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<SEC-DOCUMENT>0000950152-02-009269.txt : 20021213
<SEC-HEADER>0000950152-02-009269.hdr.sgml : 20021213
<ACCEPTANCE-DATETIME>20021213085541
ACCESSION NUMBER:		0000950152-02-009269
CONFORMED SUBMISSION TYPE:	10-K
PUBLIC DOCUMENT COUNT:		11
CONFORMED PERIOD OF REPORT:	20020930
FILED AS OF DATE:		20021213

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SIFCO INDUSTRIES INC
		CENTRAL INDEX KEY:			0000090168
		STANDARD INDUSTRIAL CLASSIFICATION:	AIRCRAFT ENGINES & ENGINE PARTS [3724]
		IRS NUMBER:				340553950
		STATE OF INCORPORATION:			OH
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		10-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-05978
		FILM NUMBER:		02856266

	BUSINESS ADDRESS:	
		STREET 1:		970 E 64TH ST
		CITY:			CLEVELAND
		STATE:			OH
		ZIP:			44103
		BUSINESS PHONE:		2168818600

	MAIL ADDRESS:	
		STREET 1:		970 EAST 64TH STREET
		CITY:			CLEVELAND
		STATE:			OH
		ZIP:			44103

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	STEEL IMPROVEMENT & FORGE CO
		DATE OF NAME CHANGE:	19690520
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>l97786ae10vk.txt
<DESCRIPTION>SIFCO INDUSTRIES, INC.  10-K/FISCAL YEAR END 9-30
<TEXT>
<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

   /X/  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934
        For the fiscal year ended September 30, 2002

                                       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 1-5978

                             SIFCO INDUSTRIES, INC.
                             ______________________
             (Exact name of registrant as specified in its charter)

              Ohio                                      34-0553950
______________________________________      ____________________________________
   (State or other jurisdiction of          (I.R.S. Employer Identification No.)
    incorporation or organization)

 970 East 64th Street, Cleveland Ohio                     44103
________________________________________    ____________________________________
(Address of principal executive offices)                (Zip Code)

                                 (216) 881-8600
                    ________________________________________
              (Registrant's telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:

      Common Shares, $1 Par Value                 American Stock Exchange
________________________________________    ____________________________________
         (Title of each class)                (Name of each exchange on which
                                                        registered)

Securities registered pursuant to Section 12(g) of the Act: NONE

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 and 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  /X/   No / /

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/

The aggregate market value of Common Shares held by non-affiliates of the
Registrant as of November 18, 2002 computed on the basis of the last reported
sale price per share of $2.90 of such stock on the American Stock Exchange, was
$8,890,510.

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).
Yes / /   No  /X/

The aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the
last business day of the registrant's most recently completed second fiscal
quarter is $17,269,079.

The number of the Registrant's Common Shares outstanding at November 18, 2002
was 5,127,733.

Documents incorporated by reference:
Portions of the Proxy Statement for Annual Meeting of Shareholders on January
28, 2003 (Part III).

<PAGE>

                                     PART I

ITEM 1. BUSINESS

A.   THE COMPANY

SIFCO Industries, Inc. ("Company"), an Ohio corporation, was incorporated in
1916. The executive offices of the Company are located at 970 East 64th Street,
Cleveland, Ohio 44103, and its telephone number is (216) 881-8600.

The Company is engaged in the production and sale of a variety of metalworking
processes, services and products produced primarily to the specific design
requirements of its customers. The processes and services include forging,
heat-treating, coating, welding, machining and selective electrochemical
finishing; and the products include forged parts, machined forgings and other
machined metal parts, remanufactured component parts for turbine engines, and
selective electrochemical finishing solutions and equipment. The Company's
operations are conducted in three business segments: (1) Turbine Component
Services and Repair Group, (2) Aerospace Component Manufacturing Group and (3)
Metal Finishing Group.

B.   PRINCIPAL PRODUCTS AND SERVICES

1. Turbine Component Services and Repair Group

The Company's Turbine Component Services and Repair Group ("Repair Group")
business is headquartered in Cork, Ireland. This business consists principally
of the repair and remanufacture of jet engine (aerospace) and heavy industrial
turbine ("HIT") engine components. The business also performs machining and
applies high temperature-resistant coatings to new turbine hardware.

Operations

The aerospace portion of the Repair Group requires the procurement of
licenses/authority, which certify that the Company has obtained approval to
perform certain proprietary repair processes. Such approvals are generally
specific to an engine and its components, a process and a repair
facility/location. Without possession of such approvals, a company would be
precluded from competing in the aerospace turbine component repair business.
Approvals are issued by either the original equipment manufacturers ("OEM") of
jet engines or the Federal Aviation Administration ("FAA"). Historically, the
aerospace portion of the Repair Group has elected to procure approvals primarily
from the OEM and currently maintains a variety of OEM proprietary repair process
approvals issued by each of the primary OEM (i.e. General Electric, SNECMA,
Pratt & Whitney, Rolls-Royce). In exchange for being granted an OEM approval,
the Repair Group is obligated to pay a royalty to the OEM for each component
repair that it performs utilizing the OEM approved proprietary repair process.
The aerospace portion of Repair Group continues to be successful in procuring
FAA repair process approvals. There is no royalty payment obligation associated
with the use of a repair process approved by the FAA. To procure an OEM or FAA
approval, the Repair Group is required to demonstrate its technical competence
in the process of repairing such turbine components.

The development of remanufacturing and repair processes is an ordinary part of
the Repair Group. The Repair Group continues to invest time and money on
research and development activities. One such activity is the development of an
advanced coating technology. At the present time, a small portion of the
Company's repair business is dependent on advanced coating processes and it
believes that it can continue to access such capabilities on a subcontract basis
when required. However, the Company believes that such requirements will likely
increase in the future. While there is a patented advanced coating technology
available for the Company to acquire, it has chosen not to do so because it
believes that the cost/benefit justification for having that particular advanced
coating capability (in-house) does not exist at this time. Instead, the Company,
as part of a research group with several other parties, is in the process of
researching and developing an equivalent/alternative, cost effective coating
technology. Operating costs related to such activities are expensed during the
period in which they are incurred.

The Company has recognized the evolution of the HIT market. The Company's
technologies have had many years of evolution in the jet engine (aerospace)
sector. The application of similar technologies to the HIT sector has resulted
in benefits to the operator. The Company has recently invested capital in both
the United States and Ireland in new equipment that facilitates the repair and
remanufacture of these larger (than aerospace) HIT components. Entry to this
sector significantly increases the market size for the application of the
Company's technologies.

                                       2

<PAGE>

The Repair Group generally has multiple, yet limited sources for its raw
materials, consisting primarily of investment castings essential to this
business. Certain items are procured directly from the OEM to satisfy repair
process requirements. Suppliers of such materials are located in many areas
throughout North America and Europe. The Repair Group generally does not depend
on a single source for the supply of its materials and management believes that
its sources are adequate for its business.

Industry

The performance of the domestic and international air transport industry
directly and significantly impacts the performance of the Repair Group.
Historically, the air transport industry's long-term outlook has for many years
been for continued, steady growth. Such outlook suggested the long-term need for
additional aircraft and growth in the requirement for aircraft and turbine
engine repairs. The events of September 11, 2001 resulted in an immediate
reduction in the demand for passenger travel both in the U.S. and
internationally. Aircraft manufacturers have announced reductions in forecasted
aircraft deliveries in the next few years as a result of reduced demand, and
many airlines have cancelled or rescheduled deliveries of new aircraft to which
they had previously committed. In addition, the financial condition of many
airlines in the U.S. and throughout the world is weak. The U.S. airline industry
has made requests for U.S. government assistance while some airlines have
entered bankruptcy proceedings, and others have announced major restructuring
initiatives, including significant reductions in service and the grounding of
aircraft These factors resulted in a decrease in orders for engine component
repairs in the most recent fiscal year, which in turn negatively impacted the
Repair Group's net sales, operating results and cash flows. It is difficult to
determine at this time what the long-term impact of these events will be on air
travel and the demand for services and products provided by the Repair Group.

While the world's fleet of aircraft has been growing, it has also been in
transition. Several older models of certain aircraft (727, 737-100/200,
747-100/200 and DC-9) and the engines (JT8D and JT9D) that power such aircraft
have either been retired from use or their in-flight service intervals are being
reduced. In addition, as a direct result of the previously mentioned reduced
demand for commercial flight miles, airlines have accelerated the timing of such
retirements. As a result, the overall demand for repairs to such older model
engines has significantly decreased. At the same time, newer generation aircraft
(newer generation 737-700/800/900 and 747-400; 767, A320, A330, A340, etc.) and
engines (CFM56, PW4000, Trent, etc.) are being introduced with newer technology
required to both operate and maintain such engines. The introduction of such
newer generation engines has in general reduced the frequency with which engines
and related components need to be repaired. The longer times between repairs has
been attributed to improved technology, including the improved ability to
monitor an engine's condition while still in operation. However, the newer
engine is more costly to repair due to the increased number of components and
associated technology.

Recent years have seen the installation of numerous power turbines as means of
increasing the available electric power to residential, commercial and
industrial consumers. The high cost of HIT unit installation and maintenance has
provided the Repair Group with the opportunity to bring value to this
significant market. HIT units are dispersed throughout the world. The uses for
such units can vary. However, the principal use is for generating electricity
for multiple applications. HIT units operate in different modes. Some units
operate on a continuous base loading at a percentage of their maximum output,
while other units may operate at maximum output during specific periods of
electric power shortages (e.g. power blackouts, peak demand periods, etc.). The
latter units are called peak power systems. In general, HIT units are managed
either by a government entity, electric power utility, or independent power
producer ("IPP"). IPP's originated principally in response to deregulation of
the organizations that operate electric power utilities. Electric power
deregulation has created greater competition and therefore, more economical
electric power for the end user. Repair and remanufacture of HIT unit components
is a growing element of cost management in the HIT industry. The Repair Group's
experience, knowledge and technology in the more demanding aerospace market
augers well for its entry to HIT market.

Competition

In recent years, while the absolute number of competitors has decreased as a
result of industry consolidation and vertical integration, competition in the
component repair business has nevertheless increased, principally due to the
increasing direct involvement of the engine manufacturer into the engine
overhaul and component repair businesses. With the entry of the OEM into the
market, there has been a general reluctance on the part of the OEM to issue, to
the independent component repair companies, its approvals for the repair of its
newer model engines and related components. However, if an OEM repair process
approval is not available, the Repair Group has, in many cases, been successful
in procuring, and subsequently marketing to its customers, FAA approvals and
related repair processes. It appears that the Repair Group will, more likely
than not, become more dependent on its ability to successfully procure and
market FAA approved licenses and related repair processes in the future and/or
on close collaboration with engine manufacturers. However, the Repair Group

                                       3

<PAGE>

believes it has partially compensated for these factors by its success in
broadening its product lines and developing new geographic markets and
customers, most recently by expanding into the repair of HIT engine components.

Repair and remanufacture of HIT engine components has evolved through the need
for the operator of electric power utilities to improve the economics of its HIT
unit operations. To participate in the HIT sector, it is necessary to have a
proven record of application of the appropriate technologies. Most competitors
involved in the HIT component repair sector are either the OEM or entities that
have a history of application of component repairs in the aerospace sector.
Metallurgical analysis of component material removed from an HIT engine
determines the precise nature of the necessary technologies to be used to return
the component to service. The determination of qualification to repair such
components is the responsibility of the HIT unit owner/operator. Several OEM
such as ABB, General Electric, Siemens, Alstom, Fiat, etc. participate to
varying degrees in the repair and remanufacture of HIT components. The Repair
Group's broad product capability (multiple OEM types) and technology base augurs
well for continued growth in the sector.

Customers

The identity and ranking of the Repair Group's principal customers can vary from
year to year. The Repair Group attempts to rely on its ability to adapt its
services and operations to changing requirements of the market in general and
its customers in particular, rather than relying on high volume production of a
particular item or group of items for a particular customer or customers. During
fiscal 2002, the Repair Group had two customers that accounted for 12% and 9% of
the segment's net sales, Fiat Avio and Lufthansa AG, respectively. Although
there is no assurance that this will continue, historically as one or more major
customers have reduced their purchases, the business has generally been
successful in replacing such reduced purchases, thereby avoiding a material
adverse impact on the business. No material part of the Repair Group's business
is seasonal.

Backlog of Orders

The Repair Group's backlog as of September 30, 2002 decreased to $5.3 million,
of which $4.2 million is scheduled for delivery during fiscal 2003 and $1.1
million is on hold, compared with $7.8 million as of September 30, 2001, of
which $6.2 million was scheduled for delivery during fiscal 2002 and $1.1
million was on hold. All orders are subject to modification or cancellation by
the customer with limited charges. The Repair Group believes that the backlog
may not necessarily be indicative of actual sales for any succeeding period.

2. Aerospace Component Manufacturing Group

Operations

The Company's Aerospace Component Manufacturing Group ("ACM Group") is a
manufacturer of medium-sized forged parts ranging in size from 2 to 400 pounds
(depending on configuration and alloy) in various alloys utilizing a variety of
processes for application in the aerospace and other industrial markets. The ACM
Group's forged products include: OEM and aftermarket components for aircraft and
land-based turbine engines; structural airframe components; components for
aircraft landing gear, wheels and brakes; critical rotating components for
helicopters; and commercial/industrial products. The ACM Group also provides
heat-treatment and some machining of forged parts.

The forging, machining, or other preparation of prototype parts to customers'
specifications, which may require research and development of new parts or
designs, is an ordinary part of the ACM Group.

The ACM Group has many sources for its raw materials, consisting primarily of
high quality metals essential to this business. Suppliers of such materials are
located in many areas throughout North America and Europe. The ACM Group does
not depend on a single source for the supply of its materials and believes that
its sources are adequate for its business. The business is ISO 9002-1994
registered and AS9100-1999 certified. In addition, the ACM Group's heat-treating
facilities are NADCAP (National Aerospace and Defense Contractors Accreditation
Program) certified.

Industry

The performance of the domestic and international air transport industries
directly and significantly impacts the performance of the ACM Group.
Historically, the air transport industry's long-term outlook has for many years
been for continued steady growth. Such outlook suggested the long-term need for
additional aircraft and growth in the requirement for aircraft and turbine
engines. The events of September 11, 2001 resulted in an immediate reduction in
the demand for passenger travel both in the U.S. and internationally. Aircraft
manufacturers have announced reductions in forecasted

                                       4

<PAGE>

aircraft deliveries in the next few years as a result of reduced demand, and
many airlines have cancelled or rescheduled deliveries of new aircraft to which
they had previously committed. In addition, the financial condition of many
airlines in the U.S. and throughout the world is weak. The U.S. airline industry
has made requests for U.S. government assistance while some airlines have
entered bankruptcy proceedings, and others have announced major restructuring
initiatives, including significant reductions in service and the grounding of
aircraft These factors resulted in a decrease in orders for airframe and engine
components in the most recent fiscal year, which in turn negatively impacted the
ACM Group's net sales, operating results and cash flows. The ACM business also
supplies new and spare components for military aircraft. Increases in military
component net sales have partially offset the decreases in commercial aerospace
components.

Competition

There is excess capacity in many segments of the forging industry. The ACM Group
believes this limits the ability to raise prices. The ACM Group believes,
however, that its focus on quality, customer service and offering a broad range
of capabilities help to give it an advantage in the primary markets it serves.
The ACM Group believes it can broaden its product lines by developing new
customers in markets which require similar technical competence, quality and
service as the aerospace industry.

Customers

During fiscal 2002, the ACM Group segment had one customer, Rolls-Royce
Corporation, which accounted for 25% of the segment's net sales. The ACM Group
believes that the total loss of sales to such customer would result in a
materially adverse impact on the business and income of the ACM Group. However,
the ACM Group has maintained a business relationship with this customer for well
over ten years and is currently conducting business with it under a multi-year
contract. Although there is no assurance that this will continue, historically
as one or more major customers have reduced their purchases, the ACM Group has
generally been successful in replacing such reduced purchases, thereby avoiding
a material adverse impact on the business. The ACM Group attempts to rely on its
ability to adapt its services and operations to changing requirements of the
market in general and its customers in particular. No material part of the
Company's ACM Group's business is seasonal.

Backlog of Orders

The ACM Group's backlog as of September 30, 2002 decreased to $24.9 million, of
which $21.9 million is scheduled for delivery during fiscal 2003 and $0.1
million is on hold, compared with $28.0 million as of September 30, 2001, of
which $24.8 million was scheduled for delivery during fiscal 2002 and $0.2
million was on hold. All orders are subject to modifications or cancellation by
the customer with limited charges. The ACM Group believes that the backlog may
not necessarily be indicative of actual sales for any succeeding period.

3. Metal Finishing Business Group

The Company's Metal Finishing Group is a provider of specialized electrochemical
technologies, including the electroplating process called "brush plating", as
well as anodizing and electropolishing systems, which are used to apply metal
coatings and finishes to a selective area of a component. The Metal Finishing
Group's SIFCO Selective Plating business provides (i) equipment and metal
solutions to customers to do their own in-house selective electrochemical
finishing and (ii) provides custom selective electrochemical finishing on a
contract service basis to customers who choose to outsource the work.

Operations

A variety of metals, determined by the customer's design requirements, can be
brush plated onto metal surfaces. Metals available using SIFCO Process solutions
include: cadmium, cobalt, copper, nickel, tin and zinc. Precious metal solutions
such as gold, iridium, palladium, platinum, rhodium, and silver are also
available. The Metal Finishing Group has also developed a number of
alloy-plating solutions including: nickel-cobalt, nickel-tungsten,
cobalt-tungsten, and tin-zinc. It also offers a complete line of functional
chromic, sulfuric, hard coat, phosphoric and boric-sulfuric anodizing finishes
and electropolishing. The Metal Finishing Group's process has a wide range of
both manufacturing and repair applications to functionally enhance, protect or
restore the underlying component. The process is considered environmentally
friendlier than traditional plating methods because it does not require the use
of tanks and, therefore, it requires smaller amounts of solutions and generates
less waste.

                                       5

<PAGE>

While the Metal Finishing Group offers the equipment and solutions to customers
so that they can conduct their own selective electrochemical finishing
operations, it also offers to provide services to customers that either do not
want to invest in the equipment, do not want to have responsibility for
hazardous materials, or who have decided to outsource non-core operations.
Selective electrochemical finishing services occur either at one of the Group's
job shop service facilities or at the customer's site by highly trained service
technicians. Service center facilities are located within a six-hour drive of
most major industrial locations in the United States and in Europe.

The Metal Finishing Group generally has multiple, yet limited sources for its
raw materials, consisting primarily of various industrial chemicals and metal
salts, as well as graphite anodes and other electronic components for equipment
manufactured by the Group. There are multiple sources for all these materials
and the Metal Finishing Group generally does not depend on a single source for
the supply of its materials, so Management believes that its sources are
adequate for its business.

The Metal Finishing Group sells its products and services under the following
brand names: SIFCO Process(R), Dalic(R), USDL(R) and Selectron(R), all of which
are specified in military and industrial specifications. The business has
ISO-9002-1994 certification and is AS 9000 compliant at its primary U.S.
facility. In addition, both of its European facilities have ISO-9002-1994
certification. All of its other regional service centers are ISO-9002-1994
compliant, and in addition a certain facility is NADCAP (National Aerospace and
Defense Contractors Accreditation Program) certified. Three of the service
centers are FAA approved repair shops. Other Metal Finishing Group approvals
include ABS (American Bureau of Ships), ARR (American Railroad Registry), FAA
(Federal Aviation Administration), JRS (Japan Registry of Shipping), and KRS
(Korean Registry of Shipping). The Group anticipates that during fiscal 2003 it
will upgrade its U.S. and European facility certifications to ISO-9001-2000, as
well as obtain AS-9100 and NADCAP certifications for certain facilities.

Industry

While the Metal Finishing Group fits into the broad metal finishing industry, it
fills a very specific niche where either engineering demands for finishing only
selective areas of a component or scheduling requirements preclude other metal
finishing options. The Metal Finishing Group's process is used to provide
functional, engineering finishes, as opposed to decorative, in a variety of
industries, including aerospace, heavy machinery, medical, petroleum
exploration, electric power generation, pulp and paper, printing and railroad.
The diversity of industries served helps to mitigate the impact of economic
cycles on the business.

Competition

Brush plating technology was developed in the 1940's in France and virtually
everyone involved in this industry draws their formulations from the same core
technology. The industry is fragmented into numerous product and service
suppliers, resulting in a highly competitive environment. The Metal Finishing
Group attempts to differentiate itself from the competition by creating high
value applications for larger, technically demanding customers. The Metal
Finishing Group believes that it is the largest supplier of selective
electrochemical finishing supplies and service in the world and the only
supplier with strong technical and product development capabilities.

Customers

The Metal Finishing Group has a customer base of over 1,000 customers. However,
approximately 25 customers, all of whom come from a variety of industries,
account for approximately 50% of the Group's annual sales. In fiscal 2002, no
one customer accounted for 10% or more of the Group's net sales. No material
part of the Metal Finishing Group's business is seasonal.

Backlog of Orders

The Metal Finishing Group essentially had no backlog at September 30, 2002 and
2001.

4. General

For financial information concerning the Company's reportable business segments
see Note 13 of Notes to Consolidated Financial Statements.

                                       6

<PAGE>

C.   ENVIRONMENTAL REGULATIONS

In common with other companies engaged in similar businesses, the Company has
been required to comply with various laws and regulations relating to the
protection of the environment. The costs of such compliance have not had, and
are not presently expected to have, a material effect on the capital
expenditures, earnings or competitive position of the Company and its
subsidiaries under existing regulations and interpretations.

D.   EMPLOYEES

The number of the Company's employees decreased from 780 at the beginning of
fiscal year 2002 to 643 at the end of fiscal year 2002. The Company is a party
to collective bargaining agreements with its hourly employees located at the
Cleveland, Ohio; Minneapolis, Minnesota; and Cork, Ireland facilities.
Management considers its relations with the Company's employees to be good.

E.   NON-U.S. OPERATIONS

The Company's products and services are distributed and performed in U.S. as
well as non-U.S. markets. The Company commenced its operations in Ireland in
1981. The Company commenced its operations in the United Kingdom and France as a
result of an acquisition of a business in 1992. Wholly owned subsidiaries
operate service and distribution facilities in Ireland, United Kingdom and
France.

Financial information about the Company's U.S. and non-U.S. operations is set
forth in Note 13 to the Consolidated Financial Statements.

As of September 30, 2002, essentially all of the Company's cash and cash
equivalents are in the possession of its non-U.S. subsidiaries and relate to
undistributed earnings of these non-U.S. subsidiaries. The Company considers the
undistributed earnings, accumulated prior to October 1, 2000, of its non-U.S.
subsidiaries to be indefinitely reinvested in operations outside the U.S. During
fiscal 2002, the Company received a distribution of $2.5 million from one of its
non-U.S. subsidiaries' fiscal 201 earnings. During the first quarter of fiscal
2003, the Company intends to receive an additional distribution of $1.5 million
from its non-U.S. subsidiaries' fiscal 2001 earnings.

ITEM 2. PROPERTIES

The Company's property, plant and equipment include the plants described below
and a substantial quantity of machinery and equipment, most of which is industry
specific machinery and equipment using special jigs, tools and fixtures and in
many instances having automatic control features and special adaptions. In
general, the Company's property, plant and equipment are in good operating
condition, are well maintained and substantially all of its facilities are in
regular use. The Company considers its investment in property, plant and
equipment as of September 30, 2002 suitable and adequate given the current
product offerings for the respective business segments' operations in the
current business environment. The square footage numbers set forth in the
following paragraphs are approximations:

         -    The Turbine Component Services and Repair Group has five (5)
              facilities with a total of 264,000 square feet that are involved
              in the repair and remanufacture of jet engine and industrial
              turbine components. Three of these plants are located in Cork,
              Ireland (137,000 square feet), one in Minneapolis, Minnesota
              (59,000 square feet) and one in Tampa, Florida (68,000 square
              feet). A portion of the Minneapolis plant is also the site of some
              of the Repair Group's machining operations. All of these
              facilities are owned.

         -    The Aerospace Component Manufacturing Group operates in a single
              owned 262,000 square foot facility located in Cleveland, Ohio.
              This facility is also the site of the Company's corporate
              headquarters.

         -    The Metal Finishing Group is headquartered in an owned 30,000
              square foot plant in Independence, Ohio. The Metal Finishing Group
              operates a leased 6,000 square foot plant in Redditch, England.
              The Metal Finishing Group also leases space for sales offices
              and/or for its contract selective electrochemical finishing
              services in Norfolk, Virginia; Hartford (East Windsor),
              Connecticut; Los Angeles (San Dimas), California; Tacoma (Fife),
              Washington; Houston, Texas; and Paris (Saint Maur Cedex), France
              (totaling approximately 31,000 square feet).

                                       7

<PAGE>

ITEM 3. LEGAL PROCEEDINGS

In the normal course of business, the Company may, from time to time, be
involved in pending legal actions. To the knowledge of the Company, the only
pending legal actions existing as of September 30, 2002, in which the Company
was a defendant, consist of the following:

         -    In September 2000, a former employee ("Plaintiff") filed a
              complaint in the Cuyahoga County Court of Common Pleas alleging
              certain wrongdoing on the part of the Company, including wrongful
              termination of the Plaintiff. The Plaintiff seeks unspecified
              compensatory and punitive damages. Plaintiff voluntarily dismissed
              the suit without prejudice during 2001. The Plaintiff re-filed the
              complaint in August 2002. The Company believes that the
              allegations are without merit and intends to vigorously defend its
              position.

         -    In October 2001, a former employee ("Plaintiff") filed a complaint
              in the Cuyahoga County Court of Common Pleas alleging certain
              wrongdoing on the part of the Company, including wrongful
              termination of the Plaintiff. In November 2002, the Plaintiff
              agreed to dismiss this claim in conjunction with entering into a
              settlement agreement with the Company, the financial impact of
              which is included in corporate unallocated expenses in the 2002
              Consolidated Statements of Operations.

In addition to the matters noted above, in the normal course of business, the
Company maybe involved in other pending legal actions. The Company cannot
reasonably estimate future costs related to these matters and other matters that
may arise, if any. Although it is possible that the Company's future operating
results could be affected by future cost of litigation, it is management's
belief at this time that such costs will not have a material adverse affect on
the Company's consolidated financial position or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth
quarter of the Company's 2002 fiscal year.

                                       8

<PAGE>

EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth certain information regarding the executive
officers of the Company.

Name                            Age        Title and Business Experience
- ----                            ---        -----------------------------
Jeffrey P. Gotschall (1)         54       Chairman of the Board since August
                                          2001; Director of the Company since
                                          1986; Chief Executive Officer since
                                          1990; President from 1989 to 2002;
                                          Chief Operating Officer from 1986 to
                                          1990; Executive Vice President from
                                          1986 to 1989; and from 1985 to 1989,
                                          President of SIFCO Turbine Component
                                          Services.

Timothy V. Crean                 54       President and Chief Operating Officer
                                          since August 2002; Executive
                                          Vice-President of SIFCO Industries,
                                          Inc. from 1998 to 2002; Managing
                                          Director of the SIFCO Turbine
                                          Components Services and Repair Group
                                          from 1995 to 2002, and Managing
                                          Director of SIFCO Turbine Components,
                                          Ltd. from 1986 to 2002.

Frank A. Cappello                44       Vice President-Finance and Chief
                                          Financial Officer since February 2000,
                                          when he initially joined the Company.
                                          Prior to joining the Company, Mr.
                                          Cappello was employed by ASHTA
                                          Chemicals Inc, a commodity chemical
                                          manufacturer, from August 1990 to
                                          December 1991 and from June 1992 to
                                          February 2000, last serving as Vice
                                          President Finance and Administration
                                          and Chief Financial Officer; and
                                          previously KPMG LLP, last serving as a
                                          Senior Manager in its Assurance Group.

Hudson D. Smith (1)              51       Director of the Company since 1988.
                                          Mr. Smith has served as Treasurer of
                                          the Company since 1983 and President
                                          of the Aerospace Component
                                          Manufacturing Group since 1998. Mr.
                                          Smith previously served as Vice
                                          President and General Manager of SIFCO
                                          Forge Group from 1995 to 1997; General
                                          Manager of SIFCO Forge Group's
                                          Cleveland Operations from 1989 to 1995
                                          and Group General Sales Manager of
                                          SIFCO Forge Group from 1985 to 1989.

Carolyn J. Buller, Esq.          47       Secretary and General Counsel since
                                          November 2000. Ms. Buller is a partner
                                          in the law firm of Squire, Sanders &
                                          Dempsey LLP, and has been an attorney
                                          with the firm since 1981.

Remigijus H. Belzinskas          46       Corporate Controller since June 2000,
                                          when he initially joined the Company.
                                          Prior to joining the Company, Mr.
                                          Belzinskas was employed by Signature
                                          Brands, Inc., a manufacturer and
                                          distributor of consumer products, from
                                          August 1990 to December 1999, serving
                                          as Corporate Controller; and
                                          previously by KPMG LLP, last serving
                                          as a Senior Manager in its Assurance
                                          Group.

(1) Hudson D. Smith and Jeffrey P. Gotschall are cousins.

                                       9

<PAGE>

                                     PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER
MATTERS

The Company's Common Shares are traded on the American Stock Exchange under the
symbol "SIF". The following table sets forth, for the periods indicated, the
high and low sales price for the Company's Common Shares as reported by the
American Stock Exchange.

<TABLE>
<CAPTION>
                                                       YEARS ENDED SEPTEMBER 30,
                                                       -------------------------
                                                        2002                2001
                                                        ----                ----
                                                   HIGH      LOW       HIGH      LOW
                                                   ----      ---       ----      ---
<S>                                              <C>       <C>       <C>       <C>
First Quarter.................................   $  5.70   $  4.50   $  6.38   $  4.56
Second Quarter................................      5.95      4.55      5.88      4.55
Third Quarter.................................      5.94      5.15      6.05      4.40
Fourth Quarter................................      5.15      2.85      7.45      4.60
</TABLE>

The Company has not declared or paid any cash dividends within the last two (2)
fiscal years and does not anticipate paying any such dividends in the
foreseeable future. The Company currently intends to retain all of its earnings
for the operation and expansion of its businesses. At November 18, 2002, there
were approximately 740 shareholders of record of the Company's Common Shares, as
reported by National City Corporation, the Company's Transfer Agent and
Registrar, which maintains its corporate offices at National City Center, 1900
East Ninth Street, Cleveland, Ohio 44101-0756.

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

The following table sets forth selected consolidated financial data of the
Company. The data presented below should be read in conjunction with the audited
Consolidated Financial Statements and Notes to Consolidated Financial Statements
included in Item 8.

<TABLE>
<CAPTION>
                                                                               YEARS ENDED SEPTEMBER 30,
                                                                               -------------------------
                                                                2002         2001         2000         1999         1998
                                                                ----         ----         ----         ----         ----
                                                                       (AMOUNTS IN THOUSAND, EXCEPT PER SHARE DATA)
<S>                                                          <C>          <C>          <C>          <C>          <C>
STATEMENT OF OPERATIONS DATA
Net sales..............................................      $   80,033   $  105,633   $  106,138   $  115,490   $  123,175
Income (loss) before income tax provision benefit).....         (13,448)       4,668        2,479        4,105       11,609
Income tax provision (benefit).........................            (462)       1,694           57          332        2,324
Net income (loss)......................................         (12,986)       2,974        2,422        3,773        9,285
Net income (loss) per share (basic)....................           (2.49)        0.58         0.47         0.73         1.80
Net income (loss) per share (diluted)..................           (2.49)        0.58         0.47         0.72         1.78
Cash dividends per share...............................              --           --         0.20         0.20         0.20

SHARES OUTSTANDING AT YEAR END.........................           5,258        5,237        5,134        5,193        5,170

BALANCE SHEET DATA
Working capital........................................      $   19,525   $   36,943   $   28,676   $   31,924   $   32,102
Property, plant and equipment, net.....................          29,106       29,383       29,009       31,392       32,582
Total assets...........................................          67,339       86,596       80,500       88,662       93,011
Long-term debt, net of current maturities..............          11,093       15,107       11,962       12,985       16,500
Total shareholders' equity.............................          36,735       49,374       45,500       50,046       49,890
Shareholders' equity per share.........................            6.99         9.43         8.86         9.64         9.65

FINANCIAL RATIOS
Return on beginning shareholders' equity...............           (26.3)%        6.5%         4.8%         7.6%        22.9%
Long-term debt to equity percent.......................            30.2%        30.6%        26.3%        25.9%        33.1%
Current ratio..........................................             2.3          3.3          2.6          2.6          2.5
</TABLE>

                                       10

<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

SIFCO Industries, Inc. and its subsidiaries engage in the production and sale of
a variety of metalworking processes, services and products produced primarily to
the specific design requirements of its customers. The processes and services
include forging, heat-treating, coating, welding, machining and selective
electrochemical finishing. The products include forgings, machined forged parts
and other machined metal parts, remanufactured component parts for turbine
engines, and selective electrochemical finishing solutions and equipment.

RESULTS OF OPERATIONS

FISCAL YEAR 2002 COMPARED WITH FISCAL YEAR 2001

In fiscal 2002, net sales decreased 24.2% to $80.0 million from $105.6 million
in 2001. Net loss for the year ended September 30, 2002 was $13.0 million, or
$2.49 per diluted share, compared with net income of $3.0 million, or $0.58 per
diluted share, in fiscal 2001.

TURBINE COMPONENT SERVICES AND REPAIR GROUP ("REPAIR GROUP")

The Repair Group, which accounted for 45.7% of the Company's business in fiscal
2002, had net sales of $36.5 million, down 32.8% from the $54.4 million level in
2001. Component repair sales were down approximately $11.4 million in fiscal
2002 compared to fiscal 2001. Demand for component repairs for virtually all
models of large jet engines, especially the older model JT8D engines, was down
in fiscal 2002 compared to fiscal 2001. The continued retirement and reduced
utilization of older generation aircraft that negatively impacted the Company in
fiscal 2001 was accelerated/exacerbated during fiscal 2002 as a direct
consequence of the September 11, 2001 terrorist attacks on the United States, as
many airlines chose to reduce capacity by retiring many of the older aircraft in
their fleets. In addition, the impact of the terrorist attacks on the commercial
airline industry in general has also resulted in the reduced demand for
component repairs for the CFM-56 (General Electric /Snecma), RB211 and Tay (both
Rolls-Royce) engines due to reduced commercial flight demand, which determines
the need for such repairs. However, higher demand for component repairs for
smaller jet engines and heavy industrial turbine engines partially offset the
decline in demand for component repairs for the large jet engines. Revenues
associated with the demand for replacement parts, which complement component
repair services provided to customers, were down approximately $6.5 million in
fiscal 2002 compared to fiscal 2001 due principally to the reduced component
repair volumes in general.

During fiscal 2002, the Repair Group's selling, general and administrative
expenses increased $1.9 million to $7.8 million, or 21.4% of net sales, from
$5.9 million, or 10.9% of net sales, in fiscal 2001. Included in the $7.8
million of selling, general and administrative expenses for fiscal 2002 were
$1.9 million of charges related to goodwill and equipment impairments, $0.9
million of restructuring charges, and a $0.3 million increase in a reserve
related to a vendor dispute. The remaining $4.7 million of selling, general and
administrative expenses for fiscal 2002 represented 12.9% of net sales and
reflected an $0.8 million reduction in the Repair Group's provision for doubtful
accounts, when compared to fiscal 2001.

Operating income (loss) in fiscal 2002 decreased $14.1 million to an $11.5
million loss from $2.6 million of income in fiscal 2001. Included in the
decreased operating results for fiscal 2002 were charges aggregating $6.1
million, $1.8 million of which were incurred in the fourth quarter, related to
the impairment of inventory ($3.3 million), the impairment of goodwill ($0.7
million), the impairment of equipment ($1.2 million), and the $0.9 million of
restructuring charges. During fiscal 2002, the Repair Group performed
evaluations of its existing operations primarily in light of the current and
anticipated impacts of the September 11, 2001 terrorist attacks on its business.
The principal result of these evaluation processes was the decision to
optimize/rationalize the Repair Group's multiple operations by reducing its
capacity for the repair of certain components, principally related to older
generation JT8D turbine engines, and the Repair Group's decision to optimize the
size of its workforce. As a result of these decisions, the Repair Group
recognized, during fiscal 2002, the aforementioned charges. In addition, the
Repair Group increased by $0.3 million, the reserve related to a vendor dispute.
The remaining $7.7 million decrease in operating results during fiscal 2002,
compared to fiscal 2001, was primarily due to the negative impact on margins of
the significantly reduced sales volumes for component repair services and
related replacement parts. The restructuring actions taken by the Repair Group
in fiscal 2002 are expected to have a positive impact on fiscal 2003 operating
costs when compared to fiscal 2002. The Repair Group will continue to evaluate
the need for additional optimization/rationalization of operations if and to the
extent that the demand for component repair services may not recover in the
future.

                                       11

<PAGE>

AEROSPACE COMPONENT MANUFACTURING GROUP ("ACM GROUP")

Net sales for fiscal 2002 decreased 18.9% to $33.2 million, compared with $40.9
million in fiscal 2001. Approximately $6.4 million of this decrease in net sales
is attributable to a decrease in the number of AE series new generation jet
engines built by Rolls-Royce Corporation for business and regional jets, as well
as military transport and surveillance aircraft, as a direct consequence of
reduced flight schedules, cancellation of aircraft orders, workforce reductions,
and declining financial performance of the airline industry as a consequence of
the September 11, 2001 terrorist attacks on the United States. As a further
consequence of the overall decline in the airline industry, net sales of
commercial aircraft airframe components declined approximately $2.9 million in
fiscal 2002, compared with fiscal 2001. Net sales in fiscal 2002 were also
negatively impacted by a $1.0 million reduction in selling prices to the ACM
Group's largest customer, Rolls-Royce Corporation, that was implemented during
the first quarter of fiscal 2002. Net sales of non-aerospace related components
in fiscal 2002 declined approximately $0.7 million, compared with fiscal 2001.
These decreases in net sales were partially offset by an approximately $3.3
million net increase in shipments of military airframe and engine components in
fiscal 2002, compared with fiscal 2001.

Selling, general and administrative expenses in fiscal 2002 were $3.3 million.
The primary factor impacting the ACM Group's selling, general and administrative
expenses in fiscal 2002 is a $0.9 million charge incurred in connection with the
settlement, during the second quarter of fiscal 2002, of an employment action
and a related claim that the Company had filed against its insurance carrier for
its failure to provide coverage. Selling, general and administrative expenses
before this legal accrual was $2.4 million in fiscal 2002, compared with $2.2
million in fiscal 2001. Selling, general and administrative expenses were
negatively impacted in fiscal 2002 by a $0.2 million increase in the ACM Group's
provision for doubtful accounts and a $0.1 million increase in employee benefit
expenses, offset by lower travel and other discretionary expenses.

The ACM Group's operating loss in fiscal 2002 was $0.3 million, compared with
operating income of $3.5 million in fiscal 2001. The ACM Group's operating
results in fiscal 2002 were impacted by the $0.9 million legal accrual discussed
above. In fiscal 2002, the ACM Group's operating income before legal accrual was
$0.6 million, or 1.7% of net sales, compared with $3.5 million, or 8.5% of net
sales, in fiscal 2001. The ACM Group's operating results in fiscal 2002 were
also negatively impacted by a $1.0 million reduction in selling prices to
Rolls-Royce Corporation, its largest customer, that was implemented during the
first quarter of fiscal 2002 and is expected to affect future periods. Operating
results were negatively impacted in 2002 by a $0.2 million LIFO provision,
compared with a $0.1 benefit in 2001. The remaining $1.6 million decrease in
operating income in fiscal 2002, compared with fiscal 2001, was primarily due to
the negative impact on operating income of the reduced operating levels in 2002.
Operating results as a percentage of net sales was negatively impacted in fiscal
2002 by the interplay between overall lower net sales in relation to fixed
manufacturing costs. This was offset in part by lower material cost in 2002 due
to product mix consisting of a greater percentage of products made from lower
cost materials than in 2001. Fiscal 2002 operating results also benefited from
lower utilization of outside services, such as heat-treating, as in-house
capabilities were sufficient to support such requirements. During fiscal 2002,
the ACM Group took a number of actions, including a salary freeze, cutbacks in
discretionary spending and other cost containment and cost reduction actions, to
mitigate, in part, the impact of significantly reduced revenues.

METAL FINISHING GROUP

Net sales were $10.3 million in both fiscal 2002 and 2001. In fiscal 2002
product net sales, consisting of selective electrochemical finishing equipment
and solutions, declined 7.2% to $5.9 million, compared with $6.4 million in
fiscal 2001. Product net sales continued the decline that began in the first
quarter of fiscal 2002 due to the overall weakness in most markets served by the
Metal Finishing Group, including aerospace, power generation, petroleum, steel,
and railroad industries. In fiscal 2002, contract service net sales increased
12.9% to $4.2 million, compared with $3.8 million in fiscal 2001. Overall,
declines in net sales to commercial customers were offset by increased sales to
military customers.

Selling, general and administrative expenses were $2.9 million in both fiscal
2002 and 2001. In fiscal 2002, selling, general and administrative expenses
benefited from lower advertising, travel and commissions expenditures, offset by
higher compensation and employee benefit expenses. The Metal Finishing Group
does not necessarily anticipate experiencing similar levels of expenditures for
advertising and travel in future periods as economic conditions within the
industries served by the Metal Finishing Group improve.

The Metal Finishing Group's operating income in fiscal 2002 was $1.5 million, or
14.5% of net sales, compared with $1.7 million, or 16.7% of net sales, in fiscal
2001. Operating income in fiscal 2002, compared with fiscal 2001, was negatively
impacted by a shift in sales mix to higher contract service sales, which
generate a lower margin than product sales. Additionally, a shift in the mix of
contract service sales toward smaller contracts also negatively impacted
operating results.

                                       12

<PAGE>

Operating income in fiscal 2002 was also negatively impacted by additional fixed
costs associated with a new service facility that opened in fiscal 2002 that has
not reached full operating levels.

CORPORATE UNALLOCATED EXPENSES

Corporate unallocated expenses, consisting of corporate salaries and benefits,
legal and professional and other corporate expenses, were $1.9 million in both
fiscal 2002 and 2001. Corporate unallocated expenses were favorably impacted in
2002 by $0.2 million of lower expenses related to management incentive and
public company expenses. During 2002, additional staffing, employee benefit and
general insurance expenses totaling $0.2 million, partially offset the favorable
decreases. The decrease in management incentive expense is attributable to the
financial performance of the Company, while the decline in public company
expenses is in part the result of the reduction in the size of the Company's
Board of Directors.

OTHER/GENERAL

Interest income was $0.3 million in fiscal 2002, compared with $0.5 million in
fiscal 2001. The reduction in interest income is attributable to lower average
cash and cash equivalent balances outstanding and lower interest rates during
2002, compared with 2001. Interest expense in fiscal 2002 was $0.8 million,
compared with $1.2 million in fiscal 2001. The decrease in interest expense is
attributable to overall lower borrowings outstanding under the Company's
revolving credit agreement, as well as lower interest rates.

Foreign currency exchange gain was minimal in fiscal 2002, compared with a
foreign currency exchange loss of $0.6 million in fiscal 2001. Effective October
1, 2001, the Company changed the functional currency of its Irish subsidiary
from the local currency to the U.S. dollar. The functional currency was changed
because a substantial majority of the subsidiary's transactions are now
denominated in U.S. dollars.

Other expense increased $0.6 million in fiscal 2002, compared with fiscal 2001,
as a result of a $0.8 million provision recorded in 2002 to adjust the amount of
the unamortized portion of deferred grant revenue for a possible future
repayment obligation due to the Company's recently reduced employment levels.
See Note 4 to the Consolidated Financial Statements for further discussion. This
provision was partially offset by an increase in the amount of nonrefundable
research and other grants received during fiscal 2002, compared with fiscal
2001, as well as a one-time gain from the sale of the ACM Group's interest in
certain natural gas wells.

The Company's fiscal 2002 income tax benefit of $0.5 million consists primarily
of anticipated tax refunds from the carryback of a non-U.S. operating loss. In
the fourth quarter of fiscal 2002, the Company recognized a $2.6 million
valuation allowance against its net U.S. deferred income tax assets, which were
primarily recorded during the first three quarters of fiscal 2002. In assessing
the Company's ability to realize its net deferred tax assets, management
considered whether it is more likely than not that some portion or all of its
net deferred tax assets may not be realized. Management considered the scheduled
reversal of deferred tax liabilities, projected future taxable income and tax
planning strategies in making this assessment. Future reversal of the valuation
allowance will be achieved either when the tax benefit is realized or when it
has been determined that is more likely than not that the benefit will be
realized through future taxable income.

FISCAL YEAR 2001 COMPARED WITH FISCAL YEAR 2000

In 2001, net sales decreased 0.5% to $105.6 million from $106.1 million in 2000.
Net income increased 22.8% to $3.0 million, or $0.58 per diluted share, in 2001
from $2.4 million, or $0.47 per diluted share, in 2000.

TURBINE COMPONENT SERVICES AND REPAIR GROUP ("REPAIR GROUP")

The Repair Group, which accounted for 51% of the Company's business in fiscal
2001, had net sales of $54.4 million, down 11.8% from $61.7 million in fiscal
2000. Repair volumes for older model engine types continued the decline that the
Company experienced during fiscal 2000. As the Company expected, demand for
repairs to the older model JT8D (Pratt & Whitney) engines continue to decline
due to the continued retirement and reduced utilization of older model aircraft.
In addition, there was a reduced volume of repairs to the CFM-56 (General
Electric/SNECMA) and RB211 (Rolls-Royce) engines principally as a result of the
increased direct involvement of the jet engine manufacturers into the repair
marketplace. However, the Repair Group was able to show stronger repair volumes
with respect to the Tay (Rolls-Royce) and PW4000 (Pratt & Whitney) engines,
which represent some of the Group's newer programs. Revenue associated with the
demand for replacement parts that complement the repair services provided to
customers were also down in fiscal 2001 because of the reduced repair volumes in
general.

                                       13

<PAGE>

During fiscal 2001, the Repair Group's selling, general and administrative
expenses increased to $5.9 million, or 10.9% of net sales, from $5.6 million, or
9.1% of net sales in fiscal 2000. During fiscal 2001, the Repair Group recorded
an increase in bad debt expense of $0.8 million, when compared to fiscal 2000,
of which $0.2 million was recorded in the fourth quarter of fiscal 2001. The
increase in bad debt expense was partially offset by the positive impact of a
weaker Euro as discussed below.

Operating income in fiscal 2001 increased to $2.6 million, or 4.8% of net sales,
from $2.3 million, or 3.8% of net sales, in fiscal 2000. Reduced sales volumes
for repair services again adversely impacted the Repair Group's operating
income. During fiscal 2001, the Repair Group's operating income was also
negatively impacted by an increase in its reserve for obsolete replacement parts
inventory of $0.7 million, when compared to 2000, of which $0.6 million was
recorded in the fourth quarter of fiscal 2001. These negative impacts were
partially offset by the positive impact of improved margins on the sales of
replacement parts. Lower costs in 2001 for used replacement parts that could be
refurbished, resulted in improved margins on the sale of replacement parts.
However, the overwhelming contributor to the Repair Group's sustained operating
profit, in spite of its reduced sales volumes and additional reserve provisions,
has been the positive impact on the Group's margins of the further weakening of
the Euro in relation to the U.S. dollar during fiscal 2001, when compared to
fiscal 2000. Such positive impact accounted for approximately $2.5 million in
operating income. The vast majority of the Repair Group's U.S. and non-U.S.
sales are denominated in the U.S. dollars. At the same time, over 50% of the
Group's operations are located in Ireland and the majority of its related costs
are denominated in local currency that is tied directly to the Euro.
Consequently, as the Euro declines, such costs are favorably impacted when
measured and reported in equivalent U.S. currency.

AEROSPACE COMPONENT MANUFACTURING GROUP ("ACM GROUP")

Net sales for fiscal 2001 increased 17% to $40.9 million, compared with $35.0
million in fiscal 2000. The sales increase is net of a reduction in selling
price of approximately $1.0 million caused by a decline in the market price of a
key raw material that was passed on to customers in the second half of fiscal
2000. The increase in net sales is primarily attributable to an increase in the
number of AE series new generation jet engines built by Rolls-Royce Corporation
for business and regional jets, as well as transport and surveillance aircraft.
Net sales in 2001 also benefited from an increase in shipments of components for
military aircraft, as well as airframe components sold to commercial aircraft
manufacturers.

Selling, general and administrative expenses for fiscal 2001 increased $0.3
million to $2.2 million, compared to $1.9 million in fiscal 2000. The increase
in fiscal 2001 is primarily attributable to lower selling, general and
administrative expense recognized in fiscal 2000 due to a nonrecurring
reevaluation of the Company's obligation to provide certain medical benefits to
a small number of individuals who retired prior to 1993.

The ACM Group's operating income in 2001 was $3.5 million, or 8.5% of net sales,
compared with $1.5 million, or 4.3% of net sales in 2000. The overall higher net
sales level generated $0.8 million of operating income. In addition, the Group's
operating income in 2001 benefited by $1.2 million as a result of improved
efficiencies resulting from higher production volumes. The operating income in
2001 also benefited by $0.4 million due to process improvements and $0.4 million
in lower tooling costs. LIFO benefit was $0.1 million and $0.8 million in 2001
and 2000, respectively. Operating income as a percentage of net sales also
benefited in fiscal 2001 from the decline in the market price of a key raw
material in the second half of fiscal 2000.

METAL FINISHING GROUP

Net sales for fiscal 2001 increased 8.6% to $10.3 million, compared with $9.5
million in fiscal 2000. Contract service sales volumes increased $0.5 million,
or 19%, representing 36% of total sales, in fiscal 2001 when compared to fiscal
2000. Solution sales increased $0.1 million, or 3%, representing 45% of total
sales, in 2001 when compared to 2000.

Operating income in fiscal 2001 increased to $1.7 million, or 16.7% of net
sales, from $1.1 million, or 11.2% of net sales, in fiscal 2000. Margins
improved in fiscal 2001, when compared to fiscal 2000, due principally to
product mix, both in terms of increased sales and a higher margin in the
contract services area as well as a shift within solutions sales to more of a
higher margin precious metal solutions. In addition, the Metal Finishing Group
realized some production efficiencies on increased sales and fiscal 2000 had a
nonrecurring charge of $0.1 million related to employee benefits. During fiscal
2001, the Metal Finishing Group's selling, general and administrative expenses
of $2.9 million were generally comparable to fiscal 2000 in amount, but
represented a lower percentage of net sales.

                                       14

<PAGE>

CORPORATE UNALLOCATED EXPENSES

Corporate unallocated expenses, consisting of corporate salaries and benefits,
legal and professional and other corporate expenses were $1.9 million in 2001
and 2000. Corporate unallocated expenses were favorably impacted by $0.2 million
of lower expenses related to consulting, defined contribution plan
administration costs, public company expenses and actuarially determined defined
benefit pension plan costs. This was offset by $0.2 million in higher management
incentive expense and legal and professional expenses.

OTHER/GENERAL

Interest income increased to $0.5 million in 2001, compared with $0.2 in 2000,
primarily due to the increase in cash and cash equivalents in fiscal 2001,
offset in part by lower interest rates. Interest expense was $1.2 million in
2001, compared with $1.0 million in fiscal 2000. Interest expense was negatively
impacted by higher average borrowings under the Company's revolving credit
agreement, offset in part by lower interest rates.

Other expense was $0.6 million in fiscal 2001, compared with other income of
$0.3 million in 2000. $0.8 million of this change is due to foreign currency
transaction losses, of which $1.0 million occurred in the fourth quarter of
2001. These exchange losses result from the impact of the strengthening Euro,
principally in the fourth quarter of 2001, on the carrying values of certain net
monetary assets of the Company's non-U.S. subsidiaries. In addition, the amount
of grant income from Irish government agencies recognized by the Company's Irish
subsidiary declined $0.1 million to $0.4 million in 2001, compared with $0.5
million 2000.

During fiscal 2001, U.S. income taxes were provided on the undistributed fiscal
2001 earnings of non-U.S. subsidiaries in anticipation that distributions from
such earnings, to the extent they may occur, would result in an additional
income tax liability. The Company's consolidated income tax provision of $1.7
million results in an effective tax rate of 36.3% in 2001, compared to 2.3% in
2000. Expenses not deductible for tax purposes resulted in an effective tax rate
higher than the statutory rate. The Company's fiscal 2000 income tax provision
of $0.1 million consists of a U.S. income tax benefit of $0.4 million on a U.S.
loss of $1.2 million, offset by a non-U.S. income tax provision of $0.5 million
on non-U.S. income of $3.7 million.

LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents decreased to $7.6 million at September 30, 2002 from
$13.8 million at September 30, 2001. At present, essentially all of the
Company's cash and cash equivalents are in the possession of its non-U.S.
subsidiaries and relate to undistributed earnings. During fiscal 2002, the
Company received a distribution of $2.5 million from one of its non-U.S.
subsidiaries. This distribution was utilized to repay a portion of the
outstanding balance under the Company's revolving credit agreement.

Cash flow activity for fiscal 2002 is presented in the Consolidated Statements
of Cash Flows. Cash was provided by a $2.9 million decrease in the ACM Group's
accounts receivable due to lower sales, net of a $0.1 million increase in its
allowance for doubtful accounts in response to higher levels of credit risk
resulting from the current economic environment. Cash was further provided by a
$1.1 million decrease in the Repair Group's accounts receivable due to lower
sales, as well as by a $0.2 million decrease in the Metal Finishing Group's
accounts receivable. ACM Group inventories decreased by $2.5 million in fiscal
2002, while the Repair Group's inventories decreased $1.6 million and the Metal
Finishing Group's inventory increased $0.1 million in fiscal 2002. The overall
decline in inventory levels is attributable to lower sales levels experienced
during fiscal 2002. The $2.6 million decrease in consolidated accounts payable
is attributable to lower overall operating expenses and inventory purchases due
to lower net sales during fiscal 2002. The $1.9 million increase in consolidated
accrued liabilities is caused by a $2.0 million reclassification of the
unamortized portion of deferred grant revenue from other long-term liabilities;
the establishment of a $0.9 million legal accrual and an $0.8 million severance
accrual in connection with staff reductions. These increases were offset in part
by payment in fiscal 2002 of $1.0 million of fiscal 2001 employee incentives,
$0.5 million payment of fiscal 2001 income taxes, net of refunds, and lower
overall operating expenses in fiscal 2002, compared with fiscal 2001. Working
capital was $19.5 million at September 30, 2002, compared with $36.9 million at
September 30, 2001. The current ratio was 2.3 and 3.3 at September 30, 2002 and
2001, respectively.

                                       15

<PAGE>

Capital expenditures were $5.0 million in fiscal 2002, compared with $4.1
million in fiscal 2001. Fiscal 2002 capital expenditures consisted of equipment
that will expand and diversify the Repair Group's repair capabilities, including
HIT component repair; provide other new equipment and upgrade existing
equipment. At September 30, 2002, the Company has no material outstanding
commitments for capital expenditures. The Company anticipates that fiscal 2003
capital expenditures will not exceed $3.5 million and will be concentrated in
the Repair Group.

At September 30, 2002, the Company has a term note with a bank payable in
quarterly installments of $0.3 million through February 1, 2005, with the
remaining balance of $3.9 million due May 1, 2005. The term note has a variable
interest rate, which after giving effect to an interest rate swap agreement with
the same bank, becomes an effective fixed rate of 7.74%, which is subject to
adjustment based upon the level of certain financial ratios. The outstanding
balance of the term note at September 30, 2002 was $6.9 million.

The Company has at September 30, 2002, a $10.0 million revolving credit
agreement with a bank that expires on March 31, 2004 and bears interest at the
bank's base rate. The interest rate was 4.75% at September 30, 2002. A
commitment fee of 0.25% is incurred on the remaining unused balance. At
September 30, 2002 the Company had $7.6 million available against its $10.0
million revolving credit agreement.

The Company also has outstanding at September 30, 2002, a 15-year industrial
development bond, which was issued with an original face amount of $4.1 million
and was used to expand the Repair Group's Tampa, Florida facility. The interest
rate is reset weekly, based on prevailing tax-exempt money market rates.
Interest rate at September 30, 2002 was 1.9%. The outstanding balance of the
industrial development bond at September 30, 2002 was $3.2 million.

Under its credit agreements, the Company is subject to certain customary
covenants. These include, without limitation, covenants (as defined) that limit
the amount of annual capital expenditures and require the maintenance of certain
specified financial ratios, including a minimum tangible net worth level, a
maximum liability to tangible net worth ratio and an interest coverage ratio.

On November 26, 2002 the Company entered into an agreement with its bank to
amend certain provisions of its credit agreements. The amendment waives (i) the
interest coverage ratio covenant for the periods ended September 30, 2002,
December 31, 2002 and March 31, 2003; (ii) the minimum tangible net worth
covenant for the period ending September 30, 2002; and (iii) the capital
expenditure limitation for the period ended September 30, 2002. The amendment
modifies certain financial covenants and the interest rate-pricing grid. As a
consequence, the term note's three-month LIBOR based borrowing rate increases to
8.24% effective November 26, 2002. Also, as a result of this amendment the
commitment fee on the unused balance of the revolving credit agreement was
increased to 0.375%. Taking into consideration the effect of this waiver, the
Company was in compliance with all applicable covenants at September 30, 2002.

The Company's long-term debt as a percentage of equity at September 30, 2002 and
2001 was 30.2% and 30.6%, respectively. At September 30, 2002 the Company had
$7.6 million available against its $10.0 million revolving credit agreement.

During fiscal 2002, the Company repurchased 29,300 of its Common Shares. The
total number of shares repurchased under the Company's 100,000 Common Share
repurchase program, approved by the Board of Directors, is 100,000. No dividends
were declared during fiscal 2002.

OUTLOOK

As the Company noted in 2001, its business is heavily dependent upon the
strength of the commercial airlines as well as the aircraft and related engine
manufacturers. Consequently, the performance of the domestic and international
air transport industry directly and significantly impacts the performance of the
Repair and ACM Groups' businesses. The air transport industry's long-term
outlook has, for many years, been one of continued growth. Such outlook
suggested the need for additional aircraft and growth in the requirement for
aircraft and engine repairs.

The events of September 11, 2001 resulted in an immediate reduction in the
demand for passenger travel both in the U.S. and internationally. Aircraft
manufacturers have announced reductions in forecasted aircraft deliveries in the
next few years as a result of reduced demand, and many airlines cancelled or
rescheduled deliveries of new aircraft to which they had previously committed.
In addition, the financial condition of many airlines in the U.S. and throughout
the world is weak. The U.S. airline industry has made requests for U.S.
government assistance, while some airlines have entered bankruptcy proceedings,
and others have announced major restructuring initiatives, including significant
reductions in service and grounding of aircraft. This reduction in the demand
for passenger travel and aircraft deliveries, and the increase in the

                                       16

<PAGE>

number of idle aircraft, the number of which is skewed heavily toward older
models, resulted in a decrease in orders and, therefore, negatively impacted the
ACM and Repair Groups' net sales, operating results, and cash flows in fiscal
2002. This was due to the concentration of the ACM Group providing new parts for
aircrafts and engines, and the Repair Group providing replacement parts and
component repair services for the engines that power these aircraft. Declines in
the commercial airline, aircraft and related engine industries have been
partially offset by increases in U.S. military spending for aircraft and related
components. The ACM business supplies new and spare components for military
aircraft. Increases in military component demand have partially offset the
decreases in commercial aerospace component net sales. The recent establishment
of the Department of Homeland Security may result in additional demand for
military aircraft and related components.

It is difficult to determine at this time what the long-term impact of these
events will be on air travel and the demand for the services and products
provided by the Company. These factors could result in a further decrease in
orders for new and after-market commercial aerospace products and services; an
increase in credit risk associated with doing business with the financially
troubled airlines and their suppliers; and an increase in slow moving and/or
obsolete replacement parts inventory related to older model engines that are
experiencing reduced usage. All of these consequences, to the extent that they
occur, could negatively impact the Company's net sales, operating profits and
cash flows. However, in light of the current business environment, the Company
believes that that cash on-hand, funds available under its revolving credit
agreement and anticipated funds generated from operations will be adequate to
meet its liquidity needs through the foreseeable future.

RECENTLY ISSUED ACCOUNTING STANDARDS

In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other
Intangible Assets". This standard is effective for fiscal years beginning after
December 15, 2001. The Company adopted this standard on October 1, 2002, the
first quarter of the Company's fiscal year 2003. The standard changes financial
accounting and reporting for acquired goodwill and indefinite life intangible
assets. Under SFAS No. 142, goodwill will be subject to at least an annual
assessment for impairment by applying a fair-value based test. The adoption will
result in no further amortization of goodwill. Amortization of goodwill during
the year ended September 30, 2002 was $0.1 million, or $0.02 per share
(diluted). Other than the cessation of goodwill amortization, the Company does
not expect the adoption of this standard to have an impact on the Company's
financial position or results of operations.

In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations". This standard addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement cost. The standard applies to legal obligations
associated with the retirement of long-lived assets that result from
acquisition, construction, development and/or the normal operation of a
long-lived asset, except for certain obligations of lessees. This standard
requires entities to record the fair value of a liability for an asset
retirement obligation in the period incurred. SFAS No. 143 is effective for
fiscal years beginning after June 15, 2002. The Company will adopt this standard
in fiscal 2003. The Company does not expect the adoption of this standard to
have a material impact on the Company's financial position or results of
operations.

In September 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets". This statement superceded SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets to be Disposed Of" and the
accounting and reporting provisions of Accounting Principles Board Opinion No.
30, "Reporting Results of Operations - Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions", related to the disposal of a segment of a business.
This statement amends certain provisions of Accounting Research Bulletin No. 51,
"Consolidated Financial Statements". SFAS No. 144 is effective for fiscal years
beginning after December 15, 2001. The Company will adopt this standard in
fiscal 2003. The Company does not expect the adoption of this standard to have a
material impact on the Company's financial position or results of operations.

In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities". This standard addresses financial accounting
and reporting for costs associated with exit or disposal activities and replaces
Emerging Issues Task Force Issue No. 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit and Activity (including
Certain Costs Incurred in a Restructuring)" ("EITF No. 94-3"). SFAS No. 146
requires that a liability for costs associated with an exit or disposal activity
to be recognized when the liability is incurred. Under EITF No. 94-3, a
liability for exit costs as defined in EITF No. 94-3 is recognized at the date
of an entity's commitment to an exit plan. The provisions of SFAS No. 146 are
effective for exit or disposal activities that are initiated after December 31,
2002.

                                       17

<PAGE>

FORWARD-LOOKING STATEMENTS

This discussion may contain various forward-looking statements and includes
assumptions concerning the Company's operation, future results and prospects.
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) future business environment, including capital and
consumer spending; (2) competitive factors, including the ability to replace
business which may be lost due to increased direct involvement by the jet engine
manufacturers in turbine component services and repair markets; (3) successful
procurement of new repair process licenses; (4) fluctuating foreign currency
(primarily Euro) exchange rates; (5) successful development and market
introductions of new products, including an advanced coating technology and the
continued development of HIT repair processes; (6) regressive pricing pressures
on the Company's products and services, with productivity improvements as the
primary way to maintain margins; (7) success with the further development of
strategic alliances with certain turbine engine manufacturers for turbine
component repair services; (8) the long-term impact on the aerospace industry of
the September 11, 2001 terrorist attacks on the United States, including
collection risks due to failure of airlines/engine over-haul companies and other
aerospace related industries, the reduced number of aircraft in service, and the
accelerated declining use of older model jet engines such as the JT8D; (9)
successful replacement of declining demand for repair services for turboprop
engine components with component repair services for small turbofan engines
utilized in the business and regional aircraft markets; (10) continued reliance
on several major customers for revenues, as the company's five largest customers
account for approximately 35% of its total net sales, (11) stability of
government laws and regulations, including taxes; and (12) stable governments
and business conditions in economies where the Company's business is conducted.

ITEM 7A. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

In the ordinary course of business, the Company is subject to foreign currency
and interest rate risk. The risks primarily relate to the sale of the Company's
products in transactions denominated in non-U.S. dollar currencies (primarily
the Euro); the payment in local currency, of wages and other costs related to
the Company's non-U.S. operations; and changes in interest rates on the
Company's long-term debt obligations. The Company does not hold or issue
financial instruments for trading purposes.

The Company believes that inflation has not materially affected its results of
operations in 2002, and does not expect inflation to be a significant factor in
fiscal 2003.

FOREIGN CURRENCY RISK

The U.S. dollar is the functional currency for all of the Company's U.S.
operations. Effective October 1, 2001, the Company changed the functional
currency of its Irish subsidiary from the local currency to the U.S. dollar. The
functional currency was changed because a substantial majority of the
subsidiary's transactions are now denominated in U.S. dollars. For these
operations, all gains and losses from completed currency transactions are
included in income currently. For the Company's other non-U.S. subsidiaries, the
functional currency is the local currency. Assets and liabilities are translated
using average rates of exchange. Foreign currency translation adjustments are
reported as a component of accumulated other comprehensive loss.

Historically, the Company has been able to mitigate the impact of foreign
currency risk by means of hedging such risk through the use of foreign currency
exchange contracts. However, such risk is mitigated only for the periods for
which the Company has foreign currency exchange contracts in effect, and only to
the extent of the U.S. dollar amounts of such contracts. At September 30, 2002,
the Company had several forward exchange contracts outstanding for durations of
up to nine months to purchase Euros aggregating U.S. $10.9 million. A ten
percent appreciation or depreciation of the value of the U.S. dollar relative to
the currencies in which the forward exchange contracts outstanding at September
30, 2002 are denominated, would result in a $1.2 million decline or increase,
respectively, in the value of the forward exchange contracts. The Company will
continue to evaluate its foreign currency risk, if any, and the effectiveness of
using similar hedges in the future to mitigate such risk.

                                       18

<PAGE>

INTEREST RATE RISK

The Company's primary interest rate risk exposure results from the variable
interest rate mechanisms associated with the Company's long-term debt consisting
of a term note payable to the Company's bank, a revolving credit agreement and
industrial development variable rate demand revenue bonds. These interest rate
exposures are managed in part by an interest rate swap agreement to fix the
interest rate of the term note payable to the Company's bank. If interest rates
were to increase 100 basis points (1%) from September 30, 2002 rates, and
assuming no changes in the amounts outstanding under the revolving credit
agreement and industrial development variable rate demand revenue bonds, the
additional annual interest expense to the Company would be approximately $0.1
million.

The Company's sensitivity analyses of the effects of changes in interest rates
do not consider the impact of a potential change in the level of variable rate
borrowings or derivative instruments outstanding that could take place if these
hypothetical conditions prevail.

                                       19

<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders of SIFCO Industries, Inc. and
Subsidiaries

We have audited the accompanying consolidated balance sheet of SIFCO Industries,
Inc. (an Ohio Corporation) and Subsidiaries as of September 30, 2002, and the
related consolidated statements of operations, shareholders' equity, and cash
flows for the year then ended. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit. The financial statements of SIFCO
Industries, Inc. and Subsidiaries as of September 30, 2001 and for each of the
two years in the period ended September 30, 2001 were audited by other auditors
who have ceased operations. Those auditors expressed an unqualified opinion on
those financial statements in their report dated October 26, 2001.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of SIFCO Industries,
Inc. and Subsidiaries as of September 30, 2002, and the results of their
operations and their cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.

/s/ GRANT THORNTON LLP

Cleveland, Ohio
October 29, 2002,
(except for the last paragraph of
Note 5, as to which the date is November 26, 2002)

        REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON SCHEDULE II

To the Board of Directors and Shareholders of SIFCO Industries, Inc. and
Subsidiaries

In connection with our audit of the consolidated financial statements of SIFCO
Industries, Inc. and Subsidiaries referred to in our report dated October 29,
2002, which is incorporated in this Form 10-K, we have also audited Schedule II
for the year ended September 30, 2002. In our opinion, this schedule, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information set forth therein.
The financial statements of SIFCO Industries, Inc. and Subsidiaries as of
September 30, 2001 and for each of the two years in the period ended September
30, 2001, were audited by other auditors who have ceased operations and whose
report dated October 26, 2001, stated that the information in Schedule II as of
September 30, 2001 and for each of the two years in the period ended September
30, 2001 is fairly stated, in all material respects, in relation to the basic
financial statements taken as a whole.

/s/ GRANT THORNTON LLP

Cleveland, Ohio
October 29, 2002

                                       20

<PAGE>

The following is a copy of a previously issued Report of Independent Public
Accountants. The predecessor auditors (who have ceased operations) have not
revised this report.

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders of SIFCO Industries, Inc., and
Subsidiaries

We have audited the accompanying consolidated balance sheets of SIFCO
Industries, Inc. (an Ohio Corporation) and Subsidiaries as of September 30, 2001
and 2000, and the related consolidated statements of income, shareholders'
equity and cash flows for each of the three years in the period ended September
30, 2001. These financial statements are the responsibility of the Company's
management. Our responsibility is to express and opinion on these financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of SIFCO Industries, Inc. and
Subsidiaries as of September 30, 2001 and 2000, and the results of its
operations and its cash flows for each of the three years in the period ended
September 30, 2001, in conformity with accounting principles generally accepted
in the United States.

/s/ ARTHUR ANDERSEN LLP

Cleveland, Ohio,
October 26, 2001.

The following is a copy of a previously issued Report of Independent Public
Accountants on the Financial Statement Schedule. The predecessor auditors (who
have ceased operations) have not revised this report.

  REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON THE FINANCIAL STATEMENT SCHEDULE

To the Board of Directors and Shareholders of SIFCO Industries, Inc.:

We have audited in accordance with auditing stands generally accepted in the
United States, the consolidated financial statements included in SIFCO
Industries, Inc. and Subsidiaries' annual report to shareholders incorporated by
reference in this Form 10-K, and have issued our report thereon dated October
26, 2001. Our audit was made for the purpose of forming an opinion on those
statements taken as a whole. The schedule listed in the index of financial
statement schedules is the responsibility of the Company's management and is
presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic consolidated financial
statements. This schedule has been subjected to the auditing procedures applied
in the audit of the basic consolidated financial statements and, in our opinion,
fairly sates in all material respects the financial data required to be set
forth therein in relation to the basic consolidated financial statements taken
as a whole.

/s/ ARTHUR ANDERSEN LLP

Cleveland, Ohio,
October 26, 2001.

                                       21

<PAGE>

                     SIFCO INDUSTRIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                  (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                               YEARS ENDED SEPTEMBER 30,
                                                                               -------------------------
                                                                           2002          2001          2000
                                                                           ----          ----          ----
<S>                                                                     <C>           <C>           <C>
Net sales .........................................................     $  80,033     $ 105,633     $ 106,138
Operating expenses:
     Cost of goods sold ...........................................        76,331        86,761        90,732
     Selling, general and administrative expenses .................        15,952        12,960        12,357
                                                                        -------------------------------------

          Total operating expenses ................................        92,283        99,721       103,089
                                                                        -------------------------------------

               Operating income (loss) ............................       (12,250)        5,912         3,049

Interest income ...................................................          (258)         (530)         (196)
Interest expense ..................................................           838         1,189         1,019
Foreign currency exchange loss (gain) net .........................           (34)          568          (207)
Other expense (income) net ........................................           652            17           (46)
                                                                        -------------------------------------

          Income (loss) before income tax provision (benefit) .....       (13,448)        4,668         2,479
Income tax provision (benefit) ....................................          (462)        1,694            57
                                                                        -------------------------------------

               Net income (loss) ..................................     $ (12,986)    $   2,974     $   2,422
                                                                        =====================================

Net income (loss) per share (basic) ...............................     $   (2.49)    $    0.58     $    0.47
Net income (loss) per share (diluted) .............................     $   (2.49)    $    0.58     $    0.47

Weighted-average number of common shares (basic) ..................         5,219         5,144         5,169
Weighted-average number of common shares (diluted) ................         5,236         5,165         5,203
</TABLE>

See notes to consolidated financial statements.

                                       22

<PAGE>

                     SIFCO INDUSTRIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                  (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                                        SEPTEMBER 30,
                                                                                        -------------
                                                                                     2002           2001
                                                                                     ----           ----
<S>                                                                                <C>           <C>
                              ASSETS
                              ------
Current Assets:
     Cash and cash equivalents                                                     $  7,583      $  13,787
     Receivables ............................................................        14,505         18,705
     Inventories ............................................................        10,701         18,013
     Refundable income taxes ................................................           423             --
     Deferred income taxes                                                               --          1,709
     Prepaid expenses and other current assets ..............................         1,501            578
                                                                                   -----------------------

               Total current assets .........................................        34,713         52,792

Property, plant and equipment:
     Land ...................................................................           859            859
     Buildings ..............................................................        19,402         19,063
     Machinery and equipment ................................................        59,763         58,723
                                                                                   -----------------------
                                                                                     80,024         78,645
     Less - accumulated depreciation ........................................        50,918         49,262
                                                                                   -----------------------

               Property, plant and equipment, net ...........................        29,106         29,383

Other assets:
     Funds held by trustee for capital project ..............................            --             92
     Goodwill and other intangible assets, net ..............................         2,574          3,558
     Other assets ...........................................................           946            771
                                                                                   -----------------------

              Total other assets ............................................         3,520          4,421
                                                                                   -----------------------

                    Total assets ............................................      $ 67,339      $  86,596
                                                                                   =======================

                LIABILITIES AND SHAREHOLDERS' EQUITY
                ------------------------------------
Current liabilities:
     Current maturities of long-term debt ...................................      $  1,440      $   1,430
     Accounts payable .......................................................         4,130          6,717
     Accrued liabilities ....................................................         9,618          7,702
                                                                                   -----------------------

              Total current liabilities .....................................        15,188         15,849

Long-term debt, net of current maturities ...................................        11,093         15,107

Other long-term liabilities .................................................         4,323          6,266

Shareholders' equity:
     Serial preferred shares, no par value, authorized 1,000 shares .........            --             --
     Common shares, par value $1 per share, authorized 10,000 shares;
            issued 5,358 shares in 2002 and 5,308 shares in 2001;
            outstanding 5,258 shares in 2002 and 5,237 shares in 2001 .......         5,358          5,308
     Additional paid-in capital .............................................         6,936          6,783
     Retained earnings ......................................................        32,629         45,615
     Accumulated other comprehensive loss ...................................        (7,034)        (7,423)
     Unearned compensation - restricted common shares .......................          (562)          (460)
     Common shares held in treasury at cost, 100 shares in 2002 and
          71 shares in 2001 .................................................          (592)          (449)
                                                                                   -----------------------

              Total shareholders' equity ....................................        36,735         49,374
                                                                                   -----------------------

                       Total liabilities and shareholders' equity ...........      $ 67,339      $  86,596
                                                                                   =======================
</TABLE>

See notes to consolidated financial statements.

                                       23

<PAGE>

                     SIFCO INDUSTRIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                      YEARS ENDED SEPTEMBER 30,
                                                                                      -------------------------
                                                                                  2002           2001         2000
                                                                                  ----           ----         ----
<S>                                                                            <C>             <C>           <C>
Cash flows from operating activities:
     Net income (loss) .....................................................   $ (12,986)      $  2,974      $ 2,422
     Adjustments to reconcile net income (loss) to
          net cash provided by operating activities:
               Depreciation and amortization ...............................       4,706          4,368        4,632
               Loss on disposal of property, plant and equipment ...........          (7)           160           --
               Deferred income taxes .......................................          15          1,286          176
               Asset impairment charges ....................................       5,160             --           --

Changes in operating assets and liabilities:
               Receivables .................................................       4,200          1,205          575
               Inventories .................................................       4,054          2,081        2,177
               Refundable income taxes .....................................        (423)            --          354
               Prepaid expenses and other current assets ...................        (923)            84          606
               Other assets ................................................        (563)          (119)         229
               Accounts payable ............................................      (2,588)        (2,268)       1,341
               Accrued liabilities .........................................       1,916            176       (1,873)
               Other long-term liabilities .................................          28           (886)        (168)
                                                                               -------------------------------------

                     Net cash provided by operating activities .............       2,589          9,061       10,471

Cash flows from investing activities:
               Capital expenditures ........................................      (5,043)        (4,082)      (4,652)
               Decrease in funds held by trustee for capital project .......          92            438          147
               Proceeds from sale of property, plant and equipment .........         105             --           --
               Other .......................................................          99             44         (404)
                                                                               -------------------------------------

                     Net cash used for investing activities ................      (4,747)        (3,600)      (4,909)

Cash flows from financing activities:
               Proceeds from revolving credit agreement ....................      24,735         30,132        9,286
               Repayments of revolving credit agreement ....................     (27,309)       (25,557)      (8,889)
               Repayments of long-term debt ................................      (1,430)        (1,420)      (1,415)
               Repurchase of common shares .................................        (143)            --         (449)
               Cash dividends declared .....................................          --             --       (1,031)
               Issuance of common shares ...................................          --             13           73
               Share transactions under restricted stock program ...........         101             --           --
                                                                               -------------------------------------

                     Net cash provided by (used for) financing activities ..      (4,046)         3,168       (2,425)
                                                                               -------------------------------------

Increase (decrease) in cash and cash equivalents ...........................      (6,204)         8,629        3,137
Cash and cash equivalents at beginning of year .............................      13,787          4,687        2,022
Effect of exchange rate changes on cash and cash equivalents ...............          --            471         (472)
                                                                               -------------------------------------

                     Cash and cash equivalents at end of year ..............   $   7,583       $ 13,787      $ 4,687
                                                                               =====================================

Supplemental disclosure of cash flow information:
     Cash paid for interest ................................................   $    (845)      $ (1,082)     $(1,021)
     Cash recovered (paid) for income taxes, net ...........................        (573)           460          (62)
</TABLE>

See notes to consolidated financial statements.

                                       24

<PAGE>

                     SIFCO INDUSTRIES, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                 (AMOUNTS IN THOUSDANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                                                 ACCUMULATED
                                                                       ADDITIONAL                  OTHER
                                                             COMMON     PAID-IN     RETAINED   COMPREHENSIVE
                                                             SHARES     CAPITAL     EARNINGS   INCOME (LOSS)
                                                             ------     -------     --------   -------------
<S>                                                         <C>        <C>         <C>         <C>
BALANCE - SEPTEMBER 30, 1999                                $ 5,193     $ 6,352    $  41,250    $  (2,749)
Comprehensive income (loss):
    Net income.........................................          --          --        2,422           --
    Foreign currency translation adjustment............          --          --           --       (5,561)

       Total comprehensive loss........................

Shares issued to Defined Contribution Plan.............           1           5           --           --
Shares issued to vendor as payment for services                   6          42           --           --
Stock options exercised................................           5          14           --           --
Shares repurchased and held in treasury................          --          --           --           --
Dividends declared ($0.20 per share)...................          --          --       (1,031)          --
- ---------------------------------------------------------------------------------------------------------

BALANCE - SEPTEMBER 30, 2000                                $ 5,205     $ 6,413    $  42,641    $  (8,310)
Comprehensive income (loss):
    Net income.........................................          --          --        2,974           --
    Foreign currency translation adjustment............          --          --           --        1,191
    Unrealized loss on interest rate swap agreement,
      net of income tax benefit of $156................          --          --           --         (304)

       Total comprehensive income......................

Shares issued to vendor as payment for services........           3          10           --           --
Shares issued under restricted stock plan..............         100         360           --           --
- ---------------------------------------------------------------------------------------------------------

BALANCE - SEPTEMBER 30, 2001                                $ 5,308     $ 6,783    $  45,615    $  (7,423)

Comprehensive income (loss):
    Net loss...........................................          --          --      (12,986)          --
    Foreign currency translation adjustment............          --          --           --          112
    Currency exchange contract adjustment..............          --          --           --        1,035
    Unrealized loss on interest rate swap agreement,
      net of income tax provision of $156..............          --          --           --         (254)
    Minimum pension liability adjustment...............          --          --           --         (504)

       Total comprehensive loss........................

Shares repurchased and held in treasury................          --          --           --           --
Share transactions under restricted stock plan.........          50         153           --           --
- ---------------------------------------------------------------------------------------------------------

BALANCE - SEPTEMBER 30, 2002                                $ 5,358     $ 6,936    $  32,629    $  (7,034)
=========================================================================================================
</TABLE>

<TABLE>
<CAPTION>
                                                                             SHARES       TOTAL
                                                               UNEARNED      HELD IN    SHAREHOLDERS'
                                                             COMPENSATION   TREASURY      EQUITY
                                                             -------------  --------      ------
<S>                                                          <C>            <C>         <C>
BALANCE - SEPTEMBER 30, 1999                                  $      --     $     --      $  50,046
Comprehensive income (loss):
    Net income.........................................              --           --          2,422
    Foreign currency translation adjustment............              --           --         (5,561)
                                                                                          ---------
       Total comprehensive loss........................                                      (3,139)

Shares issued to Defined Contribution Plan.............              --           --              6
Shares issued to vendor as payment for services........              --           --             48
Stock options exercised................................              --           --             19
Shares repurchased and held in treasury................              --         (449)          (449)
Dividends declared ($0.20 per share)...................              --           --         (1,031)
- ---------------------------------------------------------------------------------------------------

BALANCE - SEPTEMBER 30, 2000                                  $      --     $   (449)     $  45,500
Comprehensive income (loss):
    Net income.........................................              --           --          2,974
    Foreign currency translation adjustment............              --           --          1,191
    Unrealized loss on interest rate swap agreement,
      net of income tax benefit of $156................              --           --           (304)
                                                                                          ---------
       Total comprehensive income                                                             3,861

Shares issued to vendor as payment for services........              --           --             13
Shares issued under restricted stock plan..............            (460)          --             --
- ---------------------------------------------------------------------------------------------------

BALANCE - SEPTEMBER 30, 2001                                  $    (460)    $   (449)     $  49,374

Comprehensive income (loss):
    Net loss...........................................              --           --        (12,986)
    Foreign currency translation adjustment............              --           --            112
    Currency exchange contract adjustment..............              --           --          1,035
    Unrealized loss on interest rate swap agreement,
      net of income tax provision of $156..............              --           --           (254)
    Minimum pension liability adjustment...............              --           --           (504)
                                                                                          ---------

       Total comprehensive loss........................                                    ( 12,597)

Shares repurchased and held in treasury................              --         (143)          (143)
Share transactions under restricted stock plan.........            (102)          --            101
- ---------------------------------------------------------------------------------------------------

BALANCE - SEPTEMBER 30, 2002                                  $    (562)    $    (592)    $  36,735
===================================================================================================
</TABLE>

See notes to consolidated financial statements.

                                       25

<PAGE>

                     SIFCO INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  YEARS ENDED SEPTEMBER 30, 2002, 2001 AND 2000
             (DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A.   DESCRIPTION OF BUSINESS
SIFCO Industries, Inc. and Subsidiaries (the "Company") are engaged in the
production and sale of a variety of metalworking processes, services and
products produced primarily to the specific design requirements of its
customers. The processes and services include forging, heat-treating, coating,
welding, machining and selective electrochemical finishing and the products
include forgings, machined forged parts and other machined metal parts,
remanufactured component parts for turbine engines, and selective
electrochemical finishing solutions and equipment.

B.   PRICIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries. All significant intercompany accounts
and transactions have been eliminated.

C.   CASH EQUIVALENTS
The Company considers all highly liquid short-term investments with original
maturities of three months or less to be cash equivalents.

D.   INVENTORY VALUATION
Inventories are stated at the lower of cost or market. Inventory cost includes
material, direct labor and factory overhead. Cost is determined by the last-in,
first-out (LIFO) method for approximately 35% of inventories at September 30,
2002 and 2001. The first-in, first-out (FIFO) method is used for the remainder
of inventories.

E.   PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost. Depreciation and amortization
are generally computed using the straight-line method, except for certain
divisions, which use the declining balance method. Depreciation and amortization
are provided in amounts sufficient to amortize the cost of the assets over their
estimated useful lives. Depreciation and amortization provisions are based on
estimated useful lives: buildings and building improvements: 5 to 50 years and
machinery and equipment, including office and computer equipment: 3 to 20 years.

F.   GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill and other intangible assets represent the excess of cost over the net
assets of acquired companies. Goodwill is amortized using the straight-line
method over 40 years. Other intangible assets include a 10-year non-competition
agreement with the former owner of an acquired company. This asset, which became
fully amortized during 2002, was amortized using the straight-line method over
10 years. The Company uses an undiscounted cash flow method to periodically
review the value of goodwill and other intangible assets. As a result of such
review during 2002, the Company recognized a $733 net write-down of goodwill.
The Company believes that the balance of its goodwill and other intangible
assets are realizable. At September 30, 2002 and 2001, accumulated amortization
of goodwill and other intangible assets was $881 and $3,179, respectively.

G.   NET INCOME PER SHARE
The Company's net income per basic share has been computed based on the average
number of common shares outstanding. Net income per diluted share reflects the
effect of the Company's outstanding stock options under the treasury stock
method.

H.   REVENUE RECOGNITION
The Company recognizes revenue in accordance with the Securities and Exchange
Commission's Staff Accounting Bulletin No. 101, "Revenue Recognition in
Financial Statements". Revenues are generally recognized when products are
shipped or services are provided to customers.

                                       26

<PAGE>

                     SIFCO INDUSTRIES, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

I.   NEW ACCOUNTING STANDARDS
In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other
Intangible Assets". This standard is effective for fiscal years beginning after
December 15, 2001. The Company adopted this standard on October 1, 2002, the
first quarter of the Company's fiscal year 2003. The standard changes financial
accounting and reporting for acquired goodwill and indefinite life intangible
assets. Under SFAS No. 142, goodwill will be subject to at least an annual
assessment for impairment by applying a fair-value based test. The adoption will
result in no further amortization of goodwill. Amortization of goodwill during
the year ended September 30, 2002 was $93, or $0.02 per share (diluted). Other
than the cessation of goodwill amortization, the Company does not expect the
adoption of this standard to have an impact on the Company's financial position
or results of operations.

In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations". This standard addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement cost. The standard applies to legal obligations
associated with the retirement of long-lived assets that result from
acquisition, construction, development and/or the normal operation of a
long-lived asset, except for certain obligations of lessees. This standard
requires entities to record the fair value of a liability for an asset
retirement obligation in the period incurred. SFAS No. 143 is effective for
fiscal years beginning after June 15, 2002. The Company will adopt this standard
in fiscal 2003. The Company does not expect the adoption of this standard to
have a material impact on the Company's financial position or results of
operations.

In September 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets". This statement superceded SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets to be Disposed Of" and the
accounting and reporting provisions of Accounting Principals Board Opinion No.
30, "Reporting Results of Operations-Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
events and Transactions", related to the disposal of a segment of a business.
This statement amends certain provisions of Accounting Research Bulletin No. 51,
"Consolidated Financial Statements". SFAS No. 144 is effective for fiscal years
beginning after December 15, 2001. The Company will adopt this standard in
fiscal 2003. The Company does not expect the adoption of this standard to have a
material impact on the Company's financial position or results of operation.

In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities". This standard addresses financial accounting
and reporting for costs associated with exit or disposal activities and replaces
Emerging Issues Task Force Issue No. 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit and Activity (including
Certain Costs Incurred in a Restructuring)" ("EITF No. 94-3"). SFAS No. 146
requires that a liability for costs associated with an exit or disposal activity
to be recognized when the liability is incurred. Under EITF No. 94-3, a
liability for exit costs as defined in EITF No. 94-3 is recognized at the date
of an entity's commitment to an exit plan. The provisions of SFAS No. 146 are
effective for exit or disposal activities that are initiated after December 31,
2002.

J.   USE OF ESTIMATES
Accounting principles generally accepted in the United States require management
to make a number of estimates and assumptions relating to the reported amounts
of assets and liabilities and the disclosure of contingent liabilities, at the
date of the consolidated financial statements, and the reported amounts of
revenues and expenses during the period in preparing these financial statements.
Actual results could differ from those estimates.

K.   CONCENTRATIONS OF CREDIT RISK
Receivables are presented net of allowance for doubtful accounts of $1,250 and
$1,422 at September 30, 2002 and 2001, respectively. Bad debt expense totaled
$481, $1,098 and $220 in fiscal 2002, 2001 and 2000, respectively.

Most of the Company's receivables represent trade receivables due from
manufacturers of turbine engines and aircraft components, airlines, and turbine
engine overhaul companies located throughout the world, including a significant
concentration of U.S. based companies. Approximately 35% of the Company's sales
in 2002 were to its 5 largest customers. The Company performs ongoing credit
evaluations of its customers' financial conditions. The Company believes its
allowance for doubtful accounts is sufficient based on the credit exposures
outstanding at September 30, 2002. However, certain customers have filed for
bankruptcy protection in the last several years and it is possible that
additional credit losses could be incurred if other customers seek bankruptcy
protection.

                                       27

<PAGE>

                     SIFCO INDUSTRIES, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

L.   DERIVATIVE FINANCIAL INSTRUMENTS
The Company entered into an interest rate swap agreement and several foreign
exchange rate contracts as part of the management of its interest rate and
foreign currency exchange rate exposures. The Company has no financial
instruments held for trading purposes. All financial instruments are put into
place to hedge specific exposure. To qualify as a hedge, the item to be hedged
must expose the Company to interest rate or foreign currency exchange risk and
the hedging instrument must effectively reduce that risk. If the financial
instrument is designated as a cash flow hedge, the effective portions of changes
in the fair value of the financial instrument are recorded in accumulated other
comprehensive income (loss) in the shareholders' equity section of the
Consolidated Balance Sheets. Ineffective portions of changes in the fair value
of the financial instrument, to the extent they may exist, are recognized in the
Consolidated Statements of Operations.

The Company uses an interest rate swap agreement to reduce risks related to
variable-rate debt, which is subject to changes in the market rates of interest.
These are designated as cash flow hedges. During 2002, the Company held one
interest rate swap agreement with a notional amount of $6,900 at September 30,
2002. Cash flows related to the interest rate swap agreements are included in
interest expense. The Company's interest rate swap agreement and its
variable-rate term debt are based upon three-month LIBOR. During 2002, the
interest rate swap agreement qualified as a fully effective cash flow hedge
against the Company's variable-rate term note interest risk.

M.   RESEARCH AND DEVELOPMENT
Research and development costs are expensed as incurred. Research and
development expense was approximately $500, $400 and $400 for the years ended
September 30, 2002, 2001 and 2000, respectively.

N.   RECLASSIFICATIONS
Certain amounts in prior years have been reclassified to conform to the 2002
Consolidated Financial Statement presentation.

2.   INVENTORIES

Inventories consist of:

<TABLE>
<CAPTION>
                                                            2002        2001
                                                            ----        ----
<S>                                                       <C>         <C>
Raw materials and supplies .........................      $  3,411    $  5,714
Work-in-process ....................................         3,525       5,905
Finished goods .....................................         3,765       6,394
                                                          --------------------

    Total inventories ..............................      $ 10,701    $ 18,013
                                                          ====================
</TABLE>

If the FIFO method had been used for the entire Company, inventories would have
been $3,114 and $2,884 higher than reported at September 30, 2002 and 2001,
respectively.

3.   ACCRUED LIABILITIES

Accrued liabilities consist of:

<TABLE>
<CAPTION>
                                                            2002        2001
                                                            ----        ----
<S>                                                       <C>         <C>
Accrued employee compensation and benefits .........      $  1,609    $  2,076
Accrued workers' compensation ......................         1,029       1,497
Accrued severance ..................................           752          --
Accrued income taxes ...............................           415         975
Accrued royalties ..................................           973         916
Accrued legal and professional .....................         1,388         375
Unamortized portion of deferred grant revenue ......         2,005          --
Other accrued liabilities ..........................         1,447       1,863
                                                          --------------------

    Total accrued liabilities ......................      $  9,618    $  7,702
                                                          ====================
</TABLE>

                                       28

<PAGE>

                     SIFCO INDUSTRIES, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

4.   GOVERNMENT GRANTS

The Company receives grants from certain government entities as an incentive to
invest in facilities, research and employees. Certain of these grants require
that the Company maintain operations for up to ten years in order to qualify for
the full value of the benefits received. These amounts are recorded as deferred
revenue when received. Capital grants are amortized into income over the
estimated useful lives of the related assets. Employment grants are amortized
into income over five years. Training, research, marketing and other grants are
recognized as income when received.

During 2002, the Company's workforce was impacted through attrition and staff
reductions such that employment levels were reduced to amounts that are expected
to remain, for the foreseeable future, below certain minimum levels as
stipulated in certain employment related grant agreements. In certain
circumstances, such employment level reductions may trigger an obligation for
repayment of certain employment related grants. Accordingly, the Company
recognized in 2002 a $770 provision to adjust the amount of the unamortized
portion of deferred grant revenue.

The unamortized portion of deferred grant revenue was $2,645 and $1,892 at
September 30, 2002 and 2001, respectively. As of September 30, 2002, $2,005 is
included in accrued liabilities, and $640 is included in other long-term
liabilities. As of September 30, 2001, $1,892 is included in other long-term
liabilities. The Company recognized net grant expense of $422 in 2002 and grant
revenue of $406 and $513 in 2001 and 2000, respectively, which is included in
other expense (income), net.

Prior to expiration, a grant may be repayable in certain circumstances,
principally upon the sale of related assets, or discontinuation or reduction of
operations. The contingent liability for such potential repayments was $4,902
and $4,794 at September 30, 2002 and 2001, respectively.

5.   LONG TERM DEBT

Long-term debt consists of:

<TABLE>
<CAPTION>
                                                                   2002        2001
                                                                   ----        ----
<S>                                                              <C>         <C>
Term note payable to bank ....................................   $  6,900    $  8,100
Revolving credit agreement ...................................      2,398       4,972
Industrial development variable rate demand revenue bonds ....      3,235       3,465
                                                                 --------------------
    Total debt ...............................................     12,533      16,537
Less - current maturities ....................................      1,440       1,430
                                                                 --------------------
    Total long-term debt .....................................   $ 11,093    $ 15,107
                                                                 ====================
</TABLE>

The term note is payable in quarterly installments of $300 through February 1,
2005 with the remaining balance of $3,900 due May 1, 2005. The term note has a
variable interest rate, which, after giving effect to an interest rate swap
agreement with the same bank, becomes an effective fixed rate of 7.74% and is
subject to adjustment based upon the level of certain financial ratios. The
effective interest rate at September 30, 2002 was 7.74%. The interest rate swap
agreement has a notional amount equal to the amount owed under the term note and
bears interest at a fixed rate of 5.99%.

The Company has a $10,000 revolving credit agreement with a bank, which expires
on March 31, 2004 and bears interest at the bank's base rate. The interest rate
was 4.75% at September 30, 2002. The average balance outstanding against the
revolving credit agreement was $2,241 and $3,779 during 2002 and 2001,
respectively. A commitment fee of 0.25% is incurred on the unused balance. At
September 30, 2002, the Company had $7,557 available against its $10,000
revolving credit agreement.

The Company has a 15-year industrial development bond outstanding, with an
original face amount of $4,100, which was used to expand the Turbine Component
Services and Repair Group's Tampa, Florida facility. The interest rate is reset
weekly, based on prevailing tax-exempt money market rates (1.9% at September 30,
2002). The industrial development bond requires annual principal payments
ranging from $240 in 2003 to $355 in 2013.

                                       29

<PAGE>

                     SIFCO INDUSTRIES, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

All of the Company's long-term debt is secured by substantially all of the
Company's domestic assets, a guarantee by its domestic subsidiaries and a pledge
of 65% of the Company's ownership interest in its non-U.S. subsidiaries.

Under its various credit agreements, the Company is subject to certain customary
covenants. These include, without limitation, covenants (as defined) that limit
the amount of annual capital expenditures, and require the maintenance of
certain specified financial ratios, including a minimum tangible net worth
level, a maximum liability to tangible net worth ratio, and an interest coverage
ratio.

On November 26, 2002 the Company entered into an agreement with its bank to
amend certain provisions of its credit agreements. The amendment waives (i) the
interest coverage ratio covenant for the periods ended September 30, 2002,
December 31, 2002 and March 31, 2003; (ii) the minimum tangible net worth
covenant for the period ended September 30, 2002. The amendment modifies certain
financial covenants and the interest rate-pricing grid. As a consequence, the
term note's borrowing rate increases to 8.24% effective November 26, 2002. Also,
as a result of this amendment the commitment fee on the unused balance of the
revolving credit agreement was increased to 0.37%. Taking into consideration the
effect of this waiver, the company was in compliance with all applicable
covenants at September 30, 2002.

6.   INCOME TAXES

The components of income (loss) before income tax provision (benefit) are as
follows;

<TABLE>
<CAPTION>
                                                                         2002         2001        2000
                                                                         ----         ----        ----
<S>                                                                   <C>           <C>        <C>
U.S ............................................................      $  (8,369)    $   519    $  (1,192)
Non-U.S ........................................................         (5,079)      4,149        3,671
                                                                      ----------------------------------

         Income (loss) before income tax provision (benefit) ...      $ (13,448)    $ 4,668    $   2,479
                                                                      ==================================
</TABLE>

The income tax provision (benefit) consists of the following:

<TABLE>
<CAPTION>
                                                                          2002        2001        2000
                                                                          ----        ----        ----
<S>                                                                   <C>           <C>        <C>
Current income tax provision (benefit):
     U.S. federal ..............................................      $    (114)    $  (117)   $    (564)
     State and local ...........................................             --          36          (11)
     Non-U.S ...................................................           (477)        489          456
                                                                      ----------------------------------

         Total current tax provision (benefit) .................           (591)        408         (119)
Deferred U.S. federal income tax provision .....................            129       1,286          176
                                                                      ----------------------------------

         Income tax provision (benefit) ........................      $    (462)    $ 1,694    $      57
                                                                      ==================================
</TABLE>

The income tax provision (benefit) differs from amounts currently payable or
refundable due to certain items reported for financial statement purposes in
periods that differ from those in which they are reported for tax purposes.

                                       30

<PAGE>

                     SIFCO INDUSTRIES, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The income tax provision (benefit) in the accompanying Consolidated Statements
of Operations differs from the statutory rate as follows:

<TABLE>
<CAPTION>
                                                                                 2002           2001          2000
                                                                                 ----           ----          ----
<S>                                                                           <C>             <C>           <C>
Income (loss) before income tax provision (benefit) ....................      $ (13,448)      $ 4,668       $ 2,479
Less-U.S., state and local income tax provision (benefit) ..............             --            36           (11)
                                                                              -------------------------------------

       Income (loss) before federal income tax provision (benefit) .....        (13,448)        4,632         2,490
                                                                              =====================================

Income tax provision (benefit) at U.S. federal statutory rate ..........         (4,572)        1,575           847
Tax effect of:
     U.S. losses for which no U.S. federal tax benefit has been
          recognized ...................................................          2,598            --            --
     Non-U.S. tax rate differential ....................................             --            --          (792)
     Non-US losses for which no-U.S. federal tax benefit has been
          recognized ...................................................          1,251            --            --
     Other .............................................................            261            83            13
                                                                              -------------------------------------

U.S. federal and non-U.S. income tax provision (benefit) ...............           (462)        1,658            68
Add - U.S., state and local income tax provision (benefit) .............             --            36           (11)
                                                                              -------------------------------------

       Income tax provision (benefit) ..................................      $    (462)      $ 1,694       $    57
                                                                              =====================================
</TABLE>

Deferred tax assets and liabilities consist of the following:

<TABLE>
<CAPTION>
                                                               2002         2001
                                                               ----         ----
<S>                                                         <C>          <C>
Deferred tax assets:
   Net U.S. operating loss carryfowards ..............      $  1,903     $     --
   Employee benefits .................................         1,143        1,445
   Investment valuation reserve ......................           511          511
   Inventory and property reserves ...................           473          536
   Doubtful accounts .................................           263          305
   Foreign tax credits ...............................           161          161
   Interest rate swap ................................           190          156
   Additional pension liability ......................           171           --
                                                            ---------------------

         Total deferred tax assets ...................         4,815        3,114

Deferred tax liabilities:
   Depreciation ......................................         1,687        1,438
   Unremitted foreign earnings .......................           368          934
   Personal property taxes ...........................            27           29
   Other .............................................            10          381
                                                            ---------------------

         Total deferred tax liabilities ..............         2,092        2,782
                                                            ---------------------

Deferral tax assets net of liabilities ...............         2,723          332
Valuation allowance ..................................        (2,723)        (161)
                                                            ---------------------

         Net deferred tax assets .....................      $     --     $    171
                                                            =====================
</TABLE>

                                       31

<PAGE>

                     SIFCO INDUSTRIES, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

At September 30, 2002, the Company has a U.S. federal tax loss carryfoward of
$5,597. The U.S. federal tax loss carryforward expires in 2022.

At September 30, 2002, the Company recognized an additional $2,562 valuation
allowance against its U.S. net deferred tax assets, which were primarily
recorded during the first three quarters of fiscal 2002. In assessing the
Company's ability to realize its net deferred tax assets, management considers
whether it is more likely than not that some portion or all of its net deferred
tax assets may not be realized. Management considered the scheduled reversal of
deferred tax liabilities, projected future taxable income and tax planning
strategies in making this assessment. Future reversal of the valuation allowance
may be achieved either when the tax benefit is realized or when it has been
determined that it is more likely than not that the benefit will be realized
through future taxable income.

The Company considers the undistributed earnings, accumulated prior to October
1, 2000, of its non-U.S. subsidiaries to be indefinitely reinvested in
operations outside the U.S. Distribution of these non-U.S. subsidiary earnings
would be subject to U.S. income taxes. Cumulative undistributed earnings of
non-U.S. subsidiaries for which no U.S. federal deferred income tax liabilities
have been established were approximately $25,000 at September 30, 2002. During
2001, the Company provided $934 for U.S. income taxes on the undistributed
earnings of non-U.S. subsidiaries accumulated in fiscal 2001.

7.  RETIREMENT BENEFIT PLANS

The Company and certain of its U.S. subsidiaries sponsor defined benefit pension
plans covering most of its employees. The Company's funding policy for U.S.
defined benefit pension plans is based on an actuarially determined cost method
allowable under Internal Revenue Service regulations. Non-U.S. plans are funded
in accordance with the requirements of regulatory bodies governing the plans.

Net pension expense for the Company-sponsored defined benefit plans for 2002,
2001 and 2000 consists of the following:

<TABLE>
<CAPTION>
                                                                2002         2001        2000
                                                                ----         ----        ----
<S>                                                           <C>          <C>         <C>
Service cost ...........................................      $   899      $   813     $   886
Interest cost ..........................................        1,255        1,180       1,153
Expected return on plan assets .........................       (1,445)      (1,483)     (1,317)
Amortization of transition obligation (asset) ..........          (11)         (11)         12
Amortization of prior service cost .....................           42           42          42
Amortization of net gain ...............................         (104)        (262)       (132)
                                                              --------------------------------

     Net pension expense for defined benefit plans .....      $   636      $   279     $   644
                                                              ================================
</TABLE>

                                       32

<PAGE>

                     SIFCO INDUSTRIES, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The status of all significant U.S. and non-U.S. defined benefit plans is as
follows:

<TABLE>
<CAPTION>
                                                                        2002          2001
                                                                        ----          ----
<S>                                                                  <C>           <C>
Benefit Obligations:
   Benefit obligation at beginning of year ......................    $  17,327     $  14,596
   Service cost .................................................          899           813
   Interest cost ................................................        1,257         1,180
   Participant contributions ....................................          193           180
   Amendments ...................................................          898            --
   Actuarial loss (gain) ........................................        1,071         1,997
   Benefits paid ................................................       (1,890)       (1,581)
   Currency translation adjustment ..............................          369           142
                                                                     -----------------------

        Benefit obligation at end of year .......................    $  20,124     $  17,327
                                                                     =======================
</TABLE>

<TABLE>
<CAPTION>
                                                                        2002          2001
                                                                        ----          ----
<S>                                                                  <C>           <C>
Plan Assets:
   Plan assets at beginning of year .............................    $  16,571     $  18,144
   Actual return (loss) on plan assets ..........................         (823)         (915)
   Employer contributions .......................................          743           592
   Participant contributions ....................................          193           180
   Benefits paid ................................................       (1,890)       (1,581)
   Currency translation adjustment ..............................          305           151
                                                                     -----------------------

        Plan assets at end of year ..............................    $  15,099     $  16,571
                                                                     =======================
</TABLE>

<TABLE>
<CAPTION>
                                                                                 PLANS IN WHICH        PLANS IN WHICH
                                                                                 ASSETS EXCEED          ACCUMULATED
                                                                                  ACCUMULATED         BENEFITS EXCEED
                                                                                   BENEFITS                ASSETS
                                                                                   --------                ------

                                                                               2002       2001        2002       2001
                                                                               ----       ----        ----       ----
<S>                                                                          <C>        <C>         <C>        <C>
RECONCILIATION OF FUNDED STATUS:
   Plan assets in excess of (less than) projected benefit obligations ....   $  1,391   $  2,454    $(6,416)   $(3,210)
   Unrecognized net (gain) loss ..........................................     (1,176)    (1,939)     3,150        503
   Unrecognized prior service cost .......................................        896        326        343         57
   Unrecognized transition asset .........................................         --         --        (38)       (49)
   Currency translation adjustment .......................................         --         --         76         10
                                                                             -----------------------------------------

       Net amount recognized in the Consolidated Balance Sheets ..........   $  1,111   $    841    $(2,885)   $(2,689)
                                                                             =========================================

AMOUNTS RECOGNIZED IN THE CONSOLIDATED BALANCE SHEETS ARE:
   Other assets ..........................................................   $     --   $     --    $   731    $   387
   Other long-term liabilities ...........................................      1,111        841     (4,120)    (3,076)
   Accumulated other comprehensive loss ..................................         --         --        504         --
                                                                             -----------------------------------------

       Net amount recognized in the Consolidated Balance Sheets ..........   $  1,111   $    841    $(2,885)   $(2,689)
                                                                             =========================================
</TABLE>

                                       33

<PAGE>

                     SIFCO INDUSTRIES, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Assumptions used for defined benefit plans consist of:

<TABLE>
<CAPTION>
                                             2002          2001          2000
                                             ----          ----          ----
<S>                                          <C>           <C>           <C>
Discount rate for liabilities ...........    6.6%          7.1%          7.8%
Expected return on assets ...............    8.4%          8.4%          8.6%
Rate of compensation increase ...........    3.9%          4.0%          4.0%
</TABLE>

The Company also contributes to a U.S. multi-employer retirement plan for
certain union employees. The Company's contributions to the plan in 2002, 2001
and 2000 were $55, $47 and $46, respectively.

All non-union employees of the Company and its U.S. subsidiaries are eligible to
participate in the Company's defined contribution plan. The Company's matching
contribution expense for 2002, 2001 and 2000 was $79, $77 and $85, respectively.

The Company's Irish subsidiary sponsors, for all of its employees, a
tax-advantage profit sharing program. Company discretionary contributions and
employee elective contributions are invested in Common Shares of the Company
without being subject to personal income taxes if held for at least three years.
Employees have the option of taking a taxable cash distribution. There was no
contribution expense in 2002, 2001 and 2000.

The Company's Irish subsidiary also sponsors, for certain of its employees hired
after October 1, 2000, a defined contribution plan. The Company contributes
annually 5.5% of eligible employee compensation, as defined. Total contribution
expense in 2002 and 2001 was $23 and $10, respectively.

8.   STOCK-BASED COMPENSATION

The Company awards stock options under its shareholder approved 1998 Long-term
Incentive Plan. The aggregate number of stock options that may be granted in any
fiscal year is limited to 1.5% of the total outstanding Common Shares of the
Company at September 30, 1998, up to a cumulative maximum of 5% of such total
outstanding shares, subject to adjustment for forfeitures. At September 30,
2002, there are an additional 48,519 options available for award under the 1998
Long-term Incentive Plan. At September 30, 2002, the Company also had options
outstanding that were awarded under two previous plans, which authority to award
additional options has expired. Option exercise price is not less than fair
market value on date of grant and options are exercisable no later than ten
years from date of grant. Options issued under all plans generally vest at a
rate of 25% per year.

Option activity during the last three years is as follows:

<TABLE>
<CAPTION>
                                                            2002          2001          2000
                                                            ----          ----          ----
<S>                                                      <C>           <C>           <C>
Options at beginning of year .........................     344,000       276,000       205,000
   Weighted average exercise price ...................   $    7.36     $    8.03     $    8.28
Options granted during the year ......................      77,500        77,000        76,000
   Weighted average exercise price ...................   $    5.50     $    4.75     $    7.08
Options exercised during the year ....................          --            --        (5,000)
   Weighted average exercise price ...................   $      --     $      --     $    3.75
Options canceled during the year .....................     (31,500)       (9,000)           --
   Weighted average exercise price ...................   $   10.85     $    5.70     $      --
Options at end of year ...............................     390,000       344,000       276,000
   Weighted average exercise price ...................   $    6.71     $    7.36     $    8.03
Options exercisable at end of year ...................     210,250       174,000       138,750
   Weighted average exercise price ...................   $    7.02     $    7.16     $    6.14
</TABLE>

                                       34

<PAGE>

                     SIFCO INDUSTRIES, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The following table provides additional information regarding options
outstanding as of September 30, 2002:

<TABLE>
<CAPTION>
    OPTIONS                 OPTIONS               OPTIONS         REMAINING LIFE OF
EXERCISE PRICE            OUTSTANDING           EXERCISABLE        OPTIONS (YEARS)
- --------------            -----------           -----------        ---------------
<S>                       <C>                   <C>               <C>
    $ 3.75                    5,000                 5,000               0.1
    $ 4.25                  100,000               100,000               3.1
    $ 4.69                   59,000                14,750               8.1
    $ 5.16                   10,000                 2,500               3.1
    $ 5.50                   77,500                    --               9.6
    $ 6.81                    5,000                 2,500               7.4
    $ 6.94                   42,500                21,250               7.1
    $ 7.63                   16,000                 8,000               2.1
    $12.88                   75,000                56,250               6.1
                          -----------------------------------

     Total                  390,000               210,250
                          ===================================
</TABLE>

The Company employs the disclosure-only provisions of Statement of Financial
Accounting Standards No.123, "Accounting for Stock-Based Compensation" ("SFAS
No. 123"). Pro forma information regarding net income and earnings per share is
required by this standard. This information is required to be determined as if
the Company had accounted for its stock options granted subsequent to September
30, 1995 under the fair value method of that standard.

The fair value of options granted for fiscal years ending September 30, 2002,
2001 and 2000, reported below, has been estimated at the date of grant using a
Black-Scholes options pricing model with the following weighted average
assumptions:

<TABLE>
<CAPTION>
                                       2002              2001            2000
                                       ----              ----            ----
<S>                                  <C>              <C>              <C>
Risk-free interest rate ...........      3.35%            6.08%            6.13%
Dividend yield ....................      0.00%            0.00%            0.00%
Volatility factor .................     43.89%           38.47%           39.44%
Expected life of stock options ....  7.0 YEARS        8.4 years        7.1 years
</TABLE>

Based upon the preceding assumptions, the weighted average fair value of stock
options granted during fiscal years 2002, 2001 and 2000 was $2.77, $2.63, and
$3.55 per share, respectively.

The following pro forma information regarding net income and earnings per share
was determined as if the Company had accounted for its stock options under the
fair value method prescribed by SFAS No. 123. For purposes of pro forma
disclosure, the estimated fair value of the stock options is amortized over the
options' vesting period. The pro forma information is as follows:

<TABLE>
<CAPTION>
                                                   2002          2001        2000
                                                   ----          ----        ----
<S>                                             <C>             <C>         <C>
Pro forma net income (loss) .................   $ (13,157)      $ 2,821     $ 2,223

Pro forma net income (loss) per share:
      Basic .................................   $   (2.52)      $  0.55     $  0.43
      Diluted ...............................   $   (2.52)      $  0.55     $  0.43
</TABLE>

                                       35

<PAGE>

                     SIFCO INDUSTRIES, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Under the Company's restricted stock program, Common Shares of the Company may
be granted at no cost to certain officers and key employees. These shares vest
over either a four or five-year period, with either 25% or 20% vesting each
year, respectively. Under the terms of the program, participants will not be
entitled to dividends nor voting rights until the shares have vested. Upon
issuance of Common Shares under the program, unearned compensation equivalent to
the market value at the date of award is charged to shareholders' equity and
subsequently amortized to expense over the vesting periods. In fiscal 2002 and
2001, the Company awarded 50,000 four-year vesting and 100,000 five-year vesting
restricted Common Shares, respectively. Compensation expense related to the
amortization of unearned compensation was $100 and $0 in 2002 and 2001,
respectively.

9.   SUMMARIZED QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>
                                                  2002 QUARTER ENDED
                                                  ------------------

                                  DEC. 31       MARCH 31      JUNE 30       SEPT. 30
                                  -------       --------      -------       --------
<S>                              <C>           <C>           <C>           <C>
Net sales ....................   $  20,338     $  20,747     $  20,167     $  18,781
Cost of goods sold ...........      21,071        18,410        17,489        19,361
Net loss .....................      (3,690)       (1,333)         (451)       (7,512)
Net loss per share:
  Basic ......................   $   (0.71)    $   (0.26)    $   (0.09)    $   (1.44)
  Diluted ....................   $   (0.71)    $   (0.26)    $   (0.09)    $   (1.44)
</TABLE>

<TABLE>
<CAPTION>
                                                  2001 QUARTER ENDED
                                                  ------------------

                                  DEC. 31       MARCH 31      JUNE 30       SEPT. 30
                                  -------       --------      -------       --------
<S>                              <C>           <C>           <C>           <C>
Net sales ....................   $  25,185     $  27,726     $  27,676     $  25,046
Cost of goods sold ...........      20,854        23,073        22,170        20,664
Net income ...................         302           995         1,509           168
Net income per share:
  Basic ......................   $    0.06     $    0.19     $    0.29     $    0.03
  Diluted ....................   $    0.06     $    0.19     $    0.29     $    0.03
</TABLE>

10.  CONTINGENCIES

The Company is subject to various legal proceedings and claims that arise in the
ordinary course of business. The Company cannot reasonably estimate future
costs, if any, related to these matters. Although it is possible that the
Company's future operating results could be affected by the future cost of
litigation, it is management's belief at this time that such costs will not have
a material adverse effect on the Company's consolidated financial position or
results of operations.

11.  FOREIGN CURRENCY MANAGEMENT

The U.S. dollar is the functional currency for all the Company's U.S.
operations. Effective October 1, 2001, the Company changed the functional
currency of its Irish subsidiary from the local currency to the U.S. dollar. The
functional currency was changed because a substantial majority of the
subsidiary's transactions are now denominated in U.S. dollars. For the U.S. and
Ireland operations, all gains and losses from completed currency transactions
are included in income currently. For the Company's other non-U.S. subsidiaries,
the functional currency is the local currency. Assets and liabilities are
translated into U.S. dollars at the rates of exchange at the end of the period
and revenues and expenses are translated using average rates of exchange.
Foreign currency translation adjustments are reported as a component of
accumulated other comprehensive income (loss) in the Consolidated Statements of
Shareholders' Equity.

                                       36

<PAGE>

                     SIFCO INDUSTRIES, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Historically, the Company has been able to mitigate the impact of foreign
currency risk by means of hedging such risk through the use of foreign currency
exchange contracts, which typically expire within one year. However, such risk
is mitigated only for the periods for which the Company has foreign currency
exchange contracts in effect, and only to the extent of the U.S. dollar amounts
of such contracts. At September 30, 2002, the Company has several forward
exchange contracts outstanding for duration's of up to nine months to purchase
Euros aggregating U.S. $10,850.

12.  ASSET IMPAIRMENT AND OTHER CHARGES

During fiscal 2002, the Company's Repair Group performed evaluations of its
existing operations in light of the current and anticipated impacts on its
business of the September 11, 2001 terrorist attacks on the United States. The
principal result of these evaluation processes was the decision to optimize the
Repair Group's multiple operations by reducing certain of its capacity for the
repairing of components related to older generation jet engines, principally
JT8D. Consequently, the Repair Group recognized asset impairment charges of
$4,088 and $1,072, during the first and fourth quarters of fiscal 2002,
respectively. These charges include a goodwill write-off of $733 in the first
quarter of fiscal 2002 and inventory write-downs of $2,708 and $551, along with
equipment write-downs of $647 and $521, in the first and fourth quarters of
fiscal 2002, respectively.

As a direct consequence of the September 11, 2001 terrorist attacks on the
United States, the demand for JT8D jet engine repair services experienced an
accelerated and substantial decline during the first quarter of fiscal 2002.
This decline in demand continued during the balance of fiscal 2002. Because of
the foregoing and as a result of the Repair Group's decision to reduce certain
of its capacity for the repair of components, the recoverability of the carrying
value of certain assets was adversely affected. Consequently, the inventory
write-down, recorded in cost of goods sold in the Consolidated Statements of
Operations, in the first and fourth quarters of fiscal 2002 was determined to be
appropriate. The write-off of goodwill was based on an analysis of projected
undiscounted cash flows, which were no longer deemed adequate to support the
value of goodwill associated with the Repair Group. The equipment write-downs
relate to items that have been or are expected to be disposed, or will
experience reduced utilization as a consequence of the Repair Group's decision
to reduce certain of its capacity for the repair of components. The realization
of these assets was determined based on estimated net realizable value. Both the
goodwill write-off and the equipment write-downs were recorded in selling,
general and administrative expenses in the Consolidated Statements of
Operations.

In addition, during fiscal 2002, the Repair Group incurred charges related to
severance and other employee benefits to be paid to approximately 76 personnel
associated with the reduction of certain of its capacity for the repairing of
components. Such charges were $33, $154 and $752 and were recorded in selling,
general and administrative expenses in the Consolidated Statements of Operations
in the first, second and fourth quarters of fiscal 2002, respectively. As of
September 30, 2002, $187 of payments has been made for these expenses and all
but approximately 12 personnel have been terminated.

13.  BUSINESS SEGMENTS

The Company identifies reportable segments based upon distinct products
manufactured and services performed. The Turbine Component Services and Repair
Group ("Repair Group") consists primarily of the repair and remanufacture of jet
engine (aerospace) and heavy industrial turbine engine components. The Repair
Group is also involved in precision component machining for aerospace
applications. The Aerospace Component Manufacturing Group ("ACM Group") consists
of the production, heat treatment and some machining of forgings in various
alloys utilizing a variety of processes for application in the aerospace
industry. The Metal Finishing Group is a provider of specialized selective
electrochemical finishing processes for anodizing and electropolishing, which
are used to apply metal coatings to a selective area of a component. The
Company's reportable segments are separately managed.

One customer of all three of the Company's segments accounted for 13% and 18% of
the Company's consolidated net sales in 2002 and 2001, respectively. In 2000,
two customers accounted for 17% and 12%, respectively, of the Company's
consolidated net sales. The Repair and ACM Groups supplied the customer that
accounted for 17% of such sales, while the Company's Repair Group supplied the
customer that accounted for 12% of such sales.

Geographic net sales are based on location of customer. The U.S. is the single
largest country for unaffiliated customer sales, accounting for 70% of
consolidated net sales in fiscal 2002. No other single country represents
greater than 10% of consolidated net sales. Net sales to unaffiliated customers
located in various European countries in fiscal 2002 accounted for 21.9% of
consolidated net sales.

                                       37

<PAGE>

                     SIFCO INDUSTRIES, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Corporate unallocated expenses represent expenses that are not of a business
segment operating nature and, therefore, are not allocated to the business
segments for reporting purposes. Corporate identifiable assets consist primarily
of cash and cash equivalents.

The following table summarizes certain information regarding segments of the
Company's operations for the year ended September 30, 2002, 2001 and 2000.

<TABLE>
<CAPTION>
                                                                           2002         2001         2000
                                                                           ----         ----         ----
<S>                                                                     <C>          <C>          <C>
Net sales:
  Turbine Component Services and Repair Group ......................    $  36,539    $  54,406    $  61,658
  Aerospace Component Manufacturing Group ..........................       33,164       40,891       34,958
  Metal Finishing Group ............................................       10,330       10,336        9,522
                                                                        -----------------------------------

      Consolidated net sales .......................................    $  80,033    $ 105,633    $ 106,138
                                                                        ===================================

Operating income (loss):
  Turbine Component Services and Repair Group ......................    $ (11,514)   $   2,609    $   2,355
  Aerospace Component Manufacturing Group ..........................         (287)       3,476        1,491
  Metal Finishing Group ............................................        1,495        1,724        1,070
  Corporate unallocated expenses ...................................       (1,944)      (1,897)      (1,867)
                                                                        -----------------------------------

      Consolidated operating income (loss) .........................      (12,250)       5,912        3,049
Interest expense, net ..............................................          580          659          823
Foreign currency exchange loss (gain), net .........................          (34)         568         (207)
Other expense (income), net ........................................          652           17          (46)
                                                                        -----------------------------------

      Consolidated income (loss) before income tax provision
        (benefit) ..................................................    $ (13,448)   $   4,668    $   2,479
                                                                        ===================================

Depreciation and amortization expense:
  Turbine Component Services and Repair Group ......................    $   3,626    $   3,242    $   3,461
  Aerospace Component Manufacturing Group ..........................          680          679          689
  Metal Finishing Group ............................................          400          447          482
                                                                        -----------------------------------

      Consolidated depreciation and amortization expense ...........    $   4,706    $   4,368    $   4,632
                                                                        ===================================

Capital Expenditures:
  Turbine Component Services and Repair Group ......................    $   4,598    $   3,325    $   4,121
  Aerospace Component Manufacturing Group ..........................          396          705          472
  Metal Finishing Group ............................................           49           52           59
                                                                        -----------------------------------

      Consolidated capital expenditures ............................    $   5,043    $   4,082    $   4,652
                                                                        ===================================

Identifiable assets:
  Turbine Component Services and Repair Group ......................    $  36,339    $  41,641    $  47,367
  Aerospace Component Manufacturing Group ..........................       15,647       21,360       18,408
  Metal Finishing Group ............................................        7,735        8,047        8,247
  Corporate ........................................................        7,618       15,548        6,478
                                                                        -----------------------------------

      Consolidated total assets ....................................    $  67,339    $  86,596    $  80,500
                                                                        ===================================

Non-U.S. operations (primarily the Company's Ireland operations):
  Net sales ........................................................    $  23,872    $  38,224    $  46,402
  Operating income (loss) ..........................................       (4,842)      3,964         2,824
  Identifiable assets (excluding cash) .............................       23,239       23,579       29,768
</TABLE>

                                       38

<PAGE>

                                                                     SCHEDULE II

                     SIFCO INDUSTRIES, INC. AND SUBSIDIARIES
       VALUATION AND QUALIFYING ACCOUNTS - ALLOWANCE FOR DOUBTFUL ACCOUNTS
              FOR THE YEARS ENDED SEPTEMBER 30, 2002, 2001 AND 2000
                             (AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                    2002         2001         2000
                                                                    ----         ----         ----
<S>                                                               <C>           <C>          <C>
Balance beginning of period .................................     $  1,422      $   765      $   722

Additions-charged to costs and expenses .....................          481        1,098          220

Addition - reallocation of Corporate Reserves ...............           --          433           --

Deductions-accounts determined to be uncollectible ..........         (654)        (930)        (140)

Recoveries of fully reserved accounts .......................            2           32           23

Exchange rate changes and other .............................           (1)          24          (60)
                                                                  ----------------------------------

Balance end of period .......................................     $  1,250      $ 1,422      $   765
                                                                  ==================================
</TABLE>

                                       39

<PAGE>

ITEM 9.  CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
         DISCLOSURE

On June 25, 2002, the Board of Directors of SIFCO Industries, Inc. adopted the
recommendation of its Audit Committee that Arthur Andersen LLP be dismissed as
the Company's auditors and that Grant Thornton LLP be engaged to serve as the
Company's independent public accountants. Please see the Company's Current
Report on Form 8-K dated June 27, 2002 filed with the Securities and Exchange
Commission.

                                    PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND KEY EMPLOYEES OF THE REGISTRANT

The Company incorporates herein by reference the information appearing under the
captions "Proposal to Elect Six Directors" and "Stock Ownership of Officers,
Directors and Nominees" and "Organization and Compensation of the Board of
Directors" of the Company's definitive Proxy Statement to be filed with the
Securities and Exchange Commission on or about December 13, 2002.

The Directors of the Company are elected annually to serve for one-year terms or
until their successors are elected and qualified. Information concerning
executive officers of the Company is contained in Part I of this report under
the caption "Executive Officers of the Registrant".

ITEM 11. EXECUTIVE COMPENSATION

The Company incorporates herein by reference the information appearing under the
captions "Executive Compensation", "Report of the Compensation Committee" and
"Performance Graph" of the Company's definitive Proxy Statement to be filed with
the Securities and Exchange Commission on or about December 13, 2002.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

<TABLE>
<CAPTION>
                                                                                                               NUMBER OF
                                                                                                              SECURITIES
                                                                          NUMBER OF                            REMAINING
                                                                        SECURITIES TO        WEIGHTED        AVAILABLE FOR
                                                                        BE ISSUED UPON       AVERAGE        FUTURE ISSUANCE
                                                                         EXERCISE OF      EXERCISE PRICE     UNDER EQUITY
                                                                         OUTSTANDING      OF OUTSTANDING     COMPENSATION
                            PLAN CATEGORY                                  OPTIONS           OPTIONS             PLANS
                            -------------                                  -------           -------             -----
<S>                                                                     <C>               <C>               <C>
Equity compensation plans approved by security holders:
      1998 Long-term Incentive Plan ..............................         210,000           $ 12.45            48,519(1)
      1995 Stock Option Plan .....................................         175,000              6.98                --
      1989 Key Employee Stock Option Plan ........................           5,000              3.75                --

Equity compensation plans not approved by security holders (2) ...              --                --                --
                                                                      ------------------------------------------------------

               Total                                                       390,000            $ 6.71            48,519
                                                                      ======================================================
</TABLE>

(1) Under the 1998 Long-term Incentive Plan the aggregate number of stock
options that may be granted in any fiscal year is limited to 1.5% of the total
outstanding Common Shares of the Company at September 30, 1998, up to a
cumulative maximum of 5% of such total outstanding shares, subject to adjustment
for forfeitures.

(2) Under the Company's restricted stock program, Common Shares may be granted
at no cost to certain officers and key employees. These shares vest over either
a four or five-year period, with either 25% or 20% vesting each year,
respectively. Under the terms of the program, participants will not be entitled
to dividends nor voting rights until the shares have vested. In fiscal 2002 and
2001, the Company awarded 50,000 four-year vesting and 100,000 five-year vesting
restricted Common Shares, respectively.

                                       40

<PAGE>

For additional information concerning the Company's equity compensation plans,
refer to the discussion in Note 8 to the Consolidated Financial Statements.

The Company incorporates herein by reference the information appearing under the
caption "Outstanding Shares and Voting Rights" of the Company's definitive Proxy
Statement to be filed with the Securities and Exchange Commission on or about
December 13, 2002.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         None.

ITEM 14. CONTROLS AND PROCEDURES

Within 90 days of the filing of this report, an evaluation was performed by the
Company's Chief Executive Officer and the Chief Financial Officer of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures. Based on that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that the Company's disclosure controls and
procedures were effective as of September 30, 2002. No significant changes in
the Company's internal controls or in other factors have occurred that could
significantly affect controls subsequent to September 30, 2002.

                                     PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

         (a)(1)FINANCIAL STATEMENTS:

         The following Consolidated Financial Statements; Notes to the
         Consolidated Financial Statements and the Reports of Independent
         Certified Public Accountants are included in Item 8.

         Report of Independent Certified Public Accountants

         Report of Independent Certified Public Accountants on the Financial
         Statement Schedule

         Copy of Report of Independent Public Accountants (who have ceased
         operations)

         Copy of Report of Independent Public Accountants (who have ceased
         operations) on the Financial Statement Schedule

         Consolidated Statements of Operations for the Years Ended
         September 30, 2002, 2001 and 2000

         Consolidated Balance Sheets - September 30, 2002 and 2001

         Consolidated Statements of Cash Flows for the Years Ended
         September 30, 2002, 2001 and 2000

         Consolidated Statements of Shareholders' Equity for the Years Ended
         September 30, 2002, 2001 and 2000

         Notes to Consolidated Financial Statements - September 30, 2002,
         2001 and 2000

         (a)(2)FINANCIAL STATEMENT SCHEDULES:

         The following financial statement schedule is included in Item 8:

         Schedule II  -   Valuation and Qualifying Accounts - Allowance for
         Doubtful Accounts

         All other schedules for which provision is made in the applicable
         accounting regulations of the Securities and Exchange Commission are
         not required under the related regulations, are inapplicable, or the
         information has been included in the Notes to the Consolidated
         Financial Statements.

                                       41

<PAGE>

          (a)(3)  EXHIBITS:

          The following exhibits are filed with this report or are incorporated
herby reference to a prior filing in accordance with Rule 12b-32 under the
Securities and Exchange Act of 1934 (Asterisk denotes exhibits filed with this
report.)

           Exhibit                      Description
           -------                      -----------
             No.
             ---
             3.1    Third Amended Articles of Incorporation of SIFCO
                    Industries, Inc., filed as Exhibit 3(a) of the Company's
                    Form 10-Q dated March 31, 2002, and incorporated herein by
                    reference

             3.2    SIFCO Industries, Inc. Amended and Restated Code of
                    Regulations dated January 29, 2002, filed as Exhibit 3(b)
                    of the Company's Form 10-Q dated March 31, 2002, and
                    incorporated herein by reference

             4.1    Amended and Restated Reimbursement Agreement dated April
                    30, 2002 Between SIFCO Industries, Inc. and National City
                    Bank, filed as Exhibit 4(a) of the Company's Form 10-Q
                    dated March 31, 2002, and incorporated herein by reference

             4.2    Amended and Restated Credit Agreement Between SIFCO
                    Industries, Inc. and National City Bank dated April 30,
                    2002, filed as Exhibit 4(b) of the Company's Form 10-Q
                    dated March 31, 2002, and incorporated herein by reference

             4.3    Promissory Note (Term Note) dated April 14, 1998 Between
                    SIFCO Industries, Inc. and National City Bank, filed as
                    Exhibit 4(c) of the Company's Form 10-Q dated March 31,
                    2002, and incorporated herein by reference

             4.4    Loan Agreement Between Hillsborough County Industrial
                    Development Authority and SIFCO Industries, Inc., dated as
                    of May 1, 1998, filed as Exhibit 4(d) of the Company's Form
                    10-Q dated March 31, 2002, and incorporated herein by
                    reference

            *4.5    Consolidated Amendment No. 1 to Amended and Restated Credit
                    Agreement, Amended and Restated Reimbursement Agreement and
                    Promissory Note dated November 26, 2002 between SIFCO
                    Industries, Inc. and National City Bank

            *9.1    Voting Trust Extension Agreement dated January 14, 2002

            *9.2    Voting Trust Agreement dated January 15, 1997

            10.1    1989 Key Employee Stock Option Plan, filed as Exhibit B of
                    the Company's Form S-8 dated January 9, 1990 and
                    incorporated herein by reference

            10.2    Deferred Compensation Program for Directors and Executive
                    Officers (as amended and restated April 26, 1984), filed as
                    Exhibit 10(b) of the Company's Form 10-Q dated March 31,
                    2002, and incorporated herein by reference

            10.3    SIFCO Industries, Inc. 1998 Long-term Incentive Plan, filed
                    as Appendix A of the Company's Schedule 14A dated December
                    21, 1998, and incorporated herein by reference

            10.4    SIFCO Industries, Inc. 1995 Stock Option Plan, filed as
                    Exhibit 10(d) of the Company's Form 10-Q dated March 31,
                    2002, and incorporated herein by reference

            10.5    Change in Control Severance Agreement between the Company
                    and Frank Cappello, dated September 28, 2000, filed as
                    Exhibit 10(g) of the Company's Form 10-Q dated December 31,
                    2000 and incorporated herein by reference

            10.6    Change in Control Severance Agreement between the Company
                    and Hudson Smith, dated September 28, 2000, filed as
                    Exhibit 10 (h) of the Company's Form 10-Q dated December
                    31, 2000 and incorporated herein by reference

                                      42

<PAGE>

             10.7   Change in Control Severance Agreement between the Company
                    and Remigijus Belzinskas, dated September 28, 2000, filed
                    as Exhibit 10 (i) of the Company's Form 10-Q dated December
                    31, 2000 and incorporated herein by reference

             10.8   Change in Control Agreement between the Company and Frank
                    Cappello, dated November 9, 2000, filed as Exhibit 10 (j)
                    of the Company's Form 10-Q dated December 31, 2000 and
                    incorporated herein by reference

            *10.9   Change in Control Severance Agreement between the Company
                    and Timothy V. Crean, dated July 30, 2002

           *10.10   Change in Control Severance Agreement between the Company
                    and Jeffrey P. Gotschall, dated July 30, 2002

           *10.11   Form of Restricted Stock Agreement

             16.1   Letter from Arthur Andersen LLP to the Securities and
                    Exchange Commission dated June 27, 2002, filed as Exhibit
                    16 of the Company's Form 8-K dated June 27, 2002 and
                    incorporated by reference

            *21.1   Subsidiaries of the Company

            *23.1   Consent of Grant Thornton LLP

            *99.1   Certification of Chief Financial Officer pursuant to
                    Section 906 of Sarbanes-Oxley Act of 2002

            *99.2   Certification of Chief Executive Officer pursuant to
                    Section 906 of Sarbanes-Oxley Act of 2002

          (a)(4)  REPORTS ON FORM 8-K

          No reports on Form 8-K were filed during the last quarter of the
fiscal year ended September 30, 2002.

                                       43

<PAGE>

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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. and Subsidiaries

                                By: /s/ Frank A. Cappello
                                -------------------------
                                Vice President-Finance
                                and Chief Financial Officer
                                (Principal Financial Officer)
                                Date: December 13, 2002

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual
Report has been signed below on December 13, 2002 by the following persons on
behalf of the Registrant in the capacities indicated.

        /s/ Jeffrey P. Gotschall                /s/ Alayne L. Reitman
        --------------------------              ---------------------------
        Jeffrey P. Gotschall                    Alayne L. Reitman
        Chairman of the Board and               Director
        Chief Executive Officer

        /s/ Hudson D. Smith                     /s/ J. Douglas Whelan
        --------------------------              ---------------------------
        Hudson D. Smith                         J. Douglas Whelan
        Treasurer, Director and                 Director
        President of Aerospace Component
        Manufacturing Group

        /s/ Michael S. Lipscomb                 /s/ Remigijus H. Belzinskas
        --------------------------              ---------------------------
        Michael S. Lipscomb                     Remigijus H. Belzinskas
        Director                                Corporate Controller
                                                (Principal Accounting Officer)

        /s/ P. Charles Miller, Jr.
        --------------------------
        P. Charles Miller
        Director

                                       44

<PAGE>

                                 CERTIFICATIONS

I, Jeffrey P. Gotschall, certify that:

    1.   I have read this annual report on Form 10-K of SIFCO Industries, Inc.

    2.   Based on my knowledge, this annual report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this annual report;

    3.   Based on my knowledge, the financial statements, and other financial
         information included in this annual report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this annual report;

    4.   The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         have:

             a.   Designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this annual report is being prepared;

             b.   Evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation Date");
                  and

             c.   Presented in this annual report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

    5.   The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent functions);

             a.   All significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

             b.   Any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

    6.   The registrant's other certifying officers and I have indicated in this
         annual report whether there were significant changes in internal
         controls or in other factors that could significantly affect internal
         controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.

    Date: December 13, 2002                       /s/ Jeffrey P. Gotschall
                                                  ------------------------
                                                  Jeffrey P. Gotschall
                                                  Chairman of the Board and
                                                  Chief Executive Officer

                                       45

<PAGE>

                                 CERTIFICATIONS

I, Frank A. Cappello, certify that:

    1.   I have read this annual report on Form 10-K of SIFCO Industries, Inc.

    2.   Based on my knowledge, this annual report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this annual report;

    3.   Based on my knowledge, the financial statements, and other financial
         information included in this annual report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this annual report;

    4.   The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         have:

             a.   Designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this annual report is being prepared;

             b.   Evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation Date");
                  and

             c.   Presented in this annual report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

    5.   The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent functions);

             a.   All significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

             b.   Any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

    6.   The registrant's other certifying officers and I have indicated in this
         annual report whether there were significant changes in internal
         controls or in other factors that could significantly affect internal
         controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.

    Date: December 13, 2002                       /s/ Frank A. Cappello
                                                  ---------------------
                                                  Frank A. Cappello
                                                  Vice President - Finance and
                                                  Chief Financial Officer

                                       46

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.5
<SEQUENCE>3
<FILENAME>l97786aexv4w5.txt
<DESCRIPTION>EXHIBIT 4.5
<TEXT>
<PAGE>

                                                                     EXHIBIT 4.5

                         CONSOLIDATED AMENDMENT NO. 1 TO
           AMENDED AND RESTATED CREDIT AGREEMENT, AMENDED AND RESTATED
                   REIMBURSEMENT AGREEMENT AND PROMISSORY NOTE

         This Consolidated Amendment No. 1 to Amended and Restated Credit
Agreement, Amended and Restated Reimbursement Agreement, and Promissory Note
(this "AMENDMENT"), dated as of November 26, 2002, is entered into by and
between SIFCO INDUSTRIES, INC. (the "BORROWER") and NATIONAL CITY BANK (the
"BANK") for the purposes amending and supplementing the documents and
instruments referred to below.

                                   WITNESSETH:

         WHEREAS, Borrower and Bank are parties to an Amended and Restated
Credit Agreement made as of April 30, 2002, as amended by Letter Agreement dated
August 1, 2002 (as amended, the "CREDIT AGREEMENT" providing for $10,000,000 of
revolving credits; all terms used in the Credit Agreement being used herein with
the same meaning); and

         WHEREAS, Borrower and Bank are parties to an Amended and Restated
Reimbursement Agreement made as of April 30, 2002, as amended by Letter
Agreement dated August 1, 2002 (as amended, the "REIMBURSEMENT AGREEMENT"
pursuant to which a Letter of Credit was issued in the initial stated amount of
$4,225,280; all terms used in the Reimbursement Agreement being used herein with
the same meaning); and

         WHEREAS, Borrower and Bank are parties to Promissory Note made as of
April 14, 1998 (the "TERM NOTE" providing for a $12,000,000 term loan; all terms
used in the Term Note being used herein with the same meaning); and

         WHEREAS, Borrower and Bank desire to waive and amend certain provisions
of the Credit Agreement, Reimbursement Agreement and Term Note to, among other
things, (a) waive certain financial covenants applicable thereto, (b) modify the
interest rate pricing grids and (c) amend certain financial covenants therein;
and

         NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:

SECTION I - AMENDMENTS TO CREDIT AGREEMENT

A.       Section 2A.04(b) of the Credit Agreement is hereby amended to read as
follows:

         (b) computed, so long as the Subject Commitment remains in effect, in
accordance with the pricing grid set forth below:

<TABLE>
<CAPTION>
Pre-tax Interest Coverage              Commitment Fee
- -------------------------              --------------
<S>                                    <C>
>10x                                       0.25%
>7.5x to 10x                               0.25%
>5.0x to 7.5x                              0.25%
>2.5x to 5.0x                              0.25%
1.0X TO 2.5X                               0.375% (BOLD REFLECTS CURRENT PRICING)
</TABLE>

B.       The pricing grid set forth in Subsection 2B.11(a) of the Credit
Agreement is hereby amended to read as follows:

<TABLE>
<CAPTION>
Pre-Tax Interest Coverage              LIBOR Margin
- -------------------------              ------------
<S>                                    <C>
>10x                                       1.25%
>7.5x to 10x                               1.50%
>5.0x to 7.5x                              1.75%
>2.5x to 5.0x                              2.00%
1.0X TO 2.5X                               2.25% (BOLD REFLECTS CURRENT PRICING)
</TABLE>

                                      1

<PAGE>

SECTION II - AMENDMENTS TO REIMBURSEMENT AGREEMENT

A.       Section 2(a) of the Reimbursement Agreement is hereby amended to revise
the pricing grid therein to read as follows:

<TABLE>
<CAPTION>
Pre-Tax Interest Coverage              Annual Commitment Fee
- -------------------------              ---------------------
<S>                                    <C>
>10x                                           1.00%
>7.5x to 10x                                   1.25%
>2.5X TO 7.5X                                  1.50% (BOLD REFLECT CURRENT PRICING)
</TABLE>

B.       Subsection 7(c)(EBITDA TO INTEREST EXPENSE) is hereby WAIVED for the
periods ending September 30, 2002, December 31, 2002 and March 31, 2003.
Effective with the period ending June 30, 2003, the ratio of EBITDA TO INTEREST
EXPENSE shall be 2.00 TO 1.00 at June 30, 2003 and 3.00 TO 1.00 at September 30,
2003 and thereafter. Asset Impairment charges for fiscal 2002 will not be
included in this calculation.

C.       Subsection 7(d) (TANGIBLE NET WORTH) is hereby WAIVED for the period
ending September 30, 2002. Effective with the period ending December 31, 2002,
the required minimum Tangible Net Worth shall be $31,000,000 plus 50% of net
income for such fiscal year.

D.       Subsection 7(e) (TOTAL LIABILITIES TO TANGIBLE NET WORTH) is hereby
amended such that the ratio shall be 1.00 TO 1.00 at September 30, 2002 and
1.10 to 1.00 at December 31, 2002 and thereafter.

E.       Subsection 7(f) (CAPITAL EXPENDITURES) is hereby WAIVED for the period
ending September 30, 2002. Effective with the period ending December 31, 2002,
CAPITAL EXPENDITURES in any fiscal year shall not exceed a maximum amount of
$3,500,000.

SECTION III - AMENDMENTS TO PROMISSORY NOTE

A.       Section (c) of the Promissory Note is hereby amended to revised the
pricing grid therein as follows:

<TABLE>
<CAPTION>
Pre-Tax Interest Coverage              LIBOR Rate
- -------------------------              ----------
<S>                                    <C>
>10x                                   LIBOR + 1.25%
>7.5x to 10x                           LIBOR + 1.50%
>5.0x to 7.5x                          LIBOR + 1.75%
>2.5x to 5.0x                          LIBOR + 2.00%
1.0X TO 2.5X                           LIBOR + 2.25% (BOLD REFLECTS CURRENT PRICING)
</TABLE>

SECTION IV - REPRESENTATIONS AND WARRANTIES

Borrower hereby represents and warrants to Bank that

         (A) none of the representations and warranties made in the Credit
         Agreement, the Reimbursement Agreement or the Promissory Note
         (collectively, the "Loan Documents") has ceased to be true and complete
         in any material respect as of the date hereof; and

         (B) as of the date hereof no "Default" has occurred that is continuing
         under the Loan Documents.

SECTION V - ACKNOWLEDGMENTS CONCERNING OUTSTANDING LOANS

Borrower acknowledges and agrees that, as of the date hereof, all of Borrower's
outstanding loan obligations to Bank are owed without any offset, deduction,
defense, claim or counterclaim of any nature whatsoever. Borrower authorizes
Bank to share all credit and financial information relating to Borrower with
each of Bank's parent company and with any subsidiary or affiliate company of
such Bank or of such Bank's parent company.

                                      2

<PAGE>

SECTION VI - REFERENCES

On and after the effective date of this Amendment, each reference in the Credit
Agreement, the Reimbursement Agreement or the Term Note to "this Agreement",
"hereunder", "hereof", or words of like import referring to the Credit
Agreement, Reimbursement Agreement or Term Note shall mean and refer to the
Credit Agreement, Reimbursement Agreement and Term Note as amended hereby. The
Loan Documents, as amended by this Amendment, are and shall continue to be in
full force and effect and are hereby ratified and confirmed in all respects. To
the extent any amendment set forth in any previous amendment is omitted from
this Amendment, the same shall be deemed eliminated as between Borrower and the
other parties hereto as of the date hereof. The execution, delivery and
effectiveness of this Amendment shall not operate as a waiver of any right,
power or remedy of Bank under the Loan Documents or constitute a waiver of any
provision of the Loan documents except as specifically set forth herein.

SECTION VII - COUNTERPARTS AND GOVERNING LAW

This Amendment may be executed in any number of counterparts, each counterpart
to be executed by one or more of the parties but, when taken together, all
counterparts shall constitute one agreement. This Amendment, and the respective
rights and obligations of the parties hereto, shall be construed in accordance
with and governed by Ohio law.

         IN WITNESS WHEREOF, the Borrower and the Bank have caused this
Amendment to be executed by their authorized officers as of the date and year
first above written.

SIFCO INDUSTRIES, INC.                        NATIONAL CITY BANK

By:    /s/ Frank A.Cappello                   By:    /s/ Terry A. Wolford
       --------------------                          --------------------
Name:  Frank A. Cappello                      Name:  Terry A. Wolford
Title: Vice Present - Finance and             Title: Vice President
       Chief Financial Officer

                                      3

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-9.1
<SEQUENCE>4
<FILENAME>l97786aexv9w1.txt
<DESCRIPTION>EXHIBIT 9.1
<TEXT>
<PAGE>

                                                                     EXHIBIT 9.1

                        VOTING TRUST EXTENSION AGREEMENT

         THIS AGREEMENT entered into by and among those holders of Common Shares
of SIFCO Industries, Inc. executing and delivering this Agreement
("Shareholders") and JANICE G. CARLSON and CHARLES H. SMITH, III, as Trustees
and their successors in trust (said named Trustees and their successors being
hereinafter called the "Trustees");

                                    WITNESSES

         As of February 1, 1997 certain shareholders of SIFCO Industries, Inc.
(the "Company") entered into a Voting Trust Agreement (the "Trust Agreement")
with respect to their shares of Common Stock in the Company; and

         Pursuant to Section 14 of the Trust Agreement, the term of Trust
Agreement may be extended for an additional period not to exceed ten years upon
the concurrence of the holders of Trust Certificates representing not less than
85% of the 2,002,947 shares deposited under the Trust Agreement, (after giving
effect to stock dividends issued subsequent to the date of the Trust Agreement,
the "Trust Shares"); and

         The shareholders constituting the holders of Trust Certificates
representing not less than 85% of the Trust Shares, wish to extend the term of
the Trust Agreement, on the terms and conditions set forth therein, for an
additional five (5) years from January 31, 2002.

         NOW, THEREFORE, each Shareholder of the Company who becomes a party
hereto agrees with each of the other such Shareholders for himself and his
heirs, administrators, successors and assigns as follows:

         1.   Extension of Trust Agreement. The Trust Agreement shall be
              extended, unless sooner terminated on the terms and conditions
              set forth therein, to January 31, 2007, upon the occurrence prior
              to January 31, 2002 of the earlier of either:

                (a)   the execution of this Agreement by the holders of not less
                      than 1,702,5005 shares of Common Stock of the Company,
                      such number representing not less than 85% of the Trust
                      Shares, or

                (b)   the presentation to the Company of a certificate signed by
                      the Secretary of the meeting, certifying that at a meeting
                      duly called and held for the purpose of considering an
                      extension, at a place in Cuyahoga County, Ohio, specified
                      in a notice given either by the Trustees or a Trust
                      Certificate holder, not less than ten (10) nor more than
                      thirty (30) days prior to such meeting to each Trust
                      Certificate holder under the Trust Agreement, the holders
                      of Trust Certificates representing not less than
                      eighty-five (85) percent of the Trust Shares voted in
                      favor of this extension.

         2.   Defined Terms. Capitalized terms used herein and not otherwise
              defined shall have the meanings assigned to them in the Trust
              Agreement.

         3.   Execution. This Extension Agreement may be executed in any number
              of counterparts, each of which, when executed, shall be deemed to
              be an original and all of which together shall constitute but one
              and the same instrument. This Extension Agreement shall inure to
              the benefit of, and be binding upon, all persons executing it and
              their respective heirs, executors, administrators, legatees and
              assigns.

                  IN WITNESS WHEREOF, the Trustees have executed and delivered
this Extension Agreement and the Shareholders have become parties hereto in the
manner herein before provided.

TRUSTEES:

/s/ Janice G. Carlson                                /s/ Charles H. Smith, III
- ---------------------                                -------------------------
Janice G. Carlson                                    Charles H. Smith, III

                                      1

<PAGE>

                        VOTING TRUST EXTENSION AGREEMENT

                               TO JANUARY 31, 2007

<TABLE>
<CAPTION>
                                          NUMBER
SHAREHOLDER                              OF SHARES           SIGNATURE                   DATE
- -----------                              ---------           ---------                   ----
<S>                                      <C>                 <C>                         <C>
C. H. Smith, Jr.                          243,367            /s/ C. H. Smith, Jr         1/14/02
                                                             -------------------------   -------

Florence Smith                              3,600            /s/ Florence Smith          1/14/02
                                                             -------------------------   -------

C. H. Smith Sr. Foundation                 75,463
        C. H. Smith, Jr., President                          /s/ C. H. Smith, Jr.        1/14/02
                                                             -------------------------   -------

Charles H. Smith, III                      59,337            /s/ C.H. Smith, III         1/12/02
                                                             -------------------------   -------

Hilda Smith                                 3,575            /s/ Hilda Smith             1/12/02
                                                             -------------------------   -------

Jennifer Smith (Cust)                       4,963            /s/ Charles H. Smith, III   1/12/02
                                                             -------------------------   -------

Jennifer C. Smith (TTEE)                   14,250            /s/ Charles H. Smith, III   1/12/02
                                                             -------------------------   -------

Jason Smith (Cust)                          4,838            /s/ Charles H. Smith, III   1/12/02
                                                             -------------------------   -------

C. Jason Smith (TTEE)                      14,250            /s/ Charles H. Smith, III   1/12/02
                                                             -------------------------   -------

Hudson D. Smith                            73,344            /s/ Hudson D. Smith         1/07/02
                                                             -------------------------   -------

Deborah Ann Smith                           4,255            /s/ Deborah Smith           1/07/02
                                                             -------------------------   -------

Hudson D. Smith, Jr.                        4,576            /s/ Hudson D. Smith, Jr.    1/07/02
                                                             -------------------------   -------

Hudson D. Smith, Jr. (TTEE)                15,000            /s/ Hudson D. Smith         1/07/02
                                                             -------------------------   -------

Cynthia R. Smith (Cust)                     4,576            /s/ Hudson D. Smith         1/07/02
                                                             -------------------------   -------

Cynthia R. Smith (TTEE)                    15,200            /s/ Hudson D. Smith         1/07/02
                                                             -------------------------   -------

C. Halle Smith (Cust)                       4,576            /s/ Hudson D. Smith         1/07/02
                                                             -------------------------   -------

C. Halle Smith (TTEE)                      15,200            /s/ Hudson D. Smith         1/07/02
                                                             -------------------------   -------
</TABLE>

                                      2

<PAGE>

                        VOTING TRUST EXTENSION AGREEMENT

                               TO JANUARY 31, 2007

<TABLE>
<CAPTION>
                                          NUMBER
SHAREHOLDER                              OF SHARES           SIGNATURE                  DATE
- -----------                              ---------           ---------                  ----
<S>                                      <C>                 <C>                        <C>
Deborah Morris                             61,741            /s/ Deborah Morris         12/25/01
                                                             -------------------------  --------

Robert J. Morris, Jr.                         225            /s/ Robert J. Morris, Jr   12/25/01
                                                             -------------------------  --------

Robert J. Morris, III                      18,863            /s/ Robert J. Morris, III  12/25/01
                                                             -------------------------  --------

Skylar D. Morris (Cust)                     2,250            /s/ Robert J. Morris, III  12/25/01
                                                             -------------------------  --------

Ryan C. Morris                             11,738            /s/ Ryan C. Morris         12/25/01
                                                             -------------------------  --------

Ryan C. Morris (TTEE)                       7,125            /s/ Deborah Morris         12/25/01
                                                             -------------------------  --------

Kaitlin Morris (Cust)                         100            /s/ Ryan C. Morris         12/25/01
                                                             -------------------------  --------

Adam Morris                                 4,613            /s/ Adam Morris            12/25/01
                                                             -------------------------  --------

Adam Morris (TTEE)                         14,250            /s/ Deborah Morris         12/25/01
                                                             -------------------------  --------

Molly D. Morris (Cust)                      4,613            /s/ Deborah Morris         12/25/01
                                                             -------------------------  --------

Molly D. Morris (TTEE)                     14,250            /s/ Deborah Morris         12/25/01
                                                             -------------------------  --------
</TABLE>

                                      3

<PAGE>

                        VOTING TRUST EXTENSION AGREEMENT

                               TO JANUARY 31, 2007

<TABLE>
<CAPTION>
                                          NUMBER
SHAREHOLDER                              OF SHARES           SIGNATURE                   DATE
- -----------                              ---------           ---------                   ----
<S>                                      <C>                 <C>                         <C>
Phyllis S. Gotschall TTEE                 304,677            /s/ Phyllis S. Gotschall    12/22/01
                                                             ------------------------    --------

George D. Gotschall TTEE                   94,088            /s/ Phyllis S. Gotschall    12/22/01
                                                             ------------------------    --------

                                                             /s/ Jeffrey P. Gotschall    12/13/01
                                                             ------------------------    --------
Family Annuity TR #1                       43,500            /s/ Phyllis S. Gotschall    12/22/01
                                                             ------------------------    --------

                                                             /s/ Jeffrey P. Gotschall    12/13/01
                                                             ------------------------    --------
Family Annuity TR #2                       43,500            /s/ Phyllis S. Gotschall    12/22/01
                                                             ------------------------    --------

Jeffrey P. Gotschall                      104,700            /s/ Jeffrey P. Gotschall    12/2/01
                                                             ------------------------    --------

Dianne Gotschall                              400            /s/ Dianne Gotschall        12/2/01
                                                             ------------------------    --------

Judith A. Gotschall                        10,375            /s/ Judith A. Gotschall     12/9/01
                                                             ------------------------    --------

Andrew C. Gotschall                        10,375            /s/ Andrew C. Gotschall1    2/14/01
                                                             ------------------------    --------

Charles H. Gotschall (Cust)                10,375            /s/ Jeffrey P. Gotschall    12/13/01
                                                             ------------------------    --------

Craig Ramsey                                7,400            /s/ Craig Ramsey            12/13/01
                                                             ------------------------    --------

Alison Ramsey                               7,400            /s/ Alison Ramsey           12/13/01
                                                             ------------------------    --------
</TABLE>

                                      4

<PAGE>

                        VOTING TRUST EXTENSION AGREEMENT

                               TO JANUARY 31, 2007

<TABLE>
<CAPTION>
                                          NUMBER
SHAREHOLDER                              OF SHARES           SIGNATURE                  DATE
- -----------                              ---------           ---------                  ----
<S>                                      <C>                 <C>                        <C>
Janice G. Carlson                         66,099             /s/ Janice G. Carlson      12/26/01
                                                             ----------------------     --------

Christie L. Lennen                        10,375             /s/ Christie L. Lennen     12/10/01
                                                             ----------------------     --------

David E. Fulcher                          10,375             /s/ David E. Fulcher       12/21/01
                                                             ----------------------     --------

Laura G. Gifford                          58,844             /s/ Laura G. Gifford       12/04/01
                                                             ----------------------     --------

Robert V. Gifford, Jr. (Cust)              7,000             /s/ Laura G. Gifford       12/04/01
                                                             ----------------------     --------

Robert V. Gifford, Jr. (TTEE)              9,450             /s/ Laura G. Gifford       12/04/01
                                                             ----------------------     --------

Terry G. Gifford (Cust)                    7,800             /s/ Laura G. Gifford       12/04/01
                                                             ----------------------     --------
</TABLE>

                                      5

<PAGE>

                        VOTING TRUST EXTENSION AGREEMENT

                               TO JANUARY 31, 2007

<TABLE>
<CAPTION>
                                          NUMBER
SHAREHOLDER                              OF SHARES           SIGNATURE                   DATE
- -----------                              ---------           ---------                   ----
<S>                                      <C>                 <C>                         <C>
National City Bank, and its
successors, as trustee of
Fund A-1 under the trust
agreement between Rhea D. Smith
and National City Bank as trustee
dated December 8, 1981 as amended
and restated on September 16, 1989        112,356            /s/ Maurice Condon, Jr      2/17/01
                                                             ----------------------      --------

National City Bank, and its
successors, as trustee of Fund B
under the trust agreement between
Rhea D. Smith and National City
Bank as trustee dated December
8, 1981 as amended and
restated on September 16, 1989             41,313            /s/ Maurice Condon, Jr      12/17/01
                                                             ----------------------      --------

National City Bank TTEE U/A
FRW/CHS #33-3443034                       171,202            /s/ Maurice Condon, Jr      12/17/01
                                                             ----------------------      --------

National City Bank TTEE U/A
FRW/PSG #33-3443026                       171,207            /s/ Maurice Condon, Jr      12/17/01
                                                             ----------------------      --------
</TABLE>

                                      6

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-9.2
<SEQUENCE>5
<FILENAME>l97786aexv9w2.txt
<DESCRIPTION>EXHIBIT 9.2
<TEXT>
<PAGE>

                                                                     EXHIBIT 9.2

                             VOTING TRUST AGREEMENT

         THIS AGREEMENT executed this 15th day of January 1997 effective as of
the 1 st day of February 1997 (hereinafter referred to as the "Effective Date"),
by and between those holders of Common Shares of SIFCO Industries, Inc. who sign
this Agreement (hereinafter sometimes collectively called the "Signing
Shareholders" and individually called "Signing Shareholder"), and JANICE CARLSON
and CHARLES H. SMITH, III, as Trustees and their successors in trust (said named
Trustees and their successors being hereinafter called the "Trustees");

                                 WITNESSES THAT:
         WHEREAS, each Signing Shareholder represents that he (the masculine
pronoun wherever used in this Agreement being intended to include the feminine)
owns the number of Common Shares of the Company set opposite his signature below
and deems it to be in his best interest to renew, continue and extend the Voting
Trust Agreement in effect with respect to his shares of the Company and maintain
on deposit hereunder the certificates evidencing his ownership of said shares in
order to continue the stability of management of the Company which the Signing
Shareholders believe should be continued for the benefit and protection of the
Company and its present and future shareholders;

         NOW, THEREFORE, the Signing Shareholders hereof agree each with the
others, and each for himself and his heirs, administrators, successors and
assigns as follows:

         1.   Deposit of Share Certificates. As with the Voting Trust Agreements
in the past, each Signing Shareholder will continue to have their Common Shares
of the Company on deposit with the Trustees a certificate or certificates
(hereinafter called "share certificates") for the number of Common Shares of the
Company set opposite his signature below, so endorsed or accompanied by such
instrument or instruments of transfer as to maintain ownership of said shares in
theTrustees; and shall likewise deposit hereunder each and every share
certificate for Common Shares of the Company which he may hereafter acquire.

         2.   Delivery of Trust Certificates. The Trustees have heretofore, and
from time to time in the future, upon the deposit with the Trustees by a Signing
Shareholder of new share certificates acquired by him, and upon his payment of
any and all transfer taxes required in connection therewith, the Trustees will
deliver, or cause to be delivered, to such Signing Shareholder voting trust
certificates (hereinafter called "Trust Certificates") for the number of Common
Shares so deposited in substantially the form shown in Exhibit A, attached
hereto and made a part hereof.

         3.   Transfer of Trust Certificates. Each Trust Certificate issued
hereunder and the interest in shares represented thereby shall be transferable
only upon the books of the Trustees by the registered holder in person or by
attorney upon surrender of the same properly endorsed or accompanied by a
properly executed instrument of transfer and upon payment of any transfer taxes
payable on such transfer, and in accordance with rules established for that
purpose by the Trustees. Each transfer so made shall vest in the transferee all
right and interest of the transferor in and under the Trust Certificate and this
Agreement with respect to the number of shares which the endorsement or transfer
evidences; and thereupon the Trustees will deliver, or cause to be delivered, to
the person or persons entitled, a new Trust Certificate or Certificates for the
number or numbers of interests in Common Shares of the Company indicated by the
endorsement or instrument of transfer. Until such transfer, the Trustees may
treat the registered holder of a Trust Certificate as the owner thereof for all
purposes whatsoever. The transfer books for the Trust, Certificates may be
closed by the Trustees at any time prior to the payment or distribution of
dividends or for any other purpose. Each transferee of a Trust Certificate
issued hereunder shall by the acceptance of a Trust Certificate become a party
hereto with like effect as though a Signing Shareholder and shall be embraced
within the meaning of the terms "Trust Certificate holder" or "holder of a Trust
Certificate" wherever used herein.

         4.   Lost Trust Certificate. The holder of any Trust Certificate shall
immediately notify the Trustees of any loss, destruction or mutilation of the
same, and the Trustees may, in their discretion, cause a new Trust Certificate
to be issued to such holder for the same number of shares either upon the
surrender of the mutilated certificate or, in the case of loss or destruction,
upon satisfactory proof thereof and the giving of a bond in such form and amount
and with such sureties, if any, as the Trustees may require.

         5.   Title and Rights of Trustees. Title to all Common Shares of the
Company deposited hereunder shall remain vested in the Trustees, and title to
any new shares deposited hereunder may be transferred to the Trustees or their
nominees on the books of the Company, provided that as holders of such shares
the Trustees assume no liability as shareholders of the Company, their interest
therein and hereunder being as Trustees only. Nonetheless the Trustees shall,
in respect of all shares so held by them, possess and be entitled to exercise,
in their discretion, all rights of common shareholders of every kind and
character, including, but not limited to, the right to receive dividends on
said shares, the right to vote by proxy or otherwise such shares and to take
part in or consent in writing or otherwise to any corporate or shareholders'
action, including, but not limited to, the adoption of any amended Articles of
Incorporation or regulations of the Company or any amendment to such Articles
or regulations, the election of directors of the Company, the dissolution of
the Company, the

                                      1

<PAGE>

merger or consolidation of the Company with any other corporation, the sale or
other disposition of all, or substantially all, of the assets of the Company or
the creation of any new class of shares having priority over the Common Shares
in respect of dividends or liquidating distributions or otherwise; except that
they shall not sell, pledge, hypothecate, mortgage or place a lien or charge
upon any of the shares deposited hereunder or subject hereto.

         6.  Dividend and Comparable Rights of Trust Certificate Holder. The
registered holder of each Trust Certificate shall be entitled to receive as soon
as practicable after the receipt by the Trustees of each dividend on the shares
hereunder, the amount of the dividend so received by the Trustees in cash or in
kind upon the number of Common Shares specified in each Trust Certificate;
provided that the Trustees may, in their discretion, authorize and empower the
Company or its dividend disbursing agent to make payment or distribution of such
dividend directly to the registered holders of the outstanding Trust
Certificates. However, in the event that the Company shall issue any voting
shares of the Company by way of a stock split or a stock dividend then such
voting shares so issuable with respect to all shares held by the Trustees shall
be received and held by the Trustees and shall be deemed for all the purposes of
this Agreement to have been deposited hereunder, and the Trustees shall issue to
each registered holder of a Trust Certificate an additional Trust Certificate
evidencing his appropriate interest in the number of voting shares so received
and held. For the purposes of this Agreement, no shares having voting rights
only in certain events (such as, but not limited to, the occurrence of a default
in the payment of preferential dividends) shall be deemed to be voting shares.

         7.   Subscription Rights. In case any stock or other securities of the
Company are offered for subscription to the holders of shares of the Company
deposited hereunder, the Trustees, promptly upon receipt of notice of such
offer, shall mail or deliver a copy thereof to each registered holder of a Trust
Certificate. If at least five (5) days prior to the last day on which such
subscription can be made, the Trustee shall receive a request from any Trust
Certificate holder to subscribe in his behalf for a stated amount of such stock
or securities, together with the sum of money required to pay for the same, the
Trustees shall make such subscription and the necessary payment, and upon
receiving from the Company the stock or securities so subscribed for, shall
issue to such Trust Certificate holder a new Trust Certificate in respect
thereof if the same be voting shares, but if the same not be voting shares the
Trustees shall mail or deliver the stock or securities received from the Company
to the Trust Certificate holder in whose behalf the subscription is made or may
instruct the Company to make delivery thereof directly to said Trust Certificate
holder; provided, however, that if the aggregate amount of such stock or
securities which the Trustees shall be so requested to subscribe for shall
exceed the total amount which the Trustees have the right to subscribe for as
shareholders of the Company under the terms of the Company's offer, then the
Trustees shall first, on behalf of each requesting Trust Certificate holder,
subscribe for that amount which, under the terms of the Company's offer, he
would have had the right to subscribe for if he had held directly the number of
shares represented by his Trust Certificate or Certificates; and any balance of
such stock or securities then additionally available for subscription by the
Trustees shall be subscribed for on behalf of each additionally requesting Trust
Certificate holder in the proportion which the amount of his additional request
bears to the total amount of additional requests received by the Trustees.

         8.    Dissolution of Company. In the event of the dissolution or total
or partial liquidation of the Company, whether voluntary or involuntary, the
Trustees shall receive the moneys, securities, rights or property to which the
holders of shares of the Company deposited hereunder are entitled and shall
distribute the same among the registered holders of the Trust Certificates in
proportion to their interests as shown by the Trustees' books, or the Trustees
may in their discretion deposit the same with any bank or trust company doing
business in Cleveland, Ohio, with instructions to distribute the same as above
provided, and upon such deposit all further obligations or liabilities of the
Trustees in respect of the moneys, securities, rights or property so deposited
shall cease.

         9.   Reorganization of Company. In the event the Company is merged into
or consolidated with another corporation or all or substantially all of the
assets of the Company are transferred to another corporation, then and
thereafter the term "Company" for all purposes of this Agreement shall be taken
to include such other corporation, and the Trustees shall receive and hold under
this Agreement any. voting. shares of such other corporation received on account
of the stock held hereunder prior to such merger, consolidation or transfer.
Trust Certificates issued and outstanding under this Agreement at the time of
such merger, consolidation, or transfer may remain outstanding or the Trustees
may, in their discretion, substitute for such Trust Certificates new Trust
Certificates in appropriate form, the term "shares" as used herein shall be
taken to include any stock which may be received by the Trustees in lieu of all
or any part of the shares of the Company theretofore deposited hereunder.

         10.  Action by Trustees. No action will be taken without the agreement
of both Trustees. In the event the Trustees are unable to come to agreement, the
issue will be decided by a vote of all the Trust Certificate holders, with a
simple majority necessary for passage.

         11.  Receipts and Safekeeping. George D. Gotschall, or such other
person, either corporate or individual, as the Trustees may from time to time
appoint for the purpose, shall have the authority and responsibility as agent of
the Trustees for receiving and safekeeping share certificates, securities and
other property or money deposited with or from time to time held by the
Trustees. Such person shall also be responsible for issuing Voting Trust
Certificates to the shareholders and notifying the Company's transfer agent of
any changes of records with respect to dividends.

         12.  Privileges and Responsibilities of Trustees. In voting the shares
deposited hereunder or in doing any act with respect to the control or
management of the Company or its affairs or in otherwise acting hereunder, the
Trustees shall

                                      2

<PAGE>

exercise their best judgment; but they assume no responsibility in respect to
any action taken by them or their agents, and no Trustee shall incur any
responsibility for any error or deed of commission or omission except for his
own willful misconduct. No Trustee shall be required to give any bond or other
security for the discharge of his duties. Any Trustee may act as a director or
officer of the Company or of any affiliated company and may vote for himself as
such director or officer, and he or any company or firm with which he may be
connected as shareholder, director, officer or partner or otherwise may contract
with the Company or with any company or firm affiliated with it or be or become
pecuniarily interested in any matter or action to which the same may be a party
or in which the same may in any way be interested as fully as though he were not
a Trustee. Any Trustee may be a holder of or interested in Trust Certificates
issued hereunder.

         13.  Successor Trustees. Each Signing Shareholder shall, after his
signature, add the last initial of the ancestor of such Signing Shareholder who
was a child of Charles H. Smith, Sr. A Trustee may only be removed by a writing
signed by a majority in interest of the Certificate holders who are issue
(including children by adoption), spouse or spouse of issue of the same child of
Charles H. Smith, Sr. as the original named Trustee or the Trustee with respect
to whom the Trustee is a successor. Any Trustee may resign in writing. Any such
resignation or removal shall take effect at a time fixed in the writing not less
than thirty (30) days after the same is delivered to the other Trustees or
Trustee, or at such earlier time as shall be accepted by all of the Trustees.
Upon any such resignation, removal or the death or incapacity of a Trustee to
act, the vacancy so occurring shall be filled by a person elected by the
majority in interest of the Certificate holders who are issue (including
children by adoption), spouse or spouse of issue of the same child of Charles H.
Smith, Sr. as the original named Trustee. Such election shall be made at a
meeting called by the remaining Trustees or Trustee for that purpose by notice
given to each Certificate holder eligible to vote not less than ten (10) nor
more than thirty (30) days prior thereto. Each and every successor Trustee
elected in accordance with this paragraph shall have the powers, duties,
privileges, responsibilities and authority of an original Trustee named herein.
No Trustee shall be liable for the acts or omissions of any predecessor Trustee.

         14.  Period of Trust. This Agreement shall continue in force for a
 period of five (5) years from the date first above written unless sooner
 terminated as hereinafter provided, and may be extended for an additional
 period of not more than ten (10) years by depositing with the Trustees on or
 before the expiration of the original five (5) year period either (a) an
 agreement of extension, which may be executed in one instrument or in several
 counterparts, signed by the holders of Trust Certificates representing not less
 than eighty-five percent (85%) of the shares deposited hereunder, or (b) a
 certificate signed by the Secretary of the meeting, certifying that at a
 meeting duly called and held for the purpose of considering such extension, at
 a place in Cuyahoga County, Ohio, specified in a notice given either by the
 Trustees, or a Trust Certificate holder, not less than ten (10) nor more than
 thirty (30) days prior to such meeting to each Trust Certificate holder
 hereunder, the holders of Trust Certificates representing not less than
 eighty-five percent (85%) of the shares deposited hereunder voted in favor of
 said extension. Such extension of this Agreement shall be binding upon all
 Trust Certificate holders. Any Trust Certificate holder shall, during
 reasonable business hours, have access to the books of the Trustees containing
 the record of the name and addresses of Trust Certificate holders and the
 number of shares represented by their certificates.

         15.  Early Termination. At any time during the original five (5) year
period, or any extension thereof, the Trustees may terminate this trust by
notice to the certificate holders, which notice shall provide for the time and
manner of delivery of certificates for shares of stock of the Company upon
surrender of the Trust Certificates.

         16.  Partial Return of Shares. At any time or times before the
termination of this trust, the Trustees may return any number of shares of the
Company deposited with them to a Trust Certificate holder or holders free and
clear of the trust, provided that the following procedure shall be observed. The
Trustees shall first notify all the Trust Certificate holders in writing of the
number of shares which they intend to return. Within thirty (30) days after the
receipt of such notice, each Trust Certificate holder who wishes any of his
shares to be returned to him shall surrender his Trust Certificate or
Certificates to the Trustees for cancellation in an amount equivalent to the
number of shares he wishes returned. If the total number of shares for which
Trust Certificates are so surrendered within such thirty (30) days is not more
than the total number of shares the Trustees have decided to return, they shall
cancel each Trust Certificate so surrendered in an amount equivalent to the
number of shares to be returned to the holder of that certificate and shall
cause a stock certificate or certificates for that number of shares of stock of
the Company to be issued and delivered to him or his nominee. If the total
number of shares for which Trust Certificates are so surrendered within such
thirty (30) days is more than the total number of shares the Trustees have
decided to return, they shall cancel each Trust Certificate so tendered in an
amount equivalent to that proportion of the number of shares requested by that
holder which the number of shares they have decided to return bears to the total
number of shares requested by all Trust Certificate holders who tender their
Trust Certificates. In no event before termination of the trust shall the
Trustees return any shares to a certificate holder who has not tendered his
Trust Certificate for cancellation.

         17.  Amendments. If at any time the Trustees shall deem it desirable to
amend this Agreement in any respect, they shall submit such amendment to the
Trust Certificate holders for their approval at a meeting of such holders which
shall be called for that purpose, notice of which shall be given not less than
ten (10) nor more than thirty (30) days prior to such meeting, and shall state
that the purpose of the meeting is to consider the amendment of this Agreement
and shall be accompanied by a copy of the proposed amendment. If at such meeting
the proposed amendment, or any modification thereof, shall be approved by the
affirmative vote, given in person or by proxy, of the holders of Trust
Certificates representing eighty-five percent (85%) or more of the shares then
deposited under this Agreement, a certificate to that effect

                                      3

<PAGE>

shall bee signed by the Secretary of the meeting and filed with the Trustees.
Upon such approval and the filing of said certificate, the amendment as so
approved shall be and become a part of this Agreement and shall be binding upon
all Trust Certificate holders with like force and effect as if originally
incorporated herein.

         18.  Delivery of Shares on Termination.

              (a)     Upon termination of this Agreement, whether by expiration
 of time or the act of the Trustees as hereinabove provided, the Trustees shall
 deliver to each Trust Certificate holder upon surrender of his Trust
 Certificates accompanied, if required by the Trustees, by properly executed
 transfers thereof to the Trustees and upon payment by such holder of any and
 all transfer taxes payable on such transfer, a certificate or certificates for
 Common Shares of the stock of the Company either registered in the name of the
 Trust Certificate holder or endorsed in blank or for transfer to the name of
 such holder or his nominee for the number of shares represented by the Trust
 Certificate or Certificates so surrendered.

              (b)     In case, on or after the termination of this Agreement,
 the Trustees shall deposit with any bank or trust company in Cuyahoga County,
 Ohio , share certificates either properly endorsed in blank or registered in
 the names of holders of Trust Certificates hereunder, each for the number of
 Common Shares of the Company represented by a Trust Certificate outstanding,
 with authority in writing to the bank or trust company to deliver said share
 certificates in exchange for Trust Certificates when and as surrendered for
 exchange as hereinabove provided and shall give not less than ten (10) days
 notice thereof to all Trust Certificate holders affected thereby, then all
 further liability of the Trustees, and each of them, for the delivery of share
 certificates in exchange for Trust Certificates or otherwise hereunder shall
 cease.

              (c)     At any annual or special meeting of the shareholders of
the Company and after termination of this Agreement, the Trustees may, but shall
not be required to, vote any shares of the Company then standing in their names
on the books of the Company deliverable to the holders of Trust Certificates who
shall not have presented their Trust Certificates for exchange as hereinabove
provided.

         19.  Notice. Each notice provided for in this Agreement shall be in
writing and signed by the person giving the same or his duly authorized
representative, except that a parent or guardian may sign for a minor child, and
a notice by the Trustees shall be signed by not less than a majority of the
Trustees then qualified to act; and each such notice shall either be delivered
personally to the person to whom it is addressed or shall be mailed to him,
postage prepaid, to his last known residence address, provided that personal
delivery to a parent or guardian of a minor child shall be sufficient delivery
to the child, and further provided that a notice to any one Trustee shall be
sufficient notice to all, unless only one Trustee has received the notice and
that Trustee has the same initial after his signature as does the person giving
the notice.

         20.  Partial Invalidity. The invalidity or nonenforceability of any
term or provision of this Agreement or of the Trust Certificates shall not in
any way impair or affect the balance thereof, which shall remain in full force
and effect.

         21.  Ohio Law. This Agreement and the Trust Certificates shall be
construed in accordance with and shall be governed by the laws of the State of
Ohio.

         22.  Execution. This Agreement may be executed in any number of
counterparts, each of which, when executed, shall be deemed to be an original
and all of which together shall constitute but one and the same instrument;
provided that this Agreement shall not become effective until and unless it
shall have been so executed by the holders of at least 1,350,000 shares, and
thereupon this Agreement shall inure to the benefit of, and be binding upon, all
persons executing it and their respective heirs, executors, administrators,
legatees and assigns.

         IN WITNESS WHEREOF, the Trustees have signed this Voting Trust
Agreement as of the day and year first above written, and the Signing
Shareholders have become parties hereto in the manner hereinbefore provided.

                                 /s/ Janice Carlson
                                 -------------------------
                                 Janice Carlson

                                 /s/ Charles H. Smith, III
                                 -------------------------
                                 Charles H. Smith, III

                                      4

<PAGE>

                             VOTING TRUST AGREEMENT
                     FROM FEBRUARY 1, 1997 TO JANUARY 31, 2002

<TABLE>
<CAPTION>
                                         NUMBER
SHAREHOLDER                             OF SHARES
- -----------                             ---------
<S>                                     <C>                  <C>
/s/ C.H. Smith, Jr.                      273,267             CHS
- -------------------------
C.H. Smith, Jr.

/s/ Florence Smith                         1,500             CHS
- -------------------------
Florence Smith

National City Bank, and its
successors, as trustee of
Fund A-1 under the trust
agreement between Rhea D. Smith
and National City Bank as trustee
dated December 8, 1981 as amended
and restated on September 16, 1989

By: /s/ E.J. Etowski, Jr.                112,354             CHS
- -------------------------
    Senior Vice President

National City Bank, and its
successors, as trustee of
Fund B under the trust
agreement between Rhea D. Smith
and National City Bank as trustee
dated December 8, 1981 as amended
and restated on September 16 1989.

By: /s/ E.J. Etowski, Jr.                 41,313             CHS
- -------------------------
    Senior Vice President
</TABLE>

                                      5

<PAGE>

                             VOTING TRUST AGREEMENT
                     FROM FEBRUARY 1, 1997 TO JANUARY 31, 2002

<TABLE>
<CAPTION>
                                         NUMBER
SHAREHOLDER                             OF SHARES
- -----------                             ---------
<S>                                     <C>                  <C>
/s/ C. H. Smith, III                     57,237              CHS
- ---------------------------------------
C. H. Smith, III

/s/ C. H. Smith, III                      2,863              CHS
- ---------------------------------------
C. H. Smith, III, Cust UGMA Ohio
fbo Jennifer C. Smith

/s/ C. H. Smith, III Trustee             14,250              CHS
- ---------------------------------------
C. H. Smith, III, TTEE U/A dtd 09/16/89
fbo Jennifer C. Smith

/s/ C. H. Smith, III                      2,738              CHS
- ---------------------------------------
C.H. Smith, III, Cust UGMA Ohio
fbo C. Jason Smith

/s/ C. H. Smith, III Trustee             14,250              CHS
- ---------------------------------------
C. H. Smith, III, TTEE U/A dtd 09/16/89
fbo C. Jason Smith

/s/ Hilda Decema Smith                    1,575              CHS
- ---------------------------------------
Hilda Decema Smith
</TABLE>

                                      6

<PAGE>

                             VOTING TRUST AGREEMENT
                     FROM FEBRUARY 1, 1997 TO JANUARY 31, 2002

<TABLE>
<CAPTION>
                                         NUMBER
SHAREHOLDER                             OF SHARES
- -----------                             ---------
<S>                                     <C>                  <C>
/s/ Deborah Potantus                      59,741             CHS
- -------------------------
Deborah Potantus

/s/ Robert J. Morris, III                  9,738             CHS
- -------------------------
Robert J. Morris, III

/s/ Deborah Potantus                       7,125             CHS
- -------------------------
Deborah Potantus, TTEE U/A dtd
fbo Robert J. Morris, III

/s/ Robert J. Morris III                     250             CHS
- -------------------------
Robert J. Morris, III, Cust UGMA Ohio
fbo Skyler D. Morris

/s/ Ryan C. Morris                         2,613             CHS
- -------------------------
Ryan C. Morris

/s/ Deborah Potantus                      14,250             CHS
- -------------------------
Deborah Potantus TTEE U/A dtd 09/16/89
fbo Ryan C. Morris

/s/ Deborah Potantus                       2,613             CHS
- -------------------------
Deborah Potantus, Cust UGMA Ohio
fbo Adam J. Morris

/s/ Deborah Potantus                      14,250             CHS
- -------------------------
Deborah Potantus, TTEE U/A dtd 09/16/89
fbo Adam J. Morris

/s/ Deborah Potantus                       2,613             CHS
- -------------------------
Deborah Potantus, Cust UGMA Ohio
fbo Molly D Morris

/s/ Deborah Potantus                      14,250             CHS
- -------------------------
Deborah Potantus, TTEE /A dta 09/16/89
fbo Molly D. Morris

</TABLE>

                                      7

<PAGE>

                             VOTING TRUST AGREEMENT
                    FROM FEBRUARY 1, 1997 TO JANUARY 31, 2002

<TABLE>
<CAPTION>
                                         NUMBER
SHAREHOLDER                             OF SHARES
- -----------                             ---------
<S>                                     <C>                  <C>
/s/ Robert J. Morris, Jr.                    225             CHS
- -------------------------
Robert J. Morris, Jr.
</TABLE>

                                      8

<PAGE>

                             VOTING TRUST AGREEMENT
                    FROM FEBRUARY 1, 1997 TO JANUARY 31, 2002

<TABLE>
<CAPTION>
                                                       Number
Shareholder                                           of Shares
- -----------                                           ---------
<S>                                                   <C>                <C>
/s/ Hudson D. Smith                                      67,250          CHS
- -------------------
Hudson D. Smith

/s/ Deborah Ann Smith                                     2,205          CHS
- ---------------------
Deborah Ann Smith

/s/ Hudson D. Smith                                       2,426          CHS
- -------------------
Hudson D. Smith, Cust for UGMA Ohio
fbo Hudson D. Smith, Jr.

/s/ Hudson D. Smith                                      15,000          CHS
- -------------------
Hudson D. Smith, TTEE U/A dtd 09/16/89
fbo Hudson D. Smith

/s/ Hudson D. Smith                                       2,426          CHS
- -------------------
Hudson D. Smith, Cust UGMA Ohio
fbo Cynthia Rhea Smith

/s/ Hudson D. Smith                                      15,000          CHS
- -------------------
Hudson D. Smith, TTEE U/A dtd 09/16/89
fbo Cynthia Rhea Smith

/s/ Hudson D. Smith                                       2,426          CHS
- -------------------
Hudson D. Smith, Cust UGMA Ohio
fbo Christina Halle Smith

/s/ Hudson D. Smith                                      15,000          CHS
- -------------------
Hudson D. Smith, TTEE U/A dtd 09/16/89
fbo Christina Halle Smith

signed on Jan. 7, 1997
</TABLE>

                                       9

<PAGE>

                             VOTING TRUST AGREEMENT
                    FROM FEBRUARY 1, 1997 TO JANUARY 31, 2002

<TABLE>
<CAPTION>
                                                       Number
Shareholder                                           of Shares
- -----------                                           ---------
<S>                                                   <C>                <C>
/s/ Phyllis S. Gotschall                               433,719           PSG
- ------------------------
Phyllis S. Gotschall, TTEE U/TR dtd 6/24/87
Phyllis S. Gotschall, Grantor

/s/ George D. Gotschall                                137,588           PSG
- -----------------------
George D. Gotschall, TTEE, U/TR dtd 6/24/87
George D. Gotschall, Grantor

/s/ Jeffrey P. Gotschall                                87,755           PSG
- ------------------------
Jeffrey P. Gotschall

/s/ Dianne Gotschall                                       400           PSG
- --------------------
Dianne Gotschall

/s/ Judith A. Gotschall                                  3,375           PSG
- -----------------------
Judith A. Gotschall

/s/ Jeffrey P. Gotschall                                 3,375           PSG
- ------------------------
Jeffrey P. Gotschall, Cust UGMA Ohio
fbo Andrew C Gotschall

/s/ Jeffrey P. Gotschall                                 3,375           PSG
- ------------------------
Jeffrey P. Gotschall, Cust UGMA Ohio
fbo Charles H. Gotschall

/s/ Craig Ramsey                                           400           PSG
- ----------------
Craig Ramsey

/s/ Jeffrey P. Gotschall                                   400           PSG
- -------------------------
Jeffrey P. Gotschall, Cust UGMA Ohio
fbo Alison Ramsey
</TABLE>

                                       10

<PAGE>

                             VOTING TRUST AGREEMENT
                    FROM FEBRUARY 1, 1997 TO JANUARY 31, 2002

<TABLE>
<CAPTION>
                                                       Number
Shareholder                                           of Shares
- -----------                                           ---------
<S>                                                   <C>                <C>
/s/ Janice G. Carlson                                   59,099           PSG
- ---------------------
Janice G. Carlson

/s/ Christie L. Fulcher                                  3,375           PSG
- ----------------------
Christie L. Fulcher

/s/ Janice G. Carlson                                    2,633           PSG
- ---------------------
Janice G. Carlson, Cust UGMA Ohio
fbo David E. Fulcher

/s/ Laura G. Gifford                                    51,844           PSG
- --------------------
Laura G. Gifford

/s/ Laura G. Gifford                                     9,450           PSG
- --------------------
Laura G. Gifford, Cust UGMA Ohio
fbo Robert V. Gifford, Jr.
</TABLE>

                                       11

<PAGE>

                             VOTING TRUST AGREEMENT
                    FROM FEBRUARY 1, 1997 TO JANUARY 31, 2002

<TABLE>
<CAPTION>
                                                       Number
Shareholder                                           of Shares
- -----------                                           ---------
<S>                                                   <C>                <C>
National City Bank TTEE U/A
FRW/CHS #33-3443034                                   171,202            CHS

By /s/ E.J. Etowski, Jr.
- ------------------------
  SENIOR VICE PRESIDENT

National City Bank TTEE U/A                           171,207            PSG
FRW/PSG #33-3443026

By /s/ E.J. Etowski, Jr.
- ------------------------
  SENIOR VICE PRESIDENT
</TABLE>

                                       12

<PAGE>

                             VOTING TRUST AGREEMENT
                     FROM FEBRUARY 1, 1997 TO JANUARY 31, 2002

<TABLE>
<CAPTION>
                                                      Number of
Shareholder                                            Shares
- -----------                                            ------
<S>                                                   <C>
Charles Henry Smith, Sr. Foundation                    77,963

By /s/ C.H. Smith, Jr.
- ----------------------
C.H. Smith, Jr., President

/s/ Phyllis S. Gotschall
- ------------------------
Phyllis S. Gotschall, Vice President

/s/ Marilyn F. Scott
- --------------------
Marilyn F. Scott, Vice President

/s/ George D. Gotschall
- -----------------------
George D. Gotschall, Secretary-Treasurer
</TABLE>

                                       13

<PAGE>

                                     SUMMARY
                      VOTING TRUST CERTIFICATE DISTRIBUTION
                                FEBRUARY 1, 1997

<TABLE>
<CAPTION>
INDIVIDUAL                                SHARES          SUBTOTAL        TOTAL %
- ----------                                ------          --------        -------
<S>                                       <C>             <C>             <C>
C.H. Smith, Jr.                           273,267
Florence Smith                              1,500
National City Bank
Fund A RDS                                112,354
National City Bank
Fund B RDS                                 41,313
FRW Trust, CHS                            171,202
- -------------------------------------------------

Subtotal Beneficial Family                                 599,636         11.70%
- --------------------------------------------------------------------------------

C.H. Smith, III                            57,237
Hilda Smith                                 1,575
Jennifer C. Smith (Cust)                    2,863
Jennifer C. Smith (TTEE)                   14,250
C. Jason Smith (Cust)                       2,738
C. Jason Smith (TTEE)                      14,250
Deborah Potantus                           59,741
Robert J. Morris, Jr.                         225
Robert J. Morris, III                       9,738
Robert J. Morris, III  (TTEE)               7,125
Skyler D. Morris                              250
Ryan C. Morris                              2,613
Ryan C. Morris (TTEE)                      14,250
Adam J. Morris (Cust)                       2,613
Adam J. Morris (TTEE)                      14,250
Molly D. Morris (Cust)                      2,613
Molly D. Morris (TTEE)                     14,250
Hudson D. Smith                            67,250
Deborah Ann Smith                           2,205
Hudson D. Smith, Jr. (Cust)                 2,426
Hudson D. Smith, Jr. (TTEE)                15,000
Cynthia Rhea Smith (Cust)                   2,426
Cynthia Rhea Smith (TTEE)                  15,000
Christina Halle Smith (Cust)                2,426
Christina Halle Smith (TTEE)               15,000
- -------------------------------------------------

Subtotal Other Family                                      342,314          6.68%
- --------------------------------------------------------------------------------

Total Smith Family                                         941,950         18.37%
================================================================================
</TABLE>

                                       14

<PAGE>

<TABLE>
<CAPTION>
INDIVIDUAL                                 SHARES         SUBTOTAL        TOTAL %
- ----------                                 ------         --------        -------
<S>                                       <C>             <C>             <C>
Phyllis S. Gotschall (TTEE)               433,719
George D. Gotschall (TTEE)                137,588
FRW Trust, PSG                            171,207

Subtotal Beneficial Holdings                               742,514         14.48%
- --------------------------------------------------------------------------------

Jeffrey P. Gotshall                        87,755
Janice G. Carlson                          59,099
Laura G. Gifford                           51,844
Dianne Gotschall                              400
Chiistie L. Fulcher                         3,375
David E. Fulcher (Cust)                     2,633
Judith A. Gotschall                         3,375
Andrew C. Gotschall (Cust)                  3,375
Charles H. Gotschall (Cust)                 3,375
Robert V. Gifford Jr. (Cust)                9,450
Craig Ramsey                                  400
Alison Ramsey (Cust)                          400

Subtotal Other Family                                      225,481          4.40%
- --------------------------------------------------------------------------------

Total Gotshall Family                                      967,995         18.88%
================================================================================
</TABLE>

                                       15

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.9
<SEQUENCE>6
<FILENAME>l97786aexv10w9.txt
<DESCRIPTION>EXHIBIT 10.9
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.9

                             SIFCO INDUSTRIES, INC.
                      CHANGE IN CONTROL SEVERANCE AGREEMENT

THIS AGREEMENT is made between SIFCO Industries, Inc. (the "Company"), and
Timothy V. Crean (the "Executive"), dated as of the 30 day of July, 2002.

1. PURPOSE OF THIS AGREEMENT. The Board of Directors of the Company (the
"Board") has determined that it is in the best interests of the Company and its
shareholders to assure that the Company will have the continued dedication of
the Executive, notwithstanding the possibility, threat or occurrence of a Change
in Control (as defined in Section 2(c)) of the Company, and the uncertainties
and risks that a Change in Control would pose for the Executive. To this end,
the Board desires to encourage the Executive's full attention and dedication to
the Company, currently and in the event of any threatened or pending Change in
Control, and to provide the Executive with compensation and benefits
arrangements upon a Change in Control which ensure that the compensation and
benefits expectations of the Executive will be satisfied and which are
competitive with those of other similar corporations.

2. DEFINITIONS. Whenever used herein, the following terms shall have the
meanings set forth below:

a.)  "Beneficiary" means the person or entity designated by the Executive (on
Exhibit B hereto) to receive payment of any benefits hereunder that are or may
be payable after the Executive's death. The Executive may change his or her
designation of Beneficiary by filing a revised Exhibit B with the Company prior
to his or her death.

b.)  "Cause" means any of the following:

         (i)      the Executive's engagement in unlawful acts intended to
result in substantial personal enrichment to the Executive at the Company's
expense;

         (ii)     the Executive's engagement in a material breach of his or her
responsibilities to the Company that results in a material injury to the Company
other than any such breach resulting from the Executive's incapacity due to
illness or injury or in connection with an actual or anticipated termination of
employment with the Company by the Executive for Good Reason; or

         (iii)    an act or acts by the Executive which have been found in an
applicable court to constitute a felony.

c.)  "Change in Control" means any of the following events:

         (i)      The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of
either (A) the then-outstanding common shares of the Company other than those
held by the Voting Trust (the "Outstanding Company Common Shares") or (B) the
combined voting power of the then-outstanding voting securities of the Company
entitled to vote generally in the election of directors other than that
represented by shares held by the Voting Trust (the "Outstanding Company Voting
Securities"); but for purposes of this subsection (i), the following
acquisitions of voting securities shall not constitute a Change in Control: (A)
any acquisition directly from the Company, (B) any acquisition by the Company,
(C) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or (D)
any acquisition by any corporation pursuant to a transaction which complies with
clauses (A), (B) and (C) of subsection (iii) of this Section 2; or

         (ii)     Individuals who, as of the date of this Agreement, constitute
the Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; but any individual becoming a director subsequent to the
date hereof whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding from the
Incumbent Board, for this purpose, any such individual whose initial assumption
of office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or

                                       1

<PAGE>

         (iii)    Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of the
Company (a "Business Combination"), in each case, unless, following such
Business Combination, (A) the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Shares and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50%, respectively, of the
then-outstanding common shares and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the Company's
assets either directly or through one or more subsidiaries), (B) no Person
(excluding any corporation resulting from such Business Combination or any
employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 50% or more of, respectively, the then-outstanding common shares of
the corporation resulting from such Business Combination, or the combined voting
power of the then-outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business Combination, and
(C) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination; or

         (iv)     Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.

d)   "Code" means the Internal Revenue Code of 1986, as amended.

(e)  "Disability" means an illness or injury which, in the opinion of the Board,
renders the Executive unable or incompetent to perform the job responsibilities
which the Executive held or the job duties to which the Executive was assigned
at the time such illness or injury was incurred, on a full-time basis for at
least six (6) consecutive months.

(f)  "Good Reason" means the occurrence of only one or more of the following
events provided that the Executive specifically agrees in writing that such
event shall constitute Good Reason:

         (i)      there is a change in the Executive's status or position with
the Company that, in the Executive's reasonable judgment, represents an adverse
change from his or her status or position immediately before the Change in
Control, including a change in the principal place of the Executive's employment
that does not conform with the Company's present policies for executive
relocation, but excluding required travel to an extent substantially consistent
with the Executive's business travel obligations immediately before the Change
in Control;

         (ii)     the Executive is assigned any duties or responsibilities that,
in the Executive's reasonable judgment, are inconsistent with the Executive's
status or position immediately before the Change in Control;

         (iii)    the Executive is subject to a layoff by the Company or the
Executive's employment with the Company is involuntarily terminated other than
for Cause by the Company or due to the Executive's Disability, death or
retirement;

         (iv)     there is a reduction by the Company in the Executive's total
compensation as in effect at the time of the Change in Control (i.e., the
Executive's base salary plus the most recent award that the Executive earned
under the Company's Incentive Compensation Plan) or as the same may be increased
from time to time;

         (v)      the Company fails to continue in effect any compensation plan,
employee benefit plan, or other plan, program or policy of the Company that is
intended to materially benefit the Company's employees (each a "Plan"), in which
the Executive was participating at the time of the Change in Control, other than
as a result of the normal expiration of such Plan in accordance with its terms
in effect at the time of the Change in Control; or

         (vi)     the Company takes any action or fails to take any action that
would:

                     (A)   adversely affect the Executive's continued
participation in any Plan on at least as favorable a basis as was the case at
the time of the Change in Control;

                     (B)   materially reduce the Executive's benefits in the
future under any Plan; or

                     (C)   deprive the Executive of any material benefits that
the Executive enjoyed at the time of the Change in Control; except to the extent
that such action or inaction by the Company is required by the terms of the Plan
as in effect immediately before the Change in Control or is necessary to comply
with the applicable law, and except to the extent that the Company provides the
Executive with substantially equivalent benefits;

                                       2

<PAGE>

         (vii)    there is a material violation by the Company of any agreement
with the Executive; or

         (viii)   without the Executive's consent, the Company fails to pay the
Executive any portion of his or her current or deferred compensation within
thirty (30) days after the Executive provides written notification to the
Company that payment is past due.

(g)  A "Qualifying Termination" is deemed to have occurred for purposes of this
Agreement if there is a Change in Control and, within two (2) years after the
Change in Control, the Executive's employment with the Company is either
involuntarily terminated by the Company without Cause or the Executive
terminates employment with the Company for Good Reason

(h)  "Voting Trust" means that certain voting trust entered into by agreement
dated as of February 1, 1997, as amended on February 1, 2002, into which Common
Shares of the Company have been deposited and with respect to which, as of the
date hereof, Janice Carlson and Charles H. Smith, III are trustees.

3.   NOTICE OF CHANGE IN CONTROL.

The Company shall provide the Executive with written notice of the occurrence of
a Change in Control in accordance with Section 13(b) of this Agreement within
two (2) weeks after such Change in Control.

4.   NOTICE OF TERMINATION.

(a)  Any termination by the Company for Cause, or by the Executive for Good
Reason, shall be communicated by Notice of Termination to the other party hereto
given in accordance with Section 13(b) of this Agreement. For purposes of this
Agreement, a "Notice of Termination" means a written notice which (i) indicates
the specific termination provision in this Agreement relied upon, (ii) to the
extent applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated, and (iii) if the Date of Termination (as defined
below) is other than the date of receipt of such notice, specifies the
termination date (which date shall be not more than thirty (30) days after the
giving of such notice). The failure by the Executive or the Company to set forth
in the Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of the Executive or
the Company, respectively, hereunder or preclude the Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing the
Executive's or the Company's rights hereunder.

(b)  For purposes of this Agreement, "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date (within thirty (30) days after that date) specified therein, as
the case may be, (ii) if the Executive's employment is terminated by the
Company, other than for Cause or Disability, the Date of Termination shall be
the date on which the Company notifies the Executive of such termination and
(iii) if the Executive's employment is terminated by reason of death or
Disability, the Date of Termination shall be the date of death of the Executive
or the disability effective date, as the case may be.

5.   BENEFITS UPON TERMINATION OF EMPLOYMENT FOLLOWING CHANGE IN CONTROL. In the
event of a Qualifying Termination, the Executive shall receive the benefits
described in Exhibit A attached hereto.

6.   DEATH. Notwithstanding any provision of this Agreement to the contrary, if
the Executive's employment is terminated by reason of the Executive's death,
this Agreement shall terminate without further obligations to the Executive's
legal representatives under this Agreement.

7.   DISABILITY. Notwithstanding any provision of this Agreement to the
contrary, if the Executive's employment is terminated by reason of the
Executive's Disability, this Agreement shall terminate without further
obligations to the Executive.

8.   RETIREMENT. Notwithstanding any provision of this Agreement to the
contrary, if the Executive's employment is terminated by reason of the
Executive's retirement from the Company at or after age 65, this Agreement shall
terminate without further obligations to the Executive.

9.   CAUSE; OTHER THAN FOR GOOD REASON. Notwithstanding any provision of this
Agreement to the contrary, if the Executive's employment shall be terminated by
the Company for Cause or if the Executive's employment with the Company is
terminated by the Executive for other than Good Reason, this Agreement shall
terminate without further obligations to the Executive.

                                       3

<PAGE>

10.  OTHER EMPLOYMENT; LEGAL REPRESENTATION. Any severance benefits described in
Exhibit A hereto to which the Executive is entitled will not be reduced by any
remuneration the Executive may receive from employment with another employer
following a Qualifying Termination. In no event shall the Executive be obligated
to seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement,
and such amounts shall not be reduced whether or not the Executive obtains other
employment. The Company agrees to pay as incurred, to the full extent permitted
by law, all legal fees and expenses which the Executive may reasonably incur as
a result of any contest by the Company, the Executive or others of the validity
or enforceability of, or liability under, any provision of this Agreement.

11.  NO TAX GROSS-UP PAYMENT. Notwithstanding anything to the contrary in this
Agreement, if any portion of the compensation under the Agreement, or under any
other agreement with or plan of the Company (in the aggregate "Total Payments"),
would constitute an "excess parachute payment" under Section 280G of the
Internal Revenue Code (the "Code"), then the payments to be made to the
Executive under the Agreement shall be subject to the tax imposed by Section
4999 of the Code or any successor provision thereto unless the Company elects to
reduce the payments to be made to the Executive under the Agreement because such
reduction will provide a more favorable after-tax result for the Executive with
respect to the excise taxes described in this Section. The calculation of such
potential excise tax liability, as well as the method in which any compensation
reduction is applied, shall be conducted and determined by the Company's
independent accountants, whose determinations shall be binding on all parties.

12.  SUCCESSORS.

(a)  This Agreement is personal to the Executive and shall not be assignable by
the Executive otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.

(b)  This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.

(c ) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in this
Agreement, "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.

13.  MISCELLANEOUS.

(a)  This Agreement shall be governed by and construed in accordance with the
laws of the State of Ohio without reference to principles of conflict of laws.
The captions of this Agreement are not part of the provisions hereof and shall
have no force or effect. This Agreement may not be amended or modified otherwise
than by a written agreement executed by the parties hereto or their respective
successors and legal representatives.

(b)  All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:

              IF TO THE EXECUTIVE:       Timothy V. Crean
                                         Cushineal, Ballymal,
                                         Waterfall,
                                         Cork, Ireland

              IF TO THE COMPANY:         SIFCO INDUSTRIES, INC.
                                         970 East 64th Street
                                         Cleveland, Ohio 44103
                                         Attention: Jeff Gotschall

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communication shall be effective when
actually received by the addressee.

                                       4

<PAGE>

(c ) The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement.

(d)  The Company may withhold from any amounts payable under this Agreement such
federal, state, local and/or foreign taxes as shall be required to be withheld
pursuant to any applicable law or regulation.

(e)  The Executive's or the Company's failure to insist upon strict compliance
with any provision of this Agreement or the failure to assert any right the
Executive or the Company may have hereunder, including, without limitation, the
right of the Executive to terminate employment for Good Reason pursuant to
Section 2(f) of this Agreement, shall not be deemed to be a waiver of such
provision or right or any other provision or right of this Agreement.

IN WITNESS WHEREOF, the undersigned have executed this Agreement effective as of
the date first written above.

SIFCO INDUSTRIES, INC.                        EXECUTIVE

By:  /s/ Jeffrey P. Gotschall                 /s/ Timothy V. Crean
     ------------------------                 --------------------
                                              Signature

Title:  Chairman of the Board and             Timothy V. Crean
        Chief Executive Officer               ----------------
        -----------------------               Printed Name

                                       5

<PAGE>

                                    EXHIBIT A

                                       TO

                      CHANGE IN CONTROL SEVERANCE AGREEMENT

                                    BENEFITS

(a)  Severance. In the event the Executive becomes eligible for benefits under
Section 5 of the Agreement, the Company shall pay to the Executive or the
Executive's Beneficiary in a lump sum in cash within thirty (30) days after the
Executive's Date of Termination an amount equal to:

         (i)      $400,000 Dollars;

         (ii)     the excess of (A) the actuarial equivalent of the benefit
under any qualified defined benefit pension plan the Company may have (the
"Retirement Plan"), and any supplemental retirement plan in which the Executive
participates which the Executive would receive if the Executive's employment
continued for two (2) years after the Date of Termination assuming for this
purpose that all accrued benefits are fully vested, over (B) the actuarial
equivalent of the Executive's actual benefit paid or payable, if any, under the
Retirement Plan and the supplemental retirement plan as of the Date of
Termination.

(b). Welfare Benefits. In the event the Executive becomes eligible for benefits
under Section 5 of the Agreement, for twenty-four (24 ) months after the
Executive's Date of Termination, or such longer period as may be provided by the
terms of the applicable welfare benefit plan, program, practice or policy, the
Company shall continue benefits to the Executive and/or the Executive's family
at least equal to those which would have been provided to them in accordance
with the Company's welfare benefit plans, programs, practices and policies if
the Executive's employment had not been terminated or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and its affiliated companies and their families;
provided, however, that if the Executive becomes reemployed with another
employer and is eligible to receive welfare benefits under another
employer-provided plan, the Company shall discontinue such benefits as of such
eligibility date. In lieu of providing such benefits, the Company may elect, in
its sole discretion, without the consent of the Executive, to pay in a single
sum to the Executive an amount equal to the cash equivalent present value of the
premiums to purchase such continued insurance coverage within thirty (30) days
after the Executive's Date of Termination.

(c)  Enhanced Rights Regarding Stock Awards. All long-term stock incentive
awards held by the Executive (whether in the form of options, phantom units,
performance shares, restricted shares or other awards of whatever nature), shall
fully vest and all restrictions and conditions shall be removed on the Date of
Termination.

(d)  Retirement Benefits. All Retirement Plan, Thrift Plan and supplemental
retirement plan benefits of the Executive shall fully vest if they are not
otherwise fully vested on the Date of Termination

                                       6

<PAGE>

                                    EXHIBIT B

                                       TO

                      CHANGE IN CONTROL SEVERANCE AGREEMENT

                           DESIGNATION OF BENEFICIARY

         Executive hereby designates the following individual to receive payment
of any benefits under this Agreement that may be due or payable after the
Executive's death:

         Therese M. Crean
         ----------------
         Name of Beneficiary

         Wife
         ----
         Relationship to Executive

         /s/ Timothy V. Crean
         --------------------
         Signature of Executive

         August 2, 2002
         --------------
         Date

                                       7

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.10
<SEQUENCE>7
<FILENAME>l97786aexv10w10.txt
<DESCRIPTION>EXHIBIT 10.10
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.10

                             SIFCO INDUSTRIES, INC.

                      CHANGE IN CONTROL SEVERANCE AGREEMENT

THIS AGREEMENT is made between SIFCO Industries, Inc. (the "Company"), and
Jeffrey P. Gotschall (the "Executive"), dated as of the 30 day of July, 2002.

1.   PURPOSE OF THIS AGREEMENT. The Board of Directors of the Company (the
"Board") has determined that it is in the best interests of the Company and its
shareholders to assure that the Company will have the continued dedication of
the Executive, notwithstanding the possibility, threat or occurrence of a Change
in Control (as defined in Section 2(c)) of the Company, and the uncertainties
and risks that a Change in Control would pose for the Executive. To this end,
the Board desires to encourage the Executive's full attention and dedication to
the Company, currently and in the event of any threatened or pending Change in
Control, and to provide the Executive with compensation and benefits
arrangements upon a Change in Control which ensure that the compensation and
benefits expectations of the Executive will be satisfied and which are
competitive with those of other similar corporations.

2.   DEFINITIONS. Whenever used herein, the following terms shall have the
meanings set forth below:

(a)  "Beneficiary" means the person or entity designated by the Executive (on
Exhibit B hereto) to receive payment of any benefits hereunder that are or may
be payable after the Executive's death. The Executive may change his or her
designation of Beneficiary by filing a revised Exhibit B with the Company prior
to his or her death.

(b)  "Cause" means any of the following:

         (i)      the Executive's engagement in unlawful acts intended to result
in substantial personal enrichment to the Executive at the Company's expense;

         (ii)     the Executive's engagement in a material breach of his or her
responsibilities to the Company that results in a material injury to the Company
other than any such breach resulting from the Executive's incapacity due to
illness or injury or in connection with an actual or anticipated termination of
employment with the Company by the Executive for Good Reason; or

         (iii)    an act or acts by the Executive which have been found in an
applicable court to constitute a felony.

(c)  "Change in Control" means any of the following events:

         (i)      The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of
either (A) the then-outstanding common shares of the Company other than those
held by the Voting Trust (the "Outstanding Company Common Shares") or (B) the
combined voting power of the then-outstanding voting securities of the Company
entitled to vote generally in the election of directors other than that
represented by shares held by the Voting Trust (the "Outstanding Company Voting
Securities"); but for purposes of this subsection (i), the following
acquisitions of voting securities shall not constitute a Change in Control: (A)
any acquisition directly from the Company, (B) any acquisition by the Company,
(C) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or (D)
any acquisition by any corporation pursuant to a transaction which complies with
clauses (A), (B) and (C) of subsection (iii) of this Section 2; or

         (ii)     Individuals who, as of the date of this Agreement, constitute
the Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; but any individual becoming a director subsequent to the
date hereof whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding from the
Incumbent Board, for this purpose, any such individual whose initial assumption
of office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or

                                       1

<PAGE>

         (iii)    Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of the
Company (a "Business Combination"), in each case, unless, following such
Business Combination, (A) the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Shares and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50%, respectively, of the
then-outstanding common shares and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the Company's
assets either directly or through one or more subsidiaries), (B) no Person
(excluding any corporation resulting from such Business Combination or any
employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 50% or more of, respectively, the then-outstanding common shares of
the corporation resulting from such Business Combination, or the combined voting
power of the then-outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business Combination, and
(C) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination; or

         (iv)     Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.

(d)  "Code" means the Internal Revenue Code of 1986, as amended.

(e)  "Disability" means an illness or injury which, in the opinion of the Board,
renders the Executive unable or incompetent to perform the job responsibilities
which the Executive held or the job duties to which the Executive was assigned
at the time such illness or injury was incurred, on a full-time basis for at
least six (6) consecutive months.

(f)  "Good Reason" means the occurrence of only one or more of the following
events provided that the Executive specifically agrees in writing that such
event shall constitute Good Reason:

         (i)      there is a change in the Executive's status or position with
the Company that, in the Executive's reasonable judgment, represents an adverse
change from his or her status or position immediately before the Change in
Control, including a change in the principal place of the Executive's employment
that does not conform with the Company's present policies for executive
relocation, but excluding required travel to an extent substantially consistent
with the Executive's business travel obligations immediately before the Change
in Control;

         (ii)     the Executive is assigned any duties or responsibilities that,
in the Executive's reasonable judgment, are inconsistent with the Executive's
status or position immediately before the Change in Control;

         (iii)    the Executive is subject to a layoff by the Company or the
Executive's employment with the Company is involuntarily terminated other than
for Cause by the Company or due to the Executive's Disability, death or
retirement;

         (iv)     there is a reduction by the Company in the Executive's total
compensation as in effect at the time of the Change in Control (i.e., the
Executive's base salary plus the most recent award that the Executive earned
under the Company's Incentive Compensation Plan) or as the same may be increased
from time to time;

         (v)      the Company fails to continue in effect any compensation plan,
employee benefit plan, or other plan, program or policy of the Company that is
intended to materially benefit the Company's employees (each a "Plan"), in which
the Executive was participating at the time of the Change in Control, other than
as a result of the normal expiration of such Plan in accordance with its terms
in effect at the time of the Change in Control; or

         (vi)     the Company takes any action or fails to take any action that
would:

                     (A)   adversely affect the Executive's continued
participation in any Plan on at least as favorable a basis as was the case at
the time of the Change in Control;

                     (B)   materially reduce the Executive's benefits in the
future under any Plan; or

                     (C)   deprive the Executive of any material benefits that
the Executive enjoyed at the time of the Change in Control; except to the extent
that such action or inaction by the Company is required by the terms of the Plan
as in effect immediately before the Change in Control or is necessary to comply
with the applicable law, and except to the extent that the Company provides the
Executive with substantially equivalent benefits;

                                       2

<PAGE>

         (vii)    there is a material violation by the Company of any agreement
with the Executive; or

         (viii)   without the Executive's consent, the Company fails to pay the
Executive any portion of his or her current or deferred compensation within
thirty (30) days after the Executive provides written notification to the
Company that payment is past due.

(g)  A "Qualifying Termination" is deemed to have occurred for purposes of this
Agreement if there is a Change in Control and, within two (2) years after the
Change in Control, the Executive's employment with the Company is either
involuntarily terminated by the Company without Cause or the Executive
terminates employment with the Company for Good Reason

(h)  "Voting Trust" means that certain voting trust entered into by agreement
dated as of February 1, 1997, as amended on February 1, 2002, into which Common
Shares of the Company have been deposited and with respect to which, as of the
date hereof, Janice Carlson and Charles H. Smith, III are trustees.

3.   NOTICE OF CHANGE IN CONTROL. The Company shall provide the Executive with
written notice of the occurrence of a Change in Control in accordance with
Section 13(b) of this Agreement within two (2) weeks after such Change in
Control.

4.   NOTICE OF TERMINATION. (a)  Any termination by the Company for Cause, or by
the Executive for Good reason, shall be communicated by Notice of Termination to
the other party hereto given in accordance with Section 13(b) of this Agreement.
For purposes of this Agreement, a "Notice of Termination" means a written notice
which (i) indicates the specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated, and (iii) if the Date of
Termination (as defined below) is other than the date of receipt of such notice,
specifies the termination date (which date shall be not more than thirty (30)
days after the giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.

(b)  For purposes of this Agreement, "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date (within thirty (30) days after that date) specified therein, as
the case may be, (ii) if the Executive's employment is terminated by the
Company, other than for Cause or Disability, the Date of Termination shall be
the date on which the Company notifies the Executive of such termination and
(iii) if the Executive's employment is terminated by reason of death or
Disability, the Date of Termination shall be the date of death of the Executive
or the disability effective date, as the case may be.

5.   BENEFITS UPON TERMINATION OF EMPLOYMENT FOLLOWING CHANGE IN CONTROL. In the
event of a Qualifying Termination, the Executive shall receive the benefits
described in Exhibit A attached hereto.

6.   DEATH. Notwithstanding any provision of this Agreement to the contrary, if
the Executive's employment is terminated by reason of the Executive's death,
this Agreement shall terminate without further obligations to the Executive's
legal representatives under this Agreement.

7.   DISABILITY. Notwithstanding any provision of this Agreement to the
contrary, if the Executive's employment is terminated by reason of the
Executive's Disability, this Agreement shall terminate without further
obligations to the Executive.

8.   RETIREMENT. Notwithstanding any provision of this Agreement to the
contrary, if the Executive's employment is terminated by reason of the
Executive's retirement from the Company at or after age 65, this Agreement shall
terminate without further obligations to the Executive.

9.   CAUSE; OTHER THAN FOR GOOD REASON. Notwithstanding any provision of this
Agreement to the contrary, if the Executive's employment shall be terminated by
the Company for Cause or if the Executive's employment with the Company is
terminated by the Executive for other than Good Reason, this Agreement shall
terminate without further obligations to the Executive.

10. OTHER EMPLOYMENT; LEGAL REPRESENTATION. Any severance benefits described in
Exhibit A hereto to which the Executive is entitled will not be reduced by any
remuneration the Executive may receive from employment with another employer
following a Qualifying Termination. In no event shall the Executive be obligated
to seek other

                                       3

<PAGE>

employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement, and such amounts
shall not be reduced whether or not the Executive obtains other employment. The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as a result of
any contest by the Company, the Executive or others of the validity or
enforceability of, or liability under, any provision of this Agreement.

11.  NO TAX GROSS-UP PAYMENT. Notwithstanding anything to the contrary in this
Agreement, if any portion of the compensation under the Agreement, or under any
other agreement with or plan of the Company (in the aggregate "Total Payments"),
would constitute an "excess parachute payment" under Section 280G of the
Internal Revenue Code (the "Code"), then the payments to be made to the
Executive under the Agreement shall be subject to the tax imposed by Section
4999 of the Code or any successor provision thereto unless the Company elects to
reduce the payments to be made to the Executive under the Agreement because such
reduction will provide a more favorable after-tax result for the Executive with
respect to the excise taxes described in this Section. The calculation of such
potential excise tax liability, as well as the method in which any compensation
reduction is applied, shall be conducted and determined by the Company's
independent accountants, whose determinations shall be binding on all parties.

12.  SUCCESSORS.

(a)  This Agreement is personal to the Executive and shall not be assignable by
the Executive otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.

(b)  This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.

(c ) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in this
Agreement, "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.

13.  MISCELLANEOUS.

(a)  This Agreement shall be governed by and construed in accordance with the
laws of the State of Ohio without reference to principles of conflict of laws.
The captions of this Agreement are not part of the provisions hereof and shall
have no force or effect. This Agreement may not be amended or modified otherwise
than by a written agreement executed by the parties hereto or their respective
successors and legal representatives.

(b)  All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:

              IF TO THE EXECUTIVE:       Jeffrey P. Gotschall
                                         25 Pine River Rd.
                                         Bentleyville, OH 44022

              IF TO THE COMPANY:         SIFCO INDUSTRIES, INC.
                                         970 East 64th Street
                                         Cleveland, Ohio 44103

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communication shall be effective when
actually received by the addressee.

(c)  The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement.

(d)  The Company may withhold from any amounts payable under this Agreement such
federal, state, local and/or foreign taxes as shall be required to be withheld
pursuant to any applicable law or regulation.

                                       4

<PAGE>

(e)  The Executive's or the Company's failure to insist upon strict compliance
with any provision of this Agreement or the failure to assert any right the
Executive or the Company may have hereunder, including, without limitation, the
right of the Executive to terminate employment for Good Reason pursuant to
Section 2(f) of this Agreement, shall not be deemed to be a waiver of such
provision or right or any other provision or right of this Agreement.

IN WITNESS WHEREOF, the undersigned have executed this Agreement effective as of
the date first written above.

SIFCO INDUSTRIES, INC.                        EXECUTIVE

By: /s/ Frank Cappello                        /s/ Jeffrey P. Gotschall
    ------------------                        ------------------------
                                              Signature

Title:  Vice.President - Finance and          Jeffrey P. Gotschall
        Chief Financial Officer               --------------------
        -----------------------               Printed Name

                                       5

<PAGE>

                                    EXHIBIT A

                                       TO

                      CHANGE IN CONTROL SEVERANCE AGREEMENT

                                    BENEFITS

(a)  Severance. In the event the Executive becomes eligible for benefits under
Section 5 of the Agreement, the Company shall pay to the Executive or the
Executive's Beneficiary in a lump sum in cash within thirty (30) days after the
Executive's Date of Termination an amount equal to:

         (i)      $500,000 Dollars;

         (ii)     the excess of (A) the actuarial equivalent of the benefit
under any qualified defined benefit pension plan the Company may have (the
"Retirement Plan"), and any supplemental retirement plan in which the Executive
participates (the "SERP") which the Executive would receive if the Executive's
employment continued for two (2) years after the Date of Termination assuming
for this purpose that all accrued benefits are fully vested, over (B) the
actuarial equivalent of the Executive's actual benefit paid or payable, if any,
under the Retirement Plan and the SERP as of the Date of Termination.

(b)  Welfare Benefits. In the event the Executive becomes eligible for benefits
under Section 5 of the Agreement, for twenty-four ( 24 ) months after the
Executive's Date of Termination, or such longer period as may be provided by the
terms of the applicable welfare benefit plan, program, practice or policy, the
Company shall continue benefits to the Executive and/or the Executive's family
at least equal to those which would have been provided to them in accordance
with the Company's welfare benefit plans, programs, practices and policies if
the Executive's employment had not been terminated or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and its affiliated companies and their families;
provided, however, that if the Executive becomes reemployed with another
employer and is eligible to receive welfare benefits under another
employer-provided plan, the Company shall discontinue such benefits as of such
eligibility date. In lieu of providing such benefits, the Company may elect, in
its sole discretion, without the consent of the Executive, to pay in a single
sum to the Executive an amount equal to the cash equivalent present value of the
premiums to purchase such continued insurance coverage within thirty (30) days
after the Executive's Date of Termination.

(c)  Enhanced Rights Regarding Stock Awards. All long-term stock incentive
awards held by the Executive (whether in the form of options, phantom units,
performance shares, restricted shares or other awards of whatever nature), shall
fully vest and all restrictions and conditions shall be removed on the Date of
Termination.

(d)  Retirement Benefits. All Retirement Plan, Thrift Plan and SERP benefits of
the Executive shall fully vest if they are not otherwise fully vested on the
Date of Termination.

                                       6

<PAGE>

                                    EXHIBIT B

                                       TO

                      CHANGE IN CONTROL SEVERANCE AGREEMENT

                           DESIGNATION OF BENEFICIARY

         Executive hereby designates the following individual to receive payment
of any benefits under this Agreement that may be due or payable after the
Executive's death:

         Dianne Gotschall
         ----------------
         Name of Beneficiary

         Wife
         ----
         Relationship to Executive

         /s/ Jeffrey P. Gotschall
         ------------------------
         Signature of Executive

         August 3, 2002
         --------------
         Date

                                       7

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.11
<SEQUENCE>8
<FILENAME>l97786aexv10w11.txt
<DESCRIPTION>EXHIBIT 10.11
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.11

                           RESTRICTED STOCK AGREEMENT

         This Agreement is made as of the 1st day of January, 2002, between
SIFCO INDUSTRIES, INC. (the "Company") and _________________________
("Employee").

         1.       Grant.

                  (a)      Shares. Pursuant to the Company's Key Employee Share
Ownership Program, the Employee has been granted the right to receive _________
________________________ of the Company's common shares, subject to the
restrictions set forth in this Agreement (the "Shares"). Title to the Shares
will vest in the Employee in the number and as of the dates set forth below:

                           Date                   Number of Shares

                  (b)      Issuance of and Dividends on Shares. Certificates for
the Shares will be issued as soon as practicable after title to the Shares vests
with the Employee. The Shares will be legended certificates, subject to the
limitations set forth in paragraph 3 below. Prior to vesting of the Shares, the
Employee will not be entitled to dividends or voting rights with respect to such
Shares.

         2.       Forfeiture. In the event of the termination of the Employee's
employment with the Company or its subsidiaries for any reason, the Employee
shall forfeit the right to receive all Shares that have not yet vested under the
program as of the date of the termination.

         3.       Securities Laws. The issuance of all Shares provided for
herein have not been registered under the Securities Act of 1933. The Employee
understands that the Shares are "restricted securities" as defined in Rule 144
of the Act and that any resale, transfer or other disposition of the Shares will
be accomplished only in compliance with Rule 144 of the Act or other applicable
rules and regulations thereunder. The Company will place on the certificates
evidencing the Shares an appropriate legend reflecting the foregoing and may
refuse to permit transfer of such certificates until it has been furnished with
satisfactory evidence of no violation of the Act or the rules and regulations
thereunder.

         4.       Assignment. This grant may not be assigned, transferred,
pledged or hypothecated and shall not be assignable by operation of law.

         IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed and the Employee has executed this Agreement all as of the date first
written above.

                                         SIFCO INDUSTRIES, INC.

                                         By ____________________________________

                                         _______________________________________
                                         EMPLOYEE

                                       1

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21.1
<SEQUENCE>9
<FILENAME>l97786aexv21w1.txt
<DESCRIPTION>EXHIBIT 21.1
<TEXT>
<PAGE>

                                                                    EXHIBIT 21.1

                             SIFCO INDUSTRIES, INC.
                           SUBSIDIARIES OF THE COMPANY
                               SEPTEMBER 30, 2002

<TABLE>
<CAPTION>
                                                   State of Jurisdiction
            Subsidiary                               of Incorporation
            ----------                               ----------------
<S>                                                <C>
SIFCO Custom Machining Company                            Minnesota
SIFCO Exports, Limited                                    Ireland
SIFCO Holdings, Inc.                                      Delaware
SIFCO Irish Holdings, Limited                             Ireland
SIFCO Research and Development, Limited                   Ireland
SIFCO Selective Plating France, SARL                      France
SIFCO Selective Plating (UK), Limited                     United Kingdom
SIFCO Turbine Components Limited                          Ireland
</TABLE>

                                       1

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>10
<FILENAME>l97786aexv23w1.txt
<DESCRIPTION>EXHIBIT 23.1
<TEXT>
<PAGE>

                                                                    EXHIBIT 23.1

                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation of our
reports dated October 29, 2002, (except for the last paragraph of Note 5, as to
which the date is November 26, 2002), included and incorporated by reference in
this Form 10-K, into the Company's previously filed Registration Statements,
File Nos. 2-82001 and 33-32826.

/s/ GRANT THORNTON LLP

Cleveland, Ohio
December 13, 2002

                                       1

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>11
<FILENAME>l97786aexv99w1.txt
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
<PAGE>

                                                                    EXHIBIT 99.1

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of SIFCO Industries, Inc. ("Company") on
Form 10-K for the year ended September 30, 2002 as filed with the Securities and
Exchange Commission on the date hereof ("Report"), I, Jeffrey P. Gotschall,
Chairman and Chief Executive Officer of the Company, certify pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:

     (1)  The Report fully complies with the requirements of Section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     (2)  The information contained in the Report fairly presents, in all
          material respects, the financial condition and results of operations
          of the Company.

                                         /s/ Jeffrey P. Gotschall
                                         ------------------------
                                         Jeffrey P. Gotschall
                                         Chairman of the Board and
                                         Chief Executive Officer
                                         December 13, 2002

                                       1

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>12
<FILENAME>l97786aexv99w2.txt
<DESCRIPTION>EXHIBIT 99.2
<TEXT>
<PAGE>

                                                                    EXHIBIT 99.2

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of SIFCO Industries, Inc. ("Company") on
Form 10-K for the year ended September 30, 2002 as filed with the Securities and
Exchange Commission on the date hereof ("Report"), I, Frank A. Cappello, Vice
President - Finance and Chief Financial Officer of the Company, certify pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

     (3)  The Report fully complies with the requirements of Section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     (4)  The information contained in the Report fairly presents, in all
          material respects, the financial condition and results of operations
          of the Company.

                                         /s/ Frank A. Cappello
                                         ---------------------
                                         Frank A. Cappello
                                         Vice President - Finance and
                                         Chief Financial Officer
                                         December 13, 2002

                                        1

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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