29, 2019, by and among SIFCO Industries, Inc., Quality Aluminum Forge, LLC., and JPMorgan Chase Bank, N.A., a national banking association, filed as exhibit 10.19 to the Company's Form 10-Q dated May 10, 2019
10.18	Fourth Amendment to Credit Agreement, dated September 20, 2019, by and among SIFCO Industries, Inc., Quality Aluminum Forge, LLC., and JPMorgan Chase Bank, N.A., a national banking association, filed as exhibit 10.1 to the Company's Form 8-K dated September 24, 2019, and incorporated herein by reference.
10.19	First Amendment to the SIFCO Industries, Inc. 2007 Long-Term Incentive Plan (Amended and Restated as of November 16, 2016) filed as Exhibit A of the Company’s Definitive Proxy Statement dated December 16, 2019, and incorporated herein by reference.
10.20	Promissory Note, dated April 10, 2020, by and between SIFCO Industries, Inc. and JPMorgan Chase Bank, N.A., a national banking association, filed as exhibit 10.1 to the Company's Form 8-K dated April 13, 2020, and incorporated herein by reference.
10.21	Form of SIFCO Industries, Inc. Long-term incentive plan restricted share award, filed as Exhibit 10.21 to the Company's Form 10-K dated December 23, 2020, and incorporated herein by reference
10.22	Fifth Amendment to Credit Agreement, dated February 19, 2021, by and among SIFCO Industries, Inc., Quality Aluminum Forge, LLC., and JPMorgan Chase Bank, N.A., a national banking association, filed as exhibit 10.1 to the Company's Form 8-K dated February 22, 2021, and incorporated herein by reference.
10.23	First Amendment to Export Credit Agreement, dated February 19, 2021, by and among SIFCO Industries, Inc., Quality Aluminum Forge, LLC, and JPMorgan Chase Bank, N.A., a national banking association filed as Exhibit 10.2 to the Company's Form 8-K dated February 22, 2021, and incorporated herein by reference
14.1	Code of Ethics, filed as Exhibit 14.1 of the Company’s Form 8-K dated February 6, 2018, and incorporated herein by reference
*31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) / 15d-14(a)
*31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) / 15d-14(a)
*32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350
*32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350
*101	The following financial information from SIFCO Industries, Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 filed with the SEC on May 6, 2021, formatted in XBRL includes: (i) Consolidated Condensed Statements of Operations for the fiscal periods ended March 31, 2021 and 2020, (ii) Consolidated Condensed Statements of Comprehensive Income for the fiscal periods ended March 31, 2021 and 2020, (iii) Consolidated Condensed Balance Sheets at March 31, 2021 and September 30, 2020, (iv) Consolidated Condensed Statements of Cash Flow for the fiscal periods ended March 31, 2021 and 2020, (iv) Consolidated Condensed Statements of Shareholders' Equity for the periods March 31, 2021 and 2020, and (v) the Notes to the Consolidated Condensed Financial Statements.
*104	Cover Page Interactive Data File: the cover page XBRL tags are embedded within the Inline XBRL document and are contained with Exhibit 101

27

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SIFCO Industries, Inc.
	(Registrant)
Date: May 6, 2021	/s/ Peter W. Knapper
	Peter W. Knapper
	President and Chief Executive Officer
	(Principal Executive Officer)
Date: May 6, 2021	/s/ Thomas R. Kubera
	Thomas R. Kubera
	Chief Financial Officer
	(Principal Financial Officer)

28

EX-31.1

Exhibit 31.1

CERTIFICATION

OF THE CHIEF EXECUTIVE OFFICER

RULE 13A-14(A) / 15D-14(A)

I, Peter W. Knapper, certify that:

1.I have read this Quarterly Report on Form 10-Q of SIFCO Industries, Inc.

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation;

d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 6, 2021	/s/ Peter W. Knapper
	Peter W. Knapper
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

OF THE CHIEF FINANCIAL OFFICER

RULE 13A-14(A) / 15D-14(A)

I, Thomas R. Kubera, certify that:

1.I have read this Quarterly Report on Form 10-Q of SIFCO Industries, Inc.

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation;

d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 6, 2021	/s/ Thomas R. Kubera
	Thomas R. Kubera
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report of SIFCO Industries, Inc. (“Company”) on Form 10-Q for the quarter ended March 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (“Report”), the undersigned officer of the Company certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 6, 2021	/s/ Peter W. Knapper
	Peter W. Knapper
	President and Chief Executive Officer

This certification accompanies this Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by SIFCO Industries, Inc. for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that SIFCO Industries, Inc. specifically incorporates it by reference.

A signed original of this written statement required by Section 906 has been provided to SIFCO Industries, Inc. and will be retained by SIFCO Industries, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report of SIFCO Industries, Inc. (“Company”) on Form 10-Q for the quarter ended March 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (“Report”), the undersigned officer of the Company certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 6, 2021	/s/ Thomas R. Kubera
	Thomas R. Kubera
	Chief Financial Officer

This certification accompanies this Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by SIFCO Industries, Inc. for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that SIFCO Industries, Inc. specifically incorporates it by reference.

A signed original of this written statement required by Section 906 has been provided to SIFCO Industries, Inc. and will be retained by SIFCO Industries, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Cover Page	6 Months Ended
	Mar. 31, 2021 shares
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2021
Document Transition Report	false
Entity File Number	1-5978
Entity Registrant Name	SIFCO Industries, Inc
Entity Incorporation, State or Country Code	OH
Entity Tax Identification Number	34-0553950
Entity Address, Address Line One	970 East 64th Street,
Entity Address, City or Town	Cleveland
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	44103
City Area Code	(216)
Local Phone Number	881-8600
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Title of 12(b) Security	Common Shares
Trading Symbol	SIF
Security Exchange Name	NYSEAMER
Entity Common Stock, Shares Outstanding	5,989,129
Entity Central Index Key	0000090168
Current Fiscal Year End Date	--09-30
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

Consolidated Condensed Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Income Statement [Abstract]
Net sales	$ 24,866	$ 30,537	$ 49,944	$ 56,744
Cost of goods sold	22,123	24,260	43,278	47,143
Gross profit	2,743	6,277	6,666	9,601
Selling, general and administrative expenses	3,596	3,321	7,423	7,529
Amortization of intangible assets	248	408	517	817
Loss on disposal of operating assets	0	41	0	41
Gain on insurance recoveries	0	(1,000)	(2,495)	(1,000)
Operating income (loss)	(1,101)	3,507	1,221	2,214
Interest expense	169	262	335	513
Foreign currency exchange loss (income), net	14	(1)	21	0
Other loss (income), net	42	25	103	(84)
Income (loss) before income tax expense (benefit)	(1,326)	3,221	762	1,785
Income tax expense (benefit)	165	(39)	(740)	(134)
Net income (loss)	$ (1,491)	$ 3,260	$ 1,502	$ 1,919
Net income (loss) per share
Basic (in dollars per share)	$ (0.26)	$ 0.57	$ 0.26	$ 0.34
Diluted (in dollars per share)	$ (0.26)	$ 0.57	$ 0.25	$ 0.33
Weighted-average number of common shares (basic) (in shares)	5,777	5,679	5,735	5,645
Weighted-average number of common shares (diluted) (in shares)	5,777	5,770	5,932	5,748

XML

Consolidated Condensed Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ (1,491)	$ 3,260	$ 1,502	$ 1,919
Other comprehensive income:
Foreign currency translation adjustment, net of tax $0 and $0 for the three months ended and net of tax $0 and $0 for the six months ended, respectively	(303)	(130)	(17)	63
Retirement plan liability adjustment, net of tax $0 and $0 for the three months end and net of tax $0 and $0 for the six month ended, respectively	211	249	423	437
Comprehensive income (loss)	$ (1,583)	$ 3,379	$ 1,908	$ 2,419

XML

Consolidated Condensed Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Statement of Comprehensive Income [Abstract]
Foreign currency translation adjustment, tax	$ 0	$ 0	$ 0	$ 0
Retirement plan liability adjustment, tax	$ 0	$ 0	$ 0	$ 0

XML

Consolidated Condensed Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2021	Sep. 30, 2020
Current assets:
Cash and cash equivalents	$ 311	$ 427
Receivables, net of allowance for doubtful accounts of $251 and $249, respectively	19,068	23,225
Other receivables	0	1,547
Contract assets	13,565	11,997
Inventories, net	15,568	15,569
Refundable income taxes	103	103
Prepaid expenses and other current assets	1,959	2,338
Total current assets	50,574	55,206
Property, plant and equipment, net	44,448	44,201
Operating lease right-of-use assets, net	16,405	17,021
Intangible assets, net	1,377	1,890
Goodwill	3,493	3,493
Other assets	89	137
Total assets	116,386	121,948
Current liabilities:
Current maturities of long-term debt	9,783	7,144
Revolver	7,742	12,870
Short-term operating lease liabilities	796	991
Accounts payable	14,495	14,002
Accrued liabilities	6,368	8,290
Total current liabilities	39,184	43,297
Long-term debt, net of current maturities	2,542	4,606
Long-term operating lease liabilities, net of short-term	15,825	16,188
Deferred income taxes	616	1,400
Pension liability	9,764	10,165
Other long-term liabilities	747	769
Shareholders’ equity:
Serial preferred shares, no par value, authorized 1,000 shares	0	0
Common shares, par value $1 per share, authorized 10,000 shares; issued and outstanding shares 5,989 at March 31, 2021 and 5,916 at September 30, 2020	5,989	5,916
Additional paid-in capital	10,940	10,736
Retained earnings	43,841	42,339
Accumulated other comprehensive loss	(13,062)	(13,468)
Total shareholders’ equity	47,708	45,523
Total liabilities and shareholders’ equity	$ 116,386	$ 121,948

XML

Consolidated Condensed Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2021	Sep. 30, 2020
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 251	$ 249
Serial preferred shares, shares authorized (in shares)	1,000,000	1,000,000
Common shares, par value (in dollars per share)	$ 1	$ 1
Common shares, shares authorized (in shares)	10,000,000	10,000,000
Common shares, shares issued (in shares)	5,989,000	5,916,000
Common shares, shares outstanding (in shares)	5,989,000	5,916,000

XML

Consolidated Condensed Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash flows from operating activities:
Net income	$ 1,502	$ 1,919
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Depreciation and amortization	3,730	3,731
Amortization of debt issuance costs	52	52
Loss on disposal of operating assets	0	41
Gain on insurance proceeds received	(2,495)	(1,000)
LIFO effect	335	(11)
Share transactions under company stock plan	277	217
Other long-term liabilities	(2)	(90)
Deferred income taxes	(830)	(135)
Changes in operating assets and liabilities:
Receivables	4,149	1,533
Contract assets	(1,569)	(2,171)
Inventories	(301)	(2,858)
Refundable income taxes	0	10
Prepaid expenses and other current assets	40	(434)
Other assets	47	42
Accounts payable	2,749	(3,296)
Other accrued liabilities	(2,077)	2,050
Accrued income and other taxes	182	(14)
Net cash provided by (used for) operating activities	5,789	(414)
Cash flows from investing activities:
Insurance proceeds received	4,101	4,500
Capital expenditures	(5,416)	(4,596)
Net cash used for investing activities	(1,315)	(96)
Cash flows from financing activities:
Proceeds from long-term debt	0	137
Payments on long-term debt	(264)	(568)
Proceeds from revolving credit agreement	44,666	59,372
Repayments of revolving credit agreement	(49,794)	(57,723)
Payment of debt issuance costs	(45)	0
Short-term debt borrowings	2,471	1,542
Short-term debt repayments	(1,631)	(2,257)
Net cash provided by (used for) financing activities	(4,597)	503
Decrease in cash and cash equivalents	(123)	(7)
Cash and cash equivalents at the beginning of the period	427	341
Effect of exchange rate changes on cash and cash equivalents	7	11
Cash and cash equivalents at the end of the period	311	345
Supplemental disclosure of cash flow information of operations:
Cash paid for interest	(203)	(419)
Cash paid for income taxes, net	$ (22)	$ (34)

XML

Consolidated Condensed Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Loss
Beginning balance (in shares) at Sep. 30, 2019		5,777
Beginning balance at Sep. 30, 2019	$ 36,054	$ 5,777	$ 10,438	$ 33,148	$ (13,309)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Comprehensive income (loss)	2,419			1,919	500
Performance and restricted share expense	225		225
Share transactions under equity based plans (in shares)		139
Share transactions under equity based plans	(8)	$ 139	(147)
Ending balance (in shares) at Mar. 31, 2020		5,916
Ending balance at Mar. 31, 2020	38,690	$ 5,916	10,516	35,067	(12,809)
Beginning balance (in shares) at Dec. 31, 2019		5,863
Beginning balance at Dec. 31, 2019	35,245	$ 5,863	10,503	31,807	(12,928)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Comprehensive income (loss)	3,379			3,260	119
Performance and restricted share expense	70		70
Share transactions under equity based plans (in shares)		53
Share transactions under equity based plans	(4)	$ 53	(57)
Ending balance (in shares) at Mar. 31, 2020		5,916
Ending balance at Mar. 31, 2020	38,690	$ 5,916	10,516	35,067	(12,809)
Beginning balance (in shares) at Sep. 30, 2020		5,916
Beginning balance at Sep. 30, 2020	45,523	$ 5,916	10,736	42,339	(13,468)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Comprehensive income (loss)	1,908			1,502	406
Performance and restricted share expense	293		293
Share transactions under equity based plans (in shares)		73
Share transactions under equity based plans	(16)	$ 73	(89)
Ending balance (in shares) at Mar. 31, 2021		5,989
Ending balance at Mar. 31, 2021	47,708	$ 5,989	10,940	43,841	(13,062)
Beginning balance (in shares) at Dec. 31, 2020		5,959
Beginning balance at Dec. 31, 2020	49,141	$ 5,959	10,820	45,332	(12,970)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Comprehensive income (loss)	(1,583)			(1,491)	(92)
Performance and restricted share expense	150		150
Share transactions under equity based plans (in shares)		30
Share transactions under equity based plans	0	$ 30	(30)
Ending balance (in shares) at Mar. 31, 2021		5,989
Ending balance at Mar. 31, 2021	$ 47,708	$ 5,989	$ 10,940	$ 43,841	$ (13,062)

XML

Summary of Significant Accounting Policies

6 Months Ended

Mar. 31, 2021

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 in consolidation.

The U.S. dollar is the functional currency for all of the Company’s U.S. operations and its non-operating subsidiaries. For these operations, all gains and losses from completed currency transactions are included in income. The functional currency for the Company's other non-U.S. subsidiaries is the Euro. Assets and liabilities are translated into U.S. dollars at the rates of exchange at the end of the period, and revenues and expenses are translated using average rates of exchange for the period. 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 2020 Annual Report on Form 10-K. The year-end consolidated balance sheet data was derived from the audited financial statements and disclosures required by accounting principles generally accepted in the United States ("U.S."). 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. Accounting Policies

A summary of the Company’s significant accounting policies is included in Note 1 to the audited consolidated financial statements of the Company's fiscal 2020 Annual Report on Form 10-K.

C. Net Income/(Loss) per Share

The Company’s net income and loss 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 restricted shares and performance shares under the treasury method. In the three months ended March 31, 2021, due to the net loss, zero restricted shares are included in the calculation of diluted earnings per share because the effect would be anti-dilutive. The dilutive effect is as follows:

	Three Months Ended March 31,				Six Months Ended March 31,
	2021		2020		2021		2020
Net Income (loss)	$	(1,491)	$	3,260	$	1,502	$	1,919
Weighted-average common shares outstanding (basic and diluted)	5,777		5,679		5,735		5,645
Effect of dilutive securities:
Restricted shares	—		89		144		102
Performance shares	—		2		53		1
Weighted-average common shares outstanding (basic and diluted)	5,777		5,770		5,932		5,748
Net income (loss) per share – basic:	$	(0.26)	$	0.57	$	0.26	$	0.34
Net income (loss) per share – diluted:	$	(0.26)	$	0.57	$	0.25	$	0.33
Anti-dilutive weighted-average common shares excluded from calculation of diluted earnings per share	411		215		217		147

D. Impact of Recently Issued Accounting Standards

In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" and subsequent updates. ASU 2016-13 changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The new guidance will replace the current incurred loss approach with an expected loss model. The new expected credit loss impairment model will apply to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt instruments, net investments in leases, loan commitments and standby letters of credit. Upon initial recognition of the exposure, the expected credit loss model requires entities to estimate the credit losses expected over the life of an exposure (or pool of exposures). The estimate of expected credit losses should consider historical information, current information and reasonable and supportable forecasts, including estimates of prepayments. Financial instruments with similar risk characteristics should be grouped together when estimating expected credit losses. ASU 2016-13 does not prescribe a specific method to make the estimate, so its application will require significant judgment. ASU 2016-13 is effective for public companies in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. However, in November 2019, the FASB issued ASU 2019-10, "Financial Instruments - Credit Loss (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842)," which defers the effective date for public filers that are considered smaller reporting companies ("SRC"), as defined by the Securities and Exchange Commission, to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Because SIFCO is considered a SRC, the Company does not need to implement ASU 2016-13 until October 1, 2023. The Company will continue to evaluate the effect of adopting ASU 2016-13 will have on the Company's results within the consolidated condensed statements of operations and financial condition.

In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes" was issued to (i) reduce the complexity of the standard by removing certain exceptions to the general principles in Topic 740 and (ii) improve consistency and simplify other areas of Topic 740 by clarifying and amending existing guidance. This ASU is effective beginning October 1, 2021. The Company continues to evaluate the effect adopting this ASU will have on the Company's results within the consolidated condensed statements of operations and financial condition.

In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting," which is intended to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. This ASU, along with recently issued ASU 2021-01, which further clarifies the scope of Topic 848, is available immediately and may be implemented in any period prior to the guidance expiration on December 31, 2022. The Company is currently evaluating these standards to determine whether it will apply the optional expedients and exceptions.

XML

Inventories

6 Months Ended

Mar. 31, 2021

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories consist of:

	March 31, 2021		September 30, 2020
Raw materials and supplies	$	6,379	$	6,548
Work-in-process	3,564		3,786
Finished goods	5,625		5,235
Total inventories	$	15,568	$	15,569

For a portion of the Company's inventory, cost is determined using the last-in, first-out ("LIFO") method. Approximately 49% and 47% of the Company’s inventories at March 31, 2021 and September 30, 2020, respectively, use the LIFO method. An actual valuation of inventory under the LIFO method is made at the end of each fiscal year based on the inventory levels and costs existing at that time. Accordingly, interim LIFO calculations must be based on management’s estimates of expected year-end inventory levels and costs. Because the actual results may vary from these estimates, calculations are subject to many factors beyond management’s control, and annual results may differ from interim results as they are subject to adjustments based on the differences between the estimates and the actual results. The first-in, first-out (“FIFO”) method is used for the remainder of the inventories, which are stated at the lower of cost or net realizable value. If the FIFO method had been used for the inventories for which cost is determined using the LIFO method, inventories would have been $8,621 and $8,286 higher than reported at March 31, 2021 and September 30, 2020, respectively.

XML

Accumulated Other Comprehensive Loss

6 Months Ended

Mar. 31, 2021

Equity [Abstract]

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss are as follows:

	March 31, 2021		September 30, 2020
Foreign currency translation adjustment	$	(5,274)	$	(5,257)
Retirement plan liability adjustment, net of tax	(7,788)		(8,211)
Total accumulated other comprehensive loss	$	(13,062)	$	(13,468)

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Leases

6 Months Ended

Mar. 31, 2021

Leases [Abstract]

Leases

Leases

The components of lease expense were as follows:

	Three Months Ended March 31,				Six Months Ended March 31,
	2021		2020		2021		2020
Finance lease expense:
Amortization of right-of use assets on finance leases	$	13	$	14	$	27	$	27
Interest on lease liabilities	1		1		2		3
Operating lease expense:	540		543		1,092		1,079
Variable lease cost:	35		39		69		79
Total lease expense	$	589	$	597	$	1,190	$	1,188

The following table presents the impact of leasing on the consolidated condensed balance sheet.

	Classification in the consolidated condensed balance sheets	March 31, 2021		September 30, 2020
Assets:
Finance lease assets	Property, plant and equipment, net	$	62	$	89
Operating lease assets	Operating lease right-of-use assets, net	16,405		17,021
Total lease assets		$	16,467	$	17,110
Current liabilities:
Finance lease liabilities	Current maturities of long-term debt	$	41	$	58
Operating lease liabilities	Short-term operating lease liabilities	796		991
Non-current liabilities:
Finance lease liabilities	Long-term debt, net of current maturities	10		22
Operating lease liabilities	Long-term operating lease liabilities, net of short-term	15,825		16,188
Total lease liabilities		$	16,672	$	17,259

Supplemental cash flow and other information related to leases were as follows:

	March 31, 2021		March 31, 2020
Other Information
Cash paid for amounts included in measurement of liabilities:
Operating cash flows from operating leases	$	1,097	$	1,086
Operating cash flows from finance leases	2		3
Financing cash flows from finance leases	29		28
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	43		278

	March 31, 2021		September 30, 2020
Weighted-average remaining lease term (years):
Finance leases	1.2		1.6
Operating leases	14.8		15.2
Weighted-average discount rate:
Finance leases	4.4	%	4.8	%
Operating leases	5.9	%	5.9	%

Future minimum lease under non-cancellable leases at March 31, 2021 were as follows:

	Finance Leases		Operating Leases
Year ending September 30,
2021 (excluding the six months ended March 31, 2021)	$	27	$	852
2022	21		1,696
2023	4		1,633
2024	—		1,647
2025	—		1,644
Thereafter	—		17,532
Total lease payments	$	52	$	25,004
Less: Imputed interest	(1)		(8,383)
Present value of lease liabilities	$	51	$	16,621

Leases

Leases

The components of lease expense were as follows:

	Three Months Ended March 31,				Six Months Ended March 31,
	2021		2020		2021		2020
Finance lease expense:
Amortization of right-of use assets on finance leases	$	13	$	14	$	27	$	27
Interest on lease liabilities	1		1		2		3
Operating lease expense:	540		543		1,092		1,079
Variable lease cost:	35		39		69		79
Total lease expense	$	589	$	597	$	1,190	$	1,188

The following table presents the impact of leasing on the consolidated condensed balance sheet.

	Classification in the consolidated condensed balance sheets	March 31, 2021		September 30, 2020
Assets:
Finance lease assets	Property, plant and equipment, net	$	62	$	89
Operating lease assets	Operating lease right-of-use assets, net	16,405		17,021
Total lease assets		$	16,467	$	17,110
Current liabilities:
Finance lease liabilities	Current maturities of long-term debt	$	41	$	58
Operating lease liabilities	Short-term operating lease liabilities	796		991
Non-current liabilities:
Finance lease liabilities	Long-term debt, net of current maturities	10		22
Operating lease liabilities	Long-term operating lease liabilities, net of short-term	15,825		16,188
Total lease liabilities		$	16,672	$	17,259

Supplemental cash flow and other information related to leases were as follows:

	March 31, 2021		March 31, 2020
Other Information
Cash paid for amounts included in measurement of liabilities:
Operating cash flows from operating leases	$	1,097	$	1,086
Operating cash flows from finance leases	2		3
Financing cash flows from finance leases	29		28
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	43		278

	March 31, 2021		September 30, 2020
Weighted-average remaining lease term (years):
Finance leases	1.2		1.6
Operating leases	14.8		15.2
Weighted-average discount rate:
Finance leases	4.4	%	4.8	%
Operating leases	5.9	%	5.9	%

Future minimum lease under non-cancellable leases at March 31, 2021 were as follows:

	Finance Leases		Operating Leases
Year ending September 30,
2021 (excluding the six months ended March 31, 2021)	$	27	$	852
2022	21		1,696
2023	4		1,633
2024	—		1,647
2025	—		1,644
Thereafter	—		17,532
Total lease payments	$	52	$	25,004
Less: Imputed interest	(1)		(8,383)
Present value of lease liabilities	$	51	$	16,621

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Debt

6 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Debt

Debt

Debt consists of: 

	March 31, 2021		September 30, 2020
Revolving credit agreement	$	7,742	$	12,870
Foreign subsidiary borrowings	6,623		5,759
Finance lease obligations	51		80
Other, net of unamortized debt issuance costs $(37) and $(20), respectively	5,651		5,911
Total debt	20,067		24,620
Less – current maturities	(17,525)		(20,014)
Total long-term debt	$	2,542	$	4,606

Credit Agreement and Security Agreement

The Company's asset-based Credit Agreement (as amended, the "Credit Agreement"), Security Agreement (“Security Agreement”) and Export Credit Agreement (as amended, the "Export Credit Agreement") are secured by substantially all the assets of the Company and its U.S. subsidiaries and a pledge of 66.67% of the stock of its first-tier non-U.S. subsidiaries. The Credit Agreement (as amended by Fifth Amendment (the "Fifth Amendment") described below), consists of a senior secured revolving credit facility with a maximum borrowing of $28,000. The revolving commitment through the Export Credit Agreement, as amended, which lends amounts to the Company on foreign receivables is $7,000. The Credit Agreement also has an accordion feature, which allows the Company to increase maximum borrowings by up to $10,000 upon consent of the Lender (as defined below) or upon additional lenders joining the Credit Agreement. The Credit Agreement and the Export Agreement were amended on February 19, 2021, when the Company and certain of its subsidiaries (collectively, the "borrowers") entered into the Fifth Amendment to the Credit Agreement and the First Amendment (the "First Amendment") to the Export Credit Agreement, in each case, with JPMorgan Chase Bank, N.A., a national banking association, (the "Lender"). The combined maximum borrowings remain unchanged at $35,000; however the maximum borrowing under the Credit Agreement was decreased to $28,000 (from $30,000) and the revolving commitment through the Export Agreement was

increased to $7,000 (from $5,000). The Fifth Amendment, among other things, extends the maturity date from August 6, 2021 to February 19, 2024.

The Credit Agreement contains affirmative and negative covenants and events of defaults. Prior to the Fifth Amendment, the Credit Agreement required the Company to maintain a fixed charge coverage ratio ("FCCR") of 1.1:1.0 any time the availability is equal to or less than 12.5% of the revolving commitment. However, the Fifth Amendment provides that the Company will not permit the fixed charge coverage ratio to be less than 1.1 to 1.0 as of the last day of any calendar month; provided that the fixed charge coverage ratio will not be tested unless (i) a default has occurred and is continuing, (ii) when the combined availability was less than or equal to the greater of (x) 10% of the lesser of the combined commitments or (y) 10% of the combined borrowing base, and $2,000, for three or more business days in any consecutive 30 day period. In the event of a default, the Company may not be able to access the revolver, which could impact the ability to fund working capital needs, capital expenditures and invest in new business opportunities. The total collateral at March 31, 2021 and September 30, 2020 was $26,619 and $26,964, respectively and the revolving commitment was $35,000 for both periods. Total availability at March 31, 2021 and September 30, 2020 was $18,067 and $13,284, respectively, which exceed both the collateral and total commitment threshold. Since the availability was greater than the 10.0% of the revolving commitment as of March 31, 2021 and 12.5% of the revolving commitment at September 30, 2020, the FCCR calculation was not required.

Borrowings will bear interest at the Lender's established domestic rate or LIBOR, plus the applicable margin as set forth in the Fifth Amendment. The revolver has a rate based on LIBOR plus 1.75% spread, which was 1.87% at March 31, 2021 and a rate based on LIBOR plus 1.5% spread, which was 1.7% September 30, 2020. The Export Credit Agreement has a rate based on LIBOR plus 1.25% spread, which was 1.4% at March 31, 2021 and a rate based on LIBOR plus 1.0% spread, which was 1.2% at September 30, 2020, respectively. The Company also has a commitment fee of 0.25% under the Credit Agreement as amended to be incurred on the unused balance of the revolver.

Foreign subsidiary borrowings

Foreign debt consists of:

	March 31, 2021		September 30, 2020
Term loan	$	2,661	$	2,670
Short-term borrowings	2,147		2,620
Factor	1,815		469
Total debt	$	6,623	$	5,759
Less – current maturities	(4,743)		(3,544)
Total long-term debt	$	1,880	$	2,215
Receivables pledged as collateral	$	2,343	$	1,859

Interest rates on foreign borrowings are based on Euribor rates which range from 1.0% to 4.2%.

The Company factors receivables from one of its customers. The Company accounts for the pledge of receivables under this agreement as short-term debt and continues to carry the receivables on its consolidated condensed balance sheets.

Debt issuance costs

The Company incurred debt issuance costs as it pertains to the Fifth Amendment in the amount of $45 and combined the amount with the remaining unamortized debt issuance costs prior to the amendment for a total of $86, which is included in the consolidated condensed balance sheets as a deferred charge in other current assets, net of amortization of $2 and $205 at March 31, 2021 and September 30, 2020, respectively.

Other

On April 10, 2020, the Company entered into an unsecured promissory note under the Paycheck Protection Program (the “PPP Loan”). The PPP Loan to the Company was made through JPMorgan Chase Bank, N.A., a national banking association and the Company’s existing lender. The note has an aggregate principal amount of approximately $5,025, of which $261 was repaid in fiscal 2020 and has a two year term. The interest rate on the PPP Loan is 0.98%, which was deferred for the first six months of the term of the loan. The promissory note evidencing the PPP Loan contains customary events of default. The occurrence of an event of default may result in the repayment of all amounts outstanding, collection of all amounts owed from the Company,

and/or filing suit and obtaining judgment against the Company. The loan proceeds were received on April 10, 2020 and were used for payroll payments. As of March 31, 2021 and September 30, 2020, the PPP loan balance was $4,764.

PPP Loan recipients can apply for and potentially be granted forgiveness for all or a portion of loans granted under the Paycheck Protection Program. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for payroll costs. As of March 31, 2021, based on guidance from the U.S. Department of Treasury, the Company is in the process of applying for forgiveness for the PPP Loan. However, no assurance is provided that the Company will obtain forgiveness of the PPP Loan in whole or in part.

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Income Taxes

6 Months Ended

Mar. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

On December 27, 2020, the Consolidated Appropriations Act, 2021 (the "Appropriations Act") was enacted in response to the COVID-19 pandemic. The Appropriations Act, among other actions temporarily extends through December 31, 2025 certain expiring tax credit and other provisions. Additionally, the Appropriations Act enacts new provisions and extends certain provisions originated within the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act"), enacted on March 27, 2020. The CARES Act included provisions relating to refundable payroll tax credits, deferral of certain payment requirements for the employer portion of Social Security taxes, net operating loss carryback periods and temporarily increasing the amount of net operating losses that corporations can use to offset income, alternative minimum tax ("AMT") credit refunds, modifications to the net interest deduction limitations, and technical corrections to tax depreciation methods for qualified improvement property. The Appropriations Act and CARES Act did not materially affect the Company’s income tax provision, deferred tax assets and liabilities, or related taxes payable through the second quarter of fiscal 2021. The Company will continue to assess the implications of these and any new relief provisions on its consolidated condensed financial statements but does not expect the impact to be material.

For each interim reporting period, the Company makes an estimate of the effective tax rate it expects to be applicable for the full fiscal year for its operations. This estimated effective rate is used in providing for income taxes on a year-to-date basis. The Company’s effective tax rate through the first six months of fiscal 2021 was (97)%, compared with (8)% for the same period of fiscal 2020. The decrease in the effective rate was primarily attributable to tax benefits from adjusting deferred taxes recorded in Italy recognized on a discrete basis, partially offset by changes in jurisdictional mix of income in fiscal 2021 compared to the same period of fiscal 2020. The effective tax rate differs from the U.S. federal statutory rate due primarily to the valuation allowance against the Company’s U.S. deferred tax assets and income in foreign jurisdictions that are taxed at different rates than the U.S. statutory tax rate. Recent positive evidence related to the potential or partial release of the Company's valuation allowance includes profitable U.S. results, however, there continues to be uncertainty as a result of the ongoing COVID-19 pandemic. As such, the Company has maintained a full valuation allowance on its U.S. net deferred tax assets in the second quarter of fiscal 2021. It is reasonably possible that sufficient positive evidence required to release all, or a portion of the valuation allowance in the U.S. will exist within the next 12 months.

The Company is subject to income taxes in the U.S. federal jurisdiction, Ireland, Italy, and various state and local jurisdictions.

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Retirement Benefit Plans

6 Months Ended

Mar. 31, 2021

Retirement Benefits [Abstract]

Retirement Benefit Plans

Retirement Benefit Plans

The Company and certain of its subsidiaries sponsor defined benefit pension plans covering some of its employees. The components of net periodic benefit cost of the Company’s defined benefit plans are as follows:

	Three Months Ended March 31,				Six Months Ended March 31,
	2021		2020		2021		2020
Service cost	$	26	$	85	$	52	$	170
Interest cost	175		208		350		416
Expected return on plan assets	(355)		(363)		(711)		(727)
Amortization of net loss	211		188		423		376
Net periodic cost	$	57	$	118	$	114	$	235

During the six months ended March 31, 2021 and 2020, the Company made $56 and $244 in contributions, respectively, to its defined benefit pension plans. The Company anticipates making $141 additional cash contributions to fund its defined benefit pension plans for the balance of fiscal 2021 and will use carryover balances from previous periods that have been available for use as a credit to reduce the amount of cash contributions that the Company is required to make to certain defined benefit plans in fiscal 2021. The Company's ability to elect to use such carryover balance will be determined based on the actual funded status of each defined benefit pension plan relative to the plan's minimum regulatory funding requirements. The Company does not anticipate making cash contributions above the minimum funding requirement to fund its defined benefit pension plans during the balance of fiscal 2021.

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Stock-Based Compensation

6 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

The Company has awarded performance and restricted shares under the Company's 2007 Long-Term Incentive Plan ("2007 Plan") and the Company's 2007 Long-Term Incentive Plan (Amended and Restated as of November 16, 2016) (as further amended, the "2016 Plan"). The aggregate number of shares that may be awarded by the Company under the 2016 Plan is 1,196 shares, less any shares previously awarded and subject to an adjustment for the forfeiture of any unvested shares. In addition, shares that may be awarded are subject to individual recipient award limitations. The shares awarded under the 2016 Plan may be made in multiple forms, including stock options, stock appreciation rights, restricted or unrestricted stock, and performance related shares. Any such award is exercisable no later than ten years from the date of the grant.

The performance shares that have been awarded under both plans generally provide for the vesting of the Company’s common shares upon the Company achieving certain defined financial performance objectives during a period up to three years following the making of such award. The ultimate number of common shares of the Company that may be earned pursuant to an award ranges from a minimum of no shares to a maximum of 200% of the initial target number of performance shares awarded, depending on the level of the Company’s achievement of its financial performance objectives. Beginning in fiscal 2020, the maximum share that may be achieved was reduced to 150% of target.

With respect to such performance shares, compensation expense is being accrued based on the probability of meeting the performance target. The Company is currently recognizing compensation expense for two tranches of awards where it has concluded it is probable that the performance criteria for that award will be met, while the Company is currently not recognizing compensation expense for one tranche of awards where it had concluded that it is not probable that the performance criteria for those awards will be met. During each future reporting period, such expense may be subject to adjustment based upon the Company's financial performance, which impacts the number of common shares that it expects to vest upon the completion of the performance period. The performance shares were valued at the closing market price of the Company’s common shares on the date of the grant. The vesting of such shares is determined at the end of the performance period.

The Company has awarded restricted shares to its directors, officers, and other employees of the Company. The restricted shares were valued at the closing market price of the Company’s common shares on the date of the grant, and such value was recorded as unearned compensation. The unearned compensation is being amortized ratably over the restricted stock vesting period of one year or three years.

In fiscal 2021, the Company granted 120 shares under the 2016 Plan to certain key employees. The awards were split into two tranches, 71 performance shares and 49 shares of time-based restricted shares, with a grant date fair value of $3.74 per share. The awards vest over three years.

In fiscal 2021, the Company granted its non-employee directors 30 restricted shares under the 2016 Plan, with a grant date fair value of $9.08, which vests over one year. One award for 57 restricted shares vested.

If all outstanding share awards are ultimately earned and vest at the target number of shares, there are approximately 442 shares that remain available for award at March 31, 2021. If any of the outstanding share awards are ultimately earned and vest at greater than the target number of shares, up to a maximum of 200% or 150% of such target, then a fewer number of shares would be available for award.

Stock-based compensation under the 2016 Plan was $293 and $225 during the first six months of fiscal 2021 and 2020, respectively and $150 and $70 during the three months of fiscal 2021 and 2020, respectively. As of March 31, 2021, there was $778 of total unrecognized compensation cost related to the performance shares and restricted shares awarded under the 2016 Plan. The Company expects to recognize this cost over the next 1.5 years.

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Revenue

6 Months Ended

Mar. 31, 2021

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

The Company produces forged components for (i) turbine engines that power commercial, business and regional aircraft as well as military aircraft and other military applications; (ii) airframe applications for a variety of aircraft; (iii) industrial gas and steam turbine engines for power generation units; and (iv) other commercial applications.

The following table represents a breakout of total revenue by customer type:

	Three Months Ended March 31,				Six Months Ended March 31,
	2021		2020		2021		2020
Commercial revenue	$	9,247	$	12,497	$	20,000	$	22,688
Military revenue	15,619		18,040		29,944		34,056
Total	$	24,866	$	30,537	$	49,944	$	56,744

The following table represents revenue by the various components:

	Three Months Ended March 31,				Six Months Ended March 31,
Net Sales	2021		2020		2021		2020
Aerospace components for:
Fixed wing aircraft	$	10,176	$	14,065	$	19,966	$	25,400
Rotorcraft	7,872		6,813		15,603		13,661
Energy components for power generation units	5,102		3,417		11,565		6,074
Commercial product and other revenue	1,716		6,242		2,810		11,609
Total	$	24,866	$	30,537	$	49,944	$	56,744

The following table represents revenue by geographic region based on the Company's selling operation locations:

	Three Months Ended March 31,				Six Months Ended March 31,
Net Sales	2021		2020		2021		2020
North America	$	20,019	$	27,495	$	39,784	$	51,271
Europe	4,847		3,042		10,160		5,473
Total	$	24,866	$	30,537	$	49,944	$	56,744

In addition to the disaggregated revenue information provided above, approximately 61% and 63% of total net sales as of March 31, 2021 and 2020, respectively, was recognized on an over-time basis because of the continuous transfer of control to the customer, with the remainder recognized at a point in time. 

Contract Balances

The following table contains a roll forward of contract assets and contract liabilities for the period ended March 31, 2021:

Contract assets - Beginning balance, October 1, 2020	$	11,997
Additional revenue recognized over-time	30,428
Less amounts billed to the customers	(28,860)
Contract assets - Ending balance, March 31, 2021	$	13,565

Contract liabilities (included within Accrued liabilities) - Beginning balance, October 1, 2020	$	(636)
Payments received in advance of performance obligations	(186)
Performance obligations satisfied	754
Contract liabilities (included within Accrued liabilities) - Ending balance, March 31, 2021	$	(68)

There were no impairment losses recorded on contract assets as of March 31, 2021 and September 30, 2020.

Remaining performance obligations

As of March 31, 2021, the Company has $82,305 of remaining performance obligations, the majority of which are anticipated to be completed within the next twelve months.

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Commitments and Contingencies

6 Months Ended

Mar. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

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 Pennsylvania State Court, which was filed in August 2019, alleging that certain forged pistons delivered by the Orange plant failed to meet material specifications required by Avco.  Avco also sued Arconic, Inc. (“Arconic”), which was the raw material supplier. No specific amount of damages was claimed by Avco and discovery has only recently begun. Orange disputes the allegations made by Avco and has made cross claims against Arconic.  Previously, Orange was a defendant with respect to the same action in the United States District Court for the District of Rhode Island, which action was dismissed in connection with the movement of the matter to Pennsylvania State Court. 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 accrued for any expected losses, as the Company has not deemed it probable and does not have a reasonable basis on which to establish an estimate.

The Company is a defendant in a purported class action lawsuit filed in the Superior Court of California, County of Orange, which was filed in August 2017, 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; failure to maintain required wage records and furnish accurate wage statements; and unfair competition. A settlement has been reached and the Company received preliminary court approval on July 13, 2020. Class action notices were sent at the end of September and there were no objections to the settlement. On February 4, 2021, the court issued a tentative ruling to grant final approval. The final approval was granted and the previously recorded liability of $315 was paid on March 29, 2021.

During fiscal 2020, the Company received notice from the International Association of Machinists and Aerospace Workers Union that they were disclaiming all interest in representing certain hourly employees at the Company’s Cleveland facility. Subsequently, the International Brotherhood of Boilermakers Union filed a petition to represent this same group of hourly employees. A mail ballot election took place in June 2020 and the National Labor Relations Board certified the International Brotherhood of Boilermakers as the elected representative of the Company’s hourly production employees.  The Company’s obligations will be more fully understood following the ratification of a collective bargaining agreement.

In the first quarter of fiscal 2021, the insurance claim related to the fire on December 26, 2018 at the Orange location was finalized with the Company's insurance carrier. The Company continues to work diligently to restore the final two of the six presses damaged in the fire. Certain vendor delays and certification processes have extended the restoration of these presses. They continue to be on track to be completed by the end of the third quarter of fiscal 2021; however, no assurances can be made that the restoration will be completed within such timeframe. Restoration of the building structure is nearly complete.

Having finalized the claim with its insurance carrier, proceeds in the amount of $3,148 were received in December 2020. In addition, the Company received the remaining receivable balance from the landlord in January in the amount $648, resulting in having received cash proceeds of $4,646 in fiscal 2021. As noted in the table below, $3,099 was recognized within the consolidated condensed statements of operations and the balance was separately designated to the landlord for the continued restoration of the damaged building as prescribed under the lease arrangement. The Company has business interruption insurance coverage, of which $546 of the amount received was reflected within the cost of goods sold line within the consolidated condensed statement of operations.

Balance sheet (Other receivables):
September 30, 2020		$	1,547
	Cash proceeds	(4,646)
	Capital expenditures (equipment)	2,495
	Other expenses	58
	Business interruption	546
March 31, 2021		$	—

The tables below reflect how the proceeds received impacted the consolidated condensed statements of operations for the six months ended March 31, 2021 and 2020, respectively.

	Six Months Ended March 31, 2021
	Balance without insurance proceeds		Insurance recoveries	Balance with insurance proceeds
Cost of goods sold	$	43,882	(604)	$	43,278
Gain on insurance proceeds received	$	—	(2,495)	$	(2,495)
Income (loss) before income tax (benefit) expense	$	(2,337)	(3,099)	$	762

	Six Months Ended March 31, 2020
	Balance without insurance proceeds		Insurance recoveries	Balance with insurance proceeds
Cost of goods sold	$	49,430	(2,287)	$	47,143
Gain on insurance proceeds received	$	—	(1,000)	$	(1,000)
Income (loss) before income tax (benefit) expense	$	(1,502)	(3,287)	$	1,785

The following table demonstrates the total settlement amount since December 26, 2018:

	Total Claim
Property & damage **	$	20,364
Extra expense & mitigation expense	4,404
Business interruption	2,932
	$	27,700

**$3,640 of total was directed to the landlord of the property for the restoration of the building as prescribed by the lease arrangement.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Principles of Consolidation

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 in consolidation.

The U.S. dollar is the functional currency for all of the Company’s U.S. operations and its non-operating subsidiaries. For these operations, all gains and losses from completed currency transactions are included in income. The functional currency for the Company's other non-U.S. subsidiaries is the Euro. Assets and liabilities are translated into U.S. dollars at the rates of exchange at the end of the period, and revenues and expenses are translated using average rates of exchange for the period. 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 2020 Annual Report on Form 10-K. The year-end consolidated balance sheet data was derived from the audited financial statements and disclosures required by accounting principles generally accepted in the United States ("U.S."). 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.

Net Income/(Loss) per Share

Net Income/(Loss) per ShareThe Company’s net income and loss per basic share has been computed based on the weighted-average number of common shares outstanding.

Impact of Recently Issued Accounting Standards

Impact of Recently Issued Accounting Standards

In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" and subsequent updates. ASU 2016-13 changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The new guidance will replace the current incurred loss approach with an expected loss model. The new expected credit loss impairment model will apply to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt instruments, net investments in leases, loan commitments and standby letters of credit. Upon initial recognition of the exposure, the expected credit loss model requires entities to estimate the credit losses expected over the life of an exposure (or pool of exposures). The estimate of expected credit losses should consider historical information, current information and reasonable and supportable forecasts, including estimates of prepayments. Financial instruments with similar risk characteristics should be grouped together when estimating expected credit losses. ASU 2016-13 does not prescribe a specific method to make the estimate, so its application will require significant judgment. ASU 2016-13 is effective for public companies in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. However, in November 2019, the FASB issued ASU 2019-10, "Financial Instruments - Credit Loss (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842)," which defers the effective date for public filers that are considered smaller reporting companies ("SRC"), as defined by the Securities and Exchange Commission, to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Because SIFCO is considered a SRC, the Company does not need to implement ASU 2016-13 until October 1, 2023. The Company will continue to evaluate the effect of adopting ASU 2016-13 will have on the Company's results within the consolidated condensed statements of operations and financial condition.

In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes" was issued to (i) reduce the complexity of the standard by removing certain exceptions to the general principles in Topic 740 and (ii) improve consistency and simplify other areas of Topic 740 by clarifying and amending existing guidance. This ASU is effective beginning October 1, 2021. The Company continues to evaluate the effect adopting this ASU will have on the Company's results within the consolidated condensed statements of operations and financial condition.

In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting," which is intended to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. This ASU, along with recently issued ASU 2021-01, which further clarifies the scope of Topic 848, is available immediately and may be implemented in any period prior to the guidance expiration on December 31, 2022. The Company is currently evaluating these standards to determine whether it will apply the optional expedients and exceptions.

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Schedule of Dilutive Effect of Company's Restricted Shares and Performance Shares

The dilutive effect is as follows:

	Three Months Ended March 31,				Six Months Ended March 31,
	2021		2020		2021		2020
Net Income (loss)	$	(1,491)	$	3,260	$	1,502	$	1,919
Weighted-average common shares outstanding (basic and diluted)	5,777		5,679		5,735		5,645
Effect of dilutive securities:
Restricted shares	—		89		144		102
Performance shares	—		2		53		1
Weighted-average common shares outstanding (basic and diluted)	5,777		5,770		5,932		5,748
Net income (loss) per share – basic:	$	(0.26)	$	0.57	$	0.26	$	0.34
Net income (loss) per share – diluted:	$	(0.26)	$	0.57	$	0.25	$	0.33
Anti-dilutive weighted-average common shares excluded from calculation of diluted earnings per share	411		215		217		147

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Inventories (Tables)

6 Months Ended

Mar. 31, 2021

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories consist of:

	March 31, 2021		September 30, 2020
Raw materials and supplies	$	6,379	$	6,548
Work-in-process	3,564		3,786
Finished goods	5,625		5,235
Total inventories	$	15,568	$	15,569

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Accumulated Other Comprehensive Loss (Tables)

6 Months Ended

Mar. 31, 2021

Equity [Abstract]

Schedule of Components of Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss are as follows:

	March 31, 2021		September 30, 2020
Foreign currency translation adjustment	$	(5,274)	$	(5,257)
Retirement plan liability adjustment, net of tax	(7,788)		(8,211)
Total accumulated other comprehensive loss	$	(13,062)	$	(13,468)

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Leases (Tables)

6 Months Ended

Mar. 31, 2021

Leases [Abstract]

Schedule of Lease Cost Components, Supplemental Cash Flow and Other information, and Weighted-Average Remaining Lease Term Schedules

The components of lease expense were as follows:

	Three Months Ended March 31,				Six Months Ended March 31,
	2021		2020		2021		2020
Finance lease expense:
Amortization of right-of use assets on finance leases	$	13	$	14	$	27	$	27
Interest on lease liabilities	1		1		2		3
Operating lease expense:	540		543		1,092		1,079
Variable lease cost:	35		39		69		79
Total lease expense	$	589	$	597	$	1,190	$	1,188

Supplemental cash flow and other information related to leases were as follows:

	March 31, 2021		March 31, 2020
Other Information
Cash paid for amounts included in measurement of liabilities:
Operating cash flows from operating leases	$	1,097	$	1,086
Operating cash flows from finance leases	2		3
Financing cash flows from finance leases	29		28
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	43		278

	March 31, 2021		September 30, 2020
Weighted-average remaining lease term (years):
Finance leases	1.2		1.6
Operating leases	14.8		15.2
Weighted-average discount rate:
Finance leases	4.4	%	4.8	%
Operating leases	5.9	%	5.9	%

Schedule of Supplemental Balance Sheet Information Schedule

The following table presents the impact of leasing on the consolidated condensed balance sheet.

	Classification in the consolidated condensed balance sheets	March 31, 2021		September 30, 2020
Assets:
Finance lease assets	Property, plant and equipment, net	$	62	$	89
Operating lease assets	Operating lease right-of-use assets, net	16,405		17,021
Total lease assets		$	16,467	$	17,110
Current liabilities:
Finance lease liabilities	Current maturities of long-term debt	$	41	$	58
Operating lease liabilities	Short-term operating lease liabilities	796		991
Non-current liabilities:
Finance lease liabilities	Long-term debt, net of current maturities	10		22
Operating lease liabilities	Long-term operating lease liabilities, net of short-term	15,825		16,188
Total lease liabilities		$	16,672	$	17,259

Schedule of Maturities of Finance Lease Liabilities by Fiscal Year Schedule

Future minimum lease under non-cancellable leases at March 31, 2021 were as follows:

	Finance Leases		Operating Leases
Year ending September 30,
2021 (excluding the six months ended March 31, 2021)	$	27	$	852
2022	21		1,696
2023	4		1,633
2024	—		1,647
2025	—		1,644
Thereafter	—		17,532
Total lease payments	$	52	$	25,004
Less: Imputed interest	(1)		(8,383)
Present value of lease liabilities	$	51	$	16,621

Schedule of Maturities of Operating Lease Liabilities by Fiscal Year Schedule

Future minimum lease under non-cancellable leases at March 31, 2021 were as follows:

	Finance Leases		Operating Leases
Year ending September 30,
2021 (excluding the six months ended March 31, 2021)	$	27	$	852
2022	21		1,696
2023	4		1,633
2024	—		1,647
2025	—		1,644
Thereafter	—		17,532
Total lease payments	$	52	$	25,004
Less: Imputed interest	(1)		(8,383)
Present value of lease liabilities	$	51	$	16,621

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Debt (Tables)

6 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Schedule of Debt

Debt consists of: 

	March 31, 2021		September 30, 2020
Revolving credit agreement	$	7,742	$	12,870
Foreign subsidiary borrowings	6,623		5,759
Finance lease obligations	51		80
Other, net of unamortized debt issuance costs $(37) and $(20), respectively	5,651		5,911
Total debt	20,067		24,620
Less – current maturities	(17,525)		(20,014)
Total long-term debt	$	2,542	$	4,606

Schedule of Foreign Debt

Foreign debt consists of:

	March 31, 2021		September 30, 2020
Term loan	$	2,661	$	2,670
Short-term borrowings	2,147		2,620
Factor	1,815		469
Total debt	$	6,623	$	5,759
Less – current maturities	(4,743)		(3,544)
Total long-term debt	$	1,880	$	2,215
Receivables pledged as collateral	$	2,343	$	1,859

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Retirement Benefit Plans (Tables)

6 Months Ended

Mar. 31, 2021

Retirement Benefits [Abstract]

Schedule of Components of Net Periodic Benefit Cost

The components of net periodic benefit cost of the Company’s defined benefit plans are as follows:

	Three Months Ended March 31,				Six Months Ended March 31,
	2021		2020		2021		2020
Service cost	$	26	$	85	$	52	$	170
Interest cost	175		208		350		416
Expected return on plan assets	(355)		(363)		(711)		(727)
Amortization of net loss	211		188		423		376
Net periodic cost	$	57	$	118	$	114	$	235

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Revenue (Tables)

6 Months Ended

Mar. 31, 2021

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

The following table represents a breakout of total revenue by customer type:

	Three Months Ended March 31,				Six Months Ended March 31,
	2021		2020		2021		2020
Commercial revenue	$	9,247	$	12,497	$	20,000	$	22,688
Military revenue	15,619		18,040		29,944		34,056
Total	$	24,866	$	30,537	$	49,944	$	56,744

The following table represents revenue by the various components:

	Three Months Ended March 31,				Six Months Ended March 31,
Net Sales	2021		2020		2021		2020
Aerospace components for:
Fixed wing aircraft	$	10,176	$	14,065	$	19,966	$	25,400
Rotorcraft	7,872		6,813		15,603		13,661
Energy components for power generation units	5,102		3,417		11,565		6,074
Commercial product and other revenue	1,716		6,242		2,810		11,609
Total	$	24,866	$	30,537	$	49,944	$	56,744

The following table represents revenue by geographic region based on the Company's selling operation locations:

	Three Months Ended March 31,				Six Months Ended March 31,
Net Sales	2021		2020		2021		2020
North America	$	20,019	$	27,495	$	39,784	$	51,271
Europe	4,847		3,042		10,160		5,473
Total	$	24,866	$	30,537	$	49,944	$	56,744

Schedule of Contract Assets and Liabilities

The following table contains a roll forward of contract assets and contract liabilities for the period ended March 31, 2021:

Contract assets - Beginning balance, October 1, 2020	$	11,997
Additional revenue recognized over-time	30,428
Less amounts billed to the customers	(28,860)
Contract assets - Ending balance, March 31, 2021	$	13,565

Contract liabilities (included within Accrued liabilities) - Beginning balance, October 1, 2020	$	(636)
Payments received in advance of performance obligations	(186)
Performance obligations satisfied	754
Contract liabilities (included within Accrued liabilities) - Ending balance, March 31, 2021	$	(68)

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Commitments and Contingencies (Tables)

6 Months Ended

Mar. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Schedule of Insurance Recoveries Within Consolidated Condensed Financial Statements

The Company has business interruption insurance coverage, of which $546 of the amount received was reflected within the cost of goods sold line within the consolidated condensed statement of operations.

Balance sheet (Other receivables):
September 30, 2020		$	1,547
	Cash proceeds	(4,646)
	Capital expenditures (equipment)	2,495
	Other expenses	58
	Business interruption	546
March 31, 2021		$	—

The tables below reflect how the proceeds received impacted the consolidated condensed statements of operations for the six months ended March 31, 2021 and 2020, respectively.

	Six Months Ended March 31, 2021
	Balance without insurance proceeds		Insurance recoveries	Balance with insurance proceeds
Cost of goods sold	$	43,882	(604)	$	43,278
Gain on insurance proceeds received	$	—	(2,495)	$	(2,495)
Income (loss) before income tax (benefit) expense	$	(2,337)	(3,099)	$	762

	Six Months Ended March 31, 2020
	Balance without insurance proceeds		Insurance recoveries	Balance with insurance proceeds
Cost of goods sold	$	49,430	(2,287)	$	47,143
Gain on insurance proceeds received	$	—	(1,000)	$	(1,000)
Income (loss) before income tax (benefit) expense	$	(1,502)	(3,287)	$	1,785

Schedule of Total Settlement Amount

The following table demonstrates the total settlement amount since December 26, 2018:

	Total Claim
Property & damage **	$	20,364
Extra expense & mitigation expense	4,404
Business interruption	2,932
	$	27,700

**$3,640 of total was directed to the landlord of the property for the restoration of the building as prescribed by the lease arrangement

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Summary of Significant Accounting Policies - Net Income (Loss) per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Net Income (loss)	$ (1,491)	$ 3,260	$ 1,502	$ 1,919
Weighted-average common shares outstanding (basic and diluted) (in shares)	5,777,000	5,679,000	5,735,000	5,645,000
Effect of dilutive securities:
Weighted-average common shares outstanding (basic and diluted) (in shares)	5,777,000	5,770,000	5,932,000	5,748,000
Net income (loss) per share
Net income (loss) per share – basic (in dollars per share)	$ (0.26)	$ 0.57	$ 0.26	$ 0.34
Net income (loss) per share – diluted (in dollars per share)	$ (0.26)	$ 0.57	$ 0.25	$ 0.33
Anti-dilutive weighted-average common shares excluded from calculation of diluted earnings per share (in shares)	411,000	215,000	217,000	147,000
Restricted shares
Effect of dilutive securities:
Restricted and performance shares (in shares)	0	89,000	144,000	102,000
Net income (loss) per share
Anti-dilutive weighted-average common shares excluded from calculation of diluted earnings per share (in shares)				0
Performance shares
Effect of dilutive securities:
Restricted and performance shares (in shares)	0	2,000	53,000	1,000

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Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Sep. 30, 2020
Inventory Disclosure [Abstract]
Raw materials and supplies	$ 6,379	$ 6,548
Work-in-process	3,564	3,786
Finished goods	5,625	5,235
Total inventories	$ 15,568	$ 15,569

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Inventories - Narrative (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Sep. 30, 2020
Inventory Disclosure [Abstract]
Percentage of inventories determined using LIFO method	49.00%	47.00%
Additional amount that would have been reported in inventory if FIFO method had been used	$ 8,621	$ 8,286

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Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019
Accumulated Other Comprehensive Income (Loss) [Line Items]
Total accumulated other comprehensive loss	$ 47,708	$ 49,141	$ 45,523	$ 38,690	$ 35,245	$ 36,054
Foreign currency translation adjustment
Accumulated Other Comprehensive Income (Loss) [Line Items]
Total accumulated other comprehensive loss	(5,274)		(5,257)
Retirement plan liability adjustment, net of tax
Accumulated Other Comprehensive Income (Loss) [Line Items]
Total accumulated other comprehensive loss	(7,788)		(8,211)
Total accumulated other comprehensive loss
Accumulated Other Comprehensive Income (Loss) [Line Items]
Total accumulated other comprehensive loss	$ (13,062)	$ (12,970)	$ (13,468)	$ (12,809)	$ (12,928)	$ (13,309)

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Leases - Lease Cost Components Schedule (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Finance lease expense:
Amortization of right-of use assets on finance leases	$ 13	$ 14	$ 27	$ 27
Interest on lease liabilities	1	1	2	3
Operating lease expense:	540	543	1,092	1,079
Variable lease cost:	35	39	69	79
Total lease expense	$ 589	$ 597	$ 1,190	$ 1,188

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Leases - Supplemental Balance Sheet Information Schedule (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Sep. 30, 2020
ASSETS
Property, plant and equipment, net	$ 62	$ 89
Operating lease right-of-use assets, net	16,405	17,021
Total lease assets	16,467	17,110
Current liabilities:
Current maturities of long-term debt	41	58
Short-term operating lease liabilities	796	991
Non-current liabilities:
Long-term debt, net of current maturities	10	22
Long-term operating lease liabilities, net of short-term	15,825	16,188
Total lease liabilities	$ 16,672	$ 17,259
Finance lease, asset, statement of financial position [Extensible List]	Property, plant and equipment, net	Property, plant and equipment, net
Current finance lease, liability, statement of financial position [Extensible List]	Current maturities of long-term debt	Current maturities of long-term debt
Noncurrent finance lease, liability, statement of financial position [Extensible List]	Total long-term debt	Total long-term debt

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Leases - Supplemental Cash Flow Information and Non-Cash Activity Schedule (Details) - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash paid for amounts included in measurement of liabilities:
Operating cash flows from operating leases	$ 1,097	$ 1,086
Operating cash flows from finance leases	2	3
Financing cash flows from finance leases	29	28
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	$ 43	$ 278

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Leases - Weighted-Average Remaining Lease Term and Discount Rate Schedule (Details)	Mar. 31, 2021	Sep. 30, 2020
Weighted-average remaining lease term (years):
Finance leases	1 year 2 months 12 days	1 year 7 months 6 days
Operating leases	14 years 9 months 18 days	15 years 2 months 12 days
Weighted-average discount rate:
Finance leases	4.40%	4.80%
Operating leases	5.90%	5.90%

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Leases - Maturities of Lease Liabilities by Fiscal Year Schedule (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Sep. 30, 2020
Finance Leases
2021 (excluding the six months ended March 31, 2021)	$ 27
2022	21
2023	4
2024	0
2025	0
Thereafter	0
Total lease payments	52
Less: Imputed interest	(1)
Present value of lease liabilities	51	$ 80
Operating Leases
2021 (excluding the six months ended March 31, 2021)	852
2022	1,696
2023	1,633
2024	1,647
2025	1,644
Thereafter	17,532
Total lease payments	25,004
Less: Imputed interest	(8,383)
Present value of lease liabilities	$ 16,621

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Debt - Schedule of Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Sep. 30, 2020
Debt Instrument [Line Items]
Finance lease obligations	$ 51	$ 80
Total debt	20,067	24,620
Less – current maturities	(17,525)	(20,014)
Total long-term debt	2,542	4,606
Unamortized debt issuance costs	(37)	(20)
Other, net of unamortized debt issuance costs $(37) and $(20), respectively
Debt Instrument [Line Items]
Long-term debt, gross	5,651	5,911
Revolving credit agreement | Revolving credit agreement
Debt Instrument [Line Items]
Long-term debt, gross	7,742	12,870
Foreign subsidiary borrowings
Debt Instrument [Line Items]
Long-term debt, gross	$ 6,623	$ 5,759

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Debt - Narrative (Details)			6 Months Ended	12 Months Ended
	Feb. 19, 2021 USD ($)	Apr. 10, 2020 USD ($)	Mar. 31, 2021 USD ($) invoice	Sep. 30, 2020 USD ($)	Dec. 17, 2018 USD ($)	Aug. 08, 2018 USD ($)
Line of Credit Facility [Line Items]
Number of customer invoices factored | invoice			1
Foreign subsidiary borrowings
Line of Credit Facility [Line Items]
Receivables pledged as collateral			$ 2,343,000	$ 1,859,000
Remaining debt balance			$ 6,623,000	$ 5,759,000
Foreign subsidiary borrowings | Euribor | Minimum
Line of Credit Facility [Line Items]
Euribor variable interest rates			1.00%
Foreign subsidiary borrowings | Euribor | Maximum
Line of Credit Facility [Line Items]
Euribor variable interest rates			4.20%
Revolving credit agreement
Line of Credit Facility [Line Items]
Percentage of stock pledged on credit agreement	66.67%
Credit Agreement | Revolving credit agreement
Line of Credit Facility [Line Items]
Fixed charge coverage ratio			1.1
Percent availability under revolving commitment			10.00%	12.50%
Debt instrument, covenant combined commitment percentage			10.00%
Debt instrument, covenant combined borrowing base, percentage			10.00%
Debt instrument, covenant combined borrowing base, amount			$ 2,000,000
Receivables pledged as collateral			26,619,000	$ 26,964,000
Credit Agreement | Revolving credit agreement | Revolving credit agreement
Line of Credit Facility [Line Items]
Revolving credit facility, maximum borrowing capacity	$ 28,000,000		35,000,000	35,000,000
Accordion feature, increase limit	10,000,000
Remaining borrowing capacity			$ 18,067,000	$ 13,284,000
Weighted average interest rate, revolving credit facility			1.87%
Commitment fee percentage			0.25%	0.25%
Debt issuance costs incurred			$ 45,000
Remaining unamortized amount			86,000
Revolving line of credit, accumulated amortization of debt issuance costs			$ 2,000	$ 205,000
Credit Agreement | Revolving credit agreement | Revolving credit agreement | LIBOR
Line of Credit Facility [Line Items]
Basis spread on LIBOR			1.75%
2018 Credit Agreement | Revolving credit agreement | Revolving credit agreement
Line of Credit Facility [Line Items]
Revolving credit facility, maximum borrowing capacity						$ 30,000,000
Weighted average interest rate, revolving credit facility				1.70%
2018 Credit Agreement | Revolving credit agreement | Revolving credit agreement | LIBOR
Line of Credit Facility [Line Items]
Basis spread on LIBOR				1.50%
Fifth Amendment to Credit Agreement and First Amendment to Export Credit Agreement | Revolving credit agreement | Revolving credit agreement
Line of Credit Facility [Line Items]
Revolving credit facility, maximum borrowing capacity	35,000,000
Export Credit Facility | Revolving credit agreement | Revolving credit agreement
Line of Credit Facility [Line Items]
Revolving credit facility, maximum borrowing capacity	$ 7,000,000				$ 5,000,000
Weighted average interest rate, revolving credit facility			1.40%	1.20%
Export Credit Facility | Revolving credit agreement | Revolving credit agreement | LIBOR
Line of Credit Facility [Line Items]
Basis spread on LIBOR			1.25%	1.00%
PPP Loan | Unsecured Promissory Note
Line of Credit Facility [Line Items]
Face amount		$ 5,025,000
Debt instrument, term		2 years
Interest rate		0.98%
Deferral term		6 months
PPP Loan | Unsecured Promissory Note | JPMorgan Chase Bank, N.A.
Line of Credit Facility [Line Items]
Repayment debt				$ 261,000
Remaining debt balance			$ 4,764,000	$ 4,764,000

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Debt - Schedule of Foreign Subsidiary Borrowings (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Sep. 30, 2020
Line of Credit Facility [Line Items]
Less – current maturities	$ (9,783)	$ (7,144)
Total long-term debt	2,542	4,606
Foreign subsidiary borrowings
Line of Credit Facility [Line Items]
Total debt	6,623	5,759
Less – current maturities	(4,743)	(3,544)
Total long-term debt	1,880	2,215
Receivables pledged as collateral	2,343	1,859
Term loan | Foreign subsidiary borrowings
Line of Credit Facility [Line Items]
Total debt	2,661	2,670
Short-term borrowings | Foreign subsidiary borrowings
Line of Credit Facility [Line Items]
Total debt	2,147	2,620
Factor | Foreign subsidiary borrowings
Line of Credit Facility [Line Items]
Total debt	$ 1,815	$ 469

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Income Taxes (Details)	6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Income Tax Disclosure [Abstract]
Effective tax rate, percent	(97.00%)	(8.00%)

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Retirement Benefit Plans - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Retirement Benefits [Abstract]
Service cost	$ 26	$ 85	$ 52	$ 170
Interest cost	175	208	350	416
Expected return on plan assets	(355)	(363)	(711)	(727)
Amortization of net loss	211	188	423	376
Net periodic cost	$ 57	$ 118	$ 114	$ 235

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Retirement Benefit Plans - Narrative (Details) - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Retirement Benefits [Abstract]
Contributions amount in defined benefit pension plans	$ 56	$ 244
Additional cash contributions planned for fiscal 2021	$ 141

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Stock-Based Compensation (Details) - 2016 Plan $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2021 USD ($) shares	Mar. 31, 2020 USD ($)	Mar. 31, 2021 USD ($) tranche $ / shares shares	Mar. 31, 2020 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate number of shares that may be awarded (in shares)	1,196,000		1,196,000
Exercise period for shares awarded under plan			10 years
Outstanding share awards that may be awarded (in shares)	442,000		442,000
Outstanding share awards earned and issued at greater than the target number of shares			200.00%
Outstanding share awards earned and issued at greater than the target number of shares next fiscal year			150.00%
Share-based compensation expense (benefit) | $	$ 150	$ 70	$ 293	$ 225
Total unrecognized compensation cost related to performance and restricted shares | $	$ 778		$ 778
Period of recognized compensation cost (in years)			1 year 6 months
Key employees
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of tranches in award | tranche			2
Performance shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance period (in years)			3 years
Performance shares | Key employees
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted in period (in shares)			71,000
Performance shares | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common shares earned pursuant to award (in shares)			0
Performance shares | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common shares earned as percentage of initial target number shares awarded			200.00%
Common shares earned as percentage of initial target number shares awarded next fiscal year			150.00%
Restricted shares | Key employees
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted in period (in shares)			49,000
Restricted shares | Non-employee directors
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)			1 year
Shares granted in period (in shares)			30,000
Shares granted in period, grant date fair value (in dollars per share) | $ / shares			$ 9.08
Vested in period (in shares)			57,000
Restricted shares | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)			1 year
Restricted shares | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)			3 years
Performance and Restricted Shares | Key employees
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)			3 years
Shares granted in period (in shares)			120,000
Shares granted in period, grant date fair value (in dollars per share) | $ / shares			$ 3.74

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Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Disaggregation of Revenue [Line Items]
Revenue	$ 24,866	$ 30,537	$ 49,944	$ 56,744
Revenue from Contract with Customer | Transferred over Time
Disaggregation of Revenue [Line Items]
Concentration risk			61.00%	63.00%
North America
Disaggregation of Revenue [Line Items]
Revenue	20,019	27,495	$ 39,784	$ 51,271
Europe
Disaggregation of Revenue [Line Items]
Revenue	4,847	3,042	10,160	5,473
Fixed wing aircraft
Disaggregation of Revenue [Line Items]
Revenue	10,176	14,065	19,966	25,400
Rotorcraft
Disaggregation of Revenue [Line Items]
Revenue	7,872	6,813	15,603	13,661
Energy components for power generation units
Disaggregation of Revenue [Line Items]
Revenue	5,102	3,417	11,565	6,074
Commercial product and other revenue
Disaggregation of Revenue [Line Items]
Revenue	1,716	6,242	2,810	11,609
Commercial revenue
Disaggregation of Revenue [Line Items]
Revenue	9,247	12,497	20,000	22,688
Military revenue
Disaggregation of Revenue [Line Items]
Revenue	$ 15,619	$ 18,040	$ 29,944	$ 34,056

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Revenue - Contract Balances (Details) - USD ($)	6 Months Ended	12 Months Ended
	Mar. 31, 2021	Sep. 30, 2020
Change In Contract With Customer, Assets [Roll Forward]
Contract assets - Beginning balance	$ 11,997,000
Additional revenue recognized over-time	30,428,000
Less amounts billed to the customers	(28,860,000)
Contract assets - Ending balance	13,565,000	$ 11,997,000
Change In Contract With Customer, Liability [Roll Forward]
Contract liabilities (included within Accrued liabilities) - Beginning balance	(636,000)
Payments received in advance of performance obligations	(186,000)
Performance obligations satisfied	754,000
Contract liabilities (included within Accrued liabilities) - Ending balance	(68,000)	(636,000)
Impairment loss on contract assets	$ 0	$ 0

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Revenue - Performance Obligation (Details) $ in Thousands	Mar. 31, 2021 USD ($)
Revenue from Contract with Customer [Abstract]
Remaining performance obligation	$ 82,305

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Commitments and Contingencies - Narrative (Details) $ in Thousands		1 Months Ended		3 Months Ended		6 Months Ended
	Mar. 29, 2021 USD ($)	Jan. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Mar. 31, 2021 USD ($) press	Mar. 31, 2020 USD ($)	Mar. 31, 2021 USD ($) press	Mar. 31, 2020 USD ($)
Loss Contingencies [Line Items]
Insurance proceeds received						$ 4,101	$ 4,500
Proceeds from loss contingency receivable		$ 648				4,646
Gain on insurance proceeds received				$ 0	$ 1,000	2,495	1,000
Recoverable amounts of business interruption expenses						546
Quality Aluminum Forge, LLC Manufacturing Facility Fire
Loss Contingencies [Line Items]
Insurance proceeds received			$ 3,148
Proceeds from loss contingency receivable						4,646
Gain on insurance proceeds received						2,495	1,000
Recoverable amounts of business interruption expenses						546
Quality Aluminum Forge, LLC Manufacturing Facility Fire | Income (loss) before income tax (benefit) expense
Loss Contingencies [Line Items]
Gain on insurance proceeds received						$ 3,099	$ 3,287
Quality Aluminum Forge, LLC Manufacturing Facility Fire | Damage from Fire, Explosion or Other Hazard
Loss Contingencies [Line Items]
Number of presses to be restored | press				2		2
Number of presses damaged | press				6		6
Class Action Suit in Superior Court of California, Orange County - Violation of Wage-and-hour Laws
Loss Contingencies [Line Items]
Loss contingency paid	$ 315

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Commitments and Contingencies - Insurance Receivable Balance Sheet Rollforward (Details) - USD ($) $ in Thousands	1 Months Ended	6 Months Ended
	Jan. 31, 2021	Mar. 31, 2021
Insurance Recoveries Within Consolidated Condensed Financial Statements [Roll Forward]
Cash proceeds	$ (648)	$ (4,646)
Business interruption		546
Insurance recoveries
Insurance Recoveries Within Consolidated Condensed Financial Statements [Roll Forward]
Other receivable, beginning balance		1,547
Cash proceeds		(4,646)
Other expenses		58
Business interruption		546
Other receivable, ending balance		0
Insurance recoveries | Equipment
Insurance Recoveries Within Consolidated Condensed Financial Statements [Roll Forward]
Capital expenditures (equipment)		$ 2,495

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Commitments and Contingencies - Insurance Proceeds Impact on Consolidated Condensed Statements of Operation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Loss Contingencies [Line Items]
Gain on insurance proceeds received	$ 0	$ (1,000)	$ (2,495)	$ (1,000)
Cost of goods sold	22,123	24,260	43,278	47,143
Income (loss) before income tax (benefit) expense	$ (1,326)	$ 3,221	762	1,785
Balance without insurance proceeds
Loss Contingencies [Line Items]
Cost of goods sold, balance without insurance proceeds			43,882	49,430
Gain on insurance proceeds received			0	0
Income (loss) before income tax (benefit) expense, balance without insurance proceeds			(2,337)	(1,502)
Insurance recoveries
Loss Contingencies [Line Items]
Gain on insurance proceeds received			(2,495)	(1,000)
Insurance recoveries | Cost of goods sold
Loss Contingencies [Line Items]
Gain on insurance proceeds received			(604)	(2,287)
Insurance recoveries | Income (loss) before income tax (benefit) expense
Loss Contingencies [Line Items]
Gain on insurance proceeds received			$ (3,099)	$ (3,287)

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Commitment and Contingencies - Total Settlement (Details) $ in Thousands	27 Months Ended
	Mar. 31, 2021 USD ($)
Loss Contingencies [Line Items]
Proceeds directed to landlord	$ 3,640
Insurance recoveries | Insurance Settlement
Loss Contingencies [Line Items]
Property and damage	20,364
Extra expense & mitigation expense	4,404
Business interruption	2,932
Total settlement amount	$ 27,700