SIFCO Industries, Inc. (“SIFCO”) Announces Fourth Quarter and Fiscal 2018 Financial Results
CLEVELAND--(BUSINESS WIRE)--Dec 6, 2018--SIFCO Industries, Inc. (NYSE American: SIF) today announced its financial results for its fourth quarter and fiscal 2018, which ended September 30, 2018.
Fourth Quarter and Fiscal Year 2018 HighlightsResults for the Fourth Quarter Net sales in the fourth quarter of fiscal 2018 increased 6.9% to $30.5 million, compared with $28.5 million in the fourth quarter of fiscal 2017. Net loss for the fourth quarter of fiscal 2018 was $2.7 million, or ($0.49) per diluted share, compared with a loss of $3.7 million or ($0.68) per diluted share, in the fourth quarter of fiscal 2017. EBITDA was $0.2 million in the fourth quarter of fiscal 2018 compared with a loss of $0.5 million in the fourth quarter of fiscal 2017. See “Use of Non-GAAP Financial Measures” section within this release for important information regarding EBITDA and Adjusted EBITDA presented, below. Adjusted EBITDA in the fourth quarter of fiscal 2018 was $0.8 million compared with Adjusted EBITDA of $0.2 million in the fourth quarter of fiscal 2017. Results for Fiscal Year 2018 Net sales in fiscal 2018 decreased 8.4% to $111.2 million, compared with $121.5 million in fiscal 2017. Net loss for fiscal 2018 was $7.2 million, or ($1.30) per diluted share, compared with net loss of $14.2 million, or ($2.59) per diluted share, in fiscal 2017. EBITDA was $3.1 million in fiscal 2018 compared with a loss of $1.0 million in fiscal 2017. Adjusted EBITDA in fiscal 2018 was $3.0 million with Adjusted EBITDA of $6.2 million in fiscal 2017. Other Highlights Backlog as of September 30, 2018 was $99.7 million, of which $73.7 million are scheduled for delivery in the next 12 months.
CEO Peter W. Knapper stated, “Fiscal 2018 was a challenging year for SIFCO as we encountered the recurrent downward trend of the Energy market along with working through plant consolidations that had begun in the prior year. We were ahead of this market dynamic, as we consolidated operations of our Alliance, Ohio location into our Cleveland, Ohio location. This consolidation did not fully replace the lost revenue but mitigated incurring fixed costs in fiscal 2018. To further alleviate future market shift, SIFCO is working towards completing our AS9100 certification at our Maniago, Italy location. This certification will allow diversification and a footprint into the aerospace market at this location.
Offsetting the decline in the energy component sales was the continuous strong performance in the Aerospace market, which is supported by ending the fiscal year with our backlog at $99.7 million or a 31.1% increase year over year. SIFCO ended the year with a strong fourth quarter, bringing in $30.5 million in sales or a 6.9% increase compared to prior year fourth quarter. As we proceed into the upcoming fiscal year, we remain focused on serving our customers by producing and delivering quality products on time, continuing to improve our safe working environment, improving our cost profile, and enhancing shareholder value.”
Use of Non-GAAP Financial Measures
The Company uses certain non-GAAP measures in this release. EBITDA, Adjusted EBITDA and the presentation of measures adjusted for certain items that we do not consider part of ongoing operations 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. Items excluded in the presentation of the non-GAAP financials are discussed in the “Supplemental Data” of this filing. 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 under “Non-GAAP Financial Measures” in this news release.
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 (including backlog), 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, competition and other uncertainties detailed from time to time in the Company’s Securities and Exchange Commission filings.
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 our EBITDA and Adjusted EBITDA. References to “EBITDA” mean earnings (losses) from 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 it 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 profit (loss), to measure operating performance. 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 loss to EBITDA and Adjusted EBITDA:
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CONTACT: SIFCO Industries, Inc.
Thomas R. Kubera, 216-881-8600
KEYWORD: UNITED STATES EUROPE NORTH AMERICA OHIO ITALY
INDUSTRY KEYWORD: ENERGY OIL/GAS OTHER ENERGY MANUFACTURING AEROSPACE CHEMICALS/PLASTICS ENGINEERING STEEL OTHER MANUFACTURING
SOURCE: SIFCO Industries, Inc.
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PUB: 12/06/2018 04:35 PM/DISC: 12/06/2018 04:35 PM