Document and Entity Information
Document and Entity Information | 6 Months Ended |
Mar. 31, 2020shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | SIFCO INDUSTRIES INC |
Entity Central Index Key | 0000090168 |
Current Fiscal Year End Date | --09-30 |
Entity Filer Category | Non-accelerated Filer |
Document Type | 10-Q |
Document Period End Date | Mar. 31, 2020 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q2 |
Amendment Flag | false |
Entity Common Stock, Shares Outstanding | 5,916,123 |
Emerging Growth Company | false |
Entity Small Business | true |
Entity Shell Company | false |
Entity Current Reporting Status | Yes |
Consolidated Condensed Statemen
Consolidated Condensed Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||||
Net sales | $ 30,537 | $ 27,392 | $ 56,744 | $ 56,458 |
Cost of goods sold | 24,260 | 25,304 | 47,143 | 51,633 |
Gross profit | 6,277 | 2,088 | 9,601 | 4,825 |
Selling, general and administrative expenses | 3,321 | 3,784 | 7,529 | 7,894 |
Amortization of intangible assets | 408 | 413 | 817 | 828 |
Loss (gain) on disposal or impairment of operating assets | 41 | 0 | 41 | (282) |
Gain on insurance proceeds received | (1,000) | (1,164) | (1,000) | (1,164) |
Operating income (loss) | 3,507 | (945) | 2,214 | (2,451) |
Interest income | 0 | (1) | 0 | (2) |
Interest expense | 262 | 315 | 513 | 607 |
Foreign currency exchange gain (loss), net | (1) | (1) | 0 | (1) |
Other loss (income), net | 25 | (34) | (84) | (35) |
Income (loss) before income tax benefit | 3,221 | (1,224) | 1,785 | (3,020) |
Income tax (benefit) expense | (39) | 34 | (134) | (480) |
Net income (loss) | $ 3,260 | $ (1,258) | $ 1,919 | $ (2,540) |
Net income (loss) per share | ||||
Basic (in dollars per share) | $ 0.57 | $ (0.23) | $ 0.34 | $ (0.46) |
Diluted (in dollars per share) | $ 0.57 | $ (0.23) | $ 0.33 | $ (0.46) |
Weighted-average number of common shares (basic) (in shares) | 5,679 | 5,561 | 5,645 | 5,548 |
Weighted-average number of common shares (diluted) (in shares) | 5,770 | 5,561 | 5,748 | 5,548 |
Consolidated Condensed Statem_2
Consolidated Condensed Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 3,260 | $ (1,258) | $ 1,919 | $ (2,540) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | (130) | (159) | 63 | (587) |
Retirement plan liability adjustment | 249 | 107 | 437 | 215 |
Comprehensive income (loss) | $ 3,379 | $ (1,310) | $ 2,419 | $ (2,912) |
Consolidated Condensed Balance
Consolidated Condensed Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Sep. 30, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 345 | $ 341 |
Receivables, net of allowance for doubtful accounts of $371 and $521, respectively | 21,691 | 23,159 |
Other receivables | 0 | 3,500 |
Contract asset | 12,520 | 10,349 |
Inventories, net | 13,402 | 10,509 |
Refundable income taxes | 131 | 141 |
Prepaid expenses and other current assets | 1,846 | 1,459 |
Total current assets | 49,935 | 49,458 |
Property, plant and equipment, net | 41,487 | 39,610 |
Operating lease right-of-use assets, net | 17,699 | |
Intangible assets, net | 2,517 | 3,320 |
Goodwill | 3,493 | 3,493 |
Other assets | 165 | 218 |
Total assets | 115,296 | 96,099 |
Current liabilities: | ||
Current maturities of long-term debt | 4,860 | 5,786 |
Revolver | 17,191 | 15,542 |
Short-term operating lease liabilities | 1,195 | 0 |
Accounts payable | 16,681 | 19,799 |
Accrued liabilities | 6,814 | 5,557 |
Total current liabilities | 46,741 | 46,684 |
Long-term debt, net of current maturities | 1,903 | 2,052 |
Long-term operating lease liabilities, net of short-term | 16,576 | 0 |
Deferred income taxes | 1,601 | 1,718 |
Pension liability | 9,008 | 9,528 |
Other long-term liabilities | 777 | 63 |
Shareholders’ equity: | ||
Serial preferred shares, no par value, authorized 1,000 shares | 0 | 0 |
Common shares, par value $1 per share, authorized 10,000 shares; issued and outstanding shares 5,916 at March 31, 2020 and 5,777 at September 30, 2019 | 5,916 | 5,777 |
Additional paid-in capital | 10,516 | 10,438 |
Retained earnings | 35,067 | 33,148 |
Accumulated other comprehensive loss | (12,809) | (13,309) |
Total shareholders’ equity | 38,690 | 36,054 |
Total liabilities and shareholders’ equity | $ 115,296 | $ 96,099 |
Consolidated Condensed Balanc_2
Consolidated Condensed Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Sep. 30, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 371 | $ 521 |
Serial preferred shares, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Common shares, par value (in dollars per share) | $ 1 | $ 1 |
Common shares, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Common shares, shares issued (in shares) | 5,916,000 | 5,777,000 |
Common shares, shares outstanding (in shares) | 5,916,000 | 5,777,000 |
Consolidated Condensed Statem_3
Consolidated Condensed Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 1,919 | $ (2,540) |
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: | ||
Depreciation and amortization | 3,731 | 3,840 |
Amortization and write-off of debt issuance cost | 52 | 45 |
Loss (gain) on disposal of operating assets or impairment of operating assets | 41 | (282) |
Gain on insurance proceeds received | (1,000) | (1,164) |
LIFO effect | (11) | (57) |
Share transactions under company stock plan | 216 | 426 |
Other long-term liabilities | (90) | (78) |
Deferred income taxes | (135) | (143) |
Changes in operating assets and liabilities: | ||
Receivables | 1,533 | 5,247 |
Contract assets | (2,171) | 1,380 |
Inventories | (2,858) | 1,291 |
Refundable taxes | 10 | (299) |
Prepaid expenses and other current assets | (434) | 60 |
Other assets | 42 | (174) |
Accounts payable | (3,296) | (3,007) |
Other accrued liabilities | 2,051 | 425 |
Accrued income and other taxes | (14) | 25 |
Net cash (used for) provided by operating activities | (414) | 4,995 |
Cash flows from investing activities: | ||
Insurance proceeds received | 4,500 | 2,270 |
Proceeds from disposal of operating assets | 0 | 317 |
Capital expenditures | (4,596) | (3,752) |
Net cash used for investing activities | (96) | (1,165) |
Cash flows from financing activities: | ||
Proceeds from long-term debt | 137 | 227 |
Payments on long-term debt | (568) | (701) |
Proceeds from revolving credit agreement | 59,372 | 25,469 |
Repayments of revolving credit agreement | (57,723) | (28,092) |
Payment of debt issue costs | 0 | (105) |
Short-term debt borrowings | 1,542 | 3,335 |
Short-term debt repayments | (2,257) | (3,247) |
Share retirement | 0 | (62) |
Net cash provided by (used for) financing activities | 503 | (3,176) |
Increase (decrease) in cash and cash equivalents | (7) | 654 |
Cash and cash equivalents at the beginning of the period | 341 | 1,252 |
Effect of exchange rate changes on cash and cash equivalents | 11 | (3) |
Cash and cash equivalents at the end of the period | 345 | 1,903 |
Supplemental disclosure of cash flow information of operations: | ||
Cash paid for interest | (419) | (551) |
Cash paid for income taxes, net | (34) | (57) |
Non-cash investing activities: | ||
Additions to property, plant & equipment - incurred but not yet paid | $ 141 | $ 498 |
Consolidated Condensed Statem_4
Consolidated Condensed Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Shares | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Sep. 30, 2018 | 5,690 | ||||
Beginning balance at Sep. 30, 2018 | $ 44,189 | $ 5,690 | $ 10,031 | $ 37,097 | $ (8,629) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Comprehensive income (loss) | (2,912) | (2,540) | (372) | ||
Share retirement (in shares) | (21) | ||||
Share retirement | (62) | $ (21) | (41) | ||
Performance and restricted share expense | 446 | 446 | |||
Share transactions under equity based plans (in shares) | 104 | ||||
Share transactions under equity based plans | (20) | $ 104 | (124) | ||
Ending balance (in shares) at Mar. 31, 2019 | 5,773 | ||||
Ending balance at Mar. 31, 2019 | 45,239 | $ 5,773 | 10,353 | 38,114 | (9,001) |
Beginning balance (in shares) at Dec. 31, 2018 | 5,736 | ||||
Beginning balance at Dec. 31, 2018 | 46,421 | $ 5,736 | 10,221 | 39,413 | (8,949) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Comprehensive income (loss) | (1,310) | (1,258) | (52) | ||
Share retirement (in shares) | (21) | ||||
Share retirement | (62) | $ (21) | (41) | ||
Performance and restricted share expense | 208 | 208 | |||
Share transactions under equity based plans (in shares) | 58 | ||||
Share transactions under equity based plans | (18) | $ 58 | (76) | ||
Ending balance (in shares) at Mar. 31, 2019 | 5,773 | ||||
Ending balance at Mar. 31, 2019 | 45,239 | $ 5,773 | 10,353 | 38,114 | (9,001) |
Beginning balance (in shares) at Sep. 30, 2019 | 5,777 | ||||
Beginning balance at Sep. 30, 2019 | 36,054 | $ 5,777 | 10,438 | 33,148 | (13,309) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Comprehensive income (loss) | 2,419 | 1,919 | 500 | ||
Performance and restricted share expense | 225 | 225 | |||
Share transactions under equity based plans (in shares) | 139 | ||||
Share transactions under equity based plans | (8) | $ 139 | (147) | ||
Ending balance (in shares) at Mar. 31, 2020 | 5,916 | ||||
Ending balance at Mar. 31, 2020 | 38,690 | $ 5,916 | 10,516 | 35,067 | (12,809) |
Beginning balance (in shares) at Dec. 31, 2019 | 5,863 | ||||
Beginning balance at Dec. 31, 2019 | 35,245 | $ 5,863 | 10,503 | 31,807 | (12,928) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Comprehensive income (loss) | 3,379 | 3,260 | 119 | ||
Performance and restricted share expense | 70 | 70 | |||
Share transactions under equity based plans (in shares) | 53 | ||||
Share transactions under equity based plans | (4) | $ 53 | (57) | ||
Ending balance (in shares) at Mar. 31, 2020 | 5,916 | ||||
Ending balance at Mar. 31, 2020 | $ 38,690 | $ 5,916 | $ 10,516 | $ 35,067 | $ (12,809) |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies A. Principles of Consolidation The accompanying unaudited consolidated condensed financial statements include the accounts of SIFCO Industries, Inc. and its wholly-owned subsidiaries (the "Company"). All significant intercompany accounts and transactions have been eliminated in consolidation. The U.S. dollar is the functional currency for all of the Company’s U.S. operations and its non-operating subsidiaries. For these operations, all gains and losses from completed currency transactions are included in income. The functional currency for the Company's other non-U.S. subsidiaries is the Euro. Assets and liabilities are translated into U.S. dollars at the rates of exchange at the end of the period, and revenues and expenses are translated using average rates of exchange for the period. Foreign currency translation adjustments are reported as a component of accumulated other comprehensive loss in the unaudited consolidated condensed financial statements. These unaudited consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s fiscal 2019 Annual Report on Form 10-K. The year-end consolidated balance sheet data was derived from the audited financial statements and disclosures required by accounting principles generally accepted in the United States ("U.S."). The results of operations for any interim period are not necessarily indicative of the results to be expected for other interim periods or the full year. COVID-19 In March 2020, the novel strain of coronavirus ("COVID-19") was recognized as a pandemic by the World Health Organization, and the outbreak subsequently became increasingly widespread in the United States and other countries in which we operate. The Company has taken proactive steps to ensure the safety of its employees and customers as well as to preserve the Company’s financial flexibility. The Company will continue to monitor the development of and responses to the COVID-19 pandemic and the impact of COVID-19 on its business and respond accordingly. The full impact of the COVID-19 outbreak on the Company continues to evolve subsequent to the quarter ended March 31, 2020 and as of the date these unaudited consolidated condensed financial statements are issued. As such, the full magnitude that the pandemic will have on the Company’s financial condition, liquidity and future results of operations is uncertain. As the pandemic continues to impact operations of businesses across the world, our ability to meet customer demands for products may be impaired or, similarly, our customers have experienced and may continue to experience adverse business consequences. Reduced demand for products or impaired ability to meet customer demand (including as a result of disruptions at our facilities, to transportation of products, and/or vendors) could have a material adverse effect on our business, operations and financial performance. Given the evolution of the COVID-19 pandemic and the varied global responses to curb its spread, the Company is not presently able to estimate the effects of the COVID-19 outbreak on its future results of operations, financial condition or liquidity for fiscal year 2020. B. Accounting Policies A summary of the Company’s significant accounting policies is included in Note 1 to the audited consolidated financial statements of the Company's fiscal 2019 Annual Report on Form 10-K. Since the Annual Report, the Company has implemented Accounting Standards Update ("ASU") 2016-02, "Leases (Topic 842)" and ASU 2018-11, "Leases (Topic 842) Targeted Improvements," (collectively with ASU 2016-02, "Topic 842"), which was adopted by the Company on October 1, 2019 using the cumulative-effect adjustment transition method. Significant changes to the Company's accounting policies as a result of adopting Topic 842 are referenced below within section E. Recently Adopted Accounting Standards and in Note 4, Leases. C. Net Income/(Loss) per Share The Company’s net income and loss per basic share has been computed based on the weighted-average number of common shares outstanding. Net income in the current period, per diluted share reflects the effect of the Company's outstanding restricted shares and performance shares under the treasury method. In the prior period, due to the net loss for each reporting period, zero restricted shares are included in the calculation of diluted earnings per share because the effect would be anti-dilutive. The dilutive effect is as follows: Three Months Ended Six Months Ended 2020 2019 2020 2019 Net Income (loss) $ 3,260 $ (1,258 ) $ 1,919 $ (2,540 ) Weighted-average common shares outstanding (basic and diluted) 5,679 5,561 5,645 5,548 Effect of dilutive securities: Restricted shares 89 — 102 — Performance shares 2 — 1 — Weighted-average common shares outstanding (basic and diluted) 5,770 5,561 5,748 5,548 Net income (loss) per share – basic: $ 0.57 $ (0.23 ) $ 0.34 $ (0.46 ) Net income (loss) per share – diluted: $ 0.57 $ (0.23 ) $ 0.33 $ (0.46 ) Anti-dilutive weighted-average common shares excluded from calculation of diluted earnings per share 215 214 147 200 D. Impact of Recently Issued Accounting Standards In June 2016, the FASB issued ASU 2016-13, " Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments " and subsequent updates. ASU 2016-13 changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The new guidance will replace the current incurred loss approach with an expected loss model. The new expected credit loss impairment model will apply to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt instruments, net investments in leases, loan commitments and standby letters of credit. Upon initial recognition of the exposure, the expected credit loss model requires entities to estimate the credit losses expected over the life of an exposure (or pool of exposures). The estimate of expected credit losses should consider historical information, current information and reasonable and supportable forecasts, including estimates of prepayments. Financial instruments with similar risk characteristics should be grouped together when estimating expected credit losses. ASU 2016-13 does not prescribe a specific method to make the estimate, so its application will require significant judgment. ASU 2016-13 is effective for public companies in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. However, in November 2019, the FASB issued ASU 2019-10, "Financial Instruments - Credit Loss (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842)," which defers the effective date for public filers that are considered smaller reporting companies ("SRC"), as defined by the Securities and Exchange Commission, to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Because SIFCO is considered a SRC, the Company does not need to implement ASU 2016-13 until October 1, 2023. The Company will continue to evaluate the effect of adopting ASU 2016-13 will have on the Company's results within the consolidated condensed statements of operations and financial condition. In December 2019, ASU 2019-12, " Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes" was issued to (i) reduce the complexity of the standard by removing certain exceptions to the general principles in Topic 740 and (ii) improve consistency and simplify other areas of Topic 740 by clarifying and amending existing guidance. This ASU is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2020. The Company continues to evaluate the effect adopting this ASU will have on the Company's results within the consolidated condensed statements of operations and financial condition. E. Recently Adopted Accounting Standards The Company adopted Topic 842 using the cumulative effect method as of October 1, 2019 for the adoption of Topic 842. Under the transition method selected by the Company, leases that are not short-term in nature existing at, or entered on October 1, 2019 were required to be recognized and measured. Prior period amounts were not adjusted and continue to be reflected with the Company's historical accounting. The adoption of Topic 842 resulted in the Company recording right-of-use ("ROU") assets and operating lease liabilities of approximately $18,059 to the consolidated condensed balance sheet as of October 1, 2019, with no related impact on the Company's consolidated condensed statement of comprehensive income (loss) or consolidated condensed statement of cash flows. |
Inventories
Inventories | 6 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of: March 31, September 30, Raw materials and supplies $ 4,873 $ 4,512 Work-in-process 4,974 2,721 Finished goods 3,555 3,276 Total inventories $ 13,402 $ 10,509 For a portion of the Company's inventory, cost is determined using the last-in, first-out ("LIFO") method. Approximately 35% and 27% of the Company’s inventories at March 31, 2020 and September 30, 2019, respectively use the LIFO method. An actual valuation of inventory under the LIFO method is made at the end of each fiscal year based on the inventory levels and costs existing at that time. Accordingly, interim LIFO calculations must be based on management’s estimates of expected year-end inventory levels and costs. Because the actual results may vary from these estimates, calculations are subject to many factors beyond management’s control, annual results may differ from interim results as they are subject to adjustments based on the differences between the estimates and the actual results. The first-in, first-out (“FIFO”) method is used for the remainder of the inventories, which are stated at the lower of cost or net realizable value. If the FIFO method had been used for the inventories for which cost is determined using the LIFO method, inventories would have been $8,285 and $8,296 higher than reported at March 31, 2020 and September 30, 2019 , respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss are as follows: March 31, September 30, Foreign currency translation adjustment $ (5,604 ) $ (5,667 ) Retirement plan liability adjustment, net of tax (7,205 ) (7,642 ) Total accumulated other comprehensive loss $ (12,809 ) $ (13,309 ) |
Leases
Leases | 6 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | Leases The adoption of Topic 842 requires lessees to recognize a ROU asset and a lease liability on the consolidated condensed balance sheet, with the exception of short-term leases. The Company primarily leases its manufacturing buildings, specifically at its Orange location, office equipment and forklifts. The Company determines if a contract contains a lease based on whether the contract conveys the right to control the use of identified assets for a period in exchange for consideration. Upon identification and commencement of a lease, the Company establishes a ROU asset and a lease liability. Operating leases are included in ROU assets, short-term operating lease liabilities, and long-term operating lease liabilities on the consolidated condensed balance sheets. Finance leases are included in property, plant, and equipment, current maturities of long-term debt and long-term debt on the consolidated condensed balance sheets. The Company has remaining lease terms ranging from one to 17 years , some of which include options to renew the lease. The total lease term is determined by considering the initial lease term per the lease agreement, which is adjusted to include any renewal options that the Company is reasonably certain to exercise as well as any period that the Company has control before the stated initial term of the agreement. If the Company determines there exists a reasonable certainty of exercising termination or early buyout options, then the lease terms are adjusted to account for these facts. A portion of our real estate leases are generally subject to annual changes in the Consumer Price Index ("CPI"). The changes to the CPI are treated as variable lease payments. The Company elected the package of practical expedients permitted under the transition guidance within the new standard which, among other things, allowed the Company to carry forward the historical lease classification. The Company has made an accounting policy election to not separate non-lease components from lease components when allocating consideration for the buildings and machinery and equipment ROU asset classes. The election was made to reduce the administrative burden that would be imposed on the Company. ROU assets and liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the leases do not provide an implicit rate, the Company uses the incremental borrowing rate based on the information available at commencement date and duration of the lease term in determining the present value of the future payments. Lease expense for operating leases is recognized on a straight-line basis over the lease term, while the expense for finance leases is recognized as depreciation expense and interest expense using the accelerated interest method of recognition. A lease asset and lease liability are not recorded for leases with an initial term of 12 months or less and the lease expense related to these leases is recognized as incurred over the lease term. The components of lease expense were as follows: Three Months Ended Six Months Ended Lease expense Finance lease expense: Amortization of right-of use assets on finance leases $ 14 27 Interest on lease liabilities 1 3 Operating lease expense: 543 1,079 Variable lease cost: 39 79 Total lease expense $ 597 $ 1,188 The following table presents the impact of leasing on the consolidated condensed balance sheet. Classification to the consolidated condensed balance sheets March 31, Assets: Finance lease assets Property, plant and equipment, net $ 116 Operating lease assets Operating lease right-of-use assets, net 17,699 Total lease assets $ 17,815 Current liabilities: Finance lease liabilities Current maturities of long-term debt $ 57 Operating lease liabilities Short-term operating lease liabilities 1,195 Non-current liabilities: Finance lease liabilities Long-term debt, net of current maturities 51 Operating lease liabilities Long-term operating lease liabilities, net of short-term 16,576 Total lease liabilities $ 17,879 Supplemental cash flow and other information related to leases were as follows: March 31, Other Information Cash paid for amounts included in measurement of liabilities: Operating cash flows from operating leases $ 1,086 Operating cash flows from finance leases 3 Financing cash flows from finance leases 28 March 31 Weighted-average remaining lease term (years): Finance leases 2.1 Operating leases 15.3 Weighted-average discount rate: Finance leases 5.1 % Operating leases 5.9 % Future minimum lease under non-cancellable leases at March 31, 2020 were as follows: Finance Leases Operating Leases Year ending September 30, 2020, (excluding the six months ended March 31, 2020) 31 1,086 2021 55 1,930 2022 21 1,681 2023 6 1,622 2024 — 1,638 Thereafter — 19,170 Total lease payments $ 113 $ 27,127 Less: Interest (5 ) (9,356 ) Present value of lease liabilities $ 108 $ 17,771 As previously disclosed in the 2019 Annual Report on Form 10-K and under the previous lease accounting standard, future minimum lease payments initial or remaining non-cancellable lease terms in excess of one year would have been as follows: Finance Leases Operating Leases Year ending September 30, 2020 $ 61 $ 2,172 2021 61 1,865 2022 21 1,583 2023 6 1,502 2024 — 1,498 Thereafter — 16,711 Total lease payments $ 149 $ 25,331 Less: Interest (11 ) Present value of lease liabilities $ 138 |
Leases | Leases The adoption of Topic 842 requires lessees to recognize a ROU asset and a lease liability on the consolidated condensed balance sheet, with the exception of short-term leases. The Company primarily leases its manufacturing buildings, specifically at its Orange location, office equipment and forklifts. The Company determines if a contract contains a lease based on whether the contract conveys the right to control the use of identified assets for a period in exchange for consideration. Upon identification and commencement of a lease, the Company establishes a ROU asset and a lease liability. Operating leases are included in ROU assets, short-term operating lease liabilities, and long-term operating lease liabilities on the consolidated condensed balance sheets. Finance leases are included in property, plant, and equipment, current maturities of long-term debt and long-term debt on the consolidated condensed balance sheets. The Company has remaining lease terms ranging from one to 17 years , some of which include options to renew the lease. The total lease term is determined by considering the initial lease term per the lease agreement, which is adjusted to include any renewal options that the Company is reasonably certain to exercise as well as any period that the Company has control before the stated initial term of the agreement. If the Company determines there exists a reasonable certainty of exercising termination or early buyout options, then the lease terms are adjusted to account for these facts. A portion of our real estate leases are generally subject to annual changes in the Consumer Price Index ("CPI"). The changes to the CPI are treated as variable lease payments. The Company elected the package of practical expedients permitted under the transition guidance within the new standard which, among other things, allowed the Company to carry forward the historical lease classification. The Company has made an accounting policy election to not separate non-lease components from lease components when allocating consideration for the buildings and machinery and equipment ROU asset classes. The election was made to reduce the administrative burden that would be imposed on the Company. ROU assets and liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the leases do not provide an implicit rate, the Company uses the incremental borrowing rate based on the information available at commencement date and duration of the lease term in determining the present value of the future payments. Lease expense for operating leases is recognized on a straight-line basis over the lease term, while the expense for finance leases is recognized as depreciation expense and interest expense using the accelerated interest method of recognition. A lease asset and lease liability are not recorded for leases with an initial term of 12 months or less and the lease expense related to these leases is recognized as incurred over the lease term. The components of lease expense were as follows: Three Months Ended Six Months Ended Lease expense Finance lease expense: Amortization of right-of use assets on finance leases $ 14 27 Interest on lease liabilities 1 3 Operating lease expense: 543 1,079 Variable lease cost: 39 79 Total lease expense $ 597 $ 1,188 The following table presents the impact of leasing on the consolidated condensed balance sheet. Classification to the consolidated condensed balance sheets March 31, Assets: Finance lease assets Property, plant and equipment, net $ 116 Operating lease assets Operating lease right-of-use assets, net 17,699 Total lease assets $ 17,815 Current liabilities: Finance lease liabilities Current maturities of long-term debt $ 57 Operating lease liabilities Short-term operating lease liabilities 1,195 Non-current liabilities: Finance lease liabilities Long-term debt, net of current maturities 51 Operating lease liabilities Long-term operating lease liabilities, net of short-term 16,576 Total lease liabilities $ 17,879 Supplemental cash flow and other information related to leases were as follows: March 31, Other Information Cash paid for amounts included in measurement of liabilities: Operating cash flows from operating leases $ 1,086 Operating cash flows from finance leases 3 Financing cash flows from finance leases 28 March 31 Weighted-average remaining lease term (years): Finance leases 2.1 Operating leases 15.3 Weighted-average discount rate: Finance leases 5.1 % Operating leases 5.9 % Future minimum lease under non-cancellable leases at March 31, 2020 were as follows: Finance Leases Operating Leases Year ending September 30, 2020, (excluding the six months ended March 31, 2020) 31 1,086 2021 55 1,930 2022 21 1,681 2023 6 1,622 2024 — 1,638 Thereafter — 19,170 Total lease payments $ 113 $ 27,127 Less: Interest (5 ) (9,356 ) Present value of lease liabilities $ 108 $ 17,771 As previously disclosed in the 2019 Annual Report on Form 10-K and under the previous lease accounting standard, future minimum lease payments initial or remaining non-cancellable lease terms in excess of one year would have been as follows: Finance Leases Operating Leases Year ending September 30, 2020 $ 61 $ 2,172 2021 61 1,865 2022 21 1,583 2023 6 1,502 2024 — 1,498 Thereafter — 16,711 Total lease payments $ 149 $ 25,331 Less: Interest (11 ) Present value of lease liabilities $ 138 |
Debt
Debt | 6 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt consists of: March 31, September 30, Revolving credit agreement $ 17,191 $ 15,542 Foreign subsidiary borrowings 5,481 6,592 Finance lease obligations 108 138 Other, net of unamortized debt issuance costs ($23) and ($25), respectively 1,174 1,108 Total debt 23,954 23,380 Less – current maturities (22,051 ) (21,328 ) Total long-term debt $ 1,903 $ 2,052 Credit Agreement and Security Agreement of 2018 On August 8, 2018, the Company entered into an asset-based Credit Agreement ("Credit Agreement") and a Security Agreement (“Security Agreement”) with its current lender (the "Lender"). The Credit Agreement matures on August 6, 2021 and is comprised of a senior secured revolving credit facility with a maximum borrowing of $30,000 . The Credit Agreement also has an accordion feature, which allows the Company to increase maximum borrowings by up to $10,000 upon consent of the existing lender or upon additional lenders joining the Credit Agreement. The terms of the Credit Agreement contain both a lock box arrangement and subjective acceleration clause. As a result, the amount outstanding on the revolving credit facility is classified as a short-term liability. The proceeds from the Credit Agreement were used to pay fees and expenses incurred in connection with the Credit Agreement and continue to be used for working capital purposes and general corporate purposes. The Credit Agreement contains affirmative and negative covenants and events of defaults. As set forth in the Credit Agreement, the Company is required to maintain a fixed charge coverage ratio ("FCCR") of 1.1 :1.0 any time the availability is equal to or less than 12.5% of the revolving commitment. In the event of a default, the Company may not be able to access the revolver, which could impact the ability to fund working capital needs, capital expenditures and invest in new business opportunities. See discussion below under the Fourth Amendment to the Credit Agreement and Security Agreement which revises the provision related to availability and FCCR. On November 5, 2018, the Company entered into the First Amendment (the "First Amendment") to the Credit Agreement and Security Agreement with its lender. The First Amendment retroactively amended certain definitions and provisions effective as of the original closing date to clarify the parties' original understanding. On December 17, 2018, the Company entered into an Export Credit Agreement (the “Export Credit Agreement”) with its Lender. Pursuant to the terms of the Export Credit Agreement, the Lender will lend amounts to the Company on foreign receivables that are guaranteed by the Export-Import Bank of the United States of America. The Export Credit Agreement provides for a revolving commitment of $5,000 , therefore increasing the maximum borrowing of the revolver to $35,000 . The borrowings under the Export Credit Agreement will bear interest at (depending on the type of borrowing) the Prime or LIBOR Rate, plus the applicable margin as set forth in the Export Credit Agreement. The maturity date under the Export Credit Agreement is August 6, 2021 (or such earlier date as the revolving commitments under the Export Credit Agreement are reduced to zero or otherwise terminated). The Export Credit Agreement contains customary representations, warranties, covenants and events of default, including, without limitation, the affirmative covenants under the Company’s Credit Agreement dated August 8, 2018, as amended with the Lender. In connection with entering into the Export Credit Agreement, the Company also entered into the Second Amendment (the “Second Amendment”) to its Credit Agreement. The Second Amendment amends certain definitions and provisions to provide for the Company’s entrance into the Export Credit Agreement. On March 29, 2019, the Company entered into a Third Amendment with its Lender. This amendment extended the time frame for when certain post-closing requirements would be satisfied by March 31, 2019 to June 30, 2019. These post-closing requirements were completed by June 30, 2019. On September 20, 2019, the Company entered into a Fourth Amendment with its Lender. As previously stated, the Company is subject to certain customary loan covenants if availability is less than or equal to 12.5% of the revolving commitment for three or more business days in any consecutive 30 day period; however, the Fourth Amendment to the Credit Agreement resulted in the reduction of its availability from 12.5% of the revolving commitment to 10% of the lesser of collateral or total revolving commitment, with a $2,000 floor through June 30, 2020. In determining the availability, the Lender looks at the total collateral. If the total collateral is less than $ 20,000 , then the $2,000 floor will apply; however, if the total collateral is greater than or equal to $20,000 , but less than the $35,000 (revolving commitment); then 10% of the total collateral is used, but if the collateral exceeds $35,000 , then 10% of the total commitment is used as lending will not exceed the $35,000 revolving commitment unless the accordion feature is enacted. This will reset back to previous requirements prior to the Fourth Amendment, commencing July 1, 2020. As of March 31, 2020 and September 30, 2019, the total collateral was $26,000 and $24,000 , respectively and the revolving commitment was $35,000 for both periods. The measurement at 10% was $2,600 and $2,400 , respectively. Total availability at March 31, 2020 and September 30, 2019 was $7,999 and $7,709 , respectively, which exceed both the collateral and total commitment threshold. If availability had fallen short, the Company would be required to meet the FCCR covenant, which must not be less than 1.1 to 1.0. Because the availability was greater than the 10.0% of the revolving commitment as of March 31, 2020 and September 30, 2019, the FCCR calculation was not required. Amounts borrowed under the Credit Agreement are secured by substantially all the assets of the Company and its U.S. subsidiaries and a pledge of 66.67% of the stock of its first-tier non-U.S. subsidiaries. Borrowings will bear interest at the Lender's established domestic rate or LIBOR, plus the applicable margin as set forth in the Credit Agreement. The revolver has a rate based on LIBOR plus 2.00% spread at March 31, 2020 and 1.75% spread at September 30, 2019, which was 3.6% both at March 31, 2020 and September 30, 2019, respectively and the Export Credit Agreement has a rate based on LIBOR plus 1.50% spread at March 31, 2020 and 1.25% spread at September 30, 2019, which was 3.1% and 3.4% at March 30, 2020 and September 30, 2019, respectively. The Company also has a commitment fee of 0.25% under the Credit Agreement to be incurred on the unused balance of the revolver. Foreign subsidiary borrowings Foreign debt consists of: March 31, September 30, Term loan $ 1,848 $ 2,318 Short-term borrowings 2,967 3,744 Factor 666 530 Total debt $ 5,481 $ 6,592 Less – current maturities (4,618 ) (5,501 ) Total long-term debt $ 863 $ 1,091 Receivables pledged as collateral $ 918 $ 672 Interest rates on foreign borrowings are based on Euribor rates which range from 1.0% to 4.0% . In December 2018, the Company entered into a six month short-term debt arrangement of $1,137 to be used for working capital purposes, which was subsequently repaid in fiscal 2019. In September 2019, Maniago modified its repayment schedule for one tranche of its existing term debt by reducing its next two payments by approximately $96 and extending the loan for an additional six months in which the final payment will be made at that time (to be paid by October 2020). The Company continues to have discussions with its lenders and other potential partners to refinance certain debt obligations at its Maniago location to provide Maniago with sufficient future liquidity. If Maniago is unsuccessful in obtaining additional financing, it may experience challenges in meeting certain current loan obligations. This foreign debt is collateralized by Maniago’s assets. The Company has not pledged any assets as collateral or guaranteed Maniago’s debt. The consolidated condensed financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of the Maniago assets or the amounts and classifications of the Maniago liabilities that may result from the outcome of this uncertainty. Management believes that the actions presently being taken to obtain additional funding and implement its strategic plan will provide adequate liquidity to finance its Maniago operations. The Company factors receivables from one of its customers. The factoring programs are uncommitted, whereby the Company offers receivables for sale to an unaffiliated financial institution, which are then subject to acceptance by the unaffiliated financial institution. Following the sale and transfer of the receivables to the unaffiliated financial institution, the receivables are not isolated from the Company, and effective control of the receivables is not passed to the unaffiliated financial institution, which does not have the right to pledge or sell the receivables. The Company accounts for the pledge of receivables under this agreement as short-term debt and continues to carry the receivables on its consolidated condensed balance sheets. Debt issuance costs The Company incurred debt issuance costs as it pertains to the Credit Agreement in the amount of $212 , and incurred additional costs in fiscal 2019 of $75 related to the First and Second Amendments, which is included in the consolidated condensed balance sheets as a deferred charge in other current assets, net of amortization of $158 and $106 at March 31, 2020 and September 30, 2019, respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For each interim reporting period, the Company makes an estimate of the effective tax rate it expects to be applicable for the full fiscal year for its operations. This estimated effective rate is used in providing for income taxes on a year-to-date basis. The Company’s effective tax rate through the first six months of fiscal 2020 was (8)% , compared with 16% for the same period of fiscal 2019. The decrease in the effective rate was primarily attributable to changes in jurisdictional mix of income in fiscal 2020 compared with the same period of fiscal 2019 and discrete tax benefits through the second quarter of fiscal 2019 applied against a year-to-date loss. The effective tax rate differs from the U.S. federal statutory rate due primarily to the valuation allowance against the Company’s U.S. deferred tax assets and income in foreign jurisdictions that are taxed at different rates than the U.S. statutory tax rate. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted and signed into law. The CARES Act includes provisions relating to refundable payroll tax credits, deferral of certain payment requirements for the employer portion of Social Security taxes, net operating loss carryback periods and temporarily increasing the amount of net operating losses that corporations can use to offset income, alternative minimum tax ("AMT") credit refunds, modifications to the net interest deduction limitations, and technical corrections to tax depreciation methods for qualified improvement property. The CARES Act did not materially affect the Company’s second quarter of fiscal 2020 income tax provision, deferred tax assets and liabilities, or related taxes payable. The Company continues to assess the future implications of these provisions within the CARES Act on its consolidated condensed financial statements but does not expect the impact to be material. The Company is subject to income taxes in the U.S. federal jurisdiction, Ireland, Italy, and various state and local jurisdictions. The Company believes it has appropriate support for its federal income tax returns. |
Retirement Benefit Plans
Retirement Benefit Plans | 6 Months Ended |
Mar. 31, 2020 | |
Retirement Benefits [Abstract] | |
Retirement Benefit Plans | Retirement Benefit Plans The Company and certain of its subsidiaries sponsor defined benefit pension plans covering some of its employees. The components of net periodic benefit cost of the Company’s defined benefit plans are as follows: Three Months Ended Six Months Ended 2020 2019 2020 2019 Service cost $ 85 $ 75 $ 170 $ 149 Interest cost 208 264 416 528 Expected return on plan assets (363 ) (393 ) (727 ) (787 ) Amortization of net loss 188 107 376 215 Net periodic cost $ 118 $ 53 $ 235 $ 105 During the six months ended March 31, 2020 and 2019, the Company made $244 and $48 in contributions, respectively, to its defined benefit pension plans. The Company anticipates making $ 173 of additional cash contributions to fund its defined benefit pension plans during the balance of fiscal 2020 and will use carryover balances from previous periods that have been available for use as a credit to reduce the amount of cash contributions that the Company is required to make to certain defined benefit plans in fiscal 2020. The Company's ability to elect to use such carryover balance will be determined based on the actual funded status of each defined benefit pension plan relative to the plan's minimum regulatory funding requirements. The Company does not anticipate making cash contributions above the minimum funding requirement to fund its defined benefit pension plans during the balance of fiscal 2020. On November 26, 2019, the Company ratified a new collective bargaining agreement with one of its bargaining units. Included within the agreement was a provision to withdraw from its existing multi-employer plan resulting in the imposition of a withdrawal liability. The withdrawal liability of $739 was recorded within the cost of goods sold line of the consolidated condensed statement of operations and is included in other long-term liabilities and the current portion (next four quarterly installments) in accrued liabilities of the consolidated condensed balance sheets, payable in quarterly installments over the next 20 years . |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company has awarded performance and restricted shares under its shareholder-approved amended and restated 2007 Long-Term Incentive Plan ("2007 Plan"), which was further amended and restated under the SIFCO Industries, Inc. 2007 Long-Term Incentive Plan (Amended and Restated as of November 16, 2016) (the "2016 Plan"). At the Annual Meeting of shareholders held on January 30, 2020, the shareholders of the Company approved the first amendment (the “Amendment”) to the 2016 Plan. The Amendment increased the number of shares available for award under the 2016 Plan by 550 shares. The aggregate number of shares that may be awarded by the Company was increased to 1,196 shares, less any shares previously awarded and subject to an adjustment for the forfeiture of any unvested shares, pursuant to the 2016 Plan. In addition, shares that may be awarded are subject to individual recipient award limitations. The shares awarded under the 2016 Plan may be made in multiple forms, including stock options, stock appreciation rights, restricted or unrestricted stock, and performance related shares. Any such award is exercisable no later than ten years from the date of the grant. The performance shares that have been awarded under both plans generally provide for the vesting of the Company’s common shares upon the Company achieving certain defined financial performance objectives during a period up to three years following the making of such award. The ultimate number of common shares of the Company that may be earned pursuant to an award ranges from a minimum of no shares to a maximum of 200% (for awards granted in fiscal 2020, the maximum is 150% ) of the initial target number of performance shares awarded, depending on the level of the Company’s achievement of its financial performance objectives. With respect to such performance shares, compensation expense is being accrued based on the probability of meeting the performance target. The Company is currently recognizing compensation expense for two tranches of awards where it has concluded it is probable that the performance criteria for that award will be met, while the Company is not currently recognizing compensation expense for one tranche of awards where it had concluded that it is not probable that the performance criteria for those awards will be met. During each future reporting period, such expense may be subject to adjustment based upon the Company's financial performance, which impacts the number of common shares that it expects to vest upon the completion of the performance period. The performance shares were valued at the closing market price of the Company’s common shares on the date of the grant. The vesting of such shares is determined at the end of the performance period. During the first six months of fiscal 2020, the Company granted 134 shares under the 2016 Plan to certain key employees. The awards were split into two tranches, 47 performance shares and 87 shares of time-based restricted shares, with a grant date fair value of $2.50 per share. The awards vest over three years . The Company has awarded restricted shares to its directors, officers, and other employees of the Company. The restricted shares were valued at the closing market price of the Company’s common shares on the date of the grant, and such value was recorded as unearned compensation. The unearned compensation is being amortized ratably over the restricted stock vesting period of one year or three years. During the first six months of fiscal 2020, the Company granted its non-employee directors 57 restricted shares under the 2016 Plan, with a grant date fair value of $4.39 , which vests over one year. One award for 61 restricted shares vested. If all outstanding share awards are ultimately earned and vest at the target number of shares, there are approximately 524 shares that remain available for award at March 31, 2020 . If any of the outstanding share awards are ultimately earned and vest at greater than the target number of shares, up to a maximum of 200% (decreased to 150% for awards starting in fiscal 2020) of such target, then a fewer number of shares would be available for award. Stock-based compensation under the 2016 Plan was $225 and $426 during the first six months of fiscal 2020 and 2019, respectively and $70 and $190 during the three months of fiscal 2020 and 2019, respectively. As of March 31, 2020 , there was $732 of total unrecognized compensation cost related to the performance shares and restricted shares awarded under the 2016 Plan. The Company expects to recognize this cost over the next 1.6 years. |
Revenue
Revenue | 6 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue The Company produces forged components for (i) turbine engines that power commercial, business and regional aircraft as well as military aircraft and armored military vehicles; (ii) airframe applications for a variety of aircraft; (iii) industrial gas and steam turbine engines for power generation units; and (iv) other commercial applications. The following table represents a breakout of total revenue by customer type: Three Months Ended Six Months Ended 2020 2019 2020 2019 Commercial revenue $ 12,497 $ 14,435 $ 22,688 $ 26,500 Military revenue 18,040 12,957 34,056 29,958 Total $ 30,537 $ 27,392 $ 56,744 $ 56,458 The following table represents revenue by the various components: Three Months Ended Six Months Ended Net Sales 2020 2019 2020 2019 Aerospace components for: Fixed wing aircraft $ 14,065 $ 13,088 $ 25,400 $ 26,392 Rotorcraft 6,813 7,043 13,661 12,173 Energy components for power generation units 3,417 4,730 6,074 8,460 Commercial product and other revenue 6,242 2,531 11,609 9,433 Total $ 30,537 $ 27,392 $ 56,744 $ 56,458 The following table represents revenue by geographic region based on the Company's selling operation locations: Three Months Ended Six Months Ended Net Sales 2020 2019 2020 2019 North America 27,495 22,721 51,271 48,443 Europe 3,042 4,671 5,473 8,015 Total $ 30,537 $ 27,392 $ 56,744 $ 56,458 In addition to the disaggregating revenue information provided above, approximately 63% of total net sales as of March 31, 2020 is recognized on an over-time basis because of the continuous transfer of control to the customer, with the remainder recognized at a point in time. Contract Balances Generally, payment is due shortly after the shipment of goods. For performance obligations recognized at a point in time, a contract asset is not established as the billing and revenue recognition occur at the same time. For performance obligations recognized over time, a contract asset is established as revenue is recognized prior to billing and shipment. Upon shipment and billing, the value of the contract asset is reversed and accounts receivable is recorded. In circumstances where prepayments are required and payment is made prior to satisfaction of performance obligations, a contract liability is established. If the performance obligation occurs over time, the contract liability is reversed over the course of production. If the performance obligation is point in time, the contract liability reverses upon shipment. The following table contains a roll forward of contract assets and contract liabilities for the period ended March 31, 2020: Contract assets - Beginning balance, October 1, 2019 $ 10,349 Additional revenue recognized over-time 35,688 Less amounts billed to the customers $ (33,517 ) Contract assets - Ending balance, March 31, 2020 $ 12,520 Contract liabilities (included within Accrued liabilities) - Beginning balance, October 1, 2019 $ (382 ) Payments received in advance of performance obligations — Performance obligations satisfied 382 Contract liabilities (included within Accrued liabilities) - Ending balance, March 31, 2020 $ — There were no impairment losses recorded on contract assets as of March 31, 2020. Remaining performance obligations As of March 31, 2020, the Company has $106,987 of remaining performance obligations, the majority of which are anticipated to be completed within the next twelve months. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In the normal course of business, the Company may be involved in ordinary, routine legal actions. The Company cannot reasonably estimate future costs, if any, related to these matters; however, it does not believe any such matters are material to its financial condition or results of operations. The Company maintains various liability insurance coverages to protect its assets from losses arising out of or involving activities associated with ongoing and normal business operations; however, it is possible that the Company’s future operating results could be affected by future costs of litigation. A subsidiary of the Company, Quality Aluminum Forge, LLC ("Orange"), is currently a defendant in a lawsuit filed by Avco Corporation (“Avco”) in the Pennsylvania State Court, which was filed in August 2019, alleging that certain forged pistons delivered by the Orange plant failed to meet material specifications required by Avco. No specific amount of damages was claimed by Avco and no discovery has occurred at this time and Orange disagrees with the allegations made by Avco. Previously, Orange was a defendant with respect to the same action in the United States District Court for the District of Rhode Island, which action was dismissed in connection with the movement of the matter to Pennsylvania State Court. Although the Company records reserves for legal disputes and other matters in accordance with GAAP, the ultimate outcomes of these types of matters are inherently uncertain. Actual results may differ significantly from current estimates. Given the current status of this matter, the Company has not recorded a charge, as the Company does not have a reasonable basis on which to establish an estimate. The Company is a defendant in a purported class action lawsuit filed in the Superior Court of California, County of Orange, which was filed in August 2017, arising from employee wage-and-hour claims under California law for alleged meal period, rest break, hourly and overtime wage calculation, timely wage payment and necessary expenditure indemnification violations; failure to maintain required wage records and furnish accurate wage statements; and unfair competition. A settlement has been reached and was scheduled for preliminary court approval in April 2020. This date is currently postponed and has not yet been re-scheduled due to COVID-19. The Company previously recorded adequate reserves to cover the settlement. During the quarter, the Company received notice from the International Association of Machinists and Aerospace Workers Union that they were disclaiming all interest in representing certain hourly employees at the Company’s Cleveland facility. Also, during the quarter, the International Brotherhood of Boilermakers Union filed a petition to represent this same group of hourly employees. The Company is working with the National Labor Relations Board to schedule an election, the timing of which may be affected by COVID-19. The Company’s obligations will be more fully understood following the outcome of this election. Recovery on the insurance claim related to the fire on December 26, 2018 at the Orange location continues in fiscal 2020. The Company continues to work diligently to restore the site back to full service as safely and quickly as possible. The 2500 ton press from storage that was placed in service in fiscal 2019 continues to run and the press located in Michigan was taken off-line at the end of November 2019, was relocated to Orange and was placed in service in March 2020. Restoration is nearly complete for the structure of the manufacturing building and two additional presses damaged in the fire. The Company began running one of the restored presses at the end of December 2019, while the second is now expected to be in use starting June 2020. Two of the six presses damaged in the fire remain to be restored. The Company anticipates having those restored in the fourth quarter of 2020. During the first six months of fiscal 2020, the Company received cash proceeds from insurance of $6,787 and, separately, the insurance carrier provided $713 proceeds directly to the landlord for the continued restoration of the damaged building as prescribed under the lease arrangement. The table below reflects the receipt of proceeds and how they were expended as of March 31, 2020. Any additional recoveries in excess of recognized losses are treated as gain contingencies and will be recognized when the gain is realized or realizable. The Company also maintains business interruption insurance coverage and continues to work with the insurance company to reach an agreement on the recoverable amounts of business interruption expenses, which $915 was realized in the first six months of fiscal 2020. Balance sheet (Other receivables): September 30, 2019 $ 3,500 Cash proceeds (6,787 ) Capital expenditures (equipment) 1,000 Other expenses 1,372 Business interruption 915 March 31, 2020 $ — The tables below reflect how the proceeds received impacted the consolidated condensed statements of operations for the six months ended and three months ended March 31,2020. Six Months Ended March 31, 2020 Balance without insurance proceeds Insurance recoveries Balance with insurance proceeds Cost of goods sold 49,430 (2,287 ) 47,143 Gain on insurance proceeds received — (1,000 ) (1,000 ) Net income (loss) $ (1,368 ) $ (3,287 ) $ 1,919 Three Months Ended March 30, 2020 Balance without insurance proceeds Insurance recoveries Balance with insurance proceeds Cost of goods sold 25,377 (1,117 ) 24,260 Gain on insurance proceeds received — (1,000 ) (1,000 ) Net income (loss) $ 1,143 $ (2,117 ) $ 3,260 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The CARES Act, enacted by the federal government on March 27, 2020, established a number of programs designed to assist U.S. companies respond to and recover from the impact of the COVID-19 pandemic. In response to the economic uncertainty created by the COVID-19 pandemic, as described above in Note 1, Summary of Significant Accounting Policies , and taking into consideration the Company’s market capitalization, status as a smaller reporting company, and uncertainties and volatility in, and disruptions to, the capital markets, as well as the terms of the Company’s Credit Agreement, the Company applied for and received funds under the Paycheck Protection Program (or “PPP”) of the CARES Act. On April 10, 2020, the Company entered into an unsecured promissory note under the Paycheck Protection Program (the “PPP Loan”). The PPP Loan to the Company is being made through JPMorgan Chase Bank, N.A., a national banking association and the Company’s existing lender. The note has an aggregate principal amount of approximately $5,025 and a two year term. The interest rate on the PPP Loan is 0.98% , which shall be deferred for the first six months of the term of the loan. The promissory note evidencing the PPP Loan contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, or provisions of the promissory note. The occurrence of an event of default may result in the repayment of all amounts outstanding, collection of all amounts owing from the Company, and/or filing suit and obtaining judgment against the Company. The loan proceeds were received on April 10, 2020 and have been used and will be used for payroll, interest on mortgage obligations, rents on leases and utility payments. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited consolidated condensed financial statements include the accounts of SIFCO Industries, Inc. and its wholly-owned subsidiaries (the "Company"). All significant intercompany accounts and transactions have been eliminated in consolidation. The U.S. dollar is the functional currency for all of the Company’s U.S. operations and its non-operating subsidiaries. For these operations, all gains and losses from completed currency transactions are included in income. The functional currency for the Company's other non-U.S. subsidiaries is the Euro. Assets and liabilities are translated into U.S. dollars at the rates of exchange at the end of the period, and revenues and expenses are translated using average rates of exchange for the period. Foreign currency translation adjustments are reported as a component of accumulated other comprehensive loss in the unaudited consolidated condensed financial statements. These unaudited consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s fiscal 2019 Annual Report on Form 10-K. The year-end consolidated balance sheet data was derived from the audited financial statements and disclosures required by accounting principles generally accepted in the United States ("U.S."). The results of operations for any interim period are not necessarily indicative of the results to be expected for other interim periods or the full year. |
Net Income/(Loss) per Share | Net Income/(Loss) per Share The Company’s net income and loss per basic share has been computed based on the weighted-average number of common shares outstanding. |
Impact of Recently Issued Accounting Standards and Recently Adopted Accounting Standards | Impact of Recently Issued Accounting Standards In June 2016, the FASB issued ASU 2016-13, " Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments " and subsequent updates. ASU 2016-13 changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The new guidance will replace the current incurred loss approach with an expected loss model. The new expected credit loss impairment model will apply to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt instruments, net investments in leases, loan commitments and standby letters of credit. Upon initial recognition of the exposure, the expected credit loss model requires entities to estimate the credit losses expected over the life of an exposure (or pool of exposures). The estimate of expected credit losses should consider historical information, current information and reasonable and supportable forecasts, including estimates of prepayments. Financial instruments with similar risk characteristics should be grouped together when estimating expected credit losses. ASU 2016-13 does not prescribe a specific method to make the estimate, so its application will require significant judgment. ASU 2016-13 is effective for public companies in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. However, in November 2019, the FASB issued ASU 2019-10, "Financial Instruments - Credit Loss (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842)," which defers the effective date for public filers that are considered smaller reporting companies ("SRC"), as defined by the Securities and Exchange Commission, to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Because SIFCO is considered a SRC, the Company does not need to implement ASU 2016-13 until October 1, 2023. The Company will continue to evaluate the effect of adopting ASU 2016-13 will have on the Company's results within the consolidated condensed statements of operations and financial condition. In December 2019, ASU 2019-12, " Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes" was issued to (i) reduce the complexity of the standard by removing certain exceptions to the general principles in Topic 740 and (ii) improve consistency and simplify other areas of Topic 740 by clarifying and amending existing guidance. This ASU is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2020. The Company continues to evaluate the effect adopting this ASU will have on the Company's results within the consolidated condensed statements of operations and financial condition. E. Recently Adopted Accounting Standards The Company adopted Topic 842 using the cumulative effect method as of October 1, 2019 for the adoption of Topic 842. Under the transition method selected by the Company, leases that are not short-term in nature existing at, or entered on October 1, 2019 were required to be recognized and measured. Prior period amounts were not adjusted and continue to be reflected with the Company's historical accounting. The adoption of Topic 842 resulted in the Company recording right-of-use ("ROU") assets and operating lease liabilities of approximately $18,059 to the consolidated condensed balance sheet as of October 1, 2019, with no related impact on the Company's consolidated condensed statement of comprehensive income (loss) or consolidated condensed statement of cash flows. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of dilutive effect of company's restricted shares and performance shares | The dilutive effect is as follows: Three Months Ended Six Months Ended 2020 2019 2020 2019 Net Income (loss) $ 3,260 $ (1,258 ) $ 1,919 $ (2,540 ) Weighted-average common shares outstanding (basic and diluted) 5,679 5,561 5,645 5,548 Effect of dilutive securities: Restricted shares 89 — 102 — Performance shares 2 — 1 — Weighted-average common shares outstanding (basic and diluted) 5,770 5,561 5,748 5,548 Net income (loss) per share – basic: $ 0.57 $ (0.23 ) $ 0.34 $ (0.46 ) Net income (loss) per share – diluted: $ 0.57 $ (0.23 ) $ 0.33 $ (0.46 ) Anti-dilutive weighted-average common shares excluded from calculation of diluted earnings per share 215 214 147 200 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consist of: March 31, September 30, Raw materials and supplies $ 4,873 $ 4,512 Work-in-process 4,974 2,721 Finished goods 3,555 3,276 Total inventories $ 13,402 $ 10,509 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Components of Accumulated Other Comprehensive Loss | The components of accumulated other comprehensive loss are as follows: March 31, September 30, Foreign currency translation adjustment $ (5,604 ) $ (5,667 ) Retirement plan liability adjustment, net of tax (7,205 ) (7,642 ) Total accumulated other comprehensive loss $ (12,809 ) $ (13,309 ) |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Lease Cost Components, Supplemental Cash Flow and Other information, and Weighted-Average Remaining Lease Term Schedules | The components of lease expense were as follows: Three Months Ended Six Months Ended Lease expense Finance lease expense: Amortization of right-of use assets on finance leases $ 14 27 Interest on lease liabilities 1 3 Operating lease expense: 543 1,079 Variable lease cost: 39 79 Total lease expense $ 597 $ 1,188 Supplemental cash flow and other information related to leases were as follows: March 31, Other Information Cash paid for amounts included in measurement of liabilities: Operating cash flows from operating leases $ 1,086 Operating cash flows from finance leases 3 Financing cash flows from finance leases 28 March 31 Weighted-average remaining lease term (years): Finance leases 2.1 Operating leases 15.3 Weighted-average discount rate: Finance leases 5.1 % Operating leases 5.9 % |
Supplemental Balance Sheet Information Schedule | The following table presents the impact of leasing on the consolidated condensed balance sheet. Classification to the consolidated condensed balance sheets March 31, Assets: Finance lease assets Property, plant and equipment, net $ 116 Operating lease assets Operating lease right-of-use assets, net 17,699 Total lease assets $ 17,815 Current liabilities: Finance lease liabilities Current maturities of long-term debt $ 57 Operating lease liabilities Short-term operating lease liabilities 1,195 Non-current liabilities: Finance lease liabilities Long-term debt, net of current maturities 51 Operating lease liabilities Long-term operating lease liabilities, net of short-term 16,576 Total lease liabilities $ 17,879 |
Maturities of Finance Lease Liabilities by Fiscal Year Schedule | Future minimum lease under non-cancellable leases at March 31, 2020 were as follows: Finance Leases Operating Leases Year ending September 30, 2020, (excluding the six months ended March 31, 2020) 31 1,086 2021 55 1,930 2022 21 1,681 2023 6 1,622 2024 — 1,638 Thereafter — 19,170 Total lease payments $ 113 $ 27,127 Less: Interest (5 ) (9,356 ) Present value of lease liabilities $ 108 $ 17,771 |
Maturities of Operating Lease Liabilities by Fiscal Year Schedule | Future minimum lease under non-cancellable leases at March 31, 2020 were as follows: Finance Leases Operating Leases Year ending September 30, 2020, (excluding the six months ended March 31, 2020) 31 1,086 2021 55 1,930 2022 21 1,681 2023 6 1,622 2024 — 1,638 Thereafter — 19,170 Total lease payments $ 113 $ 27,127 Less: Interest (5 ) (9,356 ) Present value of lease liabilities $ 108 $ 17,771 |
Contractual Obligation, Fiscal Year Maturity | As previously disclosed in the 2019 Annual Report on Form 10-K and under the previous lease accounting standard, future minimum lease payments initial or remaining non-cancellable lease terms in excess of one year would have been as follows: Finance Leases Operating Leases Year ending September 30, 2020 $ 61 $ 2,172 2021 61 1,865 2022 21 1,583 2023 6 1,502 2024 — 1,498 Thereafter — 16,711 Total lease payments $ 149 $ 25,331 Less: Interest (11 ) Present value of lease liabilities $ 138 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt consists of: March 31, September 30, Revolving credit agreement $ 17,191 $ 15,542 Foreign subsidiary borrowings 5,481 6,592 Finance lease obligations 108 138 Other, net of unamortized debt issuance costs ($23) and ($25), respectively 1,174 1,108 Total debt 23,954 23,380 Less – current maturities (22,051 ) (21,328 ) Total long-term debt $ 1,903 $ 2,052 |
Schedule of Foreign Debt | Foreign debt consists of: March 31, September 30, Term loan $ 1,848 $ 2,318 Short-term borrowings 2,967 3,744 Factor 666 530 Total debt $ 5,481 $ 6,592 Less – current maturities (4,618 ) (5,501 ) Total long-term debt $ 863 $ 1,091 Receivables pledged as collateral $ 918 $ 672 |
Retirement Benefit Plans (Table
Retirement Benefit Plans (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Retirement Benefits [Abstract] | |
Schedule of Components of Net Periodic Benefit Cost | The components of net periodic benefit cost of the Company’s defined benefit plans are as follows: Three Months Ended Six Months Ended 2020 2019 2020 2019 Service cost $ 85 $ 75 $ 170 $ 149 Interest cost 208 264 416 528 Expected return on plan assets (363 ) (393 ) (727 ) (787 ) Amortization of net loss 188 107 376 215 Net periodic cost $ 118 $ 53 $ 235 $ 105 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table represents a breakout of total revenue by customer type: Three Months Ended Six Months Ended 2020 2019 2020 2019 Commercial revenue $ 12,497 $ 14,435 $ 22,688 $ 26,500 Military revenue 18,040 12,957 34,056 29,958 Total $ 30,537 $ 27,392 $ 56,744 $ 56,458 The following table represents revenue by the various components: Three Months Ended Six Months Ended Net Sales 2020 2019 2020 2019 Aerospace components for: Fixed wing aircraft $ 14,065 $ 13,088 $ 25,400 $ 26,392 Rotorcraft 6,813 7,043 13,661 12,173 Energy components for power generation units 3,417 4,730 6,074 8,460 Commercial product and other revenue 6,242 2,531 11,609 9,433 Total $ 30,537 $ 27,392 $ 56,744 $ 56,458 The following table represents revenue by geographic region based on the Company's selling operation locations: Three Months Ended Six Months Ended Net Sales 2020 2019 2020 2019 North America 27,495 22,721 51,271 48,443 Europe 3,042 4,671 5,473 8,015 Total $ 30,537 $ 27,392 $ 56,744 $ 56,458 |
Contract Assets | The following table contains a roll forward of contract assets and contract liabilities for the period ended March 31, 2020: Contract assets - Beginning balance, October 1, 2019 $ 10,349 Additional revenue recognized over-time 35,688 Less amounts billed to the customers $ (33,517 ) Contract assets - Ending balance, March 31, 2020 $ 12,520 Contract liabilities (included within Accrued liabilities) - Beginning balance, October 1, 2019 $ (382 ) Payments received in advance of performance obligations — Performance obligations satisfied 382 Contract liabilities (included within Accrued liabilities) - Ending balance, March 31, 2020 $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Insurance Recoveries Within Consolidated Condensed Financial Statements | The Company also maintains business interruption insurance coverage and continues to work with the insurance company to reach an agreement on the recoverable amounts of business interruption expenses, which $915 was realized in the first six months of fiscal 2020. Balance sheet (Other receivables): September 30, 2019 $ 3,500 Cash proceeds (6,787 ) Capital expenditures (equipment) 1,000 Other expenses 1,372 Business interruption 915 March 31, 2020 $ — The tables below reflect how the proceeds received impacted the consolidated condensed statements of operations for the six months ended and three months ended March 31,2020. Six Months Ended March 31, 2020 Balance without insurance proceeds Insurance recoveries Balance with insurance proceeds Cost of goods sold 49,430 (2,287 ) 47,143 Gain on insurance proceeds received — (1,000 ) (1,000 ) Net income (loss) $ (1,368 ) $ (3,287 ) $ 1,919 Three Months Ended March 30, 2020 Balance without insurance proceeds Insurance recoveries Balance with insurance proceeds Cost of goods sold 25,377 (1,117 ) 24,260 Gain on insurance proceeds received — (1,000 ) (1,000 ) Net income (loss) $ 1,143 $ (2,117 ) $ 3,260 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Net Income (loss) | $ 3,260 | $ (1,258) | $ 1,919 | $ (2,540) |
Weighted-average common shares outstanding (basic and diluted) (in shares) | 5,679,000 | 5,561,000 | 5,645,000 | 5,548,000 |
Effect of dilutive securities: | ||||
Weighted-average common shares outstanding (basic and diluted) (in shares) | 5,770,000 | 5,561,000 | 5,748,000 | 5,548,000 |
Net loss per share – basic: | ||||
Net income (loss) per share – basic (in dollars per share) | $ 0.57 | $ (0.23) | $ 0.34 | $ (0.46) |
Net income (loss) per share – diluted (in dollars per share) | $ 0.57 | $ (0.23) | $ 0.33 | $ (0.46) |
Anti-dilutive weighted-average common shares excluded from calculation of diluted earnings per share (in shares) | 215,000 | 214,000 | 147,000 | 200,000 |
Restricted shares | ||||
Effect of dilutive securities: | ||||
Restricted shares (in shares) | 89,000 | 0 | 102,000 | 0 |
Net loss per share – basic: | ||||
Anti-dilutive weighted-average common shares excluded from calculation of diluted earnings per share (in shares) | 0 | |||
Performance shares | ||||
Effect of dilutive securities: | ||||
Restricted shares (in shares) | 2,000 | 0 | 1,000 | 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Recently Adopted Accounting Standards (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Oct. 01, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease right-of-use assets | $ 17,699 | |
Operating lease liabilities | $ 17,771 | |
Topic 842 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease right-of-use assets | $ 18,059 | |
Operating lease liabilities | $ 18,059 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Sep. 30, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials and supplies | $ 4,873 | $ 4,512 |
Work-in-process | 4,974 | 2,721 |
Finished goods | 3,555 | 3,276 |
Total inventories | $ 13,402 | $ 10,509 |
Inventories - Narrative (Detail
Inventories - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Sep. 30, 2019 |
Inventory Disclosure [Abstract] | ||
Percentage of inventories determined using LIFO method | 35.00% | 27.00% |
Additional amount that would have been reported in inventory if FIFO method had been used | $ 8,285 | $ 8,296 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Total accumulated other comprehensive loss | $ 38,690 | $ 35,245 | $ 36,054 | $ 45,239 | $ 46,421 | $ 44,189 |
Foreign currency translation adjustment | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Total accumulated other comprehensive loss | (5,604) | (5,667) | ||||
Retirement plan liability adjustment, net of tax | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Total accumulated other comprehensive loss | (7,205) | (7,642) | ||||
Total accumulated other comprehensive loss | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Total accumulated other comprehensive loss | $ (12,809) | $ (12,928) | $ (13,309) | $ (9,001) | $ (8,949) | $ (8,629) |
Leases - Narrative (Details)
Leases - Narrative (Details) | Mar. 31, 2020 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 17 years |
Leases - Lease Cost Components
Leases - Lease Cost Components Schedule (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Mar. 31, 2020 | Mar. 31, 2020 | |
Finance lease expense | ||
Amortization of right-of use assets on finance leases | $ 14 | $ 27 |
Interest on lease liabilities | 1 | 3 |
Operating lease expense: | 543 | 1,079 |
Variable lease cost: | 39 | 79 |
Total lease expense | $ 597 | $ 1,188 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information Schedule (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Sep. 30, 2019 |
Leases [Abstract] | ||
Property, plant and equipment, net | $ 116 | |
Operating lease right-of-use assets, net | 17,699 | |
Total lease assets | 17,815 | |
Current maturities of long-term debt | 57 | |
Short-term operating lease liabilities | 1,195 | $ 0 |
Long-term debt, net of current maturities | 51 | |
Long-term operating lease liabilities, net of short-term | 16,576 | $ 0 |
Total lease liabilities | $ 17,879 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information and Non-Cash Activity Schedule (Details) $ in Thousands | 6 Months Ended |
Mar. 31, 2020USD ($) | |
Cash paid for amounts included in measurement of liabilities: | |
Operating cash flows from operating leases | $ 1,086 |
Operating cash flows from finance leases | 3 |
Financing cash flows from finance leases | $ 28 |
Leases - Weighted-Average Remai
Leases - Weighted-Average Remaining Lease Term and Discount Rate Schedule (Details) | Mar. 31, 2020 |
Weighted-average remaining lease term (years) | |
Finance leases | 2 years 1 month |
Operating leases | 15 years 3 months |
Weighted-average discount rate | |
Finance leases | 5.10% |
Operating leases | 5.90% |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities by Fiscal Year Schedule (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Finance Leases | |
2020, (excluding the six months ended March 31, 2020) | $ 31 |
2021 | 55 |
2022 | 21 |
2023 | 6 |
2024 | 0 |
Thereafter | 0 |
Total lease payments | 113 |
Less: Interest | (5) |
Present value of lease liabilities | 108 |
Operating Leases | |
2020, (excluding the six months ended March 31, 2020) | 1,086 |
2021 | 1,930 |
2022 | 1,681 |
2023 | 1,622 |
2024 | 1,638 |
Thereafter | 19,170 |
Total lease payments | 27,127 |
Less: Interest | (9,356) |
Present value of lease liabilities | $ 17,771 |
Leases - Schedule of Minimum Re
Leases - Schedule of Minimum Rental Commitment Under Non-Cancelable Leases (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Finance Leases | |
2020 | $ 61 |
2021 | 61 |
2022 | 21 |
2023 | 6 |
2024 | 0 |
Thereafter | 0 |
Total lease payments | 149 |
Less: Interest | (11) |
Present value of lease liabilities | 138 |
Operating Leases | |
2020 | 2,172 |
2021 | 1,865 |
2022 | 1,583 |
2023 | 1,502 |
2024 | 1,498 |
Thereafter | 16,711 |
Total lease payments | $ 25,331 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Sep. 30, 2019 |
Debt Instrument [Line Items] | ||
Finance lease obligations | $ 108 | |
Total debt | 23,954 | $ 23,380 |
Less – current maturities | (22,051) | (21,328) |
Total long-term debt | 1,903 | 2,052 |
Unamortized debt issuance costs | (23) | (25) |
Finance lease obligations | ||
Debt Instrument [Line Items] | ||
Finance lease obligations | 138 | |
Other, net of unamortized debt issuance costs ($23) and ($25), respectively | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 1,174 | 1,108 |
Revolving credit agreement | Revolving credit agreement | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 17,191 | 15,542 |
Foreign subsidiary borrowings | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 5,481 | $ 6,592 |
Debt - Narrative (Details)
Debt - Narrative (Details) | Sep. 30, 2019USD ($) | Sep. 20, 2019USD ($) | Aug. 08, 2018USD ($) | Sep. 30, 2019USD ($)repaymenttranche | Dec. 31, 2018USD ($) | Mar. 31, 2020USD ($)invoice | Sep. 30, 2019USD ($) | Dec. 17, 2018USD ($) |
Line of Credit Facility [Line Items] | ||||||||
Short-term debt arrangement | $ 15,542,000 | $ 15,542,000 | $ 17,191,000 | $ 15,542,000 | ||||
Number of customer invoices factored | invoice | 1 | |||||||
Foreign subsidiary borrowings | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Receivables pledged as collateral | 672,000 | $ 672,000 | $ 918,000 | 672,000 | ||||
Long-term debt, number of tranches with modified repayment schedule | tranche | 1 | |||||||
Debt instrument, number of repayments reduced | repayment | 2 | |||||||
Debt instrument, repayment reduction per payment, amount | $ 96,000 | |||||||
Debt instrument, loan extension period | 6 months | |||||||
Foreign subsidiary borrowings | Euribor | Minimum | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Euribor variable interest rates | 1.00% | |||||||
Foreign subsidiary borrowings | Euribor | Maximum | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Euribor variable interest rates | 4.00% | |||||||
2018 Credit Agreement | Revolving credit agreement | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Fixed charge coverage ratio | 1.1 | |||||||
Percent availability under revolving commitment | 12.50% | |||||||
Percentage of stock pledged on credit agreement | 66.67% | |||||||
2018 Credit Agreement | Revolving credit agreement | Revolving credit agreement | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Revolving credit facility, maximum borrowing capacity | $ 30,000,000 | |||||||
Accordion feature, increase limit | $ 10,000,000 | |||||||
Weighted average interest rate, revolving credit facility | 3.60% | |||||||
Commitment fee percentage | 0.25% | |||||||
Debt issuance costs incurred | $ 212,000 | |||||||
Revolving line of credit, accumulated amortization of debt issuance costs | $ 106,000 | $ 106,000 | $ 158,000 | $ 106,000 | ||||
2018 Credit Agreement | Revolving credit agreement | Revolving credit agreement | LIBOR | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Basis spread on LIBOR | 2.00% | 1.75% | ||||||
Export Credit Facility | Revolving credit agreement | Revolving credit agreement | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Revolving credit facility, maximum borrowing capacity | $ 5,000,000 | |||||||
Accordion feature, increase limit | $ 35,000,000 | |||||||
Weighted average interest rate, revolving credit facility | 3.40% | 3.40% | 3.10% | 3.40% | ||||
Export Credit Facility | Revolving credit agreement | Revolving credit agreement | LIBOR | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Basis spread on LIBOR | 1.50% | 1.25% | ||||||
Third Amendment To Credit Agreement | Revolving credit agreement | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Coverage ratio threshold for three or more business days in consecutive thirty day period | 12.50% | |||||||
Fourth Amendment To Credit Agreement | Revolving credit agreement | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Fixed charge coverage ratio | 1.1 | |||||||
Percent availability under revolving commitment | 10.00% | |||||||
Coverage ratio threshold for three or more business days in consecutive thirty day period | 10.00% | 10.00% | ||||||
Line of credit facility, benchmark of collateral threshold | $ 20,000,000 | |||||||
Receivables pledged as collateral | $ 24,000,000 | $ 24,000,000 | $ 26,000,000 | $ 24,000,000 | ||||
Fourth Amendment To Credit Agreement | Revolving credit agreement | Revolving credit agreement | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Revolving credit facility, maximum borrowing capacity | 35,000,000 | 35,000,000 | 35,000,000 | 35,000,000 | ||||
Line of credit facility, covenant terms, floor | 2,000,000 | |||||||
Line of credit facility, benchmark of collateral threshold | $ 20,000,000 | |||||||
Line of credit facility, total commitment springs | 2,400,000 | 2,400,000 | 2,600,000 | 2,400,000 | ||||
Remaining borrowing capacity | 7,709,000 | 7,709,000 | $ 7,999,000 | 7,709,000 | ||||
Short Term Debt Arrangement For Working Capital Purposes | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt instrument, term | 6 months | |||||||
Short-term debt arrangement | $ 1,137,000 | |||||||
First And Second Amendment to 2018 Credit Agreement | Revolving credit agreement | Revolving credit agreement | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt issuance costs incurred | $ 75,000 | $ 75,000 | $ 75,000 |
Debt - Schedule of Foreign Subs
Debt - Schedule of Foreign Subsidiary Borrowings (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Sep. 30, 2019 |
Line of Credit Facility [Line Items] | ||
Less – current maturities | $ (4,860) | $ (5,786) |
Total long-term debt | 1,903 | 2,052 |
Foreign subsidiary borrowings | ||
Line of Credit Facility [Line Items] | ||
Total debt | 5,481 | 6,592 |
Less – current maturities | (4,618) | (5,501) |
Total long-term debt | 863 | 1,091 |
Receivables pledged as collateral | 918 | 672 |
Term loan | Foreign subsidiary borrowings | ||
Line of Credit Facility [Line Items] | ||
Total debt | 1,848 | 2,318 |
Short-term borrowings | Foreign subsidiary borrowings | ||
Line of Credit Facility [Line Items] | ||
Total debt | 2,967 | 3,744 |
Factor | Foreign subsidiary borrowings | ||
Line of Credit Facility [Line Items] | ||
Total debt | $ 666 | $ 530 |
Income Taxes (Details)
Income Taxes (Details) | 6 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate, percent | (8.00%) | 16.00% |
Retirement Benefit Plans - Comp
Retirement Benefit Plans - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Retirement Benefits [Abstract] | ||||
Service cost | $ 85 | $ 75 | $ 170 | $ 149 |
Interest cost | 208 | 264 | 416 | 528 |
Expected return on plan assets | (363) | (393) | (727) | (787) |
Amortization of net loss | 188 | 107 | 376 | 215 |
Net periodic cost | $ 118 | $ 53 | $ 235 | $ 105 |
Retirement Benefit Plans - Narr
Retirement Benefit Plans - Narrative (Details) - USD ($) $ in Thousands | Nov. 26, 2019 | Mar. 31, 2020 | Mar. 31, 2019 |
Defined Benefit Plan Disclosure [Line Items] | |||
Contributions amount in defined benefit pension plans | $ 244 | $ 48 | |
Additional cash contributions planned during fiscal 2019 | 173 | ||
Other debt withdrawal liability | $ 739 | ||
IAM National Pension Fund [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Payment period | 20 years |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2020USD ($)shares | Mar. 31, 2019USD ($) | Mar. 31, 2020USD ($)tranche$ / sharesshares | Mar. 31, 2019USD ($) | Sep. 30, 2019 | Jan. 30, 2020shares | |
Amended 2016 Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Aggregate number of shares that may be awarded (in shares) | 550,000 | |||||
2016 Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Aggregate number of shares that may be awarded (in shares) | 1,196,000 | 1,196,000 | ||||
Exercise period for shares awarded under plan | 10 years | |||||
Outstanding share awards that may be awarded (in shares) | 524,000 | 524,000 | ||||
Outstanding share awards earned and issued at greater than the target number of shares | 200.00% | |||||
Outstanding share awards earned and issued at greater than the target number of shares next fiscal year | 150.00% | |||||
Share-based compensation expense (benefit) | $ | $ 70 | $ 190 | $ 225 | $ 426 | ||
Total unrecognized compensation cost related to performance and restricted shares | $ | $ 732 | $ 732 | ||||
Period of recognized compensation cost (in years) | 1 year 7 months | |||||
2016 Plan | Performance shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Performance period (in years) | 3 years | |||||
2016 Plan | Performance shares | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common shares earned pursuant to award (in shares) | 0 | |||||
2016 Plan | Performance shares | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common shares earned as percentage of initial target number shares awarded | 200.00% | |||||
Common shares earned as percentage of initial target number shares awarded next fiscal year | 150.00% | |||||
2016 Plan | Restricted shares | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period (in years) | 1 year | |||||
2016 Plan | Restricted shares | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period (in years) | 3 years | |||||
Key employees | 2016 Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of tranches in award | tranche | 2 | |||||
Key employees | 2016 Plan | Performance shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares granted in period (in shares) | 47,000 | |||||
Key employees | 2016 Plan | Performance and Restricted Shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares granted in period (in shares) | 134,000 | |||||
Vesting period (in years) | 3 years | |||||
Shares granted in period, grant date fair value (in dollars per share) | $ / shares | $ 2.50 | |||||
Key employees | 2016 Plan | Restricted shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares granted in period (in shares) | 87,000 | |||||
Non-employee directors | 2016 Plan | Performance and Restricted Shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares granted in period, grant date fair value (in dollars per share) | $ / shares | $ 4.39 | |||||
Non-employee directors | 2016 Plan | Restricted shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares granted in period (in shares) | 57,000 | |||||
Vested in period (in shares) | 61,000 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 30,537 | $ 27,392 | $ 56,744 | $ 56,458 |
Revenue from Contract with Customer | Transferred over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk | 63.00% | |||
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 27,495 | 22,721 | $ 51,271 | 48,443 |
Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 3,042 | 4,671 | 5,473 | 8,015 |
Fixed wing aircraft | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 14,065 | 13,088 | 25,400 | 26,392 |
Rotorcraft | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 6,813 | 7,043 | 13,661 | 12,173 |
Energy components for power generation units | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 3,417 | 4,730 | 6,074 | 8,460 |
Commercial product and other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 6,242 | 2,531 | 11,609 | 9,433 |
Commercial revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 12,497 | 14,435 | 22,688 | 26,500 |
Military revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 18,040 | $ 12,957 | $ 34,056 | $ 29,958 |
Revenue - Contract Balances (De
Revenue - Contract Balances (Details) | 6 Months Ended |
Mar. 31, 2020USD ($) | |
Change In Contract With Customer, Assets [Roll Forward] | |
Contract assets - Beginning balance, October 1, 2019 | $ 10,349,000 |
Additional revenue recognized over-time | 35,688,000 |
Less amounts billed to the customers | (33,517,000) |
Contract assets - Ending balance, March 31, 2020 | 12,520,000 |
Change In Contract With Customer, Liability [Roll Forward] | |
Contract liabilities (included within Accrued liabilities) - Beginning balance, October 1, 2019 | (382,000) |
Payments received in advance of performance obligations | 0 |
Performance obligations satisfied | 382,000 |
Contract liabilities (included within Accrued liabilities) - Ending balance, March 31, 2020 | 0 |
Impairment loss on contract assets | $ 0 |
Revenue - Performance Obligatio
Revenue - Performance Obligation (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 106,987 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Thousands | 6 Months Ended | ||
Mar. 31, 2020USD ($)press_ton | Dec. 31, 2019restored_building | Dec. 26, 2018press | |
Loss Contingencies [Line Items] | |||
Number of press tons | press_ton | 2,500 | ||
Recoverable amounts of business interruption expenses | $ 915 | ||
Quality Aluminum Forge, LLC Manufacturing Facility Fire | |||
Loss Contingencies [Line Items] | |||
Number of recovered presses on site | restored_building | 1 | ||
Cash proceeds | 6,787 | ||
Proceeds directly to landlord | 713 | ||
Recoverable amounts of business interruption expenses | $ 915 | ||
Damage from Fire, Explosion or Other Hazard | Quality Aluminum Forge, LLC Manufacturing Facility Fire | |||
Loss Contingencies [Line Items] | |||
Number of additional damaged presses on site | press | 2 | ||
Number of presses to be restored | press | 2 | ||
Number of presses damaged | press | 6 |
Commitments and Contingencies_2
Commitments and Contingencies - Insurance Receivable Balance Sheet Rollforward (Details) $ in Thousands | 6 Months Ended |
Mar. 31, 2020USD ($) | |
Loss Contingencies [Line Items] | |
Business interruption | $ 915 |
Quality Aluminum Forge, LLC Manufacturing Facility Fire | |
Loss Contingencies [Line Items] | |
Other receivable, beginning balance | 3,500 |
Cash proceeds | (6,787) |
Other expenses | 1,372 |
Business interruption | 915 |
Other receivable, ending balance | 0 |
Quality Aluminum Forge, LLC Manufacturing Facility Fire | Equipment | |
Loss Contingencies [Line Items] | |
Capital expenditures | $ 1,000 |
Commitments and Contingencies_3
Commitments and Contingencies - Insurance Proceeds Impact On Consolidated Condensed Statements Of Operation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Loss Contingencies [Line Items] | ||||
Cost of goods sold, balance without insurance proceeds | $ 25,377 | $ 49,430 | ||
Gain on insurance proceeds received | (1,000) | $ (1,164) | (1,000) | $ (1,164) |
Cost of goods sold | 24,260 | 25,304 | 47,143 | 51,633 |
Net loss, balance without insurance proceeds | 1,143 | (1,368) | ||
Net income (loss) | 3,260 | $ (1,258) | 1,919 | $ (2,540) |
Cost of goods sold | ||||
Loss Contingencies [Line Items] | ||||
Gain on insurance proceeds received | (1,117) | (2,287) | ||
Net income (loss) | ||||
Loss Contingencies [Line Items] | ||||
Gain on insurance proceeds received | $ (2,117) | $ (3,287) |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - Unsecured Promissory Note - PPP Loan | Apr. 10, 2020USD ($) |
Subsequent Event [Line Items] | |
Face amount | $ 5,025,000 |
Debt instrument, term | 2 years |
Interest rate | 0.98% |
Deferral term | 6 months |
Uncategorized Items - sif-20200
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 3,598,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 3,598,000 |