SIF earnings analysis
What we found in SIF's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
SIFCO delivered strong year-to-date growth, with nine-month revenue up $14.557 million to $76.562 million and continuing-operations income of $4.401 million versus a $0.442 million loss. However, third-quarter profitability deteriorated sharply as gross margin fell to 13.1% from 26.7% and diluted EPS declined to negative $0.01 from $0.56, primarily due to a $3.2 million LIFO expense increase and the absence of a $2.4 million ERC benefit. Military and rotorcraft demand, backlog of $164.2 million and improved operating cash flow were positives, but elevated inventory, minimal cash, high borrowing costs and environmental litigation remain material concerns.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue grew 18.3% year over year
- Third-quarter net sales increased to $26.145 million from $22.095 million, a $4.050 million or 18.3% year-over-year increase. Management attributed the growth to higher production volumes and favorable pricing.
- Nine-month profitability turned positive
- Nine-month net sales increased to $76.562 million from $62.005 million, while income from continuing operations improved to $4.401 million from a $0.442 million loss. Nine-month gross profit increased to $14.272 million from $8.393 million.
- Military demand remained strong
- Military revenue rose to $19.161 million from $13.407 million, an increase of $5.7 million, driven by munitions, V-22 Osprey and UH-60 Black Hawk programs. Military revenue represented 73.3% of third-quarter sales.
- Rotorcraft sales increased
- Rotorcraft revenue increased to $7.638 million from $5.215 million, up $2.4 million year over year, primarily due to order timing for V-22 Osprey and UH-60 Black Hawk programs.
- Backlog expanded 25.9%
- Backlog reached $164.2 million at June 30, 2026, compared with $130.4 million at June 30, 2025. Of the $164.160 million of remaining performance obligations, $99.184 million is anticipated to be completed within 12 months.
- Operating cash flow improved
- Operating cash flow was $3.366 million for the first nine months, compared with cash used of $0.599 million in the prior-year period. Capital expenditures were $0.548 million, or approximately 16.3% of operating cash flow.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- LIFO and ERC effects compressed margins
- Third-quarter gross margin fell to 13.1% from 26.7% and operating margin fell to 1.1% from 14.8% year over year. COGS increased to $22.723 million, or 86.9% of sales, including a $3.2 million increase in LIFO expense and the absence of a prior-year $2.4 million ERC benefit.
- Working capital absorbed cash
- Inventory increased to $10.066 million from $4.192 million at September 30, 2025, while receivables increased to $19.145 million from $16.103 million and contract assets increased to $11.844 million from $10.560 million. Management said working capital consumed approximately $8.3 million of cash during the first nine months.
- Environmental litigation exposure
- The company disclosed a Clean Water Act lawsuit involving its Orange, California facility and recorded $175 thousand for estimated remaining contingent liabilities after settling one notice for $65 thousand. The company recognized $412 thousand of related expense during the first nine months.
- Limited cash and costly debt
- Cash and cash equivalents declined to $77 thousand from $491 thousand at September 30, 2025, while total debt remained $7.042 million. The revolver's effective interest rate was 13.9% for the first nine months, and the company incurred interest based on a specified minimum borrowing level.
- Debt classified as current
- All $7.027 million of debt was classified as current maturities at June 30, 2026 because of a subjective acceleration clause and lockbox provisions. Revolver availability was $15.156 million, and the company was in compliance with its minimum fixed charge coverage covenant.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $-0.01
- Gross margin
- 13.1%
- Operating margin
- 1.1%
- Segment
- Fixed-wing aircraft: $12.676 million, down $0.5 million year over year.
- Segment
- Rotorcraft: $7.638 million, up $2.4 million year over year.
- Segment
- Commercial space: $0.114 million, down $1.1 million year over year.
- Segment
- Energy components for power generation: $0.010 million, down $0.3 million year over year.
- Segment
- Commercial products and other: $5.707 million, up $3.5 million year over year.
- Segment
- Customer type: commercial revenue was $6.984 million, down $1.7 million year over year; military revenue was $19.161 million, up $5.7 million.
What they said about what is next.
No explicit revenue or EPS guidance was provided. Management anticipates remaining fiscal 2026 capital expenditures of $0.5 million to $0.7 million and believes existing cash and available credit lines will be sufficient for operations and planned capital expenditures for the next 12 months.
The filing reads about the same as the one before it.
What came before.
- 10-Q · May 8, 2026
- SIFCO Industries demonstrated strong growth in Q2 2026, with revenue increasing to $26.4 million, up $7.4 million from $19.0 million in Q2 2025. Gross profit rose considerably to $5.7 million from $1.6 million a year…
- 10-Q · February 11, 2026
- SIFCO Industries reported a strong turnaround for Q1 2026, achieving revenue of $24 million and net income of $1.8 million, a significant improvement from a loss of $2.4 million during the same period last year. Gross…
- 10-K · December 22, 2025
- SIFCO Industries reported a slight increase in revenue in fiscal year 2025, with total net sales growing by 6.5% to $84.8 million from $79.6 million in the previous year, driven primarily by increased military aerospace…
- 10-Q · August 14, 2025
- SIFCO Industries reported Q3 2025 net sales of $22.1 million, a slight increase from $22.0 million in Q3 2024, with gross profit significantly up to $5.9 million, driven by a favorable product mix and Employee Retention…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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