-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JiCUy9ev4XtZ19fCIVB7Sn5uTdTxQzYWdpckvYajXHF3jA9+DvOzA5nvkazf6f3p 69DYdyeBQggx4XXFUlprew== 0000950152-95-003050.txt : 19951226 0000950152-95-003050.hdr.sgml : 19951226 ACCESSION NUMBER: 0000950152-95-003050 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951222 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SIFCO INDUSTRIES INC CENTRAL INDEX KEY: 0000090168 STANDARD INDUSTRIAL CLASSIFICATION: AIRCRAFT ENGINES & ENGINE PARTS [3724] IRS NUMBER: 340553950 STATE OF INCORPORATION: OH FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05978 FILM NUMBER: 95604090 BUSINESS ADDRESS: STREET 1: 970 E 64TH ST CITY: CLEVELAND STATE: OH ZIP: 44103 BUSINESS PHONE: 2168818600 MAIL ADDRESS: STREET 1: 970 EAST 64TH STREET CITY: CLEVELAND STATE: OH ZIP: 44103 FORMER COMPANY: FORMER CONFORMED NAME: STEEL IMPROVEMENT & FORGE CO DATE OF NAME CHANGE: 19690520 10-K 1 SIFCO 10-K 1 - -------------------------------------------------------------------------------- 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 ------- ------ SIFCO Industries, Inc., and Subsidiaries - -------------------------------------------------------------------------------- (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Ohio 34-0553950 - ------------------------------------- ------------------------------------- (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 970 East 64th Street, Cleveland Ohio 44103 - ------------------------------------- ------------------------------------- (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 - -------------------------------------------------------------------------------- Common Shares, $1 Par Value American Stock Exchange - ------------------------------------- ------------------------------------- Securities registered pursuant to Section 12(g) of the Act: - -------------------------------------------------------------------------------- (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.) - -------------------------------------------------------------------------------- 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.) - -------------------------------------------------------------------------------- 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) 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 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 4 The Company's backlog of orders was as follows:
9/30/95 9/30/94 ------- ------- ($000 omitted) Specialty products and services 9,000 $ 8,000 Forgings 19,600 19,000 ------ ------- $ 28,600 $27,000 ======== =======
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 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 6 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 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. 6 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 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 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 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 12 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 13 SCHEDULE II SIFCO INDUSTRIES, INC. AND SUBSIDIARIES ALLOWANCES FOR DOUBTFUL ACCOUNTS FOR THE YEARS ENDED SEPTEMBER 30 1995, 1994, AND 1993 ($000 omitted)
1995 1994 1993 ---- ---- ---- 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 ====== ====== ======
12 14 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 EX-10.B 2 EXHIBIT 10 (B) 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.
DIVISION PBT NECESSARY TO ACHIEVE A RONA OF: -------------------------------------------- Return on Net Assets 10% 5% Net Assets ---------- 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
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 --------- ---------- ----- ------- ---- ---------- ---- ----- --------- ----- 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 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.
EX-13 3 EXHIBIT 13 1 EXHIBIT 13 [LOGO] SIFCO INDUSTRIES, INC. ANNUAL REPORT 1995 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.
FINANCIAL HIGHLIGHTS OF 1995 Dollars in thousands, except per share amounts - -------------------------------------------------------------------------------------------------------------------------- Years Ended September 30 1995 % Change 1994 % Change 1993 - -------------------------------------------------------------------------------------------------------------------------- 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% * Includes reversal of restructuring charge to income of $1,512 * * Includes $6,500 of restructuring expense
3 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
4 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
5 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
6 MANAGEMENT'S DISCUSSION AND ANALYSIS OF BUSINESS 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
7 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
8 SELECTED FINANCIAL DATA SIFCO INDUSTRIES, INC., AND SUBSIDIARIES For the years ended September 30 (000 omitted except for per share data)
1995 1994 1993 1992 1991 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 *Includes restructuring expense of $6,500. * *Includes reversal of restructuring charge to income of $1,512 =======================================================================================================
STOCK PRICES BY QUARTERS (AMEX) 1995 1994 - --------------------------------------------------------- HIGH LOW High Low - --------------------------------------------------------- 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 ---- ---- ---- ----
7 9 CONSOLIDATED STATEMENTS OF INCOME SIFCO INDUSTRIES, INC., AND SUBSIDIARIES For the years ended September 30 ($000 omitted except for per share data)
1995 1994 1993 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) ======= ======= =======
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)
Earnings Retained Common Capital in for Use Shares Excess of in the $1 Par Value Par Value Business - ----------------------------------------------------------------------------------------------------------------- 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
The accompanying notes are an integral part of these consolidated statements. 10 CONSOLIDATED BALANCE SHEETS SIFCO INDUSTRIES, INC., AND SUBSIDIARIES September 30 ($000 omitted except for per share data)
1995 1994 ------- ------- 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 ======= =======
The accompanying notes are an integral part of these consolidated statements. 9 11 CONSOLIDATED STATEMENTS OF CASH FLOWS SIFCO INDUSTRIES, INC., AND SUBSIDIARIES For the years ended Septernber 30 ($000 omitted except for per share data)
1995 1994 1993 ------ ------ ------ 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 ====== ====== ======
The accompanying notes are an integral part of these consolidated statements. 10 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:
(000,s omitted) Cash 1995 1994 - ---- ----- ----- 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 ===== =====
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 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 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 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 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 17 DIRECTORS - ------------------------------------------------------------------------------- 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
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 EX-23 4 EXHIBIT 23 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. EX-24 5 EXHIBIT 24 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 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 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 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 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 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 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. 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 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 EX-27 6 EXHIBIT 27
5 0000090168 SIFCO INDUSTRIES, INC. 1,000 YEAR SEP-30-1995 OCT-01-1994 SEP-30-1995 1,469 0 15,121 0 13,285 30,586 23,460 0 60,682 17,949 6,664 5,092 0 0 25,713 60,682 68,134 68,134 54,898 66,004 (1,874) 0 937 3,067 255 2,812 0 0 0 2,812 .55 .55
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