SIFCO Industries (NYSEAM) Q4 2009 earnings summary

Executive summary

• FY2009 net sales fell 7.4% amid the global downturn, but sustained profitability; pretax income excluding LIFO effects rose modestly to $10.7M from $10.5M.

• Cash reached $19.9M, with essentially zero borrowings; management emphasized cost control, operating efficiency and readiness for a recovery.

Financial highlights

• Net sales were $93.9M, down 7.4% from $101.4M; operating income was $12.5M versus $9.0M.

• Net income was $8.0M, or $1.52 basic EPS and $1.51 diluted, versus $5.8M, or $1.10 and $1.09, respectively.

• Continuing-operations income was $7.8M versus $5.5M; FY2009 included $1.6M of LIFO income, while FY2008 included $0.5M settlement expense, $0.8M impairment and $1.7M LIFO expense.

• Operating cash flow from continuing operations was $15.3M versus $9.8M; cash and equivalents rose to $19.9M from $10.4M.

Outlook and guidance

• FY2010 capital expenditures expected at $5.5M–$6.5M to support projected business growth; $2.1M was committed at FY2009 year-end.

• Liquidity from operations, cash reserves and the revolving facility was expected to cover working capital through FY2010 and foreseeable needs.

• Commercial aviation demand remained weak and customer delivery schedules were delayed; outlook was cautiously optimistic, with military demand stable.

• ACM expected commercial aviation softness to continue into FY2010; its new 35,000-pound forging hammer cell was planned to expand capacity and product range.