Item 1. Business
Item 1. Business
A. The Company
SIFCO Industries, Inc. (“SIFCO,” “Company,” “we” or “our”), an Ohio corporation, was incorporated in 1916. The executive offices of the Company are located at 970 East 64th Street, Cleveland, Ohio 44103, and its telephone number is (216) 881-8600.
SIFCO is engaged in the production of forgings, sub-assemblies, and machined components primarily for the Aerospace and Energy (“A&E”) markets. The Company’s processes and services include forging, heat-treating, chemical processing and machining. The Company’s operations are conducted in a single business segment. Information relating to the Company’s financial results is set forth in the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
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 located in Maniago, Italy, and wholly-owned subsidiary of the Company (“CBlade”), for cash consideration.
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 as of September 30, 2024 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 Operations of the Notes to Consolidated Financial Statements.
B. Principal Products and Services
Operations
SIFCO is a manufacturer of forgings and machined components for the Aerospace and Defense, Energy and Commercial Space markets. We provide our customers with envelope and precision forgings, rough and finished machined components, as well as sub-assemblies. SIFCO services both original equipment manufacturers (“OEM”), Tier 1 and Tier 2 suppliers, and aftermarket service providers with products that range in size from approximately 2 to 1,200 pounds. The Company’s strategic vision is to build a leading A&E company positioned for long-term, stable growth and profitability.
SIFCO’s long-term plan is to seek to maintain a balance of military and commercial aerospace revenues, supplemented with revenue from energy, commercial space, and other adjacent market components. In fiscal 2025, commercial and military revenues accounted for 43.5% and 56.5% of revenues, respectively, compared with 52.4% in commercial revenues and 47.6% in military revenues in fiscal 2024. The Company’s capabilities are focused on supplying critical components, consisting primarily of steel, high temperature alloys, nickel alloys, titanium and aluminum.
SIFCO operates primarily from two locations. SIFCO manufacturing facilities are located in Cleveland, Ohio (“Cleveland”) and Orange, California (“Orange”). SIFCO’s operations in Cleveland and Orange are AS 9100D and/or ISO 9001:2015 certified and the Company also holds multiple National Aerospace and Defense Contractors Accreditation Program (“NADCAP”) certifications and site approvals from key OEM customers.
The Company’s success is not dependent on patents, trademarks, licenses or franchises.
Raw Materials
SIFCO generally has multiple sources for its raw materials, which consist primarily of high-quality metals essential to its business. Suppliers of such materials are located principally in North America. SIFCO generally does not depend on a single source for the supply of its raw materials. Due to the limited supply of certain raw materials, some material is provided by a small number of suppliers; however, SIFCO believes that its sources are adequate for its busines s. In recent years, the Company occasionally experienced delays in the supply chain, which, if such delays reoccur, could affect our ability to timely obtain materials and components from our suppliers in the quantities we require or on favorable ter ms. As a result of increased supply chain lead times and inflationary pressures, the Company has experienced increases in pricing for raw materials, which could affect our customer demand and cost. However, SIFCO believes that its ability to pass through raw material costs under certain contractual agreements and discrete orders limits this exposure. For those contractual agreements under which pass through pricing is not permissible, a material adverse effect upon the profitability of one or more of the affected contracts, future period financial reporting and performance may result.
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Products
SIFCO’s products are made primarily of steel, high temperature alloys, nickel alloy, titanium and aluminum. SIFCO’s product offerings include: OEM and aftermarket components for aircraft and industrial gas turbine engines; steam turbine blades; structural airframe components; aircraft landing gear components; aircraft wheels and brakes; critical rotating components for helicopters; and commercial/industrial products. SIFCO also provides heat-treatment, surface-treatment, non-destructive testing and select machining and sub-assembly of forged components.
Industry
The performance of the domestic and international air transport industry, the global energy sector, the semiconductor supply chain, and U.S. government defense spending continues to directly and significantly affect the Company's results.
• SIFCO supplies new and spare components to the U.S military for aircraft, helicopters, vehicles, and munitions. Key programs include the H-60 Black Hawk, C-130, F-18 and F-35. U.S. defense spending remains elevated due to geopolitical tensions and modernization initiatives; however, procurement priorities may shift based on changes in threat assessments, government leadership, budget constraints, and strategic focus. Sustainment demand for legacy platforms remains strong, and most Company-supported programs continue to experience stable or favorable trends .
• SIFCO supplies components for commercial aircraft, principally for large aircraft produced by Boeing and Airbus, as well as for general aviation. Global air travel has recovered to pre-pandemic levels, driving increased aircraft utilization and order activity. Airbus production rates, particularly for the A320neo and A350, continue to rise. Boeing’s 787 and 737 MAX programs are progressing through quality-related production constraints, and the 777-9 continues toward certification. These conditions support a continued recovery in demand for forged components.
• SIFCO supplies components to the commercial space industry, which is experiencing rapid growth driven by increased launch cadence, expansion of satellite constellations, reusability, and new entrants. This market's ongoing innovation and development present opportunities for the Company to increase market share as customers seek suppliers with advanced materials and high-reliability capabilities.
• SIFCO supplies components used in semiconductor manufacturing industry. These products require high-purity materials and stringent technical performance. Global investment in semiconductor fabrication—supported by government incentives and increased demand for advanced chips—continues to drive growth in equipment production. The Company’s materials expertise and customer qualifications position it to benefit from continued market expansion.
• SIFCO supplies new and spare components to the energy sector. While renewable energy markets continue to expand, demand for traditional oil and gas equipment has stabilized as global commodity prices normalize. Increased investment in Liquefied Natural Gas projects, refining capacity, and upstream infrastructure supports steady demand. The Company has reduced dependence on OEM production cycles while maintaining flexibility to meet aftermarket needs and respond to changing sector dynamics.
Competition
SIFCO competes with numerous companies, both in and tangential to the A&E industry. SIFCO competes with both U.S. and non-U.S. suppliers of forgings, some of which are significantly larger than SIFCO; however, our competitors range from companies focused on the A&E markets to large diversified corporations that may also have business interests outside of the A&E markets to smaller companies that offer a limited portfolio of products in this market. SIFCO believes that it has an advantage and distinguishes itself in the primary markets it serves due to its: (i) demonstrated A&E expertise; (ii) focus on quality and customer service; (iii) operating initiatives such as SMART (Streamlined Manufacturing Activities to Reduce Time/Cost); and (iv) broad range of capabilities and offerings. As customers establish and utilize new facilities throughout the world, SIFCO will continue to encounter non-U.S. competition. SIFCO believes it can expand its market share by (i) continuing to increase capacity utilization; (ii) broadening its product lines through investment in equipment that expands its manufacturing capabilities; and (iii) developing new customers in markets where the participants require similar technical competence and service as those in the A&E industries. See further discussion of the risks relating to competition SIFCO faces in Item 1A. Risk Factors .
Government Contracts
Companies, such as SIFCO, that supply equipment and products to the U.S. military are subject to certain risks related to commercial relationships with the U.S. government and its agencies. Under the terms of these agreements, it is possible for demand and build rates to fluctuate or for the U.S. government to terminate existing contracts.
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Customers and Seasonality
During fiscal 2025, SIFCO had one direct customer that accounted for 18% of consolidated net sales; and 34% of the Company’s consolidated net sales were from two customers and their direct subcontractors, which individually accounted for 18% and 16% of net sales, respectively. SIFCO believes that the loss of sales to these customers would result in a material adverse impact on the business. However, SIFCO has maintained a business relationship with these customers for many years and is currently conducting business with them under multi-year agreements. Although there is no assurance that these relationships will continue, as one or more major customers have reduced their purchases in the past, historically SIFCO has generally been successful in gaining new business from these customers or from other customers to offset any potential reduction in purchases, thereby avoiding a material adverse impact on the Company. SIFCO relies on its ability to adapt its services and operations to changing requirements of the market in general and its customers in particular. No material part of SIFCO’s business is seasonal. For additional financial information about geographic areas, refer to Note 13 — Segment Information of the Notes to Consolidated Financial Statements.
Backlog of Orders
SIFCO’s total backlog as of September 30, 2025 increased to $119.2 million , co mpared with $114.4 million as of September 30, 2024. Orders for delivery scheduled in the upcoming fiscal year 2026 increased to $87.3 million compared with $85.0 million scheduled as of the end of the 2024 fiscal year. Orders may be subject to modification or cancellation by the customer with limited charges. The increase in total backlog as of September 30, 2025 compared with the previous year is primarily due to tim ing of annual awards, SIFCO’s customers adjusting orders due to recovery within the commercial airline industry, new content awarded, and extended raw material lead times. Backlog information may not be indic ative of future sales.
C. Regulatory Matters
The Company is subject to a number of domestic regulations relating to our operations and is required to comply with various environmental, health, and employee safety laws and regulations. The Company believes that it is in compliance with these laws and regulations. Historically, compliance with such laws and regulations has not had, and is not presently expected to have a material effect on capital expenditures, earnings or competitive position of the Company or its subsidiaries under existing regulations and interpretations. Nevertheless, the Company cannot guarantee that, in the future, it will not incur additional costs for compliance or that such costs will not be material.
D. Human Capital Management
Excluding CBlade employees due to the sale of this business in October 2024, SIFCO employed approximately 244 full-time employees at the beginning of fiscal 2025, which increased slightly to approximately 259 employees at the end of fiscal 2025.
The Company’s employees include full-time, part-time, and temporary employees. As of September 30, 2025, all employees were located within the U.S., excluding CBlade due to its sale in October 2024. Approximately 68% of our workforce within the U.S. is composed of skilled and unskilled labor, and the remaining population includes management, corporate, administrative and support staff.
The Company is a party to collective bargaining agreements (“CBA”) with certain employees within the Cleveland location. The Company’s Cleveland bargaining unit 1 new CBA took effect on May 15, 2025 and contains substantially similar terms and conditions as the expired CBA. The second bargaining unit CBA expired on March 31, 2025. The Company continued to be in negotiations with unit 2, who continued to work under the terms of the expired CBA. Subsequent to year-end, the new CBA took effect on October 4, 2025 and contains similar terms and conditions as the expired CBA. The CBlade business was sold to a third party on October 15, 2024, and all employees and obligations transferred to the third party with the consummation of this sale.
At September 30, 2025, approximately 94 of the hourly plant personnel are represented by two separate collective bargaining agreements. The table below shows the expiration dates of the collective bargaining agreements.
Plant locations Expiration date
Cleveland, Ohio (unit 1) May 12, 2030
Cleveland, Ohio (unit 2) March 31, 2029
The skills, experience and industry knowledge of our employees significantly benefit our operations and performance. There are several ways in which we attract, develop, and retain highly qualified talent and measure the ongoing effectiveness of our human capital management practices, including by making the safety and health of our employees a top priority. The Company is focused on ensuring the health of our employees through the implementation of standards, controls, and inspections to help ensure that our operations and premises comply with national and local regulations. In addition, the Company conducts annual
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employee development reviews, identifies growth opportunities, which include employee rotations, promotes value-based recognition programs and engages employees in continuous improvement activities.
Set forth below is certain information concerning the Company’s executive officers. The executive officers are appointed annually by the Board of Directors (current officers in bold).
Name Age Title and Business Experience
George Scherff 82 Chief Executive Officer since July 2024. Prior to joining the Company, Mr. Scherff served as CEO for Thermal Systems Manufacturing, Paradigm Packaging, Lund International, ABC Truck Body, and Hartzell Manufacturing following its merger with Continental Metal Specialties. He has a bachelor’s degree from The Ohio State University and a master’s degree in mechanical engineering from the University of Toledo. Mr. Scherff has successfully led middle-market organizations through periods of growth and transition and most recently served as a consultant, providing services to various companies with a focus on operational improvement.
Jennifer Wilson 46 Chief Financial Officer since November 13, 2024. Ms. Wilson served as the Company’s Director of External Reporting since 2022. She brings significant experience in strategic accounting and finance and a deep knowledge of the Company’s accounting and operating organization. Prior to her role as Director of External Reporting, Ms. Wilson served as the Controller of the Company’s Orange, California-facility and as the Director of Financial Planning and Analysis. Prior to joining the Company, Ms. Wilson served as an Accounting and Finance Consultant with Resources Global Professionals and as a Manager of Accounting and Treasury for Technical Consumer Products. She is a certified public accountant and holds a Masters of Business Administration and Bachelor of Science in accounting from David N. Myers University.
E. Non-U.S. Operations
The Company’s products are distributed in the U.S. as well as non-U.S. markets.
Financial information about the Company’s U.S. and non-U.S. operations is set forth in Note 13 — Segment Information of the Notes to Consolidated Financial Statements.
F. Available Information
The Company files annual, quarterly, and current reports, proxy statements, and other documents with the SEC under the Securities Exchange Act of 1934, as amended. The SEC maintains an Internet website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The public can obtain any documents that are filed by the Company at http://www.sec.gov .
In addition, our annual reports on Form 10-K, as well as our quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to all of the foregoing reports, are made available free of charge on or through the “Investor Relations” section of our website at www.sifco.com as soon as reasonably practicable after such reports are electronically filed with or furnished to the SEC.
Information relating to our corporate governance at SIFCO, including the Audit Committee, Corporate Governance and Nominating Committee and Compensation Committee Charters, as well as the Corporate Governance Guidelines and Policies and the Code of Conduct & Ethics adopted by our Board of Directors, is available free of charge on or through the “Investor Relations” section of our website at www.sifco.com . References to our website or the SEC’s website do not constitute incorporation by reference of the information contained on such websites, and such information is not part of this Form 10-K.