Profit return, backlog growth and lower debt at SIFCO (NYSE: SIF)

Rhea-AI Filing Summary

SIFCO Industries reported a strong turnaround for the quarter ended December 31, 2025, moving to net income from continuing operations of $1.8 million versus a $2.4 million loss a year earlier. Net sales rose to $24.0 million from $20.9 million, driven mainly by higher military demand and better pricing.

Gross profit increased sharply to $5.2 million from $0.9 million as cost of goods sold fell both in dollars and as a percentage of sales. Operating cash flow improved to $8.1 million, allowing the company to reduce total debt to $2.9 million from $10.6 million, largely by paying down its revolver.

Backlog grew to $139.5 million from $121.9 million a year earlier, reflecting recovery in aerospace markets. The company also recorded a $0.29 diluted EPS from continuing operations, compared with a loss of $0.40, and believes existing cash and credit availability can support operations for the next 12 months. SIFCO recorded a $156 thousand reserve related to recently received environmental notices at a California facility.

Positive

• Return to profitability and margin expansion: Income from continuing operations reached $1.8 million versus a $2.4 million loss a year earlier, with gross profit rising to $5.2 million from $0.9 million on higher sales and improved cost leverage.
• Strong operating cash flow and deleveraging: Operating activities generated $8.1 million of cash, enabling a reduction of total debt from $10.6 million to $2.9 million, including a sharp paydown of the revolving credit balance.
• Backlog growth supporting future revenue: Order backlog increased to $139.5 million from $121.9 million a year earlier, reflecting stronger aerospace demand, particularly in military programs.

Negative

• None.

Insights

Equity and credit analyst

Profitability, cash generation and deleveraging mark a materially improved quarter for SIFCO.

SIFCO Industries shifted from a loss to income from continuing operations of $1.8 million, with net sales rising to $24.0 million from $20.9 million. Gross profit expanded to $5.2 million, helped by higher throughput, favorable pricing and a better sales mix after exiting lower-margin business.

Cash flow dynamics improved notably. Operating activities provided $8.1 million versus a $3.8 million use of cash a year earlier, aided by milestone payments and working capital shifts. Management used this cash to pay down the revolving credit balance from $8.0 million to $0.4 million, reducing total debt to $2.9 million.

Backlog reached $139.5 million, up from $121.9 million at the prior-year quarter, indicating solid demand, especially in military programs. The company recorded a $156 thousand reserve tied to environmental notices at a California site, which is modest relative to earnings. Management states that current cash and available credit lines are expected to fund operations and planned capital spending over the next 12 months.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2025

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission file number 001-05978

SIFCO Industries, Inc.

(Exact name of registrant as specified in its charter)

Ohio						34-0553950
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)
970 East 64th Street, Cleveland Ohio						44103
(Address of principal executive offices)						(Zip Code)

(216) 881-8600

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer”, “non-accelerated filer”, “smaller reporting company”, and “emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer			☐			Accelerated filer			☐
Non-accelerated filer			☒			Smaller reporting company			☒
						Emerging growth company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Shares

SIF

NYSE American

The number of the Registrant’s Common Shares, par value $1.00, outstanding at December 31, 2025 was 6,215,128.

Part I.    Financial Information

Item 1.    Financial Statements

SIFCO Industries, Inc. and Subsidiaries

Consolidated Condensed Statements of Operations

(Unaudited)

(Amounts in thousands, except per share data)

									Three Months Ended December 31,
															2025						2024
Net sales															$	23,973					$	20,883
Cost of goods sold															18,784						19,955
Gross profit															5,189						928
Selling, general and administrative expenses															2,646						2,840
Gain on disposal of operating assets															(20)						—
Operating profit (loss)															2,563						(1,912)
Interest expense, net															352						469
Foreign currency exchange gain, net															—						(2)
Other expense, net															16						38
Income (loss) from continuing operations before income tax expense															2,195						(2,417)
Income tax expense															405						5
Income (loss) from continuing operations															1,790						(2,422)
Income from discontinued operations, net of tax															—						106
Net income (loss)															$	1,790					$	(2,316)
Basic earnings (loss) per share:
Basic earnings (loss) per share from continuing operations															$	0.29					$	(0.40)
Basic earnings per share from discontinued operations															—						0.02
Basic earnings (loss) per share															$	0.29					$	(0.38)
Diluted earnings (loss) per share:
Diluted earnings (loss) per share from continuing operations															$	0.29					$	(0.40)
Diluted earnings per share from discontinued operations															$	—					$	0.02
Diluted earnings (loss) per share															$	0.29					$	(0.38)
Weighted-average number of common shares (basic)															6,079						6,016
Weighted-average number of common shares (diluted)															6,159						6,016

See notes to unaudited consolidated condensed financial statements.

2

SIFCO Industries, Inc. and Subsidiaries

Consolidated Condensed Statements of Comprehensive Income

(Unaudited)

(Amounts in thousands)

									Three Months Ended December 31,
															2025						2024
Net income (loss)															$	1,790					$	(2,316)
Other comprehensive income (loss):
Foreign currency translation adjustment, net of tax															—						5,554
Retirement plan liability adjustment, net of tax															17						23
Other															—						(2)
Comprehensive income															$	1,807					$	3,259

See notes to unaudited consolidated condensed financial statements.

3

SIFCO Industries, Inc. and Subsidiaries

Consolidated Condensed Balance Sheets

(Unaudited)

(Amounts in thousands, except per share data)

			December 31, 2025						September 30, 2025
ASSETS
Current assets:
Cash and cash equivalents			$	1,106					$	491
Restricted cash			1,081						1,553
Receivables, net of allowance for credit losses of $128 and $151, respectively			15,634						16,103
Contract assets			11,045						10,560
Inventories, net			6,561						4,192
Prepaid expenses and other current assets			2,338						2,192
Total current assets			37,765						35,091
Property, plant and equipment, net			20,896						21,794
Operating lease right-of-use assets, net			12,299						12,543
Goodwill			3,493						3,493
Other assets			488						473
Total assets			$	74,941					$	73,394
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt, net of unamortized debt issuance costs			$	2,461					$	2,592
Revolver			386						7,969
Short-term operating lease liabilities			978						959
Accounts payable			7,296						5,796
Contract liabilities			7,486						1,784
Accrued liabilities			3,386						3,140
Total current liabilities			21,993						22,240
Long-term finance lease, net of short-term			39						51
Long-term operating lease liabilities, net of short-term			11,977						12,230
Deferred income taxes, net			519						163
Pension liability			1,104						1,206
Other long-term liabilities			611						619
Commitments and Contingencies (Note 10)
Shareholders’ equity:
Serial preferred shares, no par value, authorized 1,000 shares; zero shares issued and outstanding at December 31, 2025 and September 30, 2025			—						—
Common shares, par value $1 per share, authorized 10,000 shares; issued and outstanding shares 6,215 at December 31, 2025 and 6,180 at September 30, 2025			6,215						6,180
Additional paid-in capital			11,863						11,892
Retained earnings			18,942						17,152
Accumulated other comprehensive income			1,678						1,661
Total shareholders’ equity			38,698						36,885
Total liabilities and shareholders’ equity			$	74,941					$	73,394

See notes to unaudited consolidated condensed financial statements.

4

SIFCO Industries, Inc. and Subsidiaries

Consolidated Condensed Statements of Cash Flows

(Unaudited, Amounts in thousands)

			Three Months Ended December 31,
			2025						2024
Cash flows from operating activities:
Net income (loss)			$	1,790					$	(2,316)
Income from discontinued operations, net of tax			—						106
Income (loss) from continuing operations			$	1,790					$	(2,422)
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation and amortization			1,085						1,181
Amortization of debt issuance costs			54						37
Gain on disposal of operating assets			(20)						—
LIFO effect			212						501
Share transactions under company stock plan, net			6						(7)
Inventory valuation accounts			53						320
Deferred income taxes			356						65
Interest incurred but not yet paid			9						7
Other expenses			9						56
Changes in operating assets and liabilities:
Receivables			469						424
Contract assets			(485)						626
Inventories			(2,634)						(274)
Prepaid expenses and other current assets			(192)						(543)
Other assets			—						265
Accounts payable			1,294						(2,772)
Accrued liabilities			321						(778)
Contract liabilities			5,702						(495)
Accrued income tax			49						—
Net cash provided by (used for) operating activities			8,078						(3,809)
Cash flows from investing activities:
Proceeds from disposal of operating assets			20						—
Capital expenditures			(96)						(109)
Net cash used for investing activities			(76)						(109)
Cash flows from financing activities:
Proceeds from term loan			—						3,000
Payments on term loan			(150)						(100)
Proceeds from revolving credit agreement			22,646						35,025
Repayments of revolving credit agreement			(30,229)						(42,534)
Payment of debt issuance costs			(115)						(203)
Principal payments on capital lease obligations			(11)						(10)
Repayments of promissory note and related fees — related party			—						(4,417)
Net cash used for financing activities			(7,859)						(9,239)
Cash flows from discontinued operations:
Net cash used for operating activities			—						(57)
Net cash provided by investing activities			—						13,313
Net cash provided by financing activities			—						356
Effects of exchange rate changes on cash and cash equivalents			—						(35)
Net cash provided by discontinued operations			—						13,577
Increase in cash, cash equivalents and restricted cash			143						420
Cash, cash equivalents and restricted cash at the beginning of the period			2,044						2,723
Cash, cash equivalents and restricted cash from continuing operations at the end of the period			$	2,187					$	3,143

See notes to unaudited consolidated condensed financial statements.

5

SIFCO Industries, Inc. and Subsidiaries

Supplemental Disclosure of Cash Flow Information

(Unaudited, Amounts in thousands)

			Three Months Ended December 31,
			2025						2024
Cash paid during the year:
Cash paid for interest			$	(298)					$	(389)
Non-cash investing activities:
Additions to property, plant & equipment — incurred but not yet paid			$	98					$	19
Non-cash financing activities:
Debt issuance costs — incurred but not yet paid			—						115
Interest added to promissory note — related party (paid-in-kind)			—						27

See notes to unaudited consolidated condensed financial statements.

6

SIFCO Industries, Inc. and Subsidiaries

Consolidated Condensed Statements of Shareholders’ Equity

(Unaudited, Amounts in thousands)

			Three Months Ended December 31, 2025
			Common Shares												Additional Paid-In Capital						Retained Earnings						Accumulated Other Comprehensive Income												Total Shareholders’ Equity
			Shares						Amount
Balance at October 1, 2025			6,180						$	6,180					$	11,892					$	17,152					$	1,661											$	36,885
Comprehensive income			—						—						—						1,790						17												1,807
Performance and restricted share expense			—						—						66						—						—												66
Share transactions under equity-based plans			35						35						(95)						—						—												(60)
Balance at December 31, 2025			6,215						$	6,215					$	11,863					$	18,942					$	1,678											$	38,698

			Three Months Ended December 31, 2024
			Common Shares												Additional Paid-In Capital						Retained Earnings						Accumulated Other Comprehensive Income (Loss)												Total Shareholders’ Equity
			Shares						Amount
Balance at October 1, 2024			6,158						$	6,158					$	11,775					$	17,881					$	(5,389)											$	30,425
Comprehensive (loss) income			—						—						—						(2,316)						5,575												3,259
Performance and restricted share expense			—						—						20						—						—												20
Share transactions under equity-based plans			(11)						(11)						(17)						—						—												(28)
Balance at December 31, 2024			6,147						$	6,147					$	11,778					$	15,565					$	186											$	33,676

See notes to unaudited consolidated condensed financial statements.

7

SIFCO Industries, Inc. and Subsidiaries

Notes to Unaudited Consolidated Condensed Financial Statements

(Amounts in thousands, except per share data)

1.Summary of Significant Accounting Policies

A.Principles of Consolidation

The accompanying unaudited consolidated condensed financial statements include the accounts of SIFCO Industries, Inc. and its wholly-owned subsidiaries (collectively, the “Company”). All intercompany accounts and transactions have been eliminated in consolidation.

The U.S. dollar is the functional currency for all of the Company’s operations in the United States (“U.S.”) and its non-operating, non-U.S. subsidiaries. For these operations, all gains and losses from completed currency transactions are included in income (loss).

These unaudited consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2025 (the “2025 Annual Report”). The year-end consolidated condensed balance sheet contained in these financial statements was derived from the audited financial statements and disclosures required by accounting principles generally accepted in the U.S. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) and disclosures considered necessary for a fair presentation have been included. The results of operations for any interim period are not necessarily indicative of the results to be expected for other interim periods or the full year.

B.Accounting Policies

A summary of the Company’s significant accounting policies is included in Note 1 to the audited consolidated financial statements of the Company’s 2025 Annual Report.

C.Net Earnings (Loss) per Share

The Company’s net earnings (loss) per basic share has been computed based on the weighted-average number of common shares outstanding. During a period of net loss, zero restricted and performance shares are included in the calculation of diluted earnings per share because the effect would be anti-dilutive. In a period of net income, the net income per diluted share reflects the effect of the Company’s outstanding restricted shares and performance shares under the treasury stock method.

The dilutive effect is as follows:

									Three Months Ended December 31,
															2025						2024
Income (loss) from continuing operations															$	1,790					(2,422)
Income from discontinued operations, net of tax															—						106
Net income (loss)															$	1,790					$	(2,316)
Weighted-average common shares outstanding (basic)															6,079						6,016
Effect of dilutive securities:
Restricted shares															76						—
Performance shares															4						—
Weighted-average common shares outstanding (diluted)															6,159						6,016
Net earnings (loss) per share – basic and diluted:
Continuing operations															$	0.29					$	(0.40)
Discontinued operations															—						0.02
Net earnings (loss) per share															$	0.29					$	(0.38)
Anti-dilutive weighted-average common shares excluded from calculation of diluted earnings per share															32						149

D.Recent Accounting Standards Adopted

In March 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-01, “Compensation—Stock Compensation - Scope Application of Profits Interest and Similar Awards,” which provides illustrative

8

guidance to help entities determine whether profits interest and similar awards should be accounted for as share-based payment arrangements within the scope of Topic 718 or another accounting standard. The Company adopted the ASU during the first quarter of fiscal year 2026. This guidance did not have a material impact on the Company’s consolidated condensed financial statements.

E.Impact of Newly Issued Accounting Standards

Accounting Pronouncements - Issued and Not Effective

In December 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2025-11, “Interim Reporting (Topic 270): Narrow-Scope Improvements,” which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting. The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU No. 2025-11 is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently assessing the impact of this standard on our consolidated condensed financial statements and related disclosures.

In January 2025, the FASB issued ASU 2025-01, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date” (“ASU 2025-01”). ASU 2025-01 outlines the effective date of ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”), as the first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption of ASU 2024-03 is still permitted. ASU 2024-03 requires both interim and annual disclosures pertaining to expense captions on the face of the income statement within continuing operations containing the following amounts: (i) purchases of inventory, (ii) employee compensation, (iii) depreciation, (iv) intangible asset amortization, and (v) depreciation, depletion, and amortization recognized as part of oil and gas-producing activities (or other amounts of depletion expense) included in each relevant expense caption. This disaggregated information will be required to be disclosed with other disaggregated amounts under other U.S. GAAP guidance, such as revenue and income taxes. Additionally, a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively and total selling expenses and a definition of such costs (in annual reporting periods only) should be disclosed. More granular information about cost of sales and selling, general, and administrative expenses (SG&A) would assist a reader of the Company's consolidated financial statements in better understanding an entity’s cost structure and forecasting future cash flows. The amendments in ASU 2024-03 should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of the ASU or (2) retrospectively to any or all prior periods presented in the financial statements. The Company is currently assessing the impact of this standard on our consolidated condensed financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. Early adoption is permitted. A public entity should apply the amendments in ASU 2023-09 prospectively to all annual periods beginning after December 15, 2024. The Company will first apply this guidance, on an annual basis, for the current fiscal year. This guidance will expand our annual income tax disclosures, but will not affect our consolidated condensed financial statements.

2.Discontinued Operations

The Company committed to sell CBlade in August 2024 in order to streamline operations and refocus on its core aerospace forging entities. On August 1, 2024, the Company’s Board of Directors approved and authorized the execution of a share purchase agreement (the “SPA”), under which SIFCO Irish Holdings, Ltd., a wholly owned subsidiary of the Company, entered into an agreement to sell 100% of the share capital of CBlade to TB2 S.r.l. (the “Buyer”) at an enterprise value of €20,000, less debt, for cash consideration of €13,800 in net equity value at closing, subject to adjustments for changes in working capital and certain other items (the “CBlade Sale”). The Company determined that CBlade met the criteria for classification as assets held for sale and discontinued operations upon the aforementioned events, and, based on the significance of the disposed operations (i.e., strategic shift), CBlade represented discontinued operations upon classification of the CBlade assets and liabilities as held for sale.

In October 2024, upon regulatory approval, the Company completed the CBlade Sale and received cash consideration of approximately $14,408, net of transaction costs of $530. The Company does not expect to have any significant continuing involvement with CBlade after the sale. All operating activities prior to the disposal date were included in the Company's financial statements separately as discontinued operations, including income before income tax provision, gain from the sale

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CBlade (i.e., cash proceeds received less net assets transferred), and the release of accumulated other comprehensive income (loss) attributable to the Company's European operations.

Due to the CBlade Sale, the Company ceased manufacturing operations within the European market, as CBlade represented the last remaining facility in this region. Prior to the transaction, CBlade was directly owned by SIFCO Irish Holdings Inc., a wholly-owned subsidiary of the Company incorporated in Ireland (“Irish Holdings”), which historically acted as the holding company for the Company's international operations. With the disposal of CBlade, the Company determined that its European operations represented a substantially complete liquidation. Therefore, $5,851 of cumulative translation adjustment loss attributable to these operations (related to Irish Holdings) was recognized in the statement of operations as a component of the gain on sale of discontinued operations upon the loss of a controlling financial interest in CBlade, which represented in excess of 90% of the assets of the Company's European operations.

A summary of the operating results for the discontinued operations is as follows:

									Three Months Ended December 31,
															2025						2024
Net sales															$	—					$	622
Cost of sales															—						348
Interest expense, net															—						15
Income from discontinued operations before income tax expense and gain on sale															—						214
Gain on sale of discontinued operations before income tax expense															—						58
Income tax expense from discontinued operations															—						166
Income from discontinued operations, net of tax															$	—					$	106

3.Inventories

Inventories consist of:

			December 31, 2025						September 30, 2025
Raw materials and supplies			$	3,278					$	1,416
Work-in-process			1,906						1,325
Finished goods			1,377						1,451
Total inventories, net			$	6,561					$	4,192

For a portion of the Company’s inventory, cost is determined using the last-in, first-out (“LIFO”) method. Approximately 63% and 40% of the Company’s inventories as of December 31, 2025 and September 30, 2025, 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. Accordingly, interim LIFO calculations must be based on management’s estimates of expected year-end inventory levels and costs. Because the actual results may vary from these estimates, the annual results may differ from interim results as they are subject to adjustments based on the differences between the estimates and the actual results. 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 $11,109 and $10,897 higher than reported as of December 31, 2025 and September 30, 2025, 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, 2025 and September 30, 2025, our inventory valuation allowances were $6,002 and $5,919, respectively.

4.Accumulated Other Comprehensive Income

The components of accumulated other comprehensive loss are as follows:

			December 31, 2025						September 30, 2025
Retirement plan liability adjustment, net of tax			1,678						1,661
Total accumulated other comprehensive income			$	1,678					$	1,661

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During the three months ended December 31, 2024, the Company reclassified $5,554 from foreign currency translation adjustment to income from discontinued operations in the consolidated condensed statements of operations concurrent with the disposition of the CBlade and the substantially complete liquidation of operations in Europe.

5. Debt

Debt consists of:

			December 31, 2025						September 30, 2025
Revolving credit agreement			$	386					$	7,969
Term loan, net of unamortized debt issuance costs of $42 and $50, respectively			2,258						2,400
Finance lease obligations			85						97
Other			157						146
Total debt			2,886						10,612
Less — current maturities			(2,847)						(10,561)
Total long-term debt			$	39					$	51

Loan and Security Agreement

On October 17, 2024, the Company and Quality Aluminum Forge, LLC, a wholly-owned subsidiary of the Company (“QAF”, and together with the Company, the “Borrowers”), entered into a Loan and Security Agreement (the “Loan Agreement”) among the Company and QAF, as borrowers, Siena Lending Group LLC, as Lender (“Siena”), and each of the affiliates of the borrowers signatory to the Loan Agreement from time to time as guarantors.

The Loan Agreement provided for a senior secured revolving credit facility with a term of three years in an aggregate principal amount not to exceed $20,000 (the “Revolver”) and a term loan in the original principal amount of $3,000 (the “Term Loan”). The Loan Agreement also provided for a $2,500 letter of credit sub-facility (the “Letter of Credit Sub-facility,” and collectively with the Revolver and the Term Loan, the “Credit Facility”). The Credit Facility matures on October 17, 2027.

Borrowings under the Revolver and the Letter of Credit Sub-facility will bear interest at an annual rate of 4.5% plus the adjusted term SOFR (or, if the base rate is applicable, an annual rate of 3.5% plus the base rate). Borrowings under the Term Loan will bear interest at an annual rate of 5.5% plus the adjusted term SOFR (or, if the base rate is applicable, 4.5% plus the base rate) and shall be repaid in equal consecutive monthly installments of $50 commencing November 1, 2024, with the entire unpaid balance due and payable on the maturity date. Letters of credit issued under the Letter of Credit Sub-facility will have an interest rate equal to 4.5% plus adjusted term SOFR per annum of the face amount of such letter of credit. The Letter of Credit Sub-facility requires the Company to maintain compensating balances in a money market account in support of any issuances. The Company may withdraw funds from this account at its discretion; however, availability under the Letter of Credit Sub-facility will be dependent upon the maintenance of such compensating balances. As of December 31, 2025, the Company held $1,081 in compensating balances, which were included in restricted cash in the consolidated condensed balance sheets.

In consideration of the execution and delivery by Siena of the Loan Agreement, the Company agreed pursuant to the fee letter to pay a closing fee in the amount of $230 (of which $115 was paid on the closing date and $115 was paid on the first anniversary of the closing date, with the remaining amount (if any) of the closing fee to be paid in full on the maturity date). The fee letter provides for a collateral monitoring fee in the amount of $126, which fee shall be paid in installments as follows: (a) equal payments of approximately $4 shall be payable on the closing date and on the first day of each month thereafter and (b) the remaining amount of such fee (if any) shall be paid in full on the maturity date. In addition, an unused line fee accrues with respect to the unused amount of the Revolver at an annual rate of 0.5%. All fees that are payable in future installments or in full at maturity were recognized within accrued liabilities in the consolidated condensed balance sheets as of December 31, 2025.

Borrowings under the Credit Facility are secured by (a) a continuing first priority lien on and security interest in and to substantially all of the assets of the Company and other loan parties identified therein; and (b) a continuing first priority pledge of the pledged equity. The obligations of the Borrowers are guaranteed by each guarantor on the terms set forth in the Loan Agreement.

The Loan Agreement includes a springing financial covenant requiring the Company to maintain a minimum fixed charge coverage ratio ("FCCR") of 1.0 to 1.0, in accordance with the Loan Agreement, once the availability block has been released. The Loan Agreement contains a $2,000 availability block that reduces the borrowing base until the later of the (i) the first anniversary date of the closing date and (ii) date on which the Company achieves a FCCR of at least 1.05 to 1.00, measure on a trailing twelve-month basis, at which point the availability block will be eliminated. The Loan Agreement also contains affirmative, negative and financial covenants customary for financings of this type, including, among other things, limitations

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on certain other indebtedness, loans and investment, liens, mergers, asset sales, and transactions with affiliates, as well as customary events of default for financings of this type. Additionally, the Loan Agreement contains provisions for a lockbox arrangement and a subjective acceleration clause related to the appraised value of collateralized property, plant, and equipment; hence, the Term Loan and the Revolver were each classified as current maturities of long-term debt in the consolidated condensed balance sheet as of December 31, 2025.

As of December 31, 2025, the Company was in compliance with its FCCR covenant. As of December 31, 2025, total availability under the Revolver was $16,063, and no letters of credit were outstanding.

As of December 31, 2025 and September 30, 2025, the Company had effective interest rates of 10.5% and 9.8%, respectively, under its revolving credit agreements.

Debt issuance costs

As of December 31, 2025 and September 30, 2025, the Company had debt issuance costs related to its outstanding revolving credit agreement of $556, respectively, which is included in the consolidated condensed balance sheets as a deferred charge in other current assets, net of amortization of $216 and $170, respectively. As of December 31, 2025 and September 30, 2025, the Company had debt issuance costs related to the Term Loan of $83, which are included net of debt in the consolidated condensed balance sheets, net of amortization of $41 and $33, respectively.

First Energy

In April 2019, the Company entered into an economic development loan in the amount of $864 with FirstEnergy Corporation (“FirstEnergy”) through its Ohio Electric Security Plan (“ESP”) in effect at that time (the “ED Loan”). The ED Loan matures in five years and requires quarterly payments at an interest rate of zero percent per annum for the first twenty-four months and 2.0% per annum for the remainder of the term. Any unpaid balance after the initial term will convert to the U.S. Prime Rate plus 1.0%. As of December 31, 2025 and September 30, 2025, the Company had outstanding balances under the ED Loan of $157 and $147, respectively.

Beginning on October 1, 2019, FirstEnergy invoiced the Company on a quarterly basis and payments were made accordingly. The Company has not received an invoice from First Energy since October 2023, and attempts to contact the lender have been unsuccessful.

6.Income Taxes

For each interim reporting period, the Company makes an estimate of the effective tax rate it expects to be applicable for the full fiscal year for its operations. 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 2026 was 18.5%, compared with (0.2)% for the same period of fiscal 2025. The increase in the effective rate was primarily attributable to changes in jurisdictional mix of income in fiscal 2026 compared with the same period of fiscal 2025 along with the Company's transition from a pre-tax loss to a pre-tax income position. The effective tax rate differs from the U.S. federal statutory rate due primarily to the valuation allowance against the Company’s U.S. deferred tax assets and income in foreign jurisdictions that are taxed at different rates than the U.S. statutory tax rate.

The Company is subject to income taxes in the U.S. federal jurisdiction, Ireland, and various state and local jurisdictions.

7.Retirement Benefit Plans

The Company and certain of its subsidiaries sponsor defined benefit pension plans covering some of its employees. The components of the net periodic benefit cost of the Company’s defined benefit plans are as follows:

									Three Months Ended December 31,
															2025						2024
Service cost															$	32					$	43
Interest cost															232						236
Expected return on plan assets															(265)						(264)
Amortization of net loss															17						23
Net periodic pension cost															$	16					$	38

During the three months ended December 31, 2025 and 2024, the Company made $104 and $42 in cash contributions to its defined benefit pension plans. The Company anticipates making $297 in cash contributions to fund its defined benefit pension plans for the balance of fiscal 2026. The Company does not anticipate making cash contributions above the minimum funding requirement to fund its defined benefit pension plans during the balance of fiscal 2026.

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8.Stock-Based Compensation

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 2026, the Company granted 50 time-based restricted shares under the 2016 Plan to certain key employees with a grant date fair value of $6.73 per share. The awards vest over three years. There were 17 shares forfeited during the three months ended December 31, 2025. No performance-based shares were granted during the three months ended December 31, 2025.

If all outstanding share awards are ultimately earned and vest at the target number of shares, there are approximately 342 shares that remain available for award as of December 31, 2025. 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 expense under the 2016 Plan was $66 and $21 during the first three months of fiscal 2026 and 2025, respectively, within selling, general and administrative expense on the consolidated condensed statements of operations. As of December 31, 2025, there was $357 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 1.4 years.

9.Revenue

The Company produces forged components for (i) turbine engines that power commercial, business and regional aircraft as well as military aircraft and other military applications; (ii) airframe applications for a variety of aircraft; (iii) industrial gas and steam turbine engines for power generation units; and (iv) commercial space, semiconductor and other commercial applications.

Revenue is recognized when performance obligations under the terms of the contract with a customer of the Company are satisfied. A portion of the Company’s contracts are from purchase orders (“PO’s”), which continue to be recognized as of a point in time when products are shipped from the Company’s manufacturing facilities or at a later time when control of the products transfers to the customer. Under the revenue standard, the Company recognizes certain revenue over time as it satisfies the performance obligations because the conditions of transfer of control to the applicable customer are as follows:

•Certain military contracts, which relate to the provisions of specialized or unique goods to the U.S. 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.

•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 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. Under this method, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenues are recorded proportionally as costs are incurred.

The following table represents a breakout of total revenue by customer type:

									Three Months Ended December 31,
															2025						2024
Commercial revenue															$	8,678					$	11,157
Military revenue															15,295						9,726
Total															$	23,973					$	20,883

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The following table represents revenue by end market:

									Three Months Ended December 31,
															2025						2024
Aerospace components for:
Fixed wing aircraft															$	10,520					$	12,845
Rotorcraft															9,234						3,394
Commercial space															1,147						2,448
Energy components for power generation units															284						1,028
Commercial product and other revenue															2,788						1,168
Total															$	23,973					$	20,883

All revenue based on selling locations originated from the Company’s U.S. operations.

In addition to the disaggregated revenue information provided above, approximately 66% and 53% of total net sales for the three months ended December 31, 2025 and 2024, 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 three months ended December 31, 2025 and 2024:

			December 31, 2025						December 31, 2024
Contract assets — beginning balance			$	10,560					$	10,745
Additional revenue recognized over-time			16,012						10,713
Less amounts billed to the customers			(15,527)						(11,339)
Contract assets — ending balance			$	11,045					$	10,119

			December 31, 2025						December 31, 2024
Contract liabilities — beginning balance			$	1,784					$	2,879
Payments received in advance of performance obligations			6,618						440
Performance obligations satisfied			(916)						(935)
Contract liabilities — ending balance			$	7,486					$	2,384

During the three months ended December 31, 2025, the Company recognized revenues of approximately $916, that was included in contract liabilities at the beginning of fiscal year 2026. During the three months ended December 31, 2024, the Company recognized revenues of approximately $935, that was included in contract liabilities at the beginning of fiscal year 2025.

Accounts receivable were $17,272 and $16,848 as of September 30, 2024 and December 31, 2024, respectively. There were certain contracts that met the criteria for loss recognition, a loss contract reserve of $461 and $325 was recorded as of December 31, 2025 and September 30, 2025, respectively.

Remaining performance obligations

As of December 31, 2025, the Company has $139,454 of remaining performance obligations, of which $87,905 are anticipated to be complete within the next 12 months, and the remaining thereafter.

10.Commitments and Contingencies

In the normal course of business, the Company may be involved in ordinary, routine legal actions. The Company cannot reasonably estimate future costs, if any, related to these matters; however, it does not anticipate any material impact on its financial condition or results of operations from these matters. The Company maintains various liability insurance coverages to protect its assets from losses arising out of or involving activities associated with ongoing and normal business operations; however, it is possible that the Company’s future operating results could be affected by future costs of litigation.

On October 3, 2025, the Company received written notice of potential violations of the Clean Water Act and California’s General Industrial Storm Water Permit occurring at Quality Aluminum Forge, LLC’s facilities located at 820 North Cypress

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Street & 794 North Cypress Street, Orange, California 92867. On December 23, 2025, the Company received written Notice of Violations and Intent to File Suit Under the Federal Water Pollution Control Act regarding potential violations of the Clean Water Act and California’s General Industrial Storm Water Permit occurring at Quality Aluminum Forge, LLC’s facilities located at 820 North Cypress Street & 794 North Cypress Street, Orange, California 92867. The Company is currently reviewing the aforementioned notices, validating the violations alleged therein, and, to the extent applicable, determining the extent of remediation efforts that may be required in connection therewith, and has engaged an environmental consultant to assist with analyzing fees, penalties and legal costs that could potentially be assessed. While the Company records reserves for legal disputes and regulatory matters in accordance to U.S. GAAP, the ultimate resolution of such matters are inherently uncertain, and actual results may differ significantly from current estimates. Based on the foregoing, the Company recorded an estimate for these contingent liabilities of $156 as of December 31, 2025.

11.Segment Information

The Company identifies itself as one operating segment, SIFCO, which is a manufacturer of forgings and machined components for the A&E, defense, and commercial space markets. The Company's chief operating decision maker (“CODM”) is the Chief Executive Officer. The CODM has the ultimate decision-making authority for resource allocation and assessing the performance of the Company. As such, the CODM reviews the income (loss) from continuing operations as a measure of segment profit or loss, as well as segment expense included in the below table, to evaluate operating performance, generate future operating plans and make strategic decisions. The CODM also uses these measures in monitoring plan versus actual results. The CODM does not review segment assets at a different asset level or category than those disclosed in the consolidated balance sheets.

									Three Months Ended December 31,
															2025						2024
Net sales															$	23,973					$	20,883
Less:
Cost of goods sold															18,784						19,955
Selling, general and administrative expenses															2,646						2,840
Other¹															753						510
Income (Loss) from continuing operations															$	1,790					$	(2,422)

¹ Other items include gain on disposal of operating assets, interest expense, gain on forgiven loan, foreign currency exchange loss (gain), other (income) expense, and income tax expense.

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion and Analysis of Financial Condition and Results of Operations may contain various forward-looking statements and includes assumptions concerning the Company’s operations, future results and prospects. The words “will,” “may,” “designed to,” “outlook,” “believes,” “should,” “anticipates,” “plans,” “expects,” “intends,” “estimates,” “forecasts” and similar expressions identify certain of these forward-looking statements. These forward-looking statements are based on current expectations and are subject to risk and uncertainties. In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, the Company provides this cautionary statement identifying important economic, political and technological factors, among others, the absence or effect of which could cause the actual results or events to differ materially from those set forth in or implied by the forward-looking statements and related assumptions. Such factors include the following: (1) the impact on business conditions in general, and on the demand for product in the aerospace and energy (or “A&E”), defense, and commercial space industries in particular, of the global economic outlook, including the continuation of military spending at or near current levels and the availability of capital and liquidity from banks, the financial markets and other providers of credit; (2) the future business environment, including capital and consumer spending; (3) competitive factors, including the ability to replace business that may be lost at comparable margins; (4) metals and commodities price increases and the Company’s ability to recover such price increases; (5) successful development and market introduction of new products and services; (6) continued reliance on consumer acceptance of regional and business aircraft powered by more fuel efficient turboprop engines; (7) continued reliance on military spending, in general, and/or several major customers, in particular, for revenues; (8) the impact on future contributions to the Company’s defined benefit pension plans due to changes in actuarial assumptions, government regulations and the market value of plan assets; (9) stable governments, business conditions, laws, regulations and taxes in economies where business is conducted; (10) the ability to successfully integrate businesses that may be acquired into the Company’s operations; (11) cyber and other security threats or disruptions faced by us, our customers or our suppliers and other partners; (12) our exposure to additional risks as a result of our international business, including risks

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related to geopolitical and economic factors, suppliers, laws and regulatory compliance, and trade measures such as significant tariffs - including recently announced U.S. tariffs on aluminum and steel; (13) the ability to maintain a qualified workforce; (14) the adequacy and availability of our insurance coverage; (15) our ability to develop new products and technologies and maintain technologies, facilities, and equipment in order to remain competitive, win bids, and meet the evolving needs of our customers; (16) our ability to realize amounts in our backlog; (17) investigations, claims, disputes, enforcement actions, litigation and/or other legal proceedings; and (18) extraordinary or force majeure events affecting the business or operations of our business.

The Company engages in the production of forgings and machined components primarily for the A&E, defense and commercial space markets. The processes and services provided by the Company include forging, heat-treating, chemical processing, machining, subassembly, and testing. The Company operates under one business segment.

The Company endeavors to continue to plan and evaluate its business operations while taking into consideration certain factors including the following: (i) the projected build rate for commercial, business and military aircraft, as well as the engines that power such aircraft; (ii) the projected maintenance, repair and overhaul schedules for commercial, business and military aircraft, as well as the engines that power such aircraft; (iii) the projected build rate and repair for industrial turbines and commercial space.

The Company operates within a cost structure that includes a significant fixed component. Therefore, higher net sales volumes are expected to result in greater operating income because such higher volumes allow the business operations to better leverage the fixed component of their respective cost structures. Conversely, the opposite effect is expected to occur at lower net sales and related production volumes.

A.Results of Operations

Overview

The Company produces forged components for (i) turbine engines that power commercial, business and regional aircraft as well as military aircraft and other military applications; (ii) airframe applications for a variety of aircraft; (iii) industrial gas and steam turbine engines for power generation units; and (iv) commercial space, semiconductor and other commercial applications.

Backlog of Orders

SIFCO’s total backlog as of December 31, 2025 was $139.5 million, compared with total backlog of $121.9 million as of December 31, 2024. Orders may be subject to modification or cancellation by the customer with limited charges. Recovery in the aerospace markets was the primary contributor to the increased bookings. Backlog information may not be indicative of future sales.

Three Months Ended December 31, 2025 compared with Three Months Ended December 31, 2024

Net Sales

Net sales comparative information for the first quarter of fiscal 2026 and 2025 is as follows:

(Dollars in millions)			Three Months Ended December 31,												Increase/ (Decrease)
			2025						2024
Aerospace components for:
Fixed wing aircraft			$	10.5					$	12.8					$	(2.3)
Rotorcraft			9.2						3.4						5.8
Commercial space			1.2						2.5						(1.3)
Energy components for power generation units			0.3						1.0						(0.7)
Commercial product and other revenue			2.8						1.2						1.6
Total			$	24.0					$	20.9					$	3.1

Net sales for the first quarter of fiscal 2026 increased $3.1 million to $24.0 million, compared with $20.9 million in the comparable period of fiscal 2025. The increase is attributable to increased throughput and favorable pricing, partially offset by the impact of customer-supplied raw materials. Under these arrangements, net sales excludes the value of materials provided by customers, resulting in lower reported sales relative to comparable programs utilizing company-procured materials. Fixed wing sales decreased $2.3 million compared with the same period last year, primarily due to timing across most programs, such as F-35. Rotorcraft sales increased compared with the same period last year primarily due to the timing of orders for UH-60 Black Hawk and CH47 Chinook programs. Commercial space products decreased by $1.3 million year-over-year due to reduced procurement activity in the commercial space market. Net sales for the energy components for power generation units

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decreased by $0.7 million. Commercial products and other revenue increased $1.6 million compared with the same period last year mostly due to the timing of orders related to munitions programs.

Commercial net sales and military net sales were 36.2% and 63.8%, respectively, of total net sales in the first quarter of fiscal 2026, compared with 53.4% and 46.6%, respectively, in the comparable period in fiscal 2025. Commercial net sales decreased $2.5 million to $8.7 million in the first quarter of fiscal 2026, compared with $11.2 million in the comparable period of fiscal 2025, primarily due to reduced procurement activity in the commercial space market, partially offset by higher demand in the commercial aerospace market. Military net sales increased by $5.6 million to $15.3 million in the first quarter of fiscal 2026, compared with $9.7 million in the comparable period of fiscal 2025, primarily due to increased demand across multiple programs, such as munitions and UH-60.

Cost of Goods Sold

Cost of goods sold (“COGS”) decreased by $1.2 million, or 5.9%, to $18.8 million, or 78.4% of net sales, during the first quarter of fiscal 2026, compared with $20.0 million, or 95.6% of net sales, in the comparable period of fiscal 2025. The decrease is due to improved absorption of fixed manufacturing costs. In addition, customer-supplied raw material reduced both reported net sales and COGS as customer-provided materials are excluded, with a generally neutral impact on gross profit.

Gross Profit

Gross profit increased by $4.3 million to $5.2 million in the first quarter of fiscal 2026, compared with $0.9 million gross profit in the comparable period of fiscal 2025, primarily attributable to increased throughput, favorable pricing and shift in sales mix resulting from the exit of lower-margin business, partially offset by higher manufacturing costs.

Selling, General and Administrative Expenses

Selling, general and administrative (“SG&A”) expenses were $2.6 million, or 11.0% of net sales, during the first quarter of fiscal 2026, compared with $2.8 million, or 13.6% of net sales, in the comparable period of fiscal 2025. The decrease is primarily driven by lower legal and professional fees.

Interest Expense, Net

The following table sets forth the weighted average interest rates and weighted average outstanding balances under the Company’s debt agreements in the first quarter of fiscal 2026 and 2025:

(Dollars in millions)			Weighted Average Interest Rate Three Months Ended December 31,												Weighted Average Outstanding Balance Three Months Ended December 31,
			2025						2024						2025						2024
Revolving credit agreement			10.5		%				9.6		%				$	7.9					$	13.3
Term loan			9.9		%				10.5		%				$	2.4					$	2.4
Other debt			25.5		%				8.2		%				$	0.2					$	0.4

Income Taxes

The Company’s effective tax rate through the first quarter of fiscal 2026 was 18.5%, compared with (0.2)% for the same period of fiscal 2025. The increase in the effective rate was primarily attributable to changes in jurisdictional mix of income in fiscal 2026 compared with the same period of fiscal 2025 along with the Company's transition from a pre-tax loss to a pre-tax income position. The effective tax rate differs from the U.S. federal statutory rate due primarily to the valuation allowance against the Company’s U.S. deferred tax assets and income in foreign jurisdictions that are taxed at different rates than the U.S. statutory tax rate.

Income (Loss) from Continuing Operations

Income from continuing operations was $1.8 million during the first quarter of fiscal 2026, compared with a loss from continuing operations of $2.4 million in the comparable period of fiscal 2025. The improvement is primarily attributable to increased gross profit and lower SG&A expenses as noted above.

B.Liquidity and Capital Resources

Cash and cash equivalents were $1.1 million and $0.5 million as of December 31, 2025 and September 30, 2025, respectively. A nominal amount of the Company’s cash and cash equivalents were in the possession of its non-U.S. holding company subsidiary, and certain distributions from which to the Company may be subject to adverse tax consequences.

Our primary requirements for liquidity and capital resources besides our growth initiatives, are working capital, capital expenditures, principal and interest payments on our outstanding debt, fulfilling obligations under our loan agreements, and

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other general corporate needs. Historically, the main sources of liquidity of the Company have been cash flows from operations and borrowings under our debt agreements. As of December 31, 2025, the Company was not party to any off-balance sheet arrangements that have had or are reasonably likely to have a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures, or capital resources. The cash requirements for the upcoming fiscal year relate to payments on our outstanding debt and leases, operating and capital purchase commitments, and expected contributions to our defined benefit and contribution plans. For information regarding the Company’s expected cash requirements and timing of payments related to leases and noncancellable purchase commitments, see Note 11 — Leases and Note 12 — Commitments and Contingencies of the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended September 30, 2025 (the “2025 Annual Report”). Additionally, refer to Note 9 — Retirement Benefit Plans of the Notes to Consolidated Financial Statements in the Company’s 2025 Annual Report for more information related to the Company’s pension and defined contribution plans.

We believe that our existing cash and available credit lines will be sufficient to finance our continued operations, planned capital expenditures and the additional expenses that we expect to incur during the next 12 months. In order to support and achieve our future growth plans, we may need or advantageously seek to obtain additional funding through equity or debt financing. We believe that our current operating structure will facilitate sufficient cash flows from operations to satisfy our expected long-term liquidity requirements beyond the next 12 months. If these resources are not sufficient to satisfy our liquidity requirements due to changes in circumstances, we may be required to borrow under our loan agreement or seek additional financing. The Company’s liquidity could be negatively affected if the Company is unable to obtain capital, by customers extending payment terms to the Company and/or the decrease in demand for our products. The Company and management will continue to assess and actively manage liquidity needs. For details regarding our debt agreements, see Note 5 — Debt of the notes to unaudited consolidated condensed financial statements.

Operating Activities

The Company’s operating activities provided $8.1 million of cash in the first three months of fiscal 2026. The cash provided by operating activities was primarily due to $4.5 million of cash generated from working capital, primarily due to increases in inventory due to timing of raw material receipts, contract liabilities due to receipt of milestone payment from a customer, and accounts payable due to timing of payments, along with $1.8 million of net income from continuing operations and $1.8 million adjusted for non-cash items, such as depreciation.

The Company’s operating activities used $3.8 million of cash in the first three months of fiscal 2025, primarily due to net operating loss of $2.4 million partially offset by depreciation and amortization of $1.2 million and change in inventory valuation accounts of $0.3 million and LIFO effect of $0.5 million. The uses of cash from working capital of $3.5 million was primarily due to decreases in accounts payable and accrued liabilities due to timing of payments, higher prepaid expenses attributable to deferred financing costs related to the refinanced revolver, decreases in contract liabilities due to satisfaction of performance obligations in sales contracts, and higher inventories due to timing of raw material receipts, partially offset by decreases in accounts receivable and contract assets mostly due to timing of receipts and higher billings to customers, respectively.

Investing Activities

During the first three months of fiscal 2026 and 2025, cash used for investing activities was $0.1 million, respectively, attributable to capital expenditures. Capital commitments as of December 31, 2025 were $0.3 million. The Company anticipates that the remaining total fiscal 2026 capital expenditures will be within the range of $1.0 million to $2.0 million and will relate principally to the further enhancement of production and product offering capabilities and drive operating cost reductions.

Financing Activities

Cash used for financing activities was $7.9 million in the first three months of fiscal 2026, compared with $9.2 million in the first three months of fiscal 2025. The year-over-year decrease in cash used from financing was primarily related to lower repayments on debt obligations during fiscal 2026.

Refer to Note 5 — Debt of the notes to unaudited consolidated condensed financial statements for details regarding our financing activities during the three months ended December 31, 2025.

Future cash flows from the Company’s operations may be used to pay down outstanding debt amounts. The Company believes it has adequate cash/liquidity available to finance its operations from the combination of (i) the Company’s expected cash flows from operations and (ii) funds available under its loan and security agreement as described in Note 5 — Debt of the notes to unaudited consolidated condensed financial statements for its domestic locations.

Tightening of the credit market and standards, as well as capital market volatility, could negatively impact our ability to obtain additional debt financing on terms equivalent to our existing debt agreements when needed in the future. Capital market

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uncertainty and volatility, together with the Company’s market capitalization and status as a smaller reporting company, could also negatively impact our ability to obtain equity financing.

C.Recent Accounting Standards

ASU 2024-01 was adopted during the three months ended December 31, 2025. Refer to Note 1 — Summary of Significant Accounting Policies for further detail. Additionally, the Company’s significant accounting policies and procedures are explained in the Management’s Discussion and Analysis section of the Company’s 2025 Annual Report.

Item 4.    Controls and Procedures

As defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), disclosure controls and procedures are controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported on a timely basis, and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. The Company’s disclosure controls and procedures include components of the Company’s internal control over financial reporting. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Management of the Company, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(e) as of December 31, 2025 (the “Evaluation Date”). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal controls over financial reporting during the Company’s most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

Part II.    Other Information

Items 1, 1A, 2, 3, 4 and 5 are not applicable or the answer to such items is negative; therefore, the items have been omitted and no reference is required in this Quarterly Report.

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Item 6.    (a) Exhibits

Exhibit No.						Description
10.1						Amendment to Share Purchase Agreement, dated September 27, 2024, by and between SIFCO Irish Holdings Ltd. and TB2 S.r.l., filed as Exhibit 10.1 to the Company’s Form 8-K dated October 3, 2024, and incorporated herein by reference.
10.2						Loan and Security Agreement dated October 17, 2024 among Siena Lending Group LLC, SIFCO Industries, Inc., Quality Aluminum Forge, LLC and each of the Affiliates of the Borrowers signatory thereto from time to time as guarantors, filed as Exhibit 10.1 to the Company’s Form 8-K dated October 23, 2024, and incorporated herein by reference.
**10.3						Offer Letter delivered by SIFCO Industries, Inc. to Jennifer Wilson on October 22, 2024, filed as Exhibit 10.1 to the Company’s Form 8-K dated October 25, 2024, and incorporated herein by reference.
**10.4						Resignation agreement and release of claims , between SIFCO Industries, Inc. and Jennifer Wilson on January 28, 2026, filed as Exhibit 10.1 to the Company’s Form 8-K dated February 3, 2026, and incorporated herein by reference.
*31.1						Certification of Chief Executive Officer pursuant to Rule 13a-14(a) / 15d-14(a)
*31.2						Certification of Chief Financial Officer pursuant to Rule 13a-14(a) / 15d-14(a)
*32.1						Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350
*32.2						Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350
*101						The following financial information from SIFCO Industries, Inc. Quarterly Report on Form 10-Q for the quarter ended December 31, 2025 filed with the SEC on February 11, 2026, formatted in XBRL includes: (i) Consolidated Condensed Statements of Operations for the fiscal periods ended December 31, 2025 and 2024, (ii) Consolidated Condensed Statements of Comprehensive Income for the fiscal periods ended December 31, 2025 and 2024, (iii) Consolidated Condensed Balance Sheets as of December 31, 2025 and September 30, 2025, (iv) Consolidated Condensed Statements of Cash Flow for the fiscal periods ended December 31, 2025 and 2024, (iv) Consolidated Condensed Statements of Shareholders’ Equity for the periods December 31, 2025 and 2024, and (v) the Notes to the Consolidated Condensed Financial Statements.
*104						Cover Page Interactive Data File: the cover page XBRL tags are embedded within the Inline XBRL document and are contained with Exhibit 101

*    Filed herewith.

**    Management contract or compensatory plan or arrangement.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

						SIFCO Industries, Inc.
						(Registrant)
February 11, 2026						/s/ George Scherff
						George Scherff
						Chief Executive Officer
						(Principal Executive Officer)
February 11, 2026						/s/ Jennifer Wilson
						Jennifer Wilson
						Chief Financial Officer
						(Principal Financial Officer)

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FAQ

How did SIFCO (SIF) perform financially in the quarter ended December 31, 2025?

SIFCO posted income from continuing operations of $1.8 million, reversing a prior-year loss of $2.4 million. Net sales increased to $24.0 million from $20.9 million, and diluted EPS from continuing operations improved to $0.29 from a loss of $0.40.

What drove SIFCO’s revenue and mix changes in this 10-Q quarter?

Revenue rose to $24.0 million, mainly from stronger military demand and better pricing. Military sales increased to $15.3 million, or 63.8% of net sales, while commercial sales declined to $8.7 million on reduced commercial space activity but higher commercial aerospace demand.

How did SIFCO’s margins and cost structure change in the latest quarter?

Cost of goods sold decreased to $18.8 million from $20.0 million, dropping to 78.4% of net sales versus 95.6%. This lifted gross profit to $5.2 million, helped by higher throughput, favorable pricing and a shift away from lower-margin business.

What is SIFCO’s debt and liquidity position as of December 31, 2025?

Total debt declined to $2.9 million from $10.6 million, as the revolving credit balance fell to $0.4 million. Cash and cash equivalents were $1.1 million, and total availability under the revolver was $16.1 million, supporting stated liquidity needs.

How large is SIFCO’s order backlog and what does it indicate?

Order backlog reached $139.5 million at December 31, 2025, up from $121.9 million a year earlier. Management attributes the increase mainly to aerospace market recovery, suggesting a solid pipeline of future production and revenue opportunities.

Did SIFCO disclose any notable legal or environmental matters in this 10-Q?

SIFCO reported receiving notices regarding potential Clean Water Act-related issues at a California facility and booked a $156 thousand contingent liability estimate. The company engaged an environmental consultant and noted that ultimate outcomes and costs remain uncertain.

What were SIFCO’s operating cash flows and capital spending this quarter?

Operating activities generated $8.1 million of cash, versus a $3.8 million use of cash a year earlier, aided by working capital movements and earnings. Capital expenditures were modest at $0.1 million, with total fiscal 2026 capex expected between $1.0 million and $2.0 million.