SIFCO Industries, Inc. (“SIFCO”) Announces Second Quarter Fiscal 2021 Financial Results

SIFCO Industries, Inc. (NYSE American: SIF) today announced financial results for its second quarter of fiscal 2021, which ended March 31, 2021.

Second Quarter Results

• Net sales in the second quarter of fiscal 2021 decreased 18.6% to $24.9 million, compared with $30.5 million for the same period in fiscal 2020.
• Net loss for the second quarter of fiscal 2021 was $1.5 million, or ($0.26) per diluted share, compared with net income of $3.3 million, or $0.57 per diluted share, in the second quarter of fiscal 2020.
• EBITDA was $0.7 million in the second quarter of fiscal 2021, compared with $5.4 million in the second quarter of fiscal 2020.
• Adjusted EBITDA in the second quarter of fiscal 2021 was $1.2 million, compared with Adjusted EBITDA of $4.5 million in the second quarter of fiscal 2020.

Year to Date Results

• Net sales in the first six months of fiscal 2021 decreased 12.0% to $49.9 million, compared with $56.7 million for the same period in fiscal 2020.
• Net income for the first six months of fiscal 2021 was $1.5 million, or $0.25 per diluted share, compared with net income of $1.9 million, or $0.33 per diluted share, in the first six months of fiscal 2020.
• EBITDA was $4.8 million in the first six months of fiscal 2021, compared with $6.0 million in the first six months of fiscal 2020.
• Adjusted EBITDA in the first six months of fiscal 2021 was $3.1 million, compared with Adjusted EBITDA of $5.2 million in the first six months of fiscal 2020.

Other Highlights

CEO Peter W. Knapper stated, "While our results for the quarter reflect the pressures on the A&E markets caused by the COVID-19 pandemic, we are all thankful that the impacts of the pandemic are finally showing signs of receding in many places in the world and we are excited that commercial air travel is showing signs of recovery. We continue to work with our customers as we navigate the impacts on our markets together. Our focus on controlling costs and managing working capital contributed to a $4.6 million reduction in debt since the beginning of the fiscal year and we continue to actively manage our costs in light of the continued uncertainty around the shape and duration of the recovery in the industries we serve.”

Use of Non-GAAP Financial Measures

The Company uses certain non-GAAP measures in this release. EBITDA and Adjusted EBITDA are non-GAAP financial measures and are intended to serve as supplements to results provided in accordance with accounting principles generally accepted in the United States. SIFCO Industries, Inc. believes that such information provides an additional measurement and consistent historical comparison of the Company’s performance. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is available in this news release.

Forward-Looking Language

Certain statements contained in this press release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to financial results and plans for future business development activities, and are thus prospective. Such forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, economic conditions, concerns with or threats of, or the consequences of, pandemics, contagious diseases or health epidemics, including COVID-19, competition and other uncertainties the Company, its customers, and the industry in which they operate have experienced and continue to experience, detailed from time to time in the Company’s Securities and Exchange Commission filings.

The Company's Annual Report on Form 10-K for the year ended September 30, 2020 and other reports filed with the Securities & Exchange Commission can be accessed through the Company's website: www.sifco.com, or on the Securities and Exchange Commission's website: www.sec.gov.

SIFCO Industries, Inc. is engaged in the production of forgings and machined components primarily for the aerospace and energy markets. The processes and services include forging, heat-treating, coating, and machining.

Non-GAAP Financial Measures

Presented below is certain financial information based on the Company's EBITDA and Adjusted EBITDA. References to “EBITDA” mean earnings (losses) 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 generally accepted accounting principles in the United States of America (“GAAP”). The Company presents EBITDA and Adjusted EBITDA because management believes that they are useful indicators for evaluating operating performance and liquidity, including the Company’s ability to incur and service debt and it uses EBITDA to evaluate prospective acquisitions. Although the Company uses EBITDA and Adjusted EBITDA for the reasons noted above, the use of these non-GAAP financial measures as analytical tools has limitations. Therefore, reviewers of the Company’s financial information should not consider them in isolation, or as a substitute for analysis of the Company's results of operations as reported in accordance with GAAP. Some of these limitations include:

• 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.

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 (loss), net sales, and operating income (loss), 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 loss 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 (loss) to EBITDA and Adjusted EBITDA:

Reference to the above activities can found in the consolidated financial statements included in Item 8 of the Company's Annual Report on Form 10-K.

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