SIFCO INDUSTRIES INC
For the period ended Sep 30, 2025. Filed Dec 22, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Dec 22, 2025
SIF$16.77-0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-09-30; filed 2024-12-26.
0000090168-24-000060
Item 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-09-30; filed 2025-12-22.
0001628280-25-058405
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsFinancial Statements and Supplemental DataReport of Independent Registered Public Accounting Firm (PCAOB IDConsolidated Statements of OperationsConsolidated Statements of Comprehensive Income (Loss)Consolidated Balance SheetsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 66 previous paragraphs and 124 current paragraphs.
24 unchanged; 18 reworded; 82 added; 24 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (82)
Current report
Interest Expense, Net
Current report
Net Cash Provided By Discontinued Operations
Current report
C. Critical Accounting Policies and Estimates
Current report
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Estimates are revised as additional information becomes available. The Company believes that the accounting estimates employed and the resulting balances are reasonable; however, actual results in these areas could differ from management’s estimates under different assumptions or conditions.
Current report
Significant accounting policies used in the preparation of the consolidated financial statements are discussed in Note 1 —Summary of Significant Accounting Policiesof the Notes to Consolidated Financial Statements. The Company believes that the assumptions and estimates associated with allowance for credit losses, inventory valuation, goodwill, contract balances, and income taxes have the greatest potential impact on our financial statements because they are inherently uncertain, involve significant judgements, and include areas where different estimates reasonably could materially impact the financial statements. The Company believes that the critical accounting estimates employed and the resulting balances are reasonable; however, actual results in these areas could differ from management’s estimates under different assumptions or conditions.
Current report
Allowances for Credit Losses
Current report
The Company establishes allowances for credit losses on accounts receivable, customer financing receivables, and certain other financial assets. The adequacy of these allowances are assessed quarterly through consideration of factors including, but not limited to, customer credit ratings, bankruptcy filings, published or estimated credit default rates, age of the receivable, expected loss rates and collateral exposures. The Company determines the creditworthiness of each customer based upon publicly available information and information obtained directly from its customers. As these factors change, the Company’s allowances for credit losses may change in subsequent periods. Historically, losses have been within management’s expectations and have not been significant.
Current report
Inventories
Current report
Approximately 40% of the Company’s inventory is valued using the last-in, first-out (“LIFO”) method with the remaining valued using the first-in, first-out (“FIFO”) method stated at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business less reasonably predictable costs of completion.
Current report
The Company evaluates obsolete and excess inventory on a quarterly basis. The Company maintains a formal policy, which requires at a minimum, that amounts are written down based on an analysis of the age of the inventory. In addition, if the Company learns of specific obsolescence, other than that identified by the aging criteria, an additional write down will be recognized. Specific obsolescence may arise due to a technological or market change or based on cancellation of an order. Management’s judgment is necessary in determining the proper write down for obsolete and excess inventory. For the portion of the Company’s inventory not valued at LIFO, inventory is valued at FIFO and stated at the lower of cost or net realizable value. The Company evaluates net realizable value on a quarterly basis. See Note 3 — Inventories, netof the Notes to Consolidated Financial Statements for further discussion.
Current report
Revenue Recognition
Current report
The Company recognizes revenue using the five-step revenue recognition model in which it depicts the transfer of goods to customers in an amount that reflects the consideration to which a company expects to be entitled in exchange for those goods or services. The revenue standard also requires disclosure sufficient to enable users to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments and assets recognized from the cost to obtain or fulfill a contract.
Current report
Contract assets on the consolidated balance sheets are recognized when a good is transferred to the customer and the Company does not have the contractual right to bill for the related performance obligations. In these instances, revenue recognized exceeds the amount billed to the customer and the right to payment is not solely subject to the passage of time. Amounts do not exceed their net realizable value. Contract liabilities relate to payments received in advance of the satisfaction of performance under the contract. Payment from customers are received based on the terms established in the contract with the customer.
Current report
Impairment of Long-Lived Assets
Current report
The Company reviews the carrying value of its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of the long-lived asset (group) might not be recoverable. This review involves judgment and is performed using estimates of future undiscounted cash flows, which include proceeds from disposal of assets and which the Company considers a critical accounting estimate. The Company would assess the fair value of the asset group and compare it to its carrying value. Under the Accounting Standard Codification (“ASC”) 360 (“Topic 360”), if the carrying value of a long-lived asset or asset group is greater than the estimated undiscounted future cash flows, then the long-lived asset or asset group is considered impaired and an impairment charge is recorded for the amount by which the carrying value of the long-lived asset or asset group exceeds its fair value.
Current report
In projecting future undiscounted cash flows, the Company relies on internal budgets and forecasts, including revenue and cash flow projections,, and estimated residual value of the asset group upon disposal of long-lived assets. The Company’s budgets and forecasts are based on historical results and anticipated future market conditions, such as the general business climate and the effectiveness of competition. The Company believes that its estimates of future undiscounted cash flows and fair value are reasonable; however, changes in estimates of such undiscounted cash flows and fair value could change the Company’s estimates, which could result in future impairment charges.
Current report
2025 and 2024 Long-Lived Asset Recoverability Tests
Current report
In the third quarter of fiscal 2024, certain qualitative factors, including operating results, at the Orange location, triggered a recoverability test. The results indicated that the long-lived assets were recoverable and did not require further review for impairment. The Company did not identify any indicators that the asset groups might be impaired in any of the other quarters assessed during fiscal 2025 and 2024.
Current report
Impairment of Goodwill
Current report
Goodwill is tested for impairment annually as of July 31. If circumstances change during interim periods between annual tests that would more likely than not reduce the fair value of a reporting unit below its carrying value, the Company will test goodwill for impairment. Factors that would necessitate an interim goodwill impairment assessment include a sustained decline in the Company’s stock price, prolonged negative industry or economic trends, or significant under-performance relative to expected, historical or projected future operating results. Management uses judgment to determine whether to use a qualitative analysis or a quantitative fair value measurement for its goodwill impairment testing. The Company’s fair value measurement approach combines the income and market valuation techniques for each of the Company’s reporting units that carry goodwill. These valuation techniques use estimates and assumptions including, but not limited to, the determination of appropriate market comparables, projected future cash flows (including timing and profitability), discount rate reflecting the risk inherent in future cash flows, perpetual growth rate, and projected future economic and market conditions.
Current report
If a reporting unit fails the quantitative impairment test, impairment expense is immediately recorded as the difference between the reporting unit’s fair value and carrying value not to exceed the amount of goodwill recorded.
Current report
2025 Annual Goodwill Impairment Tests
Current report
SIFCO performed its annual test as of July 31, 2025. Goodwill existed at one of the Company’s reporting units, Cleveland, Ohio as of July 31, 2025 and September 30, 2025. No impairment charge was identified in connection with the annual goodwill impairment test with respect to the Cleveland reporting unit. Refer to Note 4 —Goodwillof the Notes to Consolidated Financial Statements.
Current report
2024 Annual Goodwill Impairment Tests
Current report
SIFCO performed its annual test as of July 31, 2024. Goodwill existed at one of the Company’s reporting units, Cleveland, Ohio as of July 31, 2024 and September 30, 2024. No impairment charge was identified in connection with the annual goodwill impairment test with respect to the Cleveland reporting unit. Refer to Note 4 —Goodwillof the Notes to Consolidated Financial Statements.
Current report
Defined Benefit Pension Plan Expense
Current report
The Company maintains three defined benefit pension plans in accordance with the requirements of the Employee Retirement Income Security Act of 1974 (“ERISA”). The amounts recognized in the consolidated financial statements for pension benefits under these three defined benefit pension plans are determined on an actuarial basis utilizing various assumptions. The following table illustrates the sensitivity to change in the assumed discount rate and expected long-term rate of return on assets for the Company’s pension plans as of September 30, 2025.
Current report
The discussion that follows provides information on the significant assumptions/elements associated with these defined benefit pension plans.
Current report
The Company determines the expected return on plan assets principally based on (i) the expected return for the various asset classes in the respective plans’ investment portfolios and (ii) the targeted allocation of the respective plans’ assets. The expected return on plan assets is developed using historical asset return performance as well as current and anticipated market conditions such as inflation, interest rates and market performance. Should the actual rate of return differ materially from the assumed/expected rate, the Company could experience a material adverse effect on the funded status of its plans and, accordingly, on its related future net pension expense.
Current report
The discount rate for each plan is determined, as of the fiscal year end measurement date, using prevailing market spot-rates (from an appropriate yield curve) with maturities corresponding to the expected timing/date of the future defined benefit payment amounts for each of the respective plans. Such corresponding spot-rates are used to discount future years’ projected defined benefit payment amounts back to the fiscal year end measurement date as a present value. A composite discount rate is then developed for each plan by determining the single rate of discount that will produce the same present value as that obtained by applying the annual spot-rates. The discount rate may be further revised if the market environment indicates that the above methodology generates a discount rate that does not accurately reflect the prevailing interest rates as of the fiscal year end measurement date. The Company computes a weighted-average discount rate taking into account anticipated plan payments and the associated interest rates from the USI Consulting Group Pension Discount Curve.
Current report
As of September 30, 2025 and 2024, SIFCO used the following weighted-average assumptions:
Current report
Deferred Tax Valuation Allowance
Current report
The Company accounts for deferred taxes in accordance with the provisions of the Accounting Standards Codification guidance related to accounting for income taxes, whereby the Company recognizes an income tax benefit related to income tax credits, loss carryforwards and deductible temporary differences between financial reporting basis and tax reporting basis.
Current report
A high degree of judgment is required to determine the extent a valuation allowance should be provided against deferred tax assets. On a quarterly basis, the Company assesses the likelihood of realization of its deferred tax assets considering all available evidence, both positive and negative. In determining whether a valuation allowance is warranted, the Company evaluates factors such as prior earnings history, expected future earnings, carry-back and carry-forward periods and tax strategies that could potentially enhance the likelihood of the realization of a deferred tax asset. The weight given to the positive and negative evidence is commensurate with the extent to which the evidence may be objectively verified. It is generally difficult to outweigh objectively verifiable negative evidence of recent financial reporting losses. Based on the weight of available evidence, the Company determines if it is more likely than not that its deferred tax assets will be realized in the future.
Current report
As a result of losses incurred in recent years, the Company entered into a three-year cumulative loss position in the U.S. jurisdiction during the fourth quarter of fiscal 2016 and remains in a cumulative loss position at the conclusion of fiscal 2025. Accordingly, the Company maintained its valuation allowance on its U.S. deferred tax assets as of the fourth quarter of fiscal 2025.
Current report
D. Impact of Newly Issued Accounting Standards
Current report
Refer to Note 1 —Summary of Significant Accounting Policiesof the Notes to Consolidated Financial Statements included elsewhere in this Annual Report for information regarding recent accounting pronouncements.
Current report
Report of Independent Registered Public Accounting Firm (PCAOB ID:34)¹
Current report
Report of Independent Registered Public Accounting Firm (PCAOB ID: 49)²
Showing the first 40 of 82 passages. Open the source sections for the rest.
Removed paragraphs (24)
Previous report
As reported on Forms 8-K filed January 6, 2023 and February 10, 2023, the Company became aware of unauthorized access to the Company’s systems on December 30, 2022. The Company’s domestic operations were impacted by this cybersecurity incident which resulted in production delays and delayed shipments due to information access limitations. The Company initiated response protocols and an investigation, engaging cyber security experts to assist with the assessment of the incident and to help determine what data was impacted. The Company has since completed data recovery and restoration from the cyber incident. See Note 12 — Commitments and Contingenciesof the Notes to Consolidated Financial Statements.
Previous report
2024, compared to $27.4 million in fiscal 2023 primarily due to higher demand in the commercial space market, as well as increases in build rates in the commercial aerospace industry. Military net sales decreased $0.8 million to $37.9 million in fiscal 2024, compared to $38.7 million in fiscal 2023 primarily due to V22 and C130 demand reductions, partially offset by higher demand in certain rotorcraft and munition programs.
Previous report
Amortization of Intangibles
Previous report
In fiscal 2024, amortization of intangibles decreased slightly by $0.1 million compared to the prior year due to certain intangible assets that were fully amortized during fiscal 2023.
Previous report
Other/General
Previous report
Non-GAAP Financial Measures
Previous report
Presented below is certain financial information based on the Company’s EBITDA and Adjusted EBITDA. References to “EBITDA” mean earnings (losses) from continuing operations before interest, taxes, depreciation and amortization, and references to “Adjusted EBITDA” mean EBITDA plus, as applicable for each relevant period, certain adjustments as set forth in the reconciliations of net income to EBITDA and Adjusted EBITDA.
Previous report
Neither EBITDA nor Adjusted EBITDA is a measurement of financial performance under generally accepted accounting principles in the United States of America (“GAAP”). The Company presents EBITDA and Adjusted EBITDA because management believes that they are useful indicators for evaluating operating performance, including the Company’s ability to incur and service debt and it uses EBITDA to evaluate prospective acquisitions. Although the Company uses EBITDA and Adjusted EBITDA for the reasons noted above, the use of these non-GAAP financial measures as analytical tools has limitations. Therefore, reviewers of the Company’s financial information should not consider them in isolation, or as a substitute for analysis of the Company’s results of operations as reported in accordance with GAAP. Some of these limitations include:
Previous report
•Neither EBITDA nor Adjusted EBITDA reflects the interest expense or the cash requirements necessary to service interest payments on indebtedness;
Previous report
•Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and neither EBITDA nor Adjusted EBITDA reflects any cash requirements for such replacements;
Previous report
•The omission of the amortization expense associated with the Company’s intangible assets further limits the usefulness of EBITDA and Adjusted EBITDA as measurements of financial performance; and
Previous report
•Neither EBITDA nor Adjusted EBITDA includes the payment of taxes, which is a necessary element of operations.
Previous report
Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as measures of discretionary cash available to the Company to invest in the growth of its businesses. Management compensates for these limitations by not viewing EBITDA or Adjusted EBITDA in isolation and specifically by using other GAAP measures, such as net income (loss), net sales, and operating income (loss), to measure operating performance. Neither EBITDA nor Adjusted EBITDA is a measurement of financial performance under GAAP, and neither should be considered as an alternative to net loss or cash flow from operations determined in accordance with GAAP. The Company’s calculation of EBITDA and Adjusted EBITDA may not be comparable to the calculation of similarly titled measures reported by other companies.
Previous report
The following table sets forth a reconciliation of net loss to EBITDA and Adjusted EBITDA:
Previous report
(1)Represents the gain or loss from changes in the exchange rates between the functional currency and the foreign currency in which the transaction is denominated.
Previous report
(2)Represents miscellaneous non-operating income or expense, such as pension costs or grant income.
Previous report
(3)Represents the difference between the proceeds from the sale of operating equipment and the carrying value shown on the Company’s books.
Previous report
(4)Represents the equity-based compensation expense recognized by the Company under the 2016 Plan due to granting of awards, awards not vesting and/or forfeitures and executive severance.
Previous report
(5)Represents expense incurred by its defined benefit pension plans related to settlement of pension obligations.
Previous report
(6)Represents the change in the reserve for inventories for which cost is determined using the last-in, first-out (“LIFO”) method.
Previous report
(7)Represents incremental information technology costs (and credits) as it relates to the cybersecurity incident and loss on insurance recovery.
Previous report
(8)Represents expense related to evaluation of strategic alternatives.
Previous report
Reference to the above activities can be found in the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
Previous report
Net Cash Provided By (Used For) Discontinued Operations
Reworded paragraphs (18)
Previous wording
In October 2024, the Company sold its European operations in order to streamline operational synergies and refocus on its core aerospace forging business. SIFCO Irish Holdings, Ltd., a wholly owned subsidiary of the Company, entered into a Share Purchase Agreement (the “SPA”) pursuant to which it sold 100% of the share capital of C Blade S.p.A. Forging & Manufacturing, an Italian joint stock company and wholly-owned subsidiary of the Company (“CBlade”), for cash consideration.
Current wording
In October 2024, the Company sold its European operations in order to streamline operational synergies and refocus on its core aerospace forging business. SIFCO Irish Holdings, Ltd., a wholly owned subsidiary of the Company, entered into a Share Purchase Agreement (the “SPA”) pursuant to which it sold 100% of the share capital of CBlade S.p.A. Forging & Manufacturing, an Italian joint stock company and wholly-owned subsidiary of the Company (“CBlade”), for cash consideration.
Previous wording
As a result of the planned sale transaction, the Company’s financial statements have been prepared with the net assets, results of operations, and cash flows of CBlade presented as assets held for sale and discontinued operations, respectively, as of and for the years ended September 30, 2024 and 2023. All historical statements, amounts and related disclosures have been retrospectively adjusted to conform to this presentation. Refer to Note 2 —Assets Held for Sale and Discontinued Operationsof the Notes to Consolidated Financial Statements.
Current wording
As a result of the planned sale transaction, the Company’s financial statements have been prepared with the net assets, results of operations, and cash flows of CBlade presented as assets held for sale and discontinued operations, respectively, as of and for the years ended September 30, 2025 and 2024. All historical statements, amounts and related disclosures have been retrospectively adjusted to conform to this presentation. Refer to Note 2 —Discontinued Operationsof the Notes to Consolidated Financial Statements.
Previous wording
Net sales in fiscal 2024 increased 20.4%, or $13.5 million, to $79.6 million, compared with $66.1 million in fiscal 2023. Higher demand in the commercial space market and the timing of shipments and contract approvals across most markets contributed to the increase in deliveries in fiscal 2024 from fiscal 2023. Fixed wing aircraft sales increased $1.8 million compared with the same period last year primarily due to the 787 program. Rotorcraft sales increased $0.9 million in fiscal 2024 compared to the same period in fiscal 2023 primarily due to the Sikorsky H60 and Blackhawk programs, partially offset by declines in sales in the Bell/Boeing Osprey V22 components. Commercial space products increased by $8.6 million year-over-year due to higher demand for staged-combustion engine components. Energy components for power generation units decreased $0.3 million compared with the same period last year due to lower demand in the steam turbine markets. Commercial products and other revenue increased by $2.5 million in fiscal 2024 compared to fiscal 2023, primarily due to timing of orders related to munitions programs.
Current wording
Net sales in fiscal 2025 increased 6.5%, or $5.2 million, to $84.8 million, compared with $79.6 million in fiscal 2024. Fixed wing aircraft sales increased $9.6 million compared with the same period last year primarily due to higher demand across most programs. Rotorcraft sales decreased $0.2 million in fiscal 2025 compared to the same period in fiscal 2024 primarily due to timing of orders in the H-60 program. Commercial space products decreased by $8.2 million year-over-year due to reduced procurement activity in the commercial space market. One key customer, significantly scaled back orders as they manage excess inventory. Energy components for power generation units increased $0.7 million due to growth in the steam turbine markets. Commercial products and other revenue increased by $3.3 million in fiscal 2025 compared to fiscal 2024, mostly due to timing of orders related to munitions programs.
Previous wording
Commercial net sales were 52.4% of total net sales and military net sales were 47.6% of total net sales in fiscal 2024, compared with 41.5% and 58.5%, respectively, in fiscal 2023. Commercial net sales increased $14.4 million to $41.8 million in fiscal
Current wording
Commercial net sales were 43.5% of total net sales and military net sales were 56.5% of total net sales in fiscal 2025, compared with 52.4% and 47.6%, respectively, in fiscal 2024. Commercial net sales decreased $4.8 million to $36.9 million in fiscal 2025, compared to $41.7 million in fiscal 2024 primarily due to reduced procurement activity in the commercial space market due to reasons noted above. Military net sales increased $10.0 million to $47.9 million in fiscal 2025, compared to $37.9 million in fiscal 2024 primarily due to increased demand across most programs.
Previous wording
Cost of goods sold (“COGS”) increased by $10.9 million, or 17.4%, to $73.7 million, or 92.5% of net sales, during fiscal 2024, compared with $62.7 million, or 94.9%, of net sales during fiscal 2023. The increase was primarily due to increased volume, coupled with higher labor costs of $1.3 million and other manufacturing and overhead costs of $1.4 million, primarily consisting of supplies, outside processing fees and insurance. Current year results include $1.4 million of idle expense and less than $0.1 million of expense associated with net realizable value (“NRV”) compared with prior year costs of $2.1 million and $0.9 million, respectively, which partially offset the increases in COGS in fiscal 2024. Additionally, fiscal 2023 results included $1.5 million of Employee Retention Credit (“ERC”) benefit that did not reoccur in fiscal 2024.
Current wording
Cost of goods sold (“COGS”) increased by $0.6 million, or 0.8%, to $74.2 million, or 87.5% of net sales, during fiscal 2025, compared with $73.7 million, or 92.5%, of net sales during fiscal 2024. The increase was primarily due to higher sales volume, partially offset by $3.0 million of Employee Retention Credit (“ERC”) benefit.
Previous wording
Gross profit increased by $2.6 million, to $6.0 million during fiscal 2024, compared with $3.3 million in fiscal 2023. Gross margin percent of sales was 7.5% during fiscal 2024, compared with 5.1% in fiscal 2023, primarily due to the increases in sales volume and COGS discussed above and the impact of favorable mix of products sold, particularly due to growth in the commercial space market.
Current wording
Gross profit increased by $4.6 million, to $10.6 million during fiscal 2025, compared with $6.0 million in fiscal 2024. Gross margin percent of sales was 12.5% during fiscal 2025, compared with 7.5% in fiscal 2024, primarily due to higher sales and improved margin, as well as $3.0 million ERC benefit recognized.
Previous wording
Selling, general and administrative (“SG&A”) expenses were $11.1 million, or 14.0% of net sales, during fiscal 2024, compared with $12.3 million, or 18.6% of net sales, in fiscal 2023. The decrease in SG&A expenses is primarily due to lower costs related to the prior year's cybersecurity incident, partially offset by higher legal and other costs related to the evaluation of strategic alternatives.
Current wording
Selling, general and administrative (“SG&A”) expenses were $10.4 million, or 12.3% of net sales, during fiscal 2025, compared with $11.1 million, or 14.0% of net sales, in fiscal 2024. The decrease in SG&A expenses is primarily due to lower employee-related expenses, resulting from reduced headcount due to deferred backfill of certain positions and a $0.5 million benefit recognized from ERC. These decreases were partially offset by approximately $0.8 million in legal and professional fees related to the ERC submission process. In addition, SG&A expenses in the prior year included a one time credit of $0.6 million from a vendor pertaining to the fiscal 2023 cybersecurity incident and $0.4 million in severance costs, which did not recur in the current period.
Previous wording
The Company’s effective tax rate in fiscal 2024 was (0.4)% compared with (0.2)% in fiscal 2023. The decrease in the effective tax rate in fiscal 2024 is primarily attributable to changes in jurisdictional mix of income in fiscal 2024 compared with the same period in fiscal 2023. 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.
Current wording
The Company’s effective tax rate in fiscal 2025 was 24.7% compared with 0.4% in fiscal 2024. The decrease in the effective tax rate in fiscal 2025 is primarily attributable to changes in jurisdictional mix of income and increase in Ireland income tax expense as a result of the sale of Italian business in fiscal 2025 compared with the same period in fiscal 2024. 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.
Previous wording
Net loss was $8.6 million during fiscal 2024 compared with $10.5 million in fiscal 2023 due to higher sales volumes and gross margins improvements coupled with lower SG&A expenses, partially offset by higher interest expense.
Current wording
Loss from continuing operations was $0.9 million during fiscal 2025 compared with a loss from continuing operations of $8.6 million in fiscal 2024 due to higher sales volumes and gross margins improvements coupled with lower SG&A expenses, lower interest expense attributable to lower average debt outstanding during the period and the net benefit recognized of $3.3 million related to ERC.
Previous wording
Cash and cash equivalents increased to $1.7 million at September 30, 2024 compared with $21 thousand at September 30, 2023. As of September 30, 2024 and 2023, the Company also had cash and cash equivalents related to its business held for sale (i.e., CBlade) of $1.0 million and $0.3 million, respectively, which are included in Current assets of business held for sale in the audited consolidated balance sheets. As of September 30, 2024 and 2023, cash included financing proceeds for capital investment and a nominal amount of the Company’s cash and cash equivalents were in the possession of its non-U.S. holding company subsidiary.
Current wording
Cash, cash equivalents and restricted cash decreased to $0.5 million at September 30, 2025 compared with $1.7 million at September 30, 2024. The Company also had cash and cash equivalents related to its discontinued operations (i.e., CBlade) of nil and $1.0 million, September 30, 2025 and 2024, respectively, which are included in current assets of business held for sale in the audited consolidated balance sheets. As of September 30, 2025 and 2024, cash included financing proceeds for capital investment and a nominal amount of the Company’s cash and cash equivalents were in the possession of its non-U.S. holding company subsidiary.
Previous wording
With the sale of the CBlade manufacturing operations located in Maniago, Italy, the Company expects to increase its cash on hand from the proceeds, which will be used to repay a portion of its outstanding debt balances and for general operational needs. Historically, the cash flows from the Company’s CBlade business represented a material portion of the consolidated results of operations, financial condition and cash flows. Although future contributions from the CBlade business will cease with the execution of the sale transaction, the Company believes that its streamlined operations and lower overall costs will allow management to focus on domestic growth opportunities. However, there is no guarantee that the Company’s continuing operations will sufficiently replace the liquidity and cash flows previously provided by CBlade’s operations. For details regarding the sale of CBlade, refer to Note 2 —Assets Held for Sale and Discontinued Operationsof the Notes to Consolidated Financial Statements.
Current wording
With the sale of the CBlade manufacturing operations located in Maniago, Italy, the Company increased its cash on hand from the proceeds, which was used to repay a portion of its outstanding debt balances and for general operational needs. Historically, the cash flows from the Company’s CBlade business represented a material portion of the consolidated results of operations, financial condition and cash flows. Although future contributions from the CBlade business ceased with the execution of the sale transaction, the Company believes that its streamlined operations will allow management to focus on domestic growth opportunities. There is no guarantee that the Company’s continuing operations will sufficiently replace the liquidity and cash flows previously provided by CBlade’s operations. For details regarding the sale of CBlade, refer to Note 2 —Discontinued Operationsof the Notes to Consolidated Financial Statements.
Previous wording
We believe that our existing cash will be sufficient to finance our continued operations, planned capital expenditures and the additional expenses that we expect to incur during the next 12 months. In order to support and achieve our future growth plans, we may need or advantageously seek to obtain additional funding through equity or debt financing. We believe that our current operating structure will facilitate sufficient cash flows from operations to satisfy our expected long-term liquidity requirements beyond the next 12 months. If these resources are not sufficient to satisfy our liquidity requirements due to changes in circumstances, we may be required to borrow under our loan agreement or seek additional financing. The Company’s liquidity could be negatively affected if the Company is unable to obtain capital, by customers extending payment terms to the Company and/or the decrease in demand for our products. The Company and management will continue to assess and actively manage liquidity needs. For details regarding our debt agreements, see Note 6 —Debtof the Notes to Consolidated Financial Statements.
Current wording
We believe that our current operating structure will facilitate sufficient cash flows from operations to satisfy our expected long-term liquidity requirements beyond the next 12 months. If these resources are not sufficient to satisfy our liquidity requirements due to changes in circumstances, we may be required to borrow under our loan agreement or seek additional financing. The Company’s liquidity could be negatively affected if the Company is unable to obtain capital, if customers extend payment terms, and/or if demand for our products decline. The Company and management will continue monitor its liquidity needs. For details regarding our debt agreements, see Note 6 —Debtof the Notes to Consolidated Financial Statements.
Previous wording
The Company’s operating activities used $3.8 million of cash in fiscal 2023. The cash used by operating activities in fiscal 2023 was primarily due to net operating loss of $10.5 million, adjusted for non-cash items such as change in NRV reserve $1.1 million, and LIFO benefit of $0.3 million, partially offset by depreciation and amortization of $5.1 million, equity based compensation of $0.3 million and sources of working capital of $2.4 million. The source of cash from working capital of $2.4 million was primarily due to increase in accounts payable due to timing of payments and lower inventories due to extended raw material lead times, partially offset by higher accounts receivable due to increased sales at the end of the fiscal year.
Current wording
The Company’s operating activities provided $0.1 million of cash in fiscal 2025, compared with $2.6 million of cash used in fiscal 2024. The cash provided by operating activities in fiscal 2025 was primarily due to net operating loss of $0.9 million, adjusted for non-cash items of $8.7 million, partially offset by uses of working capital of $7.6 million. The use of cash from working capital of $7.6 million was primarily due to accounts receivable decreasing, reflecting improved collections and timing of billings, inventories increased, accounts payables and accrued liabilities decreased as the Company reduced outstanding obligations and normalized payment cycles.
Previous wording
The Company’s operating activities used $2.6 million of cash in fiscal 2024, compared with $3.8 million of cash used in fiscal 2023. The cash used by operating activities in fiscal 2024 was primarily due to net operating loss of $8.6 million, adjusted for non-cash items such as depreciation and amortization of $4.8 million, amortization of debt issuance costs of $1.2 million, LIFO expense of $0.9 million, change in NRV reserve $0.6 million, equity based compensation of $0.2 million, partially offset by sources of working capital of $2.3 million. The use of cash from working capital of $2.3 million was primarily due to higher inventories due to timing of raw material receipts, the increase in accounts receivable due to higher sales and timing of payments at the end of the fiscal year, and higher prepaid expenses attributable to deferred financing costs related to the debt refinancing, partially offset by an increase in contract liabilities due to advance payments for raw materials and higher sales recognized over-time and higher accounts payable due to timing of payments.
Current wording
The Company’s operating activities used $2.6 million of cash in fiscal 2024. The cash used by operating activities in fiscal 2024 was primarily due to net operating loss of $8.6 million, adjusted for non-cash items of $8.3 million, partially offset by use of working capital of $2.3 million. The use of cash from working capital of $2.3 million was primarily due to higher inventories due to timing of raw material receipts, the increase in account receivables due to higher sales and timing of payments at the end of fiscal year, and higher prepaid expenses attributable to deferred financing costs related to debt refinancing, partially offset by an increase in contract liabilities due to advance payments for raw materials and higher sales recognized over-time and higher accounts payable due to timing of payments
Previous wording
Cash used for investing activities was $2.0 million in fiscal 2024, compared with $1.1 million in fiscal 2023. Fiscal 2024 and fiscal 2023 expenditures were used primarily for manufacturing enhancement and maintenance. Capital commitments at September 30, 2024 were $0.3 million. The Company anticipates the total fiscal 2025 capital expenditures will be within the range of $2.0 million to $3.0 million and will relate principally to the further enhancement of production and product offering capabilities and operating cost reductions.
Current wording
Cash used for investing activities was $0.5 million in fiscal 2025, compared with $2.0 million in fiscal 2024. Fiscal 2025 and fiscal 2024 expenditures were used primarily for manufacturing enhancement and maintenance. Capital commitments as of September 30, 2025 were $0.1 million. The Company anticipates the total fiscal 2026 capital expenditures will be within the range of $1.0 million to $2.0 million. These expenditures are expected to relate primarily to projects aimed at improving production capabilities, expanding product offering, and achieving operating cost efficiencies.
Previous wording
Cash provided by financing activities was $6.3 million in fiscal 2024 compared to cash provided by financing activities of $4.9 million in fiscal 2023. The year-over-year increase was primarily related to the higher proceeds received from the related party promissory note and funds drawn from the revolving credit facility, net of payments made, during fiscal 2024.
Current wording
Cash used for financing activities was $14.0 million in fiscal 2025 compared to cash provided by financing activities of $6.3 million in fiscal 2024. The year-over-year decrease in cash from financing was primarily related to the higher repayments on our revolving credit line and the debt refinancing and repayment of the promissory note during fiscal 2025.
Previous wording
Future cash flows from the Company’s operations may be used to pay down outstanding debt amounts. The Company believes it has adequate cash/liquidity available to finance its operations from the combination of (i) the Company’s expected cash flows from operations and (ii) funds available under its loan and security agreement as described in Note 6 —Debtof the Notes to Consolidated Financial Statements for its domestic locations.
Current wording
Future cash flows from the Company’s operations may be used to pay down outstanding debt amounts. The Company believes it has adequate cash/liquidity available to finance its operations from the combination of (i) the Company’s expected cash flows from operations and (ii) funds available under its loan and security agreement as described in Note 6 —Debtof the Notes to Consolidated Financial Statements.
Previous wording
Net cash from discontinued operations are presented in the consolidated statements of cash flows as summarized operating, investing and financing cash flows, as well as the impact of exchange rate changes on cash. The Company’s operating activities from discontinued operations provided $1.4 million of cash in fiscal 2024, compared with $2.4 million of cash provided by fiscal 2023 primarily driven by net income from discontinued operations and changes in working capital. Cash used for investing activities from discontinued operations was $1.4 million and $1.3 million in fiscal 2024 and 2023, respectively, related to outlays for capital expenditures. Cash provided by financing activities from discontinued operations was $1.1 million in fiscal 2024 compared to $2.0 million of cash used in fiscal 2023, attributable to proceeds from new borrowings and loan payments, respectively.
Current wording
Net cash from discontinued operations are presented in the consolidated statements of cash flows as summarized operating, investing and financing cash flows, as well as the impact of exchange rate changes on cash. The Company’s operating activities from discontinued operations provided no cash in fiscal 2025, compared with $1.4 million of cash provided by fiscal 2024 primarily driven by net income from discontinued operations and changes in working capital. Cash provided for investing activities from discontinued operations was $14.4 million in fiscal 2025 and cash use of $1.4 million in 2024, related to proceeds received from its sale and outlays for capital expenditures. Cash provided by financing activities from discontinued operations was $0.4 million in fiscal 2025 compared to $1.1 million of cash used in fiscal 2024, attributable to proceeds from new borrowings and loan payments, respectively.