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SIFCO Industries Inc Reports Operating Results (10-Q)

August 12, 2009 | About:

SIFCO Industries Inc (SIF) filed Quarterly Report for the period ended 2009-06-30.

SIFCO Industries Inc. is engaged 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 include forging heat treating coating welding machining and electroplating; and the products include forgings machined forgings and other machined metal parts remanufactured component parts for turbine engines and electroplating solutions and equipment. SIFCO Industries Inc has a market cap of $54.5 million; its shares were traded at around $10.3 with a P/E ratio of 9.3 and P/S ratio of 0.5.

Highlight of Business Operations:

Net sales in the first nine months of fiscal 2009 decreased 4.5% to $73.0 million, compared with $76.5 million in the comparable period in fiscal 2008. Income from continuing operations in the first nine months of fiscal 2009 was $6.3 million, compared with $5.3 million in the comparable period in fiscal 2008. Included in the $5.3 million of income from continuing operations in the first nine months of fiscal 2008 was expense of $0.5 million related to the business settlement of a product dispute that originated in fiscal 2007. Income (loss) from discontinued operations, net of tax, was $0.2 million of income in the first nine months of fiscal 2009, compared with a loss of $0.2 million in the comparable period in fiscal 2008. Net income in the first nine months of fiscal 2009 was $6.4 million, compared with $5.1 million in the comparable period in fiscal 2008. Included in the $6.4 million of net income in the first nine months of fiscal 2009 was LIFO income of $1.2 million, compared with $0.2 million in the comparable period in fiscal 2008.

Net sales in the first nine months of fiscal 2009 decreased 2.3% to $52.7 million, compared with $54.0 million in the comparable period of fiscal 2008. For purposes of the following discussion, the ACM Group considers aircraft that can accommodate less than 100 passengers to be small aircraft and those that can accommodate 100 or more passengers to be large aircraft. Net sales of airframe components for small aircraft decreased $0.6 million to $28.7 million in the first nine months of fiscal 2009, compared with $29.3 million in the comparable period in fiscal 2008. Net sales of turbine engine components for small aircraft, which consist primarily of business and regional jets, as well as military transport and surveillance aircraft, increased $2.4 million to $16.4 million in the first nine months of fiscal 2009, compared with $14.0 million in the comparable period in fiscal 2008. Net sales of airframe components for large aircraft decreased $2.1 million to $3.9 million in the first nine months of fiscal 2009, compared with $6.0 million in the comparable period in fiscal 2008. Net sales of turbine engine components for large aircraft decreased $0.5 million to $1.9 million in the first nine months of fiscal 2009, compared with $2.4 million in the comparable period in fiscal 2008. Commercial product sales and other revenues were $1.8 million and $2.3 million in the first nine months of fiscal 2009 and 2008, respectively. The ACM Groups decrease in net sales is primarily due to customer order adjustments / push-outs as a result of the overall weak global economic conditions.

Net sales in the third quarter of fiscal 2009 decreased 13.8% to $23.5 million, compared with $27.3 million in the comparable period in fiscal 2008. Income from continuing operations in the third quarter of fiscal 2009 was $2.6 million, compared with $2.1 million in the comparable period in fiscal 2008. Income from discontinued operations, net of tax, was a loss of $0.2 million in the third quarter of fiscal 2009, compared with income of $0.1 million in the comparable period in fiscal 2008. Net income in the third quarter of fiscal 2009 was $2.4 million, compared with $2.2 million in the comparable period in fiscal 2008. Included in the $2.4 million of net income in the third quarter of fiscal 2009 was LIFO income of $0.6 million, compared with $0.1 million in the comparable period in fiscal 2008.

Net sales in the third quarter of fiscal 2009 decreased 14.6% to $16.9 million, compared with $19.7 million in the comparable period of fiscal 2008. For purposes of the following discussion, the ACM Group considers aircraft that can accommodate less than 100 passengers to be small aircraft and those that can accommodate 100 or more passengers to be large aircraft. Net sales of airframe components for small aircraft decreased $2.9 million to $9.3 million in the third quarter of fiscal 2009, compared with $12.2 million in the comparable period in fiscal 2008. Net sales of turbine engine components for small aircraft, which consist primarily of business and regional jets, as well as military transport and surveillance aircraft, increased $1.1 million to $5.1 million in the third quarter of fiscal 2009, compared with $4.0 million in the comparable period in fiscal 2008. Net sales of airframe components for large aircraft decreased $1.0 million to $1.3 million in the third quarter of fiscal 2009, compared with $2.3 million in the comparable period in fiscal 2008. Net sales of turbine engine components for large aircraft were $0.7 million in the third quarters of both fiscal 2009 and 2008. Commercial product sales and other revenues were $0.5 million in the third quarters of both fiscal 2009 and 2008. The ACM Groups decrease in net sales is primarily due to customer order adjustments / push-outs as a result of the overall weak global economic conditions.

The Companys operating activities provided $10.4 million of cash (of which $10.6 million was provided by continuing operations) in the first nine months of fiscal 2009, compared with $5.5 million of cash provided by operating activities (of which $6.2 million was provided by continuing operations) in the first nine months of fiscal 2008. The $10.6 million of cash provided by operating activities of continuing operations in first nine months of fiscal 2009 was primarily due to (i) income from continuing operations, before depreciation expense and deferred taxes, of $7.6 million, (ii) a $2.6 million decrease in inventory, (iii) a $0.8 million decrease in accounts receivable, and (iv) $1.3 million due to the collection of refundable income taxes, offset by (i) a $0.9 million decrease in accounts payable and (ii) a $0.4 million decrease in other long-term liabilities. These changes in the components of working capital were due to factors resulting from normal business conditions of the Company, including (i) the ACM Groups focused efforts to optimize its raw material and in-process inventory levels

Capital expenditures, all of which were from continuing operations, were $3.2 million in the first nine months of fiscal 2009 compared with $1.8 million in the comparable fiscal 2008 period. Capital expenditures during the first nine months of fiscal 2009 consist of $2.2 million by the ACM Group, $0.1 million by the ASC Group, $0.2 million by the Repair Group and $0.7 million for the initial implementation of a new company-wide management information system. The Company anticipates that total fiscal 2009 capital expenditures will be within the range of $4.0 to $5.0 million. In addition to the $3.2 million expended during the first nine months of fiscal 2009, $1.2 million has been committed as of June 30, 2009, which includes $0.3 million for the further implementation of the new company-wide management information system.

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