<PAGE>   1
                                    FORM 10-Q

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




                  For the quarterly period ended: June 30, 2001
                                                  -------------

                         Commission File Number: 1-5978
                                                 ------

                     SIFCO Industries, Inc. and Subsidiaries
             (Exact name of registrant as specified in its charter)


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

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

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


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


As of July 31, 2001, the issuer had 5,137,033 shares of common stock
outstanding.


<PAGE>   2



                         PART I - FINANCIAL INFORMATION

ITEM 1.           FINANCIAL STATEMENTS

                     SIFCO INDUSTRIES, INC. AND SUBSIDIARIES
                   CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                                   (Unaudited)
                  (Amounts in thousands, except per share data)
<TABLE>
<CAPTION>


                                                                          Three Months                 Nine Months
                                                                              Ended                       Ended
                                                                             June 30                     June 30
                                                                   ------------------------    ------------------------

                                                                       2001          2000          2001          2000
                                                                       ----          ----          ----          ----

<S>                                                                <C>           <C>           <C>           <C>
Net sales                                                          $   27,676    $   26,097    $   80,587    $   79,624
Operating expenses:
    Cost of goods sold                                                 22,170        22,656        66,097        67,596
    Selling, general and administrative expenses                        3,578         3,147         9,927         9,711
                                                                   ----------    ----------    ----------    ----------
         Total operating expenses                                      25,748        25,803        76,024        77,307
                                                                   ----------    ----------    ----------    ----------

         Operating income                                               1,928           294         4,563         2,317

Interest income                                                          (181)          (31)         (358)         (118)
Interest expense                                                          343           274           895           775
Other (income) expense, net                                              (447)            6          (486)           94
                                                                   ----------    ----------    ----------    ----------
         Income before income tax provision                             2,213            45         4,512         1,566
Income tax provision                                                      704          --           1,706           103
                                                                   ----------    ----------    ----------    ----------

         Net income                                                $    1,509    $       45    $    2,806    $    1,463
                                                                   ==========    ==========    ==========    ==========


Net income per share (basic)                                       $      .29    $      .01    $      .55    $      .28
Net income per share (diluted)                                     $      .29    $      .01    $      .54    $      .28

Weighted-average number of common shares (basic)                        5,137         5,144         5,136         5,172
Weighted-average number of common shares (diluted)                      5,164         5,164         5,156         5,203

</TABLE>

See accompanying notes to unaudited consolidated condensed financial statements.



<PAGE>   3



                     SIFCO INDUSTRIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                  (Amounts in thousands, except per share data)
<TABLE>
<CAPTION>

                                                                                       June 30            September 30
                                                                                        2001                  2000
                                                                                  ------------------     ------------------
                                                                                     (Unaudited)

                                                       ASSETS

<S>                                                                               <C>                      <C>
CURRENT ASSETS:
       Cash and cash equivalents                                                  $   12,435               $    4,687
       Receivables, net                                                               19,162                   19,743
       Inventories                                                                    20,346                   19,878
       Deferred income taxes                                                           1,486                    1,486
       Prepaid expenses and other current assets                                         809                      656
                                                                                  ----------               ----------
                  Total current assets                                                54,238                   46,450

PROPERTY, PLANT AND EQUIPMENT, NET                                                    28,052                   29,009

OTHER ASSETS:
       Funds held by trustee for capital project                                         303                      530
       Goodwill and other intangible assets, net                                       3,639                    3,866
       Other assets                                                                      741                      645
                                                                                  ----------               ----------
                  Total other assets                                                   4,683                    5,041
                                                                                  ----------               ----------

                           Total assets                                           $   86,973               $   80,500
                                                                                  ==========               ==========

                                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
       Current maturities of long-term debt                                       $    1,430               $    1,420
       Accounts payable                                                                6,924                    6,723
       Accrued liabilities                                                             9,998                    9,631
                                                                                  ----------               ----------
                  Total current liabilities                                           18,352                   17,774

LONG-TERM DEBT--NET OF CURRENT MATURITIES                                             16,744                   11,962

OTHER LONG-TERM LIABILITIES                                                            4,790                    5,264

SHAREHOLDERS' EQUITY:
       Serial preferred shares-no par value                                             --                       --
       Common shares, par value $1 per share                                           5,208                    5,205
       Additional paid-in-capital                                                      6,423                    6,413
       Accumulated other comprehensive loss                                           (9,542)                  (8,310)
       Retained earnings                                                              45,447                   42,641
       Common shares held in treasury at cost                                           (449)                    (449)
                                                                                  ----------               ----------
                  Total shareholders' equity                                          47,087                   45,500
                                                                                  ----------               ----------

                           Total liabilities and shareholders' equity             $   86,973               $   80,500
                                                                                  ==========               ==========
</TABLE>


See accompanying notes to unaudited consolidated condensed financial statements.


<PAGE>   4



                     SIFCO INDUSTRIES, INC. AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                             (Amounts in thousands)
<TABLE>
<CAPTION>

                                                                                         Nine Months Ended
                                                                                               June 30
                                                                                    --------------------------
                                                                                        2001            2000
                                                                                        ----            ----
<S>                                                                               <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                                                    $    2,806      $    1,463
    Adjustments to reconcile net income to net cash
        provided by operating activities:
           Depreciation and amortization                                               3,360           3,691
           Loss on disposal of property and equipment                                     34            --

           CHANGES IN OPERATING ASSETS AND LIABILITIES:
               Receivables                                                               443           2,293
               Inventories                                                              (636)            739
               Refundable income taxes                                                  --                94
               Prepaid expenses and other current assets                                (165)             (8)
               Other assets                                                             (101)            138
               Accounts payable                                                         (228)         (1,100)
               Accrued liabilities                                                       912            (290)
               Other long-term liabilities                                              (732)           (299)
                                                                                  ----------      ----------

                  Net cash provided by operating activities                            5,693           6,721

CASH FLOWS FROM INVESTING ACTIVITIES:
    Capital expenditures                                                              (2,557)         (3,276)
    Decrease in funds held by trustee for capital project                                228             154
    Other                                                                                (42)            (33)
                                                                                  ----------      ----------

                  Net cash used for investing activities                              (2,371)         (3,154)

CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from revolving credit facility                                           23,282           7,802
    Repayments of revolving credit facility                                          (17,370)         (6,970)
    Repayments of long-term debt                                                      (1,120)         (1,115)
    Repurchases of common shares                                                        --              (449)
    Cash dividends declared                                                             --              (517)
    Issuance of common shares                                                             13              73
                                                                                  ----------      ----------

                  Net cash provided by (used for) financing activities                 4,805          (1,176)

Increase in cash and cash equivalents                                                  8,127           2,390
Cash and cash equivalents at the beginning of the period                               4,687           2,022
Effect of exchange rate changes on cash and cash equivalents                            (379)           (200)
                                                                                  ----------      ----------

Cash and cash equivalents at the end of the period                                $   12,435      $    4,212
                                                                                  ==========      ==========

Supplemental disclosure of cash flow information:
    Cash paid for interest                                                               785             711
    Cash paid for income taxes, net                                                      384             605
</TABLE>

See accompanying notes to unaudited consolidated condensed financial statements.


<PAGE>   5



                     SIFCO INDUSTRIES, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                             (Amounts in thousands)
                                   (Unaudited)

1.       BASIS OF PRESENTATION

The unaudited consolidated condensed financial statements included herein
include the accounts of the Company and its wholly-owned subsidiaries. All
significant intercompany accounts and transactions have been eliminated. In the
opinion of management, all adjustments, which include only normal recurring
adjustments, necessary for a fair presentation of the results of operations,
financial position, and cash flows for the periods presented, have been
included. These consolidated condensed financial statements should be read in
conjunction with the consolidated financial statements and related notes
included in the SIFCO Industries, Inc. and Subsidiaries ("Company") fiscal 2000
annual report on Forms 10-K and 10-K/A. The results of operations for any
interim period are not necessarily indicative of the results to be expected for
other interim periods or the full year. Certain prior period amounts have been
reclassified in order to conform to current period classifications.


2.       INVENTORIES

Inventories consist of:

                                                  June 30        September 30
                                                   2001              2000
                                                ----------        ----------

         Raw material and supplies              $    6,277        $    4,427
         Work-in-process                             7,094             8,175
         Finished goods                              6,975             7,276
                                                ----------        ----------

               Total inventories                $   20,346        $   19,878
                                                ==========        ==========

If the FIFO method had been used for the entire Company, inventories would have
been $2,928 and $2,979 higher than reported at June 30, 2001 and September 30,
2000, respectively.


3.       LONG-TERM DEBT

Effective March 30, 2001, the Company extended the maturity of its existing $6.0
million revolving credit facility with National City Bank to March 31, 2003. On
June 1, 2001, the Company increased its revolving credit facility to $10.0
million.


4.       INCOME TAXES

During the nine months ended June 30, 2001, U.S. income taxes were provided on
the undistributed earnings of non-U.S. subsidiaries that were earned during
fiscal 2001, in anticipation that distributions from such earnings, to the
extent they may occur in the future, would result in an additional income tax
liability. The income tax provision on U.S. earnings is based on the anticipated
effective rate for the year.









<PAGE>   6



5.     COMPREHENSIVE INCOME (LOSS) AND ACCUMULATED OTHER COMPREHENSIVE LOSS

Total comprehensive income is as follows:
<TABLE>
<CAPTION>

                                                            Three Months Ended            Nine Months Ended
                                                                  June 30                      June 30
                                                         ------------------------    ------------------------
                                                             2001          2000         2001          2000
                                                             ----          ----         ----          ----

<S>                                                      <C>           <C>           <C>           <C>
Net income                                               $    1,509    $       45    $    2,806    $    1,463
Foreign currency translation adjustment                        (912)           85          (907)       (2,988)
Cumulative effect adjustment of interest rate
    swap agreement, net of tax                                 --            --             135          --
Loss on interest rate swap agreement                             24          --            (256)         --
Loss on foreign currency exchange contracts                    (118)         --            (204)         --
                                                         ----------    ----------    ----------    ----------

           Total comprehensive income (loss)             $      503    $      130    $    1,574    $   (1,525)
                                                         ==========    ==========    ==========    ==========
</TABLE>

The components of accumulated other comprehensive loss are as follows:
<TABLE>
<CAPTION>

                                                          June 30      September 30
                                                            2001            2000
                                                         ----------    ------------

<S>                                                      <C>           <C>
Foreign currency translation adjustment                  $   (9,217)   $   (8,310)
Interest rate swap adjustment                                  (121)         --
Foreign currency exchange contract adjustment                  (204)         --
                                                         ----------    ----------

           Total accumulated other comprehensive loss    $   (9,542)   $   (8,310)
                                                         ==========    ==========
</TABLE>


6.     BUSINESS SEGMENTS

Reportable segments are identified by the Company based upon distinct products
manufactured and services provided. The Turbine Component Services and Repair
segment consists primarily of turbine component remanufacturing, precision
contract machining, subassemblies, and finished parts, as well as, selective
electroplating equipment, solutions and services. The Aerospace Component
Manufacturing segment consists primarily of domestically produced forgings and
semi-finished components primarily for the aerospace industry.

Segment information is as follows:
<TABLE>
<CAPTION>

                                                            Three Months Ended          Nine Months Ended
                                                                 June 30                      June 30
                                                         ------------------------    ------------------------
                                                             2001         2000          2001          2000
                                                             ----         ----          ----          ----
<S>                                                      <C>           <C>           <C>           <C>
Net sales:
   Turbine Component Service and Repair                  $   16,134    $   16,476    $   49,746    $   53,562
   Aerospace Component Manufacturing                         11,542         9,621        30,841        26,062
                                                         ----------    ----------    ----------    ----------

       Consolidated net sales                            $   27,676    $   26,097    $   80,587    $   79,624
                                                         ==========    ==========    ==========    ==========

Operating income:
    Turbine Component Services and Repair                $    1,239    $      284    $    3,736    $    3,096
    Aerospace Component Manufacturing                         1,261           589         2,311           897
    Corporate unallocated expenses                             (572)         (579)       (1,484)       (1,676)
                                                         ----------    ----------    ----------    ----------

       Consolidated operating income                          1,928           294         4,563         2,317

Interest expense, net                                           162           243           537           657
Other (income) expense, net                                    (447)            6          (486)           94
                                                         ----------    ----------    ----------    ----------

       Consolidated income before income tax provision   $    2,213    $       45    $    4,512    $    1,566
                                                         ==========    ==========    ==========    ==========

</TABLE>


<PAGE>   7



ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS.

Management's Discussion and Analysis of Financial Condition and Results of
Operations may contain various forward-looking statements and includes
assumptions concerning the Company's operations, future results and prospects.
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 the following cautionary statement identifying important economic,
political and technological factors, among others, the absence 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 OEM encroachment into turbine
component services and repair markets; (3) successful procurement of new repair
process licenses; (4) the impact of fluctuations of foreign currency (euros)
exchange rates on the results of operations; (5) successful development and
market introductions of new products, including an advanced coating technology;
(6) stability of government laws and regulations, including taxes; and (7)
stable governments and business conditions in economies where business is
conducted.

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 include
forging, heat treating, coating, welding, machining and electroplating; and the
products include forgings, machined forged parts and other machined metal parts,
remanufactured component parts for turbine engines, and electroplating solutions
and equipment.


A.         RESULTS OF OPERATIONS

NINE MONTHS ENDED JUNE 30, 2001 COMPARED WITH NINE MONTHS ENDED JUNE 30, 2000

Net sales in the first nine months of fiscal 2001 increased 1.2% to $80.6
million, compared with $79.6 million for the comparable period in fiscal 2000.
Income before income tax provision increased to $4.5 million, from $1.6 million.
Net income increased 91.8% to $2.8 million, or $0.54 per diluted share, in the
nine months ended June 30, 2001 from $1.5 million, or $0.28 per diluted share,
in the same period in fiscal 2000.


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

The Repair Group's net sales in the first nine months of fiscal 2001 declined
7.1% to $49.7 million, from $53.6 million in the corresponding period in fiscal
2000. Repair volumes for the older engine types continued the decline that the
Company experienced during fiscal 2000 and the first half of the current fiscal
year. As the Company expected, demand for repairs to older model JT8D engines
continued to decline due to the continued retirement and reduced utilization of
older model aircraft. In addition, there was a reduction in repair volume
related to the CFM-56 engines due principally to the continued encroachment of
the engine OEMs into the marketplace. During the first nine months of fiscal
2001, reduced sales volumes for repair services again adversely impacted the
Repair Group's operating income. This negative impact was partially offset by
the positive impact of improved margins on the sales of replacement parts.
However, the overwhelming contributor to the Company's sustained profitability
in its Repair Group, in spite of its reduced sales volumes, has been the
positive impact of the weaker euro during the first nine months of fiscal 2001,
when compared to the same fiscal 2000 period. Because the majority of its
non-U.S. operation's sales are denominated in U.S. dollars, while the majority
of its related costs are denominated in local (euro) currency, the weaker euro
has resulted in improved operating margins in the first nine months of 2001 when
compared to the same period in fiscal 2000.

Selling, general and administrative expenses were $6.7 million in the first nine
months of fiscal 2001 compared to $6.3 million for the comparable period in
fiscal 2000. During the first nine months of fiscal 2001 selling, general and
administrative expenses were negatively impacted by a $0.6 million increase in
the Repair Group's provision for doubtful accounts, partially offset by the
positive impact of a weaker euro as discussed previously.

Operating income for the first nine months of fiscal 2001 increased 20.7% to
$3.7 million, or 7.5% of net sales, from $3.1 million, or 5.8% of net sales, in
the comparable period in fiscal 2000.


<PAGE>   8



AEROSPACE COMPONENT MANUFACTURING GROUP ("ACM GROUP")

Net sales in the first nine months of fiscal 2001 increased 18.3% to $30.8
million, compared with $26.1 million in the same period 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. 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 plc for business and regional jets, as well as transport and
surveillance aircraft. Net sales in the first nine months of fiscal 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 were $1.7 million in the first nine
months of fiscal 2001 and 2000.

The ACM Group's operating income in the first nine months of fiscal 2001 was
$2.3 million, or 7.5% of net sales, compared with $0.9 million, or 3.4% of net
sales, in the comparable 2000 period. The Group's operating income in the first
nine months of fiscal 2001 benefited by $0.8 million as a result of improved
efficiencies resulting from higher production volumes. The operating profit in
the first nine months of fiscal 2001 also benefited by $0.4 million due to
process improvements. These improvements were partially offset by a $0.5 million
increase in material costs due to a shift in the product mix towards products
requiring more costly materials. Operating income as a percentage of net sales
also benefited in the first nine months of fiscal 2001 from the decline in the
market price of a key raw material.


CORPORATE UNALLOCATED EXPENSES

Corporate unallocated expenses, consisting of corporate salaries and benefits,
legal and professional and other corporate expenses, were $1.5 million in the
first nine months of fiscal 2001, compared with $1.7 million in the comparable
period in fiscal 2000. Corporate unallocated expenses were favorably impacted by
$0.3 million of lower expenses related to employee retirement and other
benefits, charitable contributions, consulting and general insurance. This was
offset by a $0.2 million increase in legal and professional expenses and
management incentive expense in the first nine months of fiscal 2001.


OTHER/GENERAL

Interest income increased to $0.4 million in the first nine months of fiscal
2001 compared with $0.1 million in the comparable period in fiscal 2000 due
primarily to the increase in cash and cash equivalents in fiscal 2001. Interest
expense was $0.9 million in the first nine months of fiscal 2001 and $0.8
million in the comparable period in fiscal 2000. Interest expense was negatively
impacted by higher average borrowings under the Company's revolving credit
facility, offset in part by lower interest rates.

Other income, net increased $0.6 million in the first nine months of fiscal 2001
compared with the first nine months of fiscal 2000. This was principally due to
an increase in foreign currency gains resulting from the impact of the weakening
of the euro on the carrying values of certain monetary assets and liabilities of
the Company's non-U.S. subsidiaries.


THREE MONTHS ENDED JUNE 30, 2001 COMPARED WITH THREE MONTHS ENDED JUNE 30, 2000

Net sales in the third quarter of fiscal 2001 increased 6.1% to $27.7 million
compared with $26.1 million for the comparable period in fiscal 2000. Income
before income tax provision increased to $2.2 million from $0.1 million. Net
income increased to $1.5 million, or $0.29 per diluted share, in the quarter
ended June 30, 2001 from $0.1 million, or $0.01 per diluted share, in the same
quarter in fiscal 2000.


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

The Repair Group's net sales in the third quarter of fiscal 2001 declined 2.1%
to $16.1 million from $16.5 million in the corresponding period in fiscal 2000.
Selling, general and administrative expenses in the third quarter of fiscal 2001




<PAGE>   9

increased 17.5% to $2.4 million from $2.0 million in the same period in fiscal
2000. The Repair Group's selling, general and administrative expenses were
negatively impacted during the third quarter of fiscal 2001 by a $0.4 million
increase in the Group's provision for doubtful accounts. Operating income in the
third quarter of fiscal 2001 increased to $1.2 million, or 7.7% of net sales,
from $0.3 million, or 1.7% of net sales, in the third quarter of fiscal 2000.
The business factors resulting in these changes and relevant trends affecting
the Repair Group's business during the third quarter are comparable to those
described in the preceding discussion for the first nine months of fiscal 2001.

AEROSPACE COMPONENT MANUFACTURING GROUP ("ACM")

Net sales in the third quarter of fiscal 2001 increased 20.0% to $11.5 million
compared with $9.6 million in the same fiscal 2000 period. The increase in net
sales is primarily attributable to an increase in shipments of components for
military aircraft. Net sales in the third quarter of fiscal 2001 also benefited
from an increase in the number of AE series new generation jet engines built by
Rolls-Royce plc for business and regional jets, as well as transport and
surveillance aircraft.

Selling, general and administrative expenses were $0.6 million in the third
quarter of fiscal 2001 compared with $0.5 million in the third quarter of fiscal
2000. The increase in selling, general and administrative expenses is primarily
attributable to an increase in commissions expense as a result of the higher
sales levels.

The ACM Group's operating income in the third quarter of fiscal 2001 was $1.3
million, or 10.9% of net sales, compared with $0.6 million, or 6.1% of net
sales, in the same 2000 period. The Group's operating income in the third
quarter of fiscal 2001 benefited by $0.7 million as a result of improved
efficiencies resulting from higher production volumes. The operating profit in
the third quarter of fiscal 2001 also benefited by $0.3 million due to reduced
tooling expenditures. These improvements were partially offset by a $0.7 million
increase in material costs due to a shift in the product mix towards products
requiring more costly materials.


CORPORATE UNALLOCATED EXPENSES

Corporate unallocated expenses, consisting of corporate salaries and benefits,
legal and professional and other corporate expenses, were $0.6 million in the
third quarter of fiscal 2001 and 2000. In the third quarter of fiscal 2001
reductions in employee retirement and other benefit expenses totaling $0.1
million were offset by increases in legal and professional and management
incentive expenses.


OTHER/GENERAL

Interest income was $0.2 million in the third quarter of fiscal 2001 compared
with $0.1 million in the corresponding period of fiscal 2000 due primarily to
the increase in cash and cash equivalents in fiscal 2001. Interest expense was
$0.3 million in the third quarter of fiscal 2001 and 2000. Interest expense in
the third quarter of fiscal 2001 was negatively impacted by higher average
borrowings under the Company's revolving credit facility, offset by lower
interest rates.

Other income, net increased by $0.5 million in the third quarter of fiscal 2001
compared with the comparable period in fiscal 2000. This was principally due to
an increase in foreign currency gains resulting from the impact of the weakening
of the euro on the carrying values of certain monetary assets and liabilities of
the Company's non-U.S. subsidiaries.


B.       FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents increased during the first nine months of fiscal 2001
to $12.4 million from $4.7 million at September 30, 2000. 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 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 United States. Distributions
of these non-U.S. subsidiary earnings would be subject to U.S. income taxes. The
Company has provided for U.S. income taxes on the undistributed earnings of
non-U.S. subsidiaries accumulated in fiscal 2001.








<PAGE>   10

Cash flow activity for the first nine months of fiscal 2001 is presented in the
Consolidated Condensed Statements of Cash Flows. An increase in the ACM Group's
inventories of $0.9 million, offset by a net reduction in the Repair Group's
inventories of $0.3 million required $0.6 million. The increase in the ACM
Group's inventories is primarily attributable to the overall higher net sales
levels of the Group. The Repair Group's inventory change is attributable to a
$1.2 million increase in raw materials for orders expected to ship in the fourth
quarter, offset by a $1.5 million reduction in replacement parts inventories in
response to lower replacement part sales. An increase in the ACM Group's
accounts receivable of $3.8 million was offset by a decline in the Repair
Group's accounts receivable of $4.2 million. The increase in the ACM Group's
accounts receivables is primarily attributable to the Group's overall higher net
sales levels. The decrease in the Repair Group's accounts receivable is
primarily attributable to overall lower sales levels, as well as an increase in
the Group's allowance for doubtful accounts. Working capital was $35.9 million
at June 30, 2001, compared with $28.7 million at September 30, 2000. The current
ratio was 3.0 and 2.6 at June 30, 2001 and September 30, 2000, respectively.

Capital expenditures were $2.6 million in the first nine months of fiscal 2001,
compared with $3.3 million in the comparable period in fiscal 2000. The Company
anticipates making $4.2 million of capital expenditures during fiscal 2001.
These capital expenditures consist of expenditures for equipment that will
enhance the Repair Group's turbine repair services, other new equipment and the
upgrade of existing equipment. The Company's projection of capital expenditures
for fiscal 2001 decreased by $1.8 million from the previous projection due
primarily to the rescheduling of certain expenditures to fiscal 2002.

The Company's long-term debt as a percentage of equity at June 30, 2001 was
35.6%, compared with 26.3% at September 30, 2000. During the third quarter the
Company increased its existing $6.0 million revolving credit facility to $10.0
million. As of June 30, 2001, the Company had $6.3 million outstanding against
its $10.0 million revolving credit facility.

The Company believes that the funds available under its revolving credit
facility and anticipated funds generated from its operations will be adequate to
meet its liquidity requirements through the foreseeable future.


B.       EFFECTS OF FOREIGN CURRENCY AND INFLATION

The Company generates a substantial portion of its revenues in international
markets, which subjects its operations to the exposure of foreign currency
exchange fluctuations. The effects of foreign currency exchange flunctuations on
the operating results of the Company were discussed previously.

The Company believes that inflation has not materially affected its results of
operations in the first nine months of fiscal 2001 and 2000 and does not expect
inflation to be a significant factor for the balance of fiscal 2001.


C.       RECENTLY ISSUED ACCOUNTING STANDARDS

The Financial Accounting Standards Board recently issued Statement of Financial
Accounting Standard No. 141 (SFAS 141), "Business Combinations" and SFAS 142,
"Goodwill and Other Intangible Assets." The statements are effective for the
Company on October 1, 2002 but earlier adoption is allowed. SFAS 142 will result
in modifications relative to the Company's accounting for goodwill and other
intangible assets. Specifically, the Company will cease goodwill and certain
intangible asset amortization beginning on the date of adoption of this
statement. Additionally, intangible assets, including goodwill, will be
subjected to new impairment testing criteria. The Company has not had ample time
to evaluate the full impact of adoption on the Company's financial statements.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risk from changes in interest rates and foreign
currency exchange rates as part of its normal operations. At June 30, 2001, the
Company had several forward exchange contracts for durations of up to three
months to purchase foreign currencies aggregating U.S. $4.4 million. There have
been no material changes in the



<PAGE>   11

Company's market risk during the nine months ended June 30, 2001. For additional
information refer to Item 7A of Form 10-K for the year ended September 30, 2000.


                           PART II. OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits

                  None.

         (b)      Reports on Form 8-K

                  None.


                                   SIGNATURES
                                   ----------

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


                                     SIFCO Industries, Inc. and Subsidiaries
                                                  (Registrant)



            Date   August 8, 2001          /s/ Jeffrey P. Gotschall
                   --------------          ------------------------
                                             Jeffrey P. Gotschall
                                                President and
                                            Chief Executive Officer



            Date   August 8, 2001          /s/ Frank A. Cappello
                   --------------          ---------------------
                                              Frank A. Cappello
                                           Vice President-Finance
                                       (Principal Accounting Officer)