SIFCO Industries, Inc.

What they do

SIFCO forges, heat-treats, chemically processes and machines metal components, supplying envelope and precision forgings, rough and finished machined parts and sub-assemblies to OEMs, Tier 1 and Tier 2 suppliers and aftermarket providers. Products weigh roughly 2 to 1,200 pounds and are made primarily of steel, high temperature alloys, nickel alloy, titanium and aluminum. Operations run from Cleveland, Ohio and Orange, California, both AS 9100D and/or ISO 9001:2015 certified with NADCAP certifications. The company operates in a single business segment and sold its Italian subsidiary CBlade S.p.A. in October 2024 to refocus on aerospace forging.

Revenue drivers

• Fixed wing aircraft components — Largest line at $51.4 million in fiscal 2025, up $9.6 million year over year on higher demand across most programs. Sold to turbine engine and airframe applications for commercial, business, regional and military aircraft.
• Rotorcraft — Fiscal 2025 sales of $17.1 million, down $0.2 million year over year, attributed to timing of orders in the H-60 program.
• Commercial space — Fiscal 2025 sales of $5.0 million, down $8.2 million from $13.2 million, because one key customer significantly scaled back orders while managing excess inventory.
• Energy components for power generation units and other commercial — Energy sales of $2.5 million in fiscal 2025, up $0.7 million on steam turbine market growth; commercial products and other revenue of $8.8 million, up $3.3 million, mostly timing of munitions program orders.

Recent performance

Third quarter fiscal 2026 net sales rose 18.3% to $26.1 million from $22.1 million a year earlier, and first nine months sales rose 23.5% to $76.6 million from $62.0 million. Third quarter fiscal 2026 net loss from continuing operations was nominal, or $(0.01) per diluted share, versus a $3.3 million loss, or $0.54 per diluted share, in the prior-year quarter. First nine months fiscal 2026 net income from continuing operations was $4.4 million, or $0.71 per diluted share, versus a $0.4 million loss, or $(0.07) per diluted share, a year earlier. Adjusted EBITDA was $4.8 million in the third quarter versus $4.4 million a year earlier, which included a $2.2 million ERC benefit. Third quarter results included a $3.2 million LIFO expense impact from higher inventory costs and increased purchases.

Strategy

SIFCO's stated plan is to maintain a balance of military and commercial aerospace revenues supplemented by energy, commercial space and adjacent markets, aiming to build a leading aerospace and energy company positioned for long-term stable growth and profitability. The October 2024 sale of Italian subsidiary CBlade S.p.A. was intended to streamline operational synergies and refocus on the core aerospace forging business. CEO George Scherff cited continuing focus on operational excellence, process improvements to raise throughput and productivity, and converting strong demand into profitable growth. The company operates with a significant fixed cost component, so it expects higher volumes to drive greater operating income through better leverage.

Risks

• Commercial aerospace cyclicality — Demand depends on airline profitability, passenger traffic, aircraft purchaser financing and other factors, and a reduction in commercial aircraft demand would adversely affect net sales and operating results.
• Military funding dependence — The military aerospace cycle is highly dependent on U.S. and foreign government funding, and military sales were 56.5% of fiscal 2025 revenue, up from 47.6% in fiscal 2024.
• Customer concentration and demand swings — One key customer significantly scaled back commercial space orders, cutting that line from $13.2 million to $5.0 million year over year.
• Raw material and tariff exposure — Suppliers are located principally in North America and the company cites U.S. tariffs on aluminum and steel among its risks; where pass-through pricing is not permitted, material cost increases can materially hurt contract profitability.

Outlook

Management said customer demand remains strong and that backlog provides continued visibility to future activity. Total backlog was $164.2 million as of June 30, 2026, up from $130.4 million as of June 30, 2025, with aerospace market recovery the primary contributor to increased bookings. The company cautioned that backlog may not be indicative of future sales and that orders may be modified or cancelled with limited charges. Management also noted that availability of skilled production labor continues to present challenges, though recruiting and retention have recently improved.