10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended December 31, 2012

or

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

For the transition period from             to             

Commission file number 1-5978

SIFCO Industries, Inc.

(Exact name of registrant as specified in its charter)

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

(216) 881-8600

(Registrant’s telephone number, including area code)

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

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

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

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x

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

The number of the Registrant’s Common Shares outstanding at December 31, 2012 was 5,339,571.

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,
	2012			2011
Net sales	$	28,700		$	24,726
Operating expenses:
Cost of goods sold		23,015			19,940
Selling, general and administrative expenses		3,804			2,796
Amortization of intangible assets		559			815
Gain on disposal of operating assets		(125	)		0
Total operating expenses		27,253			23,551
Operating income		1,447			1,175
Interest income		(5	)		(4	)
Interest expense		106			94
Foreign currency exchange (gain) loss, net		7			(13	)
Other income, net		(77	)		(117	)
Income from continuing operations before income tax provision		1,416			1,215
Income tax provision		495			382
Income from continuing operations		921			833
Income from discontinued operations, net of tax		2,494			353
Net income	$	3,415		$	1,186
Income per share from continuing operations
Basic	$	0.17		$	0.16
Diluted	$	0.17		$	0.16
Income per share from discontinued operations, net of tax
Basic	$	0.47		$	0.06
Diluted	$	0.46		$	0.06
Net income per share
Basic	$	0.64		$	0.22
Diluted	$	0.63		$	0.22
Weighted-average number of common shares (basic)		5,340			5,299
Weighted-average number of common shares (diluted)		5,385			5,325

See notes to unaudited consolidated condensed financial statements.

2

SIFCO Industries, Inc. and Subsidiaries

Consolidated Condensed Statements of Comprehensive Income

(Unaudited)

(Amounts in thousands, except per share data)

	Three Months  Ended December 31,
	2012			2011
Net income	$	3,415		$	1,186
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment		(284	)		(45	)
Net retirement plan liability adjustment		229			202
Interest rate swap agreement adjustment		16			(45	)
Comprehensive income	$	3,376		$	1,298

See notes to unaudited consolidated condensed financial statements.

3

SIFCO Industries, Inc. and Subsidiaries

Consolidated Condensed Balance Sheets

(Amounts in thousands, except per share data)

	December 31, 2012			September 30, 2012
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	5,549		$	7,176
Receivables, net		18,908			20,780
Inventories, net		19,256			17,505
Deferred income taxes		1,343			1,415
Prepaid expenses and other current assets		1,471			1,122
Current assets of business held for sale		0			3,908
Total current assets		46,527			51,906
Property, plant and equipment, net		29,498			29,726
Intangible assets, net		14,068			14,627
Goodwill		7,015			7,015
Other assets		1,692			695
Noncurrent assets of business held for sale		0			2,576
Total assets	$	98,800		$	106,545
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	4,356		$	2,000
Accounts payable		8,551			9,181
Accrued liabilities		7,253			4,330
Current liabilities of business held for sale		0			1,171
Total current liabilities		20,160			16,682
Long-term debt, net of current maturities		6,194			19,683
Deferred income taxes		304			1,154
Other long-term liabilities		8,601			8,494
Noncurrent liabilities of business held for sale		0			390
Shareholders’ equity:
Serial preferred shares, no par value, authorized 1,000 shares		0			0
Common shares, par value $1 per share, authorized 10,000 shares; issued and outstanding shares – 5,366 at December 31, 2012 and September 30, 2012		5,366			5,366
Additional paid-in capital		7,546			7,523
Retained earnings		63,012			59,597
Accumulated other comprehensive loss		(12,383	)		(12,344	)
Total shareholders’ equity		63,541			60,142
Total liabilities and shareholders’ equity	$	98,800		$	106,545

See notes to unaudited consolidated condensed financial statements.

4

SIFCO Industries, Inc. and Subsidiaries

Consolidated Condensed Statements of Cash Flows

(Unaudited)

(Amounts in thousands)

	Three Months Ended December 31,
	2012			2011
Cash flows from operating activities:
Net income	$	3,415		$	1,186
Income from discontinued operations, net of tax		(2,494	)		(353	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		1,519			1,579
Gain on disposal of operating assets		(125	)		0
LIFO expense (income)		(178	)		159
Share transactions under company stock plan		24			239
Other		12			(6	)
Changes in operating assets and liabilities:
Receivables		2,159			3,976
Inventories		(1,573	)		(3,211	)
Refundable income taxes		0			262
Prepaid expenses and other current assets		(348	)		(342	)
Other assets		(997	)		(121	)
Accounts payable		(631	)		(1,848	)
Accrued liabilities		1,636			(126	)
Other long-term liabilities		351			(67	)
Net cash provided by operating activities of continuing operations		2,770			1,327
Net cash used for operating activities of discontinued operations		(235	)		(35	)
Cash flows from investing activities:
Acquisition of business		0			(24,809	)
Proceeds from disposal of operating assets		125			0
Capital expenditures		(733	)		(473	)
Net cash used for investing activities of continuing operations		(608	)		(25,282	)
Net cash provided by (used for) investing activities of discontinued operations		8,676			(53	)
Cash flows from financing activities:
Proceeds from term note		0			10,000
Repayments of term note		(500	)		(500	)
Proceeds from revolving credit agreement		11,511			25,886
Repayments of revolving credit agreement		(22,155	)		(12,270	)
Proceeds from other debt		0			2,400
Dividends paid		(1,073	)		(1,060	)
Other		0			(28	)
Net cash provided by (used for) financing activities of continuing operations		(12,217	)		24,428
Increase (decrease) in cash and cash equivalents		(1,614	)		385
Cash and cash equivalents at the beginning of the period		7,176			6,431
Effect of exchange rate changes on cash and cash equivalents		(13	)		(32	)
Cash and cash equivalents at the end of the period	$	5,549		$	6,784
Supplemental disclosure of cash flow information of continuing operations:
Cash paid for interest	$	(122	)	$	(87	)
Cash paid for income taxes, net		(219	)		(115	)

See notes to unaudited consolidated condensed financial statements.

5

SIFCO Industries, Inc. and Subsidiaries

Notes to Unaudited Consolidated Condensed Financial Statements

(Amounts in thousands, except per share data)

1. Summary of Significant Accounting Policies

A. Principles of Consolidation

The accompanying unaudited consolidated condensed financial statements include the accounts of SIFCO Industries, Inc. and its wholly-owned subsidiaries (the “Company”). All significant intercompany accounts and transactions have been eliminated.

The U.S. dollar is the functional currency for all of the Company’s U.S. operations and its Irish subsidiary. For these operations, all gains and losses from completed currency transactions are included in income currently. Foreign currency translation adjustments are reported as a component of accumulated other comprehensive loss in the unaudited consolidated condensed financial statements.

These unaudited consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s fiscal 2012 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 may have been reclassified in order to conform to current period classifications.

B. Net Income per Share

The Company’s net income per basic share has been computed based on the weighted-average number of common shares outstanding. Net income per diluted share reflects the effect of the Company’s outstanding stock options, restricted shares and performance shares under the treasury stock method. The dilutive effect of the Company’s stock options, restricted shares and performance shares were as follows:

	Three Months  Ended December 31,
	2012		2011
Income from continuing operations	$	921	$	833
Income from discontinued operations, net of tax		2,494		353
Net income	$	3,415	$	1,186
Weighted-average common shares outstanding (basic)		5,340		5,299
Effect of dilutive securities:
Stock options		1		26
Restricted shares		8		0
Performance shares		36		0
Weighted-average common shares outstanding (diluted)		5,385		5,325
Net income per share – basic
Continuing operations	$	0.17	$	0.16
Discontinued operations		0.47		0.06
Net income	$	0.64	$	0.22
Net income per share – diluted:
Continuing operations	$	0.17	$	0.16
Discontinued operations		0.46		0.06
Net income	$	0.63	$	0.22

Outstanding share awards relating to approximately 105 and 142 weighted average shares were excluded from the calculation of diluted earnings per share for the three months ended December 31, 2012 and 2011, respectively, as the impact of including such share awards in the calculation of diluted earnings per share would have had an anti-dilutive effect.

6

C. Derivative Financial Instruments

The Company uses an interest rate swap agreement to reduce risk related to variable-rate debt, which is subject to changes in market rates of interest. The interest rate swap is designated as a cash flow hedge. At December 31, 2012, the Company held one interest rate swap agreement with a notional amount of $7,500. Cash flows related to the interest rate swap agreement are included in interest expense. The Company’s interest rate swap agreement and its variable-rate term debt are based upon LIBOR. During the first quarter of fiscal year 2013, the Company’s interest rate swap agreement qualified as a fully effective cash flow hedge against the Company’s variable-rate term note interest risk.

2. Inventories

Inventories consist of:

	December 31, 2012		September 30, 2012
Raw materials and supplies	$	6,001	$	4,207
Work-in-process		7,567		9,156
Finished goods		5,688		4,142
Total inventories	$	19,256	$	17,505

Inventories are stated at the lower of cost or market. Cost is determined using the last-in, first-out (“LIFO”) method for 46% and 44% of the Company’s inventories at December 31, 2012 and September 30, 2012, 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 $9,359 and $9,537 higher than reported at December 31, 2012 and September 30, 2012, respectively.

3. Goodwill and Intangible Assets

The Company’s intangible assets by major asset class subject to amortization consist of:

December 31, 2012	Estimated Useful Life		Original Cost		Accumulated Amortization		Net Book Value
Intangible assets:
Trade name		10 years	$	1,900	$	302	$	1,598
Non-compete agreement		5 years		1,500		439		1,061
Below market lease		5 years		900		370		530
Customer relationships		10 years		13,000		2,121		10,879
Order backlog		1 year		2,100		2,100		0
Transition services agreement		< 1 year		23		23		0
Total intangible assets			$	19,423	$	5,355	$	14,068
September 30, 2012	Estimated Useful Life		Original Cost		Accumulated Amortization		Net Book Value
Intangible assets:
Trade name		10 years	$	1,900	$	254	$	1,646
Non-compete agreement		5 years		1,500		364		1,136
Below market lease		5 years		900		325		575
Customer relationships		10 years		13,000		1,796		11,204
Order backlog		1 year		2,100		2,034		66
Transition services agreement		< 1 year		23		23		0
Total intangible assets			$	19,423	$	4,796	$	14,627

7

The amortization expense on identifiable intangible assets for the three months ended December 31, 2012 and 2011 was $559 and $815, respectively. Amortization expense associated with the identified intangible assets, all of which relates to the Forged Components Group, is expected to be as follows:

	Amortization Expense
Fiscal year 2013	$	2,037
Fiscal year 2014		1,970
Fiscal year 2015		1,970
Fiscal year 2016		1,744
Fiscal year 2017		1,507

The Company’s goodwill, all of which relates to the Forged Components Group is not being amortized and is subject to annual impairment tests. All of the goodwill is expected to be deductible for tax purposes.

4. Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss are as follows:

	December 31, 2012			September 30, 2012
Foreign currency translation adjustment, net of tax	$	(5,850	)	$	(5,566	)
Net retirement plan liability adjustment, net of tax		(6,491	)		(6,720	)
Interest rate swap agreement adjustment, net of tax		(42	)		(58	)
Total accumulated other comprehensive loss	$	(12,383	)	$	(12,344	)

5. Long-Term Debt

Long-term debt consists of:

	December 31, 2012		September 30, 2012
Revolving credit agreement	$	694	$	11,338
Term loan		7,500		8,000
Promissory Note		2,356		2,345
		10,550		21,683
Less – current maturities		4,356		2,000
Total long-term debt	$	6,194	$	19,683

In October 2011, the Company entered into an amendment to its existing credit agreement (the “Credit Agreement Amendment”) with its bank increasing the maximum borrowing amount from $30,000 to $40,000, of which $10,000 is a five (5) year term loan and $30,000 is a five (5) year revolving loan, secured by substantially all the assets of the Company and its U.S. subsidiaries and a pledge of 65% of the stock of its Irish subsidiary. The term loan is repayable in quarterly installments of $500 starting December 1, 2011.

The term loan has a Libor-based variable interest rate that was 2.2% at December 31, 2012 and which becomes an effective fixed rate of 2.9% after giving effect to an interest rate swap agreement. Borrowing under the revolving loan bears interest at a rate equal to Libor plus 0.75% to 1.75%, which percentage fluctuates based on the Company’s leverage ratio of outstanding indebtedness to EBITDA. At December 31, 2012, the interest rate was 1.25%. The loans are subject to certain customary financial covenants including, without limitation, covenants that require the Company to not exceed a maximum leverage ratio and to maintain a minimum fixed charge coverage ratio. There is also a commitment fee ranging from 0.10% to 0.25% to be incurred on the unused balance. The Company was in compliance with all applicable loan covenants as of December 31, 2012.

8

In connection with the acquisition of the QAF business, as discussed more fully in Note 11, the Company issued a non-interest bearing promissory note to the seller, which note is payable by the Company in November, 2013. The imputed interest rate used to discount the note was 2% per annum.

6. Government Grants

In the past, the Company received grants from certain government entities as an incentive to invest in facilities, research and employees. Remaining grants, principally capital in nature, are amortized into income over the estimated useful lives of the related assets. The unamortized portion of deferred grant revenue recorded in other long-term liabilities at December 31, 2012 and September 30, 2012 was $338 and $334, respectively. The Company’s grants are denominated primarily in Euros. The Company adjusts its deferred grant revenue balance in response to currency exchange rate fluctuations for as long as such grants are treated as obligations.

7. Income Taxes

For each interim reporting period, the Company makes an estimate of the effective tax rate it expects to be applicable for the full fiscal year for its continuing operations. This estimated effective rate is used in providing for income taxes on a year-to-date basis. The Company’s effective tax rate through the first three months of fiscal 2013 is 35%, compared to 31% for the same period in fiscal 2012, and differs from the U.S. federal statutory rate due primarily to (i) the impact of U.S. state and local income taxes, (ii) a domestic production activities deduction, (iii) application of tax credits, and (iv) the recognition of U.S. federal income taxes on undistributed earnings of non-U.S. subsidiaries. The income tax provision consists of the following:

	Three Months Ended December 31,
	2012		2011
Current income tax provision:
U.S. federal	$	419	$	334
U.S. state and local		70		58
Non-U.S		6		15
Total current tax provision		495		407
Deferred income tax provision (benefit):
U.S. federal		0		(25	)
Non-U.S		0		0
Total deferred tax provision		0		(25	)
Income tax provision	$	495	$	382

The Company is subject to income taxes in the U.S. federal jurisdiction, and various state, local and non-U.S. jurisdictions. The Company’s federal income tax return for fiscal 2011 and the amended federal income tax return for fiscal 2008 are under review by the Internal Revenue Service, the outcome of which is not known at this time. The Company believes it has appropriate support for its federal income tax returns. The Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for fiscal years prior to 2006.

At December 31, 2012 and September 30, 2012, the Company recorded liabilities of $122 and $120, respectively, for uncertain tax positions and any related interest and penalties. The Company classifies any interest and penalties related to uncertain tax positions in income tax expense. A summary of activity related to the Company’s uncertain tax positions is as follows:

Balance at September 30, 2012	$	120
Increase due to tax positions taken in prior years		2
Balance at December 31, 2012	$	122

9

8. 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,
	2012			2011
Service cost	$	75		$	71
Interest cost		215			247
Expected return on plan assets		(372	)		(351	)
Amortization of prior service cost		13			12
Amortization of net loss		215			210
Net periodic benefit cost	$	146		$	189

Through December 31, 2012, the Company has made contributions in the amount of $174 to its defined benefit pension plans. The Company anticipates making $662 of additional contributions to fund its defined benefit pension plans during the balance of fiscal 2013.

9. Stock-Based Compensation

In previous periods, 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. All options awarded under both plans are fully vested as of December 31, 2012.

At December 31, 2012 and 2011, there was no unrecognized compensation cost related to the stock options granted under the Company’s stock option plans. There was no compensation expense related to stock options recognized in the three months ended December 31, 2012 and 2011. There is one outstanding and exercisable option as of December 31, 2012, which is fully vested, has a weighted average remaining term of 2.5 years, and an intrinsic value of $12.

The Company has awarded performance and restricted shares under its shareholder approved 2007 Long-Term Incentive Plan (“2007 Plan”). The aggregate number of shares that may be awarded under the 2007 Plan is 600 less any shares previously awarded and subject to an adjustment for the forfeiture of any unissued shares. In addition, shares that may be awarded are subject to individual recipient award limitations. The shares awarded under the 2007 Plan may be made in multiple forms including stock options, stock appreciation rights, restricted or unrestricted stock, and performance related shares. Any such awards are exercisable no later than ten years from date of grant.

The performance shares that have been awarded under the 2007 Plan generally provide for the issuance of the Company’s common shares upon the Company achieving certain defined financial performance objectives during a period up to three years following the making of such award. The ultimate number of common shares of the Company that may be earned pursuant to an award ranges from a minimum of no shares to a maximum of 150% of the initial target number of performance shares awarded, depending on the level of the Company’s achievement of its financial performance objectives.

With respect to such performance shares, compensation expense is being accrued at (i) 100% of the target levels for recipients of the performance shares awarded during fiscal 2013, and (ii) 50% of the target levels for recipients of the performance shares awarded during fiscal 2012 and 2011. During each future reporting period, such expense may be subject to adjustment based upon the Company’s subsequent estimate of the number of common shares that it expects to issue upon the completion of the performance period. The performance shares were valued at the closing market price of the Company’s common shares on the date of grant. The vesting of such shares is determined at the end of the performance period.

The Company has awarded restricted shares to certain of its directors. The restricted shares were valued at the closing market price of the Company’s common shares on the date of grant, and such value was recorded as unearned compensation. The unearned compensation is being amortized ratably over the restricted stock vesting period of one (1) to three (3) years.

If all outstanding share awards are ultimately earned and issued at the target number of shares, then at December 31, 2012 there are approximately 368 shares that remain available for award. If any of the outstanding share awards are ultimately earned and issued at greater than the target number of shares, up to a maximum of 150% of such target, then a fewer number of shares would be available for award.

10

Compensation expense related to all performance and restricted shares awarded under the 2007 Plan was $24 and $239 during the first three months of fiscal 2013 and 2012, respectively. As of December 31, 2012, there was $1,258 of total unrecognized compensation cost related to the performance and restricted shares awarded under the 2007 Plan. The Company expects to recognize this cost over the next 2.8 years.

The following is a summary of activity related to the target number of shares awarded and the actual number of shares earned under the 2007 Plan:

	Number of Shares			Weighted Average Fair Value at Date of Grant
Outstanding at September 30, 2012		158		$	18.30
Performance shares awarded (2013 award)		49			16.03
Performance shares earned (2010 award)		(29	)		15.75
Awards forfeited (various awards)		(28	)		17.00
Outstanding at December 31, 2012		150		$	18.30

10. Business Segments

The Company identifies reportable segments based upon distinct products manufactured and services performed. The Forged Components Group (“Forge Group”) consists of the production, heat-treatment, surface-treatment, non-destructive testing and some machining of both conventional and precision forged components in various steel, titanium and aluminum alloys utilizing a variety of processes for application principally in the aerospace and power generation industries. The Turbine Component Services and Repair Group (“Repair Group”) consists primarily of the repair and remanufacture of small aerospace and industrial turbine engine components, and is also involved in providing precision component machining and industrial coating of turbine engine components. The Company’s reportable segments are separately managed. The following table summarizes certain information regarding segments of the Company’s continuing operations:

	Three Months Ended December 31,
	2012			2011
Net sales:
Forged Components Group	$	27,445		$	22,688
Turbine Component Services and Repair Group		1,255			2,038
Consolidated net sales	$	28,700		$	24,726
Operating income (loss):
Forged Components Group	$	3,548		$	2,186
Turbine Component Services and Repair Group		(544	)		(133	)
Corporate unallocated expenses		(1,557	)		(878	)
Consolidated operating income		1,447			1,175
Interest expense, net		101			90
Foreign currency exchange (gain) loss, net		7			(13	)
Other income, net		(77	)		(117	)
Consolidated income from continuing operations before income tax provision	$	1,416		$	1,215
Depreciation and amortization expense:
Forged Components Group	$	1,363		$	1,428
Turbine Component Services and Repair Group		81			77
Corporate unallocated expenses		75			74
Consolidated depreciation and amortization expense	$	1,519		$	1,579
LIFO expense (income) for the Forged Components Group	$	(178	)	$	159

11

	December 31, 2012		September 30, 2012
Identifiable assets
Forged Components Group	$	84,406	$	84,518
Turbine Component Services and Repair Group		3,172		3,480
Corporate		11,222		12,063
Assets of business held for sale		0		6,484
Consolidated total assets	$	98,800	$	106,545

11. Business Acquisition

On October 28, 2011, through its wholly-owned subsidiary, Forge Acquisition, LLC – now known as Quality Aluminum Forge, LLC (“QAF”), the Company completed the purchase of the forging business and substantially all related operating assets from GEL Industries, Inc. (DBA Quality Aluminum Forge, Inc.). The forging business is operated in QAF’s Orange and Long Beach, California facilities, all of which are leased. The QAF purchase transaction was accounted for under the purchase method of accounting.

The results of operation of QAF from its date of acquisition are included in the Company’s unaudited consolidated condensed statements of operations and are reported in the Forge Group. The following unaudited pro forma information presents a summary of the results of operations for the Company including QAF as if the acquisition had occurred on October 1, 2011:

	Three Months Ended December 31,
	2012		2011
Net sales	$	28,700	$	26,240
Net income		3,458		1,140
Net income per share (basic)		0.65		0.22
Net income per share (diluted)	$	0.64	$	0.21

12. Discontinued Operations, Assets Held for Sale, and Business Divestiture

On December 10, 2012, the Company completed the divestiture of its Applied Surface Concepts (“ASC Group”) business segment to Norman Hay plc, located in the United Kingdom. The Company received cash proceeds, net of certain transaction fees, of approximately $8,114 for this business and $994 was placed in escrow, pending the final working capital adjustment and/or indemnification holdback provisions under the sale agreement. The ASC Group business includes its U.S. operations, headquartered in Cleveland, Ohio, and three European operations located in France, Sweden and the United Kingdom. The ASC Group business develops, manufactures and sells selective plating products and provides contract services for low volume repair, refurbishment and OEM applications. The transaction resulted in a pre-tax gain of $4,014 in the first three months of fiscal 2013.

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There were no assets or liabilities held for sale at December 31, 2012. The table below presents the components of the balance sheet accounts classified as assets and liabilities held for sale at September 30, 2012.

Assets:
Receivables, net	$	2,574
Inventories		1,188
Deferred income taxes		47
Prepaid expenses and other current assets		99
Total current assets of business held for sale	$	3,908
Property, plant and equipment, net	$	2,533
Other assets		43
Total noncurrent assets of business held for sale	$	2,576
Liabilities:
Current maturities of debt	$	2
Accounts payable		546
Accrued liabilities		623
Total current liabilities of business held for sale	$	1,171
Deferred income taxes	$	388
Other long-term liabilities		2
Total noncurrent liabilities of business held for sale	$	390

The financial results of ASC Group included in discontinued operations were as follows:

	Three Months Ended December 31,
	2012		2011
Net sales	$	2,727	$	3,784
Income before income tax provision		180		517
Provision for income taxes on operations		48		164
Income from operations, net of tax		132		353
Gain on sale of discontinued operations		4,014		0
Provision for income taxes on gain on sale		1,652		0
Gain on sale of discontinued operations, net of tax		2,362		0
Income from discontinued operations, net of tax	$	2,494	$	353

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

Management’s Discussion and Analysis of Financial Condition and Results of Operations may contain various forward-looking statements and includes assumptions concerning the Company’s operations, future results and prospects. These forward-looking statements are based on current expectations and are subject to risk and uncertainties. In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, the Company provides this cautionary statement identifying important economic, political and technological factors, among others, the absence or effect of which could cause the actual results or events to differ materially from those set forth in or implied by the forward-looking statements and related assumptions. Such factors include the following: (1) the impact on business conditions in general, and on the demand for product in the aerospace and power generation industries in particular, of the global economic outlook, including the continuation of military spending at or near current levels and the availability of capital and liquidity from banks and other providers of credit; (2) future business environment, including capital and consumer spending; (3) competitive factors, including the ability to replace business which may be lost; (4) successful development of turbine component repair processes and/or procurement of new repair process licenses from turbine engine manufacturers and/or the Federal Aviation Administration; (5) metals and commodities price increases and the Company’s ability to recover such price increases; (6) successful development and market introduction of new products and services; (7) continued reliance on consumer acceptance of regional and business aircraft powered by more fuel efficient turboprop engines; (8) continued reliance on military spending, in general, and/or several major customers, in particular, for revenues; (9) the impact on future contributions to the Company’s defined benefit pension plans due to changes in actuarial assumptions, government regulations and the market value of plan assets; (10) stable governments, business conditions, laws, regulations and taxes in economies where business is conducted and (11) the ability to successfully integrate businesses that may be acquired into the Company’s operations.

The Company 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 both conventional and precision forging, heat-treating, coating, welding, and precision component machining and selective plating. The products include conventional and precision forged components, machined forged components, other machined metal components, and remanufactured component parts for turbine engines. The Company’s operations are conducted in two business segments: (1) Forged Components Group and (2) Turbine Component Services and Repair Group. 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 build rate for industrial gas turbine engines, and (iii) the projected maintenance, repair and overhaul schedules for commercial, business and military aircraft as well as the engines that power such aircraft.

A. Results of Operations

Non-GAAP Financial Measures

Presented below is certain financial information based on our EBITDA and Adjusted EBITDA. References to “EBITDA” mean earnings from continuing operations before interest, taxes, depreciation and amortization, and references to “Adjusted EBITDA” mean EBITDA plus, as applicable for each relevant period, certain adjustments as set forth in the reconciliations of net income to EBITDA and Adjusted EBITDA.

Neither EBITDA nor Adjusted EBITDA is a measurement of financial performance under accounting principles generally accepted in the United States of America (“GAAP”). The Company presents EBITDA and Adjusted EBITDA because (i) it believes they are useful indicators for evaluating operating performance and liquidity, including the Company’s ability to incur and service debt and (ii) it uses EBITDA to evaluate prospective acquisitions. Although the Company uses EBITDA and Adjusted EBITDA for the reasons noted, the use of these non-GAAP financial measures as analytical tools has limitations and, therefore, reviewers of the Company’s financial information should not consider them in isolation, or as a substitute for analysis of its results of operations as reported in accordance with GAAP. Some of these limitations are:

• Neither EBITDA nor Adjusted EBITDA reflects the interest expense, or the cash requirements necessary to service interest payments, on indebtedness;

• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and neither EBITDA nor Adjusted EBITDA reflects any cash requirements for such replacements;

• The omission of the substantial amortization expense associated with the Company’s intangible assets further limits the usefulness of EBITDA and Adjusted EBITDA;

• Neither EBITDA nor Adjusted EBITDA includes the payment of taxes, which is a necessary element of operations; and

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• Adjusted EBITDA excludes the cash expense the Company has incurred to acquire businesses.

Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as measures of discretionary cash available to the Company to invest in the growth of its businesses. Management compensates for these limitations by not viewing EBITDA or Adjusted EBITDA in isolation and specifically by using other GAAP measures, such as net income, net sales and operating profit, to measure operating performance. Neither EBITDA nor Adjusted EBITDA is a measurement of financial performance under GAAP, and neither should be considered as an alternative to net income or cash flow from operations determined in accordance with GAAP. The Company’s calculation of EBITDA and Adjusted EBITDA may not be comparable to the calculation of similarly titled measures reported by other companies.

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

(Dollars in thousands)	Three Months Ended December 31,
	2012			2011
Net income	$	3,415		$	1,186
Less: Income from discontinued operations, net of tax		2,494			353
Income from continuing operations		921			833
Adjustments:
Depreciation and amortization expense		1,519			1,579
Interest expense, net		101			90
Income tax provision		495			382
EBITDA		3,036			2,884
Adjustments:
Inventory purchase accounting adjustments (1)		0			225
Acquisition transaction-related expenses (2)		15			137
Equity compensation expense (3)		24			239
Non-recurring severance expense (4)		813			0
LIFO expense (income) (5)		(178	)		159
Adjusted EBITDA	$	3,710		$	3,644

(1) Represents accounting adjustments to inventory associated with acquisitions of businesses that were charged to cost of goods sold when the inventory was sold.

(2) Represents transaction-related costs comprising legal, financial and tax due diligence expenses; and valuation services costs that are required to be expensed as incurred.

(3) Represents the equity based compensation expense recognized by the Company under its 2007 Long-term Incentive Plan.

(4) Represents severance expense related to the departure of an executive officer.

(5) Represents the increase (decrease) in the reserve for inventories for which cost is determined using the last in, first out (“LIFO”) method.

Three Months Ended December 31, 2012 compared with Three Months Ended December 31, 2011

Net sales from continuing operations in the first quarter of fiscal 2013 increased 16.1% to $28.7 million, compared with $24.7 million in the comparable period in fiscal 2012 due primarily to a $4.7 million increase in the Forged Components Group’s net sales volume. Income from continuing operations in the first quarter of fiscal 2013 was $0.9 million, compared with $0.8 million in the comparable period of fiscal 2012. The $1.3 million increase in the Forged Components Group’s operating income in the first quarter of fiscal 2013 was partially offset by $0.8 million of non-recurring severance cost recognized in the first quarter of fiscal 2013 and a $0.4 million decrease in the Turbine Component Services and Repair Group’s operating income in the first quarter of fiscal 2013. Income from discontinued operations, net of tax, which consists of the Company’s former Applied Surface Concepts segment, was $2.5 million in the first quarter of fiscal 2013, compared with $0.4 million in the comparable period of fiscal 2012. Net income in the first quarter of fiscal 2013 was $3.4 million, compared with $1.2 million in the comparable period of fiscal 2012.

In December 2012, the Company completed the divestiture of its Applied Surface Concepts (“ASC Group”) business segment. In October 2011, the Company completed the purchase of the forging business and substantially all related operating assets from GEL Industries, Inc. (DBA Quality Aluminum Forge, Inc.) (“QAF”).

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Forged Components Group (“Forge Group”)

The Forge Group consists of the production, heat-treatment, surface-treatment, non-destructive testing, and machining of both conventional and precision forged components in various steel, titanium and aluminum alloys utilizing a variety of processes for application principally in the aerospace and power generation industries. The Forge Group’s results for the first quarter of fiscal 2012 include the results of QAF from the date of its acquisition. Net sales in the first quarter of fiscal 2013 increased 21.0% to $27.4 million, compared with $22.7 million in the comparable period of fiscal 2012. The Forge Group produces forged components for (i) turbine engines that power commercial, business and regional aircraft as well as military aircraft and armored military vehicles; (ii) airframe applications for a variety of aircraft; (iii) industrial gas turbine engines for power generation units; and (iv) other commercial applications. Net sales comparative information for the first quarter of fiscal 2013 and 2012, respectively, is as follows:

(Dollars in millions)	Three Months Ended December 31,				Increase (Decrease)
Net Sales	2012		2011
Aerospace components for:
Fixed wing aircraft	$	13.8	$	10.7	$	3.1
Rotorcraft		8.0		6.7		1.3
Components for power generation units		4.7		4.7		0.0
Commercial product sales and other revenue		0.9		0.6		0.3
Total	$	27.4	$	22.7	$	4.7

The increase in net sales of forged components for fixed wing aircraft during the first quarter of fiscal 2013, compared with the comparable period in fiscal 2012, is principally due to the impact of the acquisition of QAF during the first quarter of fiscal 2012 and additional sales volume. Net sales of aerospace components for rotorcraft increased in the first quarter of fiscal 2013 principally due to increased sales volumes.

The Forge Group’s aerospace components have both military and commercial applications. Net sales of such components that solely have military applications were $9.2 million in the first quarter of fiscal 2013, compared with $7.8 million in the comparable period in fiscal 2012. Demand for additional military helicopters and related replacement components are the primary driver of such military sales demand.

The Forge Group’s cost of goods sold increased $3.4 million to $21.6 million, or 78.6% of net sales, during the first quarter of fiscal 2013, compared with $18.1 million, or 80.0% of net sales in the comparable period of fiscal 2012. Cost of goods sold as a percentage of net sales decreased in the first quarter of fiscal 2013, compared with the comparable period in fiscal 2012, due to the net impact of the changes in the following components of manufacturing related expenditures:

• The material component of manufacturing costs was approximately 32.5% of net sales during the first quarter of fiscal 2013, compared with 36.7% of net sales in the comparable period of fiscal 2012, due primarily to favorable material pricing and improvements in material utilization during the first quarter of fiscal 2013, compared with the comparable period of fiscal 2012.

• All other manufacturing costs were approximately 46.1% of net sales during the first quarter of fiscal 2013, compared with 43.2% of net sales in the comparable period in fiscal 2012. Labor costs were 5.8% of net sales in the first quarter of fiscal 2013, compared with 5.2% of net sales in the comparable period in fiscal 2012, principally due to the mix of products sold—a higher concentration of products with higher value added content were sold during the first quarter of fiscal 2013, compared with the comparable period in fiscal 2012. The Forge Group also experienced a reduction in its labor efficiency during the first quarter of fiscal 2013.

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The following changes in the components of the Forge Group’s other manufacturing overhead expenditures during the first quarter of fiscal 2013 compared with the comparable period of fiscal 2012, a portion of which was due to the acquisition of QAF, also impacted cost of goods sold:

(Dollars in millions)	Three Months Ended December 31,				Increase (Decrease)
Manufacturing expenditures	2012		2011
Overhead:
Utilities	$	1.1	$	1.1	$	0.0
Repairs, maintenance and supplies		1.3		1.1		0.2
Depreciation		0.8		0.6		0.2
Rent		0.1		0.1		0.0
Tooling		0.8		0.7		0.1

Manufacturing costs in the first quarter of fiscal 2013, compared with the same period in fiscal 2012, increased due to (i) an increase in manufacturing expenditures required to support the $4.8 million of additional product sales volume for the Forge Group and (ii) an increase in depreciation, primarily attributable to the acquisitions of QAF.

The Forge Group’s selling, general and administrative expenses were $2.4 million, or 8.9% of net sales, in the first quarter of fiscal 2013, compared with $2.4 million, or 10.4% of net sales, in the comparable period in fiscal 2012. The Forge Group’s selling, general and administrative expenses in the first quarter of fiscal 2013, before the impact of $0.5 million of amortization of intangible assets, was $1.9 million, or 6.9% of net sales. The Forge Group’s selling, general and administrative expenses in the first quarter of fiscal 2012, before the impact of $0.8 million of amortization of intangible assets, was $1.6 million or 6.8% of net sales.

The Forge Group’s operating income increased $1.3 million to $3.5 million in the first quarter of fiscal 2013, compared with $2.2 million in the comparable period in fiscal 2012. The following is a comparison of operating income on both a LIFO and FIFO basis:

(Dollars in millions)	Three Months Ended December 31,					Increase (Decrease)
Operating Income	2012			2011
Operating income	$	3.5		$	2.2	$	1.3
LIFO expense (income)		(0.2	)		0.2		(0.4	)
Operating income without LIFO effect	$	3.3		$	2.4	$	0.9

Operating income in the first quarter of fiscal 2013 was favorably impacted by (i) additional product sales volumes that resulted in part from the acquisition of QAF and (ii) favorable material pricing and improvements in material utilization. This was partially offset by higher labor and overhead principally related to the mix of product sold – a higher concentration of product sales with a higher value-added content were sold in the first quarter of fiscal 2013, compared with the same period in fiscal 2012.

The Forge Group’s backlog as of December 31, 2012 was $104.2 million, of which $87.0 million was scheduled for delivery over the next twelve months, compared with $106.0 million as of September 30, 2012, of which $87.8 million was scheduled for delivery over the next twelve months. All orders are subject to modification or cancellation by the customer with limited charges. Delivery lead times for certain raw materials (e.g. aerospace grades of steel) have shortened due to increased supply and the Forge Group believes that such lead time changes may ultimately result in a fundamental shift in the ordering pattern of its customers. The Forge Group believes that a likely result of such a shift is that customers may delay placing orders, which may result in a decrease, relative to comparable prior year periods, in the Forge Group’s backlog. Accordingly, such backlog decrease, to the extent it may occur, is not necessarily indicative of actual sales expected for any succeeding period.

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

Net sales, which consist principally of component repair services (including precision component machining and industrial coatings) for small aerospace turbine engines, decreased 38.4% in the first quarter of fiscal 2013 to $1.3 million, compared with $2.0 million in the comparable fiscal 2012 period. The decrease in net sales in the first quarter of fiscal 2013 is attributable to a decrease in sales volumes, compared with the same period in fiscal 2012.

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The Repair Group’s cost of goods sold decreased $0.4 million to $1.4 million, or 114.1% of net sales, in the first quarter of fiscal 2013, compared with $1.8 million, or 88.5% of net sales, in the comparable period in fiscal 2012. Cost of goods sold as a percentage of net sales increased in the first quarter of fiscal 2013 compared with the comparable period in fiscal 2012 principally due to the Repair Group maintaining a minimum/base cost structure that has a large fixed component that is determined necessary to sustain an operation with relevant capabilities.

During the first quarter of fiscal 2013, the Repair Group’s selling, general and administrative expenses were $0.4 million, or 29.3% of net sales, compared with $0.4 million, or 18.0% of net sales, in the comparable fiscal 2012 period.

The Repair Group’s operating income decreased $0.4 million to a loss of $0.5 million in the first quarter of fiscal 2013, compared with a loss of $0.1 million in the comparable period in fiscal 2012. Operating income in the first quarter of fiscal 2013 was negatively impacted by the lower sales volumes in relation to the fixed portion of the Repair Group’s operating cost structure.

The Repair Group’s backlog was $0.9 million as of December 31, 2012 compared with $1.0 million as of September 30, 2012. At December 31, 2012, $0.1 million of the total backlog was scheduled for delivery over the next twelve months.

Corporate Unallocated Expenses

Corporate unallocated expenses, consisting of corporate salaries and benefits, legal and professional and other expenses that are not related to and, therefore, not allocated to the business segments, were $1.6 million in the first quarter of fiscal 2013, compared with $0.9 million in the same period in fiscal 2012. This increase is primarily due to $0.8 million of non-recurring severance costs incurred in the first quarter of fiscal 2013.

Other/General

Interest expense was $0.1 million in both the first quarter of fiscal 2013 and 2012. In connection with the October 2011 acquisition of the QAF business, the Company borrowed $12.4 million from its revolving credit agreement and $10.0 million on a term note, and issued a $2.4 million promissory note to the seller of the QAF business. The following table sets forth the weighted average interest rates and weighted average outstanding balances under the Company’s debt agreement in the first quarters of both fiscal 2013 and 2012:

	Weighted Average Interest Rate Three Months Ended December 31,						Weighted Average Outstanding Balance Three Months Ended December 31,
	2012			2011			2012		2011
Revolving credit agreement		1.3	%		1.3	%	$	8.4 million	$	10.0 million
Term note		2.9	%		2.9	%	$	7.8 million	$	9.8 million
Promissory note		2.0	%		2.0	%	$	2.3 million	$	2.3 million

Other income, net consists principally of $0.1 million of rental income earned from the lease of the Cork, Ireland facility.

Income from Discontinued Operations, Net of Tax

Net income from discontinued operations, net of tax, increased $2.1 million to $2.5 million in the first quarter of fiscal 2013, compared with $0.4 million in the comparable period in fiscal 2012, primarily due to the after tax gain of $2.4 million on the sale of the ASC Group during the first quarter of fiscal 2013.

B. Liquidity and Capital Resources

Cash and cash equivalents decreased $1.6 million to $5.5 million at December 31, 2012 from $7.2 million at September 30, 2012. At December 31, 2012, essentially all of the $5.5 million of the Company’s cash and cash equivalents were in the possession of its non-operating Irish subsidiary. Distributions from the Company’s Irish subsidiary to the Company may be subject to statutory restriction, adverse tax consequences or other limitations.

The Company’s operating activities provided $2.5 million of cash (of which $2.8 million was from continuing operations) in the first quarter of fiscal 2013 compared with $1.3 million of cash provided by operating activities (of which essentially the entire $1.3 million was from continuing operations) in the first quarter of fiscal 2012. The $2.8 million of cash provided by operating activities from continuing operations in the first quarter of fiscal 2013 was primarily due to (i) income from

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continuing operations of $0.9 million; (ii) $1.3 million from the impact of such non-cash items as depreciation and amortization expense, deferred taxes, equity based compensation expense and LIFO income; (iii) and a $2.2 million decrease in accounts receivable and a $1.6 million increase in accrued liabilities. These items were partially offset by (i) a $1.6 million increase in inventories, a $0.3 million increase in prepaid expenses, and a $1.0 million increase in other non-current assets; along with (ii) a $0.6 million decrease in accounts payable. These changes were due primarily to recognition of an accrual of nonrecurring severance related to the departure of an executive officer and factors resulting from normal business conditions of the Company, including (i) to support growth in business, (ii) the relative timing of collections from customers, (iii) the relative timing of payments to suppliers and tax authorities, and (iv) recognition of escrow funds receivable related to the divestiture of the Applied Surface Concepts business.

Capital expenditures were $0.7 million in the first quarter of fiscal 2013 compared with $0.5 million in the comparable fiscal 2012 period. Capital expenditures during the first quarter of fiscal 2013 consist of $0.6 million by the Forge Group and $0.1 million by the Repair Group. In addition to the $0.7 million expended during the first quarter of fiscal 2013, $0.9 million has been committed as of December 31, 2012. The Company anticipates that total fiscal 2013 capital expenditures will be within the range of $3.5 to $4.5 million and will relate principally to the expansion of the Forge Group’s production capabilities.

As described more fully in note 11 to the unaudited consolidated condensed financial statements, the Company acquired a forging business in October 2011 for approximately $24.9 million. The acquisition was financed by borrowing approximately $22.4 million from its bank, which borrowing consisted of a new $10.0 million term loan and drawing approximately $12.4 million from its revolving credit facility. The balance of the acquisition was financed by the Company issuing a $2.4 million promissory note to the seller.

As described more fully in note 12 to the unaudited consolidated condensed financial statements, the Company completed the divestiture of its Applied Surface Concepts (“ASC Group”) business segment in December 2012. The Company received net cash proceeds of approximately $8.1 million, net of certain transaction fees,. These proceeds were used to pay down the Company’s revolving loan. In conjunction with this divestiture, the Company’s ASC Group non-U.S. subsidiaries paid a $1.1 million cash dividend to the Company. Proceeds from this dividend were used to pay down the Company’s revolving loan during the first quarter of fiscal 2013.

In October 2011, the Company entered into an amendment to its existing credit agreement (the “Credit Agreement Amendment”) with its bank increasing the maximum borrowing amount from $30.0 million to $40.0 million, of which $10.0 million is a five (5) year term loan and $30.0 million is a five (5) year revolving loan, secured by substantially all the assets of the Company and its U.S. subsidiaries and a pledge of 65% of the stock of its Irish subsidiary. The term loan is repayable in quarterly installments of $0.5 million starting December 1, 2011.

The term loan has a variable interest rate based on Libor, which becomes an effective fixed rate of 2.9% after giving effect to an interest rate swap agreement. Borrowing under the revolving loan bears interest at a rate equal to Libor plus 0.75% to 1.75%, which percentage fluctuates based on the Company’s leverage ratio of outstanding indebtedness to EBITDA. The bank loans are subject to certain customary financial covenants including, without limitation, covenants that require the Company to not exceed a maximum leverage ratio and to maintain a minimum fixed charge coverage ratio. There is also a commitment fee ranging from 0.10% to 0.25% to be incurred on the unused balance. The promissory note issued to the seller is non-interest bearing and is due in November of 2013. The Company was in compliance with all applicable loan covenants as of December 31, 2012.

Future cash flows from the Company’s U.S. operations will be used to pay down amounts outstanding under the Company’s credit agreement. The Company believes it has adequate cash/liquidity available to finance its U.S. operations from the combination of (i) the Company’s expected cash flows from the U.S. operations and (ii) funds available under its existing credit agreement.

C. Impact of Newly Issued Accounting Standards

Item 4. Controls and Procedures

As defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), disclosure controls and procedures are controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported on a timely basis, and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. The Company’s disclosure controls and procedures include components of the Company’s internal control over financial reporting. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how

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well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Management of the Company, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(e) as of December 31, 2012 (the “Evaluation Date”). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures were effective. Accordingly, management has concluded that the unaudited consolidated condensed financial statements 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 were no changes to the Company’s internal controls over financial reporting during the quarter ended December 31, 2012, which would be expected to have a material effect on financial reporting.

Part II. Other Information

Item 6. (a) Exhibits

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

Exhibit No.	Description
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
4.1	Credit and Security Agreement among Fifth Third Bank and SIFCO Industries, Inc. (and subsidiaries) dated December 10, 2010, filed as Exhibit 4.23 to the Company’s Form 8-K dated December 10, 2010 and incorporated herein by reference
4.2	First Amendment and Joinder to Credit and Security Agreement among Fifth Third Bank and SIFCO Industries, Inc. (and subsidiaries) dated October 28, 2011, filed as Exhibit 4.2 to the Company’s Form 8-K dated October 28, 2011 and incorporated herein by reference
*9.1	Voting Trust Agreement dated January 31, 2013
10.1	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
10.2	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
10.3	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/A dated December 31, 2000, and incorporated herein by reference
10.4	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/A dated December 31, 2000, and incorporated herein by reference
10.5	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
10.6	Amendment No. 1 to Change in Control Severance Agreement between the Company and Frank Cappello, dated February 5, 2007, filed as Exhibit 10.17 of the Company’s Form 10-Q dated December 31, 2006 and incorporated herein by reference
10.7	Amendment No. 1 to Change in Control Severance Agreement between the Company and Remigijus Belzinskas, dated February 5, 2007, filed as Exhibit 10.18 of the Company’s Form 10-Q dated December 31, 2006 and incorporated herein by reference
10.8	SIFCO Industries, Inc. 2007 Long-Term Incentive Plan, filed as Exhibit A of the Company’s Proxy and Notice of 2008 Annual Meeting to Shareholders dated December 14, 2007, and incorporated herein by reference
10.9	Letter Agreement between the Company and Jeffrey P. Gotschall, dated August 12, 2009 filed as Exhibit 10.1 of the Company’s Form 8-K dated August 12, 2009 and incorporated herein by reference 10.1 of the Company’s Form 8-K dated August 12, 2009 and incorporated herein by reference.

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Exhibit No.	Description
10.10	Interim Chief Executive Officer Agreement, dated as of August 31, 2009, by and among SIFCO Industries, Inc., Aviation Component Solutions and Michael S. Lipscomb and incorporated herein by reference
10.11	Amended and Restated Change in Control and Severance Agreement, between James P. Woidke and SIFCO Industries, Inc., dated April 27, 2010 filed as Exhibit 10.15 of the Company’s Form 8-K dated April 30, 2010, and incorporated herein by reference
10.12	Asset Purchase Agreement between T&W Forge, Inc and TWF Acquisition, LLC (a wholly-owned subsidiary of SIFCO Industries Inc.) dated December 10, 2010 filed as Exhibit 10.14 to the Company’s Form 8-K dated December 10, 2010, and incorporated herein by reference
10.13	Amendment No. 1 to the SIFCO Industries, Inc. 2007 Long-Term Incentive Plan, filed as Exhibit A of the Company’s Proxy and Notice of 2011 Annual Meeting to Shareholders dated December 15, 2010, and incorporated herein by reference
10.14	Asset Purchase Agreement between GEL Industries, Inc (DBA Quality Aluminum Forge) and Forge Acquisition, LLC (a wholly-owned subsidiary of SIFCO Industries Inc.) dated October 28, 2011, filed as Exhibit 10.16 to the Company’s Form 8-K dated October 28, 2011, and incorporated herein by reference
10.15	Separation Agreement between the Company and Frank Cappello, dated December 31, 2012, filed as Exhibit 10.1 to the Company’s Form 8-K dated January 3, 2013, and incorporated herein by reference
14.1	Code of Ethics, filed 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
*101	The following financial information from SIFCO Industries, Inc. Quarterly Report on Form 10-Q for the quarter ended December 31, 2012 filed with the SEC on February 11, 2013, formatted in XBRL includes: (i) Consolidated Condensed Statements of Operations for the fiscal periods ended December 31, 2012 and 2011, (ii) Consolidated Condensed Statements of Comprehensive Income for the fiscal periods ended December 31, 2012 and 2011, (iii) Consolidated Condensed Balance Sheets at December 31, 2012 and September 30, 2012, (iv) Consolidated Condensed Statements of Cash Flow for the fiscal periods ended December 31, 2012 and 2011, and (iv) the Notes to the Consolidated Condensed Financial Statements.

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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 11, 2013	/s/ Michael S. Lipscomb
	Michael S. Lipscomb     President and Chief Executive Officer     (Principal Executive Officer)
Date: February 11, 2013	/s/ Catherine M. Kramer
	Catherine M. Kramer     Vice President-Finance and     Chief Financial Officer     (Principal Financial Officer)

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EX-9.1

Exhibit 9.1

VOTING TRUST AGREEMENT

THIS AGREEMENT executed this 31 day of January 2013 effective as of the 1st day of February 2013 (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

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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.

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

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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

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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 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.

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14. PERIOD OF TRUST. This Agreement shall continue in force for a period of two (2) 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 two (2) years by depositing with the Trustees on or before the expiration of the original two (2) 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 two (2) 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 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

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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.

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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.

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 G. Carlson

Janice G. Carlson

/s/ Charles H. Smith III

Charles H. Smith III

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VOTING TRUST AGREEMENT

FROM FEBRUARY 1, 2013 TO JANUARY 31, 2015

Shareholder		Number of Shares
PNC, and its successors, as trustee of the Rhea D. Smith Trust for the benefit of CH Smith III dated December 8, 1981 as amended and restated on September 16, 1989
By:	/s/ Michael L. Wear, VP		121,678
	Michael L. Wear, Vice President
PNC, and its successors, as trustee of the Charles H. Smith, Jr. Irrevocable Trust for the benefit of CH Smith III dated September 5, 1990.
By:	/s/ Michael L. Wear, VP		57,067
	Michael L. Wear, Vice President
PNC, and its successors, as trustee of the Rhea D. Smith Trust for the benefit of D Dowell dated December 8, 1981 as amended and restated on September 16, 1989
By:	/s/ Michael L. Wear, VP		121,678
	Michael L. Wear, Vice President
PNC, and its successors, as trustee of the Charles H. Smith, Jr. Irrevocable Trust for the benefit of D Dowell dated September 5, 1990.
By:	/s/ Michael L. Wear, VP		57,067
	Michael L. Wear, Vice President
PNC, and its successors, as trustee of the Rhea D. Smith Trust for the benefit of H Smith dated December 8, 1981 as amended and restated on September 16, 1989
By:	/s/ Michael L. Wear, VP		121,678
	Michael L. Wear, Vice President
PNC, and its successors, as trustee of the Charles H. Smith, Jr. Irrevocable Trust for the benefit of H Smith dated September 5, 1990.
By:	/s/ Michael L. Wear, VP		57,068
	Michael L. Wear, Vice President

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VOTING TRUST AGREEMENT

FROM FEBRUARY 1, 2013 TO JANUARY 31, 2015

	Number of
Shareholder	Shares
/s/ C. H. Smith, III		61,666
C. H. Smith, III
/s/ Jennifer Smith		7,542
Jennifer Smith
/s/ Jennifer Smith		14,550
Jennifer Smith (TTEE)
/s/ C. Jason Smith		7,409
C. Jason Smith
/s/ C. H. Smith, III , Trustee		14,550
C. Jason Smith (TTEE)

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VOTING TRUST AGREEMENT

FROM FEBRUARY 1, 2013 TO JANUARY 31, 2015

Shareholder	Number of Shares
/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/ Ryan Morris, Custodian		1,950
Ashley Morris (Cust. UGM Ohio)
/s/ Adam Morris		20,863
Adam Morris
/s/ Adam Morris, Custodian		400
Maksim Morris (Cust. UGM Ohio)
/s/ Molly D. Morris		20,863
Molly D. Morris
/s/ Molly D. Morris, Custodian		400
Taylor Trappe (Cust. UGM Ohio)

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VOTING TRUST AGREEMENT

FROM FEBRUARY 1, 2013 TO JANUARY 31, 2015

Shareholder	Number of Shares
/s/ Hudson D. Smith		75,592
Hudson D. Smith
/s/ Deborah Ann Smith		6,255
Deborah Ann Smith
/s/ Hudson D. Smith, Jr.		24,176
Hudson D. Smith, Jr.
/s/ Hudson D. Smith, Jr., Custodian		1,500
Peyton Smith (Cust. UGM)
/s/ Hudson D. Smith, Jr. Custodian		675
Charlotte Smith (Cust. UGM)
/s/ Cynthia R. Champ		23,876
Cynthia R. Champ
/s/ Cynthia R. Champ, Custodian		675
Elise Day Champ (Cust. UGM Ohio)
/s/ Cynthia R. Champ, Custodian		400
William Champ (Cust. UGM Ohio)
/s/ C. Halle Smith		8,576
C. Halle Smith
/s/ Hudson D Smith, Trustee		15,300
Hudson D Smith Trustee
Ua 9/16/89 FBO C. Halle Smith

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VOTING TRUST AGREEMENT

FROM FEBRUARY 1, 2013 TO JANUARY 31, 2015

Shareholder	Number of Shares
/s/ Robert J. Morris, Jr.		225
Robert J. Morris, Jr.

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VOTING TRUST AGREEMENT

FROM FEBRUARY 1, 2013 TO JANUARY 31, 2015

Shareholder		Number of Shares
/s/ Phyllis Gotschall Wilhelm			30,077
Phyllis Gotschall Wilhelm, TTEE U/TR
dated June 24, 1987
PNC, Trustee, Florence R. Williamson Trust
FBO Phyllis Gotschall Wilhelm
dated October 23, 1969
By:	/s/ Michael L. Wear, VP		171,207
	Michael L. Wear, Vice President

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VOTING TRUST AGREEMENT

FROM FEBRUARY 1, 2013 TO JANUARY 31, 2015

Shareholder	Number of Shares
/s/ Jeffrey P. Gotschall		157,229
Jeffrey P. Gotschall
/s/ Dianne S. Gotschall		400
Dianne S. Gotschall
/s/ Judith Gotschall		38,115
Judith Gotschall
/s/ Andrew Gotschall		38,115
Andrew Gotschall
/s/ Andrew Gotschall, Custodian		600
Addison Gotschall (Cust. UGM Ohio)
/s/ Charles Gotschall		38,115
Charles Gotschall
/s/ Craig Ramsey		35,640
Craig Ramsey
/s/ Alison Ramsey		35,640
Alison Ramsey

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VOTING TRUST AGREEMENT

FROM FEBRUARY 1, 2013 TO JANUARY 31, 2015

Shareholder	Number of    Shares
/s/ Janice G. Carlson		115,079
Janice G. Carlson
/s/ Christie Lennen		38,425
Christie Lennen
/s/ Christie Lennen, Custodian		19,200
Colton Lennen (Cust)
/s/ Christie Lennen, Custodian		7,800
Kelby Lennen (Cust)
/s/ David Fulcher		38,075
David Fulcher
/s/ David Fulcher, Custodian		19,200
Jessica Fulcher (Cust)
/s/ David Fulcher, Custodian		7,800
Alyssa Fulcher (Cust)

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VOTING TRUST AGREEMENT

FROM FEBRUARY 1, 2013 TO JANUARY 31, 2015

Shareholder	Number of    Shares
/s/ Laura Gifford		127,723
Laura Gifford
/s/ Robert Gifford, Jr.		34,400
Robert Gifford, Jr
/s/ Terry G. Gifford		35,200
Terry G. Gifford

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VOTING TRUST AGREEMENT

FROM FEBRUARY 1, 2013 TO JANUARY 31, 2015

Shareholder	Number of Shares
Charles Henry Smith, Sr. Foundation		51,163
/s/ Phyllis Gotschall Wilhelm
Phyllis Gotschall Wilhelm, Director
/s/ Janice G. Carlson
Janice G. Carlson, Secretary-Treasurer

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EX-31.1

Exhibit 31.1

CERTIFICATION

OF THE CHIEF EXECUTIVE OFFICER

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

I, Michael S. Lipscomb, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: February 11, 2013	/s/ Michael S. Lipscomb
	Michael S. Lipscomb
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

OF THE CHIEF FINANCIAL OFFICER

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

I, Catherine M. Kramer, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: February 11, 2013	/s/ Catherine M. Kramer
	Catherine M. Kramer
	Vice President – Finance and
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report of SIFCO Industries, Inc. (“Company”) on Form 10-Q for the quarter ended December 31, 2012 as filed with the Securities and Exchange Commission on the date hereof (“Report”), the undersigned officer of the Company certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

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

Dated: February11, 2013

/s/ Michael S. Lipscomb

     Michael S. Lipscomb

     President and Chief Executive Officer

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

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

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report of SIFCO Industries, Inc. (“Company”) on Form 10-Q for the quarter ended December 31, 2012 as filed with the Securities and Exchange Commission on the date hereof (“Report”), the undersigned officer of the Company certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

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

Dated: February 11, 2013

/s/ Catherine M. Kramer

     Catherine M. Kramer

     Vice President – Finance and

     Chief Financial Officer

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

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

XML

Long-Term Debt (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Sep. 30, 2012
Debt Instrument [Line Items]
Non current maturities	$ 10,550	$ 21,683
Less-current maturities	4,356	2,000
Total long-term debt	6,194	19,683
Revolving credit agreement
Debt Instrument [Line Items]
Non current maturities	694	11,338
Term loan
Debt Instrument [Line Items]
Non current maturities	7,500	8,000
Promissory Note
Debt Instrument [Line Items]
Non current maturities	$ 2,356	$ 2,345

XML

Financial Results in Discontinued Operations (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net sales	$ 2,727	$ 3,784
Income before income tax provision	180	517
Provision for income taxes on operations	48	164
Income from operations, net of tax	132	353
Gain on sale of discontinued operations	4,014	0
Provision for income taxes on gain on sale	1,652	0
Gain on sale of discontinued operations, net of tax	2,362	0
Income from discontinued operations, net of tax	$ 2,494	$ 353

XML

Summary of Activity Related to Target Number of Shares Awarded and Actual Number of Shares Earned Under 2007 Plan (Detail) (2007 Plan, USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Dec. 31, 2012
Schedule Of Stock Options [Line Items]
Beginning Balance, Outstanding number of shares	158
Shares awarded, Number of shares award forfeited (various awards)	(28)
Ending Balance, Outstanding number of shares	150
Beginning Balance, Outstanding weighted average fair value at date of grant	$ 18.30
Shares not earned, Weighted average fair value at date of grant awards forfeited (various awards)	$ 17.00
Ending Balance, Outstanding weighted average fair value at date of grant	$ 18.30
Performance shares
Schedule Of Stock Options [Line Items]
Shares awarded, Number of shares 2013 award	49
Shares earned, Number of shares 2010 award	(29)
Shares earned, Weighted average fair value at date of grant 2010 award	$ 16.03
Shares not earned, Weighted average fair value at date of grant 2010 award	$ 15.75

XML

Retirement Benefit Plans - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2012
Pension and Other Postretirement Benefits Disclosure [Line Items]
Contributions amount in defined benefit pension plans	$ 174
Anticipated additional contributions in defined benefit pension plans	$ 662

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Inventories (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Sep. 30, 2012
Inventory Disclosure [Line Items]
Raw materials and supplies	$ 6,001	$ 4,207
Work-in-process	7,567	9,156
Finished goods	5,688	4,142
Total inventories	$ 19,256	$ 17,505

XML

Income Taxes (Tables)

3 Months Ended

Dec. 31, 2012

Components of Income Tax Provision

The income tax provision consists of the following:

	Three Months Ended December 31,
	2012		2011
Current income tax provision:
U.S. federal	$	419	$	334
U.S. state and local		70		58
Non-U.S		6		15
Total current tax provision		495		407
Deferred income tax provision (benefit):
U.S. federal		0		(25	)
Non-U.S		0		0
Total deferred tax provision		0		(25	)
Income tax provision	$	495	$	382

Summary of Activity Related to Uncertain Tax Positions

A summary of activity related to the Company’s uncertain tax positions is as follows:

Balance at September 30, 2012	$	120
Increase due to tax positions taken in prior years		2
Balance at December 31, 2012	$	122

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Schedule of Identifiable Assets by Segment (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Sep. 30, 2012
Identifiable assets
Identifiable assets (excluding cash) of continuing operations	$ 98,800	$ 106,545
Forged Components Group
Identifiable assets
Identifiable assets (excluding cash) of continuing operations	84,406	84,518
Turbine Component Services and Repair Group
Identifiable assets
Identifiable assets (excluding cash) of continuing operations	3,172	3,480
Corporate
Identifiable assets
Identifiable assets (excluding cash) of continuing operations	11,222	12,063
Assets Held-for-sale
Identifiable assets
Identifiable assets (excluding cash) of continuing operations	$ 0	$ 6,484

XML

Income Taxes - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Sep. 30, 2012
Income Tax [Line Items]
Effective tax rate	35.00%	31.00%
Liabilities recorded for uncertain tax positions and related interest and penalties	$ 122		$ 120

XML

Expected Amortization Expense (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012
Finite-Lived Intangible Assets [Line Items]
Fiscal year 2013	$ 2,037
Fiscal year 2014	1,970
Fiscal year 2015	1,970
Fiscal year 2016	1,744
Fiscal year 2017	$ 1,507

XML

Discontinued Operations, Assets Held for Sale and Business Divestiture - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash proceeds from divestiture	$ 8,114
Pre-tax gain from divestiture	4,014	0
Escrow
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash proceeds from divestiture	$ 994

XML

Stock-Based Compensation - Additional Information (Detail) (USD $) Share data in Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average remaining term, options outstanding	2 years 6 months
Aggregate intrinsic value, options outstanding	$ 12
Outstanding share awards earned and issued at greater than the target number of shares	150.00%
2007 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options, vesting period	10 years
Aggregate number of shares that may be awarded	600
Performance period	3 years
Stock options may be awarded	368
Compensation expense related to performance and restricted shares awarded	24,000	239,000
Total unrecognized compensation cost related to performance and restricted shares awarded	$ 1,258,000
Period of recognized compensation cost	2 years 9 months 18 days
2007 Plan | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common shares earned as percentage of initial target number shares awarded	150.00%
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options, vesting period	10 years
Performance shares awarded during fiscal 2012 | 2007 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense accrued as percentage of target levels	100.00%
Performance shares awarded during fiscal 2011 | 2007 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense accrued as percentage of target levels		50.00%
Restricted shares | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options, vesting period	1 year
Restricted shares | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options, vesting period	3 years

XML

Goodwill and Intangible Assets

3 Months Ended

Dec. 31, 2012

Goodwill and Intangible Assets

3. Goodwill and Intangible Assets

The Company’s intangible assets by major asset class subject to amortization consist of:

December 31, 2012	Estimated Useful Life		Original Cost		Accumulated Amortization		Net Book Value
Intangible assets:
Trade name		10 years	$	1,900	$	302	$	1,598
Non-compete agreement		5 years		1,500		439		1,061
Below market lease		5 years		900		370		530
Customer relationships		10 years		13,000		2,121		10,879
Order backlog		1 year		2,100		2,100		0
Transition services agreement		< 1 year		23		23		0
Total intangible assets			$	19,423	$	5,355	$	14,068
September 30, 2012	Estimated Useful Life		Original Cost		Accumulated Amortization		Net Book Value
Intangible assets:
Trade name		10 years	$	1,900	$	254	$	1,646
Non-compete agreement		5 years		1,500		364		1,136
Below market lease		5 years		900		325		575
Customer relationships		10 years		13,000		1,796		11,204
Order backlog		1 year		2,100		2,034		66
Transition services agreement		< 1 year		23		23		0
Total intangible assets			$	19,423	$	4,796	$	14,627

The amortization expense on identifiable intangible assets for the three months ended December 31, 2012 and 2011 was $559 and $815, respectively. Amortization expense associated with the identified intangible assets, all of which relates to the Forged Components Group, is expected to be as follows:

	Amortization Expense
Fiscal year 2013	$	2,037
Fiscal year 2014		1,970
Fiscal year 2015		1,970
Fiscal year 2016		1,744
Fiscal year 2017		1,507

The Company’s goodwill, all of which relates to the Forged Components Group is not being amortized and is subject to annual impairment tests. All of the goodwill is expected to be deductible for tax purposes.

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Income Tax Provision (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Current income tax provision:
U.S. federal	$ 419	$ 334
U.S. state and local	70	58
Non-U.S	6	15
Total current tax provision	495	407
Deferred income tax provision (benefit):
U.S. federal	0	(25)
Non-U.S	0	0
Total deferred tax provision	0	(25)
Income tax provision	$ 495	$ 382

XML

Business Acquisition (Tables)

3 Months Ended

Dec. 31, 2012

Pro Forma Results of Operations

The following unaudited pro forma information presents a summary of the results of operations for the Company including QAF as if the acquisition had occurred on October 1, 2011:

	Three Months Ended December 31,
	2012		2011
Net sales	$	28,700	$	26,240
Net income		3,458		1,140
Net income per share (basic)		0.65		0.22
Net income per share (diluted)	$	0.64	$	0.21

XML

Business Segments (Tables)

3 Months Ended

Dec. 31, 2012

Summary of Information Regarding Segments

The following table summarizes certain information regarding segments of the Company’s continuing operations:

	Three Months Ended December 31,
	2012			2011
Net sales:
Forged Components Group	$	27,445		$	22,688
Turbine Component Services and Repair Group		1,255			2,038
Consolidated net sales	$	28,700		$	24,726
Operating income (loss):
Forged Components Group	$	3,548		$	2,186
Turbine Component Services and Repair Group		(544	)		(133	)
Corporate unallocated expenses		(1,557	)		(878	)
Consolidated operating income		1,447			1,175
Interest expense, net		101			90
Foreign currency exchange (gain) loss, net		7			(13	)
Other income, net		(77	)		(117	)
Consolidated income from continuing operations before income tax provision	$	1,416		$	1,215
Depreciation and amortization expense:
Forged Components Group	$	1,363		$	1,428
Turbine Component Services and Repair Group		81			77
Corporate unallocated expenses		75			74
Consolidated depreciation and amortization expense	$	1,519		$	1,579
LIFO expense (income) for the Forged Components Group	$	(178	)	$	159

Schedule of Identifiable Assets by Segment

	December 31, 2012		September 30, 2012
Identifiable assets
Forged Components Group	$	84,406	$	84,518
Turbine Component Services and Repair Group		3,172		3,480
Corporate		11,222		12,063
Assets of business held for sale		0		6,484
Consolidated total assets	$	98,800	$	106,545

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Summary of Activity Related to Uncertain Tax Positions (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2012
Income Tax Uncertainties [Line Items]
Balance at September 30, 2012	$ 120
Increase due to tax positions taken in prior years	2
Balance at December 31, 2012	$ 122

XML

Discontinued Operations, Assets Held for Sale and Divestiture (Tables)

3 Months Ended

Dec. 31, 2012

Components of Balance Sheet Accounts Classified as Assets and Liabilities Held for Sale

The table below presents the components of the balance sheet accounts classified as assets and liabilities held for sale at September 30, 2012.

Assets:
Receivables, net	$	2,574
Inventories		1,188
Deferred income taxes		47
Prepaid expenses and other current assets		99
Total current assets of business held for sale	$	3,908
Property, plant and equipment, net	$	2,533
Other assets		43
Total noncurrent assets of business held for sale	$	2,576
Liabilities:
Current maturities of debt	$	2
Accounts payable		546
Accrued liabilities		623
Total current liabilities of business held for sale	$	1,171
Deferred income taxes	$	388
Other long-term liabilities		2
Total noncurrent liabilities of business held for sale	$	390

Financial Results in Discontinued Operations

The financial results of ASC Group included in discontinued operations were as follows:

	Three Months Ended December 31,
	2012		2011
Net sales	$	2,727	$	3,784
Income before income tax provision		180		517
Provision for income taxes on operations		48		164
Income from operations, net of tax		132		353
Gain on sale of discontinued operations		4,014		0
Provision for income taxes on gain on sale		1,652		0
Gain on sale of discontinued operations, net of tax		2,362		0
Income from discontinued operations, net of tax	$	2,494	$	353

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Dilutive Effect of Company's Stock Options Restricted Shares and Performance Shares (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Income from continuing operations	$ 921	$ 833
Income from discontinued operations, net of tax	2,494	353
Net income	$ 3,415	$ 1,186
Weighted-average common shares outstanding (basic)	5,340	5,299
Weighted-average common shares outstanding (diluted)	5,385	5,325
Net income per share - basic
Continuing operations	$ 0.17	$ 0.16
Discontinued operations	$ 0.47	$ 0.06
Net income	$ 0.64	$ 0.22
Net income per share - diluted:
Continuing operations	$ 0.17	$ 0.16
Discontinued operations	$ 0.46	$ 0.06
Net income	$ 0.63	$ 0.22
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average common shares outstanding (basic)	1	26
Restricted shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average common shares outstanding (basic)	8	0
Performance shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average common shares outstanding (basic)	36	0

XML

Inventories

3 Months Ended

Dec. 31, 2012

Inventories

2. Inventories

Inventories consist of:

	December 31, 2012		September 30, 2012
Raw materials and supplies	$	6,001	$	4,207
Work-in-process		7,567		9,156
Finished goods		5,688		4,142
Total inventories	$	19,256	$	17,505

Inventories are stated at the lower of cost or market. Cost is determined using the last-in, first-out (“LIFO”) method for 46% and 44% of the Company’s inventories at December 31, 2012 and September 30, 2012, 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 $9,359 and $9,537 higher than reported at December 31, 2012 and September 30, 2012, respectively.

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Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Significant Accounting Policies [Line Items]
Weighted average shares excluded from the calculation of diluted earnings per share	105	142
Interest rate swap agreement amount	$ 7,500

XML

Long-Term Debt - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2012	Oct. 31, 2011
Schedule Of Debt Instruments [Line Items]
Interest rate	1.25%
Promissory note payable period	2013-11
Imputed interest rate used to discount	2.00%
Credit Agreement Amendment
Schedule Of Debt Instruments [Line Items]
Percentage of stock of non-U.S. subsidiaries pledged	65.00%
Credit Agreement Amendment | Minimum
Schedule Of Debt Instruments [Line Items]
Maximum borrowing amount		$ 30,000
Credit Agreement Amendment | Maximum
Schedule Of Debt Instruments [Line Items]
Maximum borrowing amount		40,000
Term loan
Schedule Of Debt Instruments [Line Items]
Maximum borrowing amount		10,000
Period of credit agreement	5 years
Quarterly installments payment	500
Quarterly installments payment starting date	Dec. 01, 2011
Libor-based variable interest rate of term loan	2.20%
Effective fixed rate on term loan	2.90%
Revolving loan
Schedule Of Debt Instruments [Line Items]
Maximum borrowing amount		$ 30,000
Period of credit agreement	5 years
Revolving loan | Minimum
Schedule Of Debt Instruments [Line Items]
Interest rate on revolving loan, percentage added to Libor	0.75%
Commitment fee	0.10%
Revolving loan | Maximum
Schedule Of Debt Instruments [Line Items]
Interest rate on revolving loan, percentage added to Libor	1.75%
Commitment fee	0.25%

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Components of Balance Sheet Accounts Classified as Assets and Liabilities Held for Sale (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Assets:
Receivables, net	$ 2,574
Inventories	1,188
Deferred income taxes	47
Prepaid expenses and other current assets	99
Total current assets of business held for sale	3,908
Property, plant and equipment, net	2,533
Other assets	43
Total noncurrent assets of business held for sale	2,576
Liabilities:
Current maturities of debt	2
Accounts payable	546
Accrued liabilities	623
Total current liabilities of business held for sale	1,171
Deferred income taxes	388
Other long-term liabilities	2
Total noncurrent liabilities of business held for sale	$ 390

XML

Consolidated Condensed Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Net sales	$ 28,700	$ 24,726
Operating expenses:
Cost of goods sold	23,015	19,940
Selling, general and administrative expenses	3,804	2,796
Amortization of intangible assets	559	815
Gain on disposal of operating assets	(125)	0
Total operating expenses	27,253	23,551
Operating income	1,447	1,175
Interest income	(5)	(4)
Interest expense	106	94
Foreign currency exchange (gain) loss, net	7	(13)
Other income, net	(77)	(117)
Consolidated income from continuing operations before income tax provision	1,416	1,215
Income tax provision	495	382
Income from continuing operations	921	833
Income from discontinued operations, net of tax	2,494	353
Net income	$ 3,415	$ 1,186
Income per share from continuing operations
Basic	$ 0.17	$ 0.16
Diluted	$ 0.17	$ 0.16
Income per share from discontinued operations, net of tax
Basic	$ 0.47	$ 0.06
Diluted	$ 0.46	$ 0.06
Net income per share
Basic	$ 0.64	$ 0.22
Diluted	$ 0.63	$ 0.22
Weighted-average number of common shares (basic)	5,340	5,299
Weighted-average number of common shares (diluted)	5,385	5,325

XML

Components of Net Periodic Benefit Cost (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 75	$ 71
Interest cost	215	247
Expected return on plan assets	(372)	(351)
Amortization of prior service cost	13	12
Amortization of net loss	215	210
Net periodic benefit cost	$ 146	$ 189

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Consolidated Condensed Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Cash flows from operating activities:
Net income	$ 3,415	$ 1,186
Income from discontinued operations, net of tax	(2,494)	(353)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,519	1,579
Gain on disposal of operating assets	(125)	0
LIFO expense (income)	(178)	159
Share transactions under company stock plan	24	239
Other	12	(6)
Changes in operating assets and liabilities:
Receivables	2,159	3,976
Inventories	(1,573)	(3,211)
Refundable income taxes	0	262
Prepaid expenses and other current assets	(348)	(342)
Other assets	(997)	(121)
Accounts payable	(631)	(1,848)
Accrued liabilities	1,636	(126)
Other long-term liabilities	351	(67)
Net cash provided by operating activities of continuing operations	2,770	1,327
Net cash used for operating activities of discontinued operations	(235)	(35)
Cash flows from investing activities:
Acquisition of business	0	(24,809)
Proceeds from disposal of operating assets	125	0
Capital expenditures	(733)	(473)
Net cash used for investing activities of continuing operations	(608)	(25,282)
Net cash provided by (used for) investing activities of discontinued operations	8,676	(53)
Cash flows from financing activities:
Proceeds from term note	0	10,000
Repayments of term note	(500)	(500)
Proceeds from revolving credit agreement	11,511	25,886
Repayments of revolving credit agreement	(22,155)	(12,270)
Proceeds from other debt	0	2,400
Dividends paid	(1,073)	(1,060)
Other	0	(28)
Net cash provided by (used for) financing activities of continuing operations	(12,217)	24,428
Increase (decrease) in cash and cash equivalents	(1,614)	385
Cash and cash equivalents at the beginning of the period	7,176	6,431
Effect of exchange rate changes on cash and cash equivalents	(13)	(32)
Cash and cash equivalents at the end of the period	5,549	6,784
Supplemental disclosure of cash flow information of continuing operations:
Cash paid for interest	(122)	(87)
Cash paid for income taxes, net	$ (219)	$ (115)

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Intangible Assets by Major Class Subject to Amortization (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2012	Sep. 30, 2012
Finite-Lived Intangible Assets [Line Items]
Original Cost	$ 19,423	$ 19,423
Accumulated Amortization	5,355	4,796
Net Book Value	14,068	14,627
Trade name
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	10 years	10 years
Original Cost	1,900	1,900
Accumulated Amortization	302	254
Net Book Value	1,598	1,646
Non-compete agreement
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	5 years	5 years
Original Cost	1,500	1,500
Accumulated Amortization	439	364
Net Book Value	1,061	1,136
Below market lease
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	5 years	5 years
Original Cost	900	900
Accumulated Amortization	370	325
Net Book Value	530	575
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	10 years	10 years
Original Cost	13,000	13,000
Accumulated Amortization	2,121	1,796
Net Book Value	10,879	11,204
Order backlog
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	1 year	1 year
Original Cost	2,100	2,100
Accumulated Amortization	2,100	2,034
Net Book Value	0	66
Transition services agreement
Finite-Lived Intangible Assets [Line Items]
Original Cost	23	23
Accumulated Amortization	23	23
Net Book Value	$ 0	$ 0
Transition services agreement | Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	1 year	1 year

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Goodwill and Intangible Assets (Tables)

3 Months Ended

Dec. 31, 2012

Components of Intangible Assets by Major Class Subject to Amortization

The Company’s intangible assets by major asset class subject to amortization consist of:

December 31, 2012	Estimated Useful Life		Original Cost		Accumulated Amortization		Net Book Value
Intangible assets:
Trade name		10 years	$	1,900	$	302	$	1,598
Non-compete agreement		5 years		1,500		439		1,061
Below market lease		5 years		900		370		530
Customer relationships		10 years		13,000		2,121		10,879
Order backlog		1 year		2,100		2,100		0
Transition services agreement		< 1 year		23		23		0
Total intangible assets			$	19,423	$	5,355	$	14,068
September 30, 2012	Estimated Useful Life		Original Cost		Accumulated Amortization		Net Book Value
Intangible assets:
Trade name		10 years	$	1,900	$	254	$	1,646
Non-compete agreement		5 years		1,500		364		1,136
Below market lease		5 years		900		325		575
Customer relationships		10 years		13,000		1,796		11,204
Order backlog		1 year		2,100		2,034		66
Transition services agreement		< 1 year		23		23		0
Total intangible assets			$	19,423	$	4,796	$	14,627

Expected Amortization Expense

ended December 31, 2012 and 2011 was $559 and $815, respectively. Amortization expense associated with the identified intangible assets, all of which relates to the Forged Components Group, is expected to be as follows:

	Amortization Expense
Fiscal year 2013	$	2,037
Fiscal year 2014		1,970
Fiscal year 2015		1,970
Fiscal year 2016		1,744
Fiscal year 2017		1,507

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Goodwill and Intangible Assets - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Indefinite-lived Intangible Assets [Line Items]
Amortization expense	$ 559	$ 815

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Long-Term Debt (Tables)

3 Months Ended

Dec. 31, 2012

Components of Long-Term Debt

Long-term debt consists of:

	December 31, 2012		September 30, 2012
Revolving credit agreement	$	694	$	11,338
Term loan		7,500		8,000
Promissory Note		2,356		2,345
		10,550		21,683
Less – current maturities		4,356		2,000
Total long-term debt	$	6,194	$	19,683

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Summary of Significant Accounting Policies

3 Months Ended

Dec. 31, 2012

Summary of Significant Accounting Policies

1. Summary of Significant Accounting Policies

A. Principles of Consolidation

The accompanying unaudited consolidated condensed financial statements include the accounts of SIFCO Industries, Inc. and its wholly-owned subsidiaries (the “Company”). All significant intercompany accounts and transactions have been eliminated.

The U.S. dollar is the functional currency for all of the Company’s U.S. operations and its Irish subsidiary. For these operations, all gains and losses from completed currency transactions are included in income currently. Foreign currency translation adjustments are reported as a component of accumulated other comprehensive loss in the unaudited consolidated condensed financial statements.

These unaudited consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s fiscal 2012 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 may have been reclassified in order to conform to current period classifications.

B. Net Income per Share

The Company’s net income per basic share has been computed based on the weighted-average number of common shares outstanding. Net income per diluted share reflects the effect of the Company’s outstanding stock options, restricted shares and performance shares under the treasury stock method. The dilutive effect of the Company’s stock options, restricted shares and performance shares were as follows:

	Three Months  Ended December 31,
	2012		2011
Income from continuing operations	$	921	$	833
Income from discontinued operations, net of tax		2,494		353
Net income	$	3,415	$	1,186
Weighted-average common shares outstanding (basic)		5,340		5,299
Effect of dilutive securities:
Stock options		1		26
Restricted shares		8		0
Performance shares		36		0
Weighted-average common shares outstanding (diluted)		5,385		5,325
Net income per share – basic
Continuing operations	$	0.17	$	0.16
Discontinued operations		0.47		0.06
Net income	$	0.64	$	0.22
Net income per share – diluted:
Continuing operations	$	0.17	$	0.16
Discontinued operations		0.46		0.06
Net income	$	0.63	$	0.22

Outstanding share awards relating to approximately 105 and 142 weighted average shares were excluded from the calculation of diluted earnings per share for the three months ended December 31, 2012 and 2011, respectively, as the impact of including such share awards in the calculation of diluted earnings per share would have had an anti-dilutive effect.

C. Derivative Financial Instruments

The Company uses an interest rate swap agreement to reduce risk related to variable-rate debt, which is subject to changes in market rates of interest. The interest rate swap is designated as a cash flow hedge. At December 31, 2012, the Company held one interest rate swap agreement with a notional amount of $7,500. Cash flows related to the interest rate swap agreement are included in interest expense. The Company’s interest rate swap agreement and its variable-rate term debt are based upon LIBOR. During the first quarter of fiscal year 2013, the Company’s interest rate swap agreement qualified as a fully effective cash flow hedge against the Company’s variable-rate term note interest risk.

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Consolidated Condensed Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Net income	$ 3,415	$ 1,186
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	(284)	(45)
Net retirement plan liability adjustment	229	202
Interest rate swap agreement adjustment	16	(45)
Comprehensive income	$ 3,376	$ 1,298

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Business Acquisition

3 Months Ended

Dec. 31, 2012

Business Acquisition

11. Business Acquisition

On October 28, 2011, through its wholly-owned subsidiary, Forge Acquisition, LLC – now known as Quality Aluminum Forge, LLC (“QAF”), the Company completed the purchase of the forging business and substantially all related operating assets from GEL Industries, Inc. (DBA Quality Aluminum Forge, Inc.). The forging business is operated in QAF’s Orange and Long Beach, California facilities, all of which are leased. The QAF purchase transaction was accounted for under the purchase method of accounting.

The results of operation of QAF from its date of acquisition are included in the Company’s unaudited consolidated condensed statements of operations and are reported in the Forge Group. The following unaudited pro forma information presents a summary of the results of operations for the Company including QAF as if the acquisition had occurred on October 1, 2011:

	Three Months Ended December 31,
	2012		2011
Net sales	$	28,700	$	26,240
Net income		3,458		1,140
Net income per share (basic)		0.65		0.22
Net income per share (diluted)	$	0.64	$	0.21

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Document and Entity Information	3 Months Ended
	Dec. 31, 2012
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 31, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1
Trading Symbol	SIF
Entity Registrant Name	SIFCO INDUSTRIES INC
Entity Central Index Key	0000090168
Current Fiscal Year End Date	--09-30
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding	5,339,571

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Discontinued Operations, Assets Held for Sale and Divestiture

3 Months Ended

Dec. 31, 2012

Discontinued Operations, Assets Held for Sale and Divestiture

12. Discontinued Operations, Assets Held for Sale, and Business Divestiture

On December 10, 2012, the Company completed the divestiture of its Applied Surface Concepts (“ASC Group”) business segment to Norman Hay plc, located in the United Kingdom. The Company received cash proceeds, net of certain transaction fees, of approximately $8,114 for this business and $994 was placed in escrow, pending the final working capital adjustment and/or indemnification holdback provisions under the sale agreement. The ASC Group business includes its U.S. operations, headquartered in Cleveland, Ohio, and three European operations located in France, Sweden and the United Kingdom. The ASC Group business develops, manufactures and sells selective plating products and provides contract services for low volume repair, refurbishment and OEM applications. The transaction resulted in a pre-tax gain of $4,014 in the first three months of fiscal 2013.

There were no assets or liabilities held for sale at December 31, 2012. The table below presents the components of the balance sheet accounts classified as assets and liabilities held for sale at September 30, 2012.

Assets:
Receivables, net	$	2,574
Inventories		1,188
Deferred income taxes		47
Prepaid expenses and other current assets		99
Total current assets of business held for sale	$	3,908
Property, plant and equipment, net	$	2,533
Other assets		43
Total noncurrent assets of business held for sale	$	2,576
Liabilities:
Current maturities of debt	$	2
Accounts payable		546
Accrued liabilities		623
Total current liabilities of business held for sale	$	1,171
Deferred income taxes	$	388
Other long-term liabilities		2
Total noncurrent liabilities of business held for sale	$	390

The financial results of ASC Group included in discontinued operations were as follows:

	Three Months Ended December 31,
	2012		2011
Net sales	$	2,727	$	3,784
Income before income tax provision		180		517
Provision for income taxes on operations		48		164
Income from operations, net of tax		132		353
Gain on sale of discontinued operations		4,014		0
Provision for income taxes on gain on sale		1,652		0
Gain on sale of discontinued operations, net of tax		2,362		0
Income from discontinued operations, net of tax	$	2,494	$	353

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Consolidated Condensed Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Sep. 30, 2012
Current assets:
Cash and cash equivalents	$ 5,549	$ 7,176
Receivables, net	18,908	20,780
Inventories, net	19,256	17,505
Deferred income taxes	1,343	1,415
Prepaid expenses and other current assets	1,471	1,122
Current assets of business held for sale	0	3,908
Total current assets	46,527	51,906
Property, plant and equipment, net	29,498	29,726
Intangible assets, net	14,068	14,627
Goodwill	7,015	7,015
Other assets	1,692	695
Noncurrent assets of business held for sale	0	2,576
Total assets	98,800	106,545
Current liabilities:
Current maturities of long-term debt	4,356	2,000
Accounts payable	8,551	9,181
Accrued liabilities	7,253	4,330
Current liabilities of business held for sale	0	1,171
Total current liabilities	20,160	16,682
Long-term debt, net of current maturities	6,194	19,683
Deferred income taxes	304	1,154
Other long-term liabilities	8,601	8,494
Noncurrent liabilities of business held for sale	0	390
Shareholders' equity:
Serial preferred shares, no par value, authorized 1,000 shares	0	0
Common shares, par value $1 per share, authorized 10,000 shares; issued and outstanding shares - 5,366 at December 31, 2012 and September 30, 2012	5,366	5,366
Additional paid-in capital	7,546	7,523
Retained earnings	63,012	59,597
Accumulated other comprehensive loss	(12,383)	(12,344)
Total shareholders' equity	63,541	60,142
Total liabilities and shareholders' equity	$ 98,800	$ 106,545

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Government Grants

3 Months Ended

Dec. 31, 2012

Government Grants

6. Government Grants

In the past, the Company received grants from certain government entities as an incentive to invest in facilities, research and employees. Remaining grants, principally capital in nature, are amortized into income over the estimated useful lives of the related assets. The unamortized portion of deferred grant revenue recorded in other long-term liabilities at December 31, 2012 and September 30, 2012 was $338 and $334, respectively. The Company’s grants are denominated primarily in Euros. The Company adjusts its deferred grant revenue balance in response to currency exchange rate fluctuations for as long as such grants are treated as obligations.

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Long-Term Debt

3 Months Ended

Dec. 31, 2012

Long-Term Debt

5. Long-Term Debt

Long-term debt consists of:

	December 31, 2012		September 30, 2012
Revolving credit agreement	$	694	$	11,338
Term loan		7,500		8,000
Promissory Note		2,356		2,345
		10,550		21,683
Less – current maturities		4,356		2,000
Total long-term debt	$	6,194	$	19,683

In October 2011, the Company entered into an amendment to its existing credit agreement (the “Credit Agreement Amendment”) with its bank increasing the maximum borrowing amount from $30,000 to $40,000, of which $10,000 is a five (5) year term loan and $30,000 is a five (5) year revolving loan, secured by substantially all the assets of the Company and its U.S. subsidiaries and a pledge of 65% of the stock of its Irish subsidiary. The term loan is repayable in quarterly installments of $500 starting December 1, 2011.

The term loan has a Libor-based variable interest rate that was 2.2% at December 31, 2012 and which becomes an effective fixed rate of 2.9% after giving effect to an interest rate swap agreement. Borrowing under the revolving loan bears interest at a rate equal to Libor plus 0.75% to 1.75%, which percentage fluctuates based on the Company’s leverage ratio of outstanding indebtedness to EBITDA. At December 31, 2012, the interest rate was 1.25%. The loans are subject to certain customary financial covenants including, without limitation, covenants that require the Company to not exceed a maximum leverage ratio and to maintain a minimum fixed charge coverage ratio. There is also a commitment fee ranging from 0.10% to 0.25% to be incurred on the unused balance. The Company was in compliance with all applicable loan covenants as of December 31, 2012.

In connection with the acquisition of the QAF business, as discussed more fully in Note 11, the Company issued a non-interest bearing promissory note to the seller, which note is payable by the Company in November, 2013. The imputed interest rate used to discount the note was 2% per annum.

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Accumulated Other Comprehensive Loss (Tables)

3 Months Ended

Dec. 31, 2012

Components of Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss are as follows:

	December 31, 2012			September 30, 2012
Foreign currency translation adjustment, net of tax	$	(5,850	)	$	(5,566	)
Net retirement plan liability adjustment, net of tax		(6,491	)		(6,720	)
Interest rate swap agreement adjustment, net of tax		(42	)		(58	)
Total accumulated other comprehensive loss	$	(12,383	)	$	(12,344	)

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Dec. 31, 2012

Principles of Consolidation

A. Principles of Consolidation

The accompanying unaudited consolidated condensed financial statements include the accounts of SIFCO Industries, Inc. and its wholly-owned subsidiaries (the “Company”). All significant intercompany accounts and transactions have been eliminated.

The U.S. dollar is the functional currency for all of the Company’s U.S. operations and its Irish subsidiary. For these operations, all gains and losses from completed currency transactions are included in income currently. Foreign currency translation adjustments are reported as a component of accumulated other comprehensive loss in the unaudited consolidated condensed financial statements.

These unaudited consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s fiscal 2012 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 may have been reclassified in order to conform to current period classifications.

Net Income per Share

B. Net Income per Share

The Company’s net income per basic share has been computed based on the weighted-average number of common shares outstanding. Net income per diluted share reflects the effect of the Company’s outstanding stock options, restricted shares and performance shares under the treasury stock method. The dilutive effect of the Company’s stock options, restricted shares and performance shares were as follows:

	Three Months  Ended December 31,
	2012		2011
Income from continuing operations	$	921	$	833
Income from discontinued operations, net of tax		2,494		353
Net income	$	3,415	$	1,186
Weighted-average common shares outstanding (basic)		5,340		5,299
Effect of dilutive securities:
Stock options		1		26
Restricted shares		8		0
Performance shares		36		0
Weighted-average common shares outstanding (diluted)		5,385		5,325
Net income per share – basic
Continuing operations	$	0.17	$	0.16
Discontinued operations		0.47		0.06
Net income	$	0.64	$	0.22
Net income per share – diluted:
Continuing operations	$	0.17	$	0.16
Discontinued operations		0.46		0.06
Net income	$	0.63	$	0.22

Outstanding share awards relating to approximately 105 and 142 weighted average shares were excluded from the calculation of diluted earnings per share for the three months ended December 31, 2012 and 2011, respectively, as the impact of including such share awards in the calculation of diluted earnings per share would have had an anti-dilutive effect.

Derivative Financial Instruments

C. Derivative Financial Instruments

The Company uses an interest rate swap agreement to reduce risk related to variable-rate debt, which is subject to changes in market rates of interest. The interest rate swap is designated as a cash flow hedge. At December 31, 2012, the Company held one interest rate swap agreement with a notional amount of $7,500. Cash flows related to the interest rate swap agreement are included in interest expense. The Company’s interest rate swap agreement and its variable-rate term debt are based upon LIBOR. During the first quarter of fiscal year 2013, the Company’s interest rate swap agreement qualified as a fully effective cash flow hedge against the Company’s variable-rate term note interest risk.

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Stock-Based Compensation

3 Months Ended

Dec. 31, 2012

Stock-Based Compensation

9. Stock-Based Compensation

In previous periods, 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. All options awarded under both plans are fully vested as of December 31, 2012.

At December 31, 2012 and 2011, there was no unrecognized compensation cost related to the stock options granted under the Company’s stock option plans. There was no compensation expense related to stock options recognized in the three months ended December 31, 2012 and 2011. There is one outstanding and exercisable option as of December 31, 2012, which is fully vested, has a weighted average remaining term of 2.5 years, and an intrinsic value of $12.

The Company has awarded performance and restricted shares under its shareholder approved 2007 Long-Term Incentive Plan (“2007 Plan”). The aggregate number of shares that may be awarded under the 2007 Plan is 600 less any shares previously awarded and subject to an adjustment for the forfeiture of any unissued shares. In addition, shares that may be awarded are subject to individual recipient award limitations. The shares awarded under the 2007 Plan may be made in multiple forms including stock options, stock appreciation rights, restricted or unrestricted stock, and performance related shares. Any such awards are exercisable no later than ten years from date of grant.

The performance shares that have been awarded under the 2007 Plan generally provide for the issuance of the Company’s common shares upon the Company achieving certain defined financial performance objectives during a period up to three years following the making of such award. The ultimate number of common shares of the Company that may be earned pursuant to an award ranges from a minimum of no shares to a maximum of 150% of the initial target number of performance shares awarded, depending on the level of the Company’s achievement of its financial performance objectives.

With respect to such performance shares, compensation expense is being accrued at (i) 100% of the target levels for recipients of the performance shares awarded during fiscal 2013, and (ii) 50% of the target levels for recipients of the performance shares awarded during fiscal 2012 and 2011. During each future reporting period, such expense may be subject to adjustment based upon the Company’s subsequent estimate of the number of common shares that it expects to issue upon the completion of the performance period. The performance shares were valued at the closing market price of the Company’s common shares on the date of grant. The vesting of such shares is determined at the end of the performance period.

The Company has awarded restricted shares to certain of its directors. The restricted shares were valued at the closing market price of the Company’s common shares on the date of grant, and such value was recorded as unearned compensation. The unearned compensation is being amortized ratably over the restricted stock vesting period of one (1) to three (3) years.

If all outstanding share awards are ultimately earned and issued at the target number of shares, then at December 31, 2012 there are approximately 368 shares that remain available for award. If any of the outstanding share awards are ultimately earned and issued at greater than the target number of shares, up to a maximum of 150% of such target, then a fewer number of shares would be available for award.

Compensation expense related to all performance and restricted shares awarded under the 2007 Plan was $24 and $239 during the first three months of fiscal 2013 and 2012, respectively. As of December 31, 2012, there was $1,258 of total unrecognized compensation cost related to the performance and restricted shares awarded under the 2007 Plan. The Company expects to recognize this cost over the next 2.8 years.

The following is a summary of activity related to the target number of shares awarded and the actual number of shares earned under the 2007 Plan:

	Number of Shares			Weighted Average Fair Value at Date of Grant
Outstanding at September 30, 2012		158		$	18.30
Performance shares awarded (2013 award)		49			16.03
Performance shares earned (2010 award)		(29	)		15.75
Awards forfeited (various awards)		(28	)		17.00
Outstanding at December 31, 2012		150		$	18.30

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Income Taxes

3 Months Ended

Dec. 31, 2012

Income Taxes

7. Income Taxes

For each interim reporting period, the Company makes an estimate of the effective tax rate it expects to be applicable for the full fiscal year for its continuing operations. This estimated effective rate is used in providing for income taxes on a year-to-date basis. The Company’s effective tax rate through the first three months of fiscal 2013 is 35%, compared to 31% for the same period in fiscal 2012, and differs from the U.S. federal statutory rate due primarily to (i) the impact of U.S. state and local income taxes, (ii) a domestic production activities deduction, (iii) application of tax credits, and (iv) the recognition of U.S. federal income taxes on undistributed earnings of non-U.S. subsidiaries. The income tax provision consists of the following:

	Three Months Ended December 31,
	2012		2011
Current income tax provision:
U.S. federal	$	419	$	334
U.S. state and local		70		58
Non-U.S		6		15
Total current tax provision		495		407
Deferred income tax provision (benefit):
U.S. federal		0		(25	)
Non-U.S		0		0
Total deferred tax provision		0		(25	)
Income tax provision	$	495	$	382

The Company is subject to income taxes in the U.S. federal jurisdiction, and various state, local and non-U.S. jurisdictions. The Company’s federal income tax return for fiscal 2011 and the amended federal income tax return for fiscal 2008 are under review by the Internal Revenue Service, the outcome of which is not known at this time. The Company believes it has appropriate support for its federal income tax returns. The Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for fiscal years prior to 2006.

At December 31, 2012 and September 30, 2012, the Company recorded liabilities of $122 and $120, respectively, for uncertain tax positions and any related interest and penalties. The Company classifies any interest and penalties related to uncertain tax positions in income tax expense. A summary of activity related to the Company’s uncertain tax positions is as follows:

Balance at September 30, 2012	$	120
Increase due to tax positions taken in prior years		2
Balance at December 31, 2012	$	122

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Retirement Benefit Plans

3 Months Ended

Dec. 31, 2012

Retirement Benefit Plans

8. 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,
	2012			2011
Service cost	$	75		$	71
Interest cost		215			247
Expected return on plan assets		(372	)		(351	)
Amortization of prior service cost		13			12
Amortization of net loss		215			210
Net periodic benefit cost	$	146		$	189

Through December 31, 2012, the Company has made contributions in the amount of $174 to its defined benefit pension plans. The Company anticipates making $662 of additional contributions to fund its defined benefit pension plans during the balance of fiscal 2013.

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Business Segments

3 Months Ended

Dec. 31, 2012

Business Segments

10. Business Segments

The Company identifies reportable segments based upon distinct products manufactured and services performed. The Forged Components Group (“Forge Group”) consists of the production, heat-treatment, surface-treatment, non-destructive testing and some machining of both conventional and precision forged components in various steel, titanium and aluminum alloys utilizing a variety of processes for application principally in the aerospace and power generation industries. The Turbine Component Services and Repair Group (“Repair Group”) consists primarily of the repair and remanufacture of small aerospace and industrial turbine engine components, and is also involved in providing precision component machining and industrial coating of turbine engine components. The Company’s reportable segments are separately managed. The following table summarizes certain information regarding segments of the Company’s continuing operations:

	Three Months Ended December 31,
	2012			2011
Net sales:
Forged Components Group	$	27,445		$	22,688
Turbine Component Services and Repair Group		1,255			2,038
Consolidated net sales	$	28,700		$	24,726
Operating income (loss):
Forged Components Group	$	3,548		$	2,186
Turbine Component Services and Repair Group		(544	)		(133	)
Corporate unallocated expenses		(1,557	)		(878	)
Consolidated operating income		1,447			1,175
Interest expense, net		101			90
Foreign currency exchange (gain) loss, net		7			(13	)
Other income, net		(77	)		(117	)
Consolidated income from continuing operations before income tax provision	$	1,416		$	1,215
Depreciation and amortization expense:
Forged Components Group	$	1,363		$	1,428
Turbine Component Services and Repair Group		81			77
Corporate unallocated expenses		75			74
Consolidated depreciation and amortization expense	$	1,519		$	1,579
LIFO expense (income) for the Forged Components Group	$	(178	)	$	159

	December 31, 2012		September 30, 2012
Identifiable assets
Forged Components Group	$	84,406	$	84,518
Turbine Component Services and Repair Group		3,172		3,480
Corporate		11,222		12,063
Assets of business held for sale		0		6,484
Consolidated total assets	$	98,800	$	106,545

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Inventories - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Sep. 30, 2012
Inventory Disclosure [Line Items]
Percentage of inventories determined using LIFO method	46.00%	44.00%
Difference between cost of inventories if FIFO method had been used	$ 9,359	$ 9,537

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Pro Forma Results of Operations (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Business Acquisition, Pro Forma Information [Line Items]
Net sales	$ 28,700	$ 26,240
Net income	$ 3,458	$ 1,140
Net income per share (basic)	$ 0.65	$ 0.22
Net income per share (diluted)	$ 0.64	$ 0.21

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Inventories (Tables)

3 Months Ended

Dec. 31, 2012

Components of Inventories

Inventories consist of:

	December 31, 2012		September 30, 2012
Raw materials and supplies	$	6,001	$	4,207
Work-in-process		7,567		9,156
Finished goods		5,688		4,142
Total inventories	$	19,256	$	17,505

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Retirement Benefit Plans (Tables)

3 Months Ended

Dec. 31, 2012

Components of Net Periodic Benefit Cost

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

	Three Months Ended December 31,
	2012			2011
Service cost	$	75		$	71
Interest cost		215			247
Expected return on plan assets		(372	)		(351	)
Amortization of prior service cost		13			12
Amortization of net loss		215			210
Net periodic benefit cost	$	146		$	189

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Information Regarding Segments of Continuing Operations (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Net sales:
Net sales from continuing operations	$ 28,700	$ 24,726
Operating income (loss):
Operating income (loss) from continuing operations	1,447	1,175
Interest expense (income), net	101	90
Foreign currency exchange (gain) loss, net	7	(13)
Other income, net	(77)	(117)
Consolidated income from continuing operations before income tax provision	1,416	1,215
Depreciation and amortization expense:
Consolidated depreciation and amortization expense	1,519	1,579
LIFO expense for the Forged Components Group	(178)	159
Forged Components Group
Net sales:
Net sales from continuing operations	27,445	22,688
Operating income (loss):
Operating income (loss) from continuing operations	3,548	2,186
Depreciation and amortization expense:
Consolidated depreciation and amortization expense	1,363	1,428
Turbine Component Services and Repair Group
Net sales:
Net sales from continuing operations	1,255	2,038
Operating income (loss):
Operating income (loss) from continuing operations	(544)	(133)
Depreciation and amortization expense:
Consolidated depreciation and amortization expense	81	77
Corporate unallocated expenses
Operating income (loss):
Operating income (loss) from continuing operations	(1,557)	(878)
Depreciation and amortization expense:
Consolidated depreciation and amortization expense	$ 75	$ 74

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Government Grants - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Sep. 30, 2012
Government Grants [Line Items]
Unamortized portion of deferred grant revenue recorded in other long-term liabilities	$ 338	$ 334

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Consolidated Condensed Balance Sheets (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Dec. 31, 2012	Sep. 30, 2012
Serial preferred shares, no par value
Serial preferred shares, shares authorized	1,000	1,000
Common shares, par value	$ 1	$ 1
Common shares, shares authorized	10,000	10,000
Common shares, shares issued	5,366	5,366
Common shares, shares outstanding	5,366	5,366

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Accumulated Other Comprehensive Loss

3 Months Ended

Dec. 31, 2012

Accumulated Other Comprehensive Loss

4. Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss are as follows:

	December 31, 2012			September 30, 2012
Foreign currency translation adjustment, net of tax	$	(5,850	)	$	(5,566	)
Net retirement plan liability adjustment, net of tax		(6,491	)		(6,720	)
Interest rate swap agreement adjustment, net of tax		(42	)		(58	)
Total accumulated other comprehensive loss	$	(12,383	)	$	(12,344	)

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Stock-Based Compensation (Tables)

3 Months Ended

Dec. 31, 2012

Aggregate Option Activity

The following is a summary of activity related to the target number of shares awarded and the actual number of shares earned under the 2007 Plan:

	Number of Shares			Weighted Average Fair Value at Date of Grant
Outstanding at September 30, 2012		158		$	18.30
Performance shares awarded (2013 award)		49			16.03
Performance shares earned (2010 award)		(29	)		15.75
Awards forfeited (various awards)		(28	)		17.00
Outstanding at December 31, 2012		150		$	18.30

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Components of Accumulated Other Comprehensive Loss (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Sep. 30, 2012
Schedule of Accumulated Other Comprehensive Income (Loss) [Line Items]
Foreign currency translation adjustment, net of tax	$ (5,850)	$ (5,566)
Net retirement plan liability adjustment, net of tax	(6,491)	(6,720)
Interest rate swap agreement adjustment, net of tax	(42)	(58)
Total accumulated other comprehensive loss	$ (12,383)	$ (12,344)

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

Dec. 31, 2012

Dilutive Effect of Company's Stock Options

 The dilutive effect of the Company’s stock options, restricted shares and performance shares were as follows:

	Three Months  Ended December 31,
	2012		2011
Income from continuing operations	$	921	$	833
Income from discontinued operations, net of tax		2,494		353
Net income	$	3,415	$	1,186
Weighted-average common shares outstanding (basic)		5,340		5,299
Effect of dilutive securities:
Stock options		1		26
Restricted shares		8		0
Performance shares		36		0
Weighted-average common shares outstanding (diluted)		5,385		5,325
Net income per share – basic
Continuing operations	$	0.17	$	0.16
Discontinued operations		0.47		0.06
Net income	$	0.64	$	0.22
Net income per share – diluted:
Continuing operations	$	0.17	$	0.16
Discontinued operations		0.46		0.06
Net income	$	0.63	$	0.22