ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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) |
Large accelerated filer | ¨ | Accelerated filer | ¨ |
Non-accelerated filer | ¨ | Smaller reporting company | ý |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Net sales | $ | 30,284 | $ | 27,278 | $ | 88,578 | $ | 82,147 | |||||||
Cost of goods sold | 22,757 | 20,991 | 69,653 | 65,275 | |||||||||||
Gross margin | 7,527 | 6,287 | 18,925 | 16,872 | |||||||||||
Selling, general and administrative expenses | 3,371 | 2,661 | 10,433 | 8,342 | |||||||||||
Amortization of intangible assets | 492 | 709 | 1,544 | 2,186 | |||||||||||
Loss (gain) on disposal of operating assets | 33 | — | (89 | ) | — | ||||||||||
Operating income | 3,631 | 2,917 | 7,037 | 6,344 | |||||||||||
Interest income | (4 | ) | (8 | ) | (18 | ) | (16 | ) | |||||||
Interest expense | 76 | 124 | 261 | 352 | |||||||||||
Foreign currency exchange (gain) loss, net | 7 | (19 | ) | 7 | (22 | ) | |||||||||
Other income, net | (108 | ) | (113 | ) | (294 | ) | (347 | ) | |||||||
Income from continuing operations before income tax provision | 3,660 | 2,933 | 7,081 | 6,377 | |||||||||||
Income tax provision | 1,103 | 831 | 2,134 | 1,990 | |||||||||||
Income from continuing operations | 2,557 | 2,102 | 4,947 | 4,387 | |||||||||||
Income (loss) from discontinued operations, net of tax | (79 | ) | 339 | 2,381 | 964 | ||||||||||
Net income | $ | 2,478 | $ | 2,441 | $ | 7,328 | $ | 5,351 | |||||||
Income per share from continuing operations | |||||||||||||||
Basic | $ | 0.47 | $ | 0.40 | $ | 0.92 | $ | 0.83 | |||||||
Diluted | $ | 0.47 | $ | 0.40 | $ | 0.92 | $ | 0.82 | |||||||
Income (loss) per share from discontinued operations, net of tax | |||||||||||||||
Basic | $ | (0.01 | ) | $ | 0.06 | $ | 0.44 | $ | 0.18 | ||||||
Diluted | $ | (0.01 | ) | $ | 0.06 | $ | 0.44 | $ | 0.18 | ||||||
Net income per share | |||||||||||||||
Basic | $ | 0.46 | $ | 0.46 | $ | 1.36 | $ | 1.01 | |||||||
Diluted | $ | 0.46 | $ | 0.46 | $ | 1.36 | $ | 1.00 | |||||||
Weighted-average number of common shares (basic) | 5,374 | 5,328 | 5,359 | 5,311 | |||||||||||
Weighted-average number of common shares (diluted) | 5,402 | 5,353 | 5,399 | 5,343 |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Net income | $ | 2,478 | $ | 2,441 | $ | 7,328 | $ | 5,351 | |||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||
Foreign currency translation adjustment | — | (204 | ) | (285 | ) | (166 | ) | ||||||||
Retirement plan liability adjustment | 337 | 241 | 895 | 666 | |||||||||||
Interest rate swap agreement adjustment | 13 | (1 | ) | 43 | (53 | ) | |||||||||
Comprehensive income | $ | 2,828 | $ | 2,477 | $ | 7,981 | $ | 5,798 |
June 30, 2013 | September 30, 2012 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 4,609 | $ | 7,176 | |||
Receivables, net of allowance for doubtful accounts of $604 and $539, respectively | 22,620 | 20,780 | |||||
Inventories, net | 20,664 | 17,505 | |||||
Deferred income taxes | 1,343 | 1,415 | |||||
Prepaid expenses and other current assets | 1,307 | 1,122 | |||||
Current assets of business held for sale | — | 3,908 | |||||
Total current assets | 50,543 | 51,906 | |||||
Property, plant and equipment, net | 29,566 | 29,726 | |||||
Intangible assets, net | 13,083 | 14,627 | |||||
Goodwill | 7,015 | 7,015 | |||||
Other assets | 1,689 | 695 | |||||
Noncurrent assets of business held for sale | — | 2,576 | |||||
Total assets | $ | 101,896 | $ | 106,545 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Current maturities of long-term debt | $ | 4,380 | $ | 2,000 | |||
Accounts payable | 7,353 | 9,181 | |||||
Accrued liabilities | 6,864 | 4,330 | |||||
Current liabilities of business held for sale | — | 1,171 | |||||
Total current liabilities | 18,597 | 16,682 | |||||
Long-term debt, net of current maturities | 7,130 | 19,683 | |||||
Deferred income taxes | 203 | 1,154 | |||||
Other long-term liabilities | 7,664 | 8,494 | |||||
Noncurrent liabilities of business held for sale | — | 390 | |||||
Shareholders’ equity: | |||||||
Serial preferred shares, no par value, authorized 1,000 shares | — | — | |||||
Common shares, par value $1 per share, authorized 10,000 shares; issued and outstanding shares – 5,407 at June 30, 2013 and 5,366 at September 30, 2012 | 5,407 | 5,366 | |||||
Additional paid-in capital | 7,661 | 7,523 | |||||
Retained earnings | 66,925 | 59,597 | |||||
Accumulated other comprehensive loss | (11,691 | ) | (12,344 | ) | |||
Total shareholders’ equity | 68,302 | 60,142 | |||||
Total liabilities and shareholders’ equity | $ | 101,896 | $ | 106,545 |
Nine Months Ended June 30, | |||||||
2013 | 2012 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 7,328 | $ | 5,351 | |||
Income from discontinued operations, net of tax | (2,381 | ) | (964 | ) | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 4,465 | 4,741 | |||||
Gain on disposal of operating assets | (89 | ) | — | ||||
LIFO expense (income) | (787 | ) | 643 | ||||
Share transactions under company stock plan | 179 | 753 | |||||
Deferred income taxes | (179 | ) | (102 | ) | |||
Changes in operating assets and liabilities: | |||||||
Receivables | (1,840 | ) | 726 | ||||
Inventories | (2,372 | ) | (5,513 | ) | |||
Refundable income taxes | — | 281 | |||||
Prepaid expenses and other current assets | (185 | ) | (435 | ) | |||
Other assets | (994 | ) | (218 | ) | |||
Accounts payable | (1,829 | ) | (2,091 | ) | |||
Accrued liabilities | 1,521 | 982 | |||||
Other long-term liabilities | 143 | (161 | ) | ||||
Net cash provided by operating activities of continuing operations | 2,980 | 3,993 | |||||
Net cash provided by (used for) operating activities of discontinued operations | (235 | ) | 593 | ||||
Cash flows from investing activities: | |||||||
Acquisition of business | — | (24,886 | ) | ||||
Proceeds from disposal of operating assets | 164 | — | |||||
Capital expenditures | (2,836 | ) | (1,676 | ) | |||
Net cash used for investing activities of continuing operations | (2,672 | ) | (26,562 | ) | |||
Net cash provided by (used for) investing activities of discontinued operations | 8,641 | (115 | ) | ||||
Cash flows from financing activities: | |||||||
Proceeds from term note | — | 10,000 | |||||
Repayments of term note | (1,500 | ) | (1,500 | ) | |||
Proceeds from revolving credit agreement | 37,563 | 48,184 | |||||
Repayments of revolving credit agreement | (46,271 | ) | (35,058 | ) | |||
Proceeds from other debt | — | 2,302 | |||||
Dividends paid | (1,073 | ) | (1,060 | ) | |||
Other | — | (29 | ) | ||||
Net cash provided by (used for) financing activities of continuing operations | (11,281 | ) | 22,839 | ||||
Increase (decrease) in cash and cash equivalents | (2,567 | ) | 748 | ||||
Cash and cash equivalents at the beginning of the period | 7,176 | 6,431 | |||||
Effect of exchange rate changes on cash and cash equivalents | — | (60 | ) | ||||
Cash and cash equivalents at the end of the period | $ | 4,609 | $ | 7,119 | |||
Supplemental disclosure of cash flow information of continuing operations: | |||||||
Cash paid for interest | $ | (239 | ) | $ | (314 | ) | |
Cash paid for income taxes, net | (3,626 | ) | (1,822 | ) |
1. | Summary of Significant Accounting Policies |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Income from continuing operations | $ | 2,557 | $ | 2,102 | $ | 4,947 | $ | 4,387 | |||||||
Income (loss) from discontinued operations, net of tax | (79 | ) | 339 | 2,381 | 964 | ||||||||||
Net income | $ | 2,478 | $ | 2,441 | $ | 7,328 | $ | 5,351 | |||||||
Weighted-average common shares outstanding (basic) | 5,374 | 5,328 | 5,359 | 5,311 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Stock options | 1 | 12 | 1 | 19 | |||||||||||
Restricted shares | 14 | 6 | 10 | 6 | |||||||||||
Performance shares | 13 | 7 | 29 | 7 | |||||||||||
Weighted-average common shares outstanding (diluted) | 5,402 | 5,353 | 5,399 | 5,343 | |||||||||||
Net income per share – basic | |||||||||||||||
Continuing operations | $ | 0.47 | $ | 0.40 | $ | 0.92 | $ | 0.83 | |||||||
Discontinued operations | (0.01 | ) | 0.06 | 0.44 | 0.18 | ||||||||||
Net income | $ | 0.46 | $ | 0.46 | $ | 1.36 | $ | 1.01 | |||||||
Net income per share – diluted: | |||||||||||||||
Continuing operations | $ | 0.47 | $ | 0.40 | $ | 0.92 | $ | 0.82 | |||||||
Discontinued operations | (0.01 | ) | 0.06 | 0.44 | 0.18 | ||||||||||
Net income | $ | 0.46 | $ | 0.46 | $ | 1.36 | $ | 1.00 | |||||||
Anti-dilutive weighted-average common shares excluded from calculation of diluted earnings per share | 18 | 147 | 58 | 147 |
2. | Inventories |
June 30, 2013 | September 30, 2012 | ||||||
Raw materials and supplies | $ | 7,871 | $ | 4,207 | |||
Work-in-process | 6,631 | 9,156 | |||||
Finished goods | 6,162 | 4,142 | |||||
Total inventories | $ | 20,664 | $ | 17,505 |
3. | Goodwill and Intangible Assets |
June 30, 2013 | Estimated Useful Life | Original Cost | Accumulated Amortization | Net Book Value | |||||||||
Intangible assets: | |||||||||||||
Trade name | 10 years | $ | 1,900 | $ | 397 | $ | 1,503 | ||||||
Non-compete agreement | 5 years | 1,500 | 589 | 911 | |||||||||
Below market lease | 5 years | 900 | 460 | 440 | |||||||||
Customer relationships | 10 years | 13,000 | 2,771 | 10,229 | |||||||||
Order backlog | 1 year | 2,100 | 2,100 | — | |||||||||
Total intangible assets | $ | 19,400 | $ | 6,317 | $ | 13,083 |
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 | |||||||||
Total intangible assets | $ | 19,400 | $ | 4,773 | $ | 14,627 |
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 |
4. | Accumulated Other Comprehensive Loss |
June 30, 2013 | September 30, 2012 | ||||||
Foreign currency translation adjustment, net of tax | $ | (5,851 | ) | $ | (5,566 | ) | |
Retirement plan liability adjustment, net of tax | (5,825 | ) | (6,720 | ) | |||
Interest rate swap agreement adjustment, net of tax | (15 | ) | (58 | ) | |||
Total accumulated other comprehensive loss | $ | (11,691 | ) | $ | (12,344 | ) |
5. | Long-Term Debt |
June 30, 2013 | September 30, 2012 | ||||||
Revolving credit agreement | 2,630 | $ | 11,338 | ||||
Term loan | 6,500 | 8,000 | |||||
Promissory Note | 2,380 | 2,345 | |||||
11,510 | 21,683 | ||||||
Less – current maturities | 4,380 | 2,000 | |||||
Total long-term debt | $ | 7,130 | $ | 19,683 |
6. | Income Taxes |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Current income tax provision: | |||||||||||||||
U.S. federal | $ | 1,056 | $ | 638 | $ | 1,893 | $ | 1,592 | |||||||
U.S. state and local | 80 | 144 | 245 | 321 | |||||||||||
Non-U.S | 57 | 9 | 96 | 46 | |||||||||||
Total current tax provision | 1,193 | 791 | 2,234 | 1,959 | |||||||||||
Deferred income tax provision (benefit): | |||||||||||||||
U.S. federal | (88 | ) | 40 | (98 | ) | 31 | |||||||||
U.S state and local | (2 | ) | — | (2 | ) | — | |||||||||
Total deferred tax provision (benefit) | (90 | ) | 40 | (100 | ) | 31 | |||||||||
Income tax provision | $ | 1,103 | $ | 831 | $ | 2,134 | $ | 1,990 |
Balance at September 30, 2012 | $ | 120 | |
Increase due to tax positions taken in current year | 60 | ||
Balance at June 30, 2013 | $ | 180 |
7. | Retirement Benefit Plans |
Three Months Ended June 30, | Nine months ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Service cost | $ | 72 | $ | 71 | $ | 216 | $ | 214 | |||||||
Interest cost | 212 | 247 | 638 | 740 | |||||||||||
Expected return on plan assets | (371 | ) | (351 | ) | (1,114 | ) | (1,052 | ) | |||||||
Amortization of prior service cost | 13 | 12 | 39 | 35 | |||||||||||
Amortization of net loss | 219 | 210 | 656 | 630 | |||||||||||
Settlement cost | 191 | — | 382 | — | |||||||||||
Net periodic benefit cost | $ | 336 | $ | 189 | $ | 817 | $ | 567 |
8. | Stock-Based Compensation |
Number of Shares | Weighted Average Fair Value at Date of Grant | |||||
Outstanding at September 30, 2012 | 158 | $ | 18.30 | |||
Restricted shares awarded (2013 award) | 12 | 15.50 | ||||
Restricted shares earned (2012 award) | (5 | ) | 22.00 | |||
Performance shares awarded (2013 award) | 60 | 15.98 | ||||
Performance shares earned (2010 award) | (33 | ) | 16.05 | |||
Awards forfeited (various awards) | (38 | ) | 17.00 | |||
Outstanding at June 30, 2013 | 154 | $ | 17.85 |
9. | Business Segments |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Net sales: | |||||||||||||||
SIFCO Forged Components | $ | 28,672 | $ | 25,650 | $ | 84,121 | $ | 76,500 | |||||||
Turbine Component Services and Repair | 1,612 | 1,628 | 4,457 | 5,647 | |||||||||||
Consolidated net sales | $ | 30,284 | $ | 27,278 | $ | 88,578 | $ | 82,147 | |||||||
Operating income (loss): | |||||||||||||||
SIFCO Forged Components | $ | 5,457 | $ | 4,137 | $ | 12,740 | $ | 9,931 | |||||||
Turbine Component Services and Repair | (561 | ) | (393 | ) | (1,659 | ) | (854 | ) | |||||||
Corporate unallocated expenses | (1,265 | ) | (827 | ) | (4,044 | ) | (2,733 | ) | |||||||
Consolidated operating income | 3,631 | 2,917 | 7,037 | 6,344 | |||||||||||
Interest expense, net | 72 | 116 | 243 | 336 | |||||||||||
Foreign currency exchange (gain) loss, net | 7 | (19 | ) | 7 | (22 | ) | |||||||||
Other income, net | (108 | ) | (113 | ) | (294 | ) | (347 | ) | |||||||
Consolidated income from continuing operations before income tax provision | $ | 3,660 | $ | 2,933 | $ | 7,081 | $ | 6,377 | |||||||
Depreciation and amortization expense: | |||||||||||||||
SIFCO Forged Components | $ | 1,289 | $ | 1,477 | $ | 3,950 | $ | 4,269 | |||||||
Turbine Component Services and Repair | 99 | 86 | 260 | 250 | |||||||||||
Corporate unallocated expenses | 91 | 74 | 255 | 222 | |||||||||||
Consolidated depreciation and amortization expense | $ | 1,479 | $ | 1,637 | $ | 4,465 | $ | 4,741 | |||||||
LIFO expense (income) for SIFCO Forged Components | $ | (380 | ) | $ | 214 | $ | (787 | ) | $ | 643 |
June 30, 2013 | September 30, 2012 | ||||||
Identifiable assets: | |||||||
SIFCO Forged Components | $ | 87,398 | $ | 84,519 | |||
Turbine Component Services and Repair | 3,620 | 3,480 | |||||
Corporate | 10,878 | 12,063 | |||||
Assets of business held for sale | — | 6,483 | |||||
Consolidated total assets | $ | 101,896 | $ | 106,545 |
10. | Business Acquisition |
Nine Months Ended June 30, 2012 | |||
Net sales | $ | 83,661 | |
Net income | 5,375 | ||
Net income per share (basic) | $ | 1.00 | |
Net income per share (diluted) | 1.00 |
11. | Discontinued Operations, Assets Held for Sale, and Business Divestiture |
Assets: | |||
Receivables, net | $ | 2,574 | |
Inventories, net | 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 long-term 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 |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Net sales | $ | — | $ | 3,690 | $ | 2,727 | $ | 11,410 | |||||||
Income before income tax provision | — | 369 | 180 | 1,354 | |||||||||||
Income tax provision | 79 | 30 | 127 | 390 | |||||||||||
Income (loss) from operations, net of tax | (79 | ) | 339 | 53 | 964 | ||||||||||
Gain (loss) on sale of discontinued operations, net of tax | — | — | 2,328 | — | |||||||||||
Income (loss) from discontinued operations, net of tax | $ | (79 | ) | $ | 339 | $ | 2,381 | $ | 964 |
• | Neither EBITDA nor Adjusted EBITDA reflects the interest expense, or the cash requirements necessary to service interest payments, on indebtedness; |
• | Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and neither EBITDA nor Adjusted EBITDA reflects any cash requirements for such replacements; |
• | The omission of the substantial amortization expense associated with the Company’s intangible assets further limits the usefulness of EBITDA and Adjusted EBITDA; and |
• | Neither EBITDA nor Adjusted EBITDA includes the payment of taxes, which is a necessary element of operations. |
Dollars in thousands | Three Months Ended | Nine Months Ended | |||||||||||||
June 30, | June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Net income | $ | 2,478 | $ | 2,441 | $ | 7,328 | $ | 5,351 | |||||||
Less: Income (loss) from discontinued operations, net of tax | (79 | ) | 339 | 2,381 | 964 | ||||||||||
Income from continuing operations | 2,557 | 2,102 | 4,947 | 4,387 | |||||||||||
Adjustments: | |||||||||||||||
Depreciation and amortization expense | 1,479 | 1,637 | 4,465 | 4,741 | |||||||||||
Interest expense, net | 72 | 116 | 243 | 336 | |||||||||||
Income tax provision | 1,103 | 831 | 2,134 | 1,990 | |||||||||||
EBITDA | 5,211 | 4,686 | 11,789 | 11,454 | |||||||||||
Adjustments: | |||||||||||||||
Foreign currency exchange (gain) loss, net (1) | 7 | (19 | ) | 7 | (22 | ) | |||||||||
Other income, net (2) | (108 | ) | (113 | ) | (294 | ) | (347 | ) | |||||||
Loss (gain) on disposal of operating assets (3) | 33 | — | (89 | ) | — | ||||||||||
Inventory purchase accounting adjustments (4) | — | (4 | ) | — | 436 | ||||||||||
Non-recurring severance expense (5) | — | — | 658 | — | |||||||||||
Equity compensation expense (6) | 148 | 255 | 515 | 822 | |||||||||||
Pension settlement expense (7) | 191 | — | 382 | — | |||||||||||
Acquisition transaction-related expenses (8) | 84 | 36 | 100 | 279 | |||||||||||
LIFO expense (income) (9) | (380 | ) | 214 | (787 | ) | 643 | |||||||||
Adjusted EBITDA | $ | 5,186 | $ | 5,055 | $ | 12,281 | $ | 13,265 |
(1) | Represents the gain or loss from changes in the exchange rates between the functional currency and the foreign currency in which the transaction is denominated. |
(2) | Represents miscellaneous non-operating income or expense, primarily rental income from our Irish subsidiary. |
(3) | Represents the difference between the proceeds from the sale of operating equipment and the carrying value shown on the Company’s books. |
(4) | Represents accounting adjustments to value inventory at fair market value associated with the acquisition of a business that was charged to cost of goods sold when the inventory was sold. |
(5) | Represents severance expense related to the departure of an executive officer. |
(6) | Represents the equity-based compensation expense recognized by the Company under its 2007 Long-term Incentive Plan. |
(7) | Represents expense incurred by a defined benefit pension plan related to settlement of pension obligations. |
(8) | Represents transaction-related costs such as legal, financial, tax due diligence expenses, valuation services costs, and executive travel that are required to be expensed as incurred. |
(9) | Represents the increase (decrease) in the reserve for inventories for which cost is determined using the last in, first out (“LIFO”) method. |
(Dollars in millions) | Nine Months Ended June 30, | Increase (Decrease) | |||||||||
Net Sales | 2013 | 2012 | |||||||||
Aerospace components for: | |||||||||||
Fixed wing aircraft | $ | 41.4 | $ | 38.2 | $ | 3.2 | |||||
Rotorcraft | 25.0 | 21.4 | 3.6 | ||||||||
Components for power generation units | 14.6 | 13.3 | 1.3 | ||||||||
Commercial product and other revenue | 3.1 | 3.6 | (0.5 | ) | |||||||
Total | $ | 84.1 | $ | 76.5 | $ | 7.6 |
• | Material costs decreased 2.3% or $0.6 million to $27.1 million, or 32.2%, compared with $27.7 million, or 36.3% of net sales, in the comparable period of fiscal 2012. The improvement in material cost as a percent of net sales is due primarily to product mix and favorable material pricing in the nine months ended June 30, 2013, compared with the comparable period of fiscal 2012. |
• | LIFO costs decreased $1.4 million to income of $0.8 million or 0.9% of net sales, compared with expense of $0.6 million or 0.8% of net sales in the comparable period of fiscal 2012. The reduction in LIFO expense is primarily driven by a reduction in inventory levels. |
• | All other manufacturing costs increased 22.0% or $6.9 million to $38.3 million, or 45.6% of net sales, compared with $31.4 million, or 41.1 % of net sales, in the comparable period of fiscal 2012. Other manufacturing costs were affected by the following components of cost of goods sold: |
(Dollars in millions) | Nine Months Ended June 30, | Increase (Decrease) | |||||||||
Manufacturing expenditures | 2013 | 2012 | |||||||||
Labor and Benefits | $ | 18.0 | $ | 16.3 | $ | 1.7 | |||||
Inventory Revaluation | 1.0 | (0.5 | ) | 1.5 | |||||||
Utilities | 3.6 | 3.5 | 0.1 | ||||||||
Repairs, maintenance and supplies | 3.6 | 3.3 | 0.3 | ||||||||
Net Scrap | 2.3 | 1.7 | 0.6 | ||||||||
Depreciation | 2.4 | 2.1 | 0.3 | ||||||||
Rent | 0.5 | 0.4 | 0.1 | ||||||||
Tooling | 2.0 | 1.7 | 0.3 |
Weighted Average Interest Rate Nine Months Ended June 30, | Weighted Average Outstanding Balance Nine Months Ended June 30, | ||||||||
2013 | 2012 | 2013 | 2012 | ||||||
Revolving credit agreement | 1.2 | % | 1.2 | % | $ 4.3 million | $ 12.0 million | |||
Term note | 2.9 | % | 2.9 | % | $ 7.3 million | $ 9.3 million | |||
Promissory note | 2.0 | % | 2.0 | % | $ 2.4 million | $ 2.3 million |
(Dollars in millions) | Three Months Ended June 30, | Increase (Decrease) | |||||||||
Net Sales | 2013 | 2012 | |||||||||
Aerospace components for: | |||||||||||
Fixed wing aircraft | $ | 13.6 | $ | 13.6 | $ | — | |||||
Rotorcraft | 8.7 | 7.0 | 1.7 | ||||||||
Components for power generation units | 4.9 | 3.9 | 1.0 | ||||||||
Commercial product and other revenue | 1.5 | 1.1 | 0.4 | ||||||||
Total | $ | 28.7 | $ | 25.6 | $ | 3.1 |
• | Material costs decreased 6.9% or $0.6 million to $8.7 million, or 30.2% of net sales, compared with $9.3 million, or 36.3% of net sales, in the comparable period of fiscal 2012. The improvement in material cost as a percent of net sales is due primarily to product mix and favorable material pricing in the third quarter of fiscal 2013, compared with the comparable period of fiscal 2012. |
• | LIFO costs decreased $0.6 million to income of $0.4 million or 1.3% of net sales, compared with expense of $0.2 million or 0.8% of net sales in the comparable period of fiscal 2012. The reduction in LIFO expense is primarily driven by reduction in inventory levels. |
• | All other manufacturing costs increased 29.3% or $2.9 million to $12.7 million, or 44.2% of net sales, compared with $9.8 million, or 38.2% of net sales, in the comparable period of fiscal 2012. Other manufacturing costs were affected by the following components of cost of goods sold: |
(Dollars in millions) | Three Months Ended June 30, | Increase (Decrease) | |||||||||
Manufacturing expenditures | 2013 | 2012 | |||||||||
Labor and Benefits | $ | 6.0 | $ | 5.5 | $ | 0.5 | |||||
Inventory Revaluation | 0.1 | (0.1 | ) | 0.2 | |||||||
Utilities | 1.2 | 1.0 | 0.2 | ||||||||
Repairs, maintenance and supplies | 1.2 | 1.1 | 0.1 | ||||||||
Net Scrap | 0.8 | 0.4 | 0.4 | ||||||||
Depreciation | 0.8 | 0.8 | — | ||||||||
Rent | 0.2 | 0.1 | 0.1 | ||||||||
Tooling | 0.8 | 0.5 | 0.3 |
Weighted Average Interest Rate Three Months Ended June 30, | Weighted Average Outstanding Balance Three Months Ended June 30, | ||||||||
2013 | 2012 | 2013 | 2012 | ||||||
Revolving credit agreement | 1.0 | % | 1.3 | % | $ 2.5 million | $ 13.0 million | |||
Term note | 2.9 | % | 2.9 | % | $ 6.8 million | $ 8.8 million | |||
Promissory note | 2.0 | % | 2.0 | % | $ 2.4 million | $ 2.3 million |
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 | |
4.3 | Second Amendment and Joinder to Credit and Security Agreement among Fifth Third Bank and SIFCO Industries, Inc. (and subsidiaries) dated July 23, 2013, filed as Exhibit 4.3 to the Company’s Form 8-K dated July 23, 2013 and incorporated herein by reference | |
9.1 | Voting Trust Agreement dated January 31, 2013, filed as Exhibit 9.1 to the Company’s Form 10-Q dated December 31, 2012 and incorporated herein by reference | |
10.1 | 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 | |
10.2 | 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 | |
10.3 | 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 |
Exhibit No. | Description | |
10.4 | 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 | |
10.5 | 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. | |
10.6 | 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 | |
10.7 | 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 | |
10.8 | 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 | |
10.9 | 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 | |
10.10 | 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 | |
10.11 | 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 June 30, 2013 filed with the SEC on August 8, 2013, formatted in XBRL includes: (i) Consolidated Condensed Statements of Operations for the fiscal periods ended June 30, 2013 and 2012, (ii) Consolidated Condensed Statements of Comprehensive Income for the fiscal periods ended June 30, 2013 and 2012, (iii) Consolidated Condensed Balance Sheets at June 30, 2013 and September 30, 2012, (iv) Consolidated Condensed Statements of Cash Flow for the fiscal periods ended June 30, 2013 and 2012, and (iv) the Notes to the Consolidated Condensed Financial Statements. |
SIFCO Industries, Inc. | ||
(Registrant) | ||
Date: August 8, 2013 | /s/ Michael S. Lipscomb | |
Michael S. Lipscomb | ||
President and Chief Executive Officer | ||
(Principal Executive Officer) | ||
Date: August 8, 2013 | /s/ Catherine M. Kramer | |
Catherine M. Kramer | ||
Vice President-Finance and | ||
Chief Financial Officer | ||
(Principal Financial Officer) |
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: August 8, 2013 | /s/ Michael S. Lipscomb | |
Michael S. Lipscomb | ||
President and Chief Executive Officer |
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: August 8, 2013 | /s/ Catherine M. Kramer | |
Catherine M. Kramer | ||
Vice President – Finance and | ||
Chief Financial Officer |
(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: August 8, 2013 | ||
/s/ Michael S. Lipscomb | ||
Michael S. Lipscomb | ||
President and Chief Executive Officer |
(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: August 8, 2013 | ||
/s/ Catherine M. Kramer | ||
Catherine M. Kramer | ||
Vice President – Finance and | ||
Chief Financial Officer |
Discontinued Operations, Assets Held for Sale, and Business Divestiture
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9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations, Assets Held for Sale, and Business Divestiture | 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. The Company received cash proceeds, net of certain transaction fees, of approximately $8,100 for this business and $980 was placed in escrow, pending expiration in June 2014 of indemnification holdback provisions under the sale agreement. The ASC Group business included its U.S. operations, headquartered in Cleveland, Ohio, and three European operations located in France, Sweden and the United Kingdom. The ASC Group business developed, manufactured and sold selective plating products and provided contract services for low volume repair, refurbishment and OEM applications. The transaction resulted in a pre-tax gain of $3,980 in the first nine months of fiscal 2013. The table below presents the components of the balance sheet accounts classified as assets and liabilities held for sale at September 30, 2012.
The financial results of ASC Group included in discontinued operations were as follows:
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Financial Results in Discontinued Operations (Detail) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
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Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Discontinued Operations and Disposal Groups [Abstract] | ||||
Net sales | $ 0 | $ 3,690 | $ 2,727 | $ 11,410 |
Income before income tax provision | 0 | 369 | 180 | 1,354 |
Income tax provision | 79 | 30 | 127 | 390 |
Income (loss) from operations, net of tax | (79) | 339 | 53 | 964 |
Gain (loss) on sale of discontinued operations, net of tax | 0 | 0 | 2,328 | 0 |
Income (loss) from discontinued operations, net of tax | $ (79) | $ 339 | $ 2,381 | $ 964 |
Accumulated Other Comprehensive Loss
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9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss are as follows:
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Long-Term Debt (Tables)
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9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Long-Term Debt | Long-term debt consists of:
In |
Subsequent Events (Notes)
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9 Months Ended |
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Jun. 30, 2013
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Subsequent Events [Abstract] | |
Subsequent Events | 12. Subsequent Events On July 23, 2013, through its wholly-owned subsidiary, General Aluminum Forgings, LLC, the Company completed the purchase of the forging business and substantially all related operating assets from MW General, Inc. (DBA General Aluminium Forgings) (“GAF”). The forging business is operated in GAF's Colorado Springs, Colorado facility. The purchase price for the forging business and related operating assets is approximately $4.5 million payable in cash, subject to certain adjustments related principally to the delivered working capital level or indemnification holdback provisions under the purchase agreement. In addition, the Company has assumed certain current operating liabilities of the forging business. The Company has not yet completed the purchase price accounting related to the GAF acquisition. Effective July 23, 2013, the Company, entered into its second amendment to its existing credit agreement (“the Credit Agreement Amendment”) with Fifth Third Bank. The only material change was to add General Aluminum Forgings, LLC as a new borrower to its existing Credit Agreement. The collective bargaining agreement with the hourly workers at the T&W forging facility, part of SIFCO Forged Components, expired on July 31, 2013. Negotiations regarding extension or renewal of the agreement are ongoing. |
Components of Accumulated Other Comprehensive Loss (Detail) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Sep. 30, 2012
|
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Statement of Other Comprehensive Income [Abstract] | ||
Foreign currency translation adjustment, net of tax | $ (5,851) | $ (5,566) |
Retirement plan liability adjustment, net of tax | (5,825) | (6,720) |
Interest rate swap agreement adjustment, net of tax | (15) | (58) |
Total accumulated other comprehensive loss | $ (11,691) | $ (12,344) |
Stock-Based Compensation (Tables)
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Jun. 30, 2013
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
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Retirement Benefit Plans (Tables)
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Jun. 30, 2013
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Net Periodic Benefit Cost | The components of net periodic benefit cost of the Company’s defined benefit plans are as follows:
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Stock-Based Compensation - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | |||||||
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Jun. 30, 2013
2007 Plan
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Jun. 30, 2012
2007 Plan
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Jun. 30, 2013
2007 Plan
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Jun. 30, 2012
2007 Plan
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Jun. 30, 2013
2007 Plan
Maximum
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Jun. 30, 2013
Stock options
|
Jun. 30, 2013
Performance shares awarded during fiscal 2013
2007 Plan
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Sep. 30, 2012
Performance shares awarded during fiscal 2012
2007 Plan
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Sep. 30, 2011
Performance shares awarded during fiscal 2011
2007 Plan
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Jun. 30, 2013
Restricted shares
Maximum
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Jun. 30, 2013
Restricted shares
Minimum
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stock options, vesting period | 10 years | 10 years | 3 years | 1 year | |||||||
Weighted average remaining term, options outstanding | 2 years | ||||||||||
Aggregate intrinsic value, options outstanding | $ 12 | ||||||||||
Aggregate number of shares that may be awarded | 600 | 600 | |||||||||
Performance period | 3 years | ||||||||||
Common shares earned as percentage of initial target number shares awarded | 150.00% | ||||||||||
Compensation expense accrued as percentage of target levels | 100.00% | 50.00% | 50.00% | ||||||||
Stock options may be awarded | 355 | 355 | |||||||||
Outstanding share awards earned and issued at greater than the target number of shares | 150.00% | ||||||||||
Compensation expense related to performance and restricted shares awarded | 148 | 255 | 515 | 822 | |||||||
Total unrecognized compensation cost related to performance and restricted shares awarded | $ 1,035 | $ 1,035 | |||||||||
Period of recognized compensation cost | 2 years 3 months 18 days |
Inventories - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2013
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Sep. 30, 2012
|
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Inventory Disclosure [Abstract] | ||
Percentage of inventories determined using LIFO method | 37.00% | 44.00% |
Difference between cost of inventories if FIFO method had been used | $ 8,750 | $ 9,537 |
Schedule of Identifiable Assets by Segment (Detail) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Sep. 30, 2012
|
---|---|---|
Identifiable assets | ||
Identifiable assets | $ 101,896 | $ 106,545 |
SIFCO Forged Components
|
||
Identifiable assets | ||
Identifiable assets | 87,398 | 84,519 |
Turbine Component Services and Repair
|
||
Identifiable assets | ||
Identifiable assets | 3,620 | 3,480 |
Corporate
|
||
Identifiable assets | ||
Identifiable assets | 10,878 | 12,063 |
Assets of business held for sale
|
||
Identifiable assets | ||
Identifiable assets | $ 0 | $ 6,483 |
Summary of Activity Related to Uncertain Tax Positions (Detail) (USD $)
In Thousands, unless otherwise specified |
9 Months Ended |
---|---|
Jun. 30, 2013
|
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Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |
Balance at September 30, 2012 | $ 120 |
Increase due to tax positions taken in current year | 60 |
Balance at June 30, 2013 | $ 180 |
Income Taxes (Tables)
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Jun. 30, 2013
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Income Tax Provision | The income tax provision from continuing operations consists of the following:
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Summary of Activity Related to Uncertain Tax Positions | A summary of activity related to the Company’s uncertain tax positions is as follows:
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Inventories
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Jun. 30, 2013
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories consist of:
Inventories are stated at the lower of cost or market. Cost is determined using the last-in, first-out (“LIFO”) method for 37% and 44% of the Company’s inventories at June 30, 2013 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 $8,750 and $9,537 higher than reported at June 30, 2013 and September 30, 2012, respectively. |
Long-Term Debt
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Jun. 30, 2013
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Long-Term Debt Long-term debt consists of:
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 June 30, 2013. This rate 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 June 30, 2013, the interest rate was 1.0%. 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 June 30, 2013. In connection with the purchase of the forging business and substantially all related operating assets from GEL Industries, Inc. (DBA Quality Aluminum Forge, Inc.) (“QAF”), as discussed more fully in Note 10, 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 2.0% per annum. |
Goodwill and Intangible Assets
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Jun. 30, 2013
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets The Company’s intangible assets by major asset class subject to amortization consist of:
The amortization expense on identifiable intangible assets for the nine months ended June 30, 2013 and 2012 was $1,544 and $2,186, respectively. Amortization expense associated with the identified intangible assets, all of which relates to SIFCO Forged Components, is expected to be as follows:
The Company’s goodwill, all of which relates to the SIFCO Forged Components segment, is not being amortized and is subject to annual impairment tests. All of the goodwill is expected to be deductible for tax purposes. |
Income Taxes - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified |
9 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Sep. 30, 2012
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Income Tax Disclosure [Abstract] | |||
Effective tax rate | 30.00% | 31.00% | |
Liabilities recorded for uncertain tax positions and related interest and penalties | $ 180 | $ 120 |
Business Segments (Tables)
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Jun. 30, 2013
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Information Regarding Segments | The following table summarizes certain information regarding segments of the Company’s continuing operations:
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Identifiable Assets by Segment |
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Summary of Significant Accounting Policies - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
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Accounting Policies [Abstract] | |
Interest rate swap agreement amount | $ 6,500 |
Expected Amortization Expense (Detail) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
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Goodwill and Intangible Assets Disclosure [Abstract] | |
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 |