10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended December 31, 2006

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND 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 and 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 þ No o

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

                                     Large accelerated filer o             Accelerated filer o            Non-accelerated filer þ

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

The number of the Registrant’s Common Shares outstanding at December 31, 2006 was 5,229,891.

TABLE OF CONTENTS

Part I. Financial Information
	Item 1. Financial Statements
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosures About Market Risk
	Item 4. Controls and Procedures
Part II. Other Information
	Item 1. Legal Proceedings
	Item 2. Change in Securities and Use of Proceeds
	Item 3. Defaults upon Senior Securities
	Item 4. Submission of Matters to a Vote of Security Holders
	Item 5. Other Information
	Item 6. Exhibits
SIGNATURES
EX-4.23
EX-9.3
EX-10.17
EX-10.18
EX-31.1
EX-31.2
EX-32.1
EX-32.2

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
	December 31,
	2006			2005
Net sales	$	21,453		$	19,820
Operating expenses and other:
Cost of goods sold		17,671			18,011
Selling, general and administrative expenses		3,479			3,270
Total operating expenses		21,150			21,281
Operating income (loss)		303			(1,461	)
Interest income		(47	)		(8	)
Interest expense		19			41
Foreign currency exchange loss (gain), net		235			(24	)
Other income, net		(2,112	)		(17	)
Income (loss) before income tax provision		2,208			(1,453	)
Income tax provision		31			13
Net income (loss)	$	2,177		$	(1,466	)
Net income (loss) per share (basic)	$	0.42		$	(0.28	)
Net income (loss) per share (diluted)	$	0.42		$	(0.28	)
Weighted-average number of common shares (basic)		5,226			5,222
Weighted-average number of common shares (diluted)		5,238			5,222

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)

	December 31,			September 30,
	2006			2006
	(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	3,813		$	4,744
Receivables, net		18,417			18,652
Inventories		9,594			8,052
Refundable income taxes		16			188
Prepaid expenses and other current assets		658			601
Total current assets		32,498			32,237
Property, plant and equipment, net		14,966			14,059
Other assets		2,454			2,479
Total assets	$	49,918		$	48,775
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	32		$	52
Accounts payable		10,808			10,454
Accrued liabilities		6,172			6,720
Total current liabilities		17,012			17,226
Long-term debt, net of current maturities		534			427
Other long-term liabilities		3,926			5,939
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 5,230 and 5,222 shares at December 31, 2006 and September 30, 2006, respectively		5,230			5,222
Additional paid-in capital		6,353			6,323
Retained earnings		25,277			23,100
Accumulated other comprehensive loss		(8,414	)		(9,462	)
Total shareholders’ equity		28,446			25,183
Total liabilities and shareholders’ equity	$	49,918		$	48,775

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)

	Three Months Ended
	December 31,
	2006			2005
Cash flows from operating activities:
Net income (loss)	$	2,177		$	(1,466	)
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation and amortization		551			811
Gain on disposal of assets		(23	)		—
Proceeds from exercise of stock options and share transactions under employee stock plan		36			36
Changes in operating assets and liabilities:
Receivables		374			3,036
Inventories		(1,523	)		(1,788	)
Refundable income taxes		188			(4	)
Prepaid expenses and other current assets		(46	)		(119	)
Other assets		24			65
Accounts payable		293			500
Accrued liabilities		(608	)		(180	)
Other long-term liabilities		(2,202	)		(13	)
Net cash provided by (used for) operating activities		(759	)		878
Cash flows from investing activities:
Capital expenditures		(548	)		(214	)
Proceeds from disposal of assets		33			—
Acquisition of business, net of cash acquired		—			(427	)
Other		30			(25	)
Net cash used for investing activities		(485	)		(666	)
Cash flows from financing activities:
Proceeds from debt purchase agreement		—			5,600
Repayments of debt purchase agreement		—			(7,136	)
Proceeds from revolving credit agreement		5,848			1,482
Repayments of revolving credit agreement		(5,741	)		(791	)
Proceeds from other debt		84			—
Repayments of other debt		(107	)		—
Net cash provided by (used for) financing activities		84			(845	)
Decrease in cash and cash equivalents		(1,160	)		(633	)
Cash and cash equivalents at the beginning of the period		4,744			884
Effect of exchange rate changes on cash and cash equivalents		229			—
Cash and cash equivalents at the end of the period	$	3,813		$	251
Supplemental disclosure of cash flow information:
Cash paid for interest	$	(20	)	$	(49	)
Cash recovered from (paid for) income taxes, net		176			(531	)

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 unaudited consolidated condensed financial statements included herein include the accounts of SIFCO Industries, Inc. and its wholly-owned subsidiaries (the “Company”). All significant intercompany accounts and transactions have been eliminated. The U.S. dollar is the functional currency for all of the Company’s U.S. operations and, effective October 1, 2006, the euro is the functional currency of the Company’s Irish subsidiary. Prior to the sale in 2006 of the large aerospace portion of the Irish subsidiary’s turbine engine component repair business, a substantial majority of the transactions of the Company’s Irish subsidiary were denominated in U.S. dollars and, therefore, its functional currency was the U.S. dollar. In the opinion of management, all adjustments, which include only normal recurring adjustments necessary for a fair presentation of the results of operations, financial position, and cash flows for the periods presented, have been included.

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 2006 Annual Report on Form 10-K. The results of operations for any interim period are not necessarily indicative of the results to be expected for other interim periods or the full year. Certain prior period amounts have been reclassified in order to conform to current period classifications.

B. Stock-Based Compensation

The Company awarded stock options under its shareholder approved 1995 Stock Option Plan (“1995 Plan”) and 1998 Long-term Incentive Plan (“1998 Plan”). No further options may be awarded under either the 1995 Plan or the 1998 Plan. Option exercise price is not less than fair market value on date of grant and options are exercisable no later than ten years from date of grant. Options issued under all plans generally vest at a rate of 25% per year.

Aggregate option activity is as follows:

						Weighted-
				Weighted-		Average
				Average		Remaining		Aggregate
	Number of			Exercise		Contractual		Intrinsic
	Options			Price		Term (Years)		Value
September 30, 2006		261,000		$	6.55
Options granted		—			—
Options exercised		(8,000	)	$	3.56
Options canceled		(31,500	)	$	5.94
December 31, 2006		221,500		$	6.94		4.9	$	(347	)
Vested or expected to vest at December 31, 2006		218,000		$	6.79		4.9	$	(352	)
Exercisable at December 31, 2006		175,250		$	7.36		4.0	$	(415	)

As of December 31, 2006, there was $41 of total unrecognized compensation cost related to the unvested stock options granted under the Company’s stock option plans. That cost is expected to be recognized over a weighted average period of 1.4 years.

Under the Company’s restricted stock program, Common Shares of the Company may be granted at no cost to certain employees. These shares vest over either a four or five-year period, with either 25% or 20% vesting each year, respectively. Under the terms of the program, participants will not be entitled to dividends nor voting rights until the shares have vested. Upon issuance of Common Shares under the program, unearned compensation equivalent to the market value of the Common Shares at the date of award is charged to shareholders’ equity and subsequently amortized to expense over the vesting periods. All such compensation expense was fully amortized and recognized as of September 30, 2006. Compensation expense related to amortization of unearned compensation was $17 in the three months ended December 31, 2005.

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2. Inventories

Inventories consist of:

	December 31,		September 30,
	2006		2006
Raw materials and supplies	$	4,555	$	3,220
Work-in-process		3,321		3,222
Finished goods		1,718		1,610
Total inventories	$	9,594	$	8,052

Inventories are stated at the lower of cost or market. Cost is determined using the last-in, first-out (“LIFO”) method for 67% and 59% of the Company’s inventories at December 31, 2006 and September 30, 2006, respectively. Cost is determined using the specific identification method for approximately 10% and 12% of the Company’s inventories at December 31, 2006 and September 30, 2006, respectively. The first-in, first-out (“FIFO”) method is used for the remainder of the inventories. If the FIFO method had been used for the inventories for which cost is determined using the LIFO method, inventories would have been $6,979 and $6,860 higher than reported at December 31, 2006 and September 30, 2006, respectively.

3. Comprehensive Income (Loss) and Accumulated Other Comprehensive Loss

Total comprehensive income (loss) is as follows:

	Three Months Ended
	December 31,
	2006		2005
Net income (loss)	$	2,177	$	(1,466	)
Foreign currency translation adjustment		1,048		(33	)
Currency exchange contract adjustment		—		(67	)
Total comprehensive income (loss)	$	3,225	$	(1,566	)

The components of accumulated other comprehensive loss are as follows:

	December 31,			September 30,
	2006			2006
Foreign currency translation adjustment	$	(5,595	)	$	(6,643	)
Minimum pension liability adjustment		(2,819	)		(2,819	)
Total accumulated other comprehensive loss	$	(8,414	)	$	(9,462	)

4. Long-Term Debt

In February 2007, the Company entered into an agreement with its bank to extend the maturity date of its revolving credit agreement to April 1, 2008. The Company was in compliance with all applicable covenants as of December 31, 2006.

5. Business Segments

The Company identifies reportable segments based upon distinct products manufactured and services provided. The Aerospace Component Manufacturing Group consists of the production, heat treatment and some machining of forgings in various alloys utilizing a variety of processes for application in the aerospace industry. The Turbine Component Services and Repair Group (“Repair Group”) consists primarily of the repair and remanufacture of aerospace and industrial turbine engine components. The Repair Group is also involved in precision component machining and high-temperature resistant industrial coating applications for turbine engine components. The Applied Surface Concepts Group is a provider of specialized selective electrochemical metal finishing processes and services used to apply metal coatings to a selective area of a component. The Company’s reportable segments are separately managed.

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Segment information is as follows:

	Three Months Ended
	December 31,
	2006			2005
Net sales:
Aerospace Component Manufacturing Group	$	12,992		$	8,196
Turbine Component Services and Repair Group		5,046			8,916
Applied Surface Concepts Group		3,415			2,708
Consolidated net sales	$	21,453		$	19,820
Operating income (loss):
Aerospace Component Manufacturing Group	$	1,649		$	92
Turbine Component Services and Repair Group		(1,441	)		(950	)
Applied Surface Concepts Group		383			(66	)
Corporate unallocated expenses		(288	)		(537	)
Consolidated operating income (loss)		303			(1,461	)
Interest (income) expense, net		(28	)		33
Foreign currency exchange loss (gain), net		235			(24	)
Other income, net		(2,112	)		(17	)
Consolidated income (loss) before income tax Provision	$	2,208		$	(1,453	)

6. Retirement Benefit Plans

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

	Three Months Ended
	December 31,
	2006			2005
Service cost	$	70		$	230
Interest cost		252			365
Expected return on plan assets		(302	)		(392	)
Amortization of prior service cost		33			33
Amortization of net loss		29			76
Net periodic benefit cost	$	82		$	312

Through December 31, 2006, the Company has made $411 of contributions to its defined benefit pension plans. The Company anticipates contributing an additional $721 to fund its defined benefit pension plans during the balance of fiscal 2007, resulting in total projected contributions of $1,132 in fiscal 2007.

7. Government Grants

The Company receives grants from certain government entities as an incentive to invest in facilities, research and employees. The Company has historically elected to treat capital and employment grants as a contingent obligation and does not commence amortizing such grants into income until such time as it is more certain that the Company will not be required to repay a portion of these grants. Capital grants are amortized into income over the estimated useful lives of the related assets. Employment grants are amortized into income over five years.

Certain Company grants that were subject to repayment expired on December 31, 2006. Therefore, the Company will not be required to repay such grants. The related contingent obligation was treated as deferred grant revenue and recognized as income in accordance with the above described grant amortization method. Accordingly, the Company recognized grant income of approximately $2,100 in other income during the three months ended December 31, 2006. The unamortized portion of deferred grant revenue recorded in other long-term liabilities at December 31, 2006 and September 30, 2006 was $402 and $2,423, respectively.

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Prior to expiration, grants may be repayable in certain circumstances, principally upon the sale of related assets, or discontinuation or reduction of operations. The contingent liability for such potential repayments was $71 and $2,061 at December 31, 2006 and September 30, 2006, respectively.

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) future business environment, including capital and consumer spending; (2) competitive factors, including the ability to replace business which may be lost due to increased direct involvement by the turbine engine manufacturers in turbine component service and repair markets; (3) successful procurement of certain repair materials and new repair process licenses from turbine engine manufacturers and/or the Federal Aviation Administration; (4) fluctuating foreign currency (primarily the euro) exchange rates; (5) metals and commodities price increases and the Company’s ability to recover such price increases; (6) successful development and market introductions of new products, including advanced coating technologies and the continued development of industrial turbine repair processes; (7) regressive pricing pressures on the Company’s products and services, with productivity improvements as the primary means to maintain margins; (8) success with the further development of strategic alliances with certain turbine engine manufacturers for turbine component repair services; (9) the impact on business conditions, and on the aerospace industry in particular, of the global terrorism threat; (10) successful replacement of declining demand for repair services for turboprop engine components with component repair services for small turbofan engines utilized in the business and regional aircraft markets; (11) continued reliance on several major customers for revenues; (12) the Company’s ability to continue to have access to its revolving credit facility, including the Company’s ability to (i) continue to comply with the terms of its credit agreements, including financial covenants, (ii) continue to enter into amendments to its credit agreement containing financial covenants, which it and its bank lender find mutually acceptable, or (iii) continue to obtain waivers from its bank lender with respect to its compliance with the covenants contained in its credit agreement; (13) the impact of changes in defined benefit pension plan actuarial assumptions and legislation on future contributions; and (14) stable governments, business conditions, laws, regulations and taxes in economies where business is conducted.

SIFCO Industries, Inc. and its subsidiaries engage in the production and sale of a variety of metalworking processes, services and products produced primarily to the specific design requirements of its customers. The processes and services include forging, heat-treating, coating, welding, machining and selective electrochemical finishing. The products include forgings, machined forged parts and other machined metal parts, remanufactured component parts for turbine engines, and selective electrochemical finishing solutions and equipment. The Company endeavors to plan and evaluate its businesses’ 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, (iii) the projected maintenance, repair and overhaul schedules for industrial gas turbine engines, and (iv) anticipated exploration and production activities relative to oil and gas products, etc.

A. Results of Operations

Three Months Ended December 31, 2006 Compared with Three Months Ended December 31, 2005

Net sales in the first quarter of fiscal 2007 increased 8.2% to $21.5 million, compared with $19.8 million in the comparable period in fiscal 2006. Net income in the first quarter of fiscal 2007 was $2.2 million, compared with a net loss of $1.5 million in the comparable period in fiscal 2006. Included in the $2.2 million of net income in the first quarter of fiscal 2007 was $2.1 million of grant income related the expiration of certain grants as explained more fully in Note 7 to the Unaudited Consolidated Condensed Financial Statements.

Aerospace Component Manufacturing Group (“ACM Group”)

Net sales in the first quarter of fiscal 2007 increased 58.5% to $13.0 million, compared with $8.2 million in the comparable period of fiscal 2006. For purposes of the following discussion, the ACM Group considers aircraft that can accommodate less than 100 passengers to be small aircraft and those that can accommodate 100 or more passengers to be large aircraft. Net

8

sales of airframe components for small aircraft were $6.7 million in the first quarter of fiscal 2007, compared with $3.5 million in the first quarter of fiscal 2006. Net sales of turbine engine components for small aircraft, which consist primarily of business aircraft and regional commercial jets, as well as military transport and surveillance aircraft, increased $1.0 million to $3.8 million in the first quarter of fiscal 2007, compared with $2.8 million in the comparable period in fiscal 2006. Net sales of airframe components for large aircraft increased $0.7 million to $1.5 million in the first quarter of fiscal 2007, compared with $0.8 million in the comparable period in fiscal 2006. Net sales of turbine engine components for large aircraft decreased $0.4 million to $0.3 million in the first quarter of fiscal 2007, compared with $0.7 million in the comparable period in fiscal 2006. Other product and non-product sales were $0.7 million and $0.5 million in the first quarters of fiscal 2007 and 2006, respectively.

The ACM Group’s airframe and turbine engine component products have both military and commercial applications. Net sales of airframe and turbine engine components that solely have military applications were $5.6 million in the first quarter of fiscal 2007, compared with $2.8 million in the comparable period in fiscal 2006. This increase is attributable in part to increased military spending due to ongoing wartime demand such as for additional military helicopters and related replacement components.

During the first quarter of fiscal 2007, the ACM Group’s selling, general and administrative expenses increased $0.2 million to $0.9 million, or 6.7% of net sales, compared with $0.6 million, or 7.9% of net sales, in the comparable fiscal 2006 period. The $0.2 million increase in selling, general and administrative expenses in the first quarter of fiscal 2007 was principally due to increases in the ACM Group’s compensation, including incentive compensation, variable selling costs and an increase in the reserve for bad debts. The increases in compensation ($0.1 million) and variable selling ($0.1 million) expenses were principally due to the significant increase in net sales and operating income during the first quarter of fiscal 2007, compared with the same period in fiscal 2006.

The ACM Group’s operating income in the first quarter of fiscal 2007 was $1.6 million, compared with $0.1 million in the same period in fiscal 2006. Operating results improved principally due to the positive impact on margins of the significantly higher production and net sales volumes in the first quarter of fiscal 2007 compared with the same period in fiscal 2006. In addition, there was a $0.2 million reduction in the LIFO provision in the first quarter of fiscal 2007 compared to the same period in fiscal 2006.

The ACM Group’s backlog as of December 31, 2006 was $73.2 million, compared with $65.7 million as of September 30, 2006. At December 31, 2006, $56.7 million of the total backlog was scheduled for delivery over the next twelve months and $0.8 million was on hold. All orders are subject to modification or cancellation by the customer with limited charges. The ACM Group believes that the backlog may not be indicative of actual sales for any succeeding period.

Turbine Component Services and Repair Group (“Repair Group”)

Net sales in the first quarter of fiscal 2007 decreased 43.4% to $5.0 million, compared with $8.9 million in the comparable fiscal 2006 period. Net sales of the large aerospace portion of the turbine engine component repair business that was sold during the third quarter of fiscal 2006, which includes component repair services and the sale of related replacement parts, were $4.4 million in the first quarter of fiscal 2006. The Repair Group’s remaining net sales in the first quarter of fiscal 2007, which includes (i) component manufacturing, consisting of precision component machining and industrial coating, and (ii) component repair services for small aerospace turbine engines and industrial turbine engines, increased 10.8% to $5.0 million, compared with $4.6 million in the comparable fiscal 2006 period. Demand for component repairs for small aerospace turbine engines and for component manufacturing increased, while demand for component repairs for industrial turbine engines remained flat, in the first quarter of fiscal 2007, compared with the comparable fiscal 2006 period.

During the first quarter of fiscal 2007, the Repair Group’s selling, general and administrative expenses increased $0.3 million to $1.3 million, or 25.3% of net sales, from $1.0 million, or 11.1% of net sales, in the comparable fiscal 2006 period. Included in the $1.3 million of selling, general and administrative expenses in the first quarter of fiscal 2007 were $0.5 million of severance and related charges associated with a management restructuring after the aforementioned sale of the large aerospace portion of the Repair Group’s business. The remaining selling, general and administrative expenses in the first quarters of fiscal 2007 and 2006 were $0.8 million, or 15.0% of net sales, and $1.0 million, or 11.1% of net sales, respectively.

The Repair Group’s operating loss in the first quarter of fiscal 2007 was $1.4 million, compared with an operating loss of $1.0 million in the same period in fiscal 2006. Operating results in the first quarter of fiscal 2007 were negatively impacted by (i) the $0.5 million of aforementioned severance and related charges and (ii) the relatively low production and sales volumes for the component manufacturing and repair services related to the industrial turbine engine portion of the Repair Group’s non U.S. operations that remained after the sale of the large aerospace portion of such business. The Repair Group’s

9

sales volumes for the component manufacturing and repair services related to the industrial turbine engine portion of its operations, although growing, have not yet achieved the volumes required to cover the fixed costs inherent in such operation.

During the last half of fiscal 2006, and continuing into the first quarter of fiscal 2007, the U.S. dollar weakened against the euro. The Repair Group’s non-U.S. operation has less than a majority of its sales denominated in U.S. dollars while a significant majority of its operating costs are denominated in euros. Therefore, as the U.S. dollar weakens against the euro, costs denominated in euros are negatively impacted, to the extent that the collection of U.S dollars sales are used to satisfy such expenses, and the opposite is true when the U.S. dollar strengthens. The spot exchange rates in affect during the first quarter of fiscal 2007 were less favorable than the spot exchange rates in affect during the first quarter of fiscal 2006 and, therefore, the Repair Group’s operating results were negatively impacted by $0.1 million in the first quarter of fiscal 2007 compared to the same period in fiscal 2006 due to the less favorable exchange rates.

The Repair Group’s backlog as of December 31, 2006, was $4.9 million, compared with $3.5 million as of September 30, 2006. At December 31, 2006, $2.9 million of the total backlog is scheduled for delivery over the next twelve months and $2.0 million was on hold. All orders are subject to modification or cancellation by the customer with limited charges. The Repair Group believes that the backlog may not be indicative of actual sales for any succeeding period.

Applied Surface Concepts Group (“ASC Group”)

Net sales of the ASC Group increased 26.1% to $3.4 million in the first quarter of fiscal 2007, compared with net sales of $2.7 million in the comparable period of fiscal 2006. In the first quarter of fiscal 2007, product net sales, consisting of selective electrochemical finishing equipment and solutions, increased 7.9% to $1.6 million, compared with $1.5 million in the same period in fiscal 2006. In the first quarter of fiscal 2007, customized selective electrochemical finishing contract service net sales increased 52.0% to $1.8 million, compared with $1.2 million in the same period in fiscal 2006. The increase in net sales in the first quarter of fiscal 2007, compared to the same period in fiscal 2006, is primarily attributable to an increase in net sales to the exploration and production sectors of the oil and gas industry.

During the first quarter of fiscal 2007, The ASC Group’s selling, general and administrative expenses decreased $0.1 million to $1.0 million, or 30.7% of net sales, compared with $1.1 million, or 40.5% of net sales, in the first quarter of fiscal 2006.

The ASC Group’s operating income in the first quarter of fiscal 2007 was $0.4 million, compared with an operating loss of $0.1 million in the same period in fiscal 2006. Operating results improved principally due to the positive impact on margins of the significantly higher net sales volumes in the first quarter of fiscal 2007 compared with the same period in fiscal 2006.

The Applied Surface Concepts Group backlog at December 31, 2006 was not material.

Corporate Unallocated Expenses

Corporate unallocated expenses, consisting of corporate salaries and benefits, legal and professional and other corporate expenses decreased $0.2 million to $0.3 million in the first quarter of fiscal 2007 compared with $0.5 million in the first quarter of fiscal 2006. The decrease is attributable to (i) a reduction in legal and professional expenses that were incurred in the first quarter of fiscal 2006 related to the sale of the large aerospace portion of the Repair Group’s business and (ii) a reduction in compensation expenses due in part to the management restructuring after the aforementioned sale.

Other/General

Interest expense was nominal in the first quarters of both fiscal 2007 and 2006. The following table sets forth the weighted average interest rates and weighted average outstanding balances under the Company’s credit agreements in the first quarter of fiscal years 2007 and 2006.

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	Weighted Average						Weighted Average
	Interest Rate						Outstanding Balance
	Three Months Ended						Three Months Ended
	December 31,						December 31,
Credit Agreement	2006			2005			2006		2005
Revolving credit agreement		8.8	%		7.8	%	$0.4 million		$0.1 million
Debt purchase agreement (1)		N/A			4.2	%		N/A	$1.3 million

(1) The debt purchase agreement was paid off during the third quarter of fiscal 2006.

Currency exchange loss was $0.2 million in the first quarter of fiscal 2007 compared to a nominal amount in the same period in fiscal 2006. These losses are the result of the impact of currency exchange rate fluctuations on the Company’s non-U.S. subsidiaries’ monetary assets and liabilities that are not denominated in such subsidiaries’ local currency. During the first quarter of fiscal 2007, the euro strengthened in relation to the U.S. dollar, while the euro was stable in the first quarter of fiscal 2006.

Other income in the first quarter of fiscal 2007 includes $2.1 million of grant income, as described more fully in Note 7 to the Unaudited Consolidated Condensed Financial Statements.

B. Liquidity and Capital Resources

Cash and cash equivalents decreased to $3.8 million at December 31, 2006 from $4.7 million at September 30, 2006. At present, essentially all of the Company’s cash and cash equivalents are 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 statutory restriction, adverse tax consequences or other limitations.

The Company’s operating activities consumed $0.8 million of cash in the first three months of fiscal 2007, compared with $0.9 million of cash provided in the first three months of fiscal 2006. The $0.8 million of cash used for operating activities in first three months of fiscal 2007 was primarily due to (i) operating income before depreciation expense of $0.9 million and (ii) a $0.4 million decrease in accounts receivable; offset by (iii) a $1.5 million increase in inventory principally attributable to the ACM Groups’s response to the increased demand in its business, (iv) a $0.4 million decrease in accounts payable and accrued liabilities, and (v) a $2.2 million decrease is other long-term liabilities resulting in the recognition of $2.1 million of non-cash grant income. The other changes in these components of working capital were due to factors resulting from normal business conditions of the Company, including (i) sales levels, (ii) collections from customers, (iii) the relative timing of payments to suppliers, and (iv) inventory levels required to support customer demand in general and, in particular, the significant extension of raw material lead times currently experienced by the ACM Group.

Capital expenditures were $0.5 million in the first three months of fiscal 2007 compared to $0.2 million in the comparable fiscal 2006 period. Fiscal 2007 capital expenditures consist of $0.1 million by the ACM Group, $0.1 million by the ASC Group and $0.4 million by the Repair Group. The Company anticipates that total fiscal 2007 capital expenditures will approximate $2.0 million.

At December 31, 2006, the Company has a $6.0 million revolving credit agreement with a bank, subject to sufficiency of collateral, which expires on April 1, 2008 and bears interest at the bank’s base rate plus 0.50%. The interest rate was 8.75% at December 31, 2006. A 0.375% commitment fee is incurred on the unused balance of the revolving credit agreement. At December 31, 2006, $0.5 million was outstanding and the Company had $5.4 million available under its $6.0 million revolving credit agreement. The Company’s revolving credit agreement is secured by substantially all of the Company’s assets located in the U.S., a guarantee by its U.S. subsidiaries and a pledge of 65% of the Company’s ownership interest in its non-U.S. subsidiaries.

Under its revolving credit agreement with the U.S. bank, the Company is subject to certain customary covenants. These include, without limitation, covenants (as defined) that require maintenance of certain specified financial ratios, including a minimum tangible net worth level and a minimum EBITDA level. The Company was in compliance with all applicable covenants at December 31, 2006.

The Company believes that cash flows from its operations together with existing cash reserves and the funds available under its revolving credit agreement will be sufficient to meet its working capital requirements through the end of fiscal year 2007. However, no assurances can be given as to the sufficiency of the Company’s working capital to support the Company’s operations. If the existing cash reserves, cash flow from operations and funds available under the revolving credit agreement

11

are insufficient; if working capital requirements are greater than currently estimated; and/or if the Company is unable to satisfy the covenants set forth in its credit agreement, the Company may be required to adopt one or more alternatives, such as reducing or delaying capital expenditures, restructuring indebtedness, selling assets or operations, or issuing additional shares of capital stock in the Company. There can be no assurance that any of these actions could be accomplished, or if so, on terms favorable to the Company, or that they would enable the Company to continue to satisfy its working capital requirements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

In the ordinary course of business, the Company is subject to foreign currency and interest risk. The risks primarily relate to the sale of the Company’s products and services in transactions denominated in non-U.S. dollar currencies (primarily the euro); the payment in local currency of wages and other costs related to the Company’s non-U.S. operations; and changes in interest rates on the Company’s long-term debt obligations. The Company does not hold or issue financial instruments for trading purposes.

The Company believes that inflation has not materially affected its results of operations during the first three months of fiscal 2007, and does not expect inflation to be a significant factor in the balance of fiscal 2007.

A. Foreign Currency Risk

The U.S. dollar is the functional currency for all of the Company’s U.S. operations. For these operations, all gains and losses from completed currency transactions are included in income currently. As a result of the sale in fiscal 2006 of the large aerospace portion of the Company’s Irish subsidiary’s turbine engine component services and repair business, the majority of the Irish subsidiary’s transactions are now denominated in euros and, therefore, the functional currency of the Irish subsidiary’s remaining business was changed to the euro from the U.S. dollar. Prior to the sale of the large aerospace portion of the Irish subsidiary’s turbine engine component services and repair business, a substantial majority of the Irish subsidiary’s transactions were denominated in U.S. dollars and, therefore, its functional currency prior to October 1, 2006 was the U.S. dollar. For the Company’s other non-U.S. subsidiaries, the functional currency is the local currency. Assets and liabilities are translated into U.S. dollars at the rate of exchange at the end of the period and revenues and expenses are translated using average rates of exchange. Foreign currency translation adjustments are reported as a component of accumulated other comprehensive income (loss).

Historically, the Company has been able to mitigate the impact of foreign currency risk by means of hedging such risk through the use of foreign currency exchange contracts, which typically expire within one year. However, such risk is mitigated only for the periods for which the Company has foreign currency exchange contracts in effect, and only to the extent of the U.S. dollar amounts of such contracts. At December 31, 2006, the Company had no forward exchange contracts outstanding. The Company will continue to evaluate its foreign currency risk, if any, and the effectiveness of using similar hedges in the future to mitigate such risk.

At December 31, 2006, the Company’s assets and liabilities denominated in the British Pound, the Euro, and the Swedish Krona were as follows (amounts in thousands):

	British Pound		Euro		Swedish Krona
Cash and cash equivalents		231		100		2
Accounts receivable		396		840		1,326
Accounts payable and accrued liabilities		185		907		1,462

B. Interest Rate Risk

The Company’s primary interest rate risk exposure results from the variable interest rate mechanisms associated with the Company’s revolving credit agreement. If interest rates were to increase 100 basis points (1%) from December 31, 2006, and assuming no changes in the amount outstanding under the revolving credit agreement, the additional interest expense to the Company would be nominal.

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Item 4. Controls and Procedures

The Company maintains disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to ensure that information required to be disclosed in its reports filed or submitted under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. 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.

The Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Chairman and Chief Executive Officer of the Company and Chief Financial Officer of the Company, 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 the end of the period covered by this report. Based upon that evaluation, the Chairman and Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company’s periodic SEC filings, and management has concluded that the unaudited consolidated condensed financial statements included in this Form 10-Q fairly present, in all material respects, the Company’s financial position, results of operations and cash flows for the periods presented.

There has been no significant change in our internal control over financial reporting that occurred during the period covered by this report that has materially affected, or that is reasonably likely to materially affect our internal control over financial reporting.

Part II. Other Information

Item 1. Legal Proceedings

No change.

Item 2. Change in Securities and Use of Proceeds

No change.

Item 3. Defaults upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security Holders

None

Item 5. Other Information

None.

Item 6. Exhibits

(a) Exhibits

The following exhibits are filed with this report or are incorporated herby 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.).

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Exhibit No.	Description
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 29, 2002, filed as Exhibit 3(b) of the Company’s Form 10-Q dated March 31, 2002, and incorporated herein by reference
4.2	Amended and Restated Credit Agreement Between SIFCO Industries, Inc. and National City Bank dated April 30, 2002, filed as Exhibit 4(b) of the Company’s Form 10-Q dated March 31, 2002, and incorporated herein by reference
4.5	Consolidated Amendment No. 1 to Amended and Restated Credit Agreement, Amended and Restated Reimbursement Agreement and Promissory Note dated November 26, 2002 between SIFCO Industries, Inc. and National City Bank, filed as Exhibit 4.5 of the Company’s Form 10-K dated September 30, 2002, and incorporated herein by reference
4.6	Consolidated Amendment No. 2 to Amended and Restated Credit Agreement, Amended and Restated Reimbursement Agreement and Promissory Note dated February 13, 2003 between SIFCO Industries, Inc. and National City Bank, filed as Exhibit 4.6 of the Company’s Form 10-Q dated December 31, 2002, and incorporated herein by reference
4.7	Consolidated Amendment No. 3 to Amended and Restated Credit Agreement, Amended and Restated Reimbursement Agreement and Promissory Note dated May 13, 2003 between SIFCO Industries Inc. and National City Bank, filed as Exhibit 4.7 of the Company’s Form 10-Q dated March 31, 2003, and incorporated herein by reference
4.8	Consolidated Amendment No. 4 to Amended and Restated Credit Agreement, Amended and Restated Reimbursement Agreement and Promissory Note dated July 28, 2003 between SIFCO Industries, Inc. and National City Bank, filed as Exhibit 4.8 of the Company’s Form 10-Q dated June 30, 2003, and incorporated herein by reference
4.9	Consolidated Amendment No. 5 to Amended and Restated Credit Agreement, Amended and Restated Reimbursement Agreement and Promissory Note dated November 26, 2003 between SIFCO Industries, Inc. and National City Bank, filed as Exhibit 4.9 to the Company’s Form 10-K dated September 30, 2004 and incorporated herein by reference
4.10	Amendment No. 6 to Amended and Restated Credit Agreement dated March 31, 2004 between SIFCO Industries, Inc. and National City Bank, filed as Exhibit 4.10 of the Company’s Form 10-Q dated March 31, 2004, and incorporated herein by reference
4.11	Consolidated Amendment No. 7 to Amended and Restated Credit Agreement, Amended and Restated Reimbursement Agreement and Promissory Note dated May 14, 2004 between SIFCO Industries, Inc. and National City Bank, filed as Exhibit 4.11 of the Company’s Form 10-Q dated March 31, 2004, and incorporated herein by reference
4.12	Consolidated Amendment No. 8 to Amended and Restated Credit Agreement, Amended and Restated Reimbursement Agreement and Promissory Note effective June 30, 2004 between SIFCO Industries, Inc. and National City Bank, filed as Exhibit 4.12 of the Company’s Form 10-Q dated June 30, 2004, and incorporated herein by reference
4.13	Consolidated Amendment No. 9 to Amended and Restated Credit Agreement, Amended and Restated Reimbursement Agreement and Promissory Note effective November 12, 2004 between SIFCO Industries, Inc. and National City Bank, filed as Exhibit 4.13 to the Company’s Form 10-K dated September 30, 2004 and incorporated herein by reference
4.14	Amendment No. 10 to Amended and Restated Credit Agreement effective December 31, 2004 between SIFCO Industries, Inc. and National City Bank, filed as Exhibit 4.14 to the Company’s Form 10-Q dated December 31, 2004, and incorporated herein by reference
4.15	Amendment No. 11 to Amended and Restated Credit Agreement dated May 19, 2005 between SIFCO Industries, Inc. and National City Bank, filed as Exhibit 4.15 to the Company’s Form 10-Q/A dated March 31, 2005, and incorporated herein by reference

14

Exhibit No.	Description
4.16	Amendment No. 12 to Amended and Restated Credit Agreement dated August 10, 2005 between SIFCO Industries, Inc. and National City Bank, filed as Exhibit 4.16 to the Company’s Form 10-Q dated June 30, 2005, and incorporated herein by reference
4.17	Debt Purchase Agreement Between The Governor and Company of the Bank of Ireland and SIFCO Turbine Components Limited, filed as Exhibit 4.17 to the Company’s Form 8-K dated September 29, 2005, and incorporated herein by reference
4.18	Mortgage and Charge dated September 26, 2005 between SIFCO Turbine Components Limited and the Governor and Company of the Bank of Ireland, filed as Exhibit 4.18 to the Company’s Form 8-K dated September 29, 2005, and incorporated herein by reference
4.19	Amendment No. 13 to Amended and Restated Credit Agreement dated November 23, 2005 between SIFCO Industries, Inc. and National City Bank, filed as Exhibit 4.19 to the Company’s Form 10-K dated September 30, 2005, and incorporated herein by reference
4.20	Amendment No. 14 to Amended and Restated Credit Agreement dated February 10, 2006 between SIFCO Industries, Inc. and National City Bank, filed as Exhibit 4.20 to the Company’s Form 10-Q dated December 31, 2005, and incorporated herein by reference
4.21	Amendment No. 15 to Amended and Restated Credit Agreement dated August 14, 2006 between SIFCO Industries, Inc. and National City Bank, filed as exhibit 4.21 to the Company’s Form 10-Q dated June 30, 2006 and incorporated herein by reference
4.22	Amendment No. 16 to Amended and Restated Credit Agreement dated November 29, 2006 between SIFCO Industries, Inc. and National City Bank, filed as exhibit 4.22 to the Company’s Form 10-K dated September 30, 2006 and incorporated herein by reference
* 4.23	Amendment No. 17 to Amended and Restated Credit Agreement dated February 5, 2007 between SIFCO Industries, Inc. and National City Bank
9.1	Voting Trust Extension Agreement dated January 14, 2002, filed as Exhibit 9.1 of the Company’s Form 10-K dated September 30, 2002, and incorporated herein by reference
9.2	Voting Trust Agreement dated January 15, 1997, filed as Exhibit 9.2 of the Company’s Form 10-K dated September 30, 2002, and incorporated herein by reference
* 9.3	Voting Trust Agreement dated January 30, 2007
10.2	Deferred Compensation Program for Directors and Executive Officers (as amended and restated April 26, 1984), filed as Exhibit 10(b) of the Company’s Form 10-Q dated March 31, 2002, and incorporated herein by reference
10.3	SIFCO Industries, Inc. 1998 Long-term Incentive Plan, filed as Exhibit 10.3 of the Company’s form 10-Q dated June 30, 2004, and incorporated herein by reference
10.4	SIFCO Industries, Inc. 1995 Stock Option Plan, filed as Exhibit 10(d) of the Company’s Form 10-Q dated March 31, 2002, and incorporated herein by reference
10.5	Change in Control Severance Agreement between the Company and Frank Cappello, dated September 28, 2000, filed as Exhibit 10(g) of the Company’s Form 10-Q dated December 31, 2000, and incorporated herein by reference
10.7	Change in Control Severance Agreement between the Company and Remigijus Belzinskas, dated September 28, 2000, filed as Exhibit 10 (i) of the Company’s Form 10-Q dated December 31, 2000, and incorporated herein by reference

15

Exhibit No.	Description
10.9	Change in Control Severance Agreement between the Company and Timothy V. Crean, dated July 30, 2002, filed as Exhibit 10.9 of the Company’s Form 10-K dated September 30, 2002, and incorporated herein by reference
10.10	Change in Control Severance Agreement between the Company and Jeffrey P. Gotschall, dated July 30, 2002, filed as Exhibit 10.10 of the Company’s Form 10-K dated September 30, 2002, and incorporated herein by reference
10.11	Form of Restricted Stock Agreement, filed as Exhibit 10.11 of the Company’s Form 10-K dated September 30, 2002, and incorporated herein by reference
10.12	Form of Tender, Condition of Tender, Condition of Sale and General Conditions of Sale dated June 30, 2004, filed as Exhibit 10.12 of the Company’s Form 8-K dated October 14, 2004, and incorporated herein by reference
10.13	Separation Agreement and Release between Hudson D. Smith and SIFCO Industries, Inc., effective January 31, 2005, filed as Exhibit 10.13 of the Company’s Form 8-K dated February 8, 2005, and incorporated herein by reference
10.14	Separation Pay Agreement between Frank A. Cappello and SIFCO Industries, Inc. dated December 16, 2005, filed as Exhibit 10.14 of the Company’s Form 10-K dated September 30, 2005, and incorporated herein by reference
10.15	Agreement for the Purchase of the Assets of the Large Aerospace Business of SIFCO Turbine Components Limited dated March 16, 2006 between SIFCO Turbine Components Limited, SIFCO Industries, Inc, and SR Technics Airfoil Services Limited, as amended on April 19, 2006, May 2, 2006, May 5, 2006, May 9, 2006, and May 10, 2006, filed as exhibits 10.15 of the Company’s Form 10-Q dated March 31, 2006 and incorporated herein by reference
10.16	Separation Agreement and Release Without Prejudice between the Company and Timothy V. Crean, dated November 28, 2006 filed as Exhibit 99.1 of the Company’s Form 8-K dated November 30, 2006, and incorporated herein by reference
*10.17	Amendment No. 1 to Change in Control Severance Agreement between the Company and Frank Cappello, dated February 5, 2007
*10.18	Amendment No. 1 to Change in Control Severance Agreement between the Company and Remigijus Belzinskas, dated February 5, 2007
14.1	Code of Ethics, files as Exhibit 14.1 of the Company’s Form 10-K dated September 30, 2003, 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

16

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, thereto duly authorized.

	SIFCO Industries, Inc. (Registrant)
Date: February 7, 2007	/s/ Jeffrey P. Gotschall
	Jeffrey P. Gotschall
	Chairman of the Board and
	Chief Executive Officer
Date: February 7, 2007	/s/ Frank A. Cappello
	Frank A. Cappello
	Vice President-Finance and
	Chief Financial Officer
	(Principal Financial Officer)

17

EX-4.23

Exhibit 4.23

AMENDMENT NO. 17 TO

AMENDED AND RESTATED CREDIT AGREEMENT

     This Amendment No. 17 to Amended and Restated Credit Agreement (this “Amendment”), dated as of February 5, 2007, is entered into by and between SIFCO INDUSTRIES, INC. (the “Borrower”) and NATIONAL CITY BANK (the “Bank”) for the purposes amending and supplementing the documents and instruments referred to below.

WITNESSETH:

     WHEREAS, Borrower and Bank are parties to an Amended and Restated Credit Agreement made as of April 30, 2002, as amended from time to time (as amended, the “Credit Agreement” providing for $6,000,000 of revolving credits; all terms used in the Credit Agreement being used herein with the same meaning); and

     WHEREAS, Borrower and Bank desire to further amend certain provisions of the Credit Agreement to extend the Expiration Date of the Subject Commitment and to waive the violation of a certain financial covenant;

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

SECTION I — Amendment to Credit Agreement

A. Subsection 2A.02 of the Credit Agreement is hereby amended to extend the Expiration Date from October 1, 2007 to April 1, 2008.

SECTION II — Waiver

     Bank hereby waives all violations of section 3B.01 with regard to the minimum EBITDA requirement which occurred on or prior to October 31, 2006. The execution, delivery and effectiveness of this specific waiver shall not operate as a waiver of any other right, power or remedy of Bank under the Credit Agreement or constitute a continuing waiver of any kind.

SECTION III — Representations and Warranties

     Borrower hereby represents and warrants to Bank, to the best of Borrower’s knowledge, that

(A) none of the representations and warranties made in the Credit Agreement or any Related Writing, (collectively, the “Loan Documents”) has ceased to be true and complete in any material respect as of the date hereof; and

(B) as of the date hereof no “Default” has occurred that is continuing under the Loan Documents.

SECTION IV — Acknowledgments Concerning Outstanding Loans

     Borrower acknowledges and agrees that, as of the date hereof, all of Borrower’s outstanding loan obligations to Bank are owed without any offset, deduction, defense, claim or counterclaim of any nature whatsoever. Borrower authorizes Bank to share all credit and financial information relating to Borrower with each of Bank’s parent company and with any subsidiary or affiliate company of such Bank or of such Bank’s parent company.

SECTION V — References

     On and after the effective date of this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, or words of like import referring to the Credit Agreement shall mean and refer to the Credit Agreement as amended hereby. The Loan Documents, as amended by this Amendment, are and shall continue to be in full force and effect and are hereby ratified and confirmed in all respects. The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of Bank under the Loan Documents or constitute a waiver of any provision of the Loan Documents except as specifically set forth herein.

1

SECTION VI — Counterparts and Governing Law

     This Amendment may be executed in any number of counterparts, each counterpart to be executed by one or more of the parties but, when taken together, all counterparts shall constitute one agreement. This Amendment, and the respective rights and obligations of the parties hereto, shall be construed in accordance with and governed by Ohio law.

     IN WITNESS WHEREOF, Borrower and Bank have caused this Amendment to be executed by their authorized officers as of the date and year first above written.

SIFCO INDUSTRIES, INC.		NATIONAL CITY BANK
By:	/s/ Frank A. Cappello	By:	/s/ Christian S. Brown
Name:	Frank A. Cappello	Name:	Christian S. Brown
Title:	V.P. Finance and CFO	Title:	Vice President

2

EX-9.3

Exhibit 9.3

VOTING TRUST AGREEMENT

     THIS AGREEMENT executed this 30 day of January 2007 effective as of the 1st day of February 2007 (hereinafter referred to as the “Effective Date”), by and between those holders of Common Shares of SIFCO Industries, Inc. who sign this Agreement (hereinafter sometimes collectively called the “Signing Shareholders” and individually called “Signing Shareholder”), and JANICE CARLSON and CHARLES H. SMITH, III, as Trustees and their successors in trust (said named Trustees and their successors being hereinafter called the “Trustees”);

WITNESSES THAT:

     WHEREAS, each Signing Shareholder represents that he (the masculine pronoun wherever used in this Agreement being intended to include the feminine) owns the number of Common Shares of the Company set opposite his signature below and deems it to be in his best interest to renew, continue and extend the Voting Trust Agreement in effect with respect to his shares of the Company and maintain on deposit hereunder the certificates evidencing his ownership of said shares in order to continue the stability of management of the Company which the Signing Shareholders believe should be continued for the benefit and protection of the Company and its present and future shareholders;

     NOW, THEREFORE, the Signing Shareholders hereof agree each with the others, and each for himself and his heirs, administrators, successors and assigns as follows:

     1. DEPOSIT OF SHARE CERTIFICATES. As with the Voting Trust Agreements in the past, each Signing Shareholder will continue to deposit with the Trustees a certificate or certificates (hereinafter called “share certificates”) for the number of Common Shares of the Company set opposite his signature below, so endorsed or accompanied by such instrument or instruments of transfer as to maintain ownership of said shares in the Trustees; and shall likewise deposit hereunder each and every share certificate for Common Shares of the Company which he may hereafter acquire.

     2. DELIVERY OF TRUST CERTIFICATES. The Trustees have heretofore delivered, and from time to time in the future, upon the deposit with the Trustees by a Signing Shareholder of new share certificates acquired by him, and upon his payment of any and all transfer taxes required in connection therewith will deliver, or cause to be delivered, to such Signing Shareholder voting trust certificates (hereinafter called “Trust Certificates”) for the number of Common Shares so deposited in substantially the form shown in Exhibit A, attached hereto and made a part hereof.

     3. TRANSFER OF TRUST CERTIFICATES. Each Trust Certificate issued hereunder and the interest in shares represented thereby shall be transferable only upon the books of the Trustees by the registered holder in person or by attorney upon surrender of the same properly endorsed or accompanied by a properly executed instrument of transfer and upon payment of any transfer taxes payable on such transfer, and in accordance with rules established from time to time for that purpose by the Trustees. Each transfer so made shall vest in the transferee all right and interest of the transferor in and under the Trust Certificate and this Agreement with respect to the number of shares which the endorsement or transfer evidences; and thereupon the Trustees will deliver, or cause to be delivered, to the person or persons entitled, a new Trust Certificate or Certificates for the number or numbers of interests in Common Shares of the Company indicated by the endorsement or instrument of transfer. Until such transfer, the Trustees may treat the registered holder of a Trust Certificate as the owner thereof for all purposes whatsoever. The transfer books for the Trust Certificates may be closed by the Trustees at any time prior to the payment or distribution of dividends or for any other purpose. Each transferee of a Trust Certificate issued hereunder shall by the acceptance of a Trust Certificate become a party hereto with like effect as though a Signing Shareholder and shall be embraced within the meaning of the terms “Trust Certificate holder” or “holder of a Trust Certificate” wherever used herein.

     4. LOST TRUST CERTIFICATE. The holder of any Trust Certificate shall immediately notify the Trustees of any loss, destruction or mutilation of the same, and the Trustees may, in their discretion, cause a new Trust Certificate to be issued to such holder for the same number of shares either upon the surrender of the mutilated certificate or, in the case of loss or destruction, upon satisfactory proof thereof and the giving of a bond in such form and amount and with such sureties, if any, as the Trustees may require.

1

     5. TITLE AND RIGHTS OF TRUSTEES. Title to all Common Shares of the Company deposited hereunder shall remain vested in the Trustees, and title to any new shares deposited hereunder may be transferred to the Trustees or their nominees on the books of the Company, provided that as holders of such shares the Trustees assume no liability as shareholders of the Company, their interest therein and hereunder being as Trustees only. Nonetheless the Trustees shall, in respect of all shares so held by them, possess and be entitled to exercise, in their discretion, all rights of common shareholders of every kind and character, including, but not limited to, the right to receive dividends on said shares, the right to vote by proxy or otherwise such shares and to take part in or consent in writing or otherwise to any corporate or shareholders’ action, including, but not limited to, the adoption of any amended Articles of Incorporation or regulations of the Company or any amendment to such Articles or regulations, the election of directors of the Company, the dissolution of the Company, the merger or consolidation of the Company with any other corporation, the sale or other disposition of all, or substantially all, of the assets of the Company or the creation of any new class of shares having priority over the Common Shares in respect of dividends or liquidating distributions or otherwise; except that they shall not sell, pledge, hypothecate, mortgage or place a lien or charge upon any of the shares deposited hereunder or subject hereto.

     6. DIVIDEND AND COMPARABLE RIGHTS OF TRUST CERTIFICATE HOLDER. The registered holder of each Trust Certificate shall be entitled to receive as soon as practicable after the receipt by the Trustees of each dividend on the shares hereunder, the amount of the dividend so received by the Trustees in cash or in kind upon the number of Common Shares specified in each Trust Certificate; provided that the Trustees may, in their discretion, authorize and empower the Company or its dividend disbursing agent to make payment or distribution of such dividend directly to the registered holders of the outstanding Trust Certificates. However, in the event that the Company shall issue any voting shares of the Company by way of a stock split or a stock dividend then such voting shares so issuable with respect to all shares held by the Trustees shall be received and held by the Trustees and shall be deemed for all the purposes of this Agreement to have been deposited hereunder, and the Trustees shall issue to each registered holder of a Trust Certificate an additional Trust Certificate evidencing his appropriate interest in the number of voting shares so received and held. For the purposes of this Agreement, no shares having voting rights only in certain events (such as, but not limited to, the occurrence of a default in the payment of preferential dividends) shall be deemed to be voting shares.

     7. SUBSCRIPTION RIGHTS. In case any stock or other securities of the Company are offered for subscription to the holders of shares of the Company deposited hereunder, the Trustees, promptly upon receipt of notice of such offer, shall mail or deliver a copy thereof to each registered holder of a Trust Certificate. If at least five (5) days prior to the last day on which such subscription can be made, the Trustee shall receive a request from any Trust Certificate holder to subscribe in his behalf for a stated amount of such stock or securities, together with the sum of money required to pay for the same, the Trustees shall make such subscription and the necessary payment, and upon receiving from the Company the stock or securities so subscribed for, shall issue to such Trust Certificate holder a new Trust Certificate in respect thereof if the same be voting shares, but if the same not be voting shares the Trustees shall mail or deliver the stock or securities received from the Company to the Trust Certificate holder in whose behalf the subscription is made or may instruct the Company to make delivery thereof directly to said Trust Certificate holder; provided, however, that if the aggregate amount of such stock or securities which the Trustees shall be so requested to subscribe for shall exceed the total amount which the Trustees have the right to subscribe for as shareholders of the Company under the terms of the Company’s offer, then the Trustees shall first, on behalf of each requesting Trust Certificate holder, subscribe for that amount which, under the terms of the Company’s offer, he would have had the right to subscribe for if he had held directly the number of shares represented by his Trust Certificate or Certificates; and any balance of such stock or securities then additionally available for subscription by the Trustees shall be subscribed for on behalf of each additionally requesting Trust Certificate holder in the proportion which the amount of his additional request bears to the total amount of additional requests received by the Trustees.

     8. DISSOLUTION OF COMPANY. In the event of the dissolution or total or partial liquidation of the Company, whether voluntary or involuntary, the Trustees shall receive the moneys, securities, rights or property to which the holders of shares of the Company deposited hereunder are entitled and shall distribute the same among the registered holders of the Trust Certificates in proportion to their interests as shown by the Trustees’ books, or the Trustees may in their discretion deposit the same with any bank or trust company doing business in Cleveland, Ohio, with instructions to distribute the same as above provided, and upon such deposit all further obligations or liabilities of the Trustees in respect of the moneys, securities, rights or property so deposited shall cease.

     9. REORGANIZATION OF COMPANY. In the event the Company is merged into or consolidated with another corporation or all or substantially all of the assets of the Company are transferred to another corporation, then and thereafter the term “Company” for all purposes of this Agreement shall be taken to include such other corporation, and the Trustees shall receive and hold under this Agreement any voting shares of such other corporation received on account of the stock held hereunder prior to such merger, consolidation or transfer. Trust Certificates issued and outstanding under this Agreement at the time of such merger, consolidation, or transfer may remain outstanding or the Trustees may, in their discretion, substitute for such Trust Certificates new Trust Certificates in appropriate form, the term “shares” as used herein shall be taken to

2

include any stock which may be received by the Trustees in lieu of all or any part of the shares of the Company theretofore deposited hereunder.

     10. ACTION BY TRUSTEES. No action will be taken without the agreement of both Trustees. In the event the Trustees are unable to come to agreement, the issue will be decided by a vote of all the Trust Certificate holders, with a simple majority necessary for passage.

     11. RECEIPTS AND SAFEKEEPING. Janice Carlson, or such other person, either corporate or individual, as the Trustees may from time to time appoint for the purpose, shall have the authority and responsibility as agent of the Trustees for receiving and safekeeping share certificates, securities and other property or money deposited with or from time to time held by the Trustees. Such person shall also be responsible for issuing Voting Trust Certificates to the shareholders and notifying the Company’s transfer agent of any changes of records with respect to dividends.

     12. PRIVILEGES AND RESPONSIBILITIES OF TRUSTEES. In voting the shares deposited hereunder or in doing any act with respect to the control or management of the Company or its affairs or in otherwise acting hereunder, the Trustees shall exercise their best judgment; but they assume no responsibility in respect to any action taken by them or their agents, and no Trustee shall incur any responsibility for any error or deed of commission or omission except for his own willful misconduct. No Trustee shall be required to give any bond or other security for the discharge of his duties. Any Trustee may act as a director or officer of the Company or of any affiliated company and may vote for himself as such director or officer, and he or any company or firm with which he may be connected as shareholder, director, officer or partner or otherwise may contract with the Company or with any company or firm affiliated with it or be or become pecuniarily interested in any matter or action to which the same may be a party or in which the same may in any way be interested as fully as though he were not a Trustee. Any Trustee may be a holder of or interested in Trust Certificates issued hereunder.

     13. SUCCESSOR TRUSTEES. Each Signing Shareholder shall, after his signature, add the last initial of the ancestor of such Signing Shareholder who was a child of Charles H. Smith, Sr. A Trustee may only be removed by a writing signed by a majority in interest of the Certificate holders who are issue (including children by adoption), spouse or spouse of issue of the same child of Charles H. Smith, Sr. as the original named Trustee or the Trustee with respect to whom the Trustee is a successor. Any Trustee may resign in writing. Any such resignation or removal shall take effect at a time fixed in the writing not less than thirty (30) days after the same is delivered to the other Trustees or Trustee, or at such earlier time as shall be accepted by all of the Trustees. Upon any such resignation, removal or the death or incapacity of a Trustee to act, the vacancy so occurring shall be filled by a person elected by the majority in interest of the Certificate holders who are issue (including children by adoption), spouse or spouse of issue of the same child of Charles H. Smith, Sr. as the original named Trustee. Such election shall be made at a meeting called by the remaining Trustees or Trustee for that purpose by notice given to each Certificate holder eligible to vote not less than ten (10) nor more than thirty (30) days prior thereto. Each and every successor Trustee elected in accordance with this paragraph shall have the powers, duties, privileges, responsibilities and authority of an original Trustee named herein. No Trustee shall be liable for the acts or omissions of any predecessor Trustee.

     14. PERIOD OF TRUST. This Agreement shall continue in force for a period of three (3) years from the date first above written unless sooner terminated as hereinafter provided, and may be extended for an additional period of not more than three (3) years by depositing with the Trustees on or before the expiration of the original three (3) year period either (a) an agreement of extension, which may be executed in one instrument or in several counterparts, signed by the holders of Trust Certificates representing not less than eighty-five percent (85%) of the shares deposited hereunder, or (b) a certificate signed by the Secretary of the meeting, certifying that at a meeting duly called and held for the purpose of considering such extension, at a place in Cuyahoga County, Ohio, specified in a notice given either by the Trustees, or a Trust Certificate holder, not less than ten (10) nor more than thirty (30) days prior to such meeting to each Trust Certificate holder hereunder, the holders of Trust Certificates representing not less than eighty-five percent (85%) of the shares deposited hereunder voted in favor of said extension. Such extension of this Agreement shall be binding upon all Trust Certificate holders. Any Trust Certificate holder shall, during reasonable business hours, have access to the books of the Trustees containing the record of the name and addresses of Trust Certificate holders and the number of shares represented by their certificates.

     15. EARLY TERMINATION. At any time during the original three (3) year period, or any extension thereof, the Trustees may terminate this trust by notice to the certificate holders, which notice shall provide for the time and manner of delivery of certificates for shares of stock of the Company upon surrender of the Trust Certificates.

     16. PARTIAL RETURN OF SHARES. At any time or times before the termination of this trust, the Trustees may return any number of shares of the Company deposited with them to a Trust Certificate holder or holders free and clear of the trust, provided that the following procedure shall be observed. The Trustees shall first notify all the Trust Certificate holders in writing of the number of shares which they intend to return. Within thirty (30) days after the receipt of such notice, each Trust Certificate holder who wishes any of his shares to be returned to him shall surrender his Trust Certificate or Certificates

3

to the Trustees for cancellation in an amount equivalent to the number of shares he wishes returned. If the total number of shares for which Trust Certificates are so surrendered within such thirty (30) days is not more than the total number of shares the Trustees have decided to return, they shall cancel each Trust Certificate so surrendered in an amount equivalent to the number of shares to be returned to the holder of that certificate and shall cause a stock certificate or certificates for that number of shares of stock of the Company to be issued and delivered to him or his nominee. If the total number of shares for which Trust Certificates are so surrendered within such thirty (30) days is more than the total number of shares the Trustees have decided to return, they shall cancel each Trust Certificate so tendered in an amount equivalent to that proportion of the number of shares requested by that holder which the number of shares they have decided to return bears to the total number of shares requested by all Trust Certificate holders who tender their Trust Certificates. In no event before termination of the trust shall the Trustees return any shares to a certificate holder who has not tendered his Trust Certificate for cancellation.

     17. AMENDMENTS. If at any time the Trustees shall deem it desirable to amend this Agreement in any respect, they shall submit such amendment to the Trust Certificate holders for their approval at a meeting of such holders which shall be called for that purpose, notice of which shall be given not less than ten (10) nor more than thirty (30) days prior to such meeting, and shall state that the purpose of the meeting is to consider the amendment of this Agreement and shall be accompanied by a copy of the proposed amendment. If at such meeting the proposed amendment, or any modification thereof, shall be approved by the affirmative vote, given in person or by proxy, of the holders of Trust Certificates representing eighty-five percent (85%) or more of the shares then deposited under this Agreement, a certificate to that effect shall be signed by the Secretary of the meeting and filed with the Trustees. Upon such approval and the filing of said certificate, the amendment as so approved shall be and become a part of this Agreement and shall be binding upon all Trust Certificate holders with like force and effect as if originally incorporated herein.

     18. DELIVERY OF SHARES ON TERMINATION.

          (a) Upon termination of this Agreement, whether by expiration of time or the act of the Trustees as hereinabove provided, the Trustees shall deliver to each Trust Certificate holder upon surrender of his Trust Certificates accompanied, if required by the Trustees, by properly executed transfers thereof to the Trustees and upon payment by such holder of any and all transfer taxes payable on such transfer, a certificate or certificates for Common Shares of the stock of the Company either registered in the name of the Trust Certificate holder or endorsed in blank or for transfer to the name of such holder or his nominee for the number of shares represented by the Trust Certificate or Certificates so surrendered.

          (b) In case, on or after the termination of this Agreement, the Trustees shall deposit with any bank or trust company in Cuyahoga County, Ohio, share certificates either properly endorsed in blank or registered in the names of holders of Trust Certificates hereunder, each for the number of Common Shares of the Company represented by a Trust Certificate outstanding, with authority in writing to the bank or trust company to deliver said share certificates in exchange for Trust Certificates when and as surrendered for exchange as hereinabove provided and shall give not less than ten (10) days notice thereof to all Trust Certificate holders affected thereby, then all further liability of the Trustees, and each of them, for the delivery of share certificates in exchange for Trust Certificates or otherwise hereunder shall cease.

          (c) At any annual or special meeting of the shareholders of the Company and after termination of this Agreement, the Trustees may, but shall not be required to, vote any shares of the Company then standing in their names on the books of the Company deliverable to the holders of Trust Certificates who shall not have presented their Trust Certificates for exchange as hereinabove provided.

     19. NOTICE. Each notice provided for in this Agreement shall be in writing and signed by the person giving the same or his duly authorized representative, except that a parent or guardian may sign for a minor child, and a notice by the Trustees shall be signed by not less than a majority of the Trustees then qualified to act; and each such notice shall either be delivered personally to the person to whom it is addressed or shall be mailed to him, postage prepaid, to his last known residence address, provided that personal delivery to a parent or guardian of a minor child shall be sufficient delivery to the child, and further provided that a notice to any one Trustee shall be sufficient notice to all, unless only one Trustee has received the notice and that Trustee has the same initial after his signature as does the person giving the notice.

     20. PARTIAL INVALIDITY. The invalidity or nonenforceability of any term or provision of this Agreement or of the Trust Certificates shall not in any way impair or affect the balance thereof, which shall remain in full force and effect.

     21. OHIO LAW. This Agreement and the Trust Certificates shall be construed in accordance with and shall be governed by the laws of the State of Ohio.

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     22. EXECUTION. This Agreement may be executed in any number of counterparts, each of which, when executed, shall be deemed to be an original and all of which together shall constitute but one and the same instrument. This Agreement shall inure to the benefit of, and be binding upon, all persons executing it and their respective heirs, executors, administrators, legatees and assigns.

     IN WITNESS WHEREOF, the Trustees have signed this Voting Trust Agreement as of the day and year first above written, and the Signing Shareholders have become parties hereto in the manner hereinbefore provided.

/s/ Janice Carlson

Janice Carlson

/s/ Charles H. Smith III

Charles H. Smith III

5

VOTING TRUST AGREEMENT
FROM FEBRUARY 1, 2007 TO JANUARY 31, 2010

	Number of
Shareholder	Shares
National City Bank, and its successors, as trustee of Fund A-1 under the trust agreement between Rhea D. Smith and National City Bank as trustee dated December 8, 1981 as amended and restated on September 16, 1989
By: /s/ Anne Carnahan		325,034
Anne Carnahan, Vice President
National City Bank, and its successors, as trustee of Fund B under the trust agreement between Rhea D. Smith and National City Bank as trustee dated December 8,1981 as amended and restated on September 16 1989.
By: /s/ Anne Carnahan		40,000
Anne Carnahan, Vice President
National City Bank, and its successors, as trustee of the Charles H. Smith, Jr. Insurance Trust dated September 5, 1990.
By: /s/ Anne Carnahan		171,202
Anne Carnahan, Vice President

6

VOTING TRUST AGREEMENT
FROM FEBRUARY 1, 2007 TO JANUARY 31, 2010

	Number of
Shareholder	Shares
/s/ Charles H. Smith III	61,666
C. H. Smith, III
/s/ Hilda Smith	5,575
Hilda Smith
/s/ Jennifer Smith	7,242
Jennifer Smith
/s/ Jennifer Smith	14,250
Jennifer Smith (TTEE)
/s/ C. Jason Smith	7,109
C. Jason Smith
/s/ C. Jason Smith	14,250
C. Jason Smith (TTEE)
/s/ Deborah Dowdell	57,541
Deborah Dowdell
/s/ Robert J. Morris, III	20,863
Robert J. Morris, III
/s/ Robert J. Morris, III , Custodian	4,250
Skylar D. Morris (Cust. UGM Ohio)
/s/ Ryan Morris	20,863
Ryan Morris
/s/ Ryan Morris, Custodian	4,250
Kaitlin Morris (Cust. UGM Ohio)
/s/ Ryan Morris, Custodian	4,250
Matthew Morris (Cust. UGM Ohio)
/s/ Adam Morris	13,738
Adam Morris
/s/ Deborah Morris Dowdell, Trustee	7,125
Adam Morris (TTEE)
/s/ Molly Morris	6,613
Molly D. Morris

7

VOTING TRUST AGREEMENT
FROM FEBRUARY 1, 2007 TO JANUARY 31, 2010

	Number of
Shareholder	Shares
/s/ Deborah Morris Dowdell, Trustee	14,250
Molly D. Morris (TTEE)
/s/ Hudson D Smith	75,592
Hudson D. Smith
/s/ Deborah Ann Smith	6,255
Deborah Ann Smith
/s/ Hudson D. Smith, Jr.	6,576
Hudson D. Smith, Jr.
/s/ Hudson D Smith, Trustee	15,100
Hudson D. Smith, Jr. (TTEE)
/s/ Cynthia R. Smith	6,576
Cynthia R. Smith
/s/ Hudson D Smith, Trustee	15,300
Cynthia R. Smith (TTEE)
/s/ C. Halle Smith	6,576
C. Halle Smith (Cust. UGM Ohio)
/s/ Hudson D Smith, Trustee	15,300
C. Halle Smith (TTEE)
/s/ Suzanne Allen	1,800
Suzanne Allen
/s/ Phyllis Gotschall Wilhelm, Trustee	95,277
Phyllis Gotschall Wilhelm, TTEE U/TR
dated June 24, 1987
/s/ Phyllis Gotschall Wilhelm, Trustee	94,088
George D. Gotschall Non-GST Marital Trust

8

VOTING TRUST AGREEMENT
FROM FEBRUARY 1, 2007 TO JANUARY 31, 2010

	Number of
Shareholder	Shares
National City Bank,Trustee, Florence R. Williamson Trust fbo Phyllis Gotschall Wilhelm dated October 23, 1969
By: /s/ Anne Carnahan	171,207
Anne Carnahan, Vice President
/s/ Jeffrey P. Gotschall	142,700
Jeffrey P. Gotschall
/s/ Dianne S. Gotschall	400
Dianne S. Gotschall
/s/ Judith Gotschall	27,715
Judith Gotschall
/s/ Andrew Gotschall	27,715
Andrew Gotschall
/s/ Charles Gotschall	27,715
Charles Gotschall
/s/ Craig Ramsey	24,740
Craig Ramsey
/s/ Alison Ramsey	24,740
Alison Ramsey
/s/ Janice Carlson	103,249
Janice Carlson
/s/ Christie Lennen	28,125
Christie Lennen
/s/ Christie Lennen, Custodian	13,400
Colton Lennen (Cust)
/s/ David Fulcher	27,775
David Fulcher

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VOTING TRUST AGREEMENT
FROM FEBRUARY 1, 2007 TO JANUARY 31, 2010

	Number of
Shareholder	Shares
/s/ David Fulcher, Custodian	13,400
Jessica Fulcher (Cust)
/s/ Laura Gifford	101,244
Laura Gifford
/s/ Laura Gifford, Custodian	9,450
Robert Gifford, Jr (TTEE)
/s/ Laura Gifford, Custodian	24,300
Robert Gifford, Jr (Cust)
/s/ Laura Gifford, Custodian	25,100
Terry Gifford (Cust)
Charles Henry Smith, Sr. Foundation	70,563
/s/ Phyllis Gotschall Wilhelm, Director
Phyllis Gotschall Wilhelm, Director
/s/ Janice Carlson
Janice Carlson, Secretary-Treasurer

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EX-10.17

Exhibit 10.17

Amendment No. 1

SIFCO INDUSTRIES, INC.

CHANGE IN CONTROL SEVERANCE AGREEMENT

This Amendment No. 1 to the Change in Control Severance Agreement (the “Amendment”), dated as of February 5, 2007, is made between SIFCO Industries, Inc. (the “Company”) and Frank A. Cappello (the “Executive”) for the purpose of amending and supplementing the documents and instruments referred to below.

WITNESSETH:

     WHEREAS, the Company and Executive are parties to a Change in Control Severance Agreement made as of September 28, 2000 (the “Agreement” providing for certain severance benefits to Executive in the event of a change in control of the Company; all terms used in the Agreement being used herein with the same meaning); and

     WHEREAS, the Company and Executive desire to amend certain provisions of the Agreement to clarify the amount of severance benefits that were intended to be provided by the Agreement at the time the Agreement was executed;

     NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

Amendment to Agreement — Exhibit A to the Change in Control Severance Agreement – Benefits, “Item a. Severance” is hereby amended in its entirety to read as follows:

a. Severance. In the event the Executive becomes eligible for benefits under Section 5 of the Agreement, the Company shall pay to the Executive or the Executive’s Beneficiary in a lump sum in cash within thirty (30) days after the Executive’s Date of Termination an amount equal to:

(i)

the greater of (i) $140,000 or (ii) one (1.0) times the Executives annual salary;

(ii)

the excess of (A) the actuarial equivalent of the benefit under any qualified defined benefit pension plan the Company may have (the “Retirement Plan”), and any supplemental retirement plan in which the Executive participates (the “SERP”) which the Executive would receive if the Executive’s employment continued for two (2) years after the Date of Termination assuming for this purpose that all accrued benefits are fully vested, over (B) the actuarial equivalent of the Executive’s actual benefit paid or payable, if any, under the Retirement Plan and the SERP as of the Date of Termination.

IN WITNESS WHEREOF, the undersigned have executed this Agreement effective as of the date first written above.

SIFCO INDUSTRIES, INC.	EXECUTIVE
By: /s/ Jeffrey P. Gotschall	/s/ Frank A. Cappello
Title: Chairman and CEO	Signature
	Frank A. Cappello
	Printed Name

1

EX-10.18

Exhibit 10.18

Amendment No. 1

SIFCO INDUSTRIES, INC.

CHANGE IN CONTROL SEVERANCE AGREEMENT

This Amendment No. 1 to the Change in Control Severance Agreement (the “Amendment”), dated as of February 5, 2007, is made between SIFCO Industries, Inc. (the “Company”) and Remigijus H. Belzinskas (the “Executive”) for the purpose of amending and supplementing the documents and instruments referred to below.

WITNESSETH:

     WHEREAS, the Company and Executive are parties to a Change in Control Severance Agreement made as of September 28, 2000 (the “Agreement” providing for certain severance benefits to Executive in the event of a change in control of the Company; all terms used in the Agreement being used herein with the same meaning); and

     WHEREAS, the Company and Executive desire to amend certain provisions of the Agreement to clarify the amount of severance benefits that were intended to be provided by the Agreement at the time the Agreement was executed;

     NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

Amendment to Agreement — Exhibit A to the Change in Control Severance Agreement – Benefits, “Item a. Severance” is hereby amended in its entirety to read as follows:

a. Severance. In the event the Executive becomes eligible for benefits under Section 5 of the Agreement, the Company shall pay to the Executive or the Executive’s Beneficiary in a lump sum in cash within thirty (30) days after the Executive’s Date of Termination an amount equal to:

(i)

the greater of (i) $140,000 or (ii) one (1.0) times the Executives annual salary;

(ii)

the excess of (A) the actuarial equivalent of the benefit under any qualified defined benefit pension plan the Company may have (the “Retirement Plan”), and any supplemental retirement plan in which the Executive participates (the “SERP”) which the Executive would receive if the Executive’s employment continued for two (2) years after the Date of Termination assuming for this purpose that all accrued benefits are fully vested, over (B) the actuarial equivalent of the Executive’s actual benefit paid or payable, if any, under the Retirement Plan and the SERP as of the Date of Termination.

IN WITNESS WHEREOF, the undersigned have executed this Agreement effective as of the date first written above.

SIFCO INDUSTRIES, INC.	EXECUTIVE
By: /s/ Jeffrey P. Gotschall	/s/ Remigijus H. Belzinskas
Title: Chairman and CEO	Signature
	Remigijus H. Belzinskas
	Printed Name

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EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO
RULE 13A-14(A) / 15D-14(A)

I, Jeffrey P. Gotschall, certify that:

1.	I have read this Quarterly Report on Form 10-Q of SIFCO Industries, Inc.
2.	Based on my knowledge, this quarterly 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 quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report;
4.	The registrant’s other certifying officers 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)) for the registrant and have:

a.	designed such disclosure controls and procedures, or caused such internal controls and procedures to be designated 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; and
b.	paragraph omitted pursuant to SEC Release Nos. 33-8238, 33-8545, 34-51293 and 34-47986; and
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; and
b.	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 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 officers 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 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: February 7, 2007	/s/ Jeffrey P. Gotschall
	Jeffrey P. Gotschall
	Chairman of the Board and
	Chief Executive Officer

1

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO
RULE 13A-14(A) / 15D-14(A)

I, Frank A. Cappello, certify that:

1.	I have read this Quarterly Report on Form 10-Q of SIFCO Industries, Inc.
2.	Based on my knowledge, this quarterly 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 quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report;
4.	The registrant’s other certifying officers 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)) for the registrant and have:

a.	designed such disclosure controls and procedures, or caused such internal controls and procedures to be designated 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; and
b.	paragraph omitted pursuant to SEC Release Nos. 33-8238, 33-8545, 34-51293 and 34-47986; and
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; and
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 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 officers 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 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: February 7, 2007	/s/ Frank A. Cappello
	Frank A. Cappello
	Vice President – Finance and
	Chief Financial Officer

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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 December 31, 2006 as filed with the Securities and Exchange Commission on the date hereof (“Report”), I, Jeffrey P. Gotschall, Chairman of the Board and Chief Executive Officer of the Company, certify 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.

/s/ Jeffrey P. Gotschall                    
     Jeffrey P. Gotschall
     Chairman of the Board and
     Chief Executive Officer
     February 7, 2007

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.

1

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 December 31, 2006 as filed with the Securities and Exchange Commission on the date hereof (“Report”), I, Frank A. Cappello, Vice President – Finance and Chief Financial Officer of the Company, certify 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.

/s/ Frank A. Cappello                     
      Frank A. Cappello
      Vice President – Finance and
      Chief Financial Officer
      February 7, 2007

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.