sif-20230405FALSE000009016800000901682023-04-052023-04-05
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) – April 5, 2023
SIFCO Industries, Inc.
(Exact name of registrant as specified in its charter)
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Ohio | | 1-5978 | | 34-0553950 |
(State or other jurisdiction of incorporation) | | (Commission File Number) | | (IRS Employer Identification No.) |
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970 East 64th Street, Cleveland Ohio | | 44103 |
(Address of principal executive offices) | | (ZIP Code) |
Registrant’s telephone number, including area code: (216) 881-8600
N.A.
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ☐
Securities registered pursuant to Section 12(b) of the Act:
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| Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
| Common Shares | | SIF | | NYSE American |
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Item 2.04 | Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement. |
As reported on the Form 8-K filed on February 10, 2023, SIFCO Industries, Inc. (the “Company”) received a Notice of Event of Default and Reservation of Rights on February 6, 2023 (the “Notice”) from J.P. Morgan Chase Bank, N.A., as Lender, with respect to (i) that certain Credit Agreement dated as of August 8, 2018 (as it may be amended or modified from time to time, together with all Exhibits, Schedules and Riders annexed hereto from time to time, the “Credit Agreement”), by and among the Company, T & W Forge, LLC, an Ohio limited liability company (“T & W”), and Quality Aluminum Forge, LLC, an Ohio limited liability company (“Quality Forge”), the Loan Parties party thereto, and JPMorgan Chase Bank, N.A., a national banking association (the “Lender”); and (ii) that certain Export Credit Agreement dated as of December 17, 2018 (as it may be amended or modified from time to time, together with all Exhibits, Schedules and Riders annexed hereto from time to time, the “Export Credit Agreement”, and collectively with the Credit Agreement, the “Credit Agreements”), by and among the Company, T&W, Quality Forge, the Loan Parties party thereto, and Lender. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreements.
On April 5, 2023, the Company received written correspondence (the “Subsequent Notice”) with respect to the Credit Agreements in which Lender indicated further that (i) it is still in the process of evaluating the Existing Default described in the Notice; (ii) Lender may reduce the Reserves under the Borrowing Base in the Credit Agreements by up to $1,000,000 and may make any Loan or issue any Letter of Credit under the Credit Agreement or the Export Credit Agreement, but has no obligation to make any Loan or issue any Letter of Credit under either of the Credit Agreements or otherwise; and (iii) it may discontinue making Loans and issuing Letters of Credit under the Credit Agreements at any time and increase the Reserves at any time. The Subsequent Notice noted that Lender reserves all of its rights and remedies under the Credit Agreements and any other Loan Documents with respect thereto.
The Company continues to engage in good faith discussions with Lender to address and to seek to resolve the Existing Defaults.
The Subsequent Notice is attached hereto.
As reported by the Company on Form 12b-25 filed with the Securities and Exchange Commission (the “SEC”) on February 14, 2023, the Company experienced delays in obtaining and compiling the information required in order to complete the preparation of its financial statements to be included in its Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2022, attributable primarily to information access limitations experienced due to the cyber incident that occurred on December 30, 2022 (the “Cyber Incident”) and was reported by the Company on Form 8-K filed with the SEC on January 6, 2023 and further described by the Company on Form 8-K filed with the SEC on February 10, 2023. Accordingly, the Company was not able to complete the preparation, review and filing of its Form 10-Q for the quarter ended December 31, 2022 within the prescribed time period without unreasonable effort or expense.
As of the date of this filing, the Company has lifted information access limitations implemented in response to the Cyber Incident and is in the process of working to complete the preparation, review and filing of its Form 10-Q for the quarter ended December 31, 2022. As indicated by the Company on Form 8-K filed with the SEC on February 28, 2023, fiscal second quarter production was negatively impacted due to system constraints during the recovery. The Company as of the date of this filing continues to meet customer needs and continues to evaluate the impact to its operations, controls or financial results caused by the Cyber Incident during the applicable periods.
This Current Report on Form 8-K includes forward-looking statements. All statements other than statements of historical fact are forward-looking statements. These forward-looking statements are generally identified by the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “could” or similar expressions. Forward-looking statements are based on current expectations and assumptions, which are subject to risks and uncertainties and may cause actual results to differ materially from the forward-looking statements. In particular, our investigation into the Cyber Incident may uncover additional facts presently not known to us, which may cause us to reassess the impacts and scope of the Cyber Incident on the Company’s business and operations. Further, our ability to fully assess and remedy the Cyber Incident, and the legal, reputational and financial risks resulting from this or other cyber incidents, could also cause our results to differ materially from any forward-looking statements made above.
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Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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 hereunto duly authorized.
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| | SIFCO Industries, Inc. |
| | (Registrant) |
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Date: April 11, 2023 | | |
| | /s/ Thomas R. Kubera |
| | Thomas R. Kubera |
| | Chief Financial Officer |
| | (Principal Financial Officer) |
Document
To: The Borrowers and any other Loan Parties under the Credit Agreements referenced below
970 East 64th Street
Cleveland, Ohio 44103
Attention: Peter Knapper, President and Chief Executive Officer
Facsimile No: 216.432.6281
Re: CREDIT AGREEMENT dated as of August 8, 20 1 8 (as it may be amended or modified from time to time, together with all Exhibits, Schedules and Riders annexed hereto from time to time, each of which is hereby incorporated herein and made a part hereof, the “Credit Agreement”), by and among SIFCO
Industries, Inc., an Ohio corporation (“SIFCO”), T & W Forge, LLC, an Ohio limited liability
company (“T & W”), and Quality Aluminum Forge, LLC, an Ohio limited liability company (“Quality Forge” and, together with SIFCO and T & W, collectively, the “Borrowers” and each, individually, a
“Borrower”), the Loan Parties party hereto, and JPMorgan Chase Bank, N.A., a national banking association (the “Lender”).
EXPORT CREDIT AGREEMENT dated as of December 17, 2018 (as it may be amended or
modified from time to time, together with all Exhibits, Schedules and Riders annexed hereto from time to time, each of which is hereby incorporated herein and made a part hereof, the
Export Credit Agreement”, and collectively with the Credit Agreement, the “Credit Agreements”), by and among SIFCO Industries, Inc., an Ohio corporation (“SIFCO”), T & W Forge, LLC, an Ohio
limited liability company (“T & W”), and Quality Aluminum Forge, LLC, an Ohio limited liability company (“Quality Forge” and, together with SIFCO and T & W, collectively , the “Borrowers” and each, individually, a “Borrower”), the Loan Parties party hereto, and JPMorgan Chase Bank , N.A., a national banking association (the “Lender”).
Ladies/Gentlemen:
The Loan Parties have informed the Lender that Events of Default under the Cred it Agreements have occurred under the Credit Agreements due to the failure to deliver the required Borrowing Base Certificates thereunder and other potential Events of Default (the “Existing Defaults”).
The Lender is in the process of evaluating the Existing Default, and the Loan Parties acknowledge and
agree that the Lender (a) has not waived the Existing Default or any other Event of Default or Default
under the Credit Agreements or any other Loan Documents or any of its rights or remedies (and the
Lender reserves all of its rights and remedies, each of which shall remain in full force and effect), and
neither the making of any Loan or issuance of any Letter of Credit under the Credit Agreements nor any
other present or future action or inaction by the Lender (other than a written waiver agreement signed by
all required parties) shall be deemed a waiver of the Existing Default or any other Event of Default or
Default or any of the Lender's rights or remedies, (b) has no obligation to make any Loan or issue any
Letter of Credit 'under either of the Credit Agreements or otherwise, and may discontinue making Loans
and issuing Letters of Credit under the Credit Agreements at any time, (c) does not have any obligation to modify or amend the Credit Agreements or any other Loan Document or waive the Existing Default, and
(d) may terminate the discussions at any time in its sole discretion, and may determine that it is in its best interest to exercise its rights and remedies during the pendency of negotiations contemplated herein
without notice, and nothing herein shall operate to restrict, stay or inhibit or prohibit the Lender from exercising any such rights or remedies. Without limiting the foregoing, the Loan Parties acknowledge
and agree that the Lender may reduce the Reserves under the Borrowing Base in the Credit Agreement by
up to $1,000,000 and may make any Loan or issue any Letter of Credit under either of the Credit
Agreements, but has no obligation to make any Loan or issue any Letter of Credit under either of the
Credit Agreements or otherwise, and may discontinue making Loans and issuing Letters of Credit under
the Credit Agreements at any time and increase the Reserves at any time.
Each Loan Party agrees that each of the Credit Agreements and the other Loan Documents as defined in
each Credit Agreement (all of the foregoing, as amended, collectively, the "Loan Documents") is ratified
and confirmed and shall remain in full force and effect and that it has no set off, counterclaim, defense or
other claim or dispute with respect thereto. Each of the Loan Parties further (i) acknowledges and agrees
that the Collateral Documents continue to be in full force and effect and are not impaired or adversely
affected in any manner whatsoever, (ii) confirms its grant of security interests pursuant to the Collateral
Documents to which it is a party in all Collateral and securing all Secured Obligations, and (iii) acknowledges
that all Liens granted (or purported to be granted) pursuant to the Collateral Documents remain and continue
in full force and effect in respect of, and to secure, the Secured Obligations.
Each Loan Party represents and warrants that as of the date hereof it is not aware of any claims or causes
of action against the Lender or any of its affiliates, successors or assigns, and·that it has no defenses,
offsets or counterclaims with respect to any Loan Document. Notwithstanding this representation and as
further consideration for the agreements and understandings herein, each Loan Party, on behalf of itself and
its employees, agents, executors, heirs, successors and assigns (the "Releasing Parties"), hereby releases the
Lender and its predecessors, officers, directors, employees, agents, attorneys, affiliates, subsidiaries,
successors and assigns (the "Released Parties"), from any liability, claim, right or cause of action which now
exists or hereafter arises as a result of acts, omissions or events occurring on or prior to the date hereof,
whether known or unknown, arising from or in any way related to any Loan Document or any transactions
relating to any of the Loan Documents. '
Capitalized terms used but not defined herein shall have the respective meanings ascribed thereto in the
Credit Agreements. This letter is a Loan Document under each Credit Agreement. This letter may be signed
upon any number of counterparts with the same effect as if the signatures thereto and hereto were upon the
same instrument. Among other provisions of the Credit Agreement, this letter is subject to Sections 8.06, 8.09
and 8.10 of the Credit Agreement.
Very truly yours,
JPMorgan CHASE BANK, N.A.
By: _______________________
Title: Authorized Officer
Accepted and Agreed:
SIFCO INDUSTRIES, INC.
By: Thomas R Kubera
Title: Chief Financial Officer
Quality Aluminum Forge, LLC
By: Thomas R Kubera
Title: Treasurer
NOTICE TO SERVICE MEMBERS
The following persons may be entitled to certain legal rights and protections, including protection from foreclosure, pursuant to the Service members Civil Relief Act (50 U.S.C. App. §§ 501-596), as amended, and possibly other similar state statutes:
•Any individual borrower, guarantor, collateral pledgor or property owner who is, or recently was, a Service member on active duty;
•Any business entity, if a Service member who is, or recently was, on active duty is personally liable to Chase in a written agreement for its obligations.
Eligible service may include the following:
•Active duty with the Army, Navy, Air Force, Marine Corps, or Coast Guard;
•Active duty with the National Guard;
•Active duty as a commissioned officer of the National Oceanic and Atmospheric Administration;
•Active duty as a commissioned officer of the Public Health Service;
•Service with the forces of a nation with which the United States is allied in the prosecution of a war or military action; or
•Service with the National Guard or a state militia under a state call to duty.
Eligible service also includes any period during which a Service member is absent from duty on account of sickness, wounds, leave, or other lawful cause.
If you or any of the persons described above is such a Service member , you should contact Chase
at 1 -877-344-3080 , Monday through Friday, 8:00 a.m. to 7:00 p.m. Central Time.