SIFCO Industries Q3 sales rise 18.3% to $26.1M; Adjusted EBITDA up
SIFCO Industries saw Q3FY26 sales rise 18.3% to $26.1 million. While GAAP earnings were impacted by a $3.2 million LIFO charge, Adjusted EBITDA increased to $4.8 million. The company returned to profitability for the first nine months of FY26 with $4.4 million in net income.
*this image is generated using AI for illustrative purposes only.
SIFCO Industries, Inc. (NYSE: SIF) reported an 18.3% year-over-year increase in net sales for the third quarter of fiscal 2026, reaching $26.1 million compared to $22.1 million in Q3FY25. While the company recorded a nominal net loss of $(0.01) per diluted share, this represents a significant improvement from the $0.54 per share loss in the prior-year period. The revenue growth underscores sustained demand in aerospace and energy sectors, driving a broader nine-month return to profitability with $4.4 million in net income from continuing operations.
The top-line expansion was supported by strong customer orders, although GAAP earnings were pressured by inventory accounting methods. A $3.2 million increase in LIFO (last-in, first-out) expense, driven by higher inventory costs and increased purchases, weighed on reported results. Consequently, GAAP EBITDA declined to $1.3 million in Q3FY26 from $5.3 million in Q3FY25. However, the prior-year figure included a one-time $2.7 million benefit from the Employee Retention Credit (ERC), which distorts direct comparisons.
Excluding non-recurring items such as equity compensation, transaction-related expenses, and LIFO impacts, Adjusted EBITDA rose to $4.8 million in Q3FY26, up from $4.4 million in the previous year. This metric provides a clearer view of core operating performance, indicating stable cash-generating ability despite volatility in reported accounting figures. For the first nine months of fiscal 2026, total net sales climbed 23.5% to $76.6 million, while nine-month Adjusted EBITDA surged to $13.5 million from $4.0 million.
Financial Highlights
| Metric | Q3FY26 | Q3FY25 | 9M FY26 | 9M FY25 |
|---|---|---|---|---|
| Net Sales | $26.1 million | $22.1 million | $76.6 million | $62.0 million |
| Net Income (Loss) | $(0.01) per share | $(0.54) per share | $0.71 per share | $(0.07) per share |
| EBITDA | $1.3 million | $5.3 million | $8.6 million | $4.9 million |
| Adjusted EBITDA | $4.8 million | $4.4 million | $13.5 million | $4.0 million |
What the Numbers Show
The divergence between GAAP EBITDA and Adjusted EBITDA in Q3FY26 is primarily driven by the $3.2 million LIFO expense charge, reflecting rising input costs and higher inventory build-up. While this reduces reported profitability, it suggests SIFCO is stocking up on materials, potentially positioning itself for future order fulfillment. The significant jump in nine-month Adjusted EBITDA from $4.0 million to $13.5 million demonstrates that underlying operational margins have expanded considerably, even as GAAP figures remain volatile due to one-time prior-year benefits like the ERC and current-year inventory costs.
How might the $3.2 million increase in LIFO expenses impact SIFCO's gross margins if aerospace and energy input costs continue to rise in Q4?
Given the strong order backlog driving the 18.3% sales growth, what is management's guidance for full-year fiscal 2026 revenue and Adjusted EBITDA?
Will SIFCO Industries adjust its inventory procurement strategy to mitigate the volatility caused by LIFO accounting in future quarters?
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