<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended 9/30/95 Commission file number 1-5978
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SIFCO Industries, Inc., and Subsidiaries
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Ohio 34-0553950
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
970 East 64th Street, Cleveland Ohio 44103
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code (216) 881-8600
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
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Common Shares, $1 Par Value American Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act:
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(TITLE OF CLASS)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT
OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO ___
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405
OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO
THIS FORM 10-K. ___
STATE THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NONAFFILIATES OF
THE REGISTRANT. (THE AGGREGATE MARKET VALUE SHALL BE COMPUTED BY REFERENCE TO
THE PRICE AT WHICH THE STOCK WAS SOLD, OR THE AVERAGE BID AND ASKED PRICES OF
SUCH STOCK, AS OF A SPECIFIED DATE WITHIN 60 DAYS PRIOR TO THE DATE OF FILING.)
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As of December 12, 1995 -- $11,643,158
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S CLASSES
OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE (APPLICABLE ONLY TO
CORPORATE REGISTRANTS.)
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As of November 30, 1995 -- 5,104,438
DOCUMENTS INCORPORATED BY REFERENCE: LIST THE FOLLOWING DOCUMENTS IF
INCORPORATED BY REFERENCE AND THE PART OF THE FORM 10-K INTO WHICH THE DOCUMENT
IS INCORPORATED: (1) ANY ANNUAL REPORT TO SECURITY HOLDERS; (2) ANY PROXY OR
INFORMATION STATEMENT; AND (3) ANY PROSPECTUS FILED PURSUANT TO RULE 424(b) OR
(c) UNDER THE SECURITIES ACT OF 1933. (THE LISTED DOCUMENTS SHOULD BE CLEARLY
DESCRIBED FOR IDENTIFICATION PURPOSES.)
Portions of the 1995 Annual Report to Shareholders (Part I, III, IV)
Portions of the Proxy Statement for Annual Meeting of Shareholders on January
30, 1996
(Part I,II,III)
<PAGE> 2
PART I
ITEM 1. BUSINESS
THE COMPANY
-----------
SIFCO Industries, Inc., an Ohio corporation (the "Company"), was
incorporated in 1916. The executive offices of the Company are located at 970
East 64th Street, Cleveland, Ohio 44103, and its telephone number is (216)
881-8600.
The Company is engaged in the production and sale of a variety of
metal-working processes, services and products produced primarily to the
specific design requirements of its customers. The processes include forging,
heat treating, 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. The Company's operations are conducted in two segments: (1)
specialty products and (2) forgings.
SPECIALTY PRODUCTS
------------------
The Company's specialty products segment consists of the repair and
remanufacture of jet engine and industrial turbine components; precision
machining for aerospace applications, including subassemblies and finished
replacement parts; and equipment, solutions and contract services in selective
electroplating for aerospace, defense and industrial markets.
FORGINGS
--------
The Company's forging segment consists of the production and some
finishing of forgings in numerous alloys for application in the aerospace and
several sophisticated industrial markets, utilizing a variety of processes,
including conventional and near-net shape hot forging and cold forging
techniques. The Company engages in international technology transfer and also
has marketing expertise to provide worldwide sourcing and distribution of
forgings of overseas manufacturers. The Company's forged products include: OEM
and aftermarket parts for aircraft engines; structural airframe components; and
land-based gas turbine engine parts; construction, ordnance and nuclear power
components; valves and other parts for oil drilling and mining equipment; and
low and high pressure closures for boilers.
1
<PAGE> 3
COMPETITION; PRINCIPAL CUSTOMERS; BACKLOG
-----------------------------------------
There is active competition among many companies, large and small, in
every one of the services and products offered by the Company. The Company,
however, believes that it offers a wider variety of services than most of its
competitors and is more experienced than most in meeting the exact requirements
and technical specifications of its customers, particularly those in the
aerospace and turbine components repair markets. In addition, the Company has
the ability to use its management and marketing expertise to provide worldwide
sourcing and selling capabilities.
There is excess capacity in many segments of the forging industry which
the Company believes has the effect of increasing competition and limits the
ability to raise prices. The decline in defense spending that has also
negatively impacted both sales and income of the Company over the last three
years seems to have stabilized. Defense orders received in 1995 were $4.4
million. Defense-related orders received in fiscal 1994 were approximately
$4.5 million, excluding $7.0 million for a retrofit of the CH-46 helicopter.
This compares to $6.0 million in 1993, $8.3 million in 1992 and $15.3 million
in 1991.
The restructuring in the airline industry has also negatively impacted
the sales and income of the Company by increasing price competition for the
available business. A reduction in the number of airlines could result in
fewer new aircraft being ordered as the remaining airlines purchase the used
aircraft from the airlines no longer in business. On the other hand, older
aircraft require repairs more frequently than newer aircraft, and this could
have a positive effect on the Company. The airline industry's long term
outlook is still for continued growth in air travel which would suggest the
need for newer aircraft and growth in the requirement for repairs. The Company
is not able to quantify the interplay of these factors.
The Company believes it can partially compensate for these factors
mentioned above by its efforts to broaden its product lines and develop new
geographic markets, customers and technologies.
The identity and rankings of the Company's principal customers vary
from year to year, and the Company relies on its ability to adapt its services
and operations to changing requirements rather than on any high volume
production of a particular item or group of items for a particular customer or
customers. Sales to the Company's three largest customers were approximately
$3.6 million, $3.2 million and $3.0 million, respectively. Sales to the
Company's next two largest customers were $2.2 million and $1.9 million. Four
of the aforementioned companies serve the airline transportation market and one
($2.2 million) the aerospace market. The Company believes that the total loss
of sales of its largest customer or two or more of the four remaining customers
would result in a materially adverse impact on the business and income of the
Company. Although there is no assurance that this will continue, historically
as one or more major customers have reduced their purchases, one or more other
customers have increased purchases avoiding a materially adverse impact on the
business or financial results of the Company.
2
<PAGE> 4
The Company's backlog of orders was as follows:
<TABLE>
<CAPTION>
9/30/95 9/30/94
------- -------
($000 omitted)
<S> <C> <C>
Specialty products and services 9,000 $ 8,000
Forgings 19,600 19,000
------ -------
$ 28,600 $27,000
======== =======
</TABLE>
Approximately 7% of 1995's backlogs are on hold, and 6% are scheduled
for delivery beyond fiscal year 1996.
No material part of the Company's business is seasonal.
Information concerning the Company's business and its reportable
business segments as set forth on pages 5, 6 and 15, respectively, of the 1995
Annual Report to Shareholders is incorporated herein by reference.
RESEARCH AND DEVELOPMENT; PATENTS; RAW MATERIALS
------------------------------------------------
The forging, machining, development of remanufacturing processes, or
other preparation of prototype parts to customers' specifications for use in
their research and development of new parts or designs has been an ordinary
portion of the Company's business. Apart from such work, the Company has spent
no material amount of time or money on research and development activities; and
the accounting records of the Company do not differentiate between work on
orders for customer research and development and work on other customer orders.
The Company uses in its business various trademarks, trade names,
patents, trade secrets and licenses. While a number of these are important to
it, the Company does not consider that a material part of its business is
dependent on any one or a group of them.
The Company has many sources for the raw materials, primarily high
quality steel, investment castings and chemicals essential to this business.
Suppliers of such materials are located in many areas throughout the country.
The Company does not depend on a single source for the supply of its materials
and believes that its sources are adequate for its business.
ENVIRONMENTAL REGULATIONS
-------------------------
In common with other companies engaged in similar businesses, the
Company has been required to comply with various laws and regulations relating
to the protection of the environment. The costs of such compliance have not
had, and are not presently expected to have, a material effect on the capital
expenditures, earnings or competitive position of the Company and its
subsidiaries under existing regulations and interpretations.
3
<PAGE> 5
EMPLOYEES
---------
The number of the Company's employees increased from 581 at the
beginning of the fiscal year to 615 at the end of the fiscal year.
ITEM 2. PROPERTIES
The Company's fixed assets include the plants described below and a
substantial quantity of machinery and equipment, most of which is general
purpose machinery and equipment using special jigs, tools and fixtures and in
many instances having automatic control features and special adaptions. The
Company's plants, machinery and equipment are in good operating condition, are
well-maintained and substantially all of its facilities are in regular use.
The Company considers the present level of fixed assets capitalized as of
September 30, 1995 suitable and adequate given the current product offerings
for the respective business segments' operations in the current business
environment. The square footage numbers set forth in the following paragraphs
are approximations.
The Specialty Products segment has seven plants with a total of 259
thousand square feet. Selective Plating has three plants, one of which is
located in Independence, Ohio (34 thousand square feet); a leased facility in
Brooklyn, Ohio (14 thousand square feet); and a leased facility in Redditch,
England (10 thousand square feet). Four of these plants with a total of 201
thousand square feet are for the repair and remanufacture jet engine and
industrial turbine components. Two of these plants are located in Cork,
Ireland (100 thousand square feet), one in Minneapolis, Minnesota (59 thousand
square feet) and one in Tampa, Florida (42 thousand square feet). A portion of
the Minneapolis plant is also the site of the Company's machining operations.
The Company also leases space for sales offices and/or its contract
plating services in Norfolk, Virginia; Hartford (East Windsor), Connecticut;
Los Angeles (San Dimas), California; Ft. Lauderdale, Florida; and Tacoma,
Washington. Selective Plating also leases sales office space in Saint-Maur,
France and Singapore.
The Forging segment has one plant of 223 thousand square feet located
in Cleveland, Ohio. This facility is also the site of the Company's corporate
headquarters.
ITEM 3. LEGAL PROCEEDINGS
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
4
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY
HOLDER MATTERS
The information required by Item 5 is incorporated herein by reference
to page 7 and Note 2 on page 13 of the Annual Report to Shareholders for the
year ended September 30, 1995. As of December 12, 1995, the Company had 839
shareholders of record.
ITEM 6. SELECTED FINANCIAL DATA
The information required by Item 4 is incorporated herein by reference
to page 7 of the Annual Report to Shareholders for the year ended September 30,
1995.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The information required by Item 7 is incorporated herein by reference
to pages 5 and 6 of the Annual Report to Shareholders for the year ended
September 30, 1995.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements required by Item 8 are incorporated herein by
reference to pages 8 through 15, inclusive, of the Annual Report to
Shareholders for the year ended September 30, 1995.
ITEM 9. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
Not applicable.
5
<PAGE> 7
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by Item 10 as to Directors of the Registrant,
is incorporated herein by reference to the information set forth on pages 4
through 6 of the Proxy Statement for the Annual Meeting of Shareholders to be
held January 30, 1996.
EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------
The Executive Officers of the Company are elected annually to serve
for one-year terms or until their successors are elected and qualified. The
officers listed below were elected January 31, 1995.
Name Age Title and Business Experience
- ---- --- -----------------------------
Charles H. Smith, Jr. (1) 75 Director since 1941; Chairman of the
Board; Mr. Smith previously served the
Company as its Chief Executive Officer
from January 1943 until February 1983.
Jeffrey P. Gotschall (1) 47 Director since October 1986; Chief
Executive Officer since July 1990;
President since October 1989 and Chief
Operating Officer from October 1986 to
July 1990; Mr. Gotschall previously
served the Company from October 1986
through September 1989 as Executive
Vice President and from May 1985
through February 1989 as President of
SIFCO Turbine Component Services.
George D. Gotschall (1) 75 Director from 1950 to 1958 and
continuously since 1962; Mr. Gotschall
is Assistant Secretary of the Company
and previously served the Company until
February 1983 as Vice President--
International and Treasurer.
Richard A. Demetter 55 Vice President-Finance since January
1979; Chief Financial Officer since
January 1984, and previously Controller
from November 1976 to January 1984.
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<PAGE> 8
PART III (CONTINUED)
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (continued)
EXECUTIVE OFFICERS OF THE REGISTRANT (CONTINUED)
Name Age Title and Business Experience
- ---- --- -----------------------------
Hudson D. Smith (1) 44 Director since 1988. Treasurer of the
Company since 1983; Vice President and
General Manager of SIFCO Forge Group
since February 1995; General Manager of
SIFCO Forge Group's Cleveland Operations
from October 1989 through January 1995;
Group General Sales Manager of SIFCO
Forge Group from July 1985 through
September 1989.
Mara L. Babin, Esq. 45 Secretary since July 1980, and General
Counsel since 1985, Ms. Babin is a
partner in the law firm of Squire,
Sanders & Dempsey and has been an
attorney with the firm since 1975.
(1) Charles H. Smith, Jr. and George D. Gotschall are brothers-in-law.
Hudson D. Smith is the son of Charles H. Smith, Jr. Jeffrey P. Gotschall is
the son of George D. Gotschall.
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 11 is incorporated herein by
reference to pages 10 through 15 of the Proxy Statement for the Annual Meeting
of Shareholders to be held January 30, 1996.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by Item 12 is incorporated herein by
reference to the information set forth on pages 2 through 8 of the Proxy
Statement for the Annual Meeting of Shareholders to be held January 30, 1996.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Not applicable.
7
<PAGE> 9
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) (1) Financial Statements:
The following consolidated financial statements and related notes of
the Registrant and its subsidiaries contained on pages 8 through 15, inclusive,
of the Annual Report to Shareholders for the year ended September 30, 1995, are
incorporated herein by reference.
Consolidated Balance Sheets - September 30, 1995 and 1994.
Consolidated Statements of Income for the Years Ended September 30,
1995, 1994 and 1993.
Consolidated Statements of Shareholders' Equity for the Years Ended
September 30, 1995, 1994 and 1993.
Consolidated Statements of Cash Flows for the Years Ended September
30, 1995, 1994 and 1993.
Notes to Consolidated Financial Statements for the Years Ended
September 30, 1995, 1994 and 1993.
Report of Independent Public Accountants.
(a) (2) Financial Statement Schedules:
------------------------------
Report of Independent Public Accountants on the Financial Statement
Schedules.
Schedule II -- Allowance for Doubtful Accounts for the Years
Ended September 30, 1995, 1994 and 1993.
All schedules, other than Schedules II are omitted since the
information is not required or is otherwise furnished.
8
<PAGE> 10
PART IV (continued)
(a) (3) Exhibits:
---------
** (3) Second Amended Articles of Incorporation, as amended,
and Amended Code of Regulations.
*** (4) Instruments defining the rights of security holders.
Reference is made to Exhibit (3) above and to Note 2,
page 10 of the 1986 Annual Report to Shareholders.
**** (9) Voting Trust Agreement, as amended.
(10) Material Contracts:
*****) (a) 1989 Stock Option Plan
(b) Incentive Compensation Plan, as amended and restated
(c) Deferred Compensation Program, as amended and restated
****) (d) Form of Indemnification Agreement between the
Registrant and each of its Directors and Executive
Officers
*) (e) 1994 Phantom Stock Plan
(13) 1995 Annual Report to Shareholders
***** (21) Subsidiaries of the Registrant
(23) Consent of Arthur Andersen LLP
(24) Powers of Attorney
*) Incorporated herein by reference to Exhibit A to the
Proxy Statement for the Annual Meeting of
Shareholders held January 31, 1995.
**) Incorporated herein by reference to Form 10-K,
September 30, 1986
***) Incorporated herein by reference to Form 10-K,
September 30, 1987
****) Incorporated herein by reference to Form 10-K,
September 30, 1988
*****) Incorporated herein by reference to Form 10-K,
September 30, 1989
(b) (1) Reports on Form 8-K
No reports on Form 8-K were filed during the last quarter of
the fiscal year ended September 30, 1995.
9
<PAGE> 11
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
SIFCO INDUSTRIES, INC.
By: Richard A. Demetter
-------------------
Richard A. Demetter
Chief Accounting Officer
Date: December 18, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Annual Report has been signed below on December 18, 1995 by the following
persons on behalf of the Registrant in the capacities indicated.
/*/ Charles H. Smith, Jr. /*/ Richard S. Gray
- ------------------------- -------------------
Charles H. Smith, Jr. Richard S. Gray
Chairman of the Board; Director
Director
/*/ Jeffrey P. Gotschall /*/ William R. Higgins
- ------------------------ ----------------------
Jeffrey P. Gotschall William R. Higgins
President; Chief Executive Officer; Director
Director
/*/ Richard A. Demetter /*/ David V. Ragone
- ----------------------- -------------------
Richard A. Demetter David V. Ragone
Vice President-Finance; Chief Financial Officer Director
/*/ George D. Gotschall /*/ Thomas J. Vild
- ----------------------- ------------------
George D. Gotschall Thomas J. Vild
Assistant Secretary; Director Director
/*/ Hudson D. Smith /*/ J. Douglas Whelan
- ------------------- ---------------------
Hudson D. Smith J. Douglas Whelan
Treasurer; Director Director
/*/ Richard A. Demetter
-----------------------
Richard A. Demetter
-------------------
(Attorney in Fact)
10
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON THE FINANCIAL STATEMENT SCHEDULES
To the Board of Directors and Shareholders of
SIFCO Industries, Inc.
We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements included in SIFCO Industries, Inc. and
Subsidiaries' annual report to shareholders incorporated by reference in this
Form 10-K, and have issued our report thereon dated October 31, 1995. Our
audit was made for the purpose of forming an opinion on those statements taken
as a whole. The schedule listed in the index of financial statement schedules
is the responsibility of the Company's management and is presented for purposes
of complying with the Securities and Exchange Commission's rules and is not
part of the basic consolidated financial statements. This schedule has been
subjected to the auditing procedures applied in the audit of the basic
consolidated financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic consolidated financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Cleveland, Ohio,
October 31, 1995.
11
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SCHEDULE II
SIFCO INDUSTRIES, INC.
AND SUBSIDIARIES
ALLOWANCES FOR DOUBTFUL ACCOUNTS
FOR THE YEARS ENDED SEPTEMBER 30 1995, 1994, AND 1993
($000 omitted)
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
BALANCE
BEGINNING OF PERIOD $ 538 $ 868 $ 838
Additions
Charged to costs and expenses 86 54 362
Deductions - accounts
determined to be uncollectible (19) (438) (305)
Exchange rate changes and other 121 54 (27)
------ ------ -----
BALANCE
END OF PERIOD $ 726 $ 538 $ 868
====== ====== ======
</TABLE>
12
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EXHIBIT INDEX
Exhibits
--------
(10)(b) Incentive Compensation Plan, as amended and restated
(13) 1995 Annual Report to Shareholders
(23) Consent of Arthur Anderson & Co.
(24) Powers of Attorney
(27) Financial Data Schedule
<PAGE> 1
EXHIBIT 10(b)
SIFCO INCENTIVE PLAN 1996 10/26/95
The incentive plan payout should be linked to superior performance of each
unit and based on surpassing pre-determined BASE goals.
<TABLE>
<CAPTION>
DIVISION PBT NECESSARY TO ACHIEVE A RONA OF:
--------------------------------------------
Return on Net Assets 10% 5%
Net Assets
----------
<S> <C> <C> <C>
FORGE 7384 1731 1115
SSP 11010 2335 1418
MINN 3800 883 567
TAMPA 6698 1616 1058
IRELAND 14160 2323 1537
----- ---- ----
Total Net Assets 43052 Total Division Profit 8889 5694
</TABLE>
<TABLE>
<CAPTION>
INCENTIVE Calculations
----------------------
1995 1996
------------------------------------------ ----------------------------------------------------------------
Estimated As % of Bonus % Plan As % of 5% Incremental
DPBT Net Assets Bonus of DPBT DPBT Net Assets BASE Bonus 15% Bonus Total
--------- ---------- ----- ------- ---- ---------- ---- ----- --------- -----
<S> <C> <C> C> <C> <C> <C> <C> <C> <C> <C> <C>
FORGE 400 5% 0 0.0% 1016 14% 900 12.2% **
SSP 450 4% 0 0.0% 1338 12% 1200 10.9% 60 21 81
MINN 40 1% 0 0.0% 649 17% 500 13.2% 25 22 47
TAMPA 800 11.9% 63 7.9% 967 14% 900 13.4% 45 10 55
IRELAND 1690 11.9% 169 10.0% 1875 13% 1500 10.6% 75 56 131
---- --- ---- ---- ---
TOTAL 3380 232 5845 5000 314
<FN>
NOTE: No bonus will be paid if DPBT is below BASE threshold.
5% bonus paid at BASE threshold.
15% additional bonus on incremental DPBT over BASE threshold.
Maximum payout limited to 50% of salary.
** FORGE Incentive Plan Linked to Gainsharing and Annual Plan performance.
</TABLE>
<PAGE> 1
EXHIBIT 13
[LOGO]
SIFCO
INDUSTRIES, INC.
ANNUAL REPORT
1995
<PAGE> 2
SIFCO Industries is a metalworking manufacturer committed to meeting the
technical, product quality, and service needs primarily of aerospace industry
customers worldwide. SIFCO serves 90% of the world's airlines and maintains a
growing network of manufacturing, service and distribution centers in the
United States, Europe and the Far East. The Company's operations consist of two
business segments:
SPECIALTY PRODUCTS
Provides repair and remanufiicture ofjet engine and
industrial turbine components; precision machining
for aerospace applications, including subassemblies
and finished replacement parts; equipment, solutions
and contract services in selective electroplating for
aerospace, defense and industrial markets.
FORGINGS
Provides specialized forgings in numerous alloys
for applications in the aerospace and sophisticated
industrial markets; marketing to provide worldwide
sourcing and selling capabilities, as well as
international technology transfer.
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS OF 1995
Dollars in thousands, except per share amounts
- --------------------------------------------------------------------------------------------------------------------------
Years Ended September 30 1995 % Change 1994 % Change 1993
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net sales $68,134 10.9% $61,429 18.4% $51,897
Net income (loss) 2,812* 55 (9,101)**
Net income (loss) per share $ .55 .01 (1.80)
Dividends per share -- -- --
Shareholders' equity per share 6.05 12.2% 5.39 4.4% 5.16
Stock price range (high-low) 5 9/16-2 15/16 4 3/4-2 9/16 4 13/16-2 5/8
Shares outstanding 5,092 5,062 5,003
Number of shareholders 835 860 896
Return on beginning shareholders' equity 10.3% 0.2% (24.1%)
Long-term debt/equity percent 21.7% 25.6% 30.5%
<FN>
* Includes reversal of restructuring charge to income of $1,512
* * Includes $6,500 of restructuring expense
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
TO OUR
SHAREHOLDERS
AND EMPLOYEES
DRAMATIC IMPROVEMENT hammers offering advantages for smaller forgings,
while Wyman-Gordon was particularly well
During fiscal 1995 we enjoyed our strongest equipped to produce larger parts.
performance in over four years. Sales improved by
almost $7 million while net earnings improved by
$1.2 million, excluding the reversal of reserves for When Wyman-Gordon closed its hammer facility in
the Forge restructuring project which was completed Worcester, Massachusetts during the year, some of
during the second quarter. Several factors the work was transferred to that company's press
contributed to the year's success. Among the most forging facilities in other locations. Many
important of these was the dramatically improved forgings, however, were not compatible with those
performance of the restructured Forging segment. operations. As a result, we have entered into an
Through its focus on expertise in aerospace forgings, alliance with Wyman-Gordon whereby their
aggressive customer service and improved customers have been offered the opportunity for
efficiencies, the Forging segment increased sales by continued production of hammer forgings at our
almost $3 million and climbed from a loss in 1994 to Cleveland, Ohio forge plant. The arrangernent has
a profit in fiscal 1995. produced orders for forgings on airframes as well
as critical rotating engine parts. The alliance
strengthens our position in the aerospace market
CUSTOMER SATISFACTION and is a statement of confidence in our forging
technology.
Since the implementation of Forge restructuring, an
increased commitment to customer satisfaction has STATE-OF-THE-ART AIRCRAFT FEATURE
generated appreciative responses. For example, SIFCO FORGINGS
Aircraft Braking Systems awarded the Forge the rank
of certified supplier and named them Number One
Supplier in their size range. During the year, The Forge continues to participate in a wide variety
McDonnell-Douglas bestowed the Gold Award, their of new commercial aircraft programs. The most
highest quality achievement rating, and AlliedSignal contemporary include Boeing' s new state-of-the-art
included the Forge in their TQS or "Total Quality 777 and the 737-700. They also are producing
through Speed" program. All of these represent the forgings for the airframes on the Airbus A319, the
"Spirit of Partnering" which is at the core of SIFCO Canadair Challenger 604 business jet, the Gulfstream
Forge philosophy. V and the Mitsubishi MH2000 commercial
helicopter. Military programs include the
McDonnell-Douglas C-17 military transport and the
STRATEGIC ALLIANCE Lockheed Martin F-22 advanced tactical fighter.
For many years, we have shared aerospace The list of programs also includes a large variety of
customers with Wyman-Gordon, the nation's aircraft engines and many other aircraft that have
largest forging company. Our equipment size been equipped with a variety of SIFCO forgings for
range capabilities overlapped, with SIFCO's many years.
2
</TABLE>
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<TABLE>
<S> <C>
INNOVATIVE CUSTOMER SERVICE by Pratt & Whitney of Canada. These are used on
business jets and by regional airlines. We are also
receiving increased business in the manufacture of
The focus on customer service characterizes our new turbine blades, primarily for industrial gas
restructured forging operations and also describes the turbine engines used in electrical power generation.
marketing policies of our Specialty Products
segment. For example, our turbine repair services
early this year initiated an ambitious assistance We provide products and services to a broad base of
program in the management of parts inventories for customers, and some of our products are fairly
airline customers. The program assures on-time unusual. For example, our turbine repair services in
delivery ofthe desired part while keeping the Minneapolis designed and fabricated a complicated
customer's inventory costs to a minimum. These machine that reshapes turbine component vanes with
programs are being well received by major airlines speed and precision. Representatives of a major
and are beginning to establish our turbine repair engine manufacturer happened to see the prototype in
operations as major innovators of customer service in action and were so impressed with its capabilities,
the airline industry. they bought one! Even though the equipment was
originally intended for internal use only, the machine
(or VAM for Vane Adjustment Machine) has become
SPECIALTY PRODUCT UPDATE a new product for our Specialty Products segment
and has generated considerable prestige among
customers and competitors alike for the high tech
The product development prograrns that support our engineering it represents.
turbine repair services are demonstrating their
effectiveness. New repair programs and technologies
have been approved for the new generation power Another interesting program which is literally "space
plants of all major engine manufacturers. For age" involves a plating contract that has been
example, we have several approved repair programs initiated for work on the NASA space station being
for the CFM56, one of the best selling of fabricated in Huntsville, Alabama. The job involves
contemporary power plants which is used on all brush plating of nickel onto aluminum surfaces in the
newer Boeing 737s and Airbus A320s and A340s. space station to provide corrosion protection.
Another "space age" job called for the sample plating
repair ofthe lifting gear handling device used to
We have estimated that we already serve 90% of the position the solid rocket boosters on NASA's space
world's major airlines through OEM or repair shuttles.
services. Whether you fiy China Airlines, Finnair,
Alitalia, Turkish Airlines, Korean Air, Air New
Zealand, Swissair or any of the more familiar U.S. In November 1995 we announced the reorganization
carriers, chances are that SIFCO has participated in of our turbine repair business. Those services are
the quality maintenance that keeps them flying with now headed by Timothy Crean and encompass the
safety and economy. turbine repair facilities in Cork, Ireland, Tampa,
Florida and Minneapolis, Minnesota. Dr. Ken Gove
now heads the Tampa facility and is responsible for
Smaller engines for which we have repair programs expanding the current range of turbine repairs with a
include the PT6, PW100 and JT15, manufactured
3
</TABLE>
<PAGE> 5
<TABLE>
<S> <C>
major focus on hot section turbine components. With We are pleased that Doug has joined our Board of
licensed technologies from Pratt & Whitney, Rolls Directors. His comprehensive knowledge of the
Royce, CFMI, General Electric, and Allison Engine aerospace forging industry and in-depth familiarity
Company, our repair services are strategically with world class manufacturing methods, quality
positioned to assure a significant role in the hot improvement techniques and process control are a
section turbine component repair market. significant asset to the Company.
These products and technologies are not a complete OUTLOOK
representation of our product lines. But they serve as
examples ofthe ingenuity and expertise that have
been a SIFCO tradition beginning with our The International Air Transport Authority (IATA)
participation in the production of the first jet engines early this year reported that the world airlines
to today's most sophisticated power plants. As a collectively earned $1.8 billion in 1994, the
result of our improving diversity we are keeping pace industry's first year in the black since 1989. The
with the evolving needs of airlines worldwide as we IATA Director General predicted that industry profit
work to increase our market share through superior for 1995 would be beyond anything achieved since
service and technology. the 1973 oil crisis, with favorable trends in both
freight and passenger traffic. The Boeing Company
this year, in its analysis of the market outlook for
BOARD ACTION commercial aviation, suggests that the airline
industry has moved through the low point of its
business cycle and is now in the recovery phase, but
The SIFCO Industries, Inc. Board of Directors cautions that commercial aircraft manufacturing
elected J. Douglas Whelan to the Board effective follows the airlines and is just now going through the
October 31, 1995, to fill the position vacated by the low point of the cycle. And though new airplane
retirement of Herbert S. Richey who served on the orders have not rebounded as rapidly as they have in
Board since 1977. We have appreciated Herb's the past, the long term outlook remains promising.
participation throughout his many years of reliable Industry observers expect the trend of improved
service and wish him the very best in retirement. earnings among the world' s airlines to continue.
Douglas Whelan is the President of Wyman-Gordon We are encouraged by these and other positive
Forgings, a division ofthe Wyman-Gordon Company signals regarding our major markets. We also are
of North Grafton, Massachusetts. Mr. Whelan has confident that as a result of our product development
also served as Vice President of Operations of the programs and restructuring efforts we are more than
Cameron Forged Products Division of Cooper ever before competitively positioned to serve the most
Industries, Inc. In May of 1994, Cooper Industries contemporary needs of our customers worldwide.
sold the Cameron Forged Products Division to the
Wyman-Gordon Company.
JEFFREY P. GOTSCHALL CHARLES H. SMITH, JR.
President & CEO Chairman of the Board
December 13, 1995
4
</TABLE>
<PAGE> 6
MANAGEMENT'S
DISCUSSION AND
ANALYSIS OF
BUSINESS
<TABLE>
<S> <C>
OPERATIONS 1993-1995
IN 1993, net sales declined from $57.6 million in 1992 to To this end we have recorded a $6.5 million charge, as
$51.9 million or 10%, with Specialty Products declining mentioned above, to refiect the estimated reduction of the
4% and Forging sales declining 20%. Income from carrying value of certain assets and costs associated with
operations before corporate and interest expense declined downsizing the Forge operation over the next six to nine
$8.0 million to a loss of $7.6 million from income of $.4 months.
million in 1992. Specialty Products accounted for $1.5
million of the decline and Forgings the balance of $6.5
million. The Company recorded $6.5 million of expense Total Company new orders for 1993 increased to $56.0
in the fiscal fourth quarter for which no tax benefit was million from $48.7 million in 1992. Approxfinately $7.5
provided, relating to the restructuring of its Forge Group. million of this increase is the result of new products.
Defense-related sales declined to $7.3 million from $15.3 Defense orders declined to $6.0 million from $8.3
million in 1992. million in 1992. On a positive note, new orders in fiscal
1993 exceeded shipments by $4.1 million. In addition,
we were encouraged by the increasing level of order
Specialty Products sales declined $1.6 million to $34.9 activity from airline repair customers over the last two
million from $36.5 million in 1992. Defense-related quarters of fiscal 1993.
sales fell $6.0 million to $1.0 million in 1993,
accounting for the majority of the consolidated decline in
defense business. Additional volume from our Selectrons IN 1994, net sales increased from $51.9 million to $61.4
acquisition and the new aircraft engine repair facility in million, or approximately 18%, with Specialty Products
Ireland were not enough to offset the decline in defense. increasing 25% and Forgings increasing 6%. Income
The loss of defense business in Specialty Products from operations before corporate and interest expense
accounted for $1.4 million of the $1.5 million profit was $2.3 million compared to a loss of $7.6 million in
decline in this segment. 1993. The Company recorded $6.5 million of expense in
the fourth quarter of fiscal 1993 relating to the
restructuring of its Forge Group. The amount charged
Forging sales declined $4.4 million to $17.5 million from against the reserve in fiscal 1994 was $3.8 million,
$21.9 million in 1992. Defense-related sales accounted reducing the reserve to $2.7 at September 30, 1994. The
for $1.3 million of the decline, dropping to $6.3 million Company had a gain of $.246 million from the sale of
from $7.6 million in 1992. Forging's loss from investments in fiscal 1994. Defense sales were basically
operations before corporate, interest and restructuring flat at $7.0 compared to $7.3 million in 1993.
expense remained basically fiat at $2.2 million despite
the decrease in volume. This was achieved by the cost
reductions that were made during the year and the benefit
of approximately $.7 million of technical assistance
income earned in 1993. It is apparent, though, that the
decline in the commercial aerospace and defense
business has made further adjustments necessary to bring
forging capacity in line with current market conditions.
5
</TABLE>
<PAGE> 7
<TABLE>
<S> <C>
Specialty Products sales increased $8.7 million to $43.6 Specialty Products sales increased $3.8 million to $47.4
million from $34.9 million in 1993. Defense-related million from $43.6 million in 1994. Defense-related
sales were fiat at $1.0 million for both years. Specialty sales were $.7 million compared to $1.0 million last year.
Products income from operations before corporate and Specialty Products income from operations before
interest expenses increased to $3.2 million from $1.1 corporate and interest expense increased to $3.6 million
million in 1993. Increased activity from airline repair from $3.2 million in 1994. Increased activity from
customers accounted for the majority of the increase. airline repair customers was the primary source of the
increase.
Forging sales increased to $18.5 million from $17.5
million in 1993. Defense-related sales were basically fiat Forging sales increased $2.8 million to $21.3 million
at $6.0 million compared to $6.3 million in 1993. from $18.5 million in 1994. Defense-related sales were
Forging's loss from operations before corporate, interest $8.6 million compared to $6.0 million in 1994.
and restructuring charges decreased to $.9 million from Forging's income from operations before corporate and
$2.2 million in 1993. The restructuring of the Forge interest expense increased to $2.1 million (including the
Group, which was implemented at the end of the reversal to income of $1.5 million of the restructuring
second quarter, was planned to be completed by the reserve mentioned above) compared to a $.9 million loss
end of fiscal 1995. A balance of $2.7 million of the in 1994.
$6.5 million reserve provided in fiscal 1993 remained
for that purpose.
Total new orders for fiscal 1995 increased to $72.0
million from $66.6 million in 1994. Defense orders
Total new orders for fiscal 1994 increased to $66.6 declined to $4.4 million from $11.5 million last year. A
million from $56.0 million in 1993. Defense orders retrofit of the CH-46 helicopter accounted for $7.0
increased $5.5 million to $11.5 million from $6.0 million million of defense orders in 1994.
in 1993. A retrofit of the CH-46 helicopter accounted for
$7.0 million of the defense orders.
FINANCIAL POSITION
IN 1995, net sales increased to $68.1 million from $61.4
million or approximately 1 1% with Specialty Products The Company's long-term debt as a percentage of equity
increasing 9% and Forgings increasing 15%. Defense- at the end of the year was 21.7% compared to 25.6% and
related sales increased to $9.3 million from $7.0 million 30.5% in 1994 and 1993.
in 1994. Income before income taxes was $3.1 million
compared to $.270 million in 1994. The Company
completed the restructuring of the Forge Group in the The Company's lead bank has agreed to increase the
second quarter of fiscal 1995 and income before income revolving line of credit to $7.0 million from the current
taxes for fiscal 1995, as well as the second quarter, amount of $6.0 million and to extend the credit
includes the reversal to income of $1.5 million of the agreement to January 1998. The Company had $4.2
restructuring reserve. Income before income taxes in million outstanding against the credit agreement at
fiscal 1994 included a gain of $.25 million from the sale September 30, 1995. The Company feels it has adequate
of investments. funding for its capital expenditures plans of $3.0 million
in the coming year.
6
</TABLE>
<PAGE> 8
SELECTED FINANCIAL DATA
SIFCO INDUSTRIES, INC., AND SUBSIDIARIES
For the years ended September 30
(000 omitted except for per share data)
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Net sales $68,134 $61,429 $51,897 $57,605 $65,326
Operating income (loss) 3,067** 24 (10,297)* (1,574) 3,891
Net gain on disposal of investments 246 ----- 694 -----
Income tax (provision) benefit (255) (215) 1,196 440 (1,046)
Net income (loss) 2,812 55 (9,101) (440) 2,845
Net income (loss) per share .55 .01 (1.80) (.09) .57
Cash dividends per share ----- ----- ----- .21 .24
Shareholders' equity 30,805 27,270 25,814 37,716 37,510
Shareholders' equity per
share at year end 6.05 5.39 5.16 7.57 7.56
Return on beginning
shareholders' equity 10.3% 0.2% (24.1%) (1.2%) 7.8%
Long-term debt 6,675 6,975 7,875 9,815 1,683
Long-term debt to equity percent 21.7% 25.6% 30.5% 26.0% 4.5%
Working capital 12,637 9,675 5,234 14,923 19,598
Current ratio 1.7 1.6 1.3 2.2 3.0
Net property, plant and equipment 23,460 21,476 22,745 24,432 17,076
Total assets 60,682 55,784 54,924 62,172 49,688
Shares outstanding
at year end 5,092 5,062 5,003 4,980 4,959
<FN>
*Includes restructuring expense of $6,500.
* *Includes reversal of restructuring charge to income of $1,512
=======================================================================================================
</TABLE>
<TABLE>
<CAPTION>
STOCK PRICES BY QUARTERS
(AMEX)
1995 1994
- ---------------------------------------------------------
HIGH LOW High Low
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
First Quarter 4 1/8 3 3 1/2 2 11/16
Second Quarter 4 1/8 2 15/16 4 3/4 3
Third Quarter 4 3/4 3 3/16 3 7/8 2 9/16
Fourth Quarter 5 9/16 4 1/4 3 1/4 2 9/16
DIVIDENDS PER SHARE
BY QUARTERS
1995 1994
---- ----
First Quarter $.00 $.00
Second Quarter .00 .00
Third Quarter .00 .00
Fourth Quarter .00 .00
---- ----
$.00 $.00
---- ----
---- ----
</TABLE>
7
<PAGE> 9
CONSOLIDATED STATEMENTS OF INCOME
SIFCO INDUSTRIES, INC., AND SUBSIDIARIES
For the years ended September 30
($000 omitted except for per share data)
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Net sales $68,134 $61,429 $51,897
Costs and expenses:
Cost of goods sold (Note 1) 54,898 50,189 44,285
Selling, general and administrative expenses 11,106 10,830 12,209
Interest income (154) (113) (165)
lnterest expense 1,091 739 739
Restructuring expense (reversal) (Note 1) (1,512) --- 6,500
Other (income) expense, net (Note 1) (362) (486) (1,374)
------- ------- -------
65,067 61,159 62,194
------- ------- -------
Income (loss) before income taxes 3,067 270 (10,297)
Income tax (provision) benefit (Note 3) (255) (215) 1,196
------- ------- -------
Net income (loss) $ 2,812 $ 55 $(9,101)
======= ======= =======
Net income (loss) per share $ .55 $ .01 $ (1.80)
======= ======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
CONSOLIDATED STATEMENTS OF SHARHOLDERS' EQUITY
SIFCO INDUSTRIES, INC., AND SUBSIDIARIES
For the years ended September 30
($000 omitted except for per share data)
<TABLE>
<CAPTION>
Earnings
Retained
Common Capital in for Use
Shares Excess of in the
$1 Par Value Par Value Business
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance - September 30, 1992 $4,980 $5,608 $27,128
Net loss --- --- (9,101)
Shares issued to Employees' Thrift Plan 23 68 ---
Foreign currency translation adjustment --- --- (2,892)
- -----------------------------------------------------------------------------------------------------------------
Balance - September 30, 1993 5,003 5,676 15,135
Net income --- --- 55
Shares issued to Employees' Thrift Plan 17 37 ---
Shares issued for deferred compensation arrangement 42 136 ---
Foreign currency translation adjustment --- --- 1,169
- -----------------------------------------------------------------------------------------------------------------
Balance - September 30, 1994 5,062 5,849 16,359
Net income --- --- 2,812
Shares issued to Employees' Thrift Plan 9 25 ---
Shares issued for deferred compensation arrangement 21 (1) ---
Foreign currency translation adjustment --- --- 669
- -----------------------------------------------------------------------------------------------------------------
Balance - September 30, 1995 $5,092 $5,873 $19,840
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
8
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
<PAGE> 10
CONSOLIDATED BALANCE SHEETS
SIFCO INDUSTRIES, INC., AND SUBSIDIARIES
September 30
($000 omitted except for per share data)
<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $1,469 $2,256
Receivables, less allowance for doubtful accounts
of $726 in 1995 and $538 in 1994 15,121 12,883
Inventories (Note 1) 13,285 10,340
Refundable income taxes (Note 3) --- 1,039
Prepaid expenses and other current assets 711 416
------- -------
Total current assets 30,586 26,934
------- -------
PROPERTY, PLANT AND EQUIPMENT AT COST (NOTES 1 AND 2):
Land 855 855
Buildings 14,424 14,097
Machinery and equipment 43,136 38,173
------- -------
58,415 53,125
Less accumulated depreciation and amortization 34,955 31,649
------- -------
23,460 21,476
------- -------
OTHER ASSETS:
Funds held by trustee for capital project (Note 2) 472 733
Cash surrender value of officers' life insurance 64 113
Goodwill, net of amortization (Note 1) 4,097 4,213
Deferred charges and other (Note 1) 2,003 2,315
------- -------
6,636 7,374
------- -------
$60,682 $55,784
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable to bank (Note 2) $4,200 $2,400
Current maturities of long-term debt (Note 2) 2,300 1,900
Accounts payable 6,664 6,206
Accrued salaries and wages 658 538
Accrued workers' compensation 382 383
Other accrued expenses 3,718 3,146
Accrued restructuring expense (Note 1) --- 2,686
Accrued income taxes (Note 3) 27 ---
------- -------
Total current liabilities 17,949 17,259
------- -------
LONG-TERM DEBT NET OF CURRENT MATURITIES (NOTE 2) 6,678 6,975
------- -------
OTHER LONG-TERM LIABILITIES (NOTE1) 5,253 4,280
------- -------
SHAREHOLDERS' EQUITY (NOTE 2):
Serial preferred shares, no par value, authorized 1,000,000
shares in 1995 and 1994 --- ---
Common shares, par value $1 per share, authorized 10,000,000
shares, issued and outstanding 5,092,444 shares in 1995
and 5,062,442 shares in 1994 5,092 5,062
Capital in excess of par value 5,873 5,849
Earnings retained for use in the business 19,840 16,359
------- -------
Total shareholders' equity 30,805 27,270
------- -------
$60,682 $55,784
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
9
<PAGE> 11
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIFCO INDUSTRIES, INC., AND SUBSIDIARIES
For the years ended Septernber 30
($000 omitted except for per share data)
<TABLE>
<CAPTION>
1995 1994 1993
------ ------ ------
<S> <C> <C> <C>
NET CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES:
Net income (loss) $ 2,812 $ 55 $(9,101)
Adjustments to reconcile net
income (loss) to net cash provided
by (used for) operating activities:
Depreciation and amortization 3,416 2,988 2,713
Loss on disposal of property, plant and equipment 40 42 113
Deferred income taxes 33 775 245
Non-cash restructuring expense (reversal) (1,512) --- 6,500
------ ------ ------
4,789 3,860 470
NET CASH PROVIDED BY (USED FOR) CHANGES
IN OPERATING ASSETS AND LIABILITIES:
Receivables (2,238) (2,169) 2,192
Inventories (2,945) (874) 1,365
Accrued or refundable income taxes 1,066 498 (1,185)
Prepaid expenses and other current assets (295) (35) 750
Accounts payable 458 521 293
Accrued salaries and wages 120 81 46
Other accrued expenses 571 (545) (590)
Accrued restructuring expense (1,174) (1,351) ---
------ ------ ------
(4,437) (3,874) 2,871
------ ------ ------
Net cash provided by (used for) operating activities 352 (14) 3,341
NET CASH PROVIDED BY (USED FOR)
INVESTING ACTIVITIES:
Purchase of property, plant and equipment (4,890) (2,197) (3,109)
Decrease in funds held by
trustee for capital project 261 549 767
Other 443 752 3
------ ------ ------
Net cash used for investing activities (4,186) (896) (2,339)
------ ------ ------
NET CASH PROVIDED BY (USED FOR)
FINANCING ACTIVITIES:
Proceeds from additional borrowings 3,800 3,400 ---
Repayment of borrowings (1,900) (1,940) (1,809)
Grants received from Irish government agency 1,147 519 620
Cash dividends declared --- --- ---
------ ------ ------
Net cash provided by (used for) financing activities 3,047 1,979 (1,189)
------ ------ ------
Increase (decrease) in cash and cash equivalents (787) 1,069 (187)
Cash and cash equivalents, beginning of year 2,256 1,187 1,374
------ ------ ------
Cash and cash equivalents, end of year 1,469 $2,256 $1,187
====== ====== ======
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
10
<PAGE> 12
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIFCO Industries, Inc., and subsidiaries
September 30, 1995, 1994 and 1993
1. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
A. PRINCIPLES OF CONSOLIDATION:
The accompanying consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiaries. All
significant intercompany accounts and transactions have been
eliminated.
B. RESTRUCTURING EXPENSE:
In the fourth quarter of 1993, the Company recorded a
restructuring charge of $6.5 million for which no tax benefit was
provided. The charge represented the estimated reduction of the
carrying value of certain Forging segment assets and costs
associated with downsizing the Cleveland Forge operation.
During 1994, the Company began implementing its plan to
restructure the Forge Group's operations. The restructuring was
completed in the second quarter of fiscal 1995 and $1,512
million of the restructuring reserve was reversed to income.
Aclivities charged to the restructuring reserve in fiscal 1995 and
1994 are as follows:
<TABLE>
<CAPTION>
(000,s omitted)
Cash 1995 1994
- ---- ----- -----
<S> <C> <C>
Severance and other $ 75 $ 642
Professional andother restructuring costs 78 709
----- -----
153 1,351
----- -----
Non-Cash
- --------
Write-off of property, plant
equipment and investments 15 1,358
Disposal of unsaleable inventory 14 256
Write-off of accounts receivable 113 349
Healthcare benefits 227 --
Employee claim settlements 541 --
Other 111 500
----- -----
1,021 2,463
----- -----
TOTAL $1,174 $3,814
===== =====
</TABLE>
C. INVENTORY VALUATION:
Inventories are stated at the lower of cost or market and include
the cost of material, labor and factory overhead.
Inventories entering into the determination of cost of sales are
summarized as follows:
($000 omitted)
1995 1994
------ ------
Last-in, first-out cost $ 3,344 $ 2,596
First-in, first-out or average cost 9,941 7,744
------- -------
$13,285 $10,340
======= =======
Under the average cost method of accounting, LIFO
inventories would have been $3,463,000 and $3,378,000 higher
than reported at September 30, 1995 and 1994, respectively.
The inventories at September 30, 1995 and 1994, respectively,
consisted of raw materials and supplies of $2,390,000 and
$1,847,000, and finished goods and work-in-process of
$10,895,000 and $8,493,000.
D. DEPRECIATION POLICY:
For financial reporting purposes, the Company provides
for depreciation of plant and equipment, principally by the
straight-line method, at annual rates sufficient to amortize
the cost over each asset's expected useful life. For tax
purposes, the Company uses various accelerated methods
and provides for the related deferred taxes. The principal
rates of depreciation for financial reporting purposes are:
buildings 2% to 5% and machinery and equipment 5% to
33-1/3%.
E. GOODWILL:
Goodwill of $4,637,000, less accumulated amortization of
$540,000 and $424,000 at September 30, 1995 and 1994,
respectively, represents the excess of cost over the net
assets of acquired companies, and is being amortized over
40 years.
F. PENSIONS AND THRIFT PLANS:
The Company and its domestic subsidiaries sponsor five
pension plans covering substantially all United States
employees. Two of the plans are multi-employer defined
contribution plans. Three of the plans are single employer
defined benefit plans. The Company's funding policy for defined
benefit plans is based on an actuarially determined cost method
allowable under Internal Revenue Service regulations.
The defined contribution plans are funded monthly. Pension
costs charged to operations for these plans were $37,000 in
1995, $25,000 in 1994, and $27,000 in 1993.
Net pension expense for the defined benefit plans for 1995,
1994, and 1993 consisted of the following components:
($000 omitted)
1995 1994 1993
---- ---- ----
Service cost-benefits earned
during the year $ 397 $ 459 $ 534
Interest cost on projected
benefit obligation 635 717 767
Actual return on plan assets (1,557) (196) (1,014)
Net amortization and deferral 955 (353) 401
------ ------ -------
Total Expense $ 430 $ 627 $ 688
====== ====== =======
Assumptions used in accounting for the defined benefit
pension plans as of September 30, 1995, 1994, and 1993 were:
Weighted average discount rate
used for ending liabilities 7.50% 8.25% 8.00%
Weighted average discount rate
used for expense 8.25% 8.00% 8.50%
Rate of increase in compensation levels 4.00% 5.00% 5.00%
Expected long-term investment rate 8.50% 8%-8.50% 8%-8.50%
11
<PAGE> 13
NOTES CONTINUED
The following table sets forth the funded status of the defined
benefit plans and the amounts shown in the Consolidated
Balance Sheets as of September 30, 1995 and 1994:
Plans with Assets Plans with Accumu-
in Excess of lated Benefit
Accumulated Obligations in
Benefit Obligations Excess of Assets
($000 omitted)
1995 1994 1995 1994
---- ---- ---- ----
Plan assets at fair value,
primarily listed stocks,
finds, and bonds $ 7,561 $ 6,312 $ 578 $ 460
------- ------- ----- -----
Actuarial present value of
the benefit obligation
vested (5,496) (4,695) (664) (551)
Non-vested (684) (515) (186) (151)
------- ------- ----- -----
Accumulated benefit obligation (6,180) (5,210) (850) (702)
Projected effect of future
salary increases (1,355) (1,481) -- --
------- ------- ----- -----
Total projected benefit obligation (7,535) (6,691) (850) (702)
------- ------- ----- -----
Plan assets over(under)
projected benefit obligation 26 (379) (272) (242)
Unrecognized prior service cost (288) (329) -- --
Unrecognized net loss(gain) (1,159) (648) 154 123
Additional liability -- -- (267) (258)
Unrecognized transition
(asset) obligation (206) (242) (113) (135)
------- ------- ----- -----
Pension liability atend of year $(1,627) $(1,598) $(272) $(242)
======= ======= ===== =====
The employees in Ireland are covered by a pension plan, the
cost of which currently is accrued and fully funded.
All non-union employees of the Company and its domestic
subsidiaries are eligible to participate in the Company's thrift
plan. The total costs for 1995, 1994 and 1993 were $59,000,
$68,000 and $67,000, respectively.
G. POST-RETIREMENT BENEFITS:
The Company and its domestic subsidiaries provide certain
health care benefits for non-union retired employees which are
subject to the provisions of SFAS 106. The Company amended
its current plan to freeze the Company's contribution to
insurance premiums and exclude any active employees who
retire after December 31, 1993 from eligibility for benefits. As a
result of the amendments to the plan, the adoption of SFAS 106
did not have a material impact on the results of operations or
financial position of the Company.
H. NET INCOME PER SHARE:
Net income per share has been computed based upon the
weighted average number of common shares outstanding during
the year and common share equivalents. The weighted average
number of common shares and common share equivalents was
5,082,788 in 1995, 5,064,830 in 1994, and 5,044,532 in 1993.
I. DEFERRED CHARGES AND OTHER:
The Company has classified in Deferred Charges and Other the
net unamortized cost of a 10-year non-competition agreement
with the former owner of Selectrons, Ltd. This amounted to
$2,000,000 less accumulated amortization of $650,000 and
$450,000 as of September 30, 1995 and 1994, respectively.
J. CASH FLOW:
The Company considers all highly liquid short-term
investments with original maturities of three months or less to
be cash equivalents.
Gross interest paid amounted to $1,047,000, $934,000 and
$520,000 in 1995, 1994 and 1993, respectively. Income taxes
refunded were $1,021,000, $1,496,000 and $326,000, in 1995,
1994 and 1993, respectively.
K. OTHER INCOME:
Other income is comprised primarily of grant income from
Irish government agencies, foreign exchange gains and losses,
and royalty and fee income.
L. OTHER LONG TERM LIABILITIES:
The Company receives grants and subsidies from the Republic of
Ireland as an incentive to invest in manufucturing fucilities in
that country. These grants and subsidies require that the
Company maintain operations in that country for 10 years in
order to qualify for the full value of the benefits received.
The Company's liability for the unearned portion of these
items amounted to $3,149,000 and $2,396,000 at
September 30, 1995 and 1994, respectively, and is
included in other long term liabilities.
12
<PAGE> 14
NOTES CONTINUED
2. DEBT
Long-term debt as of September 30, 1995 and 1994 consisted of:
($000 omitted)
1995 1994
---- ----
Variable Rate Industrial Development
Revenue Improvement
and Refunding Bonds $2,625 $2,925
Notes payable to bank, due in
quarterly installments, plus interest
at the base rate plus 1/2% 3,350 1,950
Note payable to bank, due
October 31, 1996, interest
payable quarterly, at rates based
upon LIBOR and DIBOR (adjusted
quarterly) 1,000 1,000
Note payable to seller of
acquired business, atthe base rate
plus 1/2% 2,000 3,000
------ ------
$8,975 $8,875
Less -current maturities 2,300 1,900
------ ------
$6,675 $6,975
====== ======
The Company has a $7 million revolving credit agreement
subject to eligible working capital as defined, which expires
January 1, 1998. As of September 30, 1995, the Company had
$4.2 million outstanding under this agreement. In addition, the
Company has a $1.15 million credit facility which is used for an
irrevocable letter of credit which secures the $1 million loan
from an Irish bank due October 31, 1996. A commitment fee of
3/8% is incurred on the remaining unused balance. Interest is at
the base rate plus 1/4% and is payable quarterly. The average
balance outstanding against the remaining capacity was $3.7
million, $1.0, and $-0- million, during 1995, 1994 and 1993,
respectively.
The Company also has a term loan agreement. Interest is at
the base rate plus 1/2%. Repayment terms are quarterly
installments of $150,000, increasing to $275,000 after January 1,
1996, plus interest.
The Industrial Development bond interest rate is reset weekly,
based on prevailing tax-exempt money market rates, and is
payable quarterly. Principal is payable in quarterly installments
of $75,000 through May 1, 1996, becoming $100,000 quarterly
thereafter, with the final balance due on May 1, 2002. The
bonds are secured by the property and equipment of the facility,
and backed by an irrevocable bank letter of credit which expires
on May 1, 1998.
The revolving credit, term loan and Industrial Development
bonds are secured by the Company's domestic accounts
receivable, inventory and equipment.
Among other covenants, the Company is required to maintain
minimum tangible net worth (as defined) of $19.8 million,
increasing by 50% of net income subsequent to September 30,
1993. At September 30, 1995, tangible net worth exceeded the
required minimum by $2.4 million.
As part of a previous acquisition, the seller provided
financing in the form of unsecured installment notes. These
notes bear interest at the base rate plus 1/2%, payable and
adjustable quarterly. Principal is payable in annual installments
of approximately $1 million, commencing July 1, 1993.
The $1 million note payable to the bank has a variable
interest rate based on a combination of both LIBOR and DIBOR
(Dublin Interbank Rates) rates. The average effective rates of
1995, 1994, and 1993 were 6.2%,5.2%, and 5.2%, respectively.
3. FEDERAL INCOME TAX AND OTHER
The Company adopted the Statement of Financial Accounting
Standards (SFAS) No. 109 "Accounting for Income Taxes" in
October 1993. The adoption of SFAS No. 109 had no material
effect on the financial results of the Company.
The provision for income taxes in the accompanying
Consolidated Statements of Income differs from the statutory
rate as follows:
($000 omitted)
1995 1994 1993
------ ---- ----
Income (loss) before taxes $3,067 $270 $(10,297)
Less - State and local income taxes -- -- --
------ ---- --------
$3,067 $270 $(10,297)
====== ==== ========
Tax provision (benefit) at statutory rate $1,043 $92 $ (3,501)
Tax effect of-
Foreign tax rate differential (466) (192) 34
Restructuring expense not benefited -- -- 2,210
Valuation allowance (410) 217 --
Other(1) 88 98 61
------ ---- --------
Provision (benefit) for federal and
foreign income taxes 255 215 (1,196)
Add - State and local income taxes -- -- --
------ ---- --------
$255 $215 $(1,196)
====== ==== =======
(1)Non-deductible expense
The provision (benefit) for income taxes differs from amounts
currently payable or refundable due to certain items reported fur
financial statement purposes in periods which differ from those
in which they are reported for tax purposes. Income tax expense
is made up of the following components:
($000 omitted)
1995 1994 1993
---- ---- ----
Current federal and foreign income taxes $255 $(560) $(1,422)
Deferred federal income taxes -- 775 226
State and local income taxes -- -- --
------ ----- -------
$255 $ 215 $(1,196)
====== ===== =======
The deferred provision (benefit) is comprised of:
($000 omitted)
1993
----
Use of accelerated depreciation
methods for tax purposes $ 26
Pension expense not currently deductible (49)
Other, none of which individually is significant 249
----
$226
====
13
<PAGE> 15
NOTES CONTINUED
Deferred tax assets and liabilities are comprised of the following:
($000 omitted)
1995 1994
---- ----
Deferred tax assets:
Employee benefits $ 1,297 $ 1,137
Doubtful accounts 129 63
Inventory and property reserves 222 248
Investment valuation reserve 695 695
Foreign taxes credits 161 152
Restructure reserve --- 913
Tax loss carryforward 28 437
Other 81 79
----- -----
2,613 3,724
----- -----
Deferred tax liabilities:
Depreciation 909 857
Personal property taxes 102 102
Other 137 207
----- -----
1,148 1,166
----- -----
Deferred tax assets less liabilities 1,465 2,558
Valuation allowance (1,465) (2,558)
----- -----
Net deferred tax assets $ -- $ --
===== =====
The valuation reserve has been provided to reduce the total net
tax asset to zero because it is possible that the tax asset may not
be realized. The tax loss carryforward will expire in 2009.
Cumulative undistributed earnings of foreign subsidiaries for
which no U.S. federal deferred income tax liabilities have been
recorded were approximately $12,003,000 at September 30, 1995.
4. SUMMARIZED QUARTERLY RESULTS
OF OPERATIONS (UNAUDITED):
($000 omitted)
1995 Quarter Ended
Dec 31 March 31 June 30 Sept 30 Total
Net Sales $15,997 $17,374 $17,721 $17,042 $68,134
Cost of Sales 12,627 13,750 14,633 13,888 54,898
Net Income 313 1,925* 90 484 2,812
Net Income
Per Share $ .06 $ .38 $ .02 $ .09 $ .55
($000 omitted)
1994 Quarter Ended
Dec 31 March 31 June 30 Sept 30 Total
Net Sales $16,415 $14,997 $14,419 $15,598 $61,429
Cost of Sales 13,235 12,853 11,667 12,434 50,189
Net Income(loss) 183 (499) 17 354 55
Net Income(loss)
Per Share $ 0.04 $ (0.10) $ 0.00 $ 0.07 $ .01
*Includes $1,512 reversal of restructuring expense to income
5. STOCK OPTIONS
Under the 1982 and 1989 Stock Option Plans, 450,000
shares are reserved for options to key employees of the
Company to purchase common shares at not less than fair
market value at the date of grant. There were no options
granted in 1995 and 1994, respectively. There were
122,625 and 181,875 options outstanding at September 30,
1995 and 1994, respectively. The 1989 Stock Option Plan
authorization of 69,500 options remained unissued at
September 30, 1995. During 1995, 32,625 options were
exercised at an aggregate price of approximately $72,000.
None were exercised in 1994 or 1993. The outstanding
options have an aggregate option price of $718,000 at per
share prices ranging from $2.22 to $8.08.
The Company has a Phantom Stock Plan. All units
outstanding at September 30, 1995 relate to two previous
versions of the Plan which expired in 1985 and 1992. No
units had been issued under the 1994 Phantom Stock Plan,
under which the authority exists to issue up to 150,000
units through September 30, 1999.
Grantees under the Phantom Stock Plan are credited
with dividend equivalent units. Upon discontinuance of
participation in the Plan, the grantee is normally paid in
cash, although shares may be issued at the discretion of the
Company for all accumulated dividend equivalent units
plus the difference between the market price at the date of
discontinuance and the grant price for vested awarded
units.
As of September 30, 1995 and 1994, 172,213 and
197,813 award units were still outstanding at prices
ranging from $2.72 to $9.25, plus 13,855 and 15,798
dividend equivalent units, respectively. Expense (benefit)
relating to the Phantom Stock Plan was $-0- in 1995, $-0-
in 1994 and ($100,000) in 1993.
14
<PAGE> 16
NOTES CONTINUED
6. BUSINESS SEGMENTS
The Specialty Products segment consists primarily of precision
contract machining, subassemblies, and finished parts; selective
electroplating equipment, solutions and services; and turbine
component remanufacturing. The Forging segment consists
primarily of domestically produced and imported forgings.
No one customer accounted for 10% or more of sales in any
of the above years. Intersegment sales are accounted for at cost.
Corporate expenses represent expenses which are not of an
operating nature and are not allocated to business
segments. Corporate assets are principally cash, cash
equivalents and receivables.
The following table summarizes certain information regarding
segments of the Company's operations for the years ended
September 30, 1995, 1994 and 1993:
Net sales, including intersegment
sales:
Specialty Products $47,370 $43,634 $34,921
Forgings 21,345 18,547 17,518
Intersegment sales (581) (752) (542)
------- ------- -------
$68,134 $61,429 $51,897
======= ======= =======
Income (loss) from operations
before corporate expenses
and interest expense:
Specialty Products $ 3,603 $ 3,206 $ 1,090
Forgings 2,090 (927) (8,738)
------- ------- -------
5,693 2,279 (7,648)
Corporate expenses (1,689) (1,629) (2,075)
Interest income (expense), net (937) (626) (574)
------- ------- -------
Income (loss) from operations 3,067 24 (10,297)
Gain on sale of
investments -- 246 --
Income (loss)before income
taxes $ 3,067 $ 270 $(10,297)
Depreciation and
amortization expense:
Specialty Products $ 2,805 $ 2,314 $ 1,853
Forgings 611 674 860
------- ------- -------
$ 3,416 $ 2,988 $ 2,713
======= ======= =======
Capital expenditures:
Specialty Products $ 4,353 $ 1,917 $ 2,712
Forgings 537 280 397
------- ------- -------
$ 4,890 $ 2,197 $ 3,109
======= ======= =======
Identifiable assets
Specialty Products $47,355 $42,409 $ 39,930
Forgings 11,315 9,663 11,928
Corporate 2,012 3,712 3,066
------- ------- -------
$60,682 $55,784 $ 54,924
======= ======= =======
Foreign operations
Net sales $21,793 $20,068 $ 14,424
Operating profit 2,402 2,504 (247)
Identifiable assets 23,723 17,438 16,976
=============================================================================
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
SIFCO INDUSTRIES, INC.
We have audited the accompanying consolidated balance
sheets of SIFCO INDUSTRIES, INC. (an Ohio corporation) AND
SUBSIDIARIES as of September 30, 1995 and 1994, and the related
consolidated statements of income, shareholders' equity and cash flows
for each of the three years in the period ended September 30, 1995.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of SIFCO
Industries, Inc. and Subsidiaries as of September 30, 1995 and 1994,
and the results of their operations and their cash flows for each of the
three years in the period ended September 30, 1995, in conformity with
generally accepted accounting principles.
Cleveland, Ohio, ARTHUR ANDERSEN LLP
October 31, 1995.
15
<PAGE> 17
DIRECTORS
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
George D. Gotschall William R. Higgins
Assistant Secretary President
SIFCO Industries, Inc. Advanced Technology & Research, Inc.
Clearwater, Florida
Jeffrey P. Gotschall
President and
Chief Executive Officer David V. Ragone
SIFCO Industries, Inc. Visiting Professor
Massachusetts Institute of Technology
Department of Materials Science
Richard S. Gray and Engineering
President Cambridge, Massachusetts
Enterprise Development, Inc.
Cleveland, Ohio
Herbert S. Richey
President
Richey Coal Company
Hot Springs, Virginia
Charles H. Smith, Jr.
Chairman
SIFCO Industries, Inc.
Hudson D. Smith
Treasurer, SIFCO Industries, Inc.
Vice President and General
Manager, Forge Division
</TABLE>
OFFICERS
- -------------------------------------------------------------------------------
Charles H. Smith, Jr.
Chairman of the Board
Jeffrey P. Gotschall
President & Chief Executive Officer
Richard A. Demetter
Vice President - Finance and
Chief Financial Officer
George D. Gotschall
Assistant Secretary
Hudson D. Smith
Treasurer
Mara L. Babin
Secretary & General Counsel
Partner,
Squire, Sanders & Dempsey
AUDITORS
Arthur Andersen LLP
1717 East Ninth Street
Cleveland, Ohio 44114
LEGAL COUNSEL
Squire, Sanders &
Dempsey
Society Center
Cleveland, Ohio 44114
TRANSFER, AGENT &
REGISTRAR
National City Bank
Cleveland, Ohio 44114
DIVIDEND REINVESTMENT
SIFCO Industries maintains a dividend reinvestment program that enables
shareholders to purchase additional shares of SIFCO stock without fees or
service charges. To participate in this program, or for answers to any questions
on your dividend investment account contact the SIFCO corporate office.
FORM 10-K REQUESTS
A copy of the Company's current form 10-K annual report as filed with the
Securities and Exchange Commission is available without charge to shareholders
upon written request to the corporate secretary.
ANNUAL MEETING
The annual meeting of shareholders of SIFCO Industries, Inc. will be held at the
National City Bank, East Ninth Street and Euclid Avenue, Cleveland, Ohio, at
10:30 AM on January 30, 1996.
LISTING
SIFCO's common stock is listed on the American Stock Exchange, symbol SIF.
16
<PAGE> 1
Exhibit 23
----------
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the incorporation of our
reports dated October 31, 1995, included and incorporated by reference in this
Form 10-K, into the Company's previously filed Registration Statements, File
Nos. 2-82001 and 33-32826.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Cleveland, Ohio,
December 20, 1995.
<PAGE> 1
EXHIBIT 24
SIFCO INDUSTRIES, INC.
ANNUAL REPORT ON FORM 10-K
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director or both an officer and director, of
SIFCO Industries, Inc. (the "Company"), an Ohio corporation, which anticipates
filing with the Securities and Exchange Commission, Washington, D.C., under the
Securities Exchange Act of 1934, as amended, an Annual Report on Form 10-K
(which together with any and all amendments thereto is hereinafter called the
"Form 10-K"), does hereby constitute and appoint Charles H. Smith, Jr., Jeffrey
P. Gotschall, Richard A. Demetter, and Mara L. Babin, and any one of them, with
full power of substitution and resubstitution, as attorneys or attorney to
execute and file on behalf of the undersigned in his capacity as an officer
and/or director of the Company, the Form 10-K, with full power and authority to
do and perform any and all acts and things whatsoever required or necessary to
be done in the premises, as fully as to all intents and purposes as he could do
if personally present, hereby ratifying and approving the acts of said attorneys
and any of them and any such substitution.
Executed at Cleveland, Ohio, this 19th day of December, 1995.
/s/ HUDSON D. SMITH
<PAGE> 2
SIFCO INDUSTRIES, INC.
ANNUAL REPORT ON FORM 10-K
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director or both an officer and director, of
SIFCO Industries, Inc. (the "Company"), an Ohio corporation, which anticipates
filing with the Securities and Exchange Commission, Washington, D.C., under the
Securities Exchange Act of 1934, as amended, an Annual Report on Form 10-K
(which together with any and all amendments thereto is hereinafter called the
"Form 10-K"), does hereby constitute and appoint Charles H. Smith, Jr., Jeffrey
P. Gotschall, Richard A. Demetter, and Mara L. Babin, and any one of them, with
full power of substitution and resubstitution, as attorneys or attorney to
execute and file on behalf of the undersigned in his capacity as an officer
and/or director of the Company, the Form 10-K, with full power and authority to
do and perform any and all acts and things whatsoever required or necessary to
be done in the premises, as fully as to all intents and purposes as he could do
if personally present, hereby ratifying and approving the acts of said attorneys
and any of them and any such substitution.
Executed at Cleveland, Ohio, this 18th day of December, 1995.
/s/ JEFFREY P. GOTSCHALL
<PAGE> 3
SIFCO INDUSTRIES, INC.
ANNUAL REPORT ON FORM 10-K
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director or both an officer and director, of
SIFCO Industries, Inc. (the "Company"), an Ohio corporation, which anticipates
filing with the Securities and Exchange Commission, Washington, D.C., under the
Securities Exchange Act of 1934, as amended, an Annual Report on Form 10-K
(which together with any and all amendments thereto is hereinafter called the
"Form 10-K"), does hereby constitute and appoint Charles H. Smith, Jr., Jeffrey
P. Gotschall, Richard A. Demetter, and Mara L. Babin, and any one of them, with
full power of substitution and resubstitution, as attorneys or attorney to
execute and file on behalf of the undersigned in his capacity as an officer
and/or director of the Company, the Form 10-K, with full power and authority to
do and perform any and all acts and things whatsoever required or necessary to
be done in the premises, as fully as to all intents and purposes as he could do
if personally present, hereby ratifying and approving the acts of said attorneys
and any of them and any such substitution.
Executed at Cleveland, Ohio, this 18th day of December, 1995.
/s/ RICHARD S. GRAY
<PAGE> 4
SIFCO INDUSTRIES, INC.
ANNUAL REPORT ON FORM 10-K
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director or both an officer and director, of
SIFCO Industries, Inc. (the "Company"), an Ohio corporation, which anticipates
filing with the Securities and Exchange Commission, Washington, D.C., under the
Securities Exchange Act of 1934, as amended, an Annual Report on Form 10-K
(which together with any and all amendments thereto is hereinafter called the
"Form 10-K"), does hereby constitute and appoint Charles H. Smith, Jr., Jeffrey
P. Gotschall, Richard A. Demetter, and Mara L. Babin, and any one of them, with
full power of substitution and resubstitution, as attorneys or attorney to
execute and file on behalf of the undersigned in his capacity as an officer
and/or director of the Company, the Form 10-K, with full power and authority to
do and perform any and all acts and things whatsoever required or necessary to
be done in the premises, as fully as to all intents and purposes as he could do
if personally present, hereby ratifying and approving the acts of said attorneys
and any of them and any such substitution.
Executed at Moreland Hills, Ohio, this 18 day of December, 1995.
/s/ THOMAS J. VILD
<PAGE> 5
SIFCO INDUSTRIES, INC.
ANNUAL REPORT ON FORM 10-K
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director or both an officer and director, of
SIFCO Industries, Inc. (the "Company"), an Ohio corporation, which anticipates
filing with the Securities and Exchange Commission, Washington, D.C., under the
Securities Exchange Act of 1934, as amended, an Annual Report on Form 10-K
(which together with any and all amendments thereto is hereinafter called the
"Form 10-K"), does hereby constitute and appoint Charles H. Smith, Jr., Jeffrey
P. Gotschall, Richard A. Demetter, and Mara L. Babin, and any one of them, with
full power of substitution and resubstitution, as attorneys or attorney to
execute and file on behalf of the undersigned in his capacity as an officer
and/or director of the Company, the Form 10-K, with full power and authority to
do and perform any and all acts and things whatsoever required or necessary to
be done in the premises, as fully as to all intents and purposes as he could do
if personally present, hereby ratifying and approving the acts of said attorneys
and any of them and any such substitution.
Executed at Boston, Massachusetts, this 18 day of December, 1995.
/s/ DAVID V. RAGONE
<PAGE> 6
SIFCO INDUSTRIES, INC.
ANNUAL REPORT ON FORM 10-K
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director or both an officer and director, of
SIFCO Industries, Inc. (the "Company"), an Ohio corporation, which anticipates
filing with the Securities and Exchange Commission, Washington, D.C., under the
Securities Exchange Act of 1934, as amended, an Annual Report on Form 10-K
(which together with any and all amendments thereto is hereinafter called the
"Form 10-K"), does hereby constitute and appoint Charles H. Smith, Jr., Jeffrey
P. Gotschall, Richard A. Demetter, and Mara L. Babin, and any one of them, with
full power of substitution and resubstitution, as attorneys or attorney to
execute and file on behalf of the undersigned in his capacity as an officer
and/or director of the Company, the Form 10-K, with full power and authority to
do and perform any and all acts and things whatsoever required or necessary to
be done in the premises, as fully as to all intents and purposes as he could do
if personally present, hereby ratifying and approving the acts of said attorneys
and any of them and any such substitution.
Executed at ______, _____________, this 18th day of December, 1995.
/s/ WILLIAM R. HIGGINS
<PAGE> 7
SIFCO INDUSTRIES, INC.
ANNUAL REPORT ON FORM 10-K
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director or both an officer and director, of
SIFCO Industries, Inc. (the "Company"), an Ohio corporation, which anticipates
filing with the Securities and Exchange Commission, Washington, D.C., under the
Securities Exchange Act of 1934, as amended, an Annual Report on Form 10-K
(which together with any and all amendments thereto is hereinafter called the
"Form 10-K"), does hereby constitute and appoint Charles H. Smith, Jr., Jeffrey
P. Gotschall, Richard A. Demetter, and Mara L. Babin, and any one of them, with
full power of substitution and resubstitution, as attorneys or attorney to
execute and file on behalf of the undersigned in his capacity as an officer
and/or director of the Company, the Form 10-K, with full power and authority to
do and perform any and all acts and things whatsoever required or necessary to
be done in the premises, as fully as to all intents and purposes as he could do
if personally present, hereby ratifying and approving the acts of said attorneys
and any of them and any such substitution.
Executed at Cleveland, Ohio, this 18th day of December, 1995.
/s/ CHARLES H. SMITH, JR.
<PAGE> 8
SIFCO INDUSTRIES, INC.
ANNUAL REPORT ON FORM 10-K
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director or both an officer and director, of
SIFCO Industries, Inc. (the "Company"), an Ohio corporation, which anticipates
filing with the Securities and Exchange Commission, Washington, D.C., under the
Securities Exchange Act of 1934, as amended, an Annual Report on Form 10-K
(which together with any and all amendments thereto is hereinafter called the
"Form 10-K"), does hereby constitute and appoint Charles H. Smith, Jr., Jeffrey
P. Gotschall, Richard A. Demetter, and Mara L. Babin, and any one of them, with
full power of substitution and resubstitution, as attorneys or attorney to
execute and file on behalf of the undersigned in his capacity as an officer
and/or director of the Company, the Form 10-K, with full power and authority to
do and perform any and all acts and things whatsoever required or necessary to
be done in the premises, as fully as to all intents and purposes as he could do
if personally present, hereby ratifying and approving the acts of said attorneys
and any of them and any such substitution.
Executed at San Antonio,Texas, this 18th day of December, 1995.
/s/ GEORGE D. GOTSCHALL
<PAGE> 9
SIFCO INDUSTRIES, INC.
ANNUAL REPORT ON FORM 10-K
POWER OF ATTORNEY
-----------------
The undersigned, an officer or director or both an officer and director, of
SIFCO Industries, Inc. (the "Company"), an Ohio corporation, which anticipates
filing with the Securities and Exchange Commission, Washington, D.C., under the
Securities Exchange Act of 1934, as amended, an Annual Report on Form 10-K
(which together with any and all amendments thereto is hereinafter called the
"Form 10-K"), does hereby constitute and appoint Charles H. Smith, Jr., Jeffrey
P. Gotschall, Richard A. Demetter, and Mara L. Babin, and any one of them, with
full power of substitution and resubstitution, as attorneys or attorney to
execute and file on behalf of the undersigned in his capacity as an officer
and/or director of the Company, the Form 10-K, with full power and authority to
do and perform any and all acts and things whatsoever required or necessary to
be done in the premises, as fully as to all intents and purposes as he could do
if personally present, hereby ratifying and approving the acts of said attorneys
and any of them and any such substitution.
Executed at Houston, Texas, this 20th day of December, 1995.
/s/ JOHN DOUGLAS WHELAN
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<CIK> 0000090168
<NAME> SIFCO INDUSTRIES, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> SEP-30-1995
<CASH> 1,469
<SECURITIES> 0
<RECEIVABLES> 15,121
<ALLOWANCES> 0
<INVENTORY> 13,285
<CURRENT-ASSETS> 30,586
<PP&E> 23,460
<DEPRECIATION> 0
<TOTAL-ASSETS> 60,682
<CURRENT-LIABILITIES> 17,949
<BONDS> 6,664
<COMMON> 5,092
0
0
<OTHER-SE> 25,713
<TOTAL-LIABILITY-AND-EQUITY> 60,682
<SALES> 68,134
<TOTAL-REVENUES> 68,134
<CGS> 54,898
<TOTAL-COSTS> 66,004
<OTHER-EXPENSES> (1,874)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 937
<INCOME-PRETAX> 3,067
<INCOME-TAX> 255
<INCOME-CONTINUING> 2,812
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,812
<EPS-PRIMARY> .55
<EPS-DILUTED> .55
</TABLE>
