/ /
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________________ to _____________________
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Ohio
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34-0553950
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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970 East 64th Street, Cleveland Ohio
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44103
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(Address of principal executive offices)
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(Zip Code)
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(216) 881-8600
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(Registrant’s telephone number, including area code)
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Securities Registered Pursuant to Section 12(b) of the Act:
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Common Shares, $1 Par Value
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NYSE MKT
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||||
(Title of each class)
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(Name of each exchange on which registered)
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A.
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The Company
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B.
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Principal Products and Services
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•
|
SIFCO supplies new and spare components for commercial aircraft, principally for large aircraft produced by Boeing and Airbus. A continued increase in passenger travel demand will drive backlog for new aircraft. Demand for more fuel-efficient aircraft, particularly the Boeing 737Max and 787 and the Airbus A320neo and A350, remains strong despite oil prices moderating recently.
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•
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SIFCO also supplies new and spare components to the U.S. military for aircraft, helicopters, vehicles, and ammunition. While the defense budget in the United States has decreased in recent years, the demand for certain programs in which the Company participates has been more favorable.
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•
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SIFCO supplies new and spare components to the energy industry, particularly the industrial turbine market. The industrial gas turbine market is projecting flat near-term growth and stable long-term OEM growth. The demand in the maintenance, repair and overhaul market should remain strong.
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C.
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Environmental Regulations
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D.
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Employees
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E.
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Non-U.S. Operations
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F.
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Available Information
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•
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the need to compete against companies or teams of companies with more financial and marketing resources and more experience in bidding on and performing major contracts than we have;
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•
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the need to compete against companies or teams of companies that may be long-term, entrenched incumbents for a particular contract for which we are competing and that have, as a result, greater domain expertise and better customer relations;
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•
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the need to compete to retain existing contracts that have in the past been awarded to us on a sole-source basis or that have been incumbent for a long time;
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•
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the award of contracts to providers offering solutions at the “lowest price technically acceptable,” which may lower the profit we may generate under a contract awarded using this pricing method or prevent us from submitting a bid for such work due to us deeming such work to be unprofitable;
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•
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the reduction of margins achievable under any contracts awarded to us;
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•
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the need to bid on some programs in advance of the completion of their specifications, which may result in unforeseen technological difficulties or increased costs that lower our profitability;
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•
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the substantial cost and managerial time and effort, including design, development and marketing activities, necessary to prepare bids and proposals for contracts that may not be awarded to us;
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•
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the need to develop, introduce and implement new and enhanced solutions to our customers’ needs;
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•
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the need to locate and contract with teaming partners and subcontractors;
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•
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the need to accurately estimate the resources and cost structure that will be required to perform any contract that we are awarded; and
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•
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long term agreements - cost profile can change over the life of contract.
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•
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identify emerging trends in our current and target markets;
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•
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develop and maintain competitive products and capabilities that meet our customers' requirements; and
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•
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develop, manufacture and bring to market cost-effective offerings in the most efficient manner.
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•
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we may need to divert management resources to integration, which may adversely affect our ability to pursue other more profitable activities;
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•
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integration may be difficult as a result of the necessity of coordinating geographically separated organizations, integrating personnel with disparate business backgrounds and combining different corporate cultures;
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•
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we may not be able to eliminate redundant costs anticipated at the time we select acquisition candidates; and
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•
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one or more of our acquisition candidates may have unexpected liabilities, fraud risk, or adverse operating issues that we fail to discover through our due diligence procedures prior to the acquisition.
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•
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fluctuations in U.S. dollar value arising from transactions denominated in foreign currencies and the translation of certain foreign currency subsidiary balances;
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•
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difficulties in staffing and managing multi-national operations;
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•
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general economic and political uncertainties and potential for social unrest in countries in which we or our customers operate;
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•
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limitations on our ability to enforce legal rights and remedies;
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•
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restrictions on the repatriation of funds;
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•
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changes in trade policies;
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•
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tariff regulations;
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•
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difficulties in obtaining export and import licenses
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•
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the risk of government financed competition; and
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•
|
compliance with a variety of international laws as well as U.S. regulations, rules and practices affecting the activities of companies abroad.
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•
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our quarterly or annual earnings or those of our competitors;
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•
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the public’s reaction to our press releases, our other public announcements and our filings with the Securities and Exchange Commission;
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•
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changes in earnings estimates or recommendations by research analysts who track the stocks of our competitors;
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•
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new laws or regulations or new interpretations of laws or regulations applicable to our business;
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•
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changes in accounting standards, policies, guidance, interpretations or principles;
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•
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changes in general conditions in the domestic and global economies or financial markets, including those resulting from war, incidents of terrorism or responses to such events;
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•
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litigation involving our company or investigations or audits by regulators into the operations of our company or our competitors;
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•
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strategic action by our competitors;
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•
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sales of common stock by our directors, executive officers and significant shareholders; and
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•
|
our stock being closely held by insider holdings is thinly traded which impacts price volatility.
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•
|
SIFCO operates and manufactures in multiple facilities—(i) an owned 240,000 square foot facility located in Cleveland, Ohio, which is also the site of the Company’s corporate headquarters, (ii) a leased 450,000 square foot facility located in Alliance, Ohio, (iii) leased facilities aggregating approximately 67,000 square feet located in Orange and Long Beach, California, (iv) leased facilities aggregating approximately 18,000 square feet located in Colorado Springs, Colorado, and (vi) owned facilities aggregating approximately 91,000 square feet located in Maniago, Italy.
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•
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The Company owns a building located in Cork, Ireland (59,000 square feet) that is subject to a long-term lease arrangement with the acquirer of the Repair Group’s industrial turbine engine component repair business that was sold in June 2007.
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•
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Michael S. Lipscomb - Executive Officer through fiscal 2015.
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•
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James P. Woidke - Executive Officer through date of termination February 28, 2015.
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•
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Salvatore Incanno - Executive Officer starting on May 11, 2015 through fiscal 2015.
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•
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Catherine M. Kramer - Executive Officer through April 3, 2015.
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•
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Thomas R. Kubera - Interim CFO from April 3, 2015 to May 11, 2015.
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Name
|
Age
|
|
Title and Business Experience
|
Michael S. Lipscomb
|
69
|
|
Chief Executive officer since August 2009 and a director of the Company since April 2010 and Chairman of the Board since February 2015. Mr. Lipscomb previously served as a director of the Company from 2002 to 2006. Mr. Lipscomb is also currently the Chief Executive Officer of Aviation Component Solutions, a supplier of FAA-approved, second source replacement parts for commercial aircraft and engine components. Prior to joining the Company, Mr. Lipscomb was Chairman, President and Chief Executive Officer of Argo-Tech Corporation, which was acquired by Eaton Corporation in 2006, and was a leading maker of high-performance aerospace engine fuel pumps and systems, airframe fuel pumps and systems, and ground fueling for commercial and military aerospace markets, from 1994 to 2007, President from 1990 to 1994, Executive V.P. and Chief Operating Officer from 1988 to 1990, and Vice President of Operations from 1986, when Argo-Tech was formed, to 1988. In 1981, Mr. Lipscomb joined the corporate staff of TRW, a conglomerate manufacturer of industrial bearings in aerospace, automotive, energy and general industrial markets, currently a part of Northrop Grumman Corp., and was appointed Director of Operations for the Power Accessories Division of TRW in 1985. Mr. Lipscomb previously served as a director of Argo-Tech and AT Holdings Corporation from 1990 to 2007. He serves on the boards of Ruhlin Construction Company and Altra Holdings, Inc. He is a former board member of the Aerospace Industries Association and General Aviation Manufacturers Association, an organization that represents the U.S. aerospace and defense industry.
|
James P. Woidke
|
52
|
|
Executive Vice-President and Chief Operating Officer since March 2010 through February 2015. Prior to Mr. Woidke's departure, Mr. Woidke served as General Manager of SIFCO’s Forged Components Group since March, 2006. Prior to joining the Company, Mr. Woidke was the Director of Engineering and Quality as well as Business Unit Manager for Anchor Manufacturing Group, an automotive stamping and assembly manufacturer, from 2003 to 2006. From 1993 to 2003, Mr. Woidke held a number of different positions with Lake Erie Screw Corporation, a manufacturer of specialty fasteners, last serving as Director of Manufacturing Operations.
|
Salvatore Incanno
|
48
|
|
Vice President and Chief Financial Officer
since May 2015. Prior to joining SIFCO, Mr. Incanno was General Manager of Patch Rubber Company, a rubber manufacturer located in Weldon, NC and subsidiary of Myers Industries. From 2007 to 2015, Mr. Incanno served various roles at Myers Industries, a diversified manufacturing and distribution company, including Vice President of Corporate Development and Corporate Treasurer. Prior to Myers Industries, Mr. Incanno has held various Finance positions at The Reynolds & Reynolds Company, Compaq Computer Corp., and Conoco Inc.
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Catherine M. Kramer
|
42
|
|
Vice President, Finance and Chief Financial Officer since January 2013 through April 2015. Prior to Ms. Kramer's departure from SIFCO, Ms. Kramer served as Director of Financial Planning & Analysis of the Company. Prior to joining the Company, Ms. Kramer was Managing Director at Greenstar Capital, LLC, a private equity firm that invests in lower-middle market companies and provides management consulting services, from 2009 to 2012 and Vice President of Strategic Planning from 2007 to 2009. Ms. Kramer was Vice President of Corporate Strategic Planning from 2005 to 2007 and Manager of Finance from 2001 to 2005 at Argo-Tech Corporation, which was acquired by Eaton Corporation in 2006, and was a leading maker of high-performance aerospace engine fuel pumps and systems, airframe fuel pumps and systems, and ground fueling for commercial and military aerospace markets.
|
Thomas R. Kubera
|
56
|
|
Corporate Controller and Chief Accounting Officer since May 2014. Mr. Kubera served as interim Chief Financial Officer from April 2015 to May 2015. Prior to joining SIFCO, Mr. Kubera was previously at Cliffs Natural Resources, Inc. from April 2005 through April 2014, most recently as the Controller, Global Operations Services. He also held several assistant controller positions and was Senior Manager of External Reporting while at Cliffs Natural Resources, Inc.
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|
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For the Years Ended September 30,
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||||||||||||||||||
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|
2015 (a)
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2014
|
|
2013 (b)
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|
2012 (c)
|
|
2011 (d)
|
||||||||||
|
|
(Amounts in thousands, except per share data)
|
||||||||||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
109,301
|
|
|
$
|
119,654
|
|
|
$
|
116,001
|
|
|
$
|
102,900
|
|
|
$
|
107,357
|
|
Income (loss) from continuing operations
|
|
(3,581
|
)
|
|
5,603
|
|
|
9,758
|
|
|
6,307
|
|
|
7,449
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Per Share Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) per share from continuing operations - basic
|
|
$
|
(0.66
|
)
|
|
$
|
1.04
|
|
|
$
|
1.82
|
|
|
$
|
1.19
|
|
|
$
|
1.41
|
|
Income (loss) per share from continuing operations - diluted
|
|
$
|
(0.66
|
)
|
|
$
|
1.03
|
|
|
$
|
1.81
|
|
|
$
|
1.18
|
|
|
$
|
1.40
|
|
Cash dividends per share
|
|
$
|
—
|
|
|
$
|
0.20
|
|
|
$
|
0.20
|
|
|
$
|
0.20
|
|
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
|
$
|
156,689
|
|
|
$
|
109,697
|
|
|
$
|
105,765
|
|
|
$
|
106,545
|
|
|
$
|
80,011
|
|
Long term debt, net of current maturities
|
|
38,426
|
|
|
8,429
|
|
|
7,381
|
|
|
19,683
|
|
|
1,186
|
|
a.
|
On July 1, 2015, the Company completed the purchase of the forging business of C*Blade.
|
b.
|
In the fourth quarter of fiscal 2013, the Company decided to exit the Turbine Component Service and Repair business. On July 23, 2013, the Company completed the purchase of the forging business and substantially all related operating assets from MW General, Inc. On December 10, 2012, the Company completed the divestiture of its Applied Surface Concepts business.
|
c.
|
On October 28, 2011, the Company completed the purchase of the forging business and substantially all related operating assets from GEL Industries, Inc.
|
d.
|
On December 10, 2010, the Company completed the purchase of the forging business and substantially all related operating assets from T&W Forge, Inc.
|
•
|
Neither EBITDA nor Adjusted EBITDA reflects the interest expense, or the cash requirements necessary to service interest payments, on indebtedness;
|
•
|
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;
|
•
|
The omission of the substantial amortization expense associated with the Company’s intangible assets further limits the usefulness of EBITDA and Adjusted EBITDA; and
|
•
|
Neither EBITDA nor Adjusted EBITDA includes the payment of taxes, which is a necessary element of operations.
|
(Dollars in thousands)
|
Years Ended September 30,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net income (loss)
|
$
|
(2,872
|
)
|
|
$
|
5,023
|
|
|
$
|
10,234
|
|
Less: Income (loss) from discontinued operations, net of tax
|
709
|
|
|
(580
|
)
|
|
476
|
|
|||
Income (loss) from continuing operations
|
(3,581
|
)
|
|
5,603
|
|
|
9,758
|
|
|||
Adjustments:
|
|
|
|
|
|
||||||
Depreciation and amortization expense
|
8,293
|
|
|
6,896
|
|
|
5,725
|
|
|||
Interest expense, net
|
574
|
|
|
184
|
|
|
318
|
|
|||
Income tax provision (benefit)
|
(2,444
|
)
|
|
2,753
|
|
|
4,088
|
|
|||
EBITDA
|
2,842
|
|
|
15,436
|
|
|
19,889
|
|
|||
Adjustments:
|
|
|
|
|
|
||||||
Foreign currency exchange (gain) loss, net (1)
|
215
|
|
|
(20
|
)
|
|
23
|
|
|||
Other income, net (2)
|
(507
|
)
|
|
(433
|
)
|
|
(421
|
)
|
|||
Loss (gain) on disposal of operating assets (3)
|
63
|
|
|
(3
|
)
|
|
(89
|
)
|
|||
Inventory purchase accounting adjustments (4)
|
412
|
|
|
—
|
|
|
286
|
|
|||
Non-recurring severance expense (5)
|
964
|
|
|
—
|
|
|
813
|
|
|||
Equity compensation expense (6)
|
730
|
|
|
1,572
|
|
|
126
|
|
|||
Pension settlement expense (7)
|
—
|
|
|
—
|
|
|
248
|
|
|||
Acquisition transaction-related expenses (8)
|
2,681
|
|
|
920
|
|
|
197
|
|
|||
LIFO impact (9)
|
629
|
|
|
140
|
|
|
(1,560
|
)
|
|||
Orange expansion (10)
|
631
|
|
|
—
|
|
|
—
|
|
|||
Adjusted EBITDA
|
$
|
8,660
|
|
|
$
|
17,612
|
|
|
$
|
19,512
|
|
(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.
|
(2)
|
Represents miscellaneous non-operating income or expense, primarily rental income from the Company's Irish subsidiary.
|
(3)
|
Represents the difference between the proceeds from the sale of operating equipment and the carrying value shown on the Company’s books.
|
(4)
|
Represents accounting adjustments to value inventory at fair market value associated with the acquisition of a business that was charged to cost of goods sold when the inventory was sold.
|
(5)
|
Represents severance expense related to the departure of an executive officer. Included in the $964 for fiscal 2015 is $233 of equity based compensation expense recognized by the Company under its 2007 Long-Term Incentive Plan. Included in the $813 for fiscal 2013 is $155 of equity-based compensation expense recognized by the Company under its 2007 Long-term Incentive Plan.
|
(6)
|
Represents the equity-based compensation expense recognized by the Company under its 2007 Long-term Incentive Plan.
|
(7)
|
Represents expense incurred by a defined benefit pension plan related to settlement of pension obligations.
|
(8)
|
Represents transaction-related costs such as legal, financial, tax due diligence expenses, valuation services, costs, and executive travel that are required to be expensed as incurred.
|
(9)
|
Represents the increase (decrease) in the reserve for inventories for which cost is determined using the last in, first out ("LIFO") method. Included in the $140 for fiscal 2014 is an increase in the E&O reserve related to LIFO of $238, partially offset by a decrease in the LIFO inventory reserve of $98.
|
(10)
|
Represents costs related to expansion of one of the plant locations that are required to be expensed as incurred.
|
(Dollars in millions)
|
Years Ended
September 30,
|
|
Increase
(Decrease)
|
||||||||
Net Sales
|
2015
|
|
2014
|
|
|||||||
Aerospace components for:
|
|
|
|
|
|
||||||
Fixed wing aircraft
|
$
|
58.7
|
|
|
$
|
61.2
|
|
|
$
|
(2.5
|
)
|
Rotorcraft
|
23.2
|
|
|
31.9
|
|
|
(8.7
|
)
|
|||
Energy components for power generation units
|
15.4
|
|
|
18.6
|
|
|
(3.2
|
)
|
|||
Commercial product and other revenue
|
12.0
|
|
|
8.0
|
|
|
4.0
|
|
|||
Total
|
$
|
109.3
|
|
|
$
|
119.7
|
|
|
$
|
(10.4
|
)
|
|
Weighted Average
Interest Rate
Years Ended September 30,
|
|
Weighted Average
Outstanding Balance
Years Ended September 30,
|
||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||
Revolving credit agreement
|
2.1
|
%
|
|
1.0
|
%
|
|
$ 13.4 million
|
|
$ 2.5 million
|
Term note
|
3.3
|
%
|
|
2.9
|
%
|
|
$ 8.0 million
|
|
$ 4.9 million
|
Foreign term debt
|
2.3
|
%
|
|
—
|
%
|
|
$ 13.2 million
|
|
$ 0.0 million
|
Promissory note
|
—
|
%
|
|
2.0
|
%
|
|
$ 0.0 million
|
|
$ 0.4 million
|
(Dollars in millions)
|
Years Ended
September 30,
|
|
Increase
(Decrease)
|
||||||||
Net Sales
|
2014
|
|
2013
|
|
|||||||
Aerospace components for:
|
|
|
|
|
|
||||||
Fixed wing aircraft
|
$
|
61.2
|
|
|
$
|
57.7
|
|
|
$
|
3.5
|
|
Rotorcraft
|
31.9
|
|
|
32.5
|
|
|
(0.6
|
)
|
|||
Energy components for power generation units
|
18.6
|
|
|
19.4
|
|
|
(0.8
|
)
|
|||
Commercial product and other revenue
|
8.0
|
|
|
6.4
|
|
|
1.6
|
|
|||
Total
|
$
|
119.7
|
|
|
$
|
116.0
|
|
|
$
|
3.7
|
|
|
Weighted Average
Interest Rate
Years Ended September 30,
|
|
We
ighted Average
Outstanding Balance
Years Ended September 30,
|
||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||
Revolving credit agreement
|
1.0
|
%
|
|
1.1
|
%
|
|
$ 2.5 million
|
|
$ 4.0 million
|
Term note
|
2.9
|
%
|
|
2.9
|
%
|
|
$ 4.9 million
|
|
$ 7.2 million
|
Promissory note
|
2.0
|
%
|
|
2.0
|
%
|
|
$ 0.4 million
|
|
$ 2.4 million
|
Contractual Obligations
|
Payments due by period (in thousands)
|
||||||||||||||
Total
|
Less than
1 year
|
1-3 years
|
3-5 years
|
More than
5 years
|
|||||||||||
Long-term debt obligations
|
$
|
43,812
|
|
$
|
5,233
|
|
$
|
10,132
|
|
$
|
28,447
|
|
$
|
—
|
|
Short-term debt obligations
|
5,170
|
|
5,170
|
|
—
|
|
—
|
|
—
|
|
|||||
Interest on debt obligations (1)
|
2,233
|
|
514
|
|
760
|
|
959
|
|
—
|
|
|||||
Capital Lease Obligations
|
252
|
|
100
|
|
106
|
|
46
|
|
—
|
|
|||||
Operating lease obligations
|
9,684
|
|
1,005
|
|
1,397
|
|
1,029
|
|
6,253
|
|
|||||
Other Long-term liabilities reflected on the Registrant's Balance Sheet under GAAP (2)
|
688
|
|
688
|
|
—
|
|
—
|
|
—
|
|
|||||
Total
|
$
|
61,839
|
|
$
|
12,710
|
|
$
|
12,395
|
|
$
|
30,481
|
|
$
|
6,253
|
|
|
|
Years Ended September 30,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net sales
|
|
$
|
109,301
|
|
|
$
|
119,654
|
|
|
$
|
116,001
|
|
Cost of goods sold
|
|
93,569
|
|
|
94,325
|
|
|
88,643
|
|
|||
Gross profit
|
|
15,732
|
|
|
25,329
|
|
|
27,358
|
|
|||
Selling, general and administrative expenses
|
|
19,167
|
|
|
15,084
|
|
|
11,605
|
|
|||
Amortization of intangible assets
|
|
2,245
|
|
|
2,161
|
|
|
2,076
|
|
|||
Loss (Gain) on disposal or impairment of operating assets
|
|
63
|
|
|
(3
|
)
|
|
(89
|
)
|
|||
Operating (loss) income
|
|
(5,743
|
)
|
|
8,087
|
|
|
13,766
|
|
|||
Interest income
|
|
(10
|
)
|
|
(17
|
)
|
|
(24
|
)
|
|||
Interest expense
|
|
584
|
|
|
201
|
|
|
342
|
|
|||
Foreign currency exchange (gain) loss, net
|
|
215
|
|
|
(20
|
)
|
|
23
|
|
|||
Other income, net
|
|
(507
|
)
|
|
(433
|
)
|
|
(421
|
)
|
|||
Income (loss) from continuing operations before income tax (benefit) provision
|
|
(6,025
|
)
|
|
8,356
|
|
|
13,846
|
|
|||
Income tax (benefit) provision
|
|
(2,444
|
)
|
|
2,753
|
|
|
4,088
|
|
|||
Income (loss) from continuing operations
|
|
(3,581
|
)
|
|
5,603
|
|
|
9,758
|
|
|||
Income (loss) from discontinued operations, net of tax
|
|
709
|
|
|
(580
|
)
|
|
476
|
|
|||
Net income (loss)
|
|
$
|
(2,872
|
)
|
|
$
|
5,023
|
|
|
$
|
10,234
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
Income (loss) per share from continuing operations
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
(0.66
|
)
|
|
$
|
1.04
|
|
|
$
|
1.82
|
|
Diluted
|
|
$
|
(0.66
|
)
|
|
$
|
1.03
|
|
|
$
|
1.81
|
|
|
|
|
|
|
|
|
||||||
Income (loss) per share from discontinued operations, net of tax
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
0.13
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.09
|
|
Diluted
|
|
$
|
0.13
|
|
|
$
|
(0.11
|
)
|
|
$
|
0.09
|
|
|
|
|
|
|
|
|
||||||
Net income (loss) per share
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
(0.53
|
)
|
|
$
|
0.93
|
|
|
$
|
1.91
|
|
Diluted
|
|
$
|
(0.53
|
)
|
|
$
|
0.92
|
|
|
$
|
1.90
|
|
|
|
|
|
|
|
|
||||||
Weighted-average number of common shares (basic)
|
|
5,438
|
|
|
5,402
|
|
|
5,363
|
|
|||
Weighted-average number of common shares (diluted)
|
|
5,438
|
|
|
5,424
|
|
|
5,401
|
|
|
|
Years Ended September 30,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net income (loss)
|
|
$
|
(2,872
|
)
|
|
$
|
5,023
|
|
|
$
|
10,234
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustment, net of tax $0, $0, and $0, respectively
|
|
120
|
|
|
—
|
|
|
(284
|
)
|
|||
Retirement plan liability adjustment, net of tax $850, $502, and $1,712, respectively
|
|
(1,500
|
)
|
|
(891
|
)
|
|
2,854
|
|
|||
Interest rate swap agreement adjustment, net of tax $0, ($14), and $16, respectively
|
|
5
|
|
|
21
|
|
|
31
|
|
|||
Comprehensive income (loss)
|
|
$
|
(4,247
|
)
|
|
$
|
4,153
|
|
|
$
|
12,835
|
|
|
|
September 30,
|
||||||
|
|
2015
|
|
2014
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
667
|
|
|
$
|
4,596
|
|
Receivables, net of allowance for doubtful accounts of $1,127 and $333, respectively
|
|
36,024
|
|
|
25,915
|
|
||
Inventories, net
|
|
27,943
|
|
|
18,919
|
|
||
Refundable income taxes
|
|
2,516
|
|
|
410
|
|
||
Deferred income taxes
|
|
2,785
|
|
|
791
|
|
||
Prepaid expenses and other current assets
|
|
1,600
|
|
|
1,878
|
|
||
Current assets of business held for sale
|
|
—
|
|
|
264
|
|
||
Current assets of business from discontinued operations
|
|
—
|
|
|
128
|
|
||
Total current assets
|
|
71,535
|
|
|
52,901
|
|
||
Property, plant and equipment, net
|
|
54,865
|
|
|
37,148
|
|
||
Intangible assets, net
|
|
13,265
|
|
|
11,490
|
|
||
Goodwill
|
|
16,480
|
|
|
7,658
|
|
||
Other assets
|
|
544
|
|
|
500
|
|
||
Total assets
|
|
$
|
156,689
|
|
|
$
|
109,697
|
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Current maturities of long-term debt
|
|
$
|
10,503
|
|
|
$
|
2,000
|
|
Accounts payable
|
|
14,201
|
|
|
10,526
|
|
||
Accrued liabilities
|
|
8,446
|
|
|
6,432
|
|
||
Current liabilities of business from discontinued operations
|
|
—
|
|
|
196
|
|
||
Total current liabilities
|
|
33,150
|
|
|
19,154
|
|
||
Long-term debt, net of current maturities
|
|
38,426
|
|
|
8,429
|
|
||
Deferred income taxes
|
|
4,849
|
|
|
774
|
|
||
Pension liability
|
|
6,743
|
|
|
4,331
|
|
||
Other long-term liabilities
|
|
452
|
|
|
389
|
|
||
Shareholders’ equity:
|
|
|
|
|
||||
Serial preferred shares, no par value, authorized 1,000 shares
|
|
—
|
|
|
—
|
|
||
Common shares, par value $1 per share, authorized 10,000 shares; issued and outstanding shares – 5,468 at September 30, 2015 and 5,448 at September 30, 2014
|
|
5,468
|
|
|
5,448
|
|
||
Additional paid-in capital
|
|
9,778
|
|
|
9,102
|
|
||
Retained earnings
|
|
69,811
|
|
|
72,683
|
|
||
Accumulated other comprehensive loss
|
|
(11,988
|
)
|
|
(10,613
|
)
|
||
Total shareholders’ equity
|
|
73,069
|
|
|
76,620
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
156,689
|
|
|
$
|
109,697
|
|
(Amounts in thousands)
|
|
Years Ended September 30,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net (loss) income
|
|
$
|
(2,872
|
)
|
|
$
|
5,023
|
|
|
$
|
10,234
|
|
(Income) loss from discontinued operations, net of tax
|
|
(709
|
)
|
|
580
|
|
|
(476
|
)
|
|||
Adjustments to reconcile net (loss) income to net cash provided by (used for) operating activities:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
8,293
|
|
|
6,896
|
|
|
5,725
|
|
|||
Amortization of debt issuance cost
|
|
37
|
|
|
—
|
|
|
—
|
|
|||
Gain on disposal of operating assets
|
|
(10
|
)
|
|
(3
|
)
|
|
(89
|
)
|
|||
LIFO expense (income)
|
|
629
|
|
|
(98
|
)
|
|
(1,560
|
)
|
|||
Share transactions under employee stock plan
|
|
696
|
|
|
1,540
|
|
|
117
|
|
|||
Deferred income taxes
|
|
(1,092
|
)
|
|
(762
|
)
|
|
1,165
|
|
|||
Purchase price inventory adjustment
|
|
412
|
|
|
—
|
|
|
286
|
|
|||
Asset impairment charges
|
|
—
|
|
|
—
|
|
|
(72
|
)
|
|||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
||||||
Receivables
|
|
(3,302
|
)
|
|
(1,104
|
)
|
|
(4,752
|
)
|
|||
Inventories
|
|
(3,553
|
)
|
|
(481
|
)
|
|
694
|
|
|||
Refundable income taxes
|
|
(2,106
|
)
|
|
(410
|
)
|
|
—
|
|
|||
Prepaid expenses and other current assets
|
|
681
|
|
|
(111
|
)
|
|
(636
|
)
|
|||
Other assets
|
|
333
|
|
|
740
|
|
|
(532
|
)
|
|||
Accounts payable
|
|
1,909
|
|
|
1,305
|
|
|
(2,475
|
)
|
|||
Accrued liabilities
|
|
(1,123
|
)
|
|
(1,246
|
)
|
|
969
|
|
|||
Other long-term liabilities
|
|
506
|
|
|
(865
|
)
|
|
(799
|
)
|
|||
Net cash provided by (used for) operating activities of continuing operations
|
|
(1,271
|
)
|
|
11,004
|
|
|
7,799
|
|
|||
Net cash provided by (used for) operating activities of discontinued operations
|
|
(516
|
)
|
|
393
|
|
|
(438
|
)
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Acquisition of businesses
|
|
(16,994
|
)
|
|
—
|
|
|
(4,387
|
)
|
|||
Proceeds from disposal of property, plant and equipment
|
|
2
|
|
|
—
|
|
|
164
|
|
|||
Capital expenditures
|
|
(8,812
|
)
|
|
(9,838
|
)
|
|
(3,418
|
)
|
|||
Net cash used for investing activities of continuing operations
|
|
(25,804
|
)
|
|
(9,838
|
)
|
|
(7,641
|
)
|
|||
Net cash provided by investing activities of discontinued operations
|
|
1,422
|
|
|
950
|
|
|
8,642
|
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Proceeds from term note
|
|
20,000
|
|
|
—
|
|
|
—
|
|
|||
Repayments of term note
|
|
(5,441
|
)
|
|
(4,392
|
)
|
|
(2,000
|
)
|
|||
Proceeds from revolving credit agreement
|
|
58,802
|
|
|
40,992
|
|
|
52,386
|
|
|||
Repayments of revolving credit agreement
|
|
(48,731
|
)
|
|
(37,944
|
)
|
|
(60,343
|
)
|
|||
Short-term debt borrowings
|
|
1,030
|
|
|
—
|
|
|
—
|
|
|||
Short-term debt repayments
|
|
(1,300
|
)
|
|
—
|
|
|
—
|
|
|||
Payments for debt financing
|
|
(724
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from exercise of stock options
|
|
—
|
|
|
4
|
|
|
—
|
|
|||
Dividends paid
|
|
(1,090
|
)
|
|
(1,081
|
)
|
|
(1,073
|
)
|
|||
Net cash provided by (used for) financing activities of continuing operations
|
|
22,546
|
|
|
(2,421
|
)
|
|
(11,030
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
|
(3,623
|
)
|
|
88
|
|
|
(2,668
|
)
|
|||
Cash and cash equivalents at beginning of year
|
|
4,596
|
|
|
4,508
|
|
|
7,176
|
|
|||
Effects of exchange rate changes on cash and cash equivalents
|
|
(306
|
)
|
|
—
|
|
|
—
|
|
|||
Cash and cash equivalents at end of year
|
|
$
|
667
|
|
|
$
|
4,596
|
|
|
$
|
4,508
|
|
(Amounts in thousands)
|
|
Years Ended September 30,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Cash paid during the year:
|
|
|
|
|
|
|
||||||
Cash paid for interest
|
|
$
|
(613
|
)
|
|
$
|
(205
|
)
|
|
$
|
(301
|
)
|
Cash paid for income taxes, net
|
|
$
|
(679
|
)
|
|
$
|
(3,283
|
)
|
|
$
|
(4,906
|
)
|
Non-cash investing and financing transactions:
|
|
|
|
|
|
|
||||||
Dividends declared but not paid
|
|
$
|
—
|
|
|
$
|
(1,090
|
)
|
|
$
|
(1,081
|
)
|
Additions to property, plant & equipment - incurred but not yet paid
|
|
$
|
458
|
|
|
$
|
2,410
|
|
|
$
|
—
|
|
|
|
Common
Shares
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
Shareholders’
Equity
|
||||||||||
Balance - September 30, 2012
|
|
$
|
5,366
|
|
|
$
|
7,523
|
|
|
$
|
59,597
|
|
|
$
|
(12,344
|
)
|
|
$
|
60,142
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
|
—
|
|
|
—
|
|
|
10,234
|
|
|
—
|
|
|
10,234
|
|
|||||
Foreign currency translation adjustment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(284
|
)
|
|
(284
|
)
|
|||||
Retirement liability adjustment, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,854
|
|
|
2,854
|
|
|||||
Interest rate swap agreement adjustment, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|
31
|
|
|||||
Dividend declared
|
|
—
|
|
|
—
|
|
|
(1,081
|
)
|
|
—
|
|
|
(1,081
|
)
|
|||||
Performance and restricted share expense
|
|
—
|
|
|
298
|
|
|
—
|
|
|
—
|
|
|
298
|
|
|||||
Share transactions under employee stock plans
|
|
41
|
|
|
(222
|
)
|
|
—
|
|
|
—
|
|
|
(181
|
)
|
|||||
Balance - September 30, 2013
|
|
$
|
5,407
|
|
|
$
|
7,599
|
|
|
$
|
68,750
|
|
|
$
|
(9,743
|
)
|
|
$
|
72,013
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
|
—
|
|
|
—
|
|
|
5,023
|
|
|
—
|
|
|
5,023
|
|
|||||
Retirement liability adjustment, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(891
|
)
|
|
(891
|
)
|
|||||
Interest rate swap agreement adjustment, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|
21
|
|
|||||
Dividend declared
|
|
—
|
|
|
—
|
|
|
(1,090
|
)
|
|
—
|
|
|
(1,090
|
)
|
|||||
Performance and restricted share expense
|
|
—
|
|
|
1,801
|
|
|
—
|
|
|
—
|
|
|
1,801
|
|
|||||
Share transactions under employee stock plans
|
|
41
|
|
|
(298
|
)
|
|
—
|
|
|
—
|
|
|
(257
|
)
|
|||||
Balance - September 30, 2014
|
|
$
|
5,448
|
|
|
$
|
9,102
|
|
|
$
|
72,683
|
|
|
$
|
(10,613
|
)
|
|
$
|
76,620
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss
|
|
|
|
|
—
|
|
|
(2,872
|
)
|
|
—
|
|
|
(2,872
|
)
|
|||||
Foreign currency translation adjustment
|
|
—
|
|
|
—
|
|
|
|
|
|
120
|
|
|
120
|
|
|||||
Retirement liability adjustment, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,500
|
)
|
|
(1,500
|
)
|
|||||
Interest rate swap agreement adjustment, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
|||||
Performance and restricted share expense
|
|
—
|
|
|
963
|
|
|
—
|
|
|
—
|
|
|
963
|
|
|||||
Share transactions under employee stock plans
|
|
20
|
|
|
(287
|
)
|
|
—
|
|
|
—
|
|
|
(267
|
)
|
|||||
Balance - September 30, 2015
|
|
$
|
5,468
|
|
|
$
|
9,778
|
|
|
$
|
69,811
|
|
|
$
|
(11,988
|
)
|
|
$
|
73,069
|
|
|
|
2015
|
|
2014
|
||||
Property, plant and equipment :
|
|
|
|
|
||||
Land
|
|
$
|
975
|
|
|
$
|
469
|
|
Buildings
|
|
15,446
|
|
|
11,546
|
|
||
Machinery and equipment
|
|
80,687
|
|
|
61,587
|
|
||
Total property, plant and equipment
|
|
97,108
|
|
|
73,602
|
|
||
Accumulated depreciation
|
|
42,243
|
|
|
36,454
|
|
||
Property, plant and equipment, net
|
|
$
|
54,865
|
|
|
$
|
37,148
|
|
|
|
September 30,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Income (loss) from continuing operations
|
|
$
|
(3,581
|
)
|
|
$
|
5,603
|
|
|
$
|
9,758
|
|
Income (loss) from discontinued operations, net of tax
|
|
709
|
|
|
(580
|
)
|
|
476
|
|
|||
Net income (loss)
|
|
$
|
(2,872
|
)
|
|
$
|
5,023
|
|
|
$
|
10,234
|
|
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding (basic)
|
|
5,438
|
|
|
5,402
|
|
|
5,363
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
|
||||||
Stock options
|
|
—
|
|
|
—
|
|
|
1
|
|
|||
Restricted shares
|
|
—
|
|
|
18
|
|
|
12
|
|
|||
Performance shares
|
|
—
|
|
|
4
|
|
|
25
|
|
|||
Weighted-average common shares outstanding (diluted)
|
|
5,438
|
|
|
5,424
|
|
|
5,401
|
|
|||
Net income (loss) per share – basic
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
(0.66
|
)
|
|
$
|
1.04
|
|
|
$
|
1.82
|
|
Discontinued operations
|
|
0.13
|
|
|
(0.11
|
)
|
|
0.09
|
|
|||
Net income (loss)
|
|
$
|
(0.53
|
)
|
|
$
|
0.93
|
|
|
$
|
1.91
|
|
Net income (loss) per share – diluted:
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
(0.66
|
)
|
|
$
|
1.03
|
|
|
$
|
1.81
|
|
Discontinued operations
|
|
0.13
|
|
|
(0.11
|
)
|
|
0.09
|
|
|||
Net income (loss)
|
|
$
|
(0.53
|
)
|
|
$
|
0.92
|
|
|
$
|
1.90
|
|
Anti-dilutive weighted-average common shares excluded from calculation of diluted earnings per share
|
|
27
|
|
|
18
|
|
|
47
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Foreign currency translation adjustment, net of income tax benefit of $0, $0 and $0, respectively
|
$
|
(5,731
|
)
|
|
$
|
(5,851
|
)
|
|
$
|
(5,851
|
)
|
Net retirement plan liability adjustment, net of income tax benefit of ($3,758), ($2,909) and ($2,409), respectively
|
(6,257
|
)
|
|
(4,757
|
)
|
|
(3,866
|
)
|
|||
Interest rate swap agreement, net of income tax benefit of $0, $1 and $16, respectively
|
—
|
|
|
(5
|
)
|
|
(26
|
)
|
|||
Total accumulated other comprehensive loss
|
$
|
(11,988
|
)
|
|
$
|
(10,613
|
)
|
|
$
|
(9,743
|
)
|
|
Foreign Currency Translation Adjustment
|
|
Retirement Plan Liability adjustment
|
|
Interest rates swap adjustment
|
|
Accumulated Other Comprehensive Loss
|
||||||||
Balance at September 30, 2013
|
$
|
(5,851
|
)
|
|
$
|
(3,866
|
)
|
|
$
|
(26
|
)
|
|
$
|
(9,743
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
|
|
(1,179
|
)
|
|
21
|
|
|
(1,158
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
288
|
|
|
—
|
|
|
288
|
|
||||
Net current-period other comprehensive income
|
$
|
—
|
|
|
$
|
(891
|
)
|
|
$
|
21
|
|
|
$
|
(870
|
)
|
|
|
|
|
|
|
|
|
||||||||
Balance at September 30, 2014
|
$
|
(5,851
|
)
|
|
$
|
(4,757
|
)
|
|
$
|
(5
|
)
|
|
$
|
(10,613
|
)
|
Other comprehensive income (loss) before reclassifications
|
120
|
|
|
(1,846
|
)
|
|
5
|
|
|
(1,721
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
|
346
|
|
|
—
|
|
|
346
|
|
||||
Net current-period other comprehensive income
|
120
|
|
|
(1,500
|
)
|
|
5
|
|
|
(1,375
|
)
|
||||
Balance at September 30, 2015
|
$
|
(5,731
|
)
|
|
$
|
(6,257
|
)
|
|
$
|
—
|
|
|
$
|
(11,988
|
)
|
|
|
Amount reclassified from accumulated other comprehensive loss
|
|
|
||||||
Details about accumulated other comprehensive loss components
|
|
2015
|
|
2014
|
|
Affected line item in the Consolidated Statement of Operations
|
||||
|
|
|
|