SIFCO Industries (NYSEAM) Q4 2013 earnings summary

Executive summary

• FY2013 net sales and earnings increased as organic growth, acquisitions, improved sales mix, lower material costs and plant efficiencies lifted results.

• After divesting Applied Surface Concepts and exiting Turbine Component Services and Repair, operations were focused on forged components for aerospace and energy markets.

Financial highlights

• Net sales rose 12.8% to $116.0 million from $102.9 million; operating income increased to $13.8 million from $9.0 million.

• Net income increased 56.3% to $10.2 million from $6.5 million; diluted EPS was $1.90 versus $1.22.

• Adjusted EBITDA was $19.5 million versus $18.9 million; FY2013 net income included $0.5 million from discontinued operations, net of tax.

• Continuing-operations cash flow was $7.8 million versus $9.2 million; cash and cash equivalents ended FY2013 at $4.5 million versus $7.2 million.

Outlook and guidance

• FY2014 capital expenditures were expected at $12.0–$13.0 million, principally to enhance production and product capabilities.

• Backlog was $99.9 million at September 30, 2013, with $83.4 million scheduled for FY2014 delivery; shortened customer lead times drove the year-over-year decline.

• FY2014 pension contributions were expected to be $546, subject to potential use of carryover balances; Repair Group wind-down cash inflows were expected at $725.

• The remaining $274 of Repair Group workforce-reduction costs was expected in FY2014; wind-down was expected to finish by December 2013.