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 $83.4 million; its shares were traded at around $15.75 with a P/E ratio of 12.9 and P/S ratio of 0.8.
Highlight of Business Operations:The ACM Groups backlog as of September 30, 2009 decreased to $70.6 million, of which $52.1 million is scheduled for delivery during fiscal 2010, compared with $76.6 million as of September 30, 2008, of which $63.8 million was scheduled for delivery during fiscal 2009. All orders are subject to modification or cancellation by the customer with limited charges. It is important to note that the delivery lead times for certain raw materials (e.g. aerospace grades of steel and titanium alloys) have continued to shorten and the ACM Group believes that such lead time reduction may have resulted in a fundamental shift in the ordering pattern of its customers. The ACM Group believes that a likely consequence of such a shift is that customers are not placing orders as far in advance as they previously did, which results in a reduction, relative to comparable prior periods, in the ACM Groups backlog. Accordingly, such backlog reduction is not necessarily completely indicative of actual sales expected for any succeeding period. During fiscal 2009, the ACM Group experienced a decrease in orders for products that principally support commercial aircraft.
The development of remanufacturing and repair processes is an ordinary part of the Repair Groups business. The Repair Group continues to invest time and money on research and development activities. The Companys research and development activities in repair processes and high temperature-resistant coatings applied to super-alloy materials have applications in the small aerospace turbine engine markets. Operating costs related to such activities are expensed during the period in which they are incurred. The Groups research and development expense was $0.4 million and $0.5 million in fiscal 2009 and 2008, respectively.
The Repair Groups backlog from continuing operations as of September 30, 2009 decreased to $3.4 million, of which $2.3 million is scheduled for delivery during fiscal 2010 and $1.1 million is on hold, compared with $4.5 million as of September
30, 2008, of which $2.3 million was scheduled for delivery during fiscal 2009 and $2.2 million was on hold. All orders are subject to modification or cancellation by the customer with limited charges. The Repair Group believes that the backlog may not necessarily be indicative of actual sales for any succeeding period.
Read the The complete ReportSIF is in the portfolios of John Buckingham of AL FRANK ASSET MANAGEMENT INC, Chuck Royce of ROYCE & ASSOCIATES.