What changed in this filing

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Item 1. Financial Statements

2024-05-09 compared with 2024-02-14 · 160 added, 79 removed, 439 unchanged (35% of the section changed)

5 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2024 2023 2024 2023

Net sales $ 26,543 $ 19,242 $ 47,595 $ 40,541

3 unchanged sentences

Amortization of intangible assets 41 63 81 124

Gain on disposal of operating assets — ( 11 )

Loss on disposal of operating assets 3 14 3 3

Operating loss ( 525 ) ( 2,206 ) ( 3,410 ) ( 4,275 )

Interest expense, net 963 339 1,393 614

Foreign currency exchange loss (gain), net 4 ( 3 )

Other expense, net 53 182

Foreign currency exchange loss, net 3 12 7 9

Other expense (income), net 52 ( 218 ) 105 ( 35 )

Loss before income tax expense ( 1,543 ) ( 2,339 ) ( 4,915 ) ( 4,863 )

9 unchanged sentences

and Subsidiaries

Consolidated Condensed Statements of Comprehensive (Loss) Income

Consolidated Condensed Statements of Comprehensive Loss

(Amounts in thousands)

Three Months Ended

March 31, Six Months Ended

2024 2023 2024 2023

Net loss $ ( 1,590 ) $ ( 2,367 ) $ ( 5,013 ) $ ( 4,956 )

Other comprehensive loss:

Foreign currency translation adjustment, net of tax 253 342

Foreign currency translation (loss) gain, net of tax ( 128 ) 74 125 416

Retirement plan liability adjustment, net of tax 43 74 86 152

Other — — 1 1

Comprehensive loss $ ( 1,675 ) $ ( 2,219 ) $ ( 4,801 ) $ ( 4,387 )

7 unchanged sentences

Cash and cash equivalents $ 747 $ 368

Receivables, net of allowance for doubtful accounts of $ 121 and $ 242 , respectively

Short-term investments 1,730 —

Receivables, net of allowance for credit losses of $ 131 and $ 242 , respectively

23,125 20,196

17 unchanged sentences

Accounts payable 17,683 13,497

Accrued liabilities 8,852 6,477

Accrued liabilities ($ 760 is related party)

Total current liabilities 52,782 40,952

6 unchanged sentences

Serial preferred shares, no par value, authorized 1,000 shares;

0 shares issued and outstanding at December 31, 2023 and September 30, 2023

0 shares issued and outstanding at March 31, 2024 and September 30, 2023

Common shares, par value $ 1 per share, authorized 10,000 shares;

issued and outstanding shares 6,160 at December 31, 2023 and 6,105 at September 30, 2023

issued and outstanding shares 6,190 at March 31, 2024 and 6,105 at September 30, 2023

Additional paid-in capital 11,663 11,626

8 unchanged sentences

(Unaudited, Amounts in thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

Net loss $ ( 5,013 ) $ ( 4,956 )

Adjustments to reconcile net loss to net cash (used for) provided by operating activities:

Adjustments to reconcile net loss to net cash used for operating activities:

Depreciation and amortization 3,068 3,198

Amortization of debt issuance costs 352 20

Gain on disposal of operating assets — ( 11 )

Loss on disposal of operating assets 3 3

Loss on insurance proceeds received for non-property claim — 110

2 unchanged sentences

Inventory valuation accounts 666 ( 1,657 )

Interest added to promissory note - related party (paid-in-kind) 106 —

Other long-term liabilities 106 ( 256 )

9 unchanged sentences

Accrued income and other taxes 235 178

Net cash (used for) provided by operating activities ( 2,137 ) 292

Net cash used for operating activities ( 5,348 ) ( 373 )

Cash flows from investing activities:

1 unchanged sentence

Capital expenditures ( 1,314 ) ( 1,435 )

Purchase of short-term investments ( 1,747 ) —

Net cash used for investing activities ( 3,061 ) ( 1,419 )

15 unchanged sentences

Cash paid for interest $ ( 871 ) $ ( 550 )

Cash paid for income taxes, net $ ( 19 ) $ ( 16 )

Non-cash investing activities:

2 unchanged sentences

Debt issuance cost due at maturity - related party $ 910 $ —

Interest added to promissory note - related party (paid-in-kind) $ 106 $ —

See notes to unaudited consolidated condensed financial statements.

3 unchanged sentences

(Unaudited, Amounts in thousands )

Three Months Ended

December 31, 2023

Six Months Ended

March 31, 2024

Common Additional

8 unchanged sentences

Share transactions under equity-based plans 85 85 ( 134 ) — — ( 49 )

Balance - December 31, 2023 6,160 $ 6,160 $ 11,609 $ 19,842 $ ( 6,364 ) $ 31,247

Balance - March 31, 2024 6,190 $ 6,190 $ 11,663 $ 18,252 $ ( 6,449 ) $ 29,656

Three Months Ended

December 31, 2022

March 31, 2024

Common Additional

4 unchanged sentences

Shares Amount

Balance - December 31, 2023 6,160 $ 6,160 $ 11,609 $ 19,842 $ ( 6,364 ) $ 31,247

Comprehensive loss — — — ( 1,590 ) ( 85 ) ( 1,675 )

Performance and restricted share expense — — 84 — — 84

Share transactions under equity-based plans 30 30 ( 30 ) — — —

Balance - March 31, 2024 6,190 $ 6,190 $ 11,663 $ 18,252 $ ( 6,449 ) $ 29,656

Six Months Ended

March 31, 2023

Common Additional

Capital Retained

Earnings Accumulated

Comprehensive

Shareholders’

Shares Amount

Balance - September 30, 2022 6,040 $ 6,040 $ 11,387 $ 31,956 $ ( 8,693 ) $ 40,690

2 unchanged sentences

Share transactions under equity-based plans 68 68 ( 139 ) — — ( 71 )

Balance - March 31, 2023 6,108 $ 6,108 $ 11,455 $ 27,000 $ ( 8,124 ) $ 36,439

Three Months Ended

March 31, 2023

Common Additional

Capital Retained

Earnings Accumulated

Comprehensive

Shareholders’

Shares Amount

Balance - December 31, 2022 6,072 $ 6,072 $ 11,406 $ 29,367 $ ( 8,272 ) $ 38,573

Comprehensive (loss) income — — — ( 2,367 ) 148 ( 2,219 )

Performance and restricted share expense — — 85 — — 85

Share transactions under equity-based plans 36 36 ( 36 ) — — —

Balance - March 31, 2023 6,108 $ 6,108 $ 11,455 $ 27,000 $ ( 8,124 ) $ 36,439

See notes to unaudited consolidated condensed financial statements.

8 unchanged sentences

All significant intercompany accounts and transactions have been eliminated in consolidation.

dollar is the functional currency for all of the Company’s operations in the United States ("U.S.") and its non-operating subsidiaries.

For these operations, all gains and losses from completed currency transactions are included in income (loss).

The functional currency for the Company's non-U.S.

The United States ("U.S.") dollar is the functional currency for all of the Company’s operations in the U.S.

and its non-operating subsidiaries.

For these operations, all gains and losses from completed currency transactions are included in net loss.

The functional currency for the Company's other non-U.S.

subsidiaries is the Euro.

8 unchanged sentences

A summary of the Company’s significant accounting policies is included in Note 1 to the audited consolidated financial statements of the Company's Annual Report on Form 10-K for the year ended September 30, 2023.

Short-term Investments

In general, short-term investments have a maturity of three months to one year at the date of purchase.

Short-term investments classified as held-to-maturity are recorded at cost, which approximates fair value.

Accounts Receivable and Allowance for Credit Losses

Accounts receivable represent the Company’s unconditional rights to consideration, subject to the payment terms of the contract, for which only the passage of time is required before payment.

Unbilled receivables are reflected under contract assets on the consolidated condensed balance sheets.

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.

Allowance for credit losses:

Three Months Ended

March 31, 2024 Six Months Ended

March 31, 2024

Opening allowance for credit losses $ ( 121 ) $ ( 242 )

Changes in estimate ( 21 ) 100

Write-offs 11 11

Recoveries — —

Total allowance for credit losses $ ( 131 ) $ ( 131 )

Net Loss per Share

4 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2024 2023 2024 2023

Net loss $ ( 1,590 ) $ ( 2,367 ) $ ( 5,013 ) $ ( 4,956 )

7 unchanged sentences

Second, if management concludes that substantial doubt is raised, management is required to consider whether its plans that are not yet fully implemented are probable of both being implemented and effective in alleviating that doubt.

In the event substantial doubt is raised, disclosures in the notes to the consolidated condensed financial statements of management’s plans and management’s conclusion as to whether

the substantial doubt exists or has been alleviated are required.

In the event substantial doubt is raised, disclosures in the notes to the consolidated condensed financial statements of management’s plans and management’s conclusion as to whether the substantial doubt exists or has been alleviated are required.

The consolidated condensed financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets, or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

3 unchanged sentences

The Company continues to evaluate available financial alternatives, including obtaining acceptable alternative financing.

The Company cannot provide assurances that it will be successful in restructuring the existing debt obligations, obtaining capital or entering into a strategic alternative transaction which provides sufficient funding for the refinancing of its outstanding indebtedness prior to the maturity date of its obligations under the Credit Agreements.

See Note 7 , Debt.

11 unchanged sentences

However, in November 2019, the FASB issued ASU 2019-10, "Financial Instruments - Credit Loss (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842)," which defers the effective date for public filers that qualify as a smaller reporting company ("SRC"), as defined by the Securities and Exchange Commission, to fiscal years after December 15, 2022, including interim periods within those fiscal years.

Because SIFCO is considered a SRC, this ASU is effective for the Company beginning October 1, 2023.

Because SIFCO is considered a SRC, this ASU is effective for the

Company beginning October 1, 2023.

The effect of adopting this ASU did not have an impact to the Company's results within the consolidated condensed statements of operations and financial condition.

15 unchanged sentences

Early adoption is permitted.

A public entity should apply the amendments in ASU 2023-07 retrospectively to all prior periods presented in the

financial statements.

A public entity should apply the amendments in ASU 2023-07 retrospectively to all prior periods presented in the financial statements.

The Company is currently assessing the impact of adopting ASU 2023-07 on the consolidated condensed financial statements and related disclosures.

6 unchanged sentences

The Company is currently evaluating the impact of this standard on our consolidated condensed financial statements and related disclosures.

In March 2024, the FASB issued ASU 2024-01 “ Compensation - Stock Compensation (Topic 718) - Scope Application of Profits Interest and Similar Awards ” (“ASU 2024-01”) clarifies how an entity determines whether a profits interest or similar award is within the scope of Topic 718 or is not a share-based payment arrangement and therefore within the scope of other guidance.

ASU 2024-01 provides an illustrative example with multiple fact patterns and also amends certain language in the “Scope” and “Scope Exceptions” sections of Topic 718 to improve its clarity and operability without changing the guidance.

Entities can apply the amendments either retrospectively to all prior periods presented in the financial statements or prospectively to profits interest and similar awards granted or modified on or after the date of adoption.

If prospective application is elected, an entity must disclose the nature of and reason for the change in accounting principle.

The amendments in ASU 2024-01 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2024.

The Company is currently assessing the impact of this standard on our consolidated condensed financial statements and related disclosures.

In March 2024, the FASB issued ASU 2024-02 “ Codification Improvements ” (“ASU 2024-02”) amends the Codification to remove references to various concepts statements and impacts a variety of topics in the Codification.

The amendments apply to all reporting entities within the scope of the affected accounting guidance, but in most instances the references removed are extraneous and not required to understand or apply the guidance.

Generally, the amendments in ASU 2024-02 are not intended to result in significant accounting changes for most entities and is effective or fiscal years beginning after December 15, 2024.

The Company is currently assessing the impact of this standard on our consolidated condensed financial statements and related disclosures.

Employee Retention Credit

Under the Employee Retention Credit ("ERC") program, eligible businesses, both for-profit and not-for-profit, that experienced a full or partial government-ordered suspension of operations or a "significant" decline in gross receipts in any quarter (more than 50% decrease in 2020 from 2019, and more than 20% in 2021) could receive a quarterly refundable payroll tax credit.

The Company, with reasonably assured qualification, submitted for refunds under the ERC program.

The Company, with reasonably assured qualification, submitted for refunds under the ERC program on January 23, 2024.

These submissions are still pending review and approval from the Internal Revenue Service ("IRS").

As no authoritative guidance exists under U.S.

GAAP for reporting ERCs, the Company adopted International Accounting Standards ("IAS") 20 – Accounting for Government Grants and Disclosure of Government Assistance, which permits the recording and presentation of either the gross amount as other income or netting the credit against related expense.

For the three months ended December 31, 2023 and 2022, there was no income or expense recorded.

The ERC will be recognized as a reduction in other manufacturing and selling, general and administrative expenses and allocated to the financial statement categories from which the payroll taxes were originally incurred.

For the three and six months ended March 31, 2024 and 2023, there was no income or expense recorded.

Inventories consist of:

5 unchanged sentences

For a portion of the Company's inventory, cost is determined using the last-in, first-out ("LIFO") method.

Approximately 32 % and 19 % of the Company’s inventories at December 31, 2023 and September 30, 2023, respectively, use the LIFO method.

Approximately 34 % and 19 % of the Company’s inventories at March 31, 2024 and September 30, 2023, respectively, use the LIFO method.

An actual valuation of inventory under the LIFO method is made at the end of each fiscal year based on the inventory levels and costs existing at that time.

2 unchanged sentences

The first-in, first-out ("FIFO") method is used for the remainder of the inventories, which are stated at the lower of cost or net realizable value ("NRV").

If the FIFO method had been used for the inventories for which cost is determined using the LIFO method, inventories would have been $ 9,927 and $ 9,634 higher than reported at December 31, 2023 and September 30, 2023, respectively.

If the FIFO method had been used for the inventories for which cost is determined using the LIFO method, inventories would have been $ 9,985 and $ 9,634 higher than reported at March 31, 2024 and September 30, 2023, respectively.

Net realizable value is the estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation.

The Company estimates net realizable value, excess and obsolescence and shrink reserves for its inventory based upon historical experience, historical and projected sales trends and the age of inventory on hand.

As of December 31, 2023 and September 30, 2023, our inventory valuation allowances were $ 3,534 and $ 4,049 , respectively.

As of March 31, 2024 and September 30, 2023, our inventory valuation allowances were $ 3,883 and $ 4,049 , respectively.

Long-lived Assets

4 unchanged sentences

The Company continuously monitors for indicators of impairment to determine if further testing is necessary.

In the first quarter of fiscal 2024, the Company evaluated potential triggering events and did not identify any indicators that the asset groups might be impaired.

In the second quarter of fiscal 2024, the Company evaluated potential triggering events and did not identify any indicators that the asset groups might be impaired.

The Company tests its goodwill for impairment in the fourth fiscal quarter, and in interim periods if certain events occur indicating that the carrying amount of goodwill may be impaired.

In the first quarter of fiscal 2024, the Company evaluated potential triggering events and determined interim testing was not required.

In the second quarter of fiscal 2024, the Company evaluated potential triggering events and determined interim testing was not required.

Accumulated Other Comprehensive Loss

1 unchanged sentence

2024 September 30,

Foreign currency translation adjustment $ ( 5,675 ) $ ( 5,928 )

Foreign currency translation loss, net of tax $ ( 5,802 ) $ ( 5,927 )

Retirement plan liability adjustment, net of tax ( 656 ) ( 742 )

3 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2024 2023 2024 2023

Finance lease expense:

5 unchanged sentences

The following table presents the impact of leasing on the consolidated condensed balance sheet.

Classification in the consolidated condensed balance sheets December 31,

Classification in the consolidated condensed balance sheets March 31,

2024 September 30,

10 unchanged sentences

Supplemental cash flow and other information related to leases were as follows:

2023 December 31,

2024 March 31,

Other Information

3 unchanged sentences

Financing cash flows from finance leases 32 30

Right-of-use assets obtained in exchange for new lease liabilities:

Operating leases — 60

2024 September 30,

5 unchanged sentences

Operating leases 5.9 % 5.9 %

Future minimum lease payments under non-cancellable leases at December 31, 2023 were as follows:

Future minimum lease payments under non-cancellable leases at March 31, 2024 were as follows:

Finance Leases Operating Leases

Year ending September 30,

2024 (excluding the three months ended December 31, 2023) $ 51 $ 1,276

2024 (excluding the six months ended March 31, 2024) $ 33 $ 842

2025 37 1,697

17 unchanged sentences

Credit Agreement and Security Agreement

On November 8, 2023, the Company entered into the Eighth Amendment to the Credit Agreement (the "Eighth Amendment") with its Lender.

On November 8, 2023, the Company entered into the Eighth Amendment to the Credit Agreement (the "Eighth Amendment") with JPMorgan Chase Bank, N.A.

The Eighth Amendment, among other things, reduced the Reserves under the Borrowing Base in the Credit Agreement to $ 1,500 , or such lesser amount, if any, as may be agreed upon in writing by the Lender in its sole discretion.

12 unchanged sentences

and (ii) delay the maturity date to October 4, 2024, or any earlier date on which the Revolving Commitment is reduced to zero or otherwise terminated pursuant to the terms thereof.

The total collateral at December 31, 2023 and September 30, 2023 was $ 23,065 and $ 21,089 , respectively, and the revolving commitment was $ 26,000 and $ 30,000 , respectively.

Total availability at December 31, 2023 and September 30, 2023 was $ 5,034 and $ 2,830 , respectively, which exceeds both the collateral and total commitment threshold.

The total collateral at March 31, 2024 and September 30, 2023 was $ 23,223 and $ 21,089 , respectively, and the revolving commitment was $ 26,000 and $ 30,000 , respectively.

Total availability at March 31, 2024 and September 30, 2023 was $ 3,711 and $ 2,830 , respectively, which exceeds both the collateral and total commitment threshold.

The Credit Agreement contains affirmative and negative covenants and events of default.

Since the availability exceeded the $ 1,500 reserve minimum as of December 31, 2023 and September 30, 2023, no covenant calculations were required.

The Company has a letter of credit balance of $ 1,970 as of December 31, 2023 and September 30, 2023, respectively.

The Credit Agreement under the Ninth Amendment has a maturity date of October 4, 2024.

The revolving credit agreement (or "revolver"), as amended, has a rate based on SOFR plus a 2.75 % spread, which was 8.2 % at December 31, 2023 and a rate based on SOFR plus a 2.25 % spread, which was 7.7 % at September 30, 2023.

The Export Credit Agreement as amended has a rate based on SOFR plus a 2.25 % spread, which was 7.7 % at December 31, 2023 and a rate based on SOFR plus a 1.75 % spread, which was 7.2 % at September 30, 2023.

Since the availability exceeded the $ 1,500 reserve minimum as of March 31, 2024 and September 30, 2023, no covenant calculations were required.

The Company has a letter of credit balance of $ 1,970 as of March 31, 2024 and September 30, 2023, respectively.

The revolving credit agreement (or "revolver"), as amended, has a rate based on SOFR plus a 2.75 % spread, which was 8.2 % at March 31, 2024 and a rate based on SOFR plus a 2.25 % spread, which was 7.7 % at September 30, 2023.

The Export Credit Agreement as amended has a rate based on SOFR plus a 2.25 % spread, which was 7.7 % at March 31, 2024 and a rate based on SOFR plus a 1.75 % spread, which was 7.2 % at September 30, 2023.

The Company also has a commitment fee of 0.50 % under the Credit Agreement as amended to be incurred on the unused balance of the revolver.

Debt issuance costs - revolver

The Company incurred new debt issuance costs of $ 117 in the first quarter of fiscal 2024 as it pertains to the new amendments entered into, which are included in the consolidated condensed balance sheet as a deferred charge in other current assets, net of amortization of $ 0 at December 31, 2023.

The Company previously had debt issuance costs of $ 86 , which were included in the consolidated condensed balance sheets as a deferred charge in other current assets, net of amortization of $ 86 and $ 78 at December 31, 2023 and September 30, 2023, respectively.

The Company previously had debt issuance costs of $ 86 , which were included in the consolidated condensed balance sheets as a deferred charge in other current assets, net of amortization of $ 86 and $ 78 at March 31, 2024 and September 30, 2023, respectively.

Subordinated Promissory Note and Guarantee

3 unchanged sentences

The obligations of borrowers under the Subordinated Loan mature on October 4, 2024.

Interest accrues on

the then-outstanding principal amount at a rate of 14 % per annum and shall be paid in kind (and not in cash) by capitalization as additional principal ("PIK Interest") each six-month period after the date hereof in arrears.

Interest accrues on the then-outstanding principal amount at a rate of 14 % per annum and shall be paid in kind (and not in cash) by capitalization as additional principal ("PIK Interest") each six-month period after the date hereof in arrears.

The Company agreed to pay to Mr.

1 unchanged sentence

Borrower’s obligations under the Subordinated Promissory Note are secured by a first priority lien, subject to any liens granted to Lender as described in the Subordination Agreement, on all of borrowers’ accounts, deposit accounts, contract rights, documents, equipment, general intangibles, instruments, inventory, investment property, commercial tort claims, all other goods and personal property whether tangible or intangible and wherever located, and all proceeds of the foregoing.

The Subordinated Promissory note carrying value was $ 3,150 and $ 0 at December 31, 2023 and September 30, 2023, respectively.

The Subordinated Promissory Note interest rate was 14 % and 0 % at December 31, 2023 and September 2023, respectively.

The Subordinated Promissory note carrying value was $ 3,256 and $ 0 at March 31, 2024 and September 30, 2023, respectively.

The Subordinated Promissory Note interest rate was 14 % and 0 % at March 31, 2024 and September 2023, respectively.

The Ninth Amendment was also subject to including, but not limited to, the execution and delivery by Mark.

Silk, a member of the Board of Directors of the Company ("Silk"), of a Guaranty Agreement (the "Guaranty") in favor of Lender pursuant to which Silk guarantees the obligations of borrowers under the Credit Agreement and Export Credit Agreement.

The Fee Letter requires the borrowers to pay Silk a fee (the "Guaranty Fee") in consideration for his agreement to execute and deliver the Guaranty in an amount equal to $ 760 , which was included in the consolidated condensed balance sheets as a deferred charge in accrued liabilities.

The Fee Letter

requires the borrowers to pay Silk a fee (the "Guaranty Fee") in consideration for his agreement to execute and deliver the Guaranty in an amount equal to $ 760 , which was included in the consolidated condensed balance sheets as a deferred charge in accrued liabilities.

The Guaranty Fee becomes due and payable on the maturity date.

14 unchanged sentences

Under the terms of the borrowing, repayments are made semi-annually in the amount of $ 200 , beginning on June 29, 2024.

The proceeds from this loan are shown within cash and cash equivalents on the consolidated condensed balance sheets and will be used for capital investment.

A second loan with a with a term of 1 year, 6 months was obtained in the amount of $ 1,104 .

The proceeds from this loan are shown within cash and cash equivalents and short-term investments on the consolidated condensed balance sheets and will be used for capital investment.

A second loan with a term of 1 year, 6 months was obtained in the amount of $ 1,104 .

The proceeds from this loan will be for working capital purposes.

3 unchanged sentences

This estimated effective rate is used in providing for income taxes on a year-to-date basis.

The Company’s effective tax rate through the first three months of fiscal 2024 was ( 1.5 )%, compared with ( 2.6 )% for the same period of fiscal 2023.

The Company’s effective tax rate through the first six months of fiscal 2024 was ( 2.0 )%, compared with ( 1.9 )% for the same period of fiscal 2023.

The decrease in the effective rate was primarily attributable to changes in jurisdictional mix of income in fiscal 2024 compared with the same period of fiscal 2023.

5 unchanged sentences

federal jurisdiction, Ireland, Italy, and various state and local jurisdictions.

As of the second quarter of fiscal 2024, the Company maintains a full valuation allowance on the net deferred tax assets in the U.S., Ireland and Italy.

Retirement Benefit Plans

2 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2024 2023 2024 2023

Service cost $ 45 $ 6 $ 90 $ 12

2 unchanged sentences

Amortization of net loss 43 77 86 153

Net periodic pension cost (benefit) $ 69 $ 81

During the three months ended December 31, 2023 and 2022, the Company made $ 9 and $ 8 in cash contributions, and $ 86 and $ 0 in non-cash contributions utilizing carryover balance, respectively, to its defined benefit pension plans.

Net periodic pension cost $ 99 $ 80 $ 197 $ 160

During the six months ended March 31, 2024 and 2023, the Company made $ 18 and $ 13 in cash contributions, and $ 86 and $ 0 in non-cash contributions utilizing carryover balance, respectively, to its defined benefit pension plans.

The Company anticipates making $ 57 in cash contributions to fund its defined benefit pension plans for the balance of fiscal 2024, and will use carryover balances from previous periods that have been available for use as a credit to reduce the amount of cash contributions that the Company is required to make to certain defined benefit plans in fiscal 2024.

3 unchanged sentences

The Company has outstanding equity awards under the Company's 2007 Long-Term Incentive Plan (the "2007 Plan") and the Company's 2007 Long-Term Incentive Plan (Amended and Restated as of November 16, 2016) (as further amended, the "2016 Plan"), and awards performance and restricted shares under the 2016 Plan.

In the first three months of fiscal 2024, the Company granted 120 shares under the 2016 Plan to certain key employees.

In the first six months of fiscal 2024, the Company granted 120 shares under the 2016 Plan to certain key employees.

The awards were split into two tranches, comprised of 46 performance-based shares and 74 time-based restricted shares, with a grant date fair value of $ 3.60 per share.

The awards vest over three years .

There were 8 shares forfeited during the three month period ended December 31, 2023.

If all outstanding share awards are ultimately earned and vest at the target number of shares, there are approximately 308 shares that remain available for award at December 31, 2023.

There were 19 shares forfeited during the six month period ended March 31, 2024.

In the first six months of fiscal 2024, the Company granted its non-employee directors 39 restricted shares under the 2016 Plan, with a grant date fair value of $ 3.08 per share, which vest over one year .

One award for 38 restricted shares vested in January 2024.

If all outstanding share awards are ultimately earned and vest at the target number of shares, there are approximately 280 shares that remain available for award at March 31, 2024.

If any of the outstanding share awards are ultimately earned and vest at greater than the target number of shares, up to a maximum of 150 % of such target, then a fewer number of shares would be available for award.

Stock-based compensation under the 2016 Plan was $ 86 and $ 122 during the first three months of fiscal 2024 and 2023, respectively.

As of December 31, 2023, there was $ 573 of total unrecognized compensation cost related to the performance shares and restricted shares awarded under the 2016 Plan.

Stock-based compensation under the 2016 Plan was $ 171 and $ 207 during the first six months of fiscal 2024 and 2023, respectively.

As of March 31, 2024, there was $ 573 of total unrecognized compensation cost related to the performance shares and restricted shares awarded under the 2016 Plan.

The Company expects to recognize this cost over the next 1.7 years.

8 unchanged sentences

government with no alternative use, include provisions within the contract that are subject to the Federal Acquisition Regulation ("FAR").

The FAR provision allows the customer to unilaterally terminate the contract for convenience and requires

the customer to pay the Company for costs incurred plus reasonable profit margin and take control of any work in process.

The FAR provision allows the customer to unilaterally terminate the contract for convenience and requires the customer to pay the Company for costs incurred plus reasonable profit margin and take control of any work in process.

• For certain commercial contracts involving customer-specific products with no alternative use, the contract may fall under the FAR clause provisions noted above for military contracts or may include certain provisions within their contract that the customer controls the work in process based on contractual termination clauses or restrictions of the Company's use of the product and the Company possesses a right to payment for work performed to date plus reasonable profit margin.

As a result of control transferring over time for these products, revenue is recognized based on progress toward completion of the performance obligation.

The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products to be provided.

The selection of the method to measure progress towards completion requires judgment and is

based on the nature of the products to be provided.

The Company elected to use the cost to cost input method of progress based on costs incurred for these contracts because it best depicts the transfer of goods to the customer based on incurring costs on the contracts.

3 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2024 2023 2024 2023

Commercial revenue $ 17,376 $ 11,361 $ 30,616 $ 21,542

3 unchanged sentences

Three Months Ended

March 31, Six Months Ended

Net Sales 2024 2023 2024 2023

7 unchanged sentences

Three Months Ended

March 31, Six Months Ended

Net Sales 2024 2023 2024 2023

2 unchanged sentences

Total $ 26,543 $ 19,242 $ 47,595 $ 40,541

In addition to the disaggregated revenue information provided above, approximately 41 % and 54 % of total net sales for the three months ended December 31, 2023 and 2022, respectively, was recognized on an over-time basis because of the continuous transfer of control to the customer, with the remainder recognized at a point in time.

In addition to the disaggregated revenue information provided above, approximately 40 % and 49 % of total net sales for the six months ended March 31, 2024 and 2023, respectively, was recognized on an over-time basis because of the continuous transfer of control to the customer, with the remainder recognized at a point in time.

Contract Balances

The following table contains a roll forward of contract assets and contract liabilities for the period ended December 31, 2023:

2023 December 31,

The following table contains a roll forward of contract assets and contract liabilities for the period beginning October 1, 2023 and ended March 31, 2024 compared to period beginning October 1, 2022 and ended March 31, 2023:

2024 March 31,

Contract assets - Beginning balance $ 10,091 $ 10,172

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Contract assets - Ending balance $ 9,976 $ 10,636

2023 December 31,

2024 March 31,

Contract liabilities (included within Accrued liabilities) - Beginning balance $ ( 1,150 ) $ ( 807 )

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Contract liabilities (included within Accrued liabilities) - Ending balance $ ( 1,399 ) $ ( 1,216 )

Accounts receivable were $ 16,515 and $ 15,308 at September 30, 2022 and December 31, 2022, respectively.

There were no impairment losses recorded on contract assets as of December 31, 2023 and September 30, 2023.

Accounts receivable were $ 16,515 and $ 17,395 at September 30, 2022 and March 31, 2023, respectively.

There were no impairment losses recorded on contract assets as of March 31, 2024 and September 30, 2023.

Remaining performance obligations

As of December 31, 2023, the Company has $ 103,569 of remaining performance obligations, the majority of which are anticipated to be completed within the next twelve months .

As of March 31, 2024, the Company has $ 137,771 of remaining performance obligations, the majority of which are anticipated to be completed within the next twelve months .

Commitments and Contingencies

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The Company's investigation uncovered that the threat actor had gained access to certain areas of the Company's systems on or about December 27, 2022.

With the assistance of outside cyber security experts, the Company located and closed the unauthorized access to our systems and identified compromised information, and notified those impacted in accordance with state and federal requirements.

The Company undertook a number of other measures to demonstrate our continued support and commitment to data privacy and protection and coordinated with law enforcement.

With the assistance of outside cyber security experts, the Company located and closed the unauthorized access to our systems, identified compromised information, and notified those impacted in accordance with state and federal requirements.

The Company maintains $ 3,000 of cybersecurity insurance coverage to limit our exposure to losses such as those related to the Cyber Incident.

The Company recorded a benefit of $ 1 to selling, general, and administrative expenses in the three months ended December 31, 2023 and recorded costs of $ 110 to other expense (income), net related to loss on insurance recovery in the three months ended December 31, 2022.

At December 31, 2023 and September 30, 2023, the Company recorded $ 827 and $ 965 , respectively, related to the Cyber Incident in accounts payable on the consolidated condensed balance sheets.

The Company has incurred, and may continue to incur, certain expenses related to this attack, including expenses associated with additional remediation measures.

The Company recorded expense of $ 23 to selling, general, and administrative expenses in the six months ended March 31, 2024.

The Company recorded expense of $ 977 to selling, general, and administrative expenses and recorded costs of $ 110 to other expense (income), net related to loss on insurance recovery in the six months ended March 31, 2023.

At March 31, 2024 and September 30, 2023, the Company recorded $ 827 and $ 965 , respectively, related to the Cyber Incident in accounts payable on the consolidated condensed balance sheets.

The Company has incurred, and may continue to incur, certain expenses related to this attack.

The Company will accrue these costs as incurred.

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Silk, a member of the Board of Directors of the Company and considered a related party.

The Company has recorded interest expense of $ 106 for the three and six month periods ending March 31, 2024, which was included in the consolidated condensed balance sheets in the Promissory note - related party line.

Additionally, Mr.

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As part of the Guaranty and Promissory Note, the Company will pay GHI fees of $ 760 and $ 150 , respectively, and has paid $ 30 of legal costs.

The Company has accumulated a total of $ 940 deferred financing costs related to the Guaranty and Subordinated Promissory Note.

The Company has a total of $ 638 deferred financing costs related to the Guaranty and Subordinated Promissory Note, which was included in the consolidated condensed balance sheets in current maturities of long-term, net of $ 302 amortization.

See Note 7, Debt for further information.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements